Girish Mahajan (Editor)

Tullow Oil

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Public limited company

Aidan Heavey (1985–)

1.607 billion USD (2015)


Oil and gas

London, United Kingdom

Aidan Heavey

Traded as

Oil and gas exploration

Key people
Simon Thompson (Chairman) Aidan Heavey (CEO)

Operating income
$(1,093.7) million (2015)

Stock price
TLW (LON) 206.58 GBX -1.62 (-0.78%)24 Mar, 5:07 PM GMT - Disclaimer

Hardman Resources Pty Limited


Tullow Oil plc is a multinational oil and gas exploration company founded in Tullow, Ireland with its headquarters in London, United Kingdom.


It has interests in over 150 licenses across 25 countries with 67 producing fields and in 2012 produced on average 79,200 barrels of oil equivalent per day. Its largest activities are in Africa and the Atlantic Margins, where it has discovered new oil provinces in Ghana, Uganda, Kenya and French Guiana.

Tullow’s main production comes from six countries in Africa as well as the Southern North Sea and Asia. Ghana's offshore Jubilee oil field which was discovered in 2007 and started production in December 2010 is Tullow's largest discovery.

As at 31 December 2012 Tullow had total group reserves and resources of 1.2 billion barrels of oil equivalent including commercial reserves of 388 million barrels of oil equivalent. Tullow's 2012 exploration and appraisal drilling success rate was 74% around double the industry average; this success has been ascribed to its drilling in geological formations similar to those in which oil has been discovered at other locations. For example, a formation off the coast of South America which is similar to formations in West Africa.

Tullow has a primary listing on the London Stock Exchange and is a constituent of the FTSE 250 Index. It has a market capitalisation of approximately £2.75 billion as of 15 July 2015. It has secondary listings on the Ghana Stock Exchange and Irish Stock Exchange.


The Company was founded by Aidan Heavey in 1985 in Tullow, Ireland as a gas exploration business operating in Senegal.

"It started in a small town called Tullow, about 35 miles south of Dublin, Ireland. In the 80s there were loads of companies starting off in the North Sea and Irish Celtic Sea. I was talking to a friend of mine in the bank one day and he was talking about small oil fields in Africa, which had been left behind by the majors and had no-one to work them. That is where the idea came from. I contacted another friend of mine in the World Bank who told me about a project in Senegal. They had some small gas fields that they were trying to get people to develop, so I setup Tullow Oil to rework those old fields. I knew nothing about the oil and gas industry at the time, which made it more challenging. No one thought Tullow would succeed because of my lack of knowledge of the industry, no major backers and I was starting a company in a country with no oil industry." (Aiden Heavey, CEO)

Following the signing of a licence agreement in Senegal in 1986, gas production and sales commenced in 1987. The same year Tullow listed its shares on the London Stock Exchange and Irish Stock Exchange - Tullow joined the FTSE 100 index in September 2007.

In 1988, Tullow expanded its operations into the UK by acquiring exploration acreage and proven gas fields. In 1989, Tullow was awarded its first onshore UK licence and acquired exploration acreage in Spain, Italy and South Yemen.

In 1990, Tullow signed its first license agreement in Pakistan, laying the foundations for the Group's South Asia portfolio of assets. Gas was discovered at the Sara field in Pakistan in 1994 and eventually brought on stream in 1999. New countries were added throughout the decade with licenses acquired in Bangladesh, India, Côte d'Ivoire, Egypt and Romania. Activities were relinquished in four countries during the period.

2000 saw the beginning of a period of an accelerated pace of activity for Tullow, starting with the announcement of a £201 million acquisition of producing gas fields and related infrastructure in the UK Southern North Sea from BP. This proved to be a catalyst for the Group's positioning as a leading player in the CMS and Thames/Hewett areas. In 2000, Tullow re-registered in the UK.

2001 to 2003 was the first defining and transformational period for the Group with the integration of its 2000 UK acquisition and growing production in core areas, as a result of re-investment in exploration and development activities. Strong increases in sales and profits were achieved and Tullow focused its financial resources and management attention on offshore UK, West Africa and South Asia.

