Tullow Oil plc Annual Report 2011 - The Group

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Corporate responsibility continuedOUR PEOPLEBeing a rewarding, challenging and great place to work2011 highlights 26% increase in total workforce (employee and contractors);29% increase in employees 3.2% staff turnover rate for 2011, which is a modestincrease on the prior year and within our baseline targetof less than 5% Over 84% participation in our global employee andcontractor feedback survey, ‘Talkback’ 81% favourable engagement score in Talkback, which issignificantly higher than the industry benchmark 371 new people joined Tullow in 2011, 36% of which joinedour African operations Our total workforce increased 26% to 1,548 by year-endSince 2007 our employee numbers have more than trebled, inline with our transformation as a business. Much of our successhas been based on the adaptive and entrepreneurial nature ofour culture, with organisation & culture forming a key part ofour business model, as outlined on page 26 of this report. Ourculture is also reflected in our values.One of our key people challenges is the need to develop andimplement systems and processes that provide both rigour andcontrol but ensure that we continue to foster a values basedentrepreneurial culture throughout the organisation.Talkback: global employee andcontractor feedback survey‘Talkback’ provides a voice to employees and contractors globally.In 2011, the survey received an 84% response rate. Our overallengagement score was 81% favourable, significantly above theenergy benchmark defined by the survey intelligence provider,Sirota. Our employees feel our strengths are in the areas ofsafety, responsibility, innovation, empowerment and teamwork.The main areas for improvement are the obstacles we face as agrowing company in achieving more efficiency and effectivechange management and in the increasing challengeswe have in managing a diverse international pool of talent.There are also regional variations in responses that we willneed to address. One of our 2012 objectives is to consult widelyand to create action plans to further improve our employeeengagement and address priority issues. Overall, 71% ofemployees responded that they intended to stay with Tullowfor four years or more, indicating strong and very encouragingretention. Detailed results from the survey will be published inthe Corporate Responsibility Report.Significant organisational growthIn 2011, we set up operations in Kenya, Ethiopia and Singaporeand expanded our offices in Mauritania, the Netherlandsand Dublin. We created new specialist teams such as theSubsurface Technology Group and the Global IS Service Desk.We also reorganised the business into regions supported bya strong Group centre and sought to maintain a sharp focus on‘business as usual’ despite significant uncertainty in Uganda,one of the Group’s major projects.Our HR function facilitates informal communication andinvolvement on matters that affect employees. Communicationand employee consultation form part of our change managementapproach and we seek to involve stakeholders as early as possibleon any new initiatives. Our Global Share Option Plan provides allemployees with the ability to have a stake in the success of Tullow.In addition to this, we have expanded our reward benchmarkingin countries where it has not previously existed.Maintaining our cultureMaintaining our culture was a key Board-level corporateobjective in 2011, and we continue to take a number of clearsteps to manage this objective. At the recruitment phase welook for people with the requisite skills who align with ourvalues. We reinforce this through our induction process,employee handbook and universal performance managementsystem, where we seek evidence of our values in individualperformance. Through our leadership development andcoaching programmes we help people to live our values everyday at work and to provide support to their teams to do so aswell. Our values are outlined on pages 3, 47, 61, 75 and 111.We also track staff turnover as one of the Group’s KPIs. Ourstaff turnover in 2011 was 3.2% (2010: 1.3%). We are consciousof this increase despite staff turnover remaining low relative toour industry. Continuing to offer competitive remuneration,providing people with development opportunities and trackingwhere we can improve our employee engagement will help usminimise staff turnover. We seek to learn from each personwho leaves Tullow to help us to improve our employment offer.Staying connectedTullow has operations in 22 countries and 45 nationalities ofpeople managing our business from different cultures andbackgrounds means we have to work hard to stay connected,informed and engaged as a group, in all locations and at all levels.We have an Internal Communications team that are primarilybased in London, but have local representation in Uganda andGhana. The team is tasked with keeping everyone involved andengaged with the Group’s initiatives and activities. We manage avariety of channels ranging from our Intranet, videos, Townhallmeetings, informal meetings with Senior Management ande-newsletters. Our Intranet, ‘TullowNet’, is accessed by over1,000 people per day and provides employees and contractorswith regular updates on our business and people stories as wellas social and corporate responsibility news. Over 300 storieswere published during the year.68Tullow Oil plc 2011 Annual Report and Accounts
3Future talent poolIn October 2011, Chief HR Officer, GordonHeadley made a presentation at theConference of Ghanaian Graduates andStudents of Higher Education in the UK. Hediscussed the HR challenges in Ghana’s oilindustry, and participated in a question andanswer session. Reaching out to thisGhanaian diaspora, many of whom arecompleting oil and gas related degrees, helpsTullow to create an understanding of theGhanaian oil industry and to listen to theirviews and concerns about the developmentof the sector in their home country. 268people from various UK universities attended.CORPORATE RESPONSIBILITYAttendees at conference of Ghanaian Graduates and Students of Higher Education held at Coventry University, UK.In 2011, one of the Board’s objectives was to improve its visibilityboth as a group and as individual Directors. There have been 15formal ‘Meet the Executive’ sessions around our global offices,as well as Executive sessions at our Leadership DevelopmentProgramme. When visiting local offices, members of theExecutive make time to host Townhall meetings, informallunches and Q&A sessions.Talent managementIn 2011, we introduced a process for succession planning andcareer development and enhanced our existing global onlineappraisal process. This will be fully rolled out in 2012. Wealso launched an employee referral scheme in the UK tocomplement our internal vacancies board. We continue tosupport our ‘T for Talent’ programme. For example, in 2011 wedeveloped a Well Engineering Development Programme where17 of our well engineers will undertake a programme to developbest-in-class skills in this critical area of our business. Duringthe year, our Learning & Development teams have supportedthe development of eLearning training for EHS, Complianceand Employee Induction. In 2011, the Tullow LeadershipDevelopment Programme was launched with AshridgeBusiness School. 