Offshore Decommissioning Market, by Service (Well Plugging & Abandonment, Platform Removal, Conductor Removal), by Depth (Shallow, Deepwater), By structure (Topsides, Substructure), by Removal (Leave in place, partial, complete) and region (North America, Europe, Asia-Pacific, Middle East and Africa and South America).
Offshore Decommissioning Market Overview
The global Offshore Decommissioning market size was estimated at USD 6.04 billion in 2023 and is projected to reach USD 9.90 billion in 2030 at a CAGR of 7.30% during the forecast period 2023-2030.
Offshore decommissioning is the process of removing and dismantling offshore oil and gas platforms and other structures at the end of their operational life. It is a complex and expensive process, but it is essential to ensure the environmental safety of the surrounding area.
Decommissioning project involves developing a plan for the decommissioning project which includes identification of hazards and risks, ad the development of mitigation strategies. This is followed by obtaining the necessary permits from government agencies, and ensuring that the decommissioning project complies with all applicable regulations. After that, the platform is prepared by cleaning and purging the platform off hazardous materials, and removing any equipment that is not part of the decommissioning project. After platform is prepared, plugging and abandoning of the wells in the platform takes place to prevent the release of oil and gas into the environment. Once it’s done, platform is removed from the seabed and transported to the disposal site. After the platform is removed, the pipelines and power cables associated with the platform are also removed followed by removal of materials that were removed from the platform, in a safe and environmentally responsible manner. Lastly, the site is cleared on any remaining debris and restored to its natural condition.
The global offshore decommissioning market is segmented by service, structure, removal and region. By service, the market is segmented into we plugging and abandonment, platform removal and conductor removal. By structure the market is bifurcated into topsides and substructure. By removal the market is segment ed into leave in place, partial and complete and by region the market is segmented into North America, Europe, Asia-Pacific, Middle East and Africa and South America.
The market is being driven by the increasing number of abandoned wells and presence of large mature offshore oilfields worldwide. Moreover, the decline in the manufacture of crude oil and natural gas from manufacturing well is also driving the growth of the market. However, the high cost associated with decommissioning of offshore projects is a factor limiting the growth of the market.
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The COVID-19 Pandemic had an adverse impact on the global offshore decommissioning market. This was due to reduced demand for oil as gas, increased costs for offshore decommissioning projects due to travel restrictions, quarantine requirements and supply chain disruptions. Moreover, the pandemic caused delays in offshore decommissioning projects, due to factors such as the need to reschedule project activities and the inability to obtain necessary permits. Lastly, oil and gas companies had to shut down their manufacturing facilities as many countries practiced partial or full lockdown which negatively impacted the global offshore decommissioning market.
Delvens Industry Expert's Standpoint
The COVID-19 pandemic negatively impacted the global offshore decommissioning market. This can be attributed to the partial and complete lockdown placed by countries worldwide which restricting the activity of manufacturing facilities. Moreover, as travel restrictions were in place during the pandemic, demand for fuel reduced drastically which affected the global offshore decommissioning market. The market is being driven majorly by the well plugging and abandonment segment which accounts for almost 50% of the total decommissioning cost of a project.
Key Findings
• The market is bifurcated by service into project management, engineering, planning, permitting and regulatory compliance, platform preparation, well plugging and abandonment, conductor removal, mobilization and demobilization of derrick barges, platform removal, pipeline and power cable decommissioning, material disposal and site clearance. The well plugging and abandonment segment drove the market majorly in the European region.
• The market, by depth at which decommission projects occur, is segmented into shallow water and deep-water. Due to the lower operational costs, shallow water segment dominated the market as compared to the deep-water segment. However, as many of the current platform installations are occurring at deep-water and ultra deep-water levels, there is a chance for the deep-water segment to grow in the future.
• Based on the structure, the market can be segmented into topside, subsea infrastructure and substructure. Topsides dominate the market in this segment as the decommissioning of topsides and related equipment requires specialized heavy lift vessels and removal equipment.
• Based on removal, the market is bifurcated into leave in place, partial and complete. As governments are placing stringent regulations on the complete removal of offshore platforms in order to restore aquatic life and seabed, complete removal is leading the market in this segment.
• Based on region, North America is leading the market in terms of number of platforms decommissioned per year with most of the decommissioning taking place in US Gulf of Mexico, where Rigs to Reef policy has been in place for a long time.
Offshore Decommissioning Market Regional Analysis
North America to Dominate the Market
• North America is expected to lead the market due to the presence of Gulf of Mexico oil offshore reserves within the region where the Rigs to Reef policy has been in place for a long time.
• In Europe the market is picking up quickly with over 900,000 tons of topsides scheduled to be decommissioned in the North Sea.
Offshore Decommissioning Market Competitive Landscape
• Able UK Ltd.
• Ramboll Group A/S
• Petrofac Limited (Jersey)
• AF Gruppen Asa
• Aker Solutions ASA
• DeepOcean Group Holding BV.
• DNV GL Group
• TechnipFMC PLC
• Subsea Tech
• Claxton Engineering Services, Ltd.
• Tetra Technologies, Inc.
• John Wood Group PLC
• Heerema Marine Contractors
• Allseas Group S.A
• Amec Foster Wheeler PLC
• Linch-Pin Offshore
• Mactech Offshore
• Enermech
• Acteon Group
• Saipem
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Offshore Decommissioning Market Recent Developments
• In July 2023, McDermott received an engineering, procurement, and removal contract for offshore decommissioning work by Woodside Energy. The contract involves the full removal of the Stybarrow disconnectable turret mooring (DTM) buoy, as part of the decommissioning of the Stybarrow field in the northwest Cape of Western Australia.
• In May 2023, Helix Alliance, the Louisiana-based subsidiary of Helix Energy Solutions, secured a full-field decommissioning contract in the U.S. Gulf of Mexico shelf. As part of the project set to begin in mid-2023, The work includes the plug and abandonment of 39 wells, 15 pipelines and seven structures. Helix Alliance plans to use the EPIC Hedron heavy lift derrick barge for structure removals, liftboats for plug and abandonment activities, the Triton Explorer dive support vessel (DSV) for pipeline abandonments, and multiple Helix Alliance offshore support vessels (OSVs) and several other assets throughout the campaign.
Reasons to Acquire in the Offshore Decommissioning Market
• Increase your understanding of the market for identifying the most suitable strategies and decisions based on sales or revenue fluctuations in terms of volume and value, distribution chain analysis, market trends, and factors.
• Gain authentic and granular data access for the Global Offshore Decommissioning Market to understand the trends and the factors involved in changing market situations.
• Qualitative and quantitative data utilization to discover arrays of future growth from the market trends of leaders to market visionaries and then recognize the significant areas to compete in the future.
• In-depth analysis of the changing trends of the market by visualizing the historic and forecast year growth patterns.
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