Oil and gas vessel decommissioning has gained momentum in recent years due to the emergence of strict regulations mandating decommissioning of inactive vessels. Vessels used by the oil and gas industry last a significant number of years, but leaving nonoperational oil and gas vessels stranded in the sea comprises a major threat to marine life. Due to this, several environmental regulations mandating decommissioning of oil and gas vehicles have come into effect in the past few years, propelling the global oil and gas vessel decommissioning market.
An oil and gas vessel may also be decommissioned as part of a normal lifecycle, since technological innovation in oil and gas exploration and extraction techniques leads to older vessels becoming obsolete over time. Upgrading them may not always be the financially viable option, leading to decommissioning.
Increasing Offshore Oil and Gas Exploration to Boost Global Oil and Gas Vessel Decommissioning Market
Due to the increasing scarcity of onshore oil and gas resources, deepwater and ultra-deepwater oil and gas exploration is picking up speed. This presents a significant opportunity for oil and gas vessel decommissioning companies, since setting up a new offshore petroleum extraction site requires decommissioning of the vessels used at the company’s previous site. The increasing number of deepwater and ultra-deepwater oil and gas exploration projects will thus help the global oil and gas vessel decommissioning market.
The rapid pace of innovation in the field of oil and gas vessels is also helping the oil and gas vessel decommissioning market, since vessels are now becoming obsolete quicker than before. This will also aid the global oil and gas vessel decommissioning market.
On the other hand, the high cost of decommissioning an oil and gas vessel is one of the major restraints acting on the global market for the same. The comprehensive activity involved in decommissioning oil and gas vessels raises the cost of the process, which further leads to oil and gas companies trying to avoid it. This will also hamper the global oil and gas vessel decommissioning market in the coming years.
Substructure Decommissioning to Lead Global Oil and Gas Vessel Decommissioning Market
According to type of decommissioning procedure, the global oil and gas vessel decommissioning market is segmented into substructure decommissioning and equipment and topside decommissioning. Among these, substructure decommissioning entails removal of all components of an oil and gas vessel, whereas topside decommissioning only partially removes the components. The total decommissioning achieved through substructure decommissioning is preferred by oil and gas companies, making it the dominant segment of the global oil and gas vessel decommissioning market.
The option of topside decommissioning is only selected when the vessel is too complicated to remove completely. The components removed via either process are reused in new offshore constructions, helping the industry players achieve significant savings in the construction of new exploration and extraction sites.
Rising Offshore Production off West Africa to Boost RoW Oil and Gas Vessel Decommissioning Market
The major regional segments of the global oil and gas vessel decommissioning market are North America, which includes major oil producers such as the U.S., Canada, and Mexico; Europe, including oil producers with a stake in the North Sea oil and gas reserves; Asia Pacific, dominated by China, Malaysia, and Indonesia; Rest of the World, led by the rising offshore oil and gas production off the coast of West Africa. Among these, the discovery of significant offshore reserves in the Atlantic Ocean off Africa will help the RoW register notable growth in the coming years.
Transparency Market Research (TMR) is a global market intelligence company providing business information reports and services. The company’s exclusive blend of quantitative forecasting and trend analysis provides forward-looking insight for thousands of decision makers. TMR’s experienced team of analysts, researchers, and consultants use proprietary data sources and various tools and techniques to gather and analyze information.