Tullow Oil Plc · LSE:TLW
Tullow Oil — Investor Day (October 2008)
143 slides from Tullow Oil's investor day presentation, Oct 1, 2008
Slide 1: A Step Change for Tullow and Ghana
A Step Change for Tullow and Ghana 1 October 2008
Slide 2: Jubilee discovery transformational for Ghana and Tullow
Jubilee discovery transformational for Ghana and Tullow A key asset in Tullow’s portfolio • Opportunity to substantially increase the Group’s production and reserves base • Developing offshore deepwater expertise as the operator of a world-class field • Platform for future growth Exceptional opportu
Slide 3: Introduction to Ghana business – Andrew Fisher
Introduction to Ghana business – Andrew Fisher October 2008 Capital Markets Day Slide 3
Slide 4: Agenda
Agenda Section Presenter Page Introduction to Ghana business Andrew Fisher 3 Ghana socio/political background Sam Mensah 10 Exploration history and regional geology Robin Sutherland 11 Exploration upside potential Justine Tinker 30 Jubilee field subsurface overview Dave Hanley 40 Jubilee development
Slide 5: Building a long term business in Ghana
Building a long term business in Ghana Enviable position in Ghana • Benefitting from strong regional knowledge - Licences signed 2006 - Jubilee Field discovery 2007 - Tullow selected as unit Operator 2008 • Excellent joint venture support • Long-term business and CSR strategy Outstanding progress be
Slide 6: Working together as a partnership
Working together as a partnership • Leverage partner capabilities - Tullow long-term player in the region - Kosmos exploration experience in West Africa - Anadarko deepwater development track record - GNPC supportive participant - Valuable local minority partners • Partnership principally aligned on
Slide 7: Effective development process established
Effective development process established • Jubilee commercial reserves established; phased development under way • Exceptional reservoirs, likely to offer continued reserves growth and expansion opportunities • Proven FPSO and sub-sea technology standard for West Africa deepwater developments • Sig
Slide 8: Building the Ghana organisation
Building the Ghana organisation • Rapidly building deepwater operated development capability – key long-term business benefit • Integrated project team utilises partner strengths • Operating organisation growing rapidly - over 100 people already employed/contracted - Anticipate staffing of over 200
Slide 9: Working to ensure a positive impact within Ghana
Working to ensure a positive impact within Ghana Close relations with National stakeholders • GNPC fully integrated into the executive team managing the Jubilee development • Regular coordination with central and regional government • Consultations with local communities Oil industry brings many ben
Slide 10: Ghana socio-political background – Sam Mensah
Ghana socio-political background – Sam Mensah See separate presentation October 2008 Capital Markets Day Slide 10
Slide 11: Exploration history and regional geology – Robin Sutherland
Exploration history and regional geology – Robin Sutherland October 2008 Capital Markets Day Slide 11
Slide 12: Jubilee field: A century of preparation
Jubilee field: A century of preparation • Ghana, the Gold Coast, is famous for its Geological Map of Ghana gold but oil exploration dates back to the end of the 19th Century • Ghana has two Cretaceous sedimentary basins (Tano and Keta) and two Paleozoic Basins (Saltpond and Voltaian) which have all
Slide 13: Jubilee field: A century of preparation (1896-1985)
Jubilee field: A century of preparation (1896-1985) Limited success through early frontier exploration – oil shows • 1896 - 1903 West African Oil and Fuel Co. Ltd • 1909 - 1913 Societe Francaise de Petrole, now Elf/Total • 1923 – 1925 African and Eastern Trading Corp • 1956 – 1957 Gulf Oil Co 1957 I
Slide 14: Jubilee field: A century of preparation (1985-2002)
Jubilee field: A century of preparation (1985-2002) GNPC established as statutory body with E&P responsibilities in 1985 • 1985 - Law establishes legal and fiscal framework for E&P activities • 1986 - Diamond Shamrock drill onshore • 1987 - Government of Japan through JICA and JNOC acquire seismic o
Slide 15: Jubilee field: A century of preparation (2004 – present)
Jubilee field: A century of preparation (2004 – present) Exploration focus shifts towards deepwater stratigraphic traps • 2004 - Kosmos Energy acquired Deep Water Cape Three Points block • 2006 Tullow Oil signed package of Deep and Shallow Water Tano blocks: - Shallow Water Tano low materiality - fa
Slide 16: Regional geology
Regional geology October 2008 Capital Markets Day Slide 16
Slide 17: Regional tectonic setting
Regional tectonic setting Tano Basin, West African Transform Margin • Between Romanche & St Paul transform faults Tano Basin • Mainly extensional structural style What is a Transform Margin? St Paul • Differential movement in spreading oceanic crust Romanche • Accommodated by slip on transform fault
Slide 18: Plate-tectonic evolution: early Aptian – 122 Ma
Plate-tectonic evolution: early Aptian – 122 Ma Early Aptian 122 Ma • North and South Atlantic were opening • West African Transform Margin not yet part of an open ocean, but due to plate movement significant topography was developing • West African Transform Margin similar to present day East Afric
Slide 19: Plate-tectonic evolution: early Albian – 108Ma
Plate-tectonic evolution: early Albian – 108Ma Early Albian – 108 Ma • South America & Africa become fully separated • Last point of contact in western Cote d’Ivoire • Tano Basin part of an extensional Rift Basin system which received substantial clastic sediment input from the African continent Mid
Slide 20: Paleo-reconstruction: Cenomanian – Turonian – 93Ma
Paleo-reconstruction: Cenomanian – Turonian – 93Ma Cenomanian-Turonian - 93 Ma • South America and Africa completely separated • Onset of “drift” and oceanic crust West African Transform Margin • Rapid drowning the West African Transform Margin created ideal conditions for deposition of thick rich s
Slide 21: What are turbidity flows and turbidite fans?
