Cairn hit by Greenland oil plan failures

CAIRN Energy said yesterday it had been hit by a $1.1bn (£693m) operating loss in 2011, triggered by failures in its Greenland exploration plans.

But the company said it was well placed for further drilling campaigns, having posted a full year after-tax profit of $4.5bn following the sale of its Indian assets to Vedanta.

A $1.2bn drilling campaign in Greenland has dominated Cairn’s activities over the past two years but the company has failed to find commercial quantities of oil.

Last month the Edinburgh-based company announced a $3.5bn return of funds to shareholders, made possible by its $5.7bn asset sale. The company said yesterday its still has $1.2bn of cash for deals in oil development and production.

Chief executive Simon Thomson said: “We do have that exposure to transformational exploration currently in the portfolio.

“So naturally, what we’re also looking at for the new growth opportunities are potential appraisal, development and potentially even also producing properties.”

Thomson said that the company regarded the Mediterranean region as key to its future but that it was also examining other opportunities.

Cairn, which said last year it was lining up exploration opportunities in Lebanon and Cyprus, also said that it would seek further exploration opportunities in Spain, where it already has licences.