EUROPES: Iceland Welcomes Offshore Operators

The Government of Iceland approved Minister of Industry Ossur Skarphedinsson's proposal to offer international companies exclusive licenses for oil and gas exploration and production on the northeast of Iceland.

The release date is January 15, 2009.
Seismic surveys and other geophysical measurements indicate that producible quantities of oil and gas could be found as they have been in adjacent and geologically similar areas.

Further research, including exploratory drilling, is necessary to verify whether oil and gas exist in the Dreki Area. The Government's approval is based on the findings of a detailed strategic environmental assessment report on the matter.

The Government aims at sensible utilization of oil resources in the harmony with the environment and society: "There is no assurance that producible quantities of oil and gas will be found in the Dreki Area, but it is clear that considerable oil and gas discoveries could have vigorous impact on Iceland's economy."

Futhrmore, according to Ossur Skarphedinsson, the gross domestic product could increase and the State Treasury's revenues would similarly increase.

There will be stringent requirements on security and work safety as well as on environmental protection. Use of the best available technology will be demanded to reduce the environmental impact and risk of accidents and mishaps.

Research on the marine biosphere, climate and sea conditions in the Dreki Area, are already in progress. This research is important in evaluating the later impact of oil exploration and will be completed before drilling begins.

If producible quantities of oil and gas are found in the Dreki Area, this will be a major addition to the hydro-power and geothermal energy already produced in Iceland.

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