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ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION-1
i
NON-TECHNICAL SUMMARY
INTRODUCTION
This is the Non Technical Summary of a Social Impact Assessment (SIA) for an
offshore multiple well exploration drilling programme (the Project). The
programme will be conducted within the Sigguk exclusive licence 2008/10
(Sigguk Licence) off the north west coast of Greenland between June and
October 2010, with a two month contingency window over November and
December, in case relief well drilling is required. It is important to note that
Project drilling activities may require all or only part of this period.
This SIA considers issues as they relate to the exploration drilling programme
in the Sigguk License area. Further revisions of the SIA, with additional data
collection and stakeholder consultation, will therefore be produced for any
further exploratory drilling outside of the Sigguk 2010 campaign, or for any
future stages of the exploration and potential development phases of work.
This SIA has been produced by Environmental Resources Management (ERM)
on behalf of Capricorn Greenland Exploration-1 Ltd (Capricorn), a subsidiary
of Cairn Energy PLC (Cairn). It has been undertaken in accordance with
applicable Greenland legislation and standards, international guidance and
the corporate policies and expectations of Cairn.
SIA STANDARDS AND PERMITTING
The regulatory framework for offshore oil and gas activities in Greenland is
currently being revised. The Bureau of Minerals and Petroleum (BMP) is the
main implementing agency for laws relating to hydrocarbon exploration, and
has been consulted throughout this SIA process.
SCOPE
As well as the SIA, a separate Environmental Impact Assessment (EIA) has
been produced for the Project by ERM on behalf of Capricorn. Physical and
biological environmental factors are therefore excluded from the SIA and
covered by the EIA.
The geographical scope of the SIA includes the municipality of Qaasuitsup,
with particular attention paid to the towns of Ilulissat and Aasiaat, where
some on-shore Project facilities may be located. Where information is
available, it is also included for the towns of Qeqertarsuaq, Kangaatsiaq,
Uummannaq, Upernavik, and Qasigiannguit.
The municipality of Qeqqata is also considered in this report, in terms of
impacts to Sisimiut, from where significant quantities of Greenland-based
services and materials will be sourced, and Kangerlussuaq, which will be the
transit gateway for rotational workers entering and leaving Greenland.
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION-1
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Figure 1 (below) illustrates the Project area considered as part of this SIA.
Figure 1 Project-Affected Area
Source: nunagis.gl (2010)
PROJECT PROPONENT AND SIA PRACTITIONER
Project Proponent
Capricorn Greenland Exploration-1 is a subsidiary of Cairn Energy PLC based
in Edinburgh, UK. Cairn is an independent, public oil and gas exploration
and production company quoted on the London Stock Exchange.
SIA Practitioner
ERM is a leading global provider of environmental, health and safety, risk,
and social consulting services, with 137 offices in 39 countries employing
approximately 3,300 staff. ERM has worldwide expertise in environmental
and social impact assessment for offshore oil and gas projects, including
operations in Arctic waters.
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION-1
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ASSESSMENT METHODOLOGY
Overview of the Impact Assessment Process
This SIA has been undertaken following a systematic process that predicts and
evaluates the probable impacts of the Project on aspects of the socio-economic
environment; it identifies measures to mitigate adverse impacts, and to
maximise benefits, as far as is reasonably practicable.
The overall approach is shown in Figure 2. Screening and Scoping for the SIA
(and EIA) has been underway throughout Project planning and has involved
consultation with the Greenland Government and key stakeholders, review of
legislation and international standards and examination of previous studies.
Engagement with the authorities and key stakeholders, affected populations
in the Project area and Non-Governmental Organisations (NGOs) has
continued throughout this process, as has interaction with the Capricorn
Project Team.
Figure 2 Overview of IA Approach
Baseline Data Collection
To provide a social baseline against which potential impacts can be assessed,
the SIA provides a description of the conditions that exist in the absence of the
Project. The baseline identifies and assesses all stakeholders (also called
“receptors”), as well as resources identified as having the potential to be
significantly affected by the proposed Project.
