Oil & gas construction costs reach new high

Costs associated with constructing new oil & gas facilities have surged to a record high, says Cambridge Energy Research Associates (CERA).

In the last six months, the IHS/CERA Upstream Capital Costs Index (UCCI), a measure of project cost inflation, has risen 11% to a new high of 198 points, according to a report released this week. This is nearly double the costs observed as recently as 2005 when the index measured 106 points. However, the index does find a slight decline in one critical cost, the daily rate for off-shore drilling rigs.

Construction costs began their dramatic rise in 2005 driven by a sudden, sustained increase in