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the continental margins which lie between these major crustal elements. The OMD program is designed to bridge this gap in knowledge.

Like the DSDP, the OMD program will be of basic scientific nature, aimed at increasing fundamental knowledge and understanding of the origin, nature, and evolution of the continental margins. While such basic information may prove to be useful in assessing the petroleum potential of the margin, such assessment is not the primary objective of the project.

The feasibility study is useful because it will provide further definition of the objectives and greater insight into cost and timing of the OMD program. The study may also indicate that the same deeper water scientific objectives could be obtained in shallower water depths. Additionally, the study will provide data on the cost-benefit relationships involved in drilling in water depths beyond current drilling technology. Technology is now in use for drilling in water depths up to 6.000 feet, and the technology for extending drilling capability for certain vessels from 6,000 to 8,000 feet is available. The study could provide new insight into the technology and feasibility of extending this capability further, perhaps to as much as 13,000 feet.

Exxon has participated in many deepwater studies in the past. We view this feasibility study as a continuation and extension of previous scientific investigations. For a program of this magnitude-involving expenditures currentlv estimated at some $700 million over a period of 10 vears—we believe that the $20 million feasibility study is a prudent and businesslike first step. Whether. following that study, we will find additional steps of the program to be deserving of our further investment remains to be seen.

Thank you, Mr. Chairman.
[The prepared statement of Mr. McIvor follows:]

[blocks in formation]

of Exxon's worldwide oil and gas exploration and development programs.

I am appearing as a member of this panel at the request of the Chairman.

HowSTATEMENT OF DONALD K. Mc IVOR

ever,

I wish to make it clear that I have not discussed any of the testimony

with the other members of the panel and to emphasize that I am appearing solely

on behalf of Exxon Corporation.

Exxon Corporation has agreed to participate in the feasibility study for the

National Science Foundation's proposed Ocean Margin Drilling (OMD) Program at

the request of Dr. Frank Press, Director, office of Science and Technology

Policy.

It is our understanding that the feasibility study will cost no more

than $20 million, of which 50 percent will be provided by participating pri

vate companies.

Exxon is willing to contribute its share of that 50 percent.

Exxon's interest in the marine environment is both historical and continuing.

In 1979 the corporation spent $2.3 billion in the search for and development of

offshore oil and gas.

Exxon has been exploring for oil and gas in the marine

environment for more than 50 years, and in 1979 we drilled more than 300 off

shore wells.

Over the last few years Exxon has drilled wildcat wells in more than 3,000

feet of water offshore Surinam, Canada, and Thailand in the search for new

sources of oil production, and we are currently drilling a well in 4,500 feet

of water offshore Australia.

With regard to the proposed ten-year $ 700 million OMD Program, Exxon is unable

to determine a clear relationship between the presently projected costs of the

OMD Program and the potential benefits.

Therefore, we have committed to join

with others in the feasibility study but are unwilling at this time to commit

to the full OMD Program as currently envisioned. Depending upon the outcome

of the feasibility study, we will be glad to reconsider our position.

We are participating in the feasibility study because we support the commonly

held view that the ocean margins represent one of the earth's least scientific

ally explored frontiers.

We are interested in seeing a continuing scientific

effort devoted to this little known segment.

We believe the feasibility study

will better define the preferred approach to the overall investigation.

Our

support of this study will supplement other contributions we make to worthwhile

scientific programs headed by several oceanographic institutions.

Exxon has been closely associated with the government sponsored Deep Sea Drilling

Project (DSDP) since its inception in 1968.

Our scientists and engineers have

participated not only in the Project's on-site drilling but have also served on

various advisory panels and committees of the Project, including those of the

National Science Foundation, the Joint Oceanographic Institutions for Deep Earth

Sampling, and the International Phase of Ocean Drilling.

In our view, the DSDP

is an important and successful geologic research investigation.

Its basic scien

tific findings have not only enhanced knowledge of the oceans but have also

revolutionized previous concepts regarding earth history and processes.

These

fundamental new concepts, while not directly applicable to oil and gas discovery,

are useful in the broader interpretation of geologic data.

