UPDATE: Total E&P Head: Most Indus Costs Set To Fall In 2009
May 27 2009 - 5:16AM
Dow Jones News
Oil industry investment costs are set to fall across the board
in 2009, in a new oil price environment that could prove
advantageous to big oil companies, the head of exploration and
production at oil major Total SA (TOT) said Wednesday.
"Some costs have already have come down in specific areas during
the second half 2008, gas turbines are a good example," Yves Louis
Darricarrere told delegates at an energy conference in Paris.
"We expect to see much more of this almost everywhere in 2009,"
he said. "There might be a few exceptions, such as subsea
equipment, but costs will as a rule go down unless oil prices rise
faster than expected."
While costs must reflect the current market conditions,
Darricarrere reiterated Total's mid- to long-term view for oil
markets remains unchanged by a major fall in prices since their
July 2008 peak.
"There may even be a case for saying that the new [price]
environment will provide more opportunities for the majors than a
$100 [a barrel] plus context," Darricarrere said.
"We believe that our playing field is again expanding compared
to our recent past," he said. "In these challenging times, the
weakest will be tested and only the most competitive will survive
in the new reality."
Total's management has stated many times the need to maintain
investment despite a collapse in oil prices from their record highs
nearly a year ago.
-By Adam Mitchell, Dow Jones Newswires, +33 1 40171756;
adam.mitchell@dowjones.com