Greenland is the world’s largest island. Its land area is 2.2 million km2, but 1.8 million km2 are covered by the Greenland ice sheet. Greenland’s northernmost extremity is Cape Morris Jessup, which is also the northernmost land area in the world, situated less than 730km from the North Pole. Since February 2019, Greenland has a population of 55,877.
Greenland is an autonomous part of Denmark (the Community of the Realm), which comprises Denmark proper, Greenland and the Faroe Islands (situated about halfway between Scotland and Iceland).
Greenland had home rule from 1979 to 21 June 2009 when it obtained self-government after a referendum and negotiations with the Danish government. The Danish Act No. 473 of 19 May 2009 on Greenland Self-Government entered into force on 21 June 2009. Greenland has extensive self-government under the Act, which for most areas of government either transferred or provides for the transfer of the legislative power from the Danish parliament to the Greenland parliament and the executive power from the Danish government to the Greenland government.
As part of self-government, Greenland owns and has the right of disposal of all mineral resources, including oil and gas, in its land, territorial sea and continental shelf areas. Under the Greenland Self-Government Act, it may be decided that all legislative and executive powers in the mineral resources area including oil and natural gas shall be transferred from the Danish state to Greenland’s self-governing authorities. The transfer was decided by the Greenland parliament on 23 October 2009 and became effective on 1 January 2010. In connection with the transfer of powers, the former Danish Act on Mineral Resources in Greenland, which regulated prospecting, exploration and exploitation of oil, gas and minerals, was repealed and replaced by the present Greenland Parliament Act No. 7 of 7 December 2009 on Mineral Resources and Activities of Importance Thereto (the Mineral Resources Act). The main provisions on oil and gas licences in the Mineral Resources Act are based on, and correspond to, the provisions on such licences in the formerly applicable Danish Mineral Resources Act. All prospecting, exploration and exploitation licences granted under the former Danish Act are still effective but are now governed by the present Greenland Act. Exploration for oil and gas began in the early 1970s in offshore areas of west Greenland. Comprehensive seismic surveys were carried out, and almost 21,000 kilometres’-worth of reflection seismic data were acquired. In 1976 and 1977, five exploratory wells were drilled. Exploration was discontinued in late 1978. All wells were declared dry by the operators.
In 1997, the Geological Survey of Denmark and Greenland (GEUS) began to reinvestigate the well data and found that they suggested a hydrocarbon discovery in the Kângamiut-1 well.
A licensing round for offshore areas of west Greenland was held in 1992 to 1993. Because no applications were submitted, an open-door licensing policy was introduced in 1994 that covered both onshore and offshore areas south of 70°30’ N in west Greenland and Jameson Land in east Greenland.
Subsequent investigations were carried out by Nunaoil A/S (Nunaoil), a company then owned jointly by Greenland’s home rule authorities and the Danish state, and now owned by Greenland’s self-governing authorities. The investigations confirmed the existence of cross-cutting reflectors. Based on these discoveries, a licence was awarded in 1996 to a consortium consisting of Statoil, Phillips Petroleum, DONG and Nunaoil. In 1998, a new licence was awarded to the same participants.
Licensing rounds were held in 2001, 2002, 2004, 2006 and 2007. In April 2008, an open-door licensing procedure was launched, which covered offshore areas in west Greenland and around Cape Farewell, the southernmost extent of Greenland. On 1 January 2010, this was succeeded by an open-door licensing procedure under the present Greenland Mineral Resources Act. The 2010 open-door licensing procedure covers offshore areas in the southern part of west Greenland and around Cape Farewell and onshore areas in Jameson Land in east Greenland.
In October 2009, the Greenland government issued an invitation to apply for licences for exploration and exploitation of hydrocarbons (oil and natural gas) in two licensing rounds.
- The Baffin Bay Licensing Round 2010 covered offshore areas of 151,358km2 off west Greenland. The areas are three times the area of Denmark proper. The areas were divided into 14 blocks of between 8,000km2 and 15,000km2. By the application deadline on 1 May 2010, Mineral and Licence Safety Authority (formerly the Bureau of Minerals and Petroleum) had received 17 applications from 12 international oil companies, including some of the world’s major oil companies.
