The report provides new levels of disclosure on payments to major stakeholder groups including governments. A link to the online report on Tullow’s website can be found here: http://www.tullowoil.com/files/pdf/reports/tullow_cr_2013.pdf. The report also contains commentary from Tullow’s senior executives about the Group’s performance in 2012 and sets expectations and targets for 2013.
Among the disclosures in the 2012 report are details of payments made to the 12 individual governments to whom Tullow pays tax or makes payments in kind. Tullow is making these disclosures in support of its commitment to transparency, which allows the citizens of the countries in which Tullow operates to hold both Tullow and their own governments to account. It paves the way for sustainable economic development and provides an opportunity to both demystify the oil and gas industry and to highlight the full range of benefits that the industry presence can bring to a country. Tullow is acting ahead of proposed legislation and, in particular, the EU Directive governing accounting and transparency standards which Tullow welcomes.
In addition to declaring these payments to governments, Tullow has grouped payments to all stakeholder groups in one place, so that the relative value of Tullow’s payments and the significance of Tullow’s tax payments is clear. In addition to the $905 million payment to governments, which includes $332 million of payments in kind in barrels of oil (assumed price of $108 / barrel), Tullow’s other payments comprise $262 million in employee salaries, $173 million in shareholder dividends, $145 million spent with local suppliers and $20 million on discretionary local community investment.
Commenting today, Simon Thompson, Non-executive Chairman of Tullow Oil, said,
“Oil is not a renewable resource, but it is a remarkable source of wealth creation. For this wealth to be a blessing, it must be well managed, and transparency is a critical first step towards achieving this. Revenues from natural resources can, and should, have a transformative effect on the development prospects of emerging economies. This is why we are disclosing our 2012 payments to major stakeholders including all payments and taxes to governments, monetary or in kind. Typically, over the life cycle of a project some 60% to 80% of net oil revenues after costs accrue to our host governments and it is important that the citizens of these countries can hold both Tullow and their governments to account for the money generated by our industry.”