MR TEAGLE DISCUSSES FUTURE OF OIL INDUSTRY

MR TEAGLE DISCUSSES FUTURE OF OIL INDUSTRY

Apropos of the celebration of the fiftieth anniversary of the chartering of the original Standard Oil Company, Mr. Walter C. Teagle, President of the Standard Oil Co. (New Jersey), in speaking of the future of the oil business, said:

“Oil is an essential industry—essential to the every-day life of the civilized world. It is not a product for which a demand must be created. The demand exists, and one of our chief concerns is how to supply not alone the present but the very large increase which the future will require.

“New uses are continually being found for petroleum products. We know that the percentage of growth of the oil industry during the past thirty years has averaged 8.54 per cent, per annum. This may not seem a large figure by itself, but when one applies it to the quantities being consumed today one realizes that it does not require a statistician to appreciate the magnitude of the problem of supply for the future.

“During the past year the United States has produced a little over 1,000,000 barrels a day of crude petroleum, a total of 376,000,000 barrels, according to the Government’s preliminary figures. In addition to this, there has been imported from Mexico about 60,000,000 barrels.

“The petroleum industry in this country, therefore, used during the past year a total of approximately 436,000,000 barrels. Apply 8.54 per cent, of increase and one has 37,235,000 barrels addition required during the present year in order to meet the inrceased demand based on the actual figures of past experience.

“If this percentage of increase continues—and there is no reason to doubt that it will—then five years from now (in 1925) the petroleum industry in this country will need approximately 650,000,000 barrels, or an increase of 220,000,000 barrels as compared with 1919.

“These figures give rise to a natural query as to where this enormous quantity of crude oil is to come from.

“We have endeavored to do our share in providing the increased quantities of oil called for by the needs of the industry, for you may rest assured that every man in the producing end of the Standard Oil Company (New Jersey) is keenly alive to the pressing necessity of a large increased output. It is no longer safe to trust to a large extent to the work of ‘wildcatters’ in bringing new sources into production.

“This company has undertaken investigation in fields where prospects of immediate return are not sufficiently good to induce ‘wild-catters,’ or small companies, to assume the risks. In the year 1919 the amount of crude oil brought out by our subsidiaries and associated companies showed an increase of a little better than one hundred per cent, over their production in the previous year.

“This gain is largely due (1) to the successful operations of the Transcontinental (The Standard Oil subsidiary operating in Mexico; (2) to the acquisition of a half-interest in the Humble Oil and Refining Company, who have, since the Standard Oil Company became associated with them, developed a very considerable production in the Ranger district, as well as materially increasing their production in the Texas Coastal pools.

“So much for 1919; now about 1920. The prospects are good with the exception of Mexico, where the situation is chaotic.

“In the new Homer pool in Louisiana—the Standard Oil Company of Louisiana has been active in acquiring a large acreage. It may be months before we will know just what the Louisiana Company’s daily production will be, owing entirely to the lack of pine lines and adequate storage facilities. At the present time they are running about 25,000,000 barrels a day from Homer, and have shut in, awaiting the completion of additional pipe lines six wells, each one of which is estimated to have a potention production of from 10,000 to 15,000 barrels a day.

“At Hewitt, in Southern Oklahoma, a few miles from Healdton, a promising pool is being opened up. Both the Carter and Humble have considerable acreage there.

“In the exploration and development of production outside the United States, the producing department is carrying on an active campaign. The present policy of the Standard Oil Company is to be interested in every producing area, no matter in what country it is situated, provided interests can be secured on a basis that would seem to hold out the possibilities of success, and where the lives and property of American citizens will be protected.

“This company is not only operating in Roumania, but is also investigating prospective oil producing properties elsewhere in Europe.

“In South America we have oil men and geologists working in several countries and securing such tracts as in their judgment might warrant actual development work. The International Petroleum Company, Limited, a Standard Oil subsidiary, is arranging for an increase of one hundred per cent, in their drilling compaign, and the testing out of a further considerable portion of their large acreage in the South American field.”

“Oildom” for February.

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