Offshore Decommissioning Market: Fluctuations in Oil Prices Boost Offshore Decommissioning Activities

 According to the new market research report "Offshore Decommissioning Market by Service (Well Plugging & Abandonment, Platform Removal, Conductor Removal) Depth (Shallow, Deepwater) Structure (Topsides, Substructure) Removal (Leave in Place, Partial, Complete), and Region - Global Forecast to 2027", published by MarketsandMarkets™, the Offshore Decommissioning Market size is expected to grow from an estimated USD 5.2 billion in 2021 to USD 8.0 billion by 2027, at a CAGR of 7.4%. Aging offshore oil & gas infrastructure and maturing fields are driving the offshore decommissioning industry. Low oil prices of the past couple of years have made it even more difficult to maintain low production mature reserves, driving companies to accelerate decommissioning plans for such oil & gas fields.

The well plugging & abandonment is expected to be the largest contributor to the offshore decommissioning market

The market has been segmented by service type, water depth, structure, removal type, and region. The market has been further segmented, by service type, 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 (includes topside, jacket removal, subsea), pipeline and power cable decommissioning, materials disposal, and site clearance.

The well plugging and abandonment service segment accounted for the largest share of the market in 2020 and is also projected to grow at the fastest pace during the forecast period. Well plugging & abandonment involves the safe and permanent closure of production or exploration wells and is one of the biggest and most critical activities in any decommissioning project.

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The shallow water subsegment is estimated to have the highest growth rate in the offshore decommissioning market

Based on depth, the market has been segmented into shallow water and deepwater segments. The application of offshore decommissioning in shallow water projects is estimated to lead the market, both in terms of market value and growth. The shallow water basins on the UK Continental Shelf and the Norwegian North Sea will play a major role in driving the Offshore Decommissioning Market.

Shallow water operations are typically less expensive compared to deepwater operations, and a majority of the old and aging offshore installations are in shallow waters. Thus, the market for offshore decommissioning will be the largest in shallow water projects.

Europe is expected to dominate the global offshore decommissioning market

Europe was the largest market, by value, for offshore decommissioning in 2020, driven mainly by activities in the UK, Norway, and Netherlands. The UK offshore industry leads other regions in terms of well-developed and mandatory decommissioning guidelines. The production of oil, gas liquids, and liquid products in the UK Continental Shelf (UKCS) peaked at around 1,027.5 million barrels in 1999. Ever since the country has struggled to offset the decline in production with both onshore and offshore fields. With a large number of fields in the country near the end of their lifecycles, the market in the UK is projected to be the largest for offshore decommissioning during the forecast period. Authorities in the region are taking active steps to commit operators to decommission old infrastructure by providing expertise, policy support, and financial incentives.

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To enable an in-depth understanding of the competitive landscape, the report includes the profiles of some of the top service providers in the Offshore Decommissioning Market. These players include Heerema Marine Contractors (The Netherlands), Royal Boskalis Westminster N.V. (The Netherlands), Petrofac (Jersey), Oceaneering International (US), Baker Hughes Company (US), Halliburton (US), and Schlumberger (US).

Offshore Support Vessel Market: Increasing Deepwater Activities and Decommissioning of Aging Offshore Infrastructure

 According to the new market research report "Offshore Support Vessel Market by Type (AHTS, PSV, MPSV, Standby & Rescue Vessel, Crew Vessel, Chase Vessel, Seismic Vessel), Application (Shallow water and Deepwater), End-User (Oil & Gas and Offshore Wind), and Region - Global Forecast to 2026", published by MarketsandMarkets™, the global Offshore Support Vessel Market is expected to grow at a CAGR of 4.0%, from 2021 to 2026, to reach a market size of USD 26.8 billion by 2026. The market growth is driven by robust investments in the offshore oil & gas and renewable sectors. Increasing deepwater activities and decommissioning of aging offshore infrastructure is likely to offer lucrative opportunities for the Offshore Support Vessel Market. However, fluctuating crude oil prices have offset the growth of the Offshore Support Vessel Market in the past years and resulted in the oversupply of vessels. This would restrain the growth of the market during the forecast period. Government regulations and high operational risks continue to be challenges for the Offshore Support Vessel Market.

