Exhibit IV Trends: How The Rapid Spread Of Independents Into Foreign Operations Affects The Global Oil Industry—And Who Are The New International Operators Traditionally, the field of foreign oil operations has been considered the preserve of a relatively limited group of large international oil companies. A fairly substantial number of small concerns, both American and British, endeavored to compete in the search for and development of oil abroad—especially during the first 30 years of the century. But most of them floundered for lack of adequate capitalization to meet the exorbitant costs involved. Some became discouraged in the face of unexpected and difficult problems. Others had their properties expropriated, or just tired of trying to cope with unreasonable political and legal handicaps. They chose to return to the less spectacular but more profitable profits obtainable from development of domestic United States reserves. Even the successful few subsequently sold their holdings to the majors. Today, however, there is an entirely unprecedented interest and activity abroad by independent American operators—and, to a lesser extent, by others from such countries as Belgium, France, Germany, Italy, and even Japan. In each instance, the stimulation has been the relatively poor discovery rates at home—-and the prospect of strengthening their competitive status by discovery and development of relatively low-cost crude supplies in more prolific foreign oil lands. While the cost of overseas operations today is greater than ever, the relative risk has been reduced substantially by improved oil exploration technology. Furthermore, the investment has been made more attractive by the faster rate at which positive results are obtained with modern survey techniques and high-speed portable drilling equipment. This reduces the time factor on dead-rent payments. The economy of house-trailer camps and mobile workshop is another redeeming feature of the new era, whereas in the old days little could be salvaged from an unsuccessful venture. This entry of new blood into the international oil fraternity is becoming recognized as a healthy trend by traditionalists as well as the more liberal-minded, although some have viewed the development with trepidation. There is little need for undue alarm on the part of the vested interests, however, because predictable growth of oil consumption indicates the future demand for i>etroleum will be so great as to leave plenty of scope for expansion by all. A British Petroleum Co., Ltd., official, D. C. Ion (exploration manager of BP's Canadian subsidiary. Triad Oil Co., Ltd.), not long ago called the attention of the Institute of Petroleum in England to the important expansion of American oil interests outside of the United States, not only by majors but by many independents. He said that the activity is important because— (1) These independents do not carry the cartel stigma by which the majors have been labeled. (2) There will inevitably result an added awareness of the responsible role of the petroleum industry in underdeveloped nations. (3) The necessary role of wildcatters will progressively be taken over by independents <as is the case in the United States of America) while the majors will develop their concessions. Global oil output by producing regions Mr. Ion foresees a virtual doubling of free world demand in 1965 at 26 million barrels per day (11,400,000 barrels per day in the United States alone) — outstripping last year's optimistic forecast of Chase Manhattan Bank by 1,200,000 barrels per day. He sees demand climbing to 40,700,000 barrels per day (15 million barrels per day in the United States) by 1975. Assuming political conditions are no less stable in the future than they have been in recent years, his forecast as to the geographical pattern that production growth is likely to follow in coming decades conforms to the general concensus of industry economists. Mr. Ion anticipates that by 197") Middle Eastern output will reach almost 3 times the present United Stntes rate of production, compared currently with little more than half the American level. This would require the drilling of 3,200 to 7,000 additional wells in that area during the next 20 years, at the rate of perhaps about 2 million feet of hole yearly. Second most-important area for expansion would be the Caribbean region of South America, while Canada would continue to play a part of growing significance. He anticipated United States output would level off in 1965 at a plateau of 9 million barrels per day, less than 50 percent more than current levels. 