APPROVAL OF PERMANENT PLUG AND ABANDONMENT OF 4 (FOUR) WELLS IN ACCORDANCE WITH SECTION 15 OF LICENCES 2008/10, 2005/06 AND 2002/15

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1 Aatsitassanut Ikummatissanullu Pisortaqarfik Råstofdirektoratet Bureau of Minerals and Petroleum Capricorn Greenland Exploration A/S 50 Lothian Road Edinburgh, Scotland EH3 9BY UK APPROVAL OF PERMANENT PLUG AND ABANDONMENT OF 4 (FOUR) WELLS IN ACCORDANCE WITH SECTION 15 OF LICENCES 2008/10, 2005/06 AND 2002/15 12 July 2013 Journal No Doc. No P. O. Box Nuuk Tel. (+299) Fax (+299) bmp@nanoq.gl 1/51

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3 Table of Contents 1 The Application Application documents Project description The legal foundation for approval Permanent plug and abandonment project Offshore activities Ports and onshore activities Other activities Personnel conditions and working hours Authorisation terms for drilling unit and aircrafts Vessels in general Drilling unit Aircraft operations P&A locations Well operations Well operations Abandonment/suspension plans Well barrier Handling and use of chemicals Storage, handling and use of explosives Licensee s environmental and management systems, including safety, health, security and contingency plans The roles of the authorities in the Licensee s emergency response Safety and health plans Emergency response and contingency plans Emergency response for drilling unit and for major accidents Ice management Emergency response for oil spill SAR emergency response Competencies, qualifications, training and drills Socially sustainable development Environment Environmental background studies Discharges and emissions Waste management Chemicals Environmental monitoring Registration, verification, checks and reporting Special tax reporting requirements for the Licensee, technical operators and sub-suppliers with no residence in Greenland Accident reporting Other registration and reporting Financial security Guarantees Insurance conditions Approval in pursuance of section 15 for licences no. 2008/10, 2005/06 and 2002/ /51

4 Annex 1 - Map of licence area and drilling locations Annex 2 List of chemicals /51

5 ABBREVIATIONS AND DEFINITIONS Abbreviations ALARP: As low as reasonably practicable : reducing identified and assessed risks to a level that is as low as reasonably practicable. bbl (Blue barrel) oil barrel containing 42 gallons of oil Drilling Guidelines: Greenland Bureau of Minerals and Petroleum, Exploration Drilling Guidelines. EEZ (Exclusive Economic Zone) According to the Law of the Sea, an EEZ is a marine area within which a coastal state has exclusive rights over the exploration of the resources of the sea, seabed and subsurface. GREENPOS (Greenland Positions Reporting system): GREENPOS is a reporting system and is part of safety at sea. HAZID: (Hazardous Identification): A systematic method of identifying risks in connection with a planned activity. Having identified risks, corrective measures to reduce the risks to an acceptable level are reviewed. HAZID is primarily used at a high organisation level in the project phase as part of a company s control tools. HAZOP (Hazardous Operations): A systematic method of identifying risks in connection with a planned operation or a sub-task. Having identified risks, corrective measures to reduce the risks to an acceptable level are reviewed. HAZOP is primarily used at a lower organisational level as part of a company s control tools in connection with performance of specific tasks. HAZID/HAZOP: Review meeting with all of the most important technical operators and Licensees, at which risks are identified for all planned operations. Mitigating initiatives are implemented to reduce or eliminate the risks identified. NORSOK: Norwegian standards. NORSOK D-001: NORSOK Standard D-001, July 1998, Drilling Facilities. NORSOK D-010: NORSOK Standard D-010, August 2013, Well Integrity in Drilling and Well operations (Rev. 4). NORSOK R-003: NORSOK Standard R-003, July 2004, Safe use of lifting equipment. NORSOK S-001: NORSOK Standard S-001, February 2008, Technical Safety. NORSOK S-003: NORSOK Standard S-003, December 2005, Environmental Care. NORSOK Z-013: NORSOK Standard Z-013, Oct. 2010, Risk and emergency preparedness. OIM: (Offshore Installation Manager): Senior manager on an offshore platform (drilling or production rig). The position requires registration in an Offshore Safety Division for health and safety, and it means responsibility for the health, well-being and safety of everyone on board. OSR: (Oil Spill Response) Oil Spill Response Company PVT: (Pressure, Volume, Temperature): Pressure, volume, temperature. SAR: Search and rescue services TD: Total Depth. 5/51

6 Definitions Blowout: Uncontrolled leak of hydrocarbons in the subsurface or over the seabed. Drilling unit/vessel: Drilling ship used in this project. Certificates: Certificates mean the vessel s classification certificates, national certificates and other certificates. Greenlandic enterprise: An enterprise which is domiciled in Greenland and which through the exertion of commercial activities has real attachment to Greenland. Hot bedding: Hot bedding means that more than one person takes turns to sleep in the same bunk/bed. P&A programme/operation: Plug and abandonment. Clean certificates: Clean certificates means that the ship s certificates are valid and not encumbered with conditions/recommendations from the classification society or relevant authority at the time the ship is navigating the Greenland Exclusive Economic Zone (EEZ). Licensee: The Licensee is the group of companies described in section 1.2. Technical operator: A technical operator is defined as an enterprise which, on behalf of the Licensee, conducts exploration (Fugro Synergy) and the enterprises which are responsible for the daily operation of an offshore installation, or a ship etc. (support ship, chartered aircraft to carry personnel and equipment etc.). Sub-supplier: A sub-supplier is defined as an enterprise which supplies goods and services to the project (hotels, suppliers of fuel and food, port operators etc.) 6/51

7 1 The Application 1.1 Application documents On 8 February 2013, the Bureau of Minerals and Petroleum (BMP) received an application submitted by Capricorn Greenland Exploration A/S concerning approval of permanent plug and abandonment of 4 (four) wells in accordance with section 15 of licenses 2008/10, 2005/06 and 2002/15. As part of the application; an Environmental and Ecosystem Review has been received 25 April Reference is also made to previous Approvals for Exploration Drilling issued June and August 2010 and May For this letter of approval, issued by the BMP, the English version shall apply. 1.2 Project description Timetable Capricorn Greenland Exploration A/S, a subsidiary of Cairn Energy Plc., has submitted an application to permanent plug and abandonment of four (4) wells. Activities may be carried out from 1 August The timing of operations in the northern regions is dependent on ice conditions. Currently the drilling vessel is expected to enter into Greenlandic waters close to 9 th August The permanent plug and abandonment operation is estimated to be performed over a 30-day period. Hence the operations are expected to end by mid-september 2013 and then demobilize in Aberdeen, Scotland. Any changes to the timetable are to be regulated by the provision in section The legal foundation for approval The Exclusive Licences for exploration for and exploitation of hydrocarbons under which the permanent plug and abandon operation have been applied for are listed below. The operator for the individual licences is marked with * in the tables. Licence no. 2002/15 is an exclusive licence for exploration for and exploitation of hydrocarbons in an offshore area north-west of Nuuk, West Greenland. The licensee is composed of the following companies, jointly, which hold the percentage shares indicated: Licence Licensee Share (%) 2002/15 (Atammik Capricorn Greenland Exploration A/S* 87.5 NUNAOIL A/S /51

8 Licence no. 2005/06 is an exclusive licence for exploration for and exploitation of hydrocarbons in an offshore area in West Greenland. The licensee is composed of the following companies, jointly, which hold the percentage shares indicated: Licence Licensee Share (%) 2005/06 (Lady Franklin) Capricorn Greenland Exploration A/S* 87.5 NUNAOIL A/S 12.5 Licence no. 2008/10 is an exclusive licence for exploration for and exploitation of hydrocarbons in an offshore area in West Greenland. The licensee is composed of the following companies, jointly, which hold the percentage shares indicated: Licence Licensee Share (%) 2008/10 (Sigguk) Capricorn Greenland Exploration A/S* 87.5 NUNAOIL A/S 12.5 Capricorn Greenland Exploration A/S is operator in all the above Licences. NUNAOIL A/S is a participant in the licence pursuant to the provision of section 8(2) of the previously applying Mineral Resources Act. NUNAOIL A/S is participating in the licence with a share of 12.5% and has rights and obligations with regard to its share. In accordance with the cooperation agreement, NUNAOIL A/S is a carried partner in the exploration phase. This means costs, expenditures, obligations and liability for damages pertaining to the activities covered by the licence shall be paid by the other parties. Approval of the permanent plug and abandonment programme will be in accordance with Greenland Parliament Act no. 7 of 7 December 2009 on mineral resources and mineral resource activities, as amended by Greenland Parliament Act no. 26 of 18 December 2012, (the Mineral Resources Act). The activities covered by licences pursuant to the Mineral Resources Act may not be carried out unless Naalakkersuisut has previously approved the activities and the associated activities, see section 86 of the Mineral Resources Act. Approval pursuant to section 86 shall also be in accordance with the terms stipulated in the licences. The licences were notified on standard terms. Section 15 of the licence states that the licensee shall submit activity plans for approval by the BMP, including exploration plans; health, safety and environment plans etc. The foundation for preparation of the permanent plug and abandonment programme includes BMP s Drilling Guidelines, BMP May 2011, which states a number of requirements for documentation and reporting to be followed during implementation of the permanent plug and abandonment programme. NORSOK standards shall be adhered to during preparation and completion of the perma- 8/51

