PROTECTING PEOPLE, THE ENVIRONMENT & THE BUSINESS22Tullow Oil plc 2011 Annual Report and Accounts: Special feature

RISK MANAGEMENT Strategic priority: Ensure safe people, procedures and operations and minimise environmental impacts.The oil and gas industry is inherently high risk. It combines a complex set of technical risks in finding resources and monetising them over a long time horizon. Operations encompass a wide range of non-technical risks such as the environment, health and safety, reputation management, political risk and bribery and corruption. Activities are capital intensive with no guarantee of success, creating significant financial exposure. This is counterbalanced with the need to achieve substantial financial returns, both to invest for the future growth of the business and to deliver returns to shareholders. By its nature oil and gas is a dynamic industry which often operates in a fluid geopolitical and social environment.Risk management is a critical business function. Understanding the risks and opportunities we face shapes our decisions. To enhance our risk management process, Tullow has developed an integrated 'evergreen' portfolio management tool.www.tullowoil.com23