Australia’s estimated offshore oil and gas decommissioning cost has been revised down to $28.3 billion (A$43.6 billion) by 2070, supported by rising sector efficiency and improved forecasting methods, according to new research from global energy consultancy Xodus.
The Australian Offshore Oil & Gas Decommissioning Liability Estimate 2025, commissioned by the Department of Industry, Science and Resources, forecasts a total cost of $43.4 billion (A$66.8 billion) when adjusted for inflation.
The new estimate compares with $40.17 billion (A$61.8 billion) in 2020 and reflects refined assumptions around well plugging, pipeline removal and vessel mobilization.
The liability covers more than 700 wells, 7,600 kilometers of pipelines and 520 subsea structures in Commonwealth waters.
“Accurate cost forecasting is critical as Australia develops a safer and more sustainable decommissioning sector. 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,” said Andrew Taylor, Head of Advisory APAC at Xodus.
The report highlights opportunities for future savings through better coordination, new technologies and the development of local infrastructure. It also identifies potential benefits from aligning decommissioning campaigns with offshore wind construction activity.
Its methodology assumes full removal as the default scenario and uses Class 5 AACE estimates to account for uncertainty. Regional calibration was based on input from decommissioning managers across major Australian operators.
Xodus said significant investment in vessels, ports and recycling capacity will be needed to support demand through 2070, representing a key opportunity for private-sector innovation and public-sector planning.
With more than 18 years of global decommissioning experience and over 70 projects delivered, Xodus continues to advise governments and operators on sustainable asset retirement strategies across oil and gas, CCUS, offshore wind and hydrogen.