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The well abandonment services market size is forecast to increase by USD 1.18 billion at a CAGR of 4.88% between 2023 and 2028. The maturing oil and gas fields are leading to an increase in the number of wells that need to be abandoned or decommissioned, creating a demand for well abandonment services and technologies. Regulatory requirements for well abandonment are also playing a key role, as governments and regulatory bodies are imposing stricter rules and regulations to ensure the safe and environmentally sound decommissioning of wells. Additionally, the rise of renewable energy is influencing the market by shifting focus towards cleaner and more sustainable energy sources, which could potentially impact the demand for traditional oil and gas services in the long term. It also includes an in-depth analysis of market trends and analysis, market growth analysis and challenges. Furthermore, the report includes historic market data from 2018 - 2022.
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The market is driven by the need to seal oil wells that have reached the end of their productive life, ensuring permanent seal to minimize liability for companies. This process involves decommissioning matured oil & gas platforms and subsea infrastructures, reducing ongoing costs, and guarding against potential liabilities and legal obligations. With technological advancements, companies now employ well-abandonment services using ringless good abandonment techniques like Xclude (reservoir) and Aubin's method, which are more efficient than traditional rig-based methods. These services are crucial for managing abandoned oil and gas wells, supporting remediation, and meeting regulatory requirements such as those set by the California Geologic Energy Management Division (CalGEM) and ensuring the integrity of the UK's electricity infrastructure as regulated by Offshore Energies UK (OEUK). Our researchers studied the data for years, with 2022 as the base year and 2023 as the estimated year, and presented the key drivers, trends, and challenges for the market.
Maturing oil and gas fields are a key factor driving the global market growth. The need for the abandonment of oil and gas fields is primarily due to the decline in the production of crude oil or natural gas from the producing well as it reaches the end of its economic life. When production declines to a level where the well's operational expenses exceed the revenue generated through the sale of crude oil or natural gas, the well becomes a liability for operators. This situation necessitates the need for permanent sealing of the well to prevent any further environmental or safety issues.
Moreover, operators are then faced with the decision to decommission the well, which involves various stages such as platform preparation, well plugging and abandonment, conductor removal, mobilization/demobilization, and platform removal. The decommissioning of matured oil & gas platforms and subsea infrastructures is crucial to avoid ongoing costs and potential liabilities. It is also a legal obligation for companies to ensure that these facilities are properly decommissioned and guarded against any environmental harm. As abandonment is part of the well decommissioning process, the increase in the number of aging oil fields is likely to drive the growth of the global market for well decommissioning during the forecast period.
Technological advances in well abandonment techniques will fuel the global market growth. Well-decommissioning is an increasingly important activity in the oil and gas industry. Oil and gas companies have invested significantly in technologies that could reduce the time and cost of these essential operations. Operators in the GoM and the North Sea are increasingly focusing on offshore oil and gas well decommissioning due to the increasingly restrictive regulations and the rising associated costs of maintaining and operating aging oil and gas platforms.
Moreover, ringless well abandonment is highly cost-effective (as it does not require a rig) and applies to a wide range of oil wells. The method complies with most well-abandonment requirements, along with a minimum footprint and quick project delivery. Many new technologies are also emerging, which reduce costs and improve project efficiency. Technological innovation in well-decommissioning techniques is likely to drive the growth of the market. This will reduce the time and cost of decommissioning operations when compared with traditional abandonment methods, including perforate and wash, cut and pull, and milling, by simplifying and streamlining the well abandonment process. The extensive use of such advanced technology is likely to drive the global market during the forecast period.
The high costs associated with well abandonment projects are a major challenge to the global market growth. A mature well is akin to a non-performing asset that produces little or no profits. A well is considered mature when the operating cost exceeds the revenue generated from producing crude oil or natural gas. During well abandonment, the weight of the materials that are required to be removed is one of the major factors on which the cost of the well abandonment project depends.
Moreover, to ensure maximum reduction in the operational costs associated with decommissioning an oil field, the major focus should be on the disconnection and removal of equipment and machinery, as they account for the majority of the project cost. Well abandonment costs fluctuate significantly due to changes in material/equipment condition, estimated risks, loss of key personnel, market volatility, supply chain inflation, industry experience, information management systems, and technical data. The costs of offshore well abandonment projects are comparatively higher than those of onshore projects. Therefore, the high costs associated with decommissioning projects translate into high costs for well abandonment, which is likely to adversely affect the growth of the global market during the forecast period.
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 and forecasting strategies.
Market 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.
Acteon Group Ltd.- The company offers well abandonment services, such as well as plug and abandonment. Also, it offers foundations, moorings, marine electronics and instrumentation, flow lines, offshore risers, and conductors for shallow and deepwater applications.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market 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.
