SUMMARY OF PROPOSED INVESTMENT (SPI)
Description of the Project:

In July 2008, Tullow Ghana, Ltd. (“Tullow Ghana”), the operator of the Jubilee Field,
awarded MODEC Inc. (the “Sponsor”) the contract to provide and operate a Floating
Production Storage and Offloading (“FPSO”) facility for the Phase I development of the
Jubilee Field in Ghana. The FPSO, named Kwame Nkrumah, is currently being constructedin the Jurong shipyard in Singapore. After completion, the FPSO will have a contractual
production and processing capacity of 120,000 barrels of oil per day and 160 mmcf of gas per
day and a storage capacity of 1.6 million barrels of oil. Construction of the FPSO is
primarily on time and on budget and is scheduled to leave the shipyard in May 2010 for
Ghana, with first oil expected during 4Q 2010. The economic life of the FPSO is 20 years,
during which no dry-docking is expected to be required. The FPSO will be leased if Tullow
Ghana and MODEC agree on the terms and conditions of Charter Agreement undernegotiation, with a fixed 10 year lease period and 10 x 1 year extension options to Tullow
Ghana. The FPSO will be operated by MODEC Management Services Pte Ltd., a wholly
owned subsidiary of MODEC.

Project Sponsor and Major Shareholders of Project Company:
Sponsors

MODEC is a Japanese company specialized in engineering, procurement, construction andinstallation of floating production systems. Its operations are carried out through two
divisions: (i) FPSO construction and engineering and (ii) lease, charter & operations of
FPSOs. To date, MODEC has built a total of 17 FPSOs, 10 Floating Storage and Offloading
vessels and 5 Tension Leg Platforms and is the second largest contractor in the industry
with a 15% market share. MODEC is a publicly listed company on the Tokyo Stock Exchangewith a market capitalization of US$666 million as of February 26th 2010. Its shareholders
include: Mitsui Engineering & Shipbuilding Co. (50%), Mitsui & Co. Ltd (7%) and Neuberger
Berman (5%).
The Company
The FPSO will be owned by Jubilee Ghana MV21 B.V. (the “Company”), a special purpose
company incorporated in the Netherlands. The Company’s shareholding structure iscurrently being finalized but is expected to include the following investors: MODEC,
Marubeni, IFC, Sociéte Générale, Jubilee Partners (Tullow Oil, Kosmos Energy andAnadarko Petroleum) and some other potential investors.

Total Project Cost and Amount and Nature of IFC’s Investment:

The total project cost is approximately US$875 million, to be financed by a limited recourse
long-term debt facility and shareholders’ equity.
The proposed IFC investment involves: (i) an A Loan of around US$50 million for IFC’s own
account, (ii) a syndicated B Loan in an amount of up to US$519 million for B Loan
Participants’ accounts; and (iii) equity/quasi-equity investments for IFC’s account of up to
US$60 million.

Page 2

Location of Project and Description of Site:

The FPSO will be the first one in Ghana and will be located on the Jubilee field, 60
kilometers offshore Western Ghana.

Expected Development Impact of the Project:

The FPSO is one of the essential, central elements of the Phase I development of the Jubilee
Field. The construction, installation, and operation of the FPSO will be critical to achieve
successful and timely implementation of the Jubilee project in accordance with the Jubilee
Field’s Plan of Development, which was approved by the Government of Ghana (the “GOG”)
in July 2009. As such, the Project will support the development of Ghana’s nascent oil andgas sector and help to secure the significant economic and developmental benefits to thecountry of Ghana. These benefits come primarily in the form of notable government
revenues from the Jubilee field, including royalties and taxes of approximately US$900
million per year at peak production (based on (i) Phase I production profile from proved
reserves, and (ii) other assumptions such as the prevailing oil price), providing the GOG
with the fiscal space to finance other much needed development programs.
In addition, development of the Jubilee Field also provides for development opportunities
along the energy sector value chain, such as construction of onshore gas processing facility
that will process the associated gas produced by the FPSO, development of gas distribution
infrastructure, development of gas-to-power projects, etc. Once onshore gas infrastructure isin place, the FPSO will become an integral part of the gas supply chain as envisaged by the
GOG. In addition, direct development impacts of the Project also include local employment
and training of Ghanaian nationals for the oil and gas industry. According to the Sponsor’splan, over 80% of their staff will be Ghanaian nationals in five years. Key indicators thatwill be tracked during the investment period include: (i) taxes and other payments togovernment; (ii) direct local employments of which 88% are to be Ghanaian nationals, and(iii) production of hydrocarbons; and (iv) the uptime of the FPSO operations.

