North Sea Offshore Decommissioning Market - Growth, Trends, and Forecast (2020 - 2025)
The market is segmented by Water Depth (Shallow Water, and Deepwater and Ultra-Deepwater), and Geography (United Kingdom, Norway and Rest of North Sea)
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Scope of the Report
Key Market Trends
TABLE OF CONTENTS
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The North Sea offshore decommissioning market is expected to grow at a CAGR of over 5% during the forecast period of 2020 – 2025. Factors such as aging offshore infrastructure in the oil and gas industry, rising offshore oil and gas production activities, and increasing oil and gas demand are expected to be major drivers driving the market. However, the volatile nature of oil prices in recent years led to decreased capital expenditure in the upstream oil & gas industry, causing a slowdown for the market studied.
The shallow water sector is expected to maintain an edge in the decommissioning services market in the forecast period, owing to factors like aging shallow water infrastructure.
The North Sea offshore decommissioning market is expected to see a significant increase see in the forecast period, as it was one of the earliest offshore regions to be explored and developed. The infrastructure installed 30-40 years ago at the peak of exploration in the region, are now being abandoned and decommissioned, which is expected to great a huge opportunity for the decommissioning market in the region.
The United Kingdom is expected to dominate the market growth, owing to factors like aging offshore infrastructure, declining production from mature oilfields, and stringent environmental policies.
Scope of the Report
The North Sea offshore decommissioning market report include:
Deepwater and Ultra-Deepwater
Rest of North Sea
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Key Market Trends
Shallow Water to Dominate the Market
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 have gone done significantly, resulting in a growth of the market being studied in the forecasted 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 grow 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 & 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 United Kingdom government’s acknowledge for the same and United Kingdom being the most mature decommissioning markets.
Therefore, factors such as rising interests of governments towards decommissioning projects along with aging, mature fields in the region are expected to drive the demand for the Offshore Decommissioning Services market in the coming years.
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The North Sea offshore decommissioning market is consolidated. Some of the major companies operating in the market being studied are Aker Solutions, AF Gruppen S.A., John Wood Group PLC, and Able UK among others.