Greenland Government approves oil drilling program for 2011

The Greenland Government has on its cabinet meeting today approved an application from the Scottish oil company Cairn Energy Plc to drill up to seven oil exploration wells offshore West Greenland in 2011. Within the 7 approved drill sites Cairn will drill 4 wells. The drilling season for the northern region west off Disko-Nuussuaq will end on the 1 st of October 2011. For the southern region west of Nuuk the drilling season will last until the 1 st of December 2011.

All oil activities in Greenland must be carried out in accordance with best international practice. Activities can only be approved if it is documented that the health, safety, environmental and emergency procedures are at the very highest level.

Minister for Industry and Mineral Resources Ove Karl Berthelsen issues the following statement:

- With this approval Greenland moves towards a possible discovery of commercial oil and gas reserves. The Greenland Government is confident that Cairn Energy will comply with our terms and conditions. Cairn’s drilling operations in 2010 were carried in full compliance with the high requirements in relation to health, safety, environment and emergency preparedness. The extensive inspection program that were carried out by BMP, NERI and Norwegian advisors in 2010 continues during this years drilling program

Requirements for approval
The permit is granted in accordance with best international standards, including Norsok standards for drilling operations, procedures, equipment and more. Furthermore ice-management and environmental regulation are in accordance with best Arctic standards.

In addition to requiring compliance with best international standards Greenland requires for contingency reasons that two MODU’s (drilling rigs/ships) are present in the region during the drilling season. This is a manifestation that Greenland takes a lead in setting high operational standards. It is also a requirement that drilling operations must end several months before sea ice enters the region.

Oil Spill Contingency
A 3-tier oil response plan in accordance with best international practice is established. This implies in particular that response equipment is situated on the rigs and the supply vessels. Secondly equipment is placed in nearby Greenlandic harbors. In addition equipment is placed in an international emergency response center. This material can in accordance with a contingency plan be in place in Greenland within 36 hours.

Preparedness
The authorities' are organized in the statutory contingency committee with participation of all relevant public authorities including the navy and the police. The Committee and Cairn carries out a number of joint preparedness exercises.

Rules, regulation, supervision, equipment and techniques are proven and well known from the North Sea and the Arctic region. In particular the activities will be carried out with multiple redundant independent closure systems. There will be additional acoustic and Remotely Operated Vehicles (ROV) systems for closing and operating the Blow Out Preventers (BOP). It is further a requirement that BOP systems are tested every 14 days.

Consultation section
An extensive consultation process has been conducted prior to the approval of the drilling application. All key stakeholders in the Greenlandic society had been invited to participate in the process. Furthermore, the material has been through a public hearing at the Government web-portal. Further a number of stakeholder meetings and public meetings have been held along the coast.