Denmark is the European Union’s (EU) only net exporter of oil. The Nordic state’s oil exports totalled approximately 13.7 million barrels of oil equivalent in 2013. This is in stark contrast to the EU’s only other significant oil producer, the UK, which became a net importer in 2004 and has experienced a steep decline in output since, as its historically productive North Sea fields reach extreme maturity. Denmark has maintained its status as a net exporter despite peak oil production in 2004. A strong shift towards wind power has seen a decrease in oil used for electricity generation while district heating systems traditionally fuelled by oil are now switching to natural gas and renewable sources.
Denmark’s ability to hold on to its status as the EU’s last net exporter is likely to diminish in the long-term. Its North Sea fields continue to stutter and decline in output, seeing production half from a peak of 389 kb/d in 2004 to just 192 kb/d in 2014. In 2013, a range of technical issues meant that only 12 of 19 operational fields were producing from August to December. A lack of large discoveries has also inhibited Denmark’s upstream sector, seeing oil reserves fall from 1.3 Bnboe in 2006 to 0.8 in 2013. A lack of fresh developments has also led to a decline in drilling, just eight development wells have been drilled over the last three years. Well completions increase slightly in the medium-term with the development of the high-pressure-high-temperature Hejre field – however DW do not expect this to arrest the production decline.
Based on current trends, DW predict Denmark’s ongoing issues with North Sea developments will see it become a net importer of oil by 2021. By this time, oil production will likely have waned to around 130 kb/d – the country’s lowest daily output in 30 years.
Matt Cook, Douglas-Westwood London
+44 1795 594735 or [email protected]
