Big Oil’s pain

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.

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. And Exxon Mobil (Charts) said industry wide development costs soared nearly 30 percent from the first quarter 2005 to the first quarter 2006.

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