Abstract
Ph.D. (Economic Sciences)
The international oil industry has always been subject to significant changes throughout the years, mainly as a result of changes in the environment, government policies, the world economy and a developing technology. Since the turn of the century, however, no changes have been as fundamental as the events of 1973. The international oil industry found itself in a very short period of time, with the following
changes: The loss of production resources to the industry's previous host countries. A significant increase in the price of the products the industry handle. Increased interference by the governments of the countries in which the industry markets its products. No growth. A permanent change in the mix of petroleum products required by the market. The oil industry reacted to these changes in the following ways: Large proportions of refining networks were closed and large amounts of money were spent on additional cracking facilities for the remainder of the industry's networks. Organisational changes were introduced, with the objective of removing surplus infra-structure from a shrinking industry. iii Attention was given to other forms of energy.
Whatever the reaction had been, the mere fact that refining capacity had to be reduced, and large oil tankers scrapped, suggests a lack of proper planning during the period preceding the problems of 1973. During the late fifties and sixties, when there was a steady growth in the world economy and oil prices remained static, planning ahead became relatively simple, and the oil industry planners slipped into the illusion that
none of the upheave1s of history would be repeated. The signals were clearly there, but were totally ignored until far too late. To a large extent, this happened because government officials and oil company executives tended to specialise, and therefore they lacked knowledge of the oil industry as a whole. In South Africa, more planning was conducted than elsewhere in the world, but was mainly directed towards the development of synfuels and strategic storage. This was the result of South Africa's peculiar political circumstances and not because of an awareness of the need for
realistic commercial planning.