B MI View: There are glimmers of hope in the upstream oil and gas segment, with the Ascent-operated Petisovci tight gas scheme capable of improving near-term energy self-sufficiency and slowing the rate of growth in gas imports. The project is in the detailed permitting phase, facing unexpected slowdowns due to the lack of an established Slovenian regulatory infrastructure and new EU tendering obligations the country adopted in 2013. Permitting required for phase is progressing with public consultation starting in the first half of 2015. Recently t he Slovenian Government has decided to adopt a more supportive view of the project than in previous years in recognition of its strategic importance to the country. However, overall volumes are likely to be relatively modest, with imported Russian gas set to dominate supply for the foreseeable future. Slovenia is opposed to proposals for an Adriatic LNG terminal that is backed by Italy. This puts the country at odds with EU energy policy in the region.
|e/f = BMI estimate/forecast. Scource: BMI/EIA|
|Crude, NGPL & other liquids prod, 000b/d||0.3||0.3||0.3||0.3||0.3||0.3||0.3|
|Dry natural gas production, bcm||0.0||0.1||0.4||0.5||0.5||0.5||0.5|
|Dry natural gas consumption, bcm||0.9||0.9||0.9||1.0||1.0||1.1||1.1|
|Refined products production & ethanol, 000b/d||0.0||0.0||0.0||0.0||0.0||0.0||0.0|
|Refined products consumption & ethanol, 000b/d||49.4||48.9||49.2||49.5||50.0||50.4||51.0|
The main trends and developments in Slovenia's oil and gas sector are:
Independent explorer Ascent Resources has recorded promising results from fracture stimulation at its Petisovci tight gas project in Slovenia. Operations at the Pg-11A well indicate the potential for high gas productivity. By the end of 2013 they had displaced investments in Hungary, Netherlands and Italy to focus exclusively on the Slovenian project.
First production from Petisovci was initially expected by end-2014. The company has been particularly upbeat about the prospects of the project, with estimates of gas-in-place of as much as 14.3bn cubic metres (bcm). However it has noted that due to the lack of pre-existing Slovenian regulatory infrastructure, many of the permit requests are being processed more slowly than initially forecasted. Additional slowdowns are ascribed to new EU tendering obligations the country adopted in 2013.
More recently the decision by the state-owned electricity company to construct a new high voltage power line in the vicinity of the existing gas processing plant has resulted in additional months of delays.
Public consultation for the Petisovci project's Integrated Pollution Prevention and Control has started, following a December 2014 announcement by Ascent Resources.
Gas demand, which fell by 12% in 2012, made a partial recovery in 2013 and 2014, growing 5% each year, and is expected to reach 1.1bcm by 2018, increasing to 1.4bcm by 2024.
Domestic production for 2019-2024 is forecast to come in at around 0.45bcm/y based on the Petisovci project, meaning that there will be a greatly reduced import requirement. Further success in proving up reserves and production potential could mean upside risk in terms of domestic gas supply.
Oil consumption is expected to track the underlying GDP trend, with demand keeping pace with economic growth. With four years of consecutive negative growth since 2010, oil consumption has gone through a slight contraction.
A lack of supply infrastructure means a more dramatic rise in oil use is unlikely until much later in our 10-year forecast period. The country consumed around 9% less oil in 2013. 2014 consumption is estimated to have dropped another 1%, with an economy still stagnating, to 48,100b/d. Consumption will pick up timidly from 2015, reaching 48,400b/d before rising to an estimated 51,200b/d by 2024, met entirely by imports.