In preparing this SIA, a range of existing information sources and existing
studies have been used. A comprehensive literature review has been
conducted using reports prepared by government agencies; Greenlandic and
Screening
Scoping
Sta
ke
ho
lder e
ng
ag
em
en
t
Inte
racti
on
wit
h p
roje
ct
pla
nn
ing
an
d d
es
ign
Baseli
ne s
tud
ies (
exis
tin
g d
ata
co
lle
cti
on
an
d n
ew
su
rve
ys)
Predict magnitude of impacts
Evaluate their significance
Investigate options for mitigation
Reassess residual impact (as required)
Assessment
Management Plans/
Mitigation Register
Reporting and Disclosure
Screening
Scoping
Sta
ke
ho
lder e
ng
ag
em
en
t
Inte
racti
on
wit
h p
roje
ct
pla
nn
ing
an
d d
es
ign
Baseli
ne s
tud
ies (
exis
tin
g d
ata
co
lle
cti
on
an
d n
ew
su
rve
ys)
Predict magnitude of impacts
Evaluate their significance
Investigate options for mitigation
Reassess residual impact (as required)
Assessment
Management Plans/
Mitigation Register
Reporting and Disclosure
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION-1
iv
Danish research organizations, results from previously conducted studies in
Greenland, and other published sources.
In order to supplement published information and data, a social baseline data
gathering mission was undertaken in February 2010. Consultations
undertaken as part of this mission are summarised in Table 1 below.
Table 1 Summary of Stakeholder Engagement
Location Stakeholders Engaged
Nuuk
• GA, NuSuKa, SIK
• Greenland Travel Companies
• Greenland Training Institutions
• Air Greenland
• Royal Arctic Line
• Local Non-Government Organizations
• Beredskabskomiteen
• KANUKOKA
• Fishing Associations
• Ministries of Internal Affairs; Environment and Nature; Financial Issues; Infrastructure; Housing and Traffic; Fishing, Hunting and Agriculture; Health and Social Affairs; Industry and Labour; Education, Culture, Church and Science; BMP
Sisimiut
• Town administration
• Port Authority
• Airport Authority (GLV)
• Chamber of Commerce
• Fire and Police
• Training Institutions
Ilulissat
• Municipal Administration and Offshore Group
• Police station
• GA and Chamber of Commerce
• INI
• Small business owners
• Local tourism operators
Aasiaat • Chamber of Commerce
• Local unemployed residents
• Local fishermen and hunters
Uummannaq • Town administration
• Small business owners
• Citizens
Qasigiannguit • Town administration
• Head of Culture
Qeqertarsuaq • Town administration
• Small business owners
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION-1
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Figure 3 Public Consultation in Uummannaq (February 2010)
Source: ERM 2010
Following publication this non-technical summary (NTS), as well as the
summary for the EIA, the findings of the Social and Environmental Impact
Assessments will be communicated and verified through a public hearing
process, during which time stakeholders will have the opportunity to query
and comment on the report. This is expected to take place in mid-March 2010.
Assessment of Impacts
The assessment describes what will happen by predicting and quantifying as
far as possible the magnitude of impacts. The term ‘magnitude’ is used as
shorthand to encompass all the dimensions of the predicted impact including:
• the nature of the change (what is affected and how);
• its size, scale or intensity;
• its geographical extent and distribution;
• its duration, frequency, reversibility, etc; and
• where relevant, the probability of the impact occurring.
Magnitude also includes any uncertainty about the occurrence or scale of the
impact. An overall grading is provided to determine whether an impact is of
negligible, small, medium or large magnitude.
The next step in the assessment process is to explain what the magnitude of an
impact means in terms of its importance to people and the environment. This
is referred to as Evaluation of Significance.
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION-1
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Magnitude and sensitivity are considered in combination to evaluate whether
an impact is significant and if so its degree of significance (see Figure 4).
Figure 4 Evaluation of Significance
Mitigation and Residual Impacts
Impacts from both routine and non-routine Project activities are considered,
taking into consideration existing mitigation measures within Project design.