The Group more than doubled in size in 2004, mainly as a result of the Energy Africa acquisition which was completed in May that year for $570m. Overall Tullow spent US$1 billion on acquisitions and investments in 2004, creating a strong portfolio of international exploration, production and development assets. The integration of Energy Africa progressed well and Tullow delivered a very good operational and financial performance in 2005. It had two UK North Sea gas discoveries, one discovery in Gabon and one in Mauritania.

In 2006, the company began drilling its first well in Uganda and has since drilled circa 50 wells around the Lake Albert region. There were five oil discoveries in Uganda during 2006, which established the existence of a working hydrocarbon basin and marked the beginning of proving up a world-class major new oil province there. Tullow also announced its largest acquisition ever with a US$1.1 billion bid for Hardman Resources Limited. This transaction became effective in December 2006 and completed in January 2007.

In 2007, Tullow drilled two deep water wells offshore Ghana discovering the massive Jubilee field – its largest ever discovery and the beginnings of proving up a second new major oil province. 2008–2009 was its next phase of growth with a major focus on Africa, based on delivering first oil in Ghana in 2010.

In February 2010, the oil firm initiated a "tax planning" exercise that was criticised by Heritage’s counsel during the Heritage / Tullow court case in 2013 as an attempt to reduce the amount of tax the firm was liable to pay in Uganda. Richard Inch, Head of Tax at Tullow, firmly rejected the criticism whilst giving evidence in this case.

In November 2010, the Jubilee field was brought on to production, in record time, some 40 months after its discovery. A new major discovery was also made at the Enyenra (Owo) and Tweneboa fields in Ghana during the year.

In 2011 the company bought into twenty five Dutch, North Sea Gas fields and in March 2012 a new oil reserve was discovered in Kenya.

In 2012 the company encountered non-commercial reservoirs at its Teak-4A well off Ghana leading to the well having to be plugged and abandoned.

Tullow completed the purchase of Heritage Oil’s licences in the Lake Albert area in 2010 for $1.45bn and on 21 February 2012 completed a farm down of two thirds of its interests to Total and CNOOC for US$2.9 billion. But Tullow and its partners have yet to reach agreement with the Government of Uganda over a plan to develop Lake Albert including a proposed refinery and export-pipeline.

In 2012 there were some production delays at the Jubilee field but the Company announced on 13 February 2013 that production issues at the Jubilee field had been successfully and cost-effectively remediated and that production was now at around 110,000 bopd with an expected 2013 year end exit rate of over 120,000 bopd.

The firm and its leadership were criticised in January 2013 after a decrease in its share price. This was reportedly because the company had failed to reach production targets at a project in Ghana because of ‘operational hiccups’. This prompted the broker Investec to rate the company a ‘sell’ and decrease its target price. Also causing problems were the oil fields known as the TEN that Tullow discovered off the coast of Ghana. The fields were a significant find but the projected development cost of the fields was estimated to exceed $5 billion, which is too much for a firm of Tullow’s size. The Company has suggested it may reduce its share in projects to help reduce the cost burden of developments.

In Uganda, Tullow and its partners (CNOCC and Total) continues to work with the government of Uganda on the development plan for Lake Albert which is to include a local refinery and international pipeline.

In April 2014, Tullow braced itself for a substantial investor backlash over excessive payouts to senior directors at the company. CEO Aidan Heavey came under particular scrutiny after it emerged that his pay had risen from £2.6 million to £2.8 million in 2013, despite Tullow's share price decreasing by as much as 30 percent during that period.


Tullow Oil plc is one of the largest independent oil and gas exploration and production companies in Europe. The Group is entering its next phase of growth with a major focus on Africa and the Atlantic Margins basin, where Tullow is already a dominant player following exploration success in Ghana, French Guiana, Uganda and Kenya.

