Page 6 - Euroil Week 41 2019

EurOil COMMENTARY EurOil
Denmark eyes end to
exploration
While there is demand for oil and gas, there will be supplies to meet it
DENMARK
WHAT:
Denmark has considered cancelling its latest licensing round.
WHY:
The move comes after the government set out ambitious targets for cutting emissions.
WHAT NEXT:
Restrictions to exploration alone are counter-intuitive, as demand will simply be met with supplies from further afield.
DENMARK has become the latest country to suggest scaling back its fossil fuel industry, after setting itself one of the most ambitious climate targets in the world.
The country’s Social Democratic Party, which formed a new government in June with left-lean- ing allies, has said it will assess whether to cancel an already announced tender for new oil and gas licences.
“We have started work in the new govern- ment to assess the situation,” Prime Minister Mette Frederiksen told reporters on October 11, according to Reuters. “When we have the foun- dation we will conclude if there will be an eighth licensing round or not.”
Denmark kicked off its latest licensing round last year, attracting offers from France’s Total, Sweden’s Lundin Petroleum, Hungary’s MOL and the UK’s Ardent Oil. Announcing the bids, the Danish Energy Agency had said the interest generated demonstrated the Danish North Sea’s status “as a stable, attractive oil and gas invest- ment area.” Negotiations began last February
and awards were expected during the summer but were delayed.
To gain its majority in Parliament, the Social Democratic Party banded together with the Socialist People’s Party, the Red- Green Alliance and the Social-Liberal Party and shortly after announced a “new politi- cal direction” for the country. It pledged not only to end austerity but also double down on efforts to tackle climate change. The govern- ment set a goal of slashing Denmark’s emis- sions by 70% below the 1990 level by 2030, as an intermediary step towards becoming fossil fuel-free by 2050.
Critics of this new path the government is taking have said that ending oil and gas explo- ration is counter-intuitive. Denmark, which is set to produce 105,000 barrels per day (bpd) of oil and 44,000 barrels of oil equivalent per day (boepd) of gas this year, lost its status as a net exporter of oil last year. It then lost its position as a net exporter of gas last month, when Total closed down the country’s largest gas field, Tyra,
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w w w . N E W S B A S E . c o m Week 41 17•October•2019