A new oil rush as Cairn Energy reports first find off Greenland
Wednesday 22 September 2010
Cairn Energy has struck oil off the coast of Greenland, just weeks after an earlier exploration well found traces of gas in the region.
The latest strike found traces of oil and gas "intermittently" in a 400-metre section of rock in the Sigguk block near Disko island. The earlier well, which discovered non-commercial gas volumes, has now been sealed and exploration costs of $84m (£54m) written off. But the two finds are the first positive evidence of hydrocarbons in the region, and Cairn's shares shot up by 2.27 per cent to 436.5p yesterday.
Sir Bill Gammell, the chief executive of Cairn, said: "The presence of both oil and gas confirms an active, working petroleum system and is extremely encouraging at this very early stage of our exploration campaign."
Cairn is making a major bet on Greenland. The Arctic island – three times the size of Texas but home to just 57,000 people – is tipped as one of the world's largest undiscovered hydrocarbon reserves, with some analysts estimating it could hold as much as 20 billion barrels of oil and gas under its freezing coastal waters.
And Cairn is selling a 51 per cent stake in its Cairn India business to the miner Vedanta for $9.6bn (£6.2bn), with a view to ploughing money into its Arctic venture. "For the foreseeable future, it's Greenland, Greenland," Sir Bill said at last month's interim results.
Cairn's two discoveries are far from conclusive. But the company's progress is being closely watched. Cairn is the first to drill in the Baffin Bay Basin, an area the size of the North Sea off Greenland's west coast, but ExxonMobil and Chevron also have licences to explore the area. And the Greenland government is in the process of auctioning further licences.
BP has ruled itself out but 13 companies are said to have shown an interest in acquiring drilling rights, among them Shell, Statoil and Tullow Oil.
It is not only the oil industry with its sights on Greenland. The region is also set to be the next major battleground in big oil's on-going fight with environmental campaigners over deep-water drilling. Green groups claim that the risk of an accident in such hostile, iceberg-infested waters is high, and that the resulting pollution in such a cold, remote and pristine wilderness would be worse even than that from BP's Gulf of Mexico spill.
Greenpeace activists boarded Cairn's Greenland drilling rig at the end of last month to protest against its activities. Four people were arrested when they were forced off by bad weather.
- 1 Scottish independence: Ireland since 1919 is a lesson for Scotland in what a Yes vote means
- 2 Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
- 3 Lego breaks out of the toy box and heads for the gallery
- 4 Julian Assange and Edward Snowden join piracy mogul Kim Dotcom’s political campaign in New Zealand
- 5 Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
Jihadi John': MI5 may have identified Isis militant who killed David Haines but options limited
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: Police will be on high alert on Friday whatever the result
David Haines beheading: David Cameron says Britain will hunt down Isis 'monsters' shown in video murdering aid worker
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
Salmond accused of laughing off national debt with ‘what are they going to do: invade?’ joke
iJobs Money & Business
£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...
£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...