Fugro Adds Another Exploration Tool to Its Quiver

(MoneyWatch)  A new map of the Earth's gravitational force developed at the National Space Institute, Technical University of Denmark will make the search for oil a little cheaper.

In an industry that predicts continued cutbacks on costly oil exploration projects, this is good news for companies like Fugro, an integrated geotechnical and geoscience surveyor.

The map uses satellite measurements to show differences in gravitational force across Earth's surface. Subterranean oil deposits are typically encased in light materials such as limestone and clay, which have less gravitational force than the surrounding materials. In short, it gets a little easier, aka cheaper to find oil.

Fugro finds the map so precise, accurate and useful, according to its vice president and head geophysicist, the company has formed a research partnership with DTU Space. The map's developer Ole Baltazar creepily predicts the tool will become even more valuable as climate change begins melting ice in the Arctic, an area where many suspect there are large deposits of oil underground. While, this is good news for oil developers, it's not exactly great for the rest of us and falls more on the catastrophic side of things.

For Fugro, this is just another tool to put in its cost-saving quiver. The company announced last year it will expand its fleet by as much as 24 percent by 2010, a move designed to concentrate its vessels within a region to increase efficiency and cut costs.

Efficiency is far more crucial in a world of sub-$50 barrels of oil. Expect companies like Fugro and its competitors including CGG Veritas to invest in technology in an effort to decrease the cost of finding crude and hopefully, raise profit margins. CGG last week projected that exploration and production spending will fall up to 15 percent. Demand for seismic imagery is expected to fall between 15 percent and 20 percent, according to CGG's CEO Robert Brunck.

In spite of CGG's projected decrease in demand, the company plans to increase its research and development spending by 10 percent in its equipment unit Sercel.