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Tullow Oil plc
Annual Report and Accounts 2023
throuh responsble
ol nd s development
Buldn
better future
2023 results
Group worn nterest producton
62,700 boepd
2022: 61,100 boepd
Opertn csh flow
1
$813m
2022: $972m
Adusted EBITDAX
1
$12bn
2022: $1.5bn
(Loss)/Proft fter tx
$(110)m
2022: $49m
Cptl nvestment
1
$380m
2022: $354m
Free csh flow
1
$170m
2022: $267m
Net debt
1
$16bn
2022: $1.9bn
Gern
1
14 tmes
2022: 1.3 times
Read more on pages  to .
1. The Group uses certain performance measures that are not speciically 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
intotertiaryeducation.
Strtec 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
Corporte overnnce
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
Fnncl sttements
120 Independent auditor’s report to the members of
TullowOil plc
130 Group inancial statements
179 Company inancial statements
Supplementr nformton
189 Alternative performance measures
191 Commercial reserves and contingent resources
summary (unaudited) working interest basis
192 Shareholder information
Evolvn Tullow
Durn 2023 Tullow contnued to evolve nto more
focused, effcent nd fnncll reslent busness
Frm foundtons hve been ld for the future nd
 mterl step-up n csh flow enerton mrs
n mportnt nflecton pont nour busness pln
We believe the oil and gas industry can and will
contribute long-lasting economic and social beneits
indeveloping economies and our purpose is to
contribute to a better future through responsible
oil andgas development. In this Annual Report we
explain how weare working to do that by building
abetter 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 anumber of ishing communities in Ghana. This project has beneited 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  lnce
To fulil our purpose we must implement our strategy effectively
andatalltimes adhere to our values.
Our purpose
To build a better future through responsible oil and gas development.
Our vlues
Am hh
Have a growth mindset
andadapt to change.
Seize every opportunity to
learn and improve.
Work together to uncover
greater impact for our
business, stakeholders,
andthe 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
andintention.
Be true
Promote an inclusive and
fair environment where all
are supported, and every
voice and contribution
isrecognised.
Act responsibly, with
safetyas afundamental,
non-negotiable aspect
of our work.
Do what is right.
Our strte
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
Opertonl excellence
Maximising asset
performance through
safe, eicient and
reliableoperations.
Cptl effcenc
Managing cost and capital
todeliver a robust balance
sheet with inancial lexibility.
Busness rowth
Developing discovered
resources, near-ield and
infrastructure-led exploration
and securing value-
accretiveopportunities.
Read more on pages  to .
2 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Wht 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 opertons
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
aninclusive and diverse environment.
We are fostering a culture of
continuous improvement and we are
committed to ensuring every
individual feels recognised, respected
and proud ofthe 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
Chrs sttement
We are on track to create acapital
structure that will support future
growth and shareholder returns.
Phuthuma Nhleko
Chair
Performnce
I am very pleased to report that we have made good
progressacross the entire business during the year.
Despite an increasingly complex and diicult 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
visitour sites is paramount. During the year we recorded
astrong 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 eorts to reinforce our safety culture
andpractices.
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 tobecoming a resilient, low-debt business.
Free csh flow
1
$170m
2022: $267m
Net debt
1
$16bn
2022: $1.9bn
1. The Group uses certain performance measures that are not speciically deined under IFRS or other generally accepted accounting principles.
Thesealternative 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
Governnce
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 signiicant 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 Traigura
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 conirmed
as Chief Financial Oicer (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.
Buldn  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
aordable and reliable energy and must be able to beneit
from their vast pool of natural resources. During theyear
we have continued to work eectively 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).
Concluson
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 simpliied portfolio focused on Africa.
Based on this strengthened position and the material free
cash low, the Board looks to the future with conidence.
Phuthuma Nhleko
Chair
5 March 2024
Tullow Oil plc Annual Report and Accounts 2023 – 5
Financial statements Supplementary informationStrategic report Corporate governance
Chef Executve Offcers revew
Signiicant 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 conidence.
Rahul Dhir
Chief Executive Oicer
Successful delver of busness pln
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 outlows 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 signiicant 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 eiciency
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.
Sustnblt nd shred prospert
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
beneit 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
modiications 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.
Opertonl performnce
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.
Ghn
The start-up of production from the Jubilee South East
project in July was a landmark event, marking a step
change in the ields 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 beneit 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.
Contrbutn to Afrcs ener future
Prtnern wth
host ntons
We believe Africa
has potential to play
a growing role in
the energy supply
mix and the right
to beneit from its
natural resources.
Shrn
prospert
We deliver
economic and
social beneits
that boost local
economies and
support current and
future generations.
Supportn  ust
trnston
We are on track to
reduce emissions
while meeting
energy demand
and helping reverse
energy poverty.
Hrnessn
opportuntes
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 bllon
revenue to
Government
of Ghana
from 2010 to
2022 from
Jubilee and TEN
Our Net
Zero
by 2030
strategy
>30 bllon
bbls
proven
resources
inWest 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
Chef Executve Offcers sttement contnued
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
inlation 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 identiied
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 Proits
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.
Opertonl performnce contnued
Ghn contnued
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 eiciencies have
been driven by reducing non-productive time, improved
well design and more eective 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 eectively 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,
Evolvn Tullow
2020–2022
Embeddn our new
pproch
2023
‘Inflecton pont
2024–2025
Reslent, csh-enertve
busness
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
sustainproduction.
Sustain gross Jubilee production
c.100 kbopd.
Revenue stream from Ghana gas.
Reinancing 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.
Signiicant 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-operted nd explorton portfolos
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, relecting 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 inill 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 signiicant 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 diering 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 inill wells,
both in Gabon and the Jubilee area. These additions were
partly oset 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 classiied 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
identiied projects.
Tullow’s asset base continues to have signiicant 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 deined by independent third-
party reserves auditor, TRACS.
The Group’s audited 2C resources increased to 745
mmboe at the end of 2023 (2022: 605mmboe), relecting
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 inlection 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 conidence.
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 Oicer
5 March 2024
Tullow Oil plc Annual Report and Accounts 2023 – 9
Financial statements Supplementary informationStrategic report Corporate governance
Investment cse
Strong inancial and operational
performance.
30% rowth
Jublee 1H to 2H 2023 producton
Cash-generative business.
$800m
Free csh flow
1
over 2023-2025
t $80/bbl
Signiicant equity value accretion
as debt is repaid.
<$1bn nd 1x
Expected net debt
1
nd ern
1
b YE 2025
Optionality for investment, growth
andreturns.
Sustnble
Free csh flow
1
Building a unique African platform.
Growth
From ornc nd nornc
opportuntes
Attrctve sset portfolo
Ghn
Signiicant opportunities for inill
drilling, facilities expansion and new
oil and gas production from currently
undeveloped parts of the ields as
well as near-ield exploration.
Gbon nd Côte d’Ivore
Low-risk investment projects
with potential for fast
commercialisation, high
returnsand rapid payback.
en
Opportunity to realise value from
discovered resources.
A compelln vlue proposton
1. The Group uses certain performance measures that are not speciically deined under IFRS or other generally accepted accounting principles.
Thesealternative performance measures are explained on pages 189 and 190.
10 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements
Supplementary information
Strategic report
Mret overvew
A number of global dynamics are shaping the markets we operate in.
Geopoltcs
Geopolitical tension around the world continues
to drive uncertainty and signiicantly impact the
global economy.
During 2023, geopolitical tensions, including the conlict
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
aecting global economic growth.
Across sub-Saharan Africa, our key market, political
instability has continued with several military
coup détats 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.
Inlation 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 inlation 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
inlation, 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
inlationary 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 signiicant 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 respondn
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 unaected during the
recent coup.
Tullow Oil plc Annual Report and Accounts 2023 – 11
Financial statements Supplementary informationStrategic report Corporate governance
Ol prces
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 inlation 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 conlict 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.
Mret overvew contnued
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
muchnarrower range compared
with 2022 prices.
How we re respondn
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
Clmte chne nd ener trnston
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 insuicient 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
signiicantly 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 dierent
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 aected 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-insuicient-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/3d821c-6200-4808-b16d-ac9cb2207f11.
5. Source: www.africaclimatesummit.org/about.
How we re respondn
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
oset 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 busness 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 reltonshps
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
signiicant resources in Kenya.
Strong reputation as a
responsible oil and gas
operator and trusted partner.
Positive relationships with
localcommunities, host
nationgovernments 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.
Developnd
explore
We invest in further
development and exploration
around our existing ields to
maintain and grow production.
Hrness
opportuntes
We seek opportunities to bring
undeveloped resources to
production and acquire existing
producing ields to grow and
diversify our business.
Wht we do
14 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
How we operte
We strive to operate in a safe,
eficient and sustainable way
at alltimes.
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 strte s focused on
Operational
excellence
Capital
eficiency
Business
growth
Read more about our strategy on pages  to .
The vlue we crete
Our people
We provide employment,
competitive compensation and
beneits, and development
opportunities.
Emploees
1
399
Trnn nd development hours n 2023
+7,000
Host communtes nd overnments
Economic growth and
sustainabledevelopment, through
infrastructure developments, STEM
education and high-skill job
opportunities.
Totl soco-economc contrbuton
n lst fve ers
$31bn
Investors
2023 free csh flow
2
$170m
Supplers
Spent wth locl supplers n lst fve ers
$11bn
1. As at 31 December 2023.
2. The Group uses certain performance measures that are not speciically deined under IFRS or other generally accepted accounting principles.
Thesealternative 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 strte
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 usto grow our business to create lasting social and
economic beneits for our host nations and value for our wider stakeholders.
Our strtec themes
Opertonl excellence
Operating in a safe, eicient
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 eiciencies
and maximise return on
investments.
Cptl effcenc
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.
Busness 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 signiicant
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
Strte ncton
During the year we have achieved a number of strategic milestones.
Operational
excellence
Enhncn drlln
performnce
Top-tier drilling performance is being achieved
during our ongoing programme in Ghana. Thecost
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 signiicantly reducing non-
productive rig time, simplifying well designs and
more eective contracting. Our well engineering,
subsurface and operations teams are building
an excellent track record for eiciently delivering
complex wells onschedule and on budget with
results in line withexpectations.
Avere Ghn well costs n 2023
c$56 mllon
Tullow Oil plc Annual Report and Accounts 2023 – 17
Financial statements Supplementary informationStrategic report Corporate governance
Strte n cton contnued
Capital
eiciency
Delevern our
blnce sheet
We have made signiicant progress in reducing our
debt and addressing our debt maturities. During
the year we purchased portionsof 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 reinancing of the 2026 Notes.
Yer-end 2023 net debt
$16bn
2022: $1.9bn
18 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Business
growth
Incresn
productont
Jublee
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 signiicant proportion of the complex
Jubilee South East oshore 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 inill drilling.
Forecst 2024 Jublee ross producton
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) relect 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
Sfet
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
Fnncl performnce
(Cost and working capital
management)
Helps determine how eectively we are
deploying our strict cost framework and
our progress in maintaining cost discipline.
Normalised operating cash low at $902 million.
3
Producton
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 eiciency at 96%; TEN production
eiciency at 95%.
4
Busness pln
mplementton
Eective implementation of our capital
investment programmes underpins our
strategy and ensures capital eiciency.
100% of the 2023 capex work programme
completed in line with Budget. Delivery of
the Jubilee South East project represented a
signiicant 2023 milestone.
Part of the Mauritania decommissioning
programme deferred due to operational
issues. Operations to restart in 2024.
5
Sustnblt
If we are to fulil our purpose, we must
mitigate the impact of our operations
while generating social and economic
beneits for our host nations and
otherstakeholders.
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
Unlocn vlue
Provides laser focus on key strategic
operational projects.
Performance assessment focused on six
critical actions including the successful
delivery of reinancing 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
Ledershp effectveness
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 identiied 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
Trets nd performnce
Set out below are overviews of the targets and performance achieved in 2023 and the two prior years.
2023 corporte scorecrd
2022 corporte scorecrd
2021 corporte scorecrd
Safety Financial performance Production Business plan implementation Sustainability
Unlocking value Leadership eectiveness
Safety Financial performance Production Business plan implementation Sustainability
Unlocking value Leadership eectiveness
Safety Financial performance Production Business plan implementation Capital structure Sustainability
Leadership eectiveness
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 steholders
To fulil 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.
Enn wth
oursteholders
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 steholders nd how we ene wth them
Colleues
Enable us to deliver
our strategy
Host overnments
nd communtes
Impacted by what
we do
Investors nd
lenders
Provide capital
Supplers
Support our
business activities
ESG experts,
non-overnmentl
ornstons nd
ndustr peers
Share best practice
Wht mtters to them
Safe working
environment.
Fair compensation
and beneits.
Purpose and values-
based culture.
Engagement
including regular
and timely business
updates.
Development
opportunities.
Responsible
operator of national
assets.
Revenues and
taxesfrom
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 enement overvew
Town hall and team
meetings.
Engagement
surveys.
Local-level
engagement
including team
meetings.
Employee advisory
panel (the TAP).
Leadership coee
mornings and
brunches.
Senior
management
proactively engage
with government
oicials.
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.
Bord-level enement overvew
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
oset projects.
Regularly
updated on ESG
developments
aecting 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
in2023.
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
Secton 172 sttement
The Directors are required by law to act in a way that promotes the success
ofthe Company for the beneit 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 Companys 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 conlicted, 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 beneit 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
fulilled their duties.
Decson Areement wth Glencore Ener U Lmted (Glencore)
Context nd
ln to strte
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 otake contracts with Glencore for Tullows crude oil
entitlements from the Jubilee and TEN ields in Ghana and the Rabi Light entitlements in Gabon.
Steholder
consdered
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 befully addressed
and positions us for a successful reinancing of the 2026 Notes.
By entering into the Agreement Tullow seeks to manage its debt proiles 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 beneits for our host nations, job
security for our people and commercial beneits for our suppliers.
Read more about our strategy on pages  to .
Strategy key
Operational excellence Capital eiciency Business growth
24 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Decson Asset swp reement wth Perenco Ol nd Gs Gbon SA (Perenco)
Context nd
ln to strte
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.
Steholder
consdered
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 simpliies 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
ofour 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 beneits for our host nations, job security and development opportunities
for our people and commercial beneits for our suppliers.
Decson South Lochr Bsn – en updte
Context nd
ln to strte
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.
Steholder
consdered
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 beneits, 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
Sustnblt revew
2023 sustnblt hhlhts
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
inGhana.
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.
Duringthe year we have continued to implement our sustainability strategy
andhave 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.
Assurnce
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 sustnblt frmewor
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
Sfe opertons Shred Prospert Envronmentl
stewrdshp
Eqult nd
trnsprenc
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 signiicant sustainability impacts as
a precursor to updating our sustainability strategy and
targets to relect 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
Sfe opertons
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.
Occuptonl helth nd sfet
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 oshore worker in
the Jubilee ield who sustained injuries which required
osite 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 sfet
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 protecton nd emerenc 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 oshore 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
ouroverall emergency response preparedness.
Embeddn
proctve sfe
worn prctces
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.
Sustnblt revew contnued
1. HiPos are deined 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
Enn contrctors nd supplers
nsfet
At any given time, many workers at our facilities onshore
and oshore 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 dierent
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.
Emploee 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 oers 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 oered to all employees as an appreciation for
their hard work during the year.
Investn
nemploee
wellness
Our Global Wellness Fortnight event, which took
place in November 2023, oered 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 8events
during the year.
Tullow Oil plc Annual Report and Accounts 2023 – 29
Financial statements Supplementary informationStrategic report Corporate governance
Shred Prospert
Shared Prosperity is a key element of our strategy to go
beyond access to energy and deliver economic and social
beneits 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.
Sustnblt revew contnued
Our mcro soco-economc
mpct n Ghn
1
$504 million value added (taxes,
salaries and proits) across
the value chainfrom 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.
Fshermn’s
Anchor Proect
The Fisherman’s Anchor Project (FAP) has
generated signiicant economic beneit for ishing
communities in Western Ghana since 2019. In
addition to micro-credit to support livelihoods,
reaching more than 2,400 beneiciaries, 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 beneiciaries from 34 communities.
80% of beneiciaries were women.
Beneiciaries included ish processors (75%),
canoe owners (19%), pig farmers and other small
business owners.
100% loans repaid in full.
Assessn our soco-economc contrbuton
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.
Accelertn entrepreneurshp
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
Advncn locl
busnesses
In 2023, we transformed the supply chain of
customised steel tube lying leads which are
used in our oshore 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 conidence to make the
capital investment to support this change. This
development has enhanced our local supplier
capabilities, increased local content and improved
the cost eiciency 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 seniorhighschool 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, aordable and easily accessible
inancial services to ishing communities in Western Ghana. The FACCU has established four district oices 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.
Investn n educton
We strive to provide access to STEM education and the technical skills needed to open doors to meaningful and fulilling
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 beneit 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
Sustnblt revew contnued
Promotn trust-
bsed prtnershp
reltonshps
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.
Shred Prospert contnued
Proressn locl 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 oicers 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
speciic topics related to supply challenges in our sector.
We also publish quarterly newsletters for the beneit 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 eectiveness of our local
content programmes whilst providing a rich database that
local governments can use to understand the broader
beneits 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
Envronmentl stewrdshp
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 eects of global climate change
through our commitment to Net Zero whilst preventing other
environmental impacts and protecting biodiversity.
Proressn our Net Zero b 2030 strte
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 eorts 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 oset
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 veriied nature-based carbon oset initiative in Ghana,
which will seek to oset 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 Pthw to Net Zero
Scope 1 & 2 CO
2
e emissions, net equity basis
2020 emissions baseline
Nature-based carbon
mitigation initiatives to oset
hard to abate emissions
Decarbonisation initiatives
at our Jubilee and TEN ields
to eliminate routine laring
Additional operational carbon
reduction initiatives
2020 2030
Elmntn routne flrn n Ghn
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 modiications. In 2023, we
completed the required modiications at the TEN ield that
enable the elimination of routine laring by 2025. Most of
the required modiications and upgrades in the Jubilee ield
have been completed and the remainder will be complete in
early 2025.
Addressn hrd to bte emssons
Our plan to address our residual, hard to abate emissions
is a nature-based initiative, working in partnership
with the Ghana Forestry Commission to oset more
than 600,000 tonnes of carbon emissions per year.
Wesigneda 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 osets 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
oset 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
Envronmentl stewrdshp contnued
Drvn ener effcences nd emssonperformnce
During the year, in line with our Climate Policy, we have continued to drive energy eiciency 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 eiciency 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 modiications 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 signiicant 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.
Sustnblt revew contnued
Mnn wter nd wste
Overall, our water impact is minimal and water use remains
fairly constant year on year, with minor changes due to
small dierences 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 beneit 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 landill 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 signiicant 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 oices and oshore operations.
Protectn bodverst
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 oshore operations on the marine ecosystem,
indicated that the ongoing oshore 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
Eqult nd trnsprenc
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 proiles is set
out on page 81.
Refreshn our vlues nd empowern
ourpeople
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.
Enn nd empowern 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 beneits. 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.
Am hh
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 vlues
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
Eqult nd trnsprenc
contnued
Advncn ncluson nd dverst
Inclusion and diversity are deining 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 dierent
parts of our business, with particular focus on localisation
of African nationals and the advancement of women in
ourorganisation.
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%
Elevtn women n fnnce
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%.
Accelertn loclston
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.
Sustnblt revew contnued
Promotn ethcs nd complnce
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-certiied conirmation 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 dierent
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
speciic 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
22Speaking Up cases.
2019 2020 2021 2022 2023
80
70
60
50
Loclston n Ghn
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 conlict/
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 osetting
Occupational health and safety/
hazardous working conditions
Community health, safety
andwellbeing
Anti-bribery and corruption
Our slent humn rhts ssuesAdvncn humn rhts
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 eorts, based on eight identiied 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
andstandards.
Strengthening supply chain supplier assurance on
human rights.
Reviewing grievance mechanisms and
remediationprocesses.
Dsclosn our tx contrbutons
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 Clmte-relted Fnncl Dsclosures (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 complnce sttement
In accordance with Listing Rule 9.8.6(8) our disclosures in relation to the TCFD recommendations are set out in this
section. We conirm that the disclosures are consistent with the TCFD recommendations.
Recommendation Status Page
Governnce
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
Strte
a) Describe the climate-related risks and opportunities
identiied over the short, medium and long term.
Compliant 40 to 43
b) Describe the impact of climate-related risks
andopportunities on business, strategy and
inancial planning.
Compliant 43 and 44
c) Describe the resilience of the strategy, taking into
consideration dierent climate-related scenarios,
including a 2°C or lower scenario.
Compliant 45
Rs
mnement
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
Metrcs nd
trets
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
Governnce
Our climate-related governance framework is set
out below.
Bord oversht of clmte-relted rss
nd opportuntes
The Board oversees the identiication, assessment, and
response to principal risks annually, including climate
change, and monitors the eectiveness 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.
Clmte overnnce frmewor
Board
Ensures climate change is incorporated into Group strategy and is identiied 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
inancialdisclosures.
Ensures eectiveness 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 identiication, 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
tospeciic 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 eective
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 eective
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 Clmte-relted Fnncl Dsclosures (TCFD) contnued
Governnce contnued
Bord oversht of clmte-relted rss
nd opportuntes contnued
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 suiciently 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 EnergyInstitute.
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.
Mnement’s role n ssessn
ndmnn clmte-relted rss
ndopportuntes
The SLT is responsible for implementing our strategy,
including the identiication, 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.
Strte
Clmte-relted rss nd opportuntes
dentfed over the short, medum nd
lonterm
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 fulilment. 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:
05 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 (2575%).
Extreme: Almost inevitable (+75%).
Trnston rss nd opportuntes
Category Description
Timeframe* &
Likelihood** Potential impact Mitigations
Current nd
emern
reulton
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 proitability
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
oset opportunities within
hostcountries.
Undertake accurate,
independently assured
emissions accounting.
Engage with industry
associations to keep track
ofdevelopments.
Ensuring compliance
withdisclosure regulations
andstandards.
Fnncl
Perception of increased
risks relating to the oil and
gas sector, or our strategy.
Timeframe:
Short–Medium
Likelihood:
Possible
Increased cost of capital
orinsurance.
Reduced, or more
conditional, access to
capital or insurance.
Shareholder activism.
Longer-term opportunity
to diversify capital sources
following successful
decarbonisation strategy.
Target more diversiied sources
of inancing.
Reducing total debt to
reduceinancing 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
diversiication of inancing.
Technolo
Competitors decarbonise
their businesses and
transition to renewable
energy sources quicker
through eective use of
technology.
Acceleration of transport
electriication, displacement
of fossil fuels in power
generation, enhanced
energy eiciency 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
eiciency 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
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Ts Force on Clmte-relted Fnncl Dsclosures (TCFD) contnued
Category Description
Timeframe* &
Likelihood** Potential impact Mitigations
Reputton
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
shareprice.
Shareholder activism.
Challenges in attracting and
retaining talent.
