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Separate (or on top of) the market driven price rise, there is a severe cost price increase. As the average age of movable drilling units rises severe and new investments are not made (due to PeakOil), the cost of movable drilling units rise severely. As the demand for high skilled oil and geological employees grows and there are not much are scares (due to PeakOil), the cost of specialists rises tremendously. Almost all specialists in the oil/gas sector has resigned their jobs and rent themselves to specialistic headhunter-like agencies to the highest bidder. Most of these specialists who makes $ 500,000 to $ 1,000,000 a year. This also gives a knowledge/brain drain from the private international/global operators to the state owned national operators. As the easy to explore and high quality oil is used (the first 50% till PeakOil), the rest is difficult (as in: expensive) to explore and has low quality (as in: expensive in refining). The cost structure of energy (total independent of the market situation) has only one way: up, up and further up. Easy to explore oil is something of the past and with it low cost prices. Only the Middle east has still relatively low cost prices due much easy to explore oil/gas reserves: they will earn the most per barrel. The rest of the oil of the world faces a severe cost prices rise.

Author: Gijs Graafland

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