Company Quick10K Filing
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20-F 2019-12-31 Filed 2020-03-20
20-F 2018-12-31 Filed 2019-03-20
20-F 2017-12-31 Filed 2018-03-16
20-F 2016-12-31 Filed 2017-03-17
20-F 2015-12-31 Filed 2016-03-16
20-F 2014-12-31 Filed 2015-03-26
20-F 2013-12-31 Filed 2014-03-27
20-F 2012-12-31 Filed 2013-03-28
20-F 2011-12-31 Filed 2012-03-26
20-F 2010-12-31 Filed 2011-03-28
20-F 2009-12-31 Filed 2010-04-01

TOT 20F Annual Report

Item 1. Identity of Directors, Senior Management and Advisers
Item 2. Offer Statistics and Expected Timetable
Item 3. Key Information
Item 4. Information on The Company
Item 4A. Unresolved Staff Comments
Item 5. Operating and Financial Review and Prospects
Item 6. Directors, Senior Management and Employees
Item 7. Major Shareholders and Related Party Transactions
Item 8. Financial Information
Item 9. The Offer and Listing
Item 10. Additional Information
Item 11. Quantitative and Qualitative Disclosures About Market Risk
Item 12. Description of Securities Other Than Equity Securities
Item 13. Defaults, Dividend Arrearages and Delinquencies
Item 14. Material Modifications To The Rights of Security Holders and Use of Proceeds
Item 15. Controls and Procedures
Item 16A. Audit Committee Financial Expert
Item 16B. Code of Ethics
Item 16C. Principal Accountant Fees and Services
Item 16D. Exemptions From The Listing Standards for Audit Committees
Item 16E. Purchases of Equity Securities By The Issuer and Affiliated Purchasers
Item 16F. Change in Registrant's Certifying Accountant
Item 16G. Corporate Governance
Item 17. Financial Statements
Item 18. Financial Statements
Item 19. Exhibits
EX-1 dex1.htm
EX-12.1 dex121.htm
EX-12.2 dex122.htm
EX-13.1 dex131.htm
EX-13.2 dex132.htm
EX-15 dex15.htm

Total Earnings 2009-12-31

Balance SheetIncome StatementCash Flow

20-F 1 d20f.htm FORM 20-F Form 20-F
Table of Contents

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

Form 20-F

 

 

(Mark One)

 

¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from                  to                 

OR

¨ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report

Commission file number: 1-10888

 

 

TOTAL S.A.

(Exact Name of Registrant as Specified in Its Charter)

Republic of France

(Jurisdiction of Incorporation or Organization)

2, place Jean Millier

La Défense 6

92400 Courbevoie

France

(Address of Principal Executive Offices)

Patrick de La Chevardière

Chief Financial Officer

TOTAL S.A.

2, place Jean Millier

La Défense 6

92400 Courbevoie

France

Tel: +33 (0)1 47 44 45 46

Fax: +33 (0)1 47 44 49 44

(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)

 

 

Securities registered or to be registered pursuant to Section 12(b) of the Act.

 

 

 

Title of each class

 

Name of each exchange on which registered

Shares

American Depositary Shares

 

New York Stock Exchange*

New York Stock Exchange

 

* Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

2,348,422,884 Shares, par value 2.50 each, as of December 31, 2009

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    Yes  ¨    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).**

Yes  ¨    No  ¨

 

** This requirement is not currently applicable to the registrant.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer  x

   Accelerated filer  ¨    Non-accelerated filer  ¨

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

 

U.S. GAAP  ¨

 

International Financial Reporting Standards as issued by the International

Accounting Standards Board  x

  Other  ¨

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.    Item 17  ¨     Item 18  ¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

 

 


Table of Contents

TABLE OF CONTENTS

 

          Page

CERTAIN TERMS

   iii

ABBREVIATIONS

   iv

CONVERSION TABLE

   v

Item 1.

   Identity of Directors, Senior Management and Advisers    1

Item 2.

   Offer Statistics and Expected Timetable    1

Item 3.

   Key Information    1
   Selected Financial Data    1
   Exchange Rate Information    3
   Risk Factors    4

Item 4.

   Information on the Company    8
   History and Development    8
   Business Overview    9
   Other Matters    50

Item 4A.

   Unresolved Staff Comments    61

Item 5.

   Operating and Financial Review and Prospects    62

Item 6.

   Directors, Senior Management and Employees    76
   Directors and Senior Management    76
   Compensation    84
   Corporate Governance    104
   Employees and Share Ownership    109

Item 7.

   Major Shareholders and Related Party Transactions    112

Item 8.

   Financial Information    114

Item 9.

   The Offer and Listing    119

Item 10.

   Additional Information    121

Item 11.

   Quantitative and Qualitative Disclosures About Market Risk    130

Item 12.

   Description of Securities Other than Equity Securities    131

Item 13.

   Defaults, Dividend Arrearages and Delinquencies    132

Item 14.

   Material Modifications to the Rights of Security Holders and Use of Proceeds    132

Item 15.

   Controls and Procedures    132

Item 16A.

   Audit Committee Financial Expert    133

Item 16B.

   Code of Ethics    133

Item 16C.

   Principal Accountant Fees and Services    133

Item 16D.

   Exemptions from the Listing Standards for Audit Committees    133

Item 16E.

   Purchases of Equity Securities by the Issuer and Affiliated Purchasers    134

Item 16F.

   Change in Registrant’s Certifying Accountant    134

Item 16G.

   Corporate Governance    135

Item 17.

   Financial Statements    137

Item 18.

   Financial Statements    137

Item 19.

   Exhibits    138

 

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Basis of Presentation

Financial information included in this Annual Report is presented according to International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and IFRS as adopted by the European Union (EU) as of December 31, 2009.

Statements Regarding Competitive Position

Unless otherwise indicated, statements made in “Item 4. Information on the Company” referring to TOTAL’s competitive position are based on the Company’s estimates, and in some cases rely on a range of sources, including investment analysts’ reports, independent market studies and TOTAL’s internal assessments of market share based on publicly available information about the financial results and performance of market participants.

Additional Information

This Annual Report on Form 20-F reports information primarily regarding TOTAL’s business and operations and financial information relating to the fiscal year ended December 31, 2009. For more recent updates regarding TOTAL, you may read and copy any reports, statements or other information TOTAL files with the United States Securities and Exchange Commission (“SEC”). All of TOTAL’s SEC filings made after December 31, 2001, are available to the public at the SEC Web site at http://www.sec.gov and from certain commercial document retrieval services. See also “Item 10. Additional Information — Documents on Display”.

 

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CERTAIN TERMS

Unless the context indicates otherwise, the following terms have the meanings shown below:

 

“acreage”

The total area, expressed in acres, over which TOTAL has interests in exploration or production.

 

“ADRs”

American Depositary Receipts evidencing ADSs.

 

“ADSs”

American Depositary Shares representing the shares of TOTAL S.A.

 

“barrels”

Barrels of crude oil , natural gas liquids (NGL) or bitumen.

 

“Company”

TOTAL S.A.

 

“condensates”

Condensates are a mixture of hydrocarbons that exist in a gaseous phase at original reservoir temperature and pressure, but that, when produced, exist in a liquid phase at surface temperature and pressure. Condensates are sometimes referred to as C5+.

 

crude oil

Crude oil is a mixture of compounds (mainly pentanes and heavier hydrocarbons) that exists in a liquid phase at original reservoir temperature and pressure and remains liquid at atmospheric pressure and ambient temperature. “Crude oil” or “oil” are sometimes used as generic terms to designate crude oil plus natural gas liquids (NGL).

 

“Depositary”

The Bank of New York Mellon.

 

“Depositary Agreement”

The depositary agreement pursuant to which ADSs are issued, a copy of which is attached as Exhibit 1 to the registration statement on Form F-6 (Reg. No. 333-149331) filed with the SEC on February 21, 2008.

 

“Group”

TOTAL S.A. and its subsidiaries and affiliates. The terms TOTAL and Group are used interchangeably.

 

“hydrocracker”

A refinery unit which uses a catalyst and extraordinarily high pressure, in the presence of surplus hydrogen, to shorten molecules.

 

“liquids”

Liquids consist of crude oil, bitumen and natural gas liquids (NGL).

 

“LNG”

Liquefied natural gas.

 

“LPG”

Liquefied petroleum gas is a mixture of hydrocarbons, the principal components of which are propane and butane, in a gaseous state at atmospheric pressure, but which is liquefied under moderate pressure and ambient temperature

 

“NGL”

Natural gas liquids consist of condensates and liquefied petroleum gas (LPG).

 

“oil and gas”

Generic term which includes all hydrocarbons (e.g., crude oil, natural gas liquids (NGL), bitumen and natural gas).

 

“proved reserves”

Proved oil and gas reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations, prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The full definition of

 

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“proved reserves” that we are required to follow in presenting such information in our financial results and elsewhere in reports we file with the SEC is found in Rule 4-10 of Regulation S-X under the U.S. Securities Act of 1933, as amended (including as amended by the SEC “Modernization of Oil and Gas Reporting” Release No. 33-8995 of December 31, 2008).

 

“proved developed reserves”

Proved developed oil and gas reserves are proved reserves that can be expected to be recovered (i) through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and (ii) through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means not involving a well. The full definition of “developed reserves” that we are required to follow in presenting such information in our financial results and elsewhere in reports we file with the SEC is found in Rule 4-10 of Regulation S-X under the U.S. Securities Act of 1933, as amended (including as amended by the SEC “Modernization of Oil and Gas Reporting” Release No. 33-8995 of December 31, 2008).

 

“proved undeveloped reserves”

Proved undeveloped oil and gas reserves are proved reserves that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion. The full definition of “undeveloped reserves” that we are required to follow in presenting such information in our financial results and elsewhere in reports we file with the SEC is found in Rule 4-10 of Regulation S-X under the U.S. Securities Act of 1933, as amended (including as amended by the SEC “Modernization of Oil and Gas Reporting” Release No. 33-8995 of December 31, 2008).

 

“steam cracker”

A petrochemical plant that turns naphtha and light hydrocarbons into ethylene, propylene, and other chemical raw materials.

 

“TOTAL”

TOTAL S.A. and its subsidiaries and affiliates. We use such term interchangeably with the term Group. When we refer to the parent holding company alone, we use the term TOTAL S.A. or the Company.

 

“trains”

Facilities for converting, liquefying, storing and off-loading natural gas.

 

“ERMI”

ERMI is an indicator intended to represent the refining margin after variable costs for a theoretical complex refinery located around Rotterdam in Northern Europe that processes a mix of crude oil and other inputs commonly supplied to this region to produce and market the main refined products at prevailing prices in the region.

 

“turnarounds”

Temporary shutdowns of facilities for maintenance, overhaul and upgrading.

ABBREVIATIONS

 

b

   barrel    k    thousand

cf

   cubic feet    M    million

boe

   barrel of oil equivalent    B    billion

t

   metric ton    W    watt

m3

   cubic meter    GWh    gigawatt-hour

/d

   per day    TWh    terawatt-hour

/y

   per year    Wp    watt peak
      Btu    British thermal unit

 

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CONVERSION TABLE

 

1 acre

   = 0.405 hectares  

1 b

   = 42 U.S. gallons  

1 boe

   = 1 b of crude oil   = 5,490 cf of gas in 2009(a)
     = 5,505 cf of gas in 2008
     = 5,508 cf of gas in 2007

1 b/d of crude oil

   = approximately 50 t/y of crude oil  

1 Bm3/y

   = approximately 0.1 Bcf/d  

1 m3

   = 35.3147 cf  

1 kilometer

   = approximately 0.62 miles  

1 ton

   = 1 t   = 1,000 kilograms (approximately 2,205 pounds)

1 ton of oil

   = 1 t of oil   = approximately 7.5 b of oil (assuming a specific gravity of 37° API)

1 t of LNG

   = approximately 48 kcf of gas  

1 Mt/y LNG

   = approximately 131 Mcf/d  

 

(a) Natural gas is converted to barrels of oil equivalent using a ratio of cubic feet of natural gas per one barrel. This ratio is based on the actual average equivalent energy content of TOTAL’s natural gas reserves during the applicable periods, and is subject to change. The tabular conversion rate is applicable to TOTAL’s natural gas reserves on a group-wide basis.

 

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Cautionary Statement Concerning Forward-Looking Statements

TOTAL has made certain forward-looking statements in this document and in the documents referred to in, or incorporated by reference into, this Annual Report. Such statements are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of the management of TOTAL and on the information currently available to such management. Forward-looking statements include information concerning forecasts, projections, anticipated synergies, and other information concerning possible or assumed future results of TOTAL, and may be preceded by, followed by, or otherwise include the words “believes”, “expects”, “anticipates”, “intends”, “plans”, “targets”, “estimates” or similar expressions.

Forward-looking statements are not assurances of results or values. They involve risks, uncertainties and assumptions. TOTAL’s future results and share value may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these results and values are beyond TOTAL’s ability to control or predict. Except for its ongoing obligations to disclose material information as required by applicable securities laws, TOTAL does not have any intention or obligation to update forward-looking statements after the distribution of this document, even if new information, future events or other circumstances have made them incorrect or misleading.

You should understand that various factors, certain of which are discussed elsewhere in this document and in the documents referred to in, or incorporated by reference into, this document, could affect the future results of TOTAL and could cause results to differ materially from those expressed in such forward-looking statements, including:

 

   

material adverse changes in general economic conditions or in the markets served by TOTAL, including changes in the prices of oil, natural gas, refined products, petrochemical products and other chemicals;

   

changes in currency exchange rates and currency devaluations;

   

the success and the economic efficiency of oil and natural gas exploration, development and production programs, including, without limitation, those that are not controlled and/or operated by TOTAL;

   

uncertainties about estimates of changes in proven and potential reserves and the capabilities of production facilities;

   

uncertainties about the ability to control unit costs in exploration, production, refining and marketing (including refining margins) and chemicals;

   

changes in the current capital expenditure plans of TOTAL;

   

the ability of TOTAL to realize anticipated cost savings, synergies and operating efficiencies;

   

the financial resources of competitors;

   

changes in laws and regulations, including tax and environmental laws and industrial safety regulations;

   

the quality of future opportunities that may be presented to or pursued by TOTAL;

   

the ability to generate cash flow or obtain financing to fund growth and the cost of such financing and liquidity conditions in the capital markets generally;

   

the ability to obtain governmental or regulatory approvals;

   

the ability to respond to challenges in international markets, including political or economic conditions, including international armed conflict, and trade and regulatory matters (including actual or proposed sanctions on companies that conduct business in certain countries);

   

the ability to complete and integrate appropriate acquisitions, strategic alliances and joint ventures;

   

changes in the political environment that adversely affect exploration, production licenses and contractual rights or impose minimum drilling obligations, price controls, nationalization or expropriation, and regulation of refining and marketing, chemicals and power generating activities;

   

the possibility that other unpredictable events such as labor disputes or industrial accidents will adversely affect the business of TOTAL; and

   

the risk that TOTAL will inadequately hedge the price of crude oil or finished products.

For additional factors, you should read the information set forth under “Item 3. Risk Factors”, “Item 4. Information on the Company — Other Matters”, “Item 5. Operating and Financial Review and Prospects” and “Item 11. Quantitative and Qualitative Disclosures About Market Risk”.

 

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ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

SELECTED FINANCIAL DATA

 

 

 

The following table presents selected consolidated financial data for TOTAL on the basis of International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and IFRS as adopted by the European Union for the years ended December 31, 2009, 2008, 2007, 2006 and 2005. The historical consolidated financial statements of

TOTAL for these periods, from which the financial data presented below for such periods are derived, have been audited by Ernst & Young Audit and KPMG S.A., independent registered public accounting firms, and the Company’s auditors. All such data should be read in conjunction with the Consolidated Financial Statements and the Notes thereto included elsewhere herein.


 

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SELECTED CONSOLIDATED FINANCIAL DATA

 

(M, except per share data)   2009     2008   2007   2006   2005

INCOME STATEMENT DATA

         

Revenues from sales

  112,153      160,331   136,824   132,689   117,057

Net income, Group share

  8,447      10,590   13,181   11,768   12,273

Earnings per share(a)

  3.79      4.74   5.84   5.13   5.23

Fully diluted earnings per share(a)

  3.78      4.71   5.80   5.09   5.20

CASH FLOW STATEMENT DATA(b)(c)

         

Cash flow from operating activities

  12,360      18,669   17,686   16,061   14,669

Total expenditures

  13,349      13,640   11,722   11,852   11,195

BALANCE SHEET DATA(c)

         

Total assets

  127,753      118,310   113,541   105,223   106,144

Non-current financial debt

  19,437      16,191   14,876   14,174   13,793

Minority interests

  987      958   842   827   838

Shareholders’ equity — Group share

  52,552      48,992   44,858   40,321   40,645

Common shares

  5,871      5,930   5,989   6,064   6,151

DIVIDENDS

         

Dividend per share (euros)(a)

  2.28 (d)    2.28   2.07   1.87   1.62

Dividend per share (dollars)(a)

  $3.29 (d)(e)    $2.91   $3.14   $2.46   $1.99

COMMON SHARES(f)

         

Average number outstanding of common shares 2.50 par value (shares undiluted)(g)

  2,230,559,211      2,234,856,551   2,255,294,231   2,293,063,190   2,347,222,792

Average number outstanding of common shares 2.50 par value (shares diluted)(g)

  2,237,292,199      2,246,658,542   2,274,384,984   2,312,304,652   2,362,028,860

 

(a) Historical figures regarding per share information for 2005 have been recalculated to reflect the four-for-one stock split on May 18, 2006.
(b) See Consolidated Statement of Cash Flows included in the Consolidated Financial Statements.
(c) Comparative balance sheets and cash flow information for 2005 and (in the case of cash flow information) 2006 include Arkema, which was spun off on May 12, 2006.
(d) Subject to approval by the shareholders’ meeting on May 21, 2010.
(e) Estimated dividend in dollars includes the interim dividend of $1.695 paid in November 2009 and the proposed final dividend of 1.14, converted at a rate of $1.40/.
(f) The number of common shares shown has been used to calculate per share amounts.
(g) Historical figures regarding average number outstanding of common shares for 2005 have been recalculated to reflect the four-for-one stock split on May 18, 2006.

 

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EXCHANGE RATE INFORMATION

 

 

 

For information regarding the effects of currency fluctuations on TOTAL’s results, see “Item 5. Operating and Financial Review and Prospects”.

Most currency amounts in this Annual Report on Form 20-F are expressed in euros (“euros” or “”) or in U.S. dollars (“dollars” or “$”). For the convenience of the reader, this Annual Report on Form 20-F presents certain translations into dollars of certain euro amounts. Unless otherwise stated, the translation of euros to dollars has been made at the noon buying rate in New York City for cable transfers in euros as certified for customs purposes by The Federal Reserve Bank of New York (the “Noon Buying Rate”) for December 31, 2009, of $1.43 per 1.00.

