AM-10-131 Project Capital Cost – Review and Outlook

Description:

From 2003 through mid 2008, project sponsors watched project costs go one direction – up. From 2000 to mid 2008, the weighted cost of materials nearly doubled. In the Middle East, budgets for projects originally estimated at $5 billion grew to $15 to $20 billion. In the Canadian oil sands, budgets for many projects skyrocketed. While these are extremes, there is no question that there were severe cost pressures. Then, “the bottom fell out.” From mid 2008 to early 2009, the spot price of steel fell by at least 25%, nickel and chromium by about 50% and copper by nearly 70%.