There is very strong evidence that there is indeed oil beneath the seabed in the Dragon Area, the northeast corner of Iceland’s territorial waters, Norwegian and British prospectors have found.
The Dragon Area has long been suspected to be rich in oil and natural gas, but until very recently, there was no conclusive evidence. The National Energy Authority now reports that Britain’s TGS and Norway’s Volcanic Basin Petroleum Research have found fairly conclusive evidence of the existence of oil.
Researchers dug up about 200kg of rock samples from an undersea cliff in the area in September 2011. They found that “diverse sedimentary rocks of Mesozoic age (250 to 65 million years) were recovered. Prior to last summer no rocks older than 50 million years had been drilled or sampled in this area. Advanced geochemical analyses of the recovered sediments suggest active seepage of Jurassic oil and a working hydrocarbon system.”
The 2012 Icelandic Licensing Round for drilling in the area is coming soon, which could spell high bids from prospective drillers, not to mention oil revenue for Iceland. Those interested have until 1600 hrs. GMT on April 2 to apply.
A report on the drilling findings can be read here.