What are turbidity flows and turbidite fans? • A turbidity flow is a current of rapidly moving sand-laden water moving down a slope, underwater. The current moves because it has a higher density than the water through which it flows. • A turbidite fan, such as at Jubilee, is a ‘bird’s foot’ shaped d
Slide 22: Regional geology - conclusions
Regional geology - conclusions • Exceptionally favourable coincidence of regional geological factors • Rich source rocks deposited and matured for oil • Tectonics and structural geology establish framework for focusing charge • World class turbidite reservoirs deposited in giant stratigraphic traps
Slide 23: Exploration focus – Tano Basin
Exploration focus – Tano Basin October 2008 Capital Markets Day Slide 23
Slide 24: Regional geology to prospectivity
Regional geology to prospectivity West African Transform Margin geology • Source rock buried sufficiently to generate oil South Tano High • Turbidite fan / channel systems create migration route and highly productive reservoir Prospectivity • South Tano High creates focus of migration, concentrating
Slide 25: Understanding and quantifying the risks pre-Jubilee
Understanding and quantifying the risks pre-Jubilee Geological model incorporating well data constrains prospect risks • Source rock – Cenomanian source modelled to be mature but unproven as previous wells likely accessed charge from older source rocks • Migration route – sands interpreted from seis
Slide 26: Reducing the risk to acceptable levels for investment
Reducing the risk to acceptable levels for investment Risk reduction through Seismic Analysis • 3D Seismic interpretation, facies, attribute and Amplitude Variation with Offset (AVO) analysis are essential in de-risking a stratigraphic prospect • Amplitude Variation with Offset (AVO) techniques wide
Slide 27: The ongoing campaign – expansion and repetition
The ongoing campaign – expansion and repetition Building on Tullow strengths • Core Play – Stratigraphic Trap, a Tullow strength in West Africa • Core Area – Material acreage position in West African Transform Margin Campaign area identified, then expand acreage position • Secure high-grade acreage
Slide 28: The ongoing campaign – expansion and repetition
The ongoing campaign – expansion and repetition Atlantic Twins • Regional understanding extends across Atlantic • Source rocks and reservoirs common to both sides • Recognising that twin basins are seldom symmetrical • South American acreage under review • Applying African plays in South America and
Slide 29: Exploration focus - conclusions
Exploration focus - conclusions • Core capability identifies high impact potential of major new stratigraphic play in Tano Basin • In-house seismic technology skills reduced risks to acceptable levels • South Tano High and Jubilee fan create ideal hydrocarbon trap conditions • Data gathered at Jubil
Slide 30: Exploration upside potential – Justine Tinker
Exploration upside potential – Justine Tinker October 2008 Capital Markets Day Slide 30
Slide 31: Upside Potential in Ghana
Upside Potential in Ghana New Play Fairways • Jubilee Field – new Turonian play - Opens fairway for campaign follow up - Teak - Owo - Ntomme • Odum discovery – new Campanian play - Opens second campaign fairway - Tweneboa M25 - Teak - Onyina - Walnut - Banda • Further potential - High Resolution 3D
Slide 32: Imminent High Impact Ghana Prospects
Imminent High Impact Ghana Prospects Exploratory Appraisal • Three to five wells aim to extend and define the limits of the Jubilee field • Mahogany-3 will explore deeper fans below proven reservoirs Frontier Drilling • Odum-1 (February 2008) successfully opens Campanian oil play • Tweneboa-1 will e
Slide 33: Cote d’Ivoire – Further exploration follow up
Cote d’Ivoire – Further exploration follow up Tullow hold equity in three blocks CI-103 • CI-102 – reprocessing progressing - well in 2010 • 600 sqkm 3D acquired in 2007 • CI-103 – New 3D acquired - well in 2010 • Processing to complete in 2008 • CI-105 – 3D reprocessed, 2D acquired - well in 2009 •
Slide 34: Tweneboa Prospect
Tweneboa Prospect Tweneboa Prospect Tweneboa Geological summary • Two campaign fairways- Campanian • Vertically stacked Campanian channel complexes and Turonian • Cenomanian-Turonian source, HC charge access risk • Giant Campanian fan-channel system mitigated by Odum success (585 Km2) • Stratigraphi
Slide 35: Teak Prospect
Teak Prospect Teak Prospect Teak Geological summary • Stacked Turonian to Mid Campanian • Up-dip of both Jubilee and Odum submarine channel systems • Potential up-dip extension of Turonian Jubilee • Large 4 way dip closures • Stacked structural and stratigraphic traps • Gross upside potential of 750
Slide 36: Owo and Ntomme Prospects
Owo and Ntomme Prospects Owo Prospect Ntomme Prospect • Turonian-aged stratigraphically trapped • Turonian-aged, structural/stratigraphic trap turbidite channel complex • Frontal splay of a fan complex • Sinuous, deep marine channel, equivalent • Water depth 1500m-1700m in age to the Lower Jubilee f
Slide 37: Onyina Prospect
Onyina Prospect Onyina Prospect Onyina Geological summary • Large upper Campanian submarine • Stratigraphic trap fan/channel system with two distinct • Located on South Tano High, thus in good position to receive feeder systems HC charge from the same Cenomanian-Turonian source that • Volumes calcul
Slide 38: Ebony Prospect
Ebony Prospect Ebony Prospect Ebony Geological summary • Two vertically stacked Upper Cretaceous fans • Upper Cretaceous stacked turbidite sandstones • Up-dip of sands with oil and gas shows at TP-1 • Cenomanian-Turonian source (drilled outside of closure) • Stratigraphic trap • Gross upside potenti
