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The offshore decommissioning market size is forecast to increase by USD 2.51 billion at a CAGR of 6.78% between 2023 and 2028. The market is fuelled by several key factors. Maturing oil and gas fields, coupled with aging platforms, necessitate efficient decommissioning strategies. Strong regulatory frameworks governing offshore decommissioning activities ensure environmental protection and safety. Moreover, the high potential of offshore marginal fields drives investment in decommissioning efforts, presenting opportunities for innovation and cost-effective solutions in the market.
Offshore decommissioning refers to the process of safely and efficiently dismantling and removing offshore structures, such as platforms, pipelines, conductors, and abandoned oil wells, during the primary and secondary phases of reservoir production. This market is significantly impacted by manufacturing facilities' operations, which may be affected by lockdown measures and quarantine restrictions due to the global health crisis. The international footprint of offshore decommissioning projects is vast, with projects in shallow and deepwater locations.
Moreover, crude oil prices and supply chain disruptions also influence the market dynamics. Offshore decommissioning involves various techniques, including artificial aid, enhanced oil recovery methods like gas injection and polymer insertion, project management, permitting and regulatory processes, platform preparation, conductor removal, and platform removal. Materials disposal and site clearance are crucial aspects of the market. Obsolete offshore structures, including wellbores and fluid-bearing formations, present a liability that must be addressed in the decommissioning process.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The shallow water segment is estimated to witness significant growth during the forecast period. Offshore decommissioning is a critical process in the oil and gas industry, involving the dismantling and removal of manufacturing facilities, such as platforms, pipelines, and conductors, from shallow and deepwater reservoirs. This market has been significantly impacted by various factors, including lockdown measures and quarantine restrictions due to the global pandemic. International footprints of oil companies have expanded the scope of offshore decommissioning to various offshore regions, including the North Sea, the Gulf of Mexico, and the Asia Pacific. Crewmembers and skilled operators are essential in executing this complex process, which includes the primary phase of well abandonment and the secondary phase of platform removal.
Moreover, the use of artificial aids, such as cement plugs and fluid-bearing formations, plays a crucial role in ensuring the safety and efficiency of offshore decommissioning. The bill for decommissioning an abandoned oil well can be substantial, with operational costs varying depending on the water depth, from shallow water to ultradeepwater depths. The supply chain for offshore decommissioning is intricate, involving the transportation and disposal of materials, such as steel and concrete, from the offshore site. The process also includes permitting and regulatory requirements, project management, and the removal of conductors and pipelines. In the shallow water portion, jackup rigs, submersibles, and drill barges are commonly used for offshore decommissioning.
In conclusion, these rigs are versatile and can be employed in water depths up to 1000 feet (305 meters). However, the choice of rig depends on factors such as the rig's age, specifications, location, and possible weather conditions. The market encompasses various phases, including enhanced oil recovery techniques, such as gas injection and polymer insertion, and the liability management of abandoned wells. The process also includes the removal of platforms, platform preparation, and site clearance. Natural gas extraction from offshore reservoirs is also subject to decommissioning, with similar processes and challenges applicable to oil extraction. The market is a significant contributor to the oilfield industry, with operational costs varying depending on the water depth and the complexity of the project.
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The shallow water segment was valued at USD 4.62 billion in 2018 and showed a gradual increase during the forecast period.
Europe is estimated to contribute 48% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
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Offshore decommissioning in Europe is a significant engineering endeavor, driven by the maturity of offshore infrastructure in the North Sea. Key countries, including the UK, Norway, and Denmark, are at the forefront of this market due to the extensive decommissioning opportunities. The increasing number of maturing assets in the UK Continental Shelf (UKCS) necessitates pipeline decommissioning and derrick barge utilization. Strict regulatory environments in major oil and gas-producing countries further bolster the demand for offshore decommissioning. Several oil and gas fields are expected to undergo decommissioning during the forecast period, involving the removal of power cables and other infrastructure. Engineering firms play a crucial role in securing permits and executing the decommissioning process, ensuring a safe and efficient transition from production to decommissioning.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
The maturing oil and gas fields and aging platforms is the key driver of the market. Offshore decommissioning refers to the process of dismantling and removing manufacturing facilities, such as platforms, pipelines, conductors, and other substructures, from abandoned oil and gas wells in offshore regions. This procedure becomes necessary when the production of crude oil or natural gas from the reservoir in the wellbore declines significantly, leading to high operational costs and low revenue. The economic feasibility of continuing operations is compromised, making the oilfield a liability for the oil company. The market has been impacted by various factors, including lockdown measures and quarantine restrictions, which have affected crewmembers' mobility and supply chain logistics. The international footprint of oil companies has also influenced the market's dynamics, as they navigate the complex regulatory environment and permitting processes in different countries.
Moreover, crude oil prices have been a significant driver of the market. For instance, the sharp decline in crude oil prices from over USD 1.2 per gallon in 2017 to USD 0.8 per gallon in 2020 in the US has accelerated the need for decommissioning in many offshore regions. The primary phase of offshore decommissioning involves the use of artificial aid, such as cement plugs and gas injection, to seal the wellbore and prevent fluid leakage. The secondary phase involves the removal of conductors, pipelines, and platforms, which can be complex and costly, especially in shallow, deepwater, and ultradeepwater depths. Project management, permitting and regulatory compliance, platform preparation, and materials disposal are critical aspects of offshore decommissioning.
