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Chevron CEO: $100/barrel oil is the new $20 as labor costs rise

  • Labor costs have more than doubled in the last 10 years, creating a “new reality” for energy producers and consumers who will pay more for fuel, Chevron (CVX +0.7%) CEO John Watson says at the CERAWeek conference.
  • Among the rising costs have been those for offshore development, which now reaches into waters that are deeper and more obscure than were possible a decade ago; costs for offshore rigs have climbed more than five-fold in the last 10 years, Watson says.
  • The CEO also praises today's court ruling that a $9.5B judgment against CVX made by courts in Ecuador was fraudulent, saying the judgment from a reputable court in the U.S. will help prevent enforcement actions elsewhere.
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Comments (2)
  • chopchop0
    , contributor
    Comments (4000) | Send Message
    Will be interesting to see how the costs per barrel of domestic land-based vs deep-water oil end up playing out.
    4 Mar 2014, 12:20 PM Reply Like
  • User 353732
    , contributor
    Comments (5046) | Send Message
    Another factor is money illusion created by dollar debasement.
    The purchasing power of $20 oil in the 1970s was perhaps equivalent to $50oil in 2014.
    At $100 /bbl, crude is well below its real peak price largely because of very impressive gains in proven and probable reserves worldwide over the past 5 years.
    4 Mar 2014, 12:55 PM Reply Like
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