Oil Services Exec Cites Weak Investment

NEW ORLEANS – Efforts to boost the supply of oil in the face of expanding world demand are being hampered by insufficient investment, despite surging crude prices, the head of a major petroleum services company said Monday.

The industry dedicated to searching and drilling for oil is having to deal with aggressive state oil companies, shortages of qualified workers and higher costs, said Andrew Gould, chief executive officer of Houston-based Schlumberger Ltd.

As a result, building adequate oil supplies “is going to be a slower process than originally anticipated,” Gould said.

… Gould said that much of the current increased investment level is merely covering sharply higher costs for materials and personnel.

At the same time, the industry faces an aging work force and is having to go around the world to hire, Gould said. Since 2004, Schlumberger has hired 18,000 new staff members, including more than 6,000 engineers.

“It takes time to train new talent,” Gould said.

Gould also said that there would be tight markets and tight delivery times for drilling rigs, especially those used in deepwater development.

… Forecasts of future energy prices were notably absent from the presentations of several company heads, except for Cazalot, who said Marathon sees “energy prices higher for longer.”

AP