Oil and gas exploration and development in oil importing developing countries

Technical Report · Sun Dec 01 04:00:00 EST 1985

DOI:https://doi.org/10.2172/6413467· OSTI ID:6413467

Perlack, R. D.

The rapid rise in oil prices and supply shortfalls during the 1970s did not bring a concomitant increase in oil and gas exploration and development to the oil importing developing countries (OIDCs). To be sure, total exploratory activity in the OIDCs, as measured by the number of seismic party-months and the number of exploratory wells drilled, did in fact increase in the 1970s, but relative to the rest of the world exploratory activity actually declined. The consensus among many investigators indicates that exploration and development in OIDCs was inhibited by a combination of factors. First, the geologic prospects for oil and gas were not conductive to exploration. The high cost, small-sized fields that are characteristic of OIDCs limit profit potential, increases risk, and provides for limited prospects of exportable surpluses, which are necessary to supply downstream operations. Second, the lack of infrastructure in many nonpetroleum producing OIDCs deterred oil and gas exploration. Third, restrictive contracts provided for an insufficient amount of risk sharing to attract foreign capital. Fourth, host government taxation policies discriminated against high cost, small-sized fields. Fifth, political risk and government instability did not encourage foreign investment, considering the usual 10- to 15-year petroleum exploration and development period. Finally, US taxation policies following the oil embargo were designed to encourage domestic exploration and development. The 1980s have seen a substantial decline in real prices for petroleum, high interest rates, a developing country debt crisis, and a worldwide economic recession. These conditions are likely to cause an absolute decline in exploratory activity in OIDCs that are considered high risk, and where the probability of finding oil and gas is low. This trend is already evident in the recent exploratory and development data. 15 refs., 10 figs., 3 tabs.

• Research Organization: Oak Ridge National Lab., TN (USA)
• DOE Contract Number: AC05-84OR21400
• OSTI ID: 6413467
• Report Number(s): ORNL/TM-9769; ON: DE86004655
• Country of Publication: United States
• Language: English

Related Subjects

02 PETROLEUM
020700* -- Petroleum-- Economics
Industrial
& Business Aspects
03 NATURAL GAS
030000 -- Natural Gas
29 ENERGY PLANNING, POLICY, AND ECONOMY
294002 -- Energy Planning & Policy-- Petroleum
294003 -- Energy Planning & Policy-- Natural Gas
COMPILED DATA
DATA
DEVELOPING COUNTRIES
DRILLING
ENERGY SOURCES
EXPLOITATION
EXPLORATION
EXPLORATORY WELLS
FLUIDS
FOSSIL FUELS
FUEL GAS
FUELS
GAS FUELS
GASES
GEOLOGIC DEPOSITS
INFORMATION
MINERAL RESOURCES
NATURAL GAS
NATURAL GAS DEPOSITS
PETROLEUM
PETROLEUM DEPOSITS
PRODUCTION
RESERVES
RESOURCE DEVELOPMENT
RESOURCES
WELL COMPLETION
WELL DRILLING
WELLS