Australia’s offshore oil and gas sector is entering a major decommissioning phase, driven by ageing infrastructure, stricter regulations and growing environmental accountability

According to a Xodus report, the decommissioning liability for all assets in Australian Commonwealth waters is estimated at UA$43.6bn through 2070, or AU$66.8bn when adjusted for inflation. This encompasses more than 700 wells, 7,600 of pipelines and 520 subsea structures. Around 55% of the decommissioning (AU$25bn) will occur before 2040, with the remaining decommissioning activities mainly occurring by 2050.

Offshore Network has issued a new report entitled “The Decommissioning Landscape in Australia in 2026”, which:

• Highlights the scale of activity and main projects underway and planned, such as the Bass Strait project, Northern Endeavour decommissioning and Barrow Island / WA Oil. 
• Examines the complex regulatory environment and the ongoing evolution of the regulatory framework, highlighting the role of NOPSEMA in ensuring operators meet their decommissioning obligations in a timely, safe and environmentally responsible manner.
• Discusses some of the infrastructure and supply chain challenges for operators, such as ports, dismantling and disposal, vessel availability and workforce constraints, and how these are adding to cost pressures.
• Looks at how the deployment of new technologies and engineering practices can help improve project outcomes and reduce costs, drawing on the experience of more mature basins.
• Explores how operators are employing strategies and practices that will help them deliver projects more efficiently, with a stronger focus on advance planning and portfolio-wide decommissioning strategies 
• Assesses the opportunities for the creation of decommissioning ecosystems and the development of local industries to support decommissioning activities, for example in recycling, with operators increasingly looking to recycle waste materials and adopt circular economy principles.

The report concludes that the industry’s success will depend on collaboration across stakeholders, regulatory alignment and investment in domestic capability, along with the adoption of best practice and enabling technologies, incorporating learnings from more mature basins. That being the case, Australia can look forward to the prospect of a robust, safe, responsible and economically sound decommissioning industry characterised by mature, repeatable execution models in the long term.

Download the report

The report can be downloaded here.