Paul van Riel

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Paul van Riel
Paul van Riel headshot.png
Latest company Fugro Jason
Membership SEG
BSc Physics
MSc Physics
BSc university Delft University
MSc university Delft University

Paul van Riel is a geophysicist and entrepreneur who was honored by the SEG with the Cecil Green Enterprise Award for his role in founding Jason Geosystems in 1986 and overseeing its evolution from a small startup company to am industry leader in inversion and reservoir characterization.

Interview with Paul van Riel

Clark, D. (2004). ”Paul van Riel.” The Leading Edge, 23(2), 128–191.

The Business Bottom Line

Coordinated by Lawrence M. Gochioco

The Cecil Green Enterprise Award was presented to Paul van Riel for his role in founding Jason Geosystems in 1986 and for overseeing its evolution from small startup to industry leader in inversion and reservoir characterization technology. The complete background is given in van Riel’s award citation on page 179 of this issue.

Jason existed as a private company for 15 years, with offices around the world, before being purchased by Fugro in December 2001. Thus, van Riel has viewed the modern geophysical business environment from virtually all points on the spectrum and, in this interview with TLE editor Dean Clark, shares his perspective on the recent past and immediate future.

The part of your citation that just leaps out is “his experience at EnTec ... at this juncture Paul decided that establishing a high-tech company was what he wanted to accomplish.” So, what exactly triggered the entreprenuerial impulse?

What Entec showed is that with just a few very motivated people, you can quickly get new stuff off the ground.

In addition, you do not necessarily have to be a big service company to get the interest of large oil companies.

So, if you have an idea and have like-minded people around you, are not risk averse and relish a challenge, what is there to stop you from going for it?

You seem to be saying that there will always be a need for small companies and, perhaps, that they are absolutely necessary for geophysical techology to advance. Is that a correct interpretation?

I am not sure if small companies/start-ups are absolutely necessary to drive technology advances. However, it certainly seems our market works that way. In the last decade or so, many of the major innovations have come out of startup/small companies. A couple of examples: seismic workstation interpretation, computer mapping, interactive seismic processing, seismic inversion, PC seismic interpretation, geocellular modeling, 3D visualization.

The natural progression is that the market supports these companies and allows them to succeed if they have something of real value, after which they get acquired. The names are familiar to all: GeoQuest Systems, Landmark Graphics, Advance, Jason Geosystems, Hampson and Russell, Geographix, Radian, Zycor, Petrel, Voxelgeo, Voxelvision, Magic Earth ... In the last decade, the only exception to this rule—a start-up that progressed to the level of a major publicly traded contractor/supplier—is PGS with its innovations in marine seismic acquisition. We have yet to see if the market will allow them to survive independently.

I don’t have comparative figures, but it appears surprising that larger contractors are producing so few major innovations. One factor is, of course, relatively low R&D budgets in our business when compared with industries such as electronics and drugs. We can speculate that, because of this, R&D career paths in large companies are not that attractive. Further, it appears that scarce R&D dollars are increasingly going to commoditization and cost reduction of existing processes rather than real innovation. The consequence is that the large players have to acquire innovations. This costs but does come with the advantage of buying proven success. That so few start-ups make it as new major players is perhaps something unique to our market and may be driven by the fact that our market is stable, so that there just is not room for large new players.

We should also look at other sources of innovation. Many new ideas and innovations have come out of oil company labs. However, with just a few exceptions, this today is history, and I don’t see that reversing. What we should not forget is the role of universities and research institutes as a breeding ground for new ideas. Some of these have been able to maintain a critical mass of excellent research staff and students. For example, a lot of what we do today in seismic imaging, rock physics, and geostatistics came out of universities and research institutes. We need to be very careful in our business that we foster these sources for new ideas and innovations.

You mention the research done by the universities. Some feel that the link between universities and industry has gotten too close and is diverting the former from the historic mission of unbiased inquiry. What are your thoughts about this?

I don’t agree. My experience with consortia is that consortium sponsors generally allow the universities a lot of freedom. All the consortium really does is emphasize a research direction, and not so much of what exactly gets researched. A plus of this is that it helps maintain continuity in the chosen research direction. Also, industry can contribute useful “problems” and ideas. As long as that kind of feedback is taken as a source of inspiration rather than as a directive, it can positively reinforce research. What I do think is of concern, at least in many countries in Europe, is the relentless drive to cut costs in higher education. This is forcing top researchers to spend an awful lot of time on scraping together money and being involved in reorganizations rather than doing creative research. This is decreasing the attractiveness of universities for top research talent.

Shifting gears slightly. After deciding that you wanted to start a high-tech company, it took another 3-4 years before it was actually launched. Is that time frame typical? Is it longer or shorter than would be required today?

I don’t think 3-4 years is the norm (thankfully). In our specific case, when we first contemplated starting up a company, we realized that what we had to offer was far too immature. So that is why we went for the university-based project first. Once we felt we had convincing results, we developed a business plan and began to speak with venture capital providers. The process from the start of writing the business plan, securing seed capital, and getting the company off the ground took around nine months. From what I understand that is typical. If you have an experienced (we were not at the time) and a more mature product or service concept, it can actually go faster.

