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Denmark Oil and Gas Report Q4 2011
Business Monitor International, Sep 2011, Pages: 60
The latest Denmark Oil & Gas Report from BMI forecasts that the country will account for 1.34% of regional oil consumption by 2015, while accounting for 5.33% of supply. In Developed Europe, overall regional oil demand will be an estimated 12.71mn barrels per day (b/d) in 2011 and is set to reach 13.17mn b/d by 2015. Developed Europe regional oil production will have been an estimated 3.83mn b/d in 2011, falling potentially to just 3.34mn b/d in 2015. Regional net imports are set to rise from an estimated 8.88mn b/d in 2011 to 9.83mn b/d by the end of the forecast period. Norway will remain the only major net exporter, with the UK a growing net importer.
In terms of natural gas, the Developed Europe region will have consumed an estimated 457bn cubic metres (bcm) in 2011, with demand of 498bcm targeted for 2015, representing 9.0% growth. Production of an estimated 238cm in 2011 is set to rise to 248bcm in 2015, which implies net imports rising from the estimated 2011 level of 219bcm to some 250bcm by the end of the period. The Danish share of gas consumption in 2011 will have been an estimated 0.97%, while it will have accounted for 2.90% of production. By 2015, its share of gas consumption is forecast to be 0.93%, while its share of production will stand at 2.86%.
Global GDP growth in 2011 is forecast at 3.6%, down from 4.3% in 2010. Growth in both the US and Eurozone should be marginally higher than last year, while Chinese economic expansion will slow and Japan’s growth will be 1.65%, reflecting the devastating earthquake and tsunami in March 2011. Our oil price assumption for 2011 is US$101.90/bbl for the OPEC basket, falling to US$97.50/bbl in 2012.
Danish real GDP is forecast to grow by 1.54% in 2011. BMI are assuming 2.21% average annual growth in 2011-2015. Denmark’s 2011 oil and liquids production will have been an estimated 220,000b/d. By 2015, liquids volumes look set to slip to 178,000b/d. Oil demand is expected to stay flat, reaching 177,000b/d by 2015, implying net exports slipping from an estimated 51,300b/d in 2011 to virtually nothing by the end of the period. Estimated 2011 gas production of 6.9bcm is expected to rise to 7.1bcm by 2015. Domestic gas consumption rising from an estimated 4.4bcm to 4.6bcm over 2011-2015 suggests that net exports will remain around 2.5bcm.
Between 2011 and 2020, BMI forecast a decrease in Danish oil production of 33.2%, with output slipping from an estimated 220,000b/d in 2011 147,000b/d by 2020. Given a 10.81% increase in oil consumption over the period, 2011 exports of 51,300b/d will have turned into net imports of 40,000b/d by 2020. Gas production should fall from an estimated 6.9bcm in 2011 to 6.00bcm by 2020. Given a 9.9% rise in gas demand during the period, the country may be exporting just 1.1bcm by 2020. Details of BMI’s 10-year forecasts can be found in the appendix to this report.
According to BMI’s country risk team, Denmark’s long-term political risk score is 93.5, compared with the Developed Markets average of 87.1 and the global average of 63.0. BMIs long-term economic rating for the country is 75.7, above the Developed Markets average of 67.3, and above the global average of 52.9.
There is a partly privatised energy sector, with government majority ownership of the key company DONG Energy. Denmark has a mature and competitive upstream oil and gas segment, featuring national and international companies. The downstream oil segment is small, open to competition and deregulated.
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