Slide 39: Gulf of Guinea – Current and potential Upside
Gulf of Guinea – Current and potential Upside Block Prospect/Campaign Interest Gross Upside Date/Status Ghana Jubilee Field Exploratory Appraisal 22.9-49.95% >1,000 mmbo Q3 08-Q3 09 Ghana Deepwater Tano Tweneboa/Onyina/Owo 49.95% 900 mmbo Q4 08 – Q3 09 Ghana West Cape Three Pts Teak Prospect 22.9% 7
Slide 40: Jubilee field subsurface overview – Dave Hanley
Jubilee field subsurface overview – Dave Hanley October 2008 Capital Markets Day Slide 40
Slide 41: The Jubilee field is an extensive accumulation
The Jubilee field is an extensive accumulation Location • 60 km offshore in 1,250m of water • Straddles the boundary between the Deepwater Tano and West Cape Three Points blocks M-2 Background H-2 ms 11 .5k • Jubilee Field discovery – June 2007 M-1 • Tullow field Operator – February 2008 Prior Activ
Slide 42: Highly experienced subsurface teams
Highly experienced subsurface teams Integrated Project Team (Dallas) • 8 key personnel with an average of approx. 20 years experience • Significant Anadarko GoM experience • Subsurface Manager is ex-Hess Okume-Ceiba The Tullow team (London and Cape Town) • Independent mapping and model build by Tull
Slide 43: Reservoir architecture – exceptional quality
Reservoir architecture – exceptional quality Limit Limit of of lower lower Area Mahogany Mahogany Area of of Reservoir amplitudes amplitudes Reservoir moderate moderate seismic seismic M-2 H-2 Area Area of of high high M-1 Seismic Seismic Area Area of of high high amplitudes amplitudes Seismic Seism
Slide 44: Jubilee Field – scale analogues
Jubilee Field – scale analogues Girassol Complex (Angola) • 150 kms offshore in 1,350m of water. Approx. 140 km2 • Tertiary sands with excellent properties & 32° API oil • Original oil in place > 2,000 mmboe • Recoverable reserves > 950 mmboe • Expected ultimate recovery in the 40 – 50% range • Thre
Slide 45: Key subsurface challenges
Key subsurface challenges Challenges • Reservoir architecture - reservoir scale & extent - sand package continuity - internal compartmentalisation • Reservoir recovery mechanisms - balance of water and gas injection strategies - Well location and completion strategy • Defining development - Optimisa
Slide 46: Jubilee well and seismic database
Jubilee well and seismic database Database • 3 wells to date in core of field - 2 whole cores - sidewall cores - pressure data - fluid samples - 2 DSTs • 3 vintages of 3D seismic data • Significant “gap” up to 2 kms wide between CGG & Veritas surveys. Note coverage of dedicated Jubilee high resoluti
Slide 47: 3D seismic comparison (old data)
3D seismic comparison (old data) 2 km data gap Original 2000 CGG Deepwater Tano 3D Survey Original 2005 Veritas WCTP 3D Survey Issues • Data “gap” between surveys of up to two kms • Different acquisition and processing parameters • Leading to inconsistent amplitude response and interpretation uncert
Slide 48: 3D seismic comparison (new data)
3D seismic comparison (new data) GAP New 2007 WesternGeco Hi-Res “Q-marine” 3D Survey Step change improvement • No data gap or acquisition/processing issues • Consistent amplitude response across entire dataset • Much higher resolution dataset with more structural/stratigraphic detail • Ability to a
Slide 49: Jubilee field – Mahogany reservoir type log section
Jubilee field – Mahogany reservoir type log section Exceptional reservoir characteristics Approx. -3400m • Large, mostly continuous stacked turbidite Upper Mahogany sand reservoirs of late Cretaceous age (c. 89 – 90 ma) • Thick, good quality sands with 40 – 100m net oil pay • Excellent rock properti
Slide 50: Mahogany reservoir outcrop analogue
Mahogany reservoir outcrop analogue Hyedua-1 Well Area Mahogany-2 Well Area • Basin floor • Amalgamated channels • Uunconfined sand sheets, • Erosional features • Laterally continuous- as reflected in • Potentially higher vertical connectivity seismic and lower lateral connectivity • Potentially ama
Slide 51: Jubilee field – fluids & contacts
Jubilee field – fluids & contacts Highlights • Large vertical relief with continuous oil columns >400m. • Reasonably steep reservoir dips, 3-5o on flanks & 10o at crest. • Unique oil/water contacts for Upper & Lower Mahogany reservoirs. • Light, low viscosity oil – 37o API. • High gas/oil ratio – 1,
Slide 52: Jubilee Field - Lower Mahogany amplitude map
Jubilee Field - Lower Mahogany amplitude map Limit Limit of of lower lower Mahogany Mahogany Reservoir Reservoir Area Area of of moderate moderate seismic seismic amplitudes amplitudes M-2 H-2 Area Area of of high high M-1 Seismic Seismic amplitudes amplitudes Area Area of of high high Seismic Seism
Slide 53: Jubilee field - Upper Mahogany amplitude map
Jubilee field - Upper Mahogany amplitude map • More channelised appearance Area Area of of moderate moderate • Potentially more complicated seismic seismic amplitudes amplitudes • H-1 & M-2 drilled on channel margins? M-2 Limit Limit of of Upper Upper H-2 Mahogany Mahogany Reservoir Reservoir M-1 OW
Slide 54: Favourable reservoir dynamics
Favourable reservoir dynamics Reservoir/fluid advantages Reservoir/fluid challenges • Excellent permeabilities (100 – 1000md) • Reservoir pressure close to bubble point. • Homogenous sand in central core area • Uncertainty over degree of well connectivity • Low viscosity oil (0.3 cP) • Water injecti
Slide 55: Appraising the upside
