Iceland’s plans to offer its first oil and gas exploration licences in 2009 is meeting with cautious optimism from energy executives, even though technical challenges remain and production could be decades away.

At an exploration conference in the Icelandic capital this week, the remote Atlantic island published new seismic data suggesting oil and gas resources under its seabed and tried to gauge interest in an upcoming licensing round.
“This will be a technological challenge and will take quite some time until production begins... but I am more confident now that there is oil to be found,” Kristinn Einarsson, oil search production manager at Iceland’ energy authority, told Reuters.
Production could begin in the 2020s, said analysts, if further exploration is encouraging and the right technology is found to exploit oil and gas from the icy Arctic waters off Iceland, where about 100 exploration licences will be offered.
The licences will cover 40,000 square kilometres (15,000 sq miles) of seas in the Dreki area, some 330 km (205 miles) northeast of Iceland and south from Norway’s Jan Mayen Islands.
Iceland hopes geological studies which suggest the region near Jan Mayen is similar to areas near Greenland, where hydrocarbons have been found, will trigger investor interest.
“The conference gave a very good image of the problems we faced here—the main concern is probably to really understand ... the Jan Mayen and Greenland (connection),” a geologist from French major Total told Reuters.