Cairn Strikes Spanish Point Farm-In Deal

UK independent Cairn Energy announced Tuesday that it is farming into the Spanish Point Area licenses offshore Ireland. The firm has struck a deal with Chrysaor and Sosina to farm into Frontier Exploration Licence 2/04, FEL 4/08 and Licensing Option 11/2, which are all located in Quad 35 in the Porcupine Basin off the west coast of Ireland.

Under the terms of the deal agreed, Cairn will earn a 38-percent stake in the licenses, and assume the operator role, by paying 63.33 percent of future exploration and appraisal costs for up to two wells.

Another partner in the licenses, Providence Resources, issued a statement of its own Tuesday stating that its stakes in the licenses would remain at 32 percent. Chrysaor and Sosina retain 26-percent and four-percent interests in Spanish Point. 

Providence said that the latest rig scheduling information from Cairn and Chrysaor indicates that the partners now plan to drill the appraisal well at Spanish Point in the second quarter of 2014, with a follow-on well to be drilled at another target at a later date. The partners also expect to carry out extensive 3D seismic work on Licensing Option 11/2.

Commenting on the farm-in, Providence Chief Executive Tony O'Reilly said in a statement:

"We are delighted to welcome Cairn into our partnership in the Porcupine Basin. The arrival of a major independent operator like Cairn, with their deep water experience and their technical and financial strengths, provides further validation of the real potential of the Irish offshore and we look forward to working with them in the upcoming appraisal drilling at Spanish Point in 2014 and subsequent drilling and exploration activities within Quad 35."

Oil sector analysts at London-based Liberum Capital noted that the transaction adds Ireland to Cairn's existing Atlantic Margin interests offshore Greenland and Morocco.

"[Cairn's] deep water experience and technical and financial strengths provider further validation of the potential of Providence's acreage and the Irish offshore," a brief research note from Liberum stated.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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Cairn to Use Cajun Express for Frontier Drilling

Cairn Energy announced Monday that it has secured a long-term contract with Transocean for the Cajun Express (DW semisub) rig.

The rig, which is on an initial one-year contract, will be used by Cairn on its planned multi-well frontier exploration program in Senegal, Morocco and other areas.

Cairn said that it expects to mobilize the rig to begin operations offshore Morocco on the Foum Draa license during the second half of 2013, subject to the necessary approvals.

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Cairn Seeks Key Changes in Barmer Field Regime

Vedanta Group explorer Cairn India has sought six changes in the approvals regime for its oil fields at Barmer in Rajasthan, which, if approved by the government, could prove to be a game-changer for the domestic exploration industry by drastically reducing the discovery-to-delivery time.

The changes suggested by the company essentially suggest an omnibus development for an entire acreage instead of for each discovery made in a block.

This would do away with the multiple approvals that have to be sought before starting production each time a discovery is made. This process could stretch to three-four years from the time that a company declares a commercially viable oil or gas strike; sources quoted Cairn as arguing with the oil ministry.

Cairn sought these changes days before it announced the 26th discovery in the block on Tuesday. This is the first strike the company has made after the government in February allowed oil hunters to conduct additional exploration in a producing field at their own financial risk, with the rider that costs would be allowed to be recovered only in case of commercial discoveries.

One of the key changes sought by Cairn suggests scrapping the system of seeking individual approval for declaring a discovery as commercially viable, called 'DoC or declaration of commerciality' in industry parlance. The company has argued that this would be "superfluous" under an omnibus development plan for acreage.

Under the omnibus plan, the company has suggested replacing multiple, individual field development plans by a single integrated plan for the entire block.

To address concerns over any possible slackness in oversight of expenditure, which could adversely impact government revenue, Cairn has suggested that once the omnibus block development plan is approved, expenditure on bringing a discovery into production could be done through a 'work program and budgeting' process annually.

Another major change sought is in the joint operating agreement for the field in line with the "best global oil industry practices". State-run ONGC is 30% partner in the field and Cairn, as in-charge of operations, cannot on its own decide on contracts worth more than $500,000. This involves "cumbersome multiple touch points between partners" that delay the process of procuring equipment or services, the company has argued.

