Iceland’s first round of licensing for offshore exploration rights began yesterday. Iceland plans to award up to five offshore oil and gas licences, the head of the project told Reuters. Read the full story

As part of Norway’s aim to invest its sovereign wealth fund only in ethical, environmentally responsible projects, it has pulled out of a deal with Rio Tinto, the world’s second-largest mining company, Yahoo UK reports. Norway’s Government Pension Fund, commonly referred to as its “oil fund”, may only invest its vast wealth in business ventures that fall under ethical guidelines established by the government.

Rio Tinto’s association with Freeport McMoRan (an excluded company) in a joint mining operation in Indonesia in 2006 caused it to lose out on USD 375 billion this year. Norway’s oil fund has previously cut off money to companies that cause environmental damage (as in the case with the 2006 Indonesian mining operation), abuse human rights, or manufacture weapons of mass destruction.

Finance Minister Kristin Halvorsen stated at a news conference that, “We do not want to contribute to serious environmental damage.” The finance ministry added, in a statement, “There are no indications to the effect that Read the full story

Despite the outcry from local environmental groups, the Norwegian energy authority has wrapped up a full seismic survey of the Arctic waters around the Lofoten islands, Reuters reports.

Oil companies predict large deposits of gas and oil under the seabed around the famously beautiful islands; but locals believe the natural beauty of Lofoten should be declared off-limits to exploration and drilling.

The survey, completed by the Norwegian Petroleum Directorate (NPD), produced a three-dimensional image of the seabed which will next be analysed by geologists to determine if there is enough oil and gas there to warrant drilling in this pristine area of Norway.

The Lofoten islands are a major source of contention between oil companies and conservationists. The oil companies’ resources in the North Sea are nearly depleted, so they are aggressively pushing for development of the seas around the Lofoten islands. Environmental groups, along with two-thirds of the centre-left government coalition, oppose drilling in the area.

Norway’s oil production has declined by 1 million barrels per day from its peak of 3 million barrels per day in 2000 as the nation’s North Sea oilfields reach maturity. The data gathered from the seismic survey will not be released to the public, and a final decision on whether the Lofoten region will be opened up for exploration and drilling will have to wait until after Norway’s general election in 2009.

Very positive signs of oil have been found at the Dreki Area, on the Jan Mayen Ridge of Iceland. As reported last year, the Icelandic government intended to open the Dreki region for oil and gas exploration in January 2009.

The Icelandic oceanographic research ship Arni Fridgeirsson recently came from the area after mapping around 10.500 m2 of the area with advanced research scanning technology found strong indications of oil. Among the strong signs found are the same holes as found in the North sea and among them holes 15 meters deep and around 700 meters deep.

Such holes have been research heavelly by scientists and have been one of the indications of oil at location. Finding gas or oil sites would have a significant effect on the largely fossil fuel-free Icelandic economy. Iceland currently uses geothermal and hydroelectric energy for 99 per cent of its energy production.

For more information on the research go to the Icelandic marine research institute web site.

The first Iceland Oil Exploration Conference will be held in Reykjavik on September 4-5, 2008.

The first exclusive licensing round in Icelandic waters for the exploration and production of hydrocarbons, will be done in the northern part of the Dreki area on the Jan Mayen Ridge, northeast of Iceland, early 2009.

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