9 nent plug and abandonment programme; according to the Exploration Drilling Guidelines. Section 79 of the Mineral Resources Act states that safety and health work should be organised and carried out according to the ALARP principle, which is the internationally recognised and applied principle for the offshore sector. Operationally, the requirement to reduce the risks in accordance with the ALARP principle primarily means that all specific requirements and instructions, as well as threshold values in legislation and regulations, shall be unconditionally complied with. Next, the enterprises should assess whether it is possible to eliminate completely or further reduce the safety and health risks. The ALARP principle means that the enterprises shall endeavour to reduce the safety and health risks as much as is reasonably practicable at any time in accordance with technical and social developments. According to the Mineral Resources Act, the Licensees obligated to ensure that the safety and health risks associated with the construction, design and equipment are reduced as much as possible, see section 79(1) of the Mineral Resources Act. The Government of Greenland has approved EIAs for Cairn Energy s drilling operations in 2010 and 2011, as required in section 73(2) of the Mineral Resources Act. The EIAs related to the 2010 and 2011 drilling operations include the Plug and Abandonment activities. The Environmental Agency for the Mineral Resources Activities and DCE has assessed; that potential environmental impacts of the proposed 2013 Plug and Abandonment activities will not go beyond those described in the EIAs prepared for the activities in 2010 and Based on the submitted Environmental and Ecosystem review it is the Environmental Agency for the Mineral Resources Activities and DCE s assessment that there should not be required further environmental impact assessments for the 2013 Permanent Plug and Abandonment operations. Approval of the drilling programme under application therefore requires that an environmental assessment is undertaken and an EIA report is approved by Naalakkersuisut, see section 73(2) of the Mineral Resources Act. Furthermore, the parts of the Marine Environment Act which have been brought into force for Greenland by Royal Decree no of 22 October 2004 apply for the ships and drilling rigs taking part in the drilling programme. The Marine Environment Act implements a number of global conventions, primarily the MAR- POL Convention (International Convention for the Prevention of Pollution from Ships), and the LONDON Dumping Convention. According to Decree no.1035 of 22 October 2004 on entry into force for Greenland of the Protection of the Marine Environment Act, authority and administration pursuant to the Marine Environment Act is the responsibility of Naalakkersuisut, with respect to activi- 9/51

10 ties on the Greenland continental shelf covered by licences notified pursuant to the Mineral Resources Act. The Government of Greenland has approved SIAs for Cairn Energy s drilling operations in 2010 and 2011, as required in section 76(1) of the Mineral Resources Act. The SIAs related to the 2010 and 2011 drilling operations includes the Plug and Abandonment activities. It is the assessment of the Ministry of Industry and Mineral Resources that the Cairn Energy activities in 2013 related to permanent abandonment of relevant wells with reference to the licence areas 2008/10, 2005/06 and 2002/15 are considered not to have a significant impact on the social conditions. Approval of the activities therefore does not requires that a social impact assessment (SIA) is carried out and approved as stipulated in section 76 of the Mineral Resources Act. Even though a SIA for these specific activities is not required, the socioeconomic related requirements as described in section 8.0 (socially sustainable development) are required. The company shall keep itself informed and updated on any amendments to acts, regulations, etc., which may occur in the period of implementation of the activities dealt with in this approval. BMP requires well-operations in connection with the P&A programme in 2013 to be planned and executed in accordance with the Offshore North Sea Standards for similar activities. 2 Permanent plug and abandonment project Introduction The Licensee has applied for permanent plug and abandonment operation from early August and is expected to last a month. The plan is to plug and abandon four (4) wells permanent on depths up to approximately 1000m and 350m below wellhead. List of involved units and ships which the Licensee has applied to use in this project: Name of vessel Fugro Synergy Shipping company Helideck Primary task Fugro Subsea Services LTD, Aberdeen, Scotland Yes, but not approved by Danish Aviation Authorities Plug and Abandonment Other vessels may be used in connection with the project following approval of them by the BMP. 10/51

11 Plug and Abandonment vessel Fugro Synergy is a multi-purpose vessel for drilling and subsea well services built in 2008 that uses DP2 class (dynamic positioning) system. The drilling vessel can accommodate a crew number of 76 persons. Logistics Crew Crew rotation frequency is planned for every two weeks and will take place from Nuuk and Aasiaat. Connection flights will take place between Edinburgh and Kangerlussuaq on chartered flights and onwards with Air Greenland to the destination airport. Crew change will not include helicopters; instead the vessel estimates entering the harbour every two weeks. Equipment During each two week period of the operation; the drilling vessel may require Nuuk or Aasiaat for temporary storage of equipment and the removed well equipment. However, all materials shall be removed from Greenland by the end of operation. Royal Arctic Line will be the port agent for the Licensee in Greenland. Waste A Waste Management Plan has been prepared for Fugro Synergy that complies with MARPOL 73/78 Annex V (garbage) and Annex VI (Air Pollution). Wastewater will be discharged into the sea if it complies with the approved threshold. Waste that is not disposed of at sea and chosen for offloads in Nuuk, Greenland; is subject to suitable facilities and capacity and requires that an agreement with relevant authorities has been agreed to. Representation and staff in Greenland The actual programme will be managed from the Capricorn Greenland Exploration A/S s office in Edinburgh, but also by representation in Nuuk. Contingency plans The Emergency Response (ER) 'in country' command centre is based in Nuuk with the Aberdeen based call centre providing the initial incident management 11/51

12 contact streaming provisions through to the Edinburgh ERG Operational Command centre and duty staff. Hydrocarbon horizons are not present in these wells and not expected to be uncovered during the P&A process either. The only 'Oil Spill' possibility is from a potential vessel incident. Therefore the Fugro Synergy will carry Oil Spill recovery equipment to meet such an incident as required by MARPOL. 2.1 Offshore activities The Licensee s plug and abandonment project can be divided into a number of sub elements: Offshore activities Ports and onshore activities Personnel conditions and working hours Other activities Examples of offshore activities include: Plug and Abandonment of 4 wells Ice management Safety services Medical services Plug and abandonment operations The permanent plug and abandonment operations constitute four wellhead closures including cutting and pulling of casing strings. As part of the programme the annulus sections will be checked for pressure build up by punching holes in the casing string by means of perforating. Cement plugs in the top holes will be installed as per NORSOK D-010 requirements. Ice management A subcontractor is responsible for 24 hour coverage during the entire campaign and constitutes two ice observers. However, the actual connection time to the well is planned to a minimal due to the nature of the P&A operations. Besides, the vessel will be equipped with the required equipment to gather relevant ice information. There are no plans for ice management support vessels. Medical Services Offshore the vessel is manned by a Doctor and a Medic that provides first aid and accident treatment. In case onshore treatment is required; the Licensee has entered into an agreement with the health services in Greenland providing medical treatment to the extent possible at the relevant time and place. Evacuee/s is then managed by the established Greenland process. 12/51

13 Requirements for medical care and medical treatment Reporting of industrial injuries shall be in accordance with section Ports and onshore activities The Licensee has no requirement for a supply base other than to use Nuuk and/or Aasiaat for the temporary storage of recovered equipment plus the top up of fuel, water and ships provisions as required. All onshore facilities are covered by the relevant regulations and requirements applicable in Greenland. The BMP may, however, stipulate further requirements for onshore activities. In the event that temporary storage of materials and equipment are required outside ordinary port facilities; the following shall apply. Requirements for ports and storage facilities If areas for storage areas are used outside the port, the Licensee shall ensure that the area in question is suitable for storing the relevant material and equipment, and the Licensee shall apply for permission to use the area in question for storage purposes (area allocation) The Licensee shall ensure that dangerous goods are stored in a manner which is appropriate in terms of the environment, as well as human health and safety Furthermore, the Licensee is responsible for cleaning up and remediating the area when storing goods. This also applies to transport between the port and any storage facility outside the port In the event that materials or equipment fall into the port basin in connection with loading or pilotage, the Licensee shall report this to the BMP immediately, and commence work to recover the lost materials and equipment Recovery of materials or equipment may only take place following careful analysis and assessment of the danger and risk involved in the work. 2.3 Other activities Aircraft activity The Licensee is responsible for ensuring that all activities carried out with reference to this approval letter are in compliance with Greenlandic, Danish as well as international legislation for this type of operation. 13/51

