Chevron Says Energy Cost Inflation Isn’t a Concern Right Now

(Bloomberg) -- Chevron Corp. doesn’t see cost inflation as a significant issue, at least not so far, despite widespread concerns about rising wages and raw materials costs.

“Our sector is operating below pre-Covid capacity,” Chief Financial Officer Pierre Breber said in an interview on Bloomberg TV. “There’s a lot of talk about costs going up but we’re not seeing it at this point in time.”

While Breber said the oil company does see some tightness in the U.S. truck driver market affecting its downstream operations, the really big-ticket items for Chevron like drill rigs are still experiencing excess capacity.

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Rival U.S. oil driller Hess Corp. said this week it’s seen some cost inflation, but not enough to raise its $5.8 million per-well forecast for drilling and fracking costs this year.

In contrast, oilfield services companies are feeling the pinch, amid global supply chain snarl-ups and a greater exposure to wage inflation. “The industry will have to pay more to get back the expertise that it has lost,” Clay Williams, chief executive officer for NOV Inc., one of the world’s biggest suppliers of oil gear, said this week on a conference call.

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