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3 Jun, 2008 03:39

High inflation to boost oil wages

Inflation in Russia may reach 14% this year and the risk of the economy overheating is growing, according to the International Monetary Fund (IMF). The head of Schlumberger has told RT that the oil and gas industry is challenged by soaring salary costs.

Poul Thomsen, an IMF official in Russia, told reporters on Monday he considers Russia’s economy to be “overheating”. Among the signs he named was high inflation, soaring demand, rising imports and wage hikes which are outstripping increases in productivity.

Against this background, RT spoke to Andrew Gould, the CEO of Schlumberger, about the impact inflation has on the oil and gas industry.

“By far the most difficult is the inflation of wage costs or salary costs because there's a worldwide shortage of oil and gas professionals and everyone is competing to hire the same people. And this is likely to go on for a number of years,” he said.

Schlumberger is the world’s leader in oil field service.