Cairn's situation is similar to many of the 260 blocks in the country under exploration or development. In block after block, companies are hamstrung by red tape, delay in approvals and differences between partners. In case the government agrees to the key changes sought by Cairn, it would have to be done as a policy measure and would take time.

Copyright 2013 Bennett Coleman & Co. Ltd. All Rights Reserved.

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Cairn Continues to Target North Sea Plays

Cairn Energy will continue to target new plays within the UK North Sea and Norwegian continental shelf, the firm said Tuesday as it outlined plans to explore frontier basins in the Atlantic Margin and Mediterranean in its annual results statement.

Cairn will use cash generated from its share in various producing North Sea assets to fund several operated exploration wells offshore Morocco and Senegal, West Africa, during 2013 and 2014. It is also planning a 3D seismic campaign in the Gulf of Lion, offshore Spain, as well as conducting geological studies into opportunities offshore Malta.

The company also announced Tuesday farm-in into three blocks offshore Senegal. Cairn is taking a 65-percent working interest and operatorship of three blocks – Rufisque, Sangomar and Sangomar Deep – that are currently operated by Far Limited with Petrosen (the Senegalese national oil company) as a joint venture partner. In return it has agreed to fully fund the costs of one exploration well and to fund 72.2 percent of subsequent exploration costs.

In the UK and Norway, Cairn is involved in four non-operated exploration and appraisal wells during 2013, two of which are underway. It also has new interests in 10 licenses that have been acquired in recent licensing rounds.

Meanwhile, work continues on the North Sea's Greater Catcher area (where Cairn has a 30-percent, non-operated interest) and the Kraken oil field (25 percent). These fields are now a late pre-development stage and are expected to lead to first oil and cash flows in sometime around 2016/2017.

"With a strong cash position and a disciplined approach to capital expenditure, we look forward to the start of our multi-well, multi-year operated exploration programme commencing in Q4 2013 targeting more than 3.5 billion barrels of oil equivalent," Cairn Chief Executive Simon Thomson commented in a company statement.

Oil analysts at London-based investment bank FirstEnergy was positive about Cairn's announcements Tuesday, noting that the farm-in offshore Senegal adds "further high-impact exploration potential to the portfolio".

Cairn reported a pre-tax loss for 2012 of $194.2 million (2011: $1.2 billion loss) and stated that it had cash at the end of December amounting to $1.6 billion. The firm also retains an approximately 10 percent residual shareholding in Cairn India.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

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Cairn Continues to Target North Sea Plays

Cairn Energy will continue to target new plays within the UK North Sea and Norwegian continental shelf, the firm said Tuesday as it outlined plans to explore frontier basins in the Atlantic Margin and Mediterranean in its annual results statement.

Cairn will use cash generated from its share in various producing North Sea assets to fund several operated exploration wells offshore Morocco and Senegal, West Africa, during 2013 and 2014. It is also planning a 3D seismic campaign in the Gulf of Lion, offshore Spain, as well as conducting geological studies into opportunities offshore Malta.

The company also announced Tuesday farm-in into three blocks offshore Senegal. Cairn is taking a 65-percent working interest and operatorship of three blocks – Rufisque, Sangomar and Sangomar Deep – that are currently operated by Far Limited with Petrosen (the Senegalese national oil company) as a joint venture partner. In return it has agreed to fully fund the costs of one exploration well and to fund 72.2 percent of subsequent exploration costs.

In the UK and Norway, Cairn is involved in four non-operated exploration and appraisal wells during 2013, two of which are underway. It also has new interests in 10 licenses that have been acquired in recent licensing rounds.

Meanwhile, work continues on the North Sea's Greater Catcher area (where Cairn has a 30-percent, non-operated interest) and the Kraken oil field (25 percent). These fields are now a late pre-development stage and are expected to lead to first oil and cash flows in sometime around 2016/2017.

"With a strong cash position and a disciplined approach to capital expenditure, we look forward to the start of our multi-well, multi-year operated exploration programme commencing in Q4 2013 targeting more than 3.5 billion barrels of oil equivalent," Cairn Chief Executive Simon Thomson commented in a company statement.

