Kemp: Oil Industry Starts to Squeeze Costs, Wages

Kemp: Oil Industry Starts to Squeeze Costs, Wages


LONDON, Jan 30 (Reuters) – Cutting the cost of everything from salaries and steel pipes to seismic surveys and drilling equipment is the central challenge for the oil and gas industry over the next five years.

The tremendous increase in exploration and production activity around the world over the last ten years has strained the global supply chain and been accompanied by a predictable increase in operating and capital costs.

When oil and gas prices were rising strongly, petroleum producers and their contractors could afford to absorb cost increases.

But as oil and gas production have moved back into line with demand, and prices have stabilised, the focus is switching once again to cost control.

"Operational excellence," a euphemism for doing more with less, is back in fashion and set to dominate industry thinking for the rest of the decade.


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Jason Font  |  February 11, 2014
David, the oil industry is the only reason our economy is gaining any momentum.... With out the filthy product the government could not afford to Subsidize all the renewable energy companies only to see them fail in two years or less. Not to mention subsidizing the unemployed and low income citizens with food stamps and welfare.
David Murphy  |  January 31, 2014
WOW! Imagine an OIl company having to consider the cost of doing business in a world that wants its product to go away forever, and in a hurry. Would that be lovely. These companies make more money than GOD. If your profits on $90-$100 per 42 gallon barrel are not enough, perhaps we should completely stop subsidizing your filthy toxic product, and force you to re-tool into sustainable, renewable, non-toxic, green children-generation friendly scources. Only 30 years behind the 8 ball & counting on this one...

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