WhatFinger


Canada Newfoundland Offshore Petroleum Board, Allan Feir, GSI, seismic jackpot, Davey Einarsson, property rights

The GSI Story: One company’s fight to protect its seismic data



Allan Feir sits in his downtown Calgary office scrutinizing a list of codes displayed on his computer screen. The codes represent seismic information that GSI has invested hundreds of millions of dollars into over many years. More specifically the codes are identification numbers assigned by the National Energy Board for different seismic programs, on documents attained through the Access to Information Act.
Feir who is the Vice President of Operations at GSI has two other documents on his screen from the Canada Nova Scotia Offshore Petroleum Board and the Canada Newfoundland Offshore Petroleum Board. He compares the rows of numbers to his master list of GSI owned data. He is searching for seismic pirates.

Support Canada Free Press


“It came to the attention of GSI that it wasn’t ever being notified when its seismic data was being borrowed to be viewed, copied, and in the worst case scenario copied and reproduced for sale to third parties. This is in violation of GSI’s ownership and intellectual property rights, including registered copyright, trade secrets and duties of confidentiality,” explains Feir. Depending on the information Feir receives from the ATIA requests, it allows him to see who has borrowed the seismic data and in some cases, who has copied it and who the reproduction company was. Once GSI got this information in some cases it only saw that materials were checked out with no clear evidence whether it was copied or not. The boards put GSI in the rather absurd position of asking recipients if they had ever made a copy and to please notify GSI if they did. Despite hundreds of request letters GSI can count on one hand the number of responses from these pirates. Not one entity has agreed to license the data and do the right thing, some have returned the data but most don’t respond at all or deny they ever viewed, used, or have the data. On several occasions a box full of the copied data simply shows up on GSI’s doorstep with a letter. Discovering that GSI owned data was turning up in the hands of those who had no right to it, or worse in the hands of competitors and other firms who license data to third parties fired up Paul Einarsson, COO and chairman, as you might expect. He began a campaign of sending freedom of information requests out to the NEB, the CNLOPB, the CNSOPB, and other government entities, to find out who was viewing, borrowing, and copying GSI data. The suspicion was that some oil companies were using GSI data to explore without paying for it. Some of these entities were also reselling and even licensing GSI seismic data to third parties and oil companies for a fee like they owned it. Those suspicions proved to be true and GSI far underestimated all the activity going on due to the continual breaches of confidentiality of the boards. They had created a seismic “jackpot” for unethical users of “free” data. In an absurd twist of justice, GSI has to fight for the right at times in Federal Court to force the government boards to provide GSI the information on seismic piracy of its own data before it could even begin to defend its interests. The boards argued for example under section 20 of the Access to Information Act that the third parties would be financially harmed if the board told GSI that they copied GSI data and delayed GSI as it sought permission from that third party pirate to release evidence of their access and copying to GSI. In another case, a Canadian government entity that has been particularly damaging to GSI, has forced the company to court again just to get that entity to simply respond if it did have, or has any access, use, or possession of GSI data. The problem being that this government entity has funded GSI’s foreign competitors, is a competitor to GSI, and is a partner with GSI’s customers which requires it to license GSI data, ( which it refuses to do ) while at the same time it is promoting the expropriation without compensation of GSI’s data. As part of regulatory requirements of the Newfoundland-Labrador and Nova Scotia offshore petroleum boards, and the NEB, GSI is required to submit the results of its seismic surveys which are speculative or non-exclusive data. But the data is being released by the boards after a ten year confidentiality period that the boards created. GSI’s position is that this confidentiality period set by the boards is an illegal attempt to override well-established Canadian law such as the Copyright Act, common laws on confidentiality and trade secrets, and the Access to Information Act all of which, GSI points out, would not allow any disclosure of GSI’s seismic data. Worse yet the boards decided to “go for it” by unilaterally expanding disclosure first from viewing, to then distributing paper copies, to distribution of digital image files, to a recent move to distribute the digital data, which is the very product that GSI provides its customers when they lawfully license it. In Einarssons’ opinion “The boards have conducted a massive bait and switch on GSI and the industry so they can use the data to promote the offshore by giving it away for free and reaping the benefits in the form of increased royalties on oil and gas production, taxes, and local employment.” As reported recently in the Globe and Mail newspaper the Newfoundland and Labrador crown corporation Nalcor Energy is vigorously promoting oil prospects for offshore Labrador. Paul Einarsson suspects the seismic information Nalcor is making widely available is largely based on GSI data. Einarsson terms it unconscionable for any government to be permitted to take seismic data, both raw field tapes and processed data, and release it into the public domain after any period of time let alone ten years. “The government just doesn’t take things without compensation, Einarsson reasons. “ If they need to build a highway, and you own the land, they pay you something for it under a lawful expropriation process.” Einarsson is outraged by these actions as he feels any reasonable person would be. In 2010 GSI cancelled a planned $10 million dollar seismic survey off the East Coast after suggestions Newfoundland Labrador would be doing just that, unilaterally expanding the release of speculative seismic data in digital format to “keep up with advances in technology“, as then Nfld. Natural Resources Minister Kathy Dunderdale was quoted as saying. The truth to this misleading statement is it was not just modernizing but a massive expropriation as the disclosure