In-depth briefing

Oil rigs: Cities at sea

A catastrophic oil spill has focused attention on the thousands of oil platforms that extract oil from offshore deposits.

How big are these platforms?
They’re enormous. The BP oil rig in the Gulf of Mexico that exploded April 20 was 400 feet by 250 feet—roughly the size of two football fields—with a crew of 130. Some rigs are even larger. In fact, many of today’s oil platforms are essentially floating cities that employ and house hundreds of people. Massive production facilities sit atop undersea towers that descend more than a mile to the seabed, and they can drill up to 30,000 feet, or about six miles, into the earth’s crust. Rigs are equipped with cafeterias, lounges with pool tables, and even mini movie theaters. Crew members stay on the rigs for two weeks at a time, working 12-hour shifts. These roughnecks and roustabouts, as oil workers are known, earn at least $50,000 a year, in return for a grueling existence in a world of heaving waves, hot metal, reeking chemicals, cramped sleeping quarters, and a blazing-hot sun. Fires and accidents are a constant danger.

How do the oil rigs operate?
Deep-water rigs consist of several interconnected systems, including a power system with engines and generators; the massive hoisting mechanisms and drilling apparatuses; and a sophisticated “circulation” system in which drilling fluid is pumped down the drill pipe at a high velocity, forcing up mud and clearing a path for the oil to be extracted. One platform can hold as many as 80 wells, and is typically fixed to the ocean floor with tons of tethering cables. It’s all in service to a truly daunting challenge: Reaching down through thousands of feet of pitch-black water and then boring down through thousands of feet of earth, all while bobbing on rough seas. The natural gas and “black gold” must then be pumped to the surface, where it’s transported to refineries through pipelines or aboard tankers. There are now some 6,500 offshore oil and gas installations worldwide, about 4,000 of which are in the Gulf of Mexico.

Why so many in the gulf?
A combination of geology and politics has focused the domestic oil industry there. After the catastrophic Santa Barbara, Calif., oil spill in 1969, new oil exploration off the Atlantic and Pacific coasts came to a virtual halt. But the Texas-based oil industry has enormous economic and political clout throughout the region, and ever since oil was first discovered there around 60 years ago, the gulf has been a major oil source; it now produces more than 1.6 million barrels a day, 30 percent of the entire U.S. oil output. And in recent years, oil companies have pushed farther offshore, as the older, more accessible oilfields have dried up. Worldwide, between 2005 and 2008, oil production in waters at least 1,000 feet deep grew by 67 percent, accounting for nearly 10 percent of global production. Not surprisingly, it’s an expensive process.

How expensive?
It can cost $50 million just to map a potential reserve, and $100 million to drill an exploratory well. The entire platform operation can cost up to a billion dollars to build and millions a day to operate. It’s a big investment, but there’s a potentially huge payoff. Oil is now selling for about $75 a barrel; with economies of scale, it costs companies about $5 a barrel to find, extract, and transport offshore oil. A major deposit, known in the trade as an “elephant,” can produce up to 20,000 barrels a day for  years. So a single rig can produce revenues of about $550 million per year. But first, the companies have to find the oil.

How do they find oil underwater?
Oil geologists use special “sniffer” equipment to detect traces of natural gas in seawater. But that method can locate only deposits that are seeping. To find sealed deposits, ships equipped with magnetic surveying equipment pass over an area and map any magnetic anomalies, which could be a sign of underground deposits. Crews also use a method called seismic surveying, which involves sending acoustic shock waves into the ocean floor; sound travels at different speeds through different kinds of rock, and by analyzing the data, engineers can identify deposits. But ultimately, the only way to know for sure if there’s a major deposit down there is to drill.

How risky is that?
The Deepwater Horizon disaster is a stark reminder of the dangers; 11 men were killed, and for three weeks now, oil has been leaking into the gulf at a rate of 5,000 barrels a day, menacing the region’s fragile ecosystem and the livelihoods of millions. But while the BP accident has set back efforts to open more U.S. waters to drilling, the gulf’s 4,000 rigs will continue to pump oil, and more rigs may yet come online there. “People say, Why would you go to an environment like this to find oil?” says ChevronTexaco spokesman Mickey Driver. “Well, this is where nature put the oil. You want to find oil, you have to go to where it is.”

The rise of Brazil
Brazilian President Luiz Inácio Lula da Silva calls it “a gift from God.” Over the past couple of years, geologists have confirmed the presence of massive deep-sea oil fields off Brazil’s coast—an estimated 15 billion barrels of crude—which would put Brazil in the same league as such major oil exporters as Qatar, Canada, and Nigeria. But first, it has to be extracted; the oil pools are 200 miles out in the Atlantic and more than four miles down, under freezing seas, rock, and a heavy salt cap. With its eyes on that prize, Brazil’s state-controlled energy company, Petrobras, has embarked on a five-year, $174 billion program to build platforms, support vessels, and drilling systems. If it succeeds, Brazil’s offshore program would constitute one of the most advanced engineering projects in the world. “We have reason to be optimistic,” said Petrobras executive José Formigli. “There are not barriers, but challenges we will be able to overcome.”


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