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The Global Offshore Decommissioning Market is projected to reach USD 11.51 billion by 2028, at a CAGR of 5.7% during the forecast period. As oil & gas fields reach the end of their lifespan, they must be decommissioned. This complex task involves a number of highly skilled workers to ensure that the wells and platforms are safely and efficiently dismantled or decommissioned. Decommissioning is the process of ending offshore oil & gas operations at an offshore platform and returning the ocean and seafloor to its pre-lease condition.
Decommissioning involves the following activities:
The major driver for the decommissioning market is strengthening & mandatory legal guidelines for offshore oil and gas operations set up by the regulatory bodies of respective nations. With a huge number of offshore rigs expected to reach the end of their production cycle over the next ten years, the global need for technical decommissioning is expected to keep growing. Also, the increasing number of recent oil platforms like the ones in the North Sea and the Gulf of Mexico which will need decommissioning once they saturate is expected to grow the keep the market growth in the future.
Based on depth, the market is segmented into shallow water and deep water. The shallow water segment is expected to dominate to market for offshore decommissioning due to a large number of shallow-water oil fields already present and also new ones being developed because of their lower costs to set up.
Most of the decommissioning activity is in more mature fields located in the United Kingdom Continental Shelf and the Gulf of Mexico. According to the Bureau of Safety and Environmental Enforcement (BSEE), the Gulf of Mexico (GOM) has the highest number of decommissioned platforms across the globe. There are 17,841,739 acres of leased land comprising 3,344 total leases in the Gulf of Mexico alone. The Gulf of Mexico has been the largest region in the world for the number of wells decommissioned. Though the average number of structure decommissioned fell to 113 in 2015, the total number of the structure removed in the GoM Outer Continental Shelf (OCS) reached 254 in 2016. More than 2,000 structures and around 9,000 wells are expected to be removed by operators from GOM in the coming years. The US government has established a robust regulatory framework, including technical standards and financial security requirements to support the decommissioning efforts put forward by operators, which in turn is expected to support the decommissioning activities undertaken by operators. Europe holds a dominant position in the global offshore decommissioning market. The aging infrastructure and maturing oil and gas fields, especially in the North Sea and the U.K have driven this market in Europe.
The recent downturn in prices of oil is expected to be key restraint to not only the exploration and development activities of oil and gas but also decommissioning operations. The decrease in oil prices has caused a continued decline in cash inflow and rise or hike in debt levels could challenge the future of the oil and gas industry.
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Companies Covered: Aker Solutions, Epic Companies, Maersk Decom, Bibby Offshore, Proserv Group Inc., Able UK Ltd., Allseas Group SA, Amec Foster Wheeler PLC, John Wood Group PLC, Deepocean Group Holding BV, and Heerema Marine Contractors…
Years Considered In The Study
Historic Year |
2016, 2017 |
Base Year |
2018 |
Forecast Period |
2019-2028 |
CAGR % (2019-2028) |
5.7 |
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