Drilling valuable energy resources from the ground is a complex process. Whether your company is drilling on dry land or at the bottom of the sea, there will always be challenges in extracting oil and natural gas.
Understanding the differences and benefits of these two approaches will help onshore drilling businesses expand into the offshore market and vice versa.
In this article, we break down the basics of onshore and offshore drilling, highlight their advantages, and compare them head to head.
An Overview of Oil and Gas Drilling in 2024
Crude oil production facilities have steadily declined in the past few years, primarily due to the uptake of renewable energy sources. US drilling activity has been on an annual decline of ~5%.
However, despite the demand reduction, 2023 saw a record-high production of nearly 13 million barrels of crude oil, 9% higher than in 2022.
Prices of gasoline have also been steadily growing in Q1 of 2024, keeping the oil and gas industry as profitable as ever.
What is Onshore Drilling?
Onshore drilling, also called land drilling, is the process of extracting oil and gas trapped just below the earth’s surface. Massive drilling rigs, several hundred feet tall and occupying acres of land, are used.
Geological surveys help determine the presence of underground oil and natural gas reserves. Onshore drilling sites are mostly found in regions with plenty of oil reserves, relatively close to one another.
The equipment used for onshore drilling is modular, meaning it is stored in parts and assembled on drilling sites as needed. An onshore drilling site will have multiple wellbores (holes for oil extraction).
As one wellbore depletes, the drilling rig is disassembled and reassembled on the second well. Unlike oil drilling, natural gas only requires a single well every 80 acres of land.
Advantages of Onshore Drilling
The significant advantages of onshore drilling all come down to the fact that it’s cheaper and more efficient.
- Lower Cost of Operation – Onshore drilling operations are considerably more cost-effective. The equipment is lower cost, time on the job site is minimal, and additional equipment can be sourced locally.
- Convenient Rig Deployment – Onshore drilling rigs are easier to assemble on dry land than on the ocean surface.
- Better Work Schedule – Workers on a land drilling site work traditional 9 to 5 work hours.
- Easy Transportation of Resources – After extracting oil from the ground, it can be easily transported to a warehouse on commercial trucks.
- Economic Benefits – Onshore drilling creates jobs for local communities and supports the economy by utilizing local products.
Disadvantages of Onshore Drilling
The land is a valuable resource, and dedicating habitable land for drilling operations comes with several unwanted side effects.
- Logistical Limitation—Some oil reserves are on privately owned land or in a residential district. Drilling in such areas is legally and logistically unfeasible for a business.
- Environmental Considerations – The drilling process is loud, disruptive, and damaging to local wildlife, water sources, and plantations.
- Future Scalability – Onshore drilling operations will always be limited by the availability of inhabitable land. In the future, most onshore drilling sites will be depleted.
- Post-Drilling Damage – The drilling process can cause serious damage to the land (oil spills, chemical leakage, soil damage, etc.).
What is Offshore Drilling?
Offshore drilling is the process of extracting oil and gas from underwater reserves using heavy-duty industrial equipment that sits atop the water. It uses the same equipment as onshore drilling but with a few key differences.
Any offshore drilling rig will have a solid platform that supports the drilling rigs, an underwater support structure that connects the platform stationary, and a drilling apparatus that runs through the water down to the ocean floor.
While onshore drilling uses the same basic equipment, offshore drilling utilizes several tools to tackle the massive titan that is the ocean.
Underwater drilling depth and climate conditions determine the type of offshore drilling rig required for the job.
Types of Offshore Drilling Rigs
As of this article, here is the definitive list of all the offshore rigs available in the market.
| Type of Rig | Description |
|---|---|
| Jack-Up Rigs | Mobile rigs that can be moved and anchored from one location to another. |
| Barge Rigs | Small mobile rigs that operate in shallow water. |
| Submersible Rigs | Rigs that float to a job site and anchor themselves by submerging their bottom half in the water until it hits the ocean floor. |
| Semi-Submersible Rigs | Submersibles that require additional anchors to hold the rigs to the ocean floor. |
| Platform Rigs | Fixed platforms that stand on large pillars of steel or concrete. |
| Complaint Towers | A flexible truss structure that connects a fixed drilling platform to the ocean floor. |
| Tension-Leg Platforms | Uses massive cables to anchor a mobile drilling platform. |
| Spar Platforms | Similar to tension-leg platforms, but with the addition of a cylindrical base that provides greater stability against ocean currents. |
| Drill Ships | Massive ships that act as an all-in-one mobile drilling unit. |
Advantages of Offshore Drilling
Offshore drilling is generally more profitable as oil and natural gas reserves are abundant underwater.
