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<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong><br />

Corporate and Social Responsibility <strong>Report</strong> 2006


Our values<br />

To respect <strong>the</strong> countries in which we operate<br />

To contribute to and support local communities<br />

To care for <strong>the</strong> environment<br />

To empower and support <strong>the</strong> individual<br />

To value and foster long-term relationships<br />

To be transparent in our activities and reporting<br />

Waraga area, Uganda


1<br />

About us<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> is one of <strong>the</strong> largest independent oil and gas exploration<br />

companies in Europe. The Group has 120 licences in 22 countries, with<br />

operations in Europe (primarily in <strong>the</strong> United Kingdom), Africa and<br />

South Asia. In January 2007, <strong>Tullow</strong> completed <strong>the</strong> £595 million<br />

acquisition of Hardman Resources Limited, which materially enhances<br />

<strong>the</strong> Group’s operations in Mauritania and Uganda and adds high-impact<br />

exploration licences in South America.<br />

Key<br />

E–Exploration<br />

D–Development<br />

P–Production<br />

<strong>Tullow</strong> is headquartered in London and employs over 250 people<br />

worldwide. The Group’s shares are listed on <strong>the</strong> London and Irish<br />

Stock Exchanges and <strong>Tullow</strong> is a constituent of <strong>the</strong> FTSE250 index.<br />

<strong>Tullow</strong> had an excellent year in 2006. Record operational and financial<br />

results were achieved in a favourable oil and gas pricing environment,<br />

and each core area continued to deliver strong performances. Sales<br />

revenue increased by 30% to £578.8 million and profit before tax was<br />

up 47% to £263.3 million.<br />

This growth was driven by strong increases in European gas production<br />

against a background of stable African oil production, and sales prices<br />

which were on average 29% ahead of 2005. The Group achieved average<br />

production of 64,720 barrels of oil equivalent per day (boepd) and 89%<br />

organic reserves replacement. Total reserves and resources increased<br />

by 149 millions of barrels of oil equivalent (mmboe) to 506 mmboe.<br />

Current production is over 76,000 boepd, and during 2007 <strong>the</strong> focus is<br />

on continuing to increase production to a targeted level of 85,000 boepd<br />

by <strong>the</strong> end of <strong>the</strong> year and drilling over 30 wells, including major<br />

multi-well campaigns in Uganda, Namibia and India.<br />

For more detailed information on our financial performance and<br />

operations please visit our website.<br />

www.tullowoil.com<br />

22<br />

21<br />

Feedback<br />

We welcome any feedback you have.<br />

Please provide your comments to:<br />

20<br />

Graham Brunton<br />

Head of EHS<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong><br />

3rd Floor<br />

Building 11<br />

Chiswick Park<br />

566 Chiswick High Road<br />

London W4 5YS<br />

Tel: +44 20 8996 1000<br />

Fax: +44 20 8994 5332


Europe<br />

Africa<br />

South Asia<br />

South America<br />

01 Portugal E<br />

02 United Kingdom E D P<br />

03 Angola E<br />

04 Cameroon E<br />

05 Congo (Brazzaville) D P<br />

17 Bangladesh E D P<br />

18 India E<br />

19 Pakistan E D P<br />

20 Falkland Islands E<br />

21 French Guiana E<br />

22 Suriname E<br />

06 Congo (DRC) E<br />

07 Côte d’Ivoire E D P<br />

08 Equatorial Guinea E D P<br />

09 Gabon E D P<br />

10 Ghana E<br />

11 Madagascar E<br />

12 Mauritania E<br />

02<br />

13 Namibia D<br />

14 Senegal E<br />

15 Tanzania E<br />

16 Uganda E<br />

01<br />

19<br />

12<br />

4<br />

18<br />

17<br />

04<br />

07 10<br />

08<br />

09<br />

05<br />

06<br />

16<br />

03<br />

15<br />

13<br />

11<br />

Average production<br />

Year end reserves and resources<br />

Revenue<br />

<strong>Oil</strong>/Gas<br />

Core area<br />

<strong>Oil</strong>/Gas<br />

Core area<br />

<strong>Oil</strong>/Gas/Tariff<br />

Core area<br />

<strong>Oil</strong> 52%<br />

Gas 48%<br />

Europe 46%<br />

Africa 51%<br />

South Asia 3%<br />

<strong>Oil</strong> 40%<br />

Gas 60%<br />

Europe 16%<br />

Africa 80%<br />

South Asia 4%<br />

<strong>Oil</strong> 46%<br />

Gas 51%<br />

Tariff income 3%<br />

Europe 53%<br />

Africa 46%<br />

South Asia 1%<br />

Total 64,720 boepd<br />

Total 506 mmboe<br />

Total £579 million


Welcome to our Corporate and Social Responsibility<br />

<strong>Report</strong> 2006. At <strong>Tullow</strong>, our aim is to conduct our business<br />

to <strong>the</strong> highest industry standards in a way that is ethical<br />

and safe, minimises our impact on <strong>the</strong> environment and<br />

ensures that we are open with and supportive to <strong>the</strong> local<br />

communities and countries where we have operations.<br />

Contents<br />

Page<br />

> About us<br />

02 A message from Aidan Heavey<br />

I am proud of <strong>the</strong> work we do in countries<br />

where we have operations and hope this<br />

report will help you understand why.<br />

06 Corporate governance<br />

The Board and senior management<br />

are fully committed to all aspects<br />

of good corporate behaviour and<br />

risk management.<br />

08 CSR Committee and programme<br />

Meet our CSR Committee, and<br />

understand our CSR philosophy<br />

and strategy.<br />

10 SEE accountability<br />

Social, ethical and environmental<br />

(SEE) accountability is very important<br />

to us given <strong>the</strong> international spread<br />

of our operations and <strong>the</strong> dynamic<br />

nature of our industry.<br />

12 EHS at <strong>Tullow</strong><br />

13 Meet <strong>the</strong> EHS Team<br />

14 EHS management system<br />

16 EHS performance<br />

18 Health and Safety<br />

21 The Environment<br />

26 2006 Key plans and objectives<br />

30 Social performance<br />

The principles that guide us of ethical<br />

behaviour, integrity and honesty are<br />

constant in all our responsibilities.<br />

40 2007 goals and objectives<br />

41 An integrated approach<br />

We consistently apply and achieve high<br />

EHS and CSR standards and this enables<br />

us to deliver long-term, sustainable and<br />

profitable growth.<br />

42 Supplemantary information<br />

44 Glossary<br />

IBC O<strong>the</strong>r information<br />

‘Working with Communities’<br />

04 Uganda<br />

18 Malaria Management Programme<br />

27 Art Competition<br />

38 Education<br />

Case studies<br />

06 ECOFAC<br />

08 touraid<br />

12 ‘Step change in Safety’<br />

15 Turtles in Chachar<br />

19 Excellent operational safety<br />

20 New driving policy<br />

21 Commingling gas flows at Bacton<br />

22 Carbon Disclosure Project<br />

28 Crisis Management January 11, 2007<br />

04<br />

Uganda Empowering<br />

communities and creating<br />

self-sustainable enterprise<br />

and development.<br />

28<br />

Crisis Management Being proactive,<br />

prompt and effective in <strong>the</strong> event of<br />

any incident.<br />

38<br />

Education, along with<br />

children, health and basic<br />

needs are <strong>the</strong> key focus of<br />

our community initiatives.


A message from Aidan Heavey<br />

Throughout <strong>Tullow</strong>’s 21-year existence, we have always maintained<br />

a long-term perspective on our operations and our responsibilities.<br />

We seek to establish partnerships with governments, o<strong>the</strong>r oil and<br />

gas companies, shareholders and <strong>the</strong> communities where we work.<br />

We rely heavily on <strong>the</strong> dedication, skills and professionalism of our<br />

employees to ensure that our reputation, or <strong>the</strong>ir safety, is not<br />

compromised by <strong>the</strong> actions of ourselves or o<strong>the</strong>rs.<br />

The Group now employs over 250 people<br />

spread across 22 countries and during<br />

2006 worked 6.1 million hours. Our growth<br />

has resulted in higher levels of day-to-day<br />

activity, a more widespread portfolio of<br />

operated and non-operated licence interests<br />

and substantial investment in our assets, our<br />

systems and our staff. I am happy to report<br />

that 2006 was ano<strong>the</strong>r year of successful<br />

progress in <strong>the</strong> ongoing development of<br />

our Environment, Health and Safety (EHS)<br />

practises and Corporate Social Responsibility<br />

(CSR), which we manage through our<br />

community and social programmes.<br />

In recent years, <strong>the</strong> oil and gas industry has<br />

come under increasing scrutiny in respect<br />

of its environmental performance and<br />

safety culture. Our performance is not only<br />

measured by hard statistics like a lower<br />

Lost Time Incident Frequency Rate (LTIFR),<br />

better water management or carbon<br />

emissions, but also by <strong>the</strong> endorsement<br />

of agencies such as Royal Society for <strong>the</strong><br />

Prevention of Accidents (RoSPA) in <strong>the</strong><br />

UK and <strong>the</strong> achievement of International<br />

Standards Organisation (ISO) 14001<br />

certification for our corporate environmental<br />

management system. We have clear<br />

management standards and policies for<br />

CSR and EHS and <strong>the</strong>se are implemented<br />

and communicated across <strong>the</strong> Group. On<br />

<strong>the</strong> ground, <strong>Tullow</strong>’s flat structure and open<br />

culture ensures that any issues are disclosed<br />

and employees feel comfortable in offering<br />

suggestions. We actively support continuous<br />

improvement in our performance in <strong>the</strong>se<br />

areas through strong leadership and ongoing<br />

training at all levels in <strong>the</strong> business.<br />

The value of our social programmes is<br />

demonstrated by <strong>the</strong> positive community<br />

relations <strong>Tullow</strong> has established in each of<br />

its core areas and <strong>the</strong> tangible improvements<br />

in living standards, health and education that<br />

result from our programmes.<br />

For example, at <strong>the</strong> 2005 Ernst & Young<br />

Entrepreneur Awards in Ireland, John O’Shea,<br />

who founded GOAL, challenged <strong>the</strong> awardwinners<br />

and audience to visit developing<br />

countries and see if <strong>the</strong>y could make a<br />

difference by focusing <strong>the</strong>ir skills on helping<br />

communities to help <strong>the</strong>mselves. He<br />

emphasised <strong>the</strong> need to develop new<br />

commercial initiatives in addition to health<br />

and educational support projects. <strong>Tullow</strong><br />

undertook this challenge and chose <strong>the</strong><br />

Kaiso-Tonya area in Uganda on <strong>the</strong> shore of<br />

Lake Albert, where we have a 100% operating<br />

interest in Block 2 in <strong>the</strong> Lake Albert Rift<br />

Basin. Full details of this project are on<br />

pages 4 and 5 of this report, and throughout<br />

<strong>the</strong> report <strong>the</strong>re are several examples of<br />

projects we supported or undertook during<br />

<strong>the</strong> year.<br />

Through our CSR Committee, which includes<br />

both senior executives and non-executive<br />

Directors of <strong>the</strong> Group, we ensure that our<br />

community and social funding, which in<br />

2007 will be US$2.5 million, is allocated to<br />

countries and projects where our contribution<br />

can make a real difference.<br />

At <strong>Tullow</strong>, we are committed to<br />

comprehensive disclosure and openness in<br />

everything we do. This is our second annual<br />

CSR <strong>Report</strong> and we have taken on board<br />

much of <strong>the</strong> valuable feedback we received<br />

last year. We apply and expect <strong>the</strong> highest<br />

standards every day in our work, and our<br />

performance is closely monitored by <strong>Tullow</strong>’s<br />

Board and has a direct influence on appraisal<br />

and reward systems throughout <strong>the</strong> Group.<br />

Ultimately, as Chief Executive, I am<br />

responsible for ensuring that <strong>Tullow</strong> is seen<br />

as a responsible and safe operator, a partner<br />

of choice and a good neighbour wherever<br />

we work. I am proud of <strong>Tullow</strong> and <strong>the</strong> work<br />

we do in <strong>the</strong> countries where we have<br />

operations and hope this report will help<br />

you to understand why.<br />

Aidan Heavey<br />

Chief Executive Officer<br />

Nominated Director with<br />

CSR and EHS Responsibility<br />

2 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


Aidan Heavey in Kaiso-Tonya, Uganda<br />

BitC ’Big Tick’ environment award<br />

A £1 million investment was undertaken at <strong>the</strong> Bacton Gas Terminal, which significantly improved <strong>the</strong> environmental<br />

performance of this operation including a 55% reduction in Carbon Dioxide (CO 2<br />

) emissions. In recognition of this<br />

achievement, <strong>Tullow</strong> received a ‘Big Tick’ award in <strong>the</strong> International Climate Change Category of <strong>the</strong> Business in <strong>the</strong><br />

Community Awards (BitC) for Excellence. This demonstrates that such projects can significantly reduce environmental<br />

impacts, while making sound business sense. This award is a welcome external recognition of our commitment to<br />

improving our environmental performance, and full details of this project are on page 21.<br />

RoSPA ‘Gold Award’<br />

The Royal Society for <strong>the</strong> Prevention of Accidents (RoSPA) is a registered charity established over 80 years ago to<br />

promote safety and <strong>the</strong> prevention of accidents. The charity recognises outstanding health and safety performance<br />

through an annual awards programme. In 2007, <strong>Tullow</strong> received a RoSPA ‘Gold Award’ for occupational health and<br />

safety management, based on results for <strong>the</strong> period 2002 to 2006. <strong>Tullow</strong> is delighted with this recognition, which is<br />

a reflection of <strong>the</strong> level of organisational and management support given to reviewing and championing health and<br />

safety initiatives and policies throughout <strong>the</strong> Group. Whe<strong>the</strong>r it be an office, gas terminal, offshore installation or<br />

drilling rig, this level of commitment ensures that health and safety is an integral part of our daily activities.<br />

BitC Environment Index ‘Bronze Award’<br />

The Environment Index assesses <strong>the</strong> extent to which an organisation integrates environmental responsibility into <strong>the</strong>ir<br />

business functions. It is an annual assessment of environmental performance that benchmarks companies against<br />

both <strong>the</strong>ir sector peers and all o<strong>the</strong>r companies that participate in <strong>the</strong> Index. It measures companies on <strong>the</strong> integration<br />

of environmental issues into <strong>the</strong>ir core business and on environmental management issues. Participating companies are<br />

also assessed on <strong>the</strong>ir assurance processes and <strong>the</strong>ir commitment to disclose <strong>the</strong>ir Index submission. The Environment<br />

Index Executive Summary and <strong>Report</strong> are used by a myriad of organisations, ranging from investors and <strong>the</strong> media to<br />

Non-Governmental Organisations (NGO) and academia. In 2006, <strong>Tullow</strong> participated for <strong>the</strong> first time in <strong>the</strong> 11 th Environment<br />

Index and received a ‘Bronze Award’ for its environmental management and performance. This represents a score of just<br />

over 70% and is a good performance relative to <strong>the</strong> sector and <strong>the</strong> index. The individual company report we received on<br />

<strong>Tullow</strong>’s performance has also given us some great feedback and ideas on how we can improve our performance fur<strong>the</strong>r.<br />

Evolving our CSR reporting<br />

In <strong>the</strong> 2005 report, we committed to evolving our CSR reporting and part of this process was meeting with and inviting<br />

comments from key stakeholders to assist us in improving our disclosure and transparency. Feedback was received<br />

from <strong>Tullow</strong> employees and management, institutional shareholders and <strong>the</strong> Ethical Investment Research Service<br />

(EIRIS). EIRIS is a sustainability rating agency which collects data for fund managers and o<strong>the</strong>r clients, including <strong>the</strong><br />

FTSE4Good Responsible Investment Index. We have incorporated this feedback into this year’s report. Look out for<br />

this symbol throughout <strong>the</strong> report to see where direct changes have been made.<br />

Working with Communities<br />

We have developed a social initiative called ‘Working with Communities’ (formerly ‘Adopt a Village’) to encapsulate<br />

what <strong>Tullow</strong> aims to achieve in its social and community initiatives across <strong>the</strong> Group. Our goal is to foster and support<br />

longer-term development and self-sustaining enterprise in local communities, and our involvement is designed to be<br />

minimal after <strong>the</strong> initial organisation and set-up of <strong>the</strong> project. In 2006, <strong>Tullow</strong> spent US$1.5 million on CSR projects<br />

and many of <strong>the</strong>se are outlined in this report. Just look out for this logo.<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 3