The following tables set out the average dollar/euro exchange rate for the years indicated, based on the Noon Buying Rate expressed in dollars per 1.00. Such rates are not used by TOTAL in preparation of its Consolidated Financial Statements. No representation is made that the euro could have been converted into dollars at the rates shown or at any other rates for such periods or at such dates.

DOLLAR/EURO EXCHANGE RATES

 

Year    Average Rate(a)

2005

   1.24

2006

   1.26

2007

   1.37

2008

   1.47

2009

   1.40

 

(a) The average of the Noon Buying Rate expressed in dollars/euro on the last business day of each month during the relevant year.

 

The table below shows the high and low dollar/euro exchange rates for the three months ended December 31, 2009, and for the first three months of 2010, based on the Noon Buying Rate expressed in dollars per euro.

DOLLAR/EURO EXCHANGE RATES

 

Period    High    Low

October 2009

   1.50    1.45

November 2009

   1.51    1.47

December 2009

   1.51    1.42

January 2010

   1.45    1.39

February 2010

   1.40    1.35

March 2010(a)

   1.38    1.33

 

(a) Through March 26.

The Noon Buying Rate on March 26, 2010, for the dollar against the euro was $1.34/.


 

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RISK FACTORS

 

 

 

The Group and its businesses are subject to various risks relating to changing competitive, economic, political, legal, social, industry, business and financial conditions. These conditions, along with TOTAL’s approaches to managing certain of these risks, are described below and discussed in greater detail elsewhere in this Annual Report, particularly under the headings “Item 4. Information on the Company — Other Matters”, “Item 5. Operating and Financial Review and Prospects” and “Item 11. Quantitative and Qualitative Disclosures About Market Risk”.

A substantial or extended decline in oil or natural gas prices would have a material adverse effect on our results of operations.

Prices for oil and natural gas historically have fluctuated widely due to many factors over which we have no control. These factors include:

 

 

global and regional economic and political developments in resource-producing regions, particularly in the Middle East, Africa and South America;

 

global and regional supply and demand;

 

the ability of the Organization of Petroleum Exporting Countries (OPEC) and other producing nations to influence global production levels and prices;

 

prices of alternative fuels which affect our realized prices under our long-term gas sales contracts;

 

governmental regulations and actions;

 

global economic and financial market conditions;

 

war or other international conflicts;

 

cost and availability of new technology;

 

changes in demographics, including population growth rates and consumer preferences; and

 

adverse weather conditions (such as hurricanes) that can disrupt supplies or interrupt operations of our facilities.

Substantial or extended declines in oil and natural gas prices would adversely affect our results of operations by reducing our profits. For the year 2010, we estimate that a decrease of $1.00 per barrel in the average annual price of Brent crude would have the effect of reducing our annual adjusted net operating income from the Upstream segment by approximately 0.11 billion (calculated with a base case exchange rate of $1.40 per 1.00). In addition to the adverse effect on revenues, margins and profitability from any fall in oil and natural gas prices, a prolonged period of low prices or other indicators could lead to reviews for impairment of the Group’s oil and natural gas properties. Such reviews

would reflect management’s view of long-term oil and natural gas prices and could result in a charge for impairment that could have a significant effect on our results of operations in the period in which it occurs. Lower oil and natural gas prices over prolonged periods may also reduce the economic viability of projects planned or in development, causing us to cancel or postpone capital expansion projects, and may reduce liquidity, thereby potentially decreasing our ability to finance capital expenditures. If we are unable to follow through with capital expansion projects, our opportunities for future revenue and profitability growth would be reduced, which could materially impact our financial condition.

We face foreign exchange risks that could adversely affect our results of operations.

Our business faces foreign exchange risks because a large percentage of our revenues and cash receipts are denominated in dollars, the international currency of petroleum sales, while a significant portion of our operating expenses and income taxes accrue in euros and other currencies. Movements between the dollar and euro or other currencies may adversely affect our business by negatively impacting our booked revenues and income.

Our long-term profitability depends on cost effective discovery and development of new reserves; if we are unsuccessful, our results of operations and financial condition would be materially and adversely affected.

A significant portion of our revenues and the majority of our operating income are derived from the sale of crude oil and natural gas which we extract from underground reserves discovered and developed as part of our Upstream business. In order for this business to continue to be profitable, we need to replace depleted reserves with new proved reserves. Furthermore, we need to accomplish such replacement in a manner that allows subsequent production to be economically viable. However, our ability to discover or acquire and develop new reserves successfully is uncertain and can be negatively affected by a number of factors, including:

 

 

unexpected drilling conditions, including pressure or irregularities in geological formations;

 

equipment failures or accidents;

 

our inability to develop new technologies that permit access to previously inaccessible fields;

 

adverse weather conditions;

 

compliance with unanticipated governmental requirements;


 

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shortages or delays in the availability or delivery of appropriate equipment;

 

industrial action; and

 

problems with legal title.

Any of these factors could lead to cost overruns and impair our ability to make discoveries or complete a development project, or to make production economical. If we fail to discover and develop new reserves cost-effectively on an ongoing basis, our results of operations, including profits, and our financial condition, would be materially and adversely affected.

Our crude oil and natural gas reserve data are only estimates, and subsequent downward adjustments are possible. If actual production from such reserves is lower than current estimates indicate, our results of operations and financial condition would be negatively impacted.

Our proved reserves figures are estimates reflecting applicable reporting regulations as they may evolve. Proved reserves are estimated by analysis of geoscience
and engineering data with reasonable certainty to be economically producible — from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations — prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. This process involves making subjective judgments. Consequently, estimates of reserves are not exact measurements and are subject to revision. They may be negatively impacted by a variety of factors which could cause such estimates to be adjusted downward in the future, or cause our actual production to be lower than our currently reported proved reserves indicate. The main factors which may cause our proved reserves estimates to be adjusted downward, or actual production to be lower than the amounts implied by our currently reported proved reserves, include:

 

 

a decline in the price of oil or gas, making reserves no longer economically viable to exploit and therefore not classifiable as proved;

 

an increase in the price of oil or gas, which may reduce the reserves that we are entitled to under production sharing and buyback contracts;

 

changes in tax rules and other government regulations that make reserves no longer economically viable to exploit;

 

the quality and quantity of our geological, technical and economic data, which may prove to be inaccurate;

 

the actual production performance of our reservoirs; and

 

engineering judgments.

 

Many of the factors, assumptions and variables involved in estimating reserves are beyond our control and may prove to be incorrect over time. Results of drilling, testing and production after the date of the estimates may require substantial downward revisions in our reserve data. Any downward adjustment would indicate lower future production amounts and may adversely affect our results of operations, including profits as well as our financial condition.

We have significant production and reserves located in politically, economically and socially unstable areas, where the likelihood of material disruption of our operations is relatively high.

A significant portion of our oil and gas production occurs in unstable regions around the world, most significantly Africa, but also the Middle East, Asia-Pacific and South America. Approximately 33%, 19%, 11% and 8%, respectively, of our 2009 production came from these four regions. In recent years, a number of the countries in these regions have experienced varying degrees of one or more of the following: economic instability, political volatility, civil war, violent conflict and social unrest. In Africa, certain of the countries in which we have production have recently suffered from some of these conditions. The Middle East in general has recently suffered increased political volatility in connection with violent conflict and social unrest. A number of countries in South America where we have production and other facilities, including Argentina, Bolivia and Venezuela, have suffered from political or economic instability and social unrest and related problems. In Asia-Pacific, Indonesia has suffered some of these conditions. Any of these conditions alone or in combination could disrupt our operations in any of these regions, causing substantial declines in production. Furthermore, in addition to current production, we are also exploring for and developing new reserves in other regions of the world that are historically characterized by political, social and economic instability, such as the Caspian Sea region where we have a number of large projects currently underway. The occurrence and magnitude of incidents related to economic, social and political instability are unpredictable. It is possible that they could have a material adverse impact on our production and operations in the future.

We are subject to stringent environmental, health and safety laws in numerous jurisdictions around the world and may incur material costs to comply with these laws and regulations.

We are exposed to risks regarding safety and security of our operations. Our workforce and the public are exposed to risks inherent to our operations that


 

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potentially could lead to injuries or loss of life and could result in regulatory action, legal liability and damage to our reputation. In addition, growing public concerns in the EU and globally that rising greenhouse gas emissions and climate change may significantly affect the environment and society could adversely affect our businesses, including by the addition of stricter regulations that increase our operating costs, affect product sales and reduce profitability.

We incur, and expect to continue to incur, substantial capital and operating expenditures to comply with increasingly complex laws and regulations covering the protection of the natural environment and the promotion of worker health and safety, including:

 

 

costs to prevent, control, eliminate or reduce certain types of air and water emissions, including those costs incurred in connection with government action to address concerns of climate change;

 

remedial measures related to environmental contamination or accidents at various sites, including those owned by third parties;

 

compensation of persons claiming damages caused by our activities or accidents; and

 

costs in connection with the decommissioning of drilling platforms and other facilities.

If our established financial reserves prove not to be adequate, environmental costs could have a material effect on our results of operations and our financial position. Furthermore, in the countries where we operate or expect to operate in the near future, new laws and regulations, the imposition of tougher license requirements, increasingly strict enforcement or new interpretations of existing laws and regulations or the discovery of previously unknown contamination may also cause us to incur material costs resulting from actions taken to comply with such laws and regulations, including:

 

 

modifying operations;

 

installing pollution control equipment;

 

implementing additional safety measures; and

 

performing site clean-ups.

As a further result of any new laws and regulations or other factors, we may also have to curtail or cease certain operations or implement temporary shutdowns of facilities, which could diminish our productivity and materially and adversely impact our results of operations, including profits.

Security threats require continuous oversight and control. Acts of terrorism against our plants and offices, pipelines, transportation or computer systems could severely disrupt businesses and operations and could cause harm to people.

 

Our operations throughout the developing world are subject to intervention by various governments, which could have an adverse effect on our results of operations.

We have significant exploration and production, and in some cases refining, marketing or chemicals operations, in developing countries whose governmental and regulatory framework is subject to unexpected change and where the enforcement of contractual rights is uncertain. In addition, our exploration and production activity in such countries is often done in conjunction with state-owned entities, for example as part of a joint venture, where the state has a significant degree of control. In recent years, in various regions globally, we have seen governments and state-owned enterprises exercising greater authority and imposing more stringent conditions on companies pursuing exploration and production activities in their respective countries, increasing the costs and uncertainties of our business operations, which is a trend we expect to continue. Potential increasing intervention by governments in such countries can take a wide variety of forms, including:

 

 

the award or denial of exploration and production interests;

 

the imposition of specific drilling obligations;

 

price and/or production quota controls;

 

nationalization or expropriation of our assets;

 

unilateral cancellation or modification of our license or contract rights;

 

increases in taxes and royalties, including retroactive claims;

 

the establishment of production and export limits;

 

the renegotiation of contracts;

 

payment delays; and

 

currency exchange restrictions or currency devaluation.

Imposition of any of these factors by a host government in a developing country where we have substantial operations, including exploration, could cause us to incur material costs or cause our production to decrease, potentially having a material adverse effect on our results of operations, including profits.

We have activities in certain countries which are subject to U.S. sanctions and our activities in Iran could lead to sanctions under relevant U.S. legislation.

We currently have investments in Iran and, to a lesser extent, Syria, Myanmar, Sudan and Cuba. U.S. legislation and regulations currently impose economic sanctions on these countries.


 

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In 1996, the United States adopted legislation implementing sanctions against non-U.S. companies doing business in Iran and Libya (the Iran and Libya Sanction Act, referred to as “ILSA”), which in 2006 was amended to concern only business in Iran (then renamed the Iran Sanctions Act, referred to as “ISA”). The ISA is set to expire in December 2011. Pursuant to this statute, the President of the United States is authorized to initiate an investigation into the activities of non-U.S. companies in Iran and the possible imposition of sanctions (from a list that includes denial of financing by the U.S. Export-Import Bank, limitations on the amount of loans or credits available from U.S. financial institutions and prohibition of U.S. federal procurements from sanctioned persons) against persons found, in particular, to have knowingly made investments of $20 million or more in any 12-month period in the petroleum sector in Iran. In May 1998, the U.S. government waived the application of sanctions for TOTAL’s investment in the South Pars gas field. This waiver, which has not been modified since it was granted, does not address TOTAL’s other activities in Iran, although TOTAL has not been notified of any related sanctions.

In November 1996, the Council of the European Union adopted regulations which prohibit TOTAL from complying with any requirement or prohibition based on or resulting directly or indirectly from certain enumerated legislation, including the ILSA (now ISA). It also prohibits TOTAL from having its waiver for South Pars extended to other activities.

In each of the years since the passage of the ILSA and until 2007, TOTAL made investments in Iran in excess of $20 million (excluding the investments made as part of the development of South Pars). Since 2008, TOTAL’s position has consisted essentially in being reimbursed for its past investments as part of buyback contracts signed between 1995 and 1999 with respect to permits on which the Group is no longer the operator. In 2009, TOTAL’s production in Iran represented approximately 0.4% of the Group’s worldwide production. TOTAL does not believe that its operations in Iran have a material impact on the Group’s results.

In the future, TOTAL may decide to invest amounts in excess of $20 million per year in Iran. To our knowledge, sanctions under the ISA have not been imposed on any non-U.S. oil and gas company which has investments in Iran. However, TOTAL cannot predict whether the U.S. government will take any action under the ISA with respect to its previous or possible future activities in Iran. It is possible, however, that the United States may determine that these or other activities constitute activity prohibited by the ISA and will subject TOTAL to sanctions. TOTAL does not believe that enforcement of the ISA against TOTAL, including the imposition of the maximum sanctions under the current version of the ISA, would have a material adverse effect on its results

of operations or financial condition, although it could result in reputational harm.

However, the U.S. House of Representatives and the Senate have recently passed bills which, if adopted, would expand the scope of the ISA and could restrict the President’s ability to grant waivers. The proposed legislation would, among other things, require imposition of specific sanctions against companies that supply refined petroleum products to Iran, contribute to Iran’s ability to maintain or expand domestic production or engage in certain related conduct. The sanctions to be imposed against violating firms would generally prohibit transactions in foreign exchange by the sanctioned company, prohibit any transfers of credit or payments between, by, through or to any financial institution to the extent that such transfers or payments involve any interest of the sanctioned company, and require blocking of any property of the sanctioned company that is subject to the jurisdiction of the United States. The bills would also generally forbid federal procurements from and assistance to non-U.S. companies that engage in sanctions-triggering actions.

TOTAL is closely monitoring legislative and other developments in the United States in order to determine whether its limited activities in Iran could subject it to application of either current or any future ISA sanctions. In the event the proposed legislation were adopted in its current form, such new legislation could potentially have a material adverse effect on TOTAL.

France and the European Union have adopted measures, based on United Nations Security Council resolutions, which restrict the movement of certain individuals and goods to or from Iran as well as certain financial transactions with Iran, in each case when such individuals, goods or transactions are related to nuclear proliferation and weapons activities or likely to contribute to their development. As currently applicable, the Group believes that these measures are not applicable to its activities and projects in this country.

The United States also imposes sanctions based on the United Nations Security Council resolutions described above, as well as broad and comprehensive economic sanctions, which are administrated by the U.S. Treasury Department’s Office of Foreign Assets Control (referred to as “OFAC”). These OFAC sanctions generally apply to U.S. persons and activities taking place in the United States or that are otherwise subject to U.S. jurisdiction. Sanctions administered by OFAC target Cuba, Iran, Myanmar (Burma), Sudan and Syria. TOTAL does not believe that these sanctions are applicable to any of its activities in these countries.

In addition, many U.S. states have adopted legislation requiring state pension funds to divest themselves of investments in any company with active business


 

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operations in Iran or Sudan. Recently, there have been similar initiatives by state insurance regulators relating to investments by insurance companies in companies doing business with the Iranian oil and gas, nuclear and defense sectors. TOTAL has no business operations in Sudan and, to date, has not made any significant investments or industrial investments there. The Genocide Intervention Network (formerly known as Sudan Divestment Task Force) report states that TOTAL should be regarded as “inactive” in Sudan by the U.S. states that have adopted such divestment legislation. On December 31, 2007, the U.S. Congress adopted the Sudan Accountability and Divestment Act, which supports these state legislative initiatives. Similar

legislation is pending in the U.S. Congress that supports state legislative initiatives regarding Iran. If TOTAL’s operations in Iran or Sudan were determined to fall within the prohibited scope of these laws, and TOTAL were to not qualify for any available exemptions, certain U.S. state pension funds holding interests in TOTAL may be required to sell their interests. If significant, sales resulting from such laws and/or regulatory initiatives could have an adverse effect on TOTAL’s share price.

For more information on TOTAL’s presence in Cuba, Iran, Sudan and Syria, see “Item 4. Other Matters — Business Activities in Cuba, Iran, Sudan and Syria”.


 

ITEM 4. INFORMATION ON THE COMPANY

HISTORY AND DEVELOPMENT

 

 

 

TOTAL S.A., a French société anonyme (limited company) incorporated in France on March 28, 1924, together with its subsidiaries and affiliates, is the fifth largest publicly-traded integrated international oil and gas company in the world.(1)

With operations in more than 130 countries, TOTAL engages in all aspects of the petroleum industry, including Upstream operations (oil and gas exploration, development and production, LNG) and Downstream operations (refining, marketing and the trading and shipping of crude oil and petroleum products).

TOTAL also produces base chemicals (petrochemicals and fertilizers) and specialty chemicals for the industrial and consumer markets. In addition, TOTAL has interests in the coal mining and power generation sectors, as well as a financial interest in Sanofi-Aventis.

TOTAL began its Upstream operations in the Middle East in 1924. Since that time, the Company has grown

and expanded its operations worldwide. In early 1999, the Company acquired control of PetroFina S.A. and, in early 2000, the Company acquired control of Elf Aquitaine S.A. (hereafter referred to as “Elf Aquitaine” or “Elf”).

The Company’s principal office is 2, place Jean Millier, La Défense 6, 92400 Courbevoie, France. Its telephone number is +33 (0)1 47 44 45 46.

The length of the life of the Company is 99 years from March 22, 2000, unless it is dissolved or extended prior to such date.

TOTAL S.A. is registered in France with the Nanterre Trade Register under the registration number 542 051 180.


 

 

1. Based on market capitalization (in dollars) as of December 31, 2009.

 

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BUSINESS OVERVIEW

 

 

 

TOTAL’s worldwide operations are conducted through three business segments: Upstream, Downstream, and Chemicals. The table below gives information on the

geographic breakdown of TOTAL’s activities and is taken from Note 5 to the Consolidated Financial Statements included elsewhere herein.


