07 May 2021
When we first wrote about offshore recycling in 2021, we described it as the “terra incognita” of ship recycling.
The recycling of conventional bulk carriers, tankers and container vessels was already familiar to most shipping professionals. Offshore assets were different.
Jack-up rigs, semi-submersibles, drillships, FPSOs, FSOs and offshore support vessels sit more naturally within the oil and gas and energy sectors than within conventional commercial shipping. Their operating economics, residual values and the practical challenges of getting them to a recycling destination can also be very different.
Five years later, the offshore recycling market is better understood. The Hong Kong Convention is now in force and GMS has continued to build operational experience with offshore units and complex long-distance deliveries.
However, many of the factors that made offshore recycling different in 2021 remain relevant today.
One of the original challenges was the economics.
Historically, owners of offshore assets did not depend on the recycling market in the same way as owners of conventional vessels.
The difference between the original cost of an offshore unit and its eventual recycling value can be significant. At the same time, when offshore markets are strong, drilling and production units can generate substantial earnings.
This influenced how owners looked at the end of an asset's life.
If a unit could be laid up at a reasonable cost, properly maintained and potentially returned to employment, recycling was not necessarily the immediate option.
That commercial reasoning has always been important in offshore recycling.
The decision is not based only on what the unit is worth for recycling. The owner also has to consider whether the asset still has an economic future and whether keeping it available for possible employment remains worthwhile.
The logistics of moving offshore assets were another major point in the original article.
That has not changed.
Offshore units can be located in oilfields, lay-up locations, anchorages or other areas far away from the main recycling destinations.
Their physical characteristics can also make transportation considerably more complicated than moving a conventional ship-shaped vessel.
For jack-up rigs, leg protrusion can be an important consideration.
For semi-submersibles, thrusters, increased beam, draft and stability can affect how the unit is moved.
Weather also has to be considered. The original article referred to hurricane seasons, winter conditions around the Cape of Good Hope and monsoon periods in the Indian subcontinent as examples of the restrictions that can affect transportation.
The choice between wet and dry tow is another part of the calculation.
All of this has a commercial consequence because the cost of moving an offshore asset to its recycling destination can be substantial compared with the residual value of the unit.
Recent GMS operational experience continues to reinforce the importance of preparation.
In a 2026 GMS discussion on offshore recycling, Capt. Yogesh Rehani explained how FPSOs, FSOs, semi-submersibles and jack-up rigs require a specialist operational approach because of their structural configuration, topside equipment and operational residues.
Preparation for towage can involve structural checks, stability planning, emergency measures and protection of critical components during heavy weather.
GMS has also dealt with long-distance offshore movements where close coordination and monitoring were required throughout the voyage.
One example discussed by Capt. Yogesh involved a semi-submersible tow from Brazil, requiring constant coordination, daily monitoring and close engagement with Marine Warranty Surveyors.
Another involved the successful delivery and beaching of a jack-up rig in Chittagong.
These examples reinforce a point that was already central to the original article: transporting an offshore unit for recycling is not comparable to the normal towing of a conventional ship-shaped vessel.
Another important characteristic of offshore units is the equipment that remains onboard when the asset is sold.
Two conventional vessels of similar size and specification may have relatively comparable recycling values.
With offshore assets, two apparently similar rigs can be quite different.
Drilling units can carry equipment such as riser pipes, blowout preventers, cementing units, mud pumps, raw-water towers and thrusters.
If this equipment remains onboard and forms part of the recycling sale, it can significantly affect the value of the asset.
However, rig owners may decide to remove valuable equipment for use elsewhere.
Some equipment may also belong to third parties and therefore not form part of the sale.
This is why the equipment included with the unit needs to be understood when its recycling value is being considered.
A rig sold with substantial equipment onboard is not necessarily comparable with a similar unit that has been stripped back to its basic structure.
That distinction remains just as relevant today as it was when the original article was written.
One area that has changed substantially since 2021 is the Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships.
When the original article was published, recycling facilities were preparing for the Convention and many facilities in the Indian subcontinent were working towards compliance with its requirements.
