Directors' Remuneration Report

Directors’ interests in the share capital of the Company

The interests (all of which were beneficial) of the Directors who held office at 31 December 2007 were:

Directors' interests in the share capital of the Company



Director
Ordinary
shares
31 December
2007
Ordinary
shares
1 January
2007
Aidan Heavey 6,000,000 6,000,000
Tom Hickey 104,070 101,560
Graham Martin 1,102,005 1,102,005
Angus McCoss
Paul McDade 15,578 15,578
Matthew O’Donoghue 1,889,771 1,889,771
Pat Plunkett 1,229,326 1,229,326
Rohan Courtney
David Bamford 13,445 10,695
Steven McTiernan
Clare Spottiswoode
David Williams 5,000 5,000
Note:
Other than as set out in the notes to the tables below, there have been no changes in the interests of any Director between 1 January 2008 and the date of this report.
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Tullow Oil UK Share Incentive Plan and Tullow Oil Irish Share Incentive Plan

Details of shares purchased and awarded to Executive Directors in accordance with the terms of the Irish SIP and the UK SIP. A brief description of the SIPs is set out in the Share incentive arrangements.





Director




Plan

Shares
held
1 Jan
2007

Partnership shares acquired in year

Matching shares awarded in year


Shares released
in year
Total
shares
held
31 Dec
2007
Tom Hickey Irish SIP 4,550 413 413 (2,510) 2,866
Graham Martin UK SIP 5,166 381 381 5,928
Angus McCoss UK SIP 196 381 381 958
Paul McDade UK SIP 5,166 381 381 5,928
Note:
Graham Martin, Angus McCoss and Paul McDade each acquired 63 Partnership shares and were awarded 63 matching shares on 2 January 2008.
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Performance Share Plan 2005 (PSP)

Details of conditional awards over ordinary shares granted to Executive Directors for nil consideration under the PSP.




Director


Award
grant date


As at
01.01.07


Granted
in year


Vested
in year


As at
31.12.07


Vesting
date
Aidan Heavey 29.06.05 347,755 347,755 29.06.08
30.03.06 219,512 219,512 30.03.09
  22.03.07 230,567 230,567 22.03.10
    567,267 230,567 797,834  
Tom Hickey 29.06.05 213,877 213,877 29.06.08
30.03.06 139,885 139,885 30.03.09
  22.03.07 147,412 147,412 22.03.10
    353,762 147,412 501,174  
Graham Martin 29.06.05 213,877 213,877 29.06.08
30.03.06 129,125 129,125 30.03.09
  22.03.07 130,402 130,402 22.03.10
    343,002 130,402 473,404  
Angus McCoss 27.04.06 100,230 100,230 27.04.09
  22.03.07 90,539 90,539 22.03.10
    100,230 90,539 190,769  
Paul McDade 29.06.05 188,571 188,571 29.06.08
30.03.06 118,364 118,364 30.03.09
  22.03.07 90,539 90,539 22.03.10
    306,935 90,539 397,474  
Matthew O’Donoghue 29.06.05 188,571 188,571 29.06.08
30.03.06 107,604 107,604 30.03.09
  22.03.07 72,188 72,188 22.03.10
    296,175 72,188 368,363  
Total   1,967,371 761,647 2,729,018  
Notes:
 
1
The awards of conditional shares made in 2007 equated to shares worth 150% of salary for each Executive Director based on the share price for the dealing day preceding the date of grant. The Tullow share price on the date of grant of the awards made on 22 March 2007 was 371.5p.
2
Under the PSP, 50% of awards are subject to a TSR condition compared to the constituents of the FTSE 250 Index (excluding Investment Trusts) and the other 50% of the award is subject to a TSR condition compared to a specific comparator group. Full details are set out in the Share incentive arrangements.
3
The PSP awards made in June 2005 reached the end of their performance period on 31 December 2007. The Remuneration Committee determined that both parts of the relevant performance condition were met in full, as the Company was ranked in the upper quartile compared to both the relevant comparator groups, and the underlying performance of the Company was determined to be a fair reflection of the Company's TSR. Accordingly, the Executive Directors will be eligible to receive their awards on 29 June 2008, the third anniversary of grant, subject to continued employment.
4
Adrian Nel retired from the Board on 31 May 2006. As disclosed last year, he was eligible to receive a pro-rated PSP award for his period of service relative to the total vesting period, based on performance over the whole period. As disclosed above, the performance condition for the 2005 awards was met in full, so he will be eligible to receive 151,904 shares on 29 June 2008, the third anniversary of grant in respect of that award.
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Deferred Share Bonus Plan (DSBP)

Details of awards over ordinary shares granted to Executive Directors for nil consideration under the DSBP.


