Iceland offers oil licenses to attract offshore incorporation

22/08/2008

Iceland is planning to provide international oil companies something they increasingly lack - the opportunity to form offshore companies with good access to new oil-rich areas.

In 2009, Iceland plans to offer about 100 offshore licenses in the remote Arctic waters of the north Atlantic. The country is hoping to tap into a desire amongst international oil companies to replace fast-depleting reserves. Despite the remote location, oil companies who incorporate in Iceland will benefit from new technology to reach traditionally inaccessible oil deposits.

"It's a busy and exciting time, with lots of unknowns," said Thorarinn Arnarsson, hydrocarbon licensing manager at Iceland's Energy Authority. "But we believe this is a good time to introduce our area and we are finding a lot of interest."

"We'll love to have the big companies come in but it's likely to be the risk-takers that get here first and hopefully show the others," he said in an interview with Reuters.

The first licenses for offshore incorporation will last from 12 to 16 years and, following any successful exploration, production for up to 30 years, according to oil industry weekly newspaper Upstream.

"We want to attract international investors ... we do not have plans to build a national oil group," Arnarsson said.