TASIILAQ, Greenland: From a helicopter, Greenland’s brilliant white ice and dark mountains make the desolation seem to go on forever. And the few people who live here — its whole population wouldn’t fill a football stadium — are poor, with a high rate of substance abuse and suicide.
One scientist called it the “end of the planet.”
When US President Donald Trump floated the idea of buying Greenland, it was met with derision, seen as an awkward and inappropriate approach of an erstwhile ally.
But it might also be an Aladdin’s Cave of oil, natural gas and rare earth minerals just waiting to be tapped as the ice recedes.
The northern island and the rest of the Arctic aren’t just hotter due to global warming. As melting ice opens shipping lanes and reveals incredible riches, the region is seen as a new geopolitical and economic asset, with the US, Russia, China and others wanting in.
“An independent Greenland could, for example, offer basing rights to either Russia or China or both,” said Fen Hampson, the former head of the international security program at the Center for International Governance Innovation think tank in Waterloo, Ontario, who is now a professor at Carleton University.
He noted the desire by some there to secede as a semi-autonomous territory of Denmark.
“I am not saying this would happen, but it is a scenario that would have major geostrategic implications, especially if the Northwest Passage becomes a transit route for shipping, which is what is happening in the Russian Arctic.”
In April, Russian President Vladimir Putin put forward an ambitious program to reaffirm his country’s presence in the Arctic, including efforts to build ports and other infrastructure and expand its icebreaker fleet. Russia wants to stake its claim in the region that is believed to hold up to one-fourth of the Earth’s undiscovered oil and gas.
China sees Greenland as a possible source of rare earths and other minerals and a port for shipping through the Arctic to the eastern US It called last year for joint development of a “Polar Silk Road” as part of Beijing’s Belt and Road Initiative to build railways, ports and other facilities in dozens of countries.
But while global warming pushes the cold and ice farther north each year, experts caution that the race to the Arctic is an incredibly challenging marathon, not a sprint.
The melting of the Greenland ice sheet creates uncertainty and danger for offshore oil and gas developers, threatening rigs and ships.
“All that ice doesn’t suddenly melt; it creates icebergs that you have to navigate around,” said Victoria Herrmann, managing director of the Arctic Institute, a nonprofit focused on Arctic security.
On the other hand, while mining in Greenland has been expensive due to the environment, development costs have fallen as the ice has melted, making it more attractive to potential buyers, she said.
Strategically, Greenland forms part of what the US views as a key corridor for naval operations between the Arctic and the North Atlantic. It is also part of the broader Arctic region, considered strategically important because of its proximity to the US and economically vital for its natural resources.
Hampson noted it was an American protectorate during World War II, when Nazi Germany occupied Denmark, and the US was allowed to build radar stations and rent-free bases on its territory after the war. That includes today’s Thule Air Force Base, 1,200 kilometers (745 miles) south of the North Pole.
After the war, the US proposed buying Greenland for $100 million after flirting with the idea of swapping land in Alaska for parts of the Arctic island. The US also thought about buying Greenland 80 years earlier.
Trump “may not be as crazy as he sounds despite his ham-fisted offer, which clearly upset the Danes, and rightly so,” Hampson said.
Greenland is part of the Danish realm along with the Faeroe Islands, another semi-autonomous territory, and has its own government and parliament. Greenland’s 56,000 residents got extensive home rule in 1979 but Denmark still handles foreign and defense policies, with an annual subsidy of $670 million.
Its indigenous people are not wealthy, and vehicles, restaurants, stores and basic services are few.
Trump said Sunday he’s interested in Greenland “strategically,” but its purchase is “not No. 1 on the burner.”
Although Danish Prime Minister Mette Frederiksen called Trump’s idea to purchase Greenland an “absurd discussion,” prompting him to call her “nasty” and cancel an upcoming visit to Copenhagen, she also acknowledged its importance to both nations.
“The developments in the Arctic region calls for further cooperation between the US and Greenland, the Faeroe Islands and Denmark,” she said. “Therefore I would like to underline our invitation for a stronger cooperation on Arctic affairs still stands.”
Greenland is thought to have the largest deposits outside China of rare earth minerals used to make batteries and cellphones.
Such minerals were deemed critical to economic and national security by the US Interior Department last year, and as demand rises “deposits outside of China will be sought to serve as a counterbalance to any market control that could be exerted by a single large producer,” said Kenneth Medlock, senior director at the Center for Energy Studies at Rice University.
Off Greenland’s shores, the US Geological Survey estimates there could be 17.5 billion undiscovered barrels of oil and 148 trillion cubic feet of natural gas, though the remote location and harsh weather have limited exploration. Around the Arctic Circle, there’s potential for 90 billion barrels of oil.
