News / Europe

Greenland Government to Rein in New Oil Exploration

Greenland's incoming Prime Minister Aleqa Hammond, in Nuuk, Greenland, March 26, 2013Greenland's incoming Prime Minister Aleqa Hammond, in Nuuk, Greenland, March 26, 2013
Greenland's incoming Prime Minister Aleqa Hammond, in Nuuk, Greenland, March 26, 2013
Greenland's incoming Prime Minister Aleqa Hammond, in Nuuk, Greenland, March 26, 2013
Greenland's incoming government believes that the country has a sufficient number of oil licenses and it will be cautious about awarding new permits, the next mining and oil minister said on Wednesday.
The statement by Greenland's new coalition led by the Siumut party underscores the possibility of a more difficult investment climate for foreign companies eager to exploit the country's largely untapped mineral and oil resources.
The opening of the country of 57,000 people to international miners and oil firms has aroused concern among its indigenous Inuit people, many of whom rely on fishing for a living and fear exploitation of resources and risks of pollution from heavy industries.
"The current number of licences is sufficient for Greenland - it is the natural size for the number of Greenlanders,'' Jens Erik Kirkegaard, due to become the new mining and oil minister in April, told Reuters.
"We are going to be more cautious in the awarding of offshore oil licenses,'' Kirkegaard added. "We will honor existing contracts. There will be no complete lockout.''
With sea ice thawing and new shipping routes opening in the Arctic, the former Cold War ally of the West has emerged from isolation and gained geopolitical attention from the likes of Beijing and Brussels, thanks to its untapped mineral wealth and potential offshore oil and gas.
Government officials say Greenland's northeast offshore fields could have 31 billion barrels of oil and gas, while the west, including Canadian waters, could hold 17 billion barrels.
Drilling in the western offshore region in 2010 and 2011 failed to yield any discoveries in spite of a $1.2 billion campaign led by British explorer Cairn Energy.
The outgoing government had expected to announce within the next two months the results of bidding on 11 blocks on the remote northeast - but Kirkegaard said that this would now be revised. He gave no more details.
Aleqa Hammond, who will be the new prime minister, has also said she would revise a law on allowing big-scale miners to employ cheap foreign labor and pass a law requiring foreign miners to negotiate deals with trade unions.
She also said she would cut taxes on company profits but raise royalties.
On the other hand, she would lift a ban on mining radioactive materials that stopped some plans for rare earths deposits, crucial in 21st technology like smartphones.

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