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Multi-Client vs. Proprietary Acquisition

The document discusses the multi-client data licensing business model. It compares multi-client surveys, which are acquired by geophysical companies over large areas and then licensed to multiple clients, to proprietary surveys which are acquired exclusively for a single client. Multi-client surveys allow lower per-unit costs and drive exploration interest. The multi-client model benefits exploration companies, governments, and geophysical contractors by spreading costs and facilitating regional exploration. It is most successful where regular lease sales provide predictable acreage and confidentiality periods allow sufficient data marketing opportunities. Data licensing agreements govern client use of multi-client data to protect intellectual property.

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La Foliak
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152 views

Multi-Client vs. Proprietary Acquisition

The document discusses the multi-client data licensing business model. It compares multi-client surveys, which are acquired by geophysical companies over large areas and then licensed to multiple clients, to proprietary surveys which are acquired exclusively for a single client. Multi-client surveys allow lower per-unit costs and drive exploration interest. The multi-client model benefits exploration companies, governments, and geophysical contractors by spreading costs and facilitating regional exploration. It is most successful where regular lease sales provide predictable acreage and confidentiality periods allow sufficient data marketing opportunities. Data licensing agreements govern client use of multi-client data to protect intellectual property.

Uploaded by

La Foliak
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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The Multi-Client

Data Licensing
Business Model
Geophysical surveys are conducted on either a multi-client or proprietary basis. Proprietary or exclusive surveys
are acquired by a geophysical company for an individual client who owns the data, and they usually cover limited
acreage.
In contrast, multi-client surveys are acquired by the geophysical company for its own use and are generally
collected over large acreage. The geophysical company owns the data which it then markets and licenses to as
many clients as possible, making the survey less expensive on a per-unit-area basis than proprietary data and
driving interest in the potential leasing acreage.

Multi-Client vs. Proprietary Acquisition


MULTI-CLIENT ACQUISITION PROPRIETARY OR EXCLUSIVE ACQUISITION
 Develops a product with geophysical data available  Provides a service with geophysical data only available
for licensing to the E&P company

 Geophysical company designs survey based on  Geophysical Company and E&P company enter into
market (E&P companies) interests – developing agreement for acquisition of geophysical data over a
prospects, delineating reservoirs and for use in pre-determined area (e.g. acreage under lease)
preparing for future licensing rounds (lease sales)

 Geophysical company bears all risk, pays cost of  Geophysical Company provides the vessel(s) and
project (financial risk can be mitigated by crews to acquire data
pre-financing from customers)

 Geophysical company owns the geophysical data  E&P company owns the geophysical data

 Lower cost of the data to users (E&P companies),  E&P company pays full cost of project (no risk to
allowing more investment in other E&P activities geophysical company

 Geophysical company promotes (markets) the data  Cost of geophysical data is on a per acre basis, which
which in turn drives interest in licensing (leasing) is much higher than if only licensed. Cost of
acreage acquisition is dependent on supply/demand of vessel
and crew.

Today, the multi-client data business model plays a preeminent role in the geophysical industry. IAGC’s members
acquire the majority of marine 3D data around the world and a large proportion of the land and transition zone (e.g.
shallow waters or nearshore areas) 3D data in North America on a multi-client basis. The industry continues to ac-
quire large multi-client 2D surveys in frontier basins and these surveys play a very important role in exploration.

The multi-client data licensing business model has significant economic advantages for E&P companies, host govern-
ments and geophysical companies. The multi-client business model spreads the costs of data acquisition and pro-
cessing over time and among multiple customers. Under the model, the geophysical company initiates and conducts
projects of general industry interest at its own financial risk. Restricted non-transferrable data-user licenses are
then sold to individual E&P companies for a fraction of the cost of acquiring and processing the data themselves al-
lowing multiple E&P companies the opportunity to evaluate resource potential in particular area along geological
trends that will facilitate higher exploration and development success rates.
STAKEHOLDER BENEFITS OF MULTI-CLIENT BUSINESS MODEL

E&P Company  Access to high quality data for a fraction of the cost of exclusive proprietary ownership
 Allows company to prospect on trend or regional basis – facilitating higher exploration
and development success rates
 Ability to “ramp up” knowledge base very quickly using available “off the shelf” data
 Lowers the economic hurdles to exploring and producing oil and gas, therefore allowing
smaller E&P companies access and entry to riskier and often more expensive plays
 Improves the efficiency of E&P investments, resulting in more investments
 Reduced risk associated with survey permissions, acquisition and data processing
Host Government  Lower barriers to entry for E&P companies thus promoting more active and competitive
licensing rounds
 Rapid and efficient development of reserves
 Provides data to make decisions about operational matters
 Provides opportunity to create subsurface maps that can help in the stewardship of the
natural resources
Geophysical Contractor  Opportunity to showcase new technology to a broader client base as well as to govern-
ments (new acquisition and processing technology)
 Greater control in deployment of assets

