* Oslo mulls taking stake in 3rd Iceland oil license
* Could be teaming with China's CNOOC and Icelandic oil firm
* May be a rare cooperation after 2010 Nobel Peace Prize row
By Gwladys Fouche
OSLO, Nov 13 Norway is deciding whether to team
up with China to explore for oil in Iceland, Icelandic
authorities said, setting up a rare cooperation for the two
since a diplomatic row over the award of the 2010 Nobel Peace
Prize to Chinese dissident Liu Xiaobo.
Norway has the right to join an exploration licence with
Chinese oil firm CNOOC to look for oil in the waters
between Iceland and Norway's Jan Mayen, a tiny speck of land in
Communications between Beijing and Oslo have been mostly
cool since the 2010 Peace Prize and collaboration in Iceland may
be a signal that relations are on the mend.
"We expect an answer from the Norwegian authorities in the
last week of November," said Gudni Johannesson, director-general
of Iceland's National Energy Authority, emphasising that there
had been no diplomatic tensions over the issue.
"It has been a quite normal administrative process," he told
Norway's Conservative-led government took office last month
and China has signalled that it was up to Norway to repair the
relationship, which has damaged business ties and prevented
Statoil from exploring for shale gas in China.
Iceland awarded its first two licences in January. In June
it gave CNOOC and Icelandic firm Eykon Energy a further licence
as it seeks boost its fragile economy.
At the time of the announcement, it was the first time a
Chinese oil firm was licensed to look for oil in the Arctic.
Under a 1981 treaty, Norway has a right to take a 25 percent
stake in the licences.
It did so with the first two licences Reykjavik awarded in
January, to London-listed Faroe Petroleum and Canada's
Ithaca Energy together with local Icelandic partners.
China is keen to find natural resources and the Arctic could
hold some 90 billion barrels of oil equivalent according to the
U.S. Geological Survey. In April it signed a free trade deal
with Iceland, abolishing tariffs between the two.
Iceland, still recovering from the 2008 financial crisis
that brought the country to its knees, is keen to develop its
natural resources to help spur its economy.
There are no figures for how much oil and gas the area where
the licences lie could hold.
But the area off Norway's Jan Mayen island, geologically
similar, could hold 566 million barrels of oil equivalent,
according to a February survey by the Norwegian Petroleum
Directorate. That is the equivalent of a sizeable North Sea
The Norwegian oil and energy ministry, which is taking the
decision, declined to comment. A representative of CNOOC was not
immediately available to comment.