• Professional News
  • 14 March 2014

Obstacles to the 7th oil and gas Licensing Round cleared

The Danish Energy Board of Appeal has dismissed complaints regarding the Danish Energy Agency’s Strategic Environmental Assessment, filed by 10 German environmental organisations. As a result, the 7th Danish oil and gas Licensing Round is approaching.

The Energy Board of Appeal has dismissed complaints filed by 10 German environmental organisations regarding the Danish Energy Agency’s Strategic Environmental Assessment covering hydrocarbon investigation and production activities as well as the injection of CO2 in existing oil fields as a means to obtain Enhanced Oil Recovery (EOR).

As a result, the 7th Danish oil and gas Licensing Round is approaching.

Please also read The 7th Danish oil and gas Licensing Round under way.

Environmental concerns
The environmental organisations’ complaints primarily pertained to concerns that the Danish Energy Agency had not fully assessed the risks involved with storage and injection of CO2 in the assessment report. According to the environmental organisations such activities involve unknown hazards to the environment and animal life.

The organisations moreover expressed concerns about the environmental impact of blowouts whereby CO2 leaks from oil wells resulting in detrimental effect on the environment.

The Decision of the Energy Board of Appeal
The Energy Board of Appeal did not find for the environmental organisations in their complaints. The Board of Appeal found that the Danish Energy Agency’s assessment of the general environmental risks associated with the injection of CO2 into existing oil fields with a view to EOR is adequate.

The Energy Board of Appeal agrees with the Danish Energy Agency that EOR in connection with CO2 injection is a known technology. Today, EOR is performed in the North Sea by means of water or natural gas and with a very high degree of safety in the handling of the natural gas and technically, there is no difference between the handling of CO2 and natural gas.

Furthermore, the Energy Board of Appeal found that, on the basis of a general assessment, only a small risk exists that blowouts of CO2 will occur. This is due to the fact that oil wells must be sufficiently sealed and that the pressure formed by the injection of CO2 will not be particularly high as the injection is made deep in the underground.

However, the Board of Appeal states that the risk is to be assessed separately and specifically in respect of each individual project in the tender.

The 7th licensing round is about to start.
The 7th licensing round was announced in 2013, but was postponed pending the decision of the Energy Board of Appeal on the complaints relating to the environmental assessment.

The report and a time schedule for the 7th licensing round were reviewed at a meeting of the committee on 13 March 2014. Once the processing of the report has been completed, the 7th licensing round may be launched.

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