Your answer causes two questions just to spring to mind, and I don’t know which is more important so I’ll ask them both sort of simultaneously. First, in the light of all the mergers and downsizing, combined with the aging of the geophysical workforce, would it be harder or easier to put together an experienced team?

Second, even if you had a “more mature” product, would there be a ready market—or, as some state, everybody would be waiting for someone else to invest first?

Those are interesting questions. In regards to putting together experienced teams, you see it happening all the time if funding is available. For example, given high oil and gas prices you see lots of new oil and gas ventures getting off the ground. That we do not see it happening in the geosciences may have more to do with the fact that we are not a growing business area in addition to the fact that there are very few companies earning decent returns. As a consequence it takes a really smart idea to attract financing.

In regards to marketing, I think there is actually an advantage to be had from the “wait and see” attitude. If you get off the ground with a new product or service that works you will find clients, though it may take a few loss leading sales. If the competition waits to act until it is a success, by that time you will have created a substantial market lead. At least for a while that should allow you to make good returns and to build out your product or service. That is very important in itself. Copy-catting is always cheaper than innovating so the extra returns are an absolute requirement for survival and success.

After you got Jason Geosystems up and running in 1986, what were your two biggest surprises—i.e., the most pleasant and its inverse, the most unpleasant?

The most pleasant surprise was to learn that you can move mountains with a small but highly dedicated team and the enormous fun that you can have working with such a team. The most unpleasant surprise was to find out how little we understood about the market and the product maturity our market requires. This meant that after initial sales to some of the R&D/special project teams at major oil companies we got stuck. It was a hard, unexpected, and long slog to get through this phase with all the unpleasant consequences: downsizing, pervasive uncertainty, etc. We were fortunate indeed that the remaining team remained highly motivated, that our investors maintained a long term, positive outlook, and that we did hit the right product just in time.

It would seem that most of those trying to market a new product to the geophysical industry would have spent most of their time earning an advanced degree in geophysics. Thus, it would seem that they would, almost unavoidably, know little of the demands of this market. Is that correct and, if so, is trial and error the only way to obtain that necessary knowledge of the market? With the benefit of hindsight, we could have done better and the lessons we learned I think apply more generally with “out-of-university” start-ups. The best way is to get business expertise into the company, for example through an active board member, board of advisors, or, in a large start-up, an experienced person in the management team.

Such a person should preferably have very good contacts in the market, would know how business in the market is done, and would have experience with technology innovation. Such a person will help the team keep at least one foot on the ground, keep their focus, and will likely recognize a marketable deliverable a lot earlier on. You are quite right that trial and error around new products is always required. But only hard experience teaches you that, so recognizing and managing the process is something such a person would contribute.

Switching gears again. What advice would you give to the young college student who wants to become a geophysicist?

It seems to me that there is much more to learn in 2003 than there was in 1980 or so when you were in school. This is a tough one. I often wonder what advice I would give my kids when they are that age. Right now I think I would advise: (1) Join a good school and make sure you come out with good marks. (2) Make sure to get a solid training in basics: mathematics and statistics. Our technology is getting more and more computer modeling and simulation driven, and that development will continue. Young people are needed who understand how it works and what the benefits are. Also, if you understand these basics, moving into a new technology area is a whole lot easier. (3) Make sure to take some course work in geology and reservoir engineering, with emphasis on the latter. A modern geophysicist operates in a multidisciplinary environment. (4) And, finally, a little exposure to business aspects won’t hurt.

So, yes, there is more to learn in a broader sense. Necessarily this implies a trade-off at the cost of in-depth work on all the geophysical specialties. However, if you acquire understanding of one or two geophysical technologies, picking up on others as may be required later in working life is relatively straightforward. So I think you are going to be much better off with the broader package.

Why are product development cycles so long in geophysics?

Research and development precedes new products and services and, hence, new business. I think a large part of the answer is that in our business we are heavily underspending in R&D as compared to other industries. The best majors, who relatively spend the most on R&D, have an upstream R&D budget of around .3% of revenue. This is around a factor 15-20 less than that spent by the likes of Schlumberger.

But in turn the leading services companies spend a factor 2-3 less than big companies involved in drugs and electronics. What would our industry gain if we could cut back product development cycles? Just imagine the cost savings if 3D had been on the market five years earlier. Or how much higher our recovery factor would have been from existing reservoirs if time lapse were mature today and how large the associated economic gains would have been. Surely increased R&D spending can decrease R&D cycles and create competitive advantage that justifies the spending increase.

The obvious question generated by your answer is: Why is there so little R&D spending when, as you point out, just an incremental improvement could lead to improved recovery and even a small increase in recovery can mean a big increase in profits?

Do you try to make this point with industry executives? Or is it impossible to make this point because so few industry executives have a background in geophysics?

