May 27, 2010 / 9:22 PM / 7 years ago

Canada to talk with Greenland on offshore drilling

VANCOUVER (Reuters) - Canada will ask Greenland for more information on its plans for offshore drilling in the waters separating the two jurisdictions, responding to heightened international concerns about environmental precautions.

But with no immediate plans by the oil industry to drill in Canada's Arctic territory, Canada has no need to match U.S. restrictions on Arctic drilling that were announced on Thursday, Canadian Environment Minister Jim Prentice said.

Prentice said he will talk with Greenland officials at a June 9 meeting of Arctic environment ministers about the licenses it has issued for drilling in its territorial waters in the Davis Strait. The meeting will take place in Greenland, a self-governing territory of Denmark that lies across the Davis Strait, an arm of the North Atlantic Ocean, from Canada.

"We want to have a robust discussion at that time about exactly what licenses have been issued, when the drilling would happen, under what conditions, and with what contingency plans," Prentice told Reuters.

Prentice said Canada has good relations with Greenland's home-rule government and has already signed and environmental agreement over the protection of polar bears.

"We have a good working relationship, but obviously we share the Davis Strait and if there is an environmental occurrence in the Davis Strait it is going to effect both Canada and Greenland," he said.

Some environmentalists have called on Greenland to put its aggressive drilling plans on hold, pending more information on the Gulf of Mexico disaster.

Among the companies that have exploration operations or expressed interest in drilling off Greenland are Cairn Energy Plc, Noreco and Faroe Petroleum Plc. Cairn is set to drill Greenland's first exploratory well in a decade this July, according to media reports.

NOT FOLLOWING U.S. YET

The White House said on Thursday that it will put on hold planned exploration off the coast of Alaska in the Chukchi and Beaufort seas pending a presidential commission's review of the Gulf of Mexico spill.

The decision was part of a broader move by U.S. President Barack Obama to extend a moratorium on new offshore drilling in U.S. waters by six months.

Canada has rejected calls for a similar moratorium in its northern waters and in its Pacific Ocean waters, but Prentice said no companies currently have the right to drill in those areas.

"We don't need a moratorium we already got a pause here that has been created by the marketplace," Prentice said in a telephone interview from Oslo, Norway, where he was attending an international summit on forests.

In practice, Canada's National Energy Board, not Prentice, would have the power to order a moratorium. The federal oil and gas regulator this month launched a review of Arctic safety and environmental drilling requirements.

Prentice said the government has made it clear to the NEB that it opposes any relaxation of requirements, and new rules should reflect lessons learned from the accident at BP Plc's oil rig in the Gulf of Mexico.

Imperial Oil Ltd said on Wednesday it had no immediate plan to drill in Canada's Beaufort Sea. Canada's No. 2 oil exploration and refining company and its majority stakeholder, Exxon Mobil Corp, were awarded exploration rights for a parcel in the Arctic region in 2007.

Reporting by Allan Dowd, Editing by Peter Galloway

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