WoodMac: Return of cyclical inflation could see deepwater cost reduction come to a close

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Impending cyclical cost inflation could raise break-even costs in an otherwise healthy deepwater industry, energy analytics company Wood Mackenzie said in its latest report.

In a report published on Tuesday, WoodMac said that the deepwater industry appears in good health, following a sustained cost reduction through the downturn.

However this hard work, according to the company, is in danger of being undone, as impending cyclical cost inflation could raise break-even costs once again.

WoodMac’s data indicates that the cost of developing new deepwater barrels has fallen over 50% since 2013.

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