The term derrick comes from Thomas Derrick, a hangman who invented a type of gallows using a movable beam and pulley system during the Elizabethan era. The term was adopted to describe cranes and other lifting devices which used a similar support mechanism. A modern oil derrick typically uses a drill bit which is capable of biting through the substrate, and cooled with constant slurry of mud to prevent it from getting too hot. Typically, as the drill bit sinks in, the hole is lined to prevent a cave in. Once the drill reaches the oil, it is withdrawn so that pumps and pipes can be inserted into the hole to extract it.

In an area rich in oil, an Oil Derrick is designed to be a permanent structure, and will continue to operate for many years. Portable oil derricks are also used in less resource rich areas, or to make preliminary explorations in areas of potential interest.

A large oil derrick needs to be packed with an extensive crew of geologists, engineers, mechanics, and safety inspectors to ensure that the workplace is well maintained. Anyone looking to purchase or rent can find various types of oil derricks for sale or rent on the internet.