Annual Report 2002 The Bureau of Minerals and Petroleum Preface The year 2002 has demonstrated that the many The close cooperation between Greenland and years of work to establish a sustainable mineral Denmark on raw materials activities in Greenland resources industry in Greenland have been im- is still a major factor for the positive develop- portant and beneficial.After several years with ments. In cooperation with the Joint Committee mineral exploitation at a standstill, in 2002 pre- on Mineral Resources in Greenland, the Green- parations were carried out to open the gold mine land government and the Danish government at Nalunaq in South Greenland. Moreover, there is manage the mineral resources activities in agree- still great interest in Greenland's oil and gas po- ment and with mutual respect.The Bureau of tential. In 2002, a licensing round offshore West Minerals and Petroleum and the research institu- Greenland gave a new exploration and exploita- tions the Geological Survey of Denmark and tion licence to EnCana Corporation in coopera- Greenland and the National Environmental Re- tion with Nuna Oil A/S. search Institute will continue their close coope- ration on targeted initiatives to establish sus- One of the Greenland government's primary pri- tainable development of raw materials activities orities is to establish a strong industry for the together with a high level of protection for the exploitation of Greenland's natural resources, environment. beneficial to economic growth and employment. Thus, it is still very important that Greenland and The Annual Report 2002 from the Bureau of Denmark work together to ensure the establish- Minerals and Petroleum illustrates that significant ment of this industry. interest remains from international industry to exploit Greenland's natural resources.This The Bureau of Minerals and Petroleum is the interest applies to minerals, hydrocarbons, and natural centre for Greenland's initiatives to estab- the large resources of clean ice and water in lish sustainable exploitation of the natural resour- Greenland. ces. In 2002, and for the fifth consecutive year, the Bureau of Minerals and Petroleum under the The Annual Report also illustrates that good Greenland Home Rule was responsible for the cooperation between authorities, industry and management of raw material activities in Green- research institutions is an important factor for land. Developments during this five-year period success. I sincerely hope that this cooperation have demonstrated that the collective decision will continue and that it will be developed further of the Greenland Home Rule and the Danish to the benefit of Greenland. government to transfer the management of mineral resources activities to Greenland has been beneficial. Member of the Greenland government Minister of Business Finn Karlsen The Joint Committee on Mineral Resources in Greenland In June 2002 the Joint Committee consisted of the following members. Chair: Christian Mejdahl, MP (Venstre, Denmark's Liberal Party) Greenlandic members: Johan Lund Olsen Simon Olsen (Vice Chair) Mikael Petersen Jakob Sivertsen Mogens Kleist Danish members: Helge Mortensen (Vice Chair) Jørgen Winther Aase D. Madsen Kirsten Touborg Kaj Ikast The following officials from Greenland and Denmark took part in committee work as delegates: The mineral resources system for Greenland estab- Søren Hald Møller/Solja I Olavsstovu, lishes joint Danish-Greenlandic political responsibility Greenland Home Rule for raw materials activities in Greenland.This means Hans J. Høyer, Department of Environment and Nature that Greenland and Denmark have joint authority to Michael Dithmer, make decisions regarding principal investments in raw the Danish Ministry of Economic and Business Affairs materials activities. Furthermore, the Danish govern- Kirsten Trolle, the Prime Minister's Office ment and the Greenland government have agreed on the distribution of any profits from mineral resources During 2002 two Joint Committee meetings were held, exploitation. both in Greenland. Less complex cases, such as e.g. ap- The Joint Committee on Mineral Resources in Green- plications for new licences and area expansions and land has been set up as a political forum in which politi- transfers, are processed between meetings by the Joint cians from Greenland and Denmark can bring up cen- Committee's Chair and Vice Chairs. tral issues regarding raw materials activities for debate. The Bureau of Minerals and Petroleum under the Greenland Home Rule, administers the mineral resour- ces system for Greenland and is the responsible autho- rity for case processing in connection with mineral resources activities. The more detailed provisions pertaining to the Mineral Resources System for Greenland have been laid down in the Greenland Home Rule Act and in the Mineral Resources Act. The Joint Committee on Mineral Resources in Green- land - also called the Joint Committee - consists of five politically appointed members from the Greenland Par- liament and the Danish Parliament. In addition, a Chair is appointed for periods of four years by the