National governments have control over the oil and gas in their territories. They determine the areas in which companies can search for and produce these resources. When granting licenses for these areas, they must follow a set of common EU rules to ensure fair competition.
The licensing rules for oil and gas are set out in the EU's Prospection, Exploration, and Production of Hydrocarbon Directive (94/22/EC)):
- at least 90 days before the application deadline for a new license, an EU country must publish all relevant information about the license in the Official Journal of the European Union
- licensing must be open to all interested companies and EU countries must grant licenses in a fair, competitive, and unbiased way. Companies from outside the EU can also apply if the country they come from allows EU companies to compete for licenses in its territory
- when granting licenses, EU countries can take into account issues such as national security, public safety, public health, security of transport, the protection of the environment, the protection of biological resources, or the planned management of hydrocarbon resources
- initially, EU countries were required to provide an annual report on the reserves available in their territories, the geographical areas they have opened to exploration, the licenses they have granted, and the companies holding these licenses. This obligation has been waived by the Regulation on the Governance of the Energy Union . As part of an effort to reduce administrative burdens by integrating and streamlining most energy and climate planning and reporting requirements of EU countries.