DEA Opens 7th Licensing Round, Invites Companies to Submit Applications

The DEA is opening the 7th Licensing Round for interested oil and gas companies, who are invited to submit applications to the DEA for new North Sea oil and gas licences.

The application period ends on 20 October 2014. The areas offered for licensing are located in the Central Graben, where the majority of Danish fields have so far been discovered, and in the areas further to the east, where oil discoveries were made in the 6th Licensing Round.

The DEA’s assessments indicate that large quantities of oil and gas still remain to be discovered in the Danish areas. The new licensing round will contribute to upholding the continuity of exploration activity in the years to come and thus preserve and further develop the knowledge and expertise the oil companies have accumulated concerning the Danish subsoil.

On 11 April 2014 the Climate, Energy and Building Committee of the Danish Parliament granted its approval of the statement from the Minister for Climate, Energy and Building regarding the upcoming 7th Licensing Round for areas for oil and gas exploration and production, including approval of the terms applicable to the licences to be awarded.

“I am pleased to note that the new licensing round and the terms applicable to the round received the support of a large majority on the Climate, Energy and Building Committee. I hope that many oil and gas companies share the opinion that the Danish area remains attractive and that they will take up the invitation to apply for new licences. This will enable us to maintain a high activity level in Denmark and open up opportunities for making new discoveries while utilizing the existing infrastructure in the North Sea as best possible. This can help generate economic growth and new revenue for Danish society,” says the Minister for Climate, Energy and Building, Rasmus Helveg Petersen.

On behalf of the Danish state, Nordsøfonden will hold a 20 % interest in the new licences, and the oil companies will hold an 80 % interest. The proposed financial terms for the 7th Licensing Round are identical to those applicable in the 6th Licensing Round. They have also applied to Dansk Undergrunds Consortium (DUC) since 1 January 2004 in accordance with the North Sea Agreement made between the Danish Government and A.P. Møller – Mærsk. The specific areas and licence terms will be published in the Danish Official Gazette and at the DEA’s website, and subsequently in the EU Official Journal.

Environmental assessment of the licensing round

A strategic environmental assessment was performed as part of the preparations for the new licensing round. The environmental assessment has been submitted for public consultation among public authorities in Denmark and the other North Sea countries.

During the consultation period, a total of 839 consultation responses were received, 829 of them from Germany.

The overall results and review of the consultation responses were set out in a summary report published in August 2013. Following publication of the report, the Energy Board of Appeal received about 220 complaints from German citizens, NGOs and municipalities, among others. On 21 February 2014 the Energy Board of Appeal upheld the DEA’s environmental assessment, thus allowing the 7th Licensing Round to proceed.

Previous and future licensing rounds

Since 1984 six licensing rounds have been held in Denmark. The first three licensing rounds comprised all unlicensed areas in Danish territory. The three most recent licensing rounds – the 4th Round in 1995, the 5th in 1998 and the 6th in 2006 – comprised the Central Graben with adjoining areas only, i.e. the area west of 6º15’ eastern longitude.

The Danish part of the North Sea is a so-called mature area with a well-developed infrastructure, but still holds exploration potential. To allow the existing infrastructure to be used in connection with the development of future discoveries and to give companies more predictability about when they can apply for unlicensed areas, the licensing rounds following the 7th Round will be held at about one-year intervals, i.e. one year after completion of the latest licensing round.

Press Release, April 24, 2014; Image: DEA