- The Greenland Sea Licensing Round 2012 to 2013 covered offshore areas of 50,000km2 off east Greenland. Companies that are members of the Kanumas Group could submit applications for licences in a special pre-round, which ended on 15 December 2012. The pre-round covered areas of 30,000km2 designated by the Greenland government in the ordinary round area of 50,000km2. Subsequently, any company could submit applications for licences in the remaining parts of the ordinary round areas in a subsequent ordinary licence round.
In December 2013, the government announced that it had decided to grant exclusive exploration and exploitation licences to three consortia in four blocks in the Greenland Sea, based on applications from the 2012 to 2013 Licensing Round.
In 2014, licensing rounds were held regarding Jameson Land and south-west Greenland. In 2015, two exclusive onshore exploration and exploitation licences were granted on Jameson Land, covering an area of more than 4,200km2. No licensing rounds were held in 2015.
In 2014, the government published its Oil and Mineral Strategy for 2014-18. In accordance with the strategy, a licensing round for the onshore areas of Disko Island and Nuussuaq Peninsula, west Greenland, was held in 2016. In 2016, the government announced a new open-door procedure for the onshore areas on Disko Island and in Nuussuaq Peninsula in west Greenland. The open-door procedure was carried out during 2017-18 with the application deadline of 31 December 2018. Applicants would be granted exclusive licenses for exploration and exploitation of hydrocarbons for the offered areas under the procedure. Since February 2019, no further news about the open-door procedure has been published.
Furthermore, a licensing round for offshore areas in Baffin Bay was held in 2017. Since February 2019, information about any applications regarding the area in Baffin Bay remains to be published. In late 2018, a licensing round for offshore areas in Davis Strait was carried out. The application deadline was 15 December 2018. Since February 2019, no information on the licensing round has been published. The Davis Strait licensing area covers almost 90,000km2 and parts of this area were previously up for bidding during the 2004 and 2006 licensing rounds. Currently, eight offshore wells have been drilled in the area.
So far, the exploration activities have led to no licensee initiating any exploitation (production) activities. Many parts of the Greenland continental shelf area are still relatively unexplored. However, exploration for oil and gas has increased considerably in recent years, and a large number of licences for exploration and exploitation of oil and gas have been granted.
Since March 2018, an offshore area of around 53,000km2 has been covered by hydrocarbon exploration and exploitation licences. An area of around 4,200km2 was covered by onshore hydrocarbon exploration and exploitation licences. Since December 2017, 13 hydrocarbon exploration and exploitation licences were in force, five of which expired between 31 December 2017 and May 2018. Since February 2019, eight of the licences remain in force; however, three of the licences’ status are designated ‘surrender is ongoing’. In 2018, 10 hydrocarbon prospecting licences were in force; however, seven of the licences expired in 2018. Since February 2019, only three licences remain in force.
Participants in the exploration and exploitation licences are:
- Capricon Greenland (two licences);
- ConocoPhillips Global NVE Greenland Ltd (one licence);
- Shell Greenland (two licences);
- ENI Denmark BV (two licences);
- Statoil Greenland (one licence);
- Chevron East Greenland Exploration (two licences);
- DONG E&P Greenland (one licence);
- BP Exploration Operating Company Ltd (two licences);
- Greenland Petroleum Exploration Co Ltd (two licences); and
- Nunaoil (eight licences).
Participants in the prospecting licences are:
- GX Technology (one licence);
- EMGS ASA (one licence); and
- CASP (one licence).
International oil companies from Europe, the United States and Canada have been granted offshore oil and gas licences in Greenland. These companies are interested in oil and gas exploration and exploitation in Greenland for a number of reasons, one of them probably being the assessments of the petroleum potential in both west and east Greenland made by the US Geological Survey (USGS). For example, one assessment was issued in 2007 (Fact Sheet 2007-3077, August 2007) when the USGS completed an assessment of the potential for undiscovered, technically recoverable oil and gas resources in the east Greenland Rift Basins province. The USGS estimated the mean undiscovered, conventional petroleum resources in that province to be approximately 31,400 million barrels of oil equivalent of oil, gas and natural gas liquids. However, because of the environmental conditions on Greenland it is too expensive and troublesome to exploit the oil at this moment in time.
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