With the acquisition of Magseis Fairfield, we are the world's leading ocean bottom node company. TGS represents about 36%-37% of the total investments in multi-client data. The size of our multi-client database is truly unique in the industry. No one really knows what the future will bring. I think we can all agree that the energy mix is gonna change. We still believe that oil and gas will be a significant part of that energy mix. That's the reason for some of our strategic choices over the past 12 or 18 months. We see a desperate need among new energy companies to find a supplier who can provide big amounts of data and data management and the application of artificial intelligence. I think there is a role for us to play.
Today we have a big division doing new energy solutions, mainly through acquisitions but also organic growth to help them make good investment decisions. We have such a diverse offering now, whether it's for wind, solar, geothermal, CCS, and of course there is still gonna be a significant amount of oil and gas in that mix, and we wanna continue to support that as well. We wanna provide clients across the energy space with the largest library of subsurface data in the world. We're gonna continue to take market share, we're gonna continue to grow our business outside the core oil and gas. Our goal is that in 40 years time we're gonna reflect the overall energy mix, and that mix is gonna change and so is TGS.
Good morning or afternoon from wherever you're joining us. Welcome to TGS Capital Markets Day 2023, coming to you live from Oslo, Norway. My name is Jaclyn Townsend, Vice President of Marketing at TGS. This live event is a full presentation covering our Capital Markets Day. A condensed and on-demand version will be available after the event on the newly redesigned tgs.com, which I encourage you to visit and explore our wide range of energy data, insights, and solutions. Before we get started, I would like to draw your attention to review our forward-looking statement. For those of us joining us live here in Oslo, I did wanna cover the emergency exit plan. There is one exit to your right, and then you can also go out the way that you came in, up the stairs and out the front door.
Today's agenda will begin with a word from our board of directors chair, Chris Finlayson, followed by our keynote, Dr. Scott Tinker. We will have a short break, and we'll cover the market outlook and discuss our strategic and sustainability priorities, our financial guidance. We will summarize today's topics, followed by a live Q&A, and we'll actually have a Q&A right after the keynote as well. With us today is Chris Finlayson, TGS's Board of Directors Cha ir. Chris, a geologist and petroleum engineer by trade, has nearly 40 years of technical and commercial experience in the oil and gas industry. Chris was elected as board director in 2019, Chair in 2022. Sven Børre Larsen, CFO, who joined TGS in 2015.
He had several years of experience as CFO in the oil service industry and from the investment banking industry. With us today is Will Ashby, Executive Vice President of Eastern Hemisphere. Will joined TGS in 2011 and has served in several leadership roles within the company. Before assuming his role, Will had an executive responsibility over North America. David Hajovsky, who joined TGS in 2017 and has had several leadership roles within TGS, including Vice President of Latin America and vice president of Africa, Middle East, and Asia Pacific, before assuming the role of Executive Vice President of Western Hemisphere in 2021. We have Jan Schoolmeesters, who joined TGS with the acquisition of Spectrum, where he was a COO since 2011 and now serves as the Executive Vice President of Digital Energy Solutions.
Also with us is Carel Hooijkaas, who has recently been appointed to Executive Vice President of Acquisition through the acquisition of Magseis Fairfield. Carel brings over 25 years of oilfield services and equipment experience and has also held several executive positions throughout his career, including CEO of Magseis Fairfield from 2019 to 2022. Finally, I'd like to introduce Whitney Eaton, who joined TGS in 2014 as Corporate Compliance Director and has since served TGS in a variety of leadership capacities before assuming the role of Executive Vice President of People and ESG in 2021. During today's event, there is an opportunity to ask questions. If you're online, you can ask questions anytime during the presentation by clicking the orange button, Ask a Question, in your display, and we'll address as many as possible during the Q&A sessions.
One after the Q&A and one at the end of our presentation. If you're joining us live, you may ask a question by raising your hand when that time comes. Now, without further ado, it's my pleasure to introduce TGS's Board Chair, Chris Finlayson. Welcome, Chris.
Thank you.
I prefer it if you applaud when you sit down, you know, rather than you stand up. Good afternoon, ladies and gentlemen, and thank you for being able to join us, whether in person or online at this year's TGS Capital Markets Day. As was said, my name's Chris Finlayson. I've been a director for of TGS now for nearly four years. About a year ago, I stepped up to replace Hank Hamilton as chair when he elected to retire after a long and highly honorable time in the role. Our external speaker, Scott Tinker, will shortly give us a fascinating perspective on the realities of the energy transition and the implications of that for our business.
After that, after the break, Kristian and his team will have a really exciting set of presentations to share with you, demonstrating the great opportunity set we believe we have in front of us. I don't want to steal their thunder, what I will do is set the scene a little. Now, we set our strategy some four years ago in a very different economic climate. I would characterize it as increase our market share in our core business, multi-client seismic. Broaden the seismic market we address by building our position in infrastructure-led exploration, ILX. Use our core skills in data to address new markets in the energy transition, and over time, to build a significant market position in data for the renewable sector.
While rather like battle plans, many company strategies don't survive contact with the enemy or reality for very long, I'm delighted to say that we have continued to successfully pursue these themes through the downturn and now into the current growth environment. In-house growth and activity has been supplemented by five highly successful acquisitions over this period. Spectrum and ION in our multi-client data business, Magseis in the ocean bottom node, ILX space, and 4C and Prediktor in wind and solar respectively. As a board, we're committed to ensuring that any acquisition gives value to our shareholders, as well as supporting and being aligned with our strategic objectives. Furthermore, they must be rapidly integrated into TGS's structure and corporate ethos to ensure that synergies that have been identified are rapidly and fully realized.
We as a board, that is, think that this has become a differentiating skill of our leadership team with the successful integration of retained staff after an acquisition and their alignment into the one TGS culture, which is so strong. Of course, these acquisitions have only been possible because of the strong financial position which TGS has been able to build and to maintain with flexibility through the cycle, and we believe that this will remain extremely important in the future. Our low debt burden gives us flexibility and the ability to respond to opportunity, and that is not open to many of our competitors in the oilfield services sector. We're also passionate about how we do our business, and you'll hear later about our industry-leading progress in all aspects of ESG and in our work environments, and the recognition that this has received.
As a board, we strongly support management in their commitment to move further in these areas, to make TGS both an environmental leader and to keep it a great place to work. In the end, our business has three assets, our industry-leading database, which Kristian talked about in the video there, our differentiating technologies, and our people. You will hear how we continue to build our industry-leading position in data, seismic, well, wind, and solar, and how we are using technology to extract extra value from this data. For example, through the provision of integrated data to carbon capture and storage schemes, and by extending our multi-client model into the wind arena. However, beyond strategy, governance, and financial monitoring, it's a key responsibility of the modern board to ensure that our human assets, our talent, is challenged, developed, suitably rewarded, and most importantly, retained.
In my time at TGS, I've been deeply impressed by the differentiating quality of our staff, both supporting Kristian a t leadership level, but also throughout the organization. We spend significant time as a board on this, and given the challenges of significant establishments in the very different environments of the U.S.A., U.K., and of course, Norway, we need to properly balance attracting and retaining the right staff and leadership to ensure that we can deliver maximum value to our shareholders.I believe that TGS is very well positioned for further growth and value creation, with strong leadership, great technology, and leading innovation. With that, I would like to once again thank you all for your attendance today and promise you an exciting and, I think, thought-provoking set of presentations. I'd now like to introduce Scott, who I've lost, he's over here, Scott Tinker, to deliver our keynote address.
Thank you all very much.
Well, good afternoon, in my brain, still good morning, having traveled from Austin, Texas yesterday. As Chris was talking about a plan, I was thinking of the quote from the famous philosopher and ex-boxer Mike Tyson, who said, "Everybody has a plan until I punch them in the face." This industry gets punched in the face a bit, doesn't it? It keeps coming back, and I'm talking about the broad energy industry. I'm glad to be here. I was thinking, the last time I was in Oslo, I believe, was 2009. I was here to interview Helge Lund, who was CEO of Statoil at the time, for our first film, Switch. That film starts out with the word Norway. The very first word, Norway. Energy so clean, you can drink it.
We're of course talking about your remarkable hydro. It's really nice to be back. I'm glad to join you here today and got a lot to talk about. We'll start with some other philosophy. Aristotle, "It's a mark of an educated mind to be able to entertain a thought without accepting it." Wouldn't that be nice if we could just have conversations, civil dialogue? You don't have to accept everything I say. You probably won't, and that's okay. We do need to be able to talk. Now, another philosopher in the U.S. is ballplayer Yogi Berra. "If the world was perfect, it wouldn't be." We know we live in an imperfect world. We know that. Nothing is ever gonna be perfect. I have an AXIOM that most people don't know how gasoline is made or where electricity comes from, but they think they do.
They vote, right? They vote. This is what drives this global dynamic in energy so much. Here's a young person getting on an airplane, and you can see on their backpack it says, "People versus fossil fuels." They have a Nalgene water bottle and they're getting on a plane flying on jet fuel. I don't mind passion. I love passion. Walk. Don't fly. Put your passion where your feet are. This is one of the great challenges, is education, understanding of energy and what fossil fuels component actually do. Look, we started 1,000 years ago in caves, cooking and keeping ourselves warm. The first energy was the sun. The sun was the first form of energy, and it grew the hay that powered our vehicles, these things that pulled their own food around, right? Their own energy.
Then we used the motion of the wind and the motion of water to make energy many, many years ago. Bigger dams we built, and finally we started killing whales to get their oil and light the lights that we put in our homes. That's kind of the old energy, if you will, and this is the energy that's powered about one person at a time. Then we found oil and coal, and coal changed the world. You burn coal, boil water, make steam, turn a turbine, run a generator, and that makes light. Electricity actually changed the world. We could power more people than just one now with coal. Then liquid hydrocarbons came along, which we refine, and we put into our vehicles. Very dense, then methane and finally nuclear.
Are nuclear and natural gas the clean future as we look out at that world in the future? I don't know. Why am I showing you this? This is the most important concept in energy. It's energy density. Over the last 1,000 years, energy has gotten denser. Not a little bit, a lot denser. Hundreds of times denser. We have words for these things, but dense energy drives modern societies. That's what allows us to be here in this world that we live in, this very privileged, developed world. We call these renewable and thermal, left and right. We call them clean and dirty. You might use these words. Your kids certainly learn them in schools. It's kinda judgmental. On the other side, you might call them intermittent and reliable. You know, it just depends on your perspective, doesn't it?
Weather dependent and firm energy. Really, it's molecules and electrons. The things on the left make electricity. Things on the right can burn to make electricity, but they do other things as well. They make a lot of heat. You have to have a lot of heat to make cement and steel and ammonia and plastics. A lot of heat. Not electricity. More than that. The developed world needs electricity and fuels, pure and simple. We are not going to electrify everything. Just won't work. The challenge, of course, is many people in the world today don't have any of these things, or very few. I've been lucky to visit them. These are the countries I've been in, 60 of them, color-coded by number of visits. Norway is red, which means more than five. And I've met a lot of folks.
All these came from our second film about energy poverty, released in 2020. This man my age had tears in his eyes when he told me his kids and grandkids would have something he'd never had. They had school. They had come out of the bush, literally, in Ethiopia and were in school for the first time. If you come over to Nepal, you see Sanu Kanchhi cooking indoors with wood, like almost 3 billion people in the world still do today. We visited the local hospital, the Seme Memorial Hospital. 3 billion people breathing particulates. 3 million a year die, mostly kids and women, from cancer and other lung diseases. 3 million. That's what COVID killed in 2020 in the whole world, and we shut down the world's economy for that. This is happening every single year in the world today.
I come back to Africa, to Kibra, the largest slum outside of Nairobi. You see a church that doubles as a school with two light bulbs finally dangling inside of it. Kids are coming home in their uniforms across mounds of polluted water and garbage and other kinds of things, trying to get education. Come over to Vietnam. We meet Thon in the red floating house there. Every morning she carries her crippled son on her back across that plank to get him to a school, so he can have something that she didn't have. Now, as we come back to India, we see some of the most severe poverty I've ever seen in my life and some of the most severe wealth. It's a remarkable country of extremes. Finally, in Colombia, we brought first solar here.
This is the indigenous village of Gunmaku, the Arhuaco people. You can see the solar array on the left. It powers these seven mud huts and thatch roofs with a couple light bulbs and some ceiling fans. These kids, half of them will die before they reach adulthood of a tooth infection or dysentery. It won't kill you, but it kills them. That last night when we turned on the light for the first time on a pole they had carved in the village center, I was with the mama or the chief. It was a very meaningful moment. They'd never seen each other at night in their own village except over a fire. It was remarkable for all of us to feel that. Here we sit. We sit in this world where 3/4 of the people now live in Latin America, Asia, and Africa.
Three out of every four, they're growing faster than the rest. It's a paradox, isn't it? Energy won't end poverty. You can't end poverty without energy. You have to have it to get started. It's time to power the people in this world. It is time. It's quiz time. They didn't tell you you're gonna actually have to take quiz and pass in order to leave. I hope you pass. It's the honor system, though, so you're lucky. Here's the first question. What percent of the population live at some level of energy poverty? What percent? Just think about it in your head. Let's take a look. This is the world's income, okay? Color-coded. Low, the reds and the yellows here. It's all over the world, but it's concentrated. I'm gonna put the city livability index on here.
This is how livable the cities, with the least in orange. Look at where the least livable cities are, the orange, yellow, and green, where it's poor. Now we'll put the most livable cities in blue, right on top of wealth. Of course, they are. That won't surprise anyone. When you see these emerging economies, again, all over the world, but they're concentrated here in what's called the Global South now by some, sub-sub-equatorial regions. They live in energy poverty for the most part. They just need something to get started, affordable energy to get started. As you come in through the developing world in various shades of pink, they have energy. It's not secure. It comes and goes to them, and you and I don't like it when our energy is gone for 4 hours or even a day.
