This report reviews the history of the domestic offshore hydrocarbon production; projects offshore oil and lease condensate production from 1971 through 1985; and shows the impact of offshore development on the onshore segment of the petroleum industry. Domestic offshore oil and lease condensate production has increased from about 2.0 pct of the U.S. total in 1954 to 16.7 pct in 1970. Likewise, marketed gas production has increased from 1.0 pct of the U.S. total in 1954 to 15.0 pct in 1970. The past performance of exploration, leasing, development, and production of the offshore petroleum industry was used to make projections of offshore oil production. A comparison between onshore and offshore operations was also made. Assuming a tentative Department of the Interior offshore leasing schedule is completed by 1980, the authors estimate that by 1985, about 30 pct of domestic crude oil and lease condensate production from the lower 48 states will come from offshore areas. Currently, leasing of federal offshore areas has been delayed owing to environmental considerations. The rate at which offshore hydrocarbons will enter the energy market will depend, to a large extent, on how soon environmental considerations are resolved. If offshore leasing resumes in the near future, U.S. offshore production of crude oil and lease condensate should be about 934 million barrels in 1985.