Cairn to partner Statoil on Greenland exploration

LONDON: British oil explorer Cairn Energy said Norway's Statoil will partner with it to look for oil and gas in Greenland, showing industry interest in the Arctic region remains strong despite several high-profile drilling failures.

Cairn said it signed a deal which will see Statoil acquire a 30.6 per cent stake in one of its exploration licences off the coast of Greenland, part of its long-stated plan to bring in a partner to share the costs of exploring in the region.

The British explorer has led a $1.2 billion closely-watched exploration campaign in the Arctic region over the last two years which has so failed to open up a new multi-billion barrel oil province.

"The exact financial terms of the agreement are confidential however Statoil will pay a signature bonus, back costs on the block and promoted terms of future exploration expenditure," Cairn said in a statement on Monday.

Industry sources said Cairn had hoped to be carried on future drilling costs but a lack of success to date appears to have hit their bargaining position.

Cairn's activities offshore Greenland have been closely watched by which other oil firms such as Exxon Mobil, and Husky Energy, which also plan to drill there.

Cairn said earlier this month that it was in talks about a possible stake sale in one of its Greenland exploration licences.