Drilling an oil well involves many people, in many capacities, over many stages. Here is an outline of some of what is involved:
purchase, lease or option the mineral rights in a particular area
determine any existing drilling restrictions in the area e.g. only so many wells per hectare (acre) may be allowed
determine the owner(s) of the surface rights (often a farmer in this area)
acquire the permission of the surface owner to survey a well location
come to a contractual agreement with the surface rights holder with respect to wellsite and access roadway location, monetary compensation for loss of use of land, and duration of the lease agreements.
acquire regulatory approval and a drilling license to develop the well
satisfy the various environmental, safety and other regulations with regard to the conditions attached to the drilling license
provide a long range plan for the well, including a planned reclamation of the site at the end of the well's life so that the previous environment will be restored
Update (2006): Some examples of current and future regulations in Saskatchewan
In Canada, private land can have two (or more) owners. The surface rights owner can build a house or farm the land. The mineral rights owner is entitled to benefits from the production of minerals (including petroleum) beneath the surface. In most instances, but not all, the surface and mineral rights owners are different. In Canada, the usual owner of the mineral rights is the Crown. Since lands and minerals are a provincial (as opposed to federal) jurisdiction, this means that usually a provincial government auctions leases on mineral rights on certain defined parcels of land. The returns from these auctions are often a major source of revenue for the province. The provincial government benefits further by receiving royalties (payments to the Crown) with respect to the quantity of petroleum as it is produced.
It is the job of a landman in an oil company to identify and locate the surface rights owner and the mineral rights owner of land on which the company wants to drill. This is usually done by searching through the land title records. The landman then approaches the surface rights owner and offers the surface rights owner a lease which specifies an initial payment and ongoing payments for surface rights over an agreed length of years with respect to the well.
The oil company is called the lessee. The lease grants the right to drill on that land and to operate the well during the extent of the lease. Over the years, procedures and payments with respect to these leases have become standardized and in both Alberta and Saskatchewan they operate within guidelines set out by the Surface Rights Act of the respective province.
A surveyor must first accurately determine the well location and elevation. Next, a bulldozer grades an access road to the site. The bulldozer then clears, levels, and constructs a protective berm around the site to guard the environment from any damage from accidental spills, etc. Usually a large pit is dug to hold unneeded drilling mud, cuttings, and other materials from the well. Currently these materials can be held in tanks in order to reduce the impact on the environment. Provisions are made for a water supply at the drilling site by drilling a water well or trucking water to the site.
Everything needed to drill the well arrives at the site on the back of a truck or a trailer. This includes a truck-mounted or portable rig. Many drilling rigs are called jackknife rigs as the derrick or mast is jacked up and secured for drilling after the truck arrives on site. Other rigs are trailer mounted and are raised hydraulically in a procedure which looks like the extending of a telescope.
The start of the drilling is called "spudding in". Spudding in usually begins with drilling a large-diameter but shallow (5 to 10 meter) hole called the conductor hole. Large diameter pipe, called conductor pipe is then placed into the conductor hole. The rig then drills a large diameter hole approximately 100 to 150 meters deep to seal off surface water aquifers and to stabilize the top of the well and provide an attachment for the blowout preventers. Drilling the well is commonly called making hole. After drilling this hole the geologist analyzes the mud returns and open hole logs to make a decision on whether to case or abandon the well. If it is a good well, production casing is run and cemented in place. If it is a duster (not enough potential to pay out the investment in making an oilwell) the well is abandoned. Abandoning a well means that cement plugs are run to seal the well bore and the surface is reclaimed to original condition. In the heavy oil area finding oil is not the largest challenge: TECHNOLOGY TO GET IT OUT OF THE GROUND IS!
There are three main drilling technologies. In the early days, the main technique involved cable tool rigs. In the late 1940's, Rotary Rigs began to be introduced and these are still used today. In recent years, other technologies have been developed including top drive rigs and mud motors. Mud motors, of various types, are common in horizontal well drilling. Here the pipe stem no longer rotates, only the bit at the bottom of the hole rotates, driven by injecting drilling mud at high rates through it.
Of course, drilling is a difficult and demanding job. Some of the problems encountered by drillers are discussed elsewhere. Follow this link to drilling problems.