“Excellence is what pays off in the end...”

[Satinder]: Let’s begin by asking you about your educational background and your work experience.

I got my formal degrees in mathematics working in the area of non-linear partial differential equations and came into the industry in 1981. My dissertation included computer programs, which was a bit unusual at the time for a mathematician, for solving non-linear partial differential equations and of course migration is based on solving partial differential equations and so that’s how I got into the business, first as a programmer, writing programs and fixing software and the like.

[Satinder]: So, tell us something about the highlights of your career.

I think the first highlight was in transitioning from mathematician to geophysicist. It took me about 3 years to get up to speed in geophysics and of course this was on-the-job training. Then I had the good fortune to publish some papers with some very good people which helped me a lot. Another highlight was when I was able to take a position overseas in Singapore. In 1990 I went to open a Research and Development Office in Singapore to address the needs of the Far East and the Austral-Asia region. This posting helped me gain an appreciation for the business side of our science as well as giving me a more global perspective. A turning point in my career came when I returned from Singapore and got into the management of Research and Development and which led to becoming Vice President for Research and Development. This was a very stimulating and enjoyable job but I had always been very interested in the business side so I jumped at the opportunity in the late 90s to move into the business side and began managing the Data Processing Organization in our company. And of course I consider my move back to the technology organization to become a Schlumberger Fellow another turning point in my career. Finally, the opportunity to be President of SEG is a great honor and responsibility.

[Satinder]: What are some of the personal attributes that helped you achieve this position? Was it a lot of hard work or tremendous amount of self-belief or something else?

Of course hard work is the most important part of it but you also have to be optimistic and have an open mind. I think I have been fortunate in that I came from outside of geophysics, so I was relatively “unburdened” with knowledge of what had been tried already. The first thing that I learned when I joined the industry is that there are a lot of very smart, very capable people working to solve industry problems. One of the most important factors is the ability to keep an open mind and continue to try things – many times, the solution has been considered before, but some pieces of the puzzle have been put together which suddenly make it possible. I can’t count the number of times I have heard colleagues say that their greatest achievements initially met with “we tried that before” or “it will not work”, so while it is a good idea to listen to advice, you have to push until either you prove the idea, or you understand why it does not work.

[Bill]: Going back to a point you mentioned at the luncheon, during your 20 years of managing R&D do you have examples of failures, do projects ever get that far or how long would it take before one recognizes the failure?

Well, that’s an interesting question because in fact, in managing Research and Development, I think one of the most difficult things you have to do is make a call on where you put your resources. So, for me, it’s not usually a question of technology failing or succeeding – you don’t run into many ideas that are simply incorrect or impossible – but you do run into proposals for technology development that are perhaps before their time or the barriers to overcome seem too significant. I have always believed in allocating a portion of R&D investment to relatively short-term projects aimed in a two year time frame with the rest of it in more risky endeavors that may not pay off for another 5 years or more. And you have to accept that some projects may not pay off at all. Of course no one plans to invest in projects that will not succeed, but you have to be aware that long term research does involve risk and that you expect some of the efforts to pay off with commercial products and some of them may not pay off. You may run into barriers that are insurmountable in the time frame that you are willing to pursue them and that’s just part of research. It’s just like drilling oil wells. No one wants to drill a dry hole but if you are never drilling any dry holes then you may not be taking risks that you need to be taking to find the really large strikes.

[Bill]: So concerning dry holes, my company along with other independent O&G companies, has taken the attitude that exploration risk for large conventional reserves is too high in frontier and off- shore regions. Consequently EnCana drills around 5000 wells a year with very high success rates into low risk unconventional “Resource Plays” such as tight gas sands and CBM. So is there any attempt to address the needs of this type of on-shore North American “Resource Play” drilling?

On-shore seismic in North America faces some specific challenges not the least of which is the economics of the situation. Land data in general is relatively expensive when compared to marine data, particularly for 3-D surveys. Because North America is a relatively mature province, exploration plays tend to be small and other factors such as permitting issues and difficult terrain compound the challenges. The industry has done a lot to try to address this market. Consider for example the success of sparse 3-D surveys with special purpose lightweight equipment. But you asked about new developments, so I would say that we will probably see application of very high channel-count systems applied to this problem.