Appraising the upside Appraisal continues to define potential • At least three further Jubilee appraisal wells planned, coincident with development drilling • Gross resource potential expected in the range of 500 – 1000 – 1800 mmbo • Significant associated gas resources ~ 800bcf STOOIP Recoverable R
Slide 56: Jubilee field appraisal wells
Jubilee field appraisal wells Hyedua-2 (CoS ~80%) • Low risk up-dip appraisal of amplitude anomaly • Prove reservoir and connectivity to existing wells • Intersect a possible younger channel system Mahogany-3 (CoS ~50%) • Significant exploratory step-out • Assess the eastern field limit and lateral
Slide 57: Jubilee subsurface summary
Jubilee subsurface summary • Highly experienced team in place • World class “giant” field development opportunity • Exceptional reservoir and fluid characteristics • High recovery factors and offtake rates achievable • Focused appraisal programme to gather critical data • Phased development approach
Slide 58: Jubilee development project phase 1 – Stuart Wheaton
Jubilee development project phase 1 – Stuart Wheaton October 2008 Capital Markets Day Slide 58
Slide 59: Jubilee field – development strategy
Jubilee field – development strategy • Initial well results indicated Jubilee discovery to be commercial • Earliest first oil critical target for Ghana • Potential scale likely to require multiple phases of development • No existing onshore or offshore oil & gas infrastructure Development Strategy •
Slide 60: Jubilee Unit – Unit operating structure
Jubilee Unit – Unit operating structure • Tullow appointed as Unit Operator • Joint Operating Committee (JOC) - Tullow chairs with representatives of all parties - Meets monthly to steer project on fast track basis - GNPC full member of JOC to ensure full alignment • Kosmos appointed Technical Opera
Slide 61: Jubilee field – Phase 1 development key drivers
Jubilee field – Phase 1 development key drivers • First oil schedule – deliver a sizeable but manageable project with a 2010 start-up • Accommodate future phases and gas export/injection - no gas flaring • Maximize reservoir learnings • Manage facility design uncertainties and the need for flexibili
Slide 62: Jubilee field – what will control reservoir performance?
Jubilee field – what will control reservoir performance? Lower Reservoir Example Simulation Model Phase 1 Potential barriers? Used in an on/off & “leaky” mode to examine their impact on oil recovery • Channel sand limits or faults may limit reservoir connectivity, but there are thick sands in the “c
Slide 63: Jubilee field – Phase 1 development scheme selection
Jubilee field – Phase 1 development scheme selection Factors leading to FPSO and subsea solution Jubilee Subsea layout • Water Depth: 900 to 1700m • Seabed temps: 3°C • Long distances (11km M2 to H1) • Shallow depth of reservoir: M1 well - reservoir is 2100m below seabed • Seabed conditions: 2 broad
Slide 64: Jubilee field – Phase 1 sub-surface planning
Jubilee field – Phase 1 sub-surface planning • Focus on oil-in-place delineated by current 3 well data and seismic in the “core” area • 17 well plan (re-use 2 existing E&A wells) with start-up in 2010 • Immediate water injection support with gas injection & export • Lower Reservoir “core” area (~M1
Slide 65: Jubilee field – Phase 1 subsea layout and technical risk management
Jubilee field – Phase 1 subsea layout and technical risk management • Sub-sea canyon West Side - 3 prod manifolds; 12 well capacity (5 – Ph.1) - 2 water inj manifolds; 8 well capacity (5 – Ph.1) - 26 km flowlines • Sub-sea canyon East Side - 2 prod manifolds; 8 well capacity (4 – Ph.1) - 1 Gas inj m
Slide 66: Jubilee field – Phase 1 summary project status
Jubilee field – Phase 1 summary project status • Limited availability of subsurface and Ohdoh tanker prior to move to yard end Sept 2008 engineering data managed by - design/capacity ranges for wells, subsea layout and FPSO • Significant pre-sanction commitments to mitigate schedule risk (>$200 mill
Slide 67: Jubilee field – FPSO execution and status
Jubilee field – FPSO execution and status • Phase I FPSO - Oil: 120,000 BOPD - Total fluids: 160,000 BFPD - Water injection: 232,000 BWPD - Gas: 160MMSCFD to export up to 3,000 psi AND 160MMSCFD to injection up to 5,500 psi - ~ 1.8MMBbls oil storage - Turret capacity for at least 15 risers • Target
Slide 68: Jubilee Field – FPSO project execution track record and plans
Jubilee Field – FPSO project execution track record and plans MODEC EPC Workload - courtesy MODEC EPC Phase of the Indicative Projects Dates are shown for when the tanker enters the shipyard until sailaway 2005 2006 2007 2008 2009 2010 Petrobras Tupi Pilot FPSO Jubilee Phase 1 FPSO FPSO Cidade de Sa
Slide 69: Jubilee field – Phase 1 SURF installation challenge
Jubilee field – Phase 1 SURF installation challenge October 2008 Capital Markets Day Slide 69
Slide 70: Jubilee Field – fixing the subsea installation schedule/windows
Jubilee Field – fixing the subsea installation schedule/windows example schedule and vessel availabilities 2009 2010 Dec Jan Feb Mar Apr May Jun Jul FPSO ready to receive risers Pipelay (Reel & Jlay), piles and riser bases Major pipelay vessel Riser Lay (flexibles and dyn umbilicals) 2nd major vesse
Slide 71: Jubilee field – the “P50” execution schedule
Jubilee field – the “P50” execution schedule Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D Project Sanction Drilling / Completions Subsea Fabrication CRIT
Slide 72: Jubilee Field – Phase 1 schedule benchmarking
