Cairn Energy is a high-stakes/high reward type of energy explorer. The Edinburgh-based explorer spent $1.2bn drilling eight wells in 2010 and 2011 without striking oil. Now the company is preparing to drill a new well in 2014.
Since the failures off Greenland, Cairn has focused on “rebuilding” its portfolio. Cairn will spend $700m in exploration and appraisal drilling over this year and next, drilling 15 wells including appraising the potential of previous discoveries. The company will spend most of its exploration budget on frontier drilling. It hopes to proceed with a ninth well next year, backed by Norway’s Statoil, which bought into one of Cairn’s licences in early 2012. The companies will decide this year whether to drill the Pitu prospect, which could contain 3bn barrels of oil.
Cairn has the 70% of the drilling rights to 8,147 km2 at the Pitu site, in the high arctic off the west coast of Greenland. Statoil ASA (Statoil) acquired a 30.6% working interest in the Pitu license in Baffin Bay, offshore Greenland from Cairn Energy PLC (Cairn).
Cairn Energy is an Edinburgh-based oil exploration and production firm with global activities. It is listed in London.
Cairn has brought on giant Statoil to reduce the risk after 8 unsuccessful wells. Environmentalists are highly critical of off-shore Greenland drilling, yet the Greenland government is supportive.