British oil firm Cairn Energy is lining up exploration opportunities in Lebanon as a long-running deal to sell a stake in its Indian business nears its conclusion.
In June, the government granted conditional approval for Vedanta to buy a stake in Cairn India from Cairn Energy in a $6-billion deal. With ONGC’s consent, the finalisation of the sale could come by the end of September, said Jann Brown, chief financial officer, Cairn, on Tuesday.
“With a fair wind and all the stars aligning, it could complete by the end of September,” Brown said, adding, that given past delays she was wary of making predictions.With the drawing to a close of the Indian deal, Cairn said it was now looking to Lebanon and the potential to find oil and gas in the Eastern Mediterranean.
The company said it planned to participate in a licencing round in Lebanon due to take place next year, where Cairn’s success would add acreage in a politically-sensitive part of the world.
Lebanon and Israel do not agree on their maritime border and remain in a formal state of war, but chief executive Simon Thomson, who took over from Cairn’s founder Bill Gammell in June, shrugged off concerns about the region.
“In relationship to potential boundary disputes, I think that’s a fairly common thing around the world. Obviously we will assess, as we do anywhere, the political, technical, commercial risks in whatever we do, but there’s nothing that’s stopping us being interested in this licencing round,” he said.
Part of the cash returned from the Indian transaction could be used to fund drilling in Lebanon, where Cairn said it has teamed up with a unit of CCC, a Lebanese private construction company, and UK-based explorer Cove Energy.
The company said it had cash of around $1 billion on June 30 and its balance sheet would be strong enough not to require it to further reduce its stake in its Indian business to fund any drilling in Lebanon.