OFFSHORE DECOMMISSIONING MARKET ANALYSIS

Market Concentration and Competitive Landscape

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Oil and gas companies are always looking for more profitable reserves to sustain and grow their long-term production levels. With the costs of major new field development projects regularly running into the billions of dollars, operators are increasingly choosy about where they invest their capital. One of the key evaluation criteria is the ultimate decommissioning liability which will be incurred decades down the line once the field ceases production. Establishing facilities further offshore or in more challenging environments involves higher upfront costs and results in complex decommissioning operations costing hundreds of millions or even billions of dollars. In many cases, the projected decommissioning expenses for a potential new project are simply too high for companies to accept. As a result, marginal or less profitable resources are left undeveloped. This spurs the demand for new solutions and technology from the decommissioning market to make stripping and removal of facilities more cost-effective. Any reductions in projected end-of-field clean-up bills could help tip the scales in favor or developing some stranded hydrocarbon resources that might otherwise remain untapped.