New Energy market report from Business Monitor International: "Denmark Oil and Gas Report Q3 2012"

Boston, MA -- (SBWire) -- 08/21/2012 --BMI View: Denmark is hoping to avoid becoming an oil importer for another few years, despite declining near-term production. The government is confident the country will sustain its position as a net exporter of gas until the end of the decade, with some recovery in volumes likely over the medium term. Given the scale of the likely near-term fall in gas output, however, Denmark may experience a shortfall by 2013.

The main trends and developments we highlight in Denmark's oil and gas sector are:

- According to a 2011Danish Energy Agency (DEA) statement dated March 28 2012, in 2020 half of the electricity consumption will come from wind power (currently 25%), and the energy consumption will have decreased by more than 12% relative to 2006 levels. This is the basis of a new Danish Energy Agreement.
- DEA figures suggest that FY2011 gas production will have been 14% lower than in 2010, with further steep declines expected in 2012 and 2013, before volumes stabilise and begin to recover in 2014/2015. DEA projections show that Denmark is expected to be a net exporter of sales gas in the 11 years up to and including 2021, based on the expected production profile. However, by 2013, the output surplus is likely to be very modest. For gas, the development of new well technology and new discoveries may allow Denmark to maintain its position as a net exporter beyond 2030.
- BMI forecasts gas production of 5.2bn cubic metres (bcm) by 2021, compared with consumption of 3.9bcm. Modest exports are likely to come to a halt in 2022. The DEA's estimates are reliant on the successful implementation of new technologies that would significantly raise output from existing fields.
- The DEA's projections show that Denmark will continue to be a net exporter of oil until the end of 2018. The most recent five-year forecasts show declining production until 2014/15, when new fields are to be brought on-stream and the planned development of existing fields will have been completed. In the short term, oil production is forecast by BMI to decline to about 175,000b/d in 2014, before recovering in 2015/2016. By 2021, BMI is assuming 157,000b/d of oil production.
- The DEA points out that if the domestic oil producers succeed in raising the average field recovery factor by five percentage points (above an expected 23.6%) until 2035 and beyond, and if the DEA's expectations for the exploration potential are realised, Denmark will be able to maintain its position as a net exporter of oil until 2035.
- DONG Energy and Germany's Bayerngas have decided to jointly undertake the development of the Hejre field in the Danish North Sea at a cost of DKK12.1bn. DONG will spend DKK7.3bn (US$1.32bn) on the development, and make an additional investment of DKK2bn (US$360mn) to construct the Fredericia oil terminal to process oil from several fields, including Hejre. Commercial operations are expected to start in end-2015.

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