Evidence is growing that oil may be found in the Dreki area north-east of Iceland, according to Orkustofnun, the National Energy Authority of Iceland (NEA).
Recent seismic studies and re-evaluation of available data suggest the presence of thick Mesozoic sediments similar to those found in the adjacent and geologically related oil areas of Norway and Greenland. Moreover, the authority said surface pockmarks, which are known to cluster around major hydrocarbon fields in the North Sea, were also recently discovered in the area.
It said that the Dreki area, part of the Jan Mayen Ridge micro-continent that split from the continental shelf of Greenland and Norway 45-60million years ago, possesses strong, but indirect, evidence that oil or gas may be found in the area. This includes sedimentary rocks of sufficient thickness and age, potential source rocks similar to East Greenland’s, potential reservoir rocks, submarine fans, potential structural and stratigraphic traps and seismic anomalies indicating that hydrocarbons might be present beneath the seabed.
The first oil&gas licensing round in Icelandic waters was launched on January 22. The blocks on offer are in the Dreki area. Water depths range 1,000-2,000m and each block measures some 390sq km; a licence may include one or more blocks or partial blocks up to a total of five, but with a maximum total of 800sq km.
The licence provides for an initial 12-year exploration period with an optional four-year extension. In the event of a commercial discovery, the production period is 30 years. In addition, a treaty between Iceland and Norway provides the latter with the option of acquiring a 25% interest in licences in the northern 30% of the licence area.
Flagging the encouraging news, Ossur Skarphedinsson, Iceland’s minister of industry, said: “We are as determined as ever to explore the potential for oil in the Dreki area despite the current economic crisis. With the ongoing licensing round, we are opening the largest, undrilled, and easily accessible, potential oil frontier in the world. Many international oil companies have already expressed keen interest in further research in the area, and the attention of oil-industry pioneers is being drawn to Iceland.”
Delegates from the NEA and Iceland’s ministry of industry, energy and tourism will present information on the ongoing licensing round at the American Association of Petroleum Geologists Prospect and Property Expo (APPEX) in London on March 3-5.
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