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Joint Oil Search in Icelandic Waters to Reconcile Norway and China?

News

Joint Oil Search in Icelandic Waters to Reconcile Norway and China?

Politics

News agency Reuters speculates whether the Norwegian government will use an Icelandic oil search permit to seek reconciliation with the Chinese government, vísir.is reports.

oil_drilling_ship_wiki

Photo: Wikipedia.

Diplomacy between the two states has been frosty in the past three years following the Norwegian Nobel Prize Committee’s decision to award the prize to Chinese dissident Liu Xiaobo. Media across the globe have picked up the story, especially the Norwegian press, which writes that Norwegians are now contemplating searching for oil around Jan Mayen with the Chinese.

The National Energy Authority of Iceland (Orkustofnun) has approved Chinese state oil company CNOOC International Ltd. as a partner and co-applicant with Eykon Energy ehf. for an exploration and production of hydrocarbons license — the third to be issued — in the Drekasvæði (‘Dragon Zone’) in the waters off Northeast Iceland.

In accordance with the agreement between Iceland and Norway on the area between Iceland and Jan Mayen from 1981, Norway has a right to participate in licenses for exploration and production in the area with an up to 25 percent interest. The Norwegian government is to make a decision whether to take part in the license through the state oil company Petoro.

Reuters speculates whether the Norwegians will seize this opportunity to make amends with the Chinese government, which became infuriated when the Nobel committee handed Xiaobo the 2010 Peace Prize. Since then communication between the two states has been frosty and negotiations on a free trade agreement were terminated. According to Reuters, the Chinese have sent the message that it is up to Norway to repair the damage.

Norway’s Minister for Petroleum and Energy Tord Lien refused to comment on the matter when approached by Reuters. The Norwegian government has until November 21 to make a decision.

Related:

07.05.2013 | Third Iceland Oil Exploration License in Progress

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