Tullow CEO, Rahul Dhir issues statement ahead of its AGM
Tullow Oil plc (Tullow) issues the following statement from its CEO, Rahul Dhir, ahead of its Annual General Meeting (AGM) today. Due to Covid-19 restrictions, the meeting will be held via an audio cast. Instructions for joining the audio cast can be found at the end of this statement or within the Notice of Meeting.
Rahul Dhir, Chief Executive Officer, Tullow Oil plc, commented today:
“Dear Shareholders,
Today will be my first AGM since joining Tullow as CEO and I wanted to take the opportunity to reflect on my first year and provide an update on recent events and current operations.
A year of significant change
When I joined in July last year, I said that I was excited at the opportunity to lead Tullow and re-build an exceptional company. We have since taken necessary steps to transform the business and, after a year of significant change, I believe we have emerged as a new company with a fundamentally different approach. We have shifted our focus away from exploration and development and long-cycle capital commitments to a production focused company with a robust, cash generative business plan.
At our Capital Markets Day in November 2020 I laid out our 10-year business plan which focuses over 90% of our capital investment in our high margin production assets in West Africa. This will generate material cashflow to self-fund high return, fast payback investment opportunities and reduce debt – even at low oil prices.
The delivery of this business plan required us to address several fundamental aspects of the business and I am proud to report that we have made excellent progress on the following:
· Reducing our cost base: we are delivering cost savings across the business including annual G&A cash savings of $125 million. We are becoming a performance focused organisation where every barrel matters and every dollar counts.
· Improving operational performance: our ongoing operational turnaround is delivering more reliable and consistent operating performance with 98% average uptime year-to-date at Jubilee and TEN and better utilisation of our existing infrastructure.
· Rigorous capital allocation: we are focusing on high return and fast payback investments in our production assets and have significantly reduced capital allocation to long-cycle projects.
· Reducing our debt: We have sold our interests in Uganda, Equatorial Guinea and the Dussafu Marin permit in Gabon, raising over $700 million in proceeds. This asset sale programme puts us well on the way to realising c. $1 billion over two years through assets sales and cost reductions.
· Simplifying our capital structure: we recently completed a comprehensive debt refinancing which gives us the financial stability to deliver our business plan.
· Strong ESG focus: we announced in March that we aim to become Net Zero (Scope 1 & 2) by 2030 as part of our commitment to sustainability. In addition, we maintain our commitment to social investment and developing local content.
These changes required a great deal of work from everyone at Tullow and I would like to recognise the vital part that our Chair, Dorothy Thompson, played in making Tullow a much more efficient and effective organisation. Dorothy led the Company through its most turbulent time and I thank her on behalf of all our staff for her tireless efforts in securing Tullow’s future.
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