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LONDON, Feb 5 (Reuters) - Oil and gas operating costs in theU.S. shale basins have come down recently following a drop incrude prices, BP's head of upstream Bernard Looney saidon Tuesday.
Costs of drilling, labour and materials such as sand inshale fields rose last year amid a surge in output, particularlyin the prolific Permian oil basin straddling Texas and NewMexico.
But a near 40 percent drop in crude prices in the lastquarter of 2018 have helped reverse the rise in service costs,Looney said.
"We're not seeing inflation around the world and in fact,even in the Lower 48, we are now beginning to see deflationagain as prices have come back down," Looney said in a analystcall after BP reported a doubling of profits in2018.
BP became a major shale oil and gas producer following theacquisition of BHP's onshore U.S. portfolio, known as the Lower48. Its production rose to 349,000 barrels of oil equivalent perday (boed) in 2018 from 297,000 boed the previous year.
BP's global production costs dropped by 45 percent fromaround $13.10 per barrel in 2013 to $7.24 last year, Looneysaid.(Reporting by Ron Bousso; Editing by Mark Potter)
