Paul Coward, Tullow Oil, On EISA in Ghana and Uganda

Tullow Oil ESIA Experience in Ghana / Uganda
November 2010
ESIA Tullow Oil November 2010
Slide 1
The Tullow footprint

Africa Rest of the World
1 2 12 1 14 2 2 3 1
15 10
8 17 5 7 2
3 16 1
Europe
1 Netherlands E 2 United Kingdom EDP
South Asia
1 Bangladesh EDP 2 Pakistan EDP
South America
1 French Guiana E 2 Guyana E 3 Suriname E
13
11
Group highlights
Africa
Key: E Exploration D Development P Production
South Asia
1 Angola E 2 Congo (Brazzaville) DP 3 Congo (DRC) E 4 Cte d'Ivoire EDP 5 Equatorial Guinea DP 6 Ethiopia* E 7 Gabon EDP 8 Ghana ED 9 Kenya* E
10 Liberia E 11 Madagascar E 12 Mauritania EDP 13 Namibia D 14 Senegal E 15 Sierra Leone E 16 Tanzania E 17 Uganda ED
37,500 boepd 17 countries* 56 licences* 18 producing fields
5,600 boepd 2 countries 8 licences 2 producing fields
Europe
South America 3 countries 4 licences
12,700 boepd 2 countries 28 licences 16 producing fields
* - subject to completion of farm-in deals.
Slide 2
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 Guyana 1,889 sqkm 3D PSDM Netherlands 2,424 sqkm 3D PSDM Gabon 2 wells
Seismic
Acquisition Processing
Drilling
Offshore Onshore
Sierra Leone 3,600 sqkm 3D PSDM
OMOC-N-1 Onal-1004 OMOC-N301 OMOC-N201 OMOC-N302 Noix de Coco-1

1,512 sqkm 3D PSDM 678 km 2D PSDM
Pakistan 1 well
Shekhan-1
48 km of 2D PSDM
Uganda 9 wells
Cte dIvoire 2,307 sqkm 3D 2,307 sqkm 3D PSDM Madagascar 720 km 2D PSTM
Kasamene-2 Kasamene-3 Kasamene-3A Nizizi-3 Nsoga-5
Ngiri-2 Mpyo-1 Kigogole-2 Kigogole-4 Kigogole-5
Ghana 5 wells
124 km 2D AWD 97 of 145 km 2D Low frequency passive project Tanzania -1 well 221 km 2D PSTM 50 sqkm 3D PSTM
Tweneboa-2
Dahoma-1
Mahogany-5 Owo-1
Owo-1 ST
87% success rate in 2009 77% success rate in 2008
Onyina-1
1600 sqkm 3D PSDM 600 sqkm 3D PSTM
Likonde-1 973 km 2D PSTM
Slide 3
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 4
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 5
Ghana & Uganda
Slide 6
Ghana
JUBILEE FIELD LAYOUT
Installed 10 EGIF
J11-B J12-D
Installed
Installed 2 x 12 W Prod. Flow lines
J8-B
Installed Tree
J3-B
Installed Tree
J16-B J4-B
Installed Tree Installed Tree
J15-C J13-D J6-D
J17-A
Installed Tree
J7-C
Installed Tree
J5-D
Installed Tree
J10-A
Installed Umbilicals (Mar 2010)
J9-C J1-D
Installed Tree
J14-B
J2-C
Installed Tree
Rev. 5 to End of April 2010
Slide 7
Uganda
Slide 8
Uganda Development
Nzizi Gas Field development (IPP)
50 MW Power Plant planned for Hoima Region Nzizi-3 well confirmed expected gas volumes
Kasamene
Kasamene Central Processing Facility
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
Nzizi
Integrated Power Project (IPP) -Nzizi Gravel road upgrade to Hoima for trucking
Road
Slide 9
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 10
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 11
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 12
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 13
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 - Dont tell show..
Slide 14
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 15
Extras
Slide 16
Local Content delivers a Sustainable Supply Chain

Local Content is the Term given to Tullows 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
ESIA Local Tullow Tullow Content Oil November 2010
Slide 17
Success to date
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.
Hotel/Accom.
Fuel Emergency Services

Camps/Accom.
Communications Custom Clearance
Environmental Services
Field Construction
Catering HR Of f ice Supplies
Construction Materials
Spare Parts
IT Services Medical
Personnel Transport
FPSO/Wellhead
Specialist Trades
Mud/ Cuttings
Civil Electricals
Well Services
Rig Hire
Seismic Services
Feed
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
Uganda Ghana
Site Prep. Inf ield Services
Telecoms Mechanical Unskilled Labour Training

Inf ield Transport
Security Crane Hire
Tangibles
Inspections General Trades

Facilities Management
Int. Freight Services
48% 52% 62%

Local Spend
Slide 18
38%
Freight Forwarding INDIRECT SERVICES

DIRECT SERVICES SPECIALISTS SERVICES
Waste Management
International Spend

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Tullow Oil ESIA Experience in Ghana / Uganda

ESIA Tullow Oil November 2010

The Tullow footprint

37,500 boepd 17 countries* 56 licences* 18 producing fields

5,600 boepd 2 countries 8 licences 2 producing fields

South America 3 countries 4 licences

12,700 boepd 2 countries 28 licences 16 producing fields

* - subject to completion of farm-in deals.

ESIA Tullow Oil November 2010

83% global exploration success rate in 2010 YTD

Sierra Leone 3,600 sqkm 3D PSDM

OMOC-N-1 Onal-1004 OMOC-N301 OMOC-N201 OMOC-N302 Noix de Coco-1

Kasamene-2 Kasamene-3 Kasamene-3A Nizizi-3 Nsoga-5

Ngiri-2 Mpyo-1 Kigogole-2 Kigogole-4 Kigogole-5

1600 sqkm 3D PSDM 600 sqkm 3D PSTM

Likonde-1 973 km 2D PSTM

in planning and undertaking our operations

ESIA Tullow Oil November 2010

Management System (EMS)

EMS is a core part of our Integrated Management

Aligned with IFC Performance Standards and

Standards for environmental management aligned

to EMS Tullow Oil Environmental Standards

ESIA Tullow Oil November 2010

Ghana & Uganda

ESIA Tullow Oil November 2010

JUBILEE FIELD LAYOUT

J15-C J13-D J6-D

Rev. 5 to End of April 2010

ESIA Tullow Oil November 2010

ESIA Tullow Oil November 2010

Kasamene Field Development

ESIA Tullow Oil November 2010

development, not only in relation to oil and gas production

ESIA Tullow Oil November 2010

regulator i.e. IFC Performance Standards

ESIA Tullow Oil November 2010

Sound Base for ESIA

information will be utilised and fed into regional development planning

to play as potential information and study donors

ESIA Tullow Oil November 2010

to provide the service required

individuals are not available then no decision will be made.

ESIA Tullow Oil November 2010

regulatory decisions being made with a political bias or based on perceptions.

Land and frameworks for acquisition, access, compensation and

ESIA Tullow Oil November 2010

ESIA Tullow Oil November 2010

ESIA Tullow Oil November 2010

Local Content delivers a Sustainable Supply Chain

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:

ESIA Local Tullow Tullow Content Oil November 2010

Fuel Emergency Services

Communications Custom Clearance

Catering HR Of f ice Supplies

Site Prep. Inf ield Services