APPROVAL OF UP TO 7 (SEVEN) EXPLORATION WELLS · PDF file• NORSOK R-003: NORSOK Standard...

APPROVAL OF UP TO 7 (SEVEN) EXPLORATION

WELLS IN ACCORDANCE WITH

SECTION 15 OF LICENCES

2002/15, 2005/06, 2008/11 AND 2011/16

Public version

Government of Greenland BUREAU OF MINERALS AND PETROLEUM

May 2011

2

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

• BOP (Blow Out Preventer): Seabed valve system used in connection with the drilling

operation, also known as a secondary barrier.

• Drilling Guidelines: Greenland Bureau of Minerals and Petroleum, Exploration Drilling

Guidelines.

• ERRV (Emergency Response and Rescue Vessel): Vessel which must be available for

the drilling unit as a rescue vessel.

• 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.

•

• NORSOK: Norwegian standards.

• NORSOK D-001: NORSOK Standard D-001, July 1998, Drilling Facilities.

• NORSOK D-010: NORSOK Standard D-010, August 2004, Well Integrity in Drilling

and Well operations.

• NORSOK D-SR-007: NORSOK Standard D-SR-007, Jan 1996, System Requirements -

Well Testing Systems.

• 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

• SSML: Safety, health, environment and management control systems

• TD: Total Depth.

3

• TVDSS: (True Vertical Depth Sub-sea) vertical depth measured from the sea level

Definitions

• Blowout: Uncontrolled leak of hydrocarbons in the subsurface or over the seabed.

• Fishing Liaison Officer: Fishing Liaison Officer (FLO), fisheries expert, who can

communicate with local fishery operators and the Licensee during the operation.

• Drilling unit: Drilling ships and semi-submersible drilling rigs used in this project.

• By-pass coring: Coring carried out by drilling into the side wall of the well.

• Certificates: Certificates mean the vessel’s classification certificates, national

certificates and other certificates.

• Deadman System: an independent backup BOP control system that automatically shuts

in the wellbore by closing the blind shear ram upon total loss of both hydraulic and

electric communication between the pods and the surface. .

• Fail to Safety: an independent safety system in the BOP where the well is automatically

sealed if hydraulic and electric communication is lost.

• Greenlandic enterprise: An enterprise which is domiciled in Greenland and which

through the exertion of commercial activities has real attachment to Greenland.

• 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.

• Hot bedding: Hot bedding means that more than one person takes turns to sleep in the

same bunk/bed.

• Onhire vessel: Vessels which are under contract with the Licensee for a given period.

• Pilot hole: Drilling a small-diameter well before main drilling operations, to identify

any risks in the top section.

• Pre-spud: Pre drilling preparations

• Actual drilling programme: drilling programme excluding the top hole section.

• 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.

• Riser: A common term used in the oil industry for a conduit/a drilling fluid pipe that

provides a temporary extension to a subsea oil well to a surface drilling facility.

• Spot-hire: Supply vessels hired for a single navigation and a limited period; for

transport solely between international and Greenlandic ports.

• Technical operator: A technical operator is defined as an enterprise which, on behalf of

the Licensee, conducts exploration (Ocean Rig) 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.)

4

Table of Contents

1 The Application 6 1.1 Application documents .................................................................................................... 6

1.2 Operator and Licensees .................................................................................................... 6

1.3 Project description............................................................................................................ 8

1.4 The legal foundation for approval.................................................................................. 13

2 Drilling programme 16 2.1 Offshore activities .......................................................................................................... 16

2.2 Ports and onshore activities............................................................................................ 19

2.3 Other activities ............................................................................................................... 21

2.4 Personnel conditions and working hours ....................................................................... 21

3 Authorisation terms for mobile drilling units, vessels and aircraft 23 3.1 Vessels in general........................................................................................................... 24

3.2 Drilling units and vessels ............................................................................................... 24

3.3 Mobile drilling units....................................................................................................... 25

3.4 Ships............................................................................................................................... 26

3.5 Aircraft and helicopter operations................................................................................. 26

4 Drilling locations 27 4.1 Site survey evaluation regarding geohazards................................................................. 27

4.2 Requirements to data acquisition ................................................................................... 28

5 Drilling and well operations 28 5.1 Requirements for drilling and well operations............................................................... 29

5.2 Primary and secondary well barriers.............................................................................. 30

5.3 Handling and use of chemicals ...................................................................................... 33

5.4 Storage, handling and use of explosives ........................................................................ 34

5.5 Storage, handling and use of radioactive materials........................................................ 36

5.6 Abandonment/suspension plans..................................................................................... 37

6 Licensee’s environmental and management systems, including safety, health and contingency plans 40

6.1 Safety and health plans .................................................................................................. 40

6.2 Emergency response and contingency plans.................................................................. 43

6.3 The roles of the authorities in the Licensee’s emergency response............................... 43

6.4 Emergency response for drilling units and other units .................................................. 45

6.5 Emergency response for major accidents....................................................................... 46

6.6 Emergency response for H2S ......................................................................................... 46

6.7 Emergency response for blow-out and relief well ......................................................... 47

6.8 Ice management ............................................................................................................. 49

6.9 Emergency response for oil spill.................................................................................... 54

6.10 SAR emergency response .............................................................................................. 56

7 Competencies, qualifications, training and drills 56

8 Socially sustainable development 58

9 Environment 60 9.1 Environmental background studies................................................................................ 60

9.2 Discharges and emissions .............................................................................................. 60

9.3 Waste management ........................................................................................................ 62

9.4 Chemicals....................................................................................................................... 63

9.5 Discharge of drilling mud, drill cuttings and cement..................................................... 65

5

9.6 Helicopter transportation................................................................................................ 67

9.7 Environmental monitoring ............................................................................................. 67

10 Registration, verification, checks and reporting 69 10.1 Special tax reporting requirements for the Licensee, technical operators and sub-

suppliers with no residence in Greenland ................................................................................. 69

10.2 Accident reporting.......................................................................................................... 70

10.3 Other registration and reporting..................................................................................... 70

11 Financial security 73 11.1 Guarantees...................................................................................................................... 73

11.2 Insurance conditions ...................................................................................................... 73

12 Approval in pursuance of section 15 for licences no. 2002/15, 2005/06, 2008/11 and 2011/16 74

Annex 1 - Map of licence area and drilling locations ............................................................... 76

Annex 2 – Guarantee and collateralisation ............................................................................... 76

Annex 2 – Guarantee and collateralisation ............................................................................... 77

Annex 3 – List of chemicals used ............................................................................................. 78

Annex 4 – Map of bird colonies................................................................................................ 79

Annex 6 - Environmental monitoring form .............................................................................. 82

Annex 7 – Template for Activity Report / 3 Day Forward Planning Report............................ 82

Annex 7 – Template for Activity Report / 3 Day Forward Planning Report............................ 83

Annex 8 – In-situ Burning Application Form for Greenland Waters ...................... 86

Annex 9 – Dispersant Application for Greenland Waters ......................................... 87

Annex 10 - Greenland Bureau of Minerals and Petroleum, Exploration Drilling Guidelines .............................................................................................................................. 88

Annex 11 - NORSOK D-001................................................................................................ 89

Annex 12 - NORSOK D-010................................................................................................ 90

Annex 13 - NORSOK D-SR-007 ......................................................................................... 91

Annex 14 - NORSOK R-003................................................................................................ 92

Annex 15 - NORSOK S-001 ................................................................................................ 93

Annex 16 - NORSOK S-003 ................................................................................................ 94

Annex 17 - NORSOK Z-013 ................................................................................................ 95

6

Capricorn Greenland Exploration 1 Ltd.

50 Lothian Road

Edinburgh, Scotland

EH3 9BY

UK

1 The Application

1.1 Application documents

On 4 March 2011, the BMP received an application submitted by Capricorn Greenland

Exploration 1 Ltd. concerning the approval of drilling of up to 7 (seven) exploration wells in

accordance with section 15 of the licences 2002/15, 2005/06, 2008/11 and 2011/16.

For this letter of approval, issued by the BMP, the Danish version shall apply. If there are any

inconsistencies between the Danish and the English/Greenlandic versions, it is the Danish

version that prevails.

Where there are inconsistencies between the English and the Danish/Greenlandic version of the

application documents, the English version prevails.

1.2 Operator and Licensees

The Licensees and operators of the licences to which the application for exploration drillings

pertains are listed below. The operator for the individual licences is marked with * in the tables.

Exclusive Licence no. 2002/15 for exploration for and exploitation of hydrocarbons in an

offshore area north-west of Nuuk, West Greenland is divided between the following companies

as below:

Licence Licensee Share (%)

Capricorn Greenland Exploration 1 Ltd.* 47.5

Capricorn Atammik Limited 40.0

2002/15

(Atammik)

NUNAOIL A/S 12.5


offshore area in West Greenland is divided between the following companies as below:



Capricorn Lady Franklin Limited 40.0

2005/06

(Lady Franklin)

NUNAOIL A/S 12.5

7





Capricorn Greenland Exploration 3 Ltd. 18.75

Capricorn Greenland Exploration 4 Ltd. 28.75

PETRONAS International Corporation Ltd. 10.00

2008/11

(Eqqua)

NUNAOIL A/S 12.50


offshore area in North-West Greenland is divided between the following companies as below:


Capricorn Greenland Exploration 1 Ltd.* 87.50 2011/16

(Napariaq) NUNAOIL A/S 12.50

Capricorn Greenland Exploration 1 Limited, Capricorn Atammik Limited, Capricorn Lady

Franklin Limited, Capricorn Greenland Exploration 3 Limited, Capricorn Greenland Exploration

4 Limited are all fully owned subsidiaries of Cairn Energy Plc.

The company structure of the Cairn Energy Group is illustrated below in figure 1.2.A:

Cairn Energy Plc.Listed on London Stock Exchange

Capricorn Oil Ltd.Not listed subsidiary company

Cairn IndiaListed on Bombay

and National Stock Exchange

Other share-

holders

37,66 %

Capricorn

Greenland

Exploration

1 Ltd.

Capricorn

Greenland

Exploration

3 Ltd.

Capricorn

Greenland

Exploration

4 Ltd.

Capricorn

Atammik

Ltd.

Capricorn

Lady Franklin

Ltd.

100% ownership62,34 % ownership

Cairn Energy Plc.Listed on London Stock Exchange

Capricorn Oil Ltd.Not listed subsidiary company

Cairn IndiaListed on Bombay

and National Stock Exchange

Other share-

holders

37,66 %

Capricorn

Greenland

Exploration

1 Ltd.

Capricorn

Greenland

Exploration

3 Ltd.

Capricorn

Greenland

Exploration

4 Ltd.

Capricorn

Atammik

Ltd.

Capricorn

Lady Franklin

Ltd.

100% ownership62,34 % ownership

Figure 1.2.A: Company structure, the Cairn Energy Group

Capricorn Greenland Exploration 1 Limited is operator of licences 2002/15, 2005/06, 2008/11

and 2011/16. Capricorn Greenland Exploration 1 Limited is also the operator of exploration

licence 2008/10 in an offshore area in West Greenland and exploration licences 2008/13,

2008/14, 2009/10, and 2009/11 in offshore areas in South Greenland and exploration licences

2011/13 and 2011/17 in offshore areas in North-West Greenland.

8

NUNAOIL A/S

NUNAOIL A/S is fully owned by the Greenland Self Government.

Figure 1.2.C: Company structure, NUNAOIL A/S

It has been stipulated in concession terms for all exclusive licences for hydrocarbons, that

NUNAOIL A/S shall be included as a licensee in the licences. In the exploration phase

NUNAOIL A/S shall be a ”carried partner”, i.e. the remaining Licensees shall pay all expenses

associated with exploration activities.

1.3 Project description

Timetable

Capricorn Greenland Exploration 1 Ltd., a subsidiary of Cairn Energy Plc., has submitted an

application for approval of up to 7 (seven) exploration drillings. Activities may be carried out

from the date a licence is granted;

o for location Atammik AT1-A: until 1 December 2011

o for location Atammik AT2-B: until 1 December 2011

o for location Atammik AT7-A: until 1 December 2011

o for location Napariaq 13 Delta A: until 1 October 2011

o for location Eqqua Gamma-B: until 1 October 2011

o for location Lady Franklin LF6-B: until 1 December 2011

o for location Lady Franklin LF7-C: until 1 December 2011.

Any changes to the timetable are to be regulated by the provision in section 1.4.

The drilling operations are part of a 3-year drilling programme which commenced in 2010 and is

expected to be completed in 2012.

Drilling programme

The Licensee has planned to use the drill ship Corcovado for the upper part of the wells to drill

pilot holes and install the casing. The drilling rig Leiv Eiriksson will then be included in the

operation to drill the actual drilling programme with Corcovado.

List of drilling units and ships which the Licensee has applied to use in this project:

Name of

vessel

Shipping

company

Helideck Primary task Secondary task Other tasks

Corcovado, Ocean Rig Yes Drilling Drilling of relief

NUNAOIL A/S

Government of Greenland

100 % ownership

NUNAOIL A/S

Greenland Self Government

100 % ownership

9

Drilling ship well

Leiv

Eiriksson,

Semi-

submersible

Drilling Rig

Ocean Rig Yes Drilling Drilling of relief

well

Balder Viking Trans Atlantic

No Ice

management

Be part of

emergency services

Olympic

Poseidon

Olympic

Shipping

No Ice

management

and oil spill

response

services

ERRV/OSR Fire fighting

Jim Kilabuk Northern

Transportation

Company Ltd.

(NTCL)

No Ice

management

Be part of

emergency services

Alex Gordon Northern

Transportation

Company Ltd.

(NTCL)

No Ice

management

Be part of

emergency services

Siem Ruby Siem Offshore No Ice

management

and oil spill

emergency

services

ERRV/OSR/Transit

accommodation 60

persons

Back-up fire

fighting

Siem

Aquamarine

Siem Offshore No Ice

management

ROV/ERRV Relief guard

vessel, back-up

fire fighting

Siem Danis Siem Offshore No Supply vessel

in Greenland

Be part of

emergency services

Siem Louisa Siem Offshore No Supply vessel

in Greenland

Be part of

emergency services

Sophie Siem Siem Offshore No Supply vessel

in Greenland

Be part of

emergency services

Toisa Vigilant Sealion

Shipping

Limited

Yes Supply vessel

in Greenland

Transit

accommodation 60

persons

Esvagt Don Esvagt No Stand-by

vessel for rig -

oil spill

emergency

response

Be part of

emergency services

Fire fighting

Esvagt

Capella

Esvagt No Stand-by

vessel for rig -

oil spill

Be part of

emergency services

10

emergency

response

Genius Star Well Ship

management

and Maritime

Consultant

Co. Ltd.

No Cargo vessel Be part of

emergency services

Other vessels may be used in connection with the project after approval by the BMP.

Drilling rigs

Ocean Rig is the technical operator on both the drilling units which will be carrying out the

drilling programme in 2011. The drilling ship Corcovado is a new build, which will enter

Greenlandic waters in early May. Leiv Eiriksson is a semi-submersible drilling rig and will sail

to Greenland end of May to commence drilling of the first well.

Support vessels

Vessels to manage ice

There are a total of six vessels to manage ice and at least one is to be allocated to each rig. The

purpose of these vessels is to manage any situations involving ice which may arise. The

functions expected to be carried out are to monitor and manage icebergs on collision course with

the drilling rigs. Monitoring will be with radar equipment on the ships, supplemented by data

from aircraft, helicopters and satellites. Furthermore, two of the vessels managing the ice can

also act as an Emergency Response and Rescue Vessel (ERRV), while the crew is being replaced

on one of the two dedicated ERRVs.

Other vessels

A number of support ships are linked to the drilling programme for various purposes.

Two storage and accommodation ships: The ships will lie off Aasiaat and Nuuk and will be used

as sleeping quarters if the crew is delayed in Aasiaat or Nuuk in transit to and from the drilling

units. The ships will primarily be used as storage facilities for equipment to be used in the

drilling operation.

Two Emergency Response and Rescue Vessels (ERRVs) (standby vessels): The purpose of these

ships is to be ready in the event of an accident. There is equipment on the ships to respond to oil

spills, and the ships also have personnel rescue capability.