Jubilee Field – Phase 1 schedule benchmarking Jubilee Phase 1 scheme La Ceiba Triton Energy Zafiro Exxon Mobil Early Production Systems/Phased Development Kuito Chevron Baobab CNR Chinguetti Woodside Full Field Development/ Laminaria Woodside Conventional Approaches Girassol Total Discovery to Award
Slide 73: Jubilee field – Phase 1 production profile expectation
Jubilee field – Phase 1 production profile expectation 140,000 17 wells - some compartments, 362 mmbbl recoverable, 27.5% recovery Sensitivity - 17 wells - no compartments, 556 mmbbl recoverable, 42.2% recovery 120,000 Infill 5 wells Lower Reservoir, 487 mmbbl recoverable, 37% recovery 5 wells + fur
Slide 74: Jubilee Field – Phase 1 Capital sanction case cost estimate
Jubilee Field – Phase 1 Capital sanction case cost estimate assumes FPSO lease initially then later potential purchase • Phase 1 capital sanction estimate $3.1 billion Wells 1.5* Facilities and subsea 1.0 N.B. FPSO not purchased up-front Pre-operations, Ghana infra-structure, G&A 0.3 Contingency 0.3
Slide 75: Jubilee Field – Phase 1 Project Cost Performance
Jubilee Field – Phase 1 Project Cost Performance CAPITAL Unit capex Phase 1 (362 mmbbl case) ~9 $/ bbl if purchase FPSO in Year 1-2 ~2 $/bbl Total ~11 $/bbl • Decision to exercise FPSO purchase pending reservoir and FPSO performance • If infill drilling required typically incremental ~5 $/bbl initia
Slide 76: Jubilee field - development conclusions
Jubilee field - development conclusions • Project execution is under way for first oil in 2H 2010 - A conventional FPSO-subsea scheme has been selected with appropriate technical mitigations - Critical path currently sits in subsea fabrication and lay - All major facility contracts awarded providing
Slide 77: Ghana well operations – Mike Williams/Alan Dowokpor
Ghana well operations – Mike Williams/Alan Dowokpor October 2008 Capital Markets Day Slide 77
Slide 78: Ghana well engineering challenges
Ghana well engineering challenges Delivery Scope • Exploration - Tweneboa, Teak etc • Appraisal – Jubilee and new discoveries • Development – 17 Jubilee Phase 1 wells • Jubilee Phase 2 – unknown no. of wells Main Challenges • Fast track start-up • Building a capable team • Getting the right rigs and
Slide 79: Key requirements for success
Key requirements for success RIGS Secure appropriate deepwater capacity PEOPLE Build a world-class team EXECUTION Clear strategy and continuous improvement October 2008 Capital Markets Day Slide 79
Slide 80: Key requirements for success
Key requirements for success RIGS Secure appropriate deepwater capacity PEOPLE Build a world-class team EXECUTION Clear strategy and continuous improvement October 2008 Capital Markets Day Slide 80
Slide 81: Deepwater rig supply/demand – a tight market
Deepwater rig supply/demand – a tight market • Visible demand exceeds supply into 2011 Contract Status & Expected Demand 1999-2010: Ultra Deepwater Drilling Units (>7500feet) - Worldwide 90 • Excess demand will be re- distributed when new rigs 80 Demand exceeds supply become available (post 2011) 70
Slide 82: Committed rig details – Blackford Dolphin
Committed rig details – Blackford Dolphin Requirement BLACKFORD • Early appraisal activity identified in August-07 DOLPHIN (2008) (after Hyedua-1 well) • Short-term contract to drill and test 3 - 5 wells Delivered • Blackford Dolphin - Dolphin Drilling - Fred Olsen • In-depth market knowledge and in
Slide 83: Committed rig details – Eirik Raude
Committed rig details – Eirik Raude Requirement EIRIK RAUDE (2002) • Long-term contract on a dynamically positioned rig suitable for a dispersed subsea development • Flexibility in the contract term to avoid initial over-commitment Delivered • Eirik Raude – Ocean Rig • 10,000 ft water depth, dynamic
Slide 84: Rationale behind Eirik Raude commitment (1)
Rationale behind Eirik Raude commitment (1) • Post securing the Blackford Dolphin, Tullow anticipated the requirement for further rig time and undertook further market analysis and an availability enquiry 4Q 2007 • Only eight dynamically positioned rigs available in the period to end 2009 - Balance
Slide 85: Rationale behind Eirik Raude commitment (2)
Rationale behind Eirik Raude commitment (2) Deep Water Rig Contract fixtures in Six Months prior to Eirik Raude Commitment Date Rig Operator Contractor SS/DS DP/M UDW HE WD Country Region Rate Start Date Lead Time Duration (mths) Type jul.07 West Aquarius ExxonMobil Seadrill SS/6 DP Y 7500 Indonesia
Slide 86: Additional committed rigs
Additional committed rigs • Tullow has in addition gained access to two rigs committed by JV Partner Kosmos • Using the synergy of the JV partnership Aban Abraham Atwood Hunter • 6,600ft Water Depth • 5,000 ft Water Depth Dynamically Positioned conventionally Moored Drillship Semi-submersible • Tota
Slide 87: Rig capacity and initial drilling plan update
Rig capacity and initial drilling plan update Strategy for further rig commitments Jubilee Appraisal Programme • Prepare and issue enquiry for a 2nd long-term DP rig (October) • Award 3-5 yr contract once results of Hyedua- 2/Mahogony-3 known (confirms Phase II), or Tweneboa-1 (confirms new hub) • L
Slide 88: Key requirements for success
Key requirements for success RIGS Secure appropriate deepwater capacity PEOPLE Build a world-class team EXECUTION Clear strategy and continuous improvement October 2008 Capital Markets Day Slide 88
Slide 89: Overcoming the resources challenge
Overcoming the resources challenge • Why has Tullow been able to recruit and establish a top Well Engineering team in only 4 months? - Excellent Company reputation: Tullow Culture, nimble organisation, environment - Long-term major project with growth and development opportunities - Recruitment of a
