28-08-08 Iceland wants to start test drilling for oil off its coast in the north-eastern Atlantic Ocean now that technical know-how makes it possible to drill at extreme depths, officials said. Data have indicated that "oil or gas may be present" in the Dreki area located between Iceland and Norway's Jan Mayen Island, Kristinn Einarsson, project coordinator for the Icelandic National Energy Authority, said.
"The data are geophysical; there's no drilling hole in the area so that makes it very difficult to make any estimates of resources," he said.

Einarsson suggested that the geological history of the area was such that "it should contain strata of a similar age as the oil bearing strata in eastern Greenland and off the coast of Norway, where oil and gas have been found."
Water depths of 1 to 2 km (0.6 to 1.2 miles) in the area have until now prevented exploratory drilling.

"We have known since the 1990s that we have had these possibilities but the technological know-how, both the drilling and production technology, was not up to the task at that time," Einarsson said.
Following recent technological advances made in the Gulf of Mexico and off the coast of Brazil "there has been much progress in the area."

The Icelandic government will hold its first licensing round for oil exploration in January 2009.