Queen of Denmark, following joint nomination by the Danish government and the Greenland government.The tasks of the Joint Committee are to monitor developments in mineral resources activities and to submit its recom- mendations to the Danish and Greenlandic govern- ments on e.g. issues about the granting of licences for preliminary surveys and for exploration. The Bureau of Minerals and Petroleum Objectives and tasks of the Bureau of Minerals and Petroleum The Bureau of Minerals and Petroleum under the Greenland Home Rule is responsible for the manage- ment of mineral resources activities in Greenland.The Bureau of Minerals and Petroleum aims at ensuring pro- fessional promotion of the raw materials potential in Greenland to the international mining industry. One of the Bureau's main tasks is the day-to-day admi- nistration of licences for prospecting, exploration, and exploitation of mineral resources.The Bureau of Mine- rals and Petroleum is responsible for all case processing and is the only authority the mining industry needs to contact in order to receive necessary licences. This ensures efficient case processing for raw materials activities. Mineral resources as a primary industry Greenland aims at making mineral resources one of its primary industries. Developments within raw materials activities must therefore be in dialogue with the people of Greenland. As a consequence, the Bureau of Minerals and Petroleum is striving to establish a clear and com- prehensible framework for raw materials activities via a number of information activities, in order to encourage a successful working relationship between the mining industry and the public. Start-up and promotion The Bureau of Minerals and Petroleum contributes to the financing and implementation of a number of proje- cts which can provide new knowledge about Green- land's mineral potential. In this way, the authorities are attempting to sharpen private enterprise interest in ex- ploration activities in Greenland.The Bureau engages in determined efforts to promote Greenland's raw mate- rials potential through participation in international trade fairs and exhibitions, and through direct marke- ting initiatives aimed at selected oil and mining compa- nies.The Bureau's English website, moreover, is an im- portant means of communicating full and relevant infor- mation to the mining industry. External partners The Bureau of Minerals and Petroleum cooperates on the administration of raw materials activities with e.g. the Geological Survey of Denmark and Greenland, the The licence agreement with EnCana Corporation was signed by National Environmental Research Institute of Denmark, Jonathan Motzfeldt, Premier of the Greenland government, in Nuuk and the Danish Energy Authority. Also the state-owned on 8 October 2002. oil company Nuna Oil A/S is an important partner. 3 Hydrocarbon licences Open-door areas Exploration and exploitation licences are granted for As opposed to licensing-round areas, in areas covered specific areas on the basis of licensing rounds, in which by the so-called open-door procedure, companies may companies compete for the licence within a given time apply for licences on a continuous basis.The summer limit.Within other areas an open-door policy applies months are the only time when processing of licence permitting companies to apply on a continuous basis. applications for open-door areas is closed down. In West Greenland the offshore areas between 60°N Nunaoil A/S, equally owned by the Greenland Home and 63°N and between 68°N and 71°N (except for Rule and Danish state-owned oil company DONG areas covered by the KANUMAS licence), and the A/S, takes part in active licences as a sleeping partner land areas on Disko and Nuussuaq are covered by the in the exploration phase.This means that Nunaoil A/S open-door procedure. Jameson Land in East Green- does not share the costs of exploration. land is likewise covered by the open-door procedure. In these areas little is known of the oil potential and Furthermore, prospecting licences have been granted seismicdata coverage is limited. Especially favourable li- to a number of oil companies and seismic firms. cence terms have been established for exploration in these areas in order to increase interest in the areas. Hydrocarbons... Identification of large potential hydrocarbon traps in West Greenland and collecting of seabed samples Amongst other things, oil companies use estimated (minimum) sizes of possible hydrocarbon traps to assess whether an area is worth exploring.The size depends on many factors in the calculation of the trap's volume. In 2002 and 2003 the Bureau of Minerals and Petroleum and the Geological Survey of Denmark and Greenland have therefore been completing a project to map large potential hydrocarbon traps offshore central West Greenland in order to em- phasise key areas of the new Hydrocarbon Strategy. Moreover, another project is under preparation to find evidence of the existence of hydrocar- bons in offshore West Greenland via the use of seabed samples. Older sediments will be sam- pled for this project in the summer of 2003.