123 leaders within Tullow have attendedthe first module of this training; a four-day sessionon what leadership is and means at Tullow.Growth in employees125010007505002500370Deployment of employees5406699351,20707 08 09 10 11West & North Africa 31%South & East Africa 24%Europe, South America & Asia 13%Corporate functions 32%LocalisationIn 2011, we further clarified our approach to localisation bydeveloping a definition and vision, which provides a commonplatform for consistent implementation and communication ofour localisation aims. We also recruited a Group LocalisationManager to lead the development and implementation of ourGroup Localisation strategy. In the short-term he is focusing onworking with Business Unit management teams in Ghana andUganda to ensure that our localisation agenda in thosecountries is executed effectively.Workforce diversityFemale 27%Male 73%69www.tullowoil.com
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Production operators in the central
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2011 highlightsRECORD RESULTSIndust
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In Ghana, we have experienced techn
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More informationPageStrong organisa
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CLEARVISIONSPECIAL FEATURETO BE THE
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1Exploration& appraisal7Sharedprosp
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Page 21 and 22: DELIVERING MATERIALPRODUCTIONGROWTH
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Page 25: RISKMANAGEMENTStrategic priority: E
Page 28 and 29: MAINTAINING OURENTREPRENEURIALCHARA
Page 30 and 31: SHAREDPROSPERITYStrategic priority:
Page 32 and 33: DELIVERINGSUBSTANTIAL RETURNSOur st
Page 34 and 35: Key Performance Indicators continue
Page 36 and 37: Financial reviewFUNDING FUTURE GROW
Page 38 and 39: Financial review continued2011 Grou
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Page 43 and 44: Regional business management unitsI
Page 45 and 46: LONG-TERMPERFORMANCE RISKSWe group
Page 47 and 48: 1Operational risk continuedKey deve
Page 49 and 50: 482011 operations overviewOverall,
Page 51 and 52: 2OPERATIONS REVIEWEurope,South Amer
Page 53 and 54: DEVELOPMENT & OPERATIONSA new scale
Page 55 and 56: Senior DrillingSupervisor withtrain
Page 57 and 58: Mauritania & SenegalProduction from
Page 59 and 60: periods for Kasamene, Wahrindi, Kig
Page 61 and 62: 2West African and South American ex
Page 63 and 64: 62Creating shared prosperityCreatin
Page 65 and 66: More informationPageSpecial feature
Page 67 and 68: Social performance standardsWe are
Page 69: 3The effect of Uncontrolled Release
Page 73 and 74: 3LOCAL CONTENTCreating real opportu
Page 75 and 76: 3Key corporate responsibility polic
Page 77 and 78: 76Chairman’s introductionAt Board
Page 79 and 80: 4In order to provide the human and
Page 81 and 82: I am delighted to have taken on the
Page 83 and 84: Board of DirectorsEXPERIENCED LEADE
Page 85 and 86: 4CORPORATE GOVERNANCEAnn GrantNon-e
Page 87 and 88: Audit planning and update on releva
Page 89 and 90: Directors in their place. On 12 May
Page 91: CONTENTS89 Introduction89 Remunerat
Page 94 and 95: Directors’ remuneration report co
Page 102 and 103: Corporate governanceThe UK Corporat
Page 104 and 105: Corporate governance continuedThe f
Page 106 and 107: Corporate governance continuedAccou
Page 108 and 109: Other statutory informationResults
Page 111 and 112: All employees are helped and encour
Page 113 and 114: As part of our Code of Business Con
Page 115 and 116: Independent Auditor’s Reportto th
Page 117 and 118: Group balance sheetAs at 31 Decembe
Page 119 and 120: Group cash flow statementYear ended
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The principal accounting policies a
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5Finance costs of debt are allocate
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5Commercial reserves estimates (not
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5Note 2. Business combinationsOn 24
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5Europe,South Americaand Asia$mWest
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5Non-current assets by originGhana
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5Note 6. Staff costsThe average mon
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5The Group’s profit before taxati
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5Note 12. Property, plant and equip
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5Note 13. Investments2011$m2010$m20
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5Note 18. Trade and other payablesC
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5The $3.5 billion Reserves Based Le
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5Note 20. Financial instrumentsFina
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5Oil and gas pricesThe Group uses a
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5Financial derivativesThe Group int
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5Deferred tax assets are recognised
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5Note 27. Share-based payments2005
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5UK & Irish Share Incentive Plans (
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Independent Auditor’s Reportto th
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Company balance sheetAs at 31 Decem
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Notes to the Company financial stat
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5Note 6. Bank loansCurrentShort-ter
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5Note 9. Shareholders’ fundsShare
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2010 Share Option Plan (2010 SOP) a
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5Note 13. Subsequent eventsSince th
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Commercial reserves and contingent
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Area TullowLicenceFieldssq km inter
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Licence / BlocksFieldsAreasq kmTull
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ContactsSecretary & registered offi
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KKenya 6, 7, 57Key financial metric
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MmmbblmmboemmscfdMoUMTMMillion barr
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This report is printed on Heaven 42
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Tullow Oil plc Annual Report 2011 - The Group

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