Demand from seismic acquisition efforts is expected to slow
Los Angeles, CA (PRWEB) October 08, 2014
Seismic data processing services have a buyer power score of 3.3 out of 5, indicating a moderately favorable environment for negotiations. While the recent price trend, low availability of substitutes and high market share concentration hinder buyer power, low price volatility, slow projected price growth and moderate switching costs give buyers some leverage. Additionally, high competition among service providers compels companies to earn contracts through reputation and economical prices, thereby enhancing buyer power. “As a result, buyers gain some leverage during negotiations,” according to IBISWorld procurement analyst Keiko Cadby.
“Due to significant growth in the US energy sector, particularly in oil drilling and gas extraction, demand for seismic data processing services has been on the rise,” says Cadby. Seismic data processing is a necessary step in seismic surveying, which is a crucial part of oil and gas exploratory activity. As a result, prices for oilfield support services such as seismic data processing have been trending upward, reducing buyer power. Buyers are limited to qualified service providers because of the specialized nature of seismic data processing. Also, high and rising market share concentration among suppliers limits buyers' choices. As a result, buyers may be negotiating with companies that have a great deal of control over the market. Nevertheless, buyers are encouraged to elicit multiple bids for their seismic data processing needs, and take advantage of the high competition among service providers when possible.
Besides high competition among vendors, other factors that improve buyer power include low price volatility and the projected slowing price growth. Buyers can enter agreements without risking sudden price spikes, improving their ability to budget for their seismic data processing needs. Moderate switching costs also allow buyers to change service providers with relative ease when budgetary or processing requirements are not being met, especially for buyers with limited need for value-added services and contract customization. However, buyers can seek bundled purchases to elicit deeper discounts and streamline their supply sources. The top four vendors in the market are CGG Veritas, Schlumberger, Baker Hughes and Weatherford International.
For more information, visit IBISWorld’s Seismic Data Processing Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of seismic data processing services. Providers of seismic data processing services typically specialize in data preprocessing, depth imaging, land processing, marine processing and other services. This report excludes geophysical services.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.