Greenland Minister: Will Issue New Oil Exploration Licenses
COPENHAGEN - Greenland's new government has clarified its stance on allowing more offshore oil exploration with the small Arctic territory's new minister of industry and minerals saying that new licenses will be handed out as current licenses are turned in.
Jens-Erik Kirkegaard, in an interview at a conference in Copenhagen, said "we would like to stick to the current level of activity." He said more licenses will be handed out--including licenses for new areas--once current licenses are turned in, and more licenses will be granted after old ones are turned in 2013 and likely also in 2014.
The total level of exploration activity in Greenland isn't expected to increase or decline for the time being.
Mr. Kirkegaard's statements differ from the stance that the Social Democratic Siumut party--under newly installed Prime Minister Aleqa Hammond--was expected to take. In March, after her party took the largest number of seats in parliamentary elections, coalition agreements said that the government would be "reluctant" to offer more licenses and that existing licenses would be under more scrutiny.
The disclosure was greeted with optimism by environmental activists such as Greenpeace due to the impression that Greenland would halt exploration activities. Mr. Kirkegaard, however, sought to clarify the government's position.
Greenland technically belongs to the Kingdom of Denmark and relies on the Danes for massive subsidies needed to keep public finances afloat. However, Greenland operates under a self-rule regime and is looking to better develop its massive mineral and oil reserves so that it can become more financially independent from Denmark.
Among the companies holding licenses in Greenland are Royal Dutch Shell PLC, Statoil ASA and A.P. Moller-Maersk AS. The U.S. Geological Survey has estimated that the Greenlandic basin contains around 17 billion barrels of oil, but so far none has been extracted for export.
Dealing with Greenland's rich collection of resources will be atop Ms. Hammond's agenda after her Siumut Party collected 43% of the votes in a March election. The Inuit Ataqatigiit, or IA, previously ruled Greenland and, over the past four years, has worked to open up the secluded country to mining companies and others capable of advancing a variety of mining projects, including a plethora of rare-earth minerals, natural gas and other resources.
Ms. Hammond has vowed to put in place more-stringent financial requirements on foreign companies looking to eventually profit in Greenland. In March, she told The Wall Street Journal that she plans to demand royalties from companies as they set up exploitation activities.
Copyright (c) 2012 Dow Jones & Company, Inc.
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