The petroleum industry is undergoing a fundamental restructuring that ischanging the shape and texture of our business. Four principles seem to beguiding this restructuring: proactivity, simplicity/focus, flexibility andsynergy. These four elements are contained within horizontal technologyapplications in Canada and are impacting the upstream operating companies andthe service and supply sectors of our industry.

This paper will examine the evolving context or environment, socio-economically and politically, within which these petroleum industrychanges are occurring. The specific resource base potential, financial, regulatory and market forces that support the application of horizontaltechnology are addressed with their suggested impacts on industryrelationships, production and economic trends over the next 5 years.


Our world is experiencing an unprecedented rate of change. Politically, barriers that prevented the free flow of financial and technological resourcesare being gradually removed. The dissolution of the USSR and it'ssatellites into separate and distinct entities, the reunification of East and West Germany, the awakening of the "sleeping giant", China into experimentingwith a form of social-democratization are indicators of the fundamental changesthat are occurring worldwide.

The world appears to be aligning and reforming into three trading areas:Pacific Rim (led by Japan); North American (led by the US); and the European Economic Community (EEC). As these alignments occur through the course of thisdecade, challenges and opportunities are being presented to industry andgovernments as to how best cope with these changes.

Economically, here is a search for understanding of the current trends incurrency, trade and interest rates. What we are discovering in our search isthat we have no past precedents. There is no place in history where the market, economic and social political forces have patterned themselves as today.Experience is no longer valid and todays challenges cannot be solved withyesterdays solutions.

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