This is routine in many parts of the world today. We need reliable energy. The wealthy world, us in the blue. We want it clean. We want climate security. We want it clean, okay? Look at the differences here around the world. Where's the cleanest air? The green. Where? Where it's rich. Where's the dirtiest air? Where it's poor. Same with water. Same with soil, okay? We can afford to clean it up. Poor countries can't. The 60 countries I've been in, every time the worst environments in the world are where it's poor. They can't afford to clean up that environment. Other priorities take precedent. Greater than 60% of the world live in some state of energy poverty today still, without any energy or reliable energy. It's a great challenge.
You bring these all together, you realize that energy security varies across the globe tremendously. What does energy security do for us? Well, it underpins healthy economies. Every healthy economy in the world has secure energy, okay? That allows us to do what? Invest in the environment. It flows this way. Energy, the economy, the environment. It flows that way, and I call that overlap space the radical middle for years and years. It's radically lonely sometimes, but that's where the action is, trying to balance those three E's, if you will. You can look at a little eight-year policy waltz or migration. Pre-Paris, we're sitting down here in kind of the economic security, Paris pulled us towards CO2, toward climate.
COVID said, "No, come on back. Talk about the economy again." net zero emissions things coming out of Europe mainly, COP26 a year and a half ago, way towards carbon. Mr. Putin said, "No, come on back. Let's talk about energy security again." Every single political leader in the world is now vocal about energy security. They always are, but they're vocal about it. In Egypt, COP27 kind of moved us this way, Africa spoke with one voice, "Fossil fuels will lift us from poverty." That's what happened at COP27, they're right. It built the West. It built Europe. They'll build the world. We got the radical middle surrounded. This brings us to some trends, I said to the U.S. Senate in the first Manchin hearing on climate a couple years ago.
We've got to strive to be completely factual, but also factually complete, and there's a difference. Factual completeness is hard. Quiz time, here we go. Which sources of primary energy have decreased since 1995? Select all that apply. Which have gone down or since 1965. Which have gone down in the last almost 70 years? Which of these? Here's the data, and my slides are all color-coded. Gray is coal, green's oil, red's gas, nuclear there in orange, et cetera. Here's the data. Coal and oil are very dense. They make a lot of CO2 when you burn them. Gas and nuclear are very dense. They don't make as much CO2. Hydro and solar and wind, et cetera, are not dense, but they don't make much CO2. They're trade-offs. Nothing is perfect in this world.
When you look at this, you see the 2009 recession, that little dimple down, the Great Recession of the world. You can see COVID now too. Many people said, "This is structural, it's permanent." Now we're right back to consuming. 2022 will be even higher. It's just another down dimple in global energy consumption. In fact, we still consume more coal and oil than all the other energy in the world combined, by a lot. No source of energy has gone down, not even hay. More people, more consumption, okay, in absolute terms. You'll hear, and it's completely factual, solar and wind are the fastest-growing forms. Look at the data. They're still growing exponentially. Remarkable growth, costs coming down, et cetera. What would make this factually complete? If we scale it. Let's scale them. Remember, it's right here in the data.
There's solar and wind in the global data. They represent about 10% of the growth in energy demand in the timeframe, not the base. This scale of energy consumption and demand is phenomenal as we move into the future. Here it is by region. North America and Europe have been flat for close to 40 years. Asia is growing in energy demand tremendously. The rest of the world is just getting started, okay. What does that mean? It means that 3/4 of the world, remember where people live, are just getting started. Consuming about half the world's energy, three out of every four people just starting to grow. Here's China. The gray is coal. Huge uptick. Here's the rest of China's energy. This isn't electricity, total energy. China consumes more coal than everything else combined, by quite a bit today.
That's policy. Chairman Xi has been very, very transparent about it. We're gonna build on coal, and they have, and they are. There's no COVID-19 dimple in China. Went up, okay. You can pull an article like this every day. That's yesterday, okay. March 6th, China leans on coal. Energy security. Let's lay India right on top of China. Here's India. You can see the COVID dip in India. India will pass China in population in April, next month. More people. The big difference in terms of energy is India consumes a quarter of the energy that China does today. That speaks to per capita energy, a quarter. Let's slide India to the left a quarter century. Watch close. Look familiar? What's India gonna do? If they do what China did, game over, climate. Okay. If they do something different, there's a chance.
Nuclear, hydro, natural gas, something for firm base load to complement solar and wind. This was maybe last week. I could pull one of these every day too. Phase down of coal means actually expansion of coal. India, Mr. Modi has been very clear. We're gonna build on coal unless there's something, some other option for us. If you look at coal consumption in the world, we've come down tremendously in the U.S. and North America and Europe tremendously. Cut it in half and still coming down. There's Asia's coal, and the rest of the world, hardly any. In fact, coal is growing tremendously, and it's not just China. Pakistan moving away from gas, Bangladesh moving away from renewables. These are just in the last few weeks. Coal is an Asian story today. Look at the right side. It's an Asian story. Sometimes it's a Europe story.
Germany increased its coal when things got pretty tricky and Russian gas was set back or cut off, right. We fall back on coal. It's interesting. Now let's lay natural gas right on top of this. Same scale. Look to the right on the gas. Every geopolitical region in the world is increasing its natural gas consumption, except Europe is kind of flat. The ratio of gas to coal has gone from 39% to 91%. Gas will pass coal in terms of the most used. This is generation, it's not capacity. Generation. Most used fuel. Which brings us to optionality. What does it mean? This is the primary energy consumption. I'm gonna compare North America, Asia, and Europe, but I'm gonna start with Norway. Your total energy consumption. Now watch across the bottom. I'm gonna put this blue on. Here we go. Here's Norway. Did you see it happen?
Okay. It's there, I promise. Here's the rest of Europe. Here's North America. Here's Asia. 65 years ago, essentially no energy in Asia. Today, more than Europe and North America combined. What's the mix? This isn't in units now, this is percentage. Europe has cut oil and coal in half, 47% today down from 90. Grew the gas and nuclear some, has been growing hydro and solar and wind. That's the European energy mix. 47% and going down, 36 and 17. Now I'm gonna lay North America right on top. Watch close. 40%, 7% coal and oil. It's the exact same in North America, but more gas. 12% hydro, solar, and wind. Now here comes Asia. Ready? It's different. 73%. Remember, Asia consumes more energy than North America and Europe combined. You just saw the data for that.
Here's Norway. Ready? It's remarkable. Now look, Norway is a country of less than 6 million people with a $1 trillion wealth fund built from oil, powered 70% by hydro. You're not normal, okay? The world can't be like you. It doesn't exist out there. The resources like this aren't there. It's phenomenal. It's phenomenal. Norway, Europe, North America, Asia. Look at the differences as you go across there. Norway, you have oil and gas, and you produce it. Europe in the aggregate doesn't. It imports. The U.S. produces, and turns out Asia imports too. We'll take a look at the actual details here. Europe and China need optionality, the gas and oil. It's interesting, isn't it? Here's the data for gas. This is the consumption, and it's sorted by largest to smallest of gas.
Here's the production in the same regions. There's only two regions that consume more than they produce, Asia and Europe. More gas. You need options. The price of gas in the U.S. before shale development looked like this. It was volatile, $5-$15 pre-Great Recession, and then bam, $3 steady on. Saved Mr. Obama's administration after the Great Recession. Trump just rode the wave. Why did this happen? Because of shale. The production of shale doubled. We did fracking, okay? It doubled. The price got stable, and there it sits. The fastest energy transition probably I've ever seen in the world. Yet some in the U.S. still don't like gas. I took this picture in Aspen, Colorado. You've eaten under these things? Yeah. Keep yourself warm while you're having outdoor dinner. Just heat the atmosphere directly. Cut out the middleman, you know.
It says it right on the propane tank. Aspen's passionate about climate change. It says it, "No global warming," right here. Gave a talk in California six, eight months ago. We were sitting under 10 of these things. We were in short sleeves. It wasn't even chilly. California burning propane. I don't know if California knows propane's gas. I don't know. They're cutting off gas hookups in San Diego. These are ironies. Remember, we don't know where gasoline comes from or how electricity is made. These are the great energy ironies, and they abound. Gas price in the North America has gotten a little more volatile. Let's scale it and show it compared to Europe. 5x, 500% more, and they've come down now some in the last few months, but there's still this spread.
That's incredible to see that kind of price. Is it the Ukraine that did that? Well, Ukraine happened here. This precedes Ukraine. Ukraine exacerbated it, but this precedes the Ukraine, contrary to what might be said. Here's what's been happening. Africa. Solar and wind average is there around 10%. Africa below it for the most part. Asia, China just above it. Australia above it. In the Americas, the U.S. and Brazil are above the global average, and here's Europe with solar and wind. Many would say you're leading. You're certainly leading in solar and wind. Here's the energy mix for power now, not total. This is what's happened structurally for electricity generation. Come down, coal way down, gas, nuclear, hydro, solar and wind, and other things now a third for power generation in the EU and U.K.. About a third. How's that doing for you?
Last summer, the prices of electricity were $0.60 a kilowatt-hour. That's five times more expensive than in the U.S. on average. 500% more. Bloomberg said the biggest mistake is they promised to always get lower, and that's true. This may be okay. It's not a judgment. This is just facts and physics. The cost to the consumer is more. The cost that gets quoted is this LCOE thing, levelized cost. That's at the plant gate, the busbar. That's not to you. To get it to you costs money to make it reliable. You have to be something there to back it up, and that something is expensive. Batteries, gas, load followers, whatever it is. It's more expensive to the consumer. This is policy. This is energy policy that underpins this. Not judging it, but we need to know what's driving this.
It's important. I wrote a piece in Fortune just a few months ago that says optionality is what drives. We have to have energy optionality. When you start eliminating options, requiring EVs only, cutting off gas hookups in California, you start eliminating options, things get ugly. Markets don't like limited options. Think about it. Same story in oil. That's the consumption, here's the production. There's only two regions in the world that consume more oil than they produce, Asia and Europe, by a lot. Again, you need options to oil. I get it. Options to gas, solar and wind, options to oil. Something for transportation other than that. Enter the electric vehicle. We have about 17-18 million EVs in the world today, here's where they are geopolitically. We say we're going to 55 million in three years. 55 million.
How does China, in red, charge its EVs? Let's be candid about it. With coal, you've seen the data. It's important. Europe and Asia are gonna be the growth in EVs. That's what's forecast, that's what will probably happen. Options to oil. We say we're gonna electrify half of them by 2040. I have no idea where this number comes from, let's just go with it. Half the fleet. There's 1.4 billion vehicles in the world today. Let's electrify half of them, 700 million. It would take 300 million charging stations about, we have 10 today, 10-15, shown to the left of the gray area. I can fit the growth in EVs projected into that curve and see what it's gonna take to go to 700 million. It's right along the line. This is incredible.
This would be incredible growth of electric vehicle if the world does this. 700 million. There's about 5,000 batteries on average in each car. Did you know that? A Tesla S has 7,000. 3.5 trillion batteries. 3.5 trillion batteries. We have tens of billions for all our gadgets today. 3.5 trillion new batteries to power half the fleet, and they wear out. You gotta make them again when they wear out. I have to really process all this, and maybe this is why, in addition to the loss of subsidies, Germans are thinking twice about EVs.
Cooling off, Kia CEO said, "Pretty tough." There's a lot coming out now if you read closely, and maybe not, depends on what you like, whatever you stream yourself, stream something else in the morning and read that, 'cause there's a lot coming out that's starting to look at it, and one of the big challenges is the lithium. This is the actual production of lithium today, and here's where we're forecasting it will go or needs to go. A lot of this is unfinanced projects and recycling, which we don't do, a lot of that, the yellow and the blue. The demand is gonna exceed that by almost 2x in order to power 700 million. When demand exceeds supply by 2x, even if we can do that supply, things get volatile.
Look at In the last three years, look at the percentage change in these critical elements, these critical metals. 50%-100%, and here's lithium. 900%. Happening. We've only powered 17 or 18 million vehicles. They're commodities. They're volatile and expensive. Optionality matters here. Smaller cars, you bet. You're not hauling as much of the weight in a battery. City, quiet, plug it in at night, not driving that far. As the vehicle gets bigger, maybe hydrogen. Denser, no emissions, and the bigger the vehicle, it's gonna still need liquids. I read about things like Elon, you know, your planes will be flying on batteries. No, they won't. Not if they have people in them. Okay. His rockets don't fly on batteries. There's a reason for that. Needs energy density. You can't haul the whole weight in a battery. Okay.
What are the emissions trends? If you haven't read your neighbor just east, Hans Rosling, who's passed, a medical doctor, wrote a wonderful book called Factfulness. You know, he said, "Data must be used to tell the truth, you know, no matter how noble the intentions." Buried in the paragraph I found in the last chapter is phenomenal. Tell the truth. It's a wonderful read 'cause it's things are better than you think. 10 reasons why they're better than you think. His son and daughter-in-law finished it. Quiz time. Asia emits more CO2 today than all the rest of the world combined. Is that true or false? Here's the data. Here's us. Flat for 30 to 40 years. Coming down a little bit. Doubled the economy. Here's Asia, and here's the rest of the world kinda just getting started.
In fact, Asia does emit more CO2 than the rest of the world, just barely, growing faster. Why? This is an important graph. Above that red line, countries consume more than they produce. Below the red line, countries produce more than they consume, across the bottom is the CO2 that gets emitted doing that. The United States emits 5 billion tons of CO2 every year to make our stuff, we're still consumers. China emits 10 billion but produces a lot more than it consumes. In fact, most of the non-club of rich nations, us, the non-rich, are producers. Most of the rich nations, led by Europe and the U.S., are consumers. Which means we're saying, "Send us our stuff. Check it out. What are you wearing? What's in your phone, your car?" Everything comes from Asia.