Slide 90: World class well delivery team created
World class well delivery team created • Highly successful recruitment campaign completed in four months – all key positions filled • Average individual level of experience = 19 years • Good balance of Tullow staff with contractor/consultants in Tullow positions • Experience from leading deepwater d
Slide 91: Key requirements for success
Key requirements for success RIGS Secure appropriate deepwater capacity PEOPLE Build a world-class team EXECUTION Clear strategy and continuous improvement October 2008 Capital Markets Day Slide 91
Slide 92: Key execution success factors
Key execution success factors Leadership Team & People • Vision • Diversity • Reward and celebrate success • Passion for excellence • Create culture and space for team to deliver • Complimentary skills set • Adequately resourced • Recognise wider team • Relevant experience HSE • Early Engagement • D
Slide 93: Jubilee Phase 1 project scope
Jubilee Phase 1 project scope • Jubilee is a “classic” West African Jubilee Subsea layout deepwater development (average 1300m water) • Metocean conditions are relatively benign • Infrastructure: FPSO, risers, umbilicals, controls, subsea pipelines etc, 17 wells • Total Phase-1 development budget: $
Slide 94: Jubilee Phase-1 Scope - Wells
Jubilee Phase-1 Scope - Wells FMC horizontal Subsea tree Planned well locations Producer: typical completion schematic Sub-surface safety valve Casing Tubing Pressure gauge/chem inj. Packer Gravel-pack for sand control October 2008 Capital Markets Day Slide 94
Slide 95: Product selection philosophy: Subsea-tree example
Product selection philosophy: Subsea-tree example Operator Location Project Max WD (ft) No. of Trees First Installation • Subsea trees are a critical Anadarko Anadarko GoM GoM Green Canyon 518 Independence Hub 4280 9000 4 13 2004 2006 component in the development Anadarko Anadarko GoM GoM Power Play
Slide 96: Logistics
Logistics • Offshore Supply Base in Takoradi; capability being upgraded (4-5hrs drive from Accra) • Initial phase: supplementary support from Abidjan (established Service Companies) • Jubilee is approx 9hrs by boat and 45 minutes by helicopter from Takoradi October 2008 Capital Markets Day Slide 96
Slide 97: Jubilee wells comparison
Jubilee wells comparison • Jubilee wells are “typical” West Africa Well performance comparison, drilling phase deepwater development wells (many Water Total Days Average analogues) Rig Well Depth m Depth m Spud-TD m/day Belford • 1100 – 1500m water, 2500m Dolphin Mah-1 1320 3820 24 104 formation, no
Slide 98: Well delivery summary
Well delivery summary • Tracking and understanding market and a nimble organisation allowed early commitment to Eirik Raude as backbone for Jubilee Phase I • Clear strategy to add additional 3-5yrs rig capacity, leveraging off JV position in short-term (Aban Abraham, Atwood Hunter) • In-country logi
Slide 99: Jubilee gas commercialisation – Mike Simpson
Jubilee gas commercialisation – Mike Simpson October 2008 Capital Markets Day Slide 99
Slide 100: Jubilee Gas Production
Jubilee Gas Production Phase 1 • Jubilee gas is associated with oil • FPSO designed for 100% gas re-injection (secures oil production) • Peak rate oil production of 120kb/d yields ~120 MMcfd • Gas available for both reservoir pressure support and export (optimum mix under consideration) • Also yield
Slide 101: Regional background
Regional background • Electricity supplied from Hydro and new build dual fuel CCGT (currently Crude oil fired) • Shallow Water Tano marginal gas discoveries • Government imperative to develop gas market and infrastructure (e.g. WAGP) • Jubilee field characteristics support onshore utilisation of gas
Slide 102: Markets – location of gas supply and demand
Markets – location of gas supply and demand Tema Tema 190 190 MW MW installed installed capacity capacity (50 (50 mmcfd) mmcfd) 560 560 MW MW planned planned for for 2009/10 2009/10 (140 (140 mmcfd) mmcfd) Kumasi Kumasi 350 350 MW MW planned planned for for 2012 2012 (90 (90 mmcfd) mmcfd) 300 300 MW
Slide 103: West African Gas Pipeline
West African Gas Pipeline Shareholders: • ChevronTexaco – operator: 36.7% • NNPC: 25% • Shell Overseas Holdings: 18% • Takoradi Power Company: 16.3% • SoBeGaz (Benin): 2% • SoToGaz (Togo): 2% Foundation Customers: long term take-or-pay contracts • Volta River Authority: 123 MMscfd • Communauté Elect
Slide 104: Ghana power demand forecast 2000 - 2025
Ghana power demand forecast 2000 - 2025 20,000 Industrial - VRA • Significant energy shortages 18,000 Valco - 2007 demand estimated at 16,000 Industrial - ECG 10,152 GWh; actual available Industrial - NED power of 6,611 GWh. Industrial - New Anglogold 14,000 Household • Low points in 2002/03, due to
Slide 105: Ghana IPP development
Ghana IPP development New VRA 110 MW tri-fuel plant in Tema October 2008 Capital Markets Day Slide 105
Slide 106: Current maximum IPP gas demand in Ghana by location
Current maximum IPP gas demand in Ghana by location 900.0 • Phase I Jubilee exports ~30mmcfd 800.0 • WAGP foundation volumes for Takoradi VRA plant – no deliveries 700.0 assumed in near term 600.0 • Projected IPP capacity will absorb large volumes from Ghana offshore 500.0 mmscfd Takoradi Tema 400.0
Slide 107: Ghana LPG demand forecast - 6% pa growth
Ghana LPG demand forecast - 6% pa growth 250,000 • TEMA oil refinery produces ca 65k tonnes of LPG pa Liquids production @120 200,000 MMscfd rate • Imports currently ~ 30k tonnes pa • Jubilee Phase I will displace imports tonnes per annum 150,000 Liquids production @60 • Future phases will require e
