Offshore Decommissioning Market Size, Share & Industry Analysis, By Service (Project Management, Engineering, and Planning, Platform Preparation, Well Plugging and Abandonment, Platform Removal, Material Disposal, Site Clearance, Others), By Structure (Topside, Subsea Infrastructure, Substructure) By Water Depth (Shallow Water, Deep Water) and Regional Forecast, 2024-2032

The aim of offshore decommissioning is to seal off a well permanently from any possible escape of hydrocarbon or water, or cross-flow into other formations, and clearing seabed and water column from offshore infrastructure. Decommissioning is a relatively new sector, but in the upcoming years it has emerged as the fastest-growing market. Offshore oil and gas decommissioning are growing mainly in North Sea and the Gulf of Mexico in which many facilities moved beyond their operational life and uneconomical. Half of the hydrocarbon produced across the world are derived from mature fields with aging facilities.

Several parameters affect the overall performance of the field, and at one point it becomes unaffordable to run the facility. As the structure come to the end of their economic lives they must be decommissioned. Decommissioning mainly involves obtaining necessary permits and approvals, plugging the well, removing hydrocarbon from equipment, removing the platform, and clearing the site. Marine ecology must be protected while carrying out decommissioning activities. Thus in the forthcoming year offshore decommissioning market will increase by two-fold to clear field more scientifically.

The global offshore decommissioning market is segmented into service, structure, and water depth. Service is further divided into project management, engineering, and planning, platform preparation, well plugging & abandonment, platform removal, material disposal, site clearance, and others.

Well plugging and abandonment account the major share of decommissioning market. Approximately half of the total decommissioning cost is spent on well decommissioning. Based on structure, the global offshore decommissioning market is segmented as topside, subsea infrastructure, and substructure. Based on water depth, the market is bifurcated into shallow water and deepwater.

The decommissioning mainly occurs due to the declining production of hydrocarbon from the producing well, which pushes up the offshore decommissioning market. An extensive amount of crude oil obtained around the world from matured oil field which is continuously aging. To avoid any accident or leakage of hydrocarbon into marine water, it is necessary to precisely remove all the equipment’s and clear the wells. These factors contributing to the growth of the offshore decommissioning market.

A mature or aging well is like a non-performing asset that produces little or no profit. Simultaneously, the higher cost associated with decommissioning of offshore projects increases the debt of company, which expected to hinder the offshore decommissioning market. 

Key Players Covered:

The major offshore decommissioning companies are Amec Foster Wheeler, Ramboll, Aker Solutions, Petrofac, AF Gruppen, Heerema Marine Contractors, Awilco Drilling, Wood, TETRA Technologies, Inc., ExxonMobil, Statoil, Total, Chevron, and Claxton Engineering Services Ltd.

Regional Analysis:

The offshore decommissioning market is segmented into North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa. North America is projected to grow at a steady rate with many offshore oil and gas platforms are under evaluation for dismantlement in the bearish oil market. In Europe, the decommissioning market is driven by several factors such as increasing decommissioning activities in UK, Denmark, Norway, etc.

UK has been the most active market for offshore decommissioning with global market share approximately 50%. Challenging market outlook has put many aging fields to rest as diminishing output proved insufficient to cover production costs. Many fields around the world are under evaluation of dismantlement, which expected to leverage offshore decommissioning market in other parts of the world.

Segmentation

Key Industry Developments

• In August 2019, Petrofac secured a decommissioning contract from energy firm Hess in the central North Sea. Under the contract terms, Petrofac will carry out decommissioning of four wells at two fields in the North Sea.  


• In May 2019, GSP offshore won a decommissioning contract from OMV Petrom with an estimated contract value of around £4.5 million. Gloria offshore platform has reached its economic lifetime limit and served for more than 40 years.


• In May 2018, Shell UK awarded a $38.3m decommissioning contract to Awilco Drilling to decommission 18 wells in the Cheviot Field in the North Sea utilizing the semi-submersible rig.