04-09-08 Kristinn Einarsson, the Iceland Energy Authority's hydrocarbon licensing co-ordinator, revealed further details of the financial and taxation regime to be put in place ahead of the country's debut round in January next year.
Einarsson told the Icelandic Exploration Conference in Reykjavik companies will be charged a 15 % corporate income tax and progressive processing once gains from production hit 20 %. He added that there would be special deductions put in place in relation to the processing tax, but was unable to provide details of those tax breaks.

The tax would start at 20 % when gained within a band of between 20 % to 25 % reaching a ceiling of 40 % once gains hit 30 %.
He also told the conference that talks with Norway over a draft supplementary agreement regarding the deal struck over the joint Jan Mayen zone were still in progress. Currently, Norway has the right to take a 25 % stake in any development in the zone. This right will not be changed but there are a number of minor details still to be agreed.

Einarsson also told the conference that Iceland plans to make a number of revisions to the country's Hydrocarbons Law and would include a model licence and tender specifications within the legislation. These changes will go before the Icelandic Parliament, the Althing, this session
While he said more analysis of the hydrocarbon potential of the North Dreki was needed, he said Reykjavik is on track to open bids on 15 January next year. Licences are due to be awarded on 15 April.

The round, which was announced last December, will cover about 40,000 sq km in the far north-east of Iceland's economic zone, covering the Dreki area on the Jan Mayen Ridge.