IFC’s Assessment of the Governance Risks to Development Impacts:

This project will provide, production, storage and offloading services to Tullow Ghana andtherefore support the generation of benefits associated with the Jubilee Field Development,
including substantial revenues to government and the development of the energy sector anddownstream industries. The Company’s payments to the Government of Ghana consist
mainly of withholding taxes from lease revenues only. The FPSO is a facility associated with
IFC’s prior investments in Tullow and Kosmos for the development of the Jubilee Field, forwhich an assessment of governance risks was undertaken. IFC has come to the conclusion,
upon review of several governance and corruption metrics, including the World Bank
Institute’s Governance Indicators and Transparency International’s Corruption Perceptions
Index, that risks to project benefits are limited. Ghana has demonstrated commitment topromoting transparency in the extractives sector, with EITI validation expected shortly for
its mining sector, and with the announcement of extending it to the hydrocarbon sector lastyear.

IFC’s Expected Additionality:-

Provision and Mobilization of financing: The Project has experienced significant
difficulties in securing long-term debt and equity financing, mainly due to thePage 3

reduced liquidity in the financial market as a result of the 2008 financial crisis. IFC
has been requested by MODEC, the Jubilee Partners, and the GOG to support thefinancing of the Jubilee FPSO project. IFC’s proposed equity investment and A Loan
financing will help bridge the financing gap and complete the financing plan of the
Project, which has become critical in achieving first oil as envisaged by the Plan ofDevelopment. In addition, IFC will also help to mobilize commercial bank debt
through the IFC B Loan.
-

Country Risk Mitigation: There are risks associated with the fact that the upstream
oil and gas industry in Ghana is in a nascent stage. The commercial banks and
MODEC have sought IFC’s involvement to provide country risk mitigation bymobilizing the bank funding through an IFC B Loan syndication.

-

E&S Expertise: As a result of IFC’s prior investments in Tullow and Kosmos, theJubilee project will apply IFC’s Performance Standards, as well as IFC Offshore Oil& Gas Guidelines. Through this proposed financing, IFC will work directly with
MODEC as the FPSO operator, and assist the latter in operationalizing a bestpractice Environment, Health and Safety and Social Management System, which willin turn implement the already established oil spill and emergency response plans.

Environmental and Social Issues B – Limited:

This is a Category B project according to IFC’s Environmental and Social Review Procedures,
because a limited number of specific environmental and social impacts may result that can
be avoided or mitigated by adhering to generally recognized performance standards,
guidelines, or design criteria. The key issues identified during appraisal of the project, anddescribed in detail in the Environmental and Social Review Summary, were:
-

-

-

-

Implementation of the sponsor’s integrated health, safety and environment (HSE)management system at project level during construction and operation of the FPSO,
and integration with the management system of the Jubilee Field Unit Operator;
Implementation of the FPSO hull integrity and safety measures, including
operations, maintenance and inspection;
Management of production water, bilge water, deck drainage water, ballast water,and hydrostatic testing water;
Implementation of the emergency response plan, including oil spill preparedness andresponse measures;
Compliance with IFC and the International Convention for the Prevention of
Pollution from Ships (“MARPOL”) requirements for the management of air emissions(particularly related to minimization of flaring and venting, and greenhouse gas
emissions), produced water, other wastewater and contaminated waters, andhazardous materials and wastes;
Occupational health and safety management during operation of the FPSO,
including job hazard analyses, fire and explosion prevention and control, personnel
transfer and vessels, workplace air quality, and housekeeping; andLabor and working conditions for MODEC’s Ghana operations.

Page 4For inquiries and comments about the project contact:
Mr. Hideo Miyashita
Deputy Director
General Manager, Asset Management Dept.
MODEC Inc.
Kasumigaseki Common Gate West Tower
25th Floor, 2-1, Kasumigaseki 3-chome
Chiyoda-ku, Tokyo 100-0013
Japan
Telephone: +81 3 6203 0270

Local access of project documentation:

Mr Craig Duthie
Region Manager West Africa and Country Manager Ghana
MODEC Ghana Ltd.
No 22 Angola Road
Casa Maria Osu Kuku Hill
Accra, Ghana
Telephone: +223 2178 3616

For inquiries and comments about IFC
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384

ENVIRONMENTAL AND SOCIAL REVIEW SUMMARY
Overview of IFC's scope of review:

