Many new investors are being lured into the booming oil and gas exploration business by prospects of returns exceeding 20 percent. A recent Arthur D. Little Inc. study on US oil and gas exploration reports that investors outside the industry supplied $9.3 billion in 1980, or more than one-fifth of the $42.3 billion spent on oil and gas drilling.
Many of the major oil companies have redirected the emphasis of their exploration from foreign to domestic areas, the study's co-author, Richard Messing, points out. Nevertheless, they are being matched, particularly onshore , by the aggressive efforts of independent oil companies, which drilled 87 percent of the total wells in 1980.
The independents accounted for 56 percent of expenditures on both exploration and development in 1979.
The report documents increasing participation by industrial, utility, and investment companies in the oil exploration and production business. It attributes this activity to concern over rising costs and availability of en ergy, as well as potentially attractive returns.