CGGVeritas Acquires Fugro’s Geoscience Division, The Netherlands

Fugro N.V. and CGGVeritas announced today that they have signed an agreement under which CGGVeritas will acquire Fugro’s Geoscience division, excluding the multi client library and Ocean Bottom Nodes business, for a total cash consideration of EUR 1.2 billion.

The transaction is a result of Fugro’s review of all options regarding its marine streamer seismic data acquisition business and associated activities, as announced on 30 May 2012. This divestment allows Fugro to exit the capital intensive and volatile seismic segment of the oil and gas exploration market where it does not have a leading market position. Also, most seismic companies have indicated fleet expansion plans in the immediate future, creating a clear window of opportunity for Fugro to enter into this transaction.

The divestment is consistent with Fugro’s strategy to build strong market positions and a broad, cohesive service portfolio and to maintain a balance of its services across the exploration, development and production phases of the oil and gas industry. With a much stronger balance sheet, Fugro will continue to focus on growth opportunities in its core, market-leading and less volatile geotechnical and survey businesses.

As part of the transaction, Fugro and CGGVeritas will form three strategic partnerships: the creation of a Seabed Geophysics joint venture – a global leader in seabed geophysics, a non-exclusive sales agreement for Fugro’s existing multi client library and a global strategic technological and commercial partnership. These partnerships will benefit from the leading positions both parties have in their respective markets.

Seabed Geophysics joint venture

As part of the transaction, Fugro and CGGVeritas have agreed to enter into a Seabed Geophysics joint venture which includes Fugro’s and CGGVeritas’s ocean bottom nodes businesses and CGGVeritas’s transition zone, ocean bottom cable and permanent reservoir monitoring activities. Fugro will make a cash payment of EUR 225 million to CGGVeritas in order to achieve a 60% controlling interest in the joint venture. The revenue in the first year of operation of the joint venture is expected to reach around EUR 400 million, excluding capacity expansion. By combining the strengths of both companies, the Seabed Geophysics joint venture will have an immediate market leading position in seabed geophysical activities, and will benefit from a good synergy with Fugro’s subsea activities.

The formation of the Seabed Geophysics joint venture supports a more balanced services portfolio by increasing exposure to the extended production phase period in the life cycle of oil and gas fields, which is typically characterised by stable, long term service contracts.

Multi client library

The multi client library, with a book value at 30 June 2012 of EUR 427 million, will remain with Fugro. Revenues will benefit, through a non-exclusive sales and marketing agreement, operated by CGGVeritas, from the

larger combined global sales force and broad range of client contacts. All multi client personnel will be transferred to CGGVeritas. Fugro will retain the right to enter into non-exclusive agreements as well as an outright sale of (all or parts of) the library to other parties. This provides Fugro with maximum flexibility to unlock the value of its library. Fugro will not further invest in the seismic multi client library.

Strategic Partnership

The partnership includes a global technical and commercial agreement, under which CGGVeritas and Fugro grant each other preferred supplier status for selected products and services required for the operation of their respective businesses. Parties will also pursue opportunities related to the launch of new technologies. The partnership will provide revenue enhancing opportunities to both Fugro and CGGVeritas.


The purchase price of EUR 1.2 billion will be paid in cash to Fugro. CGGVeritas intends to finance the transaction via a bridge loan (2/3 of the consideration) committed by its banking group and a rights issue (1/3 of the consideration). In the event market circumstances do not allow execution of the rights issue prior to closing, a vendor loan of EUR 335 million with a maximum maturity of three years and supported by a collateral arrangement, will be issued to CGGVeritas by Fugro.

Fugro’s Employees The transaction involves the transfer of approximately 2,500 well qualified Fugro employees located around the world. CGGVeritas has agreed to honour all existing labour rights and agreements. Fugro will undertake appropriate consultation procedures with employee representatives.

Timing and Conditions The final purchase price is subject to working capital and other standard post-closing adjustments. The transaction is expected to close towards year end 2012 and is subject to antitrust and customary closing conditions.

Arnold Steenbakker, Chairman of the Board of Management of Fugro N.V. comments:

“The review of our options confirmed that as the fourth player in the marine seismic industry, we would not be able to achieve the level of market leadership which we currently have in our other businesses. Given the anticipated fleet expansion in the seismic market, the timing of this transaction is right.

This transaction allows significant financial flexibility to accelerate our future growth plans. We see a number of compelling opportunities to further strengthen our leading positions and service offerings to our customers.

The Seabed Geophysics joint venture creates a market leading business in an attractive growth market which will be supported by our existing subsea capabilities and provides more exposure to the stable and long-term oil and gas production market segment.

The transaction and strategic partnerships offer a great opportunity for all our staff. Our people in the Geoscience Division will become part of the market leader in the oil and gas geoscience industry. Equally our employees of the geotechnical and survey divisions, where we are already leaders in their fields, will experience an exciting growth path.”

Business going forward

The geotechnical division investigates the engineering properties and geological characteristics of soils and rocks, advises on foundation design, provides construction materials testing, pavement assessment and installation support services supporting clients’ projects worldwide in onshore, near shore and offshore environments, including deep water oil and gas developments. Growth opportunities exist in geographical expansion, capital assets and technology enhancement.

The survey division provides a range of services in support of the oil and gas industry, renewables, commercial and civil industries as well as governments and other organizations. It encompasses numerous offshore, subsea and geospatial activities as well as global positioning systems. The transaction enables further capacity expansion to support future investment levels in the oil and gas sector and to reinforce our market position in subsea services.

The Seabed Geophysics joint venture is expected to become the market leader in the growing seabed geophysical data acquisition market as oil companies increase their focus on maximizing production from mature and developed fields.

The Fugro multi client library holds a repository of 2D and 3D non-exclusive seismic data, predominantly in Australia, the Gulf of Mexico and North West Europe, including the Barents Sea.

Press Release, September 24, 2012





Share this article

Follow Subsea World News


<< May 2017 >>
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31 1 2 3 4

OGA 2017

OGA 2017 is the most beneficial way to meet, discuss and acquire the latest in the Oil & Gas industry! It is also;…

read more >


This seminar is designed to assist IMCA members in dealing with these, with a programme of technical and operational topics affecting…

read more >

Offshore Wind Energy 2017

In 2017, EWEA and RenewableUK will join forces to bring you the greatest conference and exhibition Europe has ever known in the history…

read more >

UTC 2017

The subsea industry has, as all other parts of the oil & gas industry, been seriously rattled by the most severe downturn in the hydrocarbon energy era. However, the realization of what hit us and actions to be taken to sustain a healthy and profitable future is still on-going – unfortunately with thousands of colleagues paying the price by losing their job as one of the most severe consequences. At this time, there are signs that we have reached bottom in terms of most industry indicators, but few experts expect a sharp recovery. Many seem to believe that a slow recovery is what the industry needs in order to avoid an unsustainable capacity build-up, as seen in the period after the financial crisis. Considering the uncertainty of what the future will bring, this year’s UTC Program Committee have decided to challenge all of us to present ideas, experiences, technological innovations, business models and execution models for how to shape our subsea future and explain how and why subsea is the future.
UTC welcomes abstracts based on the topics listed below. If selected, please consider writing a paper in addition to the UTC presentation. From 2017, UTC papers will be published in an international database.

More info

read more >