Industry reports some price breaks as drilling contracts renegotiated

摘要

Oil and gas executives report they are beginning to see some relief in drilling and completion costs, partially because service companies have become more willing to renegotiate contracts. Doug Sheridan, managing director and founder of EnergyPoint Research Inc, sees a movement away from fixed-price contracts toward prices that reflect commodity prices, especially on the international oil markets. Bill Hale of Ernst & Young LLP also said he sees a more variable pricing structure for drilling contracts within the US, based upon dropping revenues and a sluggish Baker Hughes Inc rig count. Barclays Capital Inc analysts on June 22 forecast that worldwide exploration and production expenditures will reach $387 billion during 2009, which would be down 15% from last year. Analysts with Raymond James & Associates Inc have said the jack up market continues to deteriorate, and they expect offshore drilling contractors will need to continue stacking capacity.