From Iceland — Who Will Hunt for Iceland's Oil?

Who Will Hunt for Iceland’s Oil?

Published November 23, 2010

While many geologists speculate that the famed Drekkasvæði in the northeast corner of Iceland’s fishing waters may be abundant in oil and natural gas, the question remains: who is going to drill for it?
As reported last month, 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 (Drekkasvæði), located in the northeast corner of Icelandic fishing waters. Russian president Vladimir Putin has also encouraged this endeavour.
Today, Minister of Industry Katrín Júlíusdóttir addressed parliament, expressing a great deal of optimism about the hunt for oil and gas. Although Drekkasvæði is reputed to contain up to one-fourth of the world’s oil and gas needs, no drilling has yet begun there. While the Russians expressed an interest in drilling in the region, Katrín rather talked about Norway. Her contention is that Iceland should consult with Norway for their drilling expertise. At the same time, she also proposed that changes be made to tax laws as it applies to oil exploration.
Progressive MP Gunnar Bragi Sveinsson chimed in with the idea that maybe Iceland should just let Norway do the drilling for us, and then let them have a portion of the proceeds. The minister, while admitting that Icelanders have no experience hunting for oil, said that she felt the matter was best handled internally.
The statement is a curious one, seeing how the minister also mentioned repeatedly in the recent past that drilling permits in the area would be up for public auction after the new year. This indicates that the minister would like to see Iceland do drilling of its own, and sell drilling areas to other countries as well.
Any oil exploration within Icelandic waters is still in the beginning stages, however, and matters will not likely get formally started until after the new year.

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