The Convention entered into force on 26 June 2025.
Its definition of a ship is broad.
It includes vessels of any type operating or having operated in the marine environment, including submersibles, floating craft, floating platforms, self-elevating platforms, Floating Storage Units and Floating Production Storage and Offloading Units. It also includes vessels that have been stripped of equipment or are being towed.
For offshore units within the scope of the Convention, HKC is therefore directly relevant to the recycling process.
From 26 June 2025, ships going for recycling under the Convention are required to have an International Ready for Recycling Certificate, while ship recycling facilities within its scope require a Document of Authorization to conduct Ship Recycling.
The Convention has therefore changed the regulatory baseline from the position described in the original 2021 article.
A common international framework does not make every offshore recycling project the same.
Capt. Yogesh's recent discussion highlighted some of the characteristics that separate offshore units from conventional tonnage, including structural configuration, topside equipment and operational residues.
These factors have to be understood when preparing the asset for its final movement and recycling.
The operational approach also depends on the type of unit involved.
An FPSO or FSO does not present exactly the same situation as a semi-submersible or jack-up rig.
The physical configuration and the condition of the individual asset therefore remain important parts of the planning process.
This is also why experience with offshore assets matters.
The operational side does not end with completing the tow.
Safety, compliance and environmental responsibility remain important throughout the process.
In GMS's recent offshore recycling discussion, Capt. Yogesh described how operations are aligned with MARPOL and IMO expectations, with responsible handling properly budgeted for and transfers and disposal documented.
He also emphasized transparency with classification societies, underwriters and towage specialists.
For owners making an end-of-life decision, his message was straightforward: the selection of a partner should consider proven delivery capability, rather than price alone.
That is particularly relevant in offshore recycling because transportation and execution can be substantial parts of the overall project.
None of this changes the commercial nature of the recycling decision.
Residual value remains important to the owner.
The equipment included in the sale matters.
The location of the unit matters.
And the cost of moving it to a recycling destination matters.
These were important considerations in the original article and remain so today.
For offshore assets, the recycling price cannot always be viewed separately from the practical work required to complete the transaction.
A unit located far from the recycling destination or requiring a more complicated transportation arrangement presents a different commercial proposition from one that can be moved more easily.
This is one of the reasons offshore recycling has always required both commercial and operational understanding.
In 2021, the original article concluded that the tide was turning for offshore recycling.
At that time, more offshore units were entering the recycling market, recycling facilities were developing their capabilities and the industry was moving towards implementation of the Hong Kong Convention.
The hope was that offshore recycling would eventually become less of a “terra incognita” and more of a “Terra Nova.”
Five years later, there has clearly been progress.
The Hong Kong Convention is now in force.
The industry has more practical experience with offshore units.
GMS's own operational teams have continued to work with complex offshore movements, including long-distance towage and the delivery of different types of offshore assets.
But the features that make offshore recycling different have not disappeared.
The unit may still be a long distance from the recycling destination.
Its dimensions and configuration can still make transportation difficult.
Weather can still affect the movement.
Equipment onboard can still materially influence its value.
And the overall economics still need to consider the cost and practical requirements of delivering the unit for recycling.
Offshore recycling may no longer be the unknown territory it appeared to be in 2021.
The experience built since then has made the route clearer.
The asset itself, however, still determines how that route has to be travelled.
Originally published: 07 May 2021
Last reviewed and updated: 30 September 2026
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Faidon is holding MSc and BSc in the field of Naval Architecture and Marine Engineering from the National Technical University of Athens, Greece, from which he graduated summa cum laude. He is also holding an MSc in Shipping, Trade & Finance from the prestigious CASS Business School, City University of London, UK. In 2016 he started his career as a Sales & Purchases Shipbroker in Intermodal Shipbrokers, Athens, Greece. Since January 2017, he has joined the GMS DMCC team in Dubai, UAE, where he is a trader in the Sales & Purchases Division, specializing in recycling projects, offshore assets acquisitions, and marine spread operations. He is based out of Dubai, and he has conducted the first decommissioning project undertaken by Cash Buyers for recycling.
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