Chinese oil major, Sinopec, is in talks with Iceland to explore potential joint energy projects.
In a bid to secure further resources overseas, Sinopec Group is currently in talks with Iceland to explore for oil and gas. Iceland is thought to hold around 13% and 30% of the world’s undiscovered oil and natural gas, respectively.
Preliminary discussions are being held between the Icelandic government and Sinopec Star Petroluem Co Ltd, a clean energy subsidiary wholly owned by Sinopec Group.
However, Arctic exploration and production will be fraught with challenges for both parties. As well as the high cost and level of expertise required for exploration, projects will face strong scrutiny from environmental groups and regulators - a factor that has already had an impact on Shell amongst others.
China was granted observer status on the Arctic Council, an eight-member regional decision making body. Although it does not have any voting rights, it can still propose and finance policies.
Andy Brogan, global oil and gas leader with Ernst & Young, told China Daily it was “still too early to predict how successful the deals can be.”