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Keeping a tight belt

Upstream companies must make cost savings structural and permanent in 2017, not short-term and reactionary

Upstream oil and gas costs fell in 2016 and many in the industry expect further reductions in 2017. But less than half of the savings projected for 2017 can be sustained in the longer term and the industry must reshape its approach to cost management if it is to make recent cost-reduction efforts stick for the duration of their projects. A survey of the global oil and gas industry by Wood Mackenzie - based on responses from a wide range of company types and regions - shows average costs fell by around 17% in the past year, with larger reductions detected among supply-chain companies than operators. Overall, it is reported, the industry expects a further 5% decline in costs in 2017, but ther

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