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Decommissioning of old oil, gas facilities to be worth $13 billion annually

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Staff Writer | December 1, 2016
The decommissioning of aging offshore oil and gas platforms, subsea wells and related assets is increasing dramatically.
Old oil field
Energy   The rapid trend toward decommissioning
More than 600 projects expected to be disposed of during the next five years alone. This rapid trend toward decommissioning is causing spending to rise significantly, according to a new study by IHS Markit.

IHS Markit expects spending on decommissioning projects to increase from approximately $2.4 billion in 2015, to $13 billion-per-year by 2040, or an increase of 540 percent, says the new IHS Markit Offshore Decommissioning Study Report.

The report provides a detailed market analysis and assessment of the legal, regulatory and financial requirements for decommissioning in the U.K., Norway, the U.S. Gulf of Mexico, Indonesia and Australia.

An additional 2,000 offshore projects will be decommissioned between 2021 and 2040, the report noted, and total expenditures from 2010 to 2040 will amount to $210 billion.

During the next five years, Europe will absorb approximately 50 percent of global decommissioning spending as the industry removes major offshore structures from the North Sea.

Each year, the industry currently decommissions an average of 120 projects on a global basis, IHS Markit said.