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Reuters recently reported that Norway and China might team up to search for oil in the sea around Iceland, but mostly in an area close to Jan Mayen. The relationship between Norway and China has not been good since the award of the 2010 Nobel Peace Prize to Chinese dissident Liu Xiaobo.

Norway has the right to join an exploration license with Chinese oil firm CNOOC to look for oil in the waters between Iceland and Norway's Jan Mayen, a tiny speck of land in the Arctic. The Norwegian government however made an agreement, when forming the government, promising not to search for oil in this area. Some that the promise was only for the Norwegian side of the area, and that Norway can search for oil on the Icelandic side. If the Norwegian government decides to do so it might stir up things in the Norwegian parliament, and it might even threaten the government's alliance with two smaller parties that support the government.

"We expect an answer from the Norwegian authorities in the last week of November," said Gudni Johannesson, director-general of Iceland's National Energy Authority, emphasizing that there had been no diplomatic tensions over the issue.

China is keen to find natural resources and the Arctic could hold some 90 billion barrels of oil equivalent according to the U.S. Geological Survey. In April it signed a free trade deal with Iceland, abolishing tariffs between the two.

There are no figures for how much oil and gas the area where the licenses lie could hold. But the area off Norway's Jan Mayen island, geologically similar, could hold 566 million barrels of oil equivalent, according to a February survey by the Norwegian Petroleum Directorate. That is the equivalent of a sizeable North Sea field.