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Politics : Rat's Nest - Chronicles of Collapse -- Ignore unavailable to you. Want to Upgrade?

To: Wharf Rat who wrote (4603)	8/20/2006 12:45:09 PM
From: Wharf Rat	Respond to of 24213

ANALYSIS-Costs surge threatens Big Oil's output plans Fri Aug 18, 2006 5:38am ET By Alex Lawler LONDON, Aug 18 (Reuters) - The world's top oil firms are struggling to expand oil and gas output, hit by a tight market for drilling rigs and rising costs, hampering development of new supply at a time of record prices. Production is falling at many companies even as capital spending rises. Crude oil has more than tripled since early 2002 to $70 a barrel, driven by worries about supplies and growing world demand. Norway's Norsk Hydro (NHY.OL: Quote, Profile, Research) cut its 2006 output goal in June and Statoil (STL.OL: Quote, Profile, Research) in July said it may miss its target -- signs that a tight market for rigs and other services is hitting firms' ability to develop projects on time. "Company production targets and market expectations for production growth are at risk of disappointment," Deutsche Bank analysts said in an August 10 note. "Delays to drilling programmes and project start-up seem increasingly likely." Oil and gas output at eight major European oil firms dropped a collective 530,000 barrels of oil equivalent a day in the second quarter, Deutsche estimates. That is equal to half of daily oil demand in The Netherlands. Royal Dutch Shell (RDSa.L: Quote, Profile, Research) and BP (BP.L: Quote, Profile, Research), the world's second- and third-largest fully publicly traded oil firms, both indicated in July they may miss their 2006 output targets. Both firms cited the effect of production-sharing contracts under which they get fewer barrels at high prices. Shell's output was hit by attacks on oil installations in Nigeria, where it is the top foreign producer. Continued... 1 \| 2 \| 3 Next > today.reuters.com