LONDON--(BUSINESS WIRE)--Technavio market research analysts forecast the global offshore decommissioning market to grow at a CAGR of close to 5% during the period 2018-2022, according to their latest report.
In this report, Technavio highlights the rising investments in renewable energy as one of the key emerging trends in the global offshore decommissioning market. The key to achieving economic, social, and environmental development is to shift from fossil fuels to renewable sources such as wind, solar, and geothermal. In 2016, the global energy investments were over USD 1.7 trillion, though lower compared with that in 2015. This was mainly due to technology advances that help reduce the overall capital expenditure per MW of power generation. For example, the installation cost associated with solar photovoltaics has reduced substantially, which is likely to affect the consumption levels of fossil fuels for power generation and increase the adoption rate of solar energy.
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In this report, Technavio analysts highlight the maturing oil and gas fields and aging platforms as a key factor contributing to the growth of the global offshore decommissioning market:
Maturing oil and gas fields and aging platforms
The decline in production of crude oil or natural gas from the producing well is the primary factor leading to decommissioning an oil field. The oil well becomes a liability for the oil company when the production reduces to the level where the operating cost involved in running the offshore facility is high, and the revenue generated by selling the crude oil is low, as it is no more economically feasible to continue with the operations. In such a scenario, the offshore facility is required to be decommissioned by plugging and abandoning the well.
According to a senior analyst at Technavio for oil and gas, “Around two-thirds of the global oil and gas production comes from mature oil and gas fields. At present, challenges faced by oil and gas operators are increasing the returns on existing assets as they need to mitigate the challenge due to the decline in new and major findings of oil and gas reserves. Increasing the hydrocarbon recovery from mature fields involves extending the life of the well through secondary and tertiary recovery methods. When the production is low despite the use of enhanced oil recovery techniques, it is essential to decommission as the profits from the well deteriorates. The North Sea is an appropriate example of a mature OECD oil producing offshore region. Globally, the increasing number of mature hydrocarbon assets is anticipated to drive the growth of the global offshore decommissioning market.”
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Global offshore decommissioning market segmentation
EMEA was the leading region for the global offshore decommissioning market in 2017, accounting for a market share of nearly 59%. By 2022, EMEA is expected to continue dominating the market and register the highest growth rate.
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