New analysis from global energy consultancy Xodus indicates that the long-term cost of removing Australia’s offshore oil and gas infrastructure may be significantly lower than previously expected.
The study — Australian Offshore Oil & Gas Decommissioning Liability Estimate 2025, commissioned by the Australian Government — estimates that full removal of facilities in Commonwealth waters will cost A$43.6 billion (A$66.8 billion in inflation-adjusted terms) through 2070. That compares with a 2020 estimate of A$61.8 billion.
According to Xodus, the reduction reflects improved forecasting assumptions and a more mature national understanding of well decommissioning, pipeline removal, and vessel mobilization requirements. The revised estimate covers more than 700 wells, 7,600 km of pipelines, and 520 subsea structures.
Andrew Taylor, Head of Advisory APAC at Xodus, said the updated analysis provides a stronger basis for government and operators planning retirement strategies. “Accurate cost forecasting is critical as Australia develops a safer and more sustainable decommissioning sector,” he said.
The report also identifies opportunities for further cost reductions through coordinated campaigns, technology improvements, and leveraging future offshore wind construction. Xodus notes that ports, vessels, and recycling infrastructure will require significant investment to support decommissioning activity through 2070.
