Business model

Tullow is a leading global independent exploration and production company. Our business model shows how the different parts of the Group work together to run our business and create value.

how we create value

We create value over the business cycle by finding oil and selling oil. To achieve this we must execute exploration campaigns, deliver selective development projects, maintain our production and ensure we are suitably financed through a mix of diverse funding options and portfolio management. These elements are the basis of our strategy, which is explained here.

How we run our business

Our business model addresses the fundamentals that we must have in place to manage our risks and help us deliver our strategy. These include: sustainable operations; protecting our people, communities and environment; high standards of governance coupled with strong and effective risk management; an engaged multi-disciplined, diverse and entrepreneurial team; and making a positive and lasting contribution where we operate.

  1. Exploration & appraisal

    Execute high-impact E&A programmes.

    our key strengths and activities

    In its recent history, Tullow has achieved significant exploration success by opening commercial oil basins in Ghana, Uganda and Kenya. While recent focus has been on monetising these discoveries, our E&A team continues to build on our industry leading acreage position as we prepare for increased exploration activity in future years, subject to market conditions.

    Risk owner

  2. Development & production

    Safely deliver selective development projects. All major projects and production operations focus on increasing cash flow and commercial reserves.

    OUR KEY STRENGTHS AND ACTIVITIES

    Tullow has some of the best low-cost and high-quality oil assets in the world. The Group has a track record of delivery, with the Jubilee field developed in a record 40 months, and the TEN Project on its way to first oil on time and on budget by mid-2016. In 2017, the Group will target production of circa 100,000 bopd and significant upside from current and future developments for sustainable long-term cash flow.

    Risk owner

  3. Finance & portfolio management

    We continually manage financial and business assets to enhance our portfolio, replenish upside and support funding needs.

    Our Key strengths and activities

    Our business model is underpinned by access to diverse sources of funding and we adopt a prudent hedging strategy to mitigate oil price risk. The Group negotiated suitable debt capacity to fund the capital intensive period of the TEN development. However, the Board’s primary objective is to deleverage the Company organically through new production cash flow, but also through portfolio management opportunities.

    Risk owner

  4. Responsible operations

    Achieve safe and sustainable operations, minimise our adverse environmental and social impacts, and achieve the highest standards of health and safety.

    Our key strengths and activities

    Our ambition to be a top quartile oil and gas company on health and safety performance remains steadfast and we have reduced our Lost Time Incident Frequency (LTIF) for a second year in a row as we work towards this important goal. Managing our social impacts is critical for keeping our projects on track and on budget, and meeting our commitment to creating benefits for local communities.

    Risk owner

  5. Governance & risk management

    Achieve strong governance across all Tullow activities and maintain an appropriate balance between risk and reward.

    our key strengths and activities

    Tullow upholds the highest standards of business ethics and has a zero-tolerance approach to breaches of our Code of Ethical Conduct. Our day to-day business is governed by a set of policies and standards which form part of our Integrated Management System (IMS), covering the breadth of our business. Our policies and standards outline the Group’s values, set expectations and define controls against which we can assure ourselves that all activities, and associated risks, are being effectively managed.

    Risk owner

  6. Organisation & culture

    Build a strong unified team with excellent commercial, technical and financial skills and entrepreneurial flair.

    Our key strengths and activities

    The challenging market in 2015 was a catalyst to the restructuring, streamlining and strengthening of our organisation. This has resulted in greater efficiency and a culture focused on better cost management and more regular and rigorous review and challenge of performance. Following the restructuring our workforce is more empowered, with the Tullow team now clearer on their individual roles and how they contribute to delivering the Group strategy.

    Risk owner

  7. Shared prosperity

    Create sustainable, transparent and tangible benefits from the presence of oil in host countries.

    Our key strengths and activities

    Our brand and reputation have been built over almost 30 years of operating in Africa. We are long-term investors and seek to build strong relationships, based on mutual trust, with our host governments. We aim to leave a legacy of sustainable social and economic benefits in the countries where we operate.

    Risk owner

Our Strategy & Business Plan

See how we execute our strategy and details of our five year business plan objectives and risks.

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Our Investment Case

Tullow firmly believes its long term strategy will create significant value for shareholders.

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