Cairn Back in Black, Cites Senegal Gas
UK independent Cairn Energy announced March 13 it made a profit of $263mn in full year 2017, reversing its $95mn loss in 2016. It also noted that later phases of its Senegal SNE oil project into the 2020s may produce gas.
CEO Simon Thomson attributed the improvement to first oil production from North Sea developments, including Kraken and Catcher – the latter started up December 2017 with some associated gas production with Cairn’s interest at 20% and, according to Premier Oil, is going better than expected. Full production from the Catcher area of 60,000 b/d (gross) is expected in 2Q 2018, it said. Its overall net equity production guidance for 2018 is 17,000 to 20,000 b/d, with an operating cost of around $18/barrel.
Cairn said the SNE oil and gas field offshore Senegal is now fully-appraised with its joint venture targeting government approval by end-2018 of a development plan (to be submitted 1H 2018) aiming for first oil in 2021-23 with initial 100,000 b/d gross output. Cairn is operator with 40%. Front end engineering and design (Feed) is to start 2H 2018, when transfer of operatorship to Australia’s Woodside is also expected, subject to Senegalese approval, said Cairn.
It estimates up to 25 wells in the initial development phase, targeting some 240mn b, but adds that “subsequent phases of the development, anticipated to follow phase one after two to four years, will target more than 250mn b in the upper reservoir and include potential gas export.”
Cairn also expects first oil at 50,000 b/d gross in 2H 2021 from the Nova (formerly Skarfjell) oil venture offshore Norway, in which it has a 20% interest, in which operator Wintershall is operator.
Cairn also said a long-running dispute with India is scheduled to come to a final hearing of Cairn’s claim in August 2018 in The Hague, Netherlands, with Cairn seeking not less than $1.3bn damages. The UK firm also said its interest in the Boujdour Maritime licence offshore Western Sahara was relinquished in 4Q 2017. It decided not to extend its study agreement for Malta Area 3, Blocks 1, 2 and 3 in 1H 2017. It participated in an unsuccessful well on FEL 2/14 in the Porcupine basin off Ireland in 2H 2017.