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Glossary
A
B
- bll
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Barrel
- bcf
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Billion cubic feet
- boe
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Barrels of oil equivalent
- boepd
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Barrels of oil equivalent per day
- bopd
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Barrels of oil per day
C
- CMS
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Caister Murdoch System
- CMS III
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A group development of five satellite fields linked to CMS
- CR
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Corporate Responsibility
- CSO
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Civil Society Organisation
- CNOOC
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China National Offshore Oil Corporation
D
- DLT
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Development Leadership Team
- DoA
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Delegation of Authority
- DRC
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Democratic Republic of Congo
- DSBP
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Deferred Share Bonus Plan
E
- EA
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Exploration Area
- E&E
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Exploration and evaluation
- E&A
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Exploration and Appraisal
- E&P
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Exploration and Production
- EBITDA
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Earnings Before Interest, Tax, Depreciation and Amortisation
- EHS
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Environment, Health and Safety
- EMS
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Environmental Management System
- ERC
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Energy Resource Consultants
- ESOS
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Executive Share Option Scheme
F
- FEED
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Front End Engineering and Design
- FPSO
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Floating Production Storage and Offloading vessel
- FRC
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Financial Reporting Council
- FRS
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Financial Reporting Standard
- FTG
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Full Tensor Gravity Gradiometry
- FTSE 100
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Equity index whose constituents are the 100 largest UK listed companies by market capitalisation
- FVTPL
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Fair Value Through Profit or Loss
G
- GELT
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Global Exploration Leadership Team
- GNPC
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Ghana National Petroleum Corporation
- GoU
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Government of Uganda
- Group
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Company and its subsidiary undertakings
H
I
- IAS
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International Accounting Standard
- IASB
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International Accounting Standards Board
- IFRIC
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International Financial Reporting Interpretations Committee
- IFRS
-
International Financial Reporting Standards
- IMS
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Information Management System
- ISO
-
International Organization for Standardization
K
L
- LIBOR
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London Interbank Offered Rate
- LTI
-
Lost Time Incident
- LTIFR
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LTI Frequency Rate measured in LTIs per million hours worked
M
- mmbbl
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Million barrels
- mmbo
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Million barrels of oil
- mmboe
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Million barrels of oil equivalent
- mmscfd
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Million standard cubic feet per day
- MoU
-
Memorandum of Understanding
- MTM
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Mark To Market
N
- NGO
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Non-Governmental Organisation
O
- OR&A
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Operational Readiness and Assurance
P
- p
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pence
- P10
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Reserves and/or resources estimates that have a 10 per cent probability of being met or exceeded
- P50
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Reserves and/or resources estimates that have a 50 per cent probability of being met or exceeded
- P&D
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Production and Development
- PAYE
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Pay As You Earn
- PRT
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Petroleum Revenue Tax
- PSC
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Production Sharing Contract
- PSP
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Performance Share Plan
S
- SCT
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Supplementary Corporation Tax
- SIP
-
Share Incentive Plan
- SMC
-
Senior Management Committee
- SPA
-
Sale and Purchase Agreement
- sq km
-
Square kilometres
- SRI
-
Socially Responsible Investment
T
U
- UK GAAP
-
UK Generally Accepted Accounting Principles
V
- VAT
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Value Added Tax
W
-
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Protecting our business
Risk management is a dynamic and critical business function as it is important to help achieve long-term shareholder value and protect our business, people, assets, capital and reputation.
Risk management is an essential element of how we run our business and it is a Board level responsibility. Like many businesses we cannot function properly unless we continuously identify and manage those risks and opportunities that could affect Tullow and the achievement of our business plans and strategic objectives. Our approach is aimed at early identification of key risks, reducing or removing those risks and/or responding quickly and effectively when a risk crystallises. In each instance, where possible, we seek to mitigate risks in order to reduce risk to an acceptable level.
We have formal risk management processes in place at Tullow, with designated Executive Director responsibility for key risks. In each area of risk Executive Directors are supported by members of the senior management committee or senior managers with functional, business unit or in-country roles. Accountability for managing risk is assigned to individual managers and each employee is personally responsible for managing risk within the remit of their role.
We combine Board level assessment of risk with risk factors originating from and identified by the Group’s regional business units. These processes continue to evolve and develop each year, in line with Tullow’s growth.
Responding to changing risk
We operate in a dynamic environment where responding effectively to changing risks is key to our continued success. During 2010 we addressed emerging risks in the following ways:
- The Jubilee project team implemented an Operational Readiness and Assurance (OR&A) management plan to manage transition risks from the development to operational phase of the project and to demonstrate operational readiness assurance. This plan was split into six key areas including OR&A management, operations, EHS, cost, organisation, commissioning and start-up with a detailed breakdown of activity to ensure accountability for delivery. A series of assurance activities and reviews were delivered throughout the project phase and during the run up to First Oil and reported on through the Unit Operating report. This provided a seamless transition from the project phase to the operational phase. In addition, an integrated EHS plan was developed detailing all audits undertaken by the Ghana team and Modec;
- A Financial Risk Committee was established during the year with the objective of ensuring that the overall framework for financial risk management is comprehensive and responsive to changes in the business. The Committee is chaired by the Chief Financial Officer and comprises the General Manager Finance, Head of Corporate Planning, Head of Risk and Marketing, Group Internal Audit Manager, Group Tax Manager and Head of Supply Chain Management. Achievements during the year included:
- Development of a key financial risks register that is tracked and updated to ensure mitigating actions are being followed up in a timely way;
- Control of Well insurance review with limits being increased in the fourth quarter of 2010;
- Development of improved and integrated management reporting and planning processes that were subsequently delivered during 2010;
- Development and implementation of integrated supply chain and financial systems to support enhanced reporting; and
- Review and update of Group Delegation of Authority (DoA) to reflect new organisation structure and implementation of supply chain management processes and system.
- In response to the Macondo well blowout in the Gulf of Mexico we:
- Undertook a detailed audit of well control procedures and a physical audit of blowout preventor capabilities for our Ghana drilling operations in collaboration with key contractors;
- Implemented a new approach to assessing critical aspects and risk areas of the Group’s well programme, which has resulted in focusing resources to manage risks; and
- Reviewed and updated control of well insurance limits; and
- A Development Leadership Team (DLT) was established to oversee project development processes to improve assurance to Group management that good practice is being applied to all developments.