Working with Communities<br />

Uganda<br />

Initiating <strong>the</strong> project<br />

Initial discussions held with local village<br />

chiefs from Kaiso-Tonya communities helped<br />

to identify key problem areas and potential<br />

commercial opportunities. This community<br />

is at <strong>the</strong> bottom of an escarpment on <strong>the</strong><br />

shore of Lake Albert within <strong>the</strong> Block 2<br />

licence area. There was no meaningful<br />

regional economy, infant mortality rates<br />

were high and safety was a particular issue<br />

for <strong>the</strong> thousands of fishermen who fish Lake<br />

Albert every day for <strong>the</strong>ir food and livelihood.<br />

As a result of <strong>the</strong>se discussions, <strong>Tullow</strong><br />

initiatives in this region have been largely<br />

focused on empowering communities and<br />

creating sustainable, effective programmes<br />

centred on access, health, safety, enterprise<br />

and education.<br />

Improving access<br />

The location of <strong>the</strong> Kaiso-Tonya communities<br />

with few routes out o<strong>the</strong>r than by boat meant<br />

that <strong>the</strong>y were effectively cut off from <strong>the</strong><br />

outside world, with limited access to medical<br />

facilities or for government aid. Road access<br />

to <strong>the</strong> drill site and two new airstrips had<br />

to be constructed for our operations in <strong>the</strong><br />

region. This has provided access not only<br />

for aid and emergencies, but has also<br />

created a route to market and better prices<br />

for local fishermen, who o<strong>the</strong>rwise lived a<br />

subsistence existence.<br />

Improving health<br />

The drilling operations has brought o<strong>the</strong>r<br />

benefits to <strong>the</strong> communities where some<br />

30 people die each year from water-borne<br />

cholera. The drilling equipment was used<br />

to drill several successful water wells and<br />

pipes were installed to carry fresh water to<br />

<strong>the</strong> communities. Prior to <strong>the</strong>se wells being<br />

drilled, local women had to walk into <strong>the</strong><br />

bush to ga<strong>the</strong>r firewood to use when boiling<br />

water from <strong>the</strong> lake, which is also used for<br />

bathing and washing.<br />

Poor hygiene was a main cause of infant<br />

mortality in <strong>the</strong> region, where 25% of children<br />

die during child birth. Four simple hygienic<br />

birthing rooms are planned, and one has<br />

already been constructed. Local women and<br />

birthing attendants have been trained in<br />

hygienic birthing methods, and while this<br />

project is still at an early stage, infant<br />

survival rates are already improving.<br />

Improving safety<br />

Few of <strong>the</strong> thousands of fishermen from<br />

<strong>the</strong> communities who fish on Lake Albert<br />

are able to swim, and loss of life through<br />

drowning is common. Having identified <strong>the</strong><br />

need for life jackets, <strong>Tullow</strong> has worked in<br />

association with <strong>the</strong> National Lake Rescue<br />

Initiative in Uganda to resource <strong>the</strong> relevant<br />

manufacturing skills, which involved local<br />

women being trained in <strong>the</strong> production of<br />

life jackets. A manufacturing unit was also<br />

set up and <strong>the</strong> life jackets produced at this<br />

facility have been certified to international<br />

standards. The manufacturing unit also<br />

serves as a lifeboat station for a local lake<br />

rescue team, and <strong>the</strong> existing lifeboat will<br />

soon be replaced by a new <strong>Tullow</strong>-sponsored<br />

lifeboat. This initiative has even attracted <strong>the</strong><br />

attention of <strong>the</strong> German Sea Rescue Service<br />

and may be used as a teaching aid for a<br />

Government Search and Rescue Management<br />

Course at <strong>the</strong> World Maritime University. In<br />

January 2007, two fishermen were rescued<br />

as a result of <strong>the</strong>se initiatives and more lives<br />

have been saved since.<br />

Developing enterprise<br />

Local carpenters were employed for a<br />

number of projects in <strong>the</strong> region, one of<br />

which has already become a profitable<br />

enterprise. Uganda has a substantial annual<br />

consumption of circa 200 tonnes of honey,<br />

but imports <strong>the</strong> vast majority of this as<br />

in-country production is approximately<br />

20 tonnes. Local carpenters are building<br />

beehives that are tended by a co-operative<br />

of seven villages that have been trained in<br />

bee-keeping methods. 200 hives are already<br />

in place, with a total of 2,000 planned over<br />

two years. In 2006, which was its first full<br />

year of operation, <strong>the</strong> co-operative made<br />

a significant profit providing a very positive<br />

economic benefit to <strong>the</strong> lives of <strong>the</strong> many<br />

people involved in <strong>the</strong> project. Sunflower<br />

seeds and fruit trees have also been<br />

distributed throughout <strong>the</strong> region to help<br />

with nectar production, and to provide<br />

shade and an additional source of food.<br />

Supporting education<br />

Local carpenters have also been employed<br />

in <strong>the</strong> improvements made to Kyehoro<br />

Primary School, where two new classrooms<br />

have been constructed and furnished<br />

with desks and ancillary teaching aids.<br />

The school has also been provided with<br />

<strong>Tullow</strong>-sponsored teachers and playground<br />

equipment. A school vegetable garden has<br />

been created and pumpkins, maize, kale,<br />

tomatoes, chillies and papaya have already<br />

been grown.<br />

Sustainable development<br />

In total, US$220,000 has been spent in<br />

<strong>the</strong> region on a variety of projects designed<br />

to improve <strong>the</strong> lives of <strong>the</strong> communities<br />

local to our operations in a manner that<br />

is sustainable, profitable and relevant. We<br />

believe that our involvement in <strong>the</strong>se projects<br />

is indicative of <strong>the</strong> true value of CSR, where<br />

we share our corporate success with our<br />

neighbours and contribute to sustainable<br />

development of <strong>the</strong> local communities.<br />

4 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


About <strong>Tullow</strong> in Uganda<br />

Post <strong>the</strong> Hardman Resources acquisition<br />

in 2006, <strong>Tullow</strong> has a 100% operated<br />

interest in Block 2 in <strong>the</strong> Lake Albert<br />

Rift Basin, and is <strong>the</strong> largest acreage<br />

holder in <strong>the</strong> area. Four oil discoveries<br />

were made in <strong>the</strong> Kaiso-Tonya region<br />

of <strong>the</strong> block during 2006, proving up a<br />

working hydrocarbon system in <strong>the</strong><br />

basin with good quality oil from highly<br />

productive reservoirs.<br />

Substantial upside potential has also<br />

been identified in <strong>the</strong> block in <strong>the</strong> Kaiso-<br />

Tonya area, <strong>the</strong> Butiaba area to <strong>the</strong> north<br />

and beneath Lake Albert, where <strong>the</strong><br />

larger prospects are located.<br />

Block 2 is also likely to be <strong>the</strong> hub of any<br />

future development due to <strong>the</strong> relatively<br />

easy access to <strong>the</strong> lake shore, <strong>the</strong> level<br />

terrain for operations and <strong>the</strong> logical<br />

oil export route to <strong>the</strong> coast.<br />

In 2007, <strong>Tullow</strong> will undertake a<br />

programme of 2D and 3D seismic<br />

acquisition and fur<strong>the</strong>r drilling across<br />

<strong>the</strong> basin to prove up <strong>the</strong> reserves.<br />

In addition, <strong>Tullow</strong> plans to sanction<br />

<strong>the</strong> development of an Early Production<br />

System in 2007, with a view to producing<br />

first oil in 2009.<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 5


Corporate Governance<br />

In today’s environment, <strong>Tullow</strong> faces a wide range of challenges<br />

and opportunities in <strong>the</strong> areas of CSR and EHS responsibility<br />

and performance. This is particularly so given <strong>the</strong> nature of <strong>the</strong><br />

oil and gas industry and <strong>the</strong> geographic location of <strong>the</strong> Group’s<br />

operations, many of which are in countries with complex<br />

socio-economic challenges or high environmental sensitivity.<br />

www.tullowoil.com/about us<br />

<strong>Tullow</strong> has a long track record of respecting,<br />

developing and fostering relationships<br />

in countries and communities where we<br />

operate. This longevity is based on an<br />

awareness and understanding of <strong>the</strong><br />

Group’s obligation to its responsibilities.<br />

The Board and senior management are fully<br />

committed to all aspects of good corporate<br />

behaviour and risk management. Corporate<br />

responsibility and accountability is reflected<br />

in our organisational structure, policies and<br />

processes and ensuring we comply fully with<br />

legislative and regulatory requirements.<br />

Clear and effective governance<br />

<strong>Tullow</strong>’s Board operates within a clear<br />

governance framework for <strong>the</strong> management<br />

of <strong>the</strong> Group, <strong>the</strong> safety of its operations<br />

and employees and <strong>the</strong> balance of countries,<br />

business units and individual assets<br />

within our portfolio. The Board has overall<br />

responsibility for <strong>the</strong> financial, business<br />

and operational risks facing <strong>the</strong> Group, and<br />

to ensure that <strong>Tullow</strong> consistently applies<br />

its focused growth strategy and maintains<br />

a long-term view in developing <strong>the</strong> business.<br />

The Board comprises 12 Directors with seven<br />

executive Directors and five non-executive<br />

Directors. Rohan Courtney is <strong>the</strong> Senior<br />

Independent Director and <strong>the</strong> Board operates<br />

three principal committees.<br />

Directors’ biographies and Board Committee<br />

information are on pages 34 and 35 of <strong>the</strong><br />

2006 Annual <strong>Report</strong> and a detailed Corporate<br />

Governance <strong>Report</strong> is on pages 37 to 41.<br />

This information is also contained in <strong>the</strong><br />

Group’s website.<br />

Strong risk management<br />

<strong>Tullow</strong> is exposed to a range of technical,<br />

geological, operational, political,<br />

environmental, health and safety and<br />

financial risks in <strong>the</strong> conduct of its day-to-day<br />

business. The Group seeks to manage and<br />

mitigate <strong>the</strong>se risks by maintaining a<br />

balanced portfolio, through compliance with<br />

<strong>the</strong> terms of its licences, <strong>the</strong> application of<br />

established policies and procedures<br />

appropriate for an international oil and gas<br />

company, and <strong>the</strong> recruitment and retention<br />

of skilled personnel throughout its business.<br />

The Group’s principal risks are considered to<br />

fall into four key categories of strategic,<br />

financial, operational and external risks.<br />

Detailed information on risk is contained on<br />

page 41 of <strong>the</strong> Annual <strong>Report</strong> 2006.<br />

Accounting policies and standards<br />

The Directors are responsible for preparing<br />

<strong>the</strong> Annual <strong>Report</strong> and financial statements,<br />

which was published on 19 April, 2007.<br />

The Directors have chosen to prepare <strong>the</strong><br />

accounts for <strong>the</strong> Group in accordance with<br />

International Financial <strong>Report</strong>ing Standards<br />

(IFRS), and in virtually all circumstances<br />

a fair presentation will be achieved by<br />

compliance with all applicable IFRS.<br />

Political donations<br />

There were no donations made to political<br />

parties during 2006.<br />

ECOFAC<br />

Since 2003, <strong>Tullow</strong> has supported<br />

<strong>the</strong> Programme for Conservation<br />

and Rational Utilization of Forest<br />

Ecosystems in Central Africa<br />

(ECOFAC). This support was recently<br />

renewed for a fur<strong>the</strong>r three years<br />

to 2009, with total funding of<br />

US$155,000. The aim of this project is<br />

to educate local communities to help<br />

<strong>the</strong>m prevent <strong>the</strong> spread of Ebola to<br />

<strong>the</strong> human population, to manage and<br />

monitor new epidemics of Ebola on<br />

large monkeys and o<strong>the</strong>r wild animals<br />

and to help gorilla families acclimatise<br />

to humans so that eco-tourism can be<br />

developed in <strong>the</strong> region. Preventing<br />

and managing <strong>the</strong> spread of Ebola is<br />

a significant factor in maintaining <strong>the</strong><br />

gorilla population. A fundamental<br />

element in ensuring <strong>the</strong> survival of<br />

<strong>the</strong>se incredible primates is <strong>the</strong> need<br />

for a greater understanding of this<br />

devastating disease, and this is <strong>the</strong><br />

key reason for <strong>Tullow</strong>’s continued<br />

support of this major project.<br />

6 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


Audit Committee Remuneration Committee Nominations Committee<br />

The Audit Committee monitors and<br />

reviews all financial reporting, systems<br />

of internal control, risk management<br />

and <strong>the</strong> Group’s relationship with <strong>the</strong><br />

external auditor. The Audit Committee<br />

comprises five members, met four<br />

times during 2006 and <strong>the</strong> Chairman<br />

of <strong>the</strong> Committee is Rohan Courtney.<br />

The Remuneration Committee is<br />

responsible for setting targets for<br />

performance-related pay, <strong>the</strong> design of<br />

share incentive plans and pension policy<br />

for executive Directors and senior group<br />

executives. The Committee also determines<br />

<strong>the</strong> remuneration of <strong>the</strong> Chairman,<br />

executive Directors and key senior<br />

management at <strong>Tullow</strong>. The Remuneration<br />

Committee comprises six members,<br />

met four times during 2006 and <strong>the</strong><br />

Chairman of <strong>the</strong> Committee is Pat Plunkett.<br />

The Nominations Committee focuses<br />

on Board structure, size and composition,<br />

succession planning for Directors and<br />

senior management, <strong>the</strong> selection<br />

and nomination of new Board members<br />

as appropriate and also makes<br />

recommendations on <strong>the</strong> composition<br />

of Board committees. The Nominations<br />

Committee comprises six members, met<br />

three times during 2006 and <strong>the</strong> Chairman<br />

of <strong>the</strong> Committee is Pat Plunkett.<br />

Angola<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 7


CSR Committee and programme<br />

The CSR Committee is responsible for managing all <strong>Tullow</strong>’s<br />

community sponsorship support programmes and considers any<br />

matters relating to social, charitable, community and educational<br />

issues, toge<strong>the</strong>r with CSR publications and CSR expenditure.<br />

touraid<br />

In 2006, <strong>Tullow</strong> sponsored a group<br />

of 20 boys from <strong>the</strong> Kyadondo Rugby<br />

Football Club in Uganda, through<br />

a new charity called touraid, which<br />

aims to give opportunities to young<br />

people from disadvantaged<br />

backgrounds <strong>the</strong> chance to come<br />

to <strong>the</strong> UK to play rugby. touraid hopes<br />

to establish sustainable links, through<br />

rugby, between schools and clubs in<br />

<strong>the</strong> UK and <strong>the</strong> disadvantaged areas<br />

of developing nations to provide<br />

educational, cultural, economic and<br />

social benefits. <strong>Tullow</strong>’s sponsorship<br />

helped <strong>the</strong> young rugby players spend<br />

six days in <strong>the</strong> UK enjoying a variety<br />

of activities, including training with<br />

leading teams, playing a number<br />

of fixtures and forming <strong>the</strong> Guard<br />

of Honour to <strong>the</strong> South African<br />

team when <strong>the</strong>y played England at<br />

Twickenham. The UK schools that<br />

hosted <strong>the</strong>se young Ugandans also<br />

raised money to support <strong>the</strong>ir ongoing<br />

education when <strong>the</strong>y returned home.<br />

Our CSR strategy aligns investment<br />

with key areas and countries for business<br />

development. In 2006, funding for social<br />

and community projects amounted to<br />

US$1.5 million, up 12% on <strong>the</strong> 2005<br />

level. Information on <strong>the</strong>se projects is<br />

contained in <strong>the</strong> case studies throughout<br />

this report. The 2007 budget for funding<br />

social and community-based projects<br />

is US$2.5 million, representing both<br />

commitments under licence agreements<br />

and discretionary funding.<br />

<strong>Tullow</strong> has developed a set of project<br />

funding criteria which concentrate on<br />

<strong>the</strong> support of children, education and,<br />

where appropriate, fulfilment of basic<br />

needs, such as clean water. Projects<br />

considered will be mainly long-term<br />

investments where <strong>the</strong>re is established<br />

production, an operated activity or a<br />

key country for development. One-off<br />

investment will also be considered in<br />

<strong>the</strong> context of <strong>Tullow</strong>’s business.<br />

Overall, <strong>Tullow</strong>’s objective is to make<br />

a tangible, positive difference and to<br />

foster and support longer-term<br />

development and self-sustaining<br />

enterprise in local communities.<br />

The responsibilities of <strong>the</strong> CSR Committee<br />

are to:<br />

• Develop and implement a framework<br />

for submission, assessment and<br />

approval of discretionary and mandatory<br />

community, social and educational<br />

expenditure undertaken by <strong>Tullow</strong><br />

Group-wide;<br />

• Consider and propose an annual<br />

budget for CSR activities to <strong>the</strong> Board<br />

for approval as part of <strong>the</strong> overall<br />

Group budgeting process;<br />

• Evolve and fur<strong>the</strong>r develop <strong>Tullow</strong>’s<br />

social and ethical policies as part of <strong>the</strong><br />

overall risk management framework of<br />

<strong>the</strong> business;<br />

• Prepare <strong>the</strong> CSR <strong>Report</strong> annually;<br />

• Review <strong>the</strong> internal CSR programme,<br />

ensuring co-ordination between internal<br />

and external activities and ensuring that<br />

<strong>the</strong> internal CSR function is adequately<br />

resourced and has appropriate standing<br />

within <strong>the</strong> Group; and<br />

• Consider o<strong>the</strong>r CSR matters as specified<br />

by <strong>the</strong> Board.<br />

In <strong>the</strong> 2005 CSR <strong>Report</strong> we<br />

documented <strong>the</strong> key Social, Ethical<br />

and Environmental (SEE) issues for<br />

<strong>Tullow</strong>. Feedback from shareholders<br />

requested that we enhance this<br />

information by including exactly<br />

how we address <strong>the</strong>se issues,<br />

highlighting <strong>the</strong> key aspects of<br />

<strong>the</strong> Group’s policy in each area<br />

and integrating all <strong>the</strong> elements<br />

of related information into one<br />

area of <strong>the</strong> report. We have done<br />

this on pages 10 and 11.<br />

8 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


2006 CSR expenditure US$1.5 million<br />

Total by country by classification by length of commitment<br />

Angola 33%<br />

Bangladesh 4%<br />

Britain 2%<br />

Congo (Brazzaville) 1%<br />

Equatorial Guinea 12%<br />

Gabon 9%<br />

Ireland 5%<br />

Namibia 10%<br />

Pakistan 2%<br />

South Africa 7%<br />

Uganda 15%<br />

‘Working with Communities’ 35%<br />

Education 33%<br />

Community Facilities 13%<br />

Conservation 10%<br />

Health 5%<br />

O<strong>the</strong>r 4%<br />

Ongoing 69%<br />

One-off 31%<br />

Our CSR Committee<br />

1 2<br />

1. Graham Brunton<br />

Head of EHS (Chairman)<br />

2. Rohan Courtney<br />

Senior Independent Director (non-executive)<br />

3. Tom Hickey<br />

Chief Financial Officer and executive Director<br />

4. Paul McDade<br />

Chief Operating Officer and executive Director<br />

5. Kevin Quinn<br />

Business Unit Manager South Asia<br />

6. Bill Torr<br />

General Manager Cape Town Office<br />

7. Caragh Whale<br />

EHS Technical Assistant<br />

3 4<br />

5 6<br />

7<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 9


Social, ethical and environmental accountability<br />

<strong>Tullow</strong> is motivated by a strong belief that as a Group, collectively<br />

and individually, we should be responsible, aware and committed<br />

in all our activities. This is very important given <strong>the</strong> ever increasing<br />

international spread of our operations, combined with <strong>the</strong> dynamic<br />

nature and inherent risks of <strong>the</strong> oil and gas industry. Our goal is<br />

to preserve biodiversity and promote sustainable development<br />

by protecting people, minimising harm to <strong>the</strong> environment and<br />

reducing disruption to our neighbouring communities.<br />

Environment<br />

We aim to minimise discharges, emissions and waste that adversely affect <strong>the</strong> environment. Staff and contractors are given<br />

appropriate training to perform <strong>the</strong>ir tasks safely and with due regard for <strong>the</strong> environment. Risks from our activities are<br />

assessed and ei<strong>the</strong>r eliminated or reduced to acceptable levels. We apply responsible standards where legislation is inadequate or<br />

non-existent. To respond effectively in <strong>the</strong> event of an incident we ensure that as a Group we are comprehensively prepared through<br />

our Crisis Management System and local emergency training initiatives.<br />

Appropriate and accountable policy<br />

Updated March 2007<br />

ISO 14001 certification for<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong><br />

