Brunei s Energy Future: a Global Perspective Yves Grosjean General Manager Total E&P Borneo National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
DISCLAIMER and COPYRIGHT RESERVATION The TOTAL GROUP is defined as TOTAL S.A. and its affiliates and shall include the party making the presentation. Disclaimer This presentation may include 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 GROUP that are subject to risk factors and uncertainties caused by changes in, without limitation, technological development and innovation, supply sources, legal framework, market conditions, political or economic events. TOTAL GROUP 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 TOTAL GROUP with the French Autorité des Marchés Financiers and the US Securities and Exchange Commission. Accordingly, no reliance may be placed on the accuracy or correctness of any such statements. Copyright All rights are reserved and all material in this presentation may not be reproduced without the express written permission of the TOTAL GROUP. 2 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
Global Energy demand 2030 forecast 3 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
Global energy demand growth Population GDP (purchasing power parity) Energy demand Billions 10 Average growth per year 2005-2030(e) 1 % Trillions $ 2005 200 Mboe/d 350 1.2% 8 1.5 % 150 3.6 % 250 1.8 % 6 100 3.3 % 1.8 % 4 2 1.1 % 1.8 % 3.7% 0.5 % 0.3 % 3% 50 5.3% 2.0% 150 50 2.6% 1.4% 0.4 % 1980 2005 2030(e) 1980 2005 2030(e) 1980 2005 2030(e) OECD Non-OECD Sources : Total estimates Energy demand growth driven by demography and economic development in Non-OECD countries 4 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
Fossil energies to represent 75% of energy supply in 2030 400 World energy supply 2005 2030 Mboe/d* 300 Solar, Wind, other renewable energies Hydro Biomass excluding biofuels Nuclear 200 Coal 81% Fossil: 34% Oil 21% Gas 100 Gas Biofuels Oil 75% Fossil: 30% Oil 22% Gas 0 2005 2010 2015 2020 2025 2030 Efficient CO 2 emissions management and diversification of energy supply are key issues Source: Total estimates. * Million barrels of oil equivalent per day. 5 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
Oil and gas demand driven respectively by transportation and power generation Oil demand by sector Gas demand by sector Mb/d 100 +0.7%/y Bcf/d 400 +1.6%/y Industrial +34% 50 Transportation +23% 200 Residential +10% Petrochemicals +47% Industrial -3% Power generation +65% 09(e) 15(e) 30(e) Residential -1% Power generation -33% 09(e) 15(e) 30(e) Oil will remain the energy of choice for Transportation Gas preferred to Oil or Nuclear for Power Generation Total estimates 6 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
Global Energy supply 52% Oil & Gas in 2030 7 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
Significant hydrocarbon resources yet to be produced Oil resources Gas resources 100 years 70 years 50 years 33 years of production at current pace ~3,000 Bboe Unconventional resources oil shale, shale gas, coal bed methane, tight gas Heavy oil New discoveries and increased recovery rate Identified resources >2,000 Bboe 125 years 80 years 55 years of production at current pace Already produced With advanced technology and large scale investments hydrocarbons will remain the dominant fuel source for the next decades Total estimates 8 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
2010 Breakeven Price (10% IRR) per class of Oil Resource: Higher revenue to the producer unlocks additional Oil $/bbl Oil shales 100 80 60 Deep water Ultra deep water Extra Heavy Extra Heavy oil Oil Arctic 40 20 Other Conventional OPEC Middle East Enhanced Recovery Billions of barrels 1000 2000 3000 Sources: IEA, CERA, Total 9 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
Renewable energies will grow but not enough Mboe/d Estimates 58 9 Annual growth 2005-2030 Solar, wind, etc + 8.3 % 24 31 1 5 41 3 7 2 10 3 Hydroelectric power Biofuels (incl BtL) + 2.5 % + 7.6 % 4 19 24 28 36 Biomass (incl. forest use in developing countries) + 1.7 % 1990 2005 2015 2030 Source: IEA World Energy Outlook, Alternative Policy Scenario 10 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
Oil products: 82.5% Taxes 17.5% Costs what more can we do to help the development of alternative energy? (in the EU) 11 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
Climate Change: the limiting factor how to reduce GHG emissions? 12 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
Limiting greenhouse gas emissions is needed for sustainable growth according to scientists GHG* emissions Bt/y International Energy Agency climate scenarios CCS*** in power generation Renewables Nuclear CCS in industry Biofuels Electricity end-use efficiency End-use efficiency source : IEA 2008 All technologies needed to reach CO 2 concentration targets High costs to implement required GHG reductions All countries must be involved, including non-oecd countries In any case, end-use efficiency is by far the greatest contributor 13 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
TOTAL reduces flaring : no flaring on new projects and flaring reduction on existing fields Flaring reduction technologies : New Flash-Gas Compressor at OPP Valorization of associated gas through LNG Increase reinjection Associated gas treatment without flaring : On new projects Currently producing : Girassol, Dalia and Akpo Ongoing projects : Pazflor, Usan, Egina On existing fields Abu Al-Bu Koosh (Abu Dhabi) Nkossa (Congo) Amenam (Nigeria) Maharaja Lela (Brunei) Flaring reduction target : -50% in 2014 vs 2005 14 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
