In its Western Europe Decommissioning Market Forecast 2017-2040 report, Westwood forecast that US$105 billion would be spent on decommissioning across Western Europe between 2017 and 2040, as the region became the first area outside the Gulf of Mexico to experience large-scale offshore decommissioning activity.
The report provided a comprehensive assessment of decommissioning trends and expenditure across Croatia, Denmark, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Spain and the UK, highlighting the scale of the opportunity and the challenges facing the industry.
Key findings included:
- Well decommissioning was forecast to account for the largest share of expenditure, representing 65% of the total market over the 2017-2040 period.
- Expenditure on well decommissioning was expected to be particularly high in established producing nations with large numbers of subsea wells, notably Norway and the UK.
- Substructure and topside removal were forecast to represent a combined 20% of total expenditure, with the majority of platforms expected to be removed using reverse installation methods.
- Single Lift Vessels were becoming an established technology and had the potential to significantly reduce the cost and duration of decommissioning operations.
- With the largest population of ageing platforms, the UK was expected to account for the largest share of decommissioning activity in Western Europe, representing 54% of total expenditure and 45% of platform removals over the forecast period.
- The market was expected to experience a series of peaks and troughs between 2017 and 2040, with 2031-2035 forecast to see particularly high levels of expenditure as activity increased in Norway and the UK.
- Lower demand for operations and maintenance services, combined with efficiency gains by operators, had resulted in lower operating costs. Westwood’s field economics model was updated accordingly, leading to revisions to the projected abandonment and decommissioning schedules of a number of fields within the forecast.
The report highlighted that the expected increase in decommissioning activity would create significant opportunities for specialist companies across the supply chain, including vessel contractors, cutting service and equipment providers, shipyards, and waste management and disposal specialists. It also noted that industry focus was expected to remain on maximising cost efficiency, ensuring decommissioning operations were carried out safely, efficiently and without incident, while continuing to explore opportunities to reduce overall decommissioning costs.
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