14 Requirements for other activities The Licensee is responsible for transport of all personnel between Scotland and Greenland. 2.4 Personnel conditions and working hours Determination of working hours varies from one group of employees to the other. When planning work hours on offshore units this shall be in accordance with Directive 2003/88/EC of the European Parliament and of the Council of 4 November 2003 concerning certain aspects of the organisation of working time. Requirements for personnel conditions and working hours Working hours shall as a general rule, be arranged so that employees get a resting period of at least 11 consecutive hours per 24 hour period Working hours on board the drilling unit may be no more than 12 hours per shift. Exceptionally overtime of four hours per day is permitted. After this, personnel who have worked for 16 hours shall have a rest period of no less than eight hours In the event that a person has worked for 16 successive hours on a shift, and no replacement is available on board for this position, operations shall be stopped until the person has had the required rest period of eight hours The Licensee shall record the working hours of individual persons on the vessel Normal rotation of work shall be 14 days offshore followed by 14 days off ashore. For personnel resident outside Greenland, work periods of up to 28 days on the vessel are permitted, followed by a subsequent period off of equal length All personnel are entitled to be paid during waiting periods due to unpredictable events which cause delays in connection with transportation between place of residence and place of work Through audit and inspection, the Licensee shall ensure that personnel receive the free time to which they are entitled when they have time off outside the vessel and in the operation The drilling unit shall have an adequate number of cabins. Each cabin must provide accommodation for no more than two persons. Sleeping hours must be regulated so that only one person at a time sleeps in the relevant cabin. This means that each person is entitled to their own cabin/bed in their rest period between shifts and that the other person with whom they share a cabin must be on shift while the other is resting. 14/51

15 2.4.9 Hot bedding is not permitted. This means that a person may not take over another s bed immediately after this person has gone on shift Only persons of the same sex are allowed to be allocated the same cabin. 3 Authorisation terms for drilling unit and aircrafts Drilling unit and aircraft included in the application should, on the basis of the acceptance criteria chosen, meet the requirements necessary to ensure that the safety, health and environment risks associated with the P&A programme under application are reduced as much as possible in the context of an overall project assessment in accordance with ALARP. 3.1 Vessels in general Requirements General requirements for the vessel and aircrafts referred to above include suitability for their purposes in question and compliance with international requirements Before the drilling unit is put into operation on the Greenland continental shelf, the Licensee shall submit documentation prepared by an independent third party. It shall be documented that all relevant requirements have been complied with in full and as a minimum cover; vessel certificates from a recognised classification society; documentation of independent verification of the equipment on the drilling rig, see section 83 of the Mineral Resources Act on performance of activities covered by a licence in accordance with acknowledged best international practices in the area under similar conditions; documentation that the drilling installation are completely safe, and; a bridging document which describes duties and responsibilities in connection with emergency response plans for cohesion between the drilling unit and the safety and management control systems of the Licensee. All documents on which the independent third party has based its approval shall also be enclosed and submitted to the BMP. The Licensee is obligated to update the bridging document, in the event of changes to the emergency response plans of the drilling units. 15/51

16 3.2 Drilling unit The Licensee has applied for approval to use: The drill ship and well service vessel Fugro Synergy, operated by Fugro Subsea Services LTD. According to the Mineral Resources Act, the Licensee is obligated to ensure that the safety and health risks associated with the construction, design and equipment of the mobile drilling unit are reduced as much as possible, see section 79(1) of the Mineral Resources Act. The following documents have been received: - Certificate ID Number issued by Det Norske Veritas, validity until Fugro Synergy Vessel Specifications, Standards, Statutory Requirements - Fugro Synergy UK Safety Case, submission The Fugro Synergy UK Safety Case was issued by the UK Health and Safety Executive but is currently being updated to reflect recent vessel upgrades and changes within Fugro documents and organisation. The latest revision of the UK Safety Case is expected to be finalised in July, and shall be presented to BMP for approval prior to commencement of operations in Greenland. Prior to any P&A activity; Licensee shall forward documentation that, all party/technical operators health, safety, environment and management systems comply to best international standards and have been updated to fit Greenlandic conditions regarding project or services required and that each participating party is familiar with their respective area of responsibility (i.e. a bridging document). The bridging document shall be updated at all times; covering all conditions of the operation, filling any gap between sub suppliers/technical operators system and plans, thereby ensuring the entire project functions as one system and one plan. The BMP has received bridging documents from the Licensee describing relations between the individual companies health, safety, environment and management systems, see section 6. The BMP has reviewed the bridging documents from the Licensee and the sub suppliers/technical operators and find them suitable for the P&A project activities. The parties whose systems and contingency plans that shall be cohesive with each other through Licensee s bridging document are: Cairn Fugro Drilling unit (Fugro Synergy) Air Greenland 16/51

17 Requirements for drilling unit An up-to-date and approved health and safety report ( Acknowledgement of Compliance (AoC) from Norway or a Safety Case from the United Kingdom) or a similar health and safety report for the drilling unit before the activities may commence After approval of an AoC or a Safety Case, application for further approval of any physical and operational changes is required before implementation of the changes, if such changes are of significance to health and safety or if such changes are significant in scope. The application for approval of changes must be accompanied by an updated safety and health report The certificates of the drilling unit must be without comments or remarks As supervisory authority, the BMP can conduct an inspection of the drilling unit in order to assess whether it is necessary to require that changes be made to reduce safety and health risks according to the ALARP principle The Licensee shall submit navigation plans to the BMP before the vessel enters Greenland waters. The navigation plan shall include the name of the vessel, shipping company, when the vessel is expected to enter Greenland waters, and when it is expected to leave Greenland waters The drilling unit shall register with KYSTKONTROL and must have equipment fitted to link to the VMS (Vessel Monitoring System). Furthermore, the drilling unit shall be equipped with LRIT (Long Range Identification and Tracking System). The BMP will stipulate detailed procedures on the issuance and content of the notifications to be submitted to KYSTKONTROL. The Licensee shall ensure that this happens before the vessel is in Greenlandic waters The Licensee shall ensure that a safety zone of minimum 500 meters radius is established and published at each well location prior to commencement of any operations. The safety zone shall be established in cooperation with Greenlandic authorities. 3.3 Aircraft operations The operation only use fixed wing transportation of personnel from Edinburgh, Scotland to respective port cities Nuuk and Aasiaat in Greenland. Requirements for aircraft operations All aircraft operations shall at all times comply with current international and national regulations. 17/51

18 4 P&A locations The Operator has applied for permission for P&A of the following exploration wells: Licence block Well name UTM coordinates Water depth (m) Atammik AT7-A m E; m N 909 Sigguk T m E; m N 491,3 Sigguk Alpha m E; m N 317,5 Lady Franklin LF m E; m N Well operations Well operations in this chapter complies with all work conducted on board the drilling unit, directly related to the P&A of wells. BMP have received the following detailed P&A programmes: Alpha 1S1 ED/GRN/2008/10/DRL/APE/13/956 T8-1 - ED/GRN/2008/10/DRL/APE/13/957 LF7-1 ED/GRN/2005/06/DRL/APE/13/959 AT7-1 ED/GRN/2005/15/DRL/APE/13/958 P&A Contingency: ED/GRN/GEN/DRL/APE/13/983 In the period up to commencement of P&A operations, the Licensee and their technical operators will review the operation plans. This review could lead to changes that will be incorporated into the final P&A programme. 5.1 Well operations Planning and execution of the P&A operation shall be in accordance with the terms and requirements under NORSOK D-010 and in accordance with the following requirements The P&A operation may not be commenced until the BMP has inspected the drilling unit as well as the planned P&A operation at P&A location For all planned operations, the plan shall include the time it will take to install an extra barrier in the wellbore, in the event the well will potentially have to be shut down temporarily Before the P&A operation can be commenced, the Licensee must present a final, detailed P&A programme that describes all the changes between the previous submitted programme, and the final changes which have been made by the Licensee and their technical operators. The P&A programme shall be verified by an independent third party. 18/51

19 Documentation of this review as well as a copy of the final P&A programme shall be submitted to the BMP before operations commences A detailed programme, descriptions of procedures and risk assessments for each planned P&A shall be prepared and verified by an independent third party. Documentation of this verification as well as copies of the detailed P&A programme and the procedures shall be submitted to the BMP. The programmes and procedures shall be verified by use of HAZID/HAZOP methodology and log systems, and shall involve the selected technical operators selected for the specific areas of work tasks. BMP shall be invited to participate in the planned HAZID/HAZOP s for the project BMP requires meticulous planning and description of the P&A operations in the form of detailed procedures. The procedures shall be reviewed and verified by the executing P&A companies together with the Licensee, before P&A work can be commenced The Licensee shall comply with the procedures and standards of the technical operators. The technical operators may suspend work if they deem the planned activity may pose an unacceptable risk for safety, health and the environment During the operations on board the drilling unit, activity plans shall be prepared daily for the following 24-hours. These plans shall identify necessary resources, and verify the availability of these resources to carry out the operations. The plans shall also take into account the current emergency response status, the contingency plans and the weather forecast The Licensee shall conduct inspections, supervision and verifications of the activity, at the premises of the Licensee and those of their technical operators, and on installations offshore and onshore The P&A operations shall adhere to the relevant health, safety and contingency plans approved by the BMP The most recent and most detailed programmes for the operations shall be presented to and approved by the BMP before P&A can be commenced The BMP may at any time impose further requirements to the P&A operations, if deemed necessary. The Licensee shall execute the requirements imposed within a reasonable time frame. 19/51

