Cairn Energy plans to drill several wells off Greenland in a drilling campaign starting in 2011, its bosses said yesterday.
Deputy chief executive Mike Watts said the Edinburgh company was initially looking at a potential three to five-well programme which could cost more than £300million.
There are hopes that Greenland’s waters could hold billions of barrels of oil, but Mr Watts said that a single find of about 400million barrels could be a commercial proposition at a price of just $40 a barrel.
Availability options for a suitable rig for the short drilling programme are now under review.
Chief executive Sir Bill Gammell said Cairn would have great flexibility for funding work in Greenland.
He added: “We could bring in a partner to carry some of the risk, for example, but we don’t want to tie ourselves down to one particular option.”
He said Cairn was excited by the “frontier” exploration position it had established offshore Greenland, which provided it with potential for future material exploration success. He also said the recent rise in oil prices had seen the first industry interest in Greenland for many years.
Sir Bill added: “The government of Greenland offers exploration acreage both through competitive bid rounds and direct applications via its open-door policy. Cairn has taken a leading position in this process and is at the forefront of the opening up of this exciting frontier country.
“The prospective geological basins around the coast of Greenland are at a very early stage of evaluation with only six offshore and one onshore exploration well having been drilled to date, and five of those during the 1970s.
“The results of these wells, together with more recent onshore geological mapping over the past 15 years, have confirmed the presence of all the essential elements required for a working petroleum system.”
Cairn also said yesterday that its large Indian oil fields would begin producing oil this week, but added that meeting targets for the next stages of the development was becoming increasingly challenging.
Cairn said the target for completing the second processing train at Mangala, in Rajasthan, and an associated pipeline remained the end of 2009, despite the challenges.
Sir Bill said: “If there is any delay, it will be a matter of weeks rather than months.”