Greenland oil continues to elude Cairn Energy

The challenges that Cairn Energy has faced this summer during its exploration drilling off Greenland include protests by Greenpeace activists, show here approaching the Leiv Eiriksson oil rig off the west coast of Greenland May 24. (PHOTO BY STEVE MORGAN/ GREENPEACE)

People in Nunavut and environmental groups like Greenpeace may be relieved by the bad news that Cairn Energy delivered today about its oil exploration program off Greenland’s west coast.

The Scottish company reported that it plans to plug and abandon the Lady Franklin 7-1 exploration well, about 300 kilometres off Nuuk, after it failed to find oil.

Operations at the AT7-1 exploration well on the Atammik Block about 200 km off Nuuk, have been “temporarily suspended,” and the Leiv Eriksson drill rig has moved 750 km north to start operations on another more promising prospect in the Napariaq Block, the company said.

Trying to sound upbeat, Simon Thomson, Cairn’s chief executive, said in a statement that he remained “encouraged.”

“We continue to be optimistic about the remainder of our 2011 four-well, multi-basin exploration programme offshore Greenland.”

But so far the $600 million Cairn is sinking this summer into exploration off West Greenland hasn’t found sign of the 17 billion barrels of oil which a recent study suggested lies there.

Early on Aug. 3, the price of Cairn shares had tumbled by seven per cent — a sign of worry on the part of investors who fear that, even if there is a lot of oil in the waters off West Greenland, Cairn may not be able to find any.

This summer Cairn’s offshore drilling has been dogged by protest. In May, Greenpeace protestors attached themselves to the Leiv Erikkson rig and scaled it, remaining there for several days.

Cairn asked for and obtained a court order to prevent protestors from coming within 500 m of its Arctic rigs.

But last month, 60 Greenpeace activists, some dressed as polar bears, locked themselves in Cairn’s Edinburgh offices, asking the company to release its oil spill response plans.