Record High Oil & Gas Project Costs Expected for

HOUSTON–(BUSINESS WIRE)–The costs of major oil and gas production projects have risen more than 53% in the past two years, and no significant slowing is in sight, according to a new benchmark index developed by IHS and Cambridge Energy Research Associates (CERA).

The IHS/CERA Upstream Capital Costs Index (UCCI), which tracks nine key cost areas for offshore and land-based projects, climbed 13% to 167 during the six months ending October 31, 2006, compared with an increase of more than 17% in the previous six months. Since 2000, the UCCI has risen 67% — with most of the increase in the last two years — while the Producer Price Index-Commodities for finished goods (excluding food and energy) moved up just 7.5% during the same period.