This paper was prepared for the 40th Annual California Regional Meeting of the Society of Petroleum Engineers of AIME, to be held in San Francisco, Calif., Nov. 6–7, 1969. Permission to copy is restricted to an abstract of not more than 300 words. Illustrations may not be copied. The abstract should contain conspicuous acknowledgment of where and by whom the paper is presented. Publication elsewhere after publication in the JOURNAL OF PETROLEUM TECHNOLOGY or the SOCIETY OF publication in the JOURNAL OF PETROLEUM TECHNOLOGY or the SOCIETY OF PETROLEUM ENGINEERS JOURNAL is usually granted upon request to the Editor PETROLEUM ENGINEERS JOURNAL is usually granted upon request to the Editor of the appropriate journal provided agreement to give proper credit is made.
Discussion of this paper is invited. Three copies of any discussion should be sent to the Society of Petroleum Engineers office. Such discussion may be presented at the above meeting and, with the paper, may be considered for publication in one of the two SPE magazines.
A little over 10 years ago this observer wrote a paper entitled, "The Trend Toward Integration". I was, of course, referring only to the petroleum industry where powerful forces were at work which would cause numerous mergers and acquisitions leading toward more complete corporate integration of production, refining and marketing, both in the United States and abroad. This process has continued at a pace faster than expected and affected very large entities hardly expected to succumb, so that now there are only about 20 large integrated companies where 30 or 40 existed only 10 years ago. And scores of small independent refiners and producers have been absorbed into these 20 companies. With the outlook for the decade of the 70's outlined here, it is probable that further combinations will occur reducing this list to about 15 very large, diversified, international and well-integrated companies, making up the bulk of the industry. But new small independent producers and refiners will always spring up, becoming successful through sheer hard work, ingenuity and luck. Yet the urge to merge and coalesce will affect each of these as they become larger through success.
As the interested observer today again finds himself looking ahead for the decade through 1980, he realizes that "only fools attempt to forecast" and that much that is said here will likely be "written in the wind". But try we must, remembering major industry events of recent years which were unforeseen and, therefore, humbling—such as huge Libyan production, the Suez crisis, substantially production, the Suez crisis, substantially underestimated demand growth in the Free World outside the United States, much larger than estimated capital requirements, and now enormous discoveries of oil in the most remote part of the United States—northern Alaska.
All these events are reflected in this attempt to look ahead a decade for the domestic petroleum industry and to:
estimate the petroleum industry and to:
estimate the growth in requirements for hydrocarbons to 1980,
determine in broad terms the sources of supply available to satisfy these needs, and
appraise the capital required and examine the ways to generate these funds.
The world's needs for energy are huge and growing every day. Even Russia, which for a while posed a threat to the Free World oil industry by excessively cheap exports to under-developed countries for political purposes, has found its requirements for oil increasing so rapidly that its exports to the West have start to decline. In the Free World the needs for energy in 1968 reached 70 million B/D of oil equivalent, which should increase to 120 million B/D by 1980, a rate of expansion of about 4.5 percent per annum. Of this amount, petroleum percent per annum. Of this amount, petroleum hydrocarbons are expected to furnish their full share, amounting to about 73 percent of the Free World's energy requirements.
The expected demand for petroleum liquids through 1980 is shown in Table 1.