2020 was a challenging year for Nordsøfonden


It cannot be denied that 2020 was a challenging and transformative year for large parts of the world on account of COVID-19, and Nordsøfonden’s business was likewise affected by the pandemic. This is the picture revealed by the Nordsøfonden and Nordsøenheden annual report for 2020, which is being released today.

One of the consequences for Nordsøfonden is that the pandemic has contributed to further delay of the redevelopment of the Tyra field, such that production is now expected to recommence in the middle of 2023 – a year behind schedule. At the same time, exploration activities suffered from the effects of postponements and cancellations on account of the drop in oil prices.

The precipitous fall in the prices of oil and gas has naturally had a negative impact on Nordsøfonden’s profits.

“Over the past year, we and our partners in the DUC succeeded in achieving a number of milestones in the redevelopment of the Tyra field – in spite of the pandemic and its consequences. A large part of the Tyra installations was removed during the summer, and two new jackets were installed in the autumn,” relates Birgitta Jacobsen, CEO.

Substantial investments affect profits

Nordsøfonden invested a total of DKK 830 million in 2020, of which almost DKK 800 million was devoted to the DUC’s redevelopment of the Tyra field facilities.

The special structure of Nordsøfonden entails any surplus liquidity being transferred annually to the Danish state so as to prevent the accumulation of funds in Nordsøfonden itself. On account of the major investments and decommissioning costs associated with the Tyra field, no dividend was paid to the Danish state in 2020; rather, Nordsøfonden took out state loans in the amount of DKK 500 million to finance the redevelopment work. Nordsøfonden paid DKK 263 million in hydrocarbon taxes in 2020.

“It goes without saying that we’d prefer to generate a dividend for the Danish state every year. Given our structure, however, which dictates that we are not to carry over liquidity from one year to the next, there will occasionally be years where we need to take out loans to finance investments in future oil and gas production. Once the Tyra field facilities have been recommissioned, they will play a key role in securing Denmark’s gas supplies for many years and generate income to the Danish State,” explains Birgitta Jacobsen.

Nordsøfonden’s net result for 2020 was a profit of DKK 125 million, compared to a profit of DKK 565 million in 2019.

Temporary closure of the Tyra field results in fall in production

Nordsøfonden’s share of the DUC’s oil and gas production in 2020 amounted to 4.3 million barrels of oil. This represents a 27 percent decrease in relation to production in 2019. Gas production for 2020 totalled 2.5 million MWh, which is less than half the figure for 2019.

The drop in production was nevertheless expected, and while the decrease in gas production is primarily attributable to the temporary closure of the Tyra field facilities, the dip in oil produced also reflects the natural decline in yield from the fields. The Tyra field was closed late in 2019, and production of oil and – particularly – gas will be affected until the new installations come on stream.

New agreement on the future of the North Sea

A broad political agreement regarding the future framework for the production of oil and gas in Denmark was passed in 2020, setting out the terms and conditions for the area until 2050. This gives certainty that the existing activities can continue and that the North Sea resources can still be utilised. Even though the green transition is well under way in Denmark, the country will continue to need oil and gas for decades to come.

Within the broad agreement, funds have been earmarked for investigating the possibilities for storing CO2 in the subsoil (CCS) and for analysing the potential of electrifying Danish oil and gas production so as to reduce carbon emissions.

“We are pleased with the agreement, which clearly charts the future of North Sea operations. Nordsøfonden’s task is unambiguously defined and we will continue to focus on how activities in the North Sea can generate the greatest possible value for Danish society, while simultaneously contributing to Denmark achieving its goal of cutting carbon emissions by 70 percent in 2030,”

says Birgitta Jacobsen, who adds:

“We see great potential in CCS technology, although implementing this technology remains financially challenging. We are also working closely with our partners in the DUC to develop energy-efficient solutions such as the electrification of North Sea installations.”


Read the annual report 2020


Birgitta Jacobsen