At a meeting on Friday 26 November 2010, the Greenland Government decided on the allocation of the individual licence blocks in the Greenland part of the Baffin Bay under the Baffin Bay licensing round 2010.

A total of seven exclusive licences for exploration and exploitation of oil and gas were awarded to the following companies: ConocoPhillips, Shell, Statoil, GDF SUEZ, Cairn Energy, Maersk Oil, DONG Energy and NUNAOIL. All together the blocks granted cover an area of 70,768 km2

By the application deadline on 1 May 2010, the Bureau of Minerals and Petroleum under the Greenland Government had received 17 block applications from 12 international oil companies.

The applications concentrated on specific licence blocks. Competition for the most attractive licence blocks has therefore been fierce.

Press releases on the outcome of the Baffin Bay licensing round can be found here:

Award of licence blocks in Baffin Bay

Signing of Baffin Bay Hydrocarbon Licences

 

Background

The deadline for submission of applications for the Baffin Bay licensing round was 1 May 2010. Applicants could apply for licences in 14 predefined blocks varying in size between about 8,000 km² and 15,000 km². The total licensing area in Baffin Bay covered approximately 151,000 km².

licensing_round_2010_billede

The application procedure, including requirements, is described in the Letter of Invitation. For further details see also Model Licence and Model Joint Operating Agreement.

The licensing areas in Baffin Bay (offshore Northwest Greenland) and in the Greenland Sea (offshore Northeast Greenland) have been chosen on the basis of a strategic environmental impact assessment for the regions. The strategic environmental impact assessment was carried out by the Danish National Environmental Institute and the Greenland Institute of Natural Resources to ensure that hydrocarbon activities conducted in the area can take place on an environmentally sustainable foundation. Further to this, studies on ice and other physical conditions of the areas have also been carried out in preparation of the tendering rounds.

There will be stringent requirements on health and work safety as well as on environmental protection. Use of the best available technology will be required to reduce the environmental impact and risk of accidents.

Seismic surveys and other geophysical data indicate that large hydrocarbon deposits can be present in the areas. USGS has completed a new estimate of undiscovered oil and gas resources in the subsurface in the sea north of the Arctic Circle between west Greenland and eastern Canada, which include the Baffin Bay licensing area. The mean estimate for oil and gas in the region was calculated at more than 18 billion barrels of oil equivalents.

The industry has already shown great interest in the Baffin Bay licensing round. A prequalification round for the area ended on 1 October 2009 and 13 international oil companies have applied to be approved as operators. The deadline for submission of applications for the licensing round is 1 May 2010. Only consortia which include a prequalified operator can apply.

The purpose of a prequalification process is to ensure that the companies operating in the area:

Have the necessary experience in exploration and exploitation of oil and gas in difficult areas.

Have developed a contingency planning system to manage oil activities in the area appropriately with regards to safety, health and environmental aspects.

Have the necessary financial resources to implement comprehensive oil exploration, development and decommissioning programmes.

A similar prequalification process will take place in connection with the licensing rounds in 2012 and 2013 covering areas offshore North East Greenland (the Greenland Sea).

As described more thoroughly in the Letter of Invitation, two successive licensing rounds will take place in the Greenland Sea. The first licensing round will be reserved for companies which are paying members of the KANUMAS Group and group of companies which include at least one company which is a paying member of the KANUMAS Group. The paying members of the KANUMAS Group are: ExxonMobil, StatoilHydro, BP, Japan National Oil Corporation (JNOC), Texaco and Shell. The publicly owned company NUNAOIL A/S is also member of the KANUMAS Group. The pre-round will be formally opened on 1 January 2012 with deadline for submission of applications for prequalification as operators on 1 March 2012 and deadline for submission of applications for exploration and exploitation licences on 15 December 2012.

The second licensing round in the Greenland Sea will take form as an ordinary licensing round open to all interested companies. The open licensing round will be formally opened on 15 June 2013 with deadline for submission of applications for prequalification as operators on 1 July 2013 and deadline for submission of applications for exploration and exploitation licences on 15 October 2013.

Disclaimer and amendments

The information provided on this website is for information purposes only. The Government of Greenland and the Bureau of Minerals and Petroleum have taken care to provide accurate information on this website. All information is provided as stated ("as is") and no legal obligations shall be made by or arise out of the provision of the information on this website or any errors, omissions or inaccuracies in the information. The Government of Greenland and the Bureau of Minerals and Petroleum do not in any manner warrant, guarantee or represent that the information on this website is accurate, correct or complete.

The Government of Greenland and the Bureau of Minerals and Petroleum may, in their sole discretion, amend, supplement or delete any information on this website at any time and for any reason and purpose. The Government of Greenland and the Bureau of Minerals and Petroleum shall not be responsible or liable in any manner for any errors, omissions or inaccuracies in the information on this website or any damage, loss or cost directly or indirectly caused by or arising out of such errors, omissions or inaccuracies.

Letter of Invitation

Model Licence - English version

Model Licence - Danish version

Model Affidavit

Model Guarantee

Model Joint Operating Agreement

Model Joint Operation Agreement, Apeendix A

Model Joint Operation Agreement, Appendix B