Oil and gas explorer Cairn Energy has said it is looking to up to £1.25billion on new developments in the North Sea over the next five years and restart exploration offshore Greenland next year.
The cash is to be spent on its share of the costs of the central North Sea Catcher and northern North Sea Kraken developments, operated by Premier Oil and EnQuest respectively.
This would be on top of some £157million-£188million to be spend a year on exploration on an ongoing basis.
The exploration spend would include restarting its work offshore Greenland in 2014 and a new exploration campaign offshore Morocco, to start at the end of this year.
Cairn is also due to take part in five exploration and appraisal wells in the North Sea – UK and off Norway – in the first half of this year.
Simon Thomson, Cairn’s chief executive, said the firm’s investment in the North Sea projects would give it a “solid base” from which to fund future exploration while its frontier exploration, offshore Greenland and Morocco, would offer “transformational potential” for the business.
“During 2012 the company has established a balanced portfolio of development and exploration assets,” he said.
“Our balance sheet strength means we are funded for all planned exploration and development – whilst retaining the flexibility to consider further opportunities.
“Our North Sea properties, now at late pre-development stage (Catcher and Kraken) will, when on stream, provide cash flows to sustain future exploration programmes.”
Cairn holds 30% interest in the Greater Catcher area and 25% in the Kraken development. Cairn also holds 6% in the Mariner development, operated by Statoil and sanctioned by authorities at the end of last year.
Cairn said its North Sea drilling in the first half would include appraisal wells on the Skarfjell and Kraken discoveries.
Cairn has led exploration offshore Greenland, with its latest drilling campaign there ending last year without having found any commercial discoveries.
Last year it changed the focus of its business by selling all but 10% of its stake in the Cairn India operation and buying Agora Oil & Gas and Nautical Petroleum, giving it a significant foothold in the North Sea in addition to its frontier acreage offshore Greenland the and Atlantic margins.
The firm still has £1billion cash.
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