The offshore decommissioning market involves dismantling or removal of offshore oil and gas infrastructure at the end of their production lives. This includes platforms, pipelines, wells and other subsea infrastructure. The services offered in this market include plugging and abandoning wells, pre-decommissioning engineering studies, platform removal, pipeline and subsea structures removal and onshore disposal of decommissioned materials. Over the years, significant amount of oil and gas pipelines and installations have been in use and are now reaching the end of their economic lives, which is driving the demand for offshore decommissioning services.
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 16% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
Large numbers of platforms, wells and pipelines installed decades ago have completed their economic lives and need to be safely decommissioned to avoid environmental hazards. For example, around 6,000 offshore oil and gas platforms in the Gulf of Mexico alone will need to be decommissioned over the next 15–20 years. In addition, countries have also formulated regulations to ensure timely and safe removal of obsolete offshore installations. For instance, regulations in the North Sea by the Oil and Gas Authority (OGA) now mandate full removal of all infrastructure post production rather than partial removal or leaving structures in place. Such stringent norms are boosting demand for offshore decommissioning services. Another driver is extensive R&D to develop new techniques for more efficient and cost-effective decommissioning. Various technologies such as automated underwater vehicles and novel mechanical cutting and lifting tools are being developed to enable faster and safer offshore decommissioning projects.
Segment Analysis
The offshore decommissioning market is primarily segmented into shallow water and deep water. The deep water segment dominates the market as it accounts for over 60% share due to high complexity and costs associated with decommissioning of deep water assets. Deep water assets require specialized vessels and equipment for removal of structures located in water depths over 600 feet.
PEST Analysis
Political: Stringent government regulations regarding offshore decommissioning are driving the market growth. Authorities in various countries have established institutions to ensure timely and environmental-friendly decommissioning of offshore installations.
Economic: Volatility in crude oil prices has led oil & gas companies to decommission aging assets, thereby generating opportunities in this market. Growing oil & gas exploration activities worldwide are also fueling market revenues.
Social: Increasing emphasis on safety of offshore workers and protection of marine ecosystem is propelling the adoption of decommissioning services.
Technological: Advancements in robotics, artificial intelligence and autonomous underwater vehicles are helping contractors to carry out decommissioning operations efficiently in a cost-effective manner.
Key Takeaways
The Global Offshore Decommissioning Market Size is expected to witness high growth, exhibiting 16% CAGR over the forecast period, due to increasing mature oilfields and obsolete offshore infrastructure. The market size is expected to reach US$ 23.25 Bn by 2030.
North America dominates the market due to large number of aging offshore platforms located along the Gulf of Mexico requiring decommissioning. Countries like US and Mexico are expected to be major revenue generators in this region.
Asia Pacific is projected to be the fastest growing region owing to rising offshore decommissioning projects in countries such as China, India, Indonesia, and Australia. Development of new offshore oil & gas reserves and rising E&P capital expenditures are fueling the regional market.
Key players operating in the offshore decommissioning market are Acteon Group Limited, Topicus Finan BV, AF Gruppen ASA, Tetra Technologies Inc., Allseas Group S.A., DeepOcean Group Holding B.V., John Wood Group Plc, and Exxon Mobil Corporation. The players are focusing on strategic partnerships and mergers & acquisitions to expand their service portfolio and geographical footprint.
Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it