Tullow Oil plc
Annual Report and Accounts 2023
throuh responsble
ol nd s development
Buldn
better future
2023 results
Group worn nterest producton
62,700 boepd
2022: 61,100 boepd
Opertn csh flow
1
$813m
2022: $972m
Adusted EBITDAX
1
$12bn
2022: $1.5bn
(Loss)/Proft fter tx
$(110)m
2022: $49m
Cptl nvestment
1
$380m
2022: $354m
Free csh flow
1
$170m
2022: $267m
Net debt
1
$16bn
2022: $1.9bn
Gern
1
14 tmes
2022: 1.3 times
Read more on pages to .
1. The Group uses certain performance measures that are not speciically deined under IFRS or other generally accepted accounting principles.
These alternative performance measures are explained on pages 189 and 190.
Cover: A student undertaking a laboratory experiment in one of the schools supported by Tullow under its Educate to Innovate STEM programme in
Ghana’s western region. This initiative has so far supported 6,000 students with teaching and mentorship in science and technology as they transit
intotertiaryeducation.
Strtec report
1 Evolving Tullow
2 Tullow at a glance
4 Chair’s statement
6 Chief Executive Oicer’s review
10 Investment case
11 Market overview
14 Our business model
16 Our strategy
20 Our KPIs
22 Our stakeholders
24 Section 172 statement
26 Sustainability review
38 Task Force on Climate-related Financial Disclosures (TCFD)
48 Risk management and principal risks
57 Viability statement
59 Financial review
65 Non-inancial and sustainability information statement
Corporte overnnce
68 Chair’s letter
70 Board of Directors
73 Board leadership and company purpose
76 Division of responsibilities
77 Composition, succession and evaluation
79 Nominations Committee report
82 Audit Committee report
87 Safety and Sustainability Committee report
89 Remuneration report
114 Directors’ report
118 Statement of Directors’ responsibilities
Fnncl sttements
120 Independent auditor’s report to the members of
TullowOil plc
130 Group inancial statements
179 Company inancial statements
Supplementr nformton
189 Alternative performance measures
191 Commercial reserves and contingent resources
summary (unaudited) working interest basis
192 Shareholder information
Evolvn Tullow
Durn 2023 Tullow contnued to evolve nto more
focused, effcent nd fnncll reslent busness
Frm foundtons hve been ld for the future nd
mterl step-up n csh flow enerton mrs
n mportnt nflecton pont nour busness pln
We believe the oil and gas industry can and will
contribute long-lasting economic and social beneits
indeveloping economies and our purpose is to
contribute to a better future through responsible
oil andgas development. In this Annual Report we
explain how weare working to do that by building
abetter business and enhancing our ability to create
value for our stakeholders.
Above: An early morning English Language session for young pupils in one of the 12 kindergarten schools built by Tullow to provide quality education
across anumber of ishing communities in Ghana. This project has beneited over 10,000 children in the last decade, providing them with a solid
foundation for education at the primary level.
Tullow Oil plc Annual Report and Accounts 2023 – 1
Financial statements
Supplementary information
Strategic report
Corporate governance
Tullow t lnce
To fulil our purpose we must implement our strategy effectively
andatalltimes adhere to our values.
Our purpose
To build a better future through responsible oil and gas development.
Our vlues
Am hh
• Have a growth mindset
andadapt to change.
• Seize every opportunity to
learn and improve.
• Work together to uncover
greater impact for our
business, stakeholders,
andthe communities we
work with.
Own t
• Take ownership and
empower others through
trust, clear expectations,
and open communication.
• Balance innovation with
structure and diligence.
• Deliver results with focus
andintention.
Be true
• Promote an inclusive and
fair environment where all
are supported, and every
voice and contribution
isrecognised.
• Act responsibly, with
safetyas afundamental,
non-negotiable aspect
of our work.
• Do what is right.
Our strte
We are working to create a resilient business which gives us full
lexibility to unlock value from our existing resources and take
advantage of organic and inorganic value-accretive opportunities.
We focus on
Opertonl excellence
Maximising asset
performance through
safe, eicient and
reliableoperations.
Cptl effcenc
Managing cost and capital
todeliver a robust balance
sheet with inancial lexibility.
Busness rowth
Developing discovered
resources, near-ield and
infrastructure-led exploration
and securing value-
accretiveopportunities.
Read more on pages to .
2 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Wht we do
Tullow is focused on unlocking value from oil and gas resources in Africa.
Our activities and business model are described on pages 14 and 15.
Our opertons
Our operations are centred on our West Africa producing assets in Ghana,
Gabon and Côte d’Ivoire. We also have a material discovered resource
base in Kenya.
Our people
Our people strive for excellence in
aninclusive and diverse environment.
We are fostering a culture of
continuous improvement and we are
committed to ensuring every
individual feels recognised, respected
and proud ofthe impact they make.
We emplo
399 people
1
Read more on page and pages and .
Resources at 31 December 2023
Jubilee
TEN
Gabon
Côte d’Ivoire
Kenya
Reserves at 31 December 2023
Jubilee
TEN
Gabon
Côte d’Ivoire
107
143
109
27
12
26
37
470
6
Net 2P Reserves
212
mmboe
Net 2C Resources
725
mmboe
1. As at 31 December 2023.
Tullow Oil plc Annual Report and Accounts 2023 – 3
Financial statements Supplementary informationStrategic report Corporate governance
Chr’s sttement
We are on track to create acapital
structure that will support future
growth and shareholder returns.
Phuthuma Nhleko
Chair
Performnce
I am very pleased to report that we have made good
progressacross the entire business during the year.
Despite an increasingly complex and diicult geopolitical
world, together with a challenging regulatory and
operating environment, we have advanced our strategy
and key objectives.
In July 2023 the Jubilee South East development came
on stream, broadly within budget and on time. Delivery of
this key milestone has increased production at the Jubilee
ield to around 100,000 bopd and transformed our cash
generation capabilities. I was delighted to be part of the
Jubilee South East ‘First Oil’ celebrations that took place in
September last year, and I was very pleased to welcome
the President of Ghana, Nana Akufo-Addo, onboard the
Jubilee FPSO to mark this momentous occasion. We are
grateful to the Government of Ghana for their support and
I also would like to thank and congratulate our Ghana team
for their excellent operational delivery.
The safety of our people and all those who work at or
visitour sites is paramount. During the year we recorded
astrong safety performance with a 0.2 recordable injury
rate and zero Tier 1 Losses of Primary Containment.
However, our overall safety performance was not as
good as 2022 and every incident is one too many. We
are committed to the highest safety standards and we
have redoubled our eorts to reinforce our safety culture
andpractices.
We have also strengthened our balance sheet. Net debt
reduced to $1.6 billion as at year end 2023 (2022: $1.9
billion) and, during the inal quarter of 2023, we entered
into a $400 million ive-year notes facility agreement with
Glencore. This loan, which is a powerful endorsement of
our strategy, together with the $800 million of free cash
low we expect to generate over 2023 to 2025, sets us well
on course tobecoming a resilient, low-debt business.
Free csh flow
1
$170m
2022: $267m
Net debt
1
$16bn
2022: $1.9bn
1. The Group uses certain performance measures that are not speciically deined under IFRS or other generally accepted accounting principles.
Thesealternative performance measures are explained on pages 189 and 190.
4 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Governnce
During the year, Mike Daly retired from the Board at the
AGM after nine years of service.
To replace Mike’s subsurface expertise on the Board,
we were delighted to welcome Rebecca Wiles as an
independent Non-Executive Director, following her 33-year
career at BP plc (BP). Rebecca brings signiicant emerging
market corporate experience and a wealth of commercial
and operational skills.
We were also pleased to welcome Roald Goethe as
an independent Non-Executive Director. Roald is a
highly experienced oil and gas executive with a strong
track record of buying, selling, inancing and building
businesses in Africa. Roald has spent his career at Traigura
Group, where he worked primarily in West Africa, and
Delaney Petroleum Ltd, a business he founded, trading
crude oil and petroleum products predominantly in West
Africa and the Middle East.
At the beginning of the year Richard Miller was conirmed
as Chief Financial Oicer (CFO), having served as
interim CFO since April 2022, and joined the Board as an
Executive Director.
I would like to take this opportunity to thank Mike for his
years of service and to welcome Rebecca, Roald and
Richard to the Board. Biographical information about each
Director is included on pages 70 and 71.
Our people
Our people are highly experienced and committed to our
purpose. They are playing a key role in Tullow’s evolution
and the Board recognises the importance of engaging with
them to understand their views and their valuable insights
about our business. During the year, Board members met
with employees on a number of occasions, including
during our annual strategy meeting in July and the Board’s
visit to Ghana in September. Our people have worked hard
and diligently to deliver the considerable progress made
during 2023. Tullow’s evolution is gaining momentum, and
I would like to thank every one of my colleagues for their
commitment, dedication and contribution.
Buldn better future
Our purpose is to build a better future through responsible
oil and gas development.
If African nations are to prosper they must have access to
aordable and reliable energy and must be able to beneit
from their vast pool of natural resources. During theyear
we have continued to work eectively with our host
country governments to achieve this, including in Ghana
where the Jubilee South East development was delivered
through collaboration with a number of local suppliers.
Further information about our social and economic
contribution in Ghana is set out on page 30.
We have also continued to progress our sustainability
strategy, including our Net Zero by 2030 plan (see pages
33 and 34).
Concluson
Tullow is evolving. Three years ago, we were a high-
cost exploration and production company with a
geographically diverse portfolio. Today we have a clear
strategy, a disciplined inancial approach, a stronger
balance sheet and a simpliied portfolio focused on Africa.
Based on this strengthened position and the material free
cash low, the Board looks to the future with conidence.
Phuthuma Nhleko
Chair
5 March 2024
Tullow Oil plc Annual Report and Accounts 2023 – 5
Financial statements Supplementary informationStrategic report Corporate governance
Chef Executve Offcer’s revew
Signiicant milestones have been
achieved during 2023. Tullow has
a strong and unique foundation
to create material value for our
stakeholders and we look to the
future with conidence.
Rahul Dhir
Chief Executive Oicer
Successful delver of busness pln
Soon after I joined Tullow in July 2020, we put in place
a plan to transform our business. This plan is achieving
targeted results and since the end of 2020 we have
generated over $1.1 billion of free cash low, reduced
net debt by over 30% and taken the business from peak
gearing of 3x to 1.4x net debt to EBITDAX. We have
achieved this despite our legacy hedge programme
resulting in non-recurring outlows of c.$600 million
between 2021 to 2023, which suppressed the true cash
low generation capacity of our business.
In 2023, Tullow continued to evolve and we now have a
strong and unique foundation to create material value.
Several signiicant milestones have been achieved,
including the start-up of Jubilee South East which
delivered material production growth from our core
operated ield. We generated $170 million of free cash
low, ahead of expectations, and reduced our net debt by
over $250 million, despite a lower realised oil price in 2023
compared to 2022 that drove a year-on-year reduction in
revenue (2023: $1,634 million; 2022: $1,783 million). We
also demonstrated our ability to access capital through the
$400 million debt facility agreement with Glencore.
Our strategy is underpinned by a relentless focus on three
core areas – operational excellence, capital eiciency
and business growth. Through continued execution of
this strategy, we are embedding a performance culture,
retaining our discipline, and establishing a growth outlook.
Importantly, we are now a highly cash generative business
and on track to deliver our target of c.$800 million free
cash low over the 2023 to 2025 period.
Sustnblt nd shred prospert
Tullow is committed to building a better future through
responsible oil and gas development. We believe Africa
has the potential to play a growing role in the global
energy mix and we actively partner with our host nations
to develop their resources in a low-cost, environmentally
and socially responsible manner. We are encouraged by
the commitment to a ‘just and equitable’ energy transition
articulated in the COP28 Agreement. This acknowledges
Africa’s minimal contribution to global emissions and
recognises the right of African developing nations to
beneit from the development of their natural resources.
Our Shared Prosperity strategy creates economic
opportunities for those who need it most. In 2023, we
accelerated our impact through partnerships, supporting
more than 10,000 students and hundreds of businesses
across our countries of operation. We are also driving local
content through increased engagement, support and
training of our local supplier base.
We have made tangible progress on our pathway to Net
Zero by 2030. In 2023, several process improvement
modiications were completed at the Jubilee and TEN
FPSOs, keeping us on track to reach our target to eliminate
routine laring by 2025. To address the hard-to-abate
residual emissions from our assets, we are taking a
hands-on approach to progress a nature-based solution
Group working interest
production (kboepd) FY 2023
FY 2024
Guidance
Ghana oil 42.6 48
Jubilee oil
32.5 39
TEN oil
10.1 9
Non-operated portfolio oil 13.2 11
Gabon oil
12.2 10
Côte d’Ivoire oil
1.0 1
Gas production 6.9 7
Group 62.7 62–68
6 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
in partnership with the Ghana Forestry Commission and
expect to make a Final Investment Decision in 2024. The
project delivers on our 2030 Net Zero ambition while also
advancing Ghana’s national climate goals and aligning
with our Shared Prosperity agenda.
Opertonl performnce
In 2023, full year working interest production averaged
62.7 kboepd, including 6.9 kboepd of gas. Group working
interest production is expected to increase year-on-
year and our guidance range for 2024 is 62-68 kboepd,
including c.7 kboepd of gas production.
Ghn
The start-up of production from the Jubilee South East
project in July was a landmark event, marking a step
change in the ield’s production with average daily rates
c.30% higher in the second half of the year compared to
the irst half with rates reaching levels over 100 kbopd.
Gross oil production from the Jubilee ield averaged
83.4 kbopd (32.5 kbopd net) in 2023. This was below our
expectations, primarily due to water injection reliability
challenges and Jubilee South East starting up slightly later
than planned. The water injection reliability issues were
resolved in the fourth quarter of 2023, with upgraded
capacity delivering record water injection rates and
observable pressure response in the reservoirs which
will beneit 2024 production and beyond. Jubilee gas
processing was also upgraded in 2023 and as a result,
we have increased capacity to produce oil from wells
with higher associated gas content. These important
facility upgrades put us in a strong position to maintain
production in the range of 90-110 kbopd towards the end
of the decade.
Gross oil production from the TEN ields averaged 18.4
kbopd (net: 10.1 kbopd) during 2023, with improved
pressure support from existing injection wells resulting in
better management of decline. A planned shutdown was
carried out in July and work was completed to improve
asset integrity, enhance production through improved
liquid recovery from gas and reduce laring. Flaring
from TEN reduced by over 50% post the shutdown, an
important step forward in our target to eliminate routine
laring by 2025.
Contrbutn to Afrc’s ener future
Prtnern wth
host ntons
We believe Africa
has potential to play
a growing role in
the energy supply
mix and the right
to beneit from its
natural resources.
Shrn
prospert
We deliver
economic and
social beneits
that boost local
economies and
support current and
future generations.
Supportn ust
trnston
We are on track to
reduce emissions
while meeting
energy demand
and helping reverse
energy poverty.
Hrnessn
opportuntes
We are a responsible
developer and
well placed to
be a steward of
Africa’s material
resource base.
40%
of global new
gas discoveries
in the last
decade were
in Africa
1
$6 bllon
revenue to
Government
of Ghana
from 2010 to
2022 from
Jubilee and TEN
Our Net
Zero
by 2030
strategy
>30 bllon
bbls
proven
resources
inWest Africa
2
1. Source: www.spglobal.com/commodityinsights/en/market-insights/latest-news/oil/110821-africa-embraces-gas-in-energy-
transition-debate-amid-fears-of-secure-supplies.
2. Source: www.welligence.com. Welligence proven resources include producing and undeveloped resources.
Tullow Oil plc Annual Report and Accounts 2023 – 7
Financial statements Supplementary informationStrategic report Corporate governance
Chef Executve Offcer’s sttement contnued
initially valued at $0.50/mmbtu, was amended in July 2023
to a price of $2.90/mmbtu and subsequently increased in
November to $2.95/mmbtu, after applying year-on-year
inlation indexation. This agreement represents a revenue
stream for Tullow of c.$4 million per month.
During the year, discussions continued with the Government
of Ghana on the amended TEN Plan of Development (PoD) and
the long-term gas sales agreement. We remain committed to
reaching agreement and progressing a number of identiied
projects at TEN in addition to commercialising the material gas
resource base.
In February, 2023 we announced that Tullow Ghana Limited
(TGL) had iled requests for arbitration with the International
Chamber of Commerce in London in respect of two disputed
tax assessments received from the Ghana Revenue Authority
(GRA). The assessments relate to the disallowance of loan
interest deductions for the iscal years 2010 – 2020 and
proceeds received by Tullow Oil plc during the inancial
years 2016 to 2019 under the Group’s corporate Business
Interruption Insurance policy.
Tullow had also previously iled a request for arbitration
in respect of a separate assessment for Branch Proits
Remittance Tax of $320 million in 2021. A hearing in
respect of this dispute took place in October 2023 with an
outcome expected this year.
We believe that resolution through international arbitration
will bring certainty, which is in the best interest of all
stakeholders. In the meantime, we continue to engage with
the Government of Ghana, including the GRA, with the aim
of resolving these disputes on a mutually acceptable basis.
Opertonl performnce contnued
Ghn contnued
During the year, our operational performance continued to
strengthen and average uptime across our Ghana FPSOs
remained high at 96%. The drilling team also had excellent
performance with seven wells (four Jubilee producers and
three Jubilee water injectors) brought onstream during
2023. The cost of drilling wells in 2023 was on average
around 20% lower and c.38 days faster than the previous
campaign in 2018-2020, achieving top-quartile industry
performance. These cost savings and eiciencies have
been driven by reducing non-productive time, improved
well design and more eective contracting.
Five new Jubilee wells (three producers and two water
injectors) are scheduled to come onstream in 2024. The
irst water injector was brought on stream in January, and
two producers were brought on stream in February, with
gross production currently averaging over 100 kbopd. We
expect to complete the current drilling programme around
the middle of the year, approximately six months ahead of
schedule. We then intend to take a drilling break in Ghana
with plans to resume drilling in 2025. During this time, we
will optimise our plans for the next phase of investment in
Ghana while the existing well stock and upgraded water
injection capacity sustains production at Jubilee and TEN
decline continues to be eectively minimised through
improved pressure support.
Net gas production in Ghana averaged 6.4 kboepd in 2023
and marked the irst commercialisation of associated gas
from the Jubilee ield. The interim Gas Sales Agreement,
Evolvn Tullow
2020–2022
Embeddn our new
pproch
2023
‘Inflecton pont’
2024–2025
Reslent, csh-enertve
busness
• Strategic shift.
• Capital discipline.
• Cost reductions.
• Operational transformation.
• Higher production following
Jubilee South East start-up.
• Material step up in free cash
low.
• Addressing debt maturities.
• Flexible capital spend to
sustainproduction.
• Sustain gross Jubilee production
c.100 kbopd.
• Revenue stream from Ghana gas.
• Reinancing plans achieve
sustainable capital structure.
• Net debt reduced to c.$1 billion,
gearing c.1x.
• Growth through organic
opportunities and M&A.
• Kenya remains a key value option.
• Signiicant equity value accretion
of core business.
Ongoing portfolio optimisation
8 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Non-operted nd explorton portfolos
In line with expectations, production from our non-
operated portfolio in Gabon and Côte d’Ivoire averaged
13.7 kboepd net in 2023 (2022: 16.7 kboepd net), including
0.5 kboepd of gas production in Côte d’Ivoire.
Gabon is a key part of our production and infrastructure-led
exploration (ILX) portfolio and in 2023 we took actions that
place the Tchatamba facilities as a core hub for Tullow. In
April, we announced the cashless asset swap agreed with
Perenco that enabled us to take more material positions in
key ields around Tchatamba. In August, the Government
of Gabon approved the extension of several of our licences
to 2046, relecting the future potential of the ields and the
longevity of the Tchatamba facilities. 2P reserves additions
from the licence extensions and the asset swap amounts to
c.6 mmbbls with a further c.3 mmbbls 2P positive reserves
revision from asset performance, overall representing
c.190% reserves replacement in 2023. During 2024,
operations in Gabon will focus on inill drilling to sustain
production or minimise decline across the licences, as well
as two ILX wells at the Simba licence.
On Espoir in Côte d’Ivoire, we continue to work with the
operator to establish the best way forward for the asset. On
exploration licences CI-524 and CI-803, we are maturing
the prospect inventory ahead of drill candidate selection
for an exploration well to potentially be drilled in 2025.
In line with our strategy to focus on producing assets, we
no longer have licences in Guyana following the sale of
Tullow Guyana B.V. to Eco Atlantic and the expiry of the
Kanuku licence. Through the sale, which completed in
November 2023, we retain exposure to potential future
success on the Orinduik licence through contingent
considerations and royalty payments.
In Argentina, our exploration team has continued to mature
a signiicant prospective resource base and continues to
assess opportunities from these licences.
en
Kenya remains a material option to drive value and
growth for Tullow. An updated Field Development Plan
(FDP) which intends to develop 470 mmboe of 2C
resources to produce up to 120 kbopd, was submitted to
the Government in March 2023. We have since worked
collaboratively with the Government as they evaluate
the FDP. Once their evaluation is concluded, the FDP will
be submitted to the Cabinet Secretary for Energy and
Petroleum for review before submission to Parliament for
inal approval. The development has been designed to be
robust at lower oil prices and we continue discussions with
prospective strategic partners for this project.
In June 2023, our interest in Kenya increased from 50%
to 100% as a result of the withdrawal of our Joint Venture
Partners for diering reasons. The increased interest
provides us with greater strategic lexibility. While we
continue to progress the FDP, we are also actively working
with the Government of Kenya in developing options to
accelerate production and cash low to unlock value from
this well-matured resource base.
Reserves nd resources
At the end of 2023, audited 2P reserves were 212 mmboe
(2022: 229 mmboe). During the year, 23 mmboe of 2P
reserves were produced, with a replacement ratio of 26%.
Additions were primarily from the extension of production
licences in Gabon and the maturation of several inill wells,
both in Gabon and the Jubilee area. These additions were
partly oset by reductions in TEN 2P reserves, mainly driven
by a reduced near-term development programme, in light
of the ongoing delays to gain Government approval for the
TEN amended PoD. Around 30 mmboe of net gas resources
remain classiied as 2C pending the approval of the TEN
amended PoD and Gas Sales Agreement. Commercialisation
of these gas resources would place TEN on a much irmer
economic footing and support the maturation of several
identiied projects.
Tullow’s asset base continues to have signiicant value, and
as of 31 December 2023, Tullow’s audited 2P NPV10 was
$3,406 million. This is slightly down from 2022 ($3,895
million), driven largely by TEN revisions and a lower long-
term oil price assumption as deined by independent third-
party reserves auditor, TRACS.
The Group’s audited 2C resources increased to 745
mmboe at the end of 2023 (2022: 605mmboe), relecting
the material scale of opportunity Tullow has to convert
resources into reserves to sustain long-term production. As
we now hold 100% of our Kenya licences, net contingent
resources have doubled to 470mmboe. 54mmboe of
contingent resources has also been removed following the
sale and exit from Guyana.
Outloo
After reaching an important inlection point in our business
plan in 2023, Tullow has a strong and unique foundation to
create material value for our investors, host nations and wider
stakeholders and we look to the future with conidence.
We will continue to run our business with the same rigorous
inancial discipline, prioritising the highest returns and
focusing on value-accretive investments. Our balance sheet
will continue to strengthen as we further reduce our debt
and optimise our capital structure. We have made good
progress toward delivering our target of $800 million of free
cash low between 2023 and 2025 and given the quality of
our resource base, the opportunity set ahead of us and a
reducing cost outlook, we expect to maintain these levels of
free cash low generation in subsequent years.
With a strong balance sheet and this sustainable free cash
low outlook, our business will be well placed to deliver
value to our shareholders through organic and inorganic
growth and capital returns.
I thank our shareholders for their continued support as we
realise value across the portfolio in 2024 and beyond.
Rahul Dhir
Chief Executive Oicer
5 March 2024
Tullow Oil plc Annual Report and Accounts 2023 – 9
Financial statements Supplementary informationStrategic report Corporate governance
Investment cse
Strong inancial and operational
performance.
30% rowth
Jublee 1H to 2H 2023 producton
Cash-generative business.
$800m
Free csh flow
1
over 2023-2025
t $80/bbl
Signiicant equity value accretion
as debt is repaid.
<$1bn nd 1x
Expected net debt
1
nd ern
1
b YE 2025
Optionality for investment, growth
andreturns.
Sustnble
Free csh flow
1
Building a unique African platform.
Growth
From ornc nd nornc
opportuntes
Attrctve sset portfolo
Ghn
Signiicant opportunities for inill
drilling, facilities expansion and new
oil and gas production from currently
undeveloped parts of the ields as
well as near-ield exploration.
Gbon nd Côte d’Ivore
Low-risk investment projects
with potential for fast
commercialisation, high
returnsand rapid payback.
en
Opportunity to realise value from
discovered resources.
A compelln vlue proposton
1. The Group uses certain performance measures that are not speciically deined under IFRS or other generally accepted accounting principles.
Thesealternative performance measures are explained on pages 189 and 190.
10 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements
Supplementary information
Strategic report
Corporate governance
Mret overvew
A number of global dynamics are shaping the markets we operate in.
Geopoltcs
Geopolitical tension around the world continues
to drive uncertainty and signiicantly impact the
global economy.
During 2023, geopolitical tensions, including the conlict
in the Middle East and the ongoing war in Ukraine, have
resulted in heightened market instability and disruptions
to global trade routes, thereby creating uncertainty and
aecting global economic growth.
Across sub-Saharan Africa, our key market, political
instability has continued with several military
coup d’états occurring, including in Gabon during
August 2023.
In these geopolitically unstable times, nations are
seeking to secure domestic energy supply which
is driving a decline in global trade and increasing
energy costs.
Inlation has started to reduce towards target levels
but interest rates remain high. While most economies
are absorbing persistently high interest rates, showing
resilience over the past year, core inlation remains
elevated in several parts of the world, especially
the US and parts of Europe. If major central banks
keep interest rates higher for longer in order to tame
inlation, risks to the world economy are likely to remain
skewed to the downside
1
. In Europe, rising wages
and higher incomes are boosting the economy, but
short-term wage pressures combined with longer-
term tightness in labour markets could stoke further
inlationary pressures
2
.
In terms of global politics, in 2024, elections will take
place in the US, UK and in many countries in Africa
including Ghana, our primary country of operation.
Elections can cause signiicant market volatility as
investors cope with uncertainty about a country or
region’s direction.
1. Source: www.imf.org/en/Blogs/Articles/2023/10/10/higher-for-longer-interest-rate-environment-is-squeezing-more-borrowers.
2. Source: www.imf.org/en/Blogs/Articles/2023/11/07/europes-wage-rises-are-aiding-recovery-but-economies-face-risks.
Instability is causing
nations to seek to
secure domestic
energy supply.
How we re respondn
We work to build relationships with host
nations and governments. We also have a
proven track record of ensuring business
continuity during political uncertainty,
as demonstrated in Gabon where our
operations were unaected during the
recent coup.
Tullow Oil plc Annual Report and Accounts 2023 – 11
Financial statements Supplementary informationStrategic report Corporate governance
Ol prces
1
For much of 2023 oil prices oscillated in a much
narrower range compared with the volatile
markets of 2022.
Oil prices luctuated in the irst six months of 2023,
following the EU’s ban on Russian crude oil imports,
interest rate hikes by global central banks, and worries
about inlation and recession. Price strength was
driven through OPEC+ cuts combined with improved
macroeconomic sentiment. Brent prices rallied in the
second half of 2023 with prices hitting yearly highs.
Russia and Saudi Arabia’s decision to extend production
cuts of a combined 1.3 mb/d through to the end of 2023
triggered a price spike towards the middle of September
2023. This raised the prospect that sustained high
interest rates may slow oil demand and economic
growth. This ambiguous demand outlook, together
with deteriorating macroeconomic indicators and a
sharp escalation in geopolitical instability in the Middle
East, saw prices increase again in early October, before
decreasing into mid-December as concerns around
wider conlict and supply disruptions eased.
Oil prices increased in mid-December following attacks
on shipping vessels in the Red Sea driving Brent up to
$78/bbl by the end of the year.
Mret overvew contnued
1. All data in this section is taken from the monthly IEA Oil Market Reports available at www.iea.org/energy-system/fossil-fuels/oil.
Oil price movement 2022 v 2023 (Dated Brent) $m
Jan Feb March April May June July Aug Sep Oct Nov Dec
$/bbl
160
140
120
100
80
60
40
20
0
2022 2023
2023 oil prices oscillated in a
muchnarrower range compared
with 2022 prices.
How we re respondn
Hedging forms a key part of our
inancial risk management and allows
us to protect our revenue from oil price
volatility. We re-introduced our hedging
policy in 2023 which sees us protect 60%
of our expected production for the year
ahead, and 30% of the following year.
We also ensure 60% of our production
is exposed to rising oil prices by using
a mixture of straight put and collar
hedge structures. We continue to focus
on reducing our costs to ensure our
business is resilient at lower oil prices.
12 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Clmte chne nd ener trnston
Since the Paris agreement was signed in 2015, 75% of
cities, regions and countries now have net zero targets
enshrined in national legislation or policy. In addition,
more than two thirds of the world’s largest 2,000
companies have committed to a net zero target. With
88% of emissions, 92% of global GDP and more than
$25 trillion in revenues covered, progressing a path to
net zero has now become the global norm
1
.
Despite these developments, national climate action
plans remain insuicient to limit global temperature
rise to 1.5 degree Celsius and meet the goals of the
Paris Agreement
2
. The UNEP Emissions Gap Report
2023 showed that the growth of GHG emissions has
signiicantly slowed since 2015, but still needs to
decrease by between 28–42% more by 2030
3
.
When leaders gathered in the United Arab
Emirates for COP28, the political focus was on the
‘Global Stocktake’ to close existing gaps between
commitments, action and a 1.5C-aligned pathway
to net zero. With the UAE Presidency hailing the
agreement to transition away from fossil fuels as
“historic”, the inal text asks countries to set ‘ambitious’
targets over the next two years ‘in the light of dierent
national circumstances’. But progress on climate
adaptation, resilience and inance was slow, particularly
frustrating African nations that bear the brunt of the
impact of climate change
4
.
The uncertain geopolitical situation in 2023 is expected
to continue through 2024 and is likely to impede
further progress. Nevertheless, the consensus from
COP28 was that a more measured approach that gives
regard to the development needs of all regions is a
better approach.
While the pace of the energy transition is uncertain,
it is clear that fossil fuels such as oil, natural gas and
coal will remain a major part of the energy mix for the
foreseeable future.
African countries are disproportionately aected by
the global temperature rise – experiencing escalating
physical climate risks – but have limited ability to
respond due to debt and economic disparity . In
response, The Nairobi Declaration called for new
inancing mechanisms to restructure Africa’s debt
and unlock climate inancing
to ensure that African
countries can work together to face this challenge
5
.
1. Source: www.zerotracker.net/insights/net-zero-targets-among-worlds-largest-companies-double-but-credibility-gaps-undermine-progress
2. Source: www.unfccc.int/news/new-analysis-of-national-climate-plans-insuicient-progress-made-cop28-must-set-stage-for-immediate-action.
3. Source: www.unep.org/resources/emissions-gap-report-2023#.
4. Source: www.ft.com/content/3d821c-6200-4808-b16d-ac9cb2207f11.
5. Source: www.africaclimatesummit.org/about.
How we re respondn
Our purpose is to build a better future
through the responsible development of
oil and gas. In support of global targets to
reduce emissions, we are implementing
our Net Zero by 2030 strategy. Further
detail about our Net Zero by 2030
strategy and progress to date is included
on pages 33 and 34.
We recognise the importance of
meaningful engagement with a wide
spectrum of stakeholders to address the
complexity of the energy transition and
we regularly engage with host countries
to understand their long-term climate-
change strategies. For example, in Ghana
we are pioneering a nature-based carbon
oset project which is aligned with
the Government of Ghana’s Reduced
Emissions from Deforestation and Forest
Degradation strategy and its Nationally
Determined Contributions under the
global Paris Agreement. This project is
being undertaken in partnership with the
Ghana Forestry Commission to mitigate
hard to abate, residual emissions. See
page 33 for further information.
Tullow Oil plc Annual Report and Accounts 2023 – 13
Financial statements Supplementary informationStrategic report Corporate governance
Our busness model
Building a better future through responsible oil and gas development is our
purpose and ensuring that we generate value for all our stakeholders shapes
our business model and our strategy.
Our resources nd reltonshps
• Experienced and skilled
employees including local
teams in Africa with
engineering and subsurface
technical expertise.
•
Attractive portfolio of assets
including material reserves and
resources in West Africa and
signiicant resources in Kenya.
•
Strong reputation as a
responsible oil and gas
operator and trusted partner.
•
Positive relationships with
localcommunities, host
nationgovernments and
regulatory bodies.
•
Network of dependable
suppliers, including local
suppliers in Africa, supporting
business continuity and growth.
•
Financial resources that fund
business continuity and growth.
Produce
nd sell
We responsibly produce oil and
gas from our West African assets
and sell to international and
domestic markets.
Develop nd
explore
We invest in further
development and exploration
around our existing ields to
maintain and grow production.
Hrness
opportuntes
We seek opportunities to bring
undeveloped resources to
production and acquire existing
producing ields to grow and
diversify our business.
Wht we do
14 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
How we operte
• We strive to operate in a safe,
eficient and sustainable way
at alltimes.
•
Our success is dependent on
building trust and delivering
positive outcomes for all our
stakeholders.
•
Our values-led culture guides
our approach to everything. It
drives ethical behaviour to
ensure that at all times we do
what is right and promotes an
open team culture of
empowerment, performance
and continuous improvement.
•
We actively engage with the
communities and
governments where we
operate to understand their
needs and invest to support
their social development.
Our strte s focused on
Operational
excellence
Capital
eficiency
Business
growth
Read more about our strategy on pages to .
The vlue we crete
Our people
We provide employment,
competitive compensation and
beneits, and development
opportunities.
Emploees
1
399
Trnn nd development hours n 2023
+7,000
Host communtes nd overnments
Economic growth and
sustainabledevelopment, through
infrastructure developments, STEM
education and high-skill job
opportunities.
Totl soco-economc contrbuton
n lst fve ers
$31bn
Investors
2023 free csh flow
2
$170m
Supplers
Spent wth locl supplers n lst fve ers
$11bn
1. As at 31 December 2023.
2. The Group uses certain performance measures that are not speciically deined under IFRS or other generally accepted accounting principles.
Thesealternative performance measures are explained on pages 189 and 190.
Tullow Oil plc Annual Report and Accounts 2023 – 15
Financial statements Supplementary informationStrategic report Corporate governance
Our strte
Through effective execution of our strategy we have continued to evolve our
business. We have relentlessly focused on operational performance, cost
control, capital discipline and investments to drive growth. As a result, Tullow
today is a much-improved business.
As our cash low continues to increase we will continue to run our business with the same rigorous inancial discipline
prioritising the highest returns and focusing on value-accretive investments. This will enable us to further reduce our debt
and put in place a sustainable capital structure. It will also enable usto grow our business to create lasting social and
economic beneits for our host nations and value for our wider stakeholders.
Our strtec themes
Opertonl excellence
• Operating in a safe, eicient
and sustainable way at
all times.
• Promoting an inclusive
performance-driven culture
focused on continuous
improvement that
empowers employees.
• Building a track record
of consistent top-tier
operating capability and
performance.
• Leveraging our engineering,
technical and subsurface
expertise to realise
operating eiciencies
and maximise return on
investments.
Cptl effcenc
• Operating within a strict
cost framework.
• Allocating capital in a
disciplined way focused on
delivering investor returns
and capital to fuel our
growth plans.
• Generating material free
cash low of c.$800 million
between 2023 and 2025.
• Deleveraging our balance
sheet to become a low-
debt business by 2025 with
less than $1 billion net debt
and under 1x gearing.
Busness rowth
• Growth from our existing
assets, including new
production from discovered
resources, production from
undeveloped parts of ields
and near-ield exploration.
• Leveraging our deep
expertise in two ways:
to identify low-risk
investments with potential
for fast commercialisation,
high returns and rapid
payback; and create future
optionality from signiicant
prospective resources.
• Leveraging our strong
reputation as a trusted
partner and ethical and
responsible operator to
secure value-accretive
opportunities to diversify
our asset base.
Link to KPIs:
1
2
3
5
6
7
Link to KPIs:
2
4
6
7
Link to KPIs:
4
5
6
7
Link to principal risks:
1
2
6
8
10
Link to principal risks:
3
7
Link to principal risks:
1
3
4
5
9
Read more about our KPIs on pages and .
Read more about our principal risks on pages to .
16 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Strte n cton
During the year we have achieved a number of strategic milestones.
Operational
excellence
Enhncn drlln
performnce
Top-tier drilling performance is being achieved
during our ongoing programme in Ghana. Thecost
of wells in this programme has averaged c.$56
million, around 20% lower than wells drilled during
the 2018–2020 programme. This cost saving has
been delivered by signiicantly reducing non-
productive rig time, simplifying well designs and
more eective contracting. Our well engineering,
subsurface and operations teams are building
an excellent track record for eiciently delivering
complex wells onschedule and on budget with
results in line withexpectations.
Avere Ghn well costs n 2023
c$56 mllon
Tullow Oil plc Annual Report and Accounts 2023 – 17
Financial statements Supplementary informationStrategic report Corporate governance
Strte n cton contnued
Capital
eiciency
Delevern our
blnce sheet
We have made signiicant progress in reducing our
debt and addressing our debt maturities. During
the year we purchased portionsof our Notes
due in 2025 and 2026 and in November 2023 we
entered into a $400 million ive-year notes facility
agreement with Glencore (see page 24). These
developments, together with our expected cash
generation through to 2025, will allow us to fully
address all outstanding 2025 Notes and positions
us for a successful reinancing of the 2026 Notes.
Yer-end 2023 net debt
$16bn
2022: $1.9bn
18 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Business
growth
Incresn
productont
Jublee
Following the completion of the Jubilee South
East project, gross production from our Jubilee
ield in Ghana grew from c.70,000 barrels of
oil per day (bopd) at the start of the year to
c.100,000 bopd. This increased production is a
result of the three-year c.$1 billion investment we
and our partners have made to bring previously
undeveloped reserves to production via the
Jubilee South East project. Sharing the value
we create is core to our purpose and we are
pleased to have delivered this growth through
collaboration with a number of local suppliers. In
particular, a signiicant proportion of the complex
Jubilee South East oshore infrastructure was
fabricated by local companies in Ghana, whose
workforces are over 90% Ghanaian. Over the
next few years, we plan to maintain this increased
level of production through active reservoir
management and inill drilling.
Forecst 2024 Jublee ross producton
c100,000 bopd
Tullow Oil plc Annual Report and Accounts 2023 – 19
Financial statements Supplementary informationStrategic report Corporate governance
Our PIs
We measure our performance using the inancial and non-inancial metrics
detailed below. These metrics are used to determine performance-related
rewards
1
across the Company ensuring that remuneration and delivery of our
strategy are aligned.
The operational and inancial metrics below (our 2023 corporate scorecard) relect our strategic priorities. Their purpose
is to drive performance and provide a clear measure of progress achieved during the year. As part of our remuneration
arrangements, at the start of each inancial year we set targets and weightings in relation to each metric. Further detail
in relation to each performance metric and the targets set for the inancial year ended 31 December 2023 are set out on
page 91 and pages 94 to 96.
Performance metric Why we measure this 2023 performance
1
Sfet
The safe and responsible operation of
our assets is always our irst priority.
One recordable injury in 2023, maximum
score achieved.
No Loss of Primary Containments (LOPCs) at
Tier 1. Three Tier 2 LOPCs.
2
Fnncl performnce
(Cost and working capital
management)
Helps determine how eectively we are
deploying our strict cost framework and
our progress in maintaining cost discipline.
Normalised operating cash low at $902 million.
3
Producton
Maximising oil production and revenues is
critical if we are to continue to deleverage
our business and deliver our targeted
material cash low over the next two years.
Group oil production at 56.3 kbopd. Jubilee
production eiciency at 96%; TEN production
eiciency at 95%.
4
Busness pln
mplementton
Eective implementation of our capital
investment programmes underpins our
strategy and ensures capital eiciency.
100% of the 2023 capex work programme
completed in line with Budget. Delivery of
the Jubilee South East project represented a
signiicant 2023 milestone.
Part of the Mauritania decommissioning
programme deferred due to operational
issues. Operations to restart in 2024.
5
Sustnblt
If we are to fulil our purpose, we must
mitigate the impact of our operations
while generating social and economic
beneits for our host nations and
otherstakeholders.
A number of ESG initiatives were completed
including planned engineering works on TEN
and Jubilee to eliminate routine laring, social
projects in our countries of operation and people
initiatives to improve our employee engagement.
6
Unlocn vlue
Provides laser focus on key strategic
operational projects.
Performance assessment focused on six
critical actions including the successful
delivery of reinancing initiatives to address
near-term debt maturities, Ghana gas
commercialisation via an interim gas sales
agreement, and in Gabon, swap agreement
and licence extension boosting reserves.
7
Ledershp effectveness
Ensures we have the right balance of
skills, experience and knowledge to
deliver our strategy.
In 2023, the leadership team worked
cohesively and, together with a highly
energised workforce, achieved 100 kbopd on
Jubilee and progressed activities to unlock
value in the identiied critical areas. With
strong support from the Board in the year, the
leadership team continued to position the
Company for sustainable success in the future.
1. Our scorecard also includes a relative total shareholder return performance metric which makes up 50% of the total and only applies to our CEO
(see page 96).
20 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Trets nd performnce
Set out below are overviews of the targets and performance achieved in 2023 and the two prior years.
2023 corporte scorecrd
2022 corporte scorecrd
2021 corporte scorecrd
Safety Financial performance Production Business plan implementation Sustainability
Unlocking value Leadership eectiveness
Safety Financial performance Production Business plan implementation Sustainability
Unlocking value Leadership eectiveness
Safety Financial performance Production Business plan implementation Capital structure Sustainability
Leadership eectiveness
Target
%
5%
5%
10%
2.2%
10%
2.7%
5%
5%
3.8%
7.5%
3.8%
5%
4.2%
7.5%
4.9%
Achieved
%
Target
%
5%
1.9%
10%
6.3%
10%
4.8% 3.2%
7.5%
5.6%
5%
2.6%
7.5%
5.6%
Achieved
%
Target
%
9.8%
7.0%
13%
9.9%
6.5%
4.7%
6.5%
5.2%
9.8%
9.8%
9.8%
9.1%
9.8%
5.5%
Achieved
%
Tullow Oil plc Annual Report and Accounts 2023 – 21
Financial statements Supplementary informationStrategic report Corporate governance
Our steholders
To fulil our purpose and build a better future for all our stakeholders we must
understand their expectations and concerns and take account of them in the
way we run our business.
Enn wth
oursteholders
During the year, Board members visited a newly
built 14-unit dormitory block for students at Axim
Girls’ Senior High School in Ghana’s western
region. Tullow provided funding for the build as
part of the Ghana Government’s initiative to make
education more accessible to students who live
long distances from schools. In the picture, Board
member Sheila Khama engages Tullow Ghana’s
Associate General Counsel, Hannah Agbozo, in
a conversation as they make their way through
the facility.
22 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Our e steholders nd how we ene wth them
Colleues
Enable us to deliver
our strategy
Host overnments
nd communtes
Impacted by what
we do
Investors nd
lenders
Provide capital
Supplers
Support our
business activities
ESG experts,
non-overnmentl
ornstons nd
ndustr peers
Share best practice
Wht mtters to them
• Safe working
environment.
• Fair compensation
and beneits.
• Purpose and values-
based culture.
• Engagement
including regular
and timely business
updates.
• Development
opportunities.
• Responsible
operator of national
assets.
• Revenues and
taxesfrom
operations.
• Socio-economic
investment and
support.
• Consultation
on operational
initiatives.
• Strategy and
delivery.
• Sustainable returns.
• Regular
communication and
transparency.
• Strong ESG
performance
especially on
climate change
mitigation.
• Long-term
relationships.
• Safe working
environment.
• Fair terms.
• Commitment to
invest in local
content.
• Safe and sustainable
operations.
• Input into debates
and consultations in
relation to industry
practices.
• Proactive
engagement in
relation to issues.
Group-level enement overvew
• Town hall and team
meetings.
• Engagement
surveys.
• Local-level
engagement
including team
meetings.
• Employee advisory
panel (the TAP).
• Leadership coee
mornings and
brunches.
• Senior
management
proactively engage
with government
oicials.
• Regular interaction
through our local
Social Performance
teams.
• Regular meetings,
discussions,
surveys, advocacy
and industry
collaborations.
• Investor relations
programme
including quarterly
updates and regular
group and 1-2-1
meetings.
• Participation
in industry
conferences.
• Regular commercial
dialogue.
• Quarterly
performance
reviews with key
suppliers.
• Supplier training
events in relation
to our business
requirements.
• Corporate
memberships
including the
Extractive Industries
Transparency
Initiative, Chatham
House and Royal
African Society.
• Participation in ESG-
focused investor and
industry events and
conferences.
• Attendance
and academic
submissions to
technical peer-to-
peer events.
Bord-level enement overvew
• Quarterly meetings
with the TAP, our
employee advisory
panel.
• Town hall meetings
hosted by CEO
including open
Q&A sessions.
• Annual Board site
visit.
• On-site in-person
small group
discussions
with CEO.
• Chair and CEO
meet with national
government
representatives.
• Regular Social
Performance team
Board updates.
• Annual Ghana
Energy Evening
hosted in London.
• Annual General
Meeting.
• Chair and Senior
Independent
Director meet with
shareholders as
required.
• Board receive
regular updates on
investor relations
programme,
including investor
feedback.
• Chair, CEO and CFO
meet with supplier
counterparts
to assess
performance and
build relationships.
• Oversee overall
sustainability
strategy.
• Visit social
investment and
oset projects.
• Regularly
updated on ESG
developments
aecting our
business.
Outcomes
• Most recent
employee survey
results (2022)
returned an average
positive score of
70% across all
survey questions.
• $713 million total
socio-economic
contribution
in2023.
• See pages 30 to 32.
• Supportive
shareholder base.
• Ethical
procurement.
• Motivated suppliers
performing to high
standards.
• Responsible
business practices.
• Sustainability
strategy addresses
stakeholder issues.
Tullow Oil plc Annual Report and Accounts 2023 – 23
Financial statements Supplementary informationStrategic report Corporate governance
Secton 172 sttement
The Directors are required by law to act in a way that promotes the success
ofthe Company for the beneit of shareholders as a whole. In so doing they
must also have regard to wider expectations of responsible business behaviour
and have regard to the Company’s stakeholders and the matters set out in
Section 172(1) of the Companies Act 2006.
During the year the Directors have actively engaged with a number of our stakeholders to build understanding of their
position and what matters to them (see page 23). This understanding is factored into the Board’s decision-making
process. In circumstances where stakeholders’ interests are conlicted, the Directors endeavour to balance all interests
and make decisions that align with our purpose and support the delivery of the Company’s strategy and its long-
term success.
In relation to the decisions made by the Board during the year ended 31 December 2023, the Board consider, both
individually and together, that they have acted in the way they consider, in good faith, would be most likely to promote the
success of the Company for the beneit of its shareholders as a whole, having regard to its stakeholders and the matters
set out in Section 172(1) of the Companies Act 2006.
Set out below are examples of Board principal decisions made during the year which illustrate how the Directors have
fulilled their duties.
Decson Areement wth Glencore Ener U Lmted (Glencore)
Context nd
ln to strte
In November 2023 we entered into a $400 million ive-year notes facility agreement with
Glencore (the Agreement). The facility will be available to draw for 18 months and proceeds are
available for liability management of the Company’s senior notes maturing in March 2025. The
interest on the facility will be term secured overnight inancing rate plus 10% on drawn amounts.
We also entered into oil marketing and otake contracts with Glencore for Tullow’s crude oil
entitlements from the Jubilee and TEN ields in Ghana and the Rabi Light entitlements in Gabon.
Steholder
consdered
Investors, Colleagues, Suppliers.
Process
The Board considered the terms of the Agreement and decided it was in the best long-term
interest of the Company and the stakeholders above based on a number of factors including:
• Proceeds from the facility, together with cash on balance sheet and free cash low expected to
be generated during 2023 to 2025, will allow all outstanding 2025 Notes to befully addressed
and positions us for a successful reinancing of the 2026 Notes.
• By entering into the Agreement Tullow seeks to manage its debt proiles and ultimately achieve
a sustainable capital structure, including our Company goal of becoming a low-debt business
with gearing of 1x or below, and the inancial lexibility to pursue value-accretive opportunities
or consider future shareholder returns.
• A sustainable capital structure, together with successful execution of growth opportunities, will
create value for our shareholders, lasting social and economic beneits for our host nations, job
security for our people and commercial beneits for our suppliers.
Read more about our strategy on pages to .
Strategy key
Operational excellence Capital eiciency Business growth
24 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Decson Asset swp reement wth Perenco Ol nd Gs Gbon SA (Perenco)
Context nd
ln to strte
In April 2023, we entered into an asset swap agreement with Perenco to optimise our equity
ownership across key ields in Gabon through the cashless swap of interests held by both parties
in certain licences in Gabon.
Steholder
consdered
Host communities and governments, Investors, Colleagues, Suppliers.
Process
The Board considered the terms of the Agreement and decided it was in the best long-term
interest of the Company based on a number of factors including:
• The transaction simpliies and equalises our equity ownership across key ields in Gabon, creating
better alignment between the participating interest partners and streamlining processes.
• The transaction is aligned with our growth strategy which is focused on maximising the value
ofour key producing assets and low-risk exploration with potential for fast commercialisation,
high returns and rapid payback.
• Successful execution of growth opportunities will create value for our shareholders, lasting
social and economic beneits for our host nations, job security and development opportunities
for our people and commercial beneits for our suppliers.
Decson South Lochr Bsn – en updte
Context nd
ln to strte
In May 2023, Tullow Kenya B.V., operator of the Company’s licence in Kenya, was informed by its
two minority partners of their intention to withdraw from Blocks 10BB, 13T and 10BA in the South
Lokichar Basin (the Project). As a result, the Group had an opportunity to increase its working
interest in these blocks and assume 100% ownership, resulting in the Company having full rights
and liabilities.
Steholder
consdered
Host governments and communities, Investors, Suppliers.
Process
The Board considered the factors associated with 100% ownership of the Project and decided it
was in the best long-term interests of the Company and its stakeholders, based on a number of
factors, including the beneits, and decided:
• 100% of the Project created more optionality, providing the Company with more lexibility in the
ongoing process to secure strategic partners. It also created a simpler joint venture partnership
and as a result, streamlined delivery.
• The opportunity is aligned with our growth strategy. It is a low-cost development that has the
potential to unlock material value for Kenya.
Tullow Oil plc Annual Report and Accounts 2023 – 25
Financial statements Supplementary informationStrategic report Corporate governance
Sustnblt revew
2023 sustnblt hhlhts
Safe operations Shared Prosperity Environmental stewardship Equality and transparency
0.2 Total Recordable Injury
Frequency across our global
operations.
$221 million local supplier spend
- an increase of 28% compared
to 2022.
Completed process
improvements to increase gas
handling capacity on Jubilee
and TEN separator upgrades to
progress elimination of routine
laring to meet our Net Zero
commitment.
$713 million total socio-
economic contribution in our
host countries, bringing total
ive-year socio-economic
contribution to $3.1 billion.
Zero Tier 1 process
safety Loss of Primary
Containments (LOPC) and
three Tier 2 LOPC incidents.
Educational activities reached
more than 10,000 pupils and
students.
3% reduction in total energy
consumption.
$492 million paid to host
countries including payments
in kind.
Completed Jubilee ield
FPSO safety culture
assessment which
evidenced strong
improvement in safety
systems and practices.
Ongoing investment in Ghana
ishing communities with a
total of loans worth $770,000
granted to 2,411 ishing
businesses to date.
34% reduction in total water
consumption.
21% women in senior
management (compared to 14%
in 2022).
Two Environment, Health &
Safety (EHS) Forums held for
contractors in Ghana.
Major programme to identify
salient human rights issues and
training rolled out within Tullow
and across our supplier base
inGhana.
84% total waste recycled,
reused or treated (compared to
74% in 2022).
43% Africans in management
(compared to 42% in 2022).
Employee engagement with
our Global Wellness Agenda
with colleagues attending
an average of eight wellness
events throughout the year.
500 local companies attended
six training workshops delivered
through the Petroleum
Commission / Tullow Business
Academy Partnership
Initiative in Ghana.
Positive results received in
the fourth marine benthic
environmental assessment
undertaken in Ghana.
Localisation in Ghana at 76% on
track to achieve our target of
90%, through implementation of
various initiatives.
We strive to operate in a safe, ethical and sustainable way at all times.
Duringthe year we have continued to implement our sustainability strategy
andhave achieved progress in a number of areas.
Tullow Ghana
received the
Health, Safety
and Environment
Excellence Award
at the 2023 Ghana
Energy Awards.
Our investment and achievements in
developing and delivering outstanding
local content in Ghana’s upstream oil
and gas sector over the past 10 years
were recognised at the 2023 Local
Content Conference hosted by the
Petroleum Commission. Read more at
www.tullowoil.com/sustainability.
Assurnce
Quantitative data in this section relates to the 2023 calendar year and covers our global operations unless otherwise
stated. Greenhouse gas (GHG) emissions reporting includes our operated and non-operated assets. Descriptions of
data collection methodologies and notes to reported metrics are available in our GHG Emissions Scope & Calculation
Methodology and Basis of Reporting documents which are available at www.tullowoil.com/sustainability. GHG emissions
and other environmental data from our operated assets have been externally assured by Integrated Reporting and
Assurance Services (IRAS) and the Assurance Statement is also available at www.tullowoil.com/sustainability.
26 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Our sustnblt frmewor
Our sustainability strategy addresses our material economic, social and environmental impacts, and is fundamental to
delivering our purpose. It is built around four pillars (see below) which are aligned with the issues that are most relevant to
our business, our stakeholders (see page 23) and the relevant broader UN Sustainable Development Goals (SDGs).
The Safety and Sustainability Committee (see pages 87 and 88) supports the Board in directing our sustainability strategy
and targets and oversees its implementation. Sustainability-related topics are discussed at every Board meeting.
I believe 2024 will provide an
opportunity to refresh our strategy
and reassess our priorities. A focus
on nature, including biodiversity
and ocean health, will be higher on
our agenda, for example, and we
will continue to reinforce the ways
in which we inspire and empower
our people and attract strong new
candidates to join our business.
Julia Ross
Director of People and Sustainability
Social Environment Governance
Sfe opertons Shred Prospert Envronmentl
stewrdshp
Eqult nd
trnsprenc
• Employee health and safety
• Process safety
• Emergency response
• Local content and capacity
• Community development
• Social investment
• Climate change
• Biodiversity
• Spills
• Waste
• Compliance
• Anti-corruption
• Human rights
• Inclusion and diversity
• Tax transparency
In 2023, we commenced a review of the issues which
represent our most signiicant sustainability impacts as
a precursor to updating our sustainability strategy and
targets to relect changes in our business, our operating
environments, new reporting standards and frameworks
as well as stakeholder expectations since our last
assessment. We plan to provide an update and a refreshed
sustainability strategy next year.
Further information about our progress in advancing
our sustainability programmes is included in
our Sustainability Report which is available at
www.tullowoil.com/sustainability.
Tullow Oil plc Annual Report and Accounts 2023 – 27
Financial statements Supplementary informationStrategic report Corporate governance
Sfe opertons
There is nothing more important than the safety of our
people and all those who work at or visit our sites. Safe
operations management and practices are overseen by
the Board with the support of its Safety and Sustainability
Committee. We believe all injuries are preventable and
work proactively every day to make this our reality.
Occuptonl helth nd sfet
We delivered a year of positive safety performance
in 2023, achieving our target of below 0.6 for Total
Recordable Injuries Frequency (TRIF) and a reduction in
the number of High Potential Incidents (HiPos)
1
by more
than 50% compared to 2022. Disappointingly, there was
one Lost Time Injury (LTI) involving an oshore worker in
the Jubilee ield who sustained injuries which required
osite treatment. We also recorded three Tier 2 Loss of
Primary Containment (LOPC) incidents compared to
one Tier 2 LOPC in 2022. All injuries and incidents were
subjected to full investigations and corrective actions were
taken to prevent recurrence. In 2024, we will continue with
further intensive activities to reinforce our safety culture
through awareness and training at all levels.
Safety performance
2
2023 2022 2021
Lost Time Injuries
Frequency (LTIF) 0.2 0 0.21
Total Recordable Injuries
Frequency (TRIF) 0.2 0 0.43
High Potential Incident
Frequency (HiPoF) 0.6 1.5 1.06
Workforce fatalities 0 0 0
Process sfet
Our process safety management system includes policies,
standards and risk management activities and covers all
our operations from exploration and production through to
decommissioning. In 2023, we maintained zero Tier 1 LOPCs
for the fourth consecutive year. However, we did experience
an increase in Tier 2 LOPCs, which, although less severe,
reinforced the opportunity for further improvements.
Process safety events
(PSE) 2023 2022 2021
Tier 1 0 0 0
Tier 2 3 1 0
Total 3 1 0
Asset protecton nd emerenc response
We maintain a high level of preparedness to respond to
any emergency to minimise negative impacts on people,
the environment and our assets while assuring business
continuity. We adhere to our detailed asset protection-
related policies, standards and plans which include crisis
and emergency management, ensuring employees are
fully trained to respond to emergency situations.
In 2023, we conducted two major exercises in Ghana to
test our emergency response protocols and business
continuity planning. The exercises included testing
procedures to be adopted during oshore emergencies
and to ensure our teams are updated with all relevant
procedures including full understanding of oil spill
reporting and strategic response options. As a result of
these exercises, we adjusted our processes to improve
ouroverall emergency response preparedness.
Embeddn
proctve sfe
worn prctces
We launched our Learning from Normal Work
campaign to shift mindsets from reactive learning
(after incidents) to proactive learning (preventing
incidents). Based on the guidance of the
International Association of Oil & Gas Producers,
our campaign ran for 13 weeks across Tullow
Ghana and included workshops covering skills and
tools to embed proactive safe working into daily
activities and encourage employees to challenge
potential safety risks they encounter.
Sustnblt revew contnued
1. HiPos are deined as any incident or near miss that could, in other circumstances, have realistically resulted in one or more fatalities.
2. Our data collection methodologies and notes to reported metrics are available in our Basis of Reporting document.
28 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Enn contrctors nd supplers
nsfet
At any given time, many workers at our facilities onshore
and oshore are contractors. It is imperative that everyone
who works at our sites or supplies materials or services
to our facilities has a full understanding of our safety
procedures and knows our requirements on how to
comply. To engage our contractors on EHS matters,
and promote learning and sharing, we hold bi-annual
EHS Forums, with each meeting focusing on a dierent
aspect of EHS. Our irst forum of 2023 focused on ‘Safety
Leadership: The Key to Healthy and Safe Workplaces’ and
covered a number of areas including enhancing attention
to medical emergencies and ensuring ongoing learning.
Emploee wellness
We operate a year-round Global Wellness Agenda to
support employees in maintaining a healthy lifestyle
and we retain in-house medical professionals to provide
guidance to employees as needed. Our Employee
Assistance Programme oers individual counselling on
any personal issue, including mental health challenges.
In 2023, we again encouraged physical health with our
annual sports day and employee on-site health check-ups.
During the year, we also expanded our wellness activities
to include inancial health and ran our irst ‘Financial
Wellbeing’ seminar which was attended by 180 employees.
Employees received a ‘Wellness Afternoon O’ to support
their wellbeing. In addition, towards the end of the year
employees enjoyed a ‘Tullow Appreciation Day’, a day of
paid leave oered to all employees as an appreciation for
their hard work during the year.
Investn
nemploee
wellness
Our Global Wellness Fortnight event, which took
place in November 2023, oered employees the
opportunity to participate in a range of activities
including a meditation session, neck and shoulder
massages, mindfulness art therapy and nutritional
advice. Hundreds of employees also took part in
the ‘Move It Challenge’, a competition involving
teams led by our senior leaders to clock up the
most exercise safely over the fortnight.
More than 3,100 instances of employee
participation in more than 24 global wellness
events in 2023, amounting to, on average,
each colleague participating in 8events
during the year.