We're effectively saying, Make the CO2 while you do it. Use coal, it's cheap. Want our products delivered affordably. We kind of close our eyes and call this a zero-emission strategy. How many atmospheres are there in the world? Just one. One global atmosphere. This doesn't address climate change. Right. It's like buying offsets. From who? From who? Asia makes our stuff. We're good with that, but we better acknowledge the reality of that. What are the impacts? Yes, climate. Big impact. Very important. We add the land and the air and the water to that and realize these things are very interconnected. Imagine living a life so carefully there are no signs you lived at all. I love this quote. By the way, none of you qualify, okay? None of us qualify. There's plenty of signs we live, good and bad.
It takes 7x more metals to make a electric vehicle than a combustion engine. 700% more. It's in the batteries. It turns out it takes 600% more metals for solar and wind than natural gas and coal. Natural gas and coal have other issues, the mining is here. 600% more. Internal combustion engines, we gotta drill for it, and we burn it, and we dump it into the atmosphere. Solar, wind, and EVs, we mine it, and then we dump it into the landfills. Just different challenges. On a terawatt hour basis, cement, glass, concrete, steel, and other things, the things that you have to burn molecules to get the heat, tremendous amount more for solar and wind because of the density issue. It takes more stuff to gather the sun and the wind than hydrocarbons or uranium and thorium.
It's just a denser. It's physics. Again, it's not judgment. Low density energy require extensive manufactured materials. Where do they come from? These are the top three countries producing oil and gas in the world today. The top three. Here's the top three producing other things for solar, wind, and batteries. It's kind of spread around. This is the mines. Who processes it? Who owns the processing? China. Belt and Roads, beautiful, brilliant. Buy it, ship it to us, we will process it and then distribute it. Who owns the supply chains for solar, wind, and batteries? China. For your fuel for your car. They control that system. Again, it was a brilliant strategy. There are life cycle impacts then of all these things. This is going from the lowest density biofuels to the highest density nuclear.
Biofuels take a lot to grow and process and refine it and move it and burn it, converting carbohydrates to hydrocarbons. That's what bio does. Solar, wind, and batteries do these things too. You mine it, you make it, you deploy it, you have to transmit it, power lines, then you dump it. Oil, gas, and coal do all these things. Mine, manufacture, refine it, burn it. This is the part where you usually really hate me. There's no renewable energy. That's a myth. When you have to get something from the earth, and you make these things to collect the energy, and it wears out, and you dump it in the earth or you dump it in the atmosphere and do it again and again, it's not renewable. Okay. The sun and the wind are, so is oil in some sense.
I mean, it's free, but you gotta get it. We've gotta think very carefully about these earth resources as we think about transition. What does it really mean? It means we're gonna add more energy for a while and lower emissions. That's this, the two-pronged dual challenge of energy transition. Lifting the world up, continuing to keep stable, and lowering these emissions quickly and significantly. If you look at annual primary consumption, and I just, this is mine, nobody else's, out to 2065 with a 30% solar wind scenario. Coal going down a lot, oil coming down some, gas and nuclear rising, and everything else rising even more. Here's the demand for energy. That's the actual demand, historical. I roll it over as you get out into the middle of the century. Coal and oil go way down. Everything else going up.
The emissions from that look like this. Coal down, oil down, gas down. This is the fossil fuel emissions from that. It's very different today than it will be in the future. That's a good trend, but it's not net zero. Not even close. You've gotta capture and store the carbon from a lot of these things in order to be able to do this at scale. Could be 40%, could be 28%, could be 60%. Gonna be a challenge to get mining. These are the things we have to think about. Technology, Chris talked about them when he did the intro, the cost, the scale, and the timeframe. They all have to be there. You can't throw one out in order to work. Tech, right price, scalable, and the timeframes needed. Natural gas and nuclear replacing coal, that's a big lever, and it's happening.
It's happening in Europe and the U.S. hydrogen, geothermal, hydro where it's available as a resource, carbon capture, direct air capture, nature solutions, these are some big things that are now finally starting to scale. Solar, wind, and biomass, finally efficiency. Can we do more with less? These are the big levers. There are not many more. The actual lower emissions, not trade things. Optionality is required. It's what drive these things at scale. Here we sit, exact same data I'm gonna show you in the energy mix now back to where we started, the global energy mix. That's that forecast, here's what it looks like as a percentage. What you see here, can you see COVID? That's the actual data. It's barely a dimple. These transitions happen very slowly, big events like that are barely noticeable.
That's the biggest one we've seen in 50 years, by the way. You're seeing coal and oil cut in half here by more than in half. You're seeing natural gas and nuclear more than double, and renewables go up five-fold, 500% in this particular scenario. It's a transition from carbon to hydrocarbons to methane to hydrogen to uranium and thorium. It's the physics. It's the density. We might need to accelerate it, and we certainly need to capture some of those emissions. We have to have dispatchable and intermittent energy partnered in order to be reliable. Reliability costs money. A portfolio of sources is needed, and there's a lot of oil and gas in that. There it sits, and this is percentage. One of my great fears is we won't have enough. Underinvestment, public perception, we won't have enough.
What happens in the world when we can't get enough solar panels? Markets get a little skittish. What happens when we don't have enough oil and gas? We go to war. It underpins the whole global economy, okay. This is non-trivial stuff. These are the largest producing companies in the world for oil. Take a look. If we combine the two from Russia, they're bigger than Aramco. We have to add all the Big Five to finally get there, the IOCs, the publicly traded and publicly regulated companies to get there. How does that make you feel? It worries me, okay. It worries me. That's one of my big fears. Let's kinda wrap it up here. This is our map of global income, and we're gonna fade it into the world at night, this remarkable satellite image.
You see where the lights are on really bright and where they're not? Here's the energy mixes around the world today. This is the actual data. I'll scale them to be proportional to actual consumption. Asia consumes half the world's energy. You've seen the data. Europe and North America. Modern economies require it, lots of energy. We wanna get rid of coal and oil. There's what's left. You wanna get rid of gas and nuclear. There's what's left. Some don't want hydro. That leaves us 6% if we did it fast. What happens if we darken the world's light by 94%? How's that look to you? Seriously, how's that look to you? It looks like the past to me, not the future. Okay, let's turn them back on. Turn the lights on.
In fact, the world, the three out of four people in the world who need energy and live without secure energy need clothing and shelter and clean water and food, over a billion people. Education and healthcare starts to lift the world out of poverty with energy. Women go for the water. They cook with the wood. They aren't in the schools when their male counterparts are. It energy poverty differentially impacts women, okay. Growth of population is directly tied to education. Immigration and migration away from autocrats today is happening routinely. The ability to invest in the environment with a healthy economy underpinned by energy and to adapt to and mitigate climate change. These are the big issues. You bring that stuff all together, you start to address the big challenges in that radical middle. Secure energy addresses a lot of these global challenges.
I'll leave you with a few thoughts. 6 billion people today need to live better lives. The net zero I'm after is net zero poverty. We solve that, the world changes, okay. Optionality is vital. We gotta end this silly competition between fuels. It's not a competition between wind and solar and nuclear and gas. We need them. They do different things in different places. We need them. They're resources. They're not everywhere. All forms of energy have benefits, and they all have impacts, okay. We gotta have access to an analysis of the data. It's critical. Big data, huge data across this whole space. It's vital to our continued understanding. A couple musings. No one owns the truth. I don't own the truth. We just seek it. We just seek the truth as we continue to learn. Shaming enough, you know, cancel shaming, especially young people.
They have to be able to get out and have these dialogues without being canceled because they say the word oil. It's not denial. It's a big part of our future. We must balance these three E's: energy, economy, and climate, the environment. Finally, it's not simple, okay? It's not simple, but it's solvable if we actually deal with the data. If we deal with it's solvable. It's not binary, not clean and dirty. It's not good and bad. It's not believer, denier. It's solvable. My day job is here, 250 folks working on these. Started a not-for-profit many years ago. Check it out. It's all film-based, a lot of stuff. A TED Talk I gave last year, 17 minutes, you can grab it for your kids. We got a PBS talk show out, energy and climate talk show.
You can stream the first season. Season 2's coming out next month, and we've already filmed Season 3. Big time, big name people. Two guests on every episode who don't agree. Dan Yergin talking with Ernie Moniz about geopolitics, et cetera. It's a blast, but you can stream these things. They're 25 minutes, and we're across the U.S., and World Channel picked us up, so 100 million households with it. Thanks for your time, and if we have time, I'm happy to answer any questions you might have. Thanks.
Thank you for that, Scott. Very interesting. We have time for a few questions from Scott, if there are anyone.
I hear that you're shy. Who wants to take the risk? They didn't bring me here to just tell you what you wanna hear, obviously. I think Kristian brought me here to tell you what I've been saying for 30 years. Yeah.
Hi. You mentioned hydrogen as one of the future solutions. Can you just talk about your views on green versus blue hydrogen?
Sure.
Obviously, renewable energy through inefficient processes in green and volume on the blue.
Sure.
How do those two merge?
Sure. Yeah, hydrogen unfortunately, H2 doesn't float around naturally very many places. You can find it, you have to make it. You either split the water molecule, H2O, or you split methane, CH4. It takes less energy to split the methane molecule. It's more affordable. That's why almost all the hydrogen in the world today comes from methane, not water. Green would be splitting well, water with solar and wind. The hydrogens aren't color-coded, by the way. They're all the same color, no color, we call that one green, solar, wind, and water. It's gonna be expensive. Takes a lot of energy to do it. As you kinda come down through the suite, you have blue hydrogen, things involving methane, where you capture the carbon and store it.
You gotta put the cost to capture on there, but still in most scenarios today, more affordable than solar and wind and water, hydrolysis. One is steam reforming, one is hydrolysis. I kinda like pink hydrogen just 'cause I'm a fan of pink. I almost wore a pink shirt, but the tie didn't match. Pink is nuclear and either methane or water, hydrolysis, but using nuclear as the source, no emissions there, et cetera. Hydrogen's a great fuel, burns. Terrible example, the Hindenburg burns. It's also an energy carrier, electricity. You can put it in cars and fuel cells, no emissions, just like batteries, only denser, right? I see the hydrogen economy has been coming. It's gonna take a while. I know Europe has a strategy to use hydrogen to back up solar and wind. I would suggest you have something else too, okay?
It's gonna take a while. Part of the challenge with hydrogen is you have to have it at scale. Where do you store it? It's the lightest element on the periodic table. Remember element number one, it likes to escape more than helium. You have to be able to move it and store it safely. Storing it at scale is not easy. We've got a big consortium at the Bureau on Hydrogen Storage. A lot of companies have joined that. How do you do it? There's challenges with hydrogen. Let's not call it a silver bullet yet, but I like the directionality. What else you got?
It's also possible to ask questions online.
Here's another one in the audience. Same bold person. We may as well know your name now, I mean.
It's Mick Pickup from Barclays. You just mentioned it there on cost of hydrogen, but obviously a lot of this needs extra technology added to existing to get us to the environmental impact. In your model for 2065, how much more expensive is energy in the future than it is today?
It's a good question. That varies by geopolitical region 'cause some parts of it aren't fungible. Natural gas actually today still isn't globally fungible like oil. We're getting there with LNG, but we're not there yet. It still varies geopolitically by resource. Overall, probably more expensive because you're using a piece of it that has to be backed up, but the technologies are gonna help bring that cost down, economies of scale. Some regions will be winners depending on the resource. Some have great sun, some have great wind, some don't. Some have good natural gas, some have good oil, some don't. Most places could do nuclear. You know, uranium and thorium, not hard to get it where it needs to go. I know Europe has got sort of long-term lingering issues with nuclear. That's unfortunate.
Nuclear would be a remarkable piece of the solution here in Europe, in my opinion, if you could get over that. Does the U.S., by the way. We're just starting to crack that nut in the U.S., particularly with small modular nuclear reactors, things like TerraPower do with Bill Gates or NuScale, John Hopkins' company. We're seeing the patents go through and serial number one being built. They're 50, 100, 150 MW jobbers instead of these gigawatt. I see nuclear having a big role to play. Cost of energy overall, probably a little bit more, but not tremendously unless we try to force it, and I hope I communicated that. Policy can force transition, and transition usually bites back. Physics bites back. Economics bite back, and they say, No.
No, the markets aren't ready for that, and in fact, it's not the best long-term solution only. If you eliminate optionality, things get expensive. What other questions do we have together?
We have one online here.
Okay.
From William Davey. Given your slide on minerals and metals required for renewable energy, do you consider green hydrogen to be net zero emissions?
It takes mining takes energy, a lot of that's done with diesel. It can be done with electricity, which has to be generated somewhere. There are emissions from mining, not as much as if you're burning oil in cars, okay? It's not net zero, but it's lower emissions, the mining component of that for splitting hydrogen with solar and wind. Solar and wind take a lot of stuff to make the panels and the turbine blades, we dump them in landfills. In an emissions-only game, better. If you think about the land, the air, and the water, you gotta start to kinda blend that all in, again, I like the options. I like options of trying to protect the whole environment, climate for sure, it may not be a perfect ending, okay?
Analogy I might use is how many are runners in the room and you run a marathon. Anybody ever run a marathon? Put up your hand. Oh, lots of you. You set a time goal for yourself, right? Maybe it's, if you, if it's like me, it'd be 7 hours, but maybe you set 4 hours for yourself. If you run it in 4 hours and 15 minutes, did you fail? No, you got pretty damn close. 4 hours and 15 minutes, not a bad marathon. If I do net 70, did I fail? Did I help climate? Probably quite a bit as long as I don't hurt the growing economy and all the people that are trying to lift themselves out of poverty along the way, then probably a net benefit there. We might be able to go lower, who does that hurt?