Director
Award
grant date
As at
01.01.07
Granted
in year
Vested
in year
As at
31.12.07
Vesting
date
Aidan Heavey 30.03.06 20,988 20,988 01.01.09
  18.01.07 42,714 42,714 01.01.10
    20,988 42,714 63,702  
Tom Hickey 30.03.06 12,908 12,908 01.01.09
  18.01.07 27,220 27,220 01.01.10
    12,908 27,220 40,128  
Graham Martin 30.03.06 12,908 12,908 01.01.09
  18.01.07 25,126 25,126 01.01.10
    12,908 25,126 38,034  
Paul McDade 30.03.06 19,806 19,806 01.01.09
  18.01.07 7,260 7,260 01.01.10
    19,806 7,260 27,066  
Matthew O’Donoghue 30.03.06 13,177 13,177 01.01.09
  18.01.07 2,147 2,147 01.01.10
    13,177 2,147 15,324  
Total   79,787 104,467 184,254  
Notes:
 
1
The awards of shares made in 2007 equated to shares worth the amount of bonus deferred into shares for 2006 based on the share price for the dealing day preceding the date of grant. The share price on the date of grant of the award was 396p.
2
Further details of the DSBP are set out in the Annual bonus section of this report in the Executive Directors’ remuneration.
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Share options

Details of share options granted to Executive Directors:

Share options
Director Scheme Grant
date
As at
01.01.07
Granted during
year
Exercised during
year
As at 31.12.07 Exercise price Date from which exercisable Last date exercisable
Aidan Heavey 1998 30.04.99 1,230,230 1,230,230 €0.84 30.04.02 29.04.09
  2000 10.10.01 550,000 550,000 80p 10.10.04 09.10.11
  2000 06.10.03 600,000 600,000 85p 06.10.06 05.10.13
  2000 20.09.04 450,000 450,000 131p 20.09.07 19.09.14
      2,830,230 2,830,230      
Tom Hickey 1998 02.05.00 220,000 220,000 61p 02.05.03 01.05.10
  2000 10.10.01 450,000 450,000 80p 10.10.04 09.10.11
  2000 06.10.03 290,000 290,000 85p 06.10.06 05.10.13
  2000 20.09.04 350,000 350,000 131p 20.09.07 19.09.14
      1,310,000 1,310,000      
Graham Martin 1998 30.04.99 988,426 988,426 €0.84 30.04.02 29.04.09
  2000 10.10.01 380,000 380,000 80p 10.10.04 09.10.11
  2000 06.10.03 400,000 400,000 85p 06.10.06 05.10.13
  2000 20.09.04 190,000 190,000 131p 20.09.07 19.09.14
      1,958,426 1,958,426      
Paul McDade 2000 18.06.01 80,000 80,000 95p 18.06.04 17.06.11
  2000 10.10.01 50,000 50,000 80p 10.10.04 09.10.11
  2000 06.10.03 220,000 220,000 85p 06.10.06 05.10.13
      350,000 - 350,000      
Matthew O’Donoghue 1998 30.04.99 699,958 699,958 €0.84 30.04.02 29.04.09
  2000 10.10.01 250,000 250,000 80p 10.10.04 09.10.11
  2000 06.10.03 330,000 330,000 85p 06.10.06 05.10.13
      1,279,958 1,279,958      
Total     7,728,614 7,728,614      

Notes:

1
The Schemes under which these options were granted are: 1998 – Options granted under the Tullow Oil 1998 Executive Share Option Scheme (‘1998 Scheme’) and 2000 – Options granted under the Tullow Oil 2000 Executive Share Option Scheme (‘2000 Scheme’).
2
No performance conditions attach to 1998 Scheme Options. The performance condition that attaches to options granted under the 2000 Scheme requires Tullow’s TSR to exceed that of the median company of the FTSE 250 (excluding Investment Trusts) over the three-year period from the date of grant. All these performance conditions have now been satisfied and so the options are fully exercisable.
3
Options shown with an exercise price denominated in Euro were granted on or before 30 April 1999 with an exercise price in IR£. On conversion of IR£ to Euro effective 1 January 2002, the exercise price for each such option was converted from IR£ into Euro by dividing the original IR£ exercise price per share by the fixed Irish Pound/Euro conversion rate. All options granted after 30 April 1999 were granted with an exercise price denominated in sterling. Options are granted for nil consideration. Options must be exercised in the currency in which the grants were made.
4
During 2007, the highest mid-market price of the Company’s shares was 682.5p and the lowest was 349p. The year end price was 651.5p.
Clare Spottiswoode - signature

Clare Spottiswoode
Chairman of the Remuneration Committee
11 March 2008

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