 

(M)    France    Rest of
Europe
   North
America
   Africa    Rest of world    Total

2009

                 

Non-Group sales(a)

   32,437    60,140    9,515    9,808    19,427    131,327

Property, plant and equipment, intangible assets, net

   6,973    15,218    8,112    17,312    11,489    59,104

Capital expenditures

   1,189    2,502    1,739    4,651    3,268    13,349

2008

                 

Non-Group sales(a)

   43,616    82,761    14,002    12,482    27,115    179,976

Property, plant and equipment, intangible assets, net

   7,260    13,485    5,182    15,460    10,096    51,483

Capital expenditures

   1,997    2,962    1,255    4,500    2,926    13,640

2007

                 

Non-Group sales(a)

   37,949    73,757    12,404    10,401    24,241    158,752

Property, plant and equipment, intangible assets, net

   6,437    14,554    4,444    11,872    8,810    46,117

Capital expenditures

   1,627    2,538    740    3,745    3,072    11,722

 

(a) Non-Group sales from continuing operations.

UPSTREAM

 

 

 

TOTAL’s Upstream segment includes the Exploration & Production and Gas & Power divisions. The Group has exploration and production activities in more than forty countries and produces oil or gas in thirty countries. The Group’s Gas & Power division conducts activities

downstream from production related to natural gas, liquefied natural gas (LNG) and liquefied petroleum gas (LPG), as well as power generation and trading, and other activities.


 

Exploration & Production

 

 

 

Exploration and development

TOTAL’s Upstream segment aims at continuing to combine long-term growth and profitability at the levels of the best in the industry.

TOTAL evaluates exploration opportunities based on a variety of geological, technical, political and economic factors (including taxes and license terms), and on projected oil and gas prices. Discoveries and extensions of existing fields accounted for approximately 42% of the 2,419 Mboe added to the Upstream segment’s proved reserves during the three-year period ended December 31, 2009 (before deducting production and sales of reserves in place and adding any acquisitions of reserves in place during this period). The remaining 58% comes from revisions of previous estimates.

 

In 2009, the exploration investments of consolidated subsidiaries amounted to 1,486 million (including unproved property acquisition costs). The main exploration investments were made in the United States, Angola, the United Kingdom, Norway, Libya, Nigeria and the Republic of the Congo. In 2008, exploration investments of consolidated subsidiaries amounted to 1,243 million (including unproved property acquisition costs) notably in Angola, Nigeria, Norway, the United Kingdom, Australia, the United States, Libya, Brunei, Gabon, Cameroon, Indonesia, China, the Republic of the Congo and Canada. In 2007, exploration investments of consolidated subsidiaries amounted to 1,233 million (including unproved property acquisition costs), notably in Nigeria, Angola, the United Kingdom, Norway, Libya, the Republic of the Congo, Australia, Venezuela, China, Indonesia, Canada, Brunei, Algeria, the United States, Mauritania, Yemen, Kazakhstan, Brazil, Azerbaijan and Thailand.


 

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The Group’s consolidated Exploration & Production subsidiaries’ development expenditures amounted to nearly 8 billion in 2009, primarily in Angola, Nigeria, Norway, Kazakhstan, Indonesia, the Republic of the Congo, the United Kingdom, the United States, Gabon, Canada, Thailand, Russia and Qatar. In 2008, development expenditures amounted to 7 billion, predominantly in Angola, Nigeria, Norway, Kazakhstan, Indonesia, the Republic of the Congo, the United Kingdom, Gabon, Canada, the United States, and Qatar. Development expenditures for 2007 amounted to 7 billion and were carried out principally in Angola, Norway, Nigeria, Kazakhstan, the Republic of the Congo, the United Kingdom, Indonesia, Gabon, Canada, Qatar, Venezuela and the United States.

Reserves

The definitions used for proved, proved developed and proved undeveloped oil and gas reserves are in accordance with the United States Securities & Exchange Commission (SEC) Rule 4-10 of Regulation S-X as amended by the SEC “Modernization of Oil and Gas Reporting” release issued on December 31, 2008. Proved reserves are estimated using geological and engineering data to determine with reasonable certainty whether the crude oil or natural gas in known reservoirs is recoverable under existing regulatory, economic and operating conditions.

TOTAL’s oil and gas reserves are consolidated annually, taking into account, among other factors, levels of production, field reassessment, additional reserves from discoveries and acquisitions, disposal of reserves and other economic factors. Unless otherwise indicated, any reference to TOTAL’s proved reserves, proved developed reserves, proved undeveloped reserves and production reflects the Group’s entire share of such reserves or such production. TOTAL’s worldwide proved reserves include the proved reserves of its consolidated subsidiaries as well as its proportionate share of the proved reserves of equity affiliates and of two companies accounted for under the cost method. For further information concerning changes in TOTAL’s proved reserves for the years ended December 31, 2009, 2008 and 2007, see “Supplemental Oil and Gas Information (Unaudited)”.

The reserves estimation process involves making subjective judgments. Consequently, estimates of reserves are not exact measurements and are subject to revision under well-established control procedures. The reserves estimation process requires among others internal peer reviews of technical evaluations to ensure that the SEC definitions and guidance are followed; and that management make significant funding commitments towards the development of the reserves prior to booking (see “Supplemental Oil and Gas Information (Unaudited)” for more details on the preparation of reserves estimates).

 

Proved reserves

In accordance with the amended Rule 4-10 of Regulation S-X, proved reserves for the year ended December 31, 2009, are calculated using a 12-month average price determined as the unweighted arithmetic average of the first-day-of-the-month price for each month of the relevant year unless prices are defined by contractual arrangements, excluding escalations based upon future conditions. The reference price for 2009 was $59.91/b for Brent crude. The proved reserves for the years ended December 31, 2008 and 2007 were calculated using December 31 prices.

As of December 31, 2009, TOTAL’s combined proved reserves of oil and gas were 10,483 Mboe (56% of which were proved developed reserves). Liquids (crude oil, natural gas liquids and bitumen) represented approximately 54% of these reserves and natural gas the remaining 46%. These reserves were located in Europe (mainly in Norway and the United Kingdom), in Africa (mainly in Angola, Gabon, Libya, Nigeria and the Republic of the Congo), in the Americas (mainly in Canada, the United States, Argentina, and Venezuela), in the Middle East (mainly in Oman, Qatar, the United Arab Emirates, and Yemen), and in Asia (mainly in Indonesia and Kazakhstan).

As of December 31, 2008, TOTAL’s combined proved reserves of oil and gas were 10,458 Mboe (50% of which were proved developed reserves). Liquids represented approximately 54% of these reserves and natural gas the remaining 46%. These reserves were located in Europe (mainly in Norway and the United Kingdom), in Africa (mainly in Algeria, Angola, Gabon, Libya, Nigeria and the Republic of the Congo), in the Americas (mainly in Canada, Bolivia, Argentina, and Venezuela), in the Middle East (mainly in Oman, Qatar, the United Arab Emirates, and Yemen), and in Asia (mainly in Indonesia and Kazakhstan).

As of December 31, 2007, TOTAL’s combined proved reserves of oil and gas were 10,449 Mboe (52% of which were proved developed reserves). Liquids represented approximately 55% of these reserves and natural gas the remaining 45%. These reserves were located in Europe (mainly in Norway and the United Kingdom), in Africa (mainly in Angola, Gabon, Libya, Nigeria and the Republic of the Congo), in the Americas (mainly in Canada, Argentina, and Venezuela), in the Middle East (mainly in Oman, Qatar, the United Arab Emirates, and Yemen), and in Asia (mainly in Indonesia and Kazakhstan).


 

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Sensitivity to oil and gas prices

Changes in the price used as a reference for the proved reserves estimation result in non-proportionate inverse changes in proved reserves associated with production sharing and buyback agreements (which represent approximately 32% of TOTAL’s reserves as of December 31, 2009). Under such contracts, TOTAL is entitled to a portion of the production, the sale of which is meant to cover expenses incurred by the Group. As oil prices increase, fewer barrels are necessary to cover the same amount of expenses. Moreover, the number of barrels retrievable under these contracts may vary according to criteria such as cumulative production, the rate of return on investment or the income-cumulative expenses ratio. This decrease is partly offset by an extension of the duration over which fields can be produced economically. However, the increase in reserves due to extended field life resulting from higher prices is generally less than the decrease in reserves under production sharing or buyback agreements due to such higher prices. As a result, higher prices lead to a decrease in TOTAL’s reserves.

Production

For the full year 2009, average daily oil and gas production was 2,281 kboe/d compared to 2,341kboe/d in 2008.

Liquids accounted for approximately 61% and natural gas accounted for approximately 39% of TOTAL’s combined liquids and natural gas production in 2009.

The table on the next page sets forth by geographic area TOTAL’s average daily production of oil and gas for each of the last three years.

Consistent with industry practice, TOTAL often holds a percentage interest in its fields rather than a 100% interest, with the balance being held by joint venture partners (which may include other international oil companies, state-owned oil companies or government entities). TOTAL frequently acts as operator (the party responsible for technical production) on acreage in which it holds an interest. See the table “Presentation of production activities by geographic area” on the following pages for a description of TOTAL’s producing assets.

As in 2008 and 2007, substantially all of the liquids production from TOTAL’s Upstream segment in 2009 was marketed by the Trading & Shipping division of TOTAL’s Downstream segment. See “– Business Overview – Trading & Shipping – Supply and sales of crude oil”.

 

The majority of TOTAL’s natural gas production is sold under long-term contracts. However, its North American production, and to some extent its production from the United Kingdom, Norway and Argentina, is sold on the spot market. The long-term contracts under which TOTAL sells its natural gas usually provide for a price related to, among other factors, average crude oil and other petroleum product prices, as well as, in some cases, a cost-of-living index. Though the price of natural gas tends to fluctuate in line with crude oil prices, a slight delay may occur before changes in crude oil prices are reflected in long-term natural gas prices. Due to the interaction between the contract price of natural gas and crude oil prices, contract prices are not usually affected by short-term market fluctuations in the spot price of natural gas. Some of these long term contracts, notably in Indonesia, Qatar, Nigeria and Norway, also specify the delivery of fixed and determinable quantities of natural gas. The Group expects to satisfy most of these obligations through the production of its proved developed reserves. In addition, the Group may purchase quantities on the spot market or use its undeveloped reserves to fulfill such commitments. See “Supplemental Oil and Gas Information (Unaudited)”.


 

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PRODUCTION BY GEOGRAPHIC AREA

 

     2009        2008        2007

Consolidated subsidiaries

 

Liquids

(kb/d)

 

Natural
Gas

(Mcf/d)

  

Total

(kboe/d)

      

Liquids

(kb/d)

 

Natural
Gas

(Mcf/d)

  

Total

(kboe/d)

      

Liquids

(kb/d)

 

Natural
Gas

(Mcf/d)

  

Total

(kboe/d)

Africa

  612   596    728     635   655    763     658   636    783

Algeria

  27   140    53     32   141    59     32   136    58

Angola

  186   33    191     200   33    205     198   29    203

Cameroon

  12   2    12     13   2    14     13   2    14

Gabon

  67   20    71     73   20    76     78   29    83

Libya

  60   —      60     74   —      74     87   —      87

Nigeria

  159   374    235     158   436    246     176   423    261

Republic of the Congo

  101   27    106     85   23    89     74   17    77

North America

  20   22    24     11   15    14     14   34    20

Canada(a)

  8   —      8     8   —      8     2   —      2

United States

  12   22    16     3   15    6     12   34    18

South America

  30   558    131     32   573    136     118   618    230

Argentina

  15   364    80     14   365    81     14   365    80

Bolivia

  3   91    20     3   105    22     3   131    28

Colombia

  7   45    17     9   45    18     10   46    19

Trinidad & Tobago

  5   2    5     6   2    6     9   2    9

Venezuela

  —     56    9     —     56    9     82   74    94

Asia-Pacific

  33   1,228    251     29   1,236    246     28   1,287    252

Brunei

  2   49    12     2   60    14     2   60    14

Indonesia

  25   898    190     21   857    177     20   882    180

Myanmar

  —     103    13     —     117    14     —     136    17

Thailand

  6   178    36     6   202    41     6   209    41

Commonwealth of Independent States

  14   52    24     12   75    26     10   46    19

Azerbaijan

  3   50    12     4   73    18     3   44    11

Russia

  11   2    12     8   2    8     7   2    8

Europe

  295   1,734    613     302   1,704    616     335   1,846    674

France

  5   100    24     6   103    25     6   115    27

The Netherlands

  1   254    45     1   244    44     1   252    45

Norway

  199   691    327     204   706    334     211   685    338

United Kingdom

  90   689    217     91   651    213     117   794    264

Middle East

  91   338    151     88   281    137     83   91    99

U.A.E.

  10   10    12     10   10    12     11   10    13

Iran

  8   —      8     9   —      9     15   —      15

Qatar

  47   294    99     44   269    91     33   79    47

Syria

  14   34    20     15   2    15     15   2    15

Yemen

  12   —      12     10   —      10     9   —      9

Total consolidated production

  1,095   4,528    1,922     1,109   4,539    1,938     1,246   4,558    2,077

Equity and non-consolidated affiliates

                        

Africa(b)

  20   3    21     19   4    20     23   4    23

Middle East

  216   386    287     241   288    295     240   277    291

Rest of world(c)

  50   6    51     87   6    88     —     —      —  

Total equity and non-consolidated affiliates

  286   395    359     347   298    403     263   281    314

Worldwide production

  1,381   4,923    2,281       1,456   4,837    2,341       1,509   4,839    2,391

 

(a) The Group’s production in Canada consists of bitumen only. All of the Group’s bitumen production is in Canada.
(b) Primarily attributable to TOTAL’s share of CEPSA’s production in Algeria.
(c) Essentially TOTAL’s share of PetroCedeño’s production in Venezuela.

 

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PRESENTATION OF PRODUCTION ACTIVITIES BY GEOGRAPHIC AREA

The table below sets forth, by country, TOTAL’s producing assets, the year in which TOTAL’s activities commenced, the Group’s interest in each asset and whether TOTAL is operator of the asset.

 

TOTAL’s producing assets as of December 31, 2009(a)
      Year of
entry into
the country
  

Group-operated

producing assets

(Group share)

  

Non-Group-operated

producing assets

(Group share)

Africa               

Algeria

   1952       Ourhoud (19.41%)(b)
         RKF (48.83%)(b)
               Tin Fouye Tabankort (35.00%)

Angola

   1953    Blocks 3-85, 3-91 (50.00%)   
     

Girassol, Jasmim,

Rosa, Dalia (Block 17) (40.00%)

  
         Cabinda (Block 0) (10.00%)
               Kuito, BBLT, Tombua-Landana (Block 14) (20.00%)

Cameroon

   1951    Bakingili (25.50%)   
      Bavo-Asoma (25.50%)   
      Boa Bakassi (25.50%)   
      Ekundu Marine (25.50%)   
      Kita Edem (25.50%)   
      Kole Marine (25.50%)   
         Mokoko - Abana (10.00%)
               Mondoni (25.00%)

The Congo, Republic of

   1928    Kombi-Likalala (65.00%)   
      Nkossa (53.50%)   
      Nsoko (53.50%)   
      Moho Bilondo (53.50%)   
      Sendji (55.25%)   
      Tchendo (65.00%)   
      Tchibeli-Litanzi-Loussima (65.00%)   
      Tchibouela (65.00%)   
      Yanga (55.25%)   
         Loango (50.00%)
               Zatchi (35.00%)

Gabon

   1928    Anguille (100.00%)   
      Anguille Nord Est (100.00%)   
      Anguille Sud-Est (100.00%)   
      Atora (40.00%)   
      Avocette (57.50%)   
      Ayol Marine (100.00%)   
      Baliste (50.00%)   
      Barbier (100.00%)   
      Baudroie Marine (50.00%)   
      Baudroie Nord Marine (50.00%)   
      Coucal (57.50%)   
      Girelle (100.00%)   
      Gonelle (100.00%)   
      Grand Anguille Marine (100.00%)   
      Grondin (100.00 %)   
      Hylia Marine (75.00%)   
      Mandaros (100.00%)   

 

13


Table of Contents
      Year of
entry into
the country
  

Group-operated

producing assets

(Group share)

  

Non-Group-operated

producing assets

(Group share)

Africa               
      M’Boumba (100.00%)   
      Mérou Sardine Sud (50.00%)   
      Pageau (100.00%)   
      Port Gentil Océan (100.00%)   
      Port Gentil Sud Marine (100.00%)   
      Tchengue (100.00%)   
      Torpille (100.00%)   
      Torpille Nord Est (100.00%)   
               Rabi Kounga (47.50%)

Libya

   1959    C 17 (Mabruk) (15.00%)(l)   
      C 137 (Al Jurf) (20.25%)(l)   
         NC 115 (El Sharara) (3.90%)
               NC 186 (2.88%)

Nigeria

   1962    OML 58 (40.00%)   
      OML 99 Amenam-Kpono (30.40%)   
      OML 100 (40.00%)   
      OML 102 (40.00%)    OML102 - Ekanga (40.00%)
      OML 130 (24.00%)   
         Shell Petroleum Development Company (SPDC 10.00%)
               Bonga (12.50%)
North America      

Canada

   1999         Surmont (50.00%)

United States

   1957    Matterhorn (100.00%)   
      Virgo (64.00%)   
         Several assets in the Barnett Shale area (25.00%)
               Tahiti (17.00%)
South America      

Argentina

   1978    Aguada Pichana (27.27%)   
      Aries (37.50%)   
      Cañadon Alfa Complex (37.50%)   
      Carina (37.50%)   
      Hidra (37.50%)   
      San Roque (24.71%)   
               Sierra Chata (2.51%)

Bolivia

   1995       San Alberto (15.00%)
               San Antonio (15.00%)

Colombia

   1973       Caracara (34.18%)(k)
         Cupiagua (19.00%)
         Cusiana (19.00%)
         Espinal (7.32%)(k)
               San Jacinto/Rio Paez (8.14%)(k)

Trinidad & Tobago

   1996         Angostura (30.00%)

Venezuela

   1980       PetroCedeño (30.323%)
               Yucal Placer (69.50%)
Asia-Pacific      

Brunei

   1986   

Maharaja Lela

Jamalulalam (37.50%)

    

 

14


Table of Contents
      Year of
entry into
the country
  

Group-operated

producing assets

(Group share)

  

Non-Group-operated

producing assets

(Group share)

Asia-Pacific      

Indonesia

   1968    Bekapai (50.00%)   
      Handil (50.00%)   
      Peciko (50.00%)   
      Sisi-Nubi (47.90%)   
      Tambora-Tunu (50.00%)   
         Badak (1.05%)
         Nilam - gas and condensates (9.29%)
               Nilam - oil (10.58%)

