premier oil plc    2012 annual report and financial statements
annual report and financial statements
year to 31 december 2012
wwwpremieroilcom
premier oil plc
23 lower belgrave street
london sw1w 0nr
telephone 44 020 7730 1111
facsimile 44 020 7730 4696
growing value a growth business with
worldclass capability 
sound financial discipline
and focus on creating
underlying value premier oil plc 2012 annual report and financial statements   01
section 1 directors’ report performance
02 financial highlights
03 operational highlights
04 where we operate
05 operational overview
06 chairman’s statement
08 chief executive’s review
10 business review
24 financial review
29 key performance indicators
31 corporate responsibility report
section 2 directors’ report governance
40 board of directors
42 corporate governance report
48 audit and risk committee report
51 company risk factors
54 nomination committee report
55 report of the directors
58 remuneration report
80 statement of directors’ responsibilities
81 accounting policies
section 3 financial statements
88 independent auditor’s report – group
89 consolidated income statement
90 consolidated statement of comprehensive income
91 consolidated balance sheet
92 consolidated statement of changes in equity
93 consolidated cash flow statement
94 notes to the consolidated financial statements
122 independent auditor’s report – company
123 company financial statements
124 notes to the company financial statements
section 4 additional information
133 five year summary
134 oil and gas reserves
135 worldwide licence interests
138 shareholder information
139 glossary
140 contacts
directors’ report performance
premier is a leading ftse 250 independent
upstream oil and gas company our strategy is
to focus on growing the underlying value of the
business through disciplined investment in high
quality projects where we see the potential for
attractive returns to shareholders 02   premier oil plc 2012 annual report and financial statements
financial highlights
total sales reached a new record level of
us14 billion and profit after tax is a record
us2520 million
577
404
08 09 10 11 12
0
10
20
30
40
50
60
production
2008 – 2012
kboepd
773
513
08 09 10 11 12
proven and probable reserves
contingent resources
0
100
200
300
400
500
600
700
800
reserves and resources
2008 – 2012
mmboe
8082
4859
08 09 10 11 12
300
400
500
600
700
800
900
operating cash flow
2008 – 2012
 million
2520
1712
08 09 10 11 12
80
120
160
200
240
280
profit after tax
2008 – 2012
 million
financial 
 for the fifth successive year record profit after tax of us2520 million 2011 us1712 million
an increase of 47 per cent 
 operating cash flow of us8082 million 2011 us4859 million an increase of 66 per cent
 subject to shareholder approval initial dividend payment of 5 pence per share 2011 nil reflecting
confidence in strong rising cash flows
 yearend net debt of us11104 million 2011 us7440 million with stable gearing of 36 per cent
2011 36 per cent
 cash and undrawn facilities including letters of credit of us11 billion 2011 us11 billion with
extended debt maturities premier oil plc 2012 annual report and financial statements   03
operational highlights
successful entry into the falkland islands
added approximately 230 million barrels
of net contingent resources at a low upfront
cost and significantly extends premier’s future
production profile
operational 
 2012 production of 577 kboepd 2011 404 kboepd an increase of 43 per cent huntington field
expected onstream at the end of march 2013
 reserves and resources increased to 773 mmboe 2011 513 mmboe an increase of 51 per cent

four development projects – solan pelikan naga and dua – achieved final approvals in 2012 on track
for first oilgas in 2014
 significant progress made on the operated catcher field with the development concept formally agreed
in december and key contract negotiations under way

successful entry into the falkland islands sea lion development planning progressing to midyear 2013
concept selection
 playopening acreage added in vietnam the falkland islands and iraq group prospective resources
now in excess of 25 bnboe 2011 16 bnboe
outlook 
 2013 production guidance of 6570 kboepd reaffirmed run rate of 75 kboepd once huntington and
rochelle onstream
 key project milestones expected in 2013 including completion of the first phase of solan development
drilling final sanction of the catcher project and concept selection for the sea lion project

15 firm exploration and appraisal wells planned for 2013 five high impact wells targeting in excess of
150 mmboe including luno ii spudded matang and bonneville well results expected imminently
 maturing playopening prospects in kenya norway the falkland islands and iraq for 201415 drilling 04   premier oil plc 2012 annual report and financial statements
where we operate
strong business units

premier is organised into six country units with the exploration teams
reporting directly to a central exploration function in total we
manage a growing reserve and resource base in excess of 700 mmboe
indonesia
norway
active exploration
vietnam
optimising chim sáo
production
pakistan
infield development successes
falkland islands
building development capability
kenya
exploration
uk
strong production
growth

2013 production
guidance of
6570 kboepd
reaffirmed
united kingdom  norway  indonesia  
vietnam  pakistan  falkland islands
indonesia
building on strong share
of singapore gas market
vietnam
united
kingdom
mauritania
iraq
exploration
pakistan
norway
egypt
exploration neil hawkings
operations director
robin allan
director business units
andrew lodge
exploration director
premier oil plc 2012 annual report and financial statements   05
operational overview
2012 rising cash flows and
new investment opportunities
production
strategy 
we seek to maximise value from our
current production base which is
focused around floating production
systems and our asia gas position to
generate cash flows for reinvestment
in high return opportunities
outlook 
 2013 production guidance
of 6570 kboepd reaffirmed
 run rate of 75 kboepd once
huntington and rochelle
onstream
 mediumterm production target
of 100 kboepd underpinned by
the catcher project
development
strategy 
we aim to replenish our development
portfolio with good quality projects
through new acquisitions andor
successful exploration we focus on
projects where we can utilise our
strong operatorship and fpso
development capabilities
outlook 
 huntington and rochelle
expected onstream in 2013
 key project milestones in 2013
including final sanction of the
catcher project and concept
selection for the sea lion project
 four operated projects
dua pelikan naga and solan
on track for first oilgas in 2014
exploration
strategy 
premier is building an increasingly
material exploration programme
targeting known geologies – rifts
or frontal fold belts – in existing or
new areas focusing on high impact
prospects and playopening
opportunities with significant
followon potential
outlook 
 15 firm exploration and
appraisal wells planned
for 2013 five high impact
wells targeting in excess
of 150 mmboe
 maturing playopening
prospects in kenya norway
falkland islands and iraq
for 20142015 drilling 06   premier oil plc 2012 annual report and financial statements
chairman’s statement
this strong operational
and financial performance
supports continuing
investment in new
opportunities an increasingly
material exploration programme
and the initiation of a dividend
payout for the year”
“
mike welton
chairman the industry context
2012 was a year of difficult macroeconomic conditions and depressed capital markets the
energy industry however has performed strongly and continues to present opportunities for
growth signs of recovery in western economies and world financial markets are at an early
stage but it is encouraging to start 2013 on a stronger note commodity prices have
remained remarkably stable providing a healthy backdrop for continuing investment and
new opportunities although costs are rising in some areas good projects are still earning
attractive rates of return
premier’s performance
premier has again achieved strong growth in the value of the underlying assets of the
business in 2012 we increased production by 43 per cent cash flow by 66 per cent and
report record profitability for a fifth successive year reserves and resources now amount to
773 million barrels of oil equivalent mmboe compared to 513 mmboe at the end of 2011
four new projects also received development approval during the course of the year while
we invested in excess of us250 million in acquisitions and us772 million in development
and exploration projects during the year balance sheet gearing remained stable at 36 per
cent and is well within our target range we continue to have good access to several
sources of debt capital both reducing our average cost of debt and extending its maturity
this strong operational and financial performance supports continuing investment in new
opportunities an increasingly material exploration programme and the initiation of a
dividend payout for the year
premier’s growth plans
building on the new fields which came onstream in indonesia and vietnam in late 2011
2012 saw a significant increase in group production 2012 average production of 577 thousand
barrels of oil equivalent per day kboepd will rise to a run rate of around 75 kboepd as two
new fields huntington and rochelle come onstream looking further ahead we have
made significant steps in progressing the solan and catcher projects which are expected
onstream in 2014 and 2016 respectively these new fields together with our existing
producing areas will underpin our mediumterm production target of 100000 boepd
we continue to invest in new project opportunities where we see the potential for attractive
returns for shareholders we are delighted to have secured the operatorship and a large
equity interest in the sea lion field in the falkland islands our project team is already
working closely with both the falkland islands and the uk governments to deliver an
approved development plan by the middle of 2014 we also look forward to our first
exploration campaign in the falkland islands which further builds up our increasingly
material drilling programme
our 2012 exploration programme delivered successes in the uk pakistan and indonesia
these are valuable additions to the portfolio due to their proximity to existing producing
assets in the uk central north sea our exploration drilling programme attempted to
replicate the successes we had in the catcher area in previous years however with the
exception of the carnaby discovery in a new play area west of the catcher development
the programme was unsuccessful this serves to underline the necessity as we grow our
production and development asset base to identify new basin opportunities for future
exploration away from the more mature areas in the north sea and south east asia our
exploration and new venture teams have done an excellent job in identifying and negotiating
entry into such opportunities offshore kenya in the north falklands basin in the phu khanh
basin in vietnam in the mandal high area in norway and in southern iraq over the course
of 2012 the team added approximately 1 billion barrels of oil equivalent bnboe of
prospective resources to the portfolio we look forward to maturing these for drilling over
the next two to three years success in any of these locations because of the nature of their
playopening potential will be transformational for premier focus of the board
as the group and its scope of operations expand the board has taken a number of initiatives
to ensure longerterm plans can be delivered successfully a comprehensive strategy review
incorporating asset profiles capital allocation and funding plans was completed in the first half
of 2012 and has been reviewed again by the board in the first quarter of 2013
significant progress has been made in the way in which risks are identified analysed and
mitigated throughout our operations reporting back to the board via the audit and risk
committee the board’s nomination committee has with the help of the senior management
team taken new initiatives in succession planning career development and competency
programmes members of the remuneration committee have held a number of meetings with
key shareholders and advisory bodies to ensure that our remuneration policies achieve an
appropriate balance between reward for our investors and incentives for our employees at the
board level we continue to devote significant time to the management of the critical issues of
health safety and the environment the group’s improving record in all of these areas is
testament to this effort however the tragic accident in december in which a crew member on
an emergency standby vessel close to our balmoral facilities lost his life in extreme weather is a
sad reminder of the need for constant vigilance and determination by all industry participants
returns to shareholders
we recognise that the upstream industry is a sector in which substantial capital growth can be
achieved by companies focused on shortterm exploration success such exploration activity
yields potentially attractive but inconsistent returns it is our objective to provide investors with
consistent growth above that of the major companies in our industry but with the potential for
higher returns through our exploration activities
premier’s share price today stands higher than at 1 january 2012 and over a fiveyear period
has significantly outperformed the ftse allshare oil and gas producers index however we
recognise that the share price has not kept pace with the growth in value of the underlying
assets of the business the onus is on the board and the executive team to deliver on our
growth plan and to demonstrate an improved return on our exploration programme so that a
higher market rating will be achieved
the board has also considered again our policy in respect of shareholder distribution as
foreshadowed at the annual general meeting in may 2012 the board intends to propose a
2012 dividend of 5 pence per share to be approved by shareholders at the june 2013 annual
general meeting the level of future payouts will depend on the progression of cash flow over
time and the capital required to fund our investment opportunities but the board believes that
the payment of a sustainable dividend underlines our confidence in rising cash flows the strength
of our balance sheet and the quality of our asset base it is a reward too for the loyalty of our
shareholders we also thank our employees all of whom participate as shareholders through
our employee longterm incentive plans for all of their hard work in 2012 we all look forward to
2013 and the continuing growth in the company as it achieves its mediumterm aspirations
mike welton
chairman premier oil plc 2012 annual report and financial statements   07 we target in excess of
10 per cent nav growth
per share per year and
over the sevenyear period to
end2012 have achieved in
excess of 15 per cent”
“
simon lockett
chief executive
08   premier oil plc 2012 annual report and financial statements
chief executive’s review we focus on growing the underlying value of the business through
disciplined investment in high quality projects our skill set and
experience give us the confidence and capability to take on complex
operated development projects typically offshore and utilising
floating production systems we believe in offering our investors and
our employees continuing growth opportunities reflected in rising
production targets we will judge ourselves and invite others to judge
us by the growth in our net asset value nav per share yearonyear
without relying on a rising oil price we target in excess of 10 per cent
nav growth per share per year and over the sevenyear period to
end2012 have achieved in excess of 15 per cent going forward we
will source this growth from the development of existing assets new
acquisitions and material organic exploration while maintaining a
strong balance sheet so that we are well placed to take advantage of
attractive opportunities as they arise
in the fiveyear period since 2007 we have generated impressive
growth in all key financial and operational metrics which define our
business our growing undeveloped reserves and resource base will
support substantial future growth
                                                                                                      growth
                                                                                  2007 – 2012                     annualised 
revenues                                                                  144                               195
cash flow                                                                  200                               246
production                                                                  61                               100
reserves and resources                                          109                               159
return on capital                                                        98                               146
our growth rates have significantly exceeded the 54 per cent rise in
the oil price over the same fiveyear period the majority of this
growth has been financed by the reinvestment of internally generated
cash flows or new debt funding with some us11 billion of cash and
undrawn facilities on hand and a gearing ratio stable at 36 per cent
our balance sheet continues to provide a strong platform for further
material growth
reservoir performance from all our producing fields in 2012 was
encouraging and generated a 43 per cent increase in working interest
production yearonyear
                                                             working interest                    entitlement
                                                                                                             
production boepd                                   2012           2011           2012           2011
indonesia                                          14200       11450         8800         8600
pakistan                                             15600       15100       15600       15100
mauritania                                              600            650            500            550
uk                                                      12100       10300       12100       10300
vietnam                                             15200         2900       14600         3100
total                                          57700     40400     51600     37650
q 
what is premier’s
business model
and growth
strategy
q 
how do
you assess
premier’s overall
performance
over the last
five years
q 
were you
pleased with
premier’s 2012
production
performance well productivity was supported by improved facility uptime in the uk
indonesia and pakistan we continue to work on the redevelopment
of the kyle field in the uk which has been shut down since december
2011 following a severe north sea storm the supply of additional gas
to the indonesian domestic market which would have generated
further gas sales remains under discussion with the indonesian
authorities these two factors reduced 2012 production by around
4000 boepd though value will be recovered by a combination of
insurance proceeds and future production equipment issues at our
chim sáo field in vietnam notably with power supply prevented the
full application of water injection limiting our production rates from the
field this is being addressed and overall the field continues to produce
above the level originally anticipated in our field development plan
first oil from the huntington field is expected at the end of march in
line with our 2013 budget after a ramp up period the field is expected
to produce 2530 kboepd gross following a successful development
drilling programme the smaller rochelle field premier share 15 per
cent is now expected onstream around midyear after storm damage
to the initial development well the rig is currently drilling the
rochelle west well and will return to rochelle east after first gas
further significant milestones were achieved within our development
portfolio during the year especially on our operated development
projects the pelikan and naga projects which will sustain and grow
our position in the singapore gas market received development
approvals and will add to existing volumes in the natuna sea from
2014 onwards the dua and solan fields received project sanction
during the course of the year and are progressing well towards first oil
in 2014 on our operated catcher development in the uk north sea
concept selection was formally agreed in december and various
tenders are now under way for key contracts we expect to submit the
field development plan for approval to the uk government once
these tender processes are complete targeted first oil date will be
driven by the contract negotiation process notably for the floating
production storage and offtake vessel fpso elsewhere we increased
our equity interest in the bream area in norway and are working with
the revised partnership group to finalise development plans in
mauritania the partnership submitted a development plan for the
banda gas field though this remains subject to final agreement on
a gas sales contract
in line with our stated strategy we were delighted to acquire
operatorship and a significant equity interest in the sea lion
development project in the falkland islands during the course of the
year with some 350 million barrels of appraised oil in the sea lion
field and nearby discoveries a clear fit with our development skills
and an attractive fiscal regime this is a substantial opportunity for
premier it is also exciting to work in an environment where there is
such strong support from both the falkland islands and the uk
governments the location of the islands raises logistical and
infrastructure challenges however the resourcefulness of our own
project team members and that of the falkland islanders gives us
every confidence that these can be more than adequately addressed
q 
what milestones
did premier
achieve in 2012
with respect to
its development
portfolio
q 
what are the
key opportunities
and challenges
associated with
your entry into
the falkland
islands building on the work that our partner rockhopper exploration plc
rockhopper had already commenced we expect to make key
development concept decisions during the course of 2013 with final
development approval targeted for mid2014 this should facilitate
first oil from the sea lion field during 2017 whilst the geology of the
north falklands basin is complex we also see a large number of
prospects and leads which offer potential for future exploration we
are working closely with the rockhopper team to define the targets
for the next exploration programme now expected in late 2014 or
early 2015
the falkland islands transaction contributed significantly to a 51 per
cent increase in reserves and resources yearonyear while the sea
lion field has been fully appraised our reserve booking policy
dictates that resources associated with the field will not be booked
into the reserves category until further development milestones have
been achieved
as at 31 december 2012 proven and probable 2p reserves on a
working interest basis were 292 mmboe 2011 285 mmboe giving a
reserve replacement ratio of 134 per cent
                                                             proven and probable         2p reserves and 2c
                                                                          2p reserves      contingent resources
                                                                                mmboe                         mmboe
1 january 2012                                                         285                                513
production                                                                 21                                21
net additions and revisions                                      28                                281
31 december 2012                                        292                           773
the percentage of liquids in total reserves and resources has increased
to 67 per cent 2011 51 per cent given that the price we receive for
our indonesian gas volumes exported to singapore is linked to oil
prices around 88 per cent of our resource base is effectively oilprice
driven our current development portfolio is dominated by oilbased
projects
premier’s exploration programme over time has generated notable
successes indeed the largest projects in our portfolio – our gas
reserves in the natuna sea our chim sáo oil field in vietnam our
catcher field in the uk – come from premier exploration drilling
initiatives in 2009 we set a goal of adding 200 mmboe of net 2p
reserves over a fiveyear period based on discoveries to date the
followon potential which they have generated and the programme
still to come we are confident that this objective will be achieved
we added four discoveries to the portfolio during 2012 the carnaby
discovery adds additional reserves on the catcher block and is
encouraging for the ongoing exploitation of the smaller accumulations
around the catcher field itself the catcher area nearfield exploration
has commenced in 2013 with the drilling of the bonneville prospect
q 
how did your
reserve and
resource base
change over
2012
q 
what successes
have premier’s
exploration
programme
generated
how would
you describe
your exploration
strategy going
forward the anoa deep well underneath our existing anoa facilities in the
natuna sea opened up a new play the lama play which extends
across a wide area within premier’s natuna sea acreage plans to
follow up on this success with a new drilling campaign in 2014 and
2015 are advanced in pakistan two notable successes were recorded
with the k30 well on the kadanwari lease and the bbn1 well on the
badhra field these two discoveries added 116 billion cubic feet bcf
gross and have both been brought into production postdiscovery
however we recognise the need to update the portfolio as prospects
are drilled out and as areas like the uk north sea become mature
this is why we have taken steps to add new areas in kenya iraq the
falkland islands deeper water acreage in vietnam and the mandal
high area in norway we believe in targeting playopening
opportunities which on success will deliver not just one discovery but
will open up a series of prospects and leads success in any of these
areas would lead to multiple opportunities and reduced risk over
time such new acreage additions in 2012 were significant with a total
of 30 new licences amounting to net acreage gain of 11800 km
2

in 2013 premier plans to drill 15 exploration and appraisal wells this
includes five high impact exploration wells targeting in excess of 150
mmboe including the luno ii well which is currently drilling on the
south west margin of the utsira high and the lacewing well premier’ s
first high pressure high temperature well in the north sea in addition
we look forward to the results of the kuda laut and singa laut wells in
indonesia and the ca voi exploration well in vietnam the latter is a
true frontier exploration well with the potential to open up a new play
in eastern vietnam we also hope to replicate our near field exploration
success achieved in 2012 by the drilling of six near field wells in 2013
including the matang well in indonesia and the bonneville well in the
uk north sea both of which are currently drilling
we continuously review the structure of our organisation to get the
most out of our assets and to optimise project delivery during 2012
we reorganised our teams into six country units – uk norway
indonesia vietnam pakistan and the falkland islands – reflecting the
growing critical mass of those units and the need to have strong local
presence in all our key business areas at the same time our exploration
teams now report directly to a central exploration function pulling
together all the technical skills in the group into one team and
allowing us to make better informed choices about where to allocate
our exploration funds we continue to believe that our organisational
model – strong local units supported by a head office team focused
on critical decision points – will deliver our ambitious medium and
longterm goals
simon lockett
chief executive
q 
what is the
outlook for
premier’s 2013
exploration
drilling
programme
q 
you underwent
some
organisational
change in 2012
why premier oil plc 2012 annual report and financial statements   09 10   premier oil plc 2012 annual report and financial statements
business review
falkland islands

