Australia’s offshore oil and gas industry is undergoing a seismic shift, with an estimated 5,695 kilotons of infrastructure set to be decommissioned from its coastal waters by 2060 and beyond.
This monumental effort, spanning both onshore and offshore activities, involves a broad range of businesses, from initial planning and permitting to dismantling offshore platforms and recycling materials. It’s a complex process that includes plugging oil and gas wells, removing pipelines, dismantling steel structures, and safely disposing of waste materials. As the industry adapts to the future, the scale of decommissioning is expected to evolve, and the potential impact on Australia’s economy, environment, and job markets is immense.
The expanding offshore decommissioning value chain
Australia’s offshore decommissioning value chain is vast, with many key players involved in various stages of the process. Key activities include:
* Planning and securing necessary approvals: Obtaining government permits and satisfying environmental regulations are crucial first steps.
* Removal of subsea infrastructure: This includes plugging and abandoning over 1,000 wells, removing more than 4,960 km of pipelines and 1,700 km of flowlines from the seabed, and dismantling a host of offshore facilities such as fixed production platforms and floating production storage facilities
* Waste management and recycling: Steel, plastics, and other materials are salvaged and recycled, while hazardous materials are safely disposed of.
The Gippsland Basin, located off the coast of Victoria, holds a significant portion of the offshore infrastructure, accounting for about 9% of the total materials slated for decommissioning. However, the bulk of the work lies in Western Australia, where 89% of the material to be removed is concentrated. The sheer scale of this operation requires a coordinated effort among various stakeholders, including government agencies, private companies, and environmental organizations, to ensure that decommissioning is done responsibly and efficiently.
The costs and economic implications
The cost of decommissioning in Gippsland Basin and North Carnarvon Basin alone is projected at US$11bn by 2032. This is just the beginning, as decommissioning peaks are expected in 2033-2037 and 2043-2047, corresponding with the end of life for large infrastructure projects.
With the ongoing evolution of offshore wind, decommissioning activities will only become more extensive and expensive. The pipeline of decommissioning projects is projected to continue expanding well into the second half of this century, shaping Australia’s energy landscape for decades to come.
The information in this article is sourced from the Department of Industry, Science and Resources. You can read more here
Ultra-deepwater applications require high performance, modular well stimulation services.
The digital control system in Caltex’s Rigless Stimulation Tool (RST) helps in minimising flow path restrictions as its fast response time and seamless integration into a Multi-Purpose Service Vessel (MPSV) with multiple command stations ensure prompt addressal.
The tool can withstand any chemicals used in stimulations and scale treatments, ranging from acids, solvents, paraffin treatments, fines, and asphaltene deposits in production tubing, completions, and reservoirs. Operators can deploy RST to access candidate wells, particularly the ones with limited direct vertical access (DVA) under production facilities, to safely operate interventions as well as other activities.
Caltex’s RST is rated for sub-ambient pressure operations where the well mudline pressure is lower than hydrostatic conditions. The company's instrumentation and conduits are suitable from near 0 PSIA to 15,000 PSIA at 10,000 feet subsea.
Learn more about Offshore Network's well intervention conferences here.
The Middle East, home to vast oil and gas reserves, continues to play a central role in meeting global energy demands. Nations like Saudi Arabia, the UAE, and others remain key players in shaping the global energy landscape. The region’s reliance on fossil fuels, however, faces increasing scrutiny amid the global push for sustainability and net-zero goals.
This dynamic was evident at COP28, where debates centred on reconciling fossil fuel use with climate action. Saudi Arabia, a leading voice in the Organisation of the Petroleum Exporting Countries (OPEC), supported a compromise in the summit's final agreement, advocating for an equitable transition that respects each nation's unique circumstances. This approach aligns with Saudi Arabia's efforts to lead the region in adopting technologies like carbon capture and storage (CCUS) to reduce emissions without abandoning its economic backbone.
Key developments at COP28 included the signing of the Oil and Gas Decarbonisation Charter (OGDC) by 50 companies, including Aramco and ADNOC. The charter commits signatories to lower greenhouse gas emissions, enhance transparency, and phase out routine flaring by 2030. It also promotes investments in low-carbon fuels and negative emissions technologies to address methane emissions effectively.
