Preparations for the licensing round for the Dreki Area, Northeast of Iceland, are well on the way


In accordance with decisions of the Government of Iceland, the National Energy Authority and the Ministry of Industry are preparing for the first licensing round where exclusive licenses are on offer for the exploration and production of hydrocarbons in the Dreki Area. 

The licensing round will start on 15 January 2009 and end 15 May 2009. A maximum of five licenses will be issued and each license can be up to 800 sq. km. One of the criteria for the consideration of applications will be the willingness of companies to participate in financial support of a hydrocarbon resources research fund in Iceland. Such a fund exists e.g. in the Faroe Islands and has been found to be successful.

A bill has been placed before the Icelandic Parliament that slightly modifies Act No. 13/2001, on Prospecting, Exploration and Production of Hydrocarbons, as well as some of the environmental legislation on this issue. A bill on the taxation of hydrocarbon profits and production fees on oil operations will be put before the government at a cabinet meeting this week. These two bills must pass through Parliament and become law before Christmas in order for the licensing round to go forward as planned.

A Unitisation Agreement  was signed with Norway on November 3rd, as well as Agreed Minutes concerning the Right of Participation pursuant to Articles 5 and 6 of the Agreement of 22 October 1981 between Iceland and Norway on the Continental Shelf in the Area between Iceland and Jan Mayen.

The Ministry of Industry and the National Energy Authority have accepted the bid of the Law Firm BBA//Legal on assistance with preparations for the upcoming licensing round for the Dreki Area. A Regulation to go with the Hydrocarbon Act and a Model License are being drafted and will be finalized in time for the licensing round. The State Trading Centre gives advice on the licensing round, including on the licensing terms. The Ministry of Industry will, in early December, finalize the Strategic Enviromental Assessment for exploration of oil and gas in the Dreki Area, based on the comments and answers that were received on the draft report according to Act No. 105/2006.

The joint Icelandic-Norwegian seismic surveys from 1985 and 1988 are now public and available through the DISKOS Ordering System for public E&P data in Norway. Both of these surveys are being reprocessed as a multi-client project by Spectrum ASA. Two confidential interpretation reports from 1989, based on the 1985 dataset, by Gunnarsson et al., and Olafsson and Gunnarsson, have been released and are available under Research Publications on this web-site.

The first conference on exploration for oil and gas in Icelandic Waters was held in Reykjavik last September. There were about 140 delegates at the conference. Presentations of speakers from Iceland and from abroad are available here on NEA's web-site. The National Energy Authority presented the licensing round at the PETEX exhibition in London last month and the material presented there can be accessed here. NEA has accepted an invitation to give a talk on the Dreki Area at the PROSPEX exhibition, which will take place 10-11 December in London.