Iceland plans to set up a national wealth fund to safeguard revenue from potential oil discoveries as it opens up the island nation to exploration, President Olafur R. Grimsson said.
Faroe Petroleum Plc (FPM), Valiant Petroleum Plc (VPP) and Petoro AS will be the first foreign explorers to search Icelandic waters for oil and gas. They are betting that the geology matches that of the Shetland Islands, where BP Plc and Total SA are drilling, according to Faroe.
“Since we look at this resource as a national wealth, there will be a national wealth fund that would be established, but this is more of a general policy at this time,” Grimsson said in an interview in London this week. Explorers “have to do their work. It will take some years.”
Iceland’s $14 billion economy will get a boost from any oil discoveries as it recovers from the 2008 banking meltdown that plunged the nation into its worst recession in six decades.
It plans to cooperate with the member states of the Arctic Council to prevent oil spills in the North Atlantic and share equipment and technology for search and rescue operations.
Future oil industry regulations will be “within the framework of the Nordic as well as European cooperation,” Grimsson said. They will be modeled on Iceland’s geothermal and hydropower industry, he said.
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