tullow oil plc
3rd floor building 11
chiswick park
566 chiswick high road
london w4 5ys
tel 44 20 8996 1000
fax 44 20 8994 5332
email informationtullowoilcom
website wwwtullowoilcom
this report is produced on material which contains 50 recycled and deinked pulp from post consumer waste
the remaining pulp contains fsc credited material from wellmanaged forests
designed by black sun plc printed by st ives westerham press
tullow oil plc 2009 annual report and accounts
2009 annual report and accounts
tullow oil plc
africa’ s
lead i ngin de pe n d e nt
o i l com pany africa’s leading
independent oil company
tullow oil plc is a global independent oil
and gas company with over 90 licences in
25 countries the group is headquartered
in london and employs nearly 900 people
worldwide tullow is listed on the london
and irish stock exchanges and is
a constituent of the ftse 100 index
we have a long history in africa and the
continent has been the major focus of
our activity and investment in recent years
as a result we are now within sight of
delivering first commercial production
from two new oil basins combined with
a highimpact exploration portfolio across
the continent and an approach to corporate
responsibility that aims to create shared
prosperity  tullow is establishing itself as
africa’s leading independent oil company
for more information visit wwwtullowoilcom
ecommunications
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cover
kingdom sefadazi lead stevedore
takoradi ghana
get more online at tullowoil
we are committed to improving our disclosure and communication
to increase the understanding of our business our policy is to be open
transparent uniform and timely
we will continue to upgrade
our corporate website
additional features
we will be incorporating new
features including the ability
to customise the site for
individual users
new content
we will be adding video
new content and an improved
‘major projects’ section to make
the site more interesting
more interactivity
we will be upgrading
site tools to make the
site more userfriendly
new reporting centre tullowoilreports
we are creating a central hub for our main corporate reports which is being launched as part of the online
2009 corporate responsibility report in may 2010
2009 annual report and accounts
we publish an online annual
report and this year will be
including a number of new
tools including the ability to
create your own report visit
httpara2009tullowoilcom
2009 corporate responsibility report
the 2009 corporate
responsibility report will
be published in may 2010
we will also publish an
online version visit
wwwtullowoilreportscom
2010 full fact book
we publish a fact book twice
a year in march and august
to coincide with results
reporting it contains lots
of additional operational
information to complement
the results announcement
and presentation contents
directors’ report corporate governance
wwwtullowoilcom 1
4 success and progress in africa
operations review africa 32
uganda 33
ghana and equatorial atlantic 37
jubilee special feature 39
other africa operations 47
operationsreviewrestoftheworld 50
europe 51
south asia 52
south america 53
directors’ report business review
1 creating stakeholder value
financial results 4
operational highlights 5
where we operate 6
how we are organised 8
how we create value 10
2 delivering on all fronts
chairman’s statement 14
governance highlights 17
key performance indicators 18
3 achieving top quintile growth
chiefexecutive’sreview 22
our strategy 24
our markets and industry 25
our approach to exploration
and production 26
what’s new
we demonstrate how
we create competitive
advantage through our
approach to exploration
and production
what’s new
we outline our governance
and management
framework
we explain how we create
value through expanding
and commercialising
our resource base
what’s new
we include governance
highlights up front
we explain how our 2009
performance impacts
bonus remuneration
what’s new
we have enhanced risk
disclosure and cross
linked risk with all
related information
we have expanded our
corporate responsibility
section and added
new content
what’s new
as we near agreement on
the ugandan preemption
and farmdown we show
key events from formation
of the lake albert rift
basin to first oil
with first oil this year in
ghana we have developed
a special feature to give
anoverviewofthismajor
project to date
what’s new
we show how the board
spent its time in 2009
what’s new
we explain
the 2009 board
evaluation process
finance review 56
risk management 62
7 creating shared prosperity
corporate responsibility 68
living our values 70
environment health and safety 72
our people 74
chairman’s introduction 78
boardofdirectors 80
corporate governance 82
directors’ remuneration report 91
other statutory information 101
statementofdirectors’ 106
responsibilities
independent auditors’ report for 107
the group financial statements
group financial statements 108
independent auditors’ report for 143
the company financial statements
company financial statements 144
five year financial summary 155
5 developing a significant asset base worldwide
6 funding for an exceptional set of opportunities
8 maintaining the highest standards of governance
9 financial statements
financial statements and supplementary information
directors’ report group overview
supplementary information
commercial reserves and 156
contingent resources summary
licence interests 157
shareholder information 161
contacts 162
index 163
glossary 164 lynda biribonwa environmental compliance advisor
sanjay patel senior systems administrator
kampala office uganda creating stakeholder value
we have a responsibility to create value and deliver benefits
for all our stakeholders value is created by doing what we do
to the best of our abilities
financial results 4
the 2009 results reflect a period of financial transition as
we invest in key development projects that will fundamentally
transform the business
operational highlights 5
it was a great year across tullow with jubilee first oil on track
record exploration success and strong portfolio management
where we operate 6
we have a global footprint that spans 25 countries over 90
licences and 202000 sq km of acreage combining worldclass
exploration opportunities and growing production
how we are organised 8
tullow has a strong governance and organisational framework
that is based on responsibility accountability and transparency
how we create value 10
tullow creates value in two ways we consistently grow our
resource base through successful exploration and strategic
acquisitions and then we commercialise those resources
through development and portfolio management
1 4 tullow oil plc 2009 annual report and accounts
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09 08 07
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19
salesrevenue
£582million
lower commodity prices and sales
volumes resulted in a 16 decrease
in sales revenue in 2009
operating profit
£95million
operating profit decreased by 68 due to lower
sales revenue significantly lower profit on asset
disposals compared with 2008 offset by a
decrease in exploration costs writtenoff
profit after tax
£19 million
profit after tax decreased by 92 mainly due
to lower operating profit and an ias 39 charge
of £37 million 2008 credit of £43 million
offset by a lower effective tax rate
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08 07
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309
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1
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7
8
9
10
09 08 07
60 60 60
operating cash flow
£374million
lower commodity prices and sales volumes
led to a reduction of 28 in operating cash flow
operating cash flow and equity placing proceeds
facilitated capital investment of £758 million
in 2009
basic earnings per share
19 pence
basic earnings per share decreased by 94 in
2009 primarily due to the reduction in profit after
tax and also an increase in issued share capital
during the year
dividend per share
60pence
with considerable opportunity to deliver
shareholder value by continuing to invest in
the business the board feels it is appropriate
to maintain the dividend at the 2008 level
the 2009 results are in line with expectations and reflect a period of financial
transition as we reposition the business we significantly strengthened our
balance sheet and have put in place a capital structure integral to delivering our
mediumterm strategy this enables us to invest in highimpact exploration
and develop significant production from two worldclass basins
financial results
directors’ report group overview wwwtullowoilcom 5
s trengthened
capital structure
a us2 billion refinancing
was secured in march
2009 and a further
us250 million corporate
facility was finalised in
december 2009 gross
proceeds of £13 billion
were raised from two
successful equity
placings in january
2009 and january 2010
coupled with the
anticipated ugandan
farmdown the group
will have successfully
restructured its balance
sheet and put in place a
more appropriate capital
structure for the
mediumterm delivery
of its growth strategy
directors’ report group overview
finance review page 56
operational highlights
first oil 2010
jubilee on target to deliver
jubilee phase 1 is on time and within its us31 billion budget
first oil is expected 40 months after the field was discovered
setting a new benchmark for deepwater development
uganda
preemption and farmdown
good progress is being made to align
interests in the lake albert rift basin and
facilitate an accelerated development plan
87 
exploration success
there were 13 discoveries
from 15 wells in 2009
highlights included
the 300 million barrel
jobirii discovery in
uganda the tweneboa
discovery in ghana and
the successful venus b1
exploration well in
sierra leone
uganda operations review page 33
exploration on page 26
jubilee case study page 39
66 million
hoursworked
good environment health and
safety performance delivered
in a busy year across tullow
corporate responsibility page 68
drilling operations uganda local flora ghana
atwood hunter rig offshore ghana
tim o’hanlon vice president africa process module installation fpso singapore 6 tullow oil plc 2009 annual report and accounts
where we operate
directors’ report group overview
africa we have materially enhanced our
exploration portfolio in 2009 through the success
of key wells in uganda ghana and sierra leone
e exploration d development p production key offices
madagascar e
cape town
senegal e
mauritania edp
tanzania e
congo drc e
côte
d’ivoire
edp
angola e
namibia d
countries 16
licences 50
people 338
acreage ‘000 sq km 130
exploration  appraisal wells 15
discoveries 13
development wells 70
production boepd 38500
kampala
uganda
• worldclass basin discovered
in 2006
• potential resource base of
over 2 billion barrels of oil
• 27 out 28 wells have
encountered hydrocarbons
• accelerated ea programme
planned for 2010
• working with potential long
term partners and government
to achieve efficient basinwide
development plan
• potential full scale production
rates of over 200000 bopd
• over 80 incountry employees
côte d’ivoire
• three exploration blocks – two exciting
deepwater blocks and one shallow water block
• production from espoir field – facilities upgraded
• south grand lahou1 well – no hydrocarbons
discovered but provided significant data
ghana
• worldclass jubilee field discovered 2007
• plan of development approved 2009
• project within budget and on schedule
for first oil q4 2010
• tweneboa field discovered 2009
• new accra office to open mid2010
over 130 employees incountry to date
sierra leone  liberia
• farmin to offshore licence provides
exposure to jubilee play in west
african equatorial atlantic
• venus b1 encountered hydrocarbons
proving a working petroleum system
• exploration well planned for 2010
mauritania  senegal
• 10 contiguous blocks
• production and
development activities –
chinguetti and banda fields
• highimpact exploration
opportunities with a range
of prospects identified
south africa
• key office in cape town
• over 100 employees including
geoscientists engineers
economists and finance staff
namibia
• energy africa deal in 2004
included 13 tcf kudu gas field
• kudu gastopower development
project in planning stage
gabon
• 2009 net average
production 12000 bopd
• backin rights exercised
on ebouri and onal fields
adding to production
• successful workovers on
echira and niungo fields
• exploration wells for 2010
africa operations review page 32
uganda ed
liberia e
sierra leone e
equatorial guinea dp
gabon edp
accra
ghana ed
congo brazzaville dp wwwtullowoilcom 7
rest of the world we are developing a global
portfolio with producing assets in europe and
south asia and highimpact exploration
opportunities in south america
directors’ report group overview
guyana e
portugal e
pakistan ep
london
dublin
ireland
french guiana e
countries 9
licences 43
people 332
acreage ‘000 sq km 72
exploration  appraisal wells 0
discoveries 0
development wells 4
production boepd 19800
pakistan
• agreements reached to sell
chachar and sarasuri gas
producing fields
• focus now on nonoperated
exploration activities
• shekhan1 well commenced
drilling q4 2009
bangladesh
• net average production from
bangora field 5050 boepd in 2009
• bangora3 tiein and workover
increased production to maximum
capacity levels
• offshore block ss0805 awarded
– contract negotiations to
complete first half of 2010
ireland
• key office in dublin – location
of first tullow office
• 50 employees including
geoscientists engineers finance
and commercial staff
french guiana
• shell and total farmin to guyane
maritime licence
• aim to locate extension of jubilee play
in equatorial atlantic transform margin
• focus on highimpact leads in south
eastern part of the block
• 3d seismic survey completed in
q1 2010 – well planned for q4 2010
rest of the world operations review page 50
united kingdom
• established producing assets
in southern gas basin
• net production averaged 14450 boepd –
25 of total group production
• infill drilling on murdoch and boulton
fields added to cms production levels
• nearly 200 employees based in london
netherlands
• uk knowledge and experience of carboniferous
being transferred to dutch sector
• significant exploration portfolio in quadrants d  e
• regional 3d seismic programmes provide
encouraging results
• two exploration wells planned for 2010
bangladesh edp
netherlands e
united kingdom edp
suriname e 8 tullow oil plc 2009 annual report and accounts
how we are organised
directors’ report group overview
we continue to invest in building our team and structuring
our organisation so that we can deliver the exceptional growth
opportunities that the group has in its business today
• 11 members in total
• six nonexecutive directors
including the chairman and
senior independent director
• chief executive officer
• chief financial officer
• chief operating officer
• exploration director
• general counsel and
company secretary
• audit committee
• nominations committee
• remuneration committee
the senior management committee
smc is responsible for managing
tullow’s business on a daytoday
basis and ensuring safe delivery of the
agreed annual budget and plan and
effective risk evaluation management
and mitigation
this team of senior managers works
directly with the executive directors
keeping them fully informed of
business issues and opportunities
across tullow and the industry
tullow has an integrated
system for the management
of strategic business and
operational risk
the board of directors has
overall responsibility with
additional resources provided
by the audit committee
each executive director has
defined responsibility and
accountability for specific
aspects of risk
in each area executive
directors are supported
by members of the senior
management team or
managers with key
functional responsibility
read more
board of directors page 80
board committees page 86
corporate responsibility page 68
governance page 78
risk management page 62
at tullow a strong governance and organisational
framework defines the roles and responsibilities of
our board of directors and senior management it is
based on accountability transparency and achieving
the highest standards of ethics and integrity it also
plays a leading role in risk management
this framework holds the board and management
accountable for the group’s performance by ensuring
we critically evaluate the business decisions
strategies and risks we undertake it helps us to
engage with and respond to our many stakeholders
this in turn helps to protect and build our reputation
and create longterm sustainable growth
board of directors board committees risk management
senior management committee
executive directors wwwtullowoilcom 9
directors’ report group overview
• external affairs • environment
health  safety ehs
• commercial
• engineering
• major projects
• operations
• production 
development
• well engineering
• business systems
• corporate planning
 economics
• finance
• internal audit
• investor relations
• risk  marketing
• supply chain
management
• legal
• compliance
• human resources
• secretariat
• global exploration
leadership team
• exploration 
appraisal business
• exploration new
ventures
• group geosciences
• geophysical
technology
graham brunton group ehs manager
rosalind kainyah vice president external affairs
andrew marks chief information officer
joe mongan geophysical technology manager
david mooney group supply chain manager
tim o’hanlon vice president africa
chris perry head of investor relations
peter sloan group legal manager
gertjan smulders group engineering manager
roger swaine group projects manager
mike williams group well engineering manager
brian glover uganda
dai jones ghana
brian kay angola
richard lee bangladesh
kemal mohamedou mauritania
peter owens namibia
kevin quinn dublin
david roux gabon
bill torr cape town
franco uliana côte d’ivoire
muzaffar virk pakistan
awa wane senegal
nick woodallmason tanzania
corporate functions incountry management
aidan heavey
chief executive officer
paul mcdade
chief operating officer
ian springett
chief financial officer
graham martin
general counsel and
company secretary
angus mccoss
exploration director
pete dickerson head of corporate planning  economics
chris flavell general manager exploration
gordon headley chief human resources officer
martyn morris general manager production  development
mike simpson group commercial manager
julian tedder general manager finance
brian williams head of risk  marketing
senior management committee 10 tullow oil plc 2009 annual report and accounts
how we create value
directors’ report group overview
tullow creates value in two main ways we grow our resource
base through successful exploration and strategic acquisitions
which complement our business in our areas of focus we then
commercialise those resources by efficiently developing fields
or by farming down and reinvesting for strategic advantage
1
growing our
resource base
portfolio management
capital allocation
cash ﬂow
funding
value
creation
we have developed a strong track record
of successfully acquiring assets and companies
which complement and extend our portfolio skill
set and business opportunities since 2000 we have
acquired and quickly integrated uk north sea gas
assets energy africa and hardman resources
each creating a step change which has contributed
to the transformation of tullow
successful exploration is often the most
costeffective way to add transformational
resources tullow finds oil and gas through
geological expertise and enhanced geophysical
prospecting technologies we balance highrisk
exploration drilling in frontier areas which have
lots of followup potential with lowrisk appraisal
and satellite drilling activity
explore
to find
acquire
to grow
value and sustainable longterm growth is created
byhavingabalancedbusinessinwhichweselectively
invest in key development projects and a material
annual exploration programme these activities
are funded by a combination of operational cash
flowdebtandequityfundingandproceedsfrom
portfolio management wwwtullowoilcom 11
working interest production
58300boepd
production is key to revenue growth and free cash flow generation
our mediumterm objective is to build a business with a production profile
that is capable of funding a major annual exploration programme
directors’ report group overview
2
commercialising
our resource base
total reserves and resources
894mmboe
our aim is to continuously grow our resource base to generate
valueadding development or dilution opportunities we achieved
437 organic replacement in 2009 and 1232 in 2008
strategic portfolio management dilutes selected
exploration and production assets and generates
additional cash flow for reinvestment into high
value growth opportunities it also provides a
platform for us to introduce new partners with
complementary skills gives host governments
the ability to participate and establishes a
market value for return on future investments
turning resources into reserves and then into
production revenue is one of our core strengths
we have a successful track record in managing
mature production operations and the fasttrack
development of major projects in ghana and
uganda is shifting our operating capability to
a different level
develop
to produce
dilute
to reinvest
0
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09 08 07
294
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257
560
642
oil gas
by type
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600
700
800
900
09 08 07
464
80
63
87
745
831
africa row
by region
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
09 08 07
40900
25450
19800
32200
41150
38500
oil gas
by type
0
10000
20000
30000
40000
50000
60000
70000
80000
90000
09 08 07
40300
25450
19800
32800
41150
38500
africa row
by region graham guy production superintendent
fpso construction site singapore delivering on all fronts
tullow achieved an exceptional business and operational
performance in 2009 with an unprecedented level and pace
of activity throughout the group we also delivered well
against our key performance indicators kpis and
effectively managed our principal risks
chairman’s statement 14
a firstclass performance in 2009 and an excellent start to
2010 puts tullow in a great position we continue to build on
our strong progress and create material opportunities through
our unique position in africa we are poised for major production
growth and our busy exploration programme continues our
capital structure is significantly strengthened and our future
growth and performance prospects are very bright
governance highlights 17
2009 built on what has been an extraordinary period of growth
and success for tullow throughout our development one
of our guiding principles has consistently been to become
a better run company
key performance indicators 18
we measure our progress against seven kpis and in 2009
added very specific deliverables in the areas of finance
portfolio management and for our major projects in
ghana and uganda
2 14 tullow oil plc 2009 annual report and accounts
chairman’s statement
directors’ report group overview
results in line with expectations
the group’s financial results were in line with
market expectations and reflect the stage we are
at in developing the business capital allocation
in recent years has focused on building and
commercialising our resource base with first oil
from ghana later this year we are entering a phase
that should deliver major production growth which
should underpin a stronger financial performance
as a result tullow is in a period of transition and
this will be reflected in our 2010 and 2011 results
in 2009 the group’s financial results were down
compared with a record 2008 this is mainly as
a result of lower production volumes lower
commodity prices and an increased charge for
ias 39 financial instruments in addition while
exploration writeoffs in 2009 were lower than 2008
the group had less profit on disposal of assets to
offset this as a result of lower levels of portfolio
management activity
continued exploration success
exploration and appraisal ea activity continued
apace delivering a record 87 success rate in 2009
highlights for the year include
• the 300 million barrel jobirii discovery in uganda
one of africa’s largest onshore oil fields
2009 was another great year for
tullow across the business our
people processes operations
and projects delivered on all fronts
over the years we have built a strong
reputation with host governments and
partners which has helped us to grow
and monetise our resources and
deliver value for all stakeholders
pat plunkett
chairman wwwtullowoilcom 15
tragedy has had on his family whom we continue
to support in addition we undertook a comprehensive
response spearheaded by paul mcdade our chief
operating officer and board director responsible
for ehs and full details are set out on page 73
overall our safety performance for the year was
satisfactory we achieved our target of a lost time
injury frequency rate ltifr of less than 10 but
we did not achieve our stretch target of 050 as
we recorded an outcome of 076 2008 054 total
recordable injuries declined to 20 2008 28 and
high potential incidents hipos declined to 10
2008 24 over 66 million hours were worked
in tullow in 2009 an increase of 18 on 2008
44 million of those hours were worked in africa
excellent environmental engagement
across the group a strong environmental
performance was achieved there were no major
environmental incidents and good progress was
made with toes tullow oil environment standards
some excellent work was undertaken with the ghana
jubilee environmental impact assessment eia and
public consultation process the french guiana eia
and the environmentally sensitive approach taken
to drilling the ngassa2 well in uganda while
these case studies will be fully documented in our
upcoming 2009 corporate responsibility report
further information is available in the corporate
responsibility section on page 72 of this report
• the commercial threshold for development of the
lake albert rift basin in uganda was comfortably
exceeded with a 96 drilling success rate to date
• an ongoing ea campaign in ghana confirmed
significant further potential
• the tweneboa discovery indicated the potential
of another worldclass oil and gas accumulation
some 25 km west of the jubilee field and
• the successful venus b1 exploration well in
sierra leone demonstrated a petroleum system
that spans two of the most exciting and highly
prospective basins in the world today
solid production and fasttrack development
excellent performance was achieved by production
and development highlights include
• efficient execution of incremental development
projects throughout our portfolio of assets to
achieve production of 58300 boepd in 2009
• setting a new industry benchmark for the
fasttrack development of the jubilee field
which is on target to deliver first oil in the
fourth quarter of this year
• best in class deepwater well delivery by the
tullow well engineering team and
• initiating development work in uganda that is
targeting first commercial oil in 2011 with early
production from well testing in 2010
creating value for all stakeholders
our vision is to be the leading global independent oil
and gas company to achieve this we have a clear and
consistent strategy and a longterm perspective on
how we develop our business this means we protect
our reputation carefully manage and mitigate risk
and invest in people and partnerships we also work
to ensure that we create the internal and external
operating environment tullow needs to successfully
continue our growth strategy and deliver our business
plans by doing all of these things well we create
competitive advantage for tullow and more importantly
we create longterm benefits for all our stakeholders
keeping people safe
our number one priority is to keep everyone who
works with tullow or lives in our local communities
safe we have a very clear health and safety hs
policy which is strongly supported by our ehs
leadership team and commitment statements
it is reflected in employee inductions continuous
training and careful monitoring and reporting to
tullow’s board and management
despite this in 2009 tullow had its first ever fatality
when a building contractor died at the bangora gas
processing facility in bangladesh we deeply regret
his death and are very saddened by the effect this
directors’ report group overview
0
70
140
210
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350
420
490
560
630
700
09 08 07
370
540
669
growth in total workforce
24
yearonyear increase in tullow’s total workforce in 2009 as
we continued to invest in building our team and organisation 16 tullow oil plc 2009 annual report and accounts
chairman’s statement continued
directors’ report group overview
strong portfolio management
on 17 january 2010 tullow chose to exercise
its right of preemption for the entire interests of
heritage oil plc our partner in the lake albert rift
basin in uganda a formal request for government
consent to transfer these assets to tullow was
submitted on 2 february 2010 the acquisition
price is expected to be up to us15 billion
tullow is now working closely with the government
to gain approval for the preemption of the heritage
interests in parallel with the farmdown process
which is now at an advanced stage two new
potential partners have been identified cnooc
and total and it is expected that each partner will
take a one third interest in each of the three blocks
presentations by all parties have recently been made
to the relevant ugandan authorities and tullow expects
the transactions to be signed in april 2010 this will
result in a unified partnership with considerable
experience and financial capability to enable uganda
to become a significant oil producing nation
prudent dividend policy
the group has very significant capital requirements
with forecast 2010 capital expenditure close to
£1 billion as a result the board feels it is best
to continue to be conservative in its approach to
tullow’s dividend policy and that it is appropriate
to maintain the final dividend at the 2008 level
the final dividend proposed is 40 pence per share
which brings the total payout for 2009 to 60 pence
per share 2008 60 pence per share the dividend
will be paid on 21 may 2010 to shareholders on the
register on 16 april 2010 the annual general meeting
will be held on 12 may 2010 at haberdashers hall
in london
consistent strategy
with partners and governments we are working to
commercialise two worldclass basins in ghana and
uganda we are retaining our exploration focus with
up to 12 equatorial atlantic 10 ugandan and eight
wildcat wells planned in our 2010 ea programme
we are underpinning these activities with appropriate
financing and risk management strategies
our short to mediumterm objective is to build a
business with a production output and operational
cash flow that is capable of funding a major annual
exploration programme
dynamic risk management
risk management is an integral part of our strategy
and our operations as a business we could not
function at such a high level unless we are very
specific about the identification and management
of risk and how we respond if things go wrong
risk factors are reported monthly to the board in
an independent process which is validated by group
internal audit it is a dynamic system that continually
i would like to take this opportunity
to thank our shareholders and
banking partners for their
continued strong support which
is fundamental to the longterm
success of tullow
pat plunkett
chairman
building a very strong team
each year i write about the level of investment we are
making in building the tullow organisation 2009 was
no different the tullow team continued to grow with
182 new people joining during the year our total
workforce is now 880 people with 669 full time
employees and 211 full time contractors we are
also investing in developing incountry skills and
now have over 75 ugandan nationals working in
our operations in uganda and over 80 ghanaians
in our operations in ghana
our 2009 independent employee survey delivered
excellent engagement results and most representative
of all was staff turnover of only 20 during the year
this survey also demonstrated good engagement
with our values and culture which is an important
measure as the group continues to grow
strengthened capital structure
our finance team secured us2 billion and us250
million debt facilities in march and december 2009
and raised gross proceeds of £13 billion with two
successful equity placings in january 2009 and
january 2010 the combination of the group’s equity
and debt raising and the successful completion of
the ugandan farmdown will ensure that tullow is
adequately capitalised to fund its mediumterm
strategy further information on tullow’s strategy
longterm financing and risk management are on
pages 24 60 and 62
in february 2010 we received preliminary results
of an independent investment community perception
survey the results are very positive and the board
looks forward to a full presentation in april to review
and address as appropriate some of the strategic
considerations this research has raised wwwtullowoilcom 17
updates risk factors as they are identified or come
to the fore it is actionorientated and specifies what
must be done helping us to develop better mitigation
and responses to changes in the external operating
environment the key risks for tullow in 2010 are
execution risk in ghana and uganda and exploration
risk in the context of the high level of planned
exploration and appraisal activity across our
portfolio more detail on risk management
can be found on pages 62 to 65
key performance indicators
as our business has grown we have become more
disciplined and sophisticated in how we measure our
progress the group has seven kpis split between
two nonfinancial and five financial indicators
we also identified the need to recognise the major
transition the group is currently going through
specific performance objectives have therefore
been defined for finance portfolio management
and our major projects in ghana and uganda
while we did well overall against our performance
indicators and objectives there were three areas
where we did not achieve the top possible outcome
we fell marginally short of our production target
we reduced our safety performance achievement
by 50 as a result of the fatality in bangladesh and
the ugandan farmdown was not finalised in 2009
a very bright future
tullow had another outstanding year in 2009 and the
pace of activity continues as we move into 2010 with
some remarkable achievements already we plan to
consolidate the exceptional progress we have made
in the last five years and leverage our unique position
as africa’s leading independent oil company
pat plunkett
chairman
directors’ report group overview
governance highlights
governance highlights for the year include
• first year of full compliance with the combined code
• threeday board visit to the cape town office
• review of the structure and content of board meetings
to increase the focus and time spent on strategic matters
• launch and rollout of the code of business conduct and
a planned update this year
• review by internal audit of political and country risk processes
and resources
• board evaluation which concluded that considerable progress
had been made since the last external evaluation in 2007
• investment in building an external affairs function and
developing a programme to ensure we manage the significant
responsibilities that come with our major projects and
• briefings at all locations regarding tullow’s longstanding zero
tolerance towards any form of bribery or corruption
our approach to corporate responsibility
at tullow corporate responsibility incorporates social investment
and enterprise development risk management ehs supply chain
management and human resources hr investor relations and
external affairs and consultation with our stakeholders is also
part of our approach to corporate responsibility
shareholder feedback
we always welcome shareholder feedback and please feel free
to email pat plunkett at chairmantullowoilcom
corporate governance page 78
graham martin
general counsel and company secretary 18 tullow oil plc 2009 annual report and accounts
key performance indicators kpis
directors’ report group overview
000
025
050
075
100
125
150
175
200
225
250
09 08 07
195
054
076
000
025
050
075
100
125
150
175
200
225
250
09 08 07
15
23
20
0
8000
16000
24000
32000
40000
48000
56000
64000
72000
80000
09 08 07
73100
66600
58300
0
150
300
450
600
750
900
1050
1200
1350
1500
09 08 07
434
1232
437
lost time injury
frequency rate ltifr
076l tifr
aim
our top operational priority is
to keep people safe to measure this
the group’s objective is to deliver top
quartile industry safety performance
and achieve a preset absolute target
measurement
rigorous and consistent incident
reporting procedures are in place
throughout tullow these include
analysis followup remedial actions
and communication of learnings
hs is reported to the board
monthly and annually
risk management
hs is part of all operational
planning and activities we also have
clear hs policies and procedures
supported by strong ehs leadership
accountability and commitment in
each asset and at each level of the
business
2009 performance
while we achieved our baseline
target of 10 ltifr the group did
not deliver top quartile industry
safety performance in 2009 tullow
had its first ever fatality as a result
the bonus element relating to this
kpi was reduced by 50
working interest production
58300boepd
aim
production is key to revenue and
cash generation we aim to achieve
production in line with the group’s
annual budget and market guidance
measurement
daily and weekly production is
monitored from key producing
assets production is reported weekly
and monthly to senior management
and forecast updates are prepared
regularly during the year 
risk management
the group’s investment in major
field development in ghana and
uganda will significantly enhance
our production profile and is moving
tullow’s operating capability to the
next level a strong operational
performance in production planning
and monitoring mitigates against
unplanned interruptions
2009 performance
the group’s baseline production
target for 2009 was 58700 boepd
2009 actual production was
58300 boepd therefore the bonus
element relating to this kpi was
not awarded
reserves and resources
replacement
437
aim
replacement of reserves and
resources is focused on continuing to
grow the group’s production potential
measurement
reserves estimates for each field are
reviewed by an independent engineer 
in the event of significant new data or
a material change a review of each
field is undertaken every two years
resources estimates are also
produced by an independent engineer 
risk management
the group manages replacement
risk by maximising reservoir
performance in producing fields
through operational and technical
capability and continued
exploration success based
on focused material campaigns
2009 performance
the group achieved 437 organic
reserves and resources replacement
in 2009 this followson from a
record 1232 organic replacement
in 2008
staff turnover
20
aim
we aim to be the employer of
choice in the industry so that we
have the right resources and
capabilities to deliver our strategy
and business plans
measurement
we have a board approved hr
strategy and hr resources are
deployed throughout the group there
are systems to identify issues early
people who leave are debriefed so we
can improve our policies an annual
global employee survey is conducted
risk management
tullow’s best defence against
the disruption to the business
of a people skills shortage or
unexpected departures is to create
an environment that allows people
to work and contribute in the best
way possible and to recognise and
reward them appropriately for their
contribution
2009 performance
20 of staff left the group in 2009
compared with 23 in 2008 this is
a strong performance during a year
when the group’s total staff grew by
24 to 669 people following a 50
increase in 2008
we measure our progress through seven kpis that are closely
aligned with delivering our strategy which seeks to deliver
sustainable longterm growth four kpis are linked
to the bonus element of executive directors’ remuneration
nonfinancial financial the bonus element of
the executive directors’
remuneration is linked
to ltifr working interest
production cash operating
costs per boe and tsr
other kpis relating to
bonus remuneration
include finding costs per
barrel specific inyear
finance and portfolio
management objectives
and key project milestones
for ghana and uganda
wwwtullowoilcom 19
directors’ report group overview
00
08
16
24
32
40
48
56
64
72
80
09 08 07
505
590
728
0
60
120
180
240
300
360
420
480
540
600
09 08 07
474
519
374
0
10
20
30
40
50
60
70
80
90
100
09
08
07
66
2
99
operating cash flow before
working capital
£374million
aim
growing our business is capital and
cash intensive and we aim to ensure
in the medium term that capital
expenditure together with debt and
dividend commitments can be
serviced from strong operating
cash flow
measurement
operating cash flow is reported
monthly with regular forecasting for
longer periods to support longrange
planning and investment decisions
annual and project budgets require
board approval
risk management
strong financial and operating
management disciplined monitoring
and reporting longrange cash flow
forecasting and strong banking and
equity relationships assist the group
in managing liquidity
2009 performance
reduced commodity prices and lower
sales volumes led to a reduction of
28 in operating cash flow in 2009
the operating cash flow and equity
placing proceeds facilitated capital
investment of £758 million in 2009
total shareholder return
tsr
99
aim
our aim is to create shared
prosperity for all stakeholders and
our strategic objective is to achieve
top quintile tsr growth versus our
industry peer group
measurement
tsr – share price movement and
dividend payments – is reported
monthly and on an annual basis at
yearend to the board the industry
peer group is regularly reviewed
risk management
the board is responsible for the
execution of tullow’s strategy and it
is reviewed annually as part of three
year business planning being a well
run business delivering well against
business plans being open and
transparent and maintaining strong
capital market relationships
underpin delivery of tsr
2009 performance
the stretch target relating to the
bonus element for tsr is based
on top quartile performance and
an absolute return of 15 or more
in 2009 tullow was third out of a
16 strong peer group and delivered
99 tsr as a result the bonus
element relating to this kpi
was achieved
cash operating costs per boe
£728per boe
aim
cash operating costs per barrel of oil
equivalent boe are a function of
industry costs inflation our fixed
cost base and production output we
aim to maintain these costs within
strict predefined limits
measurement
cash operating costs are reported
monthly on an asset basis and are
monitored closely to ensure that they
are within preset parameters
risk management
a comprehensive annual budgeting
process covering all expenditure is
undertaken and approved by the
board monthly reporting highlights
any variances and corrective action is
taken to mitigate against the
potential effects of cost increases
2009 performance
in 2009 tullow set a baseline target
of £790 per boe and a stretch target
of £751 per boe cash operating
costs for 2009 were £728 per boe
and the bonus element relating to
this kpi was achieved
our strategy page 24
risk management page 62
remuneration report page 91
go online at wwwtullowoilcom
glossary
boe barrels of oil equivalent
boepd barrels of oil equivalent
per day
ehs environment
health and safety
hs health and safety
hr human resources
kpi key performance indicator
lti lost time injury
ltifr lti frequency rate
measured in ltis per million
hours worked
tsr total shareholder return
our strategy lina kodjowayo development geologist
london office uk achieving top
quintile growth
exploration success and consistent delivery in major projects
has transformed tullow into africa’s leading independent oil
company big projects bring big responsibilities and we want
to fulfil our role in the longterm sustainable development
of africa
chief executive’s review 22
2009 was a great year for tullow and we are clear on our
business plans for the next three years we have never been
in a better position to grow and take on new opportunities and
we look forward to 2010 with confidence and excitement
our strategy 24
our objective is to deliver top quintile tsr in our industry
peer group tullow ranks number one over a five year period
with 802 tsr and number three for 2009 with tsr of 99
our markets and industry 25
initial indications for the industry in 2010 are positive as demand
for oil is expected to rise as the global economy recovers
our approach to exploration and production 26
exploration and appraisal success is built on teamwork
scientific followthrough and strong relationships with partners
and governments production and development monetise
resources as quickly as possible and this focus is expected
to result in first oil from the jubilee field in record time
3 22 tullow oil plc 2009 annual report and accounts
chief executive’s review
directors’ report business review
tullow continues to develop a
business that creates value through
combining highimpact exploration
with lowerrisk appraisal and growing
production underpinned by a well
funded capital structure
becoming africa’s leading independent oil company
tullow has a long history in africa we know
and understand the continent well which is rich in
underexplored petroleum basins that offer material
upside potential we acquired our first licences
in senegal in 1985 and over the last decade the
continent has been the major focus of our activity
we have put our energy and capital into exploring
appraising and developing significant resources
in africa and are well advanced towards first
commercial production from major new basins
in ghana and uganda we are well organised in
africa and have 50 licences in 16 countries
spanning 130000 sq km we have key production
and development assets in seven countries 338
employees five business units a main office
in cape town and regional offices for our major
developments in accra and kampala
big projects bring with them
big responsibilities and we are
determined to make a major
contribution to building incountry
capacity and developing indigenous
enterprisethis role fits well with
our entrepreneurial spirit and
our values
aidan heavey
chief executive officer wwwtullowoilcom 23
directors’ report business review
doing business inatransparentandethicalway
our longevity and experience means we know how to
do business in africa in a transparent and ethical way
we also understand the management of associated
risks we have major project teams in ghana and
uganda who together with our partners complete
ongoing risk analysis and reporting our african
exploration team champion and develop exploration
opportunities within a competitive global capital
allocation process we are always challenging
where the greatest opportunities are and as a
result we continue to derisk our african portfolio
with material discoveries
there is potential during operations to damage the
ecosystems and biodiversity that often underpins
the sources of food and the livelihoods of local
communities the open detailed and transparent
approach we took in ghana to the eia together with
our investment in the development of 21
st
century
operations exemplify how seriously we take this
challenge in developing our operations in africa
embracingbigprojects andbigresponsibilities
our reputation is built on trust respect transparency
and strong business ethics to us it is a key business
enabler  it creates the opportunity for us for example
to work closely with the ugandan government to gain
their approval for the preemption of the heritage
interests in the lake albert rift basin in parallel
with a farmdown of up to twothirds of the combined
assets to leading industry partners this process is
now well advanced and we fully expect to agree an
aligned and accelerated basinwide development
plan this year
tullow’s role in the development of two major new oil
provinces gives us a significant position in laying the
foundations for the longterm development of social
and economic capacity and avoiding ‘the curse of oil’
through human resource initiatives and training we
are developing incountry skills and have specific
localisation recruitment policies in our wider supply
chain we work with local businesses and suppliers to
help them to develop incountry services that tullow
and the industry will require given the scale of our
investment in africa over £2 billion in three years
including 2010 we can and do exert influence over
our supplier base and how large multinational
suppliers setup their operations incountry
being entrepreneurial is a core value for tullow and
it is important that other businesses and enterprises
develop alongside our operations we recognise that
there is always more work to do and in particular in
our contribution and role in social enterprise and
community development
managing our operating environment
to function as a business we must have a very
outward looking perspective we take account of
what our owners partners governments employees
communities and related social groups are saying
to us a large part of my role is to ensure that the
environment in which tullow needs to operate and
prosper is working together with tullow’s executive
directors we dedicate a lot of time interacting with our
key stakeholders and have developed strong internal
resources in areas such as investor relations
human resources internal communications
and more recently external affairs
creatingsharedprosperity
a key responsibility of our new external affairs
function is to develop an aligned longterm approach
to corporate responsibility activities to underpin and
define all we do in this very important aspect of our
business this approach will work in partnership
with all our stakeholders to ensure that the oil and
gas resources we manage act as a positive catalyst
for new opportunities and economic development
creating shared prosperity
building a winning team
african cultures are very people centric and this we
feel gives us a natural affinity with africa at the heart
of tullow are our people we are continuously building
‘best in class’ resources and skill sets across the
group we have an exceptional exploration team
and a great portfolio of assets for them to work on
our development team has created the benchmark
for deepwater development in ghana and are now
looking to accelerate plans to develop another
worldclass basin in uganda we have an experienced
production team with a strong track record of adeptly
maximising production output who are looking forward
to contributing to the management of our growing
production profile we not only build very strong
internal teams but it is our ability to bring groups
of companies to work together which means
we can consistently deliver on each challenge
and milestone
having clear business plans
we are clear on our business plans for the next three
years these are developed from our strategy and are
closely aligned with continuing to build a business
that delivers top quintile growth our strategy
and business model are outlined on page 24
our 20102012 business plans are
1 deliver jubilee phase 1 first oil production ramp up
and assess all subsequent phases of development
in ghana
2 in uganda agree an aligned accelerated basinwide
development plan over the next 12 months followed
by delivery of first commercial oil and first
commercial power in 2011 24 tullow oil plc 2009 annual report and accounts
chief executive’s review continued
directors’ report business review
kpis page 18 risk management page 62
production and development
strategic responsibility for delivery
of major projects with a strong
focus on the management of
production and increasing
bankable reserves which
are critical to revenue and
cash flow generation pd also
has responsibility for ensuring
safe people procedures and
operations and minimising
environmental impacts
legalandgovernance
strategic responsibility for
maintaining the highest corporate
and ethical standards and building
a strong global team with excellent
legal and commercial skills
responsibility includes all
governance and legal issues
including full regulatory compliance
finance
strategic responsibility for funding
sustainable longterm growth
through an appropriate capital
structure that achieves a balance
between the funding requirements
of ea activities pd activities
and the capital needs of developing
major projects
strategy
tullow pursues a consistent and repeatable strategy which seeks to deliver sustainable
longterm growth with a balance between funding exploration and production spend
and major activities in core areas
strategic objective
to deliver top quintile total shareholder returns versus our industry peer group
strategic priorities
1
executing
selective high
impact exploration
programmes
funded by surplus
cash flow or equity
2
delivering major
projects with a
significant focus
on increasing
bankable reserves
3
managing our
assets to high
grade the
portfolio replenish
upside and assist
funding needs
4
ensuring
safe people
procedures and
operations and
minimising
environmental
impacts
5
building long
term relationships
with local
governments
communities and
key stakeholders
6
continuing to
develop a strong
team with
excellent
commercial
technical and
financial skills
vision
our vision is to be the leading global independent
exploration and production company
explorationandappraisal
strategic responsibility for executing
prioritised highimpact exploration
campaigns and managing the group’s
portfolio of licences to continually
replenish upside potential and assist
with funding needs ea identify
core plays prioritise prospective
exploration options and execute
ea programmes with material
followon campaigns
production and development
finance
governance
legal
exploration and appraisal
governance
legal
integrated
decision
making
our strategy
our business model wwwtullowoilcom 25
directors’ report business review
rebalancing our business
increased scale and rapid growth requires us to
adjust and evolve aspects of our business model
it is an inevitable consequence of our success and
it now sees tullow transition from a singular focus
and investment in exploration and appraisal to building
up a more appropriate production profile for a group
of our size we are rebalancing our business so that
we can continue to fund a very active exploration
programme with an aligned production output and
operating cash flow our goal is to have a business
that is capable of spending us500 million per
annum on exploration and appraisal this provides
the platform for us to continue to grow and create
new opportunities
achieving our strategic objective
in 2009 tsr for tullow was 99 representing a top
quintile performance versus our peer group and the
14
th
best performer in the ftse 100 in five years
to the end of 2009 tsr for tullow was 802 placing
the group number one for tsr versus our peer group
for that period
our strategic priorities are clear and consistent and
they are aligned with our values business model and
risk management we have never been in a better
position and we look forward with confidence
and excitement
aidan heavey
chief executive officer
total shareholder return tsr
99
a strong year saw tullow finish as the 14
th
best performer
in the ftse 100
0
10
20
30
40
50
60
70
80
90
100
09
08
07
66
2
99
3 continue to broaden evaluate and drill out
highimpact prospects and maximise the value of
all producing assets a very active ea programme
is under way in 2010 with up to 30 wells planned
this year and
4 implement a longterm funding plan with a more
appropriate capital structure for the increased
scale of our business and the number and range
of opportunities available to us
challenging markets and industry backdrop
there are some signs that major world economies
are emerging from recession equity markets have
improved but remain volatile commodity markets
improved over the course of 2009 and brent crude
moved from a low of us39bbl in february to a high
of us79bbl in december 2009 the weakening of
the us dollar was another notable trend for most
of 2009 with the sterlingus dollar rate reaching
a high of £us170 in august 2009 our business
plans aim to achieve an appropriate return over the
long run even in low price environments but sharp
movements can lead to shortterm volatility in
earnings as demonstrated in our 2009 results
in 2009 the uncertain economic outlook coupled
with weak commodity pricing at the start of the year
led to delays or postponements in price sensitive
capital expenditure lower cash flows forced industry
peers to preserve capital and focus primarily on
development rather than exploration expenditure
this improved in the second half as commodity
pricing recovered and most oilfield equipment
and services costs fell early in 2009 we put in
place a strong financial strategy which delivered
over £3 billion of funding over the course of a year
initial indications for the industry in 2010 appear
positive as demand is expected to rise as the global
economy recovers longerterm oil supply may
struggle to keep up with future demand and a
growing consensus is that demand in developed
economies has peaked and nonoecd countries
will drive future demand
the industry cost picture is more complex highly
specialised equipment leased on longterm contracts
such as deepwater rigs largely retain their value but
the cost of most general equipment and services has
fallen to create a lower cost environment delivering
current development projects on time and within
budget remains a key focus for tullow
well capitalised companies as we now are retain
financial and operational flexibility enabling us to
maximise value corporate activity is strong and
limited opportunities to access frontier acreage
creates intense competition for these assets 26 tullow oil plc 2009 annual report and accounts
our approach to exploration and production
directors’ report business review
a fully integrated approach to our business with strong teamwork
appropriate technology and an entrepreneurial culture is enabling
