Oil search setback for Cairn Energy

The Edinburgh-based oil explorer said it had plugged two wells after failing to find large quantities of oil.

Its third in the area has now been suspended after it failed to dig deep enough to find oil, although it could be reopened next year when drilling restarts after the winter season.

It is thought Cairn was unable to reach the depth it was aiming for within the narrow Arctic drilling season partially due to delays caused by Greenpeace protesters.

Activists from the environmental group scaled the Stena Don rig in August, suspending themselves from its platforms, which is said to have caused Cairn delays.

Cairn said it would write-off 117.5m in costs incurred so far on the failed exploratory drilling operations. Its shares slumped by 8 per cent following the announcement, wiping around 480m from the company's stock market value.

However, the company, led by former Scottish rugby international and founder Sir Bill Gammell, said it was continuing to explore the area and was still hopeful of striking oil next year.