The oil and gas industry is often viewed in two ways: a crucial component in the supply of the world’s energy and economic growth or responsible for many of the world’s environmental and political ills. Today the industry is focused on delivering critical energy supplies in adherence to strict environmental and safety standards.
In the period before an alternative energy supply as flexible and as cheap as hydrocarbons is found, the oil and gas exploration and production sector faces mounting challenges to find new reserves in ever more difficult and expensive environments.
Within the exploration and production sector, Cairn Energy is one of Europe’s largest and most successful companies. Our business model focuses on finding and, if appropriate, developing new reserves in frontier areas. We differ from the major oil companies in that we do not compete throughout the oil value chain in refining or retail, but instead focus on doing what we do to world-class levels.
Cairn’s success has come from an unconventional approach to exploration. Where many industry players seek safety in numbers, targeting small incremental discoveries within existing provinces, Cairn is focused on generating new ideas, moving quickly and exploring for entirely new petroleum provinces. This approach carries significant risk, but also offers significant reward potential as the profitability of frontier discoveries can greatly exceed those in the established mature areas.
In India, Cairn discovered the world class Mangala field in the Rajasthan desert and also opened up the offshore Krishna-Godavari basin, both provinces which had previously been ignored by the industry. During 2009-10 our attention will be on developing our Indian reserves and on opening up a new exploration province offshore west Greenland.
To ensure that risk taking offers appropriate reward, we are focused on securing the right commercial risk sharing agreements with governments and partners, which involves numerous acquisitions, sales and other commercial arrangements. Underpinning our flexibility to take risks and seek reward are robust financial foundations, which allow us to act independently and at a pace of our choosing.
Before operating in a new area we carry out detailed evaluations of environmental conditions and constraints and design our activities to mitigate any adverse impact. Cairn also recognises the need to respect the people and communities in whose areas we operate. In India we have founded entrepreneurial centres to help the rural poor and established micro-vendor programmes so that local people can contribute to and profit from our projects.