[Satinder]: Craig, before I go into the next one, let me ask you who were some of your mentors?

I had the good fortune of working with a tremendous group of people when I first came into the industry. When I joined Western Geophysical my colleagues included Bruce Gibson, Walt Lynn, Oz Yilmaz, Stew Levin and Helmut Jakubowicz and many other well-known names. As far as early mentors, I count Ken Larner and Ron Chambers as well as Carl Savit, Buck Mateker and Daimir Skerl.

But I believe “mentoring” is not just for your early career. For example I had the opportunity to work with Fred Barr and Laurent Meister after one of the mergers placed them in my department. In fact, at one point when I was managing Research and Development in Western Geophysical in Houston, I had both Frank Levin and Sven Treitel “working for me”. They had retired—Frank from Exxon and Sven from Amoco and they were kind enough to enter a consulting relationship with Western Geophysical. I think I probably learned more from those two guys who were supposedly reporting to me than from any other mentoring relationship. In particular, one of the things that both of them stressed very strongly to me—and you asked me about this earlier—is that besides working hard and doing good science, it is essential to publish your results. There are barriers to doing this. Companies always have issues with intellectual property and publishing data—and that’s fine, they need to. But the professional geophysicist needs to strive to overcome those issues—get the intellectual property protected, do whatever you need to do, but publish your work. In the end, it will be good for your company or institution, good for your career and it will benefit our science.

[Satinder]: I was going to ask you about the mergers and the takeovers that have been weighing on the industry over the last more than a decade now, because when I joined ONGC in India we were using Western Geophysical software on IBM systems and at that point of time I came across names like yourself, Ken Larner and Les Hatton and Bruce Gibson and all these people. Somewhere down the road, I think in the late 80s this trend of mergers and takeovers started and then Western Geophysical became WesternGeco and subsequently where it is now bought out by Schlumberger. I was going to ask you, do you think this trend is likely to continue and follow what Charles Darwin once said “survival of the fittest” type of a thing, or there is going to be a change; what do you expect?

Yes, it is an organic process and I think there could be more consolidation in the geophysical business, but currently, the business climate makes acquisitions and mergers more difficult because the price is higher. Mergers and acquisitions are common today in all business, but one aspect of our business is different in this regard. Geophysicists are extremely optimistic people, obviously, because they are always starting new companies, often in niche markets that then very often grow, so even though we see a lot of consolidation, the number of companies competing does not seem to decrease. One thing for sure, the small entrepreneur can still get into this business.

[Satinder]: Since you have experienced mergers and acquisitions, what differences in work culture or management changes did you perceive in these mergers?

The first thing I would say is that every time I have experienced one of these changes in the management structure of the company—and sometimes this happens as a result of internal changes as well as mergers and acquisitions—the people who are happiest and most successful in the process are the ones who stay focused on the business. To be sure, one has to learn and adopt the culture of the new organization but in doing so, it’s easy to get swept up into the machinery of a merger or a management change. If this consumes you, then you may not be focused on the business which is bad with or without a merger. Another point is to be open to change and embrace it because there is always a better way to do something but don’t forget about the thing that makes the business run, because the success of the merger lies in providing better products and services to the customer.

[Bill]: At your lunch talk, you also mentioned the number of new or emerging challenges, and multi-component has been one of these for a number of years now. However you didn’t mention much about ocean bottom cables or would that be part of multi-component? Or maybe OBC is categorized with permanent installations?

I certainly did not mean to slight OBC systems—in fact my company has just introduced a new such system—Q Seabed— in the last year. Permanent installations have been done using OBC systems as well as other systems. As you mention, a great advantage of OBC systems is the ability to acquire shear wave data. We still have a lot of opportunity to improve our understanding of shear wave data and improve on the processing. But the real challenge for the industry in the OBC market is the fundamental cost of OBC data relative to towed streamer data.

