Chicago, June 13, 2023 (GLOBE NEWSWIRE) -- The global Offshore Decommissioning Market is projected to reach USD 8.0 billion by 2027 from USD 5.2 billion in 2021 at a CAGR of 7.4% according to a new report by MarketsandMarkets™. The oil-producing companies nowadays are investing more in offshore projects rather than onshore owing mostly to the exhaustion of onshore reservoirs. The other reason for this shift is the abundance of less explored offshore potential. The onshore activities are expected to decrease by 10% in the North American region alone in 2019. The increasing number of abandoned wells and the presence of large mature fields, coupled with low crude oil prices, are expected to drive the offshore decommissioning market.
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According to Oil & Gas UK, in Decommissioning insight 2019, overall, 2,624 wells are expected to be decommissioned in the North Sea during 2019–2028. Furthermore, increasing government focus on well plug & abandonment activities is driving the market for offshore decommissioning services. For instance, in April 2021, the US House of Representatives Democrat introduced a bill authorizing USD 8 billion to plug and clean up abandoned oil wells nationwide, a measure aimed at creating jobs for oil and gas workers and reducing climate-warming emissions. Thus, increasing need for well plugging & abandonment is driving the offshore decommissioning market.
Offshore Decommissioning Market Scope:
| Report Coverage | Details |
| Market Size | USD 8.0 billion by 2027 |
| Growth Rate | 7.4% of CAGR |
| Largest Market | Europe |
| Market Dynamics | Drivers, Restraints, Opportunities & Challenges |
| Forecast Period | 2021-2027 |
| Forecast Units | Value (USD Billion) |
| Report Coverage | Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| Segments Covered | Offshore Decommissioning Market by Service, Structure, Depth, Removal, and Region. |
| Geographies Covered | Europe, North America, Asia Pacific, Middle East & Africa, and South America |
| Report Highlights | Updated financial information / product portfolio of players |
| Key Market Opportunities | Aging offshore infrastructures, especially in North Sea and Gulf of Mexico |
| Key Market Drivers | Growing number of abandoned wells and presence of large mature offshore oilfields worldwide |
The well plugging & abandonment is expected to be the largest contributor to the offshore decommissioning market.
The well plugging and abandonment service segment accounted for the largest share of the market in 2020 and is also projected to grow at the fastest pace during the forecast period, driven by demand from the European market. Well plugging & abandonment involves the safe and permanent closure of production or exploration wells and is one of the biggest and most critical activities in any decommissioning project. Well plugging & abandonment accounts for up to 49% of the total decommissioning cost of a project.
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Offshore Decommissioning Market Dynamics:
Drivers:
- Growing number of abandoned wells and presence of large mature offshore oilfields worldwide
- Fluctuations in oil prices boost offshore decommissioning activities.
Restraints:
- High cost associated with offshore decommissioning processes.
- Lack of skilled workers in developing countries
- Environmental concerns associated with offshore decommissioning.
Opportunities:
- Aging offshore infrastructures, especially in North Sea and Gulf of Mexico
- Deepwater discovery and development in offshore areas
Challenges:
- Growing adoption of technologies to increase production from mature fields.
- Impact of COVID-19 on offshore decommissioning spending
Europe is expected to be the largest region in the offshore decommissioning market.
Europe is estimated to be the largest market for offshore decommissioning, followed closely by North America. The European market led the offshore decommissioning industry, with the largest market share during the forecast period In Europe, over 950,000 tons of topsides are scheduled for removal across the North Sea, out of which more than 605,000 tons will be from UKCS. The UK is expected to spend about EUR 15.3 billion on decommissioning, over the next ten years. Approximately, 2,400 wells are expected to be decommissioned across the whole North Sea and West of the Shetland region, by 2027.
North America will also play an important role in driving demand for offshore decommissioning. North America is the biggest market in terms of the number of platforms decommissioned per year. Most offshore decommissioning takes place in the US Gulf of Mexico, where the Rigs to Reef policy has been in practice for a long time.
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Key Market Players:
Some of the major players in the Offshore Decommissioning Market include Heerema Marine Contractors (The Netherlands), Royal Boskalis Westminster N.V. (The Netherlands), Petrofac (Jersey), Oceaneering International (US), Baker Hughes Company (US), Halliburton (US), and Schlumberger (US).
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