3. Why don't the suppliers capture all the value during booms '? Suppliers of offshore drilling face a tough balancing act between meeting demand and keeping their costs down . The rigs themselves can cost anywhere from $100 - $300 million while supply costs (including day -rate paid to contractors )can cost anywhere from $16 - $17 thousand per day . With such high costs to consider in bust or recession periods ,the suppliers start to then shut down some of the rigs . This must be done because the cost of refurbishing , repairing , and stafng these rigs can be so monumental to justify keeping them in operation during off boom periods . When a boom does strike , the suppliers face a lot of challenges . The first is getting the unmanned rigs back to work which takes around 2- 6 months and $1 -$2 million .When evaluating this decision , the suppliers need to examine first that the boom will last long enough to get the rig back in operation and second that the boom will be big enough to justify the added costs . Even if the company decides that the boom conditions look favorably for bringing a "cold - stacked " rig into "hot-stacked " status the supplier might end up facing a lot more competition in the market .This is due to the fact that boom has been observed to attract new entrants into the offshore drilling market . The threat of new entrants is brought on by the shipyards which ,in 1980 , contributed to the addition 19 new entrants into the offshore drilling business .At this point , if the suppliers are facing more competition , it could result in the suppliers competing on price to sell the oil. This