premier’s entry into the falkland islands was completed in the fourth
quarter of 2012 our primary focus is to develop the estimated 300 mmboe
sea lion field currently targeted for project sanction mid2014 working
closely with rockhopper we have also defined the lead and prospect
inventory such that a minimum of three exploration wells are now
planned for 20142015
highlights and achievements 
• completed acquisition of 60 per cent of rockhopper’s
licence interests in the falkland islands
• assumed operatorship of the 300 mmboe sea lion project
• lead and prospect inventory defined ahead of a 20142015
exploration drilling campaign
tom clarencesmith
business unit manager
premier oil falkland islands
one of our greatest
achievements last year was
our successful entry into the
falkland islands through the
farmin for 60 per cent of
rockhopper’s licence interests
in the north falklands basin
the current focus of the
falkland islands business unit
is the development of the sea
lion field and the exploitation
of the remaining exploration
potential in the basin”
“
premier interests
sea lion main field
sea lion satellites development 
in july 2012 premier agreed to farmin to 60 per cent of rockhopper’s
licence interests in the falkland islands including the sea lion development
project following the approval of the falkland islands government the deal
was completed in october with an initial cash payment of us231 million
in addition premier will pay an exploration carry of up to us48 million and
subject to field development plan approval a development carry of up to
us722 million these are fullyfunded from a combination of existing cash
resources facilities and cash flow from operations premier and rockhopper
also agreed jointly to pursue exploration opportunities in the falkland
islands and analogous plays in selected areas offshore southern africa
the sea lion field is located on the falklands plateau 220 kilometres north
of the falkland islands and lies in 450 metres of water the geological setting
is a northsouth atlantic failed rift with primarily early cretaceous to tertiary
fill in a typical half graben structure with a large bounding fault in the east
the sea lion accumulation is close to the eastern margin stacked early
cretaceous lacustrine fan reservoirs contain waxy 28 degree api crude oil
oilinplace is estimated to be over 11 billion barrels with 300 million barrels
gross recoverable including the discoveries at casper and casper south
the transaction added approximately 230 million barrels of net contingent
resources
the sea lion field is expected to be developed by drilling and completing
subsea wells in manifold clusters tied back via flexible risers to an anchored
fpso water injection and gas and produced water handling facilities will be
provided on the fpso gas will be used for fuel or reinjected to boost
recovery shuttle tankers will collect the crude oil and ship to international
markets gross estimated capital expenditure costs remain unchanged at
us5 billion premier will fund its share from rising cash flows
on 1 november premier formally became operator of all of the licence
interests previously operated by rockhopper thereby becoming the
operator of the sea lion development project a new dedicated project
team is undertaking detailed planning of development drilling and the
specification and sourcing of production facilities prior to commencing
frontend engineering design notably an fpso market enquiry which
included visits to ship yards has been undertaken to assess options of
conversions or new builds to meet the design life criteria technical reviews
have also been undertaken to study the option of gas lift instead of hydraulic
submersible pumps while design studies of flow line systems have been
completed health safety and environmental management plans are being
set to safeguard the development and operations phases concept selection
is targeted for mid2013 while project sanction is planned for mid2014 with
first oil targeted for third quarter of 2017 once onstream the sea lion
development is expected to add 50000 barrels of oil per day bopd of
production net to premier
building development
capability exploration 
since the announcement of the farmin in july 2012 premier has been working
closely with rockhopper to define the prospect inventory within its acreage in
the north falklands basin to date we have technical agreement on a
programme of between three and six exploration wells for the next drilling
programme which is targeted for 201415 subject to rig availability wells
currently included in the proposed programme include playopening wells
targeting prospects beneath the existing sea lion sands prospects from
independent feeder systems along the east flank of the basin as well as sea
lion lookalike prospects
premier has received notification from the falkland islands government that
licences pl023 and pl024 premier interest 60 per cent have been extended
to november 2013 pending further seismic interpretation work and that
licences pl003 and pl004 premier interest 45 per cent have been extended
to may 2016 with the addition of a one well commitment
falkland islands continued premier oil plc 2012 annual report and financial statements   11
outlook 
• sea lion development planning progressing to midyear 2013 concept selection project sanction planned
for mid2014 with first oil targeted for the third quarter of 2017
• a minimum of a three exploration well programme planned for 20142015 12   premier oil plc 2012 annual report and financial statements
business review continued
indonesia
highlights and achievements 
• 2012 gas sales from block a to singapore
averaged 217 bbtud up 35 per cent
• pelikan and naga projects sanctioned
• exploration success at anoa deep opening up
the lama play
roberto lorato
president premier oil indonesia
2012 saw the sanction of
our pelikan and naga fields
which will build on our
strong performing anoa
and gajah baru interests
the anoa deep discovery
offers significant potential
for the future”
“

our key asset in indonesia remains the operated natuna sea block a
with both further development and exploration activity in the area
we are planning to build on our existing strong share of the singapore
gas market through our interests in block a aceh and an ongoing
programme of exploration new venture work we are seeking to take
advantage of our longestablished relationships and gas marketing
expertise to increase our incountry presence production and development 
during 2012 the premieroperated natuna sea block a block a sold an
overall average of 217 billion british thermal units per day bbtud gross
2011 161 bbtud from its gas export facilities a 35 per cent increase due to
a fullyear of production from the new gajah baru facility and the established
anoa field
the anoa facility continued to increase its market share of sales under the
first gas sales agreement gsa1 delivering 75 per cent over its contractual
market share of 369 per cent in addition three anoa development wells
were drilled and put on production in 2012 adding 36 million standard cubic
feet per day mmscfd of gas deliverability the nonoperated kakap block
contributed a further 33 bbtud gross 2011 42 bbtud gross liquids
production from the block a anoa field was steady at an average 2400 bopd
2011 2400 bopd with a further 3500 bopd 2011 3400 bopd from kakap
overall production from indonesia was up substantially to 14200 boepd
2011 11450 boepd on a working interest basis
the pelikan and naga projects also on block a were sanctioned in april 2012
and are now in full execution mode the contract for the engineering
procurement construction and installation of two wellhead platforms and
connecting pipelines was awarded in may 2012 the two projects will involve
drilling six new development wells to develop an expected 150 bcf of gas
reserves first gas will be delivered in 2014 to supply existing indonesia and
singapore sales contracts
in parallel a major brownfield development project to upgrade the
compression facilities on the block a anoa gas production facility has also
progressed through its first phase in 2012 two cantilever deck extensions
housing a new gas compressor and turbine generator were fabricated and
installed on the anoa platform 2013 will see a second major offshore
campaign during which the existing compression equipment will be
reconfigured for low pressure production the project when complete in
september 2013 will extend the field plateau for another three years and
develop 200 bcf of gross field reserves
on the nonoperated block a aceh work continued on the gas development
project the focus has been on improving the economics such that the
project can be sanctioned by yearend the tendering process for most
facilities is complete with current efforts towards securing higher gas prices
with end buyers and the indonesian government progressing well first gas
is targeted for third quarter of 2015
exploration 
premier carried out exploration in five production sharing contracts psc
in indonesia natuna sea block a kakap tuna block a aceh and buton
in 2012 premier drilled three exploration wells on its indonesian acreage
one of which was successful and opened up a new play
the anoa deep1 well drilled as an exploratory tail to the anoa wl5x
development well discovered gas below the anoa field the well flowed
over 17 mmscfd of gas from fractured sandstones of the lama formation
building on strong share
of singapore gas market the discovery of gas in the lama sands provides additional gas resources that can be
dedicated to existing gas sales agreements and opens up a new proven play type which can
be pursued across premier’ s block a and adjacent west natuna areas prospect development
continued in natuna sea block a with the overall prospect inventory being upgraded
through seismic reprocessing on selected prospects and prospect development in the newly
proven lama play premier expects to start to drill out these prospects in 201415
the biawak besar1 well on natuna sea block a was drilled to test a stratigraphic trap which
was assessed on seismic data to have a good possibility of containing gas biawak besar1
encountered good reservoir development and gas shows but was not deemed commercial
in the buton psc premier participated in the benteng1 exploration well which was aimed
at discovering oil in limestone reservoirs in the cretaceous tobelo formation while the well
was successful in proving an oil presence in the area with oil shows in the miocene tondo
limestones no commercial oil accumulation was found premier and partners will not
continue exploring in the buton psc and the licence will be relinquished shortly
in the block a aceh psc in northern sumatra the matang1 exploration well was spudded
in late november 2012 the objective of the matang1 well is to discover gas resources in a
miocene peutu limestone reservoir the drilling of the top seal sequence has taken longer
than expected with the results now anticipated by the end of march 2013
in 2011 exploration wells gajah laut utara1 and belut laut1 were drilled in the tuna psc
to test the miocene and oligocene potential of two prospects the wells did not find
commercial hydrocarbons but utilising the information gained two new prospects kuda
laut and singa laut were matured in 2012 these prospects are approved for drilling in 2013
with the kuda laut1 and singa laut1 wells expected to spud in the second half of the year
during the year premier maintained an active programme of exploration new ventures work
aimed at capturing new licences this work entailed a number of regional basin studies as
well as three formal joint studies carried out in conjunction with the indonesian government
agency migas
indonesia continued premier oil plc 2012 annual report and financial statements   13
outlook 
• project sanction of block a aceh in 2013
• block a total sales capacity increasing to 400 bbtud pelikan and naga expected onstream in 2014
• active exploration programme with the upcoming kuda and singa laut wells on the tuna block
• 2014 drilling campaign targeting the new lama play following up on the success at anoa deep 14   premier oil plc 2012 annual report and financial statements
business review continued
norway
highlights and achievements 
• completed agreement with skeie to increase
equity in bream to 40 per cent
• completed acquisition of three operated
exploration licences on the margin of the
mandal high
• built further on mandal high position through
the apa 2012 licensing round
chris craft
business unit manager
premier oil norway
the norway business unit
is focused on bringing
onstream the developments
which meet our internal
metrics while pursuing high
impact exploration we also
continue to seek to actively
manage our portfolio both
through acquisitions and
disposals”
“

premier was awarded four new exploration licences in january 2012
as a result of the awards in predefined areas apa 2011 round and
continued to mature a number of prospects towards drill decisions
in 2013 the company also built on its acreage position in and around
the mandal high area through the acquisition of three operated
licences which completed in february 2012 and the award of the skala
exploration licence in the apa 2012 round in addition the company
increased its interest in the bream field development and the adjacent
block at attractive pricing development 
in august premier acquired a 20 per cent interest in pl407 which contains
the bream field and a 40 per cent equity interest in the adjacent pl406
licence this increased premier’s share in the bream project to 40 per cent
and the company’s operated interest in pl406 which contains the mackerel
oil discovery and the herring exploration prospect to 80 per cent premier
paid an upfront consideration of us10 million with further payments of up
to us175 million contingent upon certain milestones being reached
engineering studies for the subsea systems and wells for bream were
completed during 2012 but the studies carried out for the lifetime extension
and upgrade of the fpso targeted for the field demonstrated that the
vessel was not suitable the joint venture partnership has investigated
alternative production facility options and a new build vessel has been
identified commercial negotiations are under way with the contractor for
this vessel and it is expected that front end engineering studies will start in
the second quarter of 2013
during 2012 premier completed subsurface evaluations for the mackerel
discovery based on the results a subsea tieback to the bream fpso is the
most economic solution an exploration well on the adjacent prospect
herring is also planned to be drilled as part of the development project
project sanction and submission of development plans to the authorities
for the bream development are expected in early 2014 first oil is targeted
for 2017 with an initial production rate of approximately 14000 boepd net
to premier
elsewhere in norway commercial discussions have been held with field
owners in the frøy area with the intent of developing a central processing
hub for a number of discoveries close to frøy this has proved a slow
process however the pace is expected to pick up in 2013 with equity
alignment discussions taking place with the operator of a nearby field
active exploration exploration 
work continued in 2012 to evaluate the grosbeak discovery in pl378 the
partnership is participating in an area forum that is evaluating the best way of
developing the resources in the area in addition a significant oil discovery
skarfjell was made in the adjacent licence in 2012 current mapping indicates
that a significant portion of skarfjell extends into pl378 and preparations for
appraisal drilling have been initiated
in february 2012 premier completed its acquisition of three operated
exploration licences these licences are close to premier’s existing freki licence
and are on the margin of the mandal high in the southern norwegian north
sea evaluation of this acreage has so far resulted in a drill recommendation
being brought forward to our partners in pl539 and we are awaiting a decision
shortly premier built further on its acreage position in and around the mandal
high through the apa 2012 licensing round in which it was awarded a 20 per
cent operated interest in the skala exploration licence in january 2013 as a
result premier now has access to around 200 mmbbls of net prospective
resources on and around the mandal high
in the operated licence pl622 a 3d survey was successfully acquired during the
summer in cooperation with pgs
looking forward the luno ii exploration well in pl359 in the north sea offshore
norway spudded in march 2013 and the results of the well are expected by the
end of april the well is looking to prove up the jurassic reservoir sandstones
to the south of the edvard greig field and is targeting a gross mean unrisked
prospective resource of 120 mmboe
norway continued premier oil plc 2012 annual report and financial statements   15
outlook 
• bream project sanction planned for early 2014 with first oil targeted for 2017
• focus on portfolio management
• high impact luno ii well to be drilled in 2013
• maturing playopening prospects on the mandal high for drilling in 201415
production
manifold
water injection
manifold 16   premier oil plc 2012 annual report and financial statements
business review continued
pakistan
highlights and achievements 
• enhanced value of pakistan assets through
ongoing field development and compression
upgrade projects
• exploration success at k30 and badhra b
north1
mehran inayat mirza
business unit manager
premier oil pakistan
due to the extremely successful infill drilling programme
well workovers and compression projects production from
our pakistan assets continue to increase”
“

natural decline in production from our producing fields in pakistan
has again been more than offset by successful infill drilling and
stepout exploration further potential will be tested during 2013
premier is also seeking through a programme of pilot wells at
kadanwari to test the tight gas potential in deeper horizons production and development 
average working interest production in pakistan during 2012 was 15600 boepd net to
premier three per cent higher than in 2011 15100 boepd despite the start of natural
production decline in some existing wells the higher production was mainly due to
successful infill drilling and the tiein of exploration and development wells in the kadanwari
and bhitbadhra gas fields
production from the qadirpur gas field was broadly stable in 2012 averaging 3700 boepd
net to premier compared to 3750 boepd in 2011 this was due to the good performance
of the wellhead compressors and to the better than expected support from the extended
reach wells drilled in the northern part of the reservoir specifically the development wells
qp44 qp45 qp46 and hrl6 were successfully drilled completed and tiedin to
production in 2012 while qp48 and qp49 are currently being drilled in addition the
government of pakistan has approved a new price for qadirpur gas increasing it by 11 per
cent applicable with effect from december 2012
production from the kadanwari gas field averaged 2600 boepd net to premier during 2012
27 per cent higher than in 2011 this was as a result of sustained production from k19 and
the increase in field production following the tiein to facilities of the successful exploration
wells k27 and k28 and the k29 development well
the pilot programme at kadanwari to test the tight gas potential in the lower goru
formation is ongoing the k3 dirb vertical well has been tested and is currently being
tiedin to the facilities while the testing of the k1 dira vertical well commenced in january
six tight sand intervals were fracked and tested separately at the k3 dirb well with total
initial flow of 34 mmscfd which reduced to 18 mmscfd upon clean up this proved that all
the tight intervals in the kadanwari area can flow gas after fracking while the gsand and
bsand have demonstrated relatively better flow potentials these two intervals are being
tested in the k1 dira well where preliminary results are encouraging as the gsand flowed
05 mmscfd prior to clean up all fracked bsand intervals also flowed gas to the surface
while rates are likely to improve after further rigless clean up the gsand will be targeted
in the k31h horizontal pilot well in 2013
the zamzama gas field produced 5800 boepd net to premier during 2012 2011 5800 boepd
this was mainly due to continuous good performance of frontend compressors and the
zam8 infill well being tiedin ahead of schedule subsurface studies were completed in
early 2012 following which two infill wells zam 8 and zam 9 were drilled backtoback in
the second half of the year while the zam8 infill well was tiedin to the system in
november first gas from the zam9 infill well was achieved in january 2013
production from the bhitbadhra gas fields was stable in 2012 averaging 3500 boepd net
to premier this was mainly due to the successful drilling and tie in of the badhra b north1
exploration well in addition the bhit15 development well which was spudded on
4 november was tiedin to the facilities in january 2013 further helping to offset the natural
decline from the existing wells on the bhitbadhra gas fields
a revised development plan for the zarghun south gas field was submitted to the pakistan
government in may 2012 following certification of 64 bcf of tight gas in the dunghan
formation and 12 bcf of conventional gas in the chiltanmughalkot formations by
independent consultants degolyer and macnaughton the revised development plan has
been approved for application of premium ‘tight gas policy’ prices and as a result the joint
venture commenced development work on the project early in 2013 all costs pertaining to
premier’s 375 per cent interest in the project are carried by the operator
infield development
successes outlook 
• continue the infield development programme
• ongoing near field exploration drilling planned for 2013
• three well pilot project to evaluate the tight gas potential at kadanwari
to be completed in 2013
exploration 
two exploration wells k30 on the kadanwari gas field and badhra b north1 bbn1 on the
badhra gas field were drilled in 2012 both wells were successful and have subsequently
been tiedin to infrastructure
the k30 exploration well was spudded in january 2012 and tested gas with a flow rate of
52 mmscfd through a 6064 inch choke the well was tiedin to the system in april 2012
following this better than expected result two more wells are planned in 2013 in the eastern
part of the existing lease
the bbn1 well was drilled in september 2012 and made a significant gas discovery in the
kirthar foldbelt the well was drilled to a total depth of 2450 metres and encountered a new
sand interval 44 metres thick in the mughalkot reservoir formation which tested gas at a
flow rate of 31 mmscfd the well was tiedin to the bhit facilities in november the joint
venture has agreed to drill an appraisal well badhra b north1 west in the second quarter
of 2013 to assess the full potential of the 100 bcf discovery as part of an appraisal programme
submitted to the government the planned badhra6 development well will be deepened
in 2013 to test the potential of the parh limestone in addition the badhra south1 deep
exploration well will be drilled in 2013 to test the potential of a deeper lead at the lower
goru level
pakistan continued premier oil plc 2012 annual report and financial statements   17
mauritania
production and development 
in mauritania 2012 working interest production from the chinguetti field averaged 600 bopd
2011 650 bopd with a natural decline in the field production
the undeveloped discovery tevet in psc b will continue to be held by the joint venture
partners until may 2013 development studies are ongoing to make a ‘develop or drop’
decision
in september 2012 the joint venture submitted an application for grant of an exclusive
exploitation authorisation eaa for the banda field along with a gas field development
plan fdp and declaration of commerciality to the government of mauritania subject to
various conditions precedent subsequently the government has approved the fdp and
awarded the eaa in january 2013 gas sales arrangements and payment guarantees for
banda are currently under discussion with prospective buyers
the tiof discovery was relinquished in november 2012 being subcommercial with a
request to the government that the partnership group is reengaged in the event of a future
satellite development of the field
exploration 
the consolidation of premier’s exploration licences offshore mauritania was finalised in 2011
with the grant of a new licence psc c10 in which premier has an equity of 623 per cent
site surveys were completed over two potential drilling locations and a final decision on the
candidate for the first of two commitment wells will be made in the first half of 2013 the
well is scheduled for drilling in the fourth quarter of 2013 18   premier oil plc 2012 annual report and financial statements
business review continued
united kingdom
highlights and achievements 
• significantly higher uptime at the premier
operated balmoral facility
• project sanction of the operated solan
development 
• catcher development concept formally agreed
• exploration success at carnaby catcher area
mike skitmore
business unit manager
premier oil uk
in the uk we have a full suite of operated and nonoperated
exploration development and production activities the next
generation of uk development projects will drive the company’s
continuing growth in the mediumterm and our key focus will
be on delivering the solan and catcher projects”
“