We can't forget that. We cannot leave 6 billion people behind, or other things come to bear. I think sometimes we forget that most of the world doesn't live like us.
I think we'll leave it at that to not mess up the time plan we have laid out. Big thank you.
You bet. Thank you.
Scott, thank you. We will meet back here in roughly 10 minutes, quarter past, and there is coffee and mineral water and drinks outside.
Good afternoon, everyone. Good morning for people who follow us from North America. My name is Kristian Johansen. I'm the CEO of TGS. I noticed that Jaclyn Townsend forgot to introduce me. I probably have to do that myself. I wanna start by thanking Scott Tinker for his great presentation today. There is a story behind that. I think I met Scott Tinker about five or six years ago. I think Scott Tinker is one of the few who's kept a completely consistent message throughout this transition that our whole world has gone through over the past few years.
I think when you, when you think back on that and you see people kinda move with the wind, what Scott has basically been doing is presenting facts and presenting high-level research for many, many years, 30 years, as he said, and it's been great. It's something I even use myself sometimes when you struggle a little bit, and you get a little bit uncomfortable about, you know, are you still gonna invest a lot of money into oil and gas? You know, going back to his TED Talks and really look at the facts and really see how this plays out over time has been extremely valuable for me. This is partly what the story today is gonna be about. It's, it's about a strategy that hasn't really changed much.
It's about a strategy that we launched back in 2019, and since 2019, we've probably seen the greatest volatility in our business ever. We've kept a straight course in terms of our strategic priorities, and as you will see in a few minutes, we have delivered on most of them as well. I'm gonna start talking about the key messages of the presentation. One is becoming more and more evident every day. We are looking at a multi-year upcycle that is expected for all energy sources, not only for renewables, but also for oil and gas. There is a significant comeback now. I think E&P spending was up about 30% in 2022. It's still gonna be double-digit growth in 2023 after a very strong comeback last year.
TGS's resilient, sustainable, and proven business model has become even stronger with some of the acquisitions that we made. These acquisitions that we executed on in the summer of 2022 is part of a long-term plan that we actually built back in 2019. TGS is extremely well-positioned for leadership in both emerging and mature basins, and you're gonna hear David and Will talk more about in their presentations today. Carel is also gonna talk about how we're gonna leverage our unique technology portfolio and capitalize on our number one global OBN position. Last but not least, Jan and Whitney are gonna talk about a further diversification of TGS. We're gonna see further growth in new energy solutions, and as you probably saw from Scott's slides, that's where you're gonna see the highest growth rates.
We are extremely well-positioned there too, which Jan is gonna talk more about. Then ESG performance and leading ESG performance, it's just a license to operate in the future, and I'm extremely proud of what TGS has done in that regard, and Whitney is gonna talk more about that. This is a new and more diversified TGS. This is a very different slide to what it would have been 18 months ago. We basically have four very strong industry-leading pillars here. We have the leading multi-client data library. We've invested about $5 billion over the past 40 years in that. We're present both onshore and offshore, and we're present both in frontier and ILX. This is still the core of what TGS is doing, and that is not gonna change over the next years or decades.
We're gonna continue to be asset light. We're gonna continue to invest heavily. We're gonna continue to invest countercyclically when we need it. Ocean bottom nodes is one of the new pillars here. We now have the world's leading OBN offering, as you all know from the acquisition of Magseis, with a technology leader in that industry. We have a strong track record in all key basins, particularly U.S. Gulf of Mexico and the North Sea. We've in fact invested in more than 100 surveys or completed more than 100 surveys in OBN. New energy data, we have data offerings for pretty much all renewables. We have the Wind AXIOM and 4C Offshore that Jan is gonna talk about. We have CCS capabilities. As Scott talked about, a phenomenal growth expected in that market going forward.
We even have performance optimization software that is installed on many of the biggest solar parks in the world through the acquisition of Prediktor. Data processing, we have about 250 processing employees globally. This was further strengthened with the acquisition of ION that we did back in 2022. We have unmatched compute capacity through the collaboration with Google, and we have both land and marine processing capabilities. It's clearly a compelling investment case that we're presenting here today, and it's an investment case that I'm extremely proud to present to you all. Number one is that we see sharp recovery in E&P spending. I don't think anyone questions that anymore.
We've seen that taking place throughout the course of 2022, where, as I said, E&P spending grew by about 30%, the same with seismic spending grew about 30%. TGS actually grew our late sales by more than 100% on a like for like basis from 2021 to 2022. We have high expectations of a multiyear cycle after eight years of underinvestments in oil and gas. I think for those of you who follow the news on a daily basis, you see BP's U-turn in their strategy that was announced a couple of weeks ago. You saw a new discovery by Shell announced this morning.
I mean, there are numerous news articles now almost every day about E&Ps who are gradually changing their course and gradually understanding that we need to be in oil and gas to help out on the story that Scott explained today. We're gonna capitalize on M&A and investments. We have invested a lot during this down cycle. As I said, you know, it's, there were times, especially when we let read the IEA report in June 2021, where it says no new exploration is needed, probably the toughest day of my life in oil and gas. That's the time when you go back and you listen to Scott Tinker and you continue to invest.
I think the three big investments that we did back in the summer of 2022 is gonna pay off really well for TGS in the future. The timing couldn't have been better. We're gonna seek OBN margin improvements, and we're gonna start generating free cash flow from our OBN business. We're gonna capitalize on the energy evolution, which we are about to do. We're even making money in that business, and there's not a whole lot of companies who do that. We're growing that business, and we're growing that in a profitable way. Everything is backed by strong financials and stability. We have an industry-leading balance sheet. We have strong free cash flow generation through the cycles, and we have significant dividend capacity. I will come back to that.
The current position, again, is a result of strategic planning and execution. These are the main bullets that we showed back in 2019. We were gonna introduce new technologies in mature basins. This is part of the reason for the acquisition of Magseis, of course, who are market leading in the U.S. Gulf of Mexico and North Sea, which are clearly mature basins. Strengthening the position in South Atlantic. As a result of that, we went ahead and we acquired Spectrum, and we also acquired ION to strengthen our position there. As Will is gonna talk about today, we have an industry-leading position in an area that TGS was rather weak back in 2018. Further growth onshore, we put that on hold because we probably overestimated that comeback in that market. That's also important in terms of strategy.
Sometimes you need to realize that you were wrong. You put it on hold. Expand value chain through data and analytics. Jan is going to talk a little bit about that, I mean, that's really the engine to all the new initiatives in new energy solutions is built by leading data analytics resources that we have in-house. Imaging quality and reputation, we can clearly tick off that box too and I think the acquisition of ION is important in that regard. It definitely ticks off a box of strategic importance of that. The data offering towards other energy related industries, Jan will talk more about that, we clearly feel we're on the right track, we feel like nothing has changed. In 2019 or 2020 when everybody was going to run after their renewable opportunities, we kept a steady course.
Now when everybody's moving back again and running back to oil and gas, we still keep a steady course. This is an important part of our strategy, and we're gonna continue to invest in that business going forward. M&A has been key to fulfill these ambitions, and I'm really proud to present this slide. It shows 12 companies that are now part of TGS. It started actually with CGG, 2D, that was acquired by Spectrum back in 2011. Spectrum also acquired Fugro in tough competition with TGS in 2015, and then we acquired Spectrum in 2019. Then you see on the other line here, we started, TGS started, or entered into the onshore market in Canada in 2013 with the acquisition of Arcis, gave us an industry-leading position in Canada onshore.
We acquired the multi-client library of Polarcus in 2015. 2017 was a relatively tough year for our industry. TGS, as always, are being counter-cyclical, and we make acquisitions when other people suffer from poor financial results. We actually acquired multi-client libraries of SeaBird Exploration, MultiClient Geophysical, and Dolphin during the same year. Spectrum, as I said, in 2019. You see the two acquisitions that we made in our new energy business, 4C in 2021 and Prediktor in 2022. Finally ION in 2022. Magseis in 2023, early 2023 when that transaction closed. It's hard to say, I mean, there's always a mixed bag in terms of success when you buy a lot of companies.
I think I can clearly say that most of these companies have done really well. Most of these acquisitions have paid off really well. It's kind of hard to rank them. I think ION will probably go into the history books of the best acquisition we made. We started to really. We were short of time there. We really had to close that transaction because we saw the market were really picking up again. Within six months after we acquired ION, we got all the money back again. It's been a transaction that I almost feel embarrassed to talk about. On top of that, we also got a lot of technologies from the acquisition of ION. It's clearly been a very, very good transaction for TGS.
Moving on, I think we're well-positioned for a multi-year upturn. I think everybody talks about this multi-year upturn, and I think these four illustrations really do a good job in terms of providing some factfulness to that. Number one, you see the oil and gas production from current fields versus long-term demand forecast. You see the two demand forecasts by IEA. If you look at the step scenario, which basically say energy demand is gonna be quite similar to what it is today, which is probably a reasonable assumption, you see there's a lot of oil and gas still yet to be found. You look at E&P spending growth, I talked about that, 32% in 2022.
Coming out of a year with such a strong growth, it's quite amazing to see that the leading eight E&P companies in the world, they guide somewhere between 12% and 23% increase in investments also in 2023. I think that number is moving upwards every week rather than moving down. I think there is upside to that scenario as well. Why is that? Well, if you look at my third illustration, you see the client cash flow and the integrated all companies free cash flow in 2022, which is just record high. Some of these companies claim that we're gonna spend the money now to deleverage the balance sheet, and we're gonna pay higher dividend, and you name it.
At the end of the day, they still need to invest in growth, we've already starting to see the early signs of that, which is increasingly good for our business, of course. If you look at the last or the far right-hand side of the slide, you see the service market continues to tighten, this is what we see in seismic too. Basically, this is a result of Evercore's E&P spending outlook, where actually the majority, actually 92% of the respondents to this survey cited varying areas of concern with service availability. In fact, 68% of everybody who responded to this, which are basically all the oil and gas companies in the world, 68% say that service availability is the biggest concern in our business going forward in terms of meeting their production forecast.
I think you will see from one of my following slides that that is a concern that is valid also for seismic. This upcycle will be different. There is no question about that. It will be very different to the previous ones, the reason is, number one, the multi-client market has really changed. If you look at the multi-client market size, it was about $4 billion in 2012. It's dropped to about $1.7 billion in 2022. It's about somewhere between one-third and half of what it used to be. The number of companies have dropped from 11 to 4, one of the companies, TGS, has now a market share of about 36% of the last five years' investments in multi-client. In terms of multi-client share of total seismic market, that has also increased.
That's gone up from 48% to 57%. A smaller market, but coming back to growth, a significantly lower number of active companies, and number three, multi-client is still taking market share from proprietary. Let's have a look at the acquisition market. The number of active 3D streamer vessels have dropped from 58 to 15 during that same period. At the same time, the number of active vessel owners have dropped from eight to five, but as you all know, two of these five control about 80% of that market. There are more companies than that, and you will see in a few seconds when I show the slide of some of the strategic initiatives TGS had taken, that there are other companies as well. Again, the number of active vessel owners have dropped from eight to five.
Even more importantly is that ocean bottom seismic has taken significant market share from streamer seismic. When you look at the bar chart to the left there and the number of active streamer vessels, should we be concerned? Yeah, perhaps a little bit, but it's not critical because at the same time, ocean bottom seismic is growing much faster than streamer. Even if the market comes back to, let's say 70% of the capacity level that we had at the recent peak, we're probably gonna be okay with the number of vessels because you will see that OBN is taking market share from streamer. Last but not least, how has TGS done in this same period? Again, in 2012 we had a market share of about 23%. That's now 35%.
The total seismic market share, it used to be 9% in 2012, is up to about 24% in 2022. About one or about $0.25 per dollar spent in seismic would go to TGS. Then you see our revenues are relatively flat, and obviously that is gonna change, and that is gonna be the ambition of our management team to significantly grow the revenues going forward for TGS. We are well prepared, and I think this morning was a great time to announce a few strategic projects that again, shows that we're ahead of the game, we're planning ahead, and we're making sure that we're prepared for the upcycle.
Number one, we announced a strategic collaboration with SLB in the Gulf of Mexico, and this allows the partnership of the JV to leverage the joint libraries and imaging resources across the Gulf of Mexico. If you look at the map to the left there, you see the blue stuff there is OBN that we've already carried out, but all the orange stuff is still yet to be acquired in terms of seismic. For those of you who think that there is no more seismic to be acquired, that's definitely not the truth. It's a great strategic collaboration between two strong companies who are now gonna work together even more closely in the future. What do we do about the vessel supply? You saw that the number of vessels down from, you know, mid-50s to about 15.
Well, we signed an agreement with COSL this morning. It secures 2D, 3D, and source vessel capacity for multiple years. We're talking about now locking in capacity and rates for the next three-five years. That's at competitive rates and terms, meaning that we're not gonna see any significant change in rates over the next few years. Again, completed the acquisition of Magseis Fairfield in January 2023. That gives us a fantastic position in probably the fastest growing area of seismic, which is 4D ILX and OBN. Going forward, and we're gonna talk about this in the presentations after myself, but we're gonna continue to capitalize on M&As. We're gonna continue to capitalize on the organic investments that we made, so you will see strong cash flow from TGS going forward.
You will see an OBN margin improvement from synergies and operational excellence within our Magseis business, so we call it acquisition within TGS. You will see a diversification from further growth in energy transition related industries, and you will see seven clearly defined strategic priorities that we are gonna deliver on, and we're gonna come back to the market and present the status on each one of the seven. Delivering on that strategy will enable very strong cash flow generation in the future. This one is an illustrative free cash flow potential for TGS. The way it works is we look at the pro forma free cash flow for 2022. We assume in this conservative case that we have some incremental MC contribution, meaning that we invest more in the future than we invested in 2022.
