Page 8 - FSUOGM Week 41 2021

FSUOGM COMMENTARY FSUOGM

can control rather than rely on other countries.” radical changes to the country’s offshore law that
were introduced by the government in late 2018.
Denmark ends exploration Among other things, the revised law imposed
Gas supply in Denmark has also been falling for restrictions on where operators could sell their
years, as a result of natural decline and, more gas as well as introducing caps on prices.
recently, the closure of its largest field for redevel- OMV Petrom and ExxonMobil have repeat-
opment work. From 8.5 bcm in 2010, the coun- edly delayed taking a final investment decision
try’s output was only 1.4 bcm last year. (FID) on the largest of Romania’s offshore dis-
The offshore Tyra gas field operated by coveries, Neptun Deep, citing the regulatory
France’s TotalEnergies was by far Denmark’s changes. The centre-right minority government
biggest source of production until its closure of Prime Minister Florin Citu wants to reverse
in September 2019, so that a redevelopment the changes to the offshore law, but opposition
programme could take place. This programme parties have tried to prevent this. The country is
involved the replacement of the topsides at Tyra’s now in the midst of a political crisis, with Roma-
platforms, which over many years of production nian lawmakers voting overwhelmingly to top-
had subsided, as well as the installation of new ple Citu’s government in a no-confidence vote on
jacket extensions. October 5. As such, it seems unlikely there will
The work had been due to wrap up in July be any improvements to the law any time soon.
2020, although there were delays as a result of
coronavirus restrictions imposed at fabrication The Norwegian bright spot
yards in Asia. The field still has not resumed The notable exception to declining gas supply
gas supply. As a result, Danish authorities now rates in Europe is Norway, which has kept its out-
predict that national gas output will never again put stable in recent years. It produced 111.5 bcm
reach the level of 4 bcm per year that it was prior of gas last year, much of which went to Europe,
to Tyra’s closure, and will instead re-peak at only making it the continent’s second-biggest supplier
3 bcm in 2027. after Russia.
Further dimming prospects for Danish gas And indeed, Norway shows no sign of fol-
supply, the country became the latest to end all lowing other European countries in imposing
oil and gas exploration in December last year restrictions on oil and gas development. The
under an agreement between the government former centre-right government announced
and Parliament. Denmark is the largest oil and in June a new energy strategy that would see
gas producer to have taken such a step. the country continue to hold regular licensing
rounds for oil and gas exploration for decades to
Romanian Black Sea delays come, although a 65% natural decline in produc-
Contributing to the current tightness of the tion is envisaged by 2050. Norway’s Labour and
European gas market, Romania’s ambitious Centre parties are due to form a new minority
plan to develop a series of gas fields in the Black government following elections in September,
Sea has largely not materialised. Rather than an although both are eager to protect the Norwe-
environmental policy, the industry has blamed gian economy and jobs, making a tougher stance
the lack of investment in offshore discoveries to against gas development unlikely. ™

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