Offshore Decommissioning Market

Market Overview:

The global offshore decommissioning market size reached US$ 5.85 Billion in 2022. Looking forward, IMARC Group expects the market to reach US$ 8.78 Billion by 2028, exhibiting a growth rate (CAGR) of 6.8% during 2023-2028. The growing number of offshore oil and gas projects, increasing utilization of commercial drones, and rising implementation of stringent policies by governing agencies to preserve marine life, are some of the major factors propelling the market growth.

Offshore decommissioning refers to the process of responsible removal of infrastructure from offshore locations that were previously used to support oil and gas extraction operations. It comprises various processes, including project management, engineering, and planning, permitting and regulatory compliance, platform preparation, well plugging and abandonment, conductor removal, mobilization and demobilization of derrick barges, and pipeline and power cable decommissioning. It involves clearing and filling the well and removing the entire infrastructure and platform. Furthermore, it takes place in the final phase of the lifecycle of an oil well when the oil levels are getting exhausted.

At present, the increasing demand for offshore decommissioning due to the rising number of offshore oil and gas projects is positively influencing the market. Besides this, the growing implementation of stringent policies by governing agencies of various countries to preserve marine life and conduct safe disposal of equipment used in offshore oil production is offering a favorable market outlook. In addition, the rising availability of various advanced decommissioning procedures in offshore regions is contributing to the growth of the market. Apart from this, the increasing demand for crude oil or fossil fuels to propel vehicles and produce various other materials, such as solvents, plastics, and polyurethane, is supporting the growth of the market. Additionally, the rising number of fluctuations in oil prices around the world is bolstering the growth of the market.

Offshore Decommissioning Market Trends/Drivers:

Rising oil and gas exploration activities stimulating market growth

At present, there is an expansion in oil and gas exploration activities around the world due to the increasing demand for energy. Apart from this, the rising utilization of heavy machinery and electronic devices in industries, along with the installation of air conditioning systems in the residential and commercial sectors, which consumes large amounts of electricity is further catalyzing the demand for oil and gas. Additionally, passenger cars and various heavy-duty vehicles are dependent on fossil fuels for providing power to their motor. As the demand for oil is increasing, offshore decommissioning activities are also rising to manage mature oil wells which are no longer productive.

Increasing number of abandoned wells and mature offshore oilfields catalyzing demand for offshore decommissioning

At present, the number of abandoned wells and mature offshore oilfields is increasing around the world. Abandoned well and mature offshore oilfields refer to the oil wells which are no longer producing crude oil and are in the state of reaching the end of their productive lifecycle. These offshore oil fields require special management and cannot be left idle with the installed infrastructure in waterbodies. They are capable of releasing hydrocarbons into the water, which are responsible for destroying marine life and increasing the toxicity of natural water bodies. Hence, to prevent the destruction of marine life and water resources, employment of offshore decommissioning is necessary.

Rising awareness about the restoration of marine life augmenting market growth

At present, there is a rise in environmental awareness among the masses due to the increasing incidence of global warming, climate change, and air and water pollution. Apart from this, the production of various toxic wastes and hazardous wastewater from industries is degrading the conditions of marine life. In addition, various oil exploration activities, along with the rising cases of oil spills in oceans, are further hampering the conditions of water resources. Unused oil fields and mature oil wells, when left in offshore regions, often release toxic residues or hydrocarbons into the water bodies, which degrades marine life and increases toxicity. Hence, the adoption of offshore decommissioning and recycling of offshore infrastructures is important for restoring marine life and preventing the release of hazardous elements from mature wells.

Offshore Decommissioning Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global offshore decommissioning market report, along with forecasts at the global, regional, and country levels from 2023-2028. Our report has categorized the market based on service, removal, depth, and structure.

Breakup by Service:

• Project Management, Engineering and Planning
• Permitting and Regulatory Compliance
• Platform Preparation
• Well Plugging and Abandonment
• Conductor Depth
• Mobilization and Demobilization of Derrick Barges
• Platform Depth
• Pipeline and Power Cable Decommissioning
• Materials Disposal
• Site Clearance
   

Well plugging and abandonment represents the largest market share

The report has provided a detailed breakup and analysis of the offshore decommissioning market based on the service. This includes project management, engineering and planning, permitting and regulatory compliance, platform preparation, well plugging and abandonment, conductor depth, mobilization and demobilization of Derrick Barges, platform depth, pipeline and power cable decommissioning, materials disposal, and site clearance. According to the report, well plugging and abandonment represented the largest segment. Well plugging and abandonment refers to the main element of the offshore decommissioning process and involves thoroughly cleaning the wellbore and carefully installing plugs in the well. This is an important step as it prevents any environmental issues caused by leaving the underwater well open.

Project management, engineering, and planning are initial steps managed by the facility owner to generate specific and sufficient information, including costs related to continuing operation for specific time periods, ceasing operation by a specific date, and determining the type of decommissioning to pursue.

Breakup by Removal:

• Leave in Place
• Partial Depth
• Complete Depth
   

Complete depth holds the leading market share

The report has provided a detailed breakup and analysis of the offshore decommissioning market based on the removal. This includes leave in place, partial depth, and complete depth. According to the report, complete depth represented the largest segment as it is essential to remove the complete offshore platform, restore marine life and seafloor to their pre-production conditions, and prevent the occurrence of environmental issues. It enables the ecosystem to return to its original state and minimizes pollution caused by oil and gas exploration activities.

Leave in place involves leaving structures, pipelines, and infrastructure in place without causing any environmental and physical disturbances. It is also capable of benefiting subtidal benthic invertebrates by providing habitat and shelter and encouraging the accumulation of natural sediments.

