Seas off Arctic island may hold oil bonanza: Norway

The waters off a tiny Norwegian Arctic island may hold vast amounts of oil and gas, the Nordic country’s authorities said, as they prepare to open the zone for exploration by oil firms.

Recent geologic studies conducted in the seas off the volcanic Jan Mayen island, a speck of land some 1,000 kilometers (621 miles) west of Norway situated to the east of Greenland and the north-east of Iceland, have been promising, according to the Norwegian Petroleum Directorate (NPD).

“The samples from the seabed around Jan Mayen are outstanding,” the agency’s head of exploration, Sissel Eriksen, said in a statement late on Tuesday.

“We don’t yet have enough information for the NPD to give a resource estimate for the area, but we are very optimistic after seeing the data,” she added.

The study is part of a larger move by Norway, the world’s eighth-largest oil exporter and the second largest for gas, to encourage oil exploration in its vast offshore Arctic areas.

The oil and energy ministry said last month it would go ahead with an impact assessment study of the Jan Mayen area, which marks the first formal step toward opening the zone to oil companies.

It is as yet unclear when the area will be open in practice to oil firms, but the process usually takes several years.

The NPD, which manages Norway’s oil and gas resources, said the studies had revealed good-quality sandstone that could act as a reservoir to oil and gas deposits.

A type of rock similar to that off Greenland, where oil companies are already exploring for oil and gas, was also found, Eriksen said.

“This means that we have rocks that may contain material that creates oil and gas. Two important prerequisites for potential petroleum deposits are thus met,” she said.

Aside from opening Jan Mayen, Oslo is also seeking to open an offshore zone in the Barents Sea as big as Denmark that was recently delineated by Russia and Norway and could hold oil and gas deposits.

This is all part of a 20-year plan to unlock offshore Arctic oil and gas resources and channel them to worldwide markets, a project the country’s foreign minister has said may cost billions of dollars and bring rivalries over Arctic resources to a head.

Reuters