The global offshore decommissioning market, valued at $ 5.96 billion in 2018, is projected to exhibit a CAGR of 5.4% through 2027, in terms of revenue.
Crude oil prices coupled with declining production from rising number of maturing oil and gas fields is projected to drive growth in global offshore decommissioning markets over the forecast period, said Coherent Market Insights.
According to the Oil & Gas UK, across the two regions of the North Sea i.e. the UKCS (United Kingdom Continental Shelf) and Norwegian Continental Shelf, a total of 1,832 wells are matured and are expected to be decommissioned between 2016 to 2025 (out of which 1,470 wells on the UKCS and 362 wells on the Norwegian Continental Shelf).
According to same source, 64% of these (1,180) are platform wells and the remainder are subsea wells, although the proportion varies across each country. This scenario is likely to drive the demand for offshore decommissioning market across the globe in the near future.
The oilfields in Gulf of Mexico (GOM) and the North Sea regions have dominated decommissioning demand due to the large presence of mature fields in these regions. Even though older offshore exists in other regions, such as the Middle East, the longer shelf life of these fields means there are a lower number of mature oil and gas fields in those regions.
However, high cost for decommissioning along with risk to marine ecosystem, owing to hazardous substances used during the decommissioning process is expected to impact the decommissioning market in the near future.
Europe held the dominant position in the global offshore decommissioning market in 2018. The region contributed for around 42.0% share, in terms of the revenue in 2018. The aging infrastructure and maturing oil and gas fields, especially in North Sea and U.K have driven this market in Europe. North America contributed the second largest share in the market in the same year.