Offshore decommissioning includes removal of abandoned offshore production and transportation facilities as oil and gas fields and pipelines reach the end of productive life. It involves plugging and abandoning wells, disconnecting risers and pipelines, removal of structures and pipelines, transport and disposal or reuse of decommissioned facilities. The process of offshore decommissioning requires heavy-duty equipment like heavy lift vessels, diving support vessels and rigs.
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 5.8% over the forecast period 2023 To 2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
The number of ageing offshore oil and gas fields reaching the end of production life is rising significantly. Many fields that have been in operation for over 30-40 years across regions such as North Sea are now due for decommissioning. Abandoning such offshore fields safely and effectively through proper decommissioning is important from environment regulations point of view for the oil and gas industry. This growing need for decommissioning ageing offshore assets is one of the major opportunities driving the growth of offshore decommissioning market. Regulations are also getting stricter regarding decommissioning plans and timelines. This is further boosting demand for offshore decommissioning services from oil companies to dismantle offshore infrastructure in their mature fields professionally and responsibly.
Porter's Analysis
Threat of new entrants: Low capital requirements and established contracts with oil producers limit the threat of new entrants. However, specialized vessels and equipment needed pose significant entry barriers.
Bargaining power of buyers: Large oil producers have significant bargaining power due to their size and demand for decommissioning services. They can negotiate on price and demand additional services.
Bargaining power of suppliers: Specialized equipment suppliers possess some bargaining power due to limited availability and long approval processes for new equipment. However, established relationships mitigate this influence.
Threat of new substitutes: No close substitutes exist for decommissioning offshore oil and gas infrastructure as recycling and reuse are heavily regulated.
Competitive rivalry: Intense competition exists among existing specialized contractors to win large decommissioning contracts from oil producers. Price is a key differentiator.
SWOT Analysis
Strengths: Established relationships, specialized assets and expertise provide first-mover advantage. Significant pipeline of upcoming decommissioning projects support long-term growth.
Weaknesses: Capital intensive industry exposes players to volatility in oil prices. Strict safety and environmental regulations increase compliance costs.
Opportunities: Growing regional decommissioning markets like North Sea and Gulf of Mexico offer scope for expansion. Acquisitions can help players diversify across geographies.
Threats: Dependence on oil industry makes players vulnerable to upstream price crashes. Rising competition may squeeze margins. Regulatory changes could impact timelines and cost estimates.
Key Takeaways
The Global Offshore Decommissioning Market Demand is estimated to be valued at US$ 7.07 Bn in 2023 and is expected to exhibit a CAGR of 5.8% over the forecast period 2023 to 2030.
Regional analysis North Sea region holds the largest offshore decommissioning portfolio globally with over 6500 platforms expected to require dismantling between 2020-2050. The U.K. sector of the North Sea alone is estimated to generate over 300,000 tons of steel waste to be recycled annually. In the Gulf of Mexico, increased political stability in Mexico has boosted offshore investment, adding to the decommissioning pipeline in the coming decade.
Key players related content: Key players operating in the offshore decommissioning market are Allseas,James Fisher & Sons Plc,TechnipFMC Plc,AF Gruppen ASA,Aker Solutions,John Wood Group Plc,Ramboll Group,DeepOcean Group Holding BV and Oceaneering International. The key players
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