Abstract Up to here, this narrative has been positive, for the practice of geophysics, whether applied or basic, was both exciting and productive during the first half of the 20th century. This approach fitted nicely with the expansionist, consumption-oriented, problem-solving, optimistic outlook that dominated this period. But, starting quietly in the 1960s, divergent approaches began to be taken by scientists and humanists when attempting to analyze and solve the same set of human problems. As a consequence, a sharp cultural rift set in throughout the Western World. Two dramatically different sets of ethics competed for the mind of youth. One choice that could be followed—and the traditional one—was the “Judeo-Christian ethic” which gave mankind stewardship over the earth, the concept on which our modern industrial society is based. The alternate was the “humanist ethic” which urged that there should now be a “post-industrial society” where “smaller is better,” where the quality of life was more important than economic productivity, where society, rather than the individual, was the prime source of critical social adjustment problems. Much of the wisdom and technology that had been accumulated by mankind for improving the world’s standard of living was rudely shunted aside in the early 1970s by groups, calling themselves “environmentalists.” 2 So alarming were the claims of this group that, by exploiting concepts expressed in the best-seller, Silent Spring (Carson, 1962), their thinking soon dominated the media and political circles. Their sales pitch was keyed to the assumption that modern industrial society was contaminating the globe

Abstract Analysis of estimated total recoverable oil volume (field size) of 186 well-known giant oil fields of the world (>0.5 billion bbl of oil, discovered prior to 1981), exclusive of the United States and Canada, demonstrates general increases in field sizes through time. Field sizes were analyzed as a group and within subgroups of the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC countries. From 1981 through 1996, the estimated volume of oil in the 186 fields for which adequate data were available increased from 617 billion to 777 billion bbl of oil (26%). Processes other than new field discoveries added an estimated 160 billion bbl of oil to known reserves in this subset of the world's oil fields. Although methods for estimating field sizes vary among countries, estimated sizes of the giant oil fields of the world increased, probably for many of the same reasons that estimated sizes of oil fields in the United States increased over the same time period. Estimated volumes in OPE C fields increased from a total of 550 billion to 668 billion bbl of oil and volumes in non-OPEC fields increased from 67 billion to 109 billion bbl of oil. In terms of percent change, non-OPEC field sizes increased more than OPE C field sizes (63% versus 22%). The changes in estimated total recoverable oil volumes that occurred within three 5-year increments between 1981 and 1996 were all positive. Between 1981 and 1986, the increase in estimated total recoverable oil volume within the 186 giant oil fields was 11 billion bbl of oil; between 1986 and 1991, the increase was 120 billion bbl of oil; and between 1991 and 1996, the increase was 29 billion bbl of oil. Fields in both OPEC and non-OPEC countries followed trends of substantial reserve growth.

Abstract When the OPEC nations nationalized the producing properties of private oil companies during the early 1970s, control of production and pricing of oil shifted from the private sector to an alliance of thirteen governments in OPEC. The private companies had served as a link between the producing and consuming sectors of the world. The market was stable and adjusted to the ebb and flow of supply/demand imbalances without major price impact. When the OPEC nations were in control of pricing during the period of 1973-1979, the price of crude increased ten-fold. The resultant substantial decrease in demand and development of major new producing capacity in non-OPEC areas has caused another shift in crude pricing control. The current condition involves a larger number of governments in and out of OPEC who have surplus producing capacity. The independent actions of producing governments during this period when no unified entity is in control will determine the stability and level of prices during the remainder of this decade. The traditional factors affecting crude oil prices are such things as the current condition of balance, or imbalance, of supply and demand; the economics of business cycles and inflation; and the economic interests and strategy of the entities in control of spare producing capacity. During the upheaval in the world oil industry over the last 11 years, several new price-influencing factors have entered the picture. Some of them are the increased importance of the spot crude oil market; the advent of petroleum futures markets; the divergent social and political goals of the OPEC member nations, the United Kingdom, Norway, Mexico; and political unrest in several parts of the world. When evaluating an exploration prospect or planning a development program, it is necessary to select a finite number for a crude price in the future. Such estimates are based on the best available information about the factors identified here. A future crude price estimate can and should be adjusted over time as conditions which influence the factors change. A regular update of the price estimate can provide insight for further decisions regarding the extent or timing of an ongoing investment program where such flexibility is available.

