A Guide to Hydrocarbon Licences in Denmark, Exploration and ...

A Guide to Hydrocarbon
Licences in Denmark
Exploration and Drilling Activities
September 11

Contents
Contents ...................................................................................................................... 1
Colophon .................................................................................................................... 2
Preface ......................................................................................................................... 3
1. Government Administration in the Oil and Gas Sector ........................... 4
1.1 The Danish Energy Agency (DEA) ................................................................................................................ 4
1.2 Other Relevant Authorities .............................................................................................................................. 6
2. General Regulations, etc., for Oil and Gas Activities ............................. 10
2.1 Important Legislation, etc. ............................................................................................................................. 10
2.2 Establishment of business ............................................................................................................................ 12
2.3 Guidelines for Insurance of Exploration Activities (Model Licence Section 30) .................................... 12
2.4 Reimbursement of Public Expenditure ........................................................................................................ 13
2.5 Financial Information ..................................................................................................................................... 14
2.6 Danish/English Language ............................................................................................................................. 14
3. Pre-investigations (seismic surveys, site surveys, etc.) ....................... 15
4. Drilling Operations ........................................................................................... 16
4.1 Exploration and Appraisal Drilling Operations ........................................................................................... 16
4.2 Production Drilling Operations ..................................................................................................................... 16
4.3 Submission of Geological Information ........................................................................................................ 16
4.4 DEA Contact System for Drilling Operations ............................................................................................. 17
4.5 DEA Press Releases ..................................................................................................................................... 17
5. Offshore Emergency Response Plans ........................................................ 18
5.1. Regulations ..................................................................................................................................................... 18
5.2. Guidelines ....................................................................................................................................................... 18
5.3 The Authorities’ Emergency Response Committee .................................................................................. 19
5.4 Hydrogen Sulphide Emergency Response ................................................................................................ 20
6. Environmental impact assessments (EIAs), consequence
assessments etc. .................................................................................................... 21
6.1. Regulations ..................................................................................................................................................... 21
6.2. EIA .................................................................................................................................................................... 21
6.3. Protection of international nature conservation areas .............................................................................. 21
6.4. Protection of certain species ........................................................................................................................ 22
6.5. Other ................................................................................................................................................................ 22
6.6. Location of international nature protection areas ...................................................................................... 22

Colophon
Title: Guide to Hydrocarbon Licences in Denmark – Exploration and Drilling,
September 2011
Publisher: Danish Energy Agency
Editor: Steffen B. Olsen, the Danish Energy Agency
Creator affiliation: Danish Energy Agency
Contributors: Danish Energy Agency (Layout), Rita Rosenberg Translation,
GlobalDenmark Translations and the Danish Energy Agency (Translation)
Language: English
Date: 2011-09-30
Format: pdf
Danish Energy Agency
Amaliegade 44
DK-1256 Copenhagen K
Denmark
Telephone (+45) 33 92 67 00
Fax (+45) 33 11 47 43
E-mail ens@ens.dk
Homepage www.ens.dk
2

Preface
The purpose of this guide is to give an overview of the most important regulations
and procedures to be followed when carrying out hydrocarbon activities in
Denmark.
The guide has been compiled mainly with activities in the traditional exploration
areas in the North Sea in mind.
The guide does not include guidance on exploration projects onshore where
regulations in many ways are different and other authorities are involved.
The Danish Energy Agency hopes that the guide will provide a better
understanding of the Danish oil and gas sector. It is our hope that the guide will be
useful not only for present licensees, but also for companies interested in starting
up oil and gas activities in Denmark.
In case the contents of the guide should give rise to any questions, please do not
hesitate to contact us for further information.
The guide is only available in this pdf version and not as a printed publication.
3

1. Government Administration in the Oil and Gas
Sector
1.1 The Danish Energy Agency (DEA)
The Danish Energy Agency is a government body under the Ministry of Climate
and Energy and was established by law in 1976. The DEA assists the Minister for
Climate and Energy and other government authorities in energy matters. It is the
responsibility of the DEA to follow and evaluate the Danish and international
progress in the fields of energy production, supply and research. The DEA
administers energy legislation for power and heating supply, renewable energy,
and exploration for and production of oil and natural gas.
Matters relating to exploration for and production of oil and gas are dealt with by
the Energy Resources division.
1.1.1 The Functions of the DEA in the Oil and Gas Sector
The DEA is authorised to exercise all the regulations and the administration of
hydrocarbon activities on the Danish continental shelf. However, decisions made
by the DEA can be referred to the Minister for Climate and Energy.
The DEA administers and supervises exploration for and production of oil and gas,
salt production, geothermal energy and storage according to the Subsoil Act. In
addition, the DEA administers a number of other Acts: the Offshore Safety Act, the
Pipelines Act and the Act on the Continental Shelf. These Acts deal with major
hazards as well as occupational health and safety in connection with offshore oil
and gas activities and the utilisation of onshore pipelines from the oil and gas
fields in the North Sea. The DEA also draws up proposals for rules and regulations
within this area. Health and safety in onshore activities are covered by the Working
4

Environment Act and is administered by the National Working Environment
Authority (Arbejdstilsynet).
The DEA, likewise, prepares the resource and financial forecasts for oil and gas
production and is responsible for preparing and implementing licensing rounds and
issuing licences. The DEA also approves development plans and production
profiles for the oil and gas fields.
The DEA cooperates with corresponding authorities in the other North Sea
countries and participates in regulatory work within the EU concerning oil and gas
activities.
Administration and supervision of oil and gas related matters are taken care of by
the Energy Resources Division of the DEA. Responsibilities for exploitation of
resources and HSE (health, safety and environment) are divided between two
separate units.
Thus, the DEA approves pre-investigations (seismic surveys etc.) and drilling
operations and may approve deviations from work programmes. In addition the
DEA approves the design of production installations and pipelines and grants
permits for operation of these installations as well as mobile offshore installations
(drilling rigs, lay barges, etc.) in co-operation with the Danish Maritime Authority.
Moreover, the DEA supervises compliance with statutory orders etc. regarding
safety and health aspects of operation and design of offshore installations. The
DEA also supervises that regulations and licence conditions are fulfilled (Subsoil
Act sections 25-26). In this connection the DEA participates in operating and
technical committee meetings as an observer, cf. sections 18-19 of the Model
Licence.
Finally, the DEA issues publications concerning oil and gas activities in Denmark
i.e. reserve estimates, production forecasts and monthly production surveys.
These topics are included in the DEA’s annual report on oil and gas activities in
Denmark.
1.1.2 Contacting the Danish Energy Agency
By Mail: The Danish Energy Agency
Amaliegade 44
DK-1256 Copenhagen K
By Telephone: (+45) 33 92 67 00 (Mo-Th 8:30-16:00, Fr 8:30-15:30, Local time)
Contact system for drilling operations (outside office hours):
(+45) 33 92 79 18. A recorded message will inform about the DEA
person on duty.
By Facsimile: (+45) 33 11 47 43
E-mail: ens@ens.dk (General)
indvindingsekr@ens.dk (Energy Resources Division)
5

Contact Persons for Specific Activities:
Seismic Surveys/Site Surveys:
Marina Skriver (ms@ens.dk) / Steffen Bjørn Olsen (sbo@ens.dk)
Drilling Operations and Programmes:
Søren Frederiksen (sf@ens.dk) / Rolf Kallesøe (rk@ens.dk)
Safety and Approval of Mobile Offshore Units:
Gert Neuchs Christensen (gnc@ens.dk) / Mohamed El Halimi (mha@ens.dk)
Emergency Response Plans for Offshore Operations:
Gert Neuchs Christensen (gnc@ens.dk)
Legislation:
Lene Dalsgaard (ld@ens.dk) / Ann Christin Lia (acl@ens.dk) (resources)
Hans Erik Christensen (hec@ens.dk) (health and safety)
Economic Issues:
Jens Skov-Spilling (jsk@ens.dk)
Insurance:
Jens-Birger Christophersen (jbc@ens.dk)
Environmental Impact Assessments and nature conservation:
Katja Scharmann (ksc@ens.dk) / Kirsten Lundt Erichsen (kle@ens.dk) /
Ulla Elm-Larsen (ue@ens.dk)
1.2 Other Relevant Authorities
Apart from the Danish Energy Agency functions in the oil and gas sector, the
activities of the licensees are subject to approval from other Danish authorities. In
the following a list of these authorities is presented together with a brief description
of the main function of the authority in the oil and gas sector. Especially the
environmental regulations and the approval procedures for oil spill contingency
plans should be considered.
1.2.1 Other Authorities and their Main Functions in the Oil and Gas
Sector
De Nationale Geologiske Undersøgelser for Danmark og Grønland (The
Geological Survey of Denmark and Greenland)
Homepage: www.geus.dk
The Geological Survey collects samples and information from subsoil activities
pursuant to section 34 of the Subsoil Act. Furthermore, the Geological Survey
handles the access to and sales of released well information and seismic data.
6

Arbejdstilsynet (The National Working Environment Authority)
Website: www.arbejdstilsynet.dk
Supervision of health and safety on onshore activities according to the Working
Environment Act.
Farvandsvæsenet (The Royal Danish Administration of Navigation and
Hydrography)
Website: www.fomfrv.dk
Receives notification from the DEA about seismic investigations and site surveys
offshore and about the location of mobile offshore units.
Fiskeridirektoratet (The Danish Directorate of Fisheries)
Website: www.fiskeridirektoratet.dk
Receives notification from the DEA about seismic investigations and site surveys
offshore.
Forsvarsministeriet (The Danish Ministry of Defence)
Website: www.forsvarsministeriet.dk
Receives notification from the DEA about seismic investigations and site surveys
offshore.
IT- og Telestyrelsen (The National IT and Telecom Agency)
Website: http://en.itst.dk/
Kystdirektoratet (Danish Coastal Authority)
Website: www.kyst.dk
Grants permits for establisment of certain pipelines, for telecommunication cables
and for certain surveys in the territorial waters.
Miljøstyrelsen (The Danish Environmental Protection Agency)
Website: www.mst.dk
Discharge to the sea from offshore installations. Use of OSPAR-listed chemicals
on offshore installations. Emergency plans in case of spills from the offshore
installations.
7

Naturstyrelsen (Nature Agency)
Website: www.nst.dk
Protection of nature and granting of permits for exploration and exploitation of raw
materials in the seabed. Receives notification from the DEA about seismic surveys
and site surveys offshore.
Nordsøfonden (The Danish North Sea Fund)
Website: www.nordsoeen.dk
The Danish North Sea Fund was established in 2005 to exercise the state
participation in new licences.
SKAT, Store selskaber
Website: www.skat.dk
SKAT is the Danish government body responsible for collecting taxes and duties.
Statens Institut for Strålebeskyttelse (The National Institute of Radiation
Protection)
Website: www.sis.dk (only in Danish)
Grants permits for use and storage of radioactive materials and ionising radiation
sources.
Sundhedsstyrelsen (The National Board of Health)
Website: www.sundhedsstyrelsen.dk
Education of medics. Design of the sick bay and medical equipment on offshore
installations.
Søfartsstyrelsen (The Danish Maritime Authority)
Website: www.dma.dk
Construction, strength, buoyancy, maritime design and equipment on mobile
offshore drilling units and other mobile offshore units.
Life saving appliances and their launching equipment on production installations.
Diving operations including diving equipment and professional diving operations.
Søværnets Operative Kommando (Admiral Danish Fleet)
Telephone: (+45) 89 43 30 99 (24 hour service)
Website in English: http://forsvaret.dk/sok/eng/Pages/default.aspx
Responsible for rescue operations. Alarm centre in case of emergency situations
offshore.
8

Trafikstyrelsen (Danish Transport Authority)
Website: www.trafikstyrelsen.dk
Approval of helidecks.
9

2. General Regulations, etc., for Oil and Gas
Activities
2.1 Important Legislation, etc.
Important legislation governing Danish oil and gas activities includes the following
acts, orders, guidelines, etc. Please contact the DEA for information on possible
subsequent updates.
Act No. 293 of 10 June 1981 as revised by Consolidated Act No. 960 of 13
September 2011 on the Use of the Danish Subsoil (the Subsoil Act).
By Act No. 541 of 30 June 2011 the Subsoil Act was amended to include
changes due to the implementation of Directive 2009/31/EC of the European
Parliament and the Council of 23 April 2009 on geological storage of carbon
dioxide, a revision of article 5 concerning prioritizing the use of the subsoil, a
revision of article 16 regarding principles for third party access to existing
infrastructure, and introduction of new articles on the procedure for issuance of
licenses for exploration for and recovery of geothermal energy.
The Subsoil Act lays down the basic framework for oil and gas exploration and
production. The Act is formulated as a ‘general terms act’ allowing for
adaptations and more detailed regulations. It regulates exploitation and
recovery activities in the Danish subsoil and on the Danish Continental Shelf
concerning raw materials, and specifically hydrocarbons. The Act covers:
Prospecting, exploration for and recovery of raw materials, and hydrocarbons
in particular, government rights for purchasing liquid hydrocarbons, other use
of the subsoil, supervision and other provisions.
The Subsoil Act implements Directive 94/22/EC of the European Parliament
and of the Council of 30 May 1994 on the conditions for granting and using
authorizations for the prospection, exploration and production of hydrocarbons,
parts of Council Directive 85/337/EEC of 27 June 1985 on assessments of the
environmental consequences, parts of Council Directive 2009/147/EC of 20
November 2009 on the conservation of wild birds, parts of Council Directive
92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild
fauna and flora and parts of Directive 2009/31/EC of the European Parliament
and the Council of 23 April 2009 on geological storage of carbon dioxide.
• Directive 94/22/EC of the European Parliament and of the Council of 30 May
1994 on the Conditions for Granting and Using Authorizations for the
Prospection, Exploration and Production of Hydrocarbons.
• Act No. 1424 of 21 December 2005 on Safety, etc. on Offshore Installations for
Exploration, Extraction and Transport of Hydrocarbons (Offshore Safety Act).
The Offshore Safety Act has later been amended by Act No. 107 of 7 February
2007, section 32 in Act No. 512 of 6 June 2007 and section 1 in Act No. 1400
of 27 December 2008.
An un-authorized compilation of the Offshore Safety Act with the above
amendments is included. Subsequent to this compilation the Offshore Safety
Act has been amended by Act No. 287 of 15 April 2009 and by Act No. 467 of
18 June 2011. Under the Offshore Safety Act a number of regulations are
10

issued. They are updated regularly and can be found on the DEA website. On
the webpage those regulations that are translated into English are marked.
Act No. 291 of 10 June 1981, as revised by Consolidated Act No. 957 of 9
September ber 2011 on the Establishment and Use of a Pipeline for Transport
of Crude Oil and Condensate.
• Consolidated Act No. 412 of 3 May 2006 on Taxation of Income Originating
from Production of Hydrocarbons in Denmark (the Hydrocarbon Tax Act).
Consolidated Act No. 413 of 3 May 2006 on the Assessment and Collection of
Taxes in connection with Production of Hydrocarbons (Act on Assessment and
Collection).
Both the Hydrocarbon Tax Act and the Act on Assessment and Collection have
subsequently been amended. Detailed information on this legislation and the
amendments are available from the Ministry of Taxation (www.skm.dk).
The Ministry of Taxation’s website contains an unofficial English translation of a
compilation of the Hydrocarbon Tax Act from 2003 and of the bill from 2003 to
amend the Hydrocarbon Tax Act and the Act on Assessment and Collection,
etc. of Taxes in connection with Hydrocarbon Production.
• Executive Order No. 1032 of 23 August 2007 on Reimbursement of Expenses
related to the Authorities’ Administration in connection with Hydrocarbon
Activities, etc.
• Executive Order No. 56 of February 4, 2002 on Submission of Samples and
other Information about the Danish Subsoil.
• Executive Order No. 419 of 2 June 2005 on the Payment of Fees connected
with Certain Licences Issued pursuant to the Act on the Use of the Danish
Subsoil.
• Executive Order No. 684 of 23 June 2011 on EIA, consequence assessment
concerning international nature conservation areas and protection of certain
species in connection with projects about offshore exploration for and
production of hydrocarbons, storage in the subsoil, pipelines etc.
• Executive Order No. 657 of 30 December 1985 on Safety Zones and Zones for
the Observance of Order and the Prevention of Danger.
In addition to the above acts and orders general regulations and guidelines for oil
and gas activities are set out. The most important are:
• Model Licence – 6th Licensing Round.
• Model Licence – Open Door Procedure.
• Model Joint Operating Agreement and Accounting Procedure (JOA) .
The content of the JOA and Accounting Procedure is - apart from stipulations
to secure the rights of the State Participant - negotiable between the parties to
a licence. The JOA is subject to approval by the DEA, ref. section 18 of the
licence.
•
Conditions regarding Pre-investigations Offshore
11

• National Environmental Research Institute - Best practice for pre-investigations
offshore
• Conditions Regarding Pre-investigations Onshore (available on request).
• Guidelines for Drilling, Exploration.
The translations of the Danish acts, orders, general regulations and guidelines are
unofficial. In case of discrepancy the original Danish text shall prevail.
2.2 Establishment of business
In connection with obtaining a licence for exploration for and production of
hydrocarbons companies participating in the licence must have registered with the
taxation authorities in Denmark and provide the necessary information for that
purpose. Companies can e.g. establish a Danish subsidiary or register a business
address in Denmark. The address can be at a lawyer or an accounting firm in
Denmark. For further information please contact the taxation authorities at
kulbrinte@skat.dk.
2.3 Guidelines for Insurance of Exploration Activities
(Model Licence Section 30)
2.3.1 Introduction
These guidelines apply to insurance of all activities in licensing rounds and the
Open Door Procedure.
As provided in section 30, subsection (1), of the model licence, the Licensee's
liability for damages under the Subsoil Act shall be covered by insurance.
Section 35 of the Subsoil Act states that the Licensee is strictly liable for damages
caused by any third party when performing activities in connection with the licence.
The liability for damages includes personal injury as well as injury to property. It is
assumed that the Licensee's strict liability also includes persons who usually are
not regarded as third party e.g. the Licensee's employees and contracting parties.
2.3.2 Insurance Coverage
The Licensee's insurances shall cover the following issues:
• Injury to the Licensee's own employees.
• Injury to any third party (including damage to property of a third party).
• Pollution damages caused by the activities.
The coverage for damages shall include all insurances which the Licensee is
obliged to take out under Danish law i.e. work injury, motor vehicles, aircrafts and
insurance of ships' oil pollution liability. In addition the coverage for damages shall
include insurances otherwise required in accordance with section 30 of the
12

Licence (cf. section 35 of the Subsoil Act) in order to cover the general third party
liability.
According to section 30, subsection (2), of the Licence, the DEA may require that
additional insurance coverage must be taken out in case the DEA does not
consider the insurance coverage to be sufficiently extensive.
The insurance coverage must provide a reasonable coverage, based on the risks
involved in the operation of the enterprise and the premiums to be paid.
2.3.3 Insurance Declaration
Pursuant to section 30 of the Model Licence the DEA has introduced an Operators
Insurance Declaration form. With this form the operator declares to have received
insurance certificates or declaration of self insurance from all co-licensees
(including the operators own certificate) and that the insurances satisfy a number
of conditions.
The form must be submitted to the DEA not later than 1 March of the covered
year. If it is not possible to submit the form by this date, the DEA must be informed
in due time, and a new arrangement made.
The Operators Insurance Declaration form is attached to this guide and is
available also as an Excel-file.
2.4 Reimbursement of Public Expenditure
2.4.1 Introduction
Licensees must reimburse the DEA for the incurred expenses in connection with
the administration of the hydrocarbon activities of the licensees, according to the
Subsoil Act, section 25. Similar provisions are included in the Offshore Safety Act,
ref. section 65 of the act.
The specific rules are listed in Order No. 1032 of 23 August 2007 on
Reimbursement of Expenses related to the Authorities’ Administration in
connection with Hydrocarbon Activities, etc.
2.4.2 Procedure
Reimbursement of the DEA expenditure for administration is based on the
following procedure:
The licensees encompassed by the Subsoil Act shall reimburse public authority
expenditure for administrative case handling, including supervision.
Public authority expenditure for administrative case handling are calculated on the
basis of records enumerating the number of hours on performing each individual
task.
13

2.4.3 Collection of the Reimbursement
Normally the reimbursement will take place every three months. Upon the expiry of
each quarter the DEA submits interim bills for the expenditure incurred in
connection with the case handling.
After the end of every financial year, the DEA draws up a statement of the amount
payable for the year in question. The final statement shall be submitted to the
party liable to pay no later than four months after the end of the financial year.
2.5 Financial Information
Pursuant to section 21 of the Model Licence the licensee shall submit annual
financial statements to the DEA. The DEA has issued detailed rules for submission
of this information.
According to these rules the Licensee shall, on an annual basis, submit financial
statements and/or disclosure forms to the DEA concerning expenditures and
expected activities.
The rules and the disclosure forms for the Exploration, Development and
Production Phases are attached.
The forms can be downloaded in Excel format from the DEA’s website.
2.6 Danish/English Language
Licences, approvals, permits etc., from the DEA will as a principal rule be issued in
Danish.
Unofficial English translations of regulations etc. may be issued to the extent
possible.
The Danish text is, however, the only official text when expounding documents
from the DEA.
Applications for licences, approvals and permits must be submitted in Danish or
English, unless otherwise agreed.
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3. Pre-investigations (seismic surveys, site
surveys, etc.)
Surveys are subject to approval by the DEA according to section 28 of the Subsoil
Act.
For surveys extending outside the licence area and speculative surveys a special
permit will be issued by the DEA according to section 3 of the Subsoil Act.
Concerning the fee to be paid for a section 3 permit reference is made to
Executive Order No. 419 of 2 June 2005 on the Payment of Fees connected with
Certain Licences Issued pursuant to the Act on the Use of the Danish Subsoil.
In order to obtain an approval for a pre-investigation programme an application
together with a completed in annex 1 and a map showing the outline of the survey
must be forwarded to the DEA.
Applications for approval of offshore pre-investigation programs must include the
necessary information about the project in relation to the project’s impact on
international nature protection areas for the DEA’s decision about necessity of a
consequence assessment and the necessary information about the project in
relation to the projects disturbance of certain species; ref. section 6 below. If any
mitigation measures of relevance are planned (e.g. soft start procedures in
connection with the use of noise generating equipment), they should be described
in the application.
During the processing of the application the DEA will obtain comments to the
programme from the Ministry of Defence, the Directorate of Fisheries and the
Nature Agency.
Approvals/permits are subject to:
• Standard conditions issued by the DEA. A copy of the standard conditions for
offshore surveys is included. Standard conditions for onshore surveys are
available on request.
Similar conditions apply to surveys carried out based on permits granted in
pursuance of section 3 of the Subsoil Act.
• Possible special conditions, e.g. based on comments received by the DEA from
other authorities.
• Soft start procedures will be required for surveys using noise generating
equipment. Reference is made to the attached “Best practice for preinvestigations
offshore” prepared by the National Environmental Research
Institute.
• Executive Order No. 56 of 4 February 2002 on Submission of Samples and
other Information about the Danish Subsoil.
Special and more time-consuming procedures will be applicable regarding the
approval of foreign state owned vessels.
15

4. Drilling Operations
4.1 Exploration and Appraisal Drilling Operations
Drilling operations are subject to approval in pursuance of section 28 of the Danish
Subsoil Act. Approval is granted by the DEA which supervises the operations. The
supervision is concerned with safety as well as other aspects of the drilling
operations.
Information on administrative matters as well as on requirements with regard to
safety, data collection, submission of samples and reporting can be found in the
attached DEA publication ‘Guidelines for Drilling, Exploration’.
These guidelines must be taken into consideration when planning and performing
drilling operations. It must, however, be noted that responsibility for safe and
efficient performance of operations rests with the operator. The DEA should be
consulted if the operator finds it possible to perform operations in a safer or more
efficient way by deviating from the guidelines.
Applications for approval of drilling programs for offshore well must include the
necessary information about the project in relation to the project’s impact on
international nature protections areas for the DEA’s decision about necessity of a
consequence assessment and the necessary information about the project in
relation to the projects disturbance of certain species; ref. section 6 below. If any
mitigation measures of relevance are planned (e.g. soft start procedures in
connection with the use of noise generating equipment), they should be described
in the application.
4.2 Production Drilling Operations
The DEA must approve and supervise all drilling and maintenance operations
connected to wells used for production or similar purposes. The administration is
in principle as described for exploration drilling operations.
4.3 Submission of Geological Information
Reporting procedures and guidelines on seismic surveys and drilling operations
are stated in terms stipulated in:
• Each license; for seismic surveys cf. terms regarding pre-investigations in preparation
for exploration and production of hydrocarbons; for drilling operations cf.
section 4.1 and 4.2.
• Executive Order No. 56 of 4 February 2002 on Submission of Samples and
other Information about the Danish Subsoil.
• Guidelines for Drilling, Exploration.
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4.4 DEA Contact System for Drilling Operations
Deviation from approved drilling programmes may require the approval of the
DEA. For this purpose the DEA has established an around the clock contact
system for drilling operations. Outside office hours – weekends and holidays
included – a member of the DEA drilling team will be on duty. When calling (+45)
33 92 79 18 a recorded message will inform about the person on duty.
Drilling programs, amendments and daily drilling reports are to be sent to the
drilling team’s mail box at ddr@ens.dk.
4.5 DEA Press Releases
Following the completion of an exploration well the DEA publishes by routine a
press release with information about operator, licence group, well name, drilling
platform, drilling period, drilling location, water depth, total well depth in geological
and measured terms, main information on results (dry, shows, discovery, tested,
not tested).
17

5. Offshore Emergency Response Plans
5.1. Regulations
Regulations concerning emergency response plans are found in section 45 in the
Offshore Safety Act and in chapter 3 of Executive Order no. 1501 of 15 December
2010 on Emergency Response etc. on offshore installations.
In case of possible or verified hydrogen sulphide occurrence the emergency
response plan must include measures to meet such danger (see also section 5.4).
For oil spill plans the Ministry of Environment’s Order no. 395 of 17 July 1984 on
Preparedness in Case of Pollution of the Sea from Certain Offshore Installations
must be observed (can be obtained from the Danish Environmental Protection
Agency).
For emergency response plans required by other authorities (The Danish Maritime
Authority, The Danish Transport Authority, The Royal Danish Administration of
Navigation and Hydrography (RDANH) and The National IT and Telecom Agency)
reference is made to the authorities in question (see section 1.2.1 for contact
information).
In case of major offshore accidents the Authorities’ Emergency Response
Committee will convene, cf. section 59 of the Offshore Safety Act. The main
functions of the committee should be familiar to the operator in case of an
emergency. The authorities and functions of the Committee are presented in
section 5.3 below.
5.1.1. Stand-by Vessels
Regulations regarding stand-by vessels are laid down in Chapter VIII of Executive
Order no. 1501 of 15 December 2010 on Emergency Response etc. on offshore
installations.
5.2. Guidelines
5.2.1. Introduction
Pursuant to section 45 of the Offshore Safety Act emergency response measures
on offshore installations must be established to meet the consequences of
accidents.
For this purpose, the operator or the operating company shall prepare an
emergency response plan for accidents and dangerous situations during the
operation. The plan shall upon request be forwarded to the Danish Energy
Agency. Section 4 of Executive Order no. 1501 of 15 December 2010 prescribes
in more detail the requirements to the emergency response plan. Similar plans for
oil spill situations must be forwarded to the Danish Environmental Protection
Agency (DEPA).
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5.2.2. Procedure for the Submission of the Emergency Response Plans
(Emergency and Oil Spill)
Unless special circumstances call for another procedure the emergency response
plans shall be forwarded to the Danish Energy Agency and the Danish
Environmental Protection Agency no later than 3-4 weeks before the start up of
the operation.
Finally, it must be emphasised that the emergency response plans must be kept
up to date and essential changes must be submitted to the authorities. At any time
the Danish Energy Agency and the Danish Environmental Protection Agency may
require changes in the plan.
5.3 The Authorities’ Emergency Response Committee
In case of major offshore accidents on the installations the Authorities’ Emergency
Response Committee will convene. The function of the Committee is regulated by
Executive Order No. 1184 of 9 October 2007 on Rules of Procedure for the
Authorities’ Emergency Response Committee in Pursuance of the Offshore Safety
Act.
5.3.1 Call out Procedure
1. The Admiral Danish Fleet (“Søværnets Operative Kommando” abbreviated
“SOK”) will immediately notify the Authorities’ Emergency Response
Committee through its Chairman, Deputy Chairman or Secretary or, in the
alternative, the person on standby at the Danish Energy Agency.
2. SOK will also notify the police in Esbjerg, the Danish Environmental Protection
Agency and the licensee/operator/the operation company.
3. The representative of the Authorities’ Emergency Response Committee/the
Danish Energy Agency notified will contact the remaining members of the
Action Committee.
4. The licensee/operator/the operating company will notify the Authorities’
Emergency Response Committee/the Danish Energy Agency separately, as
stated under points 1 and 2.
5. The Chairman of the Authorities’ Emergency Response Committee or his
deputy will decide whether 1) to convene the Committee immediately, 2) to
hold a telephone conference, 3) to establish other contacts, or 4) to keep the
Committee on standby.
6. The Chairman of the Authorities’ Emergency Response Committee is to notify
the Ministry of Climate and Energy.
19

ALARM
Operator/
Operating company
ALARM
Admiral Danish Fleet
(SOK)
Authorities' Emergency
Response Committee
Ministry of
Climate and
Energy
5.4 Hydrogen Sulphide Emergency Response
The Danish Energy Agency finds it necessary to safeguard against potential risk
from hydrogen sulphide when a well penetrates horizons which have not already
been proven to be free from hydrogen sulphide at that specific location.
Plans, equipment and personnel organisation, education and training must allow
for safe detection, warning, rescue, evacuation and combat, taking into account
the specifics of the drilling location and - where relevant - the conditions in the
surrounding area.
20
Esbjerg Police
Danish Environmental
Protection Agency
Simplified Call out Procedure

6. Environmental impact assessments (EIAs),
consequence assessments etc.
6.1. Regulations
6.2. EIA
Sections 28 a, 28 b and 28 c in the Danish Subsoil Act contain provisions on
approval of offshore projects that are assumed to have a significant impact on the
environment and provisions regulating the protection of international nature
conservation areas and the protection of certain species.
More detailed provisions are laid down in Executive Order No. 684 of 23 June
2011 on EIA, consequence assessment concerning international nature
conservation areas and protection of certain species in connection with projects
about offshore exploration for and production of hydrocarbons, storage in the
subsoil, pipelines etc.
Similar regulations apply for onshore projects. The onshore regulations are not
administered by the Danish Energy Agency but by the local municipalities and by
the Danish Ministry of the Environment.
Exploration activities like pre-investigations (e.g. seismic surveys) and drilling will
normally not require the preparation of an EIA.
Sections 3-8 of Executive Order no. 684 of 23 June 2011 include more detailed
provisions on EIAs, i.e. offshore projects that necessitate the preparation of an
EIA, requirements concerning the contents, other information to be submitted,
procedures to follow, etc.
6.3. Protection of international nature conservation areas
Offshore projects that are assumed to have a significant impact on international
nature conservation areas can only be approved based on a consequence
assessment of the project on the site in view of the site’s conservation objectives
and provided that the consequence assessment shows that the project will not
damage the conservation area.
More detailed provisions are included in sections 9-11 of Executive Order no. 684
of 23 June 2011.
The Danish Energy Agency decides if a consequence assessment must be
submitted together with an application for approval of an offshore project. When
applying for approval of e.g. programs for drilling of exploration wells or programs
for seismic surveys, the applicant must submit the necessary information about the
project’s impact on international nature conservation areas for the DEA’s decision
about the necessity of a consequence assessment.
If any mitigation measures (e.g. soft start procedures in connection with the use of
noise generating equipment) of relevance are planned, they should be described
in the application.
21

6.4. Protection of certain species
Species (e.g. whales, including harbour porpoises) adopted in annex 4 of
Executive Order No. 684 of 23 June 2011 may not deliberately be disturbed in
their natural area of occurrence in connection with carrying out offshore projects,
hereunder exploration projects, comprised by section 1 of the order.
Permits and approvals in pursuance of sections 10, 17, 23 and 28 in the Danish
Subsoil Act cannot be granted, if the project applied for will disturb the species.
More detailed provisions about the protection of these species are included in
sections 12-14 of the order.
When applying for approval of e.g. programs for drilling of offshore exploration
wells or programs for offshore seismic surveys, the applicant must submit the
necessary information and assessments for the DEA’s decision, ref. section 13 (2)
of the Order.
If any mitigation measures (e.g. soft start procedures in connection with the use of
noise generating equipment) of relevance are planned, they should be described
in the application.
6.5. Other
If a project is approved, the approval of the project may be subject to certain
conditions for the purpose of protecting the nature, the environment and the
cultural heritage, ref. section 16 of Executive Order No. 684 of 23 June 2011. Such
conditions may impose limitations on a project, e.g. seismic surveying may be
prevented from being carried out during the breeding season for species protected
in the designated nature protection area.
6.6. Location of international nature protection areas
Information about international nature protection areas within the EU is available
via this link: http://natura2000.eea.europa.eu/
Please visit the Nature Agency’s webpage (www.nst.dk) or contact the Nature
Agency for information about Danish nature protection areas and protected
species.
22

Unofficial translation of Consolidated Act No. 960 of 13 September 2011. In case of discrepancy, the original Danish
text shall prevail.
Consolidated Act on the Use of the Danish Subsoil 1)
The Act on the Use of the Danish Subsoil, see Consolidated Act No. 889 of 4 July 2007, as amended by section 2
of Act No. 1400 of 27 December 2008, section 51 of Act No. 718 of 25 June 2010 and Act No. 541 of 30 May 2011, is
hereby promulgated.
Part 1
General Provisions
1.-(1) The purpose of this Act is to ensure appropriate use and exploitation of the Danish subsoil
and its natural resources.
(2) This Act shall apply to
(i) preliminary investigations, the exploration for and production of raw materials in the
Danish subsoil that were not subject to private commercial exploitation in this country
prior to 23 February 1932,
(ii) use of the subsoil for storage or for purposes other than the production of raw materials,
and
(iii) scientific investigations of the subsoil that are of importance to the activities referred
to in paragraphs (i) and (ii) above.
(3) The Act also applies in the Danish exclusive economic zone and in the Danish continental
shelf area.
2. The raw materials referred to in section 1 above shall belong to the Danish state. The exploration
for and production of the said raw materials by any other party shall be subject to a licence being
granted by the Minister for Climate and Energy under the provisions contained in this Act. The
activities referred to in section 1(2) (ii) and (iii) of above shall be subject to a licence being granted
by the Minister for Climate and Energy.
2a. The Minister for Climate and Energy shall lay down rules or make decisions for the purpose
of implementing or using international conventions and EU rules on matters covered by this Act,
including regulations, directives and decisions regarding protection and conservation of the Danish
1) This Act contains provisions to implement Directive 94/22/EC of the European Parliament and of the Council of 30
May 1994 (Official Journal 1994, L164, p. 3), parts of Council Directive 92/43/EEC of 21 May 1992 (Official Journal
1992, L206, p. 7), as most recently amended by Regulation (EC) No. 1882/2003 of the European Parliament and of
the Council of 29 September 2003 (Official Journal 2003, L284, p. 1), parts of Council Directive 85/337/EEC of 27
June 1985 (Official Journal 1985, L175, p. 40), as most recently amended by Directive 2003/35/EC of the European
Parliament and of the Council of 26 May 2003 (Official Journal 2003, L156, p. 17), parts of Directive 2008/99/EC of
the European Parliament and of the Council of 19 November 2008 (Official Journal 2008, L328, p. 28), parts of Directive
2009/28/EC of the European Parliament and of the Council of 23 April 2009 (Official Journal 2009, L140, p.
16), parts of Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 (Official Journal
2009, L140, p. 114) and parts of Directive 2009/147/EC of the European Parliament and of the Council of 30 November
2009 (Official Journal 2010, L20, p. 7)

marine environment in the Danish exclusive economic zone and in the Danish continental shelf
area.
Part 2
Preliminary Investigations
3. The Minister for Climate and Energy may grant licences for a term of up to three years for performing
specific types of preliminary investigations in order to explore for and produce raw materials
included under this Act, or to use the subsoil for storage or purposes other than the production of
raw materials. Such licences shall indicate the areas to which they apply.
4.-(1) The Minister for Climate and Energy may lay down terms and conditions applicable to the
licence, including terms and conditions regarding the payment of taxes and fees and reporting on
the progress and results of investigations.
(2) The Minister for Climate and Energy may lay down provisions regarding the payment of a fee
for the issuance of licences.
Part 3
Exploration for and Production of Raw Materials
5.-(1) The Minister for Climate and Energy may grant a licence conferring an exclusive right on
the holder to explore for and to produce one or more raw materials within a defined area and subject
to specific terms and conditions. Separate licences may be granted for exploration and production,
respectively. An exploration licence may grant the licensee a preferential right to a production licence.
(2) An exploration licence may lay down provisions on a gradual reduction of the area comprised
by the licence and may set out any work obligations to be met by the licensee.
(3) The licences referred to in subsection (1) hereof shall only be granted to applicants that are
deemed to have the necessary expertise and financial resources, and who can be expected to carry
on the activities in a manner so as to ensure that society gains maximum insight into and benefit from
the activities.
(4) The Minister for Climate and Energy may refuse to consider an application for a licence
pursuant to subsection (1) if the exploration for or production of the relevant raw material cannot be
expected to be compatible with other ongoing or planned use of the subsoil or with appropriate
exploitation of the subsoil in other respects.
(5) The Minister for Climate and Energy may lay down provisions on the payment of a fee for applying
for the licences referred to in subsection (1) above.
6.-(1) The licences referred to in section 5 above shall be issued upon being submitted for approval
to a committee set up by the Danish Parliament.
(2) As and when determined by the Minister for Climate and Energy or by the chairman of the
committee concerned, the members of the committee and any other parties present during the committee's
discussions shall keep confidential any information that may come to their knowledge as a
consequence of considering licences submitted in accordance with subsection (1) hereof.
(3) If the committee does not grant its approval for a licence, see subsection (1) above, the committee
shall inform the Minister of the reasons for withholding its approval, if the Minister so requests.

7. The term of a licence granted in pursuance of section 5 above shall be fixed with due regard being
paid to the nature of the raw material(s) covered by the licence. The licence term cannot exceed
50 years.
8.-(1) A licence granted in pursuance of section 5 above may stipulate that the state or a stateowned
company shall be entitled to take part in the activity covered by the licence, subject to specific
terms and conditions.
(2) Where the state or a state-owned company participates in activities under a licence to explore
for and produce hydrocarbons granted pursuant to section 5 above and issued after 1 July 1995, in
exercising its voting rights the state or the state-owned may only safeguard such interests as are
within the purview of this Act, and may not exercise its voting rights to prevent the licensee from
basing its activities on commercial principles. The state or a state-owned company may not be informed
about or exercise its voting rights in respect of decisions on the licensee's choice of suppliers.
Nor may the state or a state-owned company exercise any majority voting right together with
one or more Danish public-sector participants in respect of any other decisions.
(3) Notwithstanding the provision of subsection (2) above, it may be stipulated as a condition for
such a licence that any decisions made by the licensee that fail to comply with licence terms regarding
the protection of resources or the state's financial interests shall not be binding on the state participant,
provided that such participant informs its co-licensees, within a specific time limit, that it
opposes the decision in question. The right to oppose a decision shall be exercised nondiscriminatorily,
in particular with regard to decisions on investments and the licensee's choice of
suppliers.
(4) Where state participation takes place through a state-owned company that also holds licences
of the nature referred to in subsection (2) above or holds shares in licences that it has acquired on a
different basis, the state-owned company shall keep separate accounts of the activities carried on
under each category of shares in a licence. Further, the company shall ensure that the division of the
company managing the state participation does not disclose any information to the division of the
company that has acquired licence shares on a different basis. If the division of the company managing
the state participation engages the division of the company that acquired licences on a different
basis as its consultant, the former division of the company may make such information available
to the latter division as is required to perform the consulting services. The other holders of the licences
to which such information relates shall be notified in advance which information will be
passed on in this way, and they shall be given sufficient time to raise any objections.
(5) The Minister for Climate and Energy may lay down more specific rules regulating the matters
referred to in subsections (2) and (4) above, such rules being incorporated into the licence terms or
into special agreements concluded between the Minister for Climate and Energy and the company
managing the state participation.
9. A licence granted pursuant to section 5 above shall stipulate the consideration to be paid by the
licensee to the state. In this connection, it may be stipulated that a periodic charge shall be paid
based on the size of the area covered by the licence (area rental), and that a tax shall be levied on
the volume of raw materials produced (royalty). Moreover, the licence terms may stipulate that a
share of the profit from the activities covered by the licence shall be payable to the state.
10.-(1) Exploration and production shall be carried on in a safe and appropriate manner that prevents
any waste of raw materials.
(2) Before production and measures aimed at production are initiated, a plan for the production activities,
including the organization of production and the layout of production installations and any
pipelines (production measures, etc.), shall be approved by the Minister for Climate and Energy.

(3) Substantial changes and supplements to an approved plan for the production activities are
subject to approval by the Minister for Climate and Energy before they are initiated.
(4) The Minister for Climate and Energy may lay down terms and conditions for approvals
granted pursuant to subsections (2) and (3).
11.-(1) Where an accumulation of hydrocarbons extends into the areas of several licensees, the
relevant licensees shall coordinate exploration and any subsequent production activities. Agreements
in this respect shall be subject to the approval of the Minister for Climate and Energy. Where
the parties fail to reach an agreement on coordination of such activities within a reasonable time
limit, the Minister for Climate and Energy may order such coordination and lay down the applicable
terms and conditions.
(2) Where an accumulation of hydrocarbons extends into another country's sovereign territory and
an agreement on the coordination of exploration and production is made with the relevant country,
the Minister for Climate and Energy may order the licensee whose licence includes the Danish
share of the accumulation to take part in such coordination, and may lay down the applicable terms
and conditions. Any agreements on coordination made by licensees shall be subject to the approval
of the Minister for Climate and Energy.
(3) Upon submitting the matter to a committee set up by the Danish Parliament, the Minister for
Climate and Energy shall be authorized to enter into an agreement with the relevant country’s authorities
about the coordination of exploration and production of the accumulations mentioned in
subsection (2) above, and to grant the necessary exemptions from the provisions of this Act and the
Act on Safety, etc. for Offshore Installations for the Exploration for, Production of and Transportation
of Hydrocarbons (Offshore Safety Act).
Part 4
Special Provisions on Exploration for and Production of Hydrocarbons
12.-(1) The licences for hydrocarbon exploration and production mentioned in section 5 above
shall be granted in one of the ways described in paragraphs (a) to (d) below, as determined by the
Minister for Climate and Energy:
(a) Following a notice inviting applications from the public. The invitation shall be published in the
Danish Official Gazette and in the Official Journal of the European Union at least 90 days before
the closing date for applications.
(b) Where an application for a licence has been submitted for a specific area without a prior invitation
to the public, see paragraph (a) above, and the Minister for Climate and Energy finds that the application
should be considered, the Minister shall publish a notice concerning the application in the
Danish Official Gazette and the Official Journal of the European Union. Other interested parties
shall be granted a period of at least 90 days after the date of such publication in which to submit
applications. As a minimum, the notices referred to in paragraph (a) and the first and second sentences
of paragraph (b) shall specify that applicants may apply for an exclusive right to explore for
and produce hydrocarbons, and shall indicate the areas for which applications may be or have been
submitted, the expected date for granting licences, and from where information on the licence
terms, etc. can be obtained. Any change in the licence terms, etc. shall be notified to all parties involved.
(c) Where the employment of the procedures set out in paragraphs (a) or (b) above is not considered
appropriate, the Minister for Climate and Energy may grant licences within specific areas, and possibly
within specific time limits, without initiating the procedures set out in paragraphs (a) and (b)
above. Such a procedure shall be introduced through the issuance of a special Executive Order,

which shall take effect when a notice concerning the employment of this procedure has been published
in the Official Journal of the European Union. As a minimum, such notice shall indicate the
areas for which applications may be submitted, and from where more detailed information on the
licence terms can be obtained. Any amendments to the Executive Order shall be published in the
same way.
(d) Where warranted by geological or production considerations, the Minister for Climate and Energy
may grant a licence for an area to holders of licences for any adjoining area without employing the
procedures set out in paragraphs (a) to (c) above. In such cases, the holders of licences for all other
adjoining areas shall be given an opportunity to submit applications and sufficient time to do so,
and they shall have access to information on the terms and conditions, etc. applicable to such licences.
(2) Before applications are invited in pursuance of subsection (1)(a) or (b) or under an Executive
Order in pursuance of paragraph (c), the Minister for Climate and Energy shall submit a statement
to a committee set up by the Danish Parliament, indicating for which areas or blocks applications
are intended to be invited and the general terms and conditions on which licences are intended to be
granted. Members of the committee and any other parties present during the committee's discussions
about such statements shall keep confidential any information that may come to their knowledge
through the committee with respect to the terms on which licences are to be granted based on
the procedure outlined in subsection (1)(a), until the date on which an invitation is made to the public.
(3) The Minister for Climate and Energy may refrain from granting a licence on the basis of the
applications received when the procedures referred to in subsection (1)(a) and (b) above are employed.
(4) The terms and conditions on which licences are to be granted when employing the procedure
outlined in subsection (1)(a) may not be published until the date on which an invitation is made to
the public.
12a.-(1) The licences mentioned in section 12(1) above shall be granted on the basis of selection
criteria concerning:
(a) the applicant’s expertise and financial base, and
(b) the exploration activities that the applicants intend to carry out, or the way in which the applicants
intend to carry out production in the area in question.
(2) Moreover, the Minister for Climate and Energy may decide that the amount that applicants are
prepared to pay for the issuance of a licence shall form part of the selection criteria.
(3) Further, the Minister for Climate and Energy may set up other relevant, objective and nondiscriminatory
criteria, in order to make a final choice among applicants considered to have equal
merit based on an evaluation made according to the selection criteria established in subsection
(1)(a) and (b), and possibly subsection (2).
(4) In addition to the criteria mentioned in subsections (1)-(3) above, when evaluating applications
the Minister for Climate and Energy may attach weight to any lack of efficiency or non-compliance
with obligations under previous licences.
(5) Where the Minister for Climate and Energy stipulates that the procedure for granting licences
shall include a provision to the effect that the Minister shall determine the composition of any
groups of companies jointly to be granted the licences mentioned in subsection (1), the composition
shall be determined on the basis of one or more of the criteria established in subsections (1)-(4).
(6) Where the Minister for Climate and Energy stipulates that the procedure for granting licences
shall include a provision to the effect that the Minister shall appoint the operator of a group of com-

panies that is granted licences jointly, such appointment shall be made on the basis of the operator’s
expertise and possibly on the basis of one or more of the criteria established in subsections (1)-(4).
(7) The criteria established in subsections (1)-(6) shall be published together with the notices inviting
applications referred to in section 12(1)(a) to (c) above. Any changes made to these criteria
shall be published in the same way.
13.-(1) The hydrocarbon exploration and production licences referred to in section 5 shall be
granted for a term of up to six years, which term may be extended by up to two years at a time for
the purpose of further exploration, where warranted by special circumstances. The total term of exploration
may only exceed ten years in exceptional cases.
(2) When the pertinent terms and conditions in a licence granted pursuant to subsection (1) above
have been met, the licensee shall be entitled to an extension of the licence with a view to production.
In special cases, the Minister for Climate and Energy may extend the term of a licence notwithstanding
that the conditions for an extension have not been met. The licence term may only be
extended for those parts of the area that contain commercial accumulations that the licensee plans to
exploit, and not by more than 30 years. In case of major uncertainty about the extent, in terms of area,
of the production potential from one or more of the accumulations in an area covered by a licence to be
extended for the purpose of production, the Minister for Climate and Energy may decide, when
granting the extension, that the delineation of the accumulation shall be temporary. As a condition for
extending the licence, the Minister for Climate and Energy may stipulate that an application for
approval pursuant to section 10 shall be submitted within a specific time limit.
(3) If necessary from a resource point of view or due to economic considerations or in the interests
of society, the Minister for Climate and Energy may order a licensee covered by this Act to submit
an adequate plan within a specified time limit for the production measures, etc., see section 10, to
be undertaken in respect of an accumulation that is considered commercially exploitable. Upon approving
the plan, the Minister for Climate and Energy may order the licensee to initiate production.
At the same time, the licence term shall be extended for the purpose of production from that part of
the area that contains the accumulation, but not by more than 30 years.
(4) The term for production, as fixed in pursuance of subsections (2) and (3), or in the relevant licence,
may be prolonged where warranted by special circumstances. In the event that the total licence
term will thus exceed 50 years, the provisions of section 6 shall apply mutatis mutandis.
(5) Where required due to special circumstances, the Minister for Climate and Energy may grant
licenses for a term exceeding the number of years mentioned in subsections (2) and (3) above.
14. In connection with approving production measures, etc. in pursuance of section 10, the date of
production startup shall be fixed so as to ensure that the accumulation contributes to Denmark's
energy supply in an expedient manner and that existing or planned processing and transportation
systems are utilized.
15.-(1) In granting approval for the production of hydrocarbons pursuant to section 10, the Minister
for Climate and Energy shall stipulate the quantities that may be produced for periods of at least
six months. Unless new information about the accumulation has been obtained, the Minister shall
base such stipulations on the production plan approved in pursuance of section 10 above.
(2) Where warranted by concern for safe, appropriate or efficient production, or necessitated by
weighty considerations for society, the Minister for Climate and Energy may make changes in approved
production plans and regulate production.
16.-(1) Following negotiations with the licensees, the Minister for Climate and Energy may order
that installations for the production, processing and transport of hydrocarbons, etc. established in

pursuance of an approval or a permit granted according to this Act may be used by other licensees
where warranted by resource or economic considerations or the interests of society. It is a condition
that the existing and planned users’ projected use is not unreasonably impaired or obstructed as a
consequence.
(2) Following negotiations with the licensees, the Minister for Climate and Energy may order that
the exploitation of two or more hydrocarbon accumulations shall be coordinated where warranted
by resource or economic considerations or the interests of society.
(3) Agreements regarding the use by other licensees of installations for the production, processing
and transport of hydrocarbons, etc. established pursuant to an approval or a permit according to this
Act and regarding the coordinated exploitation of two or more hydrocarbon accumulations shall be
submitted to the Minister for Climate and Energy immediately following their conclusion.
(4) Where an agreement regarding the use by other licensees of installations for the production,
processing and transport of hydrocarbons, etc. established pursuant to an approval or a permit
according to this Act or regarding coordinated exploitation of two or more hydrocarbon
accumulation cannot be reached within a reasonable period of time, the Minister for Climate and
Energy may lay down terms and conditions in this respect, including about payment. The Minister
for Climate and Energy may demand that the parties disclose the information required for laying
down such terms and conditions.
(5) The Minister for Climate and Energy may lay down rules regarding the use by other licensees
of installations for the production, processing and transport of hydrocarbons, etc., the procurement
of information in this respect, the arrangement of negotiations, etc. concerning third-party use of
installations and regarding publication of the key points of the agreements made.
(6) Subsections (1)-(5) do not apply to upstream pipeline networks for natural gas.
17.-(1) The establishment and operation of pipeline facilities for use in the activities comprised by
this Act may only take place pursuant to a licence from the Minister for Climate and Energy.
(2) A licence may be granted subject to specific conditions on the routing, dimensions and ownership
of the pipeline, as well as the right for other parties to use the pipeline, payment for this, fees
payable to the state, etc.
(3) Subsections (1) and (2) shall not apply to local pipelines that form part of installations used in
the production from an individual field.
18. The Minister for Climate and Energy may decide that a royalty fixed in pursuance of section
9, see section 13, shall be paid in the form of extracted hydrocarbons. Any such decision shall take
effect at the earliest six months after the licensee has been notified of the decision.
Part 4a
Special Provisions regarding Exploration for and Production of Geothermal Energy
18a.-(1) Licences pursuant to section 5 for exploration and production of geothermal energy shall
be granted following an invitation of applications from the public.
(2) Before applications are invited in pursuance of subsection (1), the Minister for Climate and
Energy shall submit a statement to a committee set up by the Danish Parliament, indicating for
which areas applications are intended to be invited and the general terms and conditions on which
licences are intended to be granted. Members of the committee and any other parties present during
the committee's discussions about such statements shall keep confidential any information that may
come to their knowledge through the committee with respect to the terms on which licences are to
be granted, until the date on which an invitation is made to the public.

(3) The Minister for Climate and Energy may refrain from granting a licence on the basis of the
applications received based on the invitation to the public pursuant to subsection (1).
(4) The terms and conditions on which licences are to be granted following an invitation to the
public, see subsection (1), may not be published until the date on which applications are invited
from the public.
18b.-(1) Licences for exploration and production of geothermal energy shall be granted on the
basis of selection criteria concerning
(a) the applicants’ expertise and financial base, and
(b) the exploration activities that the applicants offer to carry out, or the way in which the applicants
intend to carry out production in the area in question.
(2) Moreover, the Minister for Climate and Energy may decide that the amount that applicants are
prepared to pay for the issuance of a licence shall form part of the selection criteria.
(3) Further, the Minister for Climate and Energy may set up other relevant, objective and nondiscriminatory
criteria, in order to make a final choice among applicants considered to have equal merit
based on an evaluation made according to the selection criteria established in subsection (1)(a) and (b),
and possibly subsection (2).
(4) In addition to the criteria mentioned in subsections (1)-(3) above, when evaluating applications
the Minister for Climate and Energy may attach weight to any lack of efficiency or non-compliance
with obligations under previous licences.
(5) Klima- og energiministeren kan fastsætte, at det i en procedure for meddelelse af tilladelser
skal indgå, at sammensætning af grupper af virksomheder, der i forening meddeles tilladelser som
nævnt i stk. 1, foretages af ministeren. The composition of such groups shall be determined on the
basis of one or more of the criteria established in subsections (1)-(4).
(6) The Minister for Climate and Energy may stipulate that a procedure for granting licences shall
include a provision to the effect that the Minister shall appoint the operator of a group of companies
to be granted licences jointly. The appointment shall be based on the operator’s expertise and possibly
other of the criteria established in subsections (1)-(4).
(7) The criteria pursuant to subsections (1)-(6) shall be published in connection with inviting
applications in accordance with section 18(a)(1). Any changes made to these criteria shall be published
in the same way.
18c.-(1) Licences pursuant to section 5 for the exploration for and production of geothermal
energy shall be granted for a term of up to six years.
(2) When the terms and conditions of a licence granted pursuant to subsection (1) above have
been met, the licensee shall be entitled to an extension of the licence with a view to production In
special cases, the Minister for Climate and Energy may extend the term of a licence notwithstanding
that the conditions for an extension have not been met. The licence term may only be extended for
those parts of the area from which it is intended to recover geothermal energy, and not by more than
30 years. As a condition for extending the licence, the Minister for Climate and Energy may stipulate
that an application for approval of a plan for the production activities pursuant to section 10
shall be submitted within a specific time limit.
(3) Where warranted by special circumstances, the Minster for Climate and Energy may grant
licences for a term extending beyond the periods mentioned in subsections (1) and (2).
18d. Upon approval of plans for production measures, etc. in pursuance of section 10, the date of
production startup shall be determined.

