B MI View: Slovenia's upstream sector remains close to inexistent, with little to no oil or gas production within our forecast period. While there is upside risk in the gas segment attributed to the Ascent-operated Petisovci tight gas project, t he initiative faces continued regulatory and funding headwind s . O verall volumes are likely to be relatively modest in the case of project realisation , with imported Russian gas set to dominate supply for the foreseeable future.
|e/f = BMI estimate/forecast. Scource: EIA, BMI|
|Crude, NGPL & other liquids prod, 000b/d||0.3||0.3||0.3||0.3||0.3||0.3||0.3|
|Refined products production, 000b/d||0.0||0.0||0.0||0.0||0.0||0.0||0.0|
|Refined products consumption & ethanol, 000b/d||51.4||52.1||53.0||53.5||54.1||54.8||55.4|
|Dry natural gas production, bcm||0.0||0.0||0.0||0.0||0.0||0.0||0.0|
|Dry natural gas consumption, bcm||0.8||0.8||0.8||0.8||0.8||0.9||0.9|
The main trends and developments in Slovenia's oil and gas sector are:
There is evidence of commercial gas deposits close to the Hungarian border that can be exploited for power generation purposes. However, given project delays, we do not include it within our reserves or production forecast. The country's upstream reserves currently remain extremely limited.
Slovenian natural gas production will remain limited throughout our forecast period, thanks to the lack of upstream development in the country. While the long-delayed Petisovci project poses upside risk to our forecast, we maintain our more modest outlook, given continued financial and regulatory delays associated with the initiative.
In May 2016, it was reported that the country's Administrative Supreme Court withdrew the provisional IPPC permit granted by the Slovenian Environment Agency in June 2015. The Court decision will delay the company's long-term plan for the field to have gas treated and sold in Slovenia.
As of the summer of 2016, Ascent seems to be leaning towards an option of sending raw gas to Croatia. The company signed a preliminary and conditional agreement for a new route to market using an existing production pipeline from the Petisovci field in Slovenia to the Croatian border where the raw gas will be sold. As noted earlier, this route is independent of the IPPC Permit. No further regulatory approvals are required for gas production to commence using this route to market.
In line with this option, the company has entered an agreement to acquire a Company which owns access to a key section of pipeline in Slovenia in return for the issue of up to 75 million new Ascent shares plus options over a further up to 7.5 million shares at a price of 2 pence per share. The option is currently under study by the company and remains conditional to date. Should the option succeed, first gas and early production at the field could be reached in early 2017.
However, Ascent highlights that for the project to move into full field development, the new processing plant (and thereby the IPCC award) remains crucial as the other two options would only enable limited uptakes of gas. As such, while these two options are viable for early production, a new processing plant is required to produce higher volumes of gas and bring field production to its full capacity.
With no active refinery, we believe Slovenia will not produce any refined products within our forecast period. While plans for a biodiesel plant are under discussion, the poor downstream environment in Europe will likely preclude plans from materialising.
Slovenia imports all its supplies of refined products, remaining heavily dependent on Russia for its refined fuels consumption. Strengthening demand will increase the country's deficit and maintain its status as a net importer through 2025.
We maintain Slovenia will remain dependent on gas imports for all of its domestic consumption given our expectation for delays to the Petisovci-Lovaszi project. Should the project materialise, we note downside risks to Slovenia's gas import requirements.
The Slovenia Oil & Gas Report has been researched at source and features BMI Research's independent forecasts for Slovenia 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.
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