Reduced, or more conditional
access to capital.
Reduced or more
conditional access to
newlicences.
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.
Lel
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 osets 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.
Mret
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
eects 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 eects across
the business.
Strte contnued
Trnston rss nd opportuntes contnued
42 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Phscl clmte rss
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.
Conlict 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 oshore
vessels more challenging.
Inability to access
onshore equipment and
consumables that support
our oshore operations
impacting production
and resulting in increased
underwriting costs.
Proven, tested and eective
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.
Chronc
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.
Conlict 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 (oshore production, onshore
logistics and oice sites), Guyana (oshore licence area, onshore oice site), and Kenya (onshore ield development area and oice 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).
Impct of clmte-relted rss on our busness, strte ndfnncl plnnn
We assess the impact of climate-related risks and opportunities on our business by analysing a range of metrics including
the impact on proitability, 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 Clmte-relted Fnncl Dsclosures (TCFD) contnued
Strte contnued
Impct of clmte-relted rss on our busness, strte ndfnncl plnnn contnued
IEA scenros used to test mpct 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 pledes
(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.
Stted polces
(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 diicult to be speciic
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, relecting 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 relects our ongoing assessment of how we can access
diversiied 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
Substntve
trnston rss
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
(5years+)
$229 million Write-os under the NZE Scenario are determined
by an assessment of the impact on net book value
due to the dierence 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 09
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.
Quantiication 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.
Substntve
phscl rs
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 aected 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.
Reslence of our strte, tn nto consderton dfferent clmte-relted scenros,
ncludn  2°C or lower scenro
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 fulil 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
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Rs mnement
Descrbe the processes for dentfn nd
ssessn clmte-relted rss
The climate-related risks that could impact our business
were initially identiied 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
reconirmed. 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 Freshields. 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.
Descrbe the processes for mnn
clmte-relted rss
Descrbe how processes for dentfn,
ssessn, nd mnn clmte-relted
rss re nterted nto overll rs
mnement
‘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 identiication,
assessment, and management of the above climate-
related risks in our risk management framework.
Ts Force on Clmte-relted Fnncl Dsclosures (TCFD) contnued
46 – Tullow Oil plc Annual Report and Accounts 2023
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Metrcs nd trets
Metrcs used to ssess clmte-relted rss
nd opportuntes n lne wth strte
ndrs mnement process
The metrics we used to assess and monitor our climate-
related risks and opportunities are outlined below.
Trnston
rss
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 oset spend
Carbon pricing
Proportion of GHG emissions subject to
carbon pricing mechanisms
Internal carbon price used for new
investments/acquisitions
Phscl
rss
Production assets in areas of water stress
Maximum anticipated single site
insurable loss to onshore facilities due
tophysical risk (lood, ire)
Metrics to track the delivery of elimination of routine laring
and the Ghana carbon oset 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 pproprte, Scope
3 reenhouse s (GHG) emssons, nd
relted rss
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).
Trets used to mne clmte-relted
rss nd opportuntes nd performnce
nst trets
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
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Rs mnement nd prncpl rss
Effectively managing our risks and opportunities is critical in ensuring we
achieve our strategic objectives and protect shareholder value.
Rs oversht nd overnnce
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 eective 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 aect 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 eectively. 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 eectiveness 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.
Rs mnement frmewor
Our risk management framework takes a ‘top-down, bottom-up’ approach and is embedded throughout Tullow.
This structure ensures ownership and responsibility for identiication, assessment and management of key risks and
opportunities at all levels of the Company. Our risk governance framework is set out below.
Rs mnement frmewor
Board
Top down / Bottom up
Sets risk appetite.
Oversees identiication, assessment of and response to principal risks.
Monitors eectiveness 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 eective risk management culture.
Identiies and assesses principal risks.
Determines principal risk mitigation actions and monitors their eectiveness.
Oversees and supports business leadership’s risk identiication processes and challenges their risk assessments.
Business management Business leadership Internal audit
Identiies risks.
Implements controls to
manage andmitigate risks.
Sets framework and embeds
eective risk management
practices.
Challenges business
management on risks identiied
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.
Identiies 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
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Rs ppette
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
relects 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 signiicant 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
Insuicient 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 signiicant impact of oil price volatility on revenue.
PREVENT signiicant unexpected costs, write-os or loss of
signiicant 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
securityincidents.
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
orregulations.
Tullow Oil plc Annual Report and Accounts 2023 – 49
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Rs mnement contnued
Rs dentfcton nd ssessment
Management within each business unit are responsible for identifying the key risks in their area and for establishing
appropriate and eective management processes to control and mitigate the impact of such risks. All identiied 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 signiicant 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 eectively 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 eective decision making throughout the organisation.
Our prncpl rss
Our current principal risks are set out on pages 52 to 56.
During the year, the Companys risk proile has been closely monitored. The external economic and political landscape
including the war in Ukraine, inlationary 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.
Prncpl rss
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. Insuicient liquidity and funding capacity to
sustainbusiness
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
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Emern rss
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.
Evoluton of rs mnement processes durn the er
Development of our risk management framework is an ongoing process and during the year we have continued to
strengthen our processes and controls.
Buldn more
nterted rs
mnement
sstem
During 2023 we have been working to
develop andimplement a new enterprise risk
managementsystem to replace our spreadsheet-
based methodology. The new system will
embedintegrated and consistent business
riskmanagement across all our operations.
Inparticular,it will allow us to match strategic
andcorporate objectives to risks, eectively
manage risk across dierent business functions
byapplyingconsistentcontrols to similar risks
andenhanceinternal reporting.
Tullow Oil plc Annual Report and Accounts 2023 – 51
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Our prncpl rss
Risk, category, link to strategy andowner
Residual risk
proile change
during the year Mitigation
1
Busness pln not delvered
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
(operatedportfolio).
Production equipment failure.
Unsuccessful appraisal and exploration activity.
Inability to inluence 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 eectively.
Jubilee Expansion project, Jubilee North
East (TEN Enhancement Projects delayed
oronhold).
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 ntert brech
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
forevery 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
partneroperators.
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 eiciency Business growth
Residual risk proile change
No change Increasing risk Decreasing risk
52 – Tullow Oil plc Annual Report and Accounts 2023
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Risk, category, link to strategy andowner
Residual risk
proile change
during the year Mitigation
3
Vlue not unloced
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 proile 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
priceimpact.
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 andBoard.
Capital allocation process (following
agreement of commercial terms).
Critical actions deined in scorecard.
Ongoing review and approval of Kenya
project and structure by SLT and Board.
Ramp-up of business development
activitiesand 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
capexexposure.
Category: Strategy
Owner:
Stuart Cooper, Director of Strategy, Commercial and
BusinessDevelopment
4
Geopoltcl rs
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 aected.
Eicient 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
nationalpriorities.
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 andowner
Residual risk
proile change
during the year Mitigation
5
Clmte chne
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 osets.
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 dierent 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
Mor ccdent event
Causes and threats:
Asset integrity failures and/or extensive damage to facilities.
Our, or our contractors’, failure to meet safety standards or adhere
toprocedural requirements.
Operation of equipment outside safe operating limits leading
toamajorincident.
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-veriication and external certiication,
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 speciication/pre-qualiication
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 prncpl rss contnued
54 – Tullow Oil plc Annual Report and Accounts 2023
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Risk, category, link to strategy andowner
Residual risk
proile change
during the year Mitigation
7
Insuffcent lqudt nd fundn
cpct to sustnbusness
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 inlation.
Unexpected operational incidents.
Unable to reinance 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
Cpblt cnnot be ttrcted,
developed or retned
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:
Diiculty 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
valueproposition.
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.
Oer competitive market-aligned
compensation and beneits.
Agile organisation model able to adapt to
changing business needs.
Talent management and strategic
workforceplanning.
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 prncpl rss contnued
Risk, category, link to strategy andowner
Residual risk
proile change
during the year Mitigation
9
Complnce or reultor brech
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
futurelitigation.
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 outlow due to payment of penalties and/or ines.
Reputational damage and a loss of stakeholder conidence.
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
Mor cber-dsrupton
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 conidence, 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
Vblt sttement
Assessment perod
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 dierent 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 prncpl rss
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 outlows
associated with tax exposures and provisions.
The Group has included an additional
$28 million in 2024 in relation to potential
outlows. The Group has not included any
outlows 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 oset
hard to abate emissions.
The Group has considered an oil price
sensitivity in line with the IEA ‘Net Zero by
2050 Scenario’; see below.
Insuicient 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
Concluson
The Group has $2.1 billion debt outstanding, maturing in 2025, 2026 and 2028. The Corporate Business Plan does not
project suicient 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 suiciently such that the Directors are conident that the
Group will be able to secure the funding required to maintain adequate liquidity headroom throughout the viability
assessment period.
There is suicient 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 outlows 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 reinancing activities, as they fall due over the ive-year period of their assessment.
Vblt sttement contnued
58 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Fnncl revew
Income sttement
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
andleased assets (431) (411)
DDA before impairment charges
($/bbl) 18.8 18.4
(Overlift)/underlift and oil
stockmovements (109) 46
Administrative expenses (56) (51)
Gain on bargain purchase 197
Exploration costs written o (27) (105)
Impairment of property, plant
andequipment, net (408) (391)
Gain on bond buyback 86
Net inancing costs (286) (293)
Proit from continuing activities
before tax 96 442
Income tax expense (206) (393)
(Loss)/Proit for the year from
continuing activities (110) 49
Adjusted EBITDAX
1
1,151 1,469
Basic (loss)/earnings per share (cents) (7.6) 3.4
1. Alternative performance measures are reconciled on pages 189 to 190.
Revenue
Sles Ol volumes
During the year, there were 55,754 boepd (2022: 55,170
boepd) of liftings. The total number of liftings in Ghana is
comparable to the previous year with 13 in Jubilee (2022:
12) and 4 in TEN (2022: 5).
Relsed ol prce ($/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).
Gs sles
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 $400million
and we are well positioned
to put in place a sustainable
capitalstructure.
Richard Miller
Chief Financial Oicer
Tullow Oil plc Annual Report and Accounts 2023 – 59
Financial statements Supplementary informationStrategic report Corporate governance
Cost of sles
Underln csh opertn 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.
Deprecton, depleton nd mortston
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 oset by 2022 impairments.
Overlft nd ol 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.
Admnstrtve expenses
With the exception of the one-o corporate project
expenditure which was partially oset by lower insurance
premiums in the current year, Tullow has managed to
maintain administrative expenses at prior year levels
despite the inlationary environment.
Explorton costs wrtten 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-os of $3.3 million in
Cote d’Ivoire, $3.4 million for the Akoum B well in Gabon
and $2.5 million in Guyana.
Imprment of propert, plnt
ndequpment
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
oset 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.
Gn on bond bubc
Refer to Borrowings section below.
Net fnncn 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
oset 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.
Txton
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-os and impairments.
Based on a proit before tax for the period of $96 million
(2022: $442 million), the eective 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-os, disposals, impairments, provisions and their
associated deferred tax beneit, the Group’s adjusted tax
rate is 70.2 per cent (2022:70.3 per cent). The eective tax
rate is in line with the prior year with the impact of non-
deductible expenditure in Ghana and Gabon and no UK
tax beneit arising from net interest and hedging expense
of $167m (2022: $570m) being partially oset by deferred
tax credits related to non-operated assets undergoing
decommissioning and prior year adjustments.
The Group’s future statutory eective tax rate is sensitive
to the geographic mix in which pre-tax proits arise.
There is no UK tax beneit from net interest and hedging
expenses, whereas net interest and hedging proits would
be taxable in the UK. Consequently, the Group’s tax charge
will continue to vary according to the jurisdictions in which
pre-tax proits occur.
Analysis of adjusted
eective tax rate ($m)
Adjusted
proit/(loss)
before tax
Tax
(expense)
/credit
Adjusted
eective
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%
Fnncl revew contnued
60 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Adusted 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)/proft for the er from contnun
ctvtes nd (loss)/ernns per shre
The loss for the year from continuing activities amounted
to $110 million (2022: $49 million proit). Loss after
tax was driven mainly by impairments and write-os
totalling $435million. Basic loss per share was 7.6 cents
(2022:3.4cents earnings per share).
Blnce sheet nd lqudt mnement
Balance sheet and liquidity
management (key metrics) 2023 2022
Capital investment ($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.
Cptl 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.
Decommssonn
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.
Dervtve fnncl 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 classiied
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
Dervtve fnncl nstruments contnued
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/bbldownside 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.
Borrowns
On 15 May 2023, the Group made a mandatory prepayment
of $100million 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 Unmodiied 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 Unmodiied 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 Modiied 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.
Credt rtns
Tullow maintains credit ratings with Standard & Poor’s
(S&P’s) and Moody’s Investors Service (Moodys).
On 21 June 2023, following completion of a bond tender
announced on 12 June 2023, S&Ps 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 airmed 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.
Fnncl revew contnued
62 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Underln opertn csh flow nd free
csh 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
oset 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 oset by an increase
in decommissioning spend of $14 million in the
current period.
Net debt nd ern
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
capitalmovements (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.
Lqudt rs mnement nd
onconcern
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
dierent scenarios including, but not limited to, changes
in commodity prices, dierent production rates from the
Group’s producing assets and dierent 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 outlows in
respect of all ongoing litigations/arbitrations within the
Low Case, with an additional $48 million outlow being
included for the cases expected to progress in the period
under assessment. The low case does not include the
outlow 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
outlows 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 ailiates 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
Lqudt rs mnement nd onconcern contnued
The Group’s forecasts show that the Group and Parent Company will be able to operate within its current debt facilities and
have suicient 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 snce 31 December 2023
Gbon
On 29 February 2024, Tullow completed the Asset Swap agreement (ASA) transaction (discussed in note 14. Assets and
liabilities classiied 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
ofthe 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 Oicer
5 March 2024
Fnncl revew contnued
64 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Non-fnncl nd sustnblt nformton sttement
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
Envronment
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
beneits 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:
page54.
Major accident event:
page 54.
Sustainability
Safety
Pages 33
and34.
Clmte-relted fnncl dsclosures
Climate policy.
TCFD statement.
Climate change:
page54.
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
eectiveness
Sustainability
Pages 35 to 36
(Our people).
Pages 28 and
29 (Health and
safety).
Socl nd communt
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 humn rhts
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-corrupton nd nt-brber
Code of Ethical Conduct.
Speak Up Policy.
Compliance or
regulatory breach:
page 56.
Sustainability Pages 35
and36.
Non-fnncl nd sustnblt nformton sttement contnued
66 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Corporte
overnnce
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
Chrs letter
During the year we have further
strengthened and refreshed the
Board’s composition.
Phuthuma Nhleko
Independent Non-Executive Chair
Der Shreholder,
On behalf of the Board, I am pleased to present the Corporate
Governance report for the year ended 31December 2023. We
recognise that high standards ofgovernance and eective
Board oversight are critical toTullow’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.
Bord chnes
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 conirmation of his appointment as Chief
Financial Oicer, 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
eect from 24 February 2023 and Rebecca Wiles joined
the Board with eect 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 signiicant emerging market
experience and extensive commercial and operational
experience gained during her 33-year career at BP plc.
Theirbiographical details are included onpage 71.
Culture
If we are to fulil our purpose we must build trust and the way
we do business is critically important. During the year we
redeined 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.
Dverst
The Board is comprised of a diverse mix of gender, social
and ethnic backgrounds, knowledge, personal attributes,
skills and experience. This diversity is relective of the areas
in which we do business and provides a mix of perspectives,
which contributes to eective Board dynamics.
Board’s time
1
%
Principal risks and governance
Culture and people
Safety and sustainability
(including stakeholder
engagement)
Capital structure and
capitalallocation
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 proile of the Board and the senior management
is included on pages 81.
Code complnce
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 conirm 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.
Concluson
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. Eective
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 pplcton
Principle Further information
Board leadership and company purpose
A An eective 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 Eective 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 Eective and eicient 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 eective internal and external audit functions. Audit Committee report. See pages 82 to 86.
N Fair, balanced and understandable assessment. Eectiveness 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
Bord of Drectors
1 – Phuthum Nhleo
Independent Non-Executve Chr
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 – Rhul Dhr
Chef Executve Offcer
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 Oicer 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
onmerger 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 – Rchrd Mller
Chef Fnncl Offcer
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 – Mrtn Greenslde
Senor Independent Drector
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 Oicer 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 Oicer
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 – Shel hm
Independent Non-Executve Drector
S
N
Appointment: April 2019
Key strengths: Extractives project and policy reform, executive
leadership, corporate governance, business development,
publicprivate partnership and sustainability.
Experience: Signiicant executive experience in the banking
and natural resources sectors across Africa having served as
the Chief Executive Oicer 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 – Geneveve Snud
Independent Non-Executve Drector
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
inNigeria.
Current external appointments: Managing Director,
Sub-Saharan Africa, for the American private equity company
CarlyleGroup.
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 – Mtchell Inrm
Independent Non-Executve Drector
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 – Rold Goethe
Independent Non-Executve Drector
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
Traigura 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
RacingLimited.
9 – Rebecc Wles
Independent Non-Executve Drector
A
S
Appointment: June 2023
Key strengths: Subsurface, geoscience, technology, emerging
markets, commercial, government relations, safety and risk
management and executive leadership.
Experience: Signiicant 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
Norwaybusiness.
Current external appointments: Non-Executive Director of
SESWater.
Tenure
0–2 years
35 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
Governnce frmewor
The Bord
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 eective 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.
Commttees
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 signiicant
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 eectively.
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 .
Senor Ledershp Tem
Chief Executive Oicer, Chief Financial Oicer and ive senior managers
Led by the Chief Executive Oicer 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
Bord ledershp nd compn purpose
Purpose, culture, vlues nd strte
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 Companys 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 oice 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 eectiveness 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.
Governnce frmewor
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
managedeectively.
Bord meetns nd ttendnce 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 speciic items. In certain
circumstances meetings are called at short notice and,
due to prior business commitments and time dierences
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.
Tme commtment nd externl ppontments
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 satisied that
each of the Directors is able to allocate suicient time
to the Group to discharge his or her responsibilities
eectively. Asevidenced by the attendance table below,
the attendance remained high and demonstrates the
Directors’ ability to devote suicient time to their role. In
line with the Code, Directors are required to seek Board
approval prior to taking on any additional signiicant
external appointments.
Tullow Oil plc Annual Report and Accounts 2023 – 73
Financial statements Supplementary informationStrategic report Corporate governance
Bord ledershp nd Compn purpose contnued
Tme commtment nd externl ppontments contnued
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 Oicer 5/5
Richard Miller Chief Financial Oicer 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.
Bord ctvtes durn the er
Strte nd busness plns Performnce nd rs mnement
The Board considered and oversaw the delivery of our strategic
objectives for the beneit 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.
Governnce, poltcl nd reultor envronment Culture nd steholders
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 eectiveness 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 mtters reserved to the Bord
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 signiicant
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.
Conflcts of nterest
Directors have a statutory duty to avoid situations in which
they have, or may have, interests that conlict with those of
Tullow, unless that conlict is irst authorised by the Board.
The Company has procedures in place for managing
conlicts of interest. The Companys Articles of Association
also contain provisions to allow the Directors to authorise
potential conlicts 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 conlict does arise, the Director is excluded from
discussions and all Directors have a continuing duty to
update any changes to their conlicts of interest.
Steholder enement
Enn wth our steholders
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.
Worforce enement
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 dierent 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 votn
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
Dvson of responsbltes
Responsbltes
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 deined and agreed as set
out in the division of responsibilities approved each year
by the Board. See summary below.
The Chr
The Chair of our Board, Phuthuma Nhleko, is responsible
for leading the Board and its overall eectiveness and for
promoting the highest standards of integrity, probity, and
corporate governance. The Chair is also responsible for
eective 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 Chef Executve Offcer
Our Chief Executive Oicer (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 Companys strategic objectives and the
performance of the Senior Leadership Team (SLT).
The Senor Independent Drector (SID)
Our SID, Martin Greenslade, provides a sounding board for
the Chair. The Board is fully satisied 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
beinappropriate.
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-Executve Drectors (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.
Bord 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
speciically 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.
Bord Commttees
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 satisied that the Committees have suicient time and
resources to carry out their duties eectively. 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.
Compn Secretr
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
eectively and eiciently. 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
theBoard.
76 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Composton, successon nd evluton
Composton, slls nd experence
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
and71 and below.
Inducton, trnn nd development
Upon joining the Board, Directors receive induction
programmes which are speciically 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 oices 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 oloading 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, worklows and technologies in the
subsurface realm.
Bord evluton
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.
Phse 1 Phse 2 Phse 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,
eectiveness, 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
Bord evluton contnued
The conclusions of the 2023 evaluation were positive, conirming that the Board continues to operate eectively
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 eectively 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.
Composton, successon nd evluton contnued
78 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Nomntons Commttee report
To fulil 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 responsbltes
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
Boardregarding any changes.
Oversees the succession planning process for the
Boardand senior management.
Reviews the Board’s eectiveness including its
performance evaluation.
2023 e ctvtes
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 prortes
Enhance Directors’ induction, training and
developmentprogrammes.
Review the Executive Directors and senior management
succession pipeline and development initiatives.
Allocton of Nomntons
Commtteetme* (%)
Activity* %
Non-Executive
Director
succession planning
Senior management
succession planning
Leadership
eectiveness
Corporate
governance
* Percentages are approximate.
Commttee membershp, meetns
ndttendnce
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 24May2023.
The CEO and Director of People and Sustainability also
attend meetings of the Committee by invitation and
werepresent 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
Der shreholder
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 eective leadership,
taking into account our approach to inclusion and diversity,
to support our strategy also continue to be key areas of focus.
Role nd responsbltes
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.
Commttee membershp, meetns
ndttendnce
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
meetingattendance.
In addition to its scheduled meetings the Committee held
two unscheduled meetings to consider speciic items
including the appointments of new independent Non-
Executive Directors.
Non-Executve Drector successon
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 signiicant 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.
Commttee membershp chnes
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 eect from 24 May
2023 and 1 January 2024 respectively.
Safety and Sustainability: The appointment of Rebecca
Wiles as a member with eect from 1 January 2024.
Nominations Committee: The appointment of Sheila
Khama as a member with eect from 24 May 2023.
Remuneration Committee: The appointment of Roald
Goethe as a member with eect 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 eect from 1 January 2024.
The Board approved and welcomed these recommendations.
Incluson nd dverst
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
identiied 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 relects 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 eectiveness.
Nomntons Commttee report contnued
80 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Bord nd ledershp tem dverst 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 speciied/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 speciied/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 deinition of executive management.
Recrutment 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 identiied by the Committee. This long list
was considered by the Committee and a short list of
candidates were identiied who then met with Chair,
CEO and SID. Following these meetings the Committee
recommended to the Board the appointment of Roald
andRebecca.
Externl ppontments
To ensure that Directors continue to have suicient time to
commit to discharge their duties, any additional external
appointments undertaken require advance approval by the
Board. The Directors signiicant external appointments are
disclosed in their biographies on pages 70 and 71.