Oil analysts at London-based investment bank FirstEnergy was positive about Cairn's announcements Tuesday, noting that the farm-in offshore Senegal adds "further high-impact exploration potential to the portfolio".

Cairn reported a pre-tax loss for 2012 of $194.2 million (2011: $1.2 billion loss) and stated that it had cash at the end of December amounting to $1.6 billion. The firm also retains an approximately 10 percent residual shareholding in Cairn India.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

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Cairn Declares Oil Field No-Fly Zone

The safety of India's largest onland oil producing fields at Barmer in Rajasthan could be at stake following the recent air crash at Uttarlai near the oil producing fields.

Flagging the issue before the government, NRI billionaire Anil Agarwal and promoter of Cairn India - which, along with state-owned ONGC, is developing the Rajasthan oil fields - has asked the government to declare the oil fields area that is situated close to the Indian airforce base as a no fly zone.

In a letter to the oil ministry, Cairn wrote, "the air-crash near Uttarlai on 12 February, 2013 was at a distance of less than 4-5 kms from the Mangla oil processing terminal and is a matter of safety concern to Cairn and ONGC as the impact of any such accident has the potential for a serious health, safety and environmental hazard."

The Mangla oil processing terminal (MPT) and Mangala oil well heads are spread over 4,549 acres and are at an aerial distance of only 13 kms from the Uttarlai Air Force Station.

Cairn India and ONGC have so far invested over $4 billion in the project. Today, Mangala Processing Terminal (MPT) at Barmer, Rajasthan, processes oil from Mangala, Bhagyam and other satellite fields.

With the Aishwarya field likely to commence production soon, crude production is expected to increase further. Further expansion activities are also in progress at MPT and with recent exploration approvals accorded by the Centre, Cairn is due to substantially increase its oil processing capacity and cater to various refineries across India.

While stating that the Indian Air Force, Uttarlai, was ensuring that its jets do not fly over the MPT area, Cairn India however said that in view of potential repercussions of IAF and even other civilian aircrafts entering the air space above the MPT and the Mangala well heads, it would recommend that MPT and Mangala well pads enveloping an area of 4,549 acres be declared a "No Fly Zone" to the ministry of defence and the ministry of civil aviation.

Copyright 2013 HT Media Ltd. All Rights Reserved

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Cairn Declares Oil Field No-Fly Zone

The safety of India's largest onland oil producing fields at Barmer in Rajasthan could be at stake following the recent air crash at Uttarlai near the oil producing fields.

Flagging the issue before the government, NRI billionaire Anil Agarwal and promoter of Cairn India - which, along with state-owned ONGC, is developing the Rajasthan oil fields - has asked the government to declare the oil fields area that is situated close to the Indian airforce base as a no fly zone.

In a letter to the oil ministry, Cairn wrote, "the air-crash near Uttarlai on 12 February, 2013 was at a distance of less than 4-5 kms from the Mangla oil processing terminal and is a matter of safety concern to Cairn and ONGC as the impact of any such accident has the potential for a serious health, safety and environmental hazard."

The Mangla oil processing terminal (MPT) and Mangala oil well heads are spread over 4,549 acres and are at an aerial distance of only 13 kms from the Uttarlai Air Force Station.

Cairn India and ONGC have so far invested over $4 billion in the project. Today, Mangala Processing Terminal (MPT) at Barmer, Rajasthan, processes oil from Mangala, Bhagyam and other satellite fields.

With the Aishwarya field likely to commence production soon, crude production is expected to increase further. Further expansion activities are also in progress at MPT and with recent exploration approvals accorded by the Centre, Cairn is due to substantially increase its oil processing capacity and cater to various refineries across India.

While stating that the Indian Air Force, Uttarlai, was ensuring that its jets do not fly over the MPT area, Cairn India however said that in view of potential repercussions of IAF and even other civilian aircrafts entering the air space above the MPT and the Mangala well heads, it would recommend that MPT and Mangala well pads enveloping an area of 4,549 acres be declared a "No Fly Zone" to the ministry of defence and the ministry of civil aviation.

Copyright 2013 HT Media Ltd. All Rights Reserved

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

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