Leiv Eiriksson Corcovado

11

Four supply ships: Three of these ships will operate in Greenlandic waters as Platform Supply

Vessels; the fourth will sail between the United Kingdom and Greenland.

Helicopter chartering

The Canadian company, Cougar Helicopters, will supply air transport between Aasiaat and

Nuuk and out to the drilling units. Cougar Helicopters operates under and in accordance with

licences from Air Greenland. There are four helicopters; three are S92’s and one S61. Two of

these are dedicated to SAR tasks. There will be workshops for the helicopters in Ilulissat and

Nuuk, which will also be the helicopter base.

List of aircraft and helicopters which the Licensee has applied to use in this project:

Aircraft

type

Owner/operator Base Primary task Secondary task

Helicopter

S92

Cougar

Helicopters

Ilulissat Crew change for

drilling units

Helicopter

S92

Cougar

Helicopters

Nuuk Crew change for

drilling units

Helicopter

S61 (when

the 3 to 1

model is

chosen)

Cougar

Helicopters

Ilulissat/Nuuk Search and rescue

Helicopter

S92

Cougar

Helicopters

Ilulissat/Nuuk Search and rescue

(SAR)

Aeroplane

Boeing

737

Titan Airways Edinburgh, Scotland Flying crews

Edinburgh –

Kangerlussuaq

(return)

Limited carriage of

freight

Aeroplane

Dash 7

Air Greenland Kangerlussuaq/Nuuk Flying crews

Kangerlussuaq –

Aasiaat - Nuuk

(return)

Limited carriage of

freight

Logistics

Crew

Crew coming from outside Greenland will be flown from Edinburgh to Kangerlussuaq. This will

be three-five times a week. The journey from Kangerlussuaq to Aasiaat or Nuuk will be by

fixed-wing aeroplane and in exceptional cases by helicopter. If necessary, Air Greenland will

also have extra capacity for freight on these routes.

For drilling in the Eqqua and Napariaq licence blocks, the helicopters will transport the crew

from Aasiaat to the two drilling units and back. The helicopters will start the trips in Ilulissat

(where the pilots will stop overnight), and fly empty to Aasiaat, collect the crew and fly

onwards. For drilling in the Atammik and Lady Franklin licence blocks, hangar and workshop

facilities will be in Nuuk, and the crew will also be flown out from here.

12

Cougar Helicopters has signed an agreement with Air Greenland on use of Air Greenland’s

hangar and workshop facilities in Ilulissat and Nuuk.

The figure below shows the logistics in summary form.

Figure 1.3.A: Summary of logistics

Equipment

The port from which most of the equipment and material for the project will come is Peterhead

in the UK. In Greenland the primary supply base will be in Aasiaat for the northern drilling

operations (Eqqua and Napariaq). For drilling in the Atammik and Lady Franklin licence blocks,

the primary supply base will be in Nuuk. When time permits it, supplies will come directly from

Peterhead.

Royal Arctic Line will be the port agent for the Licensee in Greenland.

Waste

All types of solid waste shall be separated at source on the units and then transported to Aasiaat

or Nuuk, where it will be treated locally or transported for treatment outside Greenland.

Wastewater will be discharged into the sea if it complies with the approved threshold limits.

Representation and staff in Greenland

The actual programme will be managed from the Capricorn Greenland Exploration 1 Ltd.’s

office in Edinburgh. Capricorn Greenland Exploration 1 Ltd. will also be represented in Nuuk.

Contingency plans

There are contingency plans for how the Licensee will deal with emergency situations.

Furthermore, a contingency committee has been set up in Greenland to coordinate the

authorities’ emergency response, see chapter 6.

13

In the event of oil spills during drilling operations, equipment to respond to the spills is placed

on the drilling units themselves and the standby vessels around the drilling units (Tier 1), in

Kangerlussuaq (Tier 2), and in the United Kingdom, ready to be flown to Greenland (Tier 3),

see section 6.9.

In the event of oil spills during bunkering, the fire stations in Nuuk, Sisimiut, Aasiaat and

Ilulissat have equipment to respond to oil spills in addition to the equipment available to the

Licensee.

Furthermore a number of emergency response plans exist, including ice management; see

section 6.8.

1.4 The legal foundation for approval

The Exclusive Licences for exploration for and exploitation of hydrocarbons under which

exploration drillings have been applied for are listed below. The operator for the individual

licences is marked with * in the tables.


offshore area north-west of Nuuk, West Greenland is divided between the following companies

as below:



Capricorn Atammik Limited 40.0

2002/15

(Atammik)

NUNAOIL A/S 12.5





Capricorn Lady Franklin Limited 40.0

2005/06

(Lady Franklin)

NUNAOIL A/S 12.5





Capricorn Greenland Exploration 3 Limited 18.75

Capricorn Greenland Exploration 4 Limited 28.75

PETRONAS International Corporation Limited 10.00

2008/11

(Eqqua)

NUNAOIL A/S 12.50

14



Licence

Sole-risk party Share (%)

Capricorn Greenland Exploration 1 Ltd.* 87.5 2011/16

(Napariaq) NUNAOIL A/S 12.50

Approval of the drilling programme applied for will be in accordance with Act no 7 of 7

December 2009 on mineral resources and activities of significance for these. Section 98(4) of

this Act states that licences for exploration and exploitation notified before 1 January 2010

pursuant to the previous Mineral Resources Act shall remain valid but they shall be regulated in

accordance with the new Act.

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.

The activities covered by licences pursuant to the Mineral Resources Act shall not be carried out

unless Naalakkersuisut has previously approved the activities and the associated activities, see

section 86 of the Mineral Resources Act. The provision of section 86(1) states specifically that

complex work which may be associated with a special risk, such as drilling, shaft sinking,

installation of galleries etc. shall be approved by Naalakkersuisut in each case before

implementation.

Therefore, according to the Mineral Resources Act, the drilling programme under application

requires a section 86 approval from Naalakkersuisut before the activities are implemented.

Approval pursuant to section 86 shall also be in accordance with the terms stipulated in the

licences. The licences were notified on standard terms. A term is stipulated in section 15 of the

licence that the licence holder shall submit plans for the activity for approval by the BMP,

including exploration plans; health, safety and environment plans; and plans for socio-economic

studies, including plans for local employment and companies etc.

The foundation for preparation of the drilling programme for work under application includes

Drilling Guidelines, BMP April 2011, which state a number of requirements for documentation

and reporting to be followed during implementation of the drilling programme. The Drilling

Guidelines state that NORSOK standards shall be observed during the preparation and

completion of the drilling programme.

15

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 must 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 Licensee, and Capricorn Greenland Exploration 1

Limited as operator, are obligated to ensure that the safety and health risks associated with the

construction, design and equipment of the mobile offshore facilities are reduced as much as

practically possible, see section 79(1) of the Mineral Resources Act.

According to section 73(1) of the Mineral Resources Act, approval of a number of activities

listed in the Act cannot be granted before an assessment has been made of the impact on the

environment and a report thereon has been approved by Naalakkersuisut. The drilling

programme under application is assumed to be covered by section 73(1), no. v:

“Establishment or location and use of large facilities used for activities subject to this

Greenland Parliament Act, including fixed offshore units, mobile offshore units, accommodation

vessels, mining facilities, subsoil facilities, related energy installations and related pipeline

facilities.”

The drilling programme in itself, both with regard to its intensity and geographical spread, in

relation to the other activities in the area and its vulnerability, mean that the activity could have

significant impacts on the environment.

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. 1035 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 MARPOL Convention (International Convention for the

Prevention of Pollution from Ships), and the LONDON Dumping Convention. According to

section 2 of 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 activities on the

Greenland continental shelf covered by licences notified pursuant to the Mineral Resources Act.

According to section 76(1) of the Mineral Resources Act, approval of an activity assumed to

have significant impact on social conditions cannot be granted before an assessment has been

16

made of the social sustainability (SSA) of performance of the activity and a report thereon (SSA

report) has been approved by Naalakkersuisut.

The provision of section 76(1) should be considered in the context of the objects provision in

section 1(2) of the Mineral Resources Act, which aims to ensure social sustainability in

connection with mineral resource activities. The requirement for social sustainability is to ensure

that activities are organised so that social development can take place on a sustainable basis and

that the necessary measures are taken to counter adverse effects for society while identifying and

exploiting positive development opportunities.

The scope of the drilling programme under application in financial terms as well as in terms of

both the intensity of material used such as drilling rigs, ships, aircraft, and the geographical

spread of activities should be assumed to have a significant impact on social conditions.

Approval of the drilling programme therefore requires that a social impact assessment (SIA) is

carried out as stipulated in section 76(1) of the Mineral Resources Act, and that a report (SIA

report) is approved by Naalakkersuisut.

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 drilling programme in 2011 to be planned

and executed in accordance with the Offshore North Sea Standards for similar activities. Ice

management shall be completed in accordance with the best Arctic standard.

BMP may, at any time and on the basis of ice conditions or other relevant conditions, adjust the

length of the drilling season.

2 Drilling programme

The Licensee’s drilling programme can be divided into a number of sub elements:

• Offshore activities

• Ports and onshore activities

• Other activities (fixed-wing aircraft)

• Personnel conditions and working hours

2.1 Offshore activities Examples of offshore activities include:

• Drilling wells

• Ice management

• Standby and safety services

• Supply services

• Crew changes without air transport (require exemption)

17

Drilling wells

Drilling will be carried out by the drill ship ”Corcovado” and the semi-submersible rig ”Leiv

Eiriksson” respectively. Both vessels have been designed and equipped to suit the purpose of the

planned drilling operations, with regard to overall health and safety, the environment and the

geology.

The general plan is to end the wells at a depth which covers the most interesting geological

prospects for possible hydrocarbon discoveries. If occurrences of hydrocarbons are found, if

possible, further exploration and evaluation of the wells will be carried out in the form of limited

test production (well testing) after drilling has ceased. The extra equipment required to perform

well testing shall be mobilised and installed onboard before well testing is carried out. This

requires separate approval from the BMP.

The Licensee has decided to use the same size and type of material and equipment to develop all

wells. This means that the Licensee has equipment to drill a relief well in the event of an

incident while drilling a well, such as a blow-out.

The Licensee will temporarily shut down the wellbore, if the Licensee discovers geological

formations that contain hydrocarbons of interest to the Licensee and which require further

investigation, and if the Licensee is unable to complete the well during this drilling season. The

Licensee plans to shut down all wellbores (permanently), if they show no signs of hydrocarbons.

Permanent and temporary shutdowns shall be approved by the BMP.

The Licensee’s plan is to carry out wireline logging and logging while drilling after reaching the

TD. Geologists will evaluate the geological layers in the well and identify possible hydrocarbon

formations. On the basis of these geological evaluations the Licensee will apply to shut down

the wellbore either temporarily or permanently.

Standby and safety services.

In order to ensure the safety of the crew members onboard the drilling unit, it is a requirement

that there is an Emergency Response and Rescue Vessel (ERRV) at each drilling unit. This means

presence at the drilling unit 24 hours a day. When the crew on one of the two ships is to be

replaced, one of the vessels designated for ice management will act as an ERRV. There is

equipment on the ERRV’s to respond to oil spills, and the ships also have personnel rescue

capability for the entire crew on the drilling unit, if necessary.

Supply services.

The Licensee has permanent vessels which will be in transit between the base ports in Greenland

and the drilling units as well as between international and Greenland ports / drilling units.

Additionally, spot-hire vessels will be hired.

Requirements for spot-hire vessels

2.1.1. The BMP shall be informed before the planned use of spot-hire vessels. The use of spot-

hired vessels must be included in the monthly onhire vessel report.

2.1.2. The Licensee shall submit navigation plans to the BMP before the vessel enters

Greenland waters. The navigation plan must include the name of the vessel, shipping

18

company, when the vessel is expected to enter Greenland waters and when it is expected

to leave Greenland waters.

2.1.3. Spot-hire carriage trade vessels which are subject to this approval may not carry material

directly to the drilling units. They may only be used to carry material between

international and Greenlandic ports.

2.1.4. When establishing the charter parties, the Licensee shall only choose shipping companies

which meet the requirements for recognised good international practice for maritime

shipping and drilling operations under conditions similar to those in the offshore area

west of Greenland.

2.1.5. Ships shall register with KYSTKONTROL before entering Greenland waters and be

equipped with LRIT (Long Range Identification and Tracking System). Ships must also

comply with regulations for ordinary navigation in Greenland waters (GREENPOS).

2.1.6. The BMP may, at any time, demand submission of the certificates/safety plans of all

cargo vessels for inspection.

2.1.7. The Licensee shall register and submit reports on the consumption of fuel, oil etc., as

well as on emissions and discharges to the air and sea, see section 9.7.

Exemption requirements for crew changes without air transport

In situations where helicopters cannot be used for crew changes, e.g. because of fog, the crew

may be sailed to the drilling unit by the flotel and lifted on board using a basket lift; provided

that a separate BMP approval has been obtained in advance, except the cases listed in section

2.1.9 below.

Requirements for basket lifts

2.1.8. Transfer of personnel using a basket shall be in accordance with the terms and

requirements of NORSOK R-003, section 5: Additional requirements for the lifting of

personnel and in accordance with the requirements below

2.1.9. Basket lifting of crew shall be approved in each individual case. The Licensee need not,

however, apply in advance, provided basket lifting of crew is necessary in order to

counter a kick, a blow-out or similar circumstances. In such cases the Licensee can

initiate the basket lift required and subsequently document the basket lift and the

necessity of the lift to the BMP.

2.1.10. Transfer of personnel may only be after careful analysis and assessment of the danger

and risk involved in transferring personnel using a basket. An assessment of the danger

and risk shall be submitted to the BMP as part of the application.

2.1.11. Being lifted onboard a drilling unit by a basket lift must be voluntary.

19

Two-rigs policy

The two-rigs policy entails that there must be at least two drilling units equipped for drilling a

relief well in the same area at the same time. This means that the drilling unit with the least

capability will set the limit for the project activities.

The following activities are not covered by the two-rigs policy:

• Pilot hole

• Drilling and installing the two first casings and the well head

• Drilling relief wells

Requirements for drilling units and operations in connection with the two-rigs policy

2.1.12 Both drilling units shall be fully functional and comparable with regard to being able to

drill a relief well.

2.1.13 There shall be equipment and material on board the drilling units to enable immediate

commencement of a relief well and without unnecessary delay to the relief well.

The Licensee has submitted documents which relate to the two-rig policy.

The Licensee shall adhere to these documents throughout the whole drilling season.

Furthermore, the documents shall be updated on a weekly basis and be submitted to the

BMP. The weekly updated schedule shall reflect last week’s operational progress.

2.2 Ports and onshore activities For the drilling project under application, it will be necessary for the Licensee to carry out

activities both onshore and in port. Examples of these activities and facilities are listed below:

• Port and storage facilities

• Diving services

• Offices

• Accommodation for shore-based employees

• Waiting facilities for drilling personnel in transit

• Personnel transport between the flotel and the port

• Workshop facilities for helicopters

• Depot for contingency equipment

• Facilities to change into survival suits

All onshore facilities are covered by the relevant regulations and requirements applicable in

Greenland. The BMP may, however, stipulate further requirements for activities onshore.

Ports and storage facilities

When dealing with a project of this extent, it will be necessary to store materials and equipment

onshore before onward transportation. Materials and equipment may be stored outside ordinary

port facilities.

20

Requirements for ports and storage facilities

2.2.1 If areas outside the port are used for storage, 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).

2.2.2 The Licensee shall ensure that all storage facilities are guarded day and night, so

that no trespassers can get to the stored materials and equipment.

2.2.3 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.

2.2.4 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.

2.2.5 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.

2.2.6 Recovery of materials or equipment may only take place following careful analysis

and assessment of the danger and risk involved in the work.

Diving services

During ice management activities there is a risk that a hawser or similar gets caught in the

propeller of an ice management vessel when the vessel couples on or off an iceberg. In such

cases diving services may be applied.

Requirements for diving services 2.2.7. Use of diving services shall be approved by the BMP.

2.2.8 Diving services may only be utilised if the work can be performed in a manner

which is responsible in terms of human health and safety.

