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22.1.2013 Official
Journal
of
the
European
Union L
18/19
COMMISSION IMPLEMENTING DECISION
of 18 January 2013
exempting exploration for oil and gas in Cyprus 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(2013) 60)
(Only the Greek text is authentic)
(Text with EEA relevance)
(2013/39/EU)
THE EUROPEAN COMMISSION,
(4) Cyprus
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 using
Having regard to the Treaty on the Functioning of the European
authorizations for the prospection, exploration and
Union,
production of hydrocarbons ( 2 ), access to the market
should therefore be deemed not to be restricted in
accordance with the first subparagraph of Article 30(3)
Having regard to Directive 2004/17/EC of the European
of Directive 2004/17/EC. Direct exposure to competition
Parliament and of the Council of 31 March 2004 coordinating
in a particular market should be evaluated on the basis of
the procurement procedures of entities operating in the water,
various criteria, none of which are necessarily decisive.
energy, transport and postal services sectors ( 1 ), and in particular
Article 30(4) and (6),
(5) For
the
purposes
of
assessing
whether
the
relevant
operators are subject to direct competition in the
Having regard to the request submitted by Noble Energy Inter
markets concerned by this decision, the market share
national Ltd by e-mail of 17 August 2012,
of the main players and the degree of concentration of
those markets have to be taken into account.
Whereas:
(6)
This Decision is without prejudice to the application of
the rules on competition.
I. FACTS
(1) On
17
August
2012,
the
Commission
received
a
request
pursuant to Article 30(4) of Directive 2004/17/EC, trans
III. ASSESSMENT
mitted to the Commission by e-mail.
(7) According
to
established
Commission
practice
( 3 ), explo
ration for oil and natural gas constitutes one relevant
product market, since it is not possible from the outset
(2) The
request
submitted
by
Noble
Energy
International
Ltd
to determine whether the exploration will result in
concerns the exploration for oil and gas in Cyprus. In
finding oil or natural gas. It has furthermore been estab
accordance with the first subparagraph of Article 30(5)
lished through the same, long-standing Commission
of Directive 2004/17/EC, the Commission informed
practice that the geographical scope of that market is
Cyprus thereof by letter of 26 September 2012 and
worldwide. Given that there is no indication that the
requested additional information. Cyprus replied on
definition of the geographical scope of the market
24 October 2012.
would be different in this case, it will be maintained
for the purposes of this decision.
II. LEGAL FRAMEWORK
(3) Article
30
of
Directive
2004/17/EC
provides
that (8) The
market
shares
of
operators
active
in
exploration
can
contracts intended to enable the performance of one of
be measured by reference to three variables: the capital
the activities to which Directive 2004/17/EC applies are
expenditure, proven reserves and expected production.
not subject to that Directive if, in the Member State in
The use of capital expenditure to measure the market
which it is carried out, the activity is directly exposed to
shares of operators on the exploration market has been
competition on markets to which access is not restricted.
found to be unsuitable, inter alia, because of the large
Direct exposure to competition is assessed on the basis
differences between the required levels of investments
of objective criteria, taking account of the specific char
that are necessary in different geographic areas.
acteristics of the sector concerned. Access is deemed to
be unrestricted if the Member State has implemented and
( 2 ) OJ L 164, 30.6.1994, p. 3.
applied the relevant Union legislation opening a given
( 3 ) See in particular Commission Decision of 19 November 2007
sector or a part of it.
declaring a concentration to be compatible with the common
market (Case No COMP/M.4934 — KAZMUNAIGAZ/ROMPETROL)
according to Council Regulation (EC) No 139/2004 (OJ L 24,
( 1 ) OJ L 134, 30.4.2004, p. 1.
29.1.2004, p. 1).

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L 18/20
EN
Official Journal of the European Union
22.1.2013
(9) The
two
other
parameters
have
typically
been
applied
to (14) Since the condition of unrestricted access to the market
assess the market shares of economic operators within
is deemed to be met, Directive 2004/17/EC should not
this sector, namely, their share of proven reserves and of
apply when contracting entities award contracts intended
the expected production ( 1 ).
to enable the exploration for oil and natural gas to be
carried out in Cyprus, nor when design contests are
(10) There
is
only
one
economic
operator
active
in
the
market
organised for the pursuit of such an activity in that
of oil and gas exploration in Cyprus, namely the
geographic area.
applicant, which obtained the first licence issued in
2008 following the completion of the first licensing
round in Cyprus. However, all companies engaging in
(15) This Decision is based on the legal and factual situation
oil and gas exploration in the worldwide market are
as of August to October 2012 as it appears from the
potential competitors as they have had access to both
information submitted by the applicant and Cyprus. It
this first and to the second licensing round which was
may be revised, should significant changes in the legal
launched in February 2012. According to Cyprus, 33
or factual situation mean that the conditions for the
applications have been submitted, by 15 undertakings
applicability of Article 30(1) of Directive 2004/17/EC
or consortia, to this second round.
are no longer met.
(11) As
of
31
December
2011,
the
global,
proven
oil
and
gas
reserves amounted to a total of 481,4 billion standard
(16) The
measures provided for in this Decision are in
cubic metres oil equivalent (hereafter ‘Sm
accordance with the opinion of the Advisory

3 o. e.’)
worldwide, according to the available information (
Committee for Public Contracts,

2 ).
As of 31 December 2011, Cyprus has only one
discovery of hydrocarbons, that reported by the
HAS ADOPTED THIS DECISION:
applicant, with natural gas reserves estimated at almost
200 million Sm 3 o. e. ( 3 ). These reserves, if proven would
be equivalent to slightly more than 0,09 % of worldwide
Article 1
proven reserves of gas and much less as a share of total
oil and gas and would raise the applicant’s share of
Directive 2004/17/EC shall not apply to contracts awarded by
worldwide proven natural gas reserves from 0,0416 %
contracting entities and intended to enable the exploration for
to 0,1367 %.
oil and natural gas to be carried out in Cyprus.
(12) The
exploration
market
is
not
highly
concentrated.
Apart
from State-owned companies, the market is characterised
Article 2
by the presence of three international vertically integrated
This Decision is addressed to the Republic of Cyprus.
private players named the super majors (BP, ExxonMobil
and Shell) as well as a certain number of so-called
‘majors’. These elements are an indication of direct
exposure to competition.
Done at Brussels, 18 January 2013.
IV. CONCLUSIONS
(13) In view of the factors examined, the condition of direct
For the Commission
exposure to competition laid down in Article 30(1) of
Directive 2004/17/EC should be considered to be met in
Michel BARNIER
Cyprus.
Member of the Commission
( 1 ) See in particular points 25 and 27 of 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 — Exxon/Mobil) (OJ L 103, 7.4.2004, p. 1),
and subsequent decisions, inter alia, Commission Decision of 3 May
2007 declaring a concentration to be compatible with the common
market (Case No COMP/M.4545 — STATOIL/HYDRO) according to
Regulation (EC) No 139/2004.
( 2 ) See point 5.2.1 of the application and the sources quoted there, in
particular the BP Statistical Review of World Energy, June 2012; in
the following referred to as ‘BP Statistics’.
( 3 ) The exploratory drilling results were of 5 to 8 trillion cubic feet,
with a gross mean of 7 trillion cubic feet, equivalent to 0,19824
trillion m 3 gas.

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