Faroes prepare first round
A first offshore licensing round is being prepared by the Faroese authorities after settling a boundary dispute with the UK.
Britain and the Faroes have reached agreement that their common boundary in the "white zone" - a disputed area of the North Atlantic - should be determined by the median line principle.
This means that the dividing line will coincide more or less with the existing fisheries limit between the two sides.
As a result, the UK has secured 52 per cent of the zone and the Faroes 48 per cent. Both have expectations of finding petroleum in these waters.
"The Faroese continental shelf can become an important new hydrocarbon province for us," says Jon Egil Inderhaug, Statoil's project manager in the North Atlantic island group.
Statoil belongs to the Atlantic Margin Group (AMG) with Mobil and Enterprise, one of eight consortia which have long been working with offshore prospects in the Faroes.
The Faroese petroleum administration will be asking companies to re-nominate preferred acreage for possible award in the first licensing round. An earlier set of nominations was submitted in 1997.
Work is now under way in Torshavn, the capital, to draw up licence terms and select areas for the initial round. These must then be submitted to the Lagting (home rule parliament) for approval.
A green light is expected from the politicians in October, with a formal invitation to apply likely to be issued in December.