Intense competition in the foreign petroleum industry was the foremost news of 1961. Spare crude oil producing capacity increased, crude and product prices were weak, and, as a result, there was keen competition for markets. Many companies came to the conclusion that foreign operations were not the gold mines they had envisioned several years ago.
The year 1961 marked the start of commercial production in Libya, and it was the first year of full production from the Algerian Sahara. It was a year in which Argentina nearly reached its long sought goal of self-sufficiency in petroleum, and Canadian producers exceeded the ambitious goal set for them by their government. It was also a year in which the potential of the offshore areas of the Persian Gulf was amply demonstrated.
None of these activities can be entirely attributed to 1961, since they were the results of activities of the past decade. Therefore, this paper briefly reviews some of the factors which led us to the current situation.
After World War II it became obvious that great supplies of energy had to be developed if foreign areas were to grow and prosper in the post-war world. The task of supplying the bulk of this energy has fallen to oil.
In 1961, there were 13 countries in the Free World which consumed more than 250,000 B/D of petroleum products. Table 1 shows the demand for these 13 countries in 1952, when the total Free World consumption was 11.7 million B/D. The 12 foreign countries had a combined consumption of 2.4 million B/D, or 21% of the Free World. The United States consumed 7.3 million B/D or 62%. In total, these 13 countries consumed 83% of the Free World oil.
Table 1 shows that consumption in 1961 has risen to 20 million B/D for an average growth of 5% per year, or at the rate of nearly 1 million B/D annually. The 12 major foreign consumers' demand increased 2-1/2 times to 6.4 million B/D and their share of the Free World increased from 21% to 32%. Their growth average 10% per year, compared with 3% per year in the United States.
This rapid growth in consumption has been a large factor in the increasing importance of foreign oil and has contributed to increased foreign producing activity.