Part 5
The State's Right to Purchase Liquid Hydrocarbons
19.-(1) The Minister for Climate and Energy may decide that the state or a state-owned company
shall be entitled to purchase up to half a licensee's ongoing production of liquid hydrocarbons. Any
such decision shall take effect six months at the earliest after the seller has been notified of the decision.
The hydrocarbons produced shall be supplied at a reasonable market price, at the time and
place where delivery is effected, and on the usual terms of delivery.
(2) Decisions made in pursuance of subsection (1) above may not be made in respect of production
that is carried on under licences granted after 1 January 1995.
20.-(1) If the buyer and the seller have not arrived at an agreement on the price or on the basis for
its calculation within three months of the seller’s receipt of the notification referred to in section 19
above, either party may bring the matter before the Oil Board.
(2) The parties shall be entitled to demand that negotiations be held at six-month intervals to review
the price or the basis for its calculation. Where the buyer and seller have not arrived at an
agreement on the price or the basis for its calculation within one month of the demand being made,
either party may bring the matter before the Oil Board.
(3) In the event that the buyer and the seller fail to agree on the other terms of delivery, including
the time and place of delivery, either party may bring the matter before the Oil Board.
21.-(1) The Oil Board, which is set up by the Minister for Climate and Energy, shall be composed
of a chairman and two other members. The chairman shall be appointed on the recommendation of
the President of the Danish Supreme Court. The two other members shall have special knowledge
of the oil trade. The members and their deputies shall be appointed for a term of four years.
(2) Decisions made by the Oil Board cannot be brought before any other administrative authority.
(3) The Minister for Climate and Energy shall lay down detailed rules regulating the activities of
the Board.
22. A decision to buy oil made in pursuance of section 19 above shall not restrict the state’s right
to make decisions to sell and supply liquid hydrocarbons in pursuance of other legislation.
Part 6
Other Use
23.-(1)The Minister for Climate and Energy may grant a licence for a defined part of the subsoil
that gives the licensee an exclusive right of exploration and use of the subsoil for storage or purposes
other than production, subject to specific terms and conditions. Exploration licences may be
granted for a term of up to six years, which term may be extended by up to two years at a time for
the purpose of further exploration, where warranted by special circumstances. The total term of exploration
may only exceed ten years in exceptional cases.
(2) Licences pursuant to subsection (1) shall be granted separately for exploration and for use of
the subsoil for storage or purposes other than production.
(3) An exploration licence may grant the licensee a preferential right to use the subsoil for storage
or purposes other than production, provided that exploration of the relevant area has been
completed, that all conditions in the exploration licence have been met, and that the application for

a licence for storage or purposes other than production was submitted during the term of the
exploration licence.
(4) An exploration licence may lay down provisions on the work obligations to be met by the licensee.
(5) Licences pursuant to subsection (1) may only be granted to an applicant considered to be
financially sound, reliable and technically competent to operate and manage the activities
comprised by the licence, and provided the applicant can ensure specialized and technical
instruction and training of the operator and all personnel.
(6) During the term of the licence, the licensees shall at all times be able to substantiate that they
are financially sound and possess or have access to the requisite technical competence to operate
and manage the activities pursuant to subsection (1).
(7) Where an agreement has been concluded between the licensee and operator regarding the
latter’s operatorship of the activities pursuant to subsection (1), documentation substantiating the
existence of the pertinent written agreements shall be available at all times. The operator shall be
able to substantiate the specialized and technical instruction and training of its personnel; see
subsection (5).
(8) The licences referred to in subsection (1) above shall be issued upon being submitted for approval
to a committee set up by the Danish Parliament. Section 6(2) shall apply mutatis mutandis.
(9) The Minister for Climate and Energy may lay down more detailed rules and regulations regarding
the payment of a fee for the processing of applications pursuant to subsection (1) above.
(10) The Minister for Climate and Energy may lay down more detailed rules and regulations regarding
use of the subsoil pursuant to subsection (1) above.
23a. A licence granted pursuant to section 23 above shall stipulate the consideration to be paid by
the licensee to the state.
23b.-(1) Licences pursuant to section 23 shall be granted in one of the following ways, as
determined by the Minister for Climate and Energy:
(i) Following a notice inviting applications from the public.
(ii) Where the employment of the procedure set out in paragraph (i) above is not considered
expedient, the Minister for Climate and Energy may grant licences within specific areas, and
possibly within specific time limits, without initiating the procedure set out in paragraph (i).
Such a procedure shall be introduced through the issuance of a special Executive Order, which
cannot take effect until a notice concerning the employment of this procedure has been
published. As a minimum, such notice shall contain information about the areas for which
applications can be submitted and how to obtain more detailed information about the terms and
conditions. Any amendments to the Executive Order shall be published in the same way.
(iii) Where warranted by geological or storage considerations, the Minister for Climate and Energy
may grant a licence for an area to holders of licences for any adjoining area without employing
the procedures set out in paragraphs (i) and (ii) above. In such cases, the holders of licences for
all other adjoining areas shall be given an opportunity to submit applications and sufficient time
to do so, and they shall have access to information on the terms and conditions, etc. applicable
to such licences.
(2) Before applications are invited in pursuance of subsection (1)(i), or an Executive Order pursuant
to subsection (1)(ii) is issued, the Minister for Climate and Energy shall submit a statement to a
committee set up by the Danish Parliament, indicating for which areas or blocks applications are
intended to be invited and the general terms and conditions on which licences are intended to be
granted. Members of the committee and any other parties present during the committee's discus-

sions about such statements shall keep confidential any information that may come to their knowledge
through the committee with respect to the terms on which licences are to be granted based on
the procedure outlined in subsection (1)(i), until the date on which an invitation is made to the public.
(3) The Minister for Climate and Energy may refrain from granting a licence on the basis of the
applications received when the procedure referred to in subsection (1)(i) above is employed.
(4) The terms and conditions on which licences are to be granted when employing the procedure
outlined in subsection (1)(i) may not be published until the date on which an invitation is made to
the public.
(5) The Minister for Climate and Energy shall lay down more detailed rules and regulations about
the granting of licences pursuant to section 23, including about the information to be submitted in
applications for exploration and storage licences.
23c.-(1) The licences mentioned in section 23b(1) above shall be granted on the basis of selection
criteria concerning:
(a) the applicants’ expertise and financial base, and
(b) the exploration activities that the applicants offer to carry out, or the way in which the applicants
intend to carry out storage or other use of the subsoil in the area in question.
(2) Moreover, the Minister for Climate and Energy may decide that the amount that applicants are
prepared to pay for the issuance of a licence shall form part of the selection criteria.
(3) Further, the Minister for Climate and Energy may set up other relevant, objective and nondiscriminatory
criteria, in order to make a final choice among applicants considered to have equal merit
based on an evaluation made according to the selection criteria established in subsection (1)(a) and (b),
and possibly subsection (2).
(4) In addition to the criteria mentioned in subsections (1)-(3) above, when evaluating applications
the Minister for Climate and Energy may attach weight to any lack of efficiency or non-compliance
with obligations under previous licences.
(5) The Minister for Climate and Energy may stipulate that a procedure for granting licences shall
include a provision to the effect that the Minister shall determine the composition of any groups of
companies jointly to be granted the licences mentioned in subsection (1). The composition of such
groups shall be determined on the basis of one or more of the criteria established in subsections (1)-
(4).
(6) The Minister for Climate and Energy may stipulate that a procedure for granting licences shall
include a provision to the effect that the Minister shall appoint the operator of a group of companies
jointly to be granted licences. The appointment shall be based on the operator’s expertise and possibly
other of the criteria established in subsections (1)-(4).
(7) The criteria pursuant to subsections (1)-(6) shall be published together with the notices
inviting the applications referred to section 23(b)(1). Any changes made to these criteria shall be
published in the same way.
23d.-(1) Exploration and storage or other use of the subsoil shall be carried on in a safe and
appropriate manner.
(2) Before storage or other use of the subsoil and any measures aimed at such activities are
initiated, a plan for the activities, including the organization of production and the layout of
installations, as well as a plan for corrective measures in case of leakages or significant
irregularities that involve a risk of leakage from a storage complex shall be approved by the
Minister for Climate and Energy.

(3) The holder of a licence pursuant to section 23 shall notify the Minister for Climate and Energy
of any planned changes to the operation of the activities. Where required, the Minister shall issue an
updated licence.
(4) Substantial changes and supplements to the plan for the activities, see subsection (2), shall be
approved by the Minister for Climate and Energy before being initiated. The Minister shall issue a
new or updated licence.
(5) The Minister for Climate and Energy may lay down terms and conditions in connection with
granting approvals and licences pursuant to subsections (2) to (4).
(6) The Minister for Climate and Energy may lay down rules regarding plans, see subsection (2),
for storage or other use of the subsoil.
Part 6a
Special Provisions regarding Geological Storage and Piped Transport of CO2 (Carbon Dioxide)
23e.-(1) For the purposes of this Part, the following definitions shall apply:
(i) “waste” means the substances defined as waste in Executive Order No. 1632 of 21 December
2010 on Waste;
(ii) “CO2 storage site” means a defined volume area within a geological formation used for the
geological storage of CO2 and associated surface and injection facilities;
(iii) “CO2 stream” means a flow of substances that results from CO2 capture processes, to be
injected into a CO2 storage site;
(iv) “CO2 transport network” means a network of pipelines including associated booster stations
or the like, for the transport of CO2 to the CO2 storage site;
(v) “geological formation” means a lithostratigraphical subdivision within which distinct rock
layers can be found and mapped;
(vi) “geological storage of CO2” means injection of CO2 streams accompanied by storage of CO2
in underground formations;
(vii) “hydraulic unit” means a hydraulically connected pore space where pressure communication
can be measured by technical means and which is bordered by flow barriers, such as faults,
salt domes, lithological boundaries, or by the wedging out or outcropping of the formation;
(viii) “storage complex“ means the CO2 storage site and surrounding geological domain which can
have an effect on overall storage integrity and security, that is, secondary containment
formations;
(ix) “closure of a CO2 storage site” means the definitive cessation of CO2 injection into that CO2
storage site;
(x) “corrective measures” means any measures taken to correct significant irregularities or to
close leakages in order to prevent or stop the release of CO2 from the storage complex;
(xi) “leakage” means any release of CO2 from the storage complex;
(xii) “significant risk” means a combination of the probability of occurrence of damage and a
magnitude of damage that cannot be disregarded without calling into question the purpose of
Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 for the
storage site concerned;
(xiii) “significant irregularity” means any irregularity in the CO2 injection or storage operations or
in the condition of the CO2 storage complex itself, which implies the risk of a leakage or risk
to the environment or human health.
23f.-(1) The suitability of the subsoil for geological storage of CO2 shall be determined through a
characterization and assessment of the potential storage complex and surrounding area.

(2) A geological formation in the subsoil shall only be selected as a CO2 storage site, if under the
intended conditions of use there is no significant risk of leakage, and if no significant environmental
or health risks exit.
(3) In the case of more than one CO2 storage site in the same hydraulic unit, the potential pressure
interactions shall be such that both sites can simultaneously meet the requirements of this Act and
provisions laid down in pursuance hereof.
(4) The Minister for Climate and Energy shall lay down more detailed rules and regulations
regarding the criteria for a characterization and assessment of the suitability of a geological
formation for use as a CO2 storage site.
23g.-(1) A CO2 stream shall consist overwhelmingly of carbon dioxide. No waste or other matter
may be added for the purpose of disposing of that waste or other matter.
(2) The Minister for Climate and Energy shall lay down more detailed rules and regulations
regarding criteria and procedures for the composition of CO2 streams.
23h.-(1) The holder of a licence for a CO2 storage site shall establish and maintain a register of
the quantities of CO2 delivered and injected as well as the properties and composition of the CO2
stream. In case of injection of CO2 streams, they shall be deemed to have been stored immediately
following injection.
(2) The Minister for Climate and Energy shall lay down more detailed rules and regulations
regarding the content of the register.
23i.-(1) The holder of a licence for a CO2 storage site shall set up a programme for monitoring the
injection facilities and storage complex before the injection of CO2 is initiated. The programme
shall describe the licensee’s measures to ensure appropriate operation of the storage site. The
licensee shall ensure compliance with the monitoring programme and ensure that it is checked
appropriately. At least once a year, the licensee shall submit a report to the Minister for Climate and
Energy that describes the programme and programme checks. The report is subject to approval by
the Minister for Climate and Energy.
(2) The Minister for Climate and Energy shall lay down more detailed rules and regulations
regarding the matters mentioned in subsection (1), including about the content of the monitoring
programme and the procedure for checking it and submitting reports.
23j.-(1) In case of leakages or significant irregularities which imply the risk of leakage from a
CO2 storage complex, the licensee shall immediately notify the Minister for Climate and Energy.
(2) The licensee shall take the necessary corrective measures for the storage complex, including
measures related to the protection of human health. As a minimum, the corrective measures shall be
taken on the basis of a corrective measures plan; see section 23d(2).
(3) The Minister for Climate and Energy may at any time require the licensee to take the necessary
corrective measures as well as measures related to the protection of human health, including
measures additional to those laid out in the corrective measures plan; see section 23d(2).
(4) If the licensee fails to take the necessary corrective measures within a reasonable period of
time, the Minister for Climate and Energy shall take the necessary corrective measures and order
the licensee to pay the associated costs.
23k.-(1) Closure of a CO2 storage site may only take place following the approval of the Minister
for Climate and Energy.
(2) A CO2 storage site shall be closed:
(i) if the relevant conditions stated in the CO2 storage licence have been met;

(ii) following an application from the licensee; or
(iii) if the Minister for Climate and Energy so decides pursuant to section 23n(1) after the
withdrawal of a CO2 storage licence.
(3) After a CO2 storage site has been closed, the licensee shall be responsible for sealing the
storage site and removing the injection facilities.
(4) The Minister for Climate and Energy may lay down more detailed rules and regulations
regarding the conditions applicable to closure of a CO2 storage site.
23l.-(1) The licensee shall draw up and comply with a post-closure plan for the period following
closure of the CO2 storage site before responsibility is transferred in pursuance of section 23o. The
post-closure plan shall be approved by the Minister for Climate and Energy.
(2) The Minister for Climate and Energy may lay down more detailed rules and regulations
regarding the content of the post-closure plan.
23m.-(1) The Minister for Climate and Energy shall review and where necessary update or, as a
last resort, withdraw the CO2 storage licence;
(i) if any leakages or significant irregularities occur or there is a risk of such leakages or
irregularities occurring; or
(ii) if it is necessary on the basis of the latest scientific findings and technological progress.
(2) The Minister for Climate and Energy shall lay down more detailed rules and regulations for
reviewing, updating and withdrawing CO2 storage licences.
23n.-(1) If a CO2 storage licence is withdrawn pursuant to section 23m or section 30(1), the
Minister for Climate and Energy shall either issue a new storage licence to another licensee or close
the CO2 storage site.
(2) Until a new CO2 storage licence has been issued, the Minister for Climate and Energy shall
temporarily take over all obligations relating to the CO2 storage site.
(3) If the Minister for Climate and Energy decides to close the CO2 storage site, the Minister for
Climate and Energy shall take over the responsibility for such site.
(4) The Minister for Climate and Energy may order the previous licensee to pay the costs
associated with transferring the obligations regarding the CO2 storage site pursuant to subsection (2)
and the responsibility for the CO2 storage site pursuant to subsection (3).
23o.-(1) Where a CO2 storage site has been closed pursuant to section 23(k)(2)(i) and (ii), all legal
obligations relating to the storage site shall be transferred to the Minister for Climate and Energy on
the Minister’s initiative or upon request from the licensee, provided the following conditions are
met:
(i) all available evidence indicates that the stored CO2 will be completely and permanently
contained;
(ii) a period of no less than 20 years after the closure of the CO2 storage site has elapsed, unless the
licensee can substantiate that the criterion set up in paragraph (i) above has been complied with
before the end of such period;
(iii) the payment obligation pursuant to 23r has been fulfilled;
(iv) the CO2 storage site has been sealed and the injection facilities have been removed.
(2) The Minister for Climate and Energy may lay down more detailed rules and regulations
regarding the transfer of responsibility for CO2 storage sites pursuant to subsection (1) and
regarding the documentation to be made available before the transfer of responsibility can be
deemed to have taken place.

23p.-(1) Where a CO2 storage site has been closed pursuant to section 23k(2)(iii), transfer of
responsibility shall be deemed to have taken place if and when all available evidence indicates that
the stored CO2 will be completely and permanently contained, and after the CO2 storage site has
been sealed and the injection facilities have been removed.
(2) The Minister for Climate and Energy may lay down more detailed rules and regulations
regarding the transfer of responsibility for CO2 storage sites pursuant to subsection (1) and
regarding the documentation to be made available before the transfer of responsibility can be
deemed to have taken place.
23q.-(1) A holder of a licence for a CO2 storage site shall provide valid and effective financial
security or any other equivalent for the estimated costs of all obligations following from the licence
for CO2 storage. The financial security or any other equivalent shall be periodically adjusted to take
account of changes to the assessed risk of leakage and the estimated costs of all obligations arising
under the licence for storage of CO2. The financial security or any other equivalent shall be valid
and effective before commencement of injection into a CO2 storage site.
(2) The financial security or any other equivalent, see subsection (1), shall remain valid and
effective:
(i) after a CO2 storage site has been closed pursuant to section 23k(2)(i) and (ii) until the
responsibility for the storage site is transferred to the Minister for Climate and Energy, see
section 23o; and
(ii) after the withdrawal of a CO2, storage licence, see section 23m or section 30(1);
(a) until a new licence for storage of CO2 has been issued to another licensee; or
(b) where the storage site is closed pursuant to section 23n(1) until the transfer of responsibility
has taken place pursuant to section 23o, provided the payment stipulated in section 23r has
been effected.
(3) The Minister for Climate and Energy may lay down more detailed rules and regulations
regarding the establishment, adjustment and maintenance of the financial security or any other
equivalent and regarding the calculation of coverage of such security.
23r.-(1) Before the transfer of responsibility pursuant to section 23o, the licensee shall pay an
amount to the Minister for Climate and Energy to cover the expected monitoring costs for a period
of 30 years. No other costs may be imposed following the transfer of responsibility, but see section
23s.
(2) The Minister for Climate and Energy may lay down more detailed rules and regulations regarding
the calculation and payment of the costs referred to in subsection (1) above.
23s. If, before or in connection with the transfer of responsibility, the holder of a licence for a CO2
storage site is guilty of providing deficient data, has concealed relevant information, displayed
negligence or deceit or has failed to exercise due diligence, the Minister for Climate and Energy
shall order the previous licensee to pay the costs incurred after the transfer of responsibility.
23t.-(1) Potential users are entitled to use CO2 transport networks and CO2 storage sites against
payment, but see subsection (3).
(2) The prices and conditions for transport in CO2 transport networks and storage at CO2 storage
sites pursuant to subsection (1) shall be determined by the CO2 transport network company and the
storage company, respectively. The companies shall publish their tariffs and conditions for use of
CO2 transport networks and CO2 storage sites.

(3) CO2 transport network and storage companies may refuse access to CO2 transport networks
and CO2 storage sites pursuant to subsection (1) if the necessary capacity or connection is not
available to the companies. Duly substantiated reasons shall be given for any such refusal.
(4) CO2 transport network and storage companies that refuse access on the grounds of lack of
capacity or a lack of connection shall make any necessary enhancements as far as it is economic to
do so or when a potential customer is willing to pay for them, provided this would not negatively
impact on the environmental security of transport and geological storage of CO2.
(5) The Minister for Climate and Energy may lay down more detailed rules and regulations
regarding the access to CO2 transport networks and CO2 storage sites.
(6) The Minister for Climate and Energy shall lay down rules regarding the settlement of disputes
concerning access to CO2 transport networks and CO2 storage sites.
23u.-(1) The establishment and operation of pipeline facilities for transporting and storing CO2
may only take place pursuant to a licence from the Minister for Climate and Energy.
(2) A licence may be granted subject to conditions regarding routing, dimensions, ownership and
payment for use.
(3) Subsections (1) and (2) shall not apply to local pipelines forming part of facilities used for
storing CO2.
23v. The Minister for Climate and Energy shall lay down rules regarding the establishment and
maintenance of a register of licences granted for storage of CO2 and of closed CO2 storage sites.
Part 7
Scientific Investigations
24. The Minister for Climate and Energy may grant licences for scientific investigations of the
subsoil; see section 1(2)(iii) above.
Part 8
Supervision, etc.
25.-(1) The Minister for Climate and Energy shall supervise compliance with the provisions of this
present Act and with the rules and regulations, terms and conditions drawn up in pursuance of this Act.
The Minister for Climate and Energy may issue enforcement notices ordering compliance with this
Act and with regulations issued in pursuance hereof.
(2) The Minister for Climate and Energy may lay down more detailed rules and regulations regarding
performance of the supervision.
(3) The Minister for Climate and Energy may order licensees to pay the expenses associated with
public authority case handling pursuant to this Act, including for a public consultation procedure as
referred to in section 28a(1) below, and the Minister may lay down more detailed rules and regulations
in this respect.
26.-(1) Licensees shall submit all information required for the Minister for Climate and Energy’s
supervision of the activities covered by this Act. For the purpose of his supervision, the Minister for
Climate and Energy may order a licensee to submit samples, raw data, processing results, interpretations
and assessments as well as technical and financial information.

(2) Licensees shall submit all information regarding protection of the environment and natural resources
that is required for the Minister of Transport and Energy’s supervision of the activities covered
by this Act. In this connection, the Minister may order a licensee to submit information about
or make investigations into specific matters regarding the protection of natural resources.
(3) The Minister for Climate and Energy may not order a licensee to submit information on its actual
or intended suppliers, except where this is done with a view to meeting the objectives set out in
Article 30 of the EU Treaty.
(4) Any information received by the supervisory authority under subsection (1) above shall be
subject to confidentiality; see sections 152, section 152a, the first sentence, and section 152c of the
Danish Criminal Code.
27.-(1) Where an imminent risk of inappropriate use or exploitation of the subsoil is deemed to
exist, the staff of the supervisory authority shall have access, without a prior court order, to all parts
of the licensee's business against duly showing proof of their identity.
(2) A licence granted in pursuance of section 5 above may provide that a representative of the supervisory
authority shall be entitled to attend meetings held by the licensees’ decision-making bodies.
Part 9
Other Provisions
28. Any works to be carried out in connection with activities covered by this Act, including drilling
wells, sinking shafts, and driving adits and drifts, may not be initiated until the approval of the
Minister for Climate and Energy has been obtained for equipment, working programme and working
methods in each individual case.
28a.-(1) Licences and approvals for offshore projects under this Act that are assumed to have a
major impact on the environment may only be granted following an assessment of the effects on the
environment and after the members of the public, authorities and organizations that are affected
have been given an opportunity to express their opinion. If the project, either alone or in conjunction
with other projects or plans, is assumed to have a major impact on designated international nature
protection areas, the licence or approval may only be granted following an assessment of the
impact of the project on the site, with due consideration paid to the objectives for conservation of
the site. If deemed necessary by the Minister for Climate and Energy, an assessment of the impact
on the site shall be included in the material that has been submitted to the general public, authorities
and organizations for consultation.
(2) When submitting applications and assessments pursuant to subsection (1) above, the applicant
shall include all information necessary for the consideration of the relevant application or assessment.
For use in considering the application or assessment, the Minister for Climate and Energy
may order the applicant to submit information about or make investigations into specific matters.
(3) Licences or approvals may only be granted pursuant to this Act if
(i) the project does not adversely affect the integrity of an international nature protection
area; or
(ii) weighty societal considerations, including of a social or economic nature, make it imperative
to implement the project because no alternative solutions exist; but see subsection
(4) below.
(4) In case of international nature protection areas with a priority natural habitat type or a priority
species, a licence or approval for a project covered by subsection (3)(ii) may only be granted if

(i) this is necessary in the interest of human health, public safety or significant beneficial
effects on the environment; or
(ii) other weighty societal considerations make it imperative to implement the project.
(5) A licence or approval pursuant to subsection (4)(ii) may be granted only upon submitting the
matter for the opinion of the European Commission.
(6) When licences or approvals are granted pursuant to subsection (3)(ii) or subsection (4), the
Minister for Climate and Energy shall lay down terms and conditions regarding appropriate compensatory
measures. The expenses for such compensatory measures shall be covered by the project
applicant. The Minister shall notify the European Commission of the compensatory measures taken.
28b. In connection with offshore projects, the Minister for Climate and Energy shall take appropriate
measures, including by laying down terms and conditions, issuing enforcement notices or
prohibition notices, to avoid deteriorating natural habitat types and the natural habitats of the species
in international nature protection areas and disturbing the species for whose protection the areas
have been designated if such disturbances have major consequences for the objectives set out in
Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild
fauna and flora (the Habitats Directive).
28c.-(1) The Minister for Climate and Energy shall lay down detailed rules and regulations regarding
the projects falling under section 28a(1), the content and scope of assessments pursuant to
section 28a(1), applications for and the granting of licences and approvals for the projects covered,
the minimum information and investigations required for making an assessment of the effects on the
environment and of the impact on international nature protection areas, the notification and consultation
of the members of the public, authorities and organizations affected in respect of assessments
made pursuant to section 28a(1), and regarding terms and conditions, compensatory measures and
enforcement notices.
(2) The Minister for Climate and Energy may stipulate that decisions pursuant to section 26(2)
and sections 28a and 28b shall be subject to an opinion being obtained from the Minister for the
Environment, or from an agency duly authorized by the Minister, on issues relating to protection of
the environment and natural resources.
29.-(1) Licences may not be assigned to any other party, neither directly nor indirectly, unless the
Minister for Climate and Energy allows such assignment and approves the pertinent terms and conditions.
(2) A licence granted under the provisions of this Act shall not be available to the recourse of
creditors.
30.-(1) The Minister for Climate and Energy may revoke any licence granted under this Act
(i) in case of non-compliance with the provisions of this Act or with any provisions, terms
and conditions or enforcement notices issued in pursuance of the Act;
(ii) where an application for a licence contains incorrect or misleading information;
(iii) where a licensee files a petition for suspension of payments or is declared bankrupt.
(2) Where the matter can be rectified by the licensee, a licence may not be revoked in accordance
with subsection (1)(i) above until the Minister for Climate and Energy has issued an enforcement
notice specifying a time limit within which the matter shall be rectified, and the licensee fails to
comply with such enforcement notice.

31. It may be stipulated in a licence that a dispute between the Minister for Climate and Energy
and the licensee as to whether the licensee has complied with the licence terms shall be brought
before an arbitral tribunal, whose decision shall be final and conclusive.
32. A licence shall stipulate the extent to which the licensee's obligations shall continue to exist
after the expiry, relinquishment, lapsing or revocation of the licence. Further, it may be stipulated
that if a work obligation or other obligations are not fulfilled, the Minister for Climate and Energy
may demand that the licensee shall pay the amount, in whole or in part, that it would have cost to
fulfil the relevant obligation.
33. Licences granted in pursuance of this Act shall lay down detailed provisions on the action to
be taken in respect of installations established by the licensee when the licence expires, is relinquished,
lapses or is revoked, as well as the action to be taken in respect of installations that become
obsolete prior to such time.
34.-(1) The Geological Survey of Denmark and Greenland and the Danish Energy Agency shall
collect all information available about the Danish subsoil. With a view hereto, samples and other
information about the subsoil obtained in connection with the performance of activities covered by
this Act shall be submitted to them in accordance with rules and regulations laid down by the Minister
for Climate and Energy.
(2) Licences granted in pursuance of this Act may lay down provisions on confidentiality with regard
to the samples and information submitted in pursuance of subsection (1) above.
34a.(1) The Minister for Climate and Energy may lay down rules to the effect that specific international
regulations and technical specifications containing requirements regarding companies, installations,
facilities, formats, etc. that are referred to in rules issued under this Act shall not be recorded
in the Official Gazette.
(2) The Minister for Climate and Energy shall lay down rules describing how to obtain information
about the international regulations and technical specifications that are not recorded in the Official
Gazette; see subsection (1).
35.-(1) A licensee shall be liable to pay damages for any loss, damage or injury caused by the activities
carried on under the licence, even though such loss, damage or injury was caused accidentally.
(2) In the event that the injured party contributed to the loss, damage or injury, either intentionally
or through gross negligence, the damages payable may be reduced or lapse.
36.-(1) To the extent necessary, the Minister for Climate and Energy may permit the compulsory
acquisition of real property for the purpose of activities covered by this Act.
(2) Compulsory acquisition in accordance with subsection (1) above shall take place subject to the
provisions of the Act on the Procedure for the Compulsory Acquisition of Real Property.
(3) The Minister for Climate and Energy may allow short-term surveys undertaken in order to carry
out any of the activities covered by this Act to be made on third-party property, although this
may result in damage or inconvenience, against payment of compensation in full for any such damage
or inconvenience. In the absence of agreement on the amount of compensation payable, such
compensation shall be fixed in accordance with the provisions referred to in subsection (2) above.

37. The Minister for Climate and Energy may authorize the Danish Energy Agency and other
governmental authorities to exercise the powers conferred on the Minister for Climate and Energy
under this Act.
37a.-(1) The Energy Board of Appeal shall consider complaints about decisions made by the Minister
for Climate and Energy pursuant to this Act or rules or regulations laid down pursuant to this
Act.
(2) Any party having a substantial and individual interest in the decision may file an appeal
against decisions made pursuant to this Act.
(3) Moreover, local and natural associations or organizations whose main objective is to protect
nature and the environment, or whose objective is to safeguard substantial, recreational interests,
where the decision affects these interests, have a right to appeal against the environmental issues
relating to decisions made pursuant to sections 10, 17, 23d, 23u and 28, provided the decisions are
also comprised by sections 28a and 28b. No later than at the time of filing their appeal, the relevant
local and national associations or organizations shall submit their byelaws to the Energy Board of
Appeal to substantiate that they are locally based or have nationwide coverage and that their
objectives meet the requirements stipulated.
(4) The complaint shall be lodged in writing to the Energy Board of Appeal within four weeks
from the time when the decision has been announced. If the decision has been published, the time
limit shall always be reckoned from the date of publication. If the time limit for lodging appeals
expires on a Saturday or a holiday, the time limit shall be extended to the next following weekday.
(5) A licence pursuant to sections 10, 17, 23d, 23u and 28, where such licence is also comprised
by sections 28a and 28b, may not be utilized until the time for lodging appeals has expired.
(6) Appeals against a licence granted for a project comprised by subsection (5) above shall not
have a suspensive effect unless otherwise determined by the Energy Board of Appeal.
(7) Decisions made by the Danish Energy Agency or another state authority to which the Minister
has transferred his powers cannot be brought before an administrative authority other than the
Energy Board of Appeal.
37b.-(1) When considering the decisions referred to in section 37a above, the representatives appointed
to the Energy Board of Appeal on the recommendation of the Confederation of Danish Industries
and the Agricultural Council of Denmark shall be replaced by one expert in exploration and
production of the relevant raw material or in the relevant form of storage or other use of the subsoil,
and by one expert in marine environmental issues. These two members shall be appointed by the
Minister for Climate and Energy.
(2) The Minister for Climate and Energy may lay down rules on the procedure to be adopted by
the Energy Board of Appeal in hearing appeals lodged in accordance with section 37a and on the
payment of fees for filing such appeals.
Part 10
Penalties and Commencement Provisions, etc.
38.-(1) Any party
(i) carrying on the activities referred to in sections 1(2) and 17 without a licence issued by
the Minister for Climate and Energy,
(ii) transgressing the provisions of section 26(1) or failing to submit the samples and other information
required according to section 34,

(iii) disregarding enforcement notices issued in accordance with this Act or regulations laid
down in pursuance of this Act,
shall be punishable by a fine or imprisonment for a term of up to four months.
(2) Any regulations issued in pursuance of this Act may include penalty provisions imposing a
fine or imprisonment for a term of up to four months for any transgression of the provisions laid
down in such regulations.
(3) Companies, etc. (legal persons) may be held criminally liable in accordance with the provisions
laid down in Part 5 of the Danish Criminal Code.
39. In case of non-payment, the taxes and fees payable under this Act shall be recoverable through
execution proceedings.
40.-(1) This Act shall come into force on 1 July 1981.
(2) Any concessions and licences granted under Act No. 181 of 8 May 1950 on the Exploration
for and Production of Raw Materials in the Subsoil of the Kingdom of Denmark, with associated
protocols, contracts and agreements, shall remain in force subject to the amendments following
from this Act, but the provisions of sections 19 through 22 shall not apply to such concessions and
licences. Section 13 of the Sole Concession of 8 July 1962 to Explore for and Recover Hydrocarbons
from the Danish Subsoil shall not be changed as a result of section 29. The provisions laid
down in the above-mentioned concessions and licences regarding confidentiality shall continue to
apply to information submitted in pursuance of section 34(1) above. As concerns activities undertaken
in pursuance of the Sole Concession of 8 July 1962 to Explore for and Recover Hydrocarbons
from the Danish Subsoil, with appurtenant protocols and agreements, any decisions made by the
Minister for Climate and Energy that fix dates of production startup pursuant to section 14 above,
see section 10, and change approved production plans and regulate production pursuant to section
15(2) may be referred by the Concessionaires to the Board of Arbitration mentioned in Section
14(2) of the Concession; see Executive Order No. 372 of 7 November 1963, as subsequently
amended.
41. Act No. 181 of 8 May 1950 on the Exploration for and Production of Raw Materials in the
Subsoil of the Kingdom of Denmark shall be repealed.
42. Any concessions and licences, etc. granted in pursuance of Act No. 181 of 8 May 1950 on the
Exploration for and Production of Raw Materials in the Subsoil of the Kingdom of Denmark may
be revoked in accordance with the provisions of section 30 above, in the event that the concessionaires
or licensees fail to comply with the provisions of such concessions and licences, including the
associated protocols, contracts and agreements, or with terms and conditions or enforcement notices
issued in pursuance thereof.
43. This Act shall not extend to Greenland and the Faroe Islands.
Act No. 310 of 17 May 1995 to amend the Act on the Use of the Danish Subsoil, 2)
which
amended section 5(4), section 6(3), section 8(2)-(5), sections 9, 12, and 12a, section 13(1), section
19(2), section 26(2) and (3), and sections 28a and 33, contains the following commencement provision:
Section 2

(1) This Act shall come into force on 1 July 1995, but see subsection (2) below.
(2) The provisions of sections 12 and 12a of the Subsoil Act, as embodied in section 1(v) and (vi),
of this Amendment Act, shall not apply to the licences for hydrocarbon exploration and production
mentioned in section 5 that are granted before 31 December 2012 for those areas to which the exclusive
right lapses on 8 July 2012 upon the expiry of the Sole Concession of 8 July 1962 to Explore
for and Recover Hydrocarbons from the Danish Subsoil. Such licences shall be granted on the
basis of objective and non-discriminatory principles.
Act No. 447 of 31 May 2000 to amend certain environmental Acts, 3)
whose section 6 amended
sections 37a and 37b of the Subsoil Act, contains the following commencement provision:
Section 14
(1) This Act shall come into force on 15 September 2000, but see subsections (2)-(4) below.
(2) The provisions of this Act regarding the right to appeal against decisions shall apply to cases
decided by courts of first instance after the commencement of this Act. The provisions regarding the
right to appeal against the rejection of requests for access to documents pursuant to section 4(5) of
the Environmental Information Act, as amended by section 1(x) of this present Act, shall likewise
apply to rejections issued after the commencement of this Act.
Subsections (3) and (4) omitted.
Act No. 74 of 12 February 2002 to amend the Act on the Use of the Danish Subsoil, the Act on
the Establishment and Use of a Pipeline for Transport of Crude Oil and Condensate, and the Act on
Certain Offshore Installations, 4)
whose section 1 amended section 6(1), section 11(2) and (3), section
12(2), the heading of Part 8, section 25(3) and section 38, contains the following commencement
provision:
Section 4
This Act shall come into force on 15 March 2002.
Act No. 1230 of 27 February 2003 to amend the Act on the Use of the Danish Subsoil, 5)
which
amended section 13(4) and (5), contains the following commencement provision:
Section 2
This Act shall come into force on the day after the promulgation in the Danish Law Gazette.

Act No. 442 of 9 June 2004 on Due Process Protection in connection with the Public Administration’s
Use of Compulsory Measures and Duties of Disclosure, 6)
whose section 12 amended section
27(1) of the Subsoil Act, contains the following commencement provision:
Section 24
This Act shall come into force on 1 January 2005.
Act No. 548 of 6 June 2007 to amend the Act on the Use of the Danish Subsoil, the Act on Electricity
Supply, the Act on Coastline Protection, the Act on Harbours and various other Acts, 7)
whose
section 1 amended the footnote to the title, section 2a, section 11(3), section 26(2)-(4), sections 28a-
28c, and section 37a(1) of the Subsoil Act, contains the following commencement provision:
Section 9
(1) This Act shall come into force on the day after the promulgation in the Danish Law Gazette.
Subsection (2) omitted.
Act no. 1400 of 27 December 2008 to amend various Acts within the administrative sphere of the
Ministry of Climate and Energy, 8) section 2 of which amended section 34a of the Subsoil Act,
contains the following commencement provision.
Section 9
This Act shall come into force on 1 January 2009.
Act No. 718 of 25 June 2010 to amend the Insolvency Act and various other Acts, of which section
51 amended section 30(1)(iii) of the Subsoil Act, contains the following commencement provision:
Section 55
(1) The Minister of Justice shall determine when the Act shall come into force.9)
(2)-(10) (Omitted)

Act No. 541 of 30 May 2011 to amend the Act on the Use of the Danish Subsoil,10) which
amended section 1(3), section 2a, section 5(4), section 10, section 12a(3), section 13(2), section 16,
sections 18a-18d, sections 23-23v, sections 28a, 28b, 37a and 37b, contains the following commencement
provision:
Section 2
(1) This Act shall come into force on 1 June 2011.
(2) (Omitted)
The Danish Energy Agency, 13 September 2011
IB LARSEN
/Jens Skov-Spilling
2) The Amendment Act contains provisions implementing the Directive of the European Parliament and of the Council on the conditions for granting
and using authorizations for the prospection, exploration and production of hydrocarbons (the Hydrocarbons Licensing Directive), and parts of the
Council Directive on the assessment of the effects of certain public and private projects on the environment (the EIA Directive).
3) The Amendment Act implements the Convention of 25 June 1999 on Access to Information, Public Participation in Decision-making and Access to
Justice in Environmental Matters (the Aarhus Convention).
4) The Amendment Act authorizes The Minister for Climate and Energy to enter into agreements with other countries to coordinate the exploration for
and production of hydrocarbon accumulations extending into the sovereign territory of the relevant country (border-straddling accumulations). In
addition, the Amendment Act modernizes and clarifies the rules regarding the reimbursement of public authority expenditure for administrative case
handling under the Subsoil Act.
5) The Amendment Act, which came into force on 31 December 2003, implements the agreement of 29 September 2003 made between the Minister
for Economic and Business Affairs and A.P. Møller – Mærsk A/S regarding exploration and production of hydrocarbons in the Danish subsoil. The
amendment permits licences for exploration and production that already from the date of issue have a longer duration, but no more than 50 years, than
permitted under the provisions hitherto. In addition, the Amendment Act renders it possible to extend existing licences beyond 50 years.
6) Pursuant to the Danish Act on Due Process Protection in connection with the Public Administration’s Use of Compulsory Measures and Duties of
Disclosure the supervisory authority must deem an imminent risk of inappropriate exploitation of the subsoil to exist for the supervisory authority to
have access to the licensee’s business without a prior court order.
7) The Amendment Act, which came into force on 8 June 2007, contains provisions implementing parts of the Council Directive on the conservation
of natural habitats and of wild fauna and flora (the Habitats Directive) and parts of the Council Directive on the conservation of wild birds (the Birds
Directive).
8) The Amendment Act authorizes the Minister for Climate and Energy to lay down rules regarding an exemption from the obligation to include
records of technical specifications, etc. in the Danish Law Gazette.
9) Section 51 of Act no. 718 of 25 June 2010 to amend the Insolvency Act and various other Acts came into force on 1 April, see Executive Order No.
208 of 15 March 2011 on the Commencement of the Amendment of the Insolvency Act and various other Acts (Restructuring, etc.)
10) The amendment implements parts of the Directive of the European Parliament and of the Council on the promotion of the use of energy from
renewable sources and parts of the Directive of the European Parliament and of the Council on the geological storage of carbon dioxide. Moreover,
the amendment makes it possible for the Minister to refuse to consider an application for the exploration for and production of one or more raw
materials where such activities cannot be expected to be compatible with other ongoing or planned use of the subsoil or with appropriate exploitation
of the subsoil in other respects. At the same time, it is proposed that various provisions regarding the granting of licences for the exploration for and
production of geothermal energy be laid down. Furthermore, the provision authorizing the Minister to stipulate coordinated production and utilization
of installations for producing and transporting oil and gas has been revised.

DIRECTIVE 94/22/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 30
May 1994 on the conditions for granting and using authorizations for the prospection, exploration
and production of hydrocarbons
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty establishing the European Community and in particular Article 57, first
and third sentences, Articles 66 and 100a thereof,
Having regard to the proposal from the Commission,
Having regard to the opinion of the Economic and Social Committee,
Acting in accordance with the procedure referred to in Article 189b of the Treaty,
Whereas the internal market comprises an area without internal frontiers in which the free
movement of goods, services, persons and capital is ensured; whereas the necessary measures must
be adopted for its operation;
Whereas in its resolution of 16 September 1986, the Council identified as an objective of the energy
policy of the Community and the Member States the greater integration, free from barriers to trade,
of the internal energy market with a view to improving security of supply, reducing costs and
improving economic competitiveness;
Whereas the Community largely depends on imports for its hydrocarbon supply; whereas it is
consequently advisable to encourage the best possible prospection, exploration and production of
the resources located in the Community;
Whereas Member States have sovereignty and sovereign rights over hydrocarbon resources on their
territories;
Whereas the Community is a signatory to the United Nations Convention on the Law of the Sea;
Whereas steps must be taken to ensure the non-discriminatory access to and pursuit of activities
relating to the prospection, exploration and production of hydrocarbons under conditions which
encourage greater competition in this sector and thereby to favour the best prospection, exploration
and production of resources in Member States and to reinforce the integration of the internal energy
market;
Whereas, for this purpose, it is necessary to set up common rules for ensuring that the procedures
for granting authorizations for the prospection, exploration and production of hydrocarbons must be
open to all entities possessing the necessary capabilities; whereas authorizations must be granted on
the basis of objective, published criteria; whereas the conditions under which authorizations are
granted must likewise be known in advance by all entities taking part in the procedure;
Whereas Member States must retain the options to limit the access to and the exercise of these
activities for reasons justified by public interest and to subject to the payment of a financial
contribution or a contribution in hydrocarbons, the detailed arrangements of the said contribution
having to be fixed in such a way as not to interfere in the management of entities; whereas these
options must be used in a non-discriminatory way; whereas, with the exception of the obligations
related to the use of this option, steps must be taken to avoid imposing on entities, conditions and

obligations which are not justified by the need to perform this activity properly; whereas the
activities of entities must be monitored only to the extent necessary to ensure their compliance with
these obligations and conditions;
Whereas the extent of the areas covered by an authorization and the duration of the authorization
must be limited with a view to preventing the reservation to a single entity of an exclusive right
over an area which can be prospected, explored and brought into production more efficiently by
several entities;
Whereas Member States' entities should enjoy in third countries a treatment comparable to that
enjoyed by third countries' entities in the Community by virtue of this Directive; whereas it is
necessary to lay down a procedure to this end;
Whereas this Directive should apply to authorizations issued after the date by which Member States
have to bring into force the laws, regulations and administrative provisions necessary to comply
with this Directive;
Whereas Council Directive 90/531/EEC of 17 September 1990 on the procurement procedures of
entities operating in the water, energy, transport and telecommunications sectors and Council
Directive 93/38/EEC of 14 June 1993 coordinating the procurement procedures of entities operating
in the water, energy, transport and telecommunications sectors apply to the entities in the energy
sector as regards their procurement of supplies, of works and of services; whereas the application of
the alternative arrangements provided for under Article 3 of Directive 90/531/EEC is subject in
particular to the condition that, in the Member State requesting the application of these
arrangements, authorizations be granted in a non-discriminatory and transparent manner; whereas a
Member State fulfils this condition from the moment when and for as long as it complies with the
requirements of this Directive; whereas it is consequently necessary to amend Directive
90/531/EEC;
Whereas Article 36 of Directive 90/531/EEC provides for a review within four years, in the light of
developments concerning in particular progress in market opening and the level of competition, of
the field of application of that Directive. This review of the field of application includes
hydrocarbon exploration and extraction;
Whereas Denmark is in a special situation, due to the fact that it is obliged to enter into negotiations
on a possible continuation of the activities after the expiry of the concession, issued on 8 July 1962,
concerning the areas which are relinquished on 8 July 2012 and that Denmark will thus be accorded
a derogation concerning these areas,
HAVE ADOPTED THIS DIRECTIVE:
For the purposes of this Directive:
Article 1
1. ‘competent authorities’ means the public authorities, as defined in Article 1 (1) of Directive
90/531/EEC, which are responsible for granting authorization and/or monitoring use thereof;
2. ‘entity’ means any natural or legal person or any group of such persons which applies for, is
likely to apply for or holds an authorization;

3. ‘authorization’ means any law, regulation, administrative or contractual provision or instrument
issued there under by which the competent authorities of a Member State entitle an entity to
exercise, on its own behalf and at its own risk, the exclusive right to prospect or explore for or
produce hydrocarbons in a geographical area. An authorization may be granted for each activity
separately or for several activities at a time;
4. ‘public entity’ means a public undertaking as defined in Article 1 (2) of Directive 90/531/EEC.
Article 2
1. Member States retain the right to determine the areas within their territory to be made available
for the exercise of the activities of prospecting, exploring for and producing hydrocarbons.
2. Whenever an area is made available for the exercise of the activities set out in paragraph 1,
Member States shall ensure that there is no discrimination between entities as regards access to and
exercise of these activities.
However, Member States may refuse, on grounds of national security, to allow access to and
exercise of these activities to any entity which is effectively controlled by third countries or third
country nationals.
Article 3
1. Member States shall take the necessary measures to ensure that authorizations are granted
following a procedure in which all interested entities may submit applications in accordance either
with paragraph 2 or 3.
2. This procedure shall be initiated:
(a) either at the initiative of the competent authorities by means of a notice inviting applications, to
be published in the Official Journal of the European Communities at least 90 days before the
closing date for applications;
(b) or by means of a notice inviting applications, to be published in the Official Journal of the
European Communities following submission of an application by an entity without prejudice to
Article 2 (1). Other interested entities shall have a period of at least 90 days after the date of
publication in which to submit an application.
Notices shall specify the type of authorization, the geographical area or areas in part or all of which
an application has been or may be made and the proposed date or time limit for granting
authorization.
Where preference is given to applications by entities which are single natural or legal persons, the
notice shall so specify.
3. Member States may grant authorizations without initiating a procedure under paragraph 2 where
the area for which authorization is requested:
(a) is available on a permanent basis; or

(b) has been the subject of a previous procedure according to paragraph 2 which has not resulted in
the grant of an authorization; or
(c) has been relinquished by an entity and does not fall automatically under (a).
A Member State wishing to apply this paragraph shall within three months of the adoption of this
Directive or, in case of Member States who have not yet introduced such procedures, without delay
arrange for the publication in the Official Journal of the European Communities of a notice
indicating the areas within its territory which are available under this paragraph and where detailed
information in this regard can be obtained. Any significant change in this information shall be the
subject of an additional notice. However, no application for an authorization under this paragraph
can be considered until after the publication of the relevant notice under this text.
4. A Member State may decide not to apply the provisions of paragraph 1 if and to the extent that
geological or production considerations justify the granting of the authorization for an area to the
holder of an authorization for a contiguous area. The Member State concerned shall ensure that the
holders of authorizations for any other contiguous areas are able to submit applications in such a
case and are given sufficient time to do so.
5. The following shall not be considered as the grant of an authorization within the meaning of
paragraph 1:
(a) the grant of an authorization solely by reason of a change of name or ownership of an entity
holding an existing authorization, a change in the composition of such an entity or a transfer of an
authorization;
(b) the grant of an authorization to an entity having another form of authorization where the
possession of the latter authorization implies a right to the grant of the former authorization;
(c) the decision of the competent authorities taken within the framework of an authorization
(whether or not such authorization was granted before the date fixed in Article 14) and relating to
the commencement, interruption, prolongation or cessation of the activities or to the prolongation of
the authorization itself.
6. Notwithstanding the initiation of the procedures mentioned in paragraph 2, Member States retain
the option to refuse the granting of authorizations, whilst ensuring that this option does not give rise
to discrimination between entities.
Article 4
Member States shall take the necessary measures to ensure that:
(a) if the geographical areas are not delimited on the basis of a prior geometric division of the
territory, the extent of each area is determined in such a way that it does not exceed the area
justified by the best possible exercise of the activities from the technical and economic points of
view. In the case of authorizations granted following the procedures laid down in Article 3 (2),
objective criteria shall be established to this end and shall be made available to the entities prior to
the submission of applications;
(b) the duration of an authorization does not exceed the period necessary to carry out the activities
for which the authorization is granted. However, the competent authorities may prolong the

authorization where the stipulated duration is insufficient to complete the activity in question and
where the activity has been performed in accordance with the authorization;
(c) entities do not retain exclusive rights in the geographical area for which they have received an
authorization for longer than is necessary for the proper performance of the authorized activities.
Article 5
Member States shall take the necessary measures to ensure that:
1. authorizations are granted on the basis of criteria concerning, in all cases:
(a) the technical and financial capability of the entities; and
(b) the way in which they propose to prospect, to explore and/or to bring into production the
geographical area in question;
and, where applicable:
(c) if the authorization is put up for sale, the price which the entity is prepared to pay in order to
obtain the authorizations;
(d) if, following evaluation under the criteria (a), (b) and, where applicable, (c), two or more
applications have equal merit, other relevant objective and non-discriminatory criteria, in order to
make a final choice among these applications.
The competent authorities may also take account, when appraising applications, of any lack of
efficiency and responsibility displayed by the applicants in operations under previous
authorizations.
Where the competent authorities determine the composition of an entity to which they may grant an
authorization, they shall make that determination on the basis of objective and non-discriminatory
criteria.
Where the competent authorities determine the operator of an entity to which they may grant an
authorization, they shall make that determination on the basis of objective and non-discriminatory
criteria.
The criteria shall be drawn up and published in the Official Journal of the European Communities
before the start of the period for submission of applications. Member States which have already
published the criteria in their official journals may limit the publication in the Official Journal of the
European Communities to a reference to the publication in their official journals. However, any
change in criteria shall be published in full in the Official Journal of the European Communities;
2. the conditions and requirements concerning the exercise or termination of the activity which
apply to each type of authorizations by virtue of the laws, regulations and administrative provisions
in force at the time of submission of the applications, whether contained in the authorization or
being one of the conditions to be accepted prior to the grant of such authorization, are established
and made available to interested entities at all times. In the case provided for in Article 3 (2) (a),
they may be made available only from the date starting from which applications for authorization
may be submitted;

3. any changes made to the conditions and requirements in the course of the procedure are, notified
to all interested entities;
4. the criteria, conditions and requirements referred to in this Article are applied in a
non-discriminatory manner;
5. any entity whose application for an authorization is unsuccessful is, if the entity so wishes,
informed of the reasons for the decision.
Article 6
1. Member States shall ensure that the conditions and requirements referred to in Article 5 (2) and
the detailed obligations for use of a specific authorization are justified exclusively by the need to
ensure the proper performance of the activities in the area for which an authorization is requested,
by the application of paragraph 2 or by the payment of a financial contribution or a contribution in
hydrocarbons.
2. Member States may, to the extent justified by national security, public safety, public health,
security of transport, protection of the environment, protection of biological resources and of
national treasures possessing artistic, historic or archaeological value, safety of installations and of
workers, planned management of hydrocarbon resources (for example the rate at which
hydrocarbons are depleted or the optimization of their recovery) or the need to secure tax revenues,
impose conditions and requirements on the exercise of the activities set out in Article 2 (1).
3. The rules for payment of contributions referred to in paragraph 1, including any requirement for
State participation, shall be fixed by Member States in such a way as to ensure that the
independence of management of entities is maintained.
However, where the grant of authorizations is subject to the State's participation in the activities and
where a legal person has been entrusted with the management of this participation or where the
State itself manages the participation, neither the legal person nor the State shall be prevented from
assuming the rights and obligations associated with such participation, equivalent to the importance
of the participation provided that the legal person or the State shall not be party to information nor
exercise any voting rights on decisions regarding sources of procurement for entities, that the legal
person or the State in combination with any public entity or entities shall not exercise a majority
voting right on other decisions and that any vote by the State or the legal person shall be based
exclusively on transparent, objective and non-discriminatory principles, and shall not prevent the
management decisions of the entity from being based on normal commercial principles.
However, the provisions of the preceding sub-paragraph shall not prevent the legal person or the
State from opposing a decision by the holders of an authorization which would not respect the
conditions and requirements, specified in the authorization, regarding depletion policy and
protection of the financial interests of the State.
The option to oppose a decision shall be exercised in a non-discriminatory manner, particularly
regarding investment decisions and sources of supply of entities. Where the State's participation in
the activities is managed by a legal person which also holds the authorizations, the Member State
shall put in place arrangements requiring that legal person to keep separate accounts for its
commercial role and its role as manager of the State's participation and guaranteeing that there is no
flow of information from the part of the legal person responsible for the management of the State's

participation to the part of the legal person which holds authorizations in its own right. However,
where the part of the legal person responsible for the management of the State's participation
engages the part of the legal person which holds authorization as a consultant, the former may make
available any information which is necessary for the consultancy work to be carried out. The
holders of all authorizations to which the information relates shall be informed in advance of what
information will be given in this way and shall be given sufficient time to raise objections.
4. Member States shall ensure that the monitoring of entities under an authorization is limited to
that necessary to ensure compliance with the conditions, requirements and obligations referred to in
paragraph 1. In particular, they shall take the measures necessary to ensure that no entity is
required, by any law, regulation or administrative requirement, or by any agreement or undertaking,
to provide information on its intended or actual sources of procurement, except at the request of the
competent authorities and exclusively with a view to the objectives set out in Article 36 of the
Treaty.
Article 7
Without prejudice to the provisions concerning or contained in individual authorizations and to the
provisions of Article 3 (5) (b) legal, regulatory and administrative provisions which reserve to a
single entity the right to obtain authorizations in a specific geographical area within the territory of
a Member State shall be abolished by the Member States concerned before 1 January 1997.
Article 8
1. Member States shall inform the Commission of any general difficulty encountered, de jure or de
facto, by entities in access to or exercise of the activities of prospecting, exploring for and
producing hydrocarbons in third countries, which have been brought to their attention. Member
States and the Commission shall ensure that commercial confidentiality is respected.
2. The Commission shall report to the European Parliament and the Council before 31 December
1994, and periodically thereafter, on the situation of entities in third countries and on the state of
any negotiations undertaken pursuant to paragraph 3 with those countries or in the framework of
international organizations.
3. Whenever the Commission establishes, either on the basis of the reports referred to in paragraph
2 or on the basis of other information, that a third country is not granting Community entities, as
regards access to or exercise of the activities referred to in paragraph 1, treatment comparable to
that which the Community grants entities from that third country, the Commission may submit
proposals to the Community for the appropriate mandate for negotiation with a view to obtaining
comparable competitive opportunities for Community entities. The Council shall decide by
qualified majority.
4. In the circumstances described in paragraph 3, the Commission may at any time propose that the
Council authorize one or more Member States to refuse an authorization to an entity which is
effectively controlled by the third country concerned and/or by nationals of that third country.
The Commission may make such a proposal on its own initiative or at the request of a Member
State.
The Council shall act by qualified majority as soon as possible.

5. Measures taken pursuant to this Article shall be without prejudice to the Community's obligations
under any international agreement governing access to an exercise of the activities of prospecting,
exploring for and producing hydrocarbons.
Article 9
Each Member State shall publish and communicate to the Commission an annual report which shall
include information on the geographical areas which have been opened for prospecting, exploration
and production, authorizations granted, entities holding authorizations and the composition thereof
and the estimated reserves contained in its territory.
This provision does not imply any obligation for Member States to publish information of a
commercially confidential nature.
Article 10
Member States shall notify the Commission, no later than 1 May 1995, of the competent authorities.
Member States shall notify the Commission without delay of any subsequent changes. The
Commission shall publish the list of competent authorities and any changes thereto in the Official
Journal of the European Communities.
Article 11
This Directive applies to authorizations granted from the date laid down in Article 14.
Article 12
The following paragraph shall be added to Article 3 of Directive 90/531/EEC:
‘5. As regards the exploitation of geographical areas for the purpose of prospecting for or extracting
oil or gas, paragraphs 1 to 4 shall apply as follows from the date on which the Member State
concerned has complied with the provisions of the European Parliament and Council Directive
94/22/EC of 30 May on the conditions for granting and using authorizations for the prospection,
exploration and production of hydrocarbons: (a) the conditions laid down in paragraph 1 shall be
considered to be satisfied with effect from that date without prejudice to paragraph 3; (b) with effect
from that date, the Member State referred to in paragraph 4 shall be required to communicate only
the provisions relating to compliance with the conditions referred to in paragraphs 2 and 3.’
Article 13
The provisions of Articles 3 and 5 shall not apply to new authorizations granted by Denmark before
31 December 2012, in respect of the areas which are relinquished on 8 July 2012 upon expiry of the
authorization issued on 8 July 1962. The new authorizations shall be granted on the basis of
objective and non-discriminatory principles.
Consequently, this Article shall not create any precedent for Member States.
Article 14
Member States shall bring into force the laws, regulations and administrative provisions necessary
to comply with this Directive by 1 July 1995. They shall forthwith inform the Commission thereof.

