Protecting the Arctic

Supplementary written evidence submitted by Cairn Energy PLC

Following the oral evidence session on 14 March, Cairn Energy would like to provide the following additional information on some of the areas in which the Committee expressed an interest.

Oil Spill Response Plan

1.0 Cairn Energy’s Oil Spill Response Plan was published on 15 August 2011 and can be found here: http://uk.nanoq.gl/sitecore/content/Websites/uk,-d-,nanoq/Emner/News/News_from_Government/2011/08/~/media/981EC2BD18474A028F11DEF6A20B0D31.ashx

1.1 The only reason that it had not been made available previously was because of a stipulation by the Greenland Authorities.

1.2 However, the comprehensive response plan had been in place and approved prior to the commencement of Cairn’s drilling operations offshore Greenland in 2010.

1.3 Cairn is operating at the invitation of the Greenland Government and adheres to all stipulations and licence conditions that the Government puts in place and we operate in accordance with our policies as can be found here: http://www.cairnenergy.com/index.asp?pageid=22

1.4 Cairn welcomed the decision by the Greenlandic Government to revise its exploration framework, a move which led to relevant response plans being publicly available.

1.5 In August 2011, Ove Karl Berthelsen, Minister for Industry and Mineral Resources, Greenland Government stated:

"The Government and Bureau of Minerals and Petroleum (BMP) have always wanted to make the plans available to the people of Greenland. We had reasonable concerns, however, that the balance between transparency of information and the possible impact of safe operations was outweighed by regular violation of safety procedures.

We are confident that the security of operations is better protected to the extent that we now feel able to provide people in Greenland with access to as much information as possible about our country’s search for hydrocarbons.

I would stress that all exploration is being carried out in accordance with the upmost focus on meeting the stringent requirements we have put in place focusing on safety and environmental protection. In addition, our supervision of these requirements is among the most stringent anywhere in the world." [1]

1.6 Cairn’s plan has been drafted by recognised expert third parties including Oil Spill Response Limited (OSRL), and reviewed by the Danish National Centre for Environment & Energy and the Greenland Government. All parties are satisfied that the plan is robust and appropriately designed to deal with an incident in the region. Rob James, Regional Director of OSRL said in August 2011:

"We continually review and assess oil spill plans in challenging environments across the globe. We are satisfied that Cairn’s response plan represents international best practice and is appropriate for its current campaign, which is being carried out among some of the most stringent regulations worldwide." [2]

1.7 The oil spill plan is reviewed on a regular basis to ensure it reflects current expertise and in field optimisation of available oil spill equipment, vessels and capping devices.

Shareholder dialogue

2.0 As part our investor relations activity, we have regular dialogue with our shareholders. They are, wherever we operate, fully aware of our robust preventative measures and of our comprehensive emergency planning and response system in Greenland and our overall approach to safety. We also respond routinely to queries regarding our Corporate Responsibility position and performance to various investing institutions and their advisors. Our annual Corporate Responsibility report is subject to third party audit and validation before publication. Our latest annual Corporate Responsibility report can be found here: http://www.cairnenergy.com/files/reports/responsibility/cr2010/2010_cr_report.pdf

2.1 Cairn also has the appropriate funding in place to satisfy the stringent Greenland regulations and to meet the licence requirements. It is a regulatory requirement to have a measured response to a number of possible well control incidents. At the most extreme case, this includes an oil spill response plan.

Lessons learned from Gulf of Mexico

3.0 Oil spill is an inherent hazard across the industry and prevention must remain the main control. However, this is not to underplay the importance of response capability.

3.1 It is important to recognise that there is no single comprehensive method of clean up of oil spill in any location in the world and a variety of methods and strategies must be deployed depending on circumstances.

3.2 Every well is individual and has different properties. The geological formations offshore Greenland are very different to those in the Gulf of Mexico, therefore the two are not directly comparable in that respect. We have to be careful to develop our oil spill contingency and emergency response plans to the local circumstances wherever it may be.

3.3 We believe we have put in place a thorough, robust and appropriate contingency plan, which has been approved by the Greenland authorities as well as third parties. It has been subjected to Government approved exercises throughout the drilling season. This plan intended to ensure that any lessons learnt from the Gulf of Mexico incident were captured.

3.4 At this stage, there has been no commercial discovery of hydrocarbons offshore Greenland. The Greenland Government is satisfied with the modelling as are the third parties who have revie wed the plan.

We have been very happy to provide both oral and written evidence to the Committee in the course of its inquiry. If you have any further questions, please do contact us and we shall provide additional information, if we can.

16 March 2012

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[1] http://www.cairnenergy.com/files/pdf/greenland/150811release.pdf

[2] http://www.cairnenergy.com/files/pdf/greenland/150811release.pdf