Tullow Oil plc Annual Report and Accounts 2023 – 29
Financial statements Supplementary informationStrategic report Corporate governance
Shred Prospert
Shared Prosperity is a key element of our strategy to go
beyond access to energy and deliver economic and social
beneits in our host nations by accelerating progress through
partnerships whilst managing the impacts of our operations.
Our investment in education and skills development
enhances employability and enterprise development,
empowering local entrepreneurship and building local
capabilities in our sector. Our investment in the development
of local businesses helps them to grow and thrive.
Sustnblt revew contnued
Our mcro soco-economc
mpct n Ghn
1
$504 million value added (taxes,
salaries and proits) across
the value chainfrom our direct
operations and upstream spending
in Ghana.
0.65% of total GDP.
$318 million tax payments
supported across the value chain
from our direct taxes and royalties
and through our upstream spending
in Ghana.
3.6% of total government revenue
2
.
$119 million in household incomes
(or salaries) supported across
the value chain from our direct
operations and upstream spending
in Ghana.
20,400 estimated formal
employment opportunities
supported across the value chain
from our direct operations and
upstream spending in Ghana, as well
as induced jobs from re-spending of
salaries throughout the value chain.
0.39% of the total workforce in
Ghana.
10,000+ people supported
through our investment in
skills development through our
educational programmes.
Fshermn’s
Anchor Proect
The Fisherman’s Anchor Project (FAP) has
generated signiicant economic beneit for ishing
communities in Western Ghana since 2019. In
addition to micro-credit to support livelihoods,
reaching more than 2,400 beneiciaries, FAP
has engaged more than 1,400 business owners
in inancial management workshops and other
training sessions. FAP highlights include:
• Approx. $770,000 (GHC 9,002,900) disbursed
in small loans.
• 2,773 credit applicants assessed.
• 2,411 loan beneiciaries from 34 communities.
• 80% of beneiciaries were women.
• Beneiciaries included ish processors (75%),
canoe owners (19%), pig farmers and other small
business owners.
• 100% loans repaid in full.
Assessn our soco-economc contrbuton
In 2023, we completed a macro socio-economic impact
assessment of our activities in Ghana to calculate the extent
of our contribution to advancing the Ghanaian economy
and improving life for the people of Ghana; this is core to
delivering on our purpose of building a better future through
responsible oil and gas development. The assessment,
conducted by an external impact and sustainability
consultant, Steward Redqueen, demonstrates the strong
impact of our local procurement, taxation, employment,
livelihoods and skills development during 2023.
Accelertn entrepreneurshp
Enterprise development is fundamental to helping our host
country communities develop and maintain sustainable
livelihoods. Our lagship enterprise development initiative,
The Fisherman’s Anchor Project (FAP), which started in
2019, is a micro-credit scheme funded by Tullow and
JV Partners and administered by OIC International. FAP
provides critical inancial support to boost income and
economic activity in ishing communities in the coastal
districts of Western Ghana, where ishing is the primary
source of income, providing jobs for more than 80% of the
coastal communities. In particular, FAP provides ishermen
1. Data includes Tullow’s net equity share of joint ventures. Upstream
impact was modelled based on Tullow’s procurement data.
2. Total government revenues during 2022 amount to GHS 96.65
billion, or USD 8.77 billion. Source: www.bog.gov.gh/wp-content/
uploads/2023/07/Annual-Report-2022.pdf (page 22).
30 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Advncn locl
busnesses
In 2023, we transformed the supply chain of
customised steel tube lying leads which are
used in our oshore operations. Instead of
sourcing components and assembly of this critical
equipment in the USA and India, we engaged a
local supplier to complete the inal assembly work
in Ghana. Our initial purchase order of more than
$3.5 million and a forward procurement forecast
provided the supplier with conidence to make the
capital investment to support this change. This
development has enhanced our local supplier
capabilities, increased local content and improved
the cost eiciency and reliability of our supply
chain in Ghana.
More than 4,000 students across eight schools
were provided with accommodation and
classroom facilities through our investment
in seniorhighschool education as at the
end of 2023.
and local entrepreneurs with tools to help them thrive through the o-season, during which ishing activities generate lower
revenues, such as working capital inancing or the establishment of a secondary income source.
In 2023, progress was made in transitioning the FAP into a Cooperative Credit Union, with the registration of the
Fishermen Anchor Cooperative Credit Union (FACCU), which will provide continuous, aordable and easily accessible
inancial services to ishing communities in Western Ghana. The FACCU has established four district oices and recruited
ive mobile bankers to advance the provision of critical inancial services to community members. The FACCU has already
registered more than 430 members, exceeding its initial target of 400 in 2023.
Investn n educton
We strive to provide access to STEM education and the technical skills needed to open doors to meaningful and fulilling
careers for thousands of young people in our host countries. Working with partners in Ghana, Kenya, Guyana and
Suriname, we enabled more than 10,000 students to access education in 2023 (up from 9,000 in 2022). More than 260
students have transitioned to tertiary education and we have held 13 mentoring sessions to support students in learning
and acquiring soft skills. Concurrently we supported the training of more than 150 teachers to support and improve the
quality of teaching which is expected to beneit over 8,000 students.
Our multiple initiatives include our partnership with the Youth Bridge Foundation which manages Ghana’s Educate to
Innovate programme. Through this programme we have supported access to education and skills development and
directly engaged more than 5,000 students. We also progressed our commitment to provide $10 million over ive years
to support the Government of Ghana in providing free access to quality senior high school education. At the end of 2023,
our investment has provided accommodation and classroom facilities for more than 4,000 students across eight schools.
Tullow Oil plc Annual Report and Accounts 2023 – 31
Financial statements Supplementary informationStrategic report Corporate governance
Sustnblt revew contnued
Promotn trust-
bsed prtnershp
reltonshps
Our third Supplier Market Day of 2023 brought
together our local leadership and 165 suppliers
to deepen our engagement and relationships.
A delegation from the PC, led by the Director
of Local Content, Mr. Kwaku Boateng, attended
to share key insights on strategic alliances,
progressive partnerships, local content and other
licensing requirements.
Shred Prospert contnued
Proressn locl content
Local content is how we refer to advancing local
businesses in our host countries. A fundamental pillar
of our Shared Prosperity objective is the investment we
make in nurturing and engaging with local suppliers to
enhance their capabilities to grow with Tullow and expand
their activities within the oil and gas industry in their home
country and beyond.
We further expanded our collaboration with the Petroleum
Commission of Ghana (PC), providing our industry
expertise to advance local suppliers through the Ghana
Upstream Petroleum Business Academy and the PC’s
local content programme. During the year, we delivered
six training workshops through the PC/Tullow Business
Academy partnership initiative for more than 500 local
companies, as well as other joint programmes.
As part of our ongoing partnership with Accenture in
Ghana, the Tullow Supplier Mentoring and Training
Programme continues to enhance the capability of
service providers in Ghana’s upstream oil and gas sector
and improve the knowledge of PC sta. The programme
consists of online access to Accenture Supply Chain
Academy’s i-cloud learning platform as well as a tailored
one-to-one mentorship and coaching programme with
customised business support. More than 180 local
companies and 17 PC oicers have completed the
programme.
In 2023, we expanded the reach of the
LCR Tool from 30 to 45 Tier 1 suppliers
with contract values in excess of
$5 million. 100% of these suppliers
submitted information to the LCR Tool.
Our local supplier spend in 2023 was $221 million (up from
$173 million in 2022).
To further promote transparency, trust-based partnership
relationships with our suppliers and increase the
involvement of Ghanaian suppliers in our procurement
activities and operations, we hold quarterly Supplier
Market Days which raise awareness and host discussion on
speciic topics related to supply challenges in our sector.
We also publish quarterly newsletters for the beneit of our
suppliers, helping them understand how best to engage
with Tullow and providing additional opportunities for
contact with them throughout the year.
Also in 2023, we expanded the reach of our innovative,
proprietary local content reporting tool (LCR Tool), which
requests suppliers to self-report their social impact
performance against several metrics including spend on
goods and services, employment, investment in facilities
and social investments. Data from the LCR Tool enables us
to assess the overall reach and eectiveness of our local
content programmes whilst providing a rich database that
local governments can use to understand the broader
beneits our business generates, and the wider economic
impact of our supplier spend.
32 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Envronmentl stewrdshp
We are committed to being a responsible steward of the
environment and ensuring robust systems are in place for
assessing and managing environmental risk. A key focus is our
contribution to mitigating the eects of global climate change
through our commitment to Net Zero whilst preventing other
environmental impacts and protecting biodiversity.
Proressn our Net Zero b 2030 strte
We support the goals of the 2015 Paris Agreement, namely
to hold the increase in the global average temperature to
well below 2°C and pursue eorts to limit the temperature
increase to 1.5°C above pre-industrial levels. We have
committed to achieving Net Zero by 2030 on our Scope
1 and 2 GHG emissions on a net equity basis through a
combination of decarbonising our operated assets in Ghana
and identifying high-quality, nature-based solutions to oset
our hard to abate emissions. This plan is approved by the
Board and the senior leadership team (SLT), and led by a
Net Zero Working Group within Tullow. To deliver on our
commitment, we are prioritising the elimination of routine
laring at our Jubilee and TEN ields, which we expect will
drive down GHG emissions by at least 40% by 2025, on a net
equity basis, from a 2020 baseline. Further, we are investing
in a veriied nature-based carbon oset initiative in Ghana,
which will seek to oset 100% of our residual, hard to abate
GHG emissions.
Further information about the impact of climate change on
our business and how we are managing it is set out in our
TCFD response on pages 38 to 47.
Our Pthw to Net Zero
Scope 1 & 2 CO
2
e emissions, net equity basis
2020 emissions baseline
Nature-based carbon
mitigation initiatives to oset
hard to abate emissions
Decarbonisation initiatives
at our Jubilee and TEN ields
to eliminate routine laring
Additional operational carbon
reduction initiatives
2020 2030
Elmntn routne flrn n Ghn
Routine laring is an established method of disposing of
gas that is generated through oil production in quantities
that exceed the capacity to process it for sale or use it as an
energy source. Our strategy for eliminating routine laring,
therefore, is dependent upon increasing our gas processing
capacity at the Jubilee and TEN ields. Implementation of the
changes necessary to achieve this requires the temporary
stoppage of operations at each site to allow for switching
out of core equipment and other modiications. In 2023, we
completed the required modiications at the TEN ield that
enable the elimination of routine laring by 2025. Most of
the required modiications and upgrades in the Jubilee ield
have been completed and the remainder will be complete in
early 2025.
Addressn hrd to bte emssons
Our plan to address our residual, hard to abate emissions
is a nature-based initiative, working in partnership
with the Ghana Forestry Commission to oset more
than 600,000 tonnes of carbon emissions per year.
Wesigneda memorandum of understanding in January
2022 and commissioned Terra Global Capital to undertake
a feasibility study in April 2022. We expect to complete
the agreement this year with our irst carbon osets being
delivered within two years. In the meantime, we have
been engaging with stakeholders such as the Ghanaian
Environmental Protection Agency and communities in the
project landscape to gather initial feedback on needs and
expectations. Led by the Forestry Commission, we have
also conducted ield mapping work to understand the
land composition to determine deforestation rates and
potential volume from the project area. The nature-based
oset initiative covers 14 priority districts in the Bono and
Bono East regions of Ghana and the key intervention
activities to mitigate the threats of deforestation include
the generation of alternative sources of income from food
crop production and improved land management such
as ire and grazing prevention and sustainable charcoal
production. For the more than one million people living in
the project areas, this project aims to be transformational
in terms of supporting a sustainable environment,
generating work and improving livelihoods.
Tullow Oil plc Annual Report and Accounts 2023 – 33
Financial statements Supplementary informationStrategic report Corporate governance
Envronmentl stewrdshp contnued
Drvn ener effcences nd emssonperformnce
During the year, in line with our Climate Policy, we have continued to drive energy eiciency through incremental
improvements across our operations and further invested in on-site renewable energy generation to replace grid power
to help drive down emissions. In the past three years, we have improved energy eiciency by 9% from 1,283 GJ per
thousand tonnes of hydrocarbon produced in 2021 to 1,168 GJ in 2023.
Our Scope 1 emissions represent more than 99.5% of our direct emissions and correlate to production and associated
laring levels. In 2023, our Scope 1 emissions increased by 4% to 2,342 thousand tonnes CO
2
e, in line with production
volumes which required a slightly higher level of laring than in the prior year. We anticipate a reduction in emissions
following the positive impact of our Jubilee and TEN modiications to enable the elimination of routine laring by 2025, as
described above.
The carbon intensity of our operated activities in 2023 was 40kg of CO
2
e per boe compared to 37kg of CO
2
e per boe
in 2022, an increase related to routine laring. Our 2023 methane emissions of 9,657 tonnes CO
2
e represent 0.4% of
our total Scope 1 and 2 emissions. Flaring is the most signiicant source of our methane emissions, which will greatly
decrease when routine laring ceases.
For details of our Scope 1, 2 and 3 GHG emissions for the years 2018–2023, please see our Sustainability Performance
Data at www.tullowoil.com/sustainability.
Total air emissions: thousand tCO
2
e
1
2023 2022 2021 2020 2019 2018
Group Scope 1 2,342 2,258 2,234 2,040 1,072 1,046
Group Scope 2 0.87 0.81 0.53 1.28 1.69 3.00
Group Scope 3 9,356 6,680 892 324 15 14
Total Group 11,699 8,939 3,127 2,365 1,089 1,063
Group emissions intensity kg CO
2
e/boe 40 37 35 29 – –
Group energy use (GWh) 2,567 2,645 2,968 2,682 2,862 2,707
Group energy intensity (GJ / thousand tonnes
hydrocarbon produced) 1,168 1,183 1,283 1,045 1,082 1,098
UK air emissions: thousand tCO
2
e
UK Scope 1 0.062 0.059 0.11 0.27 0.24 –
UK Scope 2 0.1 0.2 0 0.57 0.71 –
UK energy use (GWh) 0.8 1.1 1.7 3.6 4.0 –
1. GHG data is from controlled operations and the calculation methodology can be found in the Basis of Reporting and GHG Methodology documents
available at www.tullowoil.com/sustainability. The increases in Scope 3 emissions in 2023 and 2022 were due to an expanded basis of reporting to
include all material emissions associated with our value chain, including purchased goods and services, capital goods and the use of sold products.
Sustnblt revew contnued
Mnn wter nd wste
Overall, our water impact is minimal and water use remains
fairly constant year on year, with minor changes due to
small dierences in operations. More than 77% of our water
withdrawal is from seawater, with zero withdrawal from
surface water sources or areas of water stress. More than
99% of the total water we withdraw is discharged back to
the sea, after treatment, thereby reducing our overall water
consumption to negligible levels. In 2023, we continued
our management of community water boreholes in our
operating regions in Kenya. On average, almost 20,000
households beneit from our water distribution which in
2023 reached 109,500 cubic metres of water.
We aspire to reduce all waste generated by our operations
with a goal of achieving zero waste to landill at all our sites.
In 2023, total non-hazardous waste generated was 352
metric tons, 35% down from 2022 with an overall reduction
in total waste of 5% and a signiicant increase in waste which
was diverted from disposal. We continue to implement a
rigorous programme of waste segregation, aiming to reduce
waste at source and recycle wherever possible. All wood
and ibre waste is recycled and we have eliminated single-
use plastics from our oices and oshore operations.
Protectn bodverst
We aim to protect biodiversity wherever we operate and
strive to minimise negative impacts of our operations at the
planning, exploration, development and decommissioning
phases. As well as minimising land impacts, we place
a strong focus on ocean health. In 2023, our fourth
environmental monitoring survey in Ghana to assess the
impact of our oshore operations on the marine ecosystem,
indicated that the ongoing oshore activities have not
adversely altered the general features of the sediments and
water column since our last survey in 2019.
In Ghana, we undertake marine mammal observation by
trained observers to watch and record marine mammal
sightings within the Jubilee and TEN ields as part of our
overall protocol to avoid harm to marine mammals and
turtles and we reduce disturbance to marine and coastal
ecology from vessels and helicopters by specifying travel
routes, speeds and light heights.
34 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Eqult nd trnsprenc
Our commitment to building trust through equality
and transparency means living our values; conducting
ourselves in an ethical and compliant manner; operating
within a framework of robust corporate governance; and
maintaining positive partnerships across our value chain.
We continuously invest in supporting, educating and
empowering our colleagues to advance these objectives
in a positive and inclusive working culture.
As at 31 December 2023, we employed 399 people.
Female representation across the Group was 26% (103),
with male representation at 74% (296). Information about
the Board and senior management gender proiles is set
out on page 81.
Refreshn our vlues nd empowern
ourpeople
In 2023, in line with the refresh of our company brand, we
updated our corporate values, engaging many colleagues
throughout the business in the process. Our aims were
to enable our people to align themselves with Tullow’s
strategy and goals and create a compelling values and
behaviours framework that will empower all our colleagues
to bring their best selves to work every day.
Our new corporate values are clear, simply expressed and
resonate with our colleagues. They are inspirational while
holding us to account for our actions in an inclusive and
empowering culture. We shared these values widely across
the organisation in an intensive period of communications,
discussions, sessions with the SLT and many in-person and
online events.
Enn nd empowern our people
We aim to foster an organisation in which all colleagues
are motivated to live our values and support our purpose,
while realising value for themselves in terms of meaningful
work, professional growth and competitive compensation
and beneits. We survey our employees every two years
(with frequent pulse surveys in the interim) to understand
how our Employee Value Proposition is delivering value to
our employees. The last survey was in 2022 in which 90%
of employees participated, resulting in an average positive
score of 70% across the sum of all survey questions. Our
next survey will take place in 2024.
Beyond mandatory training on ethical conduct,
compliance, health, safety and technical skills
development, we invest in providing leadership and
development training for employees to complement
functional knowledge. We aim to provide at least 20 hours
of professional development training per employee per
year. In 2023, we launched an online learning hub to give
employees access to self-training resources and support
for personal and professional development. We also put in
place a number of leadership development masterclasses
including peer-to-peer coaching to talk about challenges
and share insights. Our mentoring programme continued
during the year with a third cohort of 20 employees being
paired with 20 senior leaders to assist our colleagues with
leadership and other skills and support them in navigating
job challenges. We achieved over 7,000 hours of training
within the year.
Am hh
With a growth mindset and
adaptability to change, we
seize every opportunity
to learn and improve,
working together to uncover
greater impact for our
business, stakeholders, and
communities we work with.
Own t
We take ownership and
empower others through
trust, clear expectations,
and open communication.
Balancing innovation with
structure and diligence, we
deliver results with focus
and intention.
Be true
We promote an inclusive
and fair environment where
all are supported, and every
voice and contribution
is recognised. We act
responsibly with safety as a
fundamental, non-negotiable
aspect of our work, and we
do what is right.
Our vlues
In 2023, 30% of new hires were women
and 53% of new hires were African.
Tullow Oil plc Annual Report and Accounts 2023 – 35
Financial statements Supplementary informationStrategic report Corporate governance
Eqult nd trnsprenc
contnued
Advncn ncluson nd dverst
Inclusion and diversity are deining components of our
culture and the way we work and we are proud of our
culturally and geographically diverse team. We aim to
drive equitable opportunities for all employees in dierent
parts of our business, with particular focus on localisation
of African nationals and the advancement of women in
ourorganisation.
Diversity at Tullow 2023 2022 2021
All women 26% 26% 29%
Women in senior
management 21% 14% 10%
All Africans 55% 54% 52%
Africans in senior
management 8% 9% 10%
Local nationals
1
84% 82% 83%
Elevtn women n fnnce
We are a signatory to the Women in Finance Charter, which
demonstrates our ongoing commitment to improving the
gender diversity of our workforce, particularly improving
women’s representation at senior levels within our inance
function. In 2023, we maintained a level of 50% of female
representation in our senior inance team, exceeding our
goal of 45%.
Accelertn loclston
Our strategy of hiring local nationals and providing them
with professional development as we continue to grow our
business is one of the most important ways we can meet
our commitment to the socio-economic development
of our host nations. Our objective in Ghana is to achieve
90% overall workforce localisation, and we made further
progress in 2023 with six expatriates replaced with local
women and men new hires.
Sustnblt revew contnued
Promotn ethcs nd complnce
Our values, our Code of Ethical Conduct (CoEC) and
Modern Slavery Act Transparency Statement govern
the way we work and convey a clear message to our
employees, supply chain partners and external stakeholders
about our approach to ethical standards, anti-corruption,
compliance and human rights. Our Modern Slavery Act
Transparency Statement and our CoEC are available at
www.tullowoil.com/about-us/corporate-governance.
In 2023, every Tullow permanent employee and every
contractor completed our mandatory annual online CoEC
training, which now requires self-certiied conirmation of
understanding and agreement.
This year, we reactivated our Ambassador Ethics &
Compliance programme, which plays a vital role in
promoting our culture of doing the right thing and
upholding the law: 18 volunteers from across dierent
functions and regions support our Ethics & Compliance
team by serving as focal points and trusted advisers
to their colleagues on all matters relating to our Ethics
& Compliance programme. All ambassadors received
initial training and the group meets monthly for sharing
and discussion, including deep dive learning on a
speciic topic.
We urge our colleagues to speak up if they observe, or
think they observe, behaviour which they believe is not
in alignment with our CoEC, and we encourage them to
report concerns without fear of reprisal, anonymously
if they wish. We promoted our Speaking Up process
proactively in several communications campaigns
throughout the year to ensure everyone knows what to
report and how, and feels safe in doing so if needed. In
2023, the number and nature of speaking up cases reported
were similar to those in prior years. Following investigations
of these reports no sta dismissals were required.
In 2023, there was a total of
22Speaking Up cases.
2019 2020 2021 2022 2023
80
70
60
50
Loclston n Ghn
2
1. Local nationals means employees who work in a country which
matches one of their nationalities, where the employee has declared
dual nationalities. Data for 2022 and 2021 are re-stated.
2. Localisation refers to the extent to which jobs originally held by
expatriates are illed by Ghanaian nationals.
36 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Security and conlict/
misuse of force
Land rights and livelihoods
Sea rights and livelihoods
Labour rights (including fair
remuneration and protection
from child and forced labour)
Potential negative impact
of carbon osetting
Occupational health and safety/
hazardous working conditions
Community health, safety
andwellbeing
Anti-bribery and corruption
Our slent humn rhts ssuesAdvncn humn rhts
Building on our long history of respecting human rights
and our commitment to the UN Guiding Principles as set
out in our Human Rights Policy, in 2023, we completed a
detailed human rights saliency assessment. We created
a three-year roadmap that commits us to working to
enhance our human rights due diligence and prioritises
our eorts, based on eight identiied salient human rights
issues through implementation of a range of supporting
action plans.
We continued to raise awareness of human rights issues
including providing training for more than 70 employees
and over 140 suppliers. We also worked with an external
consultant, to assess and identify suppliers with potentially
high exposure to human rights risks. We rolled out the
supplier self-assessment process to 103 suppliers in Ghana
and invited them to a training session on human rights, to
ensure they understand our expectations and can seek
support to implement appropriate processes in their own
operations.
Our human rights roadmap priority actions scheduled for
2024, include:
• Updating our Human Rights Policy and continued
integration of human rights in our corporate policies
andstandards.
• Strengthening supply chain supplier assurance on
human rights.
• Reviewing grievance mechanisms and
remediationprocesses.
Dsclosn our tx contrbutons
We are committed to openness and transparency in all our
business dealings as we believe this builds credibility and
trust. For several years, we have maintained and disclosed
our payments to governments which we believe helps
to promote honesty in our industry, mitigate corruption
and encourage inclusive development. Tullow has
been a corporate supporter of the Extractive Industries
Transparency Initiative (EITI) since 2011, and we remain
committed to providing our stakeholders with details of
our annual taxation contributions. Our annual Payments to
Government Report provides details of our mandatory and
voluntary tax disclosures.
Summary of our contributions
($million ) 2023 2022 2021
Total global payments to
governments including payments
in kind 492 468 234
Total payments to the Ghanaian
Government including payments
in kind 319 341 172
Socio-economic contribution
including mandated and
discretionary payments to all major
stakeholder groups including
governments, suppliers and
communities 713 645 445
In the past three years (2021–2023),
Tullow has paid $0.6 billion in taxation
to the Ghanaian Government, and
purchased goods and services from
local suppliers in Ghana to the total
value of $0.6 billion.
Tullow Oil plc Annual Report and Accounts 2023 – 37
Financial statements Supplementary informationStrategic report Corporate governance
Ts Force on Clmte-relted Fnncl Dsclosures (TCFD)
We recognise the importance of climate change and we are committed to
providing investors and other stakeholders with information about its potential
impact on our business.
TCFD complnce sttement
In accordance with Listing Rule 9.8.6(8) our disclosures in relation to the TCFD recommendations are set out in this
section. We conirm that the disclosures are consistent with the TCFD recommendations.
Recommendation Status Page
Governnce
a) Describe the Board’s oversight of climate-related
risks and opportunities.
Compliant 39 and 40
b) Describe management’s role in assessing and
managing climate-related risks and opportunities.
Compliant 40
Strte
a) Describe the climate-related risks and opportunities
identiied over the short, medium and long term.
Compliant 40 to 43
b) Describe the impact of climate-related risks
andopportunities on business, strategy and
inancial planning.
Compliant 43 and 44
c) Describe the resilience of the strategy, taking into
consideration dierent climate-related scenarios,
including a 2°C or lower scenario.
Compliant 45
Rs
mnement
a) Describe the processes for identifying and
assessing climate-related risks.
Compliant 46
b) Describe the processes for managing climate-
related risks.
Compliant 46
c) Describe how processes for identifying, assessing,
and managing climate-related risks are integrated
into overall risk management.
Compliant 46
Metrcs nd
trets
a) Disclose the metrics used to assess climate-related
risks and opportunities in line with the strategy and
risk management process.
Compliant 47
b) Disclose Scope 1, Scope 2, and, if appropriate,
Scope 3 greenhouse gas (GHG) emissions, and
related risks.
Compliant 47
c) Describe the targets used to manage climate-
related risks and opportunities and performance
against targets.
Compliant 47
38 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Governnce
Our climate-related governance framework is set
out below.
Bord oversht of clmte-relted rss
nd opportuntes
The Board oversees the identiication, assessment, and
response to principal risks annually, including climate
change, and monitors the eectiveness of our risk
management process throughout the year. Our CEO, a
Board member, is ultimately responsible for ensuring our
strategy takes account of risks and opportunities relating
to climate change and energy transition.
The Board receives regular updates on climate-related
risks and opportunities from the Audit Committee and the
Safety and Sustainability Committee. As part of the Board’s
2023 annual strategy review the Director of Strategy,
Commercial and Business Development provided an
update on climate-change trends and their potential
impact on Tullow. The Board considered this update as
part of the 2023 strategy.
The Board has delegated responsibility for overseeing
the delivery of our Net Zero plan to the Safety and
Sustainability Committee. The Safety and Sustainability
Committee met ive times during 2023 and at each
meeting the Committee considered reports provided by
the Director of People and Sustainability and the Managing
Director of Tullow Ghana about our Net Zero plan and
progress to date.
Clmte overnnce frmewor
Board
• Ensures climate change is incorporated into Group strategy and is identiied as a principal risk.
• Receives reports from the Safety and Sustainability, Audit and Remuneration Committees at each Board meeting (see page 74).
Board Committees
Audit Committee
• Oversees climate-related
inancialdisclosures.
• Ensures eectiveness of risk
management processes and controls.
Safety and Sustainability
Committee
• Assesses potential climate-related
risks.
• Oversees the Group’s Net Zero plan.
Remuneration Committee
• Sets the Group scorecard including
targets to deliver the Group’s Net Zero
plan.
See pages to . See pages and . See pages to .
Senior Leadership Team
• Implements the Group strategy, including the identiication, assessment, management and disclosure of climate-related risks.
• Oversight and monitoring of climate-related risks and opportunities and their incorporation into the Group’s risk registers delegated
tospeciic SLT members as detailed below.
CFO
• Ensures
implementation
consistent
with the TCFD
recommendations
including disclosure
of the impact of
climate-related
risks in the inancial
statements.
• Oversees resilience
testing (see pages
57 and 58).
Director of People
and Sustainability
• Oversees delivery
of sustainability
strategy.
• Ensures eective
implementation of
actions to mitigate
climate-related risks.
• Leads discussions
with investors and
other stakeholders
in relation to Net
Zero strategy and
management of
climate-related risks.
Director of Strategy,
Commercial
and Business
Development
• Ensures climate-
related risks and
opportunities are
embedded in the
Group’s strategy.
• Assess GHG
emissions
arising from new
investments and
incorporates shadow
carbon pricing in
economic business
case analysis.
Ghana
Managing Director
• Oversees delivery
of GHG emissions
projects in Ghana.
• Embeds climate
reporting into
monthly operational
reporting.
General Counsel
• Ensures climate-
related risks are
integrated into
principal risks.
• Oversees Group risk
registers to ensure
business units
incorporate material
climate change risks.
• Ensures eective
controls are in place
to manage climate-
related risks.
Group Sustainability function and the Net Zero Task Force
• Support SLT in assessing and managing climate-related risks.
Tullow Oil plc Annual Report and Accounts 2023 – 39
Financial statements Supplementary informationStrategic report Corporate governance
Ts Force on Clmte-relted Fnncl Dsclosures (TCFD) contnued
Governnce contnued
Bord oversht of clmte-relted rss
nd opportuntes contnued
Our Board members bring a diversity of skills and
experience to guide the business in climate change
matters (see pages 70 and 71). They are responsible
for ensuring they remain suiciently informed of the
climate-related risks that could impact our business and
the broader energy sector and seek regular external
perspectives on climate change and the energy transition.
As part of the 2023 annual strategy review the Board
participated in a workshop led by an energy expert from
the Oxford EnergyInstitute.
The Board has embedded climate-related metrics in
our remuneration arrangements (see pages 91 and
95). On an annual basis it reviews our Climate Policy,
which sets out how we identify climate change-related
risks and opportunities and how these are integrated
into the business as we respond to the energy
transition. A copy of our Climate Policy is available at
www.tullowoil/sustainability.
Mnement’s role n ssessn
ndmnn clmte-relted rss
ndopportuntes
The SLT is responsible for implementing our strategy,
including the identiication, assessment, management
and disclosure of climate-related risks. Members of the
SLT are responsible and accountable for overseeing and
monitoring climate-related matters that fall under their
remit (see climate governance framework above), and
for embedding climate risks, opportunities, and scenario
assumptions into our risk management process. Each
member of the SLT reports to our CEO. The SLT provide
updates on our approach to managing climate change
to the Safety and Sustainability Committee at least three
times a year.
The Group Sustainability function and the Net Zero
Working Group (a multi-functional team) support
management in assessing and managing climate-related
risks. The Net Zero Working Group meets quarterly to
review the delivery of our Net Zero by 2030 strategy,
understand further decarbonisation opportunities, share
best practice from the wider industry and monitor the
external environment for climate change-related topics
that could impact our business.
Strte
Clmte-relted rss nd opportuntes
dentfed over the short, medum nd
lonterm
Our purpose is to build a better future through responsible
oil and gas development and our corporate and
sustainability strategies (see pages 16 to 19 and 26 to 37)
support its fulilment. In relation to climate matters, our
Net Zero by 2030 strategy provides an opportunity to
support host country governments to meet their nationally
determined contributions by reducing GHG emissions,
whilst also managing the wider transition risks as detailed
below. More detail on our Net Zero strategy is included
on page 33.
The UK’s Transition Plan Taskforce launched its Oil & Gas
Sector Guidance in November 2023 with the objective of
driving transparency and accountability for companies
and inancial institutions’ net zero commitments. We will
continue to assess transition plan guidance and the related
IFRS S2 Climate disclosures in relation to our purpose and
strategy and remain committed to transparently disclosing
our climate-related risks and opportunities.
Our climate-related risks and opportunities are detailed in
the table on pages 41 to 43. The process we implement to
identify them is described on page 46.
40 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
*Timeframe
Short:
0–5 years.
Medium: 5–10 years.
Long: 10+ years.
**Likelihood key
Remote:
Rare combination of factors required for incident to occur (<1% chance).
Unlikely: Rare combination of factors required for incident to occur (<5% chance).
Possible: Could occur if a number of additional factors are present (5–25%).
Likely: Could occur with one normally occurring additional factor (25–75%).
Extreme: Almost inevitable (+75%).
Trnston rss nd opportuntes
Category Description
Timeframe* &
Likelihood** Potential impact Mitigations
Current nd
emern
reulton
• Limitations on our ability
to implement our strategy
as a result of new climate
change regulation, including
international measures to
limit use of fossil fuels or
curtail GHG emissions.
Timeframe:
Short–Medium
Likelihood:
Possible
• Decreased proitability
due to implementation of
carbon pricing mechanisms
(unlikely a mechanism will
be implemented in Tullow
core geographies before
Scope 2 emissions have
peaked (by 2025)).
• Regulatory constraints
limiting hydrocarbon
commerce.
• Increased costs from
complying with new
regulations such as
carbon pricing or enforced
stranding of assets.
• Opportunity to decarbonise
business faster with
stronger business case.
• Use shadow carbon price $25/
tCO
2
e emissions for all new
investment decisions where
a compliance carbon pricing
mechanism is not available.
• Continue to work towards
realisation of our Net Zero by
2030 commitment.
• Engage with host countries’
relevant bodies to understand
and align with their long-term
strategies.
• Track developments on carbon
and greenhouse gas pricing
mechanisms and understand
oset opportunities within
hostcountries.
• Undertake accurate,
independently assured
emissions accounting.
• Engage with industry
associations to keep track
ofdevelopments.
• Ensuring compliance
withdisclosure regulations
andstandards.
Fnncl
• Perception of increased
risks relating to the oil and
gas sector, or our strategy.
Timeframe:
Short–Medium
Likelihood:
Possible
• Increased cost of capital
orinsurance.
• Reduced, or more
conditional, access to
capital or insurance.
• Shareholder activism.
• Longer-term opportunity
to diversify capital sources
following successful
decarbonisation strategy.
• Target more diversiied sources
of inancing.
• Reducing total debt to
reduceinancing costs and
need for capital.
• Continue to implement our Net
Zero by 2030 strategy.
• Set, and provide investors with
regular progress updates in
relation to, our decarbonisation
plan.
• Reduce cost base to be
competitive in lower oil price
environment.
• Continue to explore measures
to reduce the carbon intensity
of our portfolio to support
diversiication of inancing.
Technolo
• Competitors decarbonise
their businesses and
transition to renewable
energy sources quicker
through eective use of
technology.
• Acceleration of transport
electriication, displacement
of fossil fuels in power
generation, enhanced
energy eiciency and
behaviour change may
speed up the decline of
hydrocarbon demand.
Timeframe:
Medium–Long
Likelihood:
Likely
• Accelerated oil demand
peak and a subsequent
reduction in demand.
• Challenges to our business
strategy and alignment with
broader energy transition
goals including shareholder
activism, reduced or more
costly access to capital and
reputational damage.
• Reduction in supply chain
Scope 3 emissions.
• Benchmark against peer group
carbon intensity.
• Monitor technology advances
aimed at improving energy
eiciency and lowering carbon
intensity.
• Continue to explore measures
to reduce the carbon intensity
of our portfolio.
• Continue to utilise scenario
analysis and monitor global
energy outlook to inform
business strategy.
Tullow Oil plc Annual Report and Accounts 2023 – 41
Financial statements Supplementary informationStrategic report Corporate governance
Ts Force on Clmte-relted Fnncl Dsclosures (TCFD) contnued
Category Description
Timeframe* &
Likelihood** Potential impact Mitigations
Reputton
• Reputational damage due
to the failure to mitigate
the carbon intensity of our
business or implement
a credible emissions
reduction strategy.
Timeframe:
Short–Medium
Likelihood:
Possible
• Negative impact on
shareprice.
• Shareholder activism.
• Challenges in attracting and
retaining talent.
• Reduced, or more conditional
access to capital.
• Reduced or more
conditional access to
newlicences.
• Loss of revenue.
• Communicate regularly with
all stakeholders and provide
inancial impact information.
• Continue to implement our
Net Zero by 2030 strategy.
• Engage with host
governments to ensure
understanding and alignment
with our Net Zero 2030
strategy.
• Ensure climate-related risks
and opportunities are factored
into all new investment
decisions.
Lel
• Litigation, including class
actions from communities
and other stakeholders,
relating to climate-
related matters including
misrepresentation of carbon
neutral products, failure to
meet Net Zero goals and
the impact of operations on
climate change.
Timeframe:
Short–Long
Likelihood:
Possible
• Increased legal costs.
• Reputational damage.
• Potential restriction of
producing assets and/or
exploration activity.
• Criminal prosecution, severe
ines or penalties.
• Requirement to set more
ambitious decarbonisation
targets.
• Transparent disclosure of
climate risks to investors and
other stakeholders.
• Undertake accurate,
independently assured carbon
accounting.
• Clear communication of
Tullow’s strategy and the role
of carbon osets to meet our
Net Zero target.
• Continue to work to
implement our Net Zero by
2030 strategy.
• Engage with host
governments and wide
network of stakeholders to
ensure understanding and
alignment with our Net Zero
2030 strategy.
• Provide employees with
regular sustainability updates
which continue to emphasise
the critical importance of
delivering our Net Zero by
2030 strategy.
Mret
• Ongoing oil market
uncertainty, particularly
given the likely structural
shift in oil use in the
decades after 2030.
Timeframe:
Medium–Long
Likelihood:
Likely
• Changes in product supply
and demand.
• The repricing of carbon-
intensive assets and more
rapid asset impairment.
• Potential stranded assets
due to impairment arising
from lower oil price.
• Reduced cash low from
lower oil price.
• Increased costs due to pricing
eects on supply chain.
• Stress test our portfolio to
ensure its core assets are
resilient at lower oil price levels.
• Reduce cost base to be
competitive in lower oil price
environment.
• Continue to implement our
Net Zero by 2030 strategy.
• Engage with host
governments to ensure
understanding and alignment
with our Net Zero by 2030
strategy.
• Maintain watching brief on
market conditions to assess
potential pricing eects across
the business.
Strte contnued
Trnston rss nd opportuntes contnued
42 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Phscl clmte rss
We assess acute physical climate impacts on our existing assets and incorporate meteorological and climate conditions
into operational design considerations.
We will continue to increase our understanding of primary and secondary physical risks across our core operations and
secondary risks within our supply chain.
Category Description
Timeframe* &
Likelihood** Potential impact Mitigations
Acute
• Physical risks include heat
waves, drought, lash
looding, coastal looding
and increased storm
frequency.
1
Timeframe:
Short–Long
Likelihood:
Likely
• Rising temperatures and
frequent heatwaves have
the potential to increase
costs and impact worker
health and safety.
• Threat to infrastructure
from more extreme weather
events and looding lead to
increased insurance costs.
• Conlict in water-stressed or
climate-impacted regions
impacts operations, social
licence to operate, political
stability, and potential. loss
of production.
• Business continuity risk due
to increased storms at ports
making access to oshore
vessels more challenging.
• Inability to access
onshore equipment and
consumables that support
our oshore operations
impacting production
and resulting in increased
underwriting costs.
• Proven, tested and eective
business continuity and crisis
management plans and
preparedness.
• Insure core assets.
• Review and update
vulnerability of core operated
and non-operated production
assets to acute and chronic
physical risk.
• Identify and assess impact
of physical risks on inances,
operations risk and wider
business.
Chronc
• Rising sea levels, warming
ocean temperatures and
increased ground surface
temperatures.
Timeframe:
Long
Likelihood:
Likely
• Increased sea temperatures
impact water use in
operations and sustained
heat impacts may impact
worker health and safety.
• Conlict in water-stressed or
climate-impacted regions
impacts operations, social
licence to operate, political
stability, and potential loss
of production.
• Review and update
vulnerability of core operated
and non-operated production
assets to acute and chronic
physical risk.
• Identify and assess impact
of physical risks on inances,
operations and wider
business.
1. Based on research we commissioned Verisk Maplecroft to undertake on the following production assets: Ghana (oshore production, onshore
logistics and oice sites), Guyana (oshore licence area, onshore oice site), and Kenya (onshore ield development area and oice site, Lamu
Port). As part of the research, considered future climate scenarios to 2050 based on the Representative Concentration Pathways developed by the
Intergovernmental Panel on Climate Change (IPCC).
Impct of clmte-relted rss on our busness, strte ndfnncl plnnn
We assess the impact of climate-related risks and opportunities on our business by analysing a range of metrics including
the impact on proitability, access to new markets, and cost and access to capital.
We also analyse the impact of oil prices as oil price luctuation has the most impact on our business. This approach aligns
with the metrics we use to measure our performance and the information we provide to our investors.
Using the International Energy Agency (IEA) energy scenarios below, we assess the impact on operational cash low
(OCF) generated from our existing production portfolio over 1, 5, and 10 years, which is consistent with our viability
assessment (see below).
Tullow Oil plc Annual Report and Accounts 2023 – 43
Financial statements Supplementary informationStrategic report Corporate governance
Ts Force on Clmte-relted Fnncl Dsclosures (TCFD) contnued
Strte contnued
Impct of clmte-relted rss on our busness, strte ndfnncl plnnn contnued
IEA scenros used to test mpct on OCF
Scenario Key assumptions
Net zero b 2050 (NZE)
• Oil and gas demand 50% of 2020 level.
• No new oil and gas ields approved for development, with producers focusing on output from
existing assets.
Announced pledes
(APS)
• Countries’ net zero commitments lead to peak oil demand in 2024.
• New oil and gas projects needed with shorter lead times and payback periods.
Stted polces
(STEPS)
• Global oil demand peaks in 2035.
• New oil and gas projects needed with shorter lead times and payback periods.
The impact to OCF per annum is calculated as a percentage for each period and reported against three broad bands of
income (see below). We do not consider future developments or exploration opportunities as it is diicult to be speciic
about the impact of the scenarios due to the high degree of uncertainty associated with future growth.
OCF Impact 1 year 5 years 10 years
Stated policies
-8% 7% 15%
Announced pledges -19% -11% -11%
NZE -37% -32% -37%
Positive Loss of up to 10% Loss over 10%
The oil price planning assumptions we apply, as part of our annual business planning process, are generally higher
than the IEA scenarios, with the exception of the STEPS scenario from 2024 onward. Our assumptions are informed
by a range of external forecasts and our in-house expertise, which we use to determine an appropriate planning
assumption. Given the STEPS scenario is a conservative benchmark for future oil prices, relecting global policies and
implementing measures adopted as of the end September 2022, we consider our current planning assumptions to
be a fair consideration of oil market conditions over the medium term. Based on the oil price trajectories in the APS
and NZE scenarios, the IEA predicts a more challenging oil price environment should the assumptions within these
scenarios happen.
To complement our assessment of oil price impacts on OCF, we incorporate the IEA NZE emerging markets shadow
carbon price scenarios into decisions about new investments and our annual business planning cycle.
As calls for compliance-based carbon pricing mechanisms increase we continue to monitor carbon pricing mechanisms,
including emissions trading schemes, carbon taxes and carbon border adjusted mechanisms to understand the potential
impact on Tullow.
For the irst time this year we have also considered the impacts of an increased cost of capital on our business, by
running scenarios on the weighted average cost of capital. This relects our ongoing assessment of how we can access
diversiied forms of capital, that might be more expensive, to support delivery of our strategy.
In the coming year we will undertake further assessments to understand the amount and extent of our assets that are
vulnerable to climate-related physical risks. We expect this work to be completed by the end of the calendar year 2024.
The climate-related risks and opportunities that could have a potential impact on our business are detailed in the tables
on pages 41 to 43. The potential inancial impacts are set out on the next page. Further information is included in note 25
to the inancial statements.
44 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Risk Timeframe Financial Impact Methodology
Substntve
trnston rss
Market – the NZE
Scenario would trigger
reductions in cash
lows resulting in a
write-o to net book
value of intangible
exploration and
evaluation assets.
Medium
(5years+)
$229 million Write-os under the NZE Scenario are determined
by an assessment of the impact on net book value
due to the dierence between Tullow’s internal and
IEA’s projected oil price.
Market – the NZE
Scenario would trigger
reductions in cash
lows resulting in an
additional impairment
to property, plant and
equipment.
Medium
(5 years+)
$174 million Impairment of physical assets under the NZE
Scenario is determined by calculating the impact
of reduced oil price on revenues generated by
operated production assets in Ghana.
Market – the NZE
Scenario could
expedite the energy
transition resulting
in decommissioning
taking place earlier
than anticipated.
Long
(10 years+)
Cessation of production
assumptions would
accelerate Ghana by
0–1 years; Gabon 0–9
years; Espoir 4 years.
The risk on the timing of
decommissioning activities
is limited, supported by
production plans to fully
produce ields in the
foreseeable future.
Decommissioning timelines could be brought
forward under the NZE Scenario as a result of
decreased cash lows from reduced oil price.
Quantiication of this impact is via an assessment
of the economic cut-o point for each asset when
using the lower NZE scenario projected oil prices.
Substntve
phscl rs
Onshore facilities
which support Ghana
production operations
may be impacted by
acute physical risks
including an increased
risk of looding or ire
associated with more
intense weather events.
Acute
climate-
related
physical risks
In a worst case lood/
ire event the business
could experience an
increase in premium or lost
production primarily arising
from supply chain risks
(increased length of time
to fabricate spares/critical
equipment).
Insurable loss of $223
million: items are
split between circa 11
onshore warehouse or
storage facilities, so the
accumulation per site is
much smaller (largest site
circa $60 million).
The value of consumables in our onshore Ghana
Supply Hubs which may be aected by an
increasing frequency of lood events or other
natural catastrophes, e.g. ire.
Storage locations and values are regularly checked
to ensure appropriate insurance cover is in place.
The impact to our business would be realised via
an increase in premium and/or lost production
with a corresponding impact to OCF, primarily as
a result of length of time to source and replace
critical spares and equipment. While these risks
are considered to be unlikely, an inventory of
critical spares and equipment required to maintain
production is under way for 2023 to further mitigate
this risk.
Reslence of our strte, tn nto consderton dfferent clmte-relted scenros,
ncludn 2°C or lower scenro
Based on our assessment of the likely impact of climate-related risks and opportunities on our business, together with the
actions we are taking to mitigate risk, our strategy is resilient and positions us well to fulil our purpose.
As highlighted in the tables on pages 41 to 43, our climate change risks are likely to materialise over the medium to
long term. Based on our analysis, transition risks from oil demand and price decline, carbon price exposure and access
to and cost of capital are likely to be the most material. Our strategy takes these factors into account and focuses on
infrastructure-led opportunities with short payback periods that align with host government policies.
Furthermore, to ensure our business remains resilient in a low oil price environment and generates the expected OCF,
we focus on operational excellence and run our business within a strict cost framework, allocating capital in a disciplined
way. Whilst we recognise that the IEA NZE and Announced Pledges scenarios oil price assumptions would have a
negative impact on our OCF, the medium- to long-term assumptions for the STEPS scenario would have a positive impact
on our OCF.
The Glencore facility agreement, that we secured in November 2023, demonstrates our ability to access long-term
capital from a variety of sources and is a strong endorsement of our strategy and business plan.
Tullow Oil plc Annual Report and Accounts 2023 – 45
Financial statements Supplementary informationStrategic report Corporate governance
Rs mnement
Descrbe the processes for dentfn nd
ssessn clmte-relted rss
The climate-related risks that could impact our business
were initially identiied during a workshop that was held
in 2021. Participants in the workshop, which was led
by the sustainability team, included members from oil
marketing, production, risk, legal and exploration teams.
Our insurance team, part of Group Risk, also assess the
climate impacts to inventory held in onshore warehouses
(see more detail on page 45) and our corporate inance
team assess the climate change associated risks of access
to and cost of capital when seeking new forms of capital
(see page 41).
This year, through engagement with key internal and
external stakeholders, we commenced a double materiality
assessment to ensure that our sustainability strategy
continues to address stakeholder issues and changes in
our business and its operating environment (see page 27).
As part of this process, our transition and physical climate-
related risks, and their inancial impact, were assessed
and the risks detailed on pages 41 to 43 above were
reconirmed. These risks were subsequently considered by
the SLT and the Board as part of the annual strategy review
process. Further information about the double materiality
process can be found in our Sustainability Report which is
available at www.tullowoil.com/sustainability.
Our process for identifying and assessing climate-related
risks considers information provided by industry bodies
including the IEA and International Petroleum Industry
Environmental Conservation Association, the World Bank
and other industry and professional bodies. We also attend
workshops provided by external advisers and during the
year our legal function participated in two workshops
on climate-related legal risks, led by Freshields. We also
consider the ongoing work of the Financial Stability
Board, Network for Greening the Financial System and
key stakeholders of our host countries to inform our
assessment and understanding of risk in core regions of
operation and for various aspects of our business.
Descrbe the processes for mnn
clmte-relted rss
Descrbe how processes for dentfn,
ssessn, nd mnn clmte-relted
rss re nterted nto overll rs
mnement
‘Climate change’ is one of our principal risks (see page 54)
the management of which forms part of our overall risk
management process which is described on pages 48 to
51. This principal risk covers some aspects of the climate-
related risks described on pages 41 to 43 above including:
• Net Zero by 2030.
• Eliminating routine laring by 2025.
Other climate-related risks, including regulatory, legal
and physical are managed by functional teams including
legal, treasury and sustainability and included within risk
registers. In relation to our investment decision process,
we do take account of GHG emissions and shadow carbon
pricing, and we are beginning to embed the assessment of
carbon intensity across our portfolio.
As we continue to evolve our risk management processes
through 2024, we will look to embed the identiication,
assessment, and management of the above climate-
related risks in our risk management framework.
Ts Force on Clmte-relted Fnncl Dsclosures (TCFD) contnued
46 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Metrcs nd trets
Metrcs used to ssess clmte-relted rss
nd opportuntes n lne wth strte
ndrs mnement process
The metrics we used to assess and monitor our climate-
related risks and opportunities are outlined below.
Trnston
rss
Emissions
• Operated Scope 1 and 2 emissions
• Net equity Scope 1 and 2 emissions
• Scope 3 emissions
• Net equity carbon intensity of production
Decarbonisation spend
• Capex on decarbonisation projects
• Carbon oset spend
Carbon pricing
• Proportion of GHG emissions subject to
carbon pricing mechanisms
• Internal carbon price used for new
investments/acquisitions
Phscl
rss
• Production assets in areas of water stress
• Maximum anticipated single site
insurable loss to onshore facilities due
tophysical risk (lood, ire)
Metrics to track the delivery of elimination of routine laring
and the Ghana carbon oset project are determined by
the Board annually and are embedded in the sustainability
metric within our corporate scorecard (see pages 20 and
21). In 2023, the sustainability metric contributed 5% of the
total scorecard. Performance against all scorecard metrics
is tracked throughout the year, and the Board receives
regular progress updates.
Scope 1, Scope 2, nd, f pproprte, Scope
3 reenhouse s (GHG) emssons, nd
relted rss
We currently disclose our operated and net equity Scope 1
and 2 emissions and eight of the ifteen Scope 3 emissions
categories set out in the Greenhouse Gas Protocol
Corporate Standard (see page 34).
Trets used to mne clmte-relted
rss nd opportuntes nd performnce
nst trets
We are committed to achieving Net Zero by 2030 on
our Scope 1 and 2 net equity emissions, with an interim
target to reduce emissions by 40% by 2025, as part of
our commitment to eliminate routine laring by this date
(see page 33).
Tullow Oil plc Annual Report and Accounts 2023 – 47
Financial statements Supplementary informationStrategic report Corporate governance
Rs mnement nd prncpl rss
Effectively managing our risks and opportunities is critical in ensuring we
achieve our strategic objectives and protect shareholder value.
Rs oversht nd overnnce
A risk-focused culture and consistent risk management framework is embedded across Tullow at all levels and is driven
by the Board. The Board is responsible for ensuring we maintain an eective risk management and internal control
system and it works closely with the SLT to ensure this is in place. The Board also oversees the processes we operate to
identify, assess and mitigate the risks that could aect our business, including those risks that could threaten our strategy,
operating model, performance, solvency and liquidity.
The Audit Committee is responsible for overseeing the process to identify principal and emerging risks and ensuring that
they are managed eectively. The Audit Committee is also responsible for overseeing our internal audit programme and,
with the support of the SLT, undertakes an annual review of the eectiveness of the internal controls we implement. The
latest review was undertaken in February 2024 and reported to the Audit Committee and the Board on 28 and 29 February,
respectively (see pages 85 and 86).
The SLT is collectively responsible and accountable for the risk management processes that operate across Tullow, with
individual members taking ownership for risks that fall in their business area.
Rs mnement frmewor
Our risk management framework takes a ‘top-down, bottom-up’ approach and is embedded throughout Tullow.
This structure ensures ownership and responsibility for identiication, assessment and management of key risks and
opportunities at all levels of the Company. Our risk governance framework is set out below.
Rs mnement frmewor
Board
Top down / Bottom up
• Sets risk appetite.
• Oversees identiication, assessment of and response to principal risks.
• Monitors eectiveness of risk management process.
Audit Committee
• Oversight of risk management and internal control processes.
• Oversees independent, objective and competent internal audit function.
• Oversight of compliance with legal, ethical and regulatory expectations.
Senior Leadership Team
• Sets tone for an eective risk management culture.
• Identiies and assesses principal risks.
• Determines principal risk mitigation actions and monitors their eectiveness.
• Oversees and supports business leadership’s risk identiication processes and challenges their risk assessments.
Business management Business leadership Internal audit
• Identiies risks.
• Implements controls to
manage andmitigate risks.
• Sets framework and embeds
eective risk management
practices.
• Challenges business
management on risks identiied
and their management.
• Monitors compliance with
fundamental standards.
• Undertakes regular reviews.
• Undertakes risk-based internal
audit reviews of governance,
and internal controls across all
levels of the Group.
• Identiies areas for improvement
and monitors implementation of
actions to address.
First line of defence
(ownership and management)
Second line of defence
(risk management oversight)
Third line of defence
(independent assurance)
48 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Rs ppette
The Board sets Tullow’s risk appetite. In doing so it recognises that risk cannot be fully eliminated and that certain risks
must be accepted if we are to deliver our strategy. On an annual basis the Board reviews our risk appetite to ensure that it
relects the current external and market conditions. The last review was undertaken in February 2024.
The level of risk we are prepared to tolerate in relation to each of our risk categories and principal risks is detailed in the
table below.
Risk category and strategy Risk appetite
Strategy
To deliver our strategy and value to stakeholders we endeavour to be nimble,
opportunistic and adaptable to changing market conditions.
Principal risks
1
Business plan not delivered
3
Value not unlocked
ACCEPT investing in developing economies without established oil
and gas industry; but do NOT ACCEPT investing in No-go areas as
determined by the Board.
ACCEPT current asset concentration and balance between short
and long-term investments; but REFRAIN FROM excessive further
concentration in signiicant E&A or development assets.
Financial
We adopt a prudent approach to inancial planning including diversifying our
funding sources and their maturities, applying disciplined capital allocation,
hedging our oil revenues and maintaining debt levels at a manageable level.
Principal risks
4
Geopolitical risk
7
Insuicient liquidity and funding capacity to sustain the business
ACCEPT temporary erosion of inancial strength due to adverse
market conditions provided a recovery plan in place.
PREVENT signiicant impact of oil price volatility on revenue.
PREVENT signiicant unexpected costs, write-os or loss of
signiicant revenue sources.
Organisation
To ensure optimal business performance we promote a lexible,
performance-driven and risk-conscious culture aimed at delivering our
business objectives. We also maintain a sustainable and diverse workforce
with strong leadership and robust succession planning.
Principal risks
8
Capability cannot be attracted, developed or retained
PREVENT misalignment of strategy with culture and leadership.
Health and safety and security
At all times we must operate in a manner to reduce risk to as low a level as is
reasonably practicable.
Principal risks
2
Asset integrity breach
6
Major accident event
PREVENT major environmental, health and safety issues and
securityincidents.
Stakeholders
We must nurture relationships with host governments and all stakeholders
based on integrity, mutual trust, and transparency, and conduct our business
dealings with a goal of Shared Prosperity.
Principal risks
4
Geopolitical risk
5
Climate change
ACCEPT degree of investor volatility but PREVENT deterioration in
relationships as a result of miscommunication, error or abuse.
PREVENT escalation of stakeholder disputes, but ACCEPT the
need to protect the Company’s rights and interests in relation to
fundamental issues e.g. sanctity of contracts, stabilisation clauses,
and issues jeopardising commerciality of assets.
Cyber
We plan, design, and operate information security systems to eliminate risk
where practical and otherwise to as low a level as reasonably possible.
Principal risk
10
Major cyber-disruption
PREVENT serious impacts from probable cyber attacks.
Conduct
We promote an ethical culture. It is the right thing to do and is essential if we
are to maintain our reputation as a trusted partner.
Principal risk
9
Compliance or regulatory breach
PREVENT serious breaches of code of conduct, major laws
orregulations.
Tullow Oil plc Annual Report and Accounts 2023 – 49
Financial statements Supplementary informationStrategic report Corporate governance
Rs mnement contnued
Rs dentfcton nd ssessment
Management within each business unit are responsible for identifying the key risks in their area and for establishing
appropriate and eective management processes to control and mitigate the impact of such risks. All identiied business
unit key risks are consolidated into the business unit risk registers, which business unit management review and assess on
at least a quarterly basis taking into account likelihood of occurrence and potential impact in relation to the Company’s
risk categories (see above).
The leaders of each business unit review and re-assess the business unit risk registers covering their functional areas to
evaluate the strength of existing controls and determine whether mitigation actions need to be revised to ensure that risk
levels continue to align with the Company’s risk appetite as set by the Board.
Using the business unit risk registers, the SLT identify the principal risks which can be either a single risk or a set of
aggregated risks which, taken together, could have a signiicant impact on our strategy, performance or solvency.
Members of the SLT are assigned ownership of and are accountable for stewardship of each of the principal risks. The
SLT reviews and discusses the principal risks bi-annually to determine whether mitigations are being eectively executed
within the agreed timeframe and whether changes should be made to the principal risks, including whether any risks
should be elevated into the principal risk category.
The principal risks, together with the controls and actions to mitigate their impact, are discussed by the Board bi-annually
to provide ‘top-down’ challenge and support. The result of this review is communicated back to the SLT and the business
unit leaders to facilitate risk awareness and eective decision making throughout the organisation.
Our prncpl rss
Our current principal risks are set out on pages 52 to 56.
During the year, the Company’s risk proile has been closely monitored. The external economic and political landscape
including the war in Ukraine, inlationary pressures and oil price volatility have not resulted in any new risks or material
changes to existing risks.
Our assessment of the likelihood of our principal risks occurring and the potential impact after taking into account the
risk management processes and mitigation actions we implement is summarised below.
Prncpl rss
Remote Likelihood Likely
Low Impact Catastrophe
1
2
3
4
10
5
6
7
8
9
Principal risks
1. Business plan not delivered
2. Asset integrity breach
3. Value not unlocked
4. Geopolitical risk
5. Climate change
6. Major accident event
7. Insuicient liquidity and funding capacity to
sustainbusiness
8. Capability cannot be attracted, developed or retained
9. Compliance or regulatory breach
10. Major cyber-disruption
50 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Emern rss
Emerging risks are discussed by the Board and the SLT periodically throughout the year and formally considered every six
months as an integral component of the principal risk update.
Evoluton of rs mnement processes durn the er
Development of our risk management framework is an ongoing process and during the year we have continued to
strengthen our processes and controls.
Buldn more
nterted rs
mnement
sstem
During 2023 we have been working to
develop andimplement a new enterprise risk
managementsystem to replace our spreadsheet-
based methodology. The new system will
embedintegrated and consistent business
riskmanagement across all our operations.
Inparticular,it will allow us to match strategic
andcorporate objectives to risks, eectively
manage risk across dierent business functions
byapplyingconsistentcontrols to similar risks
andenhanceinternal reporting.
Tullow Oil plc Annual Report and Accounts 2023 – 51
Financial statements Supplementary informationStrategic report Corporate governance
Our prncpl rss
Risk, category, link to strategy andowner
Residual risk
proile change
during the year Mitigation
1
Busness pln not delvered
Causes and threats:
• A decline, or problems with the performance, of wells or facilities could
result in not meeting planned production levels.
• A failure to grow the business via targeted investment in existing ields
and/or investment in new ields.
