Scottish oil explorer Cairn Energy was in pioneering mode again as set its sights fully on Greenland, chief executive Sir Bill Gammell said yesterday.
Sir Bill, Cairn’s founder, said the Edinburgh company was ready for its next challenge after recently agreeing to sell up to 51% of the Rajasthan-focused Indian business it controls to mining giant Vedanta Resources.
Proceeds from the deal, which could be worth up to £5.5billion, will be used to fund exploration around Greenland and a cash return to Cairn shareholders.
Speaking after Cairn posted first-half figures, Sir Bill – a former Scottish rugby international – said the company was encouraged by early results from its drilling programme offshore Greenland, despite it not having made a commercial oil discovery.
Cairn sad its T8-1 well in the Baffin Sea between Greenland and Canada, one of only seven drilled near Greenland, had found small quantities of gas, signalling the potential for oil.
The news is expected to fuel a rush of interest in the Arctic waters from the industry, but campaigners were quick to raise concerns in the wake of BP’s Gulf of Mexico oilspill crisis.
Greenpeace, whose vessel Esperanza is within sight of Cairn’s rigs off Greenland, feared that the Scottish explorer’s plans threatened the fragile Arctic environment.
Campaigner Leila Deen said: “If a spill happened here, this pristine area would face an environmental catastrophe.
“The BP disaster in the Gulf of Mexico showed what can happen when they (oil companies) drill in deep and remote places.”
Environmental lobby group Platform said: “Cairn doesn’t have the financial resources of a larger company like BP.
“We need to ask who would be able to cover the costs of a spill or accident should something go wrong.”
Cairn said it was too early to gauge the potential of its find, with the well not yet drilled to its target depth.
It has been drilling in the area – about 110 miles off Disko Island in west Greenland – since July.
The oil industry has only recently revisited the Arctic waters off Greenland for the first time since the 1970s, when explorations were unsuccessful.
Cairn, whose past exploits have resulted in more than 40 oil and gas discoveries and the development of major fields in India and Bangladesh, posted half-year results showing pre-tax profits of £37.75million for the six months to June 30. This compares with losses of more than £76million a year earlier.
Revenue totalled £215million in the latest period, up from £11million previously, on the back of returns from Cairn India. Analysts at Numis Securities said Cairn Energy’s risk profile had changed dramatically: “from cash cow to speculative explorer”.
Shares in the group ended the day down 4% at 445.5p.