Scottish oil explorer Cairn Energy said yesterday it planned to start its 2011 Greenland drilling programme in June.
Chief executive Sir Bill Gammell added that he remained confident that a treasure hunt for commercial oil deposits in Arctic and sub-Arctic waters would yield positive results.
He also said he was still looking to conclude the sale of Cairn’s Indian assets to Vedanta Resources within weeks.
Edinburgh-based Cairn agreed six months ago to sell up to 51% of its Indian business to Vedanta, but the deal has been delayed as India’s government looks into issues of royalty payments.
Yesterday, he said there were positive signs from India that the transaction could complete by April 15: the target date being eyed by both Cairn and Vedanta.
The sale of the majority stake in Cairn India is expected to raise up to £5.9billion in cash, providing a £2.8-£4.2billion return to shareholders.
Cairn will invest the remainder of the proceeds in its Greenland activities, which will see up to four exploration wells drilled in the area this year.
The final selection of prospects and well targets for the 2011 campaign will be made in May, however, deputy chief executive Mike Watts revealed two of the four wells would be within the Arctic Circle.
Cairn hoped to start drilling in June and continue until October, he added.
The company and its Greenland partner, Nunaoil, are completing a public consultation in the region on this year’s exploration programme
In a results announcement yesterday, Cairn said the feedback would be used to tailor the programme to minimise and mitigate against any potential negative impacts.
Last year, Cairn became the first company to drill offshore Greenland in 10 years and the first in the Greenland Arctic for 35 years.
The firm’s three-well drilling programme signalled the potential for oil but failed to make a commercially significant discovery and its activities in the region were hindered by environmental campaigners.
Greenpeace protesters obstructed its operations, claiming that the company’s plans threatened the fragile Arctic environment.
Greenland has been attracting strong interest from oil firms lately, despite the area having no tradition in oil production and harsh conditions for exploration. Cairn’s 11 operated blocks in the area cover 39,400 square miles: equivalent to 450 blocks in the UK North Sea.
Yesterday’s results showed that the firm made pre-tax profits of £352.3million during 2010, compared with losses of £16.5million the year before.
Revenue for the latest period came in at £977.6million, up from £142.8million previously.
Average gross production during 2010 was 130,961 barrels of oil equivalent per day (boepd), an increase of 70% on a year earlier, with Cairn’s interest up 222% at 65,299 boepd.
The figures – both financial and for output – were helped by the start-up of piped oil production from the large Mangala field in India.