The head of a major oilfield service firm has warned against a return to the days of escalating supply chain prices — and of acting like “drunken sailors”.
Lorenzo Simonelli, chief executive of Baker Hughes, a GE company, companies needed to keep a lid on costs amid an improvement in crude prices.
Speaking at the Adipec conference in Abu Dhabi, he said: “Are we going to see inflation return and a loss of profitability? We’ve got to manage the situation and work together differently.
“We all need to use what we’ve learned and not go back to the old way of doing things, which is ‘drunken sailors’.
“We can’t just keep doing ‘splurge and contract, splurge and contract’.”
David Dickson, chief executive of McDermott, said: “A lot of focus has been placed on reducing lifting costs. But most of the reductions have come from deflation.
“We have all worked hard to cut costs, but industry is on the cusp of an uptick in prices. I’ve seen that. We have to make sure costs do not rise.
“We’d all look stupid if we went back to where we were before.”
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