Abstract
Public oil and gas companies are required to report the present value of their decommissioning liability, referred to as asset retirement obligations and provisions, for all their upstream oil and gas assets worldwide where there is a legal obligation to perform. Using publicly reported accounting data on asset retirement obligations and provisions from a sample of integrated and independent oil and gas companies, we estimate the present value of worldwide oil and gas decommissioning liability between $311 and $362 billion circa 2021, about evenly split between onshore and offshore requirements. Two unit cost metrics normalize asset retirement obligations by production and well count and are used to compare retirement commitments by company group and geographic specialization. Normalized asset retirement production cost is extrapolated to obtain a global estimate of decommissioning exposure.
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