2.2.9 Diving may only occur in port basins or in sheltered waters.

2.2.10 Divers must be trained and have the proper experience to be able to perform the

work in question.

Passenger transport between the flotel and the port

In order to transport employees between the port and the flotel, the Licensee may use locally

chartered boats, if these are in compliance with current Greenlandic and Danish legislation.

Such vessels do not require pre-approval from the BMP.

21

Requirements for the transport of passengers and freight to and from the flotel inside the

port

2.2.11 Only vessels approved according to “Tekniske forskrift om mindre fartøjer, der

medtager maksimalt 12 passagerer” (technical regulations for small vessels

carrying a maximum of 12 passengers) may be used.

2.2.12 The vessels shall be suitable for the purpose for which the Licensee intends to use

them.

2.2.13 The Licensee shall register and submit reports on consumption of fuel, oil etc., as

well as on emissions to air and sea, see section 10.3.

2.2.14 The use of chartered boats shall be included in the monthly onhire vessel report.

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.

Requirements for other activities 2.3.1 The Licensee is responsible for transport of all personnel between Scotland and

Greenland.

Medical care and medical treatment

At the drilling units it is necessary to have competent medical personnel to treat possible injuries

and illness among the crew and e.g. to provide the necessary medical treatment before a crew

member is transported to a hospital onshore. The Licensee has entered into an agreement with

the health services in Greenland that the health services will provide medical treatment to the

extent possible at the relevant time and place.

Requirements for medical care and medical treatment

2.3.2 The Licensee shall make sure that at least one physician and one nurse is present on

each of the drilling units.

2.3.3 There shall be sufficient medical care and medical treatment available on board all

of the vessels at all times.

2.3.4 Reporting of industrial injuries shall be in accordance with section 10.2.

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 facilities this shall be in accordance with Directive 2003/88/EC

22

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

2.4.1 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.

2.4.2 Working hours on board the drilling units and the support vessels may be no more

than 12 hours per shift. Exceptionally overtime of fours 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.

2.4.3 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.

2.4.4 The Licensee shall record the working hours of individual persons on the vessels.

2.4.5 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.

2.4.6 Normal rotation of work shall be 28 days on support vessels followed by 28 days off

ashore. For personnel resident in Greenland, the following work rotation is

recommended: 14 days offshore followed by 14 days off ashore, providing this is

possible within the normal rotation schedule.

2.4.7 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.

2.4.8 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.

2.4.9 Each drilling unit must 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.

2.4.10 “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.

2.4.11 Only persons of the same sex are allowed to be allocated the same cabin.

23

3 Authorisation terms for mobile drilling units, vessels and aircraft

Drilling units, ships and aircraft included in the drilling programme under 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 drilling programme under application

are reduced as much as possible in the context of an overall project assessment in accordance

with ALARP.

The following documentation on drilling units, ships and vessels has been received:

• Acknowledgement of Compliance (11.07.2008) from Norwegian authorities and a

Safety Case from the British authorities for Leiv Eiriksson.

• Safety Case from the British authorities for Corcovado.

• Certificate of Fitness from Lloyd’s Register for Alex Gordon, LR no. 7420730.

• Certificate of Fitness from the Norwegian Veritas (DNV) for Balder Viking, DNV

no. 21804 (14.05.2010).

• Certificate of Fitness from Lloyd’s Register for Jim Kilabuk, LR no. 7420754.

• Certificate of Fitness from the Norwegian Veritas (DNV) for Olympic Poseidon,

DNV no. 20115 (21.08.2008).

• Certificate of Fitness from the Norwegian Veritas (DNV) for Siem Aquamarine,

DNV no. 27783 (30.07.2010).

• Certificate of Fitness from the Norwegian Veritas (DNV) for Siem Danis, DNV no.

26397 (06.11.2007).

• Certificate of Fitness from the Norwegian Veritas (DNV) for Siem Louisa, DNV

no. 26398 (12.12.2007).

• Certificate of Fitness from the Norwegian Veritas (DNV) for Siem Ruby, DNV no.

27926 (07.10.2010).

• Certificate of Fitness from the Norwegian Veritas (DNV) for Sophie Siem, DNV

no. 26148 (21.01.2011).

• Certificate of Fitness from the Norwegian Veritas (DNV) for Toisa Vigilant, DNV

no. 24572 (24.03.2011).

• Certificate of Fitness from Bureau Veritas for Esvagt Don, no. GLS1000791

• Certificate of Fitness from Bureau Veritas for Esvagt Capella, no.

Oslo/BHO/20091214202548.

• Certificate of Fitness from xxx for MV Dollard.

• Certificate of Fitness from Germanischer Lloyd for Genius Star, GL. no. 107389

Third party certificate examinations and approvals on ships and drilling units provided by the

Licensee have been reviewed by the BMP.

24

3.1 Vessels in general

Requirements

3.1.1 General requirements for the vessels, aircraft and helicopters referred to above

include suitability for their purposes in question and compliance with international

requirements.

3.1.2 Before the drilling units are 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 drilling rigs

and vessels, 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 vessels and drilling installations are completely safe, and;

• a bridging document which describes duties and responsibilities in connection

with emergency response plans for cohesion between drilling units, ships,

aircraft, helicopter operations 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.

3.2 Drilling units and vessels

Prior to any drilling actions, the Licensee shall forward documentation that the health, safety,

environment and management systems of all parties/technical operators comply to best

international standards and have been updated to fit Greenlandic conditions regarding the

activities 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 and filling any gap between the systems and plans

of the parties/technical operators, thereby ensuring the entire project functions as one system and

one plan.

The systems and contingency plans of parties/technical operators which must be coordinated

through Licensee’s bridging document are those established by:

• Cairn

• Ocean Rig

25

• Mobile drilling units

• Trans Viking

• Olympic Shipping

• Northern Transportation Company Ltd. (NTCL)

• Siem Offshore

• Dealion Shipping Limited

• Esvagt

• Bremer Rederi

• Air Greenland

• Cougar Helicopters

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 parties/technical operators

and finds them suitable for the drilling project activities.

Requirements

3.2.1 The certificates of drilling units and vessels shall be without comments or remarks.

3.2.2 Drilling units and vessels shall register with KYSTKONTROL and they shall have

equipment fitted to link to the VMS (Vessel Monitoring System). Furthermore,

vessels 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 vessels are in Greenlandic waters.

3.3 Mobile drilling units The Licensee has applied for approval to use the following 2 drilling units:

The drill ship Corcovado, owned by Ocean Rig.

The drilling rig Leiv Eiriksson, owned by Ocean Rig.

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 units

are reduced as much as is practically possible, see section 79(1) of the Mineral Resources Act.

The BMP has received a health and safety report for Leiv Eiriksson, both as a Safety Case dated

20 August 2004, and an AoC dated 11 July 2008. The drilling ship, Corcovado, holds an

approval from the American Bureau of Shipping (ABS) dated January 3rd

2011, however, before

approval of the drilling ship, a Safety Case, certified by an independent third party (DNV) shall

be presented.

Requirements for mobile drilling units

3.3.1 An up-to-date and approved health and safety report (“Acknowledgement of

Compliance” (AoC) from Norway or a “Safety Case” from the United Kingdom)

26

or a similar health and safety report for the drilling units before the activities may

commence.

3.3.2 As supervisory authority, the BMP can conduct an inspection of the drilling units

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.

3.3.3 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 shall be

accompanied by an updated safety and health report.

3.4 Ships

The application covers approval of the vessels mentioned in section 2 to be deployed for the

implementation of the drilling programme.

Requirements for vessels

3.4.1 IMO guidelines 2010: ”GUIDELINES FOR SHIPS OPERATING IN POLAR

WATERS” Resolution A.1024 (26) shall be complied with. In the event of deviations

from the Guidelines, the reason for these shall be reported as well as the

compensatory initiatives that will be taken to ensure at least the same level of safety

as would exist, if the guidelines had been followed precisely.

3.4.2 The provisions of Danish Maritime Authority Executive Order no. 417 of 28 May

2009 on technical regulation for the safety of navigation in Greenland territorial

waters shall be complied with to the extent relevant for navigation carried out as part

of the drilling programme under application.

3.4.3 Each of the vessels shall at all times have at least one Fishing Liaison Officer on

board who can communicate in both Greenlandic and English.

3.5 Aircraft and helicopter operations

Application has been made to the Danish Transport Authority for approval of the four

helicopters and for the helidecks on the two mobile drilling units Leiv Eiriksson and Corcovado,

for take-offs and landings with the helicopter types mentioned in this chapter.

Documentation for approval of the four helicopters as well as the helideck on Leiv Eiriksson and

Corcovado from the Danish Transport Authority has been submitted to the BMP.

Requirements for aircraft and helicopter operations

3.5.1 All aircraft and helicopter operations shall at all times comply with current

international and national regulations.

27

3.5.2 Necessary approvals and licences shall be obtained from the Danish Transport

Authority, including the Authority’s technical and operative approvals of the four

helicopters and the Authority’s approval of helidecks for the helicopter types to be

used on the drilling units.

3.5.3 All passengers who are transported by helicopter offshore shall have a personal

survival suit in a size that fits them as well as access to a lifejacket. The survival suit

shall be of North Sea offshore standard and approved for use in Arctic waters.

3.5.4 All offshore helicopter passengers must be equipped with Personal Locator Beacons

(PLBs).

4 Drilling locations

The Operator has applied for permission to drill the following wells:

Licence block Well name UTM coordinates (UTM

zone 21, WGS 84)

Water depth (m)

Atammik AT1-A 558 903m E; 7 168 309m N 948

Atammik AT2-B 575 984m E; 7 137 731m N 1020

Atammik AT7-A 561 482m E; 7 180 386m N 905

Napariaq Delta A 440 494m E; 7 912 435m N 288

Eqqua Gamma-B 383 745m E; 7 706 791m N 1520

Lady Franklin LF6-B 467 957m E; 7 077 899m N 1160

Lady Franklin LF7-C 467 610m E; 7 097 284m N 989

4.1 Site survey evaluation regarding geohazards

The BMP requires that an evaluation of any hazards be carried out. In addition the BMP has the

following requirement to drilling of the top hole section:

4.1.1 Prior to commencing the actual drilling programme, pilot holes with a maximum

diameter of 9 7/8 inches must be drilled to the planned setting depth of the 20” casing.

The maximum depth of the pilot holes is the setting depth of the 20” casing shoe + 10 m.

4.1.2 The pilot holes shall be drilled in accordance with NORSOK Standard D-010, part 5.7.2.

4.1.3 The drilling activity shall take place so that sudden geohazards, such as unexpected gas

and abnormal pressure, can be managed. If unexpected geohazards occur or are

identified, the necessary precautions shall be taken, so that the drilling operation is

always being performed in accordance with the best international standards.

28

4.1.4 The actual drilling programme cannot commence before site surveys covering the relief

well locations have been finally approved by the BMP. This will be done after inspection

of the drilling units.

4.2 Requirements to data acquisition

Requirements

Besides the requirements set out in the Greenland BMP - Exploration Drilling Guidelines (See

Appendix 10) and § 18 of the exclusive licences 2002/15, 2005/06, 2008/11 and 2011/16

regarding reporting, acquisition, submission and storing of samples and data, the following shall

apply.

4.2.1 The BMP or a consultant appointed by the BMP shall be able to monitor all real time

data (including LWD and MWD) online during the entire drilling operation unless

otherwise is approved by the BMP.

4.2.2 The BMP shall be notified if any changes are made to the original logging programme

forwarded by the Licensee as part of the drilling application.

4.2.3 Samples of wet cuttings shall be forwarded to the BMP as stated in the Greenland BMP -

Exploration Drilling Guideline. However, sample sizes of at least 500g will be accepted

regardless of the 1000g stated in the Greenland BMP - Exploration Drilling Guidelines.

4.2.4 The BMP shall have the opportunity to carry out at least one geological inspection per

well. If the BMP finds it necessary further inspections can be required.

5 Drilling and well operations

Drilling operations in this chapter refer to all work conducted onboard the drilling units, directly

related to the construction of wells.

Part of Licensee’s application contains phase 6 documentation according to BMP Drilling

Guidelines. Phase 6 documentation contains a preliminary and brief description on structure and

planned operations constructing the wells. The Licensee shall forward a detailed drilling

programme and well design for BMP approval before commencing any drilling activities.

Before any drilling operation into hydrocarbon-carrying layers, the principle of having two

independent and at all times tested and verifiable safety barriers in place for all systems,

equipment and designs, shall be complied with. This principle is also known as the primary and

secondary barriers. According to this principle, should one safety barrier fail, there will always

be a secondary barrier in place to control the situation during the time it takes to re-establish the

primary barrier. This principle shall be in place for all installation systems and equipment, as

well as for the well design. The BMP requires the Licensee to include the two-barrier principle

for well designs as well as for the selection of drilling facilities.

29

The well designs are such that they can only be used for exploration use. There are no plans for

further use of the wells in addition to carrying out exploration drilling and collecting data.

In the period up to commencement of drilling, the Licensee and their technical operators will

review the well design and the operation plans. This review could lead to changes that will be

incorporated into the final drilling programme.

5.1 Requirements for drilling and well operations

5.1.1. Planning and execution of drilling operations shall be in accordance with the terms

and requirements under NORSOK D-010 and in accordance with the following

requirements.

5.1.2. A drilling operation may not be commenced until the BMP has inspected the drilling

unit as well as the planned drilling operation (pre-spud inspection at each drilling

location). This also applies for permanent well shutdown operations.

5.1.3. 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.

5.1.4. Before a drilling operation can be commenced, the Licensee shall present a final,

detailed drilling programme that describes all the changes made by the Licensee and

their technical operators and the final result. The drilling programme shall be verified

by an independent third party. Documentation of this review as well as a copy of the

final drilling programme shall be submitted to the BMP before drilling commences.

5.1.5. A detailed programme, descriptions of procedures and risk assessments for each

section to be drilled shall be prepared and verified by an independent third party.

Documentation of this verification as well as copies of the detailed drilling

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 technical operators selected for the specific areas of

work tasks. The BMP shall be invited to participate in the planned HAZID/HAZOP’s

for the project.

5.1.6. The BMP requires meticulous planning and description of the drilling operations in

the form of detailed procedures. The procedures shall be reviewed and verified by the

executing drilling companies together with the Licensee, before drilling work can be

commenced.

5.1.7. 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.

5.1.8. During the operations on board the drilling units, activity plans shall be prepared

daily for the following 24-hours. These plans shall identify necessary resources, and

30

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.

5.1.9. The Licensee shall have a final plan including a detailed timetable for drilling a relief

well.

5.1.10. When a drilling rig is moved between two locations; the BOP and marine riser shall

be placed on the rig.

5.1.11. 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.

5.1.12. The drilling operations shall at all times adhere to the relevant health, safety and

contingency plans approved by the BMP.

5.1.13. The most recent and most detailed programmes for the operations shall be presented

to and approved by the BMP before drilling can be commenced.

5.1.14. A general plan for limited well testing and for well appraisal shall be submitted to the

BMP prior to start up of a drilling operation.

5.1.15. Limited well testing shall be approved by the BMP before commencement.

5.1.16. The BMP can furthermore require the Licensee to carry out additional studies with

regards to improving drilling in progress and to meeting the targets set up for the

drilling operations, including further studies for use in well appraisal.

5.1.17. The BMP may at all times impose further requirements to the drilling operations, if

the BMP finds this necessary. The Licensee shall execute the requirements imposed

within a reasonable time frame.

5.2 Primary and secondary well barriers

It is a requirement for all drilling operations in Greenland waters that at least two independent

safety barriers are in place for all systems, equipment and designs. These are called the primary

and secondary barriers. These barriers shall be independent of each other and shall be tested and

verifiable at all times.

Primary Barrier:

Drilling mud is the primary barrier to maintain the well pressure equiliberium between

formation pressure and hydraulic pressure. Therefore drilling mud is monitored continuously in

order to ensure that there is enough weight to prevent any influx or outflow.

Secondary Barrier:

31

The Secondary Barrier is the BOP (Blow Out Preventer). The BOP is placed on the seabed and

is connected to the well and the marine riser which connects to the drilling unit. The BOP has

several valve systems which can be used to ensure safe execution of operations. The valve

systems have several independent means of activation for closure. The BOP provides the

possibility to cut the drill pipe situated in the well and thereafter seal the well.

