The cost of building an oil rig far exceeds the cost of the actual equipment needed to assemble the oil rig; there are numerous other operational costs involved, like the cost of permits, labor, and insurance. While a curious person may ask “How much does it cost to build an oil rig?” They may not be aware of all of the other expenses involved with the successful building and operation of an oil rig.

Land vs. Sea


Oil rigs that are designed and built for exclusive use on the land differ greatly from the oil rigs that are designed and built for offshore (in the ocean) usage. A land rig can cost as much as $10M for a new fully operational rig while a semi-submersible (offshore) oil rig can range upwards from $350M for a new fully operational rig. The cost of the oil rig is really determined by the location of the drilling – ships and barges that are equipped to drill for oil can range in the $100M field, with some topping out at over $500M for brand new equipment.

The Age Of The Rigs


 The age of the oil rigs is a major determining factor when cost is involved. While older oil rigs are certainly going to be a more affordable option, there is also the need to take into consideration any and all repairs that the equipment is going to require before it can be certified as fully functional and safe to operate.
Oftentimes, while the initial upfront cost of an older oil rig is a more budget friendly option for a drilling company, it can be more cost effective to purchase brand new equipment. There is always the possibility that older equipment will not just need repairs to get it all up to grade, but there is the risk that the equipment could fail on a fairly frequent basis – requiring costly repairs that halt productivity.

Operational Costs


The operational costs of an oil rig can often far exceed the costs of the equipment itself – largely depending on the area in which the drilling is taking place. For off-shore rigs there is the need to transport supplies and staff from the mainland to the rig on a fairly frequent basis, a process that can cost several million dollars in and of itself.

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