At a signing ceremony held yesterday in Greenland, Cairn Energy Exploration Director Dr. Mike Watts compared himself to Erik the Red, stating that the Capricorn exploration team could provide Greenland with its first commercial oil production.
"Then 'Mike the Gray' will have done his job," said Watts, referring to the opportunity for success recently allotted to Cairn with the acquisition of four oil and gas exploration blocks offshore west Greenland.
Two of the blocks awarded are in the Disko West Round, and the other two are located in the Open Door Area. In addition, Cairn has acquired a 40% interest in two west Greenland offshore blocks operated by EnCana.
The total combined area of the leases constitutes approximately 52,000 kilometers squared, which is equal to 231 North Sea blocks. To date, only six offshore wells have been drilled in the area: one in 2000 and the other five in the 1970s.
Watts called Greenland's offshore fields "a true frontier country where oil and gas exploration is at an embryonic stage. We both recognize and believe in the potential of Greenland.
"The evaluation of all six blocks will greatly enhance our understanding of the West Greenland basin and its potential for hydrocarbons," said Watts.
Cairn's acquisition coincides with an announcement that Greenland has taken the initial steps to secure its autonomy from Denmark. According to a Dow Jones report, a November referendum is in place that could grant Greenland the desired autonomy as early as June 2009.
Annual subsidies received by Greenland from Denmark total US$630 million. Commercial production of hydrocarbons has the potential to cover that subsidy and more.
Oil companies' interest in Greenland and other northern territories has arrived with the effects of global warming, which has helped to 'break the ice' and provide exploration and recovery operations that were heretofore cost-prohibitive if not impossible.
At the signing ceremony, Watts stressed the importance of teamwork in the Greenland exploration endeavor, stating that in each block Cairn has partnered with NUNAOIL, the national oil company of Greenland, to make the hydrocarbon hunt a success.
The official stance of the Greenland Bureau of Minerals and Petroleum is that it "engages in converted efforts to promote Greenland's mineral potential … attempting to sharpen private-enterprise interest in exploration activities."
In the end, the partnership between Greenland and Cairn should be a match made in heaven. After all, Cairn's motto is "Discovering hidden value through entrepreneurial exploration."
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