Registration Document 2011
Contents
1. Key figures
8. General information
1. Operating and market data . . . . . . . . . . . . . . . . . . . . .1
2. Selected financial information . . . . . . . . . . . . . . . . . . .2
1. Share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .168
2. Articles of incorporation and by-laws;
2. Business overview
1. History and strategy of TOTAL . . . . . . . . . . . . . . . . . .8
2. Upstream . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
3. Downstream . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
4. Chemicals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
5. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
6. Organizational structure . . . . . . . . . . . . . . . . . . . . . . .50
7. Property, plant and equipment . . . . . . . . . . . . . . . . .51
8. Organization chart as of December 31, 2011 . . . . . .52
9. Organization chart as of February 29, 2012 . . . . . . .54
3. Management Report
1. Summary of results and financial position . . . . . . . .58
2. Liquidity and capital resources . . . . . . . . . . . . . . . . .63
3. Research & Development . . . . . . . . . . . . . . . . . . . . .65
4. Trends and outlook . . . . . . . . . . . . . . . . . . . . . . . . . . .67
4. Risk factors
1. Financial risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
2. Industrial and environmental risks . . . . . . . . . . . . . . .78
3. Other risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80
4. Insurance and risk management . . . . . . . . . . . . . . . .86
5. Corporate governance
1. Report of the Chairman of the Board of Directors
(Article L. 225-37 of the French Commercial Code) . . .90
2. Statutory auditor’s report (Article L. 225-235
of the French Commercial Code) . . . . . . . . . . . . . . .114
3. General Management . . . . . . . . . . . . . . . . . . . . . . . .115
4. Statutory auditors . . . . . . . . . . . . . . . . . . . . . . . . . . .116
5. Compensation for the administration
and management bodies . . . . . . . . . . . . . . . . . . . . .117
6. Employees, share ownership . . . . . . . . . . . . . . . . . .135
6. TOTAL and its shareholders
1. Listing details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .140
2. Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .144
3. Share buybacks . . . . . . . . . . . . . . . . . . . . . . . . . . . .146
4. Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .150
5. Information for overseas shareholders . . . . . . . . . .154
6. Investor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . .155
7. Financial information
1. Historical financial information . . . . . . . . . . . . . . . .160
2. Audit of the historical financial information . . . . . .160
3. Other information . . . . . . . . . . . . . . . . . . . . . . . . . .160
4. Dividend policy . . . . . . . . . . . . . . . . . . . . . . . . . . . .161
5. Legal and arbitration proceedings . . . . . . . . . . . . .161
6. Significant changes . . . . . . . . . . . . . . . . . . . . . . . . .165
other information . . . . . . . . . . . . . . . . . . . . . . . . . . .172
3. Other matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .175
4. Documents on display . . . . . . . . . . . . . . . . . . . . . . .176
5. Information on holdings . . . . . . . . . . . . . . . . . . . . . .176
9. Consolidated Financial Statements
1. Statutory auditor’s report on the
Consolidated Financial Statements . . . . . . . . . . . .180
2. Consolidated statement of income . . . . . . . . . . . . .181
3. Consolidated statement
of comprehensive income . . . . . . . . . . . . . . . . . . . .182
4. Consolidated balance sheet . . . . . . . . . . . . . . . . . .183
5. Consolidated statement of cash flow . . . . . . . . . . .184
6. Consolidated statement of changes
in shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . .185
7. Notes to the Consolidated Financial Statements . .186
10. Supplemental oil and gas information
(unaudited)
1. Oil and gas information pursuant to FASB
Accounting Standards Codification 932 . . . . . . . . .276
2. Other information . . . . . . . . . . . . . . . . . . . . . . . . . . .292
11. TOTAL S.A.
1. Statutory auditor’s report on regulated
agreements and commitments . . . . . . . . . . . . . . . .296
2. Statutory auditor’s report on
the financial statements . . . . . . . . . . . . . . . . . . . . .298
3. Statutory Financial Statements of TOTAL S.A.
as parent company . . . . . . . . . . . . . . . . . . . . . . . . .299
4. Notes to the Statutory Financial Statements . . . . .303
5. Other financial information concerning
the parent company . . . . . . . . . . . . . . . . . . . . . . . . .318
6. Consolidated financial information
for the last five years . . . . . . . . . . . . . . . . . . . . . . . .321
12. Corporate social responsibility
1. Employee policy . . . . . . . . . . . . . . . . . . . . . . . . . . . .324
2. Health, safety and environment information . . . . . .328
3. Community development information . . . . . . . . . . .334
4. Other social, community development
and environmental information . . . . . . . . . . . . . . . .338
5. Third parties assurance reports . . . . . . . . . . . . . . . .340
Glossary 345
Cross reference lists 349
Registration Document 2011
This translation is a non binding translation into English of the Chairman and Chief Executive Officer’s certification issued in French
and is provided solely for the convenience of English-speaking readers.
“I certify, after having taken all reasonable measures to this purpose and to the best of my knowledge, that the information contained
in this Document de référence (Registration Document) is in accordance with the facts and makes no omission likely to affect its import.
I certify, to the best of my knowledge, that the statutory and consolidated financial statements of TOTAL S.A. (the Company) have been prepared
in accordance with applicable accounting standards and give a fair view of the assets, liabilities, financial position and results of the Company
and of all the entities taken as a whole included in the consolidation, and that the rapport de gestion (Management Report) of the Board
of Directors as referenced in the cross reference list included on page 353 of this Document de référence (Registration Document) presents
a fair view of the development and performance of the business and financial position of the Company and of all the entities taken as a whole
included in the consolidation, as well as a description of the main risks and uncertainties they are exposed to.
I have received a completion letter from the statutory auditors in which they state that they have audited the information related to
the financial situation and the financial statements included in this Document de référence (Registration Document), as well as read
this Document de référence (Registration Document) in its entirety.
The statutory auditors have reviewed the historical financial information contained in this Document de référence (Registration Document).
The statutory auditors’ report on the consolidated financial statements for the year ended December 31, 2011, is included on page 180
of this Document de référence (Registration Document). The statutory auditors’ report on the consolidated financial statements for the
year ended December 31, 2010, included on page 166 of the 2010 Document de référence (Registration Document), filed with the French
Financial Markets Authority (Autorité des marchés financiers) on March 28, 2011 contains remarks.”
Christophe de Margerie
Chairman and Chief Executive Officer
The French language version of this Document de référence (Registration Document) was filed with the French Financial Markets
Authority (Autorité des marchés financiers) on March 26, 2012 pursuant to Article 212-13 of the general regulations of the French Financial
Markets Authority. It may be used in connection with a financial operation if supplemented by a prospectus for the operation and
a summary, each of which will have received the visa of the French Financial Markets Authority.
In accordance with paragraphs VI and VIII of aforesaid Article 212-13, the French language version of this Document de référence
(Registration Document) incorporates the Annual Financial Report referred to in paragraph I of Article L. 451-1-2 of the French Monetary
and Financial Code.
This document has been drawn up by the issuer and is binding for its signatories.
Registration Document 2011. TOTAL
i
Abbreviations
barrel
cubic feet
per day
per year
euro
b:
cf:
/d:
/y:
€:
$ and/or dollar: U.S. dollar
metric ton
t:
barrel of oil equivalent
boe:
thousand boe/d
kboe/d:
thousand barrel/d
kb/d:
British thermal unit
Btu:
million
M:
billion
B:
megawatt
MW:
megawatt peak (direct current)
MWp:
terawatt hour
TWh:
French Financial Markets Authority
AMF:
American Petroleum Institute
API:
European Refining Margin Indicator. ERMI is an indicator intended to
ERMI:
represent the margin after variable costs for a hypothetical complex
refinery located around Rotterdam in Northern Europe. The indicator
margin may not be representative of the actual margins achieved by
TOTAL in any period because of TOTAL’s particular refinery configurations,
product mix effects or other company-specific operating conditions.
Front-End Engineering and Design
Floating Production Storage and Offloading
International Financial Reporting Standards
liquefied natural gas
liquefied petroleum gas
Return on Equity
Return on Average Capital Employed
United States Securities and Exchange Commission
Steam Assisted Gravity Drainage
FEED:
FPSO:
IFRS:
LNG:
LPG:
ROE
ROACE:
SEC:
SAGD:
ii
TOTAL. Registration Document 2011
Conversion table
1 boe = 1 barrel of crude oil = approx. 5,447 cf of gas* in 2011.
1 b/d = approx. 50 t/y
1 t = approx. 7.5 b (for a gravity of 37° API)
1 Bm3/y = approx. 0.1 Bcf/d
1 m3 = approx. 35.3 cf
1 t of LNG = approx. 48 kcf of gas
1 Mt/y of LNG = approx. 131 Mcf/d
* This ratio is calculated based on the actual average equivalent energy content
of TOTAL's natural gas reserves and is subject to change.
Definitions
The terms “TOTAL” and “Group” as used in this Registration Document refer to TOTAL
S.A. collectively with all of its direct and indirect consolidated subsidiaries located in,
or outside of France.
© TOTAL S.A. March 2012
Key figures
Key figures 1
1. Operating and market data
2011 2010 2009
Brent ($/b) 111.3 79.5 61.7
Exchange rate (€-$) 1.39 1.33 1.39
European Refinery Margin Indicator (ERMI) ($/t) 17.4 27.4 17.8
Hydrocarbon production (kboe/d) 2 346 2 378 2 281
Liquids (kb/d) 1 226 1 340 1 381
Gas (Mcf/d) 6 098 5 648 4 923
Refinery throughput (kb/d)(a) 1 863 2 009 2 151
Refined products sales (kb/d)(b) 3 639 3 776 3 616
(a) Includes share of CEPSA through July 31, 2011, and, starting October 2010, of TotalErg.
(b) Includes trading.
Registration Document 2011. TOTAL
1
1 Key figures
Selected financial information
2. Selected financial information
Consolidated data in million euros, except for earnings per share, dividends, number of shares and percentages.
(M€) 2011 2010 2009
Sales 184,693 159,269 131,327
Adjusted operating income from business segments(a) 24,409 19,797 14,154
Adjusted net operating income from business segments(a) 12,263 10,622 7,607
Net income (Group share) 12,276 10,571 8,447
Ajusted net income (Group share)(a) 11,424 10,288 7,784
Fully-diluted weighted-average shares (millions) 2,257.0 2,244.5 2,237.3
Adjusted fully-diluted earnings per share (euros)(a)(b) 5.06 4.58 3.48
Dividend per share (euros)(c) 2.28 2.28 2.28
Net-debt-to-equity ratio (as of December 31) 23% 22% 27%
Return on average capital employed (ROACE)(d) 16% 16% 13%
Return on equity (ROE) 18% 19% 16%
Cash flow from operations 19,536 18,493 12,360
Investments 24,541 16,273 13,349
Divestments 8,578 4,316 3,081
(a) Adjusted results are defined as income using replacement cost, adjusted for special items, excluding the impact of changes for fair value from January 1, 2011, and, through June 30, 2010,
excluding Total’s equity share of adjustments related to Sanofi.
(b) Based on fully-diluted weighted-average number of common shares outstanding during the period.
(c) Dividend 2011 is subject to the approval by the Shareholder’s Meeting on May 11, 2012.
(d) Based on adjusted net operating income and average capital employed at replacement costs (excluding after-tax inventory effect).
2
TOTAL. Registration Document 2011
Selected financial information
Key figures 1
Sales
Adjusted net income
(Group share)
(M€)
2009
2010
2011
(M€)
2009
2010
2011
184,693
159,269
11,424
10,288
131,327
7,784
Adjusted net operating income
from business segments
Adjusted fully-diluted
earnings per share
(M€)
2009
2010
2011
(€)
2009
2010
2011
12,263
10,622
7,607
Upstream
Downstream
Chemicals
6,382
953
272
8,597
1,168
857
10,405
1,083
775
5.06
4.58
3.48
Investments
Dividend per share
(M€)
2009
2010
2011
(€)
2009
2010
2011
24,541
2.28
2.28
2.28(a)
16,273
13,349
(a) Subject to the approval by the Shareholders’ Meeting
of May 11, 2012.
Registration Document 2011. TOTAL
3
1 Key figures
Selected financial information
Upstream
Oil and gas production
Liquids and gas reserves
(en kboe/d)
2009
2010
2011
(en Mboe)
2009
2010
2011
2,281
2,378
2,346
613
749
206
438
275
Europe
Africa
Americas
Middle East
Asia and CIS
580
756
244
527
271
512
659
255
570
350
10,483
10,695
5,689
5,987
11,423
5,784
4,794
4,708
5,639
Liquids
Gas
Downstream
Refined product sales
including Trading
Refining capacity at year-end
(en kb/d)
2009
2010
2011
(en kb/d)
2009
2010
2011
3,616
3,776
3,639
2,435
2,392
2,281
2,594
2,363
2,090
2,282
2,049
1,791
Europe
Rest of
World
1,181
1,384
1,358
Europe
Rest of
World
312
314
299
Chemicals
2011 non-Group sales
2011 adjusted net operating
income
(B€)
(B€)
2011
19.5 B€
Base Chemicals
12.7 B€
Speciality
Chemicals
6.8 B€
2011
0.8 B€
Base Chemicals
0.4 B€
Speciality
Chemicals
0.4 B€
4
TOTAL. Registration Document 2011
Selected financial information
Key figures 1
Shareholder base
Estimates as of November 30, 2011,
excluding treasury shares.
Shareholder base by region
Estimates as of November 30, 2011,
excluding treasury shares.
%
2011
%
Group Employees (a) 4.6%
Individual
shareholders 8.4%
Institutional
shareholders 87.0%
(a) Based on the definition of employee shareholding pursuant
to Article L. 225-102 of the French Commercial code
2011
France 33%
United Kingdom 10%
Rest of
Europe 22%
North
America 27%
Rest of world 8%
Employees by business
segment(a)
Employees by region(a)
(%)
2011
(%)
Upstream 24.5%
Downstream 30.6%
Chemicals 43.4%
Corporate 1.5%
2011
France 36.5%
Rest of Europe
23.3%
Rest of World
40.2%
(a) Consolidated subsidiaries.
Workforce as of December 31, 2011: 96,104 employees.
(a) Consolidated subsidiaries.
Workforce as of December 31, 2011: 96,104 employees.
Registration Document 2011. TOTAL
5
6
TOTAL. Registration Document 2011
Business overview 2
Business overview
1. History and strategy of TOTAL 8
1.1. History and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
1.2. Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
2. Upstream 9
2.1. Exploration & Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
2.2. Production by region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
2.3. Presentation of production activities by region . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
2.4. Oil and gas acreage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
2.5. Number of productive wells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
2.6. Number of net oil and gas wells drilled annually . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
2.7. Drilling and production activities in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
2.8. Interests in pipelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
2.9. Gas & Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
3. Downstream 37
3.1. Refining & Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
3.2. Trading & Shipping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
4. Chemicals 44
4.1. Base Chemicals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
4.2. Specialty Chemicals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
5. Investments 49
5.1. Major investments over the 2009-2011 period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
5.2. Major investments anticipated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
6. Organizational structure 50
6.1. Position of the Company within the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
6.2. Major subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
7. Property, plant and equipment 51
8. Organization chart as of December 31, 2011 52
9. Organization chart as of February 29, 2012 54
Registration Document 2011. TOTAL
7
2 Business overview
History and strategy of TOTAL
1. History and strategy of TOTAL
1.1. 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 has
activities in every sector of the oil industry: including in the upstream
(oil and gas exploration, development and production, liquefied
natural gas) and downstream (refining, petrochemicals, specialty
chemicals, marketing and the trading and shipping of crude oil
and petroleum products). In addition, TOTAL has equity stakes in
coal mines and operates in the power generation and renewable
energy sectors.
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. (hereafter referred to as “PetroFina” or “Fina”) and
in early 2000, the Company acquired control of Elf Aquitaine S.A.
(hereafter referred to as “Elf Aquitaine” or “Elf”).
The Company’s corporate name is TOTAL S.A.
The Company’s registered office is 2, place Jean Millier, La Défense 6,
92400 Courbevoie, France.
The telephone number is +33 1 47 44 45 46 and the website
address is www.total.com.
TOTAL S.A. is registered in France at the Nanterre Trade Register
under the registration number 542 051 180.
1.2. Strategy
TOTAL’s activities lie at the heart of the two biggest challenges
facing the world now and in future: energy supply and
environmental protection. The Group’s responsibility as an energy
producer is to provide optimum, sustainable management of
these twin imperatives.
TOTAL’s strategy, the implementation of which is based on a model
for sustainable growth combining the acceptability of operations
with a sustained, profitable investment program, aims at:
- expanding hydrocarbon exploration and production activities
and strengthening its worldwide position as one of the global
leaders in the natural gas and LNG markets;
– progressively expanding TOTAL’s energy solutions and
developing new energies to complement oil and gas;
– adapting its refining and petrochemical base to market changes,
focusing on a small number of large, competitive platforms and
maximizing the advantages of integration;
– developing its petroleum product marketing business, in
particular in Africa, Asia and the Middle East, while maintaining
the competitiveness of its operations in mature areas; and
– pursuing research and development to develop “clean” sources
of energy, contributing to the moderation of the demand for
energy, and participating in the effort against climate change.
(1) Based on market capitalization (in dollars) as of December 31, 2011.
8
TOTAL. Registration Document 2011
Business overview 2
Upstream
2. 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 approximately thirty countries.
(cid:129) 2.35 Mboe/d of hydrocarbons produced in 2011
(cid:129) 11.4 Bboe of proved reserves as of December 31, 2011(1)
(cid:129) Capital expenditure for 2011: €21.7 billion
(cid:129) 23,563 employees
Upstream segment financial data
(M€) 2011 2010 2009
Non-Group sales 23,298 18,527 16,072
Adjusted operating income 22,474 17,653 12,879
Adjusted net operating income 10,405 8,597 6,382
For the full year 2011, adjusted net operating income from the
Upstream segment was €10,405 million compared to €8,597 million
in 2010, an increase of 21%. Expressed in dollars, adjusted net
operating income from the Upstream segment was $14.5 billion,
an increase of 27% compared to 2010, essentially due to the impact
of higher hydrocarbon prices.
Technical costs(2) for consolidated subsidiaries, in accordance with
ASC 932(3), were 18.9 $/boe (4) in 2011, compared to 16.6 $/boe in 2010.
The return on average capital employed (ROACE(5)) for the Upstream
segment was 20%, for the full-year 2011 compared to 21% for the
full year 2010.
Price realizations(a) 2011 2010 2009
Average liquids price ($/b) 105.0 76.3 58.1
Average gas price ($/Mbtu) 6.53 5.15 5.17
(a) Consolidated subsidiaries, excluding fixed margin and buyback contracts.
TOTAL’s average liquids price increased by 38% in 2011 compared
to 2010 and TOTAL’s average gas price increased by 27% compared
to 2010.
(1) Based on a Brent crude price of $110.96/b.
(2) (Production costs + exploration expenses + depreciation, depletion and amortization
and valuation allowances)/production of the year.
(3) FASB Accounting Standards Codification Topic 932, Extractive industries – Oil and Gas.
(4) Excluding IAS 36 (impairment of assets).
(5) Calculated based on adjusted net operating income and average capital employed, using
replacement cost.
(6) Impact of changing hydrocarbon prices on entitlement volumes.
(7) Change in reserves excluding production i.e. (revisions + discoveries, extensions
+ acquisitions – divestments) / production for the period. The reserve replacement rate
would be 84% in an environment with a constant 79.02 $/b oil price, excluding
acquisitions and divestments.
(8) Limited to proved and probable reserves covered by E&P contracts on fields that have
been drilled and for which technical studies have demonstrated economic development
in a 100 $/b Brent environment, including projects developed by mining.
(9) Proved and probable reserves plus contingent resources (potential average recoverable
reserves from known accumulations - Society of Petroleum Engineers - 03/07).
Production
Hydrocarbon production 2011 2010 2009
Combined production (kboe/d) 2,346 2,378 2,281
Liquids (kb/d) 1,226 1,340 1,381
Gas (Mcf/d) 6,098 5,648 4,923
Europe 512 kboe/d
Africa 659 kboe/d
South America 188 kboe/d
North America 67 kboe/d
Asia-Pacific 231 kboe/d
CIS 119 kboe/d
Middle East 570 kboe/d
For the full-year 2011, hydrocarbon production was 2,346 kboe/d,
a decrease of 1.3% compared to 2010, essentially as a result of:
(cid:129) -1.5% for normal decline, net of production ramp-ups on new
projects;
(cid:129) +2.5% for changes in the portfolio, integrating the net share of
Novatek production and impact of the sale of interests in CEPSA,
(cid:129) +1% for the end of OPEC reductions;
(cid:129) -1.5% for security conditions, mainly in Libya;
(cid:129) -2% for the price effect(6).
Reserves
As of December 31, 2011 2010 2009
Hydrocarbon reserves (Mboe) 11,423 10,695 10,483
Liquides (Mb) 5,784 5,987 5,689
Gaz (Gpc) 30,717 25,788 26,318
Europe 1,737 Mboe
Middle East 2,079 Mboe
Africa 3,092 Mboe
Asia-CIS 2,321 Mboe
Americas 2,194 Mboe
Proved reserves based on SEC rules (based on Brent at 110.96 $/b)
were 11,423 Mboe at December 31, 2011. Based on the 2011
average rate of production, the reserve life is 13 years.
The 2011 proved reserve replacement rate(7), based on SEC rules,
was 185%. As of year-end 2011, Total has a solid and diversified
portfolio of proved and probable reserves(8) representing more than
20 years of reserve life based on the 2011 average production rate,
and resources(9) representing more than 40 years of reserve life.
Registration Document 2011. TOTAL
9
2 Business overview
Upstream
2.1. Exploration & Production
2.1.1. Exploration and development
TOTAL’s Upstream segment aims at continuing to combine long-term
growth and profitability at the level 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 76%
of the 2,037 Mboe added to the Upstream segment’s proved
reserves during the three-year period ended December 31, 2011
(before deducting production and sales of reserves in place and
adding any acquisitions of reserves in place during this period).
The remaining 24% comes from revisions of previous estimates.
The level of revisions during this three year period was significantly
impacted by the effect of successive increases of the reference
oil price (from $36.55/b at the end of 2008 to $110.96/b in 2011
for Brent crude) which induced a substantial negative revision.
In 2011, the exploration investments of consolidated subsidiaries
amounted to €1,629 million (including exploration bonuses
included in the unproved property acquisition costs). Exploration
investments were made primarily in Norway, the United Kingdom,
Angola, Brazil, Azerbaijan, Indonesia, Brunei, Kenya, French Guiana
and Nigeria. In 2010, the exploration investments of consolidated
subsidiaries amounted to €1,472 million (including exploration
bonuses included in the unproved property acquisition costs).
The main exploration investments were made in Angola, Norway,
Brazil, the United Kingdom, the United States, Indonesia, Nigeria
and Brunei. In 2009, exploration investments of consolidated
subsidiaries amounted to €1,486 million (including exploration
bonuses included in the unproved property acquisition costs)
notably in the United States, Angola, the United Kingdom, Norway,
Libya, Nigeria and the Republic of the Congo.
The Group’s consolidated Exploration & Production subsidiaries’
development investments amounted to €10 billion in 2011,
primarily in Angola, Nigeria, Norway, Kazakhstan, the United Kingdom,
Australia, Canada, Gabon, Indonesia, the Republic of the Congo,
the United States and Thailand. The Group’s consolidated
Exploration & Production subsidiaries’ development investments
amounted to €8 billion in 2010, primarily in Angola, Nigeria,
Kazakhstan, Norway, Indonesia, the Republic of the Congo, the
United Kingdom, the United States, Canada, Thailand, Gabon and
Australia. In 2009, development investments amounted to nearly
€8 billion, predominantly in Angola, Nigeria, Norway, Kazakhstan,
Indonesia, the Republic of the Congo, the United Kingdom, the
United States, Gabon, Canada, Thailand, Russia and Qatar.
2.1.2. 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
reassessments, 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. For further information
concerning changes in TOTAL’s proved reserves for the years
ended December 31, 2011, 2010 and 2009, 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 booking process requires, among other things:
– internal peer reviews of technical evaluations to ensure that
the SEC definitions and guidance are followed; and
– that management makes significant funding commitments
towards the development of the reserves prior to booking.
For further information regarding the preparation of reserves
estimates, see “Supplemental Oil and Gas Information (Unaudited)”.
2.1.3. Proved reserves
In accordance with the amended Rule 4-10 of Regulation S-X,
proved reserves for the years ended on or after 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 prices for 2011, 2010 and 2009 were,
respectively, $110.96/b, $79.02/b and $59.91/b for Brent crude.
As of December 31, 2011, TOTAL’s combined proved reserves
of oil and gas were 11,423 Mboe (53% of which were proved
developed reserves). Liquids (crude oil, natural gas liquids and
bitumen) represented approximately 51% of these reserves and
natural gas the remaining 49%. These reserves were located
in Europe (mainly in Italy, 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 Qatar,
the United Arab Emirates and Yemen), and in Asia (mainly in Australia,
Indonesia, Kazakhstan and Russia).
As of December 31, 2010, TOTAL’s combined proved reserves
of oil and gas were 10,695 Mboe (53% of which were proved
developed reserves). Liquids (crude oil, natural gas liquids
and bitumen) represented approximately 56% of these reserves
and natural gas the remaining 44%. 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 Qatar,
the United Arab Emirates and Yemen), and in Asia (mainly
in Indonesia and Kazakhstan).
10
TOTAL. Registration Document 2011
Business overview 2
Upstream
As in 2010 and 2009, substantially all of the liquids production
from TOTAL’s Upstream segment in 2011 was marketed by
the Trading & Shipping division of TOTAL’s Downstream segment
(see table “Trading division’s supply and sales of crude oil”
on paragraph 3.2.1 of the present Chapter).
The majority of TOTAL’s natural gas production is sold under long-
term contracts. However, its North American production, and part
of 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 TOTAL’s long-term contracts, notably in Argentina,
Indonesia, Nigeria, Norway, Qatar and Russia, specify the delivery
of quantities of natural gas that may or may not be fixed and
determinable. Such delivery commitments vary substantially,
both in duration and in scope, from contract to contract throughout
the world. For example, in some cases, contracts require delivery
of natural gas on an as-needed basis, and, in other cases,
contracts call for the delivery of varied amounts of natural gas
over different periods of time. Nevertheless, TOTAL estimates
the fixed and determinable quantity of gas to be delivered over the
period 2012-2014 to be 4,051 Bcf. The Group expects to satisfy
most of these obligations through the production of its proved
reserves of natural gas, with, if needed, additional sourcing from
spot market purchases (see Chapter 10, “Supplemental Oil and Gas
Information (Unaudited)” of this Registration Document).
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).
2.1.4. 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 risked service
contracts (which together represent approximately 26% of TOTAL’s
reserves as of December 31, 2011). 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 risked service contracts due to such higher prices.
As a result, higher prices lead to a decrease in TOTAL’s reserves.
Furthermore, changes in the price used as a reference for the proved
reserves estimation impact the volume of royalties in Canada and
thus TOTAL’s share of proved reserves.
2.1.5. Production
For the full year 2011, average daily oil and gas production was
2,346 kboe/d compared to 2,378 kboe/d in 2010.
Liquids accounted for approximately 52% and natural gas accounted
for approximately 48% of TOTAL’s combined liquids and natural gas
production in 2011.
The table on the next page sets forth by geographic area TOTAL’s
average daily production of liquids and natural 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.
Registration Document 2011. TOTAL
11
2 Business overview
Upstream
2.2. Production by region
2011
Liquids
kb/d
Natural
gas
Mcf/d
Total
kboe/d
Liquids
kb/d
2010
Natural
gas
Mcf/d
2009
Total
kboe/d
Liquids
kb/d
Natural
gas
Mcf/d
Total
kboe/d
Africa 517 715 659 616 712 756 632 599 749
Algeria 16 94 33 25 87 41 47 143 74
Angola 128 39 135 157 34 163 186 33 191
Cameroon 2 1 3 9 2 9 12 2 12
Gabon 55 17 58 63 20 67 67 20 71
Libya 20 - 20 55 - 55 60 - 60
Nigeria 179 534 287 192 542 301 159 374 235
The Congo, Republic of 117 30 123 115 27 120 101 27 106
North America 27 227 67 30 199 65 20 22 24
Canada(a) 11 - 11 10 - 10 8 - 8
United States 16 227 56 20 199 55 12 22 16
South America 71 648 188 76 569 179 80 564 182
Argentina 14 397 86 14 381 83 15 364 80
Bolivia 3 118 25 3 94 20 3 91 20
Colombia 5 27 11 11 34 18 13 45 23
Trinidad & Tobago 4 47 12 3 2 3 5 2 5
Venezuela 45 59 54 45 58 55 44 62 54
Asia-Pacific 27 1,160 231 28 1,237 248 33 1,228 251
Australia - 25 4 - 6 1 - - –
Brunei 2 56 13 2 59 14 2 49 12
Indonesia 18 757 158 19 855 178 25 898 190
Myanmar - 119 15 - 114 14 - 103 13
Thailand 7 203 41 7 203 41 6 178 36
CIS 22 525 119 13 56 23 14 52 24
Azerbaijan 4 57 14 3 54 13 3 50 12
Russia 18 468 105 10 2 10 11 2 12
Europe 245 1,453 512 269 1,690 580 295 1,734 613
France 5 69 18 5 85 21 5 100 24
The Netherlands 1 214 38 1 234 42 1 254 45
Norway 172 619 287 183 683 310 199 691 327
United Kingdom 67 551 169 80 688 207 90 689 217
Middle East 317 1,370 570 308 1,185 527 307 724 438
United Arab Emirates 226 72 240 207 76 222 201 72 214
Iran - - - 2 - 2 8 - 8
Oman 24 62 36 23 55 34 22 56 34
Qatar 44 616 155 49 639 164 50 515 141
Syria 11 218 53 14 130 39 14 34 20
Yemen 12 402 86 13 285 66 12 47 21
Total production 1,226 6,098 2,346 1,340 5,648 2,378 1,381 4,923 2,281
Including share
of equity affiliates 316 1,383 571 300 781 444 286 395 359
Algeria 10 3 10 19 4 20 20 3 21
Colombia 4 - 4 7 - 7 6 - 6
Venezuela 44 7 45 45 6 46 44 6 45
United Arab Emirates 219 62 231 199 66 212 191 62 202
Oman 22 62 34 22 55 32 22 56 34
Qatar 8 382 78 8 367 75 3 221 42
Russia 9 465 95 - - - - - –
Yemen - 402 74 - 283 52 - 47 9
(a) The Group’s production in Canada consists of bitumen only. All of the Group’s bitumen production is in Canada.
12
TOTAL. Registration Document 2011
Business overview 2
Upstream
2.3. Presentation of production activities by region
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, 2011(a)
Year of entry
into the country
Operated
(Group share in %)
Non-operated
(Group share in %)
Africa
Algeria
Angola
1952
1953
The Congo,
Republic of
1928
Gabon
1928
Tin Fouye Tabankort (35.00%)
Girassol, Jasmim,
Rosa, Dalia, Pazflor (Block 17) (40.00%)
Block 0 (10.00%)
Kuito, BBLT, Tombua-Landana (Block 14) (20.00%)
Oombo (Block 3/91) (50.00%)
Loango (50.00%)
Zatchi (35.00%)
Kombi-Likalala-Libondo (65.00%)
Moho Bilondo (53.50%)
Nkossa (53.50%)
Nsoko (53.50%)
Sendji (55.25%)
Tchendo (65.00%)
Tchibeli-Litanzi-Loussima (65.00%)
Tchibouela (65.00%)
Yanga (55.25%)
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%)
Lopez Nord (100.00%)
Mandaros (100.00%)
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%)
Registration Document 2011. TOTAL
13
2 Business overview
Upstream
Year of entry
into the country
Operated
(Group share in %)
Non-operated
(Group share in %)
Libya
1959
Nigeria
1962
North America
Canada
1999
United States
1957
South America
Argentina
1978
Bolivia
1995
Colombia
1973
Trinidad & Tobago
1996
Venezuela
1980
Asia-Pacific
Australia
2005
Brunei
1986
Zones 15, 16 & 32 (ex C 137, 75.00%)(b)
Zones 70 & 87 (ex C 17, 75.00%)(b)
Zones 129 & 130 (ex NC 115, 30.00%)(b)
Zones 130 & 131 (ex NC 186, 24.00%)(b)
OML 102-Ekanga (40.00%)
Shell Petroleum Development Company
(SPDC 10.00%)
OML 118 - Bonga (12.50%)
Surmont (50.00%)
Several assets in the Barnett Shale area (25.00%)(c)
Several assets in the Utica Shale area (25.00%)(c)
Tahiti (17.00%)
OML 58 (40.00%)
OML 99 Amenam-Kpono (30.40%)
OML 100 (40.00%)
OML 102 (40.00%)
OML 130 (24.00%)
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%)
San Alberto (15.00%)
San Antonio (15.00%)
Itau (41.00%)
Cusiana (11.60%)
Angostura (30.00%)
PetroCedeño (30.323%)
Yucal Placer (69.50%)
GLNG (27.50%)
Maharaja Lela Jamalulalam (37.50%)
14
TOTAL. Registration Document 2011
2_VA_V7 02/04/12 11:15 Page15
Year of entry
into the country
Operated
(Group share in %)
Non-operated
(Group share in %)
Indonesia
1968
Business overview 2
Upstream
Myanmar
1992
Thailand
1990
CIS
Azerbaijan
1996
Russia
1991
Europe
France
1939
Norway
1965
Bekapai (50.00%)
Handil (50.00%)
Peciko (50.00%)
Sisi-Nubi (47.90%)
Tambora (50.00%)
Tunu (50.00%)
Yadana (31.24%)
Badak (1.05%)
Nilam-gas and condensates (9.29%)
Nilam-oil (10.58%)
Bongkot (33.33%)
Shah Deniz (10.00%)
Kharyaga (40.00%)
Several fields through the participation
in Novatek (14.09%)
Lacq (100.00%)
Meillon (100.00%)
Pécorade (100.00%)
Vic-Bilh (73.00%)
Lagrave (100.00%)
Lanot (100.00%)
Itteville (78.73%)
La Croix-Blanche (100.00%)
Vert-le-Grand (90.05%)
Vert-le-Petit (100.00%)
Skirne (40.00%)
Dommartin-Lettrée (56.99%)
Åsgard (7.68%)
Ekofisk (39.90%)
Eldfisk (39.90%)
Embla (39.90%)
Gimle (4.90%)
Glitne (21.80%)
Gungne (10.00%)
Heimdal (16.76%)
Huldra (24.33%)
Kristin (6.00%)
Kvitebjørn (5.00%)
Mikkel (7.65%)
Morvin (6.00%)
Oseberg (10.00%)
Oseberg East (10.00%)
Registration Document 2011. TOTAL
15
2 Business overview
Upstream
Year of entry
into the country
Operated
(Group share in %)
Non-operated
(Group share in %)
Norway
1965
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%)
Tor (48.20%)
Tordis (5.60%)
Troll I (3.69%)
Troll II (3.69%)
Tune (10.00%)
Tyrihans (23.18%)
Vale (24.24%)
Vigdis (5.60%)
Vilje (24.24%)
Visund (7.70%)
Yttergryta (24.50%)
E16a (16.92%)
E17a/E17b (14.10%)
J3b/J6 (25.00%)
Q16a (6.49%)
The Netherlands
1964
F6a gas (55.66%)
F6a oil (65.68%)
F15a Jurassic (38.20%)
F15a/F15d Triassic (32.47%)
F15d (32.47%)
J3a (30.00%)
K1a (40.10%)
K1b/K2a (54.33%)
K2c (54.33%)
K3b (56.16%)
K3d (56.16%)
K4a (50.00%)
K4b/K5a (36.31%)
K5b (45.27%)
K6/L7 (56.16%)
L1a (60.00%)
L1d (60.00%)
L1e (55.66%)
L1f (55.66%)
L4a (55.66%)
16
TOTAL. Registration Document 2011
Year of entry
into the country
Operated
(Group share in %)
Non-operated
(Group share in %)
United Kingdom
1962
Business overview 2
Upstream
Alwyn North, Dunbar, Ellon, Grant
Nuggets (100.00%)
Elgin-Franklin (EFOG 46.17%)(d)
Forvie Nord (100.00%)
Glenelg (49.47%)
Jura (100.00%)
West Franklin (EFOG 46.17%)(d)
Abu Dhabi-Abu Al Bu Khoosh (75.00%)
Al Khalij (100.00%)
Deir Ez Zor (Al Mazraa, Atalla North, Jafra,
Marad, Qahar, Tabiyeh) (100.00%)(i)
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%)
Otter (50.00%)
Seymour (25.00%)
Abu Dhabi offshore (13.33%)(e)
Abu Dhabi onshore (9.50%)(f)
GASCO (15.00%)
ADGAS (5.00%)
Various fields onshore (Block 6) (4.00%)(g)
Mukhaizna field (Block 53) (2.00%)(h)
North Field-Block NF Dolphin (24.50%)
North Field-Block NFB (20.00%)
North Field-Qatargas 2 Train 5 (16.70%)
Middle East
U.A.E.
1939
Oman
1937
Qatar
1936
Syria
1988
Yemen
1987
Kharir/Atuf (Block 10) (28.57%)
Various fields onshore (Block 5) (15.00%)
(a) The Group’s interest in the local entity is approximately 100% in all cases except for Total Gabon (58.28%) and certain entities in the United Kingdom, Abu Dhabi and Oman (see notes
b through h below).
(b) TOTAL’s stake in the foreign consortium.
(c) TOTAL’s interest in the joint venture.
(d) TOTAL has a 46.17% indirect interest in Elgin Franklin through its interest in EFOG.
(e) Through ADMA (equity affiliate), TOTAL has a 13.33% interest and participates in the operating company, Abu Dhabi Marine Operating Company.
(f) Through ADPC (equity affiliate), TOTAL has a 9.50% interest and participates in the operating company, Abu Dhabi Company for Onshore Oil Operation.
(g) 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).
(h) TOTAL has a direct interest of 2.00% in Block 53.
(i) Operated by DEZPC, which is 50% owned by TOTAL and 50% owned by GPC. Following the extension of European Union sanctions against Syria on December 1, 2011, TOTAL has ceased
its activities that contribute to oil and gas production in Syria. For further information on U.S. and European restrictions relevant to TOTAL’s activities in Syria, see Chapter 4 (Risk Factors).
Registration Document 2011. TOTAL
17
2 Business overview
Upstream
2.3.1. Africa
In 2011, TOTAL’s production in Africa was 659 kboe/d,
representing 28% of the Group’s overall production,
compared to 756 kboe/d in 2010 and 749 kboe/d in 2009.
In Algeria, TOTAL’s production was 33 kboe/d in 2011, compared
to 41 kboe/d in 2010 and 74 kboe/d in 2009. This decline was
due on the one hand to the termination of the Hamra contract
in October 2009 and on the other hand to the divestment of TOTAL’s
stake in CEPSA (48.83%), which was finalized in July 2011.
The Group‘s production now comes entirely from the TFT field
(Tin Fouyé Tabenkort, 35%). TOTAL also has 37.75% and 47% stakes
in the Timimoun and Ahnet gas development projects respectively.
– On the TFT field, plateau production was maintained at 185 kboe/d.
A 3D seismic survey covering 1,380 km2 on the East and West
portions of the field was completed in October 2011. The data
is currently being processed and interpreted.
– Launched in 2010 following approval of the development plan
by the ALNAFT national agency, the basic engineering phase
for the Timimoun project has been completed. Commercial gas
production is scheduled to start up in 2016, with anticipated
plateau production of 1.6 Bm3/y (160 Mcf/d).
– Under the Ahnet project, the technical section of a development
plan was submitted to the authorities in July 2011. Discussions
are underway with the project partners and the authorities with
regard to bringing the gas to market, with anticipated plateau
production of 4 Bm3/y (400 Mcf/d).
In Angola, the Group‘s production was 135 kboe/d in 2011,
compared to 163 kboe/d in 2010 and 191 kboe/d in 2009.
Production comes mainly from Blocks 0, 14 and 17. Highlights of the
period 2009 to 2011 included several discoveries on Blocks 15/06
and 17/06, and progress on the major Pazflor and CLOV projects.
– Deep-offshore Block 17 (40%, operator) is TOTAL’s principal
asset in Angola. It is composed of four major zones: Girassol,
Dalia, Pazflor and CLOV.
On the Girassol hub, production from the Girassol, Jasmim
and Rosa fields was 220 kb/d in 2011.
On the Dalia hub, production was nearly 240 kb/d in 2011.
Production on Pazflor, the third hub consisting of the Perpetua,
Zinia, Hortensia and Acacia fields, started up in August 2011
and reached 170 kb/d at the end of 2011. The production
capacity of the FPSO is 220 kb/d.
The development of CLOV, the fourth hub, started in 2010 and
will result in the installation of a fourth FPSO with a capacity of
160 kb/d. Start-up of production is expected in 2014.
– On Block 14 (20%), production on the Tombua-Landana field
started in August 2009 and adds to production from the Benguela-
Belize-Lobito-Tomboco and Kuito fields.
– On ultra-deep offshore Block 32 (30%, operator), appraisal is continuing
and pre-development studies for a first production zone in the central/
southeastern portion of the block are underway (Kaombo project).
– On Block 15/06 (15%), a first development hub including the
discoveries located on the northwest portion of the block has
been identified. The development plan for the hub has been
submitted to the authorities.
TOTAL has operations on exploration Blocks 33 (55%, operator),
17/06 (30%, operator), 25 (35%, operator), 39 (15%) and 40
(50%, operator).
TOTAL is also developing in LNG through the Angola LNG project
(13.6%), which includes a gas liquefaction plant near Soyo. The plant
will be supplied in particular by the gas associated with production
from Blocks 0, 14, 15, 17 and 18. Construction work is ongoing
and start-up is expected in 2012.
In Cameroon, the Group’s production was 3 kboe/d in 2011,
compared to 9 kboe/d in 2010 and 12 kboe/d in 2009. In April 2011,
TOTAL finalized the divestment of its stake in its upstream subsidiary
Total E&P Cameroon, a Cameroonian company in which the Group
had a 75.8% holding. Since that time, the Group no longer owns
any exploration and production assets in the country.
In Côte d’Ivoire, TOTAL is operator of the Cl-100 exploration
license, with a 60% stake. The 2,000 km2 license is located
approximately 100 km southeast of Abidjan in water depths ranging
from 1,500 to 3,100 m. Exploration work started with a 3D seismic
survey of over 1,000 km2 at the end of 2011, which completed
the 3D coverage of the entire block. Initial exploratory drilling is
planned for the end of 2012.
In February 2012, TOTAL acquired interests in three ultra-deepwater
exploration licenses: CI-514 (54%, operator), CI-515 (45%) and
CI-516 (45%). For the two last blocks TOTAL will become the operator
upon the first commercial discovery. The work program includes
a 3D seismic survey of the whole acreage and one well to be drilled
on each block during the initial three-year exploration period.
In Egypt, TOTAL signed a concession agreement in February 2010
and became operator of Block 4 (East El Burullus Offshore) with
a 90% stake. The license, located in the Nile Basin where a number
of gas discoveries have been made, covers a 4-year initial exploration
period and includes a commitment to carrying out 3D seismic work
and drilling exploration wells. Following the 3,374 km2 3D seismic
survey shot in 2011, drilling is under preparation.
In Gabon, the Group’s production was 58 kboe/d in 2011, compared
to 67 kboe/d in 2010 and 71 kboe/d in 2009, due to the natural
decline of fields. The Group’s exploration and production activities
in Gabon are mainly carried out by Total Gabon(1), one of the
Group’s oldest subsidiaries in sub-Saharan Africa.
– Under the Anguille field redevelopment project, the AGM N platform,
from which twenty-one additional development wells are to be drilled,
left the Fos-sur-Mer shipyard at the end of 2011 for Gabon.
The drilling campaign is expected to start at the beginning of the
second quarter of 2012.
– On the deep-offshore Diaba license (Total Gabon 63.75%,
operator), following the 2D seismic survey that was performed
in 2008 and 2009, a 6,000 km2 3D seismic was shot in 2010.
This new seismic survey has been processed and the results
are currently being interpreted.
– Total Gabon farmed into the onshore Mutamba-Iroru (50%),
DE7 (30%) and Nziembou (20%) exploration licenses in 2010.
Following negative exploratory drilling on license DE7, Total
Gabon relinquished the license in 2011. Studies are underway
to shoot a seismic survey on the Nziembou license and drill
an exploration well on the Mutamba license in 2012.
(1) Total Gabon is a Gabonese company whose shares are listed on Euronext Paris. TOTAL holds 58.28%, the Republic of Gabon holds 25% and the public float is 16.72%.
18
TOTAL. Registration Document 2011
Business overview 2
Upstream
In Kenya, TOTAL acquired in September 2011 a 40% stake in five
offshore licenses in the Lamu Basin: L5, L7, L11a, L11b and L12.
This transaction has been approved by the Kenyan authorities.
– The divestment of 10% of the Group’s stakes held through
the joint venture operated by Shell Petroleum Development
Company (SPDC) in Blocks OML 26 and 42 has been finalized.
In Libya, the Group’s production was 20 kb/d in 2011, compared
to 55 kb/d in 2010 and 60 kb/d in 2009. Events in the country
forced the entire industry to stop production and freeze development.
Depending on the field, production was suspended from late
February or early March 2011. The new EPSA IV contracts came
into effect in 2010. At that time, the contract zones in which TOTAL
is a partner were redefined: 15, 16 & 32 (formerly C 137, 75%(1)),
70 & 87 (formerly C 17, 75%(1)), 129 & 130 (formerly NC 115, 30%(1))
and 130 & 131 (formerly NC 186, 24%(1)).
– In offshore zones 15, 16 and 32, production resumed in
September 2011 and reached its former level within a few days.
Exploration work is expected to restart in 2012.
– In onshore zones 70 and 87, production resumed in January 2012.
It will gradually be ramped back up to plateau level.
In addition, the Group expects to continue the development
of the Dahra and Garian fields.
– In onshore zones 129, 130 and 131, production resumed
in October 2011. A return to plateau level production is expected
during 2012. The seismic campaign started before the events
is expected to resume by the end of 2012.
– In the onshore Murzuk Basin, following a successful appraisal
well drilled on the discovery made on a portion of Block NC 191
(100%(1), operator), a development plan was submitted to the
authorities in 2009. After the interruption related to the events,
discussions with the authorities have resumed.
In Madagascar, TOTAL acquired in 2008 a 60% stake in
the Bemolanga license (operator), to appraise the oil sand
accumulations it contains. The appraisal phase did not confirm
the feasibility of the mining development of the resources. However,
the contract was extended by one year until June 2012 to assess
the conventional exploration potential of the license.
In Mauritania, TOTAL has exploration operations on the Ta7
and Ta8 licenses (60%, operator), located in the Taoudenni Basin.
In January 2012, TOTAL (90%, operator) acquired interests in two
exploration licenses: Block C9 in ultra-deep offshore, and Block
Ta29 onshore in the Taoudenni Basin.
– On the Ta7 license, a 1,220 km 2D seismic survey was shot
in 2011 and is being interpreted.
– On the Ta8 license, drilling of the exploration well ended in 2010.
Results from the well were disappointing.
– On the C9 and Ta29 licenses, a seismic acquisition campaign
is planned as the first phase of the exploration program.
In Nigeria, the Group’s production was 287 kboe/d in 2011,
compared to 301 kboe/d in 2010 and 235 kboe/d in 2009. TOTAL
has been present in Nigeria since 1962. It operates seven production
licenses (OML) out of the forty-four in which it has a stake, and two
exploration licenses (OPL) out of the eight in which it has a stake.
The Group is also active in LNG through Nigeria LNG and the Brass
LNG project. With regard to recent changes in acreage:
– In 2011, TOTAL (operator) increased its stake from 45.9%
to 48.3% in Block 1 of the Joint Development Zone,
administered jointly by Nigeria and São Tomé and Principe.
(1) TOTAL’s stake in the foreign consortium.
– TOTAL owns 15% of the Nigeria LNG gas liquefaction plant,
located on Bonny Island, with an overall LNG capacity
of 22.7 Mt/y. In 2011, the plant’s operating rate continued
to increase and reached 81%, compared to 72% in 2010
and 50% in 2009, mainly due to the increased reliability of gas
deliveries from the other suppliers.
Preliminary work continued in 2011 prior to launching the Brass
LNG gas liquefaction plant project (17%), which calls for the
construction of two trains, each with a capacity of 5 Mt/y.
Calls for tenders for the construction of the plant and loading
facilities are underway.
– TOTAL continues its efforts to strengthen its ability to supply
gas to the LNG projects in which it owns a stake and to meet
the growing domestic demand for gas:
- On the OML 136 license (40%), the positive results for the Agge 3
appraisal well confirmed the development potential of the license.
Development studies are underway.
- As part of its joint venture with the Nigerian National Petroleum
Company (NNPC), TOTAL is continuing with the project
to increase the production capacity of the OML 58 license
(40%, operator) from 370 Mcf/d to 550 Mcf/d of gas in 2012.
A second phase of this project is expected to allow the
development of other resources through these facilities.
- On the OML 112/117 licenses (40%), TOTAL continued
development studies in 2011 for the Ima gas field.
– On the OML 102 license (40%, operator), TOTAL confirmed the
launch of the Ofon phase 2 project in 2011 with the signing of the
main construction contracts, with production start-up scheduled
for 2014. In 2011 the Group also discovered Etisong North,
located 15 km from the Ofon field, which is currently producing.
This is the second exploration well on the Etisong hub after the
Etisong Main discovery made in 2008. The exploration campaign is
expected to continue with two additional wells in 2012.
– On the OML 130 license (24%, operator), the Akpo field, which
started up in March 2009, reached plateau production of
225 kboe/d in 2010. Production was limited between March and
September 2011 by a technical issue on the engine of the gas
reinjection compressor (liquids production of 160 kb/d instead
of 190 kb/d). On this license, the Group is actively working on the
Egina field, for which a development plan has been approved by
the Nigerian authorities. Calls for tender are underway and
construction is expected to start in 2012.
– On the OML 138 license (20%, operator), TOTAL finalized the
development of the Usan offshore project (180 kb/d, production
capacity), with the drilling of production wells, installation of sub-
sea equipment and connection to the FPSO. Production started
up in February 2012.
– TOTAL also strengthened its deep offshore position with the
ongoing development of the Bonga Northwest project on the OML
118 license (12.5%).
Due to the relative calm with regard to safety in the Niger Delta
region in 2011, it has been possible to maintain oil production
operated by the SPDC joint venture, in which TOTAL has a 10%
stake, at close to 2010 levels. The SPDC joint venture’s gas
Registration Document 2011. TOTAL
19
2 Business overview
Upstream
production was higher in 2011 as a result of the contribution of
the Gbaran-Ubie project, which started up in 2010.
In Uganda, TOTAL finalized in February 2012 its farm-in for an
interest of 33.33%, which covers the EA-1 and EA-2 licenses as
well as the new Kanywataba license and the Kingfisher production
license. All of these licenses are located in the Lake Albert region,
where oil resources have already been discovered and a substantial
potential remains to be explored.
TOTAL will be the operator of EA-1 and partner on the other
licenses. TOTAL and its partners Tullow and CNOOC are embarking
on an ambitious exploration and appraisal program from 2012
onwards. First priority will be given to the exploration of
Kanywataba and EA-1 licenses west of the Nile.
In the Republic of the Congo, the Group’s production was 123 kboe/d
in 2011, compared to 120 kboe/d in 2010 and 106 kboe/d in 2009.
– On the Moho Bilondo field (53.5%, operator), which started up
in April 2008, drilling of development wells continued until 2010.
The field reached plateau production of 90 kboe/d in June 2010.
Two positive appraisal wells (Bilondo Marine 2 & 3) drilled at year-
end 2010 in the southern portion of the field confirmed an additional
growth potential as an extension of existing facilities. Studies
are underway for the development of these additional reserves.
The development of the resources in the northern portion
of the field, the potential of which was bolstered by appraisal
and exploration wells drilled in 2008 and 2009, is also being
examined (Moho North project).
– Production on Libondo (65%, operator), which is part
of the Kombi-Likalala-Libondo operating license, started up
in March 2011. Plateau production has reached 12 kb/d.
A substantial portion of the equipment was sourced locally in
Pointe-Noire through the redevelopment of a construction site that
had been idle for several years.
In the Democratic Republic of the Congo, following the Presidential
decree approving TOTAL’s entry as operator with a 60% interest in
Block III of the Graben Albertine, the exploration permit was issued in
January 2012 by the Minister of Hydrocarbons for a period of three
years. This block is located in the Lake Albert region.
In the Republic of South Sudan, which became an independent
state on July 9, 2011, TOTAL holds an interest in Block B and
is preparing with state authorities the resumption of exploration
activities on this block.
2.3.2. North America
In 2011, TOTAL’s production in North America was 67 kboe/d,
representing 3% of the Group’s overall production, compared
to 65 kboe/d in 2010 and 24 kboe/d in 2009.
In Canada, TOTAL signed in December 2010 a strategic partnership
with Suncor related to the Fort Hills and Joslyn mining projects and
the Voyageur upgrader. The partnership was finalized in March 2011
and allows TOTAL to reorganize around two major hubs the different
oil sands assets that it has acquired over the last few years: on the
one hand, a Steam Assisted Gravity Drainage (SAGD) hub focused
on Surmont’s (50%) ongoing development and, on the other hand,
a mining and upgrading hub, which includes the TOTAL-operated
Joslyn (38.25%) and Suncor-operated Fort Hills (39.2%) mining
projects and the Suncor-operated Voyageur upgrader (49%) project.
The Group also has a 50% stake in the Northern Lights mining
project (operator) and 100% of a number of oil sands leases acquired
through several auction sales. In 2011, the Group’s production
was 11 kb/d, compared to 10 kb/d in 2010 and 8 kb/d in 2009.
– On the Surmont lease, commercial production in SAGD mode
of the first development phase, which started up in late 2007,
is now producing around 25 kb/d of bitumen from thirty-five well
pairs. The operator plans to drill additional wells in 2012 and
to continue to convert the activation method on the existing
wells from gas lift to electric submersible pump (ESP) in order
to improve production.
In early 2010, the partners of the project decided to launch
the construction of the second development phase. The goal
of production start-up from Surmont Phase 2 has been set
for 2015 and overall production capacity from the field is
expected to increase to 130 kb/d. In April 2011, the authorities
issued a license permitting production (phases 1 and 2) of up
to 136 kb/d.
– The Joslyn lease is expected to be developed through mining,
with a first development phase having an anticipated capacity
of 100 kb/d.
The basic engineering for the Joslyn North Mine started
in March 2010. To take into account changes to the project following
the partnership with Suncor, the revision of the basic engineering
is expected to be finalized in 2012. A decision to launch the project
is planned for 2013.
Public hearings that are necessary for the project to be approved
by the Canadian authorities were held in autumn 2010. The project
was recommended as being in the public interest in January 2011,
and approval from the Alberta authorities (Order in Council, OIC)
was obtained in April 2011. The provincial authorizations from
the Energy Resources Conservation Board (ERCB) and Alberta
Environment were also obtained in May and September 2011,
respectively. The project received federal approval (Federal OIC
and approval from the Canadian Ministry of the Environment) at
the end of 2011. As a result, preliminary site preparation work
began in early 2012 and production is scheduled to start in 2018.
– TOTAL closed in September 2010 the acquisition of UTS and its
main asset: a 20% stake in the Fort Hills lease. In December 2010,
as part of their partnership, TOTAL acquired from Suncor an
additional 19.2% stake in the lease, thereby increasing its stake to
39.2%. Basic engineering and site preparation work are underway.
Start-up of the Fort Hills mining project, which has already been
approved by the relevant authorities for a first development phase
with a capacity of 160 kb/d, is expected in 2016.
– TOTAL had also acquired in late December 2010 a 49% stake
in Suncor’s Voyageur upgrader project. This Voyageur upgrader
project, which Suncor mothballed at year-end 2008, resumed
in 2011 and is expected to start up concurrently with the Fort
Hills project. As a consequence, the Group has abandoned
its upgrader project in Edmonton.
– In 2008, the Group closed the acquisition of Synenco, the two
principal assets of which are a 60% stake in the Northern Lights
project and 100% of the adjacent McClelland lease. In early 2009,
the Group sold to Sinopec, the other partner in the project,
a 10% stake in the Northern Lights project and a 50% stake
in the McClelland lease, reducing its equity stake in each
of the assets to 50%. The Northern Lights project is expected
to be developed through mining.
20
TOTAL. Registration Document 2011
Business overview 2
Upstream
In the United States, the Group’s production was 56 kboe/d
in 2011, compared to 55 kboe/d in 2010 and 16 kboe/d in 2009.
– In the Gulf of Mexico:
- The deep-offshore Tahiti oil field (17%) started producing
in 2009 and reached production of 135 kboe/d. Phase 2,
which was launched in September 2010, comprises drilling
four injection wells and two producing wells. Water injection
started in February 2012. This phase should partly offset
the production decline seen on wells currently in production.
- Development of the first phase of the deep-offshore Chinook
project (33.33%) is ongoing. The production test is scheduled
to start in mid-2012 after sub-sea work carried out following
an incident on one of the risers.
- In 2009, TOTAL and Cobalt had signed an agreement related
to the merger of their deep offshore acreage, with Cobalt
operating the exploration phase. The TOTAL (40%) - Cobalt
(60%, operator) alliance’s exploratory drilling campaign
was launched in 2009 and the drilling of the first three wells
produced disappointing results. This campaign was disrupted
due to the U.S. government’s moratorium on offshore drilling
operations from May to October 2010 and resumed at the
beginning of 2012 with the start of drilling of the Ligurian 2 well.
- In April 2010, the Group disposed of its equity stakes in
the Matterhorn and Virgo operated fields.
– Following the signature of an agreement in late 2009, a joint
venture was set up with Chesapeake to produce shale gas
in the Barnett Shale Basin, Texas. Under this joint venture,
TOTAL owns 25% of Chesapeake’s portfolio in the area. In 2011,
approximately 300 additional wells were drilled, enabling gas
production reaching 1.4 Bcf/d in 100% at the end of 2011.
Engineers from TOTAL are assigned to the teams led by Chesapeake.
– At the end of 2011, TOTAL signed an agreement with Chesapeake
and EnerVest to enter into a joint venture. Pursuant to the agreement,
TOTAL acquired a 25% share in Chesapeake’s and EnerVest’s
liquid-rich area of the Utica shale play (Ohio). At the end of 2011,
thirteen wells have been drilled across the acreage with very
promising results seen from each well in terms of productivity
and liquid content.
– In 2009, the Group closed the acquisition of a 50% stake in American
Shale Oil LLC (AMSO) to develop shale oil technology. The pilot
to develop this technology is underway in Colorado.
In Mexico, TOTAL is conducting various studies with state-owned
PEMEX under a general technical cooperation agreement renewed
in July 2011 for a period of five years.
2.3.3. South America
In 2011, TOTAL’s production in South America was 188 kboe/d,
representing 8% of the Group’s overall production, compared
to 179 kboe/d in 2010 and 182 kboe/d in 2009.
In Argentina, where TOTAL has been present since 1978, the Group
operates 30%(1) of the country’s gas production. The Group’s
production was 86 kboe/d in 2011, compared to 83 kboe/d
in 2010 and 80 kboe/d in 2009.
– In Tierra del Fuego, the Group notably operates the Carina
and Aries offshore fields (37.5%). The award of the contracts
to build the offshore facilities for the development of the Vega
Pleyade gas and condensates field is scheduled for 2012.
The project is scheduled to start production in 2014 and should
make it possible to maintain the production operated by the
Group in Tierra del Fuego at around 615 Mcf/d.
– In the Neuquén Basin, TOTAL started a drilling campaign in 2011
on its operated licenses in order to assess their shale gas
potential. The campaign, which started on the Aguada Pichana
(27.3%, operator) and San Roque (24.7%, operator) fields,
will be extended subsequently to the Rincon la Ceniza and
La Escalonada licenses acquired in 2010 (85%, operator)
and to the four fields acquired in 2011: Aguada de Castro
(42.5%, operator), Pampa de la Yeguas II (42.5%, operator),
Cerro Las Minas (40%) and Cerro Partido (45%).
The connection of satellite discoveries on the edge of the main
Aguada Pichana field, particularly in the Las Carceles canyons
area, and the increase in compression capacity at San Roque,
have extended plateau production of the mature fields in these
two blocks.
In Bolivia, the Group’s production, primarily gas, amounted to
25 kboe/d in 2011, compared to 20 kboe/d in 2010 and 2009.
TOTAL has stakes in six licenses: three producing licenses – San Alberto
and San Antonio (15%) and Block XX Tarija Oeste (41%), and three
licenses in the exploration or appraisal phase – Aquio and Ipati
(80%, operator) and Rio Hondo (50%).
– Production started up in February 2011 on the gas and condensates
Itaú field located on Block XX Tarija Oeste; it is routed to the existing
facilities of the neighboring San Alberto field. A development plan
for a second phase at Itaú was approved by the local authorities
in June 2011. In early 2011, TOTAL decreased its stake in
Block XX Tarija Oeste to 41% after divesting 34% and is no
longer the operator.
– In 2004, TOTAL discovered the Incahuasi gas field on the Ipati
Block. Following the interpretation of the 3D seismic shot in 2008,
an appraisal well was drilled on the adjacent Aquio Block and the
extension of the discovery to the north was confirmed in 2011.
Due to the positive results from the well, TOTAL filed a declaration
of commerciality for the Aquio and Ipati Blocks, which was approved
by the local authorities in April 2011. Additional appraisal work
is underway, notably with the drilling of a second well on the Ipati
Block in 2012.
– In 2010, TOTAL signed an agreement to dispose of 20%
in the Aquio and Ipati licenses to Gazprom. Following approval
of the agreement by the Bolivian authorities, TOTAL will have
a 60% stake in the licenses.
In Brazil, TOTAL has equity stakes in three exploration blocks:
Blocks BC-2 (41.2%) and BM-C-14 (50%) in the Campos Basin,
and Block BM-S-54 (20%) in the Santos Basin.
– The Xerelete field is mainly located on Block BC2, with an extension
on Block BM-C-14. A unitization agreement was finalized
by the partners on both blocks and submitted to the authorities
for approval in April 2011.
In 2012, pending the authorities’ approval, TOTAL is expected
to become operator of the unitized Xerelete field. After seismic
reprocessing, a pre-salt prospect was found under the Xerelete
(1) Source: Argentinean Ministry of Federal Planning, Public Investment and Services - Energy Secretary.
Registration Document 2011. TOTAL
21
2 Business overview
Upstream
discovery made in 2001 at a water depth of 2,400 m. TOTAL
is planning to resume drilling activities on the block in 2012.
produces gas dedicated to the domestic market and in the offshore
exploration Block 4, located in the Plataforma Deltana (49%).
– On Block BM-S-54, a first well was drilled in the pre-salt at
the end of 2010 on the Gato do Mato structure, and a significant
oil column was found. The appraisal plan approved by the
authorities in October 2011 includes testing the Gato do Mato
well and, if that test is successful, drilling a second well
on the structure in 2012. As the Gato do Mato structure extends
beyond the boundaries of Block BM-S-54 into a free zone, a draft
unitization agreement has been submitted to the authorities.
At the end of 2011, a second structure (Epitonium) identified on Block
BM-S-54 was drilled. The results of the well are under analysis.
In Colombia, where TOTAL has had operations since 1973,
the Group’s production was 11 kboe/d in 2011, compared to
18 kboe/d in 2010 and 23 kboe/d in 2009. The decline in production
in 2011 was mainly due to the divestment of TOTAL’s stake in
CEPSA, which was finalized in July 2011.
On the Cusiana field (11.6%), production from the project to extract
6 kb/d of LPG started at the end of 2011.
Following the discovery of Huron-1 in 2009 on the Niscota (50%)
exploration license and a 3D seismic survey in 2010, the first appraisal
well has been underway since mid-2011. A second appraisal well
is expected in 2012.
In 2011, TOTAL sold 10% of its stake in the Ocensa oil pipeline
reducing its holding to 5.2%.
In February 2012, TOTAL signed an agreement to sell TEPMA BV.
This wholly-owned affiliate of TOTAL holds the working interest in
the Cusiana field as well as a participation in OAM and ODC
pipelines in Colombia. This transaction is subject to approval by the
relevant authorities.
In French Guiana, TOTAL owns a 25% stake in the Guyane
Maritime license. The license, located about 150 km off the coast,
covers an area of approximately 26,000 km2 in water depths
ranging from 200 to 3,000 m.
Located around 170 km northeast off Cayenne, drilling
of the GM-ES-1 well on the Zaedyus prospect took place in 2011.
The well was drilled at water depths of over 2,000 m and reached a
vertical depth of 5,908 m below sea level. It revealed two
hydrocarbon columns in gravelly reservoirs.
This discovery follows on from the shooting of a 3D seismic survey
covering 2,500 km2 on the eastern zone of the Guyane Maritime license.
An extensive drilling campaign and a further 3D seismic survey are
planned on the license starting in 2012.
In Trinidad & Tobago, where TOTAL has had operations since 1996,
the Group’s production was 12 kboe/d in 2011, compared to 3 kboe/d
in 2010 and 5 kboe/d in 2009. TOTAL holds a 30% stake in
the offshore Angostura field located on Block 2C. Production
started up in May 2011 on Phase 2, which corresponds to the gas
reserves development phase. A drilling campaign on three wells
started in mid-2011 in order to increase oil production. An exploration
well was also drilled in 2011 and revealed additional gas resources.
In Venezuela, where TOTAL has had operations since 1980, the
Group’s production was 54 kboe/d in 2011, compared to 55 kboe/d
in 2010 and 54 kboe/d in 2009. TOTAL has equity stakes in
PetroCedeño (30.323%), which produces and upgrades extra
heavy oil in the Orinoco Belt, in Yucal Placer (69.5%), which
The development phase of the southern portion of the
PetroCedeño field was launched in the second half of 2011.
An additional development phase on the Yucal Placer field to
increase production capacity from 100 Mcf/d to 300 Mcf/d is under
discussion with the authorities.
2.3.4. Asia-Pacific
In 2011, TOTAL’s production in Asia-Pacific was 231 kboe/d,
representing 10% of the Group’s overall production, compared
to 248 kboe/d in 2010 and 251 kboe/d in 2009.
In Australia, where TOTAL has held leasehold rights since 2005,
the Group owns 24% of the Ichthys project, 27.5% of the GLNG
project and nine offshore exploration licenses, including four that
it operates, off the northwest coast in the Browse, Vulcan
and Bonaparte Basins. In 2011, the Group produced 4 kboe/d
due to its stake in GLNG, compared to 1 kboe/d in 2010.
– The Ichthys LNG project is aimed at the development of the
Ichthys gas and condensates field, located in the Browse Basin.
This development includes a floating platform designed for gas
production, treatment and export, an FPSO to stabilize and
export condensates, an 889 km gas pipeline and an onshore
liquefaction plant located in Darwin. The project was launched
in early 2012 following completion of the engineering studies, calls
for tender and subcontractor selection. The LNG has already
been sold under long-term contracts mainly to Asian buyers.
Production capacity is expected to be 8.4 Mt/y of LNG and nearly
1.6 Mt/y of LPG as well as a production of 100 kb/d of condensates
at peak. Production start-up is expected at year-end 2016.
– In late 2010, TOTAL acquired a 20% stake in the GLNG project,
followed by an additional 7.5% stake in March 2011. This integrated
gas production, transport and liquefaction project is based
on the development of coal gas from the Fairview, Roma, Scotia
and Arcadia fields. The final investment decision was made in
January 2011 and start-up is expected in 2015. LNG production
is expected to eventually reach 7.2 Mt/y. The preliminary project
development and engineering work are continuing. The 420 km
pipeline for transporting the gas has received environmental
approval. Off the coast near Gladstone, on Curtis Island, site
preparations have started with civil engineering, dredging and
construction of the initial jetty and the residential compound.
– Following extensive seismic surveying in 2008 and interpretation
of the data in 2009, a drilling campaign on two wells started
in early 2011 on license WA-403 (60%, operator). As one well
demonstrated the presence of hydrocarbons, additional
appraisal work will take place on this block (3D seismic).
Three new exploration wells are planned for 2012-2013 on
license WA-408 (100%, operator).
In Brunei, where TOTAL has been present since 1986, the Group
operates the offshore Maharaja Lela Jamalulalam gas and condensates
field located on Block B (37.5%). The Group’s production was
13 kboe/d in 2011, compared to 14 kboe/d in 2010 and 12 kboe/d
in 2009. The gas is delivered to the Brunei LNG liquefaction plant.
On Block B, the drilling campaign that started in 2009 continued
in 2010 and 2011. Production on the first well started in 2010.
22
TOTAL. Registration Document 2011
Business overview 2
Upstream
The next two wells, which were exploratory, revealed new reserves
in the southern portion of the field, for which development studies
are underway. A fourth well drilled in 2011 in the southern portion
of the field was connected to the production facilities at the end
of the year. A ten-year extension of the mining rights period was
recently granted by the Brunei government.
On deep-offshore exploration Block CA1 (54%, operator), formerly
Block J, exploration operations that had been suspended since
May 2003 due to a border dispute between Brunei and Malaysia
resumed in September 2010. A seismic survey started before
the summer of 2011 and an initial campaign of three drillings
started in October 2011.
In China, the Group has had operations since 2006 on the South
Sulige Block, located in the Ordos Basin in the Inner Mongolia province.
Following appraisal work by TOTAL, China National Petroleum
Corporation (CNPC) and TOTAL agreed in November 2010
to submit to the authorities for approval a development plan under
which CNPC is the operator and provides the benefit of its experience
in developing Great Sulige. TOTAL has a 49% stake and provides
support in its areas of expertise.
The authorities gave the operator permission to undertake
preliminary development work in the spring of 2011. Drilling
operations started and additional 3D seismic data was shot in
2011 in preparation for the upcoming drilling campaigns.
Start-up of production is expected in 2012.
In Indonesia, where TOTAL has had operations since 1968,
the Group’s production was 158 kboe/d in 2011, compared
to 178 kboe/d in 2010 and 190 kboe/d in 2009.
TOTAL’s operations in Indonesia are primarily concentrated on
the Mahakam permit (50%, operator), which covers in particular
the Peciko and Tunu gas fields. TOTAL also has a stake in the Sisi-Nubi
gas 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 of the Bontang plant is 22 Mt/y.
In 2011, gas production operated by TOTAL amounted to
2 227 Mcf/d. The gas operated and delivered by TOTAL accounted
for nearly 80% of Bontang LNG’s supply. In addition to gas production,
operated condensates and oil production from the Handil and
Bekapai fields amounted to 59 kb/d and 23 kb/d, respectively.
– On the Mahakam permit:
- In 2011, the scheduled drilling of additional wells in the main
reservoir of the Tunu field continued with increasing density.
The second phase of drilling development wells to discover
shallow gas reservoirs has started.
- On the Peciko field, Phase 7 drilling, which started in 2009,
is continuing.
- The development of South Mahakam, which includes the
Stupa, West Stupa and East Mandu fields, is ongoing.
Start-up of production is expected in early 2013.
– On the Sisi-Nubi field, which began production in 2007, drilling
operations continue within the framework of a second phase of
development. The gas from Sisi-Nubi is produced through Tunu’s
processing facilities.
– In October 2010, TOTAL closed the acquisition of a 15% stake
in the Sebuku permit, where the gas field Ruby was discovered.
Development of the field, with the aim of producing 100 Mcf/d
of natural gas, started in February 2011. Production start-up is
scheduled for the end of 2013.
– On the Southeast Mahakam exploration block (50%, operator),
the first exploration well (Trekulu 1) completed at the end of 2010
produced negative results.
– In May 2010, the Group acquired a 24.5% stake in two
exploration blocks - Arafura and Amborip VI - located in the
Arafura Sea. Two wells were drilled on these blocks in late
2010/early 2011. The results were negative.
– In September 2011, TOTAL signed an agreement to acquire
a stake in three exploration blocks located in the southern
Makassar Strait (Sageri, 50%, South Sageri, 35% and
Sadang, 20%). A first well was drilled on the Sageri block at
the end of 2011.
– In September 2011, TOTAL also signed an agreement to acquire a
stake in an exploration block located in the southern Makassar Strait
(South Mandar, 33%). Under the agreement, the Group acquired
additional 10% stakes in the South Sageri and Sadang blocks.
– In May 2011, TOTAL acquired a 100% stake in the South West
Bird’s Head exploration block. The block is located onshore and
offshore in the Salawati Basin, in the province of West Papua.
– The Group signed a production sharing agreement in
March 2011, for a 50% stake in a coal bed methane (CBM) field
on the Kutai Timur Block in East Kalimantan province.
In the autumn of 2010, the Group signed an agreement with the
consortium Nusantara Regas (Pertamina-PGN) for the delivery
of 11.75 Mt of LNG over the period 2012-2022 to a re-gasification
terminal located near Jakarta. The first deliveries are expected in
the second quarter of 2012.
In Malaysia, TOTAL signed a production sharing agreement
in 2008 with state-owned Petronas for the offshore exploration
Blocks PM303 and PM324. Following the seismic studies
performed in 2009 and 2010, TOTAL withdrew from offshore
exploration Block PM303 in early 2011. Exploration work
continued on Block PM324 (50%, operator); initial drilling in high
pressure/high temperature conditions started in October 2011
and continues in 2012.
TOTAL also signed in November 2010 a new production sharing
agreement with Petronas for the deep offshore exploration
Block SK 317 B (85%, operator) located off the state of
Sarawak. 3D seismic surveys have been carried out on the zone.
The results should be available shortly.
In Myanmar, the Group’s production was 15 kboe/d in 2011,
compared to 14 kboe/d in 2010 and 13 kboe/d in 2009. TOTAL
operates the Yadana field (31.2%), located on offshore Blocks M5
and M6, which produces gas that is delivered primarily to PTT
(the Thai state-owned company) to be used in Thai power plants.
The Yadana field also supplies the domestic market via a land
pipeline and, since June 2010, via a sub-sea pipeline built and
operated by Myanmar’s state-owned company MOGE.
In Thailand, the Group’s production was 41 kboe/d in 2011
and 2010, compared to 36 kboe/d in 2009. This comes from
the Bongkot (33.33%) offshore gas and condensates field.
PTT purchases all of the natural gas and condensates production.
– On the northern portion of the Bongkot field, the 3H (three
wellhead platforms) development phase came onstream in
Registration Document 2011. TOTAL
23
2 Business overview
Upstream
early 2011. New investments are being made to meet gas
demand and maintain plateau production:
- phase 3J (two well platforms) was launched in late 2010 with
start-up scheduled for 2012;
- phase 3K (two well platforms) was approved in
September 2011 with start-up scheduled for 2013; and
- the second low-pressure compressor installation phase to
increase gas production was completed in the first quarter of
2012.
– The southern portion of the field (Greater 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. Construction of the facilities
started in 2009 and accelerated in 2011 with the installation
of the residential and gas processing platforms in August.
Production is expected to start in the spring of 2012, with a
capacity of 350 Mcf/d.
In Vietnam, TOTAL holds a 35% stake in the production sharing
agreement for the offshore 15-1/05 exploration block following
an agreement signed in 2007 with PetroVietnam. Two oil
discoveries were made on the southern portion of the block,
one in November 2009 and the other in October 2010. The results
from the additional wells drilled on these discoveries between
November 2010 and October 2011 are being assessed.
In 2009, TOTAL and PetroVietnam signed a production sharing
agreement for Blocks DBSCL-02 and DBSCL-03. The onshore
blocks, located in the Mekong Delta region, are held by TOTAL
(75%, operator) and PetroVietnam (25%). Based on the seismic
information obtained in 2009 and 2010, the partners have decided
not to continue the exploration work.
2.3.5. Commonwealth of Independent States
(CIS)
In 2011, TOTAL’s production in the CIS was 119 kboe/d,
representing 5% of the Group’s overall production,
compared to 23 kboe/d in 2010 and 24 kboe/d in 2009.
In Azerbaijan, where TOTAL has had operations since 1996,
production was 14 kboe/d in 2011, compared to 13 kboe/d
in 2010 and 12 kboe/d in 2009. The Group’s production comes
from the Shah Deniz field (10%). TOTAL also holds a 10% stake in
South Caucasus Pipeline Company, owner of the South Caucasus
Pipeline (SCP) gas pipeline that transports the gas produced in
Shah Deniz to the Turkish and Georgian markets. TOTAL also holds
a 5% stake in BTC Co., owner of the Baku-Tbilisi-Ceyhan (BTC) oil
pipeline, which connects Baku and the Mediterranean Sea.
In 2009, TOTAL and state-owned SOCAR signed an exploration,
development and production sharing agreement for a license
located on the Absheron block in the Caspian Sea. TOTAL (40%) is
the operator during the exploration phase and a joint operating
company will manage operations during the development phase.
Drilling of an exploratory well started in early 2011. In
September 2011, the well showed the existence of a substantial
gas accumulation. The well will be tested in 2012.
Gas deliveries to Turkey and Georgia from the Shah Deniz field
continued throughout 2011, at a lower pace for Turkey due to
weaker demand than initially forecast. Conversely, SOCAR took
greater quantities of gas than provided for by the agreement.
Development studies and business negotiations for the sale of
additional gas needed to launch a second development phase
in Shah Deniz continued in 2011. In October 2011, SOCAR and
Botas, a Turkish state-owned company, signed an agreement
on the sale of additional gas volumes and the transfer conditions
for volumes intended for the European market. The agreement is
expected to enable the start of FEED studies for this second phase
in the first quarter of 2012, although some of the commercial
provisions of the agreement have yet to be finalized.
In Kazakhstan, TOTAL has owned since 1992 a stake in the North
Caspian license, which covers the Kashagan field in particular.
The Kashagan project is expected to be developed in several
phases. 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. The consortium continues to target first
production by year-end 2012.
In October 2008, the members of the North Caspian Sea
Production Sharing Agreement (NCSPSA) consortium and the
Kazakh authorities signed agreements to end the disagreement that
began in August 2007. Their implementation 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 in January 2009. NCOC supervises and
coordinates NCSPSA’s operations.
In Russia, where TOTAL has had operations through its subsidiary
since 1991, the Group’s production was 105 kboe/d in 2011,
compared to 10 kboe/d in 2010 and 12 kboe/d in 2009. This
comes from the Kharyaga field (40%, operator) and TOTAL’s stake
in Novatek.
– In 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. Under this
agreement, Shtokman Development AG (TOTAL, 25%) was
created in 2008 to design, build, finance and operate this first
development phase, with estimated overall production capacity
of 23.7 Bm3/y (0.4 Mboe/d). Engineering studies are underway
for the portion of the project that will allow the transport of gas
by pipeline through the Gazprom network (offshore development,
gas pipeline and onshore gas and condensates processing
facilities on the Teriberka site) and for the LNG part of the project,
which 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 late 2009, TOTAL closed the acquisition from Novatek of
a 49% stake in Terneftegas, which holds a development and
production license on the onshore Termokarstovoye field.
An appraisal well was drilled in 2010. The results of this well
and of the pre-project studies allowed for the final investment
decision to be made at year-end 2011.
– On the Kharyaga field, work related to the development plan
of phase 3 is ongoing. This development plan is intended to
maintain plateau production at the 30 kboe/d (in 100%) level
reached in late 2009. TOTAL sold 10% of the field to state-owned
Zarubezhneft in January 2010, thereby decreasing its interest
to 40%.
– In the autumn of 2009, TOTAL signed an agreement setting
forth the principles of a partnership with KazMunaiGas (KMG)
for the development of the Khvalynskoye gas and condensates
field, located offshore in the Caspian Sea on the border between
Kazakhstan and Russia, under Russian jurisdiction. Gas production
24
TOTAL. Registration Document 2011
Business overview 2
Upstream
is expected to be transported to Russia. Pursuant to this
agreement, TOTAL is planning to acquire 17% of KMG’s share.
– In March 2011, TOTAL and the Russian listed company Novatek
signed a strategic partnership agreement pursuant to which
TOTAL acquired a 12.09% stake in Novatek in April 2011, with
the intention of both parties for TOTAL to increase its holding
to 15% within 12 months and 19.40% within three years. In
December 2011, TOTAL increased its stake in Novatek by 2%
to 14.09%.
– In October 2011, TOTAL and Novatek signed the final
agreements for the joint development of the Yamal LNG project.
With a 20% stake, TOTAL has become Novatek’s main
international partner in the gas liquefaction project. Novatek,
which will retain a 51% stake, intends to dispose of the
remaining 29% to other partners. The Yamal LNG project covers
the development of the South Tambey gas and condensates
field, located on the Yamal Peninsula in the Arctic.
2.3.6. Europe
In 2011, TOTAL’s production in Europe was 512 kboe/d,
representing 22% of the Group’s overall production,
compared to 580 kboe/d in 2010 and 613 kboe/d in 2009.
In Denmark, TOTAL has owned since June 2010 an 80% stake
in and the operatorship for licenses 1/10 (Nordjylland) and 2/10
(Nordsjaelland, formerly Frederoskilde). These onshore licenses,
the shale gas potential of which has yet to be assessed, cover
areas of 3,000 km2 and 2,300 km2, respectively. Following
geoscience surveys on license 1/10 in 2011, the decision was
made to drill a well during the second half of 2012. Geoscience
surveys are ongoing on license 2/10.
In France, the Group’s production was 18 kboe/d in 2011,
compared to 21 kboe/d in 2010 and 24 kboe/d in 2009. TOTAL’s
major assets are the Lacq (100%) and Meillon (100%) gas fields,
located in the southwest part of the country.
On the Lacq field, operated since 1957, a carbon capture and
storage pilot was commissioned in January 2010, and carbon
injection is expected to continue until 2013. 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. For additional information,
see Chapter 12.
Agreements were signed in December 2011 for the sale of the
Itteville, Vert-le-Grand, Vert-le-Petit, La Croix Blanche, Dommartin
Lettrée and Vic-Bilh assets. Operatorship and production rights for
these assets were transferred in January 2012.
The Montélimar exclusive exploration license, awarded to TOTAL in
March 2010 (100%) to assess, in particular, the shale gas potential
of the area, was revoked by the government in October 2011.
This revocation stemmed from the law of July 13, 2011, prohibiting
the exploration and extraction of hydrocarbons by drilling followed
by hydraulic fracturing. The Group had, however, submitted the
required report to the government, in which it undertook not to use
hydraulic fracturing in light of the current prohibition. An appeal has
therefore been filed in December 2011 with the administrative court
requesting that the judge cancel the revocation of the license.
In Italy, the Tempa Rossa field (75%, operator), discovered in 1989
and located on the unitized Gorgoglione concession (Basilicate
region), is one of TOTAL’s principal assets in the country.
In 2011, Total Italia acquired an additional 25% in the Tempa
Rossa field, bringing its stake to 75%, as well as shares in two
exploration licenses.
Site preparation work started in early August 2008, but the
proceedings initiated by the Prosecutor of the Potenza Court against
Total Italia led to a freeze in the preparation work (for additional
information, see Chapter 7, Legal and arbitration proceedings).
New calls for tenders were launched related to certain contracts that
had been cancelled. Drilling of the Gorgoglione 2 appraisal well that
started in June 2010 reached its final depth, confirming the results
of the other wells. It is expected to be tested in 2012. The extension
plan for the Tarente refinery export system, needed for the
development of the Tempa Rossa field, was submitted to the Italian
authorities in May 2010 and approved at the end of 2011.
Site preparation work began and start-up of production is expected
in 2015 with a capacity of 55 kboe/d.
In Norway, where the Group has had operations since the
mid-1960s, TOTAL has equity stakes in eighty production licenses
on the Norwegian continental shelf, seventeen of which it operates.
Norway is the largest single-country contributor to the Group’s
production, with volumes of 287 kboe/d in 2011, compared to
310 kboe/d in 2010 and 327 kboe/d in 2009.
– In the Norwegian North Sea, where numerous development
projects have recently been launched, the Group’s production
was 205 kboe/d in 2011. The most substantial contribution to
production, for the most part non-operated, comes from the
Greater Ekofisk Area (Ekofisk, Eldfisk, Embla, etc.).
– Several projects are underway on the Greater Ekofisk Area,
located in the south. The Group owns a 39.9% stake in the
Ekofisk and Eldfisk fields. The Ekofisk South and Eldfisk 2
projects were launched in June 2011 following approval of the
development and operation plans by the authorities. The project
relating to the construction and installation of the new Ekofisk
living quarters and utilities platform is now in its second year.
– On the Greater Hild Area, located in the north and in which the
Group has a 51% stake (operator), the Hild development scheme
was selected at the end of 2010. The development and
operation plan has been submitted to the authorities in
early 2012. Approval is expected in 2012, with production
start-up scheduled for 2016.
