Despite Search, Gulf Will Probably Remain King of Oil : Energy: Companies are always seeking safe, diversified sources, but the Middle East has two-thirds of all known reserves.

From Vietnam to Brazil, from Papua New Guinea to the Soviet Union, oil companies are leaving no stone unturned in the search for new, potentially long-lived oil reserves.

The search for new oil fields gains urgency with the current Middle East crisis, which points up once again the world’s reliance on oil from that politically unstable region.

But is there enough new oil out there to effectively cut into the oil hegemony of the Persian Gulf states?

“I think the best that can be hoped for from all of these new areas would be to forestall or postpone by a decade or more a need for greater reliance” on the Middle East, said John Treat, an international oil industry analyst with the Booz, Allen & Hamilton consulting firm and a former White House energy adviser.

“The mathematics of the size of the reserves in the Middle East are so large . . . the likelihood of substantially reducing the dependence on them is not great,” he said.

The Middle East is home to about two-thirds of the world’s 1 trillion barrels of known oil reserves, and there is very little chance that enough oil can be found anywhere else in the world to come close to that, industry officials said.

Still, if world oil demand is substantially reduced, new exploration and production could mitigate growing demand for Middle Eastern oil, and could eventually reduce the need for such oil by a modest amount in 10 years, said Joseph Stanislaw, the Paris-based managing director of Cambridge Energy Research Associates.

Last year was the first during which major oil companies operating in the United States spent more money outside the country to find oil than they spent in it, and also the first in which they owned more reserves abroad than here, according to a survey released last month by Arthur Andersen & Co., the accounting firm.

The companies surveyed spent $21.9 billion on oil exploration and development outside the United States in 1989, compared with $17.3 billion in this country.

Outside of developed areas, industry executives and analysts said these were some of the best prospects for new finds:

* The Soviet Union. Already the world’s largest oil producer, it has undeveloped resources in the Arctic and Central Asian regions. In one field alone, the potential reserves total more than 25 billion barrels. Texaco Inc., Chevron Corp. and France’s state-owned Elf Aquitaine oil concern have all announced agreements to look for Soviet oil.

* China. Potential reserves are vast, but political problems may prevent easy development by outsiders. Still, U.S. companies have done some exploration offshore. Chevron has a platform about 100 miles southeast of Hong Kong in the South China Sea that is scheduled to start production this week.

* Southeast Asia. Both Chevron and Mobil Corp. have exploratory efforts in the highlands of Papua New Guinea in remote areas accessible only by helicopter. Several Western oil companies are also exploring politically troubled Myanmar (formerly Burma). In Vietnam, where politics prevents U.S. companies from exploration, Europeans have been active and oil production could approach 200,000 barrels a day, Treat said.

* Australia and New Zealand. A consortium of oil companies including Mobil and Australia’s Broken Hill Proprietary recently discovered a field of 70 million to 100 million barrels off the northwest coast of Australia. Atlantic Richfield Co. is exploring New Zealand.

* Latin America, particularly Argentina, Brazil and the Andean nations of Colombia, Peru, Ecuador, Bolivia and Chile. Chevron signed a deal to explore for oil in Bolivia just last month. The five Andean nations already produce about 860,000 barrels of oil a day, Treat said.

* Africa. Chevron is drilling in Chad, Arco is active in West Africa and Mobil has signed exploration contracts in Zambia, Zimbabwe and Kenya.

The hazards of such exploration include remote locations, unstable political regimes, even possible encounters with drug traffickers, said J. Robert Gaca, president of Mobil New Exploration Ventures Co., formed by Mobil Corp. two years ago to go into unexplored areas.

While a member of an exploration team in Libya, Gaca said, he was caught up in the 1969 revolution that swept Moammar Kadafi into power.

Some oil executives feel that high oil prices resulting from the Iraqi invasion of Kuwait could spur interest in new oil production in developed areas, including the North Sea and the United States, provided prices stay high enough to justify costs.

“High oil prices, above $25 per barrel, would tend to have people look again in this country,” said Mike Bowlin, president of Arco International Oil and Gas Co. in Plano, Tex.

On Thursday, Middle East tensions jolted the September contract for crude oil up 90 cents to close at $27.36 per barrel in trading on the New York Mercantile Exchange. But prices must stabilize at such levels before U.S. exploration increases substantially.

The best prospects for new drilling domestically appear to be in areas already off-limits to oil companies, especially wilderness areas of Alaska and offshore California.

Still, higher oil prices might spur oil companies to use costly enhanced oil recovery methods to extend the life of existing oil fields in California, Texas, Alaska and elsewhere.

In response to calls by President Bush, Arco and British Petroleum have already said they will speed up a “well stimulation” program to accelerate oil production from the huge Prudhoe Bay oil field on Alaska’s North Slope.

Similarly, the federal government is expected to ask Texas and other oil states to increase crude production to offset the loss of imports from Iraq and Kuwait, Texas Railroad Commissioner John Sharp was quoted as saying Thursday.

SAUDIS WANT OPEC MEETING

A session to deal with loss of oil caused by invasion is sought. D4

WORLD OIL RESERVES RESERVE INCREASES Regional shares of the increase in oil reserves 1969-1989 Latin America: 19.5% Middle East: 66.3% Rest of World: 14.2% Total reserves have grown to 1,012 billion barrels i 1989 from 541 billion barrels in 1969. Most of the increase was in the Middle East. TOTAL RESERVES The large boost in reserves in 1987 came from substantial increases by four countries: Iran, Iraq, Abu Dhabi and Venezuela. The increase in 1989 was mainly due to Saudi Arabia. Source: British Petroleum