Market Trends of North Sea Offshore Decommissioning Industry
This section covers the major market trends shaping the North Sea Offshore Decommissioning Market according to our research experts:
Shallow Water to Dominate the Market
- The shallow water segment is expected to maintain its dominance in the forecast period, owing to factors, like low operational cost and recovering oil prices in the oil and gas market.
- Most of the offshore projects being decommissioned are in shallow water, due to the fact that early offshore products were mainly shallow water, while deepwater projects have sprung up in recent years. The average depth of the North Sea is only 95m and a maximum depth of 700m.
- Over the last few years, the average cost per well for decommissioning has gone down significantly, resulting in a growth of the market being studied in the forecast period.
- Therefore, with a number of offshore oil and gas projects, along with the rising investments in the offshore oil and gas sector, the demand for decommissioning is expected to increase significantly during the forecast period.
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United Kingdom to Dominate the Market
- The United Kingdom is expected to dominate the market in the forecast period due to the region being one of the first markets to use offshore oil and gas infrastructure, most of which are at decommissioning age in recent years and forecast period.
- The United Kingdom is expected to spend around EUR 15.3 billion on decommissioning over the next ten years. Approximately 2,400 wells are expected to be decommissioned across the whole North Sea and West of Shetland region, by 2027. Around 914 of these wells are located across the Norwegian, Danish, and Dutch sectors.
- In 2018, 8% of the overall expenditure of the oil and gas industry in UKCS went into decommissioning, this percentage was expected to grow over 10% in the coming years.
- The United Kingdom is set to become the global hub for decommissioning, reasons being the UK government's acknowledge for the same and the United Kingdom is the most mature decommissioning market.
- Therefore, factors, such as rising interests of governments toward decommissioning projects, along with aging, mature fields in the region are expected to drive the demand for the market in the coming years.
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