153www.tullowoil.comFINANCIAL STATEMENTS5 UK & Irish Share Incentive Plans (SIPs) These are all-employee plans set up in the UK and Ireland, to enable employees to save out of salary up to prescribed monthly limits. Contributions are used by the Plan trustees to buy Tullow shares ('Partnership Shares') at the end of each three-month accumulation period. The Company makes a matching contribution to acquire Tullow shares ('Matching Shares') on a one-for-one basis. 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 charge of $0.6 million (2010: $0.2 million, 2009: $0.2 million) for the UK SIP Plan and $0.2 million (2010: $0.2 million, 2009: $0.2 million) for the Irish SIP plan. Note 28. Operating lease arrangements 2011$m2010$mMinimum lease payments under operating leases recognised in income for the year 7.06.5At the balance sheet date, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows: 2011$m2010$mMinimum lease payments under operating leases Due within one year 16.4 17.1After one year but within two years 10.0 16.3After two years but within five years 20.8 23.2Due after five years 73.9 66.8 121.1 123.4Operating 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 Contracted capital commitments as at 31 December 2011 are $1,049.2 million (2010: $876.3 million, 2009: $1,270.0 million). Note 30. Contingent liabilities At 31 December 2011 there existed contingent liabilities amounting to $147.0 million (2010: $221.0 million, 2009: $239.4 million) in respect of performance guarantees for abandonment obligations, committed work programmes and certain financial obligations.

154Tullow Oil plc 2011 Annual Report and AccountsNotes to the Group financial statements continued Year ended 31 December 2011 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. 2011$m2010$mShort-term employee benefits 8.77.0Post employment benefits 1.10.9Amounts awarded under long-term incentive schemes 3.71.4Share-based payments 7.55.6 21.014.9Short-term employee benefits These amounts comprise fees paid to the Directors in respect of salary and benefits earned during the relevant financial year, plus bonuses awarded for the year. Post employment benefits These amounts comprise amounts paid into the pension schemes of the Directors. Amounts awarded under long-term incentive schemes These amounts relate to the shares granted under the annual bonus scheme that is deferred for three years under the Deferred Share Bonus Plan (DSBP). Share-based payments This is the cost to the Group of Directors' participation in share-based payment plans, as measured by the fair value of options and shares granted, accounted for in accordance with IFRS 2, Share-based Payments. There are no other related party transactions. Further details regarding transactions with the Directors of Tullow Oil plc are disclosed in the Directors' remuneration report on pages 88 to 99. Note 32. Subsequent events Since the balance sheet date Tullow has continued to progress its exploration, development and business growth strategies. In February 2012, Tullow signed two new Production Sharing Agreements (PSAs) with the Government of Uganda. The new PSAs cover the EA-1 and Kanywataba licences in the Lake Albert Rift Basin. Tullow has also been awarded the Kingfisher production licence. In February 2012, Tullow completed the farm-down of one-third of its Uganda interests to both Total and CNOOC for a total consideration of $2.9 billion paving the way for full development of the Lake Albert Rift Basin oil and gas resources. In February 2012 the Group announced the Jupiter-1 exploration well in the Block SL-07B-11 offshore Sierra Leone had successfully encountered hydrocarbons. This has been confirmed by the results of drilling, wireline logs and samples of reservoir fluids. 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 $10.1 million (2010: $4.5 million). At 31 December 2011, there was a liability of $0.3 million (2010: $0.3 million) for contributions payable included in creditors.