The Prize: The Epic Quest for Oil, Money, and Power

by Daniel Yergin

Moreover, the flow of investment was redirected in a very substantial way. The number-one commandment was to avoid, at all costs, nationalism in the Third World. In any event, exploration in most of the OPEC countries was fore-closed because of nationalization, and there was a rather strong presupposition that, if a company had success in other developing countries, the fruits would be seized before they could be ingested, leaving only small pieces and bits for the company. So the companies redirected their exploration spending, to the degree possible, to the industrial countries of the Western world: to the United States, despite a growing pessimism about its oil potential, to Canada, and to the British and Norwegian sectors of the North Sea. In 1975, Gulf undertook a complete review of its global budget. Every investment dollar that was not nailed down and committed was quietly yanked out of the Third World and brought back to North America and the North Sea. By 1976, Royal Dutch/Shell was concentrating 80 percent of its worldwide, non-U.S. production expenditures in the North Sea. “After 1973 and nationalization, you had to go hunt your rabbits in a different field,” recalled an Exxon executive, “and we went to places where we could still obtain equity interests, ownership, in oil.”