Cairn hit by Greenland well disappointment
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Thursday 04 August 2011
Investors in Cairn Energy were left disappointed yesterday after the oil prospector said a well drilled as part of its controversial Greenland exploration campaign had come up dry.
The company said that although the well, one of four due to be drilled as part of a $600m campaign this year, had failed to bear a commercial discovery, the exercise did indicate the presence of oil-prone rocks.
Nonetheless, the market sent Cairn's shares down by more than 5 per cent or 17.9p to 334.8p, underperforming the wider FTSE 100 index.
The disappointment comes after months of controversy over Cairn's plans to shift its focus from India, where an oil discovery in the western state of Rajasthan propelled it into the FTSE 100, to the largely unexplored region offshore Greenland.
The Edinburgh-based firm, whose plan to sell control of its India unit to Vedanta Resources was approved by local authorities at the end of June, has faced protests from Greenpeace, which has called for release of details of how Cairn it would respond to an oil spill in the fragile Arctic region.
Earlier this year, Cairn secured an injunction to protect its facilities after Greenpeace activists scaled one of its rigs. That incident was followed by a protest at its head office, which last month was occupied by a number of activists, many of whom were dressed up as polar bears. For its part, the company, which won a court order to prohibit the release of information accessed during the protest, has maintained that it is following official guidelines stipulating that the response documents remain confidential.
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