the pipeline of development projects in our uk portfolio will drive
continuing growth for a number of years our principal focus will
be the successful execution of these projects we will also pursue
exploration opportunities where the balance of risk and reward
meets inhouse objectives production and development 
production from premier’s uk fields increased to 12100 boepd compared to 10300 boepd
during 2011 despite no contribution from the kyle field the banff fpso which handles kyle
production was damaged during exceptionally bad weather at the end of 2011 since then
it has been off location while repairs are undertaken the increased production in the north
sea can be attributed to significantly higher uptime at the balmoral facility positive results from
the scott field well intervention programme and our increased stake in the wytch farm asset
production from premier’s balmoral area averaged 4500 bopd during 2012 compared to
3750 bopd in 2011 an active year of work culminated in a highly successful health safety and
environment hse kp4 audit during august in which a significant improvement in overall
integrity was noted safety performance at the premieroperated balmoral floating production
vessel also improved in 2012 with a marked reduction in incident frequency and severity
at the end of 2011 premier increased its equity in the wytch farm field to 301 per cent
upgrades to the process plant and improvements to management systems have facilitated
increased production efficiency an infill drilling programme commenced in february 2012
ahead of schedule and has resulted in the completion of three new wells and seven workovers
on the huntington field the six well development programme was successfully completed
in july 2012 with three of the four producers coming in above expectations the fpso
voyageur spirit sailed away in september and all five risers have subsequently been
installed adverse weather conditions late in the fourth quarter delayed the commissioning
and installation programme however the dsv polaris is nearing completion of the final
subsea tiein in preparation for first oil which is anticipated by the end of march
on the rochelle project the subsea pipeline and umbilical installation programme and
upgrades to the host scott platform were successfully progressed in 2012 the east rochelle
well the first of the two development wells was damaged during a north sea storm in
february 2013 as a result drilling operations were suspended safely pending further analysis
and the order of the development wells was reversed with the prospect rig spudding the
west rochelle well in february first gas from the rochelle field is now expected either at
the end of the second quarter or in the third quarter of 2013
significant progress was achieved on our ukoperated development assets premier was
appointed operator of the solan field which is located west of shetland on 31 january
2012 the solan project received full decc and partner approvals in april 2012 and is now
in full execution mode with all of the significant contracts awarded the platform is currently
being fabricated in fife scotland while the fabrication of the subsea tank is being
undertaken in dubai phase 1 of the development drilling is on track to commence in april
2013 the heavy lift installation work is planned for the summer of 2014 first oil is targeted
for the fourth quarter of 2014 with an initial production rate of 24000 bopd premier equity
60 per cent
in january 2012 premier completed its acquisition of encore oil plc which resulted in the
company taking over operatorship of the catcher project and increasing its stake in the
project to 50 per cent the development concept which was formally approved by the joint
venture in december consists of a leased fpso with subsea tiebacks the project has now
entered the design phase and the tender process with the fpso providers and for the
subsea facilities front end engineering and design feed is under way the design phase is
expected to be completed in the third quarter of 2013 and it is anticipated that the
partnership will move to joint venture sanction thereafter timing of first oil from the catcher
field is dependent on the results of the fpso tender process premier is currently modelling
a first oil date during the second half of 2016
strong production growth exploration 
in 2012 premier drilled seven exploration wells in the uk north sea primarily
focused on extending the successes of previous years’ drilling in the catcher
licence across a wider area of the central north sea basin this resulted in
success with the carnaby well the first well drilled to date on the western part
of the catcher block which encountered 51 feet of net oil in excellent quality
sandstones the remaining uk exploration wells that targeted this play in 2012
were either dry or encountered noncommercial discoveries as a result the
strategy will now focus exclusively on the prospectivity within the greater
catcher area in particular the bonneville well spudded in early march with the
results expected shortly
in addition to bonneville premier will drill one other well lacewing in the uk
central north sea in 2013 lacewing is targeting triassic reservoirs and is
premier’s first high pressure high temperature hpht well in 2012 premier
transferred a 372 per cent interest in block 2322b to conocophillips in
exchange for a carry for the lacewing well as a result premier’s retained equity
in the well is 202 per cent the well which will be drilled using the maersk
resilient rig is expected to spud in april
in the 27
th
uk licensing round the company was awarded a total of 12 licences
six operated building on our acreage position in the uk north sea in particular
premier was awarded four operated licences adjacent to the catcher area
which offer both nearfield and deeper exploration potential in addition
premier reached an agreement with encounter oil the former management
team of encore oil plc jointly to pursue several mesozoic prospects and leads
primarily in the inner moray firth premier also secured a nonoperated licence
interest in the west of shetland basin it is anticipated that the leads and
prospects identified on this newly captured acreage will be matured during
2013 with drilling in 2014 and beyond
united kingdom continued premier oil plc 2012 annual report and financial statements   19
outlook 
• huntington and rochelle expected onstream in 2013
• catcher project sanction anticipated by yearend 2013
• selective exploration programme upcoming wells include bonneville catcher area and lacewing
premier’s first hpht well 20   premier oil plc 2012 annual report and financial statements
business review continued
vietnam
highlights and achievements 
• production from chim sáo ahead of
expectation at sanction
• partner and prime ministerial approval of
dua project
• farmin to block 121 which contains the
potentially playopening ca voi prospect
completed
phil maclaurin
business unit manager
premier oil vietnam
in vietnam we are focused on
optimising production from the
chim sáo field and bringing 
onstream the nearby dua field
we also look forward to the
ca voi exploration well a
potential playopener for the
underexplored phu khanh basin”
“

there is much still to be gained from optimisation of the chim sáo
and nearby dua oil fields we will continue to test the prospectivity
on block 0703 to the south of chim sáo and look forward to
the ca voi exploration well in the first half of 2013 a potential
playopener for the underexplored phu khanh basin production and development 
the premieroperated chim sáo field was brought onstream at the end
of 2011 and the first fullyear of oil and gas production from the field was
accomplished safely 2012 production from the field averaged 15200 boepd
net to premier ahead of the original development plans the price of oil
cargoes sold from the field during the year averaged in excess of us450 per
barrel bbl over brent 
the chim sáo development drilling programme which comprised nine
producing wells and six injection wells was completed safely and under
budget in april 2012 this programme was followed by three additional
wells aimed at capturing upside resources identified during development
two wells were targeted at a fault terrace to the north west of the field one
was successful and commenced production at approximately 3000 bopd
in august the second well targeting a separate fault segment to the north
was dry separately a third well was drilled to accelerate production from
a shallow reservoir with larger reserves than initially evaluated and was
brought onstream in september at a rate of about 2000 bopd
the chim sáo field is currently producing 30 thousand barrels of oil per day
kbopd some 5 kbopd ahead of expectation at sanction with potential for
further increases to deliverability when power constraints currently impacting
the fpso are resolved the plan is to add power generation capacity to
allow the water injection pumps to sustain reservoir pressure at higher
production levels and the compressors to export higher volumes of
associated gas
the development of the premieroperated dua oil field as a three well
subsea tieback to the chim sáo facilities received partner sanction in the
second quarter of 2012 and prime ministerial approval in august installation
of the main pipeline commenced in february 2013 the field which is forecast
to average a gross production rate of 810 kboepd in the first 12 months
is expected onstream in 2014
optimising chim sáo
production exploration 
in july 2012 premier agreed to farmin to the origin energyoperated block 121
in the northern part of the underexplored phu khanh basin offshore central
vietnam for a 40 per cent working interest the farmin received government
approval in february 2013 premier will pay its participating interest share in the
drilling of the high risk ca voi prospect which is planned for may 2013 the
prospectivity of block 121 centres on the untested oligocene play fairway which
premier recognises as being geologically similar to the cau formation that it
has successfully explored in blocks 12w and 0703 in the nam con son basin
immediately after the high risk ca voi well the ocean general will move to drill
crd3x which will appraise the cá rˆ o

ng  do

crd discovery on block 0703
the rig will then move to spud the wildcat exploration well on the silver sillago
prospect also on block 0703 in mid2013 the well 07cd1x will evaluate the
petroleum potential of a new subbasin within the overall nam con son basin
the ocean general will then move to indonesia where it will spud the kuda
laut well on the premieroperated tuna block
vietnam continued premier oil plc 2012 annual report and financial statements   21
 outlook 
• optimising production from chim sáo
• dua expected onstream in 2014
• crd appraisal well to be drilled in 2013
• playopening ca voi well to be drilled in 2013 22   premier oil plc 2012 annual report and financial statements
business review continued
new country entry – exploration
2012 highlights and achievements 
• acquired 5000 square kilometres of new 3d seismic
across the western part of our kenya acreage
• successful entry into southern iraq one of the
world’s most prolific basins
• gained a significant acreage position in the relatively
undrilled highly prospective north falklands
basin through the acquisition of 60 per cent of
rockhopper’s licence interests
• in total added in excess of 1 bnboe of gross
unrisked prospective resources through new
country entry
andrew lodge
exploration director
premier is building an increasingly
material exploration programme
our biggest achievement in 2012
was to rebalance the portfolio
through the addition of in excess
of 1 bnboe of gross unrisked
prospective resources through
new country entry we continue
to look for opportunities in new
countries which meet our criteria
of delivering playopening
opportunities with significant
followon potential”
“

in addition to exploration in the existing business unit areas
premier looks to open up new frontier geographies in targeted
new countries where the geology is assessed to be similar to that
of the existing business units where premier has built expertise the acreage recently accessed by premier in new areas is dominated by
deepwater environments where an exploration success has the potential to
transform the resource base of the company to date premier has exposure
to frontier exploration acreage in selected areas of africa and the middle
east we continue to evaluate new areas for potential entry in 2013
in east africa premier has equity interests in two blocks offshore kenya
blocks l10a and l10b processing and interpretation of 2d and 3d seismic
data on these blocks continued throughout 2012 and a new 2250 km
2
3d
seismic acquisition programme took place over the western part of the blocks
in late 2012 a prospect inventory is being prepared with a view to drilling
the first exploration well in 2014 or potentially in the fourth quarter 2013
in november 2012 premier was formally awarded a 30 per cent nonoperated
interest in iraq’s block 12 block 12 an 8000 square kilometre block in the
foreland of the zagros fold belt up dip from producing fields lies in a frontier
part of one of the world’s more prolific oil and gas basins the forward plan
on block 12 is to reprocess the existing seismic data in 2013 and then acquire
new seismic data in 2014 subject to the interpretation of the new seismic an
exploration well will be drilled in 2015 or 2016
in egypt following the drilling of the cherry prospect in the north red sea1
licence in 2011 premier has decided to relinquish its equity share of the
licence premier has also withdrawn from the south darag block in the gulf
of suez due to the lack of formal government approval of the licence award
premier’ s exploration rights in the daora haouza mahbes mijek and laguara
blocks offshore the saharawi arab democratic republic sadr remain under
force majeure awaiting resolution of sovereignty under a united nations
mandated process
high impact
opportunities new country entry
– exploration continued
km
0 50
40
35
30
25
20
15
10
05
00
twoway seismic time sec
kenya exploration 
sw approximate position of block 12 ne
sw
inboard reef play
outboard turbidite plays
ne
w e
iraq exploration  premier oil plc 2012 annual report and financial statements   23
outlook 
• first exploration well on our kenya acreage to be drilled in 2014 or potentially in the fourth quarter of 2013
• minimum three well exploration programme in the north falklands basin planned for 201415 potential
wells include playopening wells targeting prospects beneath the existing sea lion sands prospects from
independent feeder systems along the east flank of the basin as well as sea lion lookalike prospects
• maturing playopening prospects in block 12 in iraq for 2015 drilling
• continue to look for opportunities in new countries which can deliver either high impact prospects or 
playopening opportunities with significant followon potential 24   premier oil plc 2012 annual report and financial statements
financial review
profit after 
tax is a record
us2520 million 
resulting in basic
earnings per share
of 479 cents”
“
economic background
oil prices for the year as a whole were unusually stable averaging us1117bbl against
us1113bbl for 2011 and trading in a range of us1267bbl to us887bbl premier’s
portfolio of crudes traded at a weighted average of us35bbl premium to brent
boosted by favourable prices for our chim sáo crude in the asian markets premier’s
average realisations for the year were us1114bbl 2011 us1119bbl influenced by
the timing of actual crude oil liftings after taking into account the effect of hedging
contracts this reduced to us1075bbl 2011 us896bbl
average gas prices for the group were us834 per thousand standard cubic feet mscf
2011 us851mscf gas prices in singapore linked to high sulphur fuel oil hsfo
pricing and in turn therefore linked to crude oil pricing averaged us187mscf
2011 us195mscf average prices for pakistan gas where only a portion of the
contract formulae is linked to energy prices was us43mscf 2011 us38mscf
income statement
production in 2012 averaged 577 kboepd 2011 404 kboepd on a working interest
basis on an entitlement basis which under the terms of our pscs allows for additional
government take at higher oil prices production was 516 kboepd 2011 377 kboepd
working interest gas production averaged 180 mmscfd 2011 153 mmscfd or
approximately 54 per cent of total production
total sales revenue from all operations reached a new record level of us14087 million
2011 us8268 million driven by higher production and the sustained high oil prices
cost of sales rose to us7424 million 2011 us4149 million unit operating costs were
us162 per barrel of oil equivalent boe 2011 us159boe and amounted to
us3424 million 2011 us2352 million the operating costs per boe in pakistan and
indonesia remained stable increased marginally in the uk and were significantly
reduced in vietnam due to oneoff production start up costs in the prior year underlying
unit amortisation excluding impairment rose to us164boe 2011 us138boe
reflecting increased production from vietnam which has a higher amortisation charge
per boe compared to the group average
exploration expense and prelicence expenditure costs amounted to us1577 million
2011 us1875 million and us292 million 2011 us230 million respectively this
includes the writeoff of the following exploration wells a chim sáo north west well in
vietnam benteng in indonesia and the spaniards east fyne stingray cyclone bluebell
and coaster wells in the uk north sea net administrative costs were us242 million
against 2011 of us258 million
operating profits were us4552 million 2011 us1756 million finance costs and
other charges net of interest revenue and other gains were us1076 million 2011
us681 million the increase reflects historically low levels of interest rates on cash
deposits increased gross debt levels to fund development projects in asia and the uk
and in the latter parts of 2012 the us2310 million funding for the acquisition of the sea
lion discovery in the falkland islands the charge for the unwinding of the discounted
decommissioning provision increased to us332 million 2011 us283 million reflecting
increased provisions for future decommissioning as industry cost estimates rise
pretax profits of us3599 million 2011 us1415 million also show a positive
adjustment of us142 million in respect of the group’s commodity hedge portfolio
2011 us340 million this represents the unwinding of prior year provisions in respect
of our embedded oil hedging programme which finished at the end of 2012
tony durrant
finance director premier oil plc 2012 annual report and financial statements   25
the group tax charge for 2012 is us1079 million an effective tax rate of 30 per cent of
our profit before tax the group’s theoretical tax rate is close to 50 per cent a higher
taxation rate in the uk being offset by lower rates in vietnam and pakistan the 2012 tax
charge is reduced as a result of a deferred tax credit in the uk arising from the ring
fence expenditure supplement rfes allowance and the small field allowance for the
group’s solan field the group has an estimated us19 billion of carried forward uk
corporation tax allowances which will be utilised against uk ring fence profits over time
and are therefore reflected in the deferred tax asset position at the yearend
profit after tax is a record us2520 million 2011 us1712 million resulting in basic
earnings per share of 479 cents 2011 366 cents
dividend
the board is proposing a dividend of 5 pence per share 2011 nil this dividend is
subject to shareholder approval at the annual general meeting to be held in london on
7 june 2013 if approved the dividend will be paid on 14 june 2013 to shareholders on
the register as of 17 may 2013
cash flow
cash flow from operating activities was us8082 million 2011 us4859 million after
accounting for tax payments of us2331 million 2011 us440 million the higher cash
flow and tax payments reflect increased production in gajah baru indonesia and chim
sáo vietnam
capital expenditure in 2012 totalled us7716 million 2011 us6605 million
capital expenditure us million                                                                                         2012              2011
fieldsdevelopment projects                                                                                  5690         4281
exploration and evaluation                                                                                     1871         2282
other                                                                                                                            155             42
total                                                                                                                           7716         6605
the principal field and development projects were solan huntington and rochelle in
the uk naga and pelikan in indonesia and dua in vietnam together with drilling and
compression projects in pakistan
exploration and evaluation spend includes costs principally related to the exploration
drilling activities in the uk vietnam pakistan and norway
acquisitions and disposals
in january the company completed the acquisition of encore oil plc encore
shareholders representing 935 per cent of encore’s shares elected to take new premier
shares resulting in the company paying a total of £141 million us216 million in cash
to encore shareholders and issuing 60931514 new ordinary shares to those who
elected to take the share alternative
prior to completion of the encore transaction the company reached an agreement to
onsell the 166 per cent interest in the cladhan area which it acquired via the encore
acquisition for an adjusted consideration of us524 million this onsale was completed
in march 2012
kboepd
58
production
mmboe
292
reserves
mmboe
481
resources 26   premier oil plc 2012 annual report and financial statements
financial review continued
in may premier agreed to acquire a 20 per cent interest in pl407 and a 40 per cent
interest in the adjacent pl406 licence on the norwegian continental shelf these
interests increased premier’s share of the bream development project to 40 per cent and
the company’s operated interest in pl406 to 80 per cent pl406 contains the mackerel
discovery and the herring prospect which could form part of the bream area
development in the future upfront consideration for the acquisition was us100 million
with contingent payments of us175 million payable upon certain project outcomes
the acquisition was completed in july 2012
also in july premier announced it had agreed to farmin to 60 per cent of rockhopper’s
licence interests in the falkland islands including the sea lion development project
the initial payment was us231 million in cash in addition premier will pay an
exploration carry of up to us48 million and subject to field development plan
approval a development carry of up to us722 million premier has also agreed to
provide additional standby funding to complete the project in the event that
rockhopper chooses to draw down on this facility premier will take an enhanced share
of entitlement production and cash flows from the sea lion and related fields this
enhanced share continues until premier realises a 15 per cent post tax internal rate of
return on its investment thereafter cash flows are shared prorata to equity interests
premier’s investment in sea lion and related fields will be funded from a combination
of premier’s existing cash resources and facilities and future cash flow from operations
premier and rockhopper have also agreed to pursue jointly exploration opportunities
in the falkland islands and analogous plays in selected areas offshore southern africa
the transaction accounted for as an asset purchase was completed in october 2012
balance sheet position
net debt at 31 december 2012 amounted to us11104 million 2011 us7440 million
with cash resources of us1874 million 2011 us3091 million
net debt us million                                                                                                           2012              2011
cash and cash equivalents                                                                                      1874         3091
convertible bonds                                                                                                   2202       2282
other debt                                                                                                          10776       8249
total net debt                                                                                                     11104       7440
 other debt includes €1000 million of longterm senior notes which are valued at yearend us1319€ spot
rate however these will be redeemed at an average of us1397€ due to cross currency swap arrangements
in february 2012 additional bank facilities of us3500 million were negotiated and a
second issue of senior loan notes was completed this second issue with maturities of
seven 10 and 12 years amounted to us2020 million and €250 million a us1750 million
term bank loan was repaid during march 2012
in october 2012 further to an offer from the company holders representing 9813 per
cent of the total principal amount of the us2500 million guaranteed convertible bonds
due in 2014 representing a principal amount of approximately us2453 million elected
to exchange their existing bonds for guaranteed convertible bonds due in july 2018
the new bonds have a conversion price of us700 £434 per share and a coupon of
25 per cent this compares with the old convertible bonds which had a conversion
price of us669 per share and a coupon of 2875 per cent following completion of the
exchange offer premier exercised its right under the terms and conditions of the old
bonds to redeem the remaining outstanding bonds in an aggregate amount of
approximately us47 million at par plus accrued interest
cash and undrawn facilities including letter of credit facilities were approximately
us1100 million at 31 december
million
us252
profit after tax
million
us808
operating cash flow premier oil plc 2012 annual report and financial statements   27
financial risk management
commodity prices
the board’s commodity pricing and hedging policy continues to be to lock in oil and
gas prices for a proportion of expected future production at a level which ensures that
investment programmes for sanctioned projects are adequately funded where
investment requirements are well covered by cash flows without hedging it is recognised
that there may be an advantage in periods of strong commodity prices in locking in a
portion of forward production at favourable prices on a rolling forward 1218 month basis
at yearend therefore 30 million barrels of dated brent oil were hedged through
forward sales for 2013 at an average price of us1090bbl this volume represents
approximately 25 per cent of the group’s expected liquids entitlement production in
2013 48000 metric tonnes mt of hsfo which drives our gas contract pricing in
singapore was subject to collars covering the period to mid2013 with a cap of
us500mt equivalent to around us85bbl an additional 96000 mt have been sold
under monthly forward sales contracts for 2013 at an average price of us657mt these
two hedges cover approximately 32 per cent of our expected indonesian gas working
interest production for 2013
during 2012 embedded oil price collars and forward oil sales of 39 million barrels
and fuel oil collars and forward sales for 246000 mt expired at a cost of us607 million
2011 us1191 million which has been offset against sales revenue
oil hedge collars are incorporated within the pricing terms of physical off take agreements
avoiding the requirement to revalue them for accounting purposes a credit of
us96 million 2011 us280 million occurred in respect of past marktomarket
provisions for oil hedges which have now fully expired
foreign exchange
premier’s functional and reporting currency is us dollars exchange rate exposures relate
only to local currency receipts and expenditures within individual business units local
currency needs are acquired on a shortterm basis during the year the group recorded
a gain of us15 million on such shortterm hedging 2011 loss of us04 million in 2012
the group also issued €250 million longterm senior loan notes which have been
hedged under a cross currency swap in us dollars at a fixed rate of us1328€
interest rates
although the group’s borrowing facilities are defined in floating rate terms a majority
of its current drawings have been converted to fixed interest rates using the interest rate
swap markets on average therefore the cost of drawn bank funds for the year was
46 per cent marktomarket movements on these interest rate swaps amounted to
us25 million 2011 charge of us64 million which was credited to other comprehensive
income
cash balances are invested in shortterm bank deposits and aaa rated liquidity funds
subject to board approved limits and with a view to spreading counterparty risks
insurance
the group undertakes a significant insurance programme to reduce the potential impact
of physical risks associated with its exploration development and production activities
business interruption cover is purchased for a proportion of the cash flow from producing
fields for a maximum period of 18 months due to exceptionally bad weather in
december 2011 the banff fpso – which handled kyle production – lost its anchors and
the risers were severely damaged stopping kyle production for the foreseeable future
a claim for business interruption insurance and property damage is being negotiated
with the underwriters
million
us772
capital investment
million
us1 100
cash and undrawn
facilities 28   premier oil plc 2012 annual report and financial statements
going concern
the group monitors its capital position and its liquidity risk regularly throughout the year
to ensure it has sufficient funds to meet forecast cash requirements sensitivities are run
to reflect the latest expectations of expenditures forecast oil and gas prices and other
negative economic scenarios this is done to manage the risk of funds shortfalls or
covenant breaches and to ensure the group’s ability to continue as a going concern
despite economic volatility the board consider the expected operating cash flows of
the group and the headroom provided by the available borrowing facilities give them
confidence that the group has adequate resources to continue as a going concern as a
result they continue to adopt the going concern basis in preparing the 2012 annual
report and financial statements
business risks 
premier’s business may be impacted by various risks leading to failure to achieve
strategic targets for growth loss of financial standing cash flow and earnings and
reputation not all of these risks are wholly within the company’s control and the
company may be affected by risks which are not yet manifest or reasonably foreseeable
effective risk management is critical to achieving our strategic objectives and protecting
our assets personnel and reputation and therefore premier has a comprehensive
approach to risk management
a critical part of the risk management process is to assess the impact and likelihood of
risks occurring so that appropriate mitigation plans can be developed and implemented
risk severity matrices are developed across premier’s business to facilitate assessment of
risk the specific risks identified by departments project teams corporate functions and
business units are consolidated to provide an oversight of key risk factors at each level
from operating level through business unit management to executive committee and
the board
for all the known risks facing the business premier attempts to minimise the likelihood
and mitigate the impact according to the nature of the risk premier may elect to
tolerate risk treat risk with controls and mitigating actions transfer risk to third parties
or terminate risk by ceasing particular activities or operations premier has a zero
tolerance to financial fraud or ethics noncompliance and ensures hses risks are
managed to levels as low as reasonably practicable whilst managing exploration and
development risks on a portfolio basis
the group has identified its principal risks for the next 12 months as being
• health safety environment and security hses
• production and development delivery
• exploration success and reserves addition
• host government – political and fiscal risks
• commodity price volatility
• organisational capability
• joint venture partner alignment and
• financial discipline and governance
further information detailing the way in which these risks are managed is provided
on pages 5253
financial review continued
million
us268
acquisitions premier oil plc 2012 annual report and financial statements   29
key performance indicators
premier measures its performance in line with its strategic objectives of growing the
value of the underlying assets of the business and creating significant returns for
shareholders specifically key performance indicators kpis are used to measure
progress against agreed targets in the areas of safe responsible and sustainable
operations growth through exploration development production and acquisitions
and maintaining financial strength these kpis also link to senior management’s
remuneration
operating safely responsibly and sustainably 
premier is committed to operating responsibly in every part of the business success in
these areas inherently protects our assets our revenue streams and our reputation
health and safety performance is measured using total recordable injury rate trir per
million manhours and near miss high potential incidents hipo per million manhours
safety performance data includes both premier employees and contractors
premier’s trir performance improved in 2012 as the company sought to improve
performance by reinforcing procedures and standards frequent training and ongoing
communication a trir of 18 per million manhours was achieved in 2012 which
is below the trir target of 20 
as part of its safety performance management process premier tracks hipos which
include any event that might lead to significant injury environmental damage property
damage or security breaches premier continues to ensure that key lessons are learned
and disseminated for all hipos and companywide safety alerts are issued citing key
causes and preventative actions required premier’s hipo performance while still within
the target of 20 hipos per million manhours declined in 2012 2012 saw eight hipos
which equates to a frequency rate of 13 hipos per million manhours the 2013 target
is 15 hipos per million manhours
building the strong production base 
one of the metrics by which premier’s growth performance is measured is by the
compound annual growth rate in net asset value per share premier targets in excess of
10 per cent nav growth per share per year and over the sevenyear period to end2012
the company has achieved in excess of 15 per cent
premier also aims to build on the existing production base in order to sustain and
continue to deliver growth this is measured using daily average production and the
number of development projects being brought through to sanction average daily
production increased 43 per cent in 2012 to 577 kboepd due to a fullyear of production
from the new asia fields chim sáo and gajah baru which came onstream in late 2011
premier is targeting average production of 6570 kboepd for 2013 and a run rate of
100 kboepd once the catcher project comes onstream
0
2
3
4
1
18
24
actual
07 08 09 10 11 12
total recordable injuries rate trir
per million manhours
0
4
6
2
07 08 09 10 11 12
13
08
actual
high potential incident hipo frequency
per million manhours 30   premier oil plc 2012 annual report and financial statements
premier’s production goal is underpinned by the pipeline of
development projects being progressed across the portfolio and
the ability to commercialise and bring onstream these projects is
key to the company’s success in 2012 premier sanctioned four
development projects solan pelikan naga and dua
delivering growth 
premier looks to create future growth through exploration in
focused geologies and valueled acquisitions progress towards
this growth ambition is measured by reserves replacement risked
prospective resource added and finding costs
premier also undertakes acquisitions to access additional resources
in 2012 the company acquired 60 per cent of rockhopper’s
licence interests in the falkland islands including the sea lion
project and increased its stake in the bream project to 40 per
cent through a sale and purchase agreement with skeie energy
as exploration successes which included the carnaby discovery
in the uk north sea and badhra b north1 and k30 in pakistan
also added to premier’s reserve and resource base
reserves and resources increased 51 per cent to 773 mmboe
giving a reserve replacement ratio of 138 per cent in addition
2012 saw premier add approximately 250 mmboe of contingent
resources and in excess of 15 billion barrels of unrisked
prospective resources to its portfolio
premier added reserves and resources through exploration and
acquisition at an average cost of around us2bbl during 2012
maintaining financial strength
one of premier’s strategic objectives is to maintain financial
strength in order to invest in the future of the business and deliver
significant returns to shareholders 2012 was another strong year
with record profit after tax of us2520 million an increase of 
47 per cent and operating cash flow of us8082 million an
increase of 66 per cent
premier’s portfolio of crudes was sold at an average of
us1114bbl realised average gas prices a significant portion of
which tracks oil price movement achieved us834mscf in 2012
operating costs were stable in 2012 at us162boe rising cash
flows along with successful bank and bond market transactions
provide premier with the funding required for future growth
ability to add new capital and sufficient covenant headroom are
measured to ensure the company has the funds to meet forecast
cash requirements and maintain liquidity throughout the cycle 
577
404
08 09 10 11 12
0
10
20
30
40
50
60
70
working interest
production
kboepd
773
513
08 09 10 11 12
proven and probable reserves
contingent resources
0
100
200
300
400
500
600
700
800
reserves and resources
mmboe
1114 1119
08 09 10 11 12
0
20
40
60
80
100
120
realised oil price 
per barrel