20 5.2 Abandonment/suspension plans The BMP has chosen to distinguish between 3 types of shutdown in this approval: 1) Emergency suspension (not planned) 2) Temporary abandonment (planned) 3) Permanent abandonment (planned) Temporary and permanent abandonment requires a plan, which must be submitted to the BMP before the Licensee commences the abandonment. Emergency suspension may only take place in case of an emergency where it is not possible to carry out a planned temporary abandonment Emergency suspension The emergency suspension is only an option in events of an acute, external threat or a drilling unit failure meaning the correct P&A location has to be abandoned. Requirements for emergency suspension of a well The Licensee may only carry out an emergency suspension if a temporary or permanent abandonment is not possible When performing an emergency well suspension, the Licensee shall comply with the requirements in NORSOK D-010, section Suspension and the below requirements. Additional requirements The Licensee shall ensure that, as a minimum, a system is in place to shut down the well at only a few seconds warning, so that possible leaks of oil and gas from the wellbore are limited as far as possible There must be a barrier system in place, to the extent possible, which can seal off the well If time allows for it, a mechanical plug shall be installed in the casing below the seabed If an emergency suspension has commenced, BMP shall be notified as soon as possible. The Licensee shall also submit plans to the BMP which describe how the well will be restored to normal state and commence normal operation after an emergency suspension. The plans shall be approved by the BMP before the well is reopened Temporary well abandonment When a well is temporarily abandoned, the Licensee shall submit a substantiated application stating how and when the well will be abandoned permanently or when further P&A operation in the well is expected to be resumed. This application shall also contain a description of responsibility and supervision conditions during the temporary abandonment. 20/51

21 Requirements for temporary well abandonment When performing a temporary well abandonment, the Licensee shall comply with the requirements in NORSOK D-010, section Temporary abandonment and the below requirements The Licensee shall submit an abandonment plan for the relevant well. The BMP shall approve the plan before it is implemented. As a minimum, but not limited to, the plan shall contain the following elements: A description of the construction of the well. A sketch, including measurements, showing where the Licensee plans to place mechanical plugs and cement plugs, including a description of zones to be abandoned permanently. A technical description of mechanical and cement plugs as well as other equipment involved in the abandonment including wellhead protection. A plan for reopening the well, including planned activities as well as a timetable for the reopening The Licensee must submit documentation of the effectiveness and durability of the abandonment no later than seven days after the shutdown A permanent abandonment of the well must be performed by 31 December 2013 at the latest, unless the BMP has approved an abandonment plan with a longer time frame Permanent well abandonment A well shall normally be permanently abandoned, when drilling as well as relevant logging and well testing have been completed. Requirements for permanent well shutdown When performing a permanent abandonment of a well, the Licensee shall comply with the requirements in NORSOK D-010, section Permanent abandonment and section removing equipment above seabed and the requirements below: The Licensee shall submit an abandonment plan for the specific well. The BMP shall approve the plan before commencing the work. As a minimum, but not limited to, the plan shall contain the following elements: documentation that the abandonment meets the best international standards, including an analysis of the risk of utilizing the abandonment method selected. the actual design of the well. a sketch, including measurements, showing where the Licensee will place mechanical plugs and cement plugs. A technical description of cement plugs and mechanical plugs, as well as documentation of their calculated operational life in permanently abandoned wells. 21/51

22 description of how the abandonment will be executed, including how the effectiveness of the abandonment will be verified. Furthermore, a description of the condition in which the wellhead area will be left and how the condition of the area will be checked shall be included An application for approval to terminate, close and abandon a well, as well as copies of important logs and any other relevant documentation, shall be submitted to the BMP no later than seven days before the planned commencement of abandonment work. The plan shall be approved by the BMP before work is commenced The Licensee shall submit documentation for effectiveness and durability of the abandonment no later than seven days after the abandonment is completed When P&A operations have terminated, the wellhead area shall be restored to its original condition, as far as possible. Before P&A commences, the Licensee shall therefore present documentation from the drilling area, describing the condition of the location. BMP can approve reasonable, substantiated deviations from this requirement If environmental monitoring following the abandonment of the activity shows what the BMP considers to be unacceptable high levels of contamination, the BMP may stipulate conditions for the implementation of measures to reduce this contamination, including an extension of the monitoring period, see also section 9.5. Abandonment activities shall be approved by BMP before being commencement. The BMP may in this connection stipulate further requirements. 5.3 Well barrier It is a requirement for all well operations in Greenland waters that a safety barrier is in place for all systems, equipment and designs. This barrier shall be tested and verifiable at all times. Barrier: All 4 wells have been plugged and secured with cement and mechanical plugs in 2010 and 2011 respectively. For checking any pressure in the respective annuli during the P&A operation, a packer will be installed and tested to form an isolation barrier in the well. Requirements for barrier Identification, testing and verification of barrier element throughout the whole P&A operation shall be in accordance with NORSOK D-010 and in accordance with the requirements listed below. 22/51

23 5.3.2 If an abnormal situation raises doubt about the functioning or integrity of the barrier, the P&A operations shall cease immediately and normal conditions must be restored before operations may be resumed For all planned operations, the plan shall include the time it will take to install an extra barrier (plug) in the wellbore in question if a situation occurs that requires the well to be shut down temporarily and abandoned. (T- time planning). 5.4 Handling and use of chemicals In connection with the P&A drilling operation, the Licensee has applied for approval to use a number of chemicals in the operations. These chemicals are listed in Annex 2. This chapter only concerns handling of the chemicals. Environmental approval and requirements for the chemicals themselves are given in section 9.4 Chemicals. Requirements for storing, handling and using chemicals When handling chemicals the Licensee shall comply with the requirements in NORSOK S-003, section 6.8 Handling of chemicals, as well as in compliance with the requirements stated below One or more persons shall be assigned to the chemicals storage facilities as responsible for storage security, maintenance etc The storage facilities used for storing the chemicals shall be suited and approved for the purpose Only persons with necessary training in handling chemicals may work with these Persons who work with chemicals must utilise appropriate and approved safety equipment. Equipment will be inspected before the drilling operation begins, and regularly with subsequent inspections A log must be kept of the quantities of chemicals in the storage facilities, as well as of the on-going consumption of the chemicals If the Licensee wants to make use of other chemicals than those described in the list in Annex 3, this shall be approved by the EAMRA The chemicals shall be protected against fire, theft and water damage Storage facilities which hold chemicals shall have ventilation to the outside. Storage facilities shall be approved by the BMP on an inspec- 23/51

24 tion before the P&A operation begins and continuously on later inspections The ventilation system shall be dimensioned to allow satisfactory air quality in the chemicals storage facilities. The ventilation system shall be approved by the BMP on an inspection before the P&A operation begins and continuously on later inspections An alarm shall be connected to the ventilation systems which will give a warning signal in the event of break down Spills of and accidents involving chemicals shall be reported immediately to the BMP Any movement by ship of chemicals must be in accordance with the prescribed provisions in The International Maritime Dangerous Goods code (IMDG Code) Statements shall be prepared for total imports and exports, and consumption of chemicals during the entire operation, and these must be forwarded to the BMP before 31 December Storage, handling and use of explosives The Licensee has applied for approval to carry out perforating operations in connection with the P&A operations. The explosives will be used to punch holes in the pipe for monitoring and verifying pressure conditions. The Licensee has hired Baker Hughes as the technical operator to perform the perforating operations. BMP approves the use of explosive materials by the Licensee in connection with operations executed in conjunction with the P&A programme. Requirements for storing, handling and using explosives When storing and handling explosives the Licensee shall comply with the requirements in NORSOK S-001, section 5.4.7; Storage and handling of explosives, as well as with the requirements stated below Perforation operations and handling of perforation equipment shall follow the following Baker Hughes documents: A0001-A, TCP Explosives Policies and Procedures, August 2003 GEMS , Explosives Loading and Storage Area SU A1001-A, TCP Safety and General Information, June ABD-195Rev3, Baker Explosives If the Licensee wants to import and temporarily store explosives in Greenland, this shall be in accordance with Greenland legislation and 24/51

25 approved by the BMP. This requirement applies if the explosives are to be imported to onshore areas in Greenland or temporarily stored onshore in Greenland As a general rule, all explosives shall be transported with the drilling vessel in order to prevent unnecessary transit at ports in Greenland. In connection with transhipment/pilotage, the explosives may only be stored on the quay for a maximum of two hours, unless the requirements described in section are met If the requirement in cannot be complied with, containers with the explosives shall be placed / isolated in the port area so as to avoid risk of collision etc. The distance to vehicles, buildings and other goods which are not stored in containers shall be at least 10 meters. A fire guard shall be posted in the area where the containers holding the explosives are located. The fire guard shall be comprised of at least two persons and at least one person shall keep the container under constant observation. Fire-guard personnel shall receive instructions from an explosives expert about the relevant action in the event of collision, fire or other unauthorised contact with containers holding explosive materials. The costs of these measures shall be paid by the Licensee. This shall be approved by BMP The onshore and offshore storage facilities used for storing the explosive materials shall be suited and approved for the purpose In the event of storage of explosives onshore in Greenland, specific measures are required concerning storage facilities, storage containers and security services at the storage site. When importing explosives to Greenland; the Licensee must comply with the sections in part 4 of Home Rule Statutory Order no. 14 of 21 August 2006 on explosive materials. Part 4 of this Order; deals with requirements for storage, manager in charge, and approval of explosives depots and acquiring a BMP approval Lost or missing explosives and detonators shall be notified immediately to the police and to BMP Perforating operations may only be carried out by persons with the relevant qualifications Any movement by ship of explosives must be in accordance with the prescribed provisions in the IMDG Code A statement of imports, consumption and exports of explosives and detonators shall be forwarded to the BMP before 31 December Responsibility for transport, storage, handling and use of explosives and detonators rests with the Licensee at all times. 25/51