Only 14 offshore wells were drilled in the past 40 years, according to S&P Global Analytics. So far, no oil in exploitable quantities has been found.
“It’s very speculative, but in theory they could have a lot of oil,” said Michael Lynch, president of Strategic Energy & Economic Research Inc. “It’s perceived as being the new Alaska, where the old Alaska was thought to be worthless and turned out to have huge reserves. And it’s one of the few places on Earth that’s lightly populated, and it’s close to the US“
Michael Byers, an Arctic expert at the University of British Columbia, suggests there are better approaches for Washington than the politically awkward suggestion of purchasing Greenland.
“There’s no security concern that would be dealt with better if Greenland became a part of the United States. It’s part of the NATO alliance,” he said. “As for resources, Greenland is open to foreign investment. Arctic resources are expensive and that is why there is not more activity taking place. That’s the barrier. It’s not about Greenland restricting access.”
That’s been the approach taken by China, which has had mixed success. Greenland officials have visited China to look for investors but Beijing’s interest also has provoked political unease.
In 2016, Denmark reversed plans to sell Groennedal, a former US naval base that the Danish military had used as its command center for Greenland after a Hong Kong company, General Nice Group, emerged as a bidder, according to defensewatch.dk, a Danish news outlet.
Last year, then-US Defense Secretary James Mattis successfully pressured Denmark not to let China bankroll three commercial airports on Greenland, over fears they could give Beijing a military foothold near Canada, The Wall Street Journal reported.
Beijing’s biggest Greenland-related investment to date is an ownership stake by a Chinese company in Australia-based Greenland Minerals Ltd., which plans to mine rare earths and uranium.
“People talk about China, but China can access Arctic resources through foreign investment,” Byers said. “And foreign investment is a lot cheaper than trying to conquer something.”
Climate change turns Arctic into strategic, economic hotspot
Climate change turns Arctic into strategic, economic hotspot
- The race to the Arctic is an incredibly challenging marathon, not a sprint
ACWA Power signs $800m water purchase agreement with Senegal
RIYADH: Saudi energy giant ACWA Power has signed an SR3 billion ($800 million) agreement with Senegal’s Ministry of Water to develop a desalination plant.
The company, partly owned by the Public Investment Fund, announced the inking of a water purchase agreement for the construction of the facility in Dakar, Senegal in a statement on the Saudi Stock Exchange, Tadawul.
ACWA Power will be responsible for the infrastructure, design and financing as well as construction, operation and maintenance of the Grande Cote seawater desalination plant in the West African country.
The project will have a production capacity of 400,000 cubic meters per day, the statement said.
NEOM CEO lands in top 3 of Forbes’ Real Estate Leaders list
RIYADH: NEOM CEO Nadhmi Al-Nasr has been ranked third in Forbes Middle East’s “Most Impactful Real Estate Leaders” list, underlining the Kingdom's prominence in the sector.
The giga-project chief was placed beneath Mohamed Al-Abbar from the UAE-based Emaar Properties, Talal Al Dhiyebi from Abu Dhabi-headquartered Talal Al-Dhiyebi.
The Kingdom saw the second most entries on the list, with 23 Saudis landing on the publication’s ranking.
This is a testament to the major investments the nation has made in its real estate sector, a statement from Forbes noted.
“Governments, corporates, and semi-government developers are investing in real estate projects throughout the region, particularly in Saudi Arabia, Egypt, and the UAE. These projects are giving a huge boost to the regional construction sector, which also has a positive outlook over the next few years,” the statement said.
UAE, Japan to develop industrial steam and electricity cogeneration plant in Saudi Arabia
Abu Dhabi National Energy Co., also known as TAQA, together with JERA Co., Inc, Japan’s largest power generation company, announced Thursday that they have entered into a Power and Steam Purchase Agreement with Saudi Aramco Total Refining and Petrochemical Co., or SATORP, a joint venture company owned by Saudi Aramco and TotalEnergies.
According to the Emirates News Agency, they will develop a greenfield industrial steam and electricity cogeneration plant that will produce electricity and steam for the Amiral petrochemical complex to be developed in Jubail in the Eastern Province of Saudi Arabia.
The Amiral petrochemical complex is expected to house one of the largest mixed-load steam crackers in the Arab Gulf region.
The Amiral cogeneration plant will include state-of-the-art power and steam generation systems, gas and water receiving systems, and gas-insulated switchgear interconnections while meeting stringent efficiency standards imposed by the Saudi Energy Efficiency Centre.
The project also provides for the future installation of a carbon dioxide capture plant and is capable of hydrogen cofiring, WAM reported.
The Amiral cogeneration plant will be developed by a special purpose entity owned by TAQA, holding 51 percent, and JERA, holding 49 percent. It will operate on a build, own, and operate basis for 25 years, with the possibility of extension by five years upon mutual agreement.
