Annual Report and Accounts 2023
Introduction
BlueNord is providing Europe with the energy it needs today, tomorrow, and in the net-zero future
BlueNord is a strategically important European oil and gas company, specialising in the production and development of resources that support the energy transition towards net zero.
While creating value for stakeholders, BlueNord helps to deliver the energy security that millions of people depend on in today's changing world.
Strategic Report 1 - 52
Highlights of the Year | 1 |
Chair's Statement | 3 |
Completion of Tyra II | 4 |
Our Business at a Glance | 6 |
Chief Executive Officer Statement | 9 |
Business Model | 12 |
Our Strategy | 13 |
Distribution Policy | 14 |
Strategy in Action | 15 |
Operational Review | 21 |
Financial Review | 23 |
Sustainability Report | 25 |
Risk Management | 44 |
Principal Risks and Uncertainties | 45 |
Governance Report 53 - 71
Chair's Introduction | 54 |
Leadership | 55 |
Corporate Governance Report | 57 |
Board Activities | 62 |
Audit Committee Report | 63 |
Remuneration Committee Report | 64 |
ESG Committee Report | 65 |
Nomination Committee Report | 66 |
Directors' Report | 67 |
Reporting of Payments to Governments | 71 |
Financial Report 72-154
Consolidated Statements | 73 |
Consolidated Statement | 73 |
of Comprehensive Income | |
Consolidated Statement | 74 |
of Financial Position | |
Consolidated Statement | 76 |
of Changes in Equity | |
Consolidated Statement | 77 |
of Cash Flows | |
Notes | 78 |
Statutory Accounts | 122 |
Income Statement | 122 |
Balance Sheet | 123 |
Cash Flow Statement | 125 |
Notes | 126 |
Independent Auditor's Report | 137 |
Statement of Compliance | 140 |
Alternative Performance Measures | 141 |
Supplementary oil and gas information (unaudited) | 142 |
Appendices | 143 |
Information about BlueNord | 155 |
2nd largest
Oil and gas producer in Denmark
Highlights of the Year
2023 has positioned us well to deliver on our plans for 2024 and beyond, bringing broader value for all our stakeholders
Strategic Report
REVENUE
$795m
OPERATING CASH FLOW
$250m
EBITDA
$421m
TOTAL LIQUIDITY
$(CASH AND317mUNDRAWN FACILITIES)
The new Tyra facilities were safely restarted on the 21st March 2024 with ramp-up to maximum capacity under way.
Read more on page 4
Reserves replacement of 135% year end 2023.
Read more on page 7
Elimination of routine flaring.
Read more on page 18
Excellent safety
Read more on page 23 and 24
Excellent results from well optimisation activities has decreased the production decline in the DUC fields.
Read more on page 16
performance, with second lowest incident frequency since 2009 despite very high activity level.
Read more on page 5
1 | BlueNord | Annual Report and Accounts 2023 |
Strategic Report
Strategic
Report
Chair's Statement | 3 |
Completion of Tyra II | 4 |
Our Business at a Glance | 6 |
Chief Executive Officer Statement | 9 |
Business Model | 12 |
Our Strategy | 13 |
Distribution Policy | 14 |
Strategy in Action | 15 |
Operational Review | 21 |
Financial Review | 23 |
Sustainability Report | 25 |
Risk Management | 44 |
Principle Risks and Uncertainties | 45 |
2 | BlueNord | Annual Report and Accounts 2023 |
Chair's Statement
Solid foundations for shareholder value creation
BlueNord is well on its way to delivering its ambition of becoming a leading independent European energy producer. This is on the back of a further successful year in 2023 and the restart of Tyra in March 2024.
Strategic Report
BlueNord intends to commence distributions in 2024, delivering on one of our core commitments to shareholders.
Riulf Rustad
Executive Chair
BlueNord continues to prove its ability to deliver its ambition of becoming a leading independent European energy producer. This is on the back of a further successful year in 2023 and with the recently announced first gas from Tyra II. This places BlueNord in a an increasingly strong position, as a significant contributor to regional EU energy security and a major supplier of gas, being the fuel of choice for transition, as the world pivots to a greener future.
This position has been achieved through a strong and consistent focus on capital discipline, based around maximising the DUC opportunity. With production set to more than double, and with Tyra II having been brought back on stream, our approach to enhance value for our stakeholders remains firm. The Company has set out a clear path to continue to deliver from the DUC assets, thereby maximising capital efficiency and allowing it to become a significant dividend paying company for its shareholders.
Energy security and access to economically competitive sources of gas remains of key importance in Europe. It comes on the back of continued uncertainty across many parts of the world, impacting trade and regional economic performance, which is set to continue in 2024. The need to have access to secure, safe and cost-effective sources of energy is central to economic success and the standard of living across the region. It underpins business, transport and the region's economic competitiveness, in an era where supply lines are being disrupted, interest rates remain high and economic performance impacted.
BlueNord continued to perform in 2023, representing another year of delivering against results. This is reflected in its production and financial performance, which was again at the top end of estimations, with EBITDA for the year of USD 421 million and production of 24.9 mboepd.