26 6 Licensee s environmental and management systems, including safety, health, security and contingency plans The Licensee has submitted documentation for an environmental and management system in accordance with the requirements in parts 13, 14, 15 and 17 of the Mineral Resources Act. This has been found satisfactory and sufficient for the operation by the BMP. It is incumbent upon the Licensee to ensure that all employees in the project are not harmed or exposed to harmful substances. Environmental requirements can be viewed in the section on Environment and Climate. The Licensee shall ensure that all technical operators meet the requirements described in the section entitled Environment and Climate. The Licensee shall have an environmental system that takes this into account. The Licensee has a management system that covers all aspects of the project. The Licensee s safety, health, environmental, security and management systems (SHESM) represent the overall interaction between the drilling unit and all onshore activities. The Licensee has submitted documentation that SHESM meets the best international standards, and corresponds with the reality of the project. The Licensee has forwarded the following relevant SHESM documentation to the BMP: Documents from Licensee: Cairn HSE Management System CRMS/MAT/0510/13 Cairn Health, Safety, Environmental, Security and Corporate Responsibility Management Plan ED/GRN/CRP/HSP/13/1029 Cairn Emergency Response, Low Operating Activity ED/GRN/GEN/CRP/ERP/13/1016 Cairn Risk Register ED/GRN/GEN/DRL/RAT/13/984 Capricorn Fugro Bridging Document ED/GRN/CRP/BRG/13/1030 Documents from Fugro: Fugro Synergy UK Safety Case, Submission The Licensee shall ensure that the bridging documents meet the requirements in the approval and ensure that the technical operator s environmental, safety, health, security and contingency response plans, management systems comply with those of the Licensee and the requirements in this approval. 6.1 The roles of the authorities in the Licensee s emergency response According to section 80 of the Mineral Resources Act, the Greenland Government must set up an emergency response committee (hereinafter the BMP Contingency Committee ). The function of the committee is to coordinate the efforts 26/51

27 of the authorities in accident and disaster situations within the mineral resources area, including all activities in connection with oil exploration and exploitation The members of the BMP Contingency Committee supervise the measures taken by Cairn and its subsidiary company Capricorn Greenland Exploration A/S, as well as its technical operators/sub suppliers The BMP Contingency Committee consists of a chairman, a secretary and six members from the BMP, Greenland Command, the Police, the Danish Maritime Authority, the High Commission of Greenland and the Ministry of Health. The Emergency Coordinator from the Government of Greenland, National Contingency Commission, representatives from Kanukoka and the fire service has also been appointed to the BMP Contingency Committee BMP may request that a desktop exercise is carried out between the BMP Contingency Committee and the Licensee. Execution of such exercise shall be approved by the BMP before the activity is commenced The BMP Contingency Committee will coordinate the Greenlandic authorities response in the event of a major offshore incident/emergency such as, but not limited to: a) Uncontrolled emissions, spill of oil, chemicals etc. and in the event of gas leakage. b) Fire or explosion which endangers individuals, the mineral resources activity, the surrounding community or the environment. c) Fire or explosion on supply or auxiliary vessels which endangers individuals, the environment, the mineral resources activity or the surrounding community. d) Foundering of offshore installation or damage which will or can put the offshore installation partly or fully out of operation. e) Aircraft crash on or in the immediate vicinity of the mineral resources activity. f) Toxic gas incident. g) Work stoppage that endangers the mineral resources activity, the surrounding community or the environment. h) Drift ice and vessels which may endanger the mineral resources activity. i) NGO (Non-Governmental Organisations) actions Before drilling can be commenced, a communication exercise including all aspects of the operation, shall be carried out satisfactorily. As a minimum the following units shall participate in the communication exercise: - All vessels involved in the operation - Cairn s Emergency Response Group at Petrofac - Cairn s Crisis Response Team - Cairn s oil spill response, Oil Spill Response Limited 27/51

28 - All Cairn s departments in Greenland - Joint Arctic Command - BMP s Contingency Committee and Emergency Response Group Emergency exercises shall be evaluated by BMP. The BMP can, on the basis of an evaluation of the emergency drills, demand adjustments to the emergency response plan or that activities are stopped Any changes to the existing emergency response plan shall be approved by BMP. In the event of major changes, the BMP may require new emergency drills to be carried out. 6.2 Safety and health plans The Licensee s safety and health plans describe the individual work tasks and work functions, as well as the risks involved for the worker(s) in connection with performance of these tasks/job functions. In this document, the Licensee, the technical operators and other operators in the project, assess the risks involved in the work and describe how such risks will be minimised. In order to protect the employees; assessments have been prepared for all job functions and all job tasks. Health and safety plans describe the link between the individual technical operators own health and safety plans and the Licensee s health and safety plans. The Licensee has chosen technical operators that have drawn up their health and safety plans according to the international requirements that exist within certification of vessels and drilling operations. The Licensee is responsible for checking, e.g. by inspection, that health and safety plans meet the best international standards, including whether health and safety plans are suitable for the actual conditions. Requirements for health and safety plans in connection with the performance of work At all times, work must be planned, organised and carried out in a way that gives adequate consideration to health and safety in accordance with North Sea offshore standards The Licensee shall ensure that all parties involved in the operation has carried out a Health and Safety Report (HSR), cf. NORSOK Z-013 or similar international standards, that covers the relevant parties areas of work. The Licensee shall also ensure that the interaction between the vessels, the aircrafts as well as the onshore organisation is covered by the HSR. 28/51

29 The HSR shall fulfil the requirements set by the Greenland Government according 79 of the Mineral Resources Act. However, the HSR shall as a minimum include: A detailed description of the offshore installation and its operational conditions. A detailed description of the health and safety management system. Identification of potential risks for major accidents and hazardous impacts on health and safety as well as the general risks involved when working on the offshore installation. An assessment of risks and documentation that these risks have been reduced as much as is reasonably practicable (ALARP). Documentation that evacuation to a safe place can be carried out safe and effectively in critical situations. The health and safety report is to be updated when significant changes in health and safety conditions or the operating conditions on the installation occur. An assessment of health and safety risks, both in terms of risks of major accidents linked to the construction of the installation (installation safety) and health and safety risks at workplaces (occupational health and safety). Such risks must then be reduced to a level that is as low as reasonably practicable (ALARP) In connection with serious incidents or inspection, the BMP may stipulate further requirements that shall be fulfilled to ensure that work can be regarded as planned, organised and carried out in a responsible manner, including requirements: a. prohibiting particularly dangerous work, working processes, and working methods. b. regarding personal protective equipment and special work clothing. c. ensuring that all work involving a significant risk of accident or illness may only be carried out by specially trained personnel, or personnel who have attained special training or an approved certificate for such work Before drilling begins, the Licensee shall prepare a health and safety plan for all types of work and job functions. This shall be available at inspections. The BMP may at all-time demand that the Licensee submit this documentation Each workplace/job function description shall, as a minimum, contain a description of: a. The work task/job function. b. The purpose of carrying out this work/having this job function. 29/51

30 c. The person responsible for ensuring that the work is carried out in a safe manner. d. Work procedures. e. Listing of risks/dangers of the work. f. Listing of required safety equipment; also personal safety equipment. g. BMP may at all times demand, that the Licensee submits this documentation The Licensee shall ensure that the employees have full access to the workplace description/job function description for their work The Licensee shall ensure effective prevention of hazards of explosion, fire, poisoning, suffocation, etc Technical aids must be configured and used appropriately in a complete responsible health and safety context. The rules governing their use also apply to maintenance, cleaning, repair, etc Work tasks and job functions for which a workplace/job function description has not been prepared may not be carried out before an approved procedure has been established Work that cannot be carried out in an appropriate manner with regard to safety and health must not be carried out, see the ALARP principle. For example there must be extensive use of Safe Job Analyses (SJAs) and Work Permits (WPs) to prevent undesirable incidents during performance of work The Licensee shall ensure that personnel who work in moon pool areas or over the side of the drilling unit, or at height/elevation over 1 meter, are equipped with suitable safety equipment and work platform for such work Boiler suits must be in an easily visible colour with reflectors so that outside personnel are easy to see The BMP requires safety meeting to be held at sensible intervals, e.g. once every week. The Licensee must submit the minutes from safety meetings to the BMP no later than one week after the meeting has been held. 6.3 Emergency response and contingency plans The Licensee is responsible for ensuring that all technical operators have and use emergency response plans which meet the best international standards. The Licensee is responsible for coordinating the various operators plans. 30/51