[Bill]: But that must have been said about 3D in its infancy.

That’s true.

[Bill]: By now there should be new technology e.g. lighter single sensor digital phones that enable cost effective acquisition of multi-component recording, at least on land.

To be fair, OBC costs per square kilometer have come down dramatically over time, but the costs of 3-D marine have also come down since the advent of 3-D seismic. So the cost factor still weighs heavily for towed marine acquisition. Bottom referenced systems are the only answer for highly congested areas and for problems that require multi-component data. Unless special requirements such as these exist, it gets down to cost per square kilometer.

[Satinder]: At the SEG meeting in Denver you had mentioned, I don’t remember whether it was in any of your talks, but somewhere I read that, “Increased demand for energy can be satisfied through new techniques and increased effort, but not much is being done.” With the high price of the oil these days, do you think the situation is still the same or there is some change coming up?

Seismic budgets have increased from the market surveys I have seen but you have to ask the oil companies for the real situation. I have heard that budgets will increase 10% to 15%, but of course this is anecdotal information. When I said that efforts are lacking, I was actually referring to investment in research and development as well as exploration. In any case, I think the industry will have to add people. Whether this is done for the long term by hiring or if it will be done in some other way, I don’t know.

[Bill]: So, do you have trouble staffing or maybe you don’t have a pressing business need to warrant an increase in staff?

I think the service sector has stabilized. You have to remember, the service sector was undergoing significant restructuring just a year ago. So we are naturally cautious about expansion. But our sector is very fast to react to an upturn in business, so I expect to see rebuilding activity begin if it has not already.

[Bill]: Right—in case commodity prices go the other way?

There are several forces at work in the seismic service sector that are unique. First of all, despite high oil prices, the seismic service sector has remained depressed since the peak in 1999 which is quite a different story than the drilling business and other oil field services. Another significant factor is that there are new players in the market from, for example, the former Soviet Union and China. I think the market has adjusted to these factors and as I said, I think it is stable—for a while, I hope!

[Penny]: The March 2005 AAPG Explorer magazine had a focus on “Seismic 2005” with an article suggesting recent buoyancy in the mood of the seismic industry. The issue had a separate full page advertisement by one of those new players. Does the entry of new players in traditional acquisition markets affect planning and investment in seismic operations?

As I said, certainly other entities have entered the market who used to work just for national oil companies and so it’s not just Chinese companies.

[Penny]: Do these new entities use or purchase existing hardware from traditional equipment vendors or are they developing their own technology and manufacturing divisions?

I believe that some of the companies buy equipment from commercial sources. I should say my company doesn’t sell its proprietary hardware but there are manufacturers that do and certainly seismic equipment is available on the market.

[Satinder]: Craig, in your opinion what are some of the most important areas of advancement in geophysics?

I really think that the key lies in acquisition technology. I have done a lot of work in the processing end of the business and we certainly can’t ignore the need to continue to develop algorithms, but we’ve come a long way with the information that we have derived from just traditional 3D seismic data and so I believe the future will be from enhancing data acquisition. We know that with higher resolution acquisition and more careful processing, we get better data. Better data then will provide opportunities for algorithmic development. I think that the acquisition side could experience some real breakthroughs with new technologies. The industry mantra is to get lighter, better, cheaper equipment and we have already seen this occur to a large extent. Compare the size of geophones from the 1920s when able bodied men could carry two at a time to today’s geophones. This gives you an idea where we could go in the future.

Permanent systems and the instrumented oil field may also be in our future. I would like to see the E-field Dream come into being. I would like to see permanently monitored oil fields. I think we’d learn an awful lot and we’d find leverage from using seismic to correlate changes in the reservoir in real time. So we have lots of opportunities, but I think the next step has to be more in acquisition and from there we’ll see the leverage effect and we’ll do more in processing.

[Bill]: You mentioned continuous monitoring mostly of say traditional off-shore reservoirs, maybe big reservoirs. But is there an effort, as in some parts of EnCana, to monitor engineering hydrofracing operations and maybe in situ real time tracking?

