37www.tullowoil.comDeveloping the capability of local staffTullow employs 175 people in Uganda, 84% of whom are local employees. The primary localisation challenge for Tullow remains the availability of suitably qualified Ugandans in the core petroleum technical disciplines such as geoscience, reservoir, petroleum and well engineering. Initiatives such as mentoring and competency development are being deployed with the intention of bridging this gap and developing the long-term capability of local staff. In 2011, funding was provided for five Uganda Masters students to pursue seismic related research in Uganda. In November, a further five Ugandan Field Operations Supervisors began six-month training programmes at TTE, a technical training college in the UK. We currently have three Ugandan Graduate Geoscientists on secondments in London, following Tullow-sponsored Masters Degrees at UK universities, and anticipate taking on more graduates from Uganda in the near future. An active employee engagement programme is also under way to keep Tullow Uganda staff fully informed of progress associated with development planning and ongoing exploration and appraisal activities, including regular meetings with Tullow Group management.Evolving our social investment strategyIn 2011, we invested $5.1 million in social projects in Uganda. This represents almost 45% of total Group social investment and 90% of social investment in the region. The majority of this investment was in local communities with a particular focus on health, education and enterprise development. In 2012, we are undertaking a socio-economic baseline survey and a comprehensive review of our existing social investment activities in Uganda. The baseline, together with the social investment review, will inform our evolving Ugandan social investment strategy and ensure we support the needs of our local communities and align more closely with our business activities.Fostering local businessThrough our supply chain we are working with local suppliers and helping them to develop skills to deliver goods and services to international standards. Local content expenditure increased 173% to $73.1 million in Uganda in 2011, 54% of the total value of contracts awarded during the year. 1,049 contracts were awarded to Ugandan suppliers which represents 81% of the total number of contracts awarded. As we progress towards the development phase greater opportunities will become available throughout the industry's supply chain and within the wider economy. We are undertaking a public information programme about Tullow's supply chain and local supplier development programme to ensure that as many potential suppliers and interested parties as possible can participate in our activities and upcoming opportunities and events.In 2011, we partnered with Traidlinks, an Irish not-for-profit organisation, which aims to strengthen Irish-Ugandan partnerships in business and trade development, to support the development of small and medium-size enterprises. In May 2012 the pilot phase of an Enterprise Centre in Hoima commenced. This centre will provide a range of services which aim to foster local businesses and help them grow and ideally become part of the industry's supply chain. We are hoping that this will become a blueprint for the development of Enterprise Centres throughout our areas of operation. Uganda EA-3AEA-3AEA-2EA-2KaisoButiabaTonyaBugomaLakeAlbertCongo(DRC)UgandaEA -1OilFieldTullowOperatedTullowNon-OperatedOil&GasFieldLEGENDOilDiscoveryUnderAppraisalKingfisherJobi - RiiIn accordance with the Government of Uganda farm-down consents, completed February 2012, operatorship responsibilities within the basin will be divided between the Partners. Total will operate Exploration Area-1 (EA-1) and Tullow will operate Exploration Area-2 (EA-2). CNOOC Limited will operate the new Kanywataba licence and the Kingfisher production licence in the former Exploration Area-3A.The Partners have recommenced drilling activities in the area as part of a wide-ranging exploration and appraisal programme in 2012. Immediate exploration priorities include drilling the Kanywataba prospect, a series of prospects west of the Nile, starting with the Omuka well in EA-1 and further appraisal work in both EA-1 and EA-2.
Building community relationshipsDuring 2011, four CLOs were employed in Kenya and three in Ethiopia in preparation for exploration activities. The logistics of local stakeholder engagement in this region is hugely challenging given the size of the combined acreage. In addition, many of the local communities are nomadic and there are a number of inter-community conflicts. During the year we conducted an introductory course to the oil and gas industry in Kenya and we are currently planning to co-host a second course with a local provider, with a view to building local capacity in the delivery of such training. We have also run a short introductory course for government and other stakeholders in Ethiopia. Understanding the socio-economic contextAs in Uganda, we are establishing a dedicated social performance department in Kenya given the social and socio-economic challenges of operating in this particular region. We have recently completed the first phase of a social baseline survey and will tender for a comprehensive socio-economic baseline survey in the coming months. This will help us to gain a thorough understanding of the existing social and economic context such that we are able to measure our impacts, both positive and negative, in future. The baseline will also inform the development of our long-term social investment strategy.$115 MILLION Forecast capital expenditure37 EMPLOYEES89% of whom are local$24 MILLIONSpent with local suppliersOVER $275,000Social enterprise expenditure, 201115 Tullow Group Scholarships being awarded in 2012South & East AfricaIN FOCUS KENYA & ETHIOPIAIncreasing our social investmentOur social investment in any country accounts for the level of exploration activity, the likely impacts of those operations and the needs and wishes of local communities. In Kenya, together with our partners, we have invested in the provision of education, healthcare and access to water within our areas of operation. Our work programme has increased in scope following the oil discovery in Kenya and our social investment strategy is evolving into one with a longer-term outlook. In Ethiopia, road accidents are commonplace and the medical service is not well equipped to deal with such incidents. As a result we are investing in trauma-related nurse training. We have also made investments in the provision of clean water and funded school furniture and other materials.In 2012, Kenya will receive 10 scholarships and Ethiopia will receive five scholarships under the Tullow Group Scholarship Scheme, designed in part to build capacity in national institutions in new oil countries.Building local capacityWe are also committed to building local content as early as possible in our activities and have already engaged with and contracted several local suppliers in Kenya. In 2011, we spent $24 million with local suppliers in Kenya. In addition, we hosted a logistics supplier forum in Ethiopia in May this year to enable us to identify and support local companies who can bring in the requisite goods and services we need in preparation for the first exploration well there in the fourth quarter of 2012.38Tullow Oil plc 2011/2012 Corporate Responsibility Report