223 UNITED STATES OPERATORS NOW ACTIVE IN 51 COUNTRIES A new worldwide survey being developed by International Oilman reveals an astoundingly active and broadened interest in overseas oil operations by a lengthening list of United States independent oilmen. Returns, which are still coming in, reveal already that some 223 independent oil operators are engaged in, or actively launching, exploration and development programs in 51 countries outside of the United States. Latin American countries are attracting the largest following among the independents, followed by the Middle East, other North America, West Europe and the Far East. Approximately H8 percent of all independents represented in these worldwide operations are relatively small operators, while 12 percent are in the category of semimajor companies. The survey does not include the major, integrated companies. Until a few years ago, international oil operations were confined primarily to a handful of large, integrated oil companies. Today, however, the capital risks involved in the search for oil and gas in every part of the world are eagerly being shared by the independents as well ns the so-called majors. Underlying this anomaly is the growing conviction of many governments that the encouragement of private capital offers the most satisfactory means of converting untapped natural resources into tangible assets. Revisions of petroleum laws, which previously discouraged investments of outside, private capital, are opening new international horizons that spell economic and social progress for millions of people in many parts of the world. The entry of United States independent oilmen into many other countries may perhaps be a golden key that will open many more doors to improved international relationships. Furthermore, these changing developments may bring about a more universal understanding of the fundamental principles of democracy and freedom in the pursuit of private initiative and individual enterprise. The accompanying list of United States oil operators, and the respective countries in which they arc active, is presented here to show bow extensively independent oilmen are engaging in international operations. Names of far-off countries, that were legendary a few years ago, are today becoming as familiar to independent oil operators ns Texas. Louisiana, and California. Prospective oil lands in the frozen wastes of Alaska, the deserts of the Middle East, or the steaming jungles of Central and South America, are identified with names of United States oil operators. United States independents are no longer strangers in the capitals of Europe, South America, the Middle East, or even in the Far East. As new concessions are offered in various countries, more and more independent oil operators are reportedly successful in obtaining such rights. Canada has at least 62 representative United States independents, followed by Venezuela with 55, Cuba with 24. Guatemala and Panama with 18 each, Honduras and Iran with 17 each, Bolivia with 13, and Colombia and the neutral '■one with 11 each. Independent oil operators are also reported active in Alaska iind Mexico, and have entered 19 Central and South American countries, 22 countries of the Middle East and Africa, 4 west European countries and 3 Far Eastern areas. Quite a few small as well as large independents have extended their interests and investments to embrace several countries, some of which are widely separated geographically. Los Nietos Co., Los Angeles, Calif.—Cnnada More than 65 percent of the world's oil production is presently controlled by United States oil interests, both major companies and independent operators. As the benefits of oil discovery and development are realized by a growing number of nations, there appears to be more universal approval of the American system of free enterprise and the encouragement of private capital investments. This is indeed a hopeful sign, which must ultimately improve the economic and social welfare of a growing number of the world's underprivileged people. Independent Oil, Companies J. S. Abercrombie, Houston, Tex.—Mexico, Iran, neutral zone Aluminum Corporation of America, Pittsburgh, Pa.—Panama American Greek Oil Co., St. Louis, Mo.—Greece. American Independent Oil Co., San Francisco, Calif.—Mexico, Venezuela, Iran, neutral zone American Maracaibo Oil Co., New York, N. Y.—Canada, Colombia, Honduras, Venezuela Barnwell Offshore, Inc., Shreveport, La.—Honduras J. T. Buckley Estate, Houston, Tex.—Canada, Ecuador, Guatemala Colorado Oil & Gas Corp., Colorado Springs, Colo.—Alaska, Canada Climax Molybdenum Co., New York. N. Y.—Canada Ralph K. Davies, San Francisco, Calif.—Iran, Mexico, neutral zone Deep Rock Oil Co., Chicago, 111.—Canada, Iran, Mexico, neutral zone DeGolyer & MacXaughton, Dallas, Tex.—Spain Delhi-Taylor Oil Co., Dallas, Tex.—Texas—Canada, Panama H. L. Dillon and Co., New York, N. Y.—Syria Douglas Oil Co., Los Angeles, Calif.—Peru W. B. Duce, Beverly Hills, Calif.—Cuba Drilling & Exploration Co., Dallas, Tex.—Canada. Bolivia, France El Paso Natural Gas Co.. El Paso, Tex.—Venezuela Empire Trust Co., New York, N. Y.—Canada Esperanza Petroleum Corp., New York—Venezuela Ralph E. Fair, Inc., San Antonio, Tex.—Egypt Falcon Petroleum Corp., Houston, Tex.—Venezuela Fargo Oils, Inc., Dallas, Tex.—Canada Fay, Albert Bell, Houston, Tex.