The total value of the global pool of offshore oil and gas decommissioning projects that will accumulate through 2024 could reach $42 billion, with the North Sea region taking up the biggest chunk, most notably the UK part, energy intelligence company Rystad Energy said in a report.
Rystad says that, with an average asset age of 25 years, the Northwest European decommissioning market could grow 20% in annual commitments through 2022 if the current low oil prices don’t show signs of substantial recovery soon.
“In addition to a rapidly maturing asset base and low oil prices that erode commercial viability and potential life extensions, the North Sea decommissioning market will also be helped by favorable service contract prices,” Rystad said.
“Only about 15% of North Sea assets have been decommissioned to date, but in the coming five years we expect an average of 23 assets to cease production annually. The UK is poised to lead the way with nearly 80% of total estimated expenditure on Northwest European decommissioning in the next five years, followed by Norway with 14% and Denmark with 4%,” the Norwegian analysts said.