31 The BMP has reviewed relevant documents and find that Licensee s and their technical operator s contingency plans, are suitable since all contingency plans continuously shall be updated to represent the actual conditions. In case of major changes during the P&A program; The Licensee shall forward updated contingency plans. In addition BMP will examine contingency plans in connection with inspection and exercises. The BMP place the following additional requirements to the contingency plans: General requirements for emergency response and emergency response plans Contingency plans shall at all-time be updated so that it corresponds to the way work is organised, crew levels, and the actual conditions on site. The BMP shall at all-time be informed about amendments and updates of contingency plans In the event of changes in conditions which have an influence in full or in part on one or more of the operators plans, these shall be amended to reflect the new conditions. Copies of any updated contingency plans shall be forwarded the BMP immediately. The BMP may, if necessary, demand changes to reduce health and safety risks in accordance with the ALARP principle. 6.4 Emergency response for drilling unit and for major accidents The BMP have reviewed relevant contingency plans and finds them suitable for the project. Requirements for emergency response for drilling unit The BMP demands that all companies in the P&A programme have contingency response plans which cover the work or the services the different players supply to the Licensee. The companies shall apply internationally recognised standards for developing contingency response plans, which are relevant for the area and in compliance with the actual conditions that exist at any given time. As a minimum, the contingency response plans must be in accordance with NORSOK Z-013 and in addition the following requirements: The Licensee shall ensure that all technical operators have included descriptions of major accidents in their contingency plans The BMP requires that the Licensee submit documentation for their verification on other players contingency response plans, and the BMP shall be informed about changes which may have an influence on the contingency response plans. 31/51

32 6.4.4 Work shall go to safe state if there is no contingency response plan for the actual conditions The emergency response documents shall be updated regularly so that at any time they cover all the conditions present. Before P&A is commenced, the Licensee shall submit updated contingency response plans which are adjusted for the conditions in Greenland and internationally, and for the actual conditions for the project. The Licensee shall furthermore check and revise their own and the technical operators contingency response plans Contingency plans shall, as a minimum but not limited to, contain the following elements: Fire on board. Seepage of hazardous chemicals. Collisions with other vessels. Loss of vessel stability. Collapse in vessel structure. Incidents of poisoning of several persons. Extreme weather. Explosion Piracy and civil unrest Kidnapping and extortion Fatalities Sabotage Intrusion of Non-Governmental Organisations (NGO) The drilling unit shall close down to safe state, if it loses contact with the outside world. Safe state may not be lifted until communication has been restored. 6.5 Ice management The Licensee has submitted the following plan for Ice Management: - Ice Management Plan ED/GRN/DRL/IMP/13/971 The Ice Management Plan does not include support vessels but instead only monitoring by ice observers. Conditions and requirements for ice management are valid for all ice that threatens the P&A programme. The drilling vessel will therefore have to manoeuvre to avoid the ice contact including suspending operations and move off location, as necessary in the event an ice berg enters the T-zone. Finally it is the OIM s responsibility to assess whether or not ice is an immediate threat for the drilling unit and should be treated and managed accordingly. 32/51

33 Hence the Licensee is expected to follow the same T-zone setup used during the 2011 campaign (see below) including same reporting procedures. Ice observers will use radar on the drilling vessel and satellite data to monitor icebergs according to three circular alert zones which dictate required actions to ensure the safety of personnel, equipment, and the environment. Starting at the drilling vessel; these are defined by: Zone 1 Ice Alert Safety Buffer - Quick Departure Zone 2 Reaction Orderly Departure of drilling unit from wellsite Zone 3 Ice Monitoring Tracking and Management The alert zones depend on the T-Time and the forecasted times for the iceberg to reach zone 2 (Reaction) and zone 1 (Ice Alert) as illustrated in figure below. When an iceberg crosses into zone 2 but is forecasted to move away; the vessel is in standby until the iceberg moves clearly away from the Reaction Zone. Should an iceberg cross into the Reaction Zone and is forecasted to pursue its trajectory towards the vessel; it will lead to a disconnection. Requirements for ice management All operations on board the drilling vessel must therefore account for the continuous changes in the T-time depending on the current weather- and ice condition etc. In addition the following requirements imply: 33/51

34 Requirements for ice management There shall be adequate ice management at all times The Licensee must ensure that Emergency Response Plan for ice management is at all times updated to the actual conditions in the area in which the drilling vessel is operating. Documentation of this shall be submitted to BMP before the operation is started Ice observers must always be on board the research drilling vessel The BMP requires that all elements of the drilling operations allow for time to fit a plug, placed below seabed level, or some other well barrier with similar function and qualities, if there is a risk of having to close down temporarily The drilling unit shall initiate preparations to remove equipment from the wellbore and commence installation of a plug in the wellbore, if an iceberg enters the T-zone Ice management activities must be reported daily as part of the daily 24-hour drilling report. Time to Closest Point of Approach (TPCA) must be included in the daily report. Similarly, a collated report of the past week and past month s ice management must be submitted to the BMP no later than the following Tuesday and the 5th day of each new month respectively, ref. Chapter 10, Verification, Registration The OIM has the right and obligation to carry out an earlier shutdown and disconnection, if the OIM assesses that this is necessary. 6.6 Emergency response for oil spill No hydrocarbon horizons are present in the wells and not expected to be uncovered during the P&A operation. Therefore the only oil Spill possibility should present itself from a drilling vessel incident and for that reason the Fugro Synergy carries Oil Spill recovery equipment (SOPEP) to meet such an incident; according to MARPOL requirements. Licensee shall in addition make an agreement with Greenland Oil Spill Response (GOSR) about oil spill The BMP can at any time instruct the Licensee to take further measures in their oil spill response, if BMP finds this necessary. 34/51

35 6.7 SAR emergency response Reference documents: - Search and Rescue EF Emergency Response, Injuries and Sickness EF The Licensee has explained that a SAR emergency response plan does not include helicopter rescue. In a case of injury to personnel which requires medical treatment in an onshore hospital, the drilling vessel will leave the well location and sail to the nearest port where a hospital is available for dispatch of the patient(s). The vessel will have a doctor and a medic on board at all times. The Fugro Synergy carries a Man Overboard Boat (MOB) which will be used if required to pick up personnel from the sea. The MOB can accommodate 10 persons and has a minimum 120 nautical miles at up to 31 knots speed. 7 Competencies, qualifications, training and drills Competences, qualifications and training are a central part of the safety and emergency response in connection with oil and gas exploration and exploitation. The personal competences, qualifications and training activities of personnel can be divided into three groups. First group: professional competences and qualifications. Second group: basic safety courses. Third group: emergency response courses. 7.1 Professional competences and qualifications In a project such as this, there is a wide range of very different positions requiring special education or training. It must be possible to document the qualifications of the personnel through education, courses, training, work experience, etc. The aim is to document that each job and position in the operations is being performed by qualified staff. Use of schooling/courses with trainee schemes (apprenticeships) in the individual specialist field is preferred. Some categories of positions require separate certification, such as work with explosives, radioactive materials and some positions for drilling personnel. All drilling crew members, including the position as assistant driller and upwards, must have an approved International Well Control Certificate under the International Well Control Forum (IWCF), Offshore North Sea Standard. As the drilling units are vessels, and as a number of auxiliary vessels will be present around the drilling units, some of the positions in this project will be seafarer positions. 35/51

36 The positions on the drilling units are very specific and require either long-cycle higher education levels with associated training or long-term training/work experience, starting from scratch with peer learning and schooling. On the vessels, there will also be positions which require qualifications in operations and maintenance (mechanics, cook, cleaning, plumbing, electricians etc.) as well as certified positions (captain, ship's mate, chief engineer officer, helicopter pilots, etc.). Safety courses Everybody on board the vessel must have completed induction safety courses in accordance with the Offshore North Sea Standard. In brief, the courses include fire fighting, first aid, safety and health at work and work regulations on board, escape routes, lifeboat, life raft drills and lifejackets, etc. The crew must also be trained in Safe Job Analysis (SJA) and Work Permit processes (WP). Basic safety courses Everybody on board the drilling units must have completed basic offshore safety courses in accordance with the Offshore North Sea Standard, which include helicopter evacuation. In brief, the courses include fire fighting, first aid, safety and health at work and work regulations on board, escape routes, lifeboat and life raft drills, use of personal survival suits, what to do in the event of emergency landing by a helicopter, survival after falling into the sea, etc. The crew must also be trained in identifying and responding to H 2 S, Safe Job Analysis (SJA) and Work Permit processes (WP). All personnel on board must also have undergone offshore medical checks complying with the Offshore North Sea Standard to safeguard against any health problems, and to ensure that they are healthy and fit to work on the drilling units. Emergency response courses The emergency response courses encompass further training for personnel who holds an emergency response role in addition to their primary position on the vessel. Examples of such emergency response special courses include lifeboat operator, fire fighter, smoke diver, first aid, courses for medical personnel, etc. Requirements for competences, qualifications, training and drills of the personnel The Licensee must ensure that personnel have the qualifications necessary to perform their work in a safe and appropriate manner The BMP requires all personnel to have an approved and valid course certificate in basic safety for offshore personnel in the North Sea All personnel must be able to produce an approved and valid medical certificate complying with medical examinations of seafarers ILO/IMO/JMS/2011 or OGUK Offshore Fitness Certificate (North Sea Fit). This must be validated within the past 2 years, except for personnel older than 60 years where validation shall be within 1 year. All personnel must be able to produce an approved and valid medical certifi- 36/51

