Over the medium term, BMI expects a partial, but temporary recovery in oil and gas volumes over the medium term, as small developments come online. However, past 2019, production will resume to the downside. The country should however remain a net oil and gas exporter but BMI has highlighted that exports will become increasingly thin by the end of 2023, notably for crude. Oil and gas reserves in the country are set to decline as a whole as well.
When it comes to refining, refined fuels production is expected to progressively decline, on the back of weakening domestic fuel consumption and the overall difficult economic situation in the European downstream sector. No refinery closures in Denmark have been announced however, major cost cutting motions are expected.
BMI has said that regardless of considerable downside risks over the short term, Dutch petrochemicals still offer some distinct competitive advantages over the long and medium term. Petrochemicals production in the country still reportedly has several distinct advantages and these should help it maintain its regional position. The advantages include a high level of integration, economies of scale and diversity of the product slate. Last year the Netherlands had capacities of 3.98 million tpy of ethylene, 675 000 tpy of PVC, 95 000 tpy of polystyrene, 1.9 million tpy of polyethylene, 780 000 tpy of polypropylene and 450 000 tpy of polyethylene terephthalate.
Last year, BMI said that Norwegian oil was on track to return to growth after 12 consecutive years of decline. Both oil and gas production for this year are expected to remain steady despite lower oil prices, however, investments in the upstream sector are expected to fall. This is due to impact longer term oil production with less investment in IOR projects and frontier development.
When it comes to the main trends for the oil and gas sector, BMI has forecast that oil, condensate and NGL production will increase in 2014. The Norwegian government has however failed to introduce new fiscal incentives after deeming the oil and gas industry sufficiently profitable. This will reduce the attractiveness of investing in Norway, according to BMI, particularly with lower oil prices and high industry costs.
Edited from report briefs by Claira Lloyd