– A number of successful exploration and appraisal activities were
carried out in the North Sea in the 2009-2011 period. These
activities have led to the launch of several development projects,
which are already underway or for which approval by the
authorities is expected in 2012:
- In the central section of the North Sea, on license PL102C
(40%, operator), a fast-track development project has been
launched for the Atla field (formerly known as David), which
was discovered in 2010. Start-up of gas production is
expected in late 2012.
- Gas production on the Beta West field (a satellite of
Sleipner, 10%), located in the central section of the North Sea,
started in April 2011.
- In the Visund area of the Nordic North Sea on license PL120
(7.7%), the Visund South fast-track development project for
the Pan/Pandora discoveries is underway. Start-up of
production is expected in 2012.
Registration Document 2011. TOTAL
25
2 Business overview
Upstream
- The Stjerne project was launched in 2011 to develop the Katla
structure discovered in 2009, located on license PL104 (10%)
south of Oseberg in the Nordic North Sea. Start-up of oil
production is expected in 2013.
- The fast-track development project for the Vigdis North East
structure (PL089, 5.6%), discovered in 2009 and located south
of Snorre, was launched in 2011. It will also allow for enhanced
hydrocarbon recovery from the nearby Vigdis East field.
Start-up of oil production is expected in late 2012.
- A positive appraisal well was drilled in 2010 on the southern
slope of the Dagny-Ermintrude structure (6.54%) north of
Sleipner. Approval of the development project is expected
at the end of 2012 and production is scheduled to start in
late 2016.
– 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%). Morvin started up in August 2010 as planned,
with two producing wells. In 2011, the Group’s production in
the Haltenbanken area was 63 kboe/d.
The partners decided to go ahead with the Åsgard sub-sea
compression project, which will increase hydrocarbon recovery
on the Åsgard and Mikkel fields, and the development and
operation plan has been submitted to the authorities.
In 2011, TOTAL successfully drilled an exploration well on the
Alve North structure on license PL127 (50%, operator) near the
Norne field.
– In the Barents Sea, LNG production on Snøhvit (18.4%) started
in 2007. This project includes development of the Snøhvit,
Albatross and Askeladd natural gas fields, as well as the
construction of the associated liquefaction facilities. Due to
design problems, the plant experienced reduced capacity during
the start-up phase. A number of maintenance turnarounds were
scheduled to address the issue and the plant is now operating
at its design capacity (4.2 Mt/y). In 2011, the Group’s production
was 19 kboe/d.
In 2011, TOTAL drilled a positive exploration well on the Norvarg
structure in the Barents Sea on license PL535 (40%, operator),
which was awarded during the twentieth licensing round.
The Group improved its asset portfolio in Norway by obtaining new
licenses and divesting a number of non-strategic assets:
– In 2011, TOTAL obtained four new exploration licenses during
licensing round APA 2010 (Awards in Predefined Areas), including
one as operator. The Group also acquired in 2011 a 40% stake
and the role of operator of license PL554, north of Visund. Drilling
of an exploration well is expected on the license in 2012. At the
beginning of 2012, during licensing round APA 2011, TOTAL
obtained eight new licences, including five as operator.
– In 2010, the Group divested its stake in the Valhall/Hod fields.
– In June 2011, TOTAL announced that it had signed an
agreement for the planned sale of its entire stake in Gassled
(6.4%) and the associated entities. The sale was effective at
the end of 2011.
In the Netherlands, TOTAL has had natural gas exploration and
production operations since 1964 and currently owns twenty-four
offshore production licenses, including twenty that it operates, and
two offshore exploration licenses, E17c (16.92%) and K1c (30%).
In 2011, the Group’s production was 38 kboe/d, compared to
42 kboe/d in 2010 and 45 kboe/d in 2009.
– The K5CU development project (49%, operator) was launched
in 2009 and production started up in early 2011. This development
includes four wells supported by a platform that was installed in
2010 and connected to the K5A platform by a 15 km gas pipeline.
– The K4Z development project (50%, operator) began in 2011.
This development is comprised of two sub-sea wells connected
to the existing production and transport facilities. Start-up of
production is expected in early 2013.
In late 2010, TOTAL disposed of 18.19% of its equity stake in the
NOGAT gas pipeline and decreased its stake to 5%.
In Poland, at the end of March 2011, TOTAL signed an agreement
to acquire a 49% stake in the Chelm and Werbkowice exploration
concessions in order to assess their shale gas potential. On the
Chelm license, drilling has taken place, the well has been tested
and the results from the well are being examined.
In the United Kingdom, where TOTAL has had operations
since 1962, the Group’s production was 169 kboe/d in 2011,
compared to 207 kboe/d in 2010 and 217 kboe/d in 2009.
Around 90% 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, start-up of satellite fields or new reservoir
compartments allowed production to be maintained. The N52
well drilled on Alwyn (100%) in a new compartment of the
Statfjord reservoir came onstream in February 2010 with initial
production of 15 kboe/d (gas and condensates). The N53 well
was also drilled on Alwyn on the same type of reservoir in 2011
and came onstream in September 2011 with initial production
of 4 kboe/d (gas and condensates).
The development project for Islay (100%), a gas and
condensates discovery made in 2008 located south of Alwyn,
was approved in July 2010. Development is underway and
production start-up is expected in the first half of 2012 with a
production capacity of 15 kboe/d.
In 2010, TOTAL signed an agreement to divest its stake in the
Otter field; its holding fell from 81% to 50% in 2011 and was
completely disposed of in February 2012.
– In the Central Graben, the development of the Elgin (46.2%,
operator) and Franklin (46.2%, operator) fields, in production
since 2001, contributed substantially to the Group’s presence in
the United Kingdom. At the end of 2011, TOTAL acquired the
remaining 22.5% of Elgin Franklin Oil & Gas (EFOG), a company
through which it holds a stake in the Elgin and Franklin fields.
On the Elgin field, a first infill well came onstream in October 2009
with production of 18 kboe/d. A second infill well started up in
May 2010 with production of 12 kboe/d.
Following a gas leak on the Elgin field on March 25, 2012,
the production on the Elgin, Franklin and West Franklin fields
was stopped and the personnel of the site were evacuated.
Investigations are ongoing to determine the causes and the
remediation of the gas leak. The Group is actively monitoring
the situation (situation as of March 26, 2012).
Additional development of West Franklin through a second phase
(drilling of three additional wells and installation of a new platform
connected to Elgin) was approved in November 2010. Start-up of
production is expected at year-end 2013. The decision was made
in 2011 to install a new well platform on the Elgin field. This new
platform will be installed in parallel with the West Franklin project
and will enable the drilling of new wells on the Elgin field as of 2014.
26
TOTAL. Registration Document 2011
Business overview 2
Upstream
– In addition to Alwyn and the Central Graben, a third area, West of
Shetland, is undergoing development. TOTAL increased its equity
stake to 80% in the Laggan and Tormore fields in early 2010.
The decision to develop the Laggan/Tormore fields was made in
March 2010 and production is scheduled to start in 2014 with an
expected capacity of 90 kboe/d. The joint development scheme
selected by TOTAL and its partner includes 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 then be exported to the Saint-Fergus terminal via a
new pipeline connected to the Frigg gas pipeline (FUKA).
In 2010, the Group’s stake in the P967 license (operator),
which includes the Tobermory gas discovery, increased to 50%
from 43.75%. This license is located north of Laggan/Tormore.
In early 2011, a gas and condensate discovery was made on
the Edradour license (75%, operator), near Laggan and Tormore.
The development of Edradour using the infrastructures in place
is being examined.
TOTAL has stakes in ten assets operated by third parties, the most
important in terms of reserves being the Bruce (43.25%) and Alba
(12.65%) fields. The Group disposed of its stake in the Nelson field
(11.5%) in 2010.
2.3.7. Middle East
In 2011, TOTAL’s production in the Middle East was 570
kboe/d, representing 24% of the Group’s overall production,
compared to 527 kboe/d in 2010 and 438 kboe/d in 2009.
In the United Arab Emirates, where TOTAL has had operations since
1939, the Group’s production was 240 kboe/d in 2011, compared
to 222 kboe/d in 2010 and 214 kboe/d in 2009. The increase in
production in 2011 was mainly due to higher production by Abu Dhabi
Company for Onshore Oil Operations (ADCO) and Abu Dhabi
Marine (ADMA).
In Abu Dhabi, TOTAL holds a 75% stake in the Abu Al Bu Khoosh
field (operator), a 9.5% stake in ADCO, which operates the five
major onshore fields in Abu Dhabi, and a 13.3% stake in ADMA,
which operates two offshore fields. TOTAL also has a 15% stake in
Abu Dhabi Gas Industries (GASCO), which produces LPG and
condensates from the associated gas produced by ADCO, and
a 5% stake in Abu Dhabi Gas Liquefaction Company (ADGAS),
which produces LNG, LPG and condensates.
In early 2009, TOTAL signed agreements for a 20-year extension of
its stake in the GASCO joint venture starting on October 1, 2008.
In early 2011, TOTAL and IPIC, a government-owned entity in Abu Dhabi,
signed a Memorandum of Understanding with a view to developing
projects of common interest in the upstream oil and gas sectors.
The Group has a 24.5% stake in Dolphin Energy Ltd. alongside
Mubadala, a company owned by the government of the Abu Dhabi
Emirate, to market gas produced primarily in Qatar to the United
Arab Emirates.
double production so as to reach nearly 2 Mt/y in January 2013.
In Iraq, TOTAL bid in 2009 and 2010 on the three calls for tenders
launched by the Iraqi Ministry of Oil. The PetroChina-led consortium
that includes TOTAL (18.75%) was awarded the development and
production contract for the Halfaya field during the second call for
tenders held in December 2009. This field is located in the province
of Missan, north of Basra. The agreement became effective in
March 2010 and the preliminary development plan was approved
by the Iraqi authorities in September 2010. Development operations
started with the shooting of the 3D seismic survey, drilling and the
construction of surface facilities. A production level of 70 kb/d of oil
is expected to be reached in 2012.
In Iran, the Group’s production under buy back agreements was
zero in 2011, having been 2 kb/d in 2010 and 8 kb/d in 2009.
For additional information on TOTAL’s operations in Iran, see
Chapter 4 (Risk Factors).
In Oman, the Group’s production was 36 kboe/d in 2011, stable
compared to 2010 and 2009. TOTAL produces oil mainly on
Block 6 as well as on Block 53 and liquefied natural gas through its
stakes in the Oman LNG (5.54%)/Qalhat LNG (2.04% (1))
liquefaction plant, which has a capacity of 10.5 Mt/y.
In Qatar, where TOTAL has had operations since 1936, the Group
has equity stakes in the Al Khalij field (100%), the NFB Block (20%)
in the North field, the Qatargas 1 liquefaction plant (10%), Dolphin
(24.5%) and train 5 of Qatargas 2 (16.7%). The Group’s production
was 155 kboe/d in 2011, compared to 164 kboe/d in 2010
and 141 kboe/d in 2009.
– The production contract for Dolphin, signed in 2001 with state-
owned Qatar Petroleum, provides for the sale of 2 Bcf/d of gas
from the North Field for a 25-year period. The gas is processed
in the Dolphin plant in Ras Laffan 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) at year-end
2009. TOTAL has owned an equity stake in this train since 2006.
In addition, TOTAL takes part of the LNG produced in compliance
with the contracts signed in 2006, which provide for the purchase
of 5.2 Mt/y of LNG from Qatargas 2 by the Group.
The Group also has a 10% stake in Laffan Refinery, a condensate
splitter with a capacity of 146 kb/d that started up in September 2009.
Finally, since May 2011 the Group has been a partner (25%) in the
offshore BC exploration license.
In Syria, TOTAL is present on the Deir Ez Zor license (100%,
operated by DEZPC, 50% of which is owned by TOTAL) and
through the Tabiyeh contract that became effective in
October 2009. The Group’s production from these two assets
was 53 kboe/d in 2011, compared to 39 kboe/d in 2010 and 20
kboe/d in 2009. In early December 2011, TOTAL ceased its
activities that contribute to oil and gas production in Syria.
For additional information on TOTAL’s operations in Syria, see
Chapter 4 (Risk Factors).
The Group also owns 33.33% of Ruwais Fertilizer Industries (FERTIL),
which produces urea. 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 is expected to allow FERTIL to more than
In Yemen, where TOTAL has had operations since 1987, the Group’s
production was 86 kboe/d in 2011, compared to 66 kboe/d
in 2010 and 21 kboe/d in 2009.
TOTAL has an equity stake in the Yemen LNG project (39.62%).
(1) TOTAL’s indirect stake in Qalhat LNG through its stake in Oman LNG.
Registration Document 2011. TOTAL
27
2 Business overview
Upstream
As part of this project, the Balhaf liquefaction plant on the southern
coast of Yemen is supplied with the gas produced on Block 18,
located near Marib in the center of the country, through a 320 km
gas pipeline. The two liquefaction trains were commissioned in
October 2009 and April 2010, respectively. The plant has a nominal
capacity of 6.7 Mt/y of LNG.
TOTAL also has stakes in the country’s two oil basins, as the
operator of Block 10 (Masila Basin, East Shabwa license, 28.57%)
and as a partner on Block 5 (Marib Basin, Jannah license, 15%).
TOTAL owns stakes in four onshore exploration licenses: 40% in
Blocks 69 and 71, 50.1% in Block 70 (operated by TOTAL since
July 2010), and 36% in Block 72 (operated by TOTAL since
October 2011).
In march 2012, TOTAL acquired a 40% interest in the Block 3
exploration license, which it will operate. The acquisition is subject
to the approval of Yemen’s Ministry of Oil and Mineral Resources.
2.4. Oil and gas acreage
As of December 31,
(in thousand of acres)
2011
2010
2009
Undeveloped
acreage(a)
Developed
acreage
Undeveloped
acreage(a)
Developed
acreage
Undeveloped
acreage(a)
Developed
acreage
Europe Gross 6,478 781 6,802 776 5,964 667
Net 3,497 185 3,934 184 2,203 182
Africa Gross 110,346 1,229 72,639 1,229 85,317 1,137
Net 65,391 333 33,434 349 45,819 308
Americas Gross 15,454 1,028 16,816 1,022 9,834 776
Net 5,349 329 5,755 319 4,149 259
Middle East Gross 31,671 1,461 29,911 1,396 33,223 204
Net 2,707 217 2,324 209 2,415 97
Asia Gross 40,552 930 36,519 539 29,609 397
Net 19,591 255 17,743 184 16,846 169
Total Gross 204,501 5,429 162,687 4,962 163,947 3,181
Net(b) 96,535 1,319 63,190 1,245 71,432 1,015
(a) Undeveloped acreage includes leases and concessions
(b) Net acreage equals the sum of the Group’s equity stakes in gross acreage.
2.5. Number of productive wells
As of December 31,
(number of wells)
2011
2010
2009
Gross
productive
wells
Net
productive
wells(a)
Gross
productive
wells
Net
productive
wells(a)
Gross
productive
wells
Net
productive
wells(a)
Europe Liquids 576 151 569 151 705 166
Gas 358 125 368 132 328 125
Africa Liquids 2,275 576 2,250 628 2,371 669
Gas 157 44 182 50 190 50
Americas Liquids 877 247 884 261 821 241
Gas 2,707 526 2,532 515 1,905 424
Middle East Liquids 7,829 721 7,519 701 3,766 307
Gas 372 49 360 49 136 32
Asia Liquids 209 75 196 75 157 75
Gas 1,589 498 1.258 411 1,156 379
Total Liquids 11,766 1,770 11,418 1,816 7,820 1,458
Gas 5,183 1,242 4,700 1,157 3,715 1,010
(a) Net wells equal the sum of the Group’s equity stakes in gross wells.
28
TOTAL. Registration Document 2011
Business overview 2
Upstream
2.6. Number of net oil and gas wells drilled annually
As of December 31,
2011
2010
2009
Net
productive
wells drilled(a)
Net dry
wells
drilled(a)
Total net
wells
drilled(a)
Net
productive
wells
drilled(a)
Net dry
wells
drilled(a)
Total net
wells
drilled(a)
Net
productive
wells
drilled(a)
Net dry
wells
drilled(a)
Total net
wells
drilled(a)
Exploratory
Europe 1.5 1.7 3.2 1.7 0.2 1.9 0.4 3.7 4.1
Africa 2.9 1.5 4.4 1.6 4.3 5.9 5.9 3.2 9.1
Americas 1.2 1.3 2.5 1.0 1.6 2.6 0.8 1.6 2.4
Middle East 1.2 0.8 2.0 0.9 0.3 1.2 0.3 - 0.3
Asia 2.1 3.7 5.8 3.2 1.2 4.4 1.7 1.2 2.9
Subtotal 8.9 9.0 17.9 8.4 7.6 16.0 9.1 9.7 18.8
Development
Europe 7.5 - 7.5 5.0 - 5.0 5.0 - 5.0
Africa 24.7 - 24.7 18.1 - 18.1 27.5 0.2 27.7
Americas 113.1 82.2 195.3 135.3 112.5 247.8 31.2 104.3 135.5
Middle East 32.6 2.6 35.2 29.6 1.4 31.0 42.6 3.4 49.0
Asia 118.4 - 118.4 59.3 - 59.3 63.5 0.3 63.8
Subtotal 296.3 84.8 381.1 247.3 113.9 361.2 172.8 108.2 281.0
Total 305.2 93.8 399.0 255.7 121.5 377.2 181.9 117.9 299.8
(a) Net wells equal the sum of the Group’s equity stakes in gross wells
2.7. Drilling and production activities in progress
As of December 31,
(number of wells)
Gross
2011
Net(a)
Gross
2010
Net(a)
Gross
2009
Net(a)
Exploratory
Europe 2 2.0 3 2.1 1 0.5
Africa 2 0.8 4 1.4 4 1.3
Americas 3 1.0 2 0.9 2 0.6
Middle East - - 2 1.2 1 0.4
Asia 1 0.6 2 1.1 - -
Subtotal 8 4.4 13 6.7 8 2.8
Development
Europe 21 4.5 21 3.8 5 2.2
Africa 31 11.3 29 6.4 31 8.5
Americas 22 5.7 99 29.2 60 17.8
Middle East 26 3.5 20 5.1 40 4.8
Asia 11 5.1 23 9.8 12 5.5
Subtotal 111 30.1 192 54.3 148 38.8
Total 119 34.5 205 61.0 156 41.6
(a) Net wells equal the sum of the Group’s equity stakes in gross wells.
Registration Document 2011. TOTAL
29
2 Business overview
Upstream
2.8. Interests in pipelines
The table below sets forth TOTAL’s interests in oil and gas pipelines as of December 31, 2011.
Origin
Destination
% interest Operator
Liquids Gas
South West Network
100.00
x
Pipeline(s)
Europe
France
TIGF
Norway
Frostpipe (inhibited)
Heimdal to Brae Condensate Line
Kvitebjorn pipeline
Norpipe Oil
Oseberg Transport System
Sleipner East Condensate Pipe
Troll Oil Pipeline I and II
Lille-Frigg, Froy
Heimdal
Kvitebjorn
Ekofisk Treatment center
Oseberg, Brage
and Veslefrikk
Sleipner East
Troll B and C
Oseberg
Brae
Mongstad
Teeside (UK)
Sture
Karsto
Vestprosess
(Mongstad refinery)
Den Helder
Den Helder
K13 (via K4/K5)
The Netherlands
Nogat pipeline
WGT K13-Den Helder
WGT K13-Extension
United Kingdom
Alwyn Liquid Export Line
Bruce Liquid Export Line
Central Area
Transmission System (CATS)
Central Graben Liquid
Export Line (LEP)
Frigg System: UK line
Ninian Pipeline System
Shearwater Elgin Area Line (SEAL)
SEAL to Interconnector Link (SILK)
Africa
Gabon
Mandji Pipes
Rabi Pipes
Americas
Argentina
Gas Andes
TGN
TGM
Bolivia
Transierra
Brazil
TBG
F3-FB
K13A
Markham
Alwyn North
Bruce
Cats Riser Platform
Cormorant
Forties (Unity)
Teeside
Elgin-Franklin
ETAP
Alwyn North, Bruce
and others
Ninian
Elgin-Franklin, Shearwater
Bacton
St.Fergus (Scotland)
100.00
Sullom Voe
Bacton
Interconnector
16.00
25.73
54.66
Mandji fields
Rabi fields
Cap Lopez Terminal
Cap Lopez Terminal
100.00(a)
100.00(a)
Neuquen Basin
(Argentina)
Network
(Northern Argentina)
TGN
Santiago (Chile)
56.50
15.40
Uruguyana (Brazil)
32.68
Yacuiba (Bolivia)
Rio Grande (Bolivia)
11.00
Bolivia-Brazil border
Porto Alegre
via São Paulo
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
x
36.25
16.76
5.00
34.93
8.65
10.00
3.71
5.00
4.66
23.00
100.00
43.25
0.57
15.89
9.67
5.20
0.93
9.55
Colombia
Ocensa
Oleoducto de Alta Magdalena
Oleoducto de Colombia
Cusiana
Tenay
Vasconia
Covenas Terminal
Vasconia
Covenas
(a) Interest of Total Gabon. The Group has a financial interest of 58.28% in Total Gabon.
30
TOTAL. Registration Document 2011
Business overview 2
Upstream
Origin
Destination
% interest Operator
Liquids Gas
Yadana (Myanmar)
Ban-I Tong
(Thai border)
31.24
x
Baku (Azerbaijan)
Baku (Azerbaijan)
Ras Laffan (Qatar)
Ceyhan
(Turkey, Mediterranean)
Georgia/Turkey Border
U.A.E.
5.00
10.00
24.50
x
x
x
x
Pipeline(s)
Asia
Yadana
Rest of world
BTC
SCP
Dolphin
(International transport and network)
2.9. Gas & Power
The Gas & Power division is primarily focused on the optimization
of the Group’s gas resources. The division is active in the transport,
trading and marketing of natural gas, liquefied natural gas (LNG)
and electricity, LNG re-gasification and natural gas storage. It is also
engaged in shipping and trading of liquefied petroleum gas (LPG),
power generation from gas-fired power plants or renewable
energies, and coal production, trading and marketing.
The Gas & Power division is also developing new energies that emit
fewer greenhouse gases to complement hydrocarbons so as to
meet the increasing global demand for energy. For this purpose,
the Group has two main focuses:
– the upstream/downstream integration of the solar photovoltaic
channel (achieved through the acquisition of a 60% stake in
SunPower in 2011);
– the thermochemical and biochemical conversion of feedstock
into fuels or chemicals.
In these fields, TOTAL pursues and strengthens R&D in solar
energy, conversion processing of biomass, gas and coal, energy
storage, carbon capture and storage and gas technologies.
In parallel, the Group is closely monitoring nuclear power
generation and its outlook.
2.9.1. Liquefied natural gas
A pioneer in the LNG industry, TOTAL today ranks second
worldwide among international oil companies (1) and has sound and
diversified positions both in the upstream and downstream portions
of the LNG chain. LNG development is key to the Group’s strategy,
with TOTAL strengthening positions in most major production
zones and markets.
Through its stakes in liquefaction plants located in Indonesia, Qatar,
the United Arab Emirates, Oman, Nigeria, Norway and, since 2009,
Yemen, TOTAL markets LNG in all worldwide markets. In 2011,
TOTAL sold 13.2 Mt of LNG, an increase of 7.3% compared
to 2010 LNG sales (12.3 Mt) and of 48.3% compared to 2009
sales (8.9 Mt). The start-up of the Angola LNG plant in 2012,
together with the Group’s liquefaction projects in Australia,
Nigeria and Russia, are expected to allow for growth to continue
in the coming years.
The Gas & Power division is responsible for LNG operations
downstream from liquefaction plants(2). It is in charge of LNG
marketing to third parties on behalf of the Exploration & Production
division, building up the Group’s LNG portfolio for its trading,
marketing and transport operations as well as re-gasification
terminals.
In Nigeria, TOTAL holds a 15% interest in the Nigeria LNG plant
(NLNG). The Group signed an LNG purchase agreement, initially
intended for deliveries to the United States and Europe, for an
initial 0.23 Mt/y over a 23-year period starting in 2006, to which
an additional 0.94 Mt/y was added when the sixth train came on
stream in December 2007.
TOTAL also holds a 17% stake in the Brass LNG project, which
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 LNG purchase agreement for
approximately one-sixth of the plant’s capacity over a 20-year
period. This contract is subject to the final investment decision for
the project by Brass LNG.
In Norway, as part of the Snøvhit project, in which the Group holds
an 18.4% stake, TOTAL signed in 2004 a purchase agreement
for 0.78 Mt/y of LNG over a 15-year period primarily intended for
North America and Europe. Deliveries started in 2007.
In Qatar, TOTAL signed purchase agreements in 2006 for 5.2 Mt/y
of LNG from train 5 (TOTAL, 16.7%) of Qatargas 2 over a 25-year
period. This LNG is expected to be marketed mainly in France, the
United Kingdom and North America. LNG production from this train
started in September 2009.
In Yemen, TOTAL signed an agreement with Yemen LNG Ltd
(TOTAL, 39.62%) in 2005 to purchase 2 Mt/y of LNG over a
20-year period, starting in 2009, which is initially intended for
delivery in the United States and Europe. LNG production from
Yemen LNG’s first and second trains started in October 2009
and April 2010, respectively.
Since 2009, part of the volume purchased by the Group pursuant
to its long-term contracts related to the LNG projects mentioned
above has been diverted to higher-value markets in Asia.
(1) Based on publicly available information; upstream and downstream LNG portfolios.
(2) The Exploration & Production division is in charge of the Group's natural gas liquefaction and production operations.
Registration Document 2011. TOTAL
31
2 Business overview
Upstream
In Angola, TOTAL is involved in the construction of the Angola LNG
liquefaction plant (TOTAL, 13.6%), which includes a 5.2 Mt/y train
expected to start up in 2012. As part of this project, TOTAL signed
in 2007 a re-gasified gas purchase agreement for 13.6% of the
quantities produced over a 20-year period.
In Australia, TOTAL holds a 24% stake in the Ichthys LNG project,
which calls for the construction of two LNG trains, each with a
capacity of 4.2 Mt/y. In conjunction with this acquisition, TOTAL
signed an LNG purchase agreement for 0.9 Mt/y over a 15-year
period. The final investment decision of the partners of the Ichthys
LNG project was made in January 2012.
In China, TOTAL signed in 2008 an LNG sale agreement with China
National Offshore Oil Company (CNOOC). This agreement, starting
in 2010 for a 15-year period, provides for the supply by TOTAL of
up to 1 Mt/y of LNG to CNOOC. The gas supplied comes from the
Group’s global LNG portfolio.
In South Korea, TOTAL signed an LNG sale agreement in 2011
with Kogas. Under this agreement, TOTAL will deliver up to 2 Mt/y
of LNG to Kogas between 2014 and 2031. This gas will come from
the Group’s global LNG portfolio.
With regard to LNG transport operations, since 2004 TOTAL has
been the direct long-term charterer of the Arctic Lady, a 145,000 m3
LNG tanker that ships TOTAL’s share of production from the Snøvhit
liquefaction plant in Norway. In November 2011, TOTAL signed a
second long-term contract for the chartering of a 165,000 m3 LNG
tanker, the Maersk Meridian, in order to strengthen its transport
capacities with regards again to its lifting commitments in Norway.
The Group also holds a 30% stake in Gaztransport & Technigaz
(GTT), which focuses mainly on the design and engineering of
membrane cryogenic tanks for LNG tankers. At year-end 2011,
out of a worldwide tonnage estimated at 386 LNG tankers (1),
258 active LNG tankers were equipped with membrane tanks built
under GTT licenses.
2.9.2. Trading
In 2011, TOTAL continued to pursue its strategy of developing its
operations downstream from natural gas and LNG production.
The aim of this strategy is to optimize access for the Group’s
current and future production to traditional markets (with long-term
contracts) and to markets open to international competition (with
short-term contracts and spot sales). In the context of deregulated
markets, which allow customers to more freely access suppliers,
in turn leading to new marketing arrangements that are more
flexible than traditional long-term contracts, TOTAL is developing
trading, marketing and logistics businesses to offer its natural gas
and LNG production directly to customers.
In parallel, the Group has operations in electricity trading and LPG
as well as coal marketing.
Furthermore, in 2011 TOTAL began to market the petcoke
production of the Port Arthur refinery (United States) on the
international market.
The Gas & Power division’s trading teams are located in London,
Houston, Geneva and Singapore and conduct most of their
business through the Group’s wholly-owned subsidiaries Total
Gas & Power and Total Gas & Power North America.
(1) Gaztransport & Technigaz data.
32
TOTAL. Registration Document 2011
2.9.2.1. Gas and electricity
TOTAL has gas and electricity trading operations in Europe and
North America with a view to selling the Group’s production and
supplying its marketing subsidiaries.
In Europe, TOTAL marketed 1,500 Bcf (42.5 Bm3) of natural gas
in 2011, compared to 1,278 Bcf (36.2 Bm3) in 2010 and 1,286 Bcf
(36.5 Bm3) in 2009, including approximately 12% coming from the
Group’s production. In addition, TOTAL marketed 24.2 TWh of
electricity in 2011, compared to 27.1 TWh in 2010 and 35 TWh
in 2009, which came mainly from external resources.
In North America, TOTAL marketed 1,694 Bcf (48 Bm3) of
natural gas in 2011, compared to 1,798 Bcf (51 Bm3) in 2010
and 1,586 Bcf (45 Bm3) in 2009, supplied by its own production
or external resources.
2.9.2.2. LNG
TOTAL has LNG trading operations through spot sales and
fixed-term contracts as described in section 2.9.1. Since 2009,
new purchase agreements (Qatargas 2, Yemen LNG) and new
sale agreements (China, India, Thailand, South Korea and Japan)
have substantially developed the Group’s LNG marketing
operations, particularly in Asia’s most buoyant markets.
This spot and fixed-term LNG portfolio allows TOTAL to supply
gas to its main customers worldwide, while retaining a sufficient
degree of flexibility to react to market opportunities.
In 2011, TOTAL purchased 99 contractual cargos and 10 spot
cargos from Qatar, Yemen, Nigeria, Norway, Russia and Egypt,
compared to 94 and 12, respectively, in 2010 and 23 and 12,
respectively, in 2009.
2.9.2.3. LPG
In 2011, TOTAL traded and sold approximately 5.7 Mt of LPG
(butane and propane) worldwide, compared to 4.5 Mt in 2010
and 4.4 Mt in 2009. Approximately 28% of these quantities came
from fields or refineries operated by the Group. LPG trading
involved the use of 7 time-charters, representing 188 voyages
in 2011, and approximately 142 spot charters.
2.9.2.4. Coal
In 2011, TOTAL marketed 7.5 Mt of coal in the international market,
compared to 7.3 Mt in 2010 and 2009. Approximately 70% of this
coal comes from South Africa. More than three-quarters of the
volume was sold in Asia, where coal is used primarily to generate
electricity, with the remaining volume marketed in Europe.
2.9.2.5. Petcoke
In 2011, TOTAL began to market the petcoke produced by the
coker at the Port Arthur refinery. Approximately 0.6 Mt of petcoke
was sold on the international market in 2011 to cement plants and
electricity producers, mainly in Mexico, Brazil, Turkey and China.
Business overview 2
Upstream
2.9.3. Marketing
To unlock value from the Group’s production, TOTAL has gradually
developed gas, electricity and coal marketing operations with end
users in the United Kingdom, France, Spain and Germany.
In the United Kingdom, TOTAL sells gas and power to the
industrial and commercial segments through its subsidiary Total
Gas & Power Ltd. In 2011, volumes of gas sold amounted to
162 Bcf (4.6 Bm3), compared to 173 Bcf (4.9 Bm3) in 2010 and
130 Bcf (3.7 Bm3) in 2009. Sales of electricity totaled
approximately 4.1 TWh in 2011, stable compared to 2010
and 2009.
In France, TOTAL markets natural gas through its subsidiary
Total Energie Gaz (TEGAZ), the overall sales of which were 208 Bcf
(5.9 Bm3) in 2011, compared to 226 Bcf (6.4 Bm3) in 2010 and
208 Bcf (5.9 Bm3) in 2009. The Group also markets coal to its
French customers through its subsidiary CDF Energie, with sales
of approximately 1.2 Mt in 2011, compared to 1.3 Mt in 2010 and
1 Mt in 2009.
In Spain, TOTAL markets natural gas to the industrial and
commercial segments through Cepsa Gas Comercializadora,
in which it holds a 35% stake. In 2011, volumes of gas sold
amounted to 85 Bcf (2.4 Bm3), like in 2010 and compared to
70 Bcf (2 Bm3) in 2009.
In Germany, Total Energie created a marketing subsidiary in 2010,
Total Energy Gas GmbH, which began commercial operations
in 2011, making its first sales to industrial customers and service
companies.
The Group also holds stakes in the marketing companies that are
associated with the Altamira and Hazira LNG re-gasification
terminals located in Mexico and India, respectively.
2.9.4. Gas facilities
TOTAL develops and operates its natural gas transport
networks, gas storage facilities (both liquid and gaseous) and
LNG re-gasification terminals downstream from its natural gas
and LNG production.
2.9.4.1. Transport of natural gas
In France, the Group’s transport operations located in the
southwest of the country are grouped under Total Infrastructures
Gaz France (TIGF), a wholly-owned subsidiary of the Group.
This subsidiary operates a regulated transport network of 5,000 km
of gas pipelines. As part of the development of Franco-Spanish
interconnections, TOTAL decided in 2011 to complete the
Euskadour (France-Spain link) project with commissioning
scheduled in 2015. This decision followed the decisions made
in 2010 to invest in the Artère du Béarn and Girland gas pipeline
projects (reinforcement of Artère de Guyenne), with commissioning
scheduled in 2013.
Another highlight of 2011 was the implementation by TIGF
of the Third Energy Package adopted by the European Union
in July 2009, which entails splitting network operations from
production and supply operations.
In South America, TOTAL owns interests in several natural gas
transport companies in Argentina, Chile and Brazil. These assets
represent a total integrated network of approximately 9,500 km
of pipelines serving the Argentinean, Chilean and Brazilian markets
from gas-producing basins in Bolivia and Argentina, where the
Group has natural gas reserves. These natural gas transport
companies are challenged by a difficult operational and financial
environment in Argentina stemming from the absence of an
increase in transport tariffs and the restrictions imposed on gas
exports. The Group successfully negotiated in 2011 financial
arrangements with some of its customers, which resulted in a
significant improvement in earnings for GasAndes, a company
in which TOTAL holds a 56.5% stake.
2.9.4.2. Storage of natural gas and LPG
In France, the Group’s storage operations located in the southwest
are grouped under TIGF. This subsidiary operates two storage units
under a negotiated legal regime with a usable capacity of 92 Bcf
(2.6 Bm3).
Through its 35.5% stake in Géométhane, TOTAL owns natural gas
storage in salt cavern in Manosque with a capacity of 10.5 Bcf
(0.3 Bm3). A proposed 7 Bcf (0.2 Bm3) increase in storage capacity
was approved in February 2011, with commissioning scheduled
in 2017-2018.
In India, TOTAL holds a 50% stake in South Asian LPG Limited
(SALPG), a company that operates an underground import and
storage LPG terminal located on the east coast of the country.
This cavern, the first of its kind in India, has a storage capacity
of 60 kt. In 2011, inbound vessels transported 850 kt of LPG,
compared to 779 kt in 2010 and 606 kt in 2009.
2.9.4.3. LNG re-gasification
TOTAL has entered into agreements to obtain long-term access
to 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 presence allows the Group to
access new liquefaction projects by becoming a long-term buyer
of a portion of the LNG produced at these plants, thereby
strengthening its LNG supply portfolio.
In France, TOTAL holds a 27.6% stake in Société du Terminal
Méthanier de Fos Cavaou (STMFC) and has, through its affiliate
Total Gas & Power, a re-gasification capacity of 2.25 Bm3/y.
The terminal received 59 vessels in 2011.
In 2011, TOTAL acquired a 9.99% stake in Dunkerque LNG
(EDF 65%, operator) in order to develop a methane terminal project
with a capacity of 13 Bm3/y. Trade agreements have also been
signed which allow TOTAL to reserve up to 2 Bm3/y of re-gasification
capacity over a 20-year period. Commissioning of the terminal is
scheduled for the end of 2015.
In the United Kingdom, through its equity interest in the
Qatargas 2 project, TOTAL holds an 8.35% stake in the South
Hook LNG re-gasification terminal and an equivalent right of use
to the terminal. Phase 2 of the terminal was commissioned in
April 2010, which increased the terminal’s total capacity to
742 Bcf/y (21 Bm3/y). The terminal operates at nearly 80% of its
capacity and in 2011 re-gasified nearly 100 cargoes from Qatar.
In Croatia, TOTAL is involved in the study of an LNG re-gasification
terminal on Krk Island, on the northern Adriatic coast.
In Mexico, TOTAL sold in 2011 its entire stake in the Altamira
re-gasification terminal. However, TOTAL retained its 25%
Registration Document 2011. TOTAL
33
2 Business overview
Upstream
reservation of the terminal’s capacity, i.e., 59 Bcf/y (1.7 Bm3/y)
through its 25% stake in Gas del Litoral.
In the United States, TOTAL has reserved a re-gasification
capacity of approximately 353 Bcf/y (10 Bm3/y) at the Sabine
Pass terminal (Louisiana) for a 20-year period ending in 2029.
In India, TOTAL holds a 26% stake in the Hazira terminal, which
has a natural gas re-gasification capacity of 177 Bcf/y (5 Bm3/y).
The terminal, located on the west coast of India in the Gujarat state,
is a merchant terminal with operations that cover both LNG
re-gasification and gas marketing. After a year of sluggish activity
in 2010, the terminal’s full capacities are under contract for 2011
and 2012. The Indian market’s strong growth prospects have led to
a decision to increase the terminal’s capacity to 230 Bcf/y
(6.5 Bm3/y) starting in 2013.
2.9.5. Electricity generation
In a context of increasing global demand for electricity, TOTAL has
developed expertise in the power generation sector, especially
through cogeneration and combined cycle power plant projects.
The Group is also involved in power generation projects from
renewable sources and is closely monitoring nuclear power
generation and its outlook.
2.9.5.2. Electricity from nuclear energy sources
In France, TOTAL partners with EDF and other players through
its 8.33% interest in the second French EPR project in Penly,
in the northwest of the country, for which studies are underway.
The Group is closely monitoring nuclear power generation and
its outlook.
2.9.5.3. Electricity from renewable
energy sources
In concentrated solar power, TOTAL, in partnership with Spanish
company Abengoa Solar, won the call for tenders for the construction
and 20-year operation of a 109 MW concentrated solar power plant in
Abu Dhabi. The Shams project (TOTAL, 20%) is being carried out in
partnership with Masdar through the Abu Dhabi Future Energy
Company, which holds a 60% stake in the project. Construction work
started in July 2010 and start-up is expected during the second
semester of 2012. The plant’s production will be sold to ADWEC.
In wind power, TOTAL owns a 12 MW wind farm in Mardyck (near
Dunkirk, France), which was commissioned in 2003.
With respect to marine energy, TOTAL holds a 26.6% share in
Scotrenewables Marine Power, located in the Orkney Islands in
Scotland. Tests are being conducted on a 250 kW prototype.
2.9.5.1. Electricity from conventional
energy sources
2.9.6. Solar energy
In Abu Dhabi, the Taweelah A1 plant combines electricity
generation and water desalination. It is owned by Gulf Total
Tractebel Power Cy, in which TOTAL holds a 20% stake.
The Taweelah A1 power plant, in operation since 2003, currently
has net power generation capacity of 1,600 MW and water
desalination capacity of 385,000 m3 per day. The plant’s production
is sold to Abu Dhabi Water and Electricity Company (ADWEC) as
part of a long-term agreement.
In Nigeria, TOTAL and its partner, the state-owned Nigerian
National Petroleum Corporation (NNPC), own interests in two
gas-fired power plant projects 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 Shell Petroleum Development
Company (SPDC) joint venture in which TOTAL holds a 10%
stake, concerns the development of a 630 MW combined-cycle
power plant. Commercial operations started in December 2010.
– The development of a new 417 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). A final investment decision is expected
in the first half of 2012 and commissioning is scheduled in the
first half of 2014 in open-cycle and in early 2015 in closed-cycle.
The power plant will be connected to the existing power grid
through a new 108 km high-voltage transmission line.
In Thailand, TOTAL owns 28% of Eastern Power and Electric
Company Ltd, which operates the combined-cycle gas power plant
in Bang Bo, with a capacity of 350 MW, in operation since 2003.
The plant’s production is sold to the Electricity Generating Authority
of Thailand under a long-term agreement.
TOTAL is developing upstream operations through industrial
production and downstream marketing activities in the photovoltaic
sector based on crystalline silicon technology. The Group is also
pursuing R&D in this field through several partnerships, as well as in
the fields of thin films, transverse systems research and solar
energy storage.
In 2011, TOTAL took a major step toward implementing its solar
photovoltaic strategy, where the Group has been active since 1983,
by acquiring a majority stake in the U.S. company SunPower.
2.9.6.1. Solar photovoltaic
2.9.6.1.1. SunPower
In June 2011, following a friendly takeover bid, TOTAL acquired
60% of SunPower, a U.S. company based in San Jose, California
and listed on NASDAQ (NASDAQ: SPWR). TOTAL now appoints
the majority of the members of SunPower’s board of directors.
SunPower is an integrated player that designs, manufactures and
supplies the highest-efficiency solar panels in the market. It is active
throughout the solar chain, from cell production to the design and
construction of turnkey large power plants.
Upstream, SunPower manufactures all of its cells in Asia (Philippines,
Malaysia). In 2011, SunPower operated twelve cell manufacturing
lines at its plant in Melaka, Malaysia (SunPower, 50% joint venture),
which has a capacity of 600 MWp/y. SunPower’s overall cell
production capacity at the beginning of 2012 was 1,300 MWp/y.
Downstream, SunPower is present in most major geographic
markets (United States, Europe, Australia and Asia), with operations
ranging from residential roof tiles to large solar power plants.
A specific R&D agreement between TOTAL and SunPower has also
been signed.
34
TOTAL. Registration Document 2011
Business overview 2
Upstream
As of January 2012, TOTAL owns 66% of SunPower following
the Tenesol transaction described below.
MicroElectronics Center (IMEC) near the University of Leuven,
Belgium, in an effort to increase the efficiency of solar cells.
2.9.6.1.2. Tenesol
Tenesol is a French company that designs, manufactures, markets,
installs and operates solar photovoltaic systems. In October 2011,
TOTAL became the sole shareholder of Tenesol after having finalized
the acquisition of its EDF partner’s shares (excluding overseas
activities). Tenesol owns solar panel manufacturing plants (South
Africa, France), which have a total capacity of nearly 200 MWp/y.
TOTAL and SunPower reached an agreement whereby, in 2012,
Tenesol’s operations, along with the solar panel plant in Moselle,
northeastern France (see paragraph 2.9.6.1.4 of this Chapter),
became part of SunPower.
2.9.6.1.3. Photovoltech
TOTAL holds a 50% interest in Photovoltech, a Belgian company
specialized in manufacturing multicrystalline photovoltaic cells.
In 2011, Photovoltech finalized the ramp-up of its third production
line, raising the total production capacity of its plant in Tienen,
Belgium to 155 MWp/y.
2.9.6.1.4. Other assets
In 2011, TOTAL began the construction of a solar panel production
and assembly plant in the northeastern region of Moselle in France,
which is expected to begin operations in 2012 with an overall
capacity of 44 MWp/y.
In addition, Tenesol’s overseas activities remain 50-50 subsidiaries
of TOTAL and EDF through a new company named Sunzil.
Finally, the Group is continuing its projects to display solar
application solutions as part of decentralized rural electrification
projects in a number of countries, including in South Africa via
Kwazulu Energy Services Company (KES) in which TOTAL holds
a 35% stake. New projects are being studied in Africa and Asia.
2.9.6.1.5. Solar photovoltaic
market context in 2011
In 2011, the photovoltaic sector was forced to cope with a difficult
environment marked by excess cell production capacity and
modification or cancellation of subsidy programs. This transition
period is expected to result in a consolidation of the sector followed
by the emergence of a competitive industry. As a clean energy,
solar power has a large potential and should eventually become
an indispensible part of the energy mix.
2.9.6.2. New solar technologies
TOTAL has committed to developing innovative technologies
to improve its portfolio of solar projects. The Group has major
R&D programs through partnerships with major laboratories
and international research institutes in France and abroad.
In the upstream solar chain, TOTAL holds a 30% stake in AE
Polysilicon Corporation (AEP), a U.S. company based near
Philadelphia, Pennsylvania. AEP has developed a new continuous
process to produce solar-grade granular polysilicon.
With respect to the production of crystalline silicon cells and panels,
the Group is continuing its partnership with the Interuniversity
Regarding thin-film technologies and silicon-based nano-materials,
in 2009 the Group partnered with the Laboratoire de Physique des
Interfaces et des Couches Minces de l’École Polytechnique
(LPICM) and the French National Center for Scientific Research
(CNRS) to set up a joint research team in the Saclay area in France.
TOTAL also entered into a research partnership with Toulouse-
based Laboratoire d’analyse et d’architecture des systèmes (LAAS)
to develop associated electrical systems. The aim of these
partnerships is to improve the efficiency of the photovoltaic chain
in order to substantially lower costs in this sector.
In organic solar technologies, the Group acquired approximately
25% of the U.S. start-up Konarka in 2008. Since 2009, Konarka
Technologies Inc has carried out research projects in cooperation
with TOTAL to develop solar film on a large scale.
Regarding solar energy storage, TOTAL entered in 2009 into
a research agreement with the Massachusetts Institute of
Technology (MIT) in the United States to develop a new stationary
battery technology.
2.9.7. Biotechnologies
Conversion of biomass
TOTAL is exploring a number of avenues for developing biomass
depending on the resource used, the nature of the target markets
(e.g., fuels, lubricants, petrochemicals, specialty chemicals) and
the conversion processes.
The Group has chosen to target the two primary conversion
processes: biological and thermochemical.
In June 2010, TOTAL entered into a strategic partnership with
Amyris Inc., a U.S. start-up specializing in biotechnologies.
The Group acquired a stake in Amyris’ share capital (21.28% as
of February 24, 2012) and signed a collaboration framework
agreement that includes research, development, production and
marketing partnerships with the creation of an R&D team. Two
programs have been approved in 2011 to develop a biojet fuel as
well as a biodiesel. At the end of 2011, partners agreed to create a
joint-venture to produce and commercialize advanced molecules
intended for the fuels, lubricants and special fluids markets.
Amyris owns a cutting-edge industrial synthetic biological platform
designed to create and optimize micro-organisms (yeasts, algae,
bacteria) that can convert sugars into fuels and chemicals.
Amyris owns research laboratories and a pilot unit in California
as well as a pilot plant and a demonstration facility in Brazil.
Industrial production of farnesene began in 2011 at three partner
sites (in Brazil, the United States and Spain) representing a nominal
annual capacity of 50,000 m³. A fourth production site is as well
under construction and shall be completed in 2012.
In addition, the Group continues to develop a network of
R&D partnerships, including with the Joint BioEnergy Institute
(JBEI) Novogy (United States), the University of Wageningen
(Holland) and the Toulouse White Biotechnology consortium (TWB)
(France) in technology segments that are complementary with
Amyris’ platform: deconstruction of lignocelluloses and new
biosynthesis processes.
Registration Document 2011. TOTAL
35
2 Business overview
Upstream
The Group is also assessing the potential of phototrophic
processes and bio-engineering of microalgae. In December 2011,
it entered into a partnership with Cellectis S.A. in exploratory
research on molecules similar to petroleum products, from
microalgae, for the energy and chemicals markets.
In addition, to support the commercial development of DME,
TOTAL is involved with eight Japanese companies in a program
intended to heighten consumers’ awareness of this new fuel
in Japan. The 80 kt/y production plant (TOTAL, 10%), located
in Niigata, started up in 2009.
Finally, via the International DME Association (IDA), TOTAL is
participating in studies on the combustion of blends that
include DME and in standardization efforts regarding the use
of DME as fuel.
2.9.9. Coal production
For nearly thirty years, TOTAL has produced and exported coal
from South Africa primarily to Europe and Asia. In 2011, TOTAL
produced 3.8 Mt of coal.
With the start-up of production on the Dorstfontein East mine
in 2011, the subsidiary Total Coal South Africa (TCSA) owns and
operates five mines in South Africa. The Group continues to study
other projects aimed at developing its mining resources.
The South African coal produced by TCSA or bought from third-
parties’ mines is either marketed locally or exported through the
port of Richard’s Bay, in which TOTAL holds a 5.7% interest.
2.9.8. Carbochemistry
2.9.8.1. Carbon capture and storage
TOTAL is involved in a program to develop new carbon capture and
storage technologies to reduce the environmental footprint of the
Group’s industrial projects based on fossil energy.
In partnership with the French IFP Énergies Nouvelles (French
Institute for Oil and Alternative Energies), TOTAL is involved in an
R&D program related to chemical looping combustion, a new
process to burn solid and gas feedstock that includes carbon
capture at a very low energy cost. In 2010, this partnership resulted
in the construction of a demonstration pilot at the Solaize site in
France. A large-scale pilot is expected to be commissioned
in 2013.
The Group is also involved in the EU-co-funded Carbolab project
that intends to validate the carbon storage technology in coal
seams and coalbed methane recovery.
2.9.8.2. DME
TOTAL is involved in the European “Bio-DME” project in Sweden,
the goal of which is to validate a di-methyl ether (DME) production
chain through gasification of black liquor generated by a pulp mill.
The pilot plant located in Pitea successfully came into production
at the end of 2011. To date, three metric tons of bio-DME that
meet the Group’s specifications for use as fuel have already been
produced.
36
TOTAL. Registration Document 2011
Business overview 2
Downstream
3. Downstream
The Downstream segment comprises TOTAL’s Refining & Marketing
and Trading & Shipping divisions.
(cid:129) Among the largest refiners/marketers in Western Europe(1)
(cid:129) No.1 marketer in Africa(2)
(cid:129) Refining capacity of approximately 2.1 Mb/d at year-end 2011
(cid:129) 14,819 service stations at year-end 2011
(cid:129) Approximately 3.6 Mb/d of products sold in 2011
(cid:129) One of the leading traders of oil and refined products worldwide
(cid:129) €1.9 billion invested in 2011
(cid:129) 29,423 employees
The persistence of an unfavorable economic environment for
refining, affecting Europe in particular, led the Group to recognize
an impairment in the Downstream, on European refining assets, in
the third and fourth quarters of 2011 in the amount of €700 million
in operating income and €478 million in net operating income.
These elements have been treated as adjustment items.
The ROACE(3) for the Downstream segment was 7% in 2011
compared to 8% in 2010.
2010 refined products sales
by geographical area: 3,639 kb/d(a)
Refinery throughput(a)
(in kb/d)
2009
2,151
2010
2011
2,009
1,863
1,901
1,756
1,617
Europe 63%
Americas 13%
Africa 11%
Rest of World 13%
Europe
Rest of
World
250
253
246
(a) Including Trading and TOTAL’s share in CEPSA and, as from October 1, 2010,
in TotalErg.
In October 2011, the Group announced a proposed reorganization
of its Downstream and Chemicals segments. The procedure for
informing and consulting with employee representatives took place
and the reorganization became effective on January 1, 2012.
This led to organizational changes, with the creation of:
– a Refining & Chemicals segment, a large industrial center that
encompasses refining, petrochemicals, fertilizers and specialty
chemicals operations. This segment also includes oil trading and
shipping activities.
– a Supply & Marketing segment, which is dedicated to worldwide
supply and marketing activities in the oil products field.
The Downstream activities described above, including the data as
of December 31, 2011, are presented based on the organization
in effect up to December 31, 2011.
(a) Including TOTAL’s share in CEPSA and,
as from October 1, 2010, in TotalErg
For the full-year 2011, refinery throughput decreased by 7%
compared to 2010, essentially due to the sale of the Group’s interest
in CEPSA and to a high level of major turnarounds than in 2010.
Downstream segment financial data
(M€) 2011 2010 2009
Non-Group sales 141,907 123,245 100,518
Adjusted operating income 1,238 1,251 1,026
Adjusted net operating income 1,083 1,168 953
The European refinery margin indicator (ERMI) averaged 17.4 $/t
in 2011, a decrease of 36% compared to 2010.
For the full year 2011, adjusted net operating income for the
Downstream segment was €1,083 million, a decrease of 7%
compared to €1,168 million in 2010.
Expressed in dollars, the adjusted net operating income for the
Downstream segment was 1.5 B$, a decrease of 3% compared
to 2010. The decrease is essentially due to the negative impact
of the deterioration in refining margins in 2011 while marketing
performed nearly at the 2010 level.
(1) Based on publicly available information, refining and/or sales capacities.
(2) PFC Energy based on quantities sold.
(3) Calculated based on adjusted net operating income and average capital employed, using replacement cost.
Registration Document 2011. TOTAL
37
2 Business overview
Downstream
3.1. Refining & Marketing
TOTAL’s worldwide refining capacity was 2,088 kb/d at year
end 2011, compared to 2,363 kb/d in 2010 and 2,594 kb/d
in 2009. The Group’s worldwide refined products sales (including
trading operations) in 2011 were 3,639 kb/d, compared to
3,776 kb/d in 2010 and 3,616 kb/d in 2009.
TOTAL is among the largest refiners/marketers in Western Europe(1),
and the leading marketer in Africa(2).
Directly or via its holdings, TOTAL has a worldwide retail network
of 14,819 service stations at year end 2011, compared to 17,490
in 2010 and 16,299 in 2009. Through its retail network, TOTAL
provides fuels to more than 3 million customers every day. In
addition, TOTAL produces a broad range of specialty products,
such as lubricants, liquefied petroleum gas (LPG), jet fuel, special
fluids, bitumen, heavy fuel, marine fuel and petrochemical feedstock.
The Group continues to adapt its business and improve positions
in a context of growing demand worldwide, mainly in non-OECD
countries, by focusing on three areas:
– adapting to mature markets in Europe;
– developing its positions in growth markets (Africa, Asia and the
Middle East); and
– developing specialty products worldwide.
In July 2011, TOTAL closed the sale to IPIC of its 48.83% stake in
CEPSA as part of a public takeover bid on the entire share capital of
CEPSA. With respect to Refining & Marketing operations, this sale
concerns mainly four Spanish refineries (Huelva, Algeciras, Tenerife,
Tarragona) and some marketing activities in Spain and Portugal.
In October 2011, TOTAL sold its network of service stations and
its fuel and heating oil marketing business in the United Kingdom,
the Channel Islands and the Isle of Man.
3.1.1. Refining
TOTAL has equity stakes in twenty refineries (including ten that it
operates), located in Europe, the United States, the French West
Indies, Africa and China.
In 2011, TOTAL continued its program of selective investments
in Refining, which is focused on three areas: pursuing major
ongoing projects (deep conversion at the Port Arthur refinery and
construction of the Jubail refinery), adapting the European refining
system to structural market changes, and increasing safety and
energy efficiency.
In Western Europe, TOTAL’s refining capacity was 1,792 kb/d
in 2011, compared to 2,049 kb/d in 2010 and 2,282 kb/d in 2009,
accounting for 85% of the Group’s overall refining capacity. The
decrease in 2011 was due to the sale of the Group’s stake in
CEPSA. The Group operates nine refineries in Western Europe and
owns stakes in the Schwedt refinery in Germany and two refineries
in Italy through its interest in TotalErg.
− In France, where it owns five refineries, the Group continues to
adapt its refining capacities and shift the production emphasis to
diesel, in a context of structural decline in petroleum products
demand in Europe and an increase in gasoline surpluses.
(1) Based on publicly available information, refining capacities and quantities sold.
(2) PFC Energy, based on quantities sold.
38
TOTAL. Registration Document 2011
Since autumn 2010, TOTAL has been implementing its project
to repurpose the Flanders site. The shutdown of the refining
business will lead to gradually dismantling the units. The Group
has commenced repurposing the site through the creation of a
technical support center, a refining training school, an oil depot
and business offices.
In addition, the industrial plan started in 2009 to adapt the
Group’s refining base in France is ongoing. This plan is intended
to reconfigure the Normandy refinery and rescale certain
corporate departments at the Paris headquarters. At the
Normandy refinery, the project is intended to upgrade the refinery
and shift the production emphasis to diesel. For this purpose,
the investments will result in the eventual reduction of the annual
distillation capacity to 12 Mt from 16 Mt, upsizing the distillate
hydrocracker and improving energy efficiency by lowering carbon
dioxide emissions. The new structure is expected to become
operational at the end of 2013.
In summer 2010, the Group divested its minority interest (40%)
in the Société de la Raffinerie de Dunkerque (SRD), a company
that specializes in bitumen and base oil production.
− In the United Kingdom, the hydrodesulphurization (HDS) unit
at the Lindsey refinery was commissioned in February 2011.
The unit makes it possible to process up to 70% of high-sulphur
crudes, compared to 10% previously, and increase low-sulphur
diesel production. In 2010, the Group announced that it would
offer for sale its Lindsey refinery in the United Kingdom. Due to
the difficult market conditions and the lack of sufficiently
attractive and competitive offers, the Group decided in
early 2012 to maintain the refinery within its refining network.
− In Germany, an additional HDS unit designed to supply the
German market with low-sulphur heating oil started up in
autumn 2009 at the Leuna refinery.
− In Italy, TotalErg (TOTAL, 49%) has operated the Rome refinery
(100%) since October 2010 and holds a 25.9% stake in the
Trecate refinery.
In the United States, TOTAL operates the Port Arthur refinery
in Texas, with a capacity of 174 kb/d. In 2008, TOTAL launched
an upgrading program that included the construction of a
desulphurization unit commissioned in July 2010 and a vacuum
distillation unit, a deep-conversion unit (or coker) and other
associated units, which were successfully commissioned in
April 2011. This project enables the refinery to process more
heavy and high-sulphur crudes and to increase production of
lighter products, in particular low-sulphur distillates.
In Saudi Arabia, TOTAL and Saudi Arabian Oil Company
(Saudi Aramco) created a joint venture in 2008, Saudi Aramco
Total Refining and Petrochemical Company (SATORP), to build
a 400 kb/d refinery in Jubail held by Saudi Aramco (62.5%) and
TOTAL (37.5%). TOTAL and Saudi Aramco each plan to retain
a 37.5% interest with the remaining 25% expected to be listed on
the Saudi stock exchange. The main contracts for the construction
of the refinery were signed in mid-2009, concurrent with the
start-up of work. Commissioning is expected in 2013.
Business overview 2
Downstream
In the French West Indies, the Group has a 50% stake in the
company Société Anonyme de la Raffinerie des Antilles (SARA),
which owns a refinery in Martinique.
In China, TOTAL has a 22.4% stake in the WEPEC refinery, located
in Dalian, in partnership with Sinochem and PetroChina.
The heavy conversion process of this refinery is designed for
processing heavier crudes produced nearby and selling fuels and
lighter products that meet strict specifications and are mainly
intended for export. The refinery will also be integrated with
petrochemical units.
In Africa, the Group has minority stakes in five refineries in South
Africa, Senegal, Côte d’Ivoire, Cameroon and Gabon.
3.1.1.1. Crude oil refining capacity
The table below sets forth TOTAL’s daily crude oil refining capacity(a):
As of December 31,
(kb/d) 2011 2010 2009
Refineries operated by the Group
Normandy (France) 199 199 338
Provence (France) 158 158 158
Flanders (France) - - 137
Donges (France) 230 230 230
Feyzin (France) 117 117 117
Grandpuits (France) 101 101 101
Antwerp (Belgium) 350 350 350
Leuna (Germany) 230 230 230
Rome (Italy)(b) - - 64
Lindsey - Immingham (United Kingdom) 221 221 221
Vlissingen (Netherlands)(c) 82 81 81
Port Arthur, Texas (United States) 174 174 174
Subtotal 1,862 1,861 2,201
Other refineries in which the Group has equity stakes(d) 226 502 393
Total 2,088 2,363 2,594
(a) For refineries not 100% owned by TOTAL, the capacity shown is TOTAL’s equity share of the site’s overall refining capacity.
(b) TOTAL’s stake was 71.9% until September 30, 2010.
(c) TOTAL’s stake is 55%.
(d) TOTAL has equity stakes ranging from 12% to 50% in ten refineries (five in Africa, two in Italy, one in Germany, one in Martinique and one in China). TOTAL divested its stake in the
Indeni refinery in Zambia in 2009. Since October 2010, the amounts include the Group’s share in the Rome and Trecate refineries through its stake in TotalErg. TOTAL divested its stake
in CEPSA (four refineries) in 2011.
3.1.1.2. Refined products
The table below sets forth by product category TOTAL’s net share of refined quantities produced at the Group’s refineries(a):
(kb/d) 2011 2010 2009
Gasoline 350 345 407
Aviation fuel(b) 158 168 186
Diesel and heating oils 804 775 851
Heavy fuels 179 233 245
Other products 335 359 399
Total 1,826 1,880 2,088
(a) For refineries not 100% owned by TOTAL, the production shown is TOTAL’s equity share of the site’s overall production.
(b) Avgas, jet fuel and kerosene.
Registration Document 2011. TOTAL
39
2 Business overview
Downstream
3.1.1.3. Utilization rate
The tables below set forth the utilization rate of the Group’s refineries:
On crude and other feedstock(a)(b) 2011 2010 2009
France 91% 64% 77%
Rest of Europe (excluding CEPSA and TotalERG) 77% 85% 88%
Americas 81% 83% 77%
Asia 67% 81% 80%
Africa 80% 76% 77%
CEPSA and TotalERG(c) 83% 94% 93%
Average 83% 77% 83%
(a) Including equity share of refineries in which the Group has a stake.
(b) Crude + crackers’ feedstock/capacity and distillation at the beginning of the year.
(c) For CEPSA in 2011: calculation of the utilization rate based on production and capacity prorated on the first seven months of the year.
On crude(a)(b) 2011 2010 2009
Average 78% 73% 78%
(a) Including equity share of refineries in which the Group has a stake.
(b) Crude/capacity and distillation at the beginning of the year.
3.1.2. Marketing
TOTAL is one of the leading marketers in Western Europe (1).
The Group is also the largest marketer in Africa, with a market
share of nearly 14%(2).
TOTAL markets a wide range of specialty products produced from its
refineries and other facilities. TOTAL is among the leading companies
in the specialty products market, in particular for lubricants, LPG,
jet fuel, special fluids, bitumen, heavy fuels and marine fuels, with
products marketed in approximately 150 countries(3).
3.1.2.1. Europe
In Europe, TOTAL has a network of more than 9,400 service
stations in France, Belgium, the Netherlands, Luxembourg and
Germany, as well as in Italy through its share in TotalErg (49%).
TOTAL also operates a network of 615 AS24-branded service
stations dedicated to commercial transporters.
TOTAL is among the leaders in Europe for fuel-payment cards, with
approximately 3.5 million cards issued in twenty-seven European
countries.
In Western Europe, TOTAL continued to optimize its Marketing
business in 2011.
– In France, the network benefits from a wide number of service
stations and a diverse selection of products (such as the Bonjour
convenience stores and car washes). Nearly 2,000 TOTAL-
branded service stations and 270 Elf-branded service stations
are operated in France. TOTAL also markets fuels at nearly 1,800
Elan-branded service stations, generally located in rural areas.
In October 2011, TOTAL launched Total access, a new service
station concept combining low prices with TOTAL brand fuel
and service quality. The Total access network will be made up
of around 600 service stations in France, including the 270
Elf-branded service stations that will be rebranded as Total
access. The project is expected to be fully implemented by 2014.
At the end of 2011, TOTAL finished implementing the project
to adapt oil logistics operations announced in January 2010.
The Pontet and Saint Julien oil depots were closed in
October 2010. Operatorship of the Hauconcourt depot was
transferred to a third party in October 2010. In July 2011,
operatorship of the Le Mans oil depot was transferred to
a third party and the Ouistreham oil depot was divested.
In January 2010, TOTAL also divested half of its stake (reduced
from 50% to 25%) in Dépôts Pétroliers de La Corse and
transferred operatorship. Dyneff and TOTAL’s logistics assets
in Port La Nouvelle were pooled in December 2011 under the
umbrella of new company Entrepôt Pétrolier de Port La Nouvelle,
which was created in July 2011.
In 2012, TOTAL is expected to complete the adaptation of oil
logistics operations by implementing the project announced
in September 2011. In the first half of 2012, the Brive and
Chambéry depots are expected to be closed, and operatorship
of the Lorient and Lyon depots is expected to be transferred to
third parties. At the same time, TOTAL is expected to divest 24%
of its current 50% stake in Entrepôt Pétrolier de Lyon.
The Honfleur depot, which belongs to wholly-owned TOTAL
subsidiary BTT, is expected to be closed in the second half
of 2012.
– In Italy, as part of the optimization of the Group’s downstream
portfolio in Europe, TotalErg (TOTAL, 49%) was created in
autumn 2010 through the merger of Total Italia and ERG Petroli.
TotalErg has become the third largest operator in the Italian
market with a network market share of nearly 13%(4) and more
than 3,350 service stations.
– In the United Kingdom, TOTAL announced in June 2011 that
it had signed an agreement to sell its network of service stations
and its fuel and heating oil marketing business in the United
Kingdom, the Channel Islands and the Isle of Man. This sale was
closed in October 2011. TOTAL continues to operate in specialty
products in the United Kingdom, particularly lubricants and
aviation fuel.
(1) Based on publicly available information, quantities sold.
(2) Market share for the markets where the Group operates, based on publicly available information, quantities sold.
(3) Including via national distributors.
(4) PFC Energy, Unione Petrolifera, based on quantities sold.
40
TOTAL. Registration Document 2011
Business overview 2
Downstream
In Northern, Central and Eastern Europe, the Group is
developing its positions primarily in the specialty products market.
In 2011, TOTAL continued to expand its direct presence in the
growing markets of Eastern Europe, in particular for lubricants.
The Group intends to accelerate the growth of its specialty
products business in Russia, Ukraine and the Balkans through the
development of its direct presence in these markets since 2008.
AS24, which is active in twenty-six European countries, continued
to expand its network, exceeding the milestone of 600 service
stations and opening new outlets in two new countries, Ukraine
(2011) and Georgia (early 2012). The AS24 network is expected to
continue to grow, mainly through expansion in the Mediterranean
Basin and Russia, by strengthening its position in strategic
countries and through its toll payment card service, which covers
more than seventeen countries.
3.1.2.2. Africa & the Middle East
TOTAL is the leading marketer of petroleum products on the African
continent, with a market share of 14% (1). Following the acquisition
of marketing and logistics assets in Kenya and Uganda in 2009,
the Group runs more than 3,500 service stations in more than forty
countries and operates major networks in South Africa, Nigeria,
Kenya and Morocco. As part of the optimization of its portfolio,
the Group divested its subsidiary in Benin in late 2010.
TOTAL also has a large presence in Turkey and Lebanon, and is
developing a network of large service stations in Jordan.
In the Middle East, the Group is active mainly in the specialty
products market and is pursuing its growth strategy in the region,
notably through the production and marketing of lubricants.
3.1.2.3. Asia-Pacific
At year-end 2011, TOTAL was present in nearly twenty countries
in the Asia-Pacific region, primarily in the specialty products market.
The Group is developing its position as a fuel marketer in the
region, in particular in China. TOTAL operates service stations in
Pakistan, the Philippines, Cambodia, Indonesia, and is a significant
player in the Pacific Islands.
In China, the Group operated nearly 160 service stations at
year-end 2011 through two TOTAL/Sinochem joint ventures.
In India, TOTAL is expected to open in early 2012 its first
lubricants, bitumen, special fluids and additives technical support
center outside Europe.
In Vietnam, TOTAL continues to strengthen its position in the
specialty products market. The Group has become one of the
leaders in the Vietnamese lubricants market due to the acquisitions
of assets at year-end 2009.
3.1.2.4. Americas
In Latin America and the Caribbean, TOTAL is active in nearly
twenty countries, primarily in the specialty products market.
In the Caribbean, the Group holds a significant position in the fuel
distribution business, which was strengthened by the acquisition
in 2008 of marketing and logistics assets in Puerto Rico, Jamaica
and the Virgin Islands.
In North America, TOTAL markets specialty products, mainly
lubricants, and is continuing to grow with the acquisition at year-
end 2009 of lubricant assets in the province of Quebec in Canada.
3.1.2.5. Sales of refined products
The table below sets forth TOTAL’s sales of refined products by region:
(kb/d) 2011 2010 2009
France 740 725 808
Europe, excluding France(a) 1,108 1,204 1,245
United States 47 65 118
Africa 304 292 281
Rest of the World 225 209 189
Total excluding Trading 2,424 2,495 2,641
Trading 1,215 1,281 975
Total including Trading 3,639 3,776 3,616
(a) Including TOTAL’s share in CEPSA (up to end of July 2011) and,
as from October 1, 2010, in TotalErg.
3.1.2.6. Service stations
The table below sets forth the number of service stations of the Group:
As of December 31, 2011 2010 2009
France(a) 4,046 4,272 4,606
Europe, excluding France 5,375 7,790 6,219
of which TotalErg 3,355 3,221 -
of which CEPSA - 1,737 1,734
Africa 3,464 3,570 3,647
Rest of the World 1,934 1,858 1,827
Total 14,819 17,490 16,299
(a) Total, Elf and Elan-branded service stations.
3.1.2.7. Biofuels
TOTAL is active in the biodiesel and biogasoline sectors. In 2011,
TOTAL produced and blended 494 kt of ethanol(2) in gasoline at its
European refineries(3) and several oil depots (compared to 464 kt
in 2010 and 510 kt in 2009) and 1,859 kt of VOME(4) in diesel at its
European refineries(5) and several oil depots (compared to 1,737 kt
in 2010 and 1,655 kt in 2009).
TOTAL, in partnership with the leading companies in this area,
is developing second generation biofuels derived from biomass.
TOTAL is also working with leading worldwide public and private
scientific partners on biochemical and thermochemical biomass
conversion.
The Group is thus participating in French, European and
international bioenergy development programs. As part of this,
TOTAL is involved in two demonstration projects:
– BioTfueL, which aims to develop technology to convert biomass
into biodiesel; and
– Futurol, an R&D project for cellulosic bioethanol, which intends to
develop and promote on an industrial scale a production process
for bioethanol by fermentation of non-food lignocellulosic biomass.
(1) Market share in the countries where the Group operates, based on 2011 publicly available information, quantities sold.
(2) Including ethanol from ETBE (Ethyl-Tertio-Buthyl-Ether) and biomethanol from MTBE (Methyl-Tertio-Butyl-Ether).
(3) CEPSA’s refineries and oil depots are not included in 2011, 2010 and 2009 figures.
(4) VOME: Vegetable-Oil-Methyl-Ester. Including HVO (Hydrotreated Vegetable Oil).
(5) Including Total Erg’s Rome and Trecate refineries in Italy. CEPSA’s refineries and oil depots are not included in 2011, 2010 and 2009 figures.
Registration Document 2011. TOTAL
41
2 Business overview
Downstream
3.1.2.8. Hydrogen and electric mobility
TOTAL is continuing its hydrogen fueling demonstrations as part of
the Clean Energy Partnership in Germany. A new prototype station
is being built in the center of Berlin and is scheduled to open in
February 2012. TOTAL is also involved in the “H2 Mobility” study
underway in Germany, which aims to identify the business model
that would enable the creation of an infrastructure in light of the
potential marketing of fuel cell vehicles between 2015 and 2020.
The number of prototype electric vehicle fueling stations (fast charge)
is increasing. TOTAL now has twelve charging stations in Belgium.
In France, two stations have been completed in the Paris area as
part of the SAVE project, and six are being built in the Netherlands.
3.2. Trading & Shipping
The Trading & Shipping division:
– sells and markets the Group’s crude oil production;
– provides a supply of crude oil for the Group’s refineries;
– imports and exports the appropriate petroleum products for the
Group’s refineries to be able to adjust their production to the
needs of local markets;
– charters appropriate ships for these activities; and
– undertakes trading on various derivatives markets.
3.2.1. Trading
The Trading & Shipping division’s main focus is serving the Group.
In addition, the division’s expertise allows it to extend its scope of
activities beyond its primary focus.
Trading & Shipping’s worldwide activities are conducted through
various wholly-owned subsidiaries, including TOTSA Total Oil
Trading S.A., Total International Ltd, Socap International Ltd,
Atlantic Trading & Marketing Inc., Total Trading Asia Pte, Total
Trading and Marketing Canada L.P., Total Trading Atlantique S.A.
and Chartering & Shipping Services S.A.
TOTAL is one of the world’s largest traders of crude oil and refined products on the basis of volumes traded. The table below sets forth
selected information with respect to the worldwide sales and sources of supply of crude oil and sales of refined products for the Group’s
Trading division for each of the last three years.
Trading of physical volumes of crude oil and refined products amounted to 4.4 Mb/d in 2011.
Trading division’s supply and sales of crude oil and sales of refined products(a)
(kb/d) 2011 2010 2009
Group’s worldwide liquids production 1,226 1,340 1,381
Purchased by the Trading division from the Group’s Exploration & Production division 960 1,044 1,054
Purchased by the Trading division from external suppliers 1,833 2,084 2,351
Total of Trading division’s supply 2,793 3,128 3,405
Sales by Trading division to Group Refining & Marketing division 1,524 1,575 1,752
Sales by Trading division to external customers 1,269 1,553 1,653
Total of Trading division’s sales 2,793 3,128 3,405
Total sales of refined products 1,632 1,641 1,323
(a) Including condensates.
The Trading division operates extensively on physical and derivatives
markets, both organized and over the counter. In connection with its
trading activities, TOTAL, like most other oil companies, uses derivative
energy instruments (futures, forwards, swaps, options) to adjust its
exposure to fluctuations in the price of crude oil and refined products.
These transactions are entered into with various counterparties.
For additional information concerning Trading & Shipping’s
derivatives, see Notes 30 (Financial instruments related to
commodity contracts) and 31 (Market risks) to the Consolidated
Financial Statements.
All of TOTAL’s trading activities are subject to strict internal controls
and trading limits.
In 2011, the oil market tightened; as a result, the oil price rise
accelerated and the structure of crude oil prices flipped from
contango to backwardation (1).
2011 2010 2009 min 2011 max 2011
Brent ICE - 1st Line(a) ($/b) 110.91 80.34 62.73 93.33 (Jan. 07) 126.65 (Apr. 08)
Brent ICE - 12th Line(b) ($/b) 108.12 84.61 70.43 94.20 (Jan. 07) 121.74 (Apr. 29)
Contango/Backwardation time structure (12th-1st) ($/b) -2.79 4.27 7.70 -9.55 (Oct. 14) 2.65 (Feb. 07)
Gasoil ICE - 1st Line(a) ($/t) 933.30 673.88 522.20 767.75 (Jan. 01) 1,053.00 (Apr. 08)
(a) 1st line: Average quotation on ICE Futures for first nearby month delivery.
(b) 12th Line: Average quotation on ICE Futures for twelfth nearby month delivery.
(1) Contango is a term used to describe an energy market in which the anticipated value of the spot price in the future is higher than the current spot price. The reverse situation is described as backwardation.
42
TOTAL. Registration Document 2011
Business overview 2
Downstream
The oil markets had ended 2010 significantly up, driven by the very
strong upturn in demand for oil (+2.8 Mb/d). The outbreak of war in
Libya in February 2011 quickly deprived the oil market of 1.6 Mb/d
of crude supply. On the international markets, the shutdown of
Libyan crude production was aggravated by production losses in
Nigeria (through attacks on oil infrastructure and diversion of the
oil), Angola (with technical problems on several fields), Yemen
(through attacks on oil infrastructure) and Syria (due to the
embargo). The resulting crude oil deficit was offset mainly by Saudi
Arabia, Kuwait and the United Arab Emirates, which all increased
their production considerably, thereby reducing the surplus
available production capacity. Production in Libya gradually started
up again from September 2011 and reached around 0.9 Mb/d at
the end of 2011.
Overall in 2011, OPEC crude oil production was estimated to be
slightly down compared to 2010 (-0.1 Mb/d), as was non-OPEC
crude production (-0.2 Mb/d). The production of other liquids
in 2011 (LPG, LNG, biofuels) rose (+0.5 Mb/d).
With regard to demand, the significant price rise and generally
weaker economic growth than in 2010 slowed growth in oil
demand, which fell from +2.8 Mb/d in 2010 to +0.5 Mb/d in 2011.
In this environment, crude oil prices, which started rising at
the beginning of the year, increased from an average of
approximately $96/b (ICE Brent 1st Line) in January 2011 to $123/b
in April 2011 while the market adjusted to the loss of Libyan supply.
Prices fell slightly in the second half of 2011, particularly under
the effect of the emergency stock release (60 Mb offered, 35 Mb
delivered) of the International Energy Agency (IEA) and the partial
resumption of Libyan production. Crude oil prices remained high
however, reaching an annual average in 2011 of $110.91/b.
As a result of the backwardation in the price structure on the crude
oil market for almost the entire year, 2011 was also marked by a
sharp fall in OECD oil industry inventories through October 2011
(year-on-year, crude -70 Mb and products -46 Mb), which
diminished in the last 2 months of the year with the rise in Libyan
crude production (December 2011 year-on-year, crude -26 Mb
and products -36 Mb).
2011 also saw a widening of the price differential between WTI
crude (confined to the central United States) and Brent crude
(delivered in the North Sea and accessible internationally). While
Brent was experiencing upward pressure due to the balance of
crude oil on the international market, WTI was under downward
pressure from a continuous rise in local production and exports
from Canada, the combination of which exceeded local refining
capacity requirements and potential exports outside the region.
The price of WTI thus rose less quickly than Brent, increasing the
gap to almost -$28/b in mid-October (at the height of the upward
pressure on Brent).
The gap was more than halved at the end of the year, particularly
with the announcement of the planned reversal of the Seaway
pipeline, which should ease the pressure from the surplus of crude
weighing down markets in the central United States.
3.2.2. Shipping
TOTAL’s Shipping division arranges the transportation of crude oil and refined products necessary to develop the Group’s activities. These
needs are met through transactions on the spot market and the development of a balanced time charter policy. It has a rigorous safety
policy that is due mainly to the strict selection of the vessels the division charters. Like a certain number of other oil companies and
shipowners, the Group uses freight rate derivative contracts in its shipping activity to adjust its exposure to freight rate fluctuations.
In 2011, TOTAL’s Shipping division chartered approximately 3,000 voyages to transport approximately 110 Mt of crude oil and refined
products. As of December 31, 2011, it employed a fleet of fifty vessels chartered under long-term or medium-term agreements (including
eight LPG carriers), of which none is single-hulled. The fleet has an average age of approximately five years.
Freight rates average of three representative routes for crude transportation
2011 2010 2009 min 2011 max 2011
VLCC Ras Tanura Chiba-BITR(a) ($/t) 11.99 13.41 10.43 9.32 (Oct. 10) 18.54 (Feb. 15)
Suezmax Bonny Philadelphia-BITR ($/t) 13.86 14.50 12.75 10.23 (Jan. 20) 19.85 (Mar. 22)
Aframax Sullom Voe Wilhemshaven-BITR ($/t) 6.51 6.39 5.20 5.04 (Jan. 17) 9.46 (Mar. 4)
(a) VLCC: Very Large Crude Carrier. BITR: Baltic International Tanker Routes.
2011 was a particularly eventful and difficult period for oil shipping
activities.
On a more global level, the market was buoyed by demand from China,
which is still growing strongly, and to a lesser extent the United States.
During the first half of 2011, events in Japan and North Africa
had a strong impact on crude oil imports. Requirements in Japan
fell suddenly and very markedly, but were quickly restored and
returned to almost pre-crisis levels by the end of 2011. In the end,
the impact on demand for shipping was relatively limited. In the
Mediterranean, the shutdown of Libyan production resulted in the
rebalancing of demand for long-haul VLCC shipments: imports,
particularly to Europe, were offset by supply from further away,
thus increasing the demand for transportation.
Despite this generally favorable demand structure, the freight
market operated at overcapacity for most of 2011. Very few ships
were decommissioned and 2011 saw a steady stream of new
vessels being delivered as a result of the many orders placed by
shipowners in 2007 and 2008.
This situation severely damaged the fundamentals of the freight
market for crude oil transport. Following the extremely cold weather
at the beginning of 2011, which sustained rates for a time, there was
a collapse in the second quarter that left the market at a historic low.
With regard to the product tanker market, the situation remains poor
worldwide, with transatlantic traffic to the United States particularly slow.
Registration Document 2011. TOTAL
43
2 Business overview
Chemicals
4. Chemicals
The Chemicals segment includes Base Chemicals, with
petrochemicals and fertilizers, and Specialty Chemicals, with the
Group’s elastomer processing, adhesives and electroplating
chemistry activities. TOTAL is one of the world’s largest integrated
chemical producers(1).
Chemicals segment key financial data
(M€) 2011 2010 2009
Non-Group sales 19,477 17,490 14,726
Incl. Base Chemicals 12,656 10,653 8,655
Incl. Specialty Chemicals 6,819 6,824 6,071
Adjusted operating income 697 893 249
Adjusted net operating income 775 857 272
Incl. Base Chemicals 373 393 16
Incl. Specialty Chemicals 426 475 279
For the full year 2011, Chemicals segment sales, excluding
intra-Group sales, were €19,477 million, an increase of 11%
compared to 2010.
The adjusted net operating income was €775 million compared to
€857 million in 2010. Petrochemicals benefited from the ramp-up
of its operations in Qatar and South Korea, but saw its margins
decline in the second half of the year in Europe and the United
States. Specialty Chemicals income, excluding impacts of portfolio
changes, remained close to that of 2010.
The ROACE(2) of the Chemicals segment was 10.5% in 2011
compared to 12% in 2010.
2011 consolidated sales by geographic area
In 2011, Chemicals sales were €19.48 billion, compared to
€17.49 billion in 2010 and €14.73 billion in 2009. Europe,
North America and Asia accounted for 61%, 23% and 12%,
respectively, of the Chemicals segment’s sales in 2011, with the
remaining sales (4%) attributable to Africa and Latin America.
North America 23%
Asia 12%
Rest of World 4%
Europe 61%
In October 2011, the Group announced a proposed reorganization
of its Downstream and Chemicals segments. The procedure for
informing and consulting with employee representatives took place
and the reorganization became effective on January 1, 2012.
This led to organizational changes, with the creation of:
– a Refining & Chemicals segment, a large industrial center that
encompasses refining, petrochemicals, fertilizers and specialty
chemicals operations. This segment also includes oil trading
and shipping activities.
– a Supply & Marketing segment, which is dedicated to worldwide
supply and marketing activities in the oil products field.
The Chemicals activities described thereafter, including the data
as of December 31, 2011, are presented based on the organization
in effect up to December 31, 2011.
(1) Données société, sur la base du chiffre d’affaires consolidé.
(2) Calculated based on adjusted net operating income and average capital employed, using replacement cost.
44
TOTAL. Registration Document 2011
Business overview 2
Chemicals
4.1. Base Chemicals
The Base Chemicals division includes TOTAL’s petrochemicals and fertilizers activities.
In 2011, Base Chemicals sales were €12.7 billion, compared to €10.7 billion in 2010 and €8.7 billion in 2009.
4.1.1. Petrochemicals
Breakdown of TOTAL’s main production capacities
(in thousands of tons)
2011
2010
2009
Europe
North
America
Asia and
Middle East(a)
Worldwide
Worldwide
Worldwide
Olefins(b) 4,695 1,195 1,460 7,350 7,190 6,895
Aromatics 2,500 940 770 4,210 4,195 4,195
Polyethylene 1,180 440 520 2,140 2,140 2,040
Polypropylene 1,315 1,175 345 2,835 2,780 2,780
Styrenics(c) 1,150 1,260 730 3,140 2,950 3,090
(a) Including minority interests in Qatar and 50% of Samsung-Total Petrochemicals capacities.
(b) Ethylene, propylene and butadiene.
(c) Styrene and polystyrene.
The petrochemicals business includes base petrochemicals (olefins
and aromatics) and their polymer derivatives (polyolefins and styrenics).
In Europe, the main petrochemical sites are located in
Belgium, in Antwerp (steam crackers, polyethylene) and Feluy
(polypropylene, polystyrene), and in France, in Carling (steam
cracker, polyethylene, polystyrene), Feyzin (steam cracker),
Gonfreville (steam crackers, styrene, polyolefins, polystyrene)
and Lavéra (steam cracker, polypropylene).
In the United States, the main petrochemical sites are located in
Carville, Louisiana (styrene, polystyrene), and in Texas, in Bayport
(polyethylene), La Porte (polypropylene) and Port Arthur (steam
cracker, butadiene).
