Cairn Energy has suffered another setback in its ambitions to establish Morocco as a frontier oil and gas province following the failure of a test well to find commercial quantities of hydrocarbons.
Drilling began in January at the JM-1 well, designed to explore an old heavy oil discovery declared by Esso in 1969. On Monday Cairn said that drilling on its primary target below the shallower heavy oil deposits had hit rock of limited porosity and that the well had been abandoned.
The company, which reports annual results today, plans to drill nine exploration wells this year as part of a $400 million drilling campaign that will make this its busiest year in a decade.
Analysts at Deutsche Bank said it was too early to write off the prospects for exploration success of a wave of drilling planned in Moroccan waters this year.
Cairn confirmed yesterday that it was moving on to work on the first of two wells planned this year off Senegal, where it holds a 40 per cent stake in three blocks with ConocoPhillips of the US as partners.
– (Copyright The Financial Times Limited 2014)
