418 



In the Texas ruling, the Court also defined the coastline as the modern 

 ambulatory coastline. It pointed out that if any alleged inequitable resolutions or 

 detriments to orderly mineral development were to follow from this ruling, 

 Congress could provide relief. 



Thus, further delay could be anticipated before the exact area of the Con- 

 tinental Shelf in the Gulf of Mexico, over which Louisiana and Texas have jurisdict- 

 ion,is delineated. The substantial funds being held in escrow, now over $lbiHion, 

 will continue to increase. 



Exploration and Production 



While the problems of working in the offshore area are still numerous, 

 the advances in technology which have occurred over the past several years, have 

 not been remarkable, and arr.ply demonstrate what can occur when thought and 

 ingenuity are brought to bear on a problem. The discoveries to date in the off- 

 shore area, even considering the disaster offshore Santa Barbara, continue to 

 provide us with a great deal of enthusiasm for the rapid growth which we foresee 

 in the offshore petroleum industry. Major onshore discoveries like those on the 

 North Slope of Alaska and in the foreign sectors, such as the prolific Libyan wells, 

 do not diminish our expectationsfor the offshore area. Demand for petroleum in 

 the future is such that all the reserves will be needed. Our enthusiasm, naturally, 

 spreads to the services pr.ovided by the drilling contractors and equipment man- 

 ufacturers who will stand to benefit significantly from this increasing offshore 

 participation. In fact. Shell Oil and Continental Oil direct more than 60% of their 

 total exploratory budgets to the offshore area. Postponement of offshore lease sales 

 may well result in increased exploration and developmient of existing leased acre- 

 age, as the oil companies would have more money this year for operations and 

 less needed for bonuses. The offshore service and manufacturing companies would 

 be the obvious beneficiaries. 



Over the past year, new offshore production commenced in many 

 different areas, including Iran's giant Sassan Field and offshore Cabinda where 

 Gulf Oil will be producing about 40,000 B/D in 1969. Initial discoveries included 

 the first successes in the Norwegian and Dutch sectors of the North Sea, offshore 

 Brazil and off the northwestern coast of Australia. About 12 additional countries 

 will record initial exploratory efforts off their coasts in 1969. They are centered 

 in the African and Far East countries, 



1. Domestic Offshore 



Two important lease sales, one offshore Texas and the other offshore 

 California, occurred in 1968. In May of last year, the industry spent $600 million 

 to bid on 141 tracts offshore Texas and $603 million for acreage offshore California 

 in the Santa Barbara Channel. These two highly distinct areas have turned out to be 

 a nnixed blessing, so far, for the industry. The acreage offshore California is, for 

 the most part, in deep water and involves highly faulted structures and complex 

 geology; offshore Texas, the water is generally shallow and the geological problemis 

 are miniscule when placed in perspective with some other areas. 



