Edinburgh-based Cairn Energy has acquired Nautical Petroleum, in a deal valued at £414m. The deal comes on the back of another acquisition, which saw the group buy a Norwegian competitor. It is part of Cairn Energy’s strategy to develop a core with businesses producing oil in the short term.
Speaking about the deal, the firm’s chief executive Simon Thomson said:
“This acquisition is another step towards building a balanced portfolio of transformational exploration, appraisal and development assets, and complements our recent acquisition of Agora to help build a platform in North West Europe.”
While Nautical are based in the UK’s capital, their main operational focus is in the waters west of Shetland.
The latest venture comes as the firm pulls out of Greenland, following a two-year project which has resulted in no viable deposits being uncovered.
It is a change in direction which many Scottish companies are taking, with economic challenges forcing innovation and diversification.
Such innovation is also being seen with commercial finance in Scotland.
Speaking about the sale of a 30 per cent stake in one of its Greenland licences, the firm’s chief executive Simon Thomson said:
“Cairn sees Greenland as having the DNA for transformation potential. Going forward we will have reduced capital commitments compared to the early levels so far.”
With the lack of traditional lending still affecting many, invoice factoring is something Edinburgh and Glasgow firms are looking at, for example.
The switch of focus certainly has a financial impact for Cairn Energy. The Greenland project has already cost £500m. However, Cairn Energy says it is still committed to further exploration in the country.