One of the key factors influencing the global energy demand is the growth in the human population. The UN World Population Prospects predicts that the world population will increase from 7.6 billion in 2017 to 9.8 billion by 2050. This rise in the demand for energy has to be met with various energy sources such as oil & gas, renewables, thermal, and nuclear power. According to the BP Statistical Review of 2019, the world still had unexplored 1,729.7 billion barrels of oil reserves by the end of 2018. Discoveries of such reserves are translating into demand for well drilling and production activities, which, in turn, are supporting the offshore support vessel market growth. Moreover, regions that have high energy demand, such as Asia Pacific, are planning to augment their offshore production. Countries such as India and China, which have offshore oil and gas basins in the Indian Ocean and South China Sea, respectively, have huge potential for offshore oil and gas exploration. Apart from the Asia Pacific region, major discoveries are being made in the offshore region of Africa, especially in western Africa.

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The oil & gas segment is expected to dominate the Offshore Support Vessel Market.

The lifecycle of oil and gas fields can be segmented into 4 phases, namely, exploration, development, production, and decommissioning; each phase has its own set of requirements. Offshore support vessels are designed for specific operations and deliver support services at offshore drilling rigs and oil-producing assets, such as production platforms and floating production storage and offloading (FPSO) unit. These offshore support vessels are also used to carry out pipe laying services and decommissioning of offshore rigs. In the North Sea alone, over 450 platforms, 10,000 km of pipelines, and 5,000 wells are expected to be decommissioned by 2040. According to the Oil & Gas UK, an offshore oil & gas industry association in the UK, decommissioning of this infrastructure would cost up to USD 80 billion. Globally, there are approximately 7,000 offshore structures that are eligible for decommissioning. The Gulf of Mexico and the North Sea are two of the largest regions with most infrastructure eligible for decommissioning. Decommissioning of rigs generates demand for offshore support vessels, thereby driving the market growth.

Asia Pacific: The largest Offshore Support Vessel Market.

In this report, the Offshore Support Vessel Market has been analyzed with respect to 6 regions, namely, North America, Asia Pacific, South America, Europe, Middle East, and Africa. Asia Pacific is expected to dominate the global Offshore Support Vessel Market between 2021 and 2026. The major economies in Asia Pacific, such as China, India, Indonesia, Malaysia, Vietnam, and Thailand, are focusing on increasing their offshore E&P CAPEX. According to Scottish Development International, the CAPEX for new offshore developments in Asia Pacific is set to be about 25% of the global spending, making the region an important part of the offshore industry. Various policymakers in the region are prioritizing new offshore activities in deep and ultra-deep waters. The most important of these new offshore developments include Australia’s Briseis, Scarborough, and Laverda projects; Malaysia’s Rotan, Gumusut-Kakap, and Petai projects; India’s KG-D6 complex; and Indonesia’s Gehem project. Moreover, the count of offshore support vessels is also growing in the region due to an increase in the number of vessel manufacturers in the market, especially from China and South Korea.

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To enable an in-depth understanding of the competitive landscape, the report includes the profiles of some of the top players in the Offshore Support Vessel Market.

Some of the key players are DOF group (Norway), Solstad Offshore (Norway), Tidewater (US), Maersk (Denmark), and Siem Offshore (Norway). The leading players are adopting various strategies to increase their share in the Offshore Support Vessel Market. Expansions have been a widely adopted strategy by the major players in the Offshore Support Vessel Market.

Offshore Support Vessel Market to Witness Outstanding Growth in Coming Years

 The global offshore support vessel market is estimated to grow from USD 20.1 billion in 2018 to USD 25.7 billion by 2023, at a CAGR of 5.04% from 2018 to 2023. The market in Asia Pacific is estimated to be the largest market for offshore support vessels, followed by Europe and North America. This trend is expected to continue until 2023. Also, the North American market is projected to be the fastest-growing market. The growth of the offshore support vessel market is driven by rising offshore investments in the US and the Gulf of Mexico, and a focus on the potential deepwater discoveries in the US.

