Faroe Islands Maritime Boundary / Oil and Gas Licenses 2012 Update

A lot has changed since my last Faroese post in Dec, of 2011 (read Faroe Islands Exclusive Economic Zone / Oil and Gas Licenses).   Many licenses have been relinquished by several oil & gas firms.  These include the south-eastern L002, L005, L007, L012, L015, and L017 blocks.

Of the firms that are left, Statoil remains dominant with the rights to 100% of L010, and 50% of L006, L008, L009, and L011 (view map above).  Valiant Petroleum holds 100% of L013, and 60% of L014.  ExxonMobil holds 49% of L006, and 50% of L009 and L011.  Atlantic Petroleum, Dong Energy, and OMV are minority players.

Open Door Licensing

The Faroese government has taken on a new strategy with the intent to secure the interest of foreign operators.  The new ‘Open Door’ policy seems to be an attempt to break down one of the current barriers to entry.

From Jarðfeingi, of the Ministry of Industry – The Faroe Islands

Areas which previously have been open for licensing, including relinquished licenses, are included in the area where it is possible to apply for licenses out of round.

The ‘Open Door Area’, now literally up for grabs, follows the current south-eastern maritime boundary contour that circles the mainland  ending at 10 degrees W.  What is unique about the open door policy, is that there need not be competing bids to win a block.  A lower offer ‘could’ take it all.

Any Potential Down the Road?

There has only been one real oil discovery within Faroe waters to date.  This took place in 2001, but was deemed uneconomical.  Drill data from the ‘Marjun” prospect has been re-evaluated, and has been taking on new light.  It would be a far stretch to deem this the  mother lode oil equivalent, but it is certainly a prospect.

Now ten years later the Jarðfeingi people together with foreign experts have looked at the Marjun drill data once again and it has emerged that the reservoir capabilities may not be all that poor as previously thought after all.
This could possibly reinvigorate the only discovery made in Faroe waters to date.

Heri Ziska – Head of Geoscience Dept. at Jarðfeingi – 12 of May, 2012

Sources

Faroe Islands Exclusive Economic Zone / Oil and Gas Licenses

The area above represents the Exclusive Economic Zone of the Faroe Islands, along with up-to date licensing blocks.