In Asia, TOTAL owns, in partnership with Samsung, a 50% interest
in the petrochemical site located in Daesan, South Korea (steam
cracker, styrene, paraxylene, polyolefins). The Group is also active
through its polystyrene plants located in Singapore and Foshan
(China).
In Qatar, the Group holds interests in two steam crackers and
several polyethylene lines.
Most of these sites are either adjacent to or connected by pipelines
to Group refineries. As a result, most of TOTAL’s petrochemical
operations are integrated within refining operations.
TOTAL continues to strengthen its leadership positions in the
industry by focusing on the following three main strategic areas:
– In Europe, TOTAL is improving the competitiveness of its
long-established sites notably through cost management, better
energy efficiency at its facilities and increased flexibility in the
choice of feedstock.
In an increasingly competitive environment, the Group launched
two reorganization plans mainly for the Carling (eastern France)
and Gonfreville (northwestern France) sites:
- The first plan, launched in 2006, called for the closure of one
of the steam crackers and the styrene plant at Carling and the
construction of a new world-class (1) styrene plant at Gonfreville
to replace the plant closed in late 2008. The reorganization plan
was completed in the first quarter of 2009.
- The second plan, launched in 2009, is a consolidation project
to improve the sites’ competitiveness. This project includes a
plan to upgrade the Group’s most efficient units by investing
approximately €230 million over three years to increase energy
efficiency and competitiveness of the steam cracker and the
high-density polyethylene unit in Gonfreville, and to consolidate
polystyrene production at the Carling facility. It also includes
the shutdown of structurally loss-making units, effective from
the end of 2009: two low-density polyethylene lines, one in
Carling and one in Gonfreville, and a polystyrene line in
Gonfreville. This reorganization plan also impacted the support
services at both sites and the central services at Total
Petrochemicals France.
Following its sole customer’s termination of the supply
contract for the secondary butyl alcohol produced at the
Notre-Dame-de-Gravenchon facility in Normandy, this dedicated
facility had to be closed in the second half of 2010.
At the end of 2011, TOTAL signed an agreement relating to the
acquisition of 35% of ExxonMobil’s stake in Fina Antwerp Olefins,
Europe’s second largest base petrochemicals (monomers)
production plant. Following approval by the relevant authorities,
the transaction was finalized in February 2012 and TOTAL
became the sole shareholder in Fina Antwerp Olefins on
March 1, 2012. The acquisition will open new opportunities
to strengthen the competitiveness of the assets and to pursue
integration which is one of the foundations of Total’s strategy.
In the United States, TOTAL and BASF purchased in 2011 Shell’s
stake in Sabina, one of the largest butadiene production plants in
the world. TOTAL and BASF are now the only two shareholders in
Sabina, with stakes of 40% and 60%, respectively. This new
structure will allow for increased synergies with the TOTAL refinery
and the jointly-owned steam cracker (TOTAL 40%, BASF 60%)
located on the same site in Port Arthur, Texas.
(1) Facilities ranking among the first quartile for production capacities based on publicly available information.
Registration Document 2011. TOTAL
45
2 Business overview
Chemicals
– TOTAL is continuing to expand in growth areas.
4.1.1.2. Polyolefins
In Asia, the Samsung-Total Petrochemicals Co. Ltd joint venture
(TOTAL, 50%) completed in mid-2011 the first debottlenecking
phase of the units at the Daesan site in South Korea, with the
aim of bringing them to full capacity. This first phase included
increasing the capacity of the steam cracker to 1 Mt/y and the
polyolefin units to 1,150 kt/y.
The second phase is expected to take place in September 2012
and involves increasing the capacity of the paraxylene unit to
700 kt/y.
In addition, to keep up with growth on the Asian markets, two
major investments have been approved for planned start-up
in 2014: a new 240 kt/y EVA (1) unit and a new aromatic unit with
a capacity of 1.5 Mt/y of paraxylene and benzene, the feedstock
of which will be supplied by a condensate splitter that will also
produce jet fuel and diesel. As a result, the site’s paraxylene
production capacity will be increased to 1.8 Mt/y.
TOTAL’s strategy for polyolefins (polyethylene, polypropylene) is
based on lowering the breakeven point of its plants in Europe and
the United States and continuing to differentiate its range of
products, while meeting new market requirements for sustainable
development. The Group is also continuing to expand its activities
in growth areas, mainly through its stakes in joint ventures in South
Korea and Qatar.
Polyethylene
Polyethylene is a plastic resulting from the polymerization of
ethylene produced by the Group’s steam crackers. It is primarily
intended for the packaging, automotive, food, cable and pipe
markets. Margins are strongly influenced by the level of demand
and the price of ethylene. In Europe, margins are impacted by
competition from expanding production in the Middle East, which
benefits from favorable access to ethane, the raw material used
in ethylene production.
In the Middle East, the 700 kt/y paraxylene unit at the Jubail
refinery in Saudi Arabia is under construction. This world-class
unit is mainly intended to supply the Asian market. Start-up is
scheduled for 2013.
2011 was marked by a slowdown in growth in demand in all
geographical areas and by falling margins, more particularly
in the second half. Europe was most affected by this deterioration
in the market environment.
– TOTAL is developing sites in countries with favorable access to
The Group’s sales volumes increased by 2% in 2011.
raw materials.
In Qatar, through its interest in Qatofin and Qapco, TOTAL holds
a 49% interest in a world-class linear low-density polyethylene
plant with a capacity of 450 kt/y in Mesaieed. This unit, operated
by Qatofin, started up in 2009. The Group also holds a 22%
interest in an ethane-based steam cracker in Ras Laffan designed
for processing 1.3 Mt/y of ethylene. The steam cracker started up
in March 2010. In addition, construction of a 300 kt/y low-density
polyethylene line has started at Qapco, in which TOTAL holds a 20%
interest, with start-up scheduled for the second quarter of 2012.
In China, TOTAL and China Power Investment signed in
November 2010 an agreement to study a project to build a
coal-to-olefins plant and a polyolefins plant. TOTAL will bring
to this partnership its expertise in the methanol-to-olefins (MTO)
and olefin cracking process (OCP) technologies tested
extensively at its plant in Feluy, Belgium.
4.1.1.1. Base petrochemicals
Base petrochemicals includes olefins and aromatics (monomers)
produced by the steam cracking of petroleum cuts, naphtha and
LPG, or of gas as well as propylene and aromatics manufactured in
the Group’s refineries. The economic environment for these
activities is strongly influenced by the balance between supply and
demand and changes in feedstock prices, especially naphtha.
The market was buoyant in the first half of 2011, followed by a
significant slowing in volumes and falling margins, mainly in Europe
and the United States, in the second half. Over 2011 as a whole,
TOTAL’s production volumes remained stable.
TOTAL is expanding its positions in Asia and the Middle East with
the start-up of the Ras Laffan steam cracker in 2010 in Qatar and
continued investments to increase capacities in South Korea. In
Europe and the United States, TOTAL is improving energy efficiency
at its sites, strengthening synergies with refining and increasing the
flexibility of the steam cracker feedstock.
Polypropylene
Polypropylene is a plastic resulting from the polymerization of
propylene produced by the Group’s steam crackers and refineries.
It is primarily intended for the automotive, packaging, carpet,
household appliances, fibers and hygiene markets. Margins are
mainly influenced by the level of demand and the availability and
price of propylene.
As with polyethylene, 2011 saw a slowdown in growth in worldwide
demand and falling margins in the second half of the year.
TOTAL’s sales volumes decreased by 2.5% compared to 2010.
4.1.1.3. Styrenics
This business activity includes the production of styrene and
polystyrene. Most of the styrene manufactured by the Group is
used to produce polystyrene, a plastic principally used in food
packaging, insulation, refrigeration, domestic appliances and
electronic devices. Margins are strongly influenced by the level of
polystyrene demand and the price of benzene, which is styrene’s
principal raw material.
The worldwide styrenics market increased by approximately 2%
in 2011, driven by Asia, while the markets in Europe and the United
States remained practically stable. Margins were low on the highly
competitive European and Asian markets, but remained high in
the United States.
TOTAL’s polystyrene sales volumes increased by 4% in 2011.
The Group continues to expand its styrenics business. In Feluy,
Belgium, TOTAL is building a new-generation expandable
polystyrene manufacturing plant. Start-up is scheduled for
early 2013. The expandable polystyrene is intended for the
insulation market, which is experiencing strong growth. In China,
TOTAL doubled the capacity of the Foshan compact polystyrene
plant to 200 kt/y in early 2011.
(1) Ethylene Vinyl Acetate.
46
TOTAL. Registration Document 2011
Business overview 2
Chemicals
4.1.2. Fertilizers
Through its French subsidiary GPN, TOTAL manufactures and
markets nitrogen fertilizers made from natural gas. Margins are
strongly influenced by the price of natural gas.
In 2010 and 2011, GPN’s production was affected by a number
of manufacturing incidents that resulted in long shutdowns for
maintenance of the Grandpuits and Rouen ammonia plants in
France and reduced production at the downstream plants (nitric
acid, urea and ammonium nitrate). These incidents adversely
affected the results of GPN, which could not take advantage
of favorable global market conditions.
GPN’s plans were strengthened through two major investments:
the construction of a nitric acid plant in Rouen, which started up in
the second half of 2009, and a urea plant in Grandpuits, the start-
up of which was ongoing in March 2012. This additional urea
production will enable GPN to position itself in the growing markets
of products that contribute to reducing nitrogen oxide emissions (1):
4.2. Specialty Chemicals
TOTAL’s Specialty Chemicals division includes elastomer
processing (Hutchinson), adhesives (Bostik) and electroplating
chemistry (Atotech). It serves the automotive, construction,
electronics, aerospace and convenience goods markets, for which
marketing, innovation and customer service are key drivers. TOTAL
markets specialty products in more than sixty countries and intends
to develop by combining organic growth and targeted acquisitions.
This development is focused on high-growth markets and the
marketing of innovative products with high added value that meet
the Group’s sustainable development approach.
The Hutchinson consumer goods business (Mapa® and Spontex®)
was divested in spring 2010. Sales for the divested lines of
business were €530 million in 2009.
The Cray Valley coating resins and Sartomer photocure resins
businesses were divested in July 2011. Sales for the divested lines
of business were €860 million in 2010. The structural and
hydrocarbon resins business lines were kept and have been
incorporated into the Petrochemicals division.
Specialty Chemicals enjoyed a favorable climate in the first three
quarters of 2011 due to the resilience of the European and North
American markets and continued growth in the emerging countries.
The situation deteriorated in the fourth quarter. In this context and
on a like-for-like basis (excluding Mapa Spontex and Resins), 2011
sales were €5.3 billion, a 9% increase compared to 2010.
DeNOX® for industrial applications and Adblue® for transportation
applications. An Adblue unit has been maintained at Oissel waiting
for the start-up of the Grandpuits plant.
In France, three obsolete nitric acid units in Rouen and Mazingarbe
were closed in 2009 and 2010.
GPN’s mines and quarries business at the Mazingarbe site was
divested in January 2011. Sales for the divested lines of business
were €30 million in 2010.
In November 2011, the Group initiated the process of divesting its
stake (50%) in Pec-Rhin. Having exercised its pre-emptive right on
its partner’s 50%, GPN signed an agreement for the complete
divestment of Pec-Rhin. Following approval by the relevant
authorities, the disposal was finalized in January 2012.
These actions are intended to improve the competitiveness of GPN
by regrouping its operations at two sites that have production
capacity greater than the European average.
Hutchinson has eighty production sites worldwide(2), including
fifty-two in Europe, fifteen in North America, seven in South
America, five in Asia and one in Africa.
Hutchinson’s sales were €2.99 billion in 2011, up 10% compared
to 2010. Sales for the automotive business increased 11% due to
stable sales on the European and North American markets and
increased sales on the Latin American and Chinese markets. On
the industrial markets, sales increased at a lower rate because of
the decline in the business planes, helicopters and defense
markets, while sales on other industrial markets (e.g. civil aviation,
railway, and offshore) saw similar rises to the automotive business.
To strengthen its position in the aerospace industry, in late 2008
Hutchinson acquired Strativer, a French company specialized in the
growing composite materials market, and, in early 2011,
Hutchinson acquired Kaefer, a German company specialized in
aircraft interior equipment (insulation, ventilation ducts, etc.). In the
automotive sector, in April 2011 Hutchinson acquired Keum-Ah, a
South Korean company specialized in fluid transfer systems.
Hutchinson continues to develop in expanding markets, primarily
Eastern Europe, South America and China, relying notably on the
Brasov (Romania), Lodz (Poland), Sousse (Tunisia) and Suzhou
(China) sites and on the Casa Branca site (Brazil) opened in 2011.
4.2.2. Adhesives
4.2.1. Elastomer processing
Hutchinson manufactures and markets products derived from
elastomer processing that are principally intended for the
automotive, aerospace and defense industries.
Hutchinson, among the industry’s leaders worldwide(2), provides
its customers with innovative solutions in the areas of fluid transfer,
air and fluid seals, anti-vibration, sound and thermal insulation,
and transmission and mobility.
Bostik is one of the world leaders in the adhesive sector(2) and has
significant positions on the industrial, hygiene and construction
markets, complemented by both consumer and professional
distribution channels.
Bostik has forty-six production sites worldwide, including twenty-one
in Europe, nine in North America, seven in Asia, six in Australia and
New Zealand, two in Africa and one in South America.
In 2011, sales were €1.43 billion, up 3% compared to 2010.
(1) Nitrogen oxide emissions are noxious to the environment and subject to regulation.
(2) Based on publicly available information, consolidated sales.
Registration Document 2011. TOTAL
47
2 Business overview
Chemicals
Bostik continues to strengthen its technological position in the
construction and industrial sectors, pursue its program for innovation
focused on sustainable development, keep up with its expansion in
high-growth countries and improve its operational performance.
2011 saw the start-up of two new production units in Egypt and
Vietnam and the opening of a new regional technology center
for Asia in Shanghai. In addition, Bostik plans to commission a third
production unit in Changshu, China in 2012, which is expected to be
Bostik’s largest plant worldwide. In the United States, Bostik acquired
StarQuartz in 2011, increasing its range of construction adhesives.
Finally, Bostik continued to rationalize its industrial base with the
closure of the Ibos site in France, which came into effect at year-
end 2011.
In order to strengthen its position on the electronics market,
in 2011 Atotech started up a new production unit aimed at the
semiconductors market in Neuruppin (Germany) and acquired
adhesive technologies (molecular interfaces) in the nanotechnology
sector in the United States.
Atotech successfully pursued its strategy designed to differentiate its
products through a comprehensive service provided to its customers
in terms of equipment, processes, design and chemical products
and through the development of green, innovative technologies to
reduce the environmental footprint. This strategy relies on global
coverage provided by its technical centers located near customers.
Atotech intends to continue to develop in Asia, which represents
almost 60% of its global sales.
4.2.3. Electroplating
Atotech is the second largest company in the electroplating
sector based on worldwide sales(1). It is active on the markets
for electronics (printed circuits, semiconductors) and general metal
finishing (automotive, construction, furnishing).
Atotech has sixteen production sites worldwide, including seven in
Asia, six in Europe, two in North America and one in South America.
Atotech’s sales were €0.89 billion in 2011, up 14% compared
to 2010 due to favorable conditions on all of its markets and a
significant increase in equipment sales on the electronics market.
(1) Based on publicly available information, consolidated sales.
48
TOTAL. Registration Document 2011
Business overview 2
Investments
5. Investments
5.1. Major investments over the 2009-2011 period (1)
(M€) 2011 2010 2009
Upstream 21,689 13,208 9,855
Downstream 1,870 2,343 2,771
Chemicals 847 641 631
Corporate 135 81 92
Total 24,541 16,273 13,349
Organic capital expenditure, including net investment in equity
affiliates and non consolidated subsidiaries, amounted to $20.6
billion in 2011 (€14.8 billion(2), compared to $15.8 billion in 2010
(€11.9 billion). In addition to this, $12.3 billion (€8.8 billion) was
invested in acquisitions.
TOTAL investment (including acquisitions) therefore rose from $21.6
billion (€16.3 billion) in 2010 to $34.2 billion (€24.5 billion) in 2011.
This increase in capital expenditure comes almost solely from the
Upstream sector. In 2011, the Group continued to develop its major
Exploration-Production projects, and also significantly increased the
amount spent on acquisitions, which came to more than $12 billion
in 2011, compared to less than $5 billion in 2010. These
acquisitions were almost exclusively in the Upstream sector, and
included in particular the purchase of 14.09% of Russian company
Novatek, the acquisition of a stake in shale gas licenses in the Utica
play in the United States, and the increase of the holding in the Fort
Hills (Canada) and Tempa Rossa (Italy) projects. In 2011, TOTAL
also acquired a 60% (now 66%) stake in American company
SunPower, one of the world leaders in solar photovoltaic sector.
5.2. Major investments anticipated
In early 2012, TOTAL announced the launch of three new major
projects: the Ichthys LNG project in Australia (24%), the
development of the Hild field in the Norwegian North Sea (51%,
operator) and the development of the Ofon II offshore field in Nigeria
(40%, operator). The Group also extended its exploration activities
with the acquisition of a 90% stake in two licenses in Mauritania
three licenses in Côte d’Ivoire and one license in Yemen. TOTAL
finalized in February 2012 a farm-in for an interest of 33.33%
in exploration & production licenses in Uganda.
In Refining & Chemicals, at the end of 2011 TOTAL announced that
it had signed an agreement to purchase its partner’s stake in
petrochemical company Fina Antwerp Olefins. The transaction
closed in February 2012; the Group now owns 100% of the entity,
thus strengthening its refining and petrochemical platform in
Antwerp. At the beginning of 2012, the Group also announced the
launch of a major project to increase capacity at its petrochemical
site in Daesan, South Korea (50%).
For the year 2012, TOTAL announced an organic capital
expenditure budget(3) of $24 billion, over 80% of which is dedicated
to the Upstream segment. $20 billion capital expenditure in the
In addition to these acquisitions, capital expenditure in the Upstream
segment was mainly intended to develop new hydrocarbon
production facilities, exploration operations and acquisition of new
licenses. In 2011, development expenditure was devoted primarily
to the following projects: Kashagan in Kazakhstan; Ekofisk in
Norway; the Mahakam area in Indonesia; Pazflor, CLOV and Angola
LNG in Angola; OML 58, Usan and Ofon II in Nigeria; Laggan
Tormore in the United Kingdom; Surmont in Canada; GLNG in
Australia and the Anguille and Mandji projects in Gabon.
In the Downstream segment, capital expenditure was split between
refining and marketing activities (notably for the retail network).
In Refining (approximately $1.4 billion in 2011), it is dedicated to
the maintenance of facilities and safety and to projects to increase the
production of lighter products, add desulphurization capacities, adapt
the refining base to new specifications and improve energy efficiency.
2011 was marked by the completion and start-up of the coker at the
Port Arthur refinery in the United States in the first half of the year,
together with ongoing construction of the Jubail refinery in Saudi
Arabia and the upgrading project at the Normandy refinery in France.
In the Chemicals segment, capital expenditure for 2011 was
approximately 60% for Base Chemicals and 40% for Specialties.
2011 was also marked by a significant rise in asset disposals,
which increased from less than $5 billion in 2010 to almost $11
billion in 2011. In particular, the Group sold its 48.83% stake in
Spanish company CEPSA, and continued with the sale of some
of its Sanofi shares.
Upstream segment is expected to be mainly dedicated to major
development projects, including GLNG in Australia, Surmont in
Canada, the Ekofisk area in Norway and the Mahakam area in
Indonesia, Kashagan in Kazakhstan, the Laggan/Tormore projects in
the United Kingdom, CLOV and Pazflor in Angola, Anguille/Mandji in
Gabon, Ofon II and OML 58 Upgrade in Nigeria and Tempa Rossa in
Italy. 30% of the Upstream segment’s overall capital expenditure
budget is expected to be dedicated to producing assets, 40% is
intended for projects that are to start up between 2012 and 2015,
and the remaining 30% should be devoted to growth beyond 2015.
In the Refining & Chemicals segment, the $3 billion capital
expenditure budget(3) is expected to be dedicated to the refining,
petrochemicals and specialty chemicals businesses. 2012 should
be marked in particular by the ramp-up of major projects, which are
expected to receive over $1.9 billion in investment. These include
the ongoing construction of the Jubail refinery in Saudi Arabia and
the upgrading of the Normandy platform, which represent
investments in both refining and petrochemicals. A significant portion
of the business unit’s budget will also be allocated to maintenance
and safety, which are vital to this type of industrial activity.
(1) Major acquisitions and disposals for fiscal years 2009 to 2011 are detailed in Note 3 to the Consolidated Financial Statements of this Registration Document.
(2) Based on average exchange rates for 2011 of $1.392/€
(3) Including net investments in equity affiliates and non-consolidated companies, excluding acquisitions and divestments, based on €1 = $1.40 for 2012.
Registration Document 2011. TOTAL
49
2 Business overview
Organizational structure
The Supply & Marketing division has a more than $1 billion capital
expenditure budget(1) for 2012, to finance in particular the service
station network, logistics, specialty production and storage facilities
(lubricants, LPG, etc.), and a number of storage facilities on
customers’ premises. The majority of the Supply & Marketing
budget will be allocated to growth areas (Africa, the Middle East,
Asia, and Latin America).
Beyond 2012, TOTAL plans to make sustained investments to
support the growth of its activities, prioritizing the Upstream segment.
TOTAL self-finances most of its capital expenditure from cash flow
from operations (see the consolidated statement of cash flow,
Chapter 9, point 5), which is essentially increased by accessing the
bond market on a regular basis, when conditions on the financial
markets are favorable (see Note 20 to the Consolidated Financial
Statements, Chapter 9, point 7). However, capital expenditure for
joint ventures between TOTAL and external partners are generally
funded through project financing.
For 2012, the Group has also announced that it wishes to divest
certain assets from its portfolio, and its budget provides for asset
disposals worth over $4 billion more than planned acquisitions.
In February 2012, TOTAL announced that it had signed an agreement
to sell its Colombian subsidiary which holds stakes in the Cusiana
mature oil field and the OAM and ODC pipelines in Colombia.
As part of certain project financing arrangements, TOTAL S.A.
has provided guarantees. These guarantees (“Guarantees given on
borrowings”) as well as other information on off-balance sheet
commitments and contractual obligations for the Group appear
in Note 23 to the Consolidated Financial Statements (Chapter 9,
point 7). The Group does not currently consider that these
guarantees, or any other off-balance sheet arrangements of
TOTAL S.A. nor any other members of the Group, currently have
or are reasonably likely to have in the future a material effect
on the Group’s financial situation, revenues or expenses, liquidity,
capital expenditure or capital resources.
6. Organizational structure
6.1. Position of the Company within the Group
TOTAL S.A. is the Group’s parent company. As of December 31, 2011,
there were 870 consolidated subsidiaries, of which 783 were fully
consolidated and 87 were accounted for under the equity method.
informing and consulting with employee representatives took place
and the reorganization became effective on January 1, 2012.
This led to organizational changes, with the creation of:
The decision of TOTAL S.A.’s major subsidiaries to declare
dividends is made by their relevant shareholders’ meetings and is
subject to the provisions of applicable local laws and regulations.
As of December 31, 2011, there is no restriction under such
provisions that would materially restrict the distribution to
TOTAL S.A. of the dividends declared by those subsidiaries.
As of December 31, 2011, the Group’s businesses were organized
as indicated on the chart in paragraph 8 of this Chapter.
In October 2011, the Group announced a proposed reorganization
of its Downstream and Chemicals segments. The procedure for
– a Refining & Chemicals segment, a large industrial center that
encompasses refining, petrochemicals, fertilizers and specialty
chemicals operations. This segment also includes trading and
shipping activities;
– a Supply & Marketing segment, which is dedicated to worldwide
supply and marketing activities in the oil products field.
The Group’s businesses receive assistance from corporate divisions
(Finance, Legal, Ethics, Insurance, Strategy & Business Intelligence,
Human Resources and Communications) that are grouped within
the parent company, TOTAL S.A.
6.2. Major subsidiaries
A list of the major subsidiaries directly or indirectly held by the Company is given in Note 35 to the Consolidated Financial Statements
(Scope of Consolidation) in Chapter 9, point 7 of this Registration Document.
(1) Including net investments in equity affiliates and non consolidated companies, excluding acquisitions and divestments, based on €1=$1.40 for 2012.
50
TOTAL. Registration Document 2011
Business overview 2
Property, plant and equipment
7. Property, plant and equipment
TOTAL has freehold and leasehold interests in over 130 countries
throughout the world. Operations in properties, oil and gas fields or
any other industrial, commercial or administrative facility, as well as
the production capacities and utilization rates of these facilities, are
described in this Chapter for each business segment (Upstream,
Downstream, Chemicals).
A summary of the Group’s property, plant and equipment and their
main related expenses (depreciation and impairment) is included in
Note 11 to the Consolidated Financial Statements (section 9).
Minimum royalties from finance lease agreements regarding
properties, service stations, vessels and other equipment are given
in Note 22 to the Consolidated Financial Statements (Chapter 9).
Information about the Company’s environmental policy, in particular
that related to the Group’s industrial sites or facilities, is presented
in Chapter 12 - Corporate social responsibility of this Registration
Document.
Registration Document 2011. TOTAL
51
2 Business overview
Organization chart as of December 31, 2011
8. Organization chart as of December 31, 2011
Ethics Committee
CHAIRMAN AND CEO
MANAGEMENT COMMITTEE
EXECUTIVE COMMITTEE
Corporate Affairs
Purchasing
Internal Control and Audit
Sustainable Development & Environment
Public affairs
Human Resources
Top Executive management
Corporate Security
Industrial Safety
UPSTREAM
Exploration
& Production
Gas & Power
Northern Europe
Exploration
Gas
Infrastructure
Technical Affairs,
R&D
Finance,
Human
Resources,
Legal Affairs
Africa
Development
Electricity
New Energies
Liquefied
Natural Gas
Trading
& Marketing
Strategy,
Markets,
Informations
Systems
Middle East
Operations
Americas
Asia-Pacific
Strategy -
Business
Development -
Engineering -
R&D
Finance
& Information
Systems
Continental
Europe
& Central Asia
Human
Resources
& Internal
Communications
52
TOTAL. Registration Document 2011
Organization chart as of December 31, 2011
Business overview 2
Finance
Finance
Insurance
Information
Technology
Telecommunications
Advisers
to the Chairman
and CEO
Communications
Legal Affairs
Scientific
Development
Strategy
& Business
Intelligence
DOWNSTREAM
Refining
& Marketing
Trading
& Shipping
CHEMICALS
Chemicals
Refining
Africa
Middle East
Crude Oil
Trading
Products
& Derivatives
Trading
Petrochemicals
Administration
Marketing
Europe
Asia
Pacific
Products
Trading
Shipping
Specialties
Administration
Human
Resources
& Internal
Communications
Strategy
Development
Research
Rubber
processing
(Hutchinson)
Human
Resources
&
Communications
Adhesives
(Bostik)
Resins
(Cray Valley,
Sartomer, CCP)
Electroplating
(Atotech)
Fertilizers
(GPN)
Registration Document 2011. TOTAL
53
2 Business overview
Organization chart as of February 29, 2012
9. Organization chart as of February 29, 2012
Ethics Committee
CHAIRMAN AND CEO
MANAGEMENT COMMITTEE
EXECUTIVE COMMITTEE
Corporate Affairs
Purchasing
Internal Control and Audit
Sustainable Development & Environment
Top Executive management
Public affairs
Human resources
Corporate Security
Industrial Safety
Upstream Segment
Exploration
& Production
Gas & Power
Northern Europe
Exploration
Gas
Infrastructure
Technical Affairs,
R&D
Finance,
Human
Resources,
Legal Affairs
Africa
Development
Electricity
New Energies
Liquefied
Natural Gas
Trading
& Marketing
Total
Integrated
Energy
solutions
Strategy,
Markets,
Informations
Systems
Hygiene
Safety
Environment
Middle East
Operations
Americas
Asia-Pacific
Strategy -
Business
Development -
Engineering -
R&D
Finance
&
Information
Systems
Continental
Europe
& Central Asia
Human
Resources
& Internal
Communications
54
TOTAL. Registration Document 2011
Organization chart as of February 29, 2012
Business overview 2
Finance
Finance
Insurance
Information
Technology
Telecommunications
Advisers
to the Chairman
and CEO
Communications
Legal Affairs
Scientific
Development
Strategy
& Business
Intelligence
Refining & Chemicals Segment
Supply & Marketing Segment
Trading
& Shipping
Refining
& Chemicals
Supply
& Marketing
Crude Oil
Trading
Products &
Derivatives
Trading
Refining
Chem base
Europe
Health Security
Environment
Strategy
Development
Research
Administration
Shipping
Refining
Petrochemicals
Eastern
hemisphere
Manufacturing
& Projects
Division
Human
Resources
Hygiene Safety
Environment
Supply
& logistics
Europe
Specialities,
ALC,
ENCO and CEI
Africa
Middle-east
Asia
Pacific
Refining
Petrochemicals
Americas
Strategy
Development
Research
Polymers
Administration
Adhesives
(Bostik)
Electroplating
(Atotech)
Fertilizers
(GPN)
Rubber
processing
(Hutchinson)
DOWNSTREAM
Registration Document 2011. TOTAL
55
56
TOTAL. Registration Document 2011
Management Report 3
Management Report
The Management report was approved by the Board of Directors on February 9, 2012
and has not been updated with subsequent events.
1. Summary of results and financial position 58
1.1. Overview of the 2011 fiscal year for TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
1.2. 2011 Group results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
1.3. Upstream results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
1.4. Downstream results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
1.5. Chemicals results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
1.6. TOTAL S.A. 2011 results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
1.7. Proposed dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
2. Liquidity and capital resources 63
2.1. Long-term and short-term capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
2.2. Cash flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
2.3. Borrowing requirements and funding structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
2.4. External financing available . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
2.5. Anticipated sources of financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65
3. Research & Development 65
3.1. Exploration & Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65
3.2. Gas & Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
3.3. Refining & Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
3.4. Petrochemicals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
3.5. Specialty Chemicals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
3.6. Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
3.7. R&D organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
4. Trends and outlook 67
4.1. Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
4.2. Risks and uncertainties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68
4.3. Sensitivity of the 2012 results to market environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68
Registration Document 2011. TOTAL
57
3 Management Report
Summary of results and financial position
1. Summary of results and financial position
1.1. Overview of the 2011 fiscal year for TOTAL
The year 2011 witnessed a number of geopolitical events that
put pressure on market supplies. Despite the economic slowdown,
demand for oil products continued to rise, fuelled by the growth
of emerging markets. Pressure on supply, plus rising demand,
resulted in a sharp increase in the price of crude oil. The average
price of Brent in 2011 was $111/b, compared with $80/b in 2010.
Gas spot prices continued to rise in Europe and Asia in 2011,
mainly due to increased demand on Asian markets. Spot prices
for gas in the United States remained very low, due to the
continued rise in production, driven by the development of
non-conventional gases.
Despite the gradual adjustment of refining capacity, the
overcapacity that has existed in the European refining market
since 2009 continued into 2011, due to low demand in Europe.
Refining margins dropped to an average of $17/t, compared
with $27/t in 2010 (1). In the first half of 2011, the Chemicals
segment enjoyed a globally favorable environment, which has
deteriorated since then. In the second half of the year,
Petrochemicals and Specialty Chemicals saw their margins shrink
due to the drop in demand caused by the economic slowdown.
In this environment, TOTAL’s adjusted net income amounted
to €11.4 billion, up 11% on 2010. This result essentially reflects
a better Upstream environment, while the Downstream and
Chemicals segments were faced with more difficult conditions
than in 2010. The Upstream segment’s 2011 adjusted net
operating income of €10.4 billion was up 21% compared with
the previous year due to rising prices, but was also negatively
impacted by the €-$ exchange rate. The Downstream segment’s
adjusted net operating income dropped by 7%. This result can
be explained in particular by the impact of reduced refining margins
and the sale of the Group’s stake in CEPSA, which were partially
offset by an improvement in operational performance. The
Chemicals segment’s result dropped by 10% compared with 2010,
due to the more difficult market environment at the end of the year
and the asset sales in 2011 (resins, CEPSA).
The year 2011 saw numerous acquisitions and asset sales,
reflecting the Group’s ambition to optimize its portfolio by creating
value from certain mature assets and by developing its Upstream
assets with high potential for growth.
In the Upstream segment, three major discoveries in Azerbaijan,
Bolivia and French Guiana were the first results of the Group’s
bolder exploration strategy. The year 2011 also witnessed
the successful start-up of the Pazflor deep-offshore platform
in Angolan waters, a project operated by TOTAL that illustrates
the Group’s expertise in the development of major projects.
Five new major projects, including the Ichthys LNG project
in Australia (TOTAL 24%), were also launched, in order to secure
growth in the years to come.
Still in the Upstream segment, 2011 also saw the announcement
of the acquisition of a 14.09% stake in the Russian company
Novatek and an increase of the Group’s stakes in the Fort Hills
project in Canada and in Tempa Rossa in Italy. At the end of 2011,
the Group announced its entry into the Utica shale gas and
condensates deposit in the United States. The Group continued
to extend its oil and gas acreage by acquiring stakes in promising
exploration areas, such as the pre-salt blocks in the Kwanza basin
in Angola, and by acquiring stakes in deposits that have already
been discovered, such as the Yamal LNG project in Russia.
At the same time, in 2011, TOTAL disposed of certain mature
or non-strategic Upstream assets, including its exploration-
production subsidiary in Cameroon and its stakes in pipelines
in Colombia.
In the realm of new energies, TOTAL acquired in 2011 a 60%
stake (now, 66%) in the U.S. company SunPower, to become
one of the leaders in the solar industry. Although currently
in the consolidation phase, this industry offers opportunities
for strong growth.
In the Downstream and Chemicals segments, TOTAL deployed
its strategy of increasing the competitive performance
of its activities, scaling down its exposure to mature zones, mainly
Europe, and bolstering its presence in high-growth areas.
Consequently, 2011 saw the start-up of the deep-conversion unit
(or coker) in Port Arthur in the United States, the continued
modernization of the refinery and the petrochemicals platform
in Normandy, France, and the construction of the Jubail refinery
in Saudi Arabia. The Group also continued to scale down
its refining capacity in Europe, by selling off its stake in
the Spanish company CEPSA.
TOTAL benefited from the rise in its operational cash flow and
the €8 billion inflows from asset sales in 2011 to fund on increase
in its investment program, while maintaining a dividend of €2.28
per share, which will be submitted for approval to the Shareholders’
meeting on May 11, 2012. The balance sheet remained strong,
with a ratio of net debt to equity of 23% at the end of 2011,
compared with 22% at the end of 2010.
In terms of operations, 2011 saw the continued improvement
of safety performance, with a 15% drop in the Group-wide TRIR (2)
compared with 2010.
On the Marketing front, in 2011, the Group continued its
optimization drive by selling off its distribution activities in
the United Kingdom and launching a program to modernize part
of its service station network in France with the Total access
program. In Specialty Chemicals, the Group sold part
of its Resins activity.
A restructuring of the Downstream and Chemicals sectors
was announced in October 2011. The deployment of this project
led to organizational changes on January 1, 2012, with
the creation of:
(1) Based on TOTAL’s “European Refining Margin Indicator” (ERMI).
(2) Total Recordable Injury Rate.
58
TOTAL. Registration Document 2011
Summary of results and financial position
Management Report 3
– a Refining & Chemicals segment, a large industrial base that
encompasses refining, petrochemicals, fertilizers and specialty
chemicals operations. This segment also includes oil trading
and shipping activities.
of the Group’s technological expertise in the development of oil
and gas resources and the development of solar, biomass, carbon
capture and storage technologies in order to contribute to changes
in the global energy mix.
– a Supply & Marketing segment, which is dedicated to worldwide
supply and marketing activities in the oil products field.
The process initiated in 2004 to increase R&D budgets continued
with expenditures in 2011 of €776 million, up 9% compared
to 2010, with the aim of, in particular, the continued improvement
Finally, in 2011, TOTAL reasserted the priority on safety and the
environment as part of its operations throughout its business.
For all of its projects conducted in a large number of countries,
the Group puts an emphasis on corporate social responsibility
(CSR) challenges and the development of the local economies.
1.2. 2011 Group results
(M€) 2011 2010 2009
Sales 184,693 159,269 131,327
Adjusted operating income from business segments(a) 24,409 19,797 14,154
Adjusted net operating income from business segments(a) 12,263 10,622 7,607
Net income (Group share) 12,276 10,571 8,447
Ajusted net income (Group share)(a) 11,424 10,288 7,784
Fully-diluted weighted-average shares (millions) 2,257.0 2,244.5 2,237.3
Adjusted fully-diluted earnings per share (euros)(a)(b) 5.06 4.58 3.48
Dividend per share (euros)(c) 2.28 2.28 2.28
Net-debt-to-equity ratio (as of December 31) 23% 22% 27%
Return on average capital employed (ROACE)(d) 16% 16% 13%
Return on equity (ROE) 18% 19% 16%
Cash flow from operations 19,536 18,493 12,360
Investments 24,541 16,273 13,349
Divestments 8,578 4,316 3,081
(a) Adjusted results are defined as income using replacement cost, adjusted for special items, excluding the impact of changes for fair value from January 1, 2011,
and, through June 30, 2010, excluding TOTAL’s equity share of adjustments related to Sanofi.
(b) Based on fully-diluted weighted-average number of common shares outstanding during the period.
(c) Dividend 2011 is subject to the approval by the Shareholder’s Meeting on May 11, 2012.
(d) Based on adjusted net operating income and average capital employed at replacement cost (excluding after-tax inventory effect).
Market environment 2011 2010 2009
Exchange rate (€-$) 1.39 1.33 1.39
Brent ($/b) 111.3 79.5 61.7
European Refinery Margin Indicator (ERMI)(a) ($/t) 17.4 27.4 17.8
(a) ERMI is an indicator intended to represent the margin after variable costs for a hypothetical complex refinery located around Rotterdam in Northern Europe. The indicator margin may
not be representative of the actual margins achieved by TOTAL in any period because of TOTAL’s particular refinery configurations, product mix effects or other company specific
operating conditions.
Adjustments to operating income from business segments
(M€) 2011 2010 2009
Special items affecting operating income from the business segments (873) (1,394) (711)
Restructuring charges - - -
Impairments (781) (1,416) (391)
Other (92) 22 (320)
Effect of change in fair value 45 - -
Pre-tax inventory effect (FIFO vs, replacement cost) (a) 1,215 993 2,205
Total adjustments affecting operating income from the business segments 387 (401) 1,494
(a) See note 1N to the Consolidated Financial Statements.
Registration Document 2011. TOTAL
59
3 Management Report
Summary of results and financial position
Adjustments to net income (Group share)
(M€) 2011 2010 2009
Special items affecting net income (Group share) (14) (384) (570)
Gain on asset sales 1,538 1,046 179
Restructuring charges (122) (53) (129)
Impairments (1,014) (1,224) (333)
Other (416) (153) (287)
Equity share of adjustment items related to Sanofi(a) - (81) (300)
Effect of changes in fair value 32 - -
After-tax inventory effect (FIFO vs, replacement cost(b)) 834 748 1,533
Total adjustments to net income (Group share) 852 283 663
(a) Effective July 1, 2010, Sanofi is no longer treated as an equity affiliate. TOTAL’s share in Sanofi was 3.2% on December 31, 2011, 5.5% on December 31, 2010, and 7.4% on December 31, 2009.
(b) See note 1N to the Consolidated Financial Statements.
1.2.1. Sales
1.2.3. Net income (Group share)
Consolidated sales increased by 16% to €184,693 million in 2011
from €159,269 million in 2010.
1.2.2. Operating Income
Compared to the full year 2010, the 2011 oil market environment
was marked by a 40% increase in the average Brent price
to 111.3 $/b and a 27% increase in the average realized price
of gas to 6.53 $/Mbtu. The ERMI fell to 17.4 $/t in 2011
from 27.4 $/t in 2010.
The euro-dollar exchange rate was 1.39 $/€ compared to 1.33 $/€
on average in 2010.
In this environment, the adjusted operating income from the business
segments was 24,409 M€, an increase of 23% compared to 2010 (1).
Expressed in dollars (2), adjusted operating income from the business
segments was 34.0 B$, an increase of 29% compared to 2010,
essentially due to the positive effect of higher hydrocarbon prices
on the performance of the Upstream.
The effective tax rate (3) for the business segments was 57.9%
compared to 56.0% in 2010.
The adjusted net operating income from the business segments
was €12,263 million compared to €10,622 million in 2010,
an increase of 15%.
Expressed in dollars, adjusted net operating income from
the business segments increased by 21%. The lower relative
increase in adjusted net operating income from the business
segments compared to the increase in adjusted operating income
from the business segments is mainly due to the increase in the
effective tax rate for the business segments.
Adjusted net income increased by 11% to €11,424 million compared
to €10,288 million in 2010. Expressed in dollars, the adjusted net
income increased by 17%.
Adjusted net income excludes the after-tax inventory effect, special
items and effective January 1, 2011, the effect of changes in fair
value:
– The after-tax inventory effect had a positive impact on net
income of €834 million in 2011 compared to a positive impact
€748 million in 2010.
– Changes in fair value had a positive impact on net income
of €32 million in 2011.
– Special items had a negative impact on net income of €14 million
in 2011, comprised mainly of €1,014 million of impairments (mainly
in the European refining and new energies) and €1,538 million
of gains on asset sales. Special items had a negative impact on
net income of €384 million in 2010.
In 2010, the Group’s share of adjustment items related to Sanofi
had a negative impact on net income of €81 million.
Net income (Group share) was €12,276 million compared to
€10,571 million in 2010, an increase of 16%.
The effective tax rate for the Group was 58.4% in 2011 compared
to 55.9% in 2010.
As of December 31, 2011, there were 2,263.8 million fully-diluted
shares compared to 2,249.3 on December 31, 2010.
Adjusted fully-diluted earnings per share, based on 2,257.0 million
fully-diluted weighted-average shares, was €5.06 in 2011
compared to €4.58 in 2010, an increase of 10%.
Expressed in dollars, adjusted fully-diluted earnings per share was
$7.05 in 2011 compared to $6.08 in 2010, an increase of 16%.
(1) Special items affecting operating income from the business segments had a negative impact of €873 million in 2011 and a negative impact of €1,394 million in 2010.
(2) Dollar amounts represent euro amounts converted at the average €-$ exchange rate for the period: 1.3920 $/€ for the full year 2011; 1.3257 $/€ for the full year 2010;
and 1.3948 $/€ for the full year 2009.
(3) Defined as: (tax on adjusted net operating income) / (adjusted net operating income – income from equity affiliates, dividends received from investments and impairments
of acquisition goodwill + tax on adjusted net operating income).
60
TOTAL. Registration Document 2011
1.2.4. Investments - divestments
Investments, excluding acquisitions and including changes
in non-current loans, were €14.8 billion ($20.6 billion) in 2011
compared to €11.9 billion ($15.8 billion) in 2010.
Acquisitions were €8.8 billion ($12.3 billion) in 2011, comprised
essentially of 14.09% of the share capital of Novatek in Russia,
interests in the Fort Hills and Voyageur projects in Canada, assets
in the Utica basin and 60% of SunPower.
Asset sales in 2011 were €7.7 billion ($10.7 billion), comprised
essentially of the Group’s interests in CEPSA and its exploration &
production Cameroon subsidiary, Sanofi shares, interests in the
Joslyn project in Canada and in the Ocensa pipeline in Colombia,
UK Marketing assets and part of the Chemicals resins activities.
1.3. Upstream results
Environment -
liquids and gas price realizations(a)
2011
2010
2009
Brent ($/b) 111.3 79.5 61.7
Average liquids price ($/b) 105.0 763 58.1
Average gas price ($/Mbtu) 6.53 5.15 5.17
Average hydrocarbons price ($/boed) 74.9 56.7 47.1
(a) Consolidated subsidiaries, excluding fixed margin and buy-back contracts.
TOTAL benefited from favorable market conditions for Upstream
in 2011. The Group’s average realizations for liquids and gas
respectively rose by 38% and 27% during 2011 compared to 2010.
Hydrocarbon production
2011
2010
2009
Liquids (kb/d) 1,226 1,340 1,381
Gas (Mcf/d) 6,098 5,648 4,923
Combined production (kboe/d) 2,346 2,378 2,281
Hydrocarbon production was 2,346 kboe/d in 2011, a decrease
of 1.3% compared to 2010, essentially as a result of:
– -1.5% for normal decline, net of production ramp-ups on new
projects;
– +2.5% for changes in the portfolio, integrating the net share of
Novatek production and impact of the sale of interests in CEPSA;
– +1% for the end of OPEC reductions;
– -1.5% for security conditions, mainly in Libya; and
– -2% for the price effect(2).
Year-end reserves
2011
2010
2009
Liquids (Mb) 5,784 5,987 5,689
Gas (Bcf) 30,717 25,788 26,318
Hydrocarbon reserves (Mboe) 11,423 10,695 10,483
Summary of results and financial position
Management Report 3
Net investments (1) were €16.0 billion in 2011, an increase of 34%
compared to €12.0 billion in 2010. Expressed in dollars, net
investments rose by 40% in 2011 up to $22.2 billion.
1.2.5. Profitablity
The full-year 2011 ROACE was 16% at the Group level and 17%
for the business segments, stable compared to 2010. In 2009,
ROACE was 13% for both Group level and business segments.
The return on equity for the Group was 18% in 2011 compared
to 19% in 2010 and 16% in 2009.
Proved reserves based on SEC rules (based on Brent
at 110.96 $/b) were 11,423 Mboe at December 31, 2011. Based
on the 2011 average rate of production, the reserve life is 13 years.
The 2011 proved reserve replacement rate(3), based on SEC rules,
was 185%.
As of year-end 2011, TOTAL has a solid and diversified portfolio of
proved and probable reserves(4) representing more than twenty
years of reserve life based on the 2011 average production rate,
and resources(5) representing more than forty years of reserve life.
Results
(M€)
2011
2010
2009
Adjusted operating income 22,474 17,653 12,879
Adjusted net operating income 10,405 8,597 6,382
Cash flow from operating activities 17,054 15,573 10,200
Adjusted cash flow 17,566 14,136 11,336
Investments 21,689 13,208 9,855
Divestments 2,656 2,067 398
Return on average capital employed 20% 21% 18%
For the full year 2011, adjusted net operating income from
the Upstream segment was €10,405 million compared to
€8,597 million in 2010, an increase of 21%. Expressed in dollars,
adjusted net operating income from the Upstream segment
was $14.5 billion, an increase of 27% compared to 2010,
essentially due to the impact of higher hydrocarbon prices.
Technical costs for consolidated subsidiaries, in accordance with
ASC 932(6), were 18.9 $/boe (7) in 2011, compared to 16.6 $/boe
in 2010.
The return on average capital employed (ROACE(8)) for the Upstream
segment was 20%, for the full-year 2011 compared to 21% for the
full year 2010.
(1) Net investments = investments including acquisitions and changes in non-current loans minus asset sales.
(2) Impact of changing hydrocarbon prices on entitlement volumes.
(3) Change in reserves excluding production (i.e., (revisions + discoveries, extensions + acquisitions – divestments) / production for the period). The reserve replacement rate would be 84% in an
environment with a constant 79.02 $/b oil price, excluding acquisitions and divestments.
(4) Limited to proved and probable reserves covered by E&P contracts on fields that have been drilled and for which technical studies have demonstrated economic development in a 100 $/b
Brent environment, including projects developed by mining.
(5) Proved and probable reserves plus contingent resources (potential average recoverable reserves from known accumulations - Society of Petroleum Engineers - 03/07)
(6) FASB Accounting Standards Codification Topic 932, Extractive industries – Oil and Gas.
(7) Excluding IAS 36 (impairment of assets).
(8) Calculated based on adjusted net operating income and average capital employed, using replacement cost.
Registration Document 2011. TOTAL
61
3 Management Report
Summary of results and financial position
1.4. Downstream results
Refinery throughput(a) 2011 2010 2009
Total refinery throughput (kb/d) 1,863 2,009 2,151
Refined products sales(b) (kb/d) 3,639 3,776 3,616
(a) Includes share of CEPSA through July 31, 2011, and, starting October 2010, of TotalErg.
(b) Includes Trading.
For the full-year 2011, refinery throughput decreased by 7% compared 2010, essentially due to the sale of the Group’s interest in CEPSA
and a higher level of major turnarounds than in 2010.
Results
(M€) 2011 2010 2009
Adjusted operating income 1,238 1,251 1,026
Adjusted net operating income 1,083 1,168 953
Cash flow from operating activities 2,165 1,441 1,164
Adjusted cash flow 1,645 2,405 1,601
Investments 1,870 2,343 2,771
Divestments 3,235 499 133
Return on average capital employed 7% 8% 7%
For the full year 2011, the TOTAL’s European Refining Margin
indicator (ERMI) was 17.4$/t, a decrease of 36% compared to 2010.
For the full year 2011, adjusted net operating income for the
Downstream segment was €1,083 million, a decrease of 7%
compared to €1,168 million in 2010.
Expressed in dollars, the adjusted net operating income for the
Downstream segment was $1.5 billion, a decrease of 3%
compared to 2010. The decrease is essentially due to the negative
impact of the deterioration in refining margins in 2011 while
marketing performed nearly at the 2010 level.
1.5. Chemicals results
The persistence of an unfavorable economic environment for
refining, affecting Europe in particular, led the Group to recognize
an impairment in the Downstream, on European refining assets, in
the third and fourth quarters of 2011 in the amount of €700 million
in operating income and €478 million in net operating income.
These elements have been treated as adjustment items.
The ROACE in the downstream segment was 7% in 2011
compared to 8% in 2010.
(M€) 2011 2010 2009
Sales 19,477 17,490 14,726
Adjusted operating income 697 893 249
Adjusted net operating income 775 857 272
Cash flow from operating activities 512 934 1,082
Adjusted cash flow 871 1,157 442
Investments 847 641 631
Divestments 1,164 347 47
Return on average capital employed 10% 12% 4%
For the full year 2011, Chemicals segment sales, excluding intra-
Group sales, were €19,477 million, an increase of 11% compared
to 2010.
The adjusted net operating income for the Chemicals segment was
€775 million compared to €857 million in 2010. The decrease
reflects essentially the impact of the sale of the Group’s interest
in CEPSA and part of the Resins activities. Globally, for the full-
year 2011, Petrochemicals benefited from ramp-ups in its activities
in Qatar and South Korea but suffered from deteriorating margins
in the second half of the year in Europe and in the United States.
Specialty chemicals, excluding the effect of changes in the portfolio,
maintained results at a level close to the 2010 level.
The ROACE(1) for Chemicals was 10% in 2011 compared to 12%
in 2010.
(1) Calculated based on adjusted net operating income and average capital employed, using replacement cost.
62
TOTAL. Registration Document 2011
Management Report 3
Liquidity and capital resources
1.6. TOTAL S.A. 2011 results
Net income for Total S.A., the parent company, was €9,766 million in 2011 compared to €5,840 million in 2010.
1.7. Proposed dividend
After closing the accounts, the Board of Directors decided to
propose at the May 11, 2012, Annual Shareholders Meeting a
dividend of €2.28 per share for 2011, stable compared to the
previous year.
Based on 2011 adjusted net income in euro, the pay-out ratio
would be 45%.
Taking into account the three 2011 interim dividends, the remaining
€0.57 per share would be paid on June 21, 2012 (1).
2. Liquidity and capital resources
2.1. Long-term and short-term capital
Long-term capital
As of December 31,
(M€) 2011 2010 2009
Shareholders’ equity 68,134 (a) 58,718 50,993
Non-current financial debt 22,557 20,783 19,437
Hedging instruments of non-current financial debt (1,976) (1,870) (1,025)
Total net non-current capital 88,715 77,631 69,405
(a) Based on a 2011 dividend equal to the 2010 dividend (€2.28/share) less the interim dividends paid for the three first quarters totaling €1.71/share (€3,885 million).
Short-term capital
As of December 31,
(M€) 2011 2010 2009
Current financial debt 9,675 9,653 6,994
(188)
Net current financial assets
(1,046)
(533)
Net current financial debt 9,142 8,607 6,806
Cash and cash equivalents (14,025) (14,489) (11,662)
(1) The ex-dividend date for the remainder of the 2011 dividend would be June 18, 2012; for the ADR (NYSE :TOT) the ex-dividend date would be June 13, 2012.
Registration Document 2011. TOTAL
63
3 Management Report
Liquidity and capital resources
2.2. Cash flow
(M€) 2011 2010 2009
Cash flow from operating activities 19,536 18,493 12,360
Changes in working capital at replacement cost (524) 497 (1,111)
Cash flow from operating activities before changes
in working capital at replacement cost 20,060 17,996 13,471
Investments (24,541) (16,273) (13,349)
Divestments 8,578 4,316 3,081
Net cash flow at replacement cost, before changes in working capital 4,097 6,039 3,203
Dividends paid (5,312) (5,250) (5,275)
Share buybacks - - -
Net-debt-to-equity ratio at December 31 23% 22% 27%
Cash flow from operations was €19,536 million, an increase of 6%
compared to 2010, essentially due to the increase in net income
that was partially offset by changes in working capital.
The Group’s net cash flow was €3,573 million compared
to €6,536 million in 2010. Expressed in dollars, the Group’s net
cash flow(2) was $5.0 billion in 2011.
Adjusted cash flow from operations(1) was €20,060 million,
an increase of 11%. Expressed in dollars, adjusted cash flow
from operations was $27.9 billion, an increase of 17%.
The net-debt-to-equity ratio was 23.0% on December 31, 2011,
compared to 22.2% on December 31, 2010.
2.3. Borrowing requirements and funding structure
The Group’s policy consists of incurring non-current debt primarily at
a floating rate, or, if the opportunity arises at the time of an issuance,
at a fixed rate. Debt is incurred in dollars, euros or Canadian dollars
according to general corporate needs. Long-term interest rate
and currency swaps may be used to hedge bonds at their issuance
in order to create a variable or fixed rate synthetic debt. In order to
partially modify the interest rate structure of the long-term debt,
TOTAL may also enter into long-term interest rate swaps.
The non-current debt is generally raised by the corporate treasury
entities either directly in dollars, Canadian dollars or euros, or in
other currencies which are then exchanged for dollars, canadian
dollars, or euros through swaps issues to appropriately match
general corporate needs.
The Group has established standards for market transactions under
which bank counterparties must be approved in advance, based
on an assessment of the counterparty’s financial soundness (multi-criteria
analysis including a review of the market capitalization and of the Credit
Default Swap (CDS), its ratings with Standard & Poor’s and Moody’s,
which must be of high quality and its overall financial condition).
An overall authorized credit limit is set for each bank and is allotted
among the subsidiaries and the Group’s central treasury entities
according to their needs.
To reduce the market values risk on its commitments, in particular for
swaps set as part of bonds issuance, the Group also developed a
system of margin call that is implemented with significant counterparties.
2.4. External financing available
As of December 31, 2011, the aggregate amount of the major
confirmed credit facilities granted by international banks to Group
companies (including TOTAL S.A.) was $11,447 million (compared
with $10,395 million on December 31, 2010), of which $11,154 million
were unused ($10,383 million unused on December 31, 2010).
The contracts for the credit lines granted to TOTAL S.A. contain
no provisions that tie the terms and conditions of the loan to
the Company’s financial ratios, to its financial ratings from specialized
agencies, or to the occurrence of events that could have a material
adverse impact on its financial position.
TOTAL S.A. has confirmed credit facilities granted by international
banks, which allow the company to fund a significant cash reserve.
As of December 31, 2011, these credit facilities amounted
to $10,139 million (compared with $9,592 million on
December 31, 2010), of which $10,096 million were unused
(compared with $9,581 million unused on December 31, 2010).
Credit facilities granted to Group companies other than TOTAL S.A.
are not intended to finance the Group’s general needs; they are
intended to finance either the general needs of the borrowing
subsidiary or a specific project.
As of December 31, 2011, no restrictions applied to the use
of the Group companies’ capital (including TOTAL S.A.) that could
significantly impact the Group’s activities, directly or indirectly.
(1) Cash flow from operations at replacement cost before changes in working capital.
(2) Net cash flow = cash flow from operations + divestments - gross investments.
64
TOTAL. Registration Document 2011
Management Report 3
Research & Development
2.5. Anticipated sources of financing
Investments, working capital and dividend payments are financed
essentially by the cash flow generated from operating activities,
asset disposals and, if necessary, by net borrowings.
For the coming years and based on the current financing
conditions, the Company intends to maintain this method of
financing the Group’s investments and activities.
3. Research & Development
In 2011, Research & Development (R&D) expenses amounted to
€776 million, compared to €715 million in 2010 and €650 million
in 2009. The process initiated in 2004 to increase R&D budgets
continued in 2011.
In addition, in 2009 the Group set-up a structure to contribute
to the development of start-ups that specialize in the innovative
energy technologies.
In 2011, 3,946 employees were dedicated to R&D, compared
to 4,087 in 2010 and 4,016 in 2009. The reduction in 2011 can
be explained, in particular, by the sale of part of the Specialty
Chemicals Resins activity.
There are six major R&D focuses at TOTAL:
– developing knowledge, tools and technological mastery to
discover and profitably operate complex oil and gas resources
to help meet the global demand for energy;
– developing and industrializing solar, biomass and carbon capture
and storage technologies to help prepare for future energy needs;
– developing practical, innovative and competitive materials that
meet customers’ specific needs, contribute to the emergence
of new features and systems, enable current materials to be
replaced by materials showing higher performance for users, and
3.1. Exploration & Production
In addition to continuously optimizing the development of
deep-offshore projects and gas resources, TOTAL continues
to improve its computing, exploration, seismic acquisition and
processing tools as well as those for the initial appraisal of
reservoirs and simulation of field evolution during operations,
especially for tight, very deep or carbonated reservoirs.
Enhancing oil recovery from operated reservoirs and recovery
of heavy oil and bitumen with lesser environmental impacts are
also subjects involving major research. In particular, a test
of technology for the exploitation of oil shales is being developed.
address the challenges of improved energy efficiency, lower
environmental impact and toxicity, better management of their life
cycle and wastes;
– developing, industrializing and improving first-tier competitive
processes for the conversion of oil, coal and biomass resources
to adapt to changes in resources and markets, improve reliability
and safety, achieve better energy efficiency, reduce the
environmental footprint and maintain the Group’s economic
margins in the long term;
– understanding and measuring the impacts of the Group’s
operations and products on ecosystems (water, soil, air,
biodiversity) to improve environmental safety, as part of the
regulation in place, and reduce their environmental footprint
to achieve sustainability in the Group’s operations; and
– mastering and using innovative technologies such as
biotechnologies, materials sciences, nanotechnologies,
high-performance computing, information and communications
technologies and new analytical techniques.
These issues are addressed synergistically within a portfolio of
projects. Different aspects may be looked at independently by
different divisions.
In addition, the carbon capture and storage project in the Rousse
depleted field in Lacq (France) has demonstrated the validity of
oxy-combustion technology and made it possible to develop
the methodology for analyzing and monitoring storage fields.
Finally, water management is also the subject of increased
R&D activities.
Registration Document 2011. TOTAL
65
3 Management Report
Research & Development
3.2. Gas & Power
R&D efforts were sustained in new energies, in particular in the
development of new-generation photovoltaic cells as part of several
partnerships with recognized academic research institutes and
start-ups (EAP for silicon purification and crystallization).
Energy production from biomass is also a major R&D challenge in
the development of new energies. The Group is involved in a
program to develop a production process from biomass and in
biotechnology studies for the conversion of biomass to advanced
biofuels or molecules for chemicals, in particular through a
partnership with Amyris, a company in which the Group acquired
an interest.
R&D also involves energy conversion related to:
– new technical features for LNG (liquefied natural gas) terminals
and transport;
– the emergence of DME (DiMethyl Ether) through the Group’s
involvement in a testing program for this fuel; and
– CTL (Coal to Liquids) projects to convert coal into liquid
hydrocarbons, with carbon dioxide capture as part of this
process.
3.3. Refining & Marketing
In Refining & Marketing, TOTAL is preparing for the emergence
of tomorrow’s resources, including non-conventional oil and
biomass, and develops products that meet the market’s needs,
such as higher-performance and energy-saving fuels, additives
and lubricants.
The Refining & Marketing division develops processes and catalysts
and studies the operation of its industrial sites to improve
production and adapt to the fuel market. The division develops new
products (fuels, heating fuels, lubricants, etc.) that are adapted
to new engines and are more environmentally friendly as well as
technologies to measure and reduce industrial emissions.
Several R&D projects in the field of second-generation biofuel
production are ongoing as part of partnerships with academic,
industrial and economic players in order to develop enzymatic
and thermo-chemical conversion of biomass.
3.4. Petrochemicals
The main mission of Petrochemicals R&D is to improve and develop
new technologies and new polyolefins.
The development of new grades of polymers remains a cornerstone
of the development strategy. On September 7, 2011,
Petrochemicals signed a new agreement with Galactic whereby
Futerro, the joint venture formed by Galactic and Total
Petrochemicals, became the technological leader in the polylactic
acid (PLA) production chain, from monomer production to polymer
recycling.
The styrenics teams, for their part, successfully developed a new
grade, expandable polystyrene, which is aimed at a fast-growing
insulating materials market.
Efforts to develop catalysts and processes using alternative
resources continue. In March 2011, Total Petrochemicals, IFP
Energies nouvelles (IFPEN) and its Axens subsidiary announced
an alliance aimed at developing a new technology, based on the
development by Petrochemicals of innovative catalysts,
for the production of biomonomers (ethylene, propylene, etc.)
by dehydration of the respective alcohol (ethanol, propanol, etc.).
In parallel to this, optimization of the UOP-Total Petrochemicals
olefin production process from methanol continues. A first licensing
agreement for this technology has been signed with a Chinese
partner.
Finally, through Hutchinson, Bostik and Atotech in the Chemicals
division, Petrochemicals is involved in “Materials Sciences” projects
aimed at developing and bringing to light the division’s skills and
innovations in the field of materials. Lastly, the “Total Car Concept”
project was unveiled at the Frankfurt Auto Show.
3.5. Specialty Chemicals
R&D has strategic importance for the specialty chemicals.
It is closely linked to the needs of subsidiaries.
Innovation at Hutchinson is focused on the development of
high-performance thermoplastic elastomers, clean production
technologies and energy-efficient systems for large industrial
clients, in particular for tomorrow’s vehicles. Special emphasis
is placed on mass, electrification, comfort and safety.
Bostik is focusing its research activities on three technology
platforms: hot-melt adhesives, reactive elastomers and hydraulic
polymer-binder systems. Based on these technologies, R&D is
developing practical, sustainable assembly solutions that meet the
needs of markets in terms of energy efficiency (construction,
transport), material efficiency (health, industry) and environmental
impacts throughout their life cycle.
Atotech is one of the world leaders for integrated production
systems (chemicals, equipment, know-how and service) for
industrial surface finishing and the manufacturing of integrated
circuits. Given the environmental challenges related to
electroplating, nearly half of Atotech’s R&D projects are intended
to develop cleaner technologies and create conditions for the
sustainable development of these industries.
66
TOTAL. Registration Document 2011
Management Report 3
Trends and outlook
– detection and reduction of emissions into the air and simulation
of their dissemination;
– prevention of soil contamination and regulatory compliance with
regard to historical aspects;
– changes in the Group’s different products and management
of their life cycle, in compliance with the REACH Directive.
3.6. Environment
Environmental issues are important throughout the Group and are
taken into account in all R&D projects. They involve environmental
risk management, including in particular:
– water management, notably by reducing the use of water from
natural continental environments and by lowering emissions in
compliance with the regulations in force;
– reduction of greenhouse gases through the improvement
of energy efficiency and carbon capture and storage;
3.7. R&D organization
The Group intends to increase R&D in all of its business units
through cross-functional themes and technologies. Attention is paid
to synergies of R&D efforts between business units.
universities and academic laboratories, deemed strategic in Europe,
the United States, Japan and China, as well as innovative small
businesses are part of the Group’s approach.
The Group has twenty-two R&D sites worldwide and has
developed approximately 600 partnerships with other industrial
groups and academic or highly specialized research institutes.
TOTAL also has a permanently renewed network of scientific
advisors worldwide that monitor and advise on matters of interest
to the Group’s R&D activities. Long-term partnerships with
Each business unit is developing an active intellectual property
activity, aimed at protecting its innovations, allowing its activity to
develop without constraints as well as facilitating its partnerships.
In 2011, more than 250 new patent applications were issued by
the Group.
4. Trends and outlook
4.1. Outlook
In 2012, TOTAL intends to consolidate its drivers for growth and
enhance the priority given to safety, reliability and acceptability of its
operations.
The 2012 net investment budget is $20 billion. TOTAL intends to
continue to actively manage its portfolio with, in particular, a
program of non-strategic asset sales. The 2012 budget for organic
investments is $24 billion.
Capital expenditures will mostly be focused on the Upstream
segment with an allocation of $20 billion, or more than 80%
of the Group’s organic capital expenditure budget. About 30% of the
investment in the Upstream segment is expected to be dedicated
to producing assets while 70% is expected to be assigned to
developing new projects. Downstream organic capital expenditures
in the Refining & Chemicals and Supply & Marketing segments are
expected to amount to $3 billion and $1 billion, respectively, in 2012.
In line with the strategy to develop a number of major integrated
platforms in order to stimulate growth and improve competitive
performance, the main projects in Refining & Chemicals in 2012 will
be the upgrading of the Normandy refinery and petrochemical plant,
the building of the Jubail refinery in Saudi Arabia and the expansion
of the Daesan platform in South Korea. Wherever it operates, TOTAL
will continue to make capital expenditure in the maintenance and
safety of its facilities a top priority.
The Group also confirms its commitment with respect to R&D with
a budget increasing to about $1.2 billion in 2012.
In the Upstream segment, TOTAL will deploy its strategy intended
to speed up growth of its production, while improving the profitability
of its portfolio of assets. The year 2012 should see the launch of
numerous projects. In 2012, TOTAL plans to bring eight new major
projects on-stream, which will contribute to expected growth in
output in 2012 and the achievement of the target rate of average
annual production growth of 2.5% between 2010 and 2015: Usan
and OML 58 Upgrade in Nigeria, Islay in the UK-North Sea, Angola
LNG in Angola, Bongkot South in Thailand, Halfaya in Iraq, Sulige in
China and Kashagan in Kazakhstan. The Group will also continue to
evaluate numerous other projects, in particular in Western Africa,
Russia and Canada. The anticipated launch of these projects during
the course of the next two years should improve visibility on growth
in output after 2015. With an exploration budget that stands at $2.5
billion, up 20% compared to 2011, the Group will continue to
pursue an ambitious and diversified strategy.
In the Downstream sector, with a new organization that will allow it
to take up the challenges specific to each activity of that sector,
the Group should start to reap the first benefits of an integrated
Refining & Chemicals segment and Supply & Marketing segment,
each of which is closer to its markets. Major projects, an optimized
portfolio of assets and productivity gains should help to achieve
the target of an overall rise in profitability by 5% between 2010
and 2015. TOTAL will strive to improve its competitiveness
by adapting its activities in Europe and seeking to enhance
its operational efficiency and synergies between its operations.
Registration Document 2011. TOTAL
67
3 Management Report
Trends and outlook
The year 2012 will see continued development in high-growth
zones, with the expected startup of a new polyethylene production
unit in Qatar and the completion of the first step of the expansion of
its Daesan platform in South Korea.
In 2012, TOTAL can rely on its solid balance sheet and on
the start-up and ramp-up of new projects that should contribute
to the growth of operating cash flow. Moreover, in 2012, TOTAL
will continue to develop its new projects through an ambitious
capital expenditure program, while maintaining a target for the
net-debt-to-equity ratio of between 20-30% and a dividend policy
based on an average pay-out ratio of 50% of adjusted fully-diluted
earnings per share.
4.2. Risks and uncertainties
Due to the nature of its business, the Group’s activities remain
subject to the usual market risks (sensitivity to the environmental
parameters of the oil and financial markets), industrial and
environmental risks related to its operations, and to political
or geopolitical risks stemming from the global presence of most
of its activities.
Risks relative to cash management operations and to interest rate
and foreign exchange financial instruments are managed according
to rules set by the Group’s General Management, which provide
for regular pooling of available cash balances, open positions and
management of the financial instruments by the Group’s general
management.
Detailed information is given in the Risk Factors section (Chapter 4),
of this Registration Document. For more information, also refer to
the Chairman’s report in paragraph 1.10 of Chapter 5.
4.3. Sensitivity of the 2012 results to market environment(a)
Market
environment parameters Scenario Change Estimated impact Estimated impact
on adjusted on adjusted
operating income net operating income
€-$ 1.40 $/€ +0.10 $/€ -1.8 B€ -0.95 B€
Brent 100 $/b +1 $/b +0.25 B€/0.35 B$ +0.11 B€/0.15 B$
European refining margins (ERMI) 25 $/t +1 $/t +0.06 B€/0.08 B$ +0.04 B€/0.05 B$
(a) Sensitivities revised once per year upon publication of the previous year’s fourth quarter results. The impact of the €/$ sensitivity on adjusted operating income and adjusted net
operating income attributable to the Upstream segment are approximately 80% and 75% respectively.
Indicated sensitivities are approximate and based upon TOTAL’s current view of its 2012 portfolio. Results may differ significantly from the estimates implied by the application of these
sensitivities.
68
TOTAL. Registration Document 2011
Risk factors 4
Risk factors
1. Financial risks 70
1.1. Sensitivity to market environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
1.2. Oil and gas market related risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
1.3. Financial markets related risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
1.4. Counterparty risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72
1.5. Currency exposure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72
1.6. Short-term interest rate exposure and cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72
1.7. Interest rate risk on non-current debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72
1.8. Sensitivity analysis on interest rate and foreign exchange risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73
1.9. Stock market risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74
1.10. Liquidity risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75
1.11. Credit risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76
2. Industrial and environmental risks 78
2.1. Types of risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78
2.2. Management and monitoring of industrial and environmental risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79
3. Other risks 80
3.1. Risks related to oil and gas exploration and production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80
3.2. Risks related to economic or political factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80
3.3. Legal aspects of the Group’s activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .81
3.4. Activities in Cuba, Iran, Sudan and Syria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83
3.5. Risks related to competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .85
3.6. Legal and arbitration proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86
4. Insurance and risk management 86
4.1. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86
4.2. Risk and insurance management policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86
4.3. Insurance policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .87
Registration Document 2011. TOTAL
69
4 Risk factors
Financial risks
1. Financial risks
Financial risks are detailed in Note 31 to the consolidated financial statements (point 7, Chapter 9).
1.1. Sensitivity to market environment
The financial performance of TOTAL is sensitive to a number of
factors, the most significant being crude oil and natural gas prices,
refining margins and exchange rates, in particular that of the dollar
versus the euro.
Generally, a rise in the price of crude oil has a positive effect on
earnings as a result of an increase in revenues from oil and gas
production. Conversely, a decline in crude oil prices reduces
revenues. For the year 2012, according to the scenarios
retained, the Group estimates that an increase or decrease of
$1.00 per barrel in the price of Brent crude would respectively
increase or decrease annual adjusted net operating income
by approximately €0.11 billion ($0.15 billion (1)). The impact of
changes in crude oil prices on Downstream operations depends
upon the speed at which the prices of finished products adjust to
reflect these changes. The Group estimates that an increase or
decrease in European refining margins (ERMI) of $1.00 per ton
would increase or decrease annual adjusted net operating income
by approximately €0.04 billion ($0.05 billion (1)).
All of the Group’s activities are, to various degrees, sensitive to
fluctuations in the dollar/euro exchange rate. The Group estimates
that a strengthening or weakening of the dollar against the euro
by $0.10 per euro would respectively improve or reduce annual
adjusted net operating income, expressed in euro, by
approximately €0.95 billion.
The Group’s results, particularly in the Chemicals activity, also
depend on the overall economic environment.
However, the Euro zone’s turbulences during the fiscal year 2011
did not affect the Group significantly.
2012 Sensitivities (a) Scenario Change Estimated impact Estimated impact
on adjusted on adjusted net
operating income operating income
€-$ 1.40 $/€ +0.10 $/€ -1.8 B€ -0.95 B€
Brent 100 $/b +1 $/b +0.25 B€/0.35 B$ +0.11 B€/0.15 B$
European refining margins (ERMI) 25 $/t +1 $/t +0.06 B€/0.08 B$ +0.04 B€/0.05 B$
(a) Sensitivities revised once per year upon publication of the previous year’s fourth quarter results. The impact of the $/€ sensitivity on adjusted operating income and adjusted net operating
income attributable to the Upstream segment are approximately 80% and 75% respectively, and the remaining impact of the $/€ sensitivity is essentially in the Downstream segment.
Indicated sensitivities are approximate and based upon TOTAL’s current view of its 2012 portfolio. Results may differ significantly from the estimates implied by the application of these
sensitivities.
1.2. Oil and gas market related risks
Due to the nature of its business, the Group has significant oil and
gas trading activities as part of its day-to-day operations in order
to optimize revenues from its oil and gas production and to obtain
favorable pricing to supply its refineries.
In its international oil trading business, the Group follows
a policy of not selling its future production. However, in connection
with this trading business, the Group, like most other oil
companies, uses energy derivative instruments to adjust its
exposure to price fluctuations of crude oil, refined products, natural
gas, power and coal. The Group also uses freight rate derivative
contracts in its shipping business to adjust its exposure to freight-
rate fluctuations. To hedge against this risk, the Group uses various
instruments such as futures, forwards, swaps and options on
organised markets or over-the-counter markets. The list of the
different derivatives held by the Group in these markets is detailed
in Note 30 to the Consolidated Financial Statements.
The Trading & Shipping division measures its market risk exposure,
i.e. potential loss in fair values, on its crude oil, refined products
and freight rates trading activities using a value-at-risk technique.
This technique is based on an historical model and makes an
assessment of the market risk arising from possible future changes
in market values over a 24-hour period. The calculation of the range
of potential changes in fair values takes into account a snapshot of
the end-of-day exposures and the set of historical price movements
for the last 400 business days for all instruments and maturities in
the global trading activities. Options are systematically reevaluated
using appropriate models.
The potential movement in fair values corresponds to a 97.5%
value-at-risk type confidence level. This means that the Group’s
portfolio result is likely to exceed the value-at-risk loss measure
once over 40 business days if the portfolio exposures were
left unchanged.
(1) Calculated with a base case exchange rate of $1.40 per €1.00.
70
TOTAL. Registration Document 2011
Risk factors 4
Financial risks
Trading & Shipping : value-at-risk with a 97.5% probability
As of December 31,
(M€) High Low Average Year end
2011 10.6 3.7 6.1 6.3
2010 23.1 3.4 8.9 3.8
2009 18.8 5.8 10.2 7.6
As part of its gas, power and coal trading activity, the Group also
uses derivative instruments such as futures, forwards, swaps and
options in both organised and over-the-counter markets. In general,
the transactions are settled at maturity date through physical
delivery. The Gas & Power division measures its market risk
exposure, i.e. potential loss in fair values, on its trading business
using a value-at-risk technique. This technique is based on an
historical model and makes an assessment of the market risk
arising from possible future changes in market values over a one-day
period. The calculation of the range of potential changes in fair
values takes into account a snapshot of the end-of-day exposures
and the set of historical price movements for the past two years
for all instruments and maturities in the global trading business.
Gas & Power : value-at-risk with a 97.5% probability
As of December 31,
(M€) High Low Average Year end
2011 21.0 12.7 16.0 17.6
2010 13.9 2.7 6.8 10.0
2009 9.8 1.9 5.0 4.8
The Group has implemented strict policies and procedures to
manage and monitor these market risks. These are based on the
separation of control and front-office functions and on an
integrated information system that enables real-time monitoring
of trading activities.
encourage liquidity, hedging operations are performed with
numerous independent operators, including other oil companies,
major energy producers or consumers and financial institutions.
The Group has established counterparty limits and monitors
outstanding amounts with each counterparty on an ongoing basis.
Limits on trading positions are approved by the Group’s Executive
Committee and are monitored daily. To increase flexibility and
1.3. Financial markets related risks
As part of its financing and cash management activities, the Group
uses derivative instruments to manage its exposure to changes in
interest rates and foreign exchange rates. These instruments are
principally interest rate and currency swaps. The Group may also
use, on a less frequent basis, futures and options contracts. These
operations and their accounting treatment are detailed in Notes 1
paragraph M, 20, 28 and 29 to the Consolidated Financial Statements.
Department. Excess cash of the Group is deposited mainly in
government institutions, deposit banks, or major companies
through deposits, reverse repurchase agreements and purchase of
commercial paper. Liquidity positions and the management of
financial instruments are centralized by the Treasury Department,
where they are managed by a team specialized in foreign exchange
and interest rate market transactions.
Risks relative to cash management operations and to interest rate
and foreign exchange financial instruments are managed according
to rules set by the Group’s senior management, which provide for
regular pooling of available cash balances, open positions and
management of the financial instruments by the Treasury
The Cash Monitoring-Management Unit within the Treasury
Department monitors limits and positions per bank on a daily basis
and results of the Front Office. This unit also prepares marked-to-
market valuations of used financial instruments and, when
necessary, performs sensitivity analysis.
Registration Document 2011. TOTAL
71
4 Risk factors
Financial risks
1.4. Counterparty risk
The Group has established standards for market transactions under
which bank counterparties must be approved in advance, based on
an assessment of the counterparty’s financial soundness (multi-
criteria analysis including a review of market prices and
of the Credit Default Swap (CDS), its ratings with Standard & Poor’s
and Moody’s, which must be of high quality, and its overall
financial condition).
An overall authorized credit limit is set for each bank and is allotted
among the subsidiaries and the Group’s central treasury entities
according to their needs.
To reduce the market values risk on its commitments, in particular
for swaps set as part of bonds issuance, the Treasury Department
also developed a system of margin call that is gradually
implemented with significant counterparties.
1.5. Currency exposure
The Group seeks to minimize the currency exposure of each entity
to its functional currency (primarily the euro, the dollar, the
Canadian dollar, the pound sterling and the Norwegian krone).
For currency exposure generated by commercial activity, the
hedging of revenues and costs in foreign currencies is typically
performed using currency operations on the spot market and,
in some cases, on the forward market. The Group rarely hedges
future cash flows, although it may use options to do so.
With respect to currency exposure linked to non-current assets
booked in a currency other than the euro, the Group has a policy
of reducing the related currency exposure by financing these assets
in the same currency.
Net short-term currency exposure is periodically monitored against
limits set by the Group’s senior management.
The non-current debt described in Note 20 to the Consolidated
Financial Statements is generally raised by the corporate treasury
entities either directly in dollars, in euros or in Canadian dollars,
or in other currencies which are then exchanged for dollars, euros
or Canadian dollars through swaps issues to appropriately match
general corporate needs. The proceeds from these debt issuances
are loaned to affiliates whose accounts are kept in dollars, in euros
or in Canadian dollars. Thus, the net sensitivity of these positions to
currency exposure is not significant.
The Group’s short-term currency swaps, the notional value of which
appears in Note 29 to the Consolidated Financial Statements,
are used to attempt to optimize the centralized cash management
of the Group. Thus, the sensitivity to currency fluctuations which
may be induced is likewise considered negligible.
1.6. Short-term interest rate exposure and cash
Cash balances, which are primarily composed of euros and dollars,
are managed according to the guidelines established by the
Group’s senior management (maintain an adequate level of liquidity,
optimize revenue from investments considering existing interest rate
yield curves, and minimize the cost of borrowing) over a less than
twelve-month horizon and on the basis of a daily interest rate
benchmark, primarily through short-term interest rate swaps and
short-term currency swaps, without modifying currency exposure.
1.7. Interest rate risk on non-current debt
The Group’s policy consists of incurring non-current debt primarily
at a floating rate, or, if the opportunity arises at the time of an
issuance, at a fixed rate. Debt is incurred in dollars, in euros or in
Canadian dollars according to general corporate needs. Long-term
interest rate and currency swaps may be used to hedge bonds at
their issuance in order to create a variable or fixed rate synthetic debt.
In order to partially modify the interest rate structure of the long-term
debt, TOTAL may also enter into long-term interest rate swaps.
72
TOTAL. Registration Document 2011
Risk factors 4
Financial risks
1.8. Sensitivity analysis on interest rate and foreign exchange risk
The tables below present the potential impact of an increase or decrease of 10 basis points on the interest rate yield curves for each
of the currencies on the fair value of the current financial instruments as of December 31, 2011, 2010 and 2009.
Assets/(Liabilities)
(M€)
As of December 31, 2011
Change in fair value
due to a change
in interest rate by:
Carrying
amount
Estimated
fair value
+10 basis
points
-10 basis
points
Bonds (non-current portion, before swaps) (21,402) (22,092) 83 (83)
Swaps hedging fixed-rates bonds (liabilities) (146) (146)
Swaps hedging fixed-rates bonds (assets) 1,976 1,976
Total swaps hedging fixed-rates bonds (assets and liabilities) 1,830 1,830 (49) 49
Current portion of non-current debt after swap
(excluding capital lease obligations) 3,488 3,488 3 (3)
Other interest rates swaps (1) (1) 3 (3)
Currency swaps and forward exchange contracts 47 47 - -
As of December 31, 2010
Bonds (non-current portion, before swaps) (20,019) (20,408) 86 (84)
Swaps hedging fixed-rates bonds (liabilities) (178) (178)
Swaps hedging fixed-rates bonds (assets) 1,870 1,870
Total swaps hedging fixed-rates bonds (assets and liabilities) 1,692 1,692 (59) 59
Current portion of non-current debt after swap
(excluding capital lease obligations) 3,483 3,483 4 (4)
Other interest rates swaps (2) (2) 3 (3)
Currency swaps and forward exchange contracts (101) (101) - -
As of December 31, 2009
Bonds (non-current portion, before swaps) (18,368) (18,836) 75 (75)
Swaps hedging fixed-rates bonds (liabilities) (241) (241)
Swaps hedging fixed-rates bonds (assets) 1,025 1,025
Total swaps hedging fixed-rates bonds (assets and liabilities) 784 784 (57) 57
Current portion of non-current debt after swap
(excluding capital lease obligations) (2,111) (2,111) 3 (3)
Other interest rates swaps (1) (1) 1 (1)
Currency swaps and forward exchange contracts 34 34 - -
The impact of changes in interest rates on the cost of net debt before tax is as follows:
For the year ended December 31,
(M€) 2011 2010 2009
Cost of net debt (440) (334) (398)
Interest rate translation of:
+10 basis points (10) (11) (11)
- 10 basis points 10 11 11
+100 basis points (103) (107) (108)
- 100 basis points 103 107 108
Registration Document 2011. TOTAL
73
4 Risk factors
Financial risks
As a result of the policy for the management of currency exposure previously described, the Group’s sensitivity to currency exposure
is primarily influenced by the net equity of the subsidiaries whose functional currency is the dollar and, to a lesser extent, the pound sterling,
the Norwegian krone and the Canadian dollar.
This sensitivity is reflected in the historical evolution of the currency translation adjustment recorded in the statement of changes
in shareholders’ equity which, in the course of the last three fiscal years, is essentially related to the fluctuation of dollar and pound sterling
and is set forth in the table below:
Euro/Dollar Euro/Pound sterling
exchange rates exchange rates
As of December 31, 2011 1.29 0.84
As of December 31, 2010 1.34 0.86
As of December 31, 2009 1.44 0.89
As of December 31, 2011 Total Euro Dollar Pound Other currencies
(M€) sterling and equity affiliates
Shareholders’ equity at historical exchange rate 69,025 41,396 21,728 4,713 1,188
Currency translation adjustment
before net investment hedge (962) 127 (923) (166)
Net investment hedge - open instruments (26) (25) (1) -
Shareholders’ equity at exchange rate
as of December 31, 2011 68,037 41,396 21,830 3,789 1,022
As of December 31, 2010 Total Euro Dollar Pound Other currencies
(M€) sterling and equity affiliates (a)
Shareholders’ equity at historical exchange rate 62,909 32,894 22,242 4,997 2,776
Currency translation adjustment
before net investment hedge (2,501) - (1,237) (1,274) 10
Net investment hedge - open instruments 6 - 6 - -
Shareholders’ equity at exchange rate
as of December 31, 2010 60,414 32,894 21,011 3,723 2,786
As of December 31, 2009 Total Euro Dollar Pound Other currencies
(M€) sterling and equity affiliates
Shareholders’ equity at historical exchange rate 57,621 27,717 18,671 5,201 6,032
Currency translation adjustment
before net investment hedge (5,074) - (3,027) (1,465) (582)
Net investment hedge - open instruments 5 - 6 (1) -
Shareholders’ equity at exchange rate
as of December 31, 2009 52,552 27,717 15,650 3,735 5,450
(a) The decrease in the heading "Other currencies and equity affiliates" is mainly explained by the change in the consolidation method of Sanofi (see Note 3 to the Consolidated Financial
Statements). The contribution to the shareholders’ equity of this investment is now reclassified into the heading for the Eurozone.
