Thousands of offshore platforms are approaching or have reached end of productive life. Decommissioning decisions are capital-intensive and politically visible, with multiple options on the table: full removal, partial removal, or conversion to artificial reefs under rigs-to-reefs programs. Each pathway has different implications for CAPEX, liability, marine ecosystems and emissions. At Energy Solutions, we compare these options across cost benchmarks and environmental trade-offs to inform operators, regulators and investors.
Offshore decommissioning is governed by safety, environmental and navigational rules that usually require removing structures at or below the seabed, unless specific exemptions are granted. Options include:
Decommissioning cost drivers include water depth, structural weight, lifting vessel rates, distance to shore, and regulatory requirements. Rigs-to-reefs programs can lower costs by reducing heavy lifting and disposal volumes.
| Configuration | Water Depth | Full Removal CAPEX | Rigs-to-Reefs CAPEX |
|---|---|---|---|
| Small Shallow-Water Platform | <50 m | 30–50 million USD | 20–35 million USD |
| Medium Jacket Platform | 50–150 m | 50–90 million USD | 35–65 million USD |
| Large Complex Platform | 150–250 m | 80–150 million USD | 60–110 million USD |
These values are stylised and assume typical 2027 vessel rates and disposal costs. Fields with subsea tie-backs, contaminated sediments or complex well plugging and abandonment (P&A) requirements may be substantially more expensive.
The bar chart below shows a stylised cost split across major components (P&A, topsides, substructure, disposal) for both options.
From an environmental standpoint, full removal and rigs-to-reefs present a complex set of trade-offs:
| Dimension | Full Removal | Rigs-to-Reefs | Notes |
|---|---|---|---|
| Decommissioning GHG Emissions | Higher (more vessel days) | Lower | Excludes long-term effects |
| Steel Recycling Potential | High | Low | Steel left offshore not easily recovered |
| Marine Habitat Preservation | Low | High | Depends on local ecology and design |
| Seabed Restoration | High | Partial | Some footprint remains for reefs |
The chart below shows a stylised GHG emissions index (Full Removal = 100) for different options.
The Gulf of Mexico hosts one of the most established rigs-to-reefs programs globally, with hundreds of platforms partially converted to artificial reefs.
This case demonstrates how clear policy frameworks and stakeholder alignment can mainstream rigs-to-reefs as a decommissioning option.
In parts of the North Sea, regulatory regimes historically favoured or required full removal of large platforms, especially in sensitive or heavily trafficked areas.
This case highlights the tension between strict removal rules and potential cost and environmental benefits of alternative pathways.
Decommissioning decisions are inseparable from questions of long-term liability:
Some regimes require financial security (e.g. bonds) to ensure decommissioning obligations are met even if operators change or become insolvent.
The chart below shows a stylised allocation of costs and risks among operators, states and communities.
Given diverse platform types, water depths and regulatory regimes, most companies benefit from a portfolio approach to decommissioning:
While rigs-to-reefs can create or preserve marine habitats, critics raise valid concerns:
Transparent communication, rigorous environmental assessments and clear long-term management plans are essential to address these concerns.
By 2035, many offshore basins will be in the midst of a decommissioning wave. Key trends include:
For upstream portfolio managers, a robust strategy typically includes:
Not always, but often. In many shallow- to mid-water cases, rigs-to-reefs can cut direct decommissioning CAPEX by 20–50%. However, regulatory requirements, reef preparation and long-term monitoring can offset some savings, and not all structures qualify.
Liability arrangements vary by jurisdiction. Some programs involve state acceptance of certain long-term responsibilities, while others maintain shared or conditional liabilities for operators. Contractual clarity is essential before selecting rigs-to-reefs options.
Insurers focus on residual risk: navigation hazards, structural stability, and potential environmental liabilities. Well-designed, well-monitored reefed structures in clear regulatory frameworks are generally more insurable than ad hoc arrangements, but risk appetites differ.
Global conventions (such as those addressing dumping at sea) and regional agreements influence what is allowed. Many details, however, are defined at national or state level. Operators must navigate both international and domestic requirements.
Decommissioning strategies should consider potential future uses of marine space, such as offshore wind, aquaculture or marine protected areas. Full removal may be preferred in zones earmarked for other infrastructure, while rigs-to-reefs may complement conservation or fisheries goals elsewhere.
Yes. Decommissioning can support local employment in ports, yards and service companies. Rigs-to-reefs programmes can also enhance fisheries and tourism in some regions. Careful planning is needed to ensure benefits are distributed fairly and transparently.
Decommissioning-phase emissions are typically a small fraction (often <2–5%) of lifetime field emissions, but they are material in absolute terms and increasingly scrutinised. Choosing options that balance cost, safety and emissions can contribute to overall portfolio decarbonization.
Serious planning should begin at least 5–10 years before anticipated cessation of production, to allow for engineering studies, regulatory engagement, supply chain contracting and stakeholder consultation.