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Schlumberger sees oil services cost inflation easing

Cost inflation in the oil industry is slowing as tightness in the services market eases, the chief executive of Schlumberger, the world’s largest oil services company by market value, said on Tuesday.

Andrew Gould said an easing in steel price rises and weak demand for onshore drilling services in North America were contributing to moderation in previously rampant inflation in the sector which had helped push oil prices up to new records.
“There is capacity available, so, prices are still increasing but not nearly at the rate they were in 2005,” Gould told Reuters in an interview at the sidelines of the Oil and Money conference in London.

Gould said the easing in inflationary pressures was underpinned by the fact there was no incentive for the oil industry to increase drilling activity onshore in the United States or Canada.

However, Gould warned that one hot area in recent years would remain tight.

“The only constraint that really remains in my opinion is in offshore drilling,” he said, adding that it would likely take a “couple more years” before this constraint disappears.


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