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DOCUMENTS "COM"
COM(74)1962
Vol.1974/0317

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COMMISSION OFTHEEUROPEAN COMMUNITIES
COM(74)1962 final
Brussels ,27november 197^
PROPOSED COUNCIL REGULETION (ESC )
Concerning support tocommon projects
forhydrocarbon exploration
(submitted totheCouncil bytheCommission )
C0M(7*O 1962 final

STATIST OPREASOUS
ι
1.InitsResolution of17September 1974 onthenewstrategy forenergy policy
fortheCommunity (Docr/239*' (KIISR 45)of19»9«74 )theCouncil affirmed
itspolitical will toprepare and "bring about aCommunity energy policy .It
hasadopted aseries ofguidelines concerning energy supply .Therecourse
toCommunity hydrocarbons figures largely inthese guidelines inorder to
strengthen th;esecurity ofitsenergy supply . •'
•2.TheCommunity hasalready ,inthis context ,afirst operational instrument
established byCouncil Regulation (J5'2C)Ho3056/73of9Novcrpber 1973 on
1support forCommunity projects in .thehydrocarbons sector .Conforming to
theproposals ofthis Regulation ,which foresees Community support for
technological development andtransport activities inthehydrocarbons field ,
theCommission hasalready sent totheCouncil aproposal onthefirst group
of23projects presented bycompanies established largely intheMember States
(I)ocCOM(74)090final of26.7.1974 ).
j.
3.Following thechanges ontheworld oilmarket ,thedevelopment .ofnewundersea
resources assumes particular interest totheCommunity .Thesupport provided
totheCommunity projects already allows theacceleration ofthedevelopment
ofthenecessary techniques ,butfinancial participation must also be
envisaged forcertain operations which industry ,because oftherisks
involved ,cannot undertake alone . ,
4»Theinvestments necessary forthedevelopment ofthese newresources will be
considerable findessentially thefinancial burden will fall ontheoilindustry
Thefinancial support which theCommunity foresees mayonly beofacomplement a:
nature ,andtothis end ,itisproposed that Community participation belimited
tocnequarter ofthesums involved ,andonly apply toexploration operations
presenting aprime interest totheCommunity andbearing ontheparticular
risks which ,atthepresent time ,relate tosea^-watcr atdepths greater than
100m.,orwhere climatic ormeteorological conditions areparticularly
difficult (liorth oftheGoth .parallel ). . •
-10JI/oL312/1cf13.11.1973

<–2–
5.ToniakethisCommunitysupporttotallyefficv^rit,itshould,beplaced
inthefraneworisofanrultiannual vexploration programme,withinvrhichall
theoperationssupportedbytheCommunityareintegrated .Thecompanies
participating intheachievementofthisprogrammeshallagreetoexchange
thoinformation ontheresultsobtainedandcooperateinthetechnicalplan
toguarantee'anoptimaldevelopmentoftheareas'openedbythisprogramme.
6.Finally,Communityinterventionshallceasewhenanydepositsarediscovered ,
andjudgedexploitable anditv/illthenbeuptothecompaniestobesolely
responsiblefor"theinvestment "costsofproduction.Inthiseventuality ,
thesumsloanedbytheCommunitywillbowhollyrepayed,withinterest.
r:
•*'«

PROPPED REGULATION (E?C )OFTHECOUNCIL
' ■'
ooncflrair ?.? -thosupport for Community projects for hydrocarbon exploration .
The Council oftheEuropean Communities .
$
 
Having regard totheTreaty instituting theEuropean Economic Community and .
particularly Article 235 1
•• *
Having regard totheproposal oftheCommission ,
II
Having regard totheopinion oftheEuropean Parliament ,
Having regard totheopinion oftheEconomic and Social Committee ,
' -
whereas theestablishment ofaCommunity energy policy isone°of -the
objectives assigned totheCommunity ;whereas theCouncil byitsResolution
of17September 1974 onthenewenergy policy strategy fortheCommunity ,
affirmed itspolitical will toelaborate and setinmotion aCommunity energy
policy ;
whereas theencouragement ofexploration projects^av:''n^afundamental interest
forthesecurity ofhydrocarbon supply ofthoCommunity constitutes one
means ofachieving this policy ; ' .
Y/hercas thehydrocarbon supply difficultie.3 caused bytheinternational
situation demand that ^complementary totechnological development activities
directly linked tothefunctions ofexploration ,exploitation ,stocks kk:!or
transport inthehydrocarbon "fielcfe which arealready theobject ofCommunity
support inconformity with Council Regulation (Eftc)No3056 of9November ;1973 1
specific \jfforts Should boxmdertaken intitshydrocarbon exploration itself ;
•Λ
OJNoL312/1of13November -1973
(
*

