Economic woes to drive Greenland's hydrocarbons effort

Subject

Prospects for the hydrocarbons sector under the new government

Significance

After three years of GDP contraction, a new government is pursuing increased foreign investment in hydrocarbons, to boost employment and growth and to repair the budget. In the long term, Greenland is likely to emerge as an international shipping, mining and hydrocarbons centre. For now, the fall in the international oil price has seen oil exploration stop. The wish for economic development is leading a new generation of Greenlandic politicians to embark on re-integration with the EU, where a ban on seal products is the greatest obstacle to closer ties.

Impacts

• Infrastructure and climate challenges mean that full-scale oil and gas production is at least 15-20 years away.
• Emerging Greenland-China economic ties may create a new alignment in the opening up of the Arctic.
• A relaxation of the EU seal products ban would ease negotiations on Greenland's further integration with the bloc.
• Enhanced EU-Greenland ties could extend the EU's role in the Arctic.