ABSTRACT

Although there are good domestic oil and gas opportunities for Canadian companies, Canada's conventional oil reserves and production continue to decline. This fact, plus the probability of low oil prices throughout the nineties, should result in increased allocation of exploration dollars of independent Canadian companies to international ventures.

International exploration offers many attractions, including low-cost production and quick tie-in to markets. In addition, a large remaining oil potential awaits explorers in many established areas, and several countries are offering first-time access to relatively unexplored areas of high potential that require western oil field technology.

Under a low oil price scenario, many producing countries will be seeking, possibly competing for, increased private-sector investment, but Canadian investors should proceed only after careful assessment of the financial, political and geological risks. Development of good working relationships with state oil companies will be a good strategy in reducing fiscal and political risk.

Because of growing international recognition and acceptance of western oil field technology, technical capability will be an important factor in gaining concessions and signing joint ventures, but technical excellence alone will not guarantee success. International opportunities present a variety of demands for technical expertise, experience and management skills. The independent company must find its appropriate niche among the world players by identifying its strengths and developing focused strategies that will enable it to successfully employ its special areas of expertise.

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