Statoil explores exit from west Greenland explorations

Norway’s largest oil company Statoil has announced it is considering pulling out of operations in west Greenland.

This comes after experts claimed in a report last week that the country’s mineral reserves alone were not enough to guarantee economic independence from Denmark, of which it is currently an autonomous dependent territory.

The report says that Greenland would need to be able to operate 24 large-scale mines, costing around €670m (£552m) each, in order to cover the costs of the country’s large welfare bill. Greenland currently has two mines, and this, combined with sharp drops in commodity prices, has resulted in the experts saying economic independence is “unrealistic”.

“There is nothing that implies that minerals can finance economic independence for Greenland in the coming years”, Minik Rossing, geology professor at Copenhagen University and chairman of the expert group, told the newspaper Politiken.

Greenland’s hopes of economic independence were also dashed back in 2011 when Cairn Energy spent around $1 billion (£610m) dollars in a bid to pump crude oil from possible reserves, but the efforts failed to make any significant discoveries.

According to Statoil, a lack of resources, along with the rising cost of exploration, which includes obtaining exploration licences, have led it to consider “cost-cutting” exercises in Greenland.

Last year, London Mining was granted a 30-year licence to build a large iron ore mine in the country, which will be the largest industrial project that it has ever housed.

Further reading:

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