Tue, Sep 14, 2010 - Page 16 News List

The rush for Arctic oil

Greenland is a land apart — where many people welcome global warming, dislike Greenpeace, and hope the arrival of Big Oil will transform their lives. But at what price to this pristine wilderness?

By Terry Macalister  /  THE GUARDIAN, LONDON

Kenni Rende, a 44-year-old shop assistant at the Nota Bene electronics shop, is more positive about the prospect. “We have always believed there was oil and gas off this island; we’ve been waiting for something like this to happen for decades. I hope it will provide income for Greenland, so we can finance our way to becoming a more independent nation.”

His upbeat mood is, not surprisingly, shared at the Bureau of Minerals and Petroleum a few blocks away, where Henrik Stendal has been digesting the news of the Cairn find in a presentation room packed with rock samples and geological maps. “It is exciting ... This amounts to an appetizer for all oil companies to come here and do more exploration,” says Stendal, who is head of the bureau’s geology department. The affable rocks specialist claims not to have known about Cairn’s find until the company announced it on Aug. 24 with a simple statement: “First hydrocarbons discovered in Baffin Bay basin by T8-1 well, which has encountered gas.”

The release of drilling information is always sensitive. It can send a company’s share price soaring and act as a magnet for competitors. As a result, relations between small government and Big Oil are complex. The Greenland government is keen to keep the discovery’s momentum going and attract new investment; but it is also anxious not to upset Cairn and its City investors by speaking out of turn (when the Guardian quoted a foreign ministry official as saying he was “hopeful” of a positive drilling result the day before Cairn announced it, a government public relations adviser was quickly in touch to admonish me).

Cairn Energy’s founder and chief executive officer is Bill Gammell, a former Scottish rugby international and public-school friend of former British prime minister Tony Blair. His Edinburgh-based company, while not in the Shell or BP league in scale, likes to work in frontier areas and has already attracted a stream of loyal investors after striking oil in the Indian state of Rajasthan.

Speaking about Cairn’s Arctic find, Gammell said he was “encouraged that we have early indications of a working hydrocarbon system with our first well in Greenland, confirming our belief in the exploration potential.” Yet even such tentative enthusiasm was dampened by one worker on the rig who, asking to remain anonymous, said that there had been laughter aboard Cairn’s Stena Don drilling unit when newspapers and television began to report the discovery. “We thought the media had made it up until we saw the company’s statements,” said the rig worker, adding that the quantity found was little more than you might find if you drilled a hole in your back garden.

Cairn has dismissed this version of events and most industry commentators do not take it seriously. Tellingly, it is not what the majority of Greenland’s politicians and public want to hear either, determined as they are to loosen their sovereign ties with Denmark and, ultimately, establish independence.

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