Lethbridge Herald, The (Newspaper) - August 12, 1974, Lethbridge, Alberta
Monday, August LETHBRIDGE Canada is now feeing an era of ftough'oil. So far as finding crude oil is concerned, the 'good old days' are over. Today most of our un- developed Canadian oil reserves are in remote areas of the Arctic, locked in the Athabaska tar sands, or are far out under the sea off our coast- lines, requiring multimillion dollar costs to de- velop. That's why we say that Canada is now into the era of tough' oil. Tough to find, expensive to get. The bright side to this picture is the fact that Canada does have sufficient reserves to see us through for many years to come. The trick is to get to it and get it out. And that takes time, technology and money. By way of example, the petroleum industry has already spent more than four billion dollars in the last 10 years in the search for oil reserves. The result of this search is that knowledgeable estimates can be made. For- tunately, these indicate that we have in Canada potential oil reserves on a scale comparable to those of Arabia! But it is going to take a great deal of money to get at these new reserves, and so keep Canada self-sufficient in billion dollars in ike next 10 years! Some from Some of the money that is needed must come from earned profits of the oil companies. In spite of the erroneous statements that people have made about oil industry profits being "too this is not so. Last year the average return on capital employed by the four largest inte- grated oil companies in Canada amounted to only Considering the investment needs of our comparing with the level of return one can get from investments in risky industries and even from no-risk government average return is not or even sufficient. Our Company on average realizes net earnings of not much more than one cent a gal- lon on all the petroleum products we sell. It does seem to us that a cent a gallon is a reasonable amount for manufacturing the many different petroleum products required, and making them conveniently available to our cus- tomers. We hope you agree. It is that profits have to be made or a company cannot stay in business. Companies that, only make losses are not around long. The best "job inWfahce" our their families is the knowledge that they work for a company that makes a profit. You need profitable companies to serve you and to create employment. Most, from new investment! Canada's oil industry needs many new in- vestors if we are to continue to spend vast sums exploring for oil in hard-to-reach places, and de- veloping both the technology to get at it and the equipment to get it out to where it is needed. What is required is a fair return on money invested and an opportunity for growth in rela- tion to the amount of risk. So, it is very important to Canadians that governmental policies encour- age massive investment of risk capital. Tough or not it CAN be done! All this is not going to be easy, but with the right incentives and public policies that recognize the size and difficulties of the job ahead, the oil industry can continue to meet Canada's future energy needs. Even though, like we said, we are now in an era of 'tough' oil. Texaco Canada Limited We're working to keep yourTrust.