Standardising ESIA across <strong>the</strong> Group<br />

The Group’s EHS policy is reviewed annually, implemented across <strong>the</strong> Group and published on <strong>the</strong><br />

Group’s intranet and website. It is reinforced by appropriate training for staff and contractors to<br />

perform <strong>the</strong>ir tasks safely with due regard for <strong>the</strong>mselves, <strong>the</strong>ir colleagues and <strong>the</strong> environment.<br />

This is supported by regular site visits to potentially higher risk activities by <strong>the</strong> EHS team and by<br />

linking EHS performance top/down and bottom/up through <strong>the</strong> Group’s Performance Management<br />

System. <strong>Tullow</strong>’s EHS policy is communicated to suppliers and partners through dialogue and<br />

visits from country and business unit managers. Aligned EHS values and responsibility are part of<br />

our Contract Procurement and Environmental and Social Impact Assessment (ESIA) procedures.<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> achieved ISO 14001 certification in May 2006 for <strong>the</strong> Group’s corporate environmental<br />

management system. To achieve and maintain a consistent approach to environmental<br />

performance in an expanding business, <strong>Tullow</strong> uses its environmental policies, <strong>the</strong> Integrated<br />

Management System (IMS) and related tools.<br />

We integrate ESIA into our project and development planning and processes, using a template that<br />

is aligned with World Bank Standards and best practice.<br />

Health and Safety<br />

Our goal is to ensure <strong>Tullow</strong> employees and contractors work in safe places with safe systems of work and that suitable procedures<br />

are provided and maintained. Our philosophy is that everybody has individual authority, responsibility and accountability for <strong>the</strong> safety<br />

of <strong>the</strong>mselves and o<strong>the</strong>rs. To support this, we train our employees and contractors to perform <strong>the</strong>ir task safely and we promote a<br />

culture of reporting any health and safety concerns, near misses or incidents. We provide regular health and safety training and<br />

briefings, and, to ensure that all employees and contractors are fully prepared in <strong>the</strong> event of a health and safety issue arising,<br />

we conduct regular training drills and live simulation exercises in local operations.<br />

A policy making every individual<br />

accountable, updated March 2007<br />

Strong leadership at a group and<br />

local level<br />

Good risk assessment and<br />

pre-planning to mitigate risks<br />

Health and safety is incorporated into <strong>the</strong> Group’s overall EHS policy. We have a detailed reporting<br />

process for health and safety statistics and <strong>the</strong>se are reported to <strong>the</strong> Board on an ongoing basis.<br />

To promote a strong health and safety culture, we regularly communicate our performance in<br />

<strong>the</strong>se areas to employees through town hall meetings and <strong>the</strong> Group’s intranet.<br />

EHS leadership and performance metrics are embedded in <strong>the</strong> Group’s Performance Management<br />

System and linked into business unit and country performance targets and individual performance<br />

appraisal. It is supplemented by EHS leadership training at all levels across <strong>the</strong> business.<br />

Risk assessment is carried out at country, project and task level. All actions required are documented<br />

and tracked through to completion. Effective design, planning and construction of operations helps<br />

mitigate risks and identify and manage potential hazards in all development activity.<br />

10 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


Community<br />

Our goal is to conduct all our business operations to best industry standards and to behave in a socially responsible manner.<br />

Our values are to behave ethically and with integrity in <strong>the</strong> communities where we work and to respect cultural, national and<br />

religious diversity. Directors, company personnel and contractors are responsible for ensuring compliance with this policy,<br />

and we encourage our partners and stakeholders to observe similar standards wherever possible.<br />

Implement a responsible and<br />

responsive policy, updated March 2007<br />

Hands-on leadership and sponsorship<br />

from <strong>the</strong> CSR Committee<br />

Proactive local engagement and<br />

a meaningful contribution<br />

The Group’s CSR policy is reviewed and implemented on an annual basis and is widely<br />

communicated through <strong>Tullow</strong>’s intranet and website.<br />

The Group has a CSR Committee which has overall responsibility to <strong>the</strong> Board for <strong>the</strong><br />

implementation of <strong>Tullow</strong>’s CSR policy, alignment of project sponsorship and business<br />

development, and allocation of discretionary CSR funding. See full details on pages 8 and 9.<br />

Country and business unit managers and local offices are responsible for implementing any social<br />

or community-based commitments under <strong>the</strong> terms of licences or Production Sharing Contracts<br />

(PSC). Local managers also make applications to <strong>the</strong> CSR Committee for discretionary funding to<br />

support specific local community projects or charitable causes. The focus of <strong>the</strong>se projects is<br />

mainly on children, education and basic needs. <strong>Tullow</strong> undertakes long-term recurring<br />

investments and one-off projects depending on <strong>the</strong> Group’s operations<br />

and business development in <strong>the</strong> locality, country or region.<br />

Compliance<br />

Our goal is to comply with all applicable laws and regulations where we operate, and apply responsible standards where legislation<br />

is inadequate or non-existent.<br />

Ensuring management systems are<br />

effective and implemented<br />

throughout <strong>the</strong> Group<br />

Rigorous audit programme to<br />

support compliance<br />

Moving to external verification of <strong>the</strong><br />

Group’s EHS and CSR performance<br />

Each business unit and asset manager is responsible for implementing systems and processes<br />

that comply with all <strong>the</strong> requirements of <strong>the</strong> Group’s IMS, which includes legislative and regulatory<br />

compliance components. Full details of <strong>the</strong> IMS is on page 14.<br />

The EHS team in <strong>Tullow</strong> conducts an annual Audit Programme. This is a combination of: strategic<br />

audits which look at compliance with corporate policies and procedures in-country; tactical audits<br />

at a business unit level to ensure that EHS policies and procedures are effective; asset-specific<br />

audits for key higher risk activities such as drilling and seismic acquisition programmes.<br />

In 2006, <strong>Tullow</strong> reviewed <strong>the</strong> options for external verification of <strong>the</strong> CSR <strong>Report</strong>, including an<br />

assessment against <strong>the</strong> Global <strong>Report</strong>ing Initiative (GRI) principles, which are being updated<br />

in June 2007. Overall, <strong>Tullow</strong> is committed to producing a balanced and reasonable account of<br />

its economic, environmental and social performance and is working towards achieving<br />

external verification.<br />

Stakeholder engagement<br />

Our goal is to cultivate strong, open and lasting relationships with all key stakeholders, both internal and external. We are committed<br />

to clearly communicating all aspects of <strong>the</strong> Group’s performance in a timely, uniform and transparent manner and we support this<br />

objective with a wide range of initiatives at a local, business unit, country and corporate level.<br />

Open, transparent and<br />

timely reporting<br />

Broad engagement with<br />

all stakeholders<br />

Strong Investor Relations and<br />

Corporate Communications<br />

programmes<br />

<strong>Tullow</strong> publishes a range of corporate communications documents and presentations as well<br />

as complementary materials such as Group policies, company profile, fact sheet, fact book and<br />

additional information on operations and assets, all of which are available on our website at<br />

www.tullowoil.com. In 2006, as part of a Group-wide initiative to improve internal communication,<br />

knowledge sharing and information, <strong>the</strong> Group developed a common <strong>Tullow</strong> intranet.<br />

At a corporate, country and business unit level, <strong>Tullow</strong> operates a wide range of communications<br />

programmes, full details of which are on pages 34 and 36.<br />

<strong>Tullow</strong> now has over 10,000 shareholders, comprising a range of investors including<br />

pension funds, fund management companies, private individuals, Directors, management<br />

and employees. In 2006, over 250 meetings were undertaken with investors, analysts and<br />

<strong>the</strong> financial media.<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 11


EHS at <strong>Tullow</strong><br />

At <strong>Tullow</strong>, we are committed to <strong>the</strong> highest standards of EHS<br />

performance across our business and we seek to continuously<br />

improve all our EHS activities. We regularly set and review our<br />

EHS objectives and targets and benchmark our activities, with<br />

<strong>the</strong> aim of achieving consistent improvement in EHS knowledge<br />

and performance.<br />

EHS responsibility<br />

<strong>Tullow</strong>’s EHS policy, which was updated in<br />

March 2007, aims to ensure that <strong>the</strong> Group<br />

manages and minimises its impact on <strong>the</strong><br />

environment and ensures that <strong>Tullow</strong><br />

employees and contractors have a safe place<br />

to work with safe systems and procedures.<br />

We aim to comply with <strong>the</strong> appropriate<br />

environment, health, safety and welfare<br />

legislation in every jurisdiction where <strong>the</strong><br />

Group has operations.<br />

A reflection of <strong>Tullow</strong>’s commitment to <strong>the</strong><br />

sustainable development of <strong>the</strong> Group is that<br />

responsibility for EHS and CSR resides at <strong>the</strong><br />

highest level. Aidan Heavey, <strong>Tullow</strong>’s founder<br />

and Chief Executive Officer, is <strong>the</strong> Nominated<br />

Director with responsibility for EHS and CSR.<br />

EHS performance is reported to management<br />

on a monthly basis and any material issue is<br />

reported and dealt with immediately. There<br />

are formal presentations to <strong>the</strong> Board on this<br />

subject a minimum of twice a year.<br />

EHS culture<br />

We promote a strong EHS culture by<br />

embedding EHS throughout <strong>the</strong> business,<br />

and in <strong>the</strong> conduct of our day-to-day<br />

activities. We manage our EHS performance<br />

through <strong>the</strong> Group’s IMS and related tools.<br />

All <strong>Tullow</strong> job descriptions clearly identify<br />

<strong>the</strong> general health and safety responsibilities<br />

for <strong>the</strong> individual as well as any specific<br />

requirements for <strong>the</strong>ir role. Health and safety<br />

awareness is one of <strong>the</strong> five key qualities that<br />

are assessed as part of <strong>Tullow</strong>’s performance<br />

appraisal process, where employees are<br />

evaluated by how well <strong>the</strong>y understand <strong>the</strong><br />

importance of EHS issues in all aspects of<br />

<strong>the</strong> business and whe<strong>the</strong>r <strong>the</strong>y fully and<br />

actively support <strong>Tullow</strong>’s EHS policies and<br />

objectives. There is a strong EHS culture<br />

which ensures high levels of employee and<br />

contractor awareness and a willingness to<br />

contribute individually and collectively to<br />

EHS issues.<br />

At a senior level, <strong>the</strong>re are bi-monthly<br />

EHS management meetings and health<br />

and safety is on <strong>the</strong> agenda at <strong>the</strong> Group’s<br />

monthly meeting, feedback from which is<br />

widely circulated. For high risk activities,<br />

such as drilling and seismic acquisition,<br />

<strong>the</strong>re is direct involvement with <strong>the</strong><br />

contractors managing <strong>the</strong> project to<br />

ensure that health and safety standards<br />

are being met and maintained.<br />

EHS leadership<br />

We provide strong and visible leadership<br />

in EHS. Each year, <strong>Tullow</strong>’s Chief Operating<br />

Officer, Paul McDade, holds a week-long<br />

seminar which is attended by business unit<br />

and country managers and o<strong>the</strong>r senior<br />

personnel including those responsible for<br />

higher risk activities such as drilling and<br />

seismic acquisition. This meeting includes<br />

two days dedicated to EHS to ensure a<br />

consistent message and standards across<br />

<strong>the</strong> Group and to get senior management<br />

input into upcoming EHS activities. Subjects<br />

covered this year included EHS leadership<br />

and commitment, an introduction to <strong>the</strong><br />

improved Accident and Incident <strong>Report</strong>ing<br />

and Investigation Procedures and a<br />

discussion regarding <strong>the</strong> annual EHS<br />

management review. Briefings were also<br />

conducted on crisis and emergency<br />

management, ISO 14001 certification and<br />

environmental standards management,<br />

and CSR initiatives.<br />

‘Step Change in Safety’<br />

As a member of <strong>the</strong> United Kingdom<br />

Offshore Operators Association<br />

(UKOOA), <strong>Tullow</strong> participates in a key<br />

industry initiative called ‘Step Change<br />

in Safety’, which aims to make <strong>the</strong><br />

UK <strong>the</strong> safest place to work in <strong>the</strong><br />

worldwide oil and gas industry by <strong>the</strong><br />

year 2010. To support this programme<br />

<strong>Tullow</strong> encourages business unit<br />

managers to visit key operational<br />

sites to raise <strong>the</strong> profile of safety<br />

and safety awareness. In 2006,<br />

Mike Simpson, UK Business Unit<br />

Manager, visited <strong>the</strong> Ensco 101<br />

drilling operations and Bacton Gas<br />

Terminal as part of <strong>the</strong> ‘Boots on<br />

for Safety’ element of this campaign.<br />

12 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


Our EHS team<br />

1 2<br />

3 4<br />

5<br />

6 7<br />

3. Paul Coward<br />

UK Business Unit, EHS Adviser<br />

BSc Hons, Aged 31<br />

Paul joined <strong>Tullow</strong> in July 2005, as EHS advisor<br />

for <strong>the</strong> UK operations including <strong>the</strong> Bacton Gas<br />

Terminal and <strong>the</strong> Hewett, Schooner and Ketch,<br />

and Horne & Wren fields. Paul has six years’<br />

oil and gas experience, and prior to joining<br />

<strong>Tullow</strong> worked with Petrofac in Facilities<br />

Management including providing EHS support<br />

for a number of UK offshore assets for a range<br />

of operators.<br />

1. Graham Brunton<br />

Head of EHS, <strong>Report</strong>s to Aidan Heavey<br />

Bsc Hons, Postgraduate H&S qualification<br />

Aged 43<br />

Graham joined <strong>Tullow</strong> in November 2001 as<br />

Head of EHS. His current role involves managing<br />

environment, health, safety and security issues<br />

across <strong>the</strong> <strong>Tullow</strong> portfolio as well as managing<br />

<strong>the</strong> Group’s CSR programme. Graham has over<br />

15 years’ experience in <strong>the</strong> oil and gas industry<br />

and prior to joining <strong>Tullow</strong>, he worked for BHP<br />

Petroleum. Before that he worked as an EHS<br />

Consultant and his first role after graduating<br />

was as an Inspector with <strong>the</strong> Health and<br />

Safety Executive.<br />

2. Monique Beattie<br />

Bangladesh EHS Advisor<br />

MSc in Geology, BCom in Accounting, Aged 42<br />

Monique Beattie has worked for <strong>Tullow</strong> since<br />

mid-2004, when she became <strong>the</strong> Group’s EHS<br />

Advisor for African Assets, having previously<br />

been EHS Manager for Energy Africa. In July<br />

2006, Monique was seconded from Cape Town<br />

to Dhaka for 18 months to support <strong>Tullow</strong>’s<br />

Bangladesh business at a busy time in its<br />

operations. Her previous work experience was<br />

mainly in greenstone gold mineralisation and<br />

cement manufacture.<br />

6. Rex Quick<br />

Africa EHS Adviser<br />

BSc Hons, MSc, Aged 47<br />

Rex has been with <strong>Tullow</strong> <strong>Oil</strong> just under one<br />

year, and for <strong>the</strong> previous 10 years had been an<br />

EHS Consultant. He has carried out more than<br />

50 studies in <strong>the</strong> urban, terrestrial and marine<br />

environments of Africa, <strong>the</strong> Middle East, and<br />

Europe. These studies have covered virtually<br />

all aspects of impact assessment and<br />

environmental management, including oil and<br />

gas exploration and production activities and<br />

pipeline discharges. Rex also has extensive<br />

health and safety experience.<br />

4. Maree Early<br />

EHS Advisor<br />

BE in Chemical Engineering<br />

Postgraduate OHS qualification, Aged 30<br />

Maree joined <strong>Tullow</strong> in May 2006 as an EHS<br />

Advisor. Her role involves working on corporate<br />

policies, and providing EHS assistance to various<br />

Group projects and operations. Maree began<br />

her career as an Engineer, and studied for<br />

a Postgraduate Occupational Health and<br />

Safety (OHS) qualification whilst working in<br />

<strong>the</strong> manufacturing industry. Maree has over<br />

eight years’ experience in EHS, and her<br />

previous roles included Senior EHS Advisor<br />

for Pilkington Australia.<br />

7. Caragh Whale<br />

EHS Technical Assistant<br />

BA, NEBOSH Certificate, Aged 32<br />

Caragh joined <strong>Tullow</strong> in May 2006 as EHS<br />

Technical Assistant. Her role involves managing<br />

and reporting on statistical EHS information,<br />

Crisis Management Team administration,<br />

intranet EHS/CSR content management and<br />

Secretary of <strong>the</strong> CSR Committee. Caragh<br />

successfully obtained her NEBOSH general<br />

certificate within months of joining <strong>the</strong><br />

EHS Team.<br />

5. Sajjad Ahmed Gill<br />

Pakistan EHS Adviser<br />

Medical Doctor, Aged 40<br />

Sajjad joined <strong>Tullow</strong> in April 2000 and is responsible<br />

for managing <strong>the</strong> EHS aspects of <strong>the</strong> Group’s<br />

