It's probably premature to say that upstream cost inflation has been conquered, but industry executives are pointing to signs that the pace of cost increases is starting to slow down. It's no secret that historically high commodity prices have generated record profits for oil companies in recent years, but costs for equipment and services have also soared, threatening to erode profit margins and make some projects uneconomic. Escalating costs led, for example, to the recent cancellation of Exxon Mobil's Palm gas-to-liquids joint venture in Qatar (PIW Feb.26,pl).
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