Senegal oil continues to impress Cairn Energy

EDINBURGH, Scotland, Aug. 16 (UPI) -- A lower cost of doing business offshore Senegal means operations can gain momentum at the same time that reserve estimates grow, Cairn Energy said.

The company announced that, after drilling six wells in two years, it was able to revise its estimate for gross-oil in place at the SNE field offshore Senegal to 2.7 million barrels.

"Drilling is scheduled to re-commence in Senegal shortly, benefiting from lower costs across the sector," Chief Executive Simon Thomson said in a statement. "The program contains options for multiple wells and in addition to ongoing appraisal of the SNE field."

The company, which has headquarters in Scotland, confirmed a discovery offshore Senegal in January.

West Africa has drawn interest from international energy companies eager to tap into unexploited reserves.

Cairn's counterparts at Australia's FAR Ltd. said last year it was evaluating the potential for commercial operations in a basin said to hold at least 200 million barrels of oil off the coast of Senegal.

Cairn said it plans to spend about $135 million on future exploration and appraisal programs across its entire portfolio. About half of that is related to costs associated with additional drilling activity in Senegal.

The company said that, unlike the tough sea conditions in the North Sea or in the Gulf of Mexico, offshore West Africa may be more palatable to energy companies.