UPDATE 1-New Greenland government to rein in new oil exploration

Wed Mar 27, 2013 3:21pm EDT
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By Alistair Scrutton

STOCKHOLM, March 27 (Reuters) - Greenland's incoming government believes that the country has a sufficient number of oil licenses and it will be cautious about awarding new permits, the next mining and oil minister said on Wednesday.

The statement by Greenland's new coalition led by the Siumut party underscores the possibility of a more difficult investment climate for foreign companies eager to exploit the country's largely untapped mineral and oil resources.

The opening of the country of 57,000 people to international miners and oil firms has aroused concern among its indigenous Inuit people, many of whom rely on fishing for a living and fear exploitation of resources and risks of pollution from heavy industries.

"The current number of licences is sufficient for Greenland - it is the natural size for the number of Greenlanders," Jens Erik Kirkegaard, due to become the new mining and oil minister in April, told Reuters.

"We are going to be more cautious in the awarding of offshore oil licenses," Kirkegaard added. "We will honour existing contracts. There will be no complete lockout."

With sea ice thawing and new shipping routes opening in the Arctic, the former Cold War ally of the West has emerged from isolation and gained geopolitical attention from the likes of Beijing and Brussels, thanks to its untapped mineral wealth and potential offshore oil and gas.

Government officials say Greenland's northeast offshore fields could have 31 billion barrels of oil and gas, while the west, including Canadian waters, could hold 17 billion barrels.   Continued...