Cairn Energy is to press on with its intentions to begin drilling off the west coast during the second quarter of next year, now that it has received formal Government approval for its plans.
The Scottish exploration company announced yesterday that it has received formal approval from the Department of Communications, Energy, and Natural Resources to invest in two exploration licences in the highly rated Porcupine Basin off the west coast.
Two months ago, Cairn — which also operates in the North Sea, Scandinavia, Africa, Greenland, and the Mediterranean — announced it had added Ireland to its regional portfolio of assets by buying into two licences and one licensing option, currently operated by London-based explorer Chrysaor. They include the undeveloped Spanish Point gas condensate and the Burren oil discoveries.
Covering a combined 1,242sq km, the new ownership structure of the licences — of which Cairn will take over the running — will be Cairn with 38%, Providence Resources with 32%, Chrysaor with 26%, and London-based Sosina Exploration with 4%.
It has previously been reported that Cairn’s investment will cover just over €3m in backdated costs and over 63% of future exploration and appraisal costs for the drilling of up to two wells, as well as 500sq km of 3D seismic surveying. Any costs in excess of this will be shared by all of the partners, based on their equity stakes. Cairn’s investment will also see it gain six licensing block options, covering an area of 1,511sq km, which can be converted to frontier exploration licences from October.
The Edinburgh-based company also said yesterday that it has entered into a contract to secure an upgraded drilling rig for the planned Spanish Point appraisal well.
Tony O’Reilly Jr, Providence’s chief executive, welcomed Cairn’s announ-cements, noting that the drilling campaign will represent the third act in Providence’s ongoing offshore Ireland campaign.
Mr O’Reilly previously heralded Cairn’s introduction to Ireland as “further validation of the real potential of the Irish offshore”.
In May, Cairn’s head, Simon Thomson, said that his company’s expansion here would bring further exploration and appraisal potential to its frontier Atlantic Margin portfolio.
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