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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