One point to make here is that it is not only in geophysics, but across the board in upstream. I think we can only speculate on what exact grounds the decisions to lower R&D spending are made. Is it simply that R&D has had to bear its share of cost cutting and is an easy target? Is it the “strategic” argument that oil companies should excel in technology application and not be inventors? Or is it that such a “strategy” conveniently justifies cost cutting in R&D. It certainly appears that “excellence in technology application” is the consensus approach in our business today; and if everyone follows it, this does not represent a competitive disadvantage and it does help on immediate cost savings in R&D.

Also there is the “risk” issue. R&D spending entails risk. With so many risk factors already out there (oil price, regulation, politics, technical uncertainty ...), perhaps R&D risk is one oil company management is happy to push off their plate.

So, perhaps part of our job is to show that the return on investment on R&D can be high and that it can therefore generate competitive advantage. If we do so convincingly, we may be able to turn the tide.

Is your PhD still on permanent hold? Or is the entrepreneurial bug a permanent infection and, once caught, cannot be cured?

At the time I was within months of completing my degree. I still keep on telling myself that I will complete it one day, if just as a reflection on all the technology developments I have been involved in. The problem is that that day keeps slipping. So, the strong intent is there, but it will have to wait until some break occurs. Right now the entrepreneurial part wins out.

Cecil Green Enterprise Award 2003

SEG is honoring 'Paul van Riel with the Cecil Green Enterprise Award in recognition of his determination, vision, and geophysical and management skills in starting and growing Jason Geosystems. Although Paul was not alone in founding Jason, he was the consistent driver and focal person in the company. Jason was founded in 1986 at Delft University as an outgrowth of the Princeps Project, which had as a goal research into geophysical inversion technology. Despite facing an environment that was not real supportive of entrepreneurial endeavors, Paul was able to get support and launch Jason. Over its nearly 15 years of existence as a private company, Jason grew from a small startup operation to an industry leader in inversion and reservoir characterization technology. The company today has 11 offices worldwide and employs 120 people. Jason was purchased by Fugro in December 2001 and the transaction was highlighted as a great success story by the Dutch Financial Times.

Biography Citation for the Cecil Green Enterprise Award

Contributed by A. Hannink

Paul, born in 1956, has had lifelong exposure to the international oil business (his father was employed by Shell International).

He spent much of his youth moving around the world, which no doubt substantially contributed to broadening his view on life. After secondary school he enrolled in the Delft University Physics Department. By fortunate coincidence, when Paul started his MSc program, he was able to join the new Laboratory of Seismic and Acoustics. The enthusiasm and compelling leadership of Guus Berkhout made it an easy choice.

After completing an initial research project on multiple elimination, Paul accepted a research internship with EnTec Energy Consultants, a London-based start-up. The subject was reservoir characterization using seismic inversion. Research turned into a year-long product development project. He developed an algorithm that worked, but why it did remained unclear. This unanswered question inspired him tremendously and launched the second phase of his MSc research, which he completed in 1982, cum laude, with a thesis on seismic trace inversion.

The subject was intriguing. Even more so was his experience at EnTec of working in a start-up company. At this juncture Paul decided that establishing a high-tech company was what he wanted to accomplish. Partnering with a friend, he evaluated the potential to start a business to develop and market “next generation” seismic reservoir characterization methods. They quickly concluded that pending market circumstances would not support this challenging endeavor. To resolve this temporary situation, they teamed with Professor Berkhout to form the Princeps oil industry consortium for seismic reservoir characterization—the first of its kind at Delft University and precursor to the now wellknown Delphi Consortium. Paul ran the seismic-related research. After three years of hard work, the first technical successes on field data were realized, paving the way for re-evaluating business opportunities.

They composed a business plan to start up Jason Geosystems, a Dutch company focusing on the development and marketing of novel, quantitative seismic reservoir characterization software. The two entrepreneurs succeeded in raising capital. In March 1986 the company was launched with Paul as cofounder and comanaging director.

As always with such a venture, endurance, drive, and a positive attitude were sorely needed. The first products came to the market in the late 1980s/early 1990s—a time when the industry was hard hit by the weak economy. The newly founded company suffered also and had to go through a painful reorganization. As an integral part of the restructuring, Paul moved to Houston to develop the crucial North American market. A one-year assignment turned into a challenging and fascinating five years with a steep learning curve. Perseverance, product-design creativity, and permanent and uncompromising belief in innovation were the drivers that eventually got Jason on the right track. After very difficult initial years, the company hit the turning point and prospered, with continued growth and profitability from 1993 onward. An industry crown jewel had been established and this did not go unobserved. Several service companies showed strong interest. After deep consideration, Jason’s board and management decided to integrate with an internationally operating services company. With reference to this vision, Jason was acquired by Fugro, a large Dutch services company, in 2001. Jason now operates as a Fugro group company, with continued focus on integrated, quantitative reservoir characterization.

Paul has made it a strong point throughout his career to personally promote opening new (technical) horizons. His ongoing entrepreneurship has been very successful. Those of us who know Paul have come to appreciate his optimistic attitude, quick and probing mind, and his wonderful sense of humor. He is truly deserving of SEG’s Cecil Green Enterprise Award.


Clark, D. (2004). ”Paul van Riel.” The Leading Edge, 23(2), 128–191.[1]