Cash Rich Cairn to Drill in the Atlantic

The Edinburgh-based Cairn Energy confirmed it has £1.6 billion to spend as it prepares to commence drilling in deep water off the Altantic coast of Morroco in coming weeks, it said in a market update today.

Cairn said drilling offshore Morocco was due to commence in the fourth quarter of this year after it bought a 50 per cent share in the Foum Draa block for $60 million (£37m) from Serica and its partners in August.

The company also confirmed it would commence an exploration drilling near Greenland on the Pitu block in 2014, subject to Government of Greenland approval.The company’s attempts to drill in Greenland last year caused the firm to write off close to $1 billion in exploration costs, although the company’s management has confirmed it is “convinced” that the area has potential for commercial discoveries. The company’s drilling programme on the Pitu block is a joint venture with Norwegian oil giant Statoil.

The company also expects to hear results of bids submitted for licensing rounds in Cyprus and Trinidad & Tobago by the end of the year. Over the next 12 months, Cairn said it also expects to participate in multiple exploration and appraisal wells in the North Sea.

Simon Thomson, chief executive, said: “Cairn is pleased with the progress made this year in re-balancing the portfolio for exploration-led growth underpinned by sustainable cash flow.

“Cairn’s balance sheet strength, entrepreneurial exploration skills and operational capabilities allow it to target high impact wells across transformational frontier and mature basins whilst accessing further growth from the company’s development and production assets.”