Exploration & Production Strategy

Transcription

1 Exploration & Production Strategy Yves-Louis Darricarrère President - Total Exploration & Production

2 Exploration & Production Strategy : strong business model to deliver profitable growth Renew reserves through exploration, partnerships and targeted asset deals Bring into production our large portfolio of projects with strict t financial i discipline i and optimized development Maximize production from existing fields : Limit natural decline thanks to active field management Use technology to improve recovery rates Capitalize on our technological leadership and project management skills 1 Investor Relations Field Trip Pau - Angola - 3C3168

3 A new organization to efficiently implement E&P strategy and respond to the current challenges of the industry Current organization Exploration & Production Support divisions Geosciences Development & Operation Techniques Strategy, Business Development, Engineering, R&D Geographical divisions New organization Exploration & Production Support divisions Exploration Development Production Strategy, Business Development, R&D Concentrate on exploration Focus on development : from appraisal to first production Expertise in operations Elaborate strategy and concentrate on business development and growth Geographical divisions 2 Investor Relations Field Trip Pau - Angola - 3C3168

4 Consolidate our technology leadership Increase R&D effort Upstream technology center in France (Pau) including R&D, technical and geosciences support for exploration drilling and production worldwide, with close to 2,000 people 5 regional research centers : USA, Canada, UK, Norway, Qatar Dalia polymer injection skid Implement R&D in our projects Polymer injection on Dalia (world first in deep offshore) Hydrocarbons sub-sea separation (Pazflor Angola) Sub-sea heat tracing on Islay Strengthen technological leadership Exploration : seismic data imaging and analysis (offshore, onshore and transition areas) Reservoirs : develop team expertise and in-house modeling tools Subsea development of satellite fields and long distance tie backs : electrical systems ; subsea separation, compression and water treatment ; multiphase transportation Arctic condition development : «winterization», icebergs, sensitive ecosystem, arctic LNG Heavy oil : develop expertise in mining Complex gas : HP/HT, acid gas, tight reservoirs, shale gas Pazflor Gas/Liquid separator Prepare for the longer term Environment : CCS pilot in France Energy efficiency Unconventional : R&D project for Oil Shale development in Colorado 3 Investor Relations Field Trip Pau - Angola - 3C3168

5 Ability to manage large projects Priority to safety and environment Yemen LNG Rigorous process to define technical design of projects Keep development on schedule and on budget Standardizing where feasible and minimizing change orders Tendering process Stimulate competition taking into account local constraint Akpo Start-up and ramp-up optimization Early integration of commissioning phase in global planning Early involvement of production operating team 4 Investor Relations Field Trip Pau - Angola - 3C3168

6 Access to new resources through exploration and business development Increasing exploration risked potential Access to resources* at a competitive cost Discovery cost Acquisition cost Bboe 4 $/boe 6 Under study 2 3 Ready to drill Jun Fort Hills GLNG Uganda** Barnett Shale (producing) Increasing exploration risked potential thanks to new permits and reassessments Basis to increase exploration activity Since Bboe of resources per year through exploration process >1 Bboe of resources per year through asset deals 1.4 Bboe of resources per year on average needed to support production growth * proved and probable reserves plus contingent resources (potential average recoverable reserves from known accumulations-society of Petroleum Engineers-03/07) ** pending approval 5 Investor Relations Field Trip Pau - Angola - 3C3168

7 More active asset management to optimize portfolio Upstream portfolio changes announced since the beginning of 2010 Fort Hills Joslyn* Laggan/Tormore Valhall/Hod OTG Barnett Shale JV Virgo/Matterhorn Acquisition or potential acquisition Sale or potential sale, transfer Farmed into new acreage Côte d Ivoire BM-S-54 Gabon Block 31 JDZ Nigeria- Sao Tome and Principe Uganda Block 72 Sebuku GLNG Arafura Announced E&P acquisitions of 6 B$ Announced E&P asset sales of 2 B$** * partial sale of Joslyn project ** excluding potential sales of Joslyn 6 Investor Relations Field Trip Pau - Angola - 3C3168

