“THERE’S a whole ocean of oil under our feet! No one can get at it except for me!” So screams Daniel Day Lewis as Plainview in Hollywood blockbuster There Will be Blood. Sir Bill Gammell, then chief executive of Cairn, must have expressed similar sentiments when he struck lucky in India in 2004.
The former Scotland rugby cap, who has since moved on to the chairman’s office, hasn’t had as much luck in Greenland. Yesterday, the company effectively called time on its near $1bn (£630m) foray on the inhospitable island.
New chief executive Simon Thomson left the door open to further exploration there, but one wag analyst likened his comments to “George Osborne trying to put a brave face on the economic outlook”.
So the group’s entire valuation, for now at least, rests on the successful sale of its stake in Cairn India to Vedanta. We still think it is more likely than not that this deal goes through by the end of the year, after months of regulatory wrangling. But we’d steer clear of the shares until the summer of next year, when the group will update the market on any new drilling opportunities.