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Strategic Responses to Advances in Seismic Technology in the Petroleum Industry

Author

Listed:
  • Harry Bloch
  • Jo Voola

Abstract

The world petroleum industry has been revolutionized by a change in exploration technology from two-dimensional (2D) to three-dimensional (3D) seismic mapping. One of the main effects of the newer technology has been to decrease the cost of finding oil, particularly in offshore fields. We examine the impact of the new technology on the exploration activities of the major international petroleum companies and find that they have aggressively increased petroleum exploration expenditures. As a result, we suggest that the companies have achieved a prisoner's dilemma outcome, where they are collectively worse off in terms of profits, providing a possible explanation for the recent wave of large-scale mergers in the industry.

Suggested Citation

  • Harry Bloch & Jo Voola, 2004. "Strategic Responses to Advances in Seismic Technology in the Petroleum Industry," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 11(1), pages 27-36.
    • Handle: RePEc:taf:ijecbs:v:11:y:2004:i:1:p:27-36
    DOI: 10.1080/1357151032000172219
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    References listed on IDEAS

    as
    1. Bohi, Douglas R., 1998. "Changing Productivity in U.S. Petroleum Exploration and Development," Discussion Papers 10902, Resources for the Future.
    2. Bohi, Douglas, 1998. "Changing Productivity in U.S. Petroleum Exploration and Development," RFF Working Paper Series dp-98-38, Resources for the Future.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Petroleum Industry; Exploration Expenditures; Oligopoly; Strategic Behaviour; JEL Classifications: l71; O32;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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