Statoil wants to drill off Greenland

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Norway’s biggest company, Statoil, is keen on Arctic oil exploration and now is turning its sights back to Greenland, reports newspaper

Dagens Nærinigsliv (DN) . “We think Greenland can be a hot spot,” investor contact Lars Troen Sørensen told DN.It can be hot in more ways than one, not least because oil exploration in sensitive Arctic areas remains controversial on environmental grounds. Statoil, though, is keen to build on its years of offshore experience in the treacherous North Sea, and claims its safety track record is good.

The company, which recently reported a sharp decline in profits, is also keen on developing new areas of exploration. Statoil thinks the seas off Greenland can contain large quantities of undiscovered oil and gas deposits.

It intends to take part in the next round of offshore bidding in the area, expected in about three years.

Oil analysts support Statoil’s plans. Based on the offshore prospects in the Arctic, “it’s undoubtedly sensible for Statoil to get active off Greenland,” analyst Trond Omdal told DN during an industry seminar in Oslo on Tuesday.

The US Geological Survey (USGS) regards the area off Greenland as promising, believing it may contain the world’s largest oil and gas fields. The USGS predicted in 2008 that as much as 48.4 billion barrels of oil equivalents could be found around Greenland.

“I can’t say what expectations we have for Greenland, but our geologists have evaluated it as a possible hotspot,” Sørensen told DN. Statoil’s production in the North Sea, meanwhile, is falling and the company is anxious to replace it with new sources of oil and revenue.

Statoil drilled one well off Greenland nine years ago, though, and it was dry. Now it’s interested in trying again, on the basis of high risk but high potential as well.