How much does it cost to produce a barrel of oil? Ask an oilman and he'll likely give you a dollar amount. The Energy Costs of Oil Production. The World. But we can't keep going like this A small well, of 20 BOPD may cost $500,000 to drill. 20 BOPD selling at $100 produces an income of $720,000 per year. Costs to produce that oil must be taken out. Costs to produce can be royalty payments to the owner of the land, getting the oil to a refinery, taxes, maintenance and miscellaneous other fees.