“At ADNOC our aim is to reduce the methane intensity from our operated oil and gas assets, at the same time as we meet the forecast growth in energy demand for decades to come. We will do this by making significant investments in new technologies to improve our environmental performance, strengthening our commitment to responsible production and demonstrating our support for the UAE’s Global Methane Pledge,” said Abdulmunim Saif Al Kindy, Executive Director, People, Technology & Corporate Support Directorate at ADNOC.
Methane reduction remains a focal point, with proven measures capable of cutting emissions by over 75%. Saudi Arabia’s Middle East Green Initiative (MGI) aims for a regional emissions reduction of 670 million tonnes of CO2, contributing to national and collective goals. ADNOC, targeting net-zero emissions by 2045, has set a methane intensity reduction target of 0.15% by 2025—the region's lowest. It employs advanced methods such as flare gas recovery, infrared leak detection, and drone-mounted sensors to curb methane emissions.
Emerging technologies also play a crucial role. Well integrity issues, a significant source of methane leaks, are addressed with solutions like metal expandable packers (MEP) by Welltec. Successful trials in ADNOC’s Bab field have demonstrated MEP’s efficacy in preventing methane leakage, underscoring the industry's shift toward sustainable practices.
Malaysia is set to receive Shelf Drilling’s 1983-built Baltic jack-up rig to kickstart a multi-year plug and abandonment programme
Last upgraded in 2015, the rig can support up to 120 crewmen, and comes with the Marathon LeTourneau Super 300 design.
It is anticipated that T7 Global has acquired the rig from the Dubai-based provider to facilitate Petronas Carigali’s P&A initiative.
As Petronas continue to invest in innovative well solutions to boost production, the operator also has plans to permanently plug more than 500 wells over the next five years.
A groundbreaking offshore construction vessel is being used for a Gippsland Basin decom contract, which will provide a safer and more cost-effective removal of platforms.
The Esso Australia Pty Ltd (Esso Australia), a subsidiary of ExxonMobil Australia, recently awarded Switzerland-headquartered Allseas, a leading contractor in the offshore energy market, the contract to remove up to 12 retired platforms from the Gippsland Basin in the Bass Strait, with a combined weight of approximately 60,000 tonnes. It covers up to 12 topsides and up to 11 steel jackets.
Allseas will utilise the Pioneering Spirit, which the company says is the largest, most versatile offshore construction vessel in the world, designed for the single-lift installation and removal of offshore platforms and the installation of record-weight pipelines.
The emergence of Pioneering Spirit sets new standards in offshore installation and decommissioning, according to Allseas. Capable of lifting entire platform topsides of up to 48,000 t and jackets up to 20,000 t in a single piece, it significantly reduces the amount of offshore work associated with installation and decommissioning, moving the work onshore where it is safer and more cost effective and reducing the time required to execute such contracts. The vessel set a new world record for the heaviest lift ever performed in July 2024, when it removed the last platform of the Shell Brent field in the North Sea, Brent Charlie, with topsides weighing 31,000 t.
Allseas plan to remove all the structures with Pioneering Spirit in just three to four months, starting late 2027. Once removed, the facilities will be transferred to barges or vessels for load-in to the Barry Beach Marine Terminal in Victoria for dismantling and recycling by a separate onshore contractor. Planning and engineering work is already underway.
Fishing forms an integral part of even the plugging and abandoning process, besides its significance in drilling, completing or recompleting.
A North American company called Wellbore Fishing & Rental Tools LLC provides operators with these services, with a special emphasis on risks, costs and downtime reduction.
With strategically located yards in Port Fourchon and Texas City, the company's position near the loading docks serve as holding locations for fishing tools, eliminating shipping time, thus in turn, working wonders in bringing down NPT.
Comprising of a workforce with decades-long experience in the industry, the company personnel works on the basis of continued research and development to meet the demands and challenges of an ever-evolving industry. Personnel training in the company is usually driven by exposure to new equipment and process solution. Currently, the team is focusing on adapting real time technology to monitor tool performance parameters and high performance tool properties for extreme deep-water service applications.
