Arctic Base Supply: Enhancing Capabilities Amidst Greenland Oil & Gas Market Shifts

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Arctic Base Supply was established in 2010 in response to the growing oil and gas market in the Arctic/Greenland region.

The formation of the business represented a powerful alliance between Danbor Service Group and Royal Arctic Line. The combination of these two successful businesses enabled Arctic Base Supply to quickly achieve growth by leveraging a number of key strengths.

For example, Danbor Service Group’s employees are well versed in dealing with sensitive or complex handling operations in the most challenging environments, while Royal Arctic Line has extensive knowledge and expertise in navigating and operating in Arctic waters and a strong network of facilities in the region.

At the time of its formation the oil and gas industry in Greenland was growing as a number of major players made advances in exploration drilling wells and acquired licenses. However, when European Oil and Gas Magazine last featured the business, in early 2012, the sector had seen a downscaling in drilling and exploration work.

“The pace of oil excavation in Greenland did indeed slow down in 2012 and it looks like the current pace will continue throughout 2013 as well,” says Jens Panum Have, who was appointed as managing director of Arctic Base Supply at the beginning of this year. “This has given Arctic Base Supply the time to consolidate our agreements with partners and subcontractors with a specific focus on safety and security, procedures and formal training of staff and workers. Due to the big seasonal variations in the sector and the fact that the oil industry is essentially still in the excavation phase, Arctic Base Supply has to rely on its business with partners and subcontractors that, for the most part, do not have any experience in the oil and gas industry.

“This means that they do not have any experience with the safety and security requirements and what is necessary to be able to document every work procedure and process as is required by the oil and gas industry,” he continues. “We understand that to be 100 per cent successful as a Greenlandic company that can meet the international oil and gas industry’s demands, all of our partners and subcontractors have to be trained and guided in meeting these requirements, which is what we have been focusing on. In that sense, Arctic Base Supply can claim with pride to be a 100 per cent Greenlandic company that supports oil excavation in Greenland, and that it will be able to meet all of the demands and needs in terms of future production.”

Essentially, as the Greenlandic market has slowed Arctic Base Supply has been working hard to strengthen its business in order to ensure that it can meet the future work that is predicted in the area. Considering this, Jens highlights some of the recent developments at the business. “One area that we have been looking at is the harbour facilities that are present in the area, which are dimensioned to handle daily import and export cargo and to supply the remote villages of the region with supplies like food and petrol.

“The harbours in Greenland are vital to the survival of the country’s 57,000 inhabitants, particularly as cities and villages are not connected with roads but only via the sea or air,” he says. “Bearing that in mind the harbour facilities left to the oil and gas industry are actually quite limited. For this reason we have come up with a proposal for a new 65,000 m2 supply base to be established somewhere on the Greenlandic west coast. The importance here is not necessarily the location, but if the site can facilitate the industry when it comes to supplying the water, electricity, ice free environment, food accommodation and air access.

“Arctic Base Supply is not large enough on its own to develop this facility so we are actively looking for partners on the project because when the time comes for multiple oil and gas companies to operate in the area the existing base facilities will definitely be in short supply. The big question for us, and one that we are trying to solve, is who will finance the development of the facility. Once we have this established the running of it is not a problem – Arctic Base Supply is more than ready.”

While some of the focus will remain on continuing to develop this infrastructure, looking more generally at the future Jens predicts further consolidation of Arctic Base Supply’s business. “Over the next three to five years I don’t predict the oil and gas industry moving from excavation to production, meaning that companies will continue to primarily operate during the short summer period. That means that we will consolidate with our partners and subcontractors to ensure that when it comes to oil and gas logistics and base supply, and when the companies need these services, we can be the strongest partner in Greenland.

“I feel very fortunate to be appointed as CEO for Arctic Base Supply, and to be given the possibility to experience the magnificent nature and the challenges associated with operating in the Arctic. In the coming years I aim to keep Arctic Base Supply in its leading position within the oil and gas industry while looking to expand and exploit our knowledge in other industries such as mining,” he concludes.

Arctic Base Supply
Services: Logistics and support