If you assume that you're gonna make somewhere betweexn 1.7x and 2.3 x your investments, then you have incremental cash flow coming from those investments. You're gonna have incremental acquisition contributions, so we are gonna turn Magseis into a free cash flow positive business, and then you have some costs of course. That cost means that, you know, our free cash flow potentially in a conservative case should be slightly higher than what it is today. The operational leverage of our business is fantastic. If you look at this would be the high case or what we really would be targeting as a management team. What that shows is a significant incremental MC contribution from far higher investments. We're guiding today that we're gonna invest more than $350 million in 2023.
That compares to about $220 last year. Obviously when we start to reap the benefits of those investments, you will see a significant contribution on our MC free cash flow. We're obviously gonna turn Magseis into a positive free cash flow performer as well as part of TGS. That's gonna come from synergies. It's gonna come from obviously hard work on the operational side to streamline the business. That's gonna add additional cash flow, and then obviously you will see that there will be incremental taxes with higher revenues, and there will be inflation to the fixed cost base. What really strikes me with this slide is that it shows what kind of leverage we have in our business.
It's not a whole lot of change that needs to take place at the existing or pretty much the existing cost base to really start to produce a lot of cash flow going forward. Again, we deliberately don't show numbers on this, but you can kind of run that exercise yourself, and it's actually quite a simple business to calculate in that regard because these are really the key drivers to our business in terms of how we can produce cash flow going forward. We have a management team who's gonna deliver on this, and there are two new faces to the management team. In the upper right-hand corner you see Josef Heim, who's not here today, but he's the new EVP of Imaging.
We have Carel Hooijkaas that most of you probably know from before as the previous or former CEO of Magseis . Carel is now gonna be in charge of our acquisition business which includes OBN acquisition, but it also includes all the operations from the former TGS in terms of fitting under that business unit. You're gonna see most of these people present today, so again, a fantastic management team that I think is in the best position to deliver on strategic priorities that we set out today. With that, I'm gonna hand it over to Will Ashby, who's the Executive Vice President of Eastern Hemisphere, and I will come back for a summary session later this afternoon. Thank you.
Thank you, Kristian. I'm really quite excited to present the TGS position in emerging basins, and I'll tell you why first of all. Firstly, I mean, we really are well-positioned here. When we look, and I'll show you in a second, the actions we've taken to build our library covering emerging basins, we are positioned extremely well. Plus the team of people we have, the team working business development, sales, technology in these areas really positions TGS as the leading player. Secondly, we're at the start of a major multiyear upcycle, and emerging basins are gonna be fundamental for the global economy and fundamental for TGS as we look to benefit from that multiyear upcycle. What are emerging basins?
Emerging basins I will define as areas where our customers, oil and gas companies, are prioritizing CapEx to focus on what I'll call high-impact exploration drilling. We're not just talking infrastructure-led exploration here, we're talking play opening discoveries. Discoveries of a size where they can be developed on a standalone basis. That's what I'm gonna cover. Let me just kick off with two themes kind of driving exploration in emerging basins. First of all, energy security in Europe and Asia, and I think Scott Tinker in the first session kinda covered the big picture around this really well and we're quite consistent in our view. I'll just touch on the short-term view on energy security here. Situation in Europe, I think we know it pretty well.
If I summarize it, we have 155 bcm of Russian gas to replace in Europe. We were very concerned coming into this winter season. Europe's been saved by three things, I think. We've been saved, number one, by the climate. It hasn't been quite as cold this winter as people feared. We've been saved, number two, by, dare I say it, consuming more coal. Number three, by LNG, and I'll come back to the LNG in a second. Let's just jump to Asia. I think the energy security challenge, as Scott described, is very much a demand-driven challenge. We have a region emerging from COVID-19, and we see population growth, and we see economic development driving demand, a need for energy security. India is one great example.
As Scott said, India's gonna become the largest country in the world in just one month's time. It's gonna hit, what is it? 1.43 billion people. 85% of oil consumed by India is imported. 50% of gas consumed in India is imported. It's a major challenge here. The chart on the left is showing LNG or changes to LNG flows during 2022. You see this big increase in LNG in Europe. Yeah. LNG, which in the end was the big savior for Europe this year. 45 mt coming into Europe. Where's that coming from? 16 million tons was new LNG coming into the global supply system, most of that coming from the U.S..
Look at how much LNG has been kind of sucked out of Latin America, Asia and China. It's quite significant. The big concern here then is next winter. What's gonna happen if we have a more severe winter, if it's a colder winter? What about China? Zero COVID policies just ended. What's gonna happen if China starts taking more LNG from the spot market again? It's a big concern here. For us and our industry, what does that mean? It means exploration. Now we're seeing, you know, a large number of oil and gas companies exploring, trying to find areas where they can find more gas to feed into the global LNG system. Also we see more exploration in local markets looking to pipe gas to local markets.
For example, in Europe we see increased interest in the Atlantic margins of the Norwegian Sea. We're now seeing growing interest again in the Barents Sea. All across North Africa, Mediterranean, and through into Asia, significant interest to go out there and explore gas to meet that global LNG need and the local gas needs. That's kind of the first theme driving exploration in emerging markets. The second theme I call finding the next Guyana. Guyana has proven that those big elephant-sized discoveries, you know, are still there to be made. Yeah. The, the chart on the right I think is an interesting one. I mean, the first thing that stands out to me, this is showing recoverable resources discovered going back to 2013.
First thing you can see is there's been a lack of exploration, yeah, for quite some years. Second thing that jumps out to me here is, well, look at 2022. Actually it's not bad, 2022 discoveries. It's back on a par with 2019. Interestingly, that's been achieved with half the number of wells that was drilled in 2019. Yeah, just 50% of the wells in 2022 versus 2019. How does that figure out then? Well, it's because in 2022 we saw a much higher proportion of these high-impact wells being drilled, okay? That's a theme that's gonna continue. In 2022 we had 28 high-impact wells drilled across the globe. That number's gonna go up to 32 this year. A similar theme in terms of licensing rounds and acreage capture.
In 2022, in Latin America and Asia, you saw more than twice as much acreage awarded to oil and gas companies. Looking ahead, in 2023, certainly there's more license round activities than I've seen in my career at TGS, scheduled for this year, particularly in Africa. It's a lot of activity. I'll just add the urgency point here. Some of the European super majors have kind of constrained themselves a little bit in terms of their publicly announced targets. You know, if you have no new country entry from 2025, you need to act now with some urgency. Actually we see that with almost all of our oil and gas clients. There's a real prioritization to getting through fast the screening acreage, exploring, appraising, developing, get to first production as quickly as possible.
Let's see how TGS is positioned in emerging basins. I wanted to go back 10 years ago and show you how did the TGS data library look 10 years ago. On the map here, you can see yellow reflects our 2D seismic library, and orange reflects our 3D seismic library. We have the number of kilometers of 2D and square kilometers of 3D shown in the bar chart on the bottom left. That's a reasonable global position, but we're dominated from a revenue perspective. We're dominated, U.S. Gulf of Mexico and Europe. That's where most of the money was coming from in 2013. A number of things have happened then over the last 10 years to grow our library.
As I animate here, keep your eyes on the bar chart on the left. First of all, we've acquired a bunch of libraries. Here I'm showing the libraries acquired from Polarcus, from Dolphin, from MCG, and from SeaBird. It further strengthens our library in Europe, but it's a little hard to see because of the scale. We've got a number of additional 3D data library 3D surveys in Northwest Africa. Cast your eyes to Australia on the map, you'll see a number of 3D surveys in Australia, which is a key LNG producing region. What's kind of fun here is one of those surveys was called Capreolus 3D.
Just a couple of months after acquiring the Capreolus 3D survey from Polarcus, they announced what was, I think, the biggest oil discovery in Australia for the last 20 years, right underneath that survey. Right now we have a boat that's working for us in Australia that's now performing the extension to that survey, Capreolus Phase 2. We've been acquiring that since early January, and that will complete in the next couple of weeks. Now I'll show you the Spectrum acquisition. Again, keep your eyes on the bar chart on the left and you're gonna see a big jump up here. Okay? Now all of the yellow and the orange shows the new library acquired from Spectrum and the existing library shown in the sort of the lighter gray color.
I'm gonna go back and just show you that again, so you can see the jump up in our library with Spectrum. It is significant. This was just after we've announced our strategy to grow our library in the South Atlantic. Now you see bringing that Spectrum library into TGS. You've got huge volumes of data all across the coast of Brazil, all the way down through into Argentina, and then move your eyes over to Africa. Significant volumes of data, but I'll highlight especially you've got all of that data sitting over Namibia. You can imagine having the premier library in Namibia has been particularly useful for TGS over the last 12 months. It's fantastic. Now I'll animate again. Now I'm gonna add on the ION and the Magseis Fairfield libraries.
Now we gain access to all of the ION 2D span data, again, covering both sides of the Atlantic margin. In addition, we get a number of really important 3D datasets. You see 3D data in Brazil, the Picanha surveys. You see 3D data in Northwest Africa and Mauritania. I'll also highlight 3D data in emerging play in the North Sea, mid North Sea High. Again, it's kind of a trend here. This is a 3D survey where just a couple of months after acquiring that survey from ION, we had the big discovery from Shell in the North Sea. Really good timing again for TGS. Now it's not just about acquiring companies and acquiring libraries.
I'll now show you what has TGS done from an organic perspective, our own organic multi-client investments over the last 10 years. Here you see, again, focusing on the emerging basins, you see significant data acquisition all across East Coast Canada, a key emerging basin for us. You see further acquisition all down multiple basins in Brazil through into Argentina. Through into Africa, you see 2D and 3D seismic acquisition and reprocessing all around Northwest Africa. Move your eyes over into Asia. Just a couple of years ago, we had almost no data outside of Australia in the Asia Pacific region. Now we have a significant footprint covering East Coast India, Bangladesh, Indonesia, Malaysia. TGS is really well positioned in all of these key emerging basins that I mentioned.
Now I bring all that data together. Now we have the complete library shown in yellow and orange, and you can see it's just a phenomenal footprint we have covering all of these key emerging basins on both sides of the Atlantic and going into Asia. I wanted to show one, just one bar chart here on the bottom left of the screen. Back in the 2019 Capital Markets Day, TGS showed a very similar bar chart looking at Africa and Latin America combined, and showing our revenues from 2014 to 2018. Then we announced the strategy to grow our library in the South Atlantic. Boy have we delivered on the strategy. You can see a significant step up in our revenues.
Obviously, there's a drop down during COVID. Now we're back up to high revenues in 2022. This is clearly a revenue trend I expect to continue. That's all I'm gonna cover on emerging basins. I will say, of course, in our business, you have to have the portfolio. Mature basins are just as important as emerging basins. With that, I'm gonna pass to my colleague, David Hajovsky, who's gonna cover mature basins. Thank you, David.
Good afternoon, everyone. I'm gonna hear and talk to you about what TGS's strategy is to maintain our market position in mature basins. I guess I would ask you to take your imagination a little bit, and if you're an emerging basin, you'd ask yourself, "What do you wanna be when you grow up?" The answer is a mature basin. Why? Because that represents success. That means you've had exploration discoveries, you've been able to build in the infrastructure, and maintain a consistent level of production for a number of years. Mature basins are a very important part of the oil and gas ecosystem, as they account for greater than 70% of the global production on a daily basis. Mature basins also allow us then to move into the world of ILX and advantaged oil.
When you have the infrastructure in place, those incremental reserves allow it to be economic to find and develop that. Mature basins also, from a carbon emission standpoint, are some of the lowest producers in the world. If we look at the Gulf of Mexico and the North Sea, they are some of the lowest per barrel on the carbon emissions basis. Very good value add. Mature basins also can be very important for adding new resource to the pool. As the old adage goes, it's easier to find oil where you've already found oil. Let me start with a chart here, which talks about one of the most important aspects for successfully producing out of a mature basin, and that's technology and the application of technology. Seismic plays a very critical role in that sense.
If you look here at this chart, this is looking at a 50-year horizon in the U.S. Gulf of Mexico, and along the way, you see the different seismic acquisition and processing technologies that have been deployed to find each of those play-opening pieces that you see there. Each color represents a new play that's been found and being produced. TGS has always been on the leading edge of that, starting with 2D seismic, moving on to 3D seismic, moving into the realm of different sort of imaging algorithms to be able to resolve some of those challenges. Being able to resolve those challenges are very important for our clients because it allows them to then look at the world in new ways.
That's what we bring in this curve here, and if you look at the very top right-hand corner, you see that we have sparse node acquisition, so OBN, and that's the next technology wave that's being required here in these mature basins to allow our clients to successfully de-risk the work effort they're trying to do. What is TGS doing about that? If you look here, we've got two maps. On the top, we have the U.S. Gulf of Mexico, and below that, you have the North Sea. Two highly profitable mature basins that TGS have been operating in for a number of years. The orange data you see on those maps represents our legacy investments. That's the 3D investments that we've made over the years and have helped our clients to find and de-risk their production.
The blue polygons represent the next generation of seismic. This is the OBN that we've been building out over the course of time. Right now in our combined library, once you get through the end of this acquisition season, we're gonna have over 23,000 sq km of OBN data. In the Gulf of Mexico, right now what we represent here is 16,000 sq km . That includes our data that's on the shelf, also our newest acquisitions which have been announced, which are Amendment II and Engagement III. In the North Sea, we'll have almost 7,000 sq km by the end of this season with the additions of Heimdall Terrace and Sleipner, which have been previously announced. There's future growth to be had there.