When Member States adopt these measures they shall contain a reference to this Directive or shall
be accompanied by such reference at the time of their official publication. The methods of making
such reference shall be laid down by Member States.
Article 15
This Directive shall enter into force on the day of its publication in the Official Journal of the
European Communities.
This Directive is addressed to the Member States.
Done at Brussels, 30 May 1994.
For the European Parliament
The President
E. KLEPSCH
For the Council
The President
C. SIMITIS
Article 16

Act on Safety, etc. for Offshore Installations for Exploration, Extraction and
Transport of Hydrocarbons (Offshore Safety Act) i
(Unofficial translation. In case of discrepancy, the original Danish text shall prevail)
Act No. 1424 of December 21, 2005 with subsequent amendments. Non-authorised compilation.
This compilation comprises:
� Act No. 1424 of December 21, 2005 that came into force on July 1, 2006.
� Act No. 107 of February 7, 2007 that came into force on February 9, 2007.
� Section 32 in Act No. 512 of June 6, 2007 that came into force on August 15, 2007.
� Section 1 in Act No. 1400 of December 27, 2008 that came into force on January 1, 2009.
WE, MARGRETHE THE SECOND, by the Grace of God Queen of Denmark, Make Known: The Folketing has
passed and We have granted our Royal Assent to the following act:
Part I
Object, Scope and Definitions
1. The object of this Act is
i) to promote a high level for health and safety offshore which is in keeping with the technical and
social development of society, and
ii) to form a framework for making it possible for the companies to solve health and safety issues
offshore themselves.
2. Offshore installations that are subject to this Act shall be construed as:
i) Platforms or other facilities,
a) from where exploration or extraction of hydrocarbons is carried out from the subsoil below
the seabed,
b) used for accommodation of persons employed on or at the facilities mentioned in a) above,
or
c) used in connection with transport of hydrocarbons and other substances and materials
through pipelines between the platforms and facilities mentioned in a) above or between
these and onshore installations.
ii) Facilities used for storage and offloading of hydrocarbons produced by a facility mentioned in i)
a) and which is permanently attached to such a facility.
(2) Vessels are not covered by the definition in subsection (1) except for drill ships and floating
production, storage and offloading units, cf. however section 3(3), (4) and (5).
(3) A mobile offshore installation shall be construed as any offshore installation which can be
moved from one position to another by moving or towage and which is intended to be used on
various positions during its lifetime.
(4) A fixed offshore installation shall be construed as any offshore installation which is not a
mobile offshore installation.

(5) Fixed offshore installations, which are bridge linked to each other and have the same licensee
or owner, shall be regarded as one installation.
3. This Act shall apply to offshore installations situated in Danish territorial waters or on the
Danish continental shelf and to fixed offshore installations that are planned to be used in these
areas.
(2) The Minister for Transport and Energy can lay down rules as to what extent sections 5-10, 12-
15, 18-23, 25-27, 28(1), 29, 31, 33-35, 37, 40(1), 41-43, 45(4), 45(5), 52, 56, 57, 59-62 and 64-77
within the territorial waters and continental shelf, including belts and sounds, shall apply to
pipelines used in connection with transport of hydrocarbons and other substances and materials
through pipelines between offshore installations and onshore installations or between several
offshore installations.
(3) The Minister for Transport and Energy can lay down rules as to what extent sections 5(2), 7, 8,
11-17, 20-24, 25(1), 26, 34, 36, 37, 40(1), 41-43, 45(1)-45(3),45(5), 46, 48-50, 52(1), 59 and 61-77
shall apply to accommodation on vessels and facilities that are not subject to the definition in
section 2(1), and on which persons working on an offshore installation are accommodated, to the
extent that it is significant for the health and safety of accommodated persons.
(4) Vessels and facilities, mentioned in subsection (3) and on which persons working on an
offshore installation are accommodated for a longer period of time, shall further be subject to
section 38(3) and 43.
(5) The Minister for Transport and Energy can lay down rules as to what extent sections 5(2), 7-
18, 20-22, 24, 25(1), 25(3), 26, 33(2), 34, 35, 37, 40(1), 41-43, 45(1)-45(3), 45(5), 46, 48-50, 52(1),
53-55, 59-62 and 64-77—for vessels and facilities other than those mentioned in subsection (3) and
(4) above, which are not subject to the definition in section 2(1) and which carry on activities
connected with offshore installations—shall apply to the activities that are carried out from here and
to the equipment used, to the extent that the activities or the equipment affect the health and safety
conditions on adjoining offshore installations.
4. Licensee shall be construed as the company or group of companies that have permission for
exploration and production (extraction) of hydrocarbons pursuant to the Act on the Use of
Denmark’s Subsoil. For pipelines where there is no licensee as referred to in the first sentence
hereof, the owner of the pipeline shall be considered licensee.
(2) Operator shall be construed as the company that, on behalf of the licensee, carries out
exploration and extraction of hydrocarbons, including transport of hydrocarbons through pipelines.
(3) Operating company shall be construed as the company that is responsible for the day-to-day
operation of an offshore installation, a pipeline, cf. section 3(2), or a vessel or other facilities, cf.
section 3(5). For vessels and facilities covered by section 3(3) and (4), the operating company shall
be construed as the company that is responsible for the day-to-day operation of the offshore
installation on which the persons accommodated on the vessel or facility are working.
(4) Contractor shall be construed as the company carrying out work for another company.
(5) Employer shall be construed as the company that is authorised to instruct the employees who
carry out work on offshore installations.
(6) Company manager shall be construed as any person who by virtue of his position participates
in the ordinary, general management of the company.
(7) Supervisor shall be construed as any person whose work solely or essentially consists of
managing or supervising the work on behalf of his employer in his company or part thereof.
(8) Offshore installation manager shall be construed as the supervisor who, on behalf of the
operating company, is in charge of the day-to-day operation of an offshore installation.

Part II
General Duties
Distribution of Responsibility between the Individual Types of Companies
5. The licensee shall ensure that health and safety risks on an offshore installation, covered by
section 2(1)(i)(a) and (b), and (ii), have been identified, assessed and reduced as much as reasonably
practicable.
(2) The licensee shall ensure that the operator can fulfil the health and safety duties that rest with
him.
(3) For offshore installations that are subject to section 2(1)(i)(c), the duty pursuant to subsection
(1) shall rest with the owner of the installation.
(4) For combinations of the offshore installations mentioned in subsections (1) and (3), the duty
pursuant to subsection (1) shall rest with the licensee and owner together.
(5) The owner pursuant to subsection (3) shall ensure that the operating company is in a position
to fulfil the health and safety duty that rest with the company.
6. The licensee shall ensure that supervision is carried out as to whether operation of an offshore
installation which is subject to section 2(1)(i)(a) and (b), and ii), takes place in accordance with this
Act and rules laid down pursuant to the said Act.
(2) For offshore installations that are subject to section 2(1)(i)(c), the duty pursuant to subsections
(1) and (2) shall rest with the owner of the installation.
(3) For combinations of the offshore installations mentioned in subsection (1) and (2), the duty
pursuant to subsection (1) shall rest with the licensee or owner together.
7. The operator shall ensure that the necessary health and safety instructions are given to
contractors working for the operator, especially to the operating company in cases where this
company is not the operator. Furthermore, the operator shall ensure that supervision is carried out as
to whether these companies plan and carry out their work in accordance with the requirements of
the legislation and as to whether the health and safety risks have been identified, assessed and
reduced as much as reasonably practicable.
8. On manned offshore installations the operating company shall appoint an offshore installation
manager.
(2) The operating company shall ensure that the necessary health and safety instructions are given
to contractors working for the operating company. Furthermore, the operating company shall ensure
that supervision is carried out as to whether these companies plan and carry out their work in a
manner that identifies, assesses and reduces health and safety risks as much as reasonably
practicable.
(3) The operating company shall ensure that work to promote health and safety, which is carried
out by several contractors on the offshore installation, is co-ordinated and that the offshore
installation manager can fulfil the special duties that rest with him.
(4) The operating company shall ensure that health and safety risks on the offshore installation
have been identified, assessed and reduced as much as reasonably practicable before the installation
commences operation.
(5) The operating company shall ensure that equipment, before put into service, fulfils existing
legislation.

(6) The operating company shall ensure that health risks in connection with use of substances and
materials have been identified, assessed and reduced as much as reasonably practicable.
9. The individual contractor shall ensure that the necessary health and safety instructions are given
to contractors working for him. Furthermore, the contractor in question shall ensure that supervision
is carried out as to whether these companies plan and carry out their work in a manner that
identifies, assesses and reduces health and safety risks as much as reasonably practicable.
Distribution of Responsibility within the Individual Companies with Employees
10. The employer shall ensure that health and safety risks connected with the work have been
identified, assessed and reduced as much as reasonably practicable.
(2) The employer shall ensure that supervision is carried out as to whether the risks referred to in
subsection (1) have been identified, assessed and reduced as much as reasonably practicable.
(3) The employer shall inform his employees of the health and safety risks that may be connected
with their work. Furthermore, the employer shall ensure that his employees receive the necessary
training and instructions in performing their work so as to identify, assess and reduce the risks as
much as reasonably practicable.
(4) If conditions speak in favour of this, the employer shall make sure that surveys, tests and
inspections, possibly by experts, are carried out to find out whether the duties referred to in
subsection (1) have been fulfilled.
(5) If there are more than one employer on the same offshore installation, these employers shall
co-operate with each other on conditions that are important to health and safety. This co-operation
shall be established by the operating company, cf. section 8(3).
(6) The provisions in subsections (1)-(5) on the duties of the employer shall also apply to
company managers.
11. The offshore installation manager shall be overall responsible for the health and safety
conditions on the offshore installation and ensure that the installation is operated in accordance with
existing legislation.
(2) The offshore installation manager shall ensure that health and safety risks in connection with
the activities on the installation have been identified, assessed and reduced as much as reasonably
practicable.
(3) The offshore installation manager shall ensure that operation, maintenance and changes of the
installation take place in accordance with the management system mentioned in section 20 below.
(4) If the offshore installation manager becomes aware of conditions that imply a risk of accidents
or illness, he shall make sure that such risk is removed or reduced.
12. Each supervisor shall assist in identifying, assessing and reducing health and safety risks in
connection with the work as much as reasonably practicable within his own work area. The
supervisor shall ensure that measures taken to reduce such health and safety risks have the desired
effect.
(2) If the supervisor becomes aware of conditions that imply a risk of accidents or illness, the
supervisor shall ensure that this risk is removed or reduced. If the risk cannot be removed or
reduced by intervention on site, the offshore installation manager shall be informed of this
immediately.
(3) The supervisor shall participate in the co-operation on health and safety, cf. section 46 below.

13. The employees shall participate in the co-operation on health and safety, cf. section 46 below.
Furthermore, the employees shall assist in identifying, assessing and reducing the health and safety
risks as much as reasonably practicable within their own work area, and ensure that measures taken
to reduce such health and safety risks have the desired effect.
(2) If the employees become aware of conditions that imply a risk of accidents or illness, which
they cannot correct themselves, they shall inform their supervisor, offshore installation manager or
the employee who represent them in health and safety matters.
(3) An employee shall be entitled to leave his workplace or a hazardous area in case of a serious
or immediate danger that cannot be avoided.
(4) The employee shall not be subject to a reduction of his conditions of employment due to the
fact that the employee leaves his workplace or a hazardous area, cf. subsection (3).
(5) Employees whose rights are infringed pursuant to subsection (4) can be awarded
compensation.
14. The employer shall ensure that an employee, in consideration of his knowledge and access to
work equipment can take appropriate measures himself with a view to avoiding consequences of a
serious and immediate danger to his own or others’ safety when it is not possible to contact the
supervisor or the offshore installation manager.
(2) The employee shall not be subject to a reduction of his employment conditions due to the fact
that the employee has initiated measures pursuant to subsection (1), unless the employee in that
connection has acted intentionally or grossly negligently.
(3) Employees whose rights have been infringed pursuant to subsection (2) can be awarded
compensation.
15. The provisions in section 13(3)-(5) and section 14 shall not apply if a collective agreement
gives an employee similar or better rights.
16. All persons on board an offshore installation shall conform to the procedures that are
determined for work and stay on the installation and respect the measures taken concerning health
and safety matters.
17. The Minister for Transport and Energy can lay down detailed rules on the duties of the
employer, offshore installation manager and other supervisors as well as employees.
Suppliers, etc.
18. Suppliers, etc. transferring or handing over machines, machine parts, containers, prefabricated
structures, apparatuses, tools, other equipment or substances and materials for use on the installation
shall ensure that the equipment as well as substances and materials conform to existing EU
legislation on arrangement, packaging and labelling when handed over. Furthermore, suppliers, etc.
transferring or handing over shall ensure that data sheets as well as instructions in the use of the
equipment or substances and materials and in maintenance, transport and installation of the
equipment are included on delivery and conform to existing EU legislation as regards health and
safety matters.
(2) If equipment is made for use on an offshore installation according to the recipient’s written,
detailed instructions, the duties pursuant to subsection (1) shall rest with the recipient.
(3) If machines, machine parts, containers, prefabricated structures, apparatuses, tools, other
equipment or substances and materials are delivered to an offshore installation from a supplier
outside the EU, the duties pursuant to subsection (1) shall rest with the recipient.

(4) The person inviting tenders for services shall ensure when preparing his tender documents that
health and safety in connection with performance of the work are considered. Furthermore, the
person inviting tenders shall ensure that the tender documents contain relevant information about
special, essential health and safety matters connected with the performance of the work with a view
to the person performing the task becoming acquainted with this.
(5) The person inviting tenders shall otherwise assist in ensuring that the task put up for tender
can be performed justifiably in terms of health and safety by the employer who has been awarded
the contract.
(6) The Minister for Transport and Energy can lay down more specific rules on the duties
pursuant to subsections (1)-(5) above.
Part III
Management of Health and Safety
Management System for Health and Safety
19. For fixed offshore installations the operator shall ensure that a management system for health
and safety is established and maintained, ensuring and documenting that the design, fabrication,
installation, change or dismantling of the installation conform to requirements laid down in or
pursuant to this Act.
(2) The management system shall be based on recognised norms and standards for management
systems or other similar systems and shall be established before planning or dismantling of the
installation is commenced.
(3) The operator shall ensure supervision of compliance with the management system.
20. The operating company shall establish and maintain a management system for health and
safety, which ensures and documents that offshore installations, their condition, operation and
maintenance as well as the performance of the work conform to the health and safety requirements
laid down in or pursuant to this Act.
(2) The management system shall be based on recognised norms and standards for management
systems or other similar systems and shall be established before operation of the installation is
commenced.
(3) The operating company shall ensure supervision of compliance with the management system.
21. Independent verification that the installation, parts thereof or its equipment fulfil requirements
laid down in or pursuant to this Act can partially replace the systems mentioned in sections 19 and
20.
(2) Such verification shall be made by experts recognised by the supervisory body.
22. The Minister for Transport and Energy may lay down more specific rules on the contents of
the systems mentioned in sections 19 and 20, including rules on reporting routines as well as audit
and control procedures. Furthermore, the Minister for Transport and Energy can lay down more
specific rules on the verification system referred to in section 21 above, including rules determining
that some parts of the installation must be verified.
Health and Safety Case
23. The operator shall ensure that a health and safety case is prepared for a fixed offshore
installation which, as a minimum includes:

i) Identification of the risks that are connected with the offshore installation, including any activity
in connection with the offshore installation and its dismantling, and which may have serious
consequences for the health and safety of the employees
ii) Assessment of the risks mentioned in i).
iii)Particulars to demonstrate that the risks mentioned in i) have been identified, assessed and
reduced as much as reasonably practicable, including that the maximum and minimum manning
for operation of the installation have been determined and that an efficient and controlled
evacuation of the offshore installation can take place in critical situations.
iv) Particulars to demonstrate that the management system, cf. sections 19 and 20, ensures and
documents that the requirements in this Act and in rules laid down pursuant to this Act are
complied with in normal as well as critical situations.
(2) The health and safety case shall be prepared in connection with the design of a fixed offshore
installation and contain the information mentioned in subsection (1), to the extent that it is possible
at the time of design.
(3) The health and safety case shall be updated regularly concurrently with details concerning
health and safety matters becoming available in connection with design, fabrication, installation,
operation and dismantling of the installation.
24. The operating company shall ensure that a health and safety case is prepared for a mobile
offshore installation which, as a minimum, includes:
i) Identification of the risks that are connected with the offshore installation, including any activity
in connection with the offshore installation and which may have serious consequences for the
health and safety of the employees.
ii)Assessment of the risks mentioned in i).
iii) Particulars to demonstrate that the risks mentioned in i) have been reduced as much as
reasonably practicable, including that the maximum and minimum manning for operation of the
installation have been determined and that an efficient and controlled evacuation of the offshore
installation can take place in critical situations.
iv) Particulars to demonstrate that the management system, cf. section 20, ensures and documents
that the requirements in this Act and in rules laid down pursuant to this Act are complied with
in normal as well as critical situations.
(2) The health and safety case shall be prepared before the offshore installation is put into
operation.
25. During operation of an offshore installation the operating company shall ensure that the health
and safety case is updated in case of essential changes of the offshore installation, its layout,
equipment or operational conditions.
(2) If operation of a fixed offshore installation is planned to proceed after the expiry of its design
life, it shall be demonstrated in the health and safety case that safety risks originating from the
supporting structures of the installation in the planned operation period have been identified,
assessed and reduced as much as reasonably practicable. The length of the planned operation period
shall appear from the health and safety case.
(3) The health and safety case shall be available on the offshore installation and be accessible to
the management of the installation and its personnel and to the supervising authority.
26. The Minister for Transport and Energy shall lay down more specific rules on the contents of
the health and safety cases mentioned in sections 23 and 24 and on updating of these according to
section 25(1) above.

Approvals, Permits, etc.
27. Before fabrication of a fixed offshore installation is commenced, the operator shall make sure
that approval from the supervising authority of the overall design of the installation is obtained. The
application for this shall be accompanied by the health and safety case mentioned in section 23(1)
and overall schedules for fabrication and installation of the offshore installation.
28. Before operation of an offshore installation is commenced, the operator shall ensure that
permission from the supervising authority has been obtained. The application for this shall include
information about the time of the expected commencement of operation and as for mobile offshore
installations information about the desired duration of the permit and be accompanied by an updated
health and safety case, cf. sections 23 and 24.
(2) The permit for mobile offshore installations pursuant to subsection (1) can be extended upon
application for this accompanied by an updated health and safety case, cf. section 24. Among other
things, the application shall include information about the desired duration of the extension.
(3) The permit for mobile offshore installations pursuant to subsection (1) or the extension
pursuant to subsection (2) can be granted for a period of five years at a maximum.
(4) A document that is accepted or approved by a foreign authority with a content corresponding
to the health and safety case can replace wholly or partly the updated health and safety case
according to a decision made by the supervising authority.
29. The operating company shall, prior to any changes to an offshore installation or the
operational conditions of the installation that will be of essential importance to the risk of major
accidents, obtain permission from the supervising authority. The application for permission shall be
accompanied by an updated health and safety case, cf. section 25(1).
30. Before a mobile offshore installation is moved from one position to another, the operator of
the installation shall inform the supervising authority of the new position.
31. Before a fixed offshore installation subject to section 2(1)(i)(a) and (b), and section 2(1)(ii), is
dismantled, the licensee shall ensure that permission from the supervising authority is obtained. The
application for permission shall be accompanied by an updated health and safety case, cf. section
23.
(2) For offshore installations subject to section 2(1)(i)(c), the duty according to subsection (1)
shall rest with the owner of the installation.
32. At the request of the operating company the supervising authority can promise to grant an
operation permit for a mobile offshore installation, cf. section 28(1) above.
(2) The validity of such promise pursuant to subsection (1) above shall be maximum five years.
(3) The condition for considering such a request pursuant to subsection (1) is that the operating
company pays the expenses incurred by the supervising authority in accordance with rules on
payment laid down pursuant to section 65(2) below.
32 a. The Minister for Transport and Energy can lay down further rules on the contents of an
application according to sections 27, 28(1)-(2), 29 and 31 that requests a promise for the grant of an
operation permit pursuant to section 32, and on the necessity of a permit pursuant to section 29.
Furthermore, the Minister for Transport and Energy can lay down further rules on conditions in
connection with permits and approvals.

Part IV
Construction, Arrangement, Equipment, Operation and Dismantling
Risk Assessment
33. In connection with the design of a fixed offshore installation and changes to this, the operator
shall ensure that the health and safety risks that are connected with the construction, layout,
equipment of the installation and all activities connected with the installations have been identified,
assessed and reduced as much as reasonably practicable. The design shall reasonably consider any
future needs for extension of the capacity and function of the installation. Taking into account the
design life of the installation, among other things, it shall as far as possible be endeavoured to use
the best possible technology.
(2) On entering into an agreement on use of a mobile offshore installation, the operator shall
ensure that the construction, layout and equipment of the installation are fully justifiable in terms of
health and safety.
(3) In connection with planning of changes to a mobile offshore installation, the operating
company shall ensure that the health and safety risks connected with the change have been
identified, assessed and reduced as much as reasonably practicable.
34. The operating company shall in connection with operation of offshore installations ensure that
the health and safety risks connected with the activities on the offshore installation and all activities
connected with the installations have been identified, assessed and reduced as much as reasonably
practicable.
(2) The operating company shall constantly seek to improve the health and safety level through
continued reduction of the health and safety risks mentioned in subsection (1).
35. The individual employer shall, before the work is commenced, ensure that the health and
safety risks in connection with the performance of the work have been identified, assessed and
reduced as much as reasonably practicable.
36. The operating company shall ensure that the health risks on the installation, which are not
related to the performance of the work and layout of workplaces have been identified, assessed and
reduced as much as reasonably practicable.
37. The Minister for Transport and Energy can lay down more specific rules on risk assessment
and current improvement of the health and safety level.
Construction, Arrangement and Equipment
38. In connection with construction of a fixed offshore installation the accommodation shall as far
as possible be separated from the main activities, i.e. drilling and production.
(2) With regard to the danger of fire and explosion, the offshore installation shall be subdivided
into areas according to the degree of danger. The installation shall be constructed and used in
accordance with the subdivision of areas made.
(3) The accommodation of the offshore installations shall be tailored to the number of persons
expected to stay on the installation and shall be arranged so as to ensure that the employees can rest
and recuperate undisturbed so as to make sure that they can attend to their tasks fully justifiably
with regard to health and safety.

39. On permanently manned offshore installations suitable treatment rooms shall be established so
as to ensure that sick and injured persons can receive the necessary treatment before they, if
required, are transported ashore to a hospital or the like.
(2) Access routes on the offshore installation shall be designed so that transport of sick and
injured persons on stretchers to treatment rooms and evacuation sites can take place in an efficient
manner.
40. An offshore installation shall be provided with equipment necessary for fulfilment of the
purpose of the installation. The equipment shall be placed, arranged and be able to be used so as to
reduce the health and safety risks after identification and assessment as much as reasonably
practicable.
(2) The equipment shall be designed and used in accordance with the subdivision of areas, cf.
section 38(2).
41. Current maintenance of the offshore installation shall take place so as to ensure that the
installation and its equipment fulfil the health and safety requirements laid down in this Act or in
rules laid down in pursuance thereof.
42. Recognised norms and standards that are important to health and safety shall be followed in
connection with the conditions mentioned in sections 38-41 above.
(2) Norms and standards according to subsection (1) may be deviated from in cases where it is
convenient for obtaining a higher level of health and safety or to be in keeping with the technical
development. It is presumed by the deviation that health and safety risks are reduced as much as
reasonably practicable.
43. The Minister for Transport and Energy can lay down more specific rules on the structure of
the offshore installation, including rules on separation of the accommodation from drilling and
production activities, subdivision of areas on offshore installations, arrangement of workplaces,
common and treatment rooms on offshore installations, access routes as well as arrangement and
use of equipment.
43 a. The Minister for Climate and Energy can lay down rules specifying that more specific
international decisions and technical specifications concerning requirements to enterprises,
installations, plants, products, etc, which are referred to in regulations issued pursuant to this act,
are not published in the Danish Law Gazette.
(2) The Minister for Climate and Energy shall lay down rules on how information about the
international decisions and technical specifications that are not published in ’the Danish Law
Gazette, cf. subsection 1, can be acquired.
44. The Minister for Transport and Energy can lay down more specific rules on the fact that
international adoptions within the scope of this Act and regulations laid down by recognised
classification agencies, etc. shall apply irrespective of whether they are in Danish.
Emergency Response
45. For all offshore installations an emergency response shall be established to meet the
consequences of accidents.
(2) Before an offshore installation is put into use, a plan for the emergency response mentioned in
subsection (1) shall be made. The plan shall be co-ordinated with the authorities’ rescue and

combating measures, cf. section 59 below, and to the greatest possible extent with emergency
response plans prepared for other offshore installations.
(3) With a view to ensuring efficient rescue and combating efforts, the supervising authorities can
order changes to the plan mentioned in subsection (2).
(4) Operating companies producing hydrocarbons, and operating companies and other companies
carrying on transport of oil or natural gas through pipelines between two or more offshore
installations and land-based installations shall make the necessary planning and take the necessary
measures to secure own offshore installations, pipelines, etc. as well as the natural gas and oil
supply, respectively, in emergency situations and other extraordinary situations.
(5) The Minister for Transport and Energy may lay down more specific rules on the emergency
response measures mentioned in subsection (1), (2) and (4), including rules on co-ordination of the
emergency response of the individual offshore installations with the authorities’ rescue and
combating measures and with the national contingency to safeguard the country’s energy supply.
Health and Safety Activities
46. The operating company shall ensure that the health and safety activities are organised in
collaboration with the employees.
(2) The employees or their representatives shall be involved in the planning of the performance of
the work and planning of changes to the offshore installations as regards health and safety matters,
including the related update of the health and safety case, cf. section 25(1) and (2) above.
(3) The operating company shall defray the expenses connected with tasks performed by the
employees in connection with the collaboration pursuant to subsection (1), including expenses
connected with the related training.
47. On any permanently manned offshore installation the operating company shall ensure that
personnel with the necessary health training and competence form part of the manning with a view
to attending to preventive and therapeutic health tasks.
48. If the operating company does not have the necessary expert knowledge available to attend to
the health and safety work, the operating company shall procure external expert assistance with a
view to ensuring that the health and safety risks have been identified, assessed and reduced as much
as reasonably practicable.
49. The Minister for Transport and Energy can lay down rules on the collaboration mentioned in
section 46(1), including rules on protection of employees attending to tasks in connection with this
collaboration against dismissal or other reduction of their employment conditions, on the conditions
mentioned in section 47, including training, and on expert assistance pursuant to section 48.
Training and Competence
50. The operating company shall ensure that the employees, before the work is commenced, are
sufficiently trained to attend to the tasks according to the emergency response plan of the
installation, cf. section 45(2), and to attend to own safety in an emergency situation.
(2) The employer shall ensure that the employees are adequately instructed, and that they have the
competence ensuring that their duties on the offshore installation can be performed fully justifiably
in terms of health and safety, and that there is documentation available for this competence.
(3) Persons under the age of 18 shall not be allowed to carry out work on offshore installations.

(4) The Minister for Transport and Energy can lay down rules on training pursuant to subsection
(1) and on the necessary competence pursuant to subsection (2).
Working Hours, Rest and Off-duty Periods
51. The employer shall arrange the work so as to ensure that the average weekly working hours of
the employee do not exceed 48 hours including overtime, calculated over a period of reference of
12 months. Annual paid holidays and sick leave are not included in the calculation.
(2) The employer shall arrange the work so as to ensure that the employees have a rest period of at
least 11 consecutive hours within each 24-hour period.
(3) In connection with the arrangement of the work the employer shall otherwise ensure,
considering the duration of the work period, that the employee is given reasonable possibilities of
rest and off-duty periods which are adjusted to the special conditions of the employees and the
workplace with a view to reducing the health and safety risks connected with the work as much as
reasonably practicable.
(4) The Minister for Transport and Energy shall lay down rules on deviation from the provisions
in subsections (1) and (2), including agreements, rules on breaks during the working day, rest and
off-duty periods, on-call work and night work.
Registration and Reporting, etc.
52. The Minister for Transport and Energy can lay down rules specifying that the operating
company and the individual employer shall report accidents and other conditions that are important
in terms of health and safety to the supervising authority and register conditions that are important
in terms of health and safety.
(2) The Minister for Transport and Energy can lay down rules specifying that doctors who notes
or suspects that a person has been exposed to harmful effects in connection with their work shall
inform the supervising authority or another authority with the consent of the person in question.
Performance of the Work and Medical Examinations, etc.
53. The employer shall ensure that health and safety risks connected with the performance of the
work are identified, assessed and reduced as much as reasonably practicable and that threshold limit
values established in rules laid down pursuant to this Act are complied with.
54. Recognised norms and standards which are important in terms of health and safety to the
performance of the work shall be observed.
(2) Norms and standards according to subsection (1) may be deviated from in cases where it is
convenient for obtaining a higher level of health and safety or to be in keeping with the technical
development. It is presumed by the deviation that health and safety risks are reduced as much as
reasonably practicable.
55. The Minister for Transport and Energy can lay down more specific rules on the performance
of the work and on medical examination of the employees before and during the employment and
on examinations of occupational health, occupational hygiene or other health conditions.
(2) The employer must ensure that medical examinations of the employees before and during the
employment and on examinations of occupational health, occupational hygiene or other health
conditions can be carried out without any loss of income of the employees and as far as possible
during working time. The expenses connected with the examinations cannot be imposed on the

employees. The Minister for Transport and Energy can lay down more specific rules on the
distribution of these expenses between the operating company and the contractor.
Dismantling of Offshore Installations
56. Dismantling of a fixed offshore installation shall be planned and carried out so as to ensure
that the health and safety risks connected with the work are identified, assessed and reduced as
much as reasonably practicable.
57. The Minister for Transport and Energy can lay down more specific rules on dismantling of
fixed offshore installations.
Part V
Committees, etc.
Offshore Safety Council
58. The Minister for Transport and Energy shall appoint an Offshore Safety Council that is to
assist in laying down rules pursuant to this Act, follow the technical and social development
concerning offshore installations and discuss other conditions covered by this Act.
(2) Before rules are laid down pursuant to this Act, a statement from the Offshore Safety Council
shall be obtained.
(3) The Offshore Safety Council shall consist of representatives from the two sides of industry,
the Danish Energy Authority and other relevant authorities, including the Danish Maritime
Authority, the Danish Working Environment Authority, the Danish Environmental Protection
Agency and the Civil Aviation Administration.
(4) The Minister for Transport and Energy shall decide which organisations and authorities, apart
from the organisations and authorities mentioned in subsection (3) above, are to be represented in
the Offshore Safety Council and shall lay down the order of business for the council.
The Authorities’ Emergency Response Committee
59. The Minister for Transport and Energy shall appoint an Emergency Response Committee
whose duty is to co-ordinate the efforts of the authorities in accident situations on offshore
installations. The members of the Emergency Response Committee shall monitor the measures
taken by those responsible for the offshore installations and co-ordinate the rescue and combating
measures taken by the authorities, cf. section 45(2).
( 2) The Minister for Transport and Energy shall lay down procedures for the Emergency
Response Committee.
Accident Investigation Board
60. The Minister for Transport and Energy shall appoint an Accident Investigation Board whose
task is to investigate major incidents on offshore installations that have caused serious personal
injury or damage to facilities.
( 2) The Minister for Transport and Energy can order the Accident Investigation Board to
investigate incidents that are assumed to be of a health and safety interest in connection with the use
of an offshore installation, and can lay down more specific rules for the activities of the Accident

Investigation Board, including which rights and duties the Accident Investigation Board has in
connection with investigations of the incidents covered by subsection (1).
Part VI
Supervision, etc.
61. The Minister for Transport and Energy shall supervise that this Act and the rules laid down
pursuant to this Act are observed.
(2) The Minister for Transport and Energy shall not supervise conditions covered by section
13(3)-(5) and sections 14 and 15.
(3) The Minister for Transport and Energy can authorise the Danish Energy Authority and other
government authorities, designated the supervising authority, to exercise powers attributed by law
to the Minister for Transport and Energy.
(4) The Minister for Transport and Energy can decide that the tasks of the supervising authority
mentioned in subsection (3) to a more specific extent are transferred to private entities. The
supervising authority shall supervise such tasks.
62. Anybody on whom duties have been imposed pursuant to this Act shall, as requested, give the
supervising authority, the Emergency Response Committee and the Accident Investigation Board
the information that is necessary for performance of their activities. This also applies to persons
who act on behalf of those on whom duties have been imposed as prescribed by law.
(2) Anybody on whom duties have been imposed pursuant to this Act shall render the supervising
authority, Emergency Response Committee and the Accident Investigation Board all necessary
assistance in connection with their inquiries.
(3) The supervising authority, the Emergency Response Committee and the Accident
Investigation Board shall at any time without a Court order on proof of identity, to the extent
necessary, have access to all parts of the company except for private parts of the company’s
buildings.
63. The Minister for Transport and Energy can lay down rules specifying that the duty of the
supervising authority is not to ensure observance of rules laid down pursuant to this Act when a
similar duty falls under a documented collective agreement where the parties to the agreement is a
national employers’ association or a single company within the offshore industry on the one side
and a national trade union on the other side.
(2) Notwithstanding subsection (1) above the duty of the supervising authority is to ensure
observance of rules if the industrial party to the agreement does not intend to initiate an industrial
procedure for infringement of obligations that are subject to a collective agreement.
(3) Notwithstanding subsection (1) the duty of the supervising authority is to ensure observance of
rules towards employees who are not subject to a collective agreement.
(4) Subsections (1)-(3) do not apply to agreements on the right to leave the workplace and to
agreements on arrangement of working hours.
64. The supervising authority can, possibly on specified terms, order that conditions that are
contrary to this Act or rules or decisions pursuant to this Act are put in order immediately or within
a specified time-limit.
(2) If the supervising authority deems it necessary to avert an imminent, considerable danger of
the health and safety of employees or others, it may order that such danger is immediately
countered, including stoppage of work

65. The licensee, operator, operating company and other companies shall pay the expenses of the
authorities connected with the tasks of the authorities pursuant to this Act.
(2) The Minister for Transport and Energy shall lay down rules on payment of the expenses of the
authorities pursuant to subsection (1).
66. By electronic correspondence provided with a digital signature to the supervising authority,
such digital signature shall comply with OCES standard (public certificates for electronic service)
or with another standard accepted by the supervising authority.
66 a. The Minister for Transport and Energy conducts—as part of his supervisory activities after
this act—supervision with the compliance of the Act on Smokeless Environments. The Minister for
Transport and Energy can, possibly on specified terms, order that conditions that are contrary to the
act are put in order immediately or within a specified time-limit.
(2). Section 61(3) and Sections 62 and 65 and regulations that are issued pursuant to them are
applied in the same way.
(3). The Minister for Transport and Energy may—upon negotiation with the Minister for
Domestic Affairs and Health—lay down rules on conducting the supervision.
(4). Complaints about decisions made by the Minister for Transport and Energy or by whom that
is empowered hereto and related to subsection 1 may be brought before the Energy Board of
Appeal. Section 67(2) and (3), subsection (4-ii) and subsection (6) and Section 68 are applied
likewise.
Part VII
Complaints Procedure
67. The Energy Board of Appeal shall consider complaints about decisions made by the Minister
for Transport and Energy pursuant to this Act or rules laid down pursuant to this Act.
(2) Decisions made by an institution under the Ministry of Transport and Energy, another
authority or private persons, to whom the Minister according to section 61 above has transferred its
powers pursuant to this Act, cannot be brought before an administrative authority other than the
Energy Board of Appeal mentioned in subsection (1) above.
(3) The complaint shall be lodged in writing to the Energy Board of Appeal within four weeks
from the time when the decision has been communicated to the person in question.
(4) The Minister for Transport and Energy can lay down rules on
i) the access to complain about decisions that, pursuant to this Act or rules issued pursuant to this
Act, are made by the Minister for Transport and Energy, and
ii) payment of fees for lodging a complaint with the Energy Board of Appeal.
(5) The authority mentioned in subsection (4)(i) shall not include rules on prevention of a
complaint about decisions made by private persons, cf. section 61(4).
(6) In connection with decisions made pursuant to this Act or rules laid down pursuant to this Act
representatives of the Energy Board of Appeal, who are appointed upon recommendation from the
Confederation of Danish Industries and the Agricultural Council of Denmark, are replaced by one
member representing the trade unions in the Offshore Safety Council, and one member representing
the employers’ organisations in the Offshore Safety Council. The Minister for Transport and Energy
shall appoint the members in question. Appointment of the two members representing the
employers’ organisations and trade unions respectively in the Offshore Safety Council shall take
place upon recommendation from the respective organisations.

68. Actions for review of decisions made by the Energy Board of Appeal pursuant to this Act or
rules issued pursuant to this Act shall be brought six month after the decision has been
communicated to the company or person in question at the latest. If the decision has been published,
the time-limit always counts from the date of publication.
Part VIII
Civil Law Rules for Offshore Installations
69. By applying the rules in Part 9 of the Merchant Shipping Act on mobile offshore installations
during exploration or extraction activities, the shipowner shall be liable when the liability is limited,
regardless of the size of the installation by up to 50 million special drawing rights (SDR). For injury
to a person this amount is increased by 30 million SDRs.
(2) Compensation for pollution damage as a result of exploration or extraction activities is not
secured by maritime lien pursuant to Part 3 of the Merchant Shipping Act.
Part IX
Penalties
70. The licensee, owner of offshore installations under section 2(1)(i)(c), operating company,
contractor, employer, company manager and offshore installation manager who do not take care to
i) identify and assess the risks pursuant to section 5(1), (3) and (4), section 8(4), section 10(1),
section 11(2), section 33(1) and (3), section 34(1), sections 35-36 or section 53,
ii) supervise pursuant to section 6(1), section 7 second sentence, section 8(2) second sentence,
section 10(2), section 19(3) or section 20(3), or
iii) give instructions or training pursuant to section 7 first sentence, section 8(2) first sentence,
section 9, first sentence, or section 10(3), second sentence,
shall be fined or punished with imprisonment for up to one year.
(2) The supervisor or employees who do not assist in identifying and assessing the health and
safety risks pursuant to section 12 or 13 shall be fined or punished with imprisonment for up to one
year.
(3) Anyone who
i) infringes section 5(2) and (5), section 8(1), (3) and (5), section 10(3) first sentence, and (5),
section 11(1), (3) and (4), section 12(1) second sentence, and (2) and (3), section 13(1) and (2),
section 16, section 18(1)-(5), section 19(1) and (2), section 20(1) and (2), sections 23-25,
sections 27-31, section 33(2), section 45(4), section 46(1) and (3), section 47 or section 50(1),
ii) has work carried out contrary to section 50(3), or section 51(1)-(3), is in charge of or supervises
such work or
iii) does not comply with orders pursuant to section 45(3), or section 64.
shall be fined or punished with imprisonment for up to one year.
(4) The maximum imprisonment is two years if the infringement has been made intentionally or
by gross negligence.
(5) In connection with meting out the penalty pursuant to subsection (3)(i), it shall, to the extent
that the employer and the operating company have fulfilled their obligations pursuant to chapter 2
and 4, be regarded as aggravating circumstances for employees, if these intentionally or by gross
negligence infringe legislation requirements on
i) the use of personal protective equipment,
ii) the use of extraction facilities,
iii) the use of protection equipment or safety precautions,

iv) the use of justifiable working methods or
v) crane and forklift certificates.
(6) In connection with meting out the penalty pursuant to subsections (1)-(4)—outside the cases
mentioned in subsection (5)—the following shall be regarded as aggravating circumstances:
i) that the infringement has resulted in injury to life and health or caused danger of this,
ii) that an order pursuant to section 64 has been previously made for the same thing or similar
conditions, or
iii) that in connection with the infringement a financial advantage has been obtained or intended to
be obtained for the person himself or others.
(7) It shall be regarded as a special aggravating circumstances if, for persons under the age of 18,
there has been injury to life and health or if danger of this has been evoked, cf. subsection (6)(i).
(8) If no profits are seized, which have been obtained by infringement, the meting out of the fine,
including additional fine, shall take into special consideration the size of a financial advantage
obtained or intended to be obtained.
(9) The limitation period for criminal liability is five years for infringement of section 18(1)-(5)
and rules issued pursuant to section 18(6).
(10) Unless a higher penalty is applicable pursuant to other legislation, any person shall be fined
who violates the provisions in Regulation (EC) No 336/2006 of the European Parliament and of the
Council of 15 February 2006 on the Implementation of the International Safety Management Code
within the Community and repealing Council Regulation (EC) No 3051/95.
71. The individual employer shall be punishable by a fine, even though the infringement cannot
be considered intentional or grossly negligent, cf. however subsection (3), if the employer
i) does not take care to identify and assess risks pursuant to section 10(1) or section 35,
ii) does not take care to supervise pursuant to section 10(2),
iii) has work carried out contrary to section 50(3) or section 51(1), or
iv) does not comply with orders made pursuant to section 45(3) or section 64.
(2) A condition for the individual employer being punishable by a fine pursuant to subsection (1)
above is that one or more persons attached to the company or the company as such can be blamed
for the infringement. No imprisonment shall be determined in lieu of a fine.
(3) To the extent that the employer has fulfilled his obligations pursuant to sections 10 and 35, the
employer cannot be punishable by a fine if employees infringe legislation requirements on
i) the use of personal protective equipment,
ii) the use of extraction facilities,
iii) the use of protection equipment or safety precautions,
iv) the use of justifiable working methods or
v) crane and forklift certificates.
72. In rules laid down pursuant to this Act, a penalty can be fixed in the form of a fine for
infringement of the rules and for lack of non-compliance of orders or prohibitions pursuant to the
rules. Infringement of rules that put regulations into force, which are not written in Danish, cf.
section 44, shall not be punishable. Furthermore, it can be determined that the individual employer,
who infringes provisions, orders or prohibitions as stated, shall be punishable by a fine, even though
he cannot be blamed for the infringement as intentional or grossly negligent. Punishment by fine is
conditional on the infringement being blamed one or more persons attached to the company or the
company as such. No imprisonment shall be determined in lieu of a fine

(2) Punishment by fine pursuant to subsection (1), second sentence, and section 71, cannot be
imposed on company managers, cf. section 10(6).
73. Criminal liability may be imposed on limited liability companies, etc. (legal persons) pursuant
to the rules set out in Part V of the Danish Criminal Code. Section 71(3) is similarly applicable.
Part X
Coming into Force, etc.
74. This Act shall come into force on 1 July in 2006 1 . At the same time Act No. 292 of 10 June
1981 on Certain Offshore Installation is repealed, except for section 8(1)-(3), section 9(2), (4) and
(5), sections 12 and 13 and section 21(1)(iv) as regards risk of pollution of the marine environment.
(2) The Working Environment Act shall not apply to installations covered by this Act.
(3) The Minister for Transport and Energy can decide that rules laid down pursuant to Act No.
292 of 10 June 1981 on Certain Offshore Installations and The Working Environment Act, which
concern conditions covered by this Act, shall remain in force with certain amendments, until they
are replaced by provisions laid down pursuant to this or another Act and that complaints about
decisions made pursuant to these acts shall be brought before the Energy Board of Appeal.
75. Permits and approvals covered by this Act, and which are granted before the coming into force
of this Act, shall remain valid until they must be renewed, are annulled or expire. Renewed permits
and approval shall then be granted pursuant to this Act.
(2) When approval of manning and organisation plans as well as emergency response plans
granted before the coming into force of this Act are to be renewed, the conditions that appear from
the plan shall be incorporated in the health and safety cases, cf. sections 23 and 24.
76. Safety cases and other evaluations of health and safety matters prepared before the coming
into force of this Act shall have fulfilled, wholly or partly, the requirements for health and safety
cases laid down in this Act or in rules issued pursuant to this Act by the time of renewal of permits
and approvals, cf. section 75(1) or within a specified time-limit fixed after the coming into force of
this Act.
(2) Management systems established before the coming into force of this Act shall have fulfilled,
wholly or partly, the requirements for health and safety and management systems in this Act or in
rules laid down pursuant to this Act by the time of renewal of permits and approvals or within a
specified time-limit fixed after the coming into force of this Act.
(3) The Minister for Transport and Energy shall lay down more specific rules on the conditions
mentioned in subsections (1) and (2) above.
77. This Act shall not apply to the Faroe Islands and Greenland.
1 Act no 107 came into force on 9 February 2007.
2 Act No 107 was given on 7 February 2007.
Given at Christiansborg Castle, 21 December 2005 2
Under Our Royal Hand and Seal
Margrethe R.
/Flemming Hansen

i The Act contains provisions implementing parts of Council Directive 89/391/EEC of 12 June 1989 on the Introduction of Measures to encourage
Improvements in the Safety and Health of Workers at Work (OJ 1989 No. L 183, p. 1), parts of Council Directive 92/91/EEC of 3 November 1992
concerning Minimum Requirements for Improving the Safety and Health Protection of Workers in the Mineral-extracting Industries during Drilling
(eleventh special directive pursuant to Article 16(1), in Directive 89/391/EEC) (OJ 1992 No. L 348, p. 9) and parts of European Parliament and
Council Directive 2003/88/EC of 4 November 2003 concerning Certain Aspects of the Organisation of Working Time (OJ 2003 No. L 299, p. 9).
Directive 1989/391/EEC Celex no. 31989L0391
Directive 1992/91/EEC Celex no. 31992L0091
Directive 2003/88/EC Celex no. 32003L0088

Unofficial translation of Consolidated Act No. 957 of 9 September 2011. In case of discrepancy, the original Danish
text shall prevail.
Consolidated Act on the Establishment and Use of a Pipeline for Transport
of Crude Oil and Condensate
The Act on the Establishment and Use of a Pipeline for Transport of Crude Oil and Condensate,
see Consolidated Act No. 1157 of 6 October 2010, as amended by section 52 of Act No. 718 of 25
June 2010, is hereby promulgated.
1.-(1) DONG Oil Pipe A/S, a subsidiary of DONG Energy A/S, is responsible for the operation
of the pipeline, complete with pumping and terminal facilities, for the transport of crude oil and
condensate and installed between the Danish continental shelf area in the North Sea and Fredericia.
(2) The Minister for Climate and Energy may permit DONG Oil Pipe A/S, in conjunction with the
activities referred to in subsection (1) above, to establish and operate facilities to separate the crude
oil and condensate transported through the pipeline. The granting of a permit assumes that one or
more of the existing or future users of the pipeline wish to have their crude oil and condensate
separated. A permit will be granted on the basis of an application, to be submitted in accordance
with section 2a below.
(3) The Minister for Climate and Energy may lay down rules and regulations regarding the
operation of the pipeline and separation facilities, etc., and shall supervise the activities through the
Danish Energy Agency.
(4) The Minister for Climate and Energy may order applicants under this Act, owners and users of
the pipeline or separation facilities and any party with a licence share that has been granted an
exemption from the connection obligation pursuant to section 2(3) to pay the expenses associated
with public authority case handling pursuant to this Act, and the Minister may lay down rules and
regulations in this respect.
2.-(1) Any party producing liquid hydrocarbons in the Danish continental shelf area of the North
Sea shall connect its production facilities to the main pipeline or to a branch pipeline installed by
DONG Oil Pipe A/S, and shall establish such installations and pipelines as are required for
connection to a connection point specified by DONG Oil Pipe A/S. Any crude oil and condensate
produced from the Danish continental shelf in the North Sea and intended for refining or sale in
Denmark shall be transported through the pipeline.
(2) Subject to such limitations as are a consequence of the capacity of the pipeline, DONG Oil
Pipe A/S shall transport any crude oil and condensate produced in the Danish continental shelf area
of the North Sea through the pipeline. DONG Oil Pipe A/S shall maintain and operate such
facilities and install such branch pipes as are necessitated by this obligation.
(3) The Minister for Climate and Energy may grant exemptions from the obligations set out in
subsections (1) and (2) above in cases where the Minister deems transport through the pipeline to be
uneconomic or inexpedient.
(4) An exemption from the obligations set out in subsection (1) above is subject to the condition
that a fee be paid to the Danish state amounting to 5 per cent of the value of any crude oil and
condensate comprised by the exemption. The Minister for Climate and Energy may lay down more
detailed rules and regulations regarding the calculation and payment of the fee.
(5) DONG Oil Pipe A/S shall agree with the users on the terms and conditions regarding
connection, transport and possible separation. If the quality of the individual users’ crude oil and
condensate changes during transport and any processing in separation facilities associated with
1

transport through the pipeline, DONG Oil Pipe A/S and the users may agree on terms and
conditions regarding volume or monetary adjustments among the users. In case of any
disagreement, the terms and conditions shall be laid down by the Minister for Climate and Energy.
(6) Agreements made in pursuance of subclause (5) above shall be subject to approval by the
Minister for Climate and Energy. The Minister may lay down terms and conditions for the approval.
2a.-(1) An application for a permit pursuant to section 1(2) above shall be accompanied by a plan
for the separation facilities and their operation. The permit shall be granted by the Minister for
Climate and Energy, see section 1(2) above, before DONG Oil Pipe A/S invites tenders for the
establishment and operation of the facilities. The Minister for Climate and Energy may lay down
terms and conditions for the permit.
(2) Contractors for establishing and operating the facilities shall be selected on the basis of a
tender procedure according to the same rules as those laid down in the EU Utilities Procurement
Directive.
(3) A permit pursuant to section 1(2) above may only be granted if DONG Oil Pipe A/S is
deemed to have the necessary technical expertise and financial capacity to operate the separation
facilities. DONG Oil Pipe A/S shall be able to document at any time that it has the necessary
technical expertise.
(4) The Minister for Climate and Energy may withdraw a permit granted pursuant to section 1(2)
if DONG Oil Pipe A/S is subjected to restructuring, files a petition to commence insolvency
proceedings or is declared insolvent.
2b.-(1) DONG Oil Pipe A/S is obliged to separate crude oil and condensate products for users of
the pipeline. Payment for separation will be demanded from users of the separation facilities in
accordance with section 3c(3) below.
(2) DONG Oil Pipe A/S may demand that users and future users of the separation facilities provide
security for the refunding of DONG Oil Pipe A/S’ expenditures; see the first, third and fourth
sentences of section 3c(1). Such refund shall fall due for payment if the user or future users decide
not to use the facilities or discontinue or curtail the use without others users wishing to continue
such use. In case of any disagreement between DONG Oil Pipe A/S and a user or future user about
the amount and nature of security, the Minister for Climate and Energy shall make a decision in this
respect.
3.-(1) Any party that is under an obligation to connect its production facilities to the pipeline
pursuant to section 2 or uses it to transport crude oil or condensate shall pay to DONG Oil Pipe
A/S:
(i) an amount to cover the capital costs relating to financing the establishment of the oil pipeline
with appurtenant pumping and terminal facilities, and any branch pipelines; and
(ii) an amount to cover other expenditures for the operation of the pipeline, as calculated per
unit of transported crude oil and condensate.
(2) In addition to the amounts referred to in subsection (1) above, any party that is under an
obligation to connect its production facilities to the pipeline shall pay 5 per cent of the value of
crude oil and condensate produced from the fields subject to the connection obligation.
(3) The capital costs referred to in section 3(1)(i) include interest and other financing costs in
respect of the loans raised, as well as repayments of principal based on repayment of the loans over
a period of 15 years. But the repayment period for any facilities cannot exceed the technical or
economic life of such facilities.
2

(4) The amounts referred to in subsections (1) and (2) above shall be subject to approval by the
Minister for Climate and Energy, and following negotiation with DONG Oil Pipe A/S and the users,
the Minister for Climate and Energy shall lay down more specific rules and regulations regarding
the calculation, distribution and payment of such amounts.
(5) Subject to six months’ prior notice, the Minister for Climate and Energy may determine that
the payment provided for in subsection (2) above shall be effected in the form of crude oil and
condensate.
3a.-(1) DONG Oil Pipe A/S shall pay a tariff to the Danish state of 95 per cent of the amount
referred to in section 3(2) above.
(2) The tariff shall be calculated and paid monthly. The tariff shall be paid no later than at the end
of the month following the month in which the transport of crude oil and condensate took place.
(3) The Minister for Climate and Energy shall lay down more detailed rules and regulations
regarding the calculation and payment of the tariff.
3b.-(1) Following negotiation with the users of the pipeline and separation facilities, etc., DONG
Oil Pipe A/S shall lay down the criteria for determining which compositions of crude oil and
condensate require separation. These criteria shall be determined on the basis that a user’s crude oil
and condensate require separation if the crude oil and condensate cannot be transported by a regular
tanker designed for transporting crude oil. The criteria shall be subject to approval by the Minister
for Climate and Energy and shall be published by DONG Oil Pipe A/S. The Minister for Climate
and Energy may lay down terms and conditions for the approval. In case of any disagreement
between a user or a future user and DONG Oil Pipe A/S regarding whether the user’s or future
user’s crude oil and condensate require separation, the Minister shall make a decision in this
respect.
(2) Users or future users of the pipeline, etc. whose crude oil and condensate require separation
shall agree with DONG Oil Pipe A/S on the payment and other terms and conditions for separation
of their oil and condensate. In case of any disagreement, the terms and conditions shall be laid down
by the Minister for Climate and Energy. The agreements made shall be subject to approval by the
Minister for Climate and Energy. The Minister for Climate and Energy may lay down terms and
conditions for the approval.
3c.-(1) Users of the separation facilities are obliged to pay DONG Oil Pipe A/S’ expenditures for
the facilities. The users’ payment for use of the separation facilities in any financial year shall cover
the expenditures relating to the facilities in the same financial year. The expenditures include all
costs related to the operation of the separation facilities less any income. Moreover, the
expenditures shall include the costs actually incurred for repayments of principal and interest on
loans (loan capital) to finance the separation facilities, interest on the equity that is tied up due to
the investment in the separation facilities, see subsection (2) below, and provisions for the costs of
removing the separation facilities.
(2) Interest on the equity tied up by DONG Oil Pipe A/S to finance the separation facilities shall
be paid at the effective interest rate charged on the current loans to finance the separation facilities
in the same financial year, plus 3 percentage points. Regardless of the actual equity of DONG Oil
Pipe A/S, the tied-up equity in DONG Oil Pipe A/S shall, for the purpose of calculating the cost of
capital, be fixed at an amount equal to 30 per cent of the average, total capital tied up in the
separation facilities in the relevant year.
(3) Users whose crude oil and condensate require separation, and users whose crude oil and
condensate do not require separation, but who wish to have their products separated, shall pay an
3

amount for separation that is equal to the average expenditures, see subsection (1) above, for the
financial year per ton of condensate that has been segregated in the same financial year.
(4) DONG Oil Pipe A/S may demand payment on account for use of the separation facilities.
(5) The amount from time to time payable for use of the separation facilities shall be published by
DONG Oil Pipe A/S.
(6) DONG Oil Pipe A/S shall present separate financial statements for the activities referred to in
section 1(2) above. The financial statements shall be audited in accordance with the rules from time
to time applicable to the overall activities of DONG Oil Pipe A/S. The financial year shall coincide
with the calendar year. The financial statements, with attached comments from the users, shall be
submitted to the Minister for Climate and Energy. The financial statements shall be published by
DONG Oil Pipe A/S. In case of any disagreement between a user and DONG Oil Pipe A/S about
the financial statements, the Minister for Climate and Energy shall make a decision in this respect.
3d.-(1) Any party producing liquid hydrocarbons from fields straddling the borders between
Denmark and another country shall pay 5 per cent of the value of the share of crude oil and
condensate that has been produced from the Danish continental shelf area of the North Sea. If the
crude oil and condensate produced are transported through the pipeline, see section 2 above, the
payment referred to in the first sentence hereof shall be made to DONG Oil Pipe A/S. In all other
cases, payment shall be made to the Danish state.
(2) The Minister for Climate and Energy may lay down more detailed rules and regulations
regarding the calculation and payment of the fee to the Danish state referred to in subsection (1)
above.
4.-(1) To the extent necessary, the Minister for Climate and Energy may permit that steps be taken
for the compulsory acquisition of real property for the purpose of establishing the pipeline, etc.
(2) Compulsory acquisition of real property in accordance with subsection (1) above shall take
place subject to the provisions of the Act on the Procedure for the Compulsory Acquisition of Real
Property.
5.-(1) DONG Oil Pipe A/S shall pay compensation for any loss, damage or injury caused through
the installation or operation of the pipeline and separation facilities, etc., regardless of whether such
loss, damage or injury is caused accidentally or not.
(2) In the event that the injured party contributed to the loss, damage or injury, either intentionally
or through gross negligence, the compensation payable may be reduced or lapse.
6.-(1) This Act shall come into force on 1 July 1981.
(2) The provisions of the second sentence of section 2(1) and section 3(5) shall not apply to
activities carried out in pursuance of the Sole Concession of 8 July 1962 to Explore for and Recover
Hydrocarbons from the Danish Subsoil complete with protocols and agreements. Any decisions
made by the Minister for Climate and Energy under the provisions of section 2(3) and (5) of this
Act regarding terms and conditions for connection to and transport through the pipeline as laid
down in agreements between DONG Oil Pipe A/S and the users may be referred to arbitration by
the Concessionaires and brought before the arbitration tribunal mentioned in Section 14(2) of the
Concession; see Executive Order No. 372 of 7 November 1963, as subsequently amended.
(3) With effect from 9 July 2012, the provisions of section 2(4) and section 3(2) shall not apply to
licensees comprised by the provisions of the Hydrocarbon Tax Act regarding taxation of income
from the Sole Concession, etc., nor to licences granted with effect from 1 January 2004 or later.
4

_______________________
Act No. 254 of 8 June 1983 on Dansk Olie og Naturgas A/S, etc., which relates to section 3a,
contains the following commencement provision:
Section 8
(1) This Act shall come into force on the day following its promulgation in the Danish Law
Gazette. 1)
(2) (Omitted)
_______________________
Act No. 432 of 10 June 1997 to amend the Act on the Establishment and Use of a Pipeline for
Transport of Crude Oil and Condensate, which relates to section 2(4), contains the following
commencement provision:
Section 2
This Act shall come into force on the day following its promulgation in the Danish Law Gazette
and shall have effect in all cases where no exemption has been granted by the Minister for
Transport and Energy from the obligations set out in section 2(1) prior to the commencement of this
Act. 2)
_______________________
Act No. 74 of 12 February 2002 to amend the Act on the Use of the Danish Subsoil, the Act on
the Establishment and Use of a Pipeline for Transport of Crude Oil and Condensate and the Act on
Certain Offshore Installations, which relates to section 1(5), the second sentence of section 2(1),
section 3 and the second sentence of section 6(2), contains the following commencement provision:
Section 4
This Act shall come into force on 15 March 2002.
_______________________
Act No. 206 of 29 March 2004 to amend the Act on the Establishment and Use of a Pipeline for
Transport of Crude Oil and Condensate, which relates to section 6(3), contains the following
commencement provision:
Section 2
This Act shall come into force on the day following its promulgation in the Danish Law Gazette.
3))
5

_______________________
Act No. 1427 of 22 December 2004 to repeal the Act on Dansk Olie og Naturgas A/S, etc. and the
Act on the Establishment of a Natural Gas Supply System and to amend the Act on the
Establishment and Use of a Pipeline for Transport of Crude Oil and Condensate, which relates to
section 3a, contains the following commencement provision:
Section 4
This Act shall come into force on 1 January 2005.
_______________________
Act No. 542 of 26 May 2010 to amend the Act on the Establishment and Use of a Pipeline for
Transport of Crude Oil and Condensate, which relates to section 1, the second sentence of section
2(4), section 2(5), section 2a, section 2b, section 3(3)-(6), section 3a(1), section 3b, section 3c,
section 3d, section 5(1) and section 6(2), contains the following commencement provision:
Section 2
This Act shall come into force on 1 July 2010.
_______________________
Act No. 718 of 25 June 2010 to amend the Insolvency Act and various other Acts, of which
section 52 relates to section 2a(4), contains the following commencement provision:
Section 55
(1) The Minister of Justice shall determine when the Act shall come into force. 4)
(2)-(10) (Omitted)
_______________________
The Danish Energy Agency, 9 September 2011
Ib Larsen
/ Jens Skov-Spilling
6

1) Act No. 254 of 8 June 1983 on Dansk Olie og Naturgas A/S, etc. came into force on 15 June 1983.
2) Act No. 432 of 10 June 1997 to amend the Act on the Establishment and Use of a Pipeline for Transport of Crude Oil
and Condensate came into force on 12 June 1997.
3) Act No. 206 of 29 March 2004 to amend the Act on the Establishment and Use of a Pipeline for Transport of Crude
Oil and Condensate came into force on 1 April 2004.
4) Section 52 of Act No. 718 of 25 June 2010 to amend the Insolvency Act and Various Other Acts came into force on 1
April, see Executive Order No. 208 of 15 March 2011 on the Commencement of the Amendment of the Insolvency Act
and Various Other Acts (Restructuring, etc.)
7

Unofficial translation of Danish Executive Order No. 1032 of August 23, 2007. In case of discrepancy, the original
Danish text shall prevail.
Executive Order on Reimbursement of Expenses related to the Authorities’
Administration in connection with Hydrocarbon Activities, etc.
Pursuant to section 25(3) of Act on the Use of the Danish Subsoil, see Consolidated Act No. 889 of
4 July 2007, section 65(2) of Act No. 1424 of 21 December 2005 on Safety, etc. for Offshore
Installations for Exploration, Extraction and Transport of Hydrocarbons (Offshore Safety Act),
section 4d(3) of Act on the Continental Shelf, see Consolidated Act No. 1101 of 18 November
2005, as amended by Act No. 548 of 6 June 2007, and section 1(5) of Act on the Establishment and
Use of a Pipeline for Transport of Crude Oil and Condensate, see Consolidated Act No. 1100 of 18
November 2005, the following provisions are hereby laid down, by virtue of authority granted:
1. The authorities’ expenses related to administration, including supervision, in connection with
hydrocarbon activities, etc. pursuant to the Subsoil Act, the Offshore Safety Act, the Continental
Shelf Act and the Pipeline Act shall be reimbursed by the parties liable to pay pursuant to section 2.
2. For the purposes of this Executive Order, the parties liable to pay are:
(i) licensees and concessionaires covered by the Subsoil Act,
(ii) licensees, operators, the operating companies and other companies covered by the Offshore
Safety Act,
(iii) owners and users of the pipeline covered by the Pipeline Act and any other party with a share in
a field that has been granted an exemption pursuant to section 2(3) of the Pipeline Act, and
(iv) applicants and holders of permits pursuant to the Subsoil Act, Offshore Safety Act, Continental
Shelf Act or the Pipeline Act who are not covered by paras. (i)-(iii) above.
3.-(1) The authorities’ expenses related to administration, including supervision, shall be
calculated on the basis of a statement of the number of hours registered as spent in connection with
performance of the individual tasks, but see subsection (3) below.
(2) The hourly rate shall be fixed on the basis of the average payroll costs for the employees who
take part in the administrative procedure, plus a proportionate share of the other administrative costs
connected with administration in the accounting year in question.
(3) The authorities’ expenses related to surveys, consultancy services, including services from
other authorities, publication pursuant to section 28a(1) of the Subsoil Act, publication pursuant to
section 4a(1) of the Continental Shelf Act and official trips, etc. which, according to vouchers
submitted, can be attributed to the individual task, shall be paid on the basis of a statement of such
expenses prepared by the authorities.
4.-(1) Before the end of every year, the authorities shall inform the parties liable to pay pursuant
to section 2, paras. (i)-(iii), if the authorities expect that the extent of administration in the following
year will considerably exceed the amount of work usually resulting from the planned activities.
(2) If, during the year, substantial changes occur compared to the information given pursuant to
subsection (1), or if the extent of administration considerably exceeds the amount of work usually
resulting from the planned activities, the parties liable to pay shall be informed hereof as soon as
possible.

