Faroe Petroleum, the Aberdeen-based oil and gas company, said yesterday it had pre-qualified as an operator for the Greenland 2010 Baffin Bay licensing round.
This comes in advance of potentially submitting applications for licences.
The company said the undiscovered oil and gas potential offshore west Greenland, which includes the Baffin Bay licensing round area, was estimated by the US Geological Survey to contain up to 18billion barrels of oil equivalent.
Faroe said the Baffin Bay round, for which applications were being sought by May, covers the prospective north-west area of Greenland and was north of the Disko area where licences had been awarded to companies including Edinburgh-based Cairn Energy, Chevron and ExxonMobil, in 2007.
It said the area to be licensed was substantial and had been divided into 14 blocks.
Faroe added that pre-qualification was a key part of the process it was pursuing in potentially applying for licences in Greenland, a part of Denmark but with a devolved government.
It said licences had been granted on terms very similar to those applicable in the North Sea and the fiscal framework for future production in Greenland was similar to that in place for the UK and the Faroe Islands and was generally regarded as attractive.
Faroe chief executive Graham Stewart said: “As a key part of the Arctic region, which has the potential to hold up to 25% of the world’s undiscovered oil and gas resources, this is a very important and significant exploration opportunity.
“Greenland would represent a natural progression for Faroe Petroleum as a frontier exploration company focused on the Atlantic Margin, Norway and the Faroe Islands.
“This is a technical and geopolitical environment in which we believe we have strong credentials to build a successful exploration portfolio and we are excited at the opportunity it presents to us.”
The company has a licence portfolio encompassing eight west of Shetland, six offshore the Faroe Islands, two in the Moray Firth, nine in the southern UK North Sea gas basin and 20 in the Norwegian North Sea, Norwegian Sea and Barents Sea.
In addition, the Aberdeen company has interests in five producing oil and gas fields in the UK and Norway.
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