| Written by Mark Buzinkay
Table of contents:
- Why Is The Offshore Oil Industry So Important?
- Offshore Drilling For Oil
- Offshore Drilling For Oil: Exploration
- Offshore Drilling For Oil: Appraisal
- Offshore Drilling For Oil: Development
- Offshore Drilling For Oil: Production
- Offshore Drilling For Oil: Maintenance
- Offshore Drilling For Oil: Decommissioning
- FAQs
- Takeaway
- Glossary
Why is the offshore oil industry so important?
Offshore oil is a major global business because it plays a crucial role in meeting the world's energy needs, supports national economies, and drives enormous industrial activity. A significant portion of the world's remaining oil and gas reserves lies beneath the ocean floor. As onshore resources become harder to access or deplete, offshore exploration and production become increasingly important. In fact, offshore fields contribute roughly 30 per cent of the world's oil output and over 20 per cent of its natural gas supply.
The demand for oil remains high—exceeding 90 million barrels per day globally—despite the rise of renewable energy sources. Offshore oil is vital in meeting this demand. For many countries, such as Norway, Brazil, and Saudi Arabia, offshore oil and gas production is a cornerstone of their economies. It generates large shares of their GDP, funds public services through taxes and royalties, and supports thousands of jobs. Controlling offshore oil fields also gives countries strategic and geopolitical advantages.
From an economic and industrial standpoint, offshore oil is a massive driver of investment. Projects often require billions of dollars in funding and involve complex infrastructure, including drilling rigs, floating platforms, supply vessels, and remote monitoring systems. This creates an extensive supply chain that spans construction, logistics, engineering, safety systems, and technology.
What makes offshore oil especially impressive is the level of engineering involved. Exploration and production often take place in deepwater environments over 2,000 meters deep and under extreme weather conditions. These challenges have led to significant technological advancements in automation, remote sensing, and subsea engineering.
Despite the high upfront costs and long timelines, successful offshore oil fields can produce oil for two to three decades, delivering stable, long-term revenue. For global energy companies like Shell, BP, and Equinor, offshore assets remain central to their long-term strategies. Additionally, offshore oil contributes to national energy security by helping countries diversify their energy sources and reduce reliance on imports. (1)
Offshore drilling for oil
Offshore drilling for oil is a complex, multi-phase process that involves advanced technology, strict environmental and safety protocols, and coordination across various disciplines. The lifecycle of an offshore oil asset typically follows these phases (2):
1. Exploration → seismic mapping
2. Appraisal → test wells + data collection
3. Development → build platform + drill production wells
4. Production → extract, process, transport
5. Maintenance → operations, inspection, safety
6. Decommissioning → plug wells, remove equipment, remediate
Offshore drilling for oil: Exploration
The exploration phase of offshore oil drilling is a highly technical and capital-intensive process aimed at locating and evaluating potential hydrocarbon reserves beneath the ocean floor. It begins with extensive geological and geophysical studies that help identify sedimentary basins likely to contain oil and gas. These basins are often selected based on tectonic history, sediment composition, and data from previously drilled wells in nearby areas.
The primary tool used during this phase is seismic surveying. Specialised ships tow arrays of air guns and hydrophones across the water's surface, sending sound waves into the seabed. These waves reflect off different rock layers and return to the hydrophones, producing raw data that is later processed into detailed three-dimensional images of the subsurface. These seismic images enable geologists to visualise geological structures, such as anticlines, faults, and salt domes, that may trap hydrocarbons.
Once a promising target is identified, the operator must secure exploration rights from the relevant government or regulatory body. This involves applying for licenses or lease blocks, often through competitive bidding rounds. Companies must also conduct thorough environmental impact assessments to ensure that the planned activities do not unduly harm marine ecosystems, fisheries, and coastal communities.
This early stage involves considerable uncertainty, as even the most promising geological structures may prove to be dry holes. Nonetheless, exploration is the gateway to offshore oil production, and advances in seismic technology and data interpretation have significantly improved the success rate of finding commercially viable fields.
Offshore drilling for oil: Appraisal
The appraisal stage follows a successful exploration effort and is focused on determining the size, quality, and commercial viability of the discovered oil or gas reservoir. While an initial exploratory well might confirm the presence of hydrocarbons, it reveals limited information. Appraisal is about gathering sufficient data to assess whether developing the field is technically feasible and economically justifiable. This phase typically involves drilling one or more additional wells, known as appraisal wells, in different locations within the same geological structure. These wells help define the extent of the reservoir, the thickness of the hydrocarbon-bearing formations, and the variation in rock and fluid properties across the field.
