CNOOC Eyeing Iceland Offshore Dreki Area: Report
OREANDA-NEWS. June 20, 2013. China National Offshore Oil Corp has reportedly shown interest in exploring in Iceland's offshore Dreki Area, partnering privately held Eykon Energy, Icelandic newspaper Vidskiptabladid reported.
The report said CNOOC has reached an agreement with Eykon following year-long negotiations and the duo will be awarded a license in coming days.
CNOOC will be "the largest operator" in the Dreki Area so far, the newspaper said, adding that the Chinese company could likely take an 80% stake in the acreage, with Eykon retaining a 20% interest.
Iceland's National Energy Authority, known as Orkustofnun, had said May 3 that it would accept Eykon's application for the third Dreki Area license after "potential participants... declared interest in cooperating" with the company. Orkustofnun also agreed to extend the deadline for completion of negotiations to July 1 this year.
"The processing of the application may be finished by the end of this year," the authority said.
CNOOC could not be reached for comment.
Iceland previously awarded two licenses in the Dreki Area in January, one to a consortium comprising UK's Faroe Petroleum (67.5%), Iceland Petroleum (7.5%) and Norwegian state-owned oil company Petoro (25%) and the second to a consortium led by UK-listed Valiant Petroleum (56.25%), partnering Kolvetni (18.75%) and Petoro (25%).
Petoro had said in January that the Dreki Area is part of a "micro-continent" containing the Norwegian island of Jan Mayen and located between the Norwegian and Greenland continental shelves.
Seabed samples from the area have indicated the presence of sedimentary rocks and an active hydrocarbon system, it added.
Last month China became one of six nations given observer status to the Arctic Council, a grouping made up of Arctic nations Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the US.
Beijing has in recent years expressed an interest in the Arctic, including mining in Greenland. It signed a trade agreement to abolish tariffs with Iceland in April this year and both sides pledged to cooperate on various issues, including tourism.