The US Energy Information Administration has released a study with results on wellhead drilling costs. Findings from this study show that upstream costs in 2015 have dropped by 25% to 30% below 2012 levels. These costs have even dropped up to 20% under the average over the past 5 years.
The EIA attributes the lower costs to technological advancements creating higher productivity per well. To standardize the findings the team created a measurement unit of Barrels of Oil Equivalent, BOE, and analyzed the effectiveness of wells in that unit of effectiveness. While certain strategies in oil drilling have increased costs per well, namely deeper longer wells, the increased performance overshadows these expenses for a lower cost per BOE.
The study forecasts a 15 percent reduction in deepwater costs in 2015, an additional three percent reduction in 2016, and a modest rise in costs from 2017 to 2020.
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