Cairn joined by Statoil in Arctic hunt

CAIRN Energy yesterday announced a deal that will see Norwegian giant Statoil share the costs of its Arctic exploration.

The area is a notoriously difficult and expensive place to drill, with the inhospitable climate hiking costs.

Statoil has acquired a 30.6 per cent stake in one of Cairn’s exploration licences off the coast of Greenland. The announcement was well received by investors in Edinburgh-based Cairn, with trading yesterday starting as one of the FTSE 100’s highest climbers before closing up 0.55 per cent.

Cairn, founded by Scottish rugby international Sir Bill Gammell, has spent a $1.2bn (£770m) in the Arctic over the past two years but has so far failed to find commercial quantities of oil. The oil industry hopes to open up a new multi-billion oil province off the coast of Greenland, with Exxon Mobil and Shell watching Cairn’s drilling campaign closely. Statoil has also set its sights on expanding its operations in Alaska, Greenland and Russia.

Neither company would reveal the financial details of the tie-up. Oil consultancy Wood Mackenzie has said Greenland could have reserves of 20bn barrels of oil.