COPENHAGEN (Reuters) - Oil companies are interested in restarting the hunt for oil and gas in the scarcely explored seas off the Faroe Islands neighbouring the more mature UK North Sea, the head of the Faroese Geological Survey said.
No economically viable discoveries have been made on the Faroese shelf but the tiny nation hopes to entice energy firms to restart exploration as it shows them new geological data in London on Wednesday.
“Oil firms have in many ways shown interest. We are having meetings, they buy data from us, visit us on the Faroe Islands ... So there is an interest and they are looking at the possibilities,” survey director Niels Christian Nolsoe said.
He declined to identify any of the companies but said bigger firms could put up the necessary cash, adding that companies present in the UK Shetland region also might be interested.
“We left the Faroe Islands in 2015 and have no plans about entering again,” said a Statoil spokesman.
The seabed is mostly covered by thick basalt layers, which make the Faroese offshore areas difficult to explore despite promising geological and seismic surveys.
The seismic data now available and collected by companies such as Norway’s PGS (PGS.OL) gives a much better understanding than when exploration started some 16 years ago, Nolsoe said.
In the fourth licensing round, running until February 2018, the Faroe Islands is offering licences in an area covering 30,000 square metres on the eastern part of the shelf bordering the western Shetland region.
“Only nine wells have been drilled in a huge area and big discoveries have been made in the Shetlands, so if you look at where there could be some big undiscovered findings, the possibility is greatest in our area,” he said.
In March, Hurricane Energy (HUR.L) announced an oil discovery in the Halifax well in the West Shetland region, which it said could be Britain’s largest undeveloped oil find.
BP (BP.L) started production at the Quad 204 project in the West Shetland region in May after a $5.7 billion redevelopment, one of the largest such projects there in recent years that will breathe new life into the ageing offshore basin.
However, a persistent slump in oil prices and thus strict cash discipline among oil firms could curb interest in the undeveloped North Atlantic region.
“The oil price is a challenge ... on the other hand, the oil industry has also reduced its costs,” he said.
Reporting by Stine Jacobsen; Editing by Dale Hudson and David Evans