The State grants licences and participates with a 20 pct. share
The Danish subsoil contains a spectrum of resources, including oil and gas. The Minister for Energy, Utilities and Climate grants licences for the exploration and production of oil and gas in Denmark. A licence grants one or more companies the right to explore for and produce hydrocarbons in a defined area.
The Danish state holds a 20 per cent share of all new licences. Nordsøfonden represents the Danish state in all licences. DONG was the state’s representative up to and including 2004.
Danish licence areas
Licences are awarded according to two different procedures, depending on where in Denmark the area is located. Licensing rounds are held for the most attractive area in the North Sea, which is situated west of 6° 15' eastern longitude. In the rest of Denmark, licences are granted according to the Open Door procedure .
Activities comprised by a licence
Generally, exploration is carried on for a term of six years under a new licence. During this period, the companies are to carry out the agreed work programmes, e.g. performing seismic surveys and drilling exploration wells.
The exploration term may be extended for two years at a time, but generally may not exceed ten years in total. An accumulation is declared commercial if sufficient volumes of oil and gas are discovered. If the companies decide to proceed with development activities, they have a right to a licence for the production of oil and gas for a period of up to 30 years.
Information and rules
The use of Danish subsoil resources is regulated by the Danish Subsoil Act, among other rules and regulations.