Cost inflation is a true problem and that cannot be fixed very fast. But prices are high and risk outside North America is perceived to be growing so companies and people will look for ways to optimize operations, squeeze the rock, slash labor, milk the data, and normalize what used to be the drilling lottery. Shale has been pronounced dead a couple of times just to reemerge bigger, better, and stronger than ever. It will be no different now except that after this iteration shale might be out to eat conventional oils lunch and dinner. This time for real. Pandora’s box remains open.
Inflation in the oil sector is worsening and industry executives see no reason to expect cost pressures on everything from steel pipe to frac sand to ease any time soon.