Faroe, Valiant, Petoro Awarded Icelandic Blocks

Iceland announced late Monday the results of two exploration and production license applications in its offshore Dreki Area, northeast of the country. Norway's Ministry of Petroleum and Energy will participate in the licenses for up to a share of 25 percent, while international firms Faroe Petroleum and Valiant Petroleum have also been awarded interests in the license areas.

The National Energy Authority of Iceland (NEA) said it finished processing the applications for the two licenses on Monday as part of its Second Licensing Round. A third license application has been received by Eykon Energy, an Icelandic explorer, but the processing of this has been delayed until May 2013 in order to give Eykon time to find an additional participant in the license.

In its own statement Tuesday regarding its license awards, Faroe – a junior firm specializing in exploration and production in the Atlantic margin, the North Sea and Norway – confirmed it had been provisionally awarded operatorship and a 67.5-percent interest in seven license blocks. These blocks are located to the south of the Jan Mayen Ridge, which in turn is located inside the Arctic Circle to the northeast of Iceland.

The new offshore license area is on a ridge that forms part of the Jan Mayen microcontinent. This microcontinent lies between the conjugate margins of both East Greenland and the Norwegian Continental Shelf where, Faroe pointed out, several giant oil and gas fields have been developed.

Faroe added that it has already mapped several very large structures within the license area and is "very excited" to get the opportunity to explore and de-risk these prospects with its proposed work program.

Faroe's partners in its blocks include Norway's state-owned oil company Petoro and Iceland Petroleum. The firm has a 67.5-percent interest in Blocks IS6708/8, IS6708/9, IS6708/10, IS6708/11, and IS6708/12, with Petoro and Iceland Petroleum holding 25 percent and 7.5 percent respectively. Faroe has a 90-percent interest in Blocks IS6708/1 and IS6708/2 with Iceland Petroleum holding the remaining 10 percent.

Faroe Chief Executive commented in the firm's statement:

"We are very pleased to announce our entry into Iceland's offshore, which represents an important extension of our frontier exploration portfolio in the UK west of Shetlands, Norwegian Sea and Norwegian Barents Sea. As with our Norwegian Barents Sea licences, this new Icelandic Jan Mayen Ridge licence has significant hydrocarbon potential, and is located in ice-free waters. We look forward to working with the Icelandic Government and our partners, in progressing these important opportunities."

Meanwhile, Valiant confirmed Tuesday that it would provide details of its license awards in due course. The NEA stated that Valiant would be partnered with local firm Kolvetni in its license blocks.

Faroe also announced Tuesday that Group Finance Director Iain Lanaghan plans to step down from the board of the company on April 30 2013 following the delivery of the firm's 2012 full year results.





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