- Higher Yields – There are greater reservoirs of oil and natural gas below sea level. Thus, offshore drilling is more profitable.
- Future Proof – The abundance of underwater oil and gas reserves ensures your business will always have future drilling opportunities.
- Lower Community Impact – Offshore drilling takes place several hundred miles away from residential areas, reducing its impact on local communities.
- Lower Taxation on Offshore Oil Drilling – In the US, the tax rates on the drilling process are much higher than in other nations that govern international waters.
- Economic Benefits – Offshore drilling promotes economic growth in countries and regions whose shores are closest to the drilling rig.
Disadvantages of Offshore Drilling
Before you set sail to the high seas in search of crude oil, be aware of the following shortcomings of offshore drilling operations.
- Heavy Investment Costs – Offshore drilling rigs come with several additional cost factors such as material costs for the sea platforms and transportation costs for drilling equipment.
- Climate Challenges – Climate on the seas can get particularly rough. Any offshore drilling process will be halted in the case of bad weather.
- Transportation Issues – Resources extracted need to be shipped to the nearest land warehouse, which creates logistical challenges. Oil spills are a common occurrence in the oil and gas industry.
- Regulations and Safety – Offshore drilling operations must abide by local and international rules and regulations for safety. Navigating the complex rules of the sea can be challenging for most veterans.
Comparison of Onshore and Offshore Drilling
Onshore and offshore drilling operations follow the same basic steps.
Geological surveys confirm underground oil and natural gas reserves, businesses rush to acquire drilling rights to the site, a drilling rig bores wells several thousand feet into the ground, and finally, natural resources are siphoned to ground level.
Appeal of Onshore Drilling
- Lower Investment Cost for New Businesses
- Job Sites are Easier to Manage
- It Takes Less Time to Setup the Drilling Rig
- Transportation of Resources is Easier
- Lower Risk of Accidents
Appeal of Offshore Drilling
- Considerably Greater Production Rate
- Potential Global Customer Base
- Abundant Resources and Opportunities
- Many Regions Offer Tax Incentives for Oil/Gas Drilling
The two extraction methods differ in logistical, environmental, and financial factors.
| Attribute | Onshore Drilling | Offshore Drilling |
|---|---|---|
| Initial Investment Cost | Low | High |
| Production Capabilities | High | Low |
| Transportation of Goods | Easy | Difficult |
| Future Scalability | Low Potential | High Potential |
| Economic Benefits | Local Economy Boost | Foreign Economy Boost |
| Risk Factor (Accidents) | Low | High |
| Regulations & Compliances | Regional & National Regulations | Regional, National & International Regulations |
| Environmental Impact | Damage to wildlife, plantlife, and clean water sources. | Damage to marine ecosystems, risk of oil spills, and contamination of sea water with chemicals. |
| Taxation Rates | High Local Taxes | Lower International Taxes |
| Work Hours | 9 to 5 day and night shifts | Months long deployment on a drilling vessel |
Onshore and Offshore Drilling Equipment
Source: HowStuffWorks
Now, moving on to the tools that are at the heart of the oil and gas industry.
The key components that makeup oil and gas drilling rigs are generally the same across all mining and extraction processes.
Businesses often add proprietary equipment to job sites for higher extraction efficiency.
- Derrick – A vertical support structure that stands over 100 ft. tall, holds the drilling line, and oil/gas extraction pipes, and supports casing installation.
- Drill String – The drilling apparatus consists of a drill pipe, drill collars, and a drill bit.
