Benchmarking Decommissioning Costs in Oil and Gas
Decommissioning cost estimation is one of the most data-scarce disciplines in the industry. We examine the key metrics, data sources and methodology gaps estimators must navigate.
The Decommissioning Cost Challenge
Oil and gas decommissioning represents a growing liability for operators worldwide. The UK North Sea alone is estimated to require USD 25-30 billion in decommissioning expenditure over the next decade. Global offshore decommissioning liabilities exceed USD 100 billion.
Despite the scale of these liabilities, decommissioning cost estimation remains one of the most data-scarce disciplines in project cost engineering. The executed project database is thin and what data exists is rarely normalised or publicly accessible.
Key Benchmarking Metrics
- Well P and A cost per well — North Sea benchmarks range from USD 1M to USD 30M plus per well depending on depth, type and jurisdiction.
- Topsides removal cost per tonne — Allows early-phase estimates before detailed engineering is complete.
- Pipeline decommissioning cost per km — Varies by diameter, location, cleaning requirements and jurisdiction.
- Site restoration cost per hectare — Depends on soil contamination extent and regulatory requirements.
Kpex Module E
CAF Corporation Kpex platform (Module E) aggregates available decommissioning data from executed projects, supplemented by proprietary engineering-based cost models that provide defensible estimates where direct benchmarks are unavailable.
Structured Cost Estimation for a Complex Scope
Decommissioning cost estimation requires specialized data, methodologies and regulatory expertise. Our approach integrates all three.