5.-(1) In order that the parties liable to pay can fulfil the payment obligations calculated pursuant
to section 3, the authorities shall send out provisional demand notes after the end of every quarter
for the expenses related to administration.
(2) In connection with the demand note for the first quarter in the payment year, the authorities
shall state the hourly rate to be used in the year in question for provisional payments. The
provisional hourly rate shall be fixed on the basis of the hourly rate calculated for the closed
accounting year, adjusted to include budgeted changes in costs.
6. After the expiry of an accounting year, the authorities shall prepare a statement of the amounts
to be paid for the relevant year, on the basis of the final hourly rate; see section 3(2). These amounts
shall be adjusted by the amounts paid provisionally pursuant to section 5 above. The final statement
shall be sent to the parties liable to pay no later than four months after the expiry of the accounting
year.
7. The expenses payable pursuant to this Executive Order shall be paid no later than 30 days after
a demand note has been submitted.
8.-(1) This Executive Order shall come into force on 1 September 2007 with retroactive effect to 8
June 2007.
(2) Executive Order No. 689 of 22 June 2006 on Reimbursement of Expenses related to the
Authorities’ Administration in connection with Hydrocarbon Activities, etc. shall be repealed.
The Danish Energy Authority, 23 August 2007
IB LARSEN
/Søren Enevoldsen

Unofficial translation of Danish Executive Order No. 56 of February 4, 2002. In case of discrepancy, the original
Danish text shall prevail.
Executive Order on Submission of Samples and Other Information about the
Danish Subsoil
Under section 34(1) and section 38(2) of the Act on the Use of the Danish Subsoil, cf. Consolidated
Act No. 552 of 29 June 1995, the following is laid down:
General provisions
1. In this Executive Order, the term licensee shall mean any party carrying on activities under a
licence granted pursuant to Act on the Use of the Danish Subsoil (the Subsoil Act) as well as a
concession or a licence granted under Act No. 181 of 8 May 1950 on Exploration for and Recovery
of Raw Materials in the Subsoil of the Kingdom of Denmark, cf. section 40 of the Subsoil Act.
2.- (1) Under the provisions of this Executive Order, the licensee shall, free of charge, submit
samples and other information acquired during the performance of the activities comprised by the
Subsoil Act.
(2) The obligation referred to in subsection (1) above shall extend to any activity comprised by the
Subsoil Act, including activities to be carried out on the authorities’ order, e.g. under the terms of a
licence, as well as any additional activities.
Submission of samples and information
3.- (1) The licensee shall submit the samples and information referred to in subsections (2)-(5)
below as soon as they are available.
(2) For geophysical surveys the following are to be submitted:
(i) Information about lines collected, number of km per line and the total number of km collected
in the previous week. For threedimensional surveys the same informations shall be submitted
with informations on number of km 2 . The information shall be submitted by fax or in electronic
form according to more specific agreement with the Danish Energy Authority and the Geological
Survey of Denmark and Greenland while the surveys are conducted.
(ii) Information about seismic measurements as stated in schedule 1, paragraph I, No. 1.
(iii) Information about gravity and magnetic measurements as stated in schedule 1, paragraph I,
No. 2.
(3) For geochemical surveys, the reports, maps, data and samples referred to in schedule 1,
paragraph II, shall be submitted. The amount of sample material and their packaging shall be agreed
with the Geological Survey of Denmark and Greenland. The samples taken shall be provided with
the necessary identification, including indication of location.

(4) For wellsite, subsoil and soil surveys, the reports, maps, data and samples referred to in schedule
1, paragraph III, shall be submitted. The number of samples and their packaging shall be agreed
with the Geological Survey of Denmark and Greenland. The samples taken shall be provided with
the necessary identification, including indication of location.
(5) For drilling operations the following are to be submitted:
(i) Report on the previous day’s operations and results, cf. Schedule 1, paragraph IV, No. 1. The
report shall from the time the drilling equipment is positioned at the wellsite and until the
wellsite is abandoned be submitted daily before 11.00 a.m. by telefax or in electronic form
according to more specific agreement with the Danish Energy Authority and the Geological
Survey of Denmark and Greenland.
(ii) Monitoring and surveying data from the well as stated in schedule 1, paragraph IV, No. 2.
(iii) In case of sampling (cuttings, drilling fluid, sidewall cores, cores and formation fluids),
sampled material as stated in schedule 1, paragraph IV, No. 3. The samples shall be provided
with a durable marking indicating the well designation and sample depth, so that the samples can
be identified at all times. The samples shall be delivered in packaging which provides for longterm
identification and storage.
(iv) Reports on analyses of samples from the well as stated in schedule 1, paragraph IV, No. 4.
(v) Reports on raw data and processing results for test production as stated in schedule 1,
paragraph IV, No. 5.
(vi) For test production concluding report as stated in schedule 1, paragraph IV, No.6.The report
shall be submitted no later than six months after termination of the drilling operation.
(vii) Final reporting as stated in schedule 1, paragraph IV, No. 7. The report shall be submitted
no later than six months after termination of the drilling operation.
(6) The core material, including sidewall cores, shall be deposited with the Geological Survey of
Denmark and Greenland within one year after termination of the drilling operation. The Danish
Energy Authority may on request postpone the deadline for such depositing and may in special
circumstances grant exemptions from the requirement for samples to be deposited with the
Geological Survey of Denmark and Greenland, provided that they can be deposited satisfactorily
elsewhere.
(7) In addition to the samples and information mentioned in subsections (2) to (6), The Danish
Energy Authority and the Geological Survey of Denmark and Greenland may demand the
submission of other significant samples and information.
Exemptions
4. The Danish Energy Authority may in special cases grant exemptions from the provisions in
section (3) of this Executive Order.

Penalties, etc.
5.- (1) Any infringement of sections 2-4 of this Executive Order shall be punishable by a fine unless
higher penalty are provided for under section (38) of the Subsoil Act.
(2). Where infringements are committed by a public or private company or cooperative society
(body corporate), fines may be imposed on the company or society as such pursuant to chapter 5 of
the Criminal Act.
Commencement
6.- (1) This Executive Order shall come into force on 1 March 2002.
(2). As from that date, Executive Order No. 13 of 7 January 1991 on the Submission of Samples
and Other Information about the Danish Subsoil shall be repealed.
(3). For samples and other information acquired before the coming into force of this Executive
Order but not submitted to the Danish Energy Authority and the Geological Survey of Denmark and
Greenland, the licensee may submit those samples and other information in accordance with
Executive Order No. 13 of 7 January 1991.
Ministry of Economic and Business Affairs, the 4 February 2002
BENDT BENDTSEN
/Peter Helmer Steen

Schedule
Samples and other information to be submitted under the provisions of the Executive Order
Unless otherwise provided, the samples and other information mentioned below shall be
submitted to both the Danish Energy Authority and the Geological Survey of Denmark and
Greenland (“GEUS”).
I. Geophysical surveys
1. Seismic measurements:
a) Digital seismic field data in SEGY or another standard format shall be sent to GEUS on
IBM3590 tapes or another medium agreed with GEUS. Unless GEUS requests the field
data to be submitted at another time the data shall be submitted at the time of expiry of the
confidentiality period for the data in question, cf. the provisions in the permit according to
which the data has been acquired, however data acquired according to an exclusive licence
shall be submitted not later than at the time of expiry of the licence.
b) Processed digital navigation data in UKOOA format with exact format specifications and
indication of the central meridian shall be submitted to GEUS on IBM3590 or Exabyte
tapes or another medium agreed with GEUS.
c) A hard copy shotpoint map showing the location of the acquired data shall be submitted to
GEUS.
d) Acquisition report containing the necessary information for reprocessing purposes.
Observers log as digital data in tif format on CDrom or another media agreed with GEUS.
e) Processed and stacked seismic data with raw stack, stack and final migration shall if
produced be submitted to GEUS in SEGY format on IBM3590 or Exabyte tapes or another
medium agreed with GEUS.
If data is scaled to a Landmark workstation such data shall be submitted on Exabyte tapes
to the Danish Energy Authority and on IBM3590 or Exabyte tapes to GEUS. Data scaled
to other seismic workstations shall be submitted to GEUS.
If the licensee produces hard-copy versions of stacked and migrated seismic lines,
corresponding versions shall be submitted to GEUS. If the licensee produces hard-copy
versions of migrated seismic lines, a folded copy shall likewise be submitted to DEA.
f) Stacking and migration velocities in Esso V2 format shall be submitted to GEUS on
IBM3480, IBM3590 or Exabyte tapes or another medium agreed with GEUS.
g) Processing reports shall be submitted to GEUS.
h) If other special processing or reprocessing is carried out, such data shall be submitted in
accordance with the provisions contained in paragraph I, 1, e-g, above.
i) Interpretation reports.
2. Gravity and magnetic measurements:
a) Report documenting method of measurement and calibration shall be submitted to GEUS.
b) Free-air and Bouguer gravity maps as well as a total magnetic field map.
c) Measurements and any processed data in digital form shall be submitted to GEUS in a
well-documented standard format immediately readable by GEUS, either on IBM3590
tapes or another medium agreed with GEUS.
d) Interpretation reports.

II. Geochemical surveys
1. Reports:
Results from geochemical surveys with information about exact locations and analytical
methods and standards applied, including reference standards. Furthermore, a systematic
presentation of the results specifying all tested substances, including light and heavy
hydrocarbons.
2. Maps, data and samples:
a) Maps in a commonly used scale.
b) Data shall be submitted to GEUS on an electronic medium in a well-documented format
immediately readable by GEUS, accompanied by a hard-copy version, provided that this is
a suitable mode of representation for the data concerned
c) Sets of all samples collected shall be submitted to GEUS, cf. section 3(3) of the Executive
Order.
III. Wellsite, bottom and soil surveys
1. Reporting:
Reports containing survey data and results, methods of analysis, interpretations and evaluations.
2. Maps, data and samples:
a) Maps, including shotpoint and navigation maps, in a commonly used scale shall be
submitted to GEUS.
b) Processed data and navigation data shall be submitted to GEUS on an electronic medium in
a well-documented format immediately readable by GEUS, accompanied by a hard-copy
version, provided that this is a suitable mode of representation for the data concerned.
c) A folded paper copy of all seismic lines and a folded paper copy of any other types of
survey shall be submitted to GEUS.
d) In connection with sampling a set of samples collected shall be submitted to GEUS, cf.
section 3(4) of the Executive Order.
IV. Drilling operations
1. Daily reporting during drilling operations. Daily reports shall include all main data about the
work carried out in the preceding 24-hour period, including a geological description of the
layers penetrated and descriptions of any cores extracted and any results obtained from
geophysical measurements made in the well during drilling
2. Daily monitoring and surveying data from the well, including information concerning
investigations made in wells used for the production and/or injection of oil, gas or water.
a) Measurements in the well:
Results of measurements and interpretations carried out shall be submitted as paper copies
of each printed scale from every log run. Raw data recorded on an electronic medium shall
be submitted to GEUS in a well-documented standard format (usually LIS/DLIS)
immediately readable by GEUS on CDrom, Exabyte tape or another medium agreed with
GEUS. If data is scaled to a Landmark workstation such data shall be submitted to the
Danish Energy Authority on Exabyte tapes or another agreed medium. Basic information
relating to the collection of data shall be presented in such a way that all measurements are

easily identifiable. In case of image logs, processed data shall be submitted in a welldocumented
format immediately readable by GEUS.
b) Directional measurements:
A directional measurements report shall be submitted as soon as it is available. Data shall
also be submitted on an electronic medium in a well-documented and immediately
readable standard format.
c) For seismic measurements in the well (Vertical seismic profile or walk-away seismic
measurements) a set of raw data and of standard-processed data shall be submitted. Data in
digital form shall be submitted to GEUS in a well-documented standard format
immediately readable by GEUS (normally SEGY, however for time-depth tables ASCII).
3. Sampling: The following types of geological samples shall be submitted to GEUS, cf. section
3(5) (iii) in the Executive Order:
a) Cuttings. A set of washed and dried samples as well as a set of wet samples. These samples
shall be taken at the same intervals as the samples collected for the licensee’s own use.
b) Drilling fluid. For exploration wells samples shall be taken from the inlet side after any
qualitative change in additives and prior to test production, however for at least every 300 m
drilled. Sample volumes and packaging shall be agreed upon with GEUS.
c) Sidewall cores. Where such cores are extracted, the remaining core material shall be
deposited with GEUS within one year of termination of the drilling operation. It shall be
ensured that the amount of remaining core material submitted to GEUS is sufficient to allow
a lithological evaluation and petrographical, clay-mineralogical, micropaleontological and
palynological analysis. If specimens of extracted sidewall core material are prepared for
paleoanalysis, a set of paleontological and palynological slides (an original or extra set)
shall be submitted to GEUS immediately upon completion of the analysis.
d) Cores, cf. section 3(5) (iii) of the Executive Order. Furthermore, the provision laid down in
section 3(6) in the Executive Order shall be applicable.
e) Formation fluid. Where possible, samples under pressure shall be taken of all fluids and
gases produced in all well sections subjected to production tests, as well as from sections
sampled by other methods. Sample volumes and packaging shall be agreed upon with
GEUS.
4. Reports on analyses from the well samples. Any reports available in electronic form shall also
be submitted.
a) Report on any stratigraphical, sedimentological and paleontological surveys.
b) Core descriptions as well as photographs under white and ultraviolet light of core material
from all cores.
c) Results from measurements and analyses of core material.
d) Qualitative and quantitative analysis of any formation water produced.
e) Report on pressure, volume and temperature relations for any hydrocarbons produced
(PVT report).
f) Reports on any source rock analyses.
5. Reports on raw data and interpreted results relating to production tests. Any reports available in
electronic form shall also be submitted.
a) Reports on raw data, including pressure and temperature measurements, both in the well
and at the surface, as well as separator conditions, size of orifice, course of operation,
production rates and cumulative production.

6. For all production tests carried out, a summarized report with the main conclusions shall be
submitted within six months of termination of the drilling operation. The report shall include the
following:
a) An account of the course of the individual production tests, including perforation pattern and
interval, a description of any well stimulation and clean-up.
b) An outline of the measurement data used in test production analyses.
c) An outline of any parameters used in test production analyses that did not derive from direct
measurement, as well as a documented account of the reasons for choosing such parameters.
d) An outline of the computed values obtained in production tests, including permeability,
radius of influence and flow efficiency.
e) All master curves and plots used in the analysis of production tests with indication of match
points.
f) Detailed evaluation and conclusion as regards the results obtained and the basis for their
interpretation.
If available the report shall also be submitted in digital form.
7. Final reporting. Any reports available in electronic form shall also be submitted. Summarized
technical/geological report, cf. section 3(5) (vi) of the Executive Order, including:
a) Outline of main well data, name of the well, its location according to geographical and
UTM coordinates, drilling rig, water depth/ground level, reference level, operator,
contractor, date and time of the operation, total number of hours spent and total depth with
indication of the geological age.
b) Summary of the course of drilling operations, indicating any technical problems and
assessing their possible causes.
c) Summary of geological information obtained during the drilling operations.
d) General information about casing used and results of cementing.
e) Description of drilling mud used.
f) Detailed description, including a chart showing the well status upon completion of the
work.
g) A composite log of the measurements made in the well, indicating core and test production
intervals, casing and casing cementation, plugs, lithology and selected logs.
h) A composite log of the results of drilling fluid analyses made during drilling operations.

Unofficial translation of Danish Executive Order No. 419 of June 2, 2002. In case of discrepancy, the original Danish
text shall prevail.
Executive Order on the Payment of Fees connected with Certain Licences Issued
pursuant to the Act on the Use of the Danish Subsoil
Pursuant to sections 4(2) and 5(4) of the Act on the Use of the Danish Subsoil, see Consolidated
Act No. 526 of 11 June 2002, the following is hereby laid down:
1.-(1) Upon the issuance of a licence for performing a preliminary investigation pursuant to section
3 of the Act on the Use of the Danish Subsoil, a fee of DKK 50,000 shall be payable for a one-year
period.
(2) In special instances, the fee mentioned in subsection (1) above may be reduced to DKK 25,000
if the Danish Energy Authority considers the preliminary survey to be limited in scope and duration.
(3) The Danish Energy Authority may dispense with the fee fixed in subsection (1) above if the
Authority considers the preliminary investigation to be a necessary extension of a survey conducted
under an exclusive licence granted pursuant to section 5 of the Act on the Use of the Danish
Subsoil.
(4) An issued licence will not become valid until the fee has been paid.
2.-(1) Upon submitting an application for a licence conferring an exclusive right on the holder to
carry out exploration and production pursuant to section 5 of the Act on the Use of the Danish
Subsoil, the applicant shall pay a fee of DKK 25,000.
(2) The application will be rejected if it is not accompanied by proof of payment of the fee.
(3) If the Danish Energy Authority decides not to process the application, the fee will be repaid to
the applicant.
3. The fees mentioned in sections 1 and 2 above shall be paid to the Danish Energy Authority.
4. This Executive Order shall come into force on 15 June 2005.
The Ministry of Transport and Energy, 2 June 2005
FLEMMING HANSEN
/Peter Helmer Steen

Executive Order No. 684 of 23 June 2011 on EIA, consequence assessment
concerning international nature conservation areas and protection of certain
species in connection with projects about offshore exploration for and production
of hydrocarbons, storage in the subsoil, pipelines etc.
The unofficial translation of this executive order is not available yet.
The official Danish text is available at retsinformation.dk via this link:
https://www.retsinformation.dk/Forms/R0710.aspx?id=137928

Unofficial translation of Danish Executive Order No. 657 of December 30, 1985. In case of discrepancy, the
original Danish text shall prevail.
Executive Order on Safety Zones and Zones for the Observance of Order
and the Prevention of Danger
Pursuant to sections 4 (2, 3) and 5 (3) of Act on the Continental Shelf, cf. promulgation
Order No. 182 of May 1, 1979, and section 5 of the Merchant Shipping Safety of
Navigation Act, cf. promulgation Order No. 309 of August 3, 1965, and the Minister for
Industry having been consulted, the following shall be established:
1.- (1) Fixed installations, drilling rigs, drill ships and other installations which are used for
or in connection with exploration for and recovery of raw materials in the subsoil below the
sea floor in Danish continental shelf area shall be surrounded by safety zones unless the
installation is being transported or towed.
(2) Corresponding installations in Danish territorial waters shall be surrounded by zones for
the observance of order and prevention of danger.
2.- (1) An installation which is not immediately visible at the surface of the sea shall be
marked with a buoy or some other easily visible marker approved by the Royal Danish
Administration of Navigation and Hydrography.
3.- (1) The extent of the zones mentioned in section 1 (1, 2) shall be 500 metres around the
installation, measured from any point of the outer edge of such an installation or from the
marker mentioned in section 2.
(2) After having obtained a statement from the Minister for Fisheries, the Danish Energy
Agency may lay down deviations from the extent fixed in (1) of the zones mentioned in
section 1 (1, 2). Information about this shall be published by the Danish Energy Agency in
‘Notice to Mariners’.
4.- (1) It shall be prohibited for ships and other crafts without business at the installation to
move into the zones mentioned in section 1 (1, 2). The prohibition shall also apply to
fishing tackle and the like.
(2)The provisions in (1) shall also apply when Danish ships unlawfully sail through, stay or
fish in a safety zone established in the continental shelf area of a foreign state.
(3) The Danish Energy Agency may in special cases make exemptions from the provisions
in (1).
(4) Permission according to (3) to fish or carry out fishing and marine research in the zones
mentioned in section 1 (1, 2) shall be given after a statement has been obtained from the
Minister for Fisheries.

5.- (1) After having consulted the Royal Danish Administration of Navigation and
Hydrography, the Danish Energy Agency shall give information in ‘Notice to Mariners’
regarding the positions of the installations mentioned in section 1 (1, 2).
6.- (1) Infringement of section 4 shall be fined.
7.- (1) This Order shall come into force at its publication in the Danish law report
‘Lovtidende’.
(2) This Order shall not apply to pipelines comprised by order No. 327 of October 29,
1962, on Protection of Marine Cables and Submarine Pipelines.
(3) Order No. 421 of August 24, 1976, on a Safety Zone by the Dan Field Oil Production
System on the Continental Shelf in the North Sea and Order No. 29 of January 27, 1978, on
Prohibition against the Sailing through or Staying in Safety Zones shall hereby be
abolished
The Ministry of Energy, December 30, 1985.
KNUD ENGGAARD
/Jørgen Staffeldt

Operator's Declaration of Insurance
Concerning Licence _________Covering the year 20__
The operator hereby declares to have received insurance certificates or declarations of self insurance
from all co-licensees (including the operator's own certificate or declaration) for the year mentioned above.
Furthermore, the operator declares that the insurances programmes for all
co-licensees fulfill the following conditions:
Operator's additional expenses
Offshore activities
Control of Well (COW) - including seepage and pollution
Coverage: normal coverage in the Danish sector is a minimum of DKK 1,000,000,000 (100% interest) per
occurence - including underground blow out. If three times all cost relating to drilling and testing any well in
the covered year exceeds DKK 1,000,000,000 the coverage should as a minimum be increased to this
amount for that well. Cost relating to drilling and testing this well shall be as stated in the budget for the
licence, approved in accordance with the JOA.
Onshore Activities
Control of Well (COW) - including seepage and pollution
Coverage: normal coverage in Denmark is a minimum of DKK 300,000,000 (100% interest) per occurence -
including underground blow out. If three times all cost relating to drilling and testing any well in the covered
year exceeds DKK 300,000,000 the coverage should as a minimum be increased to this amount for that
well. Cost relating to drilling and testing the most expensive well shall be as stated in the budget for the
licence, approved in accordance with the JOA.
Third Party Liability (TPL) regarding exploration, development and production both onshore and offshore
Coverage:
- when drilling: DKK 1,000,000,000 (100% interest) per occurence
- when not drilling: DKK 100,000,000 (100% interest) per occurence
Other activities than drilling
By signing this form the operator declares that the companies carrying out other activities than drilling carry
insurance coverage which is normal for the specific activity performed under the Knock-for-Knock
principle.
Date, stamp and signature
To be submitted to the Danish Energy Agency by no later than 1 March in the covered year.

Unofficial translation. In case of discrepancy, the original Danish text shall prevail.
THE DANISH ENERGY AGENCY
August 2011
Accounting instructions for activities under exploration and production licences
Pursuant to section 21 of the Model Licence for Exploration for and Production of Hydrocarbons
in Denmark and section 3 of Executive Order no. 1672 of 22 December 2010 on the
tasks and authority of the Danish Energy Agency (the DEA), the following instructions regarding
the disclosure of financial information and expected activities shall be laid down:
Contents:
1 Time-limit and calendar year .............................................................................................. 2
2 Operator's financial statements for the Joint Account ........................................................ 2
3 Financial statements for activities covered by the licence .................................................. 2
4 Financial statements when a company with a share in one or several licences carries out
other activities than those covered by the licence ............................................................... 3
5 Parent company financial statements and consolidated financial statements ..................... 3
6 Reporting on change of ownership ..................................................................................... 3
7 Reporting income, expenses and budgets ........................................................................... 4

1 Time-limit and calendar year
Licensees shall, annually and by no later than 15 August the following year, submit information
to the DEA according to the guidelines set out below. The information shall follow the
calendar year.
No later than by the end of each year, information about planned and expected activities, cf.
point 7, shall similarly be notified.
The information may be submitted electronically or by post.
2 Operator's financial statements for the Joint Account
The operator shall keep and present joint financial statements for the group's joint income, expenses,
assets and liabilities relating to activities covered by the licence (the Joint Account according
to the JOA).
The financial statements for the Joint Account shall be received by the DEA no later than 15
August the following year.
Such financial statements shall be presented pursuant to the guidelines in the Danish Act on
Financial Statements, ref. Consolidated Act No. 323 of 11 April 2011 with later amendments.
Note that there is no requirement for the operator’s financial statements to be audited.
3 Financial statements for activities covered by the licence
A company with a share in one or several licences shall disclose to the DEA whether it has incurred
other expenses than those disclosed in the operator’s financial statements for the Joint
Account.
This information shall be received by the DEA no later than 15 August the following year.
The format is given in point 7 below.
Bookkeeping relating to activities covered by the licence shall be in accordance with the
guidelines in the Danish Bookkeeping Act, ref. Consolidated Act No. 648 of 15 June 2006
with later amendments, and shall be organised so that the requirements for accounting and financial
information are met. For each licence in which the company has a share, a separate
account shall be established for:
- the operator’s activities (the Joint Account), cf. point 2,
- expenses for exploration activities which are not a part of the operator’s activities
(the Joint Account),
- expenses for development activities which are not a part of the operator’s activities
(the Joint Account),
- expenses for production activities which are not a part of the operator’s activities
(the Joint Account).
2/5

4 Financial statements when a company with a share in one or several licences carries
out other activities than those covered by the licence
A company with a share in one or several licences shall also submit annual financial statements
for the company. If the company has other activities than those relating to the licence, it
will suffice to submit financial statements for all the company’s activities.
The DEA shall therefore receive a copy of the annual financial statements which the licensee
submits to the Danish Commerce and Companies Agency.
Such financial statements will generally have been prepared for other purposes, and companies
merely have a duty to submit a copy of financial statements already prepared.
The financial statements shall be received by the DEA no later than 15 August the following
year. If the country in which the company is registered provides for a later submission timelimit,
the company may request dispensation from the DEA to exceed the Danish time-limit.
5 Parent company financial statements and consolidated financial statements
If a company with a share in one or several licences is a branch or a subsidiary of another
company, said company shall submit annual financial statements (or an internet link to these
statements) for its parent company as well as consolidated financial statements.
Such financial statements will generally have been prepared for other purposes and companies
merely have a duty to submit a copy of financial statements already prepared.
6 Reporting on change of ownership
A company with a share in one or several licences shall notify the DEA promptly of any of the
following changes in its capital position:
- changes in ownership of 10 per cent or more of the share capital or contributed
capital, or
- changes in the controlling interest caused by agreements with the same effect.
Furthermore, such changes shall be subject to approval pursuant to section 29 of the Danish
Subsoil Act.
Reporting on change of capital position
A company with a share in one or several licenses shall notify the DEA promptly, if, in its
half-year balance sheet, the relationship between its equity and loan capital has changed by 20
per cent or more relative to the balance at the end of the previous calendar year, or if its equity
at the end of a calendar year is less than
- DKK 25 million for companies that exclusively have a share in licences in
the exploration phase and
- DKK 200 million for companies with a share in a licence for which an extension
has been requested in accordance with section 5(3) of the licence.
3/5

Instead of complying with the requirement above regarding changes in equity, a company
which in its application for a licence has notified an equity that is lower than the one stated
above shall promptly notify the DEA if its equity at the end of a calendar year has been reduced
by 10 per cent or more.
If a bank guarantee has been issued for the company’s commitments in connection with licences,
notification is not a requirement.
7 Reporting income, expenses and budgets
These reporting procedures apply to income and expenses paid, and planned and expected activities.
7.1 Income and expenses paid
The operator:
The operator shall, no later than 15 august, submit financial statements for the Joint Account
for the preceding year. If there is an auditor’s report on the financial statements, said report
shall be enclosed.
The financial statements shall be identical to the financial statements which are submitted to
the other companies with shares in the licence. The financial statements shall make it possible
to distinguish between expenses for exploration, development and production, respectively.
The financial statements shall be presented in accordance with points 2 and 3.
All companies:
All companies with a share in one or several licences shall submit information about any income
and expenses paid which are not covered by the Joint Account, broken down by exploration,
development and production, no later than 15 August.
This information may be submitted in the “co-licensees’ disclosure form” (www.ens.dk/en-
US/OilAndGas/Licences/Guide/Sider/Forside.aspx) for the preceding year.
A form (co-licensees’ disclosure form) is available for each activity and shall be completed in
accordance with these accounting instructions.
The form pertaining to production also contains a box for stating the licensee’s income.
The licensee may, if desired, submit information in another format. However the information
in the form shall be stated clearly per licence and, in general, follow the guidelines described
above.
7.2 Budgets and budget estimates
The operator shall, no later than 31 December, submit a budget for the Joint Account for the
next four years. The budget for the coming year shall be identical to the budget that has been
approved by the Operational Committee for the subsequent three budget years, the budget
4/5

submitted shall be identical to the budget presented to the Operating Committee in connection
with the budget for the coming year with agreed changes if any.
The budget shall make it possible to distinguish between expenses for exploration, development
and production, respectively. The budget shall be presented in accordance with these accounting
instructions.
5/5

Co-licensee disclosure form for exploration and appraisal activities for 20__
This form concerns licence no. and co-licensee (name)_________________________
Please indicate the co-licensee's own total expenses for exploration and appraisal activities (in DKK '000)
not covered by the contribution to the Joint Accounts for the above-mentioned year:
_________ in DKK '000
Guidelines
The following is covered by exploration and appraisal activities:
a) Geology & geophysics (general & interpretation, seismic acquisition/processing, and other expenses in this category)
b) Drilling (site survey/location, preparation, mobilization/demobilization, drillling rig hire, materials & supplies, rentals & services,
and other expenses in this category)
c) Indirect costs (administration & overheads, concession fees, insurance, interest, currency gains/losses, and other expenses in
this category)
To be submitted to the Danish Energy Authority by 15 August in the year following the above-mentioned year.

Co-licensee disclosure form for development activities for 20__
This form concerns licence no. and co-licensee (name)_________________________
Please indicate the co-licensee's own total expenses for development activities (in DKK '000)
not covered by the contribution to the Joint Accounts for the above-mentioned year:
_________ in DKK '000
Guidelines
The following is covered by development activities:
a) Project planning (engineering, surveys, and other expenses in this category)
b) Construction (management, certification, engineering, fabrication structure, fabrication topside/wellhead, fabrication
topside/process, fabrication topside/accommodation, installation, hook-up & commissioning, pre-production costs, pipelines,
and other expenses in this category)
c) Drilling (site survey/location, preparation, mobilization/demobilization, drilling rig hire, materials & supplies, rentals &
services, and other expenses in this category)
d) Indirect costs (administration & overheads, insurance, interest, currency gains/losses, and other expenses in this
category)
To be submitted to the Danish Energy Authority by 15 August in the year following the above-mentioned year.

Co-licensee disclosure form for production activities for 20__
This form concerns licence no. and co-licensee (name)_________________________
Please indicate the co-licensee's own total expenses for production activities (in DKK '000)
not covered by the contribution to the Joint Accounts for the above-mentioned year:
_________ in DKK '000
Guidelines
The following is covered by poduction activities:
a) Operating expenses (employee costs, materials, supplies & equipment, services & rentals,
hauling & transport services, and other expenses in this category)
b )Transportation of oil & gas (capital costs (DONG Olierør), operating costs (DONG Olierør), 5%
profit element (DONG Olierør), own expenses)
c) Repair & maintenance (employee costs, construction & oper. materials, construction & oper.
services, and other expenses in this category)
d) Additions & improvements (design & supervision, materials & supplies, services, and other
expenses in this category)
e) Indirect costs (administration & overheads, insurance, interest, currency gains/losses, and other
expenses in this category)
Please indicate the co-licensee's own income from the above-mentioned licence (in DKK '000)
Average Cubric In DKK
price metre '000
Total income
Sale of crude oil
" gas
Other income (e.g. condensate)*
Total
* Other income derives from:
Do the company books record activities other than those relating to the licences issued
by the Ministry of Transport and Energy?
No Yes
Comments:
(delete the uncorrect answer)
(if yes, please explain in the comments section)
To be submitted to the Danish Energy Authority by 15 August in the year following the above-mentioned year.

UNOFFICIAL TRANSLATION
L I C E N C E
NO. X/YY
F O R E X P L O R A T I O N F O R
A N D P R O D U C T I O N O F
H Y D R O C A R B O N S
This translation is provided for convenience only, and in the event of any conflict between the
wording of the Danish and English versions, the wording of the Danish version shall prevail in
all respects.
200X

CONTENTS
Page
Licensee ...........................................................................................................................4
Sect. 1 Definitions .........................................................................................................5
Sect. 2 Licence area.......................................................................................................5
Sect. 3 Scope of licence ................................................................................................6
Sect. 4 Work programme and evaluation programme..................................................7
Sect. 5 Term of the licence and extension for the
purpose of production .......................................................................................7
Sect. 6 Production .........................................................................................................8
Sect. 7 One-time fee......................................................................................................9
Sect. 8-12 (not used)...........................................................................................................9
Sect. 13 State participation .............................................................................................9
Sect. 14 (not used)...........................................................................................................9
Sect. 15 Use of goods and services...............................................................................10
Sect. 16 (not used).........................................................................................................10
Sect. 17 Location of activities.......................................................................................10
Sect. 18 Joint operating agreement ...............................................................................11
Sect. 19 Observers.........................................................................................................11
Sect. 20 Transport and accommodation
for supervisors, etc ..........................................................................................11
Sect. 21 Reporting .........................................................................................................12
Sect. 22 Confidentiality.................................................................................................13
Sect. 23 Licensee's communications to individuals
or to the public.................................................................................................14
Sect. 24 Measurement ...................................................................................................15
Sect. 25 Drilling regulations .........................................................................................15
Sect. 26 Rules and regulations for marking
of equipment, etc.............................................................................................15
2

Page
Sect. 27 Connection to pipeline facilities .....................................................................15
Sect. 28-29 (not used).........................................................................................................16
Sect. 30 Insurance..........................................................................................................16
Sect. 31 Liability for damages ......................................................................................17
Sect. 32 Form of security ..............................................................................................17
Sect. 33 Assignment......................................................................................................17
Sect. 34 Relinquishment................................................................................................18
Sect. 35 Revocation and lapsing of licence ......................................................... ........18
Sect. 36 Consequences of termination of licence.........................................................19
Sect. 37 Transfer and removal of facilities, etc. ...........................................................19
Sect. 38 Indemnity.........................................................................................................21
Sect. 39 Relationship to other legal requirements........................................................21
Sect. 40 Jurisdiction and venue.....................................................................................22
ANNEX 1: Area covered by the licence
ANNEX 2: Work programme
3

Pursuant to sections 5 and 13 of Act No. 293 of 10 June 1981 on the Use of the Danish Subsoil
(the Subsoil Act), see Consolidated Act No. 526 of 11 June 2002, as amended by Act No. 1230
of 27 December 2003, by section 12 of Act No. 442 of 9 June 2004, and on the basis of the
information stated in the application dated XX.YY.2005 and otherwise obtained, the Minister
for Transport and Energy hereby grants a licence for the exploration for and production of
hydrocarbons (referred to below as the “Licence”) within the area specified in section 2 hereof
to the following companies, who shall hold the Licence jointly (referred to below as “the
Licensee”):
which company shall hold a share of :
……………………………………………………………….XX %
which company shall hold a share of :
………………………………………………………………. YY %
The Foundation responsible for State-participation,
which shall hold a share of ……………………………………20 %
The Licence thus granted shall be subject to the terms and conditions provided herein.
4

Section 1
(1) For the purpose of this Licence the following terms shall have the meanings set forth
respectively below, unless otherwise apparent from the context.
Hydrocarbons:
Hydrocarbons in the liquid, gaseous or solid state, found in a natural condition in the subsoil.
Liquid hydrocarbons:
Crude oil and condensate.
Hydrocarbon deposit or deposit:
A continuous accumulation of hydrocarbons in the subsoil. In case of doubt, the Danish Energy
Authority shall determine what constitutes a hydrocarbon deposit.
(2) The Minister for Transport and Energy may authorize other public authorities to exercise
rights granted in this Licence to the Danish Energy Authority.
Section 2
(1) The Licence shall apply to the area indicated on the attached map, with the attendant corner
coordinates and blocks shown in Annex 1.
(2) The coordinate and block system used is indicated on a map, dated 30 April 1984, deposited
with the Danish Energy Authority.
(3) Where the area covered by this Licence, or any part of it, is not within, or is withdrawn from,
Danish sovereignty under rules of international law, including any international treaties, the
Licensee shall be bound by any resulting restriction of the area, and shall not on this account
have any claim whatsoever against the Danish Energy Authority or otherwise against the Danish
State.
5

Section 3
(1) This Licence confers upon the Licensee the exclusive right to explore for and to produce
hydrocarbons, as defined in section 1, within the area referred to under section 2. Excepted are
such hydrocarbons as are obtained by subjecting coal, bituminous shale or other underground
deposits to decomposing distillation processes or other similar treatment, and methane
accumulations in quaternary strata that are subject to private ownership.
(2) This Licence shall not prevent permission from being granted, within the area covered by
this Licence, to any parties other than the Licensee to undertake preliminary investigations of
the subsoil with a view to exploration for hydrocarbons, to explore for and to produce raw
materials other than those covered by this Licence, to establish and operate pipeline facilities
intended for activities falling within the scope of the Subsoil Act, to use the subsoil for storage
or for purposes other than production and to carry out scientific investigations. The Licensee
shall ensure that the activities referred to in the previous sentence and the hydrocarbon
exploration and production activities carried on under any other licences are not unnecessarily
impeded.
(3) Where both hydrocarbons and other natural deposits are discovered within an area, and
where such resources cannot be produced at the same time, the Danish Energy Authority shall
decide which of the activities shall have priority.
(4) Where the Licensee discovers any raw materials other than those falling within the scope of
the Licence, the Licensee shall be obligated to give notice thereof to the Danish Energy
Authority.
(5) Where, as a necessary element of the production of hydrocarbons, other raw materials falling
within the scope of the Subsoil Act are produced at the same time, the Licensee shall be entitled
to such raw materials. The Danish Energy Authority reserves the right to impose upon the
Licensee specific terms and conditions with respect thereto, including payment of a special fee
in case the production is economically significant.
6

Section 4
(1) The Licensee shall carry out any such exploration works as are specified in the work
programme attached hereto as Annex 2.
(2) Where the Licensee discovers any hydrocarbons, notice thereof shall promptly be given to
the Danish Energy Authority. Not later than six months after the completion of the drilling
activity during which the discovery is made, the Licensee shall produce a report on the
discovery and a programme for such further works as are necessary, in accordance with good
practice within the oil industry in the North Sea countries, to ascertain whether a hydrocarbon
deposit has been demonstrated under conditions such that production is technically feasible and
must be considered economically profitable (an evaluation programme). The evaluation
programme shall include a time schedule for the execution of the works. If the discovery is
made in the exploration period, the time schedule shall aim at establishing the necessary basis,
before the date of expiry of the exploration period fixed in the first sentence of section 5(1), or
within any extension of the exploration period granted by the Danish Energy Authority pursuant
to the second sentence of section 5(1), for the issuance of a declaration as provided in section
5(3) hereof. The evaluation programme shall be subject to approval by the Danish Energy
Authority.
Section 5
(1) The Licence shall be valid for a term of six years from the date of issuance. The Danish
Energy Authority may extend the term of the Licence for the purpose of exploration by up to
two years at a time, provided that special circumstances exist. The cumulative exploration
period, however, may only exceed ten years in exceptional cases.
(2) Any extension of the Licence under section 13(2) of the Subsoil Act for the purpose of
production is to be granted by the Danish Energy Authority for the area delimited under subs.
(4) for a period of 30 years from the granting of the extension; however, see section 35(4)
below. Extensions may be granted separately for one or more areas.
7

(3) The right to an extension referred to in subs. (2) shall be conditional upon the Licensee
having satisfied its obligations, including performance of the evaluation programme approved
under section 4(2), and upon the submission, not later than four months before the expiry of the
period specified in subs. (1), of a request for an extension of the term of the Licence. The
request shall contain a declaration to the effect that a hydrocarbon deposit has been
demonstrated under conditions such that production is technically feasible and must be
considered economically profitable, and that the Licensee intends to undertake such production.
The request shall be accompanied by a report on the evaluations of the deposit that supports the
declaration. The report shall contain a description and an evaluation of the deposit in terms of its
geology and the technical aspects of the reservoir, as well as a statement of the assumptions
concerning production techniques and the economic factors on which the Licensee's declaration
is based.
(4) The Danish Energy Authority shall undertake the delimitation of the area or areas with
respect to which the Licence is extended for the purpose of production. The delimitation shall be
indicated by geographical coordinates and by depths. The area thus delimited shall include the
deposit such as its extent, in terms of coordinates and depths, has been substantiated by the
Licensee in the opinion of the Danish Energy Authority in connection with the Licensee’s
request for an extension of the term of the Licence. Where conditions so require, a delimited
area may include more than one deposit. If the delimitation of the deposit cannot be established
with substantial accuracy, the Danish Energy Authority shall take this into account in
establishing the supplementary area and depths.
Section 6
(1) Any extension of the term of the Licence pursuant to section 5 for the purpose of production
is conditional upon the Licensee submitting, prior to a deadline set by the Danish Energy
Authority in granting the extension, a plan for the activities, including preparations for
production and the facilities therefor (production arrangements, etc.) meeting the approval of the
Danish Energy Authority pursuant to section 10 of the Subsoil Act, and upon the Licensee
commencing production by the date fixed in the approval.
8

(2) The Danish Energy Authority may lay down detailed rules on the content and form of an
application pursuant to section 10 of the Subsoil Act as well as on the information to be
submitted together with or subsequent to the application.
Section 7
The Licensee shall pay a fee of DKK 100,000. The fee shall be paid to the Danish Energy
Authority not later than 30 days after the granting of the Licence.
(not used)
Sections 8-12
Section 13
(1) ´The Foundation responsible for State-participation (referred to below as the “State
Participant”) shall exercise for the Danish State the rights under this Licence in proportion to the
size of the share held by it. The more specific rules concerning the State Participant’s rights and
obligations as a co-holder of the Licence appear from section 8 of the Subsoil Act and are
otherwise set forth in the joint operating agreement which, under section 18 of the Licence, is
subject to the approval of the Danish Energy Authority.
(Not used)
Section 14
9

Section 15
(1) To comply with Article 3 of Directive 93/38/EEC, the Danish Energy Authority may decide
that the Licensee:
(a) shall observe the principles of non-discrimination and competitive procurement in
respect of the award of supplies, works and service contracts;
(b) shall be obliged to communicate information to the European Commission relating to
the award of contracts, subject to conditions to be defined by the Commission in
accordance with Article 40 of the above-mentioned Directive.
(2) The Danish Energy Authority may issue detailed rules on the procedures to be followed by
the Licensee in order to fulfil an obligation stipulated in accordance with subs. (1)(a).
(not used)
Section 16
Section 17
Within a period of three months after the granting of this Licence, the Licensee shall submit a
plan, to be approved by the Danish Energy Authority, concerning the organization of the
business and its location during the exploration period. The Licensee shall submit a
corresponding plan for the production period to the Danish Energy Authority for approval, at the
same time as submitting a request for approval of a plan for production arrangements, etc.
10

Section 18
(1) The Licence is granted subject to the condition that a joint operating agreement concerning
the performance of the activities covered by the Licence is executed not later than 90 days after
the Licence has been granted, such agreement being subject to the approval of the Danish
Energy Authority.
(2) Any amendment of, deviation from or supplement to such agreement, including the
appointment of a new operator, shall be subject to the approval of the Danish Energy Authority.
Section 19
(1) Representatives of the Danish Energy Authority shall be entitled to attend as observers any
meetings of committees or groups established in connection with the activities comprised by the
Licence.
(2) The Danish Energy Authority shall receive the same notice and be given the same material,
including minutes of meetings, as the Licensee.
Section 20
At the Danish Energy Authority’s request, the Licensee shall arrange for the transportation of
public authority representatives from their places of work to and from the places where the
activities are being performed, and shall also provide accommodation. The associated
expenditure shall be borne by the Licensee.
11

Section 21
(1) In order to ensure insight into and allow supervision of the Licensee's activities under this
Licence, the Licensee shall:
(a) Submit all required financial information about its activities. In this connection, the
Licensee shall submit annual financial statements consisting of a balance sheet, income
statement and annual report, and shall submit information about shareholders
representing at least one-tenth of the share capital. In addition, the Licensee shall
promptly furnish information about any material changes in the company’s capital
structure. Where the financial statements cover activities other than those encompassed
by the Licence, the Licensee shall also submit separate financial statements for the
activities covered by the Licence. Where the Licence is held by several parties, such
information shall be furnished in respect of each of the holders, and in such case
financial statements shall be prepared showing all common income and expenditure.
All of the financial statements referred to shall be in Danish and shall be audited by a
state-authorized public accountant in accordance with recognized Danish auditing
standards. Except as otherwise permitted by the Danish Energy Authority, the financial
year shall correspond to the calendar year. If the Licensee is a subsidiary of another
company, the Licensee shall submit the financial statements of its parent company and
consolidated financial statements if so requested.
(b) Submit any required information about the Licensee's activities in regard to preliminary
investigations, exploration and production. In connection with the performance of
geophysical, geological, geochemical and other investigations as well as drilling
activities, the Licensee shall thus submit, on a current or periodic basis, reports,
samples, raw data, processed results, interpretations and evaluations, together with
summary reports containing an interpretation and evaluation of the results obtained.
With respect to the establishment and operation of production installations, the
Licensee shall, on a current or periodic basis, submit information and reports on any
present and future activities.
12

c) Each year submit a summary of the Licensee's anticipated activities during the
following four calendar years. The summary shall specify the individual activities and
the anticipated expenditures on preliminary investigations and exploration and the
commencement and operation of production activity, as well as the anticipated income
and taxation in each year of the said period.
(2) The Danish Energy Authority shall issue detailed rules concerning the time of submission of
the information referred to in subs. (1), including the form and degree of specification of such
information, as well as rules concerning the book-keeping of the Licensees. The Danish Energy
Authority may also issue rules concerning information that the Licensee may be required to
submit in addition to that stipulated in subs. (1) and in the rules laid down pursuant to the
provisions of section 34(1) of the Subsoil Act, and may demand that further information be
furnished in individual cases, if considered necessary.
(3) The Danish Energy Authority may issue rules concerning the Licensee's storage and use of
samples, data, etc.
Section 22
(1) Any authorities and persons performing duties pursuant to the Subsoil Act, and any persons
assisting therewith, shall be subject to the confidentiality obligations under the provisions of
sections 152 to 152f of 'Straffeloven' (the Penal Code) in respect of such information and
samples, etc., as may be received by the authorities from the Licensee under this Licence and
under sections 26 and 34 of the Subsoil Act.
(2) Such information and samples, etc., as are covered by section 34(1) of the Subsoil Act may
be disclosed to parties other than public authorities after five years, reckoned from the time
when the information, etc., has been produced and made available to the Licensee. Should the
Licence expire, lapse or be relinquished or revoked, whether in whole or in part, such period
shall be reduced to two years with respect to information concerning the area no longer covered
by the Licence.
13

(3) The provisions in subs. (1) and (2) shall not prevent the disclosure of such information if:
(a) No legitimate interest of the Licensee requires the information to be kept confidential;
(b) it is determined that the Licensee's interest in maintaining confidentiality must yield to
considerations of essential public interest;
(c) information of a general nature is furnished in connection with the issuance of public
statements, annual reports, etc., concerning matters relating to exploration and
production, or
(d) information is disclosed as part of the cooperation with other countries’ authorities and
subject to the condition that similar provisions for ensuring secrecy of such information
apply in the country in question. Information received from other countries’ authorities
that is classified as secret or confidential, or where this is implied by the nature of the
information, shall be subject to the provisions of subs. (1) above.
Section 23
In communications to individual persons or to the public, the Licensee shall not, without the
prior consent of the Danish Energy Authority, directly or indirectly quote or refer to statements
or communications from the Danish Energy Authority, any other public authority or any person
employed by or performing duties for them, concerning the probability of making discoveries or
concerning the size of hydrocarbon deposits.
14

Section 24
(1) Any equipment, procedures and units of measurement for the qualitative and quantitative
measurement of hydrocarbons produced are subject to approval by the Danish Energy
Authority. Measurements shall be performed according to a recognized and customary
procedure, and the Danish Energy Authority shall be able to check them.
(2) If it is found that the methods or apparatus used have resulted in too low a measurement
result, this situation shall be deemed to have existed since the last previous check took place,
unless it is established that such situation has existed for a shorter or a longer period of time.
Section 25
The Licensee shall be obligated to comply with such rules and regulations on the performance
of drilling activity and other works as may be prescribed from time to time as a condition for
approval under section 28 of the Subsoil Act.
Section 26
The Licensee shall be obligated to comply with such rules and regulations as the Danish Energy
Authority may issue concerning the marking of equipment, etc., transported to or from offshore
facilities within the licence area.
Section 27
(1) Where the Licence includes areas not comprised by Act No. 291 of 10 June 1981 on the
Establishment and Utilization of a Pipeline for Transportation of Crude Oil and Condensate, as
amended by Act No. 74 of 12 February 2002, Act No. 206 of 29 March 2004 and Act No. 1427
of 22 December 2004, the Licensee shall be obligated, when carrying on production in such
areas, to connect its production facilities to pipeline systems for transporting liquid
hydrocarbons from their place of production. The Danish Energy Authority may grant
exceptions to the obligations in the preceding sentence in circumstances where transportation
15

through the pipeline system would be uneconomical or inexpedient in the opinion of the
Authority. After the Licensee has had an opportunity to submit comments, the Danish Energy
Authority shall lay down more specific provisions on the connection and use of the system,
including rules for payment therefor, dues to the State, etc.
(2) With respect to natural gas, the Licensee shall be obligated to connect its production
facilities to the pipeline systems for transporting natural gas that have been constructed or
designated by the State and shall use such systems for transporting the produced natural gas
from its place of production. The provisions of the second and third sentences of subs. (1) shall
apply mutatis mutandis.
(3) If production facilities are connected to pipeline systems pursuant to subs. (1) and/or subs.
(2) after production has commenced, the Danish Energy Authority, when issuing the specific
rules concerning payment for connection and use, shall take into account the investments made
by the Licensee for the purpose of transporting produced hydrocarbons from their place of
production.
(4) The connection obligation under subs. (1) and/or subs. (2) shall include the obligation to
construct installations and pipelines that may be required for connection at the tie-in point
designated by the Danish Energy Authority.
(not used)
Sections 28-29
Section 30
(1) The Licensee's liability for damages under the Subsoil Act shall be covered by insurance in
accordance with the rules in subs. (2) through (4).
(2) The insurance shall provide reasonable coverage, in light of the risks involved in the
operation of the business and the premiums to be paid.
16

(3) At the end of each calendar year, the Danish Energy Authority shall be informed of the
insurance then in force and of the principal terms thereof. The Danish Energy Authority may
require additional insurance to be taken out.
(4) The Licensee also shall be obligated to comply with any rules concerning insurance that may
be issued by the Danish Energy Authority.
Section 31
If the Licence is granted to several parties jointly, they shall be jointly and severally liable for
any damages claimed pursuant to section 35 of the Subsoil Act and for the satisfaction of any
obligations to the State under this Licence.
Section 32
In order to ensure performance by the Licensee of all its obligations under this Licence, the
Licensee shall, within a period of 30 days from the granting hereof, provide security, possibly in
the form of a parent company guaranty, in an amount and of a nature that is acceptable to the
Danish Energy Authority. Upon 30 days' notice, the Danish Energy Authority may subsequently
require that such security be changed or supplemented.
Section 33
Neither this Licence nor any interest therein may be assigned or otherwise transferred, either
directly or indirectly, in whole or in part, to any third party or between several co-Licensees,
without the approval of the Danish Energy Authority. Corresponding restrictions shall also
apply to the transfer of shareholdings and interests in companies in such amounts as may result
in the transfer of a controlling interest in a company that is a co-Licensee, and to the conclusion
of agreements having the same effect. A fee may be charged for an approval given pursuant to
the first and second sentences of this section.
17

Section 34
(1) Where the rights under this Licence are relinquished during the exploration period, such
relinquishment shall apply to the entire licence area.
(2) Where the Licence has been extended in respect of one or more areas for the purpose of
production, the Licensee may relinquish the right to any such area upon one year's notice.
(3) In the event of any relinquishment pursuant to subs. (1) or subs. (2), the provisions in
sections 36 and 37 shall apply.
Section 35
(1) The Danish Energy Authority may revoke this Licence:
1) if any provisions, conditions or stipulations contained in the Subsoil Act and
in this Licence or issued pursuant thereto are not complied with,
2) if incorrect or misleading information is given in an application for a Licence,
3) if one or more holders of the Licence suspend their payments, file a petition
for a compulsory composition with creditors, are declared bankrupt, go into
liquidation or experience any comparable circumstances.
(2) If the default can be remedied by the Licensee, the Licence may not be revoked pursuant to
para. 1) of subs. (1) until the Danish Energy Authority has ordered that the default be remedied
within a specified period, and such order has not been complied with.
(3) In the case of revocation pursuant to subs. (1) and lapsing of the Licence pursuant to subs.
(4), the provisions of sections 36 and 37 shall apply.
18

(4) If production has been initiated and is then suspended for a period of more than two
consecutive years, and such suspension is not part of an approved plan, the Licence shall lapse
for the area concerned, unless the Licensee can substantiate that continuing production is
temporarily non-viable commercially. In such event, the Licensee may retain the Licence for a
period fixed by the Danish Energy Authority of up to five consecutive years, even though
production is suspended during such period.
Section 36
(1) The expiry, relinquishment, lapsing or revocation of the Licence shall not relieve the
Licensee of its obligations pursuant to legislation, this Licence or any other applicable rules,
conditions or orders.
(2) Where any part of the work programme laid down in Annex 2 is not performed, the
Licensee, unless exempted by the Danish Energy Authority, shall pay to the Treasury an amount
equal to the cost of performance of the obligations. In establishing such amount, account shall
be taken of the costs that would have been incurred by having other parties perform the work for
the State at the time of termination of the Licence.
(3) Payment of the amount referred to in subs. (2) shall not be subject to the Danish Energy
Authority having the remaining work performed.
(4) Payment shall be made not later than 30 days after the Danish Energy Authority has
submitted a request in this respect.
(5) In the event of delinquent payments, the Licensee shall pay interest at an annual rate equal to
the official deposit rate set by Danmarks Nationalbank from time to time, plus 7 %.
Section 37
(1) If the Licence terminates due to its expiry, relinquishment, lapsing or revocation, in respect
of either the entire area or part thereof, the State shall be entitled to take over, without
19

consideration, all or part of any facilities, equipment and installations intended for long-term use
within the area concerned, as well as any required accessories and materials, including journals
and manuals, etc.
(2) If the Licence terminates, cf. subs. (1), the Licensee shall be obligated to ensure that the
facilities, etc., referred to in subs. (1) are located within the area and can be assigned to the State
without consideration, in a condition consistent with satisfactory maintenance and repair.
Corresponding rules shall apply to the facilities, etc., referred to in subs. (1) that are in the
course of construction for the purpose of production activities, provided, however, that the
Licensee shall not be obligated to take any further measures towards the completion thereof.
(3) At the time the Licence terminates, cf. subs. (1), the Licensee shall be obligated to ensure
that the facilities, etc. referred to in subs. (1) and (2) that do not belong to the Licensee or that
are encumbered with other rights in favour of third parties, are released from any third party
rights, such that they can be assigned to the State without consideration and free of
encumbrances.
(4) In the event of failing to comply with its obligations under subs. (1), (2) and (3), whether or
not negligence is shown, the Licensee shall be obligated to compensate for any and all losses
caused thereby, including any loss of profits and all expenses which the State is required to bear
in order to be placed in the same position as if such obligations had been satisfied in accordance
with their terms.
(5) The provisions of subs. (1) to (4) shall apply mutatis mutandis to installations, etc. that are
abandoned or disused prior to the termination of the Licence, in step with the use of such
installations being discontinued.
(6) Not later than two years before the termination of the Licence, cf. subs. (1), or two years
before the time when one or more installations, etc. are expected to be abandoned or disused, the
Licensee shall submit a plan for discontinuing the use of all installations, etc. (winding-up plan)
for the approval of the Danish Energy Authority. Not later than three months after the Licence
has lapsed, been revoked or the use of an installation or the like has been discontinued, without
20

the submission of a winding-up plan, a winding-up plan shall be submitted for the Danish
Energy Authority’s approval. The winding-up plan shall set out the procedure for removing the
installations, etc. that the State does not wish to take over, in whole or in part, in accordance
with subs. (1) to (5) above. The winding-up plan shall moreover include information about and
an assessment of the environmental impact and safety aspects of the plan, as well as a time
schedule for its implementation. The Danish Energy Authority may lay down detailed
guidelines for the content of the plan. According to a time schedule fixed by the Danish Energy
Authority, the Authority may require the Licensee to remove all or part of any installations, etc.,
whether they belong to the Licensee or to any other party, which the State does not choose to
take over under subs. (1) to (5).
(7) The Danish Energy Authority may at any time require the Licensee to take any other
necessary measures in order to prevent the installations, etc., from posing any risk or
inconvenience. If the Licensee fails to comply with any such requirement made by the Danish
Energy Authority, the Danish Energy Authority shall be entitled, without further notice, to have
the necessary measures taken for the Licensee's account and risk in every respect. The Licensee
shall indemnify the State against any third-party claims for damages from the State resulting
from such removal or taking of preventive measures.
Section 38
The Licensee shall indemnify the State against all claims whatsoever which may be made by
any third party against the State as a consequence of the Licensee's activities.
Section 39
(1) This Licence shall be subject to the laws of Denmark in force from time to time, including
future amendments, if any, to the Act on the Use of the Danish Subsoil, executive orders,
decrees, and the obligations in force from time to time that arise from Denmark's membership of
the European Union. Accordingly, this Licence shall not restrict the State's general right to levy
taxes or its authority to issue general provisions concerning more specific aspects of exploration
and production activities.
21

(2) This Licence shall not exempt the Licensee from obtaining any other licences and approvals
required pursuant to the Act on the Use of the Danish Subsoil and legislation in general.
Section 40
(1) Any disputes arising in connection with this Licence or with the Licensee's performance of
activities under this Licence shall be resolved pursuant to the laws in force in Denmark and by
the Danish courts.
(2) The venue shall be Copenhagen.
(3) Subs. (1) and (2) shall not prejudice the right of the Danish Energy Authority and the
Licensee to agree, in any particular case, that a dispute as referred to in subs. (1) shall be
resolved by arbitration.
Copenhagen, 200X
22

Annex 1
to Licence No. x/xx
for Exploration for and Production of Hydrocarbons
Area covered by the Licence, cf. section 2(1).
The Licence covers the areas in blocks ..... shown on the attached map with the corner
coordinates:
(Geographical network ED 50)
Latitude Longitude
Point Degrees Minutes Seconds Degrees Minutes Seconds
1 - - - - - -
2 - - - - - -
3 - - - - - -
4 - - - - - -
- - - - - - -
- - - - - - -
1 - - - - - -
Where possible, the licence area will be delineated by connecting the corner coordinates in
the above order by longitudes and latitudes. If not, geodetic lines will be used.

