Exclusive Licenses Offered for Oil Exploration off Iceland in January 2009

    REYKJAVIK, Iceland, Dec. 18 /CNW/ -- This morning, the Government of
Iceland approved Minister of Industry Ossur Skarphedinsson's proposal to offer
exclusive licenses for oil and gas exploration and production in the Dreki
Area (the Atlantic, northeast of Iceland, on the Jan Mayen Ridge, between
Iceland and the island of Jan Mayen.) The tentative release date is 15 January
2009. International companies have expressed interest in the area.

    Seismic surveys and other geophysical measurements indicate that
producible quantities of oil and gas could be found as they have been in
adjacent and geologically similar areas. Recent strides in drilling and
production technology along with other nations' experience with oil and gas
production at great ocean depths and in northerly regions have made searching
for these resources in the Dreki Area possible. Further research, including
exploratory drilling, is necessary to verify whether oil and gas exist in the
Dreki Area. The Government's approval is based on the findings of a detailed
strategic environmental assessment report on the matter.

    The Government aims at sensible utilization of oil resources found in the
greatest possible harmony with the environment and society. "There is no
assurance that producible quantities of oil and gas will be found in the Dreki
Area, but it is clear that considerable oil and gas discoveries could have
vigorous impact on Iceland's economy. The gross domestic product could
increase considerably when construction and production are at their peak, and
the State Treasury's revenues would similarly increase. This would therefore
strengthen the nation's economic foundations; in addition, oil production
would reinforce settlement in Northeast Iceland," said Minister Ossur

    There will be stringent requirements on security and work safety as well
as on environmental protection. Use of the best available technology will be
demanded to reduce the environmental impact and risk of accidents and mishaps.

    Research on the marine biosphere, climate and sea conditions in the Dreki
Area, are already in progress. This research is important in evaluating the
later impact of oil exploration and will be completed before drilling begins.

    If producible quantities of oil and gas are found in the Dreki Area, this
will be a major addition to the hydro-power and geothermal energy already
produced in Iceland.


For further information:

For further information: Kristinn Einarsson, Project Coordinator at 
Icelandic National Energy Authority, + 354 863 9974, ke@os.is Web Site:

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