Cairn Energy buoyed by '˜world-class' Senegal discovery
Oil and gas explorer Cairn Energy has again raised its estimate of how much crude could be contained in its field off the west coast of Africa.
The Edinburgh-based firm said the best estimate of contingent resources at the “world-class” SNE discovery, about 60 miles offshore Senegal, now stands at 473 million barrels – some 23 per cent higher than previous estimates.
Chief executive Simon Thomson said: “Drilling is scheduled to re-commence in Senegal shortly, benefiting from lower costs across the sector. The programme contains options for multiple wells and in addition to ongoing appraisal of the SNE field, the joint venture continues to assess optimal locations for further exploration drilling on the acreage.”
He added: “Cairn’s exploration and appraisal focus in Senegal is balanced with development assets in the UK, with first oil targeted from both Kraken and Catcher during 2017 and in the meantime Cairn remains fully-funded in respect of all of its capital commitments.”
Thomson’s comments came as Cairn reported a loss of $38 million (£29m) for the six months to the end of June, down from $230m a year earlier, when its bottom line was hit by a $168 writedown on the value of its 10 per cent stake in former subsidiary Cairn India Limited (CIL), which it cannot sell amid an ongoing dispute with the Indian tax authorities.
“International arbitration proceedings have commenced in respect of Cairn’s claim under the UK-India Bilateral Investment Treaty,” Cairn told investors.
“Cairn is seeking restitution for losses resulting from the attachment of its shares in CIL and failure to treat Cairn and its investments fairly and equitably.”
Its shareholding in the business was valued at $1 billion at the end of 2013, but has since slumped in value to $383m.
The group added: “Cairn has asked the arbitration panel either to order India to withdraw its unlawful tax demand and compensate Cairn for the harm suffered by the seizure of the CIL shares, being not less than $1.1bn (plus costs); or, if the tax demand remains in place, compensate Cairn for the quantum of the tax assessment and the harm suffered by the seizure of the CIL shares, being together not less than $5.6bn (plus costs).”