Cairn Energy remains focused on the billion barrel oil prize that is within reach from its discovery in West Africa.
Cairn has reached an agreement with the Government of Senegal to carry out an extensive evaluation plan beginning this year that includes a multi-well exploration and appraisal programme in 1,100 metres of water in the Atlantic.
Announcing the Scottish company’s half-year results to analysts, chief executive Richard Thomson also said Cairn was expecting to deliver peak North Sea net production of 22,000 barrels of oil per day by 2018, once its Kraken and Catcher fields are in full production. The cash flow delivered from the North Sea would support operations in Senegal.
He added: “We will continue to focus on a balanced portfolio and will continue to actively assess new ventures – with a pipeline of exploration activities. We retain a clear focus on Senegal and we have implemented low oil price break-even economics across the portfolio and that includes the North Sea assets delivering healthy returns for Cairn.”
The discovery off the coast of Senegal was one of the largest oil discoveries made in the world last year.
Cairn has identified at least five prospects, 15 leads and the objective is to develop additional prospects to a drill-ready status during 2016.
Thomson said: “We estimate the two discoveries made in the fourth quarter of 2014 and the currently identified prospects and leads have a potential of more than one billion barrels.
“We are very excited about Senegal. It is a very good place to be.”
Cairn confirmed both its Catcher and Kraken projects remain within budget and are on track for first oil in 2017.
“The North Sea remains an active market and remains pretty attractive in terms of returns, even in a low oil price environment.”
Cairn was awarded five licences in the Norwegian sector of the North Sea earlier this year and its Skarfjell prospect is in early stage development planning.
It is also pursuing recent entry into the Barents Sea with possible applications in the 23rd licence round in the fourth quarter of this year.
The company also confirmed interests in an appraisal well west of Kraken in the UK North Sea. The firm, which has a 25% interest in the prospect, confirmed a presence of oil with “potential for upside”.
Cairn said international arbitration proceedings with the Indian Government were ongoing relating to the sale of its $526million stake in its Indian subsidiary. It is prevented from selling this stake until a tax dispute is resolved.
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