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Atlantic Petroleum applies for Faroese exploration licence

5 minutes ago

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Atlantic Petroleum has submitted an application for an exploration and production licence in the Faroe Islands under the Faroese Open Door Licensing Regime, marking the first significant move towards renewed hydrocarbon exploration in Faroese waters in several years.

According to the company, the application was submitted on 30 September through an associated company currently being established. Atlantic Petroleum will hold a 40% carried equity interest in the licence applicant.

The application has been submitted to Jarðfeingi, the Faroese Geological Survey, which administers petroleum licensing on behalf of the Faroese authorities.

Renewed Activity on the Faroese Continental Shelf

The announcement comes as interest in the hydrocarbon potential of the Faroese continental shelf continues to attract attention from both industry participants and policymakers.

Exploration activity in Faroese waters began in the early 2000s following the opening of the Faroese petroleum sector. Several international oil companies participated in exploration campaigns between 2001 and 2014, resulting in a number of exploration wells and extensive geological data collection.

While those efforts did not lead to a commercial discovery, they confirmed the presence of hydrocarbons within the Faroese area and contributed to a significantly improved understanding of the region's geology.

Open Door Licensing Process

Under the Open Door Licensing Regime, the submission of an application does not automatically result in a licence being awarded.

Once Jarðfeingi publishes notice of the application, other interested companies will have an opportunity to submit applications for the same area, or parts of it. The application period must remain open for at least 90 days before the authorities can consider awarding a licence.

The process is designed to ensure transparency and competition in the allocation of exploration acreage.

Potential Economic Implications

The renewed interest in exploration has also revived discussion about the potential economic benefits of a future oil and gas industry in the Faroe Islands.

During previous exploration campaigns, petroleum-related activities generated business opportunities for a range of Faroese companies involved in maritime services, logistics, engineering, aviation, and offshore support operations. Exploration companies also contributed revenue to the Faroese Treasury through licence and acreage fees.

Supporters of continued exploration argue that a commercial oil or gas discovery could create new jobs, attract investment, and generate public revenues. However, the commercial viability of any future development would depend on the size of any discovery, market conditions, regulatory requirements, and the economics of production.

Looking Ahead

Atlantic Petroleum's application represents the first step in what would likely be a lengthy process before any exploration activity could take place.

Should a licence eventually be granted, further geological assessments, environmental reviews, and exploration work would be required before drilling decisions could be made.

While there is no guarantee that the application will lead to exploration or commercial production, the move signals renewed industry interest in the Faroese continental shelf and reopens a discussion that has remained largely dormant since the last exploration campaigns more than a decade ago.

Current Atlantic Petroleum operations. Photo Atlantic Petroleum

For now, attention will turn to the licensing process and whether additional companies express interest in the area once the application is formally published by Jarðfeingi.

(Mynd: Atlantic Petroleum and bfi)