-2-
whereasitisfortheoilindustrytoassumeinthefirstplacethe
financingofsuchactivities ;whereasbecauseofthehighrisksandthe
considerable investmentimplied,theCommunityshouldnevertheless
contemplatethepossibility ofgivingthemsomefinancingsupport;
whereassupportforagivenprojectwouldberepayableintheeventofthe
commercialsuccessoftheproject;
whereas,forthissupporttobemostefficacious ,itshouldbewithinthe
frameworkofathree-yearprogrammeofexplorationinwhichallthe
operationssupportedbytheCommunityshouldbegatheredtogether;
whereastheenterprisesparticipating inthisprogrammeshouldagreeto
exchangeinformation ontheresultstheyobtainandtocooperateonthe
*
technicallevelGOastoguaranteeoptimumdeveloninentintheregionscovered
* *
bytheexploration prograînme :
whereasthegrantingbytheCommunityoftheseadvantageswouldconformto
therequirement ?,oftheTreatyconcerningcompetition ;
whereasby.reasonofthenecessityoflimitingsuchsupporttowhat
strictlyindispensible theCommunityshouldhaveatitsdisposalallthose
moanswhichwillallowittoweightheadvantageswhichwillresultfrom
suchprojectsandtheirconformitywiththeobjectivesofthecommonenergyz-o
whereasthesupportshouldnotexceed25/'oftheforecastcostofthe
projectfortheperiodinwhichthesupportisgranted;whereasthe
geographical zoneswithinwhichthoseactivitieswilltakeplacewillbeVJSII
!Idefined: * -
••
whereastheimportanceofthesupportwhichmightbograntedtoproject:?,'
""uhoulibe'afunctionoftheircontribution totheCommunitysupplyandof
the.risksinherentindifficultiesof'atechnicalclimaticormeteorological
order;
whereasthespecificallyinternational natureofthestructureandthe
activitiesoffirmsworkinginthehydrocarbonsectorju.ntif'ydirect
communication totheCommissionofproposalsforCommunityprojects;
"'v.' '•/•■'

f
whereas thepowers foraotion required forthedevelopment ofthis regime
were notforeseen bytheTreaty ;.
}IASADOPTED TTE3PRESENT REOUI /ATIOlf : '*
»
Article 1
•• I
TheCommunity ,under theconditions foreseen int,heArticles hereunder ,may
p.ve itssupport ,where essential ,fortheachievement ofhydrocarbon
exploration projects which present aprime interest forthesecurity ofits
hydrocarbons supply . - . +
• • "•« *
* * •
Projects eligible tobenefit fi'om theCommunity support must bebased inthe
ideographic areas defined intheannex tothepresent Regulation andtake the
form ofcooperation between several Community companies .
,Article 2
' * »i«iw *
ft »
».
Allprojects murt concern hydrocarbon exploration activities which contain
thefollowing tank :;: .'
>-exploration drilling ofstrata ;
'-a maximum oftwotent bores todetermine theimportance and
profitability ofthedeposit .
•Seismic prospecting may not'benefit from Community support except inthe ;
/*- . - •cases where there 1hadbeen preliminary examinations which hadgiven promising
* ι. ,
results , •
Article 3
Theresponsibility foreach oftheprojects must devolue upon anatural ora
le^al person constituted inaccordance with thelaws inforce intheMember
States oftheCommunity . • -
Ifthecreation ofalesral entity toundertake aproject involves additional
costs fortheparticipating firms ,fcuch aproject maybecarried_out bysimple
exoneration between natural orlegal oersonr ,, Inthis case ,these persons
y;
f:hall bejointly andseverally liable for thfeobligations resulting from
Corrsunity sunport .