Revew of Commttee effectveness
The Committee undertook a review of its eectiveness
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 conirm that the Committee was
considered to be operating eectively 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
Audt Commttee report
The Committee has continued to
review the eectiveness of the Groups
control environment and strengthen
its risk management process.
Martin Greenslade
Chair of the Audit Committee
e responsbltes
Oversees inancial reporting and disclosures including
monitoring the integrity of the inancial statements and
reviewing and challenging the appropriateness and
consistency of signiicant accounting policies.
Monitors and assesses the adequacy and eectiveness
of risk management systems and internal controls.
Oversees the relationship with the external auditor and
the eectiveness of the audit process.
Oversees the work programme of internal audit and the
system of ethics and compliance.
2023 e ctvtes
Reviewed the signiicant accounting judgements made
during the year.
Monitored the developments arising from the internal
audit programme.
2024 prortes
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.
Allocton of Audt Commtteetme* (%)
Activity* %
Financial reporting
Internal controls and
risk management
Special topics
External audit
Corporate
governance
* Percentages are approximate.
Commttee membershp, meetns
ndttendnce
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
Der shreholder
Overvew
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 eectiveness
of the external audit and ensuring that the Company has an
eective control environment to manage risks.
Role nd responsbltes
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.
Commttee membershp, meetns
ndttendnce
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 Oicer at Red Sea Global and having
served as Chief Financial Oicer 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
satisied 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 eect 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
signiicant 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 speciic items. Meetings
are scheduled to allow suicient time for full discussion of
key topics and to enable early identiication 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 identiied for detailed
review and any matters that arise during the year.
Snfcnt ssues nd fnncl udements
The signiicant 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.
Signiicant 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
Signiicant 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 identiied 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 reinancing 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 classiication as held for sale under IFRS 5 and the carrying amounts have
been presented as such on the balance sheet. On completion, any positive dierence
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 relect 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.
Audt Commttee report contnued
Snfcnt ssues nd fnncl udements contnued
84 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Externl udtor
The Committee has primary responsibility for managing the
relationship with the external auditor, including assessing
its performance, eectiveness 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 EYs lead audit partner with eect 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 eectively
and challenge management suiciently when required.
Effectveness of externl udt process
The Audit Committee is responsible for assessing the
qualiications, expertise and resources, and independence
of EY, as well as the eectiveness 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
andremuneration.
Reviewing and approving the audit plan prepared by
the auditor at the start of the audit cycle. This plan
identiies 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
signiicant inancial risks and the performance of
management in addressing these risks, the auditor’s
opinion of management’s role in fulilling obligations
for the maintenance of internal controls and the
transparency and responsiveness of interactions
withmanagement.
Conirming the independence of the audit including
how the auditor has exercised professional challenge.
Assessing the eectiveness 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
eectively. EY and management have agreed on step
plans to ensure the quality of audit, team continuity and
focus on continuous improvement is maintained.
Non-udt servces 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.
Itwas revised in January 2022 and is reviewed regularly.
Itrequires 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 conirm 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 conirmation is received
every six months, and no matters of concern were
identiied by the Committee.
Internl controls nd rs mnement
The Board has overall responsibility for risk management
and internal control systems, and for reviewing their
eectiveness. 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 eectiveness of the
procedures for internal control over inancial reporting,
compliance and operational matters.
The Directors obtained comfort over the eectiveness 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 identiied 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
Internl controls nd rs mnement
contnued
During the year, in conjunction with the Board, the
Committee completed two robust assessments of the
signiicant risks facing the Company, including those that
would threaten its business model, future performance,
solvency or liquidity. This assessment included the
identiication 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 identiied indings were assessed, with no indications of
fraud noted.
Based on the results of the annual eectiveness review
of risk management and internal control systems, the
Directors concluded that the system of internal controls
operated eectively throughout the inancial year and
up to the date on which the inancial statements were
signed. There were areas identiied for improvement and
the Directors are conident that they are in the process of
being addressed.
Internl udt requrements
The Committee’s role is to consider how the Group’s
internal audit requirements are satisied 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 eectiveness
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 suicient 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
identiied 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 signiicant 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 eectiveness 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.
Whstleblown 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
conidentially 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
signiicant known or suspected misconduct by third
parties and employees including ongoing monitoring
andfollowing up of internal investigations.
Revew of Commttee effectveness
The Committee undertook a review of its eectiveness 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 conirm that the Committee was considered to be
operating eectively 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
Audt Commttee report contnued
86 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Sfet nd Sustnblt Commttee report
The Committee continued to monitor
the Groups safety and environmental
performance and its progress in
embedding sustainability across
thebusiness.
Mitchell Ingram
Chair of the Safety and Sustainability Committee
e responsbltes
Oversees implementation of the Company’s strategic
sustainability priorities.
Monitors the implementation of the Company’s
environmental, health, security and asset protection,
andsafety 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 Companys
operations, and the associated costs and risks, and approves
the timeframe in which Tullow intends to achieve Net Zero.
2023 e ctvtes
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 prortes
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 oset solution in Ghana.
Allocton of Sfet nd Sustnblt
Commtteetme* (%)
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.
Commttee membershp, meetns
ndttendnce
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
Sfet nd Sustnblt Commttee report contnued
Der shreholder
Overvew
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 responsbltes
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.
Commttee membershp, meetns
ndttendnce
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 meeting attendance.
Commttee ctvtes
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 signiicant
safety events and high-potential near misses. This included
a lost-time injury on the Jubilee FPSO in which an oshore
worker required osite 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 modiications 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
oset 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 beneits.
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).
Revew of Commttee effectveness
The Committee undertook a review of its eectiveness
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 conirm that the Committee was
considered to be operating eectively 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
Remunerton 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 responsbltes
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
widerworkforce.
2023 e ctvtes
Setting an appropriately stretching set of key
performance metrics for the 2023 and 2024
KPIscorecards.
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 prortes
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.
Allocton of Remunerton
Commtteetme* (%)
Activity* %
Executive and
senior management
remuneration
Wider workforce pay
and conditions
Remuneration policy
Remuneration
reporting and
corporate
governance
Scorecard
performance review
* Percentages are approximate.
Commttee membershp, meetns
ndttendnce
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
personalreasons.
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
Annul sttement on remunerton
Der shreholder
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 Drectors’ Remunerton Polc
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. Iwould like to thank those who took part in the
consultation exercise for their time and input.
2023 performnce 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 reined 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 proit of $765 million ($1,086 million)
and a loss after tax of $110 million (2022: proit after tax
of $49 million). This loss was driven by impairments and
write-os totalling $435 million.
Remunerton report contnued
We are pleased with the operational and inancial progress
made during the year to position Tullow for growth.
Summr of Executve Drector
remunerton 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
eectiveness 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.
Summr of Executve Drector
remunerton 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 signiicant 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 eect 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 eectiveness. 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.
Remunerton rrnements for the
wderworforce
During 2023 the Committee continued to consider the
alignment of remuneration arrangements through the
workforce, ensuring all employees are rewarded fairly
andconsistently 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.
Emploee enement
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.
Revew of Commttee effectveness
The Committee undertook a review of its eectiveness 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 conirm that the Committee was considered to be
operating eectively 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.
Loon hed
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
Executve remunerton t  lnce
Assessment of TIP Awrds
Assessment of Annul Bonus Awrds
Safety Financial Performance Production Business Plan Implementation Sustainability
Unlocking Value Leadership Eectiveness 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
Annul Report on Remunerton
Drectors’ remunerton (udted)
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 eits
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 deined beneit pension by reference to qualifying services. Pension beneits
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.
Remunerton report contnued
92 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
3. Taxable beneits comprise private medical insurance for all Executive Directors and any other taxable expenses. Travel and subsistence beneits 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 eective 24 February 2023.
8. Rebecca Wiles was appointed Non-Executive Director eective 28 June 2023.
Mterl contrcts
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 signiicant in relation to the Group’s business.
Pments to pst Drectors
No payments were made to past Directors in 2023.
Pments for loss of offce
No payments for loss of oice were made to past Directors in 2023.
Determnton of 2024 TIP nd Annul Bonus Awrds bsed on performnce to 31 December 2023 (udted)
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 satisied 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
Annul Report on Remunerton contnued
Detls of vrble p erned n the er
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 eectively we are deploying out strict cost framework and our
progress in achieving capital eiciency.
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 inlationary cost pressure during the year.
Production
Targets related
to oilproduction
and vessel
eiciency
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
eiciency
(%ofuptime) 94% 97% 98% 96%
Payout 25% 60% 100% 54%
Trigger Base Stretch
2023
Performance
TEN production
eiciency
(% 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 diers for each measure to relect 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.
Remunerton report contnued
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 relected 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 deined as percentage of work programme delivered, assessing Capex eiciency 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
Annul Report on Remunerton contnued
Detls of vrble p erned n the er contnued
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
areongoing.
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 reinancing: Successful
delivery in 2023 of reinancing 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
eectiveness
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 identiied 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, Diversiied 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
Remunerton report contnued
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.
Executve Drector nd Non-Executve Drector terms of ppontment
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 – totl p versus TSR
For 2023 the CEO total pay is based on the summation of the actual base pay, pension, beneits 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
Totl shreholder return CEO – Totl 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
Annul Report on Remunerton contnued
Comprson of overll performnce 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 oice 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 oice 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 Oicer on 1 July 2020.
Remunerton report contnued
98 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Addtonl sttutor nformton – percente chne n remunerton for Executve nd
Non-ExecutveDrectors
The table below shows the percentage change in each of the Directors’ total remuneration (for Executive Directors
excluding the value of any pension beneits 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 Beneits Bonus Salary/fees Beneits Bonus Salary/fees Beneits 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 beneits for Phuthuma Nhleko due to increased travel and subsistence during 2023.
2. Increase in beneits 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 beneits relect increased travel and
subsistence during 2023.
4. The increase in fees for Martin Greenslade relect his appointment as Senior Independent Director in 2022. Beneits have increased due to increased
travel and subsistence during 2023.
5. The increase in fees for Genevieve Sangudi relects her appointment as Chair of the Remuneration Committee after the 2022 AGM. Beneits have
increased due to increased travel and subsistence post the COVID-19 pandemic.
6. Increase in average employee beneits is driven by changes to annual medical insurance premiums.
CEO p rto 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,
beneits, 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
Annul Report on Remunerton contnued
CEO p rto 2023 contnued
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, beneits, pension,
cash bonus and share awards). Whilst all employees receive a base salary commensurate to the Company’s position in the
market, the dierences 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 relective of the wider pay, reward and
progression policies impacting our UK employees. The Committee will continue to monitor longer-term trends.
Reltve mportnce of spend on p
The following table shows the Group’s actual spend on pay for all employees relative to tax and retained proits.
Sta costs have been compared to tax expense and retained proits 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 proits (£m)
1
(1,818.8) (1,887.6) (4%)
1. Voluntary disclosure.
Detls of shre wrds rnted to Executve Drectors
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.
Remunerton report contnued
100 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Shre prce rne
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.
Detls of Drectors’ nterests
The interests of the Directors (all of which were beneicial), who held oice 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 relect 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.
Implementton of Polc for Executve Drectors 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 eectiveness (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, Diversiied 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
Implementton of Polc for Executve Drectors for 2024 contnued
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 eectiveness (10%).
No changes will be made to the Chair nor the Non-Executive Director fees from 2023 levels.
Governnce
Remunerton Commttee members
Genevieve Sangudi (Committee Chair), Mitchell Ingram and Martin Greenslade.
Remunerton Commttee membershp nd ttendnce
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.
Advce receved durn 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 aect their independence. The Committee evaluates the services provided
by external advisers and is satisied that the advice received from Deloitte was objective and independent.
Actvtes of the Commttee durn 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.
Remunerton report contnued
102 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Prncples of Executve Drector remunerton
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 signiicant 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
signiicant 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.
Shreholder votn 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
Drectors’ Remunerton Polc 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 eect from the date of the
AGM and will apply for a period of up to three years.
Polc overvew
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.
Polc revew 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
withshareholders.
The Committee was mindful in its deliberations on the
new Remuneration Policy of any potential conlicts 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 Polc chnes
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.
Summr Drectors’ Remunerton Polc
Bse slr
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 therole.
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.
Remunerton report contnued
104 – Tullow Oil plc Annual Report and Accounts 2023
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Penson nd benefts
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.
Deined contribution pension scheme or salary supplement
in lieu of pension. The Company does not operate or have
any legacy deined beneit pension schemes.
Medical insurance, income protection and life assurance.
Additional beneits 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.
Beneits: The range of beneits 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 beneits 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.
Lec Tullow Incentve Pln (TIP) – pplcble 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
planthat:
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
individualswith 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 satisied by
granting deferred shares with a vesting date set by the
Committee being not earlier than the irst anniversary
ofgrant.
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 speciic 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
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Drectors’ Remunerton Polc Report contnued
Summr Drectors’ Remunerton Polc contnued
Annul 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 relect 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 eect.
Additional shares may be delivered in respect of shares
subject to deferred bonus awards to relect 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 Incentve Pln (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
relect 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 relect 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).
Remunerton report contnued
106 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Shreholdn udelnes
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
riskmanagement.
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
ownedshares.
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
beneicially 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-Executve Drectors
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 signiicant contribution
to the Group’s activities while also
relecting 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.
Operton of shre plns
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 speciied categories) for incentive plan purposes and a good
leaver’streatment.
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 fulil 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, relects 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
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Drectors’ Remunerton Polc Report contnued
Clculton of TIP wrds
In addition to base salary and other beneits 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, relect 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 satisied 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.
Performnce mesures for LTIP nd nnul bonus wrds
The choice of the performance metrics and range of targets applicable to the annual bonus plan for Executive Directors
relect 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,
speciic 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.
Lec remunerton
For the avoidance of doubt, the Committee reserves the right to make any remuneration payments and/or payments for
loss of oice (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 eect, 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.
Dscreton
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.
Remunerton report contnued
108 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Recover provsons
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.
Illustrton of remunerton scenros of Executve Drectors
2024
The charts below show how the composition of the Executive Directors’ remuneration packages varies at dierent 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 eective 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
Drectors’ Remunerton Polc Report contnued
Illustrton of remunerton scenros of Executve Drectors contnued
2025 onwards
The charts below show how the composition of the Executive Directors’ remuneration packages varies at dierent 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 eective 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.
Servce 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 relects the Committee’s policy that service contracts should be structured to relect 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 oice.
Externl ppontments
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.
Remunerton report contnued
110 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Polc for new ppontments
The remuneration of a new Executive Director will normally include salary, beneits, 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 speciic 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 oer 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 oer 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 beneits).
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.
Polc for loss of offce
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 speciic 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
Drectors’ Remunerton Polc Report contnued
Polc for loss of offce contnued
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
orbusiness 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
ofthe year worked).
No entitlement to the cash part
ofthe 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
abonuspayment.
It is the Committee’s policy to ensure that any bonus payment
relects 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 satisied 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.
Remunerton report contnued
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
satisied 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.
Consderton of shreholders’ vews
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.
Emploment condtons 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-Executve Drectors’ terms of ppontment
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
herappointment.
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
Drectors’ report
The Directors present their Annual Report and audited Financial Statements
fortheGroup 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.
Informton ncorported 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
Artcles of Assocton
The Company’s Articles were adopted at the 2021 AGM.
They may only be amended by a special resolution of
theshareholders.
Lstn of notes
Tullow’s Senior Secured Notes due 2026 and Senior Notes
due 2025 are listed on the Luxembourg Stock Exchange.
Results nd dvdends
The loss on ordinary activities after taxation of the Group
for the year ended 31 December 2023 was $110 million
(2022: $49 million proit). In 2023 the Board recommended
that no interim and inal dividend would be paid.
Shre cptl
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.
Substntl shreholdns
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 notiied
in accordance with the requirements of provision 5.1.2 of
the Financial Conduct Authoritys Disclosure Guidance and
Transparency Rules of the following signiicant holdings in
the Company’s ordinary share capital:
Shareholder
Number of
shares
% of issued
capital (as at
date of
notiication)
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%
Shreholders’ rhts
The rights and obligations of shareholders are set out
in the Companys 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 proits available for distribution. Subject
to shareholder approval, payment or satisfaction of a
dividend may be made wholly or partly by distribution of
speciic 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 beneit
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.
Mterl reements contnn ‘chne
ofcontrol’ provsons
The following signiicant agreements will, in the event of a
change of control’ of the Company, be aected 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 beneicial 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 speciied therein, the Company is obliged to
notify the agent (who notiies 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 notiied
by the agent, the repayment amount will become due
and payable by no later than 30 days after the agent has
notiied 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 oer 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 oer 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 oer.
Tullow Oil plc Annual Report and Accounts 2023 – 115
Financial statements Supplementary informationStrategic report Corporate governance
Mterl reements contnn ‘chne
ofcontrol’ provsons contnued
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 oer 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 oer 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 oer is made. Each noteholder may take up
the oer 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 notiies
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 eect to the noteholders
request for repayment, they are to notify the Company
within 30 days of being notiied by the agent, following
which the repayment amount will become due and
payable no later than 30 days after such notice to
the Company.
Drectors
In accordance with the provisions of the Code, all
Directors eligible for re-election should retire at each
AGM and oer 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
oering themselves for election or re-election continue
to be eective 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.
Drectors’ report contnued
Drectors’ ndemntes nd nsurnce 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 indemniied 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 oicers’ liability insurance cover, the level of
which is reviewed annually.
Powers of Drectors
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 speciic 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 oer 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
Appontment nd replcement of Drectors
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 oice
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 oice 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
oice 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 oice 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 suers 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.
Authort to llot new shres
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.
Purchse of own shres
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 speciied 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.
Poltcl dontons
In line with Group policy, no donations were made for
political purposes.
Audtor nd dsclosure of relevnt
udtnformton
Having made the requisite enquiries, so far as the Directors
are aware, there is no relevant audit information (as deined
by section 418(3) of the Companies Act 2006) of which the
Company’s auditor is unaware and each Director has taken
allsteps 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.
Annul Generl Meetn
It is anticipated that the AGM of Tullow will be held at
9Chiswick Park 566 Chiswick High Road W4 5XT on
16May 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 oice:
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
Sttement of Drectors’ responsbltes
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 satisied that they give a true and fair view of the
state of aairs of the Group and the Company and of the
proit or loss of the Group and the Company for that period.
Under the Financial Conduct Authoritys 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
speciic requirements in IFRSs and in respect of the Parent
Company Financial Statements, FRS 101 is insuicient
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 suicient 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
otherirregularities.
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.
Drectors’ responsblt sttement (DTR 41
nd the Trnsprenc (Drectve 2004/109/
EC) Reultons (s mended))
The Directors conirm, 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 proit 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 Oicer
5 March 2024
118 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Fnncl
sttements
120 Independent auditor’s report to the members of
TullowOil plc
130 Group inancial statements
179 Company inancial statements
Supplementr nformton
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
Opnon
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 aairs 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
yearthen 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).
Bss for opnon
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 suicient 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 fulilled our other ethical responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRCs 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 udtors report to the members of Tullow Ol plc
Tullow Oil plc Annual Report and Accounts 2023 – 121
Financial statements Supplementary informationStrategic report Corporate governance
Conclusons reltn to on 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 dierences 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
suiciently severe;
verifying managements plan in relation to repayment of
the remaining outstanding 2025 bonds and assessing
whether there is suicient 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 suiciently captured potential outlows 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;
conirming 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 observtons
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 suiciently severe
and appropriately relects potential outlows 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
identiied any material uncertainties relating to events
or conditions that, individually or collectively, may cast
signiicant 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 udtor’s report to the members of Tullow Ol plc contnued
Overvew of our udt pproch
Audit scope We performed an audit of the complete inancial information of 4 components and audit
procedures on speciic balances for a further 7 components.
The components where we performed full or speciic 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 overvew of the scope of the prent
compn nd roup udts
Tlorn 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 proile, the organisation of the group
and eectiveness 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 signiicant 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 (“speciic scope components”), we
performed audit procedures on speciic accounts within
that component that we considered had the potential
for the greatest impact on the signiicant accounts in the
inancial statements either because of the size of these
accounts or their risk proile.
The reporting components where we performed full or
speciic 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 speciic
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 signiicant accounts of the component
but will have contributed to the coverage of signiicant
accounts tested for the Group. We also performed
speciied 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)% Speciic scope components
(1)% Other procedures
Revenue
98% Full scope components
2% Speciic scope components
0% Other procedures
Total assets
83% Full scope components
7% Speciic scope components
10% Other procedures
Tullow Oil plc Annual Report and Accounts 2023 – 123
Financial statements Supplementary informationStrategic report Corporate governance
Chnes from the pror er
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-os 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.
Clmte chne
Stakeholders are increasingly interested in how climate
change will impact Tullow Oil Plc. The Group has
determined that the most signiicant 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 conidence 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
relected 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. Signiicant
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 eort 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 eects of material climate risks
disclosed on pages 38 to 47 and the signiicant
judgements and estimates disclosed in note 25 and
whether these have been appropriately relected 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 identiied 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 udt mtters
Key audit matters are those matters that, in our professional
judgment, were of most signiicance in our audit of the
inancial statements of the current period and include the
most signiicant assessed risks of material misstatement
(whether or not due to fraud) that we identiied. These
matters included those which had the greatest eect on:
the overall audit strategy, the allocation of resources in the
audit; and directing the eorts 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
Financial statements Supplementary informationStrategic report Corporate governance
Independent udtor’s report to the members of Tullow Ol plc contnued
e udt mtters contnued
Risk Our response to the risk
Key observations communicated
to the Audit Committee
Recoverblt of en
Intnble Explorton nd
Evluton 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 proiles; cost
proiles 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 signiicant 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 signiicant
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:
conirmed 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 conirm that the transfer of interest is
unconditional and irrevocable, and eective from
30 June 2023;
performed press searches to corroborate
management’s judgement that the other JV
partners have permanently withdrawn;
evaluated the professional qualiications 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 speciic 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 signiicant
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
relecting 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
relect 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 udt mtters contnued
Risk Our response to the risk
Key observations communicated
to the Audit Committee
Recoverblt of en
Intnble Explorton nd
Evluton Asset (‘E&E’)
contnued
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 relect 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.
Uncertn Tx Tretments
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
signiicant 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 proit and loss once settled.
Our procedures included, amongst others:
conirmed 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 proile in
respect of the tax claims;
evaluated the professional qualiications 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 signiicant tax claims against
multi-nationals in Ghana, in particular MTN,
to understand the basis of the claim and
the outcome;
obtained direct conirmation 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
satisied 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 udtor’s report to the members of Tullow Ol plc contnued
e udt mtters contnued
Risk Our response to the risk
Key observations communicated
to the Audit Committee
Uncertn Tx Tretments
contnued
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 outlows 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 relect 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.
Recoverblt of Propert,
Plnt nd Equpment
(‘PP&E’)
This is a forecast-based estimate.
The risk is that potential impairments
are not identiied on a timely basis.
