A Key to the Future - A Review of the Economics of the U.S. Oil Producing Industry
- G. Dawson Priestman (Standard Oil Co.)
- Document ID
- Society of Petroleum Engineers
- Journal of Petroleum Technology
- Publication Date
- November 1960
- Document Type
- Journal Paper
- 11 - 14
- 1960. Original copyright American Institute of Mining, Metallurgical, and Petroleum Engineers, Inc. Copyright has expired.
- 1.6 Drilling Operations, 3 Production and Well Operations, 4.6 Natural Gas, 6.1.5 Human Resources, Competence and Training
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Most oil men are keenly concerned with the outlook for the domestic producer. Will production increase? Will profits improve? How long will spare capacity be a problem?
In seeking answers to these and similar related questions, the oil-producing industry needs a much clearer picture of long-term trends. Unfortunately, such a picture has not been readily available due largely to a lack of reliable industry data. But some things are obvious-over the last 10 years, expenditures have increased considerably and over-all profits on new investments have declined. This trend has raised many questions regarding the economics of the industry, and in recent years a new profession has appeared-exploration and producing economics. Basically, the function of the producing economist is to analyze the trends of the past to find "a key to the future".
This paper offers an analytical approach to the economics of the United States oil-producing industry over the past 20 years. While the methods used may not be fool-proof, they are believed to give a reasonable appraisal of the situation as it has existed.
Two basic factors, "income" and "expenditures", must be understood when analyzing an industry or a company. The relationship between income and expenditures gives "profit", the motivating force behind the free-enterprise system. These factors, although they sound simple, are often difficult to interrelate, especially in the petroleum industry. It is important that they be known and recognized, not only for individual or company use, but also in efforts to explain their significance to the public and to Congress.
|File Size||380 KB||Number of Pages||4|