Cairn confirms Greenland oil find
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|Tue, 08-24-2010 - 9:31am|
â€¢ Cairn says well has found gas and oil-bearing sands in Arctic
â€¢ Greenpeace ship already in area protesting against drilling
Cairn Energy has confirmed that it has discovered gas and oil-bearing sands off the coast of Greenland in a move that will heighten fears of environmental campaigners that the Arctic is set to become the scene of the world's last great dash for oil.
Greenpeace's ship Esperanza is already in the area, protesting against the actions of Cairn Energy, the first company permitted to drill for oil in the sensitive environment. Earlier this week it was challenged by a Danish warship whose captain is enforcing a 500-metre exclusion zone around the two wells.
Environmental campaigners fear that drilling in the previously untouched Arctic area raises the risk of an environmental disaster on the scale of the Deepwater Horizon spill in the Gulf of Mexico. The oil industry, however, will welcome Cairn Energy's announcement as confirming their suspicions that the Arctic harbours one of the world's last remaining major reserves of oil.
In a statement accompanying its half-year results, Cairn Energy said one of its two exploration wells in Baffin Bay, which is of a similar scale to the North Sea, has found "gas in thin sands" which "is indicative of an active hydrocarbon system". The well in question â€“ T8-1 â€“ has not yet reached its target depth. Cairn Energy has plans for four wells in its current drilling programme. The company is also carrying out 10,000 kilometres-worth of seismic surveying.
"I am encouraged that we have early indications of a working hydrocarbon system with our first well in Greenland," said chief executive Sir Bill Gammell, "confirming our belief in the exploration potential. We look forward to assessing the results of the remainder of the 2010 drilling programme."
Cairn announced the discovery alongside news that revenues in the six months to end June rose 311% to $333m (Â£216m) and the company swung from a $15m loss last year to a profit of $94m.
Cairn last week announced plans to sell its 51% stake in Cairn India to Vedanta Resources for Â£5bn in order to help fund its exploration in Greenland. Three Indian government-owned firms, however, are reported to be interested in making rival offers for the stake.