Report: Energy development costs at record high

CAMBRIDGE – The costs of constructing oil and natural gas production facilities, refineries and petrochemical plants have risen to a record, Cambridge Energy Research Associates said.
Bloomberg News reported that the Massachusetts-based firm said last week that rising steel and shipping prices have pushed up the cost of building new oil and gas facilities such as platforms and deepwater pumping equipment by 6 percent in the past six months. Costs have doubled since 2005, the research group said.
Building new oil refineries and petrochemicals also continues to get more expensive, according to the group, driven by high energy prices and a lack of engineering equipment to meet demand for projects. These costs have also risen 6 percent in the past six months to a record high.
Exchange rate fluctuations and a weakening dollar have also contributed to construction costs, Cambridge Energy Research said. As the dollar weakens, companies paying for goods and services in euros or other currencies will pay more in dollar terms. •