November 11, 2024

Offshore Decommissioning Market Is Expected To Be Propelled By Upcoming Wave Of Large-Scale Project Completions

Offshore decommissioning involves plugging and abandoning wells, cutting and removing structures above the sea floor and leaving foundations in place or removing them for complete site clearance. It also includes engineering studies needed for safe dismantling of platforms, pipelines, and other infrastructure. Reusable equipment and materials are often salvaged for redeployment elsewhere. Major activities include well plugging and abandonment, platform removal (both topside and jacket removal), platform pipelines and components removal, and site clearance to the mandated level.

The global offshore Decommissioning Market is estimated to be valued at US$ 7.07 Billion in 2023 and is expected to exhibit a CAGR Of 5.8% over the forecast period from 2023 To 2030, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics:

Upcoming Wave of Large-Scale Project Completions (as referred in the heading): Many major oil & gas fields in the North Sea and Gulf of Mexico are expected to complete production within this decade, driving the need for offshore decommissioning activities. For instance, over 60 platforms in the UK North Sea are scheduled for decommissioning by 2030. Major oil producers such as BP, Shell, and TotalEnergies have outlined decommissioning plans for several platforms and pipelines owned by them. This upcoming wave of large-scale project completions is expected to propel the offshore decommissioning market.

Market uncertainty: Cost estimates for decommissioning projects can vary considerably depending on the condition of infrastructure, scope of work, technology solutions adopted, oil prices at the time of work, and regulatory factors. This uncertainty poses challenges for businesses and governments in planning decommissioning economically. However, improving cost estimates, standardization of practices, and joint industry projects are helping reduce unpredictability in the market.

 

Segment Analysis

The global offshore decommissioning market is dominated by the topsides segment. This is due to the large mass and complex nature of topsides infrastructure that makes its removal a challenging and expensive task. The topsides segment involves removal of large above sea installations such as production platforms, drilling rigs, pipelines and others. Dominating the segment, production platforms are usually the heaviest and most complex structures to be removed.

PEST Analysis

Political: Stringent government regulations regarding the oil rig removal are driving the market growth. Most counties have formulated policies to safely decommission ageing offshore oil installations.

Economic: Volatile oil prices in recent years have negatively impacted investments in new offshore oil projects. This is positively impacting the decommissioning market as old rigs need to be dismantled.

Social: Increasing environmental concerns related to offshore rigs have led stakeholders to focus on cleaning up obsolete infrastructure. Proper decommissioning ensures minimum impact on marine ecosystems.

Technological: Advancements in technologies such as marine robotics and renewable energy are helping players provide decommissioning services more efficiently. Use of technologies improves safety and reduces costs.

Key Takeaways

The Global Offshore Decommissioning Market Demand is expected to witness high growth over the forecast period. The global offshore decommissioning market is estimated to be valued at US$ 7.07 billion in 2023 and is expected to exhibit a CAGR of 5.8% over the forecast period from 2023 to 2030.

Europe dominated over 35% of the market share in 2024 led by Norway and UK targeting to remove number of ageing installations in North Sea. The region is expected to continue its dominance during the forecast period supported by stringent EU guidelines.

Key players operating in the offshore decommissioning market are TechnipFMC, Royal Dutch Shell, Ramboll Group A/S, AF Gruppen ASA, John Wood Group PLC and Oceaneering International. Among these, TechnipFMC leads with largest market share of over 15% in 2024 owing to wide service portfolio and significant project execution experience.

Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it

About Author - Money Singh
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Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc.  LinkedIn Profile

About Author - Money Singh

Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemical and materials, defense and aerospace, consumer goods, etc.  LinkedIn Profile

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