Tullow has a large portfolio of exploration and production assets with a focus on balanced long-term growth. The Group has interests in over 150 licences across more than 20 countries, producing from a total of 67 fields. In 2012, average working interest production was 79,200 boepd, generating sales revenue of $2.3bn with capital expenditure of around $1.9bn. The majority of spend was again focused on Africa and Atlantic Margins operations ensuring the world-class projects in Ghana and Uganda and exploration activity in Kenya, Ethiopia and West Africa and South America continue to deliver future growth.

Major projects

Tullow has had significant exploration success in Uganda (Lake Albert) and Ghana (Jubilee, TEN) where two new hydrocarbon provinces have been established and major developments have commenced. The success from these two basins and geological play types has led Tullow to expand its acreage positions in an effort to replicate the transformation success Ghana and Uganda has brought to the business.

In West Africa and across the Atlantic in South America, Tullow has made further Jubilee-like deepwater discoveries and a high-impact exploration campaign continues. In East Africa, Tullow acquired significant acreage positions in Kenya and Ethiopia with the first well in Kenya, in 2012, making an important discovery at Ngamia-1, which was swiftly followed by the success at Twiga South-1. A significant number of exploration and appraisal wells will now be drilled in this region over the coming years as Tullow attempts to open an entirely new oil province.

In Uganda, Tullow has drilled over 50 wells since 2006. Tullow is now working closely with the Government and its partners on a basin-wide development plan with the potential to produce in excess of 200,000 barrels of oil per day.

In Ghana, Tullow and its partners discovered the world-class Jubilee field in 2007 and developed it in record time with production commencing in November 2010, some 40 months after discovery. During 2012, a successful programme of acid stimulation has been carried out on a number of wells to return them to their original productivity. Further development activity continued in 2012 with the Jubilee field Phase 1A Plan of Development (PoD) approval in January 2012, and the first production wells coming on stream before the end of 2012, resulting in Jubilee production reaching around 110,000 bopd in early 2013 and an exit rate for the year expected to be in excess of 120,000 bopd. In August 2016, the company's Tweneboa, Enyenra, Ntomme (TEN) field achieved first oil offshore Ghana, producing a capacity of 80,000 bopd to the FPSO John Evans Atta Mills.

After prolonged exploration for oil and natural gas in French Guiana in partnership with Shell Oil, Tullow failed to find evidence of hydrocarbons in November 2013.

In late October 2013, Tullow announced it had plugged and abandoned a wildcat well offshore Norway in the Barents Sea due to ‘poor quality reservoir rock’.

In March 2014, Tullow Oil was forced to invoke a force majeure clause on its oil production project offshore Guinea after the US Department of Justice and the Securities and Exchange Commission opened a corruption investigation into the firm’s partner in the project, Hyperdynamics Corporation. Tullow took over the concessions to the project only a year previously in April 2013 and had plans to start drilling for oil in the second quarter of 2014. The delay set Tullow back notably in Guinea and the firm will only resume operations when the issues are resolved. Its share price decreased considerably as a result of the news.

Heritage Oil court case

On 12 March 2013, court proceedings at London's High Court commenced after Tullow Oil sued Heritage Oil in a claim that it was forced to pay Heritage's $313 million tax bill after Tullow acquired Heritage's Ugandan assets.

In 2010, Tullow paid Heritage $1.45 billion for its 50 percent share in two huge Ugandan oil fields - Blocks 1 and 3A. The Ugandan government initially demanded $405 million from Heritage in capital gains tax, and, with Heritage’s agreement, Tullow paid the Ugandan Revenue Authority (URA) $121.5 million. This was a third of the original tax demand, as Ugandan tax rules required a one-third payment before Heritage could challenge the demand. Tullow placed the remaining $283.5 million into an escrow account, pending the outcome of the challenge, which left a reduced $1.045 billion payment that went directly to Heritage in exchange for the assets. However, in 2011, Tullow complied with another URA demand for a further $313.5 million payment, which was the balance of the original tax demand, plus an extra $30 million which the URA had added to the bill.

Tullow signed a Sale and Purchase Agreement with TOTAL and CNOOC on 30 March 2011. The second payment to the URA was made on 7 April 2011. The farm down to TOTAL and CNOOC was completed over 10 months later on 21 Feb 2012.

