Slide 1ESIA – Tullow Oil – November 2010

Tullow Oil – ESIA Experience in Ghana / UgandaNovember 2010

Slide 2ESIA – Tullow Oil – November 2010

The Tullow footprint

Africa Rest of the World

Europe

1 Netherlands E

2 United Kingdom EDP

1

2

3

4

5

6

7

8

9

Angola E

Congo (Brazzaville) DP

Congo (DRC) E

Côte d'Ivoire EDP

Equatorial Guinea DP

Ethiopia* E

Gabon EDP

Ghana ED

Kenya* E

South America

1 French Guiana E

2 Guyana E

3 Suriname E

South Asia

1 Bangladesh EDP

2 Pakistan EDP

Liberia E

Madagascar E

Mauritania EDP

Namibia D

Senegal E

Sierra Leone E

Tanzania E

Uganda ED

10

11

12

13

14

15

16

17

Group highlights

South America

• 3 countries

• 4 licences

Europe

• 12,700 boepd• 2 countries• 28 licences• 16 producing fields

Africa

• 37,500 boepd

• 17 countries*

• 56 licences*

• 18 producing fields

South Asia

• 5,600 boepd

• 2 countries

• 8 licences

• 2 producing fields

1

22

1

23 1

Key: E Exploration D Development P Production

4

10

12

14

1

23

5

7

8

1113

16

1715

6

9

* - subject to completion of farm-in deals.

Slide 3ESIA – Tullow Oil – November 2010

83% global exploration success rate in 2010 YTD

French Guiana

94 of 2,494 sqkm 3D

171 km 2D

2,494 sqkm 3D PSDM

171 km 2D PSDM

2,424 sqkm3D PSDM

NetherlandsGabon – 2 wells

1,512 sqkm 3D PSDM

678 km 2D PSDM

OMOC-N-1

Onal-1004

OMOC-N301

OMOC-N201

OMOC-N302

Noix de Coco-1

3,600 sqkm3D PSDM

Sierra Leone

2,307 sqkm 3D

2,307 sqkm 3D PSDM

Côte d’Ivoire

Guyana

1,889 sqkm3D PSDM

Tweneboa-2

Ghana – 5 wells

Dahoma-1

Mahogany-5

Owo-1

1600 sqkm 3D PSDM

600 sqkm 3D PSTM

87% success rate in 2009

77% success rate in 2008

Seismic Drilling

Acquisition

Processing

Offshore

Onshore

48 km of 2D PSDM

Pakistan – 1 well

Shekhan-1

Tanzania -1 well

973 km 2D PSTM

Likonde-1

Madagascar

720 km 2D PSTM

Uganda – 9 wells

Kasamene-2

Kasamene-3

Kasamene-3A

Nizizi-3

Nsoga-5

124 km 2D AWD

97 of 145 km 2D

Low frequency passive project

221 km 2D PSTM

50 sqkm 3D PSTM

Ngiri-2

Mpyo-1

Kigogole-2

Kigogole-4

Kigogole-5

Owo-1 ST Onyina-1

Slide 4ESIA – Tullow Oil – November 2010

Tullow EHS

• Environmental, Health and Safety Policy- Strong EHS leadership by senior

management

- Approved by Board and signed by CEO

• Clear policy statement on- Protecting people

- Environmental protection

- Continual improvement

- Working with Communities

• Tullow understands key EHS principles in planning and undertaking our operations

Slide 5ESIA – Tullow Oil – November 2010

Environmental Management

• ISO 14001 certification for Environmental Management System (EMS)

• EMS is a core part of our Integrated Management System

• Aligned with IFC Performance Standards and Equator Principles

• ESIA for all operations- ESIA Recommended Practice Guidelines

- Risk Management Procedure

• Standards for environmental management aligned to EMS – Tullow Oil Environmental Standards

Slide 6ESIA – Tullow Oil – November 2010

Ghana & Uganda

Slide 7ESIA – Tullow Oil – November 2010

Ghana

JUBILEE FIELD LAYOUT

J1-DInstalled Tree

J2-CInstalled Tree

J10-A

J14-B

J13-D

J12-DInstalled

J15-C

J11-B J8-BInstalled Tree

J6-D

J7-CInstalled Tree

J4-BInstalled Tree

J9-C

J5-DInstalled Tree

J17-AInstalled Tree

J3-BInstalled Tree

J16-BInstalled Tree

Installed 2 x 12”

W Prod. Flow

lines

Installed Umbilicals

(Mar 2010)

Installed

10” EGIF

Rev. 5 to End of April 2010

Slide 8ESIA – Tullow Oil – November 2010

Uganda

Slide 9ESIA – Tullow Oil – November 2010

Uganda Development

Nzizi Gas Field development (IPP)

• 50 MW Power Plant planned for Hoima Region

• Nzizi-3 well confirmed expected gas volumes

Kasamene Field Development

• Successful Kasamene-2 & 3 appraisal wells

• Results support development concept and volumes

• FEED studies optimised to minimise environmental footprint

• First oil end 2011

• Development focused on local and regional needs

Kasamene

Nzizi

Road

Integrated Power Project (IPP) -Nzizi

Gravel road upgrade to Hoima for trucking

Kasamene Central

Processing Facility

Slide 10ESIA – Tullow Oil – November 2010

Context

• Both Uganda and Ghana frontier oil and gas regions- Limited exposure to development of this scale

- Emerging areas of resource conflict and access due to population growth and area resettlement

• Politically stable

• High expectations of what the oil and gas industry will do for all areas of development, not only in relation to oil and gas production

• Two completely different operational areas but with very similar underlying challenges..

