Exploration and Production - From Now to 1970

Abstract

As you know, the subject I have been asked to cover is "exploration andproduction, from now to 1970." I should perhaps begin by pointing out that manyof the exploration and development programs designed to meet the demands of1970 are already well underway. As a significant contributor to the supply ofenergy on this continent, the Canadian oil and gas industry is already lookingpast 1970 and trying to get a focus on the situation ten and even twenty yearsfrom now. First a little background on the industry, to bring us up to date: Accordingto statistics published by the Canadian Petroleum Association, industry expenditures for the exploration, development and production of oil and naturalgas in Western Canada, from 1947 to 1964, inclusive, amounted to 8.3 billiondollars, exclusive of pipeline construction. Except for the last three years, the continuous expansion of the industryhas resulted in annual expenditures greater than income. The cumulative excess of expenditures over income amounted to 1.8 billion dollars during this eighteen-year period. This amount does not reflect any interest on money, thecost of high-risk capital needed for this type of investment nor income taxes.However, the industry has discovered substantial reserves of oil, gas and gasproducts which will more than offset this deficit. Figure 1 shows how the production of crude oil rose from 21,000barrels per day in 1947 to a peak of nearly 500,000 barrels per day during the Suez crisis in 1957, then dropped back to about 450,000 barrels per day. Underthe National Oil Policy, which began in 1961, production increased steadily toan average of 750,000 barrels per day last year, with natural gas liquidsaccounting for an additional 102,000 barrels per day. In 1970, we estimatecrude oil production at 960,000 barrels per day, with liquids bringing thetotal of 1,100,000 B/D. Figure 2 shows the development of domestic andexport markets for crude oil and pentanes plus.