Advanced downhole tools are deployed to gather data on pressure, temperature, porosity, permeability, and fluid composition. Techniques such as wireline logging, core sampling, and well testing are used to construct a more accurate geological and reservoir model. Engineers simulate reservoir behaviour over time, forecasting how much oil or gas can be produced and at what rates. This modelling informs key decisions about good placement, production strategies, and infrastructure requirements.
In parallel, economic and risk assessments are conducted. These include cost estimates for development, expected production volumes, and analyses of oil price scenarios. Regulatory approvals may also be revisited, particularly if the appraisal results suggest changes to the initial development plan. Ultimately, the goal of the appraisal is to reduce geological uncertainty and financial risk, enabling the operator to make an informed investment decision—known as the Final Investment Decision (FID)—on whether to proceed with full-scale field development.
Offshore drilling for oil: Development
The development stage begins once a discovery has been appraised and deemed commercially viable. This phase transforms a subsurface resource into a functioning offshore production system. It is one of the most complex and capital-intensive stages, involving detailed engineering, logistical planning, procurement, and construction. The goal is to design and build the infrastructure necessary to extract, process, and transport hydrocarbons efficiently and safely over the life of the field.
At the heart of development is the design of the production wells. Engineers determine the number, depth, orientation, and completion techniques based on reservoir models created during the appraisal process. Wells may be vertical, deviated, or horizontal to optimise reservoir contact. At the same time, decisions are made about the type of offshore production facility best suited to the location, water depth, weather conditions, and expected output. This could be a fixed platform, a floating production unit such as an FPSO, or a subsea tieback system connected to an existing structure.
Construction of topside facilities, subsea equipment, and pipelines occurs concurrently across multiple sites, including fabrication yards and shipyards. These components are then transported to the offshore location and installed using heavy-lift vessels and specialised marine equipment. Subsea flowlines, risers, and control systems are connected to allow fluid transfer from the wells to the platform. Safety and control systems are rigorously tested, and commissioning begins to ensure all components operate as intended.
The development stage culminates in the transition to production, as the first oil or gas is achieved and the field begins generating revenue.
Offshore drilling for oil: Production
The production stage marks the operational phase of an offshore oil field, where hydrocarbons are actively extracted, processed, and transported for sale. This stage can last for decades, depending on the size and productivity of the reservoir. It begins once all systems have been commissioned and the wells are brought online, delivering the first flow of oil or gas—an event commonly referred to as "first oil." From this point forward, the focus shifts from construction to optimisation, safety, and sustained output.
Oil and gas are brought to the surface either by natural reservoir pressure or with the aid of artificial lift systems such as gas lifts or electric submersible pumps. The fluids that emerge from the well are typically a mixture of oil, natural gas, water, and sediments. These are routed through a separation system on the platform or floating production unit, where the oil and gas are divided from water and other impurities. The separated water is treated and either reinjected into the reservoir to maintain pressure or safely discharged if it meets environmental standards.
The processed oil is transported to shore through undersea pipelines or stored on a floating production storage and offloading (FPSO) unit, from which it is transferred to shuttle tankers. Natural gas may be compressed and piped directly to onshore facilities, reinjected for pressure support, or, in some cases, flared if infrastructure is not available.
Maintaining production efficiency requires constant monitoring and intervention. Advanced control systems track well performance, equipment condition, and flow rates in real time. Offshore teams conduct routine inspections and preventive maintenance to avoid equipment failures and environmental incidents. Safety is paramount, and rigorous procedures are followed to manage risks such as blowouts, leaks, and extreme weather.
Over time, reservoir pressure declines, and production typically tapers off. Operators implement enhanced recovery methods, such as water flooding or gas injection, to extract additional volumes. Despite these efforts, the rate of production will gradually decrease, signalling the eventual transition to the field's final phase: decommissioning. Still, the production stage remains the most visible and economically productive part of an offshore field's life cycle.
Offshore drilling for oil: Maintenance
Maintenance and safety are fundamental components of offshore oil operations, ensuring the reliability of production systems and protecting personnel, assets, and the environment. Given the remote and often hazardous nature of offshore environments, maintaining operational integrity requires a comprehensive, proactive approach. This stage runs parallel to production and spans the entire lifecycle of the offshore asset (see also: EHS audit on offshore installations).
Maintenance encompasses both preventive and corrective strategies. Preventive maintenance is scheduled regularly and involves inspections, testing, and servicing of equipment to prevent failures before they occur. Critical systems, including blowout preventers, pumps, valves, pipelines, and power generators, are monitored and maintained to ensure consistent performance. Corrective maintenance is a reactive process carried out when equipment malfunctions or exhibits signs of wear. Modern offshore platforms are equipped with sophisticated monitoring systems that use sensors and data analytics to detect anomalies, predict failures, and optimise maintenance schedules, reducing downtime and extending asset life.