us to deliver extraordinary results from our exploration and
appraisal and production and development teams
exploration and appraisal ea and production and
development pd are two critical parts of tullow’s
business in ea we explore for oil and gas resources
using geographical and geophysical expertise and
technologies balancing highrisk exploration drilling
with lowerrisk appraisal in pd we develop and
produce these discovered resources growing our
revenue to fund our annual exploration programme
tullow’s ea and pd teams use a simple formula
for maximum performance the reasons behind their
outstanding results are a combination of strong
teamwork the right technology for each job and
a genuinely entrepreneurial culture
we strive to ensure that the ea and pd teams
are fully and seamlessly embedded into the group’s
overall business development and growth objectives
this is coordinated at group level through the board
and executive team who consider the overall capital
and resource allocation and adjust the balance
between the pace of exploration appraisal
development and production campaigns with
a view to maximising shareholder value
how we create value
read more on page 10
we create value in two
main ways by growing and
then commercialising our
resource base
angus mccoss
exploration director
paul mcdade
chief operating officer
jubilee special feature
read more on page 39
read more on page 68
corporate responsibility
first oil in ghana this year will
create a new record from
discovery to delivery of major
deepwater production
we believe good corporate
responsibility is fundamental
to implementing our strategy
and accomplishing our
strategic objective wwwtullowoilcom 27
directors’ report business review
tullow’s strategy enables bold exploration ledgrowth by combining
geological insight teamwork focus and a lot of experience we reduce
risk and create significant value by discovering nature’s hidden oil
to do this well we don’t follow the pack we try and lead it
angus mccoss exploration director
our performance in exploration is marked by
notable and consistent success there’s no secret to
it it is down to teamwork strong exploration teams
are built on a basis of openness trust and creativity
they are equipped with the most appropriate and
often highly innovative technology have vast and
diverse experience and a clear geological focus
this is what makes us different what gives us an
edge in a sense this is tullow’s unique selling point
utilising our collective skills and integrating them
for maximum performance has led us directly
to major discoveries such as those in ghana
and uganda
the right technology at the right time
in applying our scientific approach tullow draws on
another key determinant of success – applying the
right technologies at the right time we select the best
methods and tools at each point of the exploration
cycle from new venture identification through seismic
acquisition processing and interpretation to precise
well location and drilling methods we continuously
scrutinise our exploration portfolio selecting only the
best leads to be matured into prospects before being
drilled typically only the top 10 of the prevailing
lead inventory will be drilled in any year 
geology before geography
only 05 of the surface of the earth has readily
movable oil or gas beneath it to target only the
highest value quartile of this tiny ‘oil patch’ we limit
ourselves to exploring less than 0125 of the earth’s
surface this is a tough challenge and one which is
best tackled through scientific methods
putting geology before geography means we focus
on building prospective acreage positions and
strengthening our business relationships in areas with
wellfounded potential for oil for tullow this means
we focus on three core play types and we leverage
our capabilities in those plays across the world the
group has 200 to 300 leads and prospects covering
all stages of evaluation from initial screening through
to delivering commercial discoveries each of the core
plays is proven to have first class potential and each
comes with its particular value and challenges
• stratigraphic traps can have exceptional upside
and often lie subtly within held acreage we
are developing proven expertise in this play and
in particular in the vast potential that lies in the
equatorial atlantic regions of west africa and
south america
exploration and appraisal
• rift basins are a fundamentally rich setting
for petroleum exploration and benefit
from excellent source rocks and generally
straightforward structural geology tullow has
gained extensive expertise in this core play
mainly in uganda
• salt basins – salt is a first class seal and salt
tectonics form a rich diversity of salt basin trap
types tullow’s seismic acquisition processing
and interpretation expertise in salt basins provides
a tangible competitive advantage which we are
applying to our acreage in mauritania and senegal
none of us is as smart as all of us
ultimately oil is found through creative teamwork
when recruiting and developing staff we emphasise
skills in playmaking prospecting and appraising
we also encourage and develop those who have
particular technical expertise to deepen their skills
ensuring tullow stays at the leadingedge of industry
practice while tullow values and fosters individual
creativity in prospecting this is amplified by
imaginative teamwork and thorough scientific
evaluation by multidisciplinary teams we extend
our teams to include partners in the industry and
governments whose independent approach local
knowledge and basinwide perspectives make a
valuable contribution to exploration success
learning from experience
oil and gas exploration always carries a significant
risk of failure but in this industry any failure helps
us to become better  there is no blame or shame in
a dryhole provided that it was drilled for the right
reasons after due scientific process gave a green
light even the latest and the best technology and
methods such as advanced 3d seismic cannot
completely remove geological risks this is especially
the case when geological risks in new basins
can only be calibrated by referring to distant wells
and they can be very distant for example tullow’s
successful venusb well in sierra leone was 1100
km from the nearest comparable discovery in
deepwater ghana without these challenges finding
oil and gas would be easy but such challenges
along with our occasional failures help us to better
understand the geological plays and the technology
and methods we use and to hone our interpretation
skills we learn equally from discoveries and from
dryholes planning and decisions are guided by
the understanding that we garner in the course
of both experiences our approach to exploration and production continued
directors’ report business review
equally what we decide not to do is often what sets
us apart from the rest of the industry tullow’s
successes in the equatorial atlantic are firmly based
on our focus on upper cretaceous turbidites whilst
most of the industry concentrated on the younger
tertiary turbidite prospects elsewhere
building and developing exploration capability
our capability owes a great deal to the way in which
we can attract and retain people the combination of
our track record and our reputation for exciting and
challenging geological projects makes us an attractive
employer for some of the most experienced playmakers
and prospectors in the industry today the best
geoscientists are independent thinkers who are also
great team players and that’s why they feel at home
with tullow our global exploration leadership team
gelt of 15 leading explorers has over 300 years
experience and oversees the overall management
of our exploration initiatives and ultimately decides
which prospects will be drilled
the team comprises two distinct elements which
operate in a kind of critical tension given their
competing yet complementary responsibilities
there are regional exploration managers who work
closely with the regional business units there are
portfolio managers for exploration technology
and new ventures along with industry specialists
their function is to assist challenge and assure
as appropriate in regard to technical commercial
and financial considerations
essentially this means we get a rigorous and
objective exploration process which sifts out
weaker leads and concentrates on the most
promising opportunities
our ability to achieve timely commercialisation of our
hydrocarbon resources requires us to identify very
clearly what assets merit development and which
are better suited to dilution or sale this ensures
that our exploration success which has resulted
in very significant growth in hydrocarbon resources
translates into longterm value for our shareholders
unique culture delivers strong results
tullow’s unique culture has reaped benefits for
the group and has helped harness cooperation and
knowledge from industry partners and contractors
ghana’s jubilee deepwater development exemplifies
the success of this approach the field has delivered
a new industry benchmark with the first oil expected
in just over three years from discovery of this field
elsewhere our new deepwater well engineering
team has been independently ranked as the top
performing team in west africa deepwater
a team approach at all times
we believe that the team approach which has
served tullow so well in recent years can deliver
outstanding results in many of the partnerships in
which we are involved and where others operate
assets on our behalf
for example in many projects involving infill wells
and incremental developments we contribute ideas
to ensure that the capital we spend is used as
efficiently as possible this is the case in relation
to the banda gas field in mauritania where many
of our ideas have been taken on board by both the
operator and by the national government similarly 
in namibia we are working as a team combining
the skills of the upstream downstream and power
companies along with the government to
commercialise the kudu gas field
developing local skills and content
developing local skills and content is just as
important as developing local oil and gas fields
in ghana and uganda tullow works in partnership
with government on a variety of development projects
in ghana for example we have trained staff from the
national oil company and worked with the maritime
agency to help local fisherman whilst protecting
new offshore assets in uganda we have sponsored
projects to educate people in the lake albert area
about sustainable fishing practices swimming
lifesaving skills and health training new roads
and transport links will also benefit the region
managing the environment
our approach to the environmental impact of
our operations is simple and exacting at a bare
minimum it is our policy that there should be no
net loss in environmental terms wherever we work
we also strive for a net gain over the course of our
involvement in any given area this means very careful
planning and using a range of alternative options
28 tullow oil plc 2009 annual report and accounts
in pd we work to ensure that tullow’s exploration success translates
into longterm value for shareholders and the countries in which we operate
in 2010 we are driving towards first oil in ghana and considerable effort
will be focused on developing our assets in uganda
paul mcdade chief operating officer
production and development directors’ report business review
and solutions so that we can protect sustain
and contribute to environmental management
wherever tullow is active
environmental concerns are a core component
of tullow’s values and are absolutely central to
our current and future success environmental and
social impact assessments esia’s are produced by
independent consultants in order to ensure a robust
and comprehensive account of the potential effects of
our activities our overall strategy for environmental
management is a key element within our business
model and has been independently certified to the
internationally recognised iso 14001 standard
in addition core parts of our published data are
independently assessed and assured ultimately
we strive to ensure that our mitigation and
preventative strategies effectively minimise
our environmental impact
safe working and continuous learning
as tullow has grown we have always tried ensure
that the health and safety of our workers and of those
around us is never compromised we formed an ehs
leadership team comprising senior managers who
have daily responsibility in this area the integrated
nature of this working group means that best
practices are shared and implemented right across
all of our operations
in 2009 the ehs leadership team introduced
new initiatives such as operational management
commitment statements where each member
states how they plan to deliver a safe working
environment for their staff and stakeholders
a new ehs training programme has been designed
and launched and will roll out to 110 managers
across the group during 2010
we also learn lessons when things go wrong
in 2009 tullow had its first fatality with the
tragic death of a subcontractor working
for tullow in bangladesh we immediately launched
initiates to identify improvements in practice
across the group over 85 of our staff attended a
tullowwide workshop devoted to learning lessons
from this tragic accident further information on
our response is on page 73 of this report
value creation through focused commercialisation
whilst tullow has continued to increase its capital
expenditure on development and production with
around £600 million planned in 2010 the discipline
of highgrading assets for development at the
appropriate equity participation level ensures
capital is used efficiently along with available
human resources by diluting or selling equity
in other assets we aim to ensure these are also
commercialised in a timely manner  this highgrading
process is also applied to incremental investments in
producing assets so that they attract the correct level
of investment to deliver optimal reserves recovery
and production levels
in 2010 we will continue to drive towards first oil
in ghana in the fourth quarter and considerable effort
will be focused on developing worldclass discoveries
around lake albert in uganda as in ghana tullow’s
approach in uganda is collaborative involving all
partners and our host government this will harness
the full range of skills and experience to ensure the
best longterm commercialisation in this
environmentally sensitive area
wwwtullowoilcom 29
drilling operations on the mahogany4 well offshore ghana
mahogany4 formed part of the exploratory appraisal programme in the southeastern part of the greater jubilee area allan mugisha trainee drilling engineer
kampala office uganda success and progress
in africa
our operations in africa delivered an outstanding performance
in 2009 we made major discoveries and derisked our portfolio
with important basindefining wells and our development
projects are on target to deliver the first step in major
production growth from the end of 2010
uganda 33
with over 800 million barrels of resources and strong new
partners entering the lake albert rift basin the group is
poised to accelerate exploration appraisal and development
ghana and equatorial atlantic 37
this region holds huge potential for tullow jubilee and
tweneboa are major discoveries with considerable upside
potential and tullow has exposure to prospective acreage
in four countries along the equatorial atlantic coastline
jubilee case study 39
this special feature details progress since the first discovery
wells in 2007 and demonstrates how we and our partners
are developing the jubilee field in record time
other africa operations 47
the group’s african operations are delivering two thirds of
current production from assets in equatorial guinea gabon
côte d’ivoire congo brazzaville and mauritania
4 32 tullow oil plc 2009 annual report and accounts
operations review africa
directors’ report business review
2009 highlights
38500boepd
average working interest production
87
exploration and appraisal success rate
tweneboa
significant oil and gas condensate field discovered in ghana
jobirii
largest recent oil discovery onshore subsaharan africa
q42010
jubilee development remains on track for q4 2010 first oil
cnoocandt otal
very strong partners being introduced to support development in uganda
africa excellent progress has been made across the whole
of tullow’s african portfolio in 2009 existing production remains
strong significant new developments are on track and the group’s
position has been enhanced through highly successful exploration
appraisal and portfolio management activity
capital investment
£702million
up 82 on 2008
development work on the jubilee field in addition
to extensive exploration activities in uganda and
ghana resulted in increased capital expenditure
in 2009
0
50
100
150
200
250
300
350
400
450
500
09 08 07
372
476
410
0
80
160
240
320
400
480
560
640
720
800
09 08 07
237
386
702
sales revenue
£410million
down 14 on 2008
a 6 decline in production yearonyear and
lower global commodity prices in 2009 resulted
in sales revenue for africa falling £66 million
key producing assets
2009
producing field working interest
country tullow  production boepd
congo brazzaville m’boundi 11 4350
côte d’ivoire espoir 2133 5000
equatorial guinea ceiba 1425 4850
okume complex 1425 10250
gabon etameavouma 75 1700
niungo 40 3500
tchatamba 25 3400
others 375 – 40 3400
mauritania chinguetti 1901 2050
glossary
boepd barrels of oil equivalent per day
bopd barrels of oil per day
cnooc china national offshore
oil corporation
co
2
carbon dioxide
drc democratic republic of congo
feed front end engineering and design
fpso floating production storage
and offloading vessel
ftg full tensor gravity gradiometry
gnpc ghana national
petroleum corporation
km kilometres
mmbo million barrels of oil
mmboe million barrels of oil equivalent wwwtullowoilcom 33
directors’ report business review
uganda
2009 has been another landmark year for tullow
in uganda the discovered resource base is now in
excess of 800 million barrels of oil and the first phase
of development has commenced targeting gas to
power and first commercial oil production in 2011
in addition through a series of ongoing transactions
tullow is in the process of aligning equity interests
across the basin to accelerate development
strong partnership to accelerate basin development
in october 2009 tullow commenced a transparent
farmdown process to sell a proportion of its
interests in blocks 1 2 and 3a in the lake albert
rift basin the purpose of this process is to bring
in experienced and likeminded partners with
downstream expertise in order to deliver an
accelerated basinwide development the process
attracted strong interest from a number of major
international and national oil companies who visited
tullow’s data rooms and ugandan operations and
made representations to the government of uganda
on 23 november 2009 heritage oil plc tullow’s
partner in the basin and operator of blocks 1 and 3a
announced its intention to sell its entire ugandan
interests to a third party on 17 january 2010 tullow
chose to exercise its preemption rights on this
deal and on 2 february 2010 a formal request was
submitted to the government to approve the transfer
of the assets involved to tullow the acquisition price
is up to us15 billion
tullow continues to work closely with the government
to gain approval for preemption of the heritage deal
in parallel with the farmdown process which is now
at an advanced stage two new potential partners
have been identified cnooc and total and it is
expected that following completion of the deal each
partner will hold a one third interest in each of the
three blocks presentations by all parties have been
made to the relevant ugandan authorities and tullow
expects the transactions to be signed in the coming
weeks this will result in a unified partnership with
considerable experience and the financial capability
to enable uganda to become a significant oil
producing nation
significant discoveries made during the year
in 2009 tullow continued its exploration and appraisal
campaign in uganda in order to prove up further
resources and gain a good understanding of the
resource distribution across the basin exploration
drilling activities during the year focused mainly on
the butiaba area but also included the ngassa2 well
in kaisotonya in 2009 the group drilled nine wells
and total contingent resources for the basin are now
in excess of 800 million barrels tullow is confident
that the basin has the potential to deliver significant
additional resources with over 15 billion barrels
awaiting discovery
tullow has now gained a good understanding of the
butiaba region of blocks 1 and 2 where a high number
of exploration wells and detailed seismic and gravity
imaging have significantly derisked the remaining
prospectivity six of the seven wells drilled in this
region during the year encountered oil giraffe1
karuka2 nsoga1 kigogole3 wahrindi1 and
ngara1 the giraffe1 well in particular proved to be
transformational as it confirmed the buffalogiraffe
field subsequently renamed jobirii to be a 300
million barrel discovery the field has significant
further upside which is to be drilled in 2010
awaka1 the only dry well drilled in uganda during
the year encountered a new sand fairway but was
unsuccessful in finding hydrocarbons however
it effectively delineated the edge of a key geological
play in this region
drilling activities in the butiaba area were
supplemented by leading edge subsurface imaging
technologies the largest full tensor gravity
gradiometry ftg survey ever carried out in africa
was acquired during the year ftg is a specialist
technology ideally suited for imaging nearbasement
reservoirs this survey has been integrated with
regional 2d seismic data using techniques developed
by tullow’s geoscientists and technology partners
this technology is being successfully used to improve
definition of the butiaba fields and prospects in 3d
at a fraction of the cost and time required for a
drilling in kaisotonya uganda
the ngassa2 well was drilled from an onshore location targeting a large
prospect located beneath the lake 34 tullow oil plc 2009 annual report and accounts
directors’ report business review
significant progress towards uganda
becoming a major oil producing country
• major pipeline in place for transport of surplus crude
• potential to produce in excess of 200000 bopd
• major development focused on reﬁned products for local and regional markets
• first commercial oil expected from kasamene ﬁeld by end 2011
• basinwide development plan to be agreed by yearend
• extended well test to produce oil in the ﬁrst half of 2010
• tullow proposes farmdown to cnooc and total
• tullow to acquire heritage’s interests in blocks 1 and 3a
• international oil companies explore for oil in western uganda
• uganda’s visionaries prepare for oil exploration
• uganda gains independence
• ugandan geological survey probe kibero  kibuku oil seeps
• waki1 ﬁrst well drilled and oil shows encountered
• 52 oil seeps documented
• oil seeps found centuries ago
• petroleum rift basin starts forming 8 million years ago
• waraga ﬂowed at 12000 bopd
• wildcat oil discoveries mputa waraga nzizi and kingﬁsher
• inﬁll seismic acquired
• tullow acquires energy africa
• turaco drilling encounters co2
• reconnaissance seismic acquired
• licences awarded
• seven oil discoveries as conﬁdence grows
• kasamene1 breakthrough opens victoria nile delta play
• kingﬁsher2 ﬂows at over 14000 bopd
• over 800 mmbo discovered with 15 billion barrels yet to ﬁnd
• by the end of 2009 27 wells yield 26 discoveries
• commercial threshold exceeded development team established
• major jobirii oil ﬁeld discovered
• kingﬁsher1 ﬂows at over 13000 bopd
• major seismic surveys acquired
• tullow acquires hardman resources
beyond 2010
2010
19861993
19381962
20042006
19972003
2008
2009
2007
operations review africa continued wwwtullowoilcom 35
directors’ report business review
turaco1 block 3 – 2003
jobi1 formerly buffalo1 block 1 – 2009
kingfisher2 block 3a – 2008
regional 3d seismic survey in addition a lowimpact
weightdrop 3d seismic campaign was successfully
trialled over the kasamene and wahrindi discoveries
the trials proved the technology to be robust quicker
and cheaper than conventional seismic equipment
and with a much lower environmental impact
in the kaisotonya area the mputa5 appraisal well
was drilled and successfully tested at a stable flow
rate of 950 bopd in march 2009 the well results
validated the state of the art seismic modelling
techniques used to identify and target ‘sweetspots’
in the reservoir this technology will be deployed
throughout the butiaba area
the nearshore ngassa2 well located in block 2
commenced drilling in march 2009 from an onshore
location the well reached a total depth of 3822 metres
and encountered an overpressured interval indicating
the potential for a significant oil column which could
cover an area in excess of 150 sq km this discovery
has the potential to be the largest in the basin to
date further drilling from offshore locations will be
required to test multiple prospects and appraise the
expansive ngassa structure tullow expects to make
a commitment to offshore drilling infrastructure in
the first half of 2010
exploration and appraisal drilling recommenced
in january 2010 following a planned three month
break the first well was the kasamene appraisal
well kasamene2 which successfully confirmed an
oil column in excess of 70 metres and a gas column
of over 20 metres the well has been suspended as
a future producer and will be part of the phase 1
lake albert rift basin development
a programme of 10 further exploration and appraisal
wells is scheduled to commence in april utilising
two land rigs which will also trial development
drilling techniques material prospectivity around
the jobirii field will be targeted in block 1 as
well as key appraisal wells in block 2 in advance
of development
phased basinwide development commenced
following significant exploration success in 2009
and the progress made in forming a new aligned
partnership the focus is now on delivering an
accelerated development programme tullow is
working with the government of uganda on clearly
defining the phases of development phase 1 is
already under way
lake albert phase 1 this involves the development
in block 2 of the nzizi gas field to fuel a regional
thermal power station and the kasamene oil field
for industrial consumption within uganda
tullow has embarked on feed studies to develop the
nzizi gas field to supply gas to a newbuild thermal
power plant which will be built in the hoima district 36 tullow oil plc 2009 annual report and accounts
operations review africa continued
directors’ report business review
the discovery will be appraised during the second
quarter of 2010 and then developed to supply gas to
the power plant both the field and power plant will
come onstream by the end of 2011 the power plant
is being designed to accept both gas and crude
to ensure longterm supply
detailed development planning for the kasamene
field commenced in the second half of 2009 and
feed studies are currently under way it is expected
that a plan of development will be submitted to the
government of uganda by mid2010 for approval and
subsequent project sanction production from this
field is expected to commence by the end of 2011
the oil will initially be transported by truck and later
by pipeline to a central gathering and distribution
hub for onward transportation to domestic and
regional markets initial production capacity is
expected to be around 10000 bopd with the facilities
capable of modular expansion as further phases
of the basin development are brought onstream
an extended well testing programme is planned
to support development planning of kasamene and
subsequent fields and to supplement the appraisal
drilling planned for 2010 this programme which is
focused on gathering essential dynamic production
data and testing proposed production systems
will commence in mid2010 starting with the
kasamene field the crude oil produced from
the testing operations will be used to supply fuel
to local industrial users and provide the first
domestically produced oil in subsaharan east
africa the appraisal drilling and well testing
will be complemented by infill 2d and 3d
seismic acquisition
beyond phase 1 the first objective of the new
proposed partnership will be to agree a basinwide
development plan that will encompass the production
of the northern and southern fields via an integrated
infrastructure production levels could exceed
200000 bopd and would supply a local refinery
and allow export of surplus crude to regional
and international markets the proposed phase
1 development will provide essential subsurface
and production data to support this basinwide
development plan
congo drc
tullow has interests in two congo drc licences
adjacent to its ugandan acreage on lake albert
following the award of the licences in 2006 the
validity of the award was disputed in 2008 tullow
continues to work closely with the government
of congo drc and is confident of its title to the
licences and the integrity of the award process
tullow expects the president of congo drc
to ratify the contracts in the near future
uganda production could exceed
200000bopd
a basinwide development plan is expected to be agreed
with partners production levels supplying a local refinery
and export could ultimately exceed 200000 bopd
operations in butiaba area uganda
the buffalo1 well was the initial discovery on the significant
buffalogiraffe field now renamed jobirii wwwtullowoilcom 37
directors’ report business review
ghana and equatorial atlantic
tullow’s position in the equatorial atlantic region
offshore west africa incorporates 11 blocks covering
four countries sierra leone liberia côte d’ivoire
and ghana in total the group has prospective acreage
over an area of approximately 24000 sq km stretching
along 1100 km of coastline
2009 has been another very successful year in this
region for tullow the group drilled six exploration
and appraisal wells of which five encountered
hydrocarbons successful wells included the
discovery of the significant tweneboa oil and
gascondensate field and the venus1 well which
proved the extension of the jubilee play significantly
westwards in addition excellent progress was made
on the phase 1 jubilee development project which
remains on budget and on schedule for first oil
in the fourth quarter of 2010
major exploration and appraisal success in ghana
following the successful mahogany3 appraisal
well in the west cape three points licence at the
end of 2008 an exploratory appraisal programme
in the southeastern part of the greater jubilee
area commenced in october 2009 to date the
mahogany4 and mahogany deep2 wells have been
drilled both encountered significant oil reservoirs and
highlighted further prospectivity to the south and east
the total gross resource base for the greater jubilee
area is considered to range from 600 mmbo p90
through a most likely 1200 mmbo p50 to an upside
1800 mmbo p10 interpretation of the recent
appraisal and development drilling results has
however enabled tullow to better define the resource
estimates for the jubilee unit area within these
gross resource estimates the jubilee unit area
is considered to have a gross resource base of 500
mmbo p90 through a most likely 700 mmbo p50
to an upside of 1000 mmbo p10 this resource
base will be developed in several phases of which
phase 1 is under way with first oil expected in the
fourth quarter of 2010
the remainder of the greater jubilee potential is to
the southeast and includes the sapele and dahoma
satellite exploration prospects the next stage of
exploratory appraisal in the southeastern area
commenced in february 2010 with the spudding
of the dahoma1 well this will be followed by
mahogany5 in april
in march 2009 the tweneboa1 exploration well in
the deep water tano block targeting a 200 sq km
turbidite fan complex discovered a significant light
hydrocarbon accumulation the first appraisal well
tweneboa2 was drilled six km southeast of the
discovery well in january 2010 and proved up a
combined oil and gascondensate column of at least
350 metres this has confirmed tweneboa as a
major oil and gascondensate field with potential
to yield significant volumes of condensate and
light oil gross resource volume estimates for the
tweneboaowontomme fan complex have been
revised upwards to 100 mmboe p90 through
a most likely 400 mmboe p50 to an upside
of 1400 mmboe p10
the success at tweneboa is being followed up by
an accelerated exploration and appraisal drilling
programme in 2010 which will include a flow test
the first wells will be the owo1 exploration well
and tweneboa3 which will target the ntomme lobe
in the southeast of the fan
in november 2009 the odum discovery was
successfully appraised by the odum2 well
this accumulation will likely be developed as
a satellite to further discoveries in the area
following the reprocessing of the high resolution 3d
seismic acquired in 2008 significant prospectivity has
been identified in the west cape three points licence
east of the greater jubilee area detailed seismic
interpretation is ongoing in order to optimise the drilling
location for a strategic exploration well in this area
the ghana prospect inventory plus the
discovered resources in the greater jubilee area
and tweneboaowontomme amount to a gross
upside potential of over 45 billion boe
côte divoire
sierra
leone
guinea
togo
liberia
ghana
tweneboa
jubilee
odum
oil ﬁeld
oil  gas condensate ﬁeld
tullow operated block
tullow nonoperated block
jubilee phase 1 development area
venus
disco ry ve
west african equatorial atlantic region
tullow has interests in 11 blocks across four countries in the
equatorial atlantic region offshore west africa 38 tullow oil plc 2009 annual report and accounts
operations review africa continued
directors’ report business review
into the jubilee play fairways and will be followed
up with the acquisition of 2300 sq km of 3d seismic
data over the ci103 and ci105 licences with a view
to firming up additional prospectivity
excellent progress on jubilee phase 1 development
the jubilee phase 1 development project continues
to meet key project milestones is on track for first oil
in the fourth quarter of 2010 and remains within its
us31 billion budget the project will produce first
oil approximately 40 months after the field was
discovered a new benchmark for global deep water
developments significant regulatory milestones
were also achieved in 2009 including the formal
approval by the government of ghana of the jubilee
plan of development the signing of the field
unitisation agreement and the approval of the
environmental impact assessment eia further
development phases to access the significant
resource potential of the jubilee unit area up
to 1000 mmbo are now being prepared and
will include further infill wells additional subsea
systems and reviewing the possibility of increasing
the capacity of the floating production storage
and offloading vessel fpso
good progress was made on the fpso construction
in singapore during 2009 all process modules and
the external turret have now been installed and
module integration and commissioning work is
ongoing fabrication of the subsea equipment
including manifolds risers flowlines and control
umbilicals was completed in 2009 and installation
work commenced in january 2010 the fpso is
scheduled to leave singapore for ghana in the
second quarter of 2010 and will be connected to
the subsea network during the fourth quarter of 2010
phase 1 development includes nine production wells
which are expected to produce at a plateau rate of
120000 bopd pressure support will be provided by
six water injection wells and two gas injection wells
the wells are being drilled and completed by the
eirik raude semi submersible rig operations to
date have been on time and on budget with 16 wells
drilled and the installation of production tubing
and completion equipment now under way
well completion operations expected to take
approximately 15 months commenced in february
2010 well results continue to be in line with predrill
expectations well testing has proven deliverability
in excess of 20000 bopd per well and reservoir
connectivity over distances exceeding six kilometres
gas produced during oil production will initially be
reinjected to provide pressure support for production
an export project to deliver gas to shore for power
generation is however under consideration by gnpc
it is expected that in the longer term the jubilee
field will supply approximately 70 of its associated
gas to this scheme
jubilee play extended
in the first half of 2009 tullow farmedin to three
blocks in liberia and two blocks in sierra leone
significantly expanding the group’s exposure to
the jubilee play in the west african equatorial
atlantic region this was immediately followed
by the acquisition of 6000 sq km of high quality
3d seismic data one of the largest surveys ever
recorded the results are currently being interpreted
to highgrade a comprehensive prospect inventory
which includes a large number of jubileetype
stratigraphic traps in september tullow participated
in the venusb1 exploration well in sierra leone
the first ever deepwater well in the liberian basin
the well encountered hydrocarbons and proved
a working petroleum system with geological
characteristics analogous to those offshore ghana
these well results have been integrated with
the liberian seismic data to calibrate this highly
prospective deepwater acreage three wells are
planned on this acreage in the second half of 2010
in côte d’ivoire the south grand lahou1 well
chasing the jubilee play was drilled in the ci105
licence in october 2009 it encountered the targeted
reservoir sands on prognosis but found them
waterbearing at this location the data gained
is however providing valuable proprietary insights
jubilee subsea equipment in takoradi ghana
installation of the subsea trees and umbilicals above
commenced in the first quarter of 2010 on track
jubilee special feature
wwwtullowoilcom 39
this has been a major
collaborative effort between
the field partners and
contractors both in ghana
and internationally it sets
a new industry benchmark
stuart wheaton ghana development manager
on track for the
fastest ever full
scale deep water
development
eirik raude semisubmersible offshore ghana helping local fisheries in the community
tullow is working closely with the
fishing industry in ghana to generate
awareness of the jubilee project while
supporting sustainable development
of the fishing communities along
the western region
invested
£07 million
35 years from discovery to first oil
in 2007 based on the results of the first two exploration wells the jubilee field partners
and the government of ghana jointly took the early decision to proceed with the development
of the jubilee field an integrated project team ipt was rapidly assembled bringing together
major deepwater skills and experience from across the partnership in parallel tullow quickly
developed a deepwater development drilling capability and a total of 16 wells have been
drilled to date first oil is scheduled for the fourth quarter of 2010 representing a record
time from discovery to delivery of major deepwater production
supporting people
and the environment
tullow’s ehs performance in ghana
is excellent with only two lost time
incidents in 21 million hours worked
and no major environmental incidents
our ehs policy sets out the standards
and expectations to manage key
ehs risks in our operations and
as an example a comprehensive
environmental impact assessment
eia was carried out during 2009
including wide public consultation of
stakeholders key components of the
eia include environmental monitoring
waste management oil spill contingency
planning and community engagement
and investment
40 tullow oil plc 2009 annual report and accounts
jubilee special feature continued
1 environment health and safety ehs
our journey to first oil and beyond march 2006 ghana licences signed june 2007
the integrated project team
the jubilee field
gnpc
ghana’s national oil company a field partner
and national regulator
tullow oil plc
unit operator of the jubilee phase 1 development
kosmos energy
us exploration company technical operator of the
jubilee phase 1 project
anadarko
large independent us ep company with proven
deepwater project capabilities and a major
contributor to the team
sabre oil and gas
privately owned exploration company
eo group ltd
ghanaian oil company
ghana
tweneboa
jubilee
odum
established in february 2008
to prepare the jubilee plan
of development and deliver
a fully commissioned field
development system
tullow on behalf of the
field partners has worked
closely with the local people
government and interest
groups throughout its time
in ghana these relationships
have been an important factor in
our ability to achieve eia approval
for the jubilee development
cesar molina ehs manager ghana
local fishermen in takoradi ghana hyedua1 mahogany1
total depth 4002m
water depth 1320m
jubliee field
exceptional oil and reservoir quality
the quality of the jubilee oil and reservoirs was apparent
after drilling only two wells production well tests have
since demonstrated reservoir connectivity over 6km
and excellent productivity
industry leading performance
independently ranked as the top performing drilling team
operating in west african deepwater
wwwtullowoilcom 41
2 subsurface 3 well engineering
the eirik raude
proven technology at work
the exceptional performance of
the eirik raude a fifth generation
semi submersible rig that is home
to 120 crew has enabled operations to
continue nonstop since october 2008
metres drilled
48133
8 of9
production
wells drilled
6
water injection
wells drilled
2
gas injection
wells drilled
august 2007 2nd jubilee discovery well hyedua1
oilquality
376degree
api
productionwell
capacityover
20000bopd
fpsocapacity
120000bopd
1st jubilee discovery well mahogany1
emmanuel kwadjodei trainee production operator
and randy griffin senior operations readiness engineer
on the fpso in singapore water treatment modules
malaysia
fabricated by aker solutions
at port klang to process over
230000 barrels per day of sea
water for reservoir injection
oil processing modules
indonesia
fabricated by vme process
batam to process 120000
barrels of oil per day through
two process trains
gas compression modules
singapore
fabricated by dynamac
engineering services to
handle up to 160 mmscfd of
produced gas for reinjection
and export to shore
turret structure
malaysia
fabricated by malaysia marine
 heavy engineering one of
the world’s largest external
turret structures mounted
on the bow of the fpso
to connect to the subsea
flowlines and control lines
42 tullow oil plc 2009 annual report and accounts
jubilee special feature continued
4 facilities delivery
accelerating construction
and delivery deadlines
by delivering first oil in the fourth quarter of 2010 the project
will have realised production in just 3½ years from discovery
this achievement is a reflection of the confidence and
commitment by all partners to invest based on discovery
and appraisal well results alone
a highly experienced project team comprised of personnel
from the main partners including tullow anadarko petroleum
and led by technical operator kosmos energy has set out to
deliver a quality outcome in record time proven contractors have
used proven designs to meet functional rather than truly precise
specifications this has resulted in some quite dramatic schedule
reductions when benchmarked to general industry performance
key contractors involved in the facilities delivery include
modec inc fpso technip flowlines risers and installation
and fmc and aker solutions
we have worked very
closely with our contractors
and suppliers to deliver
incredible efficiencies this
project is an outstanding
achievement by all
dennis mclaughlin ipt project director
february 2008 tullow designated as field unit operator february 2008 jubilee phase 1
fpso topside module fabrication completed on time wwwtullowoilcom 43
turret lift fpso construction site singapore
january 2009 hyedua2 tested at 16750 bopd development commences 44 tullow oil plc 2009 annual report and accounts
jubilee special feature continued
5 subsea system delivery
subsea fabrication
well underway
over 40 km of subsea flowlines will connect the
17 oil production and watergas injection wells
to the fpso and 28 km of umbilicals will control
the wells and ensure optimum production
the project has employed the latest technology
and worked with proven contractors who
have delivered an excellent performance
the fabrication of subsea equipment has taken
place in the uk singapore usa france finland
norway and ghana in january 2010 equipment
began arriving to ghana and installation to last
some nine months commenced
the exceptional performance of
the eirik raude rig and crew has
been key to ensuring that this
worldclass project remains
on budget and on schedule
alan dowokpor well engineering manager ghana
may 2009 mahogany1 tested at 21000 bopd july 2009 phase 1 development plan
1 flexible flowlines france
fabricated by technip flexible riser flow
lines will be used to connect the fpso to the
subsea equipment
1
2
2 subsea trees usa singapore uk norway
supplied by fmc the subsea trees control
the production or injection of individual wells
19 have been ordered for the jubilee phase 1 project wwwtullowoilcom 45
6 operations readiness
upgrading marine
services and
port facilities
port facilities at takoradi and sekondi
which are key to jubilee landbased
operations have been upgraded
this included new access roads
offices canteens warehouses
communications housing and
reinforced cement foundations
for handling heavy materials
civil engineering works for production
100 complete
significant aviation requirements
tullow has leased two latest generation
helicopters and secured the services of
several fixed wing aircraft to transport
staff and contractors 100 km offshore
and from the main airport at accra
240 km to the port in takoradi
investment in infrastructure
£25 million
building new staff
offices and housing
tullow continues to upgrade the
incountry infrastructure and make
investments with local contractors
in accra tullow is building a new
head office and modern staff housing
in takoradi a supply base an aviation
service to accra and offshore a major
marine operation and a new regional
headoffice have all been established
december 2009 eia approved
3
3 manifolds usa
supplied by fmc manifolds either
aggregate production or distribute
water and gas to the injection wells
and field unitisation approved
quayside at takoradi port ghana
design for new offices in accra ghana
new helicopters takoradi ghana
staff in ghana
138employees
85 are ghanaian 46 tullow oil plc 2009 annual report and accounts
jubilee special feature continued
7 installation commissioning and ready for startup
q4 2010
subsea equipment installation
work commenced in ghana
in january 2010 a fleet of
14 vessels is directly involved
in shipping and then installing
the flowlines umbilicals
controls manifolds and subsea
wellhead trees the operation
is being run from the port
of takoradisekondi in
western ghana
the facility installation work
will take up to nine months to
complete including the tiein
of the fpso during the third
quarter this will be followed
by a period of commissioning
of the vessel and subsea
systems insitu and oil is
expected to start producing
into the facilities in the
fourth quarter
production ramp up
various production ramp up scenarios
have been forecast following a period
of testing production will gradually
increase over approximately six months
to a plateau level of 120000 bopd
the ramp up in production thereafter
will depend on the number of wells
from further phases of development
that have been completed and the
fpsosubsea equipment performance
marketing jubilee crude oil
jubilee crude oil is light and sweet independent laboratory analysis indicates that the crude has an api gravity
of 376 degrees and sulphur content of 025  wt with no unusual characteristics crude oils of this type attract
a wide range of refiners and can be expected to command competitive prices in the market when producing
at 120000 bopd three or four large cargoes will be exported each month and tullow’s share will be marketed
individually on a cargo by cargo basis
i am extremely proud
of the incountry team
we have built since 2008
tullow’s policy is to
employ as many local
nationals as possible and
currently over 80 of our
employees are ghanaian
and we expect this to rise
to over 90 by 2013
dai jones  president  general manager
tullow ghana
our outstanding
incountry team
follow our progress at wwwtullowoilcom
q3 2010 fpso to arrive in ghana q4 2010 first oil
0
q4
2010
q1
2011
q2
2011
q3
2011
q4
2011
20
40
60
80
100
120
high case low case
000’ bopd
jubilee phase 1 production ramp up
crude oil sample wwwtullowoilcom 47
other africa operations
equatorial guinea
gross combined production from the okume
complex and ceiba fields averaged approximately
106000 bopd in 2009 two rigs drilled five development
wells on the okume complex during the year in order
to maintain plateau production drilling activities are
expected to continue into the second half of 2010
with nine wells planned a timelapse 4d seismic
survey is planned for 2010 over both fields to identify
infill targets and optimise well locations
gabon
net production from tullow’s gabon assets averaged
12000 bopd in 2009 during the year tullow exercised
its backin rights on the ebouri and onal fields thereby
adding 1200 bopd of net production production was
also supported by successful workovers on the echira
and niungo fields niungo production is expected to
be further enhanced during 2010 with four horizontal
infill wells planned in total 39 production wells are
planned on the group’s gabon assets in 2010 and
net production is expected to average 12400 bopd
tullow completed the acquisition of a 1300 sq km
3d seismic survey in the kiarsseny block and
seismic reprocessing and interpretative work in
the azobe block where the noix de coco prospect
has been identified for drilling in 2010 in february
the marocnord1 exploration well discovered 50
metres of net oil pay in an emerging underexplored
stratigraphic trap play which will be brought into the
onal area development and followedup through
further exploration and appraisal drilling
côte d’ivoire
gross production from the east and west espoir
fields was in line with expectations in 2009 averaging
23550 boepd a planned upgrade to the processing
capacity of the fpso was deferred in 2009 and
is now scheduled for mid2010 the upgrade will
provide capacity for future incremental production
projects including an infill drilling campaign
planned for 201112
congo brazzaville
an active reservoir management programme on
the onshore m’boundi field was initiated in 2008 and
continued throughout 2009 focusing on development
drilling and a water injection upgrade utilising six
land rigs a total of 18 producers and five injection
wells were drilled during the year and the water
injection rate was increased from 46000 to 60000
bwipd gross field production during 2009 averaged
39500 bopd in 2010 the combination of the 35 new
wells and an increase in water injection capacity
to 200000 bwipd by the end of the second quarter
is expected to increase gross average production
to 42000 bopd
mauritania and senegal
gross production from the offshore chinguetti
field averaged approximately 10750 bopd for 2009
production has declined in line with expectations
through the year and has recently stabilised due
to high facilities uptime and prudent reservoir
management potential for further drilling in 2010
and beyond continues to be evaluated work is
ongoing to review the development options that
would allow commercialisation of the banda gas
field the development options are currently under
discussion with the mauritanian government
to ensure that they meet both partner and
government objectives
a planned break in exploration drilling has provided
time to complete a thorough twoyear regional basin
and prospectivity review from this review numerous
plays leads and prospects have emerged the new
prospects are unrelated to the established thin
miocene reservoir plays such as at chinguetti
which were pursued by previous operators and
which proved difficult to develop instead tullow
is drawing on its equatorial atlantic successes
to target highimpact cretaceous prospectivity
in mauritania two exploration wells are planned
for 2010 ahead of further exploration activity
planned for 2011 and 2012
tanzania
tullow has interests in the onshore lindi and
mtwara blocks in the frontier ruvuma basin in
southern tanzania following interpretation of newly
reprocessed seismic data likonde1 was selected as
the first well to establish the potential of a possible
new oil play fairway the well commenced drilling in
january 2010 and a result is expected in late march
2010 further evaluation planned for 2010 includes
reprocessing the seismic dataset and incorporating
and interpreting the new drilling results the
outcome of which will influence the forward
exploration programme
namibia
in namibia progress is being made to reinvigorate
the development of the 13 tcf offshore kudu field
intergovernmental talks between russia namibia
and south africa have taken place in an attempt to
move forward the development via a gastopower
project this has resulted in gazprom announcing
its plans to build an 800 mw power station eskom
the south african power utility will be the targeted
buyer of electricity that is surplus to namibia’s
requirements tullow fully supports this initiative
to commercialise kudu gas and is working with
the ministry gazprom and the existing partners
to progress this new initiative should this initiative
proceed as planned tullow will be upstream operator
and will reduce its equity to around 30
operations review africa continued
directors’ report business review
directors’ report business review jonathan leather geologist – dublin
nhlanhla kubheka geophysicist – cape town
dublin office ireland developing a significant
asset base worldwide
we have important assets in europe south asia and
south america which contribute to group production
and cash flow and form part of an exploration portfolio
that offers longerterm growth opportunities
europe 51
tullow has mature production in the uk southern north sea
and hopes to leverage its understanding of this play in the
adjacent carboniferous province offshore the netherlands
south asia 52
the demand for energy in asia is strong and this region
has excellent growth potential through exploration tullow
has good opportunities in pakistan where the group has
a significant nonoperated position
south america 53
we are seeking to replicate the success of the jubilee field
throughout the equatorial atlantic region with a focus on
the transform margin stretching from guyana through
suriname to french guiana
5 50 tullow oil plc 2009 annual report and accounts
operations review rest of the world
directors’ report business review
2009 highlights
19800boepd
average working interest production
shell andt otal
major partners introduced in french guiana
equatorialatlantic
chasing the successful jubilee play in south america
pakistanrestructuring completed
new exploration drilling commences in kohat block
rest of the world tullow’s assets in europe south asia and south
america collectively provide good cash flow and important growth
opportunities extensive seismic programmes in french guiana and
guyana and new exploration drilling in pakistan are providing strong
building blocks towards achieving this growth
capital investment
£59million
38 decrease on prior year
the group’s capital has been focused on
highimpact drilling activities in africa and as a
result the rest of the world spend has decreased
0
30
60
90
120
150
180
210
240
270
300
09 08 07
267
216
173
0
14
28
42
56
70
84
98
112
126
140
09 08 07
131
95
59
sales revenue
£173million
20 decrease on prior year
a 28 decline in yearonyear production in the
uk and lower global commodity prices in 2009
resulted in sales revenue for the rest of the world
falling £43 million
key producing assets
2009
producing field working interest
country tullow  production boepd
europe
uk cms area fields 95 – 100 9350
thames area fields 50 – 100 5100
south asia
bangladesh bangoralalmai 30 5050
pakistan chachar
1
75 190
sarasuri
2
3818 110
1 tullow completed the sale of this interest in march 2009
2 tullow is awaiting completion of the sale of this asset
glossary
boepd barrels of oil equivalent per day
cms caister murdoch system
ehs environment health and safety
mmscfd million standard cubic feet per day
sq km square kilometres wwwtullowoilcom 51
directors’ report business review
the group’s rest of the world assets form an
important part of tullow’s business gas production
in the uk and south asia generate strong revenues
and combine low risk exploration prospects and
development opportunities in europe with high
impact potential in south america and south asia
europe
tullow’s well established producing assets lie in
the southern gas basin offshore uk and are centred
around two gas producing hubs associated fields
and infrastructure tullow also has a portfolio of
operated exploration blocks offshore the
netherlands where it is looking to capitalise on the
exploration success it has experienced in adjacent
uk blocks over the last seven years in 2009 the
decision was taken to assign the group’s portuguese
interests to other licence partners following
completion of an agreed work programme and
detailed analysis of the results
uk
net uk production for 2009 was in line with
expectations at 14450 boepd 2008 20095 boepd
several factors were responsible for this 28
reduction including the sale of tullow’s hewett field
interests in 2008 the rescheduling of infill wells
in the cms area and natural field decline ehs
performance and production efficiency were excellent
on the group’s operated fields throughout the year
successful infill drilling and well interventions were
completed on boulton and murdoch and will help
support future production levels
in the thames area the modifications to allow
combined flow from the wissey and horne  wren
fields were completed in may 2009 thereby boosting
thames infrastructure throughput and improving
asset longevity the bure north development well
targeted an infill opportunity in the bure field but
