Scottish explorer Cairn Energy said today that it had discovered gas in offshore Greenland.
The company revealed the discovery alongside news of a return to profit in the first half of 2010, and uncertainty over its recent deal to sell a majority stake in its Indian unit, Cairn India, to mining group Vedanta.
Profits after tax stood at $27.7m in the six months to the end of June, which compared with a net loss of $76.1m the same time in 2009, Cairn said in a results statement.
Cairn added that it has encountered gas' in thin sands at its first well in Baffin Bay, offshore Greenland, with indications that there may be other hydrocarbon resources in the area.
News of the Greenland find comes a week after Vedanta agreed to pay up to $9.6 billion for a 51-60% stake in Cairn India, whose biggest asset is the oil-rich Mangala field in the western state of Rajasthan.
Cairn Energy, which is based in Edinburgh, hopes that the Vedanta deal will provide fresh funds for the drilling programme in Greenland and allow it to return cash to shareholders.
The Vedanta deal is in the balance as Indian media report that the country's state-run fuel companies may make a counterbid for Cairn India oil assets. The Press Trust of India said yesterday that state-run companies Oil and Natural Gas Corp (ONGC), OIL India Ltd (OIL) and GAIL have already lined up $10 billion in loan commitments from international banks for a possible counter-bid for Cairn India assets.
The three firms have held informal talks as Indian authorities examine legal options to deny Cairn approval for conclusion of its deal, the agency said, quoting sources with knowledge of developments.
The report came as India's Oil Minister Murli Deora said the government was still undecided on whether to push for a state takeover of Indian oil assets owned by Cairn Energy.