The market share growth by the offshore segment will be significant during the forecast period. In 2022, the market in offshore locations accounted for the largest share owing to the high costs associated with offshore operations owing to the highly complex and harsh environment and the need for more equipment. The segment is expected to grow significantly owing to the numerous mature offshore oil and gas wells in many areas globally, especially in the GoM and the North Sea. Well abandonment is generally conducted using a drilling rig. However, technologies have developed to the extent where well abandonment can be done without using rigs.
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The offshore segment showed a gradual increase in market share, from USD 2.41 billion in 2018. The need for offshore well abandonment depends on various factors such as the water depth, well type, and the availability of rigless techniques. Moreover, many oil and gas well decommissioning activities are expected to be carried out during the forecast period. Such oil and gas well decommissioning activities are expected to significantly drive the growth of the offshore segment of the global market during the forecast period. Furthermore, our report provides a brief analysis of historical and forecast market share and their segment, along with their reasons for growth during the forecast period.
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Europe is estimated to contribute 47% 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. In 2022, the key countries contributing to the market in Europe were the UK, Norway, and Denmark. Decommissioning opportunities in Europe are extensive owing to the increasing number of mature offshore oil and gas fields in the North Sea and the stringent regulatory environment in major oil and gas-producing countries of the region, such as the UK and Norway. Numerous maturing assets in the UK Continental Shelf (UKCS) are at the end of their productive lives, which is likely to drive the demand in the region. Many oil and gas wells are likely to be decommissioned during the forecast period.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Million" for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.
The market is witnessing significant growth as the global oil and gas industry focuses on environmental sustainability and responsibly decommissioning obsolete oil & gas reservoirs. With increasing concerns over environmental impact and the need for well integrity and safety, the demand for permanent well abandonment services is on the rise. This market is crucial for ensuring that offshore oil and gas platforms and onshore wells are properly sealed in an environmentally responsible manner. Skilled personnel and specialized services are essential for the safe and effective decommissioning of wells, making this market a key player in the transition to green energy sources and the development of emerging markets. The market plays a critical role in the oil & gas production sector, particularly in addressing the challenges posed by obsolete oil and gas wells.
Further, as global energy demand continues to rise, there is increasing pressure to decommission these wells in an environmentally responsible manner. This market is particularly important for developing countries where oil and gas exploration activities are prevalent, as it helps manage fossil fuels and ensures proper revenue generation. However, capital investment costs and access to resources remain significant challenges, especially in regions where hydraulic fracturing is common. Nonetheless, the market for well abandonment services is expected to grow, driven by the need for decommissioning services for both temporarily abandoned well services and shut-in well services. The market is crucial in addressing the challenges posed by aged oil and gas wells and orphaned wells. With increasing emphasis on clean energy and renewable electricity, the market for well abandonment services is expanding, driven by the need to manage abandoned wells effectively.
Moreover, the market landscape depends on Energy consumption, Heat pumps, Oil well, high capital investment cost. The International Energy Agency and initiatives like REPowerEU and the Inflation Reduction Act highlight the global shift towards bioenergy, solar power, wind power, and electric cars. This shift, however, requires high capital investment costs and advanced real-time monitoring and control systems to ensure productivity and environmental safety. The global energy infrastructure is being reshaped, necessitating skilled personnel and advanced technologies. Unfortunately, the industry faces challenges such as low technological advancement, lack of skilled personnel, and limited access to resources, which hamper the effective abandonment of wells. Despite these hurdles, the growing international energy demand and the push for deepwater drilling activities and shale gas projects underline the importance of efficient well abandonment.
Additionally, deep casing tools are essential in maintaining the integrity of oil wells during abandonment. Addressing oil reserves and ensuring safe, environmentally-friendly disposal methods are paramount. The sector's future growth hinges on overcoming these barriers and ensuring that abandoned wells do not pose environmental hazards. As the industry evolves, well abandonment services will play a vital role in supporting the transition to clean energy while managing the legacy of traditional oilfield investments.
Market Scope |
|
Report Coverage |
Details |
Page number |
165 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 4.88% |
Market growth 2024-2028 |
USD 1.18 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
4.57 |
Regional analysis |
Europe, North America, Middle East and Africa, APAC, and South America |
Performing market contribution |
Europe at 51% |
Key countries |
US, UK, Norway, Saudi Arabia, and China |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
A and T Well and Pump, A Plus Well Service Inc., Acona, Acteon Group Ltd., AGR Holdco Ltd., BiSN Oil Tools Ltd., Calfrac Well Services Ltd., Coretrax Ltd., Dan Wood Co., Expro Group Holdings NV, Halliburton Co., M and W Drilling LLC, NexTier Oilfield Solutions Inc., Oceaneering International Inc., Petrofac Ltd., Proserv UK Ltd., Schlumberger Ltd., TechnipFMC plc, Weatherford International Plc, and Well Engineering Partners (WEP) BV. |
Market dynamics |
Parent market analysis, Market forecast, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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