The risk is similar to 2022 given the
reduction in TEN reserves oset 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 identiication
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:
conirmed 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 Tullows 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 speciic risks;
reconciled production and cost proiles 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
identiied within the Ghana
asset impairment models.
On sensitivity disclosures,
management appropriately
disclosed the impact on the
value of PP&E under the IEAs
NZE scenario.
Tullow Oil plc Annual Report and Accounts 2023 – 127
Financial statements Supplementary informationStrategic report Corporate governance
e udt mtters contnued
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 identiied as a key audit matter following
identiication of a prior year error in calculating the
recoverable value of investments. In the current year, this
has not been identiied as a key audit matter as no similar
error was identiied, resulting in a reduction in executive
involvement and lower allocation of resources.
Our pplcton of mterlt
We apply the concept of materiality in planning and
performing the audit, in evaluating the eect of identiied
misstatements on the audit and in forming our audit opinion.
Mterlt
The magnitude of an omission or misstatement that,
individually or in the aggregate, could reasonably be
expected to inluence 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 relects 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 Tullows 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) oset 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 aect our initial materiality.
As such, our materiality was unchanged from planning.
Performnce mterlt
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
dierences identiied in 2022 audit.
Audit work at component locations for the purpose
of obtaining audit coverage over signiicant 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).
Reportn threshold
An amount below which identiied misstatements are
considered as being clearly trivial.
We agreed with the Audit Committee that we would
report to them all uncorrected audit dierences in excess
of $1.5m (2022: $1.2m), which is set at 5% of planning
materiality, as well as dierences 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 nformton
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 udtor’s report to the members of Tullow Ol plc contnued
Other nformton contnued
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.
Opnons on other mtters prescrbed b
the Compnes 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.
Mtters on whch we re requred to report
b excepton
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 identiied 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 speciied
by law are not made; or
we have not received all the information and
explanations we require for our audit.
Corporte Governnce Sttement
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 speciied 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 identiied 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 conirmation 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 eectiveness 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
Responsbltes of drectors
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 satisied 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
Audtor’s responsbltes for the udt of
the fnncl sttements
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 auditors 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
inluence the economic decisions of users taken on the
basis of these inancial statements.
Explnton s to wht extent the udt ws
consdered cpble of detectn rreulrtes,
ncludn frud
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 signiicant 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 signiicant
laws and regulations that may have an eect 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 deined risk
criteria based on our understanding of the business;
inquiries with legal counsel, group management, internal
audit and all full and speciic 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 identiied,
we consulted the relevant EY local teams andEY
specialists who aided us in determining suicient,
andexecuting appropriate, procedures to respond
totheriskidentiied.
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.
Thisdescription forms part of our auditor’s report.
Other mtters we re requred 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 sttement
Year ended 31 December 2023
2023 2022
Notes$m$m
Continuing activities
Revenue
2
1 ,6 3 4 .1
1 ,7 8 3 .1
Cost of sales
4
(8 6 9. 2)
(6 9 7. 5)
Gross proit
76 4 .9
1, 085.6
Administrative expenses
4
(56. 1)
(51 .0)
Gain on bargain purchase
196.8
Other gains
0.2
3 .1
Exploration costs written o
8
(2 7. 0)
(1 0 5 . 2)
Impairment of property, plant and equipment, net
9
(408.1)
(3 9 1 . 2)
Provisions reversal/(expense)
4
2 2 .0
(4 . 2)
Operating proit
295.9
73 3.9
(Loss)/gain on hedging instruments
(0. 4)
0.8
Gain on bond buyback
16
86.0
Finance income
5
4 4.0
42. 9
Finance costs
5
(32 9 .6)
(3 35. 5)
Proit from continuing activities before tax
95.9
4 4 2 .1
Income tax expense
6
(2 0 5 . 5)
(3 9 3 . 0)
(Loss)/proit for the year from continuing activities
(10 9.6)
4 9 .1
Attributable to:
Owners of the Company
(10 9.6)
4 9 .1
(Loss)/earnings per ordinary share from continuing activities
7
¢
¢
Basic
(7. 6)
3 .4
Diluted
(7. 6)
3.3
Group sttement of comprehensve ncome nd expense
Year ended 31 December 2023
2023 2022
Notes$m$m
(Loss)/ proit for the year
(10 9.6)
4 9 .1
Items that may be reclassiied to the income statement in subsequent periods
Cash low hedges
Gains/(losses) arising in the year
17
2 0 .1
(39 9. 5)
Gains arising in the year – time value
17
50. 3
2 1 .7
Reclassiication adjustments for items included in proit on realisation
17
111 .3
28 8 .5
Reclassiication adjustments for items included in loss on realisation – time value
17
2 7. 8
3 0. 8
Exchange dierences on translation of foreign operations
(5. 8)
10.2
Other comprehensive income/(expense)
20 3 .7
(4 8. 3)
Tax relating to components of other comprehensive income/(expense)
Net other comprehensive income/(expense) for the year
2 03 .7
(4 8 . 3)
Total comprehensive income for the year
9 4 .1
0.8
Attributable to:
Owners of the Company
9 4 .1
0.8
Tullow Oil plc Annual Report and Accounts 2023 – 131
Financial statements Supplementary informationStrategic report Corporate governance
Group blnce sheet
As at 31 December 2023
2023 2022
Notes$m$m
ASSETS
Non-current assets
Intangible exploration and evaluation assets
8
2 8 7. 0
288 .6
Property, plant and equipment
9
2,532 .8
2, 98 1.4
Other non-current assets
10
338 .6
3 2 7. 1
Deferred tax assets
20
1 9.6
14. 5
3,178.0
3,611.6
Current assets
Inventories
11
1 0 7.3
181.6
Trade receivables
12
43.5
26.8
Other current assets
10
57 1 .2
5 6 7. 9
Current tax assets
6
3.8
15.4
Cash and cash equivalents
13
49 9.0
63 6.3
Assets classiied as held for sale
14
55.8
1, 28 0.6
1, 428.0
Total assets
4,458.6
5,0 3 9.6
LIABILITIES
Current liabilities
Trade and other payables
15
(7 7 5. 0)
(7 5 0. 2)
Borrowings
16
(10 0. 0)
(10 0.0)
Provisions
19
(6 7. 9)
(9 8 . 8)
Current tax liabilities
6
(23 0 .5)
(1 8 6 .0)
Derivative inancial instruments
17
(3 5 .0)
(18 6 . 3)
Liabilities associated with assets classiied as held for sale
14
(1 7. 6)
(1, 2 26 . 0)
(1 , 32 1. 3)
Non-current liabilities
Trade and other payables
15
(78 3 . 2)
(78 0.0)
Borrowings
16
(1, 9 8 4 . 6)
(2 ,3 72 . 8)
Provisions
19
(4 0 3 .7)
(41 5 .6)
Deferred tax liabilities
20
(4 2 0. 5)
(5 51. 5)
Derivative inancial instruments
17
(57 .9)
(3, 5 9 2 .0)
(4 ,1 7 7. 8)
Total liabilities
(4 , 8 1 8 .0)
(5, 49 9.1)
Net liabilities
(3 5 9. 4)
(4 5 9 . 5)
EQUITY
Called-up share capital
21
2 1 6 .7
215. 2
Share premium
21
1 , 2 9 4 .7
1 , 2 9 4.7
Foreign currency translation reserve
(2 44.4)
(2 3 8 .6)
Hedge reserve
17
(1 8 .9)
(1 50 . 3)
Hedge reserve – time value
17
(16 . 3)
(9 4 . 4)
Merger reserve
755.2
755. 2
Retained earnings
(2,346.4)
(2 , 241. 3)
Equity attributable to equity holders of the Company
(3 5 9. 4)
(4 5 9 . 5)
Total equity
(3 5 9. 4)
(4 5 9 . 5)
Approved by the Board and authorised for issue on 5 March 2024.
Rahul Dhir Richard Miller
Chief Executive Oicer fficer Chief Financial OicerChief Financial Officer
5 March 2024 5 March 2024
132 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Group sttement of chnes n equt
Year ended 31 December 2023
ForeignHedge
currency reserve
ShareSharetranslationHedge– time Merger RetainedTotal
capitalpremium
reserve
1
reserve
2
valuereserve earnings equity
Notes$m$m$m$m$m$m$m$m
At 1 January 2022
214 . 2
1 , 2 94 .7
(24 8. 8)
(3 9. 3)
(14 6. 9)
7 55. 2
(2 , 2 9 5 . 2)
(4 6 6.1)
Proit for the year
4 9.1
4 9 .1
Hedges, net of tax
17
(111.0)
52 . 5
(5 8 . 5)
Currency translation
adjustments
1 0.2
10. 2
Exercise of employee
share options
21
1.0
(1 .0)
Share-based
payment charges
22
5.8
5.8
At 1 January 2023
215.2
1 , 2 9 4 .7
(2 38 .6)
(150.3)
(94 . 4)
755.2
(2 ,2 41. 3)
(4 5 9 . 5)
Loss for the year
(10 9 .6)
(1 0 9. 6)
Hedges, net of tax
17
131 . 4
7 8 .1
2 0 9.5
Currency translation
adjustments
(5. 8)
(5. 8)
Exercise of employee
share options
21
1.5
(1 . 5)
Share-based
payment charges
22
6 .0
6 .0
At 31 December 2023
21 6 .7
1 , 2 94 .7
(244.4)
(18 . 9)
(1 6 . 3)
75 5.2
(2,346.4)
(3 5 9. 4)
2
1. The foreign currency translation reserve represents exchange gains and losses arising on translation of foreign currency subsidiaries, monetary items
receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur, which form part of the net investment in a
foreign operation.
2. The hedge reserve represents gains and losses on derivatives classiied as eective cash low hedges.
Tullow Oil plc Annual Report and Accounts 2023 – 133
Financial statements Supplementary informationStrategic report Corporate governance
Group csh flow sttement
Year ended 31 December 2023
2023 2022
Notes$m$m
Cash lows from operating activities
Proit from continuing activities before tax
95.9
4 42 .1
Adjustments for:
Depreciation, depletion and amortisation
9
43 6.6
425 .8
Gain on bargain purchase
(19 6 . 8)
Other gains
(0. 2)
(3 .1)
Taxes paid in kind
6
(11 . 0)
(2 1. 4)
Exploration costs written o
8
2 7. 0
105.2
Impairment of property, plant and equipment, net
9
408. 1
39 1. 2
Provisions (reversal)/ expense
(2 2 .0)
4.2
Payment for provisions
19
(0. 6)
(1 2 7. 3)
Decommissioning expenditure
(78 .1)
(5 7. 7)
Share-based payment charge
22
6.0
5.8
Loss/(gain) on hedging instruments
17
0.4
(0. 8)
Gain on bond buyback
16
(86.0)
Finance income
5
(4 4. 0)
(4 2 . 9)
Finance costs
5
329.6
3 35. 5
Operating cash low before working capital movements
1, 0 6 1 .7
1, 259. 8
(Increase)/decrease in trade and other receivables
(36 . 3)
28 8 .4
Decrease/(increase) in inventories
66.6
(4 8 .0)
Increase/(decrease) in trade payables
5 8 .7
(1 9 3 .1)
Cash generated from operating activities
1,150 . 7
1 , 3 0 7. 1
Income taxes paid
(274 . 5)
(2 2 9 . 3)
Net cash from operating activities
876 . 2
1 ,0 7 7. 8
Cash lows from investing activities
Proceeds from disposals
0.7
6 8 .1
Purchase of additional interest in joint operation
(126 . 8)
Purchase of intangible exploration and evaluation assets
27
(3 0. 2)
(42 . 6)
Purchase of property, plant and equipment
27
(26 2 .3)
(2 6 3 . 8)
Interest received
23.3
8.9
Net cash used in investing activities
(268.5)
(3 5 6 . 2)
Cash lows from inancing activities
Debt arrangement fees
(5 .0)
Repayment of borrowings
27
(4 3 2 . 2)
(10 0.0)
Drawdown of borrowings
27
1 2 9.7
Payment of obligations under leases
(1 9 5 .0)
(20 3 .8)
Finance costs paid
(2 4 0.0)
(24 9 .0)
Net cash used in inancing activities
(742 . 5)
(5 52. 8)
Net (decrease)/increase in cash and cash equivalents
(13 4 .8)
168. 8
Cash and cash equivalents at beginning of year
636.3
4 6 9 .1
Foreign exchange loss
(2 . 5)
(1.6)
Cash and cash equivalents at end of year
13
4 99.0
636. 3
134 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Accountn pAccounting polcesolicies
Year ended 31 December 2023
() Generl nformta) General information
Tullow Oil plc is a company incorporated and domiciled in
the United Kingdom under the Companies Act 2006. The
address of the registered oice is of the registered office is Tullow Oil plc, Building
9, Chiswick Park, 566 Chiswick High Road, London W4
5XT. The primary activity of the Group is the discovery and
production of oil and gas.
(b) Adopton of new nd re) Adoption of new and revsed stndrdsvised standards
New Interntonl Fnncl Reportnernational Financial Reporting
StndrdsdoptedStandards adopted
The Group has applied the following standards and
amendments for the irst time for their annts for the first time for their annual reporting
period commencing 1Janug 1 January 2023:
IFRS 17 Insurance Contracts
Disclosure of Accounting Policies – Amendments to IAS
1 and IFRS Practice Statement 2
Deefinition of Accounting Estimates – Amendments to IAS 8
Deferred Tax related to Assets and Liabilities arising from
a Single Transaction – Amendments to IAS 12
The amendments listed above did not have any impact
on the amounts recognised in prior periods and are not
expected to signiicexpected to significantly aect the current or future peantly affect the current or future periods.
International Tax Reform – Pillar Two
Model Rules – Amendments to IAS 12
On 23 May 2023 an amendment to IAS 12 was issued which
introduced a temporary mandatory exception in IAS 12 from
recognising and disclosing deferred tax assets and liabilities
related to the top-up tax, which is eective immeh is effective immediately and
require new disclosures about the Pillar Two exposures.
The amendments clarify that IAS 12 applies to income
taxes arising from tax law enacted or substantively
enacted to implement the Pillar Two Model Rules
published by the Organization for Economic Cooperation
and Development (OECD), including tax law that
implements qualints qualified domestic minimum top-up taxes.
The mandatory exception applies retrospectively.
However, because no new legislation to implement the
top-up tax was enacted or substantively enacted on 31
December 2022 in any jurisdiction in which the Group
operates and no related deferred tax was recognised at
that date, the retrospective application has no impact on
the Group’s consolidated Financial Statements.
Upcomn InterntUpcoming Internatonl Fnncl Reportnional Financial Reporting
StndStandrards not et dot yet adopted
Certain new accounting standards, amendments to
accounting standards and interpretations have been
published that are not mandatory for 31 December 2023
reporting periods and have not been early adopted by the
Group. These standards, amendments or interpretations
are not expected to have a material impact on the entity in
the current or future reporting periods and on foreseeable
future transactions.
(c) Chnes n cc) Changes in accountn pocounting polclicy
The Group’s accounting policies are consistent with the
prior year.
(d) Bss oasis of preprtoneparation
The Financial Statements have been prepared in
accordance with UK-adopted international accounting
standards (UK-adopted IFRSs) and International Financial
Reporting Standards adopted pursuant to Regulation (EC)
No. 1606/2002 as it applies in the European Union. The
inanfinancial reporting framework that has been applied in the
preparation of the Parent Company Financial Statements
is applicable law and United Kingdom Accounting
Standards, including FRS 101 “Reduced Disclosure
Framework” (United Kingdom Generally Accepted
Accounting Practice).
The Financial Statements have been prepared on the
historical cost basis, except for derivative inanciis, except for derivative financial
instruments and contingent considerations which
have been measured at fair value less cost to sell. The
Financial Statements are presented in US dollars and all
values are rounded to the nearest $0.1 million, except
where otherwise stated. Thematerial ace stated. The material accounting policies
adopted by the Group are set out below.
Lqudt rs mnement nd on concernLiquidity risk management and going concern
Assessment period and assumptions
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
dierent scedifferent scenarios including, but not limited to, changes
in commodity prices, dierent production rates from the s, different production rates from the
Group’s producing assets and dierent outcomes offerent 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 outlflows in
respect of all ongoing litigations/arbitrations within the
Low Case, with an additional $48 million outlow bflow being
included for the cases expected to progress in the period
under assessment. The low case does not include the
outlow for the full expoflow 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
outlows have beflows 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 ailiates mayroup or its affiliates may, at any time and from time to
Tullow Oil plc Annual Report and Accounts 2023 – 135
Financial statements Supplementary informationStrategic report Corporate governance
(d) Bss of preprton contnued
Lqudt rs mnement nd on concern
contnued
Assessment period and assumptions contnuedinued
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.
The Group’s forecasts show that the Group and Parent
Company will be able to operate within its current debt
facilities and have suicid have sufficient inaent financial 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.
(e) Bss of consoldasis of consolidatontion
The consolidated Financial Statements incorporate
the Financial Statements of the Company and entities
controlled by the Company (its subsidiaries) made up
to 31 December each year. Control is achieved where
the Company has the power over an investee entity,
is exposed, or has rights, to variable returns from its
involvement with the investee and has the ability to use its
power to aect its returns. power to affect its returns.
The results of subsidiaries acquired or disposed of during
the year are included in the Group income statement
from the transaction date of acquisition, being the date
on which the Group gains control, and will continue to be
included until the date that control ceases.
If the Group loses control over a subsidiary, it derecognises
the related assets, liabilities, non-controlling interest and
other components of equity, while any resultant gain or loss
is recognised in proit or lod in profit or loss. Any investment retained is
recognised at fair value. All intra-Group transactions, balances,
income and expenses are eliminated onconre eliminated on consolidation.
Where necessary, adjustments are made to the Financial
Statements of subsidiaries to bring the accounting policies
used into line with those used by the Group.
(e) Bss of consoldton contnued
Jont rrnementsJoint arrangements
The Group is engaged in oil and gas exploration,
development and production through unincorporated joint
arrangements; these are classiisified as joint operations in
accordance with IFRS 11. The Group accounts for its share of
the results and assets and liabilities of these joint operations.
In addition, where Tullow acts as operator to the joint
operation, the gross liabilities and receivables (including
amounts due to or from non-operating partners) of the joint
operation are included in the Group’s balance sheet.
(f) Busness c(f) Business combntonsombinations
The acquisition method of accounting is used to account
for all business combinations, regardless of whether
equity instruments or other assets are acquired. The
consideration transferred for the acquisition comprises:
Fair values of the assets transferred.
Liabilities incurred to the former owners of the
acquired business.
Equity interests issued by the Group.
Fair value of any asset or liability resulting from a
contingent consideration arrangement.
Fair value of any pre-existing equity interest in
thesubsidiarthe subsidiary.
The Group determines that it has acquired a business
when the acquired set of activities and assets include an
input and a substantive process that together signiicgnificantly
contribute to the ability to create outputs. The acquired
process is considered substantive if it is critical to the
ability to continue producing outputs, and the inputs
acquired include an organised workforce with the
necessary skills, knowledge, or experience to perform
that process or it signiiignificantly contributes to the ability
to continue producing outputs and is considered unique
or scarce or cannot be replaced without signit significant cost,
eorteffort, or delay in the ability to continue producing outputs.
Identiiablntifiable assets acquired and liabilities and contingent
liabilities assumed when control is obtained over a business,
and when an interest or an additional interest is acquired in a
joint operation which is a business are, with limited exceptions,
measured initially at their fair values at the acquisition date.
Acquisition-related costs are expensed as incurred.
The excess of the consideration transferred, amount of
any non-controlling interest in the acquired entity, and
acquisition-date fair value of any previous equity interest in
the acquired entity over the fair value of the net identiiablntifiable
assets acquired is recorded as goodwill. If those amounts
are less than the fair value of the net identiiaentifiable assets of
the business acquired, the dierencquired, the difference is recognised directly
in proit or loin profit or loss as a bargain purchase.
136 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Accountn polces contnued
Year ended 31 December 2023
() Re(g) Revenue from contrvenue from contracts wth customersts with customers
Revenue from contracts with customers represents the
sales value, net of VAT, of the Group’s share of liftings in
the year. Revenueisreco. Revenue is recognised when control of the goods
or services are transferred to the customer at an amount
that relects the cthat reflects the consideration towhich the Go which the Group expects
to be entitled in exchange for those goods or services.
The Group has concluded that it isthed that it is the principal inall of ipal in all of
its revenue arrangements since it controls the goods or
services before transferring them to the customer.
) Revenue fri) Revenue from crude oude oil sll sales
The crude oil produced by the upstream operations is
sold to external customers. Revenue from the sale of
crude oil is recognised atthe pd at the point in time when control
of the product is transferred to the customer, which is
typically when goods are delivered, and title has passed.
The transportation and shipping costs associated with the
transfer of the product to the point of sale is recognised as
a selling cost.
Under the terms of the relevant production sharing
arrangements, the Group is entitled to its participating
share in the crude oil based on the Group’s working
interest. Revenue from contracts with customers
is recognised based on the actual volumes sold to
customers. No adjustments are made to revenue for
any dierences bany differences between volumes sold to customers
and unsold volumes which the Group is entitled to sell
based on its working interest. Revenue in respect of such
volumes is only recognised when there is a transfer of
output to the Group’s customers. Dierenc. Differences between
the volume which the Group is entitled to sell based on its
working interest and the actual volumes that the Group
has sold to customers are recognised as an over/underlift
(note (h)) within cost of sales.
Under the terms of the Production Sharing Contracts in
Gabon and Côte d’Ivoire, the Group is not required to pay
any corporate income taxes. The share of the proit oil fit oil
which the government is entitled to is deemed to include
a portion representing the notional corporate income tax
paid by the government on behalf of the contractors. This
portion of notional corporate income tax is presented
as an income tax expense with a corresponding amount
recognised in Revenue.
The Group’s sales of crude oil are priced based on the
consideration specicified in contracts with customers with
reference to quoted market prices in active markets,
adjusted for a quality dierential bay differential based on gravity of the
crude oil sold relative to Brent. Invoices are typically paid
on 30-60 day terms.
For certain non–operated arrangements, the Group’s stake is
structured as a carried interest, in which all costs relating to
the performance of petroleum operations are borne by the
operator and other Joint Venture Partners and are recovered
upon production. Thereco. The recognition of revenue is on net basis,
where the Group only accounts for its share of proit oil.ounts for its share of profit oil.
() Revenue from contrcts wth
customers contnued
) Revenue frii) Revenue from s som gas slales
Revenue associated with the sale of natural gas in Ghana is
measured in line with the consideration agreed per MMBtu
in the existing sales contracts with oontracts with offtakers. The transfer of
control occurs when title passes at the point the customer
takes physical delivery. The Group principally satisally satisfies its
performance obligations at a point in time and the amounts
of revenue recognised relating to performance obligations
satisisatisfied over time are not signied over time are not significant.
