CNOOC Eyes First Foray Into Offshore Arctic Oil Drilling

Eykon Energy applied for a license in the tender round, but was unable to move forward without a partner, said Thorarinn Sveinn Arnarson, hydrocarbon licensing manager at Iceland's National Energy Authority.

"Now we can evaluate the technical merits of the application and the qualifications of the companies, both technical and financial, before we make our decision," he said.

If the companies qualify, the license would be awarded in the autumn, he said. The size of Eykon's and CNOOC's stakes in the partnership and the exact location of the offshore Arctic license area would be announced then, he added.

Big oil companies are keen to tap some of the 90 billion barrels of oil the U.S. Geological Survey estimates the entire Arctic region may hold, but progress has been slow and exploration is still at a very early stage.

Earlier this year, Royal Dutch Shell PLC, which has spent over $5 billion on its Arctic drilling program offshore Alaska, said it would pause its campaign following bad weather, mechanical failures and regulatory challenges.

Shell's Arctic oil drilling experience is viewed as critical for other companies seeking to drill and highlights the huge risks, costs and challenges involved.

ConocoPhillips is set to drill in the Alaskan Arctic next year. Elsewhere, Exxon Mobil Corp., Italy's Eni SpA and Norway's Statoil ASA have partnership agreements with Rosneft to develop Arctic blocks. BP PLC is close to securing a long-coveted Arctic oil deal in Russia.