Expenditure in offshore decommissioning projects will rise as new markets opt to remove production and subsea infrastructure
Offshore decommissioning opportunities are opening in new markets in Asia Pacific and South America while spending will accelerate in mature areas such as the US Gulf and North Sea.
Expenditure in offshore decommissioning is expected to grow by almost 8% year-on-year and on average over this decade from US$5.3Bn in 2021 to over US$7.0Bn in 2025 and more than US$10.3Bn in 2030.
Total global offshore decommissioning over the decade is estimated to be around US$75.2Bn, of which around US$30.0Bn is already spent.
According to ABL Group, a third of the total spend is focused on Europe, particularly the North Sea and offshore Italy, while 23% is in the Asia-Pacific region, 17% in the US Gulf, 12% in Latin America (mainly Brazil and Mexico), 10% in Africa and 4% for the rest of the world.
From 2025-2030, US$50Bn of expenditure is expected, with the fastest growth in Asia where projects are underway in Australia and India, and projects being planned in Thailand.
A huge amount will be spent decommissioning the Bass Strait oil and gas production infrastructure in southeast Australia in the coming decade.
Brazil also offers decommissioning opportunities, with ageing shallow and deepwater fields coming to the end of their operational life. For example, plugging and abandoning wells in the shallow waters of the Guaricema field in the Sergipe Basin started in April 2025, and in 2024, Petrobras was decommissioning its deepwater semi-submersible production unit P-19 in the Campos Basin.
According to ABL, between 2023 and 2030, 1,310 platforms and 675 subsea installations will need to be removed and 140 open-water suspended wells plugged and abandoned. About 14 floating production storage and offloading (FPSO) vessels will be ready to be removed and either refitted and redeployed or sold for recycling.
An estimated 126 fixed platforms with a combined 900,000 tonnes of topsides and 560,000 tonnes of steel jackets will need to be removed.
Much of the decommissioning work will be undertaken in Europe and the US, with some platform structures being converted for reuse in carbon capture and storage projects and for offshore renewables.
The UK will be one of the main decommissioning markets as infrastructure is closed due to low production levels, high taxes and moderate energy prices.
During the rest of this decade, average decommissioning expenditure in the UK is forecast at between US$2.0Bn and US2.5Bn per year, up from around US$1.5Bn in 2021 and it could be as high as US$3.5Bn in 2030. Decommissioning represented around 12% of total oil and gas expenditure in the UK in 2023 and could rise to 33% by 2030. ABL expects decommissioning spending to overtake all oil and gas capital expenditure in 2029 or 2030.
Abandoned wells
Nearly half of all decommissioning expenditure in the UK is expected to be on well plugging and abandonment (P&A) and removing subsea wellheads.
In Norway, in April 2025, Equinor contracted Island Drilling, under a US$330M contract, to work with oil service companies to P&A subsea oil and gas wells on the Norwegian continental shelf during a multi-year campaign.
Another growth market for decommissioning is expected to come from offshore windfarms as these start to reach the end of their lifetimes. ABL estimates about 600 wind turbines and their foundations to be removed in the UK in the next five years, with a significant increase after 2030. These will include windfarms developed in the first round of licensing in the shallow waters of the Thames Estuary, off Norfolk and in Liverpool Bay which were installed and brought into production from 2003 to 2013.
The amount of structures and installations to be removed during a decommissioning project will depend on the jurisdiction of the field development, with some enabling toppling of jackets and others requiring almost full removal.
Other analysis
Analysis by Westwood Global Energy showed US$26.0Bn could be spent on decommissioning in the UK North Sea over the next decade, with well P&A alone accounting for about 50% of the cost.
Twenty-two UK fields ceased production in 2024, and about 12% of active UK fields will cease production in 2025, according to the London-headquartered energy analyst.
The UK’s North Sea Transition Authority (NTSA) estimates about £20.0Bn (US$26.0Bn) is forecast to be spent in the next decade, with an estimated 1,500+ wells to be plugged and abandoned by 2030. Overall, NTSA reports £40.0Bn (US$51.7Bn) will be spent on decommissioning in the North Sea based on constant 2021 prices.
