Annual Report 2011 - PGS

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Operations Operations HSEQ performance delivers cost effective operations State-of-the-art fleet PGS has shown an improving HSEQ performance over the last years and Operations aims at improving the results even further Building Competitive Advantages PGS’ Operations business unit supports Marine Contract and MultiClient with reliable and efficient production capacity. Efficient operation of sophisticated systems enhances customer satisfaction and PGS’ profitability. Health, Safety, Environment and Quality (HSEQ) performance is important for safe and efficient operations of seismic vessels. Operations aims at improving PGS’ HSEQ results, in particular the lost time injury incidents, where the Company experienced an increase in 2011. PGS’ HSEQ management systems set the framework for high quality product and service by continuous risk assessment of all operations, job tasks, processes and systems. These systems have undergone a thorough review by DNV this year in conjunction with the OHSAS 18001 certification process. During this process the systems and implementation of the systems offshore and in the office were reviewed. Training and continuous development of employees are important to maintain skilled and motivated staff. Automation of work processes by new vessel and equipment design contributes to improved efficiency and reduced risk for personnel injuries. The overall Lost Time Incident Frequency (LTIF) for vessel operations increased to 1.29 per million man-hours in 2011 compared to 0.89 in 2010, while PGS experienced a decrease in the Total Recordable Case Frequency (TRCF) to 2.06 per million manhours compared to 2.80 in 2010. PGS also has a high environmental focus and strong awareness of Corporate Social Responsibility at all levels. The Ramform Advantage PGS is recognized throughout the industry for its unique Ramform vessels. The seismic vessels have a delta-shaped hull that is distinguished by an extremely wide aft beam, twice the width of a conventional vessel. The broad aft workspace allows for efficient deployment and retrieval of streamers and seismic sources. The Ramform’s propulsion power is also industry leading. The Ramform S-class has enough thrust to tow a 1.4-kilometer wide spread of streamers more than eight kilometers long. The acknowledged efficiency and productivity benefits of PGS Ramform vessels, along with the effectiveness of PGS’ personnel, make the PGS fleet industry leading. In 2011, PGS’ Marine streamer fleet consisted of: JJ Seven Ramform vessels, capable of towing up to 22 streamers each JJ One vessel in the medium-capacity segment, capable of towing 10 streamers JJ Three classic streamer vessels, capable of towing up to eight streamers JJ Two 2D/source vessels. The Nordic Explorer, one of the three classic streamer vessels, was converted from 3D to 2D in December 2011. The Nordic Explorer replaced the Harrier Explorer as a 2D/source vessel; the latter was returned to its owner when the vessel’s charter expired in September 2011. Continuous Focus on Reducing Technical Downtime — Best-in-Class Performance Technical downtime as a percentage of total fleet time has dropped sharply from roughly 14 percent in 1992 to about 3.5 percent in 2011. Similarly, performance increased from approximately 80 percent in 1997 to 91 percent 28 PGS Annual Report 2011
Operations in 2011. The performance figure shows the relationship between actual fleet survey production hours and downtime, excluding standby, unfavorable weather and steaming time. From 2010 to 2011, the fleet performance figure declined slightly. In order to improve performance, enhance profitability and cut costs, PGS implemented a profit improvement program in the fourth quarter of 2011, targeting a USD 50 million EBIT run-rate improvement by year-end 2012. The Operations business unit is responsible for five components of the profit improvement program: JJ JJ JJ JJ JJ Yard stays management — tighter control over costs, quality and duration General procurement initiatives — focus on general cost level and vendor count Reduction of non-productive vessel time — reexamine overall logistics and betweenproject activities Support and chase vessel cost management — launch initiatives to reduce these significant cost components of seismic operations; assess wide-scale fleet renewal to improve fuel efficiency as well as general operating efficiency of the support fleet Reorganizational upgrading —implement organizational changes that improve efficiency, safety and control while reducing expenses. Ramform Titan-class In late 2010, PGS launched a fleet renewal and expansion program. Two new Ramform Titanclass vessels were ordered from Mitsubishi Heavy Industries Ltd. The vessels will continue with the proven design advantages of PGS’ current Ramform fleet and implement capability enhancements across several key performance parameters. Delivery of the first vessel is scheduled for first quarter 2013, with the second being delivered in fourth quarter 2013. Estimated 2012 capital expenditures for the new builds will amount to approximately USD 200 million out of a project total of some USD 500 million, or USD 250 million per vessel. The vessels will further strengthen PGS’ premier status in the fast growing HD3D market segment, where a premium seismic data product is required in order for customers to gain a solid understanding of the geology and resource potential of deep targets with complex structures. For conducting HD3D surveys large spreads are required, with long offsets and dense streamer separation. The Ramform Titanclass vessels are even better suited for these premium surveys than the existing Ramform fleet. GeoStreamer Rollout GeoStreamer is a proprietary, dual sensor streamer technology unique to PGS. GeoStreamer eliminates the receiver ghost during acquisition and offers oil companies better penetration, enhanced resolution, reduced risk and improved imaging and attributes. Demand for GeoStreamer acquisition has surpassed all expectations. As the search for new oil and gas fields becomes more difficult, exploration increasingly targets deeper reservoirs that present more challenging conditions and increasingly complex stratigraphic traps that confound traditional seismic studies. GeoStreamer technology was commercialized in 2008 and quickly gained wide acceptance among oil companies. PGS rolled out the new streamer technology on 2D vessels in 2008 to prove its benefits to customers. In 2009, PGS extended the rollout to 3D operations and the Atlantic Explorer was the first 3D vessel to have the new streamer technology installed. In late 2009, Ramform Challenger was equipped with GeoStreamer to become the Company’s first high-capacity Ramform vessel to deploy the advanced streamer technology. Survey and vessel performance has been excellent since the conversion to GeoStreamer. Considerable demand for GeoStreamer surveys justified an accelerated GeoStreamer rollout in 2010. The Ramform Valiant was upgraded to a GeoStreamer vessel in the second quarter and Ramform Explorer followed early in the third quarter. GeoStreamer rollout continued in 2011, with the Ramform Viking in the first quarter and PGS Apollo in the second quarter. The Ramform Vanguard is scheduled for GeoStreamer upgrade in 2012. PGS is recognized throughout the industry for its unique Ramform vessels PGS Annual Report 2011 29
Page 1 and 2: Operations Annual Report 2011 www.p
Page 3 and 4: Key Financial Figures Key Financial
Page 5 and 6: MultiClient revenues of USD 502 mil
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