HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"L 197/20
EN
Official Journal of the European Union
29.7.2011
COMMISSION IMPLEMENTING DECISION
of 28 July 2011
exempting exploration for oil and gas and exploitation of oil in Denmark, excluding Greenland and
the Faroe Islands, from the application of Directive 2004/17/EC of the European Parliament and of
the Council coordinating the procurement procedures of entities operating in the water, energy,
transport and postal services sectors
(notified under document C(2011) 5312)
(Only the Danish text is authentic)
(Text with EEA relevance)
(2011/481/EU)
THE EUROPEAN COMMISSION,
production (oil platforms, pipelines, terminals, etc.).
Furthermore, established Commission practice also
found that ‘the development, production and sales of
Having regard to the Treaty on the Functioning of the European
crude oil’ constitutes ‘one relevant product market’ ( 3 )
Union,
Thus, for the purposes of this Decision, ‘production’
will be taken as including both ‘development’ as well
Having regard to Directive 2004/17/EC of the European
as (first) sale oil.
Parliament and of the Council of 31 March 2004 coordinating
the procurement procedures of entities operating in the water,
energy, transport and postal services sectors ( 1 ), and in particular
(3)
29 companies are participating as licensees or operators
Article 30(4) and (6),
in Danish oil and/or gas concessions, with three
operators being responsible for the current production
Having regard to the request submitted by the Kingdom of
of oil and gas. These are Mrsk Olie og Gas A/S
Denmark by e-mail of 26 May 2011,
(‘Mrsk’, operates 15 fields), DONG E&P A/S (‘Dong’,
operates 3 fields) and Hess Denmark ApS (‘Hess’,
operates 1 field) ( 4 ). Furthermore, Wintershall Nordzee
Whereas:
B.V. and Altinex Oil Denmark A/S (NORECO), have as
operators made discoveries in undeveloped fields with no
present production. For reasons of risk-sharing, the
I. FACTS
normal management of exploration and exploitation
activities is by means of joint venture agreements, in
(1) On
26
May
2011,
the
Commission
received
a
Danish
which one part is appointed as ‘operator’ and where
request pursuant to Article 30(4) of Directive
the other parties to the joint venture obtain a pro-rata
2004/17/EC, transmitted to the Commission by e-mail.
share to any oil and gas produced by the consortium.
The non-operating participants have full control over
(2) The
request
submitted
by
the
Kingdom
of
Denmark
where, when and to whom they sell and they are
concerns the exploration for oil and gas and exploitation
therefore at the same time partners and competitors of
of oil in Denmark, excluding Greenland and the Faroe
the operators.
Islands. In line with previous Commission Merger
Decisions ( 2 ), two distinct activities have been described
in the request, namely:
(4) The
request
is
introduced,
and
thus
endorsed,
by
Konkurrence- og Forbrugerstyrelsen (the Danish
(a) exploration for oil and natural gas; and
Competition and Consumer Authority).
(b) production of oil.
II. LEGAL FRAMEWORK
In accordance with the above-mentioned Commission
(5) Article
30
of
Directive
2004/17/EC
provides
that
Decisions, ‘production’ will for the purposes of this
contracts intended to enable the performance of one of
Decision be taken to include also ‘development’, i.e. the
the activities to which Directive 2004/17/EC applies shall
setting up of adequate infrastructure for future
not be subject to that Directive if, in the Member State in
which it is carried out, the activity is directly exposed to
competition on markets to which access is not restricted.
( 1 ) OJ L 134, 30.4.2004, p. 1.
Direct exposure to competition is assessed on the basis
( 2 ) See in particular Commission Decision 2004/284/EC of
29 September 1999 declaring a concentration compatible with the
common market and the EEA Agreement (Case No IV/M.1383 —
( 3 ) See i.a. Commission Decision of 29 September 1999 declaring a
Exxon/Mobil) and subsequent decisions, inter alia, Commission
concentration to be compatible with the common market and the
Decision of 3 May 2007 declaring a concentration to be compatible
EEA Agreement (Case IV/M.1532 — BP Amoco/Arco), point 14
with the common market (Case No COMP/M.4545 — STATOIL/
(OJ L 18, 19.1.2001, p. 1).
HYDRO) according to Council Regulation (EEC) No 139/2004.
( 4 ) The fields mentioned are the producing ones.

