Offshore Drilling

Craig Jones
December 15, 2016

Submitted as coursework for PH240, Stanford University, Fall 2016


Fig. 1:Jack up rig in the Caspian Sea. (Source: Wikimedia Commons

Despite the recent environmental disaster in the Gulf of Mexico, demand for oil has only increased, and one of the most readily accessible sources of oil is offshore drilling. This resurgence is brought about by the ever-increasing demand for energy by consumers, not just in the United States but the growing demands of China and India. [1] Coupled with turmoil in the Middle East and Africa, despite the safety and environmental hazards, offshore drilling is becoming the go to method of extraction.

Drilling Process

The process begins when oil and gas exploration and production companies lease offshore tracts from governments. The companies then come up with a plan that typically involves drilling several exploratory wells to determine the overall viability of the project. If these wells produce results that will lead to quality fuels they are followed up by development wells which will extract the reserves. [2] The rigs used to extract the resources fall into two classifications, shallow-water rigs which can rest on the ocean floor, and deepwater rigs which float while they drill. Over 2/3 of the global rig fleet are shallow-water jack up rigs which range in price from $80-100 million and can be seen in Fig. 1.

Saftey Concerns

Along with the environmental concerns that are posed by offshore drilling, there are also very valid safety concerns, the largest of which is the storage of extremely flammable materials aboard the oil rig, especially in the case of large offshore platforms. One safety suggestion presented to the design and layout of offshore rigs is to maximize the distances between gas pressure facilities as they represent the largest risk. [3] While the world looks to shift towards more forms of renewable fuel sources, oil will still be a key energy source, and so steps must be taken to look for it, and extract it, safely.

© Craig Jones. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.


[1] C. Krauss and J. M. Broder, "Deepwater Oil Drilling Picks Up Again as BP Disaster Fades," New York Times, 4 Mar 12.

[2] K. S. Corts, "The Effect of Repeated Interaction on Contract Choice: Evidence from Offshore Drilling," J. L. Econ. and Org. 20, 230 (2004).

[3] F. I. Khan and P. R. Amyotte, "Inherent Safety in Offshore Oil and Gas Activities: A Review of the Present Status and Future Directions," J. Loss Prevent. Proc. 15, 279 (2002).