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At the beginning of the 1950's, the world oil industry was set to undertake the greatest expansion in its history. It lasted until the early 1970's. The growth the industry during this period was supported by world economies recovering from war and by low oil prices. It was a period shaped largely by the private oil companies. Increasingly the expansion that occurred created tensions that were difficult to accommodate within existing company producing- country relationships. Changes were inevitable and came rapidly as the rules of the oil game began to be dominated by OPEC and its members.In the 1970's a new age approached. Producing-country governments took control of prices, expanded national oil company operations and bought out the private companies' ownership interest in oil. At the same time, oil prices began to rise under the pressure of demand and later by the supply disruptions following in the wake of the Iranian Revolution. The end result was a 20-fold rise in oil prices that was eventually to flatten oil demand, substantially increase non-OPEC production and bring about the weakening of OPEC's position and a collapse in oil prices in 1986.The industry is now in transition to a new environment. A shake-out is underway that will force high-cost producers out of business. OPEC countries are loohng to develop new relationships to promote more stability in the marketplace. Oil prices are bound to rise again - perhaps significantly - but the future role of OPEC, weakened by dissension within the organization, is uncertain. A repeat of the 1970's experience when prices were on a rollercoaster, is not likely, but is not to be ruled out on a smaller scale. Changes in the industry have made it more susceptible to developments that tend to exaggerate the short-term response of prices to supply/demand trends.This is my 45th visit to Indonesia. My first was in early 1968. Later that year Permina and Pertamin were merged to form Pertamina with Dr. Ibnu heading up the new company as its first president-director. Since then - over a period of 19 years - the face of Jakarta, and indeed Indonesia itself, has radically changed.Let me cite some figures to illustrate the dramatic transformation that has taken place (Exhibit 1):1. In 1968 the real gross domestic product of Indonesia was worth US$29.5 billion (in 1980 currency). In 1985 it totaled US$85 billion. That represented a 2.8 fold increase over the period. More importantly, standards of living, as measured by per capita real income, doubled during that time. This is an achievement which few countries with a comparable population expansion can claim.2. In the year of my first visit, the country's crude oil production totaled about 600,000 barrels a day. It peaked in 1977 at 1.7 million barrels daily and has sirice declined to about 1.4 million barrels a day. Over the years, Pertamina pioneered new arrangements - production sharing contracts - that were then unique to the industry and which brought many new companies into Indonesia. Caltex continued as a mainstay, and together with these other companies, spear-headed the drive to expand production. Indonesia also became the world leader in promoting the export of LNG in the Far East during this period.3. The country's population has increased from 113 million in 1968 to about 170 million currently. This makes it the fifth most populated country in the world. Enrollment in primary and secondary schools, a good indicator of a country's future, doubled during the first decade of my visits to Indonesia. This trend appears to be continuing, although educational data, as in most countries, lags the present by several years.4. Jakarta was a bustling, noisy, crowded city of over 4 million in 1968. At last count, it had 8 million people within its city limits. As in the rest of the third world, urbanization has accelerated, arid United Nations' estimates indicate that Jakarta's population could rise to 20-30 million in 2025. It will then be the premier city of Southeast Asia and among the largest in the world.I could recite many more statistics to highlight the economic and social progress that Indonesia has made, but please allow me at this point to indulge in some comparisons of a personal, more mundane nature that strikes a 19-year annual visitor.Betjak transportation was still widespread when I first arrived. Now we have to go in search for them and consider them quaint. Automobiles have become the bane of Jakarta, as in most other large cities. Hotels - there were then the Indonesia, the President, the Asoka and the Kartika Plaza. Now the skyline that frames Jakarta - with its world renowned hotels - is the envy of Southearst Asia. The cuisine - once heavy with the Indonesian staples, such as sates, gado-gado and nasi goreng - now also offers gourmet meals that the French would find difficult to surpass. Jakarta even has Kentucky Fried Chicken, tacos at the Green Pub and other such esoterica. I am not sure this is step forward, but that depends on your taste. Myself, I prefer the old.Christopher Lucas, a freelance writer, once said that ",Indonesia isn't a country, it's a happening.", To me, Indonesia is both, and the happening signifies the forward momentum that is propelling Indonesia into the forefront of the world's leading countries.I would now like to broaden this attempt of mine at nostalgia - yet, also limit it, by focusing on the major events that have shaped the industry since 1951, when I first started to work at Texaco. The early 1950's were not exactly a turning point, but represented a consolidation of forces growing out of the end of World War Two. We should, however, be in more agreement that 1986 is a watershed year.A review of this period of 35 years should identify trends that may continue to influence the industry in the years ahead. We might even learn some lessons - or, at the least, get some idea of what happened to bring the industry to its present state.