As a result of its now growing track record, BlueNord is in an enviable position, with strong foundations to continue to deliver in the year ahead and beyond. Capital discipline and the ongoing efficient use of capital remains the basis on which the Company will be managed. Every decision will be assessed against this basis, which has served us well in getting us to where we are today.
Today, with Tyra II back on stream, BlueNord is set to be able to start paying dividends in Q3 2024. The Company's assets, combined with the clear plans set out for the future of the business, means it is well placed to offer shareholders meaningful returns, and BlueNord intends to distribute 50 - 70% of its net operational cashflow in the period 2024 - 2026.
That position also means the Company remains well placed to meet its responsibilities to the environment and the success of the region in which it operates. With the ongoing increase in gas production from Tyra, Denmark will be energy self-sufficient and a net exporter of gas to the wider EU region. This represents a milestone for the country; helping people's needs and supporting the ongoing growth of the economy.
A further local, reliable source of gas for the region is also in line with the EU's ambition to reach net-zero. In addition to being a source of transitional energy, localised gas offers a much lower relative carbon footprint to the alternatives, such as imported LNG,
which has increased in Europe, post sanctions being imposed on Russian supplies.
The reweighting of the Company's production from liquids to gas, will also greatly reduce BlueNord's own emissions intensity, in line with its ambitions. This is alongside continuing to evaluate the opportunity for carbon storage through its CCS subsidiary, CarbonCuts, which recently submitted its license application for its onshore CO2 storage project in Denmark, Project Ruby.
Once again, on behalf of the Board and shareholders, I would like to take the opportunity to thank the operational and management teams for their hard work and commitment to the success of the business. It is through their dedication to the Company and the skill they bring to the business that we are in such a strong position today.
As the Board looks ahead to the rest of the year and beyond, we do so again with greater confidence. BlueNord is set to continue to outperform and I look forward to supporting the team in the year ahead as further progress is made and milestones delivered.
Riulf Rustad
Executive Chair
3 | BlueNord | Annual Report and Accounts 2023 |
Completion of Tyra II
- landmark achievement as Tyra II comes online
Ensuring sustainable energy security with the redevelopment of Tyra.
On the 21st of March 2024, the first gas was processed and exported to Nybro in Denmark from the brand-new Tyra II facilities. This remarkable feat of engineering is Denmark's largest infrastructure project to date and represents a gross investment of around 27 billion Danish Kroner, or close to 4 billion USD spent since the field development studies commenced in 2013.
BlueNord is proud to have participated in the delivery of Tyra II, and we congratulate everyone involved in this landmark achievement, in particular the Operator TotalEnergies and our partner Nordsøfonden.
Tyra II will be a vital part of Europe's energy supply for many years to come, providing much-needed energy towards a net-zero future.
See Our Strategy on page 17 to find out more.
Strategic Pillar
Deliver Tyra II
Strategic Report
271mmboe | 35,000 | 1,200 | ||
2P based on YE23 ERCE | Weight of 8 new topsides | Offshore staff contributed | ||
during construction | ||||
30% | 225 km | 95% | ||
Emission reduction | distance from the Danish | Recycling and reuse of the | ||
compared with the | Jutland Coast | old Tyra facilities | ||
former facility |
4 | BlueNord | Annual Report and Accounts 2023 |
Strategic Report
Completion of Tyra II continued
A significant investment
BlueNord has invested over one billion USD in the Tyra redevelopment project, which will produce enough energy to power the equivalent of 1.5 million homes, making Tyra, and Denmark, a key gas producer for the EU.
The new Tyra facilities are expected to produce at 30% lower emissions compared with the former facilities. With Tyra on stream, our focus on maturation of new opportunities will enable us to develop existing DUC discoveries and infill well targets to ensure that the Tyra facilities are efficiently utilised for many years to come. The DUC is set to deliver gas with a significantly lower CO2 footprint than what LNG import can offer until Denmark and Europe can secure its energy supply from renewable sources.
The Tyra II timeline
Dawn Jamieson
Lead Operations Engineer, BlueNord
Delivering success for Tyra II
Dawn has been instrumental in the success of the Tyra redevelopment project. Originally recruited as Operations Engineer, then moving into the role of Tyra Project Manager, she has been dedicated to the project since she joined BlueNord in 2022.
Her role involved contributing to Safety awareness among the BlueNord team, based on her own expertise and frequent offshore visits. Her work to nominate the Tyra health, safety and environment ('HSE') team for the Danske Offshore Safety award resulted in the Tyra team being shortlisted.
As a result of her work on Tyra, Dawn has become a Fellow in Engineering with the Society of Operations Engineers. This is the highest honour which can be bestowed upon an engineer and is recognition for her contributions and accomplishments in the field of start-up of new process plants.
Due to the natural subsidence after 29 years of production, the seabed below the Tyra platform had sunk more than 5 metres, reducing the distance between the sea and the platform decks. The decision was made to rebuild and modernise to ensure safe continued operations for years to come.
