Nobody is watching. And billions are at stake. Greenland is in the spotlight again
In the eastern part of Greenland – in one of the most pristine regions of the Arctic – American ships will soon unload approximately 300 containers with bulldozers, drilling rigs and other heavy equipment that will be used to search for oil in wild, uninhabited areas.
Contrary to Greenland's decision in 2021 to completely suspend new oil exploration, the American company Greenland Energy Company is currently in the process of raising capital on the US stock exchange for a new project in the eastern part of the island.
The decision was clear, but the game continues. And its effects could reach far beyond Greenland.
Thanks to the merger with several companies and the planned stock exchange debut on March 25, Greenland Energy Company will have an amount of 500 million crowns (approx. PLN 290 million) allocated for a new oil project in the Scoresby Sund fjord area (Greek: Kangertittivaq) – the largest fjord system in the world.
Location KangertittivaqGoogle Maps / Google Maps / Archive private
According to the prospectus, these funds are to finance the construction of a five-kilometer road leading from the temporary port through wilderness areas to the place where two oil wells, technical infrastructure and temporary housing facilities for employees will be built.
American foreign policy is largely shaped by the interests of multinational corporations. Projected oil deposits in Greenland and strategic raw materials play a key role in Donald Trump's Arctic strategy
– he emphasizes.
However, the professor is afraid that the potential profits from the project will not go to the inhabitants of Greenland, but to foreign investors.
If Greenland is not careful with future resource extraction, history may repeat itself and the real benefits to society will disappear
Winther warns.
“This project is more than oil”
According to the company's director, oil industry veteran Robert Price, the project's ambitions go far beyond just oil extraction.
This project is about more than oil. This is about the economic independence of Greenland, the energy security of the US and Europe, as well as the potential development of other resources. This could change Greenland in much the same way that oil changed Norway or Alaska
— he said in an interview on March 17, given in connection with the company's listing on the stock exchange.
The project is possible because the company has taken over three existing oil licenses in Greenland and intends to use them to start exploration work.
The three licenses are located in the Jameson Land region, over 400 km north of the Arctic Circle, completely isolated from the outside world. The area is protected from the harsh Arctic climate by high mountains in the west and the world's largest fjord system in the south.Journalists of the Danwatch portal / Danwatch
These licenses remain valid even though Greenland has decided to halt new oil projects in 2021 for climate and environmental reasons.
However, undoing them is not easy.
It is a conscious decision of the Naalakkersuisut (Government of Greenland) not to withdraw oil and gas exploration and production licenses already granted, as this would amount to expropriation and would require the payment of compensation.
– explains Greenland's Minister of Natural Resources, Naaja Nathanielsen.
In addition to climate issues, the 2021 analysis also found that the profitability of such projects is low — in fact, it is less than half the expected return for oil companies.
Green light despite opposition
To obtain an exploration license, a company must meet a number of requirements – first of all, prove its technical and financial capabilities.
Once you have obtained your license and met all conditions, Greenland – under current regulations – cannot stop drillingexplains the minister.
The company has a valid license, but all activities require applications and approvals. If someone takes action without consent, Naalakkersuisut will respond
– adds Naaja Nathanielsen.
According to Greenland Energy, contracts for drilling equipment, transportation and infrastructure are already in place. The plan is to begin drilling in the Jameson Land region later this year.
The equipment will be prepared in Montreal before August and then transported to Greenland at the end of the summer. The first well is scheduled to start in October, and each drilling will take approximately 30 days
says Robert Price.
13 billion barrels of oil
Robert Price claims that the area may contain up to 13 billion barrels of oil – which puts it on par with the largest known deposits in the world. These estimates are based on historical data, including: collected by the Danish-Greenland Geological Survey (GEUS).
The two planned wells are to reach several kilometers into the earth to check whether oil extraction will be economically viable.
Most likely, we will need a larger partner or investor who will take care of the full development of the deposit. Our task is to prove the existence of resources through the first drilling
Price explains.
Greenland Energy has hired Ashiq Merchant, who has many years of experience at BP, as its financial director.
The company's shareholders include as many as 40 hedge funds, which usually do not invest out of conviction in the projects, but are guided by the possibility of profit resulting from the financial structure.
Danwatch attempted to obtain answers to a number of questions from Greenland Energy Company, but the company did not respond to repeated contact attempts.