8 Develop partnerships with host countries and NOCs Main long term partnerships Privileged relationship with host countries Canada Inpex (Joslyn) Sinopec (Northern Lights) Russia Gazprom (Shtokman) Novatek (Termokarstovoye) Satisfy energy demand together with host countries Spain IPIC (CEPSA) Iraq Petrochina (Halfaya) Petronas (Halfaya) China Petrochina (Sulige, WEPEC) Sinochem (WEPEC, marketing) Local hiring Algeria Sonatrach (E&P, Arzew project) Nigeria CNOOC (Akpo) Petrobras (Akpo) ONGC (exploration) Uganda (pending) CNOOC (Lake Albert) Saudi Arabia Saudi Aramco (Jubail) Qatar QP (QG1, QG2, Qapco, Qatofin) Abu Dhabi ADNOC (ADCO, ADMA, ) ADWEA (Taweelah) Masdar (Shams) Local content : contribute to development of local industry Local communities : education, health, economic development Upstream Refining & Marketing Petrochemicals Angola Sonangol (Block 32, ALNG) Australia Petronas (GLNG) Inpex (Ichthys) Safety culture Minimize i i environmental footprint t Acceptability is key for sustainability of partnerships 7 Investor Relations Field Trip Pau - Angola - 3C3168

9 On track to deliver future production growth (e) main start-ups Trinidad Block 2C Islay OML 58 Angola Bongkot Kashagan Pazflor Usan Halfaya Ofon 2 upgrade LNG South Ph.1 Sulige CLOV Laggan/ Tormore GLNG Production* Technical costs** Mboe/d +2% per year on average 24 (in $/boe) Shell Chevron Exxon 16 BP Total (e) 11(e) 12(e) 14(e) month 2010 production growth : +5.6% year on year 2011 production to remain stable depending on oil price, OPEC reduction and recovery in Nigeria Gas share to increase from 44% in 9M10 to 46% in 2014(e) Lowest technical costs among the majors ~800 kboe/d of production from (e) start-ups * production including equity affiliates, based on ASC 932 ; based on Brent oil price environment of 80 $/b ** operating expenses + exploration expenses + DD&A for production from consolidated subsidiaries based on ASC 932 ; estimates based on public data for other majors 8 Investor Relations Field Trip Pau - Angola - 3C3168

10 Maintaining capital discipline Upstream Capex by status Expected profitability for major Upstream start-ups To be sanctioned Committed Producing 35% IRR $/b 11(e) 12(e) 15(e) $/b 100 $/b Hurdle rate range depending on visibility, risks and upsides 2 Enrichment* Launching new projects in line with our investment criteria Balancing long and short plateau projects in the portfolio Leveraging the portfolio to the oil price * cumulative net cash flow over life of project, including investment phase, divided by development Capex 9 Investor Relations Field Trip Pau - Angola - 3C3168

11 Sustain production in mature areas West of Shetland Snøhvit Haltenbanken kboe/d 1, SEC Productions : UK, Norway and Netherlands** Elgin- Franklin TEPUK TEPN TEPNL Alwyn < 50 kboe/d* * 2009 production, net to Total ** including Groningen, public sources Northern North Sea Ekofisk Netherlands kboe/d* 10 Investor Relations Field Trip Pau - Angola - 3C kboe/d (e) Grant Alwyn Area Nuggets Forvie North 140 Jura Islay Islay Jura Forvie Nuggets Grant Ellon Statfjord Dunbar Statfjord Infills Alwyn North Total Shell Exxon BP Chevron Exploration

12 Targets for profitable growth Strengthen position on growing segments Deep offshore LNG Heavy oil Unconventional gas (tight gas, shale gas, CBM) and in countries with large resources potential Canada, Venezuela Middle East : Qatar, UAE, Iraq Nigeria, Angola, Gulf of Mexico Australia Russia, Kazakhstan Canada Aiming at balancing and mitigating risks US Venezuela United Kingdom Norway Nigeria Congo Angola Kazakhstan UAE Qatar Yemen Proved and probable reserves* 0.5 Bboe : 13 countries < 0.5 Bboe : 19 countries Geopolitics : geographical spread, OECD vs non-oecd, Technological : relative weight of conventional, deep offshore, LNG, heavy oil, unconventional gas Economic : balancing short plateau projects with higher IRR and long plateau projects with higher enrichment Australia Positioning on growth segments and balancing risks * limited to proved and probable reserves at year-end 2009 covered by E&P contracts on fields that have been drilled and for which technical studies have demonstrated economic development in a 60$/b Brent environment, also includes projects to be developed by mining 11 Investor Relations Field Trip Pau - Angola - 3C3168

