Cairn Energy PLC is a Scottish oil and exploration company based in Edinburgh. The company have found traces of oil for the first time off the coast of Greenland.
They started drilling 175 km from Disko Island, off the west coast of Greenland on 1 July 2010. The firm won permission to drill two more oil test wells in the Danish territory of Greenland.
These are the first wells ever drilled in the Basin of Baffin Bay, which is about the same size as the North Sea. Cairn Energy PLC wrote off $84.2 million recently after previous unsuccessful drilling.
The test well T8-1 struck gas, but failed to make a commercial discovery. Now, however, the firm has found two oil types “intermitently” with gas. This is at a 400 metre section of Alpha-IS1 of the Sigguk block where the depth is 4358 metres.
Cairn Energy is targeting oil prospects at water depths of between 300 metres and 500 metres. The share price of the company rose 2.27% on 21 September 2010 to 436.50 p on the London Stock Exchange.
This was after a fall to 445.50 p when test well T8-1 failed to make a commercial discovery. Drilling efforts for oil and gas in deep sea ocean failed three decades ago off Greenland’s west coast.
Exploration resumed in 2001. The firm is spending $400 million this year for drilling four wells off the coast of Greenland.
The Sigguk Block is operated by Cairn Energy (77.5%), with Nunaoil (12.5%) and Petronas (10%) as Joint Venture partners.
The Territory waters may hold 50 billion barrels of crude oil and gas, according to the U.S. Geological Survey. Exxon Mobil Corp. and Chevron Corp. also own rights in Greenland.