Big Oil’s pain

While record prices have produced record profits, they have also helped make crude a lot more expensive to pump.

NEW YORK (CNNMoney.com) — It’s always more expensive to go to the ends of the earth.

But as oil companies chase dwindling supplies by drilling in the icy waters of eastern Russia, map deposits under the rebel-infested Nigerian bush, or cut deals in corruption-prone central Asia, it’s not just expedition costs that are making it more expensive to pull a barrel of oil out of the ground.

Thanks to record oil prices spurring an exploration boom and a cyclical industry woefully unprepared to meet its labor needs, the cost to produce a barrel of oil has skyrocketed in recent years.

Between 2001 and 2004, the average costs to operate a land-based oil well in the U.S. nearly tripled, according to figures from the Energy Information Administration and supplied by the Independent Petroleum Association of America, an industry trade group.

CNN/Money