Simon Thomson, CEO

CEO statement
Delivering value for stakeholders

Corporate Responsibility is key to our business, delivering and protecting value for all our stakeholders.

3Rs diagram - Core value: Building respect, nurturing relationships and acting responsibly

Corporate Responsibility helps us deliver value

At Cairn, we have a responsibility to deliver value to our stakeholders through discovery and development of hydrocarbons in a safe, responsible and ethical manner. Putting Corporate Responsibility (CR) at the forefront of what we do from early phase exploration through to development and production provides value to our stakeholders throughout the oil and gas lifecycle. 

Our CR approach is based on our core values of building respect, nurturing relationships and acting responsibly, which we call the ‘3Rs’. 

These values underpin our ten Business Principles which set out our goals and the expected behaviours in the management of our business. These principles are embedded in our decisions and actions, inform our strategy and we hold ourselves accountable to them. Our Business Principles and CR policies are regularly updated, most recently in October 2015 to reflect an increasing focus on major accident prevention embodied in recent developments in Europe, including UK offshore safety regulations.

Our progress in 2015

I am pleased to report that our CR performance has improved further in 2015. We have ensured that our rigorous approach to CR has not been compromised by the tough market conditions faced by our industry during the year.

Senegal

In 2015, following our success in opening up a new Atlantic Margin basin in Senegal the previous year, our focus was on preparing for and commencing our multi-well appraisal and exploration programme along with a further 3D seismic acquisition.

At all times, we are aware of the potential impacts our work can have on the local communities where we operate. A key activity in Senegal this year, therefore, has been to build relationships and foster communications with key stakeholders such as the fishing communities who may have been affected during our seismic activities. We successfully commenced our planned 3D seismic campaign in September following completion of a voluntary baseline environmental assessment review and regulatory approval. We maintained close communications with fishing representatives and government and maritime agencies prior to and during the campaign. The seismic work was successfully completed in November despite high fishing activity. We received a single claim for fishing net damage, which was managed through our established claim procedure.

We continued to work closely with the Senegal authorities both centrally and regionally to maintain our approvals for drilling, reviewing and refreshing our impact and safety risk work, which we shared proactively with national and local government and community representatives. The three-well exploration and appraisal drilling programme began in October following multiple stakeholder meetings and presentation of a formal communication and reporting plan. This plan promotes understanding of our industry through regular performance and activity updates to the national regulator.

For the 2015/16 drilling programme, we engaged our joint venture partner, ConocoPhillips, as well activities delegate to undertake certain operations, including the contracting of the Ocean Rig Athena and certain related services on behalf of the joint venture. We have worked throughout with our suppliers, contractors and partners including ConocoPhillips to carry out our activities safely and to reduce our environmental and social footprint.

As part of developing sustainable local benefits, I am very pleased that we are making progress with our Social Investment Programme in Senegal. We aim to promote the development of local people and suppliers toward supporting the oil and gas industry into the future. We have continued to support capacity-building initiatives identified in consultation with the regulating authorities as well as working with suppliers and academic institutions.

Notable Key Performance Indicators

I am happy to report that our safety KPIs have improved overall in 2015 for our operated assets with no lost time injuries and no recordable injuries. In mid-January 2016, our Senegal shore base personnel and contractors reached 900 days without a lost time injury. We had no oil spills to the environment over 2010-2014; however, we experienced one very minor oil spill incident in 2015: oil ‘drop-out’ from the flare (of less than one litre) during drill stem testing on the SNE-2 appraisal well. In addition, we had one very minor chemical spill (of less than one litre) of waste hydraulic oil, which went to surface drain at the shore base during tank cleaning. 

Non-operated activities

We continue to have a significant non-operated portfolio and we play a proactive role in engaging with our partners on CR requirements. In particular, we are working closely with our partners on the Catcher and Kraken developments in the UK North Sea to support delivery of first oil in 2017. We also continue to participate in non-operated wells in the Norwegian and UK sectors. We pre-qualified as an operator in the Norwegian sector in 2015 and subsequently were awarded an operated licence. 

Improving our management systems

In 2015, we revised and updated our Corporate Responsibility Management System (CRMS) to better integrate it within the overall business management system. We have aligned our CRMS with the Cairn Operating Standards (COS) manual which sets out the standards by which our business processes must be carried out. Both the revised CRMS and COS documentation went live in January 2016, but have been in operation practically during 2015. In addition, we also completed a significant revision of our crisis and emergency arrangements including training and exercises.

Other developments in 2015 included improving our external engagement on issues material to the business, which has been helpful in confirming our understanding of the issues of importance to our stakeholders. 

Looking forward

During 2016, we will continue to prioritise the health, safety and wellbeing of people while promoting safe behaviours of our contractors. We remain committed to protecting the environment in the areas in which we operate. Good governance will also continue with our commitment to meeting all of our tax and our other obligations in a transparent manner. We will monitor the security situation across the business and will introduce further improvements and training for business travellers.

In 2016, as operator, we will be progressing the appraisal and exploration programme offshore Senegal that commenced last year. We will continue to learn from and apply our experiences towards increasing local participation through developing skills critical to working in the oil and gas sector. This also improves awareness, which serves to promote effective engagement with key stakeholders. We intend to follow-up with stakeholders in Senegal to test the quality and effectiveness of our CR plans as the project in Senegal develops. 

We will maintain our focus on monitoring the geo-political situation of our non-operated assets, including offshore Western Sahara, and will work closely with the operators to ensure we operate in accordance with our Business Principles and CR policies.

We will also investigate how we, as a business, can more effectively measure and demonstrate the value of our activities to stakeholders. 

We will continue to uphold and support the ten principles of the United Nations Global Compact and we will remain a Participating Company of the Extractive Industries Transparency Initiative. We believe that these two initiatives provide a valuable platform for promoting standards for ethical behaviour for our business and for those we interact with during the execution of our activities.

CR is and will remain a key focus at Cairn to help us deliver value for all of our stakeholders and protect our licence to operate.

Simon Thomson
Chief Executive

14 March 2016

“Our CR approach is based on our core values of building respect, nurturing relationships and acting responsibly, which we call the ‘3Rs’.”

Simon ThomsonChief Executive

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