Offshore decommissioning is the process of closing down or removing oil and gas facilities in the sea at the end of their working lives. Key services involved include plug and abandonment, pipeline and platform removal, and site clearance. Offshore decommissioning contracts are typically awarded by oil and gas operators to specialized firms for the safe and environmentally responsible removal of aging infrastructure from production fields. Major product types involved include topside demolition, substructure removal, pipeline removal, platform removal, conductor/pile cutting, and site survey & consent planning. Large oilfields in the North Sea region, Gulf of Mexico, and offshore Asia Pacific are reaching maturity and require decommissioning work to safely seal wells and remove redundant structures.
The global offshore decommissioning market is estimated to be valued at US$ 7.07 Bn in 2023 and is expected to exhibit a CAGR of 12% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Increasing Demand from Ageing Oil and Gas Fields (as refered in heading) is one of the key drivers propelling growth of the offshore decommissioning market. Many oil and gas fields developed over 50-60 years ago in regions such as the North Sea are now reaching the end of their productive lives. As operational infrastructure becomes obsolete and non-compliant with existing regulations, decommissioning projects are needed to safely close down aging assets. Another driver is stringent government regulations around the environment-friendly removal of offshore structures. International bodies like the UN and regulatory agencies have framed norms requiring operators to submit concrete decommissioning plans and set aside financial provisions to safely abandon assets at field closure. This helps push demand for specialized decommissioning contractors.
The offshore decommissioning market can be segmented based on decommissioning process, depth, structure, equipment, and region. The removal segment dominates the market and accounts for around 30% share owing to the complexities involved in removing offshore oil and gas platforms permanently. This process requires heavy-duty equipment such as hydraulic shears, lifting tools, and shallow water options.
Political: Stringent government regulations regarding the decommissioning of offshore structures are driving the market growth. Most countries have established authorities to monitor decommissioning projects and ensure environmental safety.
Economic: Volatile crude oil prices impact investments in new exploration projects. This is increasing focus on decommissioning aging offshore infrastructure to reduce maintenance costs. The tax incentives and subsidies provided by governments for decommissioning also boost the economics.
Social: Growing environmental concerns related to improper decommissioning of offshore facilities is a major factor. Public demand for complete removal of structures to restore marine habitats and prevent pollution is high.
Technological: Advancements in remotely operated vehicles, heavy lifting vessels, rigless well plugging and abandoning solutions are helping contractors execute complex decommissioning tasks safely and efficiently. Use of renewable energies also presents opportunities.
Global Offshore Decommissioning Market Size is estimated to be valued at US$ 7.07 Bn in 2023 and is expected to exhibit a CAGR of 12% over the forecast period 2023 to 2030.
The global offshore decommissioning market is expected to witness high growth in the forecast period supported by an aging offshore oil and gas infrastructure. Asia Pacific dominates currently due to an impending decommissioning wave in China and Southeast Asian countries. Many fields have completed production life and need to be dismantled as per regulations. North America is also a major regional market led by the Gulf of Mexico where oil production has been ongoing for decades. Strong governmental push and availability of skilled expertise makes the region an early adopter of best decommissioning practices.
Key players: GlaxoSmithKline Plc., Sanofi SA, Bharat Biotech, Bio-Med Pvt. Ltd., PT Bio Farma, PaxVax, Inc. Shanghai Institute of Biological Products Co., Ltd., and Prokarium are some of the prominent players in the offshore decommissioning market. The market landscape continues to evolve as more independent decommissioning contractors emerge to take up plugging and abandoning jobs.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it