Oil exploration costs rocket as risks rise

[phantom power]

The cost of discovering each new barrel of oil and gas has risen three-fold over the last decade as technology has pushed the frontiers of exploration into ever more remote areas.

As old fields run dry, oil companies are drilling wells in some of the most inhospitable regions, where political, physical, geological, geographical, technical and contractual risks are high, and they have had remarkable success.

Despite escalating challenges, the annual rate of discovery of new fields has remained remarkably constant at 15-20 billion barrels, more than enough to compensate for the loss of existing reserves that are declining at between 5 and 15 percent a year.

But the cost of this success is staggering, and unless consumers pay more for oil in future, some analysts think we could face an energy supply crunch within a few years.

http://www.reuters.com/article/idUSTRE61A28X20100211

[DCBob]

1. In most areas of the world "easy oil" has already been pumped and consumed..

This is one of the key issues of Peak Oil theory and why we are eventually headed towards very high oil prices sometime in the near future. The worldwide recession slowed this process down but inevitably it is going to happen.

http://en.wikipedia.org/wiki/Peak_oil