Total Sees Trend Emerging of Rising Global Costs on Oil Prices

Total SA (FP), Europe’s third-biggest oil company, said the costs of developing energy projects are being dragged higher by oil prices.

“We see a trend for an increase in costs but it’s only a trend for the time being and I hope it won’t be confirmed,” Yves-Louis Darricarrere, head of exploration and production at the Paris-based company, said in an interview in St. Petersburg, Russia today. “We see it in many areas, it’s general, it’s linked to the price of oil.”
In a bid to boost output, Total plans to making final investment decisions on the Ichthys LNG project off Australia, Egina in Nigeria and the Shtokman gas field in Russia’s Barents Sea by the end of the year. The French oil company has said it may raise investment to about $23 billion annually in the next few years from about $20 billion to pay for the new, expensive oil and natural gas projects.
OAO Gazprom, Statoil ASA (STL) and Total are in talks with suppliers on the development amid rising costs, Andre Goffart, deputy chief executive officer of Shtokman Development AG, said at a conference in Paris last month. Shtokman may hold enough gas to meet world demand for more than a year.
The prospect of even higher prices next year for equipment and work required at the site favors a decision being made in 2011, Goffart said.
Source: Bloomberg