Breakup by Depth:

• Shallow Water
• Deep Water
   

Shallow water holds the largest market share

The report has provided a detailed breakup and analysis of the offshore decommissioning market based on the depth. This includes shallow water and deep water. According to the report, shallow water represents the largest segment. Shallow water refers to an area of water that measures only a short distance from the top of the surface. Offshore discharging activities in shallow water require lower operational expenses and a lesser amount of effort to disassemble the platform and infrastructure when it becomes non-operable.

Deep water refers to offshore regions that are nearer to the sea floor and wherein the depth of water is maximum. Additionally, oil and gas exploration activities are carried out in deep water and ultra-deep-water levels by creating holes in the sea floor and using a drilling rig. Moreover, offshore decommissioning activities in deep waters require a specialized workforce and equipment to reach a considerable depth and conduct the entire process without causing disturbances to marine life and other environmental complications.

Breakup by Structure:

• Topside
• Substructure
• Sub Infrastructure
   

Topside holds the biggest market share

The report has provided a detailed breakup and analysis of the offshore decommissioning market based on the structure. This includes the topside, substructure, and sub infrastructure. According to the report, topside represents the largest segment. Topside refers to parts of offshore drilling, which are present above the waterline and installed onto either a fixed or floating underwater structure. It comprises the drilling rig, living accommodation, and processing facilities. During the explanatory phase of the life of an offshore oil rig, the topside is often a bare structure sitting atop a submerged tower called a jacket.

Substructure of an offshore drilling platform is necessary to support the topside and maintain its position above the ocean-free surface. It is designed and fabricated separately and connected with the topside at the offshore site.

Breakup by Region:

• North America 
  • United States
  • Canada
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Others
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

Europe exhibits a clear dominance, accounting for the largest offshore decommissioning market share

The report has also provided a comprehensive analysis of all the major regional markets, which include North America (the United States and Canada); Europe (Germany, France, the United Kingdom, Italy, Spain, and others); Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, and others); Latin America (Brazil, Mexico, and others); and the Middle East and Africa.

Europe held the biggest market share due to the rising offshore decommissioning activities taking place in the region. Besides this, the rising oil and gas exploration activities to fulfill the energy demands, along with the increasing number of abandoned wells and the presence of numerous offshore oilfields, are further propelling the growth of the market in the region.

North America is estimated to expand further in this domain, due to the growing environmental awareness and initiatives taken to preserve marine life. Besides this, the increasing number of offshore oil and gas platforms that are under evaluation for dismantlement in the bearish oil market is bolstering the growth of the market.

Competitive Landscape:

Key players are experiencing a rise in the demand for offshore decommissioning due to the increasing oil and gas exploration activities for fulfilling global energy demands and the implementation of stringent regulations to maintain marine life. They are focusing on adopting eco-friendly procedures in offshore decommissioning activities and recycling various offshore installations to minimize negative impacts on the environment. Top companies are incorporating sustainable measures in the engineering, procurement, construction, and integration of various offshore facilities. They are also hiring an efficient workforce and training them with upgraded techniques to conduct decommissioning procedures. Leading companies are focusing on collaborations and partnerships with other organizations to further strengthen their position in the subsea services market. They are also heavily investing in developing various advanced methods for offshore decommissioning, including water injection, gas injection, chemical injection, thermal recovery, and hydraulic fracturing.

The report has provided a comprehensive analysis of the competitive landscape in the global offshore decommissioning market. Detailed profiles of all major companies have also been provided. Some of the key players in the global offshore decommissioning market include:

• AF Gruppen Asa
• Aker Solutions ASA
• Allseas Group S.A
• Claxton Engineering Services Ltd.
• DNV GL Group
• Heerema Marine Contractors
• John Wood Group PLC
• Mactech Offshore Machining & Cutting Solutions
• Petrofac Limited
• Saipem S.p.A.
• Subsea 7 S.A

Recent Developments:

• In September 2022, AF Gruppen Asa received a contract from TotalEnergues EP Nederland B.V for the removal and recycling of platforms in the Dutch sector of the North Sea.
• In February 2023, Allseas Group S.A. announced its return to the East Mediterranean in the third quarter of 2024 to execute the installation scope for phase one of the Tamar expansion project.
• In June 2023, DNV GL Group signed a memorandum of understanding with the Institute of Energy and PTSC Mechanical and Construction to deliver one of the first offshore wind power assets in Vietnam.

Offshore Decommissioning Market Report Scope:

Key Questions Answered in This Report:

• How has the global offshore decommissioning market performed so far, and how will it perform in the coming years?
• What are the drivers, restraints, and opportunities in the global offshore decommissioning market?
• What is the impact of each driver, restraint, and opportunity on the global offshore decommissioning market?
• What are the key regional markets?
• Which countries represent the most attractive offshore decommissioning market?
• What is the breakup of the market based on the service?
• Which is the most attractive service in the offshore decommissioning market?
• What is the breakup of the market based on the removal?
• Which is the most attractive removal in the offshore decommissioning market?
• What is the breakup of the market based on the depth?
• Which is the most attractive depth in the offshore decommissioning market?
• What is the breakup of the market based on the structure?
• Which is the most attractive structure in the offshore decommissioning market?
• What is the competitive structure of the global offshore decommissioning market?
• Who are the key players/companies in the global offshore decommissioning market?

Key Benefits for Stakeholders

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the offshore decommissioning market from 2017-2028.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global offshore decommissioning market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's five forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the offshore decommissioning industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.