Probably this is an area where on-shore has a real advantage over off- shore in that on-shore you usually have abandoned wells that are nearby where you can put receivers, either permanently or on a semi-permanent basis, for passive seismic monitoring.

[Bill]: My impression is that there is more passive seismic monitoring in the US, not so much here in Canada, and micro seismic events are usually recorded with 5 or 10 receivers in one observation well. However there is usually no surface seismic recording that might be possible if the zones are shallow enough to record a micro seismic event. Do you see a future like that?

Micro seismic for sure and also active seismic. I recall some work that we did on-shore Louisiana with a combination of 3D VSP with surface seismic to delineate salt boundaries and unfortunately it came right on the cusp of a big down-turn of the industry. That kind of technique is exactly the new kind of integrated acquisition I am referring to.

[Bill]: Do you see a future for high channel density Q recording involved in say 3D VSP?

This gets into the proprietary technology from my company which I am happy to discuss. First of all, Schlumberger offers Q technology in the borehole already—Q Boreseis™—but it is not just about high channel count. It is about obtaining an accurate measurement in all aspects. There are fundamental limits to the number of stations that can be put into the borehole, but the accuracy of the measurements becomes even more important in this situation.

[Satinder]: I know some of this again may have overlapped with your talk and you may already have mentioned it but because this interview is going to be published in the RECORDER maybe you can probably mention it once again.

You devoted a lot of time doing research in different areas. Do you think that some basic research is being done in the oil companies, or has it just been to the service companies and the universities?

Well, again I am probably the wrong one to be asking, you should ask the oil companies, but I perceive it depends on the company. Some companies never stopped their research activities, they have carried on with the belief proprietary technology will translate into a competitive advantage. In the late 1980s and early 1990s, other companies didn’t perceive that their research investments were paying off so they scaled down or eliminated their research. Of course more reduction in research occurred as a result of consolidation in the industry. It may be that this consolidation will eventually lead to a renewed confidence in the value of proprietary research and a corresponding increase in research budgets, but I doubt that research will return to the levels seen in the late 1970s and early 1980s.

[Satinder]: Let me ask you the same question I asked Peter Duncan when he was here. After 3D seismic, time lapse, and multicomponent, do you think there is a sort of revolutionary technology on the horizon in the next couple of years we’ll hear about it?

I am sure Peter Duncan told you micro seismic. Well, it is very difficult to predict revolutionary or disruptive technologies because if I knew of something truly revolutionary, I wouldn’t be talking with you, I would be trying to do it. Seriously, as I said earlier, I think acquisition technology is ripe for breakthrough. One reason is that we have stretched the information available from current data to the limit. Another sign is that companies have significant problems to be solved and they probably will have funding to pursue this—provided oil pricing stays favorable.

[Satinder]: Let’s change gears here and start with something different. How do you like the role as SEG President?

It is one of the most exciting things one can do but I don’t mind that it is a relatively short commitment—it is fairly taxing. SEG has more than 24,000 members around the world and to have the opportunity to go around the world and meet people who are interested in our science and who are engaged in volunteering their time for their societies is something I will always treasure. When people volunteer to work in a professional society like ours they do it because they believe they want to contribute and because it is the right thing to do. It is very inspiring and it makes you feel that you have a mission and a heritage to uphold. It’s really invigorating and I am enjoying it.

[Satinder]: Good. You have already answered my next question. I was going to ask you, how does it help professionally, and why do people volunteer?

I think if you volunteer because you want a plaque to hang on the wall, or to put it on your resume, you are going to be very disappointed!

[Satinder]: Craig, can you tell us about some of the significant developments taking shape in the SEG?

The most significant trend is in globalization. There is more communication today than there has ever been and the oil business is using communication technology to transform itself very rapidly. People now expect to be hooked in no matter where they are, so that’s our great challenge in SEG— to make sure that all members are engaged and receive member benefits regardless of their location.

