Our stakeholder priorities

We are committed to open and transparent communication with all our stakeholders. This section explores issues raised by our stakeholders, through a series of targeted engagements, that relate to our business.

Environment, health and safety

Our work brings many important environmental challenges. Our entrepreneurial approach to finding oil can take us to regions that are internationally recognised areas of sensitivity and biodiversity. Many are isolated and remote and are recognised for their outstanding natural beauty.

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An oil rig in the Southern North Sea

Shallow waters

Southern North Sea: In the shallow water environments of the southern North Sea, water depths are at most 50 metres and there are many sand banks. The most shallow area is a sand bank called the Dogger Bank.

Rocky African Atlantic coast line

Cliffs, dunes and mangroves

Drier African Atlantic coasts: The coasts of Mauritania, Senegal and Namibia are made up of diverse environments, with rocky cliffs, beaches and dune systems, sea grass prairies and dense mangrove forests.

Ghanaian tropical rainforest

Tropical rainforests

Tropical rainforests of West Africa: Ghana is home to some 1,185 known species of amphibians, birds, mammals and reptiles. 0.8% are endemic, meaning they exist in no other country, while 3% are threatened.

Beach in the Gulf of Guinea

Gulf of Guinea

Gulf of Guinea: Stretches from the coast of Guinea Bissau to Angola. An area of huge biodiversity it also serves as a very important migration route, feeding ground and nesting site for five of the eight world marine turtles.

Cliff in the Great Rift Valley

Great Rift Valley

Great Rift Valley (Kenya, Uganda, Ethiopia and Tanzania): Mountains and deep valleys; freshwater lakes; national parks and internationally protected areas; site of human evolution discoveries, the seat of mankind.

Madagascarian lemur

Savannahs

Savannahs of inland Madagascar: The island is isolated from the rest of the world, resulting in tremendous biodiversity and many endemic species.

Rice paddy field

Floodplain ecosystems

Coastal Bangladesh: A densely populated area with floodplain ecosystems and agriculture in a low-lying riverine plain of the Meghna river. The river is part of the Ganges delta system that drains into the Bay of Bengal.

Men working in a field with equipment

On entry to a country we undertake an early assessment of socio-environmental issues using rapid assessment approaches and geographical information system (GIS) techniques. This is followed by scoping assessments and rigorous project Environmental Social Impact Assessments (ESIAs), with consultation with local communities and other stakeholders.

Using this approach we are then able to develop environmental management plans and monitoring programmes to ensure we operate responsibly. From the beginning of a project through to decommissioning, these document what we are committed to deliver and help to create a sense of local engagement and ownership throughout the life cycle of the project.

In addition, the launch of 'toes' (Tullow Oil Environmental Standards) in 2009 set an exciting direction for how we see environmental management in the company. It establishes a framework within which we can build on our key environmental management philosophies of biodiversity, climate change, resource management, stakeholder engagement, and monitoring and evaluation. As with all new processes, it continues to evolve and during 2011 we will develop these standards further.

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Tullow Oil Contractor Safety Forum attendees

In common with others in the oil and gas industry, we responded in depth to the Macondo well incident in the Gulf of Mexico to ensure that the appropriate lessons were learned and any improvements that are required are addressed.

Please see our special feature on operating in deepwater from our Corporate Responsibility Report 2010 for a fuller discussion of this issue.

Tropical bird sitting on a branch

There are a number of protected areas in the exploration blocks in which Tullow has interests, including an important National Park in Blocks 1 and 2, Uganda - Murchison Falls National Park. Blocks 2 and 3 contain many protected areas including the Bugongo and Bugoma Forest Reserves.

These sensitive and highly valued areas present unique challenges in minimising the impact that operations have on wildlife, tourism, fisheries and cultural land use. In addition, we are subject to Ugandan law, which contains environmental safeguards and has the power to issue penalties for any damage caused.

We are committed to applying the highest standards of environmental protection and to using our global experience to ensure we minimise or eliminate our impacts.

This year we are developing a strategy for operating in such sensitive areas which should provide the framework for all our operational activities in protected areas across our portfolio.

A ship flaring while out at sea

All flaring activities, whether onshore or offshore, are an integral part of environmental and social impact assessments (ESIAs) submitted to national regulators. Flaring activities are also regulated by our Environmental Management Plans which are produced using the learnings from ESIAs. These documents inform the development of detailed arrangements for each operation outlining the mitigation, monitoring and management of all our environmental risks. This will involve tackling challenges in both gas flaring and venting reduction, to improve energy efficiency and contribute to climate change mitigation. Where we have a licence interest but are not the operator, we seek to engage with our partners to influence minimise flaring and other environmental risks in the course of normal operations.

The long-term plan for our Jubilee operation offshore Ghana is that there will be no continuous flaring of hydrocarbon gases during normal operations. There will only be a pilot light so that the flare will be available in the event of an emergency shutdown.

In the short-term, it will be necessary for the Jubilee operation to flare an amount of associated gas in excess of the original estimates in the project’s final ESIA. This will occur as we work towards re-injecting all associated gas into the oil reservoir, first going through a period of securing system performance and stability. We are in regular communication with the Ghanaian Environmental Protection Agency on this subject.

