Papers - - Production - Domestic - Developments in the California Oil Industry during the Year 1933

Although the year 1933 was a period of uncertainty, considerable new development was initiated, with a high percentage of favorable results, for owing to financial conditions only projects of merit were proposed and developed. Unfavorable marketing conditions caused severe financial losses to refinery and sales departments of nearly all companies during the first half of the year. In anticipation of stabilized Government control, earnings were generally favorable during the third quarter but failure of the Government to take legal action against violators of the proration orders, and lack of agreement on a definite plan of curtailment, resulted in considerable overproduction and demoralization of the market structure during most of the final quarter. However, toward the close of the year Government action against violators of the Oil Code had a tendency to decrease overproduction materially and give the market a firmer tone. As a whole, the price structure of crude oil was maintained at a high level during the year; in fact, at a much higher level than the price of refinery products warranted. At no time during the year was production within 10,000 bbl. daily of the state allotment, overproduction of crude reaching a peak of 70,000 bbl. on Sept. 7, average daily average for the year being about 27,000 barrels. Numerous plans for equitable curtailment were prepared and tested during the year, none of which fully solved the many and intricate problems faced by operators who were in most cases willing to curtail if they could feel that cooperation was being practiced by their neighbors. Outstanding events in California oildom during the period under discussion may be classified under the following headings: 1. New discoveries. (a) New development in proven areas. (b) Deeper zones in settled pools. 2. Unproductive wildcat operations. 3. Whipstocking practice and procedure. 4. Progress of unit and orderly plans of development.