Onshore vs Offshore

The words onshore and offshore have traditionally been used in the context of oil exploration and drilling. Of late however, the terms have become associated with many other businesses that seem to have confused many regarding the differences between these two words. Let us understand the differences by first looking at the original context of oil drilling.

On shore and offshore drilling

Oil is found below the surface of earth built sometimes the location is also under water. Though trying to extract oil from below the surface of the ocean is much more difficult than making wells on land and drilling holes, it is nonetheless profitable and this is why oil exploration is done making either floating or fixed platforms on the bed of the ocean. The activity of extracting oil from under the sea bed is called offshore drilling whereas onshore drilling is the practice of extracting oil from under the surface of earth away from the ocean. It is not just oil that requires onshore and offshore drilling but sometimes this is undertaken for extraction of natural gas also.

Onshore and offshore outsourcing

The words onshore and offshore are increasingly being used in the IT sector these days. There are countries that have emerged as a cheap source of manpower that has the talent to find business solutions in the field of information technology. The cost of outsourcing some of the business operations form these countries proves to be beneficial for rich countries in the west where professionals are very expensive. In IT sector, onshore outsourcing refers to getting some of the business operations outsourced from smaller companies within ones own country. On the other hand, offshore outsourcing refers to finding solutions of some of the aspects of the business through cheap and talented manpower outside ones own country.

Onshore and offshore banking

Another industry where the words onshore and offshore have gained currency is banking. There are countries having excessive taxations and other rules that cause problems for common people in their banking operations. On the other hand, there are countries that are considered as safe havens for banking as they have strict privacy rules and several tax advantages that help people to save a lot of money. When people from other countries open bank accounts in these countries, it is referred to as offshore banking while those continuing to have bank accounts in their own countries are said to be involved in onshore banking.

Onshore and offshore hosting

There are countries that prohibit certain content deeming it unfit for the population. If a website has content that is considered unfit for its population, the country of origin might not allow the site to be hosted. In such cases, people (owners of website) hire the services of offshore hosting service providers where the content is not considered illegal.

In brief:

Onshore vs Offshore

The words onshore and offshore have traditionally been used in the sense of oil exploration. Onshore refers to activities of oil exploration that are conducted on land away from the ocean while offshore pertains to oil exploration and rigging under the bed of the ocean.

Of late, onshore and offshore have come to be associated with many other industries such as IT, banking, and website hosting as well.

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Difference Between Onshore and Offshore