Tullow has a comprehensive oil spill response plan in place for its on-shore operations in the Lake Albert Basin. The possibility of drilling from positions on the lake exists, but any such development is years away. Should we move towards this, Tullow would be required by the Ugandan authorities to develop (and implement) a comprehensive emergency response plan to fully address the risk of oil spills on the lake. This plan would work within the strategy of Uganda's National Environmental Management Authority (NEMA), which is directly responsible for ensuring that any plans developed are workable.

All water abstraction processes must confirm to the relevant Ugandan laws and regulations and must receive the approval of the Ugandan authorities. Any water abstraction would be conducted under a permit and would be regulated by the Directorate of Water Resources Management.

Issue raised at oil and gas course, Hoima, Uganda.

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Tullow is committed to the highest standards of environmental protection and is audited publicly for its Environment, Health and Safety (EHS) performance. All of our development activities are subject to Environmental and Social Impact Assessments (ESIAs), on the basis of which we identify mitigation measures for any possible impacts. The ESIAs are fully participatory, right from grassroots level, and all stakeholders have a chance to input their thoughts and ideas on the best way to proceed. The National Environmental Management Authority (NEMA) and the Petroleum Exploration and Production Department (PEPD) must approve our plans before we proceed, but they also monitor implementation to ensure that we are fully compliant with their requirements.

Issue raised at oil and gas course, Hoima, Uganda.

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We are working closely with the Ghanaian Fisheries Agency and fishing community to alleviate any concerns and issues around the presence of the Floating Production Storage Offloading vessel (FPSO). This includes both direct and indirect assistance ranging from grievance and compensation procedures to assistance with locating alternative fishing grounds. Tullow Ghana is also working to educate the fishermen about potential safety issues caused by fishing close to our operations.

Issue raised in Ghana Community Consultation & Disclosure Programme (CCDP).

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Tullow places a premium on Environment, Health and Safety (EHS). We have reviewed and developed contingency plans to deal with major incidents such as oil spills and other emergency scenarios. Over the past three years, we have undertaken various simulation exercises to test our readiness in event of an emergency. We have the capacity in-house to deal with Tier One and Tier Two incidents. For Tier Three incidents Tullow would be supported by recognised international bodies and national agencies charged with such responsibility.

As well as oil spill equipment on the Floating Production Storage Offloading vessel (FPSO) we have a comprehensive Oil Spill Response plan, with international specialist companies ready to immediately mobilise and supply additional resources, equipment, personnel, and expertise as required. We have conducted a full operational study to identify all the resources that are available to us, and that could be mobilised, for varying levels of oil spill in the event of an accident. The findings of this study are reflected in the Oil Spill Response plan.

Issue raised in Ghana Community Consultation & Disclosure Programme (CCDP).

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We have a strong track record in Uganda and fully understand and appreciate the ecological and environmental sensitivity of the areas in which we operate. Tullow Oil Uganda enjoys a constructive working relationship with NEMA and we regularly work together to address environmental challenges in the sector. It is by so doing that long-term solutions with local input can be found to such environmental challenges. In March 2010, NEMA stated publicly that they were not satisfied with parts of our work and we have been working hard, alongside NEMA, to address the criticisms made. The main points have in effect been addressed now and we continue to work closely with NEMA to deliver a solution around waste management.

Issue raised by SRI Managers.

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Compensation is linked to the delivery of Key Performance Indicators (KPIs) which are set annually and are guided by a wide range of factors including EHS, Total Shareholder Return, Exploration and Production performance. Any adverse management of Environment, Social and Governance issues would be fully reflected by a reduction in the annual KPI performance score, which is directly linked to bonus payments for all employees.

Issue raised by SRI Managers.

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Contractor management has been identified as a significant risk to Tullow and an analysis of injuries and accidents in recent years shows that most of these are contractor related. In 2011 the company's Environment, Health and Safety (EHS) team is working with the Supply Chain department to conduct EHS evaluations of contractors with the aim of reducing EHS risks associated with contracts. This is in addition to our stated 2011 objective of formally implementing our new set of Tullow safety rules across the organisation.

Issue raised by SRI Managers.

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Holding meetings such as the multi-stakeholder forum and regular engagement with SRI managers and NGOs is one way in which we are trying to improve our understanding of the external environment and large scale global changes.

At the moment it is most practical for Tullow to focus on the environmental quality of our own operations, including a far broader range of environmental issues than at this time last year. We are now focusing on water management, energy efficiency and our carbon footprint, entry into protected areas and loss of containment. For example, to date we have not focused on water resources but the increase in our activity in Uganda and our entry into other countries such as Kenya and Ethiopia means that water resource efficiency is becoming more material for us.

The current size and nature of our business makes it unlikely that we would undertake any type of R&D like larger players. It is more beneficial for us to focus on getting our processes right for the long term. We have been holding internal discussions on how to set up new reporting regimes and standards on climate change as a result of the multi-stakeholder forum. We aren’t sure that an end-use based strategy is practical for Tullow at the moment however, given the broader areas that we think we need to look at, for example uncontrolled releases, entry to protected areas, operational carbon footprint/energy efficiency and water management. These form part of our EHS KPIs for this year.

Issue raised in multi-stakeholder forum.

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