One of the things that really positions TGS well going forward in this sense is the fact that we now can offer the integrated solution, because now with the Magseis acquisition and the Ion acquisition, we're able to capture the right data from the field and to be able to process and deliver that to our client base, where they can make actionable decisions on that data. It's a critical piece in order to deliver on this strategy of growth. On that note, Kristian had mentioned the announcement of the SLB collaboration, and we're super excited about this because what this represents now is that TGS and SLB are gonna jointly work together across the entire Gulf of Mexico to build out the next generation of multi-client seismic.
There is a clear need and drive here from the client base, and we think that being able to leverage one another's data libraries, our technologies, our know-how, is gonna help accelerate getting this data to market. As we've seen, we need to be able to deliver on this next-gen of seismic in order to effectively produce these fields. We'll touch more on this later on through the year. One thing I would say is TGS and SLB have a very long history of working together around the world, and we've been working successfully together in the Gulf of Mexico, and this is just the next evolution in that step there. We're very excited about what this is gonna represent to TGS and to industry.
To finish up, wanted to talk about the other end of the spectrum, which is the data processing side and the delivery of that final image. With Magseis, we can acquire the data in the field, the OBN data that's required for these mature basins, but we need to be able to process it and deliver it efficiently. At TGS, we believe that we have the right toolkit in order to do that. You have to have the right algorithm. We have our Dynamic Matching FWI. What this algorithm allows is to build very robust velocity models and create really robust images. Why that matters, if you look at the screen here, the colored image you see is a velocity model from the U.S. Gulf of Mexico, very complex, geologic regime.
Beneath that is actually a seismic image we created directly from the velocity model. Really what that means is we're accelerating the time of delivery. So in not in a matter of months, but in a matter of weeks, we're able to deliver the right sort of data that our clients need in order to make actionable decisions. Having the right algorithm is not enough. You need to have the right software platform in which to do the work, and for which the algorithm would work, and then to be able to deliver the data. This is where the benefit of the ION acquisition is so critical for TGS, because now we have the Imaging Anywhere software platform.
That platform was the backbone, as Will showed there, the backbone for the Brazil Picanha 3D, Mauritania 3D, Campeche 3D, very highly successful campaigns. It's fast, it's efficient, it's robust, it's intuitive, and when you combine the algorithm with the platform, you're able to turn around that data and get that to the client base in a way that they can make the decisions. In summary, TGS is well positioned as we move forward in this space in mature basins in order to grow our market position through our integrated solutions approach. With that, I'll hand it over to my colleague, Carel Hooijkaas, who will talk to you about TGS acquisition, our newest business line, and our technology portfolio. Thank you.
Good morning and good afternoon. My name is Carel Hooijkaas, Executive Vice President for Acquisition. Today I will cover both acquisition and technology. I wanna take you back a couple of months when we started to look at how we should integrate Magseis Fairfield businesses into TGS. We had four established businesses in Magseis Fairfield: OBN data acquisition, multi-client, reservoir monitoring and source, and a renewables business. As we started to look at how this could match with TGS, there were some obvious steps that we needed to make. Clearly the TGS business could move straight into TGS multi-client, and the renewables business could go into the renewables business, the new energies business in TGS. That's exactly what we've done. But we've done more than that.
We've created an acquisition business unit that becomes the center of excellence for acquisition in TGS that covers now reservoir monitoring and source, OBN data acquisition, and multi-client acquisition. Again, the multi-client acquisition is both tow streamer and OBN. Who are we now? TGS is clearly the recognized global leader in OBN acquisition. We have four node crews and three reservoir monitoring and source crews. We work in all water depths, and like Kristian mentioned, we've performed over 100 surveys worldwide. What does that mean? Well, it's 50% more than everybody else combined, so clearly we are a dominant player in this space. Why is it so important what we are doing? Our customers want to make data-driven field development decisions, which means fewer wells, but well informed.
Based on the data we've acquired, they drill fewer wells that hit the target. That's the value proposition, and that's what we do every day. Like Kristian mentioned, the seismic market continues to look into the positive direction. We saw an overall market growth of 30% in 2022, and when you look at the graph on the bottom left, you see a very good correlation between floaters and seismic market. The floater market continues to strengthen, and therefore our prediction is also that the seismic market will continue to strengthen going forward. Again, also like Kristian mentioned, the percentage of overall spend in OBN continues to increase over time, as you see in the bottom right-hand graph. We're right in the right space to deliver services to our customers.
Talking about our customers, let's look at the market opportunity. Let's look how our customers have adopted OBN over time. Here you see the number of cumulative surveys acquired by our customers since the inception of OBN. It clearly shows that a high number of customers have started to try this out. The minute they try it once, they're hooked, and they wanna do more, and it becomes the norm of what they do, and it becomes a repeat business for us. Without naming names, let's talk about the customers. The first one was right at the inception of OBN and is now acquiring at least three surveys every year, repeat business and going into new fields.
The number two customer was also at the start of the application of OBN, as you see on the slope, they are actually now on an average of four surveys per year. Third customer started in 2015 and is now doing two surveys every year very consistently. Last but by no means least, the fourth customer example here is a customer who started in 2022 with OBN for the first time, but they have every possibility of becoming our largest OBN customer going forward. Again, once people start using it becomes the norm, and it becomes a repeat business for us. We love it when our customers speak publicly about the use of OBN and the value it brings to them.
This was most recently, BP who quoted that OBN is now being deployed widely across our portfolio and giving a better view of barrels that remain. Again, data-driven field development decisions. They use our data to understand the barrels, where they are, and how to extract them. That's the value proposition we bring. As our customers start to adopt, you see all the lines going up. What does that mean geographically? Again, Kristian alluded to this. The business very much started in the Gulf of Mexico and North Sea. If you look on the pictures on the left from 2005 to 2015, it was indeed very focused on U.S. Gulf of Mexico and the North Sea. In fact, 2/3 of the global business was in those geographical areas.
When you now look at 2016 to 2022, OBN has gone global. In fact, 2/3 of the business is from outside of the Gulf of Mexico and North Sea. Again, global adoption by our customers of OBN, and that's fantastic news for us. The next question you may ask, "Okay, with all these increasing trends and OBN going global, who is doing all these surveys then for our customers?" Well, we are. TGS is by far acquiring the highest number of project for our customers globally. That's very clearly described here. Again, once you do these surveys, you tend to hook a customer to your services, and it locks your business in going forward. How do we align our node inventory with the demands from our customers? That's described here on this slide.
I focus your attention on the right-hand side first on the pie charts. There you see the global node inventory by water depth, so deep water, mid-water, and shallow water. You can clearly see we have focused our attention on the deep water and mid-water, and for all the right reasons, because then I draw your attention to the graph on the left, where you can see the number of surveys acquired in these different environments. Clearly, by far, the majority is in the deep water and mid-water. That's precisely where we are, that's precisely where we have our nodes, and that's where we continue to have our focus. What you also see for 2023, you see the year-to-date numbers, but also the leads going forward.
When you put those on top of each other, you can see that it will be almost impossible to achieve all of that. In fact, our forecast is that we won't be able to achieve all of that. There will be a shortage of nodes in the market, and some of our customers will have to shift their surveys to next year because simply the capacity won't be there. Kristian also alluded to the fact that we need to improve margins and free cash flow generation in the OBN business. We're gonna do that in three buckets. One is around integration synergies. We've already reduced the overhead costs significantly, and we are lowering also the financing costs, so that's number one.
Clearly being part of TGS, we're at an entirely different scale, with a different purchasing power and a flexibility to move in the market that we previously didn't have. Last but not least, when you have customers that are screaming for our nodes and there's a shortage of nodes in the market, we obviously need to move on price, and we'll do that in the third-party market. At the same time, we'll also leverage our internal needs with regards to the multi-client surveys we want to do ourselves. Again, looking at the picture on the right, you see an historic overview of where we've operated, so global positioning. In red, you see where we currently have our crews. Clearly we have an unparalleled experience with regards to OBN acquisition.
We have high capacity in the key markets and the key water depths where the market is and where our customers need our services. We now have the scale to move, and we have the ability to move on price. Last but not least, we can, being part of TGS, much better procure our third-party services than what we've been able to do in the past. All in all, we are well-positioned as OBN in TGS to make significant progress in the coming quarters and years. With that, I wanted to move over to technology, and David already alluded to technology. We're such a different company now when it comes to technology.
We have so many key technologies within TGS now, and I think it's worth spending a little bit of time on the importance of technology and how it again allows our customers to make data-driven field development decisions. To do that, I want to go back to an old example, and you see the data. The image quality is even bad, and the data quality is bad too. But I think it makes the point. This was in fact from data from Shell that Shell has published. And what this shows is a picture on the left is towed streamer acquisition in the Gulf of Mexico. Based on that towed streamer acquisition, they drilled a well in 2004, and it was a dry well. Big disappointment. Couldn't find the reserves.
They were quite convinced that there was something there, but simply couldn't find it. Shell was one of the companies that invested first in OBN and wanted to apply this new technology in one of their key basins. They in fact acquired a survey in 2007, processed it, and then in 2009, drilled in that same area, but now using OBN data. This time they found the reserves that they were looking for. A tremendous value proposition there, and Shell has never looked back and continues to use OBN widely to make their data-driven field development decisions. How is TGS positioned in this space? Again, it ties so well with what David was presenting.
As an example here, Gulf of Mexico, we have a fantastic underlying data set with the investments we've made in multi-client data. We now have our own OBN acquisition, and we have our own processing capabilities. With that, we can make the improvements in the imaging that you see at the bottom there. We can finally show the complexities in the subsurface that are truly there and that our customers can drill on and be successful on. The story doesn't end there, because through the acquisition of ION, we've now also added a Gemini low-frequency source. For some of you may know that low frequencies, people are in love with low frequencies. Having the capabilities of a low-frequency source is fantastic addition to our overall technology portfolio.
On top of that, we have multidimensional input/output, which is basically the ability to stream data efficiently to our customers' work desk, workstation, so that they can again, work with the data much more efficiently and much quicker than what they've been able to do in the past. All of this is powered by the TGS data and analytics capabilities. The TGS from 18 months ago or 12 months ago is so different now with all these capabilities where we can really put a differentiated solution in front of our customers. It allows them to make the field development decisions that they need to make. With that, I've hope I convinced you that TGS is uniquely positioned to offer unique solutions for data-driven customer decisions.
We do that through technology, the integration of the technology we now have in-house. Last but not least, we will capitalize on the OBN position we have to generate OBN returns. With that, I'll hand over to my fellow Dutchman, Jan Schoolmeesters.
Thank you, Carel. I'm very pleased to stand here two years after we first announced the formation of the New Energy Solutions business unit at the Capital Markets Day that we launched it and report on the progress as well as the plans going forward. I'll dive straight in. What is New Energy Solutions? I show you here the five segments that we're focusing on. Three are renewables, the offshore wind, solar, and geothermal, but also the carbon capture, and particularly sequestration is important, plus deep sea minerals. If we focus first on the renewables, I've taken the graphs from the IEA to guide us on sort of the expected growth in these segments. You can see on renewables, it's a, it's a healthy growth.
In fact, the IEA concluded that it's gonna be a capacity build-out in the next five years that equals that of the past 20 years, so a very healthy build-out. I've also included the compound annual growth rates here in the figures. 25% for wind, let's start there. We make a caveat there because we put 16%. That's the conclusion of our 4C Offshore market intelligence unit. They've done a full analysis very recently, studying the full supply chain, delayed projects, seeing the progress of lease rounds, et cetera. There's a more conservative picture there. That's one that we feel more comfortable with. We have developed several products and tools, and I'll go through that in a later slide.
All in all, the dots in the bottom here, show the progress and positioning that we feel we have achieved to capture that growth and to deliver relevant solutions to our clients. If we move over to solar, we have 19% compound annual growth rate. That one we're very comfortable with. In fact, solar has outperformed year on year on the expectations, so we believe that's very achievable. We needed to make an entry into solar, and that we have done through an acquisition of, Prediktor that offers software as a solution, asset management solutions, for solar products. We have a good starting point there in solar, but we're not done. We want to grow further in that domain.
Geothermal, a bit more modest growth, 7%, it's not really broken through. It's a gradual increase, we're well-positioned to take that growth with our data library. It's very relevant, particularly our well data, our seismic data, and we have high-resolution basin temperature maps. As this picks up, we will pick up the pace too. CCS, big growth, 21% expected, that's coming from relatively humble beginnings, but certainly picking up the pace now in terms of growing. Again, we have a rich toolbox, certainly with the acquisition also of Magseis that we have a lot of acquisition solutions. We have our data library, of course, and we have developed analytic solutions. We feel well-positioned there as well. Lastly, deep sea minerals. We show a very modest compound annual growth rate.
That can quickly change if there's more clarity on legislation and how to go forward. In the meantime, we are partners in the ATLAB consortium, where we test different types of acquisition technologies, and we're ready to go if this really picks up, and we can come to sustainable implementations. What do we as TGS then? We have heard that we have a certain core competence, and it's very much concentrated around data. Past 40 years, we've been gathering data, we've been organizing data, we've been making sure that it is easily accessible, and that has become a big theme for our clients. Easy access to data, being able to ingest it into software, get insights, make decisions.
We have built data lakes of the size of many, many petabytes, and with different types of data in there too, with our own unique format. That works extremely well. We get a lot of interest now to expand that further, and where we see that expansion really happening, will be the renewables domain. We feel that we are well-positioned to combine data, combine software and application program interfaces, APIs, to make it communicate with client software. Approaching and collecting and organizing data that way, having software development on the back of it's all powered by our data and analytics team, and that we bring to market towards the energy producers and the supply chain initially. As the vision goes, it needs to be big, and we do believe we can grow it further towards distribution and consumers.
