Page 15 - EurOil Week 41

EurOil PERFORMANCE EurOil

European gas prices recover

to level at end-2019

EUROPE EUROPEAN gas prices have seen a significant than the seasonal average but within historical
recovery, with spot contracts at the Dutch TTF bounds.”
Higher prices could also hub now selling at $186 per 1,000 cubic metres, Russia’s Gazprom naturally stands to gain
trigger a recovery in Kommersant reported on October 12. from higher prices over the coming months.
LNG imports, however. This marks the highest level since December But “the rebound in gas prices might lead to a
2019, just before prices plummeted after Russia recovery in LNG imports, which in turn would
and Ukraine agreed a new transit deal, averting likely keep gas prices from appreciating further,”
a potential supply disruption to Europe. Prices VTBC said.
slumped to an historic low of $34 per 1,000 cubic Gazprom has been hit harder by the slump
metres on May 21, as a result of coronavirus in European demand than most other suppli-
(COVID-19) lockdowns and a growing supply ers, with its pipeline sales to the continent con-
glut. tracting by 9% so far this year, the International
November gas futures are trading even higher Energy Agency (IEA) estimated in a webinar on
than the spot price, at $187 per 1,000 cubic October 12.
metres, according to Kommersant. The company expects the European market
“The growth in gas prices in Europe was to remain overstocked into next year, due to
made possible by flattish LNG supplies to the rebounding US LNG supplies, Gazprom Export
region, which have fallen a marginal 1% in Sep- CEO Elena Burmistrova said at the online Flame
tember-October to date versus August, but in conference. She blamed US LNG exporters for
general have been declining in recent months, unbalancing the market, saying that Gazprom
dropping 10% versus the summer,” VTB Capital had acted “responsibly and self-confidently” by
(VTBC) commented in a research note. “Natu- taking a hit to its sales rather than flooding the
ral gas storage is now 96% full, which is higher market. ™

POLICY

Danish government urges resolution

to licensing limbo

DENMARK THE Danish government has called on political independent government advisor on climate
parties to discuss the future of oil and gas explo- change said Denmark would need to end all
Only one company is ration, after France’s Total withdrew its bid from oil and gas exploration or jeopardise its image
now participating in the the country’s latest offshore licensing round. as a front-runner in the battle against climate
contest. Denmark launched the contest for North Sea change.
acreage last year, which also attracted offers from The government has pledged to slash Den-
Sweden’s Lundin Petroleum, Hungary’s MOL mark’s emissions by 70% below the level of 1990
and the UK’s Ardent Oil. Awards were expected by 2030, representing one of the most ambitious
over the summer but were delayed. targets in the world. But critics say limiting
“Total, which is the North Sea’s largest oper- domestic oil and gas supply is counter-intuitive,
ator, has announced they are withdrawing their as it will result in Denmark simply importing
application for the 8th licensing round,” Den- more fossil fuels. Imports create more emissions
mark’s Ministry for Climate, Energy and Utilities because of the distances involved in supplying
said in a statement on October 8. “This creates them.
considerable uncertainty about the 8th tender Denmark lost its status as a net exporter of oil
round.” in 2018 and then its position as a net gas exporter
MOL and Lundin have already pulled out last year, after the closure of its biggest field Tyra
from the round, leaving just two applications, for a lengthy redevelopment programme.
both from Ardent, the ministry told Reuters. The ministry said it would try to strike a
The government, which was formed in June balance between ensuring a stable regime for
2019 by the Social Democratic Party and its existing oil and gas activity in the North Sea,
left-leaning allies, has said before it will con- safeguarding jobs and investments, and the
sider cancelling the round. Earlier this year an country’s climate ambitions. ™

Week 41 15•October•2020 www. NEWSBASE .com P15