Cairn Energy's first Greenland oil drilling season was a "royal flush" and the company will invest $1.2bn (£755m) on up to 12 wells over the next three years.
The Edinburgh-based exploration company is already spending $400m on four wells in the unexplored Arctic region this year, of which the first found traces of gas and the second traces of both oil and gas. A third is under way and will report at the end of the month.
Cairn's deputy chief executive Mike Watts said the company's success rate was "about as good an outcome as we could have expected", sufficient to secure Greenland's place as "a new oil and gas province in the making".
"We found two types of oil and two types of gas," Mr Watts told a conference in London yesterday. "It's a royal flush." Although neither of the finds so far is commercially viable, the discoveries have caused a flurry of renewed interest in the inhospitable Baffin Bay Basin, an area the size of the North Sea off Greenland's frozen west coast.
"One commercial discovery will transform the region," Mr Watts said yesterday.
Greenland is three times the size of Texas but home to a mere 57,000 people, and its icy coastal waters are estimated by the US Geological Survey to hold as much as 50 billion barrels of oil and gas, but Cairn is the first company to explore the area.
ExxonMobil and Chevron also have licences to drill in the region but have not yet used them. And while oil majors are queuing up for further licences currently being auctioned by the Greenland government – with Royal Dutch Shell, Statoil and Tullow Oil all reported to be in the running – drilling is not expected to start for another three years.
Cairn is also applying for further licences, with three expected to be awarded imminently, according to Mr Watts.
Mr Watts also denied rumours in the Indian press that the sale of Cairn's Indian unit to Vedanta Resources is suffering delays. The putative deal was announced in August, with a price tag of up to $9.6bn. It will go ahead early next year as planned, Mr Watts said.Reuse content