As a result of this policy, the impact of currency exchange rate fluctuations on consolidated income, as illustrated in Note 7 to the
Consolidated Financial Statements, has not been significant over the last three years despite the considerable fluctuation of the dollar
(gain of €118 million in 2011, nil result in 2010, loss of €32 million in 2009).
1.9. Stock market risk
The Group holds interests in a number of publicly-traded companies (see Notes 12 and 13 to the Consolidated Financial Statements).
The market value of these holdings fluctuates due to various factors, including stock market trends, valuations of the sectors in which
the companies operate, and the economic and financial condition of each individual company.
74
TOTAL. Registration Document 2011
Risk factors 4
Financial risks
1.10. Liquidity risk
TOTAL S.A. has confirmed credit lines granted by international
banks, which are calculated to allow it to manage its short-term
liquidity needs as required.
As of December 31, 2011, these credit lines amounted
to $10,139 million, of which $10,096 million was unused.
The agreements for the credit lines granted to TOTAL S.A.
do not contain conditions related to the Company’s financial ratios,
to its financial ratings from specialized agencies, or to the
occurrence of events that could have a material adverse effect
on its financial position. As of December 31, 2011, the aggregate
amount of the principal confirmed credit lines granted by
international banks to Group companies, including TOTAL S.A.,
was $11,447 million, of which $11,154 million was unused.
The credit lines granted to Group companies other than TOTAL
S.A. are not intended to finance the Group’s general needs; they
are intended to finance either the general needs of the borrowing
subsidiary or a specific project.
The following tables show the maturity of the financial assets and liabilities of the Group as of December 31, 2011, 2010 and 2009
(see Note 20 to the Consolidated Financial Statements).
As of December 31, 2011
Assets/(Liabilities) Less than 1-2 years 2-3 years 3-4 years 4-5 years More than Total
(M€) one year 5 years
Non-current financial debt
(notional value excluding interests) - (4,492) (3,630) (3,614) (1,519) (7,326) (20,581)
Current borrowings (9,675) - - - - - (9,675)
Other current financial liabilities (167) - - - - - (167)
Current financial assets 700 - - - - - 700
Cash and cash equivalents 14,025 - - - - - 14,025
Net amount before financial expense 4,883 (4,492) (3,630) (3,614) (1,519) (7,326) (15,698)
Financial expense on non-current financial debt (785) (691) (521) (417) (302) (1,075) (3,791)
Interest differential on swaps 320 331 221 120 55 44 1,091
Net amount 4,418 (4,852) (3,930) (3,911) (1,766) (8,357) (18,398)
As of December 31, 2010
Assets/(Liabilities) Less than 1-2 years 2-3 years 3-4 years 4-5 years More than Total
(M€) one year 5 years
Non-current financial debt
(notional value excluding interests) - (3,355) (3,544) (2,218) (3,404) (6,392) (18,913)
Current borrowings (9,653) - - - - - (9,653)
Other current financial liabilities (159) - - - - - (159)
Current financial assets 1,205 - - - - - 1,205
Cash and cash equivalents 14,489 - - - - - 14,489
Net amount before financial expense 5,882 (3,355) (3,544) (2,218) (3,404) (6,392) (13,031)
Financial expense on non-current financial debt (843) (729) (605) (450) (358) (1,195) (4,180)
Interest differential on swaps 461 334 153 33 2 (78) 905
Net amount 5,500 (3,750) (3,996) (2,635) (3,760) (7,665) (16,306)
As of December 31, 2009
Assets/(Liabilities) Less than 1-2 years 2-3 years 3-4 years 4-5 years More than Total
(M€) one year 5 years
Non-current financial debt
(notional value excluding interests) - (3,658) (3,277) (3,545) (2,109) (5,823) (18,412)
Current borrowings (6,994) - - - - - (6,994)
Other current financial liabilities (123) - - - - - (123)
Current financial assets 311 - - - - - 311
Cash and cash equivalents 11,662 - - - - - 11,662
Net amount before financial expense 4,856 (3,658) (3,277) (3,545) (2,109) (5,823) (13,556)
Financial expense on non-current financial debt (768) (697) (561) (448) (301) (1,112) (3,887)
Interest differential on swaps 447 233 100 25 (16) (55) 734
Net amount 4,535 (4,122) (3,738) (3,968) (2,426) (6,990) (16,709)
Registration Document 2011. TOTAL
75
4 Risk factors
Financial risks
In addition, the Group guarantees bank debt and finance lease
obligations of certain non-consolidated companies and equity
affiliates. A payment would be triggered by failure of the guaranteed
party to fulfill its obligation covered by the guarantee, and no assets
are held as collateral for these guarantees. Maturity dates and
amounts are set forth in Note 23 to the Consolidated Financial
Statements (“Guarantees given against borrowings”).
The Group also guarantees the current liabilities of certain non-
consolidated companies. Performance under these guarantees
would be triggered by a financial default of these entities. Maturity
dates and amounts are set forth in Note 23 to the Consolidated
Financial Statements (“Guarantees of current liabilities”).
The following table sets forth financial assets and liabilities
related to operating activities as of December 31, 2011, 2010
and 2009 (see Note 28 to the Consolidated Financial Statements).
As of December 31,
(M€)
Assets/(Liabilities) 2011 2010 2009
Accounts payable (22,086) (18,450) (15,383)
Other operating liabilities (5,441) (3,574) (4,706)
including financial instruments related to commodity contracts (606) (559) (923)
Accounts receivable, net 20,049 18,159 15,719
Other operating receivables 7,467 4,407 5,145
including financial instruments related to commodity contracts 1,074 499 1,029
Total (11) 542 775
These financial assets and liabilities mainly have a maturity date below one year.
1.11. Credit risk
Credit risk is defined as the risk of the counterparty to a contract
failing to perform or pay the amounts due.
related to financial assets recorded on its balance sheet, including
energy derivative instruments that have a positive market value.
The Group is exposed to credit risks in its operating and financing
activities. The Group’s maximum exposure to credit risk is partially
The following table presents the Group’s maximum credit risk
exposure:
As of December 31,
(M€)
Assets/(Liabilities) 2011 2010 2009
Loans to equity affiliates (note 12) 2,246 2,383 2,367
Loans and advances (note 14) 2,055 1,596 1,284
Hedging instruments of non-current financial debt (note 20) 1,976 1,870 1,025
Accounts receivable (note 16) 20,049 18,159 15,719
Other operating receivables (note 16) 7,467 4,407 5,145
Current financial assets (note 20) 700 1,205 311
Cash and cash equivalents (note 27) 14,025 14,489 11,662
Total 48,518 44,109 37,513
The valuation allowance on loans and advances and on accounts
receivable and other operating receivables is detailed respectively
in Notes 14 and 16 to the Consolidated Financial Statements.
Upstream Segment
- Exploration & Production
As part of its credit risk management related to operating and
financing activities, the Group has developed margin call contracts
with certain counterparties. As of December 31, 2011, the net
amount received as part of these margin calls was €1,682 million
(against €1,560 million as of December 31, 2010 and €693 million
as of December 31, 2009).
Credit risk is managed by the Group’s business segments
as follows:
Risks arising under contracts with government authorities
or other oil companies or under long-term supply contracts
necessary for the development of projects are evaluated during
the project approval process. The long-term aspect of these
contracts and the high-quality of the other parties lead to a
low level of credit risk.
Risks related to commercial operations, other than those
described above (which are, in practice, directly monitored by
subsidiaries), are subject to procedures for establishing and
reviewing credit.
76
TOTAL. Registration Document 2011
Customer receivables are subject to provisions on a
case-by-case basis, based on prior history and management’s
assessment of the facts and circumstances.
- Gas & Power
The Gas & Power division deals with counterparties in the
energy, industrial and financial sectors throughout the world.
Financial institutions providing credit risk coverage are highly
rated international bank and insurance groups.
Potential counterparties are subject to credit assessment
and approval before concluding transactions and are thereafter
subject to regular review, including re-appraisal and approval
of the limits previously granted.
The creditworthiness of counterparties is assessed based on
an analysis of quantitative and qualitative data regarding financial
standing and business risks, together with the review of any
relevant third party and market information, such as data
published by rating agencies. On this basis, credit limits are
defined for each potential counterparty and, where appropriate,
transactions are subject to specific authorisations.
Credit exposure, which is essentially an economic exposure or
an expected future physical exposure, is permanently monitored
and subject to sensitivity measures.
Credit risk is mitigated by the systematic use of industry standard
contractual frameworks that permit netting, enable requiring
added security in case of adverse change in the counterparty
risk, and allow for termination of the contract upon occurrence of
certain events of default.
Downstream Segment
- Refining & Marketing
Internal procedures for the Refining & Marketing division include
rules on credit risk that describe the basis of internal control
in this domain, including the separation of authority between
commercial and financial operations. Credit policies are defined
at the local level, complemented by the implementation
of procedures to monitor customer risk (credit committees
at the subsidiary level, the creation of credit limits for corporate
customers, portfolio guarantees, etc.).
Each entity also implements monitoring of its outstanding
receivables. Risks related to credit may be mitigated or limited
by subscription of credit insurance and/or requiring security
or guarantees.
Bad debts are provisioned on a case-by-case basis at a rate
determined by management based on an assessment of the risk
of credit loss.
- Trading & Shipping
Trading & Shipping deals with commercial counterparties and
financial institutions located throughout the world. Counterparties
to physical and derivative transactions are primarily entities
involved in the oil and gas industry or in the trading of energy
commodities, or financial institutions. Credit risk coverage
is concluded with financial institutions, international banks and
insurance groups selected in accordance with strict criteria.
Risk factors 4
Financial risks
The Trading & Shipping division has a strict policy of internal
delegation of authority governing establishment of country and
counterparty credit limits and approval of specific transactions.
Credit exposures contracted under these limits and approvals
are monitored on a daily basis.
Potential counterparties are subject to credit assessment and
approval prior to any transaction being concluded and all active
counterparties are subject to regular reviews, including re-appraisal
and approval of granted limits. The creditworthiness of
counterparties is assessed based on an analysis of quantitative
and qualitative data regarding financial standing and business
risks, together with the review of any relevant third party
and market information, such as ratings published by Standard
& Poor’s, Moody’s Investors Service and other agencies.
Contractual arrangements are structured so as to maximize the
risk mitigation benefits of netting between transactions wherever
possible and additional protective terms providing for the
provision of security in the event of financial deterioration and the
termination of transactions on the occurrence of defined default
events are used to the greatest permitted extent.
Credit risks in excess of approved levels are secured by means
of letters of credit and other guarantees, cash deposits and
insurance arrangements. In respect of derivative transactions,
risks are secured by margin call contracts wherever
possible.
Chemicals Segment
Credit risk in the Chemicals segment is primarily related to
commercial receivables. Each division implements procedures
for managing and provisioning credit risk that differ based on
the size of the subsidiary and the market in which it operates.
The principal elements of these procedures are:
– implementation of credit limits with different authorization
procedures for possible credit overruns;
– use of insurance policies or specific guarantees (letters of credit);
– regular monitoring and assessment of overdue accounts
(aging balance), including collection procedures; and
– provisioning of bad debts on a customer-by-customer basis,
according to payment delays and local payment practices
(provisions may also be calculated based on statistics).
Registration Document 2011. TOTAL
77
4 Risk factors
Industrial and environmental risks
2. Industrial and environmental risks
2.1. Types of risks
TOTAL’s operations involve certain industrial and environmental
risks which are inherent in handling, processing and use of
products that are flammable, explosive, polluting or toxic.
The broad scope of TOTAL’s activities, which include drilling, oil
and gas production, on-site processing, transportation, refining and
petrochemical activities, storage and distribution of petroleum
products, and production of base and specialty chemicals, involve
a wide range of operational risks. Among these risks are those
of explosion, fire, leakage of toxic products, and pollution.
In the transportation area, the type of risk depends not only on
the hazardous nature of the products transported, but also on the
transportation methods used (mainly pipelines, maritime, river-
maritime, rail, road), the volumes involved, and the sensitivity of the
regions crossed (quality of infrastructure, population density,
environmental considerations).
Most of these activities also involve environmental risks related
to emissions into the air, water or soil and the production of waste,
and also require environmental site remediation and closure and
decommissioning after production is discontinued.
The following table shows a correlation between TOTAL’s operations
and the most significant industrial and environmental risks:
Activity/Risk Fire, Leakage Accidental Pollution Consumer Emissions into
explosion of toxic pollution of soil health and the air, water
products and subsoil safety and soil
Drilling x x x x - x
Hydrocarbon production x x x x - x
On-site processing of hydrocarbons x x x x - x
Transport of petroleum products and chemicals x x x x - x
Refining, petrochemicals x x x x x x
Storage of petroleum products x x x x - x
Distribution of petroleum products x - x x x x
Specialty chemicals x x x x x x
The industrial events that can have the most significant impact
are primarily:
– a major industrial accident (fire, explosion, leakage of highly toxic
products);
– large-scale accidental pollution.
All the risks described correspond to events that could potentially
cause injury or death, damage property and business activities,
cause environmental damage or harm human health. TOTAL
employees, contractors, residents living near the facilities or
customers can suffer injuries. Property damage can involve TOTAL’s
facilities as well as the property of third parties. The seriousness of
the consequences of these events varies according to the
vulnerability of the people, ecosystems and business activities
impacted, on the one hand, and the number of people in the
impact area and the location of the ecosystems and business
activities in relation to TOTAL’s facilities or to the trajectory of the
products after the event, on the other hand.
Moreover, oil and gas exploration and production activities are
particularly exposed to risks related to the physical characteristics
of an oil or gas field. These risks include eruptions of crude oil or
natural gas which notably could result from drilling into abnormally
pressurised hydrocarbon pockets.
TOTAL conforms to the REACH regulation, which purpose is
to protect health and safety of products and chemical substances
producers and users notably by providing detailed information
through safety data sheets (SDS/ESDS) (see also point 2 of
Chapter 12). Like most other industrial groups, TOTAL is concerned
by reports of occupational illnesses, in particular those caused
by asbestos exposure. Asbestos exposure has been subject to
close monitoring at all of the Group’s business units. As of
December 31, 2011, the Group estimates that the ultimate cost
of all asbestos-related claims paid or pending is not likely to have
a material impact on the Group’s financial situation.
TOTAL’s entities actively monitor regulatory developments
to comply with local and international rules and standards for the
evaluation and management of industrial and environmental risks.
In case of operations being stopped, the Group’s environmental
contingencies and asset retirement obligations are addressed
in “Asset retirement obligation” and “Provisions for environmental
contingencies” in Note 19 to the Consolidated Financial Statements
(point 7, Chapter 9). Future expenses related to asset retirement
obligations are accounted for in accordance with the principles
described in Note 1Q to the Consolidated Financial Statements
(point 7, Chapter 9).
78
TOTAL. Registration Document 2011
Industrial and environmental risks
Risk factors 4
2.2. Management and monitoring of industrial and environmental risks
2.2.1. TOTAL policies regarding health,
safety and the environment
2.2.3. Management
TOTAL has developed a “Health Safety Environment Quality
Charter” (see point 2 of Chapter 12) which sets out the basic
principles applicable within the Group regarding the protection of
people, property and the environment. This charter is rolled out at
several levels within the Group by means of management systems.
Along these lines, TOTAL has developed efficient organizations as
well as safety, environmental and quality management systems,
which it makes every effort to have certified or assessed (standards
such as the International Safety Rating System, ISO 14001 and
ISO 9001). For example, in 2010, TOTAL received ISO 9001
certification for “development and management of the database
of technical businesses” in Exploration and Production.
In most countries, TOTAL’s operations are subject to government
regulations concerning environmental protection and industrial
safety. The main regulations are:
1) In Europe: IPPC- Large Combustion Plants Directives
(recasted by IED Directive), SEVESO Directive, Pressure
Equipment Directive, Water Framework Directive, Waste
Directive, ETS Directive (CO2 quotas), Fuel Directive, REACH
and CLP Regulations.
2) In France: the legislation on natural and technological risks
also applies to several sites.
3) In the United States: several activities are subject to the
Occupational Safety and Health Administration (“OSHA”)
Process Safety Management of Highly Hazardous Materials
and the Superfund Act.
2.2.2. Assessment
As part of its policy, TOTAL systematically assesses risks and
impacts in the areas of industrial safety (particularly technological
risks), the environment and the protection of workers and local
residents:
– prior to approving new projects, investments, acquisitions and
disposals;
– periodically during operations (safety studies, environmental
impact studies, health impact studies and risk prevention plan in
France as part of the 2003 legislation on the prevention of major
technological risks);
– prior to introducing new substances to the market (toxicological
and ecotoxicological studies and life cycle analyses); and
– based on the regulatory requirements of the countries where
these activities are carried out and generally accepted standards.
In countries where prior administrative authorization and supervision
is required, projects are not undertaken without the authorization of
the relevant authorities and are developed according to the studies
provided to the authorities.
In particular, TOTAL has developed common methodologies for
analyzing technological risks which must gradually be applied to all
activities carried out by the Group’s companies.
TOTAL develops risk management measures based on risk and
impact assessments. These measures involve facility and structure
design, the reinforcement of safety devices and remedies of
environmental degradations.
In addition to developing organizations and management systems
as described above, TOTAL strives to minimize industrial and
environmental risks inherent in its operations by conducting
thorough inspections and audits, training personnel and raising
awareness among all those involved, and implementing an active
investment policy.
In addition, performance indicators (in the areas of HSE) and risk
monitoring have been put in place, objectives have been set and
action plans have been implemented to achieve these objectives.
Although the emphasis is on preventing risks, TOTAL takes regular
steps to prepare for crisis management based on the risk scenarios
identified.
In particular, TOTAL has developed emergency plans and
procedures to respond to an oil spill or leak. These plans and
procedures are specific to each TOTAL affiliate and adapted to its
organization, activities and environment, and are consistent with
the Group plan. They are reviewed regularly and tested through
exercises.
At the Group level, TOTAL has set up the alert scheme PARAPOL
(Plan to Mobilize Resources Against Pollution) to facilitate crisis
management and provide assistance by mobilizing both internal
and external resources in the event of pollution of marine, coastal
or inland waters, without geographical restriction. The PARAPOL
procedure is made available to TOTAL affiliates and its main goal
is to facilitate access to internal experts and physical response
resources.
Furthermore, TOTAL and its affiliates are currently members
of certain oil spill cooperatives that are able to provide expertise,
resources and equipment in all geographic areas where TOTAL has
operations, including in particular Oil Spill Response, CEDRE
(Center of documentation, research and experimentation on
accidental water pollution) and Clean Caribbean and Americas.
Following the blow-out on the Macondo well in the Gulf of Mexico
in 2010 (concerning which the Group was not involved), TOTAL
created three Task Forces in order to analyze risks and provide
recommendations.
In Exploration & Production, Task Force No. 1 reviewed the safety
aspects of deep offshore drilling operations (wells architecture,
design of blow-out preventers, training of personnel based on
lessons learned from the serious accidents that occurred recently
in the industry). Its efforts have led to the implementation of even
more stringent controls and audits on drilling operations.
Task Force No. 2, coordinated with the Global Industry Response
Group (GIRG) created by the OGP (International Association of Oil
and Gas Producers), is studying deep offshore oil capture and
containment operations in case of a pollution event in deep waters.
In the short term, capture devices will be available in several regions
of the world where TOTAL has a strong presence in exploration-
production (North Sea, Gulf of Guinea).
Registration Document 2011. TOTAL
79
4 Risk factors
Other risks
Task Force No. 3 related to plans to fight accidental spills in order
to strengthen the Group’s ability to respond to a major accidental
pollution, such as a blow out or a total loss of containment from an
FPSO (Floating Production, Storage and Offloading facility). This
initiative has led, in particular, to a sharp increase in the volume
of dispersants available within the Group.
More detailed information on TOTAL’s initiatives in the fields of
safety and protection of the environment is provided in Chapter 12.
The Group believes that it is impossible to guarantee that the
contingencies or liabilities related to the above mentioned health,
safety and environmental concerns will not have a material impact
on its business, assets and liabilities, consolidated financial
situation, cash flow or income in the future.
3. Other risks
3.1. Risks related to oil and gas exploration and production
Oil and gas exploration and production require high levels of
investment and are associated with particular risks and
opportunities. These activities are subject to risks related
specifically to the difficulties of exploring underground, the
characteristics of hydrocarbons and the physical characteristics
of an oil or gas field. Of risks related to oil and gas exploration,
geologic risks are the most important. For example, exploratory
wells may not result in the discovery of hydrocarbons, or may result
in amounts that would be insufficient to allow for economic
development. Even if an economic analysis of estimated
hydrocarbon reserves justifies the development of a discovery, the
reserves can prove lower than the estimates during the production
process, thus adversely affecting the economic development.
Almost all the exploration and production operations of TOTAL are
accompanied by a high level of risk of loss of the invested capital
due to the risks related to economic or political factors detailed
hereafter. It is impossible to guarantee that new resources of
crude oil or of natural gas will be discovered in sufficient amounts
to replace the reserves currently being developed, produced and
sold to enable TOTAL to recover the capital it has invested.
The development of oil and gas fields, the construction of facilities
and the drilling of production or injection wells require advanced
technology in order to extract and exploit fossil fuels with complex
properties over several decades. The deployment of this technology
in such a difficult environment makes cost projections uncertain.
TOTAL’s operations can be limited, delayed or canceled as a result
of a number of factors, including administrative delays, in particular
as part of the host states’ approval processes for development
projects, shortages, late delivery of equipment and weather
conditions, including the risk of hurricanes in the Gulf of Mexico.
Some of these risks may also affect TOTAL’s projects and facilities
further down the oil and gas chain.
3.2. Risks related to economic or political factors
The oil sector is subject to domestic regulations and the
intervention of governments, directly or through state-owned
companies, in such areas as:
Substantial portions of TOTAL’s oil and gas reserves are located
in certain countries that may be considered as politically and
economically unstable.
– the award of exploration and production interests;
– authorizations by governments or by a state-controlled partner,
in particular for development projects, annual programs or the
selection of contractors or suppliers;
– the imposition of specific drilling obligations;
– environmental protection controls;
– control over the development, exploitation and abandonment
of a field causing restrictions on production;
– calculating the costs that may be recovered from the relevant
authority and what expenditures are deductible from taxes;
– cases of expropriation, nationalization or reconsideration
of contractual rights.
The oil industry is also subject to the payment of royalties and
taxes, which may be higher than those applicable to other
commercial businesses and which may be subject to material
changes by the governments of certain countries.
A significant portion of TOTAL’s 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 28%, 24%, 10% and 8%, respectively, of the
Group’s 2011 combined liquids and gas 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 the Group has production have recently suffered from
some of these conditions, including Nigeria, where the Group had
in 2011 its second highest hydrocarbon production, and Libya.
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 the Group has
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 the Group’s operations in any of these
80
TOTAL. Registration Document 2011
Risk factors 4
Other risks
regions, causing substantial declines in production. Furthermore, in
addition to current production, TOTAL is 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 the Group has 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 the Group’s production and operations in the future.
Such oil and gas reserves and related operations are subject
to certain additional risks, including:
– the implementation of production and export quotas;
– the compulsory renegotiation of contracts;
– the expropriation or nationalization of assets;
– risks related to changes of local governments or the resulting
changes in business customs and practices;
– payment delays;
– currency exchange restrictions;
– depreciation of assets due to the devaluation of local currencies
or other measures taken by governments that might have a
significant impact on the value of activities; and
– losses and decreased activity due to armed conflicts, civil unrest,
the actions of terrorist groups or sanctions that target activities
or parties of certain countries.
TOTAL, like other major international oil companies, has a
geographically diverse portfolio of reserves and operational sites,
which allows it to conduct its business and financial affairs so as to
reduce its exposure to such political and economic risks. However,
there can be no assurance that such events will not adversely affect
the Group.
3.3. Legal aspects of the Group’s activities
3.3.1. Legal aspects to exploration
and production activities
consortium, on the one hand, and with the State or the state-
owned company, on the other hand.
TOTAL’s exploration and production operations are conducted in
various countries and are therefore subject to a broad range of
regulations. These cover virtually all aspects of exploration and
production operations, including leasehold rights, production rates,
royalties, environmental protection, exports, taxes and foreign
exchange rates. The terms of the concessions, licenses, permits
and contracts governing the Group’s ownership of oil and gas
interests vary from country to country. These concessions, licenses,
permits and contracts are generally granted by or entered into with
a government entity or a state-owned company and are sometimes
entered into with private owners. These arrangements usually take
the form of concessions or production sharing contracts.
The oil concession agreement remains the traditional model
for agreements entered into with States: the oil company owns
the assets and the facilities and is entitled to the entire production.
In exchange, the operating risks, costs and investments are the oil
company’s responsibility and it agrees to remit to the relevant State,
usually the owner of the subsoil resources, a production-based
royalty, income tax, and possibly other taxes that may apply under
local tax legislation.
The production sharing contract (PSC) involves a more complex
legal framework than the concession agreement: it defines the
terms and conditions of production sharing and sets the rules
governing the cooperation between the company or consortium in
possession of the license and the host State, which is generally
represented by a state-owned company. The latter can thus be
involved in operating decisions, cost accounting and production
allocation.
In some instances, concession agreements and PSCs coexist,
sometimes in the same country. Even though there are other
contractual models, TOTAL’s license portfolio is comprised mainly
of concession agreements.
In every country, the authorities of the host State, often assisted by
international accounting firms, perform joint venture and PSC cost
audits and ensure the observance of contractual obligations.
In some countries, TOTAL has also signed contracts called
“risked service contracts”, which are similar to production sharing
contracts. However, the profit oil is replaced by risked monetary
remuneration, agreed by contract, which depends notably on the
field performance. Thus, the remuneration under the Iraqi contract
is based on an amount calculated per barrel produced.
Oil and gas exploration and production activities are subject
to authorization granted by public authorities (licenses), which
are granted for specific and limited periods of time and include
an obligation to return a large portion, or the entire portion in case
of failure, of the area covered by the license at the end of the
exploration period.
TOTAL pays taxes on income generated from its oil and gas
production and sales activities under its concessions, production
sharing contracts and risked service contracts, as provided for
by local regulations. In addition, depending on the country, TOTAL’s
production and sales activities may be subject to a number of
other taxes, fees and withholdings, including special petroleum
taxes and fees. The taxes imposed on oil and gas production and
sales activities may be substantially higher than those imposed
on other industrial or commercial businesses.
The consortium agrees to undertake and finance all exploration,
development and production activities at its own risk. In exchange,
it is entitled to a portion of the production, known as “cost oil”, the
sale of which should cover all of these expenses (investments and
operating costs). The balance of production, known as “profit oil”,
is then shared in varying proportions, between the company or
The legal framework of TOTAL’s exploration and production
activities, established through concessions, licenses, permits
and contracts granted by or entered into with a government entity,
a state-owned company or, sometimes, private owners, is subject
to certain risks that, in certain cases, can reduce or challenge
the protections offered by this legal framework.
Registration Document 2011. TOTAL
81
4 Risk factors
Other risks
3.3.2. Legal aspects of
the Group’s other activities
The Group’s other businesses (Gas & Power, Downstream and
Chemicals) are also subject to a wide range of regulations.
In European countries and in the United States, sites and products
are subject to environmental (water, air, soil, noise, protection of
biodiversity, waste management, impact studies, etc.), health (on-
the-job safety, chemical product risks) and safety (safety of
personnel and residents, major risk facilities) regulations. Product
quality and consumer protection are also subject to regulations.
Within the European Union, EU regulations must be transposed into
Member States’ national laws or directly enforced. In such Member
States, EU legislation and regulations may be in addition to national
and local government regulations. In addition, in all Member States
of the European Union, industrial facilities operate pursuant to
licenses issued by competent local authorities that are based on
national laws and EU regulations.
In other countries where the Group operates, legislation is often
inspired by EU and U.S. regulations. These countries may more
fully develop certain aspects of regulation in particular fields, for
example protecting water, nature and health.
Irrespective of the particular country in which the Group operates,
TOTAL has developed standards based on best practices existing
in countries with more developed regulation and progressively
upgrades policies with respect to these standards.
In addition, depending on the country where the Group operates,
its other activities are subject to specific sector requirements that
impose constraints with respect to, for example, strategic oil
reserves holding requirements or and shipping capacities owned or
in chartered.
3.3.3. Civil liability
If an event occurs leading to personal injury, death, property
damage or discharge of hazardous materials into the environment,
contractual terms may provide for indemnification obligations, either
by TOTAL in favor of third-parties or by third-parties for TOTAL’s
benefit. With respect to joint ventures operated by TOTAL,
contractual terms generally provide that TOTAL assumes liability for
damages caused by its gross negligence or willful misconduct. With
respect to joint ventures in which TOTAL has an interest but that
are operated by others, contractual terms generally provide that the
operator assumes liability for damages caused by its gross
negligence or willful misconduct. All other liabilities of any type of
joint venture are generally assumed by the partners in proportion to
their respective ownership interests. With respect to third party
providers of goods and services, the amount and nature of liabilities
assumed by the third party depends on the context and may be
limited by contract. With respect to the Group’s customers, TOTAL
seeks to ensure that its products meet applicable specifications
and that TOTAL abides by all applicable consumer protection laws.
To manage these risks, TOTAL maintains worldwide third-party
liability insurance coverage for all of its subsidiaries. In addition,
TOTAL also maintains insurance to protect against the risk of
damage to Group property and/or business disruption to its main
refining and petrochemical sites. TOTAL’s insurance and risk
management policies are described under point 4 of the Chapter 4
(“Insurance and risk management”).
3.3.4. Ethical misconduct
and non compliance risks
The Code of Conduct of the Group, which applies to all of its
employees, defines the Group’s commitment to integrity,
compliance with all applicable legal requirements, high ethical
standards and the behaviors and actions that are expected
of the businesses and people of the Group wherever it operates.
Ethical misconduct or non-compliance with applicable laws and
regulations, including non-compliance with anti-bribery,
anticorruption and other applicable laws, could expose TOTAL
and its employees to criminal and civil penalties and could
be damaging to the Group’s reputation and its shareholder value.
The Group has been deploying ethics and compliance programs
since 2009, as a priority of the General Management. Refer to
paragraph 1.10.1 in Chapter 5 of this Registration Document for
more details.
3.3.5. Competition law
Competition laws apply to the Group’s companies in the vast
majority of countries in which it does business. Violations of
competition laws carry fines and expose the Group and its
employees to criminal sanctions and civil suits. Furthermore,
it is now common for persons or corporations allegedly injured
by violations of competition laws to sue for damages.
The broad range of activities and countries in which the Group
operates requires local analysis, by business segment, of the legal
risks in terms of competition law. Some of the Group’s business
segments have already been implementing competition law
conformity plans for a long time. Moreover, a Group-wide policy
designed to coordinate risk management measures and
competition law compliance plans has been under development
since the beginning of 2012.
3.3.6. Critical IT system services
and information security
The businesses of the Group depend heavily on the reliability and
security of its information technology (“IT”) systems. If the integrity
of the IT systems were compromised due to, for example, technical
failure or cyber attack, the business operations and assets of the
Group could sustain serious damage, material intellectual property
could be divulged and, in some cases, personal injury,
environmental harm and regulatory violations could occur.
The Information Technology Department has developed and
distributed governance and security rules that describe the
recommended infrastructure, organization and procedures to
maintain information systems that are appropriate to the
organization’s needs and to limit information security risks. These
rules are implemented across TOTAL under the responsibility of the
various business segments.
82
TOTAL. Registration Document 2011
Risk factors 4
Other risks
3.4. Activities in Cuba, Iran, Sudan and Syria
The United States and the European Union (“EU”) have adopted
legal restrictions with respect to certain activities in Cuba, Iran,
Sudan and Syria, and the U.S. Department of State has identified
these countries as state sponsors of terrorism. Provided in this
section is certain information relating to TOTAL’s activities in these
jurisdictions.
3.4.1. U.S. and European restrictions
- With respect to Iran, the United States adopted legislation
in 1996 implementing sanctions against non-U.S. companies
doing business in Iran and Libya (the Iran and Libya Sanctions
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”).
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 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 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 2011,
TOTAL had no production in Iran.
ISA was amended in July 2010 by the Comprehensive Iran
Sanctions, Accountability and Divestment Act of 2010
(“CISADA”), which expanded the scope of ISA and restricted the
President’s ability to grant waivers. In addition to sanctionable
investments in Iran’s petroleum sector, parties may now be
sanctioned for any transaction exceeding $1 million or series
of transactions exceeding $5 million in any 12-month period
for knowingly providing to Iran refined petroleum products,
and for knowingly providing to Iran goods, services, technology,
information or support that could directly and significantly either (i)
facilitate the maintenance or expansion of Iran’s domestic
production of refined petroleum products, or (ii) contribute to the
enhancement of Iran’s ability to import refined petroleum
products. The sanctions to be imposed against violating parties
generally prohibit transactions in foreign exchange by the
sanctioned party, 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 party, and require blocking of any property
of the sanctioned party that is subject to the jurisdiction
of the United States. Investments in the petroleum sector
commenced prior to the adoption of CISADA appear to remain
subject to the pre-amended version of ISA. The new sanctions
added by CISADA would be available with respect to new
investments in the petroleum sector or any other sanctionable
activity occurring on or after July 1, 2010. Prior to CISADA’s
enactment, TOTAL discontinued prohibited sales under ISA,
as amended by CISADA, of refined products to Iran.
On September 30, 2010, the U.S. State Department announced
that the U.S. government, pursuant to the “Special Rule”
provision of ISA added by CISADA that allows it to avoid making
a determination of sanctionability under ISA with respect to any
party that provides certain assurances, would not make such a
determination with respect to TOTAL. The U.S. State Department
further indicated at that time that, as long as TOTAL acts in
accordance with its commitments, TOTAL will not be regarded
as a company of concern for its past Iran-related activities.
On November 21, 2011, President Obama issued Executive
Order 13590, which authorized sanctions that are similar
to those available under ISA for knowingly, on or after
November 21, 2011, selling, leasing, or providing to Iran goods,
services, technology, or support that (i) has a fair market value
of $1 million or more or that, during a 12-month period, has an
aggregate fair market value of $5 million or more, and that could
directly and significantly contribute to the maintenance or
enhancement of Iran’s ability to develop petroleum resources
located in Iran, or (ii) has a fair market value of $250,000 or more
or that, during a 12-month period, has an aggregate fair market
value of $1 million or more, and that could directly and
significantly contribute to the maintenance or expansion of Iran’s
domestic production of petrochemical products. TOTAL does not
conduct activities in Iran that could be sanctionable under
Executive Order 13590, and there is no provision in Executive
Order 13590 that modifies the aforementioned “Special Rule”. In
addition, the U.S. State Department has published guidance that
states the completion of existing contracts is not sanctionable
under Executive Order 13590.
France and the EU 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. In July and October 2010, the European Union
adopted new restrictive measures regarding Iran. Among other
things, the supply of key equipment and technology in the
following sectors of the oil and gas industry in Iran are prohibited:
refining, liquefied natural gas, exploration and production. The
Registration Document 2011. TOTAL
83
4 Risk factors
Other risks
prohibition extends to technical assistance, training and financial
assistance in connection with such items. Extension of loans or
credit to, acquisition of shares in, entry into joint ventures with or
other participation in enterprises in Iran (or Iranian-owned
enterprises outside of Iran) engaged in any of the targeted
sectors also is prohibited. Moreover, with respect to restrictions
on transfers of funds and on financial services, any transfer of at
least €40,000 or equivalent to an Iranian individual or entity shall
require a prior authorization of the competent authorities of the
EU Member States.
On January 23, 2012, the Council of the European Union
prohibited the purchase, import and transport of Iranian oil and
petroleum and petrochemical products by European persons
and by entities constituted under the laws of an EU Member State.
Prior to that date, TOTAL had ceased these now-prohibited
activities.
TOTAL continues to closely monitor legislative and other
developments in France, the EU and the United States in order
to determine whether its limited activities in Iran, Syria and other
sanctioned or potentially sanctioned jurisdictions could subject it
to the application of sanctions. The Group cannot assure that
current or future regulations or developments will not have a
negative impact on its business or reputation.
- With respect to Syria, the EU adopted measures in May 2011
with criminal and financial penalties that prohibit the supply
of certain equipment to Syria, as well as certain financial and
asset transactions with respect to a list of named individuals and
entities. These measures apply to European persons and to
entities constituted under the laws of an EU Member State.
In September 2011, the EU adopted further measures, including,
notably, a prohibition on the purchase, import or transportation
from Syria of crude oil and petroleum products. Since early
September 2011, the Group ceased to purchase hydrocarbons
from Syria. On December 1, 2011, the EU extended sanctions
against, among others, three state-owned Syrian oil firms,
including General Petroleum Corporation, TOTAL’s co-contracting
partner in PSA 1988 (Deir Es Zor licence) and the Tabiyeh
contract. TOTAL has ceased its activities that contribute to oil
and gas production in Syria.
- The U.S. Treasury Department’s Office of Foreign Assets Control
(referred to as “OFAC”) administers and enforces broad and
comprehensive economic sanctions programs, as well as
sanctions that are based on the United Nations Security Council
resolutions referred to above and that target individuals engaged
in terrorism or weapons proliferation in Iran, using the blocking
of assets and trade restrictions. The activities that are restricted
depend on the sanctions program and targeted country or
parties, and civil and/or criminal penalties, imposed on a per
transaction basis, can be substantial. 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, among others, Cuba,
Iran, Myanmar (Burma), Sudan and Syria. TOTAL does not
believe that these sanctions are applicable to any of its activities
in the OFAC-targeted countries and, since the independence of
the Republic of South Sudan on July 9, 2011, TOTAL is no
longer present in Sudan.
On December 8, 2011, OFAC amended the Sudanese Sanctions
Regulations with the publication of two general licenses that
authorize all activities and transactions relating to the petroleum
and petrochemical industries in the Republic of South Sudan and
related financial transactions, and the transshipment of goods,
technology and services through Sudan to or from the Republic
of South Sudan and related financial transactions.
- In addition, many U.S. states have adopted legislation requiring
state pension funds to divest themselves of securities in any
company with active business operations in Iran or Sudan, and
state contracts not to be awarded to such companies. State
insurance regulators have adopted similar initiatives relating to
investments by insurance companies in companies doing
business with the Iranian oil and gas, nuclear, and defense
sectors. CISADA supports these state legislative initiatives.
If TOTAL’s operations in Iran were determined to fall within the
prohibited scope of these laws, and TOTAL were not to qualify
for any available exemptions, certain U.S. institutions holding
interests in TOTAL may be required to sell their interests. If
significant, sales of securities resulting from such laws and/or
regulatory initiatives could have an adverse effect on the prices
of TOTAL’s securities.
3.4.2. Business Activities in Cuba, Iran,
Sudan and Syria
Provided in this section is certain information relating to TOTAL’s
activities in these jurisdictions.
Cuba
In 2011, TOTAL’s Refining & Marketing division had limited
marketing activities for the sale of specialty products to non-state
entities in Cuba and paid taxes on such activities. In addition,
TOTAL’s Trading & Shipping division purchased hydrocarbons
pursuant to spot contracts from a state-controlled entity
for approximately €40 million.
Iran
TOTAL’s Exploration & Production division historically had been
active in Iran through buyback contracts. Under such contracts,
the contractor is responsible for and finances development
operations. Once development is completed, operations are
handed over to the national oil company, which then operates
the field. The contractor receives payments in cash or in kind to
recover its expenditures as well as a remuneration based on the
field’s performance. Furthermore, upon the national oil company’s
request, a technical services agreement may be implemented
in conjunction with a buyback contract to provide qualified
personnel and services until full repayment of all amounts due
to the contractor.
TOTAL entered into such buyback contracts between 1995
and 1999 with respect to the development of four fields: Sirri,
South Pars 2 & 3, Balal and Dorood. For all of these contracts,
development operations have been completed and TOTAL retains
no operational responsibilities. A technical services agreement
for the Dorood field expired in December 2010. As TOTAL is
no longer involved in the operation of these fields, TOTAL has
no information on the production from these fields. Some
payments are yet to be reimbursed to TOTAL with respect to
South Pars 2 & 3, Balal and Dorood. Since 2011, TOTAL has
no production in Iran corresponding to such payments in kind,
compared to 2 kboe/d in 2010 and 8 kboe/d in 2009. No royalties
or fees are paid by the Group in connection with these buyback
84
TOTAL. Registration Document 2011
Risk factors 4
Other risks
and service contracts. In 2011, TOTAL made non-material
payments to the Iranian administration with respect to certain
taxes and social security.
a dedicated non-profit operating company owned equally by the
Group and the state-owned General Petroleum Corporation
(“GPC”) (the successor to the Syrian Petroleum Company).
With respect to TOTAL’s Refining & Marketing division’s 2011
activities in Iran, Beh Total, a company held 50/50 by Behran Oil
and Total Outre-Mer, a subsidiary of the Group, produced and
marketed small quantities of lubricants (20,000 tons) for sale to
domestic consumers in Iran. In 2011, revenue generated from Beh
Total’s activities was €43.5 million and cash flow was €4.6 million.
Beh Total paid approximately €1 million in taxes. TOTAL does not
own or operate any refineries or chemicals plants in Iran. In 2011,
Beh Total paid €5.6 million of dividends for fiscal year 2010 (share
of TOTAL: €2.3 million).
In 2011, TOTAL’s Trading & Shipping division purchased
in Iran pursuant to a mix of spot and term contracts
approximately 49 million barrels of hydrocarbons from state-
controlled entities for approximately €3.7 billion. Prior to
January 23, 2012, TOTAL’s Trading & Shipping division ceased
its purchase of Iranian hydrocarbons.
Sudan
Since the independence of the Republic of South Sudan on
July 9, 2011, TOTAL is not present in Sudan.
TOTAL holds an interest in Block B in what was, prior to
July 9, 2011, the southern region of Sudan.
TOTAL disbursed in Sudan between January 1, 2011 and
July 8, 2011, approximately $0.7 million as scholarships and social
development contributions, as well as contributions to the
construction of social infrastructure, schools and water wells along
with non-governmental organizations and other stakeholders
involved in southern Sudan.
For more information on TOTAL’s activities in the Republic of South
Sudan, see paragraph 2.3.1, Chapter 2 (“Presentation of activities –
Republic of South Sudan”).
Syria
In 2011, TOTAL had two contracts relating to oil and gas
exploration & production activities: a Production Sharing Agreement
entered into in 1988 (“PSA 1988”) for an initial period of twenty years
and renewed at the end of 2008 for an additional 10-year period,
and the Tabiyeh Gas Project risked Service Contract (the “Tabiyeh
contract”) effective from the end of October 2009. TOTAL owns 100%
of the rights and obligations under PSA 1988, and operated until early
December 2011 on various oil fields in the Deir Ez Zor area through
3.5. Risks related to competition
TOTAL is subject to competition from other oil companies in
the acquisition of assets and licenses for the exploration
and production of oil and natural gas as well as for the sale of
manufactured products based on crude and refined oil. TOTAL’s
competitors are comprised of national oil companies and
international oil companies.
(1) Source: Reuters.
The main terms of PSA 1988 are similar to those normally used
in the oil and gas industry. The Group’s revenues derived from
PSA 1988 are made up of a combination of “cost oil” and “profit
oil”. “Cost oil” represents the reimbursement of operating and
capital expenditures and is accounted for in accordance with
normal industry practices. The Group’s share of “profit oil” depends
on the total annual production level. TOTAL receives its revenues
in cash payments made by GPC. TOTAL pays to the state-owned
Syrian company SCOT a transportation fee equal to $2/b for the oil
produced in the area, as well as non-material payments to the
Syrian government related to PSA 1988 for such items as
withholding taxes and Syrian social security.
The Tabiyeh contract, signed with GPC, may be considered
as an addition to PSA 1988 as production, costs and revenues for
the oil and part of the condensates coming from the Tabiyeh field
are governed by the contractual terms of PSA 1988. This project is
designed to enhance liquids and gas output from the Tabiyeh field
through the drilling of “commingled” wells and through process
modifications in Deir Ez Zor Gas Plant operated by the Syrian Gas
Company. Until early December 2011, TOTAL financed and
implemented the Tabiyeh Gas Project and operated the Tabiyeh field.
In 2011, technical production for PSA 1988 and the Tabiyeh
contract taken together amounted to 63 kboe/d, of which 53
kboe/d were accounted for as the Group’s share of production.
The amount identified as technical production under the
agreements, minus the amount accounted for as the Group’s share
of production, does not constitute the total economic benefit
accruing to Syria under the terms of the agreements since Syria
retains a margin on a portion of the Group’s production and
receives certain production taxes.
In addition, TOTAL and GPC entered into a Cooperation
Framework Agreement in 2009, which provides for the co-
development of oil projects in Syria.
Since early December 2011, TOTAL has ceased its activities that
contribute to oil and gas production in Syria.
In 2011, TOTAL’s Trading & Shipping division purchased in Syria
pursuant to a mix of spot and term contracts nearly 11 million
barrels of hydrocarbons from state-controlled entities for
approximately €824 million. Since early September 2011,
the Group has ceased to purchase hydrocarbons from Syria.
In this regard, the major international oil companies in competition
with TOTAL are ExxonMobil, Royal Dutch Shell, Chevron and BP.
As of December 31, 2011, TOTAL ranked fifth among these
companies in terms of market capitalization (1).
Registration Document 2011. TOTAL
85
4 Risk factors
Insurance and risk management
3.6. Legal and arbitration proceedings
The principal legal proceedings in which the Group’s companies are involved are described in Chapter 7 of this Registration Document.
4. Insurance and risk management
4.1. Organization
TOTAL has its own insurance and reinsurance company, Omnium
Insurance and Reinsurance Company (OIRC). OIRC is integrated
with the Group’s insurance management and is used as a
centralized global operations tool for covering the Group’s risks.
It allows the Group’s worldwide insurance program to be
implemented in compliance with the specific requirements of local
regulations applicable in the countries where the Group operates.
Some countries may require the purchase of insurance from a local
insurance company. If the local insurer accepts to cover the
subsidiary of the Group in compliance with its worldwide insurance
program, OIRC requests a retrocession of the covered risks from
the local insurer. As a result, OIRC negotiates reinsurance contracts
with the subsidiaries’ local insurance companies, which transfer
most of the risk to OIRC. When a local insurer covers the risks at
a lower level than that defined by the Group, OIRC provides
additional coverage so as to standardize coverage throughout
the Group.
At the same time, OIRC negotiates a reinsurance program at the
Group level with mutual insurance companies for the oil industry
and commercial reinsurers. OIRC permits the Group to better
manage price variations in the insurance market by taking on a
greater or lesser amount of risk corresponding to the price trends
in the insurance market.
In 2011, the net amount of risk retained by OIRC after reinsurance
was a maximum of $75 million per third-party liability insurance
claim and $75 million per property damage and/or business
interruption insurance claim. Accordingly, in the event of any loss
giving rise to an aggregate insurance claim, the effect on OIRC
would be limited to its maximum retention of $150 million per event.
4.2. Risk and insurance management policy
In this context, the Group risk and insurance management policy is
to work with the relevant internal department of each subsidiary to:
– define scenarios of major disaster risks (estimated maximum
loss);
– assess the potential financial impact on the Group should
a catastrophic event occur;
– help to implement measures to limit the probability that
a catastrophic event occurs and the financial consequences
if such event should occur; and
– manage the level of risk from such events to be either covered
internally by the Group or transferred to the insurance market.
86
TOTAL. Registration Document 2011
Insurance and risk management
Risk factors 4
4.3. Insurance policy
The Group has worldwide third-party liability and property insurance
coverage for all its subsidiaries. These programs are contracted
with first-class insurers (or reinsurers and mutual insurance
companies of the oil industry through OIRC).
The amounts insured depend on the financial risks defined in the
disaster scenarios and the coverage terms offered by the market
(available capacities and price conditions).
More specifically for:
– Third-party liability insurance: since the maximum financial risk
cannot be evaluated by a systematic approach, the amounts
insured are based on market conditions and industry practice,
in particular, the oil industry. In 2011, the Group’s third-party
liability insurance for any liability (including potential accidental
environmental liabilities) was capped at $850 million.
– Property damage and business interruption: the amounts insured
vary by sector and by site and are based on the estimated cost
of and reconstruction under maximum loss scenarios and on
insurance market conditions. The Group subscribed for business
interruption coverage in 2011 for its main refining and
petrochemical sites.
For example, for the Group’s highest risks (platforms in the North
Sea and main refineries and petrochemical plants in Europe),
in 2011 the Group’s share of insurance limit was
approximately $1.65 billion for the Downstream segment and
approximately $1.5 billion dollars for the Upstream segment.
Deductibles for property damage and third-party liability fluctuate
between €0.1 million and €10 million depending on the level of risk
and liability, and are borne by the relevant subsidiary. For business
interruption, coverage begins sixty days after the event giving rise
to the interruption.
Other insurance contracts are bought by the Group in addition
to property damage and third-party liability coverage, mainly for car
fleets, credit insurance and employee benefits. These risks are
entirely underwritten by outside insurance companies.
The above-described policy is given as an example of past practice
over a certain period of time and cannot be considered as
representative of future conditions. The Group’s insurance policy
may be changed at any time depending on the market conditions,
specific circumstances and on management’s assessment of the
risks incurred and the adequacy of their coverage.
While TOTAL believes its insurance coverage is in line with industry
practice and sufficient to cover normal risks in its operations, it is
not insured against all possible risks. In the event of a major
environmental disaster, for example, TOTAL’s liability may exceed
the maximum coverage provided by its third-party liability
insurance. The loss TOTAL could suffer in the event of such
disaster would depend on all the facts and circumstances and
would be subject to a whole range of uncertainties, including legal
uncertainty as to the scope of liability for consequential damages,
which may include economic damage not directly connected
to the disaster. The Group cannot guarantee that it will not suffer
any uninsured loss and there can be no guarantee, particularly
in the case of a major environmental disaster or industrial accident,
that such loss would not have a material adverse effect on
the Group.
Registration Document 2011. TOTAL
87
88
TOTAL. Registration Document 2011
Corporate governance 5
Corporate governance
1. Report of the Chairman of the Board of Directors
(Article L. 225-37 of the French Commercial Code) 90
1.1. Composition of the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .90
1.2. Other information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97
1.3. Corporate Governance Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .98
1.4. Rules of procedure of the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .98
1.5. Committees of the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .101
1.6. Activity of the Board of Directors and its Committees in 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .106
1.7. Board of Directors practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .108
1.8. Director independence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .109
1.9. Additional information on the members of the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .109
1.10. Internal control and risk management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110
1.11. Particular conditions regarding participation in Shareholder’s Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .112
1.12. Information mentioned in Article L. 225-100-3 of the French Commercial Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .112
1.13. Policy for determining the compensation and other benefits of the corporate executive officers . . . . . . . . . . . . . . . . . . . .112
2. Statutory auditor’s report
(Article L. 225-235 of the French Commercial Code) 114
3. General Management 115
3.1. Management Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .115
3.2. The Executive Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .115
3.3. The Management Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .115
4. Statutory auditors 116
4.1. Statutory auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .116
4.2. Alternate auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .116
4.3. Auditor’s term of office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .116
4.4. Fees received by the statutory auditors (including members of their network) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .117
5. Compensation for the administration and management bodies 117
5.1. Board Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .117
5.2. Directors’ attendance at Board and Committee meetings in 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .118
5.3. Compensation of the Chairman and Chief Executive Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .118
5.4. Executive officers’ compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119
5.5. Pensions and other commitments (Article L. 225-102-1, paragraph 3, of the French Commercial Code) . . . . . . . . . . . . . .119
5.6. Stock options and performance share grants policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .121
5.7. Summary table for the corporate executive officers (AFEP-MEDEF Code for corporate governance of listed companies) 124
5.8. TOTAL stock option grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .127
5.9. TOTAL stock options as of December 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .128
5.10. TOTAL global free and performance share grants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .132
5.11. TOTAL global free and performance share plans as of December 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .133
6. Employees, share ownership 135
6.1. Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135
6.2. Arrangements for involving employees in the Company’s share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135
6.3. Shares held by the administration and management bodies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .136
Registration Document 2011. TOTAL
89
5 Corporate governance
Report of the Chairman of the Board of Directors
1. Report of the Chairman of the Board of Directors
(Article L. 225-37 of the French Commercial Code)
Pursuant to Article L. 225-37 of the French Commercial Code,
the following report presents information for the year 2011 related
to the composition of the Board of Directors, the application
of the men/women balanced representation principle in the Board
of Directors, internal control procedures and risk management
implemented by the Company, any limits set by the Board
of Directors concerning the powers of the Chief Executive Officer,
as well as information related to corporate governance.
This report also sets forth the provisions of the by-laws concerning
participation in Shareholders’ Meetings as well as the principles
and rules applied to determine the compensation and other
benefits granted to corporate executive officers.
1.1. Composition of the Board of Directors
Directors are appointed by the shareholders for a 3-year term
(Article 11 of the Company’s by-laws).
In case of the resignation or death of a director between two
Shareholders’ Meetings, the Board may temporarily appoint
a replacement director. This appointment must be ratified by
the next Shareholders’ Meeting. The terms of office of the members
of the Board are staggered to more evenly space the renewal
of appointments.
The Board of Directors appoints the Chairman of the Board from
among its members. The Board of Directors also appoints the Chief
Executive Officer who may or may not be a member of the Board.
1.1.1. Composition of the Board
of Directors as of December 31, 2011
As of December 31, 2011, the Board of Directors had fifteen
members, including one director appointed by the shareholders
to represent employee shareholders. Twelve of the members of the
Board were independent (see paragraph 1.8 – Director independence –
in this Chapter 5).
The following individuals were members of the Board of Directors
of TOTAL S.A. (information as of December 31, 2011(1)):
Christophe de Margerie
Born on August 6, 1951 (French).
Mr. de Margerie joined the Group after graduating from the École
Supérieure de Commerce in Paris in 1974. He served in several
positions in the Group’s Finance Department and Exploration &
Production division. In 1995, he was appointed President of Total
Middle East. In May 1999, he joined the Executive Committee
as President of the Exploration & Production division. He then became
Senior Executive Vice President of Exploration & Production
of the new TotalFinaElf group in 2000. In January 2002, he became
President of the Exploration & Production division of TOTAL.
He was appointed a member of the Board of Directors by
the Shareholders’ Meeting held on May 12, 2006 and became Chief
Executive Officer of TOTAL on February 14, 2007. On May 21, 2010,
he was appointed Chairman and Chief Executive Officer of TOTAL.
Director of TOTAL S.A. since 2006 - Last renewal: May 15, 2009
until 2012.
Chairman of the Strategic Committee.
Holds 105,556 TOTAL shares and 53,869 shares of the
“TOTAL ACTIONNARIAT FRANCE” collective investment fund.
Current directorships
– Chairman and Chief Executive Officer of TOTAL S.A.* since
May 21, 2010 (Chief Executive Officer since February 14, 2007)
– Chairman of Total E&P Indonésie
– Director of Shtokman Development AG (Switzerland)
– Member of the Supervisory Board of Vivendi*
– Manager of CDM Patrimonial SARL
Directorships that expired in the previous five years
– Chairman and Chief Executive Officer of Elf Aquitaine until
June 21, 2010
– Director of Total E&P Russia until 2008
– Director of Total Exploration and Production Azerbaijan until 2008
– Director of Total E&P Kazakhstan until 2008
– Director of Total Profils Pétroliers until 2008
– Director of Abu Dhabi Petroleum Company Ltd (ADPC) until 2008
– Director of Abu Dhabi Marine Areas Ltd (ADMA) until 2008
– Director of Iraq Petroleum Company Ltd (IPC) until 2008
– Permanent representative of TOTAL S.A. on the Board of Total
Abu al Bukhoosh until 2008
– Director of Total E&P Norge A.S. until 2007
– Director of Total Upstream UK Ltd until 2007
Thierry Desmarest
Born on December 18, 1945 (French).
A graduate of the École Polytechnique and an Engineer of the French
Corps des Mines, Mr. Desmarest served as Director of Mines and
Geology in New Caledonia, then as technical advisor at the Offices
of the Minister of Industry and the Minister of Economy. He joined
TOTAL in 1981, where he held various management positions, then
served as President of Exploration & Production until 1995. He served
as Chairman and Chief Executive Officer of TOTAL from May 1995
until February 2007, and then as Chairman of the Board of TOTAL
until May 21, 2010. He was appointed Honorary Chairman and
remains a director of TOTAL and Chairman of the TOTAL Foundation.
Director of TOTAL S.A. since 1995 - Last renewal: May 21, 2010
until 2013.
(1) Including information pursuant to paragraph 4 of Article L. 225-102-1 of the French Commercial Code or under Item 14.1 of Annex I of EC Regulation No. 809/2004 of April 29, 2004.
* Company names marked with an asterisk are publicly-listed companies.
Underlined companies are companies that do not belong to the group in which the director has his or her main duties.
90
TOTAL. Registration Document 2011
Report of the Chairman of the Board of Directors
Corporate governance 5
Chairman of the Nominating & Governance Committee, member
of the Compensation Committee and the Strategic Committee.
Holds 186,576 shares in full and 144,000 shares by usufruct.
Current directorships
– Director of TOTAL S.A.*
– Director of Sanofi*(1)
– Director of Air Liquide*
– Director of Renault S.A.*
– Director of Renault S.A.S.
– Director of Bombardier Inc.* (Canada)
of Financière Pinault. She was the President of the Supervisory
Board of the Pinault Printemps Redoute group until May 2005 and
became Vice-President of the Board of Directors of PPR in May 2005.
Patricia Barbizet is also a member of the Board of Directors of TOTAL,
TF1, Air France-KLM and Fonds stratégique d’investissement.
Director of TOTAL S.A. since 2008 - Last renewal: May 13, 2011
and until 2014.
Chairperson of the Audit Committee and member of the Strategic
Committee.
Holds 1,000 shares.
Directorships that expired in the previous five years
Current directorships
– Chairman of the Board of Directors of TOTAL S.A.* until
May 21, 2010
– Chairman and Chief Executive Officer of TOTAL S.A.* until 2007
– Chairman and Chief Executive Officer of Elf Aquitaine until 2007
– Member of the Supervisory Board of Areva* until March 4, 2010
Patrick Artus
Born on October 14, 1951 (French).
– Director of TOTAL S.A.*
– Vice Chairman of the PPR Board*
– Chief Executive Officer and Director of Artémis
– Member of the Supervisory Board of Financière Pinault (CSA)
– Chief Executive Officer (non-Director) of Financière Pinault
– Director and Deputy Chief Executive Officer of Société Nouvelle
du Théâtre Marigny
– Permanent representative of Artémis at the Board of Directors
of Agefi
Independent director.
– Permanent representative of Artémis at the Board of Directors
A graduate from the École Polytechnique, the École Nationale
de la Statistique et de l’Administration de l’Économie (ENSAE) and
the Institut d’Études Politiques de Paris, Mr. Artus began his career
at the INSEE (French National Institute for Statistics and Economic
Studies) where his work included economic forecasting and modeling.
He then worked at the Economics Department of the OECD (1980),
later becoming the Head of Research at the ENSAE from 1982
to 1985. He was scientific adviser at the research department of
the Banque de France, before joining the Natixis Group as the head
of the research department. He is an associate professor at the
University of Paris I, Sorbonne. He is also a member of the council
of economic advisors to the French Prime Minister and of the
Cercle des Économistes.
Director of TOTAL S.A. since May 15, 2009 and until 2012.
Member of the Compensation Committee.
Holds 1,000 shares.
Current directorships
– Director of TOTAL S.A.*
– Director of IPSOS
Directorships that expired in the previous five years
None.
Patricia Barbizet
Born on April 17, 1955 (French)
Independent director.
A graduate of the École Supérieure de Commerce of Paris in 1976,
Ms. Barbizet started her career in the Renault Group as the Treasurer
of Renault Véhicules Industriels and Chief Financial Officer of Renault
Crédit International. She joined the Pinault group in 1989 as the Chief
Financial Officer. In 1992, she became the Chief Executive Officer
of Sebdo le Point
– Member of the Management Board of Château Latour (SCI)
– Member of the Supervisory Board of Yves Saint Laurent
– Administratore Delagato and administratore of Palazzo Grazzi
– Non-executive Director of Tawa Plc*
– Chairman of the Board of Directors of Christie’s International Plc
– Board member of Gucci Group N.V.
– Director of Air France-KLM*
– Director of Bouygues*
– Director of TF1*
– Director of the Fonds stratégique d’investissement
(French government sovereign fund)
Directorships that expired in the previous five years
– Director of Fnac until May 2011
– Director of Piaza until 2008
– Chairman of the Board of Directors of Piaza until 2008
– Chairman and Chief Executive Officer of Piaza until 2007
Daniel Bouton
Born on April 10, 1950 (French).
Independent director.
Inspector General of Finance, Mr. Bouton has held various positions
within the French Ministry of Economy. He served as Budget Director
at the Ministry of Finance from 1988 to 1990. He joined Société
Générale in 1991, where he was appointed Chief Executive Officer
in 1993, then Chairman and Chief Executive Officer in November 1997.
He served as Chairman of the Société Générale group until
May 12, 2008 and has been the Honorary Chairman since
May 6, 2009.
Director of TOTAL S.A. since 1997 - Last renewal: May 15, 2009
until 2012.
Holds 3,200 shares.
(1) Non-consolidated company which was removed from the scope of consolidation on July 1, 2010.
* Company names marked with an asterisk are publicly-listed companies.
Underlined companies are companies that do not belong to the group in which the director has his or her main duties.
Registration Document 2011. TOTAL
91
5 Corporate governance
Report of the Chairman of the Board of Directors
Current directorships
– Director of TOTAL S.A.*
– Director of Veolia Environnement*
Directorships that expired in the previous five years
– Chairman and Chief Executive Officer of Société Générale*
“TOTAL MONÉTAIRE” and “TOTAL OBLIGATIONS” collective
investment funds since 2010.
Director of TOTAL S.A. since May 21, 2010 and until 2013.
Holds 820 TOTAL shares and 3,442 shares of the “TOTAL
ACTIONNARIAT FRANCE” collective investment fund.
until 2008 and Chairman of the Board of Directors until 2009
Current directorships
Gunnar Brock
Born on April 12, 1950 (Swedish)
Independent director.
Graduated from the Stockholm School of Economics with an MBA
grade in Economics and Business Administration, Mr. Brock held
various international positions at Tetra Pak. He served as Chief
Executive Officer of Alfa Laval from 1992 to 1994 and as Chief
Executive Officer of Tetra Pak from 1994 to 2000. After serving
as Chief Executive Officer of Thule International, he was appointed
Chief Executive Officer of Atlas Copco AB from 2002 to 2009. He is
currently Chairman of the Board of Stora Enso Oy. Mr. Brock is also
a member of the Royal Swedish Academy of Engineering Sciences
and of the Board of Directors of the Stockholm School of Economics.
Director of TOTAL S.A. since May 21, 2010 and until 2013.
Member of the Strategic Committee.
Holds 1,000 shares.
Current directorships
– Director of TOTAL S.A.*
– Chairman of the Board of Stora Enso Oy
– Chairman of the Board of Mölnlycke Health Care Group
– Member of the Board of Investor AB
– Chairman of the Board of Rolling Optics
– Member of the Board of Stena AB*
Directorships that expired in the previous five years
– Director of TOTAL S.A.* representing employee shareholders
Directorships that expired in the previous five years
President of the Supervisory Board of the “TOTAL ACTIONS
EUROPÉENNES” collective investment fund until 2011.
Marie-Christine Coisne-Roquette
Born on November 4, 1956 (French)
Independent director.
A graduate of the University of Paris X Nanterre (law and English)
and admitted to the Paris and New York Bar Associations in 1980,
Ms. Coisne-Roquette worked as an attorney in Paris and New York
until 1988, when she joined the family-owned Sonepar group.
From 1988 to 1998, while also serving as Chief Executive Officer of
the family-owned Colam Entreprendre holding company, she held
several consecutive operational directorships at Sonepar S.A.,
where she was appointed Chairman of the Board in 1998. She has
served as Chairman and Chief Executive Officer of Sonepar
since 2002. A member of the Executive Board of MEDEF
since 2000, Ms. Coisne-Roquette has chaired that organization’s
Tax Commission since 2005.
Director of TOTAL S.A. since May 13, 2011 and until 2014.
Member of the Audit Committee since May 13, 2011.
Holds 1,130 shares.
Current directorships
– Member of the Supervisory Board of Spencer Stuart Scandinavia
until 2011
– Chief Executive Officer of Atlas Copco until 2009
– Chairman of the Board of Lego AS until 2008
Claude Clément
– Director of TOTAL S.A.*
– Chairperson and Chief Executive Officer of Sonepar S.A.
– Chairman and Chief Executive Officer of Colam Entreprendre
– Director of Hagemeyer Canada, Inc.
– President of the Supervisory Board of OTRA N.V.
– Director of Sonepar Canada, Inc.
– President of the Supervisory Board of Sonepar Deutschland
Born on November 17, 1956 (French).
GmbH
Mr. Clément joined the Group in February 1977 and started
his career at Compagnie Française de Raffinage, which offered
him professional training. He held various positions at the Refining
Manufacturing Department in French and African refineries (Gabon,
Cameroon). He is currently Manager of the Refining Manufacturing
Methods at the Refining Manufacturing Division. Mr. Clément has
been an elected member of the Supervisory Board of the “TOTAL
ACTIONNARIAT FRANCE” collective investment fund since 2009,
an elected member of the Supervisor Board of the “TOTAL
ACTIONS EUROPÉENNES”, “TOTAL DIVERSIFIÉ À DOMINANTE
ACTIONS” and “TOTAL ÉPARGNE SOLIDAIRE” collective investment
funds since 2010 and an elected member of the Supervisor Board
of the “TOTAL DIVERSIFIÉ À DOMINANTE OBLIGATIONS”,
– Director of de Sonepar Ibérica
– Director of de Sonepar Italia Holding
– Chairperson of the Board of Directors of Sonepar Mexico
– Member of the Supervisory Board of Sonepar Nederland B.V.
– Director of Sonepar USA Holdings, Inc.
– Director of Feljas and Masson SAS
– Permanent representative of Colam Entreprendre, member of the
Board of Directors at Cabus & Raulot (S.A.S)
– Permanent representative of Colam Entreprendre and Sonepar,
co-administrators of Sonedis (société civile)
– Permanent representative of Sonepar, Director of Sonepar France
– Permanent representative of Sonepar, President of Sonepar
International (S.A.S)
* Company names marked with an asterisk are publicly-listed companies.
Underlined companies are companies that do not belong to the group in which the director has his or her main duties.
92
TOTAL. Registration Document 2011
Report of the Chairman of the Board of Directors
Corporate governance 5
– Permanent representative of Colam Entreprendre, Director
of Sovemarco Europe (S.A.)
– Co-manager of Développement Mobilier & Industriel (D.M.I.)
(société civile)
– Manager of Ker Coro (société civile immobilière)
Directorships that expired in the previous five years
– Director of Encon Safety Products, Inc. until 2010
– Director of Guerin S.A. until 2007
– Director of Hagemeyer North America, Inc. until 2010
– Director of Hagemayer PPS Ltd until 2010
– Chairperson of the Board of Directors of Hagemayer PPS
until 2008
– Director of Sellenium until 2007
– Chairperson of the Board of Directors of Sonepar Canada, Inc.
Director of TOTAL S.A. since 2000 - Last renewal: May 15, 2009
until 2012.
Member of the Compensation Committee and the Nominating &
Governance Committee.
Holds 4,712 shares.
Current directorships
– Director of TOTAL S.A.*
– Director of Lafarge*
– Director of DuPont* (United States)
– Director of Atco* (Canada)
Directorships that expired in the previous five years
– Chairman of the Institut Français des Relations Internationales
until 2009
(IFRI) until 2011
– Director of Sonepar E.C.O until 2007
– Chairperson of the Board of Directors of Sonepar France until 2009
– Director of Sonepar Iberica until 2007
– Chairperson of the Board of Directors and acting Managing
Director of Sonepar Iberica until 2009
– Chairman of the Board of Directors of Lafarge* until 2007
Paul Desmarais Jr.
Born on July 3, 1954 (Canadian)
– Chairperson of the Board of Directors of Sonepar Italia Holding
Independent director.
until 2009
– Chairperson of the Board of Directors of Sonepar Mexico until 2010
– Chairperson of the Supervisory Board of Sonepar Nederland B.V.
until 2009
– Chairperson of the Board of Directors of Sonepar Nordic A/S
until 2009
– Chairperson of the Board of Directors and CEO of Sonepar USA
Holdings, Inc. until 2009
– Director of Vallen Corporation until 2010
– Permanent representative of Sonepar, Director of A.E.D. until 2010
– Permanent representative of Sonepar, Director of C.S.O. until 2010
– Permanent representative of Sonepar, President of CEMT until 2007
– Permanent representative of Sonepar, Director of Collin Sigmadis
until 2010
– Permanent representative of Sonepar, Director of G.M.T. until 2010
– Permanent representative of Sonepar, Director of S.N.E. until 2010
– Permanent representative of Sonepar, Director of S.S.E. until 2010
– Permanent representative of Sonepar, General Partner of Sonepar
Belgium until 2009
– Permanent representative of Sonepar, Director of Teissier until 2010
– Permanent representative of Sonepar France, Director of Sonepar
Ile de France until 2007
Bertrand Collomb
A graduate of McGill University in Montreal and INSEAD in
Fontainebleau, Mr. Desmarais was elected Vice Chairman (1984)
then Chairman of the Board (1990) of Corporation Financière Power,
a company he helped to found. Since 1996, he has served
as Chairman of the Board and Co-Chief Executive Officer of Power
Corporation of Canada.
Director of TOTAL S.A. since 2002 - Last renewal: May 13, 2011
until 2014.
Holds 2,000 ADRs (corresponding to 2,000 shares).
Current directorships
– Director of TOTAL S.A.*
– Chairman of the Board, Co-Chief Executive Officer and Member
of the Executive Committee of Power Corporation of Canada*
– Co-Chairman of the Board and member of the Executive
Committee of Corporation Financière Power* (Canada)
– Vice Chairman and Acting Managing Director of Pargesa
Holding S.A.* (Switzerland)
– Director and member of the Executive Committee of La Great-West
Compagnie d’assurance-vie (Canada)
– Director and member of the Executive Committee of First Great-West
Life & Annuity Insurance Company (United States)
– Director and member of the Executive Committee of Great-West
Born on August 14, 1942 (French).
Lifeco Inc.* (Canada)
Independent director.
A graduate of the École Polytechnique and a member of France’s
engineering Corps des Mines, Mr. Collomb held a number of positions
within the Ministry of Industry and other cabinet positions from 1966
to 1975. He joined the Lafarge group in 1975, where he served
in various management positions. He served as Chairman and Chief
Executive Officer of Lafarge from 1989 to 2003, then as Chairman
of the Lafarge Board of Directors from 2003 to 2007, and has been
the Honorary Chairman since 2007. He is also Chairman of the Institut
des Hautes Études pour la Science et la Technologie (IHEST)
and a Board member of the Institut Européen de la Technologie.
– Director of Great West Financial (Canada) Inc. (Canada)
– Director and member of the Permanent Committee of Groupe
Bruxelles Lambert S.A.* (Belgium)
– Director and member of the Executive Committee of Groupe
Investors Inc. (Canada)
– Director and member of the Executive Committee of Groupe
d’assurance London Inc. (Canada)
– Director and member of the Executive Committee of London Life,
compagnie d’assurance-vie (Canada)
– Director and member of the Executive Committee of Mackenzie Inc.
– Director and Deputy Chairman of the Board of La Presse Ltée
(Canada)
* Company names marked with an asterisk are publicly-listed companies.
Underlined companies are companies that do not belong to the group in which the director has his or her main duties.
Registration Document 2011. TOTAL
93
5 Corporate governance
Report of the Chairman of the Board of Directors
– Director and Deputy Chairman of Gesca Ltée (Canada)
– Director of GDF Suez*
– Director of Lafarge*
– Director and member of the Executive Committee of Compagnie
d’Assurance du Canada sur la Vie (Canada)
– Director and member of the Executive Committee of the Corporation
Director of TOTAL S.A. since May 13, 2011 and until 2014.
Member of the Strategic Committee.
Holds 1,000 shares.
Current directorships
Financière Canada Life (Canada)
– Director and member of the Executive Committee of IGM Inc.*
– Director of TOTAL S.A.*
– Member of the Management Board of Siemens AG*
(Canada)
– Director and Chairman of the Board of 171263 Canada Inc. (Canada)
– Director of 152245 Canada Inc. (Canada)
– Director of GWL&A Financial Inc. (United States)
– Director of Great West Financial (Nova Scotia) Co. (Canada)
– Director of First Great-West Life & Annuity Insurance Company
(United States)
– Director of Power Communications Inc.
– Director and Vice Chairman of the Board of Power Corporation
International
Directorships that expired in the previous five years
– Member of the Board of Directors of INSEAD until 2011
– Member of the Board of Directors of ZF Friedrichshafen AG
until 2011
– Member of the Board of Directors of Firmenich S.A. until 2010
– Member of the Board of Directors of COFRA Holding AG until 2008
– Member of Group Management Committee of Royal Philips
Electronics N.V. until 2008
– Director and member of the Executive Committee of Putnam
Anne Lauvergeon
Investments LLC
– Member of the Supervisory Board of Power Financial Europe B.V.
– Director of Canada Life Capital Corporation Inc. (Canada)
– Director and member of the Executive Committee of The Canada
Life Assurance Company of Canada (Canada)
– Director and member of the Executive Committee of Crown Life
Insurance Company (Canada)
– Director and Deputy Chairman of the Board of Square Victoria
Communications Group Inc.
– Member of the Supervisory Board of Parjointco N.V.
Directorships that expired in the previous five years
– Assistant Chairman of the Board of 3819787 Canada Inc.
(Canada) until 2010
– Member of the Board of Les Journaux Trans-Canada (1996) Inc.
Born on August 2, 1959 (French).
Independent director.
Chief Mining Engineer and a graduate of the École Normale Supérieure
with a doctorate in physical sciences, Ms. Lauvergeon held various
positions in industry before becoming Deputy Chief of Staff in the
Office of the President of the Republic in 1990. She joined Lazard
Frères et Cie as Managing Partner in 1995. From 1997 to 1999,
she was Executive Vice President and member of the Executive
Committee of Alcatel, in charge of industrial partnerships and
international affairs. Ms. Lauvergeon served as Chairman
of the Management Board of Areva from July 2001 to June 2011
and Chairman and Chief Executive Officer of Areva NC (formerly
Cogema) from June 1999 to June 2011.
(Canada) until 2009
– Director and Vice-Chairman of the Board of Directors of Imerys*
Director of TOTAL S.A. since 2000 - Last renewal: May 15, 2009
until 2012.
(France) until 2008
– Director of GWL Properties until 2007
– Member of the International Consultative Committee
of the La Poste group until 2007
Barbara Kux
Born on February 26, 1954 (Swiss).
Independent director.
Holder of an MBA (with honors) from INSEAD in Fontainebleau,
Ms. Kux joined McKinsey & Company in 1984 as a Management
Consultant, where she was responsible for strategic assignments
for international groups. After serving as manager for development
of emerging markets at ABB and then at Nestlé between 1989
and 1999, she was appointed Executive Director of Ford in Europe
from 1999 to 2003. In 2003, Ms. Kux became a member of the
Management Committee of the Philips group and, starting in 2005,
was in charge of sustainable development. Since 2008, she has
been a member of the Management Board of Siemens AG.
She is also responsible for sustainable development at the Group
and is in charge of the Group’s supply chain.
Member of the Strategic Committee.
Holds 2,000 shares.
Current directorships
– Director of TOTAL S.A.*
– Director of GDF Suez*
– Director of Vodafone Group Plc*
Directorships that expired in the previous five years
– Chairperson of the Management Board of Areva* until June 30, 2011
– Chairman and Chief Executive Officer of Areva NC June 30, 2011
– Vice Chairperson and Member of the Supervisory Board of Safran*
until 2009
Claude Mandil
Born on January 9, 1942 (French).
Independent director.
A graduate of the École Polytechnique and a General Engineer from
France’s engineering school Corps des Mines, Mr. Mandil served
as a Mining Engineer in the Lorraine and Bretagne regions. He then
served as a Project Manager at the Délégation de l’Aménagement
* Company names marked with an asterisk are publicly-listed companies.
Underlined companies are companies that do not belong to the group in which the director has his or her main duties.
94
TOTAL. Registration Document 2011
Report of the Chairman of the Board of Directors
Corporate governance 5
– Director of BNP Paribas Suisse
– Member of the Supervisory Board of Banque marocaine
pour le Commerce et l’Industrie*
– Non-voting member (Censeur) of Galeries Lafayette
Directorships that expired in the previous five years
– Chairman of the Board of Directors of BNP Paribas until
December 1, 2011
– Director of Lafarge* until May 2011
– Chairman of la Fédération Bancaire Européenne until 2008
Thierry de Rudder
Born on September 3, 1949 (Belgian and French).
Independent director.
A graduate of the Université de Genève in mathematics,
the Université Libre de Bruxelles and Wharton (MBA), Mr. de Rudder
served in various positions at Citibank from 1975 to 1986 before
joining Groupe Bruxelles Lambert, where he was appointed Acting
Managing Director.
Director of TOTAL S.A. since 1999 - Last renewal: May 21, 2010
until 2013.
Member of the Audit Committee and the Strategic Committee.
Holds 3,956 shares.
Current directorships
– Director of TOTAL S.A.*
– Acting Managing Director of Groupe Bruxelles Lambert*
– Director of Brussels Securities (Belgium)
– Director of GBL Treasury Center (Belgium)
– Director of Sagerpar (Belgium)
– Director of GBL Energy Sàrl (Luxembourg)
– Director of GBL Verwaltung Sàrl (Luxembourg)
– Director of GBL Verwaltung GmbH (Germany)
– Director of Ergon Capital Partners (Belgium)
– Director of Ergon Capital Partners II (Belgium)
– Director of Ergon Capital Partners III (Belgium)
– Director of GDF Suez*
– Director of Lafarge*
– Director of Electrabel
Directorships that expired in the previous five years
– Director of Compagnie Nationale à Portefeuille* until 2011
– Director of Suez-Tractebel (Belgium) until April 2010
– Director of Imerys* until 2010
– Director of GBL Participations (Belgium) until 2010
– Director of GBL Finance S.A. (Luxembourg) until 2009
– Director of Immobilière Rue de Namur (Luxembourg) until 2007
du Territoire et de l’Action Régionale (City and Department
planning/DATAR) and as the Interdepartmental Head of Industry
and Research and regional delegate of ANVAR. From 1981
to 1982, he served as the technical advisor on the staff of the Prime
Minister, in charge of the industry, energy and research sectors.
He was appointed Chief Executive Officer, then Chairman and
Chief Executive Officer of the Institut de Développement Industriel
(Industry Development Institute - IDI) until 1988. He was Chief
Executive Officer of the Bureau de Recherches Géologiques
et Minières (BRGM) from 1988 to 1990. From 1990 to 1998,
Mr. Mandil was Chief Executive Officer for Energy and Commodities
at the French Industry Ministry and the first representative for France
to the Management Board of the International Energy Agency (IEA).
He served as Chairman of the IEA from 1997 to 1998. In 1998,
he was appointed Deputy Chief Executive Officer of Gaz de France
and, in April 2000, Chairman of the Institut Français du Pétrole
(French Institute for Oil). From 2003 to 2007, he was the Executive
Director of the EIA.
Director of TOTAL S.A. since 2008 - Last renewal: May 13, 2011
and until 2014
Member of the Strategic Committee.
Holds 1,000 shares.
Current directorships
– Director of TOTAL S.A.*
– Director of Institut Veolia Environnement
– Director of Schlumberger SBC Institute
Directorships that expired in the previous five years
– Director of GDF Suez* from July to December 2008
Michel Pébereau
Born on January 23, 1942 (French).
Independent director.
Honorary Inspector General of Finance, Mr. Pébereau held various
positions in the Ministry of Economy and Finance, before serving,
from 1982 to 1993, as Chief Executive Officer and then as Chairman
and Chief Executive Officer of Crédit Commercial de France (CCF).
He was Chairman and Chief Executive Officer of BNP then BNP
Paribas from 1993 to 2003, Chairman of the Board of Directors
from 2003 to December 1, 2011, and is currently Honorary Chairman
of BNP Paribas.
Director of TOTAL S.A. since 2000 - Last renewal: May 15, 2009
until 2012.
Chairman of the Compensation Committee and member
of the Nominating & Governance Committee.
Holds 2,356 shares.
Current directorships
– Director of TOTAL S.A.*
– Director of BNP Paribas*
– Director of Saint-Gobain*
– Director of AXA*
– Director of EADS N.V.*
– Director of Pargesa Holding S.A.* (Switzerland)
* Company names marked with an asterisk are publicly-listed companies.
Underlined companies are companies that do not belong to the group in which the director has his or her main duties.
Registration Document 2011. TOTAL
95
5 Corporate governance
Report of the Chairman of the Board of Directors
1.1.2. Expired directorships
of TOTAL S.A. as of May 13, 2011
1.1.3. Co-opted Director
since the close of 2011
Bertrand Jacquillat
Born on April 11, 1944 (French).
Independent director.
A graduate of École des Hautes Études Commerciales (HEC),
Institut d’études politiques de Paris and Harvard Business School,
Mr. Jacquillat holds a PhD in management. He has been a university
professor (in both France and the United States) since 1969,
a professor at the Institut d’Études Politiques in Paris since 1999,
Vice-President of the Cercle des Économistes, and founding
chairman of Associés en Finance.
Director of TOTAL S.A. since 1996 - Last renewal: May 16, 2008 -
Term of office: May 13, 2011.
Current directorships (as of May 13, 2011)
– Chairman and Chief Executive Officer of Associés en Finance
– Member of the Supervisory Board of Klépierre*
– Member of the Supervisory Board of Presses Universitaires
de France (PUF)
Directorships that expired in the previous five years
– Director and member of the Audit Committee of TOTAL S.A.
until May 13, 2011.
Lord Levene of Portsoken
Born on December 8, 1941 (British).
Independent director.
Lord Levene served in various positions within the Ministry of Defense,
the office of the Secretary of State for the Environment, the office
of the Prime Minister and the Ministry of Trade in the United Kingdom
from 1984 to 1995. He served as senior adviser at Morgan Stanley
from 1996 to 1998 and was then appointed Chairman of Bankers
Trust International from 1998 to 2002. He was Lord Mayor of London
from 1998 to 1999. He is currently Chairman of Lloyd’s.
Director of TOTAL S.A. since 2005 - Llast renewal: May 16, 2008 -
Term of office: May 13, 2011.
Current directorships (as of May 13, 2011)
– Chairman of Lloyd’s
– Chairman of General Dynamics UK Ltd
– Director of Haymarket Group Ltd
– Director of China Construction Bank*
– Chairman of NBNK Investments Plc*
Directorships that expired in the previous five years
– Chairman of TOTAL S.A.* until May 13, 2011
– Chairman of International Financial Services until 2010
At the meeting held on January 12, 2012, the Board of Directors
took note of the resignation of Mr. Thierry de Rudder from his position
as a director as of the end of the Board meeting, and consequently
decided to co-opt Mr. Gérard Lamarche to replace Mr. de Rudder,
for the remaining term of his predecessor’s directorship, until
the Shareholders’ Meeting to be held in 2013 to approve
the 2012 accounts.
The nomination of Mr. Gérard Lamarche is subject to the ratification
of the Shareholders’ general meeting on May 11, 2012.
Gérard Lamarche
Born July 15, 1961 (Belgian).
Independent director.
Mr. Lamarche graduated in economic science from Louvain-La-Neuve
university and the INSEAD business school (Advanced Management
Program for Suez Group Executives). He also followed the Global
Leadership Series course of training at the Wharton International
Forum in 1998-99. He started his career in 1983 with Deloitte
Haskins & Sells in Belgium, before becoming a consultant in mergers
and acquisitions in Holland in 1987. In 1988, Mr. Lamarche joined
Société Générale de Belgique as an investment manager
and management controller between 1989 and 1991, then as
a consultant in strategic operations from 1992 to 1995. He joined
Compagnie Financière de Suez as a project manager for the Chairman
and Secretary of the Executive Committee (1995-1997), before taking
part in the merger between Compagnie de Suez and Lyonnaise
des Eaux, which became Suez Lyonnaise des Eaux (1997), and
then being appointed as the acting Managing Director in charge
of Planning, Management Control and Accounts. In 2000, Mr. Lamarche
pursued his career in industry by joining NALCO (the American
subsidiary of the Suez group and the world leader in the treatment
of industrial water) as the Director and Chief Executive Officer.
