During the period from 1963 to 2001, the licensees’ expenses for exploration, field developments and operations (including transportation) in respect of producing fields totalled DKK 24.0 billion, DKK 76.8 billion and DKK 45.5 billion, respectively, in 2001 prices.
A great deal of interest has been shown in the DUC companies’ earnings. Conse-quently, the Danish Energy Authority has asked the Department of Accounting and Auditing at the Copenhagen Business School to analyze and assess the DUC companies’ financial results for the Danish part of the North Sea since 1962.
Exploration Costs
The Danish Energy Authority has preliminarily estimated total exploration costs in 2001 at DKK 1.1 billion, the licences from the Fifth Round accounting for about half the total amount. The DUC companies’ exploration activity under the Sole Concession and under new licences represents a 27% share of total exploration costs in 2001.
Relative to 2000, total exploration costs rose by about DKK 0.4 billion.
The Danish Energy Authority expects the activity level in 2001, which involved the drilling of six exploration wells and nine appraisal wells, to remain high for the next three years; see the section on Exploration.The activity level is then expected to fall.
Investments in Field Developments
Total investments in field developments for 2001 have been preliminarily estimated at DKK 4 billion, representing an increase of about DKK 0.9 billion compared to E C O N O M Y
Table 8.6 Investments in Development Projects, DKK billion, 2001 Prices
2002 2003 2004 2005 2006
Ongoing and Approved
Adda – – 0.3 – –
Alma – – 0.4 – 0.2
Dan 0.7 0.5 0.1 0.2 0.2
Elly – 0.2 0.7 – –
Gorm 0.2 – – – –
Halfdan 2.5 2.1 0.7 – –
Svend 0.1 – – – –
South Arne 1.2 1.1 – – –
Tyra 0.1 0.1 0.7 0.6 0.6
Tyra Southeast 0.7 – – – –
Valdemar – – 0.1 – –
Total 5.7 4.0 3.0 0.8 1.0
Planned 1.2 1.8 0.9 0.2 0.2
Expected 6.8 5.9 3.8 1.0 1.2
Fig. 8.6 Total Costs of all Licensees, 1963-2001, DKK billion, 2001 Prices
24.0
76.8 45.5
Exploration Field Development Operations
2000. Investments in two of the DUC companies’ fields, Tyra Southeast and Halfdan, account for a large share of this increase.
The DUC companies account for more than 80% of total investments in 2001 and for about 81% of total oil production in 2001; see the section on Development and Production.
With 14 wells drilled, nine production wells and five injection wells, the Halfdan Field represents by far the largest investment in 2001; see the section on Development and Production.Other major investments included the installation of a platform in the Tyra Southeast Field and the further development of the South Arne Field.
As in 2000, the Halfdan and South Arne Fields account for more than half the total investments in field developments in 2001.
The Danish Energy Authority’s estimate of investments in field developments for future years has been written up significantly compared to the forecast made at 1 January 2001.
In 2002, field development costs are expected to total about DKK 6.8 billion, representing a DKK 2.6 billion increase over last year’s projection. This increase is largely attributable to the development of the Dan, Halfdan and South Arne Fields.
The development of these three fields accounts for more than half the total investments projected for 2002. The planned development of the Nini and Cecilie Fields plus the further development of the three above-mentioned fields has spurred the Danish Energy Authority to write up its investment forecast for 2003 by DKK 2.4 billion compared to last year’s forecast.
The projection for 2004 has been written up by DKK 3.6 billion, chiefly because a number of development projects have been postponed. For 2005 and 2006, minor changes have been made compared to last year’s forecast.
Operating and Transportation Costs
In recent years, annual operating and administration costs have ranged between DKK 1.5 billion and DKK 2.0 billion. Preliminary figures show that total operating and administration costs amounted to about DKK 2.2 billion in 2001, which corre-sponds to the level in 2000.
Total crude oil transportation costs consist of the operating costs and capital cost associated with the use of the oil pipeline from the Gorm Field to shore, as well as the 5% profit element, which is payable on the basis of the value of the crude oil transported.
Neither the Siri Field nor the South Arne Field makes use of the oil pipeline from the Gorm Field to shore, as the oil produced is conveyed through a buoy loading system and transported to shore by tanker. The two fields are exempt from the obligation to use the oil pipeline, but must instead pay a compensatory fee con-stituting 5% of the production value of the oil.
Fig. 8.7 illustrates the Danish Energy Authority’s expected development in operating, transportation and investment costs for the years to come.
E C O N O M Y
Investments Transportation
Operations bn. DKK
Fig. 8.7 Investments in Fields, and Operating
04
02 03 06
9
6
3
0 12
05
and Oil Transportation Costs, 2001 Prices
In 2001, the Danish Act on Certain Offshore Installations was amended, and two new Executive Orders based on this Act were introduced. The main content of the new provisions introduced is described in more detail below.
A right for employees to leave their workplace in case of serious and imminent danger
Act No. 331 of 16 May 2001 to Amend the Working Environment Act and the Act on Certain Offshore Installations.
The Act on Certain Offshore Installations was amended in 2001, for one thing to improve employees’ legal rights in situations where they are placed at a disadvan-tage, possibly in the form of dismissal, because serious and imminent danger causes them to leave their workplace. This amendment makes it possible to award compensation to employees who are placed at a disadvantage in such situ-ations. Thus, this statutory amendment concerns the legal relationship between employer and employees.
This Amendment Act implements provisions in Directive 89/391/EEC (the Framework Directive). For technical reasons, the Minister for Labour introduced the amendment together with an amendment to the Working Environment Act, such that sections 17a, 17b and 17c of the Working Environment Act apply to installations comprised by the Act on Certain Offshore Installations.
Chemical Agents
Executive Order No. 737 of 14 August 2001 on Substances and Materials at Work on Offshore Installations.
This Executive Order implements Directive 98/24/EC on chemical agents in the offshore area, and includes provisions on
• specific assessment of health and safety at work involving hazardous chemicals;
• substitution, to ensure that hazardous substances and materials are removed or substituted with non-dangerous or less dangerous chemicals;
• a right for employees to undergo health surveillance where an assessment reveals that they have been exposed to dangerous chemicals, and
• rules regulating work with epoxy etc., and code-numbered products.
This Executive Order affords employees working offshore the same level of pro-tection against hazardous substances and materials as employees working onshore, with due regard being paid to the special working conditions prevailing offshore.
The new Executive Order replaces the Executive Order from 1996 on Substances and Materials Used on Offshore Installations and the Executive Order from 2000 on Paintwork etc. on Offshore Installations.
S T A T U T E S A N D E X E C U T I V E O R D E R S
9. STATUTES AND EXECUTIVE ORDERS
Limit Values for Substances and Materials
Executive Order No. 1029 of 12 December 2001 on Limit Values for Substances and Materials Used on Offshore Installations.
In continuation of the above-mentioned Directive on chemical agents, the Directive on limit values was amended in order to bring the list of limit values into accordance with the new provisions in the Directive on the Protection of the Health and Safety of Workers from the Risks related to Chemical Agents at Work.
The new Executive Order on Limit Values implements Directive 2000/39/EC on Establishing a First List of Indicative Occupational Exposure Limit Values in the offshore area.
The Executive Order replaces the Executive Order from 1994 on Limit Values for Substances and Materials on Offshore Installations.
NEW RULES AND REGULATIONS IN THE FIRST QUARTER OF 2002