Good afternoon gentlemen. Thank you for this opportunity.
A major oil company the other day published what it called "musings of an oil published what it called "musings of an oil person…" Today, with your permission, I person…" Today, with your permission, I would like to publish some "musings of an oil tool person…"
We find ourselves today at a very curious point in time in our industry. Demand for point in time in our industry. Demand for everything is high. Supplies are low. Production schedules are supertight. Tempers are Production schedules are supertight. Tempers are short. So is oil. Prices are spooky. Congress is nervous, so are businessmen. And the consumer stands watching all this in stark disbelief.
How did we get in this marvelous mess? To answer, we must retreat in time to the 1960's — described by one historian as the Decade of Extremes. Ten years of irony, paradox, gross exaggeration, massive paradox, gross exaggeration, massive miscalculations and contradictions in which we all had the pleasure of participation.
It was the decade of one of the worst Bear markets and the hottest Bull market in Wall Street history. It gave us political and economic extremes, extreme rises in costs, labor contracts, inflation and deficits, extremes on the campuses and on city streets, and even in religion where we witnessed rise of the occult and the Jesus Freaks. The sixties were also called the decade of materialism - when demand for everything sky-rocketed to unprecedented levels. More money chased more goods than at any time in the history of mankind.
Extremes were also felt in our industry. Some of these led us to where we are today - in the midst of tough problems and great opportunities.
The sixties saw the cost of drilling, producing and marketing energy products climb, producing and marketing energy products climb, while government controls held down fair profits. profits. Government policies controlling the price of gas and oil drove American oil companies outside the United States' boundaries in search of cheaper sources of oil.