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After 75 years CGG is still making seismic history Normal access

Author: A. McBarnet
Journal name: First Break
Issue: Vol 24, No 11, November 2006
DOI: EAGE-EXPORT-FAKE-DOI
Language: English
Info: Article, PDF ( 1.15Mb )
Price: € 30

Summary:
The 75th anniversary of the CGG Group is being celebrated alongside the company’s preparations for its merger with Veritas DGC. Andrew McBarnet brings some perspective based on conversations with CGG chairman and CEO Robert Brunck. It had been a whirlwind romance when just a month or two ago CGG announced its intention to merge with Veritas DGC. Robert Brunck, chairman and CEO of CGG, quips that it took the company 75 years to settle down with a partner. The proposed $3.1 billion purchase of Veritas in a combination of shares and cash, likely to be finalized early next year, has certainly provided a dramatic punctuation point in the history of the oldest European geoscience services company – and it has added poignancy to some memorable CGG parties this year to celebrate 75 years in the business. By next March Brunck says that he will have been to 12 different celebrations around the world, and that each one will have been well worth it. ‘For us, it is a tremendous opportunity to meet with employees, shareholders, and clients in many parts of the world. It also makes the statement that seismic is back centre stage and that the hard work of our incredibly loyal employees over the last five years has paid off.’ There’s no doubt that the pending acquisition marks a watershed in the CGG story which, Brunck is the first to admit, has had its ups and downs. ‘I can only speak about what I have seen or experienced personally,’ he says, ‘but I would agree that CGG literally missed the boat in the early 1990s. At that time the company failed to realize the importance of the global offshore seismic market and Sercel was under-performing.’ Brunck identifies the turning point for CGG as the mid 1990s under his predecessor Yves Lesage. This was when the company began to focus on building up its 3D marine seismic operations and developing its seismic acquisition manufacturing subsidiary Sercel under the leadership of Thierry Le Roux. In the Brunck era that strategy for the CGG Group appears to have come up trumps. In 1999, for example, CGG was a $400 million company, today it’s up to $1.5 billion, and will soon be more than double that. Brunck admits that he wasn’t always confident that it would work out. ‘At the end of the 1990s we were looking at vessel over-capacity, low oil prices, oil company consolidations, and unfortunately like everyone else lay-offs in our company. Then there was September 11 and the weak economy that followed. It meant that there was a lot of doubt out there. I told my colleagues that we were facing some tough years but we would definitely bounce back. But in 2003 and early 2004 I wasn’t so sure about the timescale for recovery. Luckily, by the end of 2004, the prognosis was much better.’


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