Annex 2
to Licence No. x/xx
for Exploration for and Production of Hydrocarbons
Work programme for the Licence, cf. section 4(1).
The following work programme covers the exploratory activities that the Licensee shall carry
out, as a minimum, pursuant to section 4(1) of Licence No. x/x for Exploration for and
Production of Hydrocarbons, with regard to the area comprised by the Licence; see Annex 1.
1) Not later than xx months after the issuance of the Licence, the Licensee shall have
provided xx km/km 2 of new 2D/3D seismics.
2) The Licensee shall drill one (1) exploration well and shall commence drilling the well not
later than xx months after the issuance of the Licence. The well shall be carried to a depth
that makes it possible to carry out logging of the entire XX Formation.
3)
4)
When the Licence for an area terminates, the Licensee shall submit a final report to the Danish
Energy Authority on the hydrocarbon potential in the relevant area.
The wells shall be drilled so as to ensure safe and appropriate exploration, which shall include
core drilling, extraction of samples and test production, and otherwise in conformity with any
guidelines laid down by the Danish Energy Authority in connection with the approval of each
individual drilling programme. Moreover, wells shall be drilled in compliance with good
exploration practice.
Satisfactory analyses and interpretations of acquired data shall be prepared. The Licensee
shall comply with any instructions issued by the Danish Energy Authority in this respect.
Prior to the commencement of the work, the Licensee may obtain the Danish Energy
Authority's opinion as to whether the work planned will count towards fulfilment of the work
programme.

UNOFFICIAL TRANSLATION
L I C E N C E
NO. X/XX
F O R E X P L O R A T I O N F O R
A N D P R O D U C T I O N O F
H Y D R O C A R B O N S
O P E N D O O R P R O C E D U R E
Ministry of Climate and Energy
This translation is provided for convenience only, and in the event of any conflict between
the wording of the Danish and English versions, the wording of the Danish version shall
prevail in all respects.
2011

CONTENTS
Page
Licensee ................................................................................................................... 4
Sect. 1 Definitions ................................................................................................... 5
Sect. 2 Licence area ............................................................................................... 5
Sect. 3 Scope of licence ......................................................................................... 6
Sect. 4 Work programme and evaluation programme ............................................ 6
Sect. 5 Term of the licence and extension for the purpose of production ............... 7
Sect. 6 Production .................................................................................................. 8
Sect. 7 One-time fee ............................................................................................... 8
Sect. 8-12 (not used) ................................................................................................... 9
Sect. 13 State participation ....................................................................................... 9
Sect. 14-16 (not used) ................................................................................................... 9
Sect. 17 Location of activities ................................................................................... 9
Sect. 18 Joint operating agreement .......................................................................... 9
Sect. 19 Observers ................................................................................................. 10
Sect. 20 Transport and documentation for supervisors, etc .................................... 10
Sect. 21 Reporting .................................................................................................. 10
Sect. 22 Confidentiality ........................................................................................... 12
Sect. 23 Licensee's communications to individuals or to the public ........................ 12
Sect. 24 Measurement ............................................................................................ 13
Sect. 25 Drilling regulations .................................................................................... 13
Sect. 26 Rules and regulations for marking of equipment, etc ............................... 13
Sect. 27 Connection to pipeline facilities ................................................................ 13
Sect. 28-29 (not used) ................................................................................................. 14
Sect. 30 Insurance .................................................................................................. 14
2

Sect. 31 Liability for damages ................................................................................. 15
Sect. 32 Form of security ........................................................................................ 15
Sect. 33 Assignment ............................................................................................... 15
Sect. 34 Relinquishment ......................................................................................... 16
Sect. 35 Revocation and lapsing of licence ............................................................ 16
Sect. 36 Consequences of termination of licence ................................................... 17
Sect. 37 Transfer and removal of facilities, etc ....................................................... 17
Sect. 38 Indemnity .................................................................................................. 19
Sect. 39 Relationship to other legal requirements .................................................. 19
Sect. 40 Jurisdiction and venue .............................................................................. 20
ANNEX 1:
Area covered by the licence
ANNEX 2: Work programme
3

Pursuant to sections 5 and 13 of Act No. 293 of 10 June 1981 on the Use of the Danish Subsoil
(the Subsoil Act), see Consolidated Act No. 960 of 13 September 2011, and on the basis of the
information stated in the application from xxx and otherwise obtained, the Minister for Climate and
Energy hereby grants a licence for the exploration for and production of hydrocarbons (referred to
below as the “Licence”) within the area specified in section 2 hereof to the following companies,
who shall hold the Licence jointly (referred to below as “the Licensee”):
Company 1,
registered in [Country] with registration no. ,
with a share of ................................................................................................... XX %
Company 2,
registered in [Country] with registration no. ,
with a share of ................................................................................................... XX %
……………..
The Danish North Sea Fund,
registered in Denmark with registration no. Cvr-nr. 29435065,
with a share of .................................................................................................... 20 %
The Licence thus granted shall be subject to the terms and conditions provided herein.
4

Section 1
(1) For the purpose of this Licence the following terms shall have the meanings set forth
respectively below, unless otherwise apparent from the context.
Hydrocarbons:
Hydrocarbons in the liquid, gaseous or solid state, found in a natural condition in the subsoil.
Liquid hydrocarbons:
Crude oil and condensate.
Hydrocarbon deposit or deposit:
A continuous accumulation of hydrocarbons in the subsoil. In case of doubt, the Danish Energy
Agency shall determine what constitutes a hydrocarbon deposit.
(2) The Minister for Climate and Energy may authorize other public authorities to exercise rights
granted in this Licence to the Danish Energy Agency.
Section 2
(1) The Licence shall apply to the area indicated on the attached map, with the attendant corner
coordinates and blocks shown in Annex 1.
(2) The coordinate and block system used is indicated on a map, dated 30 April 1984, deposited
with the Danish Energy Agency.
(3) Where the area covered by this Licence, or any part of it, is not within, or is withdrawn from,
Danish sovereignty under rules of international law, including any international treaties, the
Licensee shall be bound by any resulting restriction of the area, and shall not on this account
have any claim whatsoever against the Danish Energy Agency or otherwise against the Danish
State.
5

Section 3
(1) This Licence confers upon the Licensee the exclusive right to explore for and to produce
hydrocarbons, as defined in section 1, within the area referred to under section 2. Excepted are
such hydrocarbons as are obtained by subjecting coal, bituminous shale or other underground
deposits to decomposing distillation processes or other similar treatment, and methane
accumulations in quaternary strata that are subject to private ownership.
(2) This Licence shall not prevent permission from being granted, within the area covered by this
Licence, to any parties other than the Licensee to undertake preliminary investigations of the
subsoil with a view to exploration for hydrocarbons, to explore for and to produce raw materials
other than those covered by this Licence, to establish and operate pipeline facilities intended for
activities falling within the scope of the Subsoil Act, to use the subsoil for storage or for purposes
other than production and to carry out scientific investigations. The Licensee shall ensure that the
activities referred to in the previous sentence and the hydrocarbon exploration and production
activities carried on under any other licences are not unnecessarily impeded.
(3) Where both hydrocarbons and other natural deposits are discovered within an area, and
where such resources cannot be produced at the same time, the Danish Energy Agency shall
decide which of the activities shall have priority.
(4) Where the Licensee discovers any raw materials other than those falling within the scope of
the Licence, the Licensee shall be obligated to give notice thereof to the Danish Energy Agency.
(5) Where, as a necessary element of the production of hydrocarbons, other raw materials falling
within the scope of the Subsoil Act are produced at the same time, the Licensee shall be entitled
to such raw materials. The Danish Energy Agency reserves the right to impose upon the Licensee
specific terms and conditions with respect thereto, including payment of a special fee in case the
production is economically significant.
Section 4
(1) The Licensee shall carry out any such exploration works as are specified in the work
programme attached hereto as Annex 2.
6

(2) Where the Licensee discovers any hydrocarbons, notice thereof shall promptly be given to the
Danish Energy Agency. Not later than six months after the completion of the drilling activity during
which the discovery is made, the Licensee shall produce a report on the discovery and a
programme for such further works as are necessary, in accordance with good practice within the
oil industry in the North Sea countries, to ascertain whether a hydrocarbon deposit has been
demonstrated under conditions such that production is technically feasible and must be
considered economically profitable (an evaluation programme). The evaluation programme shall
include a time schedule for the execution of the works. If the discovery is made in the exploration
period, the time schedule shall aim at establishing the necessary basis, before the date of expiry
of the exploration period fixed in the first sentence of section 5(1), or within any extension of the
exploration period granted by the Danish Energy Agency pursuant to the second sentence of
section 5(1), for the issuance of a declaration as provided in section 5(3) hereof. The evaluation
programme shall be subject to approval by the Danish Energy Agency.
Section 5
(1) The Licence shall be valid for a term of six years from the date of issuance. The Danish
Energy Agency may extend the term of the Licence for the purpose of exploration by up to two
years at a time, provided that special circumstances exist. The cumulative exploration period,
however, may only exceed ten years in exceptional cases.
(2) Any extension of the Licence under section 13(2) of the Subsoil Act for the purpose of
production is to be granted by the Danish Energy Agency for the area delimited under subs. (4)
for a period of 30 years from the granting of the extension; however, see section 35(4) below.
Extensions may be granted separately for one or more areas.
(3) The right to an extension referred to in subs. (2) shall be conditional upon the Licensee having
satisfied its obligations, including performance of the evaluation programme approved under
section 4(2), and upon the submission, not later than four months before the expiry of the period
specified in subs. (1), of a request for an extension of the term of the Licence. The request shall
contain a declaration to the effect that a hydrocarbon deposit has been demonstrated under
conditions such that production is technically feasible and must be considered economically
profitable, and that the Licensee intends to undertake such production. The request shall be
7

accompanied by a report on the evaluations of the deposit that supports the declaration. The
report shall contain a description and an evaluation of the deposit in terms of its geology and the
technical aspects of the reservoir, as well as a statement of the assumptions concerning
production techniques and the economic factors on which the Licensee's declaration is based.
(4) The Danish Energy Agency shall undertake the delimitation of the area or areas with respect
to which the Licence is extended for the purpose of production. The delimitation shall be indicated
by geographical coordinates and by depths. The area thus delimited shall include the deposit
such as its extent, in terms of coordinates and depths, has been substantiated by the Licensee in
the opinion of the Danish Energy Agency in connection with the Licensee’s request for an
extension of the term of the Licence. Where conditions so require, a delimited area may include
more than one deposit. If the delimitation of the deposit cannot be established with substantial
accuracy, the Danish Energy Agency shall take this into account in establishing the
supplementary area and depths.
Section 6
(1) Any extension of the term of the Licence pursuant to section 5 for the purpose of production is
conditional upon the Licensee submitting, prior to a deadline set by the Danish Energy Agency in
granting the extension, a plan for the activities, including preparations for production and the
facilities therefore (production arrangements, etc.) meeting the approval of the Danish Energy
Agency pursuant to section 10 of the Subsoil Act, and upon the Licensee commencing production
by the date fixed in the approval.
(2) The Danish Energy Agency may lay down detailed rules on the content and form of an
application pursuant to section 10 of the Subsoil Act as well as on the information to be submitted
together with or subsequent to the application.
Section 7
The Licensee shall pay a fee of DKK 100,000. The fee shall be paid to the Danish Energy
Agency not later than 30 days after the granting of the Licence.
8

(Not used)
Section 8-12
Section 13
(1) The Danish North Sea Fund shall exercise for the Danish State the rights under this Licence in
proportion to the size of the share held by it. The more specific rules concerning the State
Participant’s rights and obligations as a co-holder of the Licence appear from section 8 of the
Subsoil Act and are otherwise set forth in the joint operating agreement which, under section 18
of the Licence, is subject to the approval of the Danish Energy Agency.
(Not used)
Section 14-16
Section 17
Within a period of three months after the granting of this Licence, the Licensee shall submit a
plan, to be approved by the Danish Energy Agency, concerning the organization of the business
and its location during the exploration period. The Licensee shall submit a corresponding plan for
the production period to the Danish Energy Agency for approval, at the same time as submitting a
request for approval of a plan for production arrangements, etc.
Section 18
(1) The Licence is granted subject to the condition that a joint operating agreement concerning
the performance of the activities covered by the Licence is executed not later than 90 days after
the Licence has been granted, such agreement being subject to the approval of the Danish
Energy Agency.
(2) Any amendment of, deviation from or supplement to such agreement, including the
appointment of a new operator, shall be subject to the approval of the Danish Energy Agency.
9

Section 19
(1) Representatives of the Danish Energy Agency shall be entitled to attend as observers any
meetings of committees or groups established in connection with the activities comprised by the
Licence.
(2) The Danish Energy Agency shall receive the same notice and be given the same material,
including minutes of meetings, as the Licensee.
Section 20
At the Danish Energy Agency’s request, the Licensee shall arrange for the transportation of
public authority representatives from their places of work to and from the places where the
activities are being performed, and shall also provide accommodation. The associated
expenditure shall be borne by the Licensee.
Section 21
(1) In order to ensure insight into and allow supervision of the Licensee's activities under this
Licence, the Licensee shall:
(a) Submit all required financial information about its activities. In this connection, the
Licensee shall submit annual financial statements consisting of a balance sheet, income
statement and annual report, and shall submit information about shareholders
representing at least one-tenth of the share capital. In addition, the Licensee shall
promptly furnish information about any material changes in the company’s capital
structure. Where the financial statements cover activities other than those encompassed
by the Licence, the Licensee shall also submit separate financial statements for the
activities covered by the Licence. Where the Licence is held by several parties, such
information shall be furnished in respect of each of the holders, and in such case
financial statements shall be prepared showing all common income and expenditure. All
of the financial statements referred to shall be in Danish and shall be audited by a
state-authorized public accountant in accordance with recognized Danish auditing
standards. Except as otherwise permitted by the Danish Energy Agency, the financial
10

year shall correspond to the calendar year. If the Licensee is a subsidiary of another
company, the Licensee shall submit the financial statements of its parent company and
consolidated financial statements if so requested.
(b) Submit any required information about the Licensee's activities in regard to preliminary
investigations, exploration and production. In connection with the performance of
geophysical, geological, geochemical and other investigations as well as drilling
activities, the Licensee shall thus submit, on a current or periodic basis, reports, samples,
raw data, processed results, interpretations and evaluations, together with summary
reports containing an interpretation and evaluation of the results obtained. With respect
to the establishment and operation of production installations, the Licensee shall, on a
current or periodic basis, submit information and reports on any present and future
activities.
c) Each year submit a summary of the Licensee's anticipated activities during the following
four calendar years. The summary shall specify the individual activities and the
anticipated expenditures on preliminary investigations and exploration and the
commencement and operation of production activity, as well as the anticipated income
and taxation in each year of the said period.
(2) The Danish Energy Agency shall issue detailed rules concerning the time of submission of the
information referred to in subs. (1), including the form and degree of specification of such
information, as well as rules concerning the book-keeping of the Licensees. The Danish Energy
Agency may also issue rules concerning information that the Licensee may be required to submit
in addition to that stipulated in subs. (1) and in the rules laid down pursuant to the provisions of
section 34(1) of the Subsoil Act, and may demand that further information be furnished in
individual cases, if considered necessary.
(3) The Danish Energy Agency may issue rules concerning the Licensee's storage and use of
samples, data, etc.
11

Section 22
(1) Any authorities and persons performing duties pursuant to the Subsoil Act, and any persons
assisting therewith, shall be subject to the confidentiality obligations under the provisions of
sections 152 to 152f of 'Straffeloven' (the Penal Code) in respect of such information and
samples, etc., as may be received by the authorities from the Licensee under this Licence and
under sections 26 and 34 of the Subsoil Act.
(2) Such information and samples, etc., as are covered by section 34(1) of the Subsoil Act may
be disclosed to parties other than public authorities after five years, reckoned from the time when
the information, etc., has been produced and made available to the Licensee. Should the Licence
expire, lapse or be relinquished or revoked, whether in whole or in part, such period shall be
reduced to two years with respect to information concerning the area no longer covered by the
Licence.
(3) The provisions in subs. (1) and (2) shall not prevent the disclosure of such information if:
(a) No legitimate interest of the Licensee requires the information to be kept confidential;
(b) it is determined that the Licensee's interest in maintaining confidentiality must yield to
considerations of essential public interest;
(c) information of a general nature is furnished in connection with the issuance of public
statements, annual reports, etc., concerning matters relating to exploration and
production, or
(d) information is disclosed as part of the cooperation with other countries’ authorities and
subject to the condition that similar provisions for ensuring secrecy of such information
apply in the country in question. Information received from other countries’ authorities
that is classified as secret or confidential, or where this is implied by the nature of the
information, shall be subject to the provisions of subs. (1) above.
Section 23
In communications to individual persons or to the public, the Licensee shall not, without the prior
consent of the Danish Energy Agency, directly or indirectly quote or refer to statements or
communications from the Danish Energy Agency, any other public authority or any person
12

employed by or performing duties for them, concerning the probability of making discoveries or
concerning the size of hydrocarbon deposits.
Section 24
(1) Any equipment, procedures and units of measurement for the qualitative and quantitative
measurement of hydrocarbons produced are subject to approval by the Danish Energy Agency.
Measurements shall be performed according to a recognized and customary procedure, and the
Danish Energy Agency shall be able to check them.
(2) If it is found that the methods or apparatus used have resulted in too low a measurement
result, this situation shall be deemed to have existed since the last previous check took place,
unless it is established that such situation has existed for a shorter or a longer period of time.
Section 25
The Licensee shall be obligated to comply with such rules and regulations on the performance of
drilling activity and other works as may be prescribed from time to time as a condition for approval
under section 28 of the Subsoil Act.
Section 26
The Licensee shall be obligated to comply with such rules and regulations as the Danish Energy
Agency may issue concerning the marking of equipment, etc., transported to or from offshore
facilities within the licence area.
Section 27
(1) Where the Licence includes areas not comprised by Act No. 291 of 10 June 1981 on the
Establishment and Utilization of a Pipeline for Transportation of Crude Oil and Condensate, cf.
Consolidated Act No. 957 of 9 September 2011, the Licensee shall be obligated, when carrying
on production in such areas, to connect its production facilities to pipeline systems for
transporting liquid hydrocarbons from their place of production. The Danish Energy Agency may
grant exceptions to the obligations in the preceding sentence in circumstances where
13

transportation through the pipeline system would be uneconomical or inexpedient in the opinion
of the Agency. After the Licensee has had an opportunity to submit comments, the Danish
Energy Agency shall lay down more specific provisions on the connection and use of the system,
including rules for payment therefore, dues to the State, etc.
(2) With respect to natural gas, the Licensee shall be obligated to connect its production facilities
to the pipeline systems for transporting natural gas that have been constructed or designated by
the State and shall use such systems for transporting the produced natural gas from its place of
production. The provisions of the second and third sentences of subs. (1) shall apply mutatis
mutandis.
(3) If production facilities are connected to pipeline systems pursuant to subs. (1) and/or subs. (2)
after production has commenced, the Danish Energy Agency, when issuing the specific rules
concerning payment for connection and use, shall take into account the investments made by the
Licensee for the purpose of transporting produced hydrocarbons from their place of production.
(4) The connection obligation under subs. (1) and/or subs. (2) shall include the obligation to
construct installations and pipelines that may be required for connection at the tie-in point
designated by the Danish Energy Agency.
(Not used)
Sections 28-29
Section 30
(1) The Licensee's liability for damages under the Subsoil Act shall be covered by insurance in
accordance with the rules in subs. (2) through (4).
(2) The insurance shall provide reasonable coverage, in light of the risks involved in the operation
of the business and the premiums to be paid.
14

(3) At the end of each calendar year, the Danish Energy Agency shall be informed of the
insurance then in force and of the principal terms thereof. The Danish Energy Agency may
require additional insurance to be taken out.
(4) The Licensee also shall be obligated to comply with any rules concerning insurance that may
be issued by the Danish Energy Agency.
Section 31
If the Licence is granted to several parties jointly, they shall be jointly and severally liable for any
damages claimed pursuant to section 35 of the Subsoil Act and for the satisfaction of any
obligations to the State under this Licence.
Section 32
In order to ensure performance by the Licensee of all its obligations under this Licence, the
Licensee shall, within a period of 30 days from the granting hereof, provide security, possibly in
the form of a parent company guaranty, in an amount and of a nature that is acceptable to the
Danish Energy Agency. Upon 30 days' notice, the Danish Energy Agency may subsequently
require that such security be changed or supplemented.
Section 33
Neither this Licence nor any interest therein may be assigned or otherwise transferred, either
directly or indirectly, in whole or in part, to any third party or between several co-Licensees,
without the approval of the Danish Energy Agency. Corresponding restrictions shall also apply to
the transfer of shareholdings and interests in companies in such amounts as may result in the
transfer of a controlling interest in a company that is a co-Licensee, and to the conclusion of
agreements having the same effect. A fee may be charged for an approval given pursuant to the
first and second sentences of this section.
15

Section 34
(1) Where the rights under this Licence are relinquished during the exploration period, such
relinquishment shall apply to the entire licence area.
(2) Where the Licence has been extended in respect of one or more areas for the purpose of
production, the Licensee may relinquish the right to any such area upon one year's notice.
(3) In the event of any relinquishment pursuant to subs. (1) or subs. (2), the provisions in sections
36 and 37 shall apply.
Section 35
(1) The Danish Energy Agency may revoke this Licence:
1) if any provisions, conditions or stipulations contained in the Subsoil Act and in
this Licence or issued pursuant thereto are not complied with,
2) if incorrect or misleading information is given in an application for a Licence,
3) if one or more holders of the Licence is subjected to restructuring, file a petition
for a compulsory composition with creditors, are declared bankrupt, go into
liquidation or experience any comparable circumstances.
(2) If the default can be remedied by the Licensee, the Licence may not be revoked pursuant to
para. 1) of subs. (1) until the Danish Energy Agency has ordered that the default be remedied
within a specified period, and such order has not been complied with.
(3) In the case of revocation pursuant to subs. (1) and lapsing of the Licence pursuant to subs.
(4), the provisions of sections 36 and 37 shall apply.
(4) If production has been initiated and is then suspended for a period of more than two
consecutive years, and such suspension is not part of an approved plan, the Licence shall lapse
for the area concerned, unless the Licensee can substantiate that continuing production is
16

temporarily non-viable commercially. In such event, the Licensee may retain the Licence for a
period fixed by the Danish Energy Agency of up to five consecutive years, even though
production is suspended during such period.
Section 36
(1) The expiry, relinquishment, lapsing or revocation of the Licence shall not relieve the Licensee
of its obligations pursuant to legislation, this Licence or any other applicable rules, conditions or
orders.
(2) Where any part of the work programme laid down in Annex 2 or in prolongations to the
Licence is not performed, the Licensee, unless exempted by the Danish Energy Agency, shall
pay to the Treasury an amount equal to the cost of performance of the obligations. In establishing
such amount, account shall be taken of the costs that would have been incurred by having other
parties perform the work for the State at the time of termination of the Licence.
(3) Payment of the amount referred to in subs. (2) shall not be subject to the Danish Energy
Agency having the remaining work performed.
(4) Payment shall be made not later than 30 days after the Danish Energy Agency has submitted
a request in this respect.
(5) In the event of delinquent payments, the Licensee shall pay interest at an annual rate equal to
the official deposit rate set by Danmarks Nationalbank from time to time, plus 7 %.
Section 37
(1) If the Licence terminates due to its expiry, relinquishment, lapsing or revocation, in respect of
either the entire area or part thereof, the State shall be entitled to take over, without
consideration, all or part of any facilities, equipment and installations intended for long-term use
within the area concerned, as well as any required accessories and materials, including journals
and manuals, etc.
17

(2) If the Licence terminates, cf. subs. (1), the Licensee shall be obligated to ensure that the
facilities, etc., referred to in subs. (1) are located within the area and can be assigned to the State
without consideration, in a condition consistent with satisfactory maintenance and repair.
Corresponding rules shall apply to the facilities, etc., referred to in subs. (1) that are
in the course of construction for the purpose of production activities, provided, however, that the
Licensee shall not be obligated to take any further measures towards the completion thereof.
(3) At the time the Licence terminates, cf. subs. (1), the Licensee shall be obligated to ensure that
the facilities, etc. referred to in subs. (1) and (2) that do not belong to the Licensee or that are
encumbered with other rights in favour of third parties, are released from any third party rights,
such that they can be assigned to the State without consideration and free of encumbrances.
(4) In the event of failing to comply with its obligations under subs. (1), (2) and (3), whether or not
negligence is shown, the Licensee shall be obligated to compensate for any and all losses
caused thereby, including any loss of profits and all expenses which the State is required to bear
in order to be placed in the same position as if such obligations had been satisfied in accordance
with their terms.
(5) The provisions of subs. (1) to (4) shall apply mutatis mutandis to installations, etc. that are
abandoned or disused prior to the termination of the Licence, in step with the use of such
installations being discontinued.
(6) Not later than two years before the termination of the Licence, cf. subs. (1), or two years
before the time when one or more installations, etc. are expected to be abandoned or disused,
the Licensee shall submit a plan for discontinuing the use of all installations, etc. (winding-up
plan) for the approval of the Danish Energy Agency. Not later than three months after the Licence
has lapsed, been revoked or the use of an installation or the like has been discontinued, without
the submission of a winding-up plan, a winding-up plan shall be submitted for the Danish Energy
Agency’s approval. The winding-up plan shall set out the procedure for removing the installations,
etc. that the State does not wish to take over, in whole or in part, in accordance with subs. (1) to
(5) above. The winding-up plan shall moreover include information about and an assessment of
the environmental impact and safety aspects of the plan, as well as a time schedule for its
implementation. The Danish Energy Agency may lay down detailed guidelines for the content of
the plan. According to a time schedule fixed by the Danish Energy Agency, the Agency may
18

equire the Licensee to remove all or part of any installations, etc., whether they belong to the
Licensee or to any other party, which the State does not choose to take over under subs. (1) to
(5).
(7) The Danish Energy Agency may at any time require the Licensee to take any other necessary
measures in order to prevent the installations, etc., from posing any risk or inconvenience. If the
Licensee fails to comply with any such requirement made by the Danish Energy Agency, the
Danish Energy Agency shall be entitled, without further notice, to have the necessary measures
taken for the Licensee's account and risk in every respect. The Licensee shall indemnify the State
against any third-party claims for damages from the State resulting from such removal or taking of
preventive measures.
Section 38
The Licensee shall indemnify the State against all claims whatsoever which may be made by any
third party against the State as a consequence of the Licensee's activities.
Section 39
(1) This Licence shall be subject to the laws of Denmark in force from time to time, including
future amendments, if any, to the Act on the Use of the Danish Subsoil, executive orders,
decrees, and the obligations in force from time to time that arise from Denmark's membership of
the European Union. Accordingly, this Licence shall not restrict the State's general right to levy
taxes or its authority to issue general provisions concerning more specific aspects of exploration
and production activities.
(2) This Licence shall not exempt the Licensee from obtaining any other licences and approvals
required pursuant to the Act on the Use of the Danish Subsoil and legislation in general.
19

Section 40
(1) Any disputes arising in connection with this Licence or with the Licensee's performance of
activities under this Licence shall be resolved pursuant to the laws in force in Denmark and by the
Danish courts.
(2) The venue shall be Copenhagen.
(3) Subs. (1) and (2) shall not prejudice the right of the Danish Energy Agency and the Licensee
to agree, in any particular case, that a dispute as referred to in subs. (1) shall be resolved by
arbitration.
Copenhagen, x of xxx 20XX
Lykke Friis
/
Birgitta Jacobsen
20

Annex 1
to Licence No. x/xx
for Exploration for and Production of Hydrocarbons
Area covered by the Licence, cf. Section 2(1)
The Licence covers the area in the blocks …………….., shown on the attached map, with the
corner co-ordinates:
(Geographic coordinate system European Datum 1950)
Latitude Longitude
Point no. Degrees Minutes Seconds Degrees Minutes Seconds
1 - - - - - -
2 - - - - - -
3 - - - - - -
- - - - - - -
- - - - - - -
1 - - - - - -
If possible, the Licence area is delineated by connecting the corner co-ordinates in the above
mentioned order by latitudes or longitudes. Otherwise the points are connected by geodetic lines.

Annex 2
to Licence No. x/xx
for Exploration for and Production of Hydrocarbons
Work programme for the Licence, cf. Section 4(1).
The following work program covers the exploration activities that the Licensee as a minimum shall
carry out pursuant to subsection 1 of Section 4 of Licence No. x/xx for Exploration for and
Production of Hydrocarbons relating to the licence area cf. Annex 1:
1) The Licensee shall, not later than 21 months after the issuance of the Licence, have
carried out the following work: ..................................................................
2) Not later than 24 months after the issuance of the Licence, the Licensee shall either
relinquish the Licence or undertake to carry out such additional exploration as is
necessary to select a suitable well site within the licence area, and to decide whether a
well should be drilled. Such work shall be carried out within 48 months of the issuance of
the Licence.
3) Not later than 48 months after the issuance of the Licence, the Licensee shall either
relinquish the Licence or undertake to drill an exploration well within the licence area. This
well shall have been drilled at least six months prior to the termination of the Licence.
When the licence to an area terminates, the Licensee shall submit a final report to the Danish
Energy Agency on the hydrocarbon potential in the area in question.
The wells shall be drilled so as to ensure safe and appropriate exploration, which shall include
core drilling, extraction of samples and test production, and otherwise in conformity with any
guidelines laid down by the Danish Energy Agency in connection with the approval of each
individual drilling programme. Moreover, wells shall be drilled in compliance with good exploration
practice.
Satisfactory analyses and interpretations of acquired data shall be prepared. The Licensee shall
comply with any instructions issued by the Danish Energy Agency in this respect.
Prior to the commencement of the work, the Licensee may obtain the opinion of the Danish
Energy Agency as to whether the work planned will constitute fulfilment of the work programme.

• DRAFT MODEL
Danish Energy Agency
February 2009
Licence xx/XX
Xxxx Group
JOINT OPERATING AGREEMENT
(see section 2.1 in the guide)

i
Table of Contents
1. SCOPE AND DURATION .....................................................................................2
1.1 Scope ........................................................................................................................2
1.2 Duration....................................................................................................................2
2. INTERESTS OF THE PARTIES ...........................................................................3
2.1 Percentage Interests ..................................................................................................3
2.2 Obligations and Rights ..............................................................................................3
3. OPERATOR ...........................................................................................................4
3.1 Designation ...............................................................................................................4
3.2 Rights .......................................................................................................................4
3.3 Responsibility ...........................................................................................................4
3.3.1 Responsibilities ...........................................................................................4
3.3.2 Methods and Practices .................................................................................5
3.3.3 Operator's Liability .....................................................................................5
3.4 Liens and Encumbrances...........................................................................................5
3.5 Employees ................................................................................................................6
3.6 Contractors and Contracts .........................................................................................6
3.6.1 General Principles .......................................................................................6
3.6.2 Information and Consultation of the Non-Operators ....................................6
3.6.3 Liability under Contracts .............................................................................7
3.6.4 Amendment of Amounts .............................................................................7
3.7 Representation of the Parties .....................................................................................7
3.8 Records .....................................................................................................................8
3.9 Reports, Data etc. ......................................................................................................8
3.9.1 Common Data Base.....................................................................................8
3.9.2 Reporting ....................................................................................................8
3.10 Consultation and Information ....................................................................................9
3.11 Expenditures and Actions........................................................................................ 10
3.12 Insurance ................................................................................................................ 10
3.12.1 Joint and Individual Insurance .................................................................. 10
3.12.2 Cost, Information, Co-insurance, Reporting and Filing of Claims .............. 10
3.12.3 Evidence of Insurance ............................................................................... 11
3.12.4 Contractors' Insurance ............................................................................... 11
3.13 Litigation ................................................................................................................ 11
3.13.1 Notification ............................................................................................... 11
3.13.2 Operator's Authority .................................................................................. 12
3.13.3 Claims against Non-Operators ................................................................... 12
3.13.4 Right to Participate .................................................................................... 12

ii
3.14 Rentals, Taxes, Fees and Charges............................................................................ 13
3.15 Rights of the Parties ................................................................................................ 13
3.15.1 Rights under the Licence ........................................................................... 13
3.15.2 Inspection of Books, Records and Inventories ........................................... 13
3.15.3 Access to the Licence Area ....................................................................... 13
3.16 (Deleted) ................................................................................................................. 13
3.17 Resignation and Removal........................................................................................ 14
3.17.1 Resignation ............................................................................................... 14
3.17.2 Removal .................................................................................................... 14
3.17.3 Selection of a New Operator...................................................................... 15
3.17.4 Transfer of Operator's Rights and Responsibilities .................................... 15
3.18 Disposal and Abandonment..................................................................................... 16
3.18.1 Disposal .................................................................................................... 16
3.18.2 Abandonment ............................................................................................ 16
3.18.3 Abandonment Agreement .......................................................................... 16
4. OPERATING COMMITTEE .............................................................................. 18
4.1 Establishment and Powers ....................................................................................... 18
4.2 Representation ........................................................................................................ 18
4.3 Meetings ................................................................................................................. 18
4.3.1 Venue, Summons ...................................................................................... 18
4.3.2 Special Meetings ....................................................................................... 19
4.3.3 Waiver of Notice ....................................................................................... 19
4.3.4 Proxy, Prior Voting ................................................................................... 19
4.4 Minutes ................................................................................................................... 19
4.5 Action without a Meeting ........................................................................................ 19
4.6 Sub-Committees ..................................................................................................... 20
4.7 Voting Procedure .................................................................................................... 21
4.7.1 Voting Interest .......................................................................................... 21
4.7.2 Pass-mark.................................................................................................. 21
4.7.3 Binding Decision....................................................................................... 21
4.7.4 Decision on Work Obligations .................................................................. 21
5. PROGRAMMES, BUDGETS AND AFES .......................................................... 22
5.1 Exploration Programmes and Budgets ..................................................................... 22
5.2 Appraisal Programmes and Budgets ........................................................................ 22
5.3 Extension of the Licence ......................................................................................... 22
5.3.1 Extension of the Licence for Production .................................................... 22
5.3.2 Extension of the Licence for the Purpose of Further Exploration ............... 23
5.3.3 Extension of the Licence for the Purpose of a Sole Risk Operation ............ 24
5.3.4 Percentage Interests of the Participants in an Extension ............................. 24
5.4 Development Programmes and Budgets .................................................................. 24
5.4.1 Preparation and Decision ........................................................................... 24
5.4.2 All Parties Participate ................................................................................ 25

iii
5.5 Production Programmes and Budgets ...................................................................... 25
5.6 Abandonment Programmes and Budgets ................................................................. 26
5.7 Information in Programmes and Budgets ................................................................ 26
5.8 Status Reports ......................................................................................................... 26
5.9 Authorisation to Proceed ......................................................................................... 27
5.10 AFEs ...................................................................................................................... 27
5.11 Amendments ........................................................................................................... 27
[5.12 Drill-or-Drop .......................................................................................................... 27
6. ACCOUNTING PROCEDURE AND COSTS AND EXPENSES ...................... 28
6.1 Adoption and Conflict ............................................................................................. 28
6.2 Payment of Costs and Expenses .............................................................................. 28
7. SOLE RISK OPERATIONS AND DEVELOPMENT BY LESS THAN ALL
PARTIES............................................................................................................... 29
7.1 Rights to Propose .................................................................................................... 29
7.2 Types ...................................................................................................................... 29
7.3 Restrictions and Conditions..................................................................................... 29
7.4 General Provisions .................................................................................................. 30
7.4.1 Indemnification ......................................................................................... 30
7.4.2 Use of Joint Risk Property ......................................................................... 31
7.4.3 Sole Risk Operator .................................................................................... 31
7.4.4 Data and Information ................................................................................ 31
7.4.5 Sole Risk Percentage Interest .................................................................... 31
7.4.6 Sole Risk Administration .......................................................................... 32
7.5 Consequences ......................................................................................................... 33
7.5.1 Access to Data and Information ................................................................. 33
7.5.2 Joint Drilling as a Result of Sole Risk Geophysical Survey ....................... 33
7.5.3 Additional Activities as a Result of Sole Risk Drilling .............................. 33
7.6 Sole Risk Development and Development by Less than All Parties ......................... 34
7.6.1 Sole Risk Preparation of a Development Programme ................................. 34
7.6.2 Sole Risk Proposal of a Development Programme ..................................... 34
7.6.3 Development by Less than All Parties ....................................................... 35
7.6.4 Less than All Parties Proceed .................................................................... 35
7.6.5 Percentage Interest in Sole Risk Development ........................................... 35
7.6.6 Rights in the Sole Risk Development ........................................................ 36
7.6.7 Sub-Area ................................................................................................... 36
8. DISPOSAL OF HYDROCARBONS .................................................................... 38
8.1 Right and Obligation ............................................................................................... 38
8.2 Lifting/Off-take Procedures for Hydrocarbons ........................................................ 38
8.3 Failure to Lift Liquid Hydrocarbons ........................................................................ 38
8.4 (Deleted) ................................................................................................................. 38

iv
9. ASSIGNMENTS AND ENCUMBRANCES ........................................................ 39
9.1 Assignments ........................................................................................................... 39
9.2 Option to Purchase .................................................................................................. 41
9.2.1 Bona Fide Offer and Exercise of the Option .............................................. 41
9.2.2 No Parties Exercise the Option .................................................................. 41
9.2.3 Exceptions ................................................................................................ 42
9.3 Encumbrances ......................................................................................................... 42
10. WITHDRAWAL ................................................................................................... 43
10.1 Rights ..................................................................................................................... 43
10.1.1 Notice of Withdrawal ................................................................................ 43
10.1.2 Work Obligations to be Fulfilled ............................................................... 43
10.1.3 Withdrawal from a Development Programme ............................................ 43
10.1.4 Approval by the Danish Energy Agency .................................................... 43
10.2 Conditions .............................................................................................................. 43
10.2.1 Allocation of Percentage Interests ............................................................. 43
10.2.2 Execution of Documents ........................................................................... 44
10.2.3 Maintenance of the Licence ....................................................................... 44
10.2.4 Costs and Expenses ................................................................................... 44
10.2.5 No Encumbrances, Liens and Charges ....................................................... 44
10.2.6 Liability for Approved Programme and Budget ......................................... 44
10.2.7 Liability for Abandonment ........................................................................ 44
11. DEFAULT IN PAYMENT ................................................................................... 46
11.1 Failure to Pay .......................................................................................................... 46
11.2 Remedy of Default .................................................................................................. 47
11.3 Continuation of Default .......................................................................................... 47
11.3.1 No Right to Hydrocarbons ......................................................................... 47
11.3.2 No Right to Representation or Voting........................................................ 47
11.3.3 Forfeiture .................................................................................................. 47
11.3.4 Acquisition ................................................................................................ 48
12. MISCELLANEOUS ............................................................................................. 50
12.1 Covenant ................................................................................................................ 50
12.2 Relationship ............................................................................................................ 50
12.2.1 Relationship under the Agreement ............................................................. 50
12.2.2 Third Party Claims .................................................................................... 50
12.2.3 Reimbursement of the Operator ................................................................. 50
12.2.4 Interest ...................................................................................................... 50
12.2.5 Mutual Indemnification ............................................................................. 51
12.3 Confidentiality ........................................................................................................ 51
12.3.1 Main Rule and Exceptions ......................................................................... 51
12.3.2 Exchange of Data and Information ............................................................ 52
12.4 Public Announcements ........................................................................................... 52
12.5 Force Majeure ......................................................................................................... 53
12.6 Arbitration .............................................................................................................. 53

v
12.7 Applicable Law and Jurisdiction ............................................................................. 54
12.8 Notices ................................................................................................................... 54
12.9 Danish Government ................................................................................................ 54
13. DEFINITIONS AND INTERPRETATIONS ...................................................... 55
13.1 Definitions .............................................................................................................. 55
13.2 Interpretations ......................................................................................................... 57
APPENDIX A: ACCOUNTING PROCEDURE

This Agreement is made as of the day of 200X between:
...............
...............
............... and
Nordsøfonden
WHEREAS, the Parties are the holders of the Licence and wish to define their respective rights,
interests, duties and obligations with respect to operations in connection with the Licence.
NOW, THEREFORE the Parties hereby agree as follows:
1

1. SCOPE AND DURATION
1.1 Scope
The scope of this Agreement shall extend to the exploration for and the development
and production of Hydrocarbons under the Licence and to the consideration of treatment,
storage and transportation of the same. This Agreement shall not extend to any
joint financing arrangements or any joint marketing or sale of Hydrocarbons.
1.2 Duration
This Agreement shall be considered effective as of the …th of …, xxxx (the date upon
which the Licence commenced) and shall, subject to Section 12.3, continue for so long
as the Licence remains in force and until all licence obligations have been fulfilled and
all Joint Property has been disposed of and final settlement has been made between the
Parties in accordance with their respective rights and obligations hereunder including
the satisfaction of all abandonment obligations.
2

2. INTERESTS OF THE PARTIES
2.1 Percentage Interests
As of the effective date of this Agreement, the respective Percentage Interests of the
Parties to the joint venture established by this Agreement are as follows:
________________________________ ..........%
________________________________ ..........%
________________________________ ..........%
Nordsøfonden 20 %
Except as provided in Article 7, the Parties' Percentage Interests under this Agreement
shall always be equal to the Parties' Percentage Interests under the Licence.
2.2 Obligations and Rights
Except as otherwise provided in this Agreement or in the Licence:
(a) all obligations, costs, expenses and liabilities accruing, resulting from or accrued
in connection with the Joint Operations shall be the responsibility of the
Parties in accordance with their respective Percentage Interests; and
(b) all the rights with respect to and interests in and under the Licence, all Joint
Property, all Joint Hydrocarbons, all technology, all rights and claims against
third Parties and all other property produced or developed under the Joint Operations
shall be owned by (and the title to the same shall automatically pass
to) the Parties in accordance with their respective Percentage Interests.
3

3. OPERATOR
3.1 Designation
3.2 Rights
_____ is hereby designated and agrees to act as the Operator under this Agreement.
Subject to the other provisions of this Agreement, the Operator has the right and is
obliged to conduct the Joint Operations by itself, or through its Affiliates, its agents or
its contractors, under the overall supervision and control of the Operating Committee. If
the Operator does not conduct all or any of the Joint Operations itself, it shall nevertheless
remain responsible for such operations as Operator. The Operator's right shall
not be assignable without the written consent of the Non-Operators and the consent of
the Danish Energy Agency.
Subject to Article 3.3.3 it is the intention of the Parties that the Party designated as Operator
shal neigther gain nor lose as a result of conducting Joint Operations under this
Agreement.
3.3 Responsibility
3.3.1 Responsibilities
Subject to the overall supervision of the Operating Committee, the responsibilities of
the Operator shall include but not be limited to:
(a) the preparation of Programmes, Budgets and AFEs pursuant to the provisions
of this Agreement;
(b) the obtaining and maintenance of all necessary permissions from the Danish
Energy Agency and other governmental and municipal authorities to implement
the Programmes;
(c) the implementation of such Programmes and Budgets as shall, together with
the relevant AFEs, have been approved by the Operating Committee;
(d) the submission to each of the Parties of reports, data and information concerning
the Joint Operations pursuant to the provisions of this Agreement;
(e) the timely provision to the Danish Energy Agency or other governmental authorities
of reports, data, samples, and information concerning the Joint Operations
pursuant to the Licence and any applicable laws or regulations;
(f) the planning for and obtaining of all requisite services and Material;
4

(g) the direction and control of accounting services;
(h) the provision of all technical and advisory services required for the efficient
performance of the Joint Operations;
(i) the conduct of such other activities as the Operating Committee shall decide
shall be appropriate for the proper and efficient carrying out of the Joint Operations;
and
(j) the administration of the Licence.
3.3.2 Methods and Practices
The Operator shall conduct the Joint Operations in a proper and workmanlike manner in
accordance with methods and practices customarily used in good and prudent oil and
gas field practice and with that degree of diligence and prudence ordinarily exercised by
experienced operators under similar circumstances and conditions. The Operator shall
further do or cause to be done, with due diligence, all such acts and things within its
control as may be necessary to keep and maintain the Licence in force and effect and
shall conduct the Joint Operations in compliance with the Licence and any applicable
laws or regulations.
3.3.3 Operator's Liability
The Operator shall not in its role as Operator be liable for any loss or damage in connection
with its responsibilities and functions as Operator unless such loss or damage results
from:
(a) the gross negligence, wilful misconduct or wilful failure to act of the Managerial
or Supervisory Personnel of the Operator or any of its Affiliates (to the extent
such personnel perform functions as Operator); or
(b) its failure to obtain or maintain any insurance which it is required to obtain or
maintain under Section 3.12, except where it has used all reasonable endeavours
to obtain or maintain such insurance but has been unable to do so and has
promptly notified the Parties of such fact;
provided that in neither case shall the Operator be liable for any consequential loss or
damage. For the purposes of this Section consequential loss or damage shall include but
not be limited to inability to produce Hydrocarbons, environmental damage caused by a
discharge of Hydrocarbons, lost production or loss of profits.
3.4 Liens and Encumbrances
The Operator shall, in so far as it may be within its control, keep all Joint Property and
all Joint Hydrocarbons free from all liens, charges and encumbrances, which might arise
by reason of the conduct of the Joint Operations.
5

3.5 Employees
Subject to the provisions of any approved Programme and Budget, the number of employees
of the Operator employed in connection with its activities hereunder shall be
determined by the Operator. The Operator shall also determine their selection, hours of
work and remuneration.
3.6 Contractors and Contracts
3.6.1 General Principles
Subject to Section 3.6.2 hereof and to the provisions of any approved Programme and
Budget the Operator shall have the right to determine the contractors, vendors and others
to provide goods and services in connection with the Joint Operations, provided that
the Operator shall utilise all reasonable efforts to ensure that each contract is entered
into under the best commercial practice and provides the most beneficial terms and rates
for the goods and services based on various criteria depending on the contract in question
such as e.g. price, quality, availability and reputation. Thus, under normal circumstances
bids from several suppliers should be obtained. Subject to Section 13, Subsection
1, of the Licence and Section 8.2 of the Subsoil Act the Operator shall at the request
of any Party inform the Operating Committee fully about the administration of the
provisions of this Section 3.6.
3.6.2 Information and Consultation of the Non-Operators
In the case of any proposed contract for the Joint Operations where the cost thereof will
or is likely to exceed ………….(DKK …………..) and subject to Section 13, Subsection
1, of the Licence and Section 8.2 of the Subsoil Act, the Operator shall:
(a) in each case obtain competitive sealed bid tenders;
(b) consult with the Parties regarding the contractors to be invited to tender on a
timely enough basis to allow the Non-Operators to make recommendations, by
forwarding to the Non-Operators the proposed list of such contractors (including
any known subcontractors);
(c) forward the tender documents if requested to do so by the Non-Operators;
(d) after the expiry of the period allowed for tender and the opening of the bids,
upon request promptly submit to the Non-Operators evaluations and recommendations
and upon request, report details of all bids received, and any rebids,
amendments to bids and subsequent negotiations, to the Non-Operators;
(e) use its reasonable endeavours to ensure that any such contract can be fully assigned
to any of the Non-Operators in the event of any change of the Operator;
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(f) promptly notify the Non-Operators when a commitment is entered into and
upon request promptly supply the Non-Operators with confirmed copies of
each such contract and any subsequent revisions thereto;
(g) when an agreement for the delivery of goods or services with an anticipated
contract value of ………….Kroner (DKK …………… or more or such higher
amount as may be agreed by all Parties during the development and production
phase is to be concluded, furnish to the contracts committee established according
to Section 4.6 (or in case no contracts committee has been established furnish
to the Operating Committee acting as ad hoc contracts committee) the material
referred to in Sections 3.6.2 (b), (c) and (d) and refrain from entering into
such agreement until the contracts committee (or the Operating Committee as
the case may be) has submitted to the Operator a recommendation on which of
the bids received should be accepted; and
(h) when an agreement for the delivery of goods or services with an anticipated
contract value of ………………..Kroner (DKK…………….) or more is to be
concluded, and the recommendation of the contracts committee established according
to Section 4.6 (if any) has been received, obtain the Operating Committee's
approval of the bid and the applicable terms and conditions prior to the
conclusion of the agreement.
3.6.3 Liability under Contracts
Unless otherwise decided by the Operating Committee, agreements with third Parties
shall be such that no party other than the Operator shall be directly liable thereunder to
such third party in connection with Joint Operations. The assumption of joint liability to
a third party shall always require the unanimous vote of the Operating Committee. It
shall be the responsibility of the Operator in concluding agreements to ensure that they
are drafted so as to incorporate the legal position required by this Section 3.6.3.
3.6.4 Amendment of Amounts
The Operating Committee may unanimously amend amounts shown in this Section 3.6
from time to time to take account of the general level of inflation and prevailing costs of
relevant goods and services.
3.7 Representation of the Parties
The Operator will represent the Parties regarding any matters or dealings with the Danish
Energy Agency, any other governmental or municipal authorities or third parties in
so far as the same relate to the Joint Operations and in accordance with any directions
given by the Operating Committee. In reasonable time prior to any representation which
concerns matters of a non-routine character the Operator shall consult with and obtain
7

from the Operating Committee such directions, if any, as the Operating Committee sees
fit. The Parties shall always have the right to be present as observers at meetings with
the Danish Energy Agency, and any other governmental or municipal authorities where
the Operator represents the Parties. There is reserved to each Party the unfettered right
to deal with the Danish Energy Agency, any other governmental or municipal authorities
in respect of matters relating to its own Percentage Interest.
3.8 Records
The Operator shall prepare and maintain proper books, records and inventories in respect
of the Joint Operations which shall be kept in compliance with the Accounting
Procedure and with due regard to the requirements of the Licence and any applicable
laws or regulations. The books, records, and inventories shall be preserved for a period
of fifteen (15) years from the date of recording or, if arbitration proceedings have been
instituted, until the termination of such proceedings, whichever is the longer.
3.9 Reports, Data etc.
3.9.1 Common Data Base
With a view to bringing all the Parties who are technically active to as equal a footing as
reasonably possible from the start of the Joint Operations the Operator shall propose a
common database to be defined by unanimous decision of the Parties in the Operating
Committee within six (6) months after the issuance of the Licence. As a minimum any
Party shall be able at such Party's request to acquire the technical part of the application
for the Licence including pertinent data coverage of the Licence Area. The costs (including
reproduction costs) related to acquiring the necessary data and information
(with the deduction of any group rebate) shall be for the account of the receiving Party.
3.9.2 Reporting
The Operator shall, in respect of Joint Operations:
(a) provide each Party with
(i) monthly progress reports on all exploration, appraisal and development
activities or quarterly reports in periods of low activity;
(ii) during drilling: daily geological and drilling reports, and promptly
when available with all types of field logs, final logs and well reports
including composite log;
(iii) during production: daily and monthly production reports of Joint Hydrocarbons;
8