834
851
08 09 10 11 12
0
1
2
3
4
5
6
7
8
9
realised gas price 
per mscf

8082
4859
08 09 10 11 12
0
100
200
300
400
500
600
700
800
900
0
100
200
300
400
500
600
700
800
900
cash flow from 
operating activities
 million
162
159
08 09 10 11 12
0
2
4
6
8
10
12
14
16
18
operating costs
boe
key performance indicators continued premier oil plc 2012 annual report and financial statements   31
corporate responsibility report
high ethical standards
premier is committed to applying the high ethical
standards necessary to maintain our reputation 
as a worldclass oil and gas exploration and
production company 
our reputation for doing the right thing enables us to access new licences enter new
countries build lasting relationships with local communities and ultimately to secure
our licence to operate we recognise that our licence to operate as an international
upstream oil and gas company has to be earned through responsible behaviour that
does not compromise the wellbeing of current or future generations 
we have policies and procedures in place to ensure that our investment and operational
decisions take appropriate account of the impacts that might arise from our activities
these policies cover business ethics human rights human resources health safety and
environment and community investment all policies are compliant with relevant
legislation and take due account of appropriate standards industry guidance and
relevant best practice 
premier commissions independent reviews or audits of its policies and their supporting
management systems to evaluate compliance with the requirements of the following
bodies the global reporting initiative gri the international petroleum industry
environmental conservation association ipieca oil and gas industry guidance on
voluntary sustainability reporting 2010 the carbon disclosure project ftse4good
and the united nations global compact of which premier is a signatory this report
summarises how we have evolved applied and delivered on our stated policies in 2012
and we explain any areas where we have not complied additional insight into each area
is reported in the corporate responsibility report 2012
the corporate responsibility report 2012 together with further details on our policies
and procedures are available on our website at wwwpremieroilcom 32   premier oil plc 2012 annual report and financial statements
corporate responsibility report continued
our global code of conduct
in june 2011 premier issued its global code of conduct and the associated due diligence process the code
is available in both english and bahasa indonesia for those employees and contractors based at our operations
in indonesia it is compliant with the united kingdom bribery act and covers the following key areas
• anticorruption 
• facilitation payments
• gifts and hospitality given and received
• charitable and political donations and
• appointment of intermediaries
scope of application
the code of conduct applies to employees at every level in the business and those associated with premier
such as contractors all of whom are required to behave ethically and with personal integrity this includes
adhering to laws in the countries in which we operate explore and have joint venture interests all employees
and associates are required to perform their duties in accordance with the code of conduct and to disclose
any potential and actual conflicts between personal interests and those of premier the code of conduct
requires all transactions relating to premier to be recorded in proper detail and according to applicable
accounting and reporting standards any breach of the code of conduct will result in disciplinary action and
in extreme cases will result in instant dismissal the audit and risk committee assists the board in monitoring
ethical business conduct as well as the effectiveness of the code of conduct and its supporting policies
training and monitoring
our legal team delivered a comprehensive set of workshops on the code of conduct and its requirements
to all business units worldwide during 2011 and 2012 each of our business units is analysed for risks relating
to corruption some being more exposed than others depending on geography and area of work the
content of our training was refined to take account of local nuances and cultural norms and thus better equip
local teams to manage business ethics risks an online training course was established in 2012 and was
completed by all employees and consultants all new employees are expected to complete the ethics
training programme within one month of joining the company a briefing on the content of the code of
conduct is also included in the induction programme for all new employees and consultants
whistleblowing hotline
premier encourages employees contractors and agency workers to voice their concerns to line managers if
they think the company or anyone working on behalf of the company has not acted in accordance with the
code of conduct premier provides a confidential and wellpublicised independent third party reporting
hotline for employees that feel unable to raise concerns in the normal way this hotline is available 24 hours 
a day seven days a week no reports were made through this service in 2012 or at any point over the last
three years 
no incidents of corruption or noncompliance with the code were identified in 2012
business ethics
integrity honesty and fairness are fundamental to the way we
conduct our business we will not engage in any activities including
bribery or corruption in any form that undermine the legitimate
business environment we are committed to transparency in all of
our dealings premier oil plc 2012 annual report and financial statements   33
human rights
in 2012 premier conducted a review of its human rights policy
against best practice standards such as the united nations
guiding principles on business and human rights and the position
of our peers in the oil and gas sector 
our revised policy more explicitly recognises the moral reputational and operational value of respecting
and promoting human rights both inside and outside of our company it includes the need to 
• engage with stakeholders in our efforts to respect and promote these rights
• recognise the development and cultural rights of external stakeholders as basic human rights
• recognise our responsibility to respect the rights of indigenous people in all countries where we operate
• help prevent manage and resolve conflict where we are in a position to do so
• ensure we are in no way involved or associated with the issue of forced involuntary or child labour
• ensure our security practices do not undermine the human rights of local communities
• encourage joint venture partners to adopt the principles in this policy
• consider withdrawal from relationships with business partners where there is no evidence that they are
moving towards the application of international human rights standards and
• use our legitimate influence to promote human rights outside our areas of operation 
our human rights policy is based on the fundamental rights set out in the universal declaration of human
rights and is guided by those rights enshrined in the core labour conventions of the international labour
organisation and by the united nations global compact principles our policy addresses the rights of our
employees including their health and safety as well as their security arrangements and working conditions
and the development rights of our external stakeholders in particular local communities
further detail on our performance and alignment with this policy is included in the corporate responsibility
report 2012 there were no reported violations of our human rights policy in the review period 34   premier oil plc 2012 annual report and financial statements
corporate responsibility report continued
employees
we aim to provide our staff with safe working conditions and just
and competitive terms of employment this is a core part of our
business and people strategy this means respecting all individuals
regardless of ethnic origin creed age or gender 
we are an equal opportunities employer when recruiting developing and dealing with employees and
service providers people will be treated fairly equally and without prejudice we respect the right of
individual employees to join a legitimate trade union through training and appraisal we encourage staff
to develop their own professional skills to the advantage of both the individual and the company
this sentiment is embedded in our employment policies which apply to all permanent contractual and
temporary staff as well as all job applicants there were no reported violations of these policies in 2012 there
were also no reported instances of discrimination and no use was made of our formal grievance procedures 
in 2011 premier launched a new people strategy to support its continued growth in exploration and
production the strategy is accompanied by a suite of updated tools and processes to facilitate the
recruitment development deployment and retention of high calibre employees it promotes efficiency
innovation knowledge sharing and leadership all of which are essential to the delivery of our business goals
2012 saw the continued rollout of this strategy across the group
to achieve this we will
• encourage open and honest communication 
• seek ways to continually improve our performance 
• assess and manage risks
• provide appropriate resources 
• maintain clean safe and healthy workplaces 
• investigate and learn from any incidents 
• plan and prepare for potential emergencies 
• maintain highquality documented systems and processes 
• seek external certification of key management systems and 
• meet or surpass statutory requirements 
health and safety
premier is committed to operating responsibly and will never knowingly
compromise our health safety or environmental standards to meet our
operational objectives our goals are to ensure the safety of everyone
involved with our operations and to protect the environment premier oil plc 2012 annual report and financial statements   35
in 2011 we introduced and communicated our golden rules the golden rules reinforce the hses policy
associated procedures and standards and have been established to help prevent the most common causes
of serious incidents in our industry continued implementation of the golden rules during 2012 has been a
key part of our commitment to excellence and continuous improvement in health and safety performance
premier continues to ensure that every employee contractor and individual at our operations understands
company rules and expectations every employee is accountable and has a personal responsibility for
health safety and environment employees are also expected to ‘stop the job’ if they see or believe
something can be better controlled or is unsafe
premier has been certified to ohsas 18001 and iso 14001 since 2004 for global drilling and since 2006 for
our indonesian production operations in 2012 we completed a number of ohsas 18001 and iso 14001
surveillance audits on our production and drilling operations during 2012 drilling anoa and balmoral
production retained their certifications and gajah baru was added to the scope of our indonesian
production operations certificate our chim sáo production operation in vietnam is working towards
ohsas 18001 and iso 14001 certification in 2013
occupational safety performance
in 2012 we worked 61 million manhours 2011 72 million manhours this decrease on the previous 
year was due to reductions in drilling manhours from 17 million in 2011 to 08 million in 2012 and in
construction from 28 million in 2011 to 20 million in 2012 most of these manhours 43 million vs 
59 million in 2011 were worked by contractors on our operations we expect to see a progressive 
increase in manhours during 2013 with a number of new projects continuing and coming into the
construction phase
key safety parameters and indicators                                                                                                                     2012              2011              2010
fatalities                                                                                                                                               –                 1                 1
lost work day cases lwdc                                                                                                           5                 7                 4
restricted work day cases rwdc                                                                                                2                 3                 9
medical treatment cases mtc                                                                                                      4                 5              10
total recordable injury rate trir                                                                                             18             24             28
high potential incident rate hipor                                                                                         13             08             16
 per million manhours worked 
note all safety statistics include both premier employees and contractors
total recordable injuries
our overall trir performance improved significantly from 24 in 2011 to 18 in 2012 showing a continued
improvement in performance over the last three years and meeting our 20 target trir performance at our
construction operations was exceptional at 00 2011 18 much improved at our production operations at
28 2011 61 but poor at our drilling operations at 75 2011 00 this overall positive trend in our trir
performance was largely due to significant improvements at our north sea operations where rates improved
from 94 in 2011 to 45 in 2012 following a series of sitespecific safety initiatives and leadership courses to
address the previously high number of mostly minor accidents including slips falls and finger injuries at our
production facilities our operations in asia continued to perform well with a trir score of 09 2011 15
our trir target for 2013 is 20 
process safety performance
insight into high potential incidents hipos and their rate of occurrence enable us to learn about how to
mitigate future incidents often by addressing the root causes we believe these hipos act as a leading
indicator of potential injury and complement the continued testing of asset integrity through our project
safety reviews psrs and safety case processes 36   premier oil plc 2012 annual report and financial statements
corporate responsibility report continued
high potential incidents
last year saw a slight increase in hipos per million manhours from 08 in 2011 to 13 in 2012 this was well
within our target of 20 the increase in rate from 2011 was due to a significant decrease in the number of
manhours but a small increase in the number of high potential incidents from six in 2011 to eight in 2012
seven of which occurred at our asia operations performance improved at our construction operations
where there were zero high potential incidents in 2012 2011 one all of the eight high potentials reported
in 2012 were investigated indepth corrective actions identified and their implementation monitored safety
alerts based on each incident were made available to all employees in order to share learning across the
group safety alerts are mandatory for all hipos but may also be issued where there are incidents or events
that require heightened awareness and caution our hipor target for 2013 is 15
loss of primary containment
measurement of loss of primary containment lopc is a new metric proposed by the international
association of oil and gas producers ogp we recognise further work is required to harmonise process
safety performance measurement across the industry and continue to work with ogp as members of its
process safety subcommittee to develop an industry approach to indicators and reporting that includes
leading metrics it is anticipated ogp will publish the first lopc industry data in 2013 and that this will be
able to be used to set future premier targets
in 2012 there were 41 lopc events 2011 35 at our operations of these none were tier 1 lopc events
2011 one there were seven reported tier 2 events 2011 five the remaining minor events 34 included
small gas leaks and contained oil spills that did not reach the environment tier 1 events are those where
there is a significant loss of containment from a process system ie gas over 500kg and oil over 1000kg
outdoor tier 2 are those releases of lesser consequence ie gas over 50kg and oil over 100kg outdoor
and some events defined by american petroleum institute api we measure the number of incidents or
rate per activity manhour lopcr at both our operated drilling and production operations and sum it as
a company metric
safety by design
premier has integrated process safety protocols into the psrs of all its projects these reviews provide
assurance that material hse issues have been identified and are being effectively managed throughout the
project lifecycle a typical project lifecycle will require six strategic reviews as a project moves from concept to
construction and then to operation these psrs align with our project approval gates at which time strategic
decisions are made to either progress a project further towards the operations stage or to delay or divest
safety cases are in place at all of our operated installations this safety case regime is aligned with the
regulated standards in the united kingdom we believe this represents best practice and we are committed to
implementing such cases at all of our operated production facilities worldwide even when not required by the
local regulatory regime a safety case is developed during the early stages of a project and becomes more
detailed as a project nears the operation stage a safety case must be in place before production commences
each case includes a review and impact assessment of the relevant process safety risks the requirement to
meet established safety benchmarks and the adoption of further steps to reduce risks to a level that is as low
as is reasonably practicable the alarp principle for our operating assets these are reviewed every five
years to ensure continued compliance safety cases are reviewed by either the local regulatory authority or
a competent independent third party to provide assurance that they comply with our standards  premier oil plc 2012 annual report and financial statements   37
environment
environmental assessment management and reporting forms a
major part of premier’s hse risk management process we conduct
baseline surveys and environmental and social impact assessments
for each new operated activity
this involves an assessment of the physical socioeconomic and biological environments including the
rights of indigenous peoples and biodiversity we measure and review each impact in turn and gauge both
its significance and how it can be reduced to a level that is as low as is reasonably practicable potential
actions to improve environmental performance are screened based on cost duration and impact to
determine which are feasible for implementation we periodically review these environmental impacts and
actions for our existing facilities to ensure we are complying with our policy of continuous improvement
environmental indicators and targets
we report our environmental performance in line with the ipieca oil and gas industry guidance on
voluntary sustainability reporting 2010 and to meet gri sustainability reporting guidelines our emissions
performance is benchmarked by contributing our data to an industry database compiled and published by
the ogp  as an oil company with production facilities in the north sea we also comply with the european
union emissions trading scheme and submit an annual externally verified report on our emissions profile
to the department of energy and climate change decc we also participate in the carbon disclosure
project where we achieved a carbon disclosure score of 66 out of 100 in 2012 2011 66
key environmental parameters and indicators                                                                                                     2012              2011              2010
greenhouse gas intensity tonnes per thousand tonnes of production                                242            305            185 
oil spills tonnes                                                                                                                             08             27             13
oil in produced water parts per million                                                                                      10              14              11
energy use gigajoules per tonne of production                                                                       20             26             21
note environmental data relates to premier operations only and does not include nonoperated joint ventures unless otherwise stated 38   premier oil plc 2012 annual report and financial statements
corporate responsibility report continued
climate change and greenhouse gas emissions
greenhouse gas emissions associated with hydrocarbon combustion at our operations amounted to 
890809 tonnes in 2012 2011 615000 tonnes this increase in total emissions was largely due to a full year
of production from our gajah baru and chim sáo operations in asia versus only a limited number of months 
in 2011
our operated emissions intensity decreased from 305 tonnes per thousand tonnes of production in 2011 to
242 in 2012 this was mainly due to reduced flaring at chim sáo versus 2011 additional contributing factors
included a reduction in development drilling and increased overall production from both our asian and north
sea assets our anoa and gajah baru facilities in indonesia delivered strong performance with an average
intensity of 175 tonnes per thousand tonnes of production 2011 139 tonnes and 119 tonnes per thousand
tonnes of production 2011 228 tonnes respectively our performance at gajah baru was lower than the
159 tonnes industry average published by ogp  despite the overall reduction of around 20 per cent we failed
to meet our intensity target mainly due to unexpected flaring at chim sáo in vietnam 
we calculate our greenhouse gas co
2
equivalent or co
2
e emissions both for operated assets and on an
equity basis for production across our global portfolio greenhouse gas intensity from flaring and fuel gas
combustion associated with our full equity portfolio amounted to 170 tonnes per thousand tonnes of
production 2011 172 tonnes
spills and discharges
the total volume of produced water discharged from our operations in 2012 amounted to 3905611 tonnes
2011 2055878 tonnes over 90 per cent of the total was produced by our north sea operations with the
increase in 2012 being largely due to the balmoral field after a period of shutdown in 2011 the average oil
in produced water decreased slightly from 139 parts per million weight ppmwt in 2011 to 100 ppmwt in
2012 this decrease in the oil concentration of produced water was mainly due to a reduction at balmoral that
averaged 103 ppmwt 2011 140 ppmwt the average concentration of oil in produced water discharged
by our anoa facility in indonesia also reduced to 107 ppmwt from 133 ppmwt in 2011
in 2012 there were 13 spills to the environment 2011 20 spills 11 of these were hydrocarbon spills 2011
16 spills eight of which were upsets of the produced water system at balmoral in the north sea the largest
of these was three barrels 2011 54 barrels the total volume of spills amounted to 08 tonnes 2011 27 tonnes
100 per cent 2011 90 per cent of which was associated with spills at our production operations there were
zero hydrocarbon spills at our drilling activities in 2012 we maintain oil spill contingency plans for each of our
operations and have ongoing contracts with oil spill response specialists to provide support in the unlikely
event of a major incident two other chemical spills occurred at our drilling operations in 2012 2011 four
spills totalling 002 barrels and 0002 tonnes 2011 13 tonnes premier oil plc 2012 annual report and financial statements   39
it also includes the need to 
• maintain timely constructive and transparent ongoing engagement with all stakeholders
• treat neighbours with respect and understanding acknowledging community governance and seeking
free and informed consent prior to initiating operations that have a potentially significant social impact
on the community
• work to achieve a net positive socioeconomic impact on local communities promoting opportunities
which enhance sustainable benefit
• support the socioeconomic sustainability and wellbeing of communities through local procurement and
other engagement with local business
• invest in wellplanned social projects that support the development priorities of host communities and
governments and seek to ensure that these are implemented in a way that leads to enduring benefit
• provide fair and adequate compensation for any losses for which we are liable
• provide local communities access to appropriate grievance mechanisms and
• encourage joint venture partners to adopt the principles in this policy 
this community investment policy is supported by a community investment management system that is
aligned with ipieca standards and that facilitates the systematic identification management evaluation and
budgeting of disbursements and engagements in host countries the procedures in this system have been
available to local business units via our business management system since late 2010
no noncompliances with this policy were reported in 2012
increased community investment in 2012
all of our operations are supported by local community engagement and development programmes
in 2012 premier disbursed a total of us674000 on charitable donations and community projects 2011
us427000 approximately 40 per cent 2011 30 per cent of this was disbursed in indonesia on long
standing community and environmental projects the progressive increase in our community investment
reflects the inclusion of charitable donations from our london norway and singapore offices as well as our
more mature operations in country we expect these investments to increase as premier develops new
upstream production operations in indonesia vietnam the north sea and the falkland islands
community investment
our revised community investment policy recognises the value
of building positive external relationships and partnerships with
communities governments nongovernmental organisations ngos
joint venture partners and other stakeholders robin allan joe darby tony durrant neil hawkings
40   premier oil plc 2012 annual report and financial statements
board of directors