13 Deep offshore portfolio Deep-offshore production* Mboe/d 600,0 500,0 Laggan/ 400,0 Tormore 300, ,0 Akpo Bonga 100,0 0, (e) 2020(e) Tahiti Chinook Usan Egina Moho Bilondo Dalia Girassol/Jasmim/ Rosa BBLT/Tombua L./ Kuito Pazflor CLOV Block 32 Projects in production Projects under development Projects under study Deep offshore acreage * production including equity affiliates, based on ASC 932 ; based on Brent oil price environment of 80 $/b through 2020(e) 12 Investor Relations Field Trip Pau - Angola - 3C3168

14 LNG portfolio LNG production* Norway 4.2 Mt/y, 18.4% Russia Shtokman 7.5 Mt/y, 25% Mboe/d 600,0 500,0 400,0 300, ,0 100,0 Nigeria NLNG T1-T Mt/y, 15% Angola 5.2 Mt/y, 13.6% Nigeria Brass LNG 10 Mt/y, 17% Nigeria NLNG T7 8.5 Mt/y, 15% Qatar QG1 9.9 Mt/y, 10% QG2 T5 7.8 Mt/y, 16.7% Abu Dhabi 5.6 Mt/y, 5% Oman Oman LNG 7.2 Mt/y, 5.54% Qalhat tlng 3.7 Mt/y, 2.04% Yemen 6.7 Mt/y, 39.62% 0, (e) 2020(e) Indonesia Bontang 22.2 Mt/y, ~40% feed Australia GLNG 7.2 Mt/y, 20% In operation Under development Under study Australia Ichthys 8.4 Mt/y, 24% * production including equity affiliates, based on ASC 932 ; based on Brent oil price environment of 80 $/b through 2020(e) 13 Investor Relations Field Trip Pau - Angola - 3C3168

15 Heavy oil portfolio Heavy oil portfolio Surmont Ph.2 (50%) Reserves* es* : ~1.5 Bb Capacity Ph.1+2 : 110 kb/d Start-up Ph.2 : 2015(e) Fort Hills (20%) Reserves* : ~3.4 Bb Capacity Ph.1 : 160 kb/d Start-up Ph.1 : (e) Joslyn (75%, operator) Reserves* : ~2.0 Bb Capacity : 200 kb/d in two phases Start-up Ph.1 : 2017(e) Potential partial sale Fort Hills (20%) Joslyn (75%, op.) Surmont Ph. 1 (50%) Surmont Ph. 2 (50%) Upgrader Northern Lights (50%, op.) Mboe/d 600,0 500,0 400,0 300, ,0 100,00 0,0 Heavy Oil production** (e) 2020(e) Long-term target : ~10% of Total s production Projects in production Projects under development Projects under study Heavy oil acreage PetroCedeño Bemolanga (ex-sincor), (60%, op.) 30.32% 32% Diversifying exposure in Canada and accelerating production growth * initial proved and probable reserves at 100%, Total estimates ** production including equity affiliates, based on ASC 932 ; based on Brent oil price environment of 80 $/b through 2020(e) ; neither Joslyn sale nor Fort Hills acquisitions included in the production profile 14 Investor Relations Field Trip Pau - Angola - 3C3168

16 Unconventional oil and gas portfolio Unconventional gas production* / ** USA AMSO France Montelimar Denmark 2 blocks Mboe/d 600,0 500,0 400,0 300, ,0 100,0 0, (e) 2020(e) USA JV Barnett Shale Venezuela Yucal Placer Algeria Timimoun Algeria Ahnet China Sulige Argentina Neuquen Australia GLNG Argentina Neuquen Tight gas - in production Shale gas - in production CBM - project Tight gas - under study Shale gas explo licenses Oil Shale R&D Progressively expanding portfolio * production including equity affiliates, based on ASC 932 ; based on Brent oil price environment of 80 $/b through 2020(e) ** Coal Seam Gas supply to GLNG included in the LNG production profile 15 Investor Relations Field Trip Pau - Angola - 3C3168