To make that more concrete, let me go over an example of the wind ecosystem that we've developed so far. It started with the acquisition of a company called 4C Offshore, specialized and the leading market offshore intelligence company. With that acquisition, we immediately got access to over 400 relevant clients. In discussion with them, understanding their needs, we realized what we needed to do next, and we started developing what we call Wind AXIOM, a wind analytics platform. We collect a lot of different data on that platform, and it gives you an opportunity to look at an area, compare different lease areas, calculate the energy yield, get an indication of what are the favorable areas.
Once we have seen the client interest and we've taken it around for project development, we also then deploy our own measurements to high-grade the wind models that we have on that Wind AXIOM. We do that with buoys that we deploy, and we've deployed the first one last year in the New York Bight. We just announced today that we're gonna deploy four more in the U.S. East Coast, and we're working up other areas at the same time. That data then is collected over a year's time, and it is bankable data, meaning it can be used to validate your product, project financing. That is then giving rise to the next stage, and that is, NASH Renewables is a company that we're working with, and they do wind park design.
It's, we provided seed funding to the startup company in Germany, and they've grown quickly, and they've come up with unique approach to wind park design, whereby they focus on the output, meaning you don't focus on the LCOE at the lowest cost, you don't focus on maximum production all the time, but you tune it with the market pricing that you see out there. That can mean that you produce in low wind periods more so than you do in high wind periods. It's really time to start looking at the subsurface. Where do we put these turbines? Then we work together with SAND Geophysics and the Norwegian Geotechnical Institute to do desktop studies to get an impression of the areas to start doing your survey design.
We have a collaboration agreement with Fugro, where we provide 3D, ultra-high-resolution seismic solutions. They provide their geotechnical data expertise, and we work together then for clients. That's the collaboration agreement. This is all possible thanks to the acquisition unit that we now have with some unique technologies, with Carel mentioned, people love low frequencies, but they also love high frequencies, particularly in the wind domain. Because there you get a real good image of the shallow subsurface and what potential issues there are. So this was all pre-construction. The last element that we show here is Prediktor, and that is post-construction of a wind park, whereby you then need to capture all that data that these turbines produce. All these different sensors are being collected by the company Prediktor.
They have the solutions for this to do that all real time and to pass it and to organize it and to pass it on to software. Prediktor is a company that we acquired in July last year. We did it because we saw that they have been deployed over 1,000 installations, amongst others, for instance, [audio distortion], so meaning you have to be really reliable, security is really important, and they've taken this now to other markets in the past years. One of those elements is also then the asset management. I talked about data management, capturing the data, what do you do with it? They have the PowerView platform, which ingests all that data, for instance, from solar parks, and where you can have the full then control.
You can see the monitoring of the performance anomalies. You have the reports, you can do the analytics, and basically steer your asset to make sure it produces optimum. They've done it now for over 9 GW of renewable assets. It's now run on this PowerView platform. The Benban Solar Park was the largest solar park when built. 1.8 GW. The Dogger Bank wind park still being built. Hydropower in Norway, 1 GW, and very exciting now, the development of hybrid setups, solar and batteries. They're at the forefront of doing all these data gatherings, data capture, and then making sure you can make sense of it.
Going back into the subsurface, more the legacy skill sets that we have in the company are very relevant then for carbon sequestration. What we're showing here is that is really, yeah, we have all the right tools here to position for the screening element. Where do we find those right reservoirs? We can use our well data products. We can use seismic data, imaging, and we use that as input to a screening tool that we call Carbon AXIOM. Our clients highlight certain areas that they're interested in. We add that to this mix. This is an ecosystem that we're building up on the carbon sequestration. We're also part of the Greensand platform, the consortium, I should say.
That is sponsored by the Danish government, where they really focus on the full project life cycle of having carbon sequestration. It's already now gone through all the initial stages, tomorrow will be the first injection of carbon in Denmark, we will be present and celebrate that next phase of the project. In the later phases, we also have all the opportunities for monitoring surveys with the acquisition technologies that we have. We have a collaboration with Halliburton where we can provide fiber optic monitoring with the processing capabilities that we have. All in all, really well positioned here as well for CCS.
In summary, we have gone about in those two years to really make acquisitions to get going, get access to a large client base that are relevant. We have also acquired Prediktor, which gave a new dimension of data, a real-time stream data that you need to ingest into your software. Combine that with our strong data and analytics team, gives really good results now to start expanding our future products from this. Mentioned the bankable wind measurements, the multi-client. We brought the multi-client model into the wind domain, and that makes sure that our clients get our products earlier, that they get it cheaper, and it's a win-win for everyone. We're really keen to continue expanding that and seeing more opportunities to add products to this.
Now we're partnering with leading players like Fugro, for instance, in the domain. All in all, this gives us the confidence to make the statement that we can follow that segment growth with what we have and that we can do that profitably as well. With this sustainable approach, I also want to then lead into the ESG commitment that the company has, and Whitney Eaton will tell you all about that. Thank you.
Thank you, good afternoon. I'm sorry they don't make these microphones for people with dresses. I have to put mine up here on the podium. I apologize. Thank you, welcome for joining us this afternoon and this morning. I am responsible for leading TGS's ESG strategy within our organization. We are very proud of our ESG strategy. The foundation of our strategy really is understanding our commitment and our obligation to our customers, our shareholders, our communities, and our employees of our responsibility to conduct our operations in a responsible and sustainable manner. Energy demand is increasing. Whether this is solar, this is wind, or this is oil and gas exploration, we understand that energy demand will be increasing. The world and our customers have set high standards for ESG performance and have great expectations.
TGS, through our ESG strategy, has the ability to give our customers a competitive advantage by ensuring that we conduct our operations sustainably. Whether this is upholding the highest standards when it comes to corporate governance, implementing and ensuring that our operations are conducted in a safe and responsible manner, addressing and preventing our environmental impact, investing and developing in what I truly believe is one of the best workforces in our industry. We're very proud of what we do. How do we get there? How do we keep going forward? We can keep going forward by addressing our environmental practices in our operations. We start well before we even touch the water or go into the land with making sure that we understand the environmental impacts and ways to, strategies to address that.
This begins with environmental impact assessments, community outreach with fishing communities, local governments, NGOs, or other organizations, deploying marine mammal observers on our vessels, as well as having other measures to ensure that we are addressing and ensuring that our operations mitigate any environmental impact they may have. We don't just feel that we can address our own environmental impact. One of the things we also do with our operations, which we believe is a true value add to not just our industry, but society, is we are an active advocate of the EnerGeo's Ghost Nets Initiative. For those who aren't familiar, this is essentially a worldwide marine ocean pollution pickup initiative that we take part on.
We encourage and require each and every one of our projects to pick up and properly discard any pollution, fishing debris, fishing gear, marine debris and the like that they cover during our operations. As you can see, last year we actually removed 5.5 metric tons from the ocean through our operations. This is something we continue to require through our vessel providers going forward and something that we believe is actually a value add our industry gives back to the marine community. In addition, we address our climate impact, and we do so in a way that we think is both effective and productive going forward. We like to find long-term creative solutions to ensuring that we address our climate impact. We have recently had a 21% decrease in our scope one and scope two emissions since 2020.
This is in part due to ensuring that we deploy energy-efficient compute in our high-power compute and data centers. It's also by doing things like installing, as you can see in the picture here, solar panels in our Houston headquarters. Our largest office to date has solar panels in the parking lot, and that building is now 100% renewable. In addition, that building provides energy security through those solar panels to the Texas power grid. Any energy we generate in excess of what we use, we actually give back and contribute back to the Texas power grid. These are examples of ways that when we develop our ESG strategy, we're looking to make not just a meaningful impact, but drive long future change within our industry and our organization. We also believe our employees are our greatest asset.
We are committed to respecting the human rights around the world and providing a safe, healthy, and inclusive working environment. Diversity is extremely important. Through diversity, we believe we bring innovation and success within our organization, we work to have an inclusive working environment by ensuring our employees understand the importance of diversity. We actively recruit from diverse work pools, and we also continue to work and understand our workforce as it evolves over time. We also believe health and safety is paramount to our operations. We, with the acquisition of Magseis, this becomes even more important going forward. We believe safe and healthy operations are critical to not only our success, but the success of our customers. In addition, we believe in investing into our workforce.
We believe that we create the best employees to lead our company going forward, that is shown both through the average tenure of a TGS employee, but the fact that our leadership, whether it's Director, Vice President, Executive, Senior Vice President, all come or are recruited from internally or within the organization. Where do we see ourselves going forward? Where do we see the future of TGS's ESG strategy? We remain committed to ensuring that we will apply the highest corporate governance standards in our operations. We also set KPIs that we think are practical and effective as part of our strategy going forward, we tie these KPIs not just to our remuneration, but the remuneration of our employees.
Our ESG strategy sits not just with me, but it sits with the whole organization to ensure that we deliver upon our goals. We continue to put a premium on health and safety and ensuring that our operations are conducted with best-in-class safety practices, and we demand the same from our partners and suppliers. Each and every one of our operations has, whether it is done by TGS or it's managed through our vessel providers, follows the same health and safety practices going forward. Finally, we continue to invest in our workforce. Invest in developing our workforce and promoting an inclusive and diverse workforce we think is critical not only to our success, but the success of the industry. It is important that we increase the proportion of underrepresented groups, whether it's women, it's by race, it's by other diversity characteristics within our organization.
TGS understands that our commitment under ESG is not just to ourselves, but it's to our communities, it's to our customers, it's to our shareholders, and it has to be part of us having a successful business going forward. With that, I will turn it over to our CFO, who will talk about our financial strategy.
Thank you for that, Whitney. I will cover the topic of financial strategy and also talk a little bit about capital allocation, and I will round off my presentation by talking about the financial reporting going forward and how we plan to do it now that we have integrated Magseis. First, we focus a lot on return on capital employed and free cash flow in TGS simply because these factors are highly correlated with total shareholder return. If we do well on these measures over time, we will also create a lot of value for our shareholders. Therefore, we keep these measures on the back of our mind in every investment decision and every important business decision that we make. As most of you will know, we have performed pretty well on these measures over time.
We normally rank pretty high up among the peer group within the energy services space, 2022 was no exception. As you can see, in terms of return on capital employed, we had 13% last year, which is actually in the lower end of what we have delivered historically. We see further upside to that. With that 13%, we were still in the upper quartile of this defined peer group. On free cash flow conversion rate, which is simply free cash flow divided by net operating revenue, we are on the very top of the list, which we are very proud of, and we keep a very strong focus on cash collection, working capital management and capital efficiency in everything we do every single day of the year.
We have noticed that our solid balance sheet is becoming increasingly important in the energy services space, simply driven by the fact that traditional debt funding sources are now less available and more expensive for our industry. As you can see from the chart on the top right-hand side there, you can see that the net debt level in the Philadelphia Oil Service Index in the U.S., which is basically an index consisting of the leading energy services companies in the U.S., has decreased quite significantly since 2018. As you know, TGS has always carried or made sure that we have a very strong balance sheet, and we have always been in a net cash position, as illustrated by the chart on the bottom there.
The reason why it's very important for TGS to maintain a solid balance sheet is that it allows us to do countercyclical organic investments during down cycles when vessel rates typically are low, and it enables us to have fresh data on the shelf when the upturns eventually kick in. Secondly, it also allows for inorganic investments at very attractive points in the cycle. We have, as Kristian has alluded to already in his presentation, we have been able to do a number of M&A transactions when others have not had capital to spend, and that has paid off big time. Kristian mentioned also ION as the latest example of that, the transaction that we did last year.
Last and not least, it helps us managing the strong cyclicality in our business. We have a very high operational leverage in our industry, and we don't want to add a lot of financial leverage on top of that. When we are on the topic of the balance sheet, I'm also happy to announce today that we have entered into a new revolving credit facility with Danske Bank and DNB of $125 million and we're using this facility to provide financial flexibility going forward and also to repay the $45 million debt facility that we inherited from Magseis. You'll find more details about this debt facility in the appendix to this presentation.
On the topic of capital allocation, we are clear that organic investments remain priority number one. We have, over the years, been able to deploy our capital organically at very attractive rates for our shareholders, and as long as we think that we can continue to do that, we will continue to put organic investments on the top of our priority list. As I discussed already, we also will prioritize maintaining a strong balance sheet for the reasons that I went through on the previous slide. Fortunately, our business model, which has a strong correlation between cash inflow and cash outflow, will enable us to both invest organically, maintain a strong balance sheet and pay a healthy dividend.
As you can see from the chart on the top right-hand sorry, top left-hand corner, TGS has been able to maintain a robust dividend even during down cycles when other companies in our industries have been forced to cut dividends to zero. I'm going to talk a little bit about our financial reporting going forward. First, about revenues. First of all, I just want to say we are obviously going to continue to report IFRS as kind of the main set or the main numbers that we report in our quarterly reports where we are going to provide POC APMs, alternative performance measures, as supplemental information. However, in the presentation material that we also release every quarter, focus will be on POC numbers.
For those of you that are not familiar with the term, POC means percentage of completion of the projects that we are doing. We are going to report POC revenues by type. So we will report early sales, which is simply a function of the multi-client investment times the early sales rate that we have on the individual projects that we invest in that particular quarter or in that particular period. Late sales is basically the same as in IFRS. It's the sales that we generate from our library of completed data or our vintage data and that revenue is obviously recognized at the time of the delivery of that data to the customers.
We have the proprietary revenue line, which is basically the sales that we do of services directly to customers. This will typically be related obviously to imaging as before, but now including Magseis, that revenue line will grow significantly as you can see from the illustration on the right-hand side there. We are also going to report POC revenues by business unit. We're going to give you the revenues in the multi-client business unit, and here we lump in also imaging although that is not multi-client but proprietary, but it's rather small. Anyway, we're going to report Digital Energy Solutions, Jan's business unit, separately, and we're going to report data acquisition, which is Carel's business unit separately.
