Published on: Nov 3, 2018 @ 14:28 – China’s largest oil companies are keen to obtain the necessary licenses to explore Greenland’s oil fields, reports Danish Radio.
Representatives of China National Petroleum Corporation (China’s largest Chinese oil company) and China National Offshore Oil Corporation (3rd largest) met with Greenland Energy Minister Aqqalu Jerimiassen. They called for more meetings to be held to address the prospects of drilling, starting in 2021, the coastal deposits of Nuussuaq, which lie north-west of the island.
Authorities in the region have called the talks “positive,” which is the first time China has shown interest in extracting hydrocarbons on the island, reports the media .
It is believed that if the agreements were to be certain, in addition to bringing a steady income that could offset the annual Copenhagen subsidy to the island of approximately $660 million, it would also ensure greater independence to Denmark.
Attempts to exploit the “black gold” began in 1972. In Denmark in the same period, more than 3.8 billion barrels have been extracted, which has made the island a lot of money. Geological surveys estimate that the island holds oil and gas equivalents of 50 billion barrels.
Many European companies in the sector, which tried to take advantage of Greenlandic oil, eventually failed.
Scottish oil giant Cairn Energy was one of the oil companies that had to withdraw from the island due to the drastic drop in prices per barrel. Oil drilling in the Arctic, as well as expensive, is also fraught with risk from extreme cold.
China’s companies are planning to extract rare metals such as uranium to the south of the territory and zinc to the north, coinciding with the country’s plans to set up a research base in the area and establish a university ground station in cooperation with the Greenland Natural Institute .
Beijing’s interest in the Arctic has worried both Washington and Copenhagen. The Danish Defense Intelligence Service warns that the risks associated with Chinese investments in the region are “a result of the close ties between Chinese companies and Chinese leaders,” also warning of the impact this could have on the island’s small population.
In September of this year, the Greenlandic authorities eventually yielded to pressure from Denmark and avoided contracting with a Chinese company, while in 2016 Copenhagen boycotted Beijing’s plans to buy an inactive defense facility.
Washington supports the idea of keeping Chinese companies off the island, but has for decades maintained several bases in Greenland.
*In the previous version of this article, it is unclear whether 3.8 billion had been extracted from Denmark or Greenland. A reader, Mr. Oleson, pointed out the ambiguity.