The suspicion must be that this is an understatment not an overstatment. From this graph you can see that Gulf of Mexico drilling rig rates have trebled on the last two years. There are are other oil industry costs that have massively exceeded 10%

Yes, I think the global oil industry rate is 10% (at least).

Scarity has bid up a limited supply (in some cases dramatically) and even the raw materials used (steel & oil products are two largest) have gone up substantially.

Alan

To Hothgor

How to calculate a percentage of increase using simple mathematics.

A = Last measurement
B = increase
C = Percent of increase

A-B/A = C

(A-B/A)*A = C*A

A-B = C*A

-B = C*A-A

If we replace with actual numbers we get

-B = 0.70 * 340 - 340
-B = -102
B = 102

That's the increase of 70% in 5 years.  Starting year would then be 340-102 = $238 billion.  Using that REAL starting number, see what we get with an increase of 5% each year.

2000 = 238
2001 = 249.9
2002 = 262.4
2003 = 275.5
2004 = 289.27
2005 = 303.73

Well, that wasnt enough.  What about 7%, lets see :

2000 = 238
2001 = 254.66
2002 = 272.49
2003 = 297.20
2004 = 318
2005 = 340

Actual yearly increase should have been 7%, that pretty near real inflation rate as stated by shadowstatistic web site.

If you make an argument about some calculation (any) be sure to have enough mathematical literacy.

I had a physics teacher that was always saying that before pointing at the straw in the eye of others, someone should first notice the wooden beam that's in his.

it would surprise me if inflation in oil exploration and development costs is only 10 %    and that 4% global inflation    dream on     the reported about 3% inflation in us of a cpi is in reality more like 7 % when calculated in the old fasioned (before monica) way

Global oil inflation rate: Is operating at a very high level due to shortages of rigs, services, personnel, you name it. One of the down sides of cannibalising the industry's drilling infrastructure for the years 1990 - 2005 is the shortages now facing the industry.

In some sectors, Personnel rates have almost doubled.

Rig rates have never been higher.

This significantly impacts on Operator costs and an operators ability to get things done even with the higher Capex for Exp. and Appraisal drilling.

Simmons's presentations of late keep coming back to this issue.