Australia’s Offshore Resources Decommissioning Roadmap

Australia’s strategic strengths and growth opportunities in decommissioning

Decommissioning is capital intensive and needs detailed planning and execution. Decommissioning activity also needs a range of specialist and often very large offshore vessels and rigs. As in other jurisdictions, most costs in a decommissioning project occur offshore. These costs include well plugging and abandonment as well as removing large offshore facilities, like jackets and topsides, from the marine environment (Norwegian Offshore Directorate 2019). To undertake this work, an experienced workforce, the right vessels available at the right time, and a culture of safety and environmental stewardship are needed.

Australia is well positioned to scale up a decommissioning industry because of the strength of our existing offshore industries. Upstream activities like planning and well plugging and abandonment are key strengths. Manoeuvring and installing large-scale offshore infrastructure, as well as operating safely and efficiently in the marine environment, are areas of competitive advantage. 

In these areas, Australia can apply its already significant experience and expertise to support a sustainable decommissioning industry (KPMG 2023). Other areas represent opportunities to grow Australia’s capabilities, such as through increased innovation in end-of-life material management. 

Australia's strengths and growth opportunities. Full description follows.

Australia’s strategic strengths and growth opportunities in decommissioning (KPMG 2023)

A diagram that shows the activities across the decommissioning value chain including investment distribution, required contractors for each stage and Australia's strengths and growth opportunities for each phase of decommissioning.

For each phase Australia has the following:

For planning in Australia:

  • Investment distribution is moderate, and
  • Current strategic strengths are high for engineering design, research and innovation, environmental assessments and operators internal costs for all phases.

In the offshore space Australia has significant strategic weakness around required contractors with a significant need for vessel and well rig contractors. 

For offshore phases:

Preparation and well P&A:

  • Investment distribution is High
  • Current strategic strengths are high for well servicing and maintenance.

Removal:

  • Investment distribution is High
  • Current strategic strengths are high for integrated service.

Logistics to Port:

  • Investment distribution is Low
  • Current strategic strengths are high for integrated service.

In the onshore space:

Handling and dismantling at port:

  • Investment distribution is Low
  • Current strategic strengths are moderate in dismantling and management specialist.

Transport to waste service providers:

  • Investment distribution is Low
  • Current strategic strengths are high for transport.

End of life waste management:

  • Investment distribution is Minimal
  • Current strategic strengths are moderate for material recycling and material processing.

Workforce

Australia has a skilled domestic workforce with extensive experience in the oil and gas industry. Research commissioned for this roadmap demonstrates the majority of the existing workforce can re deploy and re-skill for decommissioning projects to support Australia’s energy transition (CSIRO 2024a). However, it may be difficult to attract and keep a workforce due to competition with an emerging renewables sector (KPMG 2023).

Vessels

Australia is distant from most global decommissioning markets where there are vessels and specialty equipment (KPMG 2023). Australia does not host the vessels for doing heavy decommissioning offshore and must import them. Local availability for heavy lift and specialist vessels is unlikely to be a strategic opportunity and can be best managed through importation and collaboration. However, there are opportunities for the domestic workforce to crew and support these activities (CSIRO 2024a). Our limited market for offshore decommissioning vessels at present makes it costly to bring these assets into Australian waters for uncoordinated campaigns or single decommissioning projects. 

Infrastructure

Offshore decommissioning in Australia will be an inherently regional activity, with work clustered in south-east and north-west Australia. The south-east of Australia will also host significant offshore wind generation in future. Constructing offshore renewables could overlap with decommissioning and increase competition for infrastructure and capability, including ports, which requires careful management and coordination. There is no port perfect for all decommissioning activity types, which may necessitate modifications in future to service decommissioning demand. 

Waste management and recycling

Australia has a domestic recycling industry that can play a major role in the waste management phase of offshore decommissioning. It also has a mature concrete recycling market that services the construction and demolition industries.

Australia’s recycling and waste management industries are generally well placed to manage decommissioned materials appropriately. However, there are some critical knowledge gaps that, if addressed, could improve outcomes. This includes innovation on the impact of contaminants on the environment and ecosystems, possibilities to develop new recycling pathways and technologies, and more efficient cleaning and waste management processes.

Reuse and repurposing of materials supports a circular economy, minimising carbon emissions. It can also supply materials to connected industries, for example, construction of offshore renewable energy infrastructure or use in other civil and construction projects. 

Research capabilities

Australia has innovative products and technologies that can create an opportunity for global exports to other decommissioning markets. There is potential for Australia to be a significant contributor to the global decommissioning market by creating new innovative products and services (KPMG 2023). The offshore oil and gas industry is an active adopter of digital and emerging technologies that can reduce environmental impact and drive efficiencies. Industry is driving commercially viable innovations at early stages of the value chain. However, there is an opportunity for further innovation downstream in areas such as waste management, recycling, and environmental outcomes (ATSE 2024).