According to an official statement, the net profit of UK's Cairn Energy declined to $72.6 million in 2012 from $4.56 billion in 2011.

The decline in profit is attributed to the contraction of oil output, and the acquisition of stake in three oil block off Senegal in West Africa.

The firm acquired a 65 percent working interest in three offshore blocks in Senegal from FAR and will become the operator. The company plans to drill at least one well in the next 18 months in the area that has prospects of more than 1.5 billion barrels of oil.

FAR currently operates the three contiguous blocks - Rufisque, Sangomar and Sangomar Deep -along with Senegal national oil company Petrosen.

As part of the transaction, Cairn will also pay 72.2 percent of costs incurred on the blocks by FAR to date, a total of about $10 million, the company said.

In 2011, the Cairn Energy realised higher profit mostly on account of the company selling majority stake in its Indian unit, Cairn India to mining group Vedanta Resources.

At the end of 2012, the Cairn Energy had net cash of about $1.6 billion. It still holds 10 percent of Cairn India, valued at about $1.1 billion.