Oil and gas in Europe: Part 3

Slovakia

BMI has reported that Slovakia has an above average dependency on energy imports and a very high level of energy intensity when compared to the regional average. Slovakia remains dependent on Russia for a large portion of its imports however; an infrastructure programme across the EU is likely to help increase flexibility.

Looking at the refining industry in the country, the Bratislava refinery is expected to continue running at high capacity however; the market for refined products is a risk due to the situation across Europe as a whole. The country is however expected to remain a small net exporter of refined products.

Spain

Spain currently imports 98% of its natural gas and oil demand, according to BMI. However, there is a possibility this could change as the country is seeking to invest in the upstream sector more heavily and fracking has been legalised.

For this year, BMI expects crude imports to be at 1.15 million bpd and represent an expenditure of US$ 42.6 billion. When it comes to gas, imports are expected to cost the country US$ 16.7 billion this year. To 2017, the importing of liquids and gas is expected to drop.

UK

Oil and gas production in the UK is expected to increase slightly between 2016 and 2017 but shale is not expected to be fruitful in the country until 2020 at the earliest. Oil consumption is expected to continue to fall as a result of energy efficiency, mainly in the transport sector, high oil prices, dropping domestic production and the drop in oil usage in the power sector, all according to BMI.

When it comes to gas, from 2015 onwards, demand is expected to increase, particularly for the power sector. Gas is anticipated by BMI to become the power plant feedstock of choice and will completely phase out coal in the long run.

When it comes to the refining sector the outlook is reportedly bleak and refining capacity as well as oil product output is expected to fall beyond 2017 from 2013 levels of 1.55 million bpd to 1.24 million bps. A downsizing of the Milford Haven refinery is also threatening to impact the UK’s refining sector. In 2013 the UK became a net refined fuels importer due to the downsizing of refineries in the country and net exports are expected to increase.

Ukraine

According to BMI, the investment market for oil and gas in the Ukraine is turbulent. This has been contributed to by the recent oil tax increases as well as the increase of taxes on gas and mineral oil. Royalties on natural gas production are expected to increase to 55% and this does not attract investors.

When it comes to importing gas, construction of infrastructure to import 27 million m³/d from Slovakia has been completed and the country now has access to approximately 15 billion m³ of reverse flow gas capacity from across the EU.

Edited from report briefs by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/07102014/oil-gas-europe-3-bmi/