Myanmar

   1992    Yadana (31.24%)     

Thailand

   1990         Bongkot (33.33%)
Commonwealth of Independant States

Azerbaijan

   1996         Shah Deniz (10.00%)

Russia

   1989    Kharyaga (50.00%)   
Europe                  

France

   1939    Lacq (100.00%)   
      Meillon (100.00%)   
      Pecorade (100.00%)   
      Vic-Bilh (73.00%)   
      Lagrave (100.00%)   
      Lanot (100.00%)   
         Dommartin-Lettrée (56.99%)
      Itteville (78.73%)   
      La Croix-Blanche (100.00%)   
      Rousse (100.00%)   
      Vert-le-Grand (90.05%)   
          Vert-le-Petit (100.00%)     

Norway

   1965    Skirne (40.00%)   
         Åsgard (7.68%)
         Ekofisk (39.90%)
         Eldfisk (39.90%)
         Embla (39.90%)
         Gimle (4.90%)
         Glitne (21.80%)
         Gungne (10.00%)
         Heimdal (16.76%)
         Hod (25.00%)
         Huldra (24.33%)
         Kristin (6.00%)
         Kvitebjørn (5.00%)
         Mikkel (7.65%)
         Oseberg (10.00%)
         Oseberg East (10.00%)
         Oseberg South (10.00%)
         Sleipner East (10.00%)
         Sleipner West (9.41%)
         Snøhvit (18.40%)
         Snorre (6.18%)
         Statfjord East (2.80%)
         Sygna (2.52%)

 

15


Table of Contents
      Year of
entry into
the country
  

Group-operated

producing assets

(Group share)

  

Non-Group-operated

producing assets

(Group share)

Europe               
         Tor (48.20%)
         Tordis (5.60%)
         Troll I (3.69%)
         Troll II (3.69%)
         Tune (10.00%)
         Tyrihans (23.18%)
         Vale (24.24%)
         Valhall (15.72%)
         Vigdis (5.60%)
         Vilje (24.24%)
         Visund (7.70%)
               Yttergryta (24.50%)

The Netherlands

   1964    F6a gaz (55.66%)   
      F6a huile (65.68%)   
      F15a Jurassic (38.20%)   
      F15a Triassic (32.47%)   
      J3a (30.00%)   
      K1a (40.10%)   
      K3b (56.16%)   
      K4a (50.00%)   
      K4b/K5a (36.31%)   
      K5b (45.27%)   
      K5F (40.39%)   
      K6/L7 (56.16%)   
      L1a/L1d (60.00%)   
      L1e/L1f (55.66%)   
      L4a (55.66%)   
         E16a (16.92%)
         E17a/E17b (14.10%)
         J3b/J6 (25.00%)
               Q16a (6.49%)

United Kingdom

   1962    Alwyn North, Dunbar, Ellon, Grant   
      Nuggets (100.00%)   
      Elgin-Franklin (EFOG 46.17%)(c)   
      Forvie Nord (100.00%)   
      Glenelg (49.47%)   
      Jura (100.00%)   
      Otter (81.00%)   
      West Franklin (EFOG 46.17%)(c)   
         Alba (12.65%)
         Armada (12.53%)
         Bruce (43.25%)
         Markham unitized fields (7.35%)
         ETAP (Mungo. Monan) (12.43%)
         Everest (0.87%)
         Keith (25.00%)
         Maria (28.96%)
         Nelson (11.53%)
         Seymour (25.00%)

 

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Table of Contents
      Year of
entry into
the country
  

Group-operated

producing assets

(Group share)

  

Non-Group-operated

producing assets

(Group share)

Middle East      

U.A.E.

   1939    Abu Dhabi - Abu Al Bu Khoosh (75.00%)   
         Abu Dhabi offshore (13.33%)(d)
         Abu Dhabi onshore (9.50%)(e)
         GASCO (15.00%)
               ADGAS (5.00%)

Iran

   1954       Dorood (55.00%)(f)
               South Pars 2 & 3 (40.00%)(g)

Oman

   1937       Various fields onshore (Block 6) (4.00%)(h)
               Mukhaizna field (Block 53) (2.00%)(i)

Qatar

   1936    Al Khalij (100.00%)   
         Dolphin (24.50%)
         North Field - NFB (20.00%)
               North Field -Qatargas 2 Train 5 (16.70%)

Syria

   1988    Deir Ez Zor (Al Mazraa, Atalla North, Jafra, Marad, Qahar, Tabiyeh) (100.00%)(j)     

Yemen

   1987    Kharir/Atuf (bloc 10) (28.57%)   
               Al Nasr (Block 5) (15.00%)

 

(a) The Group’s interest in the local entity is approximately 100% in all cases except for Total Gabon (57.96%), Total E&P Cameroon (75.80%) and certain entities in the United Kingdom, Algeria, Abu Dhabi and Oman (see notes b through l below).
(b) TOTAL has an indirect 19.41% interest in the Ourhoud field and a 48.83% indirect interest in the RKF field through its interest in CEPSA (equity affiliate).
(c) TOTAL has a 35.8% indirect interest in Elgin Franklin through its interest in EFOG.
(d) Through ADMA (equity affiliate), TOTAL has a 13.33% interest and participates in the operating company, Abu Dhabi Marine Operating Company.
(e) Through ADPC (equity affiliate), TOTAL has a 9.50% interest and participates in the operating company, Abu Dhabi Company for Onshore Oil Operation.
(f) TOTAL has transferred operatorship of Dorood to the National Iranian Oil Company (NIOC). The Group has a 55% interest in the foreign consortium.
(g) TOTAL has transferred operatorship to the National Iranian Oil Company (NIOC) for phases 2 and 3 of the South Pars field. The Group has a 40.00% interest in the foreign consortium.
(h) TOTAL has a direct interest of 4.00% in Petroleum Development Oman LLC, operator of Block 6, in which TOTAL has an indirect interest of 4.00% via Pohol (equity affiliate). TOTAL also has a 5.54% interest in the Oman LNG facility (trains 1 and 2), and an indirect participation of 2.04% through OLNG in Qalhat LNG (train 3).
(i) TOTAL has a direct interest of 2.00% in Block 53.
(j) Operated by DEZPC which is 50.00% owned by TOTAL and 50.00% owned by SPC.
(k) TOTAL has an indirect 34.18% interest in the Caracara Block, 8.14% in the San Jacinto/Rio Paez Block and 7.32% in the Espinal Block through its interest in CEPSA (equity affiliate).
(l) Implementation of new contractual terms following the ratification of contracts in early 2010.

 

Africa

In 2009, TOTAL’s production in Africa (including production from equity affiliates and non-consolidated subsidiaries) was 749 kboe/d, representing 33% of the Group’s overall production, compared to 783 kboe/d in 2008 and 806 kboe/d in 2007.

In Algeria, TOTAL’s production was 74 kboe/d in 2009, down from 79 kboe/d in 2008 and 2007, notably due to the termination of the Hamra contract in October 2009. In addition to Hamra, the Group’s 2009 production came from its direct interests in the TFT field (Tin Fouyé Tabenkort, 35%) and from its 48.83% interest in CEPSA, a partner of Sonatrach (the Algerian national oil and gas company) on the Ourhoud and Rhourde El Krouf fields. TOTAL also holds a 37.75% direct interest in the Timimoun gas project, alongside Sonatrach (51%) and CEPSA (11.25%). In December 2009, TOTAL won the call for tenders related to the acquisition of a 47% interest in the Ahnet license. The agreement provides for a development plan that is expected to be submitted to the authorities before mid-2011, with start-up of

production scheduled for 2015 and an expected plateau production of at least 400 Mcf/d (4 Bm3/y).

 

 

On the TFT field, the completion of the compression project is expected to maintain plateau production at nearly 180 kboe/d.

 

 

The approval of the Timimoun project by the ALNAFT National Agency allowed TOTAL and its partners to launch the basic engineering studies phase in early 2010 for a start-up of production expected in late 2013. Commercial production for the natural gas from Timimoun is expected to reach nearly 160 Mcf/d (1.6 Bm3/y) at plateau.

In Angola, TOTAL produced 191 kboe/d in 2009, compared to 205 kboe/d in 2008 and 2007. Production comes mainly from Blocks 17, 0 and 14. From 2007 to 2009, several discoveries were made, notably on Blocks 14, 31, 32, 15/06 and 17/06.

 

 

Deep-offshore Block 17 (40%, operator) is TOTAL’s principal asset in Angola. It is composed of four


 

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Table of Contents
   

major poles: Girassol, Dalia, Pazflor and CLOV (based on the Cravo, Lirio, Orquidea and Violeta discoveries).

On the Girassol pole, production from the Girassol, Jasmim and Rosa fields averaged more than 220 kb/d (in 100%) in 2009. The Rosa field, which began production in June 2007, makes a substantial contribution to the Girassol FPSO (Floating Production, Storage and Offloading facility).

On the second pole, the Dalia field, which began production in December 2006, reached its plateau production of 240 kb/d during the second quarter of 2007. This development, launched in 2003, is based on a system of sub-sea wells connected to an FPSO.

Production from the third pole, Pazflor, comprised of the Perpetua, Zinia, Hortensia and Acacia fields, is scheduled to begin in 2011. This development, under construction since its approval in late 2007, calls for the installation of an FPSO with a production capacity of up to 220 kb/d.

On CLOV, the fourth pole, basic engineering studies were launched in 2008 for the development of the Cravo, Lirio, Orquidea and Violeta fields. This development is expected to lead to the installation of a fourth FPSO with a production capacity of 160 kb/d. The final investment decision is expected in 2010.

 

 

On Block 14 (20%), production on the Tombua-Landana field started in August 2009 and adds to production from the Benguela-Belize-Lobito-Tomboco (BBLT) and Kuito fields.

 

 

On the ultra-deep offshore Block 32 (30%, operator), the twelve discoveries made between 2003 and 2007 confirmed the oil potential of the block. Appraisal is continuing and pre-development studies for a first production zone in the central/southeastern portion of the block are underway.

In 2008, leasehold rights for the Calulu zone on Block 33 were extended for five years. TOTAL became the operator of this block in 2008 with a 55% interest. In 2007, TOTAL acquired interests on Blocks 17/06 (30%, operator) and 15/06 (15%).

In addition, construction is underway for the Angola LNG project (13.6%), which involves a liquefaction plant near Soyo designed to bring the country’s natural gas reserves to market, in particular the associated gas from the fields on Blocks 0, 14, 15, 17 and 18. This project was approved by the government of Angola and the project’s partners in December 2007 and production is expected to begin in 2012.

 

In Cameroon, TOTAL has been producing since 1977 and it operated production in 2009 of approximately 50 kboe/d, representing nearly 65% of the country’s overall production(1). The Group’s share of production in 2009 amounted to 12 kboe/d, compared to 14 kboe/d in 2008 and 2007.

The exclusive authorization to operate the Dissoni field (37.5%, operator) was granted by the Cameroonian authorities in November 2008, with production scheduled to start in 2012. Plateau production for this field is expected to reach nearly 15 kb/d (in 100%). On this permit, the discovery made in 2008 in the deltaic horizons during the drilling of the Njonji exploration well is expected to be assessed with an appraisal well in 2010.

In addition, TOTAL was awarded in July 2009 a new exploration block, Lungahe (100%), located near its operated concessions and permits.

In Egypt, TOTAL was awarded in May 2009 a 90% interest in Block 4 (El Burullus offshore East) on which TOTAL is expected to be the operator pursuant to the approval by the relevant authorities. This permit, located in the Nile Basin where a number of natural gas discoveries have already been made, covers an initial 4-year exploration period and provides for the commitment to conduct 3D seismic work and to drill exploration wells.

In Gabon, the Group’s share of production was 71 kboe/d in 2009, compared to 76 kboe/d in 2008 and 83 kboe/d in 2007, due to the natural decline of mature fields. Total Gabon(2) is one of the Group’s oldest subsidiaries in sub-Saharan Africa. In 2007, the Convention d’Etablissement between Total Gabon and the government of Gabon was renewed for a 25-year period. This contractual scheme promotes exploration and development projects.

 

 

On the Anguille field, the reservoir studies begun in 2009 based on the results of the first thirteen Phase 1 wells indicate that the original production estimates will have to be revised downward. The project was first revised in early 2009 to capitalize on lower oil service costs. It now calls for a more sequential approach over a longer period. The development plan and sizing of the new facilities have been reviewed accordingly.

 

 

On the deep-offshore Diaba permit (Total Gabon 63.75%, operator), following the 2D seismic acquisition campaign that was shot in 2008 and 2009, 3D seismic acquisition work started in December 2009.


 

 

1. Source: TEP Cameroun and Société Nationale des Hydrocarbures du Cameroun.
2. Total Gabon is a Gabonese company whose shares are listed on Euronext Paris. TOTAL holds 58%, the Republic of Gabon 25% and the public float is 17%.

 

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Table of Contents

In Libya, the Group’s share of production amounted to 60 kb/d in 2009, down from 74 kb/d in 2008 and 87 kb/d in 2007. This decline is primarily due to the implementation of OPEC quotas and new contractual provisions for Blocks NC 115 (30%)(1) and NC 186 (24%)(1), on which TOTAL is a partner.

 

 

On the Mabruk field (Block C 17, 75%(1), operator), plateau production of 19 kb/d was maintained in 2009. In addition, the development plan for the Dahra and Garian structures was approved by the National Oil Corporation (NOC) in mid-2009.

 

 

On Block C 137 (75%(1), operator), production on the Al Jurf field resumed in late December 2008, following the temporary shutdown of production due to difficulties encountered in April 2008 during drilling operations. Production was 31 kboe/d in 2009. In addition, a project to reinject associated gas was launched in May 2009.

 

 

TOTAL and NOC signed a Memorandum of Understanding in February 2009 to convert the existing contracts for Blocks C 137 and C 17 into exploration and production sharing agreements (EPSA IV) and extend them until 2032. Commitments to drill additional exploration wells were made within this framework. The EPSA IV contracts, signed in May 2009, were ratified by the Libyan government in early 2010.

 

 

On Blocks NC 115 and NC 186, a nearly 5,000 km2 seismic campaign started in December 2009.

 

 

On the Murzuk Basin, a development plan was submitted to the authorities in 2009 following a successful appraisal well drilled on the discovery made in 2006 on a portion of Block NC 191 (100%(1), operator).

 

 

On the Cyrenaic Basin, drilling of an exploration well started in February 2010 on Block 42 2/4 (60%(1), operator).

In Madagascar, TOTAL acquired a 60% interest in, and the operatorship of, the Bemolanga permit in September 2008. Bemolanga contains oil sands accumulations. A first appraisal phase was launched to confirm the bitumen resources needed for a mining development. Drilling operations started in July 2009 and are expected to take place in 2010 during the dry season (April to November).

In Mauritania, TOTAL is active in exploration on the Ta7 and Ta8 permits (60%, operator), located in the Taoudenni Basin, alongside Sonatrach (20%) and Qatar

Petroleum International (20%), Qatar’s state-owned company. Drilling of an exploration well on the Ta8 permit started in October 2009.

In Nigeria, the Group’s production amounted to 235 kboe/d in 2009, compared to 246 kboe/d in 2008 and 261 kboe/d in 2007. TOTAL has been present in Nigeria since 1962. It operates seven production permits (OML) out of the forty-seven in which it holds an interest, and two exploration permits (OPL) out of the eight in which it holds an interest. The Group is also active in LNG through Nigeria LNG and the Brass LNG project.

 

 

TOTAL holds a 15% interest in the Nigeria LNG Ltd gas liquefaction plant located in Bonny Island. The plant’s overall capacity has increased to 22 Mt/y of LNG since the commissioning of the sixth liquefaction train in late 2007. In 2009, security issues in the Niger Delta impacted certain suppliers’ gas production, restricting the plant’s supply and reducing LNG production.

In addition, preliminary work continued in 2009 prior to launching the Brass LNG project (17%), which calls for the construction of two 5 Mt/y trains. The first phase of site preparation work was completed in 2009.

 

 

TOTAL strengthened its ability to supply gas to the LNG projects in which it has interests and to meet the growing domestic demand in gas:

 

   

On the OML 136 permit (40%), following the appraisal work conducted in 2008 on the Amatu field, the Group successfully appraised the Temi Agge field in 2009, confirming the possibility of a future development pole on this permit.

 

   

As part of its joint venture with the Nigerian National Petroleum Corporation (NNPC), TOTAL launched a project to eventually increase the production capacity of the OML 58 permit (40%, operator) to 550 Mcf/d of gas. A second phase of this project, currently being assessed, is expected to allow the development of other reserves through these facilities.

 

   

On the OML 112/117 permits (40%), TOTAL continued in 2009 development studies for the Ima gas field.

 

 

On the OML 102 permit (40%, operator), TOTAL continued in 2009 to develop the Ofon II project. The final investment decision in expected in 2010.

 


 

1. Participation in the foreign consortium.

 

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Table of Contents
   

The Group is also planning the appraisal of the Etisong pole in 2010, located 15 km from the Ofon field, which is currently in production.

 

 

On the OML 130 permit (24%, operator), production started in March 2009 on the Akpo field, whose plateau production is 225 kboe/d. The Group is actively developing the Egina field, for which a development plan was approved by the Nigerian authorities. In 2009, TOTAL conducted in Nigeria basic engineering studies on this field.

 

 

On the OML 138 permit (20%, operator), TOTAL continued to develop the Usan project (180 kb/d in 100%) in 2009, in particular with the start-up of drilling operations for production wells and the launch of the new FPSO hull in November 2009. First production is expected in 2012.

TOTAL also strengthened its position in the deep offshore by launching in 2009 the development of the Bonga Northwest project on OML 118 (12.5%). In 2009, the Group actively pursued its exploration program with the discovery made on the Owowo South prospect on OPL 223 (18%, operator).

Security issues in the Niger Delta region continued to impact the production of the Shell Petroleum Development Company (SPDC) joint venture, in which TOTAL owns 10%. Repair work on facilities in the western zone of the Niger Delta region continued in 2009, allowing production to partially resume, in particular on the EA offshore field (10%), where production resumed in the second half of 2009. In addition, SPDC’s 2009 gas and condensates production was affected notably by the shutdown of the Soku treatment plant, which had to be repaired after vandalism on the export pipelines in late 2008.

In the Republic of the Congo, the Group’s share of production was 106 kboe/d in 2009, compared to 89 kboe/d in 2008 and 77 kboe/d in 2007.

 

 

Production began on the Moho Bilondo field (53.5%, operator) in April 2008, where the drilling of development wells is continuing. Current production (in 100%) of approximately 80 kboe/d is expected to reach 90 kboe/d at plateau during 2010. The Moho North Marine 3 appraisal well, drilled in late 2008 after two discoveries made in 2007 (Moho North Marine 1 and 2), confirmed the potential of this permit. In the same area, the Moho North Marine 4 well discovered resources in the Albian zones in 2009.