Pakistan operations and providing occasional<br />

support to Bangladesh. Sajjad, who is a qualified<br />

doctor, has over 12 years experience in <strong>the</strong> oil<br />

and gas industry, with environmental and safety<br />

skills including a National Examination Board<br />

for Occupational Safety and Health (NEBOSH)<br />

Certificate and RoSPA Certification. Sajjad<br />

previously worked with Schlumberger <strong>Oil</strong> Field<br />

Services as a medical adviser.<br />

In April and May this year, three new people<br />

joined <strong>the</strong> EHS team with responsility for EHS<br />

and CSR in Uganda.<br />

Nahya Nkinzi<br />

CSR Advisor<br />

Ashleigh Olsen<br />

EHS and CSR Adivsor<br />

Steve Dawson<br />

Senior EHS Advisor<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 13


EHS at <strong>Tullow</strong><br />

continued<br />

By 1 June, 2007 we are required by<br />

<strong>the</strong> Department of Trade and Industry<br />

(DTI) to prepare and publish, on<br />

<strong>Tullow</strong>’s and <strong>the</strong> DTI’s websites, a<br />

statement on our environmental<br />

management system. This is part of<br />

an initiative to promote <strong>the</strong> use and<br />

implementation of such systems by<br />

<strong>the</strong> offshore oil and gas industry in<br />

<strong>the</strong> UK, and <strong>Tullow</strong> already fully<br />

complies with this recommendation<br />

through <strong>the</strong> use of <strong>the</strong> IMS. The scope<br />

of <strong>the</strong> public statement concentrates<br />

only on those assets regulated by <strong>the</strong><br />

DTI, which for <strong>Tullow</strong> are <strong>the</strong> Hewett<br />

offshore installations.<br />

EHS management<br />

<strong>Tullow</strong> manages its EHS performance<br />

through <strong>the</strong> Group’s IMS, which provides a<br />

disciplined framework for <strong>the</strong> management<br />

of environment, health, safety and security<br />

throughout <strong>the</strong> Group. Each business unit<br />

and asset is responsible for implementing<br />

systems and processes that comply with <strong>the</strong><br />

requirements of <strong>the</strong> IMS. <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong>’s<br />

certification to ISO 14001 provides external<br />

verification of <strong>the</strong> IMS and this is<br />

complemented by an internal EHS audit<br />

programme to ensure that compliance with<br />

<strong>the</strong> IMS is effective at an operational level.<br />

The IMS offers a high level of business<br />

assurance through:<br />

• A systematic approach to critical<br />

business activities;<br />

• Clear assignment of responsibilities<br />

and accountability;<br />

• High standards for business and<br />

EHS performance linked to Group<br />

EHS objectives;<br />

• Legislative and regulatory compliance<br />

throughout all operations;<br />

• Sound risk management, planning<br />

and decision-making; and<br />

• Efficient and cost-effective planning<br />

and conduct of operations.<br />

The system also allows us to record<br />

and share EHS experiences and we use<br />

those findings to continually improve<br />

performance standards. For new projects<br />

and developments, ESIAs are integrated<br />

into <strong>the</strong> decision-making process. Overall,<br />

we use <strong>the</strong> IMS to measure progress, plan<br />

improvements and ensure accountability<br />

for EHS performance and we have an<br />

ongoing focus on ways to reduce any<br />

environmental impacts and achieve<br />

sustainable improvements in this area.<br />

Intergrated Management System (IMS)<br />

Organisation and<br />

responsibilities<br />

Objectives and Plans<br />

Policy<br />

Leadership, accountability<br />

and commitment<br />

Continual improvement<br />

Planning<br />

• Risk management<br />

• Legislative and regulatory compliance<br />

• Management of change<br />

• Personnel selection, training<br />

and competence<br />

• Contractor selection and management<br />

Implementation<br />

• Design and construction<br />

• Operations and maintenance<br />

• Crisis and emergency management<br />

• Incident investigation<br />

• Health management<br />

• Environmental management<br />

• Travel and security<br />

• Social, ethical and<br />

community awareness<br />

• Information and documentation<br />

Performance measurement,<br />

monitoring and reporting<br />

Audit, review, assessment<br />

14 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


Turtles in Chachar<br />

<strong>Tullow</strong>’s EHS Policy clearly and explicitly<br />

empowers any individual to stop any<br />

activity at any time where <strong>the</strong>re is an<br />

unacceptable risk of an accident or<br />

environmental incident. The practical<br />

application of this statement does not just<br />

apply to major issues, as demonstrated<br />

during a drilling operation in Pakistan<br />

during <strong>the</strong> year. The commitment of<br />

<strong>Tullow</strong>’s workforce to <strong>the</strong> environment<br />

and local biodiversity meant that work<br />

in <strong>the</strong> immediate area of a well was<br />

suspended until a small local species of<br />

turtle that was found near <strong>the</strong> site could<br />

be relocated to a new home nearby.<br />

UK SNS<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 15


EHS performance<br />

In this section of <strong>the</strong> report, we have outlined our environmental,<br />

health and safety performance. The Group’s operating and financial<br />

performance is fully reported on during <strong>the</strong> year and is contained in<br />

our Annual <strong>Report</strong>, Full Year and Interim Results statements and<br />

Trading and Operational updates. This, and additional information<br />

on <strong>the</strong> Group, is available on our website.<br />

www.tullowoil.com<br />

Our goal is to continue to protect<br />

our employees, contractors and local<br />

communities where we work and manage<br />

our impact on <strong>the</strong> environment. In 2006,<br />

we delivered ano<strong>the</strong>r excellent EHS<br />

performance, building on a strong outcome<br />

in 2005. There were positive results across<br />

<strong>the</strong> key EHS performance metrics we measure,<br />

and we performed well against our 2006<br />

EHS and CSR objectives. Most important<br />

of all, 2006 was ano<strong>the</strong>r year where <strong>Tullow</strong><br />

had no significant environmental, health,<br />

safety or security issues.<br />

A growing business<br />

<strong>Tullow</strong> has grown beyond all recognition<br />

in <strong>the</strong> last number of years. Production<br />

has increased from 2,500 boepd in 2000 to<br />

a targeted level of 85,000 boepd by <strong>the</strong> end<br />

of this year. 2006 was a particularly busy<br />

year with 6.1 million hours worked during<br />

<strong>the</strong> year by over 4,000 people, both onshore<br />

and offshore, representing a 65% increase<br />

in hours worked compared to 2005.<br />

There are significant challenges in<br />

assessing and managing EHS and potential<br />

risks with this number of people and level<br />

of activity, particularly with drilling and<br />

seismic acquisition programmes. In 2006,<br />

12 exploration wells were drilled and 2,108 km<br />

of 2D and 2,608 sq km of 3D seismic data was<br />

acquired. This compares with 10 exploration<br />

wells in 2005 and 1,517 km of 2D and<br />

1,016 sq km of 3D seismic data acquired.<br />

Key operational risks and challenges are<br />

managed by <strong>Tullow</strong> in a number of ways,<br />

including promoting a strong EHS culture,<br />

implementing an effective EHS policy<br />

and ongoing training for employees and<br />

contractors to raise awareness and<br />

improve performance.<br />

In 2006, <strong>the</strong>re were two dedicated EHS training<br />

days with <strong>the</strong> Production and Development<br />

senior global team, 11 crisis management<br />

team simulation training exercises and over<br />

100 operational training sessions in Asia alone.<br />

The operational management of EHS is<br />

reviewed and reinforced by regular EHS<br />

management visits which focus mainly on<br />

higher risk projects. During 2006, members<br />

of <strong>the</strong> EHS team visited <strong>the</strong> offshore drilling<br />

programmes in <strong>the</strong> UK North Sea and <strong>the</strong><br />

onshore Bacton Terminal, <strong>the</strong> seismic<br />

acquisition programme in Kohat in Pakistan,<br />

<strong>the</strong> drilling of <strong>the</strong> Bangora 3 well and<br />

<strong>the</strong> construction of <strong>the</strong> Bangora Early<br />

Production Facility in Bangladesh, and<br />

drilling activity in Uganda.<br />

Feedback during <strong>the</strong> year requested<br />

that we improve our EHS reporting<br />

by including additional information<br />

on our performance, such as more<br />

detailed data on emissions, waste<br />

management, and health and safety.<br />

This year’s improvements included<br />

three-year statistics where available,<br />

Total Recordable Incident information<br />

and collation of all <strong>the</strong> data used in<br />

a new section called ‘Supplementary<br />

information’, in pages 42 and 43. We<br />

are reviewing ways to improve <strong>the</strong><br />

quality and range of data on<br />

Greenhouse Gases (GHG), waste<br />

management and energy consumption<br />

for reporting in <strong>the</strong> 2007 CSR report.<br />

16 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


2006 hours worked<br />

by country by onshore/offshore by activity<br />

Angola 0.09%<br />

Bangladesh 44.01%<br />

Gabon 1.44%<br />

Ireland 0.97%<br />

Ivory Coast 1.49%<br />

Pakistan 29.82%<br />

Romania 0.11%<br />

South Africa 1.75%<br />

UK 20.32%<br />

Company onshore 12.05%<br />

Contractor onshore 68.64%<br />

Contractor offshore 19.31%<br />

Exploration 40.39%<br />

Production 17.85%<br />

Drilling 19.83%<br />

Construction 7.04%<br />

Unspecified 14.89%<br />

Bangladesh<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 17


Health and safety<br />

Our biggest priority as a business is to keep people safe. We ensure<br />

that we provide safe places, safe work systems, appropriate training<br />

and suitable procedures, and we have an ongoing programme of<br />

awareness, education and training to reduce <strong>the</strong> potential for health<br />

and safety incidents.<br />

Industry standard metrics<br />

We measure how healthy and safe our<br />

operations are using a number of metrics.<br />

Lost Time Incidents (LTI) count all lost<br />

workday cases, where a <strong>Tullow</strong> employee<br />

or contractor was unable to perform <strong>the</strong>ir<br />

duties on <strong>the</strong> day following an incident.<br />

The Lost Time Incident Frequency Rate<br />

(LTIFR) correlates <strong>the</strong> number of LTIs with<br />

<strong>the</strong> number of hours worked during <strong>the</strong> year.<br />

We also began to measure Total Recordable<br />

Incidents (TRI) from 2005 onwards, and for<br />

this we use <strong>the</strong> International Association<br />

of <strong>Oil</strong> and Gas Producers (OGP) industry<br />

definition as our standard. TRI includes<br />

fatalities, LTIs, Restricted Work Day Cases<br />

(RWDC) and Medical Treatment Cases (MTC).<br />

The Total Recordable Incident Frequency Rate<br />

(TRIFR) correlated <strong>the</strong> number of TRIs with<br />

<strong>the</strong> number of hours worked during <strong>the</strong> year.<br />

Finally, we respond to all incidents based<br />

on <strong>the</strong>ir potential impact ra<strong>the</strong>r than actual<br />

impact by recording and reporting any High<br />

Potential Incidents (HIPO).<br />

Excellent safety record<br />

<strong>Tullow</strong> had a very good safety performance<br />

in 2006, continuing to keep our employees<br />

and contractors safe and well and build on<br />

<strong>the</strong> Group’s excellent safety track record.<br />

Lost Time Incidents<br />

A total of five LTIs were reported in 2006,<br />

compared with three incidents in 2005 and<br />

four incidents in 2004. Incidents, in each year,<br />

although very regrettable, were predominantly<br />

minor in nature. In 2006, <strong>Tullow</strong> achieved an<br />

LTIFR of 0.81, compared with 0.82 in 2005 and<br />

1.96 in 2004. The 2006 performance is again<br />

well within our target LTIFR of less than 1.00<br />

and is a significant achievement when taken<br />

in <strong>the</strong> context of a 65% increase in hours<br />

worked across <strong>the</strong> Group during <strong>the</strong> year.<br />

It also compares favourably with an industry<br />

LTIFR, as published by (OGP), of 1.09 in 2006.<br />

Total Recordable Incidents<br />

In 2006, <strong>Tullow</strong> had 74 recordable incidents<br />

which are made up of five LTIs, four RWDCs<br />

and 65 MTCs. There were zero fatalities<br />

during <strong>the</strong> year. As a consequence of <strong>the</strong><br />

high number of recordable incidents, TRIFR<br />

for 2006 was 12.1, which is significantly<br />

higher than <strong>the</strong> OGP industry standard of<br />

3.07 in 2006 and <strong>Tullow</strong>’s 2005 performance<br />

of 3.0 and 11 recordable incidents.<br />

Of <strong>the</strong> 74 reportable incidents across<br />

<strong>Tullow</strong> in 2006, over 80% were in Pakistan<br />

and were primarily <strong>the</strong> result of insect bites<br />

or malaria when humid wea<strong>the</strong>r and an<br />

increase in pooled water in <strong>the</strong> surrounding<br />

areas significantly increased <strong>the</strong> number<br />

of mosquitoes near to <strong>Tullow</strong>-operated areas.<br />

Preventative measures taken in 2006 included<br />

informing employees and contractors of<br />

<strong>the</strong> issues, revising accommodation on site,<br />

providing prophylaxis medication, malaria<br />

treatment medication, mosquito repellent<br />

and nets and regularly spraying <strong>the</strong> area.<br />

High Potential Incidents<br />

<strong>Tullow</strong> had a total of three HIPOs during<br />

2006, compared with two HIPOs in 2005.<br />

When any safety incident occurs we review<br />

<strong>the</strong> circumstances, <strong>the</strong>n follow-up and<br />

implement, as appropriate, new or enhanced<br />

procedures. Full details of <strong>the</strong> 2006 HIPOs<br />

are on page 19.<br />

Malaria<br />

Management<br />

Programme in<br />

Pakistan<br />

<strong>Tullow</strong> operates in a number of<br />

regions where malaria is ei<strong>the</strong>r<br />

a seasonal or constant risk to our<br />

employees and <strong>the</strong> surrounding<br />

communities. In Pakistan, for 2007,<br />

we have formalised <strong>the</strong> preventive<br />

measures untaken in 2006 and<br />

introduced a Malaria Management<br />

Programme in conjunction with <strong>the</strong><br />

Malaria Control Board of Pakistan.<br />

The programme aims not only to<br />

reduce incidents of malaria in <strong>Tullow</strong><br />

employees and contractors, but also<br />

in <strong>the</strong> neighbouring communities.<br />

Already this year, at <strong>the</strong> Chachar<br />

location, an education programme<br />

has been delivered to <strong>the</strong> local<br />

community toge<strong>the</strong>r with mosquito<br />

nets for each family.<br />

18 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


Lost Time Incidents (LTI)<br />

2006 5<br />

2005<br />

2004<br />

1 2 3 4 5<br />

Lost Time Incident Frequency Ratio (LTIFR)<br />

2006 0.81<br />

2006<br />

2005<br />

2005<br />

2004<br />

2004<br />

.2 .4 .6 .8 1.0 1.2 1.4 1.6 1.8 2.0<br />

3<br />

4<br />

1.09<br />

0.82<br />

0.97<br />

1.96<br />

1.09<br />

Total Recordable Incidents (TRI)<br />

2006 74<br />

2005<br />

11<br />

10 20 30 40 50 60 70 80<br />

Total Recordable Incident Frequency Ratio (TRIFR)<br />

2006 12.1<br />

2006<br />

2005<br />

2005<br />

3.07<br />

3.0<br />

3.05<br />

1 2 3 4 5 6 7 8 9 10 11 12<br />

TRIFR<br />

OGP TRIFR<br />

LTIFR<br />

OGP LTIFR<br />

High Potential Incidents (HIPO)<br />

2006 3<br />

2005<br />

2<br />

1 2<br />

3<br />

Hours worked (million)<br />

2006 6.1<br />

2005<br />

3.7<br />

2004<br />

2.0<br />

1 2<br />

3 4 5 6 7<br />

UK (HIPO)<br />

Incident<br />

In May, a small gas leak occurred when<br />

valve alignment checks were not<br />

completed prior to opening a well on <strong>the</strong><br />

Ensco 101 rig in <strong>the</strong> Sou<strong>the</strong>rn North Sea<br />

(SNS). The gas detection system activated<br />

a high alarm status immediately, isolating<br />

<strong>the</strong> leak in less than a minute.<br />

Action<br />

The following updated procedures were<br />

put in place:<br />

• Well schematic sheets stating valve<br />

positions have to be completed at <strong>the</strong><br />

start of each shift, and written handover<br />

procedures were put into effect<br />

immediately.<br />

• Valve status sheets were developed and<br />

visual ‘tag’ reminders were placed on<br />

<strong>the</strong> on control panels to indicate whe<strong>the</strong>r<br />

