With the cash flow 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 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
Our industry faces continued pressure on cost efficiency and operational standards in a challenging environment where the oil price remains volatile. While our business remains focused on capital allocation and cost efficiency, we will not compromise our commitment to working responsibly.
Increasingly, providers of capital want to ensure that we meet the highest corporate responsibility (CR) standards. To maintain our ‘licence to operate’, we track and apply best practices, which directly influence our CR Management System (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 joint venture partners. 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.