5.
ι
i
•«
Article4
ThesupportgrantedtoaprojectmaytaketheformofComnnmityfinancing
ofthisproject'aspartoftheappropriations madeforthispurposein
thegeneralComntinily "budget,talcingintoaccountejiyotherCommunity
financialintervention fromirhichthisprojectmay"benefit,especially "by
theEuropean'InvestmentBank,"byasubsidyrepayableintheeventofthe
I
commercialsuccessoftheproject.Acommercialsuccessisconsideredto
bethediscoveryofadepositthesizeandqualityofwhichpresent
sufficient-guaranteesofprofitability . ^
ThesupportBiajnotexceedPJjfoofthecostcftheprojectenvisagedforthe
periodduringwhichthesupportisgranted.~■
Artici«5
1.Eachprojectshall "besubmittedforexaminationtotheCommission,who
willconsulttheMemberStates. • v
2.TheCommissionshallforwardtotheCouncil,togetherwithitsreasoned
•'opinion,areportontheschemeasav.'hole.
■»·
Thisreportshallgive:... ■
~adetaileddescriptionoftheprojectandmostparticularlythedrilling
« 1 ' ~^•4« • -
programme ;
•–indicationsoftheprobablepresenceofhydrocarbonsintheareaoi
explorationaswellastheresultsofthegeophysicalstudies;
thenatureandextentoftherisksinvolvedintheprojectandits
estimatedprofitability ;•
i–thecostoftheprojectandthefinancialmethodsforcarryingitou*;
«–allotherfactorswhichjustifytheimportanceofthesupportproposed
bytheCommissionforthisproject; -
theimportanceoftheprojectforthe.securityoftheCorru-nunity's
hydrocarbons supply.

–the'financialritual;ionendthetechnicalcapacityof
0
thoseresponsiblefortheproject.
-themeasuresofsupportforecastoranticipated ,bytheMember
.countriesfortheachievement oftheproject
I
-thepossiblesupportfrom.theEuropeanInvestmentBank.
TheCouncilcanasktheCommissionforsuchadditionalinformation as
itjudgesnecessary. .■.'
i •**
Article6
TheCouncilwilldecideunanimously ontheproposalbytheCommission on
athreeyearprogrammeofexploration chosenfromamongtheprojects
presented.' underArticle[5andwill-allocatefinancialsupportto
differentprojectsaccordingtotheiranticipatedcontribution tothe.
supplyoftheCommunityaridtheinherentrisksfromdifficulties of
atechnical,climcvticormeteorological kindlinkedwiththeirachievement .
ThecompanieswhichbenefitfromCommunitysupportwithintheframework
oftheexploration programmeenvisagedintheprecedingparagraphshouldbind
themselvestoexchangeinformation ontheresults'thattheyobtainandto
'V -co-opejrateonthetechnicallevelin/trvjertoguaranteeanoptimumdevelopment
intheregionscoveredbythese"programmes.Detailsoftheexchangeof
informationandco-operationwillbedefinedbytheCommission.
TheCommissionwillarrangetheneccs~s.ryconsultation procedureswiththe
companiesparticipating intheprogramme.
Article7
TheadvantagesaccordedbythfcCommunityshouldnotmodifyconditionsof
competitioninawaythat'isincoDratiblewiththerequirement!oftheTreaty.

M©L»^ • r
·.· I
Article8
» 'm
Thoseresponsiblefor"'carryingoutaproject *»-
whichisreceivingCommunitysupportwillreportannuallyto
theCommission ontheprogressoftheworkinhandand.onthe
exoenseoincurredinitsexecution.
/*^ - I
,. I
TheCommission'srepresentatives willhaveaccessatanytimeto
technicalaridfinancialdocumentsrelatingtotheproject.
•Article -9 • *
Informationreceivedthroughtheapplicationofthepresentregulation
will"betreatedconfidentially .
Article10
TheCommissionwillreportannuallytotheEuropeanParliamentand
to..theCouncilontheprogrammeofexploration andontheprogress
madeoneachproject. '
1.Article11
**
Thepresentregulationshallcomeinto,forc^onthedayfollowingthat/*" ~
inwhichitappearsintheOfficialJournaloftheEuropeanCommunities.
Thepresentregulation .>shall"bebindinginitsentiretyanddirectly
applicableinallMemberStates.
DoneinBruxelles,

TheCommunityprojectsforexploration ofhydrocarbons whichcan
"benefitfromCommunitysupportmustbecarriedoutintheterritorial
watersofl-emberStatesorinadjacentzonesnotsubjecttosovereignty
wherethedepthofwaterexceeds100morwithoutlimitatifinofdepth
"beyondthe60°Ifparalleland"between20°Eand70°W.