Release mechanism if connection is lost to the BOP

It shall be possible to activate the BOP by means of electric and hydraulic connections. The

BOP system shall be constructed in such a way that it ensures safe conditions by shutting down

in the event of a failure in the system (fail to safety). If connection to the BOP is lost due to the

loss of one or both the electrical and hydraulic connection, a “deadman’ system shall be installed

which will automatically be activated prompting the BOP to seal off the well. If this system is

not activated, an acoustic trigger that can be controlled remotely shall be installed, which can

activate the BOP from another location than the drilling unit. This remotely operated system

shall be independent of the hydraulic and electric triggers. This additional safety feature shall be

used in those situations where contact to the drilling unit is lost and the ‘deadman’ system fails

to activate. In addition it must be possible to use a Remote Operated Vehicle (ROV) to

hydraulically activate the valve system manually; allowing the BOP to seal off the well.

Highly advanced measuring and logging instruments will be used during the drilling operations.

These will constantly provide information e.g. about pressure conditions in the well, so that the

crew can respond without delay to any abnormal conditions.

Requirements for barriers

5.2.1 Identification, testing and verification of barriers and barrier elements throughout the

whole drilling operation shall be in accordance with NORSOK D-010 and in

accordance with the requirements listed below.

5.2.2 The Licensee shall construct the barrier systems so that there are at least two

independent safety systems at all times. The Licensee shall incorporate this principle

in all systems, equipment and designs relating to the barriers.

5.2.3 The entire barrier system shall be controlled and verified by an independent and

recognised company prior to commencement of the drilling operation. The Licensee

shall present documentation that this has in fact taken place within the past year.

5.2.4 If an abnormal situation raises doubt about the functioning or integrity of the barriers,

the drilling operations shall cease immediately and normal conditions must be

restored before operations may be resumed.

5.2.5 The Licensee shall use measuring equipment that is fitted on the drill string in the

well during drilling. The measuring equipment shall provide information about

pressure conditions in the well at all times, so that the Licensee can respond to any

abnormal conditions.

5.2.6 The quality and consistence of the drilling mud shall be monitored from the drilling

unit at all times via the measuring equipment installed for this purpose. Upon any

suspicion that the drilling mud does not comply with the primary barrier

32

requirements, drilling operations shall cease immediately and the drilling mud shall

be restored to normal condition before drilling may be resumed.

5.2.7 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).

Requirements for BOP

5.2.8 The BOP specification and its control systems shall be in compliance with NORSOK

Standard D-001, section 5.10.3 Functional Requirements, NORSOK D-010 and in

accordance with the requirements stated below.

5.2.9 The BOP’s functionality with regards to shutdown valves shall comply with the

requirements in NORSOK D-010. There shall be minimum two valves that can cut

the pipes which are run through the BOP during operations or when installing a

barrier element. Plans and procedures shall be prepared for testing the BOP’s

activation systems, including its emergency activation systems. These procedures

shall include testing the systems after the BOP has been installed on the seabed.

5.2.10 The BOP’s mechanical valve systems shall be tested every two weeks to ensure their

integrity.

5.2.11 Each of the BOP’s electrical control systems shall be tested at least once a week.

5.2.12 “Fail to safety” shall be part of all elements within the BOP.

5.2.13 The BOP shall be equipped with a remotely operated acoustic activation module. The

remote control for the acoustic activation device shall be portable so that it can be

transported in a crisis situation and operated at a later stage, for example after

evacuation to life boats. Procedures for management and for the division of

responsibilities on the rig shall be prepared with regard to the operation and use of

the remote-controlled acoustic activation device. The acoustic trigger shall be placed

in an appropriate place and as close to the primary evacuation routes as possible.

5.2.14 An additional acoustically operated module shall be located on both drilling units.

The extra acoustic activation module on Corcovado shall be able to activate Leiv

Eiriksson’s BOP. The extra acoustic activation module on Leiv Eiriksson shall be

able to activate Corcovado’s BOP.

5.2.15 All spare parts for the BOP shall consist solely of spare parts approved by the

supplier.

5.2.16 The shutdown and disconnect from the BOP in the event of an emergency shall be no

more than 45 seconds.

33

5.2.17 The BMP requires the Licensee to conduct a seal-off test on the BOP (possibly

without drill pipe) while the BOP is placed on the seabed, in order to verify the

ability to perform a shutdown with the BOP with the assistance of a ROV.

5.2.18 The BOP shutdown system shall contain an integrated deadman system. The

deadman system shall be tested while the BOP sits on the seabed, ensuring that it

shuts down automatically in case of electric/hydraulic signal loss. This test shall be

performed at least once during the drilling project.

5.2.19 A cutting test with the BOPs Shear ram shall be conducted. The results of the test

shall be approved by the BMP.

5.3 Handling and use of chemicals

In connection with the exploration drilling operation, the Licensee has applied for approval to

use a number of chemicals in the drilling operations. These chemicals are listed in Annex 3.

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

5.3.1 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.

5.3.2 One or more persons shall be assigned to the chemicals storage facilities as

responsible for storage security, maintenance etc.

5.3.3 The storage facilities used for storing the chemicals shall be suited and approved for

the purpose.

5.3.4 Only persons with necessary training in handling chemicals may work with these.

5.3.5 Persons who work with chemicals shall utilise appropriate and approved safety

equipment. Equipment will be inspected before the drilling operation begins, and

regularly with subsequent inspections.

5.3.6 A log shall be kept of the quantities of chemicals in the storage facilities, as well as

of the ongoing consumption of the chemicals.

5.3.7 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 BMP/NERI.

5.3.8 The chemicals shall be protected against fire, theft and water damage.

34

5.3.9 Storage facilities which hold chemicals shall have ventilation to the outside. Storage

facilities shall be approved by the BMP on an inspection before the drilling operation

begins and continuously on later inspections.

5.3.10 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 drilling operation begins and continuously on later

inspections.

5.3.11 An alarm shall be connected to the ventilation systems which will give a warning

signal in the event of break down.

5.3.12 Spills of and accidents involving chemicals shall be reported immediately to the

BMP.

5.3.13 Any movement by ship of chemicals shall be in accordance with the prescribed

provisions in the The International Maritime Dangerous Goods code (IMDG Code).

5.3.14 Statements shall be prepared for total imports, exports and consumption of chemicals

during the entire operation shall be forwarded to the BMP before 31 December 2011.

5.4 Storage, handling and use of explosives

The Licensee has applied for approval to carry out special blasting operations in connection with

the oil exploration drillings. The explosives will be used to ‘burn’ a hole in the pipe that keeps

the wellbore stable, as the pipe is a steel pipe through which gases and liquids cannot penetrate.

The steel pipe is to be perforated to enable flow measurements. The Licensee has hired

Schlumberger as the technical operator to perform the blasting operations.

In this context, Schlumberger has applied for a licence to import explosives and detonators, and

to use them in Greenland.

The BMP approves the use of explosive materials by the Licensee in connection with operations

executed in conjunction with the drilling programme.

Requirements for storing, handling and using explosives

5.4.1 The following types and amounts of explosives have been approved for import and

utilization:

• ”COMPONENTS, EXPLOSIVE TRAIN N.O.S (booster Containing HMX)” of

0.0075 kg

• ”FUZES, DETONATING” of 0.018 kg

• ”COMPONENTS, EXPLOSIVE TRAIN NOS. (Heaxanol, Nonant, Phenyl

Mixture)” of 0.012 kg

• ”DETONATORS, ELECTRIC” of 0.001 kg

• ”FUZES, DETONATING” of 0.002 kg

• ”CORD, DETONATING” of 2.1 kg

35

• ”ARTICLES, EXPLOSIVE. N.O.S (Ammonium, Percholate, Carbazole

Mixture)” of 0.004 kg

• ”CORD DETONATING” of 1.35716 kg

• ”Cartridges, Oil Well” of 2.75 kg

• ”CHARGES, SHAPED” of 13.9 kg

• ”CARTRIDGES POWER, DEVICE” of 0.0155 kg

5.4.2 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.

5.4.3 Blasting operations shall follow regulations and requirements in Explosives Standard

OFS-GHSE-S019, A1 dated 14th

November 2006, (Schlumberger dated 14th

November 2006) and also Detonators and Igniters, Field Safety Procedures, SLB-

QHSE-S010 (Schlumberger dated 4th

September 2009.

5.4.4 If the Licensee wants to import and temporarily store explosives in Greenland, this

shall be in accordance with Greenland legislation and 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.

5.4.5 As a general rule, all explosives shall be transported with the drilling vessels 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 5.4.6 are met.

5.4.6 If the requirement in 5.4.5 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.

5.4.7 The onshore and offshore storage facilities used for storing the explosive materials

shall be suited and approved for the purpose.

5.4.8 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 shall comply

with part 4 of Home Rule Statutory Order no. 14 of 21 August 2006 on explosive

materials, dealing with requirements for storage, manager in charge, and approval

of explosives depots and obtain a BMP approval.

36

5.4.9 Lost or missing explosives and detonators shall be notified immediately to the police

and to the BMP.

5.4.10 Blasting operations may only be carried out by persons with the relevant

qualifications.

5.4.11 Any movement by ship of explosives shall be in accordance with the prescribed

provisions in the IMDG Code.

5.4.12 A statement of imports, consumption and exports of explosives and detonators shall

be forwarded to the BMP before 31 December 2011.

5.4.13 Responsibility for transport, storage, handling and use of explosives and detonators

rests with the Licensee at all times.

The BMP have received an inventory list from Licensee’s technical operator, Schlumberger

(Greenland DG dated 11th

April 2011). The BMP approves the types and amount of explosive

listed in the document to be used in this project.

5.5 Storage, handling and use of radioactive materials The Licensee has to use radioactive materials (sources) in measuring equipment in connection

with exploration drilling. The radioactive materials are to be used in the data collection process.

The Licensee plans to carry out these measurements while the well is being drilled. The

Licensee has hired Schlumberger to be the technical operator in charge of all work involving

radioactive materials.

In this context, the Licensee has applied for approval to use radioactive sources in their work in

connection with exploration drilling.

Requirements for storage, handling and using radioactive materials

5.5.1 Handling and using radioactive materials shall follow regulations and requirements,

according to Radiation Standard OFS-GHSE-S018 A02 (Schlumberger dated 11th

July 2001).

5.5.2 As a general rule, all radioactive materials shall be transported with the drilling unit

in order to prevent unnecessary transit at ports in Greenland.

5.5.3 Persons that are to work with the radioactive materials and sources shall possess the

relevant qualifications.

5.5.4 The radioactive sources may not be left in the well or on the seabed. Used or

defective sources shall be sent to an approved reception centre when they are no

longer usable. If a radioactive source gets stuck in the well, this shall immediately be

reported to the BMP.

5.5.5 The BMP may approve that a radioactive source is left in a well, provided that the

Licensee has documented that it is not possible to retrieve the source from the well.

37

The BMP may impose additional requirements for the abandonment of the well to

ensure that the radioactive material does not spread.

5.5.6 The work involving radioactive materials shall be carried out under the supervision

of qualified personnel.

5.5.7 Any movement by ship of radioactive materials shall be in accordance with the

prescribed provisions in the IMDG Code.

5.5.8 The storage facilities used for storing the radioactive materials shall be suited and

approved for the purpose.

5.5.9 The Licensee shall submit a statement of imports, consumption and exports of

radioactive materials. This statement shall be forwarded to the BMP before 31

December 2011.

5.5.10 The Licensee shall endeavour to keep the radiation at doses substantially below the

recommendations in the ICRP (International Commission on Radiological

Protection) guidelines. The radiation doses may not exceed ICRP’s specifications.

5.5.11 If employees have access to areas with radiation, where the radioactive dose is

greater than or equal to 20 millisieveret in a single year, these employees shall be

equipped with a personal dosimeter which can measure the types of radioactivity

they are exposed to. The measurements from the dosimeters shall be sent to the BMP

and shall be stored by the Licensee for a period of 10 years.

5.6 Abandonment/suspension plans

The BMP has chosen to distinguish between three 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 shall 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.

5.6.1 Emergency suspension The emergency suspension is only an option in the event of acute, external threat or a drilling

unit failure meaning the correct drilling location has to be abandoned.

Requirements for emergency suspension of a well 5.6.1.1 The Licensee may only carry out an emergency suspension if a temporary or

permanent abandonment is not possible.

38

5.6.1.2 When performing an emergency well suspension, the Licensee shall comply with

the requirements in NORSOK D-010, section 9.3.6 Suspension and the below

requirements.

Additional requirements

5.6.1.3 When performing an emergency suspension, the Licensee shall activate the BOP on

the seabed so that it seals off the well.

5.6.1.4 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.

5.6.1.5 There must be two independent barrier systems in place, to the extent possible, which

can seal off the well.

5.6.1.6 If time allows, a mechanical plug shall be installed in the casing below the seabed.

5.6.1.7 If an emergency suspension has commenced, the 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.

5.6.2 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 exploration in

the well is expected to be resumed. This application shall also contain a description of

responsibility and supervision conditions during the temporary abandonment.

Requirements for temporary well abandonment

5.6.2.1 When performing a temporary well abandonment, the Licensee shall comply with the

requirements in NORSOK D-010, section 9.3.7 Temporary abandonment and the

below requirements.

5.6.2.2 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.

39

5.6.2.3 Parts of the well below the zone(s) that the Licensee wishes to investigate shall be

abandoned permanently. See requirements under permanent abandonment.

5.6.2.4 The Licensee shall submit documentation of the effectiveness and durability of the

abandonment no later than seven days after the shutdown.

5.6.2.5 Permanent abandonment of the well shall be performed by 31 December 2012 at the

latest, unless the BMP has approved an abandonment plan with a longer time frame.

5.6.3 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 abandonment

5.6.3.1 When performing a permanent abandonment of a well, the Licensee shall comply with

the requirements in NORSOK D-010, section 9.3.8 Permanent abandonment and

section 9.7.2 removing equipment above seabed and the requirements below:

5.6.3.2 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.

• 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 drilling area will be left

and how the condition of the area will be checked shall be included.

5.6.3.3 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.

5.6.3.4 The Licensee shall submit documentation for effectiveness and durability of the

abandonment no later than seven days after the abandonment is completed.

5.6.3.5 When drilling has terminated, the drilling area shall be restored to its original

condition, as far as possible. Before drilling 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.

40

5.6.3.6 If environmental monitoring following the abandonment of the activity shows what

the BMP considers to be unacceptably 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 9.7.

Abandonment activities shall be approved by BMP before being commencement. The BMP may

in this connection stipulate further requirements.

6 Licensee’s environmental and management systems, including safety, health 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 Bureau of Minerals and

Petroleum (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 and management systems (SHEM) represent the overall interaction

between the drilling units, other vessels as well as all onshore activities. The Licensee has

submitted documentation that SHEM meets the best international standards, and corresponds

with the reality of the project.

The Licensee is obligated to prepare the so-called “bridging documents”. The Licensee shall

ensure that the bridging documents meet the requirements in the approval and ensure that the

technical operator’s’ environmental, safety, health and contingency response plans and

management systems comply with those of the Licensee and the requirements in this approval.

6.1 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 in the plans 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

41

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

6.1.1 At all times, work shall be planned, organised and carried out in a way that gives

adequate consideration to health and safety in accordance with North Sea offshore

standards.

6.1.2 The Licensee shall ensure that all parties involved in the operation have carried out a

Health and Safety Report (HSR), cf. NORSOK Z-013 or similar international

standards, that covers the relevant areas of work of the parties.

The Licensee shall also ensure that the interaction between the vessels, the aircraft as

well as the onshore organisation is covered by the HSR.

The HSR shall fulfil the requirements set by the Greenland Government according to

section 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 safely 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 shall then be reduced to a level that is as low as reasonably practicable

(ALARP).

6.1.3 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.

42

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.

6.1.4 Before drilling begins, the Licensee shall submit 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.

6.1.5 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.

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. The BMP may at all times demand, that the Licensee submits this documentation.

6.1.6 The Licensee shall ensure that the employees have full access to the workplace

description/job function description for their work.

