This year marks Carnarvon’s fifth Sustainability Report, and my first as Chair of the Risk, Governance and Sustainability (“RGS”) Committee.
The focus on sustainability from both a regulatory and stakeholder perspective has undoubtedly intensified over the past five years, with more changes coming in the form of mandatory disclosure of climate related financial risks, and the fifth edition of the ASX Corporate Governance Principles and Recommendations.
Whilst climate change remains a key consideration for industry, governments and community, the requirement for affordable and reliable energy in our daily lives continued unabated. Oil demand in 2024 increased by around 1.1 million barrels a day, underscoring the enduring role of oil and gas in meeting global energy needs, and the challenge of achieving both energy security, and environmental stewardship while advancing the energy transition.
In December last year there were some significant changes at Carnarvon, with a refreshed Board and refined strategic priorities for the company. Carnarvon’s core strategic focus is centred on maximising shareholder value form the Dorado development and Bedout Subbasin assets. As a result, Carnarvon determined that its biorefining investment was non-core, and has exited this business.
There has been steady progress on the Dorado development during the year. Project engineering works continued, with a major focus on the integration of the Pavo field and optimisation of the proposed Dorado facilities. As part of the optimisation study, the Dorado joint venture is reviewing various opportunities to reduce the upfront development costs and time to first oil and cashflows, including the opportunity to re-purpose an existing FPSO. These optimisations can also provide impact reductions by reducing the carbon intensity of Dorado with a smaller scale development and re-purposing existing infrastructure, such as the FPSO. Based on this work, the joint venture is working towards re-entering FEED later this year towards a Final Investment Decision (FID) in 2025.
Carnarvon is continuing to develop its approach to sustainable development by working with its joint ventures, particularly with regards to environmental, health and safety practices. This ensures the business is more resilient through the energy transition.
In-line with Carnarvon’s approved Carbon Offset Strategy, we developed a ‘carbon bank’ over the year via the acquisition of ACCUs on-market. These ACCUs are intended to offset future emissions from the Dorado production facilities in accordance with the relevant regulatory requirements under the Safeguard Mechanism. Based on Carnarvon’s calculation, the Company has acquired ACCUs to cover the first 3-5 years of production under the Safeguard Mechanism. Carnarvon also offset all its Scope 2 emissions from its corporate office consistent with previous years.
The RGS Committee remains integral in overseeing ESG matters for the company, and providing the necessary leadership to ensure Carnarvon meets all its obligations in this area as we advance towards development and future production. I look forward to continuing to work with my fellow RGS Committee members, the Board and Carnarvon staff to maintain Carnarvon’s strong culture focused on protecting the health and safety of our workforce, safeguarding the environment, and working positively with our partners and the communities in which we operate.
Will Barker
Chair – Risk, Governance, and Sustainability Committee