a valve is open or closed.<br />

Excellent safety<br />

performance on complex<br />

operated projects<br />

Pakistan (LTI and HIPO)<br />

Incident<br />

In July, a contractor was splashed with<br />

corrosion inhibitor liquid in <strong>the</strong> face and<br />

head area when re-installing a pump at<br />

<strong>the</strong> Suri-1 well in Pakistan. Because he<br />

was wearing safety glasses, ra<strong>the</strong>r than<br />

a face shield, <strong>the</strong> liquid ran down his<br />

forehead into his eyes. He was taken<br />

immediately to <strong>the</strong> eye wash station,<br />

and <strong>the</strong>n to <strong>the</strong> field doctor in <strong>the</strong> on-site<br />

clinic. Fortunately <strong>the</strong> individual involved<br />

suffered no permanent damage.<br />

Côte d’Ivoire (LTI and HIPO)<br />

Incident<br />

In October, during offshore seismic<br />

acquisition, a contractor was injured when<br />

he was moving a buoy on a seismic<br />

vessel. His hand became trapped between<br />

<strong>the</strong> buoy, which weighs approximately 90<br />

kg, and <strong>the</strong> side of <strong>the</strong> vessel. Fortunately<br />

no bones were broken and no lasting<br />

damage done to <strong>the</strong> contractor’s hand.<br />

Action<br />

As a result of this incident, hazard<br />

identification was reviewed and fur<strong>the</strong>r<br />

risk assessment of Suri field operations<br />

was performed with a specific focus on<br />

chemical handling. Formal management<br />

of change procedures were developed by<br />

<strong>the</strong> EHS manager including job safety<br />

analysis, job risk assessment and<br />

documenting equipment and process<br />

changes. These new procedures have<br />

been implemented by <strong>the</strong> production<br />

team at <strong>the</strong> site.<br />

Action<br />

A set of procedures were drawn up to<br />

eliminate <strong>the</strong> need for manual handling<br />

of buoys, and winches are now used<br />

instead, effectively preventing this type<br />

of incident recurring.<br />

Operations in two countries had<br />

particularly strong safety results.<br />

The Ensco 101 rig, on location at <strong>the</strong><br />

Ketch platform in block 44/28 in <strong>the</strong><br />

UK SNS, achieved a whole year on<br />

contract to <strong>Tullow</strong> with no LTIs. In fact,<br />

during <strong>the</strong> 365,244 hours worked by<br />

<strong>the</strong> rig during <strong>the</strong> year <strong>the</strong>re were<br />

no LTIs, no RWDCs or MTCs and just<br />

four First Aid Cases (FAC). This is<br />

a particularly impressive result in<br />

logistically complex operations, as<br />

<strong>the</strong> rig had been moving between <strong>the</strong><br />

Schooner and Ketch fields supporting<br />

combined drilling, well intervention<br />

and production operations throughout<br />

<strong>the</strong> period.<br />

Our Bangladeshi operations also<br />

achieved a notable performance.<br />

During <strong>the</strong> last two months of a<br />

seismic acquisition campaign, that<br />

began in 2005, we employed 2,349<br />

personnel and worked in excess of<br />

1.6 million hours without an LTI.<br />

Also, <strong>the</strong> Bangora production facility<br />

achieved 240 days without an LTI<br />

and <strong>the</strong> current drilling campaign<br />

in Bangladesh achieved 289 days<br />

without an LTI.<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 19


Health and safety<br />

continued<br />

Ongoing training<br />

In 2006, along with EHS training at a Group<br />

level, at a local level we conduct health and<br />

safety training, emergency training drills and<br />

simulation exercises to ensure that<br />

employees and contractors are fully aware<br />

and prepared on an ongoing basis. As an<br />

example, over 100 different training sessions<br />

were held in Bangladesh and Pakistan during<br />

<strong>the</strong> year. Courses covered <strong>the</strong> many different<br />

risks and hazards that an employee or<br />

contractor may encounter when working at<br />

a well site. These courses are designed to<br />

both raise awareness of unsafe practices<br />

and to educate individuals in <strong>the</strong> correct<br />

procedures to follow, and include:<br />

• Health and safety induction (office and site);<br />

• Manual handling, hand tools safety and<br />

hand safe awareness;<br />

• Hearing protection;<br />

• Working in confined spaces;<br />

• Use of full body harness;<br />

• Use of portable extinguishers and<br />

fire fighting;<br />

• Permit to Work (PTW) training and Display<br />

Screen Equipment (DSE) assessment;<br />

• Working at height and slips, trips and falls;<br />

• Electrical hazards and crane and<br />

forklift operation;<br />

• First aid and first responder (to an<br />

incident) training;<br />

• Defensive driving;<br />

• Lock out and tag out; and<br />

• On <strong>the</strong> job risk assessment.<br />

Driving Policy<br />

Land transport has <strong>the</strong> potential to<br />

be a high risk activity in <strong>the</strong> oil and gas<br />

industry. During 2006, 17% of <strong>the</strong> 111<br />

fatalities, across <strong>the</strong> 39 organisations who<br />

submitted data to OGP arose from driving<br />

or vehicular incidents. Having identified<br />

this key root cause of fatalities, OGP<br />

introduced a Land Transport<br />

Recommended Practice to assist <strong>the</strong><br />

industry manage this risk. In order to<br />

ensure consistency across <strong>Tullow</strong> in<br />

managing this risk, a corporate level<br />

Driving Policy was drawn up in 2006.<br />

This policy gives minimum training<br />

standards that all of our drivers must<br />

attain, including defensive driving<br />

techniques, a list of <strong>the</strong> correct safety<br />

equipment all vehicles must contain,<br />

and sets out strict journey management<br />

procedures. This policy is a practical<br />

example of one of <strong>the</strong> many ways in<br />

which <strong>Tullow</strong> sets minimum good practice<br />

safety standards across <strong>the</strong> Group, which<br />

we believe are a necessary part of our<br />

duty of care in achieving high standards<br />

in health and safety. In 2006, <strong>Tullow</strong><br />

employees and contractors travelled<br />

almost 2 million km on organisational<br />

business. 15 separate vehicle incidents<br />

occurred and none resulted in major<br />

injury or loss of life.<br />

20 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


The Environment<br />

Our focus is on protecting <strong>the</strong> environment and<br />

we concentrate on:<br />

• Managing emissions to air;<br />

• Avoiding accidental spills;<br />

• Eliminating discharges to marine environments;<br />

• Limiting chemical use and discharge;<br />

• Ensuring efficient use of energy in production<br />

and processing;<br />

• Demonstrating operating permit and<br />

licence compliance;<br />

• Monitoring and supporting <strong>the</strong> performance<br />

of our operating partners; and<br />

• Biodiversity management.<br />

2006 CO 2<br />

emissions (tonnes)<br />

2006 215,407<br />

2005<br />

2004<br />

2006<br />

100,000<br />

CO 2<br />

emissions<br />

200,000<br />

EUETS allowance<br />

300,000<br />

400,000<br />

426,666<br />

258,750<br />

426,666<br />

500,000<br />

Strong performance<br />

<strong>Tullow</strong> reports on <strong>the</strong> environmental<br />

performance of its operated producing<br />

assets, <strong>the</strong> majority of which are in <strong>the</strong> UK.<br />

These are principally <strong>the</strong> onshore Bacton<br />

Gas Terminal on <strong>the</strong> Norfolk coast and <strong>the</strong><br />

offshore Hewett gas complex in <strong>the</strong> SNS.<br />

Bacton receives and processes natural gas<br />

from <strong>the</strong> Hewett and Thames fields and <strong>the</strong><br />

Lancelot Area Production System (LAPS).<br />

The processed gas is exported into <strong>the</strong><br />

National Transmission System, Transco.<br />

The key environmental statistics measured<br />

and reported for <strong>the</strong>se operations are in <strong>the</strong><br />

areas of atmospherics, discharges, water<br />

usage and spills and <strong>the</strong> Group delivered<br />

ano<strong>the</strong>r strong environmental performance<br />

again in 2006.<br />

Atmospherics<br />

Carbon Dioxide (CO 2<br />

) is a by-product of<br />

fuel combustion utilised in <strong>the</strong> gas refining<br />

process. Since 2005, <strong>the</strong> Bacton Terminal<br />

and Hewett Complex have been assigned<br />

permitted allowances under <strong>the</strong> European<br />

Union Emissions Trading Scheme (EUETS).<br />

This scheme links <strong>the</strong> emission of gases to<br />

specific industry allocations which cap <strong>the</strong><br />

amount of CO 2<br />

that can be discharged to<br />

<strong>the</strong> atmosphere. The current phase of <strong>the</strong><br />

scheme is from 2005 to 2007 and is only<br />

concerned with <strong>the</strong> discharge of CO 2<br />

.<br />

The Bacton Terminal and Hewett Complex<br />

combined allowance is 1.28 million tonnes<br />

over <strong>the</strong> period, representing an annual<br />

allowance of 426,666 tonnes of CO 2<br />

discharge. Emissions from both facilities<br />

in 2006 and 2005 were well below <strong>the</strong><br />

assigned allowances. 2006 emissions were<br />

215,407 tonnes, representing a reduction<br />

of 17% compared with 2005.<br />

2005 emissions were 258,750 tonnes, which<br />

was 39% lower than <strong>the</strong> combined<br />

allowances for <strong>the</strong> year.<br />

Commingling Hewett and LAPS gas flows<br />

Environmental management of our<br />

UK-operated assets presents unique<br />

challenges because of <strong>the</strong> age of <strong>the</strong><br />

infrastructure and <strong>the</strong> maturity of <strong>the</strong><br />

fields. The Bacton Gas Terminal was<br />

built and commissioned almost 40 years<br />

ago in 1969, and has been operated by<br />

<strong>Tullow</strong> since 2003.<br />

To improve and optimise environmental<br />

and operational efficiency, maximise<br />

production and extend <strong>the</strong> life of fields,<br />

a £1 million investment was undertaken<br />

during 2006 to commingle <strong>the</strong> Hewett<br />

and LAPS gas flows. This project was<br />

important because <strong>the</strong> onshore Hewett<br />

compression trains were operating at low<br />

efficiency and <strong>the</strong>re was spare capacity<br />

within <strong>the</strong> LAPS compressor. Within <strong>the</strong><br />

Bacton Terminal, gas was rerouted<br />

through <strong>the</strong> single, more efficient<br />

and environmentally-friendly LAPS<br />

compressor, allowing four smaller, older<br />

compressors to be taken out of service.<br />

While this project delivered specific<br />

economic and operational benefits, it<br />

also achieved a significantly improved<br />

environmental performance. This clearly<br />

achieves our objective of minimising <strong>the</strong><br />

environmental impact of our operations<br />

using technological advances and best<br />

practice in extraction and processing<br />

techniques. Full implementation was<br />

achieved during 2006 and <strong>the</strong> specific<br />

environmental benefits are:<br />

• 55% reduction in CO 2<br />

emissions;<br />

• Reduction in o<strong>the</strong>r GHG emissions,<br />

namely Methane;<br />

• Reduction in noise from <strong>the</strong> plant;<br />

• 56% reduction in fuel gas requirements<br />

for compression;<br />

• A decrease in <strong>the</strong> energy required<br />

to operate <strong>the</strong> terminal;<br />

• A reduction in <strong>the</strong> risk of a major<br />

environmental incident with <strong>the</strong><br />

reduction in <strong>the</strong> number of rotating<br />

pieces of equipment on site; and<br />

• A reduction in chemical and oil<br />

inventory held on-site, reducing<br />

potential spills.<br />

This project has recently received a<br />

‘Big Tick’ award in <strong>the</strong> International<br />

Climate Change Category of <strong>the</strong> Business<br />

in <strong>the</strong> Community Awards for Excellence.<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 21


The Environment<br />

continued<br />

Carbon Disclosure Project<br />

<strong>Tullow</strong> recognises that climate change<br />

is a significant global and industry<br />

issue. Our strategy is to reduce emissions,<br />

minimise pollution and our impact on<br />

<strong>the</strong> environment.<br />

The Carbon Disclosure Project (CDP)<br />

is an organisation for institutional<br />

investor collaboration on <strong>the</strong> business<br />

implications of climate change. CDP is a<br />

process whereby institutional investors<br />

collectively sign a single global request<br />

for disclosure of information on GHG<br />

emissions. More than 1,000 companies<br />

report on <strong>the</strong>ir emissions through this<br />

project and <strong>Tullow</strong> participated in 2006<br />

and will continue to do so. We are aligned<br />

with <strong>the</strong> UK Government in meeting its<br />

Kyoto objectives on GHG emissions,<br />

and our EHS policy and IMS reinforces<br />

<strong>Tullow</strong>’s environmental commitment<br />

under ISO 14001, <strong>the</strong> internationally<br />

recognised standard for environmental<br />

management.<br />

Mauritania<br />

22 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


Produced water – Quantity (m 3 )<br />

2006 8,774.7<br />

2006<br />

2005<br />

2005<br />

2004<br />

2004<br />

950.7<br />

6,634.9<br />

1,237.0<br />

1,582.3<br />

1,288.5<br />

2,000 4,000 6,000 8,000<br />

10,000<br />

52/5A 48/29A<br />

Produced water – Quality (1)<br />

2006 14.25<br />

2006<br />

2006<br />

2005<br />

2005<br />

2005<br />

2004<br />

2004<br />

2004<br />

5 10 15 20 25 30 35 40<br />

31.0<br />

30.0<br />

24.7<br />

26.89<br />

40.0<br />

11.8<br />

27.83<br />

40.0<br />

Total oil produced water (tonnes) (2)<br />

2006 0.13215<br />

2006<br />

2006<br />

2006<br />

2005<br />

2005<br />

2004<br />

2004<br />

1.02<br />

0.03025<br />

0.09<br />

0.16531<br />

0.03409<br />

0.015<br />

0.0209<br />

0.300 0.500 0.700 0.900 1.100<br />

52/5A 48/29A DTI standard 52/5A DTI standard 48/29A<br />

(2)<br />

DTI regulation came into effect in 2006.<br />

52/5A 48/29A DTI permitted allowances (individually for both installations)<br />

(1)<br />

in 2005, <strong>the</strong> quality standard changed from 40 mg/kg to 30 mg/l.<br />

<strong>Tullow</strong> recognises that climate change is<br />

a significant global issue and is casually<br />

linked to hydrocarbon consumption. While <strong>the</strong><br />

industry has a responsibility to take collective<br />

action, we are also actively engaged in<br />

finding ways to reduce our impact on <strong>the</strong><br />

environment. <strong>Tullow</strong>’s IMS incorporates and<br />

underpins our environmental commitment,<br />

under ISO 14001 certification criteria, to<br />

minimise pollution. IS0 14001 certification<br />

requires <strong>Tullow</strong> to commit to avoiding<br />

spills as well as demonstrate continuous<br />

improvement in environmental performance.<br />

A standardised ESIA tool, used by country<br />

and business unit managers throughout<br />

<strong>the</strong> Group, includes, as a matter of course,<br />

emissions control in <strong>the</strong> design phase of all<br />

major projects and developments. Above all,<br />

<strong>Tullow</strong> aims to explore and produce oil<br />

and gas efficiently and minimise <strong>the</strong><br />

environmental impact of its operations<br />

using best practices.<br />

A current project that highlights <strong>Tullow</strong>’s<br />

processes in relation to climate change is<br />

<strong>the</strong> large Kudu gas field offshore Namibia,<br />

which will be used to run an onshore power<br />

station. The design of <strong>the</strong>se facilities will<br />

meet climate change environmental<br />

challenges while producing electricity<br />

efficiently. Innovative thinking can also<br />

be applied to existing facilities and a good<br />

example of this is <strong>the</strong> use of wind turbines<br />

to generate power on <strong>the</strong> Horne & Wren<br />

satellite installation in <strong>the</strong> SNS, <strong>the</strong> first<br />

stand-alone wind generation project of its<br />

kind in <strong>the</strong> UK. These wind turbines provide<br />

enough ‘clean’ energy to power key systems.<br />

They also remove <strong>the</strong> requirement for diesel<br />

storage for generators, <strong>the</strong> associated<br />

emissions that result from <strong>the</strong>ir utilisation<br />

and as a consequence <strong>the</strong>re has also been<br />

a significant reduction in <strong>the</strong> number of<br />

planned maintenance visits.<br />

Discharges<br />

Under <strong>the</strong> Offshore Petroleum Activities (<strong>Oil</strong><br />

