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 (5350) | 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 (5168) | 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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