Tullow Oil plc Annual Report 2011 - The Group

3LOCAL CONTENTCreating real opportunities for local peopleand local enterprise development2011 highlights Supplier development programme established to supportlocal suppliers and enable them to compete for contracts Social enterprise working group formed to develop integratedinitiatives between Social Enterprise, Supply Chain andHuman Resources in support of local content developmentA principal element of shared prosperity in host countries iscreating real opportunities for local people and local enterprisedevelopment. Tullow’s strategy is to create local opportunitiesin three interconnected ways: Supply Chain local content – enabling local companies toenter the industry’s supply chain, either directly with Tullowor through Tullow’s supplier relationships; Localisation – to be capable of running each of the Group’scountry assets with a majority of local managers and staff.HR has functional responsibility for this area; and Strategic Social Enterprise investment – investing ineducation and enterprise programmes that build capacity forthe oil and gas industry and provide support for Tullow’slocalisation and supply chain local content strategies. This isthe responsibility of the Social Enterprise working group andExternal Affairs.Each aspect has a significant role to play in fostering social andeconomic development in emerging oil countries. However, withalmost $2 billion forecast capital expenditure in 2012, SupplyChain has a leading role to play in the development of localcontent. In particular, all Supply Chain tenders submitted arereviewed for opportunities for local content, which is a keyconsideration in host country contracting strategy.Tullow has a local supplier development programmedesigned to provide support to suppliers not only to enablethem to respond to tenders but also to help them improvetheir business processes, allowing them to compete withinternational suppliers. A key initiative undertaken in 2011 wasto identify a series of activities that would support supply chainlocal content development. These include building sustainableand viable supplier networks in host countries and developingsustainable and self-governing training initiatives deliveringrecognised international qualification.Developing local suppliers in GhanaMacro Group is a Ghanaian company that offers a portfolioof services including shipping, logistics and trucking. Thecompany started life as Macro Shipping in 2005, and has grownby recognising further opportunities in the emerging oil andgas industry and adding additional services including MacroLogistics and Macro Trucking.The company started with three members of staff in 2005 andnow employs over 75 people. Macro Group has worked withTullow since 2009, providing heavy vehicles and drivers andports and harbours agency services.Its founder Kwame Macafui talks about the Macro Group andtheir work with Tullow.Q: What do you find positive about working with Tullow?A: I’d describe working for Tullow as like being in school, but it’sfascinating as everyone is prepared to learn, with no complaints.Since the start of our relationship we have learned a number oflessons and have grown in experience as an organisation. Whilesome lessons are positive and others more challenging, webelieve that as we work together more, our business willcontinue to improve.Q: In what ways has your business changed since workingwith Tullow?A: Tullow has a remarkable environment, health and safetymanagement system and it ensures that we conform to the highstandards within this industry. Tullow’s stance on EHS has madeus focus in the same direction to keep us ahead of the marketand our competitors. One of our objectives is to build a strongsafety culture and we regularly train our staff in a number ofinternationally recognised EHS practices.Q: Do you feel the skills learnt by working with Tullow aretransferable both in-country and internationally?A: Yes, we do, and we very much appreciate the opportunity andexperience we have gained. Working with Tullow has helped us toraise and set our own standards and we believe we are preparedfor work around the world. Each tender process we go through istough and challenging, but we consider them to be learningcurves that help prepare us for world-class performanceanywhere, anytime.CORPORATE RESPONSIBILITYSpecific projects under way include opening enterprisecentres in Ghana and Uganda in 2012 and running a pilotvocational training scheme for selected trades as a learningexercise. Central to the success of any initiative is to ensurethat they are aligned with host country development goalsand are supported or delivered by strong collaborativepartnerships with NGOs, governments, industry bodiesand professional providers.The Hon. Hanna S. Tetteh, Minister of Trade & Industry, on the Tullow standat the 2 nd AGI Local Content Oil and Gas Conference in Ghana.71www.tullowoil.com