British oil company's Arctic find fuels hope of huge new reserves
By Daily Mail Reporter
25th August 2010
The Arctic is set to become the world's last dash for oil after a British energy company reported a discovery off the coast of Greenland.
Cairn Energy said it had found oil and gas bearing sands in one of its exploration wells, indicting there was an ‘active hydrocarbon system’ there.
The Edinburgh-based company is drilling in a basin the size of the North Sea, meaning the find is potentially of enormous significance.
Greenland’s waters could hold 50 billion barrels of crude and gas, enough to meet the energy demands from every country in Europe for almost two years.
THE HIGH RISKS POSED BY 'OIL-BEARING SANDS'
Cairn Energy said it had found oil and gas bearing sands off the coast of Greenland.
The process of extracting from 'oil-bearing sand', or 'tar sands', is costly and hugely risky, for both environmental and financial reasons.
Tar sands are a mix of thick oil, water and sand.
The oil's extraction consumes massive amounts of water and emits vast amounts of greenhouse gas, CO2, which could have dramatic consequences for the Arctic region if large natural reserves are found to exist. Shell, one of Britain's biggest companies, is controversially pushing ahead with plans to extract oil from huge reserves of 'tar sands' in Alberta, Canada. It's thought that huge reserves of oil-bearing sands here and in Venezuela could last for up to a century if exploited.
The indigenous people of Alberta, however, have launched a series of legal actions decrying the ravaging of the local environment, loss of traditional areas, and the decline in wildlife populations within their territory. Greenpeace warned that Cairn's announcement signalled 'grave news' and threatened the fragile Arctic environment, particularly in wake of BP's Gulf of Mexico oil spill disaster, which has had a catastrophic effect on the region. It is not thought that the company would attempt to extract oil from the newly-found 'tar sands' but the discovery demonstrates ordinary reserves are highly likely to be nearby.
But Cairn’s find has already attracted the attention of environmental campaigners who are furious that the untouched beauty of the Arctic is being put at risk.
Greenpeace’s ship Esperanza is already in the area in protest and has clashed with a Danish warship as it approached the 500 metre exclusion zone around the rig.
Green groups say a blow out like that at BP's Macondo well in the Gulf of Mexico could cause even more damage in Greenland as cold conditions would mean limited evaporation of the oil.
Greenland, which Denmark has held sovereignty over since 1721, also has limited facilities for dealing with a major spill.
Cairn said that though the gas in Baffin Bay it found was too small to be commercially exploited, it supported the view that the area could yet yield material finds.
‘I am encouraged that we have early indications of a working hydrocarbon system with our first well in Greenland, confirming our belief in the exploration potential,’ Chief Executive Sir Bill Gammell said in a statement.
Exploration director Mike Watts added that the gas was of a type that is sometimes found in association with oil.
The well in question – T8-1 – has not yet reached its target depth and Cairn has plans for at least two more in its current drilling programme.
However the company admitted if it suffered an accident similar to the BP spill in the Gulf of Mexico in April, it would be unable to cap a blow out for months.
While analysts said the news was ‘exciting, Greenpeace demanded Cairn immediately halt its operations and make public their safety procedures.
‘Companies like Cairn need to leave the Arctic alone and instead work quickly to develop safe and clean alternatives that will actually help us get off fossil fuels for good,’ said Greenpeace activist Leila Deen, who is on the Esperanza.‘
Cairn might be a step closer to finding oil off Greenland, but this takes us one step back in the fight against climate change and poses a grave threat to the fragile Arctic environment.’
Cairn Energy has been turned from an oil minnow to a global energy powerhouse under the stewardship of Sir Bill, a former Scottish rugby international who has long been friends with Tony Blair and George W Bush.
He met the future Prime Minister at Fettes, a public school in Edinburgh where he was his classmate and debating partners.
Sir Bill's interest in oil was sparked during university summers spent with the Bushes in Texas When George W Bush became president, his first words to Mr Blair were: ‘I believe you know my old friend Bill Gammell.’
Greenland is self-governing but barring a severing of ties with Denmark, a major oil find will put the Danes in the unlikely position of becoming an oil-rich nation on a par with the likes of Saudi Arabia.
http://www.dailymail.co.uk/news/worldnews/article-1305779/British-oil-co...