results showed that the reservoir compartment was
depleted by other producing wells in the area and
consequently the well was abandoned
in the cms area the operated ketch field performed
above expectation during 2009 during july 2009
works to tiein the thirdparty topaz development to
the schooner platform were successfully completed
production from this field commenced in november
adding tariff income and reducing unit operating cost
of the field the ka08z infill well on the ketch field
has been sanctioned and is due to spud in the second
quarter of 2010 planning and design work is well
advanced and a rig has been secured
in 2009 three nonoperated infill wells were drilled
on the murdoch and boulton fields these wells
added over 100 mmscfd to cms gross production
further infill opportunities are being considered for
2010 including a redrill of the boulton b1 well which
ceased production in august following a buildup
of salt in the well bore
the harrison discovery provides the most attractive
near term development opportunity in the cms area
work on this project progressed in 2009 and a joint
operating agreement was signed by the field
partners major capital expenditure was deferred
to 2010 and first gas is now expected in 2012
in addition the partnership is evaluating drilling
possibilities on the adjacent cameron prospect
the scope of the harrison development is likely
to include the option to tiein a successful
cameron discovery
cmsareaproductionoffshoreuk
the ketch field produced above expectation in 2009
uk’s contribution to group production
25
the uk remains an important part of the group’s producing
asset base with 14450 boepd produced in 2009 52 tullow oil plc 2009 annual report and accounts
operations review rest of the world continued
directors’ report business review
bangora field producing at maximum capacity
120mmscfd
following a successful workover and tiein carried out during
2009 production from the bangora gas field has increased to
the maximum capacity of the gas processing facility
netherlands
leveraging on the success and experience gained
in the carboniferous play of the uk cms tullow
has built an extensive exploration position within
the adjacent carboniferous province of the dutch
offshore and is now in a strong position to exploit
this play in april 2009 tullow added to the six
operated exploration blocks already held with the
award of block e11 tullow and its partners initiated
two major regional 3d seismic reprocessing
programmes in 2009 over 1000 sq km of seismic
on the e and d blocks have been included and results
thus far are very encouraging exploration drilling is
planned for later in 2010
portugal
tullow holds interests in three blocks in the
alentejo basin – lavagante santola and gamba
interpretation of 3000 km of proprietary 2d seismic
and over 5000 km of 2d has resulted in a number
of highrisk exploration leads being developed
following completion of the agreed work programme
and a detailed evaluation of the full subsurface
dataset in 2009 tullow plans to assign its interest
in this acreage to other licence partners
south asia
the demand for energy in asian economies
remains strong and this region offers tullow
excellent growth potential through exploration
particularly in pakistan where the group has a
significant nonoperated position
bangladesh
production from the bangora field increased from
100 to 120 mmscfd the maximum capacity of the
gas processing facility following a successful
workover and tiein of the bangora3 well in october
2009 in addition a hydrocarbon dewpoint control
system is being installed at the bangora processing
facility which will enhance condensate recovery
from the gas stream and deliver full specification
gas to the export pipeline the system is due to
be commissioned during the first half of 2010
elsewhere in bangladesh tullow was awarded
offshore block ss0805 as part of the third
licensing round contract negotiations are expected
to be completed in early 2010 thereby enabling the
acquisition of a 2d seismic programme during the
20102011 weather window
pakistan
as part of a restructuring of the group’s business
in pakistan tullow reached agreement during 2009
to dispose of its producing assets and focus on
nonoperated exploration activities in january 2009
a sale and purchase agreement was signed for the
chachar field and the field interest was transferred
to pakistan petroleum ltd in november 2009
a sale and purchase agreement was signed for
our interests in the sarasuri gas fields and
completion of that transaction is subject to
approval from the government of pakistan
the mesozoic and tertiary aged tethys basin between
kurdistan and pakistan forms one of the richest
petroleum provinces in the world and provides tullow
with access to significant upside potential existing
hydrocarbon infrastructure provides a ready link to a
growing regional energy market and creates lucrative
opportunities to quickly monetise discoveries
shekhan1 the first exploration well since the
restructuring of our pakistan business commenced
drilling in the kohat block in november 2009 the
well is designed to test a large thrust anticline and
is expected to reach total depth in latemarch 2010
based on several significant analogous discoveries
made in the surrounding areas in recent years
multiple sandstone and limestone reservoir
intervals are being targeted
elsewhere in pakistan seismic operations are
planned to recommence in the kalchas block results
to date enhance the prospectivity of this block with
confirmation that the surface anticline continues into
the subsurface forming a valid trap at depth
exploration drilling pakistan
the shekhan1 exploration well commenced drilling
in november 2009 wwwtullowoilcom 53
3d seismic survey french guiana
the geo caribbean seismic vessel acquired 2500 sq km 3d during 20092010
tullow’s exposure to highimpact drilling in french guiana
395
during 2009 tullow farmed down 33 and a further 25 of its guyana
maritime block to shell and total respectively where highrisk
stratigraphic traps analogous to jubilee have been identified
directors’ report business review
south america
in south america tullow’s main focus is on the
transform margin from guyana through suriname
to french guiana where the group is seeking to
replicate the success at jubilee throughout the
equatorial atlantic region tullow’s frontier exploration
programmes are being matured with a view to a
highimpact drilling campaign in 2010 and 2011
french guiana
following a complete reevaluation of the exploration
potential of the extensive 32500 sq km guyane
maritime block in 2008 the focus of attention shifted
to highimpact leads in the southeast portion of the
block the ‘eastern slope’ play these leads comprise
highrisk stratigraphic traps analogous to the jubilee
field offshore ghana being formed in similarly aged
upper cretaceous turbidite fans
to derisk the prospectivity and delineate drilling
targets a 2500 sq km 3d seismic survey commenced
in september 2009 and was completed in march 2010
processing and interpretation of this data will take
place during the rest of the year planning for drilling
operations has commenced with a view to securing
a deepwater rig to enable tullow to spud its first
well in the block around year end
in the fourth quarter of 2009 tullow farmed out
33 of its 975 holding in this block to shell and
a further 25 to total leaving tullow with 395
northpet investments retains the remaining 25
shell has an option to take up a further 12 and
the operatorship in late2010 the assignment
of interests to both shell and total await formal
approval from the french government
guyana
an extensive 3d seismic survey was completed over
the georgetown block early in 2009 the data has
been processed and interpreted and a number of
stratigraphic trap prospects at upper cretaceous
and tertiary levels have been identified and matured
a first exploratory well is expected to commence
around yearend
suriname
in the onshore uitkijk block the drilling programme
was completed in early 2009 the wells were
targeting stratigraphicallytrapped heavy oil at
shallow depths in lower tertiary sands analogous
to the adjacent tamberadjo field oil pay was
encountered in two wells the drilling of five wells
in the onshore coronie block in the same play was
originally scheduled for 2009 but due to delays with
the rig construction this has now moved into 2010 brian macpherson ehs superintendent
ngassa wellsite uganda funding for an exceptional
set of opportunities
we aim to develop the group’s production and cash flow profile
to enable us to fund a us500 million exploration programme
per annum so that we can continue to grow and develop tullow
as the leading global independent oil and gas company
finance review 56
we delivered results in line with expectations and the group’s
financial profile is in a period of transition in anticipation of
first oil and production rampup in ghana we maintained our
dividend this year and invested £758 million on highimpact
exploration and developing our major projects
risk management 62
as a business we could not function at such a high level unless
we are very specific about the identification and management of
risk and how we respond to changes in the external environment
6 56 tullow oil plc 2009 annual report and accounts
finance review
directors’ report business review
tullow has materially
strengthened its balance sheet
in the last 12 months with
us225 billion of new debt
facilities and £13 billion raised
from equity placings we now
have an appropriate capital
structure for the medium term
historically tullow has primarily been funded
through a combination of operational cash flow
portfolio management and reserve based
debt facilities
the scale of our current exploration portfolio
exploration success and associated appraisal
together with the fasttrack development of
two worldclass basins in ghana and uganda
have resulted in a number of important
operational and financial strategic decisions
being taken in 2009 and 2010
these will enable the group to continue to grow
and underpin the business with an appropriate
capital structure key decisions include
• continued operational focus on the development
of jubilee phase 1 in ghana the commercialisation
of the lake albert rift basin in uganda and a
highimpact exploration drilling programme
• raising £402 million of equity and extending the
reservebased lending debt facility to us2 billion
in the first quarter of 2009 and adding a corporate
debt facility of us250 million in december 2009
• taking a decision to preempt the sale of heritage’s
ugandan assets and then working to farmdown
our interests to 33¹⁄
³
 by bringing in partners
to deliver a unified and accelerated basin
development plan and
• raising a further £925 million of equity in january
2010 to facilitate the uganda preemption and then
after the farmdown to provide substantial financial
flexibility for the foreseeable future
from a financial perspective these decisions allow
tullow to bridge the gap between the group’s
current cash and profit generating ability and more
significant production and cash flow in the future
this starts with jubilee phase 1 production in the
fourth quarter of 2010
we are forecasting almost £1 billion
of capital expenditure for 2010
over 85 in africa
ian springett
chief financial officer
operating cash flow and capital investment
£374 million
tullow continues to invest in highimpact exploration and major
projects the operating cash flow generated by the business should
significantly improve from the fourth quarter of 2010 with first production
from jubilee phase 1
0
80
160
240
320
400
480
560
640
720
800
09 08 07 06 05
ea capital expenditure pd capital expenditure operating cash ﬂow wwwtullowoilcom 57
directors’ report business review
2009 financial results
2009 financial results were down compared with the
record results recorded in 2008 primarily because
of the following
• production volumes were down as expected by 12
• lower oil and gas prices and the impact of sterling
weakness on dollarbased costs
• exploration writeoffs were £174 million lower
in 2009 but this was more than offset by asset
disposal proceeds that were £231 million higher
in 2008 and
• an ias 39 charge of £37 million in 2009 compared
with a credit of £43 million in 2008
production commodity prices and revenue
working interest production averaged 58300 boepd
12 lower than 2008 due to natural decline in mature
fields and deferred production due to the reallocation
of capital to development projects and highimpact
exploration sales volumes averaged 48350 boepd
representing a decrease of 12 also driven by
changes in the proportion of sales arising from
production sharing contracts psc
on average oil prices in 2009 were lower than 2008
levels reflecting the global economic downturn
realised oil price after hedging for 2009 was
us600bbl 2008 us736bbl a reduction of 18
tullow’s oil production sold at an average discount
of 2 to brent crude during 2009 2008 4 discount
uk gas prices in 2009 were significantly lower than
2008 levels the realised uk gas price after hedging for
2009 was 393 pencetherm 2008 524 pencetherm
a reduction of 25
lower commodity prices and lower sales
volumes were partially offset by the weakening
of sterling against the us dollar which averaged
approximately gbp£1us155 in 2009 compared to
gbp£1us190 in 2008 overall revenue decreased
by 16 to £5823 million 2008 £6917 million
operating costs depreciation and impairments
underlying cash operating costs which exclude
depletion and amortisation and movements on
underoverlift amounted to £1551 million £728boe
2008 £1439 million £590boe in absolute terms
cash operating costs increased by 8 principally due
to the significant weakening in sterling during the
period which materially affected the cost in sterling
terms of the underlying us dollar cash operating
costs cash operating costs on a per barrel basis
increased by 23 above 2008 levels also impacted by
the decrease in production volumes during the year
depreciation depletion and amortisation charges
before impairment charges for the year amounted
to £2232 million £1054boe 2008 £1984 million
£814boe the depreciation rate for 2009 was also
materially affected by the weakening of sterling
when compared to 2008 the group has also
recognised an impairment charge of £81 million
£038boe 2008 £263 million £108boe in
respect of the chinguetti field in mauritania
at the yearend the group was in a net overlift
position amounting to 148000 barrels the
movements during 2009 in the overlift position
compared with 2008 and stock movements during
the year have given rise to a charge of £63 million
to cost of sales 2008 credit of £64 million
key financial metrics
2009 2008 change
production boepd working interest basis 58300 66600 12
sales volume boepd 48350 55000 12
realised oil price us per bbl 600 736 18
realised gas price pence per therm 393 524 25
cash operating costs per boe £
1
728 590 23
operating cash flow before working capital per boe £ 158 213 26
net debt £ million
2
718 400 80
interest cover times
3
63 178 115 times
gearing 
4
47 31 16
1 cash operating costs are cost of sales excluding depletion depreciation and amortisation and underover lift movements
2 net debt is cash and cash equivalents less financial liabilities net of unamortised arrangement fees
3 interest cover is earnings before interest tax depreciation and amortisation ebitda charges and exploration writtenoff divided
by net finance costs
4 gearing is net debt divided by net assets 58 tullow oil plc 2009 annual report and accounts
finance review continued
directors’ report business review
commodity hedging summary
at 3 march 2010 the group’s commodity hedge
position to the end of 2012 was as follows
administrative expenses of £495 million
2008 £430 million include an amount of
£113 million 2008 £79 million associated with
ifrs 2 – sharebased payments the increase in
total general and administrative costs is also due
to the continued growth of the group during 2009
with staff numbers increasing by 24 to 669 people
exploration cost writtenoff
exploration costs writtenoff were £528 million
2008 £2267 million in accordance with the group’s
‘successful efforts’ accounting policy which requires
that all costs associated with unsuccessful exploration
are writtenoff in the income statement this writeoff
is principally associated with exploration activities in
côte d’ivoire new ventures activity and licence
relinquishments in 2008 tullow undertook a
fundamental review of its exploration portfolio
following the decision to focus on fasttracking its
discoveries in ghana and uganda coupled with a
more selective highimpact exploration programme
this resulted in significant writeoffs in respect of
interests in mauritania suriname tanzania and
trinidad and tobago
derivative instruments
tullow continues to undertake hedging activities
as part of the ongoing management of its business
risk and to protect the availability of cash flow for
reinvestment in capital programmes that are
driving business growth
at 31 december 2009 the group’s derivative
instruments had a net negative marktomarket
value of £111 million 2008 positive £493 million
this is principally due to the increase in the oil price
from the beginning of 2009
while all of the group’s commodity derivative
instruments currently qualify for hedge accounting
a pre tax charge of £372 million 2008 credit of
£429 million has been recognised in the income
statement for 2009 the charge is principally due
to a combination of brent forward oil prices
strengthening during the year and reduced
volatilities with a consequent reduction in the time
value of the oil derivative instruments for tullow
this was only partially mitigated by a credit for time
value on gas derivative instruments arising from
uk gas prices which weakened during the year
hedge position
2010 2011 2012
oil hedges
volume – bopd 14500 11000 7000
current price
hedge – usbbl 8166 8355 8468
gas hedges
volume – mmscfd 2945 1043 431
current price hedge
– pencetherm 4200 4598 4706
operating profit
operating profit amounted to £951 million
2008 £2997 million a decrease of 68 the reduction
was principally due to lower commodity prices and sales
volumes and less profit relating to portfolio management
activities partly offset by lower exploration costs
writtenoff during 2009
gearing financing costs and interest cover
the net interest charge for the period was £376 million
2008 £433 million and reflects the increase in net
debt levels during 2009 offset by an increase in interest
capitalised during the year on qualifying assets
principally due to the jubilee phase 1 development
in ghana
at 31 december 2009 tullow had net debt of
£7183 million 2008 £4003 million while unutilised debt
capacity was in excess of us620 million the group’s
gearing was 47 2008 31 and ebitda interest cover
has decreased to 63 times 2008 178 times
taxation
the tax charge of £18 million 2008 £731 million
relates to the group’s north sea gabon equatorial
guinea ghanaian and mauritanian activities after
adjusting for exploration costs and profit on disposal of
subsidiaries the group’s underlying effective tax rate is
3 2008 26 the reduction in the effective tax rate is
principally due to the recognition of tax losses available
for utilisation against future revenues from ghana
dividend
the group has significant opportunities to increase
shareholder value by continuing to invest in its portfolio
of assets principally in ghana and uganda and the board
feels that it is appropriate to maintain the final dividend
at the 2008 level consequently the board has proposed
a final dividend of 40 pence per share 2008 40 pence
per share this brings the total payout in respect of 2009
to 60 pence per share 2008 60 pence per share the
dividend will be paid on 21 may 2010 to shareholders
on the register on 16 april 2010 wwwtullowoilcom 59
directors’ report business review
operating cash flow focused capital investment
reduced commodity prices and lower sales volumes
led to an operating cash flow before working capital
movements of £3735 million 2008 £5188 million
28 lower than 2008 this cash flow together with
the equity placing proceeds helped facilitate 2009
capital investment of £7574 million in exploration
and development activities payment of dividends
and servicing of debt facilities
based on the current estimates and work
programmes capital expenditure for 2010 is
forecast to be £990 million approximately 40 of
this investment will be for exploration and appraisal
and the remainder will be on development and
production activities tullow’s activities in ghana
and uganda will comprise approximately 60 of the
anticipated 2010 capital outlay
balance sheet
total net assets at 31 december 2009 amounted
to £15259 million 31 december 2008 £13092
million with the increase mainly as a result of
the 91 share placing in january 2009 currency
translation adjustments and hedge movements
net assets decreased by £327 million in the year
due to the movement of the hedge reserve in
accordance with ias 39 – financial instruments
recognition and measurement a reduction in net
assets foreign currency translation reserve of
£1258 million resulted from the strengthening of
sterling against the us dollar from us145 to
us160 in the year as a consequence underlying
us dollar denominated assets decreased in sterling
value terms at the year end
portfolio management
during 2009 tullow completed the sale of the
chachar field in pakistan for us75 million
£48 million received final consideration from
the sale of the hewettbacton interests and farmed
out an interest in the guyane maritime licence
in french guiana to shell and total
in october 2009 tullow commenced a transparent
farmdown process to sell a proportion of its interests
in blocks 1 2 and 3a in the lake albert rift basin
in uganda the purpose of this process was to bring
in an experienced and likeminded partner with
downstream expertise to commence an accelerated
basinwide development plan the process gained
strong interest from a number of major international
and national oil companies who visited the dataroom
and operations and made representations to the
government of uganda
on 23 november 2009 heritage oil plc tullow’s
partner in the basin announced that it intended
to sell its entire interests in uganda on 17 january
2010 tullow chose to exercise its right of preemption
on this transaction and formal request for government
consent for the assets to be transferred to tullow was
submitted on 2 february 2010 the acquisition price
for these interests is up to us15 billion
tullow is now working closely with the government
to gain approval for the preemption of the heritage
interests in parallel with the farmdown process
which is now at an advanced stage two new
potential partners have been identified cnooc and
total and it is expected that each partner will take a
summary cash flow
2009 2008
£m £m
revenue 5823 6917
operating costs 1614 1375
operating expenses 424 354
cash flow from operations 3784 5188
working capital and tax 2034 80
capital expenditures 7574 4604
investing activities 118 2887
financing activities 4578 1517
net decreaseincrease in
cash and cash equivalents 1127 1874
2010 capital expenditure
£990million
the current forecast for 2010 capital expenditure is approximately £1 billion a 30 increase on 2009
activity in ghana and uganda will account for 60
0 100 200 300 400 500 600 700 800 900 1000
total
rest of world
rest of africa
uganda
ghana
exploration  appraisal production  development 60 tullow oil plc 2009 annual report and accounts
finance review continued
directors’ report business review
one third interest in each of the three blocks
presentations by all parties have recently been
made to the relevant ugandan authorities and tullow
expects the transactions to be signed by the end
of april 2010 this will result in a unified partnership
with considerable experience and financial capability
to enable uganda to become a significant oil
producing nation
longterm funding
in march 2009 tullow finalised arrangements for
us2 billion £128 billion of new debt structured in
the form of secured reservebased lending facilities
with a sevenyear term in december 2009 this
was supplemented with a new us250 million
£160 million revolving credit facility tullow raised
£402 million in a placing of ordinary shares in
january 2009 and in january 2010 the group raised
an additional £925 million in a further placing of
ordinary shares together with the anticipated
proceeds from the ugandan farmdown process
this funding significantly strengthens the balance
sheet as tullow seeks to
• maintain a us500 million £320 million per
annum exploration programme and develop
longerterm exploration options
• accelerate development in uganda across
a unified basin with new partners and
• progress activities in ghana with accelerated
appraisal of the tweneboa discovery and initiate
subsequent phases of the jubilee development
accounting policies
uk listed companies are required to comply with
the european regulation to report consolidated
statements that conform to international financial
reporting standards ifrs the group’s significant
accounting policies and details of the significant
accounting judgements and critical accounting
estimates are disclosed within the notes to the
financial statements the group has not made
any material changes to its accounting policies
in the year ended 31 december 2009
presentational currency
with effect from 1 january 2010 the group will
present its financial statements in us dollars
the group has decided it is now appropriate to
change the presentational currency from sterling
as the majority of the group’s activities are in africa
where oil revenue and costs are dollar denominated
liquidity risk management and going concern
the group closely monitors and manages its liquidity
risk cash forecasts are regularly produced and
sensitivities run for different scenarios including
but not limited to changes in commodity prices
different production rates from the group’s portfolio
of producing fields and delays in development
projects the group normally seeks to ensure that it
has a minimum ongoing capacity of us500 million
£320 million for a period of at least 12 months
to safeguard the group’s ability to continue as a
going concern
following the placing announced in january 2010
the planned portfolio activity and with the
us2 billion £128 billion financing already secured
in march 2009 the group’s forecasts and projections
show that there is significant capacity and financial
flexibility for the 12 months from the date of the
2009 annual report and accounts
after taking account of the above the directors
consider that the group has adequate resources to
continue in operational existence for the foreseeable
future accordingly they continue to adopt the going
concern basis in preparing the 2009 annual report
and accounts
risk management
effective risk management is critical to achieving the
group’s strategic objectives and protecting its people
and reputation the management of key risks has
been assigned to individual executive directors
and senior managers the principal risks and
uncertainties facing the group their potential impact
and the mitigation strategies developed are detailed
in the risk management section commencing on
page 62 of this report
risks to 2010 performance
in common with other companies in the oil sector 
tullow is exposed to commodity price risk the delivery
of major projects and ensuring safe operations in all
locations the board determines the specific key risks
for the company and required mitigation plans and
reviews delivery on a regular basis risks for 2010
include delivery of jubilee first oil completion of
the uganda preemption and farmdown and
maintaining an adequate hedging programme
we are always looking at our
business to manage our capital
our funding and to keep an
appropriate balance between
exploration major projects
and development
ian springett
chief financial officer wwwtullowoilcom 61
directors’ report business review
capital market relationships
tullow takes great pride in achieving top quartile
and best practice performance in investor relations
and capital market communications in 2009
senior management participated in over 200 investor
meetings in the uk europe and north america
and presented at 13 capital market conferences
and hosted investors and sellside analyst events
in the uk
there was strong news flow during 2009 which
resulted in positive tsr of 99 the 14th best
performance in the ftse 100 index and in the top
quintile in tullow’s comparator group we were also
recognised for good disclosure with an award for the
most effective overall annual report in the ftse 100
for our 2008 annual report
as part of our ongoing strategy to improve
shareholder relations tullow commissioned the
rivel research group to undertake an independent
investment community perception study in december
2009 the study’s preliminary findings were received in
february 2010 the full report will be presented to the
board in april initial findings confirmed the high level
of respect the investment community has for the
tullow management team and the group’s strategy
it has also identified specific strategic challenges for
the board to consider and communicate on during
2010 in addition the study demonstrated a high
approval rating for the effectiveness of tullow’s
investor relations programme which provides
open and transparent disclosure and good access
to tullow executive management
financial strategy and outlook
tullow’s financial strategy is to ensure the group
has a strong and well funded balance sheet this
means having the capacity to undertake a significant
and growing activity set through a combination of
operating cash flow and an appropriate mix of debt
and equity funding supplemented by selective
acquisitions and divestments
the outlook for 2010 is very positive for tullow
first oil from jubilee in the second half of 2010
the group’s equity fund raising and the successful
completion of the ugandan farmdown will all
ensure that tullow is adequately capitalised to
fund its growth strategy
ian springett
chief financial officer
international ownership
40
in 2009 tullow grew its north american and asian
shareholder base 40 of tullow shares are now owned
by investors outside of the uk
75
5
5
15
institutions
corporates  non proﬁt
private investors
other
21
13
4
2
60
europe excluding uk
north america
asia
rest of world
united kingdom
institutional ownership
75
tullow has a well established base of global institutional investors
which the executive team and senior managers meet on a regular
basis to discuss the operations and strategy of the business 62 tullow oil plc 2009 annual report and accounts
risk management
directors’ report business review
managing risk effectively is a critical element of
our corporate responsibility and underpins the
safe delivery of our business plans and strategic
objectives it protects our reputation supports our
ability to do business and helps to create longterm
competitive advantage risk management is
embedded in tullow’s organisation structure
operations and performance management tools
the group has a systematic approach to risk
identification and management which combines
the board’s assessment of risk with risk factors
originating from and identified by the group’s
business units and incountry operations
monitored monthly
overall responsibility for risk management resides
with tullow’s board of directors key risks are
monitored by the board as part of a monthly
operational and financial management report for
the group which includes operational financial
ehs and external market progress against predefined
performance indicators in this report progress in
implementing plans to manage risks is through a
narrative commentary and a traffic light system in
this way it is clear whether risk mitigation has been
achieved is in progress or has escalated and requires
immediate attention this provides a dynamic risk
management process where new risks are identified
and mitigation processes are refined in the context of
the current external operating environment
clear accountability
tullow has nominated executive directors with
responsibility for key risks and this approach is
closely aligned with the group’s business model
which integrates and coordinates exploration
production finance legal and governance
decision making
part of group strategy
while risk management operates on a rolling
calendar basis key risks for strategic delivery
of the group’s business plans and objectives are
identified as part of the board’s annual review of
group strategy the chief executive’s review sets out
the group’s growth strategy strategic objective and
strategic priorities which is on page 22 of this report
embedded in the business
the executive directors meet weekly to discuss
strategy implementation and separately with the
senior management committee smc the smc
comprises the general managers of ea pd
and finance and the heads of corporate planning
 economics commercial hr and risk  marketing
and this group is responsible for delivery of the
annual budget this reporting and communication
structure between the executive directors and smc
leads to an effective twoway exchange of information
and ensures coordinated decisionmaking takes
place with a premium placed on risk management
in each area of risk the executive directors are
supported by members of the senior management
team or senior managers with functional business
unit or incountry roles accountability for managing
risk is assigned to individual managers and each
employee is personally responsible for managing
risk within the remit of their role
independently reported
the risk reporting process is coordinated
independently by the group internal audit manager
with input from the executive directors and senior
managers accountable for managing risks this
provides the board with an active actionoriented
process that closely monitors key risks the system
also validates progress being made in mitigating
risk throughout the year across the business
linked to annual performance
tullow undertakes a detailed annual business
planning and budget process extending over a
threeyear planning horizon the budget provides
the key financial measures against which the
efficiency and management of individual work
programmes and the performance of the group is
measured the budget and planning process
includes annual objectives and targets covering
production development exploration ehs and
financial performance which are set at a business
unit and asset level business plans are agreed with
the board together with risks to delivery and defined
operational targets
as a business we could not function properly unless we
are very specific about the identification and management
of risk and how we respond to changes in the external
operating environment wwwtullowoilcom 63
directors’ report business review
actual performance against the plan is reported on
a monthly basis including an explanation of key
variances on a quarterly basis senior management
assess the group’s performance through a series of
reviews with business units these reviews include
an assessment of risks to delivery and measures
being implemented to manage these potential risks
longer range financial projections are also
regularly prepared
this operational risk management and reporting
process combined with the board’s strategic risk
review ensures that risk management is linked to
strategic delivery and the achievement of business
unit operational targets and objectives
defined audit committee participation
the audit committee plays a key role in reviewing
the effectiveness of the group’s internal control
procedures and financial risk management systems
in 2009 the committee approved the annual internal
audit plan and received summary results from all of
the audits conducted during the year in addition the
committee monitors the integrity of the financial
statements and the work of the external auditors
reviews the work of the independent reserves
auditors erc and the arrangements in place for
managing information technology risk relating to the
group’s critical business systems further details on
the audit committee can be found in the corporate
governance section on page 86 of this report
how risk management responds
a key feature of tullow’s approach to risk are the
actions taken in response to situations where risks
crystallise we reacted quickly to our first fatality in
2009 and developed a comprehensive response
culminating in a groupwide health and safety audit
by the end of the year the key actions arising from
this audit process will be implemented in 2010 full
details on our response to this fatality are on
page 73 of this report
how risk management evolves
tullow has established dedicated project teams to
manage major developments in ghana and uganda
as part of that process project milestones were
established covering ehs cost schedule and
technical aspects of the development at each stage
detailed risk analysis is completed with inputs from
partners as appropriate plans to mitigate these
risks are developed by the project teams and
reviewed by the executive and the board
on an ongoing basis the jubilee project development
team produce a comprehensive monthly report that
provides a detailed summary of progress being made
in meeting key project milestones key execution risks
are identified along with the mitigation actions being
implemented to manage these risks through this
process risk identification mitigation and monitoring
are completed as part of the daytoday management
of these operations as risks are effectively mitigated
they are replaced with emerging risks
the report is distributed to senior management
partners and the ghanaian government and also
forms part of the group’s monthly operational and
financial report for the tullow board
appropriate policies and procedures
tullow has detailed policies procedures and systems
in place to support risk management across the
group these include the group’s code of business
conduct hr and ehs policies and systems supply
chain management crisis management plans and
iso14001 certification of the group’s environmental
management system further information on these
are contained in the corporate responsibility section
of this report on page 70
2010 principal risks
the group has identified its 2010 principal risks
as being
• execution risk in major development projects
in ghana and uganda and
• exploration risk in the context of a very active 2010
programme which includes up to 12 equatorial
atlantic 10 ugandan and eight wildcat wells
planned in our 2010 ea programme
enhanced risk disclosure
tullow groups risk into strategic financial
operational and external risk throughout the year
we have critically reviewed and evaluated the risks
the group faces we have synthesised these in this
year’s report and have improved our disclosure
through aligning risks with executive director
responsibility group’s kpi’s and related policies and
systems in recognition of the level of strategic risk
associated with the group’s major projects key
operational and business milestones have been
added to performance indicators we have also
reported on the progress made during 2009 in
key group risks
how we are organised
read more on page 8
at tullow a strong governance
and organisational framework
defines the roles and
responsibilities of your board
and senior management 64 tullow oil plc 2009 annual report and accounts
risk management continued
directors’ report business review
risk kpi mitigation
strategic risk
impact ineffective or poorly executed strategy fails to create shareholder value or fails to meet shareholder expectations
strategy fails to
meet shareholder
expectations
top quintile tsr strategy focused on delivering ghana and uganda developments and a selective highimpact
exploration programme effective communication with all stakeholders based on uniform
open and transparent dialogue
loss of key staff and
succession planning
staff turnover an open engaging and empowering culture career potential and remuneration policies
to attract and retain staff succession planning specific development and training policies
and the continuing success of the group
financial risk
impact asset performance and excessive leverage results in the group being unable to meet its financial obligations
insufficient liquidity
inappropriate
financing strategy
liquidity profile
capital expenditure and
cost management targets
prudent approach to debt and equity with a balance maintained through refinancing and equity
placing regular board review and approval for financing options short and longterm cash
forecasts reported to senior management and board monthly maintenance of strong banking
and equity relationships
cost and
capital discipline
operating cost per barrel
full finding costs
per barrel
comprehensive annual budgeting process covering all expenditure approved by the board
executive management approval required for major categories of expenditure effectively
managing capital allocation monthly reporting versus budget with variance analysis
operational risk
impact operational event impacting staff contractors communities or the environment leading to loss of reputation andor revenue
ehs failures and
security incident
no major environmental
incidents
ltifr 10 and top
quartile industry safety
performance
ehs performance standards set and monitored regularly across the group through
performance reporting ehs management system implemented clear policies and
procedures supported by strong leadership accountability and commitment throughout
the organisation
key development
failure
specific yearly base and
stretch targets that reflect
key project milestones
technical financial and board approval for all projects and dedicated project teams
established risk evaluation and progress reporting initiated for all projects
project milestone kpi’s established for ghana and uganda
sustained
exploration failure
reserves and resources
organic replacement
full finding costs
per barrel
board approval of ea programme finding cost per barrel and highgrading of the group’s
portfolio measuring success of exploration spend reported monthly to board use of
appropriate technologies and technical excellence in exploration methodologies
external risk
impact the overall external political industry or market environment may negatively impact on the group’s ability to independently grow and manage its business
corporate
responsibility
top quintile
industry performance
consistent ethical standards established and applied through code of business conduct and
contract and procurement procedures developing and maintaining successful relationships
with governments and communities regular review of compliance requirements with periodic
board reporting
oil gas price volatility
realised commodity prices hedging strategy agreed by board monthly reporting of hedging activity
hostile acquisition
remaining independent robust defence strategies against hostile acquisitions effective investor engagement
and ongoing open honest and transparent communications programmes
 includes corruption or reputation risk political risk and fiscal change and corporate governance failings wwwtullowoilcom 65
directors’ report business review
progress in 2009
executive
responsibility
policies and
systems
read
more
jubilee phase i development on track for q4 2010 first oil within budget
project milestones met approval of the plan of development field unitisation
agreement and environmental impact assessment granted uganda commercial
threshold exceeded preemption and farmdown accelerating development
programme underway
aidan heavey annual business plan
smc responsibility
monthly reporting
annual strategy review
ir programme
pages
10 and
11 19
and 24
staff numbers increased by 24 to support business growth positive
results from employee survey succession planning and staff development
programmes established
graham martin living our values hr
function and policies
training and development
pages
18 74
and 75
significant strengthening of balance sheet through equity placings
in 20092010 realising £13 billion us2 billion reservebased refinancing
additional us250 million revolving credit facility secured
ian springett finance strategy cash
flow forecasting and
management capital
allocation processes
pages
56 to 61
capital expenditure increased during year to accelerate exploration and
appraisal activities in ghana and uganda together with licence acquisitions
in the liberian basin and exploration drilling in côte d’ivoire
paul mcdade
angus mccoss
delegation of authority
doa and budgeting and
reporting processes
pages
56 to 61
ehs performance measures met ehs leadership and accountability
process updated and embedded enhanced accident and incident reporting
following bangladesh fatality comprehensive response plan implemented
and hs audit completed by yearend
paul mcdade ehs policies ims toes
ems crisis management
procedures hs policy
ehs leadership team
pages
28 and
29 70
to 73
jubilee development milestones met with project on track and on budget uganda
exploration and appraisal programme confirmed in excess of 800 million barrels
of oil accelerated basin development programme through heritage deal
preemption and advanced farmdown process
paul mcdade ims ehs systems
and policies doa
code of business
conduct risk
management process
pages
70 to 73
record 87 exploration and appraisal success including 300 million barrel
jobirii discovery in uganda tweneboa oil and gas discovery in ghana
and venus b1 well in sierra leone
angus mccoss gelt competitive capital
allocation process clear
exploration strategy
pages
8 and 9
24 26
to 28
review and update of code of business conduct establishment of external
affairs function review of political and country risk process completed
graham martin code of business
conduct cr policies
social enterprise
investment
pages
68 to 75
78 to 90
conservative hedging policy with realised oil and gas prices of us60bbl
and 39 pence per therm detailed monthly board reporting of hedge positions
and performance
ian springett hedging strategy
doa
pages
25 58
56 to 61
defence strategy updated and ongoing review of readiness arrangements with
key advisors
graham martin documented defence
manual
– goretti kabajumbura local community worker
kaisotonya region uganda creating shared prosperity
our corporate responsibility approach is to work more
closely with external stakeholders to ensure that oil and
gas resources generate new opportunities for longterm
economic development creating shared prosperity for all
corporate responsibility 68
to achieve our vision we take a longterm perspective
in protecting our reputation managing risk investing in
people and creating the right operating environment to
enable us to successfully execute our strategy
living our values 70
as our organisation grows we must not lose sight of the
unique characteristics that have supported our success
to date
environment health and safety 72
successful ehs performance depends on keeping line
management fully engaged with ehs and we have
a 21member ehs leadership team at tullow to
support this
our people 74
feedback from employees is critical in helping us
understand where there is room for improvement
or where we simply need to try a little harder
7 68 tullow oil plc 2009 annual report and accounts
corporate responsibility
directors’ report business review
corporate responsibility is part of how we organise and run our business
at tullow we believe it is fundamental to implementing our strategy
and accomplishing our strategic objective
our vision is to be the leading global independent
exploration and production company to achieve
this we take a longterm approach in protecting
our reputation managing risk investing in people
and creating the environment that we need to
successfully execute our growth strategy and deliver
our business plans by doing this well we create
competitive advantage which in turn enables tullow
to create longterm value for all our stakeholders
our vision and growth strategy are supported by
six strategic priorities and three of these relate
to corporate responsibility
• ensuring safe people procedures and operations
and minimising environmental impacts
• building longterm relationships with local
governments communities and key
stakeholders and
• continuing to develop a strong team with excellent
commercial technical and financial skills
a transparent and accountable approach
the group has a strong governance and
organisational framework that promotes
accountability transparency and achieving
the highest ethical and business standards
corporate responsibility spans key areas
that are embedded in how we run our business
and each area is the designated responsibility
of an executive director
• ehs is the responsibility of paul mcdade
chief operating officer
• governance including the group’s code of business
conduct is the responsibility of graham martin
general counsel and company secretary graham
also has responsibility for human resources
• risk management and supply chain management
are the responsibility of ian springett chief
financial officer as is investor relations which
is an important function in how we engage with
our shareholders and capital markets and
• social enterprise investment is the responsibility
of aidan heavey
how we organise and structure our business
is on page 8 and 9 of this report
2009 highlights
zero
significant environmental incidents
successfuleia
in ghana which achieved the first part of a two stage
government approval process
iso14001
recertification of the environmental management system
at the group level
14gnpc secondees
and four technicians welcomed to tullow for training
and development
20 staff turnover
during the year with the total workforce increasing
by 24 to 880 people
83 response rate
to our first global employee and contractor survey
076l tifr
which achieved our baseline target but did not deliver
top quartile industry performance
us20million
on voluntary social enterprise investment in over
100 projects in 11 countries
 group kpi
glossary
ehs environment health and safety
eia environmental impact
assessment
gnpc ghana national
petroleum corporation
iso international organization
for standardization
kpi key performance indicator
ltifr lost time injury frequency
rate measured in ltis per million
hours worked
kpis pages 18 and 19 wwwtullowoilcom 69
directors’ report business review
a new external affairs function
tullow has grown very rapidly in the last five years
and part of that journey is that we continually strive
to be a better run company big projects bring big
responsibility and we need to match our significant
social responsibilities in africa in particular and
the wider reputation management issues that come
with having worldclass oil projects in 2009 tullow
established an external affairs function that reports
directly to aidan heavey chief executive officer
this new function will
• reshape our corporate responsibility
committee and its terms of reference
• create internal relationships and systems that
ensure that corporate responsibility activities
and initiatives are joinedup across the group
• develop a wider programme for stakeholder
engagement and dialogue with communities
governments nongovernmental organisations
and national and international media and
• deliver a major stepchange in how we
approach and support social enterprise
and community investment
another part of the responsibility of the external
affairs team will be to improve our disclosure in
the area of corporate responsibility and move tullow
towards best practice reporting in this area we know
that being transparent helps us to create trust and
confidence and effective communication is an
essential part of that
creating shared prosperity
a key output of a fourday external affairs
workshop in uganda in january 2010 was to define
a new longterm approach to inform all corporate
responsibility activities moving forward we will work
more closely with external stakeholders to ensure
that oil and gas resources create shared prosperity
growing stakeholder engagement
while we recognise that our new external affairs
function will enhance wider external stakeholder
engagement processes the group’s engagement
processes with shareholders communities and
employees see tullow talkback on page 75
developed further in 2009
education in uganda
in uganda we are providing education support in teaching standards learning
materials and physical infrastructure we have partnered with link community
development to provide teacher training in eight schools surrounding our operations
in the hoima and buliisa districts we are renovating and constructing schools
building housing for teachers and supporting school library projects this programme
has been universally welcomed by teachers the education standards authority and
district education officers
for a company yet to produce first oil
tullow ghana has done so well in consulting
with diverse stakeholders and this gives a
foretaste of the relationship that will exist
with local communities
nana nketia
paramount chief western region ghana 70 tullow oil plc 2009 annual report and accounts
corporate responsibility continued
directors’ report business review
of our activities in addition to regular local
community visits engagements include local
radio talk shows and town hall meetings
which attract a cross section of stakeholders
in uganda we opened two community liaison
offices in 2009 to support our community engagement
strategy community liaison offices act as local
resource centres providing information not only on
tullow’s operations but also on what stakeholders
can expect from the emerging oil and gas industry
we will be opening six community liaison offices
in the western region of ghana in 2010
appropriate policies procedures and
management systems
part of tullow’s journey has also been to continually
develop policies procedures and management
systems that support the highest standards of
governance and corporate responsibility the group
has a framework for the consistent application
of the standards that all of our operations must
comply with we safeguard this through corporate
governance processes together with monitoring
and oversight by the board we benchmark
consistent application though internal
audit reviews
shareholder relations
communication with shareholders is given
high priority and we hold regular dialogue with
institutional investors and other capital markets
participants throughout 2009 executive directors
and senior management conducted over 200
individual meetings the board receives regular
reports covering key investor meetings and activities
as well as shareholder and investor feedback
tullow conducted a community investment
perception survey in the first quarter of 2010 the
findings of which will be presented to the board for
consideration in april preliminary headline results
confirmed a high level of respect for tullow’s
management team and strategy in addition
the survey found that tullow’s investor relations
programme is highly rated in relation to a global
companies peer group oil and gas peers and
ftse 100 peers
community engagement
we are committed to open and consistent
communication with local stakeholders and we
believe this is pivotal to tullow’s reputation as a
responsible operator our community relations
teams are keeping local communities informed
living our values
we have a shared vision across the
business wherever we work living
our values captures and articulates
the four main aspects of the way we
do business in tullow so that everyone
working for or with tullow can be
aligned with our expectations
our values are prominently displayed
across the tullow world we use them
as the foundation of our recruitment
and performance management
processes demonstrating that how
we do things is just as important
as what we do
in a rapidly growing organisation
such as ours it is easy to forget the
fundamentals of success and we
are determined to maintain the core
values we started with and which
have strongly contributed to our
phenomenal success story
in our 2009 employee survey 76
of respondents were positive that
these values were alive at tullow
focus
on results
entrepreneurial
spirit and
initiative
integrity
and respect
commitment 
to tullow
and each
other
focus on results
strong sense of focus on results
driving tasks and projects through
to completion with the ﬂexibility
to adapt to changing situations
integrity and respect
work with integrity and with
respect for people and for
the environments in which
we operate
commitment to
tullow and each other
work in a collaborative manner
empowering ourselves and others
whilst taking responsibility for
our actions
entrepreneurial
spirit and initiative
maintain our entrepreneurial
and creative spirit as we
challenge ourselves to develop
the business and ourselves in 2009 these reviews included the application of
the delegation of authority and budgetary approval
ehs statistical reporting procedures and employee
induction processes
key aspects of our policies and systems include
• code of business conduct incorporating general
business principles ethics  integrity policy
whistleblowing policy and human rights policy
setting out the required standards for employee
and contractor behaviour
• integrated management system which sets
minimum business standards to be used
throughout tullow including ehs risk
management guidelines
• ehs policy sets out tullow’s commitment to
high standards of ehs performance across
the business supported by ehs leadership
commitment statements
• tullow oil environmental standards toes provides
guidance and information to internal and external
stakeholders on tullow’s management approach
to environmental issues and acts as a knowledge
sharing tool within the organisation
• human resource policies – living our values
harassment and equal opportunity – establish a
consistent set of values and standards for managing
employees and contractors throughout the group
• supply chain management have detailed
procedures for tendering evaluation selection
and award of contracts that require competitive
tendering and evaluation with management
approval for all significant contract awards
• risk management guideline defines the process
for identifying quantifying and managing risk
throughout the entire asset life cycle and
• crisis management plans define the philosophy
and approach to managing any local emergency
or company crisis
further tullow has recertified the corporate
environmental management system to iso 14001
