Annual Report 2010 311 - Verbundnetz Gas AG

Exploration & production
Activities expanded and diversified. Through
its exploration and production (E&P) activities,
VNG is pursuing one of its main goals, namely
the further diversification of sources of supply.
VNG’s E&P activities were successfully launched
in 2006 and continued to develop on a solid basis
in 2010. E&P activities focus on the Norwegian
Continental Shelf and surrounding areas such as
the Danish North Sea.
VNG currently holds shares in 21 production licences
on the Norwegian Continental Shelf via
VNG Norge AS based in Stavanger and Oslo. VNG
Norge now has a workforce of over 50 and participates
in oil and gas production in the Norwegian
fields of Brage and Njord. The company’s
long-term objective is to produce a significant
share of VNG’s annual natural gas procurement
volumes from its own sources. To that end, the
E&P company mainly participates in licensing
rounds organised by the state authorities, as
well as engaging in projects to acquire shares in
existing licences.
VNG Norge successfully participated in the APA
2009 licensing round and was allocated shares in
three new exploration licences in January 2010.
VNG Norge also submitted several applications to
the Norwegian Ministry of Petroleum and Energy
under the APA 2010 licensing round. Five such
applications were approved by the Ministry in
January 2011, with the company named the operator
in two cases. VNG Norge also participated
in the 21st state licensing round in November
2010. During the same period, licences where
exploration work had identified unacceptably
low resource expectations were returned to the
Norwegian government.
One further milestone for VNG Norge was the
founding of a second E&P company in Denmark
where activities are focused on the Danish North
Sea. The company holds shares in two Danish licences
via VNG Danmark ApS established in April
2010 and successfully started its participation in
exploration activities on the Danish Continental
Shelf. The first well identified an oil find that
is currently being evaluated. VNG Danmark is
also preparing an appraisal well under another
licence in order to obtain detailed information
on the size of the proven gas find and production
possibilities.
Gas trading
Gas purchase
Optimised natural gas supplies. For VNG, longterm
supply contracts remain the basis for reliable
and secure deliveries to customers. VNG therefore
takes most of its natural gas from suppliers and/
or producers under long-term agreements, thereby
securing flexible volumes in line with demand.
However, the competitiveness of these long-term
volumes on the German and European energy
market has deteriorated as a result of the current
global surplus and increasingly intense competition
on the energy market. VNG is convinced that
a mutually acceptable solution for safeguarding
the competitiveness of these long-term volumes
can be found through an intensive dialogue with
its partners.
Growing volumes of natural gas available with
different contract terms are being offered and
requested at the virtual trading hubs. As a result,
there has been a further significant increase in
liquidity at these trading hubs. VNG again made
use of these liquid spot and futures markets for
optimisation purposes in 2010.
In the 2010 financial year, VNG AG took 213.9 billion
kWh (2009: 188.5 billion kWh) from numerous
producers and suppliers. The increase was
mainly attributable to higher volumes taken from
European spot and futures markets.
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