TAQA and JERA will also undertake the operation and maintenance of the plant through an O&M special purpose entity.
Farid Al Awlaqi, CEO of TAQA Generation, said: “The signing of the offtake agreements for the cogeneration power and steam project at the Amiral petrochemical facility, a key downstream project being developed by two of the world’s leading energy companies, demonstrates the confidence in TAQA’s ability to deliver critical utilities, including power and steam effectively.
Together with our partner JERA, TAQA is looking forward to developing an efficient cogeneration plant that reduces carbon emissions and supports SATORP with its long-term decarbonization program. The agreement will bolster TAQA’s efforts in building on our growth and executing our 2030 goals.”
Steven Winn, chief global strategist of JERA, said: “We will be providing stable, highly efficient, clean and reliable power and steam to our customer SATORP. The Amiral Cogeneration plant will not only enhance the Amiral Complex’s operational efficiency, but also demonstrate our commitment to environmental stewardship and our growth ambitions for sustainable power generation solutions in the Kingdom of Saudi Arabia and the region.”
Saudi media giant SRMG’s revenue grows to $997m
RIYADH: Saudi Research and Media Group’s revenues hit SR3.74 billion ($997 million) in 2023, reflecting a 0.98 percent increase compared to 2022 figures.
According to a Tadawul statement, this increase in sales is primarily attributed to enhanced revenue generated by the publishing and visual and digital content segment, as well as other divisions.
However, the printing and packaging business witnessed a decline in revenues due to several planned projects not being secured.
The total shareholders’ equity for the parent company, after excluding non-controlling interest, as of Dec. 31, 2023, stands at SR3.08 billion, reflecting a 16.26 percent increase compared to the corresponding period a year earlier.
Meanwhile, SRMG’s net profits reached SR559 million by the end of last year, showing a decrease of 13.74 percent compared to the same period in 2022.
The decline was primarily attributed to the drop in revenue of the printing and packaging division, along with the goodwill impairment associated with the same segment, in addition to the operating costs of certain projects.
In January, SRMG, the largest integrated media group from the Middle East and North Africa region, announced the appointment of several new editors-in-chief, deputy editors-in-chief, and assistant editors-in-chief.
This announcement aligned well with SRMG’s digital transformation, growth, and expansion strategy, showcasing the group’s dedication to cultivating the next generation of journalists and media professionals to meet the demands of audiences worldwide.
Moreover, this decision reflected the significant shift in regional media consumption habits, particularly with the increasing popularity of digital, social, and audio-visual media platforms.
Foreign direct investment inflows to Saudi Arabia hit $5.17bn in Q4 2023
RIYADH: Foreign direct investment inflows to Saudi Arabia rose 17 percent in the fourth quarter of 2023 compared to the previous period, according to recent data.
The analysis, released by the General Authority of Statistics, utilizes an updated approach characterized by heightened transparency and governance standards. FDI inflows were shown to have reached SR19.38 billion ($5.17 billion), up from SR16.6 billion in the third quarter.
FDI outflows, representing the Kingdom’s investments in foreign countries, also increased by around 17 percent to SR6.19 billion during this period. Consequently, the net inflow, reflecting the difference between the two, reached SR13.187 billion.
The updated methodology for calculating FDIs aligns with international standards and was developed to enhance accuracy and comprehensiveness through collaborative efforts by the Ministry of Investment, the General Authority for Statistics, and the Saudi Central Bank, in conjunction with the International Monetary Fund.
The new methodology reflects the Kingdom’s commitment to enhancing investment promotion and transparency, aiming to create an attractive global financial environment.
This effort includes initiatives such as the National Investment Strategy, the Regional Headquarters Program, and zero-income tax incentives for foreign companies. These measures are seen as essential for advancing Vision 2030, which aims to expand and diversify Saudi Arabia’s economy.
In 2023, the Kingdom saw a 12 percent increase in FDI inflows, reaching SR72.28 billion compared to SR64.6 billion in 2022. This excludes a major SR58.1 billion deal with Aramco in 2022, where a consortium led by BlackRock Real Assets and Hassana Investment Co. acquired a 49 percent stake in a new gas pipeline subsidiary.
Saudi Arabia’s regional headquarters program has attracted multinational corporations like Google, Microsoft, and Amazon to establish operations in the Kingdom. Additionally, companies such as Northern Trust, Bechtel, and Pepsico from the US, as well as IHG Hotels & Resorts, PwC, and Deloitte from the UK, have joined this initiative.
These moves enable these companies to participate in government contracts, energize Saudi Arabia’s hospitality sector, and establish it as a global business hub.
Looking ahead, the Kingdom aims to achieve an FDI inflow target of SR388 billion by 2030, equivalent to 5.7 percent of gross domestic product, while positioning itself among the 15 largest economies in the world.