'˜Exciting' opportunities in pipeline for Cairn Energy

Oil and gas explorer Cairn Energy has lined up 'exciting opportunities' around the world as it presses ahead with work off the coast of West Africa, its chief executive said today.

Cairn Energy chief executive Simon Thomson. Picture: Contributed

Simon Thomson said projects in Ireland, Norway and Mexico would provide the Edinburgh-based firm with additional drilling prospects in the near term as Cairn works on developing the “world-class” SNE field off Senegal.

• READ MORE: ‘Landmark’ as first oil flows from North Sea’s Kraken

He added: “The first half of this year has been an incredibly busy time for us. We now have our first production for five years on stream in the North Sea and there’s more to follow in the second half.

“We’ve made significant progress on our world-class Senegal development and added exciting additional exploration opportunities such as our recently announced acreage in Mexico.”

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Cairn has raised its resource estimate for SNE – Senegal’s first offshore oil project – by a fifth to about 563 million barrels of oil, with additional recoverable gas resources of more than 1 trillion cubic feet.

The company received a further boost recently as first oil started flowing from the massive Kraken field, which lies about 80 miles east of Shetland and is estimated to contain about 140 million barrels.

Cairn has a 29.5 per cent stake in Kraken, where production is expected to plateau at 50,000 barrels a day next year. Similar amounts are due to start flowing from the Catcher field – in which the firm has a 20 per cent interest – when it comes on stream later this year. Net production for Cairn from both fields will amount to some 25,000 barrels a day.

• READ MORE: Cairn eyes end to India tax row as ‘busy year’ looms

“With a strong balance sheet and imminent cashflows, Cairn remains well funded to create and capture value for our shareholders,” Thomson said.

Cairn ended the first half of the year with $254 million (£197.3m) of cash, but it remains unable to access its remaining stake of about 5 per cent in former subsidiary Cairn India, valued at $824m, amid an ongoing tax dispute with the Indian authorities.

Thomson said: “We remain confident in terms of the outcome of the arbitration and our chances of success.”

A final and binding ruling over the row is expected in January.

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