KUALA LUMPUR -- The exploration cost of a continental shelf well has increased by more than 200% during the last three years, said Mohamad Hassan Marican, president of the Malaysian state oil corporation Petronas.
It cost $7 million per exploration well on the continental shelf, up from $2 million in 2006, Hassan Marican said at the Asia Oil and Gas Conference today.
He pointed out that several oil and gas projects were also being deferred due to surge in cost of material and resources, including Petronas' proposed joint venture refinery in Sudan and the Liquefied Natural Gas project in Iran.
Industry officials agreed and said a number of deepwater projects were also being phased due to the rising costs.
In his opening speech at the conference, Hassan Marican also called for new models of cooperation and collaboration between producers and consumers as well as across the industry to achieve real progress in meeting energy demand.
"In particular, efforts must focus on supporting the formulation of sound energy policy, intensifying research and development efforts, and addressing industry-wide capacity and capability shortages," he said. "The industry is at a critical juncture that calls for innovative and bold solutions and the world is looking to us for direction on the way forward."