Where the assessment results in significant impacts, methods for practical and
affordable mitigation are identified.
SOCIAL SETTING
Employment and Training
Employment and training of the population is considered to be a key priority
by the Government of Greenland, and this was reflected in consultations with
all stakeholder groups.
A range of training facilities exist in the Project area, including local
Piareersarfiit, targeted training programmes provided through employee and
business associations, as well as highly developed facilities such as the
Sisimiut Building and Construction School (Figure 5). At the national level,
other training facilities for training opportunities include the Metalwork and
Industry school (in Nuuk), the Food Service and Preparation School (in Inuili),
and the School for Merchant Mariners (in Paamiut).
Magnitude of Impact
Va
lue
/Se
nsiti
vity
of
Reso
urc
e/R
ece
pto
r
Small Medium Large
Hig
hM
ediu
m
Low
Not Significant
Minor
Moderate
Major
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION-1
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Figure 5 Sisimiut Building and Construction School
Source: ERM 2009
Access to education and training opportunities is challenged by poor
attendance, low availability of trained teachers, and challenges in the social
background of students. Students who are unable to access education and
training and are therefore unable to acquire basic qualifications and skills face
greater difficulties in qualifying for and maintaining stable employment.
Hunting and Fishing Activities
Hunting and fishing remain the dominant livelihood activities in the Project
area, and provide an important source of income and subsistence as well as a
critical aspect of Greenlandic cultural identity. Changes in climate, economy
and aspirations of young people are resulting in progressive decline in
hunting and fishing as the primary economic activity for families.
The majority of local fishing vessels are small-scale operations, though large
commercial companies also work in the waters off the Project area. As
demonstrated in Figure 6, fishing activities are focussed primarily along the
inshore areas, which are accessible to both commercial and small-scale
fishermen. Deeper waters are fished by commercial trawlers, and the area near
the drilling licence is fished for halibut and, to a lesser extent, shrimp.
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION-1
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Figure 6 Fishing in Project Area
Source: ERM 2010
Although less significant as a commercial activity, hunting is an important
source of income, through sale of meat and skins, as well as subsistence and
culture in Greenland. Significant species include muskox, reindeer, seabirds,
seals, walrus and whales.
Local Business Activity
The largest companies in Greenland tend to be Government-owned (such as
Royal Arctic Line, Air Greenland, Royal Greenland and KNI A/S) – with some
exceptions (such as Polar Seafood). Generally, however, the majority of
private businesses in Greenland are small, with few medium-sized
enterprises. Within the project area, the main sectors of business are
construction and repair. Tourism is also important locally, although its
contribution to the national economy is so far modest at the national scale.
Within the project-affected area, tourism activities include dogsledding and
skiing in the winter, hiking, whale watching, kayaking and sailing in the
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION-1
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fjords in the summer, along with sports fishing and excursions to historical
settlements and archaeological sites. Higher-level tourism infrastructure has
been developed in the larger towns of Sisimiut, Ilulissat and Kangerlussuaq.
The majority of businesses are associated within Chambers of Commerce or
similar businesses organizations. These structures promote economic and
industrial development in the municipalities, through training and capacity
building, encouraging collaboration.
Infrastructure
Towns and settlements in Greenland are not commonly connected by road.
Instead, passenger and goods are transported by sea or air. Because of the
importance of ports and airports as hubs of transport and commercial activity
in Greenland, impacts to these are carefully considered.
Ports are an important gateway for marine traffic in Greenland; the larger
ports, in particular, receive passenger vessels, cargo vessels, fishing trawlers,
cruise vessels, small scale fishing boats, foreign vessels and vessels that need
tank water and fuelling.
All towns and settlements will have a port of some level; however the main
commercial ports in the Project area are located in the largest towns of
Sisimiut, Ilulissat and Aasiaat.
Figure 7 Port of Sisimiut
Source: ERM 2009
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION-1
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The port of Sisimiut (Figure 7) is the major port of the region, and will be used
by the Project for storage and loading of supplies for the drill ships (through a
contract with Royal Arctic Line). Currently, it is used by commercial fishing
fleets, supply vessels, passenger ferries, and international cruise ships.