On the operating cost side, we have cost of goods sold. The way I would model this is if I was an analyst, is as a function of the Proprietary Revenues. These are the costs other than personnel cost that can be directly attributed to a Proprietary Project, whether it's acquisition or whether it's imaging. We have personnel costs, which includes all salary and social costs, but also bonuses, both short-term bonus schemes and LTIP schemes, and it includes also the personnel cost for the offshore workers. This cost line will probably be around ±$30 million run rate per quarter going forward, including bonuses. It will obviously vary a little bit depending on the bonus level in each quarter.
±$30 million is a good starting point for the kind of expectations you should have for that per quarter. other operating costs are all the other cash related costs that are not falling into two other categories. these costs are going to vary a bit from quarter to quarter, but we expect the average to be ±$20 million per quarter. then by popular demand, I must say we are introducing POC amortization as well, which will allow you to also calculate operating profit and pre-tax profit and net profit in accordance with POC and not only in accordance with IFRS.
This may be a little bit complicated, but accelerated amortization in IFRS is basically the impairment that we do on a survey to align the book value of that survey at the completion of the survey with the remaining, or the net present value of the remaining expected cash flow from that particular survey. That accelerated amortization in IFRS is typically taken at the point of delivery of that survey to the relevant customers at completion. What we do in POC amortization is that we. In my kind of project example on the right-hand side there, this accelerated amortization is represented by the gray, grayish bar there.
What we do in POC amortization is simply that we take the accelerated amortization, we take the gray bar in the chart there, and we redistribute it in accordance with POC over the work in progress period for that particular project. The sum of the blue bars representing the POC early sales amortization will equal the gray bar. It's simply retiming of accelerated amortization to align with the POC of the project instead of recognizing it at a point in time. The straight line amortization, which is amortization of the remaining value at the completion of the project, is the same in these two methodologies. We have provided some historical information in the appendix on the POC amortization.
By that, I will hand the word back to Kristian, who will sum up our messages today.
Thank you very much. It's great to see that you guys are still here. I promise it's gonna be a relatively short summary because I had three cups of coffee, and you know what that does to your body. In summary, I would like to say it's been a great day. It's been fantastic to be here and share our strategies and our plans for the future. Actually the great day for us, I started this morning when we announced six new strategic projects. I think each one of them are so important that I'm just gonna repeat very quickly right now. One of them is a SLB partnership. We've been working with SLB in the U.S. Gulf of Mexico since about 2007, I guess. It developed a very strong partnership.
What we're announcing today is big. This basically is gonna be the bread and butter for TGS for not the next five years, but we're talking 10 years, or we're talking 20 years. It's an enormous amount of data being shot in the Gulf of Mexico for the next two decades, and we're gonna do that together with our partners. Number two, there's been some concern about vessel availability, and is TGS gonna have access to vessels going forward in a market where number of vessels drops from 55 or 57 to 15? I think the agreement we announced this morning with COSL securing us vessel capacity for the next three to five years is huge in that regard. It really is another great example of how TGS is ahead of the curve, making sure that we secure capacity before it's too late.
Number three, we signed a big multi-client project in Africa. This is one of the biggest projects we've announced in Africa in five years. It has a possible extension of the project too. It's just another example of how TGS is growing that business that Will Ashby talked about today. We deployed four new LiDAR buoys in the U.S. or on the U.S. East Coast. This is an important part of our strategy. Deploying four additional LiDAR buoys on top of what we've already done is a great achievement for that team. We also announced an extension of an OBN project in Guyana, and I think that's another great example of how a happy client continues to work with TGS when you do a good job with your client, and you have happy clients, and they keep coming back.
This is just another great example of that. Last but not least, we promised ourselves that we need to show some growth in backlog for the Capital Markets Day because we know you guys are hungry for good news, we set the target. We need to sign some new contracts now to show growth. I'm very happy to say that our backlog that we announced this morning is almost $550 million, or about $540 million, up from about, almost 100% up since when we reported our Q4 numbers. This is just an example of a culture of TGS that is characterized by what we say passion, performance, and teamwork. We basically set six targets for the team. You need to close that SLB agreement. You need to close that COSL agreement.
You need to get that contract in Africa. We need to grow our backlog. We delivered on all 6. It's just a sense of urgency in this management team and across the organization that is truly unique, and I'm extremely proud of showing a contract backlog that is the highest you've seen from TGS in a very, very long time. Also, it means that we're allowed to increase our investments investment guidance for the year. We guided a range of $320-$350 at our Q4 presentation. We're already in a position where we have signed up about $290 of a low end of $320.
We saw the need today to communicate that we probably, or not probably, but we are very likely to go above the $350, which was the higher end of the range. Again, I'm very pleased about the day today, very pleased about listening to the team and seeing all of you here, and obviously have a lot of people following us remotely as well. I'm just gonna summarize very quickly. The multi-year upcycle is expected to happen for all energy sources, also oil and gas. Let's be very clear on that. Increased investment guidance from recent contract inflow and backlog growth. We see we've had several strategic milestones announced today, and I think it cannot be mentioned enough how important these milestones are for TGS going forward.
Again, last but not least, the recent diversification initiatives position TGS for growth across the energy value chain. With that, I want to say thank you very much. I guess we have some time for questions before we all leave. I'm gonna ask Sven and Johannes to come up here and facilitate that. Are there any questions from the room?
Please. I'll keep it very short. Two questions. Christopher from SB1. On this agreement with SLB, you have cooperated with SLB for several years in ocean bottom seismic in U.S. Gulf. Is the agreement today more a formalization of that, you know, continued strong cooperation you have? Is it specific thresholds in terms of, you know, how much you plan to invest every year going forward? That's the first question. The second one is on the COSL vessel agreement. In my world, you know, COSL has mainly acquired seismic for CNOOC, a giant Chinese E&P company. Is it so that, if CNOOC doesn't need the vessel, that you're allowed to use it, or have this agreement secured your X amount of vessel months per year going forward, et cetera?
Thank you.
Thank you. Good questions. I'll start with the SLB. I mean, I think you saw from David's map that what we have acquired in terms of 3D in the power or ocean bottom nodes in the past just covers a small part of the entire Gulf of Mexico, where either one of these companies have data. What we've done in the new agreement is that we're basically saying that all the existing data across the U.S. Gulf of Mexico is to be shared for sparse node acquisition. It doesn't mean that we buy into each other library, but it means that we can utilize the underlying data to get a much bigger footprint going forward. For TGS, it's huge in terms of the entire western Gulf of Mexico is data that TGS doesn't have today, neither in a partnership with SLB.
Today's agreement also gives the partnership access to that data. I think that's why I'm so excited about that opportunity, is that it basically regulates business going forward for the next couple of decades in terms of new acquisition of sparse nodes. On the COSL agreement, it's a, I can't go into details about, you know, who gets what and when do we get it, but I feel very good about that this is gonna sort the majority of our needs in, for example, West Africa. We're obviously gonna use other vendors as well. I mean, as you know, we have strong partnerships with PGS in some parts of the world. We have partnerships with other companies too that secures vessel capacity.
This is gonna cover a big need of what we need in terms of 3D capacity and possibly just as important on the source vessel capacity for Magseis . In terms of, you know, who gets what TGS and COSL or CNOOC, I'm not gonna go into details about that.
It's John Olaisen from ABG Sundal Collier. When it comes to multi-client investment guidance, you now say more than $350. May I ask how much of that is currently in the book in project that have already been announced? Is this?
290.
$290. How much was that, when you guided for?
It was, yeah, 190, or almost 200 at that stage, yeah.
Right. You booked $100 million of projects.
Yeah.
In the last four weeks. All right. When it comes to late sales, you had a lot of good transfer fees in the first half last year in particular. Just wonder, are there any late sales in coming up in Q1 and Q2 or in for the rest in the second half of this year?
Transfer fees, you mean?
Transfer fees, sorry.
I hope there are late sales coming up.
Sorry.
Transfer fees. Yeah, there's probably a couple that could close in either Q1 or Q2, but they're not comparable to the one that we had last year in Q2, of course, which was quite extraordinary for the entire industry.
Yeah. Are they double digit, these these, with the ones you're talking about?
They're probably in the 3-10 range.
3- 10. All right. Of course, you don't provide guidance on late sales. I understand very well that you don't do it. Is it possible to give some kind of indication of how you expect late sales developing apart from transfer fees, so like year-on-year relative to your E&P spending indications? You had a chart showing that you expected to grow at least 18%. Is it reasonable to expect your late sales number to grow with a higher number than the average E&P spending number?
It did last year. I mean, last year we had 30% or 32% growth in E&P spending, 30% growth in seismic spending, and we grew our late sales far more than that. Obviously now we're starting from a higher base. It's always hard to, you know, outperform that figure once again. I think in general, we feel like we have a good data library. We have a number of M&A transactions that we have carried out over the past few years that we haven't really reaped the benefit from, partly because of COVID and the tough market. I don't think I wanna be more concrete than that, John.
The final question is related to late sales. It's always difficult to get the sales investment ratio above two when you're increasing multi-client investment as much as you do. But I think you mentioned in the presentation that you still have a target of long-term sales investment ratio of 2-2.3. Is it reasonable to expect that the ratio in that range this year as well, even with the increase in multi-client investments?
Well, I think, historically, we've had a range of somewhere between 1.7 and 2.5. I think you tend to touch the upper part of that range when you come out of years with high investments and you lower or flatten out investments, and you tend to be in the lower end of the range if you in the phase that we're on, you know, right now, where we increase our investments. Again, I mean, we haven't seen any signs tht we shouldn't be able to target two. You know, I don't think the projects are different today compared to what they've been in the past. I think that range is probably what you can use in your estimates.
It's difficult to get so anything out of you on the late sales expectations, but are you generally optimistic?
I've been around for about 13 years now in this business, so and I've known you for 13 years too.
Are you optimistic, like the final try? Are you optimistic for late sales this year?
We are very optimistic about our business for 2023 and the years after 2023.
Thank you.
Note that you can also ask question online if you wish. One from Mick Pickup there.
Yes.
No? Yeah.
It's probably that.
Okay. It's Mick here from Barclays. Can I just go back to you said that day the IEA said no more exploration was the worst day, and clearly now you're presenting a picture where there's a lot of exploration. I don't know whether it's for you or for Will Ashby, but what has changed in the majors on their exploration apart from a need to get volume? Is there anything like quality of resources now being a big factor?
Yeah, I mean, there are so many different things. I mean, no, one of them is obviously exploration success. You know, we've seen significant or success in 2022, actually starting out in 2023 as well. As you know, Shell announced, or they didn't announce, but upstream announced that Shell had a, another discovery in Namibia. I think that helps.
I think the kind of overall agenda where energy is back on the agenda or oil and gas is back on the agenda. People realize the story that Scott Tinker was here to present today. I think that also starts to sink in gradually that, yes, what are we gonna do after where our shareholders are happy with their dividend, our banks are happy with us deleveraging, you know, then there is gonna be a push for growth. We start to see that too. I think in that regard, I think the message, the overall message from BP on their capital markets day was very, very positive. We see the same from quite a few other companies, no names mentioned. I think overall, we see that our IOCs are definitely coming back to exploration again.
We see NOCs are continuing and a gradual uptick year-over-year, and we even see smaller companies coming back. It's really good to see.
Hi, good afternoon. Kévin Roger from Kepler Cheuvreux. I have two question if I may. The first one is related to the nodes business. You talked a lot about that. If I'm not wrong, what will matter on the nodes is not only the equipment. Can you give us a bit of color on what will be your strategy on the equipment, meaning the nodes rather than the acquisition, if you will keep it internally or if you are ready to become an equipment provider or like Sercel, for example, on the nodes. If you can come back on what will be the strategy just on the equipment rather than the entire nodes business. The second one is on M&A.
You mentioned a lot also the M&A strategy that you implemented over the past years with the success that you had, the return, and you notably signed a new revolving credit facility, maybe also to get a bit of flexibility in the coming years. If there is one business that you will target for the next four ive years that maybe you think you are missing currently, what will be this business, please?
I think on the node plans, I think we are first and foremost, we are gonna integrate the acquisition of Magseis. We're gonna make Magseis a profitable business. We're gonna return positive free cash flow from Magseis. As you saw from Carel's slides, you, there is a desperate need to get more nodes out there. We are definitely gonna look into that and make sure that we can provide what the market needs, but not more than that. We, we need to be controlled in that way too. We don't wanna, you know, build too many nodes and make and make this market oversupplied again.
In terms of technologies and what's gonna be done in-house versus by partners, I think in general, TGS is a company that believes in an asset-light model, which means that we're definitely gonna look into partnerships on the manufacturing side and the technology side. That's a process that we're just going through as we speak. It seems like you have a French accent, so there may be a reason for your question there, but that's probably one of the companies we would talk to in that regards. Anybody else? On your M&A question going forward, do you wanna say a few words about.
Yeah, I think we've, as you know, done quite a few M&As and we're pretty happy with the position that we have. We're always looking for good transactions, particularly on the multi-client library side. As you know, there aren't that many libraries left out there. To the extent there are, we will of course be interested in looking at that. We are also, the ambition is also to use M&A to further develop our DS business or our Digital Energy Solutions business. We have done two acquisitions, one in 2021 and one in 2022. We take the integration efforts very seriously to get it integrated into TGS.
We are in no rush for kind of adding to that in our Digital Energy Solutions in the short term, but in the longer term, obviously we have further ambitions there.
Other questions? Well, with that, I wanna thank you all for coming today and great to get your attention. I see some employees are here, so please get back to the office and pick up your phones. Thanks for a great day. Thank you very much.