• Inability to get partner approval for Tullow activity proposals
(operatedportfolio).
• Production equipment failure.
• Unsuccessful appraisal and exploration activity.
• Inability to inluence operator schedule (non-operated portfolio).
Consequences:
• Reduction in production, revenue and cash low.
• Longer-term production targets not met.
• Impairment of asset values.
• Damage to stakeholder reputation.
• Cross-discipline integrated performance
management and planning including clear
KPIs and forums.
• Maintenance and integrity management
plans covering all equipment classes,
Management and oversight of JV Partners to
ensure plans are implemented eectively.
• Jubilee Expansion project, Jubilee North
East (TEN Enhancement Projects delayed
oronhold).
• Continue to invest in non-operated portfolio
and M&A to add production assets.
• TRACS annual reserves audit.
• Management of operations & maintenance
and control of contractors.
Category: Strategy
Owner:
Wissam Al-Monthiry, Ghana Managing Director
Jean-Medard Madama, Director of Non-Operated and Exploration
2
Asset ntert brech
Causes and threats:
• Aged infrastructure and under investment in upkeep may result in
equipment failure.
• Failure to adhere to procedural requirements resulting in equipment
operation outside safety limits.
• Leakage from wells planned to be decommissioned (non-operated portfolio).
• Lack of critical equipment or spares.
• Lack of operator integrity in non-operated portfolio.
• Project-based execution or delivery failure.
Consequences:
• Reduction in production, revenue and cash low.
• Extensive damage to facilities.
• Damaged relations with JV partners and host governments.
• Damaged reputation as a credible asset operator.
• Asset and well integrity maintenance
programmes are in place.
• Oversee contractor activities.
• Undertake root cause failure analysis
forevery incident and capture near miss
lessons learned.
• Well-developed emergency response plan
and incident management framework and
associated training programmes operated.
• Audit non-operated joint venture
partneroperators.
• Seek expert external advice when
appropriate (e.g. leaking wells).
Category: Health & safety and security
Owner:
Wissam Al-Monthiry, Ghana Managing Director
Jean-Medard Madama, Director of Non-Operated and Exploration
Strategy key
Operational excellence Capital eiciency Business growth
Residual risk proile change
No change Increasing risk Decreasing risk
52 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Risk, category, link to strategy andowner
Residual risk
proile change
during the year Mitigation
3
Vlue not unloced
Causes and threats:
• Non-delivery of Ghana gas price and payment guarantees.
• Not progressing Kenya project.
• Inability to deliver acquisitions.
• Unable to mitigate Espoir cash low proile via sale of asset.
• Failure to deliver exploration farm-downs to reduce capex exposure.
Consequences:
• Loss of gas revenue precipitates early COP and decommissioning costs.
• Loss of value upside from Kenya of c.$300 million.
• Failure to mitigate Ghana concentration risk and resulting share
priceimpact.
• Cash low impact of c.$150 million, from not selling Espoir asset.
• Exposure to exploration costs in Côte d’Ivoire, Argentina and Guyana of
$50–$100 million.
• Review and approval of inal Gas Sale
Agreement by SLT andBoard.
• Capital allocation process (following
agreement of commercial terms).
• Critical actions deined in scorecard.
• Ongoing review and approval of Kenya
project and structure by SLT and Board.
• Ramp-up of business development
activitiesand pursuit of multiple
simultaneous target acquisitions.
• MPR, review and assurance processes
(following agreement of commercial terms).
• Joint working teams set up in support of
Non-Operated and Exploration to optimise
production opportunities and address
capexexposure.
Category: Strategy
Owner:
Stuart Cooper, Director of Strategy, Commercial and
BusinessDevelopment
4
Geopoltcl rs
Causes and threats:
• Political changes in the West Africa region, elections and outcomes.
• Natural resources targeted for unreasonable and changing iscal or
regulatory demands by host governments.
• Failure to manage relationships with key host government stakeholders
or regulators.
• Economic unrest, especially in Africa.
• Supply chain disruption.
• Ownership of adjacent licence blocks.
Consequences:
• Delayed decision making by host governments and local partners and
security arrangements adversely aected.
• Eicient operations obstructed.
• Delayed implementation of growth plans.
• Increased costs and inancial loss, demand for unitisation payments
from adjacent block owners.
• Ghana Revenue Authority tax demands.
• Extensive relationship management plan
in place to manage relationships with
governments, including Ghana Advisory Board.
• Our business plans are aligned with
nationalpriorities.
• Communication of the positive impact of our
activities on host nations and communities.
• Robust stabilisation clauses are included in
our Petroleum Agreements and Production
Sharing Contracts to protect against
unreasonable demands.
• Closely monitor political and economic
developments in Ghana.
Category: Stakeholder and Financial
Owner:
Jean Medard Madama, Director of Non-Operated and Exploration
Tullow Oil plc Annual Report and Accounts 2023 – 53
Financial statements Supplementary informationStrategic report Corporate governance
Risk, category, link to strategy andowner
Residual risk
proile change
during the year Mitigation
5
Clmte chne
Causes and threats:
• Regulatory constraints, carbon pricing mechanisms, low oil price or
conditional access to capital impacting operations or operating cash low.
• Failure to align with broader energy transition goals that challenge
business strategy.
• Inability to eliminate routine laring by 2025.
• Inability to deliver nature-based carbon osets.
• Oil price changes.
Consequences:
• Impacts our ability to implement our strategy, our licence to operate and
our reputation.
• Reduces access to capital including shareholders becoming reluctant
to invest.
• Assets become stranded or uneconomic.
• Lack of perceived commitment to sustainability impedes our ability to
attract and retain talent.
• Operations are impacted by lack of available equipment or supplies due
to physical risks i.e. looding.
• Stress test our portfolio to ensure core assets
are resilient in dierent oil and carbon price
environments.
• Implement our plan to achieve Net Zero by
2030 (Scope 1 and 2 net equity) (see page
33).
• Climate Policy agreed by the Board annually.
• Continue to engage with host countries to
understand and align with their long-term
energy transition strategies, including Paris
Nationally Determined Contributions.
• Climate considerations embedded in
decision making.
• Extensive stakeholder engagement to
manage impacts.
Category: Stakeholder
Owner:
Julia Ross, Director of People and Sustainability
6
Mor ccdent event
Causes and threats:
• Asset integrity failures and/or extensive damage to facilities.
• Our, or our contractors’, failure to meet safety standards or adhere
toprocedural requirements.
• Operation of equipment outside safe operating limits leading
toamajorincident.
• Ageing infrastructure leading to equipment or piping failure.
Consequences:
• Loss of life, environmental damage and potential loss of production.
• Loss of revenue and increased costs.
• Reputational damage.
• Loss of licence to operate.
• Asset and well integrity and maintenance
programmes are in place, including regular
self-veriication and external certiication,
audit and assurance of integrity plans.
• Undertake root cause failure analysis for every
production loss and EHS incident and capture
lessons learned to prevent recurrence.
• Well developed emergency response plan
and incident management framework and
supporting training is in place.
• Robust EHS reviews are completed at all
stages of contract management process
including from speciication/pre-qualiication
through to contract closure.
• Active contractor engagement on safety
throughout life of contract including active
EHS forums to enable direct participation.
Category: EHS
Owner:
Wissam Al-Monthiry, Ghana Managing Director
Our prncpl rss contnued
54 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Risk, category, link to strategy andowner
Residual risk
proile change
during the year Mitigation
7
Insuffcent lqudt nd fundn
cpct to sustnbusness
Causes and threats:
• Oil price volatility.
• Failure to deliver targeted farm-downs of exploration assets and Kenya.
• Failure to deliver our business plan and inappropriate capital allocation.
• Global cost inlation.
• Unexpected operational incidents.
• Unable to reinance our debt.
Consequences:
• Erosion of balance sheet and revenues.
• Material negative impact on cash low.
• Restricts our ability to reduce debt and strengthen the balance sheet.
• Inability to meet our inancial obligations when they fall due.
• Developed strategy and business plan to
deliver strong cash low and deleveraging.
• Capital structure provides liquidity headroom
through to December 2024 even in a low oil
price environment.
• A disciplined approach to capital allocation
that focuses on cost control and prioritises
high-return and short payback investments
is adopted.
• A material commodity hedging programme
that protects against the impact of a sustained
low oil price environment is in place.
Category: Financial
Owner:
Richard Miller, CFO
8
Cpblt cnnot be ttrcted,
developed or retned
Causes and threats:
• Critical sta leave the organisation.
• Our lean and agile structure is dependent on a small number of key and
critical roles.
• Unable to adapt quickly to the changing oil and gas skills and
capabilities requirements and to identify sources of talent.
• Inadequate workforce planning.
• Employee value proposition does not meet employee demands.
Consequences:
• Diiculty in delivering our business plan.
• Loss of sta would increase pressure on remaining colleagues.
• Deterioration in the wellbeing of our colleagues, a poor working
environment and further attrition.
• Developed an enhanced employee
valueproposition.
• We actively engage with employees through
a variety of channels (see page 23).
• Regularly review the capabilities across the
extended leadership team, to ensure the
right skill set is in place to deliver our strategy
and to identify development opportunities.
• Oer competitive market-aligned
compensation and beneits.
• Agile organisation model able to adapt to
changing business needs.
• Talent management and strategic
workforceplanning.
• Succession planning.
Category: Organisation
Owner:
Julia Ross, Director of People and Sustainability
Tullow Oil plc Annual Report and Accounts 2023 – 55
Financial statements Supplementary informationStrategic report Corporate governance
Our prncpl rss contnued
Risk, category, link to strategy andowner
Residual risk
proile change
during the year Mitigation
9
Complnce or reultor brech
Causes and threats:
• Non-compliance with bribery and corruption legislation or contractual
obligations along with other applicable business conduct requirements.
• Regulatory action, an unsettled litigation/dispute or additional
futurelitigation.
• Increased Ghana government interest in contracting activity, pressure
on Tullow to not adhere to our standards.
• Third-party due diligence not completed adequately.
• Breach of sanctions.
• Failure to keep pace with regulatory change.
Consequences:
• Unplanned cash outlow due to payment of penalties and/or ines.
• Reputational damage and a loss of stakeholder conidence.
• Personal and corporate ines or prison sentences.
• SFO monitorship for up to three years.
• Loss of licence to operate.
• Adverse impact on share price.
• Strong anti-bribery and corruption
governance processes are in place as a
core element of the Ethics & Compliance
programme.
• Operate PermIntel compliance tracker
to monitor all regulatory and contractual
obligations.
• Regularly undertake third-party due diligence
procedures and assurance processes.
• Investigation procedures and an associated
Misconduct and Loss Reporting Standard are
in place.
• Regularly undertake anti-tax evasion risk
assessments and targeted employee
training.
• Established inancial controls and delegation
of authorities.
Category: Conduct
Owner:
Mike Walsh, General Counsel
10
Mor cber-dsrupton
Causes and threats:
• Major cyber-attack, internal or external.
• User actions, intentional or naïve, that compromise cyber security.
• Outsourced provider resources not able to deliver agreed service levels.
• Major ransomware outbreak within the Tullow network.
• Third-party information security breach.
Consequences:
• Limitations on our ability to operate.
• Financial loss, loss of stakeholder conidence, loss of production.
• High ransomware demands.
• Additional cost by way of ines or resolution of service.
• Trigger a major incident.
• Embedded a Security Incident Event
Management system across the
organisation.
• Established an Advanced Security Operations
Centre that provides 24/7 network and device
monitoring, alerts and responses.
• Run a security awareness programme
including regular sta susceptibility phishing
training and testing.
• Provide annual mandatory security
awareness training for all sta.
• Operate an independent technical assurance
programme.
• Installed technical network protection
access controls and network architecture
protocols.
Category: Cyber
Owner:
Mike Walsh, General Counsel
56 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Vblt sttement
Assessment perod
In accordance with the provisions of the UK Corporate Governance Code, the Board has assessed the prospects and
the viability of the Group over a longer period than the 12 months required by the ‘Going Concern’ provision. The Board
assesses the business over a number of time horizons for dierent reasons, including the following: Annual Corporate
Budget (i.e. 2024), Corporate Business Plan (5 years i.e. 2024–2028), long-term Business Plan (10 years). The Board’s
period of assessment for the purpose of the viability statement is ive years.
Assessment of the Group’s prncpl rss
In order to make an assessment of the Group’s viability, the Directors have made a detailed assessment of the Group’s
principal risks (see pages 48 to 56), and the potential implications these risks could have on the Group’s business delivery
and liquidity over the assessment period. This assessment included, where appropriate, detailed cash low analysis, and
the Directors also considered a number of reasonably plausible downside scenarios, and combinations thereof, together
with associated supporting analysis provided by the Group’s Finance team. A summary of the key assumptions aligned
to the Group’s principal risks and reasonably plausible downside scenarios can be found below. It should be noted that
some assumptions encompass multiple risks but have not been repeated to avoid unnecessary duplication.
Principal risks Base case assumption Downside scenario
Business plan
not delivered
Production is assumed to be in line with the
Corporate Business Plan.
5% reduction in production in each year.
Geopolitical risks The Group has assumed certain cash outlows
associated with tax exposures and provisions.
The Group has included an additional
$28 million in 2024 in relation to potential
outlows. The Group has not included any
outlows associated with a negative result
from the ongoing GRA arbitrations due to its
view on the merits of these cases.
Climate change Base case includes expenditure required to meet
2030 Net Zero commitment (a) decarbonisation
project cost to eliminate routine laring by 2025,
(b) nature-based solutions project cost to oset
hard to abate emissions.
The Group has considered an oil price
sensitivity in line with the IEA ‘Net Zero by
2050 Scenario’; see below.
Insuicient liquidity
and funding
capacity to sustain
the business
Oil price assumptions are based on the forward
curve at 31 December 2023 for two years,
followed by the Group’s Corporate Business Plan
assumption from 2026 onwards:
2024: $78/bbl 2025: $75/bbl 2026: $70/bbl
2027: $70/bbl 2028:$70/bbl
Operating costs and capital investment are
assumed to be in line with the Corporate
Business Plan.
The Group has analysed two downside
oil price scenarios; the irst is based on
the Directors’ assessment of a reasonably
plausible downside scenario:
2024: $70/bbl 2025: $70/bbl 2026: $65/bbl
2027: $65/bbl 2028: $65/bbl
The second is in line with the IEA ‘Net Zero
by 2050 Scenario’:
2024: $58/bbl 2025: $54/bbl 2026: $50/bbl
2027: $46/bbl 2028: $43/bbl
Operating costs are assumed to be 5%
higher than those included in the Corporate
Business Plan.
For detailed information on risk mitigation, assurance and progress in 2023 refer to the detailed discussion of risks on
pages 52 to 56.
For ‘ Asset integrity breach’, ‘Value not unlocked’, ‘Major accident event’, ‘Compliance or regulatory breach’, ‘Capability cannot
be attracted, developed or retained’, and ‘Major cyber-disruption’, the Group has assessed that there is no reasonably plausible
scenario that can be modelled in isolation or in combination with other risks from a cash low perspective.
Tullow Oil plc Annual Report and Accounts 2023 – 57
Financial statements Supplementary informationStrategic report Corporate governance
Concluson
The Group has $2.1 billion debt outstanding, maturing in 2025, 2026 and 2028. The Corporate Business Plan does not
project suicient free cash low generation to allow the Group to fully repay these debts when they fall due, and therefore
it will need to access debt markets within the viability assessment period.
In the base case, net debt and gearing are forecast to reduce suiciently such that the Directors are conident that the
Group will be able to secure the funding required to maintain adequate liquidity headroom throughout the viability
assessment period.
There is suicient liquidity for the next four years under the downside case, on the basis of securing the same amount of
funding as assumed in the base case. Management is focused on mitigating the risks around production, operating cost
increases and potential outlows associated with disputes in order to reduce the likelihood of these risks materialising,
or their impact in the event these risks materialise. Furthermore, the Directors have considered additional mitigating
actions that may be available to the Group, such as incremental commodity hedging executed in periods of higher oil
prices, alternative funding options, further rationalisation of the Group’s cost base including cuts to discretionary capital
expenditure, M&A, portfolio management and careful management of stakeholder relationships.
The IEA Net Zero case assumes a further reduction in short term oil price which if arose would result in a shortfall in
liquidity. In this scenario, management will adapt the business plan to maximise cash generation in the short to medium
term by deferring capital projects which will support the continuity of business. Based on expert forecasts for the short
term, management considers this scenario is unlikely to occur.
Based on the results of the analysis and the ability to mitigate some of the risks associated with the downside scenarios,
the Board of Directors has a reasonable expectation that the Group will be able to continue in operation and meet its
liabilities, including through reinancing activities, as they fall due over the ive-year period of their assessment.
Vblt sttement contnued
58 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Fnncl revew
Income sttement
Income statement (key metrics) 2023 2022
Revenue ($m)
Sales volumes (boepd) 55,754 55,170
Realised oil price ($/bbl) 77.5 88.0
Total revenue 1,634 1,783
Operating costs ($m)
Underlying cash operating costs
1
(293) (267)
Depreciation, Depletion and
Amortisation (DDA) of oil and gas
andleased assets (431) (411)
DDA before impairment charges
($/bbl) 18.8 18.4
(Overlift)/underlift and oil
stockmovements (109) 46
Administrative expenses (56) (51)
Gain on bargain purchase – 197
Exploration costs written o (27) (105)
Impairment of property, plant
andequipment, net (408) (391)
Gain on bond buyback 86 –
Net inancing costs (286) (293)
Proit from continuing activities
before tax 96 442
Income tax expense (206) (393)
(Loss)/Proit for the year from
continuing activities (110) 49
Adjusted EBITDAX
1
1,151 1,469
Basic (loss)/earnings per share (cents) (7.6) 3.4
1. Alternative performance measures are reconciled on pages 189 to 190.
Revenue
Sles Ol volumes
During the year, there were 55,754 boepd (2022: 55,170
boepd) of liftings. The total number of liftings in Ghana is
comparable to the previous year with 13 in Jubilee (2022:
12) and 4 in TEN (2022: 5).
Relsed ol prce ($/bbl)
The Group’s realised oil price after hedging for the period
was $77.5/bbl and before hedging $84.3/bbl (2022: $88.0/
bbl and before hedging $104.3/bbl). Lower oil prices
compared to 2022 have resulted in a lower hedge loss
decreasing total revenue by $139 million in 2023 (2022:
decrease of $319 million).
Gs sles
Included in Total Revenue of $1,634 million is gas sales of
$38 million of which $29 million relates to Ghana. During
the year, Ghana exported 35,754 mmscf (gross) of gas at
an average price of $1.54/mmbtu.
Refer to Operational Performance section above for
detailed gas pricing.
During the year we have
transformed our balance sheet
and demonstrated our ability to
access capital. Gross debt has
reduced by almost $400million
and we are well positioned
to put in place a sustainable
capitalstructure.
Richard Miller
Chief Financial Oicer
Tullow Oil plc Annual Report and Accounts 2023 – 59
Financial statements Supplementary informationStrategic report Corporate governance
Cost of sles
Underln csh opertn costs
Underlying cash operating costs amounted to $293 million;
$12.8/boe (2022: $267 million; $11.9/boe). Routine
operating costs largely remain unchanged from prior year.
The increase in the current year is largely due to non-
recurring expenditure.
Deprecton, depleton nd mortston
DD&A charges before impairment on production and
development assets amounted to $431 million; $18.8/boe
(2022: $411 million: $18.4/boe). This increase in DD&A per
barrel is mainly attributable to downward revision of TEN
and Espoir 2P reserves oset by 2022 impairments.
Overlft nd ol stoc movements
The overlift expense is caused by a decrease in the
underlift position in Ghana due to timing of liftings as
well as reduced stock positions in Gabon from higher
sales volumes.
Admnstrtve expenses
With the exception of the one-o corporate project
expenditure which was partially oset by lower insurance
premiums in the current year, Tullow has managed to
maintain administrative expenses at prior year levels
despite the inlationary environment.
Explorton costs wrtten off
During 2023, the Group has written o exploration costs
of $27 million (2022: $105 million) predominantly driven
by Kenya where withdrawal of the JV Partners led to a re-
assessment of risks associated to reaching FID resulting in
a $17.9 million impairment and write-os of $3.3 million in
Cote d’Ivoire, $3.4 million for the Akoum B well in Gabon
and $2.5 million in Guyana.
Imprment of propert, plnt
ndequpment
The Group recognised a net impairment charge on PP&E
of $408 million in respect of 2023 (2022: $391 million)
largely driven by a reduction in TEN reserves partially
oset by oil price and updated cost assumptions. This
was primarily due to delays in gaining approval for the
amended TEN PoD which has led to the deferral of
investment and continued ield decline. There was also
an impairment charge in Espoir due to an increase in cost
assumptions. Refer to page 191 for the full year end 2023
audited reserve and resource position. There were also
changes to estimates on the cost of decommissioning for
certain UK and Mauritania assets.
Gn on bond bubc
Refer to Borrowings section below.
Net fnncn costs
Net inancing costs for the period were $286 million
(2022: $293 million). This decrease is mainly due to lower
interest of $13 million due to the bond redemption where
interest was applied on lower outstanding bonds partially
oset by an increase in the unwinding of discount on
decommissioning provision in Ghana of $4 million.
A reconciliation of net inancing costs is included
in Note 5.
Txton
The overall net tax expense of $206 million (2022: $393 million)
primarily relates to tax charges in respect of the Group’s
production activities in West Africa, reduced by deferred
tax credits associated with future UK decommissioning
expenditure, exploration write-os and impairments.
Based on a proit before tax for the period of $96 million
(2022: $442 million), the eective tax rate is 214.3 per cent
(2022: 88.9 per cent). After adjusting for non-recurring
amounts related to gain on bond buybacks, exploration
write-os, disposals, impairments, provisions and their
associated deferred tax beneit, the Group’s adjusted tax
rate is 70.2 per cent (2022:70.3 per cent). The eective tax
rate is in line with the prior year with the impact of non-
deductible expenditure in Ghana and Gabon and no UK
tax beneit arising from net interest and hedging expense
of $167m (2022: $570m) being partially oset by deferred
tax credits related to non-operated assets undergoing
decommissioning and prior year adjustments.
The Group’s future statutory eective tax rate is sensitive
to the geographic mix in which pre-tax proits arise.
There is no UK tax beneit from net interest and hedging
expenses, whereas net interest and hedging proits would
be taxable in the UK. Consequently, the Group’s tax charge
will continue to vary according to the jurisdictions in which
pre-tax proits occur.
Analysis of adjusted
eective tax rate ($m)
Adjusted
proit/(loss)
before tax
Tax
(expense)
/credit
Adjusted
eective
tax rate
Ghana 2023 584.4 (210.1) 35.9%
2022 994.8 (359.7) 36.2%
Gabon 2023 216.0 (101.2) 46.8%
2022 316.1 (158.9) 50.3%
Corporate 2023 (379.4) 9.6 2.5%
2022 (584.5) 3.5 0.6%
Other non-operated
& exploration
2023 1.5 4.7 -324.2%
2022 15.9 (6.9) 43.5%
Total 2023 422.5 (296.9) 70.2%
2022 742.3 (522.1) 70.3%
Fnncl revew contnued
60 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Adusted EBITDAX
Adjusted EBITDAX for the year was $1,151 million (2022:
$1,469 million). The decrease from 2022 was predominantly
due to lower revenues associated with reduced oil prices.
(Loss)/proft for the er from contnun
ctvtes nd (loss)/ernns per shre
The loss for the year from continuing activities amounted
to $110 million (2022: $49 million proit). Loss after
tax was driven mainly by impairments and write-os
totalling $435million. Basic loss per share was 7.6 cents
(2022:3.4cents earnings per share).
Blnce sheet nd lqudt mnement
Balance sheet and liquidity
management (key metrics) 2023 2022
Capital investment ($m)
1
380 354
Derivative inancial instruments ($m) (35) (244)
Borrowings ($m) (2,085) (2,473)
Underlying operating cash low ($m)
1
813 972
Free cash low ($m)
1
170 267
Net debt ($m)
1
1,608 1,864
Gearing (times)
1
1.4 1.3
1. Alternative performance measures are reconciled on pages 189 to 190.
Cptl nvestment
Capital expenditure amounted to $380 million (2022:
$354 million) with $356 million invested in production and
development activities of which $288 million was invested
in Jubilee mainly comprising of $173 million spend on
drilling costs and $75 million on Jubilee South East (JSE)
and $24 million invested in exploration and appraisal
activities.
The Group’s 2024 capital expenditure is expected to
be c.$250 million and is expected to comprise Ghana
of c.$160 million, West African Non-Operated of c.$60
million, Kenya of c.$10 million and exploration spend of
c.$20 million.
Decommssonn
Decommissioning expenditure was $67 million in 2023
(2022: $72 million). The Group’s decommissioning
budget in 2024 is c.$70 million of which c.$20 million is
provisioning for future decommissioning in Ghana and
Gabon. Subject to programme scheduling, at the end of
2024 it is expected that c.$40 million of decommissioning
liabilities in the UK and Mauritania will remain.
Dervtve fnncl nstruments
Tullow has a material hedge portfolio in place to protect
against commodity price volatility and to ensure the
availability of cash low for re-investment in capital
programmes that are driving business delivery.
At 31 December 2023, Tullow’s hedge portfolio provides
downside protection for c.60% of forecast production
entitlements in the irst half of 2024 with c.$57/bbl
weighted average loors; for the same period, c.40% of
forecast production entitlements is capped at weighted
average sold calls of c.$77/bbl. In the second half of 2024,
Tullow’s hedge portfolio provides downside protection
for c.45% of forecast production entitlements with c.$60/
bbl weighted average loors; for the same period, c.20%
of forecast production entitlements is capped at weighted
average sold calls of c.$113/bbl.
For the period from June to December 2024, Tullow’s
hedge portfolio also includes three-way collars (with call
spreads) with weighted average sold calls of c.$85/bbl and
weighted average bought calls of c.$94/bbl, providing full
access to oil price upside beyond the bought call price on
c.10% of forecast production entitlements in this period.
All inancial instruments that are initially recognised and
subsequently measured at fair value have been classiied
in accordance with the hierarchy described in IFRS 13 Fair
Value Measurement. Fair value is the amount for which the
asset or liability could be exchanged in an arm’s length
transaction at the relevant date. Where available, fair values
are determined using quoted prices in active markets
(Level 1). To the extent that market prices are not available,
fair values are estimated by reference to market-based
transactions or using standard valuation techniques for
the applicable instruments and commodities involved
(Level 2).
All of the Group’s derivatives are Level 2 (2022: Level 2). There
were no transfers between fair value levels during the year.
At 31 December 2023, the Group’s derivative instruments
had a net negative fair value of $35 million (2022: net
negative $244 million).
Tullow Oil plc Annual Report and Accounts 2023 – 61
Financial statements Supplementary informationStrategic report Corporate governance
Dervtve fnncl nstruments contnued
The following table demonstrates the timing, volumes
and prices of the Group’s commodity hedge portfolio
at year end:
1H24 hedge
portfolio at 31
December 2023 bopd
Bought put
(loor)
Sold
call
Bought
call
Straight puts 11,217 $60.05 – –
Collars 24,344 $55.37 $77.47 –
Three-way collars
(call spread) 332 $60.00 $105.60 $114.53
Total/weighted
average 35,893 $56.88 $77.85 $114.53
2H24 hedge
portfolio at 31
December 2023 bopd
Bought put
(loor)
Sold
call
Bought
call
Straight puts 6,250 $59.96 – –
Collars 12,650 $60.36 $113.45 –
Three-way collars
(call spread) 6,500 $60.00 $84.61 $93.55
Total/weighted
average 25,400 $60.17 $103.66 $93.55
Since the start of 2024, the Company has added a further
c.4kbopd of c.$60/bbldownside protection for the
second half of 2024 with a combination of straight puts
and three-way collars with weighted average call spreads
of c.$79-$89/bbl.
Borrowns
On 15 May 2023, the Group made a mandatory prepayment
of $100million of the Senior Secured Notes due 2026.
On 20 June 2023, the Group repurchased $167 million
nominal value of Senior Notes due 2025 for $100 million
cash consideration through an Unmodiied Dutch
Auction. A gain on early bond redemption of $65 million is
recognised as other income in the income statement.
On 13 November 2023, Tullow announced that it had
entered into a $400 million ive-year notes facility
agreement with Glencore Energy UK limited (Glencore). The
facility is available for 18 months and proceeds are to be
used for liability management of the Senior Notes due 2025.
On 1 December 2023, the Group repurchased $115 million
nominal value of Senior Secured Notes due 2026 for $103
million cash consideration through an Unmodiied Dutch
Auction. A gain on early bond redemption of $11 million is
recognised as other income in the income statement.
On 20 December 2023, the Group repurchased $141
million nominal value of Senior Notes due 2025 for $130
million cash consideration through a Modiied Dutch
Auction. The cash consideration was funded through an
equivalent drawdown under the Glencore facility. A gain
on early bond redemption of $10 million is recognised as
other income in the Income Statement.
The Group’s total drawn debt reduced to $2.1 billion,
consisting of $493 million nominal value Senior Notes
due in March 2025, $1,485 million nominal value Senior
Secured Notes due in May 2026 and $130 million
outstanding under the Glencore facility.
Management regularly reviews options for optimising
the Group’s capital structure and may seek to retire or
purchase outstanding debt from time to time through cash
purchases or exchanges in the open market or otherwise.
Refer to Note 16 – Borrowings for further detail.
Credt rtns
Tullow maintains credit ratings with Standard & Poor’s
(S&P’s) and Moody’s Investors Service (Moody’s).
On 21 June 2023, following completion of a bond tender
announced on 12 June 2023, S&P’s downgraded Tullow’s
corporate credit rating to CCC+ with stable outlook, from
B- with negative outlook, and the rating of the Senior
Secured Notes due 2026 to CCC+ from B- and the rating
of the Senior Notes due 2025 to CCC from CCC+.
On 21 December 2023, following completion of the
bond tenders announced on 15 November 2023, S&P’s
upgraded Tullow’s corporate credit rating to B- with
negative outlook, and the rating of the Senior Secured
Notes due 2026 to B- and the rating of the Senior Notes
due 2025 to CCC+.
On 22 December 2023, Moody’s airmed Tullow’s
corporate credit rating at Caa1, with negative outlook, and
the rating of the Senior Secured Notes due 2026 at Caa1
and the rating of the Senior Notes due 2025 at Caa2.
Fnncl revew contnued
62 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Underln opertn csh flow nd free
csh flow
Underlying operating cash low amounted to $813 million
(2022: $972 million.). The decrease of $159 million is due
to decrease in net revenue of $201 million driven by lower
oil prices and higher tax payments of $21 million partially
oset by lower Gabon royalty payments of $28 million
and a one-o payment in 2022 of $77 million relating to a
historic dispute that has now been settled.
Free cash low has decreased to $170 million (2022:
$267 million) primarily due to a decrease in underlying
operating cash low of $159 million as explained above.
There has been a decrease in net cash used in investing
activities of $59 million mainly due to the one-o Ghana
pre-emption payment and Uganda FID consideration
receipt in 2022 but this has been oset by an increase
in decommissioning spend of $14 million in the
current period.
Net debt nd ern
Reconciliation of net debt $m
FY 2022 net debt 1,864
Sales revenue (1,634)
Operating costs 293
Other operating and administrative expenses 279
Operating cash low before working
capitalmovements (1,062)
Movement in working capital (89)
Tax paid 275
Purchases of intangible exploration and evaluation
assets and property, plant and equipment 292
Other investing activities (24)
Other inancing activities 435
Gain on bond buyback (86)
Foreign exchange loss on cash 3
FY 2023 net debt 1,608
Net debt reduced by $256 million during the year to
$1,608 million at 31 December 2023 (2022: $1,864 million),
due to generation of free cash low of $170 million (as
explained above) as well as the gains on the three bond
buybacks totalling $86 million.
The Gearing ratio has increased to 1.4 times (2022: 1.3 times)
due to a decrease in Adjusted EBITDAX as explained above
primarily due to lower revenues associated with reduced
oil prices. This is in line with our target to reach gearing of
less than 1.5 times by year-end 2023.
Lqudt rs mnement nd
onconcern
The Directors consider the going concern assessment
period to be up to 31 March 2025. The Group closely
monitors and manages its liquidity headroom. Cash
forecasts are regularly produced, and sensitivities run for
dierent scenarios including, but not limited to, changes
in commodity prices, dierent production rates from the
Group’s producing assets and dierent outcomes on
ongoing disputes or litigation.
Management has applied the following oil price
assumptions for the going concern assessment:
• Base Case: $78/bbl for 2024, $75/bbl for 2024; and
• Low Case: $70/bbl for 2024, $70/bbl for 2025.
The Low Case includes, amongst other downside
assumptions, a 10% production decrease and 10%
increased operating costs compared to the Base Case.
Management has also considered additional outlows in
respect of all ongoing litigations/arbitrations within the
Low Case, with an additional $48 million outlow being
included for the cases expected to progress in the period
under assessment. The low case does not include the
outlow for the full exposure on Ghana BPRT arbitration of
$320 million (refer to Note 1(af) Ghana tax assessments for
details). The remaining arbitration cases are not expected
to conclude within the going concern period and no
outlows have been included in that respect.
At 31 December 2023, the Group had $1.0 billion liquidity
headroom consisting of c.$0.5 billion free cash and $0.5
billion available under the revolving credit facility.
The Group or its ailiates may, at any time and from time to
time, seek to retire or purchase outstanding debt through
cash purchases and/or exchanges, in open-market
purchases, privately negotiated transactions or otherwise.
Such repurchases or exchanges, if any, will be upon such
terms and at such prices as management may determine,
and will depend on prevailing market conditions, liquidity
requirements, contractual restrictions, and other factors.
The amounts involved may be material. The Group has
repaid $0.3 billion and $0.2 billion of the 2025 and 2026
Notes, respectively, during the year. The repayment of the
2025 Notes was partially funded by a drawdown of $130
million of the Glencore facility.
Tullow Oil plc Annual Report and Accounts 2023 – 63
Financial statements Supplementary informationStrategic report Corporate governance
Lqudt rs mnement nd onconcern contnued
The Group’s forecasts show that the Group and Parent Company will be able to operate within its current debt facilities and
have suicient inancial headroom for the going concern assessment period under its Base Case and Low Case at the end of
the going concern period, including a full drawdown of the Glencore debt facility to support the payment of the 2025 Notes.
The Directors have also performed a reverse stress test to establish the average oil price throughout the going concern period
required to reduce headroom to zero, that price was determined to be $45/bbl. Based on the analysis above, the Directors
have a reasonable expectation that the Group and Parent Company has adequate resources to continue in operational
existence for the foreseeable future. Thus, they have adopted the going concern basis of accounting in preparing the Annual
Report and Accounts.
Events snce 31 December 2023
Gbon
On 29 February 2024, Tullow completed the Asset Swap agreement (ASA) transaction (discussed in note 14. Assets and
liabilities classiied as held for sale) with Perenco Oil and Gas Gabon S.A (Perenco). The transaction is a cashless asset
swap to be achieved through the exchange of participating interests held by both parties in certain licences in Gabon.
Management have determined that the acquisition of the additional interest in the Tchatamba licence is a Business
Combination and the inancial impacts cannot be disclosed in the Annual Report and Accounts as the measurement
ofthe assets acquired is now underway. Accordingly, the relevant disclosure will be made in the 2024 half year results.
en
On 1 March 2024 Tullow received a letter from the Energy and Petroleum Regulatory Authority (EPRA) extending the
review period of the updated Field Development Plan to 30 June 2024.
There have not been any other events since 31 December 2023 that have resulted in a material impact on the year-
end results.
Richard Miller
Chief Financial Oicer
5 March 2024
Fnncl revew contnued
64 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Non-fnncl nd sustnblt nformton sttement
We are committed to complying with the non-inancial reporting requirements
contained in sections 414CA and 414CB of the Companies Act 2006.
The table below outlines our principal policies, risks and KPIs in relation to key non-inancial and sustainable matters.
The location of further relevant information, including policy implementation and outcomes, is provided on the pages
highlighted below and is incorporated in this statement by cross-reference.
Matter and Policy Principal risks Non-inancial KPIs Outcomes
Envronment
Climate Policy: Outlines our climate-change commitments
and the steps we are taking to mitigate the impact of climate
change risks on our business.
Safe and Sustainable Operations Policy: Sets out how
we achieve our goal of creating a working environment
that causes no harm to people, minimises our negative
environmental and social impacts and optimises the shared
beneits with our stakeholders.
Code of Ethical Conduct: Sets out the rules we expect
everyone to abide by.
Non-Technical Risk Policy: Sets out the framework to
identify, assess, mitigate and monitor social and environmental
impacts, and stakeholder issues.
Climate change:
page54.
Major accident event:
page 54.
Sustainability
Safety
Pages 33
and34.
Clmte-relted fnncl dsclosures
Climate policy.
TCFD statement.
Climate change:
page54.
Sustainability Pages 33
and 34
(Environmental
stewardship)
and 38 to
47 (TCFD
statement).
People
Code of Ethical Conduct.
Safe and Sustainable Operations Policy.
Speak Up Policy: Outlines processes that enable reporting
of any concern; in particular, anything that is unsafe, unethical
or breaches our Code of Ethical Conduct or could harm an
individual or the Group.
Smart Working Policy: Outlines how we seek to promote
lexibility in the workplace with regards to duration, location
and work patterns, creating a more progressive approach to
how employees manage their work life balance.
Capability cannot be
attracted, developed
or retained: page 55.
Major accident event:
page 54.
Compliance or
regulatory breach:
page 56.
Safety
Leadership
eectiveness
Sustainability
Pages 35 to 36
(Our people).
Pages 28 and
29 (Health and
safety).
Socl nd communt
Code of Ethical Conduct.
Safe and Sustainable Operations Policy.
Non-Technical Risk Policy.
Business plan not
delivered: page 52.
Major accident event:
page 54.
Compliance or
regulatory breach:
page 56.
Business plan
implementation
Unlocking value
Safety
Sustainability
Pages 30 to 32.
Tullow Oil plc Annual Report and Accounts 2023 – 65
Financial statements Supplementary informationStrategic report Corporate governance
Our business model is set out on pages 14 and 15. The non-inancial KPIs highlighted above, that are used to monitor our
progress, are detailed on pages 20 and 21.
Further information, including our key policies and documents, are available on our website at www.tullowoil.com/sustainability.
This Strategic Report and the information referred to herein have been approved by the Board and signed on its behalf on
5 March 2024 by:
Phuthuma Nhleko Adam Holland
Chair Company Secretary
5 March 2024 5 March 2024
Matter and Policy Principal risks Non-inancial KPIs Outcomes
Respect for humn rhts
Code of Ethical Conduct.
Speak Up Policy.
Human Rights Policy: Sets out our commitment to
respecting internationally recognised human rights and seeks
to implement the United Nations guiding principles on
business and human rights and the voluntary principles on
security and human rights.
Modern Slavery Act Transparency Statement: Outlines the
steps we take to address modern slavery risks.
Compliance or
regulatory breach:
page 56.
Sustainability Page 37.
Ant-corrupton nd nt-brber
Code of Ethical Conduct.
Speak Up Policy.
Compliance or
regulatory breach:
page 56.
Sustainability Pages 35
and36.
Non-fnncl nd sustnblt nformton sttement contnued
66 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Corporte
overnnce
68 Chair’s letter
70 Board of Directors
73 Board leadership and company purpose
76 Division of responsibilities
77 Composition, succession and evaluation
79 Nominations Committee report
82 Audit Committee report
87 Safety and Sustainability Committee report
89 Remuneration report
114 Directors’ report
118 Statement of Directors’ responsibilities
Tullow Oil plc Annual Report and Accounts 2023 – 67
Financial statements
Supplementary information
Strategic report
Corporate governance
Chr’s letter
During the year we have further
strengthened and refreshed the
Board’s composition.
Phuthuma Nhleko
Independent Non-Executive Chair
Der Shreholder,
On behalf of the Board, I am pleased to present the Corporate
Governance report for the year ended 31December 2023. We
recognise that high standards ofgovernance and eective
Board oversight are critical toTullow’s success. In this report,
we outline how the Board and its Committees have monitored
the execution of the Company’s strategy and its performance
and ensured that appropriate resources, leadership and
controls are in place to help support the creation of long-term
sustainable value for our shareholders and wider stakeholders.
Bord chnes
During the year, we further strengthened and refreshed
the composition of our Board to ensure that we have the
appropriate balance of skills and experience, and diversity
of thought, to support Tullow’s long-term success.
Following conirmation of his appointment as Chief
Financial Oicer, Richard Miller joined the Board as an
Executive Director in January 2023.
Having served nine years, Mike Daly, independent Non-
Executive Director, retired from the Board at the Annual
General Meeting (AGM) held in May 2023. Once again,
I would like to take the opportunity to thank Mike for
his service and invaluable contribution to Board and
Committee discussions.
During the year, we appointed two new independent Non-
Executive Directors. Roald Goethe joined the Board with
eect from 24 February 2023 and Rebecca Wiles joined
the Board with eect from 28 June 2023. Roald is a highly
experienced oil and gas executive with a strong track record
of buying, selling, inancing and building businesses in
West Africa. Rebecca brings deep technical subsurface
and geoscience expertise with signiicant emerging market
experience and extensive commercial and operational
experience gained during her 33-year career at BP plc.
Theirbiographical details are included onpage 71.
Culture
If we are to fulil our purpose we must build trust and the way
we do business is critically important. During the year we
redeined our culture and relaunched our values, to ensure
our culture continues to align with our purpose and strategy.
We are committed to fostering an inclusive, collaborative and
performance-driven culture which is underpinned by our
values: ‘Aim High’, ‘Own it’, and ‘Be True’ (see page 35). Our ‘Be
true’ value drives ethical behaviour to ensure that at all times
we do what is right. Our ‘Aim high’ and ‘Own it’ values promote
a culture of openness, empowerment, performance and
continuous improvement. In 2024, we will continue to further
embed these values throughout the organisation.
Dverst
The Board is comprised of a diverse mix of gender, social
and ethnic backgrounds, knowledge, personal attributes,
skills and experience. This diversity is relective of the areas
in which we do business and provides a mix of perspectives,
which contributes to eective Board dynamics.
Board’s time
1
%
Principal risks and governance
Culture and people
Safety and sustainability
(including stakeholder
engagement)
Capital structure and
capitalallocation
Strategy and growth
Business operations and
portfolio management
10%
10%
15%
30%
20%
15%
1. Percentages are approximate.
68 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
The Board is committed to increasing diversity across the
Group and supports the recommendations of the FTSE
Women Leaders Review on gender diversity and the Parker
review on ethnicity diversity. Further information about the
diversity proile of the Board and the senior management
is included on pages 81.
Code complnce
The Board is committed to the highest standards
of corporate governance as set out in the 2018 UK
Corporate Governance Code
2
(the Code). As part of its
annual governance review cycle, the Board reviewed the
Company’s compliance with the Code, and I am pleased
to conirm that, for the inancial year ended 31 December
2023, the Company has applied the Code Principles and
complied with all relevant Provisions of the Code.
The Board is cognisant of the changes to the Code, which
were published in January 2024 and remains committed to
full compliance, as far as practicable.
In this Corporate Governance Report we explain how we
have applied the principles of the Code and the table
below highlights where relevant information can be found.
Concluson
As highlighted in my statement on pages 4 and 5, we
have made good progress in delivering our strategy
and Tullow’s evolution is gaining momentum. Eective
corporate governance practices are fundamental to that
delivery and the Board will continue to ensure that our
governance framework further strengthens and develops
to support our evolving business.
Phuthuma Nhleko
Independent Non-Executive Chair
5 March 2024
Code pplcton
Principle Further information
Board leadership and company purpose
A An eective and entrepreneurial Board that promotes long-term
sustainable success that generates value for shareholders and
contributes to society.
2023 Board activity highlights. See page 74.
Board consideration of stakeholder issues in its decision making and
Section 172 statement. See pages 24 and 25 and page 75.
B Establishment of purpose, values and strategy and promotion of
desired culture.
Purpose, values , culture and strategy. See page 73.
C Ensuring resources are in place to meet objectives, measuring
performance and establishing controls which assess and manage risk.
Audit Committee report. See pages 82 to 86.
D Eective stakeholder engagement and participation. Engaging with our stakeholders. See pages 23 and 75.
Board consideration of stakeholder issues in its decision making and
Section 172 statement. See pages 24 and 25 and page 75.
E Ensuring workforce policies and practices are consistent with
the company’s values and support long-term success, and that
mechanisms are in place to allow the workforce to raise concerns.
Engagement with workforce. See pages 23 and 75.
Independent whistleblowing procedures. See page 86.
Division of responsibilities
F Chair’s role. Division of responsibilities. See page 76.
G Clear division of responsibilities and appropriate combination of
executive and non-executive roles.
Governance framework. See page 72.
Division of responsibilities. See page 76.
H Time commitment, constructive challenge and strategic guidance. Time commitment and external appointments. See page 73.
I Eective and eicient board. Composition, succession and evaluation. See pages 77 and 78.
Composition, succession and evaluation
J Board appointments and succession. Nominations Committee report. See pages 79 to 81.
K Combination of skills, experience and knowledge Board of Directors. See pages 70 and 71.
L Annual evaluation Composition, succession and evaluation. See pages 77 and 78.
Audit, risk and internal control
M Independent and eective internal and external audit functions. Audit Committee report. See pages 82 to 86.
N Fair, balanced and understandable assessment. Eectiveness of audit, risk and internal control. See pages 85 and 86.
O Risk management and internal control systems. Audit Committee report. See pages 85 and 86.
Remuneration
P Remuneration policy and practices. Remuneration policy. See pages 104 to 113.
Q Development of remuneration policy and packages. Directors’ Remuneration Policy report. See pages 104 to 113.
R Independent judgement and discretion. Remuneration Committee report. See pages 89 to 91.
2. A copy of the Code is available at www.frc.org.uk.
Tullow Oil plc Annual Report and Accounts 2023 – 69
Financial statements Supplementary informationStrategic report Corporate governance
Bord of Drectors
1 – Phuthum Nhleo
Independent Non-Executve Chr
N
Appointed: October 2021
Key strengths: Executive leadership, public company
governance and leadership, emerging markets, engineering,
investor relations, corporate inance, business development, risk
management, technology and innovation.
Experience: Extensive emerging markets experience
having worked successfully across Africa over the past three
decades including MTN Group (MTN), the leading pan-African
telecommunications company, where he served as the
company’s Chief Executive from 2002 to 2011. He returned to
MTN in 2013 and until August 2021 held various roles including
Non-Executive Director, Executive Chairman and a member of
the company’s international advisory board. He has previously
served as a Non-Executive Director of BP plc, Anglo-American
plc, Nedbank and Old Mutual.
Current external appointments: Chairman of Phembani Group,
an investment group which he founded in 1994, Chairman of the
Johannesburg Stock Exchange Ltd, Non-Executive Director of
South African downstream energy company, Engen Petroleum
and Non-Executive Director of IHS Towers, the NYSE-listed
Emerging Markets Telecom Infrastructure Provider.
2 – Rhul Dhr
Chef Executve Offcer
Appointed: July 2020
Key strengths: Upstream business, exploration, development
and operations, executive leadership, capital markets, M&A,
environment, health, safety and sustainability.
Experience: Substantial leadership experience in the oil and gas
industry, having founded Delonex Energy, an Africa-focused oil and
gas company in 2013. Prior to establishing Delonex, Rahul spent
six years at Cairn India as Chief Executive Oicer and Managing
Director. He started his career as a Petroleum Engineer, before
moving into investment banking where he led teams at Morgan
Stanley and Merrill Lynch, advising major oil and gas companies
onmerger and acquisition and capital market-related issues.
Current external appointments: Member of the International
Board of Advisors at the University of Texas at Austin.
3 – Rchrd Mller
Chef Fnncl Offcer
Appointed: January 2023
Key strengths: Upstream oil and gas, capital markets, M&A,
inancial management, audit and assurance.
Experience: Extensive oil and gas and inancial experience
having joined Tullow in 2011 and has led the Tullow Finance
team, supported a number of acquisitions, disposals and capital
markets transactions. Richard is a chartered accountant and he
joined Tullow from Ernst and Young LLP where he worked in the
audit and assurance practice.
Current external appointments: None.
4 – Mrtn Greenslde
Senor Independent Drector
A
R
N
Appointment: November 2019
Key strengths: Corporate inance, accounting and audit, risk
management and executive and public company leadership.
Experience: Extensive corporate inancial experience from a
35-year career in the property, engineering and inancial sectors in
the UK and across Africa, Scandinavia and Europe. From 2005 to
2021 Martin was Chief Financial Oicer at Land Securities Group
plc, a listed UK real estate company. Previously, he spent ive years
as group Finance Director of Alvis plc, an international defence and
engineering company. Martin is a chartered accountant.
Current external appointments: Group Chief Financial Oicer
at Red Sea Global, Saudi Arabia and a board trustee of the UK arm
of International Justice Mission, a human rights charity focused
on protecting the poor from violence and ending human slavery.
5 – Shel hm
Independent Non-Executve Drector
S
N
Appointment: April 2019
Key strengths: Extractives project and policy reform, executive
leadership, corporate governance, business development,
public–private partnership and sustainability.
Experience: Signiicant executive experience in the banking
and natural resources sectors across Africa having served as
the Chief Executive Oicer of De Beers Botswana from 2005 to
2010 and then director of the extractives advisory programme at
the African Centre for Economic Transformation. In 2013, Sheila
became a director of the Natural Resources Centre at the African
Development Bank, Abidjan, Côte d’Ivoire and subsequently in
2016 a policy adviser at the World Bank in Washington. In both
roles she advised host governments on sustainable development
policies for natural resources. She also represented the African
Development Bank as an observer on the international board of
directors of the Extractive Industries Transparency Initiative.
Current external appointments: Member of the Advisory
Board of the Centre for Sustainable Development Investment,
Columbia University, and at Mining Indaba, a member of the
audit committee of the United Nations Oice of Operations, a
Non-Executive Director of the Development Partner Institute, a
Non-Executive Director of Base Resources Limited and a Non-
Executive Director of The Metals Company, which is listed on the
NASDAQ Stock Exchange in New York.
6 – Geneveve Snud
Independent Non-Executve Drector
R
S
Appointment: April 2019
Key strengths: Corporate inance, accounting and audit,
business development, risk management, executive leadership
and investor relations.
Experience: Considerable marketing, investment and fund
management experience gained during a 22-year career in the
inancial sector in the US and across Africa. Genevieve began
her career in business development as a marketing executive
at Procter & Gamble, Boston, before joining Emerging Capital
Partners, a pan-African private equity irm, as a partner and
managing director. At Emerging Capital Partners Genevieve
served on the boards of portfolio companies working closely
with the executive teams and set up the company’s operations
inNigeria.
Current external appointments: Managing Director,
Sub-Saharan Africa, for the American private equity company
CarlyleGroup.
Committee membership key
Committee Chair
A
Audit Committee
N
Nominations Committee
R
Remuneration Committee
S
Safety and Sustainability Committee
70 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
7 – Mtchell Inrm
Independent Non-Executve Drector
S
R
Appointment: September 2020
Key strengths: Upstream business, corporate inance,
accounting and audit, business development, risk management,
executive leadership, investor and government relations.
Experience: Over 28 years of experience in the oil and natural
gas industry. Mitchell joined Anadarko in 2015 and became
Executive Vice-President of International, Deep Water, and
Exploration in 2018. Prior to this, he served as Development
Director and then Asset General Manager for the Karachaganack
ield in Kazakhstan at BG Group, following his time as Managing
Director of QGC Australia. Mitchell began his career at Occidental
and spent 22 years in a number of technical and operational roles
in the UK North Sea, Qatar and Libya.
Current external appointments: None.
8 – Rold Goethe
Independent Non-Executve Drector
A
R
Appointment: February 2023
Key strengths: Upstream business, inance, development,
executive leadership, capital markets, M&A.
Experience: Experienced oil and gas executive with extensive
commercial knowledge of the energy industry in Africa. In
2006 Roald founded Delaney Petroleum Ltd, trading crude oil
and petroleum products predominantly in West Africa and the
Middle East. Prior to establishing Delaney, Roald spent 11 years at
Traigura Group, where he had an integral role in the development
of the group’s oil trading activities, primarily in West Africa.
Current external appointments: Director of ROFGO
RacingLimited.
9 – Rebecc Wles
Independent Non-Executve Drector
A
S
Appointment: June 2023
Key strengths: Subsurface, geoscience, technology, emerging
markets, commercial, government relations, safety and risk
management and executive leadership.
Experience: Signiicant technical subsurface and geoscience
expertise gained during 33-year career at BP plc (BP). She also
has extensive emerging markets, commercial and operational
experience having served as Vice President of Exploration
and Appraisal at BP Angola and as Managing Director of BP’s
Norwaybusiness.
Current external appointments: Non-Executive Director of
SESWater.
Tenure
0–2 years
3–5 years
Nationality
British
Motswana
South African
Tanzanian
German
Gender
Male
Female
Independence
Independent
Non-independent
6
3 2
3
1
1
1
1
5 6 7
1
3
5
7
2
4
6
9
8
Tullow Oil plc Annual Report and Accounts 2023 – 71
Financial statements Supplementary informationStrategic report Corporate governance
Governnce frmewor
The Bord
• Led by Chair and collectively responsible for setting the Company’s strategy to deliver long-term value to
shareholders and wider stakeholders.
• Ensures that the appropriate resources, leadership and eective controls are in place to deliver the strategy.
• Sets the Company’s culture and values.
• Monitors the business’s performance, oversees risk management and determines the Company’s risk appetite.
• Accountable for the stewardship of the Company’s business to the shareholders and wider stakeholders.
Commttees
Nominations
Committee
• Responsible for
reviewing the balance
of skills, knowledge,
experience and diversity
of the Board and its
Committees.
• Oversees the recruitment
and appointment of
Directors.
• Ensures plans are
in place for orderly
succession for the Board
and senior management
and oversees the
development of a diverse
pipeline for succession.
• Monitors the
development and
implementation of the
inclusion and diversity
strategy at Board level
and throughout the
Company.
Audit
Committee
• Responsible for the
integrity of inancial
reporting and disclosures
and reviews the controls
in place.
• Oversees the relationship
with the external auditor,
including monitoring
independence.
• Reviews signiicant
inancial reporting and
accounting policy issues.
• Oversees the Group’s
internal audit programme
and the process of
identifying principal
and emerging risks and
ensuring that they are
managed eectively.
Safety and
Sustainability
Committee
• Responsible for and
monitors occupational
and process safety,
people and asset
security, health
and environmental
stewardship, including
protection of the
environment, climate and
biodiversity.
• Oversees the Company’s
sustainability-related
governance matters
including protection of
human rights, socio-
political issues and
sustainability-related
disclosures.
• Oversees
implementation of the
Company’s strategic
sustainability priorities.
Remuneration
Committee
• Responsible for
the remuneration
arrangements for
the Chair, Executive
Directors, and senior
management, in line with
the Remuneration Policy.
• Ensures rewards and
incentives closely align
with the successful
delivery of the
Company’s long-term
purpose and strategy
as well as those of the
shareholders and wider
stakeholders, including
the workforce.
• Reviews the
remuneration
arrangements for the
wider workforce.
See pages to . See pages to . See pages and . See pages to .
Senor Ledershp Tem
Chief Executive Oicer, Chief Financial Oicer and ive senior managers
• Led by the Chief Executive Oicer and responsible for the delivery and execution of the Board’s strategy
and day-to-day management of the Company’s business including operational performance.
Jean-Medard
Madama
Director of Non-
Operated and
Exploration
Julia Ross
Director of People and
Sustainability
Wissam Al-
Monthiry
Ghana
Managing Director
Mike Walsh
General Counsel
Stuart Cooper
Director of Strategy,
Commercial and
Business Development
72 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Bord ledershp nd compn purpose
Purpose, culture, vlues nd strte
The Board is accountable to the Company’s shareholders
and wider stakeholders for the creation and delivery
of long-term, sustainable operational and inancial
performance for the enhancement of shareholder and
stakeholder value. The Board discharges its responsibilities
in a number of ways including ensuring that the Group’s
purpose, values and strategy align and that the necessary
resources are available to achieve the agreed strategic priorities.
The Board sets the Group’s core values and behaviours
which shape our culture and ensures that it takes decisions
that are aligned to our values. The Board regularly reviews
the policies implemented, including our Code of Ethical
Conduct, to ensure we continue to have the right framework
and working practices in place, ensuring that at all times
we do what is right and promote a culture of openness,
empowerment, performance and continuous improvement.
During the year we reviewed our culture and refreshed
our values. Further information about our values and this
process, is set out on page 35.
The Board utilises a number of methods to understand,
monitor and assess the Company’s culture including:
• Employee engagement: Through its quarterly meeting
with the TAP, our employee advisory panel, the Board
has direct access to the workforce and is able to build a
better understanding of their experiences and concerns,
including the working practices that operate across
the Group. This engagement also enables the Board to
ensure alignment of our culture, purpose and strategic
priorities.
• Safety: The Board, supported by its Committees, reviews
safety incident reports and ensures that management
deploy appropriate mitigating actions and provide
regular progress updates.
• Site visits: As far as practicable, the Board as a collective
and/or individual Board members, undertake site visits.
These visits allow the Board to gain irst-hand experience
of our culture in action and gain a deeper understanding
of our business. During the year, the entire Board visited
our Ghana oice and met with a number of employees.
• Policies and procedures: The Board ensures that the
right practices and processes are in place to support
our culture. These policies, which cover areas such
as sustainability, ethical conduct, anti-bribery and
whistleblowing, set our expectations of the behaviours
and practices expected, inform behaviour and embed
good decision making in line with our desired culture.
The policies are reviewed regularly and updated as
required to ensure they continue to promote the right
culture and practices that are consistent with our values.
• Whistleblowing: The Board receives reports from the
Group’s whistleblowing facility, and regularly reviews
the eectiveness of the Group’s whistleblowing
arrangements. See page 86. In addition, the Audit
Committee’s supervision of the Group’s internal controls
framework and review of any compliance issues, informs
the Board’s assessment and monitoring of our culture.
Governnce frmewor
The Board operates through a governance framework
(see adjacent page) with clear procedures, lines of
responsibility and delegated authorities to ensure that our
strategy is implemented, and key risks are assessed and
managedeectively.
Bord meetns nd ttendnce n 2023
The Board met ive times during the year, in person. There
was an additional meeting held in July which was devoted
to an extensive review of the Group’s long-term strategy.
The September Board and Committee meetings were
held in Ghana and provided the Directors with irst-hand
insights into the Company’s operations and an opportunity
to engage with stakeholders.
In addition to the ive scheduled Board meetings,
additional unscheduled ad hoc Board calls were held
during the year to discuss speciic items. In certain
circumstances meetings are called at short notice and,
due to prior business commitments and time dierences
Directors may not always be able to attend. If a Director
is unable to attend a meeting because of exceptional
circumstances, they receive the papers in advance of the
meeting and have the opportunity to discuss any matters
they wish to raise with the relevant Chair or the Company
Secretary. Directors are provided with feedback about
decisions made at any meeting they are unable to attend.
Tme commtment nd externl ppontments
The expected time commitment of the Chair and Non-
Executive Directors is agreed and set out in writing in
their letter of appointment. The Board has considered
the individual Directors’ attendance, their contribution,
and their external appointments, and is satisied that
each of the Directors is able to allocate suicient time
to the Group to discharge his or her responsibilities
eectively. Asevidenced by the attendance table below,
the attendance remained high and demonstrates the
Directors’ ability to devote suicient time to their role. In
line with the Code, Directors are required to seek Board
approval prior to taking on any additional signiicant
external appointments.
Tullow Oil plc Annual Report and Accounts 2023 – 73
Financial statements Supplementary informationStrategic report Corporate governance
Bord ledershp nd Compn purpose contnued
Tme commtment nd externl ppontments contnued
The table below shows the number of scheduled Board meetings each Director attended during the year together with
the number of meetings they were entitled to attend.
