Re-evaluation of West Greenland suggests large offshore prospects

Martin Sonderholm
Greenland Bureau
Minerals and Petroleum (BMP)

James A. Chalmers, Flemming G. Christiansen
Geological Survey
Denmark and Greenland (GEUS)

West Greenland basin compared to the North Sea Viking-Central Graben system, showing the larger area available off West Greenland. [350,130 bytes]
Fylla prospect revealing very large, tilted fault blocks with prominent flat-spots. [65,696 bytes]
The Kanumas project was a seismic reconnaissance survey financed by BP, Exxon, Japan National Oil Co, Shell, Statoil, Texaco and Nunaoil. One test well was drilled. [181,286 bytes]
Kang?miut-1 was drilled on the western flank of the Kang?miut ridge and pierced a syntectonic fan before terminating in basement. High pressures were encountered while drilling the well. [39,146 bytes]
License areas and policies are under review. [87,907 bytes]

Gauging Davis Strait potential

The sedimentary basins offshore southern and central West Greenland are larger than the entire Viking-Central Graben system of the North Sea. However, the total seismic coverage is only around 60,000 line-kms, and of these, 37,000 km are of mid-1970s vintage. Thus, West Greenland is still under-explored, suggesting there could be possibilities for large discoveries.

Compared to the Labrador shelf, exploration conditions off southern West Greenland are less difficult. The region is navigable, generally ice-free all year and icebergs are rare. Furthermore, weather conditions are less severe than those of the northern North Sea.

Following almost two decades of minimal petroleum-related activity, West Greenland has experienced increased exploration interest, both offshore and onshore. Exploration originally started in areas off southern West Greenland in the early 1970s, with licenses being awarded in 1975 to six groups headed by Amoco, Chevron, ARCO, Mobil, Total and Ultramar. A total of nearly 40,000 km of seismic data were acquired and five wells were drilled in 1976 and 1977. However, all wells were at that time declared dry and exploration was discontinued in late 1978.

A re-evaluation by the Geological Survey in the late 1980s and early 1990s showed that all of the prospects drilled in the 1970s were in some way flawed. There was no seal in some, no reservoir in others, or else there was doubt about the integrity of the prospect. New regional investigations also showed that the continent-ocean boundary was much further seaward than previously realized. It became evident that petroleum exploration in the region had been abandoned prematurely.

In an attempt to re-attract the oil industry to the area, government authorities decided to fund seismic surveys. During 1990-92, the Geological Survey acquired 6,638 km of seismic data and Halliburton Geophysical Services (now Western Geophysical) acquired an additional 1,915 km of speculative data. At the same time, the Geological Survey also started petroleum geological studies of the Cretaceous-Tertiary sediments onshore central West Greenland.

Types of oil seeps

Oil seeps were found over an extensive area and geochemical studies revealed five different types of oil in the seeps. These discoveries demonstrated that the Nuussuaq Basin has an exploration potential of its own. They also demanded revision of the previous opinion that the Labrador-West Greenland shelf region contained only gas-prone source rocks.

A licensing round was initiated in 1992 for areas offshore West Greenland south of 66°N but no applications were submitted before the deadline of January 1993. One of the Geological Survey's seismic lines revealed not only very large, tilted fault blocks but also direct hydrocarbon indicators (DHI) in the form of prominent flat-spots. Unfortunately, the line was acquired too late to be available to the industry. The area over which this line was acquired later became known as the Fylla Structural Complex.

In 1994, an open-door policy was introduced for both offshore and onshore areas south of 70°30'N in West Greenland and for Jameson Land in East Greenland. Under this policy, the authorities would accept applications for exploration licences at any time.

The Greenlandic-Danish state-owned oil company, Nunaoil, acquired 1,706 km of speculative seismic data on a 1,015 km grid over the Fylla area in 1994. This data confirmed the existence of the flat-spots and allowed mapping of their extent. Following a very positive industry response, a license covering 9,487 sq km was awarded in late 1996 to a consortium of four companies: Statoil (as operator), Phillips Petroleum, Dansk Olie og Naturgas (DONG) and Nunaoil. As the state's participant, Nunaoil was carried in the exploration phase.

In May 1995, an exploration license onshore on Nuussuaq and Disko was granted to GronArctic Resources Inc, a small Canadian company, which carried out geophysical and shallow drilling work later that year.

Drilling, more seismic

A 2,996 meter-deep exploration well (GRO#3) was drilled in 1996. The well was declared dry by the operator, but later quantitative log interpretation by the Geological Survey of the upper, untested part of the well suggested high hydrocarbon saturations in thick sandstone units. However, due to problems in raising finance for the next part of its exploration commitments, GronArctic had to relinquish its license in early 1998.

