Significant surge in oil and gas prices
Since the start of 2020, the effects of the Coronavirus pandemic have meant highly unpredictable energy requirements and this has naturally had a knock-on effect on energy prices. While the prices of oil and gas generally declined in 2020, although with substantial fluctuations, 2021 has been distinguished by a strong surge in prices. Gas prices in particular have risen sharply and at the end of last year were almost ten times the level seen in previous years. This development is due to the fact that less gas was available in Europe and that levels in gas storage facilities were historically low, one of the reasons being the reductions in gas exports from Russia to Europe.
The rising prices in 2021 resulted in Nordsøfonden closing the year with profits of DKK 341 million in net result, even though production has actually remained low due to the temporary shut-in of the Tyra Field. Nordsøfonden’s total turnover amounted to DKK 2.5 billion, given that Nordsøfonden’s share of production in DUC (the Danish Underground Consortium) comprised 4.1 million barrels of oil and 2.1 million MWh gas. Nordsøfonden paid the net sum of DKK 14 million in taxes and duties to the Danish State in 2021.
Activity in the Tyra field continued at a high level
The redevelopment of the Tyra Field – Tyra II – continued to be Nordsøfonden’s most significant activity in 2021. Nordsøfonden invested almost DKK 725 million in the project last year, while DUC is expected to invest in excess of DKK 20 billion in the redevelopment.
An important milestone in the Tyra project was achieved in September 2021 when three new modules and two new bridges were installed on Tyra East with the assistance of the largest crane vessel in the world. Now follows the major tasks offshore in relation to the commissioning and hook-up scope of the new facilities.
A further three new modules and two bridges for Tyra West were also installed in the spring of 2022, as well as a utility and living quarters module. This means that seven of eight new platforms are now in position. It is expected that Tyra II will recommence production in June 2023, when the installations will once again serve as a hub for the gas produced in the Danish Section of the North Sea.
“The redevelopment is well under way, and we look forward to bringing the new Tyra II in production in 2023. At that time, the field will once more be in a position to contribute to ensuring a stable supply of gas to Denmark and the rest of Europe,” relates Birgitta Jacobsen, CEO.
In view of the war in Ukraine, focus since the start of 2022 has been centred on the opportunities for increasing production from the Danish section of the North Sea so as to help make Europe less dependent on Russian gas.
“Energy and supply reliability have become an extremely high-priority topic for the governments of Denmark and other countries in Europe. Nordsøfonden is therefore currently working closely with the other partners in DUC to look into opportunities to accelerate or ramp up Danish production,” adds Birgitta Jacobsen.
New types of offshore activities
The past year saw promising development in CCS activities (capture and storage of carbon dioxide) in Denmark. The Danish government views CCS as a necessary tool in achieving the objective of cutting carbon emissions by 70 percent by 2030, and in the summer of 2021, a broad majority of the Danish Parliament reached agreement on the framework for storing captured carbon dioxide in the Danish underground.
Nordsøfonden and the other partners in DUC are participating in an initiative entitled “Project Bifrost” together with the Ørsted and the Technical University of Denmark (DTU). The project, which was launched in 2021, is intended to cultivate the potential for the transport of CO2 to offshore facilities for long-term storage, making use of the existing infrastructure at DUC’s Harald Field.
“It’s important to make a start on CCS as quickly as possible, and the purpose of the project is precisely to utilise a depleted gas field, where the geology is well-known, and to make use of existing infrastructure. This will help establish a strong springboard for implementation of the technology,” concludes Birgitta Jacobsen.
Read the 2021 Annual Report