In March 2004, he was appointed Chief Executive Officer in charge
of Finance of the Suez group, before being appointed Senior
Executive and Vice President in charge of Finance and member
of the Management Committee and the Executive Committee
of the GDF Suez group in July 2008. On April 12, 2011, Mr. Lamarche
became a Director on the Board of Directors of Groupe Bruxelles
Lambert (GBL). He has been the acting Managing Director since
January 2012. Mr. Lamarche is also a Director of Legrand.
Director of TOTAL S.A. since 2012 – Nomination by cooptation:
January 12, 2012 until 2013.
Member of the Audit Committee and the Strategic Committee.
Holds 1,575 shares.
Current directorships
– Acting Managing Director and Director of Groupe Bruxelles Lambert*
– Director of TOTAL S.A.*
– Director and member of the Audit Committee of Legrand*
Directorships that expired in the previous five years
– Director of Electrabel until 2011
– Director of Suez Environnement Company until 2011
– Director of International Power PLC until 2011
* Company names marked with an asterisk are publicly-listed companies.
Underlined companies are companies that do not belong to the group in which the director has his or her main duties.
96
TOTAL. Registration Document 2011
Report of the Chairman of the Board of Directors
Corporate governance 5
– Director of Europalia International until 2011
– Director of GDF Suez Belgium until 2011
– Director of Agua de Barcelona until 2011
– Director of GDF Suez E.S. until 2011
– Director of Suez Tractebel until 2011
– Director of Fortis Banque until 2010
– Director of Leo Holding Company until 2009
– Director of Suez Environnement North America until 2009
– Chairman and Director of Genfina until 2008
– Director of Distrigaz until 2008
– Director and Chairman of GDF Suez CC until 2008
– Director of Suez Environnement* until 2008
1.1.4. Composition of the Board of Directors as of February 9, 2012
As of February 9, 2012, the Board of Directors has fifteen members, including one director appointed by the shareholders to represent
employee shareholders. Twelve of the members of the Board are independent (see paragraph 1.8 – Director independence – in this Chapter 5).
The detailed biographies of the Directors appear in paragraphs 1.1.1 to 1.1.3 above.
Directors
Independence
Participation in Board Committees (a)
Christophe de Margerie
Chairman and Chief Executive Officer
Thierry Desmarest
Honorary Chairman
Patrick Artus
Patricia Barbizet
Daniel Bouton
Gunnar Brock
Claude Clément
Director representing employee shareholders
Marie-Christine Coisne-Roquette
Bertrand Collomb
Paul Desmarais Jr
Barbara Kux
Gérard Lamarche
Anne Lauvergeon
Claude Mandil
Independent director
Independent director
Independent director
Independent director
Independent director
Independent director
Independent director
Independent director
Independent director
Independent director
Independent director
Michel Pébereau
Independent director
(a) For more details on the composition of the Board Committees, refer to paragraph 1.5 in Chapter 5.
(b) Since February 9, 2012.
(c) Since May 13, 2011.
(d) Since January 12, 2012.
Chairman of the Strategic Committee
Chairman of the Nominating & Governance Committee
Member of the Compensation Committee
Member of the Strategic Committee
Member of the Nominating & Governance Committee(b)
Member of the Compensation Committee
Chairperson of the Audit Committee
Member of the Strategic Committee
Member of the Nominating & Governance Committee(b)
Member of the Compensation Committee(b)
Member of the Strategic Committee
Member of the Audit Committee(c)
Member of the Nominating & Governance Committee
Member of the Strategic Committee
Member of the Audit Committee(d)
Member of the Strategic Committee(d)
Member of the Strategic Committee
Member of the Nominating & Governance Committee(b)
Member of the Compensation Committee(b)
Member of the Strategic Committee
Chairman of the Compensation Committee
At its meeting held on February 9, 2012, the Board of Directors decided to propose the renewal of the directorships of Ms. Lauvergeon
and Messrs. de Margerie, Artus, Collomb, and Pébereau, which are due to expire. At the general Shareholders’ meeting on May 11, 2012,
the Board will also propose the nomination of a new independent Director, Ms. Anne-Marie Idrac, who will place her expertise of the world
of industry at the Board’s disposal and will broaden the representativeness and the diversity of the Board. If the resolution is approved
by the Shareholders’ Meeting, the proportion of women sitting on the Board will be one-third.
1.2. Other information
At its meeting on September 15, 2009, the Board of Directors
appointed Mr. Charles Paris de Bollardière Secretary of the Board.
Representative of the Worker’s Council: pursuant to Article
L. 2323- 62 of the French Labor Code, members of the Worker’s
Council attend, with consultative rights, all meetings
of the Board. In compliance with the second paragraph of such
article, since July 7, 2010, four members of the Worker’s Council
attend Board meetings.
* Company names marked with an asterisk are publicly-listed companies.
Registration Document 2011. TOTAL
97
5 Corporate governance
Report of the Chairman of the Board of Directors
1.3. Corporate Governance Code
For several years, TOTAL has been actively examining corporate
governance matters. At its meeting on November 4, 2008, the Board
of Directors confirmed its decision to refer to the Corporate Governance
Code for Listed Companies published by the principal French business
confederations, the Association Française des Entreprises Privées
(AFEP) and the Mouvement des Entreprises de France (MEDEF)
(“AFEP-MEDEF Code”) for corporate governance matters.
The AFEP-MEDEF Code is available on the MEDEF website
(www.medef.fr, Publication/Economie).
The AFEP-MEDEF Code was amended in April 2010 to make
recommendations related to the balanced number of men and
women sitting in Board and Committees’ meetings. The code
recommends that a target of at least 20% of women be reached
before April 2013 and at least 40% before April 2016.
These requirements were also stipulated in the French law
of January 27, 2011 regarding balanced representation of men
and women on Boards of Directors and Supervisory Boards and
equal opportunity. The law states that the 20% threshold must
be attained at the end of the 2014 Shareholders’ Meeting
and that the 40% threshold must be attained at the end of the
2017 Shareholder’s Meeting.
As of December 31, 2011, the Company’s Board of Directors was
comprised of four women out of a total of fifteen members (i.e., 26%).
At the Shareholders’ Meeting in May 2012, it will be proposed
to appoint one additional woman to replace one director whose term
is coming to an end. If the resolution is approved by the Shareholders’
Meeting, the proportion of women sitting in the Board will
be one-third. The Board of Directors will keep examining corporate
governance issues to keep diversifying in the years to come.
At its meeting on February 8, 2012, the Nominating & Governance
Committee examined current practices in the Company in view
of the AFEP-MEDEF code and concluded that the Company
complied with almost all the recommendations.
Mr. Thierry Desmarest, Honorary Chairman of the Company
and director, can still be entrusted with representative missions for
the Group, by decision of the Board of Directors on May 21, 2010.
Since 2004, the Board of Directors has had a Financial Code of Ethics
that, in the overall context of the Group’s Code of Conduct,
sets forth specific rules for its Chairman, Chief Executive Officer,
Chief Financial Officer, Chief Accounting Officer and the financial
and accounting officers for its principal activities. The Board
has made the Audit Committee responsible for implementing
and ensuring compliance with this code.
In 2005, the Board approved the procedure for alerting the Audit
Committee of complaints or concerns regarding accounting,
internal accounting controls or auditing matters.
1.4. Rules of procedure of the Board of Directors
At its meeting on February 13, 2007, the Board of Directors
adopted rules of procedure to replace the Directors’ Charter.
It is reviewed on a regular basis to match the changes in rules
and practices related to governance.
The Board’s rules of procedure specify the obligations of each
director and set forth the mission and working procedures of the
Board of Directors. They also define the respective responsibilities
and authority of the Chairman and of the Chief Executive Officer.
An unabridged version of these rules of procedure is available
herein. They are also available on the Company’s website.
The Board of Directors of TOTAL S.A.(1) approved these rules
of procedure.
1. MISSION OF THE BOARD OF DIRECTORS
The mission of the Board of Directors is to determine the strategic direction of the Group and supervise the implementation of this vision.
With the exception of the powers and authority expressly reserved for shareholders and within the limits of the Company’s legal purpose,
the Board may address any issue related to the operation of the Company and take any decision concerning the matters falling within its
purview. Within this framework, the Board’s duties and responsibilities include, but are not limited to, the following:
– appointing the Chairman and the Chief Executive Officer(2) and supervising the handling of their responsibilities;
– defining the Company’s strategic orientation and, more generally, that of the Group;
– approving investments or divestments under study by the Group that concern amounts greater than 3% of shareholders’ equity;
– reviewing information on significant events related to the Company’s affairs, in particular for investments or divestments that are greater
than 1% of shareholders’ equity;
– conducting audits and investigations as it may deem appropriate. The Board, with the assistance of the Audit Committee where
appropriate, ensures that:
- the proper definition of authority within the Company and the proper exercise of duties and responsibilities by the bodies of the
Company are in place;
- no individual is authorized to contract on behalf of the Company or to commit to pay, or to make payments, on behalf of the Company,
without proper supervision and control;
- the internal control function operates properly and that the statutory auditors are able to conduct their audits under appropriate circumstances;
- the committees it has created duly perform their responsibilities;
(1) In these rules of procedure, TOTAL S.A. is referred to as the “Company” and, collectively with all of its direct and indirect subsidiaries, as the “Group”.
(2) The Chairman and Chief Executive Officer, if the Chairman of the Board of Directors is also responsible for the general management of the Company, the Chairman of the Board of Directors
and the Chief Executive Officer, if this is not the case, and, where appropriate, any acting Managing Directors, in accordance with the organization adopted by the Board of Directors.
98
TOTAL. Registration Document 2011
Report of the Chairman of the Board of Directors
Corporate governance 5
– monitoring the quality of the information provided to the shareholders and the financial markets through the financial statements that
it approves and the annual reports, or when major transactions are conducted;
– convening and setting the agenda for Shareholders’ Meetings or meetings of bond holders;
– preparing, for each year, a list of the directors it deems to be independent under generally recognized corporate governance criteria.
2. DIRECTORS’ OBLIGATIONS
Before accepting a directorship, every candidate receives a copy of TOTAL S.A.’s by-laws and rules of procedure. He ensures that he has
broad knowledge of the general and particular commitments related to his duty, especially the laws and regulations governing directorships
in French limited liability companies (société anonyme) whose shares are listed in one or several regulated markets.
Accepting a directorship involves upholding the Directors’ ethical rules as described in the Code of Corporate Governance to which
the Company refers. It also involves upholding the rules of procedure and the Group’s values as described in its Code of Conduct.
When directors participate in and vote at Board meetings, they are required to represent the interest of the shareholders and the Company as a whole.
2.1. INDEPENDENCE OF JUDGMENT
Directors undertake, under any circumstance, to maintain the independence of their analysis, judgment, decision making and actions as well
as not to be unduly influenced, directly or indirectly, by other directors, particular groups of shareholders, creditors, suppliers and, more generally,
any third party.
2.2. PREPARATION OF EACH BOARD MEETING
Directors undertake to devote the amount of time required to consider the information they are given and otherwise prepare for meetings
of the Board and of the committees on which they sit. Directors may request any additional information that they feel is necessary or useful
from the Chairman and Chief Executive Officer. Directors, if they consider it necessary, may request training on the Company’s specificities,
businesses and activities, and any other training that is of use in the exercise of their duties as Directors.
Directors attend all Board meetings and all committees or Shareholders’ Meetings, unless they have previously contacted the Chairman
to inform him of scheduling conflicts.
Files reviewed at each meeting of the Board as well as the information collected before or during the meetings are confidential. Directors
cannot use them for or share them with a third party whatever the reason. Directors take any necessary measures to keep them confidential.
Confidentiality and privacy are lifted when such information is made publicly available by the Company.
The Chairman of the Board makes sure that the Company provides the directors with the relevant information, including criticisms,
in particular financial statement reports and press releases, and the main press articles about the Company.
2.3. DUTY OF LOYALTY
Directors cannot take advantage of their office or duties to ensure, for themselves or a third party, any monetary or non-monetary benefit.
They notify the Board of Directors of any potential conflicts of interest with the Company or any other company of the Group.
They refrain from participating in the vote relating to the corresponding resolution or even to the debate preceding the vote.
Directors must inform the Board of Directors of their entering into a transaction that involves directly the Company or any other company
of the Group before such transaction is closed.
Directors cannot take any responsibility in a personal capacity in companies or businesses that are competing with the Company or any
other company of the Group without previously informing the Board.
Directors are committed not to seek or accept directly or indirectly from the Company or any other company of the Group benefits
that may be considered as compromising their independence.
2.4. DUTY OF EXPRESSION
Directors are committed to clearly expressing their opposition if they deem that a decision made by the Board of Directors is contrary
to the Company’s corporate interest and should strive to convince the Board of the relevancy of their position.
2.5. COMPANY’S SECURITIES AND STOCK EXCHANGE RULES
While in office, directors are required to hold the minimum number of registered shares as set by the Company’s by-laws.
Directors refrain from trading any shares and ADRs of TOTAL S.A. and its publicly traded subsidiaries for which they hold non-public
information that could impact the securities’ market value. To this purpose, directors act in compliance with the following procedures:
1. Any shares and ADRs of TOTAL S.A. and its publicly traded subsidiaries are to be held in registered form, either with the Company
or its agent(1), or administered registered shares with a French broker (or U.S. broker for ADRs) whose contact details are communicated
to the Board’s Secretary by the director;
(1) currently, BNP-Paribas Securities Services for TOTAL shares and Bank of New York for TOTAL ADRs.
Registration Document 2011. TOTAL
99
5 Corporate governance
Report of the Chairman of the Board of Directors
2. Buying on margin or short selling (Paris option market (MONEP), warrants, exchangeable obligations, etc.) those same securities is also prohibited;
3. Any transaction on the TOTAL share (or ADR) is strictly prohibited, including hedging transactions, on the day when the Company
discloses its periodic earnings (quarterly, interim and annual) as well as the fifteen calendar days preceding such date; and
4. Directors make all necessary arrangements to declare to the French Financial Markets Authority (Autorité des marchés financiers) and
inform the Board’s secretary, under the form and timeframe provided for by applicable laws, of any transaction on the company’s securities
entered into by himself or any other individual with whom he is closely related.
3. WORKINGS OF THE BOARD OF DIRECTORS
The Board of Directors meets at least four times a year and as often as circumstances may require.
Before each meeting of the Board, the agenda is sent out to directors and, whenever possible, it is sent together with the documents
that are necessary to consider.
Directors can delegate their authority to another director at the meetings of the Board, within the limit of one delegation per director per meeting.
Whenever authorized by the law, those directors attending the meeting of the Board via video conference (in compliance with the technical
requirements set by applicable regulations) are considered present for the calculation of the quorum and majority.
The Board allocates directors’ fees to, and may allocate additional directors’ fees to, directors who participate on specialized committees
within the total amount established by the Shareholders’ Meeting. The Chairman and the Chief Executive Officer are not awarded directors’
fees for their work on the Board and Committees.
The Board of Directors, based on the recommendation of its Chairman, appoints a Secretary. Every member of the Board of Directors
can refer to the Secretary and benefit from his assistance. The Secretary is responsible for the working procedures of the Board of Directors.
The Board shall review such procedures periodically.
The Board conducts, at regular intervals not to exceed three years, an assessment of its practices. Such assessment is carried out possibly
under the supervision of an independent director or with the contribution of an outside counsel. In addition, the Board of Directors conducts
an annual discussion of its methods.
4. RESPONSIBILITY AND AUTHORITY OF THE CHAIRMAN
The Chairman represents the Board, and, except under exceptional circumstances, is the sole member authorized to act and speak
on behalf of the Board.
He is responsible for organizing and presiding over the Board’s activities and monitors corporate bodies to ensure that they are functioning
effectively and respecting corporate governance principles. He coordinates the activity of the Board and its committees. He sets the agenda
for the meeting by including the issues proposed by the Chief Executive Officer.
He ensures that directors have in due course clear and appropriate information that is necessary to carry out their duties.
He is responsible, with the Group’s general management, for maintaining relations between the Board and the Company’s shareholders.
He monitors the quality of the information disclosed by the Company.
In close cooperation with the Group’s general management, he may represent the Group in high-level discussions with government
authorities and the Group’s important partners, on both a national and international level.
He is regularly informed by the Chief Executive Officer of events and situations that are important for the Group relating to the strategy,
organization, monthly financial reporting, major investment and divestment projects and major financial operations. He may request that the
Chief Executive Officer or other Company directors, provided the Chief Executive Officer is informed, provide any useful information for the
Board or its committees to carry out their duties.
He may also work with the statutory auditors to prepare matters before the Board or the Audit Committee.
He presents every year in a report to the Shareholders’ Meeting, practices of the Board of Directors and potential limits set by the Board of Directors
concerning the powers of the Chief Executive Officer. For this purpose, he receives from the Chief Executive Officer the relevant information.
5. AUTHORITY OF THE CHIEF EXECUTIVE OFFICER
The Chief Executive Officer is responsible for the general management of the Company. He chairs the Group’s Executive Committee and
Management Committee. Subject to the Company’s corporate governance rules and in particular the rules of procedure of the Board of
Directors, he has the full extent of authority to act on behalf of the Company in all instances, with the exception of actions that are, by law,
reserved to the Board of Directors or to Shareholders’ meetings.
The Chief Executive Officer is responsible for periodic reporting of the Group’s results and outlook to shareholders and the financial community.
At each meeting of the Board, the Chief Executive Officer reports the highlights of the Group’s activity.
100
TOTAL. Registration Document 2011
Report of the Chairman of the Board of Directors
Corporate governance 5
6. COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors approved the creation of:
– an Audit Committee,
– a Nominating & Governance Committee,
– a Compensation Committee, and
– a Strategic Committee.
The missions and composition of these committees are defined in their relevant rules of procedure approved by the Board of Directors.
The Committees carry out their duty for and report to the Board of Directors.
Each committee reports on its activities to the Board of Directors.
1.5. Committees of the Board of Directors
On April 28, 2011, the Board agreed in principle on the creation
of a new Strategic Committee, the composition and rules of which
it approved at its meeting on July 28, 2011. This Committee
was set up and met for the first time on September 14, 2011.
1.5.1. Audit Committee
Rules of procedure (unabridged version)
The composition and an unabridged version of these rules of procedure
of the Committees of the Board of Directors is available herein.
The Board of Directors of TOTAL S.A. (hereafter referred to as the “Company” and, collectively with all its direct and indirect subsidiaries,
as the “Group”) has approved the following rules of procedure of the Company’s Audit Committee (hereafter, the “Committee”).
The members of the Committee are directors of the Company and therefore uphold the rules of procedure of the Board of Directors of
TOTAL S.A.
I. MISSION
To allow the Board of Directors of TOTAL S.A. to ensure that internal control is effective and that published information available to shareholders
and financial markets is reliable, the duties of the Committee include:
– recommending the appointment of statutory auditors and their compensation, ensuring their independence and monitoring their work;
– establishing the rules for the use of statutory auditors for non-audit services and verifying their implementation;
– supervising the audit by the statutory auditors of the Company’s statutory financial statements and consolidated financial statements;
– examining the accounting policies used to prepare the financial statements and examining the Company’s statutory financial statements
and consolidated annual, semi-annual, and quarterly financial statements prior to their examination by the Board of Directors, after
regularly monitoring the financial situation, cash position and obligations of the Company;
– supervising the implementation of internal control and risk management procedures and their effective application, with the assistance of
the internal audit department;
– supervising procedures for preparing financial information;
– monitoring the implementation and activities of the disclosure committee, including reviewing the conclusions of this committee;
– reviewing the annual work program of internal and external auditors;
– receiving information periodically on completed audits and examining annual internal audit reports and other reports (statutory auditors,
annual report, etc.);
– reviewing the choice of appropriate accounting principles and methods;
– reviewing the Group’s policy for the use of derivative instruments;
– reviewing, if requested by the Board of Directors, major transactions contemplated by the Group;
– reviewing significant litigation annually;
– implementing and monitoring compliance with the financial code of ethics;
– proposing to the Board of Directors, for implementation, a procedure for complaints or concerns of employees, shareholders and others,
related to accounting, internal accounting controls or auditing matters, and monitoring the implementation of this procedure; and
– reviewing the procedure for booking the Group’s proved reserves.
II. COMPOSITION
The Committee is made up of at least three directors designated by the Board of Directors. Members must be independent directors.
In selecting the members of the Committee, the Board of Directors pays particular attention to their independence and their financial and
accounting qualifications.
Registration Document 2011. TOTAL
101
5 Corporate governance
Report of the Chairman of the Board of Directors
The Board of Directors appoints one of the members of the Committee to serve as the financial expert on the Committee.
Members of the Committee may not be executive officers of the Company or one of its subsidiaries, nor own more than 10% of the
Company’s shares, whether directly or indirectly, individually or acting together with another party.
Members of the Committee may not receive from the Company and its subsidiaries, either directly or indirectly, any compensation other
than: (i) directors’ fees paid for their services as directors or as members of the committee, or, if applicable, as members of another
committee of the Company’s Board; and (ii) compensation and pension benefits related to prior employment by the Company, or another
Group company, which are not dependent upon future work or activities
The term of office of the members of the Committee coincides with the term of their appointment as director. The term of office as a member
of the Committee may be renewed at the same time as the appointment as director.
However, the Board of Directors can change the composition of the Committee at any time.
III. ORGANIZATION OF ACTIVITIES
The Committee appoints its own Chairman. The Chairman appoints the Committee secretary, who may be the Chief Financial Officer of the Company.
The Committee deliberates when at least one-half of its members are present. A member of the Committee cannot be represented.
The Committee meets at least four times a year to review the annual and quarterly consolidated financial statements, and at the request
of its Chairman, at least one-half of its members, the Chairman of the Board of Directors or the Chief Executive Officer of the Company.
The Committee Chairman prepares the schedule of its meetings.
The Audit Committee may meet with the Chairman of the Board, the Chief Executive Officer, and, if applicable, any acting Managing Director
of the Company and perform inspections and consult with managers of operating or non-operating departments, as may be useful in
performing its duties. The Chairman of the committee gives prior notice of such meeting to the Chairman of the Board or, if the latter is not
the Chief Executive Officer, to both the Chairman of the Board of Directors and the Chief Executive Officer. In particular, the Committee is
authorized to consult with those involved in preparing or auditing the financial statements (Chief Financial Officer and principal Finance Department
managers, Audit Department, Legal Department) by asking the Company’s Chief Financial Officer to call them to a meeting.
The Committee consults with the statutory auditors. It has the capacity of consulting them without Company representatives attending.
If it is informed of a substantial irregularity, it recommends that the Board of Directors take all appropriate action.
If it deems it necessary to accomplish its duties, the Committee may request from the Board of Directors the resources to engage external
consultants.
The proposals made by the Committee to the Board of Directors are adopted by a majority of the members present at the Committee
meeting. The Chairman of the Committee casts the deciding vote if an even number of members is present at the meeting.
The Committee can adopt proposals intended for the Board of Directors without meeting if all the members of the Committee so agree
and sign each proposal.
A written summary of Committee meetings is drawn up.
IV. REPORT
The Committee submits written reports to the Board of Directors regarding its work.
It periodically evaluates its performance based on these rules of procedure and, if applicable, offers suggestions for improving its performance.
Members of the Audit Committee in 2011
The Committee is chaired by Ms. Barbizet.
In 2011, the Committee’s members were Ms. Patricia Barbizet,
Mr. Thierry de Rudder and Mr. Bertrand Jacquillat, until his term
as director expired on May 13, 2011. At the Shareholders’ Meeting
on May 13, 2011, Ms. Marie-Christine Coisne-Roquette was
appointed a member of the Audit Committee to replace Mr. Jacquillat.
All of the members of the Committee are independent directors
and have recognized experience in the financial and accounting
fields, as illustrated in their summary biographies (see 1.1 and 1.3,
Composition of the Board of Directors in Chapter 5).
At its meeting on July 28, 2011, the Board of Directors decided
to appoint Ms. Barbizet to serve as the Audit Committee financial
expert based on a recommendation by the Audit Committee.
A summary of the Committee’s activities in 2011 is provided in
paragraph 1.6.1 below.
At its meeting on January 12, 2012, the Board of Directors decided
to co-opt Mr. Gérard Lamarche as a director and to nominate
him as a member of the Audit Committee in replacement of
Mr. de Rudder, who is resigning from his position as a Director.
102
TOTAL. Registration Document 2011
Report of the Chairman of the Board of Directors
Corporate governance 5
1.5.2. Compensation Committee
Rules of procedure (unabridged version)
The Board of Directors of TOTAL S.A. (hereafter referred to as the “Company” and, collectively with all its direct and indirect subsidiaries, as the
“Group”) has approved the following rules of procedure of the Company’s Compensation Committee (hereafter, the “Committee”).
The members of the Committee are directors of the Company and therefore uphold the rules of procedure of the Board of Directors of TOTAL S.A.
The Committee is focused on:
– examining the executive compensation policies implemented by the Group and the compensation of members of the Executive Committee;
– evaluating the performance and recommending the compensation of each corporate executive officer, and
– preparing reports which the Company must present in these areas.
I. DUTIES
The Committee’s duties include:
1. examining the main objectives proposed by the Company’s general management regarding compensation of the Group’s executive
officers, including stock option and restricted share grant plans and equity-based plans, and advising on this subject;
2. presenting recommendations and proposals to the Board of Directors concerning:
- compensation, pension and life insurance plans, in-kind benefits and other compensation (including severance benefits) for the corporate
executive officers of the Company; in particular, the Committee proposes compensation structures that take into account the Company’s
strategy, objectives and earnings and market practices,
- stock option and restricted share grants, particularly grants of registered shares to the corporate executive officers;
3. examining the compensation of the members of the Executive Committee, including stock option and restricted share grant plans and
equity-based plans, pension and insurance plans and in-kind benefits;
4. preparing and presenting reports in accordance with these rules of procedure;
5. examining, for the parts within its remit, reports to be sent by the Board of Directors or its Chairman to the shareholders;
6. preparing recommendations requested at any time by the Chairman of the Board of Directors or the general management of the Company
regarding compensation.
II. COMPOSITION
The Committee is made up of at least three directors designated by the Board of Directors. A majority of the members must be independent
directors.
Members of the Compensation Committee may not receive from the Company and its subsidiaries, either directly or indirectly, any
compensation other than: (i) directors’ fees paid for their services as directors or as members of the committee, or, if applicable, as members
of another committee of the Company’s Board; (ii) compensation and pension benefits related to prior employment by the Company, or
another Group company, which are not dependent upon future work or activities.
The term of office of the members of the Committee coincides with the term of their appointment as director. The term of office as a member
of the Committee may be renewed at the same time as the appointment as director.
However, the Board of Directors can change the composition of the Committee at any time.
III. ORGANIZATION OF ACTIVITIES
The Committee appoints its Chairman and its secretary. The secretary is a Company senior executive.
The Committee deliberates when at least one-half of its members are present. A member of the Committee cannot be represented.
The Committee meets at least twice a year. It meets on an as-needed basis through notice by its Chairman or by one-half of its members.
The Committee invites the Chairman of the Board or the Chief Executive Officer of the Company, as applicable, to present recommendations.
Neither the Chairman nor the Chief Executive Officer may be present during the Committee’s deliberations regarding his own situation.
If the Chairman of the Board is not the Chief Executive Officer of the Company, the Chief Executive Officer may not be present during the
Committee’s deliberations regarding the situation of the Chairman of the Board.
While maintaining the appropriate level of confidentiality for its discussions, the Committee may request from the Chief Executive Officer
to be assisted by any senior executive of the Company whose skills and qualifications could facilitate the handling of an agenda item.
If it deems it necessary to accomplish its duties, the Committee may request from the Board of Directors the resources to engage external
consultants.
The proposals made by the Committee to the Board of Directors are adopted by a majority of the members present at the Committee
meeting. The Chairman of the Committee casts the deciding vote if an even number of Committee members is present at the meeting.
The Committee can adopt proposals intended for the Board of Directors without meeting if all the members of the Committee so agree and
sign each proposal.
A written summary of Committee meetings is drawn up.
Registration Document 2011. TOTAL
103
5 Corporate governance
Report of the Chairman of the Board of Directors
IV. REPORT
The Committee reports on its activities to the Board of Directors.
At the request of the Chairman of the Board, the Committee examines all draft reports of the Company regarding compensation of the executive
officers or any other issues relevant to its area of expertise.
Members of the Compensation Committee
in 2011
In 2011, the Committee’s members were Messrs. Patrick Artus,
Bertrand Collomb, Thierry Desmarest and Michel Pébereau.
Messrs. Artus, Collomb and Pébereau are independent directors.
Mr. Michel Pébereau chairs the Committee. A summary of the
Committee’s activities in 2011 is provided in paragraph 1.6.2 below.
1.5.3. Nominating & Governance Committee
Rules of procedure (unabridged version)
At its meeting on February 9, 2012, the Board of Directors decided
to change the composition of the Compensation Committee.
As of this date, the Committee’s members are Messrs. Patrick
Artus, Gunnar Brock, Thierry Desmarest, Claude Mandil and
Michel Pébereau. Messrs. Artus, Brock, Mandil and Pébereau are
independent directors.
The Board of Directors of TOTAL S.A. (hereafter referred to as the “Company” and, collectively with all its direct and indirect subsidiaries, as the
“Group”) has approved the following rules of procedure of the Company’s Nominating & Governance Committee (hereafter, the “Committee”).
The members of the Committee are directors of the Company and therefore uphold the rules of procedure of the Board of Directors of TOTAL S.A.
The Committee is focused on:
– recommending to the Board of Directors the persons that are qualified to be appointed as directors, so as to guarantee the scope
of coverage of the Directors’ competencies and the diversity of their profiles;
– recommending to the Board of Directors the persons that are qualified to be appointed as corporate executive officers;
– preparing the Company’s corporate governance rules and supervising their implementation; and
– examining any questions referred to it by the Board or the Chairman of the Board, in particular questions related to ethics and situations
of conflicting interests.
I. DUTIES
The Committee’s duties include:
1. presenting recommendations to the Board for its membership and the membership of its committees, and the qualification in terms
of independence of each candidate for Directors’ positions on the Board of Directors;
2. proposing annually to the Board of Directors the list of directors who may be considered as “independent directors”;
3. examining, for the parts within its remit, reports to be sent by the Board of Directors or its Chairman to the shareholders;
4. assisting the Board of Directors in the selection and evaluation of the corporate executive officers and examining the preparation of their
possible successors, including cases of unforeseeable absence;
5. recommending to the Board of Directors the persons that are qualified to be appointed as directors;
6. recommending to the Board of Directors the persons that are qualified to be appointed as member of a Committee of the Board of Directors;
7. proposing methods for the Board of Directors to evaluate its performance, and in particular preparing means of regular self-assessment of
the workings of the Board of Directors, and the possible assessment thereof by an external consultant;
8. proposing to the Board of Directors the terms and conditions for allocating directors’ fees and the conditions under which expenses
incurred by the directors are reimbursed;
9. developing and recommending to the Board of Directors the corporate governance principles applicable to the Company;
10.examining any questions referred to it by the Board or the Chairman of the Board, in particular questions related to ethics and situations
of conflicting interests;
11.preparing recommendations requested at any time by the Board of Directors or the general management of the Company regarding
appointments or governance.
12.examining the conformity of the Company’s governance practices with the recommendations of the Code of Corporate Governance
adopted by the Company;
13.examining changes in the duties of the Board of Directors.
II. COMPOSITION
The Committee is made up of at least three directors designated by the Board of Directors. A majority of the members must be independent
directors.
Members of the Nominating & Governance Committee, other than the Company’s corporate executive officers may not receive from
the Company and its subsidiaries any compensation other than: (i) directors’ fees paid for their services as directors or as members
of the committee, or, if applicable, as members of another committee of the Company’s Board; (ii) compensation and pension benefits
related to prior employment by the Company, or another Group company, which are not dependent upon future work or activities.
104
TOTAL. Registration Document 2011
Report of the Chairman of the Board of Directors
Corporate governance 5
The term of office of the members of the Committee coincides with the term of their appointment as director. The term of office as a member
of the Committee may be renewed at the same time as the appointment as director.
However, the Board of Directors can change the composition of the Committee at any time.
III. ORGANIZATION OF ACTIVITIES
The Committee appoints its Chairman and its secretary. The secretary is a Company senior executive.
The Committee deliberates when at least one-half of its members are present. A member of the Committee cannot be represented.
The Committee meets at least twice a year. It meets on an as-needed basis through notice by its Chairman or by one-half of its members.
The Committee invites the Chairman of the Board or the Chief Executive Officer of the Company, as applicable, to present recommendations.
The corporate executive officers, whether they are members of the Committee or invited to its meetings, may not be present at deliberations
concerning their own situation.
While maintaining the appropriate level of confidentiality for its discussions, the Committee may request from the Chief Executive Officer
to be assisted by any senior executive of the Company whose skills and qualifications could facilitate the handling of an agenda item.
If it deems it necessary to accomplish its duties, the Committee may request from the Board of Directors the resources to engage external consultants.
The proposals made by the Committee to the Board of Directors are adopted by a majority of the members present at the Committee
meeting. The Chairman of the Committee casts the deciding vote if an even number of Committee members is present at the meeting.
The Committee can adopt proposals intended for the Board of Directors without meeting if all the members of the Committee so agree
and sign each proposal.
A written summary of Committee meetings is drawn up.
IV. REPORT
The Committee reports on its activities to the Board of Directors.
Members of the Nominating & Governance
Committee in 2011
In 2011, the Committee’s members were Messrs. Bertrand Collomb,
Thierry Desmarest and Michel Pébereau. Messrs. Collomb
and Pébereau are independent directors. The Committee is chaired
by Mr. Desmarest. A summary of the Committee’s activities in 2011
is provided in paragraph 1.6.3 below.
1.5.4. Strategic Committee
Rules of procedure (unabridged version)
At its meeting on February 9, 2012, the Board of Directors decided
to change the composition of the Nominating & Governance
Committee. As of this date, the Committee’s members are Messrs.
Patrick Artus, Gunnar Brock, Bertrand Collomb, Thierry Desmarest
and Claude Mandil. Messrs. Artus, Brock, Collomb and Mandil are
independent directors.
The members of the Committee are directors of the Company and therefore uphold the rules of procedure of the Board of Directors of TOTAL S.A.
I. DUTIES
To allow the Board of Directors of TOTAL S.A. to ensure the Group’s development, the Committee’s duties include:
– examining the overall strategy of the Group proposed by the Company’s general management;
– examining operations that are of particular strategic importance;
– reviewing competition and the resulting medium and long-term outlook for the Group.
II. COMPOSITION
The Committee is made up of at least five directors designated by the Board of Directors.
Members of the Committee may not receive from the Company and its subsidiaries, either directly or indirectly, any compensation other than:
– directors’ fees paid for their services as directors or as members of the Committee, or, if applicable, as members of another committee of
the Company’s Board; and
– compensation and pension benefits related to prior employment by the Company, or another Group company, which are not dependent
upon future work or activities.
The term of office of the members of the Committee coincides with the term of their appointment as director. The term of office as a member
of the Committee may be renewed at the same time as the appointment as director.
However, the Board of Directors can change the composition of the Committee at any time.
Registration Document 2011. TOTAL
105
5 Corporate governance
Report of the Chairman of the Board of Directors
III. ORGANIZATION OF ACTIVITIES
The Chairman of the Board of Directors of the Company chairs the Committee. The Chairman appoints the Committee secretary, who may
be the Secretary of the Board of Directors.
The Committee deliberates when at least one-half of its members are present. A member of the Committee cannot be represented.
The Committee meets at least once a year and at the request of its Chairman, at least one-half of its members, or the Chief Executive Officer
of the Company. The Committee Chairman prepares the schedule of its meetings.
Directors who are not members of the Committee are free to participate in the Committee’s meetings. This voluntary participation entitles
them to the same directors’ fees as those paid to the members of the Committee for attending meetings.
The Committee may meet with the Chief Executive Officer, and, if applicable, any acting Managing Director of the Company and consult with
managers of operating or non-operating departments, as may be useful in performing its duties. The Chairman of the Committee [if the latter
is not the Chief Executive Officer of the Company] gives prior notice of such meeting to the Chief Executive Officer. In particular, the
Committee is authorized to consult with the Vice President Strategy & Business Intelligence of the Company or the person delegated by the
latter, by asking the Company’s Chief Executive Officer to call them to a meeting.
If it deems it necessary to accomplish its duties, the Committee may request from the Board of Directors the resources to engage external consultants.
A written summary of Committee meetings is drawn up.
IV. REPORT
The Committee submits written reports to the Board of Directors regarding its work.
It periodically evaluates its performance based on these rules of procedure and, if applicable, offers suggestions for improving its performance.
Members of the Strategic Committee in 2011
In 2011, the Committee’s members were Mmes. Patricia Barbizet,
Barbara Kux and Anne Lauvergeon and Messrs. Christophe de
Margerie, Thierry Desmarest, Gunnar Brock, Claude Mandil
and Thierry de Rudder.
Mmes. Barbizet, Kux and Lauvergeon and Messrs. Brock, Mandil
and Lamarche are independent directors.
As a reminder, directors who are not members of the Committee
are free to participate in the Committee’s meetings.
At its meeting on January 12, 2012, the Board of Directors decided
to co-opt Mr. Gérard Lamarche as a director and to nominate
him as a member of the Strategic Committee in replacement
of Mr. de Rudder, who resigned from his position as a Director.
Mr. Christophe de Margerie chairs the Committee.
A summary of the Committee’s activities in 2011 is provided
in paragraph 1.6.4 below.
1.6. Activity of the Board of Directors and its Committees in 2011
Directors are generally given written notice during the week prior
to Board meetings. Whenever possible, documents to be considered
for decisions to be made at Board meetings are sent with the notice
of meetings. The minutes of the previous meeting are expressly
approved at each Board meeting.
January 12
– strategic outlook for the Chemicals division;
– 2011 Budget;
– Group insurance policy; and
– approval of the proposed acquisition of a stake in the
The Board held eight meetings in 2011, with 92% attendance.
Gladstone LNG (GLNG) project in Queensland, Australia;
The Audit Committee held six meetings, with 94% attendance.
The Compensation Committee held two meetings, with 100%
attendance.
The Nominating & Governance Committee held two meetings,
with 100% attendance.
The Strategic Committee held one meeting, with 87% attendance.
A table summarizing individual attendance at the Board of Directors
and Committee meetings is provided in paragraph 5.2 of Chapter 5.
Board of Directors’ meetings in 2011
The meetings included, but were not limited to, a review of the
following subjects:
– approval of the partnership with Suncor in oil sands in Canada;
– approval of the proposed development of the Eldfisk and Ekofisk
South fields in Norway.
February 10
– 2010 accounts (consolidated financial statements, parent
company accounts);
– principal financial communications;
– comparison of earnings with those of major oil companies;
– debate on the Board of Directors’ practices;
– assessment of the directors’ independence and report on the
absence of conflicts of interest;
– proposal to renew directorships and appoint new directors;
– proposal to renew and appoint Committees’ members;
– review of the amount of directors’ fees allocated to directors and
Committees’ members;
106
TOTAL. Registration Document 2011
Report of the Chairman of the Board of Directors
Corporate governance 5
– examination of ethical issues (compliance and risks of fraud,
1.6.1. Audit Committee activity
conflicts of interest, insider trading);
– compensation of the corporate executive officers;
– Shareholders’ Meeting notice and approval of the documents
In 2011, the members of the Audit Committee reviewed
the following matters:
related to this meeting; start of the period in which shareholders
may be notified of the meeting and vote online;
– authorization to proceed with the sale of the stake in CEPSA
in connection with the tender offer launched by IPIC.
March 1
– authorization to enter into a partnership with the Russian
company Novatek (equity interest in the company and partnership
in the Yamal LNG project).
March 25
– preparation of the Shareholders’ Meeting: review of the requests
made by the central works council and certain shareholders
to include draft resolutions on the Shareholders’ Meeting agenda;
– summary of the Ethics Committee activities;
– Group financial policy; and
– information regarding the acquisition of an interest in an oil field
in Uganda from a subsidiary of Tullow Oil PLC.
April 28
– earnings for the first quarter of 2011;
– payment of an interim dividend;
– comparison of earnings with those of major oil companies;
– strategic outlook for the Gas & Power division;
– agreement on the proposed launch of a friendly takeover bid
for 60% of the capital of SunPower Corporation;
– agreement in principle regarding the creation of a new Committee:
the Strategic Committee;
– information regarding the results of the capital increase reserved
for employees.
July 28
– strategic outlook for the Refining & Marketing division;
– earnings for the second quarter of 2011 and the first half
of 2011;
– payment of an interim dividend;
– agreement regarding the rules of operation of the
Strategic Committee and the list of its members.
September 14
– strategic outlook for the Exploration & Production division;
– financial communication at mid-2011; and
– award of share subscription options and performance shares.
October 27
– information regarding the Group’s new Downstream-Chemicals
organization;
– Group strategy and 5-year plan;
– earnings for the third quarter of 2011;
– payment of an interim dividend;
– presentation of the Company’s equal opportunity and salary
equality policy;
– determination of the amount of directors’ fees to be paid
to directors participating in the Strategic Committee.
– At its meeting on February 8, the Committee reviewed the accounts
for the fourth quarter of 2010, the annual consolidated statements
report for the Group and the statutory accounts of parent company
TOTAL S.A. for 2010. The Vice President of Corporate Audit
presented the conclusions of the audits conducted in 2010 and
the audit plan proposed for 2011. He commented on the results
of the assessment of internal control on financial reporting conducted
for fiscal year 2010 as part of the implementation of the Sarbanes-
Oxley Act. The Committee also reviewed the draft of the Chairman’s
report on internal control and risk management procedures.
– At the meeting held on April 13, the Committee reviewed the
internal control and risk management system and analyzed the risk
factors described in the Registration Document. It also examined
the hydrocarbon reserves evaluation process. It reviewed
the Group’s long-term plan development process. It was informed
of the processes related to the non-accounting performance
indicators concerning the inventory valuation effect in the
Downstream sector.
– The Committee met on April 26 to review the consolidated
financial statements for the first quarter of 2011.
– During the July 26 meeting, the Committee proposed
the appointment of a financial expert on the Committee to replace
Mr. Bertrand Jacquillat whose term had ended. It reviewed
the accounts for the second quarter and first half of 2011 and
was informed of the status of specific litigation.
– On October 11, the Committee reviewed the Group’s significant
litigation. It reviewed the updated mapping of the Refining &
Marketing risks which began in 2008. It was also informed
of the general architecture of the accounting information systems.
The statutory auditors presented to the Committee their analysis
of the specific important points noted during the audit of the 2011
financial statements. At this meeting, the Committee also reviewed
the budget allocated to the statutory auditors’ fees. The members
of the Committee then met with the statutory auditors without
management being present.
– The meeting held on October 25 concerned the review of
the accounts for the third quarter of 2011. The Committee was
informed that the relevant employees acted in compliance with
the provisions of the Financial Code of Ethics. The Committee
reviewed the mapping of the Treasury Department risks.
The Committee periodically monitored the financial situation,
cash flow, risks and significant off-balance sheet commitments
of the Company, as well as internal audit activity.
The Audit Committee reviewed the accounts within the time limits
required by the AFEP-MEDEF Code, namely two days prior
to the review by the Board of Directors.
The statutory auditors attended all the Audit Committee meetings
held in 2011. At each presentation of the quarterly consolidated
financial statements, they reported on their work and presented
their conclusions.
The Chief Financial Officer, the Vice President Accounting, the Vice
President Internal Control and Audit and the Treasurer attended all
the Audit Committee meetings.
The chairman of the Committee reported to the Board of Directors
on the Committee’s activities.
Registration Document 2011. TOTAL
107
5 Corporate governance
Report of the Chairman of the Board of Directors
1.6.2. Compensation Committee activity
At its meeting on February 2, 2011, the Committee reviewed
the 2011 compensation policy for the corporate executive officers
and proposed compensation for the Chairman, and the Chief
Executive Officer (variable portion for their duties in 2010) as well
as for the Chairman and Chief Executive Officer, after considering
the compensation paid to corporate executives of the main CAC 40
companies. It also decided on restrictions on share transfers
by the Chairman and Chief Executive Officer. The Committee also
reviewed the compensation of the members of the Executive
Committee as well as the proposed course of action regarding
the share subscription option and performance share grant policy.
It then reviewed the financial information relevant to its area of
expertise.
At its meeting on September 1, 2011, the Committee approved the
share subscription option and performance share grant plans.
1.6.3. Nominating & Governance
Committee activity
At its meeting on February 2, 2011, the Committee reviewed the results
of the annual evaluation of the Board’s activities and made several
suggestions for improvement, as described in paragraph 1.7.2.
below.
The Committee discussed the composition of the Board,
in particular in relation to various commonly used independence
criteria. The Committee proposed to the Board of Directors the list
1.7. Board of Directors practices
1.7.1. Management form
On May 21, 2010, the Board of Directors decided to reunify
the positions of Chairman and Chief Executive Officer and appoint
the Chief Executive Officer to the duties of Chairman of the Board.
This decision was made further to the work done by the Nominating
& Governance Committee and in the best interests of the Company,
taking into account the advantage of the unified management and
the majority of independent directors appointed at the Committees,
which ensures balanced authority.
The Board of Directors deemed that the unified management form
was the most appropriate to the Group’s organization, modus operandi
and business, and the specificities of the oil and gas sector. It respects
the respective prerogatives of the various Company instances
(Shareholders’ meeting, Board of Directors, general management).
Moreover, the Company by-laws and the respective rules of
procedure of the Board of Directors and the Committees provide
the guarantees required to implement best governance practices
within a unified management framework. In particular, the by-laws
allow the Board to nominate one or two Vice-Chairmen. They also
state that the Board of Directors can be summoned by any means,
even verbally, or at short notice in the event of an emergency,
by the Chairman, a Vice-Chairman, or one third of the members,
at any time and whenever the Company so requires. The rules
of procedure of the Board of Directors also state that each Director
is required to inform the Board of Directors of any conflicts of interest
with the Company or with any other company in the Group,
of directors to be recommended for appointment by the 2011
Shareholders’ Meeting, which included the recommendation
of two additional women. The list of Committee members was also
reviewed. The Committee reviewed the procedure for allocating
directors’ fees to the directors and committee members and
decided to not propose any changes. The Committee reviewed
ethical issues regarding compliance and the risk of fraud, conflicts
of interest and insider trading based on the recommendation
of the French Financial Markets Authority (Autorité des Marchés
Financiers) of November 3, 2010.
At its meeting on September 1, 2011, the Committee discussed
changes in the composition of the Board of Directors to be anticipated
in 2012 and director independence. It proposed continuing to increase
the proportion of women on the Board. The Committee was
informed of the activity of the Ethics Committee and of the upcoming
replacement of its chairman.
1.6.4. Strategic Committee activity
The Strategic Committee met for the first time on September 14, 2011.
It took note of the plan to develop the Group’s industrial and commercial
businesses in Downstream and Chemicals and the proposed
reorganization submitted to the employee representative bodies.
The Committee also reviewed an analysis regarding solar energy
costs and the status of the SunPower company, in which the
Group acquired a 60% interest in 2011. Finally, the Committee
reviewed the comparison between the Company and leading
national and international oil companies as well as the outlook
for the energy market by the year 2030.
and to abstain from voting on the resolution in question, and even
to refrain from taking part in the debate preceding the vote.
1.7.2. Performance and evaluation
At its meeting on February 10, 2011, the Board of Directors
discussed its practices and made suggestions for improvement with
respect to broadening criteria when benchmarking with other
companies, and for a thorough study of the Group's opportunities in
the energy sector. These proposals were implemented at the meeting
of the new Strategic Committee and when the report of the meeting
was presented to the Board of Directors.
At its meeting of February 9, 2012, the Board of Directors discussed
its practices on the basis of a formal evaluation carried out by means
of a detailed questionnaire completed by all of the directors.
The responses were then submitted for examination by the Nominating
& Governance Committee and summarized. It is this summary that
was discussed by the Board of Directors.
The formal evaluation showed a generally positive opinion
of the practices of the Board of Directors and the Committees,
which highlighted that the improvements requested by the directors
in 2011 had been made. The Board therefore stated that it was
globally satisfied with its practices and suggested improvements
mainly relating to more in-depth strategic reflection. This has already
been put in place with the Strategic Committee, and work in this area
will continue for the benefit of the Board of Directors and the Group.
108
TOTAL. Registration Document 2011
Report of the Chairman of the Board of Directors
Corporate governance 5
1.8. Director independence
At its meeting on February 9, 2012, the Board of Directors,
on the recommendation of the Nominating and Governance
Committee, reviewed the independence of the Company’s directors
as of December 31, 2011. At the Committee’s suggestion, the Board
considered that, pursuant to the AFEP-MEDEF Code, a director
is independent when “he or she has no relationship of any kind with
the Company, its Group or its Management, that may compromise
the exercise of his or her freedom of judgment”.
For each director, this assessment relies on the independence
criteria set forth in the AFEP-MEDEF Code as reminded hereafter:
– not to be an employee or a director of the Company, or a Group
company, and not having been in such a position for the previous
five years;
– not to be a director of a company in which the Company holds a
directorship or in which an employee appointed as such or an
executive director of the company is a director;
– not to be a material customer, supplier, investment banker or
commercial banker of the Company or Group, and for which the
Company or the Group is not a material part of their business;
– not to be related by close family ties to corporate executive officer;
– not to have been an auditor of the Company within the previous
five years;
– not to have been a director of the Company for more than twelve years
(upon expiry term of office during which the 12-year limit is reached).
The AFEP-MEDEF Code expressly stipulates that the Board can
decide that the implementation of certain defined criteria is not
relevant or induces an interpretation that is particular to the Company.
With regard to the criterion applying to twelve years of service,
the AFEP-MEDEF code states that “the status of independent
director due to the application of this criterion shall only be relinquished
at the end of the directorship during which the 12-year period
is exceeded”. Pursuant to the report of the Nominating &
Governance Committee, on February 9, 2012, the Board observed
that Mr. Bouton and Mr. de Rudder had exceeded twelve years of
service on December 31, 2011. Since the directorships of Messrs.
Bouton and de Rudder had been renewed before the twelve-year
period expired, the Board decided that they can still be considered
as independent directors, according to the AFEP-MEDEF code.
Concerning “material” relationships, as a client, supplier, investment
or finance banker, between a director and the Company, the Board
deemed that the level of activity between Group companies
and the bank at which one of its Directors is an officer, which is less
than 0.1% of its net banking income and less than 5% of the
Group’s overall assets, represents neither a material portion of the
overall activity of such bank nor a material portion of the Group’s
external financing. The Board concluded that Mr. Pébereau should
be considered as independent.
Similarly, the Board of Directors deemed that the level of activity
between Group companies and one of its suppliers, Stena AB, of
which Mr. Brock is a director, which is less than 2.68% of Stena
AB’s turnover, represents neither a material portion of the supplier’s
overall activity nor a material portion of the Group’s purchasing.
The Board concluded that Mr. Brock could be considered
as an independent director.
Mmes. Barbizet, Coisne-Roquette, Kux and Lauvergeon and
Messrs. Artus, Bouton, Brock, Collomb, Desmarais, Mandil,
Pébereau and de Rudder were deemed to be independent directors.
80% of the directors were independent on December 31, 2011.
Moreover, the Board noted that the directorships of Ms. Lauvergeon
and Messrs. Collomb and Pébereau will exceed twelve years
on March 22, 2012 for Messrs. Collomb and Pébereau, and on
May 25, 2012 for Ms. Lauvergeron, after the Shareholders’ meeting
that will be invited to renew her directorship on May 11, 2012.
The Board of directors deemed that, for a company with a long-term
activity and investment cycles of more than ten years, extended
directorships and the corresponding experience represent an asset
for the Group and a means of consolidating the independence of
judgment of its directors. The Board concluded that the proposal to
renew the directorships of Ms. Lauvergeon and Messrs. Collomb
and Pébereau at the Shareholders meeting in May 11, 2012,
does not call their independence into question, according to the
AFEP-MEDEF code, in view of their independence of judgment.
In addition, the Board of Directors has examined the situations
of the Directors whose nomination or ratification will be submitted
to the Shareholders’ meeting on May 11, 2012. Ms. Idrac and
Mr. Lamarche are deemed to be independent directors.
1.9. Additional information on the members of the Board of Directors
1.9.1. Absence of conflicts of interest
1.9.2. Absence de condamnation
The Board also noted the absence of potential conflicts between
the Directors’ duties in the best interests of the Company
and the private interests of its directors. To the Company’s knowledge,
the members of the Board of TOTAL S.A. are not related by close
family ties; there are no arrangements or agreements with clients or
suppliers that facilitated their appointment; there is no service agreement
binding a director of TOTAL S.A. to one of its subsidiary and
providing for special benefits upon termination of such agreement.
The current members of the Board of Directors of the Company
have informed the Company that they have not been convicted,
have not been associated with a bankruptcy, receivership or
liquidation, and have not been incriminated or publicly sanctioned
or disqualified, as stipulated in item 14.1 of Annex I of EC
Regulation 809/2004 of April 29, 2004.
Registration Document 2011. TOTAL
109
5 Corporate governance
Report of the Chairman of the Board of Directors
1.10. Internal control and risk management
General Management constantly strives to maintain an efficient
internal control system, based on clear organizational principles,
an effective system to identify and manage risks and suitable
governance instances and control activities. The internal control
framework adopted by the Group is that of the Committee of
Sponsoring Organizations of the Treadway Commission (COSO).
In this framework, internal control is a process intended to provide
reasonable assurance that the following will be achieved: effective
and efficient execution of operations, accurate reporting of financial
and accounting information, compliance with applicable laws
and regulations and the protection of assets. As for any system
for internal control, there can be no guarantee that all risks
are completely eliminated.
The Group’s internal control procedures are organized around
three operational levels: Group, Business Segments and entities.
Each level is directly involved in and responsible for designing and
implementing internal control, in line with the degree of centralization
targeted by senior management.
At each of the three levels, specific internal control procedures
cover organization, delegations of authority and employee education
and training that conform to the Group’s overall framework.
Under these internal control principles, which are part of the corporate
governance organization, the Audit Committee is responsible
for monitoring the efficiency of internal control and risk
management procedures, assisted by the Internal Audit
Department and the internal control teams from the business
segments. These rules are designed to allow the Board of Directors
to ensure internal control is effective and that published information
available to shareholders and financial markets is reliable.
The Group’s internal control and risk management system is based
on the five factors below, which are derived from the COSO.
1.10.1. Control environment
The control environment is based on the Group’s core values
that are deeply rooted in its culture, including the integrity, ethical
conduct and professional competence of its employees.
The Group’s values and business principles are set out in the Code of
Conduct and Ethics Charter, circulated to employees and available on
the Group’s internet site, and the Group’s Financial Code of Ethics is
distributed to financial managers at the corporate and business levels.
These principles and rules are also cascaded in codes, procedures
and guidelines governing certain significant processes in the business
segments or the Group. These codes explain the Group’s values
and describe its business and behavior principles with regard
to employees, shareholders, customers, suppliers and competitors.
They also set out the rules of individual behavior that is applicable
to all employees and expected in host countries.
More specifically, the Group has been deploying ethics and compliance
programs since 2009, as a priority defined by the General Management.
This is why, at the end of 2009, the Executive Committee formally
approved a conformity policy and program designed to prevent
corruption, which were embodied in an Anti-corruption directive
in 2011 providing clear guidelines for Group employees who are
faced with risks of corruption. This standard is to be completed
by specific procedures, the first of which, for “Representatives
dealing with the public sector”, was published at the end of 2011.
More than 35,000 employees followed an e-learning module
in 12 languages and received a certificate after passing the test.
An integrity policy and program were also adopted in 2011 in order
to consolidate the Group’s policies designed to prevent and respond
to instances of fraud of any type.
In addition to this system, a coordinated network of Conformity
Managers and Fraud Risk Coordinators has been set up in the
Group’s entities and subsidiaries to promote and apply, locally,
the anti-corruption and integrity conformity programs.
The Group’s senior management receives regular training on
the content and the importance of the rules of behavior set out
in the Code of Conduct. Each year, the general managers and
financial managers of profit centers or entities provide internal
written representations to the Chief Financial Officer that they have
complied with internal control procedures and that the financial
reporting under their responsibility is reliable.
The Group’s Ethical Committee implements a policy to prevent insider
trading on the financial markets that is based in particular on the
Group’s internal ethical code. These rules are updated on a regular
basis and are widely distributed to employees who are permanently
or occasionally in possession of insider knowledge about the Group.
1.10.2. Risk identification, assessment
and management
The Executive Committee is responsible for identifying and assessing
the internal and external risks that could impact TOTAL’s performance,
with the assistance of the Group Risk Committee, the internal control
department and the internal audit department.
Set up in April 2011, the Group Risk Committee organizes the global
risk management system and monitors the performance of the risk
management systems, by making sure that they are adapted
to the Group’s needs. The Group Risk Committee is made up
of managers from the central functional divisions and the general
secretaries or the chief financial officers of the business segments.
It reports to the Executive Committee.
The Group Risk Committee relies on the work done by the business
segments and the functional divisions, which draw up their risk
maps and regularly report to the Audit Committee on their state
of progress every three years.
The Risk Committee (CORISK) is tasked with analyzing the capital
outlay requests submitted to the Executive Committee for approval
and reports to the Group Risk Committee.
The principal risks monitored at Group level are: sensitivity
to the oil market environment (oil prices and refining, marketing
and petrochemical margins); exposure to oil and gas trading risks;
financial markets risks (foreign exchange risk, particularly related
to the dollar, and interest rate); political and legal risks related
to the operating and contractual environment of the Exploration &
Production activities; and industrial and environmental risks related
to the sectors in which the Group is active.
With regard to risks connected to the trading of oil and gas
and related financial instruments, the departments concerned,
whose activity is governed by limits set by the Executive Committee,
measure their positions and exposure daily and analyze their market
risk, in particular using value-at-risk assessment methods.
110
TOTAL. Registration Document 2011
Report of the Chairman of the Board of Directors
Corporate governance 5
With regard to counterparty risks, credit limits and risk analysis
processes are set and updated regularly, for each activity.
The broad range of activities and countries in which the Group
operate requires local analysis, by business segment, of the related
legal, contractual and political risks. Compliance programs
with regard to competition and bribery law matters are implemented
by the Group to ensure compliance with applicable legislation.
Business units are responsible for assessing their industrial and
environmental risks and for implementing the regulatory requirements
of the countries where they operate, as well as any relevant guidelines
and recommendations defined at the Group or business segment
level. They are also responsible for actively monitoring changes
in legislation, to comply with local and international standards
concerning industrial and environmental risk assessment
and management. Risk assessments lead to the establishment
of management measures to prevent and reduce environmental
impact, minimize the risks of accidents, and contain their consequences.
The “Risk Factors” section of this Registration Document
(Chapter 4) contains a formal and extensive description of the
principal risks faced by the Group and how the Group manages
these risks and secures appropriate insurance coverage.
1.10.3. Control activities
Control activities and financial reporting systems, are designed
to take into account the specific nature of these risks and the degree
to which operational control is delegated to the business segments
and entities.
The General Management exercises operational control over TOTAL’s
activities through the Executive Committee’s approval of
investments and commitments for projects, based on defined
thresholds. These projects are subject to prior vetting by the Risk
Committee (CORISK), whose assessments are transmitted to the
Executive Committee.
Control activities are primarily based on a strategic plan that is reviewed
annually, an annual budget, monthly management financial reports
with detailed analysis of differences between actual and budgeted
expenditures, and a reconciliation between quarterly published
consolidated financial statements and reporting.
These processes are supervised by the Budget/Financial Control
and Accounting Departments, which are part of the Finance
Department, and are performed in compliance with financial
reporting standards, consistent and compliant with the accounting
standards used for the published financial statements. Financial
indicators and the accounting methods used allow appropriate
assessment of risks and return on average capital employed (ROACE).
Moreover, the Group’s Accounting Department draws up a quarterly
report of consolidated off-balance sheet commitments as part
of the closure of the consolidated financial statements. The financial
reporting manual contains a procedure to identify and escalate
off-balance sheet commitments.
The Group’s Accounting Department centralizes the interpretation
of accounting standards applicable to the Group’s consolidated
financial statements and distributes these standards through formal
procedures and a financial reporting manual. It monitors the
effective implementation of standards across TOTAL through periodic,
formal communication with functional managers in the business
segments. The Department also periodically reports any exceptions
to the Chief Financial Officer.
The Treasury Department monitors and manages risks related to
cash management activities and interest rate-related and foreign
exchange-related financial instruments in accordance with strict
rules defined by the General Management. Cash and cash
equivalents, financial positions and financial instruments are
centralized by the Treasury Department.
Oil and gas reserves are reviewed by a committee of experts
(the Reserves Committee), approved by the Exploration &
Production’s senior management and then confirmed by the Group’s
General Management.
The Disclosure Committee, whose members are the managers
of the main corporate departments, establishes and maintains
procedures designed to ensure the quality and accuracy of external
communications intended for financial markets.
At the profit center and entity level, control activities are organized
around the principal operational processes: exploration and reserves,
purchasing, capital expenditures, production, sales, oil, gas and
petroleum product trading, inventories, human resources, financing
and cash management.
The Group has implemented a wide range of procedures
and programs that help to prevent, detect and limit different types
of fraud. This effort is supported by the business principles and
rules of individual behavior described in the Code of Conduct and
in procedures, charters and codes issued at the Group business
segment level. The Group has also implemented a whistleblowing
system that employees and third parties can use to report
circumstances that might amount to fraud or other violations
related to accounting and internal control.
The Information Technology Department has developed and
distributed governance and security rules that describe the
recommended infrastructure, organization and procedures to maintain
information systems that are appropriate to the organization’s
needs and to limit information security risks. These rules are
implemented across the Group under the responsibility of the
various business segments.
Control activities to prevent industrial and environmental risks
are implemented in the business units. External certification
or third-party audits are conducted for some of the management
systems related to this type of risk. More detailed information
on the Group’s safety and environmental initiatives is provided
in the Group’s Society and Environment report.
1.10.4. Information and communication
Internal control procedures are defined at each of the three
operational levels: general rules at the corporate level; sector-
specific procedures at the business line level; and others at the
profit center and entity level. These procedures are circulated
in memorandums and are also available on the Group’s intranet
sites and, whenever they are common, those of the business lines.
The principal procedures regarding financial controls established
at the corporate level cover acquisitions and disposals, capital
expenditure, financing and cash management, budget control
and financial reporting. Disclosure controls and procedures are
in place. At the operating levels, they mainly consist of procedures,
guidelines and recommendations covering safety and security
(both industrial and information technology), health, the environment
and sustainable development.
The procedures for the business sectors primarily concern financial
Registration Document 2011. TOTAL
111
5 Corporate governance
Report of the Chairman of the Board of Directors
control specific to each sector. At the profit center and entity level,
the principles of the Group’s overall framework are implemented through
specific procedures tailored to the size and environment of operations.
1.10.5. Monitoring
Together, the holding company, the business sectors and the profit
centers and entities are responsible for monitoring internal control
in their respective operations.
In July 2011, the Executive Committee set up a Group Internal
Control department that is tasked with managing the Group’s
internal controls, and in particular:
– organizing and maintaining the global internal control system,
ensuring that it is distributed and adopted throughout the Group,
and that it is continuously improved;
– making sure that the Group complies with regulations applying to
the internal control of financial information, and in particular the
Sarbanes-Oxley act and the law on Financial Security;
– coordinating the Group-wide risk management measures, in
particular with regard to combating fraud, and contributing to all
the integrity policy initiatives.
Internal Control and Group Audit are the two components of the new
Internal Control and Group Audit department (DCIAG), which reports
to the Executive Committee through the Chief Administrative Officer.
The central Group Audit function is mainly responsible for auditing
the internal control system. An audit work schedule is set annually.
The audit reports are periodically summarized and presented to the
Audit Committee and, thereby, to the Board of Directors.
In 2011, the Group Internal Control and Audit Department’s 70
auditors conducted more than 150 audits. The Vice President of Group
Internal Control and Audit attended all Audit Committee meetings
and reported quarterly on internal audit activity to the committee.
The Group’s Management is responsible for implementing and
assessing internal control over financial reporting. In this context,
TOTAL evaluated awareness and implementation of its internal
control system, based on the COSO framework, in its main entities.
With the assistance of its main entities and the Group Internal Control
and Audit Department, the Group also examined and assessed the
design and effectiveness of the key operational, information systems
and financial controls related to internal control over financial
reporting pursuant to section 404 of the Sarbanes-Oxley Act.
Based on these internal reviews, the Group’s Management
concluded that internal control over financial reporting was effective.
If points of progress are identified by these internal audits and
operational checks, then corrective action plans are drawn up and
closely monitored by the operatives and the Group Internal Control
and Audit department.
The statutory auditors perform those internal control audits that
they deem necessary as part of their mission to certify the financial
statements and present their observations to the Audit Committee.
For 2011, the statutory auditors reviewed the implementation of the
Group internal control framework and the design and effectiveness
in its main units of key internal controls concerning financial reporting.
Based on the work performed, the statutory auditors declared that
they had no comments on the information and conclusions related
to this subject presented in this report.
1.11. Particular conditions regarding participation in Shareholder’s Meeting
Shareholders’ Meetings are convened and deliberate under the
conditions provided for by law. However, pursuant to Article 18 of
the Company’s by-laws, double voting rights are granted to all
registered shares held continuously in the name of the same
shareholder for at least two years. Article 18 of the Company’s by-laws
also provides that at Shareholders’ Meetings, no shareholder may
cast, by himself or through his agent, on the basis of the single
voting rights attached to the shares he holds directly or indirectly
and the shares for which he holds powers, more than 10% of the
total number of voting rights attached to the Company’s shares.
However, in the case of double voting rights, this limit may be
extended to 20%.
For more detailed information on these conditions, see Chapter 8
(General Information - Shareholders’ Meetings) of this Registration
Document.
1.12. Information mentioned in Article L. 225-100-3 of the French Commercial Code
This information is provided in Chapter 8 (General information - Agreements mentioned in Article L. 225-100-3 of the French Commercial
Code) of this Registration Document.
1.13. Policy for determining the compensation
and other benefits of the corporate executive officers
Based on a proposal by the Compensation Committee, the Board
adopted the following policy for determining the compensation
and other benefits of the corporate executive officers (the Chairman
and the Chief Executive Officer):
– Compensation and benefits for the Chairman and the Chief Executive
Officer are set by the Board of Directors after considering proposals
from the Compensation Committee. Such compensation shall
be reasonable and fair, in a context that values both teamwork
and motivation within the Company.
Compensation for the Chairman and the Chief Executive Officer
is related to market practice, work performed, results obtained
and responsibilities held.
– Compensation for the Chairman and the Chief Executive Officer
includes both a fixed portion and a variable portion. The fixed
portion is reviewed at least every two years.
– The amount of variable compensation is reviewed each year
and may not exceed a stated percentage of fixed compensation.
112
TOTAL. Registration Document 2011
Report of the Chairman of the Board of Directors
Corporate governance 5
Variable compensation is determined based on pre-defined
quantitative and qualitative criteria that are periodically reviewed
by the Board of Directors. Quantitative criteria are limited in number,
objective, measurable and adapted to the Group’s strategy.
Variable compensation is designed to reward short-term
performance and progress towards medium-term objectives.
The compensation is determined in line with the annual assessment
of the performance of the Chairman and the Chief Executive
Officer and the company’s medium-term strategy.
The Board of Directors keeps track of the fixed and variable
portions of the compensation of the Chairman and the Chief
Executive Officer over several years and in light of the company’s
performance.
– The Group does not have a specific pension plan for the Chairman
and the Chief Executive Officer. They are eligible for retirement
benefits and pensions available to certain employee categories
in the Group under conditions determined by the Board.
– Stock options and performance shares are designed to align
the long-term interests of the Chairman and the Chief Executive
Officer with those of the shareholders.
The allocation of options and performance shares to the Chairman
and the Chief Executive Officer is examined in the light of all the
forms of compensation of each person.
The exercise price for stock options awarded is not discounted
compared to the market price, at the time of the grant, for the
underlying share.
Stock options and performance shares are awarded at regular
intervals to prevent any opportunistic behavior.
The exercise of options and the definitive allocation of performance
shares to which the Chairman and the Chief Executive Officer
are entitled are subjected to performance criteria that must be met
over several years.
The Board puts in place restrictions on the transfer of a portion
of shares held upon the exercise of options and the definitive
allocation of performance shares, applicable to the Chairman
and the Chief Executive Officer until the end of their term of office.
The Chairman and the Chief Executive Officer may be entitled
to stock options or performance shares when they leave office.
– After three years in office, the Chairman and Chief Executive
Officer are required to hold at least the number of Company
shares set by the Board.
– The components of the compensation of the Chairman
and the Chief Executive Officer are made public after the meeting
of the Board of Directors that approves them.
This report, which has been prepared with the assistance
of the relevant corporate departments of the Company, has been
approved by the Board of Directors at its meeting on 9 February 2012,
after the Board’s Committees reviewed the sections relevant
to their respective duties.
Christophe de Margerie
Chairman of the Board and Chief Executive Officer
Registration Document 2011. TOTAL
113
5 Corporate governance
Statutory auditor’s report
2. Statutory auditor’s report
(Article L. 225-235 of the French Commercial Code)
This is a free translation into English of a report issued in French and is provided solely for the convenience of English-speaking readers. This report
should be read in conjunction and construed in accordance with French law and the relevant professional auditing standards applicable in France.
Year ended December 31, 2011
Statutory Auditors' report, prepared in accordance with Article L.225-235 of the French Commercial
Law (Code de commerce), on the report prepared by the Chairman of the Board of Directors
of the company TOTAL S.A.
To the Shareholders,
In our capacity as Statutory Auditors of TOTAL S.A., and in accordance with Article L.225-235 of the French Commercial Law (Code de commerce),
we hereby report on the report prepared by the Chairman of your company in accordance with Article L.225-37 of the French Commercial Law
(Code de Commerce) for the year ended December 31, 2011.
It is the Chairman's responsibility to prepare, and submit to the Board of Directors for approval, a report on the internal control and risk
management procedures implemented by the company and containing the other disclosures required by Article L.225-37 of the French
commercial law (Code de Commerce) relating especially to corporate governance.
It is our responsibility to:
– report to you on the information contained in the Chairman's report in respect of the internal control and risk management procedures
relating to the preparation and processing of the accounting and financial information, and
– attest that this report contains the other disclosures required by Article L.225-37 of the French Commercial Law (Code de commerce),
being specified that we are not responsible for verifying the fairness of these other disclosures.
We conducted our work in accordance with professional standards applicable in France.
Information on the internal control and risk management procedures relating to the preparation and processing
of accounting and financial information
These standards require that we perform the necessary procedures to assess the fairness of the information provided in the Chairman's
report in respect of the internal control and risk management procedures relating to the preparation and processing of the accounting
and financial information. These procedures consisted mainly in:
– obtaining an understanding of the internal control and risk management procedures relating to the preparation and processing of the
accounting and financial information on which the information presented in the Chairman's report is based and of the existing documentation;
– obtaining an understanding of the work involved in the preparation of this information and of the existing documentation;
– obtaining an understanding of the evaluation process in place and assessing the quality and appropriateness of its documentation
with respect to the information on the evaluation of internal control and risk management procedures;
– determining if any significant weaknesses in the internal control procedures relating to the preparation and processing of the accounting
and financial information that we would have noted in the course of our engagement are properly disclosed in the Chairman's report.
On the basis of our work, we have nothing to report on the information in respect of the company's internal control and risk management
procedures relating to the preparation and processing of accounting and financial information contained in the report prepared by the Chairman
of the Board in accordance with Article L.225-37 of the French Commercial Law (Code de Commerce).
Other information
We hereby attest that the Chairman’s report includes the other disclosures required by Article L.225-37 of the French Commercial Law
(Code de commerce).
Paris-La Défense, March 23, 2012
French original signed by
KPMG Audit
A department of KPMG S.A.
Jay Nirsimloo
114
TOTAL. Registration Document 2011
The statutory auditors
ERNST & YOUNG Audit
Pascal Macioce
Laurent Vitse
Corporate governance 5
General Management
3. General Management
3.1. Management form
Based on the recommendation by the Nominating & Governance
Committee, the Board of Directors decided at its meeting on
May 21, 2010 to reunify the positions of Chairman of the Board and
Chief Executive Officer and appoint the Chief Executive Officer to the
position of Chairman of the Board until its term of office expires, that is
until the Shareholders’ Meeting called to approve the financial
statements for the fiscal year 2011.
As a result, Mr. de Margerie has been appointed Chairman and
Chief Executive Officer of TOTAL S.A. since May 21, 2010.
The Board of Directors deemed that the unified management form
was the most appropriate to the Group’s business and specificities
of the oil and gas sector. This decision was made taking into account
the advantage of the unified management and the composition of the
Committees of the Board that comprise a significant portion of
independent directors, which ensures balanced authority (for further
information regarding the reasons for selecting the unified
management form, see paragraph 1.7.1 of this Chapter 5).
The management form selected shall remain in effect until a
decision to the contrary is made by the Board of Directors.
3.2. The Executive Committee
The Executive Committee, under the responsibility of the Chairman
and Chief Executive Officer, is the decision-making body of the Group.
– Yves-Louis Darricarrère (President
of the Exploration & Production division);
It implements the strategy formulated by the Board of Directors and
authorizes related investments, subject to the approval by the Board
of Directors for investments exceeding 3% of the Group’s equity
or the notification of the Board for investments exceeding 1% of equity.
In 2011, the Executive Committee met at least twice a month,
except in August when it met only once.
As of December 31, 2011, the members of TOTAL’s Executive
Committee were as follows:
– Christophe de Margerie, Chairman of the Executive Committee
– Jean-Jacques Guilbaud (Chief Administrative Officer); and
– Patrick de La Chevardière (Chief Financial Officer).
In the context of the reorganization of its Downstream
and Chemicals sectors, TOTAL’s Executive Committee was
changed on January 1, 2012. As of that date, the members
of TOTAL’s Executive Committee are:
– Christophe de Margerie, Chairman of the Executive Committee
(Chairman and Chief Executive Officer);
– Philippe Boisseau (President of the Supply & Marketing segment);
– Yves-Louis Darricarrère (President of the Exploration & Production
(Chairman and Chief Executive Officer);
division and Gas & Power division);
– François Cornélis, Vice Chairman of the Executive Committee
(President of the Chemicals division);
– Michel Bénézit (President of the Refining & Marketing division);
– Jean-Jacques Guilbaud (Chief Administrative Officer); and
– Patrick de La Chevardière (Chief Financial Officer);
– Patrick Pouyanné (President of the Refining & Chemicals segment).
3.3. The Management Committee
The Management Committee facilitates coordination among the different
entities of the Group and monitors the operating results of the
operational divisions and the activity reports of the functional divisions.
In addition to the members of the Executive Committee, the following
twenty-two individuals from various operating divisions and non-operating
departments served as members of the Management Committee
as of December 31, 2011:
Corporate
René Chappaz, Peter Herbel, Jean-Marc Jaubert,
Manoelle Lepoutre, Jean-François Minster, Jean-Jacques Mosconi,
Jacques-Emmanuel Saulnier, François Viaud.
Upstream
Marc Blaizot, Philippe Boisseau, Arnaud Breuillac, Michel Hourcard,
Jacques Marraud des Grottes.
Downstream
Pierre Barbé, Alain Champeaux, Bertrand Deroubaix, Eric de Menten,
André Tricoire.
Chemicals
Françoise Leroy, Jacques Maigné, Bernard Pinatel, Patrick Pouyanné.
In addition to the members of the Executive Committee,
the following twenty-five individuals from various operating divisions
and non-operating departments served as members of the
Management Committee as of January 16, 2012:
Corporate
René Chappaz, Peter Herbel, Jean-Marc Jaubert, Helle Kristoffersen,
Manoelle Lepoutre, Françoise Leroy, Jean-François Minster,
Jacques-Emmanuel Saulnier, François Viaud.
Upstream
Marc Blaizot, Arnaud Breuillac, Olivier Cleret de Langavant, Isabelle
Gaildraud, Michel Hourcard, Jacques Marraud des Grottes.
Refining & Chemicals
Pierre Barbé, Bertrand Deroubaix, Jacques Maigné,
Jean-Jacques Mosconi, Bernard Pinatel, Bernadette Spinoy
Supply & Marketing
Benoît Luc, Momar Nguer, Jérôme Paré, Jérôme Schmitt.
Registration Document 2011. TOTAL
115
5 Corporate governance
Statutory auditors
4. Statutory auditors
4.1. Statutory auditors
Ernst & Young Audit
1/2, place des Saisons, 92400 Courbevoie-Paris-La Défense, Cedex 1
Appointed on May 14, 2004
Appointment renewed on May 21, 2010, for an additional 6-fiscal year term
P. Macioce, L. Vitse
KPMG Audit
A division of KPMG S.A.
1, cours Valmy, 92923 Paris-La Défense
Appointed on May 13, 1998
Appointment renewed on May 21, 2010, for an additional 6-fiscal year term
J. Nirsimloo
4.2. Alternate auditors
Cabinet Auditex
1/2, place des Saisons, 92400 Courbevoie-Paris-La Défense, Cedex 1
Appointed on May 21, 2010 for a 6-fiscal year term
KPMG Audit IS
3, cours du Triangle, Immeuble “Le Palatin”, Puteaux, 92939 Paris-La Défense, Cedex
Appointed on May 21, 2010 for a 6-fiscal year term
4.3. Auditor’s term of office
French law provides that the statutory and alternate auditors are appointed for renewable 6-fiscal year terms. The terms of office of the statutory
auditors and of the alternate auditors will expire at the end of the Shareholders’ Meeting called in 2016 to approve the financial statements for
fiscal year 2015.
116
TOTAL. Registration Document 2011
Compensation for the administration and management bodies
Corporate governance 5
4.4. Fees received by the statutory auditors (including members of their network)
Ernst & Young Audit KPMG Audit
Amount in millions % Amount in millions %
of euros (excluding VAT) of euros (excluding VAT)
2011 2010 2011 2010 2011 2010 2011 2010
Audit
Audit and certification
of the parent company
and consolidated accounts
TOTAL S.A. 3.0 3.0 15.7 16.9 3.0 3.2 15.2 16.0
Fully-consolidated subsidiaries 12.6 12.2 66.0 68.5 11.1 11.9 56.4 59.5
Other work and services directly
related to the responsibilities
of statutory auditors
TOTAL S.A. 0.1 0.2 0.5 1.1 1.0 0.8 5.1 4.0
Fully-consolidated subsidiaries 1.8 0.5 9.4 2.8 2.8 2.8 14.2 14.0
Subtotal 17.5 15.9 91.6 89.3 17.9 18.7 90.9 93.5
Other services provided
by the network to fully-
consolidated subsidiaries
Legal, tax, labor law 1.4 1.7 7.3 9.6 1.6 1.2 8.1 6.0
Other 0.2 0.2 1.1 1.1 0.2 0.1 1.0 0.5
Subtotal 1.6 1.9 8.4 10.7 1.8 1.3 9.1 6.5
Total 19.1 17.8 100 100 19.7 20.0 100 100
5. Compensation for the administration
and management bodies
5.1. Board Compensation
The overall amount of directors’ fees allocated to members
of the Board of Directors was set at €1.1 million for each fiscal year
by the Shareholders’ Meeting on May 11, 2007.
In 2011, the overall amount of directors’ fees allocated to the members
of the Board of Directors was €1.07 million, noting that there were
fifteen directors as of December 31, 2011, as at year-end 2010.
The allocation of the overall amount of fees for 2011 remains based
on an allocation scheme comprised of fixed compensation and variable
compensation based on fixed amounts per meeting, which made
it possible to take into account each director’s actual attendance
at the meetings of the Board of Directors and its Committees.
To take into account the creation of the Strategic Committee,
the Board of Directors decided at its meeting of October 27, 2011,
to set out the allocation of fees and the fixed and variable amounts
per meeting as follows:
– a fixed amount of €20,000 is to be paid to each director
(calculated prorata temporis in case of a change during the period),
apart from the Chairman of the Audit Committee, who is to be paid
€30,000 and the other Audit Committee members, who are
to be paid €25,000;
– an amount of €5,000 per director for each Board of Directors’
meeting actually attended;
– an amount of €3,500 per director for each Compensation
Committee, Nominating & Governance Committee or Strategic
Committee meeting actually attended;
– an amount of €7,000 per director for each Audit Committee
meeting actually attended;
– a premium of €2,000 for travel from a country outside of France
to attend a Board of Directors or Committee meeting;
– the Chairman and Chief Executive Officer does not receive
directors’ fees as director of TOTAL S.A. or any other company
of the Group.
A table summarizing the total compensation (including in-kind
benefits) paid to each director during the last two fiscal years
(Article L. 225-102-1 of the French Commercial Code, 1st and 2nd
paragraphs) is provided in paragraph 5.7.3 of this Chapter.
Registration Document 2011. TOTAL
117
5 Corporate governance
Compensation for the administration and management bodies
5.2. Directors’ attendance at Board and Committee meetings in 2011
Board of Audit Compensation Nominating & Strategic
Directors Committee Committee Governance Committee(a)
Committee
Number of meetings in 2011 8 6 2 2 1
Christophe de Margerie 8 - - - 1
Thierry Desmarest 8 - 2 2 1
Patrick Artus 7 - 2 - 1
Patricia Barbizet 8 6 - - 1
Daniel Bouton 8 - - - 1
Gunnar Brock 8 - - - 1
Claude Clément 7 - - - 1
Marie-Christine Coisne-Roquette(b) 3 2 - - 1
Bertrand Collomb 7 - 2 2 1
Paul Desmarais Jr 5 - - - -
Bertrand Jacquillat(c) 5 3 - - -
Barbara Kux(d) 2 - - - -
Anne Lauvergeon 8 - - - 1
Peter Levene of Portsoken(e) 2 - - - -
Claude Mandil 8 - - - 1
Michel Pébereau 8 - 2 2 1
Thierry de Rudder 8 6 - - 1
(a) Committee decided upon and created following approval by the Board of Directors on April 28, 2011. The committee met for the first time on September 14, 2011.
(b) Director and member of the Audit Committee from May 13, 2011.
(c) Director and member of the Audit Committee until May 13, 2011.
(d) Director from May 13, 2011.
(e) Director until May 13, 2011.
5.3. Compensation of the Chairman and Chief Executive Officer
(See also summary tables in paragraph 5.7 of this Chapter)
– return on equity for a maximum of 50% of the base salary;
The compensation paid to Mr. de Margerie for his duties as Chairman
and Chief Executive Officer was set by the Board of Directors
of TOTAL S.A., based on a recommendation by the Compensation
Committee in line with the guidance of the AFEP-MEDEF Corporate
Governance Code.
It includes an annual fixed base salary of €1,500,000, and a variable
portion not to exceed 165% of the fixed base salary. The fixed base
salary was set by comparison with the compensation paid to the
Chairman and Chief Executive Officer of other French companies
included in the CAC 40 index. The maximum percentage of the fixed
base salary represented by the variable portion is based on equivalent
practice at a reference sample of companies, including oil and
gas companies.
The variable portion is based on criteria determined by the Board
of Directors. The equivalent of up to 100% of the fixed base salary
is linked to economic criteria, which varies on a straight-line basis
to avoid threshold effects. The criteria based on the Chairman
and Chief Executive Officer’s personal contribution account for an
additional amount that cannot exceed 65% of the fixed base salary.
The economic criteria were selected so as to not only reward
short-term performance in terms of return on investment for
shareholders, but also the progress made by the Group toward
medium-term objectives by comparison with data for the oil
and gas industry as a whole. They include:
– the Company’s earnings performance compared with that
of the four other major international oil companies that are
its competitors(1), assessed by reference to the average growth
over three years of two indicators, earnings per share and
consolidated net income. Each indicator represents a maximum
of 25% of the base salary.
The Chairman and Chief Executive Officer’s personal contribution
is evaluated on the basis of objective, mainly operational criteria
related to the Group’s business segments and established in line
with its strategy, including health, safety and environment (HSE)
performance and oil and gas production and reserves growth.
With respect to the fiscal year 2011, the Board of Directors
at its meeting of February 9, 2012, after having found that the Chairman
and Chief Executive Officer’s objectives related to personal contribution
were deemed to be substantially fulfilled and assessed to what extent
financial performance criteria had been met, the Board set the variable
portion payable to Mr. de Margerie in 2012 at €1,530,000 for his
contribution in 2011, equivalent to 102% of his fixed base salary.
The total gross compensation paid to Mr. de Margerie in his role
as Chairman and Chief Executive Officer was made up of a fixed
base salary of €1,500,000 and a variable portion of €1,530,000
for the 2011 fiscal year, to be paid in 2012.