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EN
29.7.2011 Official
Journal
of
the
European
Union L
197/21
of objective criteria, taking account of the specific char
shares of operators on the exploration market has been
acteristics of the sector concerned. Access is deemed to
found to be unsuitable, i.a. because of the large
be unrestricted if the Member State has implemented and
differences between the required levels of investments
applied the relevant EU legislation opening a given sector
that are necessary in different geographic areas. Thus,
or a part of it.
larger investments are needed to explore for oil and
gas in the North Sea than is the case for exploration
in, e.g., the Middle East.
(6) Since
Denmark
has
implemented
and
applied
Directive
94/22/EC of the European Parliament and of the Council
of 30 May 1994 on the conditions for granting and
(12) Two
other
parameters
have
typically
been
applied
to
using authorizations for the prospection, exploration
assess the market shares of economic operators within
and production of hydrocarbons
( 5 ), access to the
this sector, namely, their share of proven reserves and of
market should be deemed not to be restricted in
the expected production ( 7 ).
accordance with the first subparagraph of Article 30(3)
of Directive 2004/17/EC. Direct exposure to competition
in a particular market should be evaluated on the basis of
various criteria, none of which are necessarily decisive.
(13) As
of
31
December
2009,
the
global,
proven
oil
and
gas

reserves amounted to a total of 385,58 billion standard
cubic metres oil equivalent (in the following Sm 3 o.e.)
(7) For
the
purposes
of
assessing
whether
the
relevant
worldwide, according to the available information ( 8 ). As
operators are subject to direct competition in the
of 31 December 2009, the combined, proven oil and gas
markets concerned by this decision, the market share
reserves in Denmark amounted to slightly more than
of the main players and the degree of concentration of
0,19 billion Sm 3 o.e. ( 9 ), or slightly more than 0,05 %.
those markets shall be taken into account. As the
The share thereof of the individual contracting entities
conditions vary for the different activities that are
operating in Denmark is obviously even smaller.
concerned by this Decision, a separate assessment shall
According to the available information, there is a direct
be undertaken for each activity/market.
correlation between proven reserves of oil and gas and
expected future production. Nothing in the available
information therefore indicates that the market share of
(8)
This Decision is without prejudice to the application of
the individual contracting entities operating in Denmark
the rules on competition.
would be substantially different if measured in terms of
expected production rather than in terms of its share of
proven reserves. Given the links between proven reserves
III. ASSESSMENT
and actual production these facts can be taken as an
indication also of the state of competition on the
(9)
Each of the two activities that are the subject of this
market concerned here.
request (exploration for oil and natural gas and
production of oil) have been considered to constitute
separate product markets in the previous Commission
(14) The exploration market is not highly concentrated. Apart
Decisions referred to in recital 2 above. They should
from state owned companies, the market is characterised
therefore be examined separately.
by the presence of three international vertically integrated
private players named the super majors (BP, ExxonMobil
and Shell) as well as a certain number of so-called
Exploration for oil and natural gas
‘majors’. These elements are an indication of direct
exposure to competition.
(10) According
to
established
Commission
practice
( 6 ), explo
ration for oil and natural gas constitutes one relevant
product market, since it is not possible from the outset
to determine whether the exploration will result in
Production of oil
finding oil or natural gas. It has furthermore been estab
lished through the same, long-standing Commission
(15) According
to
established
Commission
practice
( 10 ), devel
practice that the geographical scope of that market is
opment and production of (crude) oil is a separate
worldwide. Given that there is no indication that the
product market whose geographic scope is worldwide.
definition would be different in this case, it will be main
Given that there is no indication that the definition
tained for the purposes of the present decision.
would be different in this case, it will be maintained

for the purposes of the present decision. According to
the available information ( 11 ), the total, daily production
(11) The
market
shares
of
operators
active
in
exploration
can
of oil worldwide amounted to 79,948 million barrels in
be measured by reference to three variables: the capital
expenditure, proven reserves and expected production.
( 7 ) See in particular the above-mentioned Exxon/Mobil Decision
The use of capital expenditure to measure the market
(paragraphs 25 and 27).
( 8 ) See point 5.2.1 of the application and the sources quoted there, in
particular the BP Statistical Review of World Energy, June 2010,
( 5 ) OJ L 164, 30.6.1994, p. 3 and OJ L 79, 29.3.1996, p. 30.
annexed to it; in the following referred to as ‘BP Statistics’.
( 6 ) See in particular the above-mentioned Exxon/Mobil Decision and,
( 9 ) That is, 0,06 trillion m 3 gas, equal to 0,0594 billion Sm 3 o.e., and
more recently, Commission Decision of 19 November 2007
0,9 thousand million barrels oil equal 0,135 billion Sm 3 , giving a
declaring a concentration to be compatible with the common
total of 0,1944 billion Sm 3 .
market (Case No COMP/M.4934 — KAZMUNAIGAZ/ROMPETROL)
( 10 ) See footnote 6.
according to Council Regulation (EEC) No 139/2004.
( 11 ) See page 8 of BP Statistics.

