Article - 23/01/2014

Third Oil Exploration License Granted in Dreki Area

Today, Iceland’s National Energy Authority (“NEA”) granted the third oil exploration license to CNOOC Iceland ehf in the Dreki area, located east and northeast of Iceland. The licensee is CNOOC as an operator with a 60% share, Eykon Energy ehf with a 15% share and Petoro Iceland AS with a 25% share.

The license was granted at a signing ceremony attended by Mr Gudni A. Johannesson, Director General of NEA, Mrs Ragnheidur Elin Arnadóttir, Minister of Industry and Commerce, a representative from the Embassy of Norway and Mr. Ma Jisheng, Chinese Ambassador in Iceland. The granting of this third license by NEA concludes the third licensing round for the Dreki Area, which had an application deadline of 2 April 2012.

CNOOC Iceland ehf. is a daughter company of CNOOC International Ltd. Eykon Energy ehf. is a daughter company of Eykon AS in Norway, where Mannvit holds a small share. Petoro Iceland AS, Branch in Iceland, is licensee on behalf of the Norwegian State according to the decision of the Norwegian Parliament of 16 December 2013, in accordance with the agreement between Iceland and Norway of 1981 on the continental shelf in the area between Iceland and Jan Mayen. Petoro Iceland AS, branch in Iceland, undertakes all obligations and requirements of the Norwegian State according to the license and as a party to the cooperation agreement on the execution of the license.

According to NEA’s (Orkustofnun) press release the NEA sought the opinions of the Ministry for the Environment and the Ministry of Fisheries and Agriculture in accordance with Act No. 13/2001 and evaluated the opinions based on the application and the work programme involved, which extends over 12 years. NEA made thorough evaluation of the technical and geological capacity of the applicants to handle the extensive activities associated with the license. Furthermore, NEA studied the financial capacity of the parent companies of the applicants in order to ensure that the applicants have sufficient financial strength to conduct the activities for the long-term and can handle the corresponding environmental and safety elements.