Post-war expansion: The tables are turned

The Post-War era brought rising oil production to both the U.S. and countries worldwide. As economies strengthened, manufacturers improved facilities, new prospective areas were opened, and foreign oil producers gained more autonomy and strength. World oil production increased from 10.4 MMbpd in 1950, to nearly 42 MMbpd by 1969. This happened, despite an avalanche of nations gaining independence from former colonial rulers, increased tensions between the East and West, and the beginning of fundamentalist terrorism.

In Africa, dozens of nations were able to break free of their European rulers, set up governments, and be admitted to the United Nations. Most of these had been prior subjects of France, with a sampling having been controlled by Britain, the Netherlands and Italy. A few (Iran, Indonesia and Brazil) went a step further, nationalizing assets held by foreign multinational companies, and laying the groundwork for many more such actions.

In the Middle East, where there has always been a high risk for potential conflict, oil deliveries were then subject to interruptions from embargoes or military action, i.e., the first Arab oil embargo and the Suez Crisis. Fortunately for the West, it was not as heavily dependent on Middle Eastern oil as it would be in another few years.

Not only did the Post-War era bring an increase in production, it also saw significant advancement in technology, as well as the formation of several major players in the oil and gas industry. For instance, Brazil’s Petrobras and Italy’s Eni were both founded in 1953.

Additionally, there were several events that impacted the future of the industry. Saudi Arabia put Ghawar field into production in 1951; China discovered Daqing field in the northern basin of the Songhua and Liao Rivers in 1959; Phillips Petroleum Co. discovered oil at Ekofisk in the Norwegian North Sea in 1969; and a significant increase in production came from Texas in 1967, in an effort to compensate for the Arab oil embargo.

The industry made strides, when it came to technology during this era. The first jackup drilling rig was built by Delong Corp. in 1954, the first purpose-built pipelay vessel went into use by Brown & Root in 1958, capable of laying 800 m of pipe per day.

The crowning event of the 1960s era was the formation of the Organization of Oil Exporting Countries (OPEC). Although originally formed to obtain better prices for the members’ oil, OPEC has gained substantial control of world oil pricing mechanisms, and often uses its strength to monopolize the market and financially batter its Western competitors.