6.1.7 The Licensee shall ensure effective prevention of hazards of explosion, fire,

poisoning, suffocation, etc.

6.1.8 Technical aids shall 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.

6.1.9 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.

6.1.10 Work that cannot be carried out in an appropriate manner with regard to safety and

health shall 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.

6.1.11 Boiler suits must be in an easily visible colour with reflectors so that outside

personnel are easy to see.

6.1.12 The BMP requires safety meeting to be held at sensible intervals, e.g. once every

week. The Licensee shall submit the minutes from safety meetings to the BMP no

later than one week after the meeting has been held.

43

6.2 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.

The BMP finds that the Licensee’s and their technical operator’s contingency plans, are suitable.

All contingency plans shall be updated regularly to represent the actual conditions. In the event

of of major changes during the drilling program, the Licensee shall forward updated contingency

plans. In addition the BMP will examine contingency plans in connection with inspection and

exercises.

General requirements for emergency response and contingency plans

6.2.1. Contingency plans shall at all times be updated so that they correspond to the way

work is organised, crew levels, and the actual conditions on site. The BMP shall at all

times be informed about amendments and updates of contingency plans.

6.2.2. 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 sent immediately to the BMP.

The BMP may, if necessary, demand changes to reduce health and safety risks in accordance

with the ALARP principle.

6.3 The roles of the authorities in the Licensee’s emergency response

According to section 80 of the Mineral Resources Act, the Greenland Government shall set up

an emergency response committee (hereinafter “the BMP Contingency Committee”). The

function of the committee is to coordinate the efforts of the authorities in accident and disaster

situations within the mineral resources area, including all activities in connection with oil

exploration and exploitation.

6.3.1 The members of the BMP Contingency Committee monitor the measures taken by Cairn

and its subsidiary company Capricorn Greenland Exploration 1, as well as its technical

operators/sub suppliers.

6.3.2 The BMP Contingency Committee consists of a chairman (the Deputy Minister General

of the BMP), 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 Greenland Self-Government

National Contingency Commission, representatives from Kanukoka and the fire service

have also been appointed to the BMP Contingency Committee.

6.3.3 Before the exploration activities are launched, at least one desktop exercise shall have

been carried out between the BMP Contingency Committee and the Licensee. Execution

of the exercise shall be approved by the BMP before the activity is commenced.

44

6.3.4 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

- All Cairn’s departments in Greenland

- Greenland Command

- BMP’s Contingency Committee and Emergency Response Group

6.3.5 A desktop exercise between the BMP Contingency Committee and Licensee shall be

carried out at the end of May/beginning of June. The exercise shall have a major

uncontrolled oil spill as case scenario and the following elements shall be included in

the exercise:

• Activation and deployment of OSRL

• Combat of oil spill with mechanical recovery, dispersal and in-situ burning

• Activation of international and local help (vessels and manpower etc.)

• Drilling of a relief well

The exercise shall be approved by the BMP and the BMP can demand a new exercise, if

deemed necessary.

6.3.6 Before the two-rig drilling programme is launched; a practical exercise, with the

deployment of at least one boom into the sea, shall be carried out. The exercise shall be

approved by the BMP and the BMP can demand a new exercise, if necessary.

6.3.7 A desktop exercise shall be carried out between the BMP Contingency Committee and

the Licensee in mid August. The case scenario and its content shall be approved by the

BMP and the BMP can demand a new exercise, if deemed necessary.

6.3.8 As a minimum one live exercise shall be carried out between the BMP Contingency

Committee and the Licensee during the course of the exploration activities. The exercise

shall be approved by the BMP and the BMP can demand a new exercise, if necessary.

6.3.9 Emergency exercises shall be evaluated by the BMP. The BMP can, on the basis of an

evaluation of the emergency drills, demand adjustments to the emergency response plan

or that activities be stopped.

6.3.10 Any changes to the existing emergency response plan shall be approved by the BMP. In

the event of major changes, the BMP may require new emergency drills to be carried

out.

45

6.4 Emergency response for drilling units and other units

The BMP has reviewed the contingency plans and finds them suitable for the project.

Requirements for emergency response for drilling units and other units

6.4.1 The BMP demands that all companies in the drilling 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 which are

relevant for the area covered by the contingency response plans. As a minimum, the

contingency response plans shall be in accordance with NORSOK Z-013 and in addition

the following requirements:

6.4.2 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.

6.4.3 The emergency response documents shall be updated regularly so that at any time they

cover all the conditions present. Before drilling 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.

6.4.4 Work shall go to safe state if there is no contingency response plan for the actual

conditions.

6.4.5 Vessels acting as stand-by vessels shall not, at the same time, be designated to move

icebergs or be part of MOB contingency response.

6.4.6 The stand-by vessel shall be equipped with at least two MOB boats or one MOB boat

and another system to recover people who have fallen overboard.

6.4.7 The vessel acting as stand-by vessel shall have the temporary capacity necessary to

recover the entire crew of the drilling platform.

6.4.8 The stand-by vessel may not move away from the drilling unit, unless the performance

of contingency response or consideration for the safety of its own or other ships makes

this necessary.

6.4.9 The Licensee shall ensure that persons, who work in areas open to the sea, so-called

moon pool areas, or work over the side of the drilling unit, wear lifejackets.

6.4.10 The drilling unit shall close down to safe state, if it loses contact with the outside world

or with its emergency response vessels. Safe state may not be lifted until communication

has been restored.

46

6.5 Emergency response for major accidents

Emergency response for major accidents

The Licensee has submitted contingency planning documentation for major accidents, which the

BMP finds satisfactory and has approved.

Requirements for emergency response for major accidents

6.5.1 The Licensee shall submit contingency plans for major accidents that cover the entire

drilling programme and which take the contingency plans of the technical operators into

consideration. Contingency plans for major accidents shall be in accordance with

NORSOK Z-013. Furthermore, the following requirements shall be met:

6.5.2 The Licensee shall ensure that all technical operators have included descriptions of major

accidents in their contingency plans.

6.5.3 Contingency plans shall, as a minimum but not limited to, contain the following

elements:

• Blow-out, including subsurface gas blow-out.

• Fire on board.

• Seepage of hazardous chemicals.

• Seepage of radioactive materials.

• Helicopter accidents.

• Collisions with other vessels.

• Loss of vessel stability.

• Collapse in vessel structure.

• Incidents of poisoning of several persons.

• Extreme weather.

6.5.4 The Licensee shall ensure that all contingency plans for major accidents are in

compliance with the actual conditions that exist at any given time.

6.6 Emergency response for H2S The Licensee has submitted an H2S Contingency Plan which has been found satisfactory and

suitable for the project by the BMP.

Requirements

6.6.1 The contingency plans for H2S shall be in accordance with NORSOK D-010 and in

accordance with the following requirements.

6.6.2 The drilling unit shall be equipped with adequate and sufficient H2S safety

equipment to manage H2S. The Licensee shall submit documentation that H2S safety

equipment has been tested and that it has been approved in accordance with

international standards, before drilling may commence. Existing reference standard is

ISO 15156-1, which is also based on NACE MR-01-75.

47

6.6.3 On arrival at the drilling unit, all personnel shall be given the necessary training in

managing releases of H2S.

6.6.4 The Licensee shall submit documentation for the concentrations of H2S permitted in

the wellbore before drilling has to cease and the wellbore shall be shut down

permanently.

6.6.5 If more H2S is identified than can be managed, and in amounts exceeding the

amounts defined in advance, the wellbore shall be shut down permanently. The

closure shall be carried out in the best possible way in the given situation.

6.6.1 H2S emergency response, drills

6.6.1.1 Before drilling can commence, evacuation drills shall be carried out appropriately for

the actual conditions for the drilling locations.

6.6.1.2 As a minimum, the operator shall hold weekly contingency response drills, including

contingency response drills outside the times stipulated. The drills shall be designed

based on possible incidents such as fire and H2S releases. Practical drills shall be

held at regular intervals.

6.6.1.3 Through internal verification procedures and drills, the Licensee shall ensure that

personnel, particularly key persons, have adequate/thorough knowledge of the

content of the contingency response plans and the H2S contingency response plan

before the drilling operation is commenced.

6.6.1.4 Plans, equipment and the organisation of personnel, education and training, shall be

so as to facilitate safe discovery, warning, rescue, evacuation, and abatement of H2S

amounts that exceed the stated limit values. Conditions pertaining to the drilling

location and the surrounding area, where relevant, shall be taken into consideration.

6.7 Emergency response for blow-out and relief well

Together with Ocean Rig Ltd., the Licensee has submitted documentation for plans and

procedures for employees on board the drilling units, which are to be followed in the event of a

blow-out. These have been found satisfactory and suitable for the project by the BMP.

Uncontrolled inflow to the wellbore can be divided into three types:

• Limited blow-out which reaches the rig and which cannot be managed by the rig’s mud

systems (primary), but can be stopped by closing the outer barriers (secondary) in less

than 20 minutes.

• Blow-out which cannot be stopped in less than 20 minutes after commencement will

usually require external assistance. This assistance may be that another rig drills a relief

well to stop the leak.

48

• Subsurface blow-out, where flows are between different geological strata down in the

reservoir.

Requirements for emergency response for blow-out

6.7.1 The Licensee shall comply with the requirements of NORSOK D-010, section 4.8.1,

installation blow-out contingency plan, when they prepare the contingency plan for

blow-out, as well as the requirements below.

6.7.2 The Licensee shall have contingency plans for the three types of uncontrolled inflow

mentioned above.

6.7.3 The BMP shall be notified as soon as possible, if a drilling operation gets out of

control.

Emergency response for relief wells

The Licensee has submitted documentation which describes the overall requirements with which

the Licensee shall comply in connection with drilling a relief well.

In the application, the Licensee has described possible locations for the relief wells. These relief

wells are to be used to drill down to the point where the problems are in the wellbore. For

example, this may be severe leakage of gas or liquids. This is done to enable high-pressure

pumping of heavy liquids into the formation from which the leakage originates. This seals the

formation so that the balance between the drilling mud in the wellbore and the pressure from the

geological formations is re-established.

Requirements for relief wells

6.7.4 The Licensee shall comply with the requirements of NORSOK D-010, section 4.8.2,

plan for drilling a relief well, when they prepare the contingency response plan for

the relief well. There are also the following requirements.

6.7.5 Two independent sites for relief wells shall be identified for each well. Each of the

sites shall be located within an area where the data coverage of collected survey and

seabed-sample data is sufficient and has been verified with regard to possible

geohazards.

6.7.6 When it is no longer in use, a relief well shall be permanently abandoned as

described in BMP regulations and requirements (see section 5.6).

6.7.7 The Licensee shall prepare a relief well plan which includes a drilling programme.

This plan shall take account of any changes in the external environment during the

progress of the planned well, and it shall allocate adequate time to complete drilling

of a relief well before conditions in the external environment make such drilling

impossible.

49

6.8 Ice management

In order to be allowed to drill offshore Greenland, the Licensee shall submit a plan for ice

management.

The Licensee has submitted a plan; Ice Management Plan, for ice management around the

drilling locations. The BMP has reviewed this and found it satisfactory and suitable for the

project.

The plan contains: Description of vessels and aircraft available for ice management, description

of the environmental conditions, ice management procedures, responsibilities of personnel, ice

observation, data collection, a description of icebergs as well as a description of pack ice.

Conditions and requirements for ice management are valid for all ice that threatens the drilling

programme and drilling units. It is the responsibility of the OIM to assess whether ice which is

not an immediate threat for the drilling unit, cf. the action plan for ice management around the

drilling locations, should be treated as a threat anyway and managed accordingly.

The ice management plan describes how the Licensee will manage ice around the drilling units.

The Licensee has divided the offshore area around the drilling units into circular time zones.

Radar on the drilling units and icebreakers, as well as satellite data, is used to monitor icebergs.

Furthermore, the Licensee can also use aircraft for surveillance of the offshore area outside the

range of the ship radar. The Licensee has access to three helicopters which can be used to

monitor icebergs. Icebergs drifting towards the drilling rig are managed so that they change

track.

The offshore area around the drilling vessel is divided into time zones that are demarcations of

the time it takes for a possible iceberg to reach a drilling vessel before it will become critical.

Figure 6.8.1.A shows a drilling unit surrounded by 4 zones. Zone 4 is the area in which it is

possible to discover and track icebergs. Zone 4 goes from Zone 3 out to the range of the vessels’

radars. Zone 3 is the T-zone (T-time), which is adjusted according to the operation performed by

the drilling unit and the speed of the iceberg. The drilling unit shall cease operations when

icebergs cross into Zone 3 and begin preparations for potential disconnection and securing of the

well. When the iceberg leaves the zone again; operations may commence. Zone 3 is between

zone 4 and zone 2. Zone 2 is a waiting zone. This means that the drilling unit must be ready to

leave the drilling location. The drill stem must be raised out of the well and the well must be

secured. The drilling unit is ready to decouple from the BOP. Zone 2 must have a radius of at

least 1,000 meters from the drilling unit. Zone 1 is an exit zone. If an iceberg crosses the

boundary to this zone, the drilling unit must leave the drilling location and move to a safe

distance from the iceberg. Zone 1 must have a radius of at least 500 meters from the drilling

unit.

50

Figure 6.8.1.A: T-time and the four zones

Any planned operation on the drilling unit shall take into consideration the T-time in the

planning of all operations. This means that for all planned operations, there must be time to shut

down the planned operation and secure the well. The well is secured through a shutdown of the

original operation, followed by installation of a plug in the upper section of the wellbore as an

extra barrier in the well, if it should prove necessary to disconnect and leave the well

temporarily.

A simplified calculation of the size of the T-zone (zone 3) is given below.

Time to get the equipment up and secure the well:

Time to retrieve equipment and secure well:

1) Time to secure the well 7 hours

2) Time to disconnect the riser. 2 hours

Total 9 hours

Iceberg’s speed stated in knots/hour (Ds).

Calculation of the size of the T-zone:

51

Size of the zone = 9 hours (T-time) x 0.5 knots (Ds)

Size of the zone = 4.5 nautical miles

Figure 6.8.1.B: The figure shows an example of calculation of T-time

In the plan, the Licensee describes how they will change the track of the icebergs away from the

drilling unit. The Licensee will tow larger icebergs away with the icebreakers. For smaller

icebergs, or icebergs shaped so that it is not possible to secure normal towage to them, a tow net

will be used. Smaller ice floes are diverted from collision course with the drilling unit using the

wake generated by the icebreaker’s screws.

The BMP permits the Licensee to use their ice management vessels for a joint ice management

zone, see an example below in figure 6.8.1.C:

52

Figure 6.8.1.C: Example of a multi-rig ice management model

If the Licensee wishes to apply the multi-rig ice management model, a plan shall be submitted

which, as a minimum shall contain the following elements:

• Documentation that the multi-rig ice management model meets the best

international standards, including an analysis of the risk of using the chosen

vessels, and how they will be deployed between the rigs.

• Description of how the Licensee will ensure that the rigs are adequately covered

by the ice management vessels at all time.

• The maximum distance permitted between two rigs for the Licensee to continue

to use the multi-rig ice management model.

• Criteria (e.g. weather) for when the Licensee has to stop gathering several rigs

under the same ice management zone.

Requirements for ice management

6.8.1 There shall be adequate ice management at all times. None of the drilling units may at

any time be without vessels that can protect them against ice moving towards them.

6.8.2 The BMP requires that the Licensee use a 4-zone ice management model. The 4 zones

are described in the table below:

Zone 1 Removal from location The drilling unit decouples from the BOP and

moves away from the drilling site.

Zone 2 Waiting zone The drilling unit is ready to decouple from the

BOP, the well is secured.

Zone 3 T-zone Securing of well

Zone 4 Monitoring and management

zone

Monitoring and management of icebergs and

sea ice.

53

Table 6.8.1: 4-zone ice management model

• As a minimum, Zone 1 shall have a radius of at least 500 meters from the drilling

unit.

• As a minimum, Zone 2 shall have a radius of at least 1,000 meters from the drilling

unit, 500 meters outside Zone 1.

The Licensee may add additional time zones dependent on iceberg velocity e.g. one-hour zone.