IFC’s review of this project consisted of appraising technical, environmental and social
information submitted by the project sponsor (MODEC Inc. or “MODEC”), including areview of the:- Corporate Health, Safety, Environmental (“HSE”) Policy, HSE Standards and HSE
Management System,- Contractor HSE Performance Requirements,- Project HSE Plan and implementation procedures, developed for the construction phase of
the floating, production, storage, and offloading system (the “FPSO”) for the Jubilee Field,- Development of the Worksite Management System for the FPSO operations phase,- Technical specifications and other information relevant to the design of the FPSO, withspecific focus on the pollution prevention and control measures, the environmental risk
reduction and mitigation measures and the occupational health and safety protection
measures, and- Corporate and project human resources management policies and procedures.
In addition, IFC has held discussions with MODEC’s corporate HSE management in
Houston, and MODEC’s Jubilee FPSO Project team and Jubilee FPSO Operations team inTokyo and Singapore, and visited the FPSO, which is currently under construction at theJurong Shipyard in Singapore.
MODEC is a general contractor specializing in engineering, procurement, construction,
installation and operation of floating production systems including FPSO vessels, floatingstorage and offloading (“FSO”) vessels, and tension leg platforms. MODEC constructed 23
FPSO/FSO units currently in operations worldwide, out of which 13 units are also operatedby MODEC. In addition to the Jubilee FPSO, there are currently four other projects underconstruction by the contractor.
Beginning in October 2008, IFC extensively reviewed the environmental, health, safety andsocial assessments, and the policies, procedures and management plans, prepared by Tullow
Oil plc (“Tullow”), the Jubilee Field Unit Operator, and Kosmos Energy Ghana HC(“Kosmos”), its partner, for the Jubilee Field in Ghana. IFC’s due diligence for this project,
therefore, has benefited from relevant information on the Ghana Jubilee Field Phase 1
Development project that was obtained during the appraisal and subsequent supervision of
IFC’s investments in these two companies (Project # 27918 and Project # 27550). IFC
Environmental and Social Review Summaries (“ESRS”) for the investments in Kosmos(“Kosmos ESRS”) and Tullow (‘Tullow ESRS”) and supporting documentation were publicly
disclosed on December 22, 2008 and January 16, 2009, respectively and are available at:
http://www.ifc.org/ifcext/spiwebsite1.nsf/2bc34f011b50ff6e85256a550073ff1c/ca79f006df948f97852576ba000e2e0b?opendocument
http://www.ifc.org/ifcext/spiwebsite1.nsf/2bc34f011b50ff6e85256a550073ff1c/b1503fd9ab4d70
12852576ba000e2dd9?opendocument

Page 2A link to the final Environmental Impact Statement (“EIS”) for the Phase 1 Development of
the Jubilee Field is provided under the Tullow ESRS.
*** This ESRS is for IFC's financing purposes with respect to MODEC’s involvement in the
project, and does not replace/encompass Ghana’s Environmental Protection Agency (“EPA”)
local processes. A separate EIS has been prepared under Ghana EPA and, as noted above,
has been disclosed by Tullow for the Phase 1 Development project. ***Project Description:

The project is to finance, build, operate, and lease the FPSO for the Phase 1 Development of
the Jubilee Field in Ghana. The FPSO is currently being converted by MODEC at theJurong shipyard in Singapore. Once completed, the FPSO will be leased if Tullow Ghana(the Unit Operator of the Jubilee Field) and MODEC agree on the terms and conditions of
the Charter Agreement under negotiation. Tullow Ghana will have the right to purchase
the FPSO or terminate the Charter Agreement, subject to payment of an early termination
fee. Performance of the FPSO under the Charter Agreement is guaranteed by MODEC. A
separate operations and maintenance (“O&M”) contract will be put in place with MODEC’s
100% subsidiary MODEC Ghana Ltd (the FPSO Operator), which will mirror the O&M
obligations under the Charter Agreement.
The Jubilee FPSO is a converted, external turret-moored FPSO, which will be connected toclustered subsea production wells. The FPSO is based on a conversion of an existing singlehulled, 330 m long and 60 m wide Very Large Crude Carrier (VLCC) “Ohdoh” (ex “Tohdoh”),
which was built in 1991 at the Mitsui Shipbuilding Chiba yard in Chiba, Japan and wasbought by MODEC in 2008. After conversion, the FPSO will have a contractual processing
capacity of up to 160,000 barrels of total fluid per day (i.e., 120,000 barrels of oil and up to a
maximum of 80,000 barrels of produced water) and 160 million cubic feet of gas per day, awater injection capacity of 232,000 barrels of water (desulphonated seawater) per day and astorage capacity of 1,600,000 barrels of oil. The economic life after conversion of the FPSO
will be at least 20 years, during which no dry-docking will be required. The vessel has beenrenamed FPSO Kwame Nkrumah MV21.

Identified applicable performance standards:

While all Performance Standards (“PS”) are applicable to this investment, IFC’s
environmental and social due diligence indicates that the investment will have impacts thatmust be managed in a manner consistent with the following Performance Standards:- PS 1: Social and Environmental Assessment and Management Systems;- PS 2: Labor and Working Conditions;- PS 3: Pollution Prevention and Abatement; and- PS 4: Community Health, Safety and Security.
Onshore facilities of MODEC Ghana will be limited to an office space and a logisticalsupport base in an existing area of Takoradi harbor. No additional land will be acquired,
and, therefore, PS 5: Land Acquisition and Involuntary Resettlement does not apply.
Aspects of PS 6: Biodiversity Conservation and Sustainable Natural Resource Management
are relevant to and need to be managed by the Jubilee Phase 1 Development Project andthey are discussed under the Tullow and Kosmos ESRS’s. As defined by PS 7: IndigenousPage 3People, there are no indigenous people living near the Project. PS 8: Cultural Heritage does
not apply because of the already-noted limited shore-based impact.

