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Greenland potential eases uncertainties
Gary Park For Petroleum News
Statoil continues to give a vote of confidence in offshore Greenland, despite uncertainty over the future of exploration in the region.
Norway’s state-controlled company leads one of three consortiums recently awarded exploration and exploitation licenses by the Greenland government.
In addition to its Arctic positions in Norway, Russia, Alaska and Canada, Statoil drilled one offshore exploration well in western Greenland in the 1990s, before relinquishing the licenses in 2002, and is a partner in three other permits.
Its latest move to bulk up involves a 52.5 percent operator role in a partnership with ConocoPhillips (35 percent) and Nunaoil, Greenland’s national oil company (12.5 percent).
First step seismic Runi Hansen, Statoil’s country manager for Greenland and The Faroes, said the first work on the 16-year permit will involve seismic acquisition before any drilling decisions are made.
Statoil has conducted both shallow core drilling and scientific work in the area previously to understand the operating environment.
Hansen said Statoil is “taking a stepwise approach to the Arctic, building on more than 30 years of experience” in harsh environments.
He said the new license is part of the company’s “long-term Arctic positioning and development of new technology.”
Hansen said the area is both challenging and potentially prospective as the Arctic emerges as an important source of world energy supplies.
But he stressed that Statoil will not move faster “than technology allows.”
Other global majors Chevron heads partnerships with GreenPex, Shell and Nunaoil that secured exclusive licenses for two blocks, while Italy’s ENI, BP, Denmark’s DONG Energy and Nunaoil was the successful bidder for one block.
Greenland Industry and Mineral Resources Minister Jens-Erik Kirkegaard welcomed the entry of so many global majors in the successful bidding round.
“It increases our belief that they are able to find oil and gas in commercial quantities,” he said.
Kierkegaard said all exploration will be required to meet the “highest achievable standards when it comes to protecting the marine environment and living resources in the sea.”
The completion of the bidding round eases the doubts that arose 10 months ago when the new Greenland government slapped a moratorium on granting fresh drilling licenses.
Newly elected Prime Minister Aleqa Hammond and others inside the administration said the government would be “reluctant” to hand out any new permits, while exploration under existing licenses would only be allowed to continue under much closer scrutiny.
Early drilling operations by Britain’s Cairn Energy and Shell infuriated environmentalists worried about climate change and concerned that the pristine waters off Greenland could be irreparably damaged by any oil spills.
Two months later, Kirkegaard said in an interview that more licenses would be awarded once current licenses are turned in, although the level of exploration activity was not expected to increase or decline for the time being.
Hammond said she will put in place more stringent financial requirements on foreign companies hoping to profit from Greenland, indicating she would demand royalties — rather than corporate taxes — from companies as they set up exploration activities to help Greenland establish greater financial independence from Denmark.
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