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Upstream decommissioning: where's next and who pays?

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03 July 2018

Upstream decommissioning: where's next and who pays?

Report summary

Over 400 oil and gas fields have stopped producing in the last five years and we expect US$32 billion to be spent on decommissioning in the next five. Therefore, thoughts have now turned to who is going to pay for it and the knock-on effect it will have on production, capital investment and M+A. Decisions will be heavily influenced by how the taxation system handles such costs. After assessing over 100 fiscal systems around the world, we have identified two primary approaches to the fiscal treatment of decommissioning. One insists funds are established prior to costs being incurred, while the other waits until they have been spent. The two approaches can be split out into four sub-types, each of which can have a different impact on the finances of both governments and investors. Our report takes some complex concepts and makes them easier to understand. It also covers some of the key questions being asked today.

Table of contents

Tables and charts

This report includes 6 images and tables including:

  • Chart 1: global decommex 2018-2027
  • Chart 2: largest spenders next 10 years
  • Figure 1: fiscal treatments of decommissioning
  • Figure 2: Cash flow impact of different fiscal treatments of decommex
  • Figure 3: Pros and cons of different fiscal treatments of decommex
  • Chart 3: Government share of decommex

What's included

This report contains:

  • Document

    GlobalDecommissioningCostsWhoPays.xlsx (3)

    XLSX 307.66 KB

  • Document

    Upstream decommissioning: where's next and who pays?

    ZIP 629.06 KB

  • Document

    Upstream decommissioning: where's next and who pays?

    ZIP 629.06 KB

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