Director
Scheduled
meeting
attendance
Phuthuma Nhleko Independent Non-Executive Chair 5/5
Rahul Dhir Chief Executive Oicer 5/5
Richard Miller Chief Financial Oicer 5/5
Martin Greenslade Senior Independent Director 5/5
Mitchell Ingram Independent Non-Executive Director 5/5
Sheila Khama Independent Non-Executive Director 5/5
Genevieve Sangudi Independent Non-Executive Director 5/5
Roald Goethe
1
Independent Non-Executive Director 5/5
Rebecca Wiles
2
Independent Non-Executive Director 3/3
Mike Daly
3
Independent Non-Executive Director 2/2
Total 5
1. Joined the Board on 24 February 2023.
2. Joined the Board on 28 June 2023.
3. Retired from the Board on 24 May 2023.
During the year, there were three unscheduled Board meetings which all Directors attended. In addition to the formal
Board meetings held throughout the year, the Chair regularly met with the Non-Executive Directors without the presence
of the Executive Directors. Also, during the year, the Senior Independent Director held a meeting with the Non-Executive
Directors without the presence of the Chair, to evaluate his performance.
Bord ctvtes durn the er
Strte nd busness plns Performnce nd rs mnement
The Board considered and oversaw the delivery of our strategic
objectives for the beneit of our shareholders and wider
stakeholders including reviewing the following matters:
• Strategy, the Group’s strategic plan and strategic updates.
• Capital structure.
• Capital allocation.
• Growth opportunities.
The Board regularly reviewed inancial performance and risks, as
well as risk controls and processes including:
• Business reviews, including operational performance.
• Health and safety performance.
• 2022 preliminary results statements.
• Cyber security risk management.
• Enterprise Risk Management framework including climate-
related risks.
• Annual tax update.
• Going concern and viability statements.
• Audit fees.
• Sustainability – including climate change and energy transition.
Governnce, poltcl nd reultor envronment Culture nd steholders
The Board received regular reports from the Company Secretary
on governance and regulatory matters, as well as regular
updates and insights on market trends and developments. Key
governance matters considered and reviewed included:
• 2022 Annual Report and Accounts.
• Annual General Meeting.
• Board eectiveness including evaluation and independence.
• Succession planning and committee composition.
• Reports from Committee Chairs.
• Terms of reference reviews.
• Reports on workforce engagement.
• Proposed changes to the Code.
• Macro and geopolitical developments.
• Modern Slavery Act Transparency Statement.
• TCFD disclosure.
Recognising the importance of understanding the views and
interests of our people and our wider stakeholders, the Board:
• Reviewed our Employee Value Proposition (EVP).
• Considered feedback from Board participation in the Tullow
Advisory Panel.
• Reviewed our culture and values to ensure alignment with our
purpose and feedback.
• Considered investor feedback.
• Reviewed a number of inclusion and diversity initiatives.
74 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Schedule of mtters reserved to the Bord
There are certain key responsibilities that the Board does
not delegate, and which are reserved for its consideration.
The Board’s responsibilities include: the development of
strategy; the approval of major capital expenditure; the
Group’s capital structure; the consideration of signiicant
inancing matters; and oversight of policies and procedures.
The full schedule of matters reserved to the Board is
available at www.tullowoil.com/about-us/corporate-
governance. The Board reviews the schedule on an annual
basis and the latest review took place in November 2023.
Conflcts of nterest
Directors have a statutory duty to avoid situations in which
they have, or may have, interests that conlict with those of
Tullow, unless that conlict is irst authorised by the Board.
The Company has procedures in place for managing
conlicts of interest. The Company’s Articles of Association
also contain provisions to allow the Directors to authorise
potential conlicts of interest so that a Director is not in
breach of his or her duty under company law.
Should a Director become aware that he or she has an
interest, directly or indirectly, in an existing or proposed
transaction with Tullow, they are required to notify the
Board in line with the Company’s Articles of Association.
If a conlict does arise, the Director is excluded from
discussions and all Directors have a continuing duty to
update any changes to their conlicts of interest.
Steholder enement
Enn wth our steholders
Strong relationships built on trust remain key to the
delivery of the Group’s strategy and goals. Information
about our stakeholders, including how the Board engages
with them, is set out on page 23.
During 2023 the Chair, Executive Directors and Non-
Executive Directors frequently engaged with many of
our stakeholders and the insights arising from such
engagement was considered and discussed by the Board
as a whole and taken into consideration during Board
decision making. Our Section 172 statement and examples
of how the Board took account of stakeholders in its
decision making is included on pages 24 and 25.
Worforce enement
Our people have a key role to play in Tullow’s evolution and
the Board recognises the importance of engaging with
them to understand their views and their valuable insights
about our business.
In accordance with Provision 5 of the Code, we operate
a dedicated formal advisory panel, the Tullow Advisory
Panel (TAP), which consists of eight elected colleague
representatives from across our dierent locations. The TAP
meets quarterly with members of the SLT and on separate
occasions with two independent Non-Executive Directors. The
purpose of these meetings is to discuss colleagues’ feedback
on a wide range of topics including sta development,
employee workload and diversity and inclusion, and the
Company’s strategic objectives. This forum helps to ensure
that our employees’ perspectives are considered by the Board
and its Committees in their decision-making processes. It also
provides an opportunity for the Non-Executive Directors to
hear about our business from employee’s perspectives and
gain more insight about our culture and operations. Following
their meetings with the TAP, the Non-Executive Directors
formally report to the Board on the key matters arising from
the discussions. During 2023, issues considered by the Board
following meetings of the TAP included:
• Internal communication strategy.
• Hybrid and lexible working arrangements.
• Workforce remuneration arrangements.
In September 2023 the Board meeting took place in
Ghana, and all members of the Board met with a number
of our Ghana-based employees during informal receptions
and small group discussions.
AGM votn
At the 2023 AGM we received less than 80% approval for
Resolution 19, which sought authority for the Company
to purchase its own shares. The Board continued its
engagement with our major shareholders who voted
against the resolution to better understand and address
their concerns. After careful consideration, and taking into
consideration the views of our shareholders, the Directors
have decided not to seek permission for the Company to
purchase its own shares at the forthcoming 2024 AGM.
Non-Executive Directors, Rebecca Wiles and Sheila
Khama, together with Julia Ross (Director of People
and Sustainability) meeting the Chief Executive
of Youth Bridge Foundation, Seth Oteng, during
their visit to the foundation in September 2023.
We have partnered with this Ghana-based youth-
focused non-governmental organisation since 2018
to support science, technology, engineering, and
mathematics (STEM) programmes targeted at junior
and senior high school pupils in the areas where
we operate. Initiatives include mobile STEM clinics,
which provide access to science equipment and
enable pupils to undertake laboratory experiments
to aid their understanding of theoretical concepts.
Tullow Oil plc Annual Report and Accounts 2023 – 75
Financial statements Supplementary informationStrategic report Corporate governance
Dvson of responsbltes
Responsbltes
As at the date of this report, our Board comprised of
the Chair, seven independent Non-Executive Directors
and two Executive Directors. There is a clear division
of responsibilities, which ensures responsibility and
accountability. The roles of the Chair and Chief Executive
are held separately and clearly deined and agreed as set
out in the division of responsibilities approved each year
by the Board. See summary below.
The Chr
The Chair of our Board, Phuthuma Nhleko, is responsible
for leading the Board and its overall eectiveness and for
promoting the highest standards of integrity, probity, and
corporate governance. The Chair is also responsible for
eective shareholder engagement and building strong
relationships with our wider stakeholders. The Chair meets
regularly with the other Non-Executive Directors, without
Executive Directors present, to review Board discussions
and engagement as well as the performance of the SLT.
The Chef Executve Offcer
Our Chief Executive Oicer (CEO), Rahul Dhir, is
responsible for the overall performance and day-to-day
operational management of our business. The CEO
responsibilities include executing the Group’s strategy and
overall commercial objectives, monitoring the progress
against the Company’s strategic objectives and the
performance of the Senior Leadership Team (SLT).
The Senor Independent Drector (SID)
Our SID, Martin Greenslade, provides a sounding board for
the Chair. The Board is fully satisied that he demonstrates
complete independence and robustness of character in
this role. The SID is available to meet shareholders if they
have concerns that cannot be resolved through discussion
with the Chair or for matters where such contact would
beinappropriate.
In addition, during the year the SID meets with the other
Non-Executive Directors, without the Chair present, to
evaluate the Chair’s performance.
Non-Executve Drectors (NEDs)
Our independent NEDs assess, challenge and monitor
the Executive Directors’ delivery of strategy within the risk
and governance structure agreed by the Board. As Board
Committee members, they also review the integrity of the
Company’s inancial information, consider ESG issues,
recommend appropriate succession plans, and set the
Directors’ remuneration.
Bord ndependence
The independence of our Non-Executive Directors is
formally reviewed annually by the Nominations Committee.
All of the Non-Executive Directors who served during the
year were considered by the Board to be independent for
the purposes of the Code and the Chair was considered
independent upon his appointment. These considerations
speciically include reference to Provision 10 of the Code
and the Director’s shareholdings in the Company.
In accordance with the Code, all of the Directors will
retire at the 2024 AGM and submit themselves for
appointment or re-appointment by shareholders. Each
of the Non-Executive Directors seeking appointment or
re-appointment are considered to be independent in
character and judgement.
The Non-Executive Directors can obtain independent
professional advice, at the Company’s expense, in the
performance of their duties.
Bord Commttees
The Board has delegated some of its responsibilities to
four Committees: the Audit Committee, the Nominations
Committee, the Safety and Sustainability Committee and
the Remuneration Committee (see page 72). The Board
is satisied that the Committees have suicient time and
resources to carry out their duties eectively. Their terms
of reference are reviewed and approved annually by the
Board and the respective Committee Chairs report on their
activities to the Board. The individual Committee terms of
reference are available at www.tullowoil.com/about-us/
corporate-governance/board-committees.
Compn Secretr
The Board is supported and advised by the Company
Secretary who ensures that it has the policies, processes,
information, time and resources it needs for it to function
eectively and eiciently. The Company Secretary is
also responsible for ensuring compliance with all Board
procedures and for providing advice to Directors when
required. The Company Secretary acts as secretary to
the Audit, Nominations, Safety and Sustainability and
Remuneration Committees and has direct access to the
Chairs of these Committees. All Directors have access
to the advice and services of the Company Secretary,
whose appointment and removal is a matter reserved for
theBoard.
76 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Composton, successon nd evluton
Composton, slls nd experence
To ensure that the Executive Directors and senior
management possess the necessary skills and experience
required for the strategy of the business, the Board has
established a Nominations Committee (see pages 79 to 81)
to oversee the process of appointments and succession
planning for Directors and other Senior Managers. The
role of the Nominations Committee is critical in ensuring
that the Group’s Board and Committee composition and
balance support both the Group’s business ambitions and
best practice in the area of corporate governance.
The Board comprises seven independent Non-Executive
Directors and two Executive Directors. Their respective
relevant skills and experience are detailed on pages 70
and71 and below.
Inducton, trnn nd development
Upon joining the Board, Directors receive induction
programmes which are speciically designed to
complement their background, experience and knowledge
with a more detailed understanding of the upstream
industry and other matters regularly discussed by the
Board. The programmes include one-to-one meetings with
members of the SLT, functional leaders and, where possible,
visits to the Group’s principal oices and operations. The
Directors also receive an overview of their duties, corporate
governance policies and Board processes. As required,
professional advisers and subject matter experts are invited
to Board and Committee meetings to provide in-depth
updates. The Company Secretary also provides regular
updates to the Board and its Committee on regulatory and
corporate governance matters.
In September 2023, as part of their induction programmes,
Roald Goethe and Rebecca Wiles visited the Kwame
Nkrumah loating production storage and oloading vessel
which operates in the Jubilee oil ields o the coast of
Ghana. During the same visit to Ghana, they received a
technical ‘deep dive’ presentation on the portfolio of oil and
gas assets held by the Group in Ghana, including detail on
seismic data and capital allocation programmes. Later in
the year, they received a technical presentation in London
showcasing the people, worklows and technologies in the
subsurface realm.
Bord evluton
Each year, in line with the Code, we undertake a formal
and rigorous evaluation of the performance of the Board
and its Committees. At least every third year, this process
is facilitated by an external evaluator. Our last externally
facilitated evaluation took place in 2022 and was facilitated
by Heidrick & Struggles (the 2022 evaluation). Heidrick &
Struggles, have previously assisted Tullow with executive
searches but have no other connections with the Company.
Information about the 2022 evaluation process, its indings
and actions taken to address these indings is included in
our 2022 Annual Report and Accounts on pages 69 and 70.
Phse 1 Phse 2 Phse 3
• Formulated questionnaires for
the Board and its Committees,
in conjunction with the Chair,
taking into consideration the
Code, other best practice
recommendations and indings
of the 2022 evaluation.
• The questionnaire covered
areas including composition,
eectiveness, information low,
and Committee strengths and
areas of improvement.
• Circulated questionnaires to
Board members as well as other
regular attendees of the Board
and Committee meetings,
including the SLT.
• Individual responses were
collated by the Company
Secretary who prepared
anonymised summaries, which
were discussed with the Chair.
• The Company Secretary
prepared a summary of the
indings and suggested actions
for the forthcoming year.
• Final report considered by Board
at its meeting in February 2024.
• The Board agreed on actions and
milestones to be implemented
and monitored.
The Company Secretary facilitated the evaluation in respect of the year ended 31 December 2023 (the 2023 evaluation),
through the process detailed below.
Tullow Oil plc Annual Report and Accounts 2023 – 77
Financial statements Supplementary informationStrategic report Corporate governance
Bord evluton contnued
The conclusions of the 2023 evaluation were positive, conirming that the Board continues to operate eectively
with strong leadership and a continual enhancement of skills and experience. The relationships among the Chair, the
Senior Independent Director, Non-Executive Directors and the Executive Directors remained of a high quality. Previous
evaluation recommendations had been implemented eectively and the Board’s strategic stewardship of key matters
remained strong.
Key indings and the actions agreed to address are detailed below.
Key indings Recommendations
Ongoing training and development to support the Board. Continue to provide tailored ongoing training and awareness
including site visits and technical updates.
Succession planning and talent development to support the
Company’s longer-term prospects.
Continue to review the optimal composition and skillset of the
Board, whilst increasing focus on SLT succession and talent
development, including reviewing key criteria skillsets required for
senior leadership positions.
Meeting materials. Continue to improve the balance between presentation and
discussion and ensure that Board and Committee materials are
succinct and clear.
Composton, successon nd evluton contnued
78 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Nomntons Commttee report
To fulil our purpose and deliver
our strategy it is essential that our
leadership team has the right balance
of skills, knowledge and experience.
Phuthuma Nhleko
Chair of the Nominations Committee
e responsbltes
• Reviews the structure, size and composition of the
Board, including the balance of skills, knowledge,
diversity and experience of the Board and its
Committees and makes recommendations to the
Boardregarding any changes.
• Oversees the succession planning process for the
Boardand senior management.
• Reviews the Board’s eectiveness including its
performance evaluation.
2023 e ctvtes
• Oversaw the recruitment process and appointment of
Roald Goethe and Rebecca Wiles as new independent
Non-Executive Directors and increased female
representation on the Board to 33%.
• Refreshed the composition of the Board Committees.
2024 prortes
• Enhance Directors’ induction, training and
developmentprogrammes.
• Review the Executive Directors and senior management
succession pipeline and development initiatives.
Allocton of Nomntons
Commtteetme* (%)
Activity* %
Non-Executive
Director
succession planning
Senior management
succession planning
Leadership
eectiveness
Corporate
governance
* Percentages are approximate.
Commttee membershp, meetns
ndttendnce
The table below sets out the number of meetings attended
out of the meetings members were eligible to attend.
Director
Scheduled
Meeting
Attendance
Unscheduled
Meeting
Attendance
Phuthuma Nhleko 3/3 2/2
Martin Greenslade 3/3 2/2
Sheila Khama
1
2/2 1/1
Mike Daly
2
2/2 2/2
1. Joined the Committee on 24 May 2023.
2. Stepped down from the Board and the Committee on 24May2023.
The CEO and Director of People and Sustainability also
attend meetings of the Committee by invitation and
werepresent at most of, or part of, the meetings in 2023,
as appropriate.
61%
17%
19%
3%
Tullow Oil plc Annual Report and Accounts 2023 – 79
Financial statements Supplementary informationStrategic report Corporate governance
Der shreholder
I am delighted to present the Nominations Committee (the
Committee) report for the year ended 31 December 2023.
The Committee continues to play a vital role in ensuring that
we have the right balance of skills experience, knowledge
and diversity across our leadership team. Ensuring orderly
succession planning and strong and eective leadership,
taking into account our approach to inclusion and diversity,
to support our strategy also continue to be key areas of focus.
Role nd responsbltes
The Committee’s key responsibilities are set out on the
previous page and outlined in the Committee’s terms of
reference which are available at www.tullowoilcom/about-
us/corporate-governance/board-committees.
Commttee membershp, meetns
ndttendnce
The Committee’s members are listed on the previous page
together with information about the number of scheduled
meetings held during the year and each Director’s
meetingattendance.
In addition to its scheduled meetings the Committee held
two unscheduled meetings to consider speciic items
including the appointments of new independent Non-
Executive Directors.
Non-Executve Drector successon
During the year, having assessed the skills, diversity,
experience and tenure across the Board the Committee
commissioned a search for two new Non-Executive
Directors with signiicant knowledge of our sector and
experience of operating in Africa and emerging markets.
This process led to the Committee recommending to the
Board the appointment of Roald Goethe and Rebecca
Wiles, both of whom have extensive relevant experience
and knowledge (see page 71). The Board approved both
appointments and Roald and Rebecca joined the Board on
24 February 2023 and 28 June 2023 respectively.
Commttee membershp chnes
During the year, and following the retirement of Mike Daly
after serving nine years on the Board, the Committee
reviewed the composition of each of the Board’s
Committee and following this review, the Committee
recommended to the Board the following changes:
• Audit Committee: The appointment of Roald Goethe
and Rebecca Wiles as members, with eect from 24 May
2023 and 1 January 2024 respectively.
• Safety and Sustainability: The appointment of Rebecca
Wiles as a member with eect from 1 January 2024.
• Nominations Committee: The appointment of Sheila
Khama as a member with eect from 24 May 2023.
• Remuneration Committee: The appointment of Roald
Goethe as a member with eect from 1 January 2024.
Following the changes to the Audit Committee as detailed
above Genevieve Sangudi stepped down as a member of
the Audit Committee, with eect from 1 January 2024.
The Board approved and welcomed these recommendations.
Incluson nd dverst
The Board is committed to ensuring that together
the Directors possess the requisite diversity of skills,
experience, knowledge and perspectives to support the
long-term success of the Company. The Board recognises
the role of diversity in promoting balanced and considered
decision making which aligns with the Group’s purpose,
values and strategy. All Board appointments are made on
an objective and shared understanding of merit, in line
with required competencies relevant to the Company as
identiied by the Committee.
During the year, we made great progress on our
gender diversity representation on the Board, with the
appointment of Rebecca Wiles and increasing diversity
remains one of the key focuses of the Committee.
As at the date of this Annual Report, female representation
on the Board was 33% (2022: 22%). The Committee
acknowledges the FCA’s diversity target recommendation
that at least 40% of the Board should be female and one of
the Chair or SID and/or the CEO or CFO should be female.
In line with the Parker Review, we continue to have an
ethnically diverse Board, with 44% of the Board identifying
as being ethnic minority.
We are committed to building a Board and management
team that are diverse in all respects. We are mindful of
the recommendation of the 2023 Parker Review to set a
target for 2027 for ethnic diversity, and will be considering
the appropriate target that relects the diversity of our
dynamic workforce and the areas we operate in.
The Committee also oversees the development of a
diverse pipeline for future succession to Board and senior
management appointments, including reviewing the
gender balance of senior management and its direct
reports. As at the date of this Annual Report, the SLT has
14% female representation, and among their direct reports,
female representation is 32% (excluding administrative sta).
Whilst the Committee remains committed to increasing
diversity, all appointments will be based on merit with
each candidate assessed against objective criteria, with
the prime objective to maintain and enhance the Board’s
overall eectiveness.
Nomntons Commttee report contnued
80 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Bord nd ledershp tem dverst s t 31 December 2023
As required under Listing Rule 9.8.6R, the breakdown of the gender identity and ethnic background of the Board and
executive management
2
, as at 31 December 2023 is set out in the tables below. This information is based on self-reported
data from the Board and SLT. Between 31 December 2023 and 5 March 2024, being the date at which this report is
approved, there have been no changes in composition of the Board or SLT.
Gender identity
Number
of Board
members
Percentage
of the Board
Number
of senior
positions on
the Board
1
Number
in executive
management
2
Percentage
of executive
management
Men 6 67.7% 4 6 85.7%
Women 3 33.3% 0 1 14.3%
Not speciied/prefer not to say N/A N/A N/A N/A N/A
Ethnic background
Number
of Board
members
Percentage
of the Board
Number
of senior
positions on
the Board
1
Number
in executive
management
2
Percentage
of executive
management
White British or other white 5 55.6% 2 4 57.1%
Mixed/multiple ethnic groups 0 0% 0 0 0%
Asian/Asian British 1 11.1% 1 1 14.3%
Black/African/Caribbean/Black British 3 33.3% 1 1 14.3%
Other ethnic group, including Arab 0 0% 0 1 14.3%
Not speciied/prefer not to say N/A N/A N/A N/A N/A
1. Includes CEO, CFO, Chair and Senior Independent Director.
2. Includes the Senior Leadership Team (which includes the CEO and CFO) and aligns with the FCA’s deinition of executive management.
Recrutment process
The search processes for the two new Independent
Non-Executive Directors appointed during 2023 were
assisted by the search consultant Heidrick & Struggles
which, in late 2022, also assisted with an externally
facilitated evaluation of the performance of the Board,
its Committees and Directors (the 2022 evaluation). The
results and recommendations of the 2022 evaluation
(which can be found in our 2022 Annual Report and
Accounts on pages 69 and 70), together with other factors
(including stakeholder engagement) purposively informed
the scope of the searches and the skills and experience
that the Committee sought to add to the Board. Our
approach to diversity and inclusion was factored into
the search processes and a long list of candidates
was compiled taking into account the competencies
required as identiied by the Committee. This long list
was considered by the Committee and a short list of
candidates were identiied who then met with Chair,
CEO and SID. Following these meetings the Committee
recommended to the Board the appointment of Roald
andRebecca.
Externl ppontments
To ensure that Directors continue to have suicient time to
commit to discharge their duties, any additional external
appointments undertaken require advance approval by the
Board. The Directors signiicant external appointments are
disclosed in their biographies on pages 70 and 71.
Revew of Commttee effectveness
The Committee undertook a review of its eectiveness
in 2024, in respect of the year ended 31 December 2023,
with the results reported to the Board (see pages 77 and
78). Iam pleased to conirm that the Committee was
considered to be operating eectively and in accordance
with the Code and the relevant guidance. The feedback
provided has been used to shape the Committee’s annual
rolling agenda for 2024.
Phuthuma Nhleko
Chair of the Nominations Committee
5 March 2024
Tullow Oil plc Annual Report and Accounts 2023 – 81
Financial statements Supplementary informationStrategic report Corporate governance
Audt Commttee report
The Committee has continued to
review the eectiveness of the Group’s
control environment and strengthen
its risk management process.
Martin Greenslade
Chair of the Audit Committee
e responsbltes
• Oversees inancial reporting and disclosures including
monitoring the integrity of the inancial statements and
reviewing and challenging the appropriateness and
consistency of signiicant accounting policies.
• Monitors and assesses the adequacy and eectiveness
of risk management systems and internal controls.
• Oversees the relationship with the external auditor and
the eectiveness of the audit process.
• Oversees the work programme of internal audit and the
system of ethics and compliance.
2023 e ctvtes
• Reviewed the signiicant accounting judgements made
during the year.
• Monitored the developments arising from the internal
audit programme.
2024 prortes
• Monitor developments and review processes and
procedures to prepare for upcoming changes in relation
to Audit and Corporate Governance reforms.
• Enhance and further embed our Enterprise Risk
Management framework.
Allocton of Audt Commtteetme* (%)
Activity* %
Financial reporting
Internal controls and
risk management
Special topics
External audit
Corporate
governance
* Percentages are approximate.
Commttee membershp, meetns
ndttendnce
The table below sets out the number of meetings attended
out of the meetings members were eligible to attend.
Director
Scheduled
Meeting
Attendance
Martin Greenslade 4/4
Roald Goethe
1
2/2
Genevieve Sangudi
2
4/4
Mike Daly
3
2/2
1. Joined the Committee on 24 May 2023.
2. Retired from the Committee on 1 January 2024.
3. Retired from the Board and Committee on 24 May 2023.
The Committee meetings are routinely attended by
the CEO, CFO, the Group General Counsel, the Group
Financial Controller, the Head of Internal Audit and Risk
and representatives of the external auditor, and members
of Company Secretariat. The Committee also invites
other senior inance and business heads to attend certain
meetings to gain a deeper level of insight on particular
items. The Committee also met without management
present and met privately with the external audit partner
and the Head of Internal Audit and Risk.
50%
21%
7%
12%
10%
82 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Der shreholder
Overvew
As the Chair of the Audit Committee, I am pleased to present
the Committee’s report for the year ended 31 December
2023. The purpose of this report is to describe how the
Committee has discharged its responsibilities during the
year. Our core objectives include ensuring the integrity of
the Group’s inancial reporting process, the eectiveness
of the external audit and ensuring that the Company has an
eective control environment to manage risks.
Role nd responsbltes
The Committee’s key responsibilities are set out on the
previous page and outlined in the Committee’s terms of
reference which are available at www.tullowoil.com/about-
us/corporate-governance/board-committees.
Commttee membershp, meetns
ndttendnce
In line with the provisions of the Code, all Committee
members are independent Non-Executive Directors. I have
relevant and recent inancial experience as the current
Group Chief Financial Oicer at Red Sea Global and having
served as Chief Financial Oicer at Land Securities Group
plc, a listed UK real estate company between 2005 and
2021. Previously, I spent ive years as Group Finance Director
of Alvis plc, an international defence and engineering
company. I am a Fellow of the Institute of Chartered
Accountants in England and Wales. The Board remains
satisied that I possess recent and relevance inancial
experience appropriate to Chair the Committee.
During the year, the membership of the Committee was
changed, and I am pleased to formally welcome Roald
Goethe (appointed 24 May 2023) and Rebecca Wiles
(appointed 1 January 2024) as members of the Committee.
They are both already making good contributions to the
Committee’s discussions, and I look forward to working
with them in the future. Further biographical information in
relation to Roald and Rebecca is set out on page 71.
Genevieve Sangudi stepped down from the Committee
with eect from 1 January 2024. On behalf of the
Committee, I would like to thank Genevieve for her valuable
input to the Committee over the last few years. In May
2023, Mike Daly also stepped down from the Board and
the Committee and I would also like to thank Mike for his
signiicant contribution to the Committee during his tenure.
In addition to the Committee’s scheduled meetings
during the year the Committee held conference calls
between meetings to consider speciic items. Meetings
are scheduled to allow suicient time for full discussion of
key topics and to enable early identiication and resolution
of risks and issues. Meetings are aligned with the Group’s
inancial reporting calendar. The Committee sets an
annual work plan, developed from its Terms of Reference,
with standing items that the Committee considers at each
meeting, in addition to areas of risk identiied for detailed
review and any matters that arise during the year.
Snfcnt ssues nd fnncl udements
The signiicant issues and primary areas of inancial judgement considered by the Committee in relation to the 2023
accounts and how these were addressed are detailed below. The related Group accounting policies can be found on
pages 134 to 144.
Signiicant inancial
judgements and areas of
estimation How the Committee addressed these judgements and areas of estimation
Carrying value of
intangible exploration
and evaluation assets
A detailed accounting paper was received by the Committee from management on
the Group’s exploration and evaluation assets, with a separate paper for Kenya, given
its materiality. The papers documented management’s assessment of indicators for
impairment and, if required, showed calculations for the impairments. The Committee
reviewed these papers and challenged management’s position, with particular focus
on the Kenya development project given key changes to the project in 2023, at the
February 2024 Audit Committee meeting.
The Committee supported management’s assessment that an impairment was
required in respect of Kenya based on the judgemental assessment performed and
ensured there was an appropriate disclosure of this judgement in the Annual Report
and Accounts.
Tullow Oil plc Annual Report and Accounts 2023 – 83
Financial statements Supplementary informationStrategic report Corporate governance
Signiicant inancial
judgements and areas of
estimation How the Committee addressed these judgements and areas of estimation
Carrying value of
property, plant and
equipment (PP&E)
The Committee received and reviewed the papers prepared by management on the
Group’s oil price and discount rate assumptions, which are used in the assessment
of the carrying value of PP&E. At the September, November and February Audit
Committee meetings these assumptions were challenged by the Committee
compared to independent oil price forecasts. The Committee also challenged the
Company’s calculation of discount rates, with particular focus on the asset and
exploration risk adjustments made by management to a peer group weighted average
cost of capital.
At the September and February Audit Committee meetings the Audit Committee
reviewed and challenged detailed papers on management’s assessment of impairment
triggers and resulting impairment tests for PP&E. The Committee gave particular
focus to TEN, given the materiality of historical impairments made to that asset. The
Committee also discussed the Group’s reserves and resources with the Group’s
principal external reserves auditor, TRACS, at the February Committee meeting to
gain comfort over management’s view of the carrying value of PP&E. The Committee
concurred with the impairments proposed by management and ensured there was an
adequate disclosure of this judgement in the Annual Report and Accounts.
Going concern and
viability
A detailed accounting paper and cash low analysis was prepared by management
and provided to the Committee, which then reviewed and challenged the assumptions
and judgements in the underlying going concern and viability statement forecast
cash lows. The Committee discussed with management the risks, sensitivities and
mitigations identiied by management to ensure the Company can continue as a
going concern. The Committee also discussed the ive-year time horizon used by
management for the viability statement, which aligns with the revised debt maturities
following the reinancing in 2023.
The Committee concurred with management’s assessment and ensured there was an
adequate disclosure of this judgement in the Annual Report and Accounts.
Gabon asset swap A detailed accounting paper was prepared by management and reviewed by the
Committee documenting the background and accounting treatment of the Gabon
asset swap agreement and its impact on Group results. The disposal group met the
criteria for classiication as held for sale under IFRS 5 and the carrying amounts have
been presented as such on the balance sheet. On completion, any positive dierence
between the fair value of the acquired assets and the carrying value of the disposal
group will be recognised as a gain in the income statement.
TEN FPSO Lease
accounting
A detailed accounting paper was prepared by management documenting the
accounting treatment of the lease extension on the TEN FPSO following a decision
to not exercise the purchase option. The extended term has been treated as a lease
remeasurement in line with the requirements of IFRS 16, and the discount rate and
lease term have been updated to relect the new expected end date. The adjustments
were made to the right-of-use asset and liability on the balance sheet.
The Committee concurred with management’s assessment and ensured there was an
adequate disclosure of this judgement in the Annual Report and Accounts.
Uncertain tax and
regulatory treatments
Detailed accounting papers on all tax and regulatory exposures were prepared
by management for the Committee’s review. Where relevant, the papers included
summaries of external legal or tax advice on particular tax claims and assessments
received. The Committee also met with the Head of Tax in the February meeting to
discuss and challenge the key judgements and estimates made including the likelihood
of success and the quantum of the total exposure for which provision had been made.
The Committee concurred with management’s assessment and ensured there was an
adequate disclosure of this judgement in the Annual Report and Accounts.
Audt Commttee report contnued
Snfcnt ssues nd fnncl udements contnued
84 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Externl udtor
The Committee has primary responsibility for managing the
relationship with the external auditor, including assessing
its performance, eectiveness and independence,
recommending to the Board its re-appointment or removal,
and agreeing terms of engagement.
Based on the competitive tender process conducted
in 2018, the Committee recommended to the Board
the appointment of Ernst & Young LLP (EY) as Tullow’s
statutory auditor for the 2020 inancial year, which was
approved by shareholders at the 2021 AGM. Under current
regulations, the Group will be required to retender the
audit by no later than the 2029 inancial year.
The external auditor is required to rotate the audit partner
responsible for the Group audit every ive years. Mr Paul
Wallek is EY’s lead audit partner with eect from 2020.
During the year the Committee held private meetings with
the external auditor, and I also maintained regular contact
with the audit partner throughout the year. These meetings
provide an opportunity for open dialogue with the external
auditor without management being present, and help
ensure that the external auditor is able to operate eectively
and challenge management suiciently when required.
Effectveness of externl udt process
The Audit Committee is responsible for assessing the
qualiications, expertise and resources, and independence
of EY, as well as the eectiveness of the audit process. The
Committee’s assessment of the 2023 audit process covered
all aspects of the audit service provided by EY, including:
• Obtaining a report on the auditor’s own internal quality
control procedures and consideration of the auditor’s
annual transparency reports in line with the Code.
• Approving the auditor’s terms of engagement
andremuneration.
• Reviewing and approving the audit plan prepared by
the auditor at the start of the audit cycle. This plan
identiies key audit risks which included oil and gas
reserve estimations; recoverability of Kenya exploration
and evaluation assets; recoverability of property plant
and equipment; going concern; revenue recognition;
uncertain tax treatments and accounting for the Gabon
asset swap.
• Discussing and challenging a number of matters
including the auditor’s assessment of the Group’s
signiicant inancial risks and the performance of
management in addressing these risks, the auditor’s
opinion of management’s role in fulilling obligations
for the maintenance of internal controls and the
transparency and responsiveness of interactions
withmanagement.
• Conirming the independence of the audit including
how the auditor has exercised professional challenge.
• Assessing the eectiveness and performance of the
external auditor and the audit process based on the
Committee’s interactions with the external auditor and
management’s survey.
As a result of the Committee’s assessment, the Committee
concluded that the external audit process had operated
eectively. EY and management have agreed on step
plans to ensure the quality of audit, team continuity and
focus on continuous improvement is maintained.
Non-udt servces nd ndependence
The Committee closely monitors the level of audit and
non-audit services provided by the auditor to the Group.
Non-audit services are normally limited to assignments
that are closely related to the annual audit or where the
work is of such a nature that a detailed understanding
of the Group is necessary. An internal Tullow standard
for the engagement of the auditor to supply non-audit
services is in place to formalise these arrangements.
Itwas revised in January 2022 and is reviewed regularly.
Itrequires Committee approval for all non-trivial categories
of non-audit work. In 2023 total fees for audit-related work
amounted to $2.5 million and total fees for non-audit-
related work amounted to $0.5 million. See note 4 to the
inancial statements for further information.
In addition to processes put in place to ensure segregation
of audit and non-audit roles, EY is required, as part of the
assurance process in relation to the audit, to conirm to the
Committee that it has both the appropriate independence
and the objectivity to allow it to continue to serve the
Company’s shareholders. This conirmation is received
every six months, and no matters of concern were
identiied by the Committee.
Internl controls nd rs mnement
The Board has overall responsibility for risk management
and internal control systems, and for reviewing their
eectiveness. This process is overseen by the Committee
on the Board’s behalf.
In 2023, the Committee reviewed, discussed and briefed
the Board on risks, controls and assurance, including the
annual assessment of the system of risk management
and internal control, to monitor the eectiveness of the
procedures for internal control over inancial reporting,
compliance and operational matters.
The Directors obtained comfort over the eectiveness of
the Group’s risk management and internal control systems
through various assurance activities that included:
• Audits undertaken by the Internal Audit team.
• Enterprise risk management and assurance processes.
• The external auditor’s observations on internal inancial
controls identiied as part of its audit.
• Regular performance, risk and assurance reporting by
the Business Unit and Corporate teams to the Board.
Tullow Oil plc Annual Report and Accounts 2023 – 85
Financial statements Supplementary informationStrategic report Corporate governance
Internl controls nd rs mnement
contnued
During the year, in conjunction with the Board, the
Committee completed two robust assessments of the
signiicant risks facing the Company, including those that
would threaten its business model, future performance,
solvency or liquidity. This assessment included the
identiication and discussion of principal and emerging
risks. The assessment process included engagements with
the SLT helping to support understanding, ownership and
accountability of enterprise-wide risks across all layers of
the Company. For each of the principal risk categories, the
Board reviewed the risk strategies to ensure they were still
valid, and their associated risk appetites.
Internal Audit periodically presented its indings to the
Committee over delivery of the assurance plan, progress
of issues raised and their timely resolution. On occasions,
senior management representatives from the business
were also invited to attend the Committee to provide
updates on key matters such as the annual tax strategy
review and TCFD reporting.
In addition, during the year, the Committee received reports
from the principal independent reserves auditor TRACS and
reviewed the arrangements in place for managing cyber risk
relating to the Group’s critical information systems.
All identiied indings were assessed, with no indications of
fraud noted.
Based on the results of the annual eectiveness review
of risk management and internal control systems, the
Directors concluded that the system of internal controls
operated eectively throughout the inancial year and
up to the date on which the inancial statements were
signed. There were areas identiied for improvement and
the Directors are conident that they are in the process of
being addressed.
Internl udt requrements
The Committee’s role is to consider how the Group’s
internal audit requirements are satisied and make relevant
recommendations to the Board. Throughout 2023
the Committee requested and received reports from
management on its resource and budget planning for the
Internal Audit function in order to assess the eectiveness
of internal audit and satisfy itself that the quality, experience
and expertise of the function is appropriate for the business.
The level of internal resource available to the function was
in line with target from throughout the year. In addition, the
internal audit function uses external expertise for specialist
reviews and so the Committee challenged management to
ensure suicient budget was made available for additional
external resource where required.
During the year:
• The Committee reviewed and challenged the 2023
programme of internal audit work developed to address
both inancial and overall risk management objectives
identiied within the Group during the planning phase. The
plan was subsequently adopted with progress reported
at the Committee’s meetings and feedback provided. A
total of 19 internal audits were planned for 2023 of which
15 were completed with two in progress at the year end,
one review was postponed into 2024 and two reviews
were consolidated into one. The primary changes in the
plan were due to re-assessments of the Group’s priorities
and the results of completed audits. Based on the nature
of the audits completed, the assurance performed by
management, the Committee’s subsequent assessment
and the scale of the business, the Committee believes an
appropriate level of assurance has been performed over
the Group’s internal control environment.
• Internal Audit also ran a systematic programme of audits
of suppliers’ compliance with contractual terms, with a
focus on signiicant and high-risk contracts.
• Detailed results from the internal audits were reported to
management and in summary to the Committee during
the year. Where required, the Committee receives full
reports and details on any key indings and receives
regular reports on the status of the implementation of
Internal Audit recommendations.
• The Committee assessed the eectiveness of Internal
Audit through meeting with the Head of Internal Audit,
its review and assessment of the Internal Audit Plan and
the results of audits reported.
Whstleblown procedure
In line with best practice and to ensure we operate
to the highest ethical standards, an independent
whistleblowing procedure was established in 2011 and
operated throughout 2023. The procedure allows sta to
conidentially raise any concerns about business practices
and complements our internal reporting processes. The
Committee considers the whistleblowing procedures to be
appropriate for the size and scale of the Group.
The whistleblowing policy is included in the Code of
Ethical Conduct which is available to all sta in printed
form and on our intranet. Each member of sta is annually
required to complete an online awareness course to refresh
their knowledge of key provisions of the Code of Ethical
Conduct, which was included as a Group-wide KPI.
The Committee receives from the Group Ethics and
Compliance Manager summaries of investigations of
signiicant known or suspected misconduct by third
parties and employees including ongoing monitoring
andfollowing up of internal investigations.
Revew of Commttee effectveness
The Committee undertook a review of its eectiveness in
2024, in respect of the year ended 31 December 2023, with
the results reported to the Board (see pages 77 and 78). I am
pleased to conirm that the Committee was considered to be
operating eectively and in accordance with the Code and
the relevant guidance. The feedback provided has been used
to shape the Committee’s annual rolling agenda for 2024.
Martin Greenslade
Chair of the Audit Committee
5 March 2024
Audt Commttee report contnued
86 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Sfet nd Sustnblt Commttee report
The Committee continued to monitor
the Group’s safety and environmental
performance and its progress in
embedding sustainability across
thebusiness.
Mitchell Ingram
Chair of the Safety and Sustainability Committee
e responsbltes
• Oversees implementation of the Company’s strategic
sustainability priorities.
• Monitors the implementation of the Company’s
environmental, health, security and asset protection,
andsafety policies and reviews key learnings from
safety incidents.
• Reviews the Company’s approach to delivering Shared
Prosperity, including local content, social investment and
social performance.
• Reviews the pathways to decarbonise the Company’s
operations, and the associated costs and risks, and approves
the timeframe in which Tullow intends to achieve Net Zero.
2023 e ctvtes
• Monitored progress in relation to Net Zero Scope 1 and 2
emissions by 2030 commitment.
• Reviewed human rights salient issues, roadmap and
action plans.
• Reviewed performance against sustainability KPIs and
provided feedback.
• Promoted occupational health and safety, process safety
and asset integrity across Ghana operations.
2024 prortes
• Continue to improve safety, operational and
environmental performance.
• Ensure sustainability strategy delivers sustainable
value creation.
• Continue to monitor the Net Zero delivery plan and the
progress of the nature-based oset solution in Ghana.
Allocton of Sfet nd Sustnblt
Commtteetme* (%)
Activity* %
Safety performance, safety
risk management and
incident reviews
Sustainability performance
and KPI reviews
Shared Prosperity
programmes including
local content
Climate change
mitigation and Net Zero
progress and plans
Asset health and integrity
Other topics including human
resources, human rights
* Percentages are approximate.
Commttee membershp, meetns
ndttendnce
The table below sets out the number of scheduled
meetings attended out of the meetings members were
eligible to attend.
Director Attendance
Mitchell Ingram 4/4
Genevieve Sangudi 4/4
Sheila Khama 4/4
Mike Daly
1
2/2
1. Stepped down from the Board and the Committee on 24 May 2023.
The Director of People and Sustainability and the Managing
Director, Ghana, who report to the Committee, are invited
to attend each meeting of the Committee and participated
in all of the meetings during 2023. The Climate Change
Manager, Group Shared Prosperity Manager, Group
Sustainability Manager and the Group EHS Manager also
attend meetings of the Committee by invitation and were
present at most of the meetings during the year. The
Committee is supported by the Company Secretary.
25%
20%
15%
15%
10%
10%
Tullow Oil plc Annual Report and Accounts 2023 – 87
Financial statements Supplementary informationStrategic report Corporate governance
Sfet nd Sustnblt Commttee report contnued
Der shreholder
Overvew
The Safety and Sustainability Committee oversees
our sustainability strategy and performance in relation
to its four pillars: Safe Operations, Shared Prosperity,
Environmental Stewardship and Equality and Transparency.
2023 was another active year for the Committee during
which several strategic programmes were advanced
across all four sustainability pillars.
Role nd responsbltes
The Committee’s key responsibilities are set out on the
previous page and outlined in the Committee’s terms of
reference which are available at www.tullowoil.com/aboutus/
corporate-governance/board-committees.
Commttee membershp, meetns
ndttendnce
The Committee’s members are listed on the previous
pagetogether with information about the number of
scheduled meetings held during the year and each
Director’s meeting attendance.
Commttee ctvtes
To ensure that sustainability is embedded across all
business activities and decision making, at each meeting the
Committee reviews the sustainability KPI which forms part of
the Group’s scorecard (see pages 20 and 21). As needed, the
Committee also conducts in-depth reviews of strategically
important areas of concern for the Group.
In 2023, the Committee engaged across several topics
which are core to our sustainability performance and
progress. Personal and process safety continued to be an
important discussion at every meeting and the Committee
reviewed all notable safety events including signiicant
safety events and high-potential near misses. This included
a lost-time injury on the Jubilee FPSO in which an oshore
worker required osite medical treatment. The Committee
reviewed the thorough investigation of the incident
which took place and corrective actions to prevent similar
incidents. Similarly, the Committee reviewed ongoing
investment in life cycle integrity and maintenance of
operated assets and new safety campaigns such as
‘Learning from Normal Work’ and enhanced safety
hazard risk management practices. The Committee also
examined safety risk mitigation at non-operated assets.
Advancing plans to deliver our Net Zero Scope 1 and 2
emissions by 2030 commitment, and the interim goal
of eliminating routine laring by 2025, were a regular
feature of the Committee’s agenda in 2023, and included
updates on the implementation of modiications at Jubilee
and TEN ields to enable elimination of routine laring.
Additionally, the Committee played an instrumental role in
considerations leading to the agreement to partner with
the Ghana Forestry Commission in a project which will
oset more than 600,000 tonnes of carbon emissions per
year, representing 100% of Tullow’s residual hard to abate
emissions. The Committee is supportive of the agreed
hands-on approach, which involves upfront investment,
aligning on carbon standards, engagement with
communities in the project regions in Ghana to improve
livelihoods and deliver environmental beneits.
During the year, in relation to our human rights policy, the
Committee considered the salient issues most relevant
to our business activities. Following this review the
Committee oversaw the development of a new human
rights roadmap and the development of plans to further
strengthen the protection of human rights across the
Group (see page 37).
The Committee continued to monitor delivery of our
Shared Prosperity strategy including ongoing educational
initiatives in host countries, accelerated through
partnerships with experienced local organisations.
The outcomes of these activities in terms of improved
enrolment in education, higher school grades and
stronger interest in STEM higher education represent an
important contribution to delivering Shared Prosperity
in the communities where we operate. Similarly, the
Committee reviewed local content performance, including
the positive development of collaboration with the Ghana
Petroleum Commission to broaden and deepen the nature
of knowledge and the extensive engagement and support
provided to local suppliers and entrepreneurs.
The Committee evaluated and agreed the Group’s
sustainability disclosures including the annual
Sustainability Report and its TCFD statement (see pages
38 to 47).
Revew of Commttee effectveness
The Committee undertook a review of its eectiveness
in 2024, in respect of the year ended 31 December 2023,
with the results reported to the Board (see pages 77 and
78). I am pleased to conirm that the Committee was
considered to be operating eectively and in accordance
with the Code and the relevant guidance. The feedback
provided has been used to shape the Committee’s annual
rolling agenda for 2024.
Mitchell Ingram
Chair of the Safety and Sustainability Committee
5 March 2024
88 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Remunerton report
The Remuneration Committee seeks
to align reward with the Company’s
strategy, culture and delivery of long-
term shareholder value.
Genevieve Sangudi
Chair of the Remuneration Committee
e responsbltes
• Ensures Executive Directors and the SLT are rewarded
for promoting the long-term sustainable success of the
Company and delivering on its strategy.
• Reviews the remuneration arrangements for the
widerworkforce.
2023 e ctvtes
• Setting an appropriately stretching set of key
performance metrics for the 2023 and 2024
KPIscorecards.
• Monitoring progress against the 2023 KPI scorecard.
• Undertaking a review of the Directors’ Remuneration
Policy (the Policy), including consideration of alternative
incentive structures, performance measures, and other
Policy elements.
• Reviewing the remuneration arrangements, including
benchmarking of Total Remuneration for the SLT
and reviewing the implementation of the revised pay
philosophy and principles for the wider workforce.
2024 prortes
• Monitor progress against the 2024 KPI scorecard.
• Cascade principles of 2023 Directors’ Remuneration
Policy below Board/SLT level.
• Review alignment of remuneration arrangements across
the workforce to ensure fair and consistent reward
based on performance.
Allocton of Remunerton
Commtteetme* (%)
Activity* %
Executive and
senior management
remuneration
Wider workforce pay
and conditions
Remuneration policy
Remuneration
reporting and
corporate
governance
Scorecard
performance review
* Percentages are approximate.
Commttee membershp, meetns
ndttendnce
The table below sets out the number of meetings attended
out of the meetings members were eligible to attend.
Director
Scheduled
Meeting
Attendance
Genevieve Sangudi 5/5
Mitchell Ingram
1
4/5
Martin Greenslade 5/5
1. Mitchell Ingram was unable to attend the meeting due to
personalreasons.
The CEO and other members of the SLT may be invited
to attend Committee meetings to provide business
context and performance updates. However, no member
of the SLT is present when their own remuneration is
determined. The Company Secretary acts as Secretary to
the Committee.
23%
17%
20%
28%
11%
Tullow Oil plc Annual Report and Accounts 2023 – 89
Financial statements Supplementary informationStrategic report Corporate governance
Annul sttement on remunerton
Der shreholder
On behalf of the Board, I am presenting the Remuneration
Committee’s report for 2023 on Directors’ remuneration.
The report is divided into three main sections:
• This Annual Statement, which contains a summary of
performance and pay for 2023, the Committee’s activities
during the year, and the proposed implementation of the
Directors’ Remuneration Policy for 2024.
• The 2023 Annual Report on Remuneration, which
provides details of the remuneration earned by Directors
in the year ended 31 December 2023 and how the Policy
will be operated in 2024.
• The Directors’ Remuneration Policy Report, which was
formally approved by the shareholders at the 2023 AGM
and sets out the forward-looking three-year Directors’
Remuneration Policy for the Company.
New Drectors’ Remunerton Polc
pproved t the 2023 AGM
As disclosed last year the Committee undertook a
comprehensive review of the Directors’ Remuneration Policy
in 2022 and early 2023, which included consultation with
many of our major shareholders. Following this process it was
pleasing to see the strong support for the Policy at our 2023
AGM, with the Policy report receiving a 98.6% vote in favour.
The feedback received from shareholders during this
consultation helped inform the Committee’s decisions
on the inal terms of the Policy, and has continued to
form part of the Committee’s discussions during the
year. Iwould like to thank those who took part in the
consultation exercise for their time and input.
2023 performnce context
During the year, we made material inancial and operational
progress. A key event in the year was the start-up of the
Jubilee South East (JSE) project which delivered material
production growth from the ield and in turn, marked a step-
change in our cash low generation. We also reined our non-
operated portfolio through a swap agreement and licence
extensions in Gabon. $170 million of free cash low was
generated during the year, which was ahead of expectations,
and we secured a $400 million debt facility agreement with
Glencore, which demonstrates our ability to access long-
term capital. We further strengthened our balance sheet
though continued deleveraging and proactive buy-backs of
our bonds. We remain on track to deliver our target of c.$800
million free cash low over the 2023 to 2025 period and
create an optimal capital structure.
2023 full-year production was 62.7 kboepd, marginally
below expectations due to water injection challenges and
a short-term delay to the start up of the JSE project. This
production generated revenue of $1,634 million (2022:
$1,783 million); gross proit of $765 million ($1,086 million)
and a loss after tax of $110 million (2022: proit after tax
of $49 million). This loss was driven by impairments and
write-os totalling $435 million.
Remunerton report contnued
We are pleased with the operational and inancial progress
made during the year to position Tullow for growth.
Summr of Executve Drector
remunerton for 2023
As set out in the Policy, 2023 was a transitionary year as
we move from the Tullow Incentive Plan (TIP) to separate
annual bonus and LTIP awards. Rahul Dhir’s 2023 variable
pay was therefore earned under the TIP, whereas Richard
Miller, due to his appointment as CFO in January 2023, was
eligible for an annual bonus.
Following the end of the year the Committee reviewed
the performance achieved against the KPI scorecard used
for annual bonus awards. For TIP awards the scorecard
also included a 50% element based on relative TSR. The
details of the scorecard and the performance achieved
can be found on pages 93 to 96. It was noted that there
had been resilient performance across a number of our
KPIs including safety, inancials, production, business plan
implementation, sustainability, unlocking value, leadership
eectiveness and capital structure.
Based on this assessment the Committee awarded
Rahul Dhir a TIP award of 106% of salary (i.e. 26.5% of the
maximum 400% of salary potential), which takes into
account the progress against annual KPIs and the three-
year TSR measurement period, which commenced 1 January
2021 and ended 31 December 2023. In line with the Policy,
50% of the TIP award is paid in cash, with the remaining 50%
deferred into shares which vest after ive years.
Based on performance against the annual KPIs, the
Committee felt it appropriate to award an annual bonus to
Richard Miller of 79.5% of salary (i.e. 53% of the maximum
150% of salary opportunity). In line with the Policy, one- third
of the bonus earned will be deferred into shares for a
period of three years.
The Committee considers these outcomes to be appropriate
in the context of the performance achieved over the relevant
period and has not applied discretion to the outcome.
As disclosed last year, in June 2023 we granted the irst LTIP
awards under the Policy to Rahul Dhir and Richard Miller, which
are subject to performance over the three years from 1 January
2023. To determine the number of underlying shares for each
LTIP award, the Committee decided to apply the same share
price as used to determine the March 2023 TIP share awards in
relation to the 2022 performance year, which was 17% higher
than the share price on the day the LTIP awards were made.
Details of these awards can be found on page 100.
Summr of Executve Drector
remunerton for 2024
In early 2024 the Committee reviewed the salary levels for
the Executive Directors, taking into account the average
pay increase awarded to UK-based employees of 3.5%.
The base salary for Rahul Dhir, our CEO, will be increased
by 2.8%, below the typical increase awarded to UK based
employees for 2024. Richard Miller, our CFO, was appointed
on 1 January 2023 and his salary on appointment was set
at a level that considered that this was his irst FTSE CFO
role. During 2023 his performance has been strong, he
90 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
0.0%
has gained signiicant experience and he has continued to
develop in the role. Therefore, the Committee determined
that it was fair and appropriate to increase his base salary
by 9.3%. Following this increase the CFO’s base salary will
remain below that of his predecessor. Base salary increases
will apply with eect from 1 April 2024.
As set out in the approved Policy, 2024 will be the inal
transition year for Rahul Dhir, with performance for the 2022
to 2024 period continuing to be rewarded through the TIP.
This will be based 50% on relative TSR over three years, and
50% on the annual KPI scorecard performance in 2024.
We have inalised our annual KPI scorecard for 2024 with a
focus on safety, inancial performance, production, business
plan implementation, embedding sustainability, unlocking
value and leadership eectiveness. We believe all targets to
be suitably challenging.
LTIP awards will be made to Rahul Dhir and Richard Miller in
2024, and will continue to be based on 50% of relative TSR and
50% of absolute TSR performance assessed over the three
years from 1 January 2024. Details can be found on pages 101
and 102.
Remunerton rrnements for the
wderworforce
During 2023 the Committee continued to consider the
alignment of remuneration arrangements through the
workforce, ensuring all employees are rewarded fairly
andconsistently for their contribution to the overall
Company performance. In doing so, the Committee took
into account the presentations made to the Board on the
Company’s initiatives regarding culture and the Employee
Value Proposition.
Emploee enement
During the year, members of the Committee met with the
workforce Tullow Advisory Panel (TAP), a sta panel, which
collectively represents Tullow’s global workforce. These
meetings provided an opportunity to gather feedback
from employees to help shape decisions with regards to
the ongoing development of Tullow’s Employee Value
Proposition. On behalf of the Committee I would like to
thank TAP members and other employees for their input to
the Board’s discussions.
Revew of Commttee effectveness
The Committee undertook a review of its eectiveness in
2024, in respect of the year ended 31 December 2023, with
the results reported to the Board (see pages 77 and 78). I am
pleased to conirm that the Committee was considered to be
operating eectively and in accordance with the Code and
relevant guidance. The feedback provided has been used to
shape the Committee’s annual rolling agenda for 2024.
Loon hed
On behalf of the Committee, I would like to again thank
shareholders for their vote approving the Directors’
Remuneration Policy and the Directors’ Remuneration
report at the last AGM and look forward to your continued
support over the coming year. If you have any comments
or questions on any element of the report, please contact
me via our Company Secretary, Adam Holland, at
companysecretary@tullowoil.com.
Genevieve Sangudi
Chair of the Remuneration Committee
5 March 2024
Executve remunerton t lnce
Assessment of TIP Awrds
Assessment of Annul Bonus Awrds
Safety Financial Performance Production Business Plan Implementation Sustainability
Unlocking Value Leadership Eectiveness Total Shareholder Return
100%0% 10% 20% 30% 40% 50% 60% 70% 80%
90%
Target
%
Target
100%
Achieved
26.5%
5%
5%
10%
2.2%
10% 5%
3.8%
50%7.5%
3.8%
5%
4.2%
7.5%
4.9%
Achieved
%
100%
0% 10% 20% 30% 40% 50% 60% 70% 80%
90%
Target
%
Target
100%
Achieved
53%
10%
10%
20%
4.4%
20%
5.3%
10%15%
7.5%
10%
8.4%
15%
9.9%
Achieved
%
7.5%
2.7%
Tullow Oil plc Annual Report and Accounts 2023 – 91
Financial statements Supplementary informationStrategic report Corporate governance
Annul Report on Remunerton
Drectors’ remunerton (udted)
The remuneration of the Directors for the year ended 31 December 2023 payable by Group companies in respect of
qualifying services and comparative igures for 2022 and 2023 are shown in the table below:
Fixed pay Tullow Incentive Plan Annual Bonus Plan
Salary
fees
1
£
Pensions
2
£
Taxable
ben eits
3
£
TIP cash
£
Deferred
TIP s hares
4
£
Cash
Bonus
£
Deferred
shares
4
£
Total
£
Total
ixed
pay
£
Total
variable
pay
£
Executive Directors
Rahul Dhir 2023 613,150 91,972 28,284 327,752 327,752 – – 1,388,910 733,406 655,504
2022 593,050 88,958 20,513 358,440 358,440 – – 1,419,400 702,520 716,880
Richard Miller 2023 366,000 36,600 11,002 – – 193,980 96,990 704,572 413,602 290,970
2022 – – – – – – – – – –
Subtotal
2023 2023 979,150 128,572 39,286 327,752 327,752 193,980 96,990 2,093,482 1,147,008 946,474
Subtotal 2022
(includes
former
Executive
Directors) 2022 708,430 117,801 52,642 496,889 358,440 – – 1,734,195 878,867 855,329
Non-Executive
Directors
Mike Daly
5
2023 27,083 – 3,706 – – – – 30,789 30,789 n/a
2022 65,000 – 256 – – – – 65,256 65,256 n/a
Genevieve
Sangudi
6
2023 80,000 – 7,417 – – – – 87,417 87,417 n/a
2022 73,981 – 10,242 – – – – 84,223 84,223 n/a
Sheila Khama 2023 65,000 – 8,414 – – – – 73,414 73,414 n/a
2022 65,000 – 9,311 – – – – 74,311 74,311 n/a
Martin
Greenslade 2023 100,000 – 3,190 – – – – 103,190 103,190 n/a
2022 87,962 – 279 – – – – 88,241 88,241 n/a
Roald Goethe
7
2023 54,667 – 3,358 – – – – 58,025 58,025 n/a
2022 – – – – – – – – – n/a
Rebecca
Wiles
8
2023 33,750 – 3,267 – – – – 37,017 37,017 n/a
2022 – – – – – – – – – n/a
Mitchell
Ingram 2023 80,000 – 2,902 – – – –
82,902 82,902 n/a
2022 80,000 – 4,210 – – – – 84,210 84,210 n/a
Phuthuma
Nhleko 2023 300,000 – 45,260 – – – – 345,260 345,260 n/a
2022 300,000 – 31,064 – – – – 331,064 331,064 n/a
Subtotal
2023 2023 740,500 – 77,514 – – – – 818,014 818,014 n/a
Subtotal 2022
(includes
former
Directors) 2022 749,661 – 55,362 – – – – 805,023 805,023 n/a
Total 2023 1,719,650 128,572 116,800 327,752 327,752 193,980 96,990 2,911,496 1,965,022 946,474
Total
(includes
former
Directors) 2022 1,458,090 117,801 108,004 496,889 358,440 – – 2,539,218 1,683,889 885,329
1. Base salaries of the Executive Directors have been rounded up to the nearest £10 for payment purposes, in line with established policy.
2. None of the Executive Directors have a prospective entitlement to a deined beneit pension by reference to qualifying services. Pension beneits
for Executive Directors are workforce aligned. Rahul Dhir receives cash in lieu of pension contribution. Richard Miller receives a partial employee
contribution towards the regular company pension plan with the balance paid as cash in lieu.
Remunerton report contnued
92 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
3. Taxable beneits comprise private medical insurance for all Executive Directors and any other taxable expenses. Travel and subsistence beneits provided
to Executive Directors and Non-Executive Directors have also been included on a grossed-up basis as Tullow meets the UK tax liability on their behalf.
4. These igures represent that part of the TIP and Annual Bonus Awards required to be deferred into shares.
5. Mike Daly retired from the Board on 24 May 2023.
6. Genevieve Sangudi was appointed Chair of the Remuneration Committee following the AGM on 25 May 2022.
7. Roald Goethe was appointed Non-Executive Director eective 24 February 2023.
8. Rebecca Wiles was appointed Non-Executive Director eective 28 June 2023.
Mterl contrcts
There have been no contracts or arrangements during the inancial year in which a Director of the Company was
materially interested and/or which were signiicant in relation to the Group’s business.
