Cairn Energy abandons Greenland well

Oil industry exploration firm Cairn Energy has admitted it is abandoning drilling in Greenland after failing to strike oil.

The company explained that it has suspended drilling so it can free up the oil rig to explore another location.

However, the oil industry firm claimed that it "continues to be optimistic" it will find oil in Greenland as a result of the discovery of pre-Tertiary oil-prone source rocks.

"The exploration challenge remains to find the reservoir sands. We continue to be optimistic about the remainder of our 2011 four-well, multi-basin exploration programme offshore Greenland," said Simon Thomson, Cairn chief executive.

However, the announcement of an initial failure in Greenland has caused shares in the company to fall,

The firm is down by 12p at 340.7p, a decline of almost 3.5 per cent.

It is likely to have dented investor confidence, which was up, following a huge success in the Arctic recently.