1 Who owns what
Staking a claim on the sea has come a long way since Pope Alexander VI drew a line in the Atlantic Ocean in 1494 and effectively divided the New World between Spain and Portugal. Five hundred years later, in 1994, under a new United Nations convention, coastal countries were awarded the right to exploit and develop all resources up to 322 kilometres [200 miles] off their shores. If countries' offshore boundaries overlap, the Law of the Sea stipulates that they share any resource revenue.
2 The pioneer
Rancher Harry L. Williams, who had a penchant for the supernatural and occult, founded the town of Summerland, Calif., in 1889, on the coastline in the southern part of the state.
By the end of the 19th century, Mr. Williams had drilled what is widely considered to be the world's first offshore well, from a wooden wharf that extended 91 metres [299 feet] off the coast.
By the 1940s, free-standing and floating platforms allowed companies to move farther into the sea to strike it rich. There are now major operations across the world in locations such as the Gulf of Mexico, the North Sea and near Nigeria. Rigs operate in depths ranging from 450 metres [1,476 feet] to 3,000 metres [9,843 feet], but can drill even deeper than that.
Last month, Transocean Inc. announced that their jackup GSF Rig 127 set a world record, drilling 12,289 metres [40,218 feet] in the Al-Shaheen field near Qatar.
3 Getting there
To get access to some of the world's richest reserves, companies have to navigate dark, sometimes freezing and tempestuous waters. There are four major types of offshore rigs, according to the World Petroleum Council: Submersibles are floated in shallow water and ballasted to sit on a seabed. Jackups, used in water about 160 metres [525 feet] deep, are towed to a location, and their legs are lowered to a seabed. In deeper waters, drill ships, which have a derrick on top, drill through a hole in their hulls - they are either anchored into place, or propellers correct their drift. Semi-submersible rigs are mobile in movement and provide extra stability because of columns that sit on hulls, or pontoons ballasted below the surface.
4 Extracting it
After a company discovers oil or gas, a production platform that houses workers and equipment is moved in and anchored to the seabed. Some of the biggest platforms are bigger than a football field and rise above water level as high as a 25-story building, according to the World Petroleum Council. One platform type: The Tension Leg platform, made of steel or concrete and anchored by vertical "tendons."
One day of drilling can cost companies hundreds of thousands of dollars, and drilling may take weeks or months before companies reach their targeted locations. Technological advances have allowed companies to drill vertically and then turn the bit horizontally to find the intended locations.
5 Challenges
High demand for offshore rigs has created a shortage of the vessels. As a result, service companies are able to charge higher and higher prices for those that are available, especially for those rigs that can drill in ultradeep waters. There are fewer than 40 available worldwide. It's especially difficult to get hold of vessels in areas where there aren't substantial offshore exploration already, such as Canada's East Coast or the Indian Ocean. In some cases, rigs have increased their prices by $100-million (U.S.) to a total of half a billion dollars, according to The New York Times.
Even if a firm can obtain a rig, finding crude offshore isn't a given. With deepwater exploration, it's hard for companies to get accurate geological findings as salt water layering scrambles seismic signals.
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