Bloomberg News

Iceland Announces Start of Second Oil Exploration License Round

October 03, 2011

Oct. 3 (Bloomberg) -- Iceland’s National Energy Authority announced the start of its second round for oil and natural gas exploration licenses in the Dreki Area off the island’s northeastern coast.

The deadline for applications is April 2, the Reykjavik- based agency said today in a statement.

“Seismic surveys and other geophysical measurements indicate that oil and gas could be found in the Dreki Area as they have been in adjacent and geologically similar areas,” the authority said. “Further research, including exploratory drilling, is necessary to verify whether oil or gas exists in the Dreki Area.”

The first licensing round for exploration was derailed in 2009, when four companies pulled out. The country has offered blocks in a 42,700 square kilometer (16,500 square mile) area, partially in Icelandic territorial waters and partially in Norwegian waters. Each country is entitled to a 25 percent stake in discoveries made in the other’s section.

Oil and gas producers have been seeking untapped reserves in the world’s northernmost regions as deposits in more hospitable climates mature and governments restrict access. The Arctic may hold 90 billion barrels of oil, more than the combined known reserves of Nigeria, Kazakhstan and Mexico, the U.S. Geological Survey said in 2008.

--Editor: Jonas Bergman, Tasneem Brogger

To contact the reporter on this story: Omar R. Valdimarsson in Reykjavik valdimarsson@bloomberg.net.

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net


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