Tanker at dock

Supply chain

With the commencement of our appraisal and exploration programme and the acquisition of 3D seismic in Senegal, 2015 was an exciting and challenging year for Cairn’s Contracts and Logistics function. Cairn has continued to foster local contractors, develop in-country partnerships and promote our industry-leading health, safety and environment (HSE) performance.

2015 highlights

  • Completed 2015 without any Lost Time Incidents (LTIs) or Recordable Incidents. The Dakar base has now completed over 900 days without an LTI.
  • Acquired 2,292km2 3D seismic data within budget and within schedule with no LTIs.
  • Following implementation of the Well Management Contracting Strategy for the Senegal drilling project, Cairn provided oversight and assurance of the contracting activities undertaken by the selected well management company.
  • Successfully tendered 40 contracts in support of the 2015/16 Senegal drilling and 3D seismic acquisition/processing projects.
  • Reviewed, revised and enhanced all Logistics Guidelines and policies.
  • Reviewed our contractor management and procurement process, as well as improved performance monitoring, as a result of our ‘Continuous Improvement and Lessons Learned’ campaigns.
  • Successfully trained and certified local teams of logistics and shore base personnel in Senegal in safe lifting techniques and oil spill response, using world-leading training providers.

2016 objectives

  • Maintain and continue to develop the Company’s Corporate Responsibility (CR) record and on-time project delivery successes.
  • As part of a continuous improvement process, including incorporating lessons learned from 2015, review risk-screening criteria for CR risks in the Well Management Contracting Strategy and operating model for future operational activities.

Mitigating the risks

We revised our Contractor Selection and Management procedure in 2014. This details the requirements and standards expected by Cairn from all those who undertake work on our behalf and continues to be the basis for our contracting activities. In 2015, this was incorporated into the Cairn Standard Operating Procedures. In summary, all procurement activities must:

  • adhere to Cairn Group Business Principles, CR obligations and our HSE and quality standards;
  • comply with corporate governance, joint venture/partner agreements, legislation and regulatory requirements;
  • comply with the anti-bribery and corruption (ABC) requirements set out in the ABC Management System, Code of Business Ethics and ABC Assessment and Selection of Services Providers;
  • comply with the Cairn Contract Committee requirements; and
  • provide a basis for a clear audit trail to support cost recovery.

In addition to the above, Cairn operates a comprehensive Business Risk Management System. This recognises the importance of contractor selection and management in terms of appropriate understanding and management of risk and performance, including:

  • pre-qualification of contractors to establish their compliance with HSE performance requirements;
  • agreement of an appropriate HSE plan with contractors. Developed from the HSE risk process, this plan will formally document how the contractor will manage identified HSE risks to levels that are As Low As Reasonably Possible (ALARP);
  • monitoring of performance metrics against the HSE plan;
  • timely and efficient delivery of services and equipment;
  • addressing commercial and contractual apportionment of risk through robust contract terms;
  • quality of delivery from contractors through an objective contractor performance management process, including contractor management responsibilities at all levels of the Company; and
  • undertaking due diligence to meet the ABC Management System and Cairn Group Code of Business Ethics and ABC requirements, as detailed in the ABC Assessment and Selection of Services Providers.

Cairn also recognises the benefits of local procurement and utilises local suppliers where they are available (see Local contractors). All contractors and suppliers are subject to the conditions detailed above.

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