Cairn Energy’s Kraken and Catcher developments in the North Sea are “significantly” below original budget, according to the Scottish oil explorer’s chief executive.
Simon Thomson said the two projects, some of the largest in the UK, have cost less than initially anticipated and remain on schedule to target first oil this year.
Together they will deliver around 25,000 barrels of oil a day to Cairn.
The Edinburgh based firm has also secured additional licences both in the North Sea and Barents Sea as well as being farmed in to a number of “interesting prospects” offshore Ireland.
CEO Simon Thomson said Cairn plan to drill an exploration well in the Southern Porcupine basin this summer.
Kraken is expected to start producing in the first half of next year, with Catcher to follow in the second six months.
Cairn, which currently has no revenue as it focuses purely on exploration, holds a 29.5% stake in Kraken and 20% in Catcher.
Despite the North Sea progress, Cairn said earlier this week that its core focus remains Senegal, at the SNE field.
Thomson told the firm’s AGM today: “In Senegal, we have confirmed the scale and potential of the world class SNE field, having successfully drilled nine wells in three years.
“Following appraisal success in 2016 which saw us upgrade our resource estimates, we commenced the third phase of drilling in January and have drilled three successful wells this year with a further exploration well shortly commencing.
“The near-term focus in Senegal is defining the scale and phasing of the overall SNE field development including the balance between the number of drilling centres, type and number of wells and the subsea infrastructure.
“As previously indicated, we aim to submit an Exploitation Plan to the Government of Senegal in 2018 with a Final Investment Decision within twelve months thereafter and first oil in the period 2021 to 2023.”
Cairn currently anticipates providing an update on contingent resource estimates at the half year in August when the results of the latest wells will be further analysed and incorporated into the design and development plan for the SNE field.
The AGM also heard that international arbitration proceedings are progressing in respect of Cairn’s claim under the UK-India Bilateral Investment Treaty for the restitution of $1billion of assets frozen in 2014.
A date has been set for the final arbitration hearing in January 2018.
Thomson added: “To conclude, 2016 was a year of excellent progress, providing a strong platform for further activity in 2017.
“This year, we will commence production in the North Sea, progress the SNE field towards development, drill material exploration wells in Senegal and Ireland, and continue to work on new exploration and development opportunities both from the existing asset base and from new ventures.”