An extension of the DSDP to the ocean margins may be the logical next step. Earth

scientists now have a reasonably good basic understanding of the geologic history

STATEMENT OF DONALD K. Mc IVOR

3

and processes of the deep ocean basins and of the continental shelves out to

the 6,000-foot water depth. However, they know very little about the funda

mental geologic nature of the continental margins which lie between these major

crustal elements.

The OMD Program is designed to bridge this gap in knowledge.

Like the DSDP, the OMD Program will be of basic scientific nature, aimed at

increasing fundamental knowledge and understanding of the origin, nature, and

evolution of the continental margins.

While such basic information may prove

to be useful in assessing the petroleum potential of the margin, such assessment

is not the primary objective of the project.

The feasibility study is useful because it will provide further definition

of the objectives and greater insight into cost and timing of the OMD Program.

The study may also indicate that the same deeper water scientific objectives

could be obtained in shallower water depths. Additionally, the study will

provide data on the cost-benefit relationships involved in drilling in water

depths beyond current drilling technology.

Technology is now in use for drill

ing in water depths up to 6,000 feet, and the technology for extending drilling

capability for certain vessels from 6,000 feet to 8,000 feet is available. The

study could provide new insight into the technology and feasibility of extending

this capability further - perhaps to as much as 13,000 feet.

Exxon has participated in many deep water studies in the past.

We view this

feasibility study as

continuation and extension of pr

ious scientific in

vestigations.

For a program of this magnitude

involving expenditures cur

rently estimated at some $700 million over a period of ten years - we believe

that the $20 million feasibility study is a prudent and businesslike first step.

Whether following that study we will find additional steps of the program to be

deserving of our further investment remains to be seen.

Mr. Brown. Thank you, Mr. McIvor. Our last panelist is Alexander Massad, executive vice president of Mobil Oil Corp.

Mr. Massad. Thank you, Mr. Chairman.

I have submitted a statement and, with your concurrence, I would ask that it be placed in the record following which I will just make a few statements.

Mr. Brown. Without objection the statement will be included in the record. [The biographical sketch of Mr. Massad follows:)

ALEXANDER (ALEX) H. MASSAD Alex H. Massad is a director of Mobil Corporation, and a director and executive vice president of Mobil Oil Corporation. He is also president of the Exploration and Producing division.

Mr. Massad was born on July 10, 1923, in Drumright, Oklahoma. He received a B.S. degree in petroleum engineering from Oklahoma University in 1944.

In World War II, Mr. Massad served as an engineering officer in the United States Navy.

He joined Mobil in 1946, as rotary floorman in a drilling crew in the Southwest. Subsequent positions included roustabout, and various engineering and management positions.

In 1962, he became producing advisor for the domestic division in New York. In 1964, he joined the Middle East Affairs Department on a special assignment related to the Persian Gulf. In 1965, he was appointed producing manager of the Midland, Tex., exploration and producing division, and later became general manager of the division. He was named vice president of the Gulf Coast (Houston) exploration and producing region in 1967. He became executive vice president for exploration and producing of the North American Division in 1968, and moved to the same position in the International Division two years later.

Mr. Massad was elected a vice president of Mobil Oil Corporation in 1971, and senior vice president of Mobil Oil and executive vice president of the exploration and producing division in October, 1975. In August, 1976, he was named a director of Mobil Oil Corporation.

He was named to his present positions effective May 1, 1977.

Mr. Massad and his wife Delores have two sons and a daughter, and live in Darien, Connecticut.

STATEMENT OF ALEXANDER H. MASSAD, EXECUTIVE VICE

PRESIDENT, MOBIL OIL CORP. Mr. MassaD. First I would commend your staff, and especially Dr. Kramer for his careful analysis of the project which you so kindly provided to us before we arrived.

Several statements have been made relative to the proposed project, its benefits, its costs, and other aspects. And possibly the comments I would make would be summarized best as follows:

First, at this point in time, no definitive agreement has been signed relative to the project between industry and the administration and the scientific community. Speaking for Mobil, we have indicated an intent to proceed into the first phase of the project provided three essential items could be clarified to our mutual satisfaction.

These relate to first, the liability issue; second, a more detailed cost estimate; and third, that there was more adequate industry participation.

Second, a very good case can be made, that the program should be entirely financed by the Government who, under the pending windfall tax, will enjoy the revenues resulting from future price increase.

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