UPDATE 1-Cairn says T4-1 well in Greenland does not find oil

Published 10/26/2010, 03:03 AM
Updated 10/26/2010, 03:08 AM

* Alpha-1S1 well is suspended before reaching target depth

* T4-1 and T8-1 abandoned, $185 million costs written off (Repeats to reach more customers)

LONDON, Oct 26 (Reuters) - Oil explorer Cairn Energy said one of its wells in Greenland did not result in a commercial discovery and another failed to reach target depth before the end of the Arctic drilling season.

Cairn said on Tuesday that the Alpha-1S1 well in Baffin Bay, a well which it said in September had found evidence of oil, did not reach the Mesozoic geological depth it was aiming for and as such was suspended.

Another well, T4-1, did not find significant hydrocarbons and was plugged and abandoned -- the same result as the third well of its three-well exploration programme this summer.

Cairn said it could return to the Alpha well at some point in the future to deepen it or drill a sidetrack well.

Protesters from environmental group Greenpeace, who object to oil exploration in the pristine Arctic territory where they say an oil leak would be difficult to cap, in August tried to stall the drilling of the Alpha well by suspending themselves from the rig.

Costs of $185 million from the two plugged and abandoned wells are forecast to be written off in accordance with Cairn's accounting policies, the company said.

Greenland, a self-governing territory of Denmark, is one of the world's largest under-explored frontier areas, according to consultancy Wood Mackenzie, which estimated there could be over 20 billion barrels of oil equivalent in the country.

(Reporting by Sarah Young; Editing by Golnar Motevalli)

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