Iceland

Orkustofnun, the National Energy Authority of Iceland, has awarded the country’s first offshore oil and gas exploration licenses on the Icelandic Continental Shelf (ICS).

As part of the licensing, the agency identified two blocks in the Dreki (Dragon) region in Iceland’s part of the Jan Mayen Ridge and awarded licences to two different UK-based consortiums.

Orkustofnun said the blocks on offer in the Dreki area are spread across 12,500 square miles at depths of between 2,600 and 6,600ft.

As part of the licence, the two consortiums can begin exploration and production of hydrocarbons in the Dreki area, where the presence of sedimentary rocks and an active hydrocarbon system has been observed from seabed samples.

The first licence was awarded to a consortium which included Faroe Petroleum, Iceland Petroleum and Petoro; each holding 67.5%, 7.5% and 25% interest respectively.

"The agency identified two blocks in the Dreki (Dragon) region in Iceland’s part of the Jan Mayen Ridge."

The second license was awarded to another consortium led by Valiant Petroleum, holding 56.25%. Other members of the consortum include Petoro, with a 25% stake, and Kolvetni, who hold an interest of 18.75%. Petoro Iceland, a wholly-owned subsidiary of Norwegian firm Petoro, won the ICS contract as part of a bilateral agreement signed between Iceland and Norway in 1981.

The Dreki area is part of the Norwegian island of Jan Mayen and is located between the Norwegian and Greenland continental shelves.

Only two-dimensional seismic surveys have been conducted in the area and, according to Petoro, they have not undertaken any exploration drilling so far.

The Norwegian Petroleum Directorate (NPD) was quoted by Reuters as saying that the blocks may hold about 250 million and 500 million barrels of oil. NPD also estimates that there are large gas deposits of about 100 billion standard cubic metres in the area.


Image: Iceland has awarded the country’s first offshore oil and gas exploration licenses on the Icelandic Continental Shelf (ICS). Photo courtesy of AgainErick.