Our responsible approach
Cairn’s business model is to create, add and realise value for stakeholders through the exploration, development and production of oil and gas within a self-funding business model. Exploration creates material value for stakeholders and production provides the cash flow to sustain exploration and development.
We are committed to working responsibly as part of our strategy and this means working in a safe, secure, environmentally and socially responsible manner.
Cairn identifies assets it can add value to through exploration activity including 3D seismic and drilling as part of a focused exploration strategy. If successful, exploration activity can create material value.
In order to add value Cairn looks to progress existing exploration assets through the appraisal and development stages or can acquire new assets at this point in the oil and gas lifecycle.
Cairn realises value by progressing development assets through to production and/or realising value through asset sales and either reinvesting the proceeds into the business to fund exploration and development activity or returning cash.
To deliver value for stakeholders by building and maintaining a balanced portfolio of exploration, development and production assets. To maximise value, exploration is focused on frontier and emerging basins acreage from which the greatest value can be created. Cairn is currently focused on growing its Senegal resource base, and on progressing its North Sea developments to first oil and cash flow which is targeted in 2017.
Frontier and emerging basin exploration acreage offshore Senegal, Morocco, the Republic of Ireland, Norway and Malta; mature exploration acreage in the UK and Norway.
Non-operated interest in two development projects in the North Sea (Kraken and Catcher).
Kraken and Catcher, two of the largest UK North Sea development projects, are targeting production in 2017.
Annual Key Performance Indicators (KPIs) identify the Company’s strategic objectives and how they can be met, enabling the Company to measure its delivery of strategy.
2017 strategic objectives
- Deliver exploration and appraisal success
Purpose: Grow the resources and reserves
- Portfolio management
Purpose: Active portfolio management and acreage optimisation
- Deliver operational excellence
Purpose: In all 2016 activities
- Maintain licence to operate
Purpose: Deliver value in safe, secure, environmentally and socially responsible manner
- Deliver a sustainable business
Purpose: Maintain a self-funding business plan
Cairn has a robust risk management process in place to identify, monitor and mitigate risk and to identify opportunities. This means first determining risk appetite, and then identifying the key risks.
2016/2017 principal risks
- Exploration and appraisal
- Sustained low oil and gas price
- Securing new venture opportunities
- Health, safety, environment and security
- Stakeholder reaction to operations
- Fraud, bribery and corruption
- Delay in Catcher and Kraken production start-up schedule
- Operational and project performance
- Reliance on JV operators for asset performance
- Restriction on ability to sell CIL shareholding
- Political and fiscal uncertainties
- Access to internal or external funding
- Staff recruitment and retention
The ‘Maintain licence to operate’ KPI measures the Company’s ability to work responsibly and means delivering value in a safe, secure, environmentally and socially responsible manner. Working responsibly means identifying and managing issues that are material not only to the Company but also to stakeholders.
2016 material issues
- Economics and funding
- Contractors and supply chain
- Ethics, anti-bribery and corruption and transparency
- Social and economic benefit
- Human rights
- Major accident prevention and safety
- Climate change, emissions and discharges
See our CR objectives and KPIs
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