(h) Over/underlferlift
Lifting or oting or offtake arrangements for oil and gas produced
in certain of the Group’s jointly owned operations are
such that each participant may not receive and sell its
precise share of the overall production in each period. The
resulting imbalance between cumulative entitlement and
cumulative production less stock is underlift or overlift.
Underlift and overlift are valued at market value and
included within receivables and payables respectively.
Movements during an accounting period are adjusted
through cost of sales such that gross proit is recogrofit is recognised
on an entitlements basis.
() Inv(i) Inventoresentories
Inventories, other than oil products, are stated at the
lower of cost and net realisable value. Cost is determined
on a weighted average cost basis and comprises direct
purchase costs. Net realisable value is determined by
reference to prices existing at the balance sheet date, less
estimated costs of completion and the estimated costs
necessary to make the sale.
Oil product is stated at net realisable value and changes in
net realisable value are recognised in the income statement.
() Foren currencj) Foreign currencies
The US dollar is the presentational currency of the Group.
For the purpose of presenting consolidated Financial
Statements, the assets and liabilities of the Group’s non-US
dollar-denominated entities are translated at exchange
rates prevailing on the balance sheet date. Income and
expense items are translated at the average exchange
rate for the period. Currency translation adjustments
arising on the restatement of opening net assets of
non-US dollar subsidiaries, together with dierencer with differences
between the subsidiaries’ results translated at average
rates versus closing rates, are recognised in the statement
of comprehensive income and expense and transferred
to the foreign currency translation reserve. All resulting
exchange dierence differences are classisified as equity until disposal
of the subsidiary. On disposal, the cumulative amounts
of the exchange dierencof the exchange differences are recognised as income
or expense.
Tullow Oil plc Annual Report and Accounts 2023 – 137
Financial statements Supplementary informationStrategic report Corporate governance
() Foren currences contnued
Transactions in foreign currencies are recorded at the rates
of exchange ruling at the transaction dates. Monetary
assets and liabilities are translated into functional currency
at the exchange rate ruling at the balance sheet date,
with a corresponding charge orcredit to the incomrge or credit to the income
statement. However, exchange gains and losses arising
on 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, are recognised in the foreign currency
translation reserve and recognised in proit or lod in profit or loss on
disposal of the net investment.
() Assets clssfed s held for sle(k) Assets classified as held for sale
Non-current assets or disposal groups classiisified as held
for sale are measured at the lower of carrying amount
and fair value less costs to sell. A loss for any initial or
subsequent write-down of the asset or disposal group to
a revised fair value less costs to sell is recognised at each
reporting date. Non-current assets and disposal groups
are classiieified as held for sale if their
carrying amount will be recovered through a sale
transaction rather than through continuing use. This
condition is regarded as met only when the sale is highly
probable and the asset (or disposal group) is available for
immediate sale in its present condition. Management must
be committed to the sale, which should be expected to
qualify for recognition as a completed sale within one year
from the date of classiicatif classification. Assets and corresponding
liabilities classisified as held for sale are
presented separately as current items in the statement of
inancial posfinancial position.
(l) IntnbleIntangible, explort, exploraton nd eion and evluvaluatontion
ssets nd olassets and oil nd s ssets and gas assets
The Group adopts the successful eorsful efforts method of
accounting for exploration and evaluation costs. Pre-
licence costs are expensed in the period in which they
are incurred. All licence acquisition, exploration and
evaluation costs and directly attributable administration
costs are initially capitalised in cost centres by well, ield oentres by well, field or
exploration area, as appropriate.
These costs are then written o asts are then written off as exploration costs in the
income statement unless commercial reserves have been
established or the determination process has not been
completed and there are no indications of impairment.
Exploration and evaluation assets are tested for impairment
when reclassiied teclassified to development assets, or whenever facts
and circumstances indicate impairment. An impairment
loss is recognised for the amounts by which the exploration
and evaluation assets’ carrying amount exceeds their
recoverable amount. The recoverable amount is the higher
of the exploration and evaluation asset’s fair value less cost
to sell and their value in use.
(l) Intnble, explorton nd evluton
ssets nd ol nd s ssets contnued
Once commercial reserves are found, exploration and
evaluation assets are tested for impairment and transferred
to development assets. No depreciation and/or amortisation
is charged during the exploration and evaluation phase.
All ieAll field development costs are capitalised as property, plant
and equipment. Property, plant and equipment related to
production activities is amortised in accordance with the
Group’s depletion and amortisation accounting policy.
Cash consideration received on farm-down of exploration
and evaluation assets is credited against the carrying value
of the asset. The excess amount over the carrying value of
the asset is recognised as a gain on disposal of exploration
and evaluation assets in the statement of proit or loe statement of profit or loss.
(m) Commercl reserial reserves
Commercial reserves are proven and probable oil
and gas reserves, which are deinch are defined as the estimated
quantities of crude oil, natural gas and natural gas liquids
which geological, geophysical and engineering data
demonstrate with a speciiefied degree of certainty to
berecoverable in fube recoverable in future years from known reservoirs and
which are considered commercially producible. There
should be a 50% statistical probability that the actual
quantity of recoverable reserves will be more than the
amount estimated as proven and probable reserves and a
50% statistical probability that it will be less.
(n) Depleton nn) Depletion and mord amortstistonation
All expenditure carried within each iach field is amortised from
the commencement of production on a unit of production
basis, which is the ratio of oil and gas production in the
period to the estimated quantities of commercial reserves
at the end of the period plus the production in the
period, generally on a ielrally on a field-by-ield baby-field basis or by a group of
ielfields which are reliant on common infrastructure. Costs
used in the unit of production calculation comprise the
net book value of capitalised costs plus the estimated
future ield develofuture field development costs required to recover the
commercial reserves remaining. Changes in the estimates
of commercial reserves or future ield dr future field development costs
are dealt with prospectively.
(o) Impo) Imparment of properirment of propertty, plnt, plant
ndequpmentand equipment
The Group assesses at each reporting date whether there
is an indication that an asset or Cash Generating Unit (CGU)
may be impaired. In assessing whether an impairment
is required, the carrying value of the asset or CGU is
compared with its recoverable amount. The recoverable
amount is the higher of the assets/CGU’s fair value less
costs of disposal (FVLCD) and value in use (VIU). Given the
nature of the Group’s activities, information on the fair value
of an asset is usually diually difficult to obtain unless negotiations
with potential purchasers or similar transactions are
taking place.
138 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Accountn polces contnued
Year ended 31 December 2023
(o) Imprment of propert, plnt
ndequpment contnued
Consequently, unless indicated otherwise, the recoverable
amount used in assessing the impairment charges
described below is VIU. The Group estimates VIU using a
discounted cash loted cash flow model.
In order to discount the future cash unt the future cash flows the Group
calculates asset or CGU-specicific 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pohe 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determines determined by whether the
assets are onshore oroshor offshore.
Where there is evidence of economic interdependency
between ields,between fields, such as common infrastructure, the ields he fields
are grouped asasind as a single CGU for impairment purposes.
Where conditions giving rise to impairment subsequently
reverse, the eeverse, the effect of the impairment charge is also
reversed as a credit tothe incoms a credit to the income statement, net of
any amortisation that would have been charged since
theimpairmthe impairment.
(p) Decommssonnecommissioning
Provision for decommissioning is recognised in full
when the related facilities are installed. A corresponding
amount equivalent to the provision is also recognised
as part of the cost of the related property, plant and
equipment. The amount recognised is the estimated
cost of decommissioning, discounted to its net present
value using a risk-free rate, and is re-assessed each year
in accordance with local conditions and requirements.
Changes in the estimated timing of decommissioning
or decommissioning cost estimates are dealt with
prospectively by recording an adjustment to the provision,
and a corresponding adjustment to property, plant
and equipment. The unwinding of the discount on the
decommissioning provision is included as a inance cost. finance cost.
(q) Propertty, plnt nd equpment –, plant and equipment –
non-ol nd s soil and gas assets
Property, plant and equipment is stated in the balance sheet
at cost less accumulated depreciation and any recognised
impairment loss. Depreciation on property, plant and
equipment other than production assets is provided at rates
calculated to write o the ce off the cost less the estimated residual
value of each asset on a straight-line basis over its expected
useful economic life of between three and ten years.
(r) Shre ssue eShare issue expenses nd shrexpenses and share
premum ccountpremium account
Costs of share issues are written o ages are written off against the premium
arising on the issues of share capital.
(s) Borrows) Borrowin costsng costs
Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time
to get ready for their intended use or sale, are added to
the cost of those assets, until such time as the assets are
substantially ready for their intended use or sale.
All other All other finance costs, which include interest on
borrowings calculated using the eeing the effective interest method
as described in paragraph (aa), obligations under der finance
leases, the unwinding eect of discg effect of discounting provisions
and exchange dierencefferences, are recognised in the income
statement in the period in which they are incurred.
(t) T Taxation
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 dierency differences 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 proits frrofits from which the underlying
temporary dierency differences can be deducted. Deferred tax is
measured on a non-discounted basis.
Deferred tax is provided on temporary dierencrary differences
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
didifference is reversed.
Petroleum revenue tax (PRT) is treated as an income tax
and deferred PRT is accounted for under the temporary
dierence mdifference method. UK PRT refunds are included in the
income statement and is taxable for UK corporation tax.
(u) Pensonsions
Contributions to the Group’s deined contfined contribution pension
schemes are charged to operating proit on an accrating profit on an accrual basis.
(v) Derv) Derivatvtive fnncl nstrumeinancial instruments
The Group uses derivative inancial inerivative financial instruments, such
as forward currency contracts and commodity options
contracts, to hedge itsforeign currency risks and e its foreign currency risks and
commodity price risks respectively.
Derivatives are recognised initially at fair value at the date
a derivative contract is entered into and are subsequently
remeasured totured to their fair value at each reporting date.
The resulting gain or loss is recognised in proit or losrofit or loss
immediately unless the derivative is designated and
eective as a heeffective as a hedging instrument, in which event the
Tullow Oil plc Annual Report and Accounts 2023 – 139
Financial statements Supplementary informationStrategic report Corporate governance
(v) Dervtve fnncl nstruments
contnued
timing of the recognition in proit or losrofit or loss depends on the
nature of the hedge relationship.
For the purpose of hedge accounting, hedges are classisified as:
Fair value hedges when hedging the exposure to
changes in the fair value of a recognised asset or liability
or an unrecognised ed firmcomirm commitment.
Cash low heh flow hedges when hedging the exposure to
variability in cash lows that is eithh flows that is either attributable to a
particular risk, or associated with a recognised asset
or liability or a highly probable forecast transaction
or the foreign currency risk in an unrecognised irm d firm
commitment.
Hedges of a net investment in a foreign operation.
At the inception of a hedge relationship, the Group
formally designates and documents the hedge relationship
to which it wishes toapply hes to apply hedge accounting.
The documentation includes identiicatification of the hedging
instrument, the hedged item, the nature of the risk being
hedged and how the Group will assess whether the
hedging relationship meets the hedge eeche hedge effectiveness
requirements (including the analysis of sources of hedge
ineectiveneineffectiveness and how the hedge ratio is determined).
A hedging relationship qualiielifies for hedge accounting if it
meets all of the following eectivenes all of the following effectiveness requirements:
There is ‘an economic relationship’ between the hedged
item and the hedging instrument.
The eect of cThe effect of credit risk does not ‘dominate the value
changes’ that result from that economic relationship.
The hedge ratio of the hedging relationship is the same
as that resulting from the quantity of the hedged item
that the Group actually hedges and the quantity of the
hedging instrument that the Group actually uses to
hedge that quantity of hedged item.
If a hedging relationship ceases to meet the hedge
eectiveneeffectiveness requirement relating to the hedge ratio
but the risk management objective for that designated
hedging relationship remains the same, the Group adjusts
the hedge ratio of the hedging relationship (i.e.rebalancship (i.e. rebalances
the hedge) so that it meets the qualifying criteria again.
The Group designates only the intrinsic value of option
contracts as a hedged item, i.e. excluding the time value of
the option. The changes in the fair value of the aligned time
value of the option are recognised in other comprehensive
income and accumulated in the time value hedge reserve.
If the hedged item is transaction related, the time value is
reclassiisified to proit or losed to profit or loss when the hedged item aects ed item affects
proit or loss. Ifofit or loss. If the hedged item is time period-related, then
the amount accumulated in the time value hedge reserve
is reclassisified to proit or loied to profit or loss on a rational basis. Those
reclassiisified amounts are recognised in proit or lon profit or loss in the
same line as the hedged item. Furthermore, if the Group
expects that some or all of the loss accumulated in hedging
(v) Dervtve fnncl nstruments
contnued
reserve will not be recovered in the future, that amount is
immediately reclassiied teclassified to proit or loss.ofit or loss.
Csh flow hedCash flow hedges
The eective poThe effective portion of the gain or loss on the hedging
instrument is recognised in OCI in the cash ash flow hedge
reserve, while any ineective pove, while any ineffective portion is recognised
immediately in the statement of proit or ldiately in the statement of profit or loss. The
cash low heh flow hedge reserve is adjusted to the lower ofthe he lower of the
cumulative gain or loss on the hedging instrument and the
cumulative change in fair value of the hedged item.
The Group uses oil option contracts for its exposure to
volatility of Dated Brent prices. The ineective porffective portion
relating to option contracts is recognised as gain or loss on
hedging instruments in the Group income statement.
Amounts previously recognised in other comprehensive
income and accumulated in equity are reclassisified to proit ied to profit
or loss in the periods when the hedged item aects proit ed item affects profit
or loss, in the same line as the recognised hedged item.
Cash lowCash flow hedge accounting is discontinued only when
the hedging relationship or a part thereof ceases to meet
the qualifying criteria. This includes when the designated
hedged forecast transaction or part thereof is no longer
considered to be highly probable to occur, or when the
hedging instrument is sold, terminated or exercised without
replacement or rollover. When cash ash flow hedge accounting
is discontinued, amounts previously recognised within other
comprehensive income remain in equity until the forecast
transaction occurs and are reclassiisified to proit or losed to profit or loss or
transferred to the initial carrying amount of a non-n-financial
asset or liability as above. If the forecast transaction is no
longer expected to occur, amounts previously recognised
within other comprehensive income will be immediately
reclassiied tclassified to proit or loss.ofit or loss.
(w) Leases
On inception of a contract, the Group assesses whether
the contract is, or contains, a lease. The contract is, or
contains, a lease if it conveys the right to control the use
of an identiied antified asset for a period of time in exchange
for consideration. To determine whether thecont the contract
conveys the right to control the use of an identiieentified asset,
the Group assesses whether the contract involves the use
of an identiied antified asset, the Group has the right to obtain
substantially all of the economic beneits from the use of fits from the use of
the asset throughout the period of use, and the Group has
the right to direct the use of the asset.
Lessee ccountLessee accountinng
Leases are recognised as a right-of-use asset and a
corresponding liability at the date at which the leased
asset is available for use bythe Group. The righte by the Group. The right-of-use
asset is initially measured at cost, which comprises
the initial amount of the lease liability, in case of Joint
operation, adjusted for any amount receivable from Joint
140 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Accountn polces contnued
Year ended 31 December 2023
(w) Leses contnued
Lessee ccountn contnued
Venture Partners and any lease payments made at or
before the commencement date, plus any initial direct
costs incurred and an estimate of costs required to remove
or restore the underlying asset, less any lease incentives
received. The right-of-use asset is depreciated over the
shorter of the asset’s useful life and the lease term on
a straight-line basis, or applying the unit of production
method, and the Joint Venture receivable is allocated
against the monthly Joint Venture billing cycle.
The initial measurement of the corresponding lease liability
is at the present value of the lease payments that are not
paid at the lease commencement date, discounted using
the interest rate implicit in the lease or, if that rate cannot be
readily determined, the Group’s incremental borrowing rate.
The lease payments include lude fixed payments, less any lease
incentive receivable, variable leases payments based on
an index or rate, and amounts expected to be payable by
the lessee under residual value guarantees.
The lease liability is subsequently measured at amortised
cost using the eective inte effective interest method. It is remeasured
when there is a change in future lease payments arising
from a change in an index or rate, if there is a change in the
Group’s estimate of the amount expected to be payable
under a residual value guarantee or if the Group changes
its assessment of whether it will exercise a purchase,
extension or termination option. When the lease liability
is remeasured in this way, a corresponding adjustment is
made to the carrying amount of the right-of-use asset or
is recorded in proit or losrofit or loss if the carrying amount of the
right-of-use asset has been reduced to zero.
The Group has elected not to recognise right-of-use assets
and lease liabilities for short-term leases that have a lease
term of 12months or leterm of 12 months or less, and leases of low-value assets
with a value of $5,000.
Over the course of a lease contract, there will be taxable
timing dierenctiming differences that could give rise to deferred tax,
subject to local tax lawsand regulationx laws and regulations.
Extension and termination options are included in a
number of property and equipment leases across the
Group. These are used tomaximise are used to maximise operational lerational flexibility
in terms of managing the assets used in the Group’s
operations. The majority of extension and termination
options held are exercisable only by the Group and not by
the respective lessor.
(x) Shrhare-bsed pbased pamentsyments
The Group has applied the requirements of IFRS 2 Share-
based Payments. The Group has share-based awards that
are equity settled and cash settled as deinefined 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 eect of any marketthe effect of any market-based performance conditions.
(x) Shre-bsed pments contnued
This fair value, adjusted by the Group’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 modiodifications 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. Ateac. At each 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nncl ssets(y) Financial assets
At initial recognition, the Group measures a iasures a financial
asset at its fair value plus, in the case of a inse of a financial asset
not at fair value through proit or losnot at fair value through profit or loss (FVPL), transaction
costs that are directly attributable to the acquisition of the
inanfinancial asset. Transaction costs of inosts of financial assets carried
at FVPL are expensed in proit or lod in profit or loss.
The subsequent measurement of surement of financial assets depends
on their classisification, as set out overleaf.
) Fnncl ssetsi) Financial assets mesured t mortsed cost easured at amortised cost
Assets are subsequently classiisified and measured at
amortised cost when the business model of the Company
is to collect contractual cash lsh flows and the contractual
terms give rise to cash lterms give rise to cash flows that are solely payments
of principal and interest. These assets are carried at
amortised cost using the eeing the effective interest method if
the time value of money is signiicnificant. Gains and losses
are recognised in proit or ld in profit or loss when the assets are
derecognised, modiodified or impaired. This category of
inancifinancial assets includes trade and other receivables.
Financial assets measured at amortised cost include trade
receivables, loans and other receivables that have ixed or s that have fixed or
determinable payments that are not quoted in an active
market. Loans and receivables are measured at amortised
cost using the eective inte effective interest method, less any
impairment. Interest income is recognised by applying the
eective inteffective interest rate, except for short-term receivables
when the recognition of interest would be immaterial.
Interest income is accrued on a time basis, by reference
to the principal outstanding and at the eective intffective interest
rate applicable, which is the rate that exactly discounts
estimated future cash receipts through the expected life of
the inathe financial asset to that asset’s net carrying amount.
Tullow Oil plc Annual Report and Accounts 2023 – 141
Financial statements Supplementary informationStrategic report Corporate governance
() Fnncl ssets contnued
) ii) Fnninancl cial assets mess measured t fr vlue td at fair value throuhough
other comprehensve ncomeother comprehensive income
Assets are subsequently classiisified and measured at fair value
through other comprehensive income when the business
model of the Company is to collect contractual cash lowsh flows
and sell the inll the financial assets, and the contractual cash ntractual cash flows
represent solely payments ofprincayments of principal and interest.
) iii) Fninancl ncial assets mets measured t fr vlue ted at fair value throuough
profofit or loss
Financial assets are classisified as measured at fair value
through proit or losthrough profit or loss when the asset does not meet the
criteria to be measured at amortised cost or fair value
through other comprehensive income. These assets are
carried on the balance sheet at fairvalue with gaineet at fair value with gains or losses
recognised in the income statement. Derivatives, other than
those designated as eective heignated as effective hedging instruments, are
included in this category. As at 31 December 2023, the Group
does not have any inancial as not have any financial assets classiiefied at fair value
through proit or lofit or loss or other comprehensive income.
Regular way purchases and sales of inas of financial assets are
recognised on trade date, being the date on which the
Group commits to purchase or sell the asset. Financial
assets are derecognised when the rights to receive cash
lows from the inaflows from the financial assets have expired or have been
transferred and the Group has transferred substantially all
the risks and rewards of ownership.
Imprment of trde nd Jont VImpairment of trade and Joint Venture recevblesenture receivables
The Group applies the IFRS 9 simpliimplified approach to
measuring expected credit losses which uses a lifetime
expected loss allowance for all trade receivables. To
measure the expected credit losses, trade receivables
have been grouped based on shared credit risk
characteristics and days past due.
The expected loss rates are based on the payment proileayment profiles
of sales over the historical period and the corresponding
historical credit losses experienced during this period.
These rates are then applied to the gross carrying amount
of the receivable to arrive at the loss allowance for the
period. Based on management assessment, the credit
loss in trade receivables and Joint Venture receivable as at
31D31 December 2023 would be immaterial; therefore, in line
with IFRS 9, no impairment was recognised (2022: $nil).
In order to minimise the risk of default, credit risk is
managed on a Group basis (note 17).
(z) Csh nd csh equvlents Cash and cash equivalents
Cash and cash equivalents comprise cash at bank, demand
deposits and other short-term highly liquid investments that
are readily convertible to a known amount of cash and are
subject to an insignict to an insignificant risk of changes in value.
(a) Effectva) Effective nterest methode interest method
The eective interest method iThe effective interest method is a method of calculating
the amortised cost of a iost of a financial asset and of allocating
interest income over the relevant period. The eective e effective
interest rate is the rate that exactly discounts estimated
future cash receipts (including all fees on points paid or
received that form an integral part of the eective intert of the effective interest
rate, transaction costs and other premiums or discounts)
through the expected life of the inanthrough the expected life of the financial asset, or, where
appropriate, a shorter period.
Income is recognised on an eective intern an effective interest basis
for debt instruments other than those inane financial assets
classisified as at FVTPL.
(b) Fnncl lbltesab) Financial liabilities
The measurement of inarement of financial liabilities is determined by
the initial classiicfication.
) i) Fnncl lbltes Financial liabilities at frt fair vlue thr value throuh proftough profit
orlossor loss:
Those balances that meet the deinition of bfinition of being held for
trading are measured at fair value through proit ough profit or loss.
Such liabilities are carried on the balance sheet at fair value
with gains or losses recognised in the income statement.
) Fnncl lbltes mesured tii) Financial liabilities measured at m amortsed costtised cost:
All inanAll financial liabilities not meeting the criteria of being
classisified at fair value through proit or lied at fair value through profit or loss are classiieified
as inaas financial liabilities measured at amortised cost. The
instruments are initially recognised at its fair value net of
transaction costs that are directly attributable to the issue of
inanfinancial liability. Subsequent to initial recognition, inan, financial
liabilities are measured at amortised cost using the eective g the effective
interest method. Trade payables and borrowings fall under
this category of iny of financial instruments.
