Pharos is committed to responsible and sustainable development. We recognise that energy demand is forecast to grow and that oil and gas will continue to be an important component of the global energy mix over many future decades.

This will be essential for sustainable economic development, especially in the countries where we operate.

El Fayum Oil — Sold and used domestically, contributing to host country development goals and access to energy in 2020
TGT & CNV Oil — Sold and used domestically, contributing to host country development goals and access to energy in 2020

Pharos acknowledges the key issues of Climate Change and the pressing need to continue to reduce Greenhouse Gas Emission (GHG). It is our policy to fully comply with international climate change laws and regulations in order to reduce emissions through practical and transparent initiatives.

Global climate risk and energy transition

Climate change affects many of our principal risks, including commodity price, reserves, operations, political, stakeholder and reputational. Global transition to a lower carbon economy could reduce demand and increase operating cost, capital cost, regulation and taxation.

Our processes address climate change and carbon-related risks and we participate in the Carbon Disclosure Project (CDP).

Business partners and influence

Our relationships with business partners, host governments and local communities are critical. We do business honestly and ethically, complying with all applicable laws and regulations, and only work with those who share our values.

As designated operators, we fully apply the Pharos HSES MS. As joint operating partners, we seek to influence and achieve alignment with our systems. Where we have a minority interest, we make our views heard and ensure minimum standards, in line with IFC Performance Standards.

New country entry

Any new Pharos venture must address and monitor environmental, social and governance (ESG) issues, alongside commercial, legal, technical and political constraints.

In 2019, together with Cairn Energy plc and Israel’s Ratio Oil Exploration, we were successful in our bid for eight licences in the second offshore bid round in Israel. Following detailed analysis and input from the Group’s advisers and lending banks, the Committee reviewed and approved the proposal to enter Israel with reputable partners in order to enable the Company to apply successfully for eight exploration licences. Amongst a range of factors, the proposal also took into consideration the country’s commitments to a range of international good practice regulations including adherence to Anti Slavery and Human Rights laws.

On 2 April 2019, Pharos completed the transaction to acquire the El Fayum Concession, and has a 100% working interest in the onshore concession located in the Western Desert, Egypt, operated in conjunction with the Egyptian state oil and gas company, EGPC, through the 50/50 Joint Operating Company Petrosilah. Following this acquisition, we conducted an HSES due-diligence review of the facilities of the El Fayum Concession and gap analysis of the Merlon / Petrosilah Health, Safety, Environmental and Social Responsibility (HSES) Management System against the Pharos Energy HSES Management System.

HSE Management System

We continually improve our HSE MS policy wherever we operate. For countries with different standards, we review potential gaps and ensure business partners follow our policies by regularly auditing their performance.

In 2019 we updated our Corporate HSES MS to reflect our organisational changes. This has been the opportunity to update and streamline our procedures in a set of corporate standards that define the company expected practices within the whole organisation. The new standards have been shared across the organisation and employees and contractors will be trained as required at country level in 2020. In 2019, a total of 292 HSES training sessions took place across Vietnam and Egypt throughout the year.

Key Performance Indicators

KPI Target 2019 2018 2017 2016
HSE regulatory non-compliances Zero Zero 1 Zero Zero Zero

1 Although three regulatory non-compliances were reported in our Egyptian assets in 2019, these occurred in January, prior to the completion of our acquisition.

Contractor management

Our Contractor Management Procedure covers all stages from selection to service delivery, and sets out how contractors must meet our requirements.

In 2019 we developed an on-Boarding Policy to further enhance our due diligence process and ensured its requirements aligned with our revised contractor and supply chain management procedures.

  Hours worked  in Vietnam and Egypt assets Percentage of total
Company staff 651,488 28%
Contractors 1,702,631 72%