Pollution Prevention and Control) Regulations<br />

2005, <strong>Tullow</strong>’s two discharging installations<br />

in <strong>the</strong> SNS (Hewett 52/5A and Hewett 48/29A)<br />

are regulated in relation to <strong>the</strong> quantity and<br />

quality of produced water, and <strong>the</strong> total oil<br />

discharged in produced water. In 2006, total<br />

oil discharged regulations came into effect,<br />

and <strong>the</strong>se are considered <strong>the</strong> new benchmark<br />

for produced water discharges. Standards<br />

are set by <strong>the</strong> DTI.<br />

Regulations covering quantity and quality of<br />

produced water were complied with for 2004<br />

and 2005, by both installations. In 2006, all<br />

installations complied with <strong>the</strong> total oil in<br />

produced water standard set out in <strong>the</strong><br />

relevant permits. In relation to <strong>the</strong> 30mg/l<br />

quality standard Hewett 48/29A had an<br />

isolated incident in December, which<br />

meant that this installation exceeded <strong>the</strong><br />

DTI standard. However, this was not of<br />

immediate concern against a high level<br />

of compliance and <strong>the</strong> background to this<br />

incident is being investigated.<br />

Under <strong>the</strong> new total oil discharged<br />

regulations, <strong>the</strong> two installations are holders<br />

of permits which allow a discharge of total oil<br />

in produced water of 0.09 tonnes for Hewett<br />

48/29A and 1.02 tonnes for <strong>the</strong> Hewett 52/5A.<br />

While this number was not applicable for <strong>the</strong><br />

years prior to 2006, <strong>Tullow</strong> can demonstrate<br />

that since 2004 <strong>the</strong>se facilities discharged<br />

less than <strong>the</strong> regulated amount, and to put<br />

<strong>the</strong>se permitted allowances in context some<br />

North Sea platforms have allowances to<br />

discharge some 200 tonnes of total oil in<br />

produced water.<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 23


The Environment<br />

continued<br />

Water usage<br />

As part of daily operations, <strong>the</strong> Bacton<br />

Terminal extracts water from <strong>the</strong> underlying<br />

aquifer, via two wells, for use in <strong>the</strong> gas<br />

refining process and as a supply for fire-water.<br />

Water usage is highly regulated by <strong>the</strong><br />

Environmental Agency (EA) to control total<br />

consumption. Consented limits allow Bacton<br />

to extract, on an annual basis, 47,700 m 3 of<br />

water. In each year, water usage has been<br />

within <strong>the</strong> consented limits and a significant<br />

year-on-year reduction has been achieved<br />

since 2004. In 2006, water usage was 61%<br />

below <strong>the</strong> consented limit and was 36%<br />

below water usage in <strong>the</strong> previous year.<br />

Spills<br />

In 2006, <strong>Tullow</strong> had two reportable spills.<br />

On 19 February, a total of 0.00937 tonnes<br />

of diesel spilled during an uploading activity<br />

on <strong>the</strong> Hewett 48/29C facility. On 24 April,<br />

<strong>the</strong>re was a reportable chemical spill relating<br />

to a sub-sea leak on <strong>the</strong> Hewett 48/29A that<br />

required intervention from a dive support<br />

vessel. The total spill was 6.3 tonnes.<br />

The actual chemical involved has a low<br />

environmental impact and is actually<br />

authorised under <strong>the</strong> chemical regulations<br />

to be utilised and discharged in <strong>the</strong> same<br />

manner in which it was spilt. However,<br />

because this was not a controlled discharge<br />

it was reported in line with permit conditions.<br />

In 2004 and 2005, <strong>the</strong> Group had no<br />

significant spills.<br />

ISO 14001 environmental certification<br />

In May 2006, <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> achieved<br />

ISO 14001 certification for <strong>the</strong> Group’s<br />

corporate environmental management<br />

system, <strong>the</strong> IMS. This was an amendment<br />

to <strong>the</strong> scope of certification which, since<br />

May 2003, covered our UK operations and<br />

<strong>the</strong> Bacton Gas Terminal. The corporate<br />

system has been tested in <strong>the</strong> UK and<br />

Pakistan business units and <strong>the</strong>y have been<br />

appended to <strong>the</strong> certificate. During 2007,<br />

we expect Bangladesh and Dublin to be<br />

independently audited and added to <strong>the</strong><br />

certificate. We expect <strong>the</strong> number of verified<br />

group operations to increase steadily in <strong>the</strong><br />

years ahead as part of <strong>the</strong> surveillance audits.<br />

Improving how we record<br />

During <strong>the</strong> year, we refined and enhanced<br />

Accident and Incident Investigation<br />

procedures to improve categorisation and<br />

investigation of an incident at <strong>the</strong> time and<br />

to ensure reporting to <strong>the</strong> appropriate level.<br />

These new procedures are in place since<br />

1 January, 2007. All health and safety<br />

incidents, above medium potential, receive<br />

immediate senior management attention<br />

and are reported to <strong>the</strong> executive Directors<br />

on a monthly basis and <strong>the</strong> <strong>Tullow</strong> Board<br />

bi-annually. If a significant incident occurred<br />

this would be reported to senior management<br />

immediately. We analyse incidents to ensure<br />

that we identify <strong>the</strong> root cause, understand<br />

what <strong>the</strong> causal factors were and implement<br />

<strong>the</strong> learnings from an incident to improve<br />

our performance going forward.<br />

Biodiversity management<br />

Biodiversity is a collective term that is<br />

used to describe <strong>the</strong> complexity of all life,<br />

including <strong>the</strong> great variety of organisms and<br />

<strong>the</strong>ir behaviours and interactions. In effect,<br />

it is <strong>the</strong> wide range of animals, plants,<br />

organisms, climatic conditions and unique<br />

characteristics which exist in an area or<br />

ecosystem. Any new entrant into that<br />

ecosystem, if not very carefully planned<br />

and managed, can have a long-term effect.<br />

The management of biodiversity is an<br />

important consideration for any organisation<br />

in <strong>the</strong> development of a sustainable<br />

long-term business, particularly for<br />

companies in <strong>the</strong> oil and gas industry.<br />

For <strong>Tullow</strong>, our goal is to preserve<br />

biodiversity, and this objective is embedded<br />

in our EHS policies and how we conduct<br />

our activities. In practical terms, we carried<br />

out specific assessments of biodiversity in<br />

Pakistan, Bangladesh and Uganda in <strong>the</strong><br />

fourth quarter of 2006, to confirm that <strong>the</strong>re<br />

were no protected areas or environmentallysensitive<br />

sites in <strong>the</strong> areas where we are<br />

operating. We established that although<br />

<strong>the</strong>re are a few protected areas or areas<br />

with specific environmental sensitivity in<br />

<strong>the</strong> vicinity of our assets, <strong>the</strong>re are none<br />

encroaching on our operations. There are two<br />

nature reserves involved in our exploration<br />

blocks in Uganda and we are managing our<br />

activities <strong>the</strong>re very carefully to ensure that<br />

we prevent any long-term impact, and<br />

minimise our short-term effect.<br />

We also prepared a Biodiversity Action<br />

Plan (BAP) at <strong>the</strong> end of 2006, to identify <strong>the</strong><br />

sensitivities across all our activities, describe<br />

our existing mitigation plans and policies<br />

and highlight any fur<strong>the</strong>r actions required.<br />

As part of <strong>the</strong> Group’s operational planning<br />

we use <strong>the</strong> BAP to shape our exploration<br />

processes and country activities, and at a<br />

project level this information is combined<br />

with our ESIA tool to ensure biodiversity is<br />

considered at <strong>the</strong> planning stages of projects<br />

and developments.<br />

24 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


Water usage (m 3 )<br />

2006 18,678<br />

2006<br />

2005<br />

2005<br />

2004<br />

2004<br />

47,400<br />

29,200<br />

47,700<br />

36,929<br />

47,700<br />

10,000 20,000 30,000 40,000 50,000<br />

<strong>Oil</strong> and chemical spills<br />

2006 2<br />

2006<br />

2005<br />

2005<br />

2004<br />

2004<br />

6,31<br />

2<br />

0.07<br />

1<br />

0.4<br />

1 2<br />

3 4 5 6 7<br />

Water usage (m 3 )<br />

EA consented limit<br />

Number of oil and chemical spills<br />

<strong>Oil</strong> and chemical spills (tonnes)<br />

Tanzania<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 25


2006 Key plans and objectives<br />

With a growing business and international spread of operations across<br />

22 countries, <strong>the</strong>re are always areas where fur<strong>the</strong>r improvement is required.<br />

We addressed <strong>the</strong>se in our annual EHS and CSR plans and objectives. How we<br />

performed against our 2006 targets is outlined below. We are committed to<br />

continuous improvement in all our standards and practices and our 2007 key<br />

plans and objectives are set out on page 40.<br />

Ensure that <strong>the</strong>re are no significant<br />

environmental incidents during <strong>the</strong> year.<br />

Maintain LTIFR for <strong>the</strong> end of 2006<br />

below 1.00 (2005 was 0.82).<br />

Complete ISO 14001 certification<br />

for <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong>.<br />

Identify and sponsor a larger number<br />

of community-based environmental and<br />

social projects.<br />

ACHIEVED<br />

ACHIEVED<br />

2006 LTIFR was 0.81.<br />

ACHIEVED<br />

May 2006.<br />

ACHIEVED<br />

The CSR Committee terms of reference are finalised and <strong>the</strong> 2007<br />

budget agreed.<br />

Prepare and implement a required minimum<br />

standard for ESIA throughout <strong>the</strong> Group,<br />

aligned with World Bank Standards and<br />

best practices.<br />

Refining and enhancing Accident and<br />

Incident Investigation procedures.<br />

Engage in proactive dialogue and meetings<br />

with key target groups regarding our<br />

first CSR <strong>Report</strong> and incorporate <strong>the</strong><br />

feedback received.<br />

Review and plan a path to external<br />

verification of <strong>the</strong> CSR <strong>Report</strong>, including<br />

assessment against <strong>the</strong> Global <strong>Report</strong>ing<br />

Initiative (GRI) principles.<br />

Updating and streng<strong>the</strong>ning EHS input<br />

in tendering processes to support ethical<br />

values in all of <strong>the</strong> Group’s business dealings.<br />

Extend EHS/CSR training opportunities and<br />

options for senior personnel.<br />

Fully prepared crisis management plan,<br />

team and facilities in <strong>the</strong> event of a major<br />

incident at any <strong>Tullow</strong> facility.<br />

ACHIEVED<br />

ESIA template being implemented across <strong>the</strong> Group, following inputs<br />

from country and business unit managers and in-country testing in<br />

Madagascar and Ghana in 2006.<br />

ACHIEVED<br />

Revised procedure now in place from 1 January, 2007<br />

ONGOING<br />

Look out for this symbol to see where direct changes have been made<br />

in this years report as a result of feedback.<br />

ONGOING<br />

External verification is challenging given <strong>the</strong> size of <strong>Tullow</strong> operations and developing<br />

verification standards. We made progress during <strong>the</strong> year in how to achieve external<br />

verification and what internal steps are required. The revised GRI3 guidelines will be<br />

introduced later this year and we will review <strong>the</strong>se also as part of <strong>the</strong> process.<br />

ONGOING<br />

A review of EHS in <strong>the</strong> contract procurement is expected to be completed and<br />

implemented in 2007.<br />

CONTINUOUS<br />

CONTINUOUS<br />

26 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


Art competition<br />

The Children’s art competition, for <strong>Tullow</strong> employee and contractor<br />

families, was run again this year with <strong>the</strong> <strong>the</strong>me of ‘Working<br />

with Communities’. 93 children participated, representing seven<br />

countries. All <strong>the</strong> children received a prize recognising <strong>the</strong>ir<br />

participation, while <strong>the</strong> 12 winning entrants received a US$200<br />

donation to <strong>the</strong> charity or cause of <strong>the</strong>ir choice and had <strong>the</strong>ir<br />

artwork reproduced in <strong>the</strong> 2007 <strong>Tullow</strong> calendar. Donations were<br />

made to 11 charities and organisations including <strong>the</strong> Shaukat<br />

Khanum Memorial Trust in Pakistan, <strong>the</strong> Diana Brimblecombe<br />

Animal Rescue Centre in England, and <strong>the</strong> Nural Huda Nursery<br />

School in South Africa.<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 27


Crisis management<br />

11 January, 2007<br />

<strong>Tullow</strong> operates a 24/7 on-call crisis management system and conducts<br />

an annual programme of training and simulation exercises for <strong>the</strong> Crisis<br />

Management Team (CMT). During 2006, this team participated in 11 ‘live’<br />

training events. Each exercise provides <strong>the</strong> opportunity to test our<br />

systems and for <strong>the</strong> teams to practice <strong>the</strong>ir skills in a controlled<br />

environment. Feedback is ga<strong>the</strong>red to continually improve performance.<br />

Training was also held for <strong>the</strong> CMT telephone media response people,<br />

including an exercise with real journalists. The priority for <strong>Tullow</strong> is to<br />

ensure <strong>the</strong> preparedness of our teams and systems in <strong>the</strong> event that we<br />

need to mobilise <strong>the</strong> CMT in response to an incident. These exercises<br />

are designed to test <strong>the</strong> ability of <strong>the</strong> crisis management team, <strong>the</strong><br />

preparedness and robustness of <strong>the</strong> crisis management plan and <strong>the</strong><br />

effectiveness of <strong>the</strong> high-tech crisis management facilities at <strong>the</strong> Group’s<br />

London office. Our goal is to be proactive, prompt and effective in our<br />

response to any serious incident involving any <strong>Tullow</strong> operations.<br />

On Thursday, 11 January, 2007, <strong>Tullow</strong>’s<br />

CMT was mobilised to deal with a situation<br />

with potentially major implications for <strong>the</strong><br />

Group’s business.<br />

Late in <strong>the</strong> afternoon that day, <strong>the</strong> control<br />

room on <strong>the</strong> ConocoPhillips-operated<br />

Murdoch platform in <strong>the</strong> SNS received<br />

a report that a 4,500 tonne commercial<br />

vessel had suffered engine failure and was<br />

drifting without power in a westerly force<br />

10 gale, resulting in strong seas and severe<br />

wea<strong>the</strong>r conditions.<br />

A quick assessment of <strong>the</strong> situation<br />

concluded that <strong>the</strong>re was potential for<br />

a collision between <strong>the</strong> vessel and <strong>the</strong><br />

unmanned Boulton platform where <strong>Tullow</strong><br />

has an equity interest, and accordingly,<br />

production was shut down <strong>the</strong>re promptly<br />

at 16:00.<br />

The vessel initially deployed its anchor to<br />

arrest its rate of drift, but this was judged<br />

to present a significant risk to several major<br />

sub-sea gas pipelines and was abandoned.<br />

As a consequence, <strong>the</strong> vessel continued to<br />

drift and it became apparent that <strong>the</strong>re was<br />

a potential collision risk with <strong>the</strong> manned<br />

Murdoch platform complex, which is <strong>the</strong><br />

gas transportation hub through which all<br />

<strong>the</strong> Caister Murdoch System (CMS) gas<br />

passes, including <strong>the</strong> Schooner and Ketch<br />

production from <strong>Tullow</strong>.<br />

In response to <strong>the</strong> increasing risk to <strong>the</strong><br />

Murdoch platform, at 18:15, 20 people were<br />

evacuated by <strong>the</strong> RAF to nearby facilities<br />

including <strong>the</strong> <strong>Tullow</strong>-operated Ensco 101.<br />

A skeleton crew of 10 remained to complete<br />

<strong>the</strong> full shut down of <strong>the</strong> complex. These<br />

people were evacuated at 21:30. By 22:00<br />

it was apparent that <strong>the</strong> vessel had missed<br />

<strong>the</strong> Murdoch platform. The situation was<br />

monitored very closely and around midnight<br />

<strong>the</strong> vessel passed a few hundred metres<br />

north of <strong>the</strong> Caister platform and out of<br />

immediate danger to facilities in <strong>the</strong> area.<br />

<strong>Tullow</strong> supported <strong>the</strong> ConocoPhillips<br />

emergency response from its nearby<br />

facilities and mobilised <strong>the</strong> Crisis<br />

Management facility in London as a<br />

precaution, should <strong>the</strong> situation deteriorate.<br />

On <strong>the</strong> morning on 12 January, crews were<br />

remobilised onto <strong>the</strong> Murdoch complex and<br />

<strong>the</strong> process of restarting systems began.<br />

On 12 January, <strong>the</strong> Murdoch field and CMSIII<br />

Nor<strong>the</strong>rn fields were restored to production.<br />

Satellite crews were mobilised and<br />

production from <strong>the</strong> Boulton, Caister and<br />

Munroe fields was restored on 13 January.<br />

28 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


ConocoPhillips-operated Murdoch platform. Picture courtesy of ConocoPhillips.<br />

CMT ‘live’ simulation excercises<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 29


