Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Developing strategies to reduce and mitigate emissions from operations (Scope 1 and Scope 2 emissions) in the build-up to the next drilling campaign.
• Undertaking detailed environmental impact assessments and baseline studies using industry specialists. Mitigation plans are in place including oil response training for all relevant personnel.

Social Achievements

• Engaging with key stakeholders and incorporating their feedback into the Board’s main strategic decisions.
• Representing the interests of the Falkland Islands community, the Falkland Islands Government, Department of Minerals and environmental groups.
• Fostering relationships with other Falkland Islands operating companies and engaging with the government on petroleum policy development.
• Providing support to environmental groups for base-line studies with the objective of minimising impact on the natural environment.
• Developing wider relationships with the academic community; providing data and mentoring students at various British universities.

Governance Achievements

• Following the QCA Corporate Governance Code.
• Maintaining governance structures and processes in line with its corporate culture and appropriate to its size and complexity.
• Ensuring fair and responsible remuneration for all employees.

Climate Goals & Targets

Environmental Challenges

• Slow progress in securing funding for the next phase of operations due to industry capital allocation constraints and the impact of the global Covid-19 pandemic.
• Fall in oil prices below $30 per barrel.
• Potential disruption to business and loss of corporate knowledge due to reliance on a small number of in-house personnel.
• Risk of Falkland Islands Government not granting an extension to the current license period.

Mitigation Strategies

• Maintaining strict financial discipline with low overhead and targeting a 25% reduction in Sterling expenditures during 2020.
• Employing experienced drilling management teams and putting in place detailed risk assessments and mitigation plans, along with emergency response exercises.
• Having service contracts with key employees that provide notice periods and a wide network of experienced contractors.
• Intending to seek an extension to the current license term based on recent licence renewals by other operators in the region.

Supply Chain Management

Climate-Related Risks & Opportunities

Transition Risks

• Government legislation in response to global carbon emission reduction targets

Reporting Standards

Frameworks Used: QCA Corporate Governance Code

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environmental Impact
• Stakeholder Engagement
• Ethical and Transparent Operations
• Corporate Governance

Environmental Achievements

• Darwin development would have a lower carbon signature than many oil developments around the world; dry gas would be re-injected back into the reservoir, resulting in no routine flaring.

Social Achievements

• Engaged with key stakeholders (shareholders, host governments, communities, employees, partners) and incorporated their feedback into strategic decisions; supported environmental groups for baseline studies to minimize environmental impact; fostered relationships with other Falkland Islands operating companies and engaged with the government on petroleum policy.

Governance Achievements

• Followed the QCA corporate governance code; maintained a strong control on costs; implemented significant salary reductions in 2019 and maintained them since; regular board meetings with timely information provided to directors; qualifying indemnity insurance provided to directors.

Climate Goals & Targets

Environmental Challenges

• Sub-surface risk inherent in oil and gas exploration; health and safety risks in a remote, offshore environment; environmental risks to wildlife and plant life; climate change risks and potential restrictions or moratoriums; financial risk (access to capital); energy market volatility; political risk (Falkland Islands sovereignty); dependence on key personnel; reliance on third parties.

Mitigation Strategies

• Experienced subsurface team and industry experts; detailed risk assessments and mitigation plans, emergency response exercises; detailed environmental impact assessments and baseline studies; Darwin development designed for low carbon intensity; fundraisings in 2022 and early 2023; robust financial controls, low overhead, no debt; measures in place to reward and retain key individuals; oil industry’s global nature allows for sourcing services, people, and equipment from multiple locations.

Supply Chain Management

Climate-Related Risks & Opportunities

Transition Risks

• Restrictions or moratoriums in response to carbon emission reduction targets

Opportunities

• Darwin’s relatively small environmental footprint can play a role in the delicate balance between energy security and the transition to renewable energy sources

Reporting Standards

Frameworks Used: QCA Corporate Governance Code