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Ghexis newsletter No.15 - April 1999

 
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Newsletter No. 15 - April 1999
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Headlines:

A new licensing policy for Greenland - General introduction
Licence round offshore West Greenland
Open door regions
The KANUMAS preference areas
West Greenland – underexplored with exciting opportunities
Increased interest
Seeps on Nuussuaq show region is oil-prone
Licensing round in 1992 and open door policy
New data acquisition and licences
Further information

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Licensing round offshore West Greenland planned for 2001

Open door procedure re-established from 1 October 1999

Invitation to acquire new seismic data in 1999–2000


Map showing licence round and open door areas. Click to enlarge
Map showing licence round and open door areas

In April, the Government of Greenland and the Danish Minister for Environment and Energy authorised a licensing round that will be held in the year 2001 in areas offshore West Greenland between 63°N and 68°N. The closing date for applications is planned to be on 1 October 2001. Further, it was decided to open the door after 1 October 1999 for applications in the areas offshore West Greenland between 60°N and 63°N and between 68°N and 71°N and onshore on Disko–Nuussuaq, West Greenland, and in Jameson Land, East Greenland.

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A new licensing policy for Greenland

General introduction

To stimulate petroleum exploration around Greenland a new licensing policy has been developed in order to increase the possibilities of making discoveries which can be exploited commercially within the coming years. The policy provides a framework, licensing procedures, and a timetable for future oil and gas activities in Greenland.

The policy has been developed to take account of the current low oil price and with a view that the first offshore exploration well in more than 20 years will be drilled in the year 2000 in the Fylla licence area. In order to improve understanding of the hydrocarbon potential of West Greenland before the planned licensing round in
2001 it is considered important that the industry acquires additional seismic data in the seasons 1999 and 2000. For the next few years, exploration is planned to be concentrated in the areas off West Greenland south of 71°N and in the onshore areas of Disko–Nuussuaq, West Greenland and Jameson Land, East Greenland. Priority has been given to these areas because of their hydrocarbon potential and because of the environmental, safety and technological conditions encountered there.

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Licence round offshore West Greenland

The closing date for applications for licences in  the West Greenland offshore region between 63°N and 68°N is 1 October 2001. As the seismic coverage off West Greenland generally is low it is considered important to allow sufficient time for the seismic industry to acquire new data. Specific terms and conditions pertaining to the licences will be announced after the first exploration well in the Fylla licence area has been completed and well before the closing date for applications.

The round will be formally opened with an invitation letter on 1 March 2001. Before then, a nomination procedure will be conducted in the winter 2000–2001 during which potential applicants for licences will be invited to indicate their areas of interest. It is expected that nominated areas together with those covered by seismic surveys acquired in 1999 and 2000 will be included in the licensing round.

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Open door regions

In the offshore West Greenland areas between 60°N and 63°N and between 68°N and 71°N, an open door procedure will be in force after 1 October 1999. Applications will be considered each year during the period 1 October to 1 June. The specific terms for these areas are planned to be announced not later than 1 July 1999 together with a model licence.

For the Disko–Nuussuaq area onshore West Greenland it has previously been decided that all applications received before 1 October 1999 will be handled simultaneously. The specific terms are planned to be announced not later than 1 July 1999 together with a model licence. If no applications are received before the closing date, the area will afterwards be covered by the same open door procedure that operates offshore.

The open door procedure will also cover Jameson Land in East Greenland.

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The KANUMAS preference areas

The KANUMAS group consists of six major oil companies: BP, Exxon, Japan National Oil Company, Shell, Statoil and Texaco with Nunaoil as carried partner and operator. The group holds a preferential position in the areas covered by the seismic surveys which were acquired by the group in the period between 1991 and 1995. Further technological, geological and environmental investigations and studies are needed in these areas to make exploration and exploitation off North-West and North-East Greenland possible in the future.

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West Greenland – underexplored with exciting opportunities

Climate conditions less severe than northern North Sea

The sedimentary basins offshore southern and central West Greenland are more extensive than the entire Viking–Central Graben system of the North Sea. Extensive seeps of oil are known onshore and there are significant indications of the presence of hydrocarbons offshore, in one well and on many seismic lines. Yet, only six wells have been drilled and the total seismic coverage is only around 60,000 line kilometres, of which 37,000 km are of mid-1970s vintage. Thus, West Greenland is still underexplored, giving the possibility of making large discoveries.

Nuuk - the capital of Greenland, a town with modern facilities
Nuuk - the capital of Greenland, a town with modern facilities

Compared to other Arctic and northern areas, for example the continental shelf off Labrador, exploration conditions off southern West Greenland are less difficult, as the region is navigable and generally ice-free all year round and icebergs are rare. Furthermore, weather conditions are generally less severe than those of the northern North Sea.

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West Greenland – underexplored with exciting opportunities

Climate conditions less severe than northern North Sea

The sedimentary basins offshore southern and central West Greenland are more extensive than the entire Viking–Central Graben system of the North Sea. Extensive seeps of oil are known onshore and there are significant indications of the presence of hydrocarbons offshore, in one well and on many seismic lines. Yet, only six wells have been drilled and the total seismic coverage is only around 60,000 line kilometres, of which 37,000 km are of mid-1970s vintage. Thus, West Greenland is still underexplored, giving the possibility of making large discoveries.

Compared to other Arctic and northern areas, for example the continental shelf off Labrador, exploration conditions off southern West Greenland are less difficult, as the region is navigable and generally ice-free all year round and icebergs are rare. Furthermore, weather conditions are generally less severe than those of the northern North Sea.