 

 

Development of Libondo (65%, operator), approved in October 2008, is continuing. Commissioning is expected in 2011. This field is located on the Kombi-Likalala-Libondo operating field, 50 km off the coast in water depths of 114 meters. Anticipated plateau production is 8 kb/d (in 100%). A substantial portion of the equipment is produced locally in Pointe-Noire through the redevelopment of a construction site that had been idle for several years.

In Sudan , the Group holds interests in an exploration permit in the southern part of the country, although no activity is currently underway in this country. For additional information on TOTAL’s operations in Sudan, see “— Other Matters — Business Activities In Cuba, Iran, Sudan and Syria”.

North America

In 2009, TOTAL’s production in North America was 24 kboe/d, representing 1% of the Group’s overall production, compared to 14 kboe/d in 2008 and 20 kboe/d in 2007.

In Canada, the Group is involved in oil sands projects in Athabasca, Alberta, through its interests in the Surmont (50%), Joslyn (75%, operator) and Northern Lights (50%, operator) permits. Since the end of 2004, the Group has also acquired 100% of several permits (Oil Sands Leases) through several auction sales, notably the Griffon permit, where interpretation of the 2008/2009 winter appraisal campaign is underway. The Group’s 2009 production amounted to 8 kb/d, stable compared to 2008.

 

 

On the Surmont permit, construction of the first phase of industrial development (Surmont Phase 1A) ended in June 2007 with the gradual start-up of the steam injection for the first eighteen well pairs. The first well pairs tested SAGD (Steam Assisted Gravity Drainage) production in October 2007, and commercial production started in November 2007.

Construction work for Phases 1B and 1C was conducted to add the sixteen well pairs needed to reach a production level estimated at 22 kb/d. The well pairs of Phase 1B gradually started production in 2009.

In early 2010, the partners of the project decided to launch the construction of the second phase of industrial development. Start-up of production from Surmont Phase 2 is scheduled in 2015 and overall production capacity from Surmont (Phases 1 and 2) is expected to increase to 110 kb/d (in 100%).


 

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The Joslyn permit, located approximately 140 km north of Surmont, is expected to be developed through mining techniques in two development phases of 100 kb/d of bitumen each.

In 2009, the pre-project for the first development phase (Joslyn North Mine) was completely reviewed, notably to meet the requirements of the February 2009 new regulation related to tailings management. The review was completed in February 2010, concurrent with the filing of an updated administrative file with the authorities. Continuation of preparation for the first phase was approved in early March 2010, together with the launch of basic engineering studies. Development of the project is expected to be approved in the following years for a start-up in 2017. However, this schedule is subject to the ERCB (Energy Resources Conservation Board) administrative approval process.

In addition, a small SAGD production unit that started production in 2006, but did not reach the expected 10 kb/d plateau production because of constraints on the steam injection pressure, has been suspended since March 2009. The future of the facility (mothballing or complete removal) has been subject to the request for authorization filed with ERCB in early 2010. The corresponding reserves were debooked as of December 31, 2008.

 

 

In 2006, TOTAL conducted studies leading to the decision to locate a delayed coker technology upgrader with a capacity of approximately 230 kb/d in Edmonton (Alberta). This upgrader is expected to be built in two phases to match the anticipated increase in bitumen production on the Joslyn permit. Pursuant to a public announcement in May 2007 and the ERCB filing in December 2007, the project is now subject to a public hearing expected in late May 2010. Basic engineering studies, launched in May 2008, ended in late 2009. This was the last step before construction work is launched. However, the final decision to launch the project can only be made after the approval by the administrative authorities and start-up should coincide with start-up of Joslyn North Mine.

 

 

In August 2008, the Group closed the acquisition of Synenco, whose two principal assets are a 60% interest in the Northern Lights project and 100% of the adjacent McClelland permit. In early 2009, the Group sold a 10% share in the Northern Lights project and a 50% share in the McClelland permit to Sinopec, the other partner in the project, reducing its interest in each of the assets to 50%. The Northern Lights project, located approximately 50 km north of Joslyn, is expected to be developed through mining techniques.

 

In the United States, the Group’s 2009 production amounted to 16 kboe/d, compared to 6 kboe/d in 2008 and 18 kboe/d in 2007.

 

 

In the Gulf of Mexico:

 

   

The deep-offshore Tahiti oil field (17%) started producing in May 2009 and rapidly reached plateau production of 135 kb/d.

 

   

In September 2007, the Group committed to developing the first phase of the deep-offshore Chinook project (33.33%), with a production test scheduled in 2010.

 

   

TOTAL acquired six exploration blocks in March 2009.

 

   

In April 2009, TOTAL and Cobalt signed an agreement to merge both companies’ deep-offshore acreage, with Cobalt holding a 60% interest and TOTAL the remaining 40%. As part of this agreement, Cobalt is operating the exploration part and TOTAL is providing the drilling rig for the first five exploration wells. In addition, engineers from TOTAL are assigned to the exploration team set up by Cobalt in Houston.

 

   

TOTAL operates production on the Matterhorn and Virgo fields.

 

 

In Alaska, TOTAL acquired a 30% interest in several onshore exploration blocks, referred to as White Hills, in 2008. Most of these blocks were relinquished in mid-2009 following disappointing results. In 2007, the Group also acquired thirty-two offshore exploration blocks in the Beaufort Sea.

 

 

In late 2009, TOTAL signed a joint venture agreement with Chesapeake, effective retrospectively since October 1, 2009. As part of this joint venture, TOTAL holds 25% of Chesapeake’s non-conventional gas portfolio in the Barnett Shale area in Texas, which produce approximately 700 Mcf/d.

 

 

In January 2009, the Group finalized the acquisition of a 50% interest in American Shale Oil LLC in order to study the technology to develop oil shales in Colorado.

In Mexico , TOTAL is conducting various studies in cooperation with state-owned PEMEX under a technical cooperation agreement signed in 2003 and renewed in early 2010.


 

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South America

In 2009, TOTAL’s production in South America (including production of equity affiliates and non-consolidated subsidiaries) was 182 kboe/d, representing 8% of the Group’s overall production, compared to 224 kboe/d in 2008 and 230 kboe/d in 2007.

In Argentina, TOTAL has been present since 1978 and operates 27% of the country’s gas production(1). The Group’s production was 80 kboe/d in 2009, compared to 81 kboe/d in 2008 and 80 kboe/d in 2007.

 

 

In the Neuquen Basin, the connection of satellite discoveries and an increase in compression capacity allowed the extension of the San Roque (24.7%, operator) and Aguada Pichana (27.3%, operator) fields’ plateau production.

The low-pressure compression project on the Aguada Pichana field was brought on-line in August 2007. Development of the Aguada Pichana North discovery is underway. The second development phase was brought on-line between September and November 2009 with five producing wells. It supplements the first phase that started in December 2007. Twenty-two wells were drilled in 2009 on the principal portion of the field.

In February 2009, TOTAL and the Argentinean authorities signed an agreement extending the Aguada Pichana and San Roque concessions for ten years (from 2017 to 2027). As part of this agreement, a 3D seismic survey was shot in late 2009 in the Las Carceles canyons area to allow exploration to continue on Aguada Pichana, on the western portion of the area that is already developed.

 

 

In Tierra del Fuego, the Group operates notably the offshore Carina and Aries fields (37.5%), which started up in 2005 and 2006, respectively. A fourth medium-pressure compressor was installed in July 2007 to debottleneck the facilities and increase the gas production capacity from approximately 424 Mcf/d to 530 Mcf/d (12 Mm3/d to 15 Mm3/d) on this zone. The Tierra del Fuego gas export pipeline does not currently have the capacity to transport all of the gas that could be produced with this development. Work to increase the capacity of the pipeline has been ongoing since 2008.

In late 2009, a decision was made to launch the development of the offshore Vega Pleyade field and to extend low-pressure compression with an objective to start up production in late 2014.

 

In Bolivia, the Group’s production, primarily gas, amounted to 20 kboe/d in 2009, compared to 22 kboe/d in 2008 and 28 kboe/d in 2007. TOTAL holds interests in six permits: two producing permits, San Alberto and San Antonio (15%); and four permits in the exploration or appraisal phase, Blocks XX West (75%, operator), Aquio and Ipati (80%, operator) and Rio Hondo (50%). The decline in 2009 production is primarily due to decreasing gas demand from Brazil, which is San Alberto’s and San Antonio’s major export market.

 

 

Regarding the Itau discovery, located on Block XX West, TOTAL filed in August 2009 a declaration of commerciality with the Bolivian authorities. Development of this field is proceeding and start-up is expected in the second half of 2010. Production from Itau will be routed to the existing facilities of the neighboring San Alberto field.

 

 

In 2004, TOTAL discovered the Incahuasi gas field on the Ipati Block. Following the interpretation of the 3D seismic acquisition conducted in 2008, an appraisal well is ongoing on the adjacent Aquio Block to confirm the extension of the discovery to the north.

In September 2008, TOTAL entered into a cooperation agreement with Gazprom and Yacimientos Petrolíferos Fiscales Bolivianos to explore the Azero Block within the framework of a joint venture company. TOTAL and Gazprom will be partners with equal interests in this joint venture company.

In Brazil, TOTAL holds interests in Block BC-2 (41.2%) and Block BM-C-14 (50%) located in the Campos Basin.

 

 

The partners on Block BC-2 drilled an appraisal well early in 2007 and filed a Declaration of Commercial Discovery with the Agência National do Petroléo (ANP/National Oil Agency) in late August 2007. Following seismic reprocessing, a pre-salt prospect was found under the Xerelete (formerly Curió) discovery made in 2001 in water depths of 2,400 m. An appraisal well is expected to be drilled in 2011.

 

 

The southern extremity of Xerelete is located on the adjacent BM-C-14 Block. In 2009, partners on both blocks finalized a unitization agreement for the field that has been submitted to ANP for approval.

In Colombia, TOTAL has been present since 1973 with production of 23 kboe/d in 2009, similar to 2008, compared to 19 kboe/d in 2007. TOTAL holds a 19% interest in the onshore Cupiaga and Cusiana fields, located at the base of the Andes, and a 50% interest in


 

 

1. Source: Argentinean Ministry of Federal Planning, Public Investment and Services – Energy Secretary.

 

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the Niscota exploration permit located 300 km northeast of Bogota. TOTAL is also active through its interest in CEPSA, which has operated the Caracara Block since 2008.

 

 

On Cusiaga, as part of two expansion projects, construction of the facilities started in July 2009 to increase gas production capacity from 180 Mcf/d currently to 250 Mcf/d and begin recovering 6 kb/d of LPG. First production of additional gas and LPG is expected in the second half of 2010 and in 2011, respectively.

 

 

On Niscota, drilling of the Huron-1 well led to the discovery in 2009 of a gas and condensate field. Appraisal of the Huron-1 structure is ongoing with the launch of a 3D seismic campaign to define the size of the discovery and to plan for future appraisal wells.

In French Guiana, TOTAL acquired a 25% interest in the Guyane Maritime permit in December 2009. The acquisition is subject to approval by the French authorities. The permit, located about 150 km off the coast, covers an area of approximately 32,000 km2 in water depths ranging from 2,000 to 3,000 meters. A 3D seismic acquisition program is already underway on this permit.

In Trinidad & Tobago, TOTAL has been present since 1996 with production of 5 kb/d in 2009, compared to 6 kb/d in 2008 and 9 kb/d in 2007. TOTAL holds a 30% interest in the offshore Angostura field located on Block 2C. A second phase intended to develop gas reserves is underway, with first production expected in 2011.

In Venezuela, TOTAL has been present since 1980 and is one of the main partners of state-owned PDVSA (Petróleos de Venezuela S.A.). The Group’s 2009 production amounted to 54 kboe/d, compared to 92 kboe/d in 2008 and 94 kboe/d in 2007. TOTAL holds interests in PetroCedeño (30.323%), Yucal Placer (69.5%) and in the offshore exploration Block 4, located in the Plataforma Deltana (49%).

 

 

Pursuant to the decision by the Venezuelan authorities to terminate all operating contracts signed in the 1990s, TOTAL signed heads of agreement in June 2007 with PDVSA, with the approval of the Ministry of Energy and Oil, providing for the transformation of the Sincor association into a mixed public/private company, PetroCedeño, and the transfer of operations to this mixed company. Under this agreement, TOTAL’s interest in the project decreased from 47% to 30.323% and PDVSA’s interest increased to 60%. Conditions for this transformation were approved by the Venezuelan National Assembly in October 2007 and the transformation was finalized in February 2008.

 

PDVSA agreed to compensate TOTAL for the reduction of its interest in Sincor by assuming $326 million of debt and by paying, mostly in crude oil, $834 million. The compensation process was completed in 2009.

 

 

On Block 4, the exploration campaign, which involved three wells, was completed in October 2007. In October 2008, the Ministry of Energy and Oil agreed to let the joint venture retain the Cocuina discovery zone (lots B and F) and relinquish the rest of the block.

 

 

In early 2008, TOTAL signed two agreements for joint studies with PDVSA on the Junin 10 Block, in the Orinoco Belt.

Asia-Pacific

In 2009, TOTAL’s production in the Asia-Pacific region was 251 kboe/d, representing 11% of the Group’s overall production, compared to 246 kboe/d in 2008 and 252 kboe/d in 2007.

In Australia, where TOTAL has held leasehold rights since 2005, the Group owns twelve offshore permits, including four that it operates, off the northwest coast in the Browse, Vulcan, Bonaparte and Carnavon Basins.

 

 

In the Browse Basin, preparation of the Ichthys gas and condensates field development, located on the WA-285P permit (24%), is ongoing. FEED (Front End Engineering and Design) studies were launched in 2009 for a floating platform designed for gas production, treatment and export, an FPSO to stabilize and export condensates, a nearly 900 km gas pipeline and a liquefaction plant located in Darwin.

Production capacity is expected to be 8.4 Mt/y of LNG, 1.6 Mt/y of LPG and 100 kb/d of condensates. The field is expected to come onstream in the second half of the decade.

 

 

Major seismic acquisition activity occurred in 2008 on the four permits operated by TOTAL, followed by the interpretation of data in 2009. A drilling campaign is expected to be carried out in 2010 and 2011.

 

 

In 2009, TOTAL disposed of a 20% interest in the WA-269P permit (Carnavon Basin) and relinquished the adjacent WA-370P permit.

In Bangladesh, TOTAL operated two exploration blocks, Blocks 17 and 18, acquired in 2007. In 2008, a 3D seismic campaign was conducted on these blocks located off the southeastern coast. Following the


 

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seismic interpretation, the decision to relinquish the blocks was made in February 2009. The branch was closed in October 2009.

In Brunei, where TOTAL has been present since 1986, the Group operates the offshore Maharaja Lela Jamalulalam field located on Block B (37.5%). The Group’s production was 12 kboe/d in 2009, compared to 14 kboe/d in 2008 and 2007. The gas produced at this field is delivered to the Brunei LNG liquefaction plant.

On Block B, a new drilling campaign started in July 2009. Exploration operations on deep-offshore Block J (60%, operator) have been suspended since May 2003 due to a border dispute between Brunei and Malaysia.

In China, the Group is present on the South Sulige block, located in the Ordos Basin, in the Inner Mongolia province. Appraisal work was conducted on this block between 2006 and 2008, in particular seismic acquisition, the drilling of four new wells and tests on existing wells. Development studies were carried out in 2008 and were continued in 2009 in order to define a development plan with the China National Petroleum Corporation (CNPC). The joint development plan was submitted to the CNPC in January 2010.

In Indonesia, TOTAL has been present since 1968 with production of 190 kboe/d in 2009, compared to 177 kboe/d in 2008 and 180 kboe/d in 2007.

TOTAL’s operations are primarily concentrated on the Mahakam permit (50%, operator), which covers several fields, including Peciko and Tunu, the largest gas fields in the East Kalimantan area. TOTAL also holds an interest in the Sisi-Nubi field (47.9%, operator). TOTAL delivers most of its natural gas production to the Bontang LNG plant operated by the Indonesian company PT Badak. The overall capacity of the eight liquefaction trains at Bontang LNG is 22 Mt/y.

In 2009, gas production operated by TOTAL amounted to 2,561 Mcf/d. The gas operated and delivered by TOTAL to Bontang LNG accounted for 80% of its supply. In addition to gas production, operated condensates and oil production from the Handil and Bekapai fields amounted to 53 kb/d and 26 kb/d, respectively.

 

 

On the Mahakam permit:

 

   

Drilling of additional wells on the Tunu field continued in 2009 as part of the twelfth and thirteenth development phases. A new seismic campaign to improve imaging on the shallow reservoirs and to identify the optimal location for additional wells was ongoing at year-end 2009. Gas production on Tunu was 1,269 Mcf/d in 2009. The eleventh development

   

phase, launched in 2005, was completed in late 2009 with the commissioning of onshore low-pressure compression units.

 

   

On Peciko, following the start-up of a new platform (Phase 5) in late 2008, a new phase of drilling operations (Phase 7) started in 2009 and is expected to continue in 2010. New low-pressure compression capacities (Phase 6) are expected to be commissioned in 2010. Gas production on Peciko was 737 Mcf/d in 2009.

 

   

On the East Bekapai exploration well, the oil discovery made in 2008 led to the launch of a development study, which is currently underway.

 

   

The development of South Mahakam with the Stupa, West Stupa and East Mandu discoveries was launched in early 2008, with production scheduled to begin in 2012.

 

 

In 2008, a seismic campaign was conducted on the Southeast Mahakam exploration block (50%, operator), located in the Mahakam Delta. Drilling of a first exploration well is expected in 2010. TOTAL was awarded this block in early 2007.

 

 

On the Sisi-Nubi field, which began production in November 2007, drilling operations continue and gas production reached 396 Mcf/d in 2009. The gas from Sisi-Nubi is produced through Tunu’s processing facilities.

In February 2009, the Group signed, alongside its partner Inpex and the state-owned company Pertamina, heads of agreement with a consortium of LNG buyers in Japan, setting out the principal terms for an extension of the 1973 and 1981 LNG sales contracts. As part of this agreement, a total of 25 Mt of LNG is expected to be delivered to Japan between 2011 and 2020 from the Bontang LNG Plant. The gas supplied will come from the Mahakam permit.

In Malaysia, TOTAL signed a production sharing contract in May 2008 with state-owned Petronas for the offshore exploration Blocks PM303 and PM324 (70%, operator). An operating structure was created in 2008 in Kuala Lumpur.

In 2009, a 3D seismic acquisition covering 1,650 km2 was shot on Block PM303. Processing agreements for this seismic acquisition and reprocessing agreements for other seismic data available on Block PM324 were signed in July 2009, totaling an area of 2,600 km2 for both blocks. Drilling in high pressure/high temperature conditions is expected to be carried out in 2011.

The offshore SKF Block (42.5%) was relinquished in 2009.


 

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In Myanmar, TOTAL operates the Yadana field (31.2%). Located on offshore Blocks M5 and M6, this field produces gas that is delivered mainly to PTT (the Thai state-owned company) to be used in Thai power plants. In 2009, the Group’s production was 13 kboe/d, compared to 14 kboe/d in 2008 and 17 kboe/d in 2007.

