Upstream cost deflation: How far will development costs fall?

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Report summary

Development costs for new projects will deflate by as much as 30% during 2015, with some of the largest falls in tight oil and deepwater projects.

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    Upstream cost deflation: How far will development costs fall?

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Table of contents

  • Development costs are falling in all sectors
  • North American unconventional costs respond fastest with falls of 25-30%
  • Deep and ultra-deepwater deflation will be about 20-25 %
  • Shallow offshore conventional projects costs will fall by 18-23%
  • US Dollar appreciation helps many onshore conventional regions
  • Collaboration will be critical in achieving efficiency gains
  • Better project economics
  • Development costs deflation will reward investment through the cycle

Tables and charts

This report includes 3 images and tables including:


  • Development cost deflation by category
  • Service sector margins
  • Impact of deflation on unsanctioned deepwater project returns

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