Stakeholders have reported that traffic through this port is a serious issue, and
raised concerns that Project activities might create further congestion. Port
Authorities in Sisimiut reported that there is already a high likelihood of
delays to port access at all times of the week (including Sundays), with delays
reaching 12- 24 hours. Because the port is run by Royal Arctic Line, the issue
raised was less about meeting the Project needs, and more about potential
challenges faced by other port users.
Air Greenland is the only air carrier in Greenland. As the national aviation
company, Air Greenland provides both commercial flight services and well as
social transport needs for the country, including transport of goods and
supplies and medical response/ transport.
Nearly all towns and settlements will have at least a helicopter pad, while
most towns have at least a small airport. Airports in Greenland are managed
by the Airport Authorities, which are responsible for the staffing and
scheduling of national airports. In some towns, limited air tower controllers
restrict the opening hours of airports, which can affect air travel to and from
those areas.
The Aasiaat airport, which currently operates a six hour window, will have its
capacity supplemented to meet Project needs for crew transport and
emergency response. The airport authorities have indicated that they plan to
reallocate four tower controllers from elsewhere in Greenland during the
period of exploration drilling, to allow the airport to operate 24/7. There are
no plans to develop airport infrastructure specifically for this Project; staff at
airports from which supplemental operators have been drawn will be
expected to compensate for the reduced manpower with overtime.
Greenland lacks the equipment and infrastructure necessary for high level
emergency response or SAR. In recognition of this, Capricorn will establish oil
spill equipment adequate to respond to a significant oil spill on the west coast.
This means that in the already unlikely event of an oil spill, response could be
immediately initiated, and access to response equipment would not be
delayed.
Any significant non-routine event, including both oil spills and emergencies,
would require a coordinated response among national authorities, who would
need full awareness of Project-specific emergency planning provisions. In
recognition of this, a contingency committee was created in 2000 to oversee
emergency planning in mineral and petroleum projects. The committee
represents the key organizations that would be implicated in the event of an
emergency, including the police, Danish High Commission, Department of
Health, Department of Environment, the national contingency committee, the
Danish Maritime Authority, and the navy. In the context of a major event, the
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION-1
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committee ensures that relevant parties remain updated on the situation and
that response is undertaken in a coordinated way, incorporating the capacities
of all parties.
The contingency committee would be provided with the opportunity to
review and comment on the health and safety plan of the Project. Training
and emergency response simulations will ensure that the relevant personnel at
both state and company level understand procedures in the event of an
emergency, and gaps in capacity can be identified and addressed in advance
of an actual event.
THE PROJECT
Capricorn has a working interest in a total of eight exploration licences off the
south and west coasts of Greenland, although the current drilling programme
and the remit of this SIA is concerned solely with the planned exploration
programme in Block 1, Sigguk. The drilling programme is planned to take
place over four months, with a two month contingency for relief well drilling
in case of a major unplanned event (see Table 2 below).
Table 2 Outline Drilling Schedule
2010 May June July August Sept Oct Nov Dec
Mobilisation
Drilling (4 wells)
Relief Well
The programme will involve the drilling of four wells, with the possibility of
drilling up to a further two wells in the same block within the existing project
schedule should initial drilling go faster than expected and if it proves
operationally worthwhile, and pending additional environmental approvals.
The drilling programme itself will employ a range of state-of-the-art
technology and operating standards to meet the challenges of drilling in the
offshore Arctic environment. Two mobile offshore drill units (MODUs)
(Figure 8) will be employed in order to provide a high degree of operational
and safety contingency. A number of vessels will be employed to provide
support and emergency cover for the operations, including supply boats,
support vessels and ice breakers. A ‘wareship’ will provide offshore storage
and contingency accommodation off the coast at Aasiaat, with helicopters and
fixed wing aircraft used to transfer personnel to and from the field area, the
support facilities and the international airport at Kangerlussuaq. Existing
onshore facilities at Nuuk, Aasiaat, Sisimiut and Ilulissat will be utilised for
material lay down, helicopter operating base, handling of some wastes, supply
of fuel, water and materials and limited onshore accommodation for up to 12
project personnel.
