Iceland Licensing Round to Put Jan Mayen Ridge on Exploration Map
On January 22, 2009, the authorities in Iceland will announce their first licensing round for oil and gas activities on the Jan Mayen Ridge, which lies between Norway and Iceland.
The continental shelf around Jan Mayen is Norwegian territory and it borders the Icelandic shelf. Norway and Iceland have signed a treaty on joint exploitation of potential deposits, and mutual participation within a clearly defined area on both sides of the delimitation line. The area that is subject to the agreement consists of 45,509 square kilometers, which is equivalent to about 94% of Finnmark county.
In the joint venture areas, the parties have the option of participating with a 25% ownership interest in petroleum activities that take place in that part of the area which lies on the other country's continental shelf.
The Norwegian shelf within 200 nautical miles around Jan Mayen covers a total of 292,394 square kilometers, which is equivalent to 90% of mainland Norway. This area has not been opened for petroleum activities.
The area is covered under the comprehensive management plan for the Norwegian Sea. The Ministry of the Environment plans to submit a Storting White Paper on the comprehensive management plan during the spring of 2009.
Iceland plans to award licenses in the summer/fall of 2009. The area included in the planned Icelandic licensing round includes that part of the joint venture area which lies on the Icelandic side of the delimitation line.
The delimitation line between Norway's and Iceland's continental shelves in the area between Iceland and Jan Mayen was set in an agreement dated October 22, 1981. The agreement was submitted to the Norwegian Parliament in Storting Proposition No. 61 for 1981-1982.
The agreement includes more detailed provisions about this, as well as how and when such participation shall be clarified. The respective party's own laws shall apply in its respective parts of the joint venture area, including provisions concerning control, safety and protection of the environment.
At the beginning of November 2008, the Norwegian and Icelandic authorities signed an agreement and a negotiation protocol regarding potential oil and gas in the joint venture area. The agreement and the protocol provide certain clarifications prior to Iceland allowing exploration activity. For example, the negotiation protocol provides more detailed rules for exercising the right to participate with 25%.
The Icelandic licensing round and Jan Mayen were topics raised in the Storting's question period in May 2008. The then Minister of Petroleum and Energy, Aslaug Haga, stated that the authorities had begun a process of evaluating how to increase knowledge about the conditions on the Norwegian side of the border with Iceland. The Minister also said that it was important to ensure that the Norwegian authorities had a sufficient basis of knowledge to manage potential oil and gas resources in this area wisely.
In the 1980s, Norway and Iceland cooperated on conducting seismic surveys all across the Jan Mayen Ridge. Iceland also acquired seismic data on its side of the delimitation line in 2002.
An evaluation concerning opening of the Norwegian part of the Jan Mayen Ridge must be made following an ordinary process, including thorough impact assessments. A decision to this effect would have to be made by the Storting.
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