Similarly, skilled operators and specialized equipment are required to ensure the safe and efficient execution of these tasks. In conclusion, the market is driven by various factors, including declining production, crude oil prices, and regulatory requirements. The process involves the use of artificial aid, platform removal, and materials disposal, among other tasks. The market's dynamics are influenced by international footprints, lockdown measures, and quarantine restrictions, among other factors.
The rising investments in renewable energy is the upcoming trend in the market. Offshore decommissioning refers to the process of dismantling and removing obsolete oilfield structures, such as platforms, pipelines, conductors, and abandoned wells, in offshore regions. This market is gaining significance due to the increasing number of mature oilfields reaching the end of their productive life. The shift towards renewable energy sources and the implementation of lockdown measures and quarantine restrictions due to the global pandemic have impacted the offshore decommissioning industry. Despite these challenges, the market is expected to grow during the primary and secondary phases of decommissioning. The primary phase involves the initial preparation of the platform, including platform preparation, conductor removal, and platform removal.
Moreover, the secondary phase includes materials disposal, site clearance, and the use of artificial aid such as cement plugs, gas injection, and polymer insertion for enhanced oil recovery. The market has an international footprint, with operations taking place in shallow, deep, and ultradeepwater depths. The operational costs of decommissioning vary depending on the location and complexity of the project. In the context of the global energy transition, the market faces challenges due to the declining crude oil prices and the liability of oil companies for the decommissioning of their infrastructure. The supply chain for offshore decommissioning involves skilled operators, project management, permitting and regulatory processes, and the disposal of materials.
Additionally, the market is also impacted by the regulatory environment, which varies from one offshore region to another. The offshore decommissioning process can be complex and time-consuming, requiring careful planning and execution. In conclusion, the market plays a crucial role in the oil and gas industry, particularly in the context of maturing oilfields and the global energy transition. The market is expected to grow during the primary and secondary phases of decommissioning, despite the challenges posed by the current economic and regulatory environment. The process involves careful planning, execution, and regulatory compliance, and the use of advanced technologies for enhanced oil recovery and materials disposal.
The high cost associated with offshore decommissioning projects is a key challenge affecting the market growth. Offshore decommissioning refers to the process of dismantling and removing obsolete manufacturing facilities and equipment from abandoned oil and gas wells in offshore regions. This intricate procedure involves various phases, including primary and secondary decommissioning, platform preparation, conductor removal, and material disposal. The primary phase focuses on the wellbore and reservoir, while the secondary phase addresses fluid-bearing formations and pipelines. During the decommissioning process, skilled operators employ artificial aids such as cement plugs and gas injection, polymer insertion, and enhanced oil recovery techniques to minimize operational costs. However, the high costs associated with offshore decommissioning are a significant hindrance to market growth.
Additionally, these costs are influenced by factors such as crude oil prices, supply chain disruptions due to lockdown measures and quarantine restrictions, and the weight of materials that need to be removed. The responsibility for the equipment used during offshore operations lies with the well's owner. In deepwater and ultradeepwater depths, the operational costs increase significantly due to the complexity of the process. Offshore decommissioning projects require extensive project management, permitting, and regulatory compliance. The bill for these projects can be substantial, making it essential to focus on disconnection and removal to reduce operational costs. The market has an international footprint, with numerous players operating in various offshore regions.
However, the process involves the removal of conductors, pipelines, and platforms, followed by site clearance. Shallow water decommissioning projects are comparatively less complex and costly than those in deepwater or ultradeepwater depths. Despite the challenges, the market continues to evolve, offering opportunities for innovation and growth.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
DNV Group AS - The key offerings of the company include offshore decommissioning services.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
Offshore decommissioning refers to the process of removing or dismantling offshore structures such as oil rigs, platforms, and wind turbines once they have reached the end of their operational life. The market for offshore decommissioning is driven by various factors including aging infrastructure, increasing focus on renewable energy, and stringent regulations. The market is segmented based on regions, services, and types of structures. In the coming years, the market is expected to witness significant growth due to the increasing number of mature fields and the need to recover valuable resources. The decommissioning process involves several stages including planning, preparation, execution, and post-decommissioning.
In conclusion, companies offer various services such as engineering, project management, and logistics support. The market is a complex and challenging industry that requires specialized expertise and advanced technologies. It is essential to ensure a safe and efficient decommissioning process to minimize environmental impact and maximize cost savings.
Market Scope |
|
Report Coverage |
Details |
Page number |
183 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.78% |
Market growth 2024-2028 |
USD 2.51 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
6.23 |
Regional analysis |
Europe, North America, APAC, South America, and Middle East and Africa |
Performing market contribution |
Europe at 48% |
Key countries |
US, UK, Germany, Denmark, and China |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Able UK Ltd., AF Gruppen Norge AS, Aker Solutions ASA, Allseas Group SA, Baker Hughes Co., Boskalis, DeepOcean Group Holding BV, DNV Group AS, Halliburton Co., Heerema International Group, John Wood Group PLC, Oceaneering International Inc., Perenco, Petrofac Ltd., Ramboll Group AS, Saipem S.p.A., Schlumberger Ltd., Subsea 7 SA, TechnipFMC plc, and Weatherford International Plc |
Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Service
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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