Trouble brewing for Opec as once costly deep-sea oil turns cheap

Singapore

REPORTS of deep-sea drilling's demise in a world of sub-US$100 oil may have been greatly exaggerated, much to Opec's dismay.

Pumping crude from seabeds thousands of feet below water is turning cheaper as producers streamline operations and prioritise drilling in core wells, said Wood Mackenzie. That means oil at US$50 a barrel could sustain some of these projects by next year, down from an average break-even price of about US$62 in the first quarter and US$75 in 2014, the energy consultancy estimates.

The tumbling costs present another challenge for the Organization of the Petroleum Exporting Countries, which is currently curbing output to shrink a glut. In 201…