Soaring steel and rig prices cause revisions of field development plans

Soaring steel price and rig rental rate had caused some production-sharing contractors to revise the plans of development(POD) of their oil and gas fields and this would consequently cause delays in production, a BPMIGAS official said.

BPMIGAS deputy chairman in charge of planning Ahmad Lutffi told Petromindo.Com that among contractors that were revising their PODs are Malaysian state oil firm Petronas which plans to develop Kepodang gas field in Muriah Block offshore Central Java and Canada?s Husky Energy which plans to develop a gas field in Madura Straits Block offshore East Java.

He did not explained the length of delays in the development of the fields as a result of the resivion of the PODs.

?Soaring steel and rig prices had caused the projects? economics to change and contractors must find ways to keep the project economically attractive, ? he said.

He said a typical offshore rig rental price had soared from US$80,000 per day to a staggering $130,000. The soaring oil prices had caused exploration and development activities across the globe to increase significantly, he said, and caused rigs scarcity, he said. (godang)