As at 31 December 2023 all ina23 all financial liabilities are
measured at amortised cost.
The Group derecognises a inas a financial liability when it
is extinguished, i.e. when the obligation speciieified in
the contract is discharged orcarged or cancelled or expires. A
substantial modiicfication of the terms of an existing
inanfinancial liability or a part of it is accounted for as an
extinguishment of the original inanl financial liability and the
recognition of a new inan of a new financial liability.
The dierencThe difference between the carrying amount of the
inanfinancial liability extinguished and any consideration paid
is recognised in the Income Statement as other income
if the transaction results in a gain, or inanr finance costs if the
result is a loss.
) Ofiii) Offsettn of fnncl nstrumentsfsetting of financial instruments:
Financial assets and inand financial liabilities are oset and the re offset and the
net amount is reported in the consolidated statement of
inanfinancial position ifthere is a currently enforn if there is a currently enforceable legal
right to oset the recognright to offset the recognised amounts and there is an
intention to settle on a net basis, to realise the assets and
settle the liabilities simultaneously .
142 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Accountn polces contnued
Year ended 31 December 2023
(c) Equac) Equit nstrumentsty instruments
Equity instruments are classisified according to the
substance of the contractual arrangements entered into.
An equity instrument is any contract that evidences a
residual interest in the assets of the Group after deducting
all of its liabilities. Equity instruments issued by the Group
are recorded at the proceeds received, net of direct
issue costs.
(d)ad) Provsons Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event,
it is probable that an outlflow of resources embodying
economic benenefits will be required to settle the obligation
and a reliable estimate can be made of the amount of
theoblithe obligation.
(eae) Crtcl cco) Critical accountn udements unting judgements
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 signiiignificant eect ocant effect on the amounts recognised in the
Financial Statements.
CrrCarrn vlue of ntnble explortonying value of intangible exploration nd and
evluevaluaton ssets (notetion assets (note 9)
The amounts for intangible exploration and evaluation
assets represent active exploration projects. These
amounts will be written oto tten off to the income statement
as exploration costs unless commercial reserves are
established or the determination process is not completed
and there are no indications of impairment in accordance
with the Group’s accounting policy. The process of
determining whether there is an indicator for impairment
or calculating the impairment requires critical judgement.
The key areas in which management has applied
judgement and estimation are as follows: the Group’s
intention to proceed with a future work programme for a
prospect or licence; the likelihood of licence renewal or
extension; the assessment of whether sur sufficient data exist
to indicate that, although a development in the speciic ific
area is likely to proceed, the carrying amount of the
exploration and evaluation asset is unlikely to be recovered
in full from successful development or by sale; and the
success of a well result or geological or geophysical
survey. Details on impact of these key estimates using
sensitivities applied to impairment models can be found
in note 8.
The most material area where judgement was applied
during 2023 was in the assessment of the value in use
(VIU) of the Kenyan CGU and assessing the likelihood of
recovery of the net book value of the asset. Triggers for
an impairment assessment were identiientified following the
withdrawal of the JV partners and an increase in Group’s
long-term oil price assumption, resulting in an increase in
(e) Crtcl ccountn udements
contnued
CrrCarrn vlue of ntnble explortonying value of intangible exploration nd and
evluevaluaton ssets (notetion assets (note 9)
the underlying value of the project. Due to the stage of this
project being pre-inal investme-final investment decision (FID) and only
having 2C resources booked, the VIU assessment required
estimation and judgement in a number of dierent aspefferent aspects
including oil prices dierentials, uncs differentials, uncontracted cost proiles rofiles
and certain itain fiscal terms. Furthermore, the Group has
identiidentified the following estimation uncertainties, which
require judgement, in respect to the Group’s ability to
realise the estimated VIU; receiving an acceptable oer ffer
from a strategic partner, obtaining ibtaining financing for the
project and government deliverables in form of provision
of required infrastructure and ind fiscal terms. These items
require satisfactory resolution before the Group can
take FID. Due to the binary nature of these uncertainties
the Group was unable to either adjust the cash ash flows
or discount rate appropriately. It has therefore used its
judgement and assessed the probability of achieving FID
and therefore the recognition of commercial reserves.
This probability was applied to the VIU to determine a risk
adjusted VIU and compared against the net book value
of the asset. Basedon this an imd on this an impairment charge of $17.9
million was booked as at 31 December 2023. Should
the uncertainties around the project beresolved the resolved there
will be a reversal of previously recognised impairment.
However, if the uncertainties are not resolved there will
beanabe an additional impairment of $242.2 million.
(faf) e) Key sources of estmton uncertimation uncertnttainty
The key assumptions concerning the future, and other key
sources of estimation uncertainty at the balance sheet
date, that have a signiicignificant risk of causing a material
adjustment to the carrying amounts of assets and liabilities
within the next within the next financial year, are discussed below.
CrrCarrn vlue of properying value of propertty, plnt nd equpment , plant and equipment
(note 9)
Management performs impairment reviews on the Group’s
property, plant and equipment assets at least annually with
reference to indicators in IAS 36 Impairment of Assets.
Where indicators of impairments or impairment reversals
are present and an impairment orimpnt or impairment reversal
test is required, the calculation of the recoverable amount
requires estimation of future cash lows within ch flows within complex
impairment models.
Key assumptions and estimates in the impairment models
relate to: commodity prices assumptions, pre-tax discount
rates, commercial reserves and the related cost proileost profiles.
Proven and probable reserves are estimates of the amount
of oil and gas that can be economically extracted from
the Group’s oil and gas assets. The Group estimates its
reserves using standard recognised evaluation techniques.
TheeThe estimate is reviewed at least annually by management
and by independent consultants. Proven and probable
Tullow Oil plc Annual Report and Accounts 2023 – 143
Financial statements Supplementary informationStrategic report Corporate governance
(f) e sources of estmton
uncertnt contnued
Crrn vlue of propert, plnt nd equpment
(note 9) contnued
reserves are determined using estimates of oil and gas in
place, recovery factors and future commodity prices, the
latter having an impact on the total amount of remaining
recoverable reserves and the proportion of the gross
reserves which are attributable to host governments
under the terms of the Production Sharing Contracts.
Future development costs are estimated taking into
account the level of development required to produce the
reserves by reference to operators, where applicable, and
internalenernal engineers.
Net entitlement reserves estimates are subsequently
calculated using the current oil price and cost recovery
assumptions, in line with the relevant agreements.
Changes in reserves as a result of factors such as
production cost, recovery rates, grade of reserves or oil
and gas prices could impact the depletion rates, carrying
value of assets (refer to the Commercial Reserves and
Contingent Resources Summary on page 191).
The estimation applied by management to the exploration
risk premium adjustment to its impairment discount
rates, estimated future commodity prices and forecast
cash lows on thh flows on the TEN asset would have the most
material impact on the 2023 Financial Statements should
management have concluded dier differently.
Details on the impact of these key estimates and
judgements using sensitivity applied to impairment
models can be found in note 9.
LeLease ccouse accountnntin (note 18)g (note 18)
Discount rate
The Group has assessed the appropriate incremental
borrowing rate applicable for each contract. Management
has applied the practical expedient which allows for the
adoption of a portfolio approach, where a single discount
rate for a portfolio of leases with similar characteristics
can be applied. As the Group has external borrowings with
a consortium of lenders, these are considered thebered the best
reference for the incremental borrowing rate for the Group
at the lease commencement date if the interest rate
implicit in the lease is not readily determinable. For the
material remeasurements during the year, predominantly
on the TEN FPSO lease discussed in note 18 the Group has
assessed the incremental borrowing rate to be 16.88%.
Determination of the lease term
Lease terms are negotiated on an individual basis and
contain a wide range of dierent terms and cde range of different terms and conditions.
Extension and termination options are included in a
number of property and equipment leases across the
Group. These are used to maximise operational lerational flexibility
in terms of managing the assets used in the Group’s
operations. For leases relating to Joint Venture operations
where there is an option to extend, the Group will only
(f) e sources of estmton
uncertnt contnued
Lese ccountn (note 18) contnued
Determination of the lease term contnued
proceed after it has received Joint Venture approval to
extend. At the inception of new leases in relation to joint
arrangements they do not include any period covered
by an extension option in the lease term because they
cannot be reasonably certain that approval from the other
venturers can be obtained. The majority of extension and
termination options held are exercisable only by the Group
and not by the respective lessor.
In respect of the TEN FPSO lease, the lease term was
updated to relect the mupdated to reflect the management’s best estimate view
that the FPSO will continue to be leased until the cessation
of production in 2032 and assumes an exercise of the
extension option following a decision not to exercise the
purchase option.
Uncertn tUncertain tax tretmentsx treatments
The Group is subject to various material claims which
arise in the ordinary course of its business in various
jurisdictions, including cost recovery claims, claims
from regulatory bodies and both corporate income tax
and indirect tax claims. The Group is in formal dispute
proceedings regarding a number of these tax claims. The
resolution of tax positions, through negotiation with the
relevant tax authorities or litigation, can take several years
to complete. In assessing whether these claims should
be provided for in the Financial Statements, management
has considered them in the context of the applicable
laws and relevant contracts for the countries concerned.
Management has applied judgement in assessing the likely
outcome of the claims and has estimated the instimated the financial
impact based on external tax and legal advice and prior
experience of such claims.
Provisions of $85.0 million (2022: $106.4 million) are included
in income tax payable ($78.3 million (2022:$70.6 million2: $70.6 million)),
deferred tax liability ($nil (2022: $nil)), and provisions ($6.7
million (2022: $35.8 million)). Where these matters relate to
expenditure which is capitalised within Intangible Exploration
and Evaluation Assets and Property, Plant and Equipment, any
dierence bdifference between the amounts accrued and the amounts
settled is capitalised within the relevant asset balance,
subject to applicable impairment indicators. Where these
matters relate to producing activities or historical issues, any
dierencedifferences between the accrued and settled amounts are
taken to theGroup ince Group income statement.
Due to the uncertainty of such tax items, it is possible that on
conclusion of an open tax matter at a future datetx matter at a future date the outcome
may dier signimay differ significantly from management’s estimate. If the
Group was unsuccessful indefendinsful in defending itself from all of these
claims, the result wouldbs, the result would be additional liabilities of $1,030.3
million (2022:$1,024.0 million2: $1,024.0 million) which includes $6.9 million
ofinterof interest and penalties (2022: $32.4 million).
144 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Accountn polces contnued
Year ended 31 December 2023
(f) e sources of estmton
uncertnt contnued
Uncertn tx tretments contnued
The provisions and contingent liabilities relating to these
disputes have decreased following the conclusion of tax
authority challenges and matters lapsing under the statute
of limitations, but have increased, following new claims
being initiated and extrapolation of exposures through
to 31 December 2023, giving rise to an overall decrease
in provision of $21.4 million and increase in contingent
liability of $6.2 million.
Ghn tGhana tx ssessax assessments
In October 2021, Tullow Ghana Limited (TGL) iled a a Limited (TGL) filed a
Request for Arbitration with the International Chamber
of Commerce (ICC) disputing the $320.3 million branch
proits remittanprofits remittance tax (BPRT) assessment issued as part of
the direct tax audit for the inanct for the financial years 2014 to 2016. The
Ghana Revenue Authority (GRA) is seeking to apply BPRT
under a law which the Group considers is not applicable to
TGL, since it falls outside the tax regime provided for in the
Petroleum Agreements and relevant double tax treaties.
The arbitration hearing took place in October 2023 and a
decision is expected in the current inanccted in the current financial year. TGL is
not required to pay any amounts of BPRT until the dispute
is formally resolved.
In December 2022, TGL received a $190.5 million corporate
income tax assessment and payment demand from the
GRA relating to the disallowance of loan interest for the
inanfinancial years 2010 to 2020. The Group has previously
disclosed assessments by the GRA relating to the same
issue; this revised assessment supersedes all previous
claims. The Group considers the assessment to breach
TGL’s rights under its Petroleum Agreements. In February
2023, TGL ile2023, TGL filed a Request for Arbitration with the ICC,
disputing the assessment with the suspension of TGL’s
obligation to pay any amount in relation to the assessment
until the dispute is formally resolved. The arbitration hearing
is scheduled to commence on 30 June 2025.
In December 2022, TGL received a $196.5 million
corporate income tax assessment and payment demand
from the GRA relating to proceeds received by Tullow
during the during the financial years 2016 to 2019 under Tullow’s
corporate Business Interruption Insurance policy. The
Group considers the assessment to breach TGL’s rights
under its Petroleum Agreements. In February 2023, TGL
ilefiled a Request for Arbitration to the ICC, disputing the
assessment with the suspension of TGL’s obligation to pay
any amount in relation to the assessment until the dispute
is formally resolved. The arbitration hearing is scheduled to
commence on 17 November 2025. The Group continues
to engage with the Government of Ghana with the aim of
resolving the BPRT, loan interest and insurance disputes on
a mutually acceptable basis.
(f) e sources of estmton
uncertnt contnued
Bnldesh lttonBangladesh litigation
The National Board of Revenue (NBR) is seeking to disallow
$118.6 million of tax relief in respect of development
costs incurred by Tullow Bangladesh Limited (TBL). The
NBR subsequently issued a payment demand to TBL in
February 2020 for Taka 3,094.3 million (c.$29.3 million)
requesting payment by 15 March 2020. However, under
the Production Sharing Contract (PSC), the Government
is required to indemnify TBL against all taxes levied by
any public authority, and the share of production paid to
Petrobangla (PB), Bangladesh’s national oil company, is
deemed to include all taxes due which PB is then obliged
to pay to the NBR. TBL sent the payment demand to PB
and the Government requesting the payment or discharge
of the payment demand under their respective PSC
indemnities. On 14 June 2021, TBL issued a formal notice
of dispute under the PSC to the Government and PB. A
further request for payment was received from NBR on
28 October 2021 demanding settlement by 15 November
2021. Arbitration proceedings were initiated under the
PSC on 29 December 2021. A procedural hearing was held
on 28 June 2022 which set the timetable for the process
going forward. The irst subward. The first submissions have been made in
October 2022 with counter submissions received on 17
January 2023. The second submission was made in June
2023 with the 2023 with the first Tribunal hearing scheduled for 20-24
May 2024. A decision is expected in H1 2025.
Other temsOther items
Other items totalling $294.0 million (2022: $280.0 million)
comprise exposures in respect of claims for corporation
tax in respect of disallowed expenditure or withholding
taxes that are either currently under discussion with the
tax authorities or which arise in respect of known issues for
periods not yet under audit.
Tmn of csh flowsTiming of cash flows
While it is not possible to estimate the timing and amount
of tax cash lows in relation to posh flows in relation to possible outcomes with
certainty, as they are subject to outcome of court/
arbitration proceedings and any potential appeals,
management anticipates that there will not be material
cash taxes paid in excess of the amounts provided for
uncertain tax treatments.
Tullow Oil plc Annual Report and Accounts 2023 – 145
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements
Year ended 31 December 2023
Note 1 Sementl reporNote 1. Segmental reportnting
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)
Operating proitg profit
295.9
Loss on hedging instruments
(0.4)
Gain on bond buyback
86.0
Finance income
44.0
Finance costs
(329.6)
ProProfit before tax
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 written oten off
(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 aten off and impairment of property, plant and equipment. See
reconciliation below.
2. Unallocated expenditure includes amounts of a corporate nature and not speciifically attributable to a geographic area.
3. Total liabilities – Corporate comprise the Group’s external debt and other non-attributable liabilities.
ReconcltReconciliatoion of sement resultn of segment result
2023 2022
$m $m
Segment result
329.8
589.2
Add back:
Exploration costs written oten off
27.0
105.2
Impairment of property, plant and equipment
408.1
391.2
Gross proits profit
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 Fnncl Sttements contnued
Year ended 31 December 2023
Note 1 Sementl reportn contnued
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)
Operating proitg profit
733.9
Gain on hedging instruments
0.8
Finance income
42.9
Finance costs
(335.5)
ProProfit before tax
442.1
Income tax expense
(393.0)
ProProfit after tax
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 written oten off
(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 aten off and impairment of property, plant and equipment. See
reconciliation below.
2. Unallocated expenditure includes amounts of a corporate nature and not speciifically 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 Sementl reportn contnued
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 dIvoire
5.8
2.4
Total Exploration
42.2
36.0
Gabon
419.5
477.0
82.8
132.6
Côte dIvoire
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
1. Non-current assets exclude derivative inve financial instruments and deferred tax assets.
Note 2 TNote 2. Totl rotal revenue
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 cash sh flow hedges
(139.1)
(319.4)
Total revenue
1,634.1
1,783.1
Finance income has been presented as part of net int of net financing costs (refer to note 5).
Note 3 StNote 3. Staff costs
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 Fnncl Sttements contnued
Year ended 31 December 2023
Note 3 Stff costs contnued
Sta coStaff costs in respect of those employees were as follows:
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
Total staotal staff costs
84.9
78.7
A proportion of the Group’s sta cs staff costs shown above is recharged to the Group’s Joint Venture Partners, a proportion is
allocated tooperating costs aated 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 classiisified as an administrative overhead cost
in the income statement. Thennt. The netsta coet staff costs recognised in the income statement were $16.5 million (2022: $10.5 million).
The Group operates deinedtes defined contribution pension schemes for sta and Exff 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: $5.3millio.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.
Note 4 Other costsNote 4. Other costs
2023 2022
Notes $m $m
Operating proit ig profit is stated after charging/(deducting):
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 other ixer fixed assets
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
Corporate inanrate finance services
1.0
Total non-audit services
0.5
1.5
Total
3.0
4.2
1
1
2
1. Depreciation expense on leased assets of $81.4 million (2022: $60.9 million) as per note 9 includes a charge of $2.2 million ($3.9 million) on leased
administrative assets, which is presented within administrative expenses in the income statement. The remaining balance of $79.2 million (2022: $57.0
million) relates to other leased assets and is included within cost of sales.
The reduction in depreciation of other ixer fixed assets expense is caused by corporate assets in the UK and Ghana reaching the end of their useful life
during 2022 and 2023.
2. This includes credit to the movements in other provisions of $22.0 million (2022: $4.1 million charge) as well as restructuring and redundancy costs of
$nil (2022: $0.1 million).
Tullow Oil plc Annual Report and Accounts 2023 – 149
Financial statements Supplementary informationStrategic report Corporate governance
Note 4 Other costs contnued
The increase in other administrative costs is mainly due to one-o coff corporate project expenditure which was partially
oset by lower inoffset by lower insurance premiums in the current year.
Fees payable to Ernst & Young LLP and its associates for non-audit services to the Company are not required to be
disclosed because the consolidated Financial Statements are required to disclose such fees on a consolidated basis.
Non-audit services were 20% of audit services during the year.
Details of the Company’s policy on the use of the auditor for non-audit services, the reasons why the auditor was used
rather than another supplier and how the auditor’s independence and objectivity are safeguarded are set out in the Audit
Committee Report on pages 82 to 86. No services were provided pursuant to contingent fee arrangements.
Note 5 Net fnncn costsNote 5. Net financing costs
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
Total ial finance costs
329.6
335.5
Interest income on amounts due from Joint Venture Partners for leases
18
(30.1)
(29.6)
Other er finance income
(13.9)
(13.3)
Total inance incomeotal finance income
(44.0)
(42.9)
Net Net financing costs
285.6
292.6
Note 6 TNote 6. Txton on proft on contnaxation on profit on continun ctvteuing activities
2023 2022
Notes $m $m
Current tax on prorofits for the year
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 temporary diy differences
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 Fnncl Sttements contnued
Year ended 31 December 2023
Note 6 Txton on proft on contnun ctvtes contnued
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 proits, beK profits, being 23.5% (2022: 19%), which is the weighted average rate calculated for FY 2023
taking into account the UK CT rate change eete change effective from 1 April 2023. The dierence betfference between the total income tax
expense shown above and the amount calculated by applying the standard rate of UK corporation tax applicable to UK
proits of 23.profits of 23.5% is as follows:
2023 2022
$m $m
ProProfit from continuing activities before tax
95.9
442.1
Tax on proit from crofit from continuing activities at the standard UK corporation tax rate of 23.5% (2022: 19%)
22.5
84.0
Effects of:
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 wten 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 proit before taxation will continue to arise in juris profit before taxation will continue to arise in jurisdictions where the eective rre the effective rate of taxation diers from ate of taxation differs from
that in the UK, such as Ghana (35%) and Gabon convention in convention fields (50%), Gabon PSC ieC fields (35%) and CDI PSC (25%).
Furthermore, there is no tax beneit aefit 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 proits arisre-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 oset e for offset
indeinitely and $finitely and $1,085.4 million in the next 5-7 years against future taxable proits in the coture 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
not sunot sufficiently probable that there will be future taxable proits agre will be future taxable profits against which these losses can be utilised.
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 suered thes 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 indeind indefinitely.
There are no temporary dierencey differences relating to unremitted earnings of overseas subsidiaries as the Group is able to
control the timing of the reversal of these temporary dierency differences and it is probable that they will not reverse in the
foreseeable future.
Tax reltn to components of other comprehensve ncomex relating to components of other comprehensive income
During 2023 nil tax expense (2022: nil tax expense) has been recognised through other comprehensive income.
Globl mnmum top-up txGlobal minimum top-up tax
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 eective frffective 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)/ernns per ordnrearnings per ordinar shrey share
Basic (loss)/earnings per ordinary share amounts are calculated by dividing net (loss)/ proit for the year attributabrofit for the year attributable to
ordinary equity holders ofthe Parent by the weighted avrs 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 ofthe Parent by the weighted avrs 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)/ proit for the year
Net (loss)/proprofit attributable to equity shareholders
(109.6)
49.1
Eect of dilEffect of dilutive potential ordinary shares
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
Note 8 Intnble eNote 8. Intangible explorxploraton nd evltion and evalutuation ssetson assets
2023 2022
$m $m
At 1 January
288.6
354.6
Additions
25.4
39.2
Amounts written off
(27.0)
(105.2)
At 31 December
287.0
288.6
The below table provides a summary of the exploration costs written o on a preten off on a pre-tax basis by country.
2023
2023 Remaining
Rationale for write-o/write-off/ recoverable
2023 (back) amount
Country
CGU
write-off $m $m
Guyana
Kanuku
a
1.7
Guyana
Orinduik
a
0.7
Côte dIvoire
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
Total write-ootal write-off
27.0
a. Current-year expenditure on assets previously written off.
b. Following VIU assessment subsequent to withdrawal of JV Partners.
c. Revision of short, medium and long-term oil price assumptions.
d. New Ventures expenditure is written o as iff as incurred.
e. Release of indirect tax provision following settlement.
f. Unsuccessful well costs written o.ff.
152 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 8 Intnble explorton nd evluton ssets contnued
enKenya
Discussions with the Government of Kenya (GoK) on securing government deliverables and approval of the Field
Development Plan (FDP) have been ongoing since its submission on 10 December 2021. An updated FDP was submitted
on 3 March 2023 and is being reviewed by the GoK before ratiicatiotification by the Kenyan Parliament. Energy and Petroleum
Regulatory Authority (EPRA), the regulator, has engaged third party consultants to review the revised FDP and the current
review period ends on 30 June 2024. The Group expects a production licence to be granted once government due
process has been completed.
