The offshore oil and gas decommissioning market in Denmark is expected to grow at a CAGR of more than 6% during the forecast period of 2020-2025. The maturing offshore fields and aging wells are moving towards the dry phase, driving the market of well decommissioning. With the increase in restrictive regulations, and the rising associated cost of operating aging platforms, the focus of operators on offshore decommissioning is increasing at a significant rate. On the other hand, the ongoing global pandemic of COVID-19 is likely to affect different operations and businesses and is expected to restrain the market growth.
Key Highlights
- With declining offshore fields in shallow water, the decommissioning of wells and platforms in shallow water are expected to dominate the market.
- The European Union is shifting towards renewable energy, resulting in a decline in the share of oil and gas. Additionally, in the future, deepwater fields are expected to undergo dry phase. With these opportunities in the decommissioning market are expected to grow.
- Abandonment of wells is expected to drive the market significantly. A large number of wells in the North Sea are expected to be abandoned during the forecast period.
Key Market Trends
Shallow Water Projects to Dominate the Market
- Most of the shallow fields in Denmark are under the declining phase, which is expected to create demand for decommissioning services in shallow water.
- It is also estimated that during the period of 2017-2025, more than 200 platforms forecast for complete or partial removal, close to 2,500 wells expected to be plugged and abandoned, driving the decommissioning market considerably.
- At least 23 platforms a year are expected to be retired in the North Sea alone, which are expected to drive the demand of well decommissioning during the forecast report.
- The number of maturing oil and gas facilities, including platforms, subsea wells, and other related assets, is increasing at a steady rate. Hence, the increase in the number of aging oilfields is likely to increase well-decommissioning activities in shallow water.
- Owing to the declining crude oil production from 157 thousand barrels per day in 2015 to 103 thousand barrels per day in 2019, majorly due to maturing shallow wells, the demand for decommissioning services in shallow water is expected to grow.
Plug and Abandonment Operations to Dominate the Market
- The well plugging & abandonment segment is expected to be the largest market, by service during the forecast period. This growth is evident owing to crucial activity to be performed regardless of decommissioning type; it ensures that oil wells do not have any kind of leakage after the cessation of production.
- In April 2020, the Danish Hydrocarbon Research & Technology Center (DHRTC) is started up a new research and innovation program with a focus on the abandonment of oil and gas fields.
- In 2018, Maersk Drilling and Maersk Supply Service established a joint venture company focused on the decommissioning market. According to Maersk Drilling, an increasing amount of offshore oil and gas fields are approaching the end of their economic life, and, in the North Sea alone, more than 400 fields are expected to cease production by 2026 at an estimated cost of $56 billion.
- Due to the aging of gas fields, gas production is showing a continuous decline in Denmark from 4.8 bcm in 2015 to 3.2 bcm in 2019. With the drying of gas fields, well abandonment services are likely to grow during the forecast period.
Competitive Landscape
The Denmark offshore oil and gas decommissioning market is consolidated. Some of the major companies include Bureau Veritas SA., Bureau Veritas SA, AF Gruppen ASA, A.P. Moeller Maersk A/S, and Saipem S.p.A.
Additional Benefits:
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
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