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This morning, I would like to explore with you the impact of Mergers, Acquisitions and Alliances on the Petroleum Industry in the next millennium. With the discovery of the first commercial hydrocarbons in 1856, Colonel Drake changed the World (Fig. 1). Without hydrocarbons and the Petroleum Industry that was born from their commercial development, we would not have the fuel to drive automobiles, to fly planes, or to have propelled the industrial revolution out of the steam era. We would not have plastics, synthetic rubber, certain cosmetics and medicines and man would not have landed on the moon. We are part of one of the most important industries on earth. And it starts with you, the explorationist that finds that very valuable, though often under-priced, commodity called Oil & Gas. Over the last 25 years, we have seen our industry go through tremendous change. We have seen the technical evolution of seismic from a 2D exploration tool to a 3D exploration & development tool to a 4D development and engineering tool. We have used our enhanced technology and understanding of the earth to successfully unlock tremendous amounts of oil & gas reserves. Some may argue that we have been too successful. More on that later. At the same time we have seen independent and major oil companies disappearing through mergers and acquisitions; the weaker companies being taken over by the strong . . . . . . an industrial version, if you will, of Charles Darwin's biological thesis on the "survival of the fittest". Who would have guessed that such name brands as Gulf Oil, one of the original seven sisters, Sinclear, Getty, Union Texas and now, Mobil, Amoco and ARCO, to name just a few, would no longer be a part of our petroleum landscape (Fig. 2). What, if anything, does this tell us about the petroleum industry's future. That's what I hope to explore with you this morning. The impact of Mergers, Acquisitions and Alliances on the Petroleum Industry during the New Millennium. And let me add, this is an Independent oil-man's perspective on the subject. Although I will not address the impact of mergers on academia, mining, nor the petroleum services industries, I believe that in most cases you will see a direct correlation. Before we dust off our "collective" crystal ball to look at the future, lets take short journey back into the past. Let's find out what has driven our industry into an era referred to by the media as "Merger Mania!" As reported by Ralph Nelson, "the Great Consolidation of the '90's cites as main factors, the generally favourable conditions of business combined with a rising, buoyant securities market at a time of too much productive capacity". Sound familiar? Interestingly enough, this quote refers to the 1890's, not the 1990's! Mergers & Acquisitions have always been part of industry. During the late 19th century John D. Rockefeller built the Standard Oil Empire by acquiring oil fields and merging refineries. The Royal Dutch Company, the company that successfully found oil in Sumatra in 1885, was merged with Shell in 1907. Later, driven by the energy needs ofWorld War I, oil prices increased and remained strong through the 1920's industrial "boom" years giving the cash flow needed to support the petroleum industries' growth (Fig. 3). During the 1930's, we saw a dramatic increase in oil reserves, lead by Pop Joiner's discovery of the giant East Texas Oil Field, drive oil prices down to then unprecedented lows, and, as a result, drive many companies out of business or into the arms of competitors. Were these early consolidations of our industry different than what we are seeing today? Were they the struggles of a new industry finding its feet, or were they the harbinger of things to come?

Mergers, acquisitions and alliances: their impact on the petroleum industry in the next millennium