Denmark’s Energy Agency has confirmed that it has been asked for a record number of gas and oil permits during the latest round of licensing. Applications have been submitted from companies such as Royal Dutch Shell, A.P. Moller-Maersk and Hess.
The Agency announced that it was in receipt of 25 license applications from fifteen companies. The closing date was this Monday at noon, and the round restricted licences to the south-west area of Denmark’s waters. However, no specific blocs or areas were detailed.
Licences will be granted to successful applicants next year. After the UK and Norway, Denmark is the smallest North Sea hydrocarbon producer. However, the country’s state coffers will greatly benefit from its production levels of 175,000 barrels daily.
Rasmus Petersen, Denmark’s Energy Minister, said that he was ‘pleased’ with the applications that had been submitted so far, which showed that oil businesses were confident that economically worthwhile finds could still be made in Danish seas. This region is notoriously tricky for both production and exploration of hydrocarbons due to the chalk fields which characterise the geology, featuring low permeability and high porosity. These features make the rock difficult for oil extraction.
As a result, the oil recovery rate currently stands at just 26pc of the country’s total identified oil and gas reserves. However, Denmark’s government is hopeful that this rate will improve drastically with the development of new technologies and processes. For each percentage point that recovery does rise, the total value of the country’s oil production will increase by $12 billion USD, according to the Danish Energy Agency.
The next licensing round will be launched in 2016. To see a full list of the companies that have submitted license applications, go to http://www.ens.dk/sites/ens.dk/files/energistyrelsen/Nyheder/2014/companies_in_7_round.pdf.