It is an honour to have such a distinguished audience, not least considering that this really is a historic first for Iceland.

This is the first conference on Oil Exploration ever held in Iceland. Oil is an unchartered territory for us.

But we are used to plowing into unchartered territories. We are a seafaring nation, and quite used to rough seas. Don´t forget, when we left Norway 1100 years ago, our journeys didn´t only lead us to Iceland – it only took us a bit longer to discover Greenland, and later America, where the Icelanders sailed all the way to the mouth of the Hudson river, where Manhattan with its financial power and glory now stands.

The name Drake of course is a part of our Nordic heritage, a part of the Nordic mythology. Drake is the creature that protected the Eastern part of Iceland against a possible invasion – not from Norway – but Denmark Today, it is a part of the nations emblem.

A century ago Iceland was one of the poorest countries in the world. On our way to the 21. century we have learnt to harness and care for our resources. Today, we are a prosperous nation. Our prosperity was built for a long time on three main pillars. Our sovereignty, fishing stocks, and renewable energy.

Today, we are part of the global economy, it is easy to make business in Iceland, computer literacy is among the highest in the world, we have extremely good – and free – hospitals, and pr. capita we have more mobile phones than even the United States of America. It is a point of interest for the offshore business that we also have a very good Sea and Rescue Team in the form of our strong Coast Guard, whose claim to eternal fame was to chase the British off our fishing grounds, not once, but three times.

The image of Iceland is green, not only because of our richness of pristine and untouched nature, but also because of our green energy, geothermal and hydro.

Today, we meet 80% of our energy needs by our own renewable sources, 99,95% of all our electricity is green, and 80 % of all our space heating is geothermal. Sometimes, when our spot of Celtic blood gets the upper hand and we want to brag a little we say that the Icelanders are the geothermal kings of the world.

That is of course why we know drilling. The geothermal energy is brought to surface through drilling. So we are going to welcome oil in to our energy stable, because we are familiar with drillers, their temperament, rough life, and in fact we consider them to be our champions.

It may sound a bit paradoxical, that Iceland, which of all nations is least dependent on oil, and is even preparing to develop its own fuel for transport, is to open its economic zone for oil exploration.

In Qatar, who admittedly does only produce gas, the Head of Qatar Petroleum remarked to me: Oil is too important to burn it.

In Washington I heard President Bush say, in effect, the same thing.

You may be of a different opinion, but I, like this two guys, that probably don´t love each other, believe that oil is a limited compound that for various industries is much more important than just as a source of energy. I believe, that later in the century, when alternative fueld sources have been developed, oil will still be a commodity much in demand, and probably even more expensive that today. Time will tell.

There are several reasons why we have decided to embark on explorations for oil.

Firstly, there have for quite a time been strong indications, based on extensive seismic soundings on the Jan Mayen ridge, that there is hydrocarbon to be found in the Dreki field. That isn´t really so surprising, considering that the area is in fact a microcontinent that 40 million years ago was ripped from what at the time was a continous landmass including what now is East Greenland, and West Norway. Dreki has the same geological stratifications, and there is oil in both places – like some of you will also find in the Drake field.

Secondly, the price and the technology is ripe. For a long time it was technically not feasible to drill for oil at the depth and at the conditions existing in the Drake field. Technology has evolved by leaps and bounds, and today oil is being produced at a more difficult conditions than exist in the Drake field. It may be costly, but the demand for virgin fields is growing, and the development in the oil price and the price-predictions for the future make Drake a healthy risk in terms of economics. The time is simply right now.

Thirdly, I´m of course not shy to admit, that Iceland stands to gain economically if some of you guys succeds. The Minister of finance will be very happy. Services to the explorations will also provide much needed jobs and opportunities in the Northeast.

Fourthly, the North-Atlantic and the Arctic are areas of great resources that will be utilized in the coming years. The quest for research, positioning and development of Arctic and North-Atlantic resources has already started. If Iceland is not active in pursuing its interest in the North Atlantic and in the Arctic its possibilities to protect her interests in the future will diminish. It is therefore also of strategic geopolitical interest for us to take part in that development.

And fifthly, we have the rights. Already in 1981 Iceland and Norway came to an agreement on the division of the continental shelf between Iceland and Jan Mayen. The agreement includes a reciprocal participation in exploration and production of oil and gas in a certain zone on the Jan Mayen Ridge, as well as on common preparatory research and prospecting in the area.

These were the reasons for my proposal to the government to offer exclusive licences for exploration and production in the Dreki field in the coming January. The Government of Iceland aceepted my proposals, and here you are, and in Iceland we are well on schedule with all preparations.

Unfortunately for you it is not my privilege to decide on the tax, but nevertheless, we aim to be competitive in taxation with a view to other prospective areas with similar outlook in the North-Atlantic.

In any case, I hope you enjoy your stay in Iceland, enjoy the conference, relax and be happy – and I hope you strike oil.