jane hinkley david lindsell simon lockett andrew lodge
professor david roberts michel romieu mike welton premier oil plc 2012 annual report and financial statements   41
robin allan 53 joined premier from burmah oil in july 1986 working initially as a geologist after technical and new
venture roles he spent six years in south east asia initially managing premier’ s asian existing and new venture business
and later becoming premier’s country manager in indonesia he became a member of the premier board in
december 2003 as director of business development mr allan spent three years in asia as director – asia before
returning to london in october 2012 to take up the role of director business units
joe darby 64 joined premier’s board as a nonexecutive director in september 2007 mr darby has over 40 years
of experience in the energy sector including eight years with shell petroleum before becoming managing director of
thomson north sea ltd he has held a number of senior roles including chief executive with lasmo plc mr darby
is a nonexecutive director of alkane energy plc and gulfsands petroleum plc and has held nonexecutive roles at
nordaq energy plc british nuclear fuels plc mowlem plc and centurion energy inc he was chairman of mowlem plc
20052006 and faroe petroleum plc 20032007 mr darby is premier’s senior independent director and is a member
of premier’s audit and risk remuneration and nomination committees
tony durrant 54 joined premier in june 2005 after qualifying as a chartered accountant with arthur andersen he
joined lehman brothers in london initially as an oil sector analyst he moved to the investment banking division of
lehman in 1987 and from 1997 was a managing director and head of the european natural resources group in this
role he managed both client relationships and numerous transactions for a variety of european and north american
clients he joined the premier board in july 2005 as finance director in october 2012 he joined the board of
greenergy fuels holdings limited as a nonexecutive director and is chairman of their audit and risk committee
neil hawkings 51 joined premier in may 2005 after more than 20 years with conocophillips where he worked in a
variety of engineering commercial and management roles around the world undertaking assignments in the uk
dubai and indonesia he joined the premier board in march 2006 as operations director
jane hinkley 62 joined premier’s board in september 2010 as a nonexecutive director ms hinkley is a qualified
chartered accountant with executive experience primarily in international shipping having held managing directorships
at navion shipping as and gotaaslarsen shipping corporation she is a nonexecutive director of vesuvius plc which
supplies primarily the global steel and foundry industries and has been an independent director on the board of
teekay gp llc an international provider of marine transportation services for lng lpg and crude oil since 2005
ms hinkley has previously held a nonexecutive role at revus energy asa a norwegian exploration and production
company ms hinkley is the chairman of premier’ s remuneration committee and a member of the nomination committee
david lindsell 65 joined premier’s board in january 2008 as a nonexecutive director he was a partner at ernst 
young llp for nearly 30 years and has extensive experience across a range of industry sectors with a strong knowledge
of the oil and gas sector mr lindsell is currently a nonexecutive director of drax group plc and was deputy chairman
of the financial reporting review panel 20082012 mr lindsell is the chairman of premier’ s audit and risk committee
and a member of the remuneration and nomination committees
simon lockett 48 chief executive joined premier in january 1994 from shell and has worked in a variety of roles for
premier including the management of investor relations as commercial manager in indonesia and as country
manager in albania he became a member of the premier board in december 2003 as operations director he was
appointed chief executive in march 2005 mr lockett is a member of premier’s nomination committee
andrew lodge 56 has been exploration director of premier since april 2009 prior to joining premier mr lodge was
vice president – exploration at hess where he was responsible for europe north africa asia and australia for nine years
previously he was vice president – exploration asset manager and group exploration advisor for bhp petroleum
based in london and australia prior to joining bhp petroleum he worked for bp as a geophysicist mr lodge is a
nonexecutive director of egdon resources plc
professor david roberts 69 joined premier in june 2006 as a nonexecutive director professor roberts has over
30 years experience in all aspects of exploration worldwide and extensive knowledge of deep water areas sedimentary
basins stratigraphy and prospect assessment he spent 22 years with bp in a number of technical roles including
global exploration adviser and distinguished exploration adviser professor roberts is a nonexecutive director of
medserv plc and has established his own geoscience consultancy he is a visiting professor and fellow of royal holloway
university of london the university of southampton and ifp school in paris professor roberts is a member of
premier’s remuneration and nomination committees
michel romieu 73 joined premier’s board as a nonexecutive director in january 2008 mr romieu has over 30 years
experience in the international energy sector including 25 years with the elf group where he held several senior
positions including chief executive of elf uk and the group’s gas division he was elected president of the uk offshore
operator’s association for the year 1995 and held the position of director for gas of cre the french energy regulator
from 2000 to 2003 he has established his own consultancy specialising in providing advice to the gas industry and is a
lecturer at the french petroleum institute mr romieu is also president of uprigaz he is a member of premier’s audit
and risk and nomination committees
mike welton 66 joined premier’s board in june 2009 as a nonexecutive director and became chairman in october
2009 mr welton is a director of morrison utility services and high speed two the government owned llc set up to
examine high speed rail connections between london and the west midlands he sits on the advisory board of
montrose associates and alexander proudfoot mr welton was previously chairman of southern water services ltd
20082012 hanson plc 20052007 the turkishbritish business council and the uk government’s railway sector
advisory group he was also chief executive of balfour beatty plc 19992004 mr welton is the chairman of premier’s
nomination committee
directors’ report governance the company is required to make certain statements relating to the way it is governed as laid down in the uk corporate
governance code the code this report describes the manner in which the company has applied the main principles of
governance set out in the code and complied with the code provisions it is the board’s view that the company has fully
complied with the code throughout 2012 while the board supports the value of the code it does not believe that good
governance can be defined merely in terms of compliance with a set of rules 
the board is committed to high standards of governance and aims to create a culture which demands the same commitment
and performance in all our business activities this is enshrined in our code of conduct which was updated and rolled out to our
employees in 2011
the board 
the role of the board 
one major purpose of the board is to ensure that the company’s strategic objectives are properly pursued and that the major
business risks are actively monitored and managed this goes beyond regulatory compliance and puts the interests of our
shareholders as the board’s primary focus
the board is responsible for overall group strategy acquisition and divestment policy approval of major capital expenditures
the overall group debt and equity structure and consideration of significant financing matters the board has continued to focus
its efforts in 2012 on strategic issues which will create shareholder value monitoring performance against agreed objectives and
planning future business opportunities
board composition
the board of directors comprises the chairman chief executive four other executive directors and five independent non
executive directors biographical details of each including membership of board committees are set out in the board of
directors section of the annual report and financial statements details of the executive directors’ service contracts and the
nonexecutive directors’ letters of appointment are laid out in the remuneration report
chairman and chief executive
the chairman’s role is parttime and he is a nonexecutive director his key responsibility is the leadership of the board ensuring
its effectiveness in all aspects of its role and setting its agenda between board meetings the chairman is responsible for
ensuring the integrity and effectiveness of the boardexecutive relationship this is effected through meetings as well as
contact with other board members shareholders joint venture partners and host governments the chief executive is
responsible for the operational management of the business developing strategy in consultation with the board and then
implementing such strategy 
nonexecutive directors 
the nonexecutive directors bring independent judgement to bear on issues of strategy and resources including key
appointments and standards of conduct the nonexecutive directors have a particular responsibility to challenge
independently and constructively the performance of the executive management and to monitor the performance of the
management team in the delivery of the agreed objectives and targets in meeting this responsibility the chairman and the
nonexecutive directors meet periodically without the executive directors present and the nonexecutive directors meet once
a year without the chairman
we require that our nonexecutive directors are free from any relationship or circumstances that could materially interfere with
the exercise of their independent judgement the board considers each of the nonexecutive directors to be independent in
character and judgement 
nonexecutive directors are appointed for a specified term of three years subject to annual reelection and to companies act
provisions relating to the removal of a director the terms and conditions of their appointment are made available for
inspection all nonexecutive directors undertake that they will have sufficient time to discharge their responsibilities effectively
and any significant commitments are disclosed to the board prior to appointment changes to such commitments are disclosed
to the board on an ongoing basis
42   premier oil plc 2012 annual report and financial statements
corporate governance report
board composition
executive 
directors
nonexecutive 
directors
cut
cto
nex
cto
board composition
exec
dire
non
dire
45 55
length of tenure
0  3 years
4  6 years
7  10 years
3 ye
6 ye
0 y
length of tenure
0  3 ye
4  6 
7  10 y
27 27
46
board experience
oil  gas  
energy
finance
other industry
 g
rgy
anc
er 
board experience
oil  
ene
fina
oth
18
27
55 the board continued
senior independent director 
mr joe darby is the company’s senior independent nonexecutive director he is available to shareholders who have concerns
that cannot be resolved through discussion with the chairman or chief executive
appointments and development 
premier is an international business which has to manage a variety of political technical and commercial risks it is therefore
important that the board contains the appropriate mix of skills and experience to meet these challenges to this end the
nomination committee reviews the structure size and composition of the board and makes recommendations to the board
with regard to any adjustments that are deemed necessary in selecting new directors the committee prepares a description
of the role and capabilities required for a particular appointment
how the board operates
the board meets at least eight times each year and in addition a regular update conference call takes place in the months when
no formal meeting is scheduled the agenda for each board meeting is set by the chairman in consultation with the chief
executive and the company secretary board members receive a monthly report of the company’s activities which incorporates
an update on progress against objectives and the management of business risks 
the board has a formal schedule of matters reserved for the board a copy of which can be found on the company’s website
wwwpremieroilcom the schedule is reviewed by the board regularly key matters reserved are the consideration and
approval of 
corporate strategy • overall direction and strategy of the business
• new country andor business entry
• acquisition or disposal of interests 
finance • group debt and equity structure
• budget
expenditure • major capital expenditure and budgets 
• development plans and projects
• major acquisition 
risk management • recognising high impact business risks and risk mitigating strategies
• internal control systems in respect of finance operations and health safety
environment and security hses
corporate governance • the group’s corporate governance and compliance arrangements
succession planning • appointment and removal of directors and officers of the board
and appointments • appointment and removal of external auditor brokers and advisers to 
the company 
delegated authorities 
board committees
the board has established audit and risk remuneration and nomination committees each committee has formal terms of
reference approved by the board which can be found on the company’s website wwwpremieroilcom the company secretary
provides advice and support to the board and all board committees board committees are authorised to engage the services
of external advisers as they deem necessary 
premier oil plc 2012 annual report and financial statements   43 delegated authorities continued
the number of meetings of the board and its committees during 2012 and individual attendance by directors is shown below
audit 
board and risk remuneration nomination
number of meetings 847
1
1
attendance
r a allan 88 –––
j darby 88 44 77 11
a r c durrant 88 –––
n hawkings 88 –––
i j hinkley 88 – 77 11
d c lindsell 88 44 67 11
s c lockett 88 –– 11
a g lodge 88 –––
d g roberts 88 – 67 11
m romieu 88 44 – 11
m w welton 78 –– 11
notes
1 there were six scheduled meetings of the remuneration committee during the year the remaining meeting only attended by ms i j hinkley and
mr j darby was called to approve the detail of arrangements approved in principle by a prior scheduled meeting of the remuneration committee 
executive committee and management structure
the board has delegated the daytoday running of the group to the chief executive who has established an executive
committee exco to assist him in this role
during the year the structure of exco was enhanced with the creation of three new roles
• the role of director business units was created to manage performance of all business units and ensure coordination with
the functions the creation of this role has removed the need for a layer of management at the regional business unit level
• the role of strategy and commercial manager was created to ensure that the group’s longer term strategic needs are
properly addressed and
• the role of corporate services director was created to bring together a number of the critical service functions
the responsibilities of exco include the development of group strategy for approval by the board portfolio management and
the delivery of performance against the targets set by the board 
delegation of authority 
responsibility levels are communicated throughout the group as part of corporate accounting and through an authorisation
manual which sets out inter alia delegated authority levels segregation of duties and other control procedures this manual
was updated in 2012 to reflect the new organisational structure and the increased size of the group
board performance evaluation
the board believes that there is benefit in the periodic involvement of an independent external facilitator in the annual board
evaluation process as this brings independent perspective it has been the board’s practice to engage such an external
facilitator every two years and in normal circumstances an externally facilitated evaluation would have taken place in 2012
however as the board spent considerable time on strategic issues in 2012 it was decided that an external evaluation will be of
more value next year when the new strategy and organisation have bedded down and thus an internal evaluation process was
carried out in 2012
the board and committee evaluations were facilitated by the chairman the evaluation comprised a series of questions on
major issues which were used as the basis for the onetoone interviews by the chairman with all directors the interviews
covered a number of key areas including strategy succession planning board size and composition the roles and
responsibilities of the board and its committees risk management and the relationship between the board and management
the results of the reviews were considered by the chairman and the committee chairmen and were then discussed with the
relevant committees and collectively by the board as a whole 
the performance of individual nonexecutive directors was evaluated by the chairman with input from the committee chairmen
and the other directors the performance of the chief executive and other executive directors was evaluated by the chairman
and nonexecutive directors 
no major issues arose from the evaluation process and the directors have concluded that the board and its committees operate
effectively recommendations were made to further enhance the performance and effectiveness of the board and a process of
continuous improvement led by the chairman is in place
44   premier oil plc 2012 annual report and financial statements
corporate governance report continued induction information and support 
new directors receive a full induction to the company this consists of information covering the operations of the board as well
as meetings with the board chief executive and other executive directors all nonexecutives have direct contact with the
company’s senior management between board meetings and also visit the company’s operations in order to familiarise
themselves with its activities and to meet and engage with staff shareholders are given the opportunity to meet with new
directors upon request or at the next annual general meeting agm following their appointment the company has directors’
and officers’ liability insurance in place and details of the policy are given to new directors on appointment formal procedures
are in place to enable individual board members to take independent advice where appropriate 
conflicts of interest
a director has a duty to avoid a situation in which he or she has or can have a direct or indirect interest that conflicts or
possibly may conflict with the interests of the company formal procedures are in place to ensure the board’s powers of
authorisation of conflicts or potential conflicts of interest of directors are operated effectively the board determined that during
2012 these procedures were enforced and adhered to appropriately
risk management and internal controls in premier
the corporate governance process in premier is designed to determine the nature and level of risk that the company is willing
to take in pursuit of its strategy and to ensure that any risks taken are soundly managed and that the system of internal controls
is effective any system of internal control can provide only reasonable and not absolute assurance that material financial
irregularities will be detected or that the risk of failure to achieve business objectives is eliminated 
business management system
internal controls within premier are governed by the business management system bms this system is composed of the
policies standards procedures processes and guidelines for every function required to carry out premier’s business including
risk hses corporate social responsibility operations exploration business development finance and other business
support services corporate group functional management systems are complemented by local management systems within
the business units which are designed to supplement corporate policies standards procedures processes and guidelines with
those specifically required in order to operate and manage the business under local conditions and in compliance with local
laws and regulations
the bms is designed to manage rather than eliminate the risk of failure to meet our business objectives the effectiveness
of the bms is a function of both the adequacy of the system and compliance with the system premier’s audit and review
programme includes specific scope to review adequacy of and compliance by component business unit and functional
management systems at appropriate regular intervals 
the annual cycle of monitoring in premier culminates in the completion of declarations by business unit and functional
management confirming compliance with the group’s bms as well as identifying enhancements as part of a continuous process
for improvement of the effectiveness of management systems
risk management
premier believes that risk management is just part of good management which leads to quality decision making and
achievement of targets for growth of the business the risk management process is central to premier’s bms 
since the appointment of a group audit and risk manager in 2010 premier’s risk management system has been further
developed in accordance with the risk management principles and guidelines of iso 31000 risk management – principles and
guidelines the processes developed by the company cover all key elements of iso 31000
premier oil plc 2012 annual report and financial statements   45
strategy
architecture
risk protocols
continuous 
improvement
cycle
core process risk management continued
in early 2012 det norske veritas dnv carried out an assessment of the extent to which premier’s risk management system
is aligned with iso 31000 and found that premier had a well structured system of risk management that was strongly aligned
the core process for risk management lies at the heart of the system framework
this core process is used to manage the spectrum of risks which premier face from strategic geopolitical and other external
risks to operational financial and organisational risk
the context for risk management is established by development and communication of strategy growth targets team
performance deliverables and kpis 
a systematic process for identification and assessment of risk is undertaken across the company business units and functions
regular workshops are undertaken with input from independent consultants with specialist knowledge and from dialogue with
our partners to assist with risk identification and assessment and risks are reviewed on a regular basis to ensure that new risks or
exposures as a result of changes in the business or the business environment are captured 
a standard matrix of impact versus likelihood is used to assess risks at all levels in the organisation appropriate consideration is
given to risk dependency and amalgamation of similar specific risks across the organisation risks are categorised according to
a scale of major medium minor and escalated to the appropriate level
risk treatment includes risk acceptance or tolerance and active risk reduction measures risk appetite objectives are defined
and action plans are implemented particular attention is given to safety and environmental factors to ensure that residual risks
are at a level that is as low as reasonably practical 
the status of risks and progress with risk treatment plans are monitored continuously and reviewed periodically via
performance reviews workshops audits and risk assessments
the architecture of the organisation provides the framework for defining the accountability and responsibility for risk
identification and management and links the board and audit and risk committee to the executive committee and functional
and business unit management structure and enables risks to be escalated and managed at the appropriate level the group
audit and risk manager is responsible for the risk management system and the overall running of the process 
the risk protocols are the policy procedures and processes documented as part of the risk management system and key tools
used in the process the corporate risk register is the primary tool for risk management in premier the register is a webbased
tool which is updated at regular intervals the register facilitates recording of functional and business unit risks together with
their assessment definition of existing and new treatment plans for control and mitigation and assignment of responsibility at
the appropriate level in the organisation
a cycle of continuous improvement to the risk management system within the organisation is adopted and regularly reviewed
with both the executive committee via regional and functional performance reviews and the audit and risk committee 
as already noted premier’s risk management process has been developed significantly over the past three years in accordance
with the risk management principles and guidelines of iso 31000 initiatives are in hand to further embed risk management in
the group’s culture and business processes 
46   premier oil plc 2012 annual report and financial statements
corporate governance report continued
establish
context
monitor and
review
risk
assessment
risk
treatment risk management continued
audit and review
the effective operation of internal control procedures is reviewed by planned audits an annual programme of audit and review
is agreed between functional and business unit management and approved by audit and risk committee the programme
adopts a risk based focus and includes audit of management system effectiveness and control as well as targeting key
operational financial and organisational delivery milestones
a process of business control reviews has been developed and implemented across the group this process is designed inter
alia to provide assurance to the board that premier is embedding effective risk management into its operations significant
findings from each review are presented to the audit and risk committee a rolling threeyear plan to cover all operations 
is in place 
in addition where the company is the operator audits of joint venture operations are carried out by our joint venture partners
