Denmark Offshore Oil And Gas Decommissioning Market

Denmark Offshore Oil And Gas Decommissioning Market Analysis

The Denmark Offshore Oil And Gas Decommissioning Market is expected to register a CAGR of greater than 6% during the forecast period.

The market was negatively impacted by the outbreak of COVID-19, the crash in the crude oil price, and regional lockdowns. Currently, the market has recovered to pre-pandemic levels.

• The maturing offshore fields and aging wells are moving towards the dry phase, driving the market for 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 volatile nature of oil prices in recent years led to decreased capital expenditure in the upstream oil and gas industry, causing a slowdown in the market studied.
• The share of oil and gas is going down because the European Union is moving toward renewable energy. Additionally, in the future, deepwater fields are expected to undergo a dry phase. With these opportunities, the decommissioning market is expected to grow.

Denmark Offshore Oil And Gas Decommissioning Market Trends

Shallow Water Projects to Dominate the Market

• Most of the shallow fields in Denmark are in the declining phase, which is expected to create demand for decommissioning services in shallow water.
• It is also expected that between 2022 and 2025, more than 200 platforms will be removed completely or partially, and close to 2,500 wells will be plugged and left alone, which will drive the decommissioning market a lot.
• At least 23 platforms a year are expected to be retired in the North Sea alone, which is expected to drive the demand for well decommissioning during the forecast report.
• The number of platforms, subsea wells, and other oil and gas assets that are reaching the end of their useful lives is steadily rising. Since there are more oilfields that are getting older, there will probably be more wells shut down in shallow water.
• Crude oil production was expected to drop from 142 thousand barrels per day in 2016 to 65 thousand barrels per day in 2021, mostly because shallow wells are getting old. This will increase the need for decommissioning services in shallow water.

Plug and Abandonment Operations to Dominate the Market

• The well-plugging and abandonment segment is expected to be the largest market by service during the forecast period. This growth is evident owing to the crucial activity that must 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) was expected to start 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 joined forces to create a business that works in the decommissioning market.According to Maersk Drilling, an increasing amount of offshore oil and gas fields are approaching the end of their economic lives, and, in the North Sea alone, more than 400 fields are expected to cease production by 2026 at an estimated cost of USD 56 billion.
• Due to the aging of gas fields, gas production is showed a continuous decline in Denmark, from 4.7 bcm in 2016 to 1.3 bcm in 2021. With the drying of gas fields, well abandonment services are likely to grow during the forecast period.

Denmark Offshore Oil And Gas Decommissioning Industry Overview

The Danish offshore oil and gas decommissioning market is consolidated. Some of the major companies (in no particular order) include Bureau Veritas SA, Bureau Veritas SA, AF Gruppen ASA, A.P. Moeller Maersk A/S, and Saipem S.p.A.

Denmark Offshore Oil And Gas Decommissioning Market Leaders

Denmark Offshore Oil And Gas Decommissioning Market News

• April 2023: ABL Group announced that the company won a decommissioning contract in the Danish North Sea from TotalEnergies SE.