—Dominican Republic D. D. Feldman, Dallas, Tex.—France, Turkey E. E. Fogelson, Dallas, Tex.—Spain Lester Foran and Lynn S. Holmes, Corpus Christi, Tex.—Honduras Forest Oil Corp., Bradford, Pa.—Colombia, Cyprus Franco Wyoming Oil Co., Cheyenne, Wyo.—France Frankfort Oil Co.—Alaska General American Oil Co.. Dallas. Tex.—Canada, Spain. West Africa Georeseareh, Inc., Dallas, Tex.—Honduras Getty Oil Co., Los Angeles, Calif.—Iran. Kuwait neutral zone, Canada Gilliland Oil Co., Los Angeles, Calif.—Peru, Turkey Globe Oil & Gas Corp., Owensboro, Ky.—Mexico Globe Oil & Refining Co., Wichita. Kans.—Canada, Mexico, Iran Haddock Oil Co., Los Angeles, Calif.—Venezuela Hancock Oil Company of California, Long Beach, Calif.—Bolivia, Venezuela, Iran, Kuwait neutral zone France Nelson Bunker Hunt, Dallas, Tex.—Libya Husky Oil Co., Cody, Wyo.—Canada, Guatemala, Israel, Turkey Harvey H. Hutchins, Jackson, Miss.—Jordan Hydroil of Houston. Houston, Tex.—Panama Illinois-Wyoming Oil Co., Chicago, III.—Canada Independent Exploration Co., Los Angeles, Calif.—Mexico Iniskin Unit Operators—Canada International Oil & Metals Corp., San Francisco, Calif.—Panama International Oil & Minerals Corp.. Seattle, Wash.—Panama International Products Corp., New York, N. Y'.—Bolivia Israel-Mediterranean Petroleum—Canada, Ecuador, Guatemala, Israel Story Jones, Houston, Tex.—Guatemala Jupiter Oils, Ltd., New York, N. Y.—Canada Justiss-Mears Oil Co., Dallas, Tex.—Honduras Keljikan Commercial Corp., New York, N. Y.—Bolivia Kerr-McGee Oil Industries, Inc., Oklahoma City. Okla.—Cuba. Panama Kewanee Oil Co., Philadelphia, Pa.—Cuba Kimberley Oil Exploration Syndicate, Philadelphia, Pa.—Australia King-Mill Oil Co.—Venezuela Kirby Production Co., Houston, Tex.—Canada, Venezuela Kirkwood Drilling Co., Dallas, Tex.—Haiti I-apidoth-Israel Petroleum Co.. Ltd.. New York. N. Y.—Israel Lario Oil& Gas Co., Wichita, Kans.—Mexico, Iran, Neutral Zone Lee Oil Co., Tulsa, Okla.—Cuba Lehman Corp.. New York, N. Y.—Canada Lion Oil Co., El Dorado, Ark.—Venezuela, Sicily, Spain MacMillan Petroleum Co., Los Angeles, Calif.—Sicily Maracaibo Oil Exploration Co., Dallas, Tex.—Venezuela Marmora Petroleum Corp., Cody, Wyo.—Turkey Marts Oil Co., Bartlesville, Okla — Surinam C. H. Maury—Venezuela Mayflower Properties, Inc., (Societe De Forage Mayflower Texas Pour Le Maroc) —Morocco McBride Oil & Gas Corp., San Antonio, Tex.—British Guiana McCarty & Coleman, Wichita Falls, Tex.—Canada David C. McCord, Dallas, Tex.—Honduras McDermott, J. Ray & Co., Houston, Tex.—Nicaragua McRae Oil & Gas Corp., Denver, Colo.—Honduras John W. Meeom, Houston, Tex.—Colombia, Haiti, Honduras J. W. MenHall, MenHall Exploration Co., Benton, 111.—Syria Middle Petroleum Co., Houston, Tex.—Israel Mountain Valley Oil Corp., Denver, Colo.—Cuba Murmac Oil Co., Dallas, Tex.—Venezuela Murphy Corp.—Venezuela Xadel and Gussman, Tulsa, Okla.—Israel National Petroleum Corporation of Cuba—Cuba Newmont Mining Corp., New York, N. Y.—Algeria Northern Natural Gas Co., Omaha, Neb.—Canada Oil & Gas Property Management, Inc., Dallas, Tex.—Honduras, Yemen Pantepec Oil, C. A., Houston, Tex.—Ecuador Edwin W. Pauley, Los Angeles, Calif.—Dominican Republic, Mexico, Jordan I'etrolex of Panama Corp., Houston, Tex.—Panama Placid Oil Co., Shreveport, La.—Canada Plymouth Oil Co., Pittsburgh, Pa.—Guatemala, West Africa Pyramid Oil Co., New York, N. Y.—Israel Reiter-Foster Oil Co., New York, N. Y.—Cuba, Venezuela Rimrock Tidelands, Inc., Shreveport, La.—Israel San Jacinto Petroleum Corp., Houston, Tex.—Venezuela, Iran San Jose Oil Co.—Philippines San Juan Exploration Co., Dallas, Tex.—Canada Santa Fe Oil Co., Miami, Fla.—Cuba Santiago Petroleum Corp., Houston, Tex.—Canada, Ecuador, Guatemala Scurry-Rainbow Oil, Ltd., Cleveland, Ohio—Canada Seaboard Oil Co., Dallas, Tex.—Canada, Venezuela O. R. Seagraves, Dallas, Tex.—Honduras Seismograph Service Corp., Tulsa, Okla.—Bolivia Sharpies Oil Co., Denver, Colo.—Mexico, Venezuela Siboney-Caribbean Petroleum Co., Tulsa, Okla.—Cuba C. J. Simpson—Cuba Skiles Oil Corp., Mt. Carmel, 111.—Peru. Sloane Exploration Co., Houston, Tex.—Guatemala L. Sonneborn & Sons. New York, N. Y.—Israel Southern California Petroleum Corp., Los Angeles, Calif.—Venezuela, Egypt Southern Products Co., Fort Worth, Tex.—Canada Southland Royalty Co., Fort Worth, Tex.—Panama Star Oil Co., Dallas, Tex.—Venezuela Sullivan & Garnett, Corpus Christi, Tex.—Honduras Sunray Mid-Continent Petroleum Corp., Tulsa, Okla.—Alaska, Canada, Venezuela, Iran Sunset International, Los Angeles, Calif.—Canada Talon Petroleum Co., Houston, Tex.—Venezuela Tennessee Gas Transmission Co., Houston, Tex.—Canada, Bolivia, Venezuela Texas Alberta Oil Corp., Midland, Tex.—Canada Texas American Oil Co., Midland, Tex.—Panama Texas Calgary Co., Abilene, Tex.—Canada Texas Gulf Producing Co., Houston, Tex.—Ecuador, Peru, Venezuela, Libya Texota Oil Co.—Alaska, Liberia Transcontinental Oil Corp., Dallas, Tex.—Cuba Robert W. Tyson, Jackson, Miss.—Jordan |