An off-shore oil rig that was hit by a massive explosion two days ago sank in the Gulf of Mexico Thursday, creating the possibility of a major spill.

The sinking of the Deepwater Horizon could send more than one million litres of crude oil into the water each day. The environmental impact would be the most severe if the spill were to reach the Louisiana coast, about 80 kilometres away.

After it was rocked by an explosion Tuesday, the rig burned intensely. Firefighters had been battling towering flames for nearly two days, trying to control the fire that erupted after a thunderous explosion engulfed the oil platform off the Louisiana coast. More than 100 people escaped the explosion and resulting fire. Four people were critically injured.

The Coast Guard is still searching for 11 workers who have been missing since Tuesday's blast, but one relative said families have been told it's unlikely any of them survived.

Carolyn Kemp of Monterey, La., told the Associated Press Thursday that her grandson, Roy Wyatt Kemp, 27, was among the missing. He would have been on the drilling platform during the explosion, she said.

"They're assuming all those men who were on the platform are dead," she said. "That's the last we've heard."

Coast Guard boats and aircraft criss-crossed the area around the burning rig, searching for the 11 missing workers. The search crews have covered the 3,000-square-kilometre search area 12 times by air and five times by boat.

Coast Guard crews in two cutters have been searching around the clock, said Coast Guard Lieut. Sue Kerver, while planes and helicopters joined them by day.

Underwater situation unknown

Coast Guard Petty Officer Katherine McNamara said the well could be spilling as much as 336,000 gallons of crude oil into the Gulf a day.

Crews had seen a 1.5-kilometre by 1.5-kilometre sheen of what looked to be crude oil on the surface of the water, Coast Guard Rear Adm. Mary Landry said. But she added that after the rig sank, there was no evidence of crude oil coming out. What's happening underwater is not known, so officials have sent a vessel to check.

Doug Helton, incident operations co-ordinator for the National Oceanographic and Atmospheric Administration's office of response and restoration said the spill is not expected to reach the shore in the next three to four days.

"But if the winds were to change, it could come ashore more rapidly," he said.

The well will need to be capped off underwater. A Coast Guard spokesperson said crews were prepared for the rig to sink and had the equipment on hand to minimize the damage to the environment.

Survivors back on land

Some survivors were being reunited with their families at a suburban New Orleans hotel on Thursday. Meanwhile, rescuers scoured the Gulf of Mexico in an increasingly desperate search for the handful of workers still missing from the explosion.

After a long, slow boat trip, the rescued workers finally made it ashore at Port Fourchon earlier Thursday where they were checked by doctors and brought to a hotel in suburban New Orleans to await relatives.

Stanley Murray of Monterey, La., was reunited with his son, Chad, early Thursday morning. His son, an electrician aboard the rig, had ended his shift just before the explosion.

"If he had been there five minutes later, he would have been burned up," a relieved Stanley Murray said.

The rig was doing exploratory drilling about 80 kilometres off the coast of Louisiana when it exploded, sending workers scuttling for safety. Many boarded life rafts but others were forced to jump more than 25 metres into the dark water of the Gulf.

Seventeen people were injured in the blast and taken to hospitals, four of them critically. The Coast Guard said the injured suffered burns, broken legs and smoke inhalation.

Adrian Rose, vice president of Transocean, told AP that the explosion appeared to be a blowout, in which natural gas or oil forces its way up a well pipe and smashes the equipment. But precisely what went wrong was still under investigation.

The rig is owned by Transocean Ltd. and was under contract to oil giant BP.

According to Transocean's website, the rig was built in 2001 in South Korea and is designed to operate in water up to 2,400 metres deep, drill 8.9 kilometres down, and accommodate a crew of 130. It floats on pontoons and is moored to the sea floor by several large anchors.

Workers typically spend two weeks on the rig at a time, followed by two weeks off. Offshore oil workers typically earn US$40,000 to US$60,000 a year -- more if they have special skills.

Since 2001, there have been 69 offshore deaths, 1,349 injuries and 858 fires and explosions in the Gulf, according to the federal Minerals Management Service.

With files from The Associated Press