We have worked hard on our web site www.seg.org to deliver information to members. Our digital library offers research capabilities unheard of just a few years ago. Members can search for other members on line and can search Geophysics, TLE and other publications and then download those of interest. Besides our web activities, we want our programs to be global. We now have a distinguished lecturer for the Fall of 2005, Dr. Panos Kelamis from Saudi Aramco and he will be visiting venues in North America as well as in the Middle East and other places that he travels in the world. We are significantly aided in our globalization efforts by the Global Affairs Committee (GAC) who act as advisor and conscience in this regard.

Another significant effort is in the area of meetings. We have a challenge from our exhibitors to reduce the number of meetings and one way we address this is to try to combine efforts with other societies. Another challenge we face is to serve our members around the world in the area of meetings. One of the ways we try to address this is through our renewed emphasis on the forum series. SEG has traditionally offered the D&P Forum, a yearly event that has been very successful, but it has been restricted to this topic. Forums are rather easy to organize in comparison to full technical meetings or workshops, so we are beginning to hold more of these in locations around the world to serve the needs of our members. We hope to do this by using the forum format to focus on local problems in a multi-disciplinary way and attract world-class experts to the meeting. This is one way SEG can serve our members around the world.

[Bill]: So by multi-disciplinary would that include joint forums with the AAPG?

We could organize forums jointly with AAPG, SPE and other societies, but that is not necessary for the forum to be multidisciplinary. It can also be done informally with organizers using their networks to find people from other disciplines to participate.

[Penny]: Those aren’t organized quite the same way as the ones with the associated industry booths and sponsorship within the exhibition.

That’s right. We have not developed formal procedures but generally, attendance is limited to less than about 100 people and there is no exhibition. We don’t require or publish abstracts. Essentially everyone who attends the forum is required to attend for the entire meeting and to participate in some significant way, either by making a presentation, being an organizer, etc. It is designed to provoke discussion about issues that are not quite ready to be published. It is designed to get ideas out and to communicate. It doesn’t take the place of a technical meeting, because as I said earlier in the interview, you need to publish. But the forum is something that we have been missing out on for our members, so we are finding a huge uptake on this already.

[Penny]: How are they different than the workshops?

Well, the research workshops are another type of technical meeting and they do have abstracts. They are a little bit freer in form than a regular technical meeting, but they don’t have the quality of being “off the record”. That’s the main difference and people are not allowed to take notes or record. So you take away from it what you heard and the idea is we are stimulated during the meeting.

[Bill]: But there would be some formal presentations or posters and hence presentation material that’s captured by the organizers.

That’s up to the forum organizers how they actually do it. Of course you will see some power point presentations and maybe a poster put up but the difference is, you know that doesn’t get written down which will provoke discussion. The other thing that really differentiates is that forums don’t have to be technical. Forums could address accounting issues, regulations, standards— whatever geophysicists and their businesses find of interest.

[Bill]: And you would create a committee that would go out and solicit individuals in different countries to create the interest in varied topics?

Yes, and I envision that committee first of all will write their procedures and then those will be approved by the Executive Committee, but I would envision that they would be the clearing house for ideas from members around the world for forum topics for their area. You know, it’s tough to find volunteers, everybody already has a full time job, so this committee would have the responsibility then to make sure we do have a few other…

[Bill]: …other individuals interested and committed to facilitating—

Yes, I don’t know what the number is, whether it’s 2 or 3 or 5 or whatever, but you know, to perpetuate it because it’s something that has sparked a real groundswell of interest, so I am convinced it’s not just me and a few other people who think it’s a good idea, but we need an institutional way of preserving the momentum.

[Penny]: The concept sounds similar to the informal brownbag lunch talks organized by division committees of the CSPG (Canadian Society of Petroleum Geologists). The divisions include for example Hydro geology, International, Structural, and Environmental geology. The CSEG Lunchbox Geophysics offerings were modeled after those informal presentations.

And local societies and sections do that all the time. For example there are SIGs, special interest groups that hold monthly meetings. So this one has to be a little bit higher profile than that and lend SEG’s support in finding and attracting experts from around the world.

[Penny]: Are there a lot of meetings in Houston for example? I have attended a luncheon meeting in Houston but I don’t know generally how active luncheon attendance is in the other centers.