Social performance<br />

Throughout its existence, <strong>Tullow</strong> has strived to maintain<br />

a distinctive entrepreneurial culture and to recruit and<br />

retain high-quality people. Over <strong>the</strong> last 21 years <strong>the</strong> Group<br />

has had a commitment to developing quality long-term<br />

relationships with partners, communities, governments<br />

and individual employees.<br />

This commitment, combined with our<br />

programmes for developing and fostering<br />

internal talent, means <strong>Tullow</strong> is in excellent<br />

shape to capitalise and manage <strong>the</strong> exciting<br />

opportunities that are available to us.<br />

Our culture and values are based on respect<br />

for all, as well as individual and collective<br />

responsibility and authority. We treat everyone<br />

fairly and without discrimination, and we offer<br />

equal opportunities. Every employee has a<br />

stake in <strong>the</strong> Group’s success through our<br />

reward and recognition policies, which are<br />

market-based and competitive. We ensure<br />

a safe and healthy working environment,<br />

supported by clear policies, procedures<br />

and appropriate training. We encourage<br />

and support healthy living and achieving<br />

a work-life balance, offering flexible work<br />

practices across our three main offices<br />

in London, Dublin and Cape Town.<br />

Integrity in all our dealings<br />

<strong>Tullow</strong> has operations in 22 countries and<br />

over 250 employees, and <strong>the</strong> territories in<br />

which we operate vary widely. However <strong>the</strong><br />

principles that guide us of ethical behaviour,<br />

integrity and honesty are constant. <strong>Tullow</strong><br />

maintains <strong>the</strong> highest ethical standards in<br />

carrying out its business activities and acts<br />

within local regulations and laws at all times.<br />

Employees and contractors are expected to<br />

maintain <strong>the</strong> highest ethical standards and<br />

conduct in carrying out <strong>the</strong>ir duties and<br />

responsibilities on behalf of <strong>Tullow</strong>.<br />

Our people<br />

At <strong>Tullow</strong>, <strong>the</strong> Group Human Resources<br />

(HR) Manager, Georgina Baines, is based<br />

in <strong>the</strong> London head office and <strong>the</strong>re are six<br />

HR advisors spread across <strong>Tullow</strong>’s main<br />

offices. The HR team aims to support <strong>the</strong><br />

development of <strong>the</strong> business in a pragmatic<br />

and progressive manner, keeping pace<br />

with <strong>the</strong> changing needs of <strong>Tullow</strong> as an<br />

organisation. HR policies are constantly<br />

reviewed to ensure that <strong>the</strong>y are appropriate<br />

and underpin <strong>Tullow</strong>’s core values.<br />

Reward and recognition policies, which form<br />

part of Employee Terms and Conditions, are<br />

regularly reviewed to ensure that we continue<br />

to attract and retain talented people and<br />

maintain our competitive advantage. We have<br />

progressive HR policies and practices, and<br />

will continue to improve in all people-related<br />

areas. We aim to be a great place to work and<br />

<strong>the</strong> employer of choice within <strong>the</strong> industry.<br />

Keeping people healthy<br />

Health, along with safety, is a top priority<br />

for <strong>Tullow</strong> and as part of our duty of care<br />

we have a number of initiatives to support<br />

a healthy lifestyle and work-life balance for<br />

our employees. Two of <strong>the</strong> key initiatives are<br />

flexible working and a global occupational<br />

healthcare programme. O<strong>the</strong>r activities<br />

include private health insurance where<br />

available or paid medical expenses for staff<br />

and <strong>the</strong>ir families, gym membership and<br />

fresh fruit for breakfast and snacks.<br />

Business ethics, anti-bribery, harassment,<br />

speaking up and equal opportunities are<br />

embedded in our employee policies, and form<br />

part of how we behave and do things. This is<br />

reflected in our long track record in areas<br />

where we work and contribute, and enables<br />

<strong>the</strong> Group to achieve long-term, sustainable<br />

and profitable growth.<br />

30 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


India<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 31


Social performance<br />

continued<br />

GOCare<br />

<strong>Tullow</strong> operates a medical referral<br />

and health-monitoring programme for<br />

employees, managed by International SOS,<br />

<strong>the</strong> world’s largest medical assistance<br />

company. It covers a broad geographic<br />

spread to facilitate easy access for<br />

employees working across <strong>the</strong> Group.<br />

The programme helps to mitigate any<br />

health risks that might be associated<br />

with job tasks, location of work, and/or<br />

travel requirements for work, by ensuring<br />

that a suitable and sufficient level of<br />

health surveillance is undertaken.<br />

Different criteria are applied depending<br />

on job circumstances, such as offshore<br />

workers, frequent flyers and remote<br />

location employees, and also includes a<br />

voluntary Wellness Assessment option<br />

every two years so that employees can be<br />

assured that <strong>the</strong>ir general health is good<br />

or that potential problems are spotted<br />

early on.<br />

At a Group level, this system will allow us<br />

to track high-level trends on how healthy<br />

<strong>Tullow</strong> is as an organisation.<br />

Sam Cox, Talline Orington, Nicola Lee, Jerry Jarvis, Kevin Christopherson (<strong>Tullow</strong> London).<br />

32 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


Flexible working<br />

arrangements<br />

A flexi-time project was successfully<br />

piloted in <strong>Tullow</strong>’s London office in<br />

2006 and <strong>the</strong> Group’s main offices<br />

will all be offering flexi-time by <strong>the</strong> end<br />

of 2007. This gives people <strong>the</strong> ability to<br />

organise <strong>the</strong>ir work and home lives so<br />

that <strong>the</strong>y, for example, can spend more<br />

time with family or organise routine<br />

appointments without <strong>the</strong> stress of<br />

taking time off work. Flexibility is<br />

offered in a number of ways including<br />

start and end times for work and <strong>the</strong><br />

use of a nine day working fortnight<br />

system. Working from home is also<br />

possible and our IT systems facilitate<br />

this. Individuals manage <strong>the</strong>ir own<br />

time, in agreement with <strong>the</strong>ir line<br />

managers and an intranet ‘where<br />

am I’ tool assists overall coordination<br />

and communication.<br />

In 2006, Graham Martin,<br />

an Executive Director<br />

and <strong>Tullow</strong>’s General<br />

Counsel, was appointed<br />

with responsibility for<br />

Human Rights issues. As a result<br />

of feedback, we are working on<br />

enhancing our policy in this area<br />

and will roll this out across <strong>the</strong><br />

Group in 2007.<br />

Developing people<br />

The development of an employee’s abilities<br />

and potential is an integral part of personal<br />

and business achievement. We encourage<br />

people to undertake self-development in<br />

order that <strong>the</strong>y can improve <strong>the</strong>ir<br />

performance and enhance <strong>the</strong>ir career<br />

opportunities within <strong>the</strong> business. We assist<br />

employees in achieving <strong>the</strong>ir goals by means<br />

of appraisals, on <strong>the</strong> job experience and<br />

training as appropriate. We engage all our<br />

staff in <strong>Tullow</strong>’s global Performance<br />

Management System, which is based on a<br />

transparent set of complementary personal<br />

and corporate objectives. This provides a<br />

clear link to <strong>the</strong> key performance indicators<br />

that are used to assess <strong>the</strong> ongoing progress<br />

of <strong>the</strong> business and which support <strong>the</strong><br />

Group’s strategic objectives. Our reward and<br />

recognition policies include bonus and share<br />

incentive schemes and link performance and<br />

achievement, from both an individual and<br />

Group perspective.<br />

<strong>Tullow</strong> offers numerous career development<br />

choices which bring exciting and challenging<br />

new personal and professional experiences.<br />

In 2006, we put in place a consistent<br />

approach to remuneration and allowances<br />

to facilitate and encourage secondment to<br />

different projects. This helps us to develop<br />

our technical expertise and enhances<br />

relationships, skills and knowledge on a<br />

Group-wide basis. This builds competitive<br />

advantage for <strong>Tullow</strong> as well as helping us<br />

to attract and retain talented, motivated and<br />

adaptable people.<br />

During 2006, we purchased a training tool<br />

which allows us to understand <strong>the</strong> knowledge<br />

gained from past experience of <strong>the</strong> whole<br />

geoscience team. Over 50 people in <strong>Tullow</strong>’s<br />

geologist and geophysicists team have<br />

already submitted <strong>the</strong>ir information, which<br />

has enabled us to build a skills database.<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 33


Social performance<br />

continued<br />

From this information <strong>the</strong> Group clearly<br />

understands what regions and core plays<br />

we have strengths in and, through identifying<br />

any gaps in <strong>the</strong> geoscience skill set, we will<br />

also be used as a recruitment tool in <strong>the</strong><br />

geoscience area. Overall in 2006, over 50%<br />

of <strong>Tullow</strong> employees took part in training<br />

and our goal is to significantly increase<br />

this in 2007.<br />

During 2007, <strong>the</strong> Board will be taking part in<br />

tailored training events and executive Directors<br />

and senior management are participating in<br />

a Board-approved development programme.<br />

The outcome of this project will enable us<br />

to formally capture <strong>the</strong> core competencies<br />

and skills which we believe have played<br />

an essential part in <strong>Tullow</strong>’s success and<br />

are fundamental to <strong>the</strong> future growth of <strong>the</strong><br />

Group. A process will <strong>the</strong>n identify and develop<br />

those competencies and skills in managers<br />

at all levels in <strong>Tullow</strong>.<br />

Having fun for charity<br />

Many <strong>Tullow</strong> employees undertake<br />

fundraising activities as individuals and<br />

<strong>Tullow</strong> contributes to any funds raised as<br />

extra encouragement for <strong>the</strong>ir efforts. Often<br />

<strong>the</strong>y will persuade colleagues to participate<br />

and a number of larger group events are<br />

undertaken. Charities and projects sponsored,<br />

during 2006, included Friends of Chernobyl’s<br />

Children, Jack & Jill Foundation, Irish<br />

Cancer Society, Breast Cancer, <strong>the</strong> Gorilla<br />

Organisation, Haematology Research Fund,<br />

Cancer Research, BBC Children in Need,<br />

Heart Research and SportAid through<br />

participation in <strong>the</strong> JPMorgan Chase<br />

Corporate Challenge, to name but a few.<br />

Engaging and communicating<br />

A critical element in achieving our goal<br />

of strong and lasting relationships with all<br />

our key stakeholders is being open and<br />

transparent in our communications, and<br />

proactive in working with all of <strong>Tullow</strong>’s<br />

key stakeholders.<br />

Employees<br />

<strong>Tullow</strong> communicates internally at several<br />

levels. Toge<strong>the</strong>r with our core policies, we<br />

have an ongoing programme of employee<br />

communications, team building exercises,<br />

briefings and ‘town hall’ meetings as well<br />

as weekly and monthly reporting systems.<br />

All public information is circulated and<br />

highlighted via ‘News’ on <strong>the</strong> Group’s Intranet,<br />

which also contains feeds and links to all<br />

public documentation and news releases.<br />

During 2006, <strong>the</strong> Group amalgamated various<br />

office intranets into a ‘one <strong>Tullow</strong>’ enhanced<br />

intranet as <strong>the</strong> first phase of a project<br />

that aims to fully integrate information<br />

management and communication across<br />

<strong>the</strong> Group.<br />

In autumn 2006, <strong>Tullow</strong> launched a<br />

Group-wide Information Management<br />

Programme (IMP), which will provide a suite<br />

of procedures, systems and tools to promote<br />

<strong>the</strong> effective use of information across <strong>the</strong><br />

Group. Phase one of <strong>the</strong> IMP includes an<br />

enterprise-wide document management<br />

system, a Geographical Information System<br />

(GIS) portal and a data framework to help<br />

employees manage <strong>the</strong> information <strong>the</strong>y use<br />

and require in <strong>the</strong>ir role. Communicating with<br />

and providing support to employees through<br />

<strong>the</strong> change to new IT systems and working<br />

practices is at <strong>the</strong> heart of <strong>the</strong> IMP, and<br />

includes system demonstrations, workshops,<br />

in-house training and feedback sessions and<br />

<strong>the</strong> IMP has a dedicated section on <strong>the</strong> intranet.<br />

Communities and interest groups<br />

All our major projects, local operations,<br />

business units and country managers engage<br />

with <strong>the</strong>ir local communities in a variety of<br />

ways. Operating companies and local offices<br />

are responsible for implementing any social<br />

or community commitments assumed under<br />

<strong>the</strong> terms of PSCs and licences. The first<br />

step in this process is a dialogue with local<br />

community leaders to understand <strong>the</strong>ir needs.<br />

Through our ‘Working with Communities’<br />

initiative we also support and sponsor a<br />

variety of social projects and seek to foster<br />

self-sustaining local enterprise. This provides<br />

essential economic development, as does our<br />

commitment to hiring and training local<br />

personnel where possible. Throughout<br />

<strong>Tullow</strong>, <strong>the</strong>re are various community affairs<br />

groups, environmental liaison committees,<br />

environmental monitoring and surveys<br />

conducted and disclosed, emergency<br />

exercises undertaken, site visits, complaints<br />

handling procedures and awareness<br />

campaigns for local topics of interest or<br />

importance in aspects of <strong>the</strong> environment,<br />

health and safety.<br />

Government, partners and contractors<br />

Our goal is clear and it is to be partner of<br />

choice within <strong>the</strong> industry. This means we<br />

work very hard on building and fostering strong<br />

relationships with governments, partners and<br />

<strong>the</strong> numerous contractors that work with<br />

<strong>Tullow</strong> and contribute to our success.<br />

We engage with governments and<br />

government organisations in areas that can<br />

affect our ability to operate and grow. Key<br />

areas of interaction are <strong>the</strong> awarding of<br />

licences, compliance with regulations, and<br />

securing <strong>the</strong> permissions and clearances<br />

necessary to conduct our onshore and<br />

offshore operations.<br />

<strong>Tullow</strong> has strong links with o<strong>the</strong>r oil and gas<br />

companies around <strong>the</strong> world, through joint<br />

venture partnerships and contracting of work.<br />

This provides an excellent forum to discuss<br />

EHS issues and concerns and find innovative<br />

ways to solve issues. An example of this<br />

is <strong>the</strong> Sou<strong>the</strong>rn North Sea EHS Network.<br />

Companies with activities in <strong>the</strong> area meet<br />

on a quarterly basis to discuss and implement<br />

improvements relative to <strong>the</strong> local EHS agenda.<br />

34 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


1 and 6 Great Gorilla Run. 2 Breakthrough<br />

Breast Cancer Walk. 3 and 8 BBC Children<br />

in Need. 4 Irish Cancer Society.<br />

5 JPMorgan Chase Corporate Challenge.<br />

7 touraid. 9 Hematology Research Fund.<br />

1 2 3<br />

4 5 6<br />

7 8 9<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 35


Social performance<br />

continued<br />

Industry links<br />

We maintain a large number of industry<br />

links and memberships including OGP and<br />

UKOOA. Both organisations provide access<br />

to industry-wide best practice findings,<br />

benchmarking information and<br />

discussion forums.<br />

<strong>Tullow</strong> participates in <strong>the</strong> OGP data collection<br />

programme which annually publishes ‘E&P<br />

Industry Safety Performance Indicator Data’.<br />

The key programme areas cover safety,<br />

environment and aviation and <strong>the</strong> objectives<br />

of <strong>the</strong> programme are:<br />

• To assist <strong>the</strong> industry to identify areas<br />

of concern;<br />

• To demonstrate to <strong>the</strong> industry and key<br />

stakeholders that E&P companies are<br />

managing related issues responsibly; and<br />

• To allow individual companies to<br />

benchmark <strong>the</strong>ir performance.<br />

In 2006, 39 organisations across <strong>the</strong> industry<br />

submitted information, representing over<br />

2,500 million work hours in operations in<br />

81 countries.<br />

We also support <strong>the</strong> principles of Extractive<br />

Industries Transparency Initiative (EITI),<br />

which is a UK Government-sponsored<br />

initiative in <strong>the</strong> area of International<br />

Development. EITI supports improved<br />

governance in resource-rich countries<br />

through promoting transparent reporting<br />

of company payments and government<br />

revenues from oil, gas, and mining.<br />

Sustainability ratings<br />

We continuously strive to be open and<br />

transparent in <strong>the</strong> way we communicate<br />

about our activities. In 2006, we took part<br />

in <strong>the</strong> FTSE4Good and EIRIS questionnaire<br />

and we contributed to <strong>the</strong> Carbon Disclosure<br />

Project. We also began working with<br />

Business in <strong>the</strong> Community (BitC), which<br />

comprises over 700 of <strong>the</strong> UK’s top<br />

companies ‘who are committed to<br />

improving <strong>the</strong>ir positive impact on society’.<br />

We participated in <strong>the</strong> BitC Environment<br />

Index, for which we received a ‘Bronze<br />

Award’, and we entered, on request, a<br />

project in <strong>the</strong> International Climate Change<br />

Category of <strong>the</strong> BitC Awards for Excellence,<br />

for which we received a ‘Big Tick’ award.<br />

<strong>Tullow</strong> also worked with RoSPA during <strong>the</strong><br />

year and provided four-year data on <strong>the</strong><br />

Group’s occupational health and safety<br />

performance, and our strong track record<br />

in this area was recognised with a ‘Gold<br />

Award’. We also publish information on<br />

ICSA’s Corporate Responsibility Exchange,<br />

formerly owned by <strong>the</strong> London Stock<br />

Exchange. We treat <strong>the</strong>se interactions<br />

as a two-way process and incorporate<br />

feedback into our policies, practices and<br />

disclosure so that we can make this form<br />

of reporting more valuable.<br />

Shareholders<br />

<strong>Tullow</strong> has a very active domestic and<br />

international Investor Relations (IR)<br />

programme. In 2006, management conducted<br />

over 250 meeting with investors, analysts<br />

and financial media. The Group hosted an<br />

Exploration Capital Markets Day for analysts<br />

and presented at a wide range of industry and<br />

investor conferences. In all investor relations<br />

activity took place in 20 cities in 11 countries.<br />

In 2006, <strong>Tullow</strong> investor relations efforts were<br />

recognised through being nominated as one<br />

of four companies for Best IR Website and<br />

Best IR for a FTSE250 company. The Group<br />

also won <strong>the</strong> Irish Best IR Award for a<br />

Resource Company.<br />

36 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


Bangora, Bangladesh<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 37


Working with Communities<br />

Education<br />

Schools refurbishment<br />

Of <strong>the</strong> 12 schools local to <strong>the</strong> Sara/Suri gas field<br />

that are supported by <strong>Tullow</strong> in Pakistan, eight<br />

underwent refurbishment during 2006. All works<br />

were carried out by a local contractor and were<br />

directly paid for by <strong>Tullow</strong>. Key activities included<br />

<strong>the</strong> provision of water and sanitation facilities, and<br />

undertaking structural repairs and improvements<br />

to <strong>the</strong> buildings.<br />

Education Alive<br />

Education Alive is an organisation that has<br />

been operating in South Africa for over 30 years,<br />

supporting local schools in <strong>the</strong> various Townships<br />

develop improved teaching methods and providing<br />

teaching materials. <strong>Tullow</strong>’s Cape Town office has<br />

supported Education Alive since 1999 and last year<br />

ran a three-day workshop with Education Alive for<br />

children of <strong>Tullow</strong> staff at <strong>the</strong> Cape Town office.<br />

