With the cashflow from our production assets supporting our exploration and development activity, our self-funding business model enables us to deliver our strategic objectives. We also work closely with our joint venture (JV) partners to allocate capital efficiently.
Our positive contribution
We aim to make a positive contribution by delivering tangible benefits to our stakeholders. These include the governments of the countries we operate in, the communities that give us our social licence to operate, and the workforce whose expertise we rely on to perform our activities and create value.
We distribute value through salaries and other benefits to employees, fees to contractors and suppliers, taxes, duties and other payments to governments, as well as by promoting social and community development in our host countries.
Increasing standards and expectations
In 2021, we anticipate a greater emphasis on global energy transition, with investors and businesses increasingly acting to limit temperature rise, and governments furthering their commitments under the Paris Agreement. Nonetheless, the continued use of hydrocarbon fuels will be required for decades to come, albeit with technologies and mechanisms for reducing the emissions associated with their use.
Within this context, providers of capital want to ensure that we meet the highest CR standards. To maintain our ‘licence to operate’, we track and apply best practices, which directly influence our CRMS.
Our CRMS prescribes the requirements for working responsibly; enables us to apply those processes and procedures throughout the organisation; and helps us to identify, evaluate and address potential societal risks, benefits and impacts.
Our CRMS is reviewed and revised annually to ensure it is up to date and addresses the latest risks to our business. We continue to seek improvements in our CRMS to reflect the evolution of the business, as well as changing standards and stakeholder expectations.
Cairn often seeks to engage in new investment opportunities and locations, as an operator or JV partner. Our CRMS requires us to understand the CR risks and determine whether we accept them with appropriate mitigation, or reject them. This assures our Board and management that we can apply our standards and demonstrates the importance of our position to potential partners and investors.
We use a phased Project Delivery Process to understand and assess the risks associated with each new venture opportunity. Although some opportunities may be financially attractive, they may represent an unacceptable risk due to associated ethical, safety or environmental concerns. Where we identify an opportunity and agree to pursue it, we continue to deepen our understanding of the risks and mitigation requirements. These include new country entry and operations, as defined in the Cairn Operating Standards.