• David Armes

How Offshore Oil Rigs Work (video)

Updated: Apr 29



Today we'll take a look at oil rigs and how they work - everything from the economics of spending hundreds of millions on building to a rig, how they move, what life looks like on the rig, and the sheer size of these structures. We have some great videos and a lot of fun facts to uncover. Let's go!


The Costs of oil production vary significantly from country to country. This means changing oil prices have a profound effect on the nations and their economies. As oil production increases, costs to produce that oil increase. Eventually, the cost to produce an additional barrel of oil are so high that it doesn’t make sense to do so. This point varies by price of oil and costs to extract - it can change rapidly as global supply and demand changes.


Oil location has a large impact on the cost to extract. Oil can be found anywhere from the middle of a field where the installation of oil derricks is relatively easy to the middle of the ocean where a huge oil rig platform is needed with a 24/7 crew. The investments needed to get the oil out of the ground and processed are still dependent on the current price. The graph below shows how the price of oil matches with the production.



Image Credit: Wendover Productions (screenshot)


So, given the cost, why would a company build an offshore oil rig that costs up to 20 times more than an onshore drilling rig? With an average price tag of $650 million, offshore drilling is an expensive proposition. Well, as good places to drill on land dry up or are already being tapped, people turn to the ocean. There is a lot of oil beneath the ocean floor, so the higher startup cost offsets the long term return. Bigger rig, bigger investment, and more oil in your barrel.


Where are these rigs set up? Usually drilling locations are chosen near where other rigs are already drilling such as the Persian Gulf, Gulf of Mexico, or the North Sea. How do they pick the exact spot? Geological surveys and satellite images are used to find the best specific location. Once a rig is on location, it doesn't have to stay there. If the oil in a well runs dry or the rig needs maintenance, offshore oil rigs can actually travel to different locations. Initially, offshore rigs are towed out to sea and installed, but many people don’t realize that the huge rigs they see out in the ocean are mobile. Common reasons for the rigs to be moved are to go to a new location or simply to be brought back to shore for maintenance. For the most part though, they stay in one place for years at a time. If they aren’t drilling, they aren’t getting oil!


In the video below, Scarabeo 9, a large, semi-submersible rig built by Saipem is crossing the Bosporus Strait. It’s destination? A shipyard where it will get maintenance for future jobs. In the video you can see it passing under 3 bridges, just barely clearing the last one!


Some offshore rigs are anchored to the bottom of the ocean while others use dynamic positioning to stay in place. Dynamic positioning uses very high tech computer algorithms to control thrusters that keep the vessel on location. The vessel's navigation, power and control systems are all integrated, helping the vessel stay stationary in changing weather conditions. This is where OneStep Power comes in - we test dynamically positioned DP2 and DP3 vessels for safe operation with our proprietary GVRT and DCShortCUT technologies.


Image Credit: Saipem

Workers generally work 12 hours on and 12 hours off for 2-3 weeks while on board, then take 2-3 weeks off shore-side. The journey is usually via helicopter. These trips back and forth have created an entire industry of helicopter companies with hundreds of choppers travelling to and from offshore rigs. The North Sea oilfield is just off of Aberdeen, Scotland, where a small regional airport is the world’s busiest heliport, or helicopter airport. At least 100 helicopters take off each day on trips to the platforms in the North Sea.


Although people are transported via helicopter, supplies are transported via supply vessels that run to the platforms and back to shore. The oil from the rigs is usually transported to shore via an undersea pipeline. With hundreds of rigs offshore and all the air, water, and undersea travel, you can imagine that Aberdeen is a busy place!


Image Credit: Wendover Productions (screenshot)


On the rigs, there are four main categories of jobs: production, maintenance, and service. Production workers are involved with the production of oil directly, while maintenance workers upkeep the platforms. Service handles the care of the workers such as cooking, cleaning, or medical service for the rest of the crew. Anyone working on the rig in an offshore capacity typically makes more than an onshore worker. Therefore, as many people as possible work onshore communicating with the workers on the rig who are mostly operational.


How big are these rigs? In photos, oil rigs appear to be a small platform, or maybe even a large building. They’re miles off shore, oftentimes too far to see from land. If you are able to see a rig in person from the shore, it probably looks like a tiny speck on the horizon. These rigs are actually more like a small town than the small platform they appear to be.


Image Credit: NPR


Above is a photo of Shell’s Olympus oil rig that operates 130 miles off the coast of New Orleans. At quick glance, it looks like a small rig. Take a closer look, and you might think there are 3 or 4 stories, larger than you originally thought. Olympus is actually 40 stories tall, about 406 feet! It weighs over 120,000 tons (more than 300 Boeing 747 Jumbo Jets) and is home to a crew of 192 people. It sits 3100 feet above the sea bed, connected with steel pipes.

With almost 200 people on Olympus, it’s good they have 346,000 square feet of deck space. There are no windows because the rig needs to be able to withstand the hurricanes that frequent the Gulf of Mexico. To get to work, crews make a one hour helicopter ride and spend two weeks a time on board. Being away from family and friends can be tough, but it’s like a hotel at sea, with TV’s, games, and a gym. Everyone from galley hand to ballast engineers work together to keep the rig running. Through their efforts, up to 100,000 barrels of oil per day are pumped up from 18,000 feet below the seafloor, processed, and sent another 82 miles to shore.


Check out the video below of what life is like on Hebron, another of the world’s largest oil rigs!


The rigs offshore can be floating, tied to the ocean floor, or a fixed, basically a huge undersea tower. The tallest undersea tower is the Petronius, approximately 2000 feet, or 600 meters off the ocean floor. It’s the tallest freestanding undersea structure in the world. Petronius was the tallest freestanding structure until the Burj Khalifa surpassed it in 2009.


Image Credit: Wendover Productions (screenshot)


Is it worth the cost to spend anywhere from $150 million to $1 billion on an offshore oil rig?

Right now, the answer is no, due to oil prices in the $20-30 per barrel range. Offshore rigs are expensive to run and at low prices and low demand, it makes more sense to reduce offshore output and get oil from onshore sources. In short, onshore production is more flexible. However, in the longer term oil prices will likely even back out and offshore drilling will be productive. A second cost that is not often factored in is oil spills. Offshore production can result in serious disasters like BP’s Deepwater Horizon oil spill and subsequent clean up. This additional risk for low reward has resulted in flat growth in offshore oil in the last 15 years.


Overall, oil production is relatively flat over the last 20 years, and is likely to stay at this rate. With the complexity and cost of offshore rigs, expect continued upkeep and new rigs coming online as old rigs are retired.



This article was written with a lot of content from “VIDEO: How Offshore Oil Rigs Work” at gCaptain. You can see the original video “How Offshore Oil Rigs Work” by Wendover Productions. Please check them out at the links above. Wendover has many videos on how the world works on everything from aircraft carriers to Coronavirus problems.


Sources:

https://gcaptain.com/video-how-offshore-oil-rigs-work/

https://www.oedigital.com/news/477658-watch-giant-offshore-rig-passing-under-bosphorus-bridges

https://www.npr.org/2014/08/06/335282273/up-close-and-personal-with-a-40-story-oil-rig-in-the-gulf https://www.shell.us/energy-and-innovation/energy-from-deepwater/shell-deep-water-portfolio-in-the-gulf-of-mexico/mars-b-olympus.html



Happy Friday!


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