E&S Categorization Rationale:

Consistent with the categorization assigned to both Tullow and Kosmos projects for thePhase 1 Development of the Jubilee Field, the FPSO project, which is a component of thesame field development, is a Category B project according to IFC’s Environmental and Social
Review Procedures, because a limited number of specific environmental and social impacts
may result that can be avoided or mitigated by adhering to generally recognizedperformance standards, guidelines, or design criteria. The key issues identified duringappraisal of the project, and described in detail in this Environmental and Social Review
Summary, were:- Implementation of the sponsor’s integrated HSE management system at project level
during construction and operation of the FPSO, and integration with the Unit Operator
management system;- Implementation of the FPSO hull integrity and safety measures, including operations,maintenance and inspection;- Management of production water, bilge water, deck drainage water, ballast water, andhydrostatic testing water;- Implementation of the emergency response plan, including oil spill preparedness andresponse measures;- Compliance with IFC and the International Convention for the Prevention of Pollution
from Ships (“MARPOL”) requirements for the management of air emissions (particularly
related to minimization of flaring and venting, and greenhouse gas emissions), produced
water, other wastewater and contaminated waters, and hazardous materials and wastes;- Occupational health and safety management during operation of the FPSO, including job
hazard analyses, fire and explosion prevention and control, personnel transfer and vessels,
workplace air quality, and housekeeping; and- Labor and working conditions for MODEC’s Ghana operations.
The FPSO will be located at the northern edge of the Jubilee field in approximately 1,100m
of water, approximately 60 km from the nearest point on the coast with Ghana. The locationof the FPSO will mean that impacts from production waste will be limited, and any healthand safety issues can be readily handled using well-known procedures and engineering
technology. Since mitigation measures for the identified impacts can be readily defined,
adverse impacts are not expected to be diverse or irreversible, and they will be limited to theproject area.

Description of key Enviornmental and Social Issues and Mitigation:

The Unincorporated Joint Venture (“UJV”) for the Phase 1 Development of the Jubilee Field
has presented plans to address the identified impacts for the Phase 1 Development, as
discussed in the Tullow and Kosmos ESRS’s. These plans, including Contractor HSE
Performance Requirements and the FPSO technical specifications, and the MODEC
corporate and project HSE management systems will ensure that the proposed project,which is a component of the Phase 1 Development project, will, upon the implementation of
the specific agreed measures, comply with the environmental and social requirements: 1) the
host country laws and regulations, 2) the international treaties and industry standards, 3)

Page 4

the IFC environment and social Performance Standards and 4) the applicable and relevant
IFC environmental, health and safety guidelines. The information about how the potential
impacts will be addressed by the Project is summarized in the paragraphs that follow. The
sponsor has developed and agreed to implement the attached Environmental and Social
Action Plan (“ESAP”) to address the gaps in its current environmental and social assessmentand management system, applicable to the proposed project, and to meet the requirementsof the applicable IFC’s Performance Standards and identified aspects of the relevant andapplicable EHS Guidelines.
PS 1: Social and Environmental Assessment and Management Systems
Assessment. Under the Ghana Environmental Assessment Regulations LI 1652 1999,
Tullow and partners were required to submit an Environmental Impact Statement (“EIS”)
for the Jubilee field to the Ghana EPA. The final EIS was submitted in November 2009.
FPSO installation, commissioning and operation (i.e., production, hydrocarbon processing,crude oil offloading, and support and maintenance activities) are activities included in the
Phase 1 Development project. On December 31, 2009 the EPA issued an environmental
permit allowing the installation of equipment and commissioning of the Jubilee Field Phase
1 Development project. The EPA will issue a separate permit for the operations phase of thePhase 1 Development, subject to the submission of additional information prescribed under
the permit schedule. It is a responsibility of Tullow Ghana, the Unit Operator, to meet the
EPA’s requirements to obtain the permit for the operations phase. MODEC and its
subsidiary MODEC Ghana will follow the relevant Contractor HSE Performance
Requirements defined by the Phase 1 Development project, and therefore will meet therelevant requirements of the Ghana EPA permits.
Management Program. The sponsor has a Corporate HSE Management System (“HSE MS”)
that is accredited to ISO 14001 and OHSAS 18001. The management system is fully
developed and is currently being implemented throughout MODEC facilities and operations
worldwide. The HSE MS follows a structured hierarchical approach to managing HSE risks,
according to the following levels: Tier 1: HSE Policy; Tier 2: HSE Standards; Tier 3A:
Corporate Management System, comprising procedures and processes outlining activities for
managing HSE, which are applicable across all Sponsor’s operations; and Tier 3B: Worksite
Management System, outlining processes and activities to manage HSE aspects for either a
project or a facility (including an FPSO). This is consistent with the HSE performancerequirements of the Phase 1 Development project, requiring MODEC to develop andimplement an HSE management system specific to Jubilee FPSO.
A Project HSE Plan was developed at the beginning of the construction phase in late 2008,
and has been implemented during the execution of the project. The plan constitutes theprime element of the HSE MS for the Jubilee FPSO (vessel, topsides and external turret)
project and defines the sponsor’s strategy, systems, and responsibilities for the project
during engineering, procurement, construction, integration, and pre-commissioning.
Separate plans will be developed for the transit voyage from the shipyard to the Ghana
offshore location and for the offshore installation hook-up and commissioning activities. A
worksite HSE MS for the Jubilee FPSO operation phase is currently under development andwill comply with IFC Performance Standards. The system under development includes amanagement of change standard ensuring that all changes in design, operations, risk
management, project organization and personnel, and legislation are taken into
consideration. MODEC HSE MS includes relevant methods to prequalify, monitor andPage 5

