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Greenland dreams of oil riches on road to independence

Greenland, the biggest island in the world with 80 percent of its surface covered in ice, is believed to be home to lucrative natural resources, in particular oil and gas, according to geologists.
by Staff Writers
Nuuk, Greenland (AFP) Dec 9, 2008
With a recent vote on self-rule fresh in hand, Greenland now controls the potentially lucrative natural resources under its icecap, boosting hopes of political and economic independence.

In a referendum on November 25, Greenland's voters overwhelmingly approved a proposal on self-rule, paving the way for the Arctic island's full independence from Denmark someday, after 300 years of Danish rule.

The new self-rule status, which will take effect in June 2009, gives Greenland's local government control over 32 policy areas hitherto controlled by Denmark, including its resources under its seabed and icecap.

"The mineral and petroleum sector will be the first one we will take charge of next autumn, because it will help generate revenues to finance the management of other policy areas" taken over from Copenhagen, the head of the local government, Hans Enoksen, told AFP.

Greenland, the biggest island in the world with 80 percent of its surface covered in ice, is believed to be home to lucrative natural resources, in particular oil and gas, according to geologists.

The US Geological Survey estimated in 2007 that there may be as many as 31.4 billion barrels of oil in the northeastern part of the island.

Major oil companies, such as US groups Chevron and Exxon Mobil and Canadian companies EnCana and Husky, are already prospecting on the island, keen to find a new wealth of resources despite the difficult and costly efforts required because of the harsh climate.

And on the eve of the referendum, the Scottish company Cairn Energy inked a deal in Nuuk for two oil prospecting licenses off southern Greenland.

"Oil and gas exploration is one of the cornerstones of Greenland's future economy," Greenland's Minister for Minerals and Petroleum Kim Kielsen said.

Global warming, which is occurring in the Arctic at twice the rate as in the rest of the world, has environmentalists gravely concerned for the future of the planet.

But it will "have a positive effect on future oil prospecting," said Joern Skov Nielsen, head of the Mineral and Petroleum Bureau.

He said the melting icecap meant there would be more ice-free days in the region, which would bring down energy production costs.

"Oil companies' interest has never been as big as it is now," he said, noting that "11 prospecting and exploration licenses have been attributed in the past two years between the 59th and 71st parallel, a zone that covers some 130,000 square kilometers" (50,193 square miles).

The zone running west of Disko island and the Nussuaq peninsula to Canada's maritime border was "currently the most promising," the head of research at Danish energy company DONG, Arne Rosenkrands, said.

Flemming Christiansen, the deputy head of Denmark's and Greenland's Geological Survey, said traces of oil have been found under the seabed since the 1990s.

"Five types of hydrocarbons have been analysed, notably on rocks found on the Nuussuaq peninsula, and one of them could come from source rock," or undersea rock that contains oil, Christiansen said.

But five test drillings conducted in 1976, 1977, and 1990 were fruitless.

In addition to the interest in black gold, Greenland has seen a rush on prospecting licenses for minerals such as gold, diamonds, rubies, iron, zink, lead and uranium.

"For 2007 alone, we registered a 70 percent rise in requests from mining companies, which is a record," Kielsen said, adding that he expected five new mines to open in coming years.

Meanwhile, Greenland authorities are focusing efforts on educating engineers so the island will "not be entirely dependent on foreign labour" in the future, Kielsen said.

"Education is and will be the key to our independence," he added.

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