Production costs of global conventional and unconventional petroleum

Concerns about the costs of developing oil and gas from conventional and unconventional formations have led many commentators to assume that increasing prices are in the offing and may be a limiting factor for economic growth. Historically, production costs have fluctuated as influenced by the cost-increasing effects of depletion versus the cost-reducing effects of technological progress. This paper aims to review several methods for assessing current and long-term costs. Despite the uncertainty of such estimation, evidence shows that production costs in the foreseeable future might not increase dramatically and actually could decrease as petroleum development methods improve and additional supplies come online. Recent examples include the commercially viable production of unconventional oil and gas resources that has kept energy prices contained. - Highlights: • Examination of petroleum (oil and gas) production costs. • Methodologies and sources are discussed. • Methods for future cost estimation assessed. • Supply cost curves are estimated for conventional and unconventional petroleum. • Costs may decrease as development methods improve and supplies come online