Ithaca Energy, the operator for one of the two offshore oil and gas licenses in the Icelandic Jan Mayen area (Drekasvæðið), are planning to start 2D measurements this year, reports Vísir. Ithaca are thus joining China’s state-owned CNOOC (中海油), the operator of the other license and by far the biggest company with an interest in Icelandic oil, who have similar plans according to an announcement from last year.
CNOOC’s local partner, Eykon Energy, said in January that they’re optimistic about the project and undeterred by low oil prices. Faroe Petroleum, where Korea’s KNOC has a stake, don’t share such optimism and relinquished their own Jan Mayen license in December after preliminary studies yielded disappointing results.
The problem with any potential hydrocarbon reserves in the area is that they mostly lie under a thick layer of basaltic lava. Surface measurements like the ones planned for this year might not be enough to ascertain if there’s any oil worth extracting down there, making it hard to settle down the question without rather costly deepwater drilling. Those were precisely the reasons why the Faroe-led group gave up on the area, and Ithaca’s reported will to spend money on exploration counts as the first sign of optimism not coming from the CNOOC-Eykon partnership themselves (people with Eykon have a long record of enthusiasm about the area’s prospects).
More about Icelandic oil in my longish CNOOC backgrounder and here and there in shorter posts.
Gunnlaugur Jónsson from Eykon, CNOOC’s (中海油) local partner for their license in the Icelandic sector of the Jan Mayen area, tells TV station Stöð 2 that they’re undeterred by falling oil prices. Actually, says Gunnlaugur, the current price level makes the 2d measurements they plan to carry out this year even cheaper. If they find large enough deposits, he adds, they might be able to make a profit with oil as cheap as $60 per barrel (Vísir).
Such optimism about Arctic oil is not terribly common these days. CNOOC’s neighbour offshore Iceland, Faroe petroleum, relinquished their license last December after preliminary studies yielded disappointing results.
Faroe Petroleum, a sixth of which is owned by Korea’s KNOC through subsidiary Dana Petroleum, have handed back the license they had been awarded to explore for oil and gas under the seabed in the Icelandic sector of the Jan Mayen area, Iceland’s energy authority informs.
Íslenskt kolvetni or ARC, Faroe’s minority partner in the license, explain their exit from Icelandic oil exploration by pointing to the disappointing results of preliminary studies, that indicate that neither seismic data acquisition nor any other exploration method short of just drilling will help ascertain whether there is any oil down there. As I said in a background article a year ago, estimates about reserves in the Jan Mayen area are loaded with uncertainty due to the presence of a thick layer of basaltic lava. Ketill Sigurjónsson from consulting firm Askja is calling this a “prophecy that regrettably came true”: it was clear from the beginning that you had to drill through all that basalt to find out if there’s anything worth the trouble under it, and that all that drilling would be rather onerous.
The elephant in the room is of course CNOOC (中海油), the holder of another of the three licenses off Iceland. Their licensed area, that’s just next to the one Faroe have just given up on, would seem to be just as tricky to explore. They seem more upbeat though: last October they met with their Icelandic license partner, Eykon Energy, who told Icelandic TV data acquisition in their patch would start next year. Eykon officials have a record of optimism, to put it mildly, about the area’s potential.
CNOOC’s subsidiary Nexen has inquired about the price of seismic 2D data for Barents sea sectors to be licensed in 2016, says Bloomberg. The data are being sold by the Norwegian Petroleum Directorate.
Norwegian newspaper Dagens Næringsliv already calls this China ‘hunting for Norwegian oil’.
Another CNOOC subsidiary, COSL or China Oilfield Services (中海油服), has been operating rigs in Norway for quite some time. A $150m lawsuit their brought against Statoil, which I wrote about one year ago, was settled last June for less than half that money.
Meanwhile in Iceland, CNOOC’s partner Eykon are saying they might start acquiring seismic data next summer in the sector they own a license for, in the Jan Mayen area.
Last year I wrote a background article on CNOOC in Iceland and elsewhere. By not reading it, you’re missing out on plenty of CNOOC trivia you could enliven dinner parties with this weekend.
Representatives from Chinese oil major CNOOC 中海油 met yesterday with their Jan Mayen license partners, Eykon Energy from Iceland and Petoro, owned by the Norwegian state. Talking to Icelandic TV station Stöð 2, Gunnlaugur Jónsson from Eykon described plans to begin two-dimensional data acquisition by next summer, then three-dimensional measurements two years after that. Drilling platforms could be seen in the area between 2019 and 2021, he added.
Everyone at the meeting was smiling broadly, despite the fact that falling oil prices have been making Arctic oil exploration projects less attractive. Asked about that, Gunnlaugur said he didn’t perceive a diminished enthusiasm.
My blog hosts a long-ish background article about CNOOC and their activities in Iceland. Occasional updates about the Jan Mayen (Drekasvæði) project pop up in it from time to time.
Greenland Petroleum Operations (or ‘Operation’), of Singapore, have ordered four 65k deadweight tonne semisubmerging ships from Taiwanese shipbuilder CSBC (台船), expected to be delivered in 2017. Semisubmersible ships are able to lift large loads, such as other ships or oil rigs.
Greenland Petroleum Operation(s) is partially owned by Chinese businessman Cai Wenxing 蔡文星, an executive director at Falcon Energy. They are not related to either Nuuk-based Greenland Petroleum Services or Japan’s Greenland Petroleum Exploration (GreenPeX, グリーンランド石油開発株式会社).
Among the deals signed during Chinese premier Li Keqiang’s visit to Greece is a $13m “long term cooperation agreement” between Alagni, Crete-based olive oil producer Emelko (ΕΜΕΛΚΟ ΕΠΕ) and importer Shanghai Chaoshang Food Ltd (上海巢尚食品有限公司). Emelko have already been selling oil to China for several years.
Last year I wrote in some length about Chinese interest in olive oil in Greece, Spain and Australia (‘China hits the grove‘).