Company has raised $70 million for oil drilling in Jameson Land

In early April, the American company Greenland Energy Company announced that it planned to deliver drilling equipment to Jameson Land in the third quarter and start drilling in the fourth quarter of 2026, subject to approval by the Greenlandic authorities.

Most recently, the company announced that it had raised $70 million, equivalent to almost 450 million kroner, on the New York Stock Exchange for exploration activities in the area. This is according to a recent stock exchange announcement from the British partner 80 Mile PLC, which owns the subsidiary White Flame Energy, which has held the three oil licenses covering over two million hectares in Jameson Land in East Greenland since 2014.

Takes over 70 percent ownership interest

The stock exchange announcement states that Greenland Energy Company will bear all costs for exploration and drilling activities, but that in return they will take over 70 percent of the ownership interest in the Jameson Land project, while 80 Mile will only retain a 30 percent ownership interest.

According to the companies, the license areas potentially contain oil equivalent to 13 billion barrels. The area is one of the last "completely undrilled oil basins globally with a clear genetic connection to the North Sea on a scale like many of the world's largest oil production areas", says 80 Mile, based on an independent assessment carried out by the American oil company Sproule ERCE.

Major uncertainties

According to Professor of Financial Management at Aalborg University, Per Nikolaj Bukh, it is worth noting the many reservations contained in the stock exchange announcement.

– It should be noted that the estimate for how much oil there is in the area is stated as "prospective resources", i.e. these are unproven reserves. In addition, these are "un-risked" oil reserves, which means that the amount is not estimated with probability according to a mathematical model. So there are still very large uncertainties associated with the project itself. Finally, there are all the uncertainties associated with the legislation and permits and finally there is the whole logistical challenge, which has not been solved either, says Per Nikolaj Bukh.

Dramatic environmental consequences

Per Nikolaj Bukh also finds it very difficult to imagine the project being realized without it having dramatic environmental consequences in Greenland and the rest of the world.

– We are talking about an enormous project that - if realized as described - will correspond to 30-50 percent of the world's oil production for one year. What does this mean for the goals of the Paris Agreement and for the environment in Greenland? I find it difficult to imagine that a company would be allowed to pump such large amounts of oil into the Arctic. It doesn't make much sense, says Per Nikolaj Bukh, who believes that the project should also be seen in light of the political pressure on Greenland.

– It fits well into the American narrative that Greenland is just a stone's throw from economic independence. But the truth is that the project is very uncertain and risky and, moreover, not very advanced.