Study: Oil, Gas Development Costs Fall, But Could Go Lower
- Looking specifically at seven supermajors—BP, Royal Dutch Shell Plc (NYSE: RDS.A), Eni (NYSE: E), Chevron Corp. (NYSE: CVX), ExxonMobil Corp. (NYSE: XOM), Total (NYSE: TOT) and ConocoPhillips (NYSE: COP)—development cost per barrel of oil equivalent (boe) increased by 66% between 2011 and 2015, but fell by about 17% in 2015.
- The study's “supermajors cost index” indicates the companies' cost cutting efforts were successful in lowering development costs since the downturn forced operators to work smarter.
- “In this low oil price environment where further cost savings are necessary to make many of the projects commercially viable, we believe that the industry stands to gain more from collaborative and incentivized working agreements rather than focusing on short-term cost savings and fluctuating between periods of cost deflation and escalation,” he said in the study.
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Supermajors Cost IndexBPShellConocoPhillipsExxonMobilTotalEniStatoilMuktadir Ur RahmanApex Consulting LtdEconomic drivers of UpstreamUpstream oil and gasupstreamUPstream ProjectsIndexCostDevelopment costDevelopment Capital ExpenditureReservesReserves ManagementReserves AuditsChevronChevron Corporation
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