Technology and efficiency improvements are helping to bring down the price of removing Australia’s offshore oil and gas infrastructure.
According to the Australian Offshore Oil & Gas Decommissioning Liability Estimate 2025 report, prepared by Xodus for the country’s Department of Industry, Science and Resources, full removal of all infrastructure by 2070 could cost AUD$43.6 billion at current prices (US$28.13 billion).
That compares with a previous estimate in 2020 of AUD$61 billion (US$39.35 billion).
The reduction reflects more accurate forecasts of the scope of well plugging, pipeline removal and vessel mobilization. Xodus’ estimate covers more than 700 wells, 7,600 km of offshore pipelines and 520 subsea structures.
“This research gives both industry and government the tools to plan, budget and execute decommissioning more efficiently. The revised estimate not only reflects a maturing approach but provides a baseline for smarter, more collaborative strategies going forward.”
—Andrew Taylor, Head of Advisory APAC, Xodus
Factors that could drive future cost reductions include improved coordination of activities, technology advances and the development of local infrastructure. The report also examined the potential for further savings through aligning decommissioning campaigns with offshore wind project construction.
Cost estimates took into account input provided by decommissioning managers employed by Australia’s major operators.
However, large-scale investments will be needed in vessels, ports and recycling facilities to satisfy demand through to 2070, Xodus predicted.
