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In the Dragon’s Den

Magazine

In the Dragon’s Den

dragon-s_den_picture_psIceland’s National Energy Authority issued the first licenses for oil exploration in Icelandic waters in early January. Zoë Robert looks at the potential impacts for Iceland if oil is discovered.

Published in the 2013 April-May issue of Iceland Review – IR 02.13. By Zoë Robert. Photo and illustration by Páll Stefánsson.

Until not that long ago, the image of Iceland—the subarctic nation and poster child for renewable energy—as a producer of oil seemed improbable. But, 50 years after the first indications that oil might exist in Icelandic waters, the country’s National Energy Authority (NEA) granted the first two licenses for exploration and production of hydrocarbons. Should the initial phases prove successful, exploratory drilling will take place in four to seven years.

Long Time Coming

It was back in the 1960s when scientists mapping the sea floor first discovered that a fragment of continental crust—a premise of any chance of finding oil or gas—may exist in Icelandic waters. Over the years, further research and surveys have been conducted, but various factors resulted in exploration being put on hold.

“At the time [of early discussions in the 80s], oil prices were around USD 30 a barrel and the technology was not even there so this was not something that was economical at the time,” explains Þórarinn Sveinn Arnarson, manager of the hydrocarbon exploration division at NEA.

The area, known as Drekasvæði (‘Dragon Zone’), lies on part of the Jan Mayen Ridge, approximately 340 kilometers northeastof the Icelandic mainland and the same distance southwest of the tiny Norwegian island of Jan Mayen. According to a 1981 agreement between Iceland and Norway on the division of the continental shelf in the Jan Mayen area, Norway has the right to participate in petroleum activities in a defined area lying within Icelandic waters and vice versa.

You can read the remainder of the article in the 2013 April-May issue of Iceland Review – IR 02.13.Five times a year the print edition of Iceland Review & Atlantica brings you a wealth of articles on all aspects of life in Iceland including Páll Stefánsson's latest images of the country’s majestic landscape. Click here to subscribe and here to browse through a selection of pages from the current issue.