The European offshore well intervention market is witnessing dynamic growth, driven by geopolitical shifts and strategic investments in the region. According to industry data, the onshore segment dominates Europe’s oil production landscape, accounting for 65% of rigs. However, the offshore sector, including the Norwegian Continental Shelf and the Mediterranean Sea, is rapidly emerging as a critical area for well intervention activities, particularly due to evolving energy demands and sanctions on Russia.
Norway leads offshore expansion
Russia remains the largest exporter of oil and natural gas in Europe. However, sanctions imposed by European and North American countries have significantly impacted the Russian oil and gas industry. These sanctions, however, present growth opportunities for Norway, Europe’s second-largest natural gas producer, to strengthen its position in the offshore well intervention market.
In 2021, natural gas demand showed recovery to pre-crisis levels and was projected to rise modestly during the forecast period. Exploration activities in offshore regions like the North Sea have surged, driven by Norway’s strategic investments. The Norwegian Petroleum Directorate’s Awards in Predefined Areas (APA) 2020 offered 30 companies ownership interests in 61 production licenses, with 34 licenses located in the North Sea. This offshore region alone holds 18% of Norway’s undiscovered oil and gas potential, highlighting the growing importance of offshore well intervention activities.
Equinor and its partners have also focused on offshore development, investing NOK 3 billion (approx. US$300mn) in the Statfjord Øst field in 2020. This project involves installing gas lift pipelines, modifications on the Statfjord C platform, and drilling new offshore wells. These interventions are designed to recover an additional 23 million barrels of oil, with production expected to start by 2024.
In recent years, Norway has prioritised sustainable offshore operations. Companies are adopting advanced upstream technologies to reduce greenhouse gas emissions, aligning with the European Union’s 2030 targets and the long-term goal of net-zero emissions by 2050. These efforts position Norway as a leader in the offshore well intervention market, especially as European countries seek reliable energy sources amidst Russian sanctions.
Conclusion
The European offshore well intervention market is poised for significant growth, with Norway leading the charge. As geopolitical factors reshape energy dynamics, offshore activities will play an essential role in ensuring reliable energy supplies while addressing environmental sustainability.
This analysis is based on the Europe Well Intervention Market report by Mordor Intelligence. For further insights into both onshore and offshore well intervention, visit, Mordor Intelligence.
On January 15, 2025, Chevron has announced that it did not find commercial hydrocarbon reserves in its exploration well, Kapana 1X, located in Namibia’s Orange Basin within the PEL90 block.
Despite the absence of viable reserves, the company emphasised that the well provided valuable geological data, enhancing its understanding of the basin. Chevron indicated that it plans to continue exploring Namibia in the future, as the country remains a key area of interest for oil producers.
Namibia has recently become a hotbed for offshore oil discoveries, with several large-scale finds making headlines as some of the biggest of the century. However, not all exploration efforts have been successful. Last week, Shell revealed a US$400 million write-down on an offshore discovery in Namibia, deeming it commercially unviable.
In a separate development, Namibia’s national oil company announced in April that it had entered into a deal with Chevron, granting the US company an 80% operating working interest in an offshore block in the Walvis Basin, marking a new phase in Chevron’s involvement in the country’s energy sector.
To resolve methane emissions challenges during a decommissioning programme, Interwell P&A's RockSolid turns out to be an ideal solution
The company had addressed such an issue during a Canada operation, when it was able to shut in a shallow methane gas source ejecting around 0.55 cu/m per day by installing a gas-tight barrier at 773mKB inside a competent caprock.
The emission was initially isolated and later stopped, enabling a smooth delivery of the decommissioning programme. It was a result of a surface casing vent flow (SCVF) issue in a well, where two different gas sources were identfied following pre-intervention logging. The installation of the RockSolid barrier ensured that it was effectively sealed from the roots, allowing ongoing research to address the shallow source. This was shut off by the installed RockSolid that replaced the casing and cement, obstructing any hydrocarbon flow inside the borehole. As gas pockets above the barrier had bled off, the well decommissioning programme was carried out unhindered.
The RockSolid remains a sustainable plugging alternative.
Click here to register for Offshore Network's Gulf of Mexico Decommissioning and Abandonment conference.
