Special Report: Supermajors cost index - measuring development cost efficiency of oil and gas companies

By Muktadir Ur Rahman, Apex Consulting Ltd.

The ‘lower for longer’ oil price environment has forced oil and gas companies to look hard at their cost structures that escalated dramatically in the years preceding the collapse of the oil price.

The ‘lower for longer’ oil price environment has forced oil and gas companies to look hard at their cost structures. Despite development costs accounting for more than 50% of total costs, the industry currently lacks a widely accepted measure for assessing efficiency in this area. In this paper we present an index that measures how ‘Supermajors’ as a group have been performing over the years in developing their reserves. The index indicates that recent efforts by industry players to decrease their costs have had some impact in reducing the cost of their development activities. However, the index is still relatively high in the historic context even though it is around the levels seen in 2013. More actions are needed not only to reduce the cost of developing new assets and meet future demand but also to address the structural cost problem of the industry.

CLICK HERE to read the complete report, along with informative charts, prepared by Apex Consulting Ltd.




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