2013
The DUC approved the full redevelopment of Tyra, the largest investment ever taken in the Danish North Sea.
2017
October 2018 marked the kick-off for onshore construction around the world, including the fabrication of jackets in Spain, an accommodation unit in Italy, a processing module in Indonesia, and six well head and riser modules in Singapore.
2018
During the summer, the old Tyra facilities were removed. More than 50,000 tons of materials were moved onshore for dismantling and recycling.
In September, the foundations for Tyra II were installed.
2020
Over more than three years, more than 35,000 tons of materials located 54 metres above the seabed created Tyra II, Denmark's new high-tech hub for natural gas production in the Danish North Sea.
2021-2023
On 21 March 2024, the firstgaswasprocessed and exported to Nybro in Denmark.
2024
5 | BlueNord | Annual Report and Accounts 2023 |
Our Business at a Glance
BlueNord operates in the Danish North Sea with a 36.8 percent non-operated working interest in the DUC.
The DUC comprises of 15 fields, four export pipelines and significant infrastructure. Oil and gas is being produced from four operational hubs. It accounts for nearly 90 percent of the oil and gas that is produced in the area. The four export pipelines secure exports from the hubs to the Danish mainland and the international market.
TYRA
- Oil pipeline to Fredericia
- Gas pipeline to Nybro
- Gas pipeline to Den Helder Gas cross-border points
Strategic Report
Sweden
You can find out more about the history of the DUC by visiting bluenord.com/ourassets
HALFDAN
Denmark | |
2 | 1 |
2nd largest
Oil and gas producer in Denmark
Successful restart of production on Tyra
DUC ownership
20%
43.2%
36.8%
TotalEnergies (Operator) 43.2%
BlueNord (Partner) 36.8%
Nordsøfonden (Partner) 20%
DAN
GORM
3
The DUC, which started production | |
Netherlands | in 1972, is located in the Central |
Graben sector of the North Sea. | |
Germany
6 | BlueNord | Belgium | Annual Report and Accounts 2023 |
Our Business at a Glance continued
DUC represents c.90 percent of Danish oil and gas production with a low decline-rate on base production and significant near-term growth.
185.6mmboe | 135% | |||
2P reserves | 2023 reserves replacement | |||
24.9mboepd | 3.9% | |||
2023 production | 2021-23 annual decline | |||
>55mboepd | >120% | |||
2025 production | 2023-25 growth |
Strategic Report
Net production mboepd
Actuals | Estimates | >55 | ||
>40 | ||||
26.9 | 26.7 | 24.9 | ||
2021 | 2022 | 2023 | 2024 | 2025 |
2P development from YE22 to YE23, net
182.3 | -9.1 | 12.5 | 185.6 |
Year End | Produced | Reserves | Year End |
2022 | 2023 | Additions | 2023 |
2023 |
Decrease Increase Total
2P reserves and 2C resources, net
213mmboe
2C
Gas
2POil
7 | BlueNord | Annual Report and Accounts 2023 |
Our Business at a Glance continued
Our assets
Dan Hub
Discovered in 1971 and brought on production in 1972, Dan was the first DUC field in production. Close to 26 percent of total Danish oil production has been extracted from this field.
DAN | ALMA |
KRAKA | REGNAR |
Producing field No production
Discovery
94% | 7.9 | |
Oil share of | Net production | |
2P reserves | 2023 |
26.5 83%
Net 2P reserves | Operational | |
mmboe | efficiency |
Halfdan Hub
Halfdan is currently the largest producing field in Denmark and the most important DUC asset in terms of both value and resources
HALFDAN NORTH
HALFDAN NORTH EAST
HALFDAN MAIN
Producing field Discovery
69% | 12.7 | |
Oil share of | Net production | |
2P reserves | mboepd |
44.6 91%
Net 2P reserves | Operational | |
mmboe | efficiency |
Gorm Hub
The Gorm Hub was also discovered in 1971 and brought on production in 1981. Gorm
is the export hub for most of the oil produced in Denmark.
GORM
ROLF
DAGMARSKJOLD
Producing field No production
97% | 4.3 | |
Oil share of | Net production | |
2P reserves | mboepd |
14.9 80%
Net 2P reserves | Operational | |
mmboe | efficiency |
Strategic Report
Tyra Hub
Tyra is the largest gas field in the DUC. The redevelopment will extend the field's life to continue producing until the concession expiry in 2042.
LULITA
HARALD EAST
FREJA
HARALD WEST
SVEND
BOJE | ||||
VALDEMAR | ||||
ROAR | ||||
Producing field | ADDA | |||
TYRA | ||||
Discovery | ||||
No production | ||||
42% | 27-29 | |||
Oil share of | Expected Q4 2024 | |||
2P reserves | net production rate | |||
mboepd |
99.5 30%
Net 2P reserves | Less emissions | |
mmboe | compared to the | |
previous facilities |
8 | BlueNord | Annual Report and Accounts 2023 |
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Bluenord ASA published this content on 11 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 April 2024 05:06:04 UTC.