This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 2/2/2019

Overview

  • Denmark’s net energy has become self-sufficient since 1997.  Denmark’s self-sufficiency of energy, however, ended in 2013 when the Danish degree of self-sufficiency decreased from a level of 103 percent in 2012 to a level of 93 percent in 2013. The fall was caused by a drop in the production of both crude oil and natural gas.  As of 2016, Denmark’s degree of self-sufficiency has decreased further to 83% according to the Danish Energy Authority (DEA).
  • The DEA’s most recent forecast shows that Denmark can maintain its self-sufficiency in oil and natural gas for another ten years or so, based on known reserves.  However, on the basis of experience, the DEA expects that the use of innovative recovery technology and more discoveries resulting from exploration can uphold Denmark’s self-sufficiency in oil and natural gas for an additional ten years.
  • Oil production has been declining over the past few years and current production is around 140,000 barrels of oil per day.  The production is expected to continue to decline over the next few years.  In total, oil production accounts for roughly DKK 34 billion (USD 5 billion) per year and gas production for about DKK 7 billion (USD 1 billion) per year.  After a long period of falling oil prices, the prices have now started to rise as a result of a global growth.  This has caused an increase in the demand for oil, yet there still is a decrease in the production of oil.
  • Danish oil and gas production is declining as production from most fields has peaked so special efforts are required to prevent a major drop in production.  The energy consumption associated with oil and gas production has remained fairly constant in recent years, accounting for about 4% of Denmark’s total gross energy consumption even though production has declined steadily since 2004. Denmark has a manifest interest in the oil companies recovering as much of the oil- and gas-in-place from the North Sea as possible.  This is an important source of financing for the Danish state, but production requires increasingly high energy-intensive recovery methods. As the output of Danish reserves falters, oil extraction in the formerly-hidden Northern regions of Greenland has expanded into a promising sector of the oil and natural gas market. 
    • The production of oil and natural gas from the North Sea is key for Danish society and it secures substantial income for the state.  The production of oil and gas also positively impacts the Danish balance of payments. In early 2017, the Danish government unveiled an agreement aimed at continuing oil production in the North Sea. Per the agreement, there will be a two-figure billion kroner investment in oil and gas extraction and the rebuilding of the Tyra field. This allows for the possibility to generate DKK 26 billion (US 3.9 billion) by 2042.

    Best Prospects

    •  After almost 50 years of exploration in the Danish sector of the North Sea, new discoveries are still being made.  Two exploration wells were drilled in 2010 and both resulted in new oil discoveries – Solsort and Sara.  To date, Danish oil and gas production has been carried out exclusively from offshore installations in the North Sea.  Production is currently derived from 19 fields, of which 15 used to be operated by Mærsk Olie og Gas A/S, three by DONG E&P A/S and one by Hess Denmark ApS. In August 2017 the Mærsk Group sold Mærsk Olie og Gas A/S to the French oil company Total, while Mærsk continue to operate the facilities. Likewise, DONG Energy has changed name to Ørstad and with an aim of a more green energy production in the future the firm has sold their stocks in DONG E&P A/S in May 2017 to the Swiss chemical firm Ineos. Thereby, the production is today mainly owned by foreign investors. These are expected to make further investments in the fields. According to the oil companies’ budgets, more than DKK 1 billion will be invested in on- and offshore oil and gas exploration in the Danish sector in the coming years.

    Opportunities

    • Onshore, there are plans for the drilling of two wells.  It is five years since the last onshore well for oil and gas was drilled in Denmark.  In the North Sea, the drilling of four to six wells is anticipated.  Some of the planned wells will test new exploration models.
    • Oil and gas production activities in the North Sea result in CO2 emissions corresponding to 3.5-4% of Denmark’s total emissions.  Over the past decade, CO2 emissions have increased, however the trend has now been reversed and CO2 emissions from Danish oil production are decreasing.
    • The majority of Danish fields have been in production for many years, and in such mature fields improving recovery becomes increasingly energy-intensive.  Water and gas injection is required to maintain pressure, and together with the oil an increasing amount of water is produced that must be treated before being discharged into the sea or re-injected.  Therefore, it is necessary to investigate how the energy efficiency of production can be improved.
    • The Danish Energy Authority’s (DEA) approval of new development plans is conditional upon the operators’ choosing the Best Available Techniques (BAT), when this is financially reasonable.  This means that in each individual case the operators must investigate the potential for using more energy-efficient alternatives.

    Web Resources

     

     
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    More Information

    Denmark Oil and Gas Trade Development and Promotion