Oil Rig Construction: Building & Engineering in Extreme Conditions

Every day, oil rigs around the world extract tens of millions of barrels of oil. Building oil rigs and platforms can be extremely dangerous and complex, and the finished product is often a feat of engineering excellence. In many ways, it’s construction at its most extreme.

Oil rigs and platforms are the structures used to extract oil from underground reserves. Their construction requires diligent planning, advanced engineering, creative innovation, extraordinarily precise execution and the ability to navigate harsh environments and conditions. Oil rigs are required to meet the current global demand for energy — and the environment, economies and geopolitics are all dependent on their effective and safe construction.

This article explores the basics, the process and the unique challenges of constructing oil rigs and platforms. 

The Basics of Oil Rig Construction

Most oil rigs are one-of-a-kind, designed and built to withstand and maximize output in the specific conditions in which it’s located. Constructing oil rigs usually takes somewhere between 18 months to five years, depending on location, size and other factors, including geopolitics. 

Onshore rigs extract oil from beneath the earth’s surface and account for a vast majority of the global oil output. Common onshore rigs and platforms include conventional rigs, used for drilling vertical wells, and horizontal rigs, made to drill horizontal wells or access unconventional resources like shale oil. Offshore rigs are less common and tend to be more complex, expensive and dangerous to build and operate. 

The type of offshore rig is selected based on the water’s depth and conditions. For example, tension leg platforms (TLPs) are ideal for deep water up to 2,000 meters, while a fixed platform might be better in shallow water less than 500 meters. Other common offshore rigs include spar platforms, semi-submersible platforms, jack-up rigs and compliant tower platforms. 

Most contracts to construct rigs and platforms are EPCs (Engineering, Procurement and Construction). EPC contractors are responsible for the entire project lifecycle, from engineering and design, to material procurement, construction, commissioning to project handover. All contractors who work in this field need to be extremely specialized, experienced and equipped to handle large-scale, high-stakes projects that involve many international stakeholders, including the private energy companies that own most of the world’s rigs. 

The Phases of Oil Rig Construction

Constructing oil rigs usually includes a few important phases. 

Planning

Planning begins with extensive feasibility studies, including geological surveys and environmental impact assessments. Offshore work must account for ocean currents and seabed conditions. 

Just as the construction of oil rigs requires extreme precision, the design process is extremely detailed. Engineers often use advanced software and simulation models to ensure the rig’s functionality, safety and efficiency before work has ever begun. Most rigs are unique, and include custom components to withstand and maximize output in its specific location. Some components — such as piping, joints, hulls or topside modules — can be similar on different rigs and are more likely to be prefabricated.

Contractors working in oil rig construction often use advanced work packaging (AWP), a project management methodology used to improve productivity and predictability in large-scale projects. AWP breaks projects into smaller, manageable work packages that are planned and executed in a logical sequence. 

The planning process itself can be broken into work packages, such as workface planning or engineering work, but having the rest of the project broken into packages, such as procurement or commissioning, can help with planning, scheduling and sequencing.

Fabrication

Fabrication involves the manufacturing of major components, such as the hull, topside modules and drilling machinery. Because most rigs are one-of-a-kind, components often need to be custom-made for each project. Many projects set up their own specialized yard in a convenient location to create components where they can then be transported to the jobsite. 

Transportation

The components on oil rigs are usually massive, heavy and difficult to move. An important, and particularly challenging, part of planning and managing site logistics is ensuring components can be moved to the jobsite. For offshore rigs, heavy-lift vessels and specialized barges are often used to transport and install components. 

Commissioning

Commissioning is the process of ensuring all systems and equipment are functional and meet safety standards. Extensive testing and certification are conducted when working with oil rigs, as the stakes of having something malfunction are extremely high, and can include loss of life or an environmental disaster. 

Common Challenges in Oil Rig Construction

The goal when building oil rigs is almost always to minimize surprises and maximize predictability. That often comes with a few common challenges: 

Safety

Oil rig construction can be extremely dangerous, and even more so when working offshore, where crew members have nowhere to evacuate in an emergency. Everyone working on the project usually undergoes extensive safety training, and contractors usually invest in high-quality fire and gas detection systems to help monitor and predict dangerous situations. 

Safety also often includes plans for workers navigating the unfamiliar areas in which they’re living and working during the project. Some companies have workers and executives stay in secured premises, and risk management should account for everything from weather to more extreme dangers, such as kindnappings.

Authorities having jurisdiction (AHJ) around the world have wildly varying safety requirements and standards. Contractors often strive to maintain the rigor of their home country or set a standard within their company that meets or exceeds safety standards in most places they’ll be working. 

The Extraordinary Costs of Delays

Project management and contingency planning needs to be extremely thorough and precise. A delay in finishing an oil rig can result in an extraordinary loss of money for the owner, often as high as hundreds of millions of dollars. Delays also create more opportunities for safety issues. 

Geopolitical factors

Oil rig construction is uniquely subject to geopolitical factors, such as wars, protests, intra-country struggles, tariffs and sanctions. These things can impact accessing a jobsite, material procurement or transportation, timelines and safety. Large contractors often include teams that specialize in monitoring and managing political, economic and other factors that might impact the project.

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Oil Rigs: Innovation in Demanding Environments

Unlike some other areas of construction, oil rig construction has the means and the need to seek out, integrate and embrace new technologies. The sheer size of oil rig projects requires extensive communication, collaboration, and document management, which has made the use of project management software extremely important. 

Even more dramatically, the industry embraced digital twins and IoT sensors long before many fields of construction, which has advanced contractors’ ability to monitor structures in real time and predict maintenance, reduce risk, and improve long-term outcomes. Oil rig construction is a powerful example of the ways innovation can both meet the needs of construction while also leading the way towards new horizons.

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