CELEX: 51974PC1962
Language: en
Date: 1974-11-27
Title: PROPOSED COUNCIL REGULETION (ESC) Concerning support to common projects for hydrocarbon exploration (submitted to the Council by the Commission)

ARCHIVES HISTORIQUES
DE LA COMMISSION
COLLECTION RELIEE DES
DOCUMENTS "COM"
COM (74) 1962
Vol. 1974/0317
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 ---pagebreak---       COMMISSION OF THE EUROPEAN COMMUNITIES
                                                    COM(74)1962 final
                                              Brussels , 27 november 197 ^
                        PROPOSED COUNCIL REGULETION ( ESC )
                      Concerning support to common projects
                            for hydrocarbon exploration
                   ( submitted to the Council by the Commission )
C0M(7*O 1962 final
 ---pagebreak---                                         STATIST OP REASOUS
                                              ι
    1 . In its Resolution of 17 September 1974 on the new strategy for energy policy
         for the Community ( Doc r/239*' (KIISR 45 ) of 19»9«74 ) the Council affirmed
         its political will to prepare and "bring about a Community energy policy .        It
        has adopted a series of guidelines concerning energy supply.            The recourse
        to Community hydrocarbons figures largely in these guidelines in order to
        strengthen th;e security of its energy supply.          •'
• 2 . The Community has already , in this context , a first operational instrument
        established by Council Regulation (J5'2C ) Ho 3056/73 of 9 Novcrpber 1973 on
                                                                         1
        support for Community projects in . the hydrocarbons sector .          Conforming to
        the proposals of this Regulation , which foresees Community support for
        technological development and transport activities in the hydrocarbons field,
        the Commission has already sent to the Council a proposal on the first group
        of 23 projects presented by companies established largely in the Member States
        ( I)oc COM( 74 ) 090 final of 26.7.1974 ).
                                                     j.
   3 . Following the changes on the world oil market , the development . of new undersea
        resources assumes particular interest to the Community.            The support provided
        to the Community projects already allows the acceleration of the development
        of the necessary techniques , but financial participation must also be
        envisaged for certain operations which industry, because of the risks
        involved , cannot undertake alone .                                            ,
  4 » The investments necessary for the development of these new resources will be
       considerable find essentially the financial burden will fall on the oil industry
       The financial support which the Community foresees may only be of a complement a:
       nature , and to this end , it is proposed that Community participation be limited
       to cne quarter of the sums involved, and only apply to exploration operations
       presenting a prime interest to the Community and bearing on the particular
       risks which , at the present time , relate to sea^-watcr at depths greater than
       100 m . , or where climatic or meteorological conditions are particularly
       difficult (liorth of the Goth . parallel ) .                    .         •
 -1 0J I/o L 312/1 cf 13.11.1973
 ---pagebreak---                                     <–2–
5 . To niake this Community support totally efficv^rit , it should, be placed
    in the franeworis of a nrultiannual v exploration programme , within vrhich all
    the operations supported by the Community are integrated .      The companies
    participating in the achievement of this programme shall agree to exchange
    tho information on the results obtained and cooperate in the technical plan
    to guarantee 'an optimal development of the areas' opened by this programme .
6. Finally, Community intervention shall cease when any deposits are discovered,
    and judged exploitable and it v/ill then be up to the companies to be solely
    responsible for "the investment " costs of production .  In this eventuality ,
    the sums loaned by the Community will bo wholly repayed, with interest .
                                                r:
                                            • *' «
 ---pagebreak---                           PROPPED REGULATION ( E?C ) OF THE COUNCIL
                                      '                          ■ '
 ooncflrair?.? -tho support for Community projects for hydrocarbon exploration .
 The Council of the European Communities .
                                                                                 $
 Having regard to the Treaty instituting the European Economic Community and.
particularly Article 235 1
                     ••          *
Having regard to the proposal of the Commission ,
                                                        II
Having regard to the opinion of the European Parliament ,
Having regard to the opinion of the Economic and Social Committee ,
         '                                                   -
whereas the establishment of a Community energy policy is one °of -the
objectives assigned to the Community ; whereas the Council by its Resolution
of 17 September 1974 on the new energy policy strategy for the Community ,
affirmed its political will to elaborate and set in motion a Community energy
policy ;
whereas the encouragement of exploration projects^av:' n^a fundamental interest
for the security of hydrocarbon supply of tho Community constitutes one
means of achieving this policy;                       '              .
