New research from global energy consultancy Xodus shows 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 study, “Australian Offshore Oil & Gas Decommissioning Liability Estimate 2025,” was commissioned by the Australian Government’s Department of Industry, Science, and Resources and finds that, by 2070, full removal of infrastructure in Australian waters is expected to cost AUD 43.6 billion, (AUD 66.8 billion when adjusted for inflation), compared with a previous 2020 estimate of AUD 61.8 billion.
The reduction reflects improved assumptions and greater accuracy in forecasting, particularly around well plugging, pipeline removal, and vessel mobilization. The estimate covers more than 700 wells, 7,600 km 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, Asia Pacific, 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.”
Future cost savings likely will come from better coordination, improved technologies, and the development of local infrastructure, according to the report. The report also explores the cost-saving potential of aligning decommissioning campaigns with offshore wind construction.
The method assumes full removal as the default scenario and draws on Association for the Advancement of Cost Engineering Class 5 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 said it expects significant investment in vessels, ports, and recycling infrastructure will be needed to meet demand through to 2070.