March 27, 2018 / 2:11 PM / in a year

Anadarko expects Permian service costs to jump in 2018

NEW ORLEANS, March 27 (Reuters) - U.S. shale oil producer Anadarko Petroleum Corp expects double-digit increases in service costs this year for its operations in the Permian Basin, the largest U.S. oilfield, its chief executive said on Tuesday.

The company, which operates in the Delaware portion of the Permian, projects that service costs will rise 10 to 15 percent there for the year, CEO Al Walker said at the Scotia Howard Weil energy conference in New Orleans.

“We’re just going to see some natural creep in service costs that will just have to work its way into the system,” Walker said. “If oil prices rise higher, that will increase the pressure on prices.”

Anadarko rival EOG Resources Inc said on Tuesday it expects Permian service costs to actually dip this year, though EOG sources many fracking supplies itself, helping to defray costs. (Reporting by Ernest Scheyder Editing by Chizu Nomiyama)

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