Smyrna times., 1947-07-10

panies, for example, Will spend
close to One Billion Dollars in the
production division alo;G in the
two-ysar period, and the totai
az cunt spent by the cnt.re indus
Try in this category pecbably VIII
scco, mt for around 45 per cent OF
the overall capital outlay
OF primary Importance in pro-
ductiua will be the search for mex
oil reserves through exploratory
o."l etions. where costs have sho yn
a three-fold increase as compared
with 10 years ago because of:
ID The necessity for deeper
drilling
(2) The need to drill in more
remote places
but in spite of higher costs the in
dustry has continued its outlays
for such exploratory development,
and in fact, these will be at record
levels in the current year. In the
first five months of this year they
ran Is percent ahead of the pre-
vious peak in 1916, when a total of
4,51S exploratory wells were drill
ed.
Total we'll drillings of all kinds
by the industry this year will ap-
proximate $4,000, including those
for exploratory purposes. This is
new all-time peak, which would
be exceeded if more material were
available. Total wells, on the bas-
is of figures for the year to May
31st, We're running So percent
ahead of the same period in 1916.
In producing oil, conservation
measures, sponsored and support
ed by the petroleum industry, also
play an important role in the high
er capital investments which are
contemplated. Such conservation,
which is designed to prevent waste,
and increase recoveries from given
fields, has approximately doubled
the recovery of oil from wells as
compared whit wide open pr Lc-
tion in the early 20's, but has re-
quired greater capital expendi-
lures.
In the refining division of the i'll
dustry, close to 80 percent of the
total capital outlay during 1947
and 1948 viii be made. The osts
of new construction in this divisi on
are about three times those IF
1886, and seven times those :
1916. Modern equipment includes
highly complicated and specialized
units such as, catalytic crackin 3
plants which have made important
contributions to the yield and quail
ity of gasoline; po1ymerizat,on
plants which make possible many
thousands of barrels daily of high
quality gasoline from refinery gas
es which, in the past, were vast
ed or burned as a fuel; alkylation
units, a relative recent Develop
ment, which convert other gaseous
constituents into gasoline.
AS the President of one COM
pany recently stated, anent, the
progressive development in refin-
ing techniques; "the more wonders
our technologists perform, the
more dollars are required to put
their ideas into operation. But in
most instances the higher costs
have been offset by better quality
and the more important products,
and prices have been maintained at
reasonable levels.
A recent survey discloses that
the country's refining industry,
which comprises close to 500 refin-
cries scattered through SO of the
4S states, has already announced
plans to initiate construction with
in the next two years, of 407, 900
barrels day of new capacity. Of
this total 100000 barrels will rep
resent replacement of obsolete or
worn out refinery units while the
remaining 307, 900 barrels a day
will represent new and additional
refining capacity. Announcement
of other new plans is expected in
the not distant future.
While the industry has made
substantial capital investments
during the war in facilities for the
manufacture of special products