standard in 2009 during this process specific audits
have been carried out in the uk dublin cape town
bangladesh pakistan and mauritania the application
of this standard provides a framework for identifying
and evaluating key areas of environmental risk
risk management and review through all phases
of operations
hathay bunano project in bangladesh
the communities surrounding our bangora operations in the comilla district bangladesh are predominately employed in the
agricultural sector which offers very few employment opportunities for women our partnership with social business enterprise
hathay bunano proshikhan society hbps generates sustainable income and economic opportunities for women by offering
training and employment in the production of crochet toys currently 200 women have completed training and are now earning
independent incomes the centre also offers free child care and very flexible working conditions
wwwtullowoilcom 71
directors’ report business review 72 tullow oil plc 2009 annual report and accounts
key stakeholders that were then carried forward into
the eia process in december 2009 the ghana epa
issued the first part of a twostage approval to cover
the installation and commissioning phase of the
project the eia met both ghanaian legislative
requirements and international good practice
similarly in french guiana before tullow could
begin its seismic activities offshore it was important
to develop a baseline understanding of marine
biodiversity to ensure we mitigated any negative
impacts from our operations in 2009 we began
conducting an eia we partnered with the south
paris university to assist us and are working closely
with the government and national environmental
regulators to ensure we acquire a sound
understanding particularly of the marine mammals
and turtles that are known to occupy the area
in 2009 in the lake albert rift basin in uganda we
drilled the ngassa2 well which had to be sensitively
located due to subsurface constraints and distance
under the lake of the target location all personnel
involved in the ngassa2 project including our rig
contractors subcontractors and local employees
worked closely with us to ensure that the project
was completed with no safety issues and no negative
environment health and safety
over 66 million hours were worked representing
an 18 increase on 2008 as a result ehs teams
throughout tullow undertook a number of very
significant work programmes the key to successful
ehs performance is to ensure that line management
are fully supportive of and engaged with ehs
tullow’s ehs leadership team which was set up
in late2008 and comprises 21 senior personnel with
specific responsibility for higher risk activities across
tullow this group is led by paul mcdade chief
operating officer
environment
during the course of 2009 tullow with the support
of its partners and the ghana environmental
protection agency epa carried out the stipulated
environmental impact assessment eia for the
jubilee field an offshore development situated
60 km off the coast of ghana the project’s scale
set high expectations and created keen interest
to address this extensive public consultations
across the western and central regions of ghana
was undertaken as part of the eia programme this
allowed tullow to communicate information on the
proposed development and listen to concerns from
corporate responsibility continued
directors’ report business review
ehs leadership development
“in my role as business unit
managereuropeiparticipated in
the ehs leadership development
trainingduring2009iattended
two threeday sessions covering
two modules with others whose
responsibilities include high risk
ehs activities such as operations and
drilling both modules provided a
balance of theory practice policy
procedure and case studies they are
designed to include tullow material
which makes the content relevant
and real to all participants
“this training provided a great
opportunity to spend time with my
tullow peers and to listen to and
understand their ehs challenges
and lessons learnt perhaps most
important though was that we all
took on the challenge of ensuring
that our new learning is applied
and linked directly to continuous
improvement in ehs performance
at tullow”
claire hawkings
business unit manager europe environmental legacy while the remediation work
is ongoing it is clear that full reinstatement of the
ngassa2 site is achievable
first ever fatality
the safety of our staff contractors and members of
the public involved in our operations is a core value
for tullow and we focus our energy on maintaining
safe places of work and establishing high safety
standards in all that we do in may 2009 however
we failed to manage this adequately and tullow
suffered its first ever fatality when one of our
subcontractors was electrocuted at a construction
site in the bangora gas field in bangladesh
following this incident we made the site safe and
initiated a full investigation three senior managers
were mobilised to bangladesh and together with the
local team delivered a comprehensive investigation
that was fully documented the investigation
team reported progress directly to the tullow board
who remained actively involved in this incident
and the ongoing actions we also sought to provide
support to this man’s family and continue to do so
while clearly any death is one too many tullow has
worked hard to identify improvements from this incident
and implement them across the group we embarked
on a communication exercise to ensure everyone
in tullow understood what happened and reached
approximately 85 of all parties in tullow over a
sixweek period in other areas a revised electrical
inspection programme identified a series of installation
improvements our bangladesh team implemented
several operational improvements at the bangora
site including an improved third party electrical
inspection programme contractor management
and clarity on roles and responsibilities
we also undertook an independent health and safety
audit and identified some key learnings which focus
on our management system including understanding
of risk the management of change and the lack
of formal audit programme all of which will be
actioned in 2010
health and safety
a key health initiative introduced in 2009 was
developing and implementing a group malaria
programme malaria is a very serious illness and
is prevalent in many of the countries where tullow
operates we are strongly aware that malaria
presents a serious health risk to individuals in
our workforce who are travelling to or working
in malariaendemic areas and to the communities
around our operations malaria is both preventable
and curable but can be fatal if not treated promptly
during the year tullow developed and rolled out a
malaria management policy in close consultation
with the world health organisation and in line with
international association of oil and gas producers
ogp malaria guidelines for travellers tullow’s ehs
leadership team has also developed a personal
malaria programme and incountry programmes
supply chain management
we ensure that our suppliers align and comply with
our code of business conduct and adhere to best
practice standards we operate a competitive bidding
process that is centred around the quality  value and
integrity of the products and services being supplied
evaluation and selection of suppliers is based on
criteria such as availability reliability and price
providing tullow with efficient access to the best
commercial arrangements available mitigating
financial risk and delivering measurable value
a key element of our supply chain management
strategy  and one that helps develop local enterprise
is our drive to promote local content using local and
regional suppliers procurement and supply chain
management is not a centralised function instead
we have incountry teams with local knowledge
and this gives greater opportunity to prioritise
local procurement and support enterprise and
employment creation for local communities
as a result of this our suppliers range from
small and mediumsized local companies
to multinational corporations
there are high expectations of tullow and we
are investing in building a worldclass external
stakeholder relations programme in support of
working in partnership to create shared prosperity
rosalind kainyah
vice president external affairs
wwwtullowoilcom 73
directors’ report business review 74 tullow oil plc 2009 annual report and accounts
corporate responsibility continued
directors’ report business review
social enterprise investment
our overall social enterprise objective is to create
a lasting positive legacy from tullow’s operations
enterprise development is now our priority focus
area and underpins our aim to help communities
to support themselves over the longterm in 2009
we invested over us2 million on voluntary social
enterprise projects of this us17 million was
invested in projects in africa our budget has
significantly increased in 2010 to enhance our
contribution and support our role in social enterprise
and local community development particularly
around our major projects in ghana and uganda
our people
we introduced the new human resources strategy
in 2008 and with a 46 increase in staff numbers
in 2008 and 24 in 2009 a lot of work has been
undertaken in this area
reward  recognition
2009 saw the formation of a pensions governance
committee comprising company and staff
representatives with new plans being offered in
bangladesh ghana and uganda in 2010 in the
uk presentations on the spring budget and finance
act implications were provided to all staff a major
review of the way we hire contractors during 2009
resulted in a more streamlined costeffective
contractor engagement process
talent development
our t for talent programme went from strength
to strength in 2009 231 employees attended an
inhouse soft skills course totalling 470 days
training in london alone some core programmes
have been delivered globally such as effective
management fulfiling our commitment to
development opportunities for all we have
also taken the initial step in launching career
development frameworks with the first one being
undertaken in the tullow geosciences community
in april this year we will launch the first leadership
development programme aimed at our top
50 managers
performance management
our commitment in 2009 was to provide an electronic
process through tullow’s intranet for performance
management and this was delivered we had some
good learning on how the systems functioned and
the process will be further streamlined for midyear
reviews in 2010 along with this improvement a
bespoke performance management elearning
package was designed and made available to all
staff ensuring that in even the remotest locations
a consistent approach can be applied to this
important line management function
gnpc secondee programme
“aftergraduatingwithabsc in geology from the university of ghanaispent
three years with gnpc before joining tullow’s ghana subsurface team in
londonin2008duringmytime there iwas able to gain insight into welllog
interpretation reservoir characterisation software training and well
developmenttechniquesialso had coaching and mentoring team building
report writing and presentation skills training the programme is excellent
and has given me sufficient knowledge to fit into a working technical office
thesupportihavereceivedfrom experienced tullow people was fantasticand
iwouldlovetoworkforsucha company in the future”
mark prempeh
gnpc secondee
mark is now undertaking a tullow sponsored msc in petroleum sciences
at imperial college london culture and engagement
the hr team led the introduction of ‘living our
values’ which articulates the four key aspects
of tullow’s culture we feel are essential for us
to encourage and develop in new recruits our
organisation continues to grow rapidly and spread
geographically and we know we must not lose sight
of the unique characteristics that have supported
our success to date read more about ‘living our
values’ on page 70 of this report
developing incountry skills
we were delighted to welcome 14 secondees from
the ghana national petroleum company gnpc
one of our partners in the jubilee development to
tullow in 2009 we have a strong commitment to
developing an exploration and production ep
skills base in both ghana and uganda and our
experience with secondees from gnpc has
been positive and rewarding
this young team included talented graduates from
well engineering ehs petroleum engineering and
geosciences they participated in a diverse range
of industry training exams and environmental
awareness as well as a broad set of soft skills
training to equip them to play a major role in the
development of an oil industry in ghana all have
added value to our business by contributing to real
projects with meaningful work experience in various
functions we were delighted with their contribution
and the majority of secondees are now completing
tullow sponsored masters of science degrees in
various disciplines at leading uk educational
institutions including heriot watt imperial
college and universities in aberdeen and leeds
we also trained four production technicians on a
26 week training programme at tte in middlesbrough
uk who are specialists in the training of production
and operations technicians having completed their
offshore survival training the technicians returned
to ghana to join the tullow team in accra
tullow engagement survey top line results
a my job
b my career
chowamirecognisedandrewarded
d my boss
e my team
f my company
g tullow values
tullow engagement survey
top line results
in october 2009 we launched our first global employee
and contractor survey called tullow talkback the survey
was conducted by a third party to ensure confidentiality
and it was distributed electronically to all tullow
locations talkback addressed job career reward
and recognition leadership and management team
company and tullow values through a series of 80
questions it also included a range of open questions
seeking views on how to improve internal communications
what tullow’s reputation is about or any subject in
particular the respondent wanted to convey their
views on to the group’s leadership team
the results achieved were very positive showing high
levels of engagement and enthusiasm across the group
we set ourselves two benchmarks for a successful
survey – a 70 response rate and that 90 of employees
would recommend tullow as an employer to a friend
we achieved an 83 response rate and 91 of
employees would recommend tullow to a friend
we will report in full on the results of tullow talkback
and the progress we have made with our followup action
plans in the 2009 corporate responsibility report
go online at wwwtullowoilcom
0
10
20
30
40
50
60
70
80
90
100
g f e dc b a
positive neither negative
828
600
728
746
899
732
760
106
226 99
171
90
192
153
67 174 173 84 76 87
12
wwwtullowoilcom 75
directors’ report business review emmanuel kwadjodei production operations technician trainee
tte training centre middlesborough uk maintaining the highest
standards of governance
tullow is committed to all aspects of good corporate
and ethical behaviour policies and processes are in place
to ensure we comply fully with all legislative and regulatory
requirements and where those are inadequate or nonexistent
in areas of operation we apply responsible standards
chairman’s introduction 78
the board provides strategic leadership guidance and plays
a leading role in risk management this ensures the group
is well managed with a balanced approach to risk and reward
and stays on target with its strategic priorities
board of directors 80
there are 11 members on the tullow board five executive
directors and six nonexecutive directors including the
chairman and senior independent director
corporate governance 82
a governance highlight for 2009 is that this is the first year
of full compliance with the combined code
directors’ remuneration report 91
we provide a full explanation of the group’s remuneration policy
for executive and nonexecutive directors together with details
of their remuneration for 2009
other statutory information 101
8 78 tullow oil plc 2009 annual report and accounts
chairman’s introduction
directors’ report corporate governance
the tullow board seeks
to function in a manner that
encourages open and honest
discussion in an environment
of trust and mutual respect
at the heart of our continued success lie the principles
of good governance and corporate responsibility which
underpin our ability to deliver our business plans and strategy
governance highlights for the year are summarised in my
statement on pages 16 and 17
2009 board evaluation
the internal 2009 board evaluation undertaken by the
senior independent director concluded that there had been
considerable progress since the last full external evaluation
in 2007 new directors have settled in well to their board
duties and contribute fully at meetings corporate strategy
is well defined understood and disseminated throughout
the organisation and to all stakeholders the reordering of
board agendas in 2009 focused debate on the key strategic
issues facing the group and communication with employees
has improved substantially
rebalancing board time
while we did not record board discussion topics by the hour
the chart below is indicative of the themes and matters
which occupied us most during the year in such a fast
paced organisation that operates in a very dynamic
environment one of the key roles of the board is to respond
and reprioritise matters as appropriate and this we did
for example when tullow had its first fatality and when
heritage oil plc announced the sale of its ugandan assets
in addition to a strong strategic focus at board meetings
another new feature is invitations to external experts to
meet with the board with a view to ‘broadening our minds’
on topical issues
increased direct interaction with staff
the board visited cape town for three days in june and
through general staff gatherings presentations and other
initiatives significantly increased our level of direct interaction
with all employees during the year four nonexecutive
directors visited kampala and our ugandan field operations
in 2009 and one visited accra and our shore base facilities
the response to these initiatives has been very rewarding
and positive from the executive and board perspective it
reflects the importance of making leadership more visible
and showing strong commitment to the group together
with fostering a unified tullow culture particularly as our
employee numbers have increased 46 and 24 in 2008
and 2009 respectively
topics discussed at 2009
board meetings
pat plunkett
chairman
strategy including portfolio management
and acquisitions corporate planning
strategy days and external presentations
corporate governance including
combined code compliance code of
business conduct and related matters
financial management including liquidity
banking investor relations hedging and
financing generally
pd key projects particularly ghana
and uganda major project milestones
relations with stakeholders
ea including exploration campaigns
and new exploration business areas
ehs including bangladesh fatality
hr including organisational growth
and challenges
2009 objectives and performance
ensure that the group stays on target with its key
2009 business plans
the group delivered very well against its kpis for the year
see pages 18 and 19 for more information
review board committees and processes
the board’s committees continued to operate efficiently and
although consideration was given to changing the composition
of the committees it was felt that the current structure continued
to suit tullow for now improvement in communications between
the committees and the board will be actioned in 2010
define and progress succession planning
some initiatives have been taken but there is more to do
see 2010 board objectives
undertake key risk reporting mitigation and process evaluation
excellent progress was made risk management identification
mitigation and actionorientated monthly reporting
risk management is on page 62 to 65
enhance board meeting administration systems
some improvements were made but further efficiencies
are targeted see 2010 board objectives
40
10 10
15
10
75
75 wwwtullowoilcom 79
directors’ report corporate governance
strong shareholder and employee relations
the support of our shareholders has been fundamental to
the success of tullow we have a very active annual investor
relations programme that allows us to understand and take
due regard of different shareholder priorities we undertook
an independent investment community survey in the first
quarter of this year and the headline results are excellent
tullow’s investor relations efforts were rated very highly
on a global and ftse 100 scale and this is mirrored by the
award for the most effective overall annual report printed
and online in the ftse 100 for our 2008 annual report
there were some significant strategic challenges to the
board arising from the survey which we will begin to address
once the full report has been presented in april as we have
grown we have also invested in developing human resource
initiatives and fostering employee engagement the results
of our latest global employee survey are presented on
page 75 of this report
new external affairs initiatives
in 2009 recognising the need to match our growing social
responsibilities and wider reputation management issues
we established an external affairs function it is early days
yet but part of their remit will be to reshape our approach
to corporate responsibility review the corporate social
responsibility committee improve our external stakeholder
engagement processes and drive a major revamp of social
enterprise and community investment initiatives
consistently improving how we run tullow
2009 built on what has been an extraordinary period of
growth and success for tullow throughout this time one
of our guiding goals has always been to consistently become
a better run company we have committed ourselves to being
open and transparent with our employees owners partners
government and other key stakeholders this has helped us
generate trust demonstrate accountability and build our
reputation at the heart of this lies how governance and
corporate responsibility considerations are integrated into
our strategy and strategic priorities we reflect them in
how we run our business on a daytoday basis and how
decisions are made including how risk management
is embedded into our business model they are equally
reflected in how your board operates and the activities
we undertake and prioritise during the year
pat plunkett
chairman
2010 board objectives
the following are the key 2010 board objectives
a review of progress will be undertaken midyear
by pat plunkett chairman and graham martin
general counsel and company secretary
corporate strategy
• ensure board focus is on highlevel issues
and strategy and
• invite suitable external advisers and speakers
to board meetings to stimulate discussion
and debate
succession planning
• appoint external advisers
• consider matters within nominations
committee terms of reference
• develop clear roadmap for nonexecutive director
refreshment and chairman succession
• increase african profile of tullow board
management and staff and
• consider development plan for each of
the executives and senior management
board training and administration
• select suitable external courses for
nonexecutive directors and executives
and formalise directors’ training register
• continue to review membership of
subcommittees and
• investigate electronicweb based solutions
for board administration
board visibility and group communications
• attendance of directors at group functions
• demonstrate support for key offices
• consider further nonexecutive director visits
to key offices and
•improve accessibility of board to all staff 80 tullow oil plc 2009 annual report and accounts
board of directors
directors’ report corporate governance
executive directors
aidan heavey
2
chief executive officer age 57
a founding director and shareholder of the
company aidan heavey has played a key role
in the development of tullow from its formation
in 1985 to its current international status as
a leading independent oil and gas exploration
and production group a chartered accountant
he previously held roles in the airline and
engineering sectors in ireland aidan is a
director of traidlinks an irishbased charity
established to develop and promote enterprise
and diminish poverty in the developing world
particularly africa
ian springett
chief financial officer age 52
a chartered accountant ian springett was
appointed chief financial officer and to the
board on 1 september 2008 prior to joining
tullow he worked at bp for 23 years where
he gained a wealth of international oil and gas
experience most recently at bp he was the
group vice president for planning with other
senior positions including commercial director
of the supply and trading business upstream
cfo vice president of finance us cfo and a
business unit leader in alaska prior to joining
bp he qualified with coopers  lybrand
graham martin
general counsel and company secretary
age 56
grahammartinisauksolicitorandjoined
tullow as legal and commercial director
in 1997 from vinson  elkins a leading
international law practice prior to that he was
apartner indicksonmintowsaukcorporate
law firm he has over 30 years’ experience of
ukandinternationalcorporateandenergy
transactions and has been the principal legal
adviser to tullow since its formation in 1985
he was appointed general counsel in 2004
and company secretary in 2008
angus mccoss
exploration director age 48
angus mccoss was appointed to the board
in december 2006 he is a geologist with a
bp sponsored phd and prior to joining tullow
in april 2006 as general manager exploration
he had 21 years of wideranging exploration
experience working primarily with shell in
africa europe china south america and
the middle east he held a number of senior
positions within shell including americas
regional vice president exploration and
general manager of exploration in nigeria
he is currently a nonexecutive director of ikon
science limited and a member of the advisory
board of the industry backed energy and
geoscience institute of the university of utah
paul mcdade
chief operating officer age 46
paul mcdade was appointed to the board in
march 2006 mr mcdade joined tullow in 2001
and was appointed chief operating officer
following the energy africa acquisition in 2004
havingpreviously managed tullow’s ukgas
business an engineer with over 20 years’
experience he has worked in various
operational commercial and management
roles with conoco lasmo and erc he has
broad international experience having worked
intheuknorthsealatinamericaafricaand
south east asia and holds degrees in civil
engineering and petroleum engineering
nonexecutive directors
pat plunkett
23
chairman age 59
pat plunkett joined the board as a nonexecutive
director in 1998 and was appointed nonexecutive
chairman in 2000 mr plunkett is an accountant
with over 30 years’ experience in the financial
services sector particularly in the areas
of asset management stockbroking and
corporate finance since leaving abn amro
bank in 1998 he has been providing strategic
business advice to a number of private
companies he is a former director of
the irish stock exchange
1 steven mctiernan
123
senior independent director age 58
steven mctiernan was appointed as a
nonexecutive director in 2002 and was
appointed senior independent director
on 1 january 2008 mr mctiernan began his
career as a petroleum engineer working with
bp amoco and mesa in the middle east and
the uk in 1979 he joined chase manhattan
bank where he became senior vicepresident
and head of the bank’s energy group based in
new york from 1996 to 2001 he held senior
energyrelated positions at natwest markets
and then cibc world markets he is currently
principal of sandown energy consultants
limited a natural resources advisory
firm based in london
2 clare spottiswoode cbe
123
nonexecutive director age 57
clare spottiswoode was appointed as a
nonexecutive director in 2002 a mathematician
and an economist by training ms spottiswoode
began her career in the treasury before starting
her own software company between 1993 and
1998 she was director general of ofgas the
ukgas regulator she is chairmanofgas
strategies limited and also a nonexecutive
director of energy solutions inc and chairman
of energy solutions europe in november 2006
she became the policyholder advocate for
aviva plc previously she was deputy chairman
of british energy from 2002 to 2007
1 member of the audit committee
2 member of the nominations committee
3 member of the remuneration committee wwwtullowoilcom 81
directors’ report corporate governance
3 david bamford
123
nonexecutive director age 63
david bamford was appointed as a
nonexecutive director in 2004 with a
phd in geological sciences he has had over
23 years’ exploration experience with bp where
he was chief geophysicist from 1990 to 1995
general manager for west africa from 1995 to
1998 and acted as vice president exploration
directing bp’s global exploration programme
from 2001 to 2003 he is a director or advisor
to several small companies including his
own consultancy and he writes regularly
for journals such as oilvoice and rogtec
he cofounded finding petroleum as a
vehicle for online communication in
the oil and gas industry
4 ann grant
123
nonexecutive director age 61
ann grant was appointed as a nonexecutive
director in may 2008 she joined the uk
diplomatic service in 1971 from 1998 she
worked at the foreign and commonwealth
office in london as director for africa and
the commonwealth she was british high
commissioner to south africa from 2000 to
2005 she joined standard chartered bank
in london as a special adviser in 2005
she chairs the banking working group of the
commonwealth business council is a board
member of the overseas development institute
and an independent trustee on the uk disasters
emergency committee
5 david williams
123
nonexecutive director age 64
david williams was appointed as a nonexecutive
director in 2006 a chartered accountant he
brings a wealth of public company experience
to tullow from many years with bunzl plc where
he was finance director until he retired in 2006
and prior to that as finance director of tootal
group plc he is the joint chairman of mondi
plc and the senior independent director of
taylor wimpey plc he will be retiring from the
board of taylor wimpey plc on 31 march 2010
he is also a nonexecutive director of meggitt
plc and dp world limited a dubai quoted
company chairing the audit committee
at both companies
2 5
3
1 4 corporate governance
82 tullow oil plc 2009 annual report and accounts 
compliance with the combined code  
on corporate governance the code 
in working towards its strategic objectives the board continues 
to be committed to ensuring that the highest levels of corporate 
governance are achieved this is integral to its stated overall 
aim to create a culture amongst the company’s employees 
suppliers contractors and other industry partners which places 
strong emphasis upon high standards of business conduct 
ethics and integrity tullow’s code of business conduct which  
is reviewed by the board at least annually is available on  
the company’s website  
as a uk listed company tullow oil plc is required to  
make certain statements relating to the way it is governed 
covering issues laid down in the combined code on corporate 
governance issued by the financial reporting council frc and 
most recently amended in june 2008 the code a copy of the 
code can be found on the financial reporting council’s website  
at wwwfrcorgukcorporatecombinedcodecfm  
in compliance with these requirements this report which is 
deemed to form part of the directors’ report describes the 
manner in which the company has applied the main principles  
of governance set out in section 1 of the code  
the company is also required to state whether it has complied 
throughout the year under review with the detailed provisions  
of the code in recent years the board has been addressing  
the level of its detailed compliance and following a review it 
considers that the company fully complied with the provisions 
set out in section 1 of the code throughout the year ended  
31 december 2009 this is the first full year in respect of which  
the company has in the board’s opinion complied without 
exception to the code provisions this follows the rebalancing  
of the board completed during 2008 which resulted in at  
least half the board excluding the chairman comprising 
independent nonexecutive directors as required by the code 
details of the company’s corporate governance practices are 
set out below and are also available on the company’s website 
at wwwtullowoilcomaboutuscorporategovernancehtml 
the frc is currently consulting on proposed revisions to  
the code the revised code to be renamed the uk corporate 
governance code is expected to be published in mid2010 
following which the board will address its new provisions  
and report on the company’s compliance in the next  
annual report  
board of directors 
role of the board 
the board sets the group’s strategy ensuring that the 
necessary resources are in place to achieve the agreed strategic 
priorities and reviews management and financial performance  
it is accountable to shareholders for the creation and delivery 
of strong sustainable financial performance and longterm 
shareholder value to achieve this the board directs and 
monitors the group’s affairs within a framework of controls 
which enable risk to be assessed and managed effectively 
through clear procedures lines of responsibility and delegated 
authorities the board also has responsibility for setting the 
group’s core values and standards of business conduct and for 
ensuring that these together with the group’s obligations to its 
stakeholders are widely understood throughout the group 
composition 
the board currently comprises a nonexecutive chairman  
five executive directors and five independent nonexecutive 
directors each of the executive directors has extensive 
knowledge of the oil and gas industry  
together the nonexecutive directors bring a broad range  
of business commercial and other relevant experience to  
the board which is vital to the management of an expanding 
international company three of the five nonexecutive directors 
either currently hold or previously held appointments in oil and 
gas companies or companies with energy interests  
the board considers there is an appropriate balance between 
executive and nonexecutive directors with a view to promoting 
shareholder interests and governing the business effectively  
biographical details of the board members including details  
of any other major directorships held are set out on pages 80  
and 81 
composition of board
45
55
executive directors
nonexecutive directors
directors’ report corporate governance directors’ report corporate governance
wwwtullowoilcom 83
chairman and chief executive officer 
there is a clear separation of the roles of the chairman  
pat plunkett and the chief executive officer aidan heavey 
to ensure an appropriate balance of responsibility and 
accountability the division of responsibilities has been fully 
established set out in writing and agreed by the board 
the chairman is responsible for the effective running of the 
board ensuring that the board plays a full and constructive  
part in the development and determination of the group’s 
strategy and acting as guardian and facilitator of the  
board’s decisionmaking process 
the chief executive officer is responsible for managing the 
group’s business proposing and developing the group’s strategy 
and overall commercial objectives in consultation with the board 
and as leader of the executive team implementing the decisions  
of the board and its committees in addition the chief executive 
officer is responsible for maintaining regular dialogue with 
shareholders as part of the group’s overall investor  
relations programme 
nonexecutive directors 
appointment 
nonexecutive directors are appointed for an initial term  
of three years which may be extended by mutual agreement 
subject to satisfactory performance the letters of appointment 
of each nonexecutive director are available for inspection at  
the registered office 
meetings of nonexecutive directors 
in addition to their attendance at board and as appropriate 
committee meetings the nonexecutive directors also met 
formally on two occasions during 2009 without executive 
management present at these meetings the nonexecutive 
directors examined and reviewed the performance of the 
executive management this review process is in part dealt  
with by the board committees referred to on pages 86 to 88 
separately the chairman and chief executive officer held 
informal meetings with the nonexecutive directors to discuss 
issues affecting the group such as target objectives strategy 
key performance indicators and remuneration matters  
senior independent director 
the senior independent director is steven mctiernan in  
this role mr mctiernan is available to shareholders who have 
concerns that cannot be resolved through discussion with the 
chairman chief executive officer or chief financial officer or 
where such contact is inappropriate no such meetings were 
held or requested during the year 
independence and conflicts 
the board considers each of the current nonexecutive 
directors to be independent in character and judgement and 
there are no relationships or circumstances which are likely to 
affect or could appear to affect the judgement of any director  
with effect from 1 october 2008 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 group the board has satisfied itself that 
there is no compromise to the independence of those directors 
who have appointments on the boards of or relationships with 
companies outside the group the board requires directors  
to declare all appointments and other situations which could  
result in a possible conflict of interest and has adopted 
appropriate processes to manage and if appropriate  
approve any such conflicts 
election and reelection 
all new directors are required by the company’s articles of 
association to be elected by shareholders at the first annual 
general meeting agm after their appointment subsequently 
directors are subject to reelection by shareholders every  
three years where a nonexecutive director has served longer 
than nine years it is board policy that the director be subject 
thereafter to annual reelection in accordance with the code  
at the 2010 agm aidan heavey angus mccoss and david 
williams having been in office for three years since they were 
last elected retire and being eligible they offer themselves  
for reelection in addition as pat plunkett has now been  
a director for more than nine years he now retires annually  
and a resolution for his reelection will be proposed at this 
year’s agm   corporate governance continued
84 tullow oil plc 2009 annual report and accounts 
how the board operates 
board meetings 
the board holds scheduled meetings regularly during the  
year and meets on an ad hoc basis as required the board has 
arranged to hold at least one board meeting each year at one of  
the principal overseas offices of the group this provides senior 
managers from across the group the opportunity to present  
to the board and to meet the board members informally it  
also provides the board with an opportunity to meet a good 
crosssection of staff and to assess senior managers at  
first hand  
the attendance record of each director is shown below  
during 2009 the board met formally on 10 occasions two  
formal strategy review meetings were also held with senior 
management present in addition to the formal meetings of  
the board the chairman and chief executive officer maintain 
frequent contact with the other directors to discuss any issues 
of concern they may have relating to the group or as regards 
their area of responsibility and to keep them fully briefed on  
the group’s operations 
also in order to ensure that the nonexecutive directors are 
fully briefed on the more technical and operational aspects  
of our activities such as the jubilee offshore development and  
our extensive exploration programme those nonexecutive 
directors with particular expertise in these areas meet  
regularly with the chief operating officer and the exploration 
director to receive more indepth briefings  
attendance at meetings 
the attendance of directors at meetings of the board and  
its committees during 2009 was as follows 
no of meetings 
board 
10 
audit
4
nominations 
2 
remuneration
4
pat plunkett 1010 – 22  44 
aidan heavey 1010 – 22 –
david bamford 1010 34 22 34
ann grant 1010 44 22 44
graham martin 1010  – –  –
angus mccoss 1010 – – –
paul mcdade 910  – –  – 
steven mctiernan 1010  44 22 44
clare spottiswoode 1010  44 22  44
ian springett 1010 – –  –
david williams  1010  44 22  44
information flow 
directors have access to a regular supply of financial 
operational strategic and regulatory information to assist  
them in the discharge of their duties much of this information is 
provided as part of the normal management reporting process 
board papers are circulated in time to allow directors to be 
properly briefed in advance of meetings in addition board 
meetings generally include a review of the history performance 
and future potential of a material individual asset or business 
unit this is designed to ensure that all material assets are 
considered on a cyclical basis and to enable board members  
to familiarise themselves with the key assets and operations  
of the group 
independent professional advice 
in accordance with board policy all directors and committees 
have access to independent professional advice at the 
company’s expense as and when required 
matters reserved 
a formal schedule of matters reserved for board approval is  
in place and is reviewed annually 
the matters reserved include amongst others 
• agreeing the group’s overall strategy 
• approval of financial statements material acquisitions and 
disposals material contracts major capital expenditure 
projects and budgets  
• approval of any amendments to the annual budget and 
• a regular review of the group’s overall corporate  
governance arrangements 
delegated authorities 
certain matters are delegated by the board to the audit 
nominations and remuneration committees each of which  
is described in more detail on pages 86 to 88 
subject to these matters the board delegates authority for  
the management of the daytoday business and operational 
matters to the chief executive officer and the other executive 
directors who form the executive committee this committee 
meets weekly and is responsible for implementing group policy 
and monitoring the detailed performance of all aspects of the 
business the executive committee is assisted by the senior 
management committee smc which is responsible for 
managing the group’s portfolio of assets and delivering against  
the approved budget and plan the committee meets weekly 
with the executive directors and enables the right level and 
quality of resources to deliver our business objectives this 
committee which consists of exploration pd and finance 
general managers and the heads of planning  economics 
commercial hr and risk  marketing is also responsible  
for identifying evaluating and mitigating business risk as 
explained on pages 62 to 65 
8 tullow oil plc 2009 annual report and accounts wwwtullowoilplccom 9
how we are organised
directors’ report group overview
directors’ report group overview
we continue to invest in building our team and structuring 
our organisation so that we can deliver the exceptional growth
opportunities that the group has in its business today
• 11 members in total
• six nonexecutive directors including the chairman and senior independent dir ector
• chief executive ofﬁcer
• chief financial ofﬁcer
• chief operating ofﬁcer
• exploration director
• general counsel and company secretary
• audit committee
• nominations committee
• remuneration committee
the senior management committee smc is responsible for managing tullow’s business on a daytoday basis and ensuring safe delivery of the agreed annual budget and plan and effective risk evaluation management and mitigation
this team of senior managers works directly with the executive directors keeping them fully informed of business issues and opportunities across tullow and the industry
tullow has an integrated system for the management of strategic business and operational risk 
the board of directors has overall responsibility with additional resources provided by the audit committee each executive director has deﬁned responsibility and accountability for speciﬁc aspects of risk 
in each area executive directors are supported by members of the senior management team or managers with key functional responsibility
read more board of directors page 80 board committees page 86 corporate responsibility page 68 governance page 78 risk management page 62
at tullow a strong governance and organisational framework deﬁnes the roles and responsibilities of our board of directors and senior management it is based on accountability transparency and achieving the highest standards of ethics and integrity it also plays a leading role in risk management 
this framework holds the board and management accountable for the group’s performance by ensuring we critically evaluate the business decisions strategies and risks we undertake it helps us to engage with and respond to our many stakeholders this in turn helps to protect and build our reputation and create longterm sustainable growth
board of directors board committees risk management
• external affairs • environment health  safety ehs • commercial • engineering • major projects • operations • production  development • well engineering
• business systems • corporate planning  economics • finance • internal audit • investor relations • risk  marketing • supply chain management
• compliance • human resources • secretariat
• global exploration leadership team • exploration  appraisal business • exploration new ventures • group geosciences • geophysical technology
graham brunton group ehs manager
rosalind kainyah vice president external affairs
andrew marks chief information ofﬁcer
joe mongan geophysical technology manager
david mooney group supply chain manager
tim o’hanlon vice president africa
chris perry head of investor relations
peter sloan group legal manager
gertjan smulders group engineering manager
roger swaine group projects manager
mike williams group well engineering manager
brian glover uganda 
dai jones ghana
brian kay angola 
richard lee bangladesh 
kemal mohamedou mauritania 
peter owens namibia 
kevin quinn dublin
david roux gabon 
bill torr cape town 
franco uliana côte d’ivoire 
muzaffar virk pakistan 
awa wane senegal 
nick woodallmason tanzania 
corporate functions incountry management
senior management committee
aidan heavey chief executive ofﬁcer paul mcdade chief operating ofﬁcer ian springett chief financial ofﬁcer graham martin general counsel and company secretary
angus mccoss exploration director
executive directors pete dickerson head of corporate planning  economics
chris flavell general manager exploration
gordon headley chief human resources ofﬁcer
martyn morris general manager production  development
mike simpson group commercial manager
julian tedder general manager finance
brian williams head of risk  marketing
senior management committee
how we are organised
read more on page
at tullow a strong governance 
and organisational framework 
deﬁnes the roles and responsibilities
of your board and senior management
8
directors’ report corporate governance directors’ report corporate governance
wwwtullowoilcom 85
board effectiveness  
board performance evaluation 
the 2009 evaluation of the board its committees and individual 
directors was as in 2008 carried out internally but this year 
was led by steven mctiernan the senior independent director 
in summary the 2009 board evaluation concluded that there 
had been considerable progress in many areas since the last 
full external evaluation in 2007 and the internal evaluation in 
2008 the more recent directors have settled in well to their 
board duties and contributed fully at meetings corporate 
strategy is believed to be well defined understood and 
disseminated throughout the organisation to all stakeholders 
the reordering of board agendas in 2009 focused debate on the 
key strategic issues facing the group and communication with 
employees has improved substantially 
the board recognised however that tullow’s exceptional growth 
and success had also brought challenges and that the board 
must continue to upgrade its approach and composition to meet 
them succession planning for directors was recognised as an 
area that will require special attention in 2010 to ensure that 
the board continued to have available to it the correct balance  
of skills and experience to meet the financial operational and 
governance challenges of growth 
the board’s committees continued to operate efficiently and 
although consideration was given to changing the composition  
of the committees it was felt that the current structure 
continued to suit tullow for the time being certain 
improvements in communications between the committees  
and the full board were noted for action in 2010 
as part of the board evaluation the senior independent director 
had discussions with each of the directors on his or her 
individual performance and separately the nonexecutive 
directors have reviewed the performance of the chairman  
with input from the executive directors the board is of the  
view that each nonexecutive director commits sufficient  
time to discharge his or her duties effectively 
in conclusion while recognising the need for continued 
improvement in the structure of board meetings and 
administrative procedures the board members considered that  
the board continues to function in a manner that encourages 
open and honest discussion in an environment of trust and 
mutual respect 
induction 
all new directors receive an induction as soon as practicable after 
appointment this includes meetings with senior management 
functional and business unit heads and where appropriate visits 
to the principal offices and operations the company secretary 
also provides new directors with an overview of their duties as 
directors corporate governance policies and established board 
procedures as part of the induction process  
continuing professional development 
all members of the board have access to appropriate training in 
respect of their obligations and duties as directors and during 
the year a number of the directors attended external seminars 
on relevant topics in addition specific briefings were also given 
to the board to ensure board members remain uptodate with 
current regulations and developments these included the 
implications for tullow of the 2009 uk bribery bill   corporate governance continued
86 tullow oil plc 2009 annual report and accounts 
committees 
the board has established the following principal committees 
each of which has written terms of reference approved by the 
board setting out its authority and duties copies of the terms 
of reference which were reviewed and updated where necessary 
during the year can be viewed on the about us section of the 
company’s website wwwtullowoilcom hard copies can also be 
obtained from the company secretary 
audit committee audit committee 
david williams david williams chairman chairman
david bamford david bamford 
ann grant  ann grant  
steven mctiernan steven mctiernan 
clare spottiswoode clare spottiswoode 
main responsibilities main responsibilities 
• monitoring the integrity of the financial statements  
and formal announcements relating to the group’s 
financial performance 
• reviewing significant financial reporting issues and 
accounting policies and disclosures in financial reports 
• reviewing the effectiveness of the group’s internal control 
procedures and risk management systems 
• considering how the group’s internal audit requirements 
shall be satisfied and making recommendations to the board
• making recommendations to the board on the appointment 
or reappointment of the group’s external auditors 
• overseeing the board’s relationship with the external 
auditors and where appropriate the selection of new 
external auditors and 
• ensuring that an effective whistleblowing procedure  
is in place 
the committee comprises five independent nonexecutive 
directors and oversees the group’s financial reporting and 
internal controls and provides a formal reporting link with  
the auditors  
david williams who is chairman of the committee is a 
chartered accountant and until his retirement in 2006 was 
finance director of bunzl plc currently he also chairs the audit 
committees of meggitt plc and dp world limited and is a 
member of the audit committee of taylor wimpey plc until  
he retires as a nonexecutive director of taylor wimpey on  
31 march 2010 it is a requirement of the combined code that at 
least one committee member has recent and relevant financial 
experience david williams therefore meets this requirement  
the performance of the committee was evaluated as part of  
the board evaluation process described on page 85  
directors’ report corporate governance directors’ report corporate governance
wwwtullowoilcom 87
the group’s external auditors are deloitte llp and the 
committee closely monitors the level of audit and nonaudit 
services they provide to the group nonaudit services are 
normally limited to assignments that are closely related to  
the annual audit or where the work is of such a nature that  
a detailed understanding of the group is necessary a policy  
for the engagement of the external auditors to supply  
nonaudit services has been implemented to formalise these 
arrangements which requires audit committee approval for 
certain categories or work a breakdown of the fees paid to  
the external auditors in respect of audit and nonaudit work  
is included in note 3 on page 119 to the financial statements in 
addition to processes put in place to ensure segregation of 
audit and nonaudit roles deloitte llp are required as part of  
the assurance process in relation to the audit 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 this confirmation was given and no matters of 
concern were identified by the committee 
the chief financial officer the group internal audit manager 
the general manager finance the deputy company secretary 
and representatives of the external auditors are normally invited  
to attend each meeting of the committee the chairman of the 
board also attends meetings of the committee by invitation the 
external auditors have unrestricted access to the committee 
chairman during the 2009 audit process the audit committee 
chairman met with deloitte’s audit engagement partner 
without the presence of management 
in 2009 the audit committee met on four occasions  
the key work undertaken by the committee was as follows 
• consideration and review of full year and halfyearly results 
 the committee met with the external auditors as a part  
of the full year and halfyearly accounts approval process  
 during this exercise the committee considered the  
most appropriate treatment and disclosure of any new or 
judgemental matters identified during the audit or halfyearly 
review as well as any recommendations or observations 
made by the external auditors 
• audit planning and update on relevant accounting developments 
 the group prepares financial statements under international 
financial reporting standards ifrss the adoption of new 
and revised standards and interpretations during 2009 and 
their impact on the financial statements are described on 
page 111 and 112 
• consideration and approval of the risk management 
framework annual internal audit plan and periodic  
reports from internal audit 
 the group internal audit manager has direct access and 
responsibility to the audit committee his main 
responsibilities include evaluating and developing the 
group’s overall control environment operating efficiency  
and risk identification and management at operating regional 
and corporate levels in fulfilling his role the group internal 
audit manager has direct access to the committee without 
reference to executive management during 2009 the audit 
committee chairman met with the group internal audit 
manager without the presence of management  
the committee approved the programme of 2009 internal  
audit work aimed at addressing both financial and overall  
risk management objectives identified within the group a 
number of internal audit reviews were undertaken during 
2009 covering a range of financial and business processes  
in the group’s main business units in london and cape  
town and the main operational locations in ghana and 
uganda detailed results from these reviews were reported to 
management and in summary to the audit committee during 
the year recommendations made as a result of the work of 
internal audit are tracked for timely implementation and 
reported to the audit committee periodically no significant 
weaknesses were identified as a result of risk management 
and internal controls reviews undertaken by internal audit 
during 2009 the group also undertook regular audits of  
nonoperated joint ventures under the supervision of business  
unit management and the group internal audit manager in 
addition the committee oversee the work of the independent 
reserves auditors erc and arrangements in place for 
managing information technology risk relating to the  
group’s critical business systems 
 updated whistleblowing procedures for the group were 
implemented during the year and an independent external 
reporting service is being introduced to enable staff to raise 
concerns confidentially the committee considers these 
amended whistleblowing procedures to be appropriate  
for the size and scale of the group  
• review of the effectiveness of the audit committee 
 during the year the audit committee completed a review  
of the effectiveness of external audit internal audit and of  
the audit committee itself through a series of questionnaires 
