Quick Take: Greenland's Oil No Holy Grail

You'd think that as geophysical technology advances, our estimates of recoverable reserves in the world's frontier areas would increase. In the case of Greenland's sea-ice stash, you'd be wrong. Yes, something is rotten in the state of Denmark's Arctic territory.

Back in 2000, the U.S. Geological Survey estimated that there were about 64.5 billion barrels worth of oil-equivalent resources lying below underwater ice sheets in northeastern Greenland. Now, they've come out with an estimate of 31.3 billion barrels of oil equivalent (BOE). Has ExxonMobil (NYSE: XOM  ) been quietly pumping billions of barrels out of Greenland without telling anyone? I haven't stopped by to check, but I'm going to go out on an iceberg and say no. The word on the sheet is that there's no technology available today to exploit resources sitting that far below the ice.

If this latest estimate is indeed more accurate than the last, this news is rotten indeed. Suddenly we have 33 billion fewer future barrels flowing from a democratic state than we thought. That means more Russian bear hugs, more Chavez shenanigans, and more Borat bullying.

I have a hunch that Chevron (NYSE: CVX  ) , Total SA (NYSE: TOT  ) , and ConocoPhillips (NYSE: COP  ) have known for quite some time exactly what they're in for. Chevron, for one, realized in the early 1990s that it would no longer be a shot-caller, but instead a "partner of choice" to less palatable powers.

Today's news out of the frozen north just reinforces my contention that multinational oil companies are on a path to fill the role of service technician to the relatively resource-rich and knowledge-poor national oil companies.

Fool contributor Toby Shute doesn't own a frozen banana stand, nor shares in any company mentioned. Total SA is an Income Investor recommendation. The Motley Fool has a cool disclosure policy.