where one of our partners is the operator we participate in audits of these joint venture partners
the business management system risk management processes and programme of audits and reviews provide the board with
reasonable assurance that appropriate controls are in place to provide effective management of business risks and to safeguard
the group’s assets from inappropriate use or from loss and fraud 
communication with shareholders
communication with shareholders is given significant attention extensive information about the group’s activities is provided in
the annual report and financial statements the interim report trading updates and interim management statements all of
which are available to shareholders there is regular dialogue with institutional investors through meetings presentations and
conferences general presentations to analysts and investors for the fullyear and halfyearly results which are broadcast live via
the company’s website as well as other ad hoc investor events the chairman chief executive and finance director who are
the directors primarily responsible for dealing with shareholders ensure that other members of the board receive full reports of
these discussions the company’s website wwwpremieroilcom also provides detailed information on the group’s activities
in accordance with current regulations the company uses its website as its default method of publication for statutory
documents to reduce printing costs and help benefit the environment all shareholders are offered the choice of receiving
shareholder documentation including the annual report electronically or in paper format as well as the choice of submitting
proxy votes either electronically or by post all new shareholders receive hard copies of statutory documents until they elect or
are deemed to have elected otherwise
the company promotes the use of online shareholder services at wwwpremieroilsharescom on this website shareholders are
able to access their shareholding and to update their address or submit queries on their account directly to the company’s
registrars shareholders also have the ability to vote online prior to the 2013 agm the share portal also encourages
shareholders to register to receive communications by email rather than by post thus further reducing the number of
documents printed and distributed shareholders who have registered receive an email notifying them when the company has
added a statutory document to its website for each new registration processed the company will donate £1 to pure the clean
planet trust a uk charity dedicated to combating climate change
the company has posted guidelines on its website advising shareholders of how to recognise and deal with potential share
scams shareholders are advised to be extremely wary of any unsolicited advice or offers and to only deal with financial services
firms that are authorised by the fsa more information can be found in the shareholder information section of the investors
area of the company’s website wwwpremieroilcom 
enquiries from individuals on matters relating to their shareholding and the business of the group are welcomed and are dealt
with in a timely manner all shareholders are encouraged to attend the agm to discuss the progress of the group
by order of the board
s c huddle
company secretary
20 march 2013 
premier oil plc 2012 annual report and financial statements   47 as chairman of the audit and risk committee it is my responsibility to ensure that the
committee is rigorous and effective in its role of monitoring
• the integrity of the company’s financial statements and other formal announcements
relating to the company’s financial performance and the significant financial
reporting judgements they contain
• the effectiveness of the risk management and internal control systems including the
results of the programme of reviews of these systems and management’s response to
the review findings
• the effectiveness and objectivity of the company’s group audit and risk function
• the appropriateness of the company’s relationship with the external auditor and the
effectiveness and objectivity of the audit process
• the enforcement of the company’s code of conduct and the adequacy and security of
its whistleblowing procedure
the terms of reference of the committee are reviewed annually by the committee and then by the board and are available on
the company’s website wwwpremieroilcom throughout 2012 the committee consisted of myself joe darby and michel
romieu all of whom are independent nonexecutive directors the board is satisfied that the membership of the committee
meets the requirement for recent and relevant financial experience
the meetings of the committee are normally attended by the finance director the group financial controller the corporate
services director the group audit and risk manager and representatives of the external auditor the company secretary acts
as secretary to the committee other executive directors or senior managers are required to attend when significant risk
management or control issues relating to their area of responsibility are considered by the committee
the committee is required to report its findings to the board identifying any matters on which it considers that action or
improvement is needed and make recommendations on the steps to be taken
meetings 
the committee is required to meet at least three times per year and has an agenda linked to events in the company’s 
financial calendar
activities during the year
the committee met four times in 2012 and has met twice in 2013 to date
its january and march 2012 meetings focused primarily on the status of the 2011 risk management and internal control reviews
the 2012 plan for such reviews and the 2011 fullyear results and annual report and financial statements together with the
committee’s annual review of the effectiveness of internal controls at its june meeting the committee considered the results of
the group internal control reviews carried out in the first half of the year together with accounting and reporting issues relating
to the halfyear results and in august it reviewed the halfyear results in january 2013 it considered accounting and reporting
issues relating to the fullyear results reviewed the status of the 2012 risk management and internal control reviews focusing on
the significant findings and actions and reviewed and approved the 2013 audit plan for such reviews in march it reviewed the
2012 fullyear results the annual report and financial statements and its annual assessment of the effectiveness of internal
controls to enable the board to make its statement on internal control in the corporate governance report 
48   premier oil plc 2012 annual report and financial statements
audit and risk committee report
david lindsell
chairman of the audit and risk committee activities during the year continued
more specifically the responsibilities of the committee were discharged as follows
• the committee reviewed the group’s risk management process designed to identify and mitigate the key risks facing the
group there is an ongoing process of refinement and embedding of risk management best practice through the group 
in accordance with the principles and guidelines set out in iso 31000 in particular following the positive findings of the
external review carried out by det norske veritas in early 2012 the committee noted improved reporting of findings and
implementation of control improvements arising from reviews of the risk management and internal control systems these
measures will continue to be developed and reported on to the committee through 2013 and beyond we intend during
2013 to invite dnv to revalidate their 2012 assessment and provide a progress report on the development and embedding
of risk management process in the group
• the corporate risk register crr is the principal record of information about identified risks and the controls in place to
mitigate them at departmental assetproject business unit and corporate function levels ongoing development and
refinement of the crr during 2012 has enabled risks and mitigating processes to be described more completely and the
programme of financial and operational control reviews to be prioritised further against the most significant group business
risks as ranked in the crr crr functionality has also been improved to allow risks assessed to have a preselected potential
impact which can be measured in terms of effect on net present value or other severity of consequence to be flagged and
referred automatically up to the next levels in the organisation enabling more effective topdown monitoring of risk
• some 36 reviews of aspects of risk management and internal controls in operations and corporate functions were carried
out during the year in reviewing the findings from these reviews the committee noted with approval that reporting had
become more directed towards the group’s major risks allowing the committee to focus on the key issues and challenges
facing the group recommendations to improve internal controls andor to mitigate risks were agreed with the relevant
business unit or corporate function management after each review and progress in implementing the recommendations was
monitored by the group audit and risk manager
• the group continues to use both premier staff with the necessary expertise and experience and thirdparty specialists to
carry out the programme of review in addition the group obtains independent confirmation of the effectiveness of internal
controls from a variety of external sources including joint venture and governmental financial and operational audits 
• the committee reviewed the 2012 halfyear and fullyear financial results announcements and draft 2012 annual report 
and financial statements with the finance director and group financial controller and considered the findings from the
external auditor’s review of the interim results and their audit of the 2012 financial statements the committee considered in
particular the significant assumptions estimates and forecasts used in measuring items in the financial statements including
future oil and gas price assumptions oil and gas reserves’ estimates fair valuation of assets for the encore acquisition and
decommissioning cost estimates together with the financial statement items directly or indirectly affected by them such as
the recoverability of producing and exploration and evaluation assets deferred tax assets and depletion depreciation and
amortisation charges the committee noted that no significant deficiencies in the financial reporting system were identified
by the external auditor in the course of their audit the committee also reviewed the narrative in the annual report and
financial statements in particular section 1 directors’ report performance to assess whether the narrative is consistent
with the accounting information in the financial statements
• the fee proposals for the external audit and halfyearly review were considered and agreed and the committee reviewed
the scope and fees for nonaudit assignments awarded to the external auditor to satisfy itself that the assignments
concerned did not give rise to threats to the auditor’s independence and objectivity
• the performance and effectiveness of the committee was reviewed as part of the board performance evaluation process
the committee was considered to be operating effectively and in accordance with the financial reporting council
guidance on audit committees and 
• the committee met with the external auditor in the absence of management in march and no matters of significance were
drawn to the committee’s attention at this meeting
premier oil plc 2012 annual report and financial statements   49 group audit and risk function
we reported last year that the role of group audit and risk manager which was created in 2010 had evolved to the point where
the committee believed that the company had a function substantially equivalent to internal audit the group audit and risk
function has developed further during 2012 and the committee now considers it to be fully equivalent to an internal audit
function the committee approves the appointment or termination of appointment of the group audit and risk manager
external auditor
deloitte llp deloitte was initially appointed as external auditor of the company in 2004
the committee regularly reviews the issue of the independence of the external auditor this review considers the overall
relationship between the auditor and the company based on feedback from the company’s finance team and from the auditor
and the nature and extent of nonaudit services provided by the auditor and takes account of the safeguards established by the
auditor against loss of audit independence including rotation of the audit partner and other key members of the audit team
the committee believes that in certain limited circumstances nonaudit work may be carried out by the external auditor the
allocation of nonaudit work is considered by reference to the company’s policy on the provision of nonaudit services by the
auditor which can be found on the company’s website this policy is aimed at ensuring their continued independencethe use
of the external auditor for services relating to accounting systems or financial statements is not permitted nor are various other
services which could give rise to conflicts of interest or other threats to the auditor’s objectivity that cannot be reduced to an
acceptable level by applying safeguards the committee believes that there is nonaudit work such as certain assurance and
advisory services that may be best performed by the auditor as a result of their unique knowledge of the company any material
nonaudit work of this nature requires approval by the committee the policy and overall fees paid to our auditor are also
reviewed on an annual basis by the committee
deloitte are required to confirm to the committee that they have both the appropriate independence and objectivity to allow
them to continue to serve the members of the company the committee also requires the external auditor to confirm that in
providing nonaudit services they comply with the ethical standards for auditor issued by the uk auditing practices board
this confirmation was received for 2012
in accordance with the ethical standards for auditor the audit engagement partner rotates at least every five years the
current audit engagement partner is david paterson who has been in the role since the auditor’s limited review of the 2012
halfyear results
the committee reviews the expertise performance and effectiveness of the auditor on the basis of the reviews carried out
the committee recommended to the board that it should propose the reappointment of deloitte as the external auditor of
the company
by order of the board
d c lindsell
chairman of the audit and risk committee
20 march 2013
50   premier oil plc 2012 annual report and financial statements
audit and risk committee report continued premier’s business may be impacted by various risks leading to failure to achieve strategic targets for growth loss of financial
standing cash flow and earnings and reputation not all of these risks are wholly within the company’s control and the company
may be affected by risks which are not yet manifest or reasonably foreseeable
effective risk management is critical to achieving our strategic objectives and protecting our personnel assets the communities
where we operate and with whom we interact and our reputation premier therefore has a comprehensive approach to risk
management as set out in more detail in the corporate governance report
a critical part of the risk management process is to assess the impact and likelihood of risks occurring so that appropriate
mitigation plans can be developed and implemented risk severity matrices are developed across premier’s business to
facilitate assessment of risk the specific risks identified by departments project and asset teams business units and corporate
functions are consolidated and amalgamated to provide an oversight of key risk factors at each level from operations through
business unit management to executive committee and board level
for all the known risks facing the business premier attempts to minimise the likelihood and mitigate the impact according to
the nature of the risk premier may elect to take or tolerate risk treat risk with controls and mitigating actions transfer risk to
third parties or terminate risk by ceasing particular activities or operations premier has a zero tolerance to financial fraud or
ethics noncompliance and ensures that hses risks are managed to levels that are as low as reasonably practicable whilst
managing exploration and development risks on a portfolio basis
the key risk factors identified from this approach are represented in the matrix below and the accompanying table summarises
their potential impacts and our approach to managing them the assessment of the impact and likelihood takes into account
the risk mitigation measures currently applied 
premier oil plc 2012 annual report and financial statements   51
company risk factors
likelihood
rare low medium high
not significant
low
medium
high
extreme
impact
organisation
 capability
exploration
production and 
development 
delivery
political 
and fiscal
financial 
discipline and 
governance
explanation of risk factor movements compared with 2011 annual report
 impact on balance sheet from new operational activity
 ageing assets maturingmatured reservoirs
hses
commodity 
price volatility
production and 
development 
delivery
joint venture 
partner 
alignment
commodity 
price volatility
1
2
1
2 52   premier oil plc 2012 annual report and financial statements
company risk factors continued
key risk factor risk detail how is it managed
health safety
environment and
security hses
major process safety incident or operational
accident natural disasters pandemics social
unrest civil war
consequences may include accidents
resulting in loss of life injury andor
significant pollution of the local environment
destruction of facilities and disruption to
business activities
comprehensive hses and operations
management systems including emergency
response and oil spill response capability and 
asset integrity
active security monitoring and management and
regular testing of business continuity plans
learning from company and thirdparty incidents
production and
development delivery
uncertain geology and reservoir
performance leading to lower production
and reserves recovery availability of services
including fpsos and rigs availability of
technology and engineering capacity
availability of skilled resources maintaining
project schedules and costs as well as fiscal
regulatory political and other conditions
leading to operational problems and
production loss or development delay
consequences may include lower production
andor recovery of reserves production
delays cost overruns andor failure to fulfil
contractual commitments
geoscience and reservoir engineering
management systems including rigorous
production forecasting and independent reserves
auditing processes
operations development and project execution
management systems and cost controls together
with capable project teams
longterm development planning to ensure timely
access to fpsos rigs and other essential services
exploration success
and reserves addition
failure to identify and capture acreage and
resource opportunities to provide a portfolio
of drillable exploration prospects and
sufficient development projects to achieve
reserves addition targets
consequences may be that specific
exploration programmes may fail to 
add reserves and hence value failure 
to negotiate access rights or close
transactions could slow growth of reserves
and production and lead to loss of
competitive advantage
strong portfolio management and alignment with
strategic growth targets appropriate balance
between growth by exploration and acquisition
exploration management systems including
comprehensive peer review with focus on
geologies in core areas we know well and in which
we can build a competitive advantage
focused mergers and acquisitions effort focusing
on geographical and technical areas aligned with
our strategy diligence in acquisition process and
postacquisition integration to ensure targeted
returns
host government –
political and fiscal risks
premier operates in some countries where
political economic and social transition is
taking place or there are current sovereignty
disputes developments in politics laws 
and regulations can affect our operations 
and earnings
consequences may include forced
divestment of assets limits on production or
cost recovery import and export restrictions
international conflicts including war civil
unrest and local security concerns that
threaten the safe operation of company
facilities price controls tax increases and
other retroactive tax claims expropriation of
property cancellation of contract rights and
increase in regulatory burden it is difficult to
predict the timing or severity of these
occurrences or their potential impact
premier’s portfolio includes operations in both low
and higher risk environments premier actively
monitors the local situation and has business
continuity plans in each area which can be
activated depending on predefined levels of alert
premier strives to be a good corporate citizen
globally and fosters reputation by strong and
positive relationships with government and
communities where we do business premier
engages in respectful industrywide lobby and
sustainable corporate responsibility and
community investment programmes rigorous
adherence to premier’s business ethics policy and
code of conduct
continuous monitoring of the external
environment for emerging risks to the business premier oil plc 2012 annual report and financial statements   53
key risk factor risk detail how is it managed
commodity price
volatility
oil and gas prices are affected by global
supply and demand and price can be subject
to significant fluctuations factors that
influence these include operational issues
natural disasters weather political instability
or conflicts and economic conditions or
actions by major oilexporting countries
price fluctuations can affect our business
assumptions and can effect investment
decisions and financial capability
oil and gas hedging programmes to underpin our
financial strength and capacity to fund our future
developments and operations
premier investment guidelines ensure that our
development programmes are robust to downside
sensitivity price scenarios
organisational
capability
risk that the capability of the organisation
is not adequate to deliver plans for strategic
growth the capability of the organisation is
a function of both the strength of its human
resources and its business management
systems inadequate systems or lack of
compliance may lead to loss of value and
failure to achieve growth targets loss of
personnel to competitors inability to attract
and retain quality human resources and
competency gaps could affect our
operational performance and delivery of
growth strategy
premier has created a competitive remuneration
and retention package including bonus and long
term incentive plans to incentivise loyalty and 
good performance from the existing highly 
skilled workforce
premier is continuing to strengthen its
organisational capability to achieve strategic
objectives this includes resource planning
competency development training and
development programmes succession planning
including leadership development
continuous strengthening of business
management systems and controls as appropriate
to the size and market position of the company
joint venture partner
alignment
global operations in the oil and gas industry
are conducted in a joint venture environment
there is a risk that joint venture partners are
not aligned in their objectives and drivers
and this may lead to inefficiencies andor
delays many of our major projects are
operated by our joint venture partners and
our ability to influence our partners is
sometimes limited due to our small shares
in such ventures
due diligence and continuous and regular
engagement with partners in joint ventures in both
operated and nonoperated projects premier
takes strategic acquisition opportunities where
appropriate to gain a greater degree of influence
and control
financial discipline and
governance
risk that sufficient funds are not available to
finance the business risk of financial fraud
strong financial discipline and balance sheet
premier has an established financial management
system to ensure that it is able to maintain an
appropriate level of liquidity and financial capacity
and to manage the level of assessed risk
associated with the financial instruments premier
maintains access to capital markets through the
cycle the management system includes policies
and a delegation of authority manual to reasonably
protect against risk of financial fraud in the group
an insurance programme is put in place to reduce
the potential impact of the physical risks associated
with exploration and production activities in
addition business interruption cover is purchased
for a proportion of the cash flow from producing
fields cash balances are invested in shortterm
deposits with minimum a credit rating banks aaa
managed liquidity funds and a1p1 commercial
paper subject to board approved limits on behalf of the nomination committee i am pleased to present our report in 
relation to the financial year ended 31 december 2012
composition and role of the nomination committee
the committee meets under my chairmanship and in addition to myself comprises 
joe darby jane hinkley david lindsell simon lockett michel romieu and david
roberts the board considers the membership of the committee to be in compliance
with the code
the role of the committee includes
• reviewing the structure size and composition of the board and making
recommendations to the board with regard to any adjustments that are deemed
necessary this requires an ongoing assessment of the appropriate skillsmix required
at board level in light of the strategy of the company in the mediumterm
• responsibility for identifying and nominating candidates subject to board approval to fill board vacancies as and when they
arise and to prepare a description of the role and capabilities required for a particular appointment and
• reviewing the development and leadership potential of senior executives below board level and ensuring that appropriate
succession plans are in place for both board and senior positions
the committee met once in 2012 to discuss and agree on
• management succession – with emphasis on the new leadership development programme which was rolled out in the