Pments to pst Drectors
No payments were made to past Directors in 2023.
Pments for loss of offce
No payments for loss of oice were made to past Directors in 2023.
Determnton of 2024 TIP nd Annul Bonus Awrds bsed on performnce to 31 December 2023 (udted)
We measure performance using a corporate scorecard that includes a number of inancial and non-inancial key
performance indicators (KPIs). The corporate scorecard is central to Tullow’s approach to performance management and
the 2023 metrics were agreed with the Board and focus on targets that were deemed important for the year. Each KPI
measured has a percentage weighting and inancial indicators have trigger, base, and stretch performance targets.
For the Executive Directors participating in TIP, an additional TSR metric was included, which represents a weighting of
50% of the total corporate scorecard.
Progress against the corporate scorecard is tracked during the year to assess performance against strategy. Following
the end of the 2023 inancial year, the corporate scorecard performance was assessed as 53% of the maximum for
Annual Bonus Award and the workforce and 26.5% for the Executive Directors participating in TIP taking into account
the additional TSR metric. The Committee is satisied with the outcome based on the broader view of performance and
stakeholder experience.
Tullow Oil plc Annual Report and Accounts 2023 – 93
Financial statements Supplementary informationStrategic report Corporate governance
Annul Report on Remunerton contnued
Detls of vrble p erned n the er
Details of the performance targets and performance against those targets are as follows:
Performance
metric Performance
% of TIP
award
(% of salary
maximum)
Actual
TIP award
Rahul Dhir
% of
annual
bonus
award
(% of
salary
maximum)
Actual
annual
bonus
award
Richard
Miller
Safety
Measure of Total
Recordable
Incident Rate
(TRIR) and
Loss of Primary
Containment
(LOPC) Tier 1 & 2
as per IOGP
Health and safety of our sta and everyone who is associated with
our operations.
7.5%
(30%)
3.75%
(15%)
15%
(22.5%)
7.5%
(11.25%)
Trigger Base Stretch
2023
Performance
TRIR as per IOGP 0.77 0.60 0.48 0.20
Payout 0% 50% 100% 100%
Trigger Base Stretch
2023
Performance
Number of LOPC
Tier 1 & 2 as per
IOGP
Tier 1: 0
Tier 2: 2
Tier 1: 0
Tier 2: 1
Tier 1: 0
Tier 2: 0
Tier 1: 0
Tier 2: 3
Payout 20% 50% 100% 0%
In 2023 there was one recordable injury (versus none in 2022) and no
process safety events related to Loss of Primary Containment (LOPC)
at Tier 1. There were three Tier 2 LOPCs recorded in 2023.
Financial
performance
Key value driver for our business and the delivery of this KPI is driven
by how eectively we are deploying out strict cost framework and our
progress in achieving capital eiciency.
5%
(20%)
5%
(20%)
10%
(15%)
10%
(15%)
Trigger Base Stretch
2023
Performance
Operating Cash
Flow (OCF) ($mm) 726 807 888 902
Payout 0% 50% 100% 100%
Normalised operating cash low of $902 million (from our absolute
OCF of $813 million) is above our stretch target. This has been achieved
despite inlationary cost pressure during the year.
Production
Targets related
to oilproduction
and vessel
eiciency
Trigger Base Stretch
2023
Performance
10%
(40%)
2.2%
(8.8%)
20%
(30%)
4.4%
(6.6%)
Group production
(kbopd)
58 63 64 56
Payout 25% 88% 100% 0%
Trigger Base Stretch
2023
Performance
Jubilee production
eiciency
(%ofuptime) 94% 97% 98% 96%
Payout 25% 60% 100% 54%
Trigger Base Stretch
2023
Performance
TEN production
eiciency
(% of uptime) 95% 98% 99% 95%
Payout 25% 60% 100% 27%
The percentage of the award which is payable for the Base level of
performance diers for each measure to relect the relative challenge
associated with each performance target.
Production of 56.3 kbopd for 2023 was below the Trigger target
primarily due to Jubilee South East schedule delays and reduced water
injection which has now been resolved.
Remunerton report contnued
94 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Performance
metric Performance
% of TIP
award
(% of salary
maximum)
Actual
TIP award
Rahul Dhir
% of annual
bonus
award
(% of salary
maximum)
Actual
annual
bonus
award
Richard
Miller
Business plan
implementation
Budget Adherence¹ 7.5%
(30%)
4.95%
(19.8%)
15%
(22.5%)
9.9%
(14.85%)
Trigger Base Stretch
2023
Performance
Budget
Adherence 1.1 x Mid
$423m
2
0.9 x Mid $443m
Payout 0% 50% 100% 32%
Work Programme achieved considering Capex & Performance
Trigger Base Stretch
2023
Performance
Adherence to
work programme 90% 95% 100% 100%
Payout 0% 50% 100% 100%
In 2023 we delivered 100% of the planned activity for the year.
Deferral of activity in our Gabon non-operated business and
suspension of the Mauritania decommissioning operations was
replaced by accelerated Jubilee drilling.
The capex programme was delivered in line with Budget, however the
suspension of decommissioning operations in Mauritania and restart
in 2024 will result in a cost increase and this is relected in the 33%
Payout.
Sustainability
Embed
Sustainability
across the
organisation
In 2023, we progressed our Net Zero plan including ongoing
implementation of our decarbonisation initiatives on Jubilee and TEN
and together with the Ghana Forestry Commission, engaging with
various stakeholders and conducting ield mapping work on a nature-
based project which is progressing to inal investment decisions.
During the year, we completed a macro socio-economic impact
assessment of our activities in Ghana to calculate the extent of our
contribution to advancing the Ghanaian economy and improving
life for the people in Ghana; this is core to our purpose of building a
better future through responsible oil and gas development. We also
continued our focus on enhancing employability through supporting
education and enterprise. Working with our partners in Ghana, Kenya,
Guyana and Suriname we enabled more than 10,000 students to
access education and supported more than 150 teachers in training.
During the year, we made progress in all aspects of optimising local
content, including increasing spend with indigenous suppliers;
enhancing supplier education; developing supplier capacity and
monitoring supplier social and economic impact. We also refreshed
our brand and our values, with the aim of creating an inclusive,
transparent, performance-driven organisation where our people are
empowered and energised to bring their best selves to work. The
above performance delivered overall in accordance with the base
target set and provides a solid foundation to build on in the future.
Therefore, a score of 4.2% out of a possible 5% was deemed as
reasonable.
5%
(20%)
4.2%
(16.8%)
10%
(15%)
8.4%
(12.6%)
1. This is deined as percentage of work programme delivered, assessing Capex eiciency and performance against pre-set objectives and milestones.
2. Normalised to a budget-comparable value. $423 million times percentage adherence to work programme.
Tullow Oil plc Annual Report and Accounts 2023 – 95
Financial statements Supplementary informationStrategic report Corporate governance
Annul Report on Remunerton contnued
Detls of vrble p erned n the er contnued
Performance
metric Performance
% of TIP
award
(% of salary
maximum)
Actual
TIP award
Rahul Dhir
% of annual
bonus
award
(% of salary
maximum)
Actual
annual
bonus
award
Richard
Miller
Unlocking
value
Progress in 2023 against the six critical actions:
1. Deliver Kenya farm-down and FDP approval: Engagements to
secure a strategic partner for the development project in Kenya
areongoing.
2. Manage GRA exposure to agreed ways forward: Tullow continues
to engage with the Government of Ghana, including the GRA, with
the aim of resolving these disputes on a mutually acceptable basis.
3. Sign Ghana GSA and Operationalise: Ghana gas commercialisation
via interim gas sales agreement.
4. Deliver enhancement in TEN value: Progressing amended TEN PoD
collaboratively with Government of Ghana.
5. Deleveraging and positioning for future reinancing: Successful
delivery in 2023 of reinancing initiatives to address near-term debt
maturities including debt facility agreed with Glencore.
6. Optimise non-operated and exploration portfolio: Targeted
resource addition achieved through securing new licences in
Gabon and Côte d’Ivoire and portfolio prospect maturation.
10%
(40%)
2.65%
(10.6%)
20%
(30%)
5.3%
(7.95%)
Leadership
eectiveness
The Board made a judgement on the performance of the SLT over
the year. They considered several factors, including the strength and
cohesiveness of the leadership team, a clear strategy being set and
understood across the organisation, a fully engaged workforce, and
the business being positioned for sustainable success. During 2023
the leadership team has strengthened and, supported by the hard
work and dedication of the entire Tullow team, has worked together
cohesively to ensure continued operational delivery through an
unrelenting focus on business performance. The leadership team
also progressed activities to position the organisation for future
sustainable success by unlocking value in the identiied critical areas.
This resulted in a score of 3.75%.
5%
(20%)
3.75%
(15%)
10%
(15%)
7.5%
(11.25%)
Relative Total
Shareholder
Return (TSR)³
Performance against a bespoke group of listed exploration and
production companies measured from 1 January 2021 to 31
December 2023. 25% is payable at median, increasing to 100%
payable at upper quartile. Tullow placed below median.
50%
(200%)
0%
(0%)
N/A N/A
Total 100%
(400%)
26.5%
(106%)
100%
(150%)
53%
(79.5%)
3. The TSR comparator group for the 2023 TIP Award was as follows: Africa Oil, BW Energy, Capricorn Energy, Diversiied Energy Co., Energean, EnQuest,
Harbour Energy, Kosmos Energy, Maurel and Prom, Pharos Energy and Seplat Energy (NSA).
In line with the Policy, the TIP outcomes are divided evenly between cash and deferred shares up to the irst 200% of
base salary. Any amount above 200% of base salary is awarded entirely in deferred shares. Deferred shares are normally
subject to deferral until the ifth anniversary of grant, normally subject to continued service. The table below shows the
values for the Executive Directors participating in TIP.
Director Cash TIP Deferred TIP
Rahul Dhir £327,752 £327,752
In line with the Policy, the Annual Bonus outcomes are divided for two-thirds in cash and one-third in deferred shares.
Deferred shares are normally subject to deferral until the third anniversary of grant, normally subject to continued service.
The table below shows the values for the Executive Directors participating in the Annual Bonus plan.
Director
Cash Annual
Bonus
Deferred
Annual
Bonus
Richard Miller £193,980 £96,990
Remunerton report contnued
96 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
UK SIP shares awarded in 2023 (audited)
The UK SIP is a tax-favoured all-employee plan that enables UK employees to save out of pre-tax salary. Quarterly
contributions are used by the plan trustee to buy Tullow Oil plc shares (partnership shares). The Group funds an award of
an equal number of shares (matching shares). The current maximum contribution is £150 per month. Shares held in the
plan for ive years will be free of income tax and national insurance, as well as Capital Gains tax if retained in the plan until
sold. Details of shares purchased and awarded to Executive Directors under the UK SIP are as follows:
Director
Shares held
01.01.23
Partnership
shares
acquired
in year
Matching
shares
awarded
in year
Total shares
held 31.12.23
(including
dividend
shares)
Dividend
shares
acquired
in the year
1
SIP shares that
became
unrestricted
in year
1
Total
unrestricted
shares held at
31.12.23
Richard Miller 17,963 – – 17,963 – 1,468 7,342
1. Unrestricted shares (which are included in the total shares held at 31 December 2023) are those which no longer attract a tax liability if they are
withdrawn from the plan.
Executve Drector nd Non-Executve Drector terms of ppontment
Director
Year
appointed
Number of
complete
years on
the Board
Date of
current
engagement
commenced
Expiry of
current
term
Rahul Dhir 2020 3 01.07.20 n/a
Richard Miller 2023 1 01.01.23 n/a
Phuthuma Nhleko 2021 2 25.10.21 24.10.24
Martin Greenslade 2019 4 01.11.19 31.10.24
Sheila Khama 2019 4 26.04.19 26.04.25
Mitchell Ingram 2020 3 09.09.20 09.09.26
Genevieve Sangudi 2019 4 26.04.19 25.04.25
Rebecca Wiles 2023 0 28.06.23 27.06.26
Roald Goethe 2023 0 24.02.23 23.02.26
In the case of each Non-Executive Director, the appointment is renewable thereafter if agreed by the Director and the
Board. The appointment of any Non-Executive Director may be terminated by either party on three months’ notice.
There are no arrangements under which any Non-Executive Director is entitled to receive compensation upon the early
termination of his or her appointment.
CEO – totl p versus TSR
For 2023 the CEO total pay is based on the summation of the actual base pay, pension, beneits and TIP cash bonus and
share award equivalent value for Rahul Dhir for the inancial year ending 31 December 2023.
2014 2015 2016 2017 2018 2019 2023
2021 2022
2020 2014 2015 2016 2017 2018 2019 2023
2021 2022
2020
Return index
CEO total pay
Tullow
FTSE 250
120 5,000
Totl shreholder return CEO – Totl p versus RI
200
CEO pay £000Return index
96
72
48
24
0
4,000
3,000
2,000
1,000
0
150
50
100
0
Tullow Oil plc Annual Report and Accounts 2023 – 97
Financial statements Supplementary informationStrategic report Corporate governance
Annul Report on Remunerton contnued
Comprson of overll performnce nd p
The Committee has chosen to compare the TSR of the Company’s ordinary shares against the FTSE 250 index; whilst the
Company was placed outside the index for the majority of 2023, we believe the size and complexity of the organisation
still makes this a comparable index. The values indicated in the graph above show the share price growth plus re-invested
dividends for the period 2014 to 2023 from a £100 hypothetical holding of ordinary shares in Tullow Oil plc and in the index.
The total remuneration igures for the CEO during each of the last 10 inancial years are shown in the tables below. The
total remuneration igure includes the annual bonus based on that year’s performance (2014 to 2023), TIP Awards based
on the performance period ending in the relevant year (2014 to 2023). The annual bonus payout and TIP Award, as a
percentage of the maximum opportunity, are also shown for each of these years.
Year ending in
Aidan Heavey
1
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Total
remuneration £2,378,316 £2,835,709 £2,893,232 £1,717,276 – – – – – –
Annual bonus – – – – – – – – – –
TIP 23% 38% 39% 40% – – – – – –
Year ending in
Paul McDade
2
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Total
remuneration n/a n/a n/a £1,416,281 £2,759,684 £986,706 – – – –
TIP n/a n/a n/a 40% 60.3% 0% – – – –
Year ending in
Dorothy
Thompson
3
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Total
remuneration n/a n/a n/a n/a n/a 37,704 418,452 n/a n/a –
Year ending in
Rahul Dhir
4
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Total
remuneration n/a n/a n/a n/a n/a n/a £686,519 £1,860,806
£1,419,400 £1,388,910
TIP n/a n/a n/a n/a n/a n/a 20% 51.2% 30% 26.5%
1 & 2. For 2017, total remuneration igures are shown for Aidan Heavey based on the period he held the oice of Chief Executive Oicer and for the
transition period up to 31 October 2017, and for Paul McDade from 27 April 2017 when he commenced in his oice of Chief Executive.
3. For 2020, total remuneration is shown for Dorothy Thompson for the period she served as Executive Chair, i.e. 1 January 2020 to 8 September 2020.
For 2019, the amount shown is the Executive Chair fee pro rata for the period 9 December 2019 to 31 December 2019. Dorothy Thompson did not
participate in any incentive plans whilst serving as Executive Chair.
4. For 2020, total remuneration is shown for Rahul Dhir from the commencement of his appointment as Chief Executive Oicer on 1 July 2020.
Remunerton report contnued
98 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Addtonl sttutor nformton – percente chne n remunerton for Executve nd
Non-ExecutveDrectors
The table below shows the percentage change in each of the Directors’ total remuneration (for Executive Directors
excluding the value of any pension beneits receivable in the year) between the inancial year ended 31 December 2021,
31 December 2022 and 31 December 2023, compared to that of the average for all employees of the Group.
% change from 2022 to 2023 % change from 2021 to 2022 % change from 2020 to 2021
Salary/fees Beneits Bonus Salary/fees Beneits Bonus Salary/fees Beneits Bonus
Phuthuma Nhleko 0%
46% n/a 2,607% n/a n/a n/a n/a n/a
Rahul Dhir 3.4%
38% (8 .6% ) 2% 193% (4 0 % ) 99% 379% 232%
Richard Miller n/a n/a n/a n/a n/a n/a n/a n/a n/a
Mike Daly
(58 % ) 1,345% n/a 0% n/a n/a (19 % ) n/a n/a
Martin Greenslade
4
14% 1,044% n/a 3% n/a n/a 8% n/a n/a
Mitchell Ingram 0%
(31% ) n/a 0% n/a n/a 295% n/a n/a
Roald Goethe n/a n/a n/a n/a n/a n/a n/a n/a n/a
Rebecca Wiles n/a n/a n/a n/a n/a n/a n/a n/a n/a
Genevieve Sangudi 8% (28%) n/a 14% 1,051% n/a 0%
(10 0% ) n/a
Sheila Khama 0%
(10 % ) n/a 0% n/a n/a 0% (10 0% ) n/a
Average
employees 3.3% 5.6%
(14.9%) 5.4% 5.7% ( 11 .7 % ) 2.8% 7.0% 119.9%
1. Increase in beneits for Phuthuma Nhleko due to increased travel and subsistence during 2023.
2. Increase in beneits for Rahul Dhir due to increased travel and subsistence during 2023 and the buy-out of annual leave.
3. The decrease in fees for Mike Daly is due to him stepping down from the Board on 24 May 2023. The increase in beneits relect increased travel and
subsistence during 2023.
4. The increase in fees for Martin Greenslade relect his appointment as Senior Independent Director in 2022. Beneits have increased due to increased
travel and subsistence during 2023.
5. The increase in fees for Genevieve Sangudi relects her appointment as Chair of the Remuneration Committee after the 2022 AGM. Beneits have
increased due to increased travel and subsistence post the COVID-19 pandemic.
6. Increase in average employee beneits is driven by changes to annual medical insurance premiums.
CEO p rto 2023
Year Method
25th
percentile
pay ratio
Median pay
ratio
75th
percentile
pay ratio
2023 A 11:1 8:1 5:1
2022 A 12:1 8:1 6:1
2021 A 16:1 10:1 8:1
2020 A 7:1 5:1 3:1
2019 A 8:1 5:1 4:1
We have calculated the CEO pay ratio using the methodology described as ‘Option A’ in the Regulations, as we recognise
that this is the most statistically accurate form of calculation.
For each UK employee¹ the Single Total Figure of Remuneration (STFR) has been calculated as a summation of base pay,
beneits, employer pension contributions receivable during the year ended 31 December 2023 and cash bonus payable
and value of share awards to be granted for the 2023 performance year. The STFR at 25th percentile is £121,044, £178,373
at median and £249,630 at 75th percentile. The wages component at 25th percentile is £87,331, £167,800 at median and
£156,663 at 75th percentile.
1. All STFRs have been based on a full-time equivalent and annualised to provide a dataset for the full year 31 December 2023.
Tullow Oil plc Annual Report and Accounts 2023 – 99
Financial statements Supplementary informationStrategic report Corporate governance
Annul Report on Remunerton contnued
CEO p rto 2023 contnued
In setting both our CEO remuneration and the remuneration structures for the wider UK workforce, we have adopted a
remuneration structure which includes the same core components for employees at all levels (base pay, beneits, pension,
cash bonus and share awards). Whilst all employees receive a base salary commensurate to the Company’s position in the
market, the dierences exist in the quantum of variable pay achievable by our Executive Directors and SLT; at these levels
there is a greater emphasis placed on variable pay given their opportunity to impact directly on Company performance.
Based on this distinction, and taking into account Company performance in a particular inancial year and the impact on
variable pay, the Committee believes that the median pay ratio is consistent with and relective of the wider pay, reward and
progression policies impacting our UK employees. The Committee will continue to monitor longer-term trends.
Reltve mportnce of spend on p
The following table shows the Group’s actual spend on pay for all employees relative to tax and retained proits.
Sta costs have been compared to tax expense and retained proits in order to provide a measure of their scale
compared to other key elements of the Group’s inancial metrics.
2022 2023 % change
Sta costs (£m) 63.9 68.3 (7%)
Tax (credit)/expense (£m)
1
318.9 165.3 48%
Retained proits (£m)
1
(1,818.8) (1,887.6) (4%)
1. Voluntary disclosure.
Detls of shre wrds rnted to Executve Drectors
Director
Award grant
date
Share price
on grant
date
As at
01.01.23
Granted
during the
year
Exercised
during the
year
As at
31.12.23
Earliest date
shares can
be acquired
Latest date
shares can
be acquired
Richard Miller
1
14.02.19 226.30p 33,906 – – 33,906 14.02.22 14.02.29
13.03.20 10.91p 152,518 – – 152,518 13.03.23 13.03.30
15.03.21 60.48p 59,117 – – 59,117 15.03.24 15.03.31
14.03.22 49.14p 240,848 – – 240,848 14.03.25 14.03.32
30.09.22 42.22p 71,056 – – 71,056 30.09.25 30.09.32
08.12.22 37.22p 39,979 – – 39,979 08.12.25 08.12.32
13.03.23 32.00p – 280,576 – 280,576 13.03.26 13.03.33
28.06.23 27.74p – 2,726,460 – 2,726,460 13.03.28 13.03.33
Dividend equivalents 10.05.19 213.10p 594 – – 594 14.02.22 14.02.29
17.10.19 207.20p 313 – – 313 14.02.22 14.02.29
Rahul Dhir
2
05.08.20 27.68p 9,000,000 – – 9,000,000 01.07.25 30.06.30
15.03.21 60.48p 319,316 – – 319,316 15.03.26 15.03.31
14.03.22 49.14p 1,104,269 – – 1,104,269 14.03.27 14.03.32
13.03.23 32.00p – 1,067,930 – 1,067,930 13.03.28 13.03.33
28.06.23 27.74p – 4,605,929 – 4,605,929 13.03.28 13.03.33
1. The awards granted in 2019, 2020, 2021, 2022 and in March 2023 are Non-Executive Director ESAP and TIP awards. The award granted in June 2023 is
an Executive Director LTIP grant for the 2023–2025 performance period with performance conditions attached.
2. Share awards granted on 05 August 2020 represent ‘Buy-out Awards’ to replace share arrangements that were forfeited upon leaving his former employer
(full details of which are available in the 2020 Directors’ Remuneration report). The awards granted in 2021, 2022 and in March 2023 are TIP awards. The award
granted in June 2023 is an Executive Director LTIP grant for the 2023–2025 performance period with performance conditions attached.
Remunerton report contnued
100 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Shre prce rne
During 2023, the highest mid-market price of the Company’s shares was 39.04p and the lowest was 22.60p. The year-
end price was 38.92p.
Detls of Drectors’ nterests
The interests of the Directors (all of which were beneicial), who held oice during FY 2023, are set out in the table below:
Ordinary shares held
% of salary
under 2023
Remuneration
Policy
shareholding
guidelines
1
TIP
Awards
LTIP
Awards Buyout Awards SIP SIP total
01.01.23 31.12.23 Unvested Vested Unvested Unvested Vested Restricted Unrestricted 31.12.23
Executive Directors
Rahul Dhir
2
1,346,000 1,706,900 325% 2,491,515 – 4,605,929 9,000,000 – – – –
Richard
Miller – 35,500 55% 691,576 187,331 2,726,460 – – 10,621 7,3 42 17,963
Non-Executive Directors
Mike Daly
4,795 4,795 – – – – – – – –
Genevieve
Sangudi – 100,000 – – – – – – – –
Roald
Goethe 22,000,000 23,700,000 – – – – – – – –
Rebecca
Wiles – – – – – – – – – –
Sheila
Khama 7,070 39,970 – – – – – – – –
Martin
Greenslade 60,000 60,000 – – – – – – – –
Mitchell
Ingram 50,000 50,000 – – – – – – – –
Phuthuma
Nhleko – 142,500 – – – – – – – –
1. Calculated using share price of 38.92p at year end, excluding awards remaining subject to performance conditions. Under the Company’s
shareholding guidelines, each Executive Director is required to build up their shareholdings in the Company’s shares to at least 400% of their current
salary. Further details of the minimum shareholding requirement are set out in the Remuneration Policy Report.
2. 1,346,000 ordinary shares held by Rahul Dhir are in respect of his buyout-award granted on commencement of employment. The additional ordinary
shares held relect subsequent open market purchases.
3. Roald Goethe was appointed as a Non-Executive Director on 24 February 2023 and disclosed that he or persons closely associated with him hold
22,000,000 ordinary shares of 10p each in the Company and $2,500,000 Senior Notes due 2025.
There have been no changes in the interests of any Director between 1 January 2024 and the date of this report.
Implementton of Polc for Executve Drectors for 2024
The Remuneration Policy will be implemented during 2024 as follows:
• Base salary for Rahul Dhir will be increased by 2.8%, below the typical increase awarded to UK- based
employees for 2024.
• Base salary for Richard Miller will be increased by 9.3% to move towards market norms as his experience and
contribution increased.
• Pension provision will be 15% of salary for Rahul Dhir and 10% of salary for Richard Miller (workforce aligned).
• TIP Award for Rahul Dhir with a maximum opportunity of 400% of salary based on: Safety (7.5%), Financial performance
(5.0%), Production (10.0%), Business plan implementation (7.5%), Sustainability (5.0%), Unlocking value (10.0%),
Leadership eectiveness (5.0%) and Relative TSR (50%) for the 2022-2024 performance period.
• LTIP Award for Rahul Dhir with a maximum opportunity of 250% of salary based 50% on our relative and 50% on our
absolute total shareholder returns during the 2024–2026 performance period.
• LTIP Award for Richard Miller with a maximum opportunity of 250% of salary based 50% on our relative and 50% on our
absolute total shareholder returns during the 2024–2026 performance period.
• The TSR comparator group for both the TIP and 2024–2026 LTIP Awards will be as follows: Africa Oil, BW Energy,
Capricorn Energy, Diversiied Energy Co., Energean, EnQuest, Harbour Energy, Kosmos Energy, Maurel and Prom,
Pharos Energy and Seplat Energy (NSA).
Tullow Oil plc Annual Report and Accounts 2023 – 101
Financial statements Supplementary informationStrategic report Corporate governance
Implementton of Polc for Executve Drectors for 2024 contnued
• Our absolute total shareholder return target for the 2024–2026 LTIP Award will be on average 20% per annum at
Threshold and on average 30% per annum at Maximum. Our relative total shareholder return target for the 2024–2026
LTIP Award will be comparator group Median at Threshold and comparator group Upper Quartile at Maximum.
• 2024 Annual Bonus opportunity for Richard Miller with a maximum opportunity of 150% of salary based on: Safety
(15%), Financial performance, (10%), Production (20%), Business plan implementation (15%), Sustainability (10%),
Unlocking value (20%) and Leadership eectiveness (10%).
• No changes will be made to the Chair nor the Non-Executive Director fees from 2023 levels.
Governnce
Remunerton Commttee members
Genevieve Sangudi (Committee Chair), Mitchell Ingram and Martin Greenslade.
Remunerton Commttee membershp nd ttendnce
All members of the Committee are independent Non-Executive Directors. None of the Committee members has day-to-
day involvement with the business and nor do they have any personal inancial interest, except as shareholders, in the
matters to be recommended. The number of scheduled and unscheduled meetings held and the attendance by each
member is shown in the table on page 89.
The Company Secretary is available to assist the members of the Committee as required, ensuring that timely and
accurate information is distributed accordingly.
Advce receved durn 2023
The Committee received external advice from Deloitte LLP (Deloitte) during 2023. Deloitte are members of the Remuneration
Consultants Group and are a signatory to its Code of Conduct. During the year Deloitte provided no other services to the
Company. Fees (ex VAT) paid to Deloitte for advice provided during 2023 amounted to £48,550. Deloitte has no other
connections to the Company or the Directors that aect their independence. The Committee evaluates the services provided
by external advisers and is satisied that the advice received from Deloitte was objective and independent.
Actvtes of the Commttee durn 2023
A summary of the main Committee activities during 2023 are set out below:
• Setting an appropriately stretching set of key performance metrics for the 2023 KPI scorecard.
• Monitoring progress against the 2023 KPI scorecard.
• Reviewing feedback received from shareholders at the 2023 AGM.
• Undertaking a review of the Directors’ Remuneration Policy, including consideration of alternative incentive structures,
performance measures, and other Policy elements.
• Review of changes in remuneration-related guidance, shareholder policies and governance matters.
• Reviewing the remuneration arrangements, including benchmarking of Total Remuneration for the SLT and reviewing
the implementation of the revised pay philosophy and principles for the wider workforce.
• Review of the Committee’s performance and terms of reference.
• Review of draft KPIs for 2024 to align with strategy and culture of Tullow.
Remunerton report contnued
102 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Prncples of Executve Drector remunerton
The Committee seeks to ensure that the Directors Remuneration Policy and its practices are consistent with the six
factors set out in Provision 40 of the new UK Corporate Governance Code:
Clarity
Our Policy is well understood by the SLT and has been clearly articulated to our shareholders and representative bodies
(both on an ongoing basis and during the recent consultation exercise).
Simplicity
The Committee is mindful of the need to avoid overly complex remuneration structures which can be misunderstood and
deliver unintended outcomes. Therefore, a key objective of the Committee is to ensure that our Executive remuneration
policies and practices are straightforward to communicate and operate.
Risk
Our Policy has been designed to ensure that inappropriate risk taking is discouraged and will not be rewarded via: (i)
the balanced use of both annual and three-year performance periods which employ a blend of inancial, non-inancial
and shareholder return targets; (ii) the signiicant role played by deferred equity in our incentive plans (together with in-
employment and post-cessation shareholding guidelines and ive-year vesting period); (iii) malus/clawback provisions;
and (iv) the ability to exercise negative discretion to remuneration outcomes.
Predictability
The TIP and Annual Bonus and LTIP are subject to an individual annual cap and market-standard dilution limits.
Proportionality
There is a clear link between individual awards, delivery of strategy and our long-term performance. In addition, the
signiicant role played by incentive/‘at-risk’ pay, together with the structure of the Executive Directors’ service contracts,
ensures that poor performance is not rewarded.
Alignment to culture
Our Executive pay policies are fully aligned to Tullow’s culture through the use of metrics in the TIP, LTIP and Annual
Bonus Plan that measure how we perform against our inancial and non-inancial KPIs.
Shreholder votn t the AGM
At last year’s AGM on 24 May 2023 the remuneration-related resolutions received the following votes from shareholders:
2022 Annual Statement and Annual Report on Remuneration
Total number of votes % of votes cast
For 900,774,660 99.68%
Against 2,895,406 0.32%
Total number of votes % of ISC votes
Total votes cast (for and against) 903,670,066 62.43%
Votes withheld 642,220
2023 Remuneration Policy
Total number of votes % of votes cast
For 890,988,764 98.60%
Against 12,691,569 1.40%
Total number of votes % of ISC votes
Total votes cast (for and against) 903,680,333 62.43%
Votes withheld 631,953
Tullow Oil plc Annual Report and Accounts 2023 – 103
Financial statements Supplementary informationStrategic report Corporate governance
Drectors’ Remunerton Polc Report
This section of the report sets out the Remuneration Policy
(the Policy) for Executive and Non-Executive Directors which
was approved by shareholders at the 2023 AGM on 24 May
2023. The Policy has come into eect from the date of the
AGM and will apply for a period of up to three years.
Polc overvew
The principles of the Remuneration Committee are to
ensure that remuneration is linked to Tullow’s strategy
and promote the attraction, motivation and retention of
the highest-quality executives who are key to delivering
sustainable long-term value growth and substantial returns
to shareholders.
Polc revew process
The Committee undertook a review of Directors’
Remuneration Policy to ensure that it is appropriate to
support our strategy. The central focus of the Committee
was developing an incentive structure that would reward
growth and value creation and align management
withshareholders.
The Committee was mindful in its deliberations on the
new Remuneration Policy of any potential conlicts of
interest and sought to minimise them through an open
and transparent internal consultation process, by seeking
independent advice from its external advisers and by
undertaking a broad shareholder consultation exercise.
2023 Polc chnes
The main change under the Policy is the transition from the
Tullow Incentive Plan to the grant of separate annual bonus
and LTIP awards. This transition is structured to ensure that
there are no overlaps or gaps in performance assessment
for Executive Directors appointed prior to 2023.
For the current CEO the TIP will continue for 2024
(capturing 2022–2024 performance period) in accordance
with the structure approved by shareholders at the 2020
AGM. No TIP awards will be made after 2024. Other
Executive Directors will not participate in the TIP for 2024.
Executive Directors appointed from 2023 onwards,
including the current CFO, are eligible for an annual bonus
award from 2023 onwards. Our current CEO will be eligible
for an annual bonus award from 2025 onwards. The
maximum opportunity will be 150% of salary and one-third
of any bonus earned will normally be deferred into Tullow
shares for three years.
All Executive Directors are eligible for an LTIP award from
2023 onwards. The irst grant captured performance over
the 2023–2025 period. The maximum award will be 250%
of salary, and awards will be subject to a two-year holding
period following vesting.
The policy was also updated for developments in corporate
governance and feedback received from our shareholders.
Summr Drectors’ Remunerton Polc
Bse slr
Purpose and link to strategy Operation Maximum opportunity
To provide an appropriate level of
ixed cash income.
To attract and retain individuals
with the personal attributes, skills
and experience required to deliver
our strategy
Generally reviewed annually. Base salaries will be set by
the Committee taking into account:
• The scale, scope and responsibility of therole.
• The skills and experience of the individual.
• The base salary of other employees, including
increases awarded to the wider population.
• The base salary of individuals undertaking similar
roles in companies of comparable size and
complexity. This may include international oil and gas
sector companies or a broader group of FTSE-listed
organisations.
Any increases to current Executive
Director salaries, presented in the
‘Application of Policy in 2024’ column
below this Policy table, will not normally
exceed the average increase awarded to
other UK-based employees.
Increases may be above this level in
certain circumstances, for instance
if there is an increase in the scale,
scope or responsibility of the role
or to allow the base salary of newly
appointed Executives to move towards
market norms as their experience and
contribution increase.
Performance and provisions for the recovery
A broad assessment of individual and business performance is used as part of the salary review.
No recovery provisions apply.
Remunerton report contnued
104 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Penson nd benefts
Purpose and link to strategy Operation Maximum opportunity
To attract and retain individuals
with the personal attributes, skills
and experience required to deliver
our strategy.
Deined contribution pension scheme or salary supplement
in lieu of pension. The Company does not operate or have
any legacy deined beneit pension schemes.
Medical insurance, income protection and life assurance.
Additional beneits may be provided as appropriate.
Executive Directors may participate in the Tullow UK
Share Incentive Plan (SIP) and the Tullow Sharesave
(SAYE) plan.
Pension: Workforce aligned for Executive
Directors (as a percentage of salary).
Employees currently receive an employer
contribution of 10% of salary, increasing
to 15% of salary for employees over 50.
Beneits: The range of beneits that may
be provided is set by the Committee
after taking into account local market
practice in the country where the
Executive Director is based. No monetary
maximum is given for beneits provided
to the Executive Directors as the cost will
depend on individual circumstances.
Tullow UK SIP and SAYE: Up to HM Revenue
& Customs (HMRC) limits. Maximum
participation levels and matching levels for
all sta, including Executive Directors, are
set by reference to the rules of the plan and
relevant legislation.
Performance and provisions for the recovery
Not applicable.
Lec Tullow Incentve Pln (TIP) – pplcble onl for current CEO nd for 2023 nd 2024 onl
Purpose and link to strategy Operation Maximum opportunity
To provide a simple, competitive,
performance-linked incentive
planthat:
• Aligns the interests of
management and shareholders.
• Promotes the long-term
success of the Company.
• Provides a real incentive
to achieve our strategic
objectives and deliver superior
shareholder returns.
• Will attract, retain and motivate
individualswith the required
personal attributes, skills and
experience.
The current CEO is eligible to receive a TIP award,
subject to performance, for 2023 (for the 2021–23
period) and 2024 (for the 2022–24 period). No further
TIP awards will be granted after 2024, and any Executive
Directors appointed from 2023 onwards, including the
current CFO, are not eligible to participate in the plan.
An annual TIP award consisting of up to 400% of base
salary, which is divided evenly between cash and
deferred shares up to the irst 200% of base salary.
Any amount above 200% of base salary is awarded
entirely in deferred shares.
Deferred shares are normally subject to deferral until the
ifth anniversary of grant, normally subject to continued
service.
TIP awards are non-pensionable and will be made in line
with the Committee’s assessment of performance targets.
At the discretion of the Committee, any portion of the
cash component of a TIP award can be satisied by
granting deferred shares with a vesting date set by the
Committee being not earlier than the irst anniversary
ofgrant.
400% of salary.
Dividend equivalents will accrue on TIP
deferred shares over the vesting period.
Performance and provisions for the recovery
A balanced scorecard of stretching inancial and operational objectives, linked to the achievement of Tullow’s long-term strategy, will
be used to assess TIP outcomes which may include targets relating to: relative or absolute total shareholder return (TSR); earnings per
share (EPS); environmental, health and safety (EHS); inancial; production; operations; project; exploration; or speciic strategic and
personal objectives.
Performance will typically be measured over one year for all measures apart from TSR and EPS, which, if adopted, will normally be
measured over the three inancial years prior to grant.
No more than 25% of the maximum TIP opportunity will be payable for threshold performance.
Recovery provisions apply (see below).
Tullow Oil plc Annual Report and Accounts 2023 – 105
Financial statements Supplementary informationStrategic report Corporate governance
Drectors’ Remunerton Polc Report contnued
Summr Drectors’ Remunerton Polc contnued
Annul bonus
Purpose and link to strategy Operation Maximum opportunity
The executive bonus scheme
rewards Executive Directors for
achieving inancial and strategic
targets in the relevant year by
reference to operational targets
and individual objectives.
The Current CEO will be eligible to participate in the
Annual Bonus plan from 2025 onwards.
The current CFO and any newly appointed Executive
Directors are eligible to participate from 2023 onwards.
Targets are reviewed annually and any pay-out is
determined by the Committee after the year end based
on targets set for the inancial period.
The Committee has discretion to amend the pay-out
should any formulaic output not relect the Committee’s
assessment of overall business performance or if the
Committee considers the formulaic outturn is not
appropriate in the context of other factors considered by
the Committee to be relevant.
One-third of any bonus earned will normally be deferred
into shares for a period of three years. Deferred bonus
awards may take the form of nil-cost options, conditional
awards of shares or such other form as has a similar
economic eect.
Additional shares may be delivered in respect of shares
subject to deferred bonus awards to relect the value of
dividends paid during the period beginning with the date
of grant and ending with the date of vesting (this payment
may assume that dividends had been reinvested in Tullow
shares on a cumulative basis).
Up to 150% of salary.
Performance and provisions for the recovery
A balanced scorecard of stretching inancial and operational objectives, linked to the achievement of Tullow’s long-term strategy, will
be used to assess Annual Bonus outcomes. Performance will typically be measured over one year.
No more than 25% of the maximum opportunity will be payable for threshold performance.
Recovery provisions apply (see below).
Lon Term Incentve Pln (LTIP)
Purpose and link to strategy Operation Maximum opportunity
The LTIP provides a clear link
between the remuneration of
the Executive Directors and the
creation of value for shareholders
by rewarding the Executive
Directors for the achievement of
longer-term objectives aligned to
shareholders’ interests.
Executive Directors will be eligible to be granted LTIP
award from 2023 onwards.
Awards are normally made on an annual basis and
normally vest three years from grant subject to continued
employment and the satisfaction of challenging three-
year performance targets.
A two-year holding period following LTIP vesting applies
to grants to Executive Directors. In total, this results in a
ive-year combined vesting and holding period.
The Committee has discretion to vary the formulaic
vesting outturn if it considers that the outturn does not
relect the Committee’s assessment of performance or is
not appropriate in the context of other factors considered
by the Committee to be relevant.
Additional shares may be delivered in respect of
shares which vest under the LTIP to relect the value of
dividends, which would have been paid on those shares
during the period beginning with the date of grant and
ending with the vesting date (this payment may assume
that dividends had been reinvested in Tullow shares on a
cumulative basis).
Up to 250% of salary.
Performance and provisions for the recovery
Performance is usually measured over a three-year period.
Performance measures for LTIP awards will include inancial measures which may include, but are not limited to, total shareholder
return (TSR), and may include strategic measures (which may include ESG measures).
Subject to the Committee’s discretion to override formulaic outturns, awards will normally vest as to 25% for threshold performance,
increasing to 100% for maximum performance.
Recovery provisions apply (see below).
Remunerton report contnued
106 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Shreholdn udelnes
Purpose and link to strategy Operation Maximum opportunity
To align the interests of
management and shareholders
and promote a long-term
approach to performance and
riskmanagement.
Executive Directors are required to retain at least 100%
of post-tax share awards until a minimum shareholding
equivalent to 400% of base salary is achieved in
ownedshares.
Unvested TIP, LTIP and Deferred Bonus shares net
of applicable taxes count towards the minimum
shareholding requirement.
Shares included in this calculation are those held
beneicially by the Executive Director and his or her
spouse/civil partner.
50% of the shareholding guideline (i.e. 200% of salary) will
need to be retained by Executive Directors for two years
post-cessation.
400% of salary.
Performance and provisions for the recovery
Not applicable.
Non-Executve Drectors
Purpose and link to strategy Operation Maximum opportunity
To provide an appropriate fee level.
To attract individuals with the
necessary experience and ability.
To make a signiicant contribution
to the Group’s activities while also
relecting the time commitment
and responsibility of the role.
The Chair is paid an annual fee and the Non-Executive
Directors are paid a base fee and additional responsibility
fees, for example for the role of Senior Independent
Director or for chairing a Board Committee.
Fees are normally reviewed annually.
Each Non-Executive Director is also entitled to a
reimbursement of necessary travel and other expenses
including associated tax costs.
Non-Executive Directors do not participate in any share
scheme or annual bonus scheme and are not eligible to
join the Group’s pension schemes.
Non-Executive Director remuneration is
determined within the limits set by the
Articles of Association.
There is no maximum prescribed fee
increase although fee increases for
Non-Executive Directors will not normally
exceed the average increase awarded
to Executive Directors. Increases may be
above this level if there is an increase in the
scale, scope or responsibility of the role.
Performance and provisions for the recovery
Not applicable.
Operton of shre plns
The Committee will operate the TIP, LTIP and Deferred Bonus in accordance with the Plan rules, Listing Rules and HMRC
rules where relevant. The Committee, consistent with market practice, retains discretion over a number of areas relating
to the operation and administration of the plans in relation to the SLT, including Executive Directors. These include (but
are not limited to) the following (albeit with the level of award restricted as set out in the Directors’ Remuneration Policy):
• Who participates.
• The timing of grant of awards and/or payment.
• The size of awards and/or payment.
• Discretion relating to the measurement of performance in the event of a change of control or reconstruction.
• Determination of a good leaver (in addition to any speciied categories) for incentive plan purposes and a good
leaver’streatment.
• Adjustments to awards required in certain circumstances (e.g. rights issues, corporate restructuring and special dividends).
• The ability to adjust existing performance conditions for exceptional events so that they can still fulil their
original purpose.
The choice of the performance metrics applicable to the TIP and LTIP awards, which are set by the Committee at the start
of the relevant inancial year, relects the Committee’s belief that any incentive compensation should be appropriately
challenging and tied to the delivery of stretching inancial, operational and TSR-related objectives, explicitly linked to the
achievement of Tullow’s long-term strategy.
In addition to the TIP, LTIP and Deferred Bonus, Executive Directors are also eligible to participate in the UK SIP or
any other all-employee share plans on the same terms as other employees. All-employee share plans do not operate
performance conditions.
Tullow Oil plc Annual Report and Accounts 2023 – 107
Financial statements Supplementary informationStrategic report Corporate governance
Drectors’ Remunerton Polc Report contnued
Clculton of TIP wrds
In addition to base salary and other beneits described in the Remuneration Policy, for 2023 and 2024 Executive Directors
shall be eligible to receive an award issued under the rules of the TIP (a TIP Award). The TIP combines short- and long-
term incentive-based pay and includes a cash bonus component and a deferred share award component.
At the beginning of the 2023 and 2024 inancial years, the Committee will determine a multiple of base salary, subject
to the limits established under this Policy, to apply to a TIP Award. At the same time the Committee will also determine
a balanced corporate scorecard of performance metrics applicable to any TIP Award. The choice of the performance
metrics and the weightings given to them, which are set by the Committee at the start of the relevant inancial year
normally, relect the Committee’s belief that any incentive compensation should be appropriately challenging and tied to
the delivery of stretching inancial, operational and total shareholder return (TSR) related objectives, explicitly linked to the
achievement of Tullow’s long-term strategy.
Following completion of the inancial year, the Committee will review the Company’s performance against the corporate
scorecard resulting in a percentage score. The multiple set by the Committee is then applied to the percentage score to
determine the total TIP Award amount. A TIP Award is divided equally between cash bonus and deferred shares up to the
irst 200% of base salary. Any portion of a TIP Award above 200% of base salary shall be satisied in deferred shares only.
Deferred shares forming part of a TIP Award are normally deferred for ive years and are subject to malus and clawback. In
its discretion, the Committee may elect to satisfy any portion of the cash bonus element of a TIP Award in deferred shares
which will be deferred for a period determined by the Committee, being not less than one year from the date of grant.
Deferred shares issued in lieu of any portion of the cash bonus component of a TIP Award shall be subject to malus,
clawback and the minimum shareholding requirements set out on the previous page.
Performnce mesures for LTIP nd nnul bonus wrds
The choice of the performance metrics and range of targets applicable to the annual bonus plan for Executive Directors
relect the Committee’s belief that any incentive compensation should be appropriately challenging and tied to both
the delivery of robust performance relating to the Group’s inancial key performance indicators and, where appropriate,
speciic individual/strategic objectives (including ESG objectives). Performance metrics applicable to the LTIP are
selected to support Company strategy and provide shareholder alignment. Targets applying to the annual bonus and
LTIP are reviewed annually, based on a range of internal and external reference points. Performance targets are set to be
stretching but achievable, with regard to the particular strategic priorities and business environment in a given year.
Lec remunerton
For the avoidance of doubt, the Committee reserves the right to make any remuneration payments and/or payments for
loss of oice (including exercising any discretions available to it in connection with such payments) notwithstanding that
they are not in line with the 2023 Remuneration Policy set out in the document where the terms of the payment were
agreed (i) before the 2023 Remuneration Policy came into eect, provided that the terms of the payment were consistent
with any applicable shareholder-approved Directors’ Remuneration Policy in force at the time they were agreed or were
otherwise approved by shareholders; or (ii) at a time when the relevant individual was not a Director of the Company (or
other persons to whom the Policy set out above applies) and, in the opinion of the Committee, the payment was not in
consideration for the individual becoming a Director of the Company or such other person.
For these purposes ‘payments’ includes the Committee satisfying awards of variable remuneration and, in relation to an
award over shares, the terms of the payment are ‘agreed’ no later than the time the award is granted. This Policy applies
equally to any individual who is required to be treated as a Director under the applicable regulations.
Dscreton
The Committee reserves the right to exercise its discretion in the event of exceptional and unforeseen positive or
negative developments during the performance period. In addition, the Committee reserves the right to reduce the
TIP, annual bonus or LTIP payment where the Committee considers that the level of payment is not commensurate with
overall corporate performance and returns delivered to shareholders over the performance period.
Remunerton report contnued
108 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Recover provsons
TIP Awards are subject to malus and clawback. The Committee retains discretion to apply malus and clawback to both
the cash and deferred share elements of the TIP during the ive-year vesting period, triggers are outlined in the TIP rules,
including but not limited to a material adverse restatement of the inancial accounts or reserves, a catastrophic failure of
operational, EHS and risk management or corporate failure or insolvency.
Annual bonus and LTIP awards are subject to malus and clawback. The Committee retains discretion to apply malus
and clawback to the cash bonus, deferred bonus and LTIP awards up to three years after the payment or vesting of
awards. Malus and clawback triggers are outlined in the plan rules and include but are not limited to a material adverse
restatement of the inancial accounts or reserves, a catastrophic failure of operational, EHS and risk management or
corporate failure or insolvency.
Illustrton of remunerton scenros of Executve Drectors
2024
The charts below show how the composition of the Executive Directors’ remuneration packages varies at dierent levels
of performance under the Remuneration Policy, as a percentage of total remuneration opportunity and as a total value for
the current CEO and CFO for 2024.
1. Base salary is eective as at 1 April 2024.
2. Fixed pay includes pension in line with wider workforce.
3. For the CEO, the target TIP Award is taken to be 50% of the maximum annual opportunity for 2024 (200% of salary).The maximum value of the TIP is
taken to be 400% of salary (i.e. the maximum annual opportunity) for 2024.
4. For the CFO, the target Annual Bonus and LTIP Award is taken to be 50% of the maximum opportunity for 2024 (Annual Bonus: 75% of salary; LTIP
Award: 125% of salary). The maximum value of the Annual Bonus is taken to be 150% and LTIP Award is taken to be 250% of salary (i.e. the maximum
annual opportunity).
5. No share price appreciation has been assumed for the ixed, target and maximum scenarios.
6. The Committee is aware of the regulations requiring an indication of the impact of 50% share price appreciation on the maximum scenario in the chart
above. For the TIP, given that TSR performance is measured over three years prior to grant of award, share price appreciation over the performance
period would not impact on the value of the maximum award.
Rahul DhirRichard Miller
Fixed
Fixed
Target
Target
Maximum
Maximum
Maximum +50% share price growth
Maximum +50% share price growth
£0.0m £0.5m £1.0m £1.5m £2.0m £2.5m £3.0m £3.5m £4.0m £4.5m
Fixed pay TIP (Cash) TIP (Deferred shares) Annual bonus LTIP
Tullow Oil plc Annual Report and Accounts 2023 – 109
Financial statements Supplementary informationStrategic report Corporate governance
Rahul DhirRichard Miller
Fixed
Fixed
Target
Target
Maximum
Maximum
Maximum +50% share price growth
Maximum +50% share price growth
£0.0m £0.5m £1.0m £1.5m £2.0m £2.5m £3.0m £3.5m £4.0m £4.5m
Fixed pay Annual bonus LTIP
Drectors’ Remunerton Polc Report contnued
Illustrton of remunerton scenros of Executve Drectors contnued
2025 onwards
The charts below show how the composition of the Executive Directors’ remuneration packages varies at dierent levels
of performance under the Remuneration Policy, as a percentage of total remuneration opportunity and as a total value for
the current CEO and CFO for 2025:
1. Base salary is eective as at 1 April 2024.
2. Fixed pay includes pension in line with wider workforce.
3. The target Annual Bonus and LTIP Award is taken to be 50% of the maximum opportunity for 2024 (Annual Bonus: 75% of salary; LTIP Award: 125% of
salary). The maximum value of the Annual Bonus is taken to be 150% and LTIP Award is taken to be 250% of salary (i.e. the maximum annual opportunity).
4. No share price appreciation has been assumed for the ixed, target and maximum scenarios. 50% share price appreciation is applied to the maximum
scenario in the chart above.
Servce reements
Executive Director service agreements set out restrictions on the ability of the Director to participate in businesses
competing with those of the Group or to entice or solicit away from the Group any senior employees in the six months after
ceasing employment. The above relects the Committee’s policy that service contracts should be structured to relect the
interests of the Group and the individuals concerned, while also taking due account of market and best practice.
The term of each service contract is not ixed. Each agreement is terminable by the Director on six months’ notice and by
the employing company on 12 months’ notice.
The Executive Directors’ service agreements and the appointment letters of the Non-Executive Directors are available for
inspection by shareholders at the Company’s registered oice.
Externl ppontments
The Board operates a formal policy in relation to the external directorships that an Executive Director may hold. Whilst the
policy does not prescribe a maximum number of external appointments, it sets out guidance that an Executive Director
should not hold more than one non-executive director position in a FTSE 350 company.
Remunerton report contnued
110 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Polc for new ppontments
The remuneration of a new Executive Director will normally include salary, beneits, pension and participation in the
annual bonus and LTIP arrangements in accordance with the policy for Executive Directors’ remuneration. A newly
appointed Executive Director would not participate in the TIP. In addition, the Committee has discretion to include any
other remuneration component or award which it feels is appropriate taking into account the speciic circumstances of
the recruitment, subject to the principles and limits set out below. The key terms and rationale for any such component
would be disclosed as appropriate in the Directors’ Remuneration report for the relevant year.
Policy
Salary Salary will be set taking into account the individual’s experience and skills, prevailing market rates in
companies of comparable size and complexity and internal relativities.
Where appropriate, the Committee may set the initial salary below the market level (e.g. if the
individual has limited PLC board experience or is new to the role), with the intention to make phased
pay increases over a number of years, which may be above those of the wider workforce, to achieve
the desired market positioning. These increases will be subject to continued development in the role.
Buy-out
awards
Where an individual forfeits outstanding variable pay opportunities or contractual rights at a previous
employer as a result of appointment, the Committee may oer compensatory payments or awards, in
such form as the Committee considers appropriate, taking into account all relevant factors including
the form of awards, expected value and vesting time frame of forfeited opportunities.
When determining any such buy-out, the guiding principle would be that awards would generally be
on a like-for-like basis unless this is considered by the Committee not to be practical or appropriate.
Award may be facilitated under the existing incentive plans where possible, but also using Rule 9.4.2.
of the Listing Rules, if necessary.
Maximum
level of
variable
remuneration
The Committee will not oer non-performance-related variable remuneration and the maximum level
of variable remuneration which may be granted (excluding buyout awards) is 400% of base salary,
which is in line with the current maximum limit under the annual bonus and LTIP.
Other
elements of
remuneration
Other elements may be included in the following circumstances:
An interim appointment being made to ill an Executive Director role on a short-term basis.
If exceptional circumstances require that the Chair or a Non-Executive Director takes on an executive
function on a short-term basis.
If an Executive Director is recruited at a time in the year when it would be inappropriate to provide an
annual bonus or LTIP award for that year. Subject to the limit on variable remuneration set out above, the
quantum in respect of the period employed during the year may be transferred to the subsequent year.
If the Executive Director is required to relocate, reasonable relocation, travel and subsistence
payments may be provided (either via one-o or ongoing payments or beneits).
For an internal Executive Director appointment, any variable pay element awarded in respect of the prior role may be
allowed to pay out according to its terms, adjusted as relevant to take account of the appointment. In addition, any other
ongoing remuneration obligations existing prior to appointment may continue. For external and internal appointments,
the Committee may agree that the Company will meet certain relocation and/or incidental expenses as appropriate.
Fee levels for Non-Executive Director appointments will take into account the expected time commitment of the role and
the current fee structure in place at that time.
Polc for loss of offce
Executive Directors’ service contracts are terminable by the Director on six months’ notice and by the relevant employing
company on 12 months’ notice. There are no speciic provisions under which Executive Directors are entitled to receive
compensation upon early termination, other than in accordance with the notice period.
On termination of an Executive Director’s service contract, the Committee will take into account the departing Director’s duty
to mitigate his loss when determining the amount of any compensation. Disbursements such as legal and outplacement costs
and incidental expenses may be payable where appropriate, and payments may be made for accrued holiday.
The Committee reserves the right to make payments by way of settlement of any claim arising in connection with the
cessation of employment.
Tullow Oil plc Annual Report and Accounts 2023 – 111
Financial statements Supplementary informationStrategic report Corporate governance
Drectors’ Remunerton Polc Report contnued
Polc for loss of offce contnued
The following payments may also be made to departing Executive Directors:
Cessation of employment due to death, injury, disability, retirement (for
TIP awards only), redundancy, the participant’s employing company
orbusiness for which they work being sold out of the Company’s Group
or in other circumstances at the discretion of the Committee.
Cessation of employment due to other
reasons (e.g. termination for cause)
TIP (cash) Cessation during a inancial year, or after the year but prior
to the normal TIP Award date, may, at the discretion of the
Committee, result in the cash part of the TIP being paid
following the date of cessation (prorated for the proportion
ofthe year worked).
No entitlement to the cash part
ofthe TIP following the date notice
is served.
TIP (shares) Cessation during a inancial year, or after the year but prior
to the normal TIP Award date, may, at the discretion of the
Committee, result in an award of deferred shares being made
(prorated for the proportion of the year worked). Unvested
TIP shares generally vest at the normal vesting date (except
on death or retirement – see below) unless the Committee
determines they should vest at cessation. On death, TIP shares
generally vest immediately unless the Committee determines
that they should vest at the normal vesting date. On retirement
(as evidenced to the satisfaction of the Committee), TIP shares
will vest at the earlier of the normal vesting date and three years
from retirement unless the Committee determines they should
vest at cessation.
Unvested TIP shares lapse. No
entitlement to the deferred share
element of the TIP following the
date notice is served.
Annual bonus The Executive Director will normally be considered for
abonuspayment.
It is the Committee’s policy to ensure that any bonus payment
relects the departing Executive Director’s performance. Unless
the Committee determines otherwise, any bonus payment
will be paid at the usual time following the determination of
performance measures and be subject to a pro rata reduction
for time served during the performance period.
No entitlement to annual bonus
award following date notice is served.
Deferred
bonus shares
Unvested awards will continue and will vest at the normal
vesting date. In exceptional circumstances, the Committee may
decide that the Executive Director’s deferred share awards will
vest at the date of cessation of employment.
Unvested awards will normally
lapse on cessation of employment.
LTIP awards Unvested awards will continue and will remain capable of
vesting at the normal vesting date. To the extent that the awards
vest, a two-year holding period would then normally apply.
In exceptional circumstances, the Committee may decide that
the Executive Director’s awards will vest and be released early at
the date of cessation of employment or at some other time (e.g.
following the end of the performance period).
In either case, vesting will depend on the extent to which the
performance measures have been satisied and will be subject
to a pro rata reduction of the awards for time served from the
grant date to the date of cessation of employment (although
the Committee has discretion to disapply time prorating if the
circumstances warrant it).
Unvested awards will normally
lapse on cessation of employment.
If an Executive Director leaves
for any reason after an award has
vested but before it has been
released (i.e. during a holding
period), their award will ordinarily
continue to be released at the
normal release date.
Remunerton report contnued
112 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
The terms applying to any buy-out awards on cessation of employment or change of control would be determined when
the award is granted. Such terms would normally be consistent with the principles outlined above.
In the event of a change of control deferred bonus shares will vest in full. LTIP awards will vest early in the event of change
of control. The level of vesting will be determined taking into account the extent to which performance measures are
satisied at the date of the relevant event and, unless the Committee determines otherwise, awards will be prorated for
time served from the grant date to the date of the relevant event. TIP awards will be treated in line with the plan rules.
Consderton of shreholders’ vews
The Committee considers shareholder feedback received at the AGM each year and, more generally, guidance from
shareholder representative bodies. This feedback, plus any additional feedback received during any meetings from time to
time, is considered as part of the Company’s annual review of the continuing appropriateness of the Remuneration Policy.
Prior to the inalisation of this Policy the Committee consulted with all major shareholders on the proposals. This
feedback helped inform the inal Policy put forward for shareholder approval. The Committee will seek to engage directly
with major shareholders and their representative bodies should any material changes be proposed to be made to the
Remuneration Policy.
Emploment condtons elsewhere n the Group
In setting the Remuneration Policy and remuneration levels for Executive Directors, the Committee is cognisant of the
approach to rewarding employees in the Group and levels of pay increases generally. The Committee does not currently
formally consult directly with employees on the executive pay policy, but it does receive regular updates from the
Company Secretary and the Director of People and Sustainability. During the year this included updates on discussions
with the SLT on the proposed changes to the Directors’ Remuneration Policy and how these changes would apply more
widely to other employees.
Non-Executve Drectors’ terms of ppontment
Non-Executive Director
Year
appointed
Number of
complete
years on the
Board
Date of
current
engagement
commenced
Expiry of
current term
Phuthuma Nhleko 2021 2 25.10.21 24.10.24
Martin Greenslade 2019 4 01.11.19 31.10.24
Sheila Khama 2019 4 26.04.19 26.04.25
Rebecca Wiles 2023 0 28.06.23 27.06.26
Mitchell Ingram 2020 3 09.09.20 09.09.26
Genevieve Sangudi 2019 4 26.04.19 25.04.25
Roald Goethe 2023 0 24.02.23 23.02.26
In each case, the appointment is renewable thereafter if agreed by the Director and the Board. The appointment of
any Non-Executive Director may be terminated by either party on three months’ notice. There are no arrangements
under which any Non-Executive Director is entitled to receive compensation upon the early termination of his or
herappointment.
