Declining oil and gas production meant lower revenue from North Sea activities. Sustained high level of investments in the North Sea.
In 2013 the Danish state generated revenue of about DKK 22.1 billion from oil and gas production, equal to about 63 per cent of total profits from activities in the North Sea. This is a decline of about 12 per cent from 2012, when state revenue totalled DKK 25.2 billion. These figures appear from the DEA’s annual report “Denmark’s Oil and Gas Production and Subsoil Use 2013”, which has just been published.
The fall in state revenue is partly attributable to the fact that production is declining as the Danish fields age. Thus, oil production decreased to 10.2 million m3 last year, a 13 per cent drop on 2012, while sales gas production fell by about 18 per cent to 4.0 billion Nm3 in 2013. Oil production has fallen to slightly less than half of the peak production in 2004.
Amounting to about USD 109 per barrel in 2013, the average oil price remained at the 2012 level. However, in terms of DKK, the oil price declined by slightly more than 5 per cent due to the lower dollar exchange rate.
Sustained high activity level
The activity level remains high in the Danish part of the North Sea. In 2013 the oil companies invested about DKK 7 billion in the development of oil and gas fields, an increase of about 21 per cent on 2012. The DEA expects investments in North Sea fields to total DKK 49 billion over the next five years.
Denmark to remain a net exporter of oil through 2021
On the basis of the forecasts presented in the report, Denmark is expected to remain a net exporter of oil through 2021, while gas production is estimated to exceed domestic gas consumption through 2025.
7th Licensing Round initiated
The DEA has opened the 7th Licensing Round for new licences for oil and gas exploration and production in the western part of the North Sea. The deadline for licensing round applications is 20 October 2014. New licences are expected to be issued in early 2015, and seismic surveys and exploration drilling under the new licences are anticipated to help maintain the activity level in the North Sea in the years ahead.
New resource assessment
According to the assessment in the report, Danish oil and gas reserves amounted to 107 million m3 of oil and 37 billion Nm3 of sales gas at 1 January 2014. Compared to the previous assessment at 1 January 2012, reserves have been revised downwards by about 16 per cent as a result of the oil and gas produced over the past two years.
The report “Denmark’s Oil and Gas Production and Subsoil is available in a Danish and an English pdf-version.
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