The latest report by IMARC Group, titled “Offshore Decommissioning Market Report by Service (Project Management, Engineering and Planning, Permitting and Regulatory Compliance, Platform Preparation, Well Plugging and Abandonment, Conductor Depth, Mobilization and Demobilization of Derrick Barges, Platform Depth, Pipeline and Power Cable Decommissioning, Materials Disposal, Site Clearance), Removal (Leave in Place, Partial Depth, Complete Depth), Depth (Shallow Water, Deep Water), Structure (Topside, Substructure, Sub Infrastructure), and Region 2024-2032“, The global offshore decommissioning market size reached US$ 6.3 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 10.7 Billion by 2032, exhibiting a growth rate (CAGR) of 6.12% during 2024-2032.
Industry Trends and Drivers:
- Aging offshore infrastructure:
The growth of the offshore decommissioning market is primarily driven by the aging infrastructure of oil and gas platforms. Many of these facilities were constructed several decades ago, with some nearing the end of their operational life spans. Maintaining aging platforms becomes increasingly costly due to the need for more frequent repairs, upgrades, and safety compliance. Moreover, as platforms continue to age, the risk of structural failures or environmental hazards increases, prompting operators to decommission older installations. Additionally, advancements in technology have made newer facilities more efficient, reducing the profitability of aging platforms. As a result, companies are opting to decommission old assets, contributing to the steady growth of the offshore decommissioning market.
- Stringent environmental regulations:
Environmental concerns are significantly influencing the offshore decommissioning market. Governments and regulatory bodies worldwide are implementing stricter environmental regulations to ensure that oil and gas companies minimize the ecological impact of their operations. These regulations often require companies to safely decommission their offshore facilities once they are no longer in use. This process involves removing the infrastructure, properly handling hazardous materials, and restoring the surrounding marine environment. Non-compliance with these regulations can lead to hefty fines and legal repercussions, making it essential for operators to adhere to decommissioning standards. As environmental awareness grows and regulations become even stricter, the demand for decommissioning services is steadily rising, further facilitating industry expansion.
- Decline in oil and gas reserves:
The decline in oil and gas reserves, particularly in mature offshore fields, is contributing substantially to the growth of the offshore decommissioning market. As reserves become depleted, numerous offshore platforms and wells are no longer economically viable to operate. As a result, companies are choosing to decommission these facilities to focus on more profitable ventures or to invest in renewable energy sources. The shift toward a cleaner energy landscape, combined with the dwindling oil and gas reserves in mature fields, has heightened the focus on decommissioning offshore platforms that are no longer productive. As the industry gradually transitions toward more sustainable energy solutions, the offshore decommissioning market is witnessing exponential growth.
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Top Offshore Decommissioning Market Leaders:
- AF Gruppen Asa
- Aker Solutions ASA
- Allseas Group S.A
- Claxton Engineering Services Ltd.
- DNV GL Group
- Heerema Marine Contractors
- John Wood Group PLC
- Mactech Offshore Machining & Cutting Solutions
- Petrofac Limited
- Saipem S.p.A.
- Subsea 7 S.A
Report Segmentation:
The report has segmented the market into the following categories:
Breakup by Service:
- Project Management, Engineering and Planning
- Permitting and Regulatory Compliance
- Platform Preparation
- Well Plugging and Abandonment
- Conductor Depth
- Mobilization and Demobilization of Derrick Barges
- Platform Depth
- Pipeline and Power Cable Decommissioning
- Materials Disposal
- Site Clearance
Well plugging and abandonment account for the majority of shares as they are essential for preventing environmental hazards, such as oil leaks, after the productive life of the well ends.
Breakup by Removal:
- Leave in Place
- Partial Depth
- Complete Depth
Complete depth dominates the market as it is essential to remove the complete offshore platform, restore marine life and seafloor to pre-production conditions, and prevent the occurrence of environmental issues.
Breakup by Depth:
- Shallow Water
- Deep Water
Shallow water represents the majority of shares as most aging offshore platforms were initially installed in shallow waters, making them the first to reach the end of their operational life.
Breakup by Structure:
- Topside
- Substructure
- Sub Infrastructure
Topside holds the majority of shares as it involves the removal of the visible part of the platform, which is vital for clearing the site.
Market Breakup by Region:
- North America (United States, Canada)
- Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, Others)
- Europe (Germany, France, United Kingdom, Italy, Spain, Russia, Others)
- Latin America (Brazil, Mexico, Others)
- Middle East and Africa
Europe holds the leading position owing to a large market for offshore decommissioning driven by the large number of aging oil and gas platforms in the North Sea, particularly in the UK and Norway.
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