Legal framework and finance

Nordsøfonden and Nordsøenheden were established through an act of parliament passed with a broad majority in 2005.

The purpose was to establish active participation by the Danish state in Danish oil and gas licences. At the same time, it paved the way for the state to join DUC in 2012. State participation in DUC was a key element in the agreement to extend A. P. Møller’s Sole Concession in 2003. DONG A/S was already a state participant in several licences, but a decision to allow partial privatisation of the DONG organisation meant that it was no longer possible for the state to participate through this channel.

The law was amended in 2014 such that Nordsøenheden became an independent state company with its own Board of Directors. Furthermore, the law was amended in 2023 with the purpose to provide the legal basis for Nordsøfonden to participate in licences and activities related to carbon storage in Denmark. 

The framework for the business is set out in the Act concerning Nordsøenheden and Nordsøfonden, and in our articles of association. 

The purpose of state participation

The natural resources in the Danish subsoil belong to the state, and the purpose clause of the relevant act stipulates that the objective of Nordsøenheden is to generate the greatest possible value for the state by exploiting the potential of Denmark’s subsurface assets.

Nordsøfonden participates on behalf of the state as a partner with a 20 % share in all Danish oil and gas licences awarded since 2005, and Nordsøfonden is also a partner in DUC. Nordsøfonden also participates on behalf of the Danish state in all licences for carbon storage.

Nordsøfonden is to exercise active ownership of Nordsøfonden’s share in the licences, and to act as a commercial company.

Nordsøenheden is tasked with administrating Nordsøfonden, and we are involved in making key decisions under the individual licences. We participate on equal terms and with the same rights and obligations as the other commercial companies, but we cannot take on the role of operator.

Financial framework

Financing and dividend

Nordsøfonden and Nordsøenheden are financed via the revenue from the sale of Nordsøfonden’s oil and gas. The financial framework for Nordsøenheden’s administration of Nordsøfonden is set out in the Danish national budget. The two businesses publish separate accounts.

Nordsøfonden generates revenue from the sale of Nordsøfonden’s share of the oil and gas produced. This revenue is then used to cover expenses for licence activities, taxes, administration and so on.

Surplus liquidity is transferred to the Danish treasury in the form of a dividend paid annually, which means that no liquidity is built up in Nordsøfonden. As Nordsøfonden is required to pay out all surplus liquidity in the form of a dividend – irrespective of the net result for the year – Nordsøfonden will not build up significant equity over time either. It is thus possible for Nordsøfonden to register a net loss for the year at the same time as paying a dividend to the state. This deviates compared to other companies.

It also means that Nordsøfonden cannot save up liquidity in a reserve. If the need arises to finance activities that cannot be covered by Nordsøfonden’s current revenue, financing is arranged through state relending.

In the period 2012–21, Nordsøfonden has paid DKK 7.8 bill in dividends to the Danish state

Nordsøfonden has a 20 % share in all licences granted since 2005 og in DUC

Nordsøfonden generates revenue from the sale of it's share of the oil and gas produced


Nordsøfonden’s equity depends on Nordsøfonden’s net result and payment of dividend to the Danish state. This means that equity increases when the organisation generates a net profit, and that it is reduced in the event of a net loss and following the annual dividend payments.

Up until 2017, Nordsøfonden’s equity was very limited because Nordsøfonden only held shares in exploration licences. When Nordsøfonden joined DUC in 2012, however, an estimate was made of the value of DUC’s assets, which included 15 producing fields and a variety of installations and pipelines. Nordsøfonden’s equity was then increased by the valuation of its share in DUC, which had been assessed at DKK 8.8 billion.

In the period 2012–2019, Nordsøfonden has generated a total book profit of DKK 1.1 billion, but has distributed DKK 7.8 billion in dividends to the Danish state. This means that overall, Nordsøfonden’s equity has been reduced to DKK 2.1 billion at the end of 2019. The reduction in equity does not reflect the profit or loss on Nordsøfonden’s activities, it simply expresses that Nordsøfonden’s share in the value of DUC has been turned into cash that has been transferred to the Danish treasury.

The capacity of Nordsøfonden to pay its obligations is not directly linked to the size of Nordsøfonden’s equity because Nordsøfonden has access to state relending. Nordsøfonden can therefore operate with negative equity without this affecting Nordsøfonden’s capital reserve.


Nordsøfonden has to pay expenses and make investments in exploration, development and operation that correspond to its share in the licences.

Oil and gas prices have fluctuated sharply since the energy crisis of the 1970s, while investments in the oil and gas sector are often made from an extremely long-term perspective. This means that companies – and likewise Nordsøfonden – make investments defined by market-based, long-term expectations regarding future oil and gas prices, rather than on the basis of a current snapshot of the sector.

In the same way as all other businesses, oil and gas companies make investments they expect to be profitable. The state receives revenue for its coffers if the oil and gas companies earn money. If companies make investments that subsequently prove not to be profitable, the state could experience a loss. Should this be the case, Nordsøfonden will suffer losses on its 20 % share of the activity, while the other companies have to shoulder the remaining 80 % of the loss.

Expenses on decommissioning offshore facilities

When companies are granted licences to explore and produce oil and gas in the Danish part of the North Sea, these licences come with a range of obligations. By law, the companies are obliged to post security to the Danish state as a guarantee that they will fulfil these obligations, which include the safe and environmentally responsible shutting down of fields and removal of the associated facilities – also known as “decommissioning”.

Just like the other companies that participate in the licences, Nordsøfonden must pay expenses proportional to its share. This also applies to the associated decommissioning costs.

Pursuant to the Danish Subsoil Act (Undergrundsloven), all operators with installations in the North Sea are required to prepare a decommissioning plan that must be updated and approved by the Danish Energy Agency on an ongoing basis. This plan must, for example, contain a statement of the expected cost of executing the decommissioning process, and describe how the companies participating in the licence will ensure that the financial means will be available to carry out the plan.

At the time when the value of the remaining production is no longer sufficient to cover the anticipated decommissioning costs, the companies participating in the licence must post security for these costs. This security may, for example, take the form of a deposit of liquid funds, a bank guarantee or a parent company guarantee. Nordsøfonden’s share in the decommissioning costs is covered by a commitment in the national budget.

Furthermore, fulfilment of the obligation is covered by what is known as “subsidiary liability for companies”. This means that a company which withdraws from a licence remains liable for its share of the decommissioning costs as they were at the time of conveyance, if the company to which the share was conveyed is unable to fulfil its obligations.


Denmark's subsurface resources constitute a common asset and should be utilised to the benefit of Danish society