Cairn Energy, a London-based multi-national, has released its 2012 annual report which highlights its Greenland offshore exploration efforts.
The company has 11 blocks with a 102,000 km2 combined exploration area The focus of its current activity in the region is in the Pitu licence block. In Baffin Bay, Cairn participated in a joint shallow borehole programme operated by Shell on behalf of an industry consortium which includes ConocoPhillips, GdF, Nunaoil, Maersk, Tullow and Statoil. The 11 completed boreholes provide valuable information to help stratigraphic correlations across the undrilled Melville Basin.
Cairn and its joint venture partners, Nunaoil and Statoil, are encouraged by the opportunity in the Pitu exploration block, with combined prospects within the 3D area confirming a potential multi-billion boe prospective resource. The mapping and evaluation of the 3D seismic has identified a number of prospects. A drilling decision will be taken in 2013 targeting an exploration well in 2014, to test this prospectivity with a well on the main structural high, subject to necessary approvals and rig availability. The Pitu block is located ~100km offshore north west Greenland in water depths ranging from 400m to 800m.
During 2012, Cairn visited local communities near Pitu to better understand any concerns and their hopes for future activities. This study is also helping us to develop social plans which effectively manage the potential impacts and concerns from the local communities.
Fifteen months ago Cairn decided to farm out of 30.625% interest in the Pitu block in Greenland to Statoil ASA, effectively de-risking the exposure of this expensive exploration expenditure.
Cairn is betting heavily on Greenland. Interestingly, Cairn in Greenland and Shell in Alaska are both planning to drill in 2014, but not in 2013.
The company has $1.3 B cash. When it comes to offshore arctic drilling deep pockets are definitely required.