Oil companies turning their backs on Greenland

Oil companies turning their backs on GreenlandGreenland’s hopes of developing into the world’s next big oil excavation centre are turning sour, with three large energy companies pulling the plug on initiatives in the seas around the autonomous country.

Norwegian company Statoil, Denmark’s Dong Energy and GDF Suez of France have all reversed their decisions to excavate oil in the region, while energy giant Shell and Scotland’s Cairn Energy have put plans on hold for at least two years while they consider if it’s a worthwhile project.

Many players are now of the opinion that investing in oil excavation is far too expensive given the uncertainty and the risks involved in Greenland.

GDF Suez’s chief for Greenland, Johannes Finbourd, while refusing to rule future programmes out, explained that looking at the current market in addition to the fact there is little infrastructure, a challenging climate and environmental demands, it would be extremely expensive to excavate the oil fields by Greenland.

Cairn Energy outlaid an estimated seven billion kroner on a number of unsuccessful drilling initiatives in 2010 and 2011 and has since shut down its offices in the capital Nuuk and does not intend to reopen them.

However, Greenland residents remain hopeful that the country will eventually realise its potential as an oil-producing nation.

The Arctic country’s Bureau of Minerals and Petroleum acting chief Jorgen T Hammeken-Holm acknowledged their place as a “frontier country” when it came to oil excavation and admitted that little would change that this summer, but noted that Greenland was very large so if there was no oil in one location, there would certainly be other opportunities in another.