Problems of the International Petroleum Industry in 1957

American oil companies both large and small are commencing to devote more of their energies and their capital to production operations outside the United States. The recent granting of new concessions in Venezuela, North Africa, and Central America, have added many new names to the list of companies working abroad. In view of this healthy new development, it is appropriate at this time to review some of the problems which these companies will have to face in conducting their business successfully. World Crude Demand In 1956 free world production of oil averaged about 14,825,000 B/D, which represented an increase of 8 per cent over the average in 1955. This percentage increase would doubtless have been greater had it not been for the unfortunate closing of the Suez Canal and the necessity of rearranging shipping routes. Based on estimates of prosperity growth, many economists believe that for the next decade or so we can look at world increases in demand in the range of 8 to 10 per cent annually. We are, therefore, looking at a doubling of crude oil production over the next decade. The only thing which will interfere with this tremendous rate of growth will be war or some kind of nationalistic brake applied against the free use of energy throughout the world. Against this estimate of increased demand we are witnessing the greatest world-wide exploratory effort that our industry has ever known. New techniques in geophysics, geology, and production are making this effort remarkably successful. In spite of the plentiful crude oil supply position which exists today, both in the United States and abroad, these vigorous programs are likely to result in additions to world crude oil reserves. Many of these additions will be made by companies which heretofore have not been important producers outside of the United States and others who are in foreign work for the first time.