In such case; the drilling unit shall leave the drilling location whenever an ice-threat crosses into

this zone. These time zones cannot replace the requirements for distances determined for Zones

1 and 2.

6.8.3 The Licensee shall ensure that emergency response for ice management is at all times

updated to the actual conditions in the area in which the drilling units are operating.

Documentation of this shall be submitted to BMP before the operation is started.

6.8.4 In relation with the multi-rig policy, a minimum of one ice management vessel shall

at all times remain with the drilling unit. However, the Licensee shall document that

there is the adequate number of ice management vessels around the drilling unit at all

times.

6.8.5 In relation to single rig operations, a minimum of two vessels for ice management,

shall at all time remain with the drilling unit. The Licensee shall however at all time

be able to document that the sufficient number of ice management vessels are present

around the drilling units.

6.8.6 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.

6.8.7 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.

6.8.8 The drilling unit shall install a plug in the wellbore, or some other well barrier with

similar function and qualities, and be ready to disconnect the riser pipe from the

BOP, before an iceberg, or other ice that may put the safety of the drilling unit in

jeopardy, is within 1,000 meters of the drilling unit.

6.8.9 Ice management activities shall 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

shall 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.

6.8.10 The OIM has the right and obligation to carry out an earlier shutdown and

disconnection, if the OIM assesses that this is necessary.

54

6.9 Emergency response for oil spill

The Licensee has forwarded an Oil Spill Contingency Plan to the BMP. This is considered

satisfactory by the BMP.

The Oil Spill Contingency Plan contains an action plan, a description of resources to manage oil

spill, a description of relevant legislation, environmental conditions and training, as well as

contact information.

The Oil Spill Contingency Plan also describes how the Licensee’s emergency response is to

work internally, between the Licensee and their sub-suppliers, as well as how the Licensee will

communicate with the Greenland emergency response.

The Licensee has incorporated the Oil Spill Sensitivity Atlas, including plans for deployment of

equipment and personnel, provided by NERI for the BMP. The Oil Spill Sensitivity Atlas

describes various areas’ sensitivity towards oil pollution, as well as the opportunity for

protecting especially vulnerable areas, anchorage etc.

Oil Spill Response Limited (OSRL) is the sub-supplier of the Licensee’s Oil Spill Emergency

Response Plan. OSRL is part of the Global Network Response which is a partnership agreement

between several large international oil spill emergency response organisations.

The Licensee’s Oil Spill Contingency Plan describes the resources which the Licensee and

OSRL can implement depending on the scope of any oil spill.

As part of the Oil Spill Contingency Plan, the Licensee has also forwarded a list of equipment

and material held ready according to the scale of an oil spill as well a table of likely response

times for this equipment and personnel in the event of a spill.

Requirements for emergency response for oil spill

6.9.1 In the event of a large oil spill, the procedure is always that the drilling unit or the vessel

will alert Greenland Command and the Licensee’s emergency response group in the UK.

The role of Greenland Command, in the event of an oil spill caused by the Licensee’s

activities, is to save lives, to activate BMP’s Contingency Committee and to warn other

vessels in the area. The Licensee is responsible for responding to an oil spill caused by

own activities. It is the responsibility of the Licensee to initiate and coordinate the oil

spill response. The BMP’s Contingency Committee can request that Greenland

Command or other relevant authorities assist in the response, if this is deemed necessary.

6.9.2 Any expenses that Greenland Command or any other authority may incur as a

consequence of assisting in an oil spill caused by the Licensee, shall be covered by the

Licensee as described in chapter 11 on collateralisation and guarantees.

6.9.3 The Oil Spill Contingency Plan shall at all times be updated for the actual conditions, in

Greenland as well as outside of Greenland, which might have an impact on the plan.

6.9.4 The Licensee shall ensure that the Oil Spill Contingency Plan can be executed at all

times.

55

6.9.5 If any changes are made to the Oil Spill Contingency Plan, the Licensee shall forward an

updated version to the BMP for approval.

6.9.6 The Licensee shall, in addition to the Oil Spill Contingency Plan, submit a weekly 7-day

oil spill model. This oil spill model must take into consideration the local wind and

weather conditions, in order to respond in the best way to a possible oil spill.

6.9.7 Responding to an oil spill with in-situ burning, must follow the guidelines in the

application form (BMP 2011 Application for use of in-situ burning during an oil spill) in

which it is clearly stated that in-situ burning in general shall take place at least 10km

from the coast of Greenland.

6.9.8 In the event of an oil spill, the Licensee shall apply to the BMP for approval for the use

of in-situ burning. The application form In-situ Burning Application Form for Greenland

Waters, drawn up by NERI, see Annex 8, must be used for this purpose. The application

will be approved, if it is found that the effects of in-situ burning are less harmful to the

environment than if mitigation was limited to attempts at mechanical recovery or no

measures at all.

6.9.9 Responding to an oil spill with dispersants may only take place with BMP/NERI-

approved dispersants. BMP/NERI has approved “Slickgone NS” (Dasic International

Ltd.). Other agents than this shall be approved before use.

6.9.10 In the event of an oil spill, the Licensee shall apply to the BMP for approval to use

dispersants. The application form Dispersants Application for Greenland Waters, drawn

up by NERI, see Annex 9, shall be used for this purpose. Dispersants will be approved, if

it is found that the effects of dispersants are less harmful to the environment than if

mitigation was limited to attempts at mechanical recovery or no measures at all.

6.9.11 The Oil Spill Contingency Plan contains a monitoring programme to be initiated in the

event of a large oil spill (Tier 3). This programme shall primarily cover the oil content in

water and sediment. This programme shall be initiated immediately after any large oil

spill.

6.9.12 If there are significant changes in the stock of equipment and dispersants, the BMP shall

be notified immediately. The BMP may then demand that the Licensee secures

equipment and dispersants in another way for use on a possible oil spill.

6.9.13 The BMP can at any time instruct the Licensee to take further measures in their oil spill

response, if the BMP finds this necessary.

56

6.10 SAR emergency response

The Licensee has submitted the document “Aviation Manual”, which describes the overall

requirements for SAR emergency response. The BMP finds this document suitable for the

project.

In the event of an offshore helicopter crash, the Licensee will initiate an SAR emergency

response. The function of the SAR emergency will be to retrieve persons in distress at sea. In

this context, the following requirements shall be met:

Additional requirements for SAR emergency response

6.10.1 In the event of an emergency landing offshore, the passengers must be recovered from

the water within 120 minutes.

6.10.2 Equipment requirement for SAR helicopters:

• The helicopter shall be suitable for the purpose.

• The helicopter shall be equipped with a suitable winch system capable of

lifting personnel out of the water or from vessels into the helicopter.

• The helicopter shall have auto-hover capability without crew input.

• The helicopter shall have Rotocraft high-resolution radar with high-definition

profiling; allowing it to carry out fine-mesh mission planning, i.e. the

capability to hover at a specific place and then search in well defined

rectangles.

• The helicopter shall have multi mission module auto-pilot capability with

automatic search patterns that compensate for prevalent drift forces.

• The helicopter shall have forward-looking infrared radar capability.

• There shall be a dedicated and well trained rescue crew for the helicopter who

can operate the equipment on board.

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 shall 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.

57

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, shall 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.

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 (cook, cleaning, plumbing, electricians etc.)

as well as certified positions (captain, ship's mate, chief engineer officer, helicopter pilots, etc.).

Basic safety courses

Everybody on board the drilling units shall 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

shall also be trained in identifying and responding to H2S, Safe Job Analysis (SJA) and Work

Permit processes (WP).

All personnel on board shall 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 in addition to their

primary position on the vessel or the rig. Examples of such emergency response special courses

include life boat operator, fire fighter, smoke diver, helicopter guard, first aid, courses for

medicinal personnel, etc.

Requirements for competences, qualifications, training and drills of the personnel 7.1.1 The Licensee shall ensure that personnel have the qualifications necessary to perform

their work in a safe and appropriate manner.

7.1.2 The BMP requires all personnel to have an approved and valid course certificate in

basic safety for offshore personnel in the North Sea.

7.1.3 All personnel shall be able to produce an approved and valid medical certificate

complying with the Offshore North Sea Standard, a certificate to work offshore.

7.1.4 Weekly drills shall be held for each drilling crew, which cover the precautions to be

taken in connection with liquid/gas infiltration into the wellbore. The Licensee is

responsible for ensuring that personnel on board have completed the relevant courses

58

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.

7.1.5 Personnel working with explosives, radioactive materials and certain chemicals shall

be able to document training and qualification/certification within the area.

7.1.6 All relevant drilling personnel on the drilling rigs shall have a valid IWCF Offshore

North Sea Standard Well Control Certificate.

7.1.7 The Licensee shall 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.

7.1.8 All specialist courses in connection with emergency response shall take place in

accordance with the Offshore North Sea Standards and requirements.

7.1.9 Training and certification of offshore personnel for auxiliary vessels shall take place

in accordance with the Offshore North Sea Standards and requirements.

7.1.10 Training of crews who are to operate oil spill equipment shall take place in

accordance with the Offshore North Sea Standards and requirements.

8 Socially sustainable development

The Licensee shall prepare a Social Impact Assessment (SIA) if an activity is assessed to have

significant impact on society, see section 76 of the Mineral Resources Act. The activity applied

for; up to seven oil exploration drillings, is in the long term assessed to have a possible

significant impact on society. Therefore the Licensee shall prepare a SIA.

The BMP received an SIA on 4 March 2011. The SIA describes a social baseline

(demographics, social networks, vulnerable groups, economic aspects, unemployment, level of

education, infrastructure and safety, political administration etc.) and after this it describes how

the Licensee expects that society will be affected by the applied for activity and presents

proposals for how these effects will be sought maximised in the event of desirable effects and be

sought mitigated in the event of undesirable effects.

The SIA report will be approved when requirements for changes from the BMP have been

incorporated satisfactorily. The revised SIA shall be forwarded to the BMP.

Requirements for socially sustainable development 8.0.1 The Licensee shall implement initiatives to ensure that the drilling project is

socially sustainable in both the short and long term.

8.0.2 The Licensee shall use Greenlandic labour in accordance with the requirements of

the legislation. Other sources of labour may be used if the required qualifications

59

are unavailable in the Greenlandic labour force, or if there is a shortage of local

labour.

8.0.3 The Licensee shall use Greenlandic suppliers and companies in accordance with

the requirements of the legislation. Greenlandic suppliers and undertakings

Enterprises and supplies from other countries may be utilised if Greenland

companies are not competitive either technically or commercially.

8.0.4 The Licensee shall co-operate with government authorities in accordance with the

provisions of the Mineral Resources Act and the exploration and exploitation

licence, see section 76 of the Mineral Resources Act and section 15 of the licence.

Plans for socially sustainable development shall be prepared. This co-operation

shall consider the scope and initiatives of recruitment targeting the Greenlandic

labour force, and the extent to which Greenlandic companies are to be used,

including, in the long term, for tendering procedures. The collaboration will also

cover training initiatives, etc. In addition, the co-operation shall be described in a

written agreement; an Impact Benefit Agreement (IBA). The IBA shall be signed

by the Licensee, the Greenland Government, Qaasuitsup Kommunia, Qeqqata

Kommunia and Kommuneqarfik Sermersooq.

8.0.5 In the IBA, an agreement shall be made on the conditions below. These conditions

shall be quantified if possible. The objective is to be able to measure and document

that social sustainability improves year by year, including conditions such as an

increase in the use of Greenlandic labour, an increase in the use of Greenlandic

companies, and participation in education efforts etc. The conditions shall be

described in annexes to the IBA. These annexes shall be updated and renegotiated

each year and shall be concluded one month before the activity or part of the

activity is planned to begin. The annexes shall include:

• Goals for using Greenlandic labour in the project where possible.

• Goals for using Greenlandic companies where possible, including purchase

of goods such as water, food, fuel and services as supplies for the MODUs

and support ships.

• Goals for establishing internships etc. where possible.

• Initiatives to upgrade the skills of Greenlandic labour in order to, in the

long term, be able to work in drilling operations/oil production and

servicing of these.

• Initiatives to upgrade Greenlandic companies to make companies

technically and commercially able to take part in drilling operations/oil

production and servicing.

• Contributions to knowledge-building in the mineral resources sector.

• Requirements to report any significant changes to activities which may, in

the long term, impact, for example, the priority given to publicly supported

training and education initiatives.

• Information on tasks/supplies which are being considered outsourced

to sub-suppliers or operators.

60

The IBA shall be followed up by plans for implementation of the initiatives agreed. These plans

shall be approved by the authorities.

8.0.6 The Licensee shall, as soon as possible after the end of the drilling season, and no

later than 1 March 2012, prepare a complete report for the BMP on performance with

regard to meeting the goals in the IBA agreement.

9 Environment

NERI has assessed the environmental impacts in connection with Capricorn’s plans for

exploration drillings in the marine area offshore West Greenland, more specifically in the two

blocks north west of Disko and two blocks west of Nuuk. The assessment was based on the

descriptions of the planned activities in Capricorn’s application, Capricorn’s EIA, and

Capricorn’s answers to supplementary questions.

9.1 Environmental background studies

Prior to approval of the planned drilling activity, the Licensee shall complete background studies

to describe the areas around the drilling sites. These studies shall include a description of the

benthic (bottom-dwelling) fauna as well as a description of the physical characteristics and

chemical composition of the sediment. Such studies were carried out at the four proposed

drilling sites in the blocks: Atammik, Lady Franklin, Eqqua and Napariaq.

NERI has received a short summary of the background studies carried out by Capricorn in

winter 2010/2011. Preliminary results of the benthic surveys and sediment analyses have been

described in the relevant EIAs. NERI expects to receive a full report by end of May 2011. The

surveys will be supplemented with surveys near the wellbore immediately before and after

drilling pursuant to the Environmental Studies Plan, Annex J (Capricorn Greenland, 28 February

2011). The supplementary studies will include photos and videos documenting the distribution

of benthic fauna on the seabed and collection of sediment samples.

Requirements to the background studies:

9.1.1 The report on the background studies carried out by the Licensee to describe the

areas around the proposed drilling sites shall be submitted to the BMP and NERI for

approval before any drilling activity is commenced.

9.2 Discharges and emissions

9.2.1 Atmospheric emissions

The primary source of atmospheric emissions is the exhaust from engines. Capricorn’s EIA

report calculates the total consumption of oil (diesel, gas oil) from 12 vessels (ships/drilling

rigs), for the entire period, at approx. 29,305 tonnes. To this amount the jet fuel consumption of

helicopters has to be added, calculated at 333 tonnes. In the EIA reports, Capricorn explains that

only oil with low content of sulphur (< 1.5%) will be used for machinery. Total atmospheric

61

emissions of greenhouse gases (not including the helicopter emissions) can be calculated at

92,571 CO2 equivalents. Emissions of other pollutants are calculated at relatively low levels

(NOx around 1,750 tonnes, SOx 120 tonnes, VOC 60 tonnes, and CO 475 tonnes). These

emissions are almost the same as those calculated for Capricorn’s drilling programme in 2010.

NERI assesses these emissions to be relatively low in view of the extent of the activities, and

that they will not cause environmental problems for the local area. With regard to emissions of

CO2, the quantity emitted will increase Greenland’s annual emission of this greenhouse gas by

13.5 % (calculated on the basis of figures from 2008, when Greenland emitted 685,000 tonnes).

There could also be additional emissions from oil flaring in connection with testing of a possible

oil discovery in a well. Capricorn estimates that this, as a maximum, will mean flaring of almost

5,000 m3 of oil. The BMP shall approve any flaring to be carried out.

NERI assesses that a further reduction in the planned emissions is not possible, but recommends

that unplanned gas emissions should, as far as possible, be flared to reduce greenhouse gas

emissions.

Atmospheric emission requirements:

9.2.1.1 Atmospheric emissions shall be minimised as much as possible.

9.2.1.2 Gas cannot be vented, but shall be flared as far as possible.

9.2.1.3 Fuel for machinery shall be low-sulphur fuel, with a sulphur content of less than 1.5

% by weight.

