A sharp upward trend in unit operating costs in the shallow waters of the Gulf of Mexico (GOM) has added urgency to operators’ quests to effectively monitor and manage operating costs, according to Ziff Energy Group’s latest benchmarking study.

The fourth benchmark study, released on Wednesday, evaluated operating costs for producing fields of the GOM shelf, analyzing data for 2002, “a period when operators were, as now, enjoying strong commodity prices.”

Overall on a volumetric weighted basis, between 1999 and 2000, natural gas fields showed unit operating cost increases of about 20% — from 25 cents to 29 cents/Mcf. Oil fields also showed increases twice as high, or about 40 cents/boe — from $1.65 to $2.30/boe.

Costs were analyzed on the basis of 10 standard major cost categories, including well servicing, surface repairs and maintenance, transportation, and field labor and supervision costs. Between 1999 and 2002, Ziff found that the most significant increases occurred in surface repairs and maintenance, up 53%, followed by total labor and field supervision, up 34%.

Participants included majors such as ChevronTexaco, BP and Shell, along with independents Unocal, El Paso Corp. and Newfield. Participating operators collected data on more than 220 operated fields encompassing nearly 6 boe, or 1 MMboe/d, with annual operating costs of more than $760 million.

To learn more about the study, visit Ziff’s web site at www.ziffenergy.com.

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