CAIRN Energy chief executive Simon Thomson has said the company has been eyeing potential acquisitions in the North Sea but good deals are hard to find amid the crude price plunge.

Underlining Edinburgh-based Cairn’s frustration about the tax dispute it is embroiled in in India Mr Thomson said the North Sea was an obvious place for Cairn to expand given the progess it has made there.

Mr Thomson told Cairn’s general meeting the company expects to generate plenty of cash from its holdings in the giant Kraken and Catcher fields off Scotland, even at current depressed oil prices. After the meeting he noted that Cairn needed to replenish its hopper of such development projects, which could be used to fund exploration work in future.

“We’re in the North Sea, in the UK, Norway, that’s the logical place for us to look,” said Mr Thomson of potential acquisitions. ”We haven’t found anything. There’s various opportunities.”

Asked if the company could buy into an undeveloped field on the scale of a Kraken or Catcher he said:”I wouldn’t say there’s a lot of assets like that out there, new field, no abandonment, no structural issues, attractive in the current environment. It’s quite tough to find them. They are there though.”

Catcher and Kraken are expected to come onstream next year using modern production facilities. Cairn’s share of the output is expected to peak at around 25,000 barrels daily.

Mr Thomson added: “There are some things [in the North Sea] that are very unattractive because they have huge abandonment liabilities or whatever else.”

Sector watchers have said some North Sea deals have fallen apart because of concerns about future decommissioning costs.

Mr Thomson said West Africa would be another place to look for acquisitions.

He highlighted Cairn’s excitement about the potential of the acreage it acquired off Senegal, and on which the firm has made two finds.

The company reckons one could contain 385 million barrels oil but may increase that number when it announces annual results in August, to take account of recent drilling activity.

Mr Thomson said Cairn expects to start production in Senegal in 2021. Operations in the country are ahead of schedule and substantially under budget.

After the meeting Cairn’s founder, Sir Bill Gammell said he was pleased with progress, adding: ”I think Senegal’s great.”

Mr Thomson said Cairn was well placed to cope with tough market conditions. The company has a portfolio which balances potentially transformational exploration in places like Senegal with lower risk activity in the North Sea. It had around $500m cash in the bank on 30 April.

However, he continues to grapple with complications arising from Cairn’s pioneering activity in India, where it made huge finds under Sir Bill.

Cairn has been locked in a tax dispute with the Indian authorities since 2014. The company has been prevented from selling its remaining 10 per cent holding in former subsidiary Cairn India.

Mr Thomson said Cairn is still seeking $1bn compensation from the Indian government for the fall in the value of the holding.

He noted: “For us it’s been hugely damaging in terms of loss of value for shareholders and the direct effect in terms of redundancies in the company and asset sales.”

Mr Thomson has said previously that Cairn had to shed 40 per cent of its workforce and sell part of its holding in Catcher after the Indian government slapped a $1.6bn tax demand on it in 2014.

He said yesterday that he was pleased the dispute is now subject to a formal arbitration process. However, Cairn expects this will take another 12 months to complete.

The company is reported to have asked the government to let it sell the Cairn India stake pending completion of the arbitration process.

Cairn could pay some of any compensation it receives to shareholders, depending on the state of its balance sheet.

The company says it has paid all taxes due in India.