Cairn Energy Commences Injunction Proceedings Following Greenpeace Action

To ensure the safety of those involved in its operations, Cairn and its drilling contractor have commenced injunction proceedings in The Netherlands, against Greenpeace and the owners of the MS Esperanza and the MS Arctic Sunrise. Cairn is requesting an order from the court requiring Greenpeace and the vessel owners to refrain from future disruption of Cairn’s lawful operations offshore Greenland.

Cairn respects the rights of individuals and organisations to express their views in a safe and peaceful manner but cannot allow any action that poses a potential threat to the safety of our employees or the protesters involved.

The ‘Leiv Eiriksson’, a fifth generation dynamically positioned semi-submersible is taking part in Cairn’s 2011 exploration programme offshore Greenland, where the Company is operating at the invitation of the Greenland Government.

The other vessel, the ‘Ocean Rig Corcovado,’ is a ‘state-of-the-art’ high efficiency, sixth generation dynamically positioned drillship. Both rigs are designed and equipped for working in harsh environments.

Cairn successfully drilled three wells and acquired 15,000km of seismic offshore Greenland in 2010 and all operations were carried out safely.

Wherever it is active, Cairn seeks to operate in a safe and prudent manner. The Greenland Bureau of Minerals and Petroleum has established some of the most stringent operating regulations anywhere globally, which mirror those applied in the Norwegian North Sea.

Cairn and the Environment – Greenland

The biodiversity and environment offshore Greenland mean that Cairn has a particular responsibility to ensure its operations do not present unnecessary risks. The 2010 drilling campaign offshore was carried out with no environmental incidents. For the planned 2011 exploration programme, Cairn has contracted 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 to the marine environment.

Current research suggests that noise levels caused by drilling are not believed to be high enough to cause harm to marine life. However, marine mammal observers will be placed on Cairn’s survey vessels and at times on the drilling vessels. In addition, fishery liaison officers will be hired to minimise any impact of the drilling activities on local fishing activities. Cairn agreed in 2010 to co-operate 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 will be routed to take into account seabird nesting grounds.

There were no environmental incidents during the 2008 and 2009 survey activities offshore Greenland, or during the 2010 drilling campaign.

As part of its licence agreements, Cairn has committed $4.5 million towards environmental research in Greenland.

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. The programme Cairn put in place for its 2010 operations include:

contracting two state state-of-the-art, ‘dynamically positioned’ vessels to explore together, thereby allowing the quick drilling of a relief well, if necessary

Designing the drilling schedule so that only one rig will enter a hydrocarbon-bearing section at any given time

a well design with primary and secondary barriers to minimise the possibility of an uncontrolled release of hydrocarbons, which has been reviewed by an independent external expert (the ‘well examiner’) in accordance with North Sea practice

fully testing the blow-out prevention equipment, including a mechanical test by independent authorities, prior to operations commencing, and subsequently testing the equipment fortnightly.

the blow-out preventer being used has two shear rams; this can be remotely activated and should the blow-out preventer fail, each vessel can use a remotely operated vehicle to close the well

hiring a team who have a combined experience of more than 1,000 years of working on successful oil exploration campaigns in challenging environments

Working closely with the Greenland authorities, Cairn has developed an extensive oil spill response plan and tiered response capability. The plan includes predictive modelling on a range of spill scenarios and different response techniques to be used. Substantial levels of equipment to manage an oil spill are available onboard support and standby vessels and onshore Greenland. In addition, international response personnel and equipment are available via Oil Spill Response Ltd, which is able to access additional resources through co-operation agreements with the Global Response Network (oil spill responders) and, if necessary, under international governmental agreements.