Offshore staff
CAMBRIDGE, Massachusetts –Building and operating upstream oil and gas facilities now costs more than ever according to the IHS Upstream Capital Cost Index and Upstream Operating Cost Index.
The UCCI rose 2.3% from 3Q 2011 to 1Q 2012 to 227, just under the 3Q 2008 record of 230. The UOCI rose 2.1% over that period to reach a new record of 189.
IHS expects upstream capital and operating costs to continue to rise in 2012 driven by increased costs in rig dayrates, equipment, and oilfield services.
The high rate of increase for the UCCI can be attributed to increased day rates for deepwater rigs, says IHS. Despite new entries into the market these rigs are in high demand and with rising fuel and labor costs can command premium rates.
Equipment vendors and subsea manufacturers respond to the high order levels by passing through the increased cost of shipping both finished products and the sub-components. This was most notable in Brazil and North America.
The UOCI rose on all four of its market components – operations, maintenance, logistics, and well services.
7/02/2012
