Cairn makes $1bn loss but keeps faith in Greenland

Oil firm Cairn Energy racked up a 1.19bn dollar loss in 2011 but said it was still optimistic about striking it big in Greenland.

The loss on continuing operations was almost all down to unsuccessful exploration costs during the year of $942m.

Cairn drilled five exploration wells offshore Greenland in 2010 and five in 2011 but has yet to meet with success.

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However, the firm's failure to turn its efforts into black gold does not seem to have phased its Chief Executive, Simon Thomson, too much.

"Commercial quantities of hydrocarbons have yet to be discovered, but the first phase of our exploration programme in Greenland has demonstrated that all of the geological ingredients necessary for success are present," he said.

"We remain encouraged by the prospects and opportunities presented by exploration offshore Greenland."

The firm said its main exploration focus in 2012 will switch to the Pitu Licence in the Baffin Bay area west of Greenland over which 3D seismic and geochemical seabed sampling surveys were acquired in the summer of 2011.

In January the Edinburgh-based explorer announced it would partner with Statoil ASA to help exploit the Pitu block, farming down 30.6% of its interest in the area.

At 31 December 2011, the group said it had a cash pile of around $4.7bn of which $3.5bn was returned to shareholders in February.

The firm said the remaining $1.2bn would be retained to fund future growth opportunities.