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COVID-19 Impact on Offshore Decommissioning Market – Global Industry Analysis and Forecast 2025

The demand within the global offshore decommissioning market is expected to apex to new heights in the years to follow. Advancements in the marine industry are responsible for the growth of this market. Furthermore, the use of offshore decommissioning to maintain sustained and manageable marine traffic has also aided market growth. Ships and vessels become defunct beyond repair after a point in time, and it becomes necessary to replace them with new vessels. Hence, the domain of offshore decommissioning has emerged as a key area of growth within the marine industry. Furthermore, the seriousness shown by port operators to decommission defunct ships has also driven market demand.

  • Digitalisation of the marine industry has made it easier to understand the workability of ships and vessels. Hence, vessel operators are quick to decide on the need for offshore decommissioning. The total volume of revenues within the offshore decommissioning market is projected to increase alongside improvements in marine services. Companies such as Deloitte offer digital services to convert ports into smart docks.
  • Ships and vessels that start consuming increased amount of fuels need to be reconsidered for sailing. Hence, the need for offshore decommissioning has become an important component of the decision-making process in the marine industry. Several experts have extended their opinions on the ratio of decommissioning that should ideally be followed by vessel operators.

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Environmental concerns related to the use of excessive number of vessels has also driven market demand. Vessel operators are required to decommission functional ships when the number of ships exceeds the permitted figure. Therefore, the global offshore decommissioning market holds bright prospects for growth and investment in the years to follow. Regions with well-established ports are the largest consumers within the offshore decommissioning market.

Decommissioning is the last phase of any offshore oil and gas project. The process of decommissioning involves safe plugging of the wellbore in the earth’s surface and disposal of equipment used in offshore oil and gas production. In the Gulf of Mexico, decommissioning of offshore oil and gas platform has become mandatory for oil and gas operator companies. Decommissioning operation helps maintain safety and sanity of the offshore environment. An offshore decommissioning operation requires 10 steps to be followed for successful completion of the project. These 10 steps are project management; engineering; and planning; permitting and regulatory compliance; platform preparation; well plugging and abandonment; conductor removal; mobilization and demobilization of derrick barges; platform removal; pipeline and power cable decommissioning; materials disposal; and site clearance. Companies operating in the decommissioning market either specialize in one of the aspects or may provide complete services mentioned above.

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The offshore decommissioning market can be segmented into two broader areas: decommissioning services or activities; and application in shallow water, deep water, and ultra-deep water.

The major driver for decommissioning market is strengthen & mandatory legal guidelines for offshore oil and gas operations setup by the regulatory bodies of respective nations. Presence of the aging oil reserves and abandoned wells in matured offshore oil fields across the world is another factor driving the decommissioning market. Major potential risk of oil spill or leakage through these abandoned oil and gas wells may cause ocean water pollution, thereby threatening the marine ecosystem. This poses difficulty in cleaning and recovery of oil spill and then decommissioning the well after any such incident. The cost involved in decommissioning of such disturbed oil wells or platforms is high. Technically, this poses various challenges. Discovery and development of new oil reserves in offshore (mostly deep water) areas around the world is another factor boosting the global offshore decommissioning market. New discoveries of offshore oil deposits such as Liza field in Guyana, Offshore Kutch basin in India, and Tupi offshore oil field in Brazil indicate the future oil production opportunity in these offshore fields, which are likely to require decommissioning services after their abandonment.

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Recent downturn in prices of oil is expected to be a key restraint to not only exploration and development activities of oil and gas but also decommissioning operations. Decrease in oil prices has caused a continued decline in cash inflow and rise or hike in debt levels could challenge the future of oil and gas industry.

The global offshore decommissioning market is expected to expand in the near future. North America is anticipated to be a major region of this market, owing to the presence of the Gulf of Mexico offshore oil reserves in the region. Europe is also estimated to contribute significantly to the offshore decommissioning market, as its North Sea offshore oilfields are & aging. Latin America has significant undeveloped offshore oil reserves in countries such as Venezuela, Brazil, and Guyana. Thus, the region is likely to be an attractive market for offshore decommissioning in the near future. Middle East & Africa has large fossil fuel wealth; thus, the region is expected to be a major contributor to the decommissioning market. The decommissioning market in Asia Pacific is anticipated to expand at a steady pace during the forecast period.