Mr. de Margerie’s total gross compensation as Chief Executive
Officer for the period between January 1, 2010 and May 21, 2010
was €1,030,359, composed of a fixed base salary of €507,097
and a variable portion of €523,262 paid in 2011. Mr. de Margerie’s
(1) ExxonMobil, BP, Shell and Chevron.
118
TOTAL. Registration Document 2011
Compensation for the administration and management bodies
Corporate governance 5
total gross compensation as Chairman and Chief Executive Officer
for the period between May 22, 2010 and December 31, 2010 was
€1,977,763, composed of a fixed base salary of €919,355 and
a variable portion of €1,058,408 paid in 2011.
As Chairman and Chief Executive Officer, Mr. de Margerie has
the use of a company car, receives the health coverage provided
for Group employees and is eligible for the life insurance plan open
to the Group’s executive officers (see paragraph 5.5 of this Chapter).
5.4. Executive officers’ compensation
In 2011, the aggregate amount paid directly or indirectly by the French
and foreign companies belonging to the Group of the Company
as compensation to the executive officers of TOTAL in office
at December 31, 2011 (members of the Management Committee
and the Treasurer) as a group was €20.4 million (twenty-nine
individuals), including €9 million paid to the six members of the
Executive Committee. Variable compensation accounted for 42.4%
of the aggregate amount of €20.4 million paid to executive officers.
The following individuals were executive officers of the Group at December 31, 2011 (twenty-nine individuals at year-end 2011, compared
with twenty-five at year-end 2010):
Treasurer
Jérôme Schmitt
Management Committee
Christophe de Margerie(1)
François Cornélis(2)
Michel Bénézit(2)
Yves-Louis Darricarrère(2)
Jean-Jacques Guilbaud(2)
Patrick de La Chevardière(2)
Pierre Barbé
Marc Blaizot
Philippe Boisseau
Arnaud Breuillac
Alain Champeaux
René Chappaz
Bertrand Deroubaix
Peter Herbel
Michel Hourcard
Jean-Marc Jaubert
Manoelle Lepoutre
Françoise Leroy
Jacques Maigné
Jacques Marraud des Grottes
Éric de Menten
Jean-François Minster
Jean-Jacques Mosconi
Bernard Pinatel
Patrick Pouyanné
Jacques-Emmanuel Saulnier
André Tricoire
François Viaud
5.5. Pensions and other commitments
(Article L. 225-102-1, paragraph 3, of the French Commercial Code)
1) Pursuant to applicable law, the Chairman and Chief Executive
Officer is eligible for the basic French social security pension
and for pension benefits under the ARRCO (Association pour
le Régime de Retraite Complémentaire des Salariés) and AGIRC
(Association Générale des Institutions de Retraite des Cadres)
government-sponsored supplementary pension schemes.
He also participates in the internal defined contribution pension
plan and the defined benefit supplementary pension plan, known
as RECOSUP, created by the Company. This supplementary
pension plan, which is not limited to the Chairman and Chief
Executive Officer, is described in point 2 below.
The sum of the supplementary pension plan benefits and external
pension plan benefits may not exceed 45% of the compensation
used as the calculation basis. In the event this percentage is
exceeded, the supplementary pension is reduced accordingly.
The compensation taken into account when calculating the
supplementary pension is the retiree’s final three-year average
gross compensation (fixed and variable portions).
As of December 31, 2011, Mr. de Margerie’s aggregate benefit
entitlement under all of the above pension plans would amount
to 22.31% of his gross annual compensation received in 2011
(2011 fixed base salary and variable portion for 2010, paid
in 2011).
2) The Chairman and Chief Executive Officer participates in a defined
benefit supplementary pension plan financed and managed
by TOTAL S.A. and open to all employees of the Group whose
annual compensation is greater than eight times the ceiling
for calculating French social security contributions (€36,372
in 2012). Compensation above this amount does not qualify as
pensionable compensation under either government-sponsored
or contractual pension schemes.
To be eligible for this supplementary pension plan, participants
must meet specific age and length of service criteria. They must
also still be employed by the Company upon retirement, unless
they retire due to disability or had taken early retirement at the
Group’s initiative after the age of 55.
The plan provides participants with a pension equal to the sum
of 1.8% of the portion of the reference compensation between
eight and forty times the annual ceiling for calculating French social
security contributions, and 1% of the reference compensation
between forty and sixty times the annual ceiling for calculating
French social security contributions, which is multiplied by the
(1) Chairman and Chief Executive Officer and Chairman of the Executive Committee.
(2) Member of the Executive Committee.
Registration Document 2011. TOTAL
119
5 Corporate governance
Compensation for the administration and management bodies
number of years of service (up to twenty years). It is adjusted
in line with changes in the value of the ARRCO pension point
and strictly capped as described in point 1 above.
As of December 31, 2011, the Group’s pension obligations
to Mr. de Margerie under the defined benefit supplementary
pension plan represented the equivalent of 18.01% of his gross
annual compensation paid in 2011.
3) The Chairman and Chief Executive Officer is also entitled
to a lump-sum retirement benefit equal to that available to eligible
members of the Group under the French National Collective
Bargaining Agreement for the Petroleum Industry. This benefit
amounts to 25% of the gross annual compensation (fixed
and variable portions) received in the 12-month period preceding
retirement. Pursuant to the provisions of Article L. 225-42-1
of the French Commercial Code, such benefit is subject
to the performance conditions detailed in point 7 below.
This retirement benefit cannot be combined with the compensation
for loss of office described in point 5 below.
4) The Chairman and Chief Executive Officer also participates
in the same life insurance plan as the Group’s employees, covering
supplementary benefits or annuities in the event of temporary
incapacity for work and disability, together with a life insurance
plan funded by the Company and open to the executive officers
of the Group. Upon death, the plan guarantees a payment equal
to two years’ gross compensation (fixed and variable portions),
increased to three years upon accidental death, as well as, in the
event of disability, a payment proportional to the degree of disability.
5) If the Chairman and Chief Executive Officer is removed
from office or his term of office is not renewed by the Company,
he is entitled to compensation for loss of office equal to two
years’ gross annual compensation. The calculation will be based
on the gross compensation (including both fixed and variable
portions) paid in the 12-month period preceding the termination
or non-renewal of his term of office.
This compensation for loss of office to be paid in the event
of a change of control or a change of strategy of the Company
would not be due in cases of gross negligence or willful misconduct
or if the Chairman and Chief Executive Officer leaves the Company
of his own volition, accepts new responsibilities within the Group,
or may claim full retirement benefits within a short time period.
Pursuant to the provisions of Article L. 225-42-1 of the French
Commercial Code, this benefit is subject to the performance
conditions detailed in point 7 below.
6) Commitments with regard to the pension and life insurance plans
for the Chairman and Chief Executive Officer and the retirement
benefit and compensation for loss of office arrangements set
out in point 5 were approved on May 21, 2010, by the Board
of Directors and by the Shareholders’ Meeting.
7) In addition, in compliance with Article L. 225-42-1 of the French
Commercial Code, the commitments described in points 3
and 5 are subject to performance conditions that are deemed
to be met if at least two of the following three criteria are satisfied:
- the average ROE (return on equity) over the three years immediately
preceding the year in which the officer retires is at least 12%;
- the average ROACE (return on average capital employed) over
the three years immediately preceding the year in which the officer
retires is at least 10%;
- TOTAL’s oil and gas production growth over the three years
immediately preceding the year in which the officer retires
is greater than or equal to the average production growth rate
of the four other major international oil companies that are its
competitors: ExxonMobil, Shell, BP and Chevron.
In compliance with the AFEP-MEDEF Corporate Governance Code,
the Board of Directors decided that payment of the lump-sum
retirement benefit or compensation for loss of office shall be subject
to demanding performance conditions combining both internal and
external performance criteria.
The three criteria were selected to take into account the Company’s
general interest, shareholder interests and standard market
practices, especially in the oil and gas industry.
More specifically, ROE enables the payment of the retirement
benefit or compensation for loss of office to be tied to the Company’s
overall shareholder return. Shareholders can use ROE to gauge
the Company’s ability to generate profit from the capital they have
invested and from prior years’ earnings reinvested in the Company.
ROACE is used by most oil and gas companies to assess the operational
performance of average capital employed, regardless of whether
it is funded by equity or debt. ROACE is an indicator of the return on
capital employed by the Company for operational activities and, as a
result, makes it possible to tie the payment of the retirement benefit or
compensation for loss of office to the value created for the Company.
The third and last criterion used by the Board of Directors is the
Group’s oil and gas production growth compared with that of its
competitors. This indicator is widely used in the industry to
measure operational performance and the ability to ensure the
sustainable development of the Group, most of whose capital
expenditure is allocated to exploration and production activities.
8) In addition, regarding the implementation of the pension
commitments described in points 1 and 2 above made
by the Company for directors for fiscal year 2011, the annual
supplementary pension received by Mr. Desmarest in relation
to his previous employment by the Group was approximately
€562,354 (December 31, 2011 value), adjusted in line with
changes in the value of the ARRCO pension point.
9) As of December 31, 2011, the total amount of the Group’s
commitments under pension plans and similar for company
officers is equal to €31.2 million.
120
TOTAL. Registration Document 2011
Compensation for the administration and management bodies
Corporate governance 5
Chairman and Chief Executive Officer
Summary table at February 29, 2012
Employment
contract
Retirement benefit
and supplementary
pension plans
Benefits or advantages due
or likely to be due upon
termination or change of office
Benefits related
to a non-compete
agreement
NO
Christophe de Margerie
Chairman and Chief Executive Officer
Start of the office: February 2007(a)
Term of current office:
The Shareholders’ Meeting called
in 2012 to approve the financial
statements for the year ending
December 31, 2011
YES
(retirement benefit)(b)
(internal defined
supplementary pension
plan(c) and corporate
RECOSUP defined
contribution pension
plan(d) also applicable
to certain Group
employees)
YES
(compensation
for loss of office)(e)
NO
(a) Chief Executive Officer since February 13, 2007, and Chairman and Chief Executive Officer since May 21, 2010.
(b) Payment subject to performance conditions in accordance with the decision of the Board of Directors on February 11, 2009, and confirmed by the Board of Directors on May 15, 2009
and May 21, 2010. Details of these commitments are set out in points 3 and 7 above. This retirement benefit cannot be combined with the compensation for loss of office described below.
(c) Representing an annual pension that would be equivalent, as of December 31, 2011, to 18.01% of the annual compensation for 2011.
(d) Mr. de Margerie’s pension benefit represented a booked expense of €2,121 for fiscal year 2011.
(e) Payment subject to performance conditions in accordance with the decision of the Board of Directors on February 11, 2009, and confirmed by the Board of Directors on May 15, 2009
and May 21, 2010. Details of these commitments are set out in points 5 and 7 above.
5.6. Stock options and performance share grants policy
5.6.1. General policy
Stock options and performance share grants put in place by
TOTAL S.A. concern only TOTAL shares. No options for or grants
of performance shares of any of the Group’s listed subsidiaries
are awarded by TOTAL S.A.
All grants are approved by the Board of Directors, based on
recommendations by the Compensation Committee. For each plan,
the Compensation Committee recommends a list of beneficiaries,
the conditions and the number of options or performance shares
awarded to each beneficiary. The Board of Directors then gives final
approval for this list and the grant conditions.
Stock options have a term of eight years, with an exercise price set
at the average of the closing TOTAL share prices on Euronext Paris
during the twenty trading days prior to the grant date, without any
discount. The exercising of the options is subject to a presence
condition and performance conditions based on the return on equity
(ROE) of the Group, that vary depending on the plan and
beneficiary category. As of 2011, all options granted are subject to
performance conditions. Subject to the presence condition and
applicable performance conditions being met, options may only be
exercised after an initial two-year vesting period and the shares issued
upon exercise are subject to a two-year mandatory holding period.
However, for the 2007 to 2011 option plans, options awarded
to beneficiaries employed by non-French subsidiaries at the grant
date can be converted to bearer form or transferred after the 2-year
vesting period at the end of which the options may be exercised.
Performance shares awarded under selective plans become final
after a two-year vesting period, subject to a presence condition
and a performance condition based on the return on equity (ROE)
of the Group. At the end of this vesting period, and provided that
the conditions set are satisfied, the performance share grants are
finally awarded. However, these shares may not be transferred prior
to the end of an additional two-year mandatory holding period.
For beneficiaries employed by non-French subsidiaries on the grant
date, the vesting period for performance shares may be increased
to four years; in such cases, there would be no mandatory holding
period. As of 2011, all performance shares granted to executive
officers are subject to performance conditions.
The grant of these options or performance shares is used to
extend, based upon individual performance assessments at the
time of each plan, the Group-wide policy of developing employee
shareholding (for further information, see paragraph 6.2 of this Chapter).
Stock options and performance share grants to the Chairman
and Chief Executive Officer are subject to specific performance
conditions set out in paragraph 5.6.2 below.
5.6.2. Grants to the Chairman
and Chief Executive Officer
The Chairman and Chief Executive Officer has been awarded share
subscription options, the exercise of which has been subject,
since 2007, to a presence condition and performance conditions
based on the Group’s ROE and ROACE. The reasons for selecting
these criteria are detailed in point 7 of paragraph 5.5 above.
Pursuant to Article L. 225-185 of the French Commercial Code,
the Board of Directors decided that, for the 2007 to 2011 share
subscription option plans, the corporate officers (the Chairman of
the Board and the Chief Executive Officer, and as from May 21, 2010
the Chairman and Chief Executive Officer) are required to hold for
as long as they remain in office, a number of TOTAL shares representing
50% of the capital gains, net of tax and other deductions, resulting
from the exercise of stock options under these plans. Once the
Chairman and Chief Executive Officer holds a number of shares
(directly or through collective investment funds invested in Company
stock) corresponding to more than five times his current gross
annual fixed compensation, this holding requirement will be reduced
to 10%. If in the future this ratio is no longer met, the previous 50%
holding requirement will once again apply.
As of 2011, the Chairman and Chief Executive Officer receives
performance share grants, the final awarding of which is subject
to a presence condition and performance conditions.
On the September 14, 2011 grant of TOTAL performance shares,
the Board of Directors decided that the Chairman and Chief Executive
Officer will have to hold for as long as he remains in office, 50%
of the capital gains, net of tax and other deductions, from shares
granted under performance share grant plans. Once the Chairman
and Chief Executive Officer holds a number of shares (directly
Registration Document 2011. TOTAL
121
5 Corporate governance
Compensation for the administration and management bodies
or through collective investment funds invested in Company stock)
corresponding to more than five times his gross annual fixed
compensation at that time, this holding requirement will be reduced
to 10%. If in the future this ratio is no longer met, the previous 50%
holding requirement will once again apply.
In light of this holding requirement, this acquisition of the
performance shares is not subject to an additional purchase of the
company’s shares.
The Chairman and Chief Executive Officer has given a commitment
not to hedge the price risk on the TOTAL stock options and shares
he has been granted to date, and on the shares he holds.
2011 share subscription option plan: the Board of Directors
decided that, provided the presence condition within the Group is
satisfied, the number of options finally granted to the Chairman and
Chief Executive Officer will be subject to two performance conditions:
– For 50% of the share subscription options granted, the performance
condition states that the number of options finally granted is based
on the average ROE of the Group. The average ROE is calculated
by the Group from the consolidated balance sheet and statement
of income of the Group for fiscal years 2011 and 2012. The acquisition
rate is equal to zero if the average ROE is less than or equal
to 7%, varies on a straight-line basis between 0% and 100%
if the average ROE is more than 7% and less than 18%, and is
equal to 100% if the average ROE is more than or equal to 18%.
– For 50% of the share subscription options granted, the performance
condition states that the number of options finally granted is based
on the average ROACE of the Group. The average ROACE
is calculated by the Group from the consolidated balance sheet
and statement of income of the Group for fiscal years 2011
and 2012. The acquisition rate is equal to zero if the average
ROACE is less than or equal to 6%, varies on a straight-line basis
between 0% and 100% if the average ROACE is more than 6%
and less than 15%, and is equal to 100% if the average ROACE
is more than or equal to 15%.
2010 share subscription option plan: the Board of Directors
decided that, provided the presence condition within the Group is
satisfied, the number of options finally granted to the Chairman and
Chief Executive Officer will be subject to two performance conditions:
– For 50% of the share subscription options granted, the performance
condition states that the number of options finally granted is based
on the average ROE of the Group. The average ROE is calculated
by the Group based on TOTAL’s consolidated balance sheet and
statement of income for fiscal years 2010 and 2011. The acquisition
rate is equal to zero if the average ROE is less than or equal
to 7%, varies on a straight-line basis between 0% and 100%
if the average ROE is more than 7% and less than 18%, and is
equal to 100% if the average ROE is more than or equal to 18%.
– For 50% of the share subscription options granted, the performance
condition states that the number of options finally granted is based
on the average ROACE of the Group calculated based on TOTAL’s
consolidated balance sheet and statement of income for fiscal
years 2010 and 2011. The acquisition rate is equal to zero
if the average ROACE is less than or equal to 6%, varies on a
straight-line basis between 0% and 100% if the average ROACE
is more than 6% and less than 15%, and is equal to 100% if the
average ROACE is more than or equal to 15%.
2009 share subscription option plan: the Board of Directors
decided that, provided the presence condition within the Group
is satisfied, the number of options finally granted to the Chief
Executive Officer will be subject to two performance conditions:
– For 50% of the share subscription options granted, the performance
condition states that the number of options finally granted is based on
the average ROE of the Group as published by TOTAL. The average
ROE is calculated based on the Group’s consolidated balance sheet
and statement of income for fiscal years 2009 and 2010. The
acquisition rate is equal to zero if the average ROE is less than or
equal to 7%, varies on a straight-line basis between 0% and 100%
if the average ROE is more than 7% and less than 18%, and is
equal to 100% if the average ROE is more than or equal to 18%.
– For 50% of the share subscription options granted, the performance
condition states that the number of options granted is related
to the average ROACE of the Group as published by TOTAL.
The average ROACE is calculated based on the Group’s
consolidated balance sheet and statement of income for fiscal
years 2009 and 2010. The acquisition rate is equal to zero
if the average ROACE is less than or equal to 6%, varies on a
straight-line basis between 0% and 100% if the average ROACE
is more than 6% and less than 15%, and is equal to 100%
if the average ROACE is more than or equal to 15%.
The acquisition rate applicable to the subscription options that were
subject to the performance condition of the 2009 Plan was 100%.
2011 performance share plan: the Board of Directors decided
that, provided the presence condition within the Group is satisfied,
the number of shares finally granted to the Chairman and Chief
Executive Officer will be subject to two performance conditions:
– For 50% of the shares granted, the performance condition states
that the number of shares finally granted is based on the average
ROE of the Group. The average ROE is calculated by the Group
from the consolidated balance sheet and statement of income of
the Group for fiscal years 2011 and 2012. The acquisition rate
is equal to zero if the average ROE is less than or equal to 7%,
varies on a straight-line basis between 0% and 100% if the
average ROE is more than 7% and less than 18%, and is equal
to 100% if the average ROE is more than or equal to 18%.
– For 50% of the shares granted, the performance condition states
that the number of shares finally granted is based on the average
ROACE of the Group. The average ROACE is calculated by the
Group from the consolidated balance sheet and statement of
income of the Group for fiscal years 2011 and 2012. The acquisition
rate is equal to zero if the average ROACE is less than or equal
to 6%, varies on a straight-line basis between 0% and 100% if
the average ROACE is more than 6% and less than 15%, and is
equal to 100% if the average ROACE is more than or equal to 15%.
The Chairman and Chief Executive Officer was not awarded any
performance shares as part of the plans in the period 2006 to 2010.
5.6.3. Grants to employees
Share subscription option plan
2011 share subscription option plan: The Board of Directors
decided that, provided the presence condition within the Group is
satisfied, for each grantee other than the Chairman and Chief
Executive Officer, the options will be finally granted to the beneficiary
provided that the performance condition is fulfilled. The performance
condition states that the number of options finally granted is based
on the average of the ROE of the Group. The average ROE is
calculated by the Group from the consolidated balance sheet and
statement of income of the Group for fiscal years 2011 and 2012.
122
TOTAL. Registration Document 2011
Compensation for the administration and management bodies
Corporate governance 5
The acquisition rate:
Performance share plan
– is equal to zero if the average ROE is less than or equal to 7%;
– varies on a straight-line basis between 0% and 100%
– if the average ROE is more than 7% and less than 18%; and
– is equal to 100% if the average ROE is more than or equal to 18%.
2010 share subscription option plan: the Board of Directors
decided that, provided the presence condition within the Group
was satisfied:
2011 performance share plan: the Board of Directors decided
that, provided that the presence condition within the Group is satisfied,
for executives officers(1) other than the Chairman and Chief
Executive Officer, the number of shares finally granted will be
subject to the performance condition set out below. This condition
is based on the average ROE as published by the Group and
calculated based on the Group’s consolidated balance sheet and
statement of income for fiscal years 2011 and 2012.
– for each grantee of up to 3,000 options, other than the Chairman
and Chief Executive Officer, the options will be finally granted;
The acquisition rate:
– for each grantee of more than 3,000 options and less than or
equal to 50,000 options (other than the Chairman and Chief
Executive Officer):
- the first 3,000 options and two-thirds of the options in excess
of this number will be finally granted to their beneficiary;
- the outstanding options, that is one-third of the options in
excess of the first 3,000 options, will be granted provided that
the performance condition described below is fulfilled;
– For each grantee of more than 50,000 options, other than the
Chairman and Chief Executive Officer:
- the first 3,000 options, two-thirds of the options above the first
3,000 options and below the first 50,000 options, and one-third
of the options in excess of the first 50,000 options, will be finally
granted to their beneficiary;
- the remaining options, that is one-third of the options above the
first 3,000 options and below the first 50,000 options, and two-
thirds of the options in excess of the first 50,000 options, will be
finally granted provided that the performance condition is fulfilled.
This condition states that the number of options finally granted
is based on the average ROE of the Group. The average ROE is
calculated by the Group based on TOTAL’s consolidated balance
sheet and statement of income for fiscal years 2010 and 2011.
The acquisition rate:
– is equal to zero if the average ROE is less than or equal to 7%;
– varies on a straight-line basis between 0% and 100% if the
average ROE is more than 7% and less than 18%; and
– is equal to 100% if the average ROE is more than or equal to 18%.
2009 share subscription option plan: the Board of Directors
decided that, provided the presence condition within the Group
was met, for each beneficiary, other than the Chief Executive Officer,
of more than 25,000 options, one-third of the options granted in
excess of this number will be finally granted subject to a performance
condition. This condition is based on the average ROE of the Group
as published by TOTAL. The average ROE is calculated based on
the Group’s consolidated balance sheet and statement of income
for fiscal years 2009 and 2010.
– is equal to zero if the average ROE is less than or equal to 7%;
– varies on a straight-line basis between 0% and 100% if the
average ROE is more than 7% and less than 18%; and
– is equal to 100% if the average ROE is more than or equal to 18%.
Furthermore, the Board of Directors decided that, for each
beneficiary (other than the Chairman and Chief Executive Officer
and the executive officers) of more than 100 shares, the shares in
excess of this number will be finally granted subject to a performance
condition. This condition is based on the average ROE as published
by the Group and calculated based on the Group’s consolidated
balance sheet and statement of income for fiscal years 2011
and 2012.
The acquisition rate:
– is equal to zero if the average ROE is less than or equal to 7%;
– varies on a straight-line basis between 0% and 100% if the average
ROE is more than 7% and less than 18%; and
– is equal to 100% if the average ROE is more than or equal to 18%.
2010 performance share plan: the Board of Directors decided
that, provided that the presence condition within the Group is satisfied,
for each beneficiary of more than 100 shares, half of the shares in
excess of this number will be finally granted subject to a performance
condition. This condition is based on the average ROE calculated
by the Group based on TOTAL’s consolidated balance sheet
and statement of income for fiscal years 2010 and 2011.
The acquisition rate:
– is equal to zero if the average ROE is less than or equal to 7%;
– varies on a straight-line basis between 0% and 100% if the
average ROE is more than 7% and less than 18%; and
– is equal to 100% if the average ROE is more than or equal to 18%.
2009 performance share plan: the Board of Directors decided
that, provided that the presence condition within the Group is satisfied,
for each beneficiary of more than 100 shares, half of the shares in
excess of this number will be finally granted subject to a performance
condition. This condition is based on the average ROE of the Group
as published by TOTAL. The average ROE is calculated based on
the Group’s consolidated balance sheet and statement of income
for fiscal years 2009 and 2010.
The acquisition rate:
The acquisition rate:
– is equal to zero if the average ROE is less than or equal to 7%;
– varies on a straight-line basis between 0% and 100% if the average
ROE is more than 7% and less than 18%; and
– is equal to 100% if the average ROE is more than or equal to 18%.
The acquisition rate applicable to the subscription options that were
subject to the performance condition of the 2009 Plan was 100%.
– is equal to zero if the average ROE is less than or equal to 7%;
– varies on a straight-line basis between 0% and 100% if the
average ROE is more than 7% and less than 18%; and
– is equal to 100% if the average ROE is more than or equal to 18%.
Due to the application of the performance condition, the acquisition
rate was 100% for the 2009 Plan.
(1) Executive officers, excluding the Chairman and Chief Executive Officer, are employees other than directors.
Registration Document 2011. TOTAL
123
5 Corporate governance
Compensation for the administration and management bodies
In addition, the Board of Directors decided at its meeting
of May 21, 2010 to implement a global free share plan intended
for the Group’s employees, that is more than 100,000 employees.
On June 30, 2010, rights to twenty-five free shares were granted
to every employee. The shares are subject to a vesting period
of two to four years depending on the case. The shares granted
are not subject to any performance condition. They will be issued
at the end of the vesting period.
5.7. Summary table for the corporate executive officers
(AFEP-MEDEF Code for corporate governance of listed companies)
5.7.1. Summary of compensation, stock options and performance shares awarded
to the Chairman and Chief Executive Officer
For the year ended
(€) 2011 2010
Christophe de Margerie
Chairman and Chief Executive Officer (since May 21, 2010)
Compensation due for fiscal year as Chairman and Chief Executive Officer(a) 3,030,000 3,008,122
In-kind benefits(b) 6,991 6,908
Value of options awarded(c) 702,400 1,387,200
Value of performance shares awarded(d) 437,440 -
Total 4,176,831 4,402,230
(a) Compensation detailed in the following table. For the 2010 fiscal year, Mr. de Margerie received compensation of €1,030,359 as Chief Executive Officer for the period from January 1
to May 21, 2010, and compensation of €1,977,763 as Chairman and Chief Executive Officer for the period from May 22 to December 31, 2010.
(b) Mr. de Margerie has the use of a company car; he receives the health coverage provided for Group employees and is eligible for the life insurance plan open to the Group’s executive
officers (see paragraph 5.5 of this Chapter).
(c) Options awarded in 2011 are detailed in paragraph 5.7.4 of this Chapter. The value of options awarded was calculated on the day when they were awarded using the Black-Scholes
model based on the assumptions used for the consolidated accounts (see Note 25 to the Consolidated Financial Statements).
(d) The value of performance shares was calculated on the day when they were awarded.
5.7.2. Chairman and Chief Executive Officer’s compensation
(€)
For the year ended 2011
For the year ended 2010
Amount
due
Amount
paid(a)
Amount
due
Amount
paid(a)
Christophe de Margerie
Chairman and Chief Executive Officer (since May 21, 2010)
Fixed compensation 1,500,000 1,500,000 1,426,452(b) 1,426,452(b)
Variable compensation(c) 1,530,000 1,581 670 1,581,670(d) 1,356,991
-
Extraordinary compensation - - -
-
Directors’ fees - - -
6,908
In-kind benefits(e) 6,991 6,991 6,908
Total 3,036,991 3,088,661 3,015,030
2,790,351
(a) Variable portion paid for prior fiscal year. For more detailed information about these criteria, see paragraph 5.3 of this Chapter.
(b) Includes a fixed portion of €507,097 for the period between January 1 and May 21, 2010 and €919,355 for the period between May 22 and December 31, 2010.
(c) The variable portion for the Chairman and Chief Executive Officer is calculated by taking into account the Group’s return on equity during the relevant fiscal year, the Group’s earnings
compared to those of the other major international oil companies that are its competitors as well as the Chairman and Chief Executive Officer’s personal contribution based on operational
target criteria. The variable portion can reach a maximum amount of 165% of the fixed base salary. The objectives related to personal contribution were considered to have been
substantially fulfilled.
(d) Including a variable portion of €523,262 for the period between January 1 to May 21 2010, and €1,058,408 for the period between May 22 and December 31, 2010.
(e) Mr. de Margerie has the use of a company car, receives the health coverage provided for Group employees and is eligible for the life insurance plan open to the Group’s executive
officers (see paragraph 5.5 of this Chapter).
124
TOTAL. Registration Document 2011
Compensation for the administration and management bodies
Corporate governance 5
5.7.3. Directors’ fees and other compensation received by directors
Total compensation (including in-kind benefits) paid to each director in the year indicated (Article L. 225-102-1 of the French Commercial Code,
1st and 2nd paragraphs)
Gross amount (€) 2011 2010
Christophe de Margerie(a) (b) (b)
Thierry Desmarest(a)(b) 639,854(d)
1,604,039(d)
Patrick Artus(c) 65,500 55,000
Patricia Barbizet(a) 115,500 107,000
Daniel Bouton 63,500 55,000
Gunnar Brock(a)(e) 75,500 39,328
Claude Clément(e) 156,365 ( f )
Marie-Christine Coisne-Roquette(g) 48,460 -
Bertrand Collomb 72,500 71,000
Paul Desmarais Jr. 51,000 45,000
Bertrand Jacquillat(h) 55,040 95,000
Barbara Kux(a)(i) 26,770 -
Anne Lauvergeon(a) 63,500 45,000
Peter Levene of Portsoken(j) 19,230 79,000
Claude Mandil(a) 63,500 55,000
Michel Pébereau 77,500 71,000
Thierry de Rudder(a) 138,500 142,000
127,929 (f)
(a) Member of the Strategic Committee.
(b) For the Chairman and Chief Executive Officer, see the summary compensation tables given in paragraph 5.7.2 of this Chapter. The Chairman and Chief Executive Officer did not receive
any directors’ fees.
(c) Member of the Compensation Committee since May 21, 2010.
(d) Including for 2011, fees received (€77,500) and pension benefits received (€562,354), and including for 2010, fees received (€39,328), fixed and variable compensation for his role as
Chairman of the Board of Directors up to May 21, 2010 (€751,407), the retirement benefit (€492,963) and pension benefits received (€320,341).
(e) Director since May 21, 2010.
(f)
Including for 2011, the directors’ fees received, representing €58,500, as well as the compensation received from Total Raffinage Marketing (a subsidiary of TOTAL S.A.), representing
€97,865 and including for 2010, directors’ fees received, representing €32,328 as well as the compensation received from Total Raffinage Marketing, representing €95,601.
(g) Director and member of the Audit Committee from May 13, 2011.
(h) Director and member of the Audit Committee until May 13, 2011.
(i) Director since May 13, 2011.
(j) Director until May 13, 2011.
Over the past two years, the directors currently in office have not received any compensation or in-kind benefits from companies controlled
by TOTAL S.A., except for Mr. Clément, who is an employee of Total Raffinage Marketing, and Mr. Desmarest, Chairman of the Board
of Directors until May 21, 2010. The compensation indicated in the table above (except for that of the Chairman and Chief Executive Officer
and Messrs. Desmarest and Clément) consists solely of directors’ fees (gross amount) paid during the relevant period. None of the directors
have service contracts linking them to TOTAL S.A. or any of its subsidiaries that provide for benefits upon termination of employment.
5.7.4. Stock options awarded in 2011 to the Chairman and Chief Executive Officer
The stock options awarded to the Chairman and Chief Executive Officer are detailed in paragraph 5.9.3 of this Chapter.
Date
of Plan
Type of
options
Value of
options
(€)(a)
Number
of options
awarded during
fiscal year(b)
Exercise
price (€)
Exercise
period
Performance
condition
Christophe de Margerie
Chairman and Chief
Executive Officer
2011 Plan
09/14/2011
Subscription
options
702,400
160,000
33.00
09/15/2013
09/14/2019
For 50% of the options,
the condition is based
on the average ROE
for the Group’s 2011
and 2012 fiscal years.
For 50% of the options,
the condition is based
on the average ROACE
for the Group’s 2011
and 2012 fiscal years.
Total 702,400 160,000
(a) The value of options awarded was calculated on the day they were awarded using the Black-Scholes model based on the assumptions used for the consolidated accounts (see Note 25
to the Consolidated Financial Statements).
(b) As part of the share subscription option plan awarded on September 14, 2011, the Board of Directors decided that, for the Chairman and Chief Executive Officer, the number of share
subscription options that are likely to be exercised at the end of the two-year vesting period will be subject to performance conditions being met (see paragraph 5.6.2 of this Chapter).
Registration Document 2011. TOTAL
125
5 Corporate governance
Compensation for the administration and management bodies
5.7.5. Stock options exercised in 2011 by the Chairman and Chief Executive Officer
The stock options awarded to the Chairman and Chief Executive Officer are detailed in paragraph 5.9.3 of this Chapter.
Date Number Exercise
of Plan of options price
exercised (€)
during
fiscal year
Christophe de Margerie 2003 Plan 113,576 32.84
Chairman and Chief Executive Officer 07/16/2003
Total 113,576
5.7.6. Performance shares awarded in 2011
to the Chairman and Chief Executive Officer or any director
Date
of Plan
Number
of shares
awarded during
fiscal year
Value of
shares
(€)(a)
Acquisition
date
Availability
date
Performance
condition
Christophe de Margerie
Chairman and Chief Executive Officer
2011 Plan
09/14/2011
16,000
437,440
09/15/2013
09/15/2015
Claude Clément
Director representing
employee shareholders
2011 Plan
09/14/2011
240
6,562
09/15/2013
09/15/2015
For 50% of the shares,
the condition is based
on the average ROE
for the Group’s 2011
and 2012 fiscal years.
For 50% of the shares,
the condition is based
on the average ROACE
for the Group’s 2011
and 2012 fiscal year.
Shares in excess
of the first 100 shares
are subject to a condition
based on the average ROE
for the Group’s 2011
and 2012 fiscal years.
Total
16,240
(a) The value of performance shares was calculated on the day when they were awarded.
5.7.7. Performance shares finally awarded in 2011 for the Chairman
and Chief Executive Officer or any director
Date of Plan
Number of shares finally
awarded during fiscal year
Acquisition
condition
Christophe de Margerie 2009 Plan - -
Chairman and Chief Executive Officer 09/15/2009
Claude Clément 2009 Plan -
Director representing employee shareholders 09/15/2009 -
Total - -
126
TOTAL. Registration Document 2011
Compensation for the administration and management bodies
Corporate governance 5
5.8. TOTAL stock option grants
The following table gives a breakdown of stock options awarded by category of beneficiaries (main executive officers, other executive
officers and other employees) for the plans in effect during 2011.
Number of
beneficiaries
Number of
options
awarded(a)
Percentage
Average
number
of options per
beneficiary(a)
2003 Plan(b)(d): Subscription options
Decision of the Board on July 16, 2003 Main executive officers(c) 28 356,500 12.2% 12,732
Exercise price: €133.20; discount: 0.0% Other executive officers 319 749,206 25.5% 2,349
Exercise price as of May 24, 2006: €32.84(a) Other employees 3,603 1,829,600 62.3% 508
Total 3,950 2,935,306 100% 743
2004 Plan(d): Subscription options
Decision of the Board on July 20, 2004 Main executive officers(c) 30 423,500 12.6% 14,117
Exercise price: €159.40; discount: 0.0% Other executive officers 319 902,400 26.8% 2,829
Exercise price as of May 24, 2006: €39.30(a) Other employees 3,997 2,039,730 60.6% 510
Total 4,346 3,365,630 100% 774
2005 Plan(d): Subscription options
Decision of the Board on July 19, 2005 Main executive officers(c) 30 370,040 24.3% 12,335
Exercise price: €198.90; discount: 0.0% Other executive officers 330 574,140 37.6% 1,740
Exercise price as of May 24, 2006: €49.04 (a) Other employees 2,361 581,940 38.1% 246
Total 2,721 1,526,120 100% 561
2006 Plan(d): Subscription options
Decision of the Board on July 18, 2006 Main executive officers(c) 28 1,447,000 25.3% 51,679
Exercise price: €50.60; discount: 0.0% Other executive officers 304 2,120,640 37.0% 6,976
Other employees 2,253 2,159,600 37.7% 959
Total 2,585 5,727,240 100% 2,216
2007 Plan(d)(e): Subscription options
Decision of the Board on July 17, 2007 Main executive officers(c) 27 1,329,360 22.8% 49,236
Exercise price: €60.10; discount: 0.0% Other executive officers 298 2,162,270 37.1% 7,256
Other employees 2,401 2,335,600 40.1% 973
Total 2,726 5,827,230 100% 2,138
2008 Plan(d)(e)(f): Subscription options
Awarded on October 9, 2008, by decision Main executive officers(c) 26 1,227,500 27.6% 47,212
of the Board of Directors on September 9, 2008 Other executive officers 298 1,988,420 44.7% 6,673
Exercise price: €42.90; discount: 0.0% Other employees 1,690 1,233,890 27.7% 730
Total 2,014 4,449,810 100% 2,209
2009 Plan(d)(e)(g): Subscription options
Decision of the Board on September 15, 2009 Main executive officers(c) 26 1,227,500 27.6% 47,212
Exercise price: €39.90; discount: 0.0% Other executive officers 284 1,825,540 41.6% 6,428
Other employees 1,742 1,360,460 31.0% 781
Total 2,052 4,387,500 100% 2,138
2010 Plan(d)(e): Subscription options
Decision of the Board on September 14, 2010
Exercise price: €38.20; discount: 0.0%
Main executive officers(c) 25 1,348,100 28.2% 53,924
Other executive officers 282 2,047,600 42.8% 7,261
Other employees 1,790 1,392,720 29.0% 778
Total 2,097 4,788,420 100% 2,283
2011 Plan(d)(e): Subscription options
Decision of the Board on September 14, 2011 Main executive officers(c) 29 846,600 55.7% 29,193
Exercise price: €33.00; discount: 0.0% Other executive officers 177 672,240 44.3% 3,798
Other employees - - - -
Total 206 1,518,840 100% 7,373
(a) To take into account the spin-off of Arkema, pursuant to the provisions in effect on the date of the Shareholders’ Meeting on May 12, 2006, at its meeting of March 14, 2006, the Board
of Directors resolved to adjust the rights of TOTAL stock options holders. For each plan and each holder, the exercise prices for TOTAL stock options were multiplied by 0.986147 and
the number of unexercised stock options was multiplied by 1.014048 (and then rounded up), effective as of May 24, 2006. In addition, to take into account the four-for-one stock split
approved by the Shareholders’ Meeting on May 12, 2006, the exercise price for stock options was divided by four and the number of unexercised stock options was multiplied by four.
The presentation in this table of the number of options initially awarded has not been adjusted to reflect the four-for-one stock split.
Registration Document 2011. TOTAL
127
5 Corporate governance
Compensation for the administration and management bodies
(b) Certain employees of the Elf Aquitaine group in 1998 also benefited from the vesting of Elf Aquitaine options awarded in 1998 subject to performance conditions related to the Elf Aquitaine
group from 1998 to 2002. These Elf Aquitaine plans expired on March 31, 2005.
(c) Members of the Management Committee and the Treasurer as of the date of the Board meeting awarding the options. Mr. Desmarest has not been a member of the Management
Committee since February 14, 2007. Mr. Desmarest was awarded 110,000 options under the 2007 Plan and no options since 2008.
(d) The options are exercisable, subject to a presence condition, after a 2-year vesting period from the date of the Board meeting awarding the options and expire eight years after this
date. The underlying shares may not be transferred during the 4-year period from the date of the Board meeting awarding the options (except for the 2008 Plan). The presence
condition states that the termination of the employment contract will result in the employee losing the right to exercise the options.
(e) The 4-year transfer restriction period does not apply to employees of non-French subsidiaries as of the date of the grant, who may transfer the underlying shares after a 2-year period
from the date of the grant.
(f) For the 2008 Plan, the options acquisition rate, linked to the performance condition, was 60%.
(g) For the 2009 Plan, the options acquisition rate, linked to the performance condition, was 100%.
5.9. TOTAL stock options as of December 31, 2011
5.9.1. Outstanding TOTAL stock option plans
2003 Plan 2004 Plan 2005 Plan 2006 Plan 2007 Plan 2008 Plan 2009 Plan 2010 Plan 2011 Plan Total
Type of options Subscription Subscription Subscription Subscription Subscription Subscription Subscription Subscription Subscription
options options options options options options options options options
Date of the
Shareholders’
Meeting 05/17/2001 05/14/2004 05/14/2004 05/14/2004 05/11/2007 05/11/2007 05/11/2007 05/21/2010 05/21/2010
Grant date (a) 07/16/2003 07/20/2004 07/19/2005 07/18/2006 07/17/2007 10/09/2008 09/15/2009 09/14/2010 09/14/2011
Total number
of options
awarded,
including (b): 11,741,224 13,462,520 6,104,480 5,727,240 5,937,230 4,449,810 4,387,500 4,788,420 1,518,840 58,117,264
Directors (c) 240,000 240,000 240,720 400,720 310,840 200,660 200,000 240,000 160,000 2,232,940
- C. de Margerie n/a n/a n/a 160,000 200,000 200,000 200,000 240,000 160,000 1,160,000
- C. Clément n/a n/a n/a n/a n/a n/a n/a - - -
- D. Boeuf n/a - 720 720 840 660 - n/a n/a 2,940
- T. Desmarest 240,000 240,000 240,000 240,000 110,000 - - - n/a 1,070,000
Additional grant - 24,000 134,400 - - - - - - 158,400
Adjustments related
to the spin-off of
Arkema(d) 163,180 196,448 90,280 - - - - - - 449,908
Date as of which
the options may
be exercised 07/17/2005 07/21/2006 07/20/2007 07/19/2008 07/18/2009 10/10/2010 09/16/2011 09/15/2012 09/15/2013
Expiry date 07/16/2011 07/20/2012 07/19/2013 07/18/2014 07/17/2015 10/09/2016 09/15/2017 09/14/2018 09/14/2019
Exercise price (€) (e) 32.84 39.30 49.04 50.60 60.10 42.90 39.90 38.20 33.00
Cumulative number
of options
exercised as of
12/31/2011 11,068,508 1,266,293 38,497 8,620 - 200 1,080 2,040 9,400
Cumulative number
of options
canceled as of
12/31/2011 835,896 322,151 128,127 95,114 86,865 113,912 28,740 86,337 1,000
Number of options:
- outstanding as of
January 1, 2011 5,734,444 12,338,847 6,178,856 5,640,886 5,866,445 4,349,158 4,371,890 4,787,300 - 49,267,826
- awarded in 2011 - - - - - - - - 1,518,840 1,518,840
- canceled in 2011(f)(g) (738,534) (28,208) (16,320) (17,380) (16,080) (13,260) (14,090) (85,217) (1,000) (930,089)
- exercised in 2011 (4,995,910) (216,115) - - - (200) - (2,040) (9,400) (5,223,665)
- Outstanding as of
12/31/2011 - 12,094,524 6,162,536 5,623,506 5,850,365 4,335,698 4,357,800 4,700,043 1,508,440 44,632,912
(a) The grant date is the date of the Board meeting awarding the options, except for the share subscription option plan of October 9, 2008, approved by the Board on September 9, 2008.
(b) The number of options awarded before May 23, 2006, has been multiplied by four to take into account the four-for-one stock split approved by the Shareholders’ Meeting on May 12, 2006.
(c) Options awarded to directors at the time of grant.
(d) Adjustments approved by the Board at its meeting on March 14, 2006, pursuant to the provisions in effect at the time of the Board meeting and at the time of the Shareholders’
Meeting on May 12, 2006, related to the spin-off of Arkema. These adjustments were made on May 22, 2006 effective as of May 24, 2006.
(e) Exercise price as of May 24, 2006. The exercise prices of TOTAL subscription shares under the plans in force at that date were multiplied by 0.25 to take into account the four-for-one stock
split on May 18, 2006. Moreover, following the spin-off of Arkema, the exercise prices of TOTAL stock options under these plans were multiplied by an adjustment factor equal to 0.986147
effective as of May 24, 2006. The exercise prices effective before May 24, 2006 are given in Note 25, points A, B and C to the Consolidated Financial Statements (Chapter 9).
(f) Out of the 930,089 options canceled in 2011, 738,534 options that were not exercised expired due to the expiry of the 2003 subscription option plan on July 16, 2011.
(g) The acquisition rate applicable to the subscription options that were subject to the performance condition of the 2009 Plan was 100%.
128
TOTAL. Registration Document 2011
Compensation for the administration and management bodies
Corporate governance 5
If all the outstanding stock options as of December 31, 2011 were exercised, the corresponding shares would represent 1.85% (1) of the
Company’s potential share capital as of such date.
5.9.2. TOTAL stock options awarded to main executive officers
(Management Committee and Treasurer) as of December 31, 2011
2003 Plan 2004 Plan 2005 Plan 2006 Plan 2007 Plan 2008 Plan 2009 Plan 2010 Plan 2011 Plan Total
Type of options Subscription Subscription Subscription Subscription Subscription Subscription Subscription Subscription Subscription
options options options options options options options options options
Expiry date 07/16/2011 07/20/2012 07/19/2013 07/18/2014 07/17/2015 10/09/2016 09/15/2017 09/14/2018 09/14/2019
Exercise price (€)(a) 32.84 39.30 49.04 50.60 60.10 42.90 39.90 38.20 33.00
Options awarded
by the Board(b) 680,904 848,800 711,440 851,240 1,032,120 1,138,300 1,215,300 1,406,400 846,600 8,731,104
Adjustments
related to the
spin-off of Arkema(c) 8,988 11,992 10,048 - - - - - - 31,028
Options
outstanding as of
January 01, 2011 277,119 757,792 721,488 851,240 1,032,120 1,059,901 1,215,300 1,406,400 7,321,360
Options awarded
in 2011 - - - - - - - - 846,600 846,600
Options exercised
in 2011 (277,119) - - - - - - - - (277,119)
Options canceled
in 2011 - - - - - - - (59,000) - (59,000)
Options
outstanding as of
December 31, 2011 - 757,792 721,488 851,240 1,032,120 1,059,901 1,215,300 1,347,400 846,600 7,831,841
(a) Exercise price as of May 24, 2006. The exercise prices of TOTAL subscription shares under the plans in force at that date were multiplied by 0.25 to take into account the four-for-one stock
split on May 18, 2006. Moreover, following the spin-off of Arkema, the exercise prices of TOTAL stock options under these plans were multiplied by an adjustment factor equal to 0.986147
effective as of May 24, 2006. The exercise prices effective before May 24, 2006 are given in Note 25, points A, B and C to the Consolidated Financial Statements (Chapter 9).
(b) The number of options awarded before May 23, 2006, has been multiplied by four to take into account the four-for-one stock split approved by the Shareholders’ Meeting on May 12, 2006.
(c) Adjustments approved by the Board at its meeting on March 14, 2006, pursuant to the provisions in effect at the time of the Board meeting and of the Shareholders’ Meeting on May 12, 2006,
related to the spin-off of Arkema. These adjustments were made on May 22, 2006 effective as of May 24, 2006.
As part of the 2007, 2008 and 2009 share subscription option plans, the Board of Directors decided that for each beneficiary of more than 25,000
options, one-third of the options awarded in excess of this number be subject to a performance condition. For the 2010 share subscription
option plan, beneficiaries of more than 3,000 options are subject to a performance condition for part of the options (see paragraph 5.6.2
of this Chapter). For the 2011 share subscription option plan, all of the options are subject to a performance condition.
In addition, Mr. Clément, the director representing employee shareholders, has not exercised any option in 2011 and has not been awarded
any share subscription options under the 2011 Plan.
(1) Out of a total potential share capital of 2,408,400,225 shares (see paragraph 1.4 of Chapter 8).
Registration Document 2011. TOTAL
129
5 Corporate governance
Compensation for the administration and management bodies
5.9.3. TOTAL stock options awarded to Mr. de Margerie, Chairman
and Chief Executive Officer of TOTAL S.A.
2003 Plan 2004 Plan 2005 Plan 2006 Plan 2007 Plan 2008 Plan 2009 Plan 2010 Plan 2011 Plan Total
Type of options Subscription Subscription Subscription Subscription Subscription Subscription Subscription Subscription Subscription
options options options options options options options options options
Expiry date 07/16/2011 07/20/2012 07/19/2013 07/18/2014 07/17/2015 10/09/2016 09/15/2017 09/14/2018 09/14/2019
Exercise price (€)(a) 32.84 39.30 49.04 50.60 60.10 42.90 39.90 38.20 33.00
Options awarded
by the Board(b) 112,000 128,000 130,000 160,000 200,000 200,000 200,000 240,000 160,000 1,530,000
Adjustments related
to the spin-off
of Arkema(c) 1,576 1,800 1,828 - - - - - - 5,204
Options outstanding
as of January 01, 2011 113,576 129,800 131,828 160,000 200,000 176,667 200,000 240,000 - 1,351,871
Options awarded
in 2011 - - - - - - - - 160,000 160,000
Options exercised
in 2011 (113,576) - - - - - - - - (113,576)
Options canceled
in 2011 - - - - - - - - - -
Options outstanding as
of December 31, 2011 - 129,800 131,828 160,000 200,000 176,667 200,000 240,000 160,000 1,398,295
(a) Exercise price as of May 24, 2006. The exercise prices of TOTAL subscription shares under the plans in force at that date were multiplied by 0.25 to take into account the four-for-one stock
split on May 18, 2006. Moreover, following the spin-off of Arkema, the exercise prices of TOTAL stock options under these plans were multiplied by an adjustment factor equal to 0.986147
effective as of May 24, 2006. The exercise prices effective before May 24, 2006 are given in Note 25, points A, B and C to the Consolidated Financial Statements (Chapter 9).
(b) The number of options awarded before May 23, 2006, has been multiplied by four to take into account the four-for-one stock split approved by the Shareholders’ Meeting on May 12, 2006.
(c) Adjustments approved by the Board at its meeting on March 14, 2006, pursuant to the provisions in effect at the time of the Board meeting and of the Shareholders’ Meeting on May 12, 2006,
related to the spin-off of Arkema. These adjustments were made on May 22, 2006 effective as of May 24, 2006.
As part of the 2007 to 2011 Plans, the Board has made the grant of these options to the Chairman and Chief Executive Officer subject to
performance conditions (see paragraph 5.6.2 of this Chapter). For the 2009 Plan, the acquisition rate, linked to the performance conditions,
was 100%.
As of December 31, 2011, the outstanding options of the Chairman and Chief Executive Officer represented 0.058%(1) of the Company’s
potential share capital as of such date.
Mr. Desmarest, Chairman of the Board of Directors until May 21, 2010, was not awarded any share subscription options under
the 2008, 2009, 2010 and 2011 plans. In addition, he was not awarded any performance shares under plans in the period 2005 to 2011.
(1) Out of a total potential share capital of 2,408,400,225 shares (see paragraph 1.4 of Chapter 8).
130
TOTAL. Registration Document 2011
Compensation for the administration and management bodies
Corporate governance 5
5.9.4. Stock options awarded to the ten employees (other than corporate executive officers)
receiving the largest awards/Stock options exercised by the ten employees
(other than corporate executive officers) exercising the largest number of options
Total number
of options
awarded/
exercised
Exercise
price (€)
Grant
date(a)
Expiry
date
Options awarded in 2011 to the ten employees
of TOTAL S.A., or any company in the Group,
receiving the largest number of options 430,400 33.00 09/14/2011 09/14/2019
Options exercised in 2011 by the ten employees
of TOTAL S.A., or any company in the Group, 227,671 32.84 07/16/2003 07/16/2011
exercising the largest number of options (b) 9,736 39.30 07/20/2004 07/20/2012
237,407 33.10(c)
(a) The grant date is the date of the Board meeting awarding the options.
(b) Exercise price as of May 24, 2006. The exercise prices of TOTAL stock options under the plans in force at that date were multiplied by 0.25 to take into account the four-for-one stock
split on May 18, 2006. Moreover, following the spin-off of Arkema, the exercise prices of TOTAL stock options under these plans were multiplied by an adjustment factor equal to 0.986147
effective as of May 24, 2006. The exercise prices effective before May 24, 2006 are given in Note 25, points A, B and C to the Consolidated Financial Statements (Chapter 9).
(c) Weighted-average price.
Registration Document 2011. TOTAL
131
5 Corporate governance
Compensation for the administration and management bodies
5.10. TOTAL global free and performance share grants
5.10.1. TOTAL global free share plan
In addition to the performance shares granted, the Board of Directors decided at its meeting on May 21, 2010, to implement a global free
share plan intended for all the Group employees, that, is more than 100,000 employees. On June 30, 2010, rights to 25 free shares were
granted to every employee. The shares are subject to a vesting period of two to four years depending on the case. The shares granted are
not subject to any performance condition. Following the vesting period, the shares will be issued.
5.10.2. Breakdown of TOTAL performance share grants
The following table gives a breakdown of TOTAL performance share grants by category of beneficiary (main executive officers,
other executive officers and other employees).
Number of Number of Percentage Average
beneficiaries shares number
awarded (a) of shares per
beneficiary
2005 Plan(b) Main executive officers(c) 29 13,692 2.4% 472
Decision of the Board on July 19, 2005 Other executive officers 330 74,512 13.1% 226
Other employees(d) 6,956 481,926 84.5% 69
Total 7,315 570,130 100% 78
2006 Plan(b) Main executive officers(c) 26 49,200 2.2% 1,892
Decision of the Board on July 18, 2006 Other executive officers 304 273,832 12.0% 901
Other employees(d) 7,509 1,952,332 85.8% 260
Total 7,839 2,275,364 100% 290
2007 Plan(b) Main executive officers(c) 26 48,928 2.1% 1,882
Decision of the Board on July 17, 2007 Other executive officers 297 272,128 11.5% 916
Other employees(d) 8,291 2,045,309 86.4% 247
Total 8,614 2,366,365 100% 275
2008 Plan(b) Main executive officers(c) 25 49,100 1.8% 1,964
Awarded on October 9, 2008, by decision of the Board Other executive officers 300 348,156 12.5% 1,161
of Directors on September 9, 2008 Other employees(d) 9,028 2,394,712 85.8% 265
Total 9,353 2,791,968 100% 299
2009 Plan(b) Main executive officers(c) 25 48,700 1.6% 1,948
Decision of the Board on September 15, 2009 Other executive officers 284 329,912 11.1% 1,162
Other employees(d) 9,693 2,593,406 87.3% 268
Total 10,002 2,972,018 100% 297
2010 Plan(b) Main executive officers(c) 24 46,780 1.6% 1,949
Decision of the Board on September 14, 2010 Other executive officers 283 343,080 11.4% 1,212
Other employees(d) 10,074 2,620,151 87.0% 260
Total 10,381 3,010,011 100% 290
2011 Plan Main executive officers(c) 29 184,900 5.1% 6,376
Decision of the Board on September 14, 2011 Other executive officers 274 624,000 17.1% 2,277
Other employees(d) 9,658 2,840,870 77.8% 294
Total 9,961 3,649,770 100% 366
(a) The number of performance shares awarded shown in this table has not been adjusted to take into account the four-for-one stock split approved by the Shareholders’ Meeting on May 12, 2006.
(b) For the 2005, 2006, 2007 and 2009 Plans, the acquisition rates of the shares awarded, linked to the performance conditions, were 100%. For the 2008 Plan, the acquisition rate, linked
to the performance condition, was 60%.
(c) Members of the Management Committee and the Treasurer as of the date of the Board meeting granting the performance shares. The Chairman of the Board and the Chief Executive
Officer were not awarded any performance shares, with the exception of the 2011 Plan. On September 14, 2011, the Board of Directors of TOTAL S.A. decided to grant 16,000
performance shares to Mr. de Margerie.
(d) Mr. Clément, employee of Total Raffinage Marketing, a subsidiary of TOTAL S.A. and the director of TOTAL S.A. representing employee shareholders, was awarded 320 performance
shares under the 2005 Plan, 200 performance shares under the 2007 Plan, 500 performance shares under the 2008 Plan, 240 performance shares under the 2010 Plan and 240
performance shares under the 2011 Plan.
(e) Excluding free shares granted as part of the 2010 global free share plan.
132
TOTAL. Registration Document 2011
Compensation for the administration and management bodies
Corporate governance 5
The grant of these performance shares, which were bought back by the Company on the market, will become final after a 2-year vesting
period. This final grant is subject to a presence condition and a performance condition (see paragraph 5.6.1 of this Chapter). Moreover,
the transfer of the performance shares will not be permitted until the end of a 2-year mandatory holding period.
5.11. TOTAL global free and performance share plans as of December 31, 2011
5.11.1. Performance share plans as of December 31, 2011
2005 Plan(a) 2006 Plan 2007 Plan 2008 Plan 2009 Plan 2010 Plan 2011 Plan
Date of the Shareholders’ Meeting 05/17/2005 05/17/2005 05/17/2005 05/16/2008 05/16/2008 05/16/2008 05/13/2011
Grant date(b) 07/19/2005 07/18/2006 07/17/2007 10/09/2008 09/15/2009 09/14/2010 09/14/2011
Closing price on grant date(c) €52.13 €50.40 €61.62 €35.945 €41.615 €39.425 €32.69
Average repurchase price per share paid by the Company €51.62 €51.91 €61.49 €41.63 €38.54 €39.11 €39.58
Total number of performance shares awarded, including to 2,280,520 2,275,364 2,366,365 2,791,968 2,972,018 3,010,011 3,649,770
- Directors(d) 416 416 432 588 - 240 16,240
- Ten employees with largest grants(e) 20,000 20,000 20,000 20,000 20,000 20,000 91,400
Start of the vesting period: 07/19/2005 07/18/2006 07/17/2007 10/09/2008 09/15/2009 09/14/2010 09/14/2011
Date of final grant, subject to specific condition
(end of the vesting period) 07/20/2007 07/19/2008 07/18/2009 10/10/2010 09/16/2011 09/15/2012 09/15/2013
Transfer possible from (end of the mandatory holding period) 07/20/2009 07/19/2010 07/18/2011 10/10/2012 09/16/2013 09/15/2014 09/15/2015
Number of performance shares:
- Outstanding as of January 1, 2011 - - - - 2,954,336 3,000,637 -
- Awarded in 2011 - - - - - 3,649,770
- Canceled in 2011 800(g) 700(g) 792(g) 356(g) (26,214) (10,750) (19,579)
- Finally granted in 2011(f) (800)(g) (700)(g) (792)(g) (356)(g) (2,928,122) (1,836) -
- Outstanding as of December 31, 2011 - - - - - 2,988,051 3,630,191
(a) The number of performance shares awarded has been multiplied by four to take into account the four-for-one stock split approved by TOTAL Shareholders’ Meeting on May 12, 2006.
(b) The grant date is the date of the Board meeting awarding the performance share grant, except for the performance shares awarded on October 9, 2008, approved by the Board on
September 9, 2008.
(c) To take into account the four-for-one stock split in May 18, 2006, the closing price for TOTAL shares on July 19, 2005 (€208.50) has been divided by four.
(d) Mr. Desmarest, Chairman of the Board of Directors of TOTAL S.A. until May 21, 2010, and Mr. de Margerie, Chief Executive Officer since February 13, 2007 and Chairman and Chief
Executive Officer since May 21, 2010, were not awarded performance shares under the plans approved by the Board of Directors of TOTAL S.A. on July 18, 2006, July 17, 2007,
September 9, 2008, September 15, 2009 and September 14, 2010. Furthermore, Mr. Desmarest was not awarded performance shares under the plan approved by the Board of Directors
of TOTAL S.A. on July 19, 2005. On September 14, 2011, the Board of Directors of TOTAL S.A. decided to grant 16,000 performance shares to Mr. de Margerie. In addition, Mr. Boeuf,
director of TOTAL S.A. representing employee shareholders until December 31, 2009, was awarded performance shares under the plans approved by the Board of Directors of TOTAL S.A.
on July 19, 2005, July 18, 2006, July 17, 2007 and September 9, 2008. Mr. Boeuf was not awarded any performance shares under the plan approved by the Board of Directors of
TOTAL S.A. on September 15, 2009. Mr. Clément, director of TOTAL S.A. representing employee shareholders since May 21, 2010, was awarded 240 performance shares under the plan
approved by the Board of Directors of TOTAL S.A. on September 14, 2011. In addition, Mr. Clément was awarded 240 performance shares under the plan approved by the Board
of Directors of TOTAL S.A. on September 14, 2010.
(e) Employees of TOTAL S.A., or of any Group company, who were not directors of TOTAL S.A. as of the date of grant.
(f) For the 2010 Plans, final grants following the death of the beneficiary.
(g) Performance shares finally awarded for which the entitlement right had been canceled erroneously.
In case of a final grant of the outstanding performance shares as of December 31, 2011, the corresponding shares would represent 0.27%(1)
of the Company’s potential share capital as of such date.
(1) Out of a total potential share capital of 2,408,400,225 shares (see paragraph 1.4 of Chapter 8).
Registration Document 2011. TOTAL
133
5 Corporate governance
Compensation for the administration and management bodies
5.11.2. Follow-up of the global free share plan
2010 Plan 2010 Plan Total
(2+2)(b) (4+0)(c)
Date of the Shareholders’ Meeting 05/16/2008 05/16/2008
Grant date(a) 06/30/2010 06/30/2010
Final grant date 07/01/2012 07/01/2014
Transfer possible from 07/01/2014 07/01/2014
Number of shares
Outstanding as of January 1, 2010
Awarded 1,508,850 1,070,650 2,579,500
Canceled (125) (75) (200)
Finally granted(d) (75) (75)
Outstanding as of January 1, 2011 1,508,650 1,070,575 2,579,225
Awarded - - -
Canceled (29,175) (54,625) (83,800)
Finally granted(d) (475) (425) (900)
Outstanding as of December 31, 2011 1,479,000 1,015,525 2,494,525
(a) The June 30, 2010 grant was decided by the Board of Directors on May 21, 2010.
(b) Vesting period of two years followed by a holding period of 2 years.
(c) Vesting period of four years without a holding period.
(d) Final grant following the death or disability of the beneficiary of the shares.
In case of a final grant of the outstanding shares as of December 31, 2011, the corresponding shares would represent 0.10%(1) of the
Company’s potential share capital as of such date.
5.11.3. Performance share grants to the ten employees
(other than corporate executive officers)
receiving the largest number of performance shares
Number of
performance
shares
granted/finally
awarded
Grant
date
Date of
final grant
(end of
vesting
period)
End of
mandatory
holding
period
Performance share grants approved by the Board meeting on
September 14, 2011 to the ten TOTAL S.A. employees (other than corporate
executive officers) receiving the largest number of performance shares(a) 91,400 09/14/2011 09/15/2013 09/15/2015
Performance shares finally awarded in 2011 following the performance share plan
approved by the Board meeting on September 15, 2009, to the ten employees
(other than corporate executive officers) at the time of such approval
receiving the largest number of performance shares(b) 20,000 09/15/2009 09/16/2011 09/16/2013
(a) Grant approved by the Board on September 14, 2011. Grants of these performance shares will become final, subject to a performance condition, after a 2-year vesting period
(i.e., on September 15, 2013) (see paragraph 5.6.1 of this Chapter). Moreover, the transfer of the performance shares will not be permitted until the end of a 2-year mandatory holding
period (i.e., on September 15, 2015).
(b) This final grant is subject to a performance condition (see paragraph 5.6.1 of this Chapter). The acquisition rate of the shares awarded, linked to the performance condition, was 100%.
Moreover, the transfer of the performance shares finally awarded will only be permitted after the end of a 2-year mandatory holding period (i.e., from September 16, 2013).
(1) Out of a total potential share capital of 2,408,400,225 shares (see paragraph 1.4 of Chapter 8).
134
TOTAL. Registration Document 2011
Corporate governance 5
Employees, share ownership
6. Employees, share ownership
6.1. Employees
The tables below set forth the number of employees, by division and geographic location, of the Group (fully consolidated subsidiaries)
as of the end of the periods indicated:
Upstream Downstream Chemicals Corporate Total
2011 23,563 29,423 41,665 1,453 96,104
2010 17,192 32,631 41,658 1,374 92,855
2009 16,628 33,760 44,667 1,332 96,387
France Rest of Rest of Total
Europe the World
2011 35,037 22,453 38,614 96,104
2010 35,169 24,931 32,755 92,855
2009 36,407 26,299 33,681 96,387
6.2. Arrangements for involving employees in the Company’s share capital
Pursuant to agreements signed on March 15, 2002, as amended, the Group created a “Total Group Savings Plan” (PEGT), a “Partnership
for Voluntary Wage Savings Plan” (PPESV, later becoming PERCO) and a “Complementary Company Savings Plan” (PEC) for employees
of the Group’s French companies having adhered to these plans. These plans allow investments in a number of mutual funds including one
invested in Company shares (“TOTAL ACTIONNARIAT FRANCE”). A “Shareholder Group Savings Plan” (PEG-A) has also been in place since
November 19, 1999 to facilitate capital increases reserved for employees of the Group’s French and foreign subsidiaries covered by these plans.
6.2.1. Company savings plans
The various Company savings plans (PEGT, PEC) give the employees of French Group Companies belonging to these savings plans
access to several collective investment funds (fonds communs de placement), including a fund invested in shares of the Company
(“TOTAL ACTIONNARIAT FRANCE”).
The capital increases reserved for employees are conducted under PEG-A through the “TOTAL ACTIONNARIAT FRANCE” fund for employees
of the Group’s French subsidiaries and through the “TOTAL ACTIONNARIAT INTERNATIONAL CAPITALISATION” fund for the employees
of foreign subsidiaries. In addition, U.S. employees participate in these operations through American Depositary Receipts (ADRs) and Italian
employees (as well as German employees starting in 2011) may participate by directly subscribing to new shares at the Group Caisse
Autonome in Belgium.
6.2.2. Profit-sharing agreements
Under the June 26, 2009 profit-sharing agreements concerning ten Group companies, the amount available for employees profit-sharing
is determined, when permitted by local law, based on the return on equity (ROE) performance of the Group (for additional information,
see paragraph 3.1 “Employee incentives and profit-sharing” of Chapter 8).
6.2.3. Employee shareholding
The total number of TOTAL shares held by employees as of December 31, 2011, is as follows:
“TOTAL ACTIONNARIAT FRANCE” 78,607,765
“TOTAL ACTIONNARIAT INTERNATIONAL CAPITALISATION” 19,691,590
ELF PRIVATISATION N°1 929,494
Shares held by U.S. employees 454,305
Group Caisse Autonome (Belgium) 436,431
TOTAL shares from the exercise of the Company’s stock options
and held as registered shares within a Company Savings Plan (PEE)(a) 3,293,822
Total shares held by employee shareholder funds 103,413,407
(a) Company savings plans.
Registration Document 2011. TOTAL
135
5 Corporate governance
Employees, share ownership
As of December 31, 2011, the employees of the Group held,
on the basis of the definition of employee shareholding contained
in Article L. 225-102 of the French Commercial Code, 103,413,407
TOTAL shares, representing 4.37% of the Company’s share capital
and 8.01% of the voting rights that could be exercised at
a Shareholders’ Meeting on that date.
The management of each of the three collective investment funds
mentioned above is controlled by a dedicated supervisory board,
two-third of its members representing holders of fund units
and one-third representing the Company. This board is responsible
for reviewing the collective investment funds’ management report
and annual financial statements as well as the financial,
administrative and accounting management, exercising voting
rights attached to portfolio securities, deciding contribution
of securities in case of a public tender offer, deciding mergers,
spin-offs or liquidations, and granting its approval prior to changes
in the rules and procedures of the collective investment fund
in the conditions provided for by the rules and procedures.
These rules and procedures also stipulate a simple majority
vote for decisions, except for decisions requiring a qualified majority
vote of two-third plus one related to a change in a fund’s rules
and procedures, its conversion or disposal, and decisions related
to contribution of securities of the Elf Privatisation collective
investment fund in case of a public tender offer.
For employees holding shares outside of the employee collective
investment funds mentioned in the table above, voting rights
are exercised individually.
6.2.4. Capital increase reserved
for Group employees
At the Shareholders’ Meeting held on May 21, 2010, the shareholders
delegated to the Board of Directors the authority to increase the share
capital of the Company in one or more transactions and within
a maximum period of twenty-six months from the date
of the meeting, reserving subscriptions for such issuance to the Group
employees participating in a company savings plan in accordance
with the provisions of Articles L. 3332-2 and L. 3332-18 and
following of the French Labor Code, and Articles L. 225-129-2,
L. 225-129-6 and L. 225-138-1 of the French Commercial Code.
The number of ordinary shares that are likely to be issued pursuant
to this delegation of authority will not exceed 1.5% of the share
capital outstanding on the date of the meeting of the Board of
Directors at which a decision to proceed with an issuance is made.
Pursuant to this delegation of authority, the Board of Directors
decided on October 28, 2010 to proceed with a capital increase
of a maximum of 12 million shares reserved for TOTAL employees
in 2011, bearing dividends as of January 1, 2010. The Board
of Directors decided to delegate the authority to set the subscription
period to the Chairman and Chief Executive Officer.
On March 14, 2011, the Chairman and Chief Executive Officer
decided that the subscription period would be set from March
16 to April 1, 2011 and acknowledged that the subscription price
per ordinary share would be set at €34.80.
The subscription resulted in the issuance in 2011 of 8,902,717
TOTAL shares.
6.3. Shares held by the administration and management bodies
As of December 31, 2011, based on information from the members
of the Board and the share registrar, the members of the Board
and the Group Executive Officers (Management Committee
and Treasurer) held a total of less than 0.5% of the share capital:
– Members of the Board of Directors (including the Chairman
and Chief Executive Officer): 317,306 shares;
– Chairman and Chief Executive Officer: 105,556 shares
and 53,869 shares of the “TOTAL ACTIONNARIAT FRANCE”
collective investment plan;
By decision of the Board of Directors:
– The Chairman and the Chief Executive Officer are required
to hold a number of shares of the Company equal in value
to two years of the fixed portion of their annual compensation.
– Members of the Executive Committee are required to hold
a number of shares of the Company equal in value to two years
of the fixed portion of their annual compensation. These shares
have to be acquired within three years from the appointment
to the Executive Committee.
– Management Committee (including the Chief Executive Officer)
The number of TOTAL shares to be considered includes:
and Treasurer: 623,449 shares.
– directly held shares, whether or not they are subject to transfer
restrictions; and
– shares in collective investment funds invested in TOTAL shares.
136
TOTAL. Registration Document 2011
Corporate governance 5
Employees, share ownership
6.3.1. Summary of transactions in the Company’s securities
(Article L. 621-18-2 of the French Monetary and Financial Code)
The following table presents transactions, of which the Company has been informed, in the Company’s shares or related financial
instruments carried out in 2011 by the individuals concerned under paragraphs a) through c) of Article L. 621-18-2 of the French Monetary
and Financial Code.
Year 2011 Acquisition Subscription Transfer Exchange Exercise
of stock
options
Christophe de Margerie(a) TOTAL shares - - 93,250 - 113,576
Shares in collective investment
plans (FCPE), and other related
financial instruments(b) 5,340.09 - - - -
Michel Bénézit(a) TOTAL shares - - - -
Shares in collective investment
plans (FCPE), and other related
financial instruments(b) 626.95 13,341.83 6,828.94 - -
François Cornélis(a) TOTAL shares - - 9,000 -
Shares in collective investment
plans (FCPE), and other related
financial instruments(b) 1,883.86 11,440.06 5,876.63 - -
Yves-Louis Darricarrère(a) TOTAL shares - - 14,412 - 6,412
Shares in collective investment
plans (FCPE), and other related
financial instruments(b) 901.20 20,088.29 10,319.28 -
Jean-Jacques Guilbaud(a) TOTAL shares - - 29,163 - 29,163
Shares in collective investment
plans (FCPE), and other related
financial instruments(b) 1,008.85 14,320.92 8,636.03 - -
Bertrand Jacquillat(a)(c) TOTAL shares 300 - 33 - -
Shares in collective investment
plans (FCPE), and other related
financial instruments(b) - - - - -
Patrick de La Chevardière(a) TOTAL shares - - - - -
Shares in collective investment
plans (FCPE), and other related
financial instruments(b) 756.08 14,998.66 7,587.71 - -
(a) Including the related individuals in the meaning of the provisions of the Article R. 621-43-1 of the French Monetary and Financial Code.
(b) Collective investment funds (FCPE) primarily invested in Company shares.
(c) Director and member of the Audit Committee until May 13, 2011.
Registration Document 2011. TOTAL
137
138
TOTAL. Registration Document 2011
TOTAL and its shareholders 6
TOTAL and its shareholders
1. Listing details 140
1.1. Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .140
1.2. Share performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .141
2. Dividend 144
2.1. Dividend policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .144
2.2. Dividend payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .145
2.3. Coupons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .145
3. Share buybacks 146
3.1. Share buybacks and cancellations in 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .146
3.2. Board’s report on share buybacks and sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .146
3.3. 2012-2013 share buyback program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .148
4. Shareholders 150
4.1. Relationship between TOTAL and the French State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .150
4.2. Merger of Total with PetroFina in 1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .150
4.3. Merger of TotalFina with Elf Aquitaine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .150
4.4. Major shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .151
4.5. Treasury shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .152
4.6. Shares held by members of the administrative and management bodies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .153
4.7. Employee shareholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .153
4.8. Shareholding structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .153
4.9. Regulated agreements and undertakings and related party transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .153
5. Information for overseas shareholders 154
5.1. United States holders of ADRs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .154
5.2. Non-resident shareholders (other than U.S. Shareholders) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .154
5.3. Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .154
6. Investor Relations 155
6.1. Communication policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .155
6.2. Relationships with institutional investors and financial analysts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .155
6.3. A quality relationship serving Individual Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .156
6.4. Registered shareholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .157
6.5. Individual Shareholders Department Contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .157
6.6. 2012 Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .158
6.7. 2013 Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .158
6.8. Investor Relations Department contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .158
Registration Document 2011. TOTAL
139
1.1.7. Market capitalization
as of December 31, 2011 (1)
€93.4 billion (2)
$120.8 billion (3)
1.1.8. Percentage of free float
90% (4)
1.1.9. Par value
€2.50
1.1.10. Credit ratings of the long-term and
short-term debt (long term/outlook/short term)
as of December 31
2011
2010
Standard & Poor’s
Moody’s
DBRS
AA-/Stable/A-1+
Aa1/Stable/P-1
AA/Stable/R-1 (middle)
AA/Negative/A-1+
Aa1/Stable/P-1
AA/Stable/R-1 (middle)
6 TOTAL and its shareholders
Listing details
1. Listing details
1.1. Listing
1.1.1. Exchanges
Paris, Brussels, London and New York
1.1.2. Codes
ISIN
Reuters
Bloomberg
Datastream
Mnémo
FR0000120271
TOTF.PA
FP FP
F:TAL
FP
1.1.3. Included in the following stock indexes
CAC 40, Euro Stoxx 50, Stoxx Europe 50, DJ Global Titans
1.1.4. Included in the following ESG indexes
(Environment, Social, Governance)
DJSI World, DJSI Europe, FTSE4Good, ASPI
1.1.5. Weight in indexes
as of December 31, 2011
CAC 40
EURO STOXX 50
STOXX EUROPE 50
DJ GLOBAL TITANS
14.4%
6.6%
3.5%
1.8%
1st position
1st position
9th position
25th position
1.1.6. Largest market capitalization
on Euronext Paris and in the euro zone
as of December 31, 2011
TOTAL is the largest capitalization on the Euronext Paris regulated
market. The largest companies by market capitalization in the euro
zone (a) are:
As of December 31, 2011
(B€)
TOTAL
Sanofi
Anheuser-Busch InBev
Siemens
ENI
93.4
76.1
76.0
67.6
64.1
(a) Based on the Euro Stoxx 50. Source: Bloomberg for companies other than TOTAL.
(1) Shares outstanding as of December 31, 2011: 2,363,767,313.
(2) TOTAL share price in Paris as of December 31, 2011: €39.50.
(3) TOTAL ADR price in New York as of December 31, 2011: $51.11.
(4) Source: Euronext.
140
TOTAL. Registration Document 2011
TOTAL and its shareholders 6
Listing details
1.2. Share performance
TOTAL share price (in euros)
in Paris (2008-2011)(a)
TOTAL ADR price (in dollars)
in New York (2008-2011)(a)
2008
2009
2010
2011
2008
2009
2010
2011
120
110
100
90
80
70
60
50
40
120
110
100
90
80
70
60
50
40
TOTAL
CAC 40
Eurostoxx 50
Source: Bloomberg - Share price as of December 31, 2011: €39.50.
(a) Base 100 as of January 1, 2008.
TOTAL
Dow Jones
Source: Bloomberg - ADR price as of December 31, 2011: $51.11.
(a) Base 100 as of January 1, 2008.
1.2.1. Arkema spin-off
Within the framework of the spin-off of Arkema’s chemical activities
from the Group’s other chemical activities, the Shareholders’ Meeting
of May 12, 2006 approved TOTAL S.A.’s contribution to Arkema,
under the regulation governing spin-offs, of all its interests in the
businesses included under Arkema’s scope, as well as the allocation
for each TOTAL share of an allotment right for Arkema shares,
with ten allotment rights entitling the holder to one Arkema share.
Since May 18, 2006, Arkema’s shares have been traded
on Euronext Paris.
Pursuant to provisions stated in the notice prior to the sale of unclaimed
shares (Avis préalable à la mise en vente de titres non réclamés)
published on August 3, 2006, in the French newspaper Les Échos,
Arkema shares corresponding to allotment rights for fractional
shares which were unclaimed as of August 3, 2008, were sold
on Euronext Paris at an average price of €32.5721 per share.
As a result, from August 3, 2008, the indemnity price per share
of allotment rights for Arkema share is €3.25721 (NYSE Euronext
notice No.PAR_20080812_02958_EUR). BNP Paribas Securities
Services paid an indemnity to the financial intermediaries on
remittance of corresponding allotment rights for Arkema shares.
As from August 4, 2018, the unclaimed amounts will be handed
over to the French Caisse des dépôts et consignations where the
holders will still be able to claim them for a period of twenty years.
After this time limit, the amounts will permanently become the property
of the French State.
1.2.2. Change in share prices in Europe of
the major European oil companies between
January 1, 2011 and December 31, 2011
(closing price in local currency)
TOTAL (€)
Royal Dutch Shell A (€)
Royal Dutch Shell B (pound sterling)
BP (pound sterling)
ENI (€)
Source: Bloomberg
-0.4%
+13.8%
+16.0%
-1.1%
-2.0%
1.2.3. Change in share prices in the United
States (ADR quotes in dollars for European
companies) of the major international oil
companies between January 1, 2011 and
December 31, 2011 (closing price in dollars)
TOTAL
ExxonMobil
Royal Dutch Shell A
Royal Dutch Shell B
Chevron
BP
ConocoPhillips
ENI
Source: Bloomberg
-4.4%
+15.9%
+9.4%
+14.0%
+16.6%
-3.2%
+7.0%
-5.6%
Registration Document 2011. TOTAL
141
6 TOTAL and its shareholders
Listing details
1.2.4. Appreciation of a portfolio invested in TOTAL shares
Net yield of 4.4% per year over ten years (excluding tax credit).
1.2.5. Multiplication of the initial investment by 1.5 over ten years
As of December 31, 2011, for every €1,000 invested in TOTAL shares by an individual residing in France, assuming that the net dividends
(excluding the tax credit) are reinvested in TOTAL shares, and excluding tax and social withholding.
Average annual
total return
Value, as of
December 31, 2011
of €1,000 invested
Investment date
TOTAL (a)
CAC 40 (b)
TOTAL
CAC 40
1 year
January 1, 2011 5.5% -14.3% 1,055 857
5 years January 1, 2007 -1.7% -7.5% 918 677
10 years January 1, 2002 4.4% -0.9% 1,538 914
15 years January 1, 1997 11.3% 4.6% 4,982 1,963
(a) TOTAL’s share prices, used for the calculation of the total return (including dividends and appreciation), take into account the adjustment made by Euronext Paris in 2006 ex Arkema’s
share allocation rights.
(b) CAC 40 quotes taken into account to calculate the total return (including dividends and appreciation) include all dividends distributed by the companies that are in the index.
1.2.6. Information summary
Share price
(€) 2011 2010 2009 2008 2007
Highest (during regular trading session) 44.55 46.74 45.79 59.50 63.40
Lowest (during regular trading session) 29.40 35.66 34.25 31.52 48.33
End of the year (closing) 39.50 39.65 45.01 38.91 56.83
Average of the last 30 trading sessions of the year (closing) 37.65 39.16 43.19 39.58 55.31
Trading volume (average per session) (a)
Euronext Paris 6,565,732 6,808,245 7,014,959 11,005,751 10,568,310
New York Stock Exchange (number of ADRs) 4,245,743 3,329,778 2,396,192 2,911,002 1,882,072
Dividend (b) 2.28 2.28 2.28 2.28 2.07
(a) Number of shares traded.
(b) The 2011 dividend is subject to the approval by the Shareholders’ Meeting on May 11, 2012. This amount includes the three quarterly 2011 dividends, each of €0.57 per share,
paid on September 22, 2011, December 22, 2011 and March 22, 2012, and is eligible for the 40% rebate applying to individuals residing in France for tax purposes provided for
by Article 158 of the French General Tax Code.
142
TOTAL. Registration Document 2011
TOTAL and its shareholders 6
Listing details
1.2.7. TOTAL share price over the past eighteen months (Euronext Paris) (a)
Average daily
volume (b)
Highest price
quoted (b)
(€)
Lowest price
quoted
(€)
September 2010 6,210,487 39.670 36.770
October 2010 5,822,245 39.720 37.520
November 2010 6,719,213 41.275 36.910
December 2010 5,162,212 40.790 37.195
January 2011 6,530,899 43.575 40.010
February 2011 6,214,549 44.470 42.325
March 2011 6,666,577 44.550 39.710
April 2011 5,194,138 43.730 40.340
May 2011 5,806,592 43.605 39.050
June 2011 5,538,109 40.235 37.305
July 2011 5,512,239 40.895 37.385
August 2011 9,087,194 38.110 30.335
September 2011 8,892,990 34.820 29.400
October 2011 7,406,110 39.810 31.730
November 2011 6,225,062 38.705 34.570
December 2011 5,307,713 39.605 35.940
January 2012 5,924,309 40.890 38.570
February 2012 4,675,941 42.400 40.225
Maximum for the period 44.550
Minimum for the period 29.400
(a) Source: Euronext Paris.
(b) Number of shares traded.
TOTAL share price at closing (Euronext Paris)
(€)
2010
2011
48
46
44
42
40
38
36
34
32
30
TOTAL average daily volume traded (Euronext Paris)
(in millions of shares)
2010
2011
11.55
7.88
8.18
7.10
6.09
5.74
6.29
5.30
6.21
5.82
6.72
6.53
6.21
6.67
5.16
5.81 5.54 5.51
5.19
6.23
5.31
9.09 8.89
7.41
J a n u ary
F e bru ary
M arc h
A pril
M ay
J u n e
J uly
S e pte m b er
A u g u st
O cto b er
N o ve m b er
D e c e m b er
J a n u ary
F e bru ary
M arc h
A pril
M ay
J u n e
J uly
A u g o u st
S e pte m b er
O cto b er
N o ve m b er
D e c e m b er
Registration Document 2011. TOTAL
143
6 TOTAL and its shareholders
Dividend
2. Dividend
2.1. Dividend policy
2.1.1. Dividend payment policy
Until the payment of the 2010 dividend, the Company paid
an interim dividend in November and the remainder after the
Shareholders’ Meeting held in May of each year. Consequently,
for 2010, an interim dividend of €1.14 per share and the remainder
of €1.14 per share were paid respectively on November 17, 2010
and May 26, 2011.
On October 28, 2010, the Board of Directors decided to change
its interim dividend policy and to adopt a new policy based on
quarterly dividend payments, starting in 2011.
2.1.2. 2011 and 2012 dividends
TOTAL paid three quarterly interim dividends for 2011:
– the Board of Directors decided on the first quarterly interim
dividend of €0.57 on April 28, 2011, with an ex-dividend date
on September 19, 2011 and a payment date on
September 22, 2011;
– the Board of Directors decided on the second quarterly interim
dividend of €0.57 on July 28, 2011, with an ex-dividend date
on December 19, 2011 and a payment date on
December 22, 2011;
– the Board of Directors decided on the third quarterly interim
dividend of €0.57 on October 27, 2011, with an ex-dividend
date on March 19, 2012 and a payment date on March 22, 2012.
