United States Intensifies Quest for Foreign Oil; Russia Expands in World Markets During 1958
- H.W. McCobb (Standard-Vacuum Oil Co.)
- Document ID
- Society of Petroleum Engineers
- Journal of Petroleum Technology
- Publication Date
- February 1959
- Document Type
- Journal Paper
- 14 - 18
- 1959. Original copyright American Institute of Mining, Metallurgical, and Petroleum Engineers, Inc. Copyright has expired.
- 4.1.5 Processing Equipment, 4.1.2 Separation and Treating, 4.2 Pipelines, Flowlines and Risers, 4.6 Natural Gas, 1.6 Drilling Operations, 4.3.4 Scale
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For foreign oil operations the year 1958 was a year of adjustment and change, rather than a year of crisis or sensational discovery. It marked the establishment of trends that are likely to be of great significance in the years to come: (1) entry of more and more U. S. oil firms into foreign operations, (2) penetration of the Free World oil markets by Russia, and (3) a trend toward more government participation in oil ventures. 1958 was also a year of industry-wide over-capacity. These trends are discussed briefly, including some of the more significantdevelopments in selected countries.
Dynamic Growth of Foreign Market Attracts U. S. Companies
Entry of more U. S. companies into foreign oil operations has resulted largely from the desire by domestic firms to participate in the dynamic growth of foreign markets, along with the feeling that the growth of demand in the U. S. has become relatively slow (see Fig. 1).
Are Foreign Outlets the Key to Growth?
Because of the belief by many that development of market outlets is the key to growth and profits, there has been a desire to obtain outlets in these rapidly growing foreign markets. Also, the growing difficulty and increasing cost of finding oil at home have been factors in causing many domestic firms to search for oil abroad in spite of the great hazards of overseas operations. In 1952, for example, 72 U. S. petroleum companies were engaged in 164 separate exploratory and producing operations in 51 foreign countries. By the end of 1957, the total had more than doubled to 150 companies, representing an estimated 2 million stockholders, with an estimated $8 billion invested overseas. The companies were involved in 398 separate operations and had spread their activities to 73 countries.
As a result of these activities by U. S. and foreign companies, the world supply of crude increased to meet the growing demand as shown in Figs. 2 and 3.
During Sept., 1958, Free World production reached a record level of more than 16 million B/D. The month also was a record for free foreign output, which pushed past 9 million B/D for the first time.
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