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License to drill

Minister of Petroleum and Energy Ola Borten Moe can now add Iceland to the list over countries where Norway is involved in petroleum activities (Foto: HSI/OED)

Iceland takes the first step into the oil age. Norway is granted parts of the first licenses for exploration and production of hydrocarbons in Icelandic waters.

Location

Petoro Iceland AS, daughter company of Norwegian state oil company Petoro, has been granted two licenses in the area between Iceland and Jan Mayen.  

This will be the first oil exploration in Icelandic waters. 

“The waters between Iceland and Jan Mayen can contain significant reserves of oil and gas”, Minister of Petroleum and Energy Ola Borten Moe said after the signing in Reykjavik. “Iceland is now giving its first licenses, and Norway has a part in two of them. Participation in the two development licenses gives us the possibility to take part in exploration of an exciting area which can contain large values”, he added, the ministry’s web site reads.

One license was granted to Faroe Petroleum Norge AS as an operator with 67,5 percent share, Íslenskt Kolvetni with 7,5 percent share and Petoro Iceland with 25 percent share. The other license is to Valiant Petroleum as an operator with 56,25  percent share, Kolvetni with 18,75  percent share og Petoro Iceland AS with 25  percent share, Arctic Portal writes.

Norway and Iceland in 1981 concluded an agreement on the continental shelf between Iceland and Jan Mayen. The agreement delimitates the shelf between the two countries and established a special cooperation within petroleum activities in a defined border area between Norway and Iceland. The agreement states that Noway has the right to have a 25 percent share in petroleum activities in the part of the cooperation area that belongs to Iceland.

The first rig in the area is expected in 2017 or 2018, likely to be deployed in the Norwegian side at first.

In March 2011 Norway’s Ministry of Petroleum and Energy announced that 180 million NOK will be spent on oil and gas mapping of the Jan Mayen waters in the period 2012-2014. An extensive program of acquisition of 2D seismic around the island was concluded in August 2012.