Increased interest

After almost 20 years of no petroleum exploration, West Greenland has seen an increased interest for exploration, both offshore and onshore, in the past few years. Exploration originally started in areas offshore southern West Greenland in the early 1970s. A total of 37,000 km of seismic data were acquired and five wells were drilled in 1976 and 1977. However, all wells were at that time declared dry and exploration was discontinued in late 1978.

Drilling ship Pelican in the 70s
Kangamiut-1 well being drilled by 'Pelican' in 1976

Acquisition of seismic data offshore West Greenland

The Geological Survey, using government funding, initiated new investigations during 1990–92 by acquiring 6634 km of seismic data off West Greenland. Halliburton Geophysical Services Inc. (now Western Geophysical) acquired an additional 1915 km of spec data in 1990. Among other discoveries, one of the Geological Survey‘s seismic lines from 1992 revealed both very large, tilted fault blocks, and DHIs in the form of prominent flat-spots. The area over which this line was acquired later became known as the Fylla Structural Complex.

Acquisition of seismic data
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Seeps on Nuussuaq show region is oil-prone

Petroleum geological studies by the Geological Survey onshore central West Greenland documented seepage of oil in the Nuussuaq region in 1992. Additional extensive seeps were found during subsequent years and geochemical studies revealed the presence of five different types of oil. These discoveries show that the Nuussuaq Basin not only has an exploration potential of its own but also that the previous opinion that the Labrador–West Greenland shelf region contains only gas-prone source rocks has to be revised.

Nuussuaq
Geological section from Nuussuaq, West Greenland showing major unconformities in the Upper Cretaceous– Paleocene succession

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Licensing round in 1992 and open door policy

A licensing round was initiated in 1992 for areas offshore West Greenland south of 66°N but no applications were submitted before the deadline in January 1993. Unfortunately, the first spectacular seismic line over the Fylla Structural Complex was acquired too late to be available to industry before the closure of the round. In 1994, an open-door policy was introduced for both onshore and offshore areas south of 70°30'N in West Greenland and for Jameson Land in East Greenland. Under this policy, the Authorities would consider applications for exploration licences at any time.

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New data acquisition and licences

In May 1995, an exploration licence onshore Nuussuaq was granted to grønArctic energy inc., a small Canadian company. A 2996-m-deep exploration well (GRO#3) was drilled in 1996. The well was declared dry by the operator, but later quantitative log-interpretation by the Geological Survey of the upper, untested part of the well suggested high hydrocarbon saturations in sandstones. Due to problems in raising finance for the next part of their exploration commitments, grønArctic had to relinquish their licence in early 1998.

The Greenlandic–Danish state-owned oil company Nunaoil acquired speculative seismic data on a 10×15 km grid over the Fylla Structural Complex in 1994. These data confirmed the existence of the flat-spots discovered on the Geological Survey‘s line, and allowed mapping of their extent. Considerable industry interest was shown in Nunaoil‘s and the Geological Survey‘s data, and a licence covering 9487 km² was awarded in late 1996 to a consortium of four companies: Statoil (as operator), Phillips Petroleum, Dansk Olie- og Naturgas (DONG) and Nunaoil (as the state‘s participant, carried in the exploration phase). A site survey was carried out in 1998  and a minor seismic survey is planned for 1999. The Statoil group plans to drill the first exploration well in the year 2000.

The GRO#3 well onshore Nuussuaq, West Greenland in 1996
The GRO#3 well onshore Nuussuaq, West Greenland in 1996

The Geological Survey continued their regional investigations in 1995 by acquiring further 3769 km of seismic data whereas Nunaoil acquired 2115 km of spec data west of the Fylla Structural Complex in 1997. In June 1998, a new licence covering an area of 4744 km² west of Sisimiut was granted to a consortium consisting of Phillips Petroleum (operator), Statoil and DONG with Nunaoil as the state‘s participant. The evaluation of this area as prospective was again based on seismic lines acquired by the Geological Survey in 1990–92.  New seismic data will be acquired  over the licence area in 1999.

Apart from the programme carried out under the two offshore licences, two speculative seismic surveys were acquired in 1998 by Fugro-Geoteam and by Nunaoil. A group consisting of Fugro-Geoteam and Danpec has also initiated a project to reprocess seismic data from the 1970s on a non-exclusive basis.

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Further information

Further information regarding licensing policy, licensing terms, and legal and economic matters concerning exploration in Greenland can be obtained from the Bureau of Minerals and Petroleum in Nuuk. Enquiries about available data etc. should be directed to the Geological Survey of Denmark and Greenland (GEUS). Examples of seismic data owned by GEUS can be inspected at GEUS‘ offices in Copenhagen on a Landmark workstation. GEUS can also give presentations of the geology offshore West Greenland and of other areas in Greenland either in Copenhagen or at companies‘ own offices.

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BUREAU OF MINERALS AND PETROLEUM (BMP)
Government of Greenland, P.O. Box 930, DK-3900 Nuuk, Greenland
Tel.: +299 34 68 00, Fax.: +299 32 43 02, E-mail: bmp@gh.gl
Homepage: www.bmp.gl

GEOLOGICAL SURVEY OF DENMARK AND GREENLAND (GEUS)
Øster Voldgade 10, DK-1350 Copenhagen K, Denmark
Tel.: +45 38 14 20 00, Fax.: +45 38 14 20 50, E-mail: geus@geus.dk
Homepage: www.geus.dk

ISSN 0909-0630 



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Last modified: 10 March 2002 © GEUS
GHEXIS is published by GEUS in co-orporation with the Bureau of Minerals and Petroleum, Government of Greenland
GHEXIS publiceres af GEUS i samarbejde med Råstofdirektoratet, Grønlands Hjemmestyre
GHEXIS Newsletter No. 15