internal audit coordinated the review with results presented 
to the members of the audit committee the committee was 
considered to be operating effectively and in accordance with 
the guidance recommended by the smith committee included 
in the combined code 
 in addition and in line with best practice the effectiveness  
of tullow’s internal audit function that was established in 
2006 was independently reviewed by deloitte llp the results  
of this review confirmed that significant progress had been 
made in developing the function and that the internal audit 
process was operating effectively a plan to further develop 
the functions resources and capabilities is being implemented  
to ensure internal audit continues to effectively support  
the group 
 the external audit process was also considered to be 
operating effectively  corporate governance continued
88 tullow oil plc 2009 annual report and accounts 
nominations committee nominations committee 
pat plunkett pat plunkett chairman chairman
david bamford david bamford 
ann grant  ann grant  
aidan heavey aidan heavey 
steven mctiernan steven mctiernan 
clare spottiswoode clare spottiswoode 
david williams david williams 
main responsibilities main responsibilities 
• reviewing the structure size and composition of the  
board and making recommendations to the board with 
regard to any changes required 
• succession planning for directors and other  
senior executives 
• identifying and nominating for board approval candidates 
to fill board vacancies as and when they arise 
• reviewing annually the time commitment required of  
nonexecutive directors and 
• making recommendations to the board with regard to 
membership of the audit and remuneration committees  
in consultation with the chairman of each committee 
the committee comprises all the nonexecutive directors  
and the chief executive and meets as required during the year 
the committee met twice primarily to review board and board 
committee composition and succession matters 
the nominations committee continually reviews the composition 
and balance of the board to ensure that the group has the  
right structure skills and experience in place for the effective 
management of the group’s expanding business it has been 
recognised that the committee is likely to be particularly active 
in 2010 in planning for the progressive refreshment of the  
board in the coming years to ensure that there are directors 
with the appropriate skills and experience to match the 
particular challenges that will face tullow in the future the  
views of major shareholders will be sought at the same time 
the performance of the committee was evaluated as part  
of the board performance evaluation process described  
on page 85  
remuneration committee remuneration committee 
clare spottiswoode clare spottiswoode chairman chairman
david bamford david bamford 
ann grant  ann grant  
steven mctiernan steven mctiernan 
pat plunkett  pat plunkett  
david williams david williams 
main responsibilities main responsibilities 
• determining and agreeing with the board the remuneration 
policy for the chief executive officer chairman executive 
directors and senior executives 
• approving the design of and determining targets for an 
annual performancerelated pay scheme for the executive 
directors and senior executives 
• reviewing the design of share incentive plans for approval 
by the board and shareholders and determining the annual 
award policy to executive directors and senior executives 
under existing plans  
• within the terms of the agreed policy determining the 
remainder of the remuneration packages principally 
comprising salary and pension for each executive  
director and senior executive and  
• reviewing and noting the remuneration trends across  
the group 
when fulfilling these responsibilities the remuneration 
committee obtains independent advice where necessary  
and takes due account of emerging market and best practice 
together with any relevant regulatory guidance in addition the 
committee consults with major shareholders and investor 
representative bodies where appropriate 
the performance of the committee was evaluated as part  
of the board performance evaluation process described  
on page 85 
the directors’ remuneration report on pages 91 to 100  
contains further details of the role and activities of the 
remuneration committee 
directors’ report corporate governance directors’ report corporate governance
wwwtullowoilcom 89
shareholder relations 
communication with shareholders is given high priority and 
there is regular dialogue with institutional investors as well  
as general presentations to analysts at the time of the release  
of the full year and halfyearly results throughout 2009 
executive directors and senior management met with 
institutional investors in london and across the uk as well  
as in dublin and several other european cities five roadshow 
trips took place in north america and attendances at 13 uk  
and european conferences provided for comprehensive and  
engaging dialogue with shareholders with over 200 individual 
meetings held during 2010 tullow is planning to host a  
capital markets day in ghana for uk analysts the board 
receives regular investor relations reports covering key investor 
meetings and activities as well as shareholder and investor 
feedback as part of our ongoing strategy to improve  
shareholder relations tullow commissioned the rivel research 
group to undertake an independent investment community 
perception study in december 2009 the study’s preliminary 
findings were received in february 2010 the full report will be 
presented to the board in april initial findings confirmed the 
high level of respect the investment community has for the 
tullow management team and the group’s strategy it has 
identified specific strategic challenges for the board to consider 
and communicate on during 2010 the study also demonstrated  
a high approval rating for the effectiveness of tullow’s investor 
relations programme which provides open and transparent 
disclosure and good access to executive management  
the group issues its results and other news releases promptly 
via the london stock exchange’s regulatory news service  
and publishes them on the investor relations section of the 
group’s website wwwtullowoilcom regular updates  
to record news in relation to the group and the status of 
exploration and development programmes are also included  
on the website shareholders and other interested parties can 
subscribe to receive these news updates by email by registering 
online on the website a new corporate website with additional 
functionality was launched in february 2010 to enhance the 
group’s communication with all stakeholders the chairman is 
available to meet with institutional shareholders to discuss any 
issues and address any concerns in relation to the company’s 
governance and strategy nonexecutive directors have the 
opportunity to attend meetings with major shareholders and  
are available to attend if requested to do so meetings are  
also held with the corporate governance representatives of 
institutional investors when requested  
at the agm a business presentation is provided for the  
benefit of shareholders individual shareholders are given the 
opportunity to put questions to the chairman the chairmen  
of the audit nominations and remuneration committees  
and to other members of the board in addition the board is 
committed to maintaining strong links with its significant irish 
shareholder base and holds a business presentation in dublin 
following the agm to allow these shareholders similar access to 
the company notice of the agm is sent to shareholders at least 
20 working days before the meeting and details of proxy votes 
for and against each resolution together with votes withheld 
are made available after the vote has been dealt with on a show of 
hands in the event a vote at the agm is held on a poll the result  
of the poll including the votes cast for and against together  
with the votes withheld is made available as soon as reasonably 
practicable through a regulatory information service and on the 
group’s website  
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 
internal controls 
the directors acknowledge their responsibility for the group’s  
and the company’s systems of internal control which are 
designed to safeguard the assets of the group and to ensure  
the reliability of financial information for both internal use and 
external publication and comply with the turnbull committee 
guidance on the combined code the group’s internal control 
procedures require technical financial and board approval for 
all projects all major expenditures require senior management 
approval at the appropriate stages of each transaction overall 
control is ensured by a regular detailed reporting system 
covering both technical progress of projects and the state of the 
group’s financial affairs the board has put in place procedures 
for identifying evaluating and managing any significant risks 
that face the group risk assessment and evaluation is an 
integral part of the annual planning cycle each business unit 
documents its strategic objectives and the significant risks in 
achieving them and regularly reports on progress against these 
objectives key risks are also reported monthly to the board 
there is a comprehensive budgeting and planning system for  
all items of expenditure with an annual budget approved by the 
board actual results are reported against budget on a monthly 
basis revised financial forecasts for the year and financial 
projections for future years are regularly prepared  
the board has ultimate responsibility for the effectiveness of  
the group’s risk management activities and internal control 
processes 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 the board’s objective  
is to ensure tullow has appropriate systems in place for the 
identification and management of risks 
the board receives reports from business unit and corporate 
teams throughout the year to enable them to assess on an 
ongoing basis the effectiveness of the system of internal 
controls and risk management  
during the year the group internal audit manager reviewed  
a number of areas of risk and his findings were reported to the 
audit committee no significant weaknesses were identified 
the board has confirmed that through its audit committee  
it has reviewed the effectiveness of the system of internal 
financial operational and compliance controls and risk 
management and considers that the system of internal  
controls operated effectively throughout the financial  
year and up to the date on which the financial statements  
were signed  corporate governance continued
90 tullow oil plc 2009 annual report and accounts 
going concern 
the group closely monitors and manages its liquidity risk  
cash forecasts are regularly produced and sensitivities run  
for different scenarios including but not limited to changes in 
commodity prices different production rates from the group’s 
portfolio of producing fields and delays in development projects 
the group normally seeks to ensure that it has a minimum 
ongoing capacity of us500 million £320 million for a period  
of at least 12 months to safeguard the group’s ability to continue  
as a going concern  
following the placing announced in january 2010 the planned 
portfolio activity and with the us225 billion £144 billion 
financing already secured in 2009 the group’s forecasts and 
projections show that there is significant capacity and financial 
flexibility for the 12 months from the date of the 2009 annual 
report and accounts  
after taking account of the above the directors consider that 
the group has adequate resources to continue in operational 
existence for the foreseeable future accordingly they continue 
to adopt the going concern basis in preparing the 2009 annual 
report and accounts  
further information which is relevant to the application of the 
going concern assumption is provided in notes 17 and 18 to the 
financial statements and the sections related to funding within 
the business review 
pat plunkett 
chairman 
9 march 2010 
directors’ report corporate governance directors’ report corporate governance
directors’ remuneration report 
year ended 31 december 2009 
wwwtullowoilcom 91
dear shareholder  
tullow’s executive directors continue to deliver outstanding 
returns to shareholders with the company now an established 
member of the ftse 100 – the share price having increased by 
over 90 in 2009 and total shareholder return growth over 
750 higher than that of the ftse 100 over the last five years 
in this context the remuneration committee is very mindful of  
the need to ensure that the executive directors are appropriately 
remunerated and incentivised as a result and following  
the committee’s most recent review of tullow’s executive 
remuneration policy against market and best practice it has 
been decided that certain changes be made to the executive 
directors’ remuneration packages these changes are 
summarised below and described more fully later in  
this report 
base salary 
notwithstanding another year of exceptional performance base 
salaries have been increased by only 2 reflecting the general rate  
of salary increase applied across the group 
pension 
pension provision will be increased so that all executive 
directors will receive a defined contribution pension provision  
at a rate of 25 of salary from 15 or 10 below aged 50  
annual bonus 
the maximum annual bonus opportunity of the executive 
directors will be increased to 200 of salary from 150 of 
salary which reflects median practice there will also be a 
corresponding increase in target bonus opportunity from 60  
of salary to 80 of salary which will remain below median the 
underlying structure of the annual bonus will remain unchanged 
from last year in that i 25 of the bonus opportunity will be 
based on tullow’s relative tsr performance against the bespoke  
oil  gas comparator group used for performance share plan 
awards ii 25 will be based upon absolute tsr growth targets  
iii 50 will be based upon corporate kpis relating to  
health  safety operational  financial and projectspecific 
targets and iv any bonus in excess of 75 of salary will 
continue to be deferred into shares for three years under  
the company’s deferred share bonus plan 
longterm incentives 
the main other element of the executive directors’ packages –  
longterm incentive provision – will remain unchanged and  
will be provided via regular annual awards of shares worth up  
to 200 of salary under the company’s performance share  
plan which will vest three years after grant subject to continued 
employment and the company’s relative tsr performance 
against i a bespoke group of international oil  gas companies  
as to 50 and ii the ftse 100 as to the remaining 50  
in addition the company’s share ownership guidelines which 
require executive directors to build up and hold a shareholding 
worth at least 200 of salary will be retained 
the committee is conscious of the fact that these changes 
increase the value of the executive directors’ remuneration 
packages however in this regard the committee considers  
this approach entirely appropriate and that notwithstanding 
these increases the remuneration packages of this highly 
regarded management team remain below median of 
comparable benchmarks 
the committee also believes that the executive remuneration 
policy does not encourage inappropriate risktaking which  
may be to the longterm detriment of shareholders with the 
executive directors’ interests very closely aligned with the long
term interests of investors through i the significant compulsory 
share deferral feature in the annual bonus plan ii the regular 
annual grant of awards of share incentives iii the application of 
share ownership guidelines and iv the use of total shareholder 
return targets in both shortand longterm incentives albeit  
in both cases underpinned by a remuneration committee 
discretion to reduce payouts if other factors make it  
appropriate to do so  
finally i would like to draw your attention to the resolution  
that is to be tabled at the forthcoming agm relating to the 
establishment of a new 2010 share option plan this new  
plan will effectively replace the company’s existing option 
scheme which will shortly expire as before it is not intended  
that executive directors nor any other participants in the 
performance share plan will receive awards under this  
new plan 
should any shareholder wish to contact me in connection  
with the group’s senior executive remuneration policy  
please email me at remunerationchairtullowoilcom  
yours sincerely  
clare spottiswoode
chairman of the remuneration committee 
9 march 2010 
directors’ report corporate governance directors’ remuneration report continued
92 tullow oil plc 2009 annual report and accounts 
introduction 
this directors’ remuneration report has been prepared in 
accordance with the requirements of the companies act 2006 
and schedule 8 of the large and medium sized companies and 
groups accounts  reports regulations 2008 which set out 
requirements for the disclosure of directors’ remuneration and 
also in accordance with the requirements of the listing rules of 
the financial services authority 
the relevant legislation requires the auditors to report to the 
company’s members on the ‘auditable part’ of the directors’ 
remuneration report and to state whether in their opinion  
the part of the report that has been subject to audit has been 
properly prepared in accordance with the relevant legislation 
this report is therefore divided into separate sections to  
disclose the audited and unaudited information 
unaudited information 
remuneration committee remuneration committee 
clare spottiswoode clare spottiswoode chairman chairman
david bamford david bamford 
ann grant ann grant 
steven mctiernan steven mctiernan 
pat plunkett pat plunkett 
david williams david williams 
main responsibilities main responsibilities 
• determining and agreeing with the board the remuneration 
policy for the chief executive officer chairman executive 
directors and senior executives 
• approving the design of and determining targets for 
an annual performancerelated pay scheme for the 
executive directors and senior executives 
• reviewing the design of share incentive plans for approval 
by the board and shareholders and determining the annual 
award policy to executive directors and senior executives 
under existing plans 
• within the terms of the agreed policy determining the 
remainder of the remuneration packages principally 
comprising salary and pension for each executive  
director and senior executive and  
• reviewing and noting the remuneration trends across  
the group 
the committee met four times during the year the full  
terms of reference for the committee are available on  
the group’s website 
committee’s advisers 
the committee invites individuals to attend meetings to provide 
advice so as to ensure that the committee’s decisions are 
informed and take account of pay and conditions in the group  
as a whole these individuals include gordon headley chief hr 
officer no director takes part in any decision directly affecting 
his own remuneration the company chairman pat plunkett 
also absents himself during discussion relating to his own fees 
the committee has appointed hewitt new bridge street hnbs  
as its independent remuneration advisers they also provide 
technical advice to the group in connection with the operation  
of its share incentive arrangements a statement outlining the 
business relationship with hnbs can be viewed on the investor 
relations section of the group’s website the committee also 
consults with the company’s major investors and investor 
representative groups as appropriate 
directors’ report corporate governance directors’ report corporate governance
wwwtullowoilcom 93
remuneration policy 
the group’s policy is to maintain levels of remuneration so as  
to attract motivate and retain executive directors and senior 
executives of the highest calibre who can contribute their 
experience to the group’s operations the elements of the 
remuneration package for executive directors and senior 
management are base salary annual bonus taxable benefits 
pension payments and participation in the group’s share 
incentive arrangements a significant element of the potential 
remuneration package is therefore performancelinked 
when determining the total remuneration of the executive  
directors and senior management the committee predominately 
takes into account the remuneration practices adopted by uk  
listed companies of a similar market capitalisation and overseas 
complexity to tullow practice within other relevant oil  gas 
companies is also considered  
the key elements of the remuneration package for the  
executive directors are set out below  
executive directors’ remuneration 
base salary 
base salaries are reviewed annually with effect from 1 january and 
are set primarily by reference to external benchmarking data for 
other uk listed companies of similar market capitalisation and 
overseas complexity with as stated above practice in the oil  
 gas sector also taken into account 
following the most recent review the base salary of each 
executive director with effect from january 2010 is 
director 2010 salary
approx  
increase 
since 2009
aidan heavey £679450 2
graham martin £384250 2
angus mccoss £384250 2
paul mcdade £384250 2
ian springett £408000 2
in setting these salaries the committee has kept percentage 
increases in line with those across the rest of the group and has 
reflected the group’s policy that there is a significant weighting 
attached to the performancerelated elements of pay 
consequently the salaries of the executive directors  
are currently positioned below median  
annual bonus 
each executive director is entitled to participate in the  
executive annual bonus scheme in respect of each  
financial year of the company 
2009 annual bonus scheme 
the key features of the annual bonus scheme for the  
executive directors for 2009 were as follows 
• the maximum annual bonus potential for the executive 
directors was 150 of salary 
• for meeting target performance a bonus of 60 of  
salary was payable 40 of the maximum 
• any bonus earned in excess of 75 of salary will be paid  
in shares and deferred for three years under the deferred 
share bonus plan dsbp and 
• all the executive directors were subject to the same 
performance targets as follows  
– 25 was based on tullow’s tsr performance relative to the 
same oil  gas group as is used to measure performance 
for the psp awards made in 2009 see page 94 – no bonus is 
paid unless median performance is delivered with the full 
bonus for upper quartile performance 
– 25 was based on growth in absolute tsr with a full 
bonus payable if tullow’s tsr grows by 15 over the 
year and 
– 50 was based on certain corporate key performance 
indicators kpis comprising health  safety  
operational  financial and projectspecific targets 
the committee also has broad discretion before finalising  
any award level on the above parameters to take into account  
other factors and circumstances reflecting the general  
financial condition and the performance of the group as  
it considers appropriate  
the committee’s assessment of performance under  
each of the bonus elements for 2009 was as follows 
• relative tsr 100 of maximum achievement 
• absolute tsr 100 of maximum achievement and 
• corporate kpis 72 of maximum achievement  
in assessing the performance of the corporate kpis the  
health  safety element was reduced to reflect a fatality that 
occurred to one of our contractors in our bangladesh operation 
during 2009  
based upon the above achievements the bonus awards for all the 
executive directors in 2009 are 129 of salary reflecting another 
year of excellent performance as set out above the bonus in  
excess of 75 of salary ie 54 of salary will be paid in shares  
and deferred for three years under the dsbp since the end of the 
financial year the terms of past dsbp awards have been amended 
to allow recipients to delay receiving the shares for up to seven 
years after vesting the method of achieving this and the potential 
tax benefits of doing this are explained below in relation to the 
company’s performance share plan future awards will be 
structured in a similar manner  
2010 annual bonus scheme 
for 2010 maximum annual bonus opportunity for the executive 
directors will be increased to 200 of salary for meeting target 
performance a bonus of 80 of salary will be payable 40 of 
the maximum any bonus earned in excess of 75 of salary will 
continue to be paid in shares and deferred for three years under 
the dsbp with the ability to defer receipt of the shares beyond 
vesting as mentioned above the same approach to targets will 
apply as were employed in 2009 
• 25 will be based on relative tsr compared to the same  
oil  gas comparator group as is used for the psp award  
to be made in 2010 see page 94 
• 25 will be based on growth in absolute tsr with the same 
growth range as for 2009 and 
• 50 will be based on corporate kpis comprising health  
safety operational  financial and projectspecific targets   directors’ remuneration report continued
94 tullow oil plc 2009 annual report and accounts 
notwithstanding this increase in bonus opportunity the 
remuneration packages of the executive directors remain  
below median the increased target bonus of 80 is below 
median with the new maximum bonus of 200 of salary  
around median levels 
pension and other benefits 
from january 2010 each executive director is entitled to receive  
a payment of 25 of his base salary into the company’s group 
personal pension plan or his private pension arrangements 
previously 15 10 below age 50 these increased pension 
contributions are around median levels  
each executive director is entitled to 30 days’ annual leave 
permanent health insurance private medical insurance  
and life assurance benefits the group also reimburses the 
executive directors in respect of all expenses reasonably 
incurred by them in the proper performance of their duties 
share incentive arrangements 
performance share plan psp 
under the psp senior executives are eligible for conditional 
awards of rights over whole shares worth up to 200 of salary  
each year 300 in exceptional circumstances such as to 
facilitate the recruitment of a new executive director currently  
it is the policy to grant the executive directors 200 of salary 
each year although the committee may vary the allocation 
taking into account the circumstances which prevail at the  
time but always subject to the plan maximum 
psp awards vest subject to a tsrbased performance condition 
under which the company’s tsr performance is measured  
over a fixed threeyear period commencing on 1 january in  
the financial year in which the award is granted with no 
opportunity to retest  
for the awards made in 2008 and 2009 half are subject to 
performance against the constituents of the ftse 100 index  
at the start of the performance period of which tullow is a 
constituent and the other half are subject to performance 
against the following comparator group of international oil  
 gas companies  
addax petroleum niko resources 
anadarko noble energy inc 
apache corporation pioneer natural resources 
cairn energy premier oil 
dana petroleum santos 
forest oil corporation soco international 
lundin petroleum ab talisman energy inc 
nexen inc venture production 
in line with best practice a ‘common currency’ approach  
is adopted for calculating tsr 
for each portion of the award vesting is as follows 
company’s ranking  
in comparator group vesting percentage 
below median 0 
median 30 
upper quintile top 20 100 
intermediate performance pro rata between 30 and 100 
in addition no award will vest unless the committee considers 
that both the group’s underlying financial performance and its 
performance against other key factors eg health  safety  
over the relevant period is satisfactory 
the committee continues to believe that this approach remains 
appropriate it encourages the executive directors to generate 
returns to shareholders in excess of both the market generally and 
a group of sector peers and is a robust reflection of management’s 
success in achieving the strategic targets required to ensure the 
group’s continued growth therefore the performance condition 
applying to the forthcoming 2010 awards will remain unchanged 
save that the following oil  gas comparator group will be used 
anadarko marathon oil corporation 
apache corporation nexen inc 
bg group niko resources 
cairn energy noble energy inc 
canadian natural resources pioneer national resources 
dana petroleum premier oil  
eog resources santos  
forest oil corporation talisman energy inc 
hess corporation woodside petroleum 
lundin petroleum 
the performance condition applying to outstanding psp awards 
made in 2007 are shown in the notes to the table on page 99  
as permitted by the psp rules future awards will be granted  
as nil exercise price share options since the end of the financial 
year the psp rules have also been altered so that the exercise 
period from the end of the three year vesting period will be up to 
seven years rather than six months this revised basis for psp 
awards will provide participants with greater flexibility to decide 
the tax year in which their awards are taxed very similar to the 
2000 executive share option scheme and the proposed new 
share option plan referred to below those who choose to defer 
exercising their awards will generally retain an interest in a 
greater number of shares than if the awards had vested earlier  
and shares had been sold to pay the tax due the terms of 
existing unvested psp awards vesting after 6 april 2010  
have also been amended to provide similar flexibility  
share ownership guidelines 
from 2008 to further align their interests with shareholders  
the executive directors are required to retain at least 50 of  
the shares that vest under the psp and dsbp after selling 
sufficient shares to pay tax liabilities until they have built up  
a shareholding worth at least 200 of base salary with existing 
holdings taken into account 
share option scheme 
before the introduction of the psp in 2005 executive directors 
were eligible for grants of options under the 2000 executive 
share option scheme the ‘2000 scheme’ during 2009 options 
were granted to substantially all employees of the group under 
the 2000 scheme other than the executive directors and other 
senior executives who were granted psp awards  
the 2000 scheme will shortly expire therefore as set out in the 
notice of the forthcoming agm shareholder approval is being 
sought for a new 2010 share option plan its main features will 
remain largely unchanged from the 2000 scheme for example 
it is intended that executive directors and other psp 
participants will not be granted options under the new plan 
directors’ report corporate governance directors’ report corporate governance
wwwtullowoilcom 95
allemployee share incentive plans 
executive directors may also participate on the same terms as 
other employees in the tullow oil uk and irish share incentive 
plans these allemployee plans enable employees to save out 
of salary up to prescribed limits each month each quarter’s 
contributions are used by the plan trustees to acquire tullow  
oil shares partnership shares the group makes a matching 
contribution to acquire a matching number of shares matching 
shares on a oneforone basis 
sourcing of shares and dilution 
awards under all the group share schemes may be satisfied 
using either newly issued shares or shares purchased in the 
market and held in the tullow oil employee trust awards under 
the group’s discretionary schemes which may be satisfied by 
new issue shares must not exceed 5 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 of the company’s issued share capital in any 
rolling 10year period  
as at 31 december 2009 the headroom under the company’s  
5 and 10 limits was 60 million and 462 million shares 
respectively out of an issued share capital of 8043 million shares  
as at 31 december 2009 the tullow oil employee trust  
held 094 million shares 
nonexecutive directors’ fees 
a committee of the board comprising the chairman and 
executive directors sets the remuneration of nonexecutive 
directors the fees paid are set at a level to attract individuals 
with the necessary experience and ability to make a significant 
contribution to the group’s activities while also reflecting the 
time commitment and responsibility of the role each non
executive director currently receives an annual fee of £57000 
steven mctiernan receives an additional annual fee of £12000  
to reflect his responsibilities as senior independent director and 
clare spottiswoode and david williams each receive an additional 
annual fee of £12000 to reflect their responsibilities as chairman 
of the remuneration and audit committees respectively each 
nonexecutive director is also entitled to reimbursement of 
necessary travel and other expenses 
nonexecutive directors do not participate in any share scheme 
or annual bonus scheme and are not eligible to join the group’s 
pension schemes 
the remuneration committee with the chairman absenting 
himself from discussions sets the remuneration of the 
chairman whose annual fee is currently £200000  
performance graph 
the graph below shows tullow’s tsr against both the ftse  
100 index and ftse 250 index over the fiveyear period from  
1 january 2005 to 31 december 2009 over this period tullow 
outperformed the indices by 766 and 746 respectively the 
indices are set to 100 at the beginning of the period they have 
both been shown because the ftse 250 is the comparator index 
for awards made under the psp in march 2007 before tullow 
moved to the ftse 100 in september 2007 
0
100
200
300
400
500
600
700
800
900
1000
31 dec 09 31 dec 08 31 dec 07 31 dec 06 31 dec 05 31 dec 04
tullow oil plc     ftse 250 index     ftse 100 index
sourcethomson reuters
this graph shows the value by the end of 2009 of £100 invested 
in tullow oil on 31 december 2004 compared with the value of 
£100 invested in the ftse 100 and ftse 250 indices the other 
points plotted are the values at intervening financial year ends 
service agreements and letters of appointment 
each executive director has entered into a service agreement  
with tullow group services limited dated 2 september 2002 in  
the case of aidan heavey and graham martin dated 29 march  
2006 in the case of paul mcdade dated 18 april 2006 in the case  
of angus mccoss and dated 1 september 2008 in the case  
of ian springett aidan heavey has also entered into a  
service agreement with tullow oil international limited  
on 16 september 2002 on similar terms  
the term of each service contract is not fixed although each 
executive director is required to retire from service on attaining  
age 65 each agreement is terminable by the director on six 
months’ notice and by the relevant employing company on 12 
months’ notice there are no specific provisions under which  
any executive director is entitled to receive compensation upon 
the early termination of his service agreement other than in 
accordance with these notice periods 
each service agreement sets out restrictions on the ability of  
the director to participate in businesses competing with those  
of the group or to entice or solicit away from the group any 
senior employees in the six months after ceasing employment 
the above reflects the committee’s policy that service contracts 
should be structured to reflect the interests of the group and the 
individuals concerned while also taking due account of market 
and best practice it is also the committee’s policy that on any 
early termination of a director’s service contract the committee 
will take account of the departing director’s duty to mitigate  
his loss when determining the amount of any compensation  directors’ remuneration report continued
96 tullow oil plc 2009 annual report and accounts  
nonexecutive director terms of appointment 
nonexecutive director 
year 
appointed 
director 
number of 
complete 
years on the 
board 
date of 
current 
engagement 
letter
expiry of 
current term
pat plunkett 1998 11 081209 311210
steven mctiernan 2002 8 010308 280211
clare spottiswoode 2002 8 010308 280211
david bamford 2004 5 290607 300610
david williams 2006 3 081209 310512
ann grant 2008 1 140508 140511
in each case the appointment is renewable thereafter if agreed by the director and the board the appointments for each of  
the nonexecutive directors may be terminated by either party on three months’ notice there are no arrangements under  
which any nonexecutive director is entitled to receive compensation upon the early termination of his or her appointment 
material contracts 
there have been no other contracts or arrangements during the financial year in which a director of the company was materially 
interested andor which were significant in relation to the group’s business 
external appointments 
the board has not introduced a formal policy in relation to the number of external directorships that an executive director may hold 
currently the only executive directors who hold external directorships are aidan heavey and angus mccoss aidan is a director of 
traidlinks a charity promoting enterprise in the developed world especially africa he receives no fee for this position angus has 
been nominated by tullow as its representative on the board of ikon science limited a company in which tullow has a small equity 
stake any fees payable for his services have been waived by tullow  
directors’ report corporate governance directors’ report corporate governance
wwwtullowoilcom 97
audited information 
directors’ remuneration 
the remuneration of the directors for the year ended 31 december 2009 payable by group companies was as follows 
bonuses 
salary
fees
£
cash
£
shares
1
£ 
pensions 
£ 
taxable  
benefits
2
£  
2009
total
£
2008
total
£
executive directors 
aidan heavey  666104 499578 359696 99915 34562  1659855 1634435
graham martin  376700 282525 203418 56505 3925  923073 908371
angus mccoss 376700 282525 203418 37670 2352  902665 889901
paul mcdade 376700 282525 203418 37670 2987  903300 890591
ian springett
3
 400000300000216000 60000 2928 978928 301876
past directors 
tom hickey
4
 ––– – – – 752457
matthew o’donoghue
5
 ––– – – – 73500
subtotal  2196204 1647153 1185950 291760 46754  5367821 5451131
nonexecutive directors 
pat plunkett  180000 – – – –  180000 170000
david bamford  56000 – – – –  56000 53000
ann grant
6
 56000–– – – 56000 33363
steven mctiernan  67000 – – – –  67000 63000
clare spottiswoode 67000 – – – –  67000 63000
david williams 67000 – – – –  67000 63000
subtotal  493000 – – – –  493000 445363
total  2689204 1647153 1185950 291760 46754  5860821 5896494
1  these figures represent that part of the bonus required to be deferred into shares as explained on page 93 
2  the amounts disclosed under taxable benefits for aidan heavey include car benefits  
3  ian springett was appointed as chief financial officer on 1 september 2008  
4  tom hickey resigned from the board on 1 september 2008  
5  matthew o’donoghue who retired from the board on 31 march 2008 provided consultancy services for a 12month period from 1 april 2008 for which he received  
fees of £294000 in total £73500 being paid in respect of services provided for the period 1 january 2009 to 31 march 2009 
6  ann grant was appointed as a nonexecutive director on 15 may 2008  directors’ remuneration report continued
98 tullow oil plc 2009 annual report and accounts  
directors’ interests in the share capital of the company 
the interests of the directors all of which were beneficial who held office at 31 december 2009 are set out in the table below  
the table also shows the holdings at the date of this report and reflect changes since 31 december 2009 as summarised in the  
note following the table 
director 
ordinary 
shares 
090310 
ordinary
shares
311209
ordinary
shares
010109
aidan heavey 6265666 6240500 6000000
graham martin  1450490 1435687 1352005
angus mccoss  59053 59053 –
paul mcdade  207458 203181 243600
ian springett 12000 12000 12000
pat plunkett  761326 761326 1011326
david bamford  13445  13445 13445
ann grant 2371 2371 –
steven mctiernan  – – –
clare spottiswoode  – – –
david williams  5000 5000 5000
the awards of shares granted under the deferred share bonus plan on 18 january 2007 as detailed in the table on page 100 vested in aidan heavey graham martin and 
paul mcdade on 4 january 2010 all three directors sold sufficient shares to meet tax obligations retaining 25166 14803 and 4277 shares respectively as a result  
the interests of messrs heavey martin and mcdade have increased since the year end other than as set out above and in the notes to the tables below there have  
been no changes in the interests of any director between 1 january 2010 and the date of this report 
tullow oil uk share incentive plan uk sip 
details of shares purchased and awarded to executive directors in accordance with the terms of the uk sip a brief description 
of the uk sip is set out on page 95 
director 
shares 
held
010109
partnership 
shares 
acquired in 
year
matching 
shares 
awarded in 
year  
total 
shares 
held 
311209
sip shares 
that have 
become 
unrestricted 
in the year
graham martin 6386 196 196 6778 2348
angus mccoss 1416 196 196 1808 –
paul mcdade 6386 196 196 6778 2348
ian springett 0 143 143 286 –
1  graham martin angus mccoss paul mcdade and ian springett each acquired 33 partnership shares and were awarded 33 matching shares on 5 january 2010 
2  unrestricted shares are those that have been held until there is no longer a tax liability if they are withdrawn from the plan 
directors’ report corporate governance directors’ report corporate governance
wwwtullowoilcom 99
performance share plan 2005 psp 
details of conditional awards over ordinary shares granted to executive directors for nil consideration under the psp 
director 
award 
grant date 
as at 
010109
granted  
in year 
vested  
in year 
as at 
311209 
vesting 
date
aidan heavey  300306 219512 – 219512 – 300309
 220307230567– – 230567 220310
 150508141939– – 141939 150511
 180309–173916 – 173916 180312
592018 173916 219512 546422
graham martin 300306 129125 – 129125 – 300309
 220307130402– – 130402 220310
 15050880277– – 80277 150511
 180309–98355 – 98355 180312
339804 98355 129125 309034
angus mccoss  270406 100230 – 100230 – 270409
 22030790539– – 90539 220310
 15050880277– – 80277 150511
 180309–98355 – 98355 180312
271046 98355 100230 269171
paul mcdade 300306 118364 – 118364 – 300309
 22030790539– – 90539 220310
 15050880277– – 80277 150511
 180309–98355 – 98355 180312
289180 98355 118364 269171
ian springett 010908 68873 – – 68873 010911
 180309–104438 – 104438 180312
68873 104438 – 173311
1 the awards of conditional shares made on 18 march 2009 equated to shares worth 200 of salary for each executive director based on the average of the  
share prices for the five dealing days preceding the date of grant the tullow share price on the date of grant of the awards made on 18 march 2009 was 778p  
2  under the psp 2007 awards 50 of each award is subject to a condition that compares tullow’s tsr to the constituents of the ftse 250 index excluding  
investment trusts the other 50 of the award is subject to a condition that compares tullow’s tsr to a comparator group of specific oil and gas companies  
for median performance 30 of the relevant part of the award will vest with full vesting for upper quartile performance details of the conditions applying  
to the awards made in 2008 and 2009 are set out on page 94  
3  the psp awards made in march 2007 reached the end of their performance period on 31 december 2009 the remuneration committee determined that both parts  
of the relevant performance condition were met in full as the company was ranked in the upper quartile compared to both the relevant comparator groups and the 
underlying performance of the company was determined to be a fair reflection of the company’s tsr accordingly the executive directors will be eligible to receive 
their awards on 22 march 2010 the third anniversary of grant subject to continued employment  
4  on 30 march 2009 and 27 april 2009 being the dates on which awards made in march and april 2006 vested the market prices of a tullow share were 7715p and  
7830p respectively   directors’ remuneration report continued
100 tullow oil plc 2009 annual report and accounts  
deferred share bonus plan dsbp  
details of awards over ordinary shares granted to executive directors for nil consideration under the dsbp 
director  
award 
grant date
as at 
010109
granted 
in year
vested  
in year 
as at 
311209
vesting 
date
aidan heavey  30030620988 –20988 –010109
 18010742714–– 42714 040110
 13030828328–– 28328 010111
 180309–50169– 50169 010112
92030 50169 20988 121211
graham martin  30030612908 –12908 –020109
 18010725126–– 25126 040110
 13030816021–– 16021 010111
 180309–28374– 28374 010112
54055 28374 12908 69521
angus mccoss 130308 14686 – – 14686 010111
 180309–28374– 28374 010112
14686 28374 – 43060
paul mcdade  30030619806 –19806 –020109
 1801077260–– 7260 040110
 13030814686–– 14686 010111
 180309–28374– 28374 010112
41752 28374 19806 50320
1  the awards of shares made in 2009 equated to shares worth the amount of bonus deferred into shares for 2008 based on the share prices for the five dealing days 
preceding the date of grant the tullow share price on the date of grant of the awards made on 18 march 2009 was 778p  
2  further details of the dsbp are set out in the annual bonus section of this report on page 93 
2000 executive share option scheme esos 
details of share options granted to executive directors for nil consideration under the esos 
director  
grant  
date 
as at 
010109 
granted 
during 
year
exercised 
during 
year
as at 
311209 
exercise 
price 
date from 
which 
exercisable
last date 
exercisable
graham martin  101001 380000 – – 380000 80p 101004 091011
 061003 400000 – – 400000 85p 061006 051013
 200904 190000 – – 190000 131p 200907 190914
  970000 – – 970000 
1  the performance condition that is attached to options granted under the 2000 scheme on the above dates required tullow’s tsr to have exceeded that of the median 
company of the ftse 250 excluding investment trusts over threeyears from the date of grant this performance condition has been satisfied for all the options  
above which are therefore fully exercisable  
2  during 2009 the highest midmarket price of the company’s shares was 1305p and the lowest was 6005p the yearend price was 1305p 
directors’ report corporate governance directors’ report corporate governance
other statutory information 
wwwtullowoilcom 101
results and dividends 
the profit on ordinary activities after taxation of the group for 
the year ended 31 december 2009 amounted to £1 million
2008 £2262 million  
an interim dividend of stg20p 2008 stg20p per ordinary share 
was paid on 6 november 2009 the directors recommend a final 
dividend of stg40p 2008 stg40p per ordinary share which  
if approved at the 2010 agm will be paid on 21 may 2010 to 
shareholders whose names are on the register of members  
on 16 april 2010 
subsequent events  
in january 2010 the group announced the successful  
placing and subsequent issue of a total of 80431796 new 
ordinary shares with institutions at stg11500p per share this 
represented an increase of approximately 999 in tullow’s 
existing issued share capital these shares were credited  
as fully paid and rank pari passu in all respects with existing 
ordinary shares of 10p each in the capital of the company 
including the right to receive all dividends and other 
distributions declared made or paid on or in respect  
of such shares after the date of issue 
in january 2010 the group announced that it had exercised  
its preemption rights over heritage oil’s ugandan sale for up to 
us15 billion £10 billion in addition two new potential partners 
have been identified cnooc and total and it is expected that 
each partner will acquire a one third interest in each of the 
three ugandan blocks  
in january 2010 the group announced that the appraisal well 
tweneboa 2 proved up a combined oil and gascondensate 
column of at least 35 metres this has confirmed tweneboa  
as a major oil and gascondensate field 
share capital 
as at 9 march 2010 the company had an allotted and fully paid 
up share capital of 884749772 ordinary shares of stg10p each 
with an aggregate nominal value of £8847497720 
substantial shareholdings 
as at 9 march 2010 the company had been notified of the 
following significant holdings being 3 or more in the 
company’s ordinary share capital  
shareholder  
number 
of shares 
 of issued
 capital
blackrock inc  107963933 1220
prudential plc 72123865 815
ifg international trust  
company limited 38960366 440
legal  general group plc 32230429 364
shareholders’ rights 
the rights and obligations attaching to the shares are  
as follows 
• dividend rights – holders of the company’s ordinary shares 
may by ordinary resolution declare dividends but may not 
declare dividends in excess of the amount recommended by 
the directors the directors may also pay interim dividends 
no dividend may be paid other than out of profits available  
for distribution subject to shareholder approval payment  
or satisfaction of a dividend may be made wholly or partly  
by distribution of specific assets  
• voting rights – voting at any general meeting is by a show  
of hands unless a poll is duly demanded on a show of hands 
every shareholder who is present in person at a general 
meeting and every proxy appointed by a shareholder and 
present at a general meeting has one vote regardless of the 
number of shares held by the shareholder or represented by  
the proxy on a poll every shareholder who is present in 
person or by proxy has one vote for every share held by  
that shareholder the deadline for exercising voting rights by 
proxy is set out in the form of proxy a poll may be demanded  
by any of the following a the chairman of the meeting b at 
least five shareholders entitled to vote and present in person 
or by proxy or represented by a duly authorised corporate 
representative at the meeting c any shareholder or 
shareholders present in person or by proxy or represented by  
a duly authorised corporate representative and representing 
in the aggregate not less than onetenth of the total voting 
rights of all shareholders entitled to attend and vote at the 
meeting or d any shareholder or shareholders present in 
person or by proxy or represented by a duly authorised 
corporate representative and holding shares conferring  
a right to attend and vote at the meeting on which there  
have been paid up sums in the aggregate equal to not less 
than onetenth of the total sum paid up on all the shares 
conferring that right  
• return of capital – in the event of the liquidation of the 
company after payment of all liabilities and deductions taking 
priority the balance of assets available for distribution will be 
distributed among the holders of ordinary shares according to 
the amounts paid up on the shares held by them a liquidator 
may with the sanction of a special resolution of the 
shareholders and any other sanction required by the 
applicable legislation a divide among the shareholders  
the whole or any part of the company’s assets or b vest the 
company’s assets in whole or in part in trustees upon such 
trusts for the benefit of shareholders but no shareholder is 
compelled to accept any assets upon which there is a liability 
control rights under employee share schemes 
the company operates a number of employee share schemes 
under some of these arrangements shares are held by trustees on 
behalf of employees the employees are not entitled to exercise 
directly any voting or other control rights the trustees will 
generally vote in accordance with employees instructions and 
abstain where no instructions are received unallocated shares 
are generally voted at the discretion of the trustees 
restrictions on holding securities 
there are no restrictions under the company’s articles of 
association or under uk law that either restrict the rights of  
uk resident shareholders to hold shares or limit the right of 
nonresident or foreign shareholders to hold or vote the 
company’s ordinary shares 
there are no uk foreign exchange control restrictions on  
the payment of dividends to us persons on the company’s 
ordinary shares 
85
directors’ report corporate governance other statutory information continued
102 tullow oil plc 2009 annual report and accounts 
material agreements containing ‘change of control’ provisions  
the following significant agreements will in the event of a 
‘change of control’ of the company be affected as follows  
• us1785 billion senior secured revolving credit facility 
agreement between among others the company and certain 
subsidiaries of the company bnp paribas bank of scotland 
plc the royal bank of scotland plc standard chartered 
bank lloyds tsb bank plc and calyon and the lenders 
specified therein pursuant to which each lender thereunder 
may demand repayment of all outstanding amounts owed by 
the company and certain subsidiaries of the company to it 
under the agreement and any connected finance document 
which amount will become immediately due and payable and 
in respect of each letter of credit issued under the agreement 
full cash cover will be required immediately in the event that 
any person or group of persons acting in concert gains 
control of the company  
• us100 million junior secured revolving credit facility 
agreement between among others the company and certain 
subsidiaries of the company bnp paribas bank of scotland 
plc the royal bank of scotland plc and lloyds tsb bank plc 
and the lenders specified therein pursuant to which each 
lender thereunder may demand repayment of all outstanding 
amounts owed by the company and certain subsidiaries of  
the company to it under the agreement and any connected 
finance document which amount will become immediately 
due and payable in the event that any person or group of 
persons acting in concert gains control of the company 
• us115 million finance contract in respect of a senior secured 
revolving credit facility agreement between among others 
the company and certain subsidiaries of the company and 
international finance corporation and the lenders specified 
therein pursuant to which each lender thereunder may 
demand repayment of all outstanding amounts owed by the 
company and certain subsidiaries of the company to it under 
the agreement and any connected finance document which 
amount will become immediately due and payable in the 
event that any person or group of persons acting in concert 
gains control of the company 
• us250 million secured revolving credit facility agreement 
between among others the company and certain subsidiaries  
of the company bnp paribas bank of scotland plc calyon 
standard chartered bank and the royal bank of scotland  
plc and the lenders specified therein pursuant to which each 
lender thereunder may demand repayment of all outstanding 
amounts owed by the company and certain subsidiaries of  
the company to it under the agreement and any connected 
finance document which amount will become immediately 
due and payable in the event that any person or group of 
persons acting in concert gains control of the company and 
• us155 billion secured irrevocable guarantee facility 
agreement between among others the company and  
certain subsidiaries of the company standard chartered 
bank calyon bnp paribas and the royal bank of scotland 
plc and the lenders specified therein pursuant to which  
each lender thereunder may demand that full cash cover is 
provided immediately in respect of outstanding amounts or 
the buyer guarantee provided thereunder is otherwise repaid 
immediately and repayment of all outstanding amounts owed 
by the company and certain subsidiaries of the company to  
it under the agreement and any connected finance document 
which amount will become immediately due and payable  
in the event that any person or group of persons acting  
in concert gains control of the company 
for the purposes of these provisions a ‘control’ has the 
meaning given to it under section 416 of the income and 
corporation taxes act 1988 and b ‘acting in concert’  
has the meaning given to it in the city code on takeovers  
and mergers 
contractual or other arrangements 
the group does not have any contractual or other arrangements 
that are essential to the business of the group as described by 
section 417 5c companies act 2006 
directors 
the biographical details of the directors of the company  
at the date of this report are given on pages 80 and 81  
details of directors’ service agreements and letters of 
appointment are set out on pages 95 and 96 details of the 
directors’ interests in the ordinary shares of the company  
and in the group’s longterm incentive and share option 
schemes are set out on pages 99 and 100 in the directors’ 
remuneration report 
directors’ indemnities and insurance cover 
as at the date of this report indemnities are in force under 
which the company has agreed to indemnify the directors to 
the extent permitted by the companies act 2006 against claims 
from third parties in respect of certain liabilities arising out  
of or in connection with the execution of their powers duties 
and responsibilities as directors of the company or any of its 
subsidiaries the directors are also indemnified against the cost 
of defending a criminal prosecution or a claim by the company 
its subsidiaries or a regulator provided that where the defence  
is unsuccessful the director must repay those defence costs 
the company also maintains directors’ and officers’ liability 
insurance cover the level of which is reviewed annually  
powers of directors 
the general powers of the company’s directors are set out  
in article 97 of the articles of association of the company it 
provides that the business of the company shall be managed  
