A review of Oil production capacity expansion costs for the Persian Gulf

Abstract

The U.S. Energy Information Agency has recently published a report prepared by Petroconsultants, Inc. that addresses the cost of expanding crude oil production capacity in the Persian Gulf. A study on this subject is much needed in view of the dwindling supply of data on such costs from this region; however, this report does not provide any data and does little more than present the consultants' assumptions. Where those assumptions can be checked against plausible extrapolations of costs elsewhere, the investment per well is too high and productivity per well is too low. The result is an overstatement of the needed investment per unit of output.