On 14 June, it was announced that Tullow Oil won the arbitration of the court case with Heritage Oil.

The Total-CNOOC transaction netted Tullow $2.9 billion in a farm-down arrangement sanctioned by the government. Heritage claims that Tullow was motivated to pay the $313.5 million by the desire to help the deal go through.

During the trial, it emerged that senior directors at Tullow had discussed making an "undocumented" $50 million payment to the Ugandan government before considering funding parts of President Yoweri Museveni's re-election campaign. Angus McCoss, an exploration director at Tullow, suggested to other executives in a group email in April 2010 that the company should pay for an oil licence to "meet the short term needs and demands" of President Museveni. Graham Martin, Tullow company secretary, responded firmly in court, saying this was an "outrageous suggestion".

UK Foreign Minister William Hague was also dragged into the row after the High Court was told that the Foreign Office leaked official documents to Tullow Oil, while lobbying on the company’s behalf. Hague’s role in the lobbying was seen as suspicious after a letter from Hague’s Minister for Africa to President Museveni asking Uganda to drop the tax claim was shown to Tullow executives. Tullow’s vice president of Africa, Tim O’Hanlon, was also alleged to have suggested that Museveni slur Heritage as part of a deal to settle the tax dispute. Additionally, it was brought up that Tullow’s CEO, Aidan Heavey, is a known donor to the Conservatives, having donated more than £50,000.

President Museveni denied the bribery claims in an official statement on 18 March. The statement caused some controversy for the court case as he went on to claim within that Tullow Oil completed the tax payment in order to successfully transact business within the country, a claim that Tullow denied in court. In a public statement in Uganda, Jimmy Mugerwa (Tullow Uganda) deeply regretted the embarrassment caused by "false allegations" and quoted a personal letter from Aidan Heavey to President Museveni which stressed Tullow’s history of "fair and ethical dealings".

During the court case, Graham Martin, Tullow’s General Counsel, was criticised by Heritage’s QC for disposing of hand-written notes potentially relevant to the proceedings. Mr. Martin rejected the criticism and stated that he had destroyed the notes when he had periodically cleared his office in Kampala in 2010-12.

Political lobbying

In March 2013, British government ministers were implicated in receiving business-related donations from oil and resources companies including Tullow Oil. A report by the World Development Movement (a political campaigning group) alleged "that one third of ministers in the UK government are linked to the finance and energy companies driving climate change" and that "Government figures were embroiled in the nexus of money and power fuelling climate change include William Hague, George Osborne, Michael Gove, Oliver Letwin, Vince Cable and Prime Minister David Cameron himself. Both William Hague and Michael Gove were said to have connections to Tullow; Hague reportedly telephoned the president of Uganda to lobby for the firm's £175 million tax bill to be waived, while Tullow's CEO, Aidan Heavey, donated £10,000 to education secretary Gove before the 2010 general election.

Tax avoidance

In 2013, Platform London, an environmental campaigning group, released a report that alleged that Tullow Oil was avoiding UK tax by minimising the amount of profit that passes through the company’s UK books and routing it through an international network of subsidiaries instead. The report also accused the firm of exploiting international legal mechanisms in Uganda to avoid tax. In the same month, research conducted by the British newspaper The Mail on Sunday revealed that Tullow pays far below 1% of its turnover in tax. Tullow’s 2012 full year results show that the company has an effective tax rate across the 25 countries in which it works of 40%.

Tax dispute

In December 2012, reports surfaced in the press that Tullow Oil was subject to arbitration with the government of Uganda at the International Centre for Settlement of Investment Disputes in the United States. The dispute arose after value added tax was imposed on goods and services that Tullow purchased for its oil exploration work in the country. The original case was filed in October 2012 at the International Centre for Settlement of Investment Disputes (ICSID) and due to the case being under seal, the intricacies are not open to the public. Information on the ICSID website reveals that the basis of the court case relates to "petroleum exploration, development and production agreement".

