Wed, Jan 05, 2011 - Page 10 News List

PETROLEUM: Cairn Energy hires two rigs for Greenland probe

Bloomberg

Cairn Energy PLC rose in London trading after hiring two rigs for oil exploration off Greenland and winning a US$900 million credit line, ensuring that drilling plans for this year are on track.

The Edinburgh-based company rented the Leiv Eiriksson and Ocean Rig Corcovado, both operated by Ocean Rig ASA, to drill four wells, Cairn said in a statement in London yesterday. The debt facility was provided by Standard Chartered Bank PLC, Bank of Scotland PLC, Credit Agricole SA, HSBC Holdings PLC and Societe Generale SA.

“We would view this update as positive given concerns that Cairn would struggle to secure rigs for this year’s campaign,” Richard Rose, an analyst at Oriel Securities Ltd in London, wrote in an e-mail to investors.

Cairn said last year it’s prepared to invest US$1.2 billion in Greenland exploration after it sold its Indian operations to Vedanta Resources PLC.

The Danish island territory may hold 50 billion barrels of crude and gas, the US Geological Survey estimates.

“By contracting two vessels for the Greenland exploration program, Cairn has increased operational capability and flexibility and continues to demonstrate its focus on safety,” Cairn chief executive officer Bill Gammell said in the statement.

“We look forward to drilling up to four exploration wells offshore Greenland during 2011,” Gammell added.

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