Slide 108: Potential Ghana gas infrastructure development
Potential Ghana gas infrastructure development October 2008 Capital Markets Day Slide 108
Slide 109: Jubilee gas commercialisation
Jubilee gas commercialisation Next steps • Commercial Negotiations (by year end) - Secure access to pipeline capacity - Market prices for gas and liquids - Export facilities commercial & ownership structure • Gas export facilities sanction end 2009 • Delivery 2011 Strategic drivers • Tullow aspirati
Slide 110: Conclusion
Conclusion • Commercial Framework for gas evolving in tandem with project • Potential for significant gas and liquids business • Local and regional market constrained by lack of gas • Work with Govt/local stakeholders to develop market & infrastructure - Investment tailored to market development - P
Slide 111: Operational philosophy and infrastructure – Stuart Wheaton
Operational philosophy and infrastructure – Stuart Wheaton October 2008 Capital Markets Day Slide 111
Slide 112: Jubilee field – organisation and in-country operational context
Jubilee field – organisation and in-country operational context • Major high cost deepwater development Takoradi airbase pipeyard scheme - new to Ghana - new to Tullow • Geographical spread of project execution and JV partners • Tight personnel market • Tight service company/contractor market • Buil
Slide 113: Jubilee field – Tullow Ghana Unit Operator challenges
Jubilee field – Tullow Ghana Unit Operator challenges Near Term • Deliver all in-country operations and support in a safe, timely, cost effective and reliable manner for the production phase • Support the project’s facility implementation and handover/commissioning • Execute a major deepwater drilli
Slide 114: Jubilee field – Unit Operator operational philosophy
Jubilee field – Unit Operator operational philosophy The Tullow Ghana Unit Operator organisation has set targets which focus on high standards in EHS (industry top performance) and production uptime (e.g. 95% minimum, including both planned + unplanned downtime). To do this; • Accountable leadership
Slide 115: Jubilee field – Unit Operator organisation and the key role of contractors
Jubilee field – Unit Operator organisation and the key role of contractors Country Country & & Operational Operational Management Management Production Production Operations, Operations, Drilling, Drilling, Reservoir Management, Facilities Reservoir Management, Facilities Finance Finance && Admin, A
Slide 116: Jubilee field – organisational scale
Jubilee field – organisational scale HQ office 180-200 Tema Accra Supply base + port ~60 Esiama Takoradi FPSO 50-80 POB Jubilee Aviation; Accra- max 120 Takoradi – Rig 1 offshore 30 - 40 80-110 3-5 supply vessels 45-75 Rig 2 Initial Estimate (Phase 1) Tanker handling 80-110 Tug ~15 ~180-200 Tullow G
Slide 117: Jubilee field – organisational and infra-structure progress
Jubilee field – organisational and infra-structure progress • London based Asset team established across all disciplines - Excellent recruitment successes in deepwater experience; drilling, prodn operations, sub- surface - Majority will transition to Ghana over next 1-3 years • Personnel in-country
Slide 118: Jubilee field – organisational and infra-structure work to do
Jubilee field – organisational and infra-structure work to do • Organisation - Full scale recruitment thru’ 2008-2010 - A highly talented and enthusiastic skills pool in Ghana - Training and development of upstream staff is a long term commitment we will make - Contractor commitment also key Example
Slide 119: Continue to build on significant early progress
Continue to build on significant early progress • Clear vision of operation philosophy • Organisation build on track despite tight market • Significant progress on local infrastructure • Well engineering teams ready to receive rigs • Production operations on schedule to receive FPSO in 2010 • Signif
Slide 120: Environment, Health and Safety in Ghana – Graham Brunton
Environment, Health and Safety in Ghana – Graham Brunton October 2008 Capital Markets Day Slide 120
Slide 121: EHS in Ghana
EHS in Ghana Ghana – New Oil Region • Oil & Gas legislation developing • Immature EHS regulation • Some environmental legislation in place from mining sector • External influence important Tullow Working with Ghana to set Standards • Positive work with GNPC to shape legislation • Staff experience es
Slide 122: Tullow leadership and commitment
Tullow leadership and commitment EHS & CSR Policies • Strong leadership commitment demonstrated by Senior Management - EHS Equal but priority in conflict ISO14001 Certification - Resourcing support Leading Environmental Performance • ISO14001 certification of EMS • Environmental & Social Impact Asse
Slide 123: EHS risks in Ghana
EHS risks in Ghana Working to Fully Understand EHS Risks • Transport • Oil spill risk - Travel risks for land, sea and air - Oil spill plans • Drilling operations and construction activity - Appropriate oil spill equipment • FPSO activity and onshore Operations • Cranes, lifting and slinging - Fishi
Slide 124: EHS approach on Jubilee
EHS approach on Jubilee EHS at Heart of Development • Jubilee is not a unique project • Tullow gearing up early enough to manage operations effectively • Integration of EHS into project delivery teams & activities • A tried & tested development solution – EHS risks understood • Appointment of an exp
Slide 125: Timeline of EHS in Jubilee
