UPDATE: Total E&P Head: Most Indus Costs Set To Fall In 2009

Oil industry investment costs are set to fall across the board in 2009, in a new oil price environment that could prove advantageous to big oil companies, the head of exploration and production at oil major Total SA (TOT) said Wednesday.

"Some costs have already have come down in specific areas during the second half 2008, gas turbines are a good example," Yves Louis Darricarrere told delegates at an energy conference in Paris.

"We expect to see much more of this almost everywhere in 2009," he said. "There might be a few exceptions, such as subsea equipment, but costs will as a rule go down unless oil prices rise faster than expected."

While costs must reflect the current market conditions, Darricarrere reiterated Total's mid- to long-term view for oil markets remains unchanged by a major fall in prices since their July 2008 peak.

"There may even be a case for saying that the new [price] environment will provide more opportunities for the majors than a $100 [a barrel] plus context," Darricarrere said.

"We believe that our playing field is again expanding compared to our recent past," he said. "In these challenging times, the weakest will be tested and only the most competitive will survive in the new reality."

Total's management has stated many times the need to maintain investment despite a collapse in oil prices from their record highs nearly a year ago.

-By Adam Mitchell, Dow Jones Newswires, [phone]; [e-mail]