New research from global energy consultancy Xodus has revealed that the estimated cost of fully removing Australia’s offshore oil and gas infrastructure is benefiting from rising efficiency and understanding in the country’s decommissioning sector.
The Australian Offshore Oil and Gas Decommissioning Liability Estimate 2025, which was commissioned by the Australian Government’s Department of Industry, Science and Resources, found that by 2070, full removal of infrastructure in Australian Commonwealth waters is expected to cost AU$43.6 billion (US$28.3 billion) (AU$66.8 billion (US$43.3 billion) when adjusted for inflation), compared with a previous 2020 estimate of AU$61.8 billion (US$40.1 billion).
Xodus said the reduction reflects improved assumptions and greater accuracy in forecasting, particularly around well plugging, pipeline removal and vessel mobilisation.
The estimate covers more than 700 wells, 7,600 kilometres of pipelines, and 520 subsea structures.
"Accurate cost forecasting is critical as Australia develops a safer and more sustainable decommissioning sector," said Andrew Taylor, Head of Advisory APAC at Xodus. "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."
Xodus said future cost savings will likely come from better coordination, improved technologies and the development of local infrastructure.
The report also explored the cost-saving potential of aligning decommissioning campaigns with offshore wind construction activity.
The methodology assumes full removal as the default scenario and draws on class V AACE estimates to account for uncertainty. Costs were calibrated regionally and reflect input from decommissioning managers across Australia’s major operators.
Based on current projections, Xodus expects significant investment in vessels, ports and recycling infrastructure will be needed to meet demand through to 2070.