Greenland Opens Offshore Areas for Drilling
Declaring Greenland “back on the oil track,” the Danish territory’s government reported Wednesday that it is opening up three new offshore areas for exploration.
“With the new geological data pack and government take structure, and the very promising petroleum potentials, I believe that Greenland has become one of the most attractive frontier regions in the world for oil exploration,” remarked Steen Lynge, Greenland’s minister of foreign affairs and energy, in a written statement emailed to Rigzone.
The Oil and Gas Department of Greenland’s Ministry of Industry, Energy, Research and Labour stated the new areas cover an area on the west coast from 75 degrees 7 minutes north latitude to 56 degrees 3 minutes north latitude at the southern part of the island territory. The ministry noted that its new oil strategy “reduces geological uncertainty” and gives “first movers a very attractive investment package.”
Developed with national oil company Nunaoil and the Geological Survey of Denmark and Greenland, the Oil and Gas Department pointed out that it has conducted a resource assessment of the territory with all available geological data. It stated the analysis underwent Norwegian Petroleum Directorate quality control measures and shows “several very promising areas,” particularly in the Baffin Bay area.
Greenland’s government is offering the assessments and geological data packs free of charge to petroleum exploration companies, and it has modified its investment incentives to companies. The Oil and Gas Department stated that its revamped investment package for first movers under the Open Door Procedures:
- removes Nunaoil as carried partner
- reduces turnover and surplus royalties, decreasing the government’s take from 51.3 to 40.6 percent.
“By offering the new and comprehensive data pack, along with the reduced government-take model, the Government of Greenland is offering the best framework conditions ever offered in Greenland for companies who engage in the exploration for oil and gas,” the department stated.
The government agency added that it has no plans to ease its demanding health, safety and environmental standards – similar to those applied in the North Sea and Arctic regions.
“Environment and safety are of course of paramount importance for Greenland and an area where we will not compromise,” commented Lynge. “Therefore, Greenland is taking inspiration from our Arctic neighbors on HSE standards and I am confident that the safety measures are broadly embraced by the industry as they successfully have applied them for several years.”
The Oil and Gas Department noted that Greenland plans to open two new license areas off the territory’s east coast in 2021 and 2022.
The resource assessment and data pack are available from a government website.
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