9.2.2 Marine discharges

Marine discharges (in addition to drilling mud and drill cuttings, see section 9.5) include waste

water from the daily routines on board the ships. Capricorn has calculated the total quantities at

just below 15,000 m3 of grey waste water (kitchen, showers, sinks) and around 5,000 m

3 of

black waste water (toilets). Organic kitchen waste will be ground and subsequently discharged

to the sea. The EIA report for each of the sites assesses that the ecological impact from these

marine discharges will be minor. One drilling discharge corresponds to the discharge of waste

water generated by slightly less than 400 people, which is similar to 2-3 months of waste water

discharge from a large settlement in Greenland.

Discharges also include other types of waste water in the form of drain water from decks and

surfaces on ships and drilling rigs, as well as bilge water from tanks and engine rooms. Bilge

and drain water can contain oil, and this type of water will therefore be collected and led though

an oil separator. Capricorn expects the oil content of the water discharged into the sea from the

oil separator to be below 15ppm, which means the IMO/MARPOL limit values will be complied

with.

NERI concurs with Capricorn’s assessments that the effects of these discharges are minimal.

According to the information stated, it appears that no ballast water will be discharged during

the operation. Discharges of ballast water from the ballast tanks could entail a risk of spreading

62

alien species from water taken in from other marine areas. If Capricorn wants to discharge

ballast water, it should follow the IMO/OSPAR guidelines or the Canadian guidelines for ballast

water management, in order to reduce the risk of introducing alien species.

Marine discharge requirements:

9.2.2.1 Any discharge of grey and black waste water from toilets, bath facilities and

kitchens, as well as kitchen waste, shall be in compliance with the provisions of

Annex IV of the MARPOL Convention. Environmentally hazardous substances may

not be discharged with waste water.

9.2.2.2 Discharges also include other types of waste water in the form of drain water from

decks and surfaces on ships and drilling rigs, as well as bilge water from tanks and

engine rooms. Bilge and drain water can contain oil and this type of water shall

therefore be collected and led though an oil separator. The oil content of the water

discharged into the sea from the oil separator must not exceed 15 ppm.

9.2.2.3 Water from well testing shall comply with the IMO/MARPOL standard for oil

content in discharged water, i.e. below 15 ppm oil.

9.2.2.4 When discharging oily water, IMO/MARPOL guidelines for measuring and

managing oily waste water shall be complied with. If the limit value of 15 ppm is

exceeded, this shall be reported immediately to BMP. Discharges of oil shall be

quantified.

9.2.2.5 Ballast water may not be discharged during the normal operations. If operational

reasons justify pumping out ballast water, the operation shall follow IMO/OSPAR

guidelines or potentially the Canadian guidelines for managing ballast water to

minimize the risk of introducing alien species. This means that discharge of ballast

water must take place at least 200 nautical miles from the shore and where water

depth exceeds 200 metres. If this is not possible, discharge must be as far from shore

as possible, however at least 50 nautical miles from shore and where water depth

exceeds 200 metres.

9.2.2.6 Only discharges of organic kitchen waste, grey and black waste water will be

allowed.

9.2.2.7 If there is a need to discharge radioactive material to the environment, such

discharges shall be approved by the BMP/NERI.

9.3 Waste management

The EIA provides a brief outline of waste management. Waste will be sorted. None of the waste

will be discharged into the sea. Produced waste quantities are expected to correspond to the

quantity produced by the drilling operations in 2010. Approximately 400 tonnes of waste were

handled, of which approximately ¼ was characterised as hazardous waste. Hazardous waste

includes oil waste and excess chemicals. Non-hazardous waste: pallets, wrapping, metal parts

etc. was either incinerated or taken to a landfill.

63

According to the Waste Management Plan (Annex I) prepared by Capricorn, solid waste will be

sorted and stored on board the various vessels and will then be brought onshore for further

treatment (incineration, recycling or landfilling) in or outside Greenland. It is stated that

facilities in Aasiaat and Nuuk will be used if the capacity exists. Hazardous waste will be

transported to Denmark for management and landfilling. A person responsible for waste

treatment is planned to be on board each vessel, and this person will ensure compliance with

Capricorn’s Waste Management Plan.

NERI assesses the plans for waste management to be acceptable.

Requirements for waste treatment

9.3.1 Waste treatment shall be carried out as described in the Waste Management Plan

prepared by Capricorn (Annex I).

9.3.2 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. Prior to the

commencement of drilling activity, the Licensee shall enter into an agreement on

waste management e.g. through a contract with Royal Arctic Line, as well as pay all

of the expenses associated with this, including any inspections by the authorities.

9.3.3 Types and amounts of waste and its management (storage, transport, incineration,

land filling and export) shall be reported monthly to BMP, according to the form in

the Waste Management Plan.

9.3.4 Oil polluted materials or oil residues shall be transported in sealed containers.

9.3.5 No form of burning or incineration of solid waste is allowed on board any of the

drilling units.

9.3.6 Storage and transport of waste shall take place in a safe manner with regard to the

environment and human health.

9.3.7 Capricorn is responsible for safe and environmentally correct transport and transfer

of all kinds of solid waste.

9.4 Chemicals

Capricorn Greenland Exploration 1 Ltd (Cairn Energy Plc.) has applied for an approval to use

chemicals to be added to the drilling mud used during the exploration drilling operations. In the

table in Annex 3 all chemicals are listed and the quantities the company plans to use and

discharge.

The chemicals applied must 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 table. If the company wishes to

64

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.

With five exceptions, the chemicals listed in the table fulfil the requirements for classification as

PLONOR or ‘yellow’. NERI has received information from Capricorn about the remaining five

‘red’ drilling chemicals: Ultrahib, which is a part of the water-based drilling mud system

ULTRADRILL, and the contingency chemicals Antifoam Agent D206, KI-3924 as well as D500

and D600G GASBLOK. If used, the contingency chemicals are expected to be discharged in

relatively small quantities. However, the amount of discharged Ultrahib corresponds to 45-48

tonnes per well (in addition 45-48 tonnes/well are kept for contingency). NERI has had

particular focus on the use and discharge of “yellow” and “red” chemicals (#1 Memo regarding

reports for environmental surveys before and after the oil exploration drillings carried out during

the summer of 2010 by Capricorn Greenland Exploration 1 Ltd (Cairn Energy Plc), NERI

30.03.2011; #2 Drilling chemicals and discharge policy (drilling muds), NERI 05.04.2011). In

addition, NERI has asked for a more thorough justification from Capricorn (Memo 16.04.2011).

Capricorn has accounted for their assessment of the environmental pros and cons of the use and

discharge of the water-based drilling system ULTRADRILL to the sea (Best Practice

Environmental Options Assessment for Water Based Mud Disposal Methods, Cairn 08.04.2011;

26.04.2011) as well as for the technical and safety justifications for the use of ULTRADRILL

(Mud System Selection and Considerations for Rank Exploration Wells, 27.04.2011). NERI has

assessed, in compliance with Norwegian authorities’ evaluation of Capricorn’s reviews, that

substantiated technical and safety justifications for use of the mud system ULTRADRILL are at

hand, which, together with the lack of drilling mud reception and treatment facilities in

Greenland, legitimate discharge of the amount of Ultrahib stated. Ultrahib has low toxicity and

will not be bioaccumulated, but is classified as ”red” due to slow biodegradation.

To comply with the OSPAR guidelines (substitution principle), which is part of the stated policy

of the BMP, and which recommend phasing out ”red” chemicals, the operator is subject to a

substitution obligation. By this, NERI understands that Capricorn shall take action to substitute

hazardous chemicals with chemicals posing the least harm to the environment, giving the

highest priority to chemicals classified as ”red”.

With this substitution obligation, the plans for the use and discharge of chemical in the drillings

are assessed as acceptable.

Requirements when using chemicals

9.4.1 Only the chemicals which are described in the list mentioned in Annex 3 are allowed

to be used.

9.4.2 All chemicals must be registered in the Danish product register PROBAS and

BMP/NERI shall have a copy of their classification.

9.4.3 The chemicals may only be used and discharged in the quantities described in the list

in Annex 3.

9.4.4 In 2011 one ‘red’ chemical (Ultrahib) will be allowed in the drilling mud and a

further four as contingency chemicals. This approval is conditioned by an active

effort by Capricorn to - in the future –substitute environmentally harmful chemicals

65

with the least harmful alternatives and with focus on the ‘red’ chemicals. This

obligation includes all chemicals. Capricorn shall, before 1 September 2011, submit a

substitution plan, which describes the initiatives to reduce and phase out ‘red’

chemicals in future drilling campaigns.

9.5 Discharge of drilling mud, drill cuttings and cement

Drilling mud is used, a.o., to control the pressure in a wellbore. Drill cuttings are the material

that is removed from the wellbore when drilling. Both types of material are usually discharged

into the marine environment when the drilling mud is water-based and contains only approved

additives.

When drilling the two top segments of the wellbore, drilling is performed without a riser, which

means it is not possible to pump material up to the drilling rig. Drill cuttings and drilling mud

are therefore discharged to the seabed during drilling of these two segments. The two upper

segments of the borehole are 755 and 790 metres in the southern drilling locations and 350 and

312 metres in the northern locations. 584 m3of drill cuttings with 3401 m

3 of drilling mud will

be discharged in the southern location, and 261 m3 of drill cuttings with 1421 m

3 drilling mud

will be discharged in the northern locations.

For top hole drilling the drilling mud will not contain Ultrahib. Instead ”seawater and Bentonite

sweepes” will be used (”Mud system selection and considerations for rank exploration wells”,

Capricorn 28.04.2011).

When drilling out the subsequent segments down to 2,000-4,000 m, a riser will be used and the

drilling mud and drill cuttings will be led to the rig, where drilling mud will be reused and the

cuttings will be cleaned and discharged. The quantities of drill cuttings discharged during this

phase are estimated at total 169-290 m3 per hole and the quantity of discharged drilling mud is

estimated at 978-1506 m3 per hole. The cuttings will be cleaned and discharged more or less

continuously during the drilling (an estimated 13-26 days per hole). The drilling mud will be

reused when drilling the individual wells and if possible transported to the next drilling site for

further reuse.

For safety reasons, a part of the mud may be discharged to the sea at the platform. The quantities

for discharge are estimated as a maximum to 6,000-8,000 tonnes at each drilling. The wellbore

will be cased with cement (a total of 1000-1425 tonnes per hole), and it is assessed that 35-40 %

of this quantity will be discharged to the seabed.

Capricorn states that only water-based drilling mud will be used. The drilling mud consists

mainly of the mineral barite (barium sulphate), which is not harmful to the environment

provided that the content of heavy metals is less than 1 ppm. It has been classified as PLONOR

by OSPAR.

When drilling in oil-carrying layers, there is a risk of bringing up drill cuttings with a natural

high content of oil. If such oil-contaminated cuttings cannot be cleaned to a level allowing them

to be discharged, they will be stored on board and will be transported to a place outside

Greenland for remediation/landfill.

66

Capricorn’s own assessment of the environmental impacts from discharged drill cuttings and

drilling mud is acceptable, and generally in line with the assessment of NERI. However the

requirements for environmental monitoring have been tightened in accordance with the NERI

memos: #1 Memo regarding the reports for the environmental surveys before and after the

exploration drillings in the summer by Capricorn Greenland Exploration 1 Ltd (Cairn Energy

Plc), 30.03.2011; #2 Drilling chemicals and discharge policy (drilling muds), 05.04.2011) (see

9.7 Environmental Monitoring). This gives the opportunity to monitor the presence and amount

of selected chemicals in the environment around the wellbores.

Requirements to discharge of drilling mud, drill cuttings and cement:

9.5.1 The discharge of drilling mud and drill cuttings may only take place, if written

approval has been obtained from the BMP/NERI.

9.5.2 Drilling mud shall as far as possible be reused, including at the subsequent wellbore.

9.5.3 Drilling mud may only be discharged, if the content of additives has been declared

and approved by the BMP/NERI.

9.5.4 In the barite used the content of heavy metals shall be less than 1 ppm. The content

of heavy metal in the barite used shall be documented and during the drilling

operation, representative samples of the barite shall be taken and analysed.

9.5.5 Before any controlled discharge, representative samples shall be taken from drilling

mud, drill cuttings and cement. These samples shall be analysed to ensure that

requirements to discharges are observed. The samples shall be stored and be

accessible to the BMP/NERI for later verification.

9.5.6 Samples of drilling mud from each of the drilled sections and intervals shall be

accessible to the BMP/NERI for later environmental chemical analyses ref. 3.3.2.21

and 3.3.2.22.

.

9.5.7 Discharge of drilling mud shall be reported for each wellbore.

9.5.8 The BMP may approve discharge of up to 8,000 tonnes drilling mud from each of the

wellbores, if the mud has to be discharged at the platform after drilling has ceased.

9.5.9 The wellbore shall be cased with cement (a total of 1000-1425 tonnes per hole) in a

manner which ensures that only small quantities will be discharged to the seabed.

9.5.10 The discharge of drilling mud and drill cuttings shall take place in such a manner that

the seabed is only disturbed to a minor degree and in accordance with Capricorn’s

modelling of particle distribution (Annex G), i.e. with a layer thickness of up to 1 cm

at a distance of up to 100 m from the wellbore and 0.01 mm at a distance of up to

2.7-8.4 km from the wellbore corresponding to a covered area of 6.8-17.9 km2.

Compliance with the requirement in section 9.5.9 shall be documented, cf. section

9.7.4.

67

9.5.11 When drilling in oil-carrying layers, the drill cuttings may have a natural content of

oil which will make it impossible to clean the cuttings sufficiently for discharge.

Such oil contaminated drill cuttings shall be stored on board and transported to an

approved reception and treatment facilities outside Greenland.

9.5.12 Drilling mud, drill cuttings and cement that contain more than 15 ppm hydrocarbons

shall not be discharged. A ‘Static Sheen Test’ shall be carried out to determine the oil

content in the drill cuttings and to monitor that the oil content is below the limit.

9.5.13 Oil-contaminated drilling mud, cuttings etc. (with a hydrocarbon content > 15 ppm),

which no longer can be used or cleaned must be transported to approved reception

and treatment facilities outside Greenland.

9.5.14 The Licensee may discharge drilling mud and drill cuttings without approval, if

required by the contingency plan in order to save lives or prevent major material

damage.

9.6 Helicopter transportation

To ensure that seabird breeding colonies on the coast of West Greenland are not disturbed,

helicopter flying is regulated.

Requirements

9.6.1 When flying between drilling sites and land, helicopters shall keep a distance of

3,000 m (horizontally and vertically) from breeding colonies of thick-billed murre,

razorbill, kittiwake, fulmar and great cormorant, and a distance of 200 m horizontally

and 500 m vertically from colonies of other gull species than kittiwake, as well as

black guillemot, puffin, common eider and Arctic tern (see the distribution of these

colonies in the relevant areas in Annex 4). These requirements do not apply to SAR

operations.

9.7 Environmental monitoring

In its application documents, Capricorn has described the activities which the company will

initiate in order to monitor the effect on the environment. These include:

• consumption and emissions (use of resources: fuel, water, etc.)

• discharges to the sea (with account of the different substances, including oil in

discharges from oil separators and other sources)

• Atmospheric discharges (statements of CH4, CO2, GHGs, NOx, SOx, VOCs, N2O and

CO, based on consumption);

• solid waste (statements of waste types and treatment)

• studies of the seabed surrounding the drilling sites.

• discharges of naturally occurring radioactive materials (NORM) from the wellbore.

68

Environmental reporting will be performed regularly as stipulated in the Environmental

Monitoring and Reporting Plan, Annex J (Capricorn Greenland, 28 February 2011). Reporting

forms are not available presently. Complete documentation of consumption and discharge shall

be available no later than two months after the drilling activities has ended.

NERI assesses that the plans for environmental monitoring have been described in a satisfactory

manner, however if inspections or investigations show significant or unexpected impact on the

marine environment, further examinations must be initiated in compliance with requirements

established by the BMP/NERI.

The BMP/NERI requires that discharges of naturally occurring radioactive materials (NORM)

from the wellbore material are surveyed to form part of the baseline for future assessments of

exploration and possible exploitation activities in the area.

