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The Faroes Islands are part of the Thulean Plateau; a basaltic lava plain which formed during the Paleogene on opening of the North Atlantic Ocean. The plateau was broken up as the ocean grew leaving remnants in Northern Ireland, northwest Scotland, northwest Iceland, eastern Greenland and western Norway as well as the Faroes.
The lavas also created the Giant's Causeway in Northern Ireland and Fingal's Cave in Scotland.
The only parts of the islands prospective for oil or gas are in areas where basalts are thin or non-existent, specifically within the Judd sub-basin of the West of Shetland Basin (it primarily underlies Scottish waters).
Onshore, Globalshift considers the islands to have no potential.
The Judd Sub-basin - The Faroe Islands are west of the post-Caledonian rift basin formed in the Devonian after the collapse of the Caledonian mountains. Tectonic movements and plate reorganization during several phases influenced sedimentation and erosion along the Caledonian front.
During the Cenozoic four main tectonic phases with uplift, non-deposition or erosion, controlled basin development. First, the extrusion of oceanic basalts caused a series of uplift phases. Second, tectonic uplift in the Middle Eocene ended a period of almost continuous subsidence of the Judd Sub-basin.
In the Middle and Late Eocene new depocentres formed in the northern part of the Faroe–Shetland Trough and in the Faroe Bank Basin, northwest and southeast of the Faroes respectively. These appear to have no petroleum potential.
Third, due to uplift and sea-level fall in the Late Oligocene, widespread erosion of the Eocene and Oligocene successions resulted in a major unconformity on the shelf.
Finally, in Neogene times, folding and uplift of the Fugloy Ridge in the north occurred contemporaneously with renewed subsidence in the northern part of the Faroe–Shetland Trough and the Faroe Bank Basin.
The petroleum system in the Judd Basin was strongly influenced by inversion in Middle Eocene to Recent times. Paleocene reservoirs and source rocks were uplifted with gas flushing, seal breakage and interruption in petroleum generation. As such the presence of commercial accumulations in the basin remains high risk.
The Faroe Islands has no history of production. The first well was drilled onshore in 1981 to determine the thickness of the basalt layer. Three further onshore wells were drilled, all for scientific purposes with no expectations of locating oil or gas.
Offshore less than 10 wells have been drilled in the Judd sub-basin of the Faroes-Shetland Basin (West of Shetland basin in the UK) close to the border with the UK. The first well (Marjun-1) was drilled in 2001. It discovered some oil but all the others have been dry.
With lower oil prices drilling is unlikely in the near term. However, over the longer term, renewed exploration activity could locate commercial oil resources.
Globalshift thus forecasts potential oil production from a small area near to the UK border beginning in the mid 2020s. No gas production from the country is expected.
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