From Iceland — Russian Oil Exploration in Icelandic Waters One Step Closer

Russian Oil Exploration in Icelandic Waters One Step Closer

Published October 19, 2010

Russian Minister of Energy Sergei Shmatko has asked oil companies in his country to begin work with Iceland in the search for oil in the so-called Dragon Zone, located in the northeast corner of Icelandic fishing waters.

As reported last month, Russian prime minister Vladimir Putin expressed an interest to then-visiting president Ólafur Ragnar Grímmsson in searching for oil in the Dragon Zone, an area in the northeast of Iceland’s fishing waters which is reputed to contain up to one-fourth of the world’s oil and gas needs, although no drilling has begun there. Icelandic foreign minister Össur Skarphéðinsson said at that time that Iceland wants to develop their friendship with Russia, that Iceland regards the country as “a big and friendly neighbour”.

Vísir now reports that Shmatko has green-lit oil companies to start working with the Icelandic government in getting a piece of the Dragon Zone. Shmatko is visiting Iceland, and met with Minister of Industry Katrín Júlíusdóttir.

Shmatko emphasized that the main goal of his visit is with regards to geothermal energy development, telling reporters in part that Iceland has proven itself to be a leader in the technology of the field. Putin also expressed a desire to see Iceland conduct geothermal energy exploration in the Kamchatka peninsula. That said, Shmatko told reporters that he has asked Russian oil companies to begin work towards the possibility of drilling in the Dragon Zone.

Katrín said that Russia was welcome to make an offer for drilling rights in the Dragon Zone, when the international auction for those rights opens next year.

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