Y /hercas the hydrocarbon supply difficultie.3 caused by the international
situation demand that^ complementary to technological development activities
directly linked to the functions of exploration , exploitation , stocks kk :! or
transport in the hydrocarbon "fielcfe which are already the object of Community
support in conformity with Council Regulation (Eftc ) No 3056 of 9 November; 1973 1
specific \jfforts Should bo xmdertaken in tits hydrocarbon exploration itself ;
                                                                         •Λ
   OJ No L 312/1 of 13 November - 1973
                                                 (
                                                 *
 ---pagebreak---                                    -2-
   whereas it is for the oil industry to assume in the first place the
   financing of such activities ;     whereas because of the high risks and the
   considerable investment implied , the Community should nevertheless
   contemplate the possibility of giving them some financing support ;
   whereas support for a given project would be repayable in the event of the
   commercial success of the project ;
   whereas , for this support to be most efficacious , it should be within the
   framework of a three-year programme of exploration in which all the
   operations supported by the Community should be gathered together ;
   whereas the enterprises participating in this programme should agree to
   exchange information on the results they obtain and to cooperate on the
                                                                    *
   technical level GO as to guarantee optimum develoninent in the regions covered
                     *                 *
   by the exploration prograînme :
   whereas the granting by the Community of these advantages would conform to
   the requirement ?, of the Treaty concerning competition ;
  whereas by .reason of the necessity of limiting such support to what
   strictly indispensible the Community should have at its disposal all those
  moans which will allow it to weigh the advantages which will result from
   such projects and their conformity with the objectives of the common energy z-o
     whereas      the support should not exceed 25/' of the forecast cost of the
  project for the period in which the support is granted ;       whereas the
  geographical zones within which those activities will take place will be VJSII
                           ! I
  defined :                          *                                        -
  ••
  whereas the importance of the support which might bo granted to project:?,'
""uhoulibe'a function of their contribution to the Community supply and of
  the . risks inherent in difficulties of' a technical climatic or meteorological
  order ;
 whereas the specifically international nature of the structure and the
  activities of firms working in the hydrocarbon sector ju.ntif'y direct
  communication to the Commission of proposals for Community projects ;
                                 " 'v .          '                        ' •/• ■'
 ---pagebreak---                                              f
    whereas the powers for aotion required for the development of this regime
   were not foreseen by the Treaty;.
   }IAS ADOPTED TTE3 PRESENT REOUI/ATIOlf :                             '*
                                                                        »
                                       Article 1
                  ••                                               I
   The Community , under the conditions foreseen in t,he Articles hereunder , may
   p.ve its support , where essential , for the achievement of hydrocarbon
   exploration projects which present a prime interest for the security of its
   hydrocarbons supply.                                                  - .  +
                      •                 •                                           "•
                                        «                                             *
                              *                                *                         •
   Projects eligible to benefit fi'om the Community support must be based in the
   ideographic areas defined in the annex to the present Regulation and take the
   form of cooperation between several Community companies .
 '
                                     , Article 2
                                     * » i« i w                                           *
                        ft         »
                                                  ».
   All projects murt concern hydrocarbon exploration activities which contain
   the following tank :;:                                     . '
        >- exploration drilling of strata ;
        '-a maximum of two tent bores to determine the importance and
           profitability of the deposit .
• Seismic prospecting may not' benefit from Community support except in the ;
                                                     /*- .                                  - •
   cases where there1 had been preliminary examinations which had given promising
             *       ι.          ,
   results ,                                                                      •
                                       Article 3
  The responsibility for each of the projects must devolue upon a natural or a
  le^al person constituted in accordance with the laws in force in the Member
   States of the Community.                     •                     -
  If the creation of a lesral entity to undertake a project involves additional
  costs for the participating firms , fcuch a project may be carried_out by simple
  exoneration between natural or legal oersonr,,                  In this case , these persons
                                                          y ;
   f:hall be jointly and severally liable for thfe obligations resulting from
  Corrsunity sunport .