On 22 May 2023, Africa Oil Corporation (AOC) and Total Energies (TE) gave notice of their respective withdrawal from the
Blocks 10BA, 10BB and 13T Production Sharing Contracts (PSCs) and the Joint Operating Agreements (JOAs), eective ), effective
30 June 2023, quoting diering internal stratffering internal strategic objectives as reasons. The withdrawal is ultimately subject to the GoK’s
consent, at which stage the transaction will be considered completed and Tullow will have full rights and liabilities under
the JOA. Pending GoK approval, per the terms of the agreement, the participating interest (PI) vests in trust for the sole
and exclusive benenefit of Tullow, who is the only remaining Joint Venture Partner.
In management’s view, in light of public statements and announcements made by AOC and TE to this eect, and in de by AOC and TE to this effect, and in
accordance with the terms of the Joint Operating Agreement, it is considered that the ownership of the 50% held by
AOC and TE was passed on 30 June 2023, resulting in Tullow holding 100%. From that date, Tullow has the right to benee right to benefit
from the PI and is liable for all costs incurred going forward (except those for which the withdrawing parties remain
liable for). As the sole party, Tullow can control and direct the use of the asset from 30 June 2023. The position remained
unchanged as at 31 December 2023. Tullow accounted for this as an asset acquisition at nil cost.
The withdrawal of the partners and an upward revision to the Group’s oil prices as detailed in note 9 are considered to be
impairment assessment triggers for the asset as at 31 December 2023, and in line with its accounting policy the Group
has performed a VIU assessment. The cash lsh flows were discounted using a pre-tax nominal discount rate of 20% (2022:
20%). This resulted in an NPV signiignificantly in excess of the book value of $260.1 million. However, the Group has identiientified
the following uncertainties in respect of the Group’s ability to realise the estimated VIU; receiving and subsequently
inalifinalising an acceptable oer from a strate offer from a strategic partner and securing governmental approvals relating thereto, obtaining
inanfinancing for the project and government deliverables in form of provision of required infrastructure and isces in form of provision of required infrastructure and fiscal terms.
These items require satisfactory resolution before the Group can take a Final Investment Decision (FID). The Group
continues to progress with the farm-down process.
Due to the binary nature of these uncertainties the Group was unable to either adjust the cash lsh flows or discount
rate appropriately. It has therefore used its judgement and assessed a probability of achieving FID and therefore the
recognition of commercial reserves. This probability was applied to the VIU to determine a risk-adjusted VIU and
compared against the net book value of the asset. Certain risks have increased since 31 December 2022, predominantly
around farm-down and project inaroject financing. This has been partially oset by an intially offset by an increased equity interest in the project and
changes in oil price assumptions.
Based on this, the NPV has been revised to $242.2 million and an impairment of $17.9 million has been recognised as at
31D31 December 2023.
Should the uncertainties around the project be resolved, there will be a reversal of a previously recorded impairment.
However, if the uncertainties are not resolved there will be an additional impairment of $242.2 million. 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 speciiefied above would increase the impairment charge by $37.9 million, whilst increases
to oil prices speciicified above would result in a credit to the impairment charge of $37.7 million. A 1% change in the pre-
tax discount rate would result in an additional impairment charge of $33.9 million. 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 a peer group of
companies’ impairments.
For Net Zero Emissions sensitivities refer to page 45 of the TCFD.
GuGuyanna
On 10 August 2023, Tullow announced that it had agreed to sell its total interest in Tullow Guyana B.V., which includes
the Orinduik licence (60% operated equity) in Guyana, to Eco Guyana Oil and Gas (Barbados) Limited in exchange for an
upfront cash consideration of $0.7 million and contingent consideration linked to a series of potential future milestones.
The transaction completed on 16 November 2023 and resulted in $0.7 million of gain on disposal included in Other gains
the income statement.
Tullow Oil plc Annual Report and Accounts 2023 – 153
Financial statements Supplementary informationStrategic report Corporate governance
Note 8 Intnble explorton nd evluton ssets contnued
2022
Remaining
Rationale for 2022 recoverable
2022 write-off amount
Country
CGU
write-off $m $m
Guyana
Kanuku
a, b
75.3
Guyana
Orinduik
b
22.4
Côte dIvoire
Block 524
c
3.1
New Ventures
Various
d
3.0
Other
Various
1.4
Total write-ootal write-off
105.2
a. Unsuccessful well costs written o.ff.
b. Licence relinquishments, expiry, planned exit or reduced activity.
c. Current year expenditure on assets previously written o.n off.
d. New Ventures expenditure is written o as iff as incurred.
Note 9 Proper. Property, plnt nd equpment, plant and equipment
2023 2023 2023 2022 2022 2022
Oil Other Right Oil Other Right
and gas ifixed of use 2023 and gas ifixed 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 Fnncl Sttements contnued
Year ended 31 December 2023
Note 9 Propert, plnt nd equpment contnued
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lflated at 2%
2022
$84/bbl
$79/bbl
$70/bbl
$70/bbl
$70/bbl
$70/bbl inlnflated at 2%
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 oiffice space.
g. The remaining recoverable amount of the asset is its value in use.
Impairments identiientified in the TEN d in the TEN fields of $301.2 million were primarily due to lower 2P reserves partially ostially 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 iual field price dierential is aprice differential is applied. All impairment
assessments are prepared on a VIU basis using discounted future cash ounted future cash flows based on 2P reserves proiles. A redurofiles. 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 speciiefied 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 speciiefied 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, plnt nd equpment contnued
Impairments identiientified in the TEN d in the TEN fields of $380.6 million were primarily due to lower 2P reserves partially oset by oil tially offset by oil
priceprice assumptions.
Oil prices stated above are benchmark prices to which an individual iual field price dierential is aprice differential is applied. All impairment
assessments are prepared on a VIU basis using discounted future cash ounted future cash flows based on 2P reserves proiles. A redurofiles. 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 speciiefied 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 speciiefied 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.
Note 10 O. Other ssetsther assets
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
The increase in current receivables from JV Partners compared to December 2022 mainly relates to partner’s share of
increased accrual balances (note 15), net increase in GNPC (Ghana National Petroleum Corporation) receivable and other
working capital movements, partially oset by a lower btially offset by a lower balance of current receivables relating to leases (note 18).
Note 11 InNote 11. Inventoreventories
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.
Note 12 TNote 12. Trde recevrade receivblesables
Trade receivables comprise amounts due for the sale of oil and gas. They are generally due for settlement within 30–60
days and are therefore all classiieified as current. The Group holds the trade receivables with the objective of collecting the
contractual cash lsh flows and therefore measures them subsequently at amortised cost using the eective intffective interest method.
The balance of trade receivables as at 31 December 2023 of $43.5 million (2022: $26.8 million) mainly relates to gas sales
in Ghana.
156 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 13 Csh nd csh equvlentNote 13. Cash and cash equivalents
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.
Note 14 Assets nd lbltNote 14. Assets and liabilites clssfies classified s held for sleed as held for sale
On 28 April 2023, Tullow announced that through its wholly owned subsidiary, Tullow Oil Gabon S.A., it had signed an
Asset Swap Agreement (ASA) with Perenco Oil and Gas Gabon S.A. (Perenco). Under the ASA, Tullow has agreed to
assign and transfer certain of its existing participating interests in Limande, Turnix, Moba, Oba and 17.5% in Simba assets
to Perenco in return for the assignment and transfer by Perenco of 15% if its participating interests in Kowe (Tchatamba)
and 20% of its participating interests in DE8 licence to Tullow.
Due to the agreed neutrality of the transaction, no additional consideration is payable by either party in respect thereof.
The ASA includes provisions to ensure the neutrality of the transaction via cash adjustments for the period between
economic date and completion date.
On completion, all assets and associated liabilities relating to the existing participating interests held in Limande, Turnix,
M’Oba and Oba assets, together with 17.5% of Tullow’s interest in Simba, will be disposed. All assets impacted by the
transaction are included in the ‘Non-Operated’ Business Unit applied for segment performance reporting.
Management concluded that the asset met the IFRS 5 Held for Sale criteria on 19 July 2023, when the agreed form of the
amendment to the Tullow Protocol was submitted to the relevant Governmental Authority of the Gabonese Republic (the
Tullow Protocol is an investment convention that applies to certain Tullow licences). All other conditions precedent to the
completion of the transaction were considered reasonably certain to occur within 12 months of 19 July.
The transaction completed on 29 February 2024. Refer to note 26. Events since 31 December 2023.
The major classes of assets and liabilities comprising the assets classisified as held for sale as at 31 December 2023 were
as follows:
2023
$m
Assets
Property, plant and equipment
55.2
Other debtors
0.6
Assets classiified as held for sale
55.8
Liabilities
Other payables
(1.4)
Accruals
(2.0)
Decommissioning provision
(14.2)
Liabilities directly associated with assets classiiified as held for sale
(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
Note 15 TNote 15. Trde nd other prade and other pablesyables
Current lbltesCurrent liabilities
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
Accruals mainly relate to capital expenditure, interest expense on bonds and sta-related expens and staff-related expenses. The movement in the
balance is predominantly driven by an increased level of activity in Ghana during the year relating to Jubilee South East.
Trade and other payables are non-interest bearing except for leases (note 18). The change in trade payables and in other
payables represents timing dierencnts timing differences and levels of work activity.
Payables related to operated Joint Ventures (primarily in Ghana and Kenya) are recorded gross with the amount
representing the partners’ share recognised in amounts due from Joint Venture Partners (note 10).
The movement in current lease liabilities is mainly driven by the remeasurement of the TEN FPSO lease discussed in note 18.
Non-current lbltescurrent liabilities
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
1
1. Other non-current liabilities include balances related to JV Partners.
Note 16 BorrowNote 16. Borrowinsngs
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 within thin five 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 Group’s capital structure includes $1,485 million Senior Secured Notes (2026 Notes), $493 million Senior Notes (2025
Notes), $400 million Secured Notes Facility and a $500 million undrawn 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 Group made a mandatory prepayment of $100 million of the 2026 Notes.
158 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 16 Borrowns contnued
On 20 June 2023, the Group repurchased $167 million nominal value of 2025 Notes for $100 million cash consideration
through an Unmodidified Dutch Auction. A gain on early bond buyback 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 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 Group repurchased $115 million nominal value of 2026 Notes for $103 million cash
consideration through an Unmodidified Dutch Auction. A gain on early bond buyback of $11 million is recognised as other
income in the income statement.
On 20 December, the Group repurchased $141 million nominal value of 2025 Notes for $130 million cash consideration
through a Modiiefied 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 Group’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.
Cptl mnementCapital management
The Group deineroup defines capital as the total equity and net debt of the Group. Capital is managed in order to provide returns for
shareholders and beneits to stakeholdefits to stakeholders and to safeguard the Group’s ability to continue as a going concern. The Group
is not subject to any externally imposed capital requirements. To maintain or adjust the capital structure, management may
put in place new debt facilities, issue new shares for cash, repay debt, engage in active portfolio management, adjust the
dividend payment to shareholders, or undertake such other restructuring activities as appropriate. The Group monitors
capital on the basis of the gearing, being net debt divided by adjusted EBITDAX, and maintains a policy target of less than 1x.
SSRCF covenntsSSRCF covenants
The SSRCF does not have any inancial ms not have any financial maintenance covenants. Availability under the $500 million cash tranche of the
facility is determined on an annual basis with reference to the Net Present Value of the 2P reserves of the Group (2P NPV)
at the end of the preceding calendar year. SSRCF debt capacity is calculated as 2P NPV divided by 1.1x less senior secured
debt outstanding.
2025 Notes 2025 Notes and 2026 Notes covennnd 2026 Notes covenants
The 2025 Notes and the 2026 Notes are subject to customary high-yield covenants including limitations on debt
incurrence, asset sales and restricted payments such as prepayments of junior debt and dividends.
Key covenants in the current business cycle are considered to be those related to debt incurrence and restricted
payments. For deinitionfinitions of the capitalised terms used in the following paragraphs please refer to the oering o the offering
memorandum of the 2025 Notes and/or the 2026 Notes.
Tullow is permitted to incur additional debt if the ratio of Consolidated Cash Flow to Fixed Charges for the previous 12
months is at least 2.25 times on a pro forma basis.
Tullow is permitted to incur secured debt if the 2P Reserves Coverage Ratio is at least 2.0 times on a pro forma basis.
Tullow is permitted to incur debt to reefinance the 2025 Notes on a like-for-like basis, i.e. subordinated to the 2026 Notes.
Tullow is permitted to make payments towards the 2025 Notes amounting to the greater of $100 million per year and
50% of the Consolidated Net Income of the Group for the period from 1 January 2021 to the end of the most recently
completed ileted fiscal half-year for which internal inanch internal financial statements are available if, after giving pro forma eect to the rma effect to the
payment(s), the 2P Reserves Coverage Ratio is equal to or greater than 1.5 times.
Tullow Oil plc Annual Report and Accounts 2023 – 159
Financial statements Supplementary informationStrategic report Corporate governance
Note 16 Borrowns contnued
2025 Notes nd 2026 Notes covennts contnued
Tullow is permitted to make payments towards the 2025 Notes amounting to the greater of $100 million per year, 50% of
the Consolidated Net Income of the Group for the period from 1 January 2021 to the end of the most recently completed
iscfiscal half-year for which internal inar for which internal financial statements are available and 100% of Consolidated Cash Flow per year if, after
giving pro forma eect to the payment(sgiving pro forma effect to the payment(s), the 2P Reserves Coverage Ratio is equal to or greater than 2.0 times and the
Consolidated Leverage Ratio is less than 1.5 times.
The Company or its ailiates mayany or its affiliates 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.
Secured Notes Fclt covSecured Notes Facility covenntsenants
The Secured Notes Facility does not have any inancias not have any financial maintenance covenants. The facility is subject to substantially the
same covenants as the 2026 Notes, with additional restrictions related to the use of proceeds from any incurrence of new
indebtedness ranking senior to the facility or sharing the same collateral.
Tullow is permitted to reinafinance the SSRCF and the 2026 Notes on a like-for-like basis.
Tullow is permitted to reinafinance the 2025 Notes with new indebtedness which is unsecured and ranks junior to the
Secured Notes Facility.
Note 17 Fnncl nstrume. Financial instruments
Fnncl rs mnement obectvesFinancial risk management objectives
The Group’s Corporate Treasury function provides services to the business, coordinates access to international inass to international financial
markets, monitors and manages the s the financial risks relating to the operations of the Group through internal management
reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency
risk, interest rate risk and price risk), credit risk and liquidity risk.
The Group seeks to minimise the eects of thee effects of these risks by using derivative inancg derivative financial instruments to hedge these risk
exposures, if deemed appropriate. The use of inane of financial derivatives is governed by the Group’s policies approved by the
Board of Directors. Compliance with policies and exposure limits are monitored and reviewed internally on a regular basis.
The Group does not enter into or trade inde financial instruments, including derivatives, for speculative purposes.
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 inancial instruments financial instruments
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 Fnncl Sttements contnued
Year ended 31 December 2023
Note 17 Fnncl nstruments contnued
Fr vlueFair values of fnncl ssets nd lbltess of financial assets and liabilities
With the exception of the 2026 Notes and the 2025 Notes, the Group considers the carrying value of all its inag value of all its financial assets
and liabilities to be materially the same as their fair value. The fair value of the 2026 Notes and 2025 Notes as determined
using market value at 31 December 2023, was $1,327.3 million (2022: $1,364.8 million) and $458.3 million (2022: $490.0
million) respectively. These are compared to their carrying value of $1,470.9 million (2022: $1,680.0 million) and $489.0
million (2022: $792.9 million). The 2026 Notes and the 2025 Notes are categorised as level 1 in the fair value hierarchy.
No material inNo material financial assets are impaired at the balance sheet date. Allinancet date. All financial assets and liabilities with the exception of
derivatives are measured at amortised cost.
Fr vFair vlues of dervtvalues of derivative nstrumentse instruments
All derivatives are recognised at fair value on the balance sheet with valuation changes recognised immediately in the
income statement, unless the derivatives have been designated as a cash lsh flow hedge. 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 Group’s derivative carrying and fair values were as follows:
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
Cash lh flow hedges
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)
Derivatives’ maturity and the timing of their recycling into income or expense coincide.
The following provides an analysis of the Group’s s financial 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 the Group’s derivatives are Level 2 (2022: Level 2). There were no transfers between fair value levels during the year.
For inanciFor financial instruments which are recognised on a recurring basis, the Group determines whether transfers have
occurred between levels by re-assessing categorisation (based on the lowest-level input which is signiiignificant to the fair
value measurement as a whole) atthe ent the end of each reporting period.
Tullow Oil plc Annual Report and Accounts 2023 – 161
Financial statements Supplementary informationStrategic report Corporate governance
Note 17 Fnncl nstruments contnued
Offsettn of fnncl nstrumentsting of financial instruments
Financial assets and liabilities are oset ans are offset and the net amount is reported in the Group balance sheet when there is a legally
enforceable right to oset the recenforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset
and settle the liability simultaneously. No material enforceable master netting agreements were identiients were identified.
The Group has entered into ISDA Master Agreements with derivative counterparties. The following table shows the
amounts recognised for ined for financial assets and liabilities which are subject to osettinct to offsetting arrangements on a gross basis, and
the amounts oset inthunts offset in the Group balance sheet.
Gross Net
amounts amounts
osetoffset 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
osetoffset 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)
Commodt prce rCommodity price rissk
The Group uses a number of derivatives to mitigate the commodity price risk associated with its underlying oil revenue.
Such commodity derivatives tend to be priced using benchmarks, such as Dated Brent, which correlate as far as possible
to the underlying oil revenue. There is an economic relationship between the hedged items and the hedging instruments
due to a common underlying, i.e. Dated Brent, between them. Forecast oil sales, which are based on Dated Brent, are
hedged with options which have Dated Brent as reference price. An increase in Dated Brent will cause the value of the
hedged item and hedging instrument to move in opposite directions. The Group has established a hedge ratio of 1:1 for
the hedging relationships as the underlying risk of the commodity derivatives is identical to the hedged risk components.
To test the hedge eectivenee effectiveness, the Group uses the hypothetical derivative method and compares the changes in the fair
value of the hedging instruments against the changes in fair value of the hedged items attributable to the hedged risks.
The Group hedges its estimated oil revenues on a portfolio basis, aggregating its oil revenues from substantially all of its
African oil interests.
As at 31 December 2023 and 31 December 2022, all of the Group’s oil derivatives have been designated as cash ash flow
hedges. TheGs. The Group’s oil hedges have been assessed to be highly eective.hly effective.
Financial risk management is adopted centrally for the Group. The Group adopts a risk component hedging strategy.
Thisresults from desThis results from designating the variability in all the cash lows atsh flows attributable to the change in the benchmark price per
theoil sathe oil sales contracts where the critical terms of the hedged item and hedging instrument match.
At 31 December 2023, Tullow’s hedge portfolio provides downside protection for c.60% of forecast production entitlements
in the irst hain the first half of 2024 with c.$57/bbl weighted average lobl weighted average floors; 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 lo0/bbl weighted average floors; for the same period, c.20%
offorof 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.
162 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 17 Fnncl nstruments contnued
Commodt prce rs contnued
The following table demonstrates the timing, volumes and prices of the Group’s commodity hedge portfolio at year end:
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
The following table demonstrates the sensitivity of the Group’s derivative e financial instruments to reasonably possible
movements in Dated Brent oil prices:
Eect on eEffect on equity
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
The following assumptions have been used in calculating the sensitivity in movement of the oil price: the pricing
adjustments relate only to the point forward mark-to-market (MTM) valuations, the price sensitivities assume there is no
ineectiveneineffectiveness related to the oil hedges and the sensitivities have been run only on the intrinsic element of the hedge as
management considers this to be the material component of oil hedge valuations.
Hede reserve summrHedge reserve summary
The hedge reserve represents the portion of deferred gains and losses on hedging instruments deemed to be eective d to be effective
cash low heh flow hedges. The movement in the reserve for the period is recognised in other comprehensive income.
The following table summarises the cash ash flow hedge reserve by intrinsic and time value, net of tax eects:et of tax effects:
2023 2022
Cash sh flow hedge reserve $m $m
Oil derivatives – intrinsic
(18.9)
(150.3)
Oil derivatives – time value
(16.3)
(94.4)
The deferred gains and losses in the hedge reserve are subsequently transferred to the income statement at maturity
ofderivative contracts. The tabof derivative contracts. The tables below show the impact on the hedge reserve and on sales revenue during the year:
2023 2022
Deferred amounts in the hedge reserve – intrinsic $m $m
At 1 January
(150.3)
(39.3)
Reclassiicfication adjustments for items included in the income statement on realisation:
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 Fnncl nstruments contnued
Hede reserve summr contnued
2023 2022
Deferred amounts in the hedge reserve – time value $m $m
At 1 January
(94.4)
(146.9)
Reclassiicfication adjustments for items included in the income statement on realisation:
Oil derivatives – transferred to sales revenue
27.8
30.8
Revaluation gains arising in the year
50.3
21.7
78.1
52.5
At 31 December
(16.3)
(94.4)
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
Interest rte rst rate rsisk
Interest rate risk is the risk that the fair value of future cash e risk that the fair value of future cash flows of a inalows of a financial instrument will luctuate becnt will fluctuate because of
changes in market interest rates. During the inring the financial year 2022, the Group was not exposed to interest rate risk as it only
borrowed funds at ixed interest ras at fixed interest rates. Following a drawdown of the Secured Notes Facility, amounting to $130 million
(note 16), the Group’s borrowings are both ixed and variaborrowings are both fixed and variable interest bearing as at 31 December 2023. The Super Senior
Revolving Credit Facility is based on d on floating interest rates and remains undrawn as at year end.
Fixed rate debt comprises 2025 Notes and 2026 Notes.
The interest rate proile of the profile of the Group’s s financial assets and liabilities, excluding trade and other receivables and trade and
other payables, at 31 December 2023 and 2022, was as follows:
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)
Most of the Group’s Cash and cash equivalents consisted of balances earning variable interest rates as at 31 December
2023 and 31 December 2022.
The following table demonstrates the sensitivity of the Group’s ins financial instruments to reasonably possible movements
in interest rates:
Eect on Effect on finance costs
EeEffect on equity
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 Fnncl Sttements contnued
Year ended 31 December 2023
Note 17 Fnncl nstruments contnued
Credt rsCredit risk
The Group has a credit policy that governs the management of credit risk, including the establishment of counterparty
credit limits and specicific transaction approvals. The Group limits its counterparty credit risk on cash and cash equivalent
balances by dealing only with inanly with financial institutions with credit ratings of at least A or equivalent.
