Deputy of Industry, Labour and Mineral Resources, Jørn Skov Nielsen and the Head of Greenland’s Representation in Denmark Tove Søvndahl Pedersen.
Huge focus on investment in Greenland
By greenland today, Copenhagen
20 AUG 2012
More than 60 diplomats and journalists were in a meeting at Greenland Representation Friday the 17th August to hear about investment opportunities in Greenland.
The Head of Greenland’s Representation in Denmark Tove Søvndahl Pedersen, bid welcome and gave the floor to the Deputy of Industry, Labour and Mineral Resources, Jørn Skov Nielsen.
Greenland’s Economy
Jørn Skov Nielsen (JSN) started to talk about Greenland’s current economy as the basis for future opportunities.
Fisheries and block grants from Denmark is today the two primary sources of income. Greenland’s exports consist of shrimp (50%), halibut (21%), Other fish (15%), Mineral resources (7%) and other products (7%).
Greenland’s gross domestic product (GDP) per capita in comparison with other countries.
The Future
With shrimp quotas reduced by 25% and a net migration (more people leaving the country than are being born or moving to Greenland/Ed), there is a prospect of a low or even negative economic growth in the coming years, told JNS.
Therefore, Greenland need new business areas, and the most relevant is the extraction of minerals and oil, and industrial projects based on hydropower, which Greenland has plenty of.
Challenges
Today Greenland has a relatively small business sector with a small workforce. For example, only six companies have more than 100 employees.
In addition there is relatively high transportation costs compared to mining and oil exploration elsewhere in the world.
– But the dwindling sea ice makes Greenland more and more accessible, JSN explained.
Oil and mining solutions
– Part of the solution is to allow outside labor for large-scale projects over 1 billion Danish kroner ($ 165,650 USD), for applications where Greenlandic companies can not handle it on its own, said JSN.
New solutions are necessary if we are to recover some of the 48 billion barrels of oil, Greenland is estimated to contain and recover zinc, titanium, rubies, molybdenum, iron, gold and rare earth elements and more.
Other options
– Tourism in Greenland is a growing industry with 37,500 tourists by air and 30,000 by cruise ships, but the income here still accounts for only 4% of gross domestic product, explained JSN.
Export of water and ice is also a focus area that is estimated to grow strongly in the coming years.
Room for more
Within the oil exploration are companies such as Conoco Phillips, Dong Energy, Nuna Oil, Shell, Statoil, GDF Suez, Cairn and Maersk Oil started with seismic surveys and test drilling, but licenses for new areas is still offered.
In North East Greenland offered an area of 49,949 km2 in 19 blocks with the deadline for applications for the first round on 15th December 2012 and the second round on 15th October 2013.
– This means that it is expected that there is oil exploration from the year 2014 onwards, said JSN, and stated that within the mineral area between five and ten mines are expected in operation by 2022.
Easy to apply
In recent years, many foreign companies have established a domicile in Greenland and more are being added.
Firms must be prequalified in order to explore in Greenland.
– It’s all explained on the website bmp.gl, where you can download application forms.
– There is also an updated map on the website, so that international companies can easily keep up with the development in Greenland, said JSN.
Many questions
Finally Jørn Skov Nielsen answered questions on many issues.
He explained among other things that Greenland preparedness for a possible oil spill is based on the Norwegian rules which are the strictest rules in the world.
To this is added a special set of arctic rules on top, like a policy that there should be two oil rigs close to each other in certain areas. All in all, Greenland has a »state of the art« contengency plan, explained JSN.
In addition we made a wide range of strategic, environmental and social assessments in relation to the various business areas possible impact in Greenland, so the country is as well prepared as possible, Jørn Skov Nielsen ended.
The audience asked many questions – here from the world’s largest news agency Xinhua.