37 cate complying with the Offshore North Sea Standard, a certificate to work offshore Weekly drills must be held for each vessel crew, which cover muster drills, fire, evacuation, gas to surface etc. The Licensee is responsible for ensuring that personnel on board have completed the relevant courses and training and that the personnel are updated about new regulations and requirements. Inspectors/surveyors from the BMP may, during their inspection, in consultation with the operator, demand that drills be held Personnel working with explosives and chemicals must be able to document training and qualification/certification within the area All relevant drilling personnel on the drilling rigs shall have a valid IWCF Offshore North Sea Standard Well Control Certificate The Licensee must be able to document requirements for competences and training in all positions affected by the drilling activity, and also be able to verify the competences, courses, education and training of the personnel All specialist courses in connection with emergency response must take place in accordance with the Offshore North Sea Standards and requirements Training of crews who are to operate oil spill equipment must take place in accordance with the Offshore North Sea Standards and requirements. 8 Socially sustainable development The permanent plug and abandonment operation is part of both the 2010 and 2011 exploration drilling operations and therefore also covered by their respective SIA assessments. In addition the actual operation activities in 2013 will be performed with a much smaller drilling vessel that in comparison with the 2010 and 2011 drilling vessels and support vessels pose a low level impact on both the environment and the society. Therefore the Licensee does not need to prepare a SIA. However to ensure a socially sustainable development: The Licensee shall implement initiatives to ensure that the permanent plug and abandonment operation is socially sustainable in both the short and long term The Licensee shall use Greenlandic labour in accordance with the requirements of the legislation. Other sources of labour may be used if 37/51

38 the required qualifications are unavailable in the Greenlandic labour force, or if there is a shortage of local labour The Licensee shall use Greenlandic suppliers and companies in accordance with the requirements of the legislation. Enterprises and supplies from other countries may be utilised if Greenland companies are not competitive either technically or commercially According to section 18 of the licence the Licensee shall report and submit data regarding socioeconomic matters for all activities performed under the licence. The Licensee shall report what actions the Licensee has applied to meet the requirements for use of labour from Greenland and Greenland enterprises for contracts, supplies and services in the execution of the approved activity The Licensee shall furthermore report the results of the actions, including documentation and an explanation if so why Greenlandic labour and Greenlandic enterprises were not chosen. The reporting under this section shall be made to the Ministry of Industry and Mineral Resources via the one-door authority BMP no later than 30 days after the approval has been authorized The licensee shall also submit data on lessons learnt, positive and negative impact on local communities, workers and businesses, stakeholder related data, statistics related to local involvement contra nonlocal involvement and other relevant socioeconomic information achieved from the activities. The data under this section shall be submitted to BMP within 14 days of it being available, but no later than 1 April Environment EAMRA, assisted by Danish Centre for Environment and Energy (DCE) and Greenland Institute of Natural Resources (GINR), has assessed the environmental impacts in connection with Capricorn s plans for plug and abandonment operations in the three blocks Sigguk, Atammik and Lady Franklin. 9.1 Environmental background studies In relation to the 2010 and 2011 drilling campaigns; the Licensee completed background studies to describe the areas around each drilling site. These studies include benthic (bottom-dwelling) fauna as well as a description of the physical characteristics and chemical composition of the sediment. 38/51

39 For use in the 2013 plug and abandonment operations; the Licensee has updated the environmental baseline information (part of the Environmental Impact Assessment (EIA) and Application to Drill processes, for each well location where available) by making the Environment and Ecosystem Review (E&E Review) for the four well sites, dated April The main sources of the information used therein are: updated strategic environmental impact assessments and other reports by DCE and GINR; pre and post-drill environmental monitoring survey reports commissioned by Capricorn and undertaken by Benthic Solutions; and other publically available literature. 9.2 Discharges and emissions Discharges and emissions will be considerably lower during this operation, compared to the drilling campaigns in 2010 and Only a single and smaller multi-purpose drilling vessel will be used for the task. Current legislation states that the Licensee shall report actual discharge and emission levels no later than December to BMP Atmospheric emissions The primary source of atmospheric emissions is the exhaust from vessel s engines. Atmospheric emission requirements: Atmospheric emissions must be minimised as much as possible Fuel for machinery must be low-sulphur fuel, with a sulphur content of less than 1.5 % by weight Marine discharges Marine discharges include waste water from the daily routines on board the ships. Marine discharge requirements: Any discharge of grey and black waste water from toilets, bath facilities and kitchens, as well as kitchen waste, must be in compliance with the provisions of Annex IV of the MARPOL Convention. Environmentally hazardous substances may not be discharged with waste water. 39/51

40 9.3 Waste management The following Waste Management Plan has been submitted: - WMP ED/GRN/CRP/WMP/13/1021 The waste produced during the plug and abandonment operations is expected to be entirely non-hazardous. Besides sewage, that are handled according to MAR- POL 73/78, Annex IV; all generated waste will be general material and managed in accordance with MARPOL 73/78 Annex V (garbage) and Annex v1 (Air Pollution) and, where applicable, contractor specific WMPs, Duty of Care Principles, International, EU and national legislation and regulations. Hazardous waste includes waste oil, water contaminated with oil requirements and excess chemicals. Non-hazardous solid waste such as pallets, wrapping, metal parts etc. shall be either incinerated or taken to a landfill. According to the Waste Management Plan (Appendix B) prepared by Capricorn, solid waste will be sorted and stored on board the vessels with recyclable materials transferred onshore to Nuuk s waste reception facilities. The Licensee shall prepare transfer of solid waste to a reception facility in Nuuk by entering into an agreement on this issue with the Sermersooq Municipality in Nuuk. Hazardous waste is not expected during the operation and if so only in minor quantities and shall be transported to a relevant destination outside Greenland for management if capacity in Greenland does not exist. The Licensee may undertake one or more audits of the project WMP during the P&A operation to ensure compliance with Capricorn s Waste Management Plan. EAMRA/DCE assesses the plans for waste management to be acceptable. Requirements for waste treatment Waste treatment must be carried out as described in the Waste Management Plan prepared by Capricorn (Annex I) The Licensee is responsible for proper handling of all waste from all activities on board the vessels and drilling units, and that all regulations are observed Oil polluted materials or oil residues must be transported in sealed containers Storage and transport of waste must take place in a safe manner with regard to the environment and human health Capricorn is responsible for safe and environmentally correct transport and transfer of all kinds of solid waste. 40/51

41 9.4 Chemicals The following document has been received with regards to chemical use: - ED/GRN/GEN/DRL/APP/13/1056 Capricorn Greenland Exploration A/S (Cairn Energy Plc.) has applied for an approval to use chemicals to be added to the cement used during the plug and abandonment operations. In the tables in Annex 2 all chemicals are listed and the quantities the company plans to use and discharge. The chemicals applied for shall be registered according to OSPAR (HOCNF) and the Danish product register PROBAS, and only those chemicals which are classified as PLONOR or yellow can obtain approval for use in the amount given in the tables. If the company wishes to use chemicals that have been classified as red, a justification, as well as an assessment of the toxicity of the chemicals and their environmental impact, must be given. All of the chemicals listed in the tables fulfil the requirements for classification as PLONOR or yellow. Therefore the plans for use and discharge of chemicals in the operations are assessed as acceptable. Requirements when using chemicals Only the chemicals which are described in the list mentioned in Annex 2 are allowed to be used All chemicals must be registered in the Danish product register PRO- BAS and BMP and DCE must have a copy of their classification. 9.5 Environmental monitoring The following document has been received on environmental monitoring: - Environment and Ecosystem Review, April 2013 The monitoring of Ultrahib was omitted in the sediment analytic programme for the 2011 drilling campaign, why new sediment samples in the well areas shall be sampled in 2013, for subsequent analyses for Ultrahib. Requirements for environmental monitoring: Capricorn shall resample sediment around the P&A sites according to a protocol agreed upon with DCE/GINR. 41/51

42 10 Registration, verification, checks and reporting 10.1 Special tax reporting requirements for the Licensee, technical operators and sub-suppliers with no residence in Greenland The following Reporting Plan has been submitted for the P&A operation: - ED/GRL/DRL/APP/11/2032 The Licensee has entered into a contract with a number of technical operators and sub-suppliers on delivery of services in connection with the P&A programme. This section pertains to the Licensee, technical operators and subsuppliers (and other enterprises with operational responsibilities covered by the Mineral Resources Act) that are neither registered nor resident in Greenland (non-greenlandic enterprises). Requirements Enterprises and individuals carrying out work in Greenland must follow the taxation regulations applicable at all times All enterprises carrying out work in Greenland and which are liable for taxation under the taxation legislation of Greenland must be registered as an employer in the Greenland Business Register and have a valid GER number The Licensee, technical operators and sub-suppliers with no place of residence or domicile in Greenland must submit information about working periods and income of employees. This information must be submitted to the Greenland authorities, Tax Agency at sulinal@nanoq.gl and the BMP at bmp@nanoq.gl. The Tax Reporting Form (see Foreign companies ) for each month reporting must be applied for this purpose. Forms for technical operators and sub-suppliers must be collected by the Licensee and submitted no later than on the 10th day of the month subsequent to the month they concern. The Licensee must also submit an overall list of the technical operators, subsuppliers and other enterprises with responsibility for operations, stating which of these have been active in Greenland in the relevant month. The Tax Reporting Form (see Foreign companies ) for each month reporting must be applied for this purpose. The form A11, which includes information about the amount earned by each employee in the calendar year, as well as the A10 form which summarises the A11 forms at enterprise level, must be filled out by the Licensee, technical operators and sub-suppliers (and other enterprises with responsibility for operations that are subject to approval under the Mineral Resources Act). The forms must 42/51

