12S 



sediment averaging perhaps one-half mile 

 thick. There is no reason to expect that oil 

 and gas are not formed within these thin deep 

 ocean sediment layers, but it is unlikely that 

 they could be present in the same quantities 

 that they occur in the thick sedimentary 

 basins of the continents and their shelves and 

 slopes. 



Obviously, there are exceptions to these 

 generalizations. Some deeper ocean areas — 

 the Gulf of Mexico is an example — are sur- 

 rounded largely by exposed continental 

 rocks. Consequently, they receive a much 

 greater proportion of continental debris than 

 the large open ocean regions. Thus, it is not 

 startling that oil and gas were discovered re- 

 cently in nearly 12,000 feet of water in the 

 Gulf during the JOIDES deep sea drilling 

 project. But since the Gulf of Mexico con- 

 tains an unusually thick accumulation of sed- 

 iments and the discovery was associated with 

 unique intrusions of salt, it is not reason- 

 able to assume without further study that 

 these same conditions exist in the larger 

 oceanic areas nor even in other confined 

 oceanic areas. 



Technical Considerations 



In proceeding onto the continental shelf, 

 the petroleum industry has surmounted one 

 obstacle after another and has succeeded in 

 developing exploration and exploitation 

 technologies for working at sea. Explora- 

 tory drilling has begun in water depths of 

 1,300 feet ; the feasibility of core drilling in 

 20,000 feet of water will be tested shortly. 

 Within 10 years, undersea core drilling may 

 be accomplished by remote control, and an 

 increasing number of production wells will 

 be completed beneath the water's surface. 



Recovery of oil offshore is necessarily more 

 expensive than on land, even though certain 

 exploratory tasks can be accomplished at 

 lower cost. Nevertheless, many companies 

 anticipate that new oil fields in the compara- 

 tively virgin marine areas will be sufficiently 

 large and productive to be competitive with 

 oil fields on land. With continued improve- 

 ment in technology, such as the building of 

 platforms to service multiple wells, offshore 

 production costs can become increasingly 

 competitive with onshore costs. 



Table 4-2 Domestic Offshore Expenditures 



(Billions of dollars) 



1968 Cumulative 



(Estimate) (through 1968) 



Lease bonus and rental payments 



Royalty payments 



Seismic, gravity, and magnetic surveys 



Drilling and completing wells 



Platforms, production facilities, and pipelines - 



Operating costs 



Total 2.35 



12.75 



Source: Richard J. Howe (Esso Production Research Co.), "Petroleum Operations in the Sea— 1980 and Beyond." Octan Industn, 

 August 1968, p. 28. 



