Oil refinery to be built in Iceland’s Westfjords? Skip to content

Oil refinery to be built in Iceland’s Westfjords?

Icelandic and Russian entrepreneurs are working on plans to construct an oil refinery in Iceland’s Westfjords. The station could be built in four years and provide jobs for over 500 people.

According to RÚV, the plans are being worked on by the Icelandic company Íslenskur hátaekniidnadur (“Icelandic Hi-Tech Industry”), owned by Ólafur Egilsson and Hilmar F. Foss, and the Russian company Katamag-Nafta, the daughter company of The Geostream Services Group, a Russian high-tech service company cooperating with LUKOIL.

The idea is for the station to be able to produce 150,000 barrels a day and to employ 500 to 700 people. One fifth of the employees would require a university degree.

Raphael Baron at Katamag-Nafta said in an interview with RÚV that the Westfjords were the perfect location for an oil refinery.

“Iceland happens to be in the middle between Europe and the United States. The oil shipping routes already go very close to Iceland; all they need to do is make a left turn to come to Iceland to have the oil refined and add tremendous value to it,” Baron said.

Baron pointed out that there is enough energy in Iceland to power such an operation.

The process of refining oil causes pollution, but the organizers of the project claim that the fuel produced is cleaner than the fuel which is imported to Iceland, so once Iceland’s car and ship fleet would use the fuel produced in the oil refinery, the total pollution in Iceland would be reduced.

Halldór Halldórsson, mayor of the Westfjords’ capital Ísafjördur, told RÚV he is still pondering on the idea of an oil refinery, but that likes the idea very much, especially regarding the jobs that would be created.

But Halldórsson said the idea would only be accepted if it would coincide with the Westfjords’ policy of not embarking on any heavy industry projects and said it was important for the issue to be discussed in detail.

“According to what they [the organizers of the project] are saying the pollution would be circa one tenth of the pollution an aluminum smelter would produce and that the electricity usage is only a fraction of what they [the smelters] are using,” Halldórsson said.

Therefore, the oil refinery would not be a heavy industry project, Halldórsson concluded.

“We consider this a hi-tech industry. Heavy industry is, according to dictionaries, defined as something that requires a lot of energy. […] The main issue of dispute regarding heavy industry are the dams and the damage to the highland,” said Ólafur Egilsson in an interview with RÚV.

“We don’t need anything like that because the refinery only requires 15 megawatts of energy,” Egilsson stated.

“The financing would be Russian, American and partly Icelandic,” Egilsson said. “What would happen next, after the Westfjordians have reached a decision, is to begin an efficiency evaluation and get all the facts to the table.”

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