There is the GSH, Geophysical Society of Houston and they have technical breakfasts, luncheon talks and SIGs in areas such as rock physics group, data processing group and so on.

[Penny]: From outside we never hear too much about the local meetings.

[Bill]: I was invited by the GSH to give a talk but it wasn’t a luncheon, it was in the evening.

The SIGs typically meet in the evenings and then the GHS has a monthly lunch, much like you have here in Calgary with a featured speaker.

[Penny]: What is your impression of the average attendance?

I don’t know what your average audience is but I have always been impressed with the participation here in Calgary. It is just amazing.

[Satinder]: Okay, do you think there is a possibility of another joint CSEG-SEG Convention here in the near future?

I think so. The recent SEG meeting held in Calgary was a success. One issue we have, though, is that the size of the exhibition facilities in Calgary necessarily limits the size of the exhibition. We should explore possibilities on solving this problem. There might be other possibilities. What about holding a joint meeting in Vancouver for example? Would people from Calgary, and Houston for that matter, be willing to go to Vancouver for our a joint CSEG-SEG meeting? I suspect Vancouver would be an appealing destination for people from the Asia-Pacific region, and given the recent challenges in obtaining US visas, it might be good for others as well.

[Bill]: Some percentage of people from Calgary companies may, though probably 100% would attend the convention here. In a general sense you may not get a high percentage of Calgarians going to SEG meetings, so it may not make a big difference to the overall numbers for a meeting outside Calgary.

Well, probably more would go to Vancouver than would go to Houston?

[Bill]: I don’t know, it might or might not be easier, I am not sure. A lot may depend on business connections being stronger between Calgary and Houston.

But is it closer and less expensive to go to Vancouver?

[Bill]: Yes, that’s true.

[Satinder]: But there are no restrictions for Canadians to go down south of the border—

No, no it doesn’t affect the Canadians. I was just thinking it would be easier for the people from the Middle East and Asia to come to Canada. So we would love to do something like that again. Any chance that Calgary will build a bigger exposition?

[Bill]: It could be, there is always discussion about that—

[Penny]: Based on the age demographics of members there is often speculation that the SEG and similar memberships might be something lighter 10 years from now. Those requirements for large convention exhibit area and attendance at future meetings depends on growth in numbers of younger members.

Well, that’s interesting. You haven’t asked me about demographics but I guess I am a pragmatist in a lot of ways in that I think that we will solve our employment problems. The market will solve it by supply and demand – we need people so we offer attractive salaries then people from all over the world will be applying. So I think we will be able to hire a lot of good people in our industry. What worries me is the efficiency with which we can do this. In the past, we have hired from outside of our degree programs – I am an example – and these people will require substantial training. It would be more efficient if we could recognize the problem and address it proactively.

[Satinder]: Craig, what do you do outside the science that you practice?

Oh, you mean for fun? First of all I have a lovely wife and son who I like to see occasionally and I am quite fond of playing tennis and scuba diving. But my son is more fond of the snow sports so I find myself going skiing a lot. I also like to play the piano and read, of course. I am big on history and archeology and things like that.

[Satinder]: One last question unless Bill has something else. What would be your message to the young people who are entering, or who just entered geophysics as a profession?

Energy demand is a long-term issue and there is going to be a tremendous demand for their skills. I would just encourage people to not focus on macro economics of our industry but instead, focus on their profession. I have always tried just to be the best that I can at what I do and, you know, when you do that, you probably succeed particularly if you are being compared to people who are more interested in job hopping, salaries and the like.

really think excellence is what pays off in the end, whether you are a manager, scientist or business person. The most important thing is to broaden your skills and then be the most effective that you can be and you really won’t have to worry about your future. Even if, for some reason, our profession were to lose favor and not be so important, then if you are looking at the prospect of having to switch industries then you are still in the best position to do that, having a broad range of skills. And I would just say be optimistic and enthusiastic, because that is probably the most important part of it.

[Satinder]: Craig, thank you very much for giving us this opportunity to sit down together.