Genevieve Sangudi
Chair of the Remuneration Committee
5 March 2024
Tullow Oil plc Annual Report and Accounts 2023 – 113
Financial statements Supplementary informationStrategic report Corporate governance
Drectors’ report
The Directors present their Annual Report and audited Financial Statements
fortheGroup for the year ended 31 December 2023. Certain statutory or regulatory
information required to be included in this section is included elsewhere in the
Annual Report (see table below) and is incorporated by reference. The Corporate
Governance Report on pages 68 to 113 is the corporate governance statement for
the purposes of Disclosure Guidance and Transparency Rule 7.2.1.
Informton ncorported b reference
The information in the table below is incorporated in the
Directors’ report by reference and can be found on the
pages of this Annual Report as indicated in the table below.
Information Page
Principal activities 14 to 16
Likely future developments 9
Our stakeholders and how we engage with them 22 and 23
ESG 26 to 37
Employee involvement and engagement 23 and 35
Diversity 36
Greenhouse gases 34
TCFD 38 to 47
Human rights 37
Anti-bribery and anti-corruption 35 and 36
Derivative inancial instruments 61 and 62
Post balance sheet events 64
Artcles of Assocton
The Company’s Articles were adopted at the 2021 AGM.
They may only be amended by a special resolution of
theshareholders.
Lstn of notes
Tullow’s Senior Secured Notes due 2026 and Senior Notes
due 2025 are listed on the Luxembourg Stock Exchange.
Results nd dvdends
The loss on ordinary activities after taxation of the Group
for the year ended 31 December 2023 was $110 million
(2022: $49 million proit). In 2023 the Board recommended
that no interim and inal dividend would be paid.
Shre cptl
As at 5 March 2024 (being the latest practicable date
before publication of this Annual Report and inancial
statements), the Company’s issued share capital
comprised of 1,454,137,162 ordinary shares each with a
nominal value of £0.10.
Substntl shreholdns
As at 31 December 2023 and 5 March 2024 (being the latest
practicable date before publication of this Annual Report
and inancial statements), the Company had been notiied
in accordance with the requirements of provision 5.1.2 of
the Financial Conduct Authority’s Disclosure Guidance and
Transparency Rules of the following signiicant holdings in
the Company’s ordinary share capital:
Shareholder
Number of
shares
% of issued
capital (as at
date of
notiication)
Samuel Dossou-Aworet 243,635,633 16.80%
Azvalor Asset Management
S.G.I.I.C., S.A. 239,327,757 16.47%
RWC Asset Management LLP 71,022,015 5.09%
Summerhill Trust Company
(Isle of Man) Limited 58,838,104 4.19%
Shreholders’ rhts
The rights and obligations of shareholders are set out
in the Company’s Articles of Association (which can be
amended by special resolution). The rights and obligations
attaching to the Company’s shares are as follows:
• Dividend rights – holders of the Company’s shares
may, by ordinary resolution, declare dividends but
may not declare dividends in excess of the amount
recommended by the Directors. The Directors may also
pay interim dividends. No dividend may be paid other
than out of proits available for distribution. Subject
to shareholder approval, payment or satisfaction of a
dividend may be made wholly or partly by distribution of
speciic assets.
114 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
• Voting rights – voting at any general meeting may be
conducted by a show of hands unless a poll is duly
demanded. On a show of hands every shareholder who is
present in person at a general meeting (and every proxy or
corporate representative appointed by a shareholder and
present at a general meeting) has one vote regardless of the
number of shares held by the shareholder (or represented
by the proxy or corporate representative). If a proxy has been
appointed by more than one shareholder and has been
instructed by one or more of those shareholders to vote ‘for’
the resolution and by one or more of those shareholders to
vote ‘against’ a particular resolution, the proxy shall have one
vote for and one vote against that resolution. On a poll, every
shareholder who is present in person has one vote for every
share held by that shareholder and a proxy has one vote
for every share in respect of which he has been appointed
as proxy (the deadline for exercising voting rights by proxy
is set out in the form of proxy). On a poll, a corporate
representative may exercise all the powers of the Company
that has authorised him.
• A poll may be demanded by any of the following: (a) the
Chairman of the meeting; (b) at least ive shareholders
entitled to vote and present in person or by proxy or
represented by a duly authorised corporate representative
at the meeting; (c) any shareholder or shareholders
present in person or by proxy or represented by a duly
authorised corporate representative and holding shares
or being a representative in respect of a holder of shares
representing in the aggregate not less than one-tenth
of the total voting rights of all shareholders entitled to
attend and vote at the meeting; or (d) any shareholder
or shareholders present in person or by proxy or
represented by a duly authorised corporate representative
and holding shares or being a representative in respect
of a holder of shares conferring a right to attend and vote
at the meeting on which there have been paid up sums in
the aggregate equal to not less than one-tenth of the total
sums paid up on all the shares conferring that right.
• Return of capital – in the event of the liquidation of the
Company, after payment of all liabilities and deductions
taking priority, the balance of assets available for distribution
will be distributed among the holders of ordinary shares
according to the amounts paid up on the shares held
by them. A liquidator may, with the authority of a special
resolution, divide among the shareholders the whole or any
part of the Company’s assets, or vest the Company’s assets
in whole or in part in trustees upon such trusts for the beneit
of shareholders, but no shareholder is compelled to accept
any property in respect of which there is a liability.
• Control rights under employee share schemes – the
Company operates a number of employee share
schemes (see pages 97 and 107). Under some of these
arrangements, shares are held by trustees on behalf of
employees. The employees are not entitled to exercise
directly any voting or other control rights. The trustees
will generally vote in accordance with employees’
instructions and abstain where no instructions are
received. Unallocated shares are generally voted at the
discretion of the trustees.
• Restrictions on holding securities – there are no
restrictions under the Company’s Articles of Association
or under UK law that either restrict the rights of UK
resident shareholders to hold shares or limit the rights of
non-resident or foreign shareholders to hold or vote the
Company’s ordinary shares.
There are no UK foreign exchange control restrictions on
the payment of dividends to US persons on the Company’s
ordinary shares.
Mterl reements contnn ‘chne
ofcontrol’ provsons
The following signiicant agreements will, in the event of a
‘change of control’ of the Company, be aected as follows:
• To the extent that a ‘change of control’ occurs, as a result
of: (i) a disposal of all or substantially all the properties or
assets of the Company and all its restricted subsidiaries
(other than through a merger or consolidation) in one or
a series of related transactions; (ii) a plan being adopted
relating to the liquidation or dissolution of the Company;
or (iii) any person becoming the beneicial owner,
directly or indirectly, of shares of the Company which
grant that person more than 50% of the voting rights of
the Company.
• Under the $600 million senior secured revolving facility
agreement between, among others, the Company
and certain subsidiaries of the Company, ABSA Bank,
Barclays, BNP Paribas, DNB (UK), JP Morgan, ING
Belgium, Nedbank, Standard Chartered Bank, Standard
Bank of South Africa, Glas Trust Corporation and the
lenders speciied therein, the Company is obliged to
notify the agent (who notiies the lenders) upon the
occurrence of a change of control. Each lender shall
be entitled to repayment of all outstanding amounts
owed by the Company and certain subsidiaries of
the Company to it under the agreement and any
connected inance document. Each lender shall be
entitled to cancel its commitments immediately under
the agreement. So long as such lender states its
requirement to be repaid within 30 days of being notiied
by the agent, the repayment amount will become due
and payable by no later than 30 days after the agent has
notiied the Company to request such payments.
• Under an Indenture relating to $1.8 billion of 10.25%
senior secured notes due in 2026 between, among
others, the Company, certain subsidiaries of the
Company and Deutsche Trustee Company Limited
as the Trustee, the Company must make an oer to
noteholders to repurchase all or any part of the notes
at 101% of the aggregate principal amount of the
notes, plus accrued and unpaid interest on the notes
repurchased to the date of purchase in the event
that a change of control of the Company occurs. The
repurchase oer must be made by the Company to
all noteholders within 30 days following the change of
control and the repurchase must take place no earlier
than 10 days and no later than 60 days from the date of
the repurchase oer.
Tullow Oil plc Annual Report and Accounts 2023 – 115
Financial statements Supplementary informationStrategic report Corporate governance
Mterl reements contnn ‘chne
ofcontrol’ provsons contnued
• Relating to $800 million of 7% Senior Notes due in
2025 between, among others, the Company, certain
subsidiaries of the Company and Deutsche Trustee
Company Limited as the Trustee, the Company must
make an oer to noteholders to repurchase all the
notes at 101% of the aggregate principal amount of the
notes, plus accrued and unpaid interest in the event
that a change of control of the Company occurs. The
repurchase oer must be made by the Company to
all noteholders within 30 days following the change of
control and the repurchase must take place no earlier
than 10 days and no later than 60 days from the date the
repurchase oer is made. Each noteholder may take up
the oer in respect of all or part of its notes.
• Under the $400 million note subscription agreement
between, amongst others, the Company, Glencore,
Glas Trust Corporation and Law Debenture, the
Company is obliged to notify the agent (who notiies
the noteholders) upon the occurrence of a change of
control. Each noteholder shall be entitled to repayment
of all outstanding amounts owed by the Company to
it under the agreement and any connected inance
document. Each noteholder shall also be entitled to
cancel any undrawn commitments immediately under
the agreement. In order to give eect to the noteholder’s
request for repayment, they are to notify the Company
within 30 days of being notiied by the agent, following
which the repayment amount will become due and
payable no later than 30 days after such notice to
the Company.
Drectors
In accordance with the provisions of the Code, all
Directors eligible for re-election should retire at each
AGM and oer themselves for election or re-election (as
appropriate). Accordingly, all Directors will retire and seek
election or re-election at the AGM, anticipated to be held
on 16 May 2024. The Board believes that all Directors
oering themselves for election or re-election continue
to be eective and demonstrate commitment to the
role. The names and biographies of our current Directors
are included on pages 70 and 71 and the names of the
Directors that retired during the year are set out on page 5.
Details of the Directors’ interests in the ordinary shares of
the Company and in the Group’s long-term incentive and
other share option schemes are set out on page 101 in the
Directors’ Remuneration report.
Drectors’ report contnued
Drectors’ ndemntes nd nsurnce cover
As at the date of this report, indemnities are in force
under which the Company has agreed to indemnify the
Directors, to the extent permitted by the Companies
Act 2006, against claims from third parties in respect
of certain liabilities arising out of, or in connection with,
the execution of their powers, duties and responsibilities
as Directors of the Company or any of its subsidiaries.
The Directors are also indemniied against the cost
of defending a criminal prosecution or a claim by the
Company, its subsidiaries or a regulator provided that
where the defence is unsuccessful the Director must
repay those defence costs. The Company also maintains
directors’ and oicers’ liability insurance cover, the level of
which is reviewed annually.
Powers of Drectors
The general powers of the Directors are set out in Article 104
of the Articles of Association of the Company. It provides
that the business of the Company shall be managed by the
Board which may exercise all the powers of the Company
whether relating to the management of the business of the
Company or not. This power is subject to any limitations
imposed on the Company by applicable legislation. It is also
limited by the provisions of the Articles of Association of the
Company and any directions given by special resolution of
the shareholders of the Company which are applicable on
the date that any power is exercised.
Please note the following speciic provisions relevant to
the exercise of power by the Directors:
• Pre-emptive rights and new issues of shares – the
holders of ordinary shares have no pre-emptive rights
under the Articles of Association of the Company.
However, the ability of the Directors to cause the
Company to issue shares, securities convertible into
shares or rights to shares, otherwise than pursuant to
an employee share scheme, is restricted under the
Companies Act 2006 which provides that the directors
of a company are, with certain exceptions, unable to
allot any equity securities without express authorisation,
which may be contained in a company’s articles of
association or given by its shareholders in general
meeting, but which in either event cannot last for more
than ive years. Under the Companies Act 2006, the
Company may also not allot shares for cash (otherwise
than pursuant to an employee share scheme) without
irst making an oer on a pre-emptive basis to existing
shareholders, unless this requirement is waived by a
special resolution of the shareholders.
• Borrowing powers – the net external borrowings of
the Group outstanding at any time shall not exceed an
amount equal to four times the aggregate of the Group’s
adjusted capital and reserves calculated in the manner
prescribed in Article 105 of the Company’s Articles of
Association, unless sanctioned by an ordinary resolution
of the Company’s shareholders.
116 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Appontment nd replcement of Drectors
The Company shall appoint (disregarding Alternate
Directors) no fewer than two and no more than 15
Directors. The appointment and replacement of Directors
may be made as follows:
• The shareholders may by ordinary resolution elect any
person who is willing to act to be a Director.
• The Board may elect any person who is willing to act to
be a Director. Any Director so appointed shall hold oice
only until the next Annual General Meeting and shall
then be eligible for election.
• Each Director is required in terms of the Articles of
Association to retire from oice at the third Annual
General Meeting after the Annual General Meeting at
which he or she was last elected or re-elected, although
he or she may be re-elected by ordinary resolution
if eligible and willing. However, to comply with the
principles of best corporate governance, the Board
intends that each Director will submit him or herself for
re-election on an annual basis.
• The Company may by special resolution remove any
Director before the expiration of his or her period of
oice or may, by ordinary resolution, remove a Director
where special notice has been given and the necessary
statutory procedures are complied with.
• There are a number of other grounds on which
a Director’s oice may cease, namely voluntary
resignation, where all the other Directors (being at least
three in number) request his or her resignation, where
he or she suers physical or mental incapacity, where
he or she is absent from meetings of the Board without
permission of the Board for six consecutive months,
becomes bankrupt or compounds with his or her
creditors or where he or she is prohibited by law from
being a Director.
Authort to llot new shres
At the Company’s AGM on 24 May 2023, shareholders
authorised the Directors, by way of ordinary resolution, to
allot new equity securities up to a maximum aggregate
value of £48, 228,412, being approximately one-third of the
issued share capital of the Company as at 17 April 2023.
The authority conferred at the 2023 AGM will expire at
the close of the Company’s AGM in 2024 or the close of
business on 30 June 2024 (whichever is earlier). At the
2024 AGM, shareholders will be requested to renew this
authority. Save for the allotment of shares in respect of the
Group’s employee share schemes, the Directors have no
current intention to exercise this authority.
Purchse of own shres
At the Company’s AGM on 24 May 2023 shareholders
authorised the Company by way of special resolution, to
make market purchases of a maximum of 144,685,380 of
the Company’s ordinary shares (being 10% of the issued
share capital of the Company) as at 17 April 2023 at certain
minimum and maximum prices speciied in the resolution.
The authority conferred at the 2023 AGM will expire at
the close of the Company’s AGM in 2024 or the close of
business on 30 June 2024 (whichever is earlier).
After careful consideration, including considering the
views expressed by shareholders, the Directors have
decided not to seek authority to make market purchases
of the Company’s own shares. Although, not anticipated,
should the Company require to make market purchases of
its own shares, a separate general meeting would be called
at which the authority to purchase the Company’s own
share would be sought from shareholders.
Poltcl dontons
In line with Group policy, no donations were made for
political purposes.
Audtor nd dsclosure of relevnt
udtnformton
Having made the requisite enquiries, so far as the Directors
are aware, there is no relevant audit information (as deined
by section 418(3) of the Companies Act 2006) of which the
Company’s auditor is unaware and each Director has taken
allsteps that ought to have been taken to make him or herself
aware of any relevant audit information and to establish that
the Company’s auditor is aware of that information.
A resolution to re-appoint EY as the Company’s auditor will
be proposed at the 2024 AGM on 16 May 2024. Further
information can be found in the Audit Committee Report
on pages 85.
Annul Generl Meetn
It is anticipated that the AGM of Tullow will be held at
9Chiswick Park 566 Chiswick High Road W4 5XT on
16May 2024, at 11.00 am.
The Notice convening the AGM and detailing the resolutions
to be put to shareholders at the meeting, will be sent to
shareholders together with this Annual Report and Accounts
and published on our website at www.tullowoil.com.
This Corporate Governance report (which includes the
Directors’ Remuneration report) and the information
referred to herein have been approved by the Board and
signed on its behalf by:
Adam Holland
Company Secretary
5 March 2024
Registered oice:
9 Chiswick Park
566 Chiswick High Road
London W4 5XT
Company registered in England and Wales No. 3919249
Tullow Oil plc Annual Report and Accounts 2023 – 117
Financial statements Supplementary informationStrategic report Corporate governance
Sttement of Drectors’ responsbltes
The Directors are responsible for preparing the Annual
Report and the Financial Statements in accordance with
applicable United Kingdom law and regulations.
Company law requires the Directors to prepare Financial
Statements for each inancial year. Under that law the
Directors have elected to prepare the Group and Parent
Company inancial statements in accordance with UK-
adopted international accounting standards (IFRSs), and the
Parent Company inancial statements in accordance with
United Kingdom Generally Accepted Accounting Practice
(United Kingdom Accounting Standards and applicable
law), including Financial Reporting Standard 101 Reduced
Disclosure Framework (FRS 101). Under company law the
Directors must not approve the Financial Statements unless
they are satisied that they give a true and fair view of the
state of aairs of the Group and the Company and of the
proit or loss of the Group and the Company for that period.
Under the Financial Conduct Authority’s Disclosure
Guidance and Transparency Rules and the Transparency
(Directive 2004/109/EC) Regulations 207 (as amended),
Group Financial Statements are required to be prepared
in accordance with UK-adopted international accounting
standards and international Financial Reporting Standards
adopted pursuant to Regulation (EC) No. 1606/2002 as it
applies in the European Union.
In preparing these Financial Statements the Directors are
required to:
• select suitable accounting policies in accordance with
IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors and then apply them consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
• present information, including accounting policies, in a
manner that provides relevant, reliable, comparable and
understandable information;
• provide additional disclosures when compliance with the
speciic requirements in IFRSs and in respect of the Parent
Company Financial Statements, FRS 101 is insuicient
to enable users to understand the impact of particular
transactions, other events and conditions on the Group
and Company inancial position and inancial performance;
• in respect of the Group Financial Statements, state
whether UK-adopted international accounting standards
and IFRSs adopted pursuant to Regulation (EC) No.
1606/2002 as it applies in the European Union have
been followed, subject to any material departures
disclosed and explained in the Financial Statements;
• in respect of the Parent Company Financial Statements,
state whether applicable UK Accounting Standards,
including FRS 101, have been followed, subject to any
material departures disclosed and explained in the
Financial Statements; and
• prepare the Financial Statements on the going concern
basis unless it is inappropriate to presume that the
Company and/or the Group will continue in business.
The Directors are responsible for keeping adequate
accounting records that are suicient to show and explain
the Company’s and Group’s transactions and disclose with
reasonable accuracy at any time the inancial position of
the Company and the Group and enable them to ensure
that the Company and the Group Financial Statements
comply with the Companies Act 2006. They are also
responsible for safeguarding the assets of the Group
and Parent Company and hence for taking reasonable
steps for the prevention and detection of fraud and
otherirregularities.
Under applicable law and regulations, the Directors are
also responsible for preparing a strategic report, Directors’
report, Directors’ remuneration report and corporate
governance statement that comply with that law and
those regulations. The Directors are responsible for the
maintenance and integrity of the corporate and inancial
information included on the Company’s website.
Drectors’ responsblt sttement (DTR 41
nd the Trnsprenc (Drectve 2004/109/
EC) Reultons (s mended))
The Directors conirm, to the best of their knowledge:
• that the consolidated Financial Statements, prepared in
accordance with UK-adopted international accounting
standards and IFRSs adopted pursuant to Regulation
(EC) No. 1606/2002 as it applies in the European Union;
• give a true and fair view of the assets, liabilities,
inancial position and proit of the Parent Company
and undertakings included in the consolidation taken
as a whole;
• that the Annual Report, including the Strategic
Report, includes a fair review of the development
and performance of the business and the position
of the Company and undertakings included in the
consolidation taken as a whole, together with a
description of the principal risks and uncertainties that
they face; and
• that they consider the Annual Report, taken as a whole,
is fair, balanced and understandable and provides the
information necessary for shareholders to assess the
Company’s position, performance, business model
and strategy.
Rahul Dhir
Chief Executive Oicer
5 March 2024
118 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Fnncl
sttements
120 Independent auditor’s report to the members of
TullowOil plc
130 Group inancial statements
179 Company inancial statements
Supplementr nformton
189 Alternative performance measures
191 Commercial reserves and contingent resources
summary (unaudited) working interest basis
192 Shareholder information
Tullow Oil plc Annual Report and Accounts 2023 – 119
Financial statements
Supplementary information
Strategic report
Corporate governance
120 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Opnon
In our opinion:
• Tullow Oil plc’s group inancial statements and parent company inancial statements (the “inancial statements”) give
a true and fair view of the state of the group’s and of the parent company’s aairs as at 31 December 2023 and of the
group’s loss for the year then ended;
• the group inancial statements have been properly prepared in accordance with UK adopted international accounting
standards and International Financial Reporting Standards adopted pursuant to Regulation (EC) No. 1606/2002 as it
applies in the European Union;
• the parent company inancial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice; and
• the inancial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the inancial statements of Tullow Oil plc (the ‘parent company’) and its subsidiaries (the ‘group’) for the
year ended 31 December 2023 which comprise:
Group Parent company
Group balance sheet as at 31 December 2023 Company balance sheet as at 31 December 2023
Group income statement for the year then ended Company statement of changes in equity for the year
then ended
Group statement of comprehensive income for the
yearthen ended
Related notes 1 to 7 to the inancial statements including
material accounting policy information
Group statement of changes in equity for the year then ended
Group cash low statement for the year then ended
Related notes 1 to 30 to the inancial statements, including
material accounting policy information.
The inancial reporting framework that has been applied in the preparation of the group inancial statements is applicable
law and UK adopted international accounting standards and International Financial Reporting Standards adopted
pursuant to Regulation (EC) No. 1606/2002 as it applies in the European Union. The inancial reporting framework that
has been applied in the preparation of the parent company inancial statements is applicable law and United Kingdom
Accounting Standards, including FRS 101 “Reduced Disclosure Framework” (United Kingdom Generally Accepted
Accounting Practice).
Bss for opnon
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the inancial
statements section of our report. We believe that the audit evidence we have obtained is suicient and appropriate to
provide a basis for our opinion.
Independence
We are independent of the group and parent in accordance with the ethical requirements that are relevant to our audit of
the inancial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we
have fulilled our other ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent company
and we remain independent of the group and the parent company in conducting the audit.
Independent udtor’s report to the members of Tullow Ol plc
Tullow Oil plc Annual Report and Accounts 2023 – 121
Financial statements Supplementary informationStrategic report Corporate governance
Conclusons reltn to on concern
In auditing the inancial statements, we have concluded
that the directors’ use of the going concern basis of
accounting in the preparation of the inancial statements
is appropriate. Our evaluation of the directors’ assessment
of the group and parent company’s ability to continue to
adopt the going concern basis of accounting included:
• evaluating whether management’s going concern
period, of 12 months from signing of the inancial
statements, was appropriate;
• assessing the reasonableness of management’s oil price
assumptions by comparing it with forward curves;
• with the assistance of our business modelling
specialists, reviewing the integrity of management’s
going concern model by checking consistency of the
assumptions and formulae;
• comparing the forecasted cash expenditure
incorporated in the model with the board approved
budget to ensure consistency;
• assessing historical forecasting accuracy through
comparing forecast versus actual;
• checking that the cash lows assumptions used in
the going concern model were consistent with those
used for impairment testing purposes, including
decarbonisation costs, and evaluating the dierences for
appropriateness;
• ensuring assumptions, such as hedging, provision
utilisation and decommissioning escrow payments, were
consistent with other areas of our audit;
• assessing whether the assumptions in the
management’s downside scenario were plausible and
suiciently severe;
• verifying managements plan in relation to repayment of
the remaining outstanding 2025 bonds and assessing
whether there is suicient liquidity at the end of going
concern period, after their repayment;
• obtaining an understanding of ongoing litigations and
identifying cases, in particular those mentioned in
the accounting policies note section (af), where the
outcome is expected within the going concern period.
We then evaluated whether management’s downside
case suiciently captured potential outlows in relation
to these cases;
• evaluating management’s reverse stress test to
determine the oil price at which liquidity becomes
negative and assessing the likelihood of its occurrence;
• conirming that the forecast decarbonisation costs were
included in the model; and
• reviewing management’s proposed disclosures to
ensure that they were appropriate and met current
accounting requirements.
Our e observtons
In forming our conclusions, we have considered the
generation of free cash low and available liquidity that
supports the repayment of 2025 bonds. With maturities of
the 2026 bonds in May 2026 and tax arbitration hearings
scheduled for 2025, we consider the management’s
going concern period of 12 months to be reasonable.
We consider the downside case is suiciently severe
and appropriately relects potential outlows in respect
of ongoing arbitrations. Under management’s reverse
stress test, at an oil price of $45/bbl throughout the going
concern period, the liquidity becomes negative. Based on
the current oil price and forward curve we consider the
likelihood of occurrence of this scenario to be remote.
Based on the work we have performed, we have not
identiied any material uncertainties relating to events
or conditions that, individually or collectively, may cast
signiicant doubt on the group and parent company’s
ability to continue as a going concern for a period up to
March 2025.
In relation to the group and parent company’s reporting
on how they have applied the UK Corporate Governance
Code, we have nothing material to add or draw attention
to in relation to the directors’ statement in the inancial
statements about whether the directors considered
it appropriate to adopt the going concern basis of
accounting.
Our responsibilities and the responsibilities of the
directors with respect to going concern are described
in the relevant sections of this report. However, because
not all future events or conditions can be predicted, this
statement is not a guarantee as to the group’s ability to
continue as a going concern.
122 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Independent udtor’s report to the members of Tullow Ol plc contnued
Overvew of our udt pproch
Audit scope • We performed an audit of the complete inancial information of 4 components and audit
procedures on speciic balances for a further 7 components.
• The components where we performed full or speciic audit procedures accounted for
100% of adjusted Earnings before Interest Tax Depreciation Amortisation and Exploration
(‘Adjusted EBITDAX’), 100% of Revenue and 90% of Total assets.
Key audit matters
• Recoverability of Kenya intangible exploration and evaluation asset
• Uncertain Tax Treatments
• Recoverability of Property plant and equipment
Materiality
• Overall Group materiality of $29.4m which represents 2.6% Adjusted EBITDAX.
An overvew of the scope of the prent
compn nd roup udts
Tlorn the scope
Our assessment of audit risk, our evaluation of materiality
and our allocation of performance materiality determine
our audit scope for each company within the Group.
Taken together, this enables us to form an opinion on
the consolidated inancial statements. We take into
account size, risk proile, the organisation of the group
and eectiveness of group-wide controls, changes in the
business environment, the potential impact of climate
change and other factors such as recent Internal audit
results when assessing the level of work to be performed
at each company.
In assessing the risk of material misstatement to the Group
inancial statements, and to ensure we had adequate
quantitative coverage of signiicant accounts in the
inancial statements, of the 41 reporting components of
the Group, we selected 11 components covering entities
within Cote D’Ivoire, Gabon, Ghana, Kenya and the United
Kingdom, which represent the principal business units
within the Group.
Of the 11 components selected, we performed an audit
of the complete inancial information of 4 components
(“full scope components”) which were selected based
on their size or risk characteristics. For the remaining
7 components (“speciic scope components”), we
performed audit procedures on speciic accounts within
that component that we considered had the potential
for the greatest impact on the signiicant accounts in the
inancial statements either because of the size of these
accounts or their risk proile.
The reporting components where we performed full or
speciic audit procedures accounted for 101% (2022: 97%)
of the Group’s Adjusted EBITDAX, 100% (2022: 97%) of the
Group’s Revenue and 90% (2022: 90%) of the Group’s Total
assets. For the current year, the full scope components
contributed 104% (2022: 103%) of the Group’s Adjusted
EBITDAX, 98% (2022: 99%) of the Group’s Revenue and
83% (2022: 83%) of the Group’s Total assets. The speciic
scope components contributed -3% (2022: -6%) of the
Group’s Adjusted EBITDAX, 2% (2022: -2%) of the Group’s
Revenue and 7% (2022: 7%) of the Group’s Total assets. The
audit scope of these components may not have included
testing of all signiicant accounts of the component
but will have contributed to the coverage of signiicant
accounts tested for the Group. We also performed
speciied procedures over certain aspects of Cash and
Cash Equivalents and Finance Revenue in one location.
Of the remaining 30 components that together represent
0% of the Group’s Adjusted EBITDAX, none are individually
greater than 1% of the Group’s Adjusted EBITDAX. For
these components, we performed other procedures,
including analytical review, testing of consolidation
journals and intercompany eliminations to respond to
any potential risks of material misstatement to the Group
inancial statements.
The charts below illustrate the coverage obtained from the work performed by our audit team.
Adjusted EBITDAX
104% Full scope components
(3)% Speciic scope components
(1)% Other procedures
Revenue
98% Full scope components
2% Speciic scope components
0% Other procedures
Total assets
83% Full scope components
7% Speciic scope components
10% Other procedures
Tullow Oil plc Annual Report and Accounts 2023 – 123
Financial statements Supplementary informationStrategic report Corporate governance
Chnes from the pror er
There were no changes to our full scope components in
the current year. For other scopes, we have updated our
assessment this year to exclude three exploration entities
that are no longer material, primarily due to exploration
cost write-os in 2022. These changes had limited impact
on coverage.
In line with our approach from the previous year, audit
work for the Ghana component, which covers 2 full scope
components, has been performed by an integrated
primary audit team comprising of team members from EY
UK and EY Ghana and led by the Senior Statutory Auditor.
During the current year’s audit cycle, visits were
undertaken by the Group audit team to Ghana in July
2023, November 2023 and January 2024. These visits
involved meetings with local management, including
members of inance, legal and commercial teams. We
held discussions on the audit approach, reviewed working
papers to validate that the required procedures have
been performed and discussed the issues arising in the
component audit.
All audit work performed for the purposes of the audit was
undertaken by the Group audit team.
Clmte chne
Stakeholders are increasingly interested in how climate
change will impact Tullow Oil Plc. The Group has
determined that the most signiicant future impacts from
climate change on their operations will be from potential
fall in oil prices, carbon pricing mechanisms, accessibility
to debt and equity funding and ability to retain employee
and stakeholder conidence in their commitments.
These are explained on pages 38 to 47 in the Task Force
for Climate related Financial Disclosures and on pages
52 to 56 in the principal risks and uncertainties. They
have also explained their climate commitments on
page 33. All of these disclosures form part of the “Other
information”, rather than the audited inancial statements.
Our procedures on these unaudited disclosures
therefore consisted solely of considering whether they
are materially inconsistent with the inancial statements,
or our knowledge obtained in the course of the audit or
otherwise appear to be materially misstated, in line with
our responsibilities on “Other information”.
In planning and performing our audit we assessed the
potential impacts of climate change on the Group’s
business and any consequential material impact on its
inancial statements.
The group has explained in note 25 how they have
relected the impact of climate change in their inancial
statements, including how this aligns with their
commitment to being Net Zero by 2030 on Scope 1 and
Scope 2 GHG emissions on a net equity basis supporting
the goal of limiting global temperature rise to well below
2o C as per Article 2 of the Paris Agreement. Signiicant
judgements and estimates relating to climate change are
included in note 25. These disclosures also explain where
governmental and societal responses to climate change
risks are still developing, and where the degree of certainty
of these changes means that they cannot be taken into
account when determining asset and liability valuations
under the requirements of UK adopted international
accounting standards and International Financial
Reporting Standards adopted pursuant to Regulation (EC)
No. 1606/2002 as it applies in the European Union. In note
25 to the inancial statements supplementary sensitivity
disclosures of the impact of changes in oil price under IEA
scenario-Net Zero Emission by 2050 have been provided.
Our audit eort in considering the impact of climate
change on the inancial statements was focused on
evaluating management’s assessment of the impact
of climate risk, physical and transition, their climate
commitments, the eects of material climate risks
disclosed on pages 38 to 47 and the signiicant
judgements and estimates disclosed in note 25 and
whether these have been appropriately relected in oil and
gas asset values where these are impacted by future cash
lows and associated sensitivity disclosures (see note 25),
and in the timing and nature of decommissioning liabilities
recognised, (see note 25), following the requirements
of UK adopted international accounting standards and
International Financial Reporting Standards adopted
pursuant to Regulation (EC) No. 1606/2002 as it applies
in the European Union. As part of this evaluation, we
performed our own risk assessment, supported by
our climate change internal specialists. This included
making inquiries of the Head of Sustainability and Group
Finance teams, and a review of peer disclosures and
sector guidance on climate change and energy transition
to determine the risks of material misstatement in the
inancial statements from climate change which needed to
be considered in our audit.
We also challenged the Directors’ considerations of
climate change risks in their assessment of going
concern and viability and associated disclosures. Where
considerations of climate change were relevant to our
assessment of going concern, these are described above.
Based on our work, whilst we have not identiied the
impact of climate change on the inancial statements to
be a standalone key audit matter, we have considered the
impact on the following key audit matters: Recoverability
of Kenya Intangible Exploration and Evaluation Asset
(‘E&E’) and Recoverability of Property, Plant and Equipment
(‘PP&E’). Details of the impact, our procedures and indings
are included in our explanation of key audit matters below.
e udt mtters
Key audit matters are those matters that, in our professional
judgment, were of most signiicance in our audit of the
inancial statements of the current period and include the
most signiicant assessed risks of material misstatement
(whether or not due to fraud) that we identiied. These
matters included those which had the greatest eect on:
the overall audit strategy, the allocation of resources in the
audit; and directing the eorts of the engagement team.
These matters were addressed in the context of our audit
of the inancial statements as a whole, and in our opinion
thereon, and we do not provide a separate opinion on
these matters.
124 – Tullow Oil plc Annual Report and Accounts 2023
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Independent udtor’s report to the members of Tullow Ol plc contnued
e udt mtters contnued
Risk Our response to the risk
Key observations communicated
to the Audit Committee
Recoverblt of en
Intnble Explorton nd
Evluton Asset (‘E&E’)
This is an estimate based on
uncertain outcomes. The
recoverability of the Kenya E&E asset
of $242.2m carries inherent risks
that the project does not progress to
development, requiring the write-
o or impairment of the related
capitalised costs, when the relevant
IFRS requirements are met.
Refer to the Audit Committee Report
(page 82); Accounting policies (page
142); and Note 8 of the Consolidated
Financial Statements (pages 151-153)
Determining the recoverable value of
the Kenya E&E asset is judgemental
given the uncertainties surrounding
the progression of the project to
Final Investment Decision (‘FID’).
Management has performed an
impairment assessment under the
value-in-use (‘VIU’) methodology
where estimates are made for key
inputs including oil prices; discount
rates; production proiles; cost
proiles and iscal terms.
The VIU recoverable value is risk-
adjusted for uncertainties associated
with the Group’s ability to recover
the value of the asset. These
uncertainties include the ability to
secure a strategic partner through a
farm down, obtaining government
deliverables (for example access to
land and water and improved iscal
terms), and arranging inancing to
develop the asset, which represent a
source of potential management bias.
As a result of these factors, there
is signiicant judgement relating to
the Kenya E&E asset and whether an
impairment or impairment reversal
is required at year end. As disclosed
in Note 8, changes in signiicant
assumptions can result in a material
impairment charge, or impairment
reversal. An impairment of $17.9m has
been recorded in the current year.
Our procedures included, amongst others:
• conirmed our understanding of Tullow’s
impairment testing process, as well as the control
environment implemented by management by
performing a walkthrough of the process;
• read the Kenya Joint Operating Agreement and
communication with the Government of Kenya
(GoK) to conirm that the transfer of interest is
unconditional and irrevocable, and eective from
30 June 2023;
• performed press searches to corroborate
management’s judgement that the other JV
partners have permanently withdrawn;
• evaluated the professional qualiications and objectivity
of management’s external experts who performed the
detailed preparation of the resources estimates in 2021.
With no material changes to the development plan, we
consider it appropriate for management to continue to
rely on the 2021 report for oil and gas resources
estimates;
• reconciled the oil and gas resources and cost
estimates used in the impairment model to the
resources report produced by the Management’s
external expert and Field Development Plan (FDP)
submitted to the GoK;
• engaged our valuation specialists to test the
mathematical accuracy and formulae integrity of
management’s model;
• evaluated the appropriateness of management’s
discount rate for Kenya based on an independent
re-calculation of the discount rate including an
assessment of country speciic risks;
• compared Tullow’s commodity price scenarios to
assessments provided by our valuation specialists
and to prices used by peer companies. We also
compared Tullow’s prices to the IEA’s Net Zero
Emissions 2050 (NZE) and to the Announced
Pledges Scenario (APS) price assumptions as
potential contradictory evidence for estimates of
future oil prices;
• sensitised the valuation based on signiicant
assumptions, such as oil price and discount rate,
and audited sensitivities performed by Tullow,
including using the IEA’s Net Zero Emissions oil
price forecast post-2030;
• engaged our valuation specialists to evaluate
management’s probabilistic methodology for
relecting uncertainties associated with the project
to derive risk-adjusted recoverable value;
We consider it is reasonable
that Tullow is entitled to 100%
of the economic interest in the
Kenya JV as at 31 December
2023, as the JV partners have
issued withdrawal notices
and public statements which
are considered irrevocable as
per the Kenya Joint Operating
Agreement.
We consider acceptable
the judgements used by
management in calculating
a gross NPV and then
applying probabilities to
relect the remaining project
uncertainties to calculate the
recoverable amount.
On sensitivity disclosures,
management has appropriately
calculated and disclosed the
impact on the value of the
Kenya asset under the IEA’s
NZE scenario.
Tullow Oil plc Annual Report and Accounts 2023 – 125
Financial statements Supplementary informationStrategic report Corporate governance
e udt mtters contnued
Risk Our response to the risk
Key observations communicated
to the Audit Committee
Recoverblt of en
Intnble Explorton nd
Evluton Asset (‘E&E’)
contnued
We consider that the risk associated
with this key audit matter has
increased compared to the previous
year following withdrawal of the other
JV Partners from the Kenya Joint
Venture and transfer of their equity
interest to Tullow. This withdrawal
and transfer of interest is subject to
the Government of Kenya’s consent
which is yet to be received as of the
date of our report. Management has
applied judgement in determining
Tullow has acquired the 50%
additional interest during the year.
• assessed the appropriateness of the probabilistic
assessment used to adjust for the uncertainties in
computing the recoverable amount of the asset by
independently evaluating each uncertainty’s facts
and circumstances through inspection of
supporting evidence including communications
with a potential farm down partner and the GoK
and discussions with management outside of the
inance function;
• evaluated management’s impact assessment of
potential physical risks arising from climate change
and carbon intensity of the project and whether this
may impact the chances of development; and
• assessing whether the disclosures provided in the
inancial statements relect management’s
judgements, risk
s and uncertainties of the project.
The audit procedures were performed by the
group audit team with the assistance of valuation
specialists. Our audit procedures over this risk area
covers 100% of the reported risk amount.
Uncertn Tx Tretments
This is an estimate based on
uncertain outcomes. The risk is that
tax provisions are not appropriate
given the nature of the tax matter.
Refer to the Audit Committee Report
(page 82); Accounting policies
(pages 143-144); and Note 6 of the
Consolidated Financial Statements
(pages 149-150)
Uncertain tax treatments involve
judgement as to whether a matter
is a provision or a contingent
liability and there is subjectivity in
determining whether any estimated
provision is appropriate. This requires
signiicant judgement, including
evaluating the outcome of the tax
matter, the timescale for resolution
and the need to negotiate with
various stakeholders. Furthermore,
the outcome of the tax matter
in most instances is outside of
Tullow’s control.
As described in the Accounting
Policies note section (af) of
the accounting policies to the
Consolidated Financial Statements
Tullow has three ongoing arbitrations
with Ghana Revenue Authority
amounting to $707 million. Our
procedures were focused on these
three matters. Outcomes not in
Management’s favour, that are not
provided for appropriately, could
result in material charges through the
Group’s proit and loss once settled.
Our procedures included, amongst others:
• conirmed our understanding of Tullow’s taxation
process, as well as the control environment
implemented by management by performing a
walkthrough of the process;
• obtained and read the correspondence with
tax authorities and when required used our
local audit teams and tax specialists to assess
management’s assumptions and judgements
regarding the level of provisions made;
• inspected external legal and tax opinions,
where considered necessary, to corroborate
management’s assessment of the risk proile in
respect of the tax claims;
• evaluated the professional qualiications and
objectivity of management’s external experts;
• discussed the likelihood and quantum of any
potential settlement with management outside
the inance/tax function including the General
Counsel, CEO and Chair;
• Reviewed publicly available information
regarding other signiicant tax claims against
multi-nationals in Ghana, in particular MTN,
to understand the basis of the claim and
the outcome;
• obtained direct conirmation from external
legal counsel to corroborate the status and
management position for material litigations;
• obtained Tullow’s uncertain tax treatment
assessments and audited the associated
workings, including assessing any exposures
and provisions were appropriately extrapolated
for periods which have yet to be assessed by tax
authorities; and
Based on the evidence
obtained and audit
procedures performed,
including inspecting external
legal and tax opinions, we are
satisied that the accounting
treatment and disclosures
in respect of litigations and
uncertain tax treatments is
appropriate.
We also concluded that the
disclosures made in the
inancial statements are
appropriate.
126 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Independent udtor’s report to the members of Tullow Ol plc contnued
e udt mtters contnued
Risk Our response to the risk
Key observations communicated
to the Audit Committee
Uncertn Tx Tretments
contnued
We consider that the risk associated
with this key audit matter has
increased compared to the previous
year given the outcome of one
arbitration will be known within the
going concern period.
• ensured consistency of assumptions regarding
cash outlows in relation to arbitrations expected
to progress within the going concern period;
• considered the relevant disclosures made
within the inancial statements to ensure they
appropriately relect the facts and circumstances
of the tax litigations and exposures and are in
accordance with the requirements of IAS 37
Provisions, IAS 12 Income Taxes and IFRIC 23
Uncertainty over Income tax treatments.
Our audit responses were performed by the group
audit team, with support from tax specialists in
UK and Ghana. Our audit procedures over this risk
area covers 100% of the reported risk amount.
Recoverblt of Propert,
Plnt nd Equpment
(‘PP&E’)
This is a forecast-based estimate.
The risk is that potential impairments
are not identiied on a timely basis.
The risk is similar to 2022 given the
reduction in TEN reserves oset by
an increase in the long-term oil price
assumption of $5/bbl.
Refer to the Audit Committee report
(page 82); Accounting policies
(pages 142-143); and Note 9 of the
Consolidated Financial Statements
(pages 153-155))
Auditing the impairment of PP&E
involves estimation of key inputs
in particular commodity price
assumptions and discount rates.
Changes to any of these key inputs
could lead to a further impairment
or a reversal of impairment, hence
this is considered a key audit
matter. Following the identiication
of indicators of impairment in the
TEN CGU and impairment reversals
for the Group’s remaining CGUs,
the carrying values were tested for
impairment or impairment reversal.
A net impairment of $301.2 million
was recorded.
We consider that the risk associated
with this key audit matter has
remained consistent with the
previous year.
Our procedures included, amongst others:
• conirmed our understanding of Tullow’s
impairment testing process, as well as the control
environment implemented by management by
performing a walkthrough of the process;
• engaged our valuation specialists to test the
mathematical accuracy and formulae integrity of
management’s model;
• compared Tullow’s commodity price scenarios to
assessments provided by our valuation specialists
and to prices used by peer companies. We also
compared Tullow’s prices to the IEA’s Net Zero
Emissions 2050 (NZE) and to the Announced
Pledges Scenario (APS) price assumptions
as potential contradictory evidence for best
estimates of future oil prices;
• assessed the appropriateness of management’s
impairment discount rates including an
independent re-calculation of the discount rate
including an assessment of country speciic risks;
• reconciled production and cost proiles used
in the impairment model to the reserves report
produced by management’s external expert;
• evaluated the professional expertise and
objectivity of management’s external experts;
• evaluating the consistency of assumptions used
in the impairment model with other areas of the
audit such as going concern;
• testing whether decarbonisation costs were
incorporated in the models; and
• evaluated management’s impact assessment
of potential physical risks arising from climate
change and whether this may impact the carrying
value of the asset; and
• audited sensitivities performed by Tullow
including using the IEA’s Net Zero Emissions oil
price curve and the IEA’s Announced Pledge
Scenario (APS) price curve.
The audit procedures were performed by our group
engagement team with the assistance of valuation
specialists.
We reported to the Audit
Committee that, based on
our testing performed and
the subsequent adjustments
made by management,
we considered the current
period impairment charge is
fairly stated.
We also reported that
management had
appropriately included costs
for decarbonisation projects
identiied within the Ghana
asset impairment models.
On sensitivity disclosures,
management appropriately
disclosed the impact on the
value of PP&E under the IEA’s
NZE scenario.
Tullow Oil plc Annual Report and Accounts 2023 – 127
Financial statements Supplementary informationStrategic report Corporate governance
e udt mtters contnued
In the prior year, our auditor’s report included key audit
matters in relation to the Fair valuation of additional interest
acquired in Ghana assets and Impairment of Investment in
subsidiaries. Since the acquisition was completed in 2022,
the fair valuation of additional interest acquired in Ghana
assets has not been considered as a key audit matter in
the current year. Furthermore, Impairment of investment in
subsidiaries was identiied as a key audit matter following
identiication of a prior year error in calculating the
recoverable value of investments. In the current year, this
has not been identiied as a key audit matter as no similar
error was identiied, resulting in a reduction in executive
involvement and lower allocation of resources.
Our pplcton of mterlt
We apply the concept of materiality in planning and
performing the audit, in evaluating the eect of identiied
misstatements on the audit and in forming our audit opinion.
Mterlt
The magnitude of an omission or misstatement that,
individually or in the aggregate, could reasonably be
expected to inluence the economic decisions of the users
of the inancial statements. Materiality provides a basis for
determining the nature and extent of our audit procedures.
We determined materiality for the Group to be $29.4 million
(2022: $26.2 million), which is 2.6% (2022: 2.5%) of Adjusted
EBITDAX. Our key criterion in determining materiality remains
our perception of the needs of Tullow’s stakeholders. We
consider which earnings, activity or capital-based measure
aligns best with the expectations of the users of Tullow’s
inancial statements. In doing so, we apply a ‘reasonable
investor perspective’, which relects our understanding of
the common inancial information needs of the members of
Tullow as a group. We believe that Adjusted EBITDAX provides
us with the most appropriate measure upon which to calculate
materiality as it represents a key performance indicator used
by Tullow’s investors.
We have excluded non-recurring items such as impairments
of E&E assets and producing oil & gas assets, non-cash
movements in provisions and gain on bond buyback to
ensure we are using a consistent measure representative of
the underlying business. The non-recurring items excluded in
2023 were impairment of E&E assets ($27 million), impairment
of oil and gas assets ($401 million) oset by non-cash
movement in provisions ($22 million) and gain on bond
buyback ($86 million).
For 2023, we have not used a normalised measure based
on our observations of the current year oil prices and
analysis of forecast price curves and noted that oil price
volatility caused by the pandemic and the outbreak of
war in Ukraine 2023 has reduced. Consequently, we have
ceased normalising Adjusted EBITDAX in the current year.
We determined materiality for the Parent Company
to be $36.0 million (2022: $28.2 million), which is 1.4%
(2022:1.4%) of Net Assets. The basis for calculating Parent
Company materiality has not changed since the prior year.
During the course of our audit, we reassessed initial
materiality and concluded that the Group’s actual
performance in 2023 did not aect our initial materiality.
As such, our materiality was unchanged from planning.
Performnce mterlt
The application of materiality at the individual account
or balance level. It is set at an amount to reduce to an
appropriately low level the probability that the aggregate
of uncorrected and undetected misstatements exceeds
materiality.
On the basis of our risk assessments, together with our
assessment of the Group’s overall control environment,
our judgement was that performance materiality was 50%
(2023: 50%) of our planning materiality, namely $14.7m
(2022: $13.1m). We have set performance materiality at
this percentage due to our assessment of the nature,
number and impact of the adjusted and unadjusted audit
dierences identiied in 2022 audit.
Audit work at component locations for the purpose
of obtaining audit coverage over signiicant inancial
statement accounts is undertaken based on a percentage
of total performance materiality. The performance
materiality set for each component is based on the relative
scale and risk of the component to the Group as a whole
and our assessment of the risk of misstatement at that
component. In the current year, the range of performance
materiality allocated to components was $3.7m to $14.7m
(2022: $2.6m to $13.1m).
Reportn threshold
An amount below which identiied misstatements are
considered as being clearly trivial.
We agreed with the Audit Committee that we would
report to them all uncorrected audit dierences in excess
of $1.5m (2022: $1.2m), which is set at 5% of planning
materiality, as well as dierences below that threshold that,
in our view, warranted reporting on qualitative grounds.
We evaluate any uncorrected misstatements against both
the quantitative measures of materiality discussed above
and in light of other relevant qualitative considerations in
forming our opinion.
Other nformton
The other information comprises the information included
in the annual report set out on pages 1 to 118 and 189 to
193, including Strategic report, Corporate Governance
and Supplementary information, other than the inancial
statements and our auditor’s report thereon. The directors
are responsible for the other information contained within
the annual report.
128 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Independent udtor’s report to the members of Tullow Ol plc contnued
Other nformton contnued
Our opinion on the inancial statements does not cover
the other information and, except to the extent otherwise
explicitly stated in this report, we do not express any form
of assurance conclusion thereon.
Our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the inancial statements
or our knowledge obtained in the course of the audit
or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent
material misstatements, we are required to determine
whether this gives rise to a material misstatement in the
inancial statements themselves. If, based on the work
we have performed, we conclude that there is a material
misstatement of the other information, we are required to
report that fact.
We have nothing to report in this regard.
Opnons on other mtters prescrbed b
the Compnes Act 2006
In our opinion, the part of the directors’ remuneration
report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the
course of the audit:
• the information given in the strategic report and the
directors’ report for the inancial year for which the
inancial statements are prepared is consistent with the
inancial statements; and
• the strategic report and the directors’ report have been
prepared in accordance with applicable legal
requirements.
Mtters on whch we re requred to report
b excepton
In the light of the knowledge and understanding of the group
and the parent company and its environment obtained
in the course of the audit, we have not identiied material
misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters
in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept by the
parent company, or returns adequate for our audit have
not been received from branches not visited by us; or
• the parent company inancial statements and the part
of the Directors’ Remuneration Report to be audited
are not in agreement with the accounting records and
returns; or
• certain disclosures of directors’ remuneration speciied
by law are not made; or
• we have not received all the information and
explanations we require for our audit.
Corporte Governnce Sttement
We have reviewed the directors’ statement in relation to
going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the group
and company’s compliance with the provisions of the UK
Corporate Governance Code speciied for our review by
the Listing Rules.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements of the
Corporate Governance Statement is materially consistent
with the inancial statements or our knowledge obtained
during the audit:
• Directors’ statement with regards to the appropriateness
of adopting the going concern basis of accounting
and any material uncertainties identiied set out on
pages 63 to 64;
• Directors’ explanation as to its assessment of the
company’s prospects, the period this assessment
covers and why the period is appropriate set out on
pages 57 to 58;
• Director’s statement on whether it has a reasonable
expectation that the group will be able to continue in
operation and meets its liabilities set out on page 57;
• Directors’ statement on fair, balanced and
understandable set out on page 118;
• Board’s conirmation that it has carried out a robust
assessment of the emerging and principal risks set out
on page 86;
• The section of the annual report that describes the
review of eectiveness of risk management and internal
control systems set out on pages 85 and 86; and;
• The section describing the work of the audit committee
set out on page 82
Responsbltes of drectors
As explained more fully in the directors’ responsibilities
statement set out on page 118, the directors are
responsible for the preparation of the inancial statements
and for being satisied that they give a true and fair view,
and for such internal control as the directors determine
is necessary to enable the preparation of inancial
statements that are free from material misstatement,
whether due to fraud or error.
In preparing the inancial statements, the directors are
responsible for assessing the group and parent company’s
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the
going concern basis of accounting unless the directors
either intend to liquidate the group or the parent company
or to cease operations, or have no realistic alternative
but to do so.
Tullow Oil plc Annual Report and Accounts 2023 – 129
Financial statements Supplementary informationStrategic report Corporate governance
Audtor’s responsbltes for the udt of
the fnncl sttements
Our objectives are to obtain reasonable assurance about
whether the inancial statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in
the aggregate, they could reasonably be expected to
inluence the economic decisions of users taken on the
basis of these inancial statements.
Explnton s to wht extent the udt ws
consdered cpble of detectn rreulrtes,
ncludn frud
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect irregularities, including fraud. The risk
of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from
error, as fraud may involve deliberate concealment by,
for example, forgery or intentional misrepresentations, or
through collusion. The extent to which our procedures
are capable of detecting irregularities, including fraud is
detailed below.
However, the primary responsibility for the prevention
and detection of fraud rests with both those charged with
governance of the company and management.
• We obtained an understanding of the legal and
regulatory frameworks that are applicable to the group
and determined that the most signiicant are those
that related to the reporting framework (UK-adopted
IAS, IFRS, Companies Act 2006, the UK Corporate
Governance Code and Listing Rules of the UK Listing
Authority) and the relevant tax compliance regulations
in the jurisdictions in which Tullow operates. In addition,
we concluded that there are certain signiicant
laws and regulations that may have an eect on the
determination of the amounts and disclosures in the
inancial statements, relating to health and safety,
employee matters, environmental matters and bribery
and corruption practices.
• We understood how Tullow Oil plc is complying with
those frameworks by making inquiries of management,
internal audit and those responsible for legal and
compliance procedures. We corroborated our enquiries
through review of board minutes, papers provided to
Audit committees and correspondence received from
regulatory bodies.
• We assessed the susceptibility of the group’s inancial
statements to material misstatement, including how
fraud might occur by considering the degree of
incentive, opportunity and rationalisation that may
exist within the group. We did this by meeting with
management to gain an understanding of where
there was susceptibility to fraud, how the company is
complying with international tax laws and regulations,
procedures in place to address the risk of bribery and
corruption in high-risk countries. We also performed
procedures around setting key performance indicators
and, alongside our forensics specialists, assessed
whistleblowing incidences for those with a potential
inancial reporting impact.
• Based on this understanding we designed our audit
procedures to identify non-compliance with such laws
and regulations. Our procedures involved journal entry
testing, with a focus on journals meeting deined risk
criteria based on our understanding of the business;
inquiries with legal counsel, group management, internal
audit and all full and speciic scope management; review
of volume and nature of whistleblowing complaints
received during the year; review of legal expense
accounts; and performance of adverse press searches.
• Based on the results of our audit procedures, and where
instances of potential non-compliance were identiied,
we consulted the relevant EY local teams andEY
specialists who aided us in determining suicient,
andexecuting appropriate, procedures to respond
totheriskidentiied.
A further description of our responsibilities for
the audit of the inancial statements is located
on the Financial Reporting Council’s website at
https://www.frc.org.uk/auditorsresponsibilities.
Thisdescription forms part of our auditor’s report.
Other mtters we re requred to ddress
• Following the recommendation from the audit
committee we were appointed by the company on 21
July 2020 to audit the inancial statements for the year
ending 31 December 2020 and subsequent inancial
periods. The period of total uninterrupted engagement
including previous renewals and reappointments is 4
years, covering the years ending 2020 to 2023.
• The audit opinion is consistent with the additional report
to the audit committee.
Use of our report
This report is made solely to the company’s members,
as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company’s
members those matters we are required to state to them in
an auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the
company’s members as a body, for our audit work, for this
report, or for the opinions we have formed.
Ernst & Young LLP, Statutory Auditor
London
5 March 2024
130 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Group ncome sttement
Year ended 31 December 2023
| 2023 | 2022 | ||
| Notes | $m | $m | |
| Continuing activities | |||
Revenue | 2 | ||
Cost of sales | 4 | ( | ( |
Gross proit | |||
Administrative expenses | 4 | ( | ( |
Gain on bargain purchase | |||
Other gains | |||
Exploration costs written o | 8 | ( | ( |
Impairment of property, plant and equipment, net | 9 | ( | ( |
Provisions reversal/(expense) | 4 | ( | |
Operating proit | |||
(Loss)/gain on hedging instruments | ( | ||
Gain on bond buyback | 16 | ||
Finance income | 5 | ||
Finance costs | 5 | ( | ( |
Proit from continuing activities before tax | |||
Income tax expense | 6 | ( | ( |
(Loss)/proit for the year from continuing activities | ( | ||
| Attributable to: | |||
Owners of the Company | ( | ||
(Loss)/earnings per ordinary share from continuing activities | 7 | ¢ | ¢ |
Basic | ( | ||
Diluted | ( |
Group sttement of comprehensve ncome nd expense
Year ended 31 December 2023
| 2023 | 2022 | ||
| Notes | $m | $m | |
(Loss)/ proit for the year | ( | ||
| Items that may be reclassiied to the income statement in subsequent periods | |||
| Cash low hedges | |||
Gains/(losses) arising in the year | 17 | ( | |
Gains arising in the year – time value | 17 | ||
Reclassiication adjustments for items included in proit on realisation | 17 | ||
Reclassiication adjustments for items included in loss on realisation – time value | 17 | ||
Exchange dierences on translation of foreign operations | ( | ||
Other comprehensive income/(expense) | ( | ||
Tax relating to components of other comprehensive income/(expense) | |||
Net other comprehensive income/(expense) for the year | ( | ||
Total comprehensive income for the year | |||
| Attributable to: | |||
Owners of the Company |
Tullow Oil plc Annual Report and Accounts 2023 – 131
Financial statements Supplementary informationStrategic report Corporate governance
Group blnce sheet
As at 31 December 2023
| 2023 | 2022 | ||
| Notes | $m | $m | |
| ASSETS | |||
| Non-current assets | |||
Intangible exploration and evaluation assets | 8 | ||
Property, plant and equipment | 9 | ||
Other non-current assets | 10 | ||
Deferred tax assets | 20 | ||
| Current assets | |||
Inventories | 11 | ||
Trade receivables | 12 | ||
Other current assets | 10 | ||
Current tax assets | 6 | ||
Cash and cash equivalents | 13 | ||
Assets classiied as held for sale | 14 | ||
Total assets | |||
| LIABILITIES | |||
| Current liabilities | |||
Trade and other payables | 15 | ( | ( |
Borrowings | 16 | ( | ( |
Provisions | 19 | ( | ( |
Current tax liabilities | 6 | ( | ( |
Derivative inancial instruments | 17 | ( | ( |
Liabilities associated with assets classiied as held for sale | 14 | ( | |
( | ( | ||
| Non-current liabilities | |||
Trade and other payables | 15 | ( | ( |
Borrowings | 16 | ( | ( |
Provisions | 19 | ( | ( |
Deferred tax liabilities | 20 | ( | ( |
Derivative inancial instruments | 17 | ( | |
( | ( | ||
Total liabilities | ( | ( | |
Net liabilities | ( | ( | |
| EQUITY | |||
Called-up share capital | 21 | ||
Share premium | 21 | ||
Foreign currency translation reserve | ( | ( | |
Hedge reserve | 17 | ( | ( |
Hedge reserve – time value | 17 | ( | ( |
Merger reserve | |||
Retained earnings | ( | ( | |
Equity attributable to equity holders of the Company | ( | ( | |
Total equity | ( | ( |
132 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Group sttement of chnes n equt
Year ended 31 December 2023
| Foreign | Hedge | ||||||||
| currency | reserve | ||||||||
| Share | Share | translation | Hedge | – time | Merger | Retained | Total | ||
| capital | premium | reserve 1 | reserve 2 | value | reserve | earnings | equity | ||
| Notes | $m | $m | $m | $m | $m | $m | $m | $m | |
At 1 January 2022 | ( | ( | ( | ( | ( | ||||
Proit for the year | |||||||||
Hedges, net of tax | 17 | ( | ( | ||||||
| Currency translation | |||||||||
adjustments | |||||||||
| Exercise of employee | |||||||||
share options | 21 | ( | |||||||
| Share-based | |||||||||
payment charges | 22 | ||||||||
At 1 January 2023 | ( | ( | ( | ( | ( | ||||
Loss for the year | ( | ( | |||||||
Hedges, net of tax | 17 | ||||||||
| Currency translation | |||||||||
adjustments | ( | ( | |||||||
| Exercise of employee | |||||||||
share options | 21 | ( | |||||||
| Share-based | |||||||||
payment charges | 22 | ||||||||
At 31 December 2023 | ( | ( | ( | ( | ( |
2
1. The foreign currency translation reserve represents exchange gains and losses arising on translation of foreign currency subsidiaries, monetary items
receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur, which form part of the net investment in a
foreign operation.
