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Greenland sees oil as key to independence

Financial Times

By Andrew Ward in Stockholm and Sylvia Pfeifer in London

Several of the world’s biggest oil companies are vying for access to Greenland after a gas discovery this week raised expectations for offshore exploration around the Arctic island nation, in spite of environmental concerns over drilling in an area known as “iceberg alley”.

UK-based Royal Dutch Shell and Statoil of Norway are among those bidding for licences as the Greenland government seeks to cash in on what experts believe could be among the world’s largest untapped hydrocarbon reserves.

However, the prospect of an oil rush 400km north of the Arctic Circle is alarming environmentalists, who warn that an oil spill in such cold and remote waters could prove more devastating than the rupture of BP’s Macondo well in the Gulf of Mexico.

Critics say Arctic drilling is fraught with risks from drifting icebergs to hostile weather in one of the world’s most pristine wildernesses. Yet, as global oil companies scramble for fresh reserves to meet rising demand, analysts say the region is too rich in resources for the industry to ignore. Wood Mackenzie, the consultancy, estimates there could be 20bn barrels of oil and gas in Greenland – part of the Arctic-wide reserves the US Geological Survey believes could account for a quarter of the world’s undiscovered oil and gas.

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