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Faroese independent eyes licensing round

June 7, 1999

Faroes licensing round [171,499 bytes] The Faroes Oil & Gas Co. (FK) and London-based Dana Petroleum plc have declared their intention to bid together in the forthcoming Faroe Islands offshore licensing round. The Faroese parliament is expected to debate proposals for the islands' first licensing round in October, following the recent signing of a maritime boundary agreement with the U.K. (OGJ, May 17, 1999, p. 33).

Faroes licensing round [171,499 bytes]

The Faroes Oil & Gas Co. (FK) and London-based Dana Petroleum plc have declared their intention to bid together in the forthcoming Faroe Islands offshore licensing round.

The Faroese parliament is expected to debate proposals for the islands' first licensing round in October, following the recent signing of a maritime boundary agreement with the U.K. (OGJ, May 17, 1999, p. 33).

The number of blocks to be made available for licensing has not been decided, but a number of international oil and gas companies submitted suggestions to the Faroese government in 1996 (see map).

Nils Sorensen, chief executive of Torshavn-based FK, a privately owned Faroese company set up in 1997 in anticipation of licensing, said the blocks of interest are in the southeast of Faroese waters, near the Foinaven and Schiehallion oil fields to the west of the U.K.'s Shetland Islands.

Sorensen said that six or seven groups of foreign firms appear to be interested in acquiring Faroese acreage, but he noted that the composition of the groups is currently volatile.

FK and Dana intend to strike a deal to participate in one of these groups. Faroese legislation encourages bidders to demonstrate Faroese participation in their license bids.

There is no Faroese state petroleum company, so the Torshavn administration expects to benefit through corporation taxes alone. This is set at 27% of profits, which FK says is favorable compared with other countries.