Where the Multi-Client Business Model is Successful


The multi-client business model continues to be the most independent E&P companies actively and successfully
beneficial and successful on the U.S. Gulf of Mexico acquiring open acreage.
continental shelf, the Norwegian continental shelf,
The competitive markets provide more buyers of
Australia, Indonesia and onshore North America, where
multi-client geophysical data. In turn, the multi-client
there exists a robust multi-client investment market and
data promote competitive lease sales or licensing rounds
corresponding successful exploration efforts.
and ensure that host governments receive market value
Although the U.S. and Norwegian governments have for the hydrocarbon resource.
different approaches to confidentiality of data and leasing
The multi-client business model can benefit stakeholders
or licensing of acreage for oil and gas exploration, typically
in regions that include some key characteristics:
multi-client geophysical data is available for licensing for
two or more lease sales or licensing rounds in both  Licensing rounds or lease sales are held regularly, on
markets. The lease sales or licensing rounds and acreage schedule, with pre-determined areas available for
“turnover” are predictable, which is important to licensing or leasing announced well in advance of
encouraging a geophysical company’s investment to each licensing round or lease sale;
conduct a multi-client survey. Lease sales or licensing
 Smaller parcels (acreage) are offered for licensing or
rounds are scheduled in advance with a clear indication of
leasing, thus promoting greater competition for
the acreage that will be included, allowing geophysical
acreage;
companies to plan and execute seismic projects based on
acreage that will be made available for leasing or  The confidentiality period (sometimes called
licensing. exclusivity period) for the multi-client geophysical
data is a minimum of 15 years, allowing the data
In addition, the confidentiality period for multi-client data
owner multiple licensing rounds or lease sales to
in these regions is comparably longer than in other
market the multi-client geophysical data; and
countries, allowing the seismic contractor the opportunity
to achieve a reasonable return on their investment. These  At the expiry of the confidentiality period, only the
regions are also competitive with major international and processed data is available for release to the public.
Data Licensing Agreement:
Integral Element of the Multi-Client Business Model
When a geophysical company sells the right to use its multi-client data, it enters into a data licensing
agreement with its client. The licensing agreement governs the client’s use of the geophysical data (as well
as products derived directly from the data), protecting and preserving the geophysical company’s valuable
intellectual property in the data.
The licensing agreement establishes that the data is the property of the geophysical company and the client
licensee is granted the right to use the data to conduct internal business, but is prohibited from disclosing,
transferring or copying the data to any other parties, including by means of asset sales or corporate mergers.

Multi-Client Business Model:


The Exploration Approach of Choice
The multi-client business model delivers preferred data products to the marketplace, making it the
exploration model of choice by E&P companies. The revenue generated by the business model helps pay
for research and development in new acquisition and processing technologies that improve subsurface
imaging and assure vital efficiency gains needed for the future of exploration. The future of the
geophysical industry and its continued capital investment in new data and technology that will fuel future
successful exploration efforts will depend on the continued viability and success of the multi-client
business model.
The multi-client survey acquisition business model has been a proven successful for decades. However,
there are threats that jeopardize the viability of this model. These include but are not limited to changes in
the terms of confidentiality periods, issuing tenders for multi-client geophysical data for projects that are
actually proprietary, thus negating the cost-benefit of economies of scale as well as the intended use of
data licensing agreements.
Large regional multi-client surveys are beneficial to host countries offering areas for leasing and an
economical option for companies exploring for oil and gas and will continue to help expedite development
of oil and gas reserves around the world.

Environmental Stewardship
The geophysical industry takes a great deal of care and consideration of potential impacts to the marine
environment. In its efforts to operate in an environmentally responsible manner, the industry implements
measures to ensure that marine mammals are further protected from direct or indirect harm from its operations.
For more than 40 years, the industry has demonstrated its ability to operate seismic exploration activities in a
manner that protects marine life. Various research studies indicate that the risk of direct physical injury to marine
mammals is extremely low, and currently there is no scientific evidence demonstrating biologically significant
negative impacts on marine mammal populations.

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