2. The hedge reserve represents gains and losses on derivatives classiied as eective cash low hedges.
Tullow Oil plc Annual Report and Accounts 2023 – 133
Financial statements Supplementary informationStrategic report Corporate governance
Group csh flow sttement
Year ended 31 December 2023
| 2023 | 2022 | ||
| Notes | $m | $m | |
| Cash lows from operating activities | |||
Proit from continuing activities before tax | |||
| Adjustments for: | |||
Depreciation, depletion and amortisation | 9 | ||
Gain on bargain purchase | ( | ||
Other gains | ( | ( | |
Taxes paid in kind | 6 | ( | ( |
Exploration costs written o | 8 | ||
Impairment of property, plant and equipment, net | 9 | ||
Provisions (reversal)/ expense | ( | ||
Payment for provisions | 19 | ( | ( |
Decommissioning expenditure | ( | ( | |
Share-based payment charge | 22 | ||
Loss/(gain) on hedging instruments | 17 | ( | |
Gain on bond buyback | 16 | ( | |
Finance income | 5 | ( | ( |
Finance costs | 5 | ||
Operating cash low before working capital movements | |||
(Increase)/decrease in trade and other receivables | ( | ||
Decrease/(increase) in inventories | ( | ||
Increase/(decrease) in trade payables | ( | ||
Cash generated from operating activities | |||
Income taxes paid | ( | ( | |
Net cash from operating activities | |||
| Cash lows from investing activities | |||
Proceeds from disposals | |||
Purchase of additional interest in joint operation | ( | ||
Purchase of intangible exploration and evaluation assets | 27 | ( | ( |
Purchase of property, plant and equipment | 27 | ( | ( |
Interest received | |||
Net cash used in investing activities | ( | ( | |
| Cash lows from inancing activities | |||
Debt arrangement fees | ( | ||
Repayment of borrowings | 27 | ( | ( |
Drawdown of borrowings | 27 | ||
Payment of obligations under leases | ( | ( | |
Finance costs paid | ( | ( | |
Net cash used in inancing activities | ( | ( | |
Net (decrease)/increase in cash and cash equivalents | ( | ||
Cash and cash equivalents at beginning of year | |||
Foreign exchange loss | ( | ( | |
Cash and cash equivalents at end of year | 13 |
134 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Tullow Oil plc Annual Report and Accounts 2023 – 135
Financial statements Supplementary informationStrategic report Corporate governance
(d) Bss of preprton contnued
Lqudt rs mnement nd on concern
contnued
(e) Bss of consoldton contnued
136 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Accountn polces contnued
Year ended 31 December 2023
() Revenue from contrcts wth
customers contnued
Tullow Oil plc Annual Report and Accounts 2023 – 137
Financial statements Supplementary informationStrategic report Corporate governance
() Foren currences contnued
(l) Intnble, explorton nd evluton
ssets nd ol nd s ssets contnued
138 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Accountn polces contnued
Year ended 31 December 2023
(o) Imprment of propert, plnt
ndequpment contnued
Tullow Oil plc Annual Report and Accounts 2023 – 139
Financial statements Supplementary informationStrategic report Corporate governance
(v) Dervtve fnncl nstruments
contnued
(v) Dervtve fnncl nstruments
contnued
140 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Accountn polces contnued
Year ended 31 December 2023
(w) Leses contnued
Lessee ccountn contnued
(x) Shre-bsed pments contnued
Tullow Oil plc Annual Report and Accounts 2023 – 141
Financial statements Supplementary informationStrategic report Corporate governance
() Fnncl ssets contnued
142 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Accountn polces contnued
Year ended 31 December 2023
(e) Crtcl ccountn udements
contnued
Tullow Oil plc Annual Report and Accounts 2023 – 143
Financial statements Supplementary informationStrategic report Corporate governance
(f) e sources of estmton
uncertnt contnued
Crrn vlue of propert, plnt nd equpment
(note 9) contnued
(f) e sources of estmton
uncertnt contnued
Lese ccountn (note 18) contnued
Determination of the lease term contnued
144 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Accountn polces contnued
Year ended 31 December 2023
(f) e sources of estmton
uncertnt contnued
Uncertn tx tretments contnued
(f) e sources of estmton
uncertnt contnued
Tullow Oil plc Annual Report and Accounts 2023 – 145
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements
Year ended 31 December 2023
The information reported to the Group’s Chief Executive O xecutive Officer for the purposes of resource allocation and assessment
of segment performance is focused on four Business Units – Ghana, Non-operated producing assets including Uganda
and decommissioning assets, Kenya and Exploration. Therefore, the Group’s reportable segments under IFRS 8 are
Ghana, Non-operated, Kenya and Exploration.
The following tables present revenue, loss and certain asset and liability information regarding the Group’s reportable
business segments for the years ended 31 December 2023 and 31 December 2022.
| Non- | ||||||
| Ghana | Operated | Kenya | Exploration | Corporate | Total | |
| $m | $m | $m | $m | $m | $m | |
| 2023 | ||||||
Sales revenue by origin | 1,311.4 | 461.8 | – | – | (139.1) | 1,634.1 |
| Segment result | 408.2 | 114.0 | (17.9) | (9.9) | (164.6) | 329.8 |
Provisions reversal | 22.0 | |||||
Other gains | 0.2 | |||||
| Unallocated corporate expenses | (56.1) | |||||
Operatin | 295.9 | |||||
Loss on hedging instruments | (0.4) | |||||
Gain on bond buyback | 86.0 | |||||
Finance income | 44.0 | |||||
Finance costs | (329.6) | |||||
95.9 | ||||||
Income tax expense | (205.5) | |||||
Loss after tax | (109.6) | |||||
Total assets | 3,529.7 | 200.9 | 253.3 | 48.5 | 426.2 | 4,458.6 |
| Total liabilities | (2,231.6) | (355.1) | (10.3) | (2.9) | (2,218.1) | (4,818.0) |
| Other segment information | ||||||
| Capital expenditure: | ||||||
Property, plant and equipment | 413.7 | 85.9 | (2.2) | – | 2.1 | 499.5 |
Intangible exploration and evaluation assets | 0.2 | 1.6 | 7.5 | 16.1 | – | 25.4 |
Depletion, depreciation and amortisation | (387.7) | (44.1) | 0.6 | – | (5.4) | (436.6) |
Impairment of property, plant and equipment, net | (301.2) | (97.9) | – | – | (9.0) | (408.1) |
Exploration costs writ | (0.2) | 0.9 | (17.9) | (9.8) | – | (27.0) |
1
2
3
1. Segment result is a non-IFRS measure which includes gross pro s profit, exploration costs written o a ten off and impairment of property, plant and equipment. See
reconciliation below.
2. Unallocated expenditure includes amounts of a corporate nature and not specii fically attributable to a geographic area.
3. Total liabilities – Corporate comprise the Group’s external debt and other non-attributable liabilities.
| 2023 | 2022 | |
| $m | $m | |
Segment result | 329.8 | 589.2 |
| Add back: | ||
Exploration costs writ | 27.0 | 105.2 |
Impairment of property, plant and equipment | 408.1 | 391.2 |
Gros | 764.9 | 1,085.6 |
146 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 1 Sementl reportn contnued
All sales are made to external customers. Included in revenue arising from Ghana and Non-Operated segments are
revenues of approximately $462.3 million, $326.9 million and $181.9 million relating to the Group’s customers who each
contribute more than 10% of total sales revenue (2022: $696.9 million, $566.1 million, $310.9 million and $242.3 million).
As the sales of oil and gas are made on global markets and are highly liquid, the Group does not place reliance on the
largest customers mentioned above. Payment terms are typically 30 days from the bill of lading.
During 2023, Tullow has entered into an oil marketing contract under which it will sell its crude oil entitlements to
Glencore Energy UK Limited. The contract expires in 2028.
| Non- | ||||||
| Ghana | Operated | Kenya | Exploration | Corporate | Total | |
| $m | $m | $m | $m | $m | $m | |
| 2022 | ||||||
Sales revenue by origin | 1,578.5 | 524.0 | – | – | (319.4) | 1,783.1 |
| Segment result | 692.5 | 337.3 | (0.5) | (102.6) | (337.5) | 589.2 |
Provisions expense | (4.1) | |||||
Gain on bargain purchase | 196.8 | |||||
Other gains | 3.1 | |||||
| Unallocated corporate expenses | (51.1) | |||||
Operatin | 733.9 | |||||
Gain on hedging instruments | 0.8 | |||||
Finance income | 42.9 | |||||
Finance costs | (335.5) | |||||
442.1 | ||||||
Income tax expense | (393.0) | |||||
49.1 | ||||||
Total assets | 3,827.7 | 380.6 | 265.6 | 46.0 | 519.7 | 5,039.6 |
| Total liabilities | (2,220.5) | (401.6) | (14.1) | (4.6) | (2,858.3) | (5,499.1) |
| Other segment information | ||||||
| Capital expenditure: | ||||||
Property, plant and equipment | 342.9 | 26.9 | – | – | 0.9 | 370.7 |
Intangible exploration and evaluation assets | 0.9 | (1.7) | (2.1) | 42.1 | – | 39.2 |
Depletion, depreciation and amortisation | (362.1) | (52.7) | (1.3) | – | (9.7) | (425.8) |
Impairment of property, plant and equipment, net | (380.6) | (10.6) | – | – | – | (391.2) |
Exploration costs writ | (0.9) | 1.8 | (0.5) | (105.6) | – | (105.2) |
1
2
3
1. Segment result is a non-IFRS measure which includes gross pro s profit, exploration costs written o a ten off and impairment of property, plant and equipment. See
reconciliation below.
2. Unallocated expenditure includes amounts of a corporate nature and not specii fically attributable to a geographic area.
3. Total liabilities – Corporate comprise the Group’s external debt and other non-attributable liabilities.
Tullow Oil plc Annual Report and Accounts 2023 – 147
Financial statements Supplementary informationStrategic report Corporate governance
Note 1 Sementl reportn contnued
| Non- | Non- | |||
| Sales | Sales | current | current | |
| revenue | revenue | assets 1 | assets 1 | |
| 2023 | 2022 | 2023 | 2022 | |
| Sales revenue and non-current assets by origin | $m | $m | $m | $m |
Ghana | 1,311.4 | 1,578.5 | 2,771.0 | 3,087.4 |
Total Ghana | 1,311.4 | 1,578.5 | 2,771.0 | 3,087.4 |
Kenya | – | – | 250.0 | 258.5 |
Total Kenya | – | – | 250.0 | 258.5 |
Argentina | – | – | 36.4 | 33.6 |
Côte d’Ivoire | – | – | 5.8 | 2.4 |
Total Exploration | – | – | 42.2 | 36.0 |
Gabon | 419.5 | 477.0 | 82.8 | 132.6 |
Côte d’Ivoire | 42.3 | 47.0 | 0.4 | 59.2 |
Total Non-Operated | 461.8 | 524.0 | 83.2 | 191.8 |
Corporate | (139.1) | (319.4) | 12.0 | 23.4 |
Total | 1,634.1 | 1,783.1 | 3,158.4 | 3,597.1 |
| 2023 | 2022 | |
| $m | $m | |
| Revenue from contracts with customers | ||
Revenue from crude oil sales | 1,744.6 | 2,102.5 |
Revenue from gas sales | 28.6 | – |
Total revenue from contracts with customers | 1,773.2 | 2,102.5 |
Loss on realisation of ca | (139.1) | (319.4) |
Total revenue | 1,634.1 | 1,783.1 |
The average annual number of employees employed by the Group worldwide was:
| 2023 | 2022 | |
| Number | Number | |
Administration | 187 | 182 |
Technical | 206 | 194 |
Total | 393 | 376 |
148 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 3 Stff costs contnued
| 2023 | 2022 | |
| $m | $m | |
Salaries | 71.5 | 66.3 |
Social security costs | 7.1 | 7.0 |
Pension costs | 6.3 | 5.3 |
Redundancy costs | – | 0.1 |
T | 84.9 | 78.7 |
A proportion of the Group’s sta c s staff costs shown above is recharged to the Group’s Joint Venture Partners, a proportion is
allocated tooperating costs a ated to operating costs and a proportion is capitalised into the cost of ed into the cost of fixed assets under the Group’s accounting
policy for exploration, evaluation and production assets with the remainder classii sified as an administrative overhead cost
in the income statement. Then nt. The netsta co et staff costs recognised in the income statement were $16.5 million (2022: $10.5 million).
The Group operates deined tes defined contribution pension schemes for sta and Ex ff and Executive Directors. The contributions are
payable to external funds which are administered by independent trustees. Contributions during the year amounted to
$6.3 million (2022: $5.3millio .3 million).
Details of Directors’ remuneration, Directors’ transactions and Directors’ interests are set out in the part of the Directors’
Remuneration Report described as having been audited, which forms part of these Financial Statements.
| 2023 | 2022 | ||
| Notes | $m | $m | |
| Operatin | |||
Operating costs | 292.9 | 266.5 | |
| Depletion and amortisation of oil and gas and leased assets | 9 | 430.8 | 410.7 |
Overlift, underlift and oil stock movements | 109.3 | (46.3) | |
Royalties | 33.9 | 61.7 | |
Share-based payment charge included in cost of sales | 22 | 0.4 | 0.4 |
Other cost of sales | 1.9 | 4.4 | |
Total cost of sales | 869.2 | 697.5 | |
Share-based payment charge included in administrative expenses | 22 | 5.6 | 5.4 |
| Depreciation of othe | 9 | 5.8 | 15.1 |
Other administrative costs | 44.7 | 30.5 | |
Total administrative expenses | 56.1 | 51.0 | |
| Provisions (reversal)/ expense | (22.0) | 4.2 | |
| Fees payable to the Company’s auditor for: | |||
The audit of the Company’s annual accounts | 2.0 | 2.1 | |
The audit of the Company’s subsidiaries pursuant to legislation | 0.5 | 0.6 | |
Total audit services | 2.5 | 2.7 | |
| Non-audit services: | |||
Audit-related assurance services – half-year review | 0.5 | 0.5 | |
Corpo | – | 1.0 | |
Total non-audit services | 0.5 | 1.5 | |
Total | 3.0 | 4.2 |
Tullow Oil plc Annual Report and Accounts 2023 – 149
Financial statements Supplementary informationStrategic report Corporate governance
Note 4 Other costs contnued
| 2023 | 2022 | ||
| Notes | $m | $m | |
Interest on bank overdrafts and borrowings | 237.0 | 250.4 | |
Interest on obligations under leases | 18 | 78.6 | 76.4 |
Total borrowing costs | 315.6 | 326.8 | |
Finance and arrangement fees | 1.9 | 0.3 | |
Other interest expense | 2.0 | 2.4 | |
Unwinding of discount on decommissioning provisions | 19 | 10.1 | 6.0 |
Tot | 329.6 | 335.5 | |
Interest income on amounts due from Joint Venture Partners for leases | 18 | (30.1) | (29.6) |
Oth | (13.9) | (13.3) | |
T | (44.0) | (42.9) | |
285.6 | 292.6 |
| 2023 | 2022 | ||
| Notes | $m | $m | |
| Current tax on p | |||
UK corporation tax | (1.9) | (11.8) | |
Foreign tax | 322.2 | 321.0 | |
Taxes paid in kind under production sharing contracts | 11.0 | 21.4 | |
Adjustments in respect of prior periods | (10.8) | (3.3) | |
Total corporate tax | 342.1 | 327.3 | |
UK petroleum revenue tax | (0.7) | (2.8) | |
Total current tax | 341.4 | 324.5 | |
| Deferred tax | |||
| Origination and reversal of temporar | |||
UK corporation tax | (22.9) | 11.4 | |
Foreign tax | (106.5) | 54.0 | |
Adjustments in respect of prior periods | (2.8) | (2.9) | |
Total deferred corporate tax | (132.2) | 62.5 | |
Deferred UK petroleum revenue tax | (3.7) | 6.0 | |
Total deferred tax | 20 | (135.9) | 68.5 |
Total income tax expense | 205.5 | 393.0 |
150 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 6 Txton on proft on contnun ctvtes contnued
The tax rate applied to pro ofit on continuing activities in preparing the reconciliation below is the UK corporation tax rate
applicable to the Group’s UK proits, be K profits, being 23.5% (2022: 19%), which is the weighted average rate calculated for FY 2023
taking into account the UK CT rate change ee te change effective from 1 April 2023. The dierence bet fference between the total income tax
expense shown above and the amount calculated by applying the standard rate of UK corporation tax applicable to UK
| 2023 | 2022 | |
| $m | $m | |
95.9 | 442.1 | |
Tax on p | 22.5 | 84.0 |
| E | ||
| Non-deductible exploration expenditure | 3.4 | 0.5 |
| Other non-deductible expenses | 35.4 | 27.8 |
| Net deferred tax asset not recognised | 65.1 | 138.5 |
Utilisation of tax losses not previously recognised | (0.2) | (0.4) |
Adjustment relating to prior years | (2.8) | (6.2) |
Other tax rates applicable outside the UK | 82.4 | 214.6 |
Other income not subject to corporation tax | (0.3) | (0.1) |
Tax impact of acquisition through business combination | – | (65.7) |
Total income tax expense for the year | 205.5 | 393.0 |
a
b,d
c
a. Includes recurring explorations costs written o w ten off where there is no deferred tax impact.
b. Includes impairments.
c. Includes hedging losses and interest expense.
d. Includes movements in provisions in respect of uncertain tax treatments.
The Group’s proit before taxation will continue to arise in juri s profit before taxation will continue to arise in jurisdictions where the eective r re the effective rate of taxation diers from ate of taxation differs from
that in the UK, such as Ghana (35%) and Gabon convention i n convention fields (50%), Gabon PSC ie C fields (35%) and CDI PSC (25%).
Furthermore, there is no tax beneit a efit arising on net interest and hedging expense in the UK. Accordingly, the Group’s tax
charge will continue to vary according to the jurisdictions in which pre-tax proits aris re-tax profits arise.
The Group has tax losses of $4,195.3 million (2022: $4,237.4 million) of which $3,109.9 million are available for oset e for offset
indeinitely and $ finitely and $1,085.4 million in the next 5-7 years against future taxable proits in the co ture taxable profits in the companies in which the losses
arose. Deferred tax assets have not been recognised in respect of losses of $4,165.7 million (2022: $4,128.9 million) as it is
The Group has recognised deferred tax assets of $7.4 million (2022: $35.8 million) in relation to tax losses only to the
extent of anticipated future taxable income or gains in relevant jurisdictions. The Group has suered the s suffered these losses in
either the current or preceding period in the tax jurisdiction to which the deferred tax asset relates. The tax losses can be
carried forward indein d indefinitely.
There are no temporary dierence y differences relating to unremitted earnings of overseas subsidiaries as the Group is able to
control the timing of the reversal of these temporary dierenc y differences and it is probable that they will not reverse in the
foreseeable future.
T ax reltn to components of other comprehensve ncome x relating to components of other comprehensive income
During 2023 nil tax expense (2022: nil tax expense) has been recognised through other comprehensive income.
The Group operates in the UK, which has enacted new legislation to implement the global minimum top-up tax. However,
since the newly enacted tax legislation is only eective fr ffective from 1 January 2024, there is no current tax impact for the year
ended 31 December 2023. The Group is not expecting to pay top-up taxes in the future because all jurisdictions in
which the Group operates are above 15% and management is not currently aware of any circumstances under which this
might change.
The Group has applied a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax and
accounts for it as a current tax when it is incurred.
Tullow Oil plc Annual Report and Accounts 2023 – 151
Financial statements Supplementary informationStrategic report Corporate governance
Note 7 (Loss . (Loss)/ernns per ordnr earnings per ordinar shre y share
Basic (loss)/earnings per ordinary share amounts are calculated by dividing net (loss)/ proit for the year attributab rofit for the year attributable to
ordinary equity holders ofthe Parent by the weighted av rs of the Parent by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per ordinary share amounts are calculated by dividing net (loss)/ pro ofit for the year attributable to
ordinary equity holders ofthe Parent by the weighted av rs of the Parent by the weighted average number of ordinary shares outstanding during the year
plus the weighted average number of dilutive ordinary shares that would be issued if employee and other share options
were converted into ordinary shares.
| 2023 | 2022 | |
| $m | $m | |
| (Loss)/ proit for the year | ||
Net (loss)/ | (109.6) | 49.1 |
– | – | |
Diluted net (loss)/ earnings attributable to equity shareholders | (109.6) | 49.1 |
| 2023 | 2022 | |
| Number | Number | |
| Number of shares | ||
Basic weighted average number of shares | 1,447,121,945 | 1,437,099,966 |
Dilutive potential ordinary shares | – | 48,375,409 |
Diluted weighted average number of shares | 1,447,121,945 | 1,485,475,375 |
| 2023 | 2022 | |
| $m | $m | |
At 1 January | 288.6 | 354.6 |
Additions | 25.4 | 39.2 |
Amounts written o | (27.0) | (105.2) |
At 31 December | 287.0 | 288.6 |
| 2023 | ||||
| 2023 | Remaining | |||
| Rationale for | recoverable | |||
| 2023 | (back) | amount | ||
Country | CGU | write-o | $m | $m |
Guyana | Kanuku | a | 1.7 | – |
Guyana | Orinduik | a | 0.7 | – |
Côte d’Ivoire | Block 524 | a | 3.3 | – |
Kenya | Blocks 10BB and 13T | b, c | 17.9 | 242.2 |
New Ventures | Various | d | 4.1 | – |
Uganda | Exploration areas 1, 1A, 2 and 3A | e | (4.3) | – |
Gabon | DE8 | f | 3.4 | – |
Other | Various | 0.2 | – | |
T | 27.0 | – |
152 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 8 Intnble explorton nd evluton ssets contnued
Tullow Oil plc Annual Report and Accounts 2023 – 153
Financial statements Supplementary informationStrategic report Corporate governance
Note 8 Intnble explorton nd evluton ssets contnued
| 2022 | ||||
| Remaining | ||||
| Rationale for | 2022 | recoverable | ||
| 2022 | write-o | amount | ||
Country | CGU | write-o | $m | $m |
Guyana | Kanuku | a, b | 75.3 | – |
Guyana | Orinduik | b | 22.4 | – |
Côte d’Ivoire | Block 524 | c | 3.1 | – |
New Ventures | Various | d | 3.0 | – |
Other | Various | 1.4 | – | |
T | 105.2 | – |
Note 9 Proper . Propert y, plnt nd equpment , plant and equipment
| 2023 | 2023 | 2023 | 2022 | 2022 | 2022 | ||||
| Oil | Other | Right | Oil | Other | Right | ||||
| and gas | of use | 2023 | and gas | of use | 2022 | ||||
| assets | assets | assets | Total | assets | assets | assets | Total | ||
| Notes | $m | $m | $m | $m | $m | $m | $m | $m | |
| Cost | |||||||||
At 1 January | 11,182.6 | 30.0 | 1,196.8 | 12,409.4 | 10,521.7 | 69.5 | 1,091.7 | 11,682.9 | |
Additions | 1 | 416.1 | 2.3 | 81.1 | 499.5 | 305.2 | 2.0 | 63.5 | 370.7 |
| Acquisitions | – | – | – | – | 473.2 | – | – | 473.2 | |
| Transfer | – | – | – | – | – | – | 86.6 | 86.6 | |
| Transfer to assets | |||||||||
held for sale | 14 | (302.8) | – | – | (302.8) | – | – | – | – |
Asset retirement | (67.7) | (11.0) | (10.6) | (89.3) | – | (38.1) | (41.7) | (79.8) | |
| Currency translation | |||||||||
adjustments | 53.9 | 0.6 | 1.5 | 56.0 | (117.5) | (3.4) | (3.3) | (124.2) | |
At 31 December | 11,282.1 | 21.9 | 1,268.8 | 12,572.8 | 11,182.6 | 30.0 | 1,196.8 | 12,409.4 | |
Depreciation, depletion, amortisation and impairment | |||||||||
At 1 January | (8,888.4) | (24.4) | (515.2) | (9,428.0) | (8,263.7) | (53.8) | (450.8) | (8,768.3) | |
Charge for the year | 4 | (351.6) | (3.6) | (81.4) | (436.6) | (353.7) | (11.2) | (60.9) | (425.8) |
Impairment loss | (399.1) | – | (9.0) | (408.1) | (391.2) | – | – | (391.2) | |
Capitalised depreciation | – | – | (49.3) | (49.3) | – | – | (46.1) | (46.1) | |
| Transfer to assets | |||||||||
held for sale | 14 | 247.6 | – | – | 247.6 | – | – | – | – |
Asset retirement | 67.7 | 11.0 | 10.6 | 89.3 | – | 38.1 | 41.7 | 79.8 | |
| Currency translation | |||||||||
adjustments | (53.9) | (0.5) | (0.5) | (54.9) | 120.2 | 2.5 | 0.9 | 123.6 | |
At 31 December | (9,377.7) | (17.5) | (644.8) | (10,040.0) | (8,888.4) | (24.4) | (515.2) | (9,428.0) | |
Net book value at 31 December | 1,904.4 | 4.4 | 624.0 | 2,532.8 | 2,294.2 | 5.6 | 681.6 | 2,981.4 |
1
1
1. This relates to an acquisition through business combination discussed in note 15 of the 2022 Annual Report and Accounts.
The currency translation adjustments arose due to the movement against the Group’s presentational currency, USD, of
the Group’s UK assets, which have a functional currency of GBP.
154 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 9 Propert, plnt nd equpment contnued
During 2023 and 2022 the Group applied the following nominal oil price assumptions for impairment assessments:
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 onwards | |
2023 | $78/bbl | $75/bbl | $75/bbl | $75/bbl | $75/bbl | $75/bbl in |
2022 | $84/bbl | $79/bbl | $70/bbl | $70/bbl | $70/bbl | $70/bbl i |
| 2023 | ||||
| Remaining | ||||
| Trigger for | 2023 | Pre-tax | recoverable | |
| 2023 | Impairment | discount rate | amount g | |
| impairment | $m | assumption | $m | |
Espoir (Côte d’Ivoire) | a, c | 53.5 | 14% | 0.4 |
TEN (Ghana) | b, c | 301.2 | 14% | 528.3 |
Mauritania | d | 27.9 | n/a | – |
UK CGU | d, e | 16.5 | n/a | – |
UK Corporate | f | 9.0 | n/a | – |
Impairment | 408.1 |
a. Increase in production and development costs.
b. Revision of value based on revisions to reserves.
c. Revision of short, medium and long-term oil price assumptions.
d. Change to decommissioning estimate.
e. The he fields in the UK are grouped into one CGU as all ll fields within those countries share critical gas infrastructure.
f. Fully impaired right-of-use asset relating to a vacant oi ffice space.
g. The remaining recoverable amount of the asset is its value in use.
Impairments identiie ntified in the TEN d in the TEN fields of $301.2 million were primarily due to lower 2P reserves partially os tially offset by an
increase in oil price. This was primarily due to delays in gaining approval for the amended TEN PoD which has led to the
deferral of investment and continued ntinued field decline.
Oil prices stated above are benchmark prices to which an individual i ual field price dierential is ap rice differential is applied. All impairment
assessments are prepared on a VIU basis using discounted future cash ounted future cash flows based on 2P reserves proiles. A redu rofiles. A reduction
or increase in the two-year forward curve of $5/bbl, based on the approximate range of annualised average oil price over
recent history, and a reduction or increase in the medium and long-term price assumptions of $5/bbl, based on the range
of annualised average historical prices, are considered to be reasonably possible changes for the purposes of sensitivity
analysis. Decreases to oil prices speciie fied above would increase the impairment charge by $76.4 million for Ghana and
increase the impairment by $0.4 million for Non-Operated, whilst increases to oil prices speciie fied above would result in
a reduction in the impairment charge of $72.6 million for Ghana and $17.1 million for Non-Operated. A 1% increase in the
pre-tax discount rate would increase the impairment by $15.6 million for Ghana and increase the impairment by $0.4
million for Non-Operated. The Group believes a 1% increase in the pre-tax discount rate to be a reasonable possibility
based on historical analysis of the Group’s and peer group of companies’ impairments.
For Net Zero Emissions sensitivities refer to page 45 of the TCFD and note 25. Climate change and energy transition.
| 2022 | ||||
| Trigger for | 2022 | Remaining | ||
| 2022 | Impairment/ | Pre-tax | recoverable | |
| impairment/ | (reversal) | discount rate | amount d | |
| (reversal) | $m | assumption | $m | |
Limande and Turnix CGU (Gabon) | a | (1.6) | 15% | 44.6 |
Tchatamba (Gabon) | a | (1.3) | 15% | 38.0 |
Oba and Middle Oba CGU (Gabon) | a | (0.4) | 17% | 11.8 |
Echira, Niungo and Igongo (Gabon) | a | (1.4) | 17% | 8.6 |
TEN (Ghana) | b | 380.6 | 13% | 931.7 |
Mauritania | a | 12.8 | n/a | – |
UK CGU | a,c | 2.5 | n/a | – |
Impairment | 391.2 |
a. Change to decommissioning estimate.
b. Revision of value based on revisions to reserves.
c. The e fields in the UK are grouped into one CGU as all ll fields within those countries share critical gas infrastructure.
d. The remaining recoverable amount of the asset is its value in use.
Tullow Oil plc Annual Report and Accounts 2023 – 155
Financial statements Supplementary informationStrategic report Corporate governance
Note 9 Propert, plnt nd equpment contnued
Impairments identiie ntified in the TEN d in the TEN fields of $380.6 million were primarily due to lower 2P reserves partially oset by oil tially offset by oil
Oil prices stated above are benchmark prices to which an individual i ual field price dierential is ap rice differential is applied. All impairment
assessments are prepared on a VIU basis using discounted future cash ounted future cash flows based on 2P reserves proiles. A redu rofiles. A reduction
or increase in the two-year forward curve of $5/bbl, based on the approximate range of annualised average oil price over
recent history, and a reduction or increase in the medium and long-term price assumptions of $5/bbl, based on the range
of annualised average historical prices, are considered to be reasonably possible changes for the purposes of sensitivity
analysis. Decreases to oil prices speciie fied above would increase the impairment charge by $131.4 million for Ghana and
increase the impairment by $19.2 million for Non-Operated, whilst increases to oil prices speciie fied above would result in
a credit to the impairment charge of $122.0 million for Ghana and no change to Non-Operated. A 1% change in the pre-
tax discount rate would increase the impairment by $33.0 million for Ghana and increase the impairment by $2.9 million
for Non-Operated. The Group believes a 1% change in the pre-tax discount rate to be a reasonable possibility based on
historical analysis of the Group’s and peer group of companies’ impairments.
| 2023 | 2022 | |
| $m | $m | |
| Non-current | ||
Amounts due from Joint Venture Partners | 332.5 | 323.3 |
VAT recoverable | 6.1 | 3.8 |
338.6 | 327.1 | |
| Current | ||
Amounts due from Joint Venture Partners | 498.1 | 452.3 |
Underlifts | 47.8 | 76.2 |
Prepayments | 21.1 | 31.3 |
Other current assets | 4.2 | 8.1 |
571.2 | 567.9 | |
909.8 | 895.0 |
| 2023 | 2022 | |
| $m | $m | |
Warehouse stock and materials | 71.5 | 69.1 |
Oil stock | 35.8 | 112.5 |
107.3 | 181.6 |
The decrease in oil stock from 31 December 2022 is driven by a decrease in Gabon of $70.6 million due to an additional
lifting in November 2023.
156 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
| 2023 | 2022 | |
| $m | $m | |
Cash at bank | 114.9 | 305.3 |
Short-term deposits and other cash equivalents | 384.1 | 331.0 |
499.0 | 636.3 |
Cash and cash equivalents includes an amount of $36.9 million (2022: $74.7 million) which the Group holds as operator
in Joint Venture bank accounts. Included within cash at bank is $4.5 million (2022: $7.0 million) held as security for
performance bonds relating to work commitments on exploration licences.
| 2023 | |
| $m | |
| Assets | |
Property, plant and equipment | 55.2 |
Other debtors | 0.6 |
Assets class | 55.8 |
| Liabilities | |
Other payables | (1.4) |
Accruals | (2.0) |
Decommissioning provision | (14.2) |
Liabilities directly associated with assets class | (17.6) |
Net assets directly associated with disposal group | 38.2 |
Tullow Oil plc Annual Report and Accounts 2023 – 157
Financial statements Supplementary informationStrategic report Corporate governance
| 2023 | 2022 | ||
| Notes | $m | $m | |
Trade payables | 22.3 | 68.4 | |
Other payables | 65.3 | 51.4 | |
Overlifts | 3.1 | – | |
Accruals | 498.6 | 379.3 | |
Current portion of lease liabilities | 18 | 185.7 | 251.2 |
775.0 | 750.2 |
| 2023 | 2022 | ||
| Notes | $m | $m | |
| Other non-current liabilities | 62.2 | 47.1 | |
Non-current portion of lease liabilities | 18 | 721.0 | 732.9 |
783.2 | 780.0 |
| 2023 | 2022 | |
| $m | $m | |
| Current | ||
| Borrowings – within one year | ||
10.25% Senior Secured Notes due 2026 | 100.0 | 100.0 |
100.0 | 100.0 |
| 2023 | 2022 | |
| $m | $m | |
| Non-current | ||
| Borrowings – after one year but wi | ||
7.00% Senior Notes due 2025 | 489.0 | 792.8 |
10.25% Senior Secured Notes due 2026 | 1,371.0 | 1,580.0 |
Secured Notes Facility due 2028 | 124.6 | – |
1,984.6 | 2,372.8 | |
Carrying value of total borrowings | 2,084.6 | 2,472.8 |
158 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 16 Borrowns contnued
Tullow Oil plc Annual Report and Accounts 2023 – 159
Financial statements Supplementary informationStrategic report Corporate governance
Note 16 Borrowns contnued
2025 Notes nd 2026 Notes covennts contnued
| 2023 | 2022 | |
| $m | $m | |
| Financial assets | ||
| Financial assets at amortised cost | ||
Trade receivables | 43.5 | 26.8 |
Amounts due from Joint Venture Partners | 830.6 | 775.6 |
Cash and cash equivalents | 499.0 | 636.3 |
1,373.1 | 1,438.7 | |
| Financial liabilities | ||
| Liabilities at amortised cost | ||
Trade payables | 84.5 | 115.4 |
Other payables | 567.0 | 430.7 |
Borrowings | 2,084.6 | 2,472.8 |
Lease liabilities | 906.7 | 984.1 |
| Derivative | ||
Used for hedging | 35.0 | 244.2 |
3,677.8 | 4,247.3 |
160 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 17 Fnncl nstruments contnued
| 2023 | 2023 | 2022 | 2022 | |||
| Less than | 1–3 | 2023 | Less than | 1–3 | 2022 | |
| 1 year | years | Total | 1 year | years | Total | |
| Assets/liabilities | $m | $m | $m | $m | $m | $m |
| Cas | ||||||
Oil derivatives | (13.3) | – | (13.3) | (162.1) | (49.7) | (211.8) |
| Deferred premium | ||||||
Oil derivatives | (21.7) | – | (21.7) | (24.2) | (8.2) | (32.4) |
Total liabilities | (35.0) | – | (35.0) | (186.3) | (57.9) | (244.2) |
Tullow Oil plc Annual Report and Accounts 2023 – 161
Financial statements Supplementary informationStrategic report Corporate governance
Note 17 Fnncl nstruments contnued
| Gross | Net | ||
| amounts | amounts | ||
| presented | |||
| Gross | in Group | in Group | |
| amounts | balance | balance | |
| recognised | sheet | sheet | |
| 31 December 2023 | $m | $m | $m |
Derivative assets | 3.0 | (3.0) | – |
Derivative liabilities | (38.0) | 3.0 | (35.0) |
| Gross | Net | ||
| amounts | amounts | ||
| presented | |||
| Gross | in Group | in Group | |
| amounts | balance | balance | |
| recognised | sheet | sheet | |
| 31 December 2022 | $m | $m | $m |
Derivative assets | – | – | – |
Derivative liabilities | (244.2) | – | (244.2) |
162 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 17 Fnncl nstruments contnued
Commodt prce rs contnued
| Bought put | Bought | |||
First half of 2024 hedge portfolio at 31 December 2023 | Bopd | (loor) | Sold call | call |
| Hedge structure | ||||
Straight puts | 11,217 | $60.05 | – | – |
Collars | 24,344 | $55.37 | $77.47 | – |
Three way collars (call spread) | 332 | $60.00 | $105.60 | $114.53 |
Total/weighted average | 35,893 | $56.88 | $77.85 | $114.53 |
| Bought put | Bought | |||
Second half of 2024 hedge position at 31 December 2023 | Bopd | (loor) | Sold call | call |
| Hedge structure | ||||
Straight Puts | 6,250 | $59.96 | – | – |
Collars | 12,650 | $60.36 | $113.45 | – |
Three way collars (call spread) | 6,500 | $60.00 | $84.61 | $93.55 |
Total/weighted average | 25,400 | $60.17 | $103.66 | $93.55 |
| Market | |||
| movement | |||
| as at | 2023 | 2022 | |
| 31 Dec 2023 | $m | $m | |
Brent oil price | 25% | (95.3) | (464.4) |
Brent oil price | (25%) | 24.2 | – |
| 2023 | 2022 | |
| Ca | $m | $m |
Oil derivatives – intrinsic | (18.9) | (150.3) |
Oil derivatives – time value | (16.3) | (94.4) |
| 2023 | 2022 | |
| Deferred amounts in the hedge reserve – intrinsic | $m | $m |
At 1 January | (150.3) | (39.3) |
| Reclassi | ||
Oil derivatives – transferred to sales revenue | 111.3 | 288.5 |
Revaluation gains/(losses) arising in the year | 20.1 | (399.5) |
131.4 | (110.8) | |
At 31 December | (18.9) | (150.3) |
Tullow Oil plc Annual Report and Accounts 2023 – 163
Financial statements Supplementary informationStrategic report Corporate governance
Note 17 Fnncl nstruments contnued
| Hede reserve summr contnued | ||
| 2023 | 2022 | |
| Reconciliation to sales revenue | $m | $m |
Oil derivatives – transferred to sales revenue | 111.3 | 288.5 |
Deferred premium paid | 27.8 | 30.8 |
Net losses from commodity derivatives in sales revenue (note 2) | 139.1 | 319.3 |
| 2023 | 2022 | ||||||
| Cash | 2023 | 2023 | Cash | 2022 | |||
| and cash | Fixed rate | Floating rate | 2023 | and cash | Fixed rate | 2022 | |
| equivalents | debt | debt | Total | equivalents | debt | Total | |
| $m | $m | $m | $m | $m | $m | $m | |
US$ | 492.3 | (1,977.8) | (129.6) | (1,615.1) | 578.1 | (2,500.0) | (1,921.9) |
Euro | 0.6 | – | – | 0.6 | 0.3 | – | 0.3 |
Sterling | 4.1 | – | – | 4.1 | 16.3 | – | 16.3 |
XAF | 0.3 | – | – | 0.3 | 38.8 | – | 38.8 |
Other | 1.7 | – | – | 1.7 | 2.8 | – | 2.8 |
499.0 | (1,977.8) | (129.6) | (1,608.4) | 636.3 | (2,500.0) | (1,863.7) |
| 2023 | 2022 | 2023 | 2022 | ||
| Market movement | $m | $m | $m | $m | |
Interest rate | 100 basis points | 3.6 | – | 3.6 | – |
Interest rate | (10) basis points | (0.9) | – | (0.9) | – |
164 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 17 Fnncl nstruments contnued
| 2023 | 2022 | 2023 | 2022 | ||
| Market movement | $m | $m | $m | $m | |
US$/foreign currency exchange rates | 20% | 1.1 | 9.7 | 1.1 | 9.7 |
US$/foreign currency exchange rates | (20%) | (1.7) | (14.5) | (1.7) | (14.7) |
Tullow Oil plc Annual Report and Accounts 2023 – 165
Financial statements Supplementary informationStrategic report Corporate governance
Note 17 Fnncl nstruments contnued
Lqudt rs contnued
| Weighted | |||||||
| average | Less than | 1–3 | 3 months | 1–5 | 5+ | ||
| 1 month | months | to 1 year | years | years | Total | ||
| interest rate | $m | $m | $m | $m | $m | $m | |
| 31 December 2023 | |||||||
Non-interest bearing | n/a | 49.5 | – | 38.1 | 62.2 | – | 149.8 |
Lease liabilities | 16.4% | 45.3 | 55.8 | 203.7 | 734.2 | 337.5 | 1,376.5 |
Fixed interest rate instruments | 9.9% | ||||||
Principal repayments | – | – | 100.0 | 1,878.0 | – | 1,978.0 | |
Interest charge | – | 17.0 | 164.0 | 220.0 | – | 401.0 | |
Variable interest rate instruments | 15.8% | ||||||
Principal repayments | – | – | – | 130.0 | – | 130.0 | |
Interest charge | – | 5.0 | 15.0 | 69.0 | – | 89.0 | |
Total | 94.8 | 77.8 | 520.8 | 3,093.4 | 337.5 | 4,124.3 |
| Weighted | |||||||
| average | Less than | 1–3 | 3 months | 1–5 | 5+ | ||
| 1 month | months | to 1 year | years | years | Total | ||
| interest rate | $m | $m | $m | $m | $m | $m | |
| 31 December 2022 | |||||||
Non-interest bearing | n/a | 93.5 | – | 26.3 | 47.0 | – | 166.8 |
Lease liabilities | 7.1% | 27.3 | 57.1 | 225.2 | 746.3 | 10.5 | 1,066.4 |
Fixed interest rate instruments | 9.7% | ||||||
Principal repayments | – | – | 100.0 | 2,400.0 | – | 2,500.0 | |
Interest charge | – | 28.0 | 197.0 | 464.0 | – | 689.0 | |
Total | 120.8 | 85.1 | 548.5 | 3,657.3 | 10.5 | 4,422.2 |
This note provides information for leases where the Group is a lessee. The Group did not enter into any contracts acting
as a lessor.
Right-of-use assets | Lease liabilities | |||
| 31 | 31 | 31 | 31 | |
| December | December | December | December | |
| Right-of-use assets (included within property, plant and equipment) | 2023 | 2022 | 2023 | 2022 |
| $m | $m | $m | $m | |
Property leases | 22.0 | 39.2 | 27.6 | 34.6 |
Oil and gas production and support equipment leases | 576.9 | 639.0 | 826.4 | 942.4 |
Transportation equipment leases | 25.1 | 3.4 | 52.7 | 7.1 |
Total | 624.0 | 681.6 | 906.7 | 984.1 |
Current | 185.7 | 251.2 | ||
Non-current | 721.0 | 732.9 | ||
Total | 906.7 | 984.1 |
Additions to the right-of-use assets during the 2023 inan 23 financial year were $81.1 million. Refer to note 9.
For ageing of lease liabilities, refer to note 17.
TEN FPSO
The Group’s leases balance includes the TEN FPSO, classii sified as ‘Oil and Gas production and support equipment’. During
the year, the assumption that the TEN FPSO lease term would end in April 2024, when the purchase option was assumed
to be exercised, was updated to rele eflect the best estimate view that the FPSO will continue to be leased until the cessation
of production in 2032. It also assumes an exercise of the extension option.
166 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 18 Leses contnued
) Amounts reconsed n the blnce sheet contnued
TEN FPSO contnued
The resulting lease liability remeasurement had the following impact on the balances:
| $m | |
Lease liability | (39.2) |
Right-of-use asset (included within Property, plant and equipment) | 25.6 |
Amounts due from Joint Venture Partners | 13.6 |
The present value of the TEN FPSO gross lease liability was $763.5 million (2022: $847.9 million).
A receivable from the Joint Venture Partners of $288.8 million (2022: $330.1 million) was recognised in other assets
(note10 ote 10) to relect th ) to reflect the value of future payments that will be met by cash calls from partners relating to the TEN
FPSO lease.
The present value of the receivable from the Joint Venture Partners unwinds over the expected life of the lease and the
unwinding of the discount is reported within rted within finance income.
Carrying amounts of the lease liabilities and Joint Venture leases receivables and the movements during the period:
| Joint | |||
| Venture | |||
| Lease | lease | ||
| liabilities | receivables | Total | |
| $m | $m | $m | |
At 1 January 2022 | (1,163.4) | 531.0 | (632.4) |
Additions and changes in lease estimates | (89.4) | 40.2 | (49.2) |
Acquisitions | – | (86.6) | (86.6) |
Payments/(receipts) | 342.0 | (138.2) | 203.8 |
Interest (expense)/income | (76.4) | 29.6 | (46.8) |
Currency translation adjustments | 3.1 | – | 3.2 |
At 1 January 2023 | (984.1) | 376.1 | (608.0) |
Additions and changes in lease estimates | (174.1) | 79.8 | (94.3) |
Payments/(receipts) | 331.5 | (136.5) | 195.0 |
Interest (expense)/income | (78.6) | 30.1 | (48.5) |
Currency translation adjustments | (1.4) | – | (1.4) |
At 31 December 2023 | (906.7) | 349.5 | (557.2) |
| 31 | 31 | |
| December | December | |
| 2023 | 2022 | |
| $m | $m | |
| Depreciation charge of right-of-use assets | ||
Property leases | 7.3 | 14.0 |
Oil and gas production and support equipment leases | 74.1 | 46.9 |
Total | 81.4 | 60.9 |
Interest expense on lease liabilities (includ | 78.6 | 76.4 |
Interest income on amounts due from Joint Venture Partners | (30.1) | (29.6) |
Expense relating to short-term leases | 1.0 | 2.0 |
Expense relating to leases of low-value assets | 0.9 | 1.8 |
Total | 131.8 | 111.5 |
The total net cash out flow for leases in 2023 was $195.0 million (2022: $203.8 million).
Tullow Oil plc Annual Report and Accounts 2023 – 167
Financial statements Supplementary informationStrategic report Corporate governance
| Decommiss- | Other | Decommiss- | Other | ||||
| ioning | provisions | Total | ioning | provisions | Total | ||
| 2023 | 2023 | 2023 | 2022 | 2022 | 2022 | ||
| Notes | $m | $m | $m | $m | $m | $m | |
At 1 January | 398.1 | 116.3 | 514.4 | 498.7 | 228.8 | 727.5 | |
New provisions, changes in estimates and reclass | 47.8 | (21.9) | 25.9 | (47.6) | (19.7) | (67.3) | |
| Acquisitions | – | – | – | 24.8 | 36.8 | 61.6 | |
Transfer to assets and liabilities held for sale | 14 | (14.2) | – | (14.2) | |||
Payments | (66.4) | (0.6) | (67.0) | (72.1) | (127.3) | (199.4) | |
Unwinding of discount | 5 | 10.1 | – | 10.1 | 6.0 | – | 6.0 |
Currency translation adjustment | 2.5 | (0.1) | 2.4 | (11.6) | (2.3) | (13.9) | |
At 31 December | 377.9 | 93.7 | 471.6 | 398.1 | 116.3 | 514.4 | |
Current provisions | 53.4 | 14.5 | 67.9 | 87.7 | 11.1 | 98.8 | |
Non-current provisions | 324.5 | 79.2 | 403.7 | 310.4 | 105.2 | 415.6 |
| Discount | Cessation of | Discount | Cessation of | ||||
| rate | production | Total | rate | production | Total | ||
| assumption | assumption | 2023 | assumption | assumption | 2022 | ||
assumption 1 | 2023 | 2023 | $m | 2022 | 2022 | $m | |
Côte d’Ivoire | 2% | 3.5% | 2032 | 47.1 | 3.5% | 2035 | 45.6 |
Gabon | 2% | 3.5–4% | 2034–2047 | 28.7 | 3.5% | 2025–2037 | 49.2 |
Ghana | 2% | 3.5% | 2032–2036 | 208.2 | 3.5% | 2036 | 190.2 |
Mauritania | n/a | n/a | 2018 | 54.7 | n/a | 2018 | 56.0 |
UK | n/a | n/a | 2018 | 39.2 | n/a | 2018 | 57.1 |
377.9 | 398.1 |
168 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
| Accelerated | Other | Deferred | |||||
| tax | Decommiss- | Tax | temporary | petroleum | |||
| depreciation | ioning | losses | Provisions | revenue tax | Total | ||
| $m | $m | $m | $m | $m | $m | $m | |
At 1 January 2022 | (598.3) | 88.8 | 221.9 | (66.4) | 21.7 | 9.4 | (322.9) |
Credit/(charge) to income statement | 184.0 | (22.9) | (186.1) | (32.6) | (5.9) | (5.0) | (68.5) |
| Acquired through business | |||||||
| combination | (143.6) | – | – | – | – | – | (143.6) |
(0.2) | – | – | – | – | (1.8) | (2.0) | |
At 1 January 2023 | (558.1) | 65.9 | 35.8 | (99.0) | 15.8 | 2.6 | (537.0) |
Credit/(charge) to income statement | 117.9 | 1.7 | (28.4) | 40.9 | – | 3.8 | 135.9 |
– | – | – | – | – | 0.2 | 0.2 | |
At 31 December 2023 | (440.2) | 67.6 | 7.4 | (58.1) | 15.8 | 6.6 | (400.9) |
| 2023 | 2022 | |
| $m | $m | |
Deferred tax liabilities | (420.5) | (551.5) |
Deferred tax assets | 19.6 | 14.5 |
(400.9) | (537.0) |
| Equity share capital | Share | ||
| allotted and fully paid | premium | ||
Number | $m | $m | |
Ordinary shares of 10p each At 1 January 2022 | 1,432,080,097 | 214.2 | 1,294.7 |
| Issued during the year | |||
Exercise of share options | 7,525,898 | 1.0 | – |
At 1 January 2023 | 1,439,605,995 | 215.2 | 1,294.7 |
| Issued during the year | |||
Exercise of share options | 12,935,892 | 1.5 | – |
At 31 December 2023 | 1,452,541,887 | 216.7 | 1,294.7 |
Tullow Oil plc Annual Report and Accounts 2023 – 169
Financial statements Supplementary informationStrategic report Corporate governance
| 2023 | 2022 | |||
| Notes | $m | $m | ||
Tullow Incentive Plan | 3.7 | 3.9 | ||
Employee Share Award Plan | 1.4 | 1.2 | ||
2022 | PDMR buy-out award | 0.5 | 0.5 | |
2021 | Tullow Sharesave Plan | 0.4 | 0.2 | |
6.0 | 5.8 | |||
Expensed to operating costs | 4 | 0.4 | 0.4 | |
Expensed as administrative cost | 4 | 5.6 | 5.4 | |
Total share-based payment charge | 6.0 | 5.8 |
The national insurance liability as at 31 December 2023 was $1.9 million (2022: $1.6 million).
Tullow Incentve Pln entive Plan (TIP)
Under the TIP, senior management can be granted nil exercise price options, normally exercisable from three years (ive rmally exercisable from three years (five
years in the case of the Company’s Directors) to ten years following grant provided an individual remains in employment.
The size of awards depends on both annual performance measures and total shareholder return (TSR) over a period of up
to three years. There are no post-grant performance conditions. No dividends are paid over the vesting period; however,
it has been agreed for the TIP Awards since 2018 that an amount equivalent to the dividends that would have been paid
on the TIP shares during the vesting period if they were ‘real’ shares will also be payable on exercise of the award. There
are further details of the TIP in the Remuneration Report on pages 89 to 113.
The weighted average remaining contractual life for TIP awards outstanding at 31 December 2023 was 6.6 years.
Emploee Shre Awr oyee Share Award Pln (ES d Plan (ESAP)
Most Group employees are eligible to be granted nil exercise price options, that are exercisable from three to ten years
following grant. An individual must normally remain in employment for three years from grant for the share to vest. Awards
are not subject to post-grant performance conditions. No dividends are paid over the vesting period; however, it has been
agreed for the ESAP awards granted since 2018 that an amount equivalent to the dividends that would have been paid on the
ESAP shares during the vesting period if they were ‘real’ shares will also be payable on exercise of the award.
Phantom options that provide a cash bonus equivalent to the gain that could be made from a share option (being granted
over a notional number of shares) have also been granted under the ESAP in situations where the grant of share options was
not practicable.
The weighted average remaining contractual life for ESAP awards outstanding at 31 December 2023 was 7.1 years.
Participation in the 2010 SOP was available to most of the Group’s employees. Options have an exercise price equal to
market value shortly before grant and are normally exercisable between three and ten years from the date of the grant
subject to continuing employment.
Phantom options, providing a cash bonus equivalent to the gain that could be made from a share option, have also been
granted under the 2010 SOP in situations where the grant of share options was not practicable.
All remaining options under the SOP expired during 2023 and so there were no outstanding options under the SOP at
On 5 August 2020, the Company granted the new Chief Executive Oi cutive Officer a number of Buyout Awards following the
commencement of their employment in order to compensate them for certain share arrangements forfeited upon leaving
their former employer. The grant of the awards was conditional on the CEO purchasing shares in the Company with a value of
£350,000 (the Purchased Shares). These awards will vest after ive years from the date of joining subje se awards will vest after five years from the date of joining subject to continued service
and the retention of the Purchased Shares. The awards comprise: a restricted share award in the form of a nil-cost option over
3,000,000 shares; a share option over 3,000,000 shares with a per share exercise price of £0.2566 (being equal to the market
value of a share at the close of trading on the dealing date immediately following the date on which the Purchased Shares were
acquired); and a share option over 3,000,000 shares with a per share exercise price of £0.5132 (being twice the exercise price for
the above options).
170 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 22 Shre-bsed pments contnued
2020 PDMR bu-out wrds contnued
The awards will ordinarily vest on 1 July 2025 and if they remain unexercised will expire on 1 July 2030. There are further details of
the 2020 PDMR Buyout Awards in the Remuneration Report on pages 89 to 113.
The weighted average remaining contractual life for the PDMR Buyout Awards outstanding at 31 December 2023 was 6.5 years.
2021 Tullow Shr ow Sharesve Pln (SA esave Plan (SAYE)
UK-based employees are eligible to participate in the SAYE scheme introduced in 2021. These are standard statutory
HMRC approved ‘Save as you earn’ awards. To participate in the SAYE, employees choose how much money of their net
salary to save each month (subject to certain limits) for a period of three years. At the end of the period employees are
entitled to purchase shares using the funds they have saved at a price 20% below the market price on the day before the
invitation date. Alternatively, they can elect to take back all their savings as cash. Only employees who remain in service
and continue to pay monthly contributions will be eligible to purchase shares. If they leave employment or choose to stop
paying contributions before the end of the three-year period they will be refunded the amount they have saved.
Outstanding SAYE awards at 31 December 2023 had exercise prices of 29p to 40p and remaining contractual lives
between 1.4 years and 3.4 years. The weighted average remaining contractual life is 2.2 years.
These are all-employee plans set up in the UK and Ireland, to enable employees to save out of salary up to prescribed
monthly limits. Contributions are used by the SIP trustees to buy Tullow shares (Partnership Shares) at the end of each
three-month accumulation period. The Company makes a matching contribution to acquire Tullow shares (Matching
Shares) on a one-for-one basis. Under the UK SIP, Matching Shares are subject to time-based forfeiture over three years
on leaving employment in certain circumstances or if the related Partnership Shares are sold. The fair value of a Matching
Share is its market value when it is awarded.
Under the UK SIP: (i) Partnership Shares are purchased at the lower of their market values at the start of the accumulation
period and the purchase date (which is treated as a three-month share option for IFRS 2 purposes and therefore results
in an accounting charge); and (ii) Matching Shares vest over the three years after being awarded (resulting in their
accounting charge being spread over that period).
Under the Irish SIP: (i) Partnership Shares are bought at the market value at the purchase date (which does not result
in any accounting charge); and (ii) Matching Shares vest over the two years after being awarded (resulting in their
accounting charge being spread over that period).
Tullow Executve utive Shre Pln (L Share Plan (LTIP)
Under the LTIP, senior management can be granted nil exercise price options, normally exercisable between 2.5 to 10
years following grant (with a two-year holding period in the case of the Company’s Directors). Awards granted in 2023
vest subject to Total Shareholder Return (TSR) performance conditions, with 50% of an award subject to an Absolute
TSR performance condition (where the Company’s TSR is tested against targets set by the Remuneration Committee),
and the remaining 50% subject to a relative TSR condition (where the Company’s TSR is compared to the companies
in a Selected Peer Group). Performance is measured over a ixed three-year pe ured over a fixed three-year period of three consecutive ina cutive financial years
starting with the in ting with the financial year in which the award is made. The average share price over each weekday within the
previous three months is calculated at the start and at the end of the Performance period. The TSR is calculated from
these averages. An individual must also normally remain in employment to the vesting date in order for the shares to
vest. No dividends are paid over the vesting period; however, it has been agreed for the 2023 LTIP awards that an amount
equivalent to the dividends that would have been paid on the LTIP shares during the vesting period if they were ‘real’
shares will also be payable on exercise of the award. There are further details of the 2023 Tullow Executive Share Plan
(LTIP) awards in the Remuneration Report on pages 89 to 113.
The weighted average remaining contractual life for LTIP awards outstanding at 31 December 2023 was 9.5 years.
Tullow Oil plc Annual Report and Accounts 2023 – 171
Financial statements Supplementary informationStrategic report Corporate governance
Note 22 Shre-bsed pments contnued
Tullow Executve Shre Pln (LTIP) contnued
| Outstanding | Granted | Exercised | Forfeited/ | Outstanding | Exercisable | |||||
| as at | during | during | expired during | at | at | |||||
| 1 January | the year | the year | the year | 31 December | 31 December | |||||
2023 | TIP – | number of shares | 24,854,248 | 9,455,309 | 7,291,530 | 328,764 | 26,689,263 | 6,053,704 | ||
2023 | TIP – | average weighted share | ||||||||
pric | 68.4 | 32.0 | 75.8 | 226.3 | 51.5 | 51.5 | ||||
2022 | TIP – | number of shares | 21,740,803 | 8,076,264 | 4,529,667 | 433,152 | 24,854,248 | 3,014,253 | ||
2022 | TIP – | average weighted share | ||||||||
pric | 105.3 | 49.1 | 211.6 | 64.4 | 68.4 | 220.0 | ||||
2023 | ESAP – | number of shares | 17,330,077 | 6,798,244 | 5,578,281 | 468,947 | 18,081,093 | 8,146,742 | ||
2023 | ESAP – | average weighted share | ||||||||
pric | 76.4 | 32.3 | 59.9 | 32.6 | 66.0 | 100.2 | ||||
2022 | ESAP – | number of shares | 17,638,898 | 3,556,316 | 2,803,974 | 1,061,163 | 17,3 | 30,07 | 7 | 4,613,422 |
2022 | ESAP – | average weighted share | ||||||||
pric | 96.5 | 49.3 | 180.0 | 45.2 | 76.4 | 228.5 | ||||
2023 | SOP – | number of shares | 178,283 | – | – | 178,283 | – | – | ||
2023 | SOP – | WAEP | 976.4 | – | – | 976.4 | – | – | ||
2022 | SOP – | number of shares | 2,046,755 | – | – | 1,868,472 | 178,283 | 178,283 | ||
2022 | SOP – | WAEP | 1,106.0 | – | – | 1,118.4 | 976.4 | 976.4 | ||
2023 | Buyout Awards – number of shares | 9,000,000 | – | – | – | 9,000,000 | – | |||
2023 | Buyout Awards – WAEP | 25.7 | – | – | – | 25.7 | – | |||
2022 | Buyout Awards – number of shares | 9,000,000 | – | – | – | 9,000,000 | – | |||
2022 | Buyout Awards – WAEP | 25.7 | – | – | – | 25.7 | – | |||
2023 | LTIP | number of shares | – | 12,241,264 | – | – | 12,241,264 | – | ||
2023 | LTIP | average weighted share | ||||||||
pric | – | 27.7 | – | – | 27.7 | – | ||||
2022 | LTIP | number of shares | – | – | – | – | – | – | ||
2022 | LTIP | average weighted share | ||||||||
pric | – | – | – | – | – | – | ||||
2023 | SAYE – | number of options | 1,534,241 | 975,600 | – | 121,970 | 2,387,871 | – | ||
2023 | SAYE – | WAEP | 38.0 | 40.0 | – | 38.2 | 38.8 | – | ||
2022 | SAYE – | number of options | 1,534,241 | 975,600 | – | 121,970 | 2,387,871 | – | ||
2022 | SAYE – | WAEP | 38.0 | 40.0 | – | 38.2 | 38.8 | – | ||
The options granted during the year were valued using Monte Carlo simulation models for the LTIP and a proprietary
binomial valuation for the TIP, ESAP and SAYE.
