EFFECTS OF AN INCREASING ROLE FOR INDEPENDENTS ON PETROLEUM RESOURCE DEVELOPMENT IN THE GULF-OF-MEXICO OCS REGION

Major oil and gas companies are shifting their exploration and product ion (E and P) investment from the United Stares to foreign countries. As they do so, smaller companies, ''independents,'' are expected to pl ay a more prominent role in domestic E and P. Within bath industry and government circles the apprehension is widespread that such a shift f rom the majors to the independents will cause domestic oil and gas res ources to be developed less aggressively and less efficiently. This pa per attempts to discern and quantify differences in firm behavior and success among firms of different sizes (majors, large and small indepe ndents) operating on the Gulf of Mexico OCS region. Contrary to conven tional thinking, descriptive analysis of data on drilling effort and o utcomes on the Gulf of Mexico indicates independents have been both mo re aggressive and successful than the majors in exploration while the majors have been only moderately more successful than independents in development drilling.