Oil and Gas production Process

Cairn looks to create, add and realise value for stakeholders, but not at the expense of the safety and well-being of people and the environment. We manage the risks associated with our business responsibly for all our activities and wherever we operate. This means, we aim to behave professionally in our dealings with people and within the environment from the very start of any project or activity.

The oil and gas business is, by nature, long-term and our approach covers every stage of the oil and gas life-cycle and is outlined below.

1. Due diligence

Before making an acquisition or investment, applying for an exploration licence or farming-in to an existing project, Cairn carries out an extensive risk-screening process which includes assessing whether there are potential health and safety, social, human rights, political, corruption, security or environmental impacts. This is used in decision-making on whether or not to proceed and if investment goes ahead it informs approaches to risk management going forward.

In 2014 we conducted due diligence on farm-in opportunities including the Mesana blocks in Spain. We farmed-in to the PL420 block and drilling project operated by Statoil in the Norwegian sector of the North Sea. We also farmed out of UK sector blocks P2040 and P2086, reducing our interests south of Catcher.

2. Prequalification

When we apply for an exploration licence, the necessary documents are submitted to the relevant authorities. Typically this includes information about our legal status, financial capability, technical competence and plans to manage health, safety and environmental risks, and contributions to local economic development.

In 2014 Cairn participated in the 23rd licensing round in the Barents Sea, Norway.

3. Exploration seismic

Once Cairn has been awarded the right to explore in a certain area, we may carry out seismic surveys to develop a picture of geological structures below the surface. This helps identify the likelihood of an area containing hydrocarbons. Seismic surveys are usually preceded by an assessment of environmental, social and human rights impacts, which are managed through the Project Delivery Process (PDP).

During 2014 Cairn successfully completed seismic surveys offshore the Republic of Ireland and Malta. As non-operator, we also participated in seismic operations offshore Western Sahara. Application for seismic surveys is pending offshore the Gulf of Valencia.

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