The Oil Price and Seismic Exploration: A Roller Coaster Ride

In any debate a historical perspective is useful since it tells us where we were and how we got here. It does not necessarily enable predicting the future. The ever changing oil price and the ups and downs of seismic exploration are ideal examples for looking into the past and guessing about the future.

In June 2014 the oil price began its plunge from $107 to $50 by December. The slump continued through 2015 to $38 in August and $33 in January 2016. This resulted in dramatically reduced exploration activity and increased corporate downsizing, as usual. Such collapses are not new. Since 1980 there have been three others which have had similar devastating effects on the Canadian oil and gas industry. In each instance seismic exploration has been amongst the first tier of budget cuts.

There have also been two global “oil crises” in the latter part of the twentieth century. In 1973 the price escalated rapidly when it was controlled by OPEC in an initial attempt to establish a market price, and it further escalated in 1979 with the Iran-Iraq war. Canada was not yet self- sufficient, oil appeared to be headed to $100/bbl and an anxious Liberal Government introduced the ill-fated National Energy Program (NEP) in 1980.

This presentation will review the history of the oil price from 1860 till the present and identify some of the key controlling factors. In addition, the focus will be the oil industry in western Canada and the impact of the ever changing oil price. Several historic seismic milestones will be examined in the context of the oil price of the day. The finale will include a few seismic musings in hindsight and attempt the impossible, namely, make some predictions about the future.