PARIS - Soaring commodity and raw material prices are increasing the cost of oil and gas projects by up to three times, Organization of Petroleum Exporting Countries ministers said Friday.
Although current high oil prices may be helping to drive much-needed crude investment, the rising cost of construction projects could curtail new energy production development, they warn.
Addressing delegates at Petrostrategies annual oil summit in Paris, Qatari Oil Minister Abdullah al Attiyah said: "Our costs have tripled from two years ago, due to high (commodity) prices. And its not just that, it is also contractors who have tripled their prices."
So: Higher demand = higher energy prices, higher commodity prices. Higher commodity prices = still higher energy prices. Eventually, higher energy prices = lower demand. In this case, economic recession. Oh, and I bet this joke didn't go over so well with the press:
OPEC's Secretary General, Mohammed Barkindo joked with delegates that in the past consumers have criticized OPEC for acting as a cartel, whereas in reality contract firms are acting in that way by pushing costs as high as possible.
Aw, poor OPEC. I'm just broken up for you.
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