was expanded to the very products GSI licenses to its customers as part of this modernization. At the time Paul Einarsson tried to argue it would have a huge impact on his company, with customers not bothering to license the GSI data when they can get it for free. “The release of that to the public would completely decimate our commercial business, and what they’re doing is just killing us. “ Einarsson says. But so far government officials have turned a cold shoulder to GSI’s argument. Elected federal officials who pledged to help GSI changed their tune when they were told that the federal government is powerless against the will of the two provinces of Nova Scotia and Newfoundland on the one hand, or that the potential damages might run into the hundreds of millions of dollars on the other. Today GSI is embroiled in a number of legal fights to protect its seismic data. In GSI’s disputes with the Maritime regulatory boards the critical point from a legal standpoint asks the question, can a government entity expropriate property without paying for it? Is this a violation of its own laws? In simple terms VP Allan Feir explains the complex legal battles with the Nova Scotia and Newfoundland Labrador regulators this way. “GSI is fighting to say this data is ours, the governments are saying it belongs to everyone.” At the same time GSI is required by law to store and maintain the data, costing hundreds of thousands of dollars a year in addition to ongoing investments to reprocess data. Despite hundreds of attempts to communicate, meet and reason with officials, GSI’s only recourse has been the courts. Many of GSI’s customers are in litigation with the company over having either used GSI data they obtained improperly or otherwise failing to protect the data under terms of license agreements with GSI. In some cases it was inadvertent, in other cases intentional. The license agreement restricts disclosure of GSI data to prospective joint venturers, acquisitors or potential exploration group members and only for purposes of viewing to evaluate prospects. If these parties decide to proceed to take an interest in a project, they must enter into a license agreement with GSI. Unfortunately GSI has no other options but to try to defend what is right and to stop others from using or taking its intellectual property. Recently GSI filed an application with the Nova Scotia Supreme Court over provincial demands that it provide digital non-exclusive seismic survey data which the company has developed at its sole cost off Nova Scotia. In fact the application challenges the board’s disclosure plans of the non-exclusive seismic data invested in by GSI relating to data off Nova Scotia as being unlawful and not authorized under the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act. The issue is the right to ask for, use, and disclose 1971 to 2006 GSI non-exclusive survey data. GSI claims that the surveys are in fact registered copyright, proprietary, and therefore should remain confidential. “They are acting like they own it and using the data to make money,” explains Einarsson. “It’s the troubling promotional use of data which GSI provided for regulatory purposes, being improperly used to promote offshore development in Nova Scotia.” The board’s bureaucrats argue that they must be able to disclose and use this privately owned seismic data since it would not otherwise be available. But GSI makes all this data available to license to oil companies for a non-material fee. GSI has launched similar legal action in the Newfoundland Supreme Court against that province’s offshore regulator. Among a list of claimed violations of Canadian law, the action alleges copyright infringement by releasing its seismic data to a third party, making copies, and intimately coordinating the reproduction. The action alleges expropriation without compensation. And the company is also in court with the National Energy Board over multiple cases alleging it disclosed GSI’s confidential information to GSI’s customers, GSI’s prospective customers, GSI’s competitors, other piracy firms, and reproduction firms. Further, that the last three are generally reselling the information to GSI’s clients and prospective clients. A historical snapshot Geophysical Service Incorporated is a Calgary based company which provides exclusive and non-exclusive marine seismic data from offshore Canada and around the world. GSI has acquired and owns 2D and 3D seismic data off the coasts of Nova Scotia, Newfoundland and Labrador, as well as in the Arctic Islands, Beaufort Sea and other parts of the world. The company’s fascinating history dates back to its founding in 1930 by John Karcher and Eugene McDermott. Karcher was an American geophysicist and businessman who invented the reflection seismograph, applying for patents in 1919. He eventually commercialized the process by which most of the world’s oil reserves were discovered. McDermott was a geophysicist and pioneer of providing seismic services to the petroleum industry. The original GSI would later spin off a company known as Texas Instruments in 1950. GSI was bought by Halliburton in 1988. In 1992, a Canadian, Davey Einarsson who was a long time executive with the “old GSI “and who personally promoted and managed the collection of all of the massive GSI data covering offshore Canada in the 1970's-1990's, purchased the proprietary rights to GSI’s speculative data in the Canadian offshore, and formed the “new GSI” in Calgary. In 1997 Paul Einarsson, an original investor in the firm, joined the company as COO and chairman. The company also owned and operated the GSI Admiral and the GSI Pacific, the former being the only Canadian flagged seismic vessel operating offshore Canada, including the high Artic, and around the world for years. GSI is still the largest nonexclusive 2D offshore seismic data owner in Canada, and continues to license and sell its seismic data despite the huge impact of having to fight for its property rights. Einarsson says, “The government actions have severely damaged our sales in Canada, impacting revenues dramatically but what they did not count on was GSI getting most of its revenues now from its foreign seismic data to fund its defense!” GSI hopes to see justice soon so its revenue can be restored from its Canadian data, and it can direct its energy to investing in data again, rather than costly and time consuming litigation. Guest Columnist Greg Bohnert is a freelance writer, communications consultant and broadcaster in Calgary, Alberta


View Comments

Guest Column Greg Bohnert -- Bio and Archives

Items of notes and interest from the web.


Sponsored