evaluate the HSE performance of its suppliers and subcontractors, and these methods will
be consistently applied for the management of all suppliers and subcontractors involved in
Ghana operation. MODEC will periodically review its Jubilee FPSO HSE MS – at least oncea year but possibly more often during early stages – to determine whether changes in the
HSE management need to be undertaken. Interface documents with the Tullow Ghana EHS
management system and MODEC HSE management system are under development andwill be available prior to operations.
Organization and Training. The overall responsibility for the implementation of the HSE
MS and for compliance with relevant and applicable laws and standards for the Jubilee
FPSO operations will stay with MODEC’s West Africa Operations Manager. MODEC isdeveloping a staffing and training plan, with appropriate job descriptions, to ensure theongoing management of the project according to the HSE MS. MODEC will ensure that all
offshore and onshore staff - and its subcontractors involved in the Jubilee FPSO operations understand the basic environmental and social policies, procedures and actions of the project.
PS 2: Labor and Working Conditions
Working Conditions.
Since late 2008, MODEC has prepared and started theimplementation of a Ghana Local Content Plan. The sponsor plans to hire Ghanaian
nationals for the majority of onshore staff and a certain number of offshore positions. A
preliminary local hiring plan indicates approximately 85 staff will be hired by MODEC in
Ghana operations, out of which 88 percent are expected to be nationals after five years.
MODEC has global human resources guidelines and policies, which commit to comply withall regulatory and local laws. MODEC will finalize a human resources policy for Ghana thatwill recognize the rights of workers under Ghanaian law, including hours of work, overtime
arrangements and compensation, policies on leave, principles of equal opportunities andnon-discrimination, and rights to work organization and collective bargaining. The humanresources policy will also spell out a worker grievance mechanism that will be accessible,
transparent and prompt. Subcontractor management procedures will include a review ofsubcontractor’s compliance with labor laws.
Worker Health and Safety. The project has developed health and safety policies andprocedures for the construction, commissioning and operation phase. The main procedures
will be based on the relevant plans developed at corporate level, i.e., Management of Safety,
Management of Occupational Health, and Occupational Health and Safety Operation
Performance Criteria. The health and safety policies and procedures are designed to ensurethat MODEC will include appropriate use of personal protective equipment for different
areas of operation, identification of hazards and measures to reduce potential injuries toworkers, labeling of different materials according to their hazards, training of workers,
documentation and analysis of incidents and accidents, and implementation of an emergency
response plan to protect workers, as required by PS 2. An Emergency Response Plan and a
Crisis Management Procedure will be developed for the FPSO operation. They will present
the emergency response and crisis management arrangements and organization for MODEC
operations in Ghana. Provisions for escape, temporary refuge, evacuation and rescue havebeen developed for the Jubilee FPSO, based on the formal safety assessment required by
MODEC. The permit-to-work system (which includes a task risk assessment) is extensively
used by MODEC in all its operations and has been adopted for the Jubilee project, since theconstruction phase. The project is consistently implementing the corporate standard on
incident notification, investigation and reporting, in accordance to industry standards