In Thailand, the Group’s production was 36 kboe/d in 2009, compared to 41 kboe/d in 2008 and 2007. The Group’s main asset is the Bongkot gas and condensates field (33.3%). In late 2007, the Thai authorities agreed to extend the end of the concession period of the field by ten years, from 2013 to 2023. PTT purchases all of the natural gas and condensates production. Gas demand, which decreased at the beginning of 2009, recovered by year-end to the 2008 level.

 

 

The northern portion of the Bongkot field is being developed in several phases:

 

   

Production from the 3F development phase (three production platforms) started in July 2008.

 

   

Production from the 3G development phase (two platforms), launched following gas discoveries made in 2007, started in August 2009.

 

   

The 3H development phase (three platforms) was launched in July 2008 following gas discoveries made in the first half of 2008. Commissioning is expected in 2010.

Additional compression facilities were installed on four platforms to increase gas production.

 

 

The southern portion of this field (Great Bongkot South) is also being developed in several phases. This development is designed to include a processing platform, a residential platform and thirteen production platforms. In September 2009, the partners formalized a gas sales contract with PTT. Construction of the facilities started in 2009 and first production is expected in 2012.

To prepare for the next development phases of this large field, three exploration wells were drilled in 2009 in the northern portion and another well in the southern portion. Interpretation of the results is underway.

In Vietnam, TOTAL holds a 35% interest in the production sharing contract for the offshore 15-1/05 exploration block following an agreement signed in October 2007 with PetroVietnam. A 3D seismic acquisition covering 1,600 km2 was shot in the summer of 2008 on this block. A first oil discovery was made in November 2009 on the southern portion of the Block.

 

In March 2009, TOTAL and PetroVietnam signed a production sharing contract for Blocks DBSCL-02 and DBSCL-03. Located in the Mekong Delta region, these onshore blocks are held by TOTAL (75%, operator) and PetroVietnam (25%). A first 2D seismic acquisition campaign was shot in November 2009.

Commonwealth of Independent States (CIS)

In 2009, TOTAL’s production in CIS was 24 kboe/d, representing 1% of the Group’s overall production, compared to 26 kboe/d in 2008 and 19 kboe/d in 2007.

In Azerbaijan, TOTAL has been present since 1996 with production in 2009 of 12 kboe/d, compared to 18 kboe/d in 2008 and 11 kboe/d in 2007. The Group’s production is focused on the Shah Deniz field (10%). TOTAL holds a 10% interest in South Caucasus Pipeline Company, owner of the SCP (South Caucasus Pipeline) gas pipeline that transports the gas produced in Shah Deniz to the Turkish and Georgian markets. TOTAL also holds a 5% interest in the BTC (Bakou-Tbilissi-Ceyhan) oil pipeline, owned by BTC Co., which connects Baku and the Mediterranean Sea.

 

 

Gas deliveries to Turkey and Georgia from the Shah Deniz field continued throughout 2009, at a lower pace for Turkey due to weaker demand. Also, during the spring and summer of 2009, SOCAR, the Azerbaijan state-owned company, did not take the gas quantities set in the agreement, but SOCAR made the payments provided for by the take-or-pay agreement.

Development studies and business negotiations for the sale of additional gas needed to launch a second development phase in Shah Deniz continued in 2009.

 

 

On the BTC oil pipeline, notably used to transport the condensates produced at Shah Deniz, equipment was installed in 2009 to inject chemicals to reduce head losses. They are expected to increase the oil pipeline capacity from 1Mb/d to 1.2 Mb/d.

In 2009, TOTAL and SOCAR signed an exploration, development and production sharing contract for a permit located on the offshore Absheron block. TOTAL (40%) will be the operator during the exploration phase and a joint operating company will conduct operation during the development phase. Drilling of an exploration well is expected to start in 2010.

In Kazakhstan, TOTAL has been present since 1992 through the interest it holds in the North Caspian Sea permit, which includes notably the Kashagan field. The size of this field may eventually allow production to


 

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reach nearly 1,500 kb/d (in 100%). This project is expected to be developed in several phases.

On Kashagan, the development plan for the first phase (300 kb/d) was approved in February 2004 by the Kazakh authorities, allowing work to begin on the field. Drilling of development wells, which began in 2004, continued in 2009 and production is expected to begin in late 2012.

The agreements signed in October 2008 by members of the North Caspian Sea Production Sharing Agreement (NCSPSA) consortium and the Kazakh authorities ended the disagreement that began in August 2007. The implementation of these agreements led to a reduction of TOTAL’s share in NCSPSA from 18.52% to 16.81%. The operating structure was reconfigured and the North Caspian Operating Company (NCOC), a joint operating company, was entrusted with the operatorship. NCOC started operating the field in January 2009. NCOC supervises and coordinates NCSPSA’s operations and is directly responsible for the schedule, reservoir modeling, conceptual development studies and relations with the Kazakh authorities. NCOC uses TOTAL’s management system and the company’s chief executive officer is also an executive from TOTAL.

In Russia, where TOTAL has been present since 1989, production from the Kharyaga field (40%, operator) rose to 12 kboe/d in 2009 from 8 kboe/d in 2008 and 2007. TOTAL strengthened its positions in the country through its partnerships with Gazprom and Novatek.

 

 

In July 2007, TOTAL and Gazprom signed an agreement for the first phase of development on the giant Shtokman gas and condensates field, located in the Barents Sea. Shtokman Development AG (TOTAL, 25%) was created in February 2008 to design, build, finance and operate the first development phase with an expected overall production capacity of 23.7 Bm3/y. Engineering studies are underway with an investment decision expected in March 2011 for the part of the project that will allow the export of 23.7 Bm3/y of gas by pipeline to the Gazprom network (offshore development, gas pipeline and onshore gas and condensates processing facilities – Teriberka site). The investment decision is expected before the end of 2011 for the LNG part of the project that will allow the export of 7.5 Mt/y of LNG from a new harbor located in Teriberka, representing approximately half of the gas produced by the first development phase.

 

 

In December 2009, TOTAL finalized the acquisition from Novatek of a 49% interest in Terneftegas, which holds a development and production license on the onshore Termokarstovoye field. Appraisal work is expected to be carried out in 2010 and 2011 on this gas and condensates field located in the Yamalo-Nenets region.

 

 

On the Kharyaga field, work related to the development plan of Phase 3, approved in December 2007, is ongoing. This development plan is intended to maintain plateau production at the 30 kboe/d (in 100%) level reached in late 2009. In December 2009, TOTAL signed an agreement to sell a 10% interest in Kharyaga to state-owned Zarubezhneft. Following this divestment, effective as of January 1, 2010, TOTAL holds a 40% interest in this field.

 

 

In October 2009, TOTAL signed an agreement establishing the principles of a partnership with KazMunaiGas (KMG) for the development of the Khvalynskoye gas and condensates field, located offshore in the Caspian Sea (under Russian jurisdiction) on the border between Kazakhstan and Russia. Gas production is expected to be transported to Russia. Pursuant to this agreement, TOTAL is planning to acquire a 17% interest on KMG’s share.

Europe

In 2009, TOTAL’s production in Europe was 613 kboe/d, representing 27% of the Group’s overall production, compared to 616 kboe/d in 2008 and 674 kboe/d in 2007.

In France, the Group’s production was 24 kboe/d in 2009, down from 25 kboe/d in 2008 and 27 kboe/d in 2007. The Group has operated fields in this country since 1939, notably the Lacq (100%) and Meillon (100%) gas fields, located in the southwest of the country.

On the Lacq field, operated since 1957, a carbon capture and storage pilot was commissioned in January 2010. In connection with this project, a boiler has been modified to operate in an oxy-fuel combustion environment and the carbon dioxide emitted is captured and re-injected in the depleted Rousse field. As part of TOTAL’s sustainable development policy, this project will allow the Group to assess one of the technological possibilities for reducing carbon dioxide emissions.

In Italy, the Tempa Rossa field (50%, operator), discovered in 1989 and located on the unitized Gorgoglione concession (Basilicate region), is one of TOTAL’s principal assets in the country.

Site preparation work started in August 2008, but the proceedings initiated by the Prosecutor of the Potenza Court against Total Italia led to a freeze in the preparation work. New calls for tenders have been launched related to certain contracts that had been cancelled. Preparation work related to the drilling of an appraisal well started in December 2009. The partners on Tempa Rossa are expected to make the final investment decision for the project in 2011.


 

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In addition, the extension plan for the Tarente refinery export system, needed for the development of the Tempa Rossa field, is expected to be submitted to the Italian authorities in 2010 for an approval expected in 2011. Start-up of production is currently expected in 2014 with a plateau production of 50 kb/d.

In Norway, where the Group has been present since the late 1960s, TOTAL holds interests in seventy-seven production permits on the Norwegian continental shelf, including fourteen that it operates. Norway is the largest single-country contributor to the Group’s production, with volumes of 327 kboe/d in 2009, compared to 334 kboe/d in 2008 and 338 kboe/d in 2007.

 

 

In the Norwegian North Sea, production was 256 kboe/d in 2009. The most substantial contribution to production, for the most part non-operated, comes from the Ekofisk Area located in the southern region. This region also includes the Greater Hild area (Hild East, Central and West) located in the north.

 

   

In the Ekofisk area, a major work program continued in 2009 on the Ekofisk (39.9%) and Eldfisk (39.9%) fields to increase production, oil recovery and the life span of existing facilities. A system of permanent seismic pick-ups will be set up in order to optimize future wells.

 

   

On Hild East, located in the PL 040 / 043 (49%, operator) permits, drilling of an appraisal/pre-development well started in September 2009. Results are expected to define the basis of the development plan. Six exploration and appraisal wells had already confirmed the potential of the Greater Hild area.

 

   

On Frigg, dismantling of the offshore facilities was completed in 2009, on schedule.

 

 

In the Norwegian Sea, the Haltenbanken area includes the Tyrihans (23.2%), Mikkel (7.7%) and Kristin (6%) fields as well as the Åsgard (7.7%) field and its satellites Yttergryta (24.5%) and Morvin (6%). In 2009, the Group’s production in the Haltenbanken area was 56 kboe/d.

 

   

Tyrihans came onstream in July 2009, as planned, and Yttergryta started in January 2009. Morvin is expected to start up production in 2010.

 

   

On the undeveloped Victoria discovery (PL211), operated by TOTAL (40%), the 6506/9-1 appraisal well confirmed the presence of gas, but revealed a structure more complex than expected.

 

 

In the Barents Sea, LNG production on Snøhvit (18.4%) started up in 2007. This project includes both the development of the natural gas field and the construction of the associated liquefaction facilities. Due to design problem, the plant experienced performance and reliability concerns during the start-up phase. A number of turnarounds were scheduled to fix the issue. Excluding turnarounds, production levels close to the plant’s production capacity (4.2 Mt/y for LNG production) were achieved in 2009.

Between 2007 and 2009, exploration and appraisal work occurred on various permits, including the drilling of a successful appraisal well on the Onyx SW discovery (PL 255, 20%), in the Haltenbanken area. In the Norwegian North Sea, the oil discovery on Dagny (PL 048, 21.8%) and the Pan/Pandora (PL 120, 11%) discovery, made in 2008, substantially increased the potential of the Sleipner and Visund areas, respectively. A number of discoveries were also made in 2009, in particular on Beta Vest (PL 046, 10%) near Sleipner, Katla (PL 104, 10%), located south of Oseberg, and Vigdis North East (PL 089, 5.6%), located south of Snorre. In the Barents Sea, during the twentieth licensing round, TOTAL was awarded a new exploration permit: PL 535 (40%). On this permit, a 3D seismic acquisition was completed in 2009 and drilling is expected to begin in 2011.

In the Netherlands, TOTAL has been active in natural gas exploration and production since 1964 and currently holds twenty-four offshore production permits, including twenty that it operates, and an offshore exploration permit, E17c (16.92%), awarded in February 2008. The Group’s 2009 production amounted to 45 kboe/d, compared to 44 kboe/d in 2008 and 45 kboe/d in 2007. The acquisition of Goal Petroleum (Netherlands) B.V. in August 2008 is expected to increase the Group’s production by 8 kboe/d by 2011.

 

 

On the K5F field (40.39%, operator), production began in September 2008. This project is comprised of two sub-sea wells connected to the existing production and transport facilities. K5F is the first project in the world to use only electrically driven sub-sea wellheads and systems. This advance in sub-sea technologies is expected to increase the reliability of systems and improve environmental performance.

 

 

The development of the K5CU project (49%, operator) was launched in 2009 and production is expected to start in 2011. This development includes four wells supported by a new platform connected to the K5A platform by a 15 km gas pipeline.

In the United Kingdom, TOTAL has been present since 1962 with production in 2009 of 217 kboe/d, compared to 213 kboe/d in 2008 and 264 kboe/d in 2007. The


 

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United Kingdom accounts for nearly 10% of the Group’s overall production. 85% of this production comes from operated fields located in two major zones: the Alwyn zone in the northern North Sea, and the Elgin/Franklin zone in the Central Graben.

 

 

On the Alwyn zone, wells drilled on the Alwyn North field (100%) discovered new reserves that came onstream in 2007 and 2009. In addition, the start-up of production from satellites or new reservoir compartments allowed the potential for production to remain at a level near the processing and compressing capacities of the Alwyn platform (530 Mcf/d of gas increased to 575 Mcf/d since the summer 2008 planned shutdown for maintenance).

The Jura field (100%), discovered in late 2006, started production in May 2008 through two sub-sea wells connected to the pipeline linking Forvie North and Alwyn. The production capacity of this field is 50 kboe/d (gas and condensates).

Development studies are nearing completion for Islay (100%), a second gas and condensates discovery made in 2008 and located in a faulted panel immediately east of Jura.

In late 2008, TOTAL increased its interest in the Otter field from 54.3% to 81%.

 

 

The development of the Elgin (35.8%) and Franklin fields (35.8%), in production since 2001, made a substantial contribution to the Group’s operations in the United Kingdom. This project constituted a technical milestone, combining the development of one of the deepest reservoirs in the North Sea (5,500 m) with temperature and pressure conditions among the highest in the world (190°C and 1,100 bars).

On the Elgin field, the infill well drilled between November 2008 and September 2009 started production in October 2009 at a rate of 18 kboe/d. Drilling of a second infill well is ongoing. A similar well was completed on the Franklin field in 2007. Drilling of such a well in a high pressure/high temperature depleted field is a major technical milestone.

Glenelg (49.5%) and West Franklin (35.8%), operated satellites of the Elgin and Franklin fields, respectively, started production in March 2006 and September 2007, respectively. Studies are underway for an additional development of West Franklin from a new platform. Anticipated production for this field over its life is estimated to total approximately 200 Mboe (in 100%).

As part of an agreement signed in 2005, TOTAL acquired a 25% interest in two blocks located near

Elgin and Franklin by drilling a successful appraisal well on the Kessog structure. This interest was increased to 50% in 2009 following the completion of a long-duration test whose results are under study.

 

 

In the West of Shetland area, TOTAL increased its interest to 80% in the Tormore and Laggan fields in early 2010. In late 2009, TOTAL acquired a 43.75% interest (and operatorship) in the P967 permit located north of Laggan-Tormore. This permit includes the Tobermory gas discovery.

A successful exploration well was drilled in 2007 on the Tormore prospect, located 15 km southwest of the Laggan field. Development studies allowed the Group and its partners to select a joint development plan for both fields using sub-sea production facilities and off-gas treatment (gas and condensates) at a plant located near the Sullom Voe terminal in the Shetland Islands. The gas would be exported to the Saint-Fergus terminal through a new pipeline connected to the Frigg pipeline (FUKA). The final investment decision for the project has been made in March 2010 and production is scheduled to start in 2014 with an expected capacity of 90 kboe/d.

TOTAL holds interests in ten assets operated by third parties, the most important in terms of reserves being the Bruce (43.25%) and Alba (12.65%) fields.

Middle East

In 2009, TOTAL’s production in the Middle East (including production of equity affiliates and non-consolidated subsidiaries) was 438 kboe/d, representing 19% of the Group’s overall production, compared to 432 kboe/d in 2008 and 390 kboe/d in 2007.

In the United Arab Emirates, where TOTAL has been present since 1939, the Group’s production in 2009 was 214 kboe/d, compared to 243 kboe/d in 2008 and 242 kboe/d in 2007. The decline in 2009 is primarily due to the implementation of OPEC quotas.

In Abu Dhabi, TOTAL holds interests in the Abu Al Bu Khoosh field (75%, operator), in the Abu Dhabi Company for Onshore Oil Operations (ADCO, 9.5%), which operates the five major onshore fields in Abu Dhabi, and in Abu Dhabi Marine (ADMA, 13.3%), which operates two offshore fields. TOTAL also has interests in Abu Dhabi Gas Industries (GASCO, 15%), which produces LPG and condensates from the associated gas produced by ADCO, and in Abu Dhabi Gas Liquefaction Company (ADGAS, 5%), which produces LNG, LPG and condensates.


 

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In early 2009, TOTAL signed agreements for a 20-year extension of its participation in the GASCO joint venture starting on October 1, 2008.

The Group also holds a 33.3% interest in Ruwais Fertilizer Industries (FERTIL), which produces urea. In 2005, FERTIL’s corporate life was extended for an additional 25-year period. FERTIL 2, a new project, was launched in 2009 to build a new granulated urea unit with a capacity of 3,500 t/d (1.2 Mt/y). This project will allow FERTIL to more than double production and reach nearly 2 Mt/y.

In Iraq, TOTAL participated in 2009 in both calls for tenders launched by the Iraqi Ministry of Oil. The CNPC-led consortium that includes TOTAL (25%) was awarded the development and production contract for the Halfaya field during the second call for tenders that was held in December 2009. This field is located in the province of Missan, north of Basra. In addition, the Group continued its major training program for Iraqi engineers. As a result, a training framework agreement was signed in December 2009 by TOTAL and the Iraqi Ministry of Oil.

In Iran, the Group’s production, in the form of buy-back agreements, amounted to 8 kb/d in 2009, compared to 9 kb/d in 2008 and 15 kb/d in 2007. For additional information on TOTAL’s operations in Iran, see “— Other Matters — Business Activities In Cuba, Iran, Sudan and Syria”.

In Oman, the Group’s production in 2009 was 34 kboe/d, stable compared to 2008 and 2007. The Group produces oil mainly on Blocks 6 and 53 as well as liquefied natural gas through its interests in the Oman LNG (5.54%)/Qalhat LNG (2.04%)(1) liquefaction plant, which has a capacity of 10.5 Mt/y.

