EDINBURGH-The three-month-old ceasefire has not persuaded the UK's Cairn Energy to resume its search for oil under the tarai. Two years after signing contracts giving it exclusive rights to explore a huge area of southern Nepal, Edinburgh-headquartered Cairn says it continues to monitor security developments in Nepal but has no plans to start digging. After being catapulted into the big time by a series of giant finds in India's Rajasthan, Cairn said it had high hopes of finding oil in Nepal, where it agreed on terms for exploration with the government in August 2004. But the company suspended early exploration activity amid deepening unrest last August before it had drilled any wells. Given the long lead times involved in turning finds into producing assets in the hit-or-miss exploration game, the continued delay means it could be years before any black gold is pumped from under the tarai. But Cairn says it wants to start field operations at \'the earliest opportunity' and chief executive Sir Bill Gammell, an old friend of US President George W Bush, may be encouraged to put his foot on the accelerator in Nepal within the next year.

Mark Williamson