CNOOC to Search for Oil Offshore Iceland

Iceland’s oil company Eykon Energy has reportedly reached an agreement with China National Offshore Oil Company (CNOOC) to conduct joint exploration activities in the Dreki area, offshore Iceland.

Eykon applied for a license in the area last year, but has asked the authorities to be given more time to find an additional participant in the licence.

According to Vidskiptabladid, the new participant is CNOOC, which will, once the deal is official, be the largest operator in the area so far.

The newspaper on Tuesday said that CNOOC will become the operator of the licence with an 80 pct share, while Eykon will take the remaining 20 pct.

Orkustofnun, the Iceland’s National Energy Authority, has given Eykon until July 1 to complete the negotiations with “interested parties”.

After the talks have been completed, Orkustofnun will take the application for final processing.

In January this year Orkustofnun issued two licences for exploration and production of hydrocarbons in the Dreki Area.

The licences were given to Faroe Petroleum Norge AS, Branch in Iceland, Íslenskt Kolvetni ehf. (Iceland Petroleum), and Petoro Iceland on the one hand, and Valiant Petroleum ehf., Kolvetni ehf., and Petoro Iceland on the other.

The Dreki area covers 42,700 square kilometers. Water depths range mostly from 800-2000 meters, which is well within the reach of currently available and tested technology for undersea oil drilling.

The Dreki Area is a part of the Jan Mayen Ridge micro-continent, which was separated from the continental shelf of Greenland and Norway by plate tectonic movements 45-60 million years ago. 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.