Offshore decommissioning is the process of ending the working life of offshore oil and gas facilities which have reached the end of their productive life. It involves the safe and properly planned removal and disposal of aging or damaged oil and gas infrastructure, such as rigs, subsea equipment, pipelines, and platforms. The products used in offshore decommissioning services include plug and abandonment (P&A), pipeline and platform removal, capping and cutting, and debris removal. These services help in removing unserviceable or obsolete oil and gas platform safely without harming the environment.
The global Offshore Decommissioning Market is estimated to be valued at US$ 7.07 Bn in 2023 and is expected to exhibit a CAGR of 12% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity
Plug and abandonment services offer a major market opportunity owing to the growing aging offshore infrastructure that requires safe plugging and sealing of wells. According to estimates, around 900 oil and gas platforms in the Gulf of Mexico alone will require plugging and abandonment services by 2030. The safe plugging and permanent sealing of wells at the end of their production life is crucial to avoid environmental pollution and risks to safety. Growing regulatory norms regarding well decommissioning standards are further bolstering the demand for specialized plugging and abandonment services. Advanced technologies such as coiled tubing units, cementing machines and plug setting tools allow effective plugging and sealing of offshore wells in a cost and time-effective manner.
Porter's Analysis
Threat of new entrants: Low capital requirements and no major threats due to dominance of large players in the market.
Bargaining power of buyers: Buyers have moderate bargaining power as decommissioning services are highly technical and require expertise.
Bargaining power of suppliers: Suppliers have low to moderate bargaining power due to availability of substitutes and dominance of integrated service providers.
Threat of new substitutes: Threat from new substitutes is low as decommissioning involves removal of large structures requiring specialized skills and equipment.
Competitive rivalry: Intense competition due to presence of large global players offering decommissioning as one-stop solutions.
SWOT Analysis
Strengths: Growing decommissioning needs of aging offshore infrastructure and stringent regulations.
Weaknesses: High initial investments and skilled workforce requirements. Weather dependencies can delay projects.
Opportunities: Increasing decommissioning of mature oilfields. Growing renewable energy sector to drive wind farm decommissioning.
Threats: Volatility in crude oil prices and economic slowdowns can delay projects. Stringent environment norms increase compliance costs.
Key Takeaways
Global Offshore Decommissioning Market Size is estimated to be valued at US$ 7.07 Bn in 2023 and is expected to exhibit a CAGR of 12% over the forecast period 2023 to 2030.
The global offshore decommissioning market is expected to witness high growth during the forecast period. North America dominates currently due to large number of aging offshore oil & gas assets. Europe is also a major market led by the U.K. which pioneered offshore decommissioning norms. Asia Pacific is expected fastest region mainly due to upcoming decommissioning of Australia and Southeast Asia's mature oil & gas fields. India also offers immense opportunities for market players.
Key players related content: Key players operating in the offshore decommissioning market are GlaxoSmithKline Plc., Sanofi SA, Bharat Biotech, Bio-Med Pvt. Ltd., PT Bio Farma, PaxVax, Inc. Shanghai Institute of Biological Products Co., Ltd., and Prokarium. They offer integrated solutions from planning to waste disposal.
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