Oil and gas production in Demark is expected to see a recovery to 2017, but after that, BMI believes that production will start to fall. The country will remain a net exporter of oil and gas however but export levels will thin. The domestic consumption of oil and gas is also expected to fall as energy intensity levels as well as fuel efficiency and the increased consumption of renewable energy become bigger parts of the Danish market.
Refined fuels production in Denmark is also expected to decline due to weak consumption and the continuing difficult economic situation in the European downstream sector. BMI has said that whilst no refinery closures have been announced in the country, the Kalundborg refinery is going to undergo cost cutting measures this year.
New energy bill in France will have a big impact on the oil and gas sector as it encourages the use of nuclear power and energy efficiency, BMI has said. This will mean a rather unimpressive economic outlook for the fossil fuel industry. BMI has also said that in France further refinery closures are a given due to market conditions and margins will remain weak in the sector. This will go in hand with the drop in consumption levels of refined products that is expected in France.
Over the next 10 years, BMI expects Germany to remain the largest consumer and importer of oil in Western Europe. Germany is also anticipated to be the largest importer of natural gas. BMI has said that Germany will not be able to move away from Russia due to its large demand levels.
LNG is playing a part in the German energy mix at the moment and BMI has reported that the state is providing loan guarantees to boost the competitiveness of German countries in securing LNG. This is being interpreted as a direct move by Germany to endeavour to secure gas sources from countries other than Russia.
Turning downstream, In March last year, the Shell 100 000 bpd Harburg refinery was taken offline, and BMI has said that Germany’s vast refining sector is likely to fall victim to further rationalisation due to the pressure that is currently being faced by the European refining sector. The downstream industry is also going to be impacted by the drop in domestic demand for refined products. This will be due to improvements in energy efficiency, automotive efficiency and a drop in population. BMI also expect that the slowdown in consumption will impact the consumption of biofuels for the worse as well.
Gas consumption and production in the country are on the decline, according to BMI. Next year, the production of gas is expected to stand at approximately 2.1 billion m3 and consumption is expected to have fallen to 9.9 billion m3 and demand is likely to drop further to 9.5 billion m3 by 2018. Hungary is expected to be producing approximately 20% of its domestic gas demand levels.
When it comes to oil, production and demand levels are expected to fall here too. Production in 2014 is expected to average 65 400 bpd and decline year on year at a rate of 3.7% until 2021. For refining, there is some positive news as the production of refined products is expected to rise slightly to 181 000 bpd. This means, according to BMI, that there will be an excess of refined products in the country and 55 000 bpd available for export as domestic demand is expected to sit at 125 500 bpd.
Edited from report briefs by Claira Lloyd
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/07102014/oil-gas-europe-2-bmi/