Participation in the DUC

In June 2005 all parties in the Danish Parliament, except for the Danish Red-Green Alliance, adopted the Act on establishing the Danish North Sea Fund and the Danish North Sea Partner.

The basis for establishing the Fund and the Partner was the partial privatisation of DONG, preventing DONG from state participation in new Danish licences for oil and gas exploration. In September 2003, the Government also made an agreement with A.P. Møller-Mærsk (the North Sea Agreement) on a 30-year extension of the sole concession up until 8 July 2042. Part of the agreement is that, without payment from and including 9 July 2012 (the sole concession from 1962 expires on 8 July 2012), the state will participate in the Danish Underground Consortium (DUC), with a 20% ownership interest. A prerequisite for the agreement is that state participation in 2012 is managed by a new state entity.
 
This means that the state share is owned by a public fund; the Danish North Sea Fund. The Danish North Sea Fund has no board of directors or employees but pays costs linked directly to the state participation, and the Fund receives revenue deriving from sales of the Fund’s share of oil and gas production. Until the Fund has sufficient revenues, costs will be covered through state relending. However, costs for the operation of the Danish North Sea Partner are financed by the annual appropriation acts passed by the Danish Parliament.

The Danish North Sea Partner is a state entity that acts on behalf of the Danish North Sea Fund. The Partner is building an organisation which, on a qualified basis and in addition to participating in current licences, can administer the state takeover of a 20% share in the DUC. Among other things, this demands supplying the Partner with further technical skills as well as a variety of commercial skills in order to obtain the best possible proceeds from a considerable oil and gas production.