Slide 11ESIA – Tullow Oil – November 2010

Regulatory Elements

• The regulatory frameworks in both regions is not oil and gas specific- ESIA regulations are in place and applied however they do not cater for specific oil

and gas issues, mainly mining sector influence - Wider pollution control standards, i.e. effluent standards, air emissions etc are not

clearly defined nor applicable to industry in many cases

• Regulatory bodies are still developing their understanding of industry issues- To date a lot of misconception or misunderstanding- Ranges from no mechanism to manage to ‘world class’ without supporting

infrastructure to allow the later to be realistic- Oil and Gas Policy under review in Uganda – current draft prohibits venting /

flaring

• Challenge is to present way forward without impeding the autonomy of regulator i.e. IFC Performance Standards

• Lack of clarity over key institutions roles in decision making

• Development and Exploration timelines are aggressive and this may lead to pressure on regulators who are usually underfunded and under resourced to cope with the additional load

Slide 12ESIA – Tullow Oil – November 2010

Sound Base for ESIA

• Baseline information- Although not such an issue in exploration process as development matures so

does the required for continual and robust baseline information

- Requires early recognition of requirements in order to allow information to be meaningful. Lessons from Ghana implemented in Uganda

- In areas with no baseline how much is required to make truly informed decisions

- Clarity on roles within an SEA framework - in Uganda this has focused mainly on oil and gas sector but not broader resource conflict issues, i.e. tourism, fisheries

- Information may exist but will be held under different institutions who are not always aligned

• The SEA concept is sound however clarity is required on how this information will be utilised and fed into regional development planning

• Often perceived as a govt role to undertake SEA but industry have big part to play as potential information and study donors

Slide 13ESIA – Tullow Oil – November 2010

Capacity

• Oil and gas is dynamic and the development process is iterative

• ESIA practitioners are challenged to build capacity (with support) to be able to provide the service required

- Building the understanding of industry is crucial

- Capacity in relation to manpower requirements

- Limited supply of local specialist usually leads to delays

• Infrastructure development- Key area that requires significant investment and lead time in developing regions,

particularly in the area of waste management, and oil spill response.

- This area is of key concern and needs to be at the forefront when discussing policy / standard implementation

• Regulatory capacity - large potential for single point failure, if key individuals are not available then no decision will be made.

Slide 14ESIA – Tullow Oil – November 2010

Further Challenges

• Oil and Gas development is emotive and therefore external factors lead to regulatory decisions being made with a political bias or based on perceptions.

• Land and frameworks for acquisition, access, compensation and resettlement

• Recognition of the role of NGO / CSO – both by GOU and Industry

• Managing expectations both internal and external

• Learning from experience - Clearly define plans

- Recognise the need to resource teams early in order to provide internal support but more importantly to build capacity

- Don’t tell show..

Slide 15ESIA – Tullow Oil – November 2010

Summary

• Not all negative, these challenges make it an area with huge potential

• Communication between interested parties is crucial

• Standards need to be developed which are realistic for the country of operation

• Infrastructure development through partnerships is essential to success

• Local Capacity Development crucial

Slide 16ESIA – Tullow Oil – November 2010

Extras…

Slide 17ESIA – Tullow Oil – November 2010

Local Content delivers a Sustainable Supply Chain

• Local Content is the Term given to Tullow’s commitment to create in country capability in the oil industry.

• It represents the opportunity to build a local oil infrastructure and supply base to help Tullow control and reduce costs.

• It also benefits local business and communities through:

- Local business development (goods and services)

- Local employment (re-skilling, job development, redeployment)

- Sustainable local economic development

Tullow Local Content

Slide 18ESIA – Tullow Oil – November 2010

Success to date

Uganda Ghana

48%

52% 62%

38%

Local SpendInternational Spend

Fuel

Emergency Services

Waste Management

Security

Medical

Crane

Hire

Personnel

Transport

Freight Forwarding

Custom

Clearance

Facilities

Management

IT

Services

Telecoms

Hotel/Accom.

Off ice

Supplies

HR

Unskilled

Labour

Training

General

Trades

Catering

Communications

Camps/Accom.

FPSO/Wellhead

Tangibles

Rig

Hire

Feed

Seismic

Services

Well

Services

Environmental Services

Int. Freight Services

Site Prep.

Field Construction

Specialist

Trades

InspectionsInf ield

Transport

Spare

Parts

Inf ield

Services

Civil

Mechanical

Electricals

Mud/

Cuttings

Construction

Materials

SPECIALISTS

SERVICES

DIRECTSERVICES

INDIRECTSERVICES

Tullow has had great success in achieving high levels of spend with Local Companies

even though these early phases of field development usually include a large element of

specialist services or one-off constructions such Seismic surveys or Vessel construction.

We are focusing our efforts on improving

the local skill base through programs

such as “Closing the Gap”, which is

delivering training programmes to local

companies to improve skills and

standards