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According to an International Energy Agency (IEA) Medium Term Oil Market Report, which provides a global overview of demand and supply trends through to 2011: "...steel prices have gained 50 per cent since the mid-1990s. Drilling day rates have been rising by at least 10-15 per cent per year, continuing into 2006, with deepwater facilities in particularly tight supply. Day rates for semi-submersible facilities have at times attained record levels nearing $550-600,000. There is a general perception that tightness in drilling facilities will persist for some time...Advances in information technology have provided alternatives to the drill bit as a way of locating and appraising incremental reserves, at least in the first instance. Ultimately, there is no alternative to companies going out and drilling to verify the viability of discoveries. However, in the initial phases, less capital-intensive technologies can be employed. Despite this, exploration seems to have become the high cost, high risk 'poor relation' in the upstream investment portfolio..."
The situation seems grim. But IT is trying its bit to help the oil and gas industry. Of course, costs remain a major issue as even software development and other IT solutions do not come cheap. But perhaps these are worth it, given the losses that could occur in their absence.