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Greenland drilling set to start in June Scotland’s Cairn Energy will be the first company in recent years to drill offshore; competition ‘fierce’ in latest licensing round Petroleum News
There was “fierce” competition in Greenland’s latest oil and gas licensing round, the northern country’s Bureau of Minerals and Petroleum told Bloomberg on May 3.
“We’re a fishing and hunting economy, just like Norway used to be,” Oil Minister Ove Karl Berthelsen said by phone to the news service from Nuuk, drawing a comparison with the world’s sixth-biggest crude exporter. “We want our industry to stand on several legs and oil is very important. The next 20 years will be vital.”
In August, Greenland will “announce the winners of 14 blocks in a 93,000 square-mile area in Baffin Bay, more than doubling its available acreage after holding regular rounds since 2002,” Bloomberg reported. “The areas are north of the 67th parallel, where oil has been seen seeping out of rocks along the shoreline. The government has financed seismic surveys to attract explorers.”
Greenland has issued 13 licenses since 2002 to Cairn Energy, ExxonMobil, Chevron, Encana, Husky Energy, Dong Energy, PA Resources and Nunaoil, the country’s state-owned oil and gas company.
Cairn Energy, a small Scotland-based producer long active in India, has budgeted $400 million for a drilling program this summer offshore Greenland, a multi-year exploration campaign that Bloomberg said “will be closely watched by producers such as ExxonMobil and Chevron that also hold rights offshore.” The company said it has accumulated interests in eight Greenland hydrocarbon exploration licenses — six operated and two non-operated. The eight cover an area of approximately 72,000 square kilometers with water depths ranging from 50 meters (164 feet) to 2,200 meters (1.4 miles).
Thirty prospects identified in West Disko area The company’s 2010 exploration program includes drilling four wells and shooting 2,500 kilometers of 2D seismic in the West Disko area. In 2011 Cairn is looking at drilling three or four wells in the Southern Greenland basin.
Cairn said it has identified 30 prospects in West Disko to date.
A sixth generation dynamically positioned drillship, the Stena Forth, has been contracted to start operations in the summer drilling season, which runs from June to October.
For companies like Norwegian Energy Co., the licensing round this year and in 2012 may be the right time to get a share of the potential windfall, Chief Executive Officer Scott Kerr said in an interview with Bloomberg.
“A small company like us, we need to go in now, because if someone goes in and a discovery is made, we immediately get priced out of the market. If Cairn has success, there are going to be a lot of people looking at Greenland,” he was quoted as saying.
According to the U.S. Geological Survey’s Circum-Arctic Resource Appraisal, the risk potential in a billion barrels of oil equivalent for Eastern Greenland is 31 boe; Northern Greenland, 3.3 billion boe; and Western Greenland/East Canada, 17 billion boe.
The South Greenland offshore area lies outside of the Arctic Circle, so it was not included in the USGS report.
Read the full Bloomberg article here: http://bit.ly/9awr2n
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