CAIRN Energy boss Simon Thomson has outlined the Edinburgh-based explorer’s plans to spend up to £2.2 billion over the next five years to boost production and find more oil.
Thomson, who succeeded Cairn founder Sir Bill Gammell as chief executive in July 2011, said the FTSE 250-listed firm will spend an average of $250 million-$300m (£158m-£189m) a year on exploration and appraisal work and up to $2bn developing existing discoveries.
Last year Cairn completed the sale of a controlling stake in its Indian subsidiary to mining giant Vedanta Resources, freeing up cash to swoop on Norway-based Agora Oil & Gas and London-listed Nautical Petroleum. The two takeover deals gave the explorer stakes in the Catcher and Kracken developments in the North Sea, two of the largest oil fields being brought into production.
In a trading update ahead of March’s full-year results, Thomson said: “Our balance sheet strength means we are funded for all planned exploration and development, whilst retaining the flexibility to consider further opportunities.”
Thomson said Cairn would take on some debt to help fund the development work, but added that the company’s cash pile stood at $1.6bn, with its remaining 10 per cent stake in Cairn India valued at $1.1bn.
He reiterated that the company’s controversial exploration drilling programme in Greenland’s waters will continue, alongside other work going on in the British and Norwegian sectors of the North Sea, and in Malta, Morocco and Spain.