Key players operating in the decommissioning market are Petrofac Limited, Aker Solutions, TechnipFMC plc., Ramboll Group, Deepocean Group Holding B.V., Amec Foster Wheeler, PLC., AF Gruppen, Claxton Engineering Services, Ltd., DNV GL AS, and Allseas.

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The report offers a comprehensive evaluation of the market. It does so via in-depth qualitative insights, historical data, and verifiable projections about market size. The projections featured in the report have been derived using proven research methodologies and assumptions. By doing so, the research report serves as a repository of analysis and information for every facet of the market, including but not limited to: Regional markets, technology, types, and applications.

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Offshore Decommissioning Market Overview and Regional Outlook Study 2017 – 2025

Global Offshore Decommissioning Market: Overview

Offshore decommissioning is the process of disassembling offshore oil platforms, which also includes burying the holes drilled into the ground for exploration and extraction purposes. Mature oil platforms can have an adverse impact on the surrounding environment, which necessitates their removal. The global offshore decommissioning market is likely to remain a key sector of the global oil and gas industry in the coming years, as the latter is likely to emphasize increasingly on offshore petroleum extraction. Well plugging and abandonment is likely to remain the key segment of the global offshore decommissioning market in the coming years, with the extensive scale of the operation key in ensuring a steady dominant share for the segment in the global market.

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Global Offshore Decommissioning Market: Key Trends

The global offshore decommissioning market is likely to exhibit steady growth in the coming years due to the rising number of mature oilfields, which no longer remain commercially viable. The high number of aging platforms in shallow water is also likely to remain a key driver for the global offshore decommissioning market in the coming years.

On the other hand, the high cost of offshore decommissioning projects could hinder the growth of the global offshore decommissioning market. Due to the large scale of offshore oil and gas platforms, significant expenditure needs to be dedicated for effective offshore decommissioning projects. Since the expenses go toward removing a nonfunctional asset rather than expanding the existing capacity, many players in the global oil and gas industry have remained reluctant about offshore decommissioning. The technology required to carry out offshore decommissioning efficiently are also lacking in several regions, as is systemic support from the regulatory framework. This is also likely to restrain the global offshore decommissioning market in the coming years.

The rising use of techniques to maximize and prolong the viability of oilfields is also likely to restrain the growth of the global offshore decommissioning market in the coming years. Refilling and other techniques can help extend the operational lifespan of oilfield by a few years, and result in further profits for the oil and gas operator. This remains a key challenge for the offshore decommissioning market in the coming years, as offshore decommissioning remains unprofitable both economically as well as logistically compared to these techniques.

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Global Offshore Decommissioning Market: Market Potential

Oil and gas operations in the North Sea are likely to be vital to the global offshore decommissioning market in the coming years. The U.K. and Norway are among the leading oil producers operating in the North Sea and are likely to remain among the key consumers of offshore decommissioning technology in the coming years. As a result, Europe is likely to be the leading regional offshore decommissioning market over the coming years.

Global Offshore Decommissioning Market: Geographical Dynamics

Following Europe, North America is also likely to retain a significant share in the global offshore decommissioning market due primarily to the rising role of the U.S. in the global oil and gas sector. The U.S. has traditionally been a major player in the oil and gas industry and is a leading operator of offshore oilfields at present. The rising prominence of Southeast Asian countries such as Indonesia and Malaysia in the global oil and gas sector is also likely to drive the Asia Pacific market for offshore decommissioning in the coming years.

Global Offshore Decommissioning Market: Competitive Dynamics

The leading players in the global offshore decommissioning market include AF Gruppen ASA, Amec Foster Wheeler Plc, John Wood Group Plc, Ramboll Group, Aker Solutions ASA, and Tetra Technologies Inc.

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