The impact of technology, especially information technology, is widely credited as the main driver in reducing upstream costs and enabling the E&P industry to survive the 1986 oil price collapse and the oil price volatility that has followed. But the actual concrete proof—a measurement of just how much credit technology deserves—is less clear.

To answer the crucial question—What is the role of technology in reducing costs?—we conducted a multiyear in-depth look at finding and development (F&D) costs for more than 25 companies through the 1980s and 1990s.

Note, in the following, F&D costs are calculated as exploration and development expenditures...

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