PGS CEO Bullish on Oil Industry's Long-term Prospects

LONDON (Dow Jones Newswires), Apr. 22, 2009

The chief executive of geoservices company PGS ASA said Wednesday he's bullish on the long-term future of the oil industry despite the current challenge of lower oil prices.

In the company's annual report, PGS' CEO Jon Erik Reinhardsen said future demand for oil means there will be great demand for his company's services.

"We are searching for oil in increasingly more complex areas...The age of easy oil is over. We strongly believe this will continue to grow the demand for...seismic (data)" he said. He added that there's strong growth in less cyclical, seismic data gathering which aims, through regularly repeated surveys, to raise output at existing fields.

"Our advanced fleet is uniquely positioned to compete and harvest good margins from these markets in years go come," he said.

In the near term however, Reinhardsen said low oil prices have led to fewer bids from PGS' customers. "This, combined with added streamer capacity coming to the market will put pressure on margins, in particular towards the fourth quarter."

Offshore seismic data is gathered by ships with long trails behind them, called streamers which reflect acoustic signals from the seabed.

But he said the company is well positioned to meet this market given its competitive services and long-term financing position, and expects to come out of a tough period strengthened relative to competitors.  

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