(iv) copies of evaluations and reports on technical, economical, health, environmental
and safety as well as other issues (monthly or quarterly);
(v) copies of all reports submitted by the Operator to the Danish authorities
immediately upon submittal;
(vi) minutes of the Operator's meetings with the Danish authorities within
fourteen (14) days of the meeting and copies of any correspondence
sent to or received from the Danish authorities regarding the Joint Operations
immediately upon submittal/receipt;
(vii) such other reports as the Operating Committee may decide; and
(viii) at the sole cost of the Party requesting the same, such additional reports,
data, analyses and such other information as such Party may
reasonably request; and
(b) timely submit to the appropriate governmental authorities all reports concerning
the Joint Operations required under the Licence and any applicable laws or
regulations after review by the Parties (unless the Operating Committee decides
that such review is not required) and, concurrently therewith, furnish copies
of all such reports to all the Parties.
3.10 Consultation and Information
The Operator shall freely consult with the Parties and keep them informed of matters
concerning the Joint Operations. Without prejudice to the generality of the foregoing,
the Operator shall:
(a) advise all Parties of circumstances that may warrant the taking out of insurance
either for the Joint Account or for the Parties individually;
(b) inform each Party of all logging, coring and testing operations with such advance
notice as shall allow each Party subject to section 3.15.3(b) to have one
(1) or more representatives present on location during the conduct of such operations;
(c) provide each Party with copies of all seismic data, well logs and core analyses
and with such engineering, geological, geophysical, technical and other data
and information relating to the Joint Operations as each Party may reasonably
request;
(d) give each Party full access to examine all cores, including sidewall cores, cuttings
and well-samples - such Material after analysis to be stored in Denmark;
(e) store materials as mentioned under (d) as well as other samples and data for a
period to be decided by the Operating Committee, and before disposing
9

thereof, offer The Geological Survey of Denmark and Greenland the right to
acquire the same free of charge; and
(f) consult on such other matters and provide the Parties with such other information
relating to the Joint Operations as the Operating Committee may decide.
3.11 Expenditures and Actions
The Operator is authorised to make such expenditures, incur such commitments for expenditures
and take such actions as may be authorised by the Operating Committee in
accordance with this Agreement. The Operator is also authorised in circumstances constituting
an emergency to make any expenditure for the Joint Account or incur any
commitments for such expenditures or take any actions it deems necessary to safeguard
lives or property or prevent or mitigate pollution or other damage to the environment.
The Operator shall promptly notify all the Parties of any such emergency circumstances
and the amount of expenditures and commitments for expenditures so made and incurred
and the action so taken.
3.12 Insurance
3.12.1 Joint and Individual Insurance
The Operator shall obtain and maintain, in respect of the Joint Operations and the Joint
Property, all insurance required under the Licence or any applicable laws and regulations
and any additional insurance determined by the Operating Committee. A Party
shall, however, have the right not to participate if such Party 1) gives notice to that effect
to the Operator, 2) establishes that the other Parties have reasonable opportunity to
obtain such insurance at a premium which is not substantially higher than said Parties'
shares of the premium for said insurance if obtained jointly by all Parties, 3) does nothing
which may interfere with the Operator in negotiating for such insurance for the
other Parties and 4) obtains and maintains in respect of its Percentage Interest share of
all the risks covered by the determined insurance such insurance - with waiver of subrogation
in favour of all the Parties - or other evidence of financial responsibility as may
reasonably be determined by the Operating Committee. If a Party - instead of insurance
- provides such other evidence of financial responsibility, a waiver of subrogation in favour
of all the Parties shall likewise apply.
3.12.2 Cost, Information, Co-insurance, Reporting and Filing of Claims
The cost of insurance in which all the Parties are participating shall be for the Joint Account
and the cost of insurance in which less than all the Parties are participating shall
be charged to the Parties so participating in proportion to their respective interests in the
10

insurance. The Operator shall, in respect of all insurance obtained pursuant to this
Agreement:
(a) promptly inform the Parties participating therein of the insurance it has taken
out and supply them with copies of the relevant policies when the same are issued;
(b) arrange for the Parties participating therein, according to their respective interests
in the insurance to be named as co-insured on the relevant policies with
waivers of subrogation in favour of the Parties;
(c) provide the Parties with copies of any statement of insurance submitted to the
Danish Energy Agency in accordance with Section 30 of the Licence, cf. Section
3.3.1 (e);
(d) duly file all claims and take all necessary and proper steps to collect any proceeds
with respect to insurance taken out by it and, if all the Parties are participating
therein, credit them to the Joint Account or, if less than all the Parties
are participating therein, credit them to the participating Parties.
3.12.3 Evidence of Insurance
Each of the Parties shall, as and when required by the Operator or any other Party, produce
such evidence as may reasonably be required to establish that the insurance required
under this Section 3.12 is being maintained.
3.12.4 Contractors' Insurance
The Operator shall take all reasonable steps to ensure that all contractors (including
subcontractors) performing work in respect of the Joint Operations and the Joint Property
obtain and maintain all insurance required under the Licence or any applicable laws
or regulations and such additional insurance as the Operating Committee may determine.
The Operator shall in respect of all such insurance take reasonable steps to arrange
for such contractors (including subcontractors) to obtain from their insurers a
waiver of subrogation in favour of the Parties.
3.13 Litigation
3.13.1 Notification
The Operator shall promptly notify the Parties of:
(i) any incidents, accidents or circumstance causing damage to Joint Property, the
cost of which may exceed ……………..Kroner (DKK………………..); and
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(ii) any claim relating to the Joint Operations where the total amount in dispute
and/or the total amount of damages together with any costs are estimated to exceed
………………..Kroner (DKK ……………);
or such other amounts as may from time to time be determined by the Operating
Committee; and
(iii) any claim for injunction or analogous proceedings relating to the Joint Operations.
3.13.2 Operator's Authority
Unless otherwise limited by the Operating Committee the Operator shall have the authority
to pursue, prosecute, defend or settle any claim relating to the Joint Operations
(other than between the Parties) on behalf of the Parties provided that where the total
amount in dispute and/or the total amount of damages together with any costs are estimated
to exceed……………. Kroner (DKK …………..) or such other amount as may
from time to time be determined by the Operating Committee and where practicable in
the case of any claim for specific performance, injunction or analogous proceedings the
Operator shall seek the advice of the Operating Committee and shall comply with any
directions given by the Operating Committee in respect thereto. In absence of such directions,
the Operator shall act as it deems prudent in the interest of the Parties to endeavour
to prevent judgement being given against any Party, or to challenge the jurisdiction
of any court, whilst full authority from the Parties is being sought.
3.13.3 Claims against Non-Operators
Any Non-Operator shall promptly notify the other Parties of any claim relating to or
which may affect the Joint Operations, and in so far as such claim relates to or affects
the Joint Operations such Non-Operator shall defend or settle the same in accordance
with any reasonable directions given by the Operating Committee, provided that prior to
giving any such directions the Operating Committee shall take into account any other
relevant contractual obligations of such Non-Operator. Any costs, expenses and damages
that are payable pursuant to such defence or settlement shall be for the Joint Account.
3.13.4 Right to Participate
Notwithstanding Sections 3.13.1, 3.13.2 and 3.13.3 each Party shall have the right to
participate in any such pursuit, prosecution, defence or settlement conducted in accordance
with Sections 3.13.1, 3.13.2 or 3.13.3 at its sole cost and expense provided always
that such participation does not unreasonably prejudice the conduct thereof by the
Operator or the interest of the Joint Operations.
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3.14 Rentals, Taxes, Fees and Charges
The Operator shall pay for the Joint Account all rentals, taxes (except taxes based on income
and profits), fees and charges which may be levied or assessed by, or due or payable
to the Government of Denmark, any sub-division thereof or any Danish municipality
on or with respect to the respective Percentage Interests of the Parties.
3.15 Rights of the Parties
3.15.1 Rights under the Licence
Subject as otherwise provided in this Agreement, each Party reserves all its rights under
the Licence.
3.15.2 Inspection of Books, Records and Inventories
Without prejudice to the provisions of Section 7.1 of the Accounting Procedure, each
Party shall have the right to inspect at all reasonable times during usual business hours,
all books, records and inventories of any kind or nature maintained by or on behalf of
the Operator and relating to the Joint Operations other than those books, records and inventories
maintained by the Operator as the owner of a Percentage Interest, provided
that such Party gives the Operator not less than thirty (30) days prior notice of the date
upon which it desires to make such inspection and identifies the person or persons to
conduct such inspection.
3.15.3 Access to the Licence Area
(a) Each Party shall have the right, at all reasonable times and at its sole risk and
expense, of access to the Licence Area and/or the Joint Operations provided
such Party gives the Operator reasonable notice of the date such access is required
and identifies the representative or representatives to whom such access
is to be granted. If any Party wishes access to be given to more than one representative
at a time the Operator shall not be required to grant such access for
the additional representatives if, and to the extent that, the granting of such access
will interfere with the conduct of the Joint Operations.
(b) In the case of offshore operations, the Operator shall, at the cost of the Joint
Account, provide access to the means of transportation used in connection
therewith from the nearest airport or heliport in Denmark to the place to which
access is requested, and to accommodation offshore, provided that the provision
of such access does not interfere with the conduct of the Joint Operations.
3.16 (Deleted)
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3.17 Resignation and Removal
3.17.1 Resignation
The Operator shall have the right to resign at the end of any Month following completion
of the Work Obligations by giving not less than one hundred and eighty (180) days'
notice to the Parties or such shorter period of notice as all Parties may agree.
3.17.2 Removal
(a) The Operator may be removed for cause at the end of any Month by the Operating
Committee giving not less than ninety (90) days' notice to it stating such
cause.
(b) In addition, the Operator may be removed by notice given by the Operating
Committee which notice shall have immediate effect if it materially defaults in
the performance of its obligations under this Agreement and, where such default
is capable of remedy, it fails to remedy or commence actions which lead
to such remedy within a reasonable period specified by the Operating Committee.
(c) Furthermore, the Operator may be removed immediately if the circumstances
described in Section 35, Sub-section 1, item (3), of the Licence apply to the
Operator or if circumstances occur which may in the reasonable opinion of the
Operating Committee materially adversely affect the ability of the Operator to
continue to carry out its obligations hereunder.
(d) If the Operator has been removed immediately, then until election of a new
Operator has taken place the Non-Operator having the largest Percentage Interest
shall act as Operator unless the Operating Committee otherwise decides.
(e) In respect of any vote of the Operating Committee on any removal of the Operator,
on any notice to the Operator according to Section 3.17.2 (a) and (b), on
any determination as to whether a default is capable of remedy, on any request
to the Operator to remedy the default and on any determination as to whether
the default is satisfactorily remedied, on the period to be specified for remedy
and on the nomination of a temporary Operator, the votes of the Party which is
the Operator and the votes of any Party which is an Affiliate of the Operator
shall be ignored and the vote required for any such decision shall be __ per
cent (..%) of the total Percentage Interests held by the other Parties. In the
event of a change of any Party's Percentage Interest at the request of any Party,
the Parties shall discuss whether the above percentage shall be revised. Any
such revision shall be subject to the approval of the Danish Energy Agency.
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3.17.3 Selection of a New Operator
As soon as practicable after the effective date of the resignation or removal of the Operator,
the Non-Operator obtaining the largest number of votes in favour of it’s appointment
shall, subject to its acceptance of the position and subject to the consent of
the Danish Energy Agency, be selected by the Operating Committee to assume the position
of Operator with effect from the effective date of the resignation or removal of the
prior Operator. In the case of the removal of the Operator, if the Party, which is the Operator,
or any Party which is an Affiliate of the Operator either fails to vote or votes for
itself or any of its Affiliates as successor to the Operatorship, those votes shall be ignored
and the number of votes required for any such decision shall be ___ per cent (..%)
of the total Percentage Interests held by the other Parties.
3.17.4 Transfer of Operator's Rights and Responsibilities
(a) The outgoing Operator and any successor Operator shall co-operate fully to ensure
a timely and appropriate assignment and transfer of all rights and responsibilities
of the Operator and all records and material pertaining thereto. This
and the following subsection shall apply mutatis mutandis in the event of the
appointment of a temporary Operator to the extent necessary to ensure the continuation
of the Joint Operations until the appointment of a successor Operator.
(b) As soon as practicable but in any event no later than the effective date of resignation
or removal of the Operator under Section 3.17, the outgoing Operator
shall hand or deliver to, or relinquish custody in favour of, the successor Operator
which shall be the Non-Operator selected pursuant to Section 3.17.3
above as the successor Operator or, if no such selection shall be made by such
date, the Party with the largest remaining Percentage Interest, all funds relating
to the Joint Account, all Joint Property, all Joint Hydrocarbons and all books,
records and inventories relating to the Joint Operations other than those books,
records and inventories maintained by the outgoing Operator as the owner of a
Percentage Interest. Upon such delivery the outgoing Operator shall be discharged
from all rights and obligations as Operator but without prejudice to
any rights, obligations or liabilities which accrued or which subsequently accrue
in respect of the period when it acted as Operator. The outgoing Operator
shall further use its reasonable endeavours to transfer to the successor Operator,
effective as of the effective date of such resignation or removal, its rights
as the Operator under all contracts exclusively relating to the Joint Operations
and the successor Operator shall assume all obligations of the Operator thereunder.
Pending such transfer and in relation to all other contracts relating to the
Joint Operations (to the extent such so relate) the outgoing Operator shall hold
its rights and interests as the Operator from such effective date for the account
and to the order of the successor Operator and (without prejudice to any liabil-
15

ity of the outgoing Operator arising pursuant to Section 3.3.3) the Parties shall,
from such effective date, indemnify and hold harmless the outgoing Operator
from all obligations thereunder.
(c) As soon as practicable after the date on which the outgoing Operator is required
to transfer its responsibilities as provided in Section 3.17.4 (b), the Parties
shall audit the Joint Account and conduct an inventory of all Joint Property
and Material charged to the Joint Account and all Joint Hydrocarbons and such
inventory shall be used in the return of and the accounting for the said Joint
Property, Material and Joint Hydrocarbons by the outgoing Operator for the
purposes of the transfer of responsibilities under this Section 3.17.4. All costs
and expenses incurred in connection with such audit and inventory shall be for
the Joint Account.
3.18 Disposal and Abandonment
3.18.1 Disposal
If the Operator shall consider that any item of the Joint Property is no longer needed or
suitable for the Joint Operations the Operator shall, subject to the provisions of the Accounting
Procedure and Section 37 of the Licence, dispose of the same.
3.18.2 Abandonment
If the Parties shall decide to abandon the Joint Operations, or any part thereof, the Operator
shall recover and endeavour to dispose of as much of the Joint Property as the
Operating Committee directs can economically and reasonably be recovered or as may
be required to be recovered under the Licence or any applicable law, and the net costs or
net proceeds therefrom shall be charged or credited to the Joint Account.
3.18.3 Abandonment Agreement
The Parties participating in the development will before submission of a development
plan to the Danish Energy Agency agree the terms of an Abandonment Agreement.
Such agreement shall state the terms for the security which each Party shall provide to
the other Parties for its Percentage Interest share of the costs of abandonment (which
expression shall include demolition and removal together with any necessary site reinstatement)
of all or part of any facilities, equipment, installations and pipelines used in
connection with the Joint Operations ("Abandonment").
The Abandonment Agreement shall state the date from which the security shall be provided,
based on estimates of
(i) the likely costs of Abandonment; and
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(ii) the net funds (to be defined in the Abandonment Agreement, but in any case to
be net of expenses of production and costs of Abandonment) available from
production of Hydrocarbons from a Discovery.
The Abandonment Agreement shall further state that - if a Party fails to provide and
maintain the agreed security - such failure shall also constitute a default under this
Agreement and the provisions of Section 11.3.1 shall apply to such default. The Abandonment
Agreement shall further provide for the provision of security in case of assignment.
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4. OPERATING COMMITTEE
4.1 Establishment and Powers
There is hereby established an Operating Committee which shall exercise overall supervision
and control of all matters pertaining to the Joint Operations.
4.2 Representation
The Operating Committee shall consist of one (1) representative appointed by each of
the Parties. Each Party shall as soon as possible after the date of this Agreement give
notice to all of the other Parties of the name of its representative and of his alternate.
Such representatives and alternates may be replaced from time to time by like notice.
The representative of a Party, or in the absence of the representative his alternate, shall
be deemed authorised to represent and bind such Party with respect to any matter which
is within the powers of the Operating Committee. The representative of the Party which
is the Operator shall be the chairman of the Operating Committee, but such representative
shall have no special voting powers as a result of its position as chairman. The representative
of a Party and its alternate may be assisted at all meetings by any advisers
which may reasonably be required.
4.3 Meetings
4.3.1 Venue, Summons
The Operating Committee shall hold meetings each Quarter or meetings at such other
intervals as may be determined by the Operating Committee but in no event less than
once a year. The meetings shall be held in Denmark or at such other place as may be
unanimously agreed by the Operating Committee. The Operator shall call such meetings
and shall unless the Parties otherwise unanimously agree give at least twenty (20) days'
notice of the time and date of each meeting, together with an agenda and all relevant
data and information relating to the matters to be considered at that meeting. By notice
to all the other Parties, any Party may advise of an additional matter or matters which
such Party desires to be considered at the meeting, and shall provide all relevant data
and information relating to the matters to be considered and provided such notice is
given at least ten (10) days before the date of the meeting such matter or matters shall
be deemed added to the agenda proposed by the Operator and be considered at the meeting.
No decision shall be taken on items not included in the agenda sent to all the Parties
or in the above-mentioned notice of additional matters unless all Parties are present and
unanimously agree that such item shall be included.
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4.3.2 Special Meetings
The Operating Committee shall hold a special meeting upon the request of any Party.
Such request shall be made by notice to all the other Parties and state the matter to be
considered at that meeting. Upon receiving such request, the Operator shall call a special
meeting for a date not less than seven (7) nor more than fifteen (15) days after receipt
of the request. By notice to all the other Parties, any Party may advise of an additional
matter or matters which such Party desires to be considered at the meeting, and
provided such notice is given at least five (5) days before the date of the meeting such
matter or matters shall be deemed added to the agenda proposed by the Operator and be
considered at the meeting.
4.3.3 Waiver of Notice
For any meeting of the Operating Committee, the notice to be provided may be waived
with the consent of all the Parties.
4.3.4 Proxy, Prior Voting
Any Party not represented at a meeting may vote on any matter on the agenda for such
meeting by either appointing a proxy in writing or giving notice in writing of such vote
to the Operator prior to the submission of such matter for vote at such meeting.
4.4 Minutes
The Operator shall prepare the minutes of each meeting including a record of its decisions
and a list of the actions required to be taken by the Operator, the Parties or any of
them and provide each Party with a copy thereof not more than fourteen (14) days after
the meeting. Each Party shall notify all other Parties of its approval or disapproval of
the minutes within fourteen (14) days of receipt thereof. A Party who fails to do so will
be deemed to have approved the minutes. The approval or disapproval of minutes as
aforesaid shall not affect the validity of any action taken by the Operator in good faith
prior to notice of disapproval in accordance with the reasonable understanding of any
decisions taken by the Operating Committee in the meeting to which such minutes relate.
4.5 Action without a Meeting
The Parties may vote on and determine by notice to the Operator without holding a
meeting any proposal which is submitted to them by the Operator by notice and which
they could validly determine at a meeting of the Operating Committee. Each Party shall
cast its vote within fourteen (14) days after the proposal is received by it except that
where the Parties are requested to vote on and determine any proposal relating to the
deepening, plugging back, side-tracking, suspension, testing or abandonment of a well
19

on which drilling equipment is then located or where the matter presented for consideration
by its nature requires determination in less than fourteen (14) days and such fact
and such lesser period (which shall not be less than forty-eight (48) hours) are so stated
in the notice submitting the proposal, the Parties shall cast their votes within such lesser
period after receipt of the proposal provided always that in such circumstances each
party shall cast its vote as soon as possible within the relevant periods. Failure by a
Party to cast its vote within the relevant period shall be regarded as a vote by that Party
against the proposal. The Operator shall give prompt notice of the results of any such
voting to the Parties and any decision so taken shall be binding on the Parties. In respect
of any action without a meeting the Operator shall give notice to the Danish Energy
Agency and furnish the Danish Energy Agency with the same information that is furnished
to the Parties and at the same time in accordance with Section 19 of the Licence.
4.6 Sub-Committees
The Operating Committee may establish such sub-committees as it considers desirable
from time to time, however
(a) a technical committee shall be established in any case to discuss all technical,
safety and environmental matters relating to the Joint Operations;
(b) at the request of at least 2 (two) Parties and always during the development
phase the Operating Committee shall establish a contracts committee to consider
and make recommendations to the Operator regarding such contracts as
are described in Section 3.6.2 (g) and (h); and
(c) at the request of any Party, an accounting committee shall be established to
discuss all accounting matters relating to the Joint Operations.
Sub-committee meetings shall be held in Denmark or at such other place as may be
unanimously agreed by the Operating Committee. Each Party shall have one (1) representative
on any such technical or accounting committee, which shall meet each Quarter
unless the Operating Committee shall otherwise decide. The provisions of Section 4.4
are also applicable to this Section 4.6. Each sub-committee established shall be given
terms of reference and shall be subject to such procedures as the Operating Committee
may determine.
The functions of the sub-committees shall be in an advisory capacity or as otherwise determined
unanimously by the Operating Committee.
20

4.7 Voting Procedure
4.7.1 Voting Interest
Each Party shall have a voting interest in the Operating Committee and (if applicable) in
any sub-committees equal to its Percentage Interest.
4.7.2 Pass-mark
Unless otherwise provided in this Agreement, all decisions of the Operating Committee
shall be made by the affirmative vote of [the Party or Parties] [at least … Parties] who
are not Affiliates having individually or in aggregate Percentage Interests of not less
than _____ per cent (..%) provided that the surrender of acreage within the Licence
Area or the surrender or abandonment of the Licence shall require the unanimous
agreement of all the Parties. In the event of a change of any Party's Percentage Interest
at the request of any Party, the Parties shall meet to discuss whether a revision of the
voting rules in Section 4.7.2 is required. Any such revision shall be subject to the approval
of the Danish Energy Agency.
4.7.3 Binding Decision
All the Parties shall be bound by each decision of the Operating Committee duly made
in accordance with the provisions of this Agreement.
4.7.4 Decision on Work Obligations
If the Operating Committee cannot decide on the manner of carrying out the Work Obligations
required under the Licence in sufficient time to fulfil those obligations within
the Licence terms and in accordance with the Licence conditions, then such Work Obligations
will be carried out or satisfied in such manner as shall be favoured by the Party
or Parties holding individually or in the aggregate the greatest Percentage Interests, and
all Parties shall be bound by any such decision.
21

5. PROGRAMMES, BUDGETS AND AFES
5.1 Exploration Programmes and Budgets
The Operator shall submit to each of the Parties not later than September 1st of each
Year a proposed exploration Programme and Budget for the following Year, and forecasts
for the next following three (3) Years and for planning purposes estimates for the
remaining exploration period if any. The Operating Committee shall meet to consider
such exploration Programme and Budget and to make such revisions thereto as may be
agreed as soon as practicable but in any event not later than November 1st. Not later
than December 1st the Operating Committee shall approve an exploration Programme
and Budget for the following Year and consider the forecasts for the next following
three (3) Years.
5.2 Appraisal Programmes and Budgets
In the event of a Discovery, the Operator shall, as soon as possible after such Discovery
has been made, submit to the Parties a report on the Discovery, and - unless otherwise
decided by the Operating Committee - a proposed appraisal Programme, (meeting the
requirements of Section 4, Sub-section 2, of the Licence) and Budget therefore. The report
and the proposed Programme and Budget shall be subject to consideration, revision
and approval by the Operating Committee, which shall be completed as soon as possible,
and in any event such that the six-month time limit set forth in Section 4, Subsection
2, of the Licence can be met. When the report and appraisal Programme have
been approved, the Operator shall submit them to the Danish Energy Agency. In the
event that the Danish Energy Agency requires that the appraisal Programme be amendes
the Operator shall resubmit it to Operating Committee together with a correspondingly
amendes budget for further consideration and the above procedure shall apply duly adjusted
for any new time limit set by the Danish Energy Agency.
5.3 Extension of the Licence
5.3.1 Extension of the Licence for Production
In the event of a Discovery and unless otherwise decided by the Operating Committee,
and with due regard for the need to obtain the approval of the Parties in sufficient time
before the expiry of the exploration period (or any extension thereof), the Operator shall
submit to the Operating Committee a proposed application for the extension of the Licence
for the purpose of production. The proposal shall be accompanied by a report on
the deposit concerned, which in accordance with the requirements of the Danish Energy
Agency describes the geological, technical and economic characteristics upon which the
appraisal of the deposit is based. As soon as possible after the approval by the Operating
22

Committee of the application and the report, the Operator shall submit them to the Danish
Energy Agency. If the Operating Committee decides that an application for extension
shall not be submitted, the Operator shall submit to the Danish Energy Agency a
report on the deposit which has been approved by the Operating Committee. If the necessary
majority required by Section 4.7.2 for the submission of an application for extension
covering one or more Deposits is not achieved, and the failure to submit an application
at the time in question will result in the expiry of the Licence, the Parties wishing
to do so may submit an application for an extension of the Licence covering the Deposit,
to be effective as of the expiry of the exploration period. The Parties not participating
in such an application shall cease to be Parties to said extension of the Licence.
The Parties not wishing to join in such an application shall take no action which would
unreasonably prejudice such an application.
5.3.2 Extension of the Licence for the Purpose of Further Exploration
(a) Subject to Section 13, Subsection 1 of the Subsoil Act and Section 5.3.3 below
and except to the extent not already included in an application under Section
5.3.1 the Operator and any other Party may propose by notice to the Operating
Committee to submit an application for extension of the Licence for the purpose
of further exploration and the terms and conditions suggested to apply. As
soon as possible after the approval by the Operating Committee of the application,
the Operator shall submit it to the Danish Energy Agency.
(b) If the necessary majority required by Section 4.7.2 for the submission of an application
for extension for the purpose of further exploration is not achieved,
and the failure to submit an application at the time in question will result in the
expiry of the Licence, the Parties wishing to do so may submit an application
for an extension of the Licence for the purpose of further exploration to be effective
as of the expiry of the Licence. If Nordsøfonden wishes to participate it
shall at the same time notify the other Parties wishing to submit an application
which Percentage Interest it will participate with in accordance with Section
5.3.4. In the event that such Parties are unable to agree on the terms and conditions
suggested to apply to the extension, the proposal attracting the votes of
the Party or Parties having the largest Percentage Interest(s) shall form the basis
for the application. The Parties not participating in such an application shall
cease to be Parties to said extension of the Licence and shall take no action
which would unreasonably prejudice such an application. In the event that the
Danish Energy Agency rejects an application thus submitted, but, however, allows
for the re-submission thereof subject to amendment of terms and conditions
as may be advised by it, then also the Parties which did not participate in
23

the application first submitted shall be offered and be entitled to participate in
any amended application to be submitted.
5.3.3 Extension of the Licence for the Purpose of a Sole Risk Operation
If an extension of the Licence is submitted for the purpose of carrying out or continuing
a sole risk operation according to Section 7.2 the provision in Section 5.3.2 shall not
prejudice the right of a Party not participating in such operation to continue as a Non-
Sole Risk Participant according to the provisions in Article 7 and in such case the provision
of Article 7 shall apply to the Operators.
5.3.4 Percentage Interests of the Participants in an Extension
If less than all Parties participate in an application for an extension of the Licence in accordance
with Section 5.3.2 and unless otherwise unanimously agreed by the participating
Parties the percentage interest of each participating Party shall be the proportion that
its Percentage Interest bears to the total of the Percentage Interests of all participating
Parties. However, in the event Nordsøfonden decides to participate in an application for
an extension of the Licence in accordance with Section 5.3.2 Nordsøfonden may elect
to participate either with a percentage interest calculated as herein described or with its
Original State Participation Share.
5.4 Development Programmes and Budgets
5.4.1 Preparation and Decision
At such time as the Operating Committee determines that a proposal for a development
Programme and Budget for one or more deposits shall be prepared, it shall direct the
Operator to carry out such preparations. The Operating Committee shall establish a subcommittee
to supervise the preparations. The Operator shall keep this sub-committee
fully informed about the progress of the work and submit major decisions for the consideration
of the sub-committee. The proposal shall include:
(a) a description of the Deposit(s) to be produced with detailed analysis and
evaluations of geological conditions, technical aspects of the reservoir and production,
and economic factors;
(b) a production plan with particulars concerning the date for commencement of
production and the anticipated magnitude of the annual production for each
Year the deposit is planned to be in production. If the plan encompasses more
than one Deposit, such particulars shall be given for each Deposit covered by
the plan as well as for the cumulative production anticipated under the plan;
(c) a general description of the facilities planned to be installed, including the
number and type of wells, and equipment for production, reinjection, measure-
24

ment, storage and processing, and of pipelines between individual parts of the
facilities, as well as a more detailed description of the transportation system
planned for the produced Hydrocarbons;
(d) a risk analysis for the planned facilities with a statement of measures to be
taken to reduce identified risks;
(e) a plan for the manner in which the development project is to be carried out, including
a time schedule and organisational plan for the execution of the project;
(f) a detailed description of any elements of uncertainty in the project with respect
to reserves, the time schedule, economics etc., together with all other data,
studies, interpretations, map models etc., which may be necessary for an
evaluation of the project.
The proposed Programme and Budget shall be put before the Operating Committee as
soon as possible after their preparation. If the proposed Programme and Budget are approved,
each of the Parties shall, within the next one hundred (100) days or such longer
period as may be determined by the Operating Committee (however, not exceeding one
hundred and eighty (180) days), declare in writing to the other Parties whether it will
participate in the development and the expenses thereof to the extent of its Percentage
Interest share. The Programme and Budget shall be renewed and updated annually until
the Programme has been completed. If fewer than all the Parties decide to participate in
such development, the provisions of Section 7.6.3 shall apply. If the Operating Committee
fails to approve the proposed Programme and Budget, the provisions of Section
7.6.2 shall apply.
5.4.2 All Parties Participate
If all the Parties decide to participate in such development the Operator, under the direction
of the Operating Committee, shall prepare and submit a development plan to the
Danish Energy Agency. If the Danish Energy Agency, in approving the development
plan, requires that it be amended, any of the Parties may, by notice to the other Parties
given within twenty-eight (28) days following such approval, elect not to proceed with
the development. If no Party gives such notice, the approved plan (with any amendments
as aforesaid) shall be adopted for the development, the Parties shall be obligated
to participate in carrying it out, and the Operator shall be authorised and obligated to
proceed in accordance with it. If less than all the Parties elect to proceed with the development,
the provisions of Section 7.6.4 shall apply.
5.5 Production Programmes and Budgets
The Operator shall not later than September 1 st of the Year prior to that in which production
will commence, and in each subsequent Year, submit to the Parties a proposed
25

production Programme and Budget for the next Year, and forecasts for the next following
three (3) Years. The proposed production Programme and Budget shall be subject to
consideration, revision and approval by the Operating Committee, and the Operating
Committee shall meet to consider such production Programme and Budget and to make
such revisions thereto as may be agreed as soon as practicable and in any event not later
than November 1st. Not later than December 1st the Operating Committee shall approve
a production Programme and Budget.
5.6 Abandonment Programmes and Budgets
At such time as the Operating Committee determines that a proposal for an abandonment
Programme and Budget shall be prepared, it shall direct the Operator to carry out
such preparations. The proposed Programme and Budget shall be put before the Operating
Committee as soon as possible after their preparation. When the proposed Programme
and Budget are approved, the Operator shall be authorised and obligated to
proceed in accordance with it subject to the approval of the Danish Energy Agency. The
Programme and Budget shall be renewed and updated annually until the Programme has
been completed.
5.7 Information in Programmes and Budgets
Each Programme and Budget provided for in this Article 5 shall set out in reasonable
detail the projects and work proposed to be carried out, the goods and services to be
purchased, the information required under Article 2 of the Accounting Procedure and
such other information as shall be decided upon by the Operating Committee. The forecasts
shall to a reasonable extent set out the same information. The Programmes and
Budgets shall also set forth an estimate of the expenditures required, broken down by
Quarters.
5.8 Status Reports
The Operator shall as of June 30th of each Year provide to each of the Parties a status
report regarding all then current Programmes and Budgets and anticipated revisions to
be proposed during the remainder of the Year. If required by two (2) or more Parties the
Operator shall provide Quarterly status reports.
Furthermore, the Operator shall as of 31 January of each Year after a development plan
has been approved provide to each of the Parties a status report of contracts entered into
showing subject, date and amount of each contract.
26

5.9 Authorisation to Proceed
5.10 AFEs
Subject to Section 5.10 and to obtaining any necessary consents of the Danish Energy
Agency, the Operator shall be authorised and obligated to proceed with any approved
Programme and Budget.
Except for emergency expenditures as provided for in Section 3.11 and expenditures as
mentioned in Section 2.3.2 of the Accounting Procedure, the Operator shall before entering
into any commitment or incurring any expenditure under an approved Programme
and Budget submit to the Parties an AFE therefor. An AFE shall include the information
set out in, and be prepared in accordance with, Section 7.2 of the Accounting Procedure.
To the extent that the Operating Committee approves an AFE, the Operator shall be
authorised and obligated, subject to Section 5.11, to proceed with such commitment or
expenditure.
5.11 Amendments
At any time the Operator and any other Party may, by notice to all the other Parties,
propose that an approved Programme and Budget and/or approved AFE be amended.
To the extent that an amendment is approved by the Operating Committee, the approved
Programme and Budget and/or AFE shall be deemed amended accordingly, and a revised
AFE and/or Budget prepared, reflecting the decision provided that such amendment
shall not invalidate any authorised commitment or expenditure made by the Operator
prior thereto.
[5.12 Drill-or-Drop
[If applicable. The exact wording of this Section will depend on the License.]
(a) if within … (..) Months after the issuance of the Licence the Operating Committee
decides to commit to the Danish Energy Agency to drill an exploratory well
according to Section … of Annex 2 to the Licence then such exploratory well
shall be deemed to be part of the Work Obligations and no Party may withdraw
until such Work Obligations have been fulfilled, ref. Section 10.1.2.
(b) If within … (..) Months after the issuance of the Licence the Operating Committee
has not decided to commit to drill an exploratory well according to Section
.. of Annex 2 to the Licence then any Party or Parties may propose to
carry out the drilling in accordance with the provisions in Article 7.
27

6. ACCOUNTING PROCEDURE AND COSTS AND EXPENSES
6.1 Adoption and Conflict
The Accounting Procedure attached hereto as Appendix A is hereby made a part of this
Agreement. In the event of any conflict between any provision in the main body of this
Agreement and any provision in the Accounting Procedure, the provision in the main
body shall prevail.
6.2 Payment of Costs and Expenses
Each Party agrees to pay to the Operator its respective share of costs and expenses and
in accordance with the Accounting Procedure.
28

7. SOLE RISK OPERATIONS AND DEVELOPMENT BY LESS THAN
ALL PARTIES
7.1 Rights to Propose
7.2 Types
At any time one or more Parties may propose by notice to the Operating Committee that
operations be carried out which are not included in a Programme approved by the Operating
Committee. Any such notice shall include a description of the nature, method and
timing of the operations proposed and the estimated total expenditure to be made in
connection therewith together with such other relevant information as is necessary in
order to allow the Parties to consider the proposal and elect whether or not to participate.
Subject to the following provisions of this Article such operations may be carried
out by the proposing Party and any Parties choosing to participate in such operations
(the "Sole Risk Participants") on a sole risk basis.
Subject to the other provisions hereof, the following types of sole risk operations may
be proposed and carried out:
(a) geophysical surveys;
(b) the drilling of an exploratory or appraisal well;
(c) the deepening or side-tracking of a suspended well or well in the course of being
drilled or the testing of zones penetrated by a suspended well or a well in
the course of being drilled; or
(d) the development of a Discovery.
7.3 Restrictions and Conditions
The following restrictions and conditions shall be applicable with respect to any proposed
sole risk operations:
(a) no sole risk operations may be carried out unless the Operating Committee has
decided that such operations shall not be carried out as part of the Joint Operations.
Such decision of the Operating Committee shall be taken within one
Month after the Operating Committee has received a written notice by the proposing
Party giving the information required in Section 7.1. Each Party may
choose to participate in any operation to be carried out on a sole risk basis provided
that such Party within one Month after the decision of the Operating
Committee submits to the proposing Party written notice thereof. When a sole
risk operation of the type referred to in Section 7.2 (c) in relation to a well in
29

the course of being drilled is proposed the above mentioned time limits shall,
however, be forty-eight (48) hours, respectively;
(b) no sole risk operations can be carried out if such operations would conflict with
or prejudice any part of any development or other Programme approved by or
under active consideration by the Operating Committee;
(c ) no drilling of an appraisal well with respect to a Discovery can be carried out
unless the Operating Committee shall have decided not to engage in any appraisal
drilling with respect to such Discovery as part of the Joint Operations or
the Operating Committee has abandoned or completed its appraisal Programme
with respect to such Discovery and decided not to prepare a development Programme
with respect thereto;
(d) any proposal to drill an exploratory well or to deepen or side-track a suspended
well in or through an existing Discovery shall require the approval of the Operating
Committee to evidence that such proposal is not in breach of Section 7.3
(b) above (such approval not to be unreasonable withheld) before such drilling,
deepening or side-tracking is carried out; and
(e) if the sole risk operations are not commenced within twelve (12) months after
the time limit in Section 7.3 (a) third paragraph above the Sole Risk Participants
lose the right to carry out the sole risk operations and the relationship between
the Parties shall be deemed to be as if the sole risk operations had never
been proposed.
7.4 General Provisions
7.4.1 Indemnification
Any sole risk operations will be carried out at the sole risk, cost and expense of the Sole
Risk Participants. In addition, the Sole Risk Participants shall jointly and severally indemnify
and hold harmless the other Parties ("Non-Sole Risk Participants") and Operator
(if a Non- Operator is operating the sole risk operations under Section 7.4.4 and subject
always to Section 3.3.3) against all actions, claims, demands and proceedings whatever
brought by any third party arising out of or in connection with the sole risk operations
and shall further jointly and severally indemnify the Non-Sole Risk Participants
and Operator (if a Non- Operator operating the sole risk operations under Section 7.4.4
and subject always to Section 3.3.3) against all damages, costs, losses and expenses
whatsoever directly or indirectly caused to or incurred by them as a result of anything
done or omitted to be done in connection with the carrying out of the sole risk operations,
excepting only damage inflicted to the subsurface including any reservoir. Any
approval by the Non-Sole Risk Participants of the conduct of sole risk operations shall
not constitute a waiver of these provisions.
30

7.4.2 Use of Joint Risk Property
Sole Risk Participants carrying out sole risk operations shall be entitled to use Joint
Property for such sole risk operations unless the Operating Committee otherwise decides.
The Operating Committee shall also decide the terms and conditions upon which
any Joint Property may be used, it being understood that the use of Joint Property shall
not be unreasonably withheld and that the charges for such use shall be on a reasonable
and equitable basis.
7.4.3 Sole Risk Operator
If the Operator is a Sole Risk Participant, or if the Operator and the Sole Risk Participants
so agree, the Operator shall be operator for the sole risk operations. If the Operator
is a Non- Sole Risk Participant it may only decline to carry out sole risk operations
which are new work, such as a new well, but not operations which are a continuation of
work started, such as the deepening or testing of a well. If the Operator does not carry
out the sole risk operations such work shall, subject to the prior consent of the Danish
Energy Agency, be carried out by the Party designated by the Sole Risk Participants.
7.4.4 Data and Information
Sole Risk Participants shall be entitled for the purpose of sole risk operations to utilise
any data and information owned jointly with the Non-Sole Risk Participants. Data and
information obtained pursuant to the carrying out of sole risk operations under Section
7.2 (b) or (c) shall not be made available to the Non-Sole Risk Participants unless the
Sole Risk Participant(s), or any of them or any Non-Sole Risk Participant who has become
an owner of such data and information makes a proposal to carry out further drilling
or to carry out extended testing or development operations in respect of a Discovery,
the subject of the operation under Section 7.2 (b) or (c). In this case a Non-Sole Risk
Participant shall be entitled to have access at the Sole Risk Participant’s premises to
such data and information to the extent relevant and for the purposes only deciding
whether or not to participate in appraisal drilling or a development Programme as provided
in Section 7.5.3 but such data and information shall remain the property of the
Sole Risk Participants. In the event that one or more of the Non-Sole Risk Participants
discharges in full its liability to Sole Risk Participants under Section 7.5.3 hereof, such
data and information shall become the joint property of the participants discharging
such liability and the Sole Risk Participants.
7.4.5 Sole Risk Percentage Interest
Unless the Sole Risk Participants otherwise unanimously agree the Percentage Interest
of each participant in a sole risk operation shall be the proportion that its Percentage Interest
bears to the total of the Percentage Interests of all Sole Risk Participants. In the
event Nordsøfonden decides to participate in a sole risk operation Nordsøfonden may
31

elect to participate either with a Percentage Interest calculated as herein described or
with its Original State Participation Share in the area in which the sole risk operation is
carried out. Upon a Non-Sole Risk Participant electing to participate in further operations
arising out of a sole risk operation and making such payments as may be due in
accordance with section 7.5.1. – 7.5.2 inclusive (and without prejudice to any further
payment which may become due pursuant to Section 7.5.4), such Sole Risk Participant
shall (unless the Sole Risk Participants otherwise agree), assume its Joint Operations
Percentage Interest share in such further operation and all rights and liabilities attributable
thereto.
7.4.6 Sole Risk Administration
In connection with any sole risk operations:
(a) the sole risk operation will be carried out under the overall supervision and
control of the Sole Risk Participant in lieu of the Operating Committee;
(b) the computation of costs and expenses of the sole risk operation incurred by the
Sole Risk Participant shall be made in accordance with the principles set out in
the Accounting Procedure;
(c) the Operator or the Sole Risk participant carrying out the sole risk operation
shall maintain separate books, records and accounts (including bank accounts)
for the sole risk operations which shall be subject to the same right of examination
and audit by the Sole Risk Participants and, so long as they are entitled to
elect to participate in the sole risk operations, the Non-Sole Risk Participant, as
those relating to the Joint Operations;
(d) the costs and expenses of the sole risk operation shall not be reflected in the
statements and billings rendered by the Operator for the Joint Operations; and
(e) if the Operator is carrying out a sole risk operation on behalf of a Sole Risk
Participant, the Operator shall be entitled to make Cash Calls on the Sole Risk
Participants in connection with the sole risk operation and shall not use Joint
Account funds or be required to use its own funds for the purpose of paying the
costs and expenses of the sole risk operations; furthermore the Operator shall
not be obliged to commence or, having commenced, to continue the sole risk
operations unless and until the relevant Advances have been received from the
Sole Risk Participants.
32

7.5 Consequences
7.5.1 Access to Data and Information
Any Party which does not participate in sole risk operations carried out under Section
7.2 (a) shall not be entitled to have access to any data or information obtained in respect
of such sole risk operations, provided that any Non-Sole Risk Participant may at any
time become entitled to have access to and shall become a joint owner of such data and
information obtained from such sole risk operations upon payment in cash to the Sole
Risk Participants of an amount equal to………per cent (..……%) of the amount it
would have contributed to the Joint Account if such operations had been carried out as
part of the Joint Operations.
7.5.2 Joint Drilling as a Result of Sole Risk Geophysical Survey
If the sole risk operations carried out under Section 7.2 a) result in the identification of a
prospect which the Operating Committee approves for drilling for the Joint Account,
then each Non-Sole Risk Participant with respect to such operations who has not previously
in accordance with Section 7.5.1 obtained access to such data and information and
who wishes or is obliged to participate in the drilling of a well on such prospect or development
program shall pay the Sole Risk Participants with respect to such operations,
in cash, an amount equal to…………. per cent (………….%) of the amount it would
have contributed to the Joint Account had such operations been carried out as part of the
Joint Operations. Such payment shall be made before the commencement of drilling of
such well, and the Parties making the payment shall thereupon receive from the Sole
Risk Participants all data and information obtained from the sole risk operations and
shall become a joint owner of such data and information.
7.5.3 Additional Activities as a Result of Sole Risk Drilling
If sole risk operations carried out under Section 7.2 b) or 7.2 c) result in a particular
Discovery or result in a decision by the Sole Risk Participants or one or some of them to
carry out appraisal drilling or a development programme with respect to a particular
Deposit, then the Sole Risk Participants shall in each case notify the Non-Sole Risk Participants
thereof. Any Non-Sole Risk Participant who wishes to participate in appraisal
drilling or a development Programme relating to that Deposit shall notify the Sole Risk
Participants of its participation within twenty eight (28) days in case of appraisal drilling
and within ninety days (90) days in case of a development programme and such
Non-Sole Risk Participant must pay to the Sole Risk Participant(s) an amount equal to
the amount it would have contributed to the Joint Account had such sole risk operations
been carried out as part of the Joint Operations plus a penalty equal to ………..per cent
(……… %) of such amount. Such amount shall be paid, in cash, before the commencement
of the appraisal drilling or development Programme in question (in the curren-
33

cies in which Cash Advances were made by the Sole Risk Participants) plus interest at
the Cost of Funds Rate from the date of notification from the Sole Risk Participants to
the Non-Sole Risk Participants until the date of payment. Such Payment shall be credited
to the Sole Risk Participant or, if more than one, to each Sole Risk Participant in the
proportion that its Percentage Interest bears to the sum of the Percentage Interests of all
the Sole Risk Participants or in such other proportion as they may have agreed under
Section 7.4.6. However in case of participation in a development programme the Non-
Sole Risk Participant may elect to pay the Sole Risk Participants' share of cost of the
development until such amounts have been paid.
7.6 Sole Risk Development and Development by Less than All Parties
7.6.1 Sole Risk Preparation of a Development Programme
In the event the Operating Committee rejects a proposal to prepare a development Programme
and Budget for a particular Deposit and provided that any appraisal Programme
approved by the Operating Committee in relation to that Deposit has been completed or
any AFE in respect of appraisal work included in an appraisal work included in an appraisal
Programme has been rejected by the Operating Committee, any Party may prepare
and submit a proposed development Programme and Budget for such Deposit to
the Parties and the Operating Committee shall meet and consider it as soon as practicable
after its proposal.
7.6.2 Sole Risk Proposal of a Development Programme
(a) In the event the Operating Committee does not approve a development Programme
and Budget submitted in accordance with Section 5.4.1 or Section
7.6.1, then any Party may give notice to the other Parties of its intention to develop
the Discovery at sole risk. Such notice shall be accompanied by details of
its proposed development Programme and Budget. The other Parties may give
counter notice within sixty (60) days that they wish to participate in the development.
If all the other Parties elect to participate, the Parties shall proceed
with the development accordingly, and the provisions of Section 5.4.2 shall apply
upon the Danish Energy Agency approving the development plan.
(b) If the development of a Discovery is carried out in accordance with Section
7.6.2(a) then the Party or the Parties which prepared the development Programme
and Budget shall be entitled to charge all reasonable costs incurred in
the preparation thereof to the Joint Account together with interest calculated on
a day to day basis at the rate of one per cent (1%) above the Cost of Funds Rate
from the date on which the costs were incurred to the date of repayment, inclusive.
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7.6.3 Development by Less than All Parties
In the event that following approval by the Operating Committee of a development Programme
and Budget pursuant to Section 5.4.1, or following any notice served under
Section 7.6.2 (a) less than all the Parties elect to participate in the development of a
Discovery, those Parties which elected to participate shall be entitled to proceed to develop
the Discovery at their sole cost and risk in accordance with the relevant Programme
and Budget; provided that if the Danish Energy Agency's approval of the development
plan is conditional on such development plan being amended, then the Parties
participating in the development shall give notice to the other Parties of such
amendments and within twenty-eight (28) days of such notice:
(i) any of the Parties participating may, by notice to all the other Parties, elect not
to proceed; and/or
(ii) any of the Parties not participating may by notice to all the other Parties elect
to do so.
Those Parties which at the expiration of the said period of twenty-eight (28) days are
participating in the development shall be obligated to carry it out.
7.6.4 Less than All Parties Proceed
In the event that following the Danish Energy Agency approving the development plan
in which all the Parties are participating, any of the Parties elects not to proceed with the
development under Section 5.4.2 the other Parties shall be entitled to proceed with the
development in accordance with the approved development plan (as amended) and if
they do so proceed shall be obligated to carry out the development.
7.6.5 Percentage Interest in Sole Risk Development
(a) In the event that less than all the Parties participate in the development of a
Discovery in which no sole risk drilling has been carried out, then, unless all
the Parties participating in such development unanimously agree otherwise, the
Percentage Interest of each Party in such development shall be the proportion
that its Percentage Interest bears to the total of the Percentage Interests of all
participating Parties.
(b) In the event that less than all Parties participate in a development of a Discovery
in respect of which sole risk drilling has been carried out then, unless the
Parties participating in such development unanimously agree otherwise:
(i) if the original Sole Risk Participant in the first such sole risk drilling
(or if more than one such participant, all such participants) participates
in the development, then the Percentage Interest in such development
of each Party which was not an original Sole Risk Party shall equal its
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Percentage Interest in the Licence, and the remaining Percentage Interest
in the development shall be held by the original Sole Risk Participant
(if more than one, in proportion to their Percentage Interest in
the Licence or in such other proportions as they may have agreed),
(ii) if less than all such original Sole Risk Participants participate in the
development, then the calculation under (i) above shall first be performed
as though all such original Sole Risk Participants were participating.
The Percentage Interest in such development of those original
Sole Risk Participants who do not participate shall then be allocated to
all the participating Parties, in proportion to the percentage interest
obtained in such preliminary calculation.
7.6.6 Rights in the Sole Risk Development
Any Party which does not participate in the development of a Discovery shall have no
further rights in such development.
7.6.7 Sub-Area
Development of a Discovery by less than all Parties will in respect of the area comprised
therein be regarded as creating a Sub-Area, and this Agreement shall as far as
possible apply independently in the manner of a separate contract to such Sub Area and
apply mutatis mutandis to the interests of the Parties participating in the sole risk development
subject to the provision of Section 9.1 (a) provided that
(a) forfeiture upon default under Section 11.3.3 with respect to operations shall
mean forfeiture of the Defaulting Party’s Percentage Interest in the entire Licence
Area, subject to the following provisions:
(i) The Non-Defaulting Parties who are also Sole Risk Participants for
any particular sole risk operation shall have the right to acquire the
Defaulting Party’s Percentage Interest in the sole risk operation and
relevant property and Sub-Area, subject to the provisions of Section
11.3 as applied mutatis mutandis to such sole risk operation, property
or Sub-Area, and
(ii) All Non-Defaulting Parties shall have the right to acquire the Defaulting
Party’s Percentage Interest in the remainder of the Licence area,
subject to the provisions of Section 11.3;
(b) the Sole Risk Participants shall have a right of access to the Sub-Area; and
(c) there shall be no separate right of assignment or withdrawal and accordingly
Article 9 shall not apply independently to such separate contract.
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Non-participating Parties shall be indemnified by participating Parties in the manner described
in Section 7.4.1.
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8. DISPOSAL OF HYDROCARBONS
8.1 Right and Obligation
Subject to Section 11.3.1 each of the Parties participating in a development shall have
the right and be obliged to take in kind and separately dispose of its Percentage Interest
share of the total quantities of Hydrocarbons available under this Agreement, provided
always that the Operator shall have the right to use in any operations relating thereto as
much of such Hydrocarbons as may be needed by it therefor. Each of such Parties shall
have the obligation to lift and separately dispose of its Percentage Interest share of all
Hydrocarbons produced and/or stored at such point or points of delivery, at such times,
in such quantities and in accordance with such off-take procedures as may be agreed.
8.2 Lifting/Off-take Procedures for Hydrocarbons
The Parties participating in a development shall meet as soon as practicable following
the approval of a development plan in accordance with Section … of the Licence and
shall prior to the proposed commencement of production agree necessary supplemental
provisions to this Agreement covering lifting/off-take and operating procedures in respect
of such development including for gaseous Hydrocarbons (natural gas) any necessary
gas balancing procedures.
8.3 Failure to Lift Liquid Hydrocarbons
In the event that any of the Parties for any reason fails to lift such quantities of liquid
Hydrocarbons as are to be lifted by it in accordance with agreed offtake procedures or
consistently nominates less than its full entitlement of liquid Hydrocarbons and thereby
in the reasonable opinion of the Operator prejudices the efficiency of the production operation,
the Operator shall arrange to lift, or have lifted, the relevant underlifted quantity
of liquid Hydrocarbons of said Party or Parties and shall dispose of the same at such
prices as it can reasonably obtain in all the circumstances and shall credit to said Party
or Parties the price obtained therefore net of the costs and expense of such sale and after
deduction of a reasonable handling fee.
8.4 (Deleted)
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9. ASSIGNMENTS AND ENCUMBRANCES
9.1 Assignments
As used in this Article 9, "assign" refers to both the assignment of benefits, rights and
interests and to the transfer of duties, obligations and liabilities, and "assignment", "assignee"
and "assignor" shall be construed accordingly.
Subject to the provisions in Section 9.2 each of the Parties hereto shall have the right at
any time to assign in whole or part its benefits, duties and obligations under this
Agreement, provided, however that:
(a) no Party may assign any right, title, interest, benefit, duty or obligation in or
under the Licence or this Agreement separately, it being the intent hereof that
any such assignment in or under the Licence must carry with it the equivalent
right, title, interest, benefit, duty and obligation in and under this Agreement,
and vice versa and so that, for the avoidance of doubt, any assignment of all or
part of the Party’s Percentage Interest shall include such Party’s corresponding
interest in any Sole Risk project and (if applicable) Sub-Area, and vice versa;
(b) any assignee must be of technical and financial standing sufficient to perform
the duties and obligations hereunder to the extent of the interest and property
assigned;
(c) any assignment shall be subject to the terms and provisions of this Agreement
and the assignee shall assume and agree to perform or pay the assignor's duties,
obligations and liabilities hereunder to the extent of the interest assigned and
whether such duties, obligations and liabilities are incurred prior to or after the
effective date of such assignment;
(d) no Party may assign its right, title, benefits, interests, duties or obligations or
any part thereof without the prior written consent of the other Parties to such
assignment and all terms and conditions pertinent thereto provided, however,
that such consent will not be unreasonably withheld if the assignee is a company
or a corporation which on request can demonstrate that it has adequate
technical and financial resources to meet its obligations hereunder including
abandonment obligations and the provisions of any necessary security for the
fulfilment of the obligations under the Licence in substitution (whether in
whole or in part) for the security provided by the assignor and the other provisions
and conditions hereunder have been satisfied and met and provided further
that a Party who fails to notify the assigning Party that it is withholding its
consent on the aforesaid grounds within thirty (30) days of being notified by
the assigning Party of the proposal to assign and the identity of the proposed
39

assignee and the other provisions and conditions of this Article having been
satisfied and met shall be deemed to have given its consent;
(e) no such assignment shall be binding on any of the non-assigning Parties hereto
until the day on which the assignor furnished to each of the non-assigning Parties
a certified copy of the final assignment agreement(s) and any other documents
inclusive of all terms and conditions pertinent to such assignment such
documents to include a written instrument (in form and content to the reasonable
satisfaction of the Parties and duly executed by the assignee) accepting
and assuming all of the obligations under this Agreement insofar as the interest
assigned is concerned;
(f) no Party may assign any right, title, interest, benefit, duty, obligation or liability
in or under the Licence or this Agreement without obtaining the written
consent of the Danish Energy Agency to such assignment;
(g) any Party assigning all or part of its interest in or under this Agreement or the
Licence shall remain liable to the other Parties for all obligations attaching to
the interest assigned which are incurred prior to the effective date of such assignment,
and such obligations shall in addition become the obligations of the
assignee;
(h) all costs and expenses pertaining to any assignment shall be the responsibility
of the assignor;
(i) notwithstanding the provisions in Sections 9.1 (a)-(h), Nordsøfonden always
shall be entitled to assign, in whole or in part, its rights in and under this
Agreement and the Licence to the State, to a company owned by the State, or
to a Subsidiary of any such company. The State or the company to which such
rights and obligations are transferred shall similarly be entitled to assign its
rights and obligations in whole or in part to the State, to a company owned by
the State, or to a Subsidiary of any such company. Upon an assignment pursuant
to this Section 9.1 (i) the assignee shall assume the corresponding obligations
which, as of the time of the assignment, were the responsibility of the assignor
in its capacity as a Party; and
(j) a Party may not include a clause in the assignment agreement to the effect that
the agreement shall be terminated if the preferred right and option to purchase
according to Section 9.2 is exercised.
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9.2 Option to Purchase
9.2.1 Bona Fide Offer and Exercise of the Option
If any Party receives or makes a bona fide offer which it or (as the case may be) the prospective
purchaser is willing to accept for the purchase of all or a part of such Party’s
Percentage Interest and the prospective purchaser (whether another Party or a third
party) is able to purchase such interest, the Party receiving or making said offer shall
give written notice thereof to each of the other Parties, including in said notice the name
and addres of the prospective purchaser, the price offered and all other pertinent terms
and conditions of the offer. The other Parties, for a period of sixty (60) days after the receipt
of said notice, shall have the prior and preferred right and option, in proportion to
their respective Percentage Interests to purchase the interest covered by said offer. If
fewer than all of the other Parties desire to exercise such right and option, they shall
have the right to purchase the interest covered by said offer in proportion to the respective
Percentage Interests of those electing to purchase.
9.2.2 No Parties Exercise the Option
If none of the other Parties exercises said right and option by giving written notice of its
acceptance within sixty (60) days after receipt of the above-mentioned notice, the Party
which received or made said offer shall be entitled to receive the written approval of the
other Parties, subject to the provisions of Sections 9.1 (a)-(j), and may complete the sale
to the prospective purchaser in accordance with said offer within six (6) months after
the expiration of said period of sixty (60) days; provided that, if the Party which receives
or makes said offer fails to complete the sale within said period of six (6)
months, the preferred right and option of the other Parties under Section 9.2.1 shall be
considered as revived, and the Party which received or made said offer shall not complete
the sale to the prospective purchaser unless and until said offer again has been presented
to the other Parties, as hereinabove provided, and said other Parties again have
failed to elect to purchase on the terms and conditions of said offer. All offers at any
time made to or by any Party for the purchase of its Percentage Interest covered hereby
shall be subject to all the terms and conditions of Section 9.2.1. The six (6) months period
hereinabove provided shall be extended as may reasonably be necessary to secure
the approval of the assignment by the appropriate governmental authorities, provided
the Party acts expeditiously in attempting to secure governmental approval.
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9.2.3 Exceptions
Sections 9.2.1 and 9.2.2 above shall not apply to:
(a) any assignment by a Party to an Affiliate of that Party,
(b) any assignment or disposition of the Percentage Interest of a Party by corporate
merger or consolidation, or
any assignment under Section 9.1 (i).
9.3 Encumbrances
Nothing contained in this Article 9 shall prevent a Party from mortgaging, pledging or
otherwise encumbering all or part of its interests in the Licence and in and under this
Agreement for the purpose of security relating to finance, provided that:
(a) such Party shall remain liable for all obligations relating to such interest; and
(b) the encumbrance shall be subject to any necessary approval of the Danish Energy
Agency and be expressly subordinated to the rights of the other Parties
under this Agreement.
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10. WITHDRAWAL
10.1 Rights
10.1.1 Notice of Withdrawal
Any Party may, subject to the other provisions hereof, at any time give notice to the
other Parties that it wishes to withdraw from the Licence and this Agreement by offering
its Percentage Interest to such other Parties. Within ninety (90) days of receipt of
such notice, any other Party may similarly give notice that it wishes to withdraw from
the Licence and this Agreement by likewise offering its Percentage Interest to the other
Parties. If all the other Parties give such notice, the Parties shall be deemed to have decided
to abandon the Joint Operations and the Licence shall be surrendered on the earliest
possible date. If less than all the Parties give such notice, the withdrawing Parties
shall withdraw from the Licence and this Agreement on the earliest possible date and
shall assign their respective interests in the Licence and in and under this Agreement to
the non-withdrawing Parties without any compensation whatsoever.
10.1.2 Work Obligations to be Fulfilled
Subject to Section 10.2.6 no Party shall have any right to withdraw hereunder until all
Work Obligations shall have been fulfilled.
10.1.3 Withdrawal from a Development Programme
Subject to Section 10.2.6 no Party participating in a development Programme may
withdraw from the Licence and this Agreement prior to the completion of all the works
comprised in such development Programme.
10.1.4 Approval by the Danish Energy Agency
A Party may only withdraw from the Licence and this Agreement after the Danish Energy
Agency has approved that the conditions of the Licence for such withdrawal have
been met with.
10.2 Conditions
10.2.1 Allocation of Percentage Interests
A withdrawing Party shall assign all of its said interest to such non-withdrawing Parties
as wish or are obliged to accept, and the said interest shall (unless otherwise agreed by
such non-withdrawing Parties) be allocated to them in the proportion in which their respective
Percentage Interests prior to the effective date of withdrawal (as hereinafter defined)
bear to the total of the same.
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10.2.2 Execution of Documents
A withdrawing Party shall execute and deliver any and all documents necessary to effect
such assignment and a withdrawal shall not be effective and binding upon the Parties
until the date upon which the documents have been approved by the Danish Energy
Agency and by the Parties (the agreement of the Parties not to be unreasonably withheld)
and shall be in full force and effect ("the effective date of withdrawal").
10.2.3 Maintenance of the Licence
A withdrawing Party shall promptly join in all actions required by the other Parties for
the maintenance of the Licence, provided that its participation in such action shall not
cause it to incur after the date on which notice of withdrawal shall have been given any
financial obligations except as provided in this Article 10.
10.2.4 Costs and Expenses
A withdrawing Party shall pay all costs and expenses, including any fines and penalties,
incurred by the other Parties in connection with such withdrawal.
10.2.5 No Encumbrances, Liens and Charges
A withdrawing Party shall not be allowed to withdraw from the Licence and this
Agreement if its interest is subject to any encumbrances, liens or charges unless the
other Parties are willing to accept the assignment subject to such additional encumbrances.
10.2.6 Liability for Approved Programme and Budget
Unless the Party or Parties acquiring its interest agree to accept the withdrawing Party's
liabilities and obligations, a withdrawing Party shall remain liable and obligated for its
Percentage Interest share of all expenditure accruing to the Joint Account under any
Programme and Budget approved by the Operating Committee prior to the date on
which notice of withdrawal is given even if the operations concerned are to be implemented
thereafter.
10.2.7 Liability for Abandonment
A withdrawing Party shall remain liable and obligated for its share of all net costs and
obligations that in any way relate to the abandonment of Joint Operations or a sole risk
project in which such withdrawing Party participated. Unless otherwise agreed, such
share shall be the proportion which the withdrawing Party's cumulative liftings of Hydrocarbons
up to the effective date of withdrawal bears to the aggregate cumulative liftings
of Hydrocarbons of all the Parties up to the occurrence of abandonment, and prior
to withdrawal such withdrawing Party shall provide the other Parties with such security
44

therefor as is acceptable to all such other Parties based upon the then best estimate of
aggregate cumulative liftings.
45

