Monday, July 13, 2020

Record Interest in Danish Oil and Gas Licensing Round

Posted by October 20, 2014

Denmark has received a record number of applications for oil and gas permits in its latest licensing round, including from A.P. Moller-Maersk's oil unit, Royal Dutch Shell (RYDAF) and Hess .

The Danish Energy Agency said it had received 25 applications from 15 companies by Monday's midday deadline.

The licensing round was restricted to the south-western end of Danish waters, but there were no specific areas or blocs involved. The licences will be awarded next year.

Denmark is the smallest of the North Sea producers after Norway and Britain, but its 175,000 barrel per day production is significant for state coffers.

"I am very pleased with the number of applications received in the licensing round, which confirms that oil companies are still confident interesting discoveries can be made in the Danish area," Energy Minister Rasmus Helveg Petersen said in a statement.

It said it would launch the next licensing round in 2016.

Oil and gas exploration and production from the Danish part of the North Sea is difficult due to geology characterised by chalk fields with high porosity but low permeability, meaning it is tough to coax oil out of the rock.

For that reason, the recovery rate - the amount of oil lifted so far and the amount expected to be produced in the future using current technology - is low at 26 percent of Denmark's identified reserves.

Denmark hopes progress with technology will raise that recovery rate significantly. For each percentage point increase in the recovery rate, the value of Denmark's oil output rises by 70 billion Danish crowns ($12 billion), the energy agency estimates.

(1 US dollar = 5.8285 Danish crown)

(Reporting by Erik Matzen; editing by Jane Baird)

Related News