The Role of the Independent in the U.S. Oil Industry
- Estill S. Heyser Jr. (Texas Mid-Continent Oil & Gas Association)
- Document ID
- Society of Petroleum Engineers
- Journal of Petroleum Technology
- Publication Date
- August 1960
- Document Type
- Journal Paper
- 23 - 26
- 1960. Original copyright American Institute of Mining, Metallurgical, and Petroleum Engineers, Inc. Copyright has expired.
- 7.4 Energy Economics
- 1 in the last 30 days
- 146 since 2007
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"Independent" Difficult to Define
A precise definition of an "independent" oil producer is difficult because he actually defies description. The usual measurement is that he is a non-major, which then brings up the problem of where "majorhood" sets in on a scale of barrelage, income, degree of integration, etc.
The literature and legend of the industry abound with fabulous stories of a daring, colorful, venturesome breed of American businessman known as the oil independent and wildcatter. A number started enterprises which today are known as major companies.
One of the Society's great patron saints and now elder statesman, John Suman, used to say that when he started out before World War 1, "The mark of a real independent that did a good job was one who had an automobile about a block long, a diamond stick pin, a big bull-dog and a kept woman". Unfortunately, except for a change in some of the status symbols, this type of mythical character still persists in the folklore of our industry and in that of the general public.
One economics professor has said of independents, "The independent, as the non-integrated producer is called, developed into a veritable institution - a typically American phenomenon. The blinding success of the lucky ones hides the tragedy of many losers and large losses" .
He said also, "The unique feature of the American petroleum industry is the existence of the thousands of independent producers of crude oil, large and small. These represent a basic element of the industry nowhere except in the United States and in Canada. They not only constitute a unique feature of the petroleum industry in North America but materially affect the position and policies of the large integrated companies. Their mere presence indicates that integration in the petroleum industry of North America is decidedly limited. The more or less complete self-sufficiency in basic raw materials which is typical in other basic mineral industries simply does not exist in the mineral petroleum industry of North America."
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