A New Land of Opportunity… Greenland – Cairn Energy Project

Newfoundland & Labrador Oil & Gas Industries Association Looks North

Newfoundland and Labrador’s oil and gas expertise in harsh environments may soon be called upon to help develop another frontier petroleum region, the Arctic. Interest is increasing in developing Arctic resources, particularly those of West Greenland, where up to four exploration wells will be drilled this summer.

Cairn Energy, an oil and gas exploration and production company based in Scotland, recently announced that it has secured two drill rigs to conduct an exploration drilling program on its Disko West acreage in West Greenland. Subject to required government approvals, the Stena Don, a semi-submersible and dynamically positioned fifth generation drilling rig, will work
alongside the Stena Forth, a sixth generation dynamically positioned drill ship, in conducting an exploration program in 2010, one year earlier than previously planned. The company said that having two rigs also provides them with the flexibility to include the previously unmapped and undrilled basins off the southern coast of Greenland in planned future drilling programs.

The U.S. Geological Survey (USGS) has estimated a mean of 7.3 billion barrels of oil and 52 TCF of undiscovered natural gas in the West Greenland–East Canada Province north of the Arctic Circle (essentially the offshore area between west Greenland and east Canada which includes Baffin Bay, Davis Strait, Lancaster Sound, and Nares Strait west of and including Kane Basin). It has leased concessions off its west coast which is more accessible than its east coast. Offshore Greenland’s east coast, the USGS has assessed the potential of Eastern Greenland’s rift basins at 8.9 billion barrels of oil, 8.1 billion barrels of NGL and 86 TCF of gas.

NOIA has been keeping a close eye on northern opportunities. NOIA’s conference last year focused on these opportunities with the theme, 44° North: Arctic Challenges – East Coast Solutions. The conference featured presentations from Cairn Energy and Dong Energy which hold leases offshore Greenland. The 2010 conference will also highlight activities in the Arctic and Greenland.

NOIA President & CEO, Bob Cadigan, said the lines of communication are open. A delegation from Greenland’s national oil company, NUNAOIL, visited the province in 2008 to meet with NOIA, government, and operators to learn about how our industry operates. Representatives of Cairn Energy will also be in the province in February to look at what role the Newfoundland and Labrador supply and service community might play in their upcoming exploration program.

“Our plan is to build relationships with the folks in Greenland,” said Cadigan. “And, hopefully, as they explore and develop, we will be able to partner with them to help support their aspirations.”

“Our proximity is an advantage, including the substantial supply and service capability we have on the ground here. At this point, we’ve been through three major oil and gas projects, and we’ve gained the capacity and experience in supporting both exploration and development offshore in harsh conditions.”

In addition, Cougar Helicopters is very excited about their recent contract for operations in Greenland. Hank Williams, General Manager for Canada East, Cougar Helicopters, says that “We are pleased to be providing services to the Greenland operation, and we are currently in the processs of establishing facilities to support our operation and crew accommodations, in Ilulissat, Greenland, where our aircraft and crew will be based. We have visited Greenland and are in the process of negotiating a contract with Air Greenland to assist in support services for the offshore drilling program.”

Cougar Helicopters’ expertise is in providing offshore services in harsh weather environments. According to Hank Williams, the challenging environment in Greenland has many similarities to their operations in Nfld and Labrador. In fact, Cougar Helicopters’ operation in Greenland will use approximately 30 personnel, a combination of pilots engineers and ground support crew and will be operating on 21 day rotations. One of the challenges that Cougar Helicopters faces is trying to find the most expedient transfer method for crews out of St. John’s. It is currently exploring options such as direct charters out of St. John’s and is scheduled to be ready to commence operations on June 1, 2010, providing passenger transfer services as well as search and rescue services.

Cougar Helicopters will be appointing a Project Manager for the June 2010 start up, and it anticipates many visits prior to its June operational date.

For more information contact Cougar www.cougar.ca