BMI View: We expect a partial , but temporary recovery in oil and gas volumes over the medium term , as small developments come online . Past 2019 however, production will resume to the downside. While the country should remain a net oil and gas exporter throughout most of our forecast period , exports will become increasingly thin.
|e/f = BMI estimate/forecast. Source: EIA, BMI|
|Crude, NGPL & other liquids prod, 000b/d||178.3||168.0||159.4||151.7||154.7||160.1||162.1|
|Dry natural gas production, bcm||4.9||4.7||4.6||4.7||4.9||5.0||4.8|
|Dry natural gas consumption, bcm||3.5||3.5||3.4||3.4||3.3||3.3||3.3|
|Refined products production & ethanol, 000b/d||154.7||149.4||153.9||146.2||144.0||142.6||141.2|
|Refined products consumption & ethanol, 000b/d||166.1||166.3||162.2||159.8||159.1||158.5||158.0|
The main trends and developments in Denmark's oil and gas sector are:
Oil and gas reserves are depleting for this small mature North Sea producer and we do not expect the country to significantly reverse this trend. Ongoing exploration, the recent licensing round and the potential for shale gas could yield upside risk to our forecast by the end of our forecast period. However, the strong decline in oil prices and our expectation of a lower price environment over the coming years temper this upside risk.
Oil and gas production should increase slightly between 2017-2019 and 2016-2018 respectively, as several small developments will help production recover. However, delays on the Hejre field has seen BMI push back the date for production ramp-up. Overall, Denmark's hydrocarbon production trend clearly remains one of decline, with strong depletion rates at maturing fields.
With a continuous fall in energy intensity, increased fuel efficiency and a progressive increase in renewable energy consumption, we expect domestic oil and gas consumption will decrease throughout our forecast period.
We expect refined fuels production to progressively decline, on the back of weakening domestic fuel consumption and the overall difficult economic situation of the European downstream sector. While no refinery closures have been announced, Statoil's refinery in Kalundborg is undergoing major cost-cutting and Shell is seeking buyers for its Fredericia refinery.
While Denmark should remain a net oil and gas exporter throughout most of our forecast period, net exports will become increasingly thin. Should domestic production surprise slightly to the downside, the country could notably become a net crude oil importer throughout most of our forecast period. While Denmark's status as a net gas exporter throughout our forecast period is safer than for oil, the country increasingly relies on gas imports to meet peak winter demand.