This setback was counterbalanced by the signing of a new license offshore Sisimiut in West Greenland in June 1998 by a consortium of Phillips Petroleum (operator), Statoil and Dong with Nunaoil (carried in the exploration phase). Apart from the program carried out under the two offshore licenses, two speculative surveys were acquired in 1998 by the Fugro-Geoteam/Danpec group and by Nunaoil. The Fugro-Geoteam/Danpec group has also initiated a project involving reprocessing of older seismic data on a non-exclusive basis.

The Kanumas project was a seismic reconnaissance survey in the extreme northern frontier areas offshore eastern and western Greenland. Six major oil companies: BP, Exxon, Japan National Oil Company, Shell, Statoil and Texaco with Nunaoil (as carried partner and operator), financed the project.

In all, 4,071 km were acquired offshore Northwest Greenland (Baffin Bay), 5,637 km off Northeast Greenland, and 1,323 km off central East Greenland in the period 1991-1995. The Kanumas group holds a preferential position in the areas covered by the seismic surveys.

West Greenland prospects

The Fylla structural complex, situated at about 64°N just west of Nuuk, comprises several giant structural prospects within an area of 130,160 km. The complex contains anticipated gas reserves of tens of tcf and possibly an underlying oil column. The prospects consist of large, tilted fault blocks created probably in the early Tertiary and draped by Paleogene mudstones.

Additional evidence that the flat-spots are caused by the presence of hydro carbons is provided by AVO (amplitude versus offset) analyses on a number of seismic lines. Gas and possibly oil could be sourced from mudstones associated with the Cenomanian-Turonian highstand, or from lacustrine mudstones and coals within an early synrift sequence, above which is the primary reservoir interval. The first exploration well in the Fylla license is planned for 1999. The Statoil group carried out site surveys in 1998.

Kang?miut-1 well test

Its operator declared the Kang?miut-1 well dry in the mid-1970s. It was drilled on the western flank of the Kang?miut ridge and the deepest part probably drilled through a syntectonic fan before terminating in basement. New studies suggest that sandstones in the shallowest part of the fan may contain oil.

During drilling, such high pressures were encountered that it took nine days to control the well using very high mud weights. Up to 9% wet gas was recorded during circulation of the mud. A drill stem test of the porous interval produced water that had the same chemistry as the drilling mud. It is thus possible that liquid hydrocarbons in the reservoir were simply flushed away during the mud operations, and thus the prospectivity of the Kang?miut Ridge was not successfully evaluated by the well.

Near Disko

A promising prospect about 50 km to the west of the island of Disko has recently been identified by the Geological Survey on seismic data acquired in 1995 and funded by the Danish and Greenland authorities. Strongly reflecting horizons (bright spots) can be seen on four seismic lines above a horst block that is closed at top basalt level. The structure dips from east to west and closes at about 1,500 meters. The shallowest part of the structure is at around 1,000 meters and is covered by 800-1,300 meters of sediment. Water depths are about 200 meters.

The bright spots are visible at top basalt level and at a horizon about 200 meters above the basalts. They extend approximately 55 km in the north-south direction and from 7 to 23 km in the east-west direction, an area of approximately 1,000 sq km that coincides approximately with the structural closure. Studies on two of the seismic lines show that the bright spots exhibit strong AVO anomalies. These features together suggest the presence of hydrocarbons.

On Disko and on Nuussuaq to the northeast, oil staining and seepage is common in outcropping Paleocene basalts especially close to or within regional fracture zones. The oil was generated from source rocks within Cretaceous-Paleocene sediments underlying the basalts. It is therefore entirely possible that oil generated offshore could have migrated through the basalts and been trapped in reservoirs in the overlying sediments.

New licensing strategy

In July 1998, the administration of mineral and petroleum resources was transferred from the Danish Minister of Environment and Energy to the Bureau of Minerals and Petroleum under the Greenland Home Rule Government in Nuuk. In order to stimulate petroleum exploration activities around Greenland, the Greenland and Danish Governments decided to develop a new exploration strategy.

A working group was set up consisting of members from the authorities. Contacts have also been made with various companies. They may contribute their views on the best ways to explore the various regions off and onshore Greenland and how those regions could best be promoted in the coming years.

A decision will also be made on whether to continue the open-door policy in the region south of 70° 30'N in West Greenland should continue or whether to initiate a more formal scheme. The working group is due to report in early 1999. Until this happens, the open-door policy has been suspended. For further information, contact the Bureau of Minerals and Petroleum ([email protected]) or the Geological Survey of Denmark and Greenland ([email protected]).