In Qatar, TOTAL has been present since 1936 and holds interests in the Al Khalij field (100%), the NFB Block (20%) in the North Field, the Qatargas 1 liquefaction plant (10%), the Dolphin project (24.5%) and train 5 of Qatargas 2 (16.7%). The Group’s production was 141 kboe/d in 2009, compared to 121 kboe/d in 2008 and 74 kboe/d in 2007. Production substantially increased with the start-ups of Qatargas 2 and Dolphin.

 

 

Production from Dolphin started during the summer of 2007 and reached its full capacity in the first quarter of 2008. The contract, signed in December 2001 with state-owned Qatar Petroleum, provides for the sale of 2,000 Mcf/d of gas from the North Field for a 25-year period. The gas is processed in the Dolphin plant in Ras Lafan and exported to the United Arab Emirates through a 360 km gas pipeline.

 

 

Production from train 5 of Qatargas 2, which started in September 2009, reached its full capacity (7.8 Mt/y) in late 2009. TOTAL has owned an interest in this train since December 2006. In addition, TOTAL began to off-take part of the LNG

   

produced in compliance with the contracts signed in July 2006, which provide for the purchase of 5.2 Mt/y of LNG from Qatargas 2 by the Group.

The Group also holds a 10% interest in Laffan Refinery, a 146 kb/d condensate splitter that started up in September 2009.

In Syria, TOTAL is present on the Deir Ez Zor permit (100%, operated by DEZPC of which 50% is owned by TOTAL) and through the Tabiyeh contract that became effective in October 2009. For both assets, the Group’s production was nearly 20 kboe/d in 2009, compared to 15 kboe/d in 2008 and 2007.

Three new agreements were approved:

 

 

in November 2008, the 10-year extension of the Deir Ez Zor permit to 2021;

 

 

in October 2009, the Tabiyeh agreement, which primarily provides for an increase in the production from the gas and condensates Tabiyeh field; and

 

 

in July 2009, the Cooperation Framework Agreement, which provides for the development of oil projects in partnership with the Syrian company General Petroleum Corporation.

For additional information on TOTAL’s operations in Syria, see “— Other Matters — Business Activities In Cuba, Iran, Sudan and Syria”.

In Yemen, TOTAL has been present since 1987 with production in 2009 of 21 kboe/d, compared to 10 kboe/d in 2008 and 9 kboe/d in 2007. TOTAL has interests in the country’s two oil basins, as the operator on Block 10 (Masila Basin, East Shabwa permit, 28.57%) and as a partner on Block 5 (Marib Basin, Jannah permit, 15%). TOTAL also has an interest in the Yemen LNG project (39.62%).

The Yemen LNG liquefaction plant started up in October 2009. As part of this project, the liquefaction plant built in Balhaf on the southern coast of Yemen is supplied with gas produced on Block 18, located near Marib in the center of the country, through a 320 km pipeline. Production from the plant started with the commissioning of the first liquefaction train. Construction of the second train is nearing completion for a start-up by the summer of 2010. Overall production capacity from both trains is expected to reach 6.7 Mt/y of LNG.

In 2008, TOTAL strengthened its position in onshore exploration through the acquisition of a 30.9% interest in Block 70 following the purchase of a 40% share in Blocks 69 and 71 in 2007. Appraisal of a gas discovery on Block 71 is underway. The first well drilled on Block 70 discovered positive oil shows. The potential of this discovery has yet to be assessed.


 

 

1. Indirect interest through the 36.8% share of Qalhat LNG owned by Oman LNG.

 

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Table of Contents

OIL AND GAS ACREAGE

 

      2009    2008    2007
(in thousands of acres at
year-end)
   Undeveloped
acreage(1)
   Developed
acreage
   Undeveloped
acreage(1)
   Developed
acreage
   Undeveloped
acreage(1)
   Developed
acreage

Europe

  

Gross

   5,964    667    5,880    647    5,762    656
    

Net

   2,203    182    2,191    181    2,065    173

Africa

  

Gross

   85,317    1,137    85,883    1,112    93,469    1,165
    

Net

   45,819    308    41,608    292    50,564    281

Americas

  

Gross

   9,834    776    8,749    484    8,018    495
    

Net

   4,149    259    4,133    186    3,844    185

Middle East

  

Gross

   33,223    204    33,223    199    84,569    185
    

Net

   2,415    97    2,415    69    17,816    62

Asia

  

Gross

   29,609    397    25,778    387    30,391    388
    

Net

   16,846    169    12,529    131    13,417    109

Total

  

Gross

   163,947    3,181    159,513    2,829    222,209    2,889
    

Net(2)

   71,432    1,015    62,876    859    87,706    810

 

(1) Undeveloped acreage includes leases and concessions.
(2) Net acreage equals the sum of the Group’s fractional interests in gross acreage.

PRODUCTIVE WELLS

 

            2009    2008    2007
(wells at year-end)          Gross
productive
wells
   Net
productive
wells(1)
   Gross
productive
wells
   Net
productive
wells(1)
   Gross
productive
wells
   Net
productive
wells(1)

Europe

  

Liquids

   705    166    700    166    718    181
    

Gas

   328    125    328    127    305    115

Africa

  

Liquids

   2,371    669    2,465    692    2,448    684
    

Gas

   190    50    112    34    108    31

Americas

  

Liquids

   821    241    621    176    619    224
    

Gas

   1,905    424    254    79    276    102

Middle East

  

Liquids

   3,766    307    3,762    264    473    75
    

Gas

   136    32    83    15    70    13

Asia

  

Liquids

   157    75    184    68    315    96
    

Gas

   1,156    379    1,049    271    975    195

Total

  

Liquids

   7,820    1,458    7,732    1,366    4,573    1,260
    

Gas

   3,715    1,010    1,826    526    1,734    456

 

(1) Net wells equal the sum of the Group’s fractional interests in gross wells.

 

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Table of Contents

NET PRODUCTIVE AND DRY WELLS DRILLED

 

          2009   2008   2007
          Net
productive
wells
drilled(1)
  Net dry
wells
drilled(1)
  Net total
wells
drilled(1)
  Net
productive
wells
drilled(1)
  Net dry
wells
drilled(1)
  Net total
wells
drilled(1)
  Net
productive
wells
drilled(1)
  Net dry
wells
drilled(1)
  Net total
wells
drilled(1)

Exploratory

  Europe   —     1.3   1.3   1.3   2.0   3.3   2.1   1.0   3.1
  Africa   4.8   3.9   8.7   4.7   3.2   7.9   8.1   8.7   16.8
  Americas   —     2.0   2.0   —     2.6   2.6   0.7   1.3   2.0
  Middle East   —     —     —     0.4   —     0.4   —     0.6   0.6
  Asia   0.5   1.3   1.8   4.1   2.2   6.3   5.5   0.1   5.6
    Total   5.3   8.5   13.8   10.5   10.0   20.5   16.4   11.7   28.1

Development

  Europe   5.0   —     5.0   6.2   —     6.2   13.5   0.1   13.6
  Africa   27.5   0.2   27.7   38.3   6.4   44.7   51.6   —     51.6
  Americas   31.2   104.3   135.5   41.5   270.9   312.4   94.8   105.6   200.4
  Middle East   45.6   3.4   49.0   61.2   7.6   68.8   82.6   5.1   87.7
  Asia   63.5   0.3   63.8   58.7   —     58.7   58.0   —     58.0
    Total   172.8   108.2   281.0   205.9   284.9   490.8   300.5   110.8   411.3

Total

      178.1   116.7   294.8   216.4   294.9   511.3   316.9   122.5   439.4

 

(1) Net wells equal the sum of the Group’s fractional interests in gross wells.

EXPLORATORY AND DEVELOPMENT WELLS IN THE PROCESS OF BEING DRILLED

 

            2009    2008    2007
(wells at year-end)          Gross    Net(1)    Gross    Net(1)    Gross    Net(1)

Exploratory

   Europe    1    0.5    2    1.1    1    0.4
   Africa    4    1.3    7    2.5    3    0.6
   Americas    2    0.6    1    0.5    —      —  
   Middle East    1    0.4    1    0.3    —      —  
   Asia    —      —      1    0.1    4    1.8
     Total    8    2.8    12    4.5    8    2.8

Development

   Europe    5    2.2    7    3.7    22    4.7
   Africa    31    8.5    19    4.3    41    10.5
   Americas    60    17.8    9    3.2    6    2.4
   Middle East    40    4.8    5    2.2    14    6.1
   Asia    12    5.5    23    7.8    29    10.8
   Total    148    38.8    63    21.2    112    34.5

Total

        156    41.6    75    25.7    120    37.3

 

(1) Net wells equal the sum of the Group’s fractional interests in gross wells.

 

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Table of Contents

INTERESTS IN PIPELINES

The table below sets forth TOTAL’s interests in oil and gas pipelines.

 

As of December 31, 2009

Pipeline(s)

  Origin   Destination   %
interest
    Operator   Liquids   Gas
EUROPE                                
France                                

TIGF

  Network South West       100.00      x       x
Norway                                

Frostpipe (inhibited)

  Lille-Frigg, Froy   Oseberg   36.25          x    

Gassled(a)

          7.78              x

Heimdal to Brae Condensate Line

  Heimdal   Brae   16.76          x    

Kvitebjørn pipeline

  Kvitebjørn   Mongstad   5.00          x    

Norpipe Oil

  Ekofisk Treatment center   Teeside (UK)   34.93          x    

Oseberg Transport System

  Oseberg, Brage and Veslefrikk   Sture   8.65          x    

Sleipner East Condensate Pipe

  Sleipner East   Karsto   10.00          x    

Troll Oil Pipeline I and II

  Troll B and C   Vestprosess (Mongstad refinery)   3.71          x    
The Netherlands                                

Nogat pipeline

  F3-FB   Den Helder   23.19              x

WGT K13-Den Helder

  K13A-K4/K5   Den Helder   4.66              x

WGT K13-Extension

  Markham   K13-K4/K5   23.00              x
United Kingdom                                

Alwyn Liquid Export Line

  Alwyn North   Cormorant   100.00      x   x    

Bruce Liquid Export Line

  Bruce   Forties (Unity)   43.25          x    

Central Area Transmission

System (CATS)

  Cats Riser Platform   Teeside   0.57              x

Central Graben

Liquid Export Line (LEP)

  Elgin-Franklin   ETAP   15.89          x    

Frigg System: UK line

  Alwyn North, Bruce and others   St.Fergus (Scotland)   100.00      x       x

Ninian Pipeline System

  Ninian   Sullom Voe   16.00          x    

Shearwater Elgin Area Line (SEAL)

  Elgin-Franklin, Shearwater   Bacton   25.73              x

SEAL to Interconnector Link (SILK)

  Bacton   Interconnector   54.66      x       x
AFRICA                                
Algeria                                

Medgas

  Algeria   Spain   9.77 (b)            x

Gabon

                         

Mandji Pipe

  Mandji fields   Cap Lopez Terminal   100.00 (c)    x   x    

Rabi Pipe

  Rabi fields   Cap Lopez Terminal   100.00 (c)    x   x    
AMERICAS                                
Argentina                          

Gas Andes

  Neuquen Basin (Argentina)   Santiago (Chile)   56.50      x       x

TGN

  Network (Northern Argentina)       15.40      x       x

TGM

  TGN   Uruguyana (Brazil)   32.68      x       x
Bolivia                          

Transierra

  Yacuiba (Bolivia)   Rio Grande (Bolivia)   11.00              x
Brazil                          

TBG

  Bolivia-Brazil border   Porto Alegre via São Paulo   9.67              x

TSB (project)

  TGM (Argentina)   TBG (Porto Alegre)   25.00              x
Colombia                          

Ocensa

  Cusiana, Cupiagua   Covenas Terminal   15.20          x    

Oleoducto de Alta Magdalena

  Tenay   Vasconia   0.93          x    

Oleoducto de Colombia

  Vasconia   Covenas   9.55          x    
ASIA                                

Yadana

  Yadana (Myanmar)   Ban-I Tong (Thai border)   31.24      x       x
REST OF WORLD                                

BTC

  Baku (Azerbaijan)   Ceyhan (Turkey, Mediterranean)   5.00          x    

SCP

  Baku (Azerbaijan)   Georgia/Turkey Border   10.00              x

Dolphin (International transport and network)

  Ras Laffan (Qatar)   U.A.E.   24.50              x

 

(a) Gassled: unitization of Norwegian gas pipelines through a new joint venture in which TOTAL has an interest of 7.783%. In addition to its direct interest in Gassled, TOTAL holds a 14.4% interest in a joint venture with Norsea Gas AS, which holds 2.726% in Gassled.
(b) Through the Group’s interest in CEPSA (48.83%).
(c) Interest of Total Gabon. The Group has a financial interest of 57.96% in Total Gabon.

 

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Table of Contents

Gas & Power

 

 

 

The Gas & Power division is mainly focused on the optimization of the Group’s gas resources through marketing, trading, transport of natural gas and liquefied natural gas (LNG), LNG re-gasification and natural gas storage.

The division also contributes to the development of Group’s operations in the areas of liquefied petroleum gas (LPG) shipping and trading; power generation from gas-fired power plants or renewable energies; solar power systems and technology (notably through its subsidiaries Tenesol and Photovoltech); coal production, trading and marketing.

The Gas & Power division also conducts research and development related to new energies that will be increasingly necessary to complement hydrocarbons, in particular solar and biomass.

Finally, this division prepares and implements the Group’s strategy in the nuclear energy sector.

Natural Gas

In 2009, TOTAL continued to pursue its strategy of developing its operations downstream from natural gas production in order to optimize access for the Group’s current and future gas production and reserves to traditional markets (with long-term contracts between producers and integrated gas companies) and to markets open to international competition (including short-term contracts and spot sales).

The long-term contracts under which TOTAL sells its natural gas production usually provide for a price related to, among other factors, average crude oil and other petroleum product prices, as well as, in some cases, a cost-of-living index. In most cases, price formulas entail a time lag or an adjustment over time that reflects changes in oil price indexes.

In the context of deregulated natural gas markets, which allow customers to more freely access suppliers, in turn leading to new marketing schemes that are more flexible than traditional long-term contracts, TOTAL is developing trading, marketing and logistics businesses to offer its natural gas production directly to customers, primarily in the industrial and commercial markets.

Europe

TOTAL has been active in the downstream sector of the gas value chain in Europe for more than sixty years to maximize the value of its gas reserves.

 

In France, the Group’s transport and storage businesses located in the southwest of the country are grouped under TIGF, a wholly-owned subsidiary of the Group. This subsidiary operates a regulated transport network of 5,000 km of gas pipelines and, under a negotiated scheme, two storage units with 87 Bcf (2.5 Bm3) of usable capacity, representing approximately 20% of the natural gas storage capacity in France(1).

Highlights of 2009 included:

 

 

The inauguration in October of the Artère de Guyenne gas pipeline. This pipeline (70 km long and 900 mm in diameter) connects Captieux and Mouliets-et-Villemartin to facilitate the transport of gas, notably from the Fos Cavaou LNG terminal, to northern France.

 

 

The launch of an open season, involving four French and Spanish transportation operators, including TIGF, to develop Franco-Spanish interconnections. This open season allowed the long-term allocation of 80% of gas transport capacities between France and Spain in both directions. These allocations are scheduled to be in effect by 2013 with the development of two new projects: the Artère du Béarn and phase B of the Artère de Guyenne gas pipelines.

 

 

The increase by 3.5 Bcf (100 Mm3) of the storage capacity at Lussagnet in April, in compliance with the authorization provided by the decree published on April 9, 2008.

 

 

The acquisition of a 26.2% interest (through its interest in Géosud) in Géométhane, an Economic Interest Grouping that owns natural gas storage in a salt cavern with a capacity of 10.5 Bcf (0.3 Bm3), located in Manosque, in the southeast of France. A project to increase the storage capacity by 7 Bcf (0.2 Bm3) is under study for a commissioning scheduled in 2016.

In addition, the European Union adopted, on July 13, 2009, the Third Energy Package, which includes two directives and three regulations related to the natural gas and electricity markets. TOTAL will assess the potential impact on its gas and electricity transport, storage and supply operations as soon as the legislation is transposed into French law.

Regarding its marketing business, TOTAL is mainly developing on three major European markets.

In France, TOTAL operates through its marketing subsidiary Total Énergie Gaz (TEGAZ) which sold


 

 

1. GIE data (Gaz Infrastructures Europe), June 2009.

 

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Table of Contents

208 Bcf of natural gas (5.9 Bm3) in 2009, compared to 229 Bcf (6.5 Bm3) in 2008 and 245 Bcf (7 Bm3) in 2007. Despite a sharp decline in demand due to the economic crisis, TEGAZ posted a strong increase in sales to industrial and commercial customers, which are the subsidiary’s main market segments.

In Spain, Cepsa Gas Comercializadora markets gas in the industrial and commercial sectors. This company is held by TOTAL (35%), CEPSA (35%) and the Algerian national oil company, Sonatrach (30%). In 2009, Cepsa Gas Comercializadora sold approximately 70 Bcf (2 Bm3) of natural gas to industrial and commercial customers, similar to 2008, compared to 59 Bcf (1.7 Bm3) in 2007.

In the United Kingdom, TOTAL’s subsidiary Total Gas & Power Ltd markets gas and power to the industrial and commercial markets. The subsidiary is also active in gas, electricity and LNG trading worldwide. In 2009, 130 Bcf (3.7 Bm3) of natural gas was sold to industrial and commercial customers, compared to 134 Bcf (3.8 Bm3) in 2008 and 124 Bcf (3.5 Bm3) in 2007. Electricity sales amounted to 4.1 TWh in 2009, compared to 4.6 TWh in 2008 and 3.6 TWh in 2007. In 2007, TOTAL disposed of its 10% interest in Interconnector UK Ltd, a gas pipeline connecting Bacton in the United Kingdom to Zeebrugge in Belgium. This disposal did not affect TOTAL’s rights to transport gas through the pipeline.

The Americas

In the United States, the Group’s subsidiary Total Gas & Power North America Inc. marketed 1,586 Bcf (45 Bm3) of natural gas in 2009, compared to approximately 1,652 Bcf (46.9 Bm3) in 2008 and 1,606 Bcf (45.5 Bm3) in 2007, supplied by its own production and external sources.

In Mexico, Gas del Litoral, a company in which TOTAL holds a 25% interest, sold approximately 173 Bcf (4.9 Bm3) of natural gas in 2009, its third full year of activity, similar to 2008, compared to 95 Bcf (2.7 Bm3) in 2007.

In South America, TOTAL owns interests in several natural gas transport companies in Argentina, Chile and Brazil, including the following:

 

 

a 15.4% interest in Transportadora de Gas del Norte (TGN), which operates a gas transport network covering the northern half of Argentina;

 

 

a 56.5% interest in the companies that own the GasAndes pipeline, which connects the TGN network to the Santiago del Chile region; and

 

 

a 9.7% interest in Transportadora Gasoducto Bolivia-Brasil (TBG), whose gas pipeline supplies southern Brazil from the Bolivian border.