Page 6(International Association of Oil and Gas Producers). Since the beginning of construction,
project occupational health and safety performance has been tracked, analyzed and reported
in a consistent and thorough way, including performance of MODEC staff and contractors,
through a set of leading indicators, lagging indicators, loss time injury frequencies and total
recordable incident rates. Training, competency assessment, audits and drills are planned
and will be consistently implemented. MODEC will develop a workplace monitoring plan for
its Ghana operations.
PS 3: Pollution Prevention and Abatement
Atmospheric Emissions and Noise: The Jubilee FPSO has been designed and will be
operated to meet the applicable and relevant requirements of the Jubilee Field Phase 1
Development project for both atmospheric emissions and noise. Project activities during
FPSO installation, commissioning and production operations will emit varying amounts of
air pollutants, including carbon monoxide (CO), oxides of nitrogen (NOx) and sulfur (SOx),
volatile organic compounds (VOCs), and particulate matter. The main emission point
sources of the Jubilee FPSO are the three power generation units, consisting of dual fuelturbine driven electrical generators with a capacity of 28.6 MWe each. As discussed in the
Jubilee Field EIS, dilution and dispersion of the relatively limited amount of air pollutant
emissions from the FPSO are expected to be rapid and the potential effects on ambient air
quality to be limited to a short distance from the emission sources. Thus, no detectableeffects on ambient air quality onshore in Ghana and Côte d’Ivoire are expected considering
the distance from shore, and the UJV for the Jubilee Field Phase 1 Development project will
demonstrate that the emission levels from the turbines are protective of human health andthe environment. The UJV has committed to ensure that offshore facilities and support
vessels will comply with the requirements of MARPOL Annex VI (relevant to sulfur oxide
and nitrogen oxide emissions from ship exhausts and diesel engines, prohibition ofdeliberate emissions of ozone-depleting substances, and prohibition of the incineration ofcertain products on board) and their management will be consistent with relevant IFC
guidelines. The UJV has also committed to minimize venting and flaring (consistent with
the Global Gas Flaring and Venting Reduction Voluntary Standard) and minimize fugitive
emissions. A vapor recovery unit was installed in the FPSO and will collect the vapors fromTEG (tri-ethylene glycol) dehydration reboiler unit of the gas treatment system, mitigating
the venting of aromatic hydrocarbons. No continuous flaring or venting of hydrocarbon
gases will be allowed. The UJV for the Jubilee Field Phase 1 Development has established adesign and operational target for abnormal flaring during operations that will not exceed 2.5
percent of the monthly average total produced gas. The volume of gas flared will be
continuously metered.
MODEC will implement routine inspection and maintenance of engines, generators, andother equipment, noise and air emissions monitoring and use of low-sulfur diesel fuel, as
required under the contract with the Jubilee Field Phase 1 Development project.
Greenhouse Gas Emissions: According to the Plan of Development for the Phase 1
Development of the Jubilee Field all associated gas (net after fuel use on the FPSO) will be
re-injected into the formation for future recovery and use. Therefore, the FPSO is designed
to have the capacity to handle and re-inject 100% of associated gas volumes – up to 160
millions of standard cubic feet per day (MMscfd) - to the field through two gas injection wells,
and hence to avoid excess flaring during production operations at all times. Flaring will bereserved during initial FPSO commissioning, and during operations only in case of