11. DEFAULT IN PAYMENT
11.1 Failure to Pay
If any Party ("Defaulting Party") fails to pay in full its share of any Advance by the due
date:
(a) the Operator shall as soon as reasonably practicable notify by facsimile all the
Parties of such default;
(b) with the exception of the Defaulting Party each Party ("Non-Defaulting Party")
shall contribute, as hereinafter provided, a share of the amount in default in the
proportion that its Percentage Interest bears to the total of the Percentage Interests
of the Non-Defaulting Parties and pending receipt of such additional contributions
the Operator shall use reasonable endeavours to make arrangements
to meet any commitments falling due either by borrowing the necessary finance
from outside sources or by making the necessary finance available itself
and all costs of any such finance shall be charged to the Non-Defaulting Party
and added to the amount in default and paid by the Non-Defaulting Parties, finance
made available by the Operator shall bear interest calculated on a
day-to-day basis at a rate equal to two per cent (2%) above the Costs of Funds
Rate in effect from time to time;
(c) within three (3) Working Days following the notification by the Operator under
(a) above, the Operator shall notify all the Parties of the liability of each of the
Non-Defaulting Parties to contribute to the amount in default and in addition
the cost of and interest on funds used or provided by the Operator under (b)
above, and shall request further advances on the expiry of the six (6) Working
Days specified in (d) below; and
(d) if such default continues for more than six (6) Working Days after the date of
notification by the Operator each of the Non-Defaulting Parties shall on the
Working Day next following such sixth (6th) Working Day pay the amount notified
under (c) above, and thereafter shall continue to pay, in addition to its
share of subsequent Advances, the same proportion of that part of all such subsequent
Advances attributable to the Defaulting Party and in addition the cost
of the interest on funds used or provided by the Operator under (b) above until
such time as the Defaulting Party has remedied its defaults in full or until forfeiture,
as hereinafter provided, and failure by any Party to make such payments
shall likewise and with the same results render that Party in default.
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11.2 Remedy of Default
The Defaulting Party shall have the right to remedy the default at any time prior to forfeiture,
as hereinafter provided, by payment in full to the Operator or, if the
Non-Defaulting Parties have paid any amounts under Section 11.1 (d), the
Non-Defaulting Parties, in proportion to the amounts so paid by them, of all amounts in
respect of which the Defaulting Party is in default together with interest thereon calculated
at the rate of five per cent (5%) above the Cost of Funds Rate from and including
the due date for payment of such amounts until the actual date of payment.
11.3 Continuation of Default
11.3.1 No Right to Hydrocarbons
If any default continues for more than six (6) Working Days after the date of notification
by the Operator under Section 11.1 (a) then, for so long as the default so continues,
the Defaulting Party shall not be entitled to its Percentage Interest of Hydrocarbons produced
thereafter which shall instead be owned by the Non-Defaulting Parties in the proportions
which their respective Percentage Interests bear to the total of the same.
11.3.2 No Right to Representation or Voting
During the continuation of any default the Defaulting Party shall not be entitled to be
represented at meetings of the Operating Committee or any sub-committee thereof nor
to vote thereat (so that the voting interest of each Party other than the Defaulting Party
shall be in the proportion which its Percentage Interest bears to the total of the Percentage
Interests of such Parties) and shall have no further access to any data and information
relating to the Joint Operations. The Defaulting Party shall be bound by decisions
of the Operating Committee made during the continuation of the default and shall be
solely responsible for the payment of all additional administrative costs and expenses
occasioned by such default.
11.3.3 Forfeiture
In the event that the default continues for more than sixty (60) days then each of the
Non-Defaulting Parties shall have the right to claim forfeiture and to acquire, by notice
to the other Parties given within thirty (30) days after such period of sixty (60) days, the
interest of the Defaulting Party in the Licence and in and under this Agreement ("Defaulted
Interest") or, if more than one (1) Non-Defaulting Party exercises such right, its
proportionate share of the interest of the Defaulting Party in the Licence and in and under
this Agreement, such share being the proportion in which its Percentage Interest
bears to the total Percentage Interests of such Non-Defaulting Parties. If none of the
Non-Defaulting Parties exercises such right, then, without prejudice to any rights of the
Non-Defaulting Parties, the Parties shall unless all the Non-Defaulting Parties agree in-
47

ternally and with the Defaulting Party to continue to fund the Defaulting Party’s share
be deemed to have decided to abandon the Joint Operations and each Party, including
the Defaulting Party, shall in addition to each Party's unpaid share of costs and expenses
in connection with the Joint Operations, pay its Percentage Interest share of the costs of
abandoning the Joint Operations. If in such case any Party is unable to pay its Percentage
Interest share, the other Parties shall indemnify each other proportionally. It is provided,
however, that no abandonment shall be allowed under this provision if the default
occurs before satisfaction of the Work Obligations. In these circumstances all Non-
Defaulting Parties shall be required to take up their proportionate share of the Defaulted
Interest, and each Party including the Defaulting Party shall pay its Percentage Interest
share of the cost of the Work Obligations. In the event that any Non-Defaulting Party
takes up a share of the Defaulted Interest greater than the proportion in respect of which
it has been paying Advances in respect of the Defaulted Interest, it shall forthwith after
electing to or becoming bound to acquire the Defaulted Interest pay to the Joint Account
for the credit of the appropriate Party or Parties who have paid Advances in respect of
the Defaulted Interest such amounts as appropriate so that all such Non-Defaulting Parties
will have borne the Advances in respect of the amount in default, and interest as
provided in Section 11.1 (b), in proportion to the respective shares in which they receive
the Defaulted Interest. Further, in event the Non-Defaulting Parties take up the Defaulted
Interest in proportions other than the proportions in which during the period of
default they lifted Hydrocarbons which but for the default would have been lifted by the
Defaulting Party, fair and equitable adjustment shall be made between the Parties so
that all such Non-Defaulting Parties receive Petroleum or its value in the same proportions
as they receive the Defaulted Interest.
11.3.4 Acquisition
Any forfeiture and acquisition of the interest of the Defaulting Party in the Licence and
in and under this Agreement shall be:
(a) subject to any necessary consent of the Danish Energy Agency;
(b) without prejudice to any other rights of each Party other than the Defaulting
Party;
(c) so forfeited and acquired free of any charges and encumbrances;
(d) effective as of the date of default; and
(e) subject to the Defaulting Party remaining liable and obligated for its share of
all net costs and obligations that in any way relate to the abandonment of Joint
Operations or a sole risk project in which the Defaulting Party participated.
Said share shall be determined in the manner set forth in Section 10.2.7;
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and the Defaulting Party shall promptly join in such actions as may be necessary or desirable
to obtain any necessary consent of the Danish Energy Agency and shall execute
and deliver any and all documents necessary to effect any such forfeiture and acquisition.
11.3.5 The obligations of the Defaulting Party and the rights of the Non-Defaulting Parties
shall survise the surrender of the Licence, abandonment of Joint Operations and termination
of this Agreement.
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12. MISCELLANEOUS
12.1 Covenant
Without prejudice to the responsibilities of the Operator under Section 3.3, each Party
hereby covenants with each other Party that it will comply with all the applicable provisions
and requirements of the Licence and will do all such acts and things within its
control as may be necessary to keep and maintain the Licence in force and effect.
12.2 Relationship
12.2.1 Relationship under the Agreement
It is expressly agreed that it is not the purpose or intention of this Agreement to create,
nor shall the same be construed as creating, any partnership.
12.2.2 Third Party Claims
Subject to Sections 3.3.3 and 3.13.2 the Operator may charge to the Joint Account any
amounts paid in settlement of claims from third parties which has resulted from the
Joint Operations including costs, expenses and damages as specified in Section 3.1 of
the Accounting Procedure. Any other Party, having observed the provisions in Section
3.13.3, which has been made to pay any such amounts to a third party shall immediately
notify the other Parties and furnish the Operator with all information necessary to determine
whether the amounts paid including costs, expenses and damages are chargeable
to the Joint Account.
12.2.3 Reimbursement of the Operator
When reimbursement is claimed according to Section 12.2.2 second sentence the Operator
shall submit an AFE and/or a revised Budget to the Parties for approval by the Operating
Committee, and when the same is approved the Operator shall follow the procedures
laid down in this Agreement and the Accounting Procedure to effect reimbursement.
12.2.4 Interest
Any amount reimbursed according to Section 12.2.2 shall bear interest from the day
said amount was paid by the Party being reimbursed for said amount and to the day of
reimbursement which interest is to be calculated on a day-to-day basis at a rate equal to
two per cent (2%) above the Cost of Funds Rate in effect from time to time.
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12.2.5 Mutual Indemnification
Without prejudice to the other provisions of this Agreement, each Party hereby undertakes
to indemnify each other Party for such indemnifying Party's Percentage Interest
share of any claim by or liability to (including any costs and expenses necessarily incurred
in respect of such claim or liability) any person not being a Party hereto arising
from or in connection with the Joint Operations. If any Party is unable to pay its Percentage
Interest share, said share shall subject to and in accordance with Article 11
hereof be paid proportionally by the other Parties.
12.3 Confidentiality
12.3.1 Main Rule and Exceptions
All data and information acquired or received by any Party under this Agreement shall
be held confidential during the continuance of this Agreement and for a period of five
(5) Years thereafter and shall not be divulged in any way to any third party, without the
prior written approval of all the Parties, provided that any Party may, without such approval,
disclose such data and information:
(a) to any Affiliate upon obtaining a similar undertaking of confidentiality from
such Affiliate;
(b) to any outside professional consultants, upon obtaining a similar undertaking of
confidentiality from such consultants;
(c) to any bank, insurance company or financial institution from which the Party is
seeking to obtain financing or insurance company, provided that before disclosing
such information such Party shall obtain a similar undertaking of confidentiality
from such bank, insurance company or financial institution;
(d) to the extent required by the Licence or any other applicable law or the regulations
of any recognised stock exchange, in which a Party or any of its Affiliates
are listed or ordered by a court or authority of applicable jurisdiction provided
that the Party so ordered endeavours to give prior notice to the other Parties;
(e) to the extent that the same has become generally available to the public, otherwise
than through a breach of this Section 12.3 by Party, any of its Affiliates or
any employee, officer or agent of such Party or its Affiliates; or
(f) to a bona fide potential assignee or employees or agents of such assignee upon
obtaining an undertaking of confidentiality corresponding to that of the Parties.
In the event of any Party ceasing to hold a Percentage Interest, such Party shall nevertheless
remain bound by Section 12.3.
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The Operator may disclose such data and information to such persons as may be necessary
in connection with the conduct of the Joint Operations upon obtaining a similar undertaking
of confidentiality from such persons provided that the Operator shall promptly
inform the other Parties of the names of such persons and the data and information disclosed
to them.
12.3.2 Exchange of Data and Information
The Operator may, with approval of the Operating Committee and on such terms and
conditions as the Operating Committee may determine, exchange any such data and information
for other similar data and information and the Operator shall promptly provide
all the Parties with a copy of the agreement relating to such exchange together with
the data and information acquired.
12.4 Public Announcements
The Operator shall be responsible for the preparation and release of all public announcements
and statements regarding the Joint Operations, provided that:
(a) no such public announcement or statement shall be issued or made unless prior
thereto all of the Parties have been furnished with a copy thereof with a period
of consideration of at least 2 Working Days and the approval of the Operating
Committee has been obtained; and
(b) a Party can itself make a public announcement or statement regarding the Joint
Operations if prior thereto it furnishes all the other Parties with a copy of such
announcement or statement and obtains the consent of all the other Parties,
which consent shall not be unreasonably withheld or delayed; and
(c) notwithstanding the above, the Operator shall be entitled to issue routine announcements
concerning the Joint Operations without the prior written approval
of the Operating Committee. Copy of written announcements shall be
forwarded to the Parties by the Operator simultaneously.
Where a public announcement or statement becomes necessary or desirable because of
danger to or loss of life, damage to property or of pollution arising under this Agreement,
the Operator shall be authorised to issue and make such announcement or statement
without prior approval of the Operating Committee if prompt contact with the
other Parties has not proved possible, but shall promptly furnish all the Parties with a
copy thereof. Notwithstanding the foregoing, but subject to Section 12.3, each Party
shall be entitled to include information of a general character concerning the Joint Operations
in communications to which the public will have access.
52

12.5 Force Majeure
The obligations of each of the Parties hereunder, other than the obligations to make
payments of money, shall be suspended during the period and to the extent that such
Party is prevented or hindered in whole or in part from complying therewith by "Force
Majeure" (as hereinafter defined). In such event, such Party shall give notice of suspension
as soon as reasonably possible to the other Parties stating the date and extent of
such suspension and the cause thereof. Any of the Parties whose obligations have been
suspended as aforesaid shall resume the performance of such obligations as soon as reasonably
possible after the removal of the cause and shall so notify all the other Parties.
In this Section 12.5, "Force Majeure" means any circumstance which could not reasonably
be foreseen and reasonably overcome and is beyond the reasonable control of
such Party including (in so far as beyond such control but without prejudice to the generality
of the foregoing expression) strikes, lock-outs and labour disputes, but such
Party shall not be obliged to settle any labour dispute except in such manner as it shall
in its sole judgement consider fit, and in compliance with any law or governmental order,
rule, regulation or direction, if (and only if) the same is issued by governmental
agencies or bodies in Denmark or by the European Union or by any other organisation
with authority within Denmark. A lack of funds shall not constitute "Force Majeure".
12.6 Arbitration
Any dispute between the Parties arising out of or in connection with this Agreement
shall be finally settled by a board of arbitration consisting of an umpire and two other
arbitrators. The board of arbitration shall be appointed at the request of any one of the
Parties to the dispute. When such request has been made, the Party or Parties which are
complainants to the case shall nominate a single arbitrator, and the Party or Parties
which are defendants to the case shall nominate a single arbitrator, such nominations to
be made within thirty (30) days of receipt of the notice referring the dispute to arbitration.
The two arbitrators thus nominated shall, within thirty (30) days, unanimously
nominate the umpire, who shall be the chairman of the board of arbitration. If an agreement
on such nomination cannot be arrived at either Party may request the President of
the Supreme Court of Denmark to nominate the umpire. The President of the Supreme
Court of Denmark may also be requested to appoint one of the other arbitrators in case
either the complaining or the defending Party or Parties fail to do so within the time
limit prescribed. The board of arbitration shall have its seat in Copenhagen, unless otherwise
agreed between the Parties to the case. The board of arbitration shall make its
decisions on the basis of Danish law. In the event that a majority of the board of arbitration
cannot agree on a result, the umpire shall have the deciding vote. Any awards made
by the board of arbitration shall be final and binding upon the Parties to the case and
shall be enforceable without the necessity of any judgement being rendered thereupon.
53

Subject to the provisions hereof, the arbitration shall be conducted according to the
rules of Danish law, including the Danish Act on Arbitration (Act. No. 553 af 24th June
2005), and to the extent specified in said rules, the Danish courts shall have jurisdiction
according to Section 12.7. The language of the arbitration shall be English and all
documents shall be remitted to the arbitration in their original form together with an
English translation unless the parties to the dispute agree that the language shall be Danish.
12.7 Applicable Law and Jurisdiction
12.8 Notices
This Agreement shall be governed by and construed in accordance with Danish law and
subject to Section 12.6 each of the Parties hereby submits to the jurisdiction of the
courts of Denmark.
Unless otherwise expressly provided herein, all notices under this Agreement shall be in
writing and may be given by delivering the same by hand, or by sending the same by
recorded delivery post, telex (if any) or facsimile transmission to the attention of the
representative of the Operating Committee of each Party at the latest address and
telex/facsimile number provided by such representative. Any such notice given as
aforesaid shall, in the case of notice given by hand, by recorded delivery post or by
telex, be deemed to have been given at the time of delivery by hand, by recorded post or
at the time of transmission of the telex provided that in the latter case the transmission is
evidenced by the receipt by the transmitting Party of the correct automatic answerback
of the receiving Party and in case of notice given by facsimile transmission, be deemed
to have been given or received on the first Working Day next following the day of receipt.
Notices may be sent in the Danish or English language.
12.9 Danish Government
This Agreement and any amendments, exceptions or additions hereto shall be subject to
the approval of the Danish Energy Agency. The Danish Energy Agency shall receive
one of the original executed copies of this Agreement. This Agreement shall in no way
limit the authority of the Danish Government or any part thereof to exercise its authority
according to the law and the prevailing rules and regulations and which are at any time
in force for activities covered by this Agreement.
54

13. DEFINITIONS AND INTERPRETATIONS
13.1 Definitions
In this Agreement:
(a) "Accounting Procedure" means the procedure set out in Appendix A hereto;
(b) "Advance" means a payment of cash required to be made to the Operator pursuant
to this Agreement;
(c) "AFE" means authority for expenditure;
(d) "Affiliate" means in relation to any Party any company which is a Subsidiary
of such Party or a company of which such Party is a Subsidiary or a company
which is another Subsidiary of a company of which such Party is a Subsidiary;
(e) "Budget" means any Budget in respect of a Programme;
(f) "Cost of Funds Rate" means for Kroner a rate equal to one (1) month CIBOR
(Copenhagen Interbank Offered Rate) as quoted by Danmarks Nationalbank
(the central bank of Denmark) and for currencies other than Kroner a rate equal
to one-month LIBOR (London Interbank Offered Rate) as quoted in the Financial
Times for the relevant currency on the first day of the relevant period.
(g) "Discovery" means any discovery of Hydrocarbons as referred to in Section 4,
Subsection 2 of the Licence;
(h)
(i) "Hydrocarbons" means hydrocarbons in the liquid, gaseous or solid state,
found in a natural condition in the subsoil;
(j) "Joint Account" means the account established and maintained by the Operator
to record all Advances, expenditures and receipts in the conduct of Joint Operations;
(k) "Joint Operations" means all Joint Operations of the Parties conducted in accordance
with this Agreement;
(l) "Joint Hydrocarbons" means all Hydrocarbons won and saved under the Joint
Operations;
(m) "Joint Property" means all property acquired or held for use in connection with
the Joint Operations;
(n) "Kroner" or "DKK" means Danish Kroner;
(o) "Licence" means Licence No.____ for Exploration for and Production of Hydrocarbons
issued by the Minister for Transport and Energy and shall include
55

any other Licence issued to the Parties in substitution or partial substitution
therefore;
(p) "Licence Area" means the area at any time covered by the Licence;
(q) "Managerial or Supervisory Personnel" means a party's designated managers or
supervisors who are responsible for on site drilling, construction or production
and related operations, or any other field operations, any employees of such
party who function at a management level equivalent or superior to the foregoing,
and the officers and directors of such party.
(r) "Material" means equipment or supplies;
(s) "Month" means a calendar month;
(t) "Non-Operator" means a Party other than the Operator;
(u) "Operating Committee" means the committee established pursuant to Section
4.1;
(v) "Operator" means the Party at any time designated as such under Article 3, acting
in that capacity and not as the owner of a Percentage Interest;
(w) "Original State Participation Share" means Nordsøfonden's original Percentage
Interest at the time this Agreement was signed.
(x) "Parties" means the Parties to this Agreement and their respective successors
and assigns;
(y) "Percentage Interest" means for each of the Parties the undivided Percentage
Interest held at any time by it pursuant to this Agreement and the Licence or,
where the context so requires, in any sole risk development, and includes its
corresponding entitlement to Hydrocarbons won and saved under the Licence;
(z) "Programme" means any Programme of operations;
(aa) "Quarter" means a period of three (3) Months ending March 31st, June 30th,
September 30th or December 31st in any Year;
(bb) "Sub-Area" means at any given time, any part of the Licence Area, being delimited
by surface area but applying only to that interpreted closure of any geological
structure or stratigraphic trap in which the relevant reservoir or reservoirs
exists, which is subject to development by less than all Parties and in
which the entire Percentage Interest therein is owned by those of the Parties
carrying out the development;
(cc) "Subsidiary" means in relation to a company any other company more than
fifty per cent (50%) of whose stock is owned, directly or indirectly, by such
first company;
56

(dd) "Subsoil Act" means the Consolidated Act No. 889 of 4 July 2007 on the use of
the Danish Subsoil, as amended by Act No. 1400 of 27 December 2008.
(ee) "USD" or "USD" means USD of the United States of America;
(ff) "Working Day" means a day upon which the banks are open for business in
Denmark excluding Saturdays and Sundays;
(gg) "Work Obligations" means the work program which the Parties are obligated to
carry out according to Subsection (1) of Section 4 and Annex 2 of the Licence;
and
(hh) "Year" means when spelled with a capital "Y" a calendar year beginning on
January 1st., while year spelled with a small "y" means a year beginning on
any date.
13.2 Interpretations
In this Agreement:
(a) reference to any statute, statutory provision or statutory instrument includes a
reference to that statute, statutory provision or statutory instrument as from
time to time amended, extended or re-enacted;
(b) reference to the singular includes a reference to plural and vice versa;
(c) reference to any gender includes a reference to all other genders;
(d) unless the context otherwise requires, reference to any Section or Article is to a
Section or Article of this Agreement; and
(e) the headings herein are used for convenience only and shall not affect the construction
or validity of this Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorised representatives as of the day and year first above written.
By ______________________________
_________________________________
57

By ______________________________
_________________________________
By ______________________________
_________________________________
By _______________________________
Nordsøfonden
58

DRAFT MODEL
February 2009
LICENCE X/XX
Xxxx Group
JOINT OPERATING AGREEMENT
APPENDIX A
ACCOUNTING PROCEDURE

Licence ……. - Accounting Procedure
INDEX
ARTICLE I: PREFACE AND GENERAL PROVISIONS
1.1 Preface
1.2 Reporting to Authorities
1.3 Change of Accounting Procedure
1.4 Currency
1.5 Definitions
1.6 Disagreements
1.7 Monetary Limits
1.8 Sole Risk
1.9 Separate Accounting
1.10 Adjustments
ARTICLE II: BUDGETS AND FORECASTS
2.1 Exploration and Appraisal Budgets
2.2 Development and Production Budgets
2.3 Budget Approval and Amendment
2.3.1 Capital Budgets
2.3.2 Administrative and Operating Expense
ARTICLE III: JOINT ACCOUNT
3.1 Charges
3.1.1 Licence Fees
3.1.2 Damages and Losses
3.1.3 Offices and Field Expenses
3.1.4 Insurance and Third Party Claims
3.1.5 Legal Costs
3.1.6 Material
3.1.7 Number not used
3.1.8 Personnel
3.1.9 Services
3.1.10 Taxes
3.1.11 Transportation
3.1.12 Sole Risk
3.1.13 Other Expenditures
3.2 Credits
3.2.1 Disposals
3.2.2 Interests and Miscellaneous
3.2.3 Material and Property
3.2.4 Sole Risk
3.2.5 Insurance
3.2.6 Claims
3.2.7 Other
ARTICLE IV: BOOKS AND RECORDS
4.1 Accounting Records
4.1.1 Accounting Codes
4.1.2 Joint Account
4.1.3 Access
4.1.4 Investment Records
i - A
1
1
1
1
1
1
2
2
2
2
2
3
3
3
4
4
4
5
5
5
5
5
5
5
5
6
6
7
7
7
7
7
8
8
8
8
8
8
8
8
9
9
9
9
9
9

Licence ……. - Accounting Procedure
4.1.5 Presence in Denmark
4.1.6 AFE Reference
4.2 Bank Accounts
4.3 Material Classification
4.4 Other Property
4.5 Warehouse
4.5.1 Markings
4.5.2 Records
4.5.3 Major Material Handling Charges
4.5.4 Minor Material Handling Charges
4.5.5 Forwarding
ARTICLE V: MATERIAL
5.1 Disposals
5.1.1 Surplus Materials
5.1.2 Notification to Non-Operators
5.1.3 Bidding
5.1.4 Disposal
5.1.5 Donations
5.1.6 Limitation of Disposals
5.1.7 Condition "D" Material
5.2 Evaluation
5.3 Purchases
5.3.1 Warranty
5.3.2 Charges to Joint Account
5.4 Sales and Loans
ARTICLE VI: CASH CALL, BILLING AND REPORTING REQUIREMENTS
6.1 Cash Calls and Advances
6.1.1 Cash Call
6.1.2 Specification
6.1.3 Currency
6.1.4 Payments
6.1.5 Limitations
6.1.6 Interest
6.1.7 Forecast
6.2 Billing Statement and Schedules
6.2.1 Monthly Billing Statement
6.2.2 Classifications
6.2.3 Currency
6.3 Monthly Cash Reconciliation
6.4 Cost Control Report
6.4.1 Capital Expenditures
6.4.2 Administrative and Operating Expenditures
6.5 Inventories
6.5.1 Inventories
6.5.2 Notice
6.5.3 Surpluses, Shortages and Adjustments
6.5.4 Special Inventories
6.6 Production Report
ARTICLE VII: CONTROL PROCEDURES
ii - A
9
9
9
9
10
10
10
10
10
10
10
11
11
11
11
11
11
11
11
11
11
12
12
12
12
13
13
13
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13
13
13
13
14
14
14
14
14
14
14
14
15
15
15
15
15
15
15
16

Licence ……. - Accounting Procedure
7.1 Audits
7.1.1 Access
7.1.2 Notice
7.1.3 Costs
7.1.4 Report
7.1.5 Adjustments
7.1.6 Disagreements
7.1.7 Time Limits
7.1.8 Proprietary and Confidential Information
7.1.9 Third Party Contract
7.2 AFEs
7.2.1 Request for AFE
7.2.2 Information
7.2.3 Approval
7.2.4 Deemed Approval (not applicable during the pre-drilling phase)
7.2.5 Authority for the Operator
7.3 Cost Control
iii - A
16
16
16
16
16
16
16
16
16
17
17
17
17
17
17
18
18

Licence ….. - Accounting Procedure
ACCOUNTING PROCEDURE
ARTICLE I: PREFACE AND GENERAL PROVISIONS
1.1 Preface
1 - A
The purpose of this Accounting Procedure is to establish accounting principles and
procedures, which will aid the proper and efficient carrying out of the Joint Operations and
will result in the true cost of the Joint Operations being reflected in the Joint Account. It is the
intent and understanding of the Parties that the Operator shall, subject to the provisions of the
Agreement, neither gain nor lose by reason of the fact that he acts as the Operator. Each of
the Parties shall provide funds sufficient to cover all costs of the Joint Operations, such funds
to be provided to the Operator by each Party in proportion to its Percentage Interest at the
time of the incurrence of the costs.
1.2 Reporting to Authorities
The Operator shall at all times ensure that all accounting data and other information relating
to the Joint Operations is available in such a form as to facilitate all required reporting to
governmental authorities, both for the Operator and for the Non-Operators. Each Party shall
receive a copy of all reports and information relating to the Joint Operations, which are
forwarded to governmental authorities by the Operator.
1.3 Change of Accounting Procedure
If one (1) of the Parties is of the opinion that a change in the Accounting Procedure is
desirable to rectify an inequity, or for other reasons, it may forward a proposal for
amendment of the Accounting Procedure to the Operator who will arrange for the matter to
be discussed at an Operating Committee meeting, or at a meeting of an appropriate sub-committee.
The Accounting Procedure may be amended with the agreement of all the Parties,
subject to the approval of the Danish Energy Agency.
1.4 Currency
The Joint Account shall be maintained in Kroner. However, all Budgets, forecasts and reports
will also present the main figures thereof in Dollars or the currency normally used by the
Operator, provided the Operating Committee so approves. Translation of foreign currency
transactions into Kroner shall be based on the rates published by the Danish National Bank
and procedures approved by the Operating Committee.
1.5 Definitions
In addition to the definitions in the Agreement, the following shall apply in this Accounting
Procedure:
(a) "Agreement" means the Joint Operating Agreement of which this Accounting
Procedure forms part;

Licence ….. - Accounting Procedure
(b) "Cash Call" means a request for payment of cash by the Operator to the Parties;
2 - A
(c) "Controllable Material" means the Material, which in the petroleum industry
usually is subject to record, control and inventory;
(d) "Accounting Committee" means an accounting sub-committee established by the
Operating Committee pursuant to the Agreement;
(e) "Accruals" means recording of charges and credits for work performed but not
booked at the end of the accounting period, regardless of whether invoices or
credits have been received.
1.6 Disagreements
In the event of a conflict between the Parties with respect to this Accounting Procedure, the
Accounting Committee, if any, or the Operating Committee shall meet and in good faith
attempt to settle the conflict with the intent that no Party shall gain or lose at the expense of
the other Parties.
1.7 Monetary Limits
It is the intent that the monetary limits set forth in various sections of the Accounting
Procedure shall be reviewed and adjusted from time to time by agreement of all the Parties in
order to be in accordance with changes in prices and operating conditions.
1.8 Sole Risk
In the event that one (1) or more of the Parties engages in sole risk operations, then, to the
extent appropriate, the Accounting Procedure will apply to such sole risk operations but
separate accounts, books, bank accounts and other records shall be established and
maintained for such sole risk operations in such a manner that the statements and billing
relating to the Joint Account do not reflect the sole risk operations.
1.9 Separate Accounting
If it becomes appropriate to segregate Joint Account matters, whether for the purpose of
"ring-fence" tax treatment or otherwise, the Operator will maintain books and records and act
otherwise with respect to the Joint Operations in order to facilitate such segregation. If requests
from other Parties for special records should cause a significant additional workload
and/or costs, such costs should be borne by the requesting Party(ies).
1.10 Adjustments
All billing and statements presented by the Operator to the other Parties shall be presumed to
be true and correct until shown otherwise, and shall be paid as presented except for obvious
errors. Such payment shall not prejudice the right of any Non-Operator to question the
charges or credits accruing to the Joint Account, and the Operator shall take immediate steps
to clarify, explain and adjust any queried charges or credits. Requests for corrections shall be
made within the time limit specified in Section 7.1.7.

Licence ….. - Accounting Procedure
ARTICLE II: BUDGETS AND FORECASTS
2.1 Exploration and Appraisal Budgets
3 - A
Each exploration and appraisal Budget prepared under the Agreement shall contain
commitments and expenditures in accordance with normal practice in the petroleum industry
and shall include;
(a) an estimate of the total cost of the relevant Programme in Kroner and a
sub-division of such total into each main classification of cost and with a reference
to assumptions regarding exchange rates, inflation etc.;
(b) an estimate by Year of the amount of each currency in which such total cost is to
be paid, except for the first Budget Year, which will be stated separately for each
Quarter of such Year;
(c) a schedule of estimated Joint Account warehouse stock movement;
(d) an estimate of the manpower requirements to carry out the relevant Programme;
(e) an estimate of the timing and value of the commitments by Quarter (being
contracts or other orders placed or goods purchased) to be made under the
Budget, identifying main components separately; and
(f) such other estimates relating to expenditures to be made during the three (3) Years
after the period covered by such Budget, as shall be requested by any Party; and
2.2 Development and Production Budgets
Each development and production Budget prepared under the Operating Agreement shall
contain commitments and expenditures in accordance with normal practice in the petroleum
industry and shall include;
(a) an estimate of the total cost of the relevant Programme and operations in Kroner
and a sub-division of such total into each main classification of cost and with a
reference to assumptions regarding exchange rates, inflation etc.;
(b) an estimate by Year of the amount of each currency in which such total cost is to
be paid, except for the first coming Budget Year, which will be stated separately
for each Quarter of such Year;
(c) a schedule of estimated Joint Account warehouse stock movement;
(d) an estimate of the manpower requirements to carry out the relevant Programme;
(e) an estimate by Year of the timing and value of the commitments to carry out the
Programme for each main classification of cost; and
(f) an estimate of annual operating costs for the first five (5) Years of production.

Licence ….. - Accounting Procedure
4 - A
(g) contingencies for unknown price, scope or volume deviations in a development
Budget shall appear as separate budget items.
2.3 Budget Approval and Amendment
2.3.1 Capital Budgets
Approval of capital Budgets does not permit the Operator to enter into any commitments or
incur any expenditures for any item included in said Budgets until an AFE is approved by the
Operating Committee as provided in the Agreement and Section 7.2.4. herein.
2.3.2 Administrative and Operating Expense
Approval of administrative and operating expense Budgets permits the Operator without
prior approval of the Parties to issue AFE's covering the full Year and to record such
expenditures in the Joint Account, except for major exceptional operating expenditures (e.g.
workover of wells) that shall require a separate approved AFE as stated in Section 2.3.1.
above.

Licence ….. - Accounting Procedure
ARTICLE III: JOINT ACCOUNT
3.1 Charges
5 - A
Subject to the limitations hereinafter set forth, and to the other relevant provisions of the
Agreement, the Operator shall, with proper documentation, charge the Joint Account with
the following items of expenditure in so far as the expenditure has been duly authorized and
relates to and is necessary for the conduct of the Joint Operations:
3.1.1 Licence Fees
Licence fees paid by the Operator on behalf of the Parties in connection with the Joint
Operations.
3.1.2 Damages and Losses
All expenses incurred for the repair or replacement of damaged or lost Joint Property,
provided that all insurance coverage shall be appropriately credited. The Operator shall
separately and without delay inform the Non-Operators in writing of any incident involving
expenses estimated to be in excess of two hundred and fifty thousand Kroner (DKK
250,000), with documentation as may be reasonably requested. Incidents involving smaller
amounts shall be reported on a monthly basis.
3.1.3 Offices and Field Expenses
The net cost of establishing and operating offices, field offices, warehouses, shore bases and
other facilities used for the Joint Operations. If any such facilities serve more than the Joint
Operations, the costs shall be allocated in an equitable manner as approved by the Operating
Committee in the Budget. However, during the exploration and appraisal period, office
expenses may, with the agreement of all Parties, be charged to the Joint Account at a fixed
rate as approved by the Operating Committee in the Budget.
3.1.4 Insurance and Third Party Claims
Premiums paid for insurance coverage obtained in accordance with the Operating Agreement,
and expenditures incurred in settlement of claims from third parties.
3.1.5 Legal Costs
All legal costs and expenses arising from the handling of claims and disputes in connection
with the Joint Operations except those arising in connection with disputes among the Parties.
All such costs and expenses shall be subject to the provisions contained in Sections 3.13.2 and
3.13.3 of the Agreement.
3.1.6 Material
(a) Material purchased by the Operator from third parties for use in the Joint
Operations shall be charged to the Joint Account at cost after deducting all trade
and discounts received. Transport costs and handling, insurance, duties and other
related costs are also chargeable to the Joint Account.
(b) Material transferred from the Operator or its Affiliates for use in the Joint
Operations shall be charged to the Joint Account at a value determined as follows:
New Material - Condition "A"

Licence ….. - Accounting Procedure
6 - A
Material, which has not been used and is in a new condition shall be classified as
Condition "A" and charged to the Joint Account at cost to the Operator, but not
exceeding the current market value.
Used Material - Condition "B"
Material which has been used, but is in sound and serviceable condition and
suitable to be reused without repair, shall be classified as Condition "B" and
charged to the Joint Account at seventy-five per cent (75%) of what its value
would be if it were in Condition "A".
Used Material - Condition "C"
Material, which is suitable for use after reconditioning, shall be classified as
Condition "C" and charged to the Joint Account at fifty per cent (50%) or less of
what its value would be if it were in Condition "A". After reconditioning the
Material will not exceed the Condition "B" value.
Material - Condition "D"
Material, which is obsolete or not usable for its original purpose, shall be priced at
a value commensurate with its use.
(c) Accumulation of surplus stocks of Material shall be avoided.
(d) Material, which will be used partially or on a temporary basis, may be charged to
the Joint Account on terms and conditions to be agreed by the Operating
Committee. Such charges shall never exceed market rates available through third
parties for comparable Material.
(e) The Operator shall promptly credit the Joint Account for Material returned to the
Operator or with any adjustments received from a supplier or manufacturer.
(f) The Operator shall be entitled to make a reasonable charge to cover financing and
storage cost of drawing Material from the Operator's stock.
The basis for such charge shall be reviewed annually and be subject to the prior
approval of the Operating Committee.
3.1.7 Number not used
3.1.8 Personnel
All costs for the Operator's personnel shall be computed and charged to the Joint Account on
an equitable basis, primarily taking into consideration the percentage of the total cost of each
such employee to the Operator that is equivalent to the percentage of such employee's entire
working time, which is spent on the Joint Operations. For the avoidance of doubt, the total
cost of such employees to the Operator shall take into consideration allowances and benefits,
retirement benefits, relocation expenses and similar costs. The cost of personnel of other
Parties or third parties who are working under the direct control of the Operator shall be
charged to the Joint Account. Any travel and relocation expenses incurred by such personnel

Licence ….. - Accounting Procedure
7 - A
and required for the conduct of the Joint Operations shall also be charged to the Joint
Account.
If agreed by all Parties, the Operator may propose a fixed hourly rate to be charged for
personnel of different categories (e.g. professional staff and supporting staff, etc.). The
rates shall be based on the above principles and the rates shall be presented and approved
in connection with the annual budget.
3.1.9 Services
The cost of consultants and other services and facilities provided by third parties (including
Non-Operators) for the Joint Operations, unless otherwise chargeable under this Accounting
Procedure.
The costs of services and facilities provided by the Operator or its Affiliates shall be charged
to the Joint Account on an equitable basis, provided that such charges shall not exceed the
rates for comparable services available to the Joint Operations from third parties and that the
prior approval of the Operating Committee is necessary if the Operator or its Affiliates wish
to provide services or facilities the charges of which will individually exceed two hundred and
fifty thousand Kroner (DKK 250,000).
3.1.10 Taxes
All taxes, duties and other governmental levies, which have been incurred and paid by the
Operator on behalf of the Joint Operations, shall be charged to the Joint Account. For the
avoidance of doubt, royalties and direct taxes imposed on the Parties are not chargeable to
the Joint Account.
3.1.11 Transportation
(a) Travel and relocation expenses, when these are required for the conduct of the
Joint Operation. All charges to the Joint Account shall be in accordance with the
Operator's normal practice, and include expenses for families and households,
when appropriate. Relocation expenses at the termination of work for the Joint
Operation will be based on a return to the home of record, except if the employee
is relocated for the benefit of another operation, in which case the costs shall not be
charged to the Joint Account.
(b) All costs to transport and handle Material for use in the Joint Operations, unless
otherwise chargeable under this Accounting Procedure.
3.1.12 Sole Risk
No expenditures in connection with sole risk operations shall be charged to the Joint Account
without the prior approval of all the Parties.
3.1.13 Other Expenditures
Any other expenditures not covered by the expenditures otherwise described in this
Accounting Procedure which the Operator in accordance with the Agreement incurs and
which are necessary and proper for the Joint Operations.

Licence ….. - Accounting Procedure
3.2 Credits
The Operator shall credit to the Joint Account the following:
3.2.1 Disposals
Any amounts received from the disposal of Material or other Joint Property.
8 - A
3.2.2 Interests and Miscellaneous
Any amounts received as interest or otherwise with respect to the Joint Property or
accumulated in connection with the Joint Operations.
3.2.3 Material and Property
Any amounts received as a result of the return of Material or other property.
3.2.4 Sole Risk
Any amounts received from third parties or from Parties engaged in sole risk activities for
services or for use of Joint Property.
3.2.5 Insurance
Any amounts received pursuant to insurance claims made by the Operator in respect of
insurance carried for the benefit of all the Parties.
3.2.6 Claims
Any amounts received pursuant to claims made by the Operator on behalf of the Parties and
any other event giving rise to a receipt (including interest) by the Operator on behalf of the
Parties.
3.2.7 Other
Any other amounts of revenues or credits, which accrue in any manner in connection with the
Joint Operations.

Licence ….. - Accounting Procedure
ARTICLE IV: BOOKS AND RECORDS
4.1 Accounting Records
9 - A
4.1.1 Accounting Codes
The Operator shall, upon request, provide the Non-Operators with a copy of any accounting
codes it uses, or proposes to use, in connection with the Accounting Procedure.
4.1.2 Joint Account
The Joint Account shall be maintained to reflect the current status of the Joint Operations, to
the extent that all major amounts for work carried out, but not yet paid, shall be included and
identified in the accounts as Accruals in connection with month-end closings. At the end of
each Year all significant outstanding identifiable debits and credits shall be recorded as
Accruals.
4.1.3 Access
The Non-Operators shall with reasonable notice have free access to all books and records
containing charges and credits to the Joint Account, including the supporting detail.
4.1.4 Investment Records
The Operator shall maintain detailed records of the investments carried in the Joint Account
in such a manner as to enable an effective reconciliation of a physical inventory.
4.1.5 Presence in Denmark
All books and records, including the supporting detail or true copies thereof relating to the
Joint Account, shall be physically present in Denmark.
4.1.6 AFE Reference
Investments recorded in the Joint Account shall carry a reference number to the AFE(s) under
which the expenditure has been approved.
4.2 Bank Accounts
The Operator shall establish separate bank accounts in Kroner and other currencies in which
Cash Calls are made to cover transactions for the Joint Account. The Non-Operators shall be
notified of the banks, the account numbers and other relevant information. The bank accounts
shall at all times be kept at the lowest possible level consistent with an effective operation.
The Operator shall obtain the best available terms for interest, and interest earned shall
promptly be credited to the Joint Account or distributed.
4.3 Material Classification
The Operator shall use the Material Classification Manual recommended by the Council of
Petroleum Accountants Society of North America as the basic guideline for classification of
jointly owned Material, unless another listing is approved by the Operating Committee. The
Operator shall also include such other Material in the Controllable Material category as is
considered desirable for operational or financial control purposes.

Licence ….. - Accounting Procedure
4.4 Other Property
10 - A
Jointly owned property shall be marked in such a manner as to enable an effective
reconciliation of a physical inventory.
4.5 Warehouse
4.5.1 Markings
Materials shall be marked or stored in such manner as to enable an effective reconciliation of
a physical inventory.
4.5.2 Records
The Operator shall maintain detailed records of all Controllable Materials charged to and/or
stored in a warehouse for the Joint Operations. The records shall be segregated by category
and include all Materials which are physically present in the warehouse.
4.5.3 Major Material Handling Charges
Transportation costs, customs duties and other significant amounts shall be recorded as part
of the Material cost.
4.5.4 Minor Material Handling Charges
Local and minor transportation and handling charges for Material, which are chargeable to
the warehouse stock account, may be accumulated in a separate warehouse sub-account
containing handling and transportation costs from vendor to warehouse. When Materials are
issued from the warehouse stock to the Joint Operations, a proportionate share of the
sub-account shall be charged to the Joint Operations in addition to the cost of the item, the
basic principle being that when the warehouse stock has been exhausted, the balance in the
transportation sub-account will also be nil.
4.5.5 FORWARDING
Transportation and handling expenses from the warehouse to the operations - and return -
shall be charged directly to the operation involved.

Licence ….. - Accounting Procedure
ARTICLE V: MATERIAL
5.1 Disposals
11 - A
5.1.1 Surplus Materials
The Operator shall make timely disposal of idle and surplus Material charged to the Joint
Account.
5.1.2 Notification to Non-Operators
For all items which have an original value of two hundred and fifty thousand Kroner (DKK
250,000) or more, the Non-Operators shall be notified of the intended disposal, the original
purchase price, current book value and an estimate of the price which can be obtained by sale
to a third party.
5.1.3 Bidding
Within twenty (20) days of receiving such a notice, the Non-Operators shall inform the
Operator if they are interested in purchasing the item and at what price. Sales at prices below
the estimated obtainable price shall be approved by the Operating Committee.
5.1.4 Disposal
If no Parties are interested in making a purchase, the Operator may proceed with the disposal,
provided that all disposals of items having an original value in excess of two hundred and fifty
thousand Kroner (DKK 250,000) shall be approved by the Operating Committee.
5.1.5 Donations
Non-Operators shall be advised in advance of donations of all jointly owned Material.
Donations with a total value in excess of ten thousand Kroner (DKK 10,000) require
Operating Committee approval.
5.1.6 Limitation of Disposals
If disposal of Joint Property other than Material is required, the Operating Committee shall
decide the terms and conditions of such disposal for all items having an original value of two
hundred and fifty thousand Kroner (DKK 250,000) or more. Items with an original value
under two hundred and fifty thousand Kroner (DKK 250,000) may be disposed of with due
regard to the Parties' interests.
5.1.7 Condition "D" Material
Material classified as Condition "D" (as defined under Section 3.1.6.) may be disposed of as
needed.
5.2 Evaluation
The Operator shall annually review the condition of the jointly owned Material and determine
if a change in the value thereof is warranted. If so, the Operator shall make a proper charge to
the Joint Account reflecting the change and inform the Non-Operators of the action taken and
the reasons for the change in value. Write-offs in excess of two hundred and fifty thousand
Kroner (DKK 250,000) in total shall be approved by the Operating Committee.

Licence ….. - Accounting Procedure
5.3 Purchases
12 - A
5.3.1 Warranty
The Operator does not warrant the Material charged to the Joint Account beyond the
guarantees received from the supplier or manufacturer, but shall promptly credit the Joint
Account with any adjustment received by a supplier or manufacturer. Material transferred
from the Operator, Non-Operators or Affiliates which appears to be defective at the time it
was transferred shall either promptly be repaired for the account of the transferring Party or
returned for a full credit to the Joint Account.
5.3.2 Charges to Joint Account
Material purchased by the Operator shall be charged to the Joint Account as provided in
Section 3.1.6.
5.4 Sales and Loans
To the extent it can do so without any detrimental effect to the Joint Operations, the Operator
may sell, rent or lend jointly owned Material to third parties. The Operator shall inform the
Non-Operators and seek their prior approval if any financial or operational risk is involved, or
if the amount involved is in excess of two hundred and fifty thousand Kroner (DKK 250,-
000).

Licence ….. - Accounting Procedure
ARTICLE VI: CASH CALL, BILLING AND REPORTING REQUIREMENTS
13 - A
6.1 Cash Calls and Advances
During the pre-drilling phase, cash calls may be issued and paid on a Quarterly basis, if all
Parties so agree.
6.1.1 Cash Call
Not less than ten (10) days prior to the beginning of any Month in respect of which the
Operator requires funds, the Operator shall furnish the Parties with a Cash Call requesting an
Advance or Advances for such Month. The amount requested in a Cash Call shall be the
Operator's estimate of the amount required from the Parties to enable the Operator to defray
the net cash payments, being cash payments less cash receipts, due in the relevant Month
under obligations properly incurred by the Operator in connection with the Joint Operations.
6.1.2 Specification
Each Cash Call shall specify, in respect of each Advance, the amount of each currency
required by major AFE and/or Budget category as requested by the Operating Committee,
the bank account or accounts to which payment is to be made and the due date on which
payment is required. The due date or dates on which payment of an Advance or Advances is
or are required shall be the date or dates on which the Operator estimates that it will be
making a substantial amount of the net cash payments described herein. The amount
requested in each such Advance shall be the Operator's estimate of the net cash payments to
be made on each such date together with any smaller sums which it estimates will be payable
between the due date for payment of such Advance and the due date on which payment of the
next Advance has been or will be required. Such estimate shall be based on the latest
information available to the Operator at the time the Cash Call is made. If it becomes
necessary to change the amount or the due date of any Advance, the Operator shall provide at
least five (5) Working Days prior notice to the Parties.
6.1.3 Currency
Unless otherwise agreed by the Operating Committee, Cash Calls shall be made in Kroner or
in a currency other than Kroner, but only to the extent that the expenditures are contractually
required to be paid in such other currency.
6.1.4 Payments
Following a Cash Call, each Party shall pay to the Operator for the Joint Account a share of
each Advance in proportion to its Percentage Interest in sufficient time to be credited to the
bank account on the due date specified in the Cash Call. If any Party fails to pay in full its
share of any Advance by the due date, the default provisions of the Agreement shall apply.
6.1.5 Limitations
The Operator shall restrict the funds of the Parties held for the Joint Account to a level
consistent with that required for the current conduct of the Joint Operations in accordance
with Section 6.1.2. above.
6.1.6 Interest
Any interest from the joint bank accounts received by the Operator shall be credited to the
Joint Account each Month or promptly distributed.