CO 2 Capture and geological Storage: a Reference Project by Total opening the way to 7000 large industrial sites worldwide (IPCC) CO 2 injection CO 2 transportation CO 2 capture Gas production Commercial gas Compression CO 2 injection CO 2 storage 9 8 4500 m CO 2 Transportation 7 CO 2 purification / dehydration Utilities Boiler oxycombustion Steam 5 Natural gas 4 3 gas treatment plant 2 10 Rousse reservoir The Lacq pilot is... 1/10th of future facilities 120 k t CO 2 injected in 2 yrs (2010 2011) 5 yrs storage monitoring 6015M covered by Total only The CO2 pilot at Lacq N. AIMARD March 2009 Natural gas Compression inlet Oxygen Production Unit Lacq gas production 15 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club CO 2 6 Lacq deep gas reservoir 1 4000 m
TOTAL Energy Efficiency Program Targets for optimization : -1% per year for Refining and -2% per year for E&P and Petrochemicals Operational optimization including monitoring, reliability and maintenance Ex : furnaces and boilers from 0.5% to 4% of site Energy Efficiency Index gain More energy efficient new projects Ex : planned heat recovery and Packinox exchanger from 0.8% to 3% of site Energy Efficiency Index gain Sharing best practices and technologies R&D partnerships : Capital investment 100 M for a 5-year program to promote efficient technologies for small and medium enterprises 16 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
Developing low-co 2 energies to meet the climate challenge Global energy mix by 2030(e)* Low-CO 2 energies : main axes selected by Total Mboe/d 350 250 150 50 2005 2030(e) Solar, wind, other renewables Hydro Biomass, excluding biofuels Biofuels Nuclear Coal Gas Oil 75% fossil fuel 30% oil 22% gas Solar : integration and advanced R&D Strengthening industrial and downstream integration Photovoltec, Tenesol, Abu Dhabi solar project Technological differentiation (JVs and partnerships for R&D) IMEC (crystaline PV), LPICM (thin films), Konarka (organic PV), MIT (batteries), AE Polysilicon (polysilicon for PV) Biomass : R&D for advanced biofuels and green chemicals R&D on thermochemical processes BioTfuel pilot (gasifying biomass) R&D on biotechnological processes Futurol pilot (lignocellulose) Gevo (sugars g isobutanol) Academic partners (CNRS, ) 8.33% interest in Penly project Nuclear : acquiring expertise Developing projects in countries where the Group has a presence Capitalizing on our industrial assets, R&D and partnerships * Total estimates 17 -June Brunei s 2010 Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
Brunei s Energy Future: a Global Perspective High stakes: meeting Energy Demand and Protecting the Climate Oil & Gas likely to account for >50% of world primary energy consumption by 2030 frontier exploration is critical to make new resources available (HPHT, Deep Water) Develop technical solutions like CCS to limit related emissions Improve efficiency and Diversify the Energy mix Necessary development of alternative energy options Nuclear, Biomass, Photovoltaics and Other Renewables to secure the Future The best alternative of all = End-Use Efficiency combined cycle, co-generation, High Challenges Mandatory investments upfront (efficiency or exploration) high reward for Brunei Proficient workforce will fuel the growth in other sectors Mandatory technological innovations available via partnerships Not to forget: Deforestation is the second most important source of GHG emissions (after Coal) 18 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
Terima kasih National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
Energy Supply and Climate Change the TOTAL commitment 20 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
Anticipating the future energy demand Increasing leverage to R&D Environmental performance : 10% Air, water, biodiversity CO 2 capture and storage Products : 35% Competitiveness New markets Environmental impact Energy efficiency for customers 7.1 B$ 2009-2014(e) Resources : 35% Exploration efficiency EOR Oil sands Photovoltaic, biomass Innovative technologies & process optimization : 20% Asset efficiency and reliability Conversion, X-to-Ys pilots R&D investment in 2009 : 0.9 B$ Supporting growth potential in oil and gas through new technologies Improving industrial and product efficiency and reducing environmental impact Accelerating the development of core competencies in new energies 21 -June Brunei s 2010Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
Renewables Pros and Cons Rate of growth pa. 2010-2030 (%) Pros Cons Limited potential Hydro Low CO 2 intensity Environmental impact (population displacement ) Biofuels Low CO 2 intensity expected from 2 nd generation biofuels Complementary source for liquid fuels Competition with food security for 1 st generation biofuels Costs, global analysis (water ) Limited technological progress Wind Low CO 2 intensity High costs Acceptability Variable peak rate Solar 5 10 15 20 % Unlimited supply Strong potential for efficiency and cost improvement Access to electricity in remote areas High costs in early stages Variable peak rate Solar : very high rate of growth but still a limited part of the power mix in 2030 Biofuels : development favored by availability of 2nd generation fuels Total estimates 22 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club
Implementing innovative solutions for end-users Excellium premium engine fuels launched in 2005 New Total Ecosolutions program launched in 2009 More energy efficient and environment-friendly products and services Labeling process ISO 14021 principles External audits 12 products already labeled Lubricants Packaging Heating systems Total Ecosolutions products avoid up to 500 kt/y CO 2 23 - Brunei s Energy Future: a Global Perspective Yves Grosjean National Environment Conference, 01 July 2010, The Empire Hotel and Country Club