Project management failures and competition for personnel contribute to cost escalation. Over the last 30+ years - that is, the period during which I have observed the oil and gas industry closely as a journalist - there have been a number of notable price "corrections" that have to some extent altered industry practices. The current sharp decline of more than 50% is significant; it is different than what has occurred before as it follows several years of chest-thumping by operators over the cost of new developments. Funny thing that. Apparently it has been the contracting sector's fault that project costs, notably those in deepwater, have skyrocketed. So reins have been tugged on and the scheduling of new developments has been slowed because operators want the contracting and supply sides to review their cost basis. This does require some careful analysis. Whose fault is this cost escalation?
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