With reference to the results of the environmental monitoring in connection with Capricorn’s

drilling campaign in 2010 (three reports developed by Benthic Solutions, Post drill monitoring

survey, for each wellbore in 2010) as well as NERI’s memo regarding the use of “red”

chemicals (Drilling chemicals and discharge policy (drilling muds), 05.04.2011) separate

monitoring is required of following chemicals:

• The concentration of Ultrafree in the sediment from discharged drilling mud around the

drilling sites.

• The concentration of Ultrahib in the sediment from discharged drilling mud around the

drilling sites.

Environmental monitoring requirements:

9.7.1 The Licensee shall launch the Environmental Monitoring Programme which is

attached to each EIA as Environmental Studies Plan, Annex J (Capricorn Greenland,

28 February 2011). This programme shall at all times correspond to the activities in

the licence area. Moreover, release of NORM from the wellbore shall also be

monitored.

9.7.2 The environmental monitoring programme must allow for statements of atmospheric

and marine emissions/discharges of substances utilised or produced.

9.7.3 The consumption of oil, water, etc., as well as emissions to the atmosphere and

discharges to the marine environment, shall be recorded continuously. Furthermore,

waste volumes and waste treatment shall be registered, and reports shall be submitted

if unplanned discharges etc. occur. Monthly reports of all monitored parameters shall

be prepared and forwarded to the BMP on a spreadsheet as indicated in Annex 6.

9.7.4 The forms in Annex 6 shall be developed and approved by the BMP/NERI before

drilling is initiated. The forms shall contain all information in correspondence with

the reporting forms for Capricorn’s drilling campaign in 2010, Annex 6, however,

with the addition, that final reception facilities for hazardous waste are stated.

9.7.5 Before and after each completed drilling activity, a visual inspection of the area

surrounding the wellbore shall be carried out in order to assess the effect of the

69

drilling activity on the benthic fauna. The distribution of benthic fauna on the seabed

shall be documented (photos and video), and sediment samples shall be collected as

described by Capricorn in Environmental Studies Plan, Annex J (Capricorn

Greenland, March 2011). An updated plan, approved by the BMP/NERI shall be

available before drilling activities are initiated. In the updated plan the monitoring of

Ultrahib and Ultrafree concentrations in the sediment (from discharged drilling mud)

around the drilling sites shall be included. If inspection and investigations show a

significant or unexpected impact on the marine environment, further benthic fauna

studies and chemical analyses should be carried out in agreement with the

BMP/NERI in order to quantify the effect.

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 Licensee has entered into a contract with a number of technical operators and sub-suppliers

on delivery of services in connection with the drilling programme. This section pertains to the

Licensee, technical operators and sub-suppliers (and other enterprises with operational

responsibilities covered by the Mineral Resources Act) that are neither registered nor resident in

Greenland (non-Greenlandic enterprises).

Requirements

10.1.1 All enterprises carrying out work in Greenland and which are liable for taxation under

the taxation legislation of Greenland, shall be registered as an employer in the Greenland

Business Register and have a valid GER number.

10.1.2 Enterprises and individuals carrying out work in Greenland shall follow the taxation

regulations applicable at all times.

10.1.3 The Licensee, technical operators and sub-suppliers with no place of residence or

domicile in Greenland shall submit information about working periods and income of

employees. This information shall be submitted to the Greenland authorities, Tax

Agency at [email protected] and the BMP at [email protected]. The reporting form (see

Annex 5) shall be applied for this purpose. Forms for technical operators and sub-

suppliers shall 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 shall also submit an

overall list of the technical operators, sub-suppliers and other enterprises with

responsibility for operations, stating which of these have been active in Greenland in the

relevant month and which have not. The reporting form is in Annex 5.

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, shall be filled out by the Licensee, technical operators and sub-suppliers

(and other enterprises with responsibility for operations that are subject to approval

70

under the Mineral Resources Act). The forms shall be collected by the Licensee and

submitted by no later than 31 January 2012. An English version of the forms for 2011

has not yet been completed. The Licensee shall contact the Tax Agency at

[email protected] for further instruction if the Licensee, technical operator or sub-

supplier with no place of residence in Greenland are liquidated before 31 January 2012.

10.1.4 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.

10.2 Accident reporting Accidents associated with exploration activities shall be reported in accordance with the

following conditions:

10.2.1 Industrial accidents and near miss incidents shall be reported to the BMP, unless

agreed otherwise with the BMP in the specific case.

10.2.2 The Licensee shall 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, shall also be reported to the

BMP immediately.

10.2.3 Doctors, dentists and trained nursing staff shall report occupational diseases, and

similar harmful conditions they observe or suspect in connection with mineral

resources activities, to the BMP.

10.2.4 The BMP shall 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.

10.2.5 Accidents shall be reported to the BMP by telephone, and then in writing. The BMP

will provide an address, telephone number and email address to be used for reporting

purposes.

10.2.6 In the event of serious accidents, the BMP shall be notified as quickly as possible.

10.2.7 Every month statistics of all accidents and near-miss incidents shall be prepared. The

statement shall be compared against relevant international statistics of safety in the

oil industry.

10.3 Other registration and reporting 10.3.1 The final report shall be in accordance with chapter 12 of BMP Drilling Guidelines.

The report shall account for all interpretations and results of surveys and calculations

carried out.

71

10.3.2 The BMP shall 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 2.3.2 of this document or chapter 12 of the BMP Drilling Guidelines, aspects

relating to format and type shall be agreed with the BMP before submission.

10.3.3 Specific conditions for registration. The Licensee shall 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.

The BMP may lay down supplementary conditions for registration.

10.3.4 Every day the Licensee shall consecutively report the following to the BMP:

• All minutes from safety meetings shall be submitted no later than one week after

the meeting has been held.

• Measurements from personal dosimeter if these are used, see section 5.5.

10.3.5 The Licensee shall submit information about working periods and income of

employees that are not resident in Greenland to the Tax Agency, see section 10.1 and

Annex 5.

10.3.6 Every day the Licensee shall report the following to the BMP:

• Daily drilling report;

• Daily ice management reports (to be submitted together with daily drilling

report).

10.3.7 Unless otherwise specified, before the fifth of every month the Licensee shall report

the following information to the BMP:

• Arrival schedule for planned shipping movements (the Danish Maritime

Authority and Danish Maritime Safety Administration);

• statement showing the number of helicopter and 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 shall be collected and reported in accordance with

directions from the BMP;

72

• 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 9.7.3;

• HSE reporting;

• complete monthly ice management report;

• performed working hours per person;

• types and quantities of waste, and treatment of this.

10.3.8 Unless otherwise specified, every Tuesday, the Licensee shall report the following

information to the BMP:

• Complete weekly ice management report.

• A seven-day oil spill model forecast, taking into consideration the local wind and

weather conditions.

• Report on expected location for aircraft (must also be forwarded to the Greenland

Command at [email protected]), if there are any changes to location of aircrafts, this

shall be reported immediately.

10.3.9 Unless otherwise specified and no later than 31 December 2011, the Licensee shall

report the following information to the BMP:

• The quantity of imported, exported and used explosives and detonators, and the

quantity in storage;

• the quantity of imported, exported and used radioactive material, and the quantity

in storage;

• the quantity of imported, exported and used chemicals, and the quantity in

storage;

10.3.10 No later than two months after the drilling activities have ended, the Licensee shall

submit complete documentation of consumption and discharge (use of resources,

fuel, water etc.).

10.3.11 Before 31 January 2012, the Licensee shall fill in and submit form A11 with

information concerning the amount earned by each employee during the calendar

year, see section 10.1.

10.3.12 Before 31 January 2012, the Licensee shall fill in and submit form A10 which

summarises the A11 forms at company level, see section 10.1.

10.3.13 Before 1 March 2012, the Licensee shall fill in and submit a complete report on the

compliance with the objectives of the IBA agreement.

10.3.14 The company shall 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.

73

• Workshop facilities.

• Fuel tanks.

• Explosives storage facilities.

• Ventilation.

10.3.15 The BMP may stipulate supplementary terms and conditions for reporting and

registration.

11 Financial security

Cairn Energy Plc.’s parent company guarantees constitute part of the financial security for

fulfilment of all claims against Cairn Energy’s subsidiary companies that are licensees of the

Licences, in connection with the drilling and related activities.

Furthermore, Cairn Energy has committed to establish and maintain insurance cover for damage,

loss, clean-up etc. in connection to any oil pollution damage.

Therefore there are the necessary financial security arrangements to guarantee fulfilment of the

Licensee’s obligations and coverage of liability for damage, loss, clean-up costs etc. in

connection with any oil pollution damage.

11.1 Guarantees The Licensee shall 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, approved by the BMP, shall be provided for each company with a

share in the exploration licence, except for NUNAOIL A/S, to guarantee fulfilment of each

licensee’s obligations under the licence. These guarantees shall cover fulfilment of obligations

towards the Greenlandic and Danish government authorities, as well as liability and indemnity

obligations under point 26.01 of the exploration and exploitation licences.

Cairn Energy Plc. provides a parent company guarantee for damage incurred during exploration

activities which covers the Capricorn companies that are indicated as licensees in the respective

Licenses.

11.2 Insurance conditions The BMP shall 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 26.02 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.

74

Local boat charter approved for transporting passengers in Greenland and used by employees to

and from flotels within a harbour area is excluded from the insurance requirements in this

chapter.

Vessels sailing in Greenlandic waters shall document that the owner of the vessel has a valid

certificate that shows insurance cover that meets the existing international standards.

The insurance consultancy bureau Willis has advised the BMP with regard to standards for

insurance cover applicable to drilling ships/platforms and support vessels.

The assessment of the insurance cover focuses particularly on insurance for blowout

(uncontrolled leakage of crude oil or gas from a well) and insurance for ships and drilling units.

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. OPOL provides a further guarantee to cover costs incurred by an oil spill, see

Annex 2.

Requirements

11.2.1 All insurance conditions shall be in accordance with the requirements sent by the BMP

to the Licensee and insurance requirements pursuant to the law, the Licences and

decisions made by the BMP.

11.2.2 Insurance policies and certificates shall be submitted to the BMP for all vessels and

drilling units operating in Greenland in connection with the exploration activities

planned. The insurance policies submitted shall be valid for the whole period in which

exploration activities are planned, and an additional four months in order to

compensate for any delays. The BMP shall approve insurance policies before activities

included in this approval may be commenced. The BMP may require that further

insurance cover is taken out.

11.2.3 The Licensee shall 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 shall be party in the agreement

with full effect before, during, as well as four months after, the Licensee commences

activities covered by this approval.

12 Approval in pursuance of section 15 for licences no. 2002/15, 2005/06, 2008/11 and 2011/16

In accordance with section 15 of Exclusive Licences no. 2002/15, 2005/06, 2008/11 and

2011/16 the BMP hereby approves that Capricorn Greenland Exploration 1 Ltd. as operator for

Exclusive Licenses 2002/15, 2005/06, 2008/11 and 2011/16 drills up to seven oil exploration

wells under the specified licenses 2002/015, 2005/06, 2008/11 and 2011/16. Drilling operations

shall be carried out at the 7 (seven) possible drilling locations; Atammik AT1-A, Atammik AT2-

75

B, Atammik AT7-A, Napariaq Block 13 Delta A, Eqqua Gamma B, Lady Franklin LF6-B and

Lady Franklin LF7-C. Before drilling exploration activities are commenced, the BMP shall

approve each drilling location and have carried out a pre-spud inspection at each location. The

drilling operations shall be completed in compliance with the conditions stipulated in this

approval letter. Drilling operations at the locations; Atammik AT1-A, Atammik AT2-B,

Atammik AT7-A, Lady Franklin LF6-B and Lady Franklin LF7-C shall be completed before 1

December 2011. Drilling operations at the locations; Napariaq Block 13 Delta A and Eqqua

Gamma-B shall be completed before 1 October 2011.

Please note that this approval does not entail approval in relation to any legislation other than

that specified above. Other necessary approvals, etc., may therefore need to be obtained by the

Licensee.

If any changes are desired to the foundation on which this approval was issued, an application

shall be submitted to the BMP.

If further approvals are granted relating to oil exploration within the area of the exploitation

licence, the conditions of this licence may be changed.

The Licensee shall submit material for approval to the BMP in accordance with the above

conditions.

Yours faithfully

Jørn Skov Nielsen

Director General for BMP

Enclosed:

Annex 1 - Map of licence area and drilling locations

Annex 2 – Guarantee and collateral

Annex 3 – List of chemicals used

Annex 4 – Map of bird colonies

Annex 5 - Tax return form

Annex 6 - Environmental monitoring form

Annex 7 – Template for Activity Report / 3 Day Forward Planning Report

Annex 8 – In-situ Burning Application Form for Greenland Waters

Annex 9 – Dispersant Application for Greenland Waters

Annex 10 - Greenland Bureau of Minerals and Petroleum, Exploration Drilling Guidelines.

Annex 11 - NORSOK D-001:

Annex 12 - NORSOK D-010:

Annex 13 - NORSOK D-SR-007:

Annex 14 - NORSOK R-003:

Annex 15 - NORSOK S-001:

Annex 16 - NORSOK S-003:

Annex 17 - NORSOK Z-013:

76

Annex 1 - Map of licence area and drilling locations

77

Annex 2 – Guarantee and collateralisation

Annex 2 contains confidential commercial information and therefore has not been made public.

78

Annex 3 – List of chemicals used

79

Annex 4 – Map of bird colonies

81

Annex 5 - Tax return form

Once the BMP receives the tax return forms mentioned in section 10.1 from the Tax Agency, the

BMP will forward these forms to the Licensee.

82

Annex 6 - Environmental monitoring form

Example of form for monthly report on environmental monitoring by Capricorn.

83

Annex 7 – Template for Activity Report / 3 Day Forward Planning Report

Activity report must be submitted to: [email protected] 3 times a week for the entire duration of

the activity/survey using the below outlined template.

Deadlines:

Sundays by 12 midnight

Tuesdays by 12 midnight

Thursdays by 12 midnight

Survey

Activity/survey name Cairn Exploration Drilling 2011

Operator Capricorn Exploration 1 Ltd

Short description of

Activity/Survey

methodology

Exploration drilling

Total activity/survey

area

Total activity/survey

period

Report made by:

Date and time of this

update:

Contact info at sea and activity reports

Drilling rig Name of drilling rig:

contact info:

Current location (coordinates)

Supply vessel(s)

operating in the

vicinity of [name of

drilling rig]

Name of vessel:

contact info:

Operation activity:

Comments:

Name of vessel:

contact info:

Operation activity:

Comments:

Name of vessel:

contact info:

Operation activity:

Comments:

Name of vessel:

contact info:

Operation activity:

Comments:

Drilling rig Name of drilling rig:

contact info:

Current location (coordinates)

84

Supply vessel(s)

operating in the

vicinity of [name of

drilling rig]

Name of vessel:

contact info:

Operation activity:

Comments:

Name of vessel:

contact info:

Operation activity:

Comments:

Name of vessel:

contact info:

Operation activity:

Comments:

Name of vessel:

contact info:

Operation activity:

Comments:

Port activity

Name of vessel:

contact info:

Operation activity:

Comments:

Name of vessel:

contact info:

Operation activity:

Comments:

Name of vessel:

contact info:

Operation activity:

Comments:

On passage activity

Name of vessel:

contact info:

Operation activity:

Comments:

Name of vessel:

contact info:

Operation activity:

Comments:

Name of vessel:

contact info:

Operation activity:

Comments:

Enclosed maps

85

Area map showing location of vessels

Field map showing location of vessels

86

Annex 8 – In-situ Burning Application Form for Greenland Waters

87

Annex 9 – Dispersant Application for Greenland Waters

88

Annex 10 - Greenland Bureau of Minerals and Petroleum, Exploration Drilling Guidelines

89

Annex 11 - NORSOK D-001

90

Annex 12 - NORSOK D-010

91

Annex 13 - NORSOK D-SR-007

92

Annex 14 - NORSOK R-003

93

Annex 15 - NORSOK S-001

94

Annex 16 - NORSOK S-003

95

Annex 17 - NORSOK Z-013

APPROVAL OF UP TO 7 (SEVEN) EXPLORATION WELLS · PDF file• NORSOK R-003: NORSOK Standard...

Documents

Transcript of APPROVAL OF UP TO 7 (SEVEN) EXPLORATION WELLS · PDF file• NORSOK R-003: NORSOK Standard...