Iceland is keeping its fingers crossed that a Chinese oil company might turn the island nation into an oil producing one.
It gave an offshore exploration permission to a consortium led by China National Offshore Oil Company (CNOOC) back in 2014. The license is located in the Dreki area, which is one of the two areas thought to have the potential for commercial accumulations of oil and gas on the Icelandic Continental Shelf.
According to the latest information, CNOOC is committed to conducting further exploratory after it had acquired 2D seismic data in 2015.
However, the path to first oil is long, as the decision to drill a well offshore Iceland could still be years away.
The Chinese company has acquired 2D seismic data over its offshore block in the country, and the analysis is expected to be finalized in autumn 2017.
According to Icelandic authorities, the Chinese company, which operates a license for exploration and production in the Dreki Area, is optimistic about further exploratory works.
Based on preliminary seismic results, CNOOC has reportedly said that it could press forward with the acquisition of 3D seismic in certain parts of the license area.
The suitable areas could be selected by the end of 2017 and data acquisition could take place afterward.
However, it is worth saying that the work program does not stipulate that 3D seismic acquisition takes place until 2018 at the earliest.
Subject to the positive results of 3D seismic acquisition, the first exploration well would be drilled between 2022 and 2026. This is according to Iceland’s national energy authority Orkustofnun.
“In case of potential oil production in the area, experience shows that it could take ten years until first oil following a discovery, and a lot of uncertainty remains whether hydrocarbons can be found in the Dreki Area and if so if it is in commercial quantities,” Orkustofnun said on Friday.
Iceland gets its electricity from renewable resources such as hydro and geothermal energy. However, Iceland still depends on oil imports for automobiles, machinery, and fishing ships.
Offshore Energy Today Staff