June 13 (Bloomberg) -- Denmark and Greenland agreed to divide future oil proceeds from the Arctic Island, which may hold reserves equivalent to those of the North Sea.

Anders Fogh Rasmussen, Denmark's prime minister, and Hans Enoksen, the premier of Greenland, which is a semi-autonomous Danish territory, today signed an oil income agreement, which also included steps toward increased independence for Greenland.

``This agreement recognizes us as a people, it makes Greenlandic our official language and it gives us our right to our underground resources,'' Enoksen said at a Copenhagen press conference after talks with Rasmussen.

Oil companies have begun looking for crude oil deposits off Greenland's west coast. The island's government hasn't made an exact estimate of the amount of oil in the region other than to say it's ``equal to North Sea reserves.'' The North Sea's past production and future reserves totals more than 50 billion barrels of crude oil.

Under today's agreement, Greenland will receive the first 75 million kroner ($15 million) generated from oil production, while the two governments will split additional proceeds until Denmark has received an equivalent of the 3.2 billion kroner it pays in annual subsidies to the Arctic Island. Greenland will receive all additional proceeds after that.

``It's only natural that we share the proceeds that may come,'' Rasmussen said. `It's of utmost importance that Greenland improves the ability to generate income'' before it can become more independent, he said.

Oil Licenses

Last October, Greenland's government awarded licenses to explorers including Chevron Corp., Exxon Mobil Corp. and Husky Energy Inc. The companies will now collect seismic data to determine the best drilling locations.

Enoksen, who said that some Greenlanders had ``suffered'' under 300 years of Danish ``colonial'' rule, noted that it was up to Denmark to decide if it would apologize, like Canadian Prime Minister Stephen Harper did this week to his country's aboriginals.

``We have no plans for that,'' Rasmussen said. ``Denmark hasn't got anything at all to be ashamed of when it comes to Greenland. We built their welfare system.''

To contact the reporter on this story: Christian Wienberg in Copenhagen at cwienberg@bloomberg.net

Last Updated: June 13, 2008 09:44 EDT