Safety is deeply integrated into every aspect of offshore operations. Strict protocols govern everything from equipment handling and emergency response to helicopter transport and hazardous material management. Personnel undergo regular safety training, including fire drills, evacuation procedures, and the use of personal protective equipment. Safety systems, including gas detectors, fire suppression units, lifeboats, and emergency shutdown systems, are routinely inspected and tested. Additionally, remote monitoring and automated control systems enhance safety by reducing the need for manual intervention in high-risk areas.
The harsh offshore environment—characterised by storms, corrosive saltwater, and mechanical stress—demands constant vigilance. Regulatory bodies enforce compliance with international safety standards, and operators are required to conduct audits, risk assessments, and environmental impact reviews. By prioritising maintenance and safety, offshore operators not only protect human life and the environment but also safeguard the continuity and profitability of their operations in some of the world's most challenging industrial settings.
Read also: Oil rig security
Offshore drilling for oil: Decommissioning
Decommissioning is the final stage in the life cycle of an offshore oil and gas asset, occurring when a field is no longer economically viable or technically feasible to continue production. It involves a carefully managed process to safely dismantle offshore infrastructure, seal wells, and restore the marine environment. Given the complexity, environmental sensitivity, and regulatory scrutiny involved, decommissioning requires meticulous planning and execution.
The process begins with the plugging and abandonment of wells. Engineers use cement and mechanical barriers to permanently isolate the wellbore, preventing any future leaks of hydrocarbons or formation fluids. This stage must meet strict regulatory standards to ensure long-term well integrity. Once the wells are sealed, attention turns to the removal of surface and subsea infrastructure. Topsides, jackets, subsea templates, risers, and pipelines are dismantled using heavy-lift vessels and transported to shore for recycling or disposal. In some cases, portions of the infrastructure are left in place under "rigs-to-reefs" programs, where they serve as artificial reefs to support marine life.
Throughout decommissioning, environmental assessments are conducted to monitor potential impacts and to ensure that the seabed is left in a safe, clean condition. Regulatory bodies require documentation and verification that all equipment has been removed or adequately repurposed. Costs for decommissioning can be substantial, often running into hundreds of millions of dollars, and are typically budgeted for throughout the field's production life. Although it marks the end of operations, decommissioning is a critical phase that ensures offshore development concludes responsibly and with minimal environmental legacy.
FAQ - Offshore Drilling for Oil
What is offshore oil drilling, and why is it important?
Offshore oil drilling is the process of extracting petroleum from reserves located beneath the ocean floor. It plays a critical role in meeting global energy demand, accounting for about 30 per cent of the world's oil production. It also supports national economies, generates employment, and drives innovation in engineering and marine operations.
How deep do offshore drilling operations go?
Offshore drilling can occur in shallow waters less than 200 meters deep or extend into deepwater and ultra-deepwater zones that reach depths of over 3,000 meters. Advanced technologies such as floating rigs and subsea systems enable drilling in extreme conditions far from shore.
How are offshore oil rigs kept safe and secure?
Offshore rigs are secured through a combination of physical barriers, surveillance systems, and strict operational protocols. Safety involves regular maintenance, well-control systems, and emergency preparedness. Security also includes cyber protection, crew access management, and real-time monitoring to detect threats, ensuring the safety of both personnel and the environment.
Takeaway
Offshore drilling is a complex, multi-stage process that transforms undersea oil reserves into a reliable energy source supporting economies worldwide. Each phase—from exploration to decommissioning—requires precision, planning, and long-term investment. As offshore platforms operate in remote, high-risk environments, security is a growing priority. Protecting oil rigs from accidents, cyber threats, and unauthorised access is essential to safeguard personnel, prevent environmental disasters, and ensure uninterrupted production. The integration of advanced surveillance, access control systems, and emergency protocols is now a core component of offshore operations, making security as vital as engineering in the modern offshore oil industry.
Delve deeper into one of our core topics: Personnel on board
Glossary
A geological structure refers to the arrangement and orientation of rock layers and features within the Earth's crust, such as folds, faults, domes, and anticlines. These structures influence how and where oil and gas can accumulate. In petroleum geology, identifying favourable structures is critical to locating hydrocarbon reservoirs, as they often act as traps that prevent oil and gas from migrating. Accurate interpretation of these structures is essential for successful exploration and drilling.
References:
(1) https://www.iea.org/reports/oil-market-report-april-2025
(2) https://www.noia.org/wp-content/uploads/2021/08/The-Gulf-of-Mexico-Oil-Gas-Project-Lifecycle.pdf
(3) Selley, R. C. (1998). Elements of Petroleum Geology (2nd ed.). Academic Press.
