Annual Report PDF (8.0MB) - Tullow Oil plc

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Directors’ report: Business reviewOrganised to deliverExecuting our strategyTullow’s Executive Directors, led by Aidan Heavey, Chief Executive Officer,are tasked with executing the Group’s strategy and have responsibility fordelivering shareholder value.Exploration and AppraisalProduction and DevelopmentAngus McCoss, Exploration DirectorDifferentiated long-term explorationstrategy secures the futureTullow’s exploration strategy is based on identifyingtransformational, high-value growth opportunitiesand appropriately mitigating risks by concentratingexploration in core plays and in areas of focus for theGroup. This is delivered by successful execution ofmaterial commercial exploration campaigns withhigh success rates achieved through developingtechnical excellence.The Group’s exploration strategy has been recalibrated toadjust to the global economic downturn so that investmentis focused on operational and financial delivery in Ghanaand Uganda, targeting short-term production andcommercial reserves, whilst nurturing long-termgrowth options and replenishing portfolio upside.Read more starting on page 20Paul McDade, Chief Operating OfficerConsistent delivery of operationalexcellence adds valueTullow’s P&D strategy is focused on creating value fromthe Group’s portfolio of assets. This is achieved throughnew or incremental developments, improving operatingefficiency and strategic divestments or acquisitions.Fundamental to this is conducting all business in amanner that enhances the Group’s reputation andreinforces Tullow’s long-standing commitment tooperate in a safe and environmentally sensitive way.In 2009, the Group has been particularly disciplined inallocating capital and human resources to fast-trackand monetise the Jubilee field in Ghana and majordiscoveries in Uganda. Tullow continues to investstrongly in people including building a world-classdeepwater operating capability in Accra, Ghana andenhancing the Kampala organisation in preparationfor development activity in Uganda.Read more starting on page 20E&A Group strategic responsibilityP&D Group strategic responsibilityIntegrateddecisionmakingE&A• Executing selective, high-impactexploration programmes fundedby surplus cash flow or equity; and• Managing our assets to high-gradethe portfolio, replenish upside andassist funding needs.IntegrateddecisionmakingP&D• Delivering major projects, witha significant focus on increasingbankable reserves; and• Ensuring safe people, proceduresand operations, and minimisingenvironmental impacts.For more information on Tullow’s business model, see page 1516 Tullow Oil plc 2008 Annual Report and Accounts
Group overview Directors’ report: Business reviewDirectors’ report: Corporate governance Financial statementsFinanceLegalIan Springett, Chief Financial OfficerFinancial strength and flexibilityin a challenging environmentTullow’s financial strategy is centred on ensuring theGroup has a strong and well-funded balance sheet andis managed in a way that is consistent with the currentexternal reality and the Group’s longer-term strategicgoals for growth.For Tullow, this means having the capacity to fund itsactivity set, particularly the significant investment inGhana and Uganda developments; the ability to managemarket volatility and uncertainty; the flexibility toselectively acquire or divest; and an overall balancebetween focused short-term activity and longer-terminvestment required for continued growth.Graham Martin, General Counsel and Company SecretaryEffective governance and riskmanagement, within a clear frameworkThe Board and senior management are committedto all aspects of good corporate and ethical behaviour.Corporate responsibility and accountability is reflectedin how the Group is organised and the policies andprocesses in place to ensure Tullow complies fullywith all its legislative and regulatory requirements.Where legislation is inadequate or non-existent theGroup applies responsible standards.Tullow’s Board operates within a clear governance andrisk framework for the management of the Group, thesafety of its operations and employees and the successfulexecution of the Group’s strategy. The Group alsoembraces a wide range of CSR and EHS responsibilities,particularly in the context of the oil and gas industry andthe location of some of Tullow’s operations.Read more on page 40 to 43 Read more starting on page 54Finance Group strategic responsibilityLegal Group strategic responsibilityFinanceIntegrateddecisionmaking• Deliver sustainable long-termgrowth with a balance betweenfunding, exploration and productionspend and major activities in coreareas of the business.LegalIntegrateddecisionmakingGovernance• Maintaining a strong global teamwith excellent legal and commercialskills; and• Building long-term relationshipswith governments, partners and keystakeholders focusing on the highestcorporate and ethical standards.Tullow Oil plc 2008 Annual Report and Accounts 17
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