Trends in exploration expenditures

The American Petroleum Institute and the Department of Energy have contributed to the U.S. petroleum industry estimates of expenditures in exploration. The estimates of expenditures were for scattered years until 1959; from that year forward a continuous record is available. The petroleum industry in the United States is now spending about $10 billion per year in the search for new oil and gas fields. In 1986 dollars, this level is about that of the 1960s, a period of reduced exploratory effort. In the 1960s and 1970s the industry spent about 25% of its revenue in exploration. In the 1980s the percentage spent in exploration has decreased; in the period 1985 to 1988 the percent of revenue spent in exploring for new oil and gas fields was at or about 15% - a significantly lower level from past history. Levels of exploratory overhead, previously at the level of 10% of revenue, have been about 20% in the 1985 to 1988 period. Expenditure levels tell much about the reinvestment rate of the industry and the optimism or pessimism of those who approve funds for the search for new oil and gas fields