OVERVIEW

The changes in the resource base and in the ownership of it, which have been discussed in earlier pages, have had a profound effect upon the industry. It is in a state of flux and transition: and the future is likely to call for even more radical adjustments. The evolution affects the size of the corporate vehicles, and how they conduct their business. It mirrors the wider political and market changes that are influencing the World more rapidly than we perceive. I have already reviewed the general historical trends, and will now concentrate more on the evolving corporate structure.

Much of the industry s early experience was in the freewheeling environment of the United States, which was characterized by a large number of small exploration companies, often family controlled. Drilling was being pursued throughout the oil lands, and a new find, whether made by luck or skill, transformed the company that made it. Having made the discovery, it had to somehow find the capital to develop it, often at times of weak oil price. The situation was conducive to the merger, as the larger established companies swallowed up their smaller brethren. The larger companies did themselves engage in exploration, but it seems that they mainly grew by acquisition.

The great Rockefeller empire was the first and perhaps the greatest manifestation of this trend. The acquisitions were commonly achieved by often hostile share purchase, in which the critical step was to obtain a controlling interest. The original owners often survived as...