479 



sumption of oil will be nearly four times that of today, and the use 

 of petroleum gas will increase as much as five times in the same 

 period. 66 



Against this demand, world production is variously estimated at 

 between 34.4 mb/d and 41.3 mb/d. 67 Offshore production accounts 

 for 16-18 per cent of the world's total. Weeks has predicted that by 

 1978 an offshore daily yield of 23 mb/d is expected, representing 33 

 per cent of a world total of 70 mb/d. He also estimated that proved 

 world oil reserves total 425 billion barrels, which would last at least 

 through this century. Moreover, the ultimate world potential of all 

 resources offshore totals 1,600 billion barrels. For comparison, ultimate 

 world potential of comparable resources on land was estimated at 

 4,000 biH ion barrels. 



Despite this enormous land potential, the oil industry is vigorously 

 delving into the offshore fields. Current investments in offshore opera- 

 tions were reported by the Department of the Interior to be nearly 

 $20 billion. Investment is expected to increase at the rate of $3 billion 

 annually, reaching a total of $50 billion by 1980. Estimates given by 

 L. G. Weeks show a "probable total upward of $25 billion" up to 

 1968, expected to reach $50 billion by 1978. 



Operations on land are generally less costly than those offshore. 

 More costs are added to offshore operations as the new consciousness 

 of environmental concern gains momentum. Hazards of offshore oper- 

 ations include those encountered in land operations, aggravated fur- 

 ther by the marine environment, plus a new breed of hazards peculiar 

 to the underwater world. Safety and anti-pollution requirements have 

 already added a heavy burden on the industry's outlays, and more 

 stringent regulations will add further to the spiralling costs of pene- 

 tration into deeper water. 08 



Although exploration expenditures offshore are less than those for 

 land, drilling and production make up for this margin. Technological 

 innovations often tend to be glamorous, and their novelty tends to 

 overshadow and supersede older and more reliable technology. In the 

 words of Eduardo J. Guzman: 



There are many examples in the world of these premature adventurous off- 

 shore campaigns involving the use of costly geophysical methods where less ex- 

 pensive exploration approaches still could yield considerable success in the 

 discovery of new reserves. This worldwide trend is not new in the history of 

 exploration. It has happened repeatedly even within the United States, where 

 every new method or tool has tended to displace all other previous ones, and 

 usually at higher operating costs. * * * Marine or offshore exploration, particu- 

 larly involving seismic work, is easier, faster, and cheaper than almost any 



98 Lewis G. Weeks, "The gas, oil and sulfur potentials of the sea," Ocean Industry (June 

 1968), page 43. Of this world consumption, the communist countries take 16—17 per 

 cent. In the first quarter of 1971 (as reported in the Oil & Gas Journal, May 31, 1971, 

 page 18). the communist production averaged 7,874 mb/d. 



87 Weeks, op. cit., put current (1968) production at 35.3 mb/d ; The Oil and Gas Journal 

 (December 29, 1969), page 95, estimated the 1969 production at 41,266,100 b/d ; and 

 The Chase Manhattan Bank (Sparling, et al., op. cit., page 95), gave the figure of 

 34,390,000 b/d for crude oil production for the "free world." J. D. Moody gives a "best 

 guess" for 1990 as 9S mb/d. ("Petroleum demands of future decades." American Associa- 

 tion of Petroleum Geologists Bulletin (December 1970), pages 2239-2249.) Figures as 

 of June 1970. More recently (June 14, 1971), Weeks was reported to have revised his 

 estimates to a world production of 43 mb/d, of which the offshore production represented 

 17 per cent (Ocean Weekly Report), while Larry Auldrldge (Oil & Gas Journal, May 31, 

 1971) forecasts world production to average 50 mb/d for 1971. 



88 See footnote 59. 



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