Cairn bets on big Greenland oil find

By Tom Bergin

LONDON (Reuters) - Greenland could have billions of barrels of oil but the costs of extracting it will be high and any developments are a long way off, the chief executive of Cairn Energy PLC (CNE.L: Quote, Profile, Research, Stock Buzz) said on Friday.

Bill Gammell told the Reuters Global Energy Summit his company had high hopes for its interests in the Arctic nation.

"We think Greenland has billions of barrels of potential ... we think prospect sizes could be large," he said in a conference call from his Edinburgh office.

"We technically believe that it's got a lot of potential."

Cairn's Capricorn unit has acquired interests in six blocks offshore Greenland as part of the company's strategy of making big bets on an area in the hope of making a big strike.

"Costs will be large so the size of the prize needs to be big ... There's going to need to be a lot of wells drilled before you're successful," he said.

The high-risk strategy has previously worked for Cairn in the Gulf of Mexico and in India, where an oil find in Rajasthan propelled the company into the FTSE 100 index of the UK's largest companies.

Cairn's blocks are off Greenland's west coast, where U.S. oil majors Exxon Mobil Corp (XOM.N: Quote, Profile, Research, Stock Buzz) and Chevron Corp (CVX.N: Quote, Profile, Research, Stock Buzz), Canada's Husky Energy Inc (HSE.TO: Quote, Profile, Research, Stock Buzz) and Sweden's PA Resources (PAR.ST: Quote, Profile, Research, Stock Buzz) also have interests.

Gammell said he thought exploration would extend also to the waters off the east coast in time.

"It's very very early days in Greenland. There's only been half a dozen wells drilled there and nothing since the early 1970s," he said.

In April the Chief Executive of Denmark's state-owned energy company DONG, which also has interests offshore Greenland, said he did not expect first oil before 2022.

Cairn is restructuring and moving its focus back to exploration following the part flotation of its Indian assets.

Gammell added that pipes were due to arrive at Cairn's Rajastahn fields next week ahead of the construction of a long-awaited pipeline that will be used to move crude to market when the fields start producing.