Norway's Statoil has been awarded a frontier exploration license for Block 6 offshore north-east Greenland, in the Arctic Ocean, with partners ConocoPhillips and Nunaoil.
Statoil is seeking to position itself long-term in the Arctic and sub-Arctic regions, and some estimates hold Greenland's offshore oil reserves at 20 billion barrels.
The license has a 16-year exploration period, and Statoil will hold a 52% interest in the block, with ConocoPhillips holding 35% and Nunaoil, 12.5%.
"We have been present in Greenland since the late 1980s and are constantly building experience and knowledge. We are taking a stepwise approach to the Arctic, building on more than 30 years of experience from the harsh environment of the Norwegian continental shelf and other Arctic and sub-Arctic regions. Adding this license to our portfolio is part of our long-term Arctic positioning and development of new technology is a pre-requisite for any future operations in this license," Statoil said in a statement.
Statoil will first pursue seismic acquisition and then proceed based on those findings.
"We recognize that this is a challenging area, but it is also potentially prospective. And we believe that Arctic resources in the future will become important to meeting the world's energy demand. Being in a frontier area, this license is a long-term project for Statoil and the company will follow its stepwise approach, not going faster than technology allows," the statement read.
Statoil oil has a long history of drilling in Arctic conditions in Norway, Russia, the US and Canada.
Statoil is also partner in three other licences west of Greenland in the Baffin Bay.
Environmental groups have protested plans to explore for oil in the Arctic, including in Greenland.
The government of Greenland, which is a self-ruled area of the Kingdom of Denmark, has said that environmental risks offshore drilling has been reduced due to modern technology.
By. James Stafford of Oilprice.com
James Stafford is the Editor of Oilprice.com More