Abstract Following World War II, crude oil could be obtained dirt cheap from the Middle East. Thus, world petroleum prices remained stable in the $2.50/barrel price range for the next quarter century (see Figure 8.1 ). One result was that the industry acquired a very complacent—even unnatural—attitude towards exploring for new oil. Consequently risk evaluation primarily drove exploration decisions. Annual exploration and new field development budgets were allocated as a relatively constant percentage of overall anticipated revenues, as were supporting research funds. In 1970, the Shah of Iran, needing additional cash flow, persuaded the Organization of Petroleum Exporting Countries (OPEC) to drive up the world price of crude oil, as mentioned in the prior chapter, from $3/barrel in 1970 to $42/barrel in 1981. All told, by means of trade embargoes and forced nationalization, OPEC leaders were able to create four major price shocks in crude oil prices between 1970 and 1986, three being upwards and one downwards (Hammer, 1975). As long as the shocks were upward, industrial geophysics flourished. Thus, by September 1981, 1084 field crews, an all-time record, were at work outside the Communist World. The SEG’s annual convention the autumn before had also set records with 12 319 attendees for a 13 800 member society (Carlile, 1981). These price shocks wherein the world price of crude increased by an order of magnitude within a decade, placed the petroleum industry under great stress. Both political leaders and consumer groups claimed:“The oil companies are at fault. This is nothing but

Abstract Exploration and production in deep water (500–2000 m [1640–6560 ft]) and ultradeep water (>2000 m [6560 ft]) have expanded greatly during the past 15 years, to the point at which they are now major components of the petroleum industry’s annual upstream budget. Most E&P activity has concentrated in only three areas of the world: the northern Gulf of Mexico, Brazil, and West Africa. Globally, deep water remains an immature frontier, with many deepwater sedimentary basins being only lightly explored. Deepwater discoveries account for less than 5% of the current worldwide total oil-equivalent resources 1 although this amount is increasing rapidly. These resources are predominantly oil and are concentrated in non-OPEC countries; thus, deep water represents an important component of the world’s future oil equation. Gas exploration in deep water is extremely immature, reflecting current infrastructure and economic limitations, but it is also destined to become a major focus in the future. Although the global deepwater play was initially restricted to a few large major companies, progressively smaller companies have become involved throughout time. Presently, even large- or medium-size companies must understand the geologic, engineering, and economic characteristics of the deepwater play. Generally, smaller companies are exploring in areas where (1) major infrastructure already exists, and consequently they are able to operate, and/or (2) they can be a partner with a limited working interest, thus limiting their financial risk while still exposing them to potentially high rewards. This chapter presents an overview of exploration and development in deepwater

Abstract Assessments of oil and gas potential provide insight into future energy use. With regard to undiscovered resources, this paper contrasts the approach of pure statistical extrapolation with an alternate approach based on geological study of petroleum systems combined with a study of the exploration history of the assessed area. With regard to reserve growth, this paper contrasts a simplified approach with an approach relying on more detailed analysis of the data. An approach to estimating undiscovered resources using pure statistical extrapolation is quick, inexpensive and requires relatively little data and few personnel. Subjective judgment is not avoided, however, in that the choice of one assessment methodology over another is, in itself, very subjective. By calculating resource estimates based on a limited number of variables, statistical extrapolation ignores critical types of information. These methodologies commonly rely on assumptions that production history curves are simplistic, despite evidence to the contrary. Pure statistical extrapolation methodologies also inappropriately apply play-level exploration trends to larger features such as basins or countries. Reserve growth, the additions to booked reserves of previously discovered fields, is quantitatively a large portion of the potential additions to oil and gas supply. Reserve growth is not just a US phenomenon, but has been demonstrated in many countries. Even estimates that, by definition, should grow 50% of the time and shrink 50% of the time, grow much more often than they shrink. Nor was it brought about merely by OPEC countries trying to increase their production quotas. Although M. King Hubbert’s work was advanced for his time, the reported success of his prediction of the year of peak US oil production has been overrated and is more than balanced by a lack of success in other predictions. The focus on the year of peak world oil production in Hubbert’s methodology distracts attention from the more important questions of what the real constraints on increased production are, and how regional distribution of resources has a great effect on economics and politics world-wide.