CAIRN Energy is moving into frontier exploration territory off Mexico as the oil and gas firm looks to repeat the success it has enjoyed off Senegal.
Edinburgh-based Cairn was awarded interests in two big chunks of acreage off Mexico in what was only the second licencing round completed by the country.
The awards will allow Cairn to continue with a strategy which involves focusing its exploration effort in areas where there has been relatively little drilling.
Chief executive Simon Thomson said: “We are delighted with these awards which we believe provide an exciting opportunity to build a strategic portfolio over time in this highly prolific yet under-explored region.”
While Mexico is rich in oil and gas the country’s waters have seen little activity by international standards.
State-owned Pemex had a monopoly on oil and gas production until the country decided in 2014 to open the market to private investment.
Mexico completed its first licensing round only last year, after deciding it needed to attract international expertise to help make the most of its resources.
The decision to award Cairn the shallow water licences in the southern Gulf of Mexico provides a vote of confidence in the firm on the part of the country’s government.
The round attracted interest from a range of majors including Total and Royal Dutch Shell.
Cairn is partnering Italian giant Eni and Mexican exploration and production firm Citla on one of the licences it won.
It is operating one of the licences, with Citla as its partner.
The companies beat Eni in the bidding for that licence.
Cairn said it expects drilling to start on both licences in the 2019-20 period.
The move into Mexico comes after Cairn burnished its credentials as an explorer by making two big finds off Senegal in 2014. There had been little activity off the country, which is now attracting interest from giants.
Since taking charge in 2011, Mr Thomson has built a portfolio that combines potentially transformational exploration in frontier areas with lower risk development activity in the North Sea.
Cairn achieved renown by making bumper finds in India under founder Sir Bill Gammell.
On Monday Cairn said India’s authorities want to stop the firm getting $104 million dividends due to it pending resolution of a tax dispute.
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