World National Oil Companies Congress

London, 23 June 2010

Opportunities and challenges in

the development of oil and gas resources

off Greenland´s coast

Overview

How large is the opportunity of Greenland?

Overcoming the challenges of petroleum exploration in the Arctic

Environment considerations and strategies

What can other NOC´s learn from Nunaoil´s experience ?

Conclusion

Area 2.166.086 km2

Ice cover (80%) 1.754.530 km2

Ice free area (20%) 433.217 km2

Population (2009) 56.462

Nuuk (Capital) 16.500 (28%)

Number of towns: 18 (84%)

Number of settlements: 55 (16%)

Offshore wells 6

Onshore well 1

E & P licenses (2006) 2

E & P licenses (2010) 13

Acreage (2006) 6.882 km2

Acreage (2010) 131.364 km2

Number of companies (2006) 1 + Nunaoil

Number of companies (2010) 8 + Nunaoil

Quick facts about Greenland

No exploitationof

Oil & Gas !Icecap thickness> 3000 m

Quick facts about GreenlandSedimentary basins - 825.000 km2

~ 4 x (Viking & Central Graben system)

OBJECTIVES BY GOVERNMENT OF GREENLAND

There is broad consensus in Greenland that efforts should be made to develop the mineral and petroleum resources sector into a sustainable industry…

… that can make a positive contribution to the economicdevelopment of the country and the creation of new jobs…

...and export revenue in addition to the fishing industry.

OBJECTIVES BY GOVERNMENT OF GREENLAND

“ We need a stronger economy and we have to utilize the opportunities that oil could bring us.

Environmentalist around the world advise us not to exploit the oil reserves. But we are not in the situation where we can replace the declining income from our fisheries, and we don´t have any other resources for the time being that hold as much potential as oil. ”

Kupik Kleist, Premier of Greenland

Nunaoil A/SThe National Oil Company of Greenland

Established in 1985

Mission: Represent the Greenland Home Rule Government in oil exploration and exploitation in Greenland.

Shareholder: 100 % - Government of Greenland

Board members: 5

Number of employees: 7

Website: www.nunaoil.gl

E-mail: nunaoil@nunaoil.gl

Tuapannguit 38, 3900 Nuuk

How large is the opportunity of Greenland?

Arctic seaflooris hot !

Greenla

nd

”Arctic may harbour as much as 22% of the technically resources in the world”

The area north of Arctic Circle holds:

~ 90 BB of undiscovered, technically recoverable oil

~ 1,670 TCF of technically recoverable natural gas

~ 44 BB of technically recoverable natural gas liquids

Courtesy by USGS

Rest of the world

North Africa,Caspian Sea,

Middle EastArctic

How large is the opportunity of Greenland?

>70 % of the mean undiscovered oil ressource is estimated to occur in five provinces:

Arctic Alaska

Amerasia Basin

East Greenland Rift Basins(~31 BBO)

East Barents Basin

West Greenland - East Canada (~17 BBO)

Courtesy by USGS

Petroleum exploration in the past

21.000 km seismic in early 1970´iesStrong increase in oil price6 licenses – 21 companies46 block – 18.502 km2

Petroleum exploration in the 1970-ies

Petroleum exploration in the past

“Pelican” drilling Kangâmiut-1 ”Sedco 709” drilling Nukik 1

Additional 16.000 km seismic5 offshore wells in total drilled in 1976 and 1977All wells were dry

Licenses relinquished in 19781997 – Hydrocarbons detected by GEUS in Kangâmiut 1 well

NU9803-102

NU98

03-1

01

NU98

03-1

01

Ikermiut-1

Hellefisk-1

Kangamiut-1

Nukik-2

Nukik-1

Petroleum exploration during the 1970´-ies

Petroleum exploration in the past

1984 – license granted for 12 years

ARCO (operator) (63,74%)

Arktisk Minekompagni (11,25%)

Nunaoil (carried) (25,00%)

1988: AGIP (co-operator)

Investment: 1 B DKR

Seismic: 1800 km

License relinquished in 1990

Jameson Land – Central East Greenland

June 2010

~10.000 km2

Petroleum exploration in the past1995 – 1996Operator: GrønArctic Energy Co-operator: Platinova A/S

3 thin holes (400 – 900 m)1 conventional drilling – GRO #3

Ca. 5 km west of planned targetDepth – 2996 m – dryLater quantitative log interpretation by GEUS suggested hig hydrocarbon saturation in thick ss - unitsInvestment – Cdn$ 12,3 mio. ~ 70 mio.dkr.License returned in 1996

The onshore seeps indicate that the local basins may generate large volumes of hydrocarbons

NuussuaqGRO # 3

Petroleum exploration in the past

Fylla license - 2000

Qulleq 1 well

Operator: Statoil

Co-operators: Phillips, DongEnergy, Nunaoil

Depth: 2937 m – Dry

License relinquished in 2001

West Navion

Cairn EnergyChevron

DongEnergy

Exxon

EnCanaHusky Energy

P. A. Resources

Petronas

Nunaoil A/S (carried)

The oil and gas sector in GreenlandThe stakeholders in

petroleum exploration

2009 – Record year for activities

Seismic acquisition : 1970 - 2009

5 w

ells

1 w

ell

Data coverage1999 - 2009

1999 2009

Baffin Bay licensing round

Baffin Bay – 1 May 201014 Blocks ~ 151.000 km2

Block size: 8.000 – 15.000 km2

13 applications -prequalification round

17 E&P applications by 12 companies

Co-financing projects TGS / Nunaoil

53.500 km Aeromag

15.119 km 2D Seismic

15.119 km Gravimetry

Co-financing projects Infoterra / Nunaoil

Satellite slicks- and icestudies

Greenland Sea licensing round

The KANUMAS project: 1990-96

6 IOC (preference rights)

Nunaoil - operator and carried

2D seismik : 7000 km

Seismic vessel: F 357 Thetis (Danish Navy)

Co-finances projects TGS / Nunaoil

Aeromag: 103.823 km (2007-08)

Gravimetri: 84.033 km

2D Seismik: 14.659 km

Greenland Sea – 15 December 2012

Exploration drillings 2010 ?

21 December 2009: Cairn announced securing of Stena Forth

04 January 2010: Cairn announced securing of Stena Don

11 June 2010: Application submitted for approval to the Government of

Greenland by the Minister of Mineral Resources

15 June 2010: YES / NO ?

Stena Forth Stena DonPelican Sedco 709

Challenges for Greenland

Physical challenges:Sensitive marine environment / ecosystem

Harsh arctic climate

Long cold winters – short summers

Sea ice and icebergs

Wind and ocean currents

Polar darkness – midnight sun

Global warming?

Challenges for Greenland

National challenges:

Limited infrastructure

No roads between towns or settlements

2 international airports

12 fixed-winged airports for Dash-7

Few harbours suited for offshore services

Lack of skilled workforce

Fisheries still most important economy

What can other NOC´s learn from Nunaoil´s experience ?

Challenges for Nunaoil /Greenland as an NOC in the expanding petroleum sector in the Arctic.

Create partnerships with IOC´s & NOC´s that deliver results for the benefits of Greenland and the oil companies

Establishment of expertise / know-how within:

Geological, Financial and Management sector

Development of:

technological expertise and competence in E & P

Contribute to development of local content and local service sector in the future.

What can Nunaoil learn from other NOC´s experience ?

CONCLUSION

“Whilst the drilling and licensing activity in 2010 are importantmilestones in the exploitation of Greenland´s oil and gas potential, they may only be the start of what could be a long and difficult road. Success in such challenging frontier provinces generally demands:

first class geological analysesexcellent operational practice

strong financespersistence anda good share of luck.

Most of the current operators and recent applicants will already satisfy the first three criteria, but it may be those who complete the set who are the best places to reap the rewards.”

Wood Mackenzie – Upstream Insight – May 2010

World National Oil Companies Congress

London, 23 June 2010

The National Oil Company of Greenland

Thank YouHans Kristian Olsen

hko@nunaoil.gl

Heading for the New Frontier!