In 2020 offshore decommissioning has taken a nosedive, although there are encouraging signs of recovering into 2021 and beyond. Over the next decade forecasts suggest offshore decommissioning work valued at somewhere around £15 billion will be performed in the UK alone. Global forecasts is expected to be several times higher.
Initially it was anticipated that 202o would be a year of further growth in the UK market. OGUK’s Decommissioning Insight 2019 report had predicted that 62 fields would host decommissioning activity this year, we all know that reality has been very different.
The COVID-19 pandemic and the low oil price have been the reasons for this years decommissioning nosedive. COVID-19 made it challenging to execute projects, will the low oil price changed the economic landscape against which operators make strategic decisions.
It is suggested that around 70% of the planned offshore decommissioning projects have been deferred and 10% cancelled, only 20% has been gone ahead like planned.
The outlook for the service sector in 2021 is looking good. As much of the work has only been deferred, and signals that indicates that offshore decommissioning activities will increase notably in 2021 – especially when we can finally see some light at the end of the COVID-19 crisis tunnel.