Oil Exploration Continues Despite Drastic Price Drop - The Reykjavik Grapevine

Oil Exploration Continues Despite Drastic Price Drop

Published January 11, 2015

Haukur Már Helgason
Photos by
Ministry of Industries and Innovation

On Sunday, Vísir reports that oil exploration in the Arctic Ocean, more precisely in the so-called Dragon Area, close to Jan Mayen, will continue, regardless of a recent drastic drop in oil prices. This is in accordance with the company’s statement in December.

The Dragon Area is part of the Icelandic continental shelf (ICS) and belongs to Iceland’s territorial waters. In 2013, Orkustofnun, Iceland’s National Energy Authority, confirmed licenses for oil exploration in the area, according to plans outlined and published six years earlier. In 2013, oil prices hovered around 100 dollars per barrel, but have since dropped by half, to 50 dollars.

The firms involved in the exploration include Norway’s Petoro and China’s CNOOC, in partnership with Icelandic firm Eykon Energy.

Interviewed by Vísir, Gunnlaugur Jónsson, Eykon’s spokesperson, said that lower oil prices make the exploration even more attractive than before, since the costs involved drop accordingly. If large wells are found, he says that oil production could foreseeably be run with a profit at prices down to 60 dollars per barrel.

In the accompanying image, the Dragon Area is marked in red.

Dragon Area

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