Tullow prioritizes disclosure takes tighter stand against corruption

aiden-heavey

One of the major highlights that shine out of the just released Tullow Oil plc’s Corporate Responsibility Report 2012 is the emphasis on disclosure a development the company believes will go a long way in clearing the company’s corporate image in light of the various accusations of corruption that the company faced in 2012.

 

The report, named Creating Shared prosperity that was released on Wednesday 29th May 2013 comes at a time when a cross section of analysts have began questioning whether Uganda will survive the misfortune of the resource curse after the twin monsters of bribery and corruption have began veering their ugly heads into oil matters at these early stages of production.

 

As we all may guess, Oil is not a renewable resource, but it is a remarkable source of wealth creation that can kick-start a country on the path to sustainable economic growth. However, like the Executive Chairman Tullow Oil, Simon Thompson argues “for oil wealth to be a blessing, it must be well-managed, and transparency is a critical first step towards achieving this.”

 

Transparency also creates the opportunity to more effectively manage expectations of what socio-economic impact the discovery of oil can have and over what time frame. Further, it provides greater insight into how the industry operates and demonstrates the range of economic contributions that oil can bring to a country.

 

And Tullow Oil insists that it is here to assist rather than conspire against the promoters of transparency.

 

Thus, the Tullow Oil Chief Executive Officer, Aidan Heavey is quick to affirm this commitment and he says “When I started Tullow Oil in 1986, one of my founding principles was zero tolerance of bribery and corruption. That has not changed over the course of nearly 30 years.”

 

“Allegations of bribery in Uganda, which we first faced and fully defended in 2010, have resurfaced again recently. To be crystal clear, Tullow has not, does not, and will not pay bribes or consider paying bribes under any circumstances.” Heavey asserts

 

“We not only have a zero tolerance policy with regard to bribery and corruption but also strive to be an example and an advocate in the fight against it.”

 

He says disclosure is the ‘best vaccine against corruption’.”  While this analogy illustrates that there may not be a cure to the huge challenge of corruption, the Chief Executive Officer is confident that using this measure Tullow Oil can increase immunity against the vice.

 

The C.EO says that Tullow Oil is publishing details of their payments to governments, employees, local suppliers, shareholders and their social investment expenditure for 2012.

 

“In addition, we are publishing payments to governments in 12 individual countries covering our major areas of operation.” Heavey reveals.

 

The Tullow Oil boss accedes to the fact that disclosure is a business and social responsibility issue, and transparency in all its forms is important.

 

“Therefore, the debate should focus on what is disclosed, not on whether the information should be disclosed.” The C.E.O stresses.

 

Ian Springett, the Chief Financial Officer speaks in the same light and he says, “In 2012, we are disclosing payments to major stakeholder groups including all our payments and taxes to governments, monetary or in kind. Typically, over the life cycle of a project some 60% to 80% of net oil revenues after costs accrue to host governments.”

 

“We are also disclosing other areas of economic contribution such as payroll, local content expenditure, dividends to shareholders and social investment.” Springett states.

 

“At a regional and country level we are disclosing all payments and taxes to government in relation to our major development projects and key producing assets.”

 

Tullow Oil plc is a dorminant oil company in Africa, with over 150 licences across 25 countries, including 17 countries in Africa. Over the past seven years, Tullow has discovered four new oil basins – in Uganda in 2006, in Ghana in 2007, in French Guiana in 2011 and most recently in Kenya in 2012. The Jubilee field offshore Ghana is now in production and, subject to government approval, Uganda will shortly progress to the development phase. Both French Guiana and Kenya are still in the exploration and appraisal phase.

 

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