Market forces have everything to do with getting more oil out of the ground and getting it out more safely. Just consider what’s happening in Greenland these days.
Last week, Greenland drew strong interest from international oil companies for the island’s fourth round of concessions, west of Disko Bay, which covers a 92,000 sq km area north of the Arctic Circle.
“We know that we have oil. We hope we have it in profitable amounts,” Greenland’s Oil Minister Joergen Waever Johansen said July 18 at the start of a 3-day meeting with oil companies in Ilulissat, on Greenland’s west coast.
“Results from numerous investigations into the potential in the region...have been very encouraging,” said Johansen. Offers for the concessions must be lodged by Dec. 15, and the results are expected to be published next March.
Another North Sea?
Another official said Greenland believes the Davis Strait has the potential to become another North Sea. “We think there are many oil fields holding 500 million bbl or more,” said Jrn Skov Nielsen, the top bureaucrat with Greenland’s Bureau of Minerals and Petroleum.
So far, nobody knows exactly what’s there. Calgary-based EnCana Corp. became the first and only company to hold a license in the region when it bought rights to the Attamak and Lady Franklin blocks in 2002 and 2005 (see map, May 8, 2004, p. 40).
Reports say EnCana’s blocks may hold reserves ranging from 400 million to 1.2 billion bbl of oil. EnCana spokesman Alan Boras declined to comment on those figures. “We haven’t put estimates on it but it would need to be sizable-more than 100 million bbl-in order to invest the capital in a well,” he told Canada’s National Post.
Richard Dingwall, an arctic exploration expert and geologist with Mosbacher Energy Co. in Calgary, said geologists have long wondered if Greenland could match offshore Newfoundland for potential (OGJ, June 19, 2006, p. 29).
The big question
“The big geological question is at what point did Greenland separate from North America and is the geology-the source of the oil-from the same structure as Newfoundland’s Orphan and Jean D’Arc basins?” Dingwall told the paper.
“One thing is certain, if that part of Greenland were to be developed, it would have to be done so by the largest companies in the world because costs related to logistics would be immense,” Dingwall said.
The offshore blocks under consideration have also caught the attention of environmental activists such as Tarjei Haaland, a member of Greenpeace Denmark who said it was “insane” to think about oil exploration in the sensitive environment.
“We all know that it’s an extremely difficult region to work in and if there is an oil disaster in the area, it can be harmful,” Haaland said. He suggested money devoted to oil exploration would be better spent on developing alternative fuels.
Don’t environmentalists always say such things?