Eric Watkins
OGJ Oil Diplomacy Editor
LOS ANGELES, May 18 -- Iceland's National Energy Authority (NEA), which recently launched the country's first-ever licensing round, said it received bids from two companies for exploration rights to the northern Dreki area.
"This is a big day in the history of Iceland's energy resources utilization," said Industry Minister Katrin Juliusdottir as quoted by the Icelandic daily Morgunbladid.
NEA said it received applications from Aker Exploration as well as a combined bid from Sagex Petroleum and Lindir Exploration for Blocks IS6708/1, IS6708/2, IS6808/11, and IS6909/11.
Blocks IS6808/11 and IS6909/11 are within the area of an Oct. 22, 1981, agreement between Norway and Iceland on the continental shelf between Iceland and Jan Mayen.
As a result of that agreement, according to one official, the Icelandic authority will have to consult with Norwegian authorities before it can grant permission to companies to explore the area of shared sovereignty.
NEA, which announced the licensing round on Jan. 22, said it would evaluate the bids and announce its decision by the end of October this year.
NEA expressed disappointment in the low number of bidders, saying that "the difficult conditions in the world economy as well as the low oil prices have undoubtedly affected other parties that were interested in the licensing round."
Altogether, Iceland plans to offer 100 offshore oil and gas licenses this year. At the time of the January launch, NEA said individual applications for licenses may cover one or more of the blocks or partial blocks, up to a maximum of 800 sq km.
"The number of licenses on offer is up to five as a maximum," NEA said, adding, "Applicants are also encouraged to nominate a secondary area in case of an area of first choice overlapping with other applications."
Contact Eric Watkins at [email protected].