For 2011, TOTAL plans to continue its dividend policy by proposing
a dividend of €2.28 per share at the Shareholders’ Meeting on
May 11, 2012, including a remainder of €0.57 per share,
with an ex-dividend date on June 18, 2012, and a payment
on June 21, 2012. This €2.28 per share dividend is stable
compared to the previous year.
Subject to the applicable legislative and regulatory provisions,
and pending the approval by the Board of Directors for the interim
dividends and by the shareholders at the Shareholders’ Meeting
for the accounts and the final dividend, the ex-date calendar for the
interim quarterly dividends and the final dividend for 2012 should
be as follows:
– 1st interim dividend: September 24, 2012;
– 2nd interim dividend: December 17, 2012;
– 3rd interim dividend: March 18, 2013;
– remainder: June 24, 2013.
The provisional ex-dividend dates above relate to the TOTAL shares
traded on the Euronext Paris.
2007
2008
2009
2010
2011
2.28 €
2.28 €
2.28 €
2.28 €
2.07 €
Final dividend
Interim dividend
In 2011, TOTAL’s pay-out ratio was 45% (1). Changes in the pay-out
ratio (2) for the past five years are as follow:
2007
2008
2009
2010
2011
66%
50%
45%
39%
37%
(1) Based on adjusted fully-diluted earnings per share of €5.06.
(2) Based on adjusted fully-diluted earnings for the relevant year.
144
TOTAL. Registration Document 2011
TOTAL and its shareholders 6Dividend
2.2. Dividend payment
BNP Paribas Securities Services manages the payment of the dividend, which is made through financial intermediaries using the Euroclear
France direct payment system.
The Bank of New York Mellon (101 Barclay Street 22 W, New York, NY 10286, USA) manages the payment of dividends to holders
of American Depositary Receipts (ADRs).
2.2.1. Dividend payment on stock certificates
TOTAL issued stock certificates (certificats représentatifs d’actions, “CRs”) as part of the public exchange offer for PetroFina shares. The CR
is a stock certificate provided for by French Law, issued by Euroclear France, intended to circulate exclusively outside of France, and which
may not be held by French residents. The CR is issued as a physical certificate, or registered in a custody account. It has the characteristics
of a bearer security. The CR is freely convertible from a physical certificate into a security registered on a custody account and conversely.
However, pursuant to the Belgian law of December 14, 2005 on the dematerialization of securities in Belgium, CRs may only be delivered
in the form of a dematerialized certificate once this law became effective on January 1, 2008. In addition, new CRs were issued following
TOTAL’s four-for-one stock split in 2006. ING Belgique is the bank handling the payment of any coupon detached from any outstanding CR.
No fees are applicable to the payment of coupons detached from CRs, except for any income or withholding taxes; the payment may be
received at the teller windows of the following institutions:
ING Belgique
BNP Paribas Fortis
KBC BANK N.V.
Avenue Marnix 24, 1000 Brussels, Belgium
Montagne du Parc 3, 1000 Brussels, Belgium
Avenue du Port 2, 1080 Brussels, Belgium
2.2.2. Strips-VVPR TOTAL
Strips-VVPR are securities that allow a shareholder residing in Belgium to reduce the Belgian withholding tax applicable to securities income
on the dividend paid by TOTAL from 25% to 21%. However, when the sum of all securities income which are subject to the 21% withholding
tax exceeds €20,020 per year, an additional 4% withholding tax is charged on the dividends subject to the 21% withholding tax. These
Strips-VVPR are traded separately from TOTAL shares and are listed on the semi-official market (marché semi-continu) of the Brussels stock
exchange. In compliance with the Belgian law of December 14, 2005 on the dematerialization of securities in Belgium, the Strips VVPR may
only be delivered in the form of a dematerialized certificate after this law became effective on January 1, 2008.
Strips-VVPR grant rights only if accompanied by TOTAL shares. There were 227,734,056 strips-VVPR TOTAL outstanding as of December 31, 2011.
2.3. Coupons
For the year ended
Ex-dividend
date
Payment
date
Expiration
date
Nature and amount
of the coupon
Net amount
(€)
Net amount
(€) (a)
2004 11/24/2004 11/24/2004 11/24/2009 Interim dividend (n°7) 2.4 0.6
05/24/2005 05/24/2005 05/24/2010 Remainder (n°8) 3 0.75
2005 11/24/2005 11/24/2005 11/24/2010 Interim dividend (n°9) 3 0.75
05/18/2006 (b) 05/18/2006 (b) 05/18/2011 Remainder (n°11) 3.48 0.87
2006 11/17/2006 11/17/2006 11/17/2011 Interim dividend (n°19) 0.87 0.87
05/18/2007 05/18/2007 05/18/2012 Remainder (n°20) 1 1
2007 11/16/2007 11/16/2007 11/16/2012 Interim dividend (n°21) 1 1
05/20/2008 05/20/2008 05/20/2013 Remainder (n°22) 1.07 1.07
2008 11/14/2008 11/19/2008 11/19/2013 Interim dividend (n°23) 1.14 1.14
05/19/2009 05/22/2009 05/22/2014 Remainder (n°24) 1.14 1.14
2009 11/13/2009 18/11/2009 18/11/2014 Interim dividend (n°25) 1.14 1.14
05/27/2010 06/01/2010 06/01/2015 Remainder (n°26) 1.14 1.14
2010 11/12/2010 11/17/2010 11/17/2015 Interim dividend (n°27) 1.14 1.14
05/23/2011 05/26/2011 05/26/2016 Remainder (n°28) 1.14 1.14
2011 (c) 09/19/2011 09/22/2011 09/22/2016 Interim dividend (n°29) 0.57 0.57
12/19/2011 12/22/2011 12/22/2016 Interim dividend (n°30) 0.57 0.57
03/19/2012 03/22/2012 03/22/2017 Interim dividend (n°31) 0.57 0.57
06/18/2012 06/21/2012 06/21/2017 Remainder (n°32) 0.57 0.57
(a) Net amounts adjusted to take into account the four-for-one stock split on May 18, 2006.
(b) In addition, on May 18, 2006, each TOTAL share was granted an allotment right for an Arkema share, with ten allotment rights entitling the holder to one Arkema share.
(c) A resolution will be submitted to the Shareholder’s Meeting on May 11, 2012 to pay a cash dividend of €2.28 per share for fiscal year 2011, including a remainder of €0.57 per share,
with an ex-dividend date on June 18, 2012 and a payment date on June 21, 2012.
Registration Document 2011. TOTAL
145
6
TOTAL and its shareholders
Share buybacks
3. Share buybacks
The Shareholders’ Meeting of May 13, 2011, after acknowledging
the Report of the Board of Directors, authorized the Board of
Directors, in accordance with the provisions of Article L. 225-209
of the French Commercial Code and of European Regulation
2273/2003 dated December 22, 2003, to buy and sell the
Company’s shares within the framework of a share buyback
program. The maximum purchase price was set at €70 per share.
The number of shares acquired may not exceed 10% of the
share capital. This authorization was granted for a period
of eighteen months and replaced the previous authorization
granted by the Shareholders’ Meeting of May 21, 2010.
A resolution will be submitted to the Shareholders’ Meeting on
May 11, 2012 to authorize trading in TOTAL shares through a share
buyback program performed in accordance with the provisions
of Article L. 225-209 of the French Commercial Code and of
European Regulation 2273/2003 dated December 22, 2003.
This program is described in paragraph 3.3 of this Chapter.
3.1. Share buybacks and cancellations in 2011
In 2011, TOTAL did not buy back any shares.
Percentage of share capital bought back (1)
2007
2008
2009
2010
2011
1.2%
1.0%
0.0%
0.0%
0.0%
3.2. Board’s report on share buybacks and sales
3.2.1. Share buybacks during 2011
In 2011, TOTAL did not buy back any shares.
3.2.2. Shares registered in the name
of the Company and its subsidiaries
as of December 31, 2011
For shares bought back to be allocated to Company or Group
employees pursuant to of the objectives referred to in Article 3 of
EC Regulation No. 2273/2003 of December 22, 2003, note that,
when such shares are held to cover call options that have expired
or restricted share grants that have not been awarded at the end
of the vesting period, they will be allocated to new TOTAL share
purchase options plans or restricted share grants that could be
approved by the Board of Directors.
As of December 31, 2011, the Company held 9,222,905 treasury
shares, representing 0.39% of TOTAL’s share capital. By law, the
voting rights and dividend rights of these shares are suspended.
After taking into account the shares held by Group subsidiaries
that are entitled to a dividend but deprived of voting rights, the total
number of TOTAL shares held by the Group as of December 31, 2011
was 109,554,173, representing 4.63% of TOTAL’s share capital,
comprised of, on the one hand, 9,222,905 treasury shares,
including 6,712,528 shares held to cover restricted share grants
and 2,510,377 shares to cover new share purchase option plans
or new restricted share grants and, on the other hand, 100,331,268
shares held by subsidiaries.
3.2.3. Sale of shares during 2011
2,933,506 TOTAL shares were sold in 2011 further to the final grant
of shares as part of the share grant plans.
3.2.4. Cancellation of Company shares
during 2009, 2010, 2011 and 2012
Pursuant to the authorization granted by the Shareholders’ Meeting
of May 11, 2007 to reduce the share capital by up to 10% by
canceling shares held by the Company during a 24-month period,
(1) Average share capital of year N = (share capital as of December 31, N-1+share capital as of December 31, N)/2. Excluding share buybacks related to the restricted shares granted
under the 2005, 2006, 2007 and 2008 plans.
146
TOTAL. Registration Document 2011
TOTAL and its shareholders 6
Share buybacks
the Board of Directors decided on July 30, 2009 to cancel
24,800,000 shares accounted for as long-term securities in the
parent company’s financial statements. This authorization will
no longer be valid from the date of the Shareholders’ Meeting held
to approve the financial statements for the year ended
December 31, 2011.
Based on 2,363,767,313 shares outstanding as of December 31,
2011, and until the end of the Shareholders’ Meeting called
to approve the accounts for the financial year ending on
December 31, 2011, the Company may cancel a maximum
of 236,376,731 shares up to and including December 31, 2011,
before reaching the cancellation threshold of 10% of share capital
canceled during a 24-month period.
3.2.5. Reallocation for other approved
purposes during fiscal year 2011
Shares purchased by the Company under the authorization granted
by the Shareholders’ Meeting of May 16, 2008, or under previous
authorizations, were not reallocated in 2011 to purposes other than
those initially specified at the time of purchase.
3.2.6. Conditions for the buyback
and use of derivative products
Between January 1, 2011 and February 29, 2012, the Company
did not use any derivative products on the financial markets as part
of the share buyback programs successively authorized by the
Shareholders’ Meeting on May 21, 2010 and the Shareholders’
Meeting on May 13, 2011.
3.2.7. Shares held in the name
of the Company and its subsidiaries
as of February 29, 2012
As of February 29, 2012, the Company held 9,221,513 treasury
shares, representing 0.39% of TOTAL’s share capital. By law, the
voting rights and dividend rights of these shares are suspended.
After taking into account the shares held by Group subsidiaries
that are entitled to a dividend but deprived of voting rights, the total
number of TOTAL shares held by the Group as of February 29,
2012 was 109,552,781, representing 4.63% of TOTAL’s share
capital, comprised of, on the one hand, 9,221,513 treasury
shares, including 6,711,356 shares held to cover restricted share
grants and 2,510,157 shares to cover new share purchase option
plans or new restricted share grants and, on the other hand,
100,331,268 shares held by subsidiaries.
Summary table of transactions completed by the Company involving its own shares from March 1, 2011 to February 29, 2012 (a):
Gross cumulated flows
Open positions as of February 29, 2012
Purchases
Sales
Open buy positions
Open sell positions
Number of shares - - Bought Forward Sold Forward
- - calls purchases calls sells
Number of shares - - - - - -
Average maximum maturity date - - - - - –
Average transaction price (€) - - - - - –
Average exercise price - - - - - –
Amounts (M€) - - - - - –
(a) In compliance with the applicable regulations as of February 29, 2012, the period indicated commenced the day after the date used as a reference for the publication of information
regarding the previous program (Registration Document 2010).
Moreover, 2,934,047 TOTAL shares were sold between March 1, 2011 and February 29, 2012 further to the final grant of shares as part of
the share grant plans.
As of February 29, 2012
Percentage of share capital held by TOTAL S.A. 0.39%
Number of shares held in portfolio (a) 9,221,513
Book value of portfolio (at purchase price) (M€) 364
Market value of the portfolio (M€) (b) 387
Percentage of capital held by the entire Group (c) 4.63%
Number of shares held in portfolio 109,552,781
Book value of portfolio (at purchase price) (M€) 3,390
Market value of the portfolio (M€) (b) 4,600
(a) TOTAL S.A. did not buy back any shares during the 3 business days preceding February 29, 2012. As a result, TOTAL S.A. owns all the shares held in portfolio as of this date.
(b) Based on a closing price of €41.99 per share as of February 29, 2012.
(c) TOTAL S.A., Total Nucléaire, Financière Valorgest, Sogapar and Fingestval.
Registration Document 2011. TOTAL
147
6 TOTAL and its shareholders
Share buybacks
3.3. 2012-2013 share buyback program
3.3.1. Description of the share
buyback program under Article 241-1
and following of the French Financial
Markets Authority (Autorité des marchés
financiers) General Regulation
Objectives of the share buyback program:
– reduce the Company’s capital through the cancellation of shares;
– honor the Company’s obligations related to securities convertible
or exchangeable into Company shares; and
– honor the Company’s obligations related to stock option
programs or other share grants to the Company’s management
and employees of the Company or Group Companies;
– deliver shares (by exchange payment or otherwise) in case
of external growth operations;
– animate the secondary market or the liquidity of the TOTAL
share as part of a liquidity agreement.
3.3.2. Legal framework
Implementation of the share buyback program, which falls within
the legal framework created by French Law No. 98-546 of July 2, 1998,
containing various economic and financial provisions and within the
framework of the provisions of European Regulation No. 2273/2003
of December 22, 2003 is subject to approval by TOTAL S.A.
Shareholders’ Meeting of May 11, 2012, through the fourth resolution,
which reads as follows:
“Upon presentation of the report by the Board of Directors, and
certain information appearing in the description of the program
prepared in accordance with Articles 241-1 and thereafter of
the General Regulation (règlement général) of the French Financial
Markets Authority (Autorité des marchés financiers) and pursuant to
the provisions of Article L. 225-209 of the French Commercial Code
and of Council Regulation No. 2273/2003 dated December 22,
2003, and voting under conditions for quorum and majority required
for ordinary general meetings, the shareholders hereby authorize
the Board of Directors to buy or sell shares of the company within
the framework of a share buyback program.
The purchase, sale or transfer of these shares can be completed
by any means on regulated markets, multilateral trading facilities
or over the counter, including the purchase or sale of blocks of
shares under the conditions authorized by the relevant market
authorities. Within this framework, this includes using any financial
derivative instrument traded on regulated markets, multilateral
trading facilities or over the counter and implementing option
strategies.
These transactions may be carried out at any time, except any
public offering periods applying to the Company’s share capital,
in accordance with the applicable rules and regulations.
The maximum purchase price is set at €70 per share.
Pursuant to Article L. 225-209 of the French Commercial Code,
the maximum number of shares that may be bought back under
this authorization may not exceed 10% of the total number of shares
outstanding, with this limit applying to an amount of the Company’s
share capital that will be adjusted, if necessary, to include transactions
affecting the share capital subsequent to this meeting; purchases
made by the Company cannot in any case result in the Company
holding more than 10% of the share capital, either directly or
indirectly through subsidiaries.
As of December 31,2011, of the 2,363,767,313 shares
outstanding at this date, the Company held 9,222,905 shares
directly and 100,331,268 shares indirectly through its subsidiaries,
for a total of 109,554,173 shares. Under these circumstances,
the maximum number of shares that the Company could buy
back is 126,822,558 shares, and the maximum amount that the
Company may spend to acquire such shares is €8,877,579,060.
The purpose of this share buyback program is to reduce
the number of shares outstanding or to allow the Company to fulfill
its engagements in connection with:
– convertible or exchangeable securities that may give holders
rights to receive shares upon conversion or exchange,
– share purchase option plans, employee shareholding plans,
company savings plans, or other share allocation programs
for management or employees of the Company or of Group
companies (in particular as part of restricted share grants).
Share buybacks could be motivated by a market practice
recognized by the French Financial Market Authority, knowingly:
– deliver shares (by exchange payment or otherwise) in case
of external growth, merger, spin-off or contribution operations,
without exceeding the limit stipulated in article L.225-209,
paragraph 6 of the French Commercial Code, in the merger,
spin-off or contribution operation; or
– animate the secondary market or the liquidity of the TOTAL share
by an investment service provider as part of a liquidity agreement
compliant with the ethical rules recognized by the French
Financial Market Authority.
This program may also be used by the Company to trade in its
own shares, either on or off the market, for any other purpose
that is authorized or any permitted market practice, or any other
purpose that may be authorized or any other market practice that
may be permitted under the applicable law or regulation. In case
of transactions other than the mentioned intended purpose,
the Company will inform its shareholders in a press release.
According to the intended purpose, the treasury shares that
are acquired by the Company through this program may be:
– canceled up to the maximum legal limit of 10% of the total
number of shares outstanding on the date of the operation
during each 24-month period;
– granted to the employees of the Group and to the management
of the Company or of other companies in the Group;
In case of a capital increase by incorporation of reserves and
restricted share grants, and in the case of a stock-split or a reverse-
stock-split, this maximum price shall be adjusted by applying the
ratio of the number of shares outstanding before the transaction to
the number of shares outstanding after the transaction.
– delivered to the holders of Company’s share purchase options
having exercised such options;
– sold to employees, either directly or through the intermediary
of Company savings plans; or
148
TOTAL. Registration Document 2011
TOTAL and its shareholders 6
Share buybacks
– delivered to the holders of securities that grant such rights
to receive such shares, either through redemption, conversion,
exchange, presentation of a warrant or in any other manner;
– used in any other manner that is consistent with the purpose
stated in this resolution.
While they are held by the Company, such shares will be deprived
of voting rights and dividend rights.
This authorization is granted for an 18-month period from the date
of this meeting.
The Board of Directors is hereby granted full authority, with the right
to delegate such authority, to undertake all actions necessary or
desirable to carry out the program or programs authorized by this
resolution. This resolution renders ineffective, up to unused portion,
the fifth resolution of the Shareholders’ Meeting held on
May 13, 2011.”
The Shareholders’ Meeting of May 11, 2007 had also authorized
the Board of Directors to reduce the capital by cancellation of
shares up to a maximum of 10% of the share capital over a period
of twenty-four months. As this authorization is valid until May 11, 2012
only, it is subject to the new approval of the TOTAL S.A.
Shareholders’ Meeting of May 11, 2012, through the twentieth
resolution, which reads as follows:
“Upon presentation of the report of the Board of Directors and
the auditors’ special report, and ruling under conditions for quorum
and majority required for extraordinary general meetings, the
shareholders hereby authorize the Board of Directors, in
accordance with Article L. 225-209 and following of the French
Commercial Code and Article L. 225-213 of the same Code,
to reduce the company’s capital on one or more occasions by
canceling shares that the Company holds within the legal limits.
The maximum number of shares that may be cancelled under this
authorization may not exceed 10% of the total number of shares
outstanding, during a 24-month period, with this limit applying
to a number of shares that will be adjusted, if necessary, to include
transactions affecting the share capital subsequent to this meeting.
The shareholders hereby grant all powers to the Board of Directors,
with the option to sub-delegate such powers under conditions
provided for by law, to carry out such capital reduction or
reductions based on its decisions alone, in 24-month periods and
within the limit of 10% of the total number of shares outstanding as
of the transaction date, to decide on the conditions of the capital
reduction operations and confirm their execution, and to apply
the difference between the buyback value of the securities and their
par value against any reserves or premiums, to amend the by-laws
accordingly, and to complete all necessary formalities related
thereto.
This authorization is granted for five years will no longer be valid
from the date of the Shareholders’ Meeting held to approve
the financial statements for the year ending December 31, 2016.”
3.3.3. Conditions
Maximum share capital to be purchased and maximum funds
allocated to the transaction
The maximum number of shares that may be purchased under
the authorization proposed to the Shareholders’ Meeting of
May 11, 2012, may not exceed 10% of the total number of shares
outstanding, with this limit applying to an amount of the Company’s
share capital that will be adjusted, if necessary, to include
transactions affecting the share capital subsequent to this meeting;
purchases made by the Company cannot in any case result in the
Company holding more than 10% of the share capital, either
directly or indirectly through subsidiaries.
Before any share cancellation under the authorization given by
the Shareholders’ Meeting of May 11, 2007, based on the number
of shares outstanding as of December 31, 2011 (2,363,767,313
shares), and given the 109,554,173 shares held by the Group
as of February 29, 2012, representing 4.63% of the share capital,
the maximum number of shares that may be purchased would
be 126,822,558 shares, representing a theoretical maximum
investment of €8,877,579,060 based on the maximum purchase
price of €70.
Conditions for buybacks
Such shares may be bought back by any means on regulated
markets, multilateral trading facilities or over the counter, including
the purchase or sale of blocks of shares under the conditions
authorized by the relevant market authorities. Within this
framework, this includes using any financial derivative instrument
traded on a regulated market, or over the counter and
implementing option strategies, with the Company taking
measures, however, to avoid increasing the volatility of its stock.
The portion of the program realized through the purchase of blocks
of shares will not be subject to quota allocation, up to the limit
set by this resolution. These shares may be bought back at any
time in accordance with current regulation, except any public
offering periods applying to the Company’s share capital.
Duration and schedule of the share buyback program
In accordance with the fourth resolution, which will be subject
to approval of the Shareholders’ Meeting of May 11, 2012, the
share buyback program may be implemented over an 18-month
period following the date of this meeting, expiring therefore on
November 11, 2013.
Transactions carried out under the previous program
Transactions carried out under the previous program are listed
in the special report of the Board of Directors on share buybacks
(see paragraph 3.2 of this Chapter).
Registration Document 2011. TOTAL
149
6 TOTAL and its shareholders
Shareholders
4. Shareholders
4.1. Relationship between TOTAL and the French State
Since the decree of December 13, 1993 providing for a unique Elf Aquitaine share to the French State was repealed on October 3, 2002,
no agreement governing shareholding relationships between TOTAL (or its subsidiary Elf Aquitaine) and the French State has been implemented.
4.2. Merger of Total with PetroFina in 1999
In December, 1998, Total (1) signed an in-kind contribution
agreement with Electrafina, Investor, Tractebel, Electrabel and
AG 1824 (the Contributors), under which the Contributors
exchanged their PetroFina shares. Total then launched in 1999
a public exchange offer for the remaining PetroFina shares
not in its possession, at the same exchange ratio as the previous
one. Following this public offer, Total held 98.8% of Petrofina’s
share capital.
In October 2000, TotalFinaElf launched, at the same exchange
ratio as the previous one, a complementary public exchange offer
for the PetroFina shares not yet held by the Company. As of
December 31, 2000, TotalFinaElf held 99.6% of PetroFina’s share
capital. Then in April 2001, the Extraordinary Shareholders’ Meeting
of Total Chimie approved TotalFinaElf’s contribution to Total Chimie
(a 100% subsidiary of TOTAL S.A.) of the entire equity stake
held by the Company in PetroFina. Finally in September 2001,
the Board of Directors of Total Chimie decided to launch
a squeeze-out procedure for the 90,129 PetroFina shares not yet
held. Since the end of the squeeze-out, all shares of PetroFina
have been held by Total Chimie.
In May 2003, minority PetroFina shareholders, holding
4,938 shares, brought a complaint against Total Chimie S.A.
and PetroFina S.A. before the Commercial Court of Brussels
contesting, in particular, the price offered by Total Chimie in the
squeeze-out procedure. In June 2006, TOTAL S.A became party
to this lawsuit. At the end of 2011, these minority shareholders
voluntarily withdrew their lawsuit, thereby definitively terminating
the legal proceedings they had initiated.
4.3. Merger of TotalFina with Elf Aquitaine
In 1999, the Boards of Directors of TotalFina and Elf Aquitaine
recommended to their shareholders that the two companies merge
through a public exchange offer. TotalFina acquired 254,345,078
shares of Elf Aquitaine in exchange for 371,735,114 new TotalFina
shares. In 2000, the Board of Directors launched an offer for the
remaining Elf Aquitaine shares not yet held by the Company. Upon
completion of this offer, TotalFinaElf acquired 10,828,326 shares
of Elf Aquitaine in exchange for 14,437,768 new TotalFinaElf shares.
Pursuant to the public tender offer followed by a squeeze out
announced on March 24, 2010, TOTAL S.A. now owns 100%
of the securities issued by Elf Aquitaine.
The offer, which took place from April 16 to 29, 2010, at the price
of €305 per share (including the remaining 2009 dividend), targeted
all of the Elf Aquitaine shares that were not held directly
or indirectly by TOTAL S.A., representing 1,468,725 Elf Aquitaine
shares (0.52% of the share capital and 0.27% of the company’s
voting rights).
The squeeze out procedure was implemented on April 30, 2010
to acquire all the Elf Aquitaine shares targeted by the offer
and which had not been tendered to the offer by the minority
shareholders upon payment of a compensation per share
set at the price of the offer, i.e., €305 per Elf Aquitaine share
(including the remaining 2009 dividend).
Elf Aquitaine shares were delisted from Euronext Paris
on April 30, 2010 (AMF notice No. 210C0376).
(1) The name “Total” was changed to “TotalFina S.A.” on June, 14 1999. The name “TotalFina S.A” was then changed to “TotalFinaElf S.A” by the Shareholders’ Meeting of March 22, 2000.
It was then changed to “TOTAL S.A.” by the Shareholders’ Meeting of May 6, 2003.
150
TOTAL. Registration Document 2011
TOTAL and its shareholders 6
Shareholders
4.4. Major shareholders
4.4.1. Changes in major shareholders’ holdings
The major shareholders of TOTAL as of December 31, 2011, 2010 and 2009 are set forth in the table below:
As of December 31
% of share
capital
% of voting
rights
2011
% of
theoretical
voting rights (a)
2010
2009
% of share
capital
% of voting
rights
% of share
capital
% of voting
rights
Groupe Bruxelles Lambert (b) (c) 4.0 4.0 3.7 4.0 4.0 4.0 4.0
Compagnie Nationale à Portefeuille (b) (c) 1.5 1.6 1.4 1.6 1.6 1.4 1.4
BNP Paribas (b) 0.2 0.2 0.1 0.2 0.2 0.2 0.2
Group employees (b) (d) 4.4 8.0 7.4 4.0 7.7 3.9 7.5
Other registered shareholders (non-Group) 1.7 2.8 2.6 1.4 2.5 1.4 2.4
Treasury shares 4.6 - 8.1 4.8 - 4.9 -
Of which TOTAL S.A. 0.4 - 0.4 0.5 - 0.6 -
Of which Total Nucléaire 0.1 - 0.2 0.1 - 0.1 -
Of which subsidiaries of Elf Aquitaine 4.2 - 7.6 4.2 - 4.2 -
Other bearer shareholders 83.6 83.5 76.7 84.0 84.0 84.2 84.5
of which holders of ADS (e) 8.7 8.7 8.0 8.0 8.0 7.5 7.6
(a) Pursuant to article 223-11 of the AMF General Regulation, the number of theoretical voting rights is calculated on the basis of all outstanding shares to which voting rights are attached,
including treasury shares that are deprived of voting rights.
(b) Shareholders with an executive officer (or a representative of employees) or director serving as a director of TOTAL S.A.
(c) Groupe Bruxelles Lambert is a company controlled jointly by the Desmarais family and Frère-Bourgeois S.A., and for the latter mainly through its direct and indirect interest in
Compagnie Nationale à Portefeuille. In addition, Groupe Bruxelles Lambert and Compagnie Nationale à Portefeuille declared their acting in concert.
(d) Based on the definition of employee shareholding pursuant to Article L. 225-102 of the French Commercial Code.
(e) American Depositary Shares listed on the New York Stock Exchange.
As of December 31, 2011, the holdings of the major shareholders were calculated based on 2,363,767,313 shares,
representing 2,368,716,634 voting rights exercisable at Shareholders’ Meetings or 2,578,602,075 theoretical voting rights (1) including:
– 9,222,905 voting rights attached to the 9,222,905 TOTAL shares held by TOTAL S.A. that are deprived of voting rights; and
– 200,662,536 voting rights attached to the 100,331,268 TOTAL shares held by TOTAL S.A. subsidiaries that cannot be exercised
at Shareholders’ Meetings.
For prior years, the holdings of the major shareholders were established on the basis of 2,349,640,931 shares, to which were attached
2,350,274,592 voting rights that could be exercised at the Shareholders’ Meeting, as of December 31, 2010, and of 2,348,422,884 shares
to which were attached 2,339,384,550 voting rights that could be exercised at the Shareholders’ Meeting, as of December 31, 2009.
4.4.2. Identification of the holders
of bearer shares
In accordance with Article 9 of its by-laws, the Company is authorized,
to the extent permitted under applicable law, to identify the holders
of securities that grant immediate or future voting rights at the
Company’s Shareholders’ Meetings.
4.4.3. Temporary transfer of securities
Pursuant to legal obligations, any legal entity or individual (with the
exception of those described in paragraph IV-3° of Article L. 233-7
of the French Commercial Code) holding alone or together a
number of shares representing more than 0.5% of the Company’s
voting rights pursuant to one or several temporary transfers
or similar operations as described by Article L. 225-126 of the
French Commercial Code is required to inform the Company and
the French Financial Markets Authority of the number of shares
temporarily held no later than the third business day preceding
the shareholders’ meeting at midnight.
Declarations are to be e-mailed to the Company at:
holding.df-shareholdingnotification@total.com
Failing to declare such information, any share bought under any
of the above described temporary transfer operations shall be
deprived of voting rights at the relevant Shareholders’ Meeting and
at any Shareholders’ Meeting that would be held until such shares
are transferred again or returned.
(1) Pursuant to Article 223-11 of the AMF General Regulation, the number of theoretical voting rights is calculated on the basis of all outstanding shares, including those shares held by the Group
that are deprived of voting rights.
Registration Document 2011. TOTAL
151
6 TOTAL and its shareholders
Shareholders
4.4.4. Thresholds notifications
4.4.6. Holdings above the legal thresholds
In addition to the legal obligation to inform the Company and the
French Financial Markets Authority within four business days when
thresholds representing 5%, 10%, 15%, 20%, 25%, 30%, 1/3,
50%, 2/3, 90% or 95% of the share capital or voting rights (1)
are crossed (Article L. 233-7 of the French Commercial Code),
any individual or entity who directly or indirectly comes to hold
a percentage of the share capital, voting rights or rights giving
future access to the share capital of the Company which is equal
to or greater than 1%, or a multiple of this percentage, is required
to notify the Company within fifteen days by registered mail with
return receipt requested, and declare the number of securities held.
In case the shares above these thresholds are not declared, any
undeclared shares held in excess of the threshold and may
be deprived of voting rights at future Shareholders’ Meetings if, at
that meeting, the failure to make a declaration is acknowledged and
if one or more shareholders holding collectively at least 3% of the
Company’s share capital or voting rights so request at that meeting.
All individuals and entities are also required to notify the Company
in due form and within the time limits stated above when their direct
or indirect holdings fall below each of the aforementioned
thresholds.
Declarations are to be sent to the Vice President of the Investor
Relations department in Paris (contact details in paragraph 6.8
of this Chapter).
4.4.5. Legal threshold notifications in 2011
Société Générale reported that it had passed:
– on May 6, 2011, above the thresholds of 5% of the share capital
and the voting rights of the Company, and that it held after
crossing the thresholds 6.86% of the share capital and 6.29%
of the voting rights of the Company;
In accordance with Article L. 233-13 of the French Commercial
Code, only one shareholder, Compagnie Nationale à Portefeuille
(CNP) and Groupe Bruxelles Lambert (GBL), acting in concert,
holds 5% or more of TOTAL’s share capital at year-end 2011(2).
In addition, two known shareholders held 5% or more of
the voting rights exercisable at TOTAL Shareholders’ Meetings
at year-end 2011:
– CNP jointly with GBL
In the AMF notice No. 209C1156 dated September 2, 2009,
CNP and GBL acting in concert declared that they held more
than the threshold of 5% of the voting rights of TOTAL as of
August 25, 2009 and held 127,149,464 TOTAL shares
representing 127,745,604 voting rights, i.e. 5.42% of the share
capital and 5.0009% of the theoretical voting rights (3) (based
on a share capital of 2,347,601,812 shares representing
2,554,431,468 voting rights). To the Company’s knowledge,
CNP, jointly with GBL, held, as of December 31, 2011, 5.52%
of the share capital representing 5.53% of the voting rights
exercisable at Shareholders’ Meetings and 5.08% of the
theoretical voting rights (3).
– The collective investment fund
(fonds commun de placement)
“TOTAL ACTIONNARIAT FRANCE”
To the Company’s knowledge, the collective investment fund
(fonds commun de placement) “TOTAL ACTIONNARIAT
FRANCE” held, as of December 31, 2011, 3.33% of the share
capital representing 6.12% of the voting rights exercisable
at a Shareholders’ Meeting and 5.62% of the theoretical
voting rights (3).
4.4.7. Shareholders’ agreements
– on May 25, 2011, below the thresholds of 5% of the share
TOTAL is not aware of any agreements among its shareholders.
capital and the voting rights of the Company, and that it held
after crossing the thresholds 4.92% of the share capital
and 4.50% of the voting rights of the Company.
4.5. Treasury shares
As of December 31, 2011, the Company held 109,554,173 TOTAL
shares either directly or through its indirect subsidiaries, which
represented 4.63% of the share capital, as of this date. By law,
these shares are also deprived of voting rights.
Refer to Chapter 8 paragraph 1.5 of this registration document for
more information.
4.5.1. TOTAL shares held directly
by the Company (treasury shares)
The Company held 9,222,905 treasury shares as of December 31,
2011, representing 0.39% of the share capital, as of that date.
4.5.2. TOTAL shares held by Group companies
As of December 31, 2011, Total Nucléaire, a Group company
wholly-owned indirectly by TOTAL held 2,023,672 TOTAL shares.
As of December 31, 2011, Financière Valorgest, Sogapar and
Fingestval, indirect subsidiaries of Elf Aquitaine, held respectively
22,203,704, 4,104,000 and 71,999,892 TOTAL shares,
representing a total of 98,307,596 TOTAL shares. As of
December 31, 2011, the Company held through its indirect
subsidiaries, 4.24% of the share capital.
(1) Pursuant to Article 223-11 of the AMF General Regulation, the number of voting rights is calculated on the basis of all outstanding shares, including those shares held by the Group that are
deprived of voting rights.
(2) AMF notice No. 209C1156 dated September 2, 2009
(3) Pursuant to Article 223-11 of the AMF General Regulation, the number of theoretical voting rights is calculated on the basis of all outstanding shares, including those shares held by the Group
that are deprived of voting rights.
152
TOTAL. Registration Document 2011
TOTAL and its shareholders 6
Shareholders
4.6. Shares held by members of the administrative and management bodies
This information appears in points 1 and 6 of Chapter 5.
4.7. Employee shareholding
This information appears in paragraph 6.2 of Chapter 5 and paragraph 3.1 of Chapter 8.
4.8. Shareholding structure
Estimates as of November 30, 2011, excluding treasury shares.
4.8.1. By shareholder type
4.8.2. By region
Group employees (a) 4.6%
Individual shareholders 8.4%
Institutional shareholders 87.0%
of which
21.2% in France
10.5% in the United Kingdom
21.5% in Rest of Europe
26.0% in North America
7.8% in Rest of World
France 33%
United Kingdom 10%
Rest of Europe 22%
North America 27%
Rest of World 8%
(a) Based on the definition of employee shareholding pursuant
to Article L. 225-102 of the French Commercial code
The number of French individual TOTAL shareholders is estimated at approximately 520,000.
4.9. Regulated agreements and undertakings and related party transactions
4.9.1. Regulated agreements
and undertakings
The special report of the statutory auditors of TOTAL S.A. on
regulated agreements and undertakings in accordance with Articles
L. 225-38 and following of the French Commercial Code for fiscal
year 2011 appears point 1 of Chapter 11.
4.9.2. Related party transactions
Details of transactions with related parties as required by the
regulations adopted under EC regulation No. 1606/2002, entered
into by the Group Companies during fiscal years 2009, 2010
or 2011, appear in Note 24 to the Consolidated Financial
Statements (see point 7, Chapter 9).
These transactions primarily concern equity affiliates and
non-consolidated companies in which TOTAL exercises
significant influence.
Registration Document 2011. TOTAL
153
6 TOTAL and its shareholders
Information for overseas shareholders
5. Information for overseas shareholders
5.1. United States holders of ADRs
Information intended for U.S. holders of TOTAL’s American Depositary Shares (ADSs), represented by American Depositary Receipts (ADRs),
is provided in the Form 20-F filed by TOTAL S.A. with the United States Securities and Exchange Commission for the year ended
December 31, 2011
5.2. Non-resident shareholders (other than U.S. Shareholders)
In addition to Euronext Paris, TOTAL’s shares have been listed on the London Stock Exchange since 1973 and on the Brussels stock
exchange since 1999.
5.3. Dividends
Dividends paid to non-French resident shareholders are generally
subject to French withholding tax at a rate of 30%.
This withholding tax is reduced to 21% with respect to dividends
received as from January 1, 2012 by individuals who are residents
within the European Union, in Iceland and in Norway.
Dividends paid to not-for-profit organizations that are residents
of the European Union, Iceland or Norway are generally subject
to the French withholding tax rate of 15% under certain conditions
provided for by an Administrative guideline B.O.I 4 H-2-10.
the dividends to be received by them, provided that they provide
the financial institution managing their securities with a certificate of
residence conforming to the model attached to the Administrative
Guidelines. The instant application of the 15% withholding tax rate
will be available only if the certificate of residence is sent to the
financial institution managing their securities before the dividend
payment date. Furthermore, each financial institution managing the
eligible Holders’ securities must also send to the French paying
agent the figure of the total amount of dividends eligible for
the reduced withholding tax rate before the dividend payment date.
Besides, future court cases may take position on whether or not
the application of French withholding tax on French-source-dividends
paid to non French investment/pension funds is contrary to the EU
principle of freedom of movement of capital.
This summary does not address the specific withholding tax
regime at a rate of 55% applicable to dividends transferred in so
called “Non Cooperative Countries and Territories” or NCCTs within
the meaning of the new Section 238-0A of the French Tax Code.
A list of NCCTs is established annually and updated by the
French tax authorities.
According to many tax treaties signed between France and
other countries (“Tax Treaties”), the rate of French withholding tax
is reduced in the case of dividends paid to a beneficial owner of the
dividend that is a resident of one of these countries as defined by
the Tax Treaties, provided that certain requirements are satisfied
(“Eligible Holder”).
Countries with which France has signed a Tax Treaty providing
for a reduction of the French withholding tax rate on dividends
to 15% include Austria, Belgium, Canada, Germany, Ireland, Italy,
Japan, Luxembourg, Norway, the Netherlands, Singapore, South
Africa, Spain, Switzerland, and the United Kingdom (this is not
an exhaustive list).
Administrative Guidelines issued by the French Tax Authorities set
forth the conditions under which the reduced French withholding
tax rate of 15% may be available. The immediate application of the
reduced 15% rate is available only to Eligible Holders who may
benefit from the so-called “simplified procedure” and are residents
of a country with which France has concluded a Tax Treaty that
provides for a reduction of the withholding tax.
Under the “simplified procedure”, such Eligible Holders may claim
the immediate application of the reduced 15% withholding tax on
Where the foreign Eligible Holder’s identity and tax residence
are known by the French paying agent, the latter may release
such foreign Eligible Holder from providing the financial institution
managing its securities with the above-mentioned certificate of
residence, and apply the 15% withholding tax rate to dividends
it pays to such foreign Eligible Holder.
The “simplified procedure” is not applicable to Swiss corporate
holders and Singapore resident holders.
For an Eligible Holder that is not entitled to the so-called “simplified
procedure”, the 30% French withholding tax will be levied at the
time the dividends are paid. Such Eligible Holder may, however,
be entitled to a refund of the withholding tax in excess of the 15%
rate under the standard procedure, as opposed to the “simplified
procedure”, provided that the Eligible Holder provides the French
paying agent with an application for refund on a specific forms
(Forms N° 5000 and 5001 or any other relevant form to be issued
by the French tax authorities) before December 31 of the second
year following the date of payment of the withholding tax at the
30% rate. Any French withholding tax refund is generally expected
to be paid within 12 months from the filing of the abovementioned
forms. However, it will not be paid before January 15 of the year
following the year in which the dividend was paid. Copies of the
French forms mentioned above are, in principle, available from the
French non-resident tax office, at the following internet address:
www.impots.gouv.fr (click on “Recherche de formulaires”).
The foreign taxation of dividends varies from one country to another
according to their respective tax legislation.
In most countries, the gross amount of dividend is generally
included in the recipient’s taxable income. Subject to certain
conditions and limitations, French withholding taxes on dividends
will be eligible for credit against the holder’s income tax liability.
154
TOTAL. Registration Document 2011
TOTAL and its shareholders 6
Investor Relations
However, there are certain exceptions. For instance, in Belgium,
a so-called précompte mobilier of 15% is applicable to the net
dividends received by individual shareholders.
Taxation of Disposition of Shares
In general, a non-French resident Holder will not be subject to
French tax on any capital gain from the sale of shares in a French
company unless the shares form part of a business property of
a permanent establishment or a fixed base that the non-French
residents has in France.
A Holder may recognize capital gain or loss upon the sale of shares
in its country of tax residence.
A French transfer tax assessed on the higher of the purchase price
and the market value of the shares applies to certain transfer of
shares in French companies. However, the transfer tax does not
apply to transfer of shares of publicly traded shares such as shares
in TOTAL provided that the transfer is not evidenced by a written
agreement.
But, on 8 February 2012, a proposal for the Amending Finance Law
for 2012 (Projet de Loi de Finances rectificative pour 2012, PLFR),
was adopted by the French Council of Ministers and will be
submitted to the Parliament. One key element of this proposal is
the introduction of a financial transaction tax on the acquisition
of shares of publicly traded companies established in France whose
capital is over 1 billion euros, which would be taxable at a rate
of 0,1% on the value of the shares. This new tax will be applicable
as from 1 August 2012, if the proposal is adopted.
Because the foregoing is a general summary, holders are advised
to consult their own tax advisors in order to determine the effect of
the Tax Treaties and the applicable procedures as well as their income
tax and more generally the tax consequences of the ownership
of shares applicable in their particular tax situations.
6. Investor Relations
6.1. Communication policy
In addition to the French version of its Registration Document filed
each year with the French Financial Markets Authority (Autorité des
marchés financiers), the Group provides information regularly on its
operations on reports and newsletters as well as its website
www.total.com and through press releases for significant news. The
Group’s presentations on its results and outlook are also available
on its website. This English version of the Document de référence
(Registration Document) is provided for information purposes only.
The Company also files an annual report on Form 20-F, in English,
with the United States Securities and Exchange Commission (SEC)
(see paragraph 3.4 in Chapter 8).
The Group holds regular information sessions and participates
in conferences for shareholders, investors and financial analysts,
both in France and abroad.
6.2. Relationships with institutional investors and financial analysts
Members of the Group’s Management regularly meet with
portfolio managers and financial analysts in the leading financial
centers throughout the world (Europe, North America, Asia and
the Middle East).
The first series of meetings are held annually in the first quarter,
after publication of the results for the lapsed fiscal year. The second
set of meetings takes place in the third quarter of the year.
Material from those meetings is available on the Group’s website
(www.total.com, heading Investors/Presentations).
As in previous years, three phone conferences were led by the
Group’s Chief Financial Officer to discuss results for the first,
second and third quarters of the year. These conferences are
available on the Group’s website (www.total.com, heading
Investors/Results).
In 2011, about 600 meetings bringing together institutional
investors and analysts were organized by the Group.
The Group maintains an active dialogue with shareholders on
issues related to Corporate Social Responsibility (CSR) through:
– annual publication of the Society and Environment report.
– with a dedicated team, the Investor Relations department is
available to investors and CSR analysts and provides responses
to their questions about the Group’s CSR (ethics, governance,
safety, health and environmental protection, contribution to the
development of local communities, future energies, measures to
combat climate change).
– meetings focused on these issues are organized in France and
worldwide. Nearly sixty meetings were held in 2011. To better
meet the investors’ expectations, the Group also organized its
second CSR day for the financial community, focusing on the
incorporation of CSR in the Group’s business model. This event,
which took place on June 24, 2011 in Paris, provided an
opportunity for investors to exchange opinions with TOTAL’s
representatives, who included Christophe de Margerie (Chairman
and Chief Executive Officer), Patrick de La Chevardière (Chief
Financial Officer), Philippe Boisseau (President of Gas and
Power) and Manoelle Lepoutre (Vice President Sustainable
Development and the Environment). Issues addressed included
water management, major accident prevention and the
acceptability of the Group’s activities.
For the first time, this year’s Registration Document contains a new
Chapter dedicated to CSR (see Chapter 12).
Registration Document 2011. TOTAL
155
6 TOTAL and its shareholders
Investor Relations
6.3. A quality relationship serving Individual Shareholders
– The Consultative Shareholders Committee, comprised of twelve
members, held four meetings in 2011:
– in March, during a meeting with Mr. Christophe de Margerie,
Chairman and Chief Executive Officer of TOTAL;
– in May, following the Shareholders’ Meeting;
– in September, on the occasion of a visit to the Total
Petrochemicals research center in Feluy, Belgium;
– in November, with the Group Chief Financial Officer,
at Paris La Défense.
During these meetings, the Consultative Shareholders Committee
gives its opinion on various components of the communications
directed towards individual shareholders, including the
Shareholders’ Newsletter, the program of the Shareholders’ Circle,
the webzine and the electronic version of the Shareholders’
notebook.
In 2011, the Consultative Shareholders Committee brought its
contribution to different projects concerning individual shareholders,
such as the preparation of the annual Shareholders’ Meeting
and the Actionaria trade show. The Consultative Shareholders
Committee contributed to the setting up of the e-notice and
the e-vote for the Shareholders’ Meeting and voiced its opinion
on the form of the notice. The Committee also gave its feedback
on the Shareholders’ Meeting. It was also consulted on the planned
new format of the Consultative Shareholders Committee, which
will be introduced from April 2012. The format of the committee
is to be changed after twenty years, by becoming broader and
even more interactive.
The new Shareholders’ Circle organized twenty-five events in
2011, to which more than 2,800 individual shareholders belonging
to the Circle were invited, 1,000 more than in 2010. They visited
industrial facilities, cultural and natural sites supported by the Total
Foundation and attended seminars dedicated to better
understanding the Group’s different businesses. Finally, they
attended cultural events within the framework of the Total
Foundation sponsorship policy.
In this context, almost 14,000 individual shareholders met with
Group representatives in 2011, 3,000 more than in 2010.
TOTAL’s Individual Shareholder Relations Department is the only
ISO 9001 version 2008 certified-shareholder service in France for
its communication policy with individual shareholders. This certification
was issued by AFNOR following a thorough audit of the various
processes implemented in terms of communication with individual
shareholders.
Follow-up audits are conducted on a yearly basis. This certification
of TOTAL’s Individual Shareholder Relations Department
demonstrates the Group’s strong commitment to providing
individual shareholders with valuable financial information over
the long term.
As part of this quality assurance certification, three satisfaction
surveys have been made available on the Group’s website
(www.total.com, heading Individual Shareholders/Individual
Shareholder Relations).
For the second year in succession row, the Individual Shareholder
Relations Department won one of the Boursoscan awards,
organized by Boursorama. After winning the prize for best financial
communication in 2010, TOTAL received the Shareholders’ award
in 2011.
In 2011, TOTAL also continued to organize meetings and
information sessions with individual shareholders, in particular
as part of different events:
– The Shareholders’ Meeting, held on May 13, 2011,
gathered 4,000 attendees at the Palais des Congrès in
Paris. This meeting was broadcast live and was later available
on the Group’s website. Notice of the meeting is sent to all
holders of 250 or more bearer shares and to all registered
shareholders. Registered shareholders were able to vote over
the Internet for the first time.
– On May 25, 2011, in Lyon, the Group’s Chief Financial Officer
presented the Group’s results, strategy and outlook,
and answered shareholders’ questions.
– At the Actionaria Trade Show, held in the Palais des Congrès
in Paris in November 2011, almost 3,500 people visited TOTAL’s
stand, which presented the Group’s activity in the field of solar
energy. The trade show provided shareholders with an
opportunity to meet the Group representatives present on
the stand and to attend conferences.
– 2011 saw five other meetings with individual shareholders in
Antwerp (Belgium), and in Aix-en-Provence, Annecy, Strasbourg
and Nantes (France). These meetings were attended by
almost 3,000 people. In 2012, meetings are planned in Antwerp,
Caen, Nice, Nancy and Bordeaux.
156
TOTAL. Registration Document 2011
TOTAL and its shareholders 6
Investor Relations
6.4. Registered shareholding
TOTAL shares, which are generally bearer instruments, can be registered shares. In this case, shareholders are identified by TOTAL S.A.,
in its capacity as the issuer, or by its agent, BNP Paribas Securities Services, which is responsible for keeping the register of the registered
shares of the shareholders.
6.4.1. Registration
There are two forms of registration:
– the possibility of receiving notice of the Shareholders’ Meeting
over the Internet and voting over the Internet before the
Meeting takes place;
– administered registered shares: shares are registered with
– the ability to join the TOTAL Shareholders’ Circle by holding
TOTAL through BNP Paribas Securities Services, but the holder’s
financial intermediary continues to administer them with regards
to sales, purchases, coupons, shareholders’ meeting notices, etc.
– pure registered shares: TOTAL holds and directly administers
shares on behalf of the holder through BNP Paribas Securities
Services, which administers sales, purchases, coupons,
shareholders’ meeting notices, etc., so that the shareholder
does not need to appoint a financial intermediary. This form of
registration is not easily compatible with the registration of shares
in a French share savings plan (PEA), given the administrative
procedures in place.
6.4.2. Main advantages of registered shares
The advantages of registered shares include:
– double voting rights if the shares are held continuously for
two successive years (see paragraph 2.4.1 of Chapter 8);
– a specific toll-free number for all contacts with BNP Paribas
Securities Services (a toll-free call within France from a
landline): 0 800 117 000 or +33 1 40 14 80 61 (from outside
France); from Monday to Friday (working days), 8:45 a.m.
- 6:00 p.m., GMT+1 (fax: +33 1 55 77 34 17);
– the shareholder receives, at home, all information published
by the Group for its shareholders;
at least fifty shares.
The advantages of pure registered shares, in addition to those
of administered registered shares, include:
– no custodial fees;
– easier placement of market orders (1) (phone, mail, fax, internet);
– brokerage fees of 0.20% (before tax) based on the amount
of the transaction, with no minimum charge and up to €1,000
per transaction;
– possibility to check share holdings on the internet.
To convert TOTAL shares into pure registered shares, shareholders
are required to fill out a form, which can be obtained upon request
from the Individual Shareholder Relations Department, and send it
to his/her financial intermediary. Once BNP Paribas Securities
Services receives the shares on a registered account, a certificate
of account registration is sent and the following are requested to be
sent to it:
– a bank account number (or a postal account or savings account
number) for payment of dividends; and
– a market service agreement to facilitate trading TOTAL shares
on the stock exchange.
6.5. Individual Shareholders Department Contacts
For any information regarding the conversion of bearer to registered
shares, membership in the Shareholders’ Circle or any other
general information, individual shareholders may contact:
TOTAL S.A.
Individual Shareholder Relations Department
Tour Coupole
2, place Jean Millier
Arche Nord Coupole/Regnault
92078 Paris La Défense Cedex, France
Phone From France: 0 800 039 039
(toll-free number from a landline in France)
Outside France: +33 1 47 44 24 02
From Monday to Friday, 9:00 a.m. to 12:30 p.m.
and 1:30 p.m. to 5:30 p.m. (GMT+1)
Fax From France: 01 47 44 20 14
Outside France: +33 1 47 44 20 14
E-mail from the contact form available at www.total.com,
heading Shareholders
Contact Jean-Marie Rossini
(Head of Individual Shareholders Relations Department)
(1) Subject to having entered into a brokerage services contract, which is free of charge.
Registration Document 2011. TOTAL
157
6 TOTAL and its shareholders
Investor Relations
6.6. 2012 Schedule
February 10 Results for the fourth quarter and full year 2011
July 27 Results for the second quarter
and outlook
and the first half 2012
March 19 Ex-dividend date for the 2011 third interim
September 24 Ex-dividend date for the 2012 first interim dividend (2)
dividend
April 21 VFB-Happening, Antwerp (Belgium)
September 24 Investor Day - London
October 16 Meeting with individual shareholders in Nancy
April 27 Results for the first quarter 2012
(France)
May 11 2012 Shareholders’ Meeting in Paris
October 31 Results for the third quarter 2012
(Palais des Congrès in Paris)
November 23-24 Actionaria Trade Show in Paris
May 21 Meeting with individual shareholders in Caen
(Palais des Congrès in Paris)
(France)
November 29 Meeting with individual shareholders in Bordeaux
June 18 Ex-dividend date for the 2011 remainder dividend (1)
(France)
June 28 Meeting with individual shareholders in Nice
December 17 Ex-dividend date for the 2012 second
(France)
interim dividend (2)
6.7. 2013 Schedule
March 18 Ex-dividend date for the 2012 third interim
May 17 Shareholders’ Meeting in Paris
dividend (2)
(Palais des Congrès in Paris)
6.8. Investor Relations Department contacts
Martin Deffontaines
Vice President Investor Relations
TOTAL S.A.
Tour Coupole
2, place Jean Millier
Arche Nord Coupole/Regnault
92078 Paris La Défense Cedex
France
Phone: 01 47 44 58 53 or +33 1 47 44 58 53
Fax: 01 47 44 58 24 or +33 1 47 44 58 24
E-mail: investor-relations@total.com
North America:
Robert Hammond
Director of Investor Relations
North America
TOTAL American Services Inc.
1201 Louisiana Street, Suite 1800
Houston, TX 77002
United States
Phone: +1 (713) 483-5070
Fax: +1 (713) 483-5629
E-mail: ir.tx@total.com
(1) Subject to the approval of the Shareholders’ Meeting of May 11, 2012.
(2) Subject to approval by the Board of Directors.
158
TOTAL. Registration Document 2011
Financial information 7
Financial information
1. Historical financial information 160
1.1. 2011, 2010 and 2009 Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .160
1.2. Statutory Financial Statements of TOTAL S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .160
2. Audit of the historical financial information 160
3. Other information 160
4. Dividend policy 161
5. Legal and arbitration proceedings 161
5.1. Antitrust investigations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .161
5.2. Grande Paroisse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .162
5.3. Buncefield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .163
5.4. Erika . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .163
5.5. Blue Rapid and the Russian Olympic Committee - Russian regions and Interneft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .164
5.6. Iran . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .164
5.7. Libya . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .164
5.8. Oil-for-Food Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .164
5.9. Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .165
6. Significant changes 165
Registration Document 2011. TOTAL
159
7 Financial information
Historical financial information.
1. Historical financial information
1.1. 2011, 2010 and 2009 Consolidated Financial Statements
The Consolidated Financial Statements of TOTAL S.A. and its consolidated subsidiaries (the Group) for the years ended December 31, 2011,
2010 and 2009 were prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB) and as adopted by the European Union as of December 31, 2011.
1.2. Statutory Financial Statements of TOTAL S.A.
The Statutory Financial Statements of TOTAL S.A., the parent company of the Group, for the years ended December 31, 2011,
2010 and 2009 were prepared in accordance with French accounting standards as applicable on December 31, 2011.
2. Audit of the historical financial information
The Consolidated Financial Statements for the fiscal year 2011
which appear in Chapter 9 to this Registration Document were
certified by the Company’s auditors. A translation of the auditors’
report on the Consolidated Financial Statements is provided in
point 1 of Chapter 9, for information purposes only.
TOTAL’s Statutory Financial Statements for the fiscal year 2011
(under French accounting standards) which appear in Chapter 11
to this Registration Document were also certified by the Company’s
auditors. A translation of the auditors’ report on the 2011 Statutory
Financial Statements is provided in point 2 of the Chapter 11,
for information purposes only.
Pursuant to Article 28 of EC Regulation No 809/2004,
are incorporated by reference in this Registration Document:
– the Consolidated and Statutory Financial Statements for fiscal
year 2010, together with the statutory auditors’ reports on the
Consolidated Financial Statements and the Statutory Financial
Statements which appear on pages 172 and 280 of the French
version of the Registration Document for fiscal year 2010 which
was filed with the French Financial Markets Authority on
March 28, 2011 (and a translation is reproduced on pages 174
and 272 of the English version of such Registration Document
for information purposes only);
– the Consolidated and Statutory Financial Statement for fiscal
year 2009, together with the statutory auditors’ reports on the
Consolidated Financial Statements and the Statutory Financial
Statements which appear on pages 182 and 290 of the French
version of the Registration Document for fiscal year 2009 which
was filed with the French Financial Markets Authority (Autorité
des marchés financiers) on April 1, 2010 (and a translation
is reproduced on pages 180 and 284 of the English version
of such Registration Document for information purposes only).
3. Other information
Financial information other than that contained in Chapter 9 or 11
of this Registration Document, in particular ratios, statistical data
or other calculated data, which are used to describe the Group or
its business performance, is not extracted from the audited financial
statements of the issuer. Except where otherwise stated, these
data are based on internal Company data.
In particular, the supplemental oil and gas information provided
in Chapter 10 of this Registration Document is not extracted from
the audited financial statements of the issuer and was not audited
by the Company’s statutory auditors. This supplemental information
was prepared by the Company based on information available
to it, using its own calculations or estimates and taking into account
the U.S. standards to which the Company is subject for this kind
of information as a result of the listing of its shares (in the form
of ADRs) on the New York Stock Exchange.
This Registration Document does not include profit forecasts
or estimates, under the meaning given to such terms by EC
Regulation No. 809/2004 dated April 29, 2004, for the period
after December 31, 2011.
160
TOTAL. Registration Document 2011
Financial information 7
Dividend policy
4. Dividend policy
The Company’s dividend policy is described in point 2, Chapter 6 of this Registration Document.
5. Legal and arbitration proceedings
There are no governmental, legal or arbitration proceedings, including any proceeding that the Company is aware of, threatened with or even pending
(including the main legal proceedings described hereafter) that could have a material impact on the Group’s financial situation or profitability.
The main legal proceedings in which the Group’s companies are involved are described below.
5.1. Antitrust investigations
The principal antitrust proceedings in which the Group’s companies
are involved are described below.
5.1.1. Chemicals
– As part of the spin-off of Arkema(1) in 2006, TOTAL S.A. or certain
other Group companies agreed to grant Arkema a guarantee
for potential monetary consequences related to antitrust proceedings
arising from events prior to the spin-off.
This guarantee covers, for a period of ten years from the date
of the spin-off, 90% of amounts paid by Arkema related to (i) fines
imposed by European authorities or European member-states
for competition law violations, (ii) fines imposed by U.S. courts
or antitrust authorities for federal antitrust violations or violations
of the competition laws of U.S. states, (iii) damages awarded in civil
proceedings related to the government proceedings mentioned
above, and (iv) certain costs related to these proceedings.
The guarantee related to anti-competition violations in Europe
applies to amounts above a €176.5 million threshold. On the other
hand, the agreements provide that Arkema will indemnify
TOTAL S.A. or any Group company for 10% of any amount that
TOTAL S.A. or any Group company are required to pay under any
of the proceedings covered by this guarantee, in Europe.
If one or more individuals or legal entities, acting alone or together,
directly or indirectly holds more than one-third of the voting rights
of Arkema, or if Arkema transfers more than 50% of its assets
(as calculated under the enterprise valuation method, as of the date
of the transfer) to a third party or parties acting together, irrespective
of the type or number of transfers, this guarantee will become void.
– In the United States, civil liability lawsuits, for which TOTAL S.A.
has been named as the parent company, are closed without
significant impact on the Group’s financial position.
– In Europe, since 2006, the European Commission has fined
companies of the Group in its configuration prior to the spin-off
an overall amount of €385.47 million, of which Elf Aquitaine
and/or TOTAL S.A. were held jointly liable for €280.17 million,
Elf Aquitaine being personally fined €23.6 million for deterrence.
These fines are entirely settled as of today.
As a result, since the spin-off, the Group has paid the overall
amount of €188.07 million(2), corresponding to 90% of the fines
overall amount once the threshold provided for by the guarantee
is deducted to which an amount of €31.31 million of interest has
been added as explained hereinafter.
The European Commission imposed these fines following
investigations between 2000 and 2004 into commercial practices
involving eight products sold by Arkema. Five of these investigations
resulted in prosecutions from the European Commission for which
Elf Aquitaine has been named as the parent company, and two
of these investigations named TOTAL S.A. as the ultimate parent
company of the Group.
TOTAL S.A. and Elf Aquitaine are contesting their liability based solely
on their status as parent companies and appealed for cancellation
and reformation of the rulings that are still pending before
the relevant EU court of appeals or supreme court of appeals.
During the year 2011, four of the proceedings have evolved
and are closed as far as Arkema is concerned:
- In one of these proceedings, the Court of Justice of the European
Union (CJEU) has rejected the action of Arkema while the decisions
of the European Commission and of the General Court
of the European Union against the parent companies have
been squashed. Consequently, this proceeding is definitively
closed regarding Arkema as well as the parent companies.
- In two other proceedings, previous decisions against Arkema
and the parent companies have been upheld by the General
Court of the European Union. While the parent companies have
introduced an appeal before the CJEU, Arkema did not appeal
to the CJEU.
- Finally, in a last proceeding, the General Court has decided
to reduce the amount of the fine initially ordered against Arkema
while, in parallel, it has rejected the actions of the parent
companies that have remained obliged to pay the whole amount
of the fine initially ordered by the European Commission. Arkema
has accepted this decision while the parent companies have
introduced an appeal before the CJEU.
(1) Arkema is used in this section to designate those companies of the Arkema group whose ultimate parent company is Arkema S.A. Arkema became an independent company after
being spun-off from TOTAL S.A. in May 2006.
(2) This amount does not take into account a case that led to Arkema, prior to Arkema’s spin-off from TOTAL, and Elf Aquitaine being fined jointly €45 million and Arkema being fined €13.5 million.
Registration Document 2011. TOTAL
161
7 Financial information
Legal and arbitration proceedings
With the exception of the €31.31 million of interest charged
by the European Commission to the parent companies, which has
been required to pay in accordance with the decision concerning
the last proceeding referred hereinabove, the evolution of the
proceedings during the year 2011 did not modify the global amount
assumed by the Group in execution of the guarantee.
In addition, civil proceedings against Arkema and other groups
of companies were initiated in 2009 and 2011, respectively, before
the German and Dutch courts by third parties for alleged damages
pursuant to two of the above mentioned legal proceedings.
TOTAL S.A. was summoned to serve notice of the dispute before
the German court. At this point, the probability of a favorable verdict
and the financial impacts of these proceedings are uncertain due to
the number of legal difficulties they give rise to, the lack
of documented claims and evaluations of the alleged damages.
Arkema began implementing compliance procedures in 2001 that
are designed to prevent its employees from violating antitrust provisions.
However, it is not possible to exclude the possibility that the relevant
authorities could commence additional proceedings involving Arkema
regarding events prior to the spin-off, as well as Elf Aquitaine
and/or TOTAL S.A. based on their status as parent company.
Within the framework of all of the legal proceedings described
above, a €17 million reserve remains booked in the Group’s
consolidated financial statements as of December 31, 2011.
5.2. Grande Paroisse
An explosion occurred at the Grande Paroisse industrial site in the city
of Toulouse in France on September 21, 2001. Grande Paroisse,
a former subsidiary of Atofina which became a subsidiary
of Elf Aquitaine Fertilisants on December 31, 2004, as part of the
reorganization of the Chemicals segment, was principally engaged
in the production and sale of agricultural fertilizers. The explosion,
which involved a stockpile of ammonium nitrate pellets, destroyed
a portion of the site and caused the death of thirty-one people,
including twenty-one workers at the site, and injured many others.
The explosion also caused significant damage to certain property
in part of the city of Toulouse.
This plant has been closed and individual assistance packages
have been provided for employees. The site has been rehabilitated.
On December 14, 2006, Grande Paroisse signed, under the supervision
of the city of Toulouse, the deed whereby it donated the former site
of the AZF plant to the greater agglomeration of Toulouse (CAGT)
and the Caisse des dépôts et consignations and its subsidiary
ICADE. Under this deed, TOTAL S.A. guaranteed the site restoration
obligations of Grande Paroisse and granted a €10 million endowment
to the InNaBioSanté research foundation as part of the setting
up of a cancer research center at the site by the city of Toulouse.
Regarding the cause of the explosion, the hypothesis that the
explosion was caused by Grande Paroisse through the accidental
mixing of hundreds of kilos of a chlorine compound at a storage
162
TOTAL. Registration Document 2011
5.1.2. Downstream
– Pursuant to a statement of objections received by Total
Nederland N.V. and TOTAL S.A. (based on its status as parent
company) from the European Commission, Total Nederland N.V.
was fined €20.25 million in 2006, for which TOTAL S.A. was held
jointly liable for €13.5 million. TOTAL S.A. appealed this decision
before the relevant court and this appeal is still pending.
– In addition, pursuant to a statement of objections received by
Total Raffinage Marketing (formerly Total France) and TOTAL S.A.
from the European Commission regarding another product line of
the Refining & Marketing division, Total Raffinage Marketing was
fined €128.2 million in 2008, which has been paid, and for which
TOTAL S.A. was held jointly liable based on its status as parent
company. TOTAL S.A. also appealed this decision before the
relevant court and this appeal is still pending.
– In addition, civil proceedings against TOTAL S.A. and Total
Raffinage Marketing and other companies were initiated before U.K
and Dutch courts by third parties for alleged damages in connection
with the prosecutions brought by the European Commission in this
case. At this point, the probability to have a favorable verdict and
the financial impacts of these procedures are uncertain due to the
number of legal difficulties they gave rise to, the lack of documented
claims and evaluations of the alleged damages.
Within the framework of the legal proceedings described above,
a €30 million reserve is booked in the Group’s consolidated
financial statements as of December 31, 2011.
Whatever the evolution of the proceedings described above,
the Group believes that their outcome should not have
a material adverse effect on the Group’s financial situation
or consolidated results.
site for ammonium nitrate was discredited over the course of the
investigation. As a result, proceedings against ten of the eleven
Grande Paroisse employees charged during the criminal investigation
conducted by the Toulouse Regional Court (Tribunal de grande
instance) were dismissed and this dismissal was upheld on appeal.
Nevertheless, the final experts’ report filed on May 11, 2006
continued to focus on the hypothesis of a chemical accident,
although this hypothesis was not confirmed during the attempt to
reconstruct the accident at the site. After having articulated several
hypotheses, the experts no longer maintain that the accident was
caused by pouring a large quantity of a chlorine compound over
ammonium nitrate. Instead, the experts have retained a scenario
where a container of chlorine compound sweepings was poured
between a layer of wet ammonium nitrate covering the floor and
a quantity of dry agricultural nitrate at a location not far from the
principal storage site. This is claimed to have caused an explosion
which then spread into the main storage site. Grande Paroisse
was investigated based on this new hypothesis in 2006; Grande
Paroisse is contesting this explanation, which it believes to be
based on elements that are not factually accurate.
All the requests for additional investigations that were submitted
by Grande Paroisse, the former site manager and various plaintiffs
were denied on appeal after the end of the criminal investigation
procedure. On July 9, 2007, the investigating judge brought charges
against Grande Paroisse and the former plant manager before the
Financial information 7
Legal and arbitration proceedings
criminal chamber of the Court of Appeal of Toulouse. In late 2008,
TOTAL S.A. and Mr. Thierry Desmarest were summoned to appear in
Court pursuant to a request by a victims association. The trial for this
case began on February 23, 2009, and lasted approximately four months.
The Prosecutor’s office, together with certain third parties, has
appealed the Toulouse Criminal Court verdict. In order to preserve
its rights, Grande Paroisse lodged a cross-appeal with respect
to civil charges.
On November 19, 2009, the Toulouse Criminal Court acquitted
both the former Plant Manager, and Grande Paroisse due to the
lack of reliable evidence for the explosion. The Court also ruled that
the summonses against TOTAL S.A. and Mr. Thierry Desmarest,
Chairman and CEO at the time of the disaster, were inadmissible.
Due to the presumption of civil liability that applied to Grande Paroisse,
the Court declared Grande Paroisse civilly liable for the damages
caused by the explosion to the victims in its capacity as custodian
and operator of the plant.
The appeal proceedings before the Court of Appeal of Toulouse
was completed on March 16, 2012. The decision is expected on
September 24, 2012.
A compensation mechanism for victims was set up immediately
following the explosion. €2.3 billion was paid for the compensation
of claims and related expenses amounts. As of December 31, 2011,
a €21 million reserve was recorded in the Group’s consolidated
balance sheet.
5.3. Buncefield
On December 11, 2005, several explosions, followed by a major fire,
occurred at an oil storage depot at Buncefield, north of London.
This depot was operated by Hertfordshire Oil Storage Limited
(HOSL), a company in which TOTAL’s UK subsidiary holds 60%
and another oil group holds 40%.
The explosion caused injuries, most of which were minor injuries,
to a number of people and caused property damage to the depot
and the buildings and homes located nearby. The official Independent
Investigation Board has indicated that the explosion was caused
by the overflow of a tank at the depot. The Board’s final report was
released on December 11, 2008. The civil procedure for claims,
which had not yet been settled, took place between October and
December 2008. The Court’s decision of March 20, 2009, declared
TOTAL’s UK subsidiary liable for the accident and solely liable
for indemnifying the victims. The subsidiary appealed the decision.
The appeal trial took place in January 2010. The Court of Appeals,
by a decision handed down on March 4, 2010, confirmed the prior
judgment. The Supreme Court of United Kingdom has partially
authorized TOTAL’s UK subsidiary to contest the decision.
TOTAL’s UK subsidiary finally decided to withdraw from this recourse
due to settlement agreements reached in mid-February 2011.
The Group carries insurance for damage to its interests in these
facilities, business interruption and civil liability claims from third parties.
The provision for the civil liability that appears in the Group’s consolidated
financial statements as of December 31, 2011, stands at €80 million
after taking into account the payments previously made.
The Group believes that, based on the information currently available,
on a reasonable estimate of its liability and on provisions recognized,
this accident should not have a significant impact on the Group’s
financial situation or consolidated results.
In addition, on December 1, 2008, the Health and Safety
Executive (HSE) and the Environment Agency (EA) issued a Notice
of prosecution against five companies, including TOTAL’s UK
subsidiary. By a judgment on July 16, 2010, the subsidiary was
fined £3.6 million and paid it. The decision takes into account
a number of elements that have mitigated the impact of the charges
brought against it.
5.4. Erika
Following the sinking in December 1999 of the Erika, a tanker
that was transporting products belonging to one of the Group
companies, the Tribunal de grande instance of Paris convicted
TOTAL S.A. of marine pollution pursuant to a judgment issued
on January 16, 2008, finding that TOTAL S.A. was negligent in
its vetting procedure for vessel selection, and ordering TOTAL S.A.
to pay a fine of €375,000. The Court also ordered compensation
to be paid to those affected by the pollution from the Erika up to an
aggregate amount of €192 million, declaring TOTAL S.A. jointly and
severally liable for such payments together with the Erika’s inspection
and classification firm, the Erika’s owner and the Erika’s manager.
TOTAL has appealed the verdict of January 16, 2008. In the meantime,
it nevertheless proposed to pay third parties who so requested definitive
compensation as determined by the Court. Forty-two third parties
have been compensated for an aggregate amount of €171.5 million.
By a decision dated March 30, 2010, the Court of Appeal of Paris
upheld the lower Court verdict pursuant to which TOTAL S.A. was
convicted of marine pollution and fined €375,000.
However, the Court of Appeal ruled that TOTAL S.A. bears no civil
liability according to the applicable international conventions
and consequently ruled that TOTAL S.A. be not convicted.
TOTAL challenged the criminal law-related issues of this decision
before the French Supreme Court (Cour de cassation).
To facilitate the payment of damages awarded by the Court
of Appeal in Paris to third parties against Erika’s controlling and
classification firm, the ship-owner and the ship-manager, a global
settlement agreement was signed late 2011 between these parties
and TOTAL S.A. under the auspices of the IOPC Fund. Under
this global settlement agreement, each party agreed to the
withdrawal of all civil proceedings initiated against all other parties
to the agreement.
TOTAL S.A. believes that, based on the information currently
available, the case should not have a significant impact on the Group’s
financial situation or consolidated results.
Registration Document 2011. TOTAL
163
7 Financial information
Legal and arbitration proceedings
5.5. Blue Rapid and the Russian Olympic Committee -
Russian regions and Interneft
Blue Rapid, a Panamanian company, and the Russian Olympic
Committee filed a claim for damages with the Paris Commercial
Court against Elf Aquitaine, alleging a so-called non-completion
by a former subsidiary of Elf Aquitaine of a contract related
to an exploration and production project in Russia negotiated
in the early 1990s. Elf Aquitaine believed this claim to be unfounded
and opposed it. On January 12, 2009, the Commercial Court
of Paris rejected Blue Rapid’s claim against Elf Aquitaine and found
that the Russian Olympic Committee did not have standing
in the matter. Blue Rapid and the Russian Olympic Committee
appealed this decision. On June 30, 2011, the Court of Appeal
of Paris dismissed as inadmissible the claim of Blue Rapid
and the Russian Olympic Committee against Elf Aquitaine,
notably on the grounds of the contract’s termination. Blue Rapid
and the Russian Olympic Committee appealed this decision
to the French Supreme Court.
5.6. Iran
In connection with the same facts, and fifteen years after the
termination of the exploration and production contract, a Russian
company, which was held not to be the contracting party to the
contract, and two regions of the Russian Federation which were
not even parties to the contract, have launched an arbitration
procedure against the aforementioned former subsidiary of
Elf Aquitaine that was liquidated in 2005, claiming alleged damages
of U.S.$ 22.4 billion. For the same reasons as those successfully
adjudicated by Elf Aquitaine against Blue Rapid and the Russian
Olympic Committee, the Group considers this claim to be
unfounded as to a matter of law or fact. The Group has lodged a
criminal complaint to denounce the fraudulent claim which the
Group believes it is a victim of and, has taken and reserved its
rights to take other actions and measures to defend its interests.
In 2003, the United States Securities and Exchange Commission (SEC)
followed by the Department of Justice (DoJ) issued a formal order
directing an investigation in connection with the pursuit of business
in Iran, by certain oil companies including, among others, TOTAL.
The inquiry concerns an agreement concluded by the Company
with a consultant concerning a gas field in Iran and aims to verify
whether certain payments made under this agreement would have
benefited Iranian officials in violation of the Foreign Corrupt
Practices Act (FCPA) and the Company’s accounting obligations.
Investigations are still pending and the Company is cooperating
with the SEC and the DoJ. In 2010, the Company opened talks
with U.S. authorities, without any acknowledgement of facts,
to consider an out-of-court settlement as it is often the case
in this kind of proceeding.
Late in 2011, the SEC and the DoJ proposed to TOTAL out-of-court
settlements that would close their inquiries, in exchange for TOTAL’s
committing to a number of obligations and paying fines.
As TOTAL was unable to agree to several substantial elements
of the proposal, the Company is continuing discussions with the
U.S. authorities. The Company is free not to accept an out-of-court
settlement solution, in which case it would be exposed to the risk
of prosecution in the United States.
In this same affair, a parallel judicial inquiry related to TOTAL was
initiated in France in 2006. In 2007, the Company’s Chief Executive
Officer was placed under formal investigation in relation to this inquiry,
as the former President of the Middle East department of the Group’s
Exploration & Production division. The Company has not been
notified of any significant developments in the proceedings since
the formal investigation was launched.
At this point, the Company cannot determine when these investigations
will terminate, and cannot predict their results, or the outcome
of the talks that have been initiated. Resolving these cases is not
expected to have a significant impact on the Group’s financial
situation or consequences on its future planned operations.
5.7. Libya
In June 2011, the United States Securities and Exchange Commission (SEC) issued to certain oil companies - including, among others,
TOTAL - a formal request for information related to their operations in Libya. TOTAL is cooperating with this non-public investigation.
5.8. Oil-for-Food Program
Several countries have launched investigations concerning possible
violations related to the United Nations (UN) Oil-for-Food program in Iraq.
Pursuant to a French criminal investigation, certain current or former
Group employees were placed under formal criminal investigation
for possible charges as accessories to the misappropriation of corporate
assets and as accessories to the corruption of foreign public agents.
The Chairman and Chief Executive Officer of the Company, formerly
President of the Group’s Exploration & Production division, was also
placed under formal investigation in October 2006. In 2007, the criminal
investigation was closed and the case was transferred to the
Prosecutor’s office. In 2009, the Prosecutor’s office recommended
to the investigating judge that the case against the Group’s current
and former employees and TOTAL’s Chairman and Chief Executive
Officer not be pursued.
In early 2010, despite the recommendation of the Prosecutor’s
office, a new investigating judge, having taken over the case,
decided to indict TOTAL S.A. on bribery charges as well as complicity
and influence peddling. The indictment was brought eight years
after the beginning of the investigation without any new evidence
being introduced.
164
TOTAL. Registration Document 2011
Financial information 7
Significant changes
In October 2010, the Prosecutor’s office recommended to the
investigating judge that the case against TOTAL S.A. the Group’s
current and former employees and TOTAL’s Chairman and Chief
Executive Officer not be pursued. However, by ordinance notified
in early August 2011, the investigating judge on the matter
decided to send the case to trial. The hearings are expected
in the first quarter of 2013.
The Company believes that its activities related to the Oil-for-Food
program have been in compliance with this program, as organized
by the UN in 1996. The Volcker report released by the independent
investigating committee set up by the UN had discarded any
bribery grievance within the framework of the Oil-For-Food program
with respect to TOTAL.
5.9. Italy
As part of an investigation led by the Prosecutor of the Republic
of the Potenza Court, Total Italia and certain Group’s employees
are the subject of an investigation related to certain calls for tenders
that Total Italia made for the preparation and development of an oil
field. On February 16, 2009, as a preliminary measure before the
proceedings go before the Court, the preliminary investigation judge
of Potenza served notice to Total Italia of a decision that would
suspend the concession for this field for one year. Total Italia
has appealed the decision by the preliminary investigation judge
before the Court of Appeal of Potenza. In a decision dated
April 8, 2009, the Court reversed the suspension of the Gorgoglione
concession and appointed for one year, i.e. until February 16, 2010,
a judicial administrator to supervise the operations related to the
development of the concession, allowing the Tempa Rossa project
to continue.
The criminal investigation was closed in the first half of 2010.
The preliminary hearing judge, who will decide whether the case
shall be returned to the Criminal Court to be judged on the merits,
held the first hearing on December 6, 2010. The proceedings
before the Judge of the preliminary hearing are still pending.
In 2010, Total Italia’s exploration and production operations were
transferred to Total E&P Italia and refining and marketing operations
were merged with those of Erg Petroli.
6. Significant changes
Except for the recent events mentioned, in the Management Report of the Board of Directors (Chapter 3) or in the Business overview (Chapter 2),
no significant changes in the Group’s financial or commercial position have occurred since December 31, 2011, the end of the last fiscal year
for which audited financial statements have been published by the Company.
Registration Document 2011. TOTAL
165
166
TOTAL. Registration Document 2011
General information 8
General information
1. Share capital 168
1.1. Share capital as of December 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .168
1.2. Features of the shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .168
1.3. Authorized share capital not issued as of December 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .168
1.4. Potential share capital as of December 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .171
1.5. TOTAL shares held by the Companies or its subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .171
1.6. Share capital history . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .171
2. Articles of incorporation and by-laws; other information 172
2.1. General information concerning the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .172
2.2. Summary of the Company’s purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .172
2.3. Provisions of the by-laws governing the administration and management bodies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .173
2.4. Rights, privileges and restrictions attached to the shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .174
2.5. Amending shareholders’ rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .174
2.6. Shareholders’ meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .175
2.7. Thresholds to be declared according to the by-laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .175
2.8. Changes in the share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .175
3. Other matters 175
3.1. Employee incentives and profit-sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .175
3.2. Pension savings plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .175
3.3. Agreements mentioned in Article L. 225-100-3 of the French Commercial Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .176
3.4. Filing of Form 20-F with the United States Securities and Exchange Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .176
4. Documents on display 176
5. Information on holdings 176
5.1. General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .176
5.2. TOTAL’s interest in Sanofi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .176
5.3. TOTAL’s interest in CEPSA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .177
5.4. TOTAL’s interest in Novatek . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .177
5.5. TOTAL’s interest in SunPower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .177
Registration Document 2011. TOTAL
167
8 General information
Share capital
1. Share capital
1.1. Share capital as of December 31, 2011
€5,909,418,282.50 consisting of 2,363,767,313 fully paid ordinary shares.
1.2. Features of the shares
There is only one class of shares, par value €2.50. A double voting right is granted to every shareholder, under certain conditions
(see paragraph 2.4.1 of this Chapter). The shares are in bearer or registered form at the shareholder’s discretion. The shares are in
book-entry form and registered in an account.
1.3. Authorized share capital not issued as of December 31, 2011
A table summarizing the currently valid delegations and authorizations
to increase share capital that have been granted by the Shareholders’
Meeting to the Board of Directors, and the uses made of those
delegations and authorizations in fiscal year 2011, appears in
paragraph 1.3.8 of this Chapter.
Furthermore, the maximum nominal amount of the debt securities
granting rights to the Company’s share capital that may be issued
pursuant to the above mentioned seventeenth and eighteenth
resolutions may not exceed €10 billion, or their exchange value,
on the date of issuance.
1.3.1. Seventeenth resolution of the
Shareholders’ Meeting held on May 21, 2010
1.3.3. Nineteenth resolution of the
Shareholders’ Meeting held on May 21, 2010
Delegation of authority granted by the Shareholders’ Meeting
to the Board of Directors to increase the share capital by issuing
common shares or other securities granting immediate or future
rights to the Company’s share capital, maintaining shareholders’
pre-emptive subscription rights up to a maximum nominal amount
of €2.5 billion, i.e., 1 billion shares (delegation of authority valid
for twenty-six months).
Furthermore, the maximum nominal amount of the debt securities
granting rights to the Company’s share capital that may be issued
pursuant to the seventeenth resolution and the eighteenth
resolution (mentioned below) may not exceed €10 billion, or their
exchange value, on the date of issuance.
1.3.2. Eighteenth resolution of the
Shareholders’ Meeting held on May 21, 2010
Delegation of authority granted by the Shareholders’ Meeting to the
Board of Directors to increase the share capital by issuing common
shares or other securities granting immediate or future rights to the
Company’s share capital, canceling shareholders’ pre-emptive
subscription rights, including the compensation comprised of
securities as part of a public exchange offer, provided that they
meet the requirements of Article L. 225-148 of the French
Commercial Code. This resolution grants the Board of Directors the
authority to grant a priority period for shareholders to subscribe to
these securities pursuant to the provisions of Article L. 225-135 of
the French Commercial Code. The total amount of the capital
increases without pre-emptive subscription rights likely to occur
immediately or in the future cannot exceed the nominal amount of
€850 million, i.e., 340 million shares, par value €2.50 (delegation of
authority valid for twenty-six months). The nominal amount of the
capital increases is counted against the maximum aggregate
nominal amount of €2.5 billion authorized by the seventeenth
resolution of the Shareholders’ Meeting held on May 21, 2010.
Delegation of power granted by the Shareholders’ Meeting to
the Board of Directors to increase the share capital by issuing new
ordinary shares or other securities granting immediate or future
rights to the Company’s share capital as compensation of in-kind
contribution granted to the Company, by an amount not
exceeding 10% of the share capital outstanding at the date of the
Shareholders’ Meeting on May 21, 2010 (delegation of authority
valid for twenty-six months). The nominal amount of the capital
increases is counted against the maximum aggregate nominal
amount of €850 million authorized by the eighteenth resolution
of the Shareholders’ Meeting held on May 21, 2010.
1.3.4. Twentieth resolution of the
Shareholders’ Meeting held on May 21, 2010
Delegation of authority to the Board of Directors to complete capital
increases reserved for employees participating in the Company
Savings Plan (Plan d’épargne d’entreprise), up to a maximum
amount equal to 1.5% of the outstanding share capital on the date
of the decision of the Board of Directors to proceed with the issue
(delegation of authority valid for twenty-six months). It is being
specified that the amount of the capital increase is counted against
the maximum aggregate nominal amount of €2.5 billion authorized
by the seventeenth resolution of the Shareholders’ Meeting held on
May 21, 2010.
