Assessing risk and opportunities
Risk management is a guiding theme for decisions we make and is comprehensively applied across the business. The Board sets the Group risk appetite and monitors the effectiveness of our risk management process. We look at risk and opportunity as an integral part of our approach.
At Cairn, we apply a rigorous approach to understanding, assessing and managing risk. It is important to understand risks and opportunities arising across the business life cycle at both a strategic and operational level. This includes all levels of the organisation from decisions made by the Board through to managing day-to-day activity risks in our operations.
The Company maintains a series of risk registers at a project, department, asset and Group level that capture both corporate and operational risks. These risks are managed on an ongoing basis to ensure risks and opportunities remain within the risk tolerance levels set in the Group Risk Appetite Statement. Our Risk Appetite Statement is reviewed annually and approved by the Board.
In 2015, during preparation for operations we maintained our stringent approach to understanding risk arising from all projects and regions. Of particular focus was the Senegal operations, which included the seismic and drilling programme and managing asset level risks to delivery of value.
Regular risk workshops are facilitated, which consider risks and actions and this risk information is fed into the various management committees of the Company. During 2015, we ran a risk workshop with the Board to review and refresh our understanding of risks and also to better consider opportunities in the current business climate.
Corporate Responsibility (CR) risks are included at all levels of our work.
We also monitor and review all our operations through a rigorous system of checks and balances. These include Cairn’s CR Management System (CRMS), performance standards and gated Product Delivery Process (PDP), in which each stage of a project is checked before proceeding to the next, and is designed to reduce risks in line with the As Low As Reasonably Practicable (ALARP) principle (see Operational and project performance).
See the Annual Report for information on our risk management process.