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.

Governance

Tullow meeting with local farmers association

At the beginning of 2010 we committed to reviewing and assessing the external initiatives to which Tullow could sign up. We have continued to debate, both publicly and privately, the relative merits of these general sustainability initiatives, disclosure initiatives, socially responsible investment (SRI) indices as well as industry and issue-specific initiatives.

This is an ongoing discussion in the context of a set of key external drivers that influence our decision-making. These include:

  • The rapidly growing transparency agenda, particularly of governments and companies;
  • An increased focus on corruption due to the importance of emerging markets and important legislative developments such as the UK Bribery Act;
  • The growing links between sustainability initiatives; and
  • The importance of addressing what is of most concern to our stakeholders, at both national and international levels.

In May 2011, Tullow formally became a corporate supporter of the Extractive Industries Transparency Initiative (EITI), as we believe it is aligned with our positions on transparency, sustainability and anti-corruption and our overarching goal of creating shared prosperity in the countries in which we operate.

2010 celebration ceremony in Ghana

Most commonly, petroleum agreements (or production sharing agreements) between a company and a host government remain confidential at the request of the host government for commercial reasons. We respect the wishes of our host governments, but take the position that should a government wish to make these agreements public, we would fully support them in doing so.

We published our petroleum agreements for the Deep Water Tano Contract Area and the West Cape Three Points Contract Area in May 2011, at the request of, and with the approval of, the Government of Ghana. They can be found on our dedicated Tullow Oil Ghana website.

Stakeholder engagement

Tullow engineers on site in hard hats talking to each other

We are held to account daily. As a public company, Tullow is subject to scrutiny from a wide range of stakeholders and our operations are subject to the laws of our host countries. The Tullow way of doing business has always been to be a safe operator and a good neighbour, and we commit to this publicly. Our commitment extends to transparency and accountability in all our dealings, and we welcome interest in and reviews of our operations. We also value the opportunity to engage with external stakeholders on ways in which Tullow can help to ensure that natural resources create shared prosperity.

Ghanaians in traditional dress sitting under a canopy

We have an ongoing programme of public engagement to ensure as many people as possible understand the Jubilee project and what it can and cannot offer. We have met with local communities, policy makers, traditional leaders, media and professional associations. This programme is being extended to include district assemblies, legislators and religious groups.

Tullow Uganda engages regularly, on both a formal and informal basis, with government departments such as the Petroleum Exploration and Production Department (PEPD). As a member of the Chamber of Mines and Petroleum we have presented an outline of Tullow's activities in Uganda to the Parliamentary Natural Resources Committee on oil development in Uganda. We also present regularly at Civil Society Forums, such as the launch of the new International Alert programme. These presentations are typically attended by MPs from all parties, and civil servants, who have the opportunity hear from us and also listen to the public debate.

Issue raised at oil and gas course, Hoima, Uganda

We have ongoing contact with regulators in every country in which we operate. Such engagements span the full oil life cycle from entering a new country through to licence awards to rehabilitation after exploration ceases. These will also extend to rehabilitation after production ceases in countries where we move to the production phase. We are striving to improve the effectiveness of our engagements with a wide range of stakeholders and in 2011 we will roll out an enhanced approach to external stakeholder engagement designed to address this. Our approach will be based on feedback from our 2011 Global Perceptions Audit which included opinion from government and regulators in all of our major countries of operation.

Issue raised in multi-stakeholder forum.

Tullow conducts an Environmental and Social Impact Assessment (ESIA) for every project. As part of this process, all stakeholders are made aware of the environmental and social impacts of our operations - this is the basis of meaningful consultation. The ESIAs are preceded and followed by regular community consultation and discussions that are orgainsed from the very beginning of our activities in-country. These aim to explain our plans as each project progresses, to solicit input from communities and to allow grievances to be aired. An example of this is Tullow Ghana's Community Consultation and Disclosure Programme or the Jubilee exhibition touring each region in Ghana to explain Ghana's oil projects to the general public.

Issue raised in multi-stakeholder forum.

Tullow's operations are mainly located in areas which lack basic amenities and expectations of what the company can provide in terms of health, education and employment are often very high. Effective engagement is key to managing these expectations and we work to address them on a local basis through community involvement and feedback on our social enterprise projects (for example through Tullow Ghana's Community Consultation and Disclosure Programme) and through regular engagements through our community liaison officers. On a wider basis we engage regularly with government and civil society to give an overview of our operations and to explain their scope. Additional initiatives, such as publishing our payments to the Government of Ghana and publishing our Ghanaian Petroleum Agreements can help to create a realistic picture of revenues from oil and gas production and what they might contribute to the economy.

We have worked hard to take a more strategic approach to social enterprise investment and to reflect the need for education and capacity building and opportunities for local businesses to enter our supply chain. As we formalise this approach, which is based on the feedback of stakeholders from communities through to governments, we hope that its relevance and clear focus will enhance stakeholder understanding of what Tullow can achieve in each country. However, as our operations are very often located beside remote communities lacking basic ameneties, we will still earmark a certain percentage of our budget for community and local projects that serve community health, education, environment and enterprise needs.

Issue raised in multi-stakeholder forum and by executive team/senior management.

Local content

Tullow Oil Uganda staff picture

We are keenly aware that increased revenue from oil and gas production does not always lead to investment in education and infrastructure that supports a diverse economy for the longer term. That's why all of our Social Enterprise projects are focused on building an environment in which entrepreneurs will flourish. This means working to support a diversified economy by investing in education, developing small-to-medium enterprises (both within and outside our supply chain) and helping to create a skilled workforce.

As part of our registration and invitation to tender process, all potential contractors are required to provide us with information about their company, such as the names of parent companies. This helps us to investigate further and to understand the 'local' nature of each company. In addition to this, and because of the relative ease of registering as a national company, we also ask for proof of company's commitment to employing local nationals, the percentage of local nationals in the company's workforce and whether the company has a national content policy. Delivery against this commitment is monitored throughout the duration of the contract.

Issue raised by executive team/senior management.

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.

Click on the Plus icon buttons for regional information

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.

Related links

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.

Related links

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.

Related links

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).

Related links

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).

Related links

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.

Related links

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.

Related links

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.

Related links

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.

Related links

Social performance

Two women sitting in front of a computer

14 Ghana National Petroleum Corporation employees were seconded to Tullow during 2009/10 and participated in a diverse range of training. The majority have now completed Tullow-sponsored Masters of Science degrees at leading UK universities. We also trained four production technicians who have now returned to Ghana to join the Tullow team in Accra. Our commitment is to have over 90% Ghanaian employees at our operations in Ghana and we have already achieved over 85%. In 2010 we are undertook a strategic review of vocational skills available in Ghana as a basis for planning additional capacity building activities.

Tullow Oil oil & gas scholarship winners 2010/2011

By the end of 2010 we employed 131 Ugandans in our operations. We are working with the government and the Ugandan Petroleum Institute to develop technical skills. In 2010 we welcomed our first Ugandan secondee to Tullow London. Through our social investment programme we sponsor education initiatives at a primary and secondary level and we plan to support tertiary education going forward. Education and training are fundamental to developing skills and building capacity directly or indirectly for the oil and gas sector in Uganda.

Related links

Two men listening intently to a man standing and talking to them

In recruiting people we look for team players and assess how aligned individuals are with our values and ethics. This gives us a good head start and we follow up post-recruitment with clear induction procedures. There is a range of HR processes and policies that supports quick assimilation along with uniform performance management. We are ever mindful of the need for two-way dialogue and our annual global employee and contractor survey helps us to understand the impact of our huge growth and where there is room for improvement.