REG - Tullow Oil PLC - Annual Report & Notice of AGM <Origin Href="QuoteRef">TLW.L</Origin> - Part 2
15/03/2016 15:00
- Part 2: For the preceding part double click ID:nRSO1834Sa
accordance with Well Design and Operations Standard, Well Control Standard and associated
proceduresDuring development and
production:· Minimum asset integrity, maintenance and planning requirements mandated through
Production Operations Standard and associated procedures· Use of computer-based maintenance systems
and leading corrosion management application system· Independently verified Safety Case and Cases to
Operate procedureOverall:· Vigorous assurance processes both internally and externally· Operations
risk insurance coverage· Jubilee Asset Integrity Project Improvement Steering Committee meets
fortnightly· In case of incident, contingency/containment plans e.g. emergency response procedures,
with contracts in place for third-party support
(10) Inabilitytoreplenishexplorationportfolio AngusMcCoss,ExplorationDirector Exploration&Appraisal Failuretoreplenishexplorationacreage orfundnew venturesresultsin: · poorornoqueueofdrill-ready prospects· failure to deliver key element of growth strategy · New opportunities are considered against existing portfolio to maintain diversity of prospects· · New licence granted in Guyana· Farm-down of licences in Suriname, Norway, Mauritania· Review of New Ventures strategy· Geoscientists focused on seismic interpretation to decipher best prospects· Ongoing farm-downs to reduce Tullow equity earlier in licence cycle to gain carries and reduce costs
Funding is limited and exploration portfolio reviewed annually· BDTs, in particular New Ventures,
tasked with actively seeking and pursuing opportunities· Exploration and Appraisal Values Controls
Standard in place· Exploration and Development Geosciences Executive team work with BDTs and
Commercial team on portfolio planning· Corporate Centre assurance programme and central store of all
exploration data· Twice-yearly review of exploration prospect inventory and tracking of net
prospective risked resources
(11) Majorcyberorinformationsecurity incident AngusMcCoss,ExplorationDirector Governance&RiskManagement A compromise could leadto: · disruptiontoorhaltof critical business systems· loss or theft of confidential information, competitive advantage and intellectual property· financial and/or reputationalharm · Advanced Security Operations Centre (ASOC) provides global monitoring, analysis, alerting and · Ongoing Group-wide awareness training, with additional bespoke training for higher risk areas· Ongoing improvement of network infrastructure resilience· Specialist external assurance of TEN and Jubilee industrial control systems
incident response· Bespoke advanced security equipment is used at key operations sites which are
continually updated with relevant intelligence· Active member of Cyber Information Sharing Partnership
(CISP) and maintain key government relationships which provide alerts or response to hidden threats·
Third-party specialists analyse potential areas of weakness and provide network assurance activities·
Group-wide awareness training, aligned with Information Security Standard, conducted across Tullow's
business and operations
(12) Failuretoretainordevelopkey staff AidanHeavey,ChiefExecutiveOfficer Organisation&Culture · Keyskillsandexperiencearenot availableinternally,impactingdelivery ofthebusinessplan· Staffturnoverincreasesresulting in recruitment costs and possible buy-inofshort-termcontractors· Disengagedworkforcenotaligned withcultureofefficiency,performance managementandcostconsciousness· Localisationandorganisational plansmaynotbedelivered, affectingrelationshipswith nationalgovernments· CompetitorsrecruitTullowstaff • Bi-annual performance and development cycle, with functions and BDTs responsible for their · Revised organisation design with clear accountabilities· Embedded performance management framework· Increased focus on staff engagement to embed culture· Implementation of employee engagement plan· Re-structured HR Delivery & Reward team to ensure higher level of capability and experience· Review of total reward for all employees planned in 2016 and one-off Exceptional Share Award made in 2015· Diversity plan defined with actions in place for 2016
employees' development and career progression· Succession planning, localisation and diversity
objectives are set and being actively progressed and key targets monitored· Nominations Committee
focus on diversity plan· Organisation structure designed for HR Business Partner to report key staff
data including resignations through the line to BDT and functional discipline and to the HR function·
Monthly reporting to Executives of HR analytics· Organisation Strategy & Effectiveness (OSE) VP
attends weekly Operations Committee meetings· Key people data reported to monthly and quarterly
performance management meetings· A staff engagement plan is agreed with HR, Communications and
Executives, with key deliverables set each year· Annual Employee Engagement Survey· Annual review of
reward package
COMPLIANCE
(13) Majorbreachofbusinessorethical conduct standards AidanHeavey,ChiefExecutiveOfficer Ian Springett,ChiefFinancialOfficer Governance&RiskManagement · Unethicalbehaviourbreaches anti-corruptionlaws· Investigationsresultinreputational damage· Costimpactthroughinvestigation costsandfines· SeniorOfficers liable underUK BriberyAct · Implementation of the Tullow Code of Ethical Conduct, with annual certification process carried out · Updated Code of Ethical Conduct· Established Ethics & Compliance Board sub-committee· Ongoing development of a monitoring and assurance plan to be used by Business Units· Planned development of an e-learning solution to continue to promote the Code of Ethical Conduct· Fraud Risk Awareness provided to 591 staff· Achieved 100 per cent completion of the self-certification of compliance with the Code of Ethical Conduct
with all staff· Gifts and Hospitality (G&H) Standard adhered to and maintained, with online G&H
register available to all staff· Other relevant Ethics & Compliance standards, policies and procedures
in place, adhered to and maintained· Leadership leading by example and advocating good behaviour·
Dedicated Ethics & Compliance Advisors in Key Business Units· Appropriate due diligence carried out in
relation to service providers, contractors and other counter-parties· Appropriate anti-bribery and
corruption provisions in agreements with service providers, contractors and other counter-parties
Appendix C: Related party transactions
The following related party transactions are extracted from the Annual Report
and Accounts (page 153).
The Directors of Tullow Oil plc are considered to be the only key management
personnel as defined by IAS 24 - Related Party Disclosures.
2015 ($m) 2014 ($m)
Short-term employee benefits 10.0 9.5
Post-employment benefits 1.1 1.2
Amounts awarded under long-term incentive schemes 4.2 3.3
Share-based payments 5.7 10.4
21.0 24.4
Short-term employee benefits
These amounts comprise fees paid to the Directors in respect of salary and
benefits earned during the relevant financial year, plus bonuses awarded for
the year.
Post-employment benefits
These amounts comprise amounts paid into the pension schemes of the
Directors.
Amounts awarded under long-term incentive schemes
These amounts relate to the shares granted under the annual bonus scheme that
is deferred for three years under the Deferred Share Bonus Plan (DSBP) and
Tullow Incentive Plan (TIP).
Share-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 Payments.
There are no other related party transactions. Further details regarding
transactions with the Directors of Tullow Oil plc are disclosed in the
Directors' Remuneration Report on pages 90 to 106.
END
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