Greenland Closes 2004 Licensing Round

In order to stimulate petroleum exploration, the Government of Greenland and the Danish Government in the middle of March 2003 approved a new hydrocarbon strategy for Greenland. The new strategy implies, that over a range of years, a number of license rounds can be carried out for areas offshore West Greenland. The implementation of license rounds has partly the purpose of giving the seismic industry an incentive to collect and market new seismic data, and partly, in extension hereof, facilitating the oil industry to evaluate the petroleum potential in the area.

Relying on the announced hydrocarbon strategy, the seismic industry has continued the years collection of seismic data offshore West Greenland. Thus, in 2003 alone, 9,000 km Of new seismic lines have been collected. In 2002, for the first time in ten years, a license round was carried out for offshore West Greenland, covering the area between latitudes 63 degrees North and 68 degrees North. As a result of this round, the Canadian oil company EnCana Corporation was assigned a new exploration and exploitation license for hydrocarbons in Greenland. The company is at present carrying out a comprehensive exploration inside the license area.

In accordance with the hydrocarbon strategy, a new license round is carried out in 2004 in 4 areas between 62 degrees North and 69 degree North offshore West Greenland. The license round was formally initiated with opening meetings in Copenhagen, Denmark and Houston, Texas, respectively April l and April 6 this year.

By the end of the closing date for applications, October 1, 2004, the Bureau of Minerals and Petroleum has received 1 complete application. The application for exclusive rights for exploration and exploitation of hydrocarbons in a specified area offshore West Greenland, comes from one of the worlds largest oil companies.

The application will be processed by the Bureau of Minerals and Petroleum and will be presented to the Joint Committee on Mineral Resources in Greenland. The Joint Committee will submit their recommendation to the Government of Greenland and the Danish Government, who jointly will decide on the granting of a license.

Jorgen Waever Johansen, Minister for Self-Governance, Mineral Resources and Justice, states:

"Greenland has now implemented two license rounds in two years, and the applications have shown that the authorities has been able to maintain the interest from the oil industry and the seismic industry.

In the light of the dry exploration drilling as late as in 2000. it is encouraging that the exploration activitv now again is strengthened.

Furthermore, inside the latest half year period, significant amounts of seismic data has been sold to a range of international oil companies, who have initiated a long-term strategic evaluation of the Greenland oil potential, aiming at new possible license rounds.

On this background it is my assessment, that the Government's license policy has shown itself to be right, and that we shall continue the objectives of the hydrocarbon strategy in the Years to come ".


Exploration for hydrocarbons offshore West Greenland was initiated in the beginning of the 1970s, and in the following years five exploration wells were drilled, of which one showed traces of hydrocarbons.

In 1992 the first license round was carried out. This license round did not result in granting of new licenses.

After a long range of years without exploration activities, The Geological Survey of Denmark and Greenland (GEUS) in 1992 registered oil seeps on the Disko Island in Northwest Greenland. In addition, in the following years the seeps were recorded over a wide area, extending from northern Disko through Nuussuaq peninsula to the southern part of Svartenhuk peninsula. In 1996, the Canadian company GrenArctic Energy Inc., drilled an exploration well on Nuussuaq, which showed the existence of hydrocarbons.

In 2000, a group led by Statoil drilled an exploration well, Qulleq-1, offshore central West Greenland. Even though the well did not strike hydrocarbons, it provided much valuable new information of importance for the planning of future exploration activities.

In the period 1999-2003, commercial geophysical companies acquired extensive new speculative seismic data offshore West Greenland, in order to sell these data to the oil industry in connection with license rounds.

The new seismic data have revealed the existence of very large sedimentary basins offshore West Greenland. An integrated evaluation of seismic, gravity, magnetic and satellite data - primarily collected trough the latest five years -confirms the possible existence of a very large interconnected basin system with petroleum deposits along the so-called Ungava Fault Zone. Thus, this basin system links the petroleum deposits in the Labrador Sea south of 60 degrees North, with the collected oil seeps on Disko-Nuussuaq, all the way up to 71 degrees North.

As a result of the 2002 license round, the Canadian oil company EnCana Corporation was assigned a new exploration and exploitation license for hydrocarbons in Greenland. The assigned area (the Atammik license) covers 3,985 square kilometers, and is placed in a maritime area about 200 km northwest of Nuuk in West Greenland. Geologically, the area covers parts of the Nuuk Basin. No drillings have formerly been carried out in the license area.