CAIRN Energy has made two oil discoveries on a North Sea field in a success that could help to validate the company’s decision to return to the region.
The Edinburgh-based company has a stake in the Bonneville well, which found oil in two locations in the central North Sea.
The operator of the well, Premier Oil, estimates the areas concerned could contain around 30 million barrels oil in good-quality reservoirs.
Premier believes it should be possible to connect the find to production infrastructure being developed for the giant Catcher field on the same licence.
Cairn did not elaborate on a statement announcing the find issued by Premier. However, the success will be welcome following several drilling disappointments in the North Sea for the company in recent months.
After making its name with a series of bumper finds in India, Cairn returned to the North Sea as part of chief executive Simon Thomson’s efforts to build a balanced portfolio.
Cairn established a big position in the UK and Norwegian North Seas through the acquisitions of Agora Oil and Gas and Nautical Petroleum for $1 billion (£656 million) in total.
The deals were funded using some of the proceeds of the $5.4bn sale of a controlling stake in its Indian business to Vedanta Resources in 2011.
The company plans to use the cash it expects to generate from relatively low-risk exploration and development activity in the mature North Sea to help fund exploration in frontier areas like Greenland.
The Bonneville find is the third made on acreage acquired with Agora and Nautical.
Cairn made the significant Skarfjell oil discovery in Norwegian waters soon after announcing the Agora deal last April.
It made the Carnaby oil find in June last year.
However, five wells in which Cairn had stakes have been plugged and abandoned since then.
The Bonneville find provides reassurance there are still finds to be made in the North Sea.
It is understood the Agora team played a key part in deciding where to drill.
Premier said the Bonneville well made a find in one location and then sidetracked to target the Bonneville East prospect, which came good.
It added: “The estimated oil in place from the Bonneville discoveries is approximately 30 million barrels, which is in line with pre-drill predictions. It is anticipated the discoveries will be tied back to the Catcher field development.”
Premier has a 50% interest in the Catcher licence while Cairn has 30%.
Premier provided a big vote of confidence in the North Sea in October 2011, when it bought Encore Oil for £220m, triggering a £1.3m windfall for Scottish industry stalwart Alf Bissett. Encore made the Catcher find 110 miles east of Aberdeen in 2010.
Premier said the rig used at Bonneville will be moved to the West of Shetland to start development drilling on the Solan oil field.
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