 

These assets represent a total integrated network of approximately 9,500 km of pipelines serving the Argentine, Chilean and Brazilian markets from gas-producing basins in Bolivia and Argentina, where the Group has natural gas reserves.

The actions taken by the Argentine government after the 2001 economic crisis and the subsequent energy crisis, marked in 2007 by a severe gas shortage during the southern winter, put TOTAL’s Argentine subsidiaries in difficult financial and operational situations, even after taking into account the restructuring of TGN’s debt, which was completed in 2006. The sale of the Group’s Argentine power generation assets was completed in 2007 and procedures to protect TOTAL’s investments, initiated in 2002 with the International Center for Settlement of Investment Disputes (ISCID), are ongoing.

During 2008 and 2009, gas production in Argentina decreased substantially, reducing the export of gas to Chile and prompting commercial discussions between GasAndes and its shippers about transportation contracts and their commitments.

Due to the deterioration of TGN’s financial situation as a result of the freeze of domestic tariffs and the restrictions on exports, TGN applied for a suspension of payments in December 2008, and launched a new process to restructure its debt. These decisions led the Argentinean authorities to set up a formal monitoring of TGN’s management.

Asia

TOTAL markets natural gas transported through pipelines in Indonesia, Thailand and Myanmar, and, in the form of LNG, to Japan, South Korea, China, Taiwan and India. The Group is also developing its re-gasified LNG marketing business in new emerging markets.

In India, Hazira LNG Private Limited, a company in which TOTAL holds a 26% interest, sold approximately 74 Bcf (2.1 Bm3) of natural gas in 2009, its fourth full year in operation, compared to 87 Bcf (2.5 Bm3) in 2008 and 76 Bcf (2.2 Bm3) in 2007.

Liquified Natural Gas

In the LNG chain, the Gas & Power division is responsible for operations downstream from liquefaction plants(1), including purchase, shipping, re-gasification, storage and marketing.

Through its subsidiaries Total Gas & Power Ltd and Total Gas & Power North America Inc., TOTAL has entered into agreements to obtain long-term access to


 

 

1. The Exploration & Production division is in charge of the Group’s natural gas liquefaction operations.

 

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LNG re-gasification capacity on the three continents that are the largest consumers of natural gas: North America (the United States and Mexico), Europe (France and the United Kingdom) and Asia (India). This diversified market presence allows the Group to access new liquefaction projects by becoming a long-term buyer of a portion of the LNG produced at the plants, thereby consolidating its LNG supply portfolio.

Europe

In France, TOTAL acquired in June 2006 an interest in Société du Terminal Méthanier de Fos Cavaou (STMFC). This terminal is expected to have a re-gasification capacity of 291 Bcf/y (8.25 Bm3/y), of which 79 Bcf/y (2.25 Bm3/y) has been reserved by TOTAL. The Group’s interest in STMFC’s share capital decreased to 28.8% from 30.3% in late 2009 pursuant to the provisions of the shareholders’ agreement, without impacting the re-gasification volumes reserved by TOTAL. In October 2009, the terminal was authorized by the prefectorial authorities to conduct commissioning tests and operate at reduced capacity. Commercial start-up is expected in the second quarter of 2010.

In addition, TOTAL and EDF signed in March 2010 a letter of intent whereby TOTAL will reserve re-gasification capacity in the planned Dunkirk LNG terminal being developed by Dunkerque LNG, a wholly-owned EDF subsidiary, and will also acquire an interest in this company.

In the United Kingdom, TOTAL acquired in December 2006 an 8.35% interest in the South Hook LNG re-gasification terminal project in connection with its entry in the Qatargas 2 project. Phase 1 (371 Bcf/y representing 10.5 Bm3/y) of the terminal was commissioned in October 2009 and Phase 2, expected to come onstream in the first half of 2010, is expected to increase the overall capacity of the terminal to 742 Bcf/y (21 Bm3/y).

In Norway, as part of the Snøhvit project, in which TOTAL holds an 18.4% interest and where the first deliveries started in October 2007, the Group signed in November 2004 a purchase agreement for 35 Bcf/y (1 Bm3/y) of natural gas primarily intended for North America and Europe. To transport this LNG, TOTAL also charters the Arctic Lady, a 145,000 m3 LNG tanker that was delivered in April 2006.

In Croatia, TOTAL owns an interest in Adria LNG, a company in charge of studying the construction of an LNG re-gasification terminal on Krk island, on the northern Adriatic coast. In December 2009, TOTAL’s interest increased from 25.58% to 27.36% pursuant to the withdrawal of a partner from the project. This terminal is expected to have an initial re-gasification

capacity of 353 Bcf/y (10 Bm3/y), which could be subsequently increased to 494 Bcf/y (14 Bm3/y).

In addition, TOTAL holds a 30% interest in Gaztransport & Technigaz (GTT), which focuses mainly on the design and engineering of membrane cryogenic tanks for LNG tankers. At year-end 2009, 225 active LNG tankers were equipped with membrane tanks built under GTT licenses out of a world tonnage estimated at 344 LNG tankers.(1)

North America

In Mexico, the Altamira re-gasification terminal, in which TOTAL holds a 25% interest, has been operating since the summer of 2006. This terminal, located on the east coast of Mexico, has a re-gasification capacity of 236 Bcf/y (6.7 Bm3/y). This capacity has been entirely reserved by Gas del Litoral, in which TOTAL has a 25% interest. The terminal received forty cargos in 2009, compared to forty-two in 2008 and thirty-three in 2007. In November 2009, Altamira received its first Q-Flex vessel from Qatar.

In the United States, the Sabine Pass terminal in Louisiana was inaugurated in April 2008. TOTAL has reserved re-gasification capacity of approximately 10 Bm3/y (1 Bcf/d) at this terminal for a renewable 20-year period starting in April 2009, concurrent with the delivery of the Group’s first LNG cargo. As part of this agreement, TOTAL plans to supply the Sabine Pass terminal though its LNG purchase contracts associated with its various production projects, notably in the Middle East, Norway and Western Africa.

Asia

In India, the Hazira re-gasification terminal (TOTAL 26%), located on the west coast in the Gujarat state, was inaugurated in April 2005 with an initial re-gasification capacity of approximately 120 Bcf/y (3.4 Bm3/y). Its capacity reached 177 Bcf/y (5 Bm3/y) after de-bottlenecking operations conducted in 2008. Hazira is a merchant terminal with operations that include LNG re-gasification and natural gas marketing. TOTAL has agreed to provide up to 26% of the LNG for the Hazira terminal. Due to market conditions in 2009, Hazira was operated on the basis of short-term contracts, both for the sale of gas on the Indian market and the purchase of LNG from international markets. Twenty-seven cargos were delivered in 2009, compared to thirty in 2008 and twenty-eight in 2007.

In China, TOTAL signed in December 2008 an LNG sale agreement with CNOOC (China National Offshore Oil Company). As part of this agreement, TOTAL is expected to supply CNOOC with up to 1 Mt/y of LNG starting in 2010. The gas supplied will come from the Group’s global LNG resources.


 

 

1. Gaztransport & Technigaz data.

 

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Middle East

In Qatar, TOTAL signed purchase agreements in July 2006 for up to 5.2 Mt/y of LNG from the second train of Qatargas 2 over a 25-year period. This LNG is expected to be marketed principally in France, the United Kingdom and North America. The Group’s acquisition of a 16.7% interest in the second train of Qatargas 2 was concluded in December 2006. LNG production from this train started in September 2009.

In Yemen, TOTAL signed in July 2005 an agreement with Yemen LNG Ltd (TOTAL, 39.62%) to purchase 2 Mt/y of LNG over a 20-year period, beginning in 2009, to be delivered to the United States. LNG production from the first train of Yemen LNG started in October 2009. Construction of the second train is nearing completion for a start-up by the summer of 2010.

Africa

In Angola, TOTAL is involved in the construction of the Angola LNG plant (13.6%), comprised of a 5.2 Mt/y train, which is expected to start up in 2012. As part of this project, TOTAL signed a re-gasified natural gas purchase agreement in December 2007 for 13.6% of the quantities to be delivered to the Gulf LNG Clean Energy terminal in Mississippi in the United States.

In Nigeria, as part of the expansions of the Nigeria LNG (NLNG) plant, in which the Group holds a 15% interest, TOTAL signed an LNG purchase agreement for an initial 0.23 Mt/y over a 20-year period, to which an additional 0.9 Mt/y was added when the sixth train came onstream.

As part of the project to build an additional LNG train (train 7) with a capacity of approximately 8.5 Mt/y, TOTAL signed a purchase agreement in February 2007 for 1.375 Mt/y of LNG over a 20-year period. This agreement is subject to NLNG’s final investment decision for this new train.

TOTAL also acquired a 17% interest in the Brass LNG project in July 2006. This liquefaction project calls for the construction of two liquefaction trains, each with a capacity of 5 Mt/y. In conjunction with this acquisition, TOTAL signed a preliminary agreement with Brass LNG Ltd setting forth the principal terms of an agreement to purchase approximately one-sixth of the plant’s capacity over a 20-year period. This LNG would be delivered primarily to North America and Western Europe. The purchase agreement is subject to final investment decision for the Brass LNG project.

Trading

TOTAL, through its subsidiary Total Gas & Power Ltd, has conducted trading activities primarily for spot LNG between 2001 and 2006. In 2007, this subsidiary began

receiving cargos under its long-term supply contracts with Nigeria and Norway. Since 2009, the new purchase agreements for LNG from Qatargas 2 and Yemen LNG have allowed a substantial development of the Group’s operations in LNG marketing. This mix of spot and long term LNG purchases allows TOTAL to supply its main customers around the world with gas, while retaining a certain degree of flexibility to react to market opportunities or unexpected fluctuations in supply and demand.

In 2009, Total Gas & Power Ltd purchased twenty-three contractual cargos and twelve spot cargos from Norway, Nigeria, Equatorial Guinea, Indonesia, Trinidad & Tobago, Qatar and Yemen.

Liquified Petroleum Gas

In 2009, TOTAL traded and sold nearly 4.4 Mt of LPG (butane and propane) worldwide (compared to 5.2 Mt in 2008 and 2007), including 0.9 Mt in the Middle East and Asia, approximately 0.6 Mt in Europe on small coastal trading vessels and approximately 2.8 Mt on large vessels in the Atlantic and Mediterranean regions. Approximately 40% of these quantities come from fields or refineries operated by the Group. LPG trading involved the use of four time-charters and approximately sixty spot charters.

Since January 2008, SALPG (South Asian LPG Limited, a company in which TOTAL holds a 50% interest, in partnership with Hindustan Petroleum Company Ltd) has operated the underground import and storage LPG terminal located in Visakhapatnam, on the east coast of India in the state of Andhra Pradesh. This terminal, the first of its kind in India, has a storage capacity of 60 kt. In 2009, the cavern received 606 kt of LPG, compared to 535 kt in 2008.

Electricity and Cogeneration

As a refiner and petrochemical producer, TOTAL has interests in several cogeneration facilities. Cogeneration is a process whereby the steam produced to turn turbines to generate electricity is then captured and used for industrial purposes. TOTAL also participates in another type of cogeneration, which combines power generation with water desalination and gas-fired electricity generation, as part of its strategy of pursuing opportunities throughout the gas value chain. As part of its diversification strategy for new energies, the Group is also involved in projects to generate electricity from solar or nuclear sources.

In Abu Dhabi, the Taweelah A1 cogeneration plant, in operation since May 2003, combines power generation and water desalination. It is owned and operated by Gulf Total Tractebel Power Cy, in which TOTAL has a 20% interest. The Taweelah A1 plant currently has a net


 

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capacity of 1,600 MW (following the start-up of the 250 MW expansion in July 2009) and water desalination capacity of 385,000 m3 per day.

In addition, TOTAL, in partnership with the Spanish company Abengoa Solar, participated in a bidding process launched by Abu Dhabi Future Energy Company (ADFEC) in early 2008 as part of the MASDAR initiative to support new energies. This call for tenders concerns the construction of a 110 MW concentrated solar power plant.

TOTAL, together with GDF Suez, EDF and Areva, acknowledged ENEC’s (Emirates Nuclear Energy Corporation) decision, announced in December 2009, to deny the bid they made as part of the call for tenders launched for the supply of nuclear power plants. The Group pursues its objective to eventually become a recognized nuclear operator.

In France, TOTAL has an 8.33% interest in the project to build and operate the second French EPR in Penly, in the northwest of the country, in partnership with GDF Suez and EDF.

In Thailand, TOTAL owns 28% of Eastern Power and Electric Company Ltd (EPEC), which has operated the combined-cycle gas-fired power plant of Bang Bo, with a capacity of 350 MW, since March 2003.

In Nigeria, TOTAL and its partner, the state-owned NNPC (Nigerian National Petroleum Corporation), own interests in two projects to build gas-fired power plants that are part of the government’s objectives to develop power generation and increase the share of natural gas production for domestic use:

 

 

The Afam VI project, part of the SPDC (Shell Petroleum Development Company) joint venture in which TOTAL holds a 10% interest, which concerns the development of a 630 MW combined-cycle power plant with a start-up of commercial operations scheduled for the second half of 2010.

 

 

The development of a new 400 MW combined-cycle power plant near the city of Obite (Niger Delta) in connection with the OML 58 gas project, part of the joint venture between NNPC and TOTAL (40%, operator). Commissioning is scheduled in early 2013. The combined-cycle power plant will be connected to the existing power grid through a 108 km high-voltage transmission line.

Renewable Energy

As part of its strategy to develop energy resources to complement oil and gas, the Gas & Power division continued in 2009 to strengthen its positions in

renewable energies, with a particular focus on solar-photovoltaic power where the Group has been present since 1983.

Solar-photovoltaic power

In the photovoltaic sector based on crystalline silicon technology, TOTAL is involved in the development of the photovoltaic cells production business as well as in the production and marketing of solar modules and systems. The Group, through several partnerships, is pursuing its R&D program for this technology and has also committed to developing new innovative solar technologies. Furthermore, TOTAL conducts projects to display solar application solutions at some Group sites, both for educational purposes in France and as part of decentralized rural electrification projects in other countries.

TOTAL is a shareholder in Photovoltech, a company specialized in manufacturing high-efficiency photovoltaic cells. The Group now holds 50% of Photovoltech’s share capital, alongside GDF Suez, pursuant to the buyout in September 2009 by both companies of the 4.4% interest held by IMEC (Interuniversity MicroElectronics Centre). In 2009, Photovoltech pursued its project to increase the overall production capacity of its Tirlemont plant (Tienen, Belgium) from 80 Mwp/y in 2009 to 155 MWp/y in late 2010. In a challenging market and given the sharp decrease in the price of cells, Photovoltech’s 2009 sales were 80 million, compared to 106 million in 2008 and 73 million in 2007.

TOTAL also plans to build an industrial photovoltaic plant in the Carling region in eastern France in partnership with GDF Suez.

TOTAL holds a 50% interest in Tenesol, in partnership with EDF. Tenesol, whose headquarters are located in Lyon (France), designs, manufactures, markets and operates solar-photovoltaic power systems. Its principal markets are for network connections in France, in the French Overseas Territories and in Europe. Tenesol is also active in certain professional applications (telecommunications, oil & gas sites, etc.). Tenesol owns two solar panel manufacturing plants: Tenesol Manufacturing in South Africa, with production capacity of 60 MWp/y; and Tenesol Technologies in the Toulouse region of France, with production capacity of 50 MWp/y. In 2009, despite strong pressure on the price of modules, Tenesol’s consolidated sales increased by nearly 30% to 249 million (compared to nearly 193 million in 2008 and 133 million in 2007), representing a marketed production of 85 MWp.

Regarding R&D, TOTAL, GDF Suez and Photovoltech confirmed their cooperation with IMEC by signing an agreement in September 2009 as part of the IIAP (IMEC Industrial Affiliation Program), a multi-partner program


 

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on crystalline silicon solar cells. The objective of the IIAP is to sharply reduce the use of silicon while increasing the efficiency of cells in order to substantially lower the cost for solar energy.

In September 2009, the Group also partnered with LPICM (Laboratoire de Physique des Interfaces et des Couches Minces), a research unit comprised of the French National Center for Scientific Research (CNRS) and France’s Ecole Polytechnique engineering school to set up a joint research team — Nano PV — in the Saclay area near Paris focusing on thin-film technologies and silicon-based nano-materials. TOTAL committed 8 million for the first 4-year phase.

In December 2008, TOTAL acquired an interest in a U.S. start-up company, Konarka, which specializes in the development of organic solar technologies. In 2009, Konarka implemented new research projects in cooperation with the Gas & Power division and other Group Chemicals subsidiaries to develop solar film on a large scale. The Group is confident in the potential of this promising technology and decided to increase its interest in Konarka to nearly 25% of the share capital in early 2010.

Total Énergie Solaire, the subsidiary created in July 2008 as part of the Group’s contribution to the “Grenelle de l’environnement”, a program launched by the French government, started operating in 2009 with the installation of solar panels at two Group’s sites in Pau and Lacq (France). A total of five educational projects are expected to be completed in late 2010 to display different photovoltaic applications at the Group’s sites, with an overall installed capacity of between 2 MWp and 3 MWp and an investment of 15 million.

Furthermore, TOTAL conducts decentralized rural electrification operations by responding to calls for tenders from authorities in several countries, notably in South Africa where KES (Kwazulu Energy Services Company), in which TOTAL holds a 35% interest, intends to equip 30,000 isolated homes. New projects are under study related to Africa, Asia and the Middle East.

In addition, Temasol, a wholly-owned subsidiary of Tenesol since the transfer in 2008 of the respective shares of Total Maroc and EDF EDEV, is involved in decentralized rural electrification projects in Morocco. Since its creation in 2001, approximately 25,500 households have been equipped and are now operated by Temasol.

Solar power storage

In November 2009, TOTAL announced the signature of a research agreement with the Massachussetts Institute of Technology (MIT) to develop new stationary batteries

that are designed to enable the storage of solar power. This $4 million agreement over five years is part of the MIT Energy Initiative, which TOTAL joined as a member in November 2008.

Wind power

TOTAL operates a 12 MW wind farm in Mardyck (near its Flanders refinery, located in Dunkirk, France).

Marine energy

In marine energy, TOTAL acquired a 10% interest in a pilot project located offshore Santona, on the northern coast of Spain, in June 2005. The construction of a first buoy, with a capacity of 40 kW, was completed and the buoy was launched in September 2008. This project is intended to assess the technical and economic potential of this technology.

With respect to tidal current energy, TOTAL held as of the end of 2007 a 24.9% interest in Scotrenewables Marine Power, located in the Orkney Islands in Scotland. Agreements bringing new partners into the company’s share capital were signed in January 2008. As a result, the Group’s participation was diluted to 16%. Scotrenewables Marine Power is developing tidal current energy c