organisation during the year and which is designed to develop the competence of our staff and
• the challenges facing the leadership of the business  with emphasis on the need for good governance clear
accountabilities and communication these issues influenced discussions at the board which resulted in organisational
changes in 2012 key elements of which are summarised in the corporate governance report
by order of the board
m w welton
chairman of the nomination committee
20 march 2013
54   premier oil plc 2012 annual report and financial statements
nomination committee report
mike welton
chairman the directors present their annual report on the affairs of the group together with the audited group financial statements for
the year ended 31 december 2012 the corporate governance report set out on pages 42 to 47 forms part of this report
results and dividends
the group’s net profit for the year amounted to us2520 million 2011 profit of us1712 million 
the directors propose a final dividend of 5 pence per ordinary share subject to shareholder approval at the 2013 agm the final
dividend will be paid on 14 june 2013 to shareholders whose names appear on the register of members on 17 may 2013
principal activities
the principal activities of the group are oil and gas exploration development and production the group operates 
through subsidiary undertakings and joint ventures details of which are shown in note 10 in the notes to the consolidated
financial statements
business review
the company is required by the companies act 2006 to set out in this report a fair review of the business of the group during
the financial yearended 31 december 2012 and of the position of the group at the end of the year the business review the
information that fulfils the requirements of the business review can be found in the following sections of the annual report and
financial statements
• chief executive’s review
• financial review
• company risk factors
• key performance indicators
• environmental employee social and community matters within the corporate responsibility report
the chairman’s statement chief executive’s review and the financial review also include details of expected future
developments in the business of the group
annual general meeting agm
the company’s 11th agm will be held on friday 7 june 2013 at 1100am the notice of the agm together with details of all
resolutions which will be placed before the meeting accompanies this report
directors
the directors who served throughout the year except as noted were as follows
• mr mike welton chairman
3
• mr robin allan
• mr joe darby senior independent nonexecutive director
4 5 6
• mr tony durrant
• mr neil hawkings
• ms jane hinkley
1 6
• mr david lindsell
2 4 6
• mr simon lockett chief executive
6
• mr andrew lodge 
• professor david roberts
4 6
• mr michel romieu
5 6
notes
1 chairman of the remuneration committee
2 chairman of the audit and risk committee
3 chairman of the nomination committee
4 member of the remuneration committee
5 member of the audit and risk committee
6 member of the nomination committee
biographical details of all directors can be found in the board of directors section of the annual report and financial statements
premier oil plc 2012 annual report and financial statements   55
report of the directors directors’ election
in accordance with best practice for ftse 350 companies as published in the financial reporting council’s uk corporate
governance code the code all directors will stand for annual reelection by shareholders 
with regard to the appointment and replacement of directors the company is governed by its articles of association the code
the companies act 2006 and related legislation the powers of directors are described in the corporate governance report
and in the matters reserved for board decision a copy of which can be found on the company’ s website wwwpremieroilcom
the company’ s articles of association may only be amended by special resolution at a general meeting of the shareholders
directors’ interests
the table below summarises the directors’ interests in shares that are owned outright this includes any shares owned by a
spouse and for executive directors also includes share incentive plan sip partnership shares and sip matching shares held for
more than three years 
at at at 
1 january 31 december 20 march 
name 2012 2012 2013
r a allan 185310 139229 139467
j darby 23108 23108 23108
a r c durrant 631185 849273 849511
n hawkings
1
340485 548282 548520
i j hinkley 4000 4000 4000
d c lindsell 17332 17332 17332
s c lockett 937573 1188692 1188930
a g lodge 139078 213732 213970
d g roberts –––
m romieu –––
m w welton 22531 22531 22531
notes
1 this includes ordinary shares held by mr n hawkings’ wife 138416 ordinary shares held as at 1 january 2012 31 december 2012 and as at 
20 march 2013
directors’ interests in share options deferred bonus shares deferred and matching share awards under the asset and equity
plan performance share awards deferred and matching share awards under the long term incentive plan and share incentive
plan entitlements are shown in the remuneration report together with details of the remuneration of all directors who served
during the year
directors’ indemnities
the company has granted an indemnity to all of its directors under which the company will to the fullest extent permitted by
law and to the extent provided by the articles of association indemnify them against all costs charges losses and liabilities
incurred by them in the execution of their duties
share capital
details of the issued share capital together with details of the movements in the company’s issued share capital during the year
are shown in note 19 to the consolidated financial statements the company has one class of ordinary share which carries no
right to fixed income each share carries the right to one vote at general meetings of the company
there are no specific restrictions on the size of a holding nor on the transfer of shares which are both governed by the general
provisions of the articles of association and prevailing legislation the directors are not aware of any agreements between
holders of the company’s shares that may result in restrictions on the transfer of securities or on voting rights details of
employee share schemes are set out in note 19 the voting rights in relation to the shares held within the employee benefit
trust are exercisable by the trustees details of the number of shares held by the employee benefit trust are set out in the
remuneration report on pages 58 to 79 no person has any special rights of control over the company’s share capital and all
issued shares are fullypaid
56   premier oil plc 2012 annual report and financial statements
report of the directors continued premier oil plc 2012 annual report and financial statements   57
substantial shareholders
at 20 march 2013 the company had received notification from the following institutions in accordance with chapter 5 of the
disclosure and transparency rules of interests in excess of three per cent of the company’ s issued ordinary shares with 
voting rights
notified notified
number of percentage of nature of 
name of shareholder voting rights voting rights holding
1
blackrock inc
†
11224700 9790 indirect
axa sa  group companies 40173814 8580 indirect
schroders plc 27072247 5118 indirect
ameriprise financial inc 24666346 4663 indirect
aviva plc
†
3859897 4870 direct
bear stearns international trading ltd
†
2552847 3109 direct
bnp paribas investment partners sa 16219276 3070 direct
norges bank 15905661 3010 direct
notes
† where notifications were made prior to the share split in may 2011 numbers have not been adjusted 
 where notifications were made prior to the issue of shares in respect of the encore transaction numbers have not been adjusted 
1 where the nature of the holding is both direct and indirect the larger holding has been quoted
supplier payment policy
the group’s policy in respect of its suppliers is to establish terms of payment when agreeing the terms of business transactions
and to abide by the terms of payment the group’s normal payment terms are four weeks 
hedging and risk management
details of the group’s policy on hedging and risk management are provided in the financial review a further disclosure has
been made in note 17 of the notes to the consolidated financial statements related to various financial instruments and exposure
of the group to price credit liquidity and cash flow risk
subsequent events
post balance sheet events are disclosed in note 26 of the notes to the consolidated financial statements
charitable and political donations
during the year the group made charitable contributions amounting to us396443 2011 us302221 no political
contributions were made during the year 2011 usnil
significant agreements – change of control
there are a number of agreements that take effect alter or terminate upon a change of control of the company such as
commercial contracts bank loan agreements property lease arrangements and employees’ share plans none of these
individually is considered to be significant in terms of their likely impact on the business of the group as a whole
furthermore the directors are not aware of any agreements between the company and its directors or employees that provide
for compensation for loss of office or employment that occurs because of a takeover bid
auditor
each of the persons who is a director at the date of approval of this annual report and financial statements confirms that
• so far as the director is aware there is no relevant audit information of which the company’s auditor is unaware and
• the director has taken all the steps that they ought to have taken as a director in order to make themselves aware of any
relevant audit information and to establish that the company’s auditor is aware of that information
this confirmation is given and should be interpreted in accordance with the provisions of s418 of the companies act 2006
a resolution to reappoint deloitte llp as auditor will be put to shareholders at the forthcoming agm
by order of the board
s c huddle
company secretary
20 march 2013 dear fellow shareholder
on behalf of the board i am pleased to present the 2012 directors’ remuneration
report for which we are seeking approval from shareholders at our annual 
general meeting 
the remuneration committee aims to ensure that our remuneration policy serves
shareholder interests and closely reflects the group’ s business strategy the committee is
mindful of the need to demonstrate the link between remuneration and performance and
to incentivise its employees t o this end premier operates a similar philosophy to pay
throughout the organisation and all employees including executive directors receive
awards under the same incentive schemes thus ensuring groupwide focus on common
business goals
during 2012 the committee undertook a full review of the executive remuneration
arrangements at premier taking into account shareholder views from the 2011
consultation the company’ s strategy market practice and evolving best practice
guidelines the review concluded that
• the pay mix being heavily weighted towards longterm variable elements is in the best interests of shareholders as it ensures
a longterm focus direct alignment with shareholders and a highly performanceoriented culture
• the annual bonus based on a corporate scorecard capturing financial operational and strategic objectives helps reward
shorterterm objectives key to achieving our longterm strategy
• the long t erm incentive plan ltip ensures alignment with shareholders being based on both absolute and relative t otal
shareholder return tsr and measured over a total of six years
• the significant deferral requirement of vested ltip equity pool and ltip performance share awards helps support staff
retention and lengthens the incentive time horizon
• against our comparators total cash ie salary plus bonus for our executive directors is below market the ltip is geared to
provide the opportunity to achieve above market levels of pay only through exceptional sustained relative tsr performance
over six years and
• the review of the company’ s underlying performance before ltip payouts are finalised ensures that the impact of external
factors are taken into account where appropriate the committee reviews a range of measures and not just those specified
in the plan to ensure this assessment is robust 
as a result of the review the committee concluded that the aims and structure of the remuneration packages are embodied in
the existing policy and therefore it remains appropriate for 2013 
the ltip is structured so as to reward both absolute and relative share price performance thereby directly aligning the interests of
executives and shareholders over the 2010 ltip cycle ending in december 2012 even though premier’ s absolute share price
performance was positive at 51 per cent pa the ltip equity pool threshold of 10 per cent pa was not met and consequently
no awards were earned for this element over the same period however premier’ s relative performance against its sector peers
was strong at just below upper quartile and consequently 2010 ltip performance share awards and 2010 ltip matching share
awards will partially vest in early 2013 at approximately 90 per cent and approximately 65 per cent of maximum respectively as
detailed later in the report the committee also considered the underlying performance of premier over the threeyear period
and concluded that the performance merits the awards made
remuneration issues across all sectors continue to be in the spotlight t o stay ahead of requirements we have incorporated a
number of changes in this report consistent with the draft proposals that have been tabled by the department for business
innovation  skills bis during 2012 however as set out in the notice of annual general meeting this year there will continue to
be a single advisory vote on this report 
on behalf of the board i would like to thank shareholders for their continuing support
yours sincerely
i j hinkley
chairman of the remuneration committee
20 march 2013
58   premier oil plc 2012 annual report and financial statements
remuneration report
jane hinkley
chairman of the remuneration committee compliance
this report has been prepared in accordance with schedule 8 of the companies act 2006 and the large and mediumsized
companies and groups accounts and reports regulations 2008 the company complied with the provisions of the uk
corporate governance code the code regarding best practice on the design of performancerelated remuneration the
report has been divided into separate sections for unaudited and audited information 
in line with the association of british insurers’ guidelines on responsible investment disclosure the committee has reviewed
the company’s remuneration policy and concluded that the policy will not raise environmental operational social or governance
risks by inadvertently motivating irresponsible behaviour eg one of the important factors in determining annual bonus
performance is the achievement of specific hses targets 
remuneration committee
the committee currently comprises four nonexecutive directors and met six times during the year the members of the
committee and their attendance are summarised below 
member throughout number of
committee member 2012 meetings attended
ms i j hinkley 3 7
mr j darby 3 7
mr d c lindsell 3 6
professor d g roberts 3 6
note
there were six scheduled meetings of the remuneration committee during the year the remaining meeting attended by only ms i j hinkley and mr j darby
was called to approve the details of arrangements approved in principle by a prior scheduled meeting of the remuneration committee 
the board considers that the membership of the committee is compliant with the code recommendations stephen huddle
company secretary acts as secretary to the committee nigel wilson corporate services director and lee johnson group
head of hr attend committee meetings as appropriate no individual is involved in determining his own remuneration
the determination of the remuneration of the nonexecutive directors is a matter reserved for the board excluding the
nonexecutive directors
the committee acts within its agreed written terms of reference which are published on the company’s website 
wwwpremieroilcom
committee’s main responsibilities
• considering and determining the remuneration policy for executive directors and senior management 
• considering and determining the total compensation package of each executive director within this agreed policy
• considering and advising on the general principles under which remuneration is applied to employees
• considering the design of and determining targets for the annual bonus plan for senior management 
• determining the quantum and performance conditions for the longterm incentive awards 
• determining the policy for pension arrangements service agreements and termination payments to executive directors and
senior management 
• determining the chairman’s fee
kepler associates kepler is the independent adviser to the remuneration committee kepler provides advice on remuneration
for executives analysis on all elements of the remuneration policy regular market and best practice updates and also attends
remuneration committee meetings kepler reports directly to the remuneration committee and is a signatory to the code of
conduct for remuneration consultants see wwwremunerationconsultantsgroupcom kepler provides no other services to 
the company
during the year the committee also took advice from capita employee benefits in relation to pension policy
premier oil plc 2012 annual report and financial statements   59 remuneration policy for all employees including executive directors
the company’s remuneration policy for all employees is to provide remuneration packages which reward them fairly and
responsibly for their contributions remuneration packages are intended to be sufficiently competitive to attract retain and
motivate individuals of the quality required to achieve the group’s objectives and thereby enhance shareholder value the
committee takes account of the level of remuneration paid in respect of comparable positions in similar companies the
committee is informed of pay and conditions throughout the group including how companywide pay tracks against the
market when awarding salary increases to executive directors the committee takes account of the salary increases across 
the group 
while all employees participate in the company’s incentive structures the package of executive directors in particular is
structured such that the greater part of total remuneration is delivered through longterm sharebased incentives to ensure
maximum alignment with shareholders these schemes provide a clear link between pay and performance ensuring that
superior remuneration is paid only if superior performance is delivered over a sixyear period
remuneration in 2012 
the table below reports a single figure for total remuneration for each executive director for 2012 calculated in accordance with
the methodology set out in the draft regulations issued by bis in 2012 the value of ltip awards shown here is different to what
has been disclosed under the directors’ emoluments table on page 71 the table below shows the value of ltip awards for
which the performance period ended during 2012 but will be released to participants at a future date the directors’
emoluments table on page 71 shows the value of ltip awards that were released to participants during the year 
s c lockett r a allan
1
a r c durrant n hawkings a g lodge
remuneration element £££££
base salary 530000 330000 360000 330000 330000
annual bonus 238500 148500 162000 148500 148500
ltip awards
2
1539166 951441 978982 951411 532859
pension 251800 166900 172200 140400 128700
benefits 22022 258674 23645 21395 24102
total remuneration 2581488 1855515 1696827 1591706 1164161
notes
1 mr r a allan received additional benefits for the year until 30 september 2012 relating to his expatriate position in singapore mr allan returned to
london in october 2012 full details of such benefits are disclosed in the directors’ emoluments table on page 71 
2 ltip awards reflect an estimated value of the 2010 performance share awards psa and 2010 matching share awards on 19 march 2013 the
committee determined that the 2010 psa and 2010 matching share award will vest as soon as the company enters an open period for dealing in
shares an average share price over the three months to 31 december 2012 £345 has been used to calculate the value of the ltip awards 
60   premier oil plc 2012 annual report and financial statements
remuneration report continued summary of executive director remuneration policy and structure
the key elements of the remuneration packages for executive directors are set out below
component objectives policy 
salary • support recruitment and retention • set with reference to three relevant comparator groups
comprising i international oil and gas sector companies 
ii the constituents of the ltip tsr comparator group and 
iii uklisted companies of a similar market capitalisation and
revenue to premier 
• executive director salaries to be around the midmarket 
of comparators
• when awarding increases the committee takes account of
company and individual performance the external market for
talent and salary increases across the group 
• adjustments are effective 1 january 
annual bonus • reinforces the delivery of key • opportunity of up to 100 per cent of salary for executive directors
shortterm financial and • based on the kpi scorecard for 2012 consisting of production
operational objectives exploration business development finance and hses measures
for 2013 the kpi scorecard is largely the same as 2012 but with
nav growth now included in addition payout will be partly
based with a 20 per cent weighting on performance against
personal targets 
• final bonus outcome is based on the committee’s overall
assessment of performance against the scorecard and overall
company performance 
deferred bonus • extends the time horizon of • any annual bonus earned in excess of 50 per cent of
the bonus salary is paid in shares and deferred for three years subject to
clawback which is explained on page 63
long term incentive • reinforces the delivery of absolute • three ltip elements equity pool allocation performance shares
plan and relative returns to shareholders and matching awards
• provides alignment with • awards under the equity pool are up to 100 per cent of salary
shareholders awards greater than 100 per cent of salary can be made at the
committee’s discretion and performance share grants are 125
per cent of salary 150 per cent for the ceo
• 50 per cent of the shares vesting from the equity pool and
performance shares are subject to compulsory deferral for three
years and are eligible for a potential match of up to 25  1
• vesting is based on i the change in equity value per share ii
premier’s tsr performance relative to oil and gas sector peers
and iii the committee’s assessment of underlying performance 
• performance is measured over a total of up to six years
• all ltip awards are subject to clawback
pension and benefits • provide competitive benefit and • executive directors receive a final salary pension or
pension provision equivalent contributions
• other benefits include medical cover and life assurance
share ownership • provides alignment with • executive directors are required to acquire a shareholding
guidelines shareholders worth at least 100 per cent of base salary 200 per cent for the
ceo through the retention of deferred bonus and ltip shares
service contracts and • provides alignment with • service contract for each executive director may be
exit payment policy best practice terminated on 12 months’ notice 
• termination payments will be limited to one year’s base salary
and benefits including pension rights
• annual bonus will be payable only for the portion of the notice
period worked
• ltip awards vest subject to good and bad leaver provisions
premier oil plc 2012 annual report and financial statements   61 executive director pay mix
the charts below illustrate the potential reward opportunities for executive directors for ‘low’ ‘median’ and ‘stretch’
performance see below for assumptions on performance scenarios based on longterm incentive grants made in 2012
remuneration is significantly geared towards performanceoriented pay with particular emphasis on longterm performance
for example at ‘median’ performance approximately 54 per cent of the ceo’s remuneration package is delivered through
variable components rising to approximately 90 per cent at ‘stretch’ performance the maximum value is delivered only if upper
quartile tsr is delivered against sector peers over six years with a requirement for upper decile performance in the last three
years the charts also include the actual remuneration delivered to the executive directors in respect of performance for 2012
for comparison 
62   premier oil plc 2012 annual report and financial statements
remuneration report continued
‘low’ performance assumes nil payout under all incentives 
‘median’ performance assumes bonus payout of 60 per cent of salary
ltip equity pool based on 1 per cent of the change in market value and
share price appreciation of 10 per cent per annum compound ltip
performance shares vesting at 25 per cent and ltip matching award
vesting at 625 per cent 
‘stretch’ performance assumes all bonus performance shares and
matching awards vest in full and equity pool share price growth of
20 per cent per annum compound the value of all longterm incentives
is their net present value
stretch
0
500
1500
2500
3500
4500
5500
6500
7500
8500
1000
2000
3000
4000
5000
6000
7000
8000
9000
stretch
median
low
actual 2012
projected
69
46 54
10
fixed
90
variable
100 0
31
stretch stretch
median
low
actual 2012
projected
10
fixed
90
variable
47 53
100 0
33 67
0
500
1500
2500
3500
4500
5500
6500
7500
8500
1000
2000
3000
4000
5000
6000
7000
8000
9000
s c lockett chief executive
£’000s
a r c durrant finance director
£’000s
stretch stretch
median
low
actual 2012
projected
14
fixed
86
variable
55 45
100 0
41 59
0
500
1500
2500
3500
4500
5500
6500
7500
8500
1000
2000
3000
4000
5000
6000
7000
8000
9000
stretch stretch
median
low
actual 2012
projected
10
fixed
90
variable
45 55
100 0
31 69
0
500
1500
2500
3500
4500
5500
6500
7500
8500
1000
2000
3000
4000
5000
6000
7000
8000
9000
r a allan director business units
£’000s
n hawkings operations director
£’000s
stretch stretch
median
low
actual 2012
projected
9
fixed
91
variable
45 55
100 0
41 59
0
500
1500
2500
3500
4500
5500
6500
7500
8500
1000
2000
3000
4000
5000
6000
7000
8000
9000
a g lodge exploration director
£’000s
    