172 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 22 Shre-bsed pments contnued
Tullow Executve Shre Pln (LTIP) contnued
The following table details the weighted average fair value of awards granted and the assumptions used in the fair value
expense calculations.
| 2023 | |||||||||||||
2023 | LTIP | ESAP | 2022 | ESAP | 2023 | TIP | 2022 | TIP | 2023 | SAYE | 2022 | SAYE | |
Weighted average fair value of awards granted | 13.4p | 32.0p | 49.3p | 32.0p | 49.1p | 20.5p | 23.1p | ||||||
| Principal inputs to options valuations model: | |||||||||||||
Weighted average share price at grant | 27.7p | 32.0p | 49.3p | 32.0p | 49.1p | 32.3p | 38.4p | ||||||
Weighted average exercise price | 0.0p | 0.0p | 0.0p | 0.0p | 0.0p | 29.0p | 40.0p | ||||||
| Risk-free interest rate per annum | 5.0% | 3.5% | 1.5% to 4.4% | 3.5% | 1.5%/1.5% | 4.5% | 4.3% | ||||||
| Expected volatility per annum | 63% | 89% | 101% | to 102% | 89%/84% | 102%/85% | 92% | 91% | |||||
| Expected award life (years) | 2.7 | 3.0 | 3.0 | 3.0/5.0 | 3.0/5 | .0 | 3.6 | 3.6 | |||||
| Dividend yield per annum | n/a | n/a | n/a | n/a | n/a | 0.0% | 0.0% | ||||||
| Employee turnover before vesting per annum | 0% | 5% | 5% | 5%/0% | 5%/0% | 5% | 5% |
1
1,2
1,3
4
1
1. Shows the assumption for 2023 and 2022 LTIP awards made to senior management/Executives and Directors respectively.
2. Expected volatility was determined by calculating the historical volatility of the Company’s share price over a period commensurate with the expected
life of the awards. The fair values of the 2023 ESAP and TIP Awards, and the 2022 TIP Awards are not aecte ffected by the assumption for the Company’s
share price volatility.
3. The expected life is the average expected period from date of grant to exercise allowing for the Company’s best estimate of participants’ expected
exercise behaviour.
4. No dividend yield assumption is needed for the fair value calculations for the 2023 LTIP, ESAP and TIP Awards as a dividend equivalent will be payable
on the exercise of these awards.
| 2023 | 2023 | |
| ESAP | TIP | |
Weighted average share price at exercise for awards exercised | 32.3p | 32.8p |
| 2023 | 2022 | |
| $m | $m | |
Capital commitments | 207.0 | 301.2 |
| Contingent liabilities | ||
Performance guarantees | 42.7 | 84.1 |
Other contingent liabilities | 84.4 | 55.8 |
127.1 | 139.9 |
Tullow Oil plc Annual Report and Accounts 2023 – 173
Financial statements Supplementary informationStrategic report Corporate governance
| 2023 | 2022 | |
| $m | $m | |
Short-term employee | 2.7 | 2.5 |
Post-employ | 0.2 | 0.1 |
Share-based payments | 1.4 | 1.4 |
4.3 | 4.0 |
Tullow remains committed to being Net Zero on Scope 1 and Scope 2 emissions on a net equity basis by 2030, providing
support to host country governments in meeting their national targets by reducing GHG emissions. Further information
on the Group’s Net Zero strategy is on page 33.
This note describes how the Group has considered climate-related impacts in key areas of the Financial Statements
and how this translates into the valuation of assets and measurement of liabilities as Tullow make progress in the energy
transition.
Note (af) key sources of estimation uncertainties describes those uncertainties that have the potential to have a material
This note describes the key areas of climate impacts that potentially have short and longer-term eects o -term effects on amounts
recognised on the Group Balance Sheet as at 31 December 2023. Where relevant this note contains references to other
notes to the Group Financial Statements, and sections of the Task Force on Climate-related Financial Disclosures (TCFD),
to provide an overarching summary.
Tullow targets being Net Zero Scope 1 and 2 emissions by 2030, on a net equity basis, with an interim target of 40%
reduction in emissions by 2025, these metrics have been included in the Group’s business plan. The Financial Statements
are based on reasonable and supportable assumptions that represent management’s current best estimate of the range
of economic conditions that may exist in the foreseeable future.
The Group has performed an assessment of the potential future impact of climate change on key elements of its
Financial Statements utilising three IEA scenarios (see TCFD on pages 38 to 47 for details).
Tullow continues to assess operating cash l sh flow (OCF) impact on our currently producing assets using the oil price
assumptions within the IEA scenarios which are detailed on pages 43 to 45 of the TCFD.
The impact of acute and chronic physical climate risks on our existing assets are also assessed and meteorological and
climate conditions are incorporated into operational design considerations, please refer to the TCFD on pages 38 to 47
for probabilities, potential exposures, and mitigations.
While carbon prices are projected to grow, there is low likelihood that there will be a substantive impact on the Group’s
core geographies in the medium term. Tullow runs shadow carbon price sensitivities for any new investment decisions
and business planning cycles, using an internal shadow carbon price of $25/tCO
2
e which is in line with the NZE carbon
price for other emerging market and developing economies.
174 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 25 Clmte chne nd ener trnston contnued
Fnncl plnnn ssumptons contnued
To address hard to abate residual emissions, Tullow is developing a nature-based carbon os n offset project with the Forestry
Commission of Ghana which is expected to progress towards FID in 2024. The carbon price sensitivity and costs for
nature-based carbon os on offset projects are not included in the value in use calculation of the recoverable amount of the
Group CGUs as expected cash l sh flows associated with current nature based solutions are not directly attributable to the
asset CGUs.
Pricing assumptions used will continue to be updated for changes in the economic environment and the pace of the
energy transition. Tullow will continue to use the ‘Net Zero Emissions by 2050 Scenario’ to assess potential in s potential financial
impacts on intangible exploration and evaluation asset write-os offs, impairments of property, plant and equipment, and
decommissioning timelines. These are detailed on pages 38 to 47 of the TCFD.
Governmental and societal responses to climate change risks are still developing, and are interdependent upon each
other, and consequently in uently financial statements cannot capture all possible future outcomes as these are not yet known.
Note 27 Csh flow stt . Cash flow statement reconclt ement reconciliatons ions
| 2023 | 2022 | |
| Purchases of intangible exploration and evaluation assets | $m | $m |
Additions to intangible exploration and evaluation assets | 25.4 | 39.2 |
Purchases of intangible exploration and evaluation assets | (30.2) | (42.6) |
| Non-cash movements/presented in other cash | ||
Movement in working capital | 4.8 | 3.4 |
| 2023 | 2022 | |
| Purchases of property, plant and equipment | $m | $m |
Additions to property, plant and equipment | 499.5 | 370.7 |
Purchases of property, plant and equipment | (262.3) | (263.8) |
| Non-cash movements/presented in other cash | ||
Decommissioning asset revisions | (47.8) | 19.9 |
Right-of-use asset additions | (81.1) | (63.5) |
Movement in working capital | (108.3) | (63.3) |
| 2023 | 2022 | 2021 | 2023 | 2022 | |
| Movement in borrowings | $m | $m | $m | Movement | Movement |
Borrowings | 2,084.6 | 2,472.8 | 2,568.7 | (388.2) | (95.9) |
Debt arrangement fees | (5.0) | – | |||
Repayment of borrowings | (432.2) | (100.0) | |||
Drawdown of borrowings | 129.7 | – | |||
| Non-cash movements/presented in other cash | |||||
Gain on bond buyback | (86.0) | – | |||
Amortisation of arrangement fees and accrued interest | 5.3 | 4.1 |
Tullow Oil plc Annual Report and Accounts 2023 – 175
Financial statements Supplementary informationStrategic report Corporate governance
In 2023, the Board recommended that no interim or inal d d that no interim or final dividend would be paid.
| Country of | ||||||
| Company name | incorporation | Direct or indirect | Address of registered o | |||
Hardman Resources Pty Ltd | Australia | Indirect | Level 9, 1 William Street, Perth WA 6000, Australia | |||
Tullow Chinguetti Production Pty Ltd | Australia | Indirect | Level 9, 1 William Street, Perth WA 6000, Australia | |||
Tullow Petroleum (Mauritania) Pty Ltd | Australia | Indirect | Level 9, 1 William Street, Perth WA 6000, Australia | |||
Tullow Uganda Operations Pty Ltd | Australia | Indirect | Level 9, 1 William Street, Perth WA 6000, Australia | |||
Eagle Drill Limited | British Virgin Islands | Indirect (50%) | Akara Building, 24 De Castro Street, Wickhams Cay, | |||
| Road Town, Tortola, British Virgin Islands | ||||||
Tullow (EA) Holdings Limited | British Virgin Islands | Indirect | Ritter House, Wickhams Cay, Tortola, VG1110, | |||
| Briti | ||||||
DWT-T Company | Cayman Islands | Indirect | PO | Box | 3232 | 2, 4th Floor Century Yard, Cricket |
| Square, George Town, KY1-1209, Cayman Islands | ||||||
Tullow Argentina Limited | England and Wales | Indirect | 9 Chiswick Park, 566 Chiswick High Road, | |||
| London W4 5XT, United Kingdom | ||||||
Tullow Comoros Limited | England and Wales | Indirect | 9 Chiswick Park, 566 Chiswick High Road, | |||
| London W4 5XT, United Kingdom | ||||||
Tullow Côte d’Ivoire Onshore Limited | England and Wales | Indirect | 9 Chiswick Park, 566 Chiswick High Road, | |||
| London W4 5XT, United Kingdom | ||||||
Tullow Group Services Limited | England and Wales | Direct | 9 Chiswick Park, 566 Chiswick High Road, | |||
| London W4 5XT, United Kingdom | ||||||
| Tullow Jamaica Limited | England and Wales | Indirect | 9 Chiswick Park, 566 Chiswick High Road, | |||
| London W4 5XT, United Kingdom | ||||||
Tullow New Ventures Limited | England and Wales | Indirect | 9 Chiswick Park, 566 Chiswick High Road, | |||
| London W4 5XT, United Kingdom | ||||||
Tullow Mozambique Limited | England and Wales | Indirect | 9 Chiswick Park, 566 Chiswick High Road, | |||
| London W4 5XT, United Kingdom | ||||||
| Tullow Oil 100 Limited | England and Wales | Direct | 9 Chiswick Park, 566 Chiswick High Road, | |||
| London W4 5XT, United Kingdom | ||||||
| Tullow Oil 101 Limited | England and Wales | Direct | 9 Chiswick Park, 566 Chiswick High Road, | |||
| London W4 5XT, United Kingdom | ||||||
Tullow Oil Finance Limited | England and Wales | Direct | 9 Chiswick Park, 566 Chiswick High Road, | |||
| London W4 5XT, United Kingdom | ||||||
Tullow Oil SK Limited | England and Wales | Direct | 9 Chiswick Park, 566 Chiswick High Road, | |||
| London W4 5XT, United Kingdom | ||||||
Tullow Oil SPE Limited | England and Wales | Direct | 9 Chiswick Park, 566 Chiswick High Road, | |||
| London W4 5XT, United Kingdom | ||||||
Tullow Peru Limited | England and Wales | Indirect | 9 Chiswick Park, 566 Chiswick High Road, | |||
| London W4 5XT, United Kingdom | ||||||
| Tullow Technologies Limited | England and Wales | Indirect | 9 Chiswick Park, 566 Chiswick High Road, | |||
| London W4 5XT, United Kingdom | ||||||
Tullow Uruguay Limited | England and Wales | Indirect | 9 Chiswick Park, 566 Chiswick High Road, | |||
| London W4 5XT, United Kingdom | ||||||
Tullow Oil Gabon SA | Gabon | Indirect | Quartier Tahiti, Immeuble Narval B.P. 9773, | |||
176 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 29 Tullow Ol plc subsdres contnued
As t 31 December 2023 contnued
| Country of | Direct or | |||
| Company name | incorporation | indirect | Address of registered | |
Tullow Oil (Mauritania) Ltd | Guernsey | Indirect | P.O. Box 119, Martello Court, Admiral Park, | |
| St. Peter Port GY1 3HB, Guernsey | ||||
Tullow Oil Limited | Ireland | Direct | 11 Adelaide Road, Dublin 2, Dublin, Ireland | |
Tullow Congo Limited | Isle of Man | Indirect | First Names House, Victoria Road, | |
| Douglas IM2 4DF, Isle of Man | ||||
Tullow Gabon Holdings Limited | Isle of Man | Indirect | First Names House, Victoria Road, | |
| Douglas IM2 4DF, Isle of Man | ||||
Tullow Gabon Limited | Isle of Man | Indirect | First Names House, Victoria Road, | |
| Douglas IM2 4DF, Isle of Man | ||||
Tullow Mauritania Limited | Isle of Man | Indirect | First Names House, Victoria Road, | |
| Douglas IM2 4DF, Isle of Man | ||||
Tullow Namibia Limited | Isle of Man | Indirect | First Names House, Victoria Road, | |
| Douglas IM2 4DF, Isle of Man | ||||
Tullow Uganda Limited | Isle of Man | Indirect | First Names House, Victoria Road, | |
| Douglas IM2 4DF, Isle of Man | ||||
| Tullow Côte d’Ivoire Exploration Limited | Jersey | Indirect | 44 Esplanade, St Helier JE4 9WG, Jersey | |
Tullow Côte d’Ivoire Limited | Jersey | Indirect | 44 Esplanade, St Helier JE4 9WG, Jersey | |
Tullow Ghana Limited | Jersey | Indirect | 44 Esplanade, St Helier JE4 9WG, Jersey | |
Tullow India Operations Limited | Jersey | Indirect | 44 Esplanade, St Helier JE4 9WG, Jersey | |
Tullow Oil (Jersey) Limited | Jersey | Direct | 44 Esplanade, St Helier JE4 9WG, Jersey | |
Tullow Oil International Limited | Jersey | Indirect | 44 Esplanade, St Helier JE4 9WG, Jersey | |
| Tullow Ethiopia BV | Netherlands | Indirect | 9 Chiswick Park, 566 Chiswick High Road, | |
| London W4 5XT, United Kingdom | ||||
| Tullow Guyana BV | Netherlands | Indirect | 9 Chiswick Park, 566 Chiswick High Road, | |
| London W4 5XT, United Kingdom | ||||
Tullow Hardman Holdings BV | Netherlands | Indirect | 9 Chiswick Park, 566 Chiswick High Road, | |
| London W4 5XT, United Kingdom | ||||
Tullow Kenya BV | Netherlands | Indirect | 9 Chiswick Park, 566 Chiswick High Road, | |
| London W4 5XT, United Kingdom | ||||
Tullow Overseas Holdings BV | Netherlands | Direct | 9 Chiswick Park, 566 Chiswick High Road, | |
| London W4 5XT, United Kingdom | ||||
Tullow Suriname BV | Netherlands | Indirect | 9 Chiswick Park, 566 Chiswick High Road, | |
| London W4 5XT, United Kingdom | ||||
| Tullow Uganda Holdings BV | Netherlands | Indirect | Prinses Margrietplantsoen 33, | |
259 | 5AM ’s-Gravenhage, The Netherlands | |||
Tullow Zambia BV | Netherlands | Indirect | 9 Chiswick Park, 566 Chiswick High Road, | |
| London W4 5XT, United Kingdom | ||||
| Tullow Oil Norge AS | Norway | Indirect | Tordenskioldsgate 6B, 0160 Oslo, Norway | |
Energy Africa Bredasdorp (Pty) Ltd | South Africa | Indirect | Maitland House 1 – River Park, Gloucester Road, | |
| Mowbray, Western Cape 7700, South Africa | ||||
Tullow South Africa (Pty) Limited | South Africa | Indirect | Maitland House 1 – River Park, Gloucester Road, | |
| Mowbray, Western Cape 7700, South Africa | ||||
T.U. S.A. | Uruguay | Indirect | Colonia 810, Of. 403, Montevideo, Uruguay |
Tullow Oil plc Annual Report and Accounts 2023 – 177
Financial statements Supplementary informationStrategic report Corporate governance
| Area | Tullow | ||||
Licence/Unit area | Fields | sq km | interest | Operator | Other partners |
| Deepwater Tano | Wawa, Tweneboa, | 619 | 54.84% | Tullow | Kosmos, KEGIN, GNPC, |
| TEN Development Area | Enyenra, Ntomme | Jubilee Oil Holdings, Petro SA | |||
West Cape Three Points | Jubilee | 150 | 25.66% | Tullow | Kosmos, KEGIN, GNPC, |
| Jubilee Oil Holdings, Petro SA | |||||
| Jubilee Field Unit Area | Jubilee, Mahogany, Teak | 38.98% | Tullow | Kosmos, KEGIN, GNPC, Jubilee Oil | |
| Holdings, Petro SA |
| Area | Tullow | ||||
Licence/Unit area | Fields | sq km | interest | Operator | Other partners |
| Côte d’Ivoire | |||||
CI-26 Special Area ‘E’ | Espoir | 235 | 21.33% | CNR | Petroci |
| Gabon | |||||
Avouma | Avouma, South Tchibala | 52 | 7.50% | Vaalco | Addax (Sinopec), Sasol, PetroEnergy |
| DE8 | DE8 | 2,393 | 40.00% | Perenco | |
Ebouri | Ebouri | 15 | 7.50% | Vaalco | Addax (Sinopec), Sasol, PetroEnergy |
Echira | Echira | 76 | 40.00% | Perenco | Gabon Oil Company |
Etame | Etame, North Tchibala | 49 | 7.50% | Vaalco | Addax (Sinopec), Sasol, PetroEnergy |
Ezanga | 5,626 | 8.57% | Maurel & Prom | Gabon Oil Company | |
Gwedidi | Gwedidi | 5 | 7.50% | Maurel & Prom | Gabon Oil Company |
Mabounda | Mabounda | 6 | 7.50% | Maurel & Prom | Gabon Oil Company |
Maroc | Maroc | 17 | 7.50% | Maurel & Prom | Gabon Oil Company |
Maroc Nord | Maroc Nord | 17 | 7.50% | Maurel & Prom | Gabon Oil Company |
Mbigou | Mbigou | 5 | 7.50% | Maurel & Prom | Gabon Oil Company |
Niembi | Niembi | 4 | 7.50% | Maurel & Prom | Gabon Oil Company |
Niungo | Niungo | 96 | 40.00% | Perenco | Gabon Oil Company |
Omko | Omko | 16 | 7.50% | Maurel & Prom | Gabon Oil Company |
Onal | Onal | 46 | 7.50% | Maurel & Prom | Gabon Oil Company |
| Simba | Simba | 315 | 40.00% | Perenco | |
| Tchatamba Marin | Tchatamba Marin | 30 | 40.00% | Perenco | |
| Tchatamba South | Tchatamba South | 40 | 40.00% | Perenco | |
| Tchatamba West | Tchatamba West | 25 | 40.00% | Perenco |
178 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 30 Lcence nterests contnued
| Area | Tullow | ||||
Licence | Fields | sq km | interest | Operator | Other partners |
| Kenya | |||||
| Block 10BA | 11,569 | 100.00% | Tullow | ||
| Block 10BB | Amosing, Ngamia | 6,172 | 100.00% | Tullow | |
Block 12B | 6,200 | 100.00% | Tullow | ||
| Block 13T | Ekales, Twiga | 4,719 | 100.00% | Tullow |
| Area | Tullow | ||||
Licence/Unit area | Fields | sq km | interest | Operator | Other partners |
| Argentina | |||||
Block MLO-114 | 5,942 | 40.00% | Tullow | Pluspetrol, Wintershall Dea | |
Block MLO-119 | 4,546 | 40.00% | Tullow | Pluspetrol, Wintershall Dea | |
Block MLO-122 | 4,420 | 100.00% | Tullow | ||
| Côte d’Ivoire | |||||
CI-524 | 551 | 90.00% | Tullow | Petroci | |
CI-803 | 1,345 | 90.00% | Tullow | Petroci |
Tullow Oil plc Annual Report and Accounts 2023 – 179
Financial statements Supplementary informationStrategic report Corporate governance
Compn blnce sheet
As at 31 December 2023
Notes
2023
$m
2022
$m
ASSETS
Non-current assets
Investments 1 4,484.2 4,863.7
4,484.2 4,863.7
Current assets
Other current assets 3 5.1 9.1
Cash at bank 15.9 54.5
21.0 63.6
Total assets 4,505.2 4,927.3
LIABILITIES
Current liabilities
Trade and other payables 4 (430.6) (194.4)
Borrowings 5 (100.0) (100.0)
Derivative inancial instruments 6 (36.4) (186.3)
(567.0) (480.7)
Non-current liabilities
Borrowings 5 (1,984.6) (2,372.8)
Derivative inancial instruments 6 – (58.2)
(1,984.6) (2,431.0)
Total liabilities (2,551.6) (2,911.7)
Net assets 1,953.6 2,015.6
Capital and reserves
Called-up share capital 7 216.7 215.2
Share premium 7 1,294.7 1,294.7
Foreign currency translation reserve 194.5 194.5
Merger reserves 671.5 671.5
Retained earnings (423.8) (360.3)
Total equity 1,953.6 2,015.6
During the year the Company made a loss of $68.0 million (2022: $179.5 million loss).
Approved by the Board and authorised for issue on 5 March 2024.
Rahul Dhir Richard Miller
Chief Executive Oicer Chief Financial Oicer
5 March 2024 5 March 2024
180 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Compn sttement of chnes n equt
Year ended 31 December 2023
Share
capital
$m
Share
premium
$m
Foreign
currency
translation
reserve
$m
Merger
reserves
$m
Retained
earnings
$m
Total
equity
$m
As 1 January 2022 214.2 1,294.7 194.5 671.5 (185.6) 2,189.3
Loss for the year – – – – (179.5) (179.5)
Exercising of employee share options 1.0 – – – (1.0) –
Share-based payment charges – – – – 5.8 5.8
As 1 January 2023 215.2 1,294.7 194.5 671.5 (360.3) 2,015.6
Loss for the year – – – – (68.0) (68.0)
Exercising of employee share options 1.5 – – – (1.5) –
Share-based payment charges – – – – 6.0 6.0
At 31 December 2023 216.7 1,294.7 194.5 671.5 (423.8) 1,953.6
Tullow Oil plc Annual Report and Accounts 2023 – 181
Financial statements Supplementary informationStrategic report Corporate governance
Compn ccountn polces
As at 31 December 2023
() Generl nformton
Kingdom under the Companies Act. The address of the
registered oice is Tullow Oil plc, Building 9, Chiswick Park,
566 Chiswick High Road, London W4 5XT. The Financial
Statements are presented in US dollars and all values
are rounded to the nearest $0.1 million, except where
otherwise stated. Tullow Oil plc is the ultimate Parent of
the Group.
(b) Bss of preprton
The Company meets the deinition of a qualifying entity
under Financial Reporting Standard 100 (FRS 100)
issued by the Financial Reporting Council. The Financial
Statements have therefore been prepared in accordance
with Financial Reporting Standard 101 (FRS101) Reduced
Disclosure Framework as issued by the Financial
Reporting Council.
The following exemptions from the requirements of IFRS
have been applied in the preparation of these Financial
Statements, in accordance with FRS 101:
• Paragraphs 45(b) and 46 to 52 of IFRS 2 Share-based
Payment (details of the number and weighted average
exercise prices of share options, and how the fair value
of goods or services received was determined).
• IFRS 7 Financial Instruments: Disclosures.
• Paragraphs 91 to 99 of IFRS 13 Fair Value Measurement
(disclosure of valuation techniques and inputs used for
fair value measurement of assets and liabilities).
• Paragraph 38 of IAS 1 Presentation of Financial
Statements – comparative information requirements in
respect of certain assets.
The following paragraphs of IAS 1 Presentation of Financial
Statements:
• 10(d) (statement of cash lows).
• 111 (cash low statement information).
• 134–136 (capital management disclosures).
• IAS 7 Statement of Cash Flows.
• Paragraphs 30 and 31 of IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors.
• Paragraph 17 of IAS 24 Related Party Disclosures (key
management compensation).
• The requirements in IAS 24 Related Party Disclosures,
todisclose related party transactions entered into
between two or more members of a group. Where
relevant, equivalent disclosures have been given in the
Group accounts.
The Financial Statements have been prepared on the
historical cost basis, except for derivative inancial
instruments that have been measured at fair value.
The Company has applied the exemption from the
requirement to publish a separate proit and loss account
for the Parent Company set out in section 408 of the
Companies Act 2006.
During the year the Company made a loss of $68.0 million
(2022: $179.5 million loss).
(c) Gon concern
Refer to the Basis of preparation in the Accounting Policies
section of the Group accounts.
(d) Foren currences
The US dollar is the functional and presentational currency
of the Company. Transactions in foreign currencies are
translated at the rates of exchange ruling at the transaction
date. Monetary assets and liabilities denominated in
foreign currencies are translated into US dollars at the
rates of exchange ruling at the balance sheet date, with a
corresponding charge or credit to the income statement.
However, exchange gains and losses arising on long-term
foreign currency borrowings, which are a hedge against
the Company’s overseas investments, are dealt with
in reserves.
(e) Shre-bsed pments
The Company has applied the requirements of IFRS 2
Share-based Payments. The Company has share-based
awards that are equity settled and cash settled as deined
by IFRS 2. The fair value of the equity settled awards
has been determined at the date of grant of the award
allowing for the eect of any market-based performance
conditions. This fair value, adjusted by the Company’s
estimate of the number of awards that will eventually vest
as a result of non-market conditions, is expensed uniformly
over the vesting period.
The fair values were calculated using a binomial option
pricing model with suitable modiications to allow for
employee turnover after vesting and early exercise. Where
necessary, this model is supplemented with a Monte Carlo
model. The inputs to the models include: the share price at
date of grant; exercise price; expected volatility; expected
dividends; risk-free rate of interest; and patterns of exercise
of the plan participants.
For cash settled awards, a liability is recognised for the
goods or service acquired, measured initially at the fair
value of the liability. Ateach balance sheet date until the
liability is settled, and at the date of settlement, the fair
value of the liability is remeasured, with any changes in fair
value recognised in the income statement.
(f) Investments
Investments in subsidiaries are accounted for at cost less
any provision for impairment.
182 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Compn ccountn polces contnued
As at 31 December 2023
() Fnncl ssets
The Company classiies its inancial assets in the following
categories: at fair value through proit or loss; and loans
and receivables. The classiication depends on the
purpose for which the inancial assets were acquired.
Management determines the classiication of its inancial
assets at initial recognition. As of 31 December 2023, all
inancial assets were classiied at amortised cost.
Assets are classiied and measured at amortised cost when
the business model of the Company is to collect contractual
cash lows and the contractual terms give rise to cash lows
that are solely payments of principal and interest. These
assets are carried at amortised cost using the eective
interest method if the time value of money is signiicant.
Gains and losses are recognised in proit or loss when the
assets are derecognised, modiied or impaired.
(h) Fnncl lbltes
The measurement of inancial liabilities is determined by
the initial classiication.
) Fnncl lbltes t fr vlue throuh proft
orloss
Those balances that meet the deinition of being held for
trading are measured at fair value through proit or loss.
Such liabilities are carried on the balance sheet at fair value
with gains or losses recognised in the income statement.
Intercompany derivative liabilities fall under this category
of inancial instruments.
) Fnncl lbltes mesured t mortsed cost
All inancial liabilities not meeting the criteria of being
classiied at fair value through proit or loss are classiied
as inancial liabilities measured at amortised cost. The
instruments are initially recognised at their fair value net
of transaction costs that are directly attributable to the
issue of inancial liability. Subsequent to initial recognition,
inancial liabilities are measured at amortised cost using
the eective interest method.
Borrowings and trade creditors fall under this category of
inancial instruments.
() Shre ssue expenses
Costs of share issues are written o against the premium
arising on the issues of share capital.
() Fnnce costs of debt
Finance costs of debt are recognised in the proit and loss
account over the term of the related debt at a constant
rate on the carryingamount.
Interest-bearing borrowings are recorded as the proceeds
received, net of direct issue costs. Finance charges,
including premiums payable on settlement or redemption
and direct issue costs, are accounted for on an accruals
basis in the income statement using the eective interest
method and are added to the carrying amount of the
instrument to the extent that they are not settled in the
period in which they arise.
() Txton
Current and deferred tax, including UK corporation tax
and overseas corporation tax, are provided at amounts
expected to be paid using the tax rates and laws that have
been enacted or substantively enacted by the balance
sheet date. Deferred corporation tax is recognised on
all temporary dierences that have originated but not
reversed at the balance sheet date where transactions or
events that result in an obligation to pay more, or right to
pay less, tax in the future have occurred at the balance
sheet date. Deferred tax assets are recognised only to the
extent that it is considered more likely than not that there
will be suitable taxable proits from which the underlying
temporary dierences can be deducted. Deferred tax is
measured on a non-discounted basis.
Deferred tax is provided on temporary dierences
arising on acquisitions that are categorised as business
combinations. Deferred tax is recognised at acquisition
as part of the assessment of the fair value of assets and
liabilities acquired. Any deferred tax is charged or credited
in the income statement as the underlying temporary
dierence is reversed.
(l) Cptl mnement
The Company deines capital as the total equity of the
Company. Capital is managed in order to provide returns
for shareholders and beneits to stakeholders and to
safeguard the Company’s ability to continue as a going
concern. Tullow is not subject to any externally imposed
capital requirements. To maintain or adjust the capital
structure, the Company may adjust the dividend payment
to shareholders, return capital, issue new shares for cash,
repay debt, and put in place new debt facilities.
Tullow Oil plc Annual Report and Accounts 2023 – 183
Financial statements Supplementary informationStrategic report Corporate governance
(m) Crtcl ccountn udements nd e
sources of estmton uncertnt
The Group assesses critical accounting judgements
annually. The following are the critical judgements, apart
from those involving estimations which are dealt with in
policy (af), that the Directors have made in the process of
applying the Group’s accounting policies and that have the
most signiicant eect on the amounts recognised in the
Financial Statements.
Investments (note 1)
The Company is required to assess the carrying values of
each of its investments in subsidiaries for impairment. The
net assets ofcertain of the Company’s subsidiaries are
predominantly intangible exploration and evaluation (E&E)
and property, plant and equipment assets.
Where facts and circumstances indicate that the carrying
amount of an E&E asset held by a subsidiary may exceed
its recoverable amount, by reference to the speciic
indicators of impairment of E&E assets, an impairment test
of the asset is performed by the subsidiary undertaking
and the asset is impaired by any dierence between its
carrying value and its recoverable amount. Therecognition
of such an impairment by a subsidiary is used by the
Company as the primary basis for determining whether or
not there are indications that the investment in the related
subsidiary may also be impaired, and thus whether an
impairment test of the investment carrying value needs
to be performed. The results of exploration activities are
inherently uncertain and the assessment ofimpairment
of E&E assets by the subsidiary, and that of the related
investment by the Company, is judgemental.
For property, plant and equipment, the value of assets/
ields supporting the investment value is assessed by
estimating the discounted future cash lows based on
management’s expectations of future oil and gas prices
and future costs.
In order to discount the future cash lows the Group
calculates CGU-speciic discount rates. The discount rates
are based on an assessment of a relevant peer group’s
post-tax weighted average cost of capital (WACC). The
post-tax WACC is subsequently grossed up to a pre-
tax rate. The Group then deducts any exploration risk
premium which is implicit within a peer group’s WACC and
subsequently applies additional country risk premium for
all CGUs, an element of which is determined by whether
the assets are onshore or oshore. Refer to notes 8 and 9
to the Group Financial Statements.
Where there is evidence of economic interdependency
between ields, such as common infrastructure, the ields
are grouped as a single CGU for impairment purposes.
Refer to note 1 for sensitivities.
184 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Compn Fnncl Sttements
Year ended 31 December 2023
Note 1 Investments
2023
$m
2022
$m
Subsidiary undertakings 4,484.2 4,863.7
4,484.2 4,863.7
The movement in Company’s investment in subsidiaries of $379.5 million (2022: $163.1 million) is due to additions of
$245.1 million (2022: $665.6 million) and impairment charge of $624.6 million (2022: $502.5 million impairment charge)
which was recognised against the Company’s investments in subsidiaries in relation to losses incurred by Group service
companies and exploration companies and reduction to the underlying value of the Group’s production companies.
(Refer to notes 8 and 9 in the Notes to the Group Financial Statements.)
Trigger for
2023
impairment
2023
Impairment/
(reversal)
$m
2023
Remaining
recoverable
amount
$m
2022
Impairment
$m
2022
Remaining
recoverable
amount
$m
Tullow Group Services Limited a 5.7 – 5.4 –
Tullow Overseas Holdings B.V. a,b 764.5 4,261.5 497.1 4,786.6
Tullow Oil SPE Limited c (112.8) 178.1 – 65.3
Tullow Gabon Holdings Limited n/a – 11.8 – 11.8
Tullow Oil Finance Limited c (32.8) 32.8 – –
Total 624.6 4,484.2 502.5 4,863.7
a. Reduction in net asset value as a result of impairment of direct and indirect subsidiaries.
b. Impact of loss-making subsidiaries.
c. Impairment reversal due to increased net asset value of a direct subsidiary.
The Company’s subsidiary undertakings as at 31 December 2023 are listed on pages 175 to 176. The principal activity of all
companies relates to oil and gas exploration, development and production.
Senstvtes
The value of property, plant and equipment and E&E assets supporting the investment value will be aected by the potential
future changes to oil prices and discount rates. All impairment assessments are prepared on a VIU basis using discounted
future cash lows based on 2P reserves proiles. A reduction or increase in the two-year forward curve of $5/bbl, based on
the approximate range of annualised average oil price over recent history, and a reduction or increase in the medium and
long-term price assumptions of $5/bbl, based on the range of annualised average historical prices, are considered to be
reasonably possible changes for the purposes of sensitivity analysis. Decreases to oil prices speciied in note 9 to the Group
Financial Statements would increase the investment impairment charge by $460.7 million, whilst increases to oil prices
speciied above would result in a credit to the investment impairment charge of $459.2 million. A 1% change in the pre-tax
discount rate would increase the impairment by $196.0 million. The Company believes a 1% change in the pre-tax discount
rate to be a reasonable possibility based on historical analysis of the Company’s and peer group of companies’ impairments.
Clmte chne
The value of property, plant and equipment and E&E assets supporting the investment value will be aected by
the potential future impact of Climate Change. The Company estimates that the impact on oil and carbon prices
as contained in the NZE scenarios on the value of assets held by subsidiaries could result in a potential write-o of
investments of up to $1,280.4 million. Refer to note 25 to the Group Financial Statements.
Note 2 Deferred tx
The Company has tax losses of $1,306.0 million (2022: $1,289.5 million) that are available indeinitely for oset against
future non-ring-fenced taxable proits in the Company. A deferred tax asset of $nil (2022: $nil) has been recognised
in respect of these losses on the basis that the Company does not anticipate making non-ring-fenced proits in the
foreseeable future.
Tullow Oil plc Annual Report and Accounts 2023 – 185
Financial statements Supplementary informationStrategic report Corporate governance
Note 3 Other current ssets
Amounts flln due wthn one er
2023
$m
2022
$m
Other debtors 0.9 4.9
Due from subsidiary undertaking 4.2 4.2
5.1 9.1
The amounts due from subsidiary undertaking relates to a balance from Tullow Overseas Holdings B.V.. The balance accrues
no interest and is repayable on demand. At 31 December 2023 aprovision of $nil (2022: $nil) was held in respect of the
recoverability of amounts due from subsidiary undertaking.
Note 4 Trde nd other pbles
Amounts flln due wthn one er
2023
$m
2022
$m
Accrued interest 33.3 40.9
Accruals 7.7 9.0
Due to subsidiary undertakings 389.6 144.5
430.6 194.4
Note 5 Borrowns
2023
$m
2022
$m
Current
Borrowings – within one year
10.25% Senior Secured Notes due 2026 100.0 100.0
100.0 100.0
Non-current
Borrowings – after one year but within ive years
7.00% Senior Notes due 2025 489.0 792.8
10.25% Senior Secured Notes due 2026 1,371.0 1,580.0
Secured Notes Facility due 2028 124.6 –
1,984.6 2,372.8
Carrying value of total borrowings 2,084.6 2,472.8
The Company’s capital structure includes $1,485 million Senior Secured Notes (2026 Notes), $493 million Senior Notes
(2025 Notes), a $400 million Secured Notes Facility and a $500 undrawn million Super Senior Revolving Credit Facility
(SSRCF) which will primarily be used for working capital purposes.
The 2026 Notes, maturing in May 2026, require an annual prepayment of $100 million, in May, of the outstanding principal
amount plus accrued and unpaid interest, with the balance due on maturity.
On 15 May 2023, the Company made a mandatory prepayment of $100 million of the 2026 Notes.
On 20 June 2023, the Company repurchased $167 million nominal value of 2025 Notes for $100 million cash
consideration through an Unmodiied Dutch Auction. A gain on early bond buyback of $65 million is recognised as other
income in the income statement.
186 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Note 5 Borrowns contnued
On 13 November 2023, Tullow announced that it had entered into a $400 million secured notes facility agreement
maturing in November 2028 (Secured Notes Facility) with Glencore Energy UK Limited (Glencore). The Secured Notes
Facility is available for 18 months and proceeds are available for liability management of the 2025 Notes. The interest on
the Secured Notes Facility will be Term Secured Overnight Financing Rate (SOFR) plus 10% on drawn amounts.
On 1 December 2023, the Company repurchased $115 million nominal value of 2026 Notes for $103 million cash
consideration through an Unmodiied Dutch Auction. A gain on early bond buyback of $11 million is recognised as other
income in the income statement.
On 20 December, the Company repurchased $141 million nominal value of 2025 Notes for $130 million cash
consideration through a Modiied Dutch Auction. The cash consideration was funded through an equivalent drawdown
under the Secured Notes Facility. A gain on early bond buyback of $10 million is recognised as other income in the
income statement.
The Company’s total drawn debt reduced to $2.1 billion, consisting of $493 million nominal value 2025 Notes, $1,485
million nominal value 2026 Notes and $130 million outstanding under the Secured Notes Facility.
The 2025 Notes are due in a single payment in March 2025.
The SSRCF, maturing in December 2024, comprises of (i) a $500 million revolving credit facility and (ii) a $100 million
letter of credit facility. The revolving credit facility remains undrawn as at 31 December 2023. Letters of credit amounting
to $10 million (2022: $44 million) have been issued under the facility.
Unamortised debt arrangement fees for the 2026 Notes, 2025 Notes, Secured Notes Facility and the SSRCF are $14.3
million (2022: $20.0 million), $3.6 million (2022: $7.0 million), $5.0 million (2022: $nil) and $2.3 million (2022: $4.8 million)
respectively.
The SSRCF, the 2026 Notes and the Secured Notes Facility are senior secured obligations of Tullow Oil Plc and are
guaranteed by certain of the subsidiaries of the Group.
The Company or its ailiates may, at any time and from time to time, seek to retire or purchase outstanding debt through
cash purchases and/or exchanges, in open-market purchases, privately negotiated transactions or otherwise. Such
repurchases or exchanges, if any, will be upon such terms and at such prices as management may determine, and will
depend on prevailing market conditions, liquidity requirements, contractual restrictions, and other factors.
Note 6 Fnncl nstruments
Dsclosure exemptons dopted
Where equivalent disclosures for the requirements of IFRS 7 Financial Instruments: Disclosures and IFRS 13 Fair Value
Measurements have been included in the 2023 Annual Report and Accounts of Tullow Oil plc, the Company has adopted
the disclosure exemptions available to the Company’s accounts.
Fnncl rs mnement obectves
The Company follows the Group’s policies for managing all its inancial risks.
Fr vlues of dervtve nstruments
All derivatives are recognised at fair value on the balance sheet with valuation changes recognised immediately in
the income statement. Fair value is the amount for which the asset or liability could be exchanged in an arm’s-length
transaction at the relevant date. Where available, fair values are determined using quoted prices in active markets. To the
extent that market prices are not available, fair values are estimated by reference to market-based transactions or using
standard valuation techniques for the applicable instruments and commodities involved.
The Company’s derivative carrying and fair values were as follows:
Assets/liabilities
2023
Less than
1 year
$m
2023
1–3 years
$m
2023
Total
$m
2022
Less than
1 year
$m
2022
1–3 years
$m
2022
Total
$m
Option market value
Oil derivatives (28.1) – (28.1) (162.1) (50.0) (212.1)
Deferred premium
Oil derivatives (8.3) – (8.3) (24.2) (8.2) (32.4)
Total liabilities (36.4) – (36.4) (186.3) (58.2) (244.5)
Notes to the Compn Fnncl Sttements contnued
Year ended 31 December 2023
Tullow Oil plc Annual Report and Accounts 2023 – 187
Financial statements Supplementary informationStrategic report Corporate governance
Note 6 Fnncl nstruments contnued
Fr vlues of dervtve nstruments contnued
The following provides an analysis of the Company’s inancial instruments measured at fair value, grouped into Levels 1 to
3 based on the degree to which the fair value is observable:
Level 1: fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets
or liabilities;
Level 2: fair value measurements are those derived from inputs other than quoted prices included within Level 1 which are
observable for the asset or liability, either directly or indirectly; and
Level 3: fair value measurements are those derived from valuation techniques which include inputs for the asset or
liability that are not based on observable market data.
All of the Company’s derivatives are Level 2 (2022: Level 2). There were no transfers between fair value levels during the year.
For inancial instruments which are recognised on a recurring basis, the Company determines whether transfers have
occurred between levels by re-assessing categorisation (based on the lowest-level input which is signiicant to the fair
value measurement asawhole) at the end of each reporting period.
Income sttement summr
Derivative fair value movements during the year which have been recognised in the income statement were as follows:
Loss on derivative instruments
2023
$m
2022
$m
Oil derivatives 208.1 72.4
Csh flow nd nterest rte rs
The interest rate proile of the Company’s inancial assets and liabilities, excluding trade and other receivables and trade
and other payables, at 31 December 2023 and 31 December 2022 was as follows:
2023
Cash
at bank
$m
2023
Fixed
rate debt
$m
2023
Floating
rate debt
$m
2023
Total
$m
2022
Cash
at bank
$m
2022
Fixed
rate debt
$m
2022
Total
$m
US$ 15.9 (1,977.8) (129.6) (2,091.5) 54.5 (2,500.0) (2,445.5)
15.9 (1,977.8) (129.6) (2,091.5) 54.5 (2,500.0) (2,445.5)
Cash and cash equivalents consisted of $11.0 million (2022: $50.0 million) of short-term deposits that are readily
convertible to known amounts of cash with insigniicant risk of change in value. The Company only deposits cash with
major banks of high-quality credit standing.
Lqudt rs
The following table details the Company’s remaining contractual maturities for its non-derivative inancial liabilities with
agreed repayment periods. The tables have been drawn up based on the undiscounted cash lows of inancial liabilities
based on the earliest date on which the Company can be required to pay.
Weighted
average
eective
interest rate
Less than
1 month
$m
1–3
months
$m
3 months
to 1 year
$m
1–5
years
$m
5+
years
$m
Total
$m
31 December 2023
Non-interest bearing – 11.6 419.0 – – 430.6
Fixed interest rate instruments 9.9%
Principal repayments – – 100.0 1,878.0 – 1,978.0
Interest charge – 17.0 164.0 220.0 – 401.0
Variable interest rate instruments 15.8%
Principal repayments – – – 130.0 – 130.0
Interest charge – 5.0 15.0 69.0 – 89.0
33.6 698.0 2,297.0 – 3,028.6
188 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Note 6 Fnncl nstruments contnued
Lqudt rs contnued
Weighted
average
eective
interest rate
Less than
1 month
$m
1–3
months
$m
3 months
to 1 year
$m
1–5
years
$m
5+
years
$m
Total
$m
31 December 2022
Non-interest bearing n/a – 18.7 175.7 – – 194.4
Fixed interest rate instruments 9.7%
Principal repayments – – 100.0 2,400.0 – 2,500.0
Interest charge – 28.0 197.0 464.0 – 689.0
– 46.7 472.7 2,864.0 – 3,383.4
Note 7 Clled-up equt shre cptl nd shre premum ccount
Allotted equt shre cptl nd shre premum
Equity share
capital allotted
and fully paid
Number
Share
capital
$m
Share
premium
$m
At 1 January 2022 1,432,080,097 214.2 1,294.7
Issued during the year
Exercise of share options 7,525,898 1.0 –
At 1 January 2023 1,439,605,995 215.2 1,294.7
Issued during the year
Exercise of share options 12,935,892 1.5 –
At 31 December 2023 1,452,541,887 216.7 1,294.7
The Company does not have a maximum authorised share capital. The par value of the Company’s shares is 10p.
Notes to the Compn Fnncl Sttements contnued
Year ended 31 December 2023
Tullow Oil plc Annual Report and Accounts 2023 – 189
Financial statements Supplementary informationStrategic report Corporate governance
Alterntve performnce mesures
The Group uses certain measures of performance that
are not speciically deined under IFRS or other generally
accepted accounting principles. These non-IFRS measures
include capital investment, net debt, gearing, adjusted
EBITDAX, underlying cash operating costs, free cash
low, underlying operating cash low and pre-inancing
cash low.
Cptl nvestment
Capital investment is deined as additions to property,
plant and equipment and intangible exploration and
evaluation assets less decommissioning asset additions,
right-of-use asset additions, capitalised share-based
payment charge, capitalised inance costs, additions
to administrative assets and certain other adjustments.
The Directors believe that capital investment is a
useful indicator of the Group’s organic expenditure on
exploration and evaluation assets and oil and gas assets
incurred during a period because it eliminates certain
accounting adjustments such as capitalised inance costs
and decommissioning assetadditions.
2023
$m
2022
$m
Additions to property, plant
andequipment 416.1 370.7
Additions to intangible exploration
andevaluation assets 25.4 39.2
Less:
Changes to Decommissioning
asset estimates 47.8 (19.9)
Right-of-use asset additions 81.1 63.5
Lease payments related to
capitalactivities (53.6) (40.2)
Additions to administrative assets 2.3 2.0
Other non-cash capital movements (16.0) 50.4
Capital investment 379.9 354.1
Movement in working capital (89.7) (49.7)
Additions to administrative assets 2.3 2.0
Cash capital expenditure
per the cash low statement
292.5
306.4
Net debt
Net debt is a useful indicator of the Group’s indebtedness,
inancial lexibility and capital structure because it
indicates the level of cash borrowings after taking account
of cash and cash equivalents within the Group’s business
that could be utilised to pay down the outstanding cash
borrowings. Net debt is deined as current and non-current
borrowings plus non-cash adjustments, less cash and cash
equivalents. Non-cash adjustments include unamortised
arrangement fees, adjustment to convertible bonds, and
other adjustments. The Group’s deinition of net debt does
not include the Group’s leases as the Group’s focus is the
management of cash borrowings and a lease is viewed as
deferred capital investment.
The value of the Group’s lease liabilities as at 31 December
2023 was $185.7 million current and $721.0 million non-current;
it should be noted that these balances are recorded gross for
operated assets and are therefore not representative of the
Group’s net exposure under these contracts.
2023
$m
2022
$m
Borrowings 2,084.6 2,472.8
Non-cash adjustments 22.8 27.2
Less cash and cash equivalents (499.0) (636.3)
Net debt 1,608.4 1,863.7
Gern nd dusted EBITDAX
Gearing is a useful indicator of the Group’s indebtedness,
inancial lexibility and capital structure and can assist
securities analysts, investors and other parties to evaluate
the Group. Gearing is deined as net debt divided by
adjusted EBITDAX. Adjusted EBITDAX is deined as (loss)/
proit from continuing activities adjusted for income tax
expense, inance costs, inance revenue, loss/(gain) on
hedging instruments, gain on bargain purchase, other
losses, depreciation, depletion and amortisation, share-
based payment charge, restructuring costs, loss/(gain) on
disposal, gain on bond buy back, exploration costs written
o, impairment of property, plant and equipment net and
provision (reversal)/expense.
2023
$m
2022
$m
(Loss)/ proit from continuing activities (109.6) 49.1
Adjusted for:
Income tax expense 205.5 393.0
Finance costs 329.6 335.5
Finance revenue (44.0) (42.9)
Loss/ (gain) on hedging instruments 0.4 (0.8)
Gain on bargain purchase – (196.8)
Other gains (0.2) (0.4)
Depreciation, depletion and
amortisation 436.6 425.8
Share-based payment charge 6.0 5.8
Provision (reversal)/expense (22.0) 4.2
Gain on bond buyback (86.0) –
Exploration costs written o 27.0 105.2
Impairment of property, plant and
equipment, net 408.1 391.2
Adjusted EBITDAX 1,151.4 1,468.9
Net debt 1,608.4 1,863.7
Gearing (times) 1.4 1.3
190 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Alterntve performnce mesures contnued
Underln csh opertn costs
Underlying cash operating costs is a useful indicator
of the Group’s costs incurred to produce oil and gas.
Underlying cash operating costs eliminates certain non-
cash accounting adjustments to the Group’s cost of sales
to produce oil and gas. Underlying cash operating costs
is deined as cost of sales less operating lease expense,
depletion and amortisation of oil and gas assets, underlift,
overlift and oil stock movements, share-based payment
charge included in cost of sales, royalties and certain other
cost of sales. Underlying cash operating costs are divided
by production to determine underlying cash operating
costs per boe. In 2022 and 2023 Tullow incurred abnormal
non- recurring costs which are presented separately
below. The adjusted normalised cash operating costs
are a helpful indicator to the forward underlying costs of
the business.
2023
$m
2022
$m
Cost of sales 869.2 697.5
Add:
Lease payments related to
operating activity 7.2 14.0
Less:
Depletion and amortisation of oil and
gas and leased assets 430.8 410.7
Underlift, overlift and oil
stock movements 109.3 (46.3)
Share-based payment charge included
in cost of sales 0.4 0.4
Royalties 33.9 61.7
Other cost of sales 9.1 18.5
Underlying cash operating costs 292.9 266.5
Non-recurring costs (25.9) (14.7)
Total normalised cash
operating costs 267.0 251.8
Production (mmboe) 22.9 21.6
Underlying cash operating costs
per boe ($/boe) 12.8 12.3
Normalised cash operating costs
per boe ($/boe) 11.7 11.3
Free csh flow
Free cash low is a useful indicator of the Group’s ability
to generate cash low to fund the business and strategic
acquisitions, reduce borrowings and provide returns to
shareholders through dividends. Free cash low is deined
as net cash from operating activities, and net cash used in
investing activities, less debt arrangement fees, repayment
of obligations under leases, inance costs paid, and foreign
exchange gain/(loss).
2023
$m
2022
$m
Net cash from operating activities 876.2 1,07 7.8
Net cash used in investing activities (268.5) (356.2)
Repayment of obligations under leases (195.0) (203.8)
Finance costs paid (240.0) (249.0)
Foreign exchange gain (2.5) (1.6)
Free cash low 170.2 267.2
Underln opertn csh flow
This is a useful indicator of the Group’s assets' ability
to generate cash low to fund further investment in
the business, reduce borrowing and provide returns to
shareholders. Underlying operating cash low is deined
as net cash from operating activities less repayments
of obligations under leases plus decommissioning
expenditure.
Pre-fnncn free csh flow
This is a useful indicator of the Group’s ability to generate
cash low to reduce borrowings and provide returns to
shareholders through dividends. Pre-inancing free cash
low is deined as net cash from operating activities, and
net cash used in investing activities, less repayment of
obligations under leases and foreign exchange gain.
2023 2022
Net cash from operating activities 876.2 1,07 7.8
Decommissioning expenditure 78.1 57.7
Lease payments related to
capitalactivities 53.6 40.2
Repayment of obligations under leases (195.0) (203.8)
Underlying operating cash low 812.9 971.9
Net cash used in investing activities (268.5) (356.2)
Decommissioning expenditure (78.1) (57.7)
Lease payments related to
capitalactivities (53.6) (40.2)
Pre-inancing free cash low 412.7 517.8
Tullow Oil plc Annual Report and Accounts 2023 – 191
Financial statements Supplementary informationStrategic report Corporate governance
Ghana Non-Operated Kenya
6
Exploration Total
Oil
mmbbl
Gas
bcf
Oil
mmbbl
Gas
bcf
Oil
mmbbl
Gas
bcf
Oil
mmbbl
Gas
bcf
Oil
mmbbl
Gas
bcf
Petroleum
mmboe
Commercial reserves
1
1 January 2023 164.3 157.3 37.8 5.1 – – – – 202.1 162.4 229.1
Revisions
3,4
(4.9) 8.4 7.0 2.8 – – – – 2.1 11.2 4.0
Production (15.5) (14.0) (4.9) (1.1) – – – – (20.4) (15.1) (22.9)
Acquisitions – – 7.5 – – – – – 7.5 – 7.5
Disposals – – (5.5) – – – – – (5.5) – (5.5)
31 December 2023 143.9 151.7 41.9 6.8 – – – – 185.8 158.5 212.2
Contingent resources
2
1 January 2023 185.0 577.8 36.0 8.6 231.4 – 54.5 – 506.9 586.4 604.6
Revisions
3,4,6
(32.2) (66.8) (4.1) 1.1 – – – (30.4) (65.7) (41.4)
Acquisitions
– – 3.2 – 239.0 – – – 242.2 – 242.2
Disposals – – (5.9) – – (54.5) – (60.4) – (60.4)
31 December 2023 152.8 511.0 35.1 9.7 470.4 – – – 658.3 520.7 745.0
Total
31 December 2023 296.6 662.7 77.0 16.5 470.4 – – – 844.1 679.2 957.2
1. Reserves presented are 'Proven and Probable'. They are as audited and reported by independent third-party reserves auditor at YE 2023 and adjusted
for production for January - December 2023.
2. Contingent Resources are 'Proven and Probable'. They are as audited and reported by independent third-party reserves auditor as at YE 2023 based on
best available information.
3. Reserves and Resources revisions in Ghana relate to evaluation of the Jubilee South East (JSE) project, inill drilling and ield performance in Jubilee
during 2023, which is oset by the recategorisation of the Tweneboa oil project from reserves to contingent resource.
4. Reserves revisions in Gabon mainly relate to extension of Production licences except for Etame and Ezanga, maturation of Echira Inill wells and overall
good ield performance across all assets.
5. Reserves revisions in Gabon also include an asset swap with Perenco, in which M’Oba, Oba, Limande, Turnix and a percentage of Simba have been
exchanged for an increased working interest in Tchatamba and the DE8 licence.
6. Kenya contingent resources have doubled to 470mmstb, with Tullow now holding 100% of the licence, and a Field Development Plan under discussion
with government.
7. Guyana contingent resources have been removed following agreement with our JV Partner Eco and the expiry of the Kanuku licence.
8. A gas conversion factor of 6 mscf/boe is used to calculate the total Petroleum mmboe.
The Group provides for depletion and amortisation of tangible ixed assets on a net entitlements basis, which relects
the terms of the Production Sharing Contracts related to each ield. Total net entitlement reserves were 204.5 mmboe
at31December 2023 (31 December 2022: 219.6 mmboe).
Contingent Resources relate to resources in respect of which development plans are in the course of preparation or
further evaluation is under way with a view to future development.
Commercl reserves nd contnent resources summr
(unudted) worn nterest bss
192 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Shreholder nformton
Fnncl clendr
2023 full-year results announced 6 March 2024
Annual General Meeting 16 May 2024
AGM trading update 16 May 2024
2024 half-year results announced 7 August 2024
November trading update 13 November 2024
Shreholder enqures
All enquiries concerning shareholdings, including
notiication of change of address, loss of a share
certiicate or dividend payments, should be made to the
Company’sregistrar.
For shareholders on the UK register, Computershare
provides a range of services through its online portal,
Investor Centre, which can be accessed free of charge
at www.investorcentre.co.uk. Once registered, this
service, accessible from anywhere in the world, enables
shareholders to check details of their shareholdings or
dividends, download forms to notify changes in personal
details and access other relevant information.
Unted ndom restrr
Computershre Investor Servces PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZY
Tel – UK shareholders: 0370 703 6242
Tel – overseas shareholders: +44 870 703 6242
Contact: www.investorcentre.co.uk/contactus
Ghn restrr
The Centrl Securtes Depostor (Ghn) Lmted
4th Floor,
Cedi House,
P.M.B CT 465
Cantonments,
Accra, Ghana
Tel – Ghana shareholders: + 233 303 972 254/302 689 313
Contact: info@csd.com.gh
Shre deln fclt
The Company’s shares can be traded through most
banks, building societies, stockbrokers or ‘share shops’.
In addition, UK-based shareholders can buy or sell the
Company’s shares using a share dealing facility made
available by Computershare, which includes internet and
postal share dealing.
Internet shre deln
Internet share dealing is available to shareholders residing
in the UK. This service oers shareholders a straightforward
way to buy or sell the Company’s shares on the London Stock
Exchange. The commission is 1.4%, subject to a minimum
charge of £40. In addition, stamp duty, currently 0.5%, is
payable on purchases. Real-time dealing is available during
UK market hours (08:00 to 16:30). In addition, you can place
a sale instruction outside of market hours. To access the
service, log on to www.computershare.com/dealing/uk.
Shareholders must have their Shareholder Reference
Number (SRN) available. The SRN appears on share
certiicates. Internet share dealing is only available to
residents in either the UK, Channel Islands or Isle of Man.
Postl shre deln servce
The postal share dealing service oers a way to sell or
purchase shares (subject to availability). To use the service
you must be a resident of the UK or one of the permitted
jurisdictions. A full list of permitted jurisdictions can be found
at www.computershare.com/dealing/uk. If you wish to use
the service, you can download a postal share dealing form
and the terms and conditions at www.computershare.com/
dealing/uk. The fee for this service is 1.4% of the value of each
sale or purchase and is subject to a minimum charge of £40.
Stamp duty of 0.5% may be payable on purchases. Detailed
terms and conditions for both internet and postal dealing are
available upon request by calling +44 370 702 0000.
ShreGft
If you have a small number of shares whose value makes it
uneconomical to sell, you may wish to consider donating
them toShareGift, which is a UK-registered charity specialising
inrealising the value locked up in small shareholdings for
charitable purposes. The resulting proceeds are donated to
arange of charities, relecting suggestions received from
donors. Should you wish to donate your Tullow Oil plc shares
in this way, please download and complete a transfer form
from www.sharegift.org/forms, sign it and send it together
with the share certiicate to ShareGift, PO Box 72253, London
SW1P 9LQ. For more information regarding this charity, visit
www.sharegift.org.
Supplementary informationFinancial statementsCorporate governanceStrategic report
Tullow Oil plc’s commitment to environmental issues is relected in this Annual Report,
which has been printed on Arena Extra White Smooth, an FSC® certiied material.
This document was printed by Pureprint Group using its environmental print technology,
with 99% of dry waste diverted from landill, minimising the impact of printing on the
environment. The printer is a CarbonNeutral® company.
Electronc communcton
To reduce impact on the environment, the Company
encourages all shareholders to receive their shareholder
communications, including Annual Reports and notices
of meetings, electronically. Once registered for electronic
communications, shareholders will be sent an email
each time the Company publishes statutory documents,
providing a link to the information.
Shreholder securt
Shareholders are advised to be cautious of unsolicited
advice, oers to buy shares at a discount or oers of
free company reports. If you receive any unsolicited
investment advice:
• Obtain the name of the person and the organisation.
• Check they are authorised by the FCA by looking the
irm up on www.fca.org.uk/register.
• Report the matter to the FCA either by calling 0800 111
6768 or visit www.fca.org.uk/consumers.
Further information is available at
www.tullowoil.com/investors/shareholder-centre.
Corporte broers
Brcls
5 North Colonnade,
Canary Wharf,
London E14 4BB
Peel Hunt
100 Liverpool Street,
London EC2M 2AT
Audtor
Ernst nd Youn LLP
1 More London Place,
London SE1 2AF
Registered oice:
9 Chiswick Park
566 Chiswick High Road
London W4 5XT
Company registered in England
andWales No. 3919249
Tullow Oil plc Annual Report and Accounts 2023
www.tullowoil.com