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Glossary
A
B
- bll
-
Barrel
- bcf
-
Billion cubic feet
- boe
-
Barrels of oil equivalent
- boepd
-
Barrels of oil equivalent per day
- bopd
-
Barrels of oil per day
C
- CMS
-
Caister Murdoch System
- CMS III
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A group development of five satellite fields linked to CMS
- CR
-
Corporate Responsibility
- CSO
-
Civil Society Organisation
- CNOOC
-
China National Offshore Oil Corporation
D
- DLT
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Development Leadership Team
- DoA
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Delegation of Authority
- DRC
-
Democratic Republic of Congo
- DSBP
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Deferred Share Bonus Plan
E
- EA
-
Exploration Area
- E&E
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Exploration and evaluation
- E&A
-
Exploration and Appraisal
- E&P
-
Exploration and Production
- EBITDA
-
Earnings Before Interest, Tax, Depreciation and Amortisation
- EHS
-
Environment, Health and Safety
- EMS
-
Environmental Management System
- ERC
-
Energy Resource Consultants
- ESOS
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Executive Share Option Scheme
F
- FEED
-
Front End Engineering and Design
- FPSO
-
Floating Production Storage and Offloading vessel
- FRC
-
Financial Reporting Council
- FRS
-
Financial Reporting Standard
- FTG
-
Full Tensor Gravity Gradiometry
- FTSE 100
-
Equity index whose constituents are the 100 largest UK listed companies by market capitalisation
- FVTPL
-
Fair Value Through Profit or Loss
G
- GELT
-
Global Exploration Leadership Team
- GNPC
-
Ghana National Petroleum Corporation
- GoU
-
Government of Uganda
- Group
-
Company and its subsidiary undertakings
H
I
- IAS
-
International Accounting Standard
- IASB
-
International Accounting Standards Board
- IFRIC
-
International Financial Reporting Interpretations Committee
- IFRS
-
International Financial Reporting Standards
- IMS
-
Information Management System
- ISO
-
International Organization for Standardization
K
L
- LIBOR
-
London Interbank Offered Rate
- LTI
-
Lost Time Incident
- LTIFR
-
LTI Frequency Rate measured in LTIs per million hours worked
M
- mmbbl
-
Million barrels
- mmbo
-
Million barrels of oil
- mmboe
-
Million barrels of oil equivalent
- mmscfd
-
Million standard cubic feet per day
- MoU
-
Memorandum of Understanding
- MTM
-
Mark To Market
N
- NGO
-
Non-Governmental Organisation
O
- OR&A
-
Operational Readiness and Assurance
P
- p
-
pence
- P10
-
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
-
Production and Development
- PAYE
-
Pay As You Earn
- PRT
-
Petroleum Revenue Tax
- PSC
-
Production Sharing Contract
- PSP
-
Performance Share Plan
S
- SCT
-
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
-
Value Added Tax
W
-
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Executive Directors’ remuneration
Base salary
Base salaries are reviewed annually with effect from 1 January, and are set primarily by reference to external benchmarking data for other UK listed companies of similar market capitalisation and overseas complexity with practice in the Oil & Gas sector also taken into account.
As highlighted earlier, the Committee has undertaken a review of the Company’s remuneration arrangements for 2011. On completion of the consultation with major shareholders the Committee will be in a position to approve Executive Director 2011 salaries. Full disclosure will be provided in the 2011 Directors’ Remuneration Report (DRR).
When setting Executive Director salaries, the Committee takes into account pay and conditions across the rest of the Group.
Annual bonus
Each Executive Director is entitled to participate in the Executive Annual Bonus Scheme in respect of each financial year of the Company.
2010 Annual Bonus Scheme
The key features of the Annual Bonus Scheme for the Executive Directors for 2010 were as follows:
- The maximum annual bonus potential for the Executive Directors was 200% of salary;
- For meeting target performance, a bonus of 80% of salary is payable (40% of the maximum);
- Any bonus earned in excess of 75% of salary is paid in shares and deferred for three years under the Deferred Share Bonus Plan (DSBP);
- Bonuses in 2010 were based:
- 25% on Tullow’s TSR performance relative to the same Oil & Gas group as is used to measure performance for the PSP awards made in 2010 – no bonus is paid unless median performance is delivered, with the full bonus for upper quartile performance;
- 25% on growth in absolute TSR, with a full bonus payable if Tullow’s TSR grows by 15% over the year;
- 50% on certain corporate key performance indicators (KPIs) comprising Health & Safety, Operational & Financial and project-specific targets.
The Committee also has broad discretion before finalising any award level on the above parameters to take into account other factors and circumstances reflecting the general financial condition and the performance of the Group as it considers appropriate.
2010 was an exceptional year for the Company. Tullow achieved exceptional exploration success and together with our partners delivered First Oil on schedule in Ghana by year-end. In Uganda, while negotiations with the Government have taken longer than expected, they are progressing well. We also expanded our portfolio and restructured our finances to position the Group to deliver further growth. In recognition of the significant achievements made during 2010, the Committee awarded Executive Directors in 2010 a bonus of 57.6% of maximum (i.e. 115.2% of salary). Bonus in excess of 75% of salary is paid in shares, and deferred for three years under the DSBP.
2011 Annual Bonus Scheme
As highlighted earlier, the Committee has undertaken a review of the Company’s remuneration arrangements for 2011 and is expecting to make changes to the annual bonus structure following consultation with major shareholders. Full disclosure will be provided in the 2011 DRR.
Pension and other benefits
Each Executive Director is entitled to receive a payment of 25% of his base salary into the Company’s group personal pension plan or his private pension arrangements. Each Executive Director is entitled to 30 days’ annual leave, permanent health insurance, private medical insurance and life assurance benefits. The Group also reimburses the Executive Directors in respect of all expenses reasonably incurred by them in the proper performance of their duties.