- Drill Bit – The cutting tool at the end of the drill string. It’s made of strong materials like tungsten, diamond, and carbide steel and comes in several shapes and sizes.
- Mechanical Drivers – Motors that power the drilling rigs and the vacuum pumps that extract oil and gas from the well.
- Electricity Generators – Large diesel generators power the drilling rig.
- Casing – Metal pipes of varying diameter and length that provide structural integrity to the drill hole.
- Blowout Preventers – Pressure relief valves that prevent the build of excess pressure inside the wellbore.
- Mud Circulation System – Mud is an abrasive compound that helps the drill cut through the ground with ease. A dedicated circulation system manages the flow of mud.
- Storage Tanks – Massive air-tight metal shells that are used for safely storing natural resources.
5 Safety Measures for the Oil and Gas Drilling Process
Proper safety measures and hazard reduction policies are the cornerstone of a healthy and productive workplace. Whether drilling on land or in the middle of the Atlantic Ocean, always abide by proper on-site safety measures.
The US Department of Labor has outlined clear and concise safety guidelines for the oil and gas industry under OSHA.
Here are some of the major steps that businesses can take to keep their job sites safe and risk-free.
1. Adequate Safety Equipment
Proper safety equipment is mandatory for all jobs involving heavy machinery and hazardous materials.
Drilling operations must include the following: protective equipment: hard hats, safety goggles, masks, globes, flameproof clothing, air filtration systems, etc.
Additional safety practices include minimizing worker presence near heavy machinery and sectioning different sectors of the rigs to prevent mishaps.
2. Emergency Shutdown Policy
All offshore and onshore oil drilling rigs must have a thorough emergency shutdown policy that has been shared with the working staff.
Equipment malfunction, accidental fires, and toxic gas releases are common threats on a drilling job site.
3. Accounting for Human Error
Even the most sophisticated and robust electronic systems can fail due to human error. Miscalculations on equipment operation parameters or improper equipment maintenance can cause catastrophic damage to the drilling site.
A good means of accounting for human error is to have several levels of checks and balances. If key inputs are monitored and verified by multiple on-site personnel, it will drastically reduce the risk of accidents.
4. Regular Inspections and Maintenance
Drilling equipment weighs a metric ton and is under constant stress and pressure. Regular inspections of joints, support structures, safety valves, storage tanks, motors, etc., boost worker and equipment safety.
Timely monitoring, assessment, and maintenance also extend the longevity of the drilling equipment.
5. Proper Storage of Transportation
Crude oil and natural gas are exceptionally volatile. Even minor leaks and spills can quickly escalate to full-blown fires and explosions.
Storage tanks should be properly maintained and regularly replaced and transportation should be carried out at night time to avoid traffic.
Particular care should be given to truck drivers, as sleep deprivation is a real issue in the transportation industry and leads to horrible accidents on the road.
FAQs
Question 1 – What is the Difference Between Vertical and Horizontal Drilling?
In the vertical drilling process, the wellbore is at a straight 90° to the earth’s surface. Comparatively, any wellbore that is less than 90° falls under the definition of horizontal drilling.
Question 2 – Do You Use Different Machines for Oil and Gas Drilling?
The oil and gas industry uses the same basic drilling machinery to bore a well into the ground. The only difference lies in the type of pumps and tubes that are used to extract the natural resources.
Question 3 – Is Offshore Drilling Better Than Onshore?
Offshore drilling has a higher initial investment cost than onshore drilling and results in higher oil/gas production rates. However, onshore drilling operations are more cost-effective.
Conclusion
Onshore and offshore drilling processes are the same, with slight changes in rig design. Onshore (land) equipment is more modular with an emphasis on efficiency, while offshore (sea) equipment requires additional components that provide stability against ocean currents.
Choosing the right approach for your business all comes down to scale. If you have the funds to invest in offshore drilling operations, you will see higher returns on your investment.
Start Drilling Your Way to Success with Everstar!
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Everstar’s commitment to excellent customer service is highlighted in our comprehensive after-sale services program, which includes free rig installation and operator training.
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