BEIRUT: UK-based oil firm Cairn Energy has formed a consortium, including the Beirut-based CCC, a Lebanese private construction firm, to bid for the rights to drill for gas and oil off the coast of Lebanon, its chief executive said.

The company said it planned to participate in a licensing 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 CEO 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 licensing round," he said.

Cairn is no stranger to controversy - its current exploration program off the coast of Greenland has attracted criticism from environmental groups who argue that an oil spill in the remote Arctic would be difficult to clean up.

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 U.K.-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.

"We're very comfortable with our position in India. We have the flexibility and strength in our current balance sheet not to have to contemplate any [further] sales in India," Thomson said.

Thomson said the firm would only move into Lebanon, where the company anticipates a competitive bidding process after Noble Energy and its Israeli partners made a large gas discovery in nearby waters, if the commercial terms suited.

The U.S. Geological Survey (USGS) last year estimated that the Levant Basin Province lying mostly off the coast of Israel, Lebanon and Cyprus could hold 122 trillion cubic feet of recoverable gas, making it one of the world's richest deposits.  – With Reuters