We recognise that local suppliers need additional support to achieve supplier pre-qualification, in addition to assistance post contract award to make sure they consistently meet the standards required. Most importantly we plan for success in our contract strategies so that we can meet peak supply chain requirements in a sustainable way and move to a fast track once oil is found. Our supplier development programme is set out in the local content section on pages 74 to 75 of this report.Fostering a wider opportunityLocal content plays an important role in risk assessment and market intelligence for our contract strategies. We are also developing stakeholder engagement skills within the local content team to work with all aspects of local and national government in support of robust legislation and strong government initiatives to build capacity. In 2012/2013, we are extending enterprise development and capacity building to a wider range of services and goods. We are also looking at creating greater linkages across our supply chain through vocational skills training and agri-supply. Agriculture is a significant part of host country development goals as it enhances food security and is a major source of revenue and employment.While there is a finite opportunity for suppliers within our supply chain, developing capacity to serve the emerging oil industry can be a passport to opportunity and growth in new business for local suppliers. The multiplier effect of higher standards, entrepreneurial networks and business-to-business relationships can evolve into economic and social development beyond the oil sector. Lasting improvements in quality, productivity and governance can serve as a magnet to attract other goods and services and foreign direct investment. Growing a country's private sector is the only long-term way to build a dynamic economy and benefit the lives of local people. In partnership with a wide range of stakeholders, Tullow can, through its supply chain, assist in building the right environment to facilitate local and international investment, thereby creating jobs and building a more diversified economy.We can already demonstrate that transferable skills and services can lead to new business opportunities and partnerships with international companies. Visit www.tullowoil.com/casestudies Tullow's Compliance team, along with Supply Chain, hosted the first Industry Partner Compliance Workshop in Bangladesh this year. This was followed by a similar event in Kenya. The forums featured an overview of anti-bribery legislation, including the UK Bribery Act 2010, and outlined Tullow's compliance expectations of Industry Partners. The forums also covered the importance of due diligence, the effects of non-compliant behaviour and details of Tullow's confidential reporting line.In addition, the Industry Partners were given an overview of Tullow's Code of Business Conduct, introducing key supplier related elements such as our gifts and hospitality policy and facilitation payments guidance. The issue of facilitation payments was an area of particular interest when Tullow and the Industry Partners discussed the challenges of working in developing countries.SUPPLIER ETHICS AND COMPLIANCEMore information PageCompliance 57Local supplier expenditure 83" Tullow's commitment to creating shared prosperity for our host countries, as well as our business, is underpinned by ethical and responsible business practices focused on creating a sustainable supply chain."David Mooney Head of Supply ChainMEASURING OUR PERFORMANCEMichael Mawuli Ahorlu, Supplier Development Specialist, Tullow Ghana73www.tullowoil.com3

BUILDING FUTURESThe capacity and capability of local people and businesses to participate in the nascent oil and gas industry can be substantially increased through a strong commitment to local content in Tullow's supply chain.A key role in creating shared prosperityTullow is committed to creating a strong external operating environment to successfully deliver its business plans and continue with its growth strategy. To do this, we must contribute to social and economic development where we operate. With approximately $2 billion capital expenditure planned in 2012, our supply chain has a key role to play. Its activities can assist in the industrialisation of an economy and act as a catalyst for improvements in infrastructure, skills and technology transfer, higher quality standards, increased productivity and the development of entrepreneurship. These, in turn, help to stimulate further investment and more diversified economic growth. In 2011/2012 Tullow has developed a robust local content policy and strategy which is committed to involving local individuals and businesses in our activities. This ensures that they have an opportunity to participate in developing their country's oil and gas industry and the wider economy. The goal of our local content strategy is to build local capacity and to develop successful suppliers who can deliver a wide range of goods, services and skills to international standards. The main motivation behind our local content strategy is business sustainability and long-term project cost considerations. The decision to invest in local content development programmes involves a delicate balance between higher short-term costs and the benefit of a dynamic, cost-competitive host country market environment. The objective is to mitigate commercial, operational and non-technical risks.Joined-up thinking and activityCreating real opportunities for local people and local enterprise development is done in three interconnected ways by Tullow; supply chain, localisation and social enterprise investment. We have built linkages across the Group to align our business activities in these areas and to ensure we leverage and/or optimise opportunities for local businesses and individuals. We want to make sure that all areas of our business work together in pursuit of our commitment to fostering local entrepreneurs and local enterprises. We also want to make sure that local content development is integral to our business and is managed as such. STRATEGIC IMPORTANCEWe believe that Tullow will achieve a competitive advantage through building a vibrant and secure local supplier base. This is both cost efficient and lowers commercial, operational and project risk in the long run.HIGHLIGHTS FOR THE YEAR$146.6 MILLIONWe spent $146.6 million with local suppliers in 2011. There was a significant increase in Uganda and Kenya local supplier expenditure during the year, reflecting the increased level of operational activity in these countries.NEWEnterprise Centre opened in Hoima in Uganda to assist SMEs in business development and to build capacity for the oil industry, with the objective of generating growth and employment. An Enterprise Centre is also planned in Ghana.TWOTullow won two awards in 2011/2012 for its local content activities. The Group received an award for the most responsible investor in Uganda and at the Ghana Summit on oil and gas, Tullow received a local content award. DETAILED PERFORMANCE INFORMATIONOn page 55 of this report you will find more detailed information on 2011/2012 performance against objectives as well as local content 2012/2013 objectives.Local content74Tullow Oil plc 2011/2012 Corporate Responsibility Report