The Ugandan government took a robust stance on the arbitration, insisting through its spokesman that Tullow should not claim taxes on supplies as recoverable costs before oil production starts.

Tullow Oil is represented by Kampala Associated Advocates.[32] In light of this legal representation, Peter Kabatsi, Uganda’s former solicitor general and partner at Kampala Associated Advocates, has denied that he negotiated agreements with oil firms during his tenure as solicitor general, quashing claims of conflict of interest. The founder of Kampala Associated Advocates is Elly Kurahanga, the President of Tullow Uganda.

Government sources said that the real cause for concern for Uganda is the manner in which it lost millions of dollars over the last decade – money that could have stayed in the country. A report by the organization Global Financial Integrity (GFI) reveals that illicit financial flows from Uganda between 2001 and 2012 amounted to $680 million; in Tullow’s case however, the firm argues that it is challenging tax demands that non-governmental organizations like GFI and the Tax Justice Network say should go towards government investment in healthcare, education and infrastructure.

Bribery allegations

In 2011, the Attorney General of Uganda initiated Parliamentary investigations into bribery allegations levelled at Tullow Oil and three cabinet ministers, named as Prime Minister Amama Mbabazi, Foreign Affairs Minister Sam Kutesa and his internal affairs counterpart, Hilary Onek. Another MP, Gerald Karuhanga acted as the whistle blower when he submitted documents on the incident in Parliament during the October 2011 Special Oil Debate. On hearing the allegations, MPs also called for the accused to resign.

On 11 April 2012, a Tullow Oil delegation appeared in front of an Ad Hoc committee of the Ugandan Parliament which was investigating these claims. A submission and supporting documents were handed over to the Committee – proving unequivocally that the allegations made against Tullow were false and based on forged documents. The submission to the Ad Hoc Committee can be downloaded from Tullow’s website.

After the investigation was announced, a lawyer, Severino Twinobusingye, sued the Attorney General in an attempt to block investigations into the bribery allegations, as well as calls for those accused to resign. Twinobusingye also wanted court to order for him to be paid for the costs incurred in the case. In March 2012, judges awarded Twinobusingye two-thirds of the total costs and decreed that the accused should not have to step down. In July 2012, the Constitutional Court threw out the Parliamentary Commission’s intended appeal to the Supreme Court challenging the January 2012 ruling that blocked it from being party to the oil sector probe case.

In February 2013, the court ordered the government to pay 12.9 billion shillings in costs to Twinobusingye in a move that was described as "very unprecedented in the country’s history".

Kenyan opposition to exploration

Tullow ran into difficulties in July 2013 after pastoralists in the Turkana County of Kenya rejected the firm’s proposal to move to a new exploration site at the Twiga 2 oil site in the Lokichar basin. They complained that the ongoing oil exploration in the region has interfered with pasture land and that future pastures for their animals would be decimated. In late October 2013, local communities in Turkana County staged demonstrations demanding jobs and other benefits from any potential future operations in the region, prompting the firm to suspend drilling and sending the firm’s share price down. The locals also managed to gain entry to facilities and two oil blocks, resulting in looting and vandalism. Resumption of drilling was only achieved after peace talks were agreed with local leaders in mid-November.

Illegal waste dumping

In July 2013, Tullow Oil was accused of dumping two trucks of human waste in Kakindo village in Western Uganda, causing serious health risks to locals and a number of diseases. The incident was blamed by the firm on its subcontractor, Saracen Uganda Limited, who in turn blamed another contractor they used. However, the incident did not do well for the firm’s reputation in the country after it drew the wrath of members of parliament. Tullow claimed the entire responsibility lay with its contractors, who they believe were cutting corners. The incident was also not the first time the firm had been accused of illegal waste dumping, with reports in 2012 claiming the firm dumped toxic drilling waste in a game park and other areas occupied by people.

Corporate responsibility

Under the theme, "Creating shared prosperity", Tullow has made some contributions to the economic and social sectors of the countries within which they operate. This includes educational scholarships, water supply projects, health programme, wildlife conservation and so on.


Tullow Oil Wikipedia

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