Given that the Board of Directors made use of this delegation of
authority on October 28, 2010, under which 8,902,717 new TOTAL
shares were issued in 2011, the authorized share capital not issued
with respect to capital increases reserved for employees
participating in a Company Savings Plan was €66,384,480 as
of December 31, 2011, representing 26,553,792 shares.
As a result of the use of the delegation authorizing capital increases
reserved for employees decided by the Board on October 28, 2010,
and given that the Board of Directors did not make use of the
168
TOTAL. Registration Document 2011
General information 8
Share capital
delegations of authority granted by the seventeenth, eighteenth
and nineteenth resolutions of the Shareholders’ Meeting held on
May 21, 2010, the authorized capital not issued was €2.48 billion
as of December 31, 2011, representing 991 million shares.
the options granted to the Company’s corporate executive officers
cannot exceed 0.1% of the outstanding share capital on the date of
the meeting of the Board of Directors that approves the grants
(authorization valid for thirty-eight months).
1.3.5. Eleventh resolution of the
Shareholders’ Meeting held on May 13, 2011
Authority to grant restricted outstanding or new TOTAL shares
to employees of the Group and to executive officers up to
a maximum of 0.8% of the share capital outstanding on the date
of the meeting of the Board of Directors that approves the restricted
share grants. In addition, the shares granted to the Company’s
executive officers cannot exceed 0.01% of the outstanding share
capital on the date of the meeting of the Board of Directors
that approves the grants (authorization valid for thirty-eight months).
Pursuant to this authorization:
– 3,700,000 outstanding shares were awarded by the Board of
Directors on September 14, 2011, including 16,000 outstanding
shares awarded to the Chairman and Chief Executive.
As of December 31, 2011, 15,210,138 shares, including 220,376
to the Company’s corporate executive officers could, therefore, still
be awarded pursuant to this authorization.
1.3.6. Twenty-first resolution of the
Shareholders’ Meeting held on May 21, 2010
Authority to grant stock options reserved for TOTAL employees
and to executive and officers up to a maximum of 1.5% of the
share capital outstanding on the date of the meeting of the Board
of Directors that approves the stock option grant. In addition,
Pursuant to this authorization:
– 4,925,000 stock options were awarded by the Board of Directors
at its meeting on September 14, 2010, including 240,000 stock
options to the Chairman and Chief Executive Officer;
– 1,600,000 stock options were awarded by the Board of Directors
at its meeting on September 14, 2011, including 160,000 stock
options to the Chairman and Chief Executive Officer.
As of December 31, 2011, 28,931,509 stock options, including
1,963,767 to the Company’s corporate executive officers, could still
be awarded pursuant to this authorization.
1.3.7. Seventeenth resolution of the
Shareholders’ Meeting held on May 11, 2007
Authority to cancel shares up to a maximum of 10% of the share
capital of the Company existing as of the date of the operation
within a twenty-four-month period. This authorization is effective
until the Shareholders’ Meeting called to approve the financial
statements for the year ending December 31, 2011. The Board did
not make use of this delegation of authority during fiscal year 2011.
Based on 2,363,767,313 shares outstanding on December 31, 2011,
the Company may, up until the conclusion of the Shareholders’
Meeting called to approve the financial statements for the fiscal year
ending on December 31, 2011, cancel a maximum of 236,376,731
shares before reaching the cancellation threshold of 10% of share
capital canceled during a twenty-four-month period.
Registration Document 2011. TOTAL
169
8 General information
Share capital
1.3.8. Table compiled in accordance with Article L 225-100 of the French Commercial Code
summarizing the use of delegations of authority and powers granted to the Board of Directors
with respect to capital increases as of December 31, 2011
Type
Par value limit, or maximum number
of shares expressed as % of share
capital (par value, number of shares
or % of share capital)
Use in 2011,
par value,
or number
of shares
Available balance
as of 12/31/2011
par value, or
number of shares
Date
of delegation
of authority
or authorization
Term of
authorization
granted to the
Board of Directors
€10 billion
In securities
Debt
securities
representing
rights
to capital
€2.5 billion, i.e. a maximum of
1 billion shares issued with
a pre-emptive subscription right,
of which
1/ a specific cap of €850 million,
i.e. a maximum of 340 million shares
for issuances without pre-emptive
subscription rights, including the
compensation comprised of securities
as part of a public exchange offer,
provided that they meet the
requirements of Article L. 225-148 of
the French Commercial Code, of which:
1/a sub-cap of 10% of the share
capital on the date of the
Shareholders’ Meeting on
May 21, 2010 (b) through in-kind
contributions when provisions
of Article L. 225-148 of the French
Commercial Code are not applicable
2 / a specific cap of 1.5%
of the share capital on the date
of Board decision (c), for capital
increases reserved for employees
participating in Company
Savings Plan
1.5% of share capital (c) on
the date of Board decision
to grant options
Maximum
cap for the
issuance
of securities
granting
immediate or
future rights
to share
capital
Nominal
share
capital
Stock options
-
€10 billion
26 months
ESM (g) of
May 21, 2010
(Resolutions
17 and 18)
8.9 million shares
(within the specific
cap 2/below)
€2.48 billion (a)
(i.e. 991 million
shares)
ESM (g) of
May 21, 2010
(Resolution 17)
26 months
-
-
€850 million
26 months
ESM (g) of
May 21, 2010
(Resolution 18)
€587.1 million
26 months
ESM (g) of
May 21, 2010
(Resolution 19)
8.9 million
shares (d)
26.5 million
shares (d)
26 months
ESM (g) of
May 21, 2010
(Resolution 20)
Restricted/free shares awarded
to Group employees
and to executives and officers
0.8% of share capital (c) on the date
of Board decision to grant
the restricted/free shares
3.7 million
shares (f)
15.2 million
shares (f)
1.6 million
shares (e)
28.9 million
shares (e)
38 months
38 months
ESM (g) of
May 21, 2010
(Resolution 21)
ESM (g) of
May 13, 2011
(Resolution 11)
(a) The number of new shares authorized under the 17th resolution of the ESM held on May 21, 2010, cannot exceed 1 billion shares. The Board of Directors decided on October 28, 2010
to proceed with a capital increase reserved for employees. 8,902,717 new TOTAL shares were subscribed and issued. As a result, the balance available under this authorization
was 991,097,283 million new shares as of December 31, 2011, i.e., 1 billion shares, minus the 8,902,717 shares.
(b) Share capital as of May 21, 2010: 2,348,674,735 shares.
(c) Share capital as of December 31, 2011: 2,363,767,313 shares.
(d) The number of shares authorized under the 20th resolution of the May 21, 2010, ESM may not exceed 1.5% of the share capital on the date when the Board of Directors decided to use
the delegation of authority. The Board of Directors decided on October 28, 2010 to proceed with a capital increase reserved for employees in 2011. 8,902,717 new TOTAL shares were
issued. As a result, the balance available under this authorization was 26,553,792 new shares as of December 31, 2011, i.e. 1.5% of the 2,363,767,313 outstanding shares at year-end,
minus the 8,902,717 shares.
(e) The number of stock options authorized under the 21st resolution of the May 21, 2010 ESM may not exceed 1.5% of the share capital on the date the options are awarded by the Board
of Directors. Since 4,925,000 TOTAL share subscription options were awarded by the Board of Directors on September 14, 2010 and 1,600,000 stock options were granted by the
Board of Directors on September 14, 2011, the number of options that may still be awarded as of December 31, 2011, was 28,931,509, which represents 1.5% of the 2,363,767,313
outstanding shares at year-end, minus 6,525,000 options already awarded and representing the same number of shares. In addition, the options awarded to the Company’s corporate
executive officers under the 21st resolution of the ESM held on May 21, 2010, cannot exceed 0.1% of the outstanding share capital on the date of the decision of the Board of Directors
to proceed with the grant. Given the 240,000 subscription options awarded to the Chairman and Chief Executive Officer by the Board of Directors at its meeting on September 14, 2010,
and the 160,000 stock options awarded to the Chairman and Chief Executive Officer on September 14, 2011, the number of options that may still be awarded to the Company’s
corporate executive officers was 1,963,767, i.e., 0.1% of the 2,363,767,313 outstanding shares at year-end, minus the 400,000 options already awarded and representing the same
number of shares.
(f) The number of outstanding shares that may be awarded as restricted share grants under the 11th resolution of the May 13, 2011 ESM may not exceed 0.8% of the share capital on
the date when the restricted shares are awarded by the Board of Directors. As the Board of Directors awarded 3,700,000 outstanding shares on September 14, 2011, the number
of shares that may still be awarded as of December 31, 2011 is 15,210,138 shares, which represents 0.8% of the outstanding 2,363,767,313 shares at year-end, minus the 3,700,000
shares already awarded. In addition, the outstanding shares awarded to the Company’s corporate executive officers under the 11th resolution of the ESM held on May 13, 2011, cannot
exceed 0.01% of the outstanding share capital on the date of the decision of the Board of Directors to proceed with the grant. Given the 16,000 outstanding shares awarded to
the Chairman and Chief Executive Officer by the Board of Directors at its meeting on September 14, 2011, the number of outstanding shares that may still be awarded to the
Company’s corporate executive officers was 220,376, representing 0.01% of the 2,363,767,313 outstanding shares at year-end, minus the 16,000 outstanding shares already awarded.
(g) ESM = Extraordinary Shareholders’ Meeting.
170
TOTAL. Registration Document 2011
General information 8
Share capital
1.4. Potential share capital as of December 31, 2011
Securities granting rights to TOTAL shares, through exercise
or redemption, are TOTAL share subscription options
amounting to 44,632,912 share subscription options as of
December 31, 2011, divided into 12,094,524 options for
the plan awarded by the Board of Directors at its meeting on
July 20, 2004, 6,162,536 options (1) for the plan awarded by the
Board of Directors at its meeting on July 19, 2005, 5,623,506
options for the plan awarded by the Board of Directors at its
meeting on July 18, 2006, 5,850,365 options for the plan awarded
by the Board of Directors at its meeting on July 17, 2007,
4,335,698 options for the October 9, 2008 plan awarded by the
Board of Directors at its meeting on September 9, 2008, 4,357,800
options for the plan awarded by the Board of Directors at its
meeting on September 15, 2009, 4,700,043 options for the plan
awarded by the Board of Directors at its meeting on
September 14, 2010 and 1,508,440 options for the plan awarded
by the Board of Directors at its meeting on September 14, 2011.
The potential share capital (existing share capital plus
securities granting rights to TOTAL shares, through exercise
or redemption) of 2,408,400,225 shares, represents 101.89%
of the share capital as of December 31, 2011, on the basis
of 2,363,767,313 TOTAL shares constituting the share capital
as of December 31, 2011, and of 44,632,912 TOTAL shares
that could be issued upon the exercise of TOTAL options.
In addition, the global free TOTAL share plan intended for all Group
employees awarded by the Board of Directors at its meeting on
May 21, 2010, is likely to result in the issuance of a maximum
of 2,494,525 shares as of December 31, 2011.
1.5. TOTAL shares held by the Companies or its subsidiaries
As of December 31, 2011
Percentage of share capital held by TOTAL S.A. 0.39%
Number of shares held in portfolio 9,222,905
Book value of portfolio (at purchase price) (M€) 364
Market value of portfolio (M€) (a) 364
Percentage of capital held by the entire Group (b) 4.63%
Number of shares held in portfolio 109,554,173
Book value of portfolio (at purchase price) (M€) 3,390
Market value of portfolio (M€) (a) 4,327
(a) Based on a market price of €39.50 per share as of December 31, 2011.
(b) TOTAL S.A., Total Nucléaire, Financière Valorgest, Sogapar and Fingestval.
1.6. Share capital history
(Since January 1, 2009)
1.6.1. For Fiscal Year 2009
July 30, 2009
January 1, 2010
Reduction of the share capital from €5,929,520,185 to €5,867,520,185, through the cancellation of 24,800,000
treasury shares, par value €2.50.
Certification of the issuance of 1,414,810 new shares, par value €2.50 per share, between January 1
and December 31, 2009, raising the share capital by €3,537,025 from €5,867,520,185 to €5,871,057,210
(of which 934,780 new shares issued through the exercise of the Company’s stock options and 480,030 new shares
through the exchange of 80,005 shares of Elf Aquitaine stock resulting from the exercise of Elf Aquitaine stock
options and eligible for a guaranteed exchange for TOTAL shares).
1.6.2. For Fiscal Year 2010
January 12, 2011
Certification of the issuance of 1,218,047 new shares, par value €2.50, through the exercise of the Company’s
stock options between January 1 and December 31, 2010, raising the share capital by €3,045,117.50 from
€5,871,057,210 to €5,874,102,327.50.
(1) After considering the May 22, 2006, adjustments of the price and the number of share options, in accordance with the legal provisions in force at that date and following decisions
of the Shareholders’ Meeting held on May 12, 2006 pertaining to the four-for-one stock split of TOTAL and the spin-off of Arkema.
Registration Document 2011. TOTAL
171
8 General information
Articles of incorporation and by-laws; other information
1.6.3. Fiscal Year 2011
April 28, 2011
January 12, 2012
Certification of the subscription to 8,902,717 new shares, par value €2.50, as part of the capital increase reserved
for Group employees approved by the Board of Directors on October 28, 2010, raising the share capital by
€22,256,792.50, from €5,874,102,327.50 to €5,896,359,120.
Certification of the issuance of 5,223,665 new shares, par value €2.50, through the exercise of the Company’s
stock options between January 1 and December 31, 2011, raising the share capital by €13,059,162.50 from
€5,896,359,120 to €5,909,418,282.50.
2. Articles of incorporation and by-laws; other information
2.1. General information concerning the Company
2.1.1. Name
TOTAL S.A.
2.1.6. By-laws
On file with K.L. Associés, Notaries in Paris
2.1.2. Headquarters
2.1.7. APE Code (NAF)
2, place Jean Millier, La Défense 6, 92400 Courbevoie (France)
111Z until January 7, 2008
2.1.3. Legal form and nationality
A French société anonyme (limited liability company)
741J since January 8, 2008
2.1.8. Term
2.1.4. Trade Registry
542 051 180 RCS Nanterre
99 years from March 22, 2000, to expire on March 22, 2099,
unless dissolved prior to this date or extended
2.1.9. Fiscal year
2.1.5. EC Registration Number
From January 1 to December 31 of each year
FR 59 542 051 180
2.2. Summary of the Company’s purpose
The direct and indirect purpose of the Company is to search for
and extract mining deposits in all countries, particularly hydrocarbons
in all forms, and to perform industrial refining, processing and trading
in said materials as well as their derivatives and by-products,
as well as all activities relating to production and distribution of all
forms of energy, as well as the chemicals sector in all of its forms
and to the rubber and health sectors. The complete details of the
Company’s corporate purpose are set forth in Article 3 of the by-laws.
172
TOTAL. Registration Document 2011
Articles of incorporation and by-laws; other information
General information 8
2.3. Provisions of the by-laws governing
the administration and management bodies
2.3.1. Election of directors and term of office
2.3.4. Minimum interest in the Company
held by directors
Directors are elected by the Shareholders’ Meeting for a 3-year
term up to a maximum number of directors authorized by law
(currently 18), subject to the legal provisions that allow the term to
be extended until the next Shareholders’ Meeting called to approve
the financial statements for the previous fiscal year.
In addition, one director representing the employee shareholders
is also elected by the Shareholders’ Meeting for a 3-year term from
a list of at least two candidates pre-selected by the employee
shareholders under the conditions provided for by the laws,
regulations and by-laws in force. However, his term shall expire
automatically once this Director is no longer an employee or a
shareholder. The Board of Directors may meet and conduct valid
deliberations until the date his replacement is named.
2.3.2. Age limit of directors
On the closing date of each fiscal year, the number of individual
directors over the age of 70 may not be greater than one-third of
the directors in office.
If this percentage is exceeded, the oldest Board member
is automatically considered to have resigned.
The director permanent representative of a legal entity must be
under 70 years old.
2.3.3. Age limit of the Chairman
and the Chief Executive Officer
The duties of the Chairman of the Board and the Chief Executive
Officer automatically cease on their 65th birthday at the latest.
The Shareholders’ Meeting of May 15, 2009, approved an
amendment of the by-laws pertaining to the rules relating to the
nomination of the Chairman. The amendment allows the Board,
as an exception to the applicable 65-year age limit, to appoint as
Chairman of the Board for a period of up to two years a director
who is more than 65 years old but less than 70 years old.
Each director (other than the director representing the employee
shareholders) must own at least 1,000 shares of stock during his
term of office. If he ceases to own the required number of shares,
he may, however, adjust his position subject to the conditions set
by law. The director representing employee shareholders must hold,
during his term of office, either individually or through a Company
Savings Plan (Fonds Commun de Placement d’Entreprise - FCPE)
governed by Article L. 214-40 of the French Monetary and Finance
Code, at least one share or a number of units in said fund
equivalent to at least one share.
2.3.5. Majority rules for Board meetings
Decisions are adopted by a majority vote of the Directors present
or represented. In the event of a tie vote, the Chairman shall cast
the deciding vote.
2.3.6. Rules of procedure of the Board
and Committees of the Board of Directors
See Chapter 5, point 1 (Corporate Governance – Report of the
Chairman of the Board of Directors) of this Registration Document.
2.3.7. Form of Management
The Management of the Company is assumed either by the
Chairman of the Board of Directors (who then holds the title
of the Chairman and Chief Executive Officer), or by another person
appointed by the Board of Directors with the title of Chief Executive
Officer. It is the responsibility of the Board of Directors to choose
between these two forms of management under the majority rules
described above.
On May 21, 2010, the Board of Directors decided to reunify the
positions of Chairman and Chief Executive Officer and appointed
the Chief Executive Officer in the position of Chairman and Chief
Executive Officer.
The management form selected remains in effect until a decision
to the contrary is made by the Board of Directors.
Registration Document 2011. TOTAL
173
8 General information
Articles of incorporation and by-laws; other information
2.4. Rights, privileges and restrictions attached to the shares
In addition to the right to vote, each share entitles the holder to a
portion of the corporate assets, distributions of profits and liquidation
dividend which is proportional to the number of shares issued,
subject to the laws and regulations in force and the by-laws.
With the exception of the double voting right, no privilege
is attached to a specific class of shares or to a specific class
of shareholders.
2.4.1. Double voting rights
Double voting rights, in relation to the portion of share capital they
represent, are granted to all fully paid-up registered shares held
continuously in the name of the same shareholder for at least two
years (1), and to additional registered shares allotted to a shareholder
in connection with a capital increase by capitalization of reserves,
profits or premiums on the basis of the existing shares which entitle
the shareholder to a double voting right.
2.4.2. Limitation of voting rights
Article 18 of the Company’s by-laws provides that at Shareholders’
Meetings, no shareholder may cast, by himself or through his
agent, on the basis of the single voting rights attached to the
shares he holds directly or indirectly and the shares for which he
holds powers, more than 10% of the total number of voting rights
attached to the Company’s shares. However, in the case of double
voting rights, this limit may be extended to 20%.
Moreover, Article 18 of the by-laws also provides that the limitation
on voting rights no longer applies, absent any decision of the
Shareholders’ Meeting, if an individual or a legal entity acting solely
or together with one or more individuals or entities acquires at least
two-thirds of the Company’s shares following a public tender offer
for all the Company’s shares. In that case, the Board of Directors
acknowledges that the limitation no longer applies and carries out
the necessary procedure to modify the company’s by-laws accordingly.
Once acknowledged, the fact that the limitation no longer applies is
final and applies to all Shareholders’ Meetings following the public
tender offer under which the acquisition of at least two-third of the
overall number of shares of the Company was made possible, and
not solely to the first meeting following that public tender offer.
Because of the fact that in such circumstances the limitation no
longer applies, such limitation on voting rights cannot prevent or
2.5. Amending shareholders’ rights
delay any takeover of the Company, except in case of a public
tender offer where the bidder does not acquire at least two-thirds
of the Company’s shares.
2.4.3. Fractional rights
Whenever it is necessary to own several shares in order to exercise
a right, a number of shares less than the number required does not
give the owners any right with respect to the Company; in such
case, the shareholders are responsible for aggregating the required
number of shares.
2.4.4. Statutory allocation of profits
The net profit for the period is equal to the net income minus
general expenses and other personnel expenses, all amortization
and depreciation of the assets, and all provisions for commercial
and industrial contingencies.
From this profit, minus prior losses, if any, the following items are
deducted in the order indicated:
1) 5% to constitute the legal reserve fund, until said fund reaches
10% of the share capital;
2) the amounts set by the Shareholders’ Meeting to fund reserves
for which it determines the allocation or use; and
3) the amounts that the Shareholders’ Meeting decides to retain.
The remainder is paid to the shareholders as dividends.
The Board of Directors may pay interim dividends.
The Shareholders’ Meeting held to approve the financial statements
for the fiscal year may decide to grant shareholders an option, for
all or part of the dividend or interim dividends, between payment of
the dividend in cash or in shares.
The Shareholders’ Meeting may decide at any time, but only based
on a proposal by the Board of Directors, to make a full or partial
distribution of the amounts in the reserve accounts, either in cash
or in Company shares.
Dividends which have not been claimed at the end of a 5-year
period are forfeited to the French government.
Any amendment to the by-laws must be approved or authorized by the Shareholders’ Meeting voting with the quorum and majority required
by the laws and regulations governing Extraordinary Shareholders’ Meetings.
(1) This term is not interrupted and the right acquired is retained in case of a conversion of bearer to bearer pursuant to intestate or testamentary succession, share of community property
between spouses or donation to the spouse or relatives entitled to inherit (Article 18 § 6 of by-laws).
174
TOTAL. Registration Document 2011
General information 8
Other matters
2.6. Shareholders’ meetings
2.6.1. Notice of meetings
Shareholders’ Meetings are convened and conducted under
the conditions provided for by law.
2.6.2. Admission to meetings
Participation in any form in Shareholders’ Meetings is subject to
registration or record of participating shares. Shares must either be
held in the registered account maintained by the Company (or its
securities agent) or recorded in bearer form in a securities account
maintained by a financial intermediary. Proof of this registration or
record is obtained under a certificate of participation (attestation
de participation) delivered to the shareholder. This registration or
recording of the shares must be effective no later than a “record
date” at 0:00 a.m. (Paris time) the third business days preceeding
the date of the Shareholders’ Meeting. If, after having received such
a certificate, shares are sold or transferred prior to this record date,
the certificate of participation will be canceled and the votes sent
by mail or proxies granted to the Company for such shares will be
canceled accordingly. If shares are sold or transferred after this
record date, the certificate of participation will remain valid and
votes cast or proxies granted will be taken into account.
2.7. Thresholds to be declared according to the by-laws
Any individual or entity who directly or indirectly acquires a
percentage of the share capital, voting rights or rights giving future
access to the share capital of the Company which is equal to or
greater than 1%, or a multiple of this percentage, is required to
notify the Company within fifteen days by registered mail with return
receipt requested, and declare the number of securities held.
They are also required to notify the Company in due form and
within the time limits stated for the aforementioned thresholds
when their direct or indirect holdings fall below each of the
aforementioned thresholds.
2.8. Changes in the share capital
The Company’s share capital may be changed only under the
conditions stipulated by the legal and regulatory provisions in force.
No provision of the by-laws, charter, or internal regulations provide
for more stringent conditions than the law governing changes
in the Company’s share capital.
3. Other matters
3.1. Employee incentives and profit-sharing
On June 26, 2009, a new incentive agreement and a profit-sharing
agreement was signed for 2009, 2010 and 2011, concerning
TOTAL S.A., CDF Énergie, Elf Exploration Production, Total
Exploration Production France, Total Fluides, Total Additifs et
Carburants Spéciaux, TIGF, Total Raffinage Marketing, Total
Lubrifiants, and Totalgaz. The amount of the special profit-sharing
and incentive reserve to be distributed by all of the companies that
signed the Group agreements for fiscal year 2011 would total
approximately €126 million.
3.2. Pension savings plan
Pursuant to French law 2003-775 of August 21, 2003 reforming
pensions, an agreement was signed with the unions on
September 29, 2004 to set up, as of January 1, 2005, a Collective
Retirement Savings Plan (PERCO) replacing the Voluntary
Partnerships Plan for Employee Savings (PPESV) created in the
Company savings plans give employees of the Group’s companies
covered by these plans the ability to make discretionary
contributions (which the Company may, under certain conditions,
supplement) to the plans invested in the shares of the Company
(see paragraph 6.2 of Chapter 5).
The Group made gross additional contributions (“abondement”) to
various savings plans that totaled €72 million in 2011.
agreement of March 15, 2002. An amendment to this agreement
signed on December 20, 2005, allows for an increase in France
of the employee and Company contributions and for contribution
of incentives bonuses and/or profit-sharing.
Registration Document 2011. TOTAL
175
8 General information
Documents on display
3.3. Agreements mentioned in Article L. 225-100-3 of the French Commercial Code
There are no agreements mentioned in paragraph 9 or 10 of Article L. 225-100-3 of the French Commercial Code.
3.4. Filing of Form 20-F with the United States Securities
and Exchange Commission
In order to meet its obligations related to the listing of its shares in
the United States, the Company files, along with this Registration
Document, an annual report on Form 20-F, in English, with the SEC.
Pursuant to the requirements introduced by Section 302 of the
Sarbanes-Oxley Act of July 30, 2002, the Chairman and Chief
Executive Officer and the Chief Financial Officer of the Company
have conducted, with the assistance of the General Management,
an evaluation of the effectiveness of the disclosure controls and
procedures as defined by U.S. regulations, over the period covered
by the Form 20-F. For 2011, the Chairman and Chief Executive
Officer and the Chief Financial Officer concluded that the disclosure
controls and procedures were effective.
4. Documents on display
Documents and information concerning TOTAL S.A., including its
charter, by-laws and the Company’s statutory and consolidated
financial statements for the year ended December 31, 2011 or for
previous fiscal years may be consulted at the Company’s registered
office pursuant to the legal and regulatory provisions in force.
TOTAL’s registration documents filed with the French Financial
Markets Authority (Autorité des marchés financiers) for each of the
past five fiscal years, the first half financial statements, the first half
Group presentations of its results and outlook, as well as the
quarterly financial reports, are available on the Company’s website
(www.total.com, Investor/Regulated Information in France).
Furthermore, the annual summary for information publicly disclosed
by TOTAL S.A., as provided for by Article L. 451-1-1 of the French
Financial and Monetary Code, are also available on the Company’s
website (www.total.com, heading Investor/Publications).
5. Information on holdings
5.1. General information
As of December 31, 2011, there were 870 consolidated subsidiaries,
of which 783 were fully consolidated and 87 were accounted for under
the equity method.
TOTAL S.A.’s equity or of the consolidated net assets of the Group,
or which has generated at least 10% of the TOTAL S.A.’s net income
or of the Group’s consolidated net income during the last year.
TOTAL S.A.’s scope of consolidation includes at least all companies
in which the Company holds a direct or indirect interest, the book
value of which on that date is at least equal to 10% of the amount of
A list of the principal companies consolidated by TOTAL S.A. is
provided in a summary table in Note 35 to the consolidated financial
statements of this Registration Document (point 7, Chapter 9).
5.2. TOTAL’s interest in Sanofi
Following an amendment, signed in November 2003, to the
shareholders’ agreement concluded in 1999 between
TOTAL and L’Oréal, both companies declared that they were not
acting in concert regarding Sanofi (1) as of December 2004,
the termination date of the agreement. However, each one of the
companies had committed itself for a period of three years,
starting from the date of termination of the agreement, to inform
the other company of any intention to sell more than 1% of Sanofi’s
share capital. The notification was to be sent at least two months
prior to the disposal date. Consequently, this obligation of prior
notification agreed between the parties expired in December 2007.
(1) Listed company that has been deconsolidated since July 1, 2010.
176
TOTAL. Registration Document 2011
General information 8
Information on holdings
In 2011, TOTAL’s holdings in Sanofi, held indirectly through
its subsidiary Elf Aquitaine, decreased from 5.51% of the share
capital and 9.15% of the voting rights (i.e. 72,186,832 shares for
139,195,845 voting rights) as of December 31, 2010 (1), to 3.22%
of the share capital and 5.46% of the voting rights (i.e. 43,196,815
shares for 83,205,828 voting rights) as of December 31, 2011 (2).
On April 29, 2011, TOTAL S.A. declared in the AMF notice
No. 211C0548, that its capital interest in Sanofi indirectly fell below
the 5% threshold on April 28, 2011, pursuant to the disposal
of Sanofi shares on the market, such that the Group held 4.99%
of the share capital and 8.59% of the voting rights of the company.
On February 16, 2012, TOTAL S.A. declared in the AMF notice
No. 212C0276 that on February 15, 2012, its voting rights in Sanofi
indirectly fell below the 5% threshold and that it holds 2.83% of the
share capital and 4.69% of the voting rights of the company,
pursuant to the conversion of registered Sanofi shares to bearer
shares, which caused a decrease in the number of voting rights,
and to the disposal of Sanofi shares on the market.
Over the years 2009 and 2010, TOTAL’s interest in Sanofi
successively changed from 11.29% of the share capital
and 18.16% of the voting rights to 7.33% of the share capital
and 12.29% of the voting rights, and then from 7.33% of the share
capital and 12.29% of the voting rights to 5.51% of the share
capital and 9.15% of the voting rights.
The gradual selling of the Sanofi shares, over the short or medium
term, gives the Group a certain amount of financial flexibility to
adapt its financial resources to its growth and dividend policies.
For a description of Sanofi, please consult the publications
issued by that company.
5.3. TOTAL’s interest in CEPSA
TOTAL has been a shareholder of the Spanish oil and gas company
CEPSA since 1990.
agreement signed by TOTAL and IPIC on February 15, 2011.
TOTAL received €3.7 billion from this transaction.
In July 2011, TOTAL finalized the sale of its entire 48.83% capital
interest in CEPSA to International Petroleum Investment Company
(IPIC). This sale took place upon the occasion of the public
takeover bid launched by IPIC over the entire share capital of
CEPSA, at a price of €28 per share, in accordance with the
As of December 31, 2011, TOTAL no longer holds CEPSA shares,
directly or indirectly. As of December 31, 2010, TOTAL held
(through its indirectly-owned subsidiary Odival) 130,668,240
CEPSA shares out of a total of 267,574,941 outstanding shares,
representing 48.83% of CEPSA’s share capital and voting rights.
5.4. TOTAL’s interest in Novatek
On March 2, 2011, TOTAL announced the signing of an agreement
in principle to acquire a 12.09% capital interest in Novatek, with
both parties intending TOTAL to increase its stake to 15% within
12 months and to 19.40% within 36 months.
TOTAL raised its stake to 14.09% on December 8, 2011, by
acquiring an additional 2% capital interest in Novatek from its
two major shareholders, in the framework of the agreement
concluded in March 2011.
TOTAL acquired its 12.09% capital interest in Novatek on
April 1, 2011 by purchasing shares from Novatek’s two major
shareholders. Further to this transaction, TOTAL is now
represented on the Novatek Board of Directors.
As of December 31, 2011, TOTAL held (through its subsidiary
Total E&P Arctic Russia) 427,722,893 shares out of a total
of 3,036,306,000 outstanding shares, representing 14.09%
of Novatak’s share capital and voting rights.
5.5. TOTAL’s interest in SunPower
On April 28, 2011, SunPower and TOTAL announced the signing
of a strategic agreement for the acquisition by TOTAL, through a
friendly takeover bid (TOB), of 60% of SunPower’s outstanding
shares for a price of $23.25 per share, totaling around $1.4 billion.
The friendly TOB was concluded successfully on June 21, 2011.
TOTAL also signed in 2011 a five-year financial guarantee
agreement with SunPower for a maximum amount of $1 billion,
as well as a liquidity support agreement for a maximum amount
of $600 million for a maximum five-year term.
As of December 31, 2011, TOTAL held (through its subsidiary Total
Gas & Power USA) 59,976,682 shares out of a total of 99,961,091
outstanding shares, representing 60% of SunPower’s share capital
and voting rights.
In January 2012, TOTAL’s interest in SunPower increased to 66%
as results of the Tenesol transaction (see paragraph 2.9.6.1,
Chapter 2).
(1) Based on 1,310,997,785 Sanofi shares to which are attached 1,520,994,059 voting rights as of December 31, 2010.
(2) Based on 1,340,918,811 Sanofi shares to which are attached 1,524,116,740 voting rights as of December 31, 2011.
Registration Document 2011. TOTAL
177
178
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Consolidated Financial Statements
The Consolidated Financial Statements were approved by the Board of Directors on February 9, 2012,
and have not been updated with subsequent events.
1. Statutory auditor’s report on the Consolidated Financial Statements 180
2. Consolidated statement of income 181
3. Consolidated statement of comprehensive income 182
4. Consolidated balance sheet 183
5. Consolidated statement of cash flow 184
6. Consolidated statement of changes in shareholders’ equity 185
7. Notes to the Consolidated Financial Statements 186
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .186
1) Accounting policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .186
2) Main indicators - information by business segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .193
3) Changes in the Group structure, main acquisitions and divestments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .194
4) Business segment information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .197
5) Information by geographical area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .208
6) Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .208
7) Other income and other expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .209
8) Other financial income and expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .209
9) Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .210
10) Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .212
11) Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .213
12) Equity affiliates: investments and loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .215
13) Other investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .217
14) Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .218
15) Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .219
16) Accounts receivable and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .220
17) Shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .221
18) Employee benefits obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .224
19) Provisions and other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .227
20) Financial debt and related financial instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .229
21) Other creditors and accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .235
22) Lease contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .236
23) Commitments and contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .237
24) Related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .240
25) Share-based payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .241
26) Payroll and staff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .248
27) Statement of cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .249
28) Financial assets and liabilities analysis per instruments class and strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .250
29) Fair value of financial instruments (excluding commodity contracts) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .252
30) Financial instruments related to commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .258
31) Financial risks management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .260
32) Other risks and contingent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .266
33) Other information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .271
34) Changes in progress in the Group structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .271
35) Consolidation scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .272
Registration Document 2011. TOTAL
179
9 Consolidated Financial Statements
Statutory auditor’s report on the Consolidated Financial Statements
1. Statutory auditor’s report
on the Consolidated Financial Statements
This is a free translation into English of the statutory auditors’ report on the consolidated financial statements issued in French and it is provided
solely for the convenience of English-speaking users.
The statutory auditors’ report includes information specifically required by French law in such reports, whether modified or not.
This information is presented below the audit opinion on the consolidated financial statements and includes an explanatory paragraph
discussing the auditors’ assessments of certain significant accounting and auditing matters. These assessments were considered for
the purpose of issuing an audit opinion on the consolidated financial statements taken as a whole and not to provide separate assurance
on individual account balances, transactions or disclosures.
This report also includes information relating to the specific verification of information given in the Group’s management report.
This report should be read in conjunction with and construed in accordance with French law and professional auditing standards applicable
in France.
Year ended December 31, 2011
To the Shareholders,
In compliance with the assignment entrusted to us by your General Shareholder’s Annual Meeting, we hereby report to you, for the year
ended 31 December 2011, on:
– the audit of the accompanying consolidated financial statements of TOTAL S.A.;
– the justification of our assessments;
– the specific verification required by law.
These consolidated financial statements have been approved by the Board of Directors. Our role is to express an opinion on these
consolidated financial statements based on our audit.
I. Opinion on the consolidated financial statements
We conducted our audit in accordance with professional standards applicable in France; those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit
involves performing procedures, using sampling techniques or other methods of selection, to obtain audit evidence about the amounts and
disclosures in the consolidated financial statements. An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of accounting estimates made, as well as the overall presentation of the consolidated financial statements. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the consolidated financial statements give a true and fair view of the assets and liabilities and of the financial position of the
Group as at December 31, 2011 and of the results of its operations for the year then ended in accordance with International Financial
Reporting Standards as adopted by the European Union.
II. Justification of our assessments
In accordance with the requirements of article L. 823-9 of the French Commercial Code (Code de commerce) relating to the justification
of our assessments, we bring to your attention the following matters:
As stated in the Note “Introduction” to the consolidated financial statements, some accounting principles applied by TOTAL S.A. involve
a significant amount of assumptions and estimates. Actual results may differ significantly from these estimates, if different assumptions
or circumstances apply. The management reviews these estimates and assumptions on an ongoing basis, by reference to past experience
and various other factors considered as reasonable which form the basis for assessing the carrying amount of assets and liabilities.
These assumptions and estimates are principally related to the application of the successful efforts method for the oil and gas activities,
the depreciation of long-lived assets, the provisions for dismantlement, removal and environmental costs, the valuation of retirement
obligations and the determination of the current and deferred taxation. Detailed information relating to the application of these accounting
principles is given in the notes to the consolidated financial statements.
In order to assess the reasonableness of management’s estimates, we performed audit procedures, using sampling techniques, that entailed
the review of the assumptions and calculations on which the estimates are based on, the comparison of prior years’ actual results to their
related estimates and the review of management’s process for approving the estimates. Additionally, the notes to the financial statements
were reviewed to ensure that appropriate information regarding the estimates used by management had been disclosed.
These assessments were made as part of our audit of the consolidated financial statements taken as a whole; and therefore contributed
to the opinion we formed which is expressed in the first part of this report.
III. Specific verification
As required by law we have also verified, in accordance with professional standards applicable in France, the information relative to the
Group, given in the parent company’s management report.
We have no matters to report as to its fair presentation and its consistency with the consolidated financial statements.
Paris-La Défense, March 7, 2012
French original signed by
KPMG Audit
A division of KPMG S.A.
Jay Nirsimloo
180
TOTAL. Registration Document 2011
The statutory auditors
ERNST & YOUNG Audit
Pascal Macioce
Laurent Vitse
Consolidated Financial Statements 9
Consolidated statement of income
2. Consolidated statement of income
TOTAL
For the year ended December 31,
(M€) (a) 2011 2010 2009
Sales (notes 4 and 5) 184,693 159,269 131,327
Excise taxes (18,143) (18,793) (19,174)
Revenues from sales 166,550 140,476 112,153
Purchases net of inventory variation (note 6) (113,892) (93,171) (71,058)
Other operating expenses (note 6) (19,843) (19,135) (18,591)
Exploration costs (note 6) (1,019) (864) (698)
Depreciation, depletion and amortization of tangible assets and mineral interests (7,506) (8,421) (6,682)
Other income (note 7) 1,946 1,396 314
Other expense (note 7) (1,247) (900) (600)
Financial interest on debt (713) (465) (530)
Financial income from marketable securities & cash equivalents 273 131 132
Cost of net debt (note 29) (440) (334) (398)
Other financial income (note 8) 609 442 643
Other financial expense (note 8) (429) (407) (345)
Equity in income (loss) of affiliates (note 12) 1,925 1,953 1,642
Income taxes (note 9) (14,073) (10,228) (7,751)
Consolidated net income 12,581 10,807 8,629
Group share 12,276 10,571 8,447
Non-controlling interests 305 236 182
Earnings per share (€) 5.46 4.73 3.79
Fully-diluted earnings per share (€) 5.44 4.71 3.78
(a) Except for per share amounts.
Registration Document 2011. TOTAL
181
9 Consolidated Financial Statements
Consolidated statement of comprehensive income
3. Consolidated statement of comprehensive income
TOTAL
For the year ended December 31,
(M€) 2011 2010 2009
Consolidated net income 12,581 10,807 8,629
Other comprehensive income
Currency translation adjustment 1,498 2,231 (244)
Available for sale financial assets 337 (100) 38
Cash flow hedge (84) (80) 128
Share of other comprehensive income of associates, net amount (15) 302 234
Other (2) (7) (5)
Tax effect (55) 28 (38)
Total other comprehensive income (net amount) (note 17) 1,679 2,374 113
Comprehensive income 14,260 13,181 8,742
Group share 13,911 12,936 8,500
Non-controlling interests 349 245 242
182
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Consolidated balance sheet
4. Consolidated balance sheet
TOTAL
As of December 31,
(M€)
ASSETS 2011 2010 2009
Non-current assets
Intangible assets, net (notes 5 and 10) 12,413 8,917 7,514
Property, plant and equipment, net (notes 5 and 11) 64,457 54,964 51,590
Equity affiliates: investments and loans (note 12) 12,995 11,516 13,624
Other investments (note 13) 3,674 4,590 1,162
Hedging instruments of non-current financial debt (note 20) 1,976 1,870 1,025
Other non-current assets (note 14) 4,871 3,655 3,081
Total non-current assets 100,386 85,512 77,996
Current assets
Inventories, net (note 15) 18,122 15,600 13,867
Accounts receivable, net (note 16) 20,049 18,159 15,719
Other current assets (note 16) 10,767 7,483 8,198
Current financial assets (note 20) 700 1,205 311
Cash and cash equivalents (note 27) 14,025 14,489 11,662
Total current assets 63,663 56,936 49,757
Assets classified as held for sale (note 34) - 1,270 -
Total assets 164,049 143,718 127,753
LIABILITIES & SHAREHOLDERS’ EQUITY
Shareholders’ equity
Common shares 5,909 5,874 5,871
Paid-in surplus and retained earnings 66,506 60,538 55,372
Currency translation adjustment (988) (2,495) (5,069)
Treasury shares (3,390) (3,503) (3,622)
Total shareholders’ equity - Group share (note 17) 68,037 60,414 52,552
Non-controlling interests 1,352 857 987
Total shareholders’ equity 69,389 61,271 53,539
Non-current liabilities
Deferred income taxes (note 9) 12,260 9,947 8,948
Employee benefits (note 18) 2,232 2,171 2,040
Provisions and other non-current liabilities (note 19) 10,909 9,098 9,381
Non-current financial debt (note 20) 22,557 20,783 19,437
Total non-current liabilities 47,958 41,999 39,806
Current liabilities
Accounts payable 22,086 18,450 15,383
Other creditors and accrued liabilities (note 21) 14,774 11,989 11,908
Current borrowings (note 20) 9,675 9,653 6,994
Other current financial liabilities (note 20) 167 159 123
Total current liabilities 46,702 40,251 34,408
Liabilities directly associated with the assets classified as held for sale (note 34) - 197 -
Total liabilities and shareholders’ equity 164,049 143,718 127,753
Registration Document 2011. TOTAL
183
9 Consolidated Financial Statements
Consolidated statement of cash flow
5. Consolidated statement of cash flow
TOTAL
(note 27)
For the year ended December 31,
(M€) 2011 2010 2009
CASH FLOW FROM OPERATING ACTIVITIES
Consolidated net income 12,581 10,807 8,629
Depreciation, depletion and amortization 8,628 9,117 7,107
Non-current liabilities, valuation allowances, and deferred taxes 1,665 527 441
Impact of coverage of pension benefit plans - (60) -
(Gains) losses on disposals of assets (1,590) (1,046) (200)
Undistributed affiliates’ equity earnings (107) (470) (378)
(Increase) decrease in working capital (1,739) (496) (3,316)
Other changes, net 98 114 77
Cash flow from operating activities 19,536 18,493 12,360
CASH FLOW USED IN INVESTING ACTIVITIES
Intangible assets and property, plant and equipment additions (17,950) (13,812) (11,849)
Acquisitions of subsidiaries, net of cash acquired (854) (862) (160)
Investments in equity affiliates and other securities (4,525) (654) (400)
Increase in non-current loans (1,212) (945) (940)
Total expenditures (24,541) (16,273) (13,349)
Proceeds from disposals of intangible assets and property, plant and equipment 1,439 1,534 138
Proceeds from disposals of subsidiaries, net of cash sold 575 310 -
Proceeds from disposals of non-current investments 5,691 1,608 2,525
Repayment of non-current loans 873 864 418
Total divestments 8,578 4,316 3,081
Cash flow used in investing activities (15,963) (11,957) (10,268)
CASH FLOW USED IN FINANCING ACTIVITIES
Issuance (repayment) of shares:
– Parent company shareholders 481 41 41
– Treasury shares - 49 22
Dividends paid:
– Parent company shareholders (5,140) (5,098) (5,086)
– Non-controlling interests (172) (152) (189)
Other transactions with non-controlling interests (573) (429) -
Net issuance (repayment) of non-current debt 4,069 3,789 5,522
Increase (decrease) in current borrowings (3,870) (731) (3,124)
Increase (decrease) in current financial assets and liabilities 896 (817) (54)
Cash flow used in financing activities (4,309) (3,348) (2,868)
Net increase (decrease) in cash and cash equivalents (736) 3,188 (776)
Effect of exchange rates 272 (361) 117
Cash and cash equivalents at the beginning of the period 14,489 11,662 12,321
Cash and cash equivalents at the end of the period 14,025 14,489 11,662
184
TOTAL. Registration Document 2011
Consolidated statement of changes in shareholders’ equity
Consolidated Financial Statements 9
6. Consolidated statement of changes in shareholders’ equity
TOTAL
(M€)
Common shares issued Paid-in surplus
and retained
earnings
Number Amount
Currency
translation
adjustment
Treasury shares Shareholders’
equity -
Group share
Number Amount
Non-
controlling
interests
Total
shareholders’
equity
As of Janurary 1, 2009 2,371,808,074 5,930 52,947 (4,876) (143,082,095) (5,009) 48,992 958 49,950
Net income 2009 - - 8,447 - - - 8,447 182 8,629
Other comprehensive
income (note 17) - - 246 (193) - - 53 60 113
Comprehensive income - - 8,693 (193) - - 8,500 242 8,742
Dividend - - (5,086) - - - (5,086) (189) (5,275)
Issuance of common
shares (note 17) 1,414,810 3 38 - - - 41 - 41
Purchase of treasury shares - - - - - - - - -
Sale of treasury shares (a) - - (143) - 2,874,905 165 22 - 22
Share-based payments (note 25) - - 106 - - - 106 - 106
Share cancellation (note 17) (24,800,000) (62) (1,160) - 24,800,000 1,222 - - -
Other operations
with non-controlling interests - - (23) - - - (23) (24) (47)
Other items - - - - - - - - -
As of December 31, 2009 2,348,422,884 5,871 55,372 (5,069) (115,407,190) (3,622) 52,552 987 53,539
Net income 2010 - - 10,571 - - - 10,571 236 10,807
Other comprehensive
income (note 17) - - (216) 2,581 - - 2,365 9 2,374
Comprehensive income - - 10,355 2,581 - - 12,936 245 13,181
Dividend - - (5,098) - - - (5,098) (152) (5,250)
Issuance of common
shares (note 17) 1,218,047 3 38 - - - 41 - 41
Purchase of treasury shares - - - - - - - - -
Sale of treasury shares (a) - - (70) - 2,919,511 119 49 - 49
Share-based payments (note 25) - - 140 - - - 140 - 140
Share cancellation (note 17) - - - - - - - - -
Other operations
with non-controlling interests - - (199) (7) - - (206) (223) (429)
Other items - - - - - - - - -
As of December 31, 2010 2,349,640,931 5,874 60,538 (2,495) (112,487,679) (3,503) 60,414 857 61,271
Net income 2011 - - 12,276 - - - 12,276 305 12,581
Other comprehensive
income (note 17) - - 231 1,404 - - 1,635 44 1,679
Comprehensive income - - 12,507 1,404 - - 13,911 349 14,260
Dividend - - (6,457) - - - (6,457) (172) (6,629)
Issuance of common
shares (note 17) 14,126,382 35 446 - - - 481 - 481
Purchase of treasury shares - - - - - - - - -
Sale of treasury shares (a) - - (113) - 2,933,506 113 - - -
Share-based payments (note 25) - - 161 - - - 161 - 161
Share cancellation (note 17) - - - - - - - - -
Other operations
with non-controlling interests - - (553) 103 - - (450) (123) (573)
Other items - - (23) - - - (23) 441 418
As of December 31, 2011 2,363,767,313 5,909 66,506 (988) (109,554,173) (3,390) 68,037 1,352 69,389
(a) Treasury shares related to the stock option purchase plans and restricted stock grants.
Registration Document 2011. TOTAL
185
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
7. Notes to the Consolidated Financial Statements
On February 9, 2012, the Board of Directors established and authorized the publication of the Consolidated Financial Statements of TOTAL S.A.
for the year ended December 31, 2011, which will be submitted for approval to the shareholders’ meeting to be held on May 11, 2012.
Introduction
The Consolidated Financial Statements of TOTAL S.A. and its
subsidiaries (the Group) are presented in Euros and have been
prepared on the basis of IFRS (International Financial Reporting
Standards) as adopted by the European Union and IFRS as issued
by the IASB (International Accounting Standard Board) as of
December 31, 2011.
The accounting principles applied in the Consolidated Financial
Statements as of December 31, 2011 were the same as those
that were used as of December 31, 2010 except for amendments
and interpretations of IFRS which were mandatory for the periods
beginning after January 1, 2011 (and not early adopted). Their
adoption has no material impact on the Consolidated Financial
Statements as of December 31, 2011.
The preparation of financial statements in accordance with IFRS
requires the management to make estimates and assumptions
that affect the reported amounts of assets, liabilities and contingent
liabilities at the date of preparation of the financial statements and
reported income and expenses for the period. The management
reviews these estimates and assumptions on an ongoing basis,
by reference to past experience and various other factors
1) Accounting policies
Pursuant to the accrual basis of accounting followed by the Group,
the financial statements reflect the effects of transactions and other
events when they occur. Assets and liabilities such as property,
plant and equipment and intangible assets are usually measured at
amortized cost. Assets and liabilities are measured at fair value
when required by the standards.
Accounting policies used by the Group are described below:
A) Principles of consolidation
Subsidiaries that are directly controlled by the parent company or
indirectly controlled by other consolidated subsidiaries are fully
consolidated.
Investments in jointly-controlled entities are consolidated under the
equity method. The Group accounts for jointly-controlled operations
and jointly-controlled assets by recognising its share of assets,
liabilities, income and expenses.
Investments in associates, in which the Group has significant
influence, are accounted for by the equity method. Significant
influence is presumed when the Group holds, directly or indirectly
(e.g. through subsidiaries), 20% or more of the voting rights.
Companies in which ownership interest is less than 20%, but over
which the Company is deemed to exercise significant influence, are
also accounted for by the equity method.
All significant intercompany balances, transactions and income are
eliminated.
considered as reasonable which form the basis for assessing
the carrying amount of assets and liabilities. Actual results may
differ significantly from these estimates, if different assumptions
or circumstances apply. These judgments and estimates relate
principally to the application of the successful efforts method for
the oil and gas accounting, the valuation of long-lived assets,
the provisions for asset retirement obligations and environmental
remediation, the pensions and post-retirements benefits and the
income tax computation.
Furthermore, where the accounting treatment of a specific
transaction is not addressed by any accounting standard or
interpretation, the management applies its judgment to define
and apply accounting policies that will lead to relevant and reliable
information, so that the financial statements:
– give a true and fair view of the Group’s financial position,
financial performance and cash flows;
– reflect the substance of transactions;
– are neutral;
– are prepared on a prudent basis; and
– are complete in all material aspects.
B) Business combinations
Business combinations are accounted for using the acquisition
method. This method implies the recognition of the acquired
identifiable assets, assumed liabilities and any non-controlling
interests in the companies acquired by the Group at their fair value.
The acquirer shall recognize goodwill at the acquisition date, being
the excess of:
– The consideration transferred, the amount of non-controlling
interests and, in business combinations achieved in stages, the
fair value at the acquisition date of the investment previously held
in the acquired company;
– Over the fair value at the acquisition date of acquired identifiable
assets and assumed liabilities.
If the consideration transferred is lower than the fair value of
acquired identifiable assets and assumed liabilities, an additional
analysis is performed on the identification and valuation of the
identifiable elements of the assets and liabilities. Any residual
badwill is recorded as income.
In transactions with non-controlling interests, the difference
between the price paid (received) and the book value of non-
controlling interests acquired (sold) is recognized directly in equity.
The purchase price allocation is finalized within one year from the
acquisition date.
186
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
Non-monetary contributions by venturers to a jointly-controlled
entity in exchange for an equity interest in the jointly-controlled
entity are accounted for by applying guidance provided in SIC 13
“Jointly Controlled Entities – Non-Monetary Contributions by
Venturers”. A gain or loss on disposal of the previously held
investment is recorded up to the share of the co-venturer in the
jointly controlled entity.
C) Foreign currency translation
The financial statements of subsidiaries are prepared in the
currency that most clearly reflects their business environment.
This is referred to as their functional currency.
(i) Monetary transactions
Transactions denominated in foreign currencies other than the
functional currency of the entity are translated at the exchange rate on
the transaction date. At each balance sheet date, monetary assets
and liabilities are translated at the closing rate and the resulting
exchange differences are recognized in the statement of income.
(ii) Translation of financial statements
denominated in foreign currencies
Assets and liabilities of foreign entities are translated into euros on
the basis of the exchange rates at the end of the period. The
income and cash flow statements are translated using the average
exchange rates for the period. Foreign exchange differences
resulting from such translations are either recorded in shareholders’
equity under “Currency translation adjustments” (for the Group
share) or under “Non-controlling interests” (for the share of
non-controlling interests) as deemed appropriate.
D) Sales and revenues from sales
Sales figures include excise taxes collected by the Group within the
course of its oil distribution operations. Excise taxes are deducted
from sales in order to obtain the “Revenues from sales” indicator.
(i) Sale of goods
Revenues from sales are recognized when the significant risks and
rewards of ownership have been passed to the buyer and when the
amount is recoverable and can be reasonably measured.
Revenues from sales of crude oil, natural gas and coal are recorded
upon transfer of title, according to the terms of the sales contracts.
Revenues from the production of crude oil and natural gas
properties, in which the Group has an interest with other producers,
are recognized based on actual volumes sold during the period.
Any difference between volumes sold and entitlement volumes,
based on the Group net working interest, is recognized as “Crude
oil and natural gas inventories” or “Other current assets” or “Other
creditors and accrued liabilities”, as appropriate.
Quantities delivered that represent production royalties and taxes,
when paid in cash, are included in oil and gas sales, except for the
United States and Canada.
Certain transactions within the trading activities (contracts involving
quantities that are purchased to third parties then resold to third
parties) are shown at their net value in sales.
Exchanges of crude oil and petroleum products within normal
trading activities do not generate any income and therefore these
flows are shown at their net value in both the statement of income
and the balance sheet.
(ii) Sale of services
Revenues from services are recognized when the services have
been rendered.
Revenues from gas transport are recognized when services are
rendered. These revenues are based on the quantities transported
and measured according to procedures defined in each service
contract.
Shipping revenues and expenses from time-charter activities are
recognized on a pro rata basis over a period that commences upon
the unloading of the previous voyage and terminates upon the
unloading of the current voyage. Shipping revenue recognition
starts only when a charter has been agreed to by both the Group
and the customer.
E) Share-based payments
The Group may grant employees stock options, create employee
share purchase plans and offer its employees the opportunity to
subscribe to reserved capital increases. These employee benefits
are recognized as expenses with a corresponding credit to
shareholders’ equity.
The expense is equal to the fair value of the instruments granted.
The fair value of the options is calculated using the Black-Scholes
model at the grant date. The expense is recognized on a straight-
line basis between the grant date and vesting date.
For restricted share plans, the expense is calculated using the
market price at the grant date after deducting the expected
distribution rate during the vesting period.
The cost of employee-reserved capital increases is immediately
expensed. A discount reduces the expense in order to account for
the nontransferability of the shares awarded to the employees over
a period of five years.
F) Income taxes
Income taxes disclosed in the statement of income include the
current tax expenses and the deferred tax expenses.
The Group uses the method whereby deferred income taxes are
recorded based on the temporary differences between the carrying
amounts of assets and liabilities recorded in the balance sheet and
their tax bases, and on carry-forwards of unused tax losses and
tax credits.
Deferred tax assets and liabilities are measured using the tax rates
that have been enacted or substantially enacted at the balance
sheet date. The tax rates used depend on the timing of reversals
of temporary differences, tax losses and other tax credits.
The effect of a change in tax rate is recognized either in the
Consolidated Statement of Income or in shareholders’ equity
depending on the item it relates to.
Deferred tax assets are recognized when future recovery is probable.
Asset retirement obligations and finance leases give rise to the
recognition of assets and liabilities for accounting purposes as
described in paragraph K “Leases” and paragraph Q “Asset
retirement obligations” of this Note. Deferred income taxes resulting
from temporary differences between the carrying amounts and tax
bases of such assets and liabilities are recognized.
Deferred tax liabilities resulting from temporary differences between
the carrying amounts of equity-method investments and their tax
Registration Document 2011. TOTAL
187
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
bases are recognized. The deferred tax calculation is based on the
expected future tax effect (dividend distribution rate or tax rate on
the gain or loss upon disposal of these investments).
G) Earnings per share
Earnings per share is calculated by dividing net income (Group share)
by the weighted-average number of common shares outstanding
during the period, excluding TOTAL shares held by TOTAL S.A.
(Treasury shares) and TOTAL shares held by the Group subsidiaries
which are deducted from consolidated shareholders’ equity.
Diluted earnings per share is calculated by dividing net income
(Group share) by the fully-diluted weighted-average number of
common shares outstanding during the period. Treasury shares
held by the parent company, TOTAL S.A., and TOTAL shares held
by the Group subsidiaries are deducted from consolidated
shareholders’ equity. These shares are not considered outstanding
for purposes of this calculation which also takes into account the
dilutive effect of stock options, share grants and capital increases
with a subscription period closing after the end of the fiscal year.
The weighted-average number of fully-diluted shares is calculated
in accordance with the treasury stock method provided for by IAS 33.
The proceeds, which would be recovered in the event of an
exercise of rights related to dilutive instruments, are presumed to
be a share buyback at the average market price over the period.
The number of shares thereby obtained leads to a reduction in the
total number of shares that would result from the exercise of rights.
H) Oil and gas exploration
and producing properties and mining activity
The Group applies IFRS 6 “Exploration for and Evaluation of
Mineral Resources”. Oil and gas exploration and production
properties and assets are accounted for in accordance with
the successful efforts method.
(i) Exploration costs
Geological and geophysical costs, including seismic surveys for
exploration purposes are expensed as incurred.
Mineral interests are capitalized as intangible assets when acquired.
These acquired interests are tested for impairment on a regular
basis, property-by-property, based on the results of the exploratory
activity and the management’s evaluation.
In the event of a discovery, the unproved mineral interests are
transferred to proved mineral interests at their net book value as
soon as proved reserves are booked.
- the Group is making sufficient progress assessing the reserves
and the economic and operating viability of the project. This
progress is evaluated on the basis of indicators such as
whether additional exploratory works are under way or firmly
planned (wells, seismic or significant studies), whether costs
are being incurred for development studies and whether the
Group is waiting for governmental or other third-party
authorization of a proposed project, or availability of capacity
on an existing transport or processing facility.
Costs of exploratory wells not meeting these conditions are
charged to expense.
(ii) Oil and Gas producing assets
Development costs incurred for the drilling of development wells
and for the construction of production facilities are capitalized,
together with borrowing costs incurred during the period of
construction and the present value of estimated future costs of
asset retirement obligations. The depletion rate is usually equal
to the ratio of oil and gas production for the period to proved
developed reserves (unit-of-production method).
With respect to production sharing contracts, this computation is
based on the portion of production and reserves assigned to the
Group taking into account estimates based on the contractual
clauses regarding the reimbursement of exploration, development
and production costs (cost oil) as well as the sharing of
hydrocarbon rights (profit oil).
Transportation assets are depreciated using the unit-of-production
method based on throughput or by using the straight-line method
whichever best reflects the economic life of the asset.
Proved mineral interests are depreciated using the unit-of-production
method based on proved reserves.
(iii) Mining activity
Before an assessment can be made on the existence of resources,
exploration costs, including studies and core drilling campaigns as
a whole, are expensed.
When the assessment concludes that resources exist, the costs
engaged subsequently to this assessment are capitalized temporarily
while waiting for the field final development decision, if a positive
decision is highly probable. Otherwise, these costs are expensed.
Once the development decision is taken, the predevelopment costs
capitalized temporarily are integrated with the cost of development
and depreciated from the start of production at the same pace than
development assets.
Exploratory wells are tested for impairment on a well-by-well
basis and accounted for as follows:
Mining development costs include the initial stripping costs and all
costs incurred to access resources, and particularly the costs of:
− Costs of exploratory wells which result in proved reserves are
capitalized and then depreciated using the unit-of-production
method based on proved developed reserves;
– Surface infrastructures;
– Machinery and mobile equipment which are significantly costly;
– Utilities and off-sites.
− Costs of dry exploratory wells and wells that have not found
proved reserves are charged to expense;
− Costs of exploratory wells are temporarily capitalized until a
determination is made as to whether the well has found proved
reserves if both of the following conditions are met:
- the well has found a sufficient quantity of reserves to justify its
completion as a producing well, if appropriate, assuming that
the required capital expenditures are made;
These costs are capitalized and depreciated either on a straight line
basis or depleted using the UOP method from the start of
production.
I) Goodwill and other intangible
assets excluding mineral interests
Other intangible assets include goodwill, patents, trademarks, and
lease rights.
188
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
Intangible assets are carried at cost, after deducting any
accumulated depreciation and accumulated impairment losses.
Guidance for calculating goodwill is presented in Note 1 paragraph
B to the Consolidated Financial Statements. Goodwill is not
amortized but is tested for impairment annually or as soon as there
is any indication of impairment (see Note 1 paragraph L to the
Consolidated Financial Statements).
In equity affiliates, goodwill is included in the investment book value.
Other intangible assets (except goodwill) have a finite useful life and
are amortized on a straight-line basis over 3 to 20 years depending
on the useful life of the assets.
present value of the minimum lease payments according to the
contract. A corresponding financial debt is recognized as a financial
liability. These assets are depreciated over the corresponding useful
life used by the Group.
Leases that are not finance leases as defined above are recorded
as operating leases.
Certain arrangements do not take the legal form of a lease but
convey the right to use an asset or a group of assets in return for
fixed payments. Such arrangements are accounted for as leases
and are analyzed to determine whether they should be classified as
operating leases or as finance leases.
Research and development
L) Impairment of long-lived assets
Research costs are charged to expense as incurred.
Development expenses are capitalized when the following can be
demonstrated:
− the technical feasibility of the project and the availability of the
adequate resources for the completion of the intangible asset;
− the ability of the asset to generate probable future economic
benefits;
− the ability to measure reliably the expenditures attributable
to the asset; and
− the feasibility and intention of the Group to complete the
intangible asset and use or sell it.
Advertising costs are charged to expense as incurred.
J) Other property, plant and equipment
Other property, plant and equipment are carried at cost, after
deducting any accumulated depreciation and accumulated
impairment losses. This cost includes borrowing costs directly
attributable to the acquisition or production of a qualifying asset
incurred until assets are placed in service. Borrowing costs are
capitalized as follows:
The recoverable amounts of intangible assets and property, plant and
equipment are tested for impairment as soon as any indication of
impairment exists. This test is performed at least annually for goodwill.
The recoverable amount is the higher of the fair value (less costs to
sell) or its value in use.
Assets are grouped into cash-generating units (or CGUs) and
tested. A cash-generating unit is a homogeneous group of assets
that generates cash inflows that are largely independent of the cash
inflows from other groups of assets.
The value in use of a CGU is determined by reference to the
discounted expected future cash flows, based upon the
management’s expectation of future economic and operating
conditions. When this value is less than the carrying amount of the
CGU, an impairment loss is recorded. It is allocated first to goodwill
in counterpart of "Other expenses". These impairment losses are
then allocated to "Depreciation, depletion and amortization of
tangible assets and mineral interests" for property, plant and mineral
interests and to "Other expenses" for other intangible assets.
Impairment losses recognized in prior periods can be reversed
up to the original carrying amount, had the impairment loss not
been recognized. Impairment losses recognized for goodwill cannot
be reversed.
– if the project benefits from a specific funding, the capitalization
of borrowing costs is based on the borrowing rate;
M) Financial assets and liabilities
– if the project is financed by all the Group’s debt, the capitalization
of borrowing costs is based on the weighted average borrowing
cost for the period.
Routine maintenance and repairs are charged to expense as
incurred. The costs of major turnarounds of refineries and large
petrochemical units are capitalized as incurred and depreciated
over the period of time between two consecutive major
turnarounds.
Other property, plant and equipment are depreciated using the
straight-line method over their useful lives, which are as follows:
Furniture, office equipment, machinery and tools
Transportation equipments
Storage tanks and related equipment
Specialized complex installations and pipelines
Buildings
3-12 years
5-20 years
10-15 years
10-30 years
10-50 years
K) Leases
A finance lease transfers substantially all the risks and rewards
incidental to ownership from the lessor to the lessee. These
contracts are capitalized as assets at fair value or, if lower, at the
Financial assets and liabilities are financial loans and receivables,
investments in non-consolidated companies, publicly traded equity
securities, derivatives instruments and current and non-current
financial liabilities.
The accounting treatment of these financial assets and liabilities
is as follows:
(i) Loans and receivables
Financial loans and receivables are recognized at amortized cost.
They are tested for impairment, by comparing the carrying amount of
the assets to estimates of the discounted future recoverable cash
flows. These tests are conducted as soon as there is any evidence
that their fair value is less than their carrying amount, and at least
annually. Any impairment loss is recorded in the statement of income.
(ii) Other investments
These assets are classified as financial assets available for sale and
therefore measured at their fair value. For listed securities, this fair
value is equal to the market price. For unlisted securities, if the fair
value is not reliably determinable, securities are recorded at their
historical value. Changes in fair value are recorded in shareholders’
equity. If there is any evidence of a significant or long-lasting
Registration Document 2011. TOTAL
189
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
impairment loss, a loss is recorded in the Statement of Income.
This impairment is reversed in the statement of income only when
the securities are sold.
(iii) Derivative instruments
The Group uses derivative instruments to manage its exposure
to risks of changes in interest rates, foreign exchange rates and
commodity prices. Changes in fair value of derivative instruments are
recognized in the statement of income or in shareholders’ equity and
are recognized in the balance sheet in the accounts corresponding to
their nature, according to the risk management strategy described in
Note 31 to the Consolidated Financial Statements. The derivative
instruments used by the Group are the following:
(cid:129) Cash management
Financial instruments used for cash management purposes are
part of a hedging strategy of currency and interest rate risks within
global limits set by the Group and are considered to be used for
transactions (held for trading). Changes in fair value are
systematically recorded in the statement of income. The balance
sheet value of those instruments is included in “Current financial
assets” or “Other current financial liabilities”.
(cid:129) Long-term financing
When an external long-term financing is set up, specifically to
finance subsidiaries, and when this financing involves currency
and interest rate derivatives, these instruments are qualified as:
1) Fair value hedge of the interest rate risk on the external debt
and of the currency risk of the loans to subsidiaries. Changes
in fair value of derivatives are recognized in the statement of
income as are changes in fair value of underlying financial debts
and loans to subsidiaries.
The fair value of those hedging instruments of long-term
financing is included in the assets under “Hedging instruments
on non-current financial debt” or in the liabilities under
“Non-current financial debt “for the non-current portion.
The current portion (less than one year) is accounted for in
“Current financial assets” or “Other current financial liabilities”.
In case of the anticipated termination of derivative instruments
accounted for as fair value hedges, the amount paid or received
is recognized in the statement of income and:
- If this termination is due to an early cancellation of the hedged
items, the adjustment previously recorded as revaluation of those
hedged items is also recognized in the statement of income;
- If the hedged items remain in the balance sheet, the adjustment
previously recorded as a revaluation of those hedged items is
spread over the remaining life of those items.
2) Cash flow hedge of the currency risk of the external debt.
Changes in fair value are recorded in equity for the effective
portion of the hedging and in the statement of income for the
ineffective portion of the hedging. Amounts recorded in equity
are transferred to the income statement when the hedged
transaction affects profit or loss.
The fair value of those hedging instruments of long-term
financing is included in the assets under “Hedging instruments
on non-current financial debt” or in the liabilities under “Non-
current financial debt“for the non-current portion. The current
portion (less than one year) is accounted for in “Current financial
assets” or “Other current financial liabilities”.
If the hedging instrument expires, is sold or terminated by
anticipation, gains or losses previously recognized in equity
remain in equity. Amounts are recycled in the income statement
only when the hedged transaction affects profit or loss.
(cid:129) Foreign subsidiaries’ equity hedge
Certain financial instruments hedge against risks related to
the equity of foreign subsidiaries whose functional currency is
not the euro (mainly the dollar). These instruments qualify as
“net investment hedges”. Changes in fair value are recorded in
shareholders’ equity.
The fair value of these instruments is recorded under “Current
financial assets” or”Other current financial liabilities”.
(cid:129) Financial instruments related to commodity contracts
Financial instruments related to commodity contracts, including
crude oil, petroleum products, gas, power and coal purchase/sales
contracts within the trading activities, together with the commodity
contract derivative instruments such as energy contracts and
forward freight agreements, are used to adjust the Group’s
exposure to price fluctuations within global trading limits. According
to the industry practice, these instruments are considered as held
for trading. Changes in fair value are recorded in the statement of
income. The fair value of these instruments is recorded in “Other
current assets” or “Other creditors and accrued liabilities”
depending on whether they are assets or liabilities.
Detailed information about derivatives positions is disclosed in
Notes 20, 28, 29, 30 and 31 to the Consolidated Financial
Statements.
(iv) Current and non-current financial liabilities
Current and non-current financial liabilities (excluding derivatives)
are recognized at amortized cost, except those for which a hedge
accounting can be applied as described in the previous paragraph.
(v) Fair value of financial instruments
Fair values are estimated for the majority of the Group’s financial
instruments, with the exception of publicly traded equity securities
and marketable securities for which the market price is used.
Estimated fair values, which are based on principles such as
discounting future cash flows to present value, must be weighted
by the fact that the value of a financial instrument at a given time
may be influenced by the market environment (liquidity especially),
and also the fact that subsequent changes in interest rates and
exchange rates are not taken into account.
As a consequence, the use of different estimates, methodologies
and assumptions could have a material effect on the estimated fair
value amounts.
The methods used are as follows:
(cid:129) Financial debts, swaps
The market value of swaps and of bonds that are hedged by those
swaps has been determined on an individual basis by discounting
future cash flows with the zero coupon interest rate curves existing
at year-end.
(cid:129) Financial instruments related to commodity contracts
The valuation methodology is to mark to market all open positions
for both physical and paper transactions. The valuations are
determined on a daily basis using observable market data based on
organized and over the counter (OTC) markets. In particular cases
190
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
when market data are not directly available, the valuations are
derived from observable data such as arbitrages, freight or spreads
and market corroboration. For valuation of risks which are the result
of a calculation, such as options for example, commonly known
models are used to compute the fair value.
(cid:129) Other financial instruments
The fair value of the interest rate swaps and of FRA (Forward Rate
Agreement) are calculated by discounting future cash flows on the
basis of zero coupon interest rate curves existing at year-end after
adjustment for interest accrued but unpaid.
Forward exchange contracts and currency swaps are valued on the
basis of a comparison of the negociated forward rates with the rates
in effect on the financial markets at year-end for similar maturities.
Exchange options are valued based on the Garman-Kohlhagen
model including market quotations at year-end.
(cid:129) Fair value hierarchy
IFRS 7 “Financial instruments: disclosures”, amended in 2009,
introduces a fair value hierarchy for financial instruments and
proposes the following three-level classification:
– level 1: quotations for assets and liabilities (identical to the ones
that are being valued) obtained at the valuation date on an active
market to which the entity has access;
– level 2: the entry data are observable data but do not correspond
to quotations for identical assets or liabilities;
– level 3: the entry data are not observable data. For example:
these data come from extrapolation. This level applies when
there is no market or observable data and the company has to
use its own hypotheses to estimate the data that other market
players would have used to determine the fair value of the asset.
Fair value hierarchy is disclosed in Notes 29 and 30 to the
Consolidated Financial Statements.
N) Inventories
Inventories are measured in the Consolidated Financial Statements
at the lower of historical cost or market value. Costs for petroleum
and petrochemical products are determined according to the
FIFO (First-In, First-Out) method and other inventories are
measured using the weighted-average cost method.
Downstream (Refining - Marketing)
Petroleum product inventories are mainly comprised of crude
oil and refined products. Refined products principally consist of
gasoline, kerosene, diesel, fuel oil and heating oil produced by
the Group’s refineries. The turnover of petroleum products does
not exceed two months on average.
Crude oil costs include raw material and receiving costs.
Refining costs principally include the crude oil costs, production
costs (energy, labor, depreciation of producing assets) and
allocation of production overhead (taxes, maintenance, insurance,
etc.). Start-up costs and general administrative costs are excluded
from the cost price of refined products.
Chemicals
Costs of chemical products inventories consist of raw material
costs, direct labor costs and an allocation of production overhead.
Start-up costs and general administrative costs are excluded from
the cost of inventories of chemicals products.
O) Treasury shares
Treasury shares of the parent company held by its subsidiaries or itself
are deducted from consolidated shareholders’ equity. Gains or losses
on sales of treasury shares are excluded from the determination of net
income and are recognized in shareholders’ equity.
P) Provisions and other non-current liabilities
Provisions and non-current liabilities are comprised of liabilities for
which the amount and the timing are uncertain. They arise from
environmental risks, legal and tax risks, litigation and other risks.
A provision is recognized when the Group has a present obligation
(legal or constructive) as a result of a past event for which it is
probable that an outflow of resources will be required and when
a reliable estimate can be made regarding the amount of the
obligation. The amount of the liability corresponds to the best
possible estimate.
Q) Asset retirement obligations
Asset retirement obligations, which result from a legal or
constructive obligation, are recognized based on a reasonable
estimate in the period in which the obligation arises.
The associated asset retirement costs are capitalized as part
of the carrying amount of the underlying asset and depreciated
over the useful life of this asset.
An entity is required to measure changes in the liability for an asset
retirement obligation due to the passage of time (accretion) by
applying a risk-free discount rate to the amount of the liability.
The increase of the provision due to the passage of time is
recognized as “Other financial expense”.
R) Employee benefits
In accordance with the laws and practices of each country, the
Group participates in employee benefit plans offering retirement,
death and disability, healthcare and special termination benefits.
These plans provide benefits based on various factors such as
length of service, salaries, and contributions made to the
governmental bodies responsible for the payment of benefits.
These plans can be either defined contribution or defined benefit
pension plans and may be entirely or partially funded with
investments made in various non-Group instruments such
as mutual funds, insurance contracts, and other instruments.
For defined contribution plans, expenses correspond to the
contributions paid.
Defined benefit obligations are determined according to the
Projected Unit Method. Actuarial gains and losses may arise from
differences between actuarial valuation and projected commitments
(depending on new calculations or assumptions) and between
projected and actual return of plan assets.
The Group applies the corridor method to amortize its actuarial
gains and losses. This method amortizes the net cumulative
actuarial gains and losses that exceed 10% of the greater of the
present value of the defined benefit obligation and the fair value of
plan assets at the opening balance sheet date, over the average
expected remaining working lives of the employees participating
in the plan.
In case of a change in or creation of a plan, the vested portion of
the cost of past services is recorded immediately in the statement
Registration Document 2011. TOTAL
191
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
of income, and the unvested past service cost is amortized over
the vesting period.
U) Non-current assets held for sale
and discontinued operations
The net periodic pension cost is recognized under “Other operating
expenses”.
S) Consolidated Statement of Cash Flows
The Consolidated Statement of Cash Flows prepared in foreign
currencies has been translated into euros using the exchange rate
on the transaction date or the average exchange rate for the period.
Currency translation differences arising from the translation of
monetary assets and liabilities denominated in foreign currency
into euros using the closing exchange rates are shown in the
Consolidated Statement of Cash Flows under “Effect of exchange
rates”. Therefore, the Consolidated Statement of Cash Flows will not
agree with the figures derived from the Consolidated Balance Sheet.
Cash and cash equivalents
Cash and cash equivalents are comprised of cash on hand and
highly liquid short-term investments that are easily convertible into
known amounts of cash and are subject to insignificant risks of
changes in value.
Investments with maturity greater than three months and less than
twelve months are shown under “Current financial assets”.
Pursuant to IFRS 5 “Non-current assets held for sale and discontinued
operations”, assets and liabilities of affiliates that are held for sale
are presented separately on the face of the balance sheet.
Net income from discontinued operations is presented separately
on the face of the statement of income. Therefore, the notes to
the Consolidated Financial Statements related to the statement of
income only refer to continuing operations.
A discontinued operation is a component of the Group for which
cash flows are independent. It represents a major line of business
or geographical area of operations which has been disposed of
or is currently being held for sale.
V) Alternative IFRS methods
For measuring and recognizing assets and liabilities, the following
choices among alternative methods allowable under IFRS have
been made:
– property, plant and equipment, and intangible assets are
measured using historical cost model instead of revaluation
model;
– actuarial gains and losses on pension and other post-
Changes in current financial assets and liabilities are included
in the financing activities section of the Consolidated Statement
of Cash Flows.
employment benefit obligations are recognized according to the
corridor method (see Note 1 paragraph R to the Consolidated
Financial Statements);
Non-current financial debt
Changes in non-current financial debt are presented as the net
variation to reflect significant changes mainly related to revolving
credit agreements.
T) Carbon dioxide emission rights
In the absence of a current IFRS standard or interpretation on
accounting for emission rights of carbon dioxide, the following
principles are applied:
– Emission rights are managed as a cost of production and as
such are recognized in inventories:
- emission rights allocated for free are booked in inventories
with a nil carrying amount;
- purchased emission rights are booked at acquisition cost;
- sales or annual restorations of emission rights consist of decreases
in inventories recognized based on a weighted average cost;
- if the carrying amount of inventories at closing date is higher
than the market value, an impairment loss is recorded.
– At each closing, a provision is recorded in order to materialize the
obligation of emission rights restoration related to the emissions
of the period. This provision is calculated based on estimated
emissions of the period, valued at weighted average cost of the
inventories at the end of the period. It is reversed when the
emission rights are restored.
– If emission rights to be delivered at the end of the compliance
period are higher than emission rights (allocated and purchased)
booked in inventories, the shortage is accounted for as a liability
at market value.
– Forward transactions are recognized at their fair market value in
the balance sheet. Changes in the fair value of such forward
transactions are recognized in the statement of income.
– jointly-controlled entities are consolidated under the equity
method, as provided for in the alternative method of IAS 31
“Interests in joint ventures”.
W) New accounting principles not yet in effect
The standards or interpretations published respectively by the
International Accounting Standards Board (IASB) and the
International Financial Reporting Interpretations Committee (IFRIC)
which were not yet in effect and not adopted by the European
Union at December 31, 2011, are as follows:
– In November 2009, the IASB issued standard IFRS 9 “Financial
Instruments” that introduces new requirements for the
classification and measurement of financial assets, and included
in October 2010 requirements regarding classification and
measurement of financial liabilities. This standard shall be
completed with texts on impairment and hedge accounting.
Under standard IFRS 9, financial assets and liabilities are
generally measured either at fair value through profit or loss or
at amortised cost if certain conditions are met. The standard
should be applicable for annual periods starting on or after
January 1, 2015. The application of the standard as published
in 2010 should not have any material effect on the Group’s
consolidated balance sheet, statement of income and
shareholder’s equity.
– In May 2011, the IASB issued a package of standards on
consolidation: standard IFRS 10 “Consolidated financial
statements”, standard IFRS 11 “Joint arrangements”, standard
IFRS 12 “Disclosure of interests in other entities”, revised
standard IAS 27 “Separate financial statements” and revised
standard IAS 28 “Investments in associates and joint ventures”.
These standards are applicable for annual periods beginning on
or after January 1, 2013. The impact of the application of these
standards is currently assessed by the Group.
192
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
– In June 2011, the IASB issued revised standard IAS 19
“Employee benefits”, which leads in particular to the full
recognition of the net position in respect of employee benefits
obligations (liabilities net of assets) in the balance sheet, to the
elimination of the corridor approach currently used by the Group
and to the obligation to evaluate the expected return on plan
assets on a normative basis (via the discount rate used to
value the debt). This standard is applicable for annual periods
beginning on or after January 1, 2013. The impact of the
application of this standard is currently assessed by the Group.
– In addition, the IASB published in May 2011 standard IFRS 13
“Fair value measurement”, applicable for annual periods
beginning on or after January 1, 2013, and in June 2011 revised
standard IAS 1 “Presentation of financial statements”, applicable
for annual periods beginning on or after July 1, 2012. The
application of these standards should not have any material
effect on the Group’s consolidated balance sheet, statement
of income and shareholder’s equity.
2) Main indicators - information by business segment
Performance indicators excluding the adjustment items, such as
adjusted operating income, adjusted net operating income, and
adjusted net income are meant to facilitate the analysis of the financial
performance and the comparison of income between periods.
Adjustment items
The detail of these adjustment items is presented in Note 4 to the
Consolidated Financial Statements.
Adjustment items include:
(i) Special items
Due to their unusual nature or particular 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, transactions such as restructuring costs or
assets disposals, which are not considered to be representative of
the normal course of business, may be qualified as special items
although they may have occurred within prior years or are likely to
occur again within the coming years.
(ii) The inventory valuation effect
The adjusted results of the Downstream and Chemicals segments
are presented according to the replacement cost method.
This method is used to assess the segments’ performance and
facilitate the comparability of the segments’ performance with
those of its competitors.
In the replacement cost method, which approximates the LIFO
(Last-In, First-Out) method, the variation of inventory values in the
statement of income is, depending on the nature of the inventory,
determined using either the month-end prices differential between
one period and another or the average prices of the period rather
than the historical value. The inventory valuation effect is the
difference between the results according to the FIFO (First-In, First-
Out) and the replacement cost.
(iii) Effect of changes in fair value
As from January 1, 2011, the effect of changes in fair value
presented as adjustment item reflects for some transactions
differences between internal measure of performance used by
TOTAL’s management and the accounting for these transactions
under IFRS.
IFRS requires that trading inventories be recorded at their fair value
using period end spot prices. In order to best reflect the
management of economic exposure through derivative
transactions, internal indicators used to measure performance
include valuations of trading inventories based on forward prices.
Furthermore, TOTAL, in its trading activities, enters into storage
contracts, which future effects are recorded at fair value in Group’s
internal economic performance. IFRS precludes recognition of this
fair value effect.
(iv) Until June 30, 2010, TOTAL’s equity share of adjustment
items reconciling “Business net income” to Net income
attributable to equity holders of Sanofi (see Note 3, paragraph
on the sales of Sanofi shares and loss of significant influence
over Sanofi)
Main indicators
(i) Operating income (measure used to evaluate operating
performance)
Revenue from sales after deducting cost of goods sold and
inventory variations, other operating expenses, exploration
expenses and depreciation, depletion, and amortization.
Operating income excludes the amortization of intangible assets
other than mineral interests, currency translation adjustments and
gains or losses on the disposal of assets.
(ii) Net operating income (measure used to evaluate the return
on capital employed)
Operating income after taking into account the amortization of
intangible assets other than mineral interests, currency translation
adjustments, gains or losses on the disposal of assets, as well as
all other income and expenses related to capital employed
(dividends from non-consolidated companies, equity in income of
affiliates, capitalized interest expenses), and after income taxes
applicable to the above.
The only income and expense not included in net operating income
but included in net income are interest expenses related to net
financial debt, after applicable income taxes (net cost of net debt)
and non-controlling interests.
(iii) Adjusted income
Operating income, net operating income, or net income excluding
the effect of adjustment items described above.
(iv) Fully-diluted adjusted earnings per share
Adjusted net income divided by the fully-diluted weighted-average
number of common shares.
Registration Document 2011. TOTAL
193
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
(v) Capital employed
(vii) ROE (Return on Equity)
Non-current assets and working capital, at replacement cost,
net of deferred income taxes and non-current liabilities.
(vi) ROACE (Return on Average Capital Employed)
Ratio of adjusted consolidated net income to average adjusted
shareholders’ equity (after distribution) between the beginning and
the end of the period.
Ratio of adjusted net operating income to average capital employed
between the beginning and the end of the period.
(viii) Net debt
Non-current debt, including current portion, current borrowings,
other current financial liabilities less cash and cash equivalents and
other current financial assets.
3) Changes in the Group structure, main acquisitions and divestments
This cooperation is developed around the two following axes:
- In April 2011, TOTAL took a 12.09% shareholding in Novatek
for an amount of €2,901 million ($4,108 million). In
December 2011, TOTAL finalized the acquisition of an
additional 2% interest in Novatek for an amount of €596 million
($796 million), increasing TOTAL’s overall interest in Novatek
to 14.09%. TOTAL considers that it has a significant influence
especially through its representation on the Board of Directors
of Novatek and its participation in the major Yamal LNG project.
Therefore, the interest in Novatek has been accounted for by
the equity method since the second quarter of 2011.
- In October 2011, TOTAL finalized the acquisition of a 20%
interest in the Yamal LNG project and has become Novatek’s
partner in this project.
– After the all-cash tender of $23.25 per share launched on
April 28, 2011 and completed on June 21, 2011, TOTAL has
acquired a 60% stake in SunPower Corp., a U.S. company listed
on Nasdaq with headquarters in San Jose (California), one of the
most established players in the American solar industry. Shares