Page 7

emergency shutdown events to ensure the safety of the facility. Greenhouse gas emissions(“GHG”) will be generated from engines, burner fuel consumption, and fugitive emissions ofassociated gas. The Jubilee Field EIS estimated the total GHG emissions during the
installation of the FPSO to be approximately 75,000 tons of CO2-equivalent. The annual
GHG emission during production operations was estimated at approximately 150,000 tons
CO2-equivalent per year. As required by PS 3 for projects with GHG emissions greater than
100,000 tons CO2-equivalent per year, MODEC will maintain a monitoring program for
GHG emissions from its activities, and will establish programs to minimize the emissions,based on the monitoring data.
Waste: Waste streams associated with Jubilee FPSO activities will include hydrotest water,
produced water, cooling water, gray water and sewage, bilge water, deck drainage, ballast
water, cooling water, and solid waste. Hydrostatic testing water discharge will be reduced,
by implementing an extensive pre-commissioning and commissioning testing of the FPSO
equipment at the conversion yard in Singapore. Hydrostatic testing of equipment and lines
offshore will involve pressure testing typically with filtered seawater to verify equipment
and pipeline integrity. For the testing that will remain to be conducted offshore Ghana,
MODEC will develop hydrotesting procedures, consistent with the relevant requirements in
the Phase 1 Development Hydrotesting Plan.
Produced water will include formation water, injection water, and process water. Produced
water is likely to be the largest effluent discharge during production. It is anticipated thatquantities will be low during initial production, but may increase as the Jubilee field
matures. The design throughput capacity of the FPSO is for handling up to 160,000 barrels
of total fluid (i.e., oil and produced water), out of which a maximum of 80,000 barrels of
produced water per day can be processed. Produced water will be treated through oil water
separation to meet IFC guidelines (oil and grease not to exceed 42 mg/L daily maximum or
29 mg/L monthly average) before being discharged overboard. A produced water discharge
sampling point has been installed in the FPSO and relevant procedures will be developed tomonitor compliance with the IFC guidelines.
Only limited non-contact cooling water will be discharged into the marine environment.
Tanker vetting procedures will be responsibility of the Jubilee Field Unit Operator. The
FPSO has separate ballast water tanks that will only allow for routine discharge of clean
ballast water, conducted in accordance with the Operation Manual for Ballast System.
Sewage will be treated using marine sanitation devices that will produce an effluent with aminimum residual chlorine concentration of 1.0 mg/L and no visible floating solids or oil andgrease. Treatment sludge will be transported to shore for disposal at an approved facility.
Food waste will be ground prior to discharge, in accordance with MARPOL requirements.
The FPSO includes design features that will contain runoff and prevent oily drainage frombeing discharged: potentially contaminated deck drainage, collected by an open drain system,
is diverted to oil-water separation systems. The FPSO is designed to only allow for dischargeof water meeting the criteria of 42 mg/L and 29 mg/L oil, daily maximum and monthly
averages respectively. It will also not allow the discharge of free oil in deck drainage thatwould cause a film, sheen, or discoloration of the surface of the water, or a sludge or
emulsion to be deposited beneath the surface of the water. The drain system on theprocessing deck will include a closed drain system, collecting oily fluids, which will be sent toa cargo tank.
All solid waste generated aboard will be managed according to a Waste Management PlanPage 8developed for the Jubilee FPSO, in compliance with the requirement of Annex V, Regulation
9 of MARPOL 73/78, and integrated with instructions designed to manage all shipboard
wastes. As needed, waste will be transported to shore by service vessels for disposal atapproved facilities, in accordance with the provisions of Tullow Waste Management Plan.
Disposal of trash and debris in the ocean will be prohibited consistent with MARPOL
requirements. MODEC will develop a chemicals and process material safety procedure tohandle all hazardous chemicals that are produced, used, or stored aboard the FPSO,
ensuring therefore consistency with IFC guidelines. Transportation of hazardous materials
will comply with United Nations regulations and specific training will be provided to all
personnel.
Emergency Preparedness and Response: In accordance with industry practice, the FPSO
has been designed for the site-specific worst environmental conditions that could be
experienced at the Jubilee Field in a return period of 100 years. The weather conditions in
the Gulf of Guinea are relatively benign and model tests have shown the predicted vessel
motions to be less than those of similar FPSO systems elsewhere in the world. The FPSO
hull integrity and safety measures adopted are in accordance with industry practice andinclude planning, design, construction, and operation measures. MODEC will have in place
all necessary best practice safety measures to minimize risks. The project employs
American Bureau of Shipping (“ABS”) as its hull verification agent which has oversight overthe hull conversion to ensure guidelines are met and that the conversion is suited to the
Ghanaian sea conditions for up to 20 years without need to re-enter dry-dock. The project isputting in place the capability to do the required hull inspection in situ externally, and will
also have access to hull tanks internally. A Jubilee Operations Safety Case was
implemented, covering the design through to the operations of the FPSO. The Safety Casedemonstrated that (i) the hazards have been identified and evaluated; (ii) risks from major
accident hazards have been reduced to as low as reasonably practical (“ALARP”), and (iii)the management systems developed and in place for the Jubilee operations are capable tosystematically and continually identifying and assessing hazards, and eliminating or
minimizing the risks to personnel, as far as reasonably practicable. Several HSE studies
were conducted, including fire risk analysis, explosion risk analysis, and a third party
quantitative risk assessment of collision hazards and risks from vessel traffic around the
FPSO.
A number of important mechanisms will be employed in the Phase 1 Development project tomitigate the spill risks, including, but not limited to, the collision risks: (i) turret mooring(instead of spread-mooring), (ii) crew competence, (iii) collision avoidance and warning
systems, including communication and navigation aids meeting the requirements of theInternational Convention for the Safety of Life at Sea (“SOLAS”), (iv) double jeopardy tugs,(v) independent vetting agency for tankers, (vi) a 1,000 meter radius exclusion zone and anadvisory zone of 10 km radius (marked on nautical charts), (vii) weather/sea limits ofoperation, (viii) pneumatic rubber fenders installed to protect cargo tanks and absorb
potential supply boat impacts, (ix) use of FPSO wing tanks as ballast tanks, slop tanks andvoid tanks in areas where supply boat operations will be conducted, (x) corrosion
prevention/inspection (including corrosion modeling for steal renewals, coating protection,
cathodic protection and use of sacrificial anodes in all cargo and ballast tanks for protection
from corrosion), and a number of other measures. Further, the FPSO will comply with all
relevant and applicable MARPOL requirements and will be ABS-classed and follow
applicable ABS rules and guidelines. FPSO inspection/survey will be carried out as per ABS
requirements and such surveys will be managed under MODEC computerized maintenancePage 9management system.
As discussed in the Tullow and Kosmos ESRS, the Phase I Development project will install
downhole safety devices - surface-controlled subsurface safety valves (“SCSSVs”) - at eachwell, which will be controlled by subsea and FPSO safety control systems. These systems
will shut the valve in the event of an emergency or operational upset in the well or process.
Specific requirements, providing for controls for all vessels activities and based oninternational guidance, including the International Safety Guide for Oil Tankers andTerminals, will be developed to govern all crude oil transfers from the FPSO to export
tankers.
As required under the Corporate HSE Standard 10 on Crisis and Emergency Management,
MODEC will develop and implement Operations Phase Emergency Response Procedures, aField Response Plan, and a Shipboard Oil Pollution Emergency Plan to respond to
emergencies. The number of environmental incidents reported for sponsor’s worldwide
operations yearly is low, as shown in the corporate-wide incident register, which combines
the registers maintained at all facilities operated (FPSOs, other vessels, offices and otherfacilities). MODEC conducts extensive environmental investigation and analysis forenvironmental (and non-environmental) incidents, including minor spills below 1 liter
volume, and consistently identifies corrective actions to prevent recurrence. Emergency
plans and procedures for the Jubilee FPSO will be integrated in the Tullow Ghana’s
Emergency Response Plan and Oil Spill Contingency Plan. Please refer to the Tullow andKosmos ESRS for a discussion of the relevant studies and mitigations.
PS 4: Community Health, Safety and Security
Safety and Security. The Phase 1 Development will have a 1000 m radius exclusion zone
around the FPSO and a 10 km radius advisory zone. The advisory zone will be marked on
nautical charts to ensure that the presence of an oil production area is known to othermariners. Non-essential users will receive proper information if they enter the advisory area
and a recommendation not to enter in the zone, although entrance will not be excluded.
Management of community (including fishing communities) health, safety, and security
issues are responsibility of Tullow, as the Jubilee Field Unit Operator. Please refer to the
Tullow ESRS for details. MODEC will develop and implement a Ship Security Plan, in
accordance with relevant international standards, including Chapter XI-2 of SOLAS and theInternational Ship and Port Security Code, Part A and Part B, as relevant. The plan willassist the Security Officer of Tullow, the Master, the Ship Security Officer and the crew toensure the safety and security of the vessel, cargo and crew, and will be integrated in therelevant plans and procedures developed by the Phase 1 Development.