One of the latest industry innovations in the subsea well intervention market is Unity's Subsea Compact Shear-Seal Blowout Preventer.
As a BOP safety head, the CSS can provide critical safety barrier above the subsea tree as part of the landing string.
A result of Unity’s original, field-proven, compact and lightweight surface design, the Subsea CSS comes with a friendly modular interface, ideal for any mode of deployment, be it rig-based, in-riser intervention, or light well intervention open water riser and riserless as well.
Redefining strength and durability in the subsea environment, the Subsea CSS can be classified as a high performing safety barrier which takes less than 10 seconds of closing time. It is 50% lighter than conventional designs, and measures 33.5″ at its widest point, requiring less deck space. Targeted at the shallow water market for standard pressure abandonment and intervention applications, the model requires on additional personnel for operation. It boasts of an universal shear and seal capability, applicable to rods, coiled tubing, wireline, slickline and e-line.
Easily adaptable to dual ram configuration, it is designed for easy access to rams and seals for redress and to replace rams for varying applications.
Check out Offshore Network's upcoming well intervention conferences here.
The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA), with its regulatory priorities, aims to address the numerous challenges surrounding offshore decommissioning in Australia. Some of the most common ones include:
Australia's decommissioning industry appears to be lacking a fixed plan about its end-state, thereby affecting upcoming decommissioning projects. An additional disadvantage is NOPSEMA's recently introduced 'trailing liability' which enables former titleholders to be called back to work on residual work. Taking into account the immense costs and liability involved, the risk of future decommissioning liability following title relinquishment needs to be appropriately addressed by companies planning decommissioning campaigns.
In its recent skills review, the Centre of Decommissioning Australia (CODA) recognised a significant shortcoming of resources in a number of areas including recycling and waste management, regulatory compliance management, decommissioning planning and reporting and stakeholder management and consultation. One major challenge is that the investment in oil and gas projects and renewable energy industry prevents the existing oil and gas workforce from transitioning their skills to decommissioning. It is therefore important for the government at a state level to address these issues and ensure that project work and revenue remains in Australia.
The availability of limited onshore facilities and ports that are capable of dismantling, recycling, disposing and handling massive topside and substructure loads is found to be a major challenge. In addition to this, the long distances and cost of chartering vessels have a significant impact on the cost and time of decommissioning. Building ports and onshore facilities that fulfil these purposes would help address these challenges.
A limited supply of vessels poses a significant challenge for decommissioning project planning. This is exacerbated by ongoing oil and gas investments as well as emerging renewable energy projects like the offshore wind project. Promoting clarity and openness around upcoming decommissioning projects would therefore help titleholders to better plan and collaborate.
As the dust settles on 2024, Mermaid Subsea Services (UK) Ltd. reports it has achieved a historic milestone by completing plug and abandonment (P&A) services across 30 wells in the UK North Sea throughout the year using the Island Valiant vessel.
This achievement marks the highest-number of vessel-based well decommissioning operations completed in a single year within the region. Looking back at its impressive catalogue throughout 2024, one of the most notable projects for the company was the 21 P&A campaign conducted on behalf of an operator across the Northern and Central North Sea. The project was believed to be the largest vessel-based North Sea decommissioning campaign in history.
Alongside this, Mermaid also completed the first stage of a major North Sea decommissioning contract for Shell UK Ltd., with subsequent phases to follow throughout 2025 and 2026.
Scott Cormack, Regional Director for Mermaid Subsea Services (UK), said, “It has been a monumental year for Mermaid, one that has cemented our position as a major player in the North Sea subsea and P&A market […] Recent research from Offshore Energies UK found that operators need to plug 200 abandoned North Sea oil and gas wells a year to stay on top of targets.”
Following last year’s success, Mermaid will continue to grow its presence in the region further in response to the company’s growing backlog with the introduction of its own dive vessel which is scheduled to enter the market later this year, as well as agreeing to charter the Valiant vessel for another season.
“With new additions, contract wins and completed projects, 2024 was an immensely successful year for Mermaid and we look forward to building on this further in 2025 when we will be bringing on our own dive vessel to the region.”
Page 47 of 122
