Western Canada field operating costs up 20 percent in 2003

Gary Park

Operating costs in Western Canada’s oil fields climbed 20 percent in 2003 to C$8.30 per barrel, while gas operating costs rose by one-third to 73 cents per thousand cubic feet, according to the 11th annual study by Calgary-based Ziff Energy Group.

The increase was attributed to record levels of activity and the need for more energy to operate mature fields, along with higher steel prices.

Ziff based its findings on data from 14 of its clients, who operate more than 200 oil and gas fields in Western Canada.

The company said in a news release that because income trusts tend to buy older, higher-cost properties from larger companies operating costs can be 10-15 percent higher for gas and 5 percent for oil.

“The trusts generally increase the operating efficiency, but many of the properties are still higher cost as they are in depletion and harvest operation,” said Chief Executive Officer Paul Ziff.