CAIRN Energy has suffered a setback off Senegal but the company will still be pleased with the results of its first drilling programme in the country's waters.
Edinburgh-based Cairn said drilling in an area that it thought could contain around 250 million barrels of oil and gas did not find any of the black stuff.
The well, located in the Sangomar block, will be plugged and abandoned, marking the end of drilling activity off Senegal for this year.
While the latest drilling targeted a big prospect, any disappointment among Cairn's directors will be short-lived given the fact the company made two finds off Senegal earlier in the programme.
On 10 November Cairn announced it had made a significant oil find above the area targeted in the latest activity.
In October Cairn said its first well off Senegal had struck a very substantial oil- bearing interval, which may have significant potential as a standalone discovery.
At the time Cairn's chief executive Simon Thomson described that discovery as an important event for Senegal. The company will start work on appraising the finds next year with high hopes that they are big enough to justify the investment required to bring them onstream.
Cairn has a 40 per cent interest in three blocks off Senegal - Sangomar Deep, Sangomar Offshore and Rufisque - which cover 7,490 square kilometres. The other partners are ConocoPhillips, FAR and the national oil company of Senegal.
The results of the first drilling programme off Senegal provide vindication for Mr Thomson's decision to follow a strategy that combines drilling in relatively under-explored areas such as off Senegal along with lower-risk work in the North Sea.
The progress off the west coast of Africa will provide a boost for Cairn's exploration team.
While Cairn made bumper finds in India under the leadership of founder Sir Bill Gammell, the company then subsequently spent more than $1 billion drilling off Greenland without making a find.
Separately Cairn has become embroiled in a tax dispute in India.
That means the company is barred from selling the remaining $1bn stake in its former Indian subsidiary while the dispute continues.
Directors may take heart from news on Tuesday that Royal Dutch Shell had won a $3bn tax case in India.
The case concerned the valuation of shares in a subsidiary that were issued to the parent group by Shell's Indian subsidiary.
The dispute involving Cairn Energy is thought to concern the company's tax bill for 2007. Cairn completed a £980m initial public offering of its former subsidiary in India in that year. Cairn insists it has paid all taxes due in the country.
On its website Cairn says the second well drilled off Senegal targeted an area that could contain around 182 million barrels and a deeper zone that might hold 256mmbbls.
Shares in Cairn closed the day down 7.1p, or 3.8 per cent, at 180.2p.
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