Once again in 2019, Nordsøfonden made a ten-figure contribution to the Danish State. In total, the transferred dividend plus taxes paid generated a cash flow of DKK 1.2 billion to the Danish Treasury. This is the figure that appears in the Nordsøfonden and Nordsøenheden annual report for 2019, which is being released today.
The 2019 annual report is being published in the midst of a global crisis stemming from the spread of the coronavirus, accompanied by plummeting oil prices. Moreover, the ongoing redevelopment of the Tyra field facilities will entail significant investments and a temporary reduction of production. This – combined with the prevailing crisis – makes it difficult to assess the future consequences for Nordsøfonden’s activities.
Profits from 2019 paid to the Danish Treasury
Total revenues from Nordsøfonden’s sales of oil and gas in 2019 amounted to DKK 3.3 billion. Nordsøfonden’s result for 2019 was a profit of DKK 565 million, an increase of more than 20 percent on the figure for 2018.
As an oil and gas company, Nordsøfonden pays both corporate tax and hydrocarbon tax. In addition, the profit generated by Nordsøfonden every year is paid to the state as a dividend on account of the special structure of the organisation.
2019 thus saw Nordsøfonden paying DKK 806 million in taxes, as well as transferring a dividend of DKK 400 million to the state – making the total payment fully DKK 1.2 billion.
Drop in production
Nordsøfonden’s share of oil and gas production in 2019 amounted to 6.5 million barrels of oil and 5.7 million MWh of gas.
Oil production fell by 12 percent in relation to 2018, a development attributable to factors such as the natural decline in recovery from the existing fields. Unplanned production shutdowns likewise had a negative effect on production.
The 27 percent drop in gas production was expected and primarily due to the closure of the Tyra field facilities in September 2019 as a part of the ongoing redevelopment project. It is anticipated that gas production will continue to be affected until redevelopment of the Tyra field has been completed. The new facilities are scheduled to come online in 2022.
Major investments under way
Nordsøfonden made investments totalling DKK 666 million in 2019. The majority of this sum was devoted to redevelopment of the Tyra field facilities, which play a key role in the energy infrastructure in the Danish part of the North Sea. It was in 2017 that Nordsøfonden and the other partners in the Danish Underground Consortium (DUC) decided to invest DKK 21 billion in the Tyra field. The redevelopment of the Tyra field is already well under way, and the total investment is comparable with that made in the City Ring section of the Copenhagen Metro. For this reason, Nordsøfonden will continue to make significant investments in the new facilities over the coming years.
“Some people may find it strange that we’ve chosen to invest such large sums in a new facility when the country is going through a green transition. However, we will continue to need oil and gas until we achieve the goal of becoming a fully fossil-free society,” relates Birgitta Jacobsen, who continues:
“During the conversion phase, the oil and gas sector must contribute to the green transition, in the same way as other industries. We at Nordsøfonden are working continuously to ensure that our activities in the North Sea are founded on environmentally sound and energy-efficient solutions. Through dialogue with our partners, we’re making a conscious effort to influence operations and the other work done under the licences.”