ABSTRACT

Since 1969, the independent segment of the petroleum industry has drilled about nine out of every ten New Field Wildcat wells in the United States. Significant exploratory successes during this same period were about two percent, or about one out of every 50 wells drilled.

Independents made 75 percent of the New Field Wildcat discoveries; however, to obtain a complete picture of exploration during this time period, the results must be measured in the light of reserve additions. Their 75 percent discovery rate of New Field Wildcats yielded slightly more than one-half of the oil and gas reserves found in the United States during the past five years. The majors with only 25 percent of all successful New Field Wildcats discovered slightly less than one-half of the oil and gas reserves. This does not include all of the large reserves found by majors at Prudhoe Bay. Most of the majors' exploration occurred in the high-cost and high-risk environments of the offshore Arctic and ultra-deep inland drilling where the average discovery size has been substantially larger.

It is clear that both independents' and majors' efforts are vital in oil and gas exploration. Each segment contributes approximately equal shares of reserves discovered while exploring in somewhat different environments of risk and costs. Thus, legislative discrimination against either segment will ultimately harm the entire industry and the consumer. To begin to meet national goals of greater self-sufficiency requires maximizing oil and gas exploration and discoveries. This can best be accomplished by the petroleum industry (which is both independents and majors) as a whole, and not by individual segments.