137 



Fig. 15 — Offshore Oil Producing Rates 



Fig. 16 — Offshore Oil Production (Percent of Total 

 Production) 



Fig. 17 — Domestic Offshore Bonus and Rental Pay- 

 ments 



of 7-8 percent per year. Venezuela is the top offshore 

 producing area; the Persian Gulf is second; and the 

 United States is third. 



The production of oil from offshore leases has in- 



creased from 10 up to 17 percent of total tree World 

 production during the past 10 years. It is interesting to 

 note that U.S. offshore production has increased from 

 4 up to 12 percent during the same period and is cur- 

 rently increasing at a higher rate than the rest of the 

 Free World. 



With this statistical background, I would now like to 

 cover briefly some financial data on offshore operations. 



The total amount of money spent by the petroleum 

 companies to obtain offshore leases in the United States 

 has almost doubled in the last two years. This was pri- 

 marily the result of three spectacular federal lease sales 

 — a $500 million sale off Louisiana last year, plus two 

 sales totaling approximately $600 million each this year 

 — one in the Santa Barbara Channel and one in Texas 

 waters. There was also a $500 million federal sale in 

 1962 and a $300 million federal sale in 1960 which 

 added substantial amounts to these over-all totals. The 

 current federal total stands at $3.3 billion and the state 

 total is approximately $0.7 billion for a grand total of 

 $4 billion. 



Fig. 18 — Domestic Offshore Royalty Payments 



Cumulative royalties paid to date total $1.85 billion, 

 about equally divided between the states and federal 

 government. 



Fig. 19 — Domestic Offshore Expenditures 



Here is one final bit of statistical information concern- 

 ing domestic offshore expenditures. I estimate that in 

 1968 the petroleum industry will spend $2^ bilUon in 

 the domestic offshore arena. As I mentioned earlier, 

 there have been two very large federal lease sales this 

 year which account for about half of the total expe ndi- 

 tures. Royalty payments to state and federal govern- 

 ments are running at a $250-million-per-year level. 

 About $100 million is being spent in gathering, process- 

 ing and analyzing geophysical data. A third of a billion 

 dollars is being spent on drilling and completing both 

 exploratory and development wells plus a quarter of a 

 billion dollars on building platforms, production facili- 

 ties and pipe lines to bring this production to market. 

 Operating costs are running at an annual rate of $150 

 million. Total expenditures through the end of 1968 

 will reach an estimated $12.75 billion. I estimate that 

 cumulative expenditures outside the United States might 

 total $5 billion, giving a grand total of $18 billion for 

 all Free World offshore development. 



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