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L 197/22
EN
Official Journal of the European Union
29.7.2011
2009. That same year, a total of 0,265 million barrels
recalled that procurement contracts covering several
per day were produced in Denmark, giving it a market
activities shall be treated in accordance with Article 9
share of 0,33 %. Looking at the 2009 share of the indi
of Directive 2004/17/EC. This means that, when a
vidual contracting entities operating in Denmark, the
contracting entity is engaged in ‘mixed’ procurement, to
situation is as follows: with a worldwide production of
support the performance of both activities (i.e. activities
381 thousand ( 12 ) barrels per day, Mrsk has a share of
exempted from the application of Directive 2004/17/EC
0,5 % of oil production worldwide; Dong’s worldwide,
and activities not exempted), regard shall be had to the
daily production of 23 thousand barrels of oil gives it
activities for which the contract is principally intended. In
a market share amounting to 0,029 % of the global oil
the event of such mixed procurement, where the purpose
production; finally, Hess’ total production of 11 575
is principally to support the production of gas, the
barrels per day gives it a share of 0,014 % of oil
provision of Directive 2004/17/EC shall apply. If it is
production worldwide.
objectively impossible to determine for which activity
the contract is principally intended, the contract shall
be awarded in accordance with the rules referred to in
(16) For the purposes of this analysis, it is important to have
paragraphs 2 and 3 of Article 9 of Directive 2004/17/EC.
regard to the degree of concentration in the relevant
market as a whole. In this view, the Commission notes
that the market for crude oil production is characterised
(20) This Decision is based on the legal and factual situation
by the presence of big state owned companies and three
as of May 2011 to July 2011 as it appears from the
international vertically integrated private players (the so-
information submitted by the Danish authorities. It
called super majors: BP, ExxonMobil and Shell whose
may be revised, should significant changes in the legal
respective parts of oil production in 2009 amounted to
or factual situation mean that the conditions for the
3,2 %, 3,0 % and 2 %) as well as a certain number of so-
applicability of Article 30(1) of Directive 2004/17/EC
called ‘majors’ ( 13 ). These factors suggest that the market
are no longer met.
comprises a number of players between whom effective
competition can be presumed.
(21) The
measures provided for in this Decision are in
accordance with the opinion of the Advisory
IV. CONCLUSIONS
Committee for Public Contracts,
(17) In
view
of
the
factors
examined
in
recitals
5
to
16,
the
condition of direct exposure to competition laid down in
HAS ADOPTED THIS DECISION:
Article 30(1) of Directive 2004/17/EC should be
considered to be met in the Denmark, excluding
Greenland and the Faroe Islands, in respect of the
Article 1
following services:
Directive 2004/17/EC shall not apply to contracts awarded by
contracting entities and intended to enable the following
(a) exploration for oil and natural gas; and
services to be carried out in Denmark, excluding Greenland
and the Faroe Islands:
(b) production of oil.
(a) exploration for oil and natural gas; and
(18) Since the condition of unrestricted access to the market
is deemed to be met, Directive 2004/17/EC should not
(b) production of oil.
apply when contracting entities award contracts intended
to enable the services listed in points (a) to (b) of recital
17 to be carried out in Denmark, excluding Greenland
Article 2
and the Faroe Islands, nor when design contests are
organised for the pursuit of such an activity in that
This Decision is addressed to the Kingdom of Denmark.
geographic area.
Done at Brussels, 28 July 2011.
(19) Generally
exploration
fields
can
produce
both
oil
and
gas, in different proportions. The production of gas is
For the Commission
not subject to this exemption request, and the provisions
of Directive 2004/17/EC continue to apply to this sector.
Michel BARNIER
In situations where a field produces both oil and gas, it is
Member of the Commission
( 12 ) Of which 90 thousand barrels are produced daily in Denmark.
( 13 ) E.g. Total, Chevron, Eni and Conoco, whose market shares are
smaller than those of the super majors.

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