Iceland opens first-ever offshore licensing round

The National Energy Authority of Iceland (NEA), by the authority of the Ministry of Industry, Energy, and Tourism, has announced the first licensing round for hydrocarbon exploration and production licenses on the Dreki area.

Offshore staff

REYKJAVIK -- The National Energy Authority of Iceland (NEA), by the authority of the Ministry of Industry, Energy, and Tourism, has announced the first licensing round for hydrocarbon exploration and production licenses on the Dreki area.

In the Atlantic Ocean, the Dreki area, translated "Dragon" area, is northeast of Iceland on the Jan Mayen Ridge, between Iceland and the island of Jan Mayen. With water depths ranging from 3,280 to 6,562 ft (1,000 to 2,000 m), the area up for bid covers more than 10.5 million acres (42,700 sq km).

In December 2007, the Icelandic government approved a proposal to offer exploration and production licenses offshore Iceland in the Dreki area.

Individual applications for licenses may cover one or more of the blocks or part of blocks, up to a maximum of 800 sq km (309 sq mi). A maximum of five licenses are up for offer. Applicants are also encouraged to nominate a secondary area in case of an area of first choice overlapping with other applications.

The exploration and production licenses included in the round are:

• IS6706/1 (part), 4 (part), 5 (part), 7, 8 (part), 10, 11 (part), 12 (part)
• IS6707/1, 2, 3 (part), 4, 5, 6, 7, 8, 9, 10, 11, 12
• IS6708/1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12
• IS6709/1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12
• IS6710/1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12
• IS6711/2 (part), 3, 5 (part), 6, 8 (part), 9, 11 (part), 12
• IS6807/4 (part), 7 (part), 8 (part), 10, 11 (part), 12 (part)
• IS6808/1 (part), 2 (part), 4, 5 (part), 6 (part), 7, 8, 9, 10, 11, 12
• IS6809/1, 2, 3 (part), 4, 5, 6, 7, 8, 9, 10, 11, 12
• IS6810/1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12
• IS6811/2 (part), 3, 5 (part), 6, 8 (part), 9, 11 (part), 12
• IS6909/10 (part), 11 (part), 12 (part)
• IS6910/7 (part), 8 (part), 9 (part), 10, 11, 12 (part)
• IS6911/8 (part), 9 (part), 11 (part), 12

The terms of the licensing include an initial 12-year exploration permit, with a potential 4-year extension; and once a field has been discovered and appraised, production licenses are available for 30 years.

Two major 2D seismic surveys have been put up for sale on the area. One is the Norwegian-Icelandic governmental survey from 1985 and 1988. The other is an InSeis speculative non-exclusive survey from 2001, which is available through Wavefield InSeis.

Applications for hydrocarbon exploration and production licenses can be submitted to the NEA:

The National Energy Authority (NEA)
Grensasvegi 9
108 - Reykjavik
Iceland.
os@os.is
www.nea.is
Tel: +354–569–6000
Fax: +354–568-8896

The application deadline has been set to 1600 GMT on May 15. The awards are scheduled to take place before the end of October.

01/23/2009

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