    
  
 
    
    
  
 
    
    
  
 
ltip earned after 3 years
ltip earned after 6 years salary
pension  benefits
annual bonus
base salary
the salaries of the executive directors are as follows
salary from salary from percentage
1 january 2012 1 january 2013 increase
director position ££ 
s c lockett chief executive 530000 555000 47
r a allan director business units 330000 345000 45
a r c durrant finance director 360000 377000 47
n hawkings operations director 330000 345000 45
a g lodge exploration director 330000 345000 45
the above increases are lower than the average increases across the group’s operations of five per cent
the committee will continue to review salaries annually to ensure they remain appropriate particularly given the current highly
competitive talent market in this sector and the fact that it is critical to the company’s future success that we retain key talent annual bonus scheme 
in line with previous years executive directors participate in nonpensionable bonus arrangements the committee sets yearly
targets on the basis of a balanced scorecard comprising kpis and other corporate objectives payout is determined with
reference to the balanced scorecard after careful assessment by the committee and subject to the committee’s discretion
based on a broader assessment of overall company performance bonuses for executive directors are subject to a maximum 
of 100 per cent of base salary 
for executive directors and other senior management any annual bonus earned above 50 per cent of salary is deferred in
shares for three years deferred bonus shares remain subject to a ‘bad leaver’ provision annual bonus awards are subject to a
clawback provision in the event of a material misstatement of the company’s financial results gross misconduct or error in the
calculation of performance conditions
2012 annual bonus outcome 
in assessing 2012 performance the committee has taken into account the various measures of the five criteria below against
specific targets targets were set at the beginning of 2012 and designed to be stretching but achievable the exact targets
are not disclosed for reasons of commercial sensitivity however performance in relation to threshold base and stretch levels 
is detailed 
performance achievement
between
below threshold between base at or above
metric measures threshold and base and stretch stretch
health safety environment group total recordable injury
and security hses rate trir 3
production daily average mboepd 3
exit rate mboepd 3
final investment decisions 
fids approved in year 3
exploration risked prospective resources 
added mmboe 3
finding costs for 2c  2p 
resource adds boe 3
reserves replacement 3
finance net operating cash flow 3
business development strategic acquisitions 3
in addition to the achievement against specific targets the committee considered the wider overall company performance 
and awarded annual bonuses of 45 per cent of salary to the executive directors
the 2013 annual bonus structure is broadly similar to that used for 2012 but with nav growth now included in addition a new
element based on personal objectives will be included with a 20 per cent weighting 
long term incentive plan ltip
all employees participate in the company’s ltip  approved by shareholders at the 2009 agm thereby encouraging a focus
throughout the company on longerterm performance and alignment with shareholders 
the ltip is structured to reinforce the delivery of strong share price growth and relative stock market outperformance over the
longterm performance is assessed over a minimum of three years and over six years including the matching scheme vesting
is based on a combination of the absolute change in the company’s equity value per share and the company’s relative total
shareholder return tsr ie share price plus dividends performance against peers 
during the year the committee reviewed the choice of performance measures and in particular the sensitivity of tsr to
changes in oil price the committee concluded that tsr remains an appropriate performance measure as it rewards the
delivery of the company’s strategy and also aligns management’s interests with those of shareholders absolute tsr captures
the absolute return delivered to shareholders and relative tsr measures performance on a relative basis thereby helping to
negate the impact of uncontrollable factors such as oil price movements on the reward delivered through the ltip  
premier oil plc 2012 annual report and financial statements   63 long term incentive plan ltip continued
to optimise the link between reward and performance the plan allows the committee certain discretions on determining the
outcome of the ltip  based on its assessment of the company’s underlying financial and operational performance the
committee may 
• reduce the size of the equity pool
• allow for the equity pool to be fully funded when growth in equity value exceeds 20 per cent pa
• lift the cap of 100 per cent of salary under the equity pool
• decide whether or not to grant matching shares and
• reduce the level of vesting for performance shares and matching shares
in assessing the underlying performance of the company the committee has previously considered performance against the
five metrics noted below which are specified in the plan as a result of the review undertaken in 2012 the committee has
broadened the ‘inputs’ used to determine whether the tsr performance is reflective of the company’s underlying financial and
operational performance and from 2013 will also consider other measures such as net asset value per share finding and
development costs per barrel delivery of the strategy and relative tsr
underpin measures
return on invested capital 
reserves replacement 
operating cash flow 
earnings per share growth 
health and safety record 
further all ltip awards are subject to clawback in the event of a material misstatement of the company’s financial results gross
misconduct or material error in the calculation of the performance conditions 
awards under the ltip comprise three elements
equity pool awards vest after a threeyear performance period and are based on a share of a pool which is subject to
annualised growth in the company’s equity value per share the vested award is delivered in
shares and 50 per cent of the vested award is deferred for a further three years
performance share awards vest after a threeyear performance period based on the company’s tsr relative to a comparator
group of international oil and gas companies 50 per cent of the vested award is deferred for a
further three years
matching awards deferred equity pool awards and performance share awards are eligible for a matching award of
up to 25 times the number of shares deferred vesting after a further three years based on the
company’s tsr relative to a comparator group of international oil and gas companies
a single cycle of the ltip covers a total of six years
2012 2013 2014 2015 2016 2017 2018 
1 ltip equity pool cycle
2 ltip performance share cycle
performance period deferral period
award 50 of vested balance is released
award is released 
3 ltip matching share cycle
performance period
award vested award is
released 
for participants below senior management the deferral period is restricted to six months unless the employee elects to extend
the deferral period to three years in return for a grant of an ltip matching award
the structure of each element of the 2012 ltip is described in more detail below and it is the committee’s intention that awards
granted in 2013 will also be based on this structure 
64   premier oil plc 2012 annual report and financial statements
remuneration report continued equity pool award 
the value of the ltip equity pool is based on the growth in the company’s equity value per share over the performance period
see below if the company’s compound annualised growth is equal to 10 per cent per annum one per cent of the growth will
be credited to the ltip equity pool for growth of 20 per cent per annum or more 25 per cent of the growth will be credited
for growth of more than 10 per cent but less than 20 per cent between one per cent and 25 per cent of the growth will be
credited on a straightline basis all employees are eligible to participate in the ltip equity poolthe value of an entitlement is
calculated at the end of the performance period and is delivered in shares allocations awarded under the 2012 ltip equity pool
are detailed on page 75 
equity pool funding schedule
performance share award
performance share awards vest subject to the company’s threeyear tsr relative to a comparator group of oil and gas
companies the oil sector comparators have been selected on the basis of their similarity to premier with regard to several
factors including business mix and geographic location and are detailed on page 66
matching award
for executive directors and senior management 50 per cent of the shares vesting from the ltip equity pool award and ltip
performance share award are subject to compulsory deferral over three years and subject to the committee’s discretion are
eligible for a potential match of up to 25  1 dependent on the tsr performance of the company against the same comparator
group used for coterminous ltip performance share awards as detailed on page 66
percentage share award and matching award vesting schedule
premier oil plc 2012 annual report and financial statements   65
00
20
25
10
15
05
10 pa 20 pa
funding rate  of growth
growth in equity value per share
0
200
250
100
150
50 50
median upper 
decile
upper 
quartile
 percentage of shares which vest
tsr rank
matching 
award
performance share award tsr comparator group constituents by performance share award cycle
company 2010 2011 2012 company 2010 2011 2012
afren 333 jkx oil  gas 333
anadarko petroleum 77 3 lundin petroleum 333
apache 77 3 medco energi internasional 333
awe 33 7 melrose resources 33 7
bankers petroleum 77 3 newfield exploration 77 3
beach energy 333 nexen 333
cairn energy 333 niko resources 33 7
cairn india 333 noble energy 333
calvalley petroleum 33 7 noreco 33 7
carrizo oil  gas 333 oil search 333
coastal energy 77 3 ophir energy 77 3
dana gas 33 7 origin energy 77 3
det norske oljeselskap 333 pa resources 33 7
devon energy 77 3 ptt ep 77 3
dno international 333 rockhopper exploration 77 3
dragon oil 77 3 roc oil 33 7
endeavour international 33 7 salamander energy 333
energen 77 3 santos 333
enquest 77 3 serica energy 33 7
etab maurel et prom 333 soco international 333
faroe petroleum 77 3 talisman energy 333
gulf keystone 77 3 tullow oil 333
hardy oil  gas 33 7 vaalco energy 33 7
heritage oil 333 woodside petroleum 77 3
ltip vesting outcomes in 2012
the 2010 ltip award cycles completed their threeyear performance periods on 31 december 2012 as follows
• 2010 ltip equity pool cycle over the performance period the company’ s market capitalisation increased from £13417 million
to £18227 million equivalent to growth in equity value per share of 51 per cent per annum after including a £2500 million
adjustment to reflect the increase in the company’s share capital as a result of the acquisition of encore in january 2012
as a result awards under the 2010 equity pool will not vest as the threshold was not met 
• 2010 ltip performance share cycle over the performance period the company’s tsr relative to its peers was between the
median and upper quartile warranting vesting of 899 per cent and
• 2010 matching award cycle matched over deferred shares granted in 2010 under the aep 2007 award over the
performance period the company’s tsr relative to its peers was between the median and upper quartile warranting a
matching ratio of 164  1
the committee is satisfied that the recorded tsr is reflective of the underlying performance of the company in assessing the
underlying performance of the company the committee took into account amongst other factors the company’s earnings per
share growth cash flow return on invested capital reserve replacement and health and safety record as shown below 
66   premier oil plc 2012 annual report and financial statements
remuneration report continued
2010 2011 2012
028
037
048
2010 2011 2012
436
486
808
2010 2011 2012
124
140
154
2010 2011 2012
488
513
773
2010 2011 2012
284
236
179
earnings per share
increased profitability due
to increased production
and high oil prices
operating cash flow
net operating cash flow
after tax is also increasing
in the same context
return on invested capital
the number for 2012 has
been affected by share
issuance for encore
acquisition which had
no income stream
reserves and resources
significant increase in 2012
mainly due to farm in to
sea lion discovery
total recordable injuries
rate 2012 performance of
179 against a budgeted
target of 20
earnings per share  operating cash flow
m
return on
invested capital
reserves and resources
mmboe
total recordable
injuries rate
per million manhours ltip vesting outcomes in 2012 continued
on 19 march 2013 the committee determined that the 2010 performance share award psa and 2010 matching share award
will vest as soon as the company enters an open period for dealing in shares for the executive directors 50 per cent of the psa
will be released immediately on vesting with the remaining 50 per cent deferred for three years the ltip matching shares will
be released immediately on vesting the number of shares to vest in 2013 for each of the executive directors is shown in the
table below
value of 
vested 
equity pool vested lapsed vested lapsed
allocation performance performance matching matching
director £ shares shares shares shares 
s c lockett – 208381 23411 237754 124674
r a allan – 119757 13455 156023 81817
a r c durrant – 127740 14352 156023 81817
n hawkings – 119757 13455 156023 81817
a g lodge – 119757 13455 34695 18193
ltip awards granted in 2012
the table below summarises the ltip awards granted to executive directors in 2012 the performance for these awards will be
measured between 1 january 2012 and 31 december 2014
ltip s c lockett r a allan a r c durrant n hawkings a g lodge
equity pool vesting subject to change in 6 of 2012 425 of 2012 equity pool each
equity value per share equity pool
performance vesting subject to threeyear 150 of salary 125 of salary
share awards relative tsr 25 vests for
median performance with full 186532 96785 105584 96785 96785
vesting for upper quartile shares shares shares shares shares
matching share vesting subject to threeyear up to 25 x 50 of actual vested awards from 2009 equity
relative tsr 25 vests for pool awards and performance share awards
median performance with full 568952 397467 407287 397467 385202
vesting for upper decile shares shares shares shares shares
tsr performance
the chart below compares the value of £100 invested in premier shares including reinvested dividends on 31 december 2007
compared to the equivalent investment in the ftse allshare oil  gas producers index over the last five financial years the
ftse allshare oil  gas producers index has been chosen as it comprises companies who are exposed to broadly similar risks
and opportunities as premier 
fiveyear tsr performance
value of £100 invested on 31 december 2007
premier oil plc 2012 annual report and financial statements   67
£126
£108
ftse all share oil  gas producers index premier
£0
£50
£100
£150
£200
31 dec 07 31 dec 08 31 dec 09 31 dec 10 31 dec 11 31 dec 12 executive directors’ interests in shares
the table below summarises the executive directors’ interests in shares including those held under outstanding ltip  save as
you earn and share incentive plan awards as at 31 december 2012 full details of all outstanding awards are disclosed on pages
74 to 79
unvested
shares or shares 
subject to
owned deferred performance
outright shares conditions total
as at 31 held as at 31 held as at 31 as at 31
december december december december
director 2012
1
2012 2012 2012
s c lockett 1188692 487561 1793381 3469634
r a allan 139229 335427 1195105 1669761
a r c durrant 849273 347357 1191944 2388574
n hawkings 548282 352050 1141599 2041931
a g lodge 213732 251445 877931 1343108
total 2939208 1773840 6199960 10913008
note 
1 owned outright includes sip partnership shares sip matching shares held for more than three years and any shares owned by a spouse
formal shareholding guidelines exist which encourage the executive directors and other members of the executive committee
to retain no less than 50 per cent of the net value of shares vesting under the company’s deferred bonus and longterm
incentive arrangements until such time as they have achieved a holding worth 100 per cent of salary 200 per cent for the ceo
as the graph below shows all the executive directors hold shares with a value substantially higher than these threshold
shareholding requirements
shareholdings at 31 december 2012 against guidelines
note
includes value of deferred awards under the annual bonus asset and equity plan and ltip where performance conditions have been achieved and such
awards are subject to a holding period the value of shareholdings is based on the closing price of a premier share on 31 december 2012 £3365
sourcing of shares and dilution limits
awards under all the company’s share schemes may be met using a combination of market purchases financed by the company
through the premier oil plc employee benefit trust and newlyissued shares the company complies with the association of
british insurers’ recommended guidelines on shareholder dilution through employee share schemes awards under the group’s
discretionary schemes which may be satisfied by new issue shares must not exceed five per cent of the company’s issued share
capital in any rolling 10year period and the total of all awards satisfied via new issue shares under all plans must not exceed 
10 per cent of the company’s issued share capital in any rolling 10year period 
68   premier oil plc 2012 annual report and financial statements
remuneration report continued
shareholding guideline actual holding as percentage of base salary at 31 december 2012
0
200
400
600
800
1000
1200
s c lockett
200
1064
r a allan
100
484
a r c durrant
100
1119
n hawkings
100
918
a g lodge
100
474 sourcing of shares and dilution limits continued
as of 31 december 2012 7640386 shares were held by the employee benefit trust 2011 1973998 and the commitments to
issue new shares are summarised below
percentage percentage
of issued dilution of dilution
number of shares issued or committed to be issued in the 10year period to 31 december 2012 share capital limit limit used
new issue shares under asset and equity plan ltip and executive 
share option schemes within 5 per cent limit 9427112 178 26455545 356
as above plus save as your earn within 10 per cent limit 10764724 203 52911091 203
executive directors’ contracts of service and exit payments policy
details of the service contracts of the executive directors of the company are as follows 
unexpired potential
term of termination
director contract date notice period contract payment
s c lockett 091203 12 months rolling contract 12 months’ salary and benefits
r a allan 091203 12 months rolling contract 12 months’ salary and benefits
a r c durrant 010705 12 months rolling contract 12 months’ salary and benefits
n hawkings 230306 12 months rolling contract 12 months’ salary and benefits
a g lodge 200409 12 months rolling contract 12 months’ salary and benefits
the service contract of each executive director may be terminated on 12 months’ notice in writing by either party in accordance
with current market practice in such an event the compensation commitments in respect of their contracts could amount to
one year’s remuneration based on base salary and benefits in kind and pension rights during the notice period in line with
normal market practice an individual may receive an annual bonus for the proportion of a financial year worked before
cessation of employment but there will be no right to any bonus for any period of notice not worked there are provisions for
termination with less than 12 months’ notice by the company in certain circumstances if such circumstances were to arise the
executive director concerned would have no claim against the company for damages or any other remedy in respect of the
termination the committee would apply general principles of mitigation to any payment made to a departing executive
director and would consider each case on an individual basis 
in the event of an executive leaving the company the ltip rules provide for vesting in certain circumstances as follows
• if the executive leaves as a ‘good leaver’ eg through retirement death injury disability redundancy or for any other
reason if the committee decides unvested awards will vest on the normal vest date or earlier if the committee decides to
the extent that any performance conditions had been satisfied for awards other than those deferred into the ltip matching
plan there will also be a prorata reduction in the value of the awards to take into account the proportion of the vesting
period not served and
• if the executive leaves for any other reason ie is a ‘bad leaver’ unvested awards will lapse
in the event of a change of control of the company unvested ltip awards will vest immediately to the extent that any
performance conditions had been satisfied for awards other than those deferred into the ltip matching plan there will also be
a prorata reduction in the value of the awards to take into account the proportion of the vesting period not served
external appointments
executive directors are entitled to accept nonexecutive appointments outside the company providing that the board’s approval
is sought mr a r c durrant was appointed a nonexecutive director of greenergy fuels holdings limited on 1 october 2012
and has retained associated fees for 2012 of £10000 as a result of the acquisition of encore the company has a 2965 per cent
interest in egdon resources plc egdon and is entitled to board representation mr a g lodge was appointed to the board of
egdon as a nonexecutive director on 9 march 2012 and has elected to donate his fees to several charities 2012 £12346 
premier oil plc 2012 annual report and financial statements   69 nonexecutive directors 
nonexecutive directors have letters of appointment which are all effective for a period of three years subject to annual
reappointment by the members in the annual general meeting all of which have a notice period of three months there are no
arrangements under which any nonexecutive director is entitled to receive compensation upon the early termination of his or
her appointment
number of date of
year complete current expiry of
appointed years on appointment notice current 
director director the board letter period term
m w welton 2009 3 161012 3 months 161015
d g roberts 2006 6 190912 3 months 290615
j darby 2007 5 010910 3 months 010913
i j hinkley 2010 2 010910 3 months 010913
d c lindsell 2008 5 170111 3 months 160114
m romieu 2008 5 170111 3 months 160114
the company’s articles of association provide that the remuneration paid to nonexecutive directors is to be determined by the
board within the limits set by the shareholders fees for nonexecutives are reviewed at least every two years having regard to
the size of the company and the time commitments of the nonexecutives the board reviewed the fees of the nonexecutives
including the chairman and decided to increase them for 2013 by six per cent on the basis that the next review will not be
effective until 1 january 2015 the increase is broadly in line with comparable businesses the fees for 2012 and 2013 are set 
out below 
other nonexecutive directors
senior
committee independent
chairman basic fee chairmanship director
££££
2012 160000 50000 10000 10000
2013 169600 53000 10600 10600
70   premier oil plc 2012 annual report and financial statements
remuneration report continued premier oil plc 2012 annual report and financial statements   71
the information in this part of the report has been audited 
directors’ emoluments 
total emoluments paid to directors executive and nonexecutive for the year ended 31 december 2012 was £4209600 
2011 £3838900 
the remuneration paid to the executive directors during the year under review is summarised in the table below
shares
total total pension vested total
cash pension emolu emolu contri and remun
salary benefits bonus benefits other ments ments butions realisable eration
2012 2012 2012 2012
©
2012 2012 2011 2012
©
2012 2012
†
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
s c lockett
1
5300 220 2385 2021 – 9926 8760 497 22398 32821
r a allan
2
3300 216 1485 1169 2371 8541 8080 500 15984 25025
a r c durrant
3
3600 236 1620 1722 – 7178 6596 – 16174 23352
n hawkings
4
3300 214 1485 1404 – 6403 5407 – 16695 23098
a g lodge
5
3215 241 1485 747 – 5688 4951 540 6555 12783
total 18715 1127 8460 7063 2371 37736 33794 1537 77806 117079
notes
 the main benefits provided are medical and dental insurance car allowance life assurance health insurance and a subsidised gym membership 
©


Summary:
 06   premier oil plc 2012 annual report and financial statements
chairman’s statement
this strong operational
and financial performance
supports continuing
investment in new
opportunities an increasingly
material exploration programme
and the initiation of a dividend
payout for the year”
“
mike welton
chairman the industry context
2012 was a year of difficult macroeconomic conditions and depressed capital markets the
energy industry however has performed strongly and continues to present opportunities for
growth signs of recovery in western economies and world financial markets are at an early
stage but it is encouraging to start 2013 on a stronger note commodity prices have
remained remarkably stable providing a healthy backdrop for continuing investment and
new opportunities although costs are rising in some areas good projects are still earning
attractive rates of return
premier’s performance
premier has again achieved strong growth in the value of the underlying assets of the
business in 2012 we increased production by 43 per cent cash flow by 66 per cent and
report record profitability for a fifth successive year reserves and resources now amount to
773 million barrels of oil equivalent mmboe compared to 513 mmboe at the end of 2011
four new projects also received development approval during the course of the year while
we invested in excess of us250 million in acquisitions and us772 million in development
and exploration projects during the year balance sheet gearing remained stable at 36 per
cent and is well within our target range we continue to have good access to several
sources of debt capital both reducing our average cost of debt and extending its maturity
this strong operational and financial performance supports continuing investment in new
opportunities an increasingly material exploration programme and the initiation of a
dividend payout for the year
premier’s growth plans
building on the new fields which came onstream in indonesia and vietnam in late 2011
2012 saw a significant increase in group production 2012 average production of 577 thousand
barrels of oil equivalent per day kboepd will rise to a run rate of around 75 kboepd as two
new fields huntington and rochelle come onstream looking further ahead we have
made significant steps in progressing the solan and catcher projects which are expected
onstream in 2014 and 2016 respectively these new fields together with our existing
producing areas will underpin our mediumterm production target of 100000 boepd
we continue to invest in new project opportunities where we see the potential for attractive
returns for shareholders we are delighted to have secured the operatorship and a large
equity interest in the sea lion field in the falkland islands our project team is already
working closely with both the falkland islands and the uk governments to deliver an
approved development plan by the middle of 2014 we also look forward to our first
exploration campaign in the falkland islands which further builds up our increasingly
material drilling programme
our 2012 exploration programme delivered successes in the uk pakistan and indonesia
these are valuable additions to the portfolio due to their proximity to existing producing
assets in the uk central north sea our exploration drilling programme attempted to
replicate the successes we had in the catcher area in previous years however with the
exception of the carnaby discovery in a new play area west of the catcher development
the programme was unsuccessful this serves to underline the necessity as we grow our
production and development asset base to identify new basin opportunities for future
exploration away from the more mature areas in the north sea and south east asia our
exploration and new venture teams have done an excellent job in identifying and negotiating
entry into such opportunities offshore kenya in the north falklands basin in the phu khanh
basin in vietnam in the mandal high area in norway and in southern iraq over the course
of 2012 the team added approximately 1 billion barrels of oil equivalent bnboe of
prospective resources to the portfolio we look forward to maturing these for drilling over
the next two to three years success in any of these locations because of the nature of their
playopening potential will be transformational for premier