BMI View: Development delays at the Hejre field and the accompanying forecast change will see Denmark become a crude net importer throughout the forecast period. While its status as a gas net exporter is maintained at the moment, we highlight strong downside risk to gas production and exports after Maersk Oil expressed the possibility of closing the Tyra Ea st and Tyra West fields by 2018.
|e/f = BMI estimate/forecast. Source: National sources, BMI|
|Crude, NGPL & other liquids prod, 000b/d||168.0||157.3||146.6||139.5||141.8||147.6||150.2|
|Refined products production, 000b/d||180.0||187.6||178.2||175.5||173.8||172.0||170.3|
|Refined products consumption & ethanol, 000b/d||166.0||160.8||158.4||157.6||157.0||156.4||156.0|
|Dry natural gas production, bcm||4.7||4.7||4.8||4.7||4.7||4.8||4.8|
|Dry natural gas consumption, bcm||3.2||3.1||3.1||3.0||3.0||3.0||2.9|
Latest Updates And Key Forecasts
We have recently downgraded Denmark's oil production forecast from 2017 onwards on the back of new delays to the Hejre field development. While we temporarily have the field starting up in 2018 as opposed to our previous forecast of 2017, we highlight increasingly downside risk to the project materialising given no new development option has been identified at the time of writing and given DONG Energy is considering the sale of its oil and gas activity altogether.
As of late 2016, we note further downside risk to the Hejre project will suffer further setbacks or be entirely cancelled. Indeed, in October 2016, DONG Energy highlighted it is in the process of assessing its upstream oil and gas business, with regard to a potential sale, underlining its declining appetite to expand oil and gas activities in light of its more profitable offshore wind business. Should the sale of its upstream oil and gas business go through, it is very unclear what the future of the Hejre project will become.
Last quarter, we changed Denmark's status from a net crude oil exporter to importer throughout the entire forecast period. This is due to our forecast for high refining utilisation rates over the coming years, combined with our downgrade in oil production forecast on the back of the Hejre field development delays.
We expect the country will become a net exporter of refined fuels throughout the forecast period. This represents a change from recent quarters for net imports.
Shell announced in September 2016 that it reached an agreement with Dansk Olieselskab for the sale of Dansk Shell , which consists of the Fredericia refinery and local trading and supply activities.As for oil, we have pushed back the date for a ramp-up in gas production from the Hejre field on the back of announced delays on the project, and note increasing downside risk to the project materialising at all. We also note strong downside risk from other fields, such as the Tyra fields. Indeed, in April 2016 Maersk Oil issued a notification that production from Tyra East and Tyra West will cease in October 2018, if an economically viable solution for continued operations is not identified during 2016. Given that these are the country's largest gas field and that the facilities are the processing and export centre for all gas produced by the Danish Underground Consortium, this is a worrying signal for the country's long-term gas production outlook.
Denmark is an increasingly small net gas exporter to Sweden, Germany and the Netherlands. While the country should remain a net gas exporter over the forecast period, Denmark increasingly relies on gas imports to meet peak winter demand.
The Denmark Oil & Gas Report has been researched at source and features BMI Research's independent forecasts for Denmark including major indicators for oil, gas and LNG, covering all major indicators including reserves, production, consumption, refining capacity, prices, export volumes and values. The report includes full analysis of industry trends and prospects, national and multinational companies and changes in the regulatory environment.
BMI's Denmark Oil & Gas Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and competitive intelligence on the Danish oil and gas industry.
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