by the board which may exercise all the powers of the company 
whether relating to the management of the business of the 
company or not this power is subject to any limitations 
imposed on the company by applicable legislation it is also 
limited by the provisions of the memorandum and articles  
of association of the company and any directions given by 
special resolution of the shareholders of the company which  
are applicable on the date that any power is exercised 
please note the following specific provisions relevant to  
the exercise of power by the directors  
• preemptive rights and new issues of shares – the holders  
of ordinary shares have no preemptive rights under the articles 
of association of the company however the ability of the 
directors to cause the company to issue shares securities 
convertible into shares or rights to shares otherwise than 
pursuant to an employee share scheme is restricted under 
the companies act 2006 which provides that the directors  
of a company are with certain exceptions unable to allot any 
equity securities without express authorisation which may be 
contained in a company’s articles of association or given by its 
shareholders in general meeting but which in either event 
directors’ report corporate governance directors’ report corporate governance
wwwtullowoilcom 103
cannot last for more than five years under the companies  
act 2006 the company may also not allot shares for cash 
otherwise than pursuant to an employee share scheme  
without first making an offer on a preemptive basis to existing 
shareholders unless this requirement is waived by a special 
resolution of the shareholders the company received 
authority at the last annual general meeting to allot shares  
for cash on a non preemptive basis up to a maximum 
nominal amount of £4004047 the authority lasts until  
the earlier of the annual general meeting of the company  
in 2010 or 30 june 2010 
• repurchase of shares – subject to authorisation by 
shareholder resolution the company may purchase its  
own shares in accordance with the companies act 2006  
any shares which have been bought back may be held as 
treasury shares or must be cancelled immediately upon 
completion of the purchase the company does not currently 
have shareholder authority to buy back shares and  
• borrowing powers – the net external borrowings of the group 
outstanding at any time shall not exceed an amount equal to 
four times the aggregate of the group’s adjusted capital and 
reserves calculated in the manner prescribed in article 98  
of the company’s articles of association unless sanctioned  
by an ordinary resolution of the company’s shareholders 
appointment and replacement of directors 
the company shall appoint disregarding alternate directors 
not less than two nor more than 15 directors the appointment 
and replacement of directors may be made as follows 
• the members may by ordinary resolution appoint any  
person who is willing to act to be a director 
• the board may appoint any person who is willing to act to be a 
director any director so appointed shall hold office only until 
the next annual general meeting and shall then be eligible  
for election 
• each director shall retire from office at the third annual 
general meeting after the annual general meeting at  
which he was last elected but he may be reappointed  
by ordinary resolution if eligible and willing  
• the company may by special resolution remove any director 
before the expiration of his period of office or may by ordinary 
resolution remove a director where special notice has been 
given and the necessary statutory procedures are complied 
with and  
• there are a number of other grounds on which a director’s 
office may cease namely voluntary resignation where all the 
other directors being at least three in number request his 
resignation where he suffers mental incapacity compounds 
with his creditors is declared bankrupt or is prohibited by  
law from being a director 
charitable and political donations 
the group made charitable social and communityrelated 
donations during the year totalling £14 million 2008 £10 million 
in line with group policy no donations were made for  
political purposes 
corporate responsibility 
the group is fully committed to high standards of 
environmental health and safety management a review 
together with an outline of the group’s involvement in the 
community is set out in the corporate responsibility section  
on pages 68 to 75 in addition tullow publishes annually a 
separate corporate responsibility report which is available  
on the group website wwwtullowoilcom 
supplier payment policy 
it is company and group policy to settle all debts with creditors 
on a timely basis and in accordance with the terms of credit 
agreed with each supplier the company had no trade creditors 
outstanding at 31 december 2009 
auditors and disclosure of relevant audit information 
having made the requisite enquires so far as the directors  
are aware there is no relevant audit information as defined  
by section 4183 of the companies act 2006 of which the 
company’s auditors are unaware and each director has taken 
all steps that ought to have been taken to make themselves 
aware of any relevant audit information and to establish that  
the company’s auditors are aware of that information 
a resolution to reappoint deloitte llp as the company’s 
auditors will be proposed at the agm 
annual general meeting 
your attention is drawn to the notice of meeting enclosed  
with this annual report which sets out the resolutions to be 
proposed at the forthcoming agm the meeting will be held  
at haberdashers’ hall 18 west smithfield london ec1a 9hq  
on wednesday 12 may 2010 at 12 noon 
this directors’ report comprising pages 4 to 103 and the 
information referred to therein has been approved by the  
board and signed on its behalf by  
graham martin  
general counsel and company secretary 
9 march 2010 
registered office 
3rd floor  
building 11 
chiswick park 
566 chiswick high road 
london w4 5ys 
company registered in england and wales  
no 3919249  michelle wilsoncroft assistant accountant
london office uk financial statements and
supplementary information
the financial statements prepared in accordance with
international financial reporting standards give a true
and fair view of the assets liabilities financial position and
profit or loss of the company and the undertakings included
in the consolidation taken as a whole
statement of directors’ responsibilities 106
independent auditors’ report 107
group financial statements 108
accounting policies 111
notes to group financial statements 117
company financial statements
and related information 143
five year financial summary 155
commercial reserves and
contingent resources 156
licence interests 157
shareholder information 161
contact information 162
9 financial statements 
statement of directors’ responsibilities 
106 tullow oil plc 2009 annual report and accounts  
the directors are responsible for preparing the annual report 
directors’ remuneration report and the financial statements  
in accordance with applicable law and regulations 
group 
company law requires the directors to prepare financial 
statements for each financial year the directors are required  
by the ias regulation to prepare the group financial statements 
under international financial reporting standards ifrss as 
adopted by the european union the group financial statements 
are also required by law to be properly prepared in accordance 
with the companies act 2006 and article 4 of the ias regulation  
international accounting standard 1 requires that ifrs financial 
statements present fairly for each financial year the group’s 
financial position financial performance and cash flows  
this requires the faithful representation of the effects of 
transactions other events and conditions in accordance with  
the definitions and recognition criteria for assets liabilities  
income and expenses set out in the international accounting 
standards board’s ‘framework for the preparation and 
presentation of financial statements’ in virtually all 
circumstances a fair presentation will be achieved by 
compliance with all applicable ifrss however directors  
are also required to 
• properly select and apply accounting policies 
• present information including accounting policies in  
a manner that provides relevant reliable comparable  
and understandable information and  
• provide additional disclosures when compliance with the 
specific requirements in ifrss are insufficient to enable users  
to understand the impact of particular transactions other 
events and conditions on the entity’s financial position and 
financial performance 
company 
the directors have elected to prepare the parent company 
financial statements in accordance with united kingdom 
generally accepted accounting practice united kingdom 
accounting standards and applicable law the parent company 
financial statements are required by law to give a true and fair 
view of the state of affairs of the company in preparing these 
financial statements the directors are required to 
• select suitable accounting policies and then apply  
them consistently 
• make judgements and estimates that are reasonable  
and prudent 
• state whether applicable uk accounting standards have been 
followed subject to any material departures disclosed and 
explained in the financial statements and 
• prepare the financial statements on the going concern basis 
unless it is inappropriate to presume that the company will 
continue in business 
the directors are responsible for keeping proper accounting 
records that disclose with reasonable accuracy at any time the 
financial position of the company and enable them to ensure 
that the parent company financial statements comply with the 
companies act 2006 they are also responsible for safeguarding 
the assets of the company and hence for taking reasonable 
steps for the prevention and detection of fraud and  
other irregularities 
the directors are responsible for the maintenance and integrity  
of the corporate and financial information included on the 
company’s website legislation in the united kingdom 
governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions 
directors’ responsibility statement required by dtr 4112r 
we confirm that to the best of our knowledge 
• the financial statements prepared in accordance with 
international financial reporting standards give a true and 
fair view of the assets liabilities financial position and profit 
or loss of the company and the undertakings included in the 
consolidation taken as a whole and 
• the management report which is incorporated into the 
directors’ report includes a fair review of the development 
and performance of the business and the position of the 
company and the undertakings included in the consolidation 
taken as a whole together with a description of the principal 
risks and uncertainties that they face  
by order of the board  
aidan heavey ian springett
chief executive officer chief financial officer 
9 march 2010 9 march 2010  financial statements
independent auditors’ report 
to the members of tullow oil plc 
wwwtullowoilcom 107
we have audited the group financial statements of tullow oil plc  
for the year ended 31 december 2009 which comprise the group 
income statement the group statement of comprehensive 
income and expense the group balance sheet the group cash flow 
statement and the related notes 1 to 33 the financial reporting 
framework that has been applied in their preparation is applicable 
law and international financial reporting standards ifrss  
as adopted by the european union 
this report is made solely to the company’s members as a 
body in accordance with chapter 3 of part 16 of the companies 
act 2006 our audit work has been undertaken so that we might 
state to the company’s members those matters we are required 
to state to them in an auditors’ report and for no other purpose 
to the fullest extent permitted by law we do not accept or 
assume responsibility to anyone other than the company and 
the company’s members as a body for our audit work for  
this report or for the opinions we have formed 
respective responsibilities of directors and auditors 
as explained more fully in the directors’ responsibilities 
statement the directors are responsible for the preparation of 
the group financial statements and for being satisfied that they 
give a true and fair view our responsibility is to audit the group 
financial statements in accordance with applicable law and 
international standards on auditing uk and ireland those 
standards require us to comply with the auditing practices 
board’s apb’s ethical standards for auditors 
scope of the audit of the financial statements 
an audit involves obtaining evidence about the amounts  
and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free 
from material misstatement whether caused by fraud or error 
this includes an assessment of whether the accounting policies 
are appropriate to the group’s circumstances and have  
been consistently applied and adequately disclosed the 
reasonableness of significant accounting estimates made  
by the directors and the overall presentation of the  
financial statements 
opinion on financial statements 
in our opinion the group financial statements 
• give a true and fair view of the state of the group’s affairs as 
at 31 december 2009 and of its profit for the year then ended 
• have been properly prepared in accordance with ifrss  
as adopted by the european union and 
• have been prepared in accordance with the requirements of 
the companies act 2006 and article 4 of the ias regulation 
separate opinion in relation to ifrss as issued by the iasb 
as explained in the accounting policies to the group financial 
statements the group in addition to complying with its legal 
obligation to apply ifrss as adopted by the european union  
has also applied ifrss as issued by the international  
accounting standards board iasb  
in our opinion the group financial statements comply with  
ifrss as issued by the iasb 
opinion on other matter prescribed by the companies act 2006 
in our opinion the information given in the directors’ report  
for the financial year for which the financial statements are 
prepared is consistent with the group financial statements 
matters on which we are required to report by exception 
we have nothing to report in respect of the following matters 
where the companies act 2006 requires us to report to you if  
in our opinion 
• certain disclosures of directors’ remuneration specified  
by law are not made or 
• we have not received all the information and explanations  
we require for our audit 
under the listing rules we are required to review 
• the directors’ statement contained within the directors’ 
report in relation to going concern and 
• the part of the corporate governance statement relating to 
the company’s compliance with the nine provisions of the 
june 2008 combined code specified for our review 
other matters 
we have reported separately on the parent company financial 
statements of tullow oil plc for the year ended 31 december 
2009 and on the information in the directors’ remuneration 
report that is described as having been audited  
matthew donaldson senior statutory auditor 
for and on behalf of deloitte llp 
chartered accountants and statutory auditors  
london uk 
9 march 2010  financial statements 
group income statements 
108 tullow oil plc 2009 annual report and accounts  
group income statement 
year ended 31 december 2009 
notes 
2009
£m
2008
£m
sales revenue  2 5823 6917
cost of sales  3981 3661
gross profit  1842 3256
administrative expenses  495 430
profit on disposal of subsidiaries 26 101 2132
profit on disposal of oil and gas assets 26 31 306
exploration costs written off 9 528 2267
operating profit  3 951 2997
lossgain on hedging instruments 18 372 429
finance revenue 2 13 39
finance costs  5 389 472
profit from continuing activities before tax  203 2993
income tax expense  6 18 731
profit for the year from continuing activities  185 2262
attributable to 
owners of the parent 151 2232
minority interest 24 34 30
185 2262
earnings per ordinary share  8 stg p stg p
basic 187 3086
diluted  185 3049
group statement of comprehensive income and expense 
year ended 31 december 2009 
notes 
2009
£m
2008
£m
profit for the year 185 2262
cash flow hedges 
lossesgains arising in the year 18  256 885
reclassification adjustments for lossesgains  
included in profit on realisation 18  153 748
409 1633
exchange differences on translation of foreign operations   1281 2223
other comprehensive income 1690 3856
tax relating to components of other comprehensive income   82 23
other comprehensive income for the year 1608 3833
total comprehensive income for the year 1423 6095
attributable to 
owners of the parent 1434 5997
minority interest 11 98
1423 6095 financial statements
group balance sheet 
as at 31 december 2009 
wwwtullowoilcom 109
notes 
2009
£m
2008
£m
assets  
noncurrent assets  
intangible exploration and evaluation assets 9 13332 14178
property plant and equipment  10 13802 9864
investments  11 07 04
deferred tax assets 20 316 –
derivative financial instruments 18 – 293
27457 24339
current assets  
inventories  13 688 378
trade receivables  12 580 693
other current assets  14 1858 602
cash and cash equivalents  15 1583 3110
derivative financial instruments 18 14 200
4723 4983
total assets  32180 29322
liabilities  
current liabilities  
trade and other payables  16 3500 3302
other financial liabilities 17 – 2105
current tax liabilities  463 1053
3963 6460
noncurrent liabilities  
trade and other payables 16 200 61
other financial liabilities  17 8254 4890
deferred tax liabilities 20 2976 3479
provisions  20 1403 1340
derivative financial instruments 18 125 –
12958 9770
total liabilities  16921 16230
net assets 15259 13092
equity 
called up share capital  22 804 733
share premium 22 1678 1607
other reserves  23 4276 5822
retained earnings  21 8237 4677
equity attributable to equity holders of the parent  14995 12839
minority interest 24 264 253
total equity  21 15259 13092
approved by the board and authorised for issue on 9 march 2010 
aidan heavey ian springett
chief executive officer chief financial officer  financial statements 
group cash flow statement 
year ended 31 december 2009 
110 tullow oil plc 2009 annual report and accounts  
notes 
2009
£m
2008
£m
cash flows from operating activities  
cash generated from operations  25 2938 5877
income taxes paid  1188 769
net cash from operating activities   1750 5108
cash flows from investing activities  
disposal of subsidiaries 26 32 2077
disposal of oil and gas assets 78 775
purchase of intangible exploration and evaluation assets  4259 3235
purchase of property plant and equipment   3315 1368
finance revenue  08 34
net cash used in investing activities   7456 1717
cash flows from financing activities  
net proceeds from issue of share capital   3971 81
debt arrangement fees  642 53
repayment of bank loans 2403 3726
drawdown of bank loan 4482 3129
finance costs 314 404
dividends paid  7 481 432
purchase of treasury shares 35 112
net cash generated by used in financing activities   4578 1517
net decreaseincrease in cash and cash equivalents  1128 1874
cash and cash equivalents at beginning of year  3110 822
translation difference  399 414
cash and cash equivalents at end of year 15 1583 3110 financial statements
accounting policies 
year ended 31 december 2009 
wwwtullowoilcom 111
a general information  
tullow oil plc is a company incorporated in great britain under 
the companies act 2006 the address of the registered office  
is given on page 162 the nature of the group’s operations and 
its principal activities are set out in the operations and finance 
reviews on pages 32 to 61 
b adoption of new and revised standards  
in the current year the following new and revised standards  
and interpretations have been adopted and have affected the 
amounts reported in these financial statements 
standards affecting presentation and disclosure 
ias 1 revised 2007 presentation of financial statements 
ias 12007 has introduced a number of changes in the format 
and content of the financial statements  
improving disclosures about financial instruments 
amendments to ifrs 7 financial instruments disclosures 
the amendments to ifrs 7 expand the disclosures required in 
respect of fair value measurements and liquidity risk the group 
has elected not to provide comparative information for these 
expanded disclosures in the current year in accordance with  
the transitional reliefs offered in these amendments 
ifrs 8 operating segments 
ifrs 8 is a disclosure standard that requires analyses of the 
group’s reportable segments based on management reporting 
to the chief operating decision maker see note 1 this has not 
resulted in any amendments to the reporting of the group’s 
operating segments 
standards not affecting the reported results nor  
the financial position 
the following new and revised standards and interpretations 
have been adopted in the current year their adoption has not 
had any significant impact on the amounts reported in these 
financial statements but may impact the accounting for future 
transactions and arrangements 
amendment to ias 20 accounting for government grants and 
disclosure of government assistance 
ias 20 has been amended to require that the benefit of a 
government loan at a belowmarket rate of interest to be 
treated as a government grant this accounting treatment  
was not permitted prior to this amendment 
ias 23 revised 2007 borrowing costs 
the principal change to the standard was to eliminate the option 
to expense all borrowing costs when incurred this change has 
had no impact on these financial statements because it has 
always been the group’s accounting policy to capitalise 
borrowing costs incurred on qualifying assets 
amendments to ias 32 financial instruments presentation and 
ias 1 presentation of financial statements – puttable financial 
instruments and obligations arising on liquidation 
the revisions to ias 32 amend the criteria for debtequity 
classification by permitting certain puttable financial 
instruments and instruments or components of instruments  
that impose on an entity an obligation to deliver to another  
party a prorata share of the net assets of the entity only on 
liquidation to be classified as equity subject to specified  
criteria being met 
amendment to ias 38 intangible assets 
ias 38 has been amended to state that an entity is permitted  
to recognise a prepayment asset for advertising or promotional 
expenditure only up to the point at which the entity has the right 
to access the goods purchased or up to the point of receipt  
of services 
amendments to ias 39 financial instruments  
recognition and measurement – eligible hedged items 
the amendments provide clarification on two aspects of hedge 
accounting identifying inflation as a hedged risk or portion  
and hedging with options 
amendment to ias 40 investment property 
ias 40 has been amended to include within its scope investment 
property in the course of construction 
amendment to ifrs 2 sharebased payment – vesting 
conditions and cancellations 
the amendments clarify the definition of vesting conditions  
for the purposes of ifrs 2 introduce the concept of ‘non
vesting’ conditions and clarify the accounting treatment  
for cancellations 
embedded derivatives amendments to ifric 9 reassessment 
of embedded derivatives and ias 39 financial instruments 
recognition and measurement
the amendments clarify the accounting for embedded 
derivatives in the case of a reclassification of a financial asset 
out of the ‘fair value through profit or loss’ fvtpl category as 
permitted by the october 2008 amendments to ias 39 financial 
instruments recognition and measurement 
ifric 15 agreements for the construction of real estate 
the interpretation addresses how entities should determine 
whether an agreement for the construction of real estate is 
within the scope of ias 11 construction contracts or ias 18 
revenue and when revenue from the construction of real  
estate should be recognised 
ifric 16 hedges of a net investment in a foreign operation 
the interpretation provides guidance on the detailed 
requirements for net investment hedging for certain  
hedge accounting designations 
ifric 18 transfers of assets from customers adopted  
for transfers of assets from customers received on or after  
1 july 2009 
the interpretation addresses the accounting by recipients  
for transfers of property plant and equipment from ‘customers’ 
and concludes what item of property plant and equipment 
transferred meets the definition of an asset from the 
perspective of the recipient the recipient should recognise  
the asset at its fair value on the date of transfer with the  
credit recognised in accordance with ias 18 revenue 
 financial statements 
accounting policies continued
112 tullow oil plc 2009 annual report and accounts  
b adoption of new and revised standards continued
at the date of authorisation of these financial statements  
the following standards and interpretations which have not  
been applied in these financial statements were in issue but  
not yet effective and in some cases had not yet been adopted  
by the eu  
ifrs 1 ias 27 cost of and investment in a subsidiary 
jointly controlled entity or associate 
amended 
ifrs 3 business combinations revised 2008 
ias 27 consolidated and separate financial 
statements revised 2008 
ias 28 investments in associates revised 2008 
ifric 17 distributions of noncash assets to 
owners    
improvements to ifrss april 2009 
the directors do not expect that the adoption of these standards 
and interpretations in future periods will have a material impact 
on the financial statements of the group except for treatment of 
acquisition of subsidiaries and associates when ifrs 3 revised 
2008 ias 27 revised 2008 and ias 28 revised 2008 come into 
effect for business combinations for which the acquisition date 
is on or after the beginning of the first annual period beginning 
on or after 1 july 2009 
c basis of accounting  
the financial statements have been prepared in accordance with 
international financial reporting standards ifrss as issued by 
the iasb and adopted by the european union and therefore the 
group financial statements comply with article 4 of the  
eu ias regulation  
the financial statements have been prepared on the historical 
cost basis except for derivative financial instruments that have 
been measured at fair value the principal accounting policies 
adopted by the group are set out below 
the financial statements have been prepared on a going 
concern basis see directors’ report page 90 for further details 
d basis of consolidation 
the consolidated financial statements incorporate the financial 
statements of the company and entities controlled by the 
company its subsidiaries made up to 31 december each year 
control is achieved where the company has the power to govern 
the financial and operating policies of an investee entity so as  
to obtain benefits from its activities 
minority interests in the net assets of consolidated subsidiaries are 
identified separately from the group’s equity therein minority 
interests consist of the amount of those interests at the date of 
the original business combination see below and the minority’s 
share of changes in equity since the date of the combination 
losses applicable to the minority in excess of the minority’s 
interest in the subsidiary’s equity are allocated against the 
interests of the group except to the extent that the minority  
has a binding obligation and is able to make an additional 
investment to cover the losses 
the results of subsidiaries acquired or disposed of during  
the year are included in the group income statement from  
the effective date of acquisition or up to the effective date  
of disposal as appropriate 
where necessary adjustments are made to the financial 
statements of subsidiaries to bring the accounting policies  
used into line with those used by the group 
all intragroup transactions balances income and expenses 
are eliminated on consolidation 
business combinations 
the acquisition of subsidiaries is accounted for using the 
purchase method the cost of the acquisition is measured at the 
aggregate of the fair values at the date of exchange of assets 
given liabilities incurred or assumed and equity instruments 
issued by the group in exchange for control of the acquiree plus 
any costs directly attributable to the business combination the 
acquiree’s identifiable assets liabilities and contingent liabilities 
that meet the conditions for recognition under ifrs 3 are 
recognised at their fair value at the acquisition date except for 
noncurrent assets or disposal groups that are classified as 
held for sale in accordance with ifrs 5 noncurrent assets held 
for sale and discontinued operations which are recognised and 
measured at fair value less costs to sell goodwill arising on 
acquisition is recognised as an asset and initially measured at 
cost being the excess of the cost of the business combination 
over the group’s interest in the net fair value of the identifiable 
assets liabilities and contingent liabilities recognised if after 
reassessment the group’s interest in the net fair value of the 
acquiree’s identifiable assets liabilities and contingent liabilities 
exceeds the cost of the business combination the excess is 
recognised immediately in profit or loss 
joint ventures 
the group is engaged in oil and gas exploration development 
and production through unincorporated joint ventures the 
group accounts for its share of the results and net assets  
of these joint ventures as jointly controlled assets in addition 
where tullow acts as operator to the joint venture the gross 
liabilities and receivables including amounts due to or from 
nonoperating partners of the joint venture are included in  
the group balance sheet 
e noncurrent assets held for sale  
noncurrent assets or disposal groups classified as held  
for sale are measured at the lower of carrying amount and fair 
value less costs to sell noncurrent assets and disposal groups 
are classified as held for sale if their carrying amount will be 
recovered through a sale transaction rather than through 
continuing use this condition is regarded as met only when  
the sale is highly probable and the asset or disposal group  
is available for immediate sale in its present condition 
management must be committed to the sale which should  
be expected to qualify for recognition as a completed sale  
within one year from the date of classification   financial statements
wwwtullowoilcom 113
f revenue 
sales revenue represents the sales value net of vat and 
overriding royalties of the group’s share of liftings in the year 
together with tariff income revenue is recognised when goods 
are delivered and title has passed 
revenues received under takeorpay sales contracts in respect 
of undelivered volumes are accounted for as deferred income 
interest income is accrued on a time basis by reference  
to the principal outstanding and at the effective interest rate 
applicable which is the rate that exactly discounts estimated 
future cash receipts through the expected life of the financial 
asset to that asset’s net carrying amount 
g overunderlift 
lifting or offtake arrangements for oil and gas produced in 
certain of the group’s jointly owned operations are such that 
each participant may not receive and sell its precise share  
of the overall production in each period the resulting imbalance 
between cumulative entitlement and cumulative production less 
stock is ‘underlift’ or ‘overlift’ underlift and overlift are valued 
at market value and included within debtors and creditors 
respectively movements during an accounting period are 
adjusted through cost of sales such that gross profit is 
recognised on an entitlements basis the group’s share of any 
physical stock warehouse stock and materials are accounted  
for at the lower of cost and net realisable value  
h inventory  
inventories are stated at the lower of cost and net realisable 
value cost is determined by the firstin firstout method  
and comprises direct purchase costs cost of production 
transportation and manufacturing expenses net realisable 
value is determined by reference to prices existing at the 
balance sheet date 
i foreign currencies 
the pound sterling is the presentation currency of the  
group for the purpose of presenting consolidated financial 
statements the assets and liabilities of the group’s foreign 
operations are translated at exchange rates prevailing on the 
balance sheet date income and expense items are translated  
at the average exchange rates for the period unless exchange 
rates fluctuate significantly during that period in which case the 
exchange rates at the date of transactions are used currency 
translation adjustments arising on the restatement of opening 
net assets of foreign subsidiaries together with differences 
between the subsidiaries’ results translated at average rates 
versus closing rates are taken directly to reserves all resulting 
exchange differences are classified as equity until disposal of 
the subsidiary on disposal the cumulative amounts of the 
exchange differences are recognised as income or expense 
transactions in foreign currencies are recorded at the rates of 
exchange ruling at the transaction dates monetary assets and 
liabilities are translated into sterling at the exchange rate ruling 
at the balance sheet date with a corresponding charge or credit 
to the income statement however exchange gains and losses 
arising on monetary items receivable from or payable to a 
foreign operation for which settlement is neither planned  
nor likely to occur which form part of the net investment  
in a foreign operation are recognised in the foreign currency 
translation reserve and recognised in profit or loss on disposal 
of the net investment in addition exchange gains and losses 
arising on longterm foreign currency borrowings which are  
a hedge against the group’s overseas investments are dealt 
with in reserves 
j exploration evaluation and production assets 
the group adopts the successful efforts method of accounting  
for exploration and appraisal costs all licence acquisition 
exploration and evaluation costs are initially capitalised in  
cost centres by well field or exploration area as appropriate 
directly attributable administration costs and interest payable 
are capitalised insofar as they relate to specific development 
activities prelicence costs are expensed in the period in  
which they are incurred 
these costs are then written off as exploration costs in  
the income statement unless commercial reserves have  
been established or the determination process has not  
been completed and there are no indications of impairment 
all field development costs are capitalised as property plant 
and equipment property plant and equipment related to 
production activities are amortised in accordance with the 
group’s depletion and amortisation accounting policy 
k commercial reserves 
commercial reserves are proven and probable oil and gas 
reserves which are defined as the estimated quantities of  
crude oil natural gas and natural gas liquids which geological 
geophysical and engineering data demonstrate with a specified 
degree of certainty to be recoverable in future years from known 
reservoirs and which are considered commercially producible 
there should be a 50 per cent statistical probability that the 
actual quantity of recoverable reserves will be more than the 
amount estimated as a proven and probable reserves and  
a 50 per cent statistical probability that it will be less 
l depletion and amortisation – discovery fields  
all expenditure carried within each field is amortised from  
the commencement of production on a unit of production  
basis which is the ratio of oil and gas production in the period  
to the estimated quantities of commercial reserves at the end  
of the period plus the production in the period generally on  
a fieldbyfield basis costs used in the unit of production 
calculation comprise the net book value of capitalised costs plus 
the estimated future field development costs changes in the 
estimates of commercial reserves or future field development 
costs are dealt with prospectively  financial statements 
accounting policies continued
114 tullow oil plc 2009 annual report and accounts  
l depletion and amortisation – discovery fields continued
where there has been a change in economic conditions  
that indicates a possible impairment in a discovery field  
the recoverability of the net book value relating to that field is 
assessed by comparison with the estimated discounted future 
cash flows based on management’s expectations of future oil 
and gas prices and future costs where there is evidence of 
economic interdependency between fields such as common 
infrastructure the fields are grouped as a single cash 
generating unit for impairment purposes 
any impairment identified is charged to the income statement  
as additional depletion and amortisation where conditions 
giving rise to impairment subsequently reverse the effect  
of the impairment charge is also reversed as a credit to the 
income statement net of any depreciation that would have  
been charged since the impairment 
m decommissioning 
provision for decommissioning is recognised in full when  
the related facilities are installed a corresponding amount 
equivalent to the provision is also recognised as part of the  
cost of the related property plant and equipment the  
amount recognised is the estimated cost of decommissioning 
discounted to its net present value and is reassessed each  
year in accordance with local conditions and requirements 
changes in the estimated timing of decommissioning or 
decommissioning cost estimates are dealt with prospectively by 
recording an adjustment to the provision and a corresponding 
adjustment to property plant and equipment the unwinding  
of the discount on the decommissioning provision is included  
as a finance cost 
n property plant and equipment 
property plant and equipment is stated in the balance sheet  
at cost less accumulated depreciation and any recognised 
impairment loss depreciation on property plant and equipment 
other than production assets is provided at rates calculated  
to write off the cost less estimated residual value of each asset 
on a straightline basis over its expected useful economic life  
of between three and five years 
o finance costs and debt 
borrowing costs directly attributable to the acquisition 
construction or production of qualifying assets which are assets 
that necessarily take a substantial period of time to get ready for 
their intended use or sale are added to the cost of those assets 
until such time as the assets are substantially ready for their 
intended use or sale  
finance costs of debt are allocated to periods over the term  
of the related debt at a constant rate on the carrying amount 
arrangement fees and issue costs are deducted from the debt 
proceeds on initial recognition of the liability and are amortised 
and charged to the income statement as finance costs over the 
term of the debt 
p share issue expenses and share premium account 
costs of share issues are written off against the premium 
arising on the issues of share capital 
q taxation 
current and deferred tax including uk corporation tax and 
overseas corporation tax are provided at amounts expected  
to be paid using the tax rates and laws that have been enacted 
or substantially enacted by the balance sheet date deferred 
corporation tax is recognised on all temporary differences  
that have originated but not reversed at the balance sheet date 
where transactions or events that result in an obligation to pay 
more or right to pay less tax in the future have occurred at the 
balance sheet date deferred tax assets are recognised only to the 
extent that it is considered more likely than not that there will 
be suitable taxable profits from which the underlying temporary 
differences can be deducted deferred tax is measured on a 
nondiscounted basis 
deferred tax is provided on temporary differences arising on 
acquisitions that are categorised as business combinations 
deferred tax is recognised at acquisition as part of the 
assessment of the fair value of assets and liabilities acquired  
any deferred tax is charged or credited in the income statement  
as the underlying temporary difference is reversed  
petroleum revenue tax prt is treated as an income tax  
and deferred prt is accounted for under the temporary 
difference method current uk prt is charged as a tax  
expense on chargeable field profits included in the income 
statement and is deductible for uk corporation tax 
r pensions 
contributions to the group’s defined contribution pension 
schemes are charged to operating profit on an accruals basis  
s derivative financial instruments  
the group uses derivative financial instruments to manage  
its exposure to fluctuations in foreign exchange rates  
interest rates and movements in oil and gas prices 
derivative financial instruments are stated at fair value 
the purpose for which a derivative is used is established  
at inception to qualify for hedge accounting the derivative  
must be ‘highly effective’ in achieving its objective and this 
effectiveness must be documented at inception and throughout  
the period of the hedge relationship the hedge must be 
assessed on an ongoing basis and determined to have been 
‘highly effective’ throughout the financial reporting periods  
for which the hedge was designated 
for the purpose of hedge accounting hedges are classified  
as either fair value hedges when they hedge the exposure  
to changes in the fair value of a recognised asset or liability  
or cash flow hedges where they hedge exposure to variability  
in cash flows that is either attributable to a particular  
risk associated with a recognised asset or liability or  
forecasted transaction 
in relation to fair value hedges which meet the conditions  
for hedge accounting any gain or loss from remeasuring  
the derivative and the hedged item at fair value is recognised 
immediately in the income statement any gain or loss on the 
hedged item attributable to the hedged risk is adjusted against 
the carrying amount of the hedged item and recognised in the 
income statement  financial statements
wwwtullowoilcom 115
for cash flow hedges the portion of the gains and losses on  
the hedging instrument that is determined to be an effective 
hedge is taken to equity and the ineffective portion as well  
as any change in time value is recognised in the income 
statement the gains and losses taken to equity are 
subsequently transferred to the income statement during  
the period in which the hedged transaction affects the income 
statement or if the hedge is subsequently deemed to be 
ineffective a similar treatment applies to foreign currency  
loans which are hedges of the group’s net investment in  
the net assets of a foreign operation 
gains or losses on derivatives that do not qualify for hedge 
accounting treatment either from inception or during the life of 
the instrument are taken directly to the income statement in 
the period 
t leases 
leases are classified as finance leases whenever the terms  
of the lease transfer substantially all the risks and rewards  
of ownership to the lessee all other leases are classified as 
operating leases and are charged to the income statement  
on a straightline basis over the term of the lease 
assets held under finance leases are recognised as assets of  
the group at their fair value or if lower at the present value of the 
minimum lease payments each determined at the inception of the 
lease the corresponding liability to the lessor is included in the 
balance sheet as a finance lease obligation lease payments are 
apportioned between finance charges and reduction of the lease 
obligation so as to achieve a constant rate of interest on the 
remaining balance of the liability finance charges are charged 
directly against income unless they are directly attributable to 
qualifying assets in which case they are capitalised in accordance 
with the group’s policy on borrowing costs 
u sharebased payments 
the group has applied the requirements of ifrs 2 sharebased 
payments in accordance with the transitional provisions of  
that standard only those awards that were granted after  
7 november 2002 and had not vested at 1 january 2005  
are included 
all sharebased awards of the company are equity settled  
as defined by ifrs 2 the fair value of these awards has been 
determined at the date of grant of the award allowing for the 
effect of any marketbased performance conditions this fair 
value adjusted by the group’s estimate of the number of awards 
that will eventually vest as a result of nonmarket conditions  
is expensed uniformly over the vesting period 
the fair values were calculated using a binomial option  
pricing model with suitable modifications to allow for employee 
turnover after vesting and early exercise where necessary this 
model was supplemented with a monte carlo model the inputs 
to the models include the share price at date of grant exercise 
price expected volatility expected dividends risk free rate of 
interest and patterns of exercise of the plan participants 
v financial assets 
all financial assets are recognised and derecognised on a trade 
date where the purchase or sale of a financial asset is under a 
contract whose terms require delivery of the investment within 
the timeframe established by the market concerned and are 
initially measured at fair value plus transaction costs 
financial assets are classified into the following specified 
categories financial assets ‘at fair value through profit  
or loss’ fvtpl ‘heldtomaturity’ investments  
‘availableforsale’ afs financial assets and ‘loans and 
receivables’ the classification depends on the nature and 
purpose of the financial assets and is determined at the  
time of initial recognition 
w cash and cash equivalents 
cash and cash equivalents comprise cash on hand and demand 
deposits and other shortterm highly liquid investments that 
are readily convertible to a known amount of cash and are 
subject to an insignificant risk of changes in value 
x loans and receivables 
trade receivables loans and other receivables that have  
fixed or determinable payments that are not quoted in an active 
market are classified as loans and receivables loans and 
receivables are measured at amortised cost using the effective 
interest method less any impairment interest income is 
recognised by applying the effective interest rate except for 
shortterm receivables when the recognition of interest would 
be immaterial 
y effective interest method 
the effective interest method is a method of calculating the 
amortised cost of a financial asset and of allocating interest 
income over the relevant period the effective interest rate  
is the rate that exactly discounts estimated future cash receipts 
including all fees on points paid or received that form an 
integral part of the effective interest rate transaction costs and 
other premiums or discounts through the expected life of the 
financial asset or where appropriate a shorter period 
income is recognised on an effective interest basis for debt 
instruments other than those financial assets classified as at 
fvtpl the group chooses not to disclose the effective interest 
rate for debt instruments that are classified as at fair value 
through profit or loss 
z financial liabilities and equity 
financial liabilities and equity instruments are classified 
according to the substance of the contractual arrangements 
entered into 
aa equity instruments 
an equity instrument is any contract that evidences a  
residual interest in the assets of the group after deducting  
all of its liabilities equity instruments issued by the group are 
recorded at the proceeds received net of direct issue costs  financial statements 
accounting policies continued
116 tullow oil plc 2009 annual report and accounts  
ab other financial liabilities 
other financial liabilities including borrowings are initially 
measured at fair value net of transaction costs other financial 
liabilities are subsequently measured at amortised cost using 
the effective interest method with interest expense recognised 
on an effective yield basis the effective interest method is a 
method of calculating the amortised cost of a financial liability 
and of allocating interest expense over the relevant period  
the effective interest rate is the rate that exactly discounts 
estimated future cash payments through the expected life of  
the financial liability or where appropriate a shorter period 
ac critical accounting judgements and key sources of 
estimation uncertainty 
details of the group’s significant accounting judgements and 
critical accounting estimates are set out in these financial 
statements and include 
• carrying value of intangible exploration and evaluation fixed 
assets note 9 
the recoverability of intangible exploration assets is assessed by 
comparing the carrying value to internal and operator estimates 
of the net present value of projects intangible exploration 
assets are inherently judgemental to value and further details 
on the accounting policy is included in accounting note j 
• carrying value of property plant and equipment note 10 
management perform impairment tests on the group’s property 
plant and equipment assets at least annually with reference to 
indicators in ias 36 key assumptions in the impairment models 
relate to prices that are based on forward curves for two years  
and the longterm corporate assumptions thereafter and 
discount rates that are risked to reflect conditions specific  
to individual assets 
• commercial reserves estimates note 10 
proven and probable reserves are estimated using standard 
recognised evaluation techniques the estimate is reviewed at 
least twice annually and is regularly reviewed by independent 
consultants future development costs are estimated taking  
into account the level of development required to produce the 
reserves by reference to operators where applicable and 
internal engineers  
• presumption of going concern 
refer to directors report page 90 
• derivative financial instruments note 17 
the groups derivative financial instruments are marked  
to market  
• decommissioning costs note 20 and 
the cost of decommissioning are reviewed twice annually and is 
estimated by reference to operators where applicable and 
internal engineers 
provision for environmental cleanup and remediation costs are 
based on current legal and constructive requirements 
technology and price levels 
• recoverability of deferred tax assets note 20  financial statements
financial statements 
notes to the group financial statements  
year ended 31 december 2009 
wwwtullowoilcom 117
note 1 segmental reporting 
the group has adopted ifrs 8 operating segments with effect from 1 january 2009 ifrs 8 requires operating segments to be 
identified on the basis of internal reports about components of the group that are regularly reviewed by the chief executive to
allocate resources to the segments and to assess their performance the adoption of ifrs 8 has not resulted in any changes in the 
disclosure of the group’s operating segments 
in the opinion of the directors the operations of the group comprise one class of business oil and gas exploration development and 
production and the sale of hydrocarbons and related activities the group also operates within four geographical markets europe 
africa south asia and south america 
the following tables present revenue profit and certain asset and liability information regarding the group’s business segments for 
the years ended 31 december 2009 and 2008 all sales are to external customers 
africa
£m
europe
£m
south 
asia 
£m 
south 
america 
£m 
unallocated
£m
total
£m
2009 
sales revenue by origin 4095 1588 140 – – 5823
segment result 1344 68 51 13 – 1314
profit on disposal of subsidiaries 101
profit on disposal of oil and gas assets 31
unallocated corporate expenses 495
operating profit 951
loss on hedging instruments 372
finance revenue 13
finance costs 389
profit before tax 203
income tax expense 18
profit after tax 185
total assets 26127 4106 490 1167 290 32180
total liabilities 6235 1670 114 309 8593 16921
other segment information 
capital expenditure 
 property plant and equipment 3165 304 33 – 59 3561
 intangible exploration and evaluation assets 4096 174 25 64 16 4375
depletion depreciation and amortisation 1371 809 52 – 54 2286
impairment losses recognised in income statement 81 – – – – 81
exploration costs written off 133 359 10 13 13 528
included in revenue arising from africa are revenues of approximately £1719 million 2008 £2612 million which arose from sales to 
the group’s two largest customers  financial statements 
notes to the group financial statements continued
118 tullow oil plc 2009 annual report and accounts  
note 1 segmental reporting continued
africa
£m
europe
£m
south
asia
£m
south 
america 
£m 
unallocated
£m
total
£m
2008 
sales revenue by origin 4757 2046 114 – – 6917
segment result 1374 506 318 405 – 1157
profit on disposal of subsidiaries  2132
profit on disposal of oil and gas assets  306
unallocated corporate expenses  598
operating profit  2997
gain on hedging instruments  429
finance revenue  39
finance costs  472
profit before tax  2993
income tax expense  731
profit after tax  2262
total assets 22297 4951 653 1006 415 29322
total liabilities 6513 2130 194 318 7075 16230
other segment information 
capital expenditure 
 property plant and equipment 1037 400 44 – 70 1551
 intangible exploration and evaluation assets 2937 344 116 121 – 3518
depletion depreciation and amortisation 110782057– 40 2024
impairment losses recognised in income 182 – 81 – – 263
exploration costs written off 1469 126 267 405 – 2267
unallocated expenditure and net liabilities include amounts of a corporate nature and not specifically attributable to a geographic 
area the liabilities comprise the group’s external debt and other non attributable corporate liabilities 
note 2 total revenue 
2009
£m
2008
£m
sales revenue 
 oil and gas revenue from the sale of goods 5603 8007
 profitloss on realisation of cash flow hedges 152 1192
5755 6815
tariff income 68 102
total operating revenue 5823 6917
finance revenue 13 39
total revenue 5836 6956 financial statements
wwwtullowoilcom 119
note 3 operating profit 
2009
£m
2008
£m
operating profit is stated after charging 
staff costs see note 4 below 232 188
depletion and amortisation 2232 1984
impairment of property plant and equipment 81 263
depreciation of other fixed assets 54 40
write down of inventory recognised as an expense – 24
exploration write off 528 2267
sharebased payment charge including provisions for ni 113 79
lossgain on hedging instruments 372 429
operating lease rentals 24 51
auditors’ remuneration see below 14 08
2009
£m
2008
£m
audit services  
fees payable to the company’s auditors for the audit of the company’s annual accounts 03 02
audit of the company’s subsidiaries pursuant to legislation 03 03
other services pursuant to legislation 02 01
08 06
tax services 
compliance services 01 –
advisory services – –
01 –
other nonaudit services 
services related to corporate finance transactions – 01
services relating to information technology 02 –
other services 
 corporate social responsibility services 01 01
 accounting advice and agreed upon procedures 02 –
05 02
total 14 08 financial statements 
notes to the group financial statements continued
120 tullow oil plc 2009 annual report and accounts  
note 4 staff costs 
the average monthly number of employees including executive directors employed by the group worldwide was  
2009
number
2008
number
administration 292 265
technical 268 206
total 560 471
staff costs in respect of those employees was as follows 
2009
£m
2008
£m
salaries 474 415
social security costs 66 23
pension costs 28 22
568 460
a proportion of the group’s staff costs shown above is recharged to the group’s joint venture partners and a proportion is capitalised 
into the cost of fixed assets under the group’s accounting policy for exploration evaluation and production assets the net staff costs 
recognised in the income statement was £232 million 2008 £188 million 
details of directors’ remuneration directors’ transactions and directors’ interests are set out in the part of the directors’ 
remuneration report described as having been audited which forms part of these financial statements  
note 5 finance costs 
2009
£m
2008
£m
interest on bank overdrafts and loans 283 366
interest on obligations under finance leases 02 02
total borrowing costs 285 368
less amounts included in the cost of qualifying assets 253 60
32 308
finance and arrangement fees  243 64
foreign exchange losses 20 –
unwinding of discount on decommissioning provision note 20 94 100
389 472
borrowing costs included in the cost of qualifying assets during the year arose on the general borrowing pool and are calculated by 
applying a capitalisation rate of 389 2008 536 to cumulative expenditure on such assets  financial statements
wwwtullowoilcom 121
note 6 taxation on profit on ordinary activities 
a analysis of charge in period 
the tax charge comprises 
2009
£m
2008
£m
current tax 
uk corporation tax 209 386
foreign taxation 491 770
total corporate tax 700 1156
uk petroleum revenue tax  28 14
total current tax 672 1170
deferred tax 
uk corporation tax 454 104
foreign taxation 201 374
total corporate tax 655 478
uk petroleum revenue tax 01 39
total deferred tax note 20 654 439
total tax expense 18 731 financial statements 
notes to the group financial statements continued
122 tullow oil plc 2009 annual report and accounts  
note 6 taxation on profit on ordinary activities continued
b factors affecting tax charge for period 
the tax rates applied to profit on ordinary activities in preparing the reconciliation below is the upstream uk corporation tax
applicable to the group’s oil and gas activities plus the rate of supplementary corporation tax sct  