The major factors that are expected to be driving the offshore support vessel market are deepwater production and exploration activities in Europe and Middle East would boost the growth of the offshore support vessel market. The growth in deployment of offshore wind farms in countries such as China and the US would drive the offshore support vessel, for installation, maintenance, and during the replacement of offshore wind turbines. Offshore support vessels perform various operations such as seismic survey, transporting necessary infrastructure and crew, and managing any emergencies.

The application of offshore support vessels in shallow water projects is estimated to lead the market, both in terms of market value and growth. The shallow water basins in Asia-Pacific, Europe, and North America will play a major role in driving the offshore support vessel market. Shallow water operations are typically less expensive compared with deepwater operations. Thus, recovering oil prices will lead to a faster increase in offshore activities in shallow water basins compared with deepwater ones.

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Asia Pacific is expected to be the largest market for offshore support vessel

The offshore support vessel market is segmented into five major regions, namely, Asia Pacific, Europe, North America, South America, Africa, and the Middle East. The Asia Pacific market is estimated to be the largest offshore support vessel market because of factors such as increasing CAPEX for Exploration & Production activities in the offshore oil & gas sector and rising number of offshore rigs to cater to the increasing energy demand in the region. Stabilizing oil prices have already led to oil & gas operators increasing exploration and production spending in the Chinese offshore market, with capital expenditures allocations estimated to resume steadily. The market for offshore support vessels in North America and the Middle East regions is also expected to grow during the forecast period due to the growing focus on developing offshore reserves to replace maturing onshore fields.

With the gradual maturity of shallow water fields, oil & gas operators are exploring for deep and ultra-deep water opportunities to meet the growing oil & gas demand. This has stimulated growth in investments in offshore and subsea activities. The shallow water covers majority of the market share, but the vessels used here are not capable of working in deepwater and ultra-deepwater due to harsh climatic conditions. This factor offers great opportunity for the manufacturers to manufacture technologically equipped vessels to face the challenging environmental condition.

The AHTS segment is expected to grow at the highest growth rate from 2018 to 2023.

Anchor-handling tug supply (AHTS) vessels constitute the largest segment of the offshore support vessel market. AHTS vessels are designed to provide anchor-handling and towage services and are also used for supplying deck cargo, water, fuel, dry bulk, and mud-to-oil rigs and platforms. These vessels can also be used for emergencies and are well equipped for firefighting, rescue, and oil recovery operations. The demand from Asia Pacific and Europe is projected to drive the market for AHTS vessels during the forecast period. Countries such as Vietnam, Malaysia, Thailand, and Australia increased their E&P activities in offshore areas in the recent past. Malaysia is the largest contributor to the short-term oil & gas production growth mainly due to the Kebabangan Gas Project.  Also, there is a strong support from Petroliam Nasional Berhad (PETRONAS), which provides approximately USD 15.6 billion a year toward capital expenditure in the oil & gas industry. Moreover, local laws have been implemented to protect the local OSV operators as PETRONAS will prioritize Malaysian-flagged vessels over foreign vessels.

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The major players in the Offshore Support Vessel Market include Bourbon (France), Seacor Marine LLC (US), Swire Group (Hong Kong), Tidewater (US), Gulfmark Offshore (US), Havila Shipping (Norway), Hornbeck Offshore Services (US), the Maersk Group (Denmark), and Siem Offshore (Norway).

Offshore Decommissioning Market is Poised to Witness Growth in the Global Market !!

The global offshore decommissioning market is projected to grow at a CAGR of 5.05%, from 2017 to 2025, to reach a market size of USD 8.76 billion by 2022. Offshore decommissioning is plugging the oil and gas wells which are matured and are non-productive. Maturing oil and gas fields and aging infrastructure in the North Sea and Gulf of Mexico are driving the offshore decommissioning market. Low crude oil prices are other major driver for this market.