Client Community Engagement:

The responsibility to develop and implement a Public Consultation and Disclosure Plan
through the several phases of the Phase 1 Development project stays with Tullow Ghana, as
Unit Operator of the Jubilee Field. Interactions between communities and contractors will
be managed according to the local regulatory requirements and according to the mandated
requirements of the service contracts with Tullow Ghana. MODEC will submit relevant
reporting and provide relevant information, including performance measures and objective
evidence of functioning HSE MS, to Tullow as per contractual requirements.

Page 10

Local access of project documentation:

Project documents will be available at the following addresses:
Cy X. Sharp
Director, Global HSE Affairs
MODEC International Inc
14741 Yorktown Plaza Drive
Houston, Texas 77040
Phone: +1 281.529.8265
E-mail: Cy.Sharp@modec.com
Craig Duthie
Region Manager West Africa and Country Manager Ghana
MODEC Ghana, Ltd.
Address: No. 22 Angola Road Casa Maria Osu Kuku Hill
Accra
Phone::+223 2178 3616
Website: http://www.modec.com/

Item

ENVIRONMENTAL AND SOCIAL ACTION PLAN
MODEC - Jubilee Ghana MV 21
March 9, 2010
Completion Indicator

ActionTimetable

PS1: Social and Environmental Assessment and Management Systems
1

MODEC will have a Jubilee FPSO Health, Safety
and Environment Management System (HSE MS)
consistent with ISO 14001 and OHSAS 18001 andwith the applicable IFC Performance Standards.

(a) The Project has developed the HSE Plan for the installation
hook up and commissioning phase and submitted it to IFC.

(a) Before installation hook up andcommissioning.

(b) The Project has developed the HSE MS for production
operations and submitted it to IFC.

(b) Two months before operations.

(c) The Project has established and implemented an HSE MS
audit program, acceptable to IFC.

(c) Two months before operations(d) Three months after end of eachcalendar year.

(d) The Project has submitted copy of the audit program reports.
2

MODEC will develop a staffing and training planand ensure that all offshore and onshore staff and its subcontractors involved in the Jubilee
FPSO operations - understand the projectenvironmental and social policies and procedures.

The Project has provided evidence of training and developed a
specific training procedure to be included in the Project trainingplan.

One month before operations.

PS2: Labor and Working Conditions
3

MODEC will have a Human Resources Policy for
its Ghana operations that communicates toworkers their rights under Ghanaian law and spells
out terms of employment, including equal
opportunity principles, benefits, and leave policies.

The Project has developed and submitted the policy acceptable
to IFC.

June 2010.

4

MODEC will include a review of subcontractor’scompliance with labor laws in its subcontractor
management procedures for Ghana operations

The Project has developed and submitted the review procedure
acceptable to IFC.

June 2010

Item

ActionENVIRONMENTAL AND SOCIAL ACTION PLAN
MODEC - Jubilee Ghana MV 21
March 9, 2010
Completion Indicator

Timetable

PS3: Pollution Prevention and Abatement
5

MODEC will maintain a monitoring program forgreenhouse gases (GHG) for the Jubilee FPSO
Project.

Periodic reporting of GHG emissions for the Jubilee FPSO
production operations.

Three months after end of eachcalendar year.