ABSTRACT
From a market structure point of view, oil prices are directly related to the cost of exploration and development. However, rising oil prices in the 1970s stimulated more investment in exploration, even in relatively high cost areas. This can be seen from Table 2.2, which shows free world total exploratory well completions. It is noted that the number of wells has almost doubled for most regions, except Africa and Middle East, over the period 1970-82. However, as oil prices decline, afterward, the total number of exploratory well completions began to fall.
