Introduction

Systematic preparation of the legal framework to govern full-scale hydrocarbon exploration in the Faroe Islands was initiated in 1992, after the Danish government and the Faroese Home Rule government had agreed on the future administrative regime with respect to minerals, including hydrocarbons, in the subsurface of the Faroese area. At about the same time, significant hydrocarbon discoveries were made in the UK offshore area west of the Shetland Islands and close to the UK–Faroese border that led to production starting from the Foinaven and Schiehallion fields later in the decade. For these reasons the petroleum exploration community became interested in the Faroesearea.