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PHOTO CAPTION: Offshore oil platform on fire in the North Sea

Oil Exploration Costs Explode as Risks Rise

Despite risks, new field discoveries have kept pace with declining oil reserve production, reports Reuters, but age of cheap oil is over.

Published: 12-Feb-2010

LONDON - Finding oil and gas to replace the world's fast dwindling reserves is increasingly risky as rigs probe areas once seen as too difficult or too dangerous, and costs are rocketing, which could imperil future supply.

The cost of discovering each new barrel of oil and gas has risen three-fold over the last decade as technology has pushed the frontiers of exploration into ever more remote areas.

As old fields run dry, oil companies are drilling wells in some of the most inhospitable regions, where political, physical, geological, geographical, technical and contractual risks are high, and they have had remarkable success.

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