A differentiated business strategy
At Tullow, we believe that reliable and adequate energy supplies are critical for sustaining human progress and ensuring political stability. We also believe that fossil fuels will remain a necessary part of the energy mix for some time, as migration to alternative energy sources will require substantial investment in new technologies and infrastructures over many years to come. In the meantime, Africa continues to suffer from extreme energy poverty, hindering economic growth and social advancement. If African nations are to prosper, they must benefit from their vast pool of natural resources. For this reason, our focus at Tullow is to help deliver prosperity in Africa and our other host nations through managing the exploration, development and production of oil and gas resources safely, efficiently, collaboratively and transparently. Our differentiated business strategy is informed by our long history of asset development in Africa, our passion to build a better future for our host nations and our environmental consciousness.
Our business strategy is built on the following themes:
Our focus:
Our business is underpinned by a deep and rich portfolio of discovered resources. For example, our Jubilee and TEN fields in Ghana provide significant opportunities for infill drilling, facilities expansion and new production from currently undeveloped parts of the fields as well as near field exploration. In Gabon and Côte d’Ivoire, we have identified a number of low-risk investment projects. In these areas we are leveraging our deep geoscience expertise to explore around our producing assets, where the proximity to existing infrastructure supports fast commercialisation of any discovered resources, resulting in high returns and rapid payback. We are also working to realise further growth through our discovered resources in Kenya. Our industry is going through a structural shift as many larger companies de-emphasise their oil and gas business, particularly in Africa. With a credible presence across Africa and a proven track record across exploration, development and production operations, we are well placed to deliver value through mergers and/or acquisitions.
At Tullow every barrel matters and every dollar counts. We operate within a strict cost framework and have capital controls to deliver returns for our investors and to fuel our growth plans. At the same time, we continue to strengthen our balance sheet, reducing net debt through the generation of material free cash flow. In 2022, our cash gearing (net debt to EBITDAX) reduced to 1.3 times, a material acceleration of our deleveraging trajectory which brings confidence that our investments in high-return opportunities, along with cost and capital efficiency focus, are delivering positive results.
We focus on operational excellence in all aspects of our activities. We maximise the performance of our assets, leveraging our engineering, technical and subsurface geoscience expertise to design efficient systems and processes while ensuring timely equipment replacement and maintenance to deliver safe, reliable and environmentally responsible production performance. We continuously monitor our workforce requirements to ensure we have the right levels of staff and provide training to ensure that we have the right skills in place to operate our assets dependably.
Our way:
When our business succeeds, our host nations benefit. This goes beyond augmenting national revenues from oil and gas; it means engaging, community by community, to understand local needs and support social advancement in meaningful ways. We encourage our communities to speak openly with us on matters of importance to them, while investing in social development in multiple ways. Equally, we operate with environmental consciousness to minimise the impact of our activities on climate change and the natural environment. Tullow benefits through a collaborative and capable supply chain and employees who enjoy positive relationships and a respected standing in our communities.
Tullow fosters an open team culture in an empowering workplace in which people are confident and comfortable to engage, contribute and speak openly about any aspect of what we do or how we work. As an inclusive organisation, we promote respect, diversity, equality and transparency, underpinned by strong human resources management. We invest in training to enable our people to realise opportunities for professional advancement. Empowering our workforce is a strategic driver of our success.