17 Exploration & Production target : profitable growth Production growth : +2% per year on average from 2009 to 2014(e) Maintain reserves life : 2P > 20 years Technical cost : remain Best in class Managing multiple and more complex challenges Sustainable development : Safety, Environment, Local communities Industrials Operational performance, Cost control, Project management, Human resources, Technology Economical and Commercial - Geopolitics, Market, Contractual framework, Tax regime 16 Investor Relations Field Trip Pau - Angola - 3C3168

18 Disclaimer This document does not constitute the annual financial report that will be published separately in conformance with Article L III of the Code monétaire et financier and will be available on the Group s Web site or by request from company s headquarters. This presentation and the associated slides and discussion may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the financial condition, results of operations, business, strategy and plans of TOTAL, as well as global energy demand and production, expected future energy mix, decline in mature fields and expected future production, global oil and gas reserves, internal carbon price, anticipated competitive advantage through technology and capability, oil sand strategy (including the anticipated competitive nature of any resource basis renewal, the opportunity to leverage technological experience and value creation through integration with the Downstream segment), e the possibility of future uueproduction o improvements e through technological oogca developments, e e and the expected ed start-up sa date, production o potential and timing of TOTAL projects. pojecs Such statements are based on a number of assumptions that could ultimately prove inaccurate, and are subject to a number of risk factors, including currency fluctuations, the price of petroleum products, the ability to realize cost reductions and operating efficiencies without unduly disrupting business operations, environmental regulatory considerations, the competitiveness of alternate-energy sources, environmental and physical risks and general economic and business conditions. TOTAL does not assume any obligation to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise. Further information on factors which could affect the company s financial results is provided in documents filed by the Group with the French Autorité des Marchés Financiers and the U.S. Securities and Exchange Commission ( SEC ). Business segment information is presented in accordance with the Group internal reporting system used by the chief operating decision maker to measure performance and allocate resources internally. Due to their particular nature or significance, certain transactions qualified as special items are excluded from the business segment figures. In general, special items relate to transactions that are significant, infrequent or unusual. However, in certain instances, certain transactions such as restructuring costs or assets disposals, which are not considered to be representative of normal course of business, may be qualified as special items although they may have occurred within prior years or are likely to recur within following years. The adjusted results of the Downstream and Chemical segments are also presented according to the replacement cost method. This method is used in order to facilitate the comparability of the segments results with those of the Group s competitors, and to help illustrate the operating performance of these segments excluding the impact of oil price changes on the replacement of inventories. In the replacement cost method, which approximates the LIFO (Last-In, First-Out) method, the variation of inventory values in the income statement is, depending on the nature of the inventory, determined by using either the month-end prices differential between one period and another or the average price of the period (rather than the historical value). The inventory valuation effect is the difference between the results according to FIFO (First-In, First-Out) and replacement cost. In this framework, performance measures such as adjusted operating income, adjusted net operating income and adjusted net income are defined as incomes using replacement cost, adjusted for special items and excluding TOTAL s equity share of adjustments related to Sanofi-Aventis. They are meant to facilitate the analysis of the financial performance and the comparison of income between periods. Dollar amounts presented herein represent euro amounts converted at the average euro-dollar exchange rate for the applicable period and are not the result of financial statements prepared in dollars. This document also includes certain socially responsible investment (SRI) issues identified by TOTAL as having the potential to affect TOTAL s results. Other SRI issues, not included in this document, may also have an impact on TOTAL s results. Cautionary Note to U.S. Investors The SEC permits oil and gas companies, in their filings with the SEC, to separately disclose proved, probable and possible reserves that a company has determined in accordance with SEC rules. We may use certain terms in this presentation, such as reserve potential and resources, that the SEC s guidelines strictly prohibit us from including in filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 20-F, File N , available from us at 2, place Jean Millier La Défense Paris La Défense Cedex, France, or at our Web site: You can also obtain this form from the SEC by calling SEC-0330 or on the SEC s Web site: 17 Investor Relations Field Trip Pau - Angola - 3C3168