Greenland oil profits stay in Greenland

This report from the The Copenhagen Post via the Denmark Ministry of Foreign Affairs reports that Greenland-Danish Autonomy Commission has recommended that Greenland should be granted the sole right to manage and sell potential oil reserves. This is another step in their process towards a Greenland Home Rule Act due in September.

Greenland, similar ethnographically to Nunavut, has sort of a territorial-like status within Denmark. It's in transition to becoming a self-governing nation in the Danish kingdom.

The commission has determined that all expenses incurred while conducting exploration for oil and income gained from the oil will go solely to Greenland.

They will not only be the primary beneficiary of this resource, they will be the only beneficiary of this resource.

Greenland receives from Denmark a kind of equalization-like annual block grant of DKK 3 billion (EUR 403 million) each year. That grant will be reduced by the amount of income taken in from future oil sales, but Greenland will still be entitled to at least DKK 75 million per year, according to the recommendation.

So much for exclusion of non-renewable natural resources in equalization. But you see no political jihads, no battles, no wars, no cries of separation - the Greenlanders see that option as sensible and reasonable.

For posterity, here is the full text

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OIL PROFITS LIKELY TO REMAIN IN GREENLAND
Income from potential oil deposits beneath Greenland are likely remain on the island

Greenland should be granted the sole right to manage and sell potential oil reserves, the Greenland-Danish Autonomy Commission recommended Wednesday.

The area in question is currently under joint Danish-Greenlandic control, but the commission - which will include the decision in its proposal for Greenland’s Home Rule Act in September - determined that all expenses incurred while conducting exploration for oil and income gained from the oil will go solely to Greenland, a self-governing nation in the Danish kingdom.

Denmark currently provides Greenland with a DKK 3 billion (EUR 403 million) annual block grant. That money will be subtracted from the income taken in from future oil sales, but Greenland will still be entitled to at least DKK 75 million per year, according to the recommendation.

Independent researchers as well as major oil companies have been conducting studies off Greenland’s west coast. Their findings indicate that up to 110 billion tons of oil could lie there - nearly 73 times more than Denmark’s North Sea oil reserves.

Lars-Emil Johansen, a Danish MP and Greenland’s former finance minister, said he was satisfied with the agreement.

‘It isn’t a goal for Greenland to continue to receive the block grant,’ he told financial daily Børsen. ‘We’re interested in a model where we gradually decrease the size of the grant as Greenland’s income from the oil increases - without it negatively affecting Greenlanders’ standard of living.’

There are currently eight oil research areas off Greenland’s west coast, but several other areas within Greenland’s territory have also been identified as potential oil reserves.

The Home Rule government has already received exploration applications from Exxon, Chevron, Husky and Denmark’s own Dong Energy.

The commission’s proposal is expected to be put into effect by June 2009.