Calgary seismic firm embroiled in legal fight
CALGARY - A Calgary-based seismic company claims its business is being undercut by regulatory agencies that have been publicly disclosing data it says it spent hundreds of millions of dollars to collect in Canada's offshore.
Geophysical Service Inc. makes -- or rather made -- its money by mapping the earth's layers beneath the ocean floor using sonogram-like technology, amassing a trove of valuable information that it would sell to oil and gas companies hunting for their next big find.
In a bevy of lawsuits, GSI says would-be customers have been getting hold of that data for free after files it submitted as part of the regulatory process -- a required step in obtaining a permit to do the mapping -- were improperly released.
GSI claims its intellectual property rights have been violated and its assets have been expropriated without compensation, rendering its data all but worthless.
The allegations have not been proven in court.
In its heyday, GSI was a 250-person operation that had a hand in some of Atlantic Canada's biggest offshore oil and gas discoveries. Through its predecessor companies, its history dates back to the 1930s.
Today its workforce can be counted on one hand. GSI doesn't do any seismic work anymore; it was forced to sell its two ships and hasn't booked revenues since 2009.
Instead of collecting and processing data, chief operating officer Paul Einarsson figures GSI spends 95 per cent of its time fighting its long-running and multi-fronted legal war against regulatory agencies, federal departments and its own one-time customers.
"I do this 10 hours a day," said Einarsson. "This is all I do."
Einarsson pegs the replacement cost of GSI data at $800 million to $900 million.
GSI has more than 30 lawsuits on the go, with more expected to be filed in the coming weeks. Some of the most high-profile cases are expected to be heard in court throughout 2014.
A decision in a case against the Canada-Nova Scotia Offshore Petroleum Board is expected soon and a case against the Canada-Newfoundland and Labrador Offshore Petroleum Board is expected to go to court later this year.
Other defendants include the National Energy Board, which oversees oil and gas activity in the North, various federal government departments and a slew of oil and gas explorers, large and small, that GSI says have accessed its data without paying for it.
Late last year, GSI filed a more than $170-million suit against U.S. energy heavyweight ExxonMobil and its Canadian subsidiary, Imperial Oil Ltd. (TSX:IMO), alleging "breaches of contract" and copyright infringement. Imperial spokesman Pius Rolheiser confirmed both his company and Exxon had been served, but declined to further comment as the matter is before the courts.
In an effort to modernize in the early 2000s, regulators began asking for digital versions of the data, rather than hard copies. One of their aims, Einarsson said, was to attract more oil and gas investment to the offshore -- something he describes as tantamount to "welfare" for big oil and gas explorers.
"It really meant a huge expansion of the disclosure of the data," said Einarsson.
GSI has been forced to rely on Access-to-Information requests to find out if data is being improperly disclosed by the regulators -- a slow and frustrating process for Einarsson and the company's remaining staff. …