43 be collected by the Licensee and submitted no later than 31 January of the year subsequent to the year they concern The Licensee must contact the Tax Agency at for further instruction if the Licensee, technical operator or sub-supplier with no place of residence in Greenland are liquidated before 31 December of the year of activities The BMP may at all times issue further requirements to the Licensee, technical operators and sub-suppliers (and other enterprises with responsibility for operations that are subject to approval under the Mineral Resources Act) regarding information on work carried out in Greenland Accident reporting Accidents associated with exploitation activities must be reported in accordance with the following conditions: Industrial accidents and near miss incidents must be reported to the BMP, unless agreed otherwise with the BMP in the specific case The Licensee must report industrial accidents and incidents of poisoning to the BMP as soon as possible and within three days after the first day of absence, if the accident or incidence of poisoning resulted in one or more days leave in addition to the day the accident or incident occurred. Accidents, incidents of poisoning, and occupational diseases that lead to death or severe injury, must also be reported to the BMP immediately Health staff must report occupational diseases, and similar harmful conditions they observe or suspect in connection with mineral resources activities, to the BMP The BMP must also be notified as soon as possible if serious cases of illness, injury from accidents, or other significant accident situations for personnel or materials occur in connection with activities Accidents must be reported to the BMP by telephone, and then in writing. The BMP will provide an address, telephone number and address to be used for reporting purposes In the event of serious accidents, the BMP must be notified as quickly as possible Every month statistics of all accidents and near-miss incidents must be prepared. The statement must be compared against relevant international statistics of safety in the oil industry. 43/51

44 10.3 Other registration and reporting The final report must be in accordance with chapter 12 of BMP Drilling Guidelines. The report must account for all interpretations and results of surveys and calculations carried out The BMP must have a copy of all data as well as the interpretations which the operator has carried out or has had carried out. For types of data not mentioned in section of this document or chapter 12 of the BMP Drilling Guidelines, aspects relating to format and type must be agreed with the BMP before submission Unless otherwise specified; environmental reporting shall be according to a protocol agreed upon with DCE/GINR Specific conditions for registration. The Licensee must record the following information: Working hours of individual persons on the vessel; people who arrive at, or depart from, the licence area; inspections of fuel, chemicals and explosives storage facilities, specifying the state of the storage facilities; consumption of oil, water, etc., as well as emissions to the atmosphere and discharges to the marine environment; waste quantities and waste treatment. The information registered shall be available for inspection, and the BMP may require that the information, or extracts from it, be submitted to the BMP. BMP may lay down supplementary conditions for registration The Licensee shall report the following to BMP: All minutes from safety meetings must be submitted no later than one week after the meeting has been held. Daily drilling reports must be submitted every day. Daily ice management reports (to be submitted together with daily drilling report). 3 Day activity report, according to: pp_a_template_for_3_day_activity_report.pdf The Licensee shall submit information about working periods and income of employees that are not resident in Greenland to the Tax Agency, see section Unless otherwise specified, every month the Licensee must report the following information to BMP: Arrival schedule for planned shipping movements (the Danish Maritime Authority and Danish Maritime Safety Administration); 44/51

45 statement showing the number of aeroplane movements to and from the area; quantity of fuel imported and used, and the quantity of fuel in storage at the end of the month; quantity of imported and used chemicals, and the quantity in storage at the end of the month; data on onhire vessels for the month; meteorological parameters must be collected and reported in accordance with directions from the BMP; statement of the number of near miss incidents, indicating the nature and location of each such incident, and a description of how incidents of the same type will be avoided in future; Environmental monitoring in accordance with 9.5; HSE reporting; complete monthly ice management report; performed working hours per person; types and quantities of waste, and treatment of this Unless otherwise specified, before the end of Tuesday, the Licensee must report the following information to the BMP: Complete weekly ice management report; report on expected location for aircraft (must also be forwarded to the Greenland Command at AKO-OP005@mil.dkl), if there are any changes to location of aircrafts, this must be reported immediately Unless otherwise specified and no later than 31 December 2013, the Licensee must report the following information to BMP: The quantity of imported, exported and used explosives and detonators, and the quantity in storage; the quantity of imported, exported and used chemicals, and the quantity in storage; No later than two months after the drilling activities has ended, the Licensee must submit complete documentation of consumption and discharge (use of resources; fuel, water etc.) Before 31 December 2013, the Licensee must fill in and submit form A11 with information concerning the amount earned by each employee during the calendar year, see section Before 31 December 2013, the Licensee must fill in and submit form A10 which summarises the A11 forms at company level, see section Before 31 December 2013, the Licensee must fill in and submit a complete report on the compliance with the objectives of the IBA agreement. 45/51

46 The company must submit reports on internal control of all installations/functions (audit reports), e.g.: Drilling installations. Residential facilities. Office facilities. Kitchens with refrigerators, freezers and storage facilities. Workshop facilities. Fuel tanks. Explosives storage facilities. Ventilation The BMP may stipulate supplementary terms and conditions for reporting and registration. 11 Financial security 11.1 Guarantees The Licensee must pay compensation for damage caused by operations under the licence, regardless of whether the damage is considered accidental, and regardless of who is affected by the damage. A guarantee of fulfilment of the licensees obligations under the licence must be approved by the BMP for each company with a share in the exploration licence except for NUNAOIL A/S. The guarantee must cover fulfilment of obligations towards the Greenlandic and Danish government authorities, as well as liability and indemnity obligations under point of the exploration and exploitation licences. Cairn Energy Plc. has of 31 th December 2012 documented a shareholder s equity of USD 3.6 bn. that through the company s parent company guarantees constitutes part of the financial security for fulfilment of claims against the licensee of the Licences, Capricorn Greenland Exploration A/S, in connection to the plug and abandonment activities and all related activities Insurance conditions The BMP must assess and approve insurance cover for the Licensee, technical operators and sub-suppliers (and other enterprises with responsibility for operations that are subject to approval under the Mineral Resources Act). According to section of the exploration and exploitation licence, the BMP may require the Licensee to submit all terms concerning insurance cover and that further insurance cover be taken out. Vessels sailing in Greenlandic waters must document that the owner of the vessel has a valid certificate that shows insurance cover that meets the existing international standards. The table below shows the insurance requirements for 2.1 Vessels according to 46/51

47 the BMP s Offshore Insurance Requirements, For Activities under the Mineral Resources Act, Version II - Effective as of January 1, Further requirements and updated versions of the BMP s requirements are found at: Petroleum; Approval of activities; Offshore; Appendix D. 2.1 Insurances and coverage Vessels (Owner/Charterer) 1. Hull & Machinery and Hull Interest (Replacement cost of the vessel) 2. War risks (Replacement cost of the vessel) 3. P&I standard cover for owner/charterer Pollution (USD 1,000,000,000) Crew/passengers (USD 3,000,000,000) Specialist operations (USD 25,000,000) War Risks (USD 100,000,000 combined with point 4) The assessment of the insurance cover focuses on insurance for Fugro Synergy and other ships and vessels. In collaboration with Willis, the BMP has and will review the insurance policies for all ships and vessels involved in the plug and abandonment programme in order to ensure that the minimum requirements for insurance cover are met. The BMP also requires that the Licensee, as operator, joins The Offshore Pollution Liability Association Ltd (OPOL). OPOL is a private English scheme that secures cover of costs following environmental pollution, and remediation of this, with an amount of up to USD 250,000,000 per incident. OPOL provides a further guarantee to cover costs incurred by an oil spill. Below is a list of the requirements that the Licensee must meet. Requirements All insurance conditions must be in accordance with the requirements defined by the BMP and insurance requirements pursuant to the law, the Licences and decisions made by the BMP Insurance policies and certificates must be submitted to the BMP for all vessels and drilling units operating in Greenland in connection with the activities planned. The insurance policies submitted must be valid for the whole period in which the plug and abandonment activities are planned, and an additional four months, unless otherwise approved by the BMP. The BMP must approve insurance policies before activities included in this approval may be commenced. The BMP may require that further insurance cover is taken out The Licensee must subscribe to and then remain party in the agreement on operators liability for offshore oil pollution ("Offshore Pollution Liability Agreement as at 1 October 2010), which is administered by the English association; The Offshore Pollution Liability Association Ltd (OPOL) and has been entered into, or subscribed to, by the members of the association. The operator must be party in the agreement 47/51

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49 49/51

50 Annex 1 - Map of licence area and drilling locations 50/51