While Iceland has not specifically ruled out the awarding exploration licences, the combination of limited appetite on the part of the host government or explorers to open a new exploration frontier has resulted in low uptake or interest in the region.
June 16, 2021
Europe - North West
Northern Europe, island between the Greenland Sea and the North Atlantic Ocean, northwest of the United Kingdom
Petroleum activities are subject to general Icelandic laws and regulations on taxation, environmental protection, health and safety. Hydrocarbon accumulations are owned by the Icelandic state, and a license from the National Energy Authority (Orkustofnun, or NEA) is required for prospecting and E&P of hydrocarbons. The NEA is also responsible for monitoring hydrocarbon prospecting and E&P activities and for archiving the data generated by such activities. The NEA coordinates the response of Icelandic authorities to requests from oil companies for information regarding petroleum activities.
There is broad recognition within the Icelandic government that foreign direct investment (FDI) is a key contributor to the country’s economic revival after the 2008 financial collapse. As part of its investment promotion strategy, the Icelandic government operates a public-private agency called “Invest in Iceland” that facilitates foreign investment by providing information to potential investors and promoting investment incentives. Iceland has identified the following “key sectors” in Iceland; tourism; algae culture; data centres; and life sciences. Iceland offers incentives to foreign investors in certain industries. Tourism has been a growing force behind Iceland’s economy in the past decade, with opportunities for investors in high-end tourism, including luxury resorts and hotels. The number of tourists in Iceland grew by more than 400% between 2010 and 2018, reaching more than 2.3 million in 2018. However, tourism in Iceland contracted in 2019, and the COVID-19 pandemic has had drastic effects on tourism, and the overall economy. The government has announced measures to bolster the tourism economy and has committed to building out tourism-related infrastructure.
Source: ESRI, Heritage Index, HMG Foreign & Commonwealth Office, US Department of State, International Trade Administration, International Law Review, Ernst & Young, Wood Makenzie & OGA data.
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