Research and Markets: Denmark Oil and Gas Report Q3 2010 - Independent Forecasts & Competitive Intelligence on Denmark's Oil & Gas Industry

DUBLIN--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/bb1f5f/denmark_oil_and_ga) has announced the addition of the "Denmark Oil and Gas Report Q3 2010" report to their offering.

“Denmark Oil and Gas Report Q3 2010”

Denmark Oil and Gas Report provides industry professionals and strategists, corporate analysts, oil and gas associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Denmark's oil and gas industry.

BMI's Denmark Oil & Gas Report forecasts that the country will account for just 1.40% of Developed European regional oil demand by 2014, while contributing 6.20% to supply. In Developed Europe, overall oil consumption was an estimated 13.28mn barrels per day (b/d) in 2009. It is set to recover to around 13.44mn b/d by 2014. Developed Europe regional oil production was 6.96mn b/d in 2001, and in 2009 averaged an estimated 4.73mn b/d. It is set to fall to just 3.71mn b/d by 2014. Oil imports are growing steadily because supply is contracting and demand is rising, albeit slowly. In 2009, net crude imports were an estimated 9.18mn b/d. By 2014, they are expected to have reached 9.73mn b/d. Norway will remain the only major net exporter, with the UK a net importer.

As regards natural gas, the Developed Europe region in 2009 consumed an estimated 426bn cubic metres (bcm), with demand of 473bcm targeted for 2014, representing 9.6% growth. Production of an estimated 265bcm in 2009 is set to fall to 263bcm in 2014, which implies net imports rising from the estimated 2009 level of 161bcm to some 210bcm by the end of the period. Denmark's share of gas consumption in 2009 was an estimated 1.09%, while it contributed 3.21% to production. By 2014, its share of gas consumption is forecast to be unchanged at 1.09%, with a 2.09% contribution to regional supply. We are sticking with our forecast that the OPEC basket of crudes will average US$83.00/bbl in 2010. Wide variations in crude differentials so far in 2010 make forecasting tricky for Brent, West Texas Intermediate (WTI) and Urals, but we believe the three benchmarks will average around US$85.11, US$88.22 and US$83.62/bbl respectively, with Dubai coming in at US$83.14. By 2011, there should be further growth in oil consumption and more room for OPEC to regain market share and reduce surplus capacity through higher production quotas. We are assuming a further increase in the OPEC basket price to an average US$85.00/bbl. For 2012 and beyond, we continue to use a central case forecast of US$90.00/bbl for the OPEC basket. For 2010, the BMI assumption for premium unleaded gasoline is an average global price of US$96.83/bbl. The year-on-year (y-o-y) rise in 2010 gasoline prices is put at 38%. Gasoil in 2010 is expected to average US$92.45/bbl, with the full-year outturn representing a 37% increase from the 2009 level. For jet fuel in 2010, the annual level is forecast to be US$95.58/bbl. This compares with US$70.66/bbl in 2009. The 2010 average naphtha price is put by BMI at US$82.46/bbl, up 39% from the previous years level.

Danish real GDP is assumed by BMI to have fallen by 5.1% in 2009, followed by forecast growth of 1.3% in 2010. We are assuming 2.2% average annual growth in 2010-2014. We expect the countrys 2010 oil and liquids production to be about 258,000b/d, down from an estimated 260,000b/d in 2009. By 2014, liquids volumes look set to have slipped to 230,000b/d. Oil demand could rise to 188,000b/d by 2014, implying net exports slipping from an estimated 75,000b/d in 2009 to 42,000b/d by the end of the period. The estimated 2010 gas production of 8.2bcm is expected to fall to 5.5bcm by 2014. Domestic gas consumption rising from an estimated 4.8bcm to 5.1bcm over the period 2010-2014 suggests that net exports will fall from 3.4bcm to 0.4bcm by the end of the forecast period.

Between 2010 and 2019, we forecast a decrease in Danish oil production of 41.9%, with output slipping from an estimated 258,000b/d in 2010 to 150,000b/d by the end of the 10-year forecast period. Given a mere 1.4% increase in oil consumption over the period, exports of 74,000b/d will turn into net imports of 39,000b/d by 2019. Gas production should fall from the estimated 2010 level of 8.2bcm to 3.0bcm by 2019. Given gas demand rising by 13.7% during the period, net imports of 2.4bcm will be required by 2019. 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 86.7 and the global average of 63.7. Our long-term economic rating for the country is 72.5, above the Developed Markets average of 67.0 and above the global average of 53.7. 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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