 ---pagebreak---                   5.
                  ι
                                       i
                                  • «
                                      Article 4
   The support granted to a project may take the form of Comnnmity financing
   of this pro ject 'as part of the appropriations made for this purpose in
   the general Comntinily "budget , talcing into account ejiy other Community
   financial intervention from irhich this project may "benefit , especially "by
   the European' Investment Bank , "by a subsidy repayable in the event of the
                                                          I
   commercial success of the project .        A commercial success is considered to
   be the discovery of a deposit the size and quality of which present
   sufficient -guarantees of profitability.                          ^
  The support Biaj not exceed PJjfo of the cost cf the
  period during which the support is granted.           ~ ■
                                                            project envisaged for the
                                      Artici « 5
   1 . Each project shall "be submitted for examination to the Commission , who
        will consult the Member States .                •              v
   2 . The Commission shall forward to the Council , together with its reasoned
•'      opinion , a report on the scheme as a v.'hole .
                           ■» ·
        This report shall give : ...                             ■
        ~ a detailed description of the project and most particularly the drilling
               «        1       '     ~     ^ • 4
             «        •                   -
          programme ;
       •– indications of the probable presence of hydrocarbons in the area oi
          exploration as well as the results of the geophysical studies ;
          the nature and extent of the risks involved in the project and its
          estimated profitability ;     •
       i– the cost of the project and the financial methods for carrying it ou *;
       «– all other factors which justify the importance of the support proposed
          by the Commission for this project ;                             -
          the importance of the project for the . security of the Corru-nunity' s
          hydrocarbons supply.
 ---pagebreak---    –  the' financial ritual; ion end the technical capacity of
                                                            0
         those responsible for the project .
   -  the measures of support forecast or anticipated, by the Member
.     countries for the achievement of the project
                                                       I
   -  the possible support from. the European Investment Bank .
   The Council can ask the Commission for such additional information as
   it judges necessary .                       .   ■ .   '
                                  i                                        •**
                              Article 6
   The Council will decide unanimously on the proposal by the Commission on
  a three year programme of exploration chosen from among the projects
  presented.'   under Article [5 and will- allocate financial support to
  different projects according to their anticipated contribution to the .
  supply of the Community arid the inherent risks from difficulties of
  a technical , climcvtic or meteorological kind linked with their achievement .
  The companies which benefit from Community support within the framework
  of the exploration programme envisaged in the preceding paragraph should bind
  themselves to exchange information on the results 'that they obtain and to
                                                 ' V                           -
  co-opejrate on the technical level in /trvjer to guarantee an optimum development
  in the regions covered by these" programmes .      Details of the exchange of
 information and co-operation will be defined by the Commission .
  The Commission will arrange the neccs~s.ry consultation procedures with the
  companies participating in the programme .
                             Article 7
  The advantages accorded by thfc Community should not modify conditions of
  competition in a way that' is incoDratible with the requirement ! of the Treaty .
 ---pagebreak---                      · .    ·
                               M © L»    ^    I
                                                 •             r
                              Article 8
                  »                                    'm
Those responsible for "'carrying out a project          *» -
which is receiving Community support will report annually to
the Commission on the progress of the work in hand and. on the
exoenseo incurred in its execution .
          / *   ^                          -         I
                                   , .             I
The Commission 's representatives will have access at any time to
technical arid financial documents relating to the project .
                           • Article - 9                •        *
Information received through the application of the present regulation
will "be treated confidentially .
                              Article 10
The Commission will report annually to the European Parliament and
to. . the Council on the programme of exploration and on the progress
made on each project .                                       '
            1 .               Article 11
                    *    *
The present regulation shall come into, forc^ on the day following that
                                             /*"                      ~
in which it appears in the Official Journal of the European Communities .
The present regulation .> shall "be binding in its entirety and directly
applicable in all Member States .
Done in Bruxelles ,
 ---pagebreak--- The Community projects for exploration of hydrocarbons which can
"benefit from Community support must be carried out in the territorial
waters of l-ember States or in adjacent zones not subject to sovereignty
where the depth of water exceeds 100 m or without limitatifin of depth
"beyond the 60°If parallel and "between 20°E and 70°W .