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Home Publications Blogs Beat the Press How Many People Work on a Drilling Rig?

How Many People Work on a Drilling Rig?

Tuesday, 22 June 2010 04:54

Marketplace radio passed along to listeners the oil industry assertion that it was spending $300 million a month on the wages of workers on offshore drilling rigs that have been idled by President Obama's moratorium on new deep water drilling. The Washington Post reports that the ban has idled 33 deep-water drilling rigs.

If the average worker on a rig earns $100,000 a year, the industry's claim about lost wages would imply that it was employing 36,000 workers, or more than 1,000 on each idled rig. This seems implausibly high, and should cause reporters to question the industry's claim rather than just report it as being true. (The industry has an incentive to exaggerate the impact of the moratorium on workers since it helps to advance its agenda of ending the moratorium.)

Comments (11)Add Comment
..., Low-rated comment [Show]
written by A guy who can read, June 22, 2010 8:09
@izzato: That would a moratorium on new exploratory drilling, i.e. the wells they're working on may or may not be productive at some point in the future. You might as well delete your post. It adds nothing relevant to the conversation.

Stupid illiterates.
how many BP execs does it take to (properly) screw in a drill?
written by frankenduf, June 22, 2010 9:22
waiddaminute- shouldn't they be paying those workers to help in the cleanup?- i find it hard to believe that a large number of them would turn down an interim job for $ and a sense of moral closure- helping to clean up the mess their rich bosses made
The industry claim includes off-rig people
written by AndrewDover, June 22, 2010 11:16

http://www.lmoga.com/Economic ...orium.pdf
written by Queen of Sheba, June 22, 2010 5:58

That's an interesting link you posted in your comment. When I try to access it, I'm redirected to the Grupo Isastur website, which is in Spanish. Is that what you intended?
written by AndrewDover, June 22, 2010 7:05
Louisiana Mid-Continent Oil and Gas Association:
http://www.lmoga.com/Economic ...torium.pdf

written by AndrewDover, June 22, 2010 7:13
http://www.lmoga.com/ and click on

Economic Impact Analysis of Gulf of Mexico Moratorium

which says:

"Suspension of operations means roughly 33 floating drilling rigs – typically leased for hundreds of thousands of dollars per day – will be idled for six months or longer.
$250,000 to $500,000 per day, per rig – results in roughly $8,250,000 to $16,500,000 per day in costs for idle rigs;

Secondary impacts include:
• Supply boats – 2 boats per rig with day rates of $15,000/day per boat - $30,000/day for 33 rigs – nearly $1 million/day
• Impacts to other supplies and related support services (i.e., welders, divers, caterers, transportation, etc.)

Jobs –
Each drilling platform averages 90 to 140 employees at any one time (2 shifts per day), and 180 to 280 for 2 2-week shifts

Each E&P job supports 4 other positions.

Therefore, 800 to 1400 jobs per idle rig platform are at risk. Wages for those jobs average $1,804/weekly; potential for lost wages is huge, over $5 to $10 million for 1 month – per platform. Wages lost could be over $165 to $330 million/month for all 33 platforms."

So a 6 month stoppage is clearly in the billions of dollars.

Reporting on the negotiations between BP and White House.
written by AndrewDover, June 22, 2010 7:15
Same calculations apply to BP payments
written by AndrewDover, June 23, 2010 11:57
Better be consistent. Either the indirect costs count for both BP and Oil rigs, or they should count for neither.

Rig impact employment
written by scott Moore, June 28, 2010 2:10
All way too high as usual. Time to come back down to how it really works!

Drilling Rig, Water Well Drilling Rig, Truck Mounted Drilling Rig, Button Bits
written by Dinesh Reddy, December 15, 2010 2:08
I feel good to read your blog on the Industrial suppliments
The Beaver Tracks Pvt LTd is one of the huge suppliers of Drilling Rig

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.