The Krafla Geothermal Power Station was designed and built for the Icelandic State according to act no. 21 from 1974. In 1985 the Icelandic parliament set forward act no. 102/1985 where the government was authorized to sell Krafla power station to Landsvirkjun (LV).
With that agreement, ownership of Krafla power station and all construction facilities were transferred to LV as well as all geothermal resources that are found within the Krafla area. Ownership of the geothermal resources in Krafla area are therefore the property of LV.
The rights of Landsvirkjun
According to act no. 57/1998 a landowner is entitled to begin surveying or prospecting for resources in the ground or permit such surveying to a third party. LV is the owner of all geothermal resources and such rights are subject to the same rules as real estate instead of complying with rules governing indirect property rights.
Such exploration could be subject to an environmental impact assessment and a decision of the National Planning Agency in alignment with act no. 106/2000, where it is stated that drillings (in particular drilling of production holes and research holes in high-temperature geothermal regions) are assessed on a case-by case basis. Landsvirkjun holds an exclusive right over the geothermal resources in the Krafla area and is responsible in all aspects for exploration and exploitation activities. That right cannot be transferred to a third party as stated above, but Landsvirkjun is authorized to permit surveying to a third party.