China National Offshore Oil Corporation (CNOOC) is gearing up for offshore exploration on the Icelandic Continental Shelf.
According to Platts, which quoted an official with CNOOC’s Investor Relations Department, the Chinese oil giant has started preparation work for oil and gas exploration in the Dreki area. No oil or gas exploration well has ever been drilled in Iceland so far.
To remind, in January this year, Iceland’s national energy authority Orkustofnun granted an offshore licence to CNOOC as operator with 60% share, Eykon Energy with 15 % share and Petoro Iceland AS with 25% share.
According to Orkustofnun, two areas on the Icelandic Continental Shelf are thought to have potential for commercial accumulations of oil and gas. They are Dreki east and northeast of Iceland and Gammur on the northern insular shelf of Iceland.
Dreki includes the southern tip of the Jan Mayen microcontinent. A number of academic and governmental surveys and surveys by the industry have been made in the northern part of the Dreki Area, indicating the presence of thick continental crust there, that potentially include Jurassic and/or Cretaceous source rocks. The Jan Mayen Ridge is thought to have potential for hydrocarbon accumulations because of its geological similarity to hydrocarbon basins which were its next door neighbours prior to the opening of the northeast Atlantic Ocean basin.
The Dreki area covers 42,700 square kilometers. Water depths range mostly from 800-2000 meters, which is well within the reach of currently available and tested technology for undersea oil drilling.
In a summary of its business strategy for 2014, CNOOC said it planned to drill roughly 155 exploration wells and acquire approximately 26.7 thousand kilometers of 2-Dimensional (2D) seismic data as well as approximately 19.4 thousand square kilometers of 3-Dimensional (3D) seismic data.