the difference between the total current tax charge shown above and the amount calculated by applying the standard rate  
of uk corporation tax applicable to uk profits derived from upstream activities 30 plus the rate of sct in respect of uk  
upstream profits 20 to the profit before tax is as follows 
2009
£m
2008
£m
group profit on ordinary activities before tax  203 2993
tax on group profit on ordinary activities at a combined standard uk corporation  
tax and sct rate of 50 2008 50 101 1496
effects of 
expenses not deductible for tax purposes 76 09
utilisation of tax losses not previously recognised 107 18
net losses not recognised  384 1184
petroleum revenue tax prt 27 52
uk corporation tax deductions for current prt 13 26
adjustments relating to prior years 44 04
income taxed at a different rate 35 298
income not subject to corporation tax 413 1700
group total tax expense for the year 18 731
the group’s profit before taxation will continue to be subject to jurisdictions where the effective rate of taxation differs from that  
in the uk furthermore unsuccessful exploration expenditure is often incurred in jurisdictions where the group has no taxable 
profits such that no related tax benefit arises accordingly the group’s tax charge will continue to depend on the jurisdictions  
in which pretax profits and exploration costs written off arise  
the group has tax losses of £3633 million 2008 £1550 million that are available indefinitely for offset against future taxable profits 
in the companies in which the losses arose deferred tax assets have not been recognised in respect of these losses as they may not 
be used to offset taxable profits elsewhere in the group 
the group has recognised £244 million in deferred tax assets in relation to taxable losses 2008 £nil 
no deferred tax liability is recognised on temporary differences of £2770 million 2008 £2700 million relating to unremitted 
earnings of overseas subsidiaries as the group is able to control the timing of the reversal of these temporary differences and
it is probable that they will not reverse in the foreseeable future  
note 7 dividends 
2009
£m
2008
£m
declared and paid during year 
final dividend for 2008 stg4p 2007 stg4p per ordinary share 321 287
interim dividend for 2009 stg2p 2008 stg2p per ordinary share 160 145
dividends paid 481 432
proposed for approval by shareholders at the agm 
final dividend for 2009 stg4p 2008 stg4p per ordinary share 322 293
the proposed final dividend is subject to approval by shareholders at the annual general meeting and has not been included as a
liability in these financial statements  financial statements
wwwtullowoilcom 123
note 8 earnings per ordinary share 
basic earnings per ordinary share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders  
of the parent by the weighted average number of ordinary shares outstanding during the year 
diluted earnings per ordinary share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders 
of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number  
of ordinary shares that would be issued if employee and other share options were converted into ordinary shares 
2009
£m
2008
£m
earnings 
net profit attributable to equity shareholders 151 2232
effect of dilutive potential ordinary shares – –
diluted net profit attributable to equity shareholders 151 2232
2009 2008
number of shares 
basic weighted average number of shares 796431613 723355745
dilutive potential ordinary shares 9006048 8675224
diluted weighted average number of shares 805437661 732030969
note 9 intangible exploration and evaluation assets 
2009
£m
2008
£m
at 1 january  14178 9566
additions 4375 3518
disposals – 402
amounts written off  528 2267
transfer tofrom property plant and equipment note 10 3462 04
currency translation adjustments 1231 3759
at 31 december  13332 14178
the amounts for intangible exploration and evaluation assets represent active exploration projects these amounts will be written  
off to the income statement as exploration costs unless commercial reserves are established or the determination process is not
completed and there are no indications of impairment the outcome of ongoing exploration and therefore whether the carrying 
value of exploration and evaluation assets will ultimately be recovered is inherently uncertain 
additions include capitalised interest of £110 million 2008 £nil the group only capitalises interest in respect of intangible 
exploration and evaluation assets where it is considered that development is inevitable and advanced appraisal and development 
is ongoing 
in 2008 amounts written off included an impairment charge calculated in accordance with ias 36 – impairment of assets of  
£601 million determined by estimating its value in use the impairment resulted from lower reserves estimates following a  
change in the most likely development plans and lower assumed oil prices following the fall in oil prices in the second half of
2008 in calculating this impairment management used a range of assumptions including a longterm oil price of 80 per  
barrel and a 15 pretax discount rate   financial statements 
notes to the group financial statements continued
124 tullow oil plc 2009 annual report and accounts  
note 10 property plant and equipment 
oil and gas 
assets 
£m 
other fixed 
assets
£m
total
£m
cost 
at 1 january 2008 15221 144 15365
additions 1481 70 1551
disposals 337 03 340
transfer to intangible exploration and evaluation fixed assets note 9 04 – 04
currency translation adjustments 3193 19 3212
at 1 january 2009 19554 230 19784
additions 3502 59 3561
disposals 184 – 184
transfer from intangible exploration and evaluation fixed assets note 9 3462 – 3462
currency translation adjustments 1256 02 1254
at 31 december 2009 25078 291 25369
depreciation depletion and amortisation 
at 1 january 2008 6385 74 6459
charge for the year 1984 40 2024
impairment loss 263 – 263
disposals 259 01 260
currency translation adjustments 1423 11 1434
at 1 january 2009 9796 124 9920
charge for the year 2232 54 2286
impairment loss 81 – 81
disposals 137 – 137
currency translation adjustments  584 01 583
at 31 december 2009 11388 179 11567
net book value 
at 31 december 2009 13690 112 13802
at 31 december 2008 9758 106 9864
additions include capitalised interest of £143 million 2008 £60 million 
the carrying amount of the group’s oil and gas assets includes an amount of £85 million 2008 £98 million in respect of assets 
held under finance leases 
other fixed assets include leasehold improvements motor vehicles and office equipment 
the 2009 impairment loss relates to the chinguetti field in mauritania 2008 chinguetti field in mauritaniathe recoverable amount was 
determined by estimating its value in use in calculating this impairment management used a production profile based on proven
and probable reserves estimates and a range of assumptions including an oil price assumption equal to the forward curve  
in 2010 and 2011 and 80 per barrel thereafter and a pretax discount rate assumption of 15  
depletion and amortisation for oil and gas properties is calculated on a unitofproduction basis using the ratio of oil and gas 
production in the period to the estimated quantities of commercial reserves at the end of the period plus production in the period 
generally on a fieldbyfield basis commercial reserves estimates are based on a number of underlying assumptions including oil 
and gas prices future costs oil and gas in place and reservoir performance which are inherently uncertain commercial reserves 
estimates are based on a group reserves report produced by an independent engineer however the amount of reserves that will 
ultimately be recovered from any field cannot be known with certainty until the end of the field’s life  financial statements
wwwtullowoilcom 125
note 11 investments 
2009
£m
2008
£m
unlisted investments 07 04
the fair value of these investments is not materially different from their carrying value 
principal subsidiary undertakings 
at 31 december 2009 the company’s principal subsidiary undertakings all of which are included in the consolidated group financial 
statements were 
name  country of operation country of registration 
directly held 
tullow oil sk limited 100 united kingdom  england  wales 
tullow oil spe limited 100 united kingdom  england  wales 
tullow group services limited 100 united kingdom england  wales 
tullow oil limited 100 ireland ireland  
tullow overseas holdings bv 100 netherlands netherlands 
tullow gabon holdings limited 50 held indirectly 100 gabon isle of man 
indirectly held  
tullow ea holdings limited 100 isle of man british virgin islands 
tullow oil international limited 100 channel islands  jersey  
tullow pakistan developments limited 100 pakistan  jersey  
tullow bangladesh limited 95 bangladesh  jersey  
tullow côte d’ivoire limited 100 côte d’ivoire  jersey  
tullow côte d’ivoire exploration limited 100 côte d’ivoire  jersey  
tullow india operations limited 100 india  jersey  
tullow madagascar limited 100 madagascar jersey 
tullow ghana limited 100 ghana jersey 
tullow angola bv 100 angola netherlands 
tullow congo limited  100 congo isle of man 
tullow equatorial guinea limited 100 equatorial guinea isle of man 
tullow kudu limited  100 namibia isle of man 
tullow uganda limited  100 uganda isle of man 
tullow oil gabon sa 100 gabon gabon 
tulipe oil sa 50 gabon gabon 
hardman chinguetti production pty limited 100 mauritania australia 
hardman petroleum mauritania pty limited 100 mauritania australia 
planet oil mauritania limited 100 mauritania guernsey 
tullow uganda operations pty limited 100 uganda australia 
tullow hardman holdings bv 100 netherlands netherlands 
tullow south africa pty limited 100 south africa south africa 
the principal activity of all companies relates to oil and gas exploration development and production 
 the group is deemed to control tulipe oil sa in accordance with ias 27 as it has a majority of the voting rights on the board of tulipe oil sa  financial statements 
notes to the group financial statements continued
126 tullow oil plc 2009 annual report and accounts  
note 12 trade receivables 
trade receivables comprises amounts due for the sale of oil and gas no receivables have been impaired and no allowance  
for doubtful debt has been recognised 2008 £nil 
note 13 inventories 
2009
£m
2008
£m
warehouse stocks and materials 586 279
oil stocks 102 99
688 378
inventories includes a provision of £24 million 2008 £24 million for warehouse stock and materials where it is considered that  
the net realisable value is lower than the original cost 
note 14 other current assets 
2009
£m
2008
£m
other debtors 1457 456
prepayments 288 55
vat recoverable 113 91
1858 602
included within other debtors are amounts due from joint venture partners of £756 million 2008 £302 million advances to 
contractors £505m 2008 £nil deferred expenses of £60 million 2008 £86 million and other sundry debtors of £136 million 
2008 £68 million 
note 15 cash and cash equivalents 
2009
£m
2008
£m
cash at bank and in hand 1514 2415
shortterm deposits 69 695
1583 3110
cash and cash equivalents includes an amount of £15 million 2008 £360 million which is a reserve held on fixed term deposit  
in support of a letter of credit facility which relates to the group’s share of certain decommissioning costs and an amount of 
£960 million 2008 £1530 million which the group holds as operator on behalf of joint venture partners  financial statements
wwwtullowoilcom 127
note 16 trade and other payables 
current liabilities 
2009
£m
2008
£m
trade payables 830 1297
other payables 334 309
deferred income take or pay – 07
accruals 2022 1383
paye and social security 178 175
vat and other similar taxes 108 102
current portion of finance lease note 19 28 29
3500 3302
noncurrent liabilities 
2009
£m
2008
£m
other payables 172 –
noncurrent portion of finance lease note 19 28 61
200 61
– after one year but within five years 200 61
– after five years – –
200 61
trade and other payables are noninterest bearing except for finance leases note 19  financial statements 
notes to the group financial statements continued
128 tullow oil plc 2009 annual report and accounts  
note 17 financial liabilities 
2009
£m
2008
£m
current 
shortterm borrowings – 2105
noncurrent 
term loans repayable 
– after one year but within two years 6209 3932
– after two years but within five years 2045 958
8254 4890
group bank loans are stated net of unamortised arrangement fees of £512 million 2008 £118 million 
shortterm borrowings term loans and guarantees are secured by fixed and floating charges over the oil and gas assets note 10  
of the group  
capital management  
the group defines capital as the total equity of the group capital is managed in order to provide returns for shareholders and
benefits to stakeholders and to safeguard the group’s ability to continue as a going concern tullow is not subject to any externally
imposed capital requirements 
to maintain or adjust the capital structure the group may put in place new debt facilities issue new shares for cash repay  
debt engage in active portfolio management adjust the dividend payment to shareholders or other such restructuring activities  
as appropriate 
no significant changes were made in the objectives policies or processes during the year ended 31 december 2009 
the group monitors capital on the basis of the net debt ratio that is the ratio of net debt to net debt plus equity net debt is 
calculated as gross debt as shown in the balance sheet less cash and cash equivalents 
2009
£m
2008
£m
external borrowings 8766 7113
less cash and cash equivalents 1583 3110
net debt 7183 4003
equity 15259 13092
net debt ratio 47 31
the movement from 2008 is attributable to higher external borrowings during 2009 principally as a result of the group’s  
£7574 million investment in development appraisal and exploration activities in conjunction with holding less cash as at  
31 december 2009 which is offset by an increase in equity attributable to the equity raise in january 2009 
interest rate risk  
the interest rate profile of the group’s financial assets and liabilities excluding trade and other receivables and trade and other 
payables at 31 december 2009 was as follows 
stg
£m
euro
£m
us 
£m 
other
£m
total
£m
cash at bank at floating interest rate 216 07 1224 60 1507
cash at bank on which no interest is received – – 71 05 76
fixed rate debt – – 3421 – 3421
floating rate debt 370 – 4463 – 4833
net debtcash 154 07 6589 65 6671 financial statements
wwwtullowoilcom 129
the profile at 31 december 2008 for comparison purposes was as follows 
floating rate debt comprises bank borrowings at interest rates fixed in advance from overnight to three months at rates determined 
by us dollar libor and sterling libor fixed rate debt comprises bank borrowings at interest rates fixed in advance for periods
greater than three months or bank borrowings where the interest rate has been fixed through interest rate hedging the  
us2 billion reserves based lending facility incurs interest on outstanding debt at sterling or us dollar libor plus a margin 
ranging from 350 basis points to 375 basis points the outstanding debt is repayable in variable amounts determined semiannually  
over the period to 31 december 2015 or such time as is determined by reference to the remaining reserves of the assets whichever 
is earlier there is no requirement under the reserves based lending facility to hedge interest rate exposure to sterling libor
and us dollar libor the reserves based lending facility states that consideration should be given to hedging at least 30 of the 
interest rate exposure to fluctuations in libor for sterling and us dollars in respect of loans under the facility net of relevant  
cash balances 
the us250m revolving credit facility is repayable in full on 31 december 2011 the facility incurs interest on outstanding debt  
at us dollar libor plus a margin of 500 basis points the revolving credit facility states that the terms of the reserves based
lending facility hedging policy above shall apply to the revolving credit facility  
at the end of december 2009 the headroom under the two facilities amounted to us620 million £3893 million us370 million 
£2323 million under the us2 billion reserves based lending and us250 million £1570 million under the revolving credit 
facility at the end of december 2008 the headroom under the two facilities was us335 million £2314 million us235 million 
£1623 million under the us1350 million reserves based lending facility and us100 million £691 million under the hardman 
bridge facility 
the group is exposed to floating rate interest rate risk as entities in the group borrow funds at floating interest rates the group 
hedges its floating rate interest rate exposure on an ongoing basis through the use of interest rate derivatives namely interest  
rate swaps interest rate collars and interest rate caps the group put in place a material interest rate hedging programme in mid  
2009 the two year interest rate swaps currently in place have an average swap rate of 261 for a current notional principal  
of us100 million £628 million the three year interest rate swaps currently in place have an average swap rate of 219 for a 
current notional principal of us250 million £1567 million the five year interest rate swaps currently in place have an average 
swap rate of 314 for a notional principal of us50 million £314 million the effect of the interest rate collar currently in place 
limits the exposure to us dollar libor at varying rates maximum of 43 over the remaining life of the derivative may 2011 for  
a current notional principal of us50 million £314 million the combined marktomarket position as at 31 december 2009 was 
£56 million out of the money 2008 £21 million out of the money the interest rate hedges excluding the collar are included in  
the fixed rate debt in 2009 in the above table and were also included in the fixed rate debt in 2008 
foreign currency risk  
wherever possible the group conducts and manages its business in sterling uk and us dollars all other countries the operating 
currencies of the industry in the areas in which it operates the group’s borrowing facilities are also denominated in sterling and  
us dollars which further assists in foreign currency risk management from time to time the group undertakes certain transactions 
denominated in foreign currencies these exposures are managed by executing foreign currency financial derivatives typically to 
manage exposures arising on corporate transactions such as acquisitions and disposals there were no foreign currency financial
derivatives in place at the 2009 year end cash balances are held in other currencies to meet immediate operating and 
administrative expenses or to comply with local currency regulations  
as at 31 december 2009 the only material monetary assets or liabilities of the group that were not denominated in the functional 
currency of the respective subsidiaries involved were us1337 million £8394 million cash drawings under the us2 billion 
reserved based lending facility as at 31 december 2008 the only material monetary assets or liabilities of the group that were not 
denominated in the functional currency of the respective subsidiaries involved were us930 million £6423 million cash drawings 
under the us1350 million borrowing base facility and us100 million £691 million cash drawings under the us200 million 
hardman bridge facility these us dollar cash drawings at 31 december 2009 continue to be held as a hedge against us dollar 
denominated net assets in subsidiaries  
the carrying amounts of the group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date
are net liabilities of £7399 million 2008 net liabilities of £4445 million 
stg
£m
euro 
£m 
us 
£m 
other
£m
total
£m
cash at bank at floating interest rate 557 13 2402 94 3066
cash at bank on which no interest is received – – 40 05 45
fixed rate debt – – 345 – 345
floating rate debt – – 6769 – 6769
net cashdebt 557 13 4672 99 4003 financial statements 
notes to the group financial statements continued
130 tullow oil plc 2009 annual report and accounts  
note 17 financial liabilities continued
foreign currency sensitivity analysis  
the group is mainly exposed to fluctuations in the us dollar the group measures its market risk exposure by running various 
sensitivity analyses including 20 favourable and adverse changes in the key variables the sensitivity analyses include only 
outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 20 change  
in foreign currency rates 
as at 31 december 2009 a 20 increase in sterling against the us dollar would have resulted in a decrease in foreign  
currency denominated liabilities and equity of £1423 million 2008 £1331 million and a 20 decrease in sterling against  
us dollar would have resulted in an increase in foreign currency denominated liabilities and equity of £2134 million  
2008 £1997 million 
liquidity risk  
the group manages the liquidity requirements by the use of both short and longterm cash flow projections supplemented by 
maintaining debt financing plans and active portfolio management ultimate responsibility for liquidity risk management rests with 
the board of directors which has built an appropriate liquidity risk management framework for the management of the group’s 
short medium and longterm funding and liquidity management requirements 
the group closely monitors and manages its liquidity risk cash forecasts are regularly produced and sensitivities run for different 
scenarios including but not limited to changes in commodity prices different production rates from the group’s portfolio of 
producing fields and delays in development projects the group normally seeks to ensure that it has a minimum ongoing capacity 
of 500 million £320 million for a period of at least 12 months to safeguard the group’s ability to continue as a going concern 
following the equity placing announced in january 2010 the planned portfolio activity and the us2 billion financing already secured 
in march 2009 the group’s forecasts and projections show that there is significant capacity and financial flexibility for the 12 months 
from the date of this annual report and accounts 
after taking account of the above the directors have a reasonable expectation that the group has adequate resources to continue  
in operational existence for the foreseeable future accordingly they continue to adopt the going concern basis in preparing the 
annual report and accounts 
the following table details the group’s remaining contractual maturity for its nonderivative financial liabilities with agreed
repayment periods the tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the  
earliest date on which the group can be required to pay 
weighted average 
effective interest 
rate
less than 
1 month
£m
13
months
£m
3 months 
to 1 year
£m
15 
years 
£m 
5
years
£m
total
£m
31 december 2009 
noninterest bearing 0 1025 342 82 – – 1449
finance lease liability 28 – – 29 29 – 58
variable interest rate instruments 47 34 69 308 7832 2155 10398
total 1059 411 419 7861 2155 11905
weighted average 
effective interest 
rate
less than 
1 month
£m
13
months
£m
3 months 
to 1 year
£m
15 
years 
£m 
5
years
£m
total
£m
31 december 2008 
noninterest bearing 0 1770 40 07 73 – 1890
finance lease liability 28 – – 27 55 – 82
variable interest rate instruments 44173523035164 – 7519
total 17877523375292 – 9491 financial statements
wwwtullowoilcom 131
note 18 financial instruments 
financial risk management objectives 
the group holds a portfolio of commodity derivative contracts with various counterparties covering both its underlying oil and gas 
businesses in addition the group holds a small portfolio of interest rate derivatives the use of financial derivatives is governed by 
the group’s policies approved by the board of directors compliance with policies and exposure limits is reviewed by the internal 
auditors on a regular basis the group does not enter into or trade financial instruments including derivative financial instruments 
for speculative purposes 
fair values of financial assets and liabilities 
the group considers the carrying value of all the financial assets and liabilities to be materially the same as the fair value
the group has no material financial assets that are past due the group predominately sells to large oil and gas multinationals and 
no financial assets are impaired at the balance sheet date and all are considered to be fully recoverable 
fair values of derivative instruments 
under ias 39 all derivatives must be recognised at fair value on the balance sheet with changes in such fair value between 
accounting periods being recognised immediately in the income statement unless the derivatives have been designated as cash flow 
or fair value hedges the fair value is the amount for which the asset or liability could be exchanged in an arm’s length transaction at 
the relevant date fair values are determined using quoted market prices markedtomarket values where available to the extent 
that market prices are not available fair values are estimated by reference to marketbased transactions or using standard 
valuation techniques for the applicable instruments and commodities involved 
the group’s derivative instrument book and fair values were as follows 
the derivatives’ maturity and the timing of the recycling into profit or loss coincide 
the following provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value 
grouped into level 1 to 3 based on the degree to which the fair value is observable 
all derivative financial instruments of the group are level 2 2008 level 2 
level 1 fair value measurements are those derived from quoted prices unadjusted in active markets for identical assets or liabilities 
level 2 fair value measurements are those derived from inputs other than quoted prices included within level 1 that are observable 
for the asset or liability either directly ie as prices or indirectly ie derived from prices and 
level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are 
not based on observable market data unobservable inputs 
there were no transfers between level 1 and 2 during the year 
market risk 
the group’s activities expose it primarily to the financial risks of changes in commodity prices foreign currency exchange rates and 
interest rates 
assetsliabilities 
less than
one year
£m
one to 
three years
 £m
 total 
2009 
£m 
less than 
one year 
£m 
one to 
three years
 £m
total
2008
£m
cash flow hedges 
gas derivatives 84 – 84 56 52 108
oil derivatives 32 107 139 265 357 622
interest rate derivatives 38 18 56 09 12 21
14 125 111 200 293 493 financial statements 
notes to the group financial statements continued
132 tullow oil plc 2009 annual report and accounts  
note 18 financial instruments continued
oil and gas prices 
the group uses a number of derivative instruments to mitigate the commodity price risk associated with its underlying oil and  
gas revenues such commodity derivatives will tend to be priced using pricing benchmarks such as brent dated d1 heren and  
m1 heren which correlate as far as possible to the underlying oil and gas revenues respectively the group hedges its estimated  
oil and gas revenues on a portfolio basis aggregating its oil revenues from substantially all of its african oil interests and its gas 
revenues from substantially all of its uk gas interests 
at 31 december 2009 the group’s oil hedge position was summarised as follows  
oil hedges h1 2010 h2 2010 2011 2012
volume – bopd 14500 14500 10500 6500
average price – bbl 8139 8383 8577 8802
 average hedge prices are based on market prices as at 31 december 2009 and represent the current value of hedged volumes at that date 
at 31 december 2009 the group’s gas hedge position was summarised as follows  
gas hedges h1 2010 h2 2010 2011 2012
volume – mmscfd 3273 1971 1043 431
average price – ptherm 4256 4522 4911 5050
 average hedge prices are based on market prices as at 31 december 2009 and represent the current value of hedged volumes at that date 
as at 31 december 2009 all of the group’s oil and gas derivatives have been designated as cash flow hedges the group’s oil and  
gas hedges have been assessed to be ‘highly effective’ within the range prescribed under ias 39 using regression analysis on oil and ratio 
analysis on gas there is however a degree of ineffectiveness inherent in the group’s oil hedges arising from among other factors 
the discount on the group’s underlying african crude relative to brent and the timing of oil liftings relative to the hedges there is 
also a degree of ineffectiveness inherent in the group’s gas hedges which arise from among other factors field production 
performance on any day 
income statement hedge summary 
the changes in the fair value of hedges which are required to be recognised immediately in the income statement for the year were 
as follows  
the following table summarises the deferred lossesgains on derivative instruments net of tax effects recorded in the hedge
reserve note 23 for the year 
lossgain on hedging instruments 
2009
£m
2008
£m
cash flow hedges 
gas derivatives 
ineffectiveness – 01
time value 41 43
41 44
oil derivatives 
ineffectiveness 43 82
time value 370 303
413 385
total net lossgain for the year in the income statement 372 429
deferred amounts in the hedge reserve 
2009
£m
2008
£m
at 1 january 290 1320
amounts recognised in profit for the year 372 429
deferred lossesgains before tax arising during the year 618 2062
deferred tax movement taken directly to equity 82 23
328 1610 
at 31 december  38 290 financial statements
wwwtullowoilcom 133
the hedge reserve represents the cumulative portion of gains and losses on hedging instruments deemed effective in cash flow 
hedges the movement for the period in the hedge reserve is recognised in other comprehensive income 
gains from settlements during the period amounted to £153 million while revaluation losses during the period amounted to  
£256 million the resulting total reclassification from equity to profit or loss during the period was £409 million gains transferred 
from equity into profit and loss during the period of £153 million are included in the revenue line 
financial derivatives 
the group internally measures its market risk exposure by running various sensitivity analyses including utilising 10 favourable 
and adverse changes in the key variables 
oil and gas sensitivity analysis 
the following analysis required by ifrs 7 is intended to illustrate the sensitivity to changes in market variables being dated brent 
oil prices and uk d1 heren and m1 heren natural gas prices the sensitivity analysis which is used internally by management to 
monitor financial derivatives has been prepared using the following assumptions 
• the pricing adjustments relate only to the point forward marktomarket mtm evaluations 
• the price sensitivities assume there is no ineffectiveness related to the oil and gas hedges and 
• the sensitivities have been run only on the intrinsic element of the hedge as management consider this to be the material 
component of the mtm oil and gas hedges 
as at 31 december 2009 a 10 increase in the dated brent oil price curve would have decreased equity by approximately  
£103 million 2008 £220 million a 10 decrease would have increased equity by approximately £66 million 2008 £270 million 
as at 31 december 2009 a 10 increase in the uk d1 heren and m1 heren natural gas price curves would have decreased  
equity by approximately £29 million 2008 £105 million a 10 decrease would have increased equity by approximately £32 million  
2008 £103 million 
interest rate sensitivity analysis 
as at 31 december 2009 the interest rate derivative position was outofthemoney to an amount of £56 million 2008 £21 million 
a 25bps increase in the underlying interest rate would increase equity by approximately £15 million 2008 £05 million 
credit risk 
credit risk refers to the risk that the counterparty will fail to perform or fail to pay amounts due resulting in financial loss to the 
group the primary activities of the group are oil and gas exploration and production the group has a credit policy that governs the 
management of credit risk including the establishment of counterparty credit limits and specific transaction approvals the group 
limits credit risk by assessing creditworthiness of potential counterparties before entering into transactions with them and 
continuing to evaluate their credit worthiness after transactions have been initiated the group attempts to mitigate credit risk by 
entering into contracts that permit netting and allow for termination of the contract upon the occurrence of certain events of default 
the group’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of 
transactions concluded is spread amongst approved counterparties 
the group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having  
similar characteristics the maximum financial exposure due to credit risk on the group’s financial assets representing the sum  
of cash and cash equivalents investments derivative assets trade receivables and other current assets as at 31 december was
£4042 million 2008 £4902 million 
deferred amounts in the hedge reserve net of tax effects 
2009
£m
2008
£m
cash flow hedges 
gas derivatives 55 36
oil derivatives 37 341
interest rate derivatives 56 15
38 290 financial statements 
notes to the group financial statements continued
134 tullow oil plc 2009 annual report and accounts  
note 19 obligations under finance leases 
2009
£m
2008
£m
amounts payable under finance leases 
– within one year 29 32
– within two to five years 29 63
58 95
less future finance charges 02 05
present value of lease obligations 56 90
amount due for settlement within 12 months note 16 28 29
amount due for settlement after 12 months note 16 28 61
the fair value of the group’s lease obligations approximates the carrying amount the remaining lease term is two years  
2008 three years for the year ended 31 december 2009 the effective borrowing rate was 28 2008 28 
note 20 provisions 
i decommissioning costs 
2009
£m
2008
£m
at 1 january 1340 1351
new provisions and changes in estimates  42 101
disposal of subsidiaries note 26 14 379
decommissioning payments 13 02
unwinding of discount note 5 94 100
currency translation adjustment 46 169
at 31 december  1403 1340
the decommissioning provision represents the present value of decommissioning costs relating to the uk african and asian oil  
and gas interests which are expected to be incurred up to 2025 these provisions have been created based on tullow’s internal 
estimates and where available and appropriate operator’s estimates assumptions based on the current economic environment 
have been made which management believe are a reasonable basis upon which to estimate the future liability these estimates  
are reviewed regularly to take into account any material changes to the assumptions however actual decommissioning costs  
will ultimately depend upon future market prices for the necessary decommissioning works required which will reflect market 
conditions at the relevant time furthermore the timing of decommissioning is likely to depend on when the fields cease to  
produce at economically viable rates this in turn will depend upon future oil and gas prices which are inherently uncertain 
ii deferred taxation 
accelerated 
tax 
depreciation
£m
decommissioning
£m
revaluation 
of financial 
assets
£m
other timing 
differences 
£m 
prt
£m
total
£m
at 1 january 2008 3836 514 128 132 14 3076
chargecredit to income statement 743 45 45 176 39 438
credit to other comprehensive income – – 23 – – 23
credit directly to equity 74 – – – – 74
exchange differences 596 164 – 16 – 744
at 1 january 2009 3763 305 60 28 53 3479
chargecredit to income statement 254 131 21 291 01 654
credit to other comprehensive income – – 82 – – 82
charge directly to equity – – – 08 – 08
exchange differences 234 04 – 01 – 239
at 31 december 2009 3275 440 43 272 54 2660 financial statements
wwwtullowoilcom 135
2009
£m
2008
£m
deferred tax liabilities 2976 3479
deferred tax assets 316 –
no deferred tax has been provided on unremitted earnings of overseas subsidiaries as the group has no plans to remit these to the 
uk in the foreseeable future  
deferred tax assets are recognised only to the extent it is considered probable that those assets will be recoverable this involves  
an assessment of when those deferred tax assets are likely to reverse and a judgement as to whether or not there will be sufficient  
taxable profits available to offset the tax assets when they do reverse this requires assumptions regarding future profitability and  
is therefore inherently uncertain to the extent assumptions regarding future profitability change there can be an increase  
or decrease in the level of deferred tax assets recognised which can result in a charge or credit in the period in which the  
change occurs 
note 21 reconciliation of changes in equity 
share 
capital
£m 
share 
premium
£m
other 
reserves 
note 23
£m
retained 
earnings 
£m 
total 
£m 
minority 
interest 
£m
total 
equity
£m
at 1 january 2008  720 1284 2101 2867 6972 155 7127
total recognised income and expense for the year  – – 3765 2232 5997 98 6095
purchase of treasury shares ––113– 113 – 113
new shares issued in respect of employee share 
options  07 59 – – 66 – 66
new shares issued in respect of royalty obligation 06 264 – – 270 – 270
vesting of psp shares – – 69 69 – – –
sharebased payment charges  – – – 79 79 – 79
dividends paid note 7 – – – 432 432 – 432
at 1 january 2009  733 1607 5822 4677 12839 253 13092
total recognised income and expense for the year  – – 1585 151 1434 11 1423
purchase of treasury shares – – 35 – 35 – 35
issue of equity shares note 23 67 – – 3949 4016 – 4016
expenses of issue of equity shares – – – 101 101 – 101
new shares issued in respect of employee share 
options  04 71 – – 75 – 75
vesting of psp shares – – 74 74 – – –
sharebased payment charges  – – – 116 116 – 116
dividends paid note 7 – – – 481 481 – 481
at 31 december 2009  804 1678 4276 8237 14995 264 15259 financial statements 
notes to the group financial statements continued
136 tullow oil plc 2009 annual report and accounts  
note 22 called up equity share capital and share premium account 
a authorised 
2009
£m
2008
£m
1000000000 ordinary shares of stg10p each 1000 1000
b allotted equity share capital and share premium 
equity share capital 
allotted and fully paid 
share
premium
 number £m £m
ordinary shares of stg10p each 
at 1 january 2008 719610522 720 1284
issues during the year 
– exercise of share options 6926931 07 59
– new shares issued in respect of royalty obligation 6352114 06 264
at 1 january 2009 732889567 733 1607
issues during the year  
– shares issued 66938141 67 –
– exercise of share options 4486268 04 71
at 31 december 2009 804313976 804 1678
note 23 other reserves 
merger 
reserve
£m
foreign 
currency 
translation 
reserve
£m
hedge 
reserve 
£m 
treasury 
shares
£m
total
£m
at 1 january 2008 4080 583 1319 77 2101
hedge movement note 18 – – 1610 – 1610
currency translation adjustment – 2155 – – 2155
vesting of psp shares – – – 69 69
purchase of treasury shares ––– 113 113
at 1 january 2009 4080 1572 291 121 5822
hedge movement note 18 – – 327 – 327
currency translation adjustment – 1258 – – 1258
vesting of psp shares – – – 74 74
purchase of treasury shares – – – 35 35
at 31 december 2009 4080 314 36 82 4276
during 2009 the company issued 66938141 ordinary shares via an equity placing in accordance with the provisions of section 612  
of the companies act 2006 the company has transferred the premium on the shares issued of £3949 million £3848 m net of
expenses using the market value at the date of acquisition to retained earnings as the premium is considered to be realised
the foreign currency translation reserve represents exchange gains and losses arising on translation of foreign currency 
subsidiaries monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor  
likely to occur which form part of the net investment in a foreign operation and exchange gains or losses arising on longterm  
foreign currency borrowings which are a hedge against the group’s overseas investments 
the hedge reserve represents gains and losses on hedging instruments classed as cash flow hedges that are determined as an 
effective hedge  
the treasury shares reserve represents the cost of shares in tullow oil plc purchased in the market and held by the tullow oil 
employee trust to satisfy awards held under the group’s share incentive plans see note 27 
illion financial statements
wwwtullowoilcom 137
note 24 minority interest 
2009
£m
2008
£m
at 1 january  253 155
foreign currency translation 23 68
share of profit for the year 34 30
at 31 december 264 253
the minority interest materially relates to tulipe oil sa where the group acquired a 50 controlling shareholding during 2007
note 25 cash flows from operating activities 
2009
£m
2008
£m
profit before taxation  203 2993
adjustments for  
depletion depreciation and amortisation  2286 2024
impairment loss 81 263
exploration costs written off  528 2267
profit on disposal of subsidiaries 101 2132
profit on disposal of oil and gas assets 31 306
decommissioning expenditure 13 02
sharebased payment charge 34 79
lossgain on hedging instruments 372 429
finance revenue  13 39
finance costs  389 472
operating cash flow before working capital movements 3735 5190
increasedecrease in trade and other receivables  1183 185
increase in inventories  337 129
increase in trade payables  723 631
cash generated from operations  2938 5877 financial statements 
notes to the group financial statements continued
138 tullow oil plc 2009 annual report and accounts  
note 26 disposal of subsidiaries and oil and gas assets 
i disposal of subsidiary 
tullow completed the sale of tullow oil uk limited incorporating the 5168 interest in the hewettbacton complex to eni  
in november 2008  
the net assets of tullow oil uk limited at the date of disposal in november 2008 were as follows 
2008
£m
property plant and equipment 243
inventories 10
trade receivables 38
cash and cash equivalents –
other creditors 153
current tax liability 112
deferred tax liability 74
provisions 379
net liability on disposal 55
gain on disposal 2132
total consideration 2077
satisfied by 
cash 2077
an additional £101 million has been recognised on this sale during 2009 following the settlement of tax and other working  
capital adjustments 
ii disposal of oil and gas assets 
profit on disposal of oil and gas assets of £31 million 2008 £306 million comprises £25 million deferred consideration received
ng 2007 and £03 million in relation to the cms disposal   
tion received at first gas in relation to the west bukha field in oman that was
due to the extension of the ngosso permit in cameroon that was sold duri
during 2008 the remaining £03 m is considera
sold during 1996
illion financial statements
wwwtullowoilcom 139
note 27 sharebased payments  
2005 performance share plan psp 
under the psp senior executives can receive conditional awards of rights over whole shares worth up to 200 of salary pa 300 in 
exceptional circumstances awards granted in 2009 vest subject to a total shareholder return tsr performance condition half of 
an award is tested against constituents of the ftse 100 index excluding investment trusts and the other half against a comparator 
group of oil and gas companies performance is measured over a fixed three year period starting on 1 january prior to grant and  
an individual must normally remain in employment for threeyears from grant for the shares to vest no dividends are paid over 
the vesting period there are further details of psp award measurement in the directors’ remuneration report on page 94 
the shares outstanding under the psp are as follows 
2009
psp shares
2009 average  
weighted share 
price at grant  
p 
2008
psp shares
2008 average 
weighted share
price at grant 
p
outstanding at 1 january 3856913 5529 4451474 2933
granted 1572567 7858 1328692 9176
exercised during the year 1095350 3541 1747750 1875
forfeitedexpired during the year 28644 7803 175503 3658
outstanding at 31 december 4305486 6870 3856913 5529
the inputs of the option valuation model were 
risk free interest rate 19 pa 4447 pa
expected volatility 54 3941
dividend yield 08 pa 0708 pa
the expected life is the period from date of grant to vesting expected volatility was determined by calculating the historical volatility 
of the company’s share price over a period commensurate with the expected life of the awards the weighted average fair value of 
the awards granted in 2009 was 5799p per award 2008 6539p 
the group recognised a total expense of £36 million 2008 £40 million in respect of the psp 
2005 deferred share bonus plan dsbp 
under the dsbp the portion of any annual bonus above 75 of the base salary 60 for bonuses paid for 2007 and earlier years of  
a senior executive nominated by the remuneration committee is deferred into shares dsbp awards normally vest following the end
of three financial years commencing with that in which the award is granted  
the shares outstanding under the dsbp are as follows 
2009
dsbp shares
2009 
share price  
at grant 
2008
dsbp shares
2008
share price 
at grant
outstanding at 1 january 200633 5079p 184254 3754p
granted 135291 7780p 96166 6295p
exercised during the year 104467 3960p 79787 3485p
outstanding at 31 december 231457 7163p 200633 5079p
the inputs of the option valuation model were 
dividend yield 10 pa 10 pa
the expected life is the period from the date of grant to the vesting date the fair value of the awards granted in 2009 was 7602p per 
award 2008 6119p 
the group recognised a total expense of £05 million 2008 £05 million in respect of the dsbp  financial statements 
notes to the group financial statements continued
140 tullow oil plc 2009 annual report and accounts  
note 27 sharebased payments continued  
2000 executive share option scheme esos 
the only share option scheme operated by the company during the year was the 2000 esos options normally only become 
exercisable from the third anniversary of the date of the grant and if the performance condition has been met the awards are tested 
against constituents of an index and 100 of awards will vest if the company’s tsr is above the median of the index over three years 
following grant for awards from march 2008 the index is the ftse 100 index excluding investment trusts for awards before march 
2008 the index is the ftse 250 index excluding investment trusts  
options granted under the previous 1998 esos had all been exercised at 31 december 2009 all awards under the 1998 esos  
were made prior to 7 november 2002 and therefore under the ifrs transitional provisions they have not been accounted for  
in accordance with ifrs 2 – sharebased payments 
the following table illustrates the number and weighted average exercise prices waep of and movements in share options under 
the 1998 esos and the 2000 esos during the year 
2009
number
2009 
waep 
p 
2008
number
2008
waep
p
outstanding as at 1 january 14688105 2821 19216684 1660
granted during the year 3155150 7810 2475251 6473
exercised during the year 4486268 1684 6926931 915
forfeitedexpired during the year 99146 6431 76899 2104
outstanding at 31 december 13257841 4366 14688105 2821
exercisable at 31 december 5700412 1778 7971074 1215
the weighted average share price at exercise for options exercised in 2009 was 10005p 2008 8543p  
options outstanding at 31 december 2009 had exercise prices of 630p to 11790p and remaining contractual lives of 1 to 10 years  
the fair values were calculated using a proprietary binomial valuation model the principal inputs to the options valuation  
model were 
risk free interest rate 1925 pa
expected volatility 49
dividend yield 0508 pa
employee turnover 5 pa 
early exercise at rates dependent upon potential gain from exercise
expected volatility was determined by calculating the historical volatility of the company’s share price over a period commensurate 
with the expected lifetime of the awards  
the fair values and expected lives of the options valued in accordance with ifrs 2 were 
award date 
weighted 
average  
exercise  
price 
p 
weighted 
average 
fair 
value
p
weighted 
average 
expected 
life from 
grant date 
years
jan – dec 2007 3969 1234 48
jan – dec 2008 6473 2058 43
jan – dec 2009 7810 2835 40
the group recognised a total expense of £18 million 2008 £32 million in respect of the esos  financial statements
wwwtullowoilcom 141
uk  irish share incentive plans sips 
the sips were launched at the beginning of 2004 these are all employee plans which have been set up in the uk and ireland 
enable employees to save out of salary up to prescribed monthly limits contributions are used by the plan trustees to acquire 
tullow shares ‘partnership shares’ the company makes a matching contribution to acquire a matching number of tullow shares 
‘matching shares’ on a oneforone basis at the end of each three month accumulation period matching shares are subject to time 
based forfeiture over three years on leaving employment in certain circumstances or if the related partnership shares are sold
the fair value of a matching share is its market value at the start of the accumulation period 
for the uk plan partnership shares are purchased at the lower of the market values at the start of the accumulation period and
the purchase date which is treated as a three month share option for ifrs 2 purposes for the irish plan shares are bought at the 
market price at the purchase date which does not result in any ifrs 2 accounting charge 
matching shares vest three years after grant and dividends are paid to the employee during this period 
the group recognised a total expense of £01 million 2008 £01 million for the matching shares and £01 million 2008 £01 million 
for the partnership shares 
note 28 operating lease arrangements 
2009
£m
2008
£m
minimum lease payments under operating leases recognised in income for the year 24 51
at the balance sheet date the group had outstanding commitments for future minimum lease payments under noncancellable 
operating leases which fall due as follows 
2009
£m
2008
£m
minimum lease payments under operating leases 
due within one year 77 78
after one year but within two years 121 78
after two years but within five years 75 168
due after five years – 09
273 333
operating lease payments represent rentals payable by the group for certain of its office properties and a lease for an fpso vessel 
for use on the chinguetti field in mauritania leases on office properties are negotiated for an average of six years and rentals are 
fixed for an average of six years the fpso lease runs for a minimum period of seven years from february 2006 and the contract 
provides for an option to extend the lease for a further three years at a slightly reduced rate 
note 29 capital commitments 
capital commitments as at 31 december 2009 are £8104 million 2008 £6062 million 
note 30 contingent liabilities 
at 31 december 2009 there existed contingent liabilities amounting to £1503 million 2008 £733 million in respect of performance 
guarantees for committed work programmes  financial statements 
notes to the group financial statements continued
142 tullow oil plc 2009 annual report and accounts  
note 31 related party transactions 
the directors of tullow oil plc are considered to be the only key management personnel as defined by ias 24 – related  
party disclosures  
2009
£m
2008
£m
shortterm employee benefits 44 46
post employment benefits 03 03
amounts awarded under longterm incentive schemes 12 10
sharebased payments 28 23
87 82
shortterm employee benefits 
these amounts comprise fees paid to the directors in respect of salary and benefits earned during the relevant financial year 
plus bonuses awarded for the year 
post employment benefits 
these amounts comprise amounts paid into the pension schemes of the directors 
amounts awarded under longterm incentive schemes 
these amounts relate to the shares granted under the annual bonus scheme that is deferred for three years under the deferred 
share bonus plan dsbp 
sharebased payments 
this is the cost to the group of directors’ participation in sharebased payment plans as measured by the fair value of options  
and shares granted accounted for in accordance with ifrs 2 ‘sharebased payments’ 
there are no other related party transactions further details regarding transactions with the directors of tullow oil plc are 
disclosed in the remuneration report on pages 91 to 100 
note 32 subsequent events 
since the balance sheet date tullow has continued to progress its exploration development and business growth strategies 
in january 2010 the group announced the successful placing and subsequent issue of a total of 80431796 new ordinary shares with 
institutions at 1150 pence per share this represents an increase of approximately 999 in tullow’s existing issued share capital 
these shares are credited as fully paid and rank pari passu in all respects with existing ordinary shares of 10 pence each in the 
capital of the company including the right to receive all dividends and other distributions declared made or paid on or in respect  
of such shares after the date of issue 
in january 2010 the group announced that it had exercised its preemption rights over heritage oil’s ugandan sale for up to  
15 billion £10 billion in addition two new potential partners have been identified cnooc and total and it is expected that  
each partner will acquire a one third interest in each of the three ugandan blocks the group expects the transaction to be signed  
in the coming weeks 
in january 2010 the group announced that the appraisal well tweneboa 2 proved up a combined oil and gascondensate column  
of at least 35 metres this has confirmed tweneboa as a major oil and gascondensate field 
note 33 pension schemes 
the group operates defined contribution pension schemes for staff and executive directors the contributions are payable  
to external funds which are administered by independent trustees contributions during the year amounted to £33 million  
2008 £22 million at 31 december 2009 there was a liability of £06 2008 £01 million for contributions payable included  
in creditors  financial statements
financial statements 
independent auditors’ report  
to the members of tullow oil plc 
wwwtullowoilcom 
we have audited the parent company financial statements  
of tullow oil plc for the year ended 31 december 2009 which 
comprise the balance sheet and the related notes 1 to 13  
these parent company financial statements have been 
prepared under the accounting policies set out therein 
we have reported separately on the group financial statements 
of tullow oil plc for the year ended 31 december 2009 and on 
the information in the directors’ remuneration report that is 
described as having been audited  
this report is made solely to the company’s members as a 
body in accordance with chapter 3 of part 16 of the companies 
act 2006 our audit work has been undertaken so that we might 
state to the company’s members those matters we are required 
to state to them in an auditors’ report and for no other purpose 
to the fullest extent permitted by law we do not accept or 
assume responsibility to anyone other than the company and 
the company’s members as a body for our audit work for  
this report or for the opinions we have formed 
respective responsibilities of directors and auditors 
as explained more fully in the directors’ responsibilities 
statement the directors are responsible for the preparation of  
the parent company financial statements and for being satisfied 
that they give a true and fair view our responsibility is to audit 
the parent company financial statements in accordance with 
applicable law and international standards on auditing uk  
and ireland those standards require us to comply with the 
auditing practices board’s apb’s ethical standards  
for auditors 
scope of the audit of the financial statements 
an audit involves obtaining evidence about the amounts  
and disclosures in the financial statements sufficient to give 
reasonable assurance that the financial statements are free 
from material misstatement whether caused by fraud or error 
this includes an assessment of whether the accounting policies 
are appropriate to the parent company’s circumstances and 
have been consistently applied and adequately disclosed  
the reasonableness of significant accounting estimates  
made by the directors and the overall presentation of the 
financial statements 
opinion on financial statements 
in our opinion the parent company financial statements  
• give a true and fair view of the state of the parent company’s 
affairs as at 31 december 2009 
• have been properly prepared in accordance with united 
kingdom generally accepted accounting practice and  
• have been prepared in accordance with the requirements  
of the companies act 2006 
opinion on other matters prescribed by the companies  
act 2006 
in our opinion 
• the part of the directors’ remuneration report to be audited 
has been properly prepared in accordance with the 
companies act 2006 and 
• the information given in the directors’ report for the financial 
year for which the financial statements are prepared is 
consistent with the parent company financial statements 
matters on which we are required to report by exception 
we have nothing to report in respect of the following matters 
where the companies act 2006 requires us to report to you if  
in our opinion 
• adequate accounting records have not been kept by the 
parent company or returns adequate for our audit have  
not been received from branches not visited by us or 
• the parent company financial statements and the part of  
the directors’ remuneration report to be audited are not  
in agreement with the accounting records and returns or 
• certain disclosures of directors’ remuneration specified  
by law are not made or 
• we have not received all the information and explanations  
we require for our audit 
matthew donaldson senior statutory auditor 
for and on behalf of deloitte llp 
chartered accountants and statutory auditors  
london uk 
9 march 2010 
143 company balance sheet 
as at 31 december 2009 
notes 
2009
£m
2008
£m
fixed assets 
investments 1 9599 9508
deferred tax assets 3 244 –
9843 9508
current assets 
debtors 4 12321 7391
cash at bank and in hand 84 298
12405 7689
creditors – amounts falling due within one year 