The workshop was attended by 16 children between<br />

8 and 17 years of age, and was designed to improve<br />

core subjects such as Maths and English. Feedback<br />

from <strong>the</strong> parents of attendees has been very<br />

positive, highlighting that students are now<br />

more able to work on <strong>the</strong>ir own with a better<br />

understanding of exactly what <strong>the</strong>y are studying.<br />

This workshop was so well received that <strong>Tullow</strong><br />

parents have requested we run ano<strong>the</strong>r in 2007.<br />

38 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


Bangladesh educational project<br />

<strong>Tullow</strong> Bangladesh spent approximately<br />

US$24,000 on educational development projects<br />

during 2006 with <strong>the</strong> objective of improving <strong>the</strong><br />

learning environment in local schools in <strong>the</strong> vicinity<br />

of operational sites. Construction work included<br />

building a new library for Ojifa Khatun High School<br />

and washrooms for Bangora Umalochan High<br />

School. All <strong>the</strong> pupils from two local primary<br />

schools received book-bags containing a t-shirt,<br />

a pair of flip-flops and school stationery, as well<br />

as an educational booklet with text in Bengali and<br />

English, describing basic aspects of health and<br />

hygiene, safety, good manners, and care for people<br />

and <strong>the</strong> environment. In addition, donations of<br />

books, science and sports equipment, desks,<br />

furniture and computers were also made to all four<br />

schools. This programme is being expanded in 2007.<br />

Noluthandu School for <strong>the</strong> Deaf<br />

For <strong>the</strong> past 11 years, <strong>Tullow</strong>’s Cape Town office<br />

has supported <strong>the</strong> Noluthando School for <strong>the</strong><br />

Deaf, based in Khayelitsha, Cape Town. This school<br />

caters for 182 pupils between <strong>the</strong> ages of three<br />

and 21 years old, most of whom have minimal<br />

or no hearing and come from disadvantaged<br />

backgrounds. The school also offers vocational<br />

skills training including welding, hairdressing,<br />

panel-beating and spray painting, hospitality<br />

training, bricklaying and sewing. This year’s<br />

donation of US$18,500 will pay <strong>the</strong> salaries of<br />

<strong>the</strong> eight deaf educator-assistants who assist <strong>the</strong><br />

children via sign language during <strong>the</strong>ir early years<br />

at <strong>the</strong> school. This vital work helps <strong>the</strong> children to<br />

learn speech and develop vocabulary and without<br />

which it is unlikely that <strong>the</strong>y would be able to<br />

communicate effectively.<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 39


2007 goals and objectives<br />

We delivered a strong EHS performance in 2006, continuing our<br />

track record for good results in <strong>the</strong>se areas. Each year <strong>Tullow</strong><br />

undertakes a management review of EHS, based on an agreed<br />

formal agenda. Overall, <strong>the</strong> outcome of this review is reported<br />

to <strong>the</strong> Board and incorporated into plans to achieve our EHS and<br />

CSR goals and objectives.<br />

In 2006, <strong>the</strong> EHS review process was<br />

significantly enhanced through direct<br />

engagement with country and business<br />

unit managers in an auditable and<br />

formalised process. The agenda for<br />

<strong>the</strong> 2006 review included:<br />

• The Group’s EHS and CSR policies;<br />

• EHS and CSR targets and objectives;<br />

• Overall environmental performance;<br />

• Results of <strong>the</strong> EHS audit programme;<br />

• Complaints, legal breaches and incidents;<br />

• Changing circumstances that could<br />

impact <strong>the</strong> IMS;<br />

• Status of corrective and<br />

preventative actions programme;<br />

• Progress on deliverables from<br />

<strong>the</strong> 2005 review; and<br />

• Identifying key risks for 2007.<br />

The feedback from <strong>the</strong> 2006 review has been<br />

included in our 2007 EHS and CSR goals and<br />

objectives, which are:<br />

1. No significant environmental incidents;<br />

2. LTIFR for <strong>the</strong> end of 2007 below 0.90;<br />

3. Successful transition of Hardman<br />

Resources assets;<br />

4. Develop EHS action tracking system;<br />

5. Develop and implement EHS<br />

training matrix;<br />

6. Improve near miss reporting;<br />

7. Roll out new Accident and Investigation<br />

Procedures in each business unit;<br />

8. Implement ESIA template across<br />

<strong>the</strong> Group;<br />

9. Fur<strong>the</strong>r develop CSR reporting and<br />

engagement with all stakeholders; and<br />

10. Enhance CSR section of <strong>the</strong><br />

Group’s website.<br />

Bangladesh<br />

40 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


An integrated approach<br />

CSR and EHS excellence are part of every day activities in<br />

<strong>Tullow</strong>. On 7 June, we will be celebrating our 21 st birthday.<br />

Over <strong>the</strong> years, since 1986, <strong>the</strong> Group has developed into a<br />

leading international oil and gas business and along <strong>the</strong> way<br />

has worked with many people in many ways. We have developed<br />

an enduring tradition and culture of respect, contribution and<br />

care in <strong>the</strong> countries where we operate and this is <strong>the</strong> basis<br />

for <strong>the</strong> strong relationships we have.<br />

2<br />

Economic<br />

4<br />

Social<br />

5<br />

1<br />

7<br />

6<br />

3<br />

Environmental<br />

1. Sustainability<br />

As a group we have an integrated approach to consistently apply and achieve high environmental and social standards and we<br />

develop our business with a long-term and sustainable perspective.<br />

2. Economic<br />

• Consistent, profitable growth<br />

• Risk management<br />

• Total shareholder return<br />

3. Environmental<br />

• Permit and licence compliance<br />

• Biodiversity management<br />

• Emissions to air<br />

• Water usage and discharges<br />

• Chemical usage and discharges<br />

4. Social<br />

• Respect for <strong>the</strong> individual<br />

• Equal opportunities<br />

• Ethics and integrity<br />

• Religious and cultural diversity<br />

• Human rights<br />

• Awareness/outreach activities<br />

5. Socio-economic<br />

• Employment<br />

• Training and development<br />

• Local economic development<br />

• Sustainable local enterprise<br />

• ‘Working with Communities’<br />

6. Eco-efficiency<br />

• Resource efficiency<br />

• Energy efficiency<br />

• Global resource issues<br />

7. Socio-environmental<br />

• Health and safety<br />

• Regulatory compliance<br />

• Climate change<br />

• Effective crisis management<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 41


Supplementary information<br />

Activity data<br />

2006 2005 2004<br />

2D seismic (km) 2,108 1,517 –<br />

3D seismic (sq km) 2,608 1,016 –<br />

Environmental performance<br />

Atmospherics<br />

CO 2<br />

emissions (tonnes) 215,407 258,750 –<br />

EUETS allowance (tonnes) 426,666 426,666 –<br />

Discharges<br />

Produced water quantity (m 3 )<br />

52/5A 8,774.7 6,634.9 1,582.3<br />

48/29A 950.7 1,237.0 1,288.5<br />

Produced water quality (1) mg/l mg/kg mg/kg<br />

52/5A 14.25 24.7 11.8<br />

48/29A 31 26.89 27.83<br />

DTI permitted allowances (individually for both installations) 30 40 40<br />

(1) In 2005, <strong>the</strong> quality standard changed from 40 mg/kg to 30 mg/l.<br />

Total oil in produced water (tonnes)<br />

52/5A 0.13215 0.16531 0.015<br />

52/5A DTI allowance (under OPPC regulations) 1.02 n/a n/a<br />

48/29A 0.03025 0.03409 0.0209<br />

48/29A DTI allowance (under OPPC regulations) 0.09 n/a n/a<br />

Water usage<br />

Water usage (m 3 ) 18,678 29,200 36,929<br />

EA consented limit 47,400 47,700 47,700<br />

Spills<br />

<strong>Oil</strong> and chemical spills 2 2 1<br />

<strong>Oil</strong> and chemical spills (tonnes) 6.30937 0.07 0.4<br />

Safety performance<br />

2006 2005 2004<br />

Hours worked (million) 6.1 3.7 2.0<br />

LTIs 5 3 4<br />

LTIFR 0.81 0.82 1.96<br />

OGP LTIFR 1.09 0.97 1.09<br />

TRI 74 11 –<br />

TRIFR 12.1 3.0 –<br />

OGP TRIFR 3.07 3.05 –<br />

HIPO 3 2 –<br />

42 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


2006 Social data<br />

South<br />

Côte<br />

UK Ireland Africa Pakistan Bangladesh Angola Namibia Gabon Romania d’Ivoire Total<br />

Number of employees 74 35 47 42 40 0 1 8 0 247<br />

Number of expatriate employees 0 0 0 1 3 1 1 1 0 7<br />

Number of consultants 46 6 7 4 123 0 0 0 0 186<br />

Total workforce 120 41 54 47 166 1 0 9 0 438<br />

Total number of hours worked 1,248,928 58,632 102,825 1,822,036 2,687,810 5,600 3,000 88,008 6,240 91,868 6,114,947<br />

Number of employee fatalities 0 0 0 0 0 0 0 0 0 0 0<br />

Number of contractor fatalities 0 0 0 0 0 0 0 0 0 0 0<br />

Number of third party fatalities 0 0 0 0 0 0 0 0 0 0 0<br />

LTIs 2 0 0 1 1 0 0 0 0 1 5<br />

LTIFR 1,601 0 0 0.549 0.372 0 0 0 0 10.885 0.81<br />

TRI 5 0 0 59 8 0 0 0 0 2 74<br />

TRIFR 4.003 0 0 32.381 2.976 0 0 0 0 21.770 12.1<br />

Number of vehicle km 8,027 0 17,459 1,517,087 356,509 4,145 0 47,499 12,050 0 1,962,776<br />

Number of vehicle incidents 0 0 0 2 8 0 0 0 0 0 10<br />

Number of female employees 25 10 12 4 9 0 1 4 0 65<br />

Number of female managers 4 0 0 0 0 0 0 0 0 4<br />

2006 Hours worked<br />

Employees Hours<br />

and worked % of Medical LWDC RWDC<br />

contractors (000’s) total Fatalities Cases LWDC Days RWDC Days<br />

Country<br />

Angola 7 5 0.09 0 0 0 0 0 0<br />

Bangladesh 2,697 2,687 44.01 0 5 1 0 2 0<br />

Gabon 102 88 1.44 0 0 0 0 0 0<br />

Ireland 40 59 0.97 0 0 0 0 0 0<br />

Côte d’Ivoire 57 91 1.49 0 0 1 0 1 0<br />

Pakistan 765 1,821 29.82 0 57 1 37 1 0<br />

Romania 4 7 0.11 0 0 0 0 0 0<br />

South Africa 53 107 1.75 0 0 0 0 0 0<br />

UK 329 1,241 20.32 0 3 2 0 0 0<br />

Total 4,054 6,106 100.00 0 65 5 37 4 0<br />

Onshore/offshore<br />

Company onshore 344 736 12.05 0 8 1 37 0 0<br />

Contractor onshore 3,407 4,191 68.64 0 54 1 0 3 0<br />

Contractor offshore 303 1,179 19.31 0 3 3 0 1 0<br />

Total 4,054 6,106 100.00 0 65 5 37 4 0<br />

Activity<br />

Exploration 2,727 2,466 40.39 0 2 1 0 2 0<br />

Production 295 1,090 17.85 0 59 3 37 2 0<br />

Drilling 376 1,211 19.83 0 3 1 0 0 0<br />

Construction 173 430 7.04 0 1 0 0 0 0<br />

Unspecified 483 909 14.89 0 0 0 0 0 0<br />

Total 4,054 6,106 100.00 0 65 5 37 4 0<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006 43


Glossary<br />

BAP<br />

BitC<br />

boepd<br />

CDP<br />

CMS<br />

CMSIII<br />

CMT<br />

CO 2<br />

CSR<br />

DSE<br />

DTI<br />

EA<br />

ECOFAC<br />

EHS<br />

EIRIS<br />

EITI<br />

ESIA<br />

EUETS<br />

FAC<br />

GHG<br />

GRI<br />

HR<br />

HIPO<br />

IFRS<br />

IMS<br />

IR<br />

Biodiversity Action Plan<br />

Business in <strong>the</strong> Community<br />

Barrels of oil equivalent per day<br />

Carbon Disclosure Project<br />

Caister Murdoch System<br />

Five satellite fields linked to CMS<br />

Crisis Management Team<br />

Carbon Dioxide<br />

Corporate and Social Responsibility<br />

Display Screen Equipment<br />

Department of Trade and Industry (United Kingdom)<br />

Environment Agency<br />

Programme for Conservation and Rational Utilization<br />

of Forest Ecosystems in Central Africa<br />

Environment, Health and Safety<br />

Ethical Investment Research Service<br />

Extractive Industry Transparency Initiative<br />

Environmental and Social Impact Assessment<br />

European Union Emissions Trading Scheme<br />

First Aid Case<br />

Greenhouse Gases<br />

Global <strong>Report</strong>ing Initiative<br />

Human Resources<br />

High Potential Incident<br />

International Financial <strong>Report</strong>ing Standards<br />

Integrated Management System<br />

Investor Relations<br />

ISO<br />

Km<br />

LAPS<br />

LTI<br />

LTIFR<br />

LWDC<br />

m 3<br />

mg/kg<br />

mg/l<br />

mmboe<br />

MTC<br />

NEBOSH<br />

NGO<br />

OGP<br />

PSC<br />

PTW<br />

RoSPA<br />

RWDC<br />

SEE<br />

SNS<br />

Sq km<br />

TRI<br />

TRIFR<br />

UKOOA<br />

International Organisation for Standardisation<br />

Kilometre<br />

Lancelot Area Pipeline System<br />

Lost Time Incident<br />

Lost Time Incident Frequency Rate<br />

Lost Work Day Case<br />

Cubic metres<br />

Milligrammes per kilogram<br />

Milligrammes per litre<br />

Millions of barrels of oil equivalent<br />

Medical Treatment Case<br />

National Examination Board in Occupational<br />

Safety and Health<br />

Non-Governmental Organisation<br />

International Association of <strong>Oil</strong> and Gas Producers<br />

Production Sharing Contract<br />

Permit to Work<br />

The Royal Society for <strong>the</strong> Prevention of Accidents<br />

Restricted Work Day Case<br />

Social, Ethical and Environmental<br />

Sou<strong>the</strong>rn North Sea<br />

Square kilometre<br />

Total Recordable Incidents<br />

Total Recordable Incident Frequency Rate<br />

United Kingdom Offshore Operators Association<br />

Designed and produced by Corporate Edge in 2007. Printed by Cousin.<br />

This report is printed on paper using 55% post consumer de-inked fibre, and 20% post industrial waste. 25% of <strong>the</strong> non recycled content is<br />

elemental chlorine free.<br />

The printer is a carbon neutral and FSC Accredited company, and are accredited to ISO 9002 (quality) and ISO 14001 (environmental) management.<br />

44 <strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong> Corporate and Social Responsibility <strong>Report</strong> 2006


O<strong>the</strong>r information<br />

Annual report<br />

Published April 2007<br />

<strong>Tullow</strong> at a glance<br />

Chairman and CEO reviews<br />

Business and finance reviews<br />

Corporate Governance<br />

Remuneration report<br />

Financial Statements<br />

Licence interests<br />

Board and management<br />

Shareholder information<br />

Corporate profile<br />

Published May 2006<br />

To be republished 2007<br />

Our history<br />

Our strategy<br />

Our business<br />

Our responsibilities<br />

Website<br />

About <strong>Tullow</strong><br />

Our operations<br />

Investors<br />

Media centre<br />

Latest news and events<br />

Share price data<br />

<strong>Report</strong>s and presentations<br />

Our responsibilities<br />

Fact Book<br />

Published March 2007<br />

Asset overview<br />

2006 Results summary<br />

2006 Reserves and resources summary<br />

2006/2007 Capex Programme<br />

2006/2007 Costs and depreciation<br />

2007 Development opportunities<br />

Current exploration programme<br />

Current production summary<br />

Net daily entitlement (% of production)<br />

Policies<br />

Updated March 2007<br />

EHS policy<br />

CSR policy<br />

Driving policy (new 2007)<br />

Contact details<br />

<strong>Tullow</strong> <strong>Oil</strong> <strong>plc</strong><br />

3rd Floor, Building 11<br />

Chiswick Park<br />

566 Chiswick High Road<br />

London W4 5YS<br />

Tel: +44 20 8996 1000<br />

Fax: +44 20 8994 5332<br />

Email: information@tullowoil.com<br />

Website: www.tullowoil.com


www.tullowoil.com

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