2008 saw a very strong performance from Tullow’s Production and Development (P&D) assets and team, including the best Environment, Health and Safety (EHS) performance in the Group’s history. Average working interest production was 66,600 boepd, with good output from key producing assets in Africa.

Operating capability continued to be enhanced, specifically in Ghana where deepwater operating skills and an in-country organisation were put in place to initiate Phase 1 development of the Jubilee field.

2009 Challenges

The two main P&D priorities are:

• To remain on track for Jubilee first oil in the second half of 2010 and to evaluate further phases of development. Deepwater development drilling is already under way and achieving excellent results; and
• To deliver a phased basin development and export plan to fast-track the commercialisation of the significant discovered, and yet to be discovered, resources in the Lake Albert Rift Basin.

Beyond these two key developments, P&D will be ensuring that existing oil and gas production is delivered safely and efficiently with forecast average working interest production of 60,000 boepd for 2009. This is a planned reduction from 2008 as a result of the focused allocation of capital and resources to Ghana and Uganda in 2009, leading to the deferral of investment until 2010 in other areas of the Group’s portfolio.

Key risks

The key operational risks Tullow is managing are: execution risk on the Jubilee development; adequate resourcing for the increased scale of the business; effective management of mature assets; and maintaining EHS performance.

Outlook

This is a very exciting time for the P&D team with responsibility for fast-tracking two world-class basins. In 2009, P&D will also position the Group to benefit from the easing of supply constraints and costs expected during the year.