trade and other creditors 5 113 43
bank loans 6 – 2105
113 2148
net current assets  12292 5541
total assets less current liabilities 22135 15049
creditors – amounts falling due after more than one year 
bank loans 6 8254 4890
loans from subsidiary undertakings 7 1563 1277
net assets 12318 8882
capital and reserves 
called up equity share capital 8 804 733
share premium account 8 1678 1607
other reserves 10 3433 3394
profit and loss account 9 6403 3148
shareholders’ funds 9 12318 8882
approved by the board and authorised for issue on 9 march 2010 
aidan heavey ian springett
chief executive officer chief financial officer 
144 tullow oil plc 2009 annual report and accounts   financial statements
notes to the company financial statements 
year ended 31 december 2009 
wwwtullowoilcom 
a basis of accounting  
the financial statements have been prepared under the 
historical cost convention in accordance with the companies  
act 2006 and uk generally accepted accounting principles  
uk gaap the following paragraphs describe the main 
accounting policies under uk gaap which have been  
applied consistently  
in accordance with the provisions of section 408 of the 
companies act the profit and loss account of the company  
is not presented separately during the year the company  
made a loss of £154 million in accordance with the exemptions 
available under frs 1 ‘cash flow statements’ the company 
has not presented a cash flow statement as the cash flow of  
the company has been included in the cash flow statement  
of tullow oil plc group set out on page 110 
b investments 
fixed asset investments including investments in subsidiaries 
are stated at cost and reviewed for impairment if there are 
indications that the carrying value may not be recoverable 
c finance costs and debt 
finance costs of debt are allocated to periods over the term  
of the related debt at a constant rate on the carrying amount  
interestbearing bank loans are recorded at the proceeds 
received net of direct issue costs finance charges including 
premiums payable on settlement or redemption and direct issue 
costs are accounted for on an accruals basis in the profit and 
loss account using the effective interest method and are added 
to the carrying amount of the instrument to the extent that they 
are not settled in the period in which they arise 
d financial liabilities and equity 
financial liabilities and equity instruments are classified 
according to the substance of the contractual arrangements 
entered into an equity instrument is any contract that evidences  
a residual interest in the assets of the group after deducting  
all of its liabilities 
e foreign currencies 
sterling is the reporting currency of the company transactions 
in foreign currencies are translated at the rates of exchange 
ruling at the transaction date monetary assets and liabilities 
denominated in foreign currencies are translated into sterling  
at the rates of exchange ruling at the balance sheet date with  
a corresponding charge or credit to the profit and loss account 
however exchange gains and losses arising on longterm 
foreign currency borrowings which are a hedge against the 
company’s overseas investments are dealt with in reserves 
f share issue expenses and share premium account 
costs of share issues are written off against the premium 
arising on the issues of share capital 
g taxation 
current and deferred tax including uk corporation tax is 
provided at amounts expected to be paid using the tax rates  
and laws that have been enacted or substantially enacted by  
the balance sheet date 
h sharebased payments 
the company has applied the requirements of frs 20  
sharebased payments in accordance with the transitional 
provisions of that standard only those awards that were  
granted after 7 november 2002 and had not vested at  
1 january 2005 are included 
all sharebased awards of the company are equity settled  
as defined by frs 20 the fair value of these awards has been 
determined at the date of grant of the award allowing for the 
effect of any marketbased performance conditions this fair 
value adjusted by the company’s estimate of the number of 
awards that will eventually vest as a result of nonmarket 
conditions is expensed uniformly over the vesting period 
the fair values were calculated using a binomial option  
pricing model with suitable modifications to allow for employee 
turnover after vesting and early exercise where necessary this 
model was supplemented with a monte carlo model the inputs 
to the models include the share price at date of grant exercise 
price expected volatility expected dividends risk free rate of 
interest and patterns of exercise of the plan participants 
i capital management 
the company defines capital as the total equity of the company 
capital is managed in order to provide returns for shareholders 
and benefits to stakeholders and to safeguard the company’s 
ability to continue as a going concern tullow is not subject to 
any externallyimposed capital requirements to maintain or 
adjust the capital structure the company may adjust the 
dividend payment to shareholders return capital issue new  
shares for cash repay debt and put in place new debt facilities  
145 financial statements 
notes to the company financial statements continued
146 tullow oil plc 2009 annual report and accounts  
note 1 investments 
2009
£m
2008
£m
shares at cost in subsidiary undertakings 9592 9504
unlisted investments 07 04
9599 9508
the increase in the year is attributable to an additional investment in ikon science limited unlisted investment and additional 
investments in the group’s subsidiary companies  
principal subsidiary undertakings 
at 31 december 2009 the company’s principal subsidiary undertakings were 
name  country of operation country of registration 
directly held 
tullow oil sk limited 100 united kingdom  england  wales 
tullow oil spe limited 100 united kingdom  england  wales 
tullow group services limited 100 united kingdom england  wales 
tullow oil limited 100 ireland ireland  
tullow overseas holdings bv 100 netherlands netherlands 
tullow gabon holdings limited 50 held indirectly 100 gabon isle of man 
indirectly held 
tullow ea holdings limited 100 isle of man british virgin islands 
tullow oil international limited 100 channel islands  jersey  
tullow pakistan developments limited 100 pakistan  jersey  
tullow bangladesh limited 95 bangladesh  jersey  
tullow côte d’ivoire limited 100 côte d’ivoire  jersey  
tullow côte d’ivoire exploration limited 100 côte d’ivoire  jersey  
tullow india operations limited 100 india  jersey  
tullow madagascar limited 100 madagascar jersey 
tullow ghana limited 100 ghana jersey 
tullow angola bv 100 angola netherlands 
tullow congo limited  100 congo isle of man 
tullow equatorial guinea limited 100 equatorial guinea isle of man 
tullow kudu limited  100 namibia isle of man 
tullow uganda limited  100 uganda isle of man 
tullow oil gabon sa 100 gabon gabon 
tulipe oil sa 50 gabon gabon 
hardman chinguetti production pty limited 100 mauritania australia 
hardman petroleum mauritania pty limited 100 mauritania australia 
planet oil mauritania limited 100 mauritania guernsey 
tullow uganda operations pty limited 100 uganda australia 
tullow hardman holdings bv 100 netherlands netherlands 
tullow south africa pty limited 100 south africa south africa 
the principal activity of all companies relates to oil and gas exploration development and production 
 the company is deemed to control tulipe oil sa in accordance with frs 2 as it has a majority of the voting rights on the board of tulipe oil sa 
the company is required to assess the carrying values of each of its investments in subsidiaries for impairment the net assets
of certain of the company’s subsidiaries are predominantly intangible exploration and evaluation ee assets where facts and 
circumstances indicate that the carrying amount of an ee asset held by a subsidiary may exceed its recoverable amount by 
reference to the specific indicators of impairment of ee assets in ifrs 6 an impairment test of the asset is performed by the
subsidiary undertaking and the asset is impaired by any difference between its carrying value and its recoverable amount the 
recognition of such an impairment by a subsidiary is used by the company as the primary basis for determining whether or not  
there are indications that the investment in the related subsidiary may also be impaired and thus whether an impairment test  
of the investment carrying value needs to be performed the results of exploration activities are inherently uncertain and the
assessment for impairment of ee assets by the subsidiary and that of the related investment by the company is judgemental  financial statements
wwwtullowoilcom 147
note 2 dividends 
2009
£m
2008
£m
declared and paid during year 
final dividend for 2008 stg40p 2007 stg40p per ordinary share 321 287
interim dividend for 2009 stg20p 2008 stg20p per ordinary share 160 145
dividends paid 481 432
proposed for approval by shareholders at the agm 
final dividend for 2009 stg40p 2008 stg40p 322 293
the proposed final dividend is subject to approval by shareholders at the annual general meeting and has not been included as  
a liability in these financial statements 
note 3 deferred tax 
the company has tax losses of £871 million 2008 £350 million that are available indefinitely for offset against future non ring 
fence taxable profits in the company a deferred tax asset of £244 million has been recognised in respect of these losses as  
at december 2009 on the basis that the company anticipates making non ring fence profits in the foreseeable future 
note 4 debtors 
amounts falling due within one year 
2009
£m
2008
£m
other debtors 28 04
due from subsidiary undertakings 12293 7387
12321 7391
the amounts due from subsidiary undertakings include £1834 million 2008 £3329 million that incurs interest at libor plus  
1727 the remaining amounts due from subsidiaries accrue no interest all amounts are repayable on demand 
note 5 trade and other creditors 
amounts falling due within one year 
2009
£m
2008
£m
other creditors 38 23
accruals 74 17
vat 01 03
113 43 financial statements 
notes to the company financial statements continued
148 tullow oil plc 2009 annual report and accounts  
note 6 bank loans 
2009
£m
2008
£m
current 
shortterm borrowings – 2105
noncurrent 
term loans repayable 
– after one year but within two years 6209 3932
– after two years but within five years 2045 958
8254 4890
company bank loans are stated net of unamortised arrangement fees of £512 million 2008 £118 million 
term loans and guarantees are secured by fixed and floating charges over the oil and gas assets note 10 of the group  
interest rate risk  
the interest rate profile of the company’s financial assets and liabilities at 31 december 2009 was as follows 
the profile at 31 december 2008 for comparison purposes was as follows 
cash at bank at floating interest rate consisted of deposits which earn interest at rates set in advance for periods ranging  
from overnight to one month by reference to market rates 
floating rate debt comprises bank borrowings at interest rates fixed in advance from overnight to three months at rates determined 
by us dollar libor and sterling libor fixed rate debt comprises bank borrowings at interest rates fixed in advance for periods
greater than three months or bank borrowings where the interest rate has been fixed through interest rate hedging 
the us2 billion reserves based lending facility incurs interest on outstanding debt at sterling or us dollar libor plus a margin  
ranging from 350 basis points to 375 basis points depending on utilisation and concentration of nonoecd assets the outstanding debt  
is repayable in variable amounts determined semiannually over the period to 31 december 2015 or such time as is determined 
by reference to the remaining reserves of the assets whichever is earlier the reserves based lending facility states that 
consideration should be given to hedging at least 30 of the interest rate exposure to fluctuations in libor for sterling and  
us dollars in respect of loans under the facility net of relevant cash balances 
the 250 million corporate facility is a revolving facility which is repayable in full on 31 december 2011 the facility incurs interest 
ints the corporate facility states that the terms of the
 shall apply to the corporate facility  
stg 
£m 
us
£m
total
£m
cash at bank at floating interest rate 02 82 84
amounts due from subsidiaries at libor  17 1834 – 1834
fixed rate debt – 3422 3422
floating rate debt 370 4463 4833
net cashdebt 1466 7803 6337
stg 
£m 
us
£m
total
£m
cash at bank at floating interest rate 298 – 298
amounts due from subsidiaries at libor  17 4946 – 4946
fixed rate debt – 691 691
floating rate debt – 6423 6423
net cashdebt 5244 7114 1870
on outstanding debt at us dollar libor plus a margin of 500 basis po
reserves based lending facility hedging policy above financial statements
wwwtullowoilcom 149
at the end of december 2009 the headroom under the two facilities amounted to us620 million £3893 million us370 million 
£2323 million under the us 2 billion reserves based lending and us250 million £1570 million under the corporate  
facility at the end of december 2008 the headroom under the two facilities was us335 million £2314 million us235 million  
£1623 million under the us 1350 million reserves based lending facility and us100 million £691 million under the hardman  
bridge facility 
the company is exposed to floating rate interest rate risk as entities in the group borrow funds at floating interest rates the 
company hedges its floating rate interest rate exposure on an ongoing basis through the use of interest rate derivatives namely 
interest rate swaps interest rate collars and interest rate caps the two year interest rate swaps currently in place have an average 
swap rate of 261 for a current notional principal of us100 million £628 million the three year interest rate swaps currently  
in place have an average swap rate of 219 for a current notional principal of us250 million £1567 million the five year interest 
rate swaps currently in place have an average swap rate of 314 for a notional principal of us 50 million £314 million the  
effect of the interest rate collar currently in place limits the exposure to us dollar libor at varying rates maximum of 43
over the remaining life of the derivative may 2011 for a current notional principal of us50 million £314 million the combined 
marktomarket position as at the 2009 year end was £56 million 2008 £21 million the interest rate hedges are included in
the fixed rate debt in 2009 in the above table and were also included in fixed rate debt in 2008  
foreign currency risk  
as at 31 december 2009 the only material monetary assets or liabilities of the company that were not denominated in the functional 
currency of the respective subsidiaries involved were us1337 million £8394 million cash drawings under the us2 billion 
borrowing base facility as at 31 december 2008 the only material assets or liabilities that were not denominated in the functional 
currency of the respective subsidiaries involved were us930 million £6423 million cash drawings under the us1350 million 
borrowing base facility and us100 million £691 million cash drawings under the 200 million hardman bridge facility these 
us dollar cash drawings at 31 december 2009 continue to be held as a hedge against us dollar denominated net assets in subsidiaries  
the net carrying amount of the company’s foreign currency denominated monetary assets and monetary liabilities at the reporting
date was £8253 million 2008 £7113 million  
foreign currency sensitivity analysis  
the company is mainly exposed to fluctuation in the us dollar the group measures its market risk exposure by running various 
sensitivity analyses including 20 favourable and adverse changes in the key variables the sensitivity analyses include only 
outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 20 change in 
foreign currency rates 
as at 31 december 2009 a 20 increase in sterling against the us dollar would have resulted in a decrease in foreign currency 
denominated liabilities and equity of £1400 million 2008 £1186 million 20 decrease and a 20 decrease in sterling against
us dollar would have resulted in an increase in foreign currency denominated liabilities and equity of £2099 million  
2008 £1778million 20 increase 
note 7 loans from subsidiary undertakings 
amounts falling due after more than one year 
2009
£m
2008
£m
loans from subsidiary companies 1563 1277
the amounts due from subsidiaries do not accrue interest all loans from subsidiary companies are not due to be repaid within  
five years  financial statements 
notes to the company financial statements continued
150 tullow oil plc 2009 annual report and accounts  
note 8 called up equity share capital and share premium account 
a authorised 
2009
£m
2008
£m
1000000000 ordinary shares of stg10p each 1000 1000
b allotted equity share capital and share premium 
equity share  
capital allotted  
and fully paid 
share 
premium 
 number £m £m
ordinary shares of stg10p each 
at 1 january 2008 719610522 720 1285
issues during the year 
– exercise of share options 6926931 07 58
– new shares issued in respect of royalty obligation 6352114 06 264
at 1 january 2009 732889567 733 1607
issues during the year 
– new shares issued 
– exercise of share options  
66938141 
4486268 
67
04
–
71
at 31 december 2009  804313976 804 1678
note 9 shareholders’ funds 
share capital
£m 
share 
premium
£m
other 
reserves 
note 9 
£m 
profit and 
loss account
£m 
total
£m
at 1 january 2008 720 1284 3438 350 5792
total recognised income and expense for the year  – – – 3219 3219
purchase of treasury shares ––112 – 112
new shares issued in respect of employee share options  07 59 – – 66
new shares issued in respect of royalty obligation 06 264 – – 270
vesting of psp shares – – 68 68 –
sharebased payment charges  – – – 79 79
dividends paid – – – 432 432
at 1 january 2009  733 1607 3394 3148 8882
total recognised income and expense for the year  – – – 154 154
issue of share capital 67 – – 3949 4016
transaction costs – – – 101 101
purchase of treasury shares – – 35 – 35
new shares issued in respect of employee share options  04 71 – – 75
vesting of psp shares – – 74 74 –
sharebased payment charges  – – – 116 116
dividends paid – – – 481 481
at 31 december 2009  804 1678 3433 6403 12318
during 2009 the company issued 66938141 ordinary shares via an equity placing in accordance with the provisions of section 612  
of the companies act 2006 the company has transferred the premium on the shares issued of £3949 million £3848m net of 
expenses using the market value at the date of acquisition to retained earnings as the premium is considered to be realised financial statements
wwwtullowoilcom 151
note 10 other reserves  
merger 
reserve 
£m 
treasury 
shares
£m
total
£m
at 1 january 2008 3515 77 3438
purchase of treasury shares – 113 113
vesting of psp shares – 69 69
at 1 january 2009 3515 121 3394
purchase of treasury shares – 35 35
vesting of psp shares – 74 74
at 31 december 2009 3515 82 3433
the treasury shares reserve represents the cost of shares in tullow oil plc purchased in the market and held by the tullow oil 
employee trust to satisfy options held under the group’s share incentive plans see note 10 
note 11 sharebased payments 
2005 performance share plan psp 
under the psp senior executives can receive conditional awards of rights over whole shares worth up to 200 of salary pa 300 in 
exceptional circumstances awards granted in 2009 vest subject to a total shareholder return tsr performance condition half of 
an award is tested against constituents of the ftse 100 index excluding investment trusts and the other half against a comparator 
group of oil and gas companies performance is measured over a fixed three year period starting on 1 january prior to grant and  
an individual must normally remain in employment for threeyears from grant for the shares to vest no dividends are paid over 
the vesting period there are further details of psp award measurement in the directors’ remuneration report on page 94 
the shares outstanding under the psp are as follows 
2009
psp shares
2009 average 
weighted 
share price at 
grant  
p 
2008
psp shares
2008 average 
weighted share 
price at grant 
p
outstanding at 1 january 3856913 5529 4451474 2933
granted 1572567 7858 1328692 9176
exercised during the year 1095350 3541 1747750 1875
forfeitedexpired during the year 28644 7803 175503 3658
outstanding at 31 december 4305486 6870 3856913 5529
the inputs of the option valuation model were 
2009 average 
weighted share 
price at grant 
p
2008 average 
weighted share 
price at grant 
p
risk free interest rate 19 pa 4447 pa
expected volatility 54 3941
dividend yield 08 pa 0708 pa
the expected life is the period from date of grant to vesting expected volatility was determined by calculating the historical volatility 
of the company’s share price over a period commensurate with the expected life of the awards the weighted average fair value  
of the awards granted in 2009 was 5799p per award 2008 6539p 
the company recognised a total expense of £23 million 2008 £18 million in respect of the psp  financial statements 
notes to the company financial statements continued
152 tullow oil plc 2009 annual report and accounts  
note 11 sharebased payments continued
2005 deferred share bonus plan dsbp 
under the dsbp the portion of any annual bonus above 75 of the base salary 60 for bonuses paid for 2007 and earlier years of  
a senior executive nominated by the remuneration committee is deferred into shares dsbp awards normally vest following the end
of three financial years commencing with that in which the award is granted  
the shares outstanding under the dsbp are as follows 
2009 
dsbp 
shares
2009  
share price  
at grant 
2008  
dsbp  
shares 
2008 
share price 
at grant
outstanding at 1 january 200633 5079p 184254 3754p
granted 135291 7780p 96166 6295p
exercised during the year 104467 3960p 79787 3485p
outstanding at 31 december 231457 7163p 200633 5079p
the inputs of the option valuation model were 
dividend yield 10 pa  10 pa
the expected life is the period from the date of grant to the vesting date the fair value of the awards granted in 2009 was 7602p per 
award 2008 6119p 
the company recognised a total expense of £05 million 2008 £05 million in respect of the dsbp 
2000 executive share option scheme esos 
the only share option scheme operated by the company during the year was the 2000 esos options normally only become 
exercisable from the third anniversary of the date of the grant and if the performance condition has been met the awards are tested 
against constituents of an index and 100 of awards will vest if the company’s tsr is above the median of the index over three years 
following grant for awards from march 2008 the index is the ftse 100 index excluding investment trusts for awards before march 
2008 the index is the ftse 250 index excluding investment trusts 
options granted under the previous 1998 esos had all been exercised at 31 december 2009 all awards under the 1998 esos  
were made prior to 7 november 2002 and therefore under the frs transitional provisions they have not been accounted for in 
accordance with frs 20 – sharebased payments 
the following table illustrates the number and weighted average exercise prices waep of and movements in share options under 
the 1988 esos the 1998 esos and the 2000 esos during the year 
2009
number
2009 
waep  
p 
2008
number
2008
waep 
p
outstanding as at 1 january 14688105 2821 19216684 1660
granted during the year 3155150 7810 2475251 6473
exercised during the year 4486268 1684 6926931 915
forfeitedexpired during the year 99146 6431 76899 2104
outstanding at 31 december 13257841 4366 14688105 2821
exercisable at 31 december 5700412 1778 7971074 1215
the weighted average share price at exercise for options exercised in 2009 was 10005p 2008 8543p 
options outstanding at 31 december 2009 had exercise prices of 630p to 11790p and remaining contractual lives of one to 10 years   financial statements
wwwtullowoilcom 153
the fair values were calculated using a proprietary binomial valuation model the principal inputs to the options valuation  
model were 
risk free interest rate 1925 pa
expected volatility 49
dividend yield 0508 pa
employee turnover 5
early exercise at rates dependent upon potential gain from exercise
expected volatility was determined by calculating the historical volatility of the company’s share price over a period commensurate 
with the expected lifetime of the awards  
the fair values and expected lives of the options valued in accordance with frs 20 were 
award date 
weighted 
average 
exercise 
price 
p 
weighted 
average 
fair 
value
p
weighted
average 
expected 
life from 
grant date 
years
jan – dec 2007 3969 1234 48
jan – dec 2008 6473 2058 43
jan – dec 2009 7810 2835 40
the company recognised a total expense of £nil 2008 £nil in respect of the esos 
uk  irish share incentive plans sips 
the sips were launched at the beginning of 2004 these are all employee plans which have been set up in the uk and ireland  
that enable employees to save out of salary up to prescribed monthly limits contributions are used by the plan trustees to acquire 
tullow shares ‘partnership shares’ the company makes a matching contribution to acquire a matching number of tullow shares 
‘matching shares’ on a oneforone basis at the end of each three month accumulation period matching shares are subject to  
time based forfeiture over three years on leaving employment in certain circumstances or if the related partnership shares are sold 
the fair value of a matching share is its market value at the start of the accumulation period 
for the uk plan partnership shares are purchased at the lower of the market values at the start of the accumulation period and
the purchase date which is treated as a three month share option for ifrs 2 purposes for the irish plan shares are bought at  
the market price at the purchase date which does not result in any ifrs 2 accounting charge 
matching shares vest three years after grant and dividends are paid to the employee during this period 
matching shares vest three years after grant and dividends are paid to the employee during this period the company recognised 
a total expense of £01 million 2008 £01 million for the matching shares and £01 million 2008 £01 million for the partnership shares  financial statements 
notes to the company financial statements continued
154 tullow oil plc 2009 annual report and accounts  
note 12 related party transactions 
the directors of tullow oil plc are considered to be the only key management personnel as defined by ias 24 – related  
party disclosures  
2009
£m
2008
£m
shortterm employee benefits 41 46
post employment benefits 05 03
amounts awarded under longterm incentive schemes 12 10
share based payments 28 23
86 82
shortterm employee benefits 
these amounts comprise fees paid to the directors in respect of salary and benefits earned during the relevant financial year 
plus bonuses awarded for the year 
post employment benefits 
these amounts comprise amounts paid into the pension schemes of the directors 
amounts awarded under longterm incentive schemes 
these amounts relates to the shares granted under the annual bonus scheme that is deferred for three years under the  
deferred share bonus plan dsbp 
share based payments 
this is the cost to the group of directors’ participation in sharebased payment plans as measured by the fair value of options  
and shares granted accounted for in accordance with frs 20 ‘sharebased payments’ 
there are no other related party transactions further details regarding transactions with the directors of tullow oil plc are 
disclosed in the remuneration report on pages 91 to 100 
note 13 subsequent events 
since the balance sheet date tullow has continued to progress its exploration development and business growth strategies 
in january 2010 the group announced the successful placing and subsequent issue of a total of 80431796 new ordinary shares  
with institutions at 1150 pence per share this represents an increase of approximately 999 in tullow’s existing issued share 
capital these shares are credited as fully paid and rank pari passu in all respects with existing ordinary shares of 10 pence each in 
the capital of the company including the right to receive all dividends and other distributions declared made or paid on or in respect 
of such shares after the date of issue 
in january 2010 the group announced that it had exercised its preemption rights over heritage oil’s ugandan sale for up to  
15 billion £10 billion in addition two new potential partners have been identified cnooc and total and it is expected that each 
partner will acquire a one third interest in each of the three ugandan blocks the group expects the transaction to be signed in the 
coming weeks 
in january 2010 the group announced that the appraisal well tweneboa 2 proved up a combined oil and gascondensate column  
of at least 35 metres this has confirmed tweneboa as a major oil and gascondensate field  financial statements
financial statements 
five year financial summary 
wwwtullowoilcom 155
2009
£m
2008 
£m 
2007  
as restated 
£m 
2006
£m
2005
£m
group income statement 
sales revenue 5823 6917 6392 5788 4452
cost of sales 3981 3661 3537 2613 2431
gross profit 1842 3256 2855 3175 2021
administrative expenses 495 430 316 225 138
profitloss on disposal of subsidiaries 101 2132 06 – –
profit on disposal of oil and gas assets 31 306 – – 360
exploration costs written off 528 2267 642 325 258
operating profit 951 2997 1891 2625 1985
lossprofit on hedging instruments 372 429 293 157 02
finance revenue 13 39 31 30 44
finance costs 389 472 487 180 242
profit from continuing activities before taxation 203 2993 1142 2632 1785
taxation  18 731 616 1059 654
profit for the year from continuing activities 185 2262 526 1573 1131
earnings per share  
basic – stg p 187 3086 710 2423 1750
diluted – stg p 185 3049 696 2367 1720
dividends paid 481 432 394 325 146
group balance sheet 
noncurrent assets 27457 24339 18474 17553 8976
net current assets liabilities 760 1477 675 2909 713
total assets less current liabilities 28217 22862 17799 14644 8263
long term liabilities 12958 9770 10673 6979 4373
net assets 15259 13092 7126 7665 3890
called up equity share capital 804 733 720 652 647
share premium 1678 1607 1284 1261 1230
other reserves 4276 5822 2101 3054 606
retained earnings 8237 4677 2867 2698 1407
equity attributable to equity holders of the parent 14995 12839 6972 7665 3890
minority interest 264 253 154 – –
total equity 15259 13092 7126 7665 3890
 the 2007 comparatives have been restated due to an asset held for sale being reclassified during 2008  supplementary information 
commercial reserves and contingent resources unaudited working interest basis 
year ended 31 december 2009  
156 tullow oil plc 2009 annual report and accounts 
africa europe south asia total 
oil 
mmbbl 
gas 
bcf 
oil
mmbbl
gas
bcf
oil
mmbbl
gas
bcf
oil 
mmbbl 
gas
bcf
petroleum
mmboe
commercial reserves
1
1 january 2009 2565 123 18 1914 – 1309 2583 3346 3141
revisions 130 123 04 220 – – 126 97 110
disposals – – – – – 203 – 203 34
production  139 12 02 304 – 116 141 432 213
31 december 2009 2556 234 12 1390 – 990 2568 2614 3004
contingent resources
2
1 january 2009 3016 11105 – 1318 – 162 3016 12585 5113
revisions 836 71 – 169 – – 836 98 820
31 december 2009 3852 11176 – 1149 – 162 3852 12487 5933
total 
31 december 2009 6408 11410 12 2539 – 1152 6420 15101 8937
1  proven and probable commercial reserves are based on a group reserves report produced by an independent engineer reserves estimates for each field  
are reviewed by the independent engineer based on significant new data or a material change with a review of each field undertaken at least every two years 
2  proven and probable contingent resources are based on both tullow’s estimates and the group reserves report produced by an independent engineer 
the group provides for depletion and amortisation of tangible fixed assets on a net entitlements basis which reflects  
the terms of the production sharing contracts related to each field total net entitlement reserves were 2654 mmboe  
at 31 december 2009 31 december 2008 1145 mmboe 
contingent resources relate to resources in respect of which development plans are in the course of preparation or further 
evaluation is under way with a view to development within the foreseeable future  supplementary information
supplementary information 
licence interests 
wwwtullowoilcom 157
current exploration development and production interests 
licence  fields 
area 
sq km
tullow  
interest  operator other partners 
africa 
angola 
block 106   3839 5000 tullow sonangol pp prodoil force petroleum 
congo brazzaville  
m’boundi  m’boundi 146 1100 eni   snpc  
congo drc 
block i
1
   3700 4850 tullow heritage cohydro  
block ii
1
   28704850 tullow heritage cohydro 
côte d’ivoire 
ci26 special area “e”   espoir 235 2133 cnr petroci  
ci102   865 3150 edison kufpec petroci  
ci103    2603 4500
2
tullow anadarko
2
 petroci  
ci105    2070 2237 anadarko  petroci al thani 
equatorial guinea 
ceiba   ceiba 70 1425 hess  gepetrol  
okume complex okume oveng  
ebano  elon 
192 1425 hess gepetrol  
gabon 
avouma  avouma 52750 vaalco addax sinopec sasol sojitz petroenergy 
azobe marin
3
   1737 6000 tullow mpdc gabon  
ebouri  ebouri 15750 vaalco  addax sinopec sasol sojitz petroenergy 
echira  echira 764000 perenco  
etame  etame 49 750 vaalco  addax sinopec sasol sojitz petroenergy
kiarsseny marin   5442 4750 tullow addax sinopec sonangol pp 
limande  limande 104000 perenco   
niungo  niungo 964000 perenco   
nziembou   10274000 perenco  
oba  oba 44500
4
perenco  aic petrofi  
obangue  obangue 40375
4
addax sinopec  aic petrofi  
omko  omko 16750
4
maurel  prom  aic petrofi  
onal  onal 46750
4
maurel  prom  aic petrofi  
tchatamba marin  tchatamba marin 30 2500 perenco  oranje nassau  
tchatamba south  tchatamba south 40 2500 perenco  oranje nassau  
tchatamba west  tchatamba west 25 2500 perenco  oranje nassau 
tsiengui  tsiengui 26375
4
addax sinopec aic petrofi  
turnix  turnix 182750 perenco   
backin rights
5
arouwe   4414750
6
perenco  
azobe marin
3
   1737 500 tullow mpdc gabon  
de7 formerly ombena   2188 500
6
perenco aic petrofi 
dussafu marin  2780500
6
harvest natural 
res 
panpetroleum 
etame marin   2972 750 vaalco addax sinopec sasol sojitz petroenergy 
etekamba   773500
6
maurel  prom  
maghena   631375
6
addax sinopec  
nyanga mayumbe   2831 375
6
maurel  prom  
omoueyi   4133750
6
maurel  prom   supplementary information 
licence interests continued
158 tullow oil plc 2009 annual report and accounts  
current exploration development and production interests continued
licence  fields 
area 
sq km
tullow   
interest   operator other partners 
africa continued 
ghana 
deepwater tano   jubilee tweneboa 1108 4995  tullow kosmos anadarko gnpc sabre  
west cape  
three points  
jubilee 1497 2290  kosmos  anadarko gnpc eo group sabre  
jubilee field  
unit area
7
jubilee 
odum 
3470  tullowkosmos
8
 anadarko gnpc sabre eo group  
liberia 
lb15   3400 2500  anadarko  repsol woodside  
lb16   3225 2500  anadarko  repsol woodside 
lb17   3150 2500  anadarko  repsol woodside 
madagascar 
block 3109   11050 5000  tullow madagascar oil
9
block 3111    9050 10000  tullow  
mauritania 
block 1   3936 3800  dana  gdf roc oil  
block 2   4898 8378  tullow dana roc oil 
psc – area a   6969 2430  petronas  premier kufpec roc oil  
 block 3     
 blocks 4  5 shallow     
psc – area b   8028 2160  petronas  premier kufpec roc oil  
 blocks 4  5 deep     
psc area b – chinguetti 
 eea 
chinguetti 929 1901  petronas  smh premier kufpec roc oil  
block 6   4023 2242  petronas  roc oil 
block 7   6676 1620  dana  petronas gdf roc oil 
namibia 
production licence 002  kudu 4567 3100
10
tullow gazpromnamcor jv itochu  
senegal 
st louis   4195 6000  tullow dana petrosen  
sierra leone  
sl0607  sl07   5493 1000  anadarko repsol woodside 
tanzania 
lindi   7315 5000  tullow  aminex solo  
mtwara   5045 5000  tullow  aminex solo  
uganda 
block 1  jobirii 4285 5000  heritage
11
block 2 mputa waraga 
kasamene 
3900 10000  tullow  
block 3a  kingfisher 1991 5000  heritage
11
1 licences awaiting presidential ratification the validity of the original licence was disputed during 2008 however tullow is working closely with the government  
of congo drc and continues to be confident of its title to these blocks
2 farm out to anadarko still awaiting government signature 
3 tullow has ‘backin rights’ on this licence as well as a working interest 
4 tullow’s interest in this licence is held through its 50 holding in tulipe oil sa 
5 backin rights tullow has the option in the event of a discovery to acquire varying interests in these licences 
6 tullow has the option to acquire an interest in this licence through its 50 holding in tulipe oil sa 
7 a unitisation agreement has been agreed by the partners of the west cape three points and deepwater tano licences for the area covering the jubilee  
field phase 1 development area 
8  tullow is the unit operator and kosmos is the technical operator for phase 1 of the jubilee development 
9 madagascar oil has given notice of its intention to withdraw from this licence 
10 interest subject to ministry and partner approvals 
11 tullow has agreed the purchase of heritage’s interest in these blocks the deal is awaiting government approval  supplementary information
wwwtullowoilcom 159
licence  unit area blocks fields 
area 
sq km
tullow 
interestoperator other partners 
europe 
united kingdom 
cms area 
p450 4421a boulton b  f 77 950 conocophillips  gdf  
p451 4422a  murdoch 121 3400 conocophillips gdf  
 4422b boulton h
12
 watt
12
p452  4423a part murdoch k
12
  48 691 conocophillips  gdf 
p453 4428b ketch 8510000tullow  
p516 4426a schooner
13
 999705tullow gdf 
p1006  4417b munro
14
 602000gdf conocophillips  
p1058  4418b  129 2250 conocophillips gdf  
 4423b kelvin   
p1139 4419b  60 2250 conocophillips gdf  
p1437 4413a  192 2500 gdf  eon endeavour 
cms iii unit
15
 4417a part 
4417c part 
4421a part 
4422a part 
4422b part 
4422c part 
4423a part 
boulton h hawksley 
mcadam murdoch k 
watt 
1410 conocophillips  gdf 
munro unit
15
 4417b munro 1500 conocophillips  gdf  
 4417a    
schooner unit
15
 4426a schooner 9035 tullow gdf faroe petroleum  
 4330a    
thameshewett area 
p007 4924af1  
excl gawain 
 16310000tullow  
 4924af1 
gawain 
gawain
16
 5000perenco   
p037 4928a thames yare bure 90 6667 perenco centrica 
 4928b deben wensum   
 4928apart thurne 8696tullow centrica  
p039 5304d wissey 296250tullow first oil faroe petroleum  
p060 5026a orwell 2710000tullow  
p105 4929a part gawain
16
 175000perenco  
p786 5303c horne  8 5000 tullow centrica  
p852 5304b horne  wren 175000tullow centrica  
p1445 4828c 5203a 428 10000 tullow 
 5204b 5205b    
gawain unit
15
4924f1part gawain 5000 perenco  
 4929a part     supplementary information 
licence interests continued
160 tullow oil plc 2009 annual report and accounts  
current exploration development and production interests continued
licence   fields 
area 
sq km
tullow  
interest operator other partners 
europe continued 
netherlands 
d9   149 2500 tullow  xtogto gas plus ebn  
e10   401 3200 tullow xto gto ebn  
e11   4016000 tullow ebn  
e13a   234 5000 tullow ebn gas plus  
e13b   168 1000 gdf  wintershall ebn dyas 
e14   403 3200 tullow xto gto ebn  
e15c   343 2000 tullow  xto gto gas plus ebn 
e18b   192 3200 tullow xto gto ebn  
l12c   30 3000 tullow ebn nuon wintershall 
l12d   225 3000 tullow ebn nuon wintershall 
l15d   62 3000 tullow ebn nuon wintershall 
portugal 
lavagante
17
   3089 8000 tullow partex galp energia  
santola
17
   3065 8000 tullow partex galp energia  
gamba
17
   2945 8000 tullow partex galp energia 
south asia 
bangladesh  
block 9  bangoralalmai 1770 3000 tullow niko bapex 
pakistan  
bannu west   1230 4000 tullow ogdcl mgcl sel 
block 28   6200 9500 tullow ogdcl  
kalchas   2068 3000 ogdcl  mgcl  
kohat   1107 4000 ogdcl  mgcl sel  
kohlu   24593000 ogdcl  mgcl 
sara dpl
18
  sara 83 3818 tullow ogdcl pol attock  
suri dpl
18
  suri 24 3818 tullow ogdcl pol attock 
south america 
french guiana 
guyane maritime   32120 3950 tullow shell
19
 total
19
 northpet investments 
guyana 
georgetown block   8400 3000 repsol  ypf cgx resources  
suriname  
coronie
20
   25924000
21
paradise oil   
uitkijk   7574000
21
paradise oil   
12 refer to cms iii unit for field interest 
13 refer to schooner unit for field interest 
14 refer to munro unit for field interest 
15 for the uk offshore area fields that extend across more than one licence area with differing partner interests become part of a unitised area the interest  
held in the unitised field area is split amongst the holders of the relevant licences according to their proportional ownership of the field the unitised areas  
in which tullow is involved are listed in addition to the nominal licence holdings 
16 refer to gawain unit for field interest 
17 tullow is to assign its interest in this licence to existing partners 
18 tullow has agreed the sale of these interests the deal is awaiting completion 
19 shell and total farmin deals awaiting final approval 
20 tullow will acquire its interest on completion of work programme 
21 tullow has a 40 title interest 365 economic interest  supplementary information
supplementary information 
shareholder information 
wwwtullowoilcom 161
shareholder enquiries  
all enquiries concerning shareholdings including notification  
of change of address loss of a share certificate or dividend 
payments should be made to the company’s registrars 
computershare investor services plc whose contact  
details are as follows 
computershare investor services plc  
the pavilions  
bridgwater road  
bristol  
bs99 6zz  
contact wwwinvestorcentrecoukcontactus  
telephone number – uk shareholders 0870 703 6242
telephone number – irish shareholders 00 353 1 216 3744
telephone number – other shareholders 00 44 870 703 6242
a range of shareholder frequently asked questions and practical 
help on transferring shares and updating details is available 
online in the shareholder services section located in the 
investors area of the tullow website wwwtullowoilcom  
computershare online enquiry service  
computershare provides a range of services through its online 
portal investor centre which can be accessed free of charge  
at wwwinvestorcentrecouk this service accessible from 
anywhere in the world enables shareholders to check details  
of their shareholdings or dividends download forms to  
notify changes in personal details and access other  
relevant information  
payment of dividends  
shareholders can have their dividends paid directly into  
a uk sterling or irish euro bank account and have the tax 
voucher sent directly to their registered address you can 
register your account details in investor centre or  
alternatively download a dividend mandate form 
overseas shareholders who wish to have their dividends paid  
in a local currency can use the global payments service that 
computershare has established details of the service can be 
accessed in the shareholder services section of the investors 
area of the tullow website wwwtullowoilcom  
share dealing service  
a telephone share dealing service has been established for 
shareholders with computershare for the sale and purchase  
of tullow oil shares shareholders who are interested in using 
this service can obtain further details by calling the appropriate 
telephone number below  
uk shareholders 0870 703 0084
irish shareholders 00 353 1 41 270 3203
other shareholders 00 44 141 270 3203
further details of the terms applying to the service can also be 
obtained from the shareholder services section of the investors 
area of the tullow website wwwtullowoilcom 
 kindly note this service cannot be offered to residents of any territories where 
such offers are not permitted by local securities regulations or other regulatory 
requirements it is the responsibility of shareholders outside the european union 
who wish to use this service to ensure compliance with local law and regulatory 
requirements if you are in any doubt you should consult an appropriate 
professional advisor  
electronic communication  
shareholders have the option to receive shareholder 
communications including annual reports and notices of  
meetings electronically tullow actively supports woodland trust 
the uk’s leading woodland conservation charity computershare 
together with woodland trust has established etree an 
environmental programme designed to promote electronic 
shareholder communications under this programme the 
company makes a donation to etree for every shareholder  
who registers for electronic communication to register for  
this service simply visit wwwetreeukcomtullowoilplc with  
your shareholder number and email address to hand  
once registered shareholders will be emailed when  
an annual report or notice of meeting is available for  
viewing on the tullow website  
shareholder security 
shareholders are advised to be cautious about any unsolicited 
financial advice offers to buy shares at a discount or offers of 
free company reports more detailed information can be found  
at wwwmoneymadeclearfsagovuk and in the shareholder 
services section of the investors area of the tullow website 
wwwtullowoilcom  
sharegift 
if you have a small number of shares whose value makes  
it uneconomical to sell you may wish to consider donating them 
to sharegift any shares donated to sharegift will be aggregated 
and sold when possible with the proceeds donated to a wide 
range of uk charities the relevant share transfer form may  
be obtained from computershare further information about  
the scheme is available at wwwsharegiftorg  
financial calendar  
financial year end 31 december 2009
2009 fullyear results announced 10 march 2010
annual general meeting 12 may 2010
interim management statement 12 may 2010
2009 final dividend payable 21 may 2010
2010 halfyearly results announced 25 august 2010
2010 interim dividend payable november 2010
interim management statement november 2010 supplementary information 
contacts 
162 tullow oil plc 2009 annual report and accounts 
secretary  registered office  
graham martin  
tullow oil plc 
3rd floor 
building 11 
chiswick park 
566 chiswick high road 
london w4 5ys  
contact details  
tullow oil plc  
3rd floor  
building 11  
chiswick park  
566 chiswick high road  
london w4 5ys  
tel 44 20 8996 1000  
fax 44 20 8994 5332  
tullow oil plc  
5th floor 
block c 
central park 
leopardstown  
dublin 18  
ireland  
tel 353 1 213 7300  
fax 353 1 293 0400 
tullow oil plc 
11th floor  
convention tower 
cnr heerengracht 
coen steytler avenue 
cape town 8001 
south africa  
tel 27 21 400 7600  
fax 27 21 400 7660 
tullow overseas holdings bv 
scheveningseweg 58 
2517 kw 
the hague 
the netherlands 
tel 31 70 338 7546 
fax 31 70 338 9136 
email general informationtullowoilcom
email investor relations irtullowoilcom 
website wwwtullowoilcom
registrars  
computershare investor services plc 
the pavilions 
bridgwater road 
bristol bs99 6zz 
stockbrokers  
rbs hoare govett limited 
250 bishopsgate 
london ec2m 4aa 
merrill lynch international  
2 king edward street  
london ec1a 1hq  
davy 
davy house 
49 dawson street  
dublin 2  
ireland  
auditors  
deloitte llp  
chartered accountants  
hill house  
2 new street square  
london ec4a 3bz  
legal advisers  
dickson minto ws 
royal london house  
2225 finsbury square  
london ec2a 1dx   supplementary information
index 
wwwtullowoilcom 163
accounting policies 111
disposals 138
advisers 162
africa 6 32
audit committee 86
auditors’ remuneration 119
balance sheet 109 144
bangladesh 52
bank loans 148
basis of accounting 112 145
basis of consolidation 112
board of directors 80
operational highlights 5
business model 24
called up equity share capital  
and share premium account 136 150
capital commitments 141
capital expenditure 59
cash and cash equivalents 115 126
cash flow statement 110
cash flows from operating  
activities 137
chairman’s introduction  
to corporate governance 78
chairman’s statement 14
chief executive’s review 22
commercial reserves 113 156
congo brazzaville 47
congo drc 36
contact details 162
contingent liabilities 141
corporate governance 17 78
corporate responsibility 68
côte d’ivoire 47
critical accounting judgements 116
debtors 147
decommissioning costs 114 134
deferred tax 147
depletion and amortisation 113
directors’ remuneration report 91
dividends 4 16 58 122 147
earnings per ordinary share 4 123
effective interest method 115
environmental health and safety 28 29 72
equatorial guinea 47
equity instruments 115
europe 51
exploration and appraisal 26 
exploration evaluation and 
production assets 113
finance costs and debt 58 114 120 145
finance review 56
financial assets 115
financial instruments 114 131
financial liabilities 115 116 128 145
financial results 4 57
five year financial summary 155
foreign currencies 113 145
french guiana 53
gabon 47
ghana and equatorial atlantic 37
glossary 164
going concern 90
guyana 53
hedging 58
how we are organised 8
how we create value 10
income statement group 108
independent auditors’ report 107 143
intangible exploration and  
evaluation assets 123
inventory 113 126
investments 125 145 146
jubilee special feature 39
key financial metrics 57
key performance indicators 18
key producing assets 32 50
leases 115
licence interests 157
loans and receivables 115
loans from subsidiary  
undertakings 149
mauritania 47
minority interest 137
namibia 47
netherlands 52
nominations committee 88
noncurrent assets held for sale 112
notes to the financial statements 117 145
obligations under finance leases 134
operating cash flow and capital 
investment 55 59
operating lease arrangements 141
operating profit 119
operations review 32
other current assets 126
other reserves 136 151
other statutory information 101
overunderlift 113 
pakistan 52
pensions 94 114 142
people 74
portugal 52
production and development 28
property plant and equipment 114 124
provisions 134
reconciliation of changes in equity 135
related party transactions 142 154
remuneration committee 88 91
reserves and resources 11 18 156
rest of the world 7 50
revenue 4 57 113
risk management 8 16 60 62 89
segmental reporting 117
senegal 47
senior management committee 8
share issue expenses and share 
premium account 114 145
sharebased  
payments 115 139 145 151
shareholder information 161
shareholder relations 89
shareholders’ funds 150
south america 53
south asia 52
staff costs 120
statement of comprehensive  
income and expense 108
statement of directors’  
responsibilities 106
strategy 24
subsequent events 142 154
summary cash flow 59
suriname 53
tanzania 47
taxation 58 114 145
taxation on profit on  
ordinary activities 121
total revenue 118
total shareholder return 19 25 95
trade and other creditors 147
trade and other payables 127
trade receivables 126
uganda 33
uk 51
values 70
vision 24
where we operate 6
working interest production 11 18 57 supplementary information 
glossary 
164 tullow oil plc 2009 annual report and accounts 
api  measure of crude oil quality  
agm  annual general meeting  
bbl  barrel  
bcf  billion cubic feet  
boe  barrels of oil equivalent  
boepd barrels of oil equivalent per day  
bopd  barrels of oil per day  
cms  caister murdoch system  
cms iii  a group development of five satellite fields  
linked to cms  
cr  corporate responsibility  
cnooc china national offs ore oil corporation
co2 carbon dioxide 
drc  democratic republic of congo  
dsbp  deferred share bonus plan  
ea  exploration and appraisal  
ebitda  earnings before interest tax  
depreciation and amortisation  
ehs  environment health and safety  
eia environmental impact assessment 
epa environmental protection agency 
erc  energy resource consultants  
esia  environmental and social impact assessment 
esos  executive share option scheme  
feed  front end engineering and design  
fpso  floating production storage and  
offloading vessel 
frc  financial reporting council  
frs  financial reporting standard  
ftg full tensor gravity gradiometry 
ftse 100  equity index whose constituents are  
the 100 largest uk listed companies by  
market capitalisation  
ftse 250 equity index whose constituents are the next  
250 largest uk listed companies after the top 100  
gelt global exploration leadership team 
gnpc  ghana national petroleum corporation  
group  company and its subsidiary undertakings  
hs  health and safety  
hipo  high potential incident  
hnbs  hewitt new bridge street  
hr  human resources  
ias  international accounting standard  
ifric  international financial reporting  
interpretations committee  
ifrs  international financial reporting standards  
ims  information management system  
ipt integrated project team 
iso  international organization for standardization  
km kilometres  
kpi  key performance indicator  
libor  london interbank offered rate  
lti  lost time incident  
ltifr  lti frequency rate measured in  
ltis per million hours worked  
mmbbl  million barrels  
mmbo  million barrels of oil  
mmboe  million barrels of oil equivalent  
mmscfd  million standard cubic feet per day 
ogp international association of oil  gas producers  
pd  production and development  
paye  pay as you earn  
prt  petroleum revenue tax  
psc  production sharing contract  
psp  performance share plan  
sct  supplementary corporation tax  
sip  share incentive plan  
smc senior management committee 
sq km square kilometres  
tcf trillion cubic feet 
toes tullow oil environmental standards 
tsr  total shareholder return  
vat  value added tax  
waep  weighted average exercise price  
h africa’s leading
independent oil company
tullow oil plc is a global independent oil
and gas company with over 90 licences in
25 countries the group is headquartered
in london and employs nearly 900 people
worldwide tullow is listed on the london
and irish stock exchanges and is
a constituent of the ftse 100 index
we have a long history in africa and the
continent has been the major focus of
our activity and investment in recent years
as a result we are now within sight of
delivering first commercial production
from two new oil basins combined with
a highimpact exploration portfolio across
the continent and an approach to corporate
responsibility that aims to create shared
prosperity  tullow is establishing itself as
africa’s leading independent oil company
for more information visit wwwtullowoilcom
ecommunications
• all documents on the website are available to view without any particular software requirement other than the
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kingdom sefadazi lead stevedore
takoradi ghana
get more online at tullowoil
we are committed to improving our disclosure and communication
to increase the understanding of our business our policy is to be open
transparent uniform and timely
we will continue to upgrade
our corporate website
additional features
we will be incorporating new
features including the ability
to customise the site for
individual users
new content
we will be adding video
new content and an improved
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more interactivity
we will be upgrading
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site more userfriendly
new reporting centre tullowoilreports
we are creating a central hub for our main corporate reports which is being launched as part of the online
2009 corporate responsibility report in may 2010
2009 annual report and accounts
we publish an online annual
report and this year will be
including a number of new
tools including the ability to
create your own report visit
httpara2009tullowoilcom
2009 corporate responsibility report
the 2009 corporate
responsibility report will
be published in may 2010
we will also publish an
online version visit
wwwtullowoilreportscom
2010 full fact book
we publish a fact book twice
a year in march and august
to coincide with results
reporting it contains lots
of additional operational
information to complement
the results announcement
and presentation tullow oil plc
3rd floor building 11
chiswick park
566 chiswick high road
london w4 5ys
tel 44 20 8996 1000
fax 44 20 8994 5332
email informationtullowoilcom
website wwwtullowoilcom
this report is produced on material which contains 50 recycled and deinked pulp from post consumer waste
the remaining pulp contains fsc credited material from wellmanaged forests
designed by black sun plc printed by st ives westerham press
tullow oil plc 2009 annual report and accounts
2009 annual report and accounts
tullow oil plc
africa’ s
lead i ngin de pe n d e nt
o i l com pany


Summary:
 wwwtullowoilcom 5
s trengthened
capital structure
a us2 billion refinancing
was secured in march
2009 and a further
us250 million corporate
facility was finalised in
december 2009 gross
proceeds of £13 billion
were raised from two
successful equity
placings in january
2009 and january 2010
coupled with the
anticipated ugandan
farmdown the group
will have successfully
restructured its balance
sheet and put in place a
more appropriate capital
structure for the
mediumterm delivery
of its growth strategy
directors’ report group overview
finance review page 56
operational highlights
first oil 2010
jubilee on target to deliver
jubilee phase 1 is on time and within its us31 billion budget
first oil is expected 40 months after the field was discovered
setting a new benchmark for deepwater development
uganda
preemption and farmdown
good progress is being made to align
interests in the lake albert rift basin and
facilitate an accelerated development plan
87 
exploration success
there were 13 discoveries
from 15 wells in 2009
highlights included
the 300 million barrel
jobirii discovery in
uganda the tweneboa
discovery in ghana and
the successful venus b1
exploration well in
sierra leone
uganda operations review page 33
exploration on page 26
jubilee case study page 39
66 million
hoursworked
good environment health and
safety performance delivered
in a busy year across tullow
corporate responsibility page 68
drilling operations uganda local flora ghana
atwood hunter rig offshore ghana
tim o’hanlon vice president africa process module installation fpso singapore