Like the other licences, the third and final licence, IS2014/1 awarded in January 2014, was divided into stages, the first of which expired on 22 January 2018. The licence has completed the work commitment in Stage 1 and has acquired 2D seismic data that has been processed, interpreted and analysed.

IS2014/1 comprises a large area (6227 square kilometres) with water depths ranging from 200m to 2000m. In terms of geology, the area is extremely complex and characterised by extensive historical volcanic activity, which makes project evaluation very difficult.

As a partner in the licence, Petoro Iceland has conducted its own evaluations of prospectivity and the likelihood of discovery. The volcanic activity in the area camouflages seismic responses to some extent, and has contributed to very intense heat, which creates major challenges for both potential hydrocarbon sources and reservoir quality.

If the licence had opted to continue on to the next stage, the work scope would have been to acquire 3D seismic over at least 200 square kilometres. In autumn 2017, Petoro Iceland and its licence partners considered applying for more time to analyse the data that had already been collected, also taking into account that shallow geological sampling could be useful before making a final decision. Operator CNOOC’s assessment was that proceeding to the next stage was not very attractive, given such a low likelihood of finding commercially recoverable hydrocarbons, and recommended relinquishment based on a comprehensive assessment. Petoro Iceland supported the operator’s assessment and conclusion, and will withdraw from the licence.