Timeline of EHS in Jubilee • Environmental Issues Pre ops • Tendering • Technical Safety Design • Standardisation • Hook up and Commissioning • Bridging Well • Audit Eng • Oil Spill Response • Asset integrity Operations • Operational safety October 2008 Capital Markets Day Slide 125
Slide 126: Pre operations - environmental issues
Pre operations - environmental issues Protecting the Environment • Environmental legislation and permitting regime in place • EIA carried out and requires Govt. Approval • Project taking prudent & responsible approach to key issues: - Atmospheric emissions - Aqueous discharges - Waste management - D
Slide 127: EHS in design
EHS in design Building EHS into the facilities Jubilee Subsea layout • The functional spec approach & “minimal tweaking” • Contractor will deliver a Safety Case for the FPSO • A programme of formal safety assessments & design phase reviews will underpin the Safety Case • Subsea infrastructure will a
Slide 128: EHS in well engineering
EHS in well engineering EHS on Eirik Raude • EHS assessment part of tendering process • After contract award - EHS meeting convened - Bridging process established • EHS audit and inspection programme • EHS Advisors on board • Ongoing EHS assessment and feedback • 3 year contract brings long term ben
Slide 129: EHS in operations
EHS in operations Preparation for First Production • Suitable EHS arrangements for future operations phase are being progressed • Focus on constructability, operability and maintainability of facilities • EHS systems are in place to deal with immediate levels of activity • Set up to accommodate plan
Slide 130: Summary: EHS is Important to Tullow
Summary EHS is Important to Tullow • Ghana has a great opportunity as it embraces the oil industry • Getting the right Ghanaian legislative structure is important • Tullow Ghana has a great opportunity to get EHS right in a large offshore project • Tullow Team organised and prepared to deliver high
Slide 131: Community development in Ghana – Kofi Esson
Community development in Ghana – Kofi Esson October 2008 Capital Markets Day Slide 131
Slide 132: Overview
Overview • Introduction • Group Strategy and Approach • Existing Programmes in Ghana • Long Term CSR Strategy for Ghana • Conclusion October 2008 Capital Markets Day Slide 132
Slide 133: Strategy & approach
Strategy & approach Active leadership from Senior Management • Groupwide budget and project selection/monitoring - CEO, CFO, COO involvement • In country visits and clear strategy • Identification of possible solutions • Enables Tullow Team to deliver Stakeholder engagement • Active engagement with
Slide 134: CSR strategy
CSR strategy Tullow ‘Working with Communities’ initiative • Basic needs, Health & Hygiene • Children & Education • Development of local enterprise • Conservation Guidance for Identifying Suitable Projects • Balance of short and long term commitments - Nature and Phase of Tullow’s activity - Sustaina
Slide 135: Developing CSR programme in Ghana
Developing CSR programme in Ghana Ghana - Identifying and addressing material issues • 3.1% HIV/Aids adult prevalence in local communities. (Source: USAID) • Majority without access to regular & clean water source. Sanitation coverage only 18%. • 5.7% infant mortality rates (Source: United Nations)
Slide 136: Provision of water
Provision of water • Provision of mechanised and hand pumped water wells across the Jomoro district some with storage tanks • Using local contractors - wells support 13,000 people • 2008 – 14 water wells serving approximately 16,420 community members • Community awareness and education programmes ca
Slide 137: 2007/8 - Improving education standards
2007/8 - Improving education standards The Half Assini Secondary School, Jomoro Western Region • Half Assini Secondary School is the principal high school in the region. • Engagement and collaboration with the Director of Education for the Western Region. Project aligned with the District Assembly’s
Slide 138: Ongoing - improving ophthalmic standards
Ongoing - improving ophthalmic standards Tullow is Partnered with Sightsavers International and the Ministry of Health. River Blindness Programme • Raises awareness of blindness and treatment programme amongst local communities • Distributors and community health workers trained to take on responsib
Slide 139: Longer term CSR strategy
Longer term CSR strategy Jubilee project Guarantees Tullow’s Long Term Future in Ghana • Allows formulation of 5 year plan 2009-14 for Western Region • Cooperation and Support of Indigenous Agencies - Ghana Health Service - Ghana Education Service - Community Water and Sanitation Agency Why Western
Slide 140: Why is CSR important for Tullow?
Why is CSR important for Tullow? Tullow’s ‘Social Licence to Operate’ • Reputation as a good neighbour to the local community • Reputation as a responsible operator with the Government/ Partners • Clear demonstration of long term commitment to a region • Increase local content as we become establish
Slide 141: Conclusions – Andrew Fisher
Conclusions – Andrew Fisher October 2008 Capital Markets Day Slide 141
Slide 142: Summary
Summary • World-class discoveries, commanding acreage position in Ghana • Development, appraisal and testing of exploration upside proceeding at pace • Initial organisation, infrastructure, equipment in place • Developing a business and infrastructure for the long term • Aligned and effective partne
Slide 143: Tullow Oil plc
Tullow Oil plc 3rd Floor, Building 11 Chiswick Park, 566 Chiswick High Road London, W4 5YS Tel: +44 20 8996 1000 Fax+44 20 8994 5332 October 2008 Capital Markets Day Slide 143