The primary credit exposures for the Group are its receivables generated by the sale of crude oil and natural gas
and amounts due from JV Partners (including in relation to their share of the TEN FPSO lease). These exposures are
managed at the corporate level. During the ing the financial year 2023, the Group’s crude sales were predominantly made to
international oil market participants including the oil majors and trading houses. In November 2023, the Group entered
into oil marketing and og and offtake contracts with Glencore for the Group’s crude oil entitlements from the Jubilee and Ten
ielfields in Ghana and the Rabi Light entitlements in Gabon. JV Partners are predominantly international major oil and gas
market participants. Counterparty evaluations are conducted utilising international credit rating agency and inand financial
assessments. Where considered appropriate, security in the form of trade inance insade finance instruments from inancial ins financial institutions
with an appropriate credit rating, such as letters of credit, guarantees and credit insurance, are obtained to mitigate
the risks.
The Group generally enters into derivative agreements with banks which are lenders under the SSRCF. The Group does
not have any signiicant cnot have any significant credit risk exposure to any single counterparty or any group of counterparties. The maximum
inanfinancial exposure due to credit risk on the Group’s ins financial assets, representing the sum of cash and cash equivalents,
investments, derivative assets, trade receivables, and receivables from Joint Venture Partners, as at 31 December 2023
was $1,373.1 million (2022: $1,438.7 million).
Foren currenc rsForeign currency risk
The Group conducts and manages its business predominantly in US dollars, the functional currency of the industry in
which it operates. The Group also purchases the functional currencies of the countries in which it operates routinely
on the spot market. From time to time the Group undertakes transactions denominated in other currencies arising
from certain operating and capital expenditure incurred in currencies other than US dollars; these exposures are often
managed by executing foreign currency inanged by executing foreign currency financial derivatives. There were no foreign currency inanco foreign currency financial derivatives in
place as at 31 December 2023 (2022: nil). Cash balances are held in other currencies to meet immediate operating and
administrative expenses or to comply with local currency regulations.
As at 31 December 2023, the only material monetary assets or liabilities of the Group that were not denominated in the
functional currency of the respective subsidiaries involved were $6.7 million in non-US dollar-denominated cash and cash
equivalents (2022: $58.1 million).
The following table demonstrates the sensitivity of the Group’s ins financial instruments to reasonably possible movements
in US dollar exchange rates:
Eect on pEffect on proit brofit before tax
EeEffect on equity
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)
LqudtLiquidit rsy risk
The Group manages its liquidity risk using both short-term and long-term cash low ph flow projections, supplemented by debt
inanfinancing plans and active portfolio management across the Group. Ultimate responsibility for liquidity risk management
rests with the Board of Directors, which has established an appropriate liquidity risk management framework covering the
Group’s short, medium and long-term funding and liquidity management requirements.
The Group closely monitors and manages its liquidity risk. Cash forecasts are regularly produced and sensitivities run
for dierent scenafor different scenarios including, but not limited to, changes in commodity prices, dierent productios, different production rates from the
Group’s producing assets and delays to development projects. The Group had $1.0 billion (2022: $1.1 billion) of total
facility headroom and free cash as at 31 December 2023.
The following tables detail the Group’s remaining contractual maturities for its non-derivative inancial liaerivative financial liabilities with
agreed repayment periods. The tables have been drawn up based on the undiscounted cash lsh flows of inancows of financial liabilities
based on the earliest date on which the Group can be required to pay.
Tullow Oil plc Annual Report and Accounts 2023 – 165
Financial statements Supplementary informationStrategic report Corporate governance
Note 17 Fnncl nstruments contnued
Lqudt rs contnued
Weighted
average Less than 1–3 3 months 1–5 5+
eeffective 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+
eectieffective 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
Note 18 LesesNote 18. Leases
This note provides information for leases where the Group is a lessee. The Group did not enter into any contracts acting
as a lessor.
) Ami) Amounts reconecognised n tsed in the bhe balnce slance sheet
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
andlease liabilitieand lease liabilities $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 inan23 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, classiisified 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 releeflect 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 Fnncl Sttements contnued
Year ended 31 December 2023
Note 18 Leses contnued
) Amounts reconsed n the blnce sheet contnued
TEN FPSO contnued
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
As at 31DAs at 31 December 2023, the present value of the TEN FPSO right-of-use asset was $549.0 million (2022: $596.9 million).
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
(note10ote 10) to relect 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)
) Aii) Amounts reconecognsed ised in the sttemenatement of proft or lfit or loss
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 (included in ed in finance cost)
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 outflow 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
Note 19 Provsons. Provisions
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
reclassiifications
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
1
1. This relates to an acquisition through business combination discussed in note 15 of the 2022 Annual Report and Accounts.
Other provisions include non-income tax provisions of $38.8 million (2022: $68.3 million) and $54.9 million (2022: $48.0
million) of disputed cases and claims. Management estimates non-current other provisions would fall due between two
and ivand five years.
Non-Current other provisions includes a provision relating to a potential claim arising out of historical contractual
agreement. Further information is not provided as it will be seriously prejudicial to the Company’s interest.
The decommissioning provision represents the present value of decommissioning costs relating to the European and
African oil and gas interests. The Group has assumed cessation of production as the estimated timing for outlflow of
expenditure. However, expenditure could be incurred prior to cessation of production or after and actual timing will
depend on a number of factors including, underlying cost environment, availability of equipment and services and
allocation of capital.
The energy transition could result in decommissioning taking place earlier than anticipated. The risk on the timing of
decommissioning activities is limited, supported by production plans to fully produce ans to fully produce fields in the foreseeable future. For
Net Zero Emissions sensitivities, including acceleration of decommissioning activities, refer to page 45 of the TCFD and
note 25. Climate change and energy transition.
In 2023, after the extension of several licences in Gabon, the discount rate has increased from 3.5% to 4% for those assets
with an assumed cessation of production date post 2038. This is due to a rate dierence bate difference between the 10- and 20-year US
Treasury Bills which are used as a data source. This resulted in a decrease in the provision of $3.1 million in Gabon.
Discount Cessation of Discount Cessation of
rate production Total rate production Total
InlationInflation 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
1. Short-term inlflation rate assumption has decreased from 2.5% to 2.4% in 2024. Medium and long-term rates of 2% remained unchanged from
31D31 December 2022.
The Group’s decommissioning activities are ongoing in the UK and Mauritania, with $53.4 of the future costs expected
to be incurred in 2024. The remaining activities are planned to continue through to 2027, with an associated expenditure
of$4of $40.4 million.
168 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 20 Deferr. Deferred txtoned taxation
Accelerated Other Deferred
tax Decommiss- Tax temporary petroleum
depreciation ioning losses didifferences 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)
Exchange dierExchange differences
(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
Exchange dierExchange differences
0.2
0.2
At 31 December 2023
(440.2)
67.6
7.4
(58.1)
15.8
6.6
(400.9)
1
2023 2022
$m $m
Deferred tax liabilities
(420.5)
(551.5)
Deferred tax assets
19.6
14.5
(400.9)
(537.0)
1. This relates to an acquisition through business combination discussed in note 15 of the 2022 Annual Report and Accounts.
The majority of the Group’s deferred tax assets and liabilities are expected to be recovered over more than one year.
Deferred tax assets are recognised only to the extent it is considered probable that those assets will be recoverable. This
involves an assessment of when those deferred tax assets are likely to reverse, and a judgement as to whether or not
there will be suthere will be sufficient taxable proits available to oset the tax ae profits available to offset the tax assets when they do reverse. This requires assumptions
regarding future proitabilitfitability and is therefore inherently uncertain. To the extent assumptions regarding future proitabilitmptions regarding future profitability
change, there can be an increase or decrease in the level of deferred tax assets recognised which can result in a charge
or credit in the period in which the change occurs.
Note 21 ClledNote 21. Called-up equt-up equit shre cptl nd shry share capital and share premum ccounte premium account
Allotted equt shre cptl nd shre premumted equity share capital and share premium
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
The Company does not have a maximum authorised share capital.
Tullow Oil plc Annual Report and Accounts 2023 – 169
Financial statements Supplementary informationStrategic report Corporate governance
Note 22 Shre-Note 22. Share-bsed pbased pamentsyments
Anlss of shre-bsed pAnalysis of share-based pament chreyment charge
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 Incentve Plnentive 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.
Emploee Shre Awroyee Share Award Pln (ESd 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.
2010 Sh2010 Share Optoption Pln (2010 Sn Plan (2010 SOP)
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
31D31 December 2023.
2020 PDMR bu-2020 PDMR buy-out wrdst awards
On 5 August 2020, the Company granted the new Chief Executive Oicutive 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 subjese 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 Fnncl Sttements contnued
Year ended 31 December 2023
Note 22 Shre-bsed pments contnued
2020 PDMR bu-out wrds contnued
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 Shrow Sharesve Pln (SAesave 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.
U nd IrUK and Irsh Shish Shre Iare Incentve Plns (SIPs)ive Plans (SIPs)
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 Executveutive Shre Pln (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 peured over a fixed three-year period of three consecutive inacutive financial years
starting with the inting 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 Shre-bsed pments contnued
Tullow Executve Shre Pln (LTIP) contnued
The following table illustrates the number and average weighted share price at grant or weighted average exercise price
(WAEP) of, and movements in, share options under the TIP, ESAP, 2010 SOP, 2020 buyout and SAYE.
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
price atgrante at grant
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
price atgrante at grant
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
price atgrante at grant
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
price atgrante at grant
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
price atgrante at grant
27.7
27.7
2022
LTIP
number of shares
2022
LTIP
average weighted share
price atgrante at grant
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 Fnncl Sttements contnued
Year ended 31 December 2023
Note 22 Shre-bsed pments contnued
Tullow Executve Shre Pln (LTIP) contnued
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 aecteffected 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
Note 23 Commtments nd cNote 23. Commitments and contnenctingencies
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
Where Tullow acts as operator of a Joint Venture the capital commitments reported represent Tullow’s net share of
these commitments. Where Tullow is non-operator the value of capital commitments is based on committed future
workprogrammeswork programmes.
Performance guarantees are in respect of abandonment obligations, committed work programmes and certain
inancifinancialoblal obligations.
Other contingent liabilities include amounts for ongoing legal disputes with third parties where we consider the likelihood
of a cash outlow to be highflow to be higher than remote but not probable. The timing of any economic outlflow if it were to occur
would likely range between oneand ive years. e and five years.
The movement in capital commitments is predominantly due to lower capital expenditure budget in Ghana after the
start-up of Jubilee South East project in 2023.
Tullow Oil plc Annual Report and Accounts 2023 – 173
Financial statements Supplementary informationStrategic report Corporate governance
Note 24 RelNote 24. Related prt trnsctonsted party transactions
The Directors of Tullow Oil plc are considered to be the only Key Management Personnel as des defined by IAS 24 Related
Party Disclosures.
2023 2022
$m $m
Short-term employee beneits benefits
2.7
2.5
Post-employment beneiment benefits
0.2
0.1
Share-based payments
1.4
1.4
4.3
4.0
Short-term emploShort-term employee beneftsee benefits
These amounts comprise fees paid to the Directors in respect of salary and beneits eafits earned during the relevant inanuring the relevant financial
year, plus bonuses awarded for the year.
Post-emploment beneftsPost-employment benefits
These amounts comprise amounts paid into the pension schemes of the Directors.
ShreShare-bsed pments-based payments
This is the cost to the Group of Directors’ participation in share-based payment plans, as measured by the fair value of
options and shares granted, accounted for in accordance with IFRS 2 Share-based Payment.
There are no other related party transactions. Further details regarding transactions with the Directors of Tullow Oil plc are
disclosed in the Remuneration Report on pages 89 to 113.
Note 25 ClmNote 25. Climate chne nd ener trnstonte change and energy transition
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
eect on the Geffect on the Group Balance Sheet in the next 12 months.
This note describes the key areas of climate impacts that potentially have short and longer-term eects 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.
Fnncl plnnn ssumptonsFinancial planning assumptions
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 managements 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 lsh 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 Fnncl Sttements contnued
Year ended 31 December 2023
Note 25 Clmte chne nd ener trnston contnued
Fnncl plnnn ssumptons contnued
To address hard to abate residual emissions, Tullow is developing a nature-based carbon osn 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 oson offset projects are not included in the value in use calculation of the recoverable amount of the
Group CGUs as expected cash lsh 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 ins potential financial
impacts on intangible exploration and evaluation asset write-osoffs, 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 inuently financial statements cannot capture all possible future outcomes as these are not yet known.
Note 26 ENote 26. Events snce 31 Devents since 31 December 2023
Gabon – On 29 February 2024, Tullow completed the Asset Swap agreement (ASA) transaction (discussed in note
14. Assets and liabilities classiieified 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 inad the financial impacts cannot be disclosed in the Annual Report and Accounts as the
measurement of the assets acquired is now underway. Accordingly, the relevant disclosure will be made in the 2024 half
year results.
Kenya On 1 March 2024 Tullow received a letter from the 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.
Note 27 Csh flow stt. Cash flow statement reconcltement reconciliatons ions
2023 2022
Purchases of intangible exploration and evaluation assets $m $m
Additions to intangible exploration and evaluation assets
25.4
39.2
Associated cash lowsAssociated cash flows
Purchases of intangible exploration and evaluation assets
(30.2)
(42.6)
Non-cash movements/presented in other cash low flow lines
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
Associated cash lowsAssociated cash flows
Purchases of property, plant and equipment
(262.3)
(263.8)
Non-cash movements/presented in other cash low flow lines
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)
Associated cash lowsAssociated cash flows
Debt arrangement fees
(5.0)
Repayment of borrowings
(432.2)
(100.0)
Drawdown of borrowings
129.7
Non-cash movements/presented in other cash low flow lines
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
Note 28 DvdendsNote 28. Dividends
In 2023, the Board recommended that no interim or inal dd that no interim or final dividend would be paid.
Note 29 T. Tullow Ol plc subsdullow Oil plc subsidiresaries
As t 3As at 31 December 2023
Each undertaking listed below is a subsidiary by virtue of Tullow Oil plc holding, directly or indirectly, a majority of voting
rights in the undertaking. The ownership percentages are equal to the eective equits are equal to the effective equity owned by the Group. Unless
otherwise noted, the share capital of each undertaking comprises ordinary shares or the local equivalent thereof.
The percentage of equity owned by the Group is 100% unless otherwise noted. The results of all undertakings listed
below are fully consolidated in the Group’s Financial Statements.
Country of
Company name
incorporation
Direct or indirect
Address of registered office
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,
BritishVish Virgin Islands
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,
Libreville,GabonLibreville, Gabon
1
2
1
2
1. Dissolved 30 January 2024.
2. Dissolved 27 June 2023 .
176 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 29 Tullow Ol plc subsdres contnued
As t 31 December 2023 contnued
Country of Direct or
Company name incorporation
indirect
Address of registered o office
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
3
4
5
6
7
3. Dissolved 24 September 2023.
4. Dissolved 22 December 2023.
5. Sold 16 November 2023.
6. Dissolved 22 September 2023.
7. Dissolved 29 March 2023.
Tullow Oil plc Annual Report and Accounts 2023 – 177
Financial statements Supplementary informationStrategic report Corporate governance
Note 30 L. Lcencicence nterestse interests
Current explorton, devation, development nd producton nterestselopment and production interests
GhnGhana
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
1
1. A unitisation agreement covering the Jubilee ee field was agreed by the partners of the West Cape Three Points and the Deepwater Tano licences. The
Jubilee Unit Area was expanded in 2017 to include the Mahogany and Teak ak fields. It now includes all of the remaining part of the West Cape Three
Points licence and a small part of the Deepwater Tano licence.
Non-OpertOperated
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
2
2
2
2
2
2. Subject to completion of the asset swap deal announced in April 2023 (refer to note 14 above) .
178 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Notes to the Group Fnncl Sttements contnued
Year ended 31 December 2023
Note 30 Lcence nterests contnued
enKenya
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
3
3
3
ExplortonExploration
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
3. Subject to Government of Kenya consent (refer to note 8 above).
Tullow Oil plc Annual Report and Accounts 2023 – 179
Financial statements Supplementary informationStrategic report Corporate governance
Compn blnce 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 Oicer Chief Financial Oicer
5 March 2024 5 March 2024
180 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Compn sttement of chnes n equt
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
Compn ccountn polces
As at 31 December 2023
() Generl nformton
Tullow Oil plc is a company incorporated in the United
Kingdom under the Companies Act. The address of the
registered oice 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) Bss of preprton
The Company meets the deinition 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 (FRS101) 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,
todisclose 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 proit 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) Gon concern
Refer to the Basis of preparation in the Accounting Policies
section of the Group accounts.
(d) Foren currences
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) Shre-bsed pments
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 deined
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 eect 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 modiications 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. Ateach 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
Compn ccountn polces contnued
As at 31 December 2023
() Fnncl ssets
The Company classiies its inancial assets in the following
categories: at fair value through proit or loss; and loans
and receivables. The classiication depends on the
purpose for which the inancial assets were acquired.
Management determines the classiication of its inancial
assets at initial recognition. As of 31 December 2023, all
inancial assets were classiied at amortised cost.
Assets are classiied 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 eective
interest method if the time value of money is signiicant.
Gains and losses are recognised in proit or loss when the
assets are derecognised, modiied or impaired.
(h) Fnncl lbltes
The measurement of inancial liabilities is determined by
the initial classiication.
) Fnncl lbltes t fr vlue throuh proft
orloss
Those balances that meet the deinition of being held for
trading are measured at fair value through proit 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.
) Fnncl lbltes mesured t mortsed cost
All inancial liabilities not meeting the criteria of being
classiied at fair value through proit or loss are classiied
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 eective interest method.
Borrowings and trade creditors fall under this category of
inancial instruments.
() Shre ssue expenses
Costs of share issues are written o against the premium
arising on the issues of share capital.
() Fnnce costs of debt
Finance costs of debt are recognised in the proit and loss
account over the term of the related debt at a constant
rate on the carryingamount.
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 eective 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.
() Txton
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 dierences 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 proits from which the underlying
temporary dierences can be deducted. Deferred tax is
measured on a non-discounted basis.
Deferred tax is provided on temporary dierences
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
dierence is reversed.
(l) Cptl mnement
The Company deines capital as the total equity of the
Company. Capital is managed in order to provide returns
for shareholders and beneits 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) Crtcl ccountn udements nd e
sources of estmton uncertnt
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 signiicant eect 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 ofcertain 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 speciic
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 dierence between its
carrying value and its recoverable amount. Therecognition
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 ofimpairment
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-speciic 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 oshore. 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 Compn Fnncl Sttements
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.
Senstvtes
The value of property, plant and equipment and E&E assets supporting the investment value will be aected 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 proiles. 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 speciied in note 9 to the Group
Financial Statements would increase the investment impairment charge by $460.7 million, whilst increases to oil prices
speciied 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.
Clmte chne
The value of property, plant and equipment and E&E assets supporting the investment value will be aected 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 tx
The Company has tax losses of $1,306.0 million (2022: $1,289.5 million) that are available indeinitely for oset against
future non-ring-fenced taxable proits 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 proits 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 flln due wthn one er
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 aprovision of $nil (2022: $nil) was held in respect of the
recoverability of amounts due from subsidiary undertaking.
Note 4 Trde nd other pbles
Amounts flln due wthn one er
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 Borrowns
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 Unmodiied 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 Borrowns contnued
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 Unmodiied 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 Modiied 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 ailiates 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 Fnncl nstruments
Dsclosure exemptons 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.
Fnncl rs mnement obectves
The Company follows the Group’s policies for managing all its inancial risks.
Fr vlues of dervtve 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 Compn Fnncl Sttements contnued
Year ended 31 December 2023
Tullow Oil plc Annual Report and Accounts 2023 – 187
Financial statements Supplementary informationStrategic report Corporate governance
Note 6 Fnncl nstruments contnued
Fr vlues of dervtve nstruments contnued
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 signiicant to the fair
value measurement asawhole) at the end of each reporting period.
Income sttement summr
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
Csh flow nd nterest rte rs
The interest rate proile 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 insigniicant risk of change in value. The Company only deposits cash with
major banks of high-quality credit standing.
Lqudt rs
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
eective
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 Fnncl nstruments contnued
Lqudt rs contnued
Weighted
average
eective
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 Clled-up equt shre cptl nd shre premum ccount
Allotted equt shre cptl nd shre premum
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 Compn Fnncl Sttements contnued
Year ended 31 December 2023
Tullow Oil plc Annual Report and Accounts 2023 – 189
Financial statements Supplementary informationStrategic report Corporate governance
Alterntve performnce mesures
The Group uses certain measures of performance that
are not speciically deined 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.
Cptl nvestment
Capital investment is deined 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 assetadditions.
2023
$m
2022
$m
Additions to property, plant
andequipment 416.1 370.7
Additions to intangible exploration
andevaluation 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
capitalactivities (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 deined 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 deinition 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
Gern nd dusted 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 deined as net debt divided by
adjusted EBITDAX. Adjusted EBITDAX is deined as (loss)/
proit 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)/ proit 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
Alterntve performnce mesures contnued
Underln csh opertn 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 deined 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 csh 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 deined
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
Underln opertn csh 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 deined
as net cash from operating activities less repayments
of obligations under leases plus decommissioning
expenditure.
Pre-fnncn free csh 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 deined 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
capitalactivities 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
capitalactivities (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, inill drilling and ield performance in Jubilee
during 2023, which is oset 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 Inill 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 relects
the terms of the Production Sharing Contracts related to each ield. Total net entitlement reserves were 204.5 mmboe
at31December 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.
Commercl reserves nd contnent resources summr
(unudted) worn nterest bss
192 – Tullow Oil plc Annual Report and Accounts 2023
Financial statements Supplementary informationStrategic report Corporate governance
Shreholder nformton
Fnncl clendr
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
Shreholder enqures
All enquiries concerning shareholdings, including
notiication of change of address, loss of a share
certiicate or dividend payments, should be made to the
Company’sregistrar.
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.
Unted ndom restrr
Computershre Investor Servces 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
Ghn restrr
The Centrl Securtes Depostor (Ghn) Lmted
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
Shre deln fclt
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 shre deln
Internet share dealing is available to shareholders residing
in the UK. This service oers 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
certiicates. Internet share dealing is only available to
residents in either the UK, Channel Islands or Isle of Man.
Postl shre deln servce
The postal share dealing service oers 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.
ShreGft
If you have a small number of shares whose value makes it
uneconomical to sell, you may wish to consider donating
them toShareGift, which is a UK-registered charity specialising
inrealising the value locked up in small shareholdings for
charitable purposes. The resulting proceeds are donated to
arange of charities, relecting 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 certiicate 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 relected 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.
Electronc communcton
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.
Shreholder securt
Shareholders are advised to be cautious of unsolicited
advice, oers to buy shares at a discount or oers 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.
Corporte broers
Brcls
5 North Colonnade,
Canary Wharf,
London E14 4BB
Peel Hunt
100 Liverpool Street,
London EC2M 2AT
Audtor
Ernst nd Youn LLP
1 More London Place,
London SE1 2AF
Registered oice:
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
www.tullowoil.com