Low oil prices cause losses in Nordsøfonden
For the third consecutive year, the state-owned company Nordsøfonden experiences a big loss. In 2016 it was DKK 443 million. Which, however, was significantly less than the loss in 2015 of DKK 1,352 million, characterized by major write-downs and significant expenses for a lost arbitration case.
Nordsøfonden is a part of DUC, and the fund's share of production fell by approx. 10 pct. compared to the previous year due to the natural decline in production from the fields. Oil production was 8.4 million barrels while gas production was 690 million m3, approximately as much as in 2015 production.
The lower oil production combined with the very low average oil price of $ 44 per barrel resulted in a total turnover of 3.2 billion DKK. 700 million DKK less than the year before, while the fund's share of production costs amounted to 1.4 billion DKK.
The arbitration case that ended in 2015 had no significant impact on the financial statements for 2016 but charged liquidity by 550 million DKK.
If the average oil price in 2017 remains at the current level of approximately $ 53 per barrel, the company expects a profit of approximately 100 million DKK based on a continued natural decline in production.
The fund expects investments of approximately 700 million DKK this year, which is slightly lower than in 2016, it is stated in the Fund's annual calculation.
Source: Nordsøfonden / Maritime Denmark