Licence ….. - Accounting Procedure
14 - A
6.1.7 Forecast
Each Cash Call forwarded by the Operator shall be accompanied by a forecast pursuant to
which the Operator specifies the details of the anticipated Cash Calls for the two (2) Months
after the Month covered by the Cash Call.
6.2 Billing Statement and Schedules
During the pre-drilling phase Statements and Schedules may be issued on a Quarterly basis, if
all Parties so agree.
6.2.1 Monthly Billing Statement
The Operator shall send a report to the Parties within twenty-five (25) days following the end
of each Month on all payments made and all receipts obtained by the Operator in connection
with the Joint Operations during such Month, in sufficient detail to form the basis for the
annual tax return and other reports required by the Danish authorities.
6.2.2 Classifications
Such report shall be made on a billing statement which shall show the net total of all payments
(less all receipts) relating to the Joint Account and each Party's Percentage Interest share
thereof and shall be accompanied by billing schedules dividing such payments and receipts
into main classifications of expenditure indicative of the nature thereof and in accordance with
the approved Budgets. The billing schedules shall also show cumulative net totals of all
payments (less all receipts). In addition, any interest received and any unusual payments and
receipts shall be indicated separately.
6.2.3 Currency
All billing statements and schedules shall be in Kroner. All payments made and receipts
obtained in currencies other than Kroner and the rates used for their translation to Kroner
shall be identified in the billing schedules.
6.3 Monthly Cash Reconciliation
As at the end of each Month in which the Operator has received funds, the Operator shall
make a separate reconciliation for each currency between:
(a) the cumulative total of Advances received by the Operator from the Parties in such
currency, and
(b) the cumulative total of cash payments, net of cash receipts other than interest,
made in such currency by the Operator as reflected in the billing statement for such
Month.
6.4 Cost Control Report
6.4.1 Capital Expenditures
The Operator shall, within twenty-five (25) days following the end of each Month, prepare
and forward to the Non-Operators a report (status of open AFEs) showing a comparison
between the approved AFE amount, the cost to date and the estimated final cost for the work
covered by each AFE. In the case of a major project, the AFEs shall be grouped together and
be included in the best estimate of the final cost for such project. The Operator shall make
appropriate comments by budget break-down relating to the progress of the project in

Licence ….. - Accounting Procedure
relation to the amount expended to date and the estimated final cost.
15 - A
6.4.2 Administrative and Operating Expenditures
The administrative and operating expenditures shall, within twenty-five (25) days following
the end of each Month, be reported compared to the annual Budget.
6.5 Inventories
6.5.1 Inventories
A complete inventory shall be taken at reasonable intervals, and at least annually for
warehouse stock, covering all Controllable Material charged to the Joint Account.
6.5.2 Notice
The Non-Operators shall receive at least thirty (30) days' notice of the intention to take an
inventory and shall have the right to be represented when the inventory is taken. If the
Operator is taking an inventory on a continuous basis, the Non-Operators shall be informed of
the schedule to enable them to be present if desired. Failure of a Non-Operator to be present
after having received such notice shall bind such Non-Operator to accept the result of the
inventory.
6.5.3 Surpluses, Shortages and Adjustments
The Operator shall, within sixty (60) days of the completion of an inventory, furnish the
Non-Operators with copies of the inventory, showing surpluses, shortages and adjustments
made, with the relevant explanations.
6.5.4 Special Inventories
Any Non-Operator may, with reasonable notice and at his own expense, require the Operator
to take a special inventory of the Material charged to the Joint Account, and shall have the
right to be represented when the inventory is taken.
6.6 Production Report
The Operator shall, within twenty-five (25) days following the end of each Month after the
commencement of any production prepare and forward to the Non-Operators a report
containing at least the following information by category:
Opening Stock
Production at Wellhead
Consumption
Re-injection
Flared Quantities
Liftings
Closing Stock.
Within five (5) Working Days after the end of a Month a provisional report shall be
forwarded by telex or telefax.
If required due to the type of operation, a reconciliation of the Parties' share of production
shall be included.

Licence ….. - Accounting Procedure
ARTICLE VII: CONTROL PROCEDURES
7.1 Audits
16 - A
7.1.1 Access
All Non-Operators shall at reasonable times during normal business hours have free access to
all books, records, manuals, inventories and property maintained by the Operator and its
Affiliates relating to the Joint Operations.
7.1.2 Notice
The Non-Operators shall give at least thirty (30) days' notice of their intention to conduct an
audit and make every reasonable effort to conduct audits jointly or simultaneously in a
manner, which will result in a minimum of inconvenience to the Operator. The Operator shall
make all reasonable efforts to cooperate with any audit and will provide reasonable facilities
and assistance therefor.
7.1.3 Costs
The cost of an audit by the Non-Operators is not chargeable to the Joint Account, but a copy
of the audit report shall be distributed to the Parties participating in the audit within sixty (60)
days of the completion of the audit.
7.1.4 Report
The audit report shall include all claims arising from the audit and comments relating to the
settlement of outstanding matters, as well as comments to the accounts and records.
7.1.5 Adjustments
The Operator shall reply to the report in writing within sixty (60) days and promptly record
all adjustments, which have been agreed between the Operator and the Non-Operators. If any
such adjustment is in excess of one million Kroner (DKK 1,000,000) or equivalent in another
currency in relation to a specific claim, consideration shall also be given to the gain or loss of
interest which the Parties may have incurred during such period that the Parties either have
had the use of or were denied the use of the relevant funds. The computation of any such
interest shall be calculated on a day to day basis at the rate of one per cent (1%) above the
Cost of Funds Rate.
7.1.6 Disagreements
Outstanding claims, which cannot be agreed upon, shall be referred to the Accounting
Committee, if any, or the Operating Committee for settlement before going to arbitration.
7.1.7 Time Limits
The Parties' right to claim any adjustment shall cease twenty-four (24) Months after the end
of each Year, unless a written request for such adjustment is given to the other Parties during
such twenty-four (24) Month period. Adjustments involving or resulting from third party
claims, physical inventories or statutory requirements are exempt from the twenty-four (24)
Month limitation. Non-Operators shall have the right to further investigations in relation to
the outstanding matter until such matter has been settled.
7.1.8 Proprietary and Confidential Information
If an audit of the Operator and Affiliated Companies by the Non-Operators involves
information, which is generally accepted as proprietary and confidential, the Operator may

Licence ….. - Accounting Procedure
17 - A
require that such audit is carried out by an external auditor of international standing acting
under the instructions of the Non-Operators. Such assistance will, however, be chargeable to
the Joint Account.
7.1.9 Third Party Contract
The Operator shall use his best efforts to obtain audit rights for the Non Operators in all
contracts where the Operator obtains such rights for itself. Audits shall normally be
carried out jointly and in any case arranged through the Operator.
7.2 AFEs
7.2.1 Request for AFE
Before entering into a commitment, the Operator shall, with the exception of expenditures
mentioned in Section 2.3.2., request the Parties to authorise an AFE at a time when the main
details of the relevant commitment or expenditure can be ascertained, but consistent with
giving the Parties sufficient time to consider the matter.
7.2.2 Information
Each AFE shall set forth the following information:
(a) a brief summary of the scope or work covered by the AFE,
(b) an itemised breakdown of expenditures showing separately base cost, and
allowance for contingencies,
(c) the assumptions regarding the inflation rate and exchange rates,
(d) an estimate of phasing of Cash Calls on a monthly basis,
(e) an estimate of the amounts of any alternative currencies required,
(f) the Operator's direct and indirect charges, and
(g) each Party's total share of expenditure.
Necessary further details to support estimated costs will be included as attachments to the
AFE to the extent required by the Operating committee.
7.2.3 Approval
Any Party, which has voted in favour of an AFE, which has been approved by the Operating
Committee, shall sign an AFE form indicating its authorization thereof. Copies of the relevant
AFEs showing a sufficient number of authorizations by the Parties shall be promptly
distributed to the Parties by the Operator.
7.2.4 Deemed Approval (not applicable during the pre-drilling phase)
If the Operator requests the Parties to authorise an AFE for a total expenditure not exceeding
one million Kroner (DKK 1,000,000), or such other amount as may be determined by the
Operating Committee, the AFE in question shall be deemed to be approved and shall be
binding upon the Parties unless within fourteen (14) days after the Parties have received the
AFE, an objection thereto is made to the Operator by any Party. If an objection is made,

Licence ….. - Accounting Procedure
approval shall take place in accordance with Section 7.2.3. above.
18 - A
7.2.5 Authority for the Operator
Approval of an AFE by the Operating Committee constitutes authority for the Operator to
enter into any commitment or incur any expenditure properly made in relation thereto
whether or not payments in respect of such commitments and expenditures will result in the
final cost of such commitments and expenditure exceeding the total Budget amount or the
AFE, provided that if at any time it becomes apparent that either,
(a) commitments yet to be made will, or are likely to, cause the total annual Budget to
be exceeded by five per cent (5%), or
(b) expenditures to be incurred under commitments already made will cause an
individual Budget item or AFE to be exceeded by the lesser of ten per cent (10%)
or one million Kroner (DKK 1,000,000) or that the cumulative total of such excess
expenditures shall, or are likely to, exceed five per cent (5%) of the total annual
Budget,
the Operator shall immediately notify the Parties and shall without delay prepare a revised
AFE and if necessary a revised Budget, giving the reasons for the increased cost, and shall
request approval of the revised AFE and Budget, and shall not enter into any new
commitment in relation to the AFE until the revised AFE and Budget has been approved by
the Operating Committee.
7.3 Cost Control
The Operator shall establish and maintain an effective cost control system for the benefit of
the Joint Operations. Such system shall include such controls as may be decided by the
Operating Committee.

Unofficial translation. In case of discrepancy, the original Danish text shall prevail.
CONDITIONS REGARDING PRE-INVESTIGATIONS OFFSHORE
I Coordination and Relation to Other Activities
The licensee shall perform the investigations in a proper way so that activities
performed by other licensees in pursuance of the Danish Subsoil Act, including other
holders of pre-investigation permits, fishing activities and other economic activities, are
not unreasonably obstructed. In particular, it should be noted that investigations made in
areas comprised by sole licences in accordance with Sections 5 and 13 of the Danish
Subsoil Act, shall be performed in consideration of these activities. In pursuance of the
present permit, the licensee shall, when necessary, coordinate the activities with the
activities of other licensees. The Danish Energy Agency may order the licensee to
coordinate the activities with the activities of other licensees.
II Notification and Reporting
A) Not later than 20 days before the commencement of each investigation,
notification hereof shall be given to:
Rev. 6 October 2008
Energistyrelsen
(Danish Energy Agency)
Amaliegade 44
DK-1256 Copenhagen K
The notification of the Danish Energy Authority shall include the information
stated in Annex 1. The notification may be forwarded to the Danish Energy
Agency by mail or by e-mail, ens@ens.dk.
The Danish Energy Agency may grant exemptions from the 20 days' time limit.
B) During the investigations, the licensee shall submit a weekly report by fax or email
including the information given in Annex 2 - to:
Energistyrelsen (Danish Energy Agency)
Fax No. (+45) 33 11 32 62, e-mail: indvindingsekr@ens.dk
De Nationale Geologiske Undersøgelser for Danmark og Grønland
(The Geological Survey of Denmark and Greenland)
Fax No. (+45) 38 14 20 50, e-mail: SubsurfaceA@geus.dk
The first report is to be submitted 8 days after the commencement of the
investigation. If a fisheries expert is on board, the report shall state the name of
the expert, cf. V below.
1

C) As the investigations are carried out and data become available, the data shall,
free of charge, be sent to the Geological Survey of Denmark and Greenland and to
the Danish Energy Agency according to the rules stipulated in Executive Order
No. 56 of February 4, 2002 on the Submission of Samples and Other Information
about the Danish Subsoil.
D) When the investigations are completed, the following information is to be
reported to the Danish Energy Agency:
Rev. 6 October 2008
• For seismic investigations, start and completion dates of the acquisition period
have to be stated together with the total amount of kilometres (2D)/square
kilometres (3D) acquired. If the investigation period extends across the turn of
the year, the kilometres/square kilometres acquired shall be reported for each
year. If the investigation extends across an international border, the total
amount of kilometres/square kilometres acquired in each country shall be
reported. For 3D investigations, also corner coordinates of the investigation
area shall be reported.
• For other types of pre-investigations, similar information about the
investigation period and amount of acquired data has to be reported.
III Information on Sale and Exchange of Data
On request the licensee shall provide the Danish Energy Agency with complete details
of any sale or exchange of acquired data.
IV Authority Representation
Representatives of the Danish Energy Agency and the Geological Survey of Denmark
and Greenland are entitled to be present during all investigations made in pursuance of
this permit.
All travelling, lodging and boarding expenses for the above representatives shall be paid
by the licensee.
V Coordination with Fishing Activities
If the licensee performs pre-investigations from a ship, the licensee shall:
• contact Danmarks Fiskeriforening (Danish Fishermen’s Association), Nordensvej 3,
Taulov, DK-7000 Fredericia, Phone (+45) 70 10 40 40, to discuss in detail the
planning of the acquisition in order to minimise any interference with fishing
activities. If necessary, the Danish Fishermen’s Association may assist in appointing
a fisheries expert.
• ensure that a fisheries expert is present on board the investigation vessel. The
licensee shall pay all expenses. Fiskeridirektoratet (Danish Directorate for
Fisheries), Nyropsgade 30, DK-1780 Copenhagen V, Phone (+45) 72 18 56 00, has
to approve the qualifications of the fisheries expert. However, it is not necessary to
2

ing a fisheries expert if the vessel only operates in a stationary position and
without towing equipment (geotechnical operations, etc.) or if the vessel solely
operates within the safety zone of 500 metres around a platform.
• enter into an agreement with the fisheries expert regarding working hours, salary,
insurance, etc. While on board, the fisheries expert shall keep a log of his
observations. Not later than 10 days after his return, the fisheries expert shall
forward the log to the Danish Energy Agency as well as a copy to the licensee and
to the Danish Directorate for Fisheries.
• forward information about the planned investigations to the journal “Fiskeri
Tidende”, Nordensvej 3, Taulov, DK-7000 Fredericia, Phone: (+45) 76 10 96 63,
Fax No.: (+45) 75 45 19 28, e-mail: tl@dkfisk.dk.
VI Special Conditions
If the investigations are performed in areas bordering the Polish Continental Shelf or
territorial waters, separate consent shall be obtained from the Danish Energy Agency
prior to the start of the investigations. A request for such consent shall be submitted not
later than 60 days before it is intended to start the investigations.
Rev. 6 October 2008
3

Information sheet, offshore, amended 7 October 2008
INFORMATION SHEET CONCERNING LICENCE TO PERFORM
PRE-INVESTIGATIONS ON DANISH TERRITORY
1. The licensee for whom the investigation is made:
Name: _______________________________________________
Address: _____________________________________________
Telephone: _______________ Fax: _____________________
2. Operator:
Name: _______________________________________________
Address: _____________________________________________
Telephone: _______________ Fax: _____________________
3. Contractor - if different from 2.:
Contact person for Danish authorities:
Name: _______________________________________________
Address: _____________________________________________
Telephone: _______________ Fax: _____________________
1
Annex 1

Information sheet, offshore, amended 7 October 2008
4. Survey vessel:
Name: __________________ Nationality: _________________
Length: _________________ Width: _____________________
Draught: ________________ Tonnage: ___________________
Length of seismic cable: _________________________________
Captain: ______________________________________________
Size of crew: __________________________________________
5. Party Manager
Name: _______________________________________________
Address: _____________________________________________
Telephone: _______________ Fax: _____________________
6. Contact person for Danish authorities/representative in Denmark
Name: _______________________________________________
Address: _____________________________________________
Telephone: _______________ Fax: _____________________
7. Visits to Danish ports:
Ports: ________________________________________________
Time: ________________________________________________
Purpose: ______________________________________________
2

Information sheet, offshore, amended 7 October 2008
8. Investigation programme:
Period: _______ Size: _____________ Km: _____________
Position of area where the investigation is started: _____________
_____________________________________________________
The investigation area: ___________________________________
_____________________________________________________
Specification of the first week’s investigation programme: ______
_____________________________________________________
9. Investigation methods, including technical specifications of
instrumentation, cable, energy source and processing method:
_____________________________________________________
_____________________________________________________
10. Estimated time schedule for the processing of collected data:
Implementation: ________________________________________
Termination: __________________________________________
Company name: ________________________________________
Address: _____________________________________________
Telephone: _______________ Fax: _____________________
3

Information sheet, offshore, amended 7 October 2008
11. Information on the geological interpretation of data:
Time schedule: _________________________________________
Company name: ________________________________________
Address: _____________________________________________
Telephone: _______________ Fax: _____________________
12. Any alterations to the information stated shall be submitted in writing to
the Danish Energy Agency.
4

GUIDELINES FOR
DRILLING
EXPLORATION
1988
(2009)

Danish Energy Agency 2
Guidelines for Drilling – Exploration
Reprint of the Guidelines from September 1988, however,
the names and addresses of authorities mentioned have
been updated. As the guidelines have otherwise not been
updated for more years, the Danish Energy Agency should
be consulted before using the drilling guidelines.
Table of Content
EXPLORATION AND APPRAISAL WELLS 3
1. DRILLING PERMIT 4
2. DRILLING PROGRAMME 5
3. SITE AND SUBSOIL SURVEYS 10
4. DRILLING EQUIPMENT AND SUPPLIES 11
5. DRILLING ACTIVITIES 12
6. SAFETY PRECAUTIONS AND DRILLS 15
7. ABNORMAL FORMATION PRESSURE AND HYDROCARBON DETECTION 16
8. TEST PRODUCTION 17
9. EXPLOSIVES AND RADIOACTIVE MATERIALS 18
10. CHANGES IN THE DRILLING PROGRAMME 19
11. ABANDONMENT OF WELLS 20
12. DAILY REPORTS 22
13. DRILLER'S LOG 25
14. FURTHER REPORTING, SUBMISSION AND STORING OF SAMPLES 26
15. SAMPLING AND MEASUREMENTS 32
MINISTRY OF CLIMATE AND ENERGY
Danish Energy Agency
44 Amaliegade
DK- 1256 Copenhagen K
Denmark
Telephone (+ 45) 33 92 67 00
Facsimile (+ 45) 33 11 47 43

Danish Energy Agency 3
Guidelines for Drilling – Exploration
UNOFFICIAL TRANSLATION
EXPLORATION AND APPRAISAL WELLS
These guidelines apply to approval and supervision, which in consequence
of the Danish subsoil Act have been delegated to the
Danish Energy Agency. These guidelines relate to exploration and
appraisal wells for hydrocarbons and other minerals, offshore and
on land as specified in Section I of the subsoil Act. However,
some specifications have specific relevance for offshore wells or
wells drilled to hydrocarbon targets, and may to a certain degree
be irrelevant for other purposes. Normally jack up platforms are
used for Danish offshore drilling operations. These guidelines are
therefore primarily adapted to jack up operations.
For offshore drilling operations approval and supervision for
matters concerning safety and health (also covering
crew-regulations for the drilling related personnel) are regulated
through the Act on Certain Marine Installations. For such matters
only limited topics are covered by these drilling guidelines.
Reference is made to decrees No. 539 dated November 29, 1985
and No. 656 dated December 30, 1985 concerning stand-by boats
and safety zones respectively. Administration of these decrees is
handled by the Danish Energy Agency. For drilling operations on
land other central and local authorities will have permitting and
supervising functions concerning the various work operations.
Furthermore attention should be given to rules about discharge of
chemicals to the sea. Administration of these rules is handled by
the Danish Environmental Protection Agency.
It must be noted that specifications are given as guidance and that
other means of achieving corresponding conditions regarding
safety and information might be approved.

Danish Energy Agency 4
Guidelines for Drilling – Exploration
1. Drilling Permit
Drilling shall not commence until a drilling permit has been
granted by the Danish Energy Agency.
1.1 Well in advance of the requested time for a drilling permit, the
Danish Energy Agency is to receive a detailed drilling programme
for the work in question and detailed documentation for the drilling
platform/rig to be used shall be presented. Furthermore, the Agency
shall receive a drilling application, information on the expected
timing of the drilling operations and economic outlines for the
planned operations.
Information described above may be forwarded to the Danish
Energy Agency as it becomes available. All essential parts of the
information must be forwarded well in advance of the start of the
operation.

Danish Energy Agency 5
Guidelines for Drilling – Exploration
2. Drilling Programme
The drilling programme shall (together with manuals) state
unambiguously how the operations connected to the well are
expected to be carried out. Parts of the information required
concerning the drilling programme may be forwarded as separate
appendices and, where relevant, reference may be made to other
documentation material such as the operator's general operation
manual, general safety regulations, general regulations for test
production, etc. Material referred to must be available in the Danish
Energy Agency.
The drilling programme must state whether hydrogen sulphide
preparedness will be needed and if this is the case the programme
must state how and when it will be established.
6 copies of the drilling programmes, (some information in fewer
copies, e.g. detailed geological information in 4 copies, and site
surveys in duplicate) shall be submitted at least 3 weeks before
drilling is scheduled to start. The programme shall contain the
following:
2.1 The well number in the Danish Energy Agency numbering system.
2.2 The name of the well. Wells not named by the operator will be
named by the Danish Energy Agency.
2.3 Name of operator and information on the operator's organisation in
connection with the drilling operations. (For offshore operations
reference may be made to a separate manning-/organisation-plan).
2.4 Well surface position and maximum tolerance on this position. The
position shall be given in geographical and Universal Transverse
Mercator (UTM) co-ordinates.
2.5 Ownership and name of drilling platform/rig. (This information
may be submitted later, cf. section 1.1).
2.6 Water depth/ground level elevation.
2.7 Expected rotary kelly bushing (RKB) elevation above reference
level when platform/equipment is ready to start drilling. For jack up
platforms the elevation shall be measured from mean sea level
(msl).
2.8 Estimated total well depth, positions for targets and planned well
trajectory.

Danish Energy Agency 6
Guidelines for Drilling – Exploration
2.9 Depth to and description of the anticipated geological horizons and
eras.
a) Stratigraphic column showing and describing anticipated
lithology, as well as stating the planned casing points.
b) Representative, interpreted seismic sections near the planned
well (normally 2 intersecting lines).
c) Depth and time structure maps showing primary and
secondary prospects as well as time and possibly depth
structure maps for other key horizons with a scale of not less
than 1:25,000.
d) The velocity functions used in the area.
e) A prospect description of primary and secondary objectives.
2.10 Programme for the positioning of casing.
The programme shall contain:
a) Diameter of drilled hole.
b) Casing dimension.
c) Weight and quality of casing with reference to recognised
standard.
d) Planned setting depth for the casing.
e) Strategy for centering of casing, including type of exterior
packers, where relevant.
f) Programme for cementing of casing, including type of
cement, estimated height of cement behind the casing, and
strategy for calculations of necessary volumes of cement.
g) Demonstration of the sufficiency of the casing string strength
with regard to burst, collapse, and tension. Reference may be
made to Company Procedure for casing design calculation,
cf. beginning of chapter 2. In this case the parameters used in
the design (pressure, cementing height, mud density etc.)
must be stated.
h) Procedure and minimum requirements for testing the
formation strength after drilling out the individual casings,
including calculations demonstrating that the required
formation strength is sufficient for drilling to the next casing
setting depth.

Danish Energy Agency 7
Guidelines for Drilling – Exploration
i) Precautions to be taken if the required formation strength is
not obtained.
2.11 Drilling fluid programme, containing the following:
a) A detailed description of the types of drilling fluid to be used
specifying density, rheological properties etc.
b) A detailed description of the components of the drilling
fluids. Reference may be made to relevant chemical data
sheets.
c) A detailed description of check equipment and procedures for
the drilling fluid or reference to relevant standard, which will
be, followed (e.g. API RP 13B).
d) Procedure for monitoring the drilling fluid volume.
e) A list of the quantities of safety related material (e.g. baryte
and cement) to be stored on the drilling platform during
normal operations and an argumentation for these quantities
(cf. section 5.8).
2.12 Logging programme, containing information on types of logs to be
run at various intervals.
2.13 Programme for taking geological samples, including a coring
programme.
2.14 Tentative programme for test production. Final test programme
shall when applicable be submitted and be approved separately (cf.
Chapter 8).
2.15 Description of method for and maximum vertical interval between
measuring the well inclination and direction.
2.16 Blow-out preventers, etc. (cf. chapter 4 and 5).
a) A list of the blow-out prevention equipment available
onboard the drilling platform, specifying manufacturer, size,
working pressure, and arrangement. Information regarding
the control system operating the blow-out preventer stack. A
list of the blow-out prevention equipment available on the
drill floor ready for mounting on the drill pipe.
b) Procedure for kick control, stating i.a., the data and
calculations which by routine are updated to ensure the
necessary background for handling emergency situations.
Information on how blow-out preventers, measuring
equipment, drilling fluid circulation and mixing equipment
are expected to be used under such conditions.

Danish Energy Agency 8
Guidelines for Drilling – Exploration
c) Programme for drills in connection with equipment as mentioned
in sections 2.16.a and 2.16.b.
d) Programme for pressure testing of blow-out preventers and
casing at different stages in the drilling operations.
(This information may be submitted separately, cf. section 1.1).
2.17 Abnormal pressures.
a) An evaluation of the possibilities of encountering
overpressured zones with the well in question. This should be
based on seismic data and/or experience from neighbouring
wells.
b) A description of methods and procedures to be used for
detecting any overpressure in the well.
2.18 An evaluation of the possibilities of encountering zones with
poisonous gases with the well, including description of methods for
detecting and handling of same.
2.19 An evaluation of the possibilities of encountering gas pockets in the
well in question based on seismic data and experience from neighbouring
wells, including the possibility of encountering shallow as
well as deep gas pockets.
2.20 A list of any other possible significant deviations from the
geological/drilling prognosis which may be encountered during the
drilling of the well, (e.g. saltzones, swelling clay, high pressured
zones) and information on precautions planned in this connection.
2.21 A summary sequence of all operations including an estimate of the
time required for the different main operations (typical as a time
versus depth curve i.e. drilling curve). The summary shall give a
general description of the operations, including information on any
special safety related requirements (caused by e.g. possible gas
pocket or abnormal pressure).
2.22 Information regarding function, name, address and nationality of
the contractor companies to be employed for the well in question.
Information about companies carrying out less critical functions
may be forwarded just before the start of the drilling operation cf.
section 1.1.
2.23 Tentative programme for plugging the well and for re-establishing
the well site. This programme may be submitted at a later stage, cf.
section 1.1 and chapter 11. Final programme must be submitted for
separate approval.

Danish Energy Agency 9
Guidelines for Drilling – Exploration
2.24 Description of preparedness for handling hydrogen sulphide and
other dangerous gases including information on equipment,
supplies, training and drills. Reference may be made to Company
Safety Manual, cf. beginning of chapter 2.
2.25 Contingency plan for use in the event of major accidents or
emergency situations regarding safety as well as environment.
Reference may be made to Company Safety/Pollution Manual, cf.
beginning of chapter 2.

Danish Energy Agency 10
Guidelines for Drilling – Exploration
3. Site and Subsoil Surveys
Site and subsoil surveys for the well site in question shall at least
include the information listed below. Reports containing data from
the surveys as well as interpretations and evaluations shall be
forwarded to the Danish Energy Agency and the Geological Survey
of Denmark and Greenland. When taking samples of material, a
separate set of samples has to be taken and forwarded to the
Geological Survey. Size and packing according to agreement with
the Geological Survey.
3.1 Location surveys determining foundation and stability conditions
shall be carried out before a drilling permit can be given.
3.2 While positioning and operating a drilling platform foundation and
anchor stability shall be checked with relevant frequency.
3.3 The exact position of any neighbouring cables, pipelines, wells etc.
must be determined.
3.4 To the extent possible the subsoil from the sea-bed to levels deeper
than the anticipated total depth of the well shall be examined by upto-date
- primarily seismic - methods. Data collection and
processing are to be adapted to the various depth intervals to obtain
optimal information about all intervals.
3.5 For the well location in question, an evaluation shall be made of all
conditions on the sea-bed and in the subsoil which might be of importance
for the safety of the planned drilling operations or for the
nearby installations.
The evaluation shall as a minimum comprise:
a) Any limitations on positioning and anchoring of drilling
platforms and auxiliary crafts to avoid damage to pipelines,
cables, etc. as well as unnecessary drilling risks.
b) The possible presence of objects which might affect the
drilling operation or the drilling platform (boulders, wrecks,
other wells, etc.).
c) Possibility of penetrating gasbearing zones.
d) Possibility of penetrating particularly weak zones.
e) Possibility of penetrating zones with abnormal pressures.

Danish Energy Agency 11
Guidelines for Drilling – Exploration
4. Drilling Equipment and Supplies
4.1 Before a drilling permit can be given, the Danish Energy Agency
must have received general information as well as documentation
and certificates for the drilling platform/drilling rig. The
acceptability of the platform/rig for the specific operation/location
must be documented.
4.2 A "Chemical Manual" covering all dangerous substances used
while operating shall be prepared. For offshore operations more
detailed guidelines are given by the Danish Energy Agency.

Danish Energy Agency 12
Guidelines for Drilling – Exploration
5. Drilling Activities
5.1 During drilling operations, all necessary steps shall be taken to
prevent explosion, blowouts, pollution, or other damage. Safety
related equipment shall be installed as drilling operations progress
and shall comply with the following requirements. Apart from
possible drilling when setting the conductor pipe, drilling must not
be carried out before blowout preventers/diverter system and
related equipment have been installed and tested.
5.2 The well must be cased. The casing shoes shall - with due
consideration of geological conditions - be set at depths sufficient
to ensure complete control of the well at all times.
a) Drive/conductor pipe (casing) shall be set at such a depth
below seabed that unconsolidated formations are supported
and a stable hole ensured for initial drilling operations.
Prior to drilling out from the drive/conductor casing, a
diverter system shall be installed and tested operationally.
b) Surface casing shall be installed in such a manner that a good
anchorage of the blow-out preventer is secured. Surface
casing shall be cemented to seabed or ground level. The
cement shall be given sufficient time to set before further
drilling is carried out.
A hardening test for the cement used shall be carried out on
the surface.
Prior to drilling out from surface casing, the blow-out
preventer and the kill and choke systems shall be installed.
These shall normally include at least one annular preventer
and a system of ram preventers containing at least one set of
pipe rams and one set of blind or shear type blind rams
together with kill and choke lines connected to the choke
manifold. After the installation, all rams and connections
shall be function and pressure tested to pressures approved by
the Danish Energy Agency.
c) Intermediate casing shall be installed and cemented in such a
way that full control of the well is maintained at all times.
Intermediate casing shall be cemented at least 200 m into the
previous casing but shall if relevant, for instance as
protection for ground water, be cemented right to the surface.
The cementing and centering programmes shall endeavour to
secure that all zones containing hydrocarbons as well as all
intervals with abnormal pressures are isolated.

Danish Energy Agency 13
Guidelines for Drilling – Exploration
Prior to drilling out from intermediate and subsequent
casings, a complete blow-out preventer, and kill and choke
systems shall be installed. Normally the blow-out preventer
system shall include at least one annular preventer and a
system of ram preventers containing at least 2 sets of pipe
rams, l set of blind rams and 1 set of shear rams. The last two
may be combined in 1 set of shear type blind rams. After
installation, all rams and connections shall be function and
pressure tested to pressures approved by the Danish Energy
Agency.
d) Production casing must be cemented as stipulated for the
intermediate casing.
e) A liner must be cemented over its full length. When placing
and cementing the liner, consideration shall be given to the
best possible isolation of hydrocarbon bearing and/or
abnormally pressured zones.
5.3 Normally cement bond log or temperature survey must be run when
surface or intermediate casing have been cemented without good
cement return to surface/sea-bed. The cementation of production
casing and liners must be checked with cement bond logging.
5.4 Casing strings shall be of such a diameter, weight and grade, as
well as designed and installed in such a way that they can withstand
any mechanical and chemical influence which may be expected in
the well during drilling, testing, and stimulation.
5.5 After the casing strings have been installed and cemented they shall
be pressure tested in accordance with the approved drilling
programme. For each casing the pressure test shall be adapted to
the internal pressure to which the casing may be exposed.
5.6 The installation of used casings is not permitted unless these have
been adequately tested and inspected in advance by an independent
inspection company and satisfactory strength of pipes and connections
can be documented.
5.7 Pressure testing of the formation strength below the casing shoe
shall be performed in accordance with the approved drilling
programme.
5.8 It must be possible to handle drilling fluid loss or to increase the
fluid density without delay. During routine operations sufficient
spare amounts of mud mixing materials must therefore be stocked
on the platform/well site. Furthermore a sufficient stock of
chemicals for handling possible hydrogen sulphide must be
available (if hydrogen sulphide can be expected, cf. beginning of
chapter 2).

Danish Energy Agency 14
Guidelines for Drilling – Exploration
5.9 Before the drill string is pulled out of the hole the well shall be
observed and found to be stable.
During tripping the well shall be monitored carefully for fluid
loss/gain.
5.10 During drilling, the drilling fluid reconditioning equipment shall be
used to the necessary extent to separate gas and cuttings from the
fluid.
5.11 The density of the drilling fluid shall be tested regularly and at least
every hour.
5.12 Oilbased mud or mud containing chemicals which can be
particularly detrimental to the health or environment, can only be
utilised when approval is given by the Danish Energy Agency,
(approval by other authorities may also be necessary).
5.13 The disassembly or other maintenance of blow-out preventers may
take place only when the well is secured against blow-out by a
minimum of 2 independent and tested barriers, accepted by the
Danish Energy Agency in general or specifically.
5.14 Pressure or operational testing of the blow-out preventers and the
connected equipment shall be carried out regularly and after
disassembly, as well as when drilling operations or other conditions
make it reasonable.
5.15 The hydrostatic pressure in the well may only in connection with
testing be reduced to such a level that the formation fluid can flow
to the borehole.
5.16 During drilling operations the Licensee is required at all times and
with necessary accuracy to keep track of the well trajectory.
Measurements which determine inclination and azimuth shall be
taken at intervals securing the necessary knowledge of the well
course. For deviated wells the measurements shall be taken at
intervals not exceeding 100 m, while bigger intervals and possibly
omission of azimuth determination can be accepted in the case of
almost vertical wells. Such measurements shall be carried out while
drilling below the surface casing or from another specified depth
approved or required by the Danish Energy Agency.

Danish Energy Agency 15
Guidelines for Drilling – Exploration
6. Safety Precautions and Drills
6.1 During the operations there must be preparedness for handling
escape of poisonous gases (e.g. in case of a kick). This
preparedness can be omitted in cases where it prior to the operation
can be demonstrated that no hydrogen sulphide or other poisonous
gases can be met in the well. If hydrogen sulphide or other
poisonous gases are encountered all necessary safety precautions
shall be taken to prevent accidents and the Danish Energy Agency
shall be notified.
6.2 At the end of each shift, the offgoing crew shall -each within his
area of responsibility - inform the oncoming crew of any defects
that have been detected but not repaired. The offgoing crew shall
furthermore inform the incoming crew about the working
conditions and changes that have taken place. The incoming crew
shall make certain that the equipment is in satisfactory condition.
6.3 For each drilling crew, pit level drills shall be carried out at least
once a week.
6.4 For each drilling crew, weekly drills shall be carried out covering
precautions to be taken in the event of kick.
6.5 Training and drills concerning handling of hydrogen sulphide shall
be conducted to the degree relevant.
6.6 Safety meetings and drills shall be recorded.
6.7 During inspection, inspectors from the Danish Energy Agency may
in consultation with the operator require drills as mentioned in
items 6.3, 6.4 and 6.5 to be conducted.

Danish Energy Agency 16
Guidelines for Drilling – Exploration
7. Abnormal Formation Pressure and Hydrocarbon Detection
7.1 Monitoring and registration of data for evaluation of formation and
pore pressures and for determination of hydrocarbon content in
relation to the drilling fluid density, drilling rate, etc. shall be
carried out from the drive/conductor pipe shoe and shall be
continued till the well has been plugged.
7.2 Recognised measuring methods, parameters, and calculation
methods shall be used at all times in evaluation of the possibility of
encountering abnormal pressures.

Danish Energy Agency 17
Guidelines for Drilling – Exploration
8. Test Production
8.1 Before test production of a well can be carried out all relevant logs
shall be submitted to and the test programme be approved by the
Danish Energy Agency.
8.2 Test production, perforating, hydraulic fracturing, acidizing or
other chemical treatment of the well may only take place when
special safety precautions, relevant for the operation, are observed.
The above-mentioned operations shall normally be started and
preferably take place in daylight. Test production is not to take
place when safety is adversely affected by weather and wind
conditions.
Test production in open hole is normally not allowed if the packer
is in direct contact with the formation.
Test production shall be performed in such a way that the well is
not damaged unnecessarily.
Caution shall be exercised to prevent accidental escape of
chemicals and hydrocarbons to the environment.
8.3 Before start-up of test production, the drilling platform/drilling site
shall be specially prepared for the operation:
All necessary fire precautions shall be taken. The fire fighting
equipment shall be ready for immediate use.
Valves, lines, and vessels in the entire production system and
where relevant blow-out preventers shall be pressure and function
tested.
Where relevant stand-by vessels/nearby inhabitants shall be alerted.
Before the operation commences, all persons who are to participate
in the test operation shall take part in a safety meeting.
8.4 Well perforation may be carried out by experienced personnel only.
Extreme caution shall be exercised to prevent accidental firing.
Perforation of a completed well shall take place under safety
conditions corresponding to daylight (e.g. illumination of
equipment, manning and possibilities for safe evacuation).
8.5 If radio transmitters or other equipment may constitute a hazard in
connection with the use of explosives, this equipment must not be
used while such operations are in progress. Non drilling related
radio equipment, e.g. transmitters onboard vessels, helicopters and
radio stations, which are not at a safe distance from the drilling site
must be considered.
8.6 The burners may be ignited by remote control systems only.

Danish Energy Agency 18
Guidelines for Drilling – Exploration
9. Explosives and Radioactive Materials
9.1 Explosive charges for the perforating guns shall be stored in
properly earthed metal containers. Explosives shall be stored in
rooms specially approved for this purpose. Detonators, prima cord
and perforation charges shall be stored separately.
Explosives shall be handled by specially trained personnel only.
9.2 Radioactive materials shall be stored in an approved way and
handled by specially trained personnel only.

Danish Energy Agency 19
Guidelines for Drilling – Exploration
10. Changes in the Drilling Programme
10.1 Changes concerning safety and other substantial changes relative to
the existing drilling programme must not take place without prior
consent from the Danish Energy Agency.
10.2 In emergencies the drilling programme may be altered without
prior consent. In such cases, the Danish Energy Agency must be
notified immediately of the alterations and the reason for them.

Danish Energy Agency 20
Guidelines for Drilling – Exploration
11. Abandonment of Wells
Prior to the abandonment of a well the hole must be plugged
according to procedure approved by the Danish Energy Agency.
11.1 Normally, an exploration well shall be abandoned permanently
when drilling operations as well as relevant logging and test
production have been carried out. Under special circumstances the
Danish Energy Agency may permit a well to be abandoned
temporarily without permanent plugging. To obtain such
permission the Licensee must submit an application indicating how
and when the well is to be abandoned permanently or operations
will be resumed. Furthermore, the application must describe the
responsibility and supervision situation during the temporary
abandonment.
11.2 Application for permission to stop operations and to plug
(permanently or temporarily) and abandon a well, shall together
with a copy of essential logs and other relevant documentation
material, if any, be available to the Danish Energy Agency at least
24 hours before estimated commencement of the actual
abandonment activities.
In the application the Licensee shall give the reasons for the
planned plugging and specify how the plugging will take place and
how the plugs will be checked. The well site condition after the
abandonment and procedures for verification of this must
furthermore be stated.
11.3 In cases where the well is uncased opposite permeable zones,
plugging shall be carried out so that there can be no flow of fluid
through the hole (normally by cementing at least 50 m below and
above the individual zones).
11.4 Where there is an open hole below the deepest casing, a cement
plug shall be placed in such a manner that it extends at least 50 m
above and below the casing shoe.
The top of the cement plug shall be located by load testing. Where
the condition of the formation makes cementing difficult, a
mechanical plug may be positioned in the casing, within 50 m from
the shoe as an alternative to the cement plug below the shoe. In
addition, a cement plug, at least 50 m long shall be placed on top of
this plug.
The performed plugging of the open hole section shall be pressure
tested for sufficient time and with enough differential pressure to
detect a possible leak or mechanical failure of the plug.

Danish Energy Agency 21
Guidelines for Drilling – Exploration
11.5 Perforated zones must be plugged with cement so that no fluid flow
to or from the well is possible. Where possible perforated intervals
shall be isolated with cement plugs through the individual
perforated zones and with 50 m long cement plugs below the
lowermost perforation and above the uppermost perforation.
Alternatively the perforated zones can be isolated by a combination
of a mechanical plug squeeze cementing of the perforations and
cement plugging above the mechanical plug.
11.6 If a liner has been used, a cement plug shall be placed in such a
manner that the plug extends 50 m above and below the point of
suspension. Alternatively a mechanical plug followed by a 50 m
long cement plug can be set just above the liner hanger. The top of
the plug shall be located by load testing and the plug shall be
pressure tested as specified in item 11.4.
11.7 In the innermost casing a cement plug must be placed from the shoe
depth of the previous casing and 100 m up.
11.8 It must be ensured that no communication from down hole
formation to the sea-bed/surface via any casing annulus is possible.
11.9 A cement plug, at least 100 m long, shall be placed near the
surface.
11.10 The total weight of the cement plugs in the well and the weight of
the fluid between the plugs shall ensure that as a minimum the
system is in balance with any pressure which may develop in the
borehole.
11.11 When a well is abandoned the original state of the well site shall be
re-established. Where reasonable departure from this requirement
may be approved by the Danish Energy Agency (approval by other
authorities may also be necessary).
When abandoning a well, the condition of the well site shall be
verified. Obtained documentation shall be submitted to the Danish
Energy Agency.

Danish Energy Agency 22
Guidelines for Drilling – Exploration
12. Daily Reports
From the time when the drilling platform (drilling equipment)
arrives at the well site and until the well site is left again, the
Danish Energy Agency shall daily, before 11:00 a.m., by telex or
other acceptable means, receive reports on operations and results
during the last 24 hours. The reports shall at least cover the
activities till 06:00 a.m. on the reporting day. The Danish Energy
Agency may establish special rules for reporting during weekends
and holidays. Technical and geological information contained in
the daily reports to the Danish Energy Agency must also be
submitted to the Geological Survey of Denmark and Greenland.
The Danish Energy Agency may set up more detailed rules for the
presentation of the reports. The reporting must at least contain the
following information:
12.1 Reporting date.
12.2 The number and name of the well.
12.3 Drilling platform/drilling rig.
12.4 Operator
12.5 Total days on the drilling site.
12.6 Present operation.
12.7 Present well depth.
12.8 Progress during the last 24 hours.
12.9 Detailed description of operations during the last 24 hours,
covering essential results as well as a description of operational
problems.
When relevant, at least the following shall be covered:
a) Significant (down hole) loss or gain in drilling fluid system.
b) Problems with well stability.
c) Problems in controlling or monitoring well direction.
d) Substantial deviation from the anticipated geological
conditions.
e) Substantial deviation from anticipated formation pressures.

Danish Energy Agency 23
Guidelines for Drilling – Exploration
f) Casing operations, including casing data (diameter, weight
and type, as well as setting depth), cementing data (density,
volume, expected top) and outline of the cementing
operations (circulation rate, pressure development, gain or
loss of fluids as well as other indications, if any, of good or
bad cementing quality).
g) Pressure tests of both equipment and formation.
h) Logging, indicating intervals logged and problems, if any.
i) Test production, listing principal results from the testing,
including the development of fluid and gas production as well
as of pressures and temperatures. Furthermore principal data
for produced fluids (e.g. densities, gas composition and for
produced water information on tracer concentrations, salt
content and resistivity) must be given.
j) Performed plugging operations, including results from testing
of the plugs.
k) Performed perforation, stating intervals perforated,
perforation density and type.
l) Performed hydraulic and chemical treatment of formation,
including principal information on the operations carried out.
12.10 Principal data for the drilling fluid, including density and
temperature in and out of the borehole, viscosity, water loss, pH, oil
content, tracer concentration, and other main components.
12.11 The gas content of the drilling fluid out of the borehole during
drilling, connection and trip, indicating total gas and gas
components including at least C1 to C4 and hydrogen sulphide.
Furthermore similar information on background gas for circulated
drilling fluid must be given.
12.12 Bit diameter and type.
12.13 Description of drill string assembly.
12.14 Latest casing diameter.
12.15 Latest casing setting depth.
12.16 Test pressure for formation below the casing.
12.17 Maximum permissible surface pressure with actual drilling fluid

Danish Energy Agency 24
Guidelines for Drilling – Exploration
density.
12.18 Wave height and direction.
12.19 Wind force and direction.
12.20 Barometric pressure and air temperature.
12.21 Performed directional surveys.
12.22 The well inclination and direction, as well as horizontal and
vertical position, as calculated from the latest directional survey.
12.23 Description of the geological formations penetrated during the
reporting period, indicating depth, lithology, colour, grain size,
porosity and - when possible - expected geological age, including
detailed results from the preliminary core descriptions.
12.24 Quantitative as well as qualitative information on hydrocarbon
indications.
12.25 Drilling speed in the penetrated layers.
12.26 Principal results from logs run.
12.27 Costs for the last 24 hours.
12.28 Accumulated costs.

Danish Energy Agency 25
Guidelines for Drilling – Exploration
13. Driller's Log
13.1 The drilling platform shall have a daily log, corresponding to IADC
standard, onboard. The log shall be kept at least in duplicate. One
copy shall be filed at the operator's office in Denmark. The other
copy shall be retained on the platform until drilling of the
concerned well has been finished.
13.2 The log shall be filled in after each shift and it shall give relevant
description of the work, which has been accomplished, as well as
contain a list of names and positions of the persons responsible for
the various operations carried out.

Danish Energy Agency 26
Guidelines for Drilling – Exploration
14. Further Reporting, Submission and Storing of Samples
The Danish Energy Agency and/or the Geological Survey of
Denmark and Greenland must receive certain samples as well as
reports on results from surface and downhole measurements.
14.1 While drilling the reporting shall among others include the
following:
a) A "Mud, Pressure and Temperature Log", shall be send to the
Danish Energy Agency and the Geological Survey of
Denmark and Greenland. The logs must be send to the
Danish Energy Agency at the latest together with the open
hole logs from the given hole section. The Geological Survey
of Denmark and Greenland shall receive the logs
continuously, each time a log sheet is completed. Final logs
have to be forwarded to the Energy Agency and the
Geological Survey when the well has reached final depth.
b) "Well Site" geological report, as well as core descriptions, if
any, shall be forwarded continuously to the Danish Energy
Agency and the Geological Survey of Denmark and
Greenland.
c) A "Drilling Mud Report", shall be forwarded to the
Geological Survey of Denmark and Greenland after
termination of drilling operations.
d) Ordinary wire line logging: l transparent and 1 paper copy for
each printed scale (normally at least 1:200 and 1:1000) of all
log runs shall be forwarded to the Danish Energy Agency and
the Geological Survey of Denmark and Greenland. Logs
where the raw data are recorded on magnetic tape must be
send to the Geological Survey of Denmark and Greenland in
a standard format which can be read by the Survey without
difficulties (normally Schlumberger L.I.S. format is used). A
table of contents must follow the tape.
Edited magnetic tapes must be send to the Geological Survey
of Denmark and Greenland in the same way together with a
verification list and a paper log of the tape contents.
The material must be forwarded immediately after
preparation.
Furthermore, if called for by the drilling situation, the Danish
Energy Agency may also require that "Field Prints" be
forwarded without delay.

Danish Energy Agency 27
Guidelines for Drilling – Exploration
e) Directional surveys: The results from surveys shall be
forwarded to the Danish Energy Agency and the Geological
Survey of Denmark and Greenland when they are available.
f) Composite, processed and interpreted logs, including
parameter listing, shall together with a processing report and
a justification for choice of parameters be submitted to the
Danish Energy Agency and the Geological Survey of
Denmark and Greenland.
g) Vertical seismic profile (VSP). One set of standard processed
results on paper must be forwarded to the Danish Energy
Agency and the Geological Survey of Denmark and
Greenland. Furthermore the data must be forwarded to the
Geological Survey of Denmark and Greenland on magnetic
tape together with a detailed description of the format used
and the data contained.
14.2 Samples (cuttings, cores, fluids).
14.2.1 The following geological types and quantities of samples are to be
forwarded to the Geological Survey of Denmark and Greenland:
a) Cuttings. A set of washed and dried samples, taken at the
same intervals as samples for the Licensee's own use, shall be
forwarded to the Geological Survey of Denmark and
Greenland upon termination of drilling operations.
b) Cuttings. Wet samples, taken at the same intervals as samples
for the Licensee's own use, shall be forwarded to the
Geological Survey of Denmark and Greenland not later than
2 weeks after they have been taken. From each sample
interval above Base Upper Cretaceous the sample size must
be at least 1000 g. From sample intervals below Base Upper
Cretaceous the sample size shall – whenever possible - be at
least 1000 g.
c) Sample (1 litre) of the drilling fluid from the inlet side taken
after each qualitative change of additives and before test
production. Further samples must be taken to ensure intervals
of not more than 300 metres (drilled depth) between consecutive
samples.
d) Side wall cores. Remaining material shall be stored at the
Geological Survey of Denmark and Greenland not later than
one year after the well is completed. If samples are prepared
for paleo-analysis, one set of paleontologic or palynologic
slides (original or extra set) shall be forwarded to the
Geological Survey of Denmark and Greenland after the
analysis is completed.

Danish Energy Agency 28
Guidelines for Drilling – Exploration
e) Cores. The material shall be stored at the Geological Survey
of Denmark and Greenland not later than one year after
completion of the well. This time period may upon request be
prolonged by the Danish Energy Agency.
−
−
−
When the cores are stored in Denmark the Licensee, the
Geological Survey and the Danish Energy Agency may freely
inspect the material and may - after consulting the Danish
Energy Agency - take samples for further analysis.
The core material shall from it is taken till it is stored at the
Geology Survey be stored in such a way that representatives
from the supervising authority at the Licensee's expense have
unimpeded access to inspect the material in so far as it is
reasonable and to take samples for additional analysis.
Cores shall be used to obtain information concerning the
specific layers penetrated and in the long-term establishment
of general information on the Danish subsoil. It is therefore
important that core material be kept as intact as possible.
Samples should be sawed or drilled out. The Danish Energy
Agency can at any time require special procedures to be
followed in connection with handling of and sample taking
from cores.
Unless another procedure is agreed with the Danish Energy Agency
the following shall be followed:
Core chips: To avoid unnecessary damage of the core
material only essential chips should be taken. Chips, which
are not immediately needed, shall be taken by sawing or
drilling (e.g. reference samples). If it is necessary to take
chips at the well site (e.g. for quick paleontological dating)
this shall be done with care and the chips shall whenever
possible be taken where the core already is broken.
Drilling of plugs: A 1" diameter horizontal plug shall be
taken for each, 0.3 m of core. At the same depth a
supplementary plug (normally 1½") may be taken for special
core analysis. Furthermore a 1" diameter vertical plug may be
taken for each 1.5 m core.
Additional plugging requires accept from the Danish Energy
Agency. The Danish Energy Agency may when justified
require additional plugging to be done by the Licensee.
Slabbing of cores: For each 1 m core a 15 cm long,
undisturbed section shall be wax-sealed and stored. For the
remaining core material eccentric slabbing - as shown below
- shall be performed.

Danish Energy Agency 29
Guidelines for Drilling – Exploration
Further work can be carried out after the programme for the
work has been discussed with the Danish Energy Agency.
All core material (i.e. the wax-sealed sections, part A, B and
C together with plugs) shall be stored at the Geological
Survey of Denmark and Greenland as soon as practicable and
at the latest l year after completion of the well. Part B shall be
glued in a tray or a section of plywood by the Licensee.
Permission must be obtained from the Danish Energy Agency
if cores are to be stored in Denmark outside the Geological
Survey Central Core Storage Facilities.
f) Samples of formation fluid from each test produced interval.
If possible, 2 litres of all produced liquids. When samples of
separator gas are taken for PVT-analyses, a corresponding
sample shall be taken and forwarded to the Geological
Survey of Denmark and Greenland. Whenever possible, the
fluid samples shall be sent to the Geological Survey of
Denmark and Greenland in containers which can be retained
by the Survey. If the containers shall be returned the Licensee
and the Geological Survey of Denmark and Greenland must
agree on the time from which rental may be charged to the
Survey. The Licensee must furthermore cover all transport
costs.
14.2.2 Marking. All samples collected by the Licensee shall bear a label
stating name of the well and depth (depth interval) from which the
sample is taken. The label must be made in a way that ensures
permanent sample identification.
14.2.3 Packing. The samples must be packed so that the possibility of
long-term identification and storage is ensured. Fluid samples from
formation and production tests f) and c) and samples of drilling
mud shall be packed so that quality and quantity are not affected
during transportation.

Danish Energy Agency 30
Guidelines for Drilling – Exploration
14.3 Reports on analyses of samples from the borehole. Copies of
descriptions and reports shall be forwarded to the Danish Energy
Agency and the Geological Survey of Denmark and Greenland,
including, among others, the following information:
a) Reports on stratigraphic, sedimentologic and paleontologic
analyses.
b) Core descriptions.
c) Colour photos of all cores shall be submitted. Each photo
shall show well name, core number, depth, and scale as well
as top and bottom data. Furthermore, a copy of all other
photos from the handling of core material (e.g. taking of
plugs) must be forwarded.
d) Conventional core analyses.
e) Special core analyses.
f) Petrophysical measurements of core material.
g) Qualitative and quantitative water analysis if formation water
is produced.
h) PVT report indicating qualitative and quantitative
composition of fluid samples from any test productions.
i) Reports on source rock analyses.
14.4 Reports on test production.
14.4.1 Reports containing pressure and temperature profiles in the well
and at the surface as well as separator conditions, choke size,
operational sequence, production rates and cumulative production.
14.4.2 For all test productions a summarising and concluding report shall
be prepared. The report must be forwarded to the Danish Energy
Agency and the Geological Survey of Denmark and Greenland not
later than 4 months after the termination of the well. The report
shall as a minimum comprise the following information:
a) Information on the individual test productions, including
perforating pattern and interval, description of any
stimulations, or other operations performed to stabilise or
increase production.
b) A listing of measured data used for analysing the test
production.

Danish Energy Agency 31
Guidelines for Drilling – Exploration
c) A listing of non-measured parameters used in the analysis of
the test production and a documented explanation for the
choice of parameters.
d) A listing of calculated values from the test production,
including among others permeability, extrapolated pressure,
radius of investigation, and flow efficiency.
e) All type curves and plots used for analysing the test
productions indicating match point.
f) A detailed discussion of the achieved results and
interpretations hereof.
14.5 Final reporting: At the latest 6 months after the completion of a
well the following reports shall be forwarded:
14.5.1 Summarising technical/geological report (copy each for the Danish
Energy Agency and the Geological Survey of Denmark and
Greenland) at least containing:
a) Listing of the well's principal data, name, position in
geographical and Universal Transverse Mercator (UTM)
co-ordinates, drilling rig, water depth/ground level, reference
level, operator, contractor, dates of the included operations,
total time spent, and total depth of the well indicating
geological age at TD.
b) Summary of the progress of drilling operation, stating
technical problems, if any, and discussion hereof.
c) Summary of geological information obtained during the
drilling operation.
d) Listing of installed casings and results of cementing.
e) Detailed description including layout drawing of the well
status when completing the operation.
f) Composit log with main information from the well stating at
least core- and test intervals, position of casings, cement and
plugs together with lithology and selected logs.
14.5.2 One set of summary accounts for economy and for time split into
main operations shall be forwarded to the Danish Energy Agency.
14.5.3 A discussion of the results obtained, time spent, and economy
related to expectations to be forwarded in one copy to the Danish
Energy Agency.

Danish Energy Agency 32
Guidelines for Drilling – Exploration
15. Sampling and Measurements
15.1 When drilling is in progress, the Licensee shall take cuttings of all
lithologies from all geological formations penetrated. The sampling
shall commence immediately after return of the drilling fluid is
established. The interval between the samples shall not exceed 10
m. However, when drilling in formations which may contain
hydrocarbons, the intervals shall not exceed 3 m.
15.2 When preparing the drilling programme and during drilling
operations, the Licensee should aim at obtaining sidewall cores
from intervals where it is relevant, e.g. for dating of geological
horizons, determination of lithology or evaluation of the potential
reservoir or source rock. The Licensee shall carry out relevant
analyses based on the sidewall cores taken.
15.3 The Licensee - with due consideration of safety aspects - shall aim
at obtaining core information from all potentially significant hydrocarbon
bearing reservoirs. Sufficient coring shall be done to ensure
satisfactory information for the evaluation of the reservoir and the
necessary analyses shall be performed.
15.4 When preparing the drilling programme and during drilling
operations the Licensee shall see that sufficient logs are run in the
well to obtain satisfactory geologic, geophysic, hydrocarbon and
stratigraphic information from the layers penetrated.
15.5 When essential for the evaluation of the hydrocarbon potential or
whenever measurement of the formation pressure in another way
might give valuable information the Licensee shall attempt to carry
out pressure measurements and take fluid samples from relevant
penetrated horizons.
15.6 Penetrated formations with potentially important hydrocarbon
shows must - if possible - be test produced. Test production shall be
carried out in such a way that as much relevant information as
feasible is obtained concerning fluids produced, production
capacity of the formation and possibly the size of the reservoir.
When relevant for the evaluation of the hydrocarbon content and/or
production mechanism, test production shall be carried out from
water bearing zones, which may have connection to the
hydrocarbon bearing formations.