Cairn sells 30.6% of Greenland block to Statoil
BY ALEXIS FLYNN
LONDON -- Exploration firm Cairn Energy said Monday it has agreed to sell a 30.6% working interest in the Pitu oil and gas exploration block off the west coast of Greenland to Norway's oil and gas major Statoil ASA.
"Statoil's extensive Arctic operating and development experience makes them the partner of choice for the Pitu block where we see significant potential," said Cairn Chief Executive Simon Thomson.
The company, which transformed its fortunes with a major discovery in Rajasthan, India in 2004, has since turned its attention to exploring for oil offshore Greenland. Two drilling campaigns--in 2010 and 2011--have so far failed to yield commercial quantities of oil and gas, although the company says it has been encouraged by some hydrocarbon finds and would look to bring in partner firms to conduct further searches.
Under the terms of the agreement Statoil will acquire a working interest of 30.625% in the Pitu licence. Cairn will retain exploration operatorship, with a 56.875% interest in the block, while Statoil will operate any future development. Nunaoil has an ongoing 12.5% interest in the block.
Cairn didn't say how much it would be paid for the share of Pitu. However, according to a Cairn statement, Statoil will pay a signature bonus, back costs on the block and promoted terms of future exploration expenditure.
The deal is subject to the approval of the Greenland Government, said Cairn.
Dow Jones Newswires
01/23/2012