The report segments the market, on the basis of service, 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. The well plugging and abandonment segment accounted for the largest market share in 2016, driven by demand from the European market. 

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Well plugging and abandonment: The largest service segment of the offshore decommissioning market

Well plugging and abandonment constitutes the largest segment of the offshore decommissioning market, by service, in terms of value. Well plugging and abandonment contributes up to 45% of total decommissioning cost of any project. During this activity, detailed well data is collected and prepared for plugging using rig or rig less methods. Demand from the European market is projected to drive the market for well plugging and abandonment.

The European market is expected to grow at the highest CAGR, from 2017 to 2025.

Europe is the largest market, by value, for offshore decommissioning, followed by North America. The European market is also projected to be the fastest growing market, during the forecast period, owing to mature oil and gas fields, particularly in the U.K. and the North Sea. The impending cessation of production in major oil and gas fields would ensure that the European market would grow at the highest pace. Europe is estimated to witness the highest offshore decommissioning spending, with its well-developed regulatory framework compared to other regions.

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The key players operating in the offshore decommissioning market include Amec Foster Wheeler ASA (France), Aker Solutions (Norway), AF Gruppen S.A. (U.S.), Tetra Technologies (U.S.), John Wood Group PLC (U.K.), Able UK (U.K.), DNV GL (Norway), Heerema Marine (The Netherlands), Allseas Group (Switzerland), DeepOcean Group (The Netherlands) and Technipfmc PLC (U.S.), among others.   

Offshore Decommissioning Market Driving Companies to Accelerate Decommissioning Plans for Oil & Gas Fields

The offshore decommissioning market is projected to reach USD 8.76 billion by 2025, growing at a CAGR of 5.05%, from 2017 to 2025. Europe is estimated to be the largest market for offshore decommissioning, followed closely by North America. The European market is also projected to be the fastest growing market during the forecast period. The growth of the offshore decommissioning market is driven by ageing offshore infrastructure, maturing fields and low international oil prices.

The European market is estimated to be the fastest growing market for offshore decommissioning from 2017 to 2025. This growth is attributed to increasing decommissioning activities and planned projects, particularly for fields on the British continental shelf. A strong regulatory environment with set guidelines and support from government agencies is an important factor in the growth of the offshore decommissioning market in the region.

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Based on the types of offshore decommissioning services, the market has been segmented 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 (includes topside, jacket removal, subsea), pipeline and power cable decommissioning, materials disposal, and site clearance. The well plugging and abandonment segment is estimated to have the largest market share, by value, in 2016, and this trend is likely to continue during the forecast period of 2017 to 2025, in view of demand in the North Sea and the Gulf of Mexico. Since a large number of offshore wells have already reached the maturity phase, the market for well plugging and abandonment is likely to grow fast as operators look to shut wells that are less productive.

The markets in the Asia-Pacific, the Middle East, Latin America, and the Caribbean are projected to witness steady growth of the offshore decommissioning market. Countries in the Asia-Pacific, such as China, Indonesia, and Malaysia have a significant number of offshore platforms that are eligible for decommissioning. In Latin America and the Caribbean, maturing wells in Brazil, Colombia, and Trinidad and Tobago offer decommissioning opportunities. There is an increasing focus on offshore oil & gas production in Middle Eastern countries, such as Saudi Arabia, UAE, and Qatar, which would bring future opportunities for the offshore decommissioning market.

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The offshore decommissioning market is served by a mix of large international players with presence and capabilities across different regions and local players with a strong presence in their domestic markets. The key players operating in the market include Amec Foster Wheeler ASA (France), Aker Solutions (Norway), AF Gruppen S.A. (U.S.), Tetra Technologies (U.S.), John Wood Group PLC (U.K.), Able UK (U.K.), DNV GL (Norway), Heerema Marine (The Netherlands), Allseas Group (Switzerland), DeepOcean Group (The Netherlands) and Technipfmc PLC (U.S.), among others.