OVERVIEW14 Chairman's statementFor companies involved in the discovery and extraction of oil, the question is how to maximise the developmental benefits of this vital resource while minimising its adverse impacts on the environment and society.6 Performance highlights 2011Record financial results and industry leading exploration success were underpinned by a strong corporate responsibility performance.8 Tullow at a glanceWe are Africa's leading independent oil company and our global portfolio of licences spans 22 countries, 15 of which are in Africa.10 Chief Executive's reviewCreating shared prosperity underpins our philosophy of how we aim to run our business. It stems from our commitment to make a meaningful contribution to economic and social development in our host countries.12 Strategy, business model and valuesOur vision is to be the leading global independent exploration and production company. We are establishing an unrivalled competitive position that differentiates us from our peers.14Governance, risk and corporate responsibility frameworkWe have a strong governance framework that gives direct ownership of risk management and corporate responsibility to the Board and Executive Directors.FOCUS ON RESULTSWe have a strong sense of focus on results, driving tasks and projects through to completion with the flexibility to adapt to changing situations.

" Oil is a unique resource without which modern industrialised society cannot exist. It is also a remarkable source of wealth creation that can make a dramatic contribution to economic development and the alleviation of poverty. For responsible companies involved in the discovery and extraction of this vital raw material, the challenge is therefore how to maximise the developmental benefits of oil while minimising any adverse impacts on the environment and society."The case against oil is threefold: its extraction and transportation can damage the environment; the revenues that it generates can distort both the local economy and the political processes of host countries; and its combustion generates greenhouse gases that contribute to climate change. The case in favour is that it is currently an irreplaceable source of energy; that while the risk of harm to the environment can never be totally eliminated it can be minimised; and that oil revenues, properly managed, can break the cycle of poverty and kick-start a country on the path to sustainable economic growth. In some sections of the media, civil society and academia, there appears to be a presumption that while oil wealth may be appropriately managed in developed economies, it is a 'curse' in Africa. As Africa's leading independent oil company, we reject the inevitability of this analysis, but we fully acknowledge our responsibility to play an active part in trying to ensure that the mistakes of the past are not repeated in the future. Our aspiration is to ensure that our technical expertise and the capital that we put at risk in the search for oil will create shared prosperity for our shareholders and for our host countries and local communities.We do not under-estimate the scale of the challenge we face. Oil exploration is a high-risk but potentially high-return activity and there is a danger of creating unrealistic expectations. During the development phase, the industry is very capital intensive but the number of direct jobs created is relatively small, particularly for unskilled workers. When production is finally achieved, the use of and benefits accruing from the revenues generated may appear inequitable or opaque to many stakeholders. At Tullow we seek to address these challenges in three ways: we try to identify and engage with all the parties affected by our activities from the outset, keeping them informed and listening to their views in an open, honest and transparent manner; we try to create linkages between our activities and the rest of the economy, facilitating opportunities for local suppliers, entrepreneurs and community enterprise development; and we seek to be as transparent as possible, within the constraints imposed upon us by our host governments, about the source and application of oil revenues. Simon Thompson ChairmanChairman's statementFor more information www.tullowoil.com/crr2011/chairmaninterviewMEETING THE CHALLENGE4Tullow Oil plc 2011/2012 Corporate Responsibility Report