Through its operations globally, Cairn has demonstrated the ability to develop and manage complex exploration and drilling projects successfully, while aiming to set the highest possible standards in terms of environmental and safety records.
Cairn recognises that its exploration, development and production activities may have an impact on the environment and the local biodiversity, so aims, wherever possible, to avoid, mitigate or at the very least manage any negative impacts the Company's operations have on the environment. In keeping with industry best practice, Cairn is committed to not exploring in UNESCO World Heritage Sites.
As each country presents unique environmental challenges, prior to operations beginning in any area, Cairn hires independent environmental experts to implement an environmental impact assessment. The Company takes on board the findings and manages its activities to ensure it minimises any potential impacts.
Cairn and the Environment – Greenland
Greenland and its waters support a variety of species of marine life. The way of life of many of the Greenlandic people is dependent on these species for food and the continuation of their traditions. This means that Cairn has a particular responsibility to ensure its operations do not present unnecessary risks.
In 2010, we completed – with the assistance of an independent international environmental consultancy (ERM) – two EIA study reports prior to the start of drilling operations in Greenland. (See a summary of environmental impacts and mitigation measures implemented for the Greenland drilling activities in 2010.) During 2011, we carried out EIAs for both seismic and drilling activities, and an SIA for drilling activities in Greenland. These were subject to public hearings, involving public disclosure of the EIA and SIA report findings, disclosed responses to all public and regulatory comment, and four public meetings.
The 2010 drilling campaign offshore was carried out with no environmental incidents. For the 2011 exploration programme, Cairn contracted two state-of-the-art drilling vessels that do not require anchoring to the seabed and will use water-based mud, so reducing the environmental impact on the marine environment.
Marine mammal observers have been placed on Cairn's survey vessels and at times on the drilling vessels. In addition, fishery liaison officers have been hired to minimise any impact of the drilling activities on local fishing activities. Cairn agreed in 2010 to cooperate with the Danish National Environmental Research Institute (NERI) to carry out a survey to better understand the noise generated by the drilling rigs. The cost of this support was approximately US $577,000.
Helicopter flights have been routed to take into account seabird nesting grounds.
While there were no environmental incidents during 2008 and 2009, we regret to report that there were two separate spills - of kerosene and hydraulic oil - in 2010 associated with our seismic survey activities.
As part of its licence agreements, Cairn has committed US $4.5 million towards environmental research in Greenland since January 2008.
Emergency Planning
Wherever Cairn operates, our first priority is safety, both in terms of people and the environment. We aim to prevent incidents and reduce the risks and impacts of our activities as much as is reasonably practical. In addition to preventative and well control measures, we also have plans in place to manage an incident appropriately, in the unlikely event of one occurring. Such plans include an extensive Oil Spill Prevention and Contingency Plan (see below), which has been reviewed and approved by the Greenland regulatory authority and the National Environmental Research Institute (NERI).
Preventing Oil Spills
The Greenland Government and Cairn believe prevention of any incident and putting in place a robust strategy are the most efficient means of avoiding an oil spill. Our Oil Spill Prevention and Contingency Plan for Greenland includes predictive modelling and different response techniques for a range of scenarios, and was updated for the 2011 campaign by international oil spill experts, Oil Spill Response Limited.
Preventative measures include independently assessed well design, with upfront hazard identification, and well control, with principal contractors aligned with regards to well management. Blow-out prevention equipment has been subjected to the highest standards of inspection and testing, and our dual-rig strategy has been retained to ensure an emphasis on safety, operational capability and flexibility.
Both dynamically positioned vessels – a drillship, the Ocean Rig Corcovado, and a semi-submersible drilling rig, the Leiv Eiriksson – are designed for working in harsh environments and their capabilities far exceed the requirements for our 2011 offshore drilling programme. Neither vessel requires anchoring, which minimises our impact on the seabed, and either can provide rapid relief well drilling in the event of a blow-out. A range of other vessels provide additional operational, emergency response, ice management, and oil spill response support, and in-country capability has been expanded with additional equipment and dispersant located there.