Oil prices are finally taking the long-awaited plunge, with losers spread across the entire U.S. petroleum industry. In the short to mid-term future, we will continue to be faced with low, slow, no, or negative growth in demand for petroleum products.

Present events, including world-wide over-capacity, appear to be part of a genuine structural change that is occurring in the industry rather than a more traditional and better-understood cyclical change. This change portends a more significant role in exploration for small to medium sized independents as the majors become increasingly sophisticated managers of "properties" as opposed to finders and drillers for oil.

Long-term forecasts indicate genuine supply problems starting before the turn of the century. To develop reserves that will meet this demand, the restructured industry will have to rely on a new range of exploration and exploitation technologies, including: remote sensing; artificial intelligence; advanced data management, processing, transmission and interpretation methodologies; three-dimensional modeling; and, as-yet, undeveloped enhanced recovery techniques.

Research to bring these technologies on-line before the end of the century must start now, with commitments from presently hard-pressed oil firms. Innovative approaches to how we organize, finance and perform research are needed so as to bring about a new industry/university/government collaboration.

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