Offshore Decommissioning Service Market Growth and Forecast 2025

Many of the geological structures that produce oil and gas have limited lifespan. These structures must be disposed when no longer in use. This ensures that the surrounding area is safe from environmental contamination. Decommissioning involves the safe plugging of the hole in the earth’s surface and disposal of the equipment used in offshore oil production. Abandoned offshore oil and gas platforms are a threat to the marine life.

They are major source of marine pollution. Oil spill or leakage through these abandoned oil and gas wells is a potential risk to marine life. The decommissioning process is mandatory, as abandoned structures and wells can be damaged in a hurricane and cause environmental disaster. Thus, decommissioning has become a major business in the oil and gas industry.

The offshore decommissioning service market is driven by various factors such as increase in the number of oil and gas platforms around the world and implementation of stringent environmental regulations by governments. Furthermore, heavy penalties imposed by governments for any negligence by exploration and production companies have resulted in companies investing more in offshore decommissioning soon after the effective utilization of the oil and gas platform.

Discovery of new oil reserves around the world is another factor boosting the offshore decommissioning market. Furthermore, aging oil reserves and abandoned wells are augmenting the offshore decommissioning service market. However, decommissioning entails high operational costs. This is anticipated to hamper the offshore decommissioning service market.

The offshore decommissioning service market can be segmented based on service type and area of application with respect to water depth. The service type segment can be classified into project management, engineering and planning, permitting and regulatory compliance, platform preparation, well plugging and abandonment, conductor removal, mobilization and demobilization of derrick barges, platform removal, pipeline and power cable decommissioning, materials disposal, and site clearance.

Among these well plugging and abandonment involves plugging of exploration wells. It is one of the most critical activities in any decommissioning project.  The well plugging and abandonment segment is estimated to expand at rapid pace led by the increase in regulatory requirements for proper abandonment of unproductive reserves and rise in environmental concerns.

Based on the area of application, the market can be divided into shallow water and deep water. The shallow water segment is estimated to account for major share as most of the old and aging offshore installations are in shallow waters. However, the deep water segment is projected to compete with shallow water as many platform installations now are at deep water depths.

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Based on region, Europe accounts for prominent share due to its extensive operations in the North Sea. The region also constitutes the largest amount of decommissioning spending. The U.S. and Gulf of Mexico have been the key regions in terms of the number of platforms decommissioned and also the number of platforms still to be decommissioned. Angola and Nigeria are anticipated to drive decommissioning spending in Middle East & Africa.

Companies actively operating in the market include, AF Gruppen (The AF Group), Ramboll Group, John Wood Group PLC, Aker Solutions ASA, Amec Foster Wheeler, PLC, John Wood Group, PLC, Tetra Technologies, Inc., DeepOcean Group, Able U.K., Ltd., Allseas Group, Heerema Marine and Petrofac Corporation.

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