Oil firms hold off on exploration projects

12/14/2008 | Houston Chronicle (tiered subscription model)

Oil companies are holding off on signing new contracts for steel and labor for drilling rigs as they wait for the costs of such projects to come down. "If you're looking at a go/no-go decision now, and steel prices are going down, a typical deep-water project gets a quarter of its cost from steel," noted IHS Energy analyst Candida Scott. "If in six months you're going to see that cost come down, it gives pause to the amount of money you're about to spend."

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