Much to the dismay of environmentalists, local officials are happy to hear the news that oil has been found in the pristine scenic area of Baffin Bay between Greenland and Canada. The Scottish oil producer Cairn Energy announced that its exploration had paid off and oil was found. Cairn’s founder, Sir Bill Gammell called the find “extremely encouraging” but noted that there would be a need for further analysis.
Gammell, who is also Cairn Energy’s chief executive, said: “The presence of both oil and gas confirms an active, working petroleum system in the basin and is extremely encouraging at this very early stage of our exploration campaign.”
Locals in the area are excited about the added revenue that would be brought to the area as well as the possibility of long term jobs. Investors and the oil industry are very optimistic of the possibilities of oil drilling in the Arctic area. Some analysts have estimated that the Arctic holds vast quantities of oil and is one of the last huge untapped reserves. So far, Cairn is the only producer to have gained drilling permission for the offshores of Greenland.
Greenland’s government is enthusiastic of the possibility that the island could diversify its economy with oil production and lower its dependence on fishing and tourism.
Environmentalists will be disheartened with the news of the oil find due to the recent accident in the Gulf of Mexico. The area near Greenland is much more dangerous for drilling due to the weather and icebergs and therefore the possibility of an accident is deemed higher. The area is considered an environmental prize due to the lack of industrialism in the region to pollute surrounding water and air. The wildlife is abundant but fragile in the area and an oil spill accident like that from the BP oil spill would be tragic.
The BP Macondo well in the Gulf of Mexico was at 1,500 meters deep. Cairn’s Alpha-1S1 well found oil at depts. Of more than 4,300 meters deep. They are currently deepening the well and others are being drilled in the area as well. Whether the find will end up a commercial level discovery is yet to be seen.
Cairn, an Edinburgh based company, is selling its majority stake in its India division to Vendanta Resources. The transfer will raise almost 6 billion pounds. It is expected that the sale will happen to help fund further exploration in Greenland.