Icelandic authorities told Dagbladet, a Norwegian newspaper, that the deposit, between the country’s north-eastern coast and the Norwegian island of Jan Mayen, could be worth upwards of $1 billion.
According to an agreement with Norway, the deposits would be spilt between the two countries, but the find was large enough that Iceland could repay its foreign debt several times over.
“If we find a deposit with a billion barrels of oil, Iceland would be able to repay everything it owes,” said Heidar Mar Gudjonsson, the chair of Eykon Energy, an Icelandic oil firm.
Norway has built up an $800 billion wealth fund thanks to the profits from its oil resources in the North and Barents seas.
Iceland’s offshore areas closely resemble Norway’s and that has oil firms hoping that means there is just as much oil. One report showed that studies of seabed samples had found residues indicating that Icelandic waters may indeed be covering reserves as large as those that Norway has found in the Barents Sea.
The US Geological Survey estimated in 2008 that the Arctic contained 90 billion barrels of potentially recoverable oil, some 13 percent of the globe’s untapped reserves.
Iceland is pinning its hopes on an area about 200 kilometres north of its coast. The Dreki region is the subject of a 1981 agreement with Norway, giving each country the option to take a 25 percent share of any drilling license its neighbour issues in the region.
Norway has halted its exploration in the region, saying that it was content to rely on its agreement with Iceland.
Source: Arctic Journal