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION-1
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The two MODUs are the Stena Forth, a modern drill ship designed to work in
deep water and harsh conditions including broken ice, and the Stena Don, a
dynamically-positioned semi-submersible drilling unit also designed for work
in harsh environments. As both MODUs remain on station using thrusters
there is no requirement for anchoring during normal operations.
Figure 8 Stena Forth Drillship and Stena Don Semi-Submersible Drilling Rig
Source: Photo courtesy of Stena
The planned drilling depths are between 3,000 and 4,000m below seabed. The
drilling process uses drilling bits of different sizes to drill a series of holes
from the seabed to the planned well depth. The Project plans to use only
substances categorised as those which Pose Little Or No Risk (PLONOR) to
the Marine Environment, or that are ranked in the least potentially harmful
hazard band (Gold or E).
Rock cuttings from the drilling process will be circulated back to the drilling
unit where the muds are separated for reuse and the treated cuttings are
discharged to sea. Between 500 and 740m3 of cuttings are expected to be
produced from each well. Once each section of the hole has been drilled, the
drill string will be lifted out and casing will be lowered into the hole and
cemented into place.
If drilling results indicate the presence of hydrocarbons, the wells may be
tested. Testing is used to establish reservoir and fluid characteristics such as
pressure and flow rate. If required, there will be a controlled flow of
hydrocarbons back to the drill unit where they will be tested and flared, which
would involve periodic flaring over approximately 5 days. The likelihood of
flaring being undertaken is estimated at less than 6% per well. Any flaring
will require permitting by the Greenland authorities. A monitoring
programme and an oil recovery vessel with full dispersant capability will be
on standby throughout the process in case incomplete combustion of the flare
leads to ‘drop out’ of any unburnt oil onto the sea surface.
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION-1
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Following completion, the wells will be plugged and activities suspended.
Each well will have an industry standard wellhead at the surface, with a
protective cover to prevent damage to or from the wellhead due to snagging
or collision with vessels, trawling equipment or icebergs. Once all wells have
been drilled, the MODUs and support vessels will demobilise to their next job
or home base and leave Greenland waters.
SUMMARY OF IMPACTS AND MITIGATION
The proposed exploration activity has the potential to create a variety of social
impacts during the five months that it will be active. The sources identified in
this assessment are typical of offshore exploration operations around the
world.
As currently proposed, there are no unusual or unique sources of social
impacts associated with the drilling programme. An overview of the main
areas of impact, related operations and mitigation measures is shown in Table
3 below.
Overall, the drilling programme is predicted to have a slightly positive social
impact for Greenland. Negative social impacts are predicted to be not
significant or minor, and most of these impacts will be managed through
standard operating procedures.
The main reasons that the drilling programme is predicted to have minimal
negative social impacts are that
• Most of the drilling activities are located at significant distance
(approximately 150 kilometres offshore) from existing Greenlandic
communities; and
• The Programme is of a very short duration (five months).
For many of the same reasons, the Programme is not anticipated to have a
large and positive social impact. Although some economic benefits are
anticipated for Greenlandic enterprises, notably for Air Greenland, Royal
Arctic Line and their suppliers, local employment effects will be muted
because the ships and crews will be mobilised from outside Greenland. Other
opportunities for business development are likely to be limited to purchases of
fuel, water, food and some consumables to support the drilling operations.
Opportunities to enhance the positive social impacts of the exploration
programme, for example through training, are limited by its short time frame
and the specialist nature of the work. These limitations could change if the
current exploration programme is successful and leads to long-term
development of offshore hydrocarbon resources, which is outside the remit of
this current assessment.
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION-1
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Table 3 Summary of Main Impacts, Significance and Management Measures
Potential
Impact
Source/significance of
impact
Management Measures
Local
employment
One direct recruit and
support for existing
Greenlandic jobs in
transportation and
services.
• Consideration given to recruiting Greenlandic labour if
current staffing arrangements change.
• Recommend undertaking preliminary workforce
assessment during this phase of work to understand
existing workforce capacity and gaps to be addressed
Skills and
training
No formal knowledge
transfer activities are
currently being
planned.
• Recommend undertaking an assessment of Greenlandic
training programmes and institutions to develop
understanding of training capacity and where support
could be provided if the Project proceeds to
development.
Commercial
fishing.
The 500m exclusion
zone around drilling
operations and vessel
movements to and from
the exploration area.
• Location and movements of drill rigs and associated
vessels will be communicated to fishing and other
vessels in the area with a dedicated communication
programme;
• Designated vessels will monitor the exclusion zones and
ensure that any approaching vessels are guided away
from the rigs;
• The drill ships and support vessels will be illuminated
as required under the Navigation Act
• Safety protocols will be established for radio
communication with vessels entering the safety and
security zone around the drill ships.
• Recommend that Project vessels that could come into
contact with local boaters have access to a Greenlandic
speaker to ensure effective communication.
Whale
Hunting
Drilling activities could
disrupt whale
movements in the area
• Area within which whales could be affected is expected
to be limited
• Further consultation will be undertaken to determine if
the potential impact on whales can be monitored during
the period of operations.
Greenlandic
enterprises
Purchases of goods and
services from
Greenlandic enterprises
• Air Greenland and Royal Arctic Line are expected to be
contracted to provide transportation, supply, storage
and support services to the exploration operation.
• Local purchases of accommodation, foodstuffs, water,
fuel and other supplies will be prioritised.
Tourism Exploration related
activities in tourist
areas.
• No exploration related activities to take place in tourist
areas.
• Accommodation of onshore workers will provide
business to tourism and hospitality enterprises
Housing Living and
accommodation
arrangements for
drilling crews
• Drilling crews will be accommodated offshore with no
impact on municipal housing.
• Onshore workers (up to 30 aircrew in Ilulissat and 12
operations personnel in Aasiaat) will stay in hotels, with
no added pressure on municipal housing.
• Contingency accommodation arrangements for delays in
transfer of offshore workers will be provided by the
wareship moored in Aasiaat and existing
accommodation facilities in Kangerlussuaq, preventing
unplanned presence of large numbers of offshore
workers in Greenlandic communities.
ENVIRONMENTAL RESOURCES MANAGEMENT CAPRICORN GREENLAND EXPLORATION-1
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Potential
Impact
Source/significance of
impact
Management Measures
Port
facilities
Supply boats entering
port at Sisimiut may
displace other shipping
• Early and ongoing consultation with local authorities
and other key stakeholders.
• A schedule of regular vessel movements to and from the
port and drill ships will be provided to port
administration
• Recommend that the Project consider alternatives to
Sisimiut port where appropriate
Airport
services
Requirement for
increased capacity at
Aasiaat could deprive
other towns of air
traffic controllers,
needed to keep airports
open and operating
• Early and ongoing consultation with local air traffic
authorities and other key stakeholders
• A schedule of regular scheduled flights to and from key
airports in Kangerlussuaq, Ilulissat and drill ships will
be provided to air transport authorities
Emergency
response
structures
Limited local capacity
for emergency
response, potential that
services could be
overwhelmed
• Oil spill response equipment will be stored in Greenland
to allow immediate mobilisation to respond to a
significant spill offshore west Greenland.
• National structures will be engaged in health and safety
planning for the Project, including drills.
Local
culture and
community
Interaction with drilling
crews
• Contact between drilling crews and Greenlanders will
be minimised by maintaining crews at sea for the
duration of the drilling programme.
• Crews will be transferred directly between drill ships
and airport at Kangerlussuaq
The management measures outlined in the SIA have been developed from
extensive industry experience with offshore exploration drilling, and are tried
and tested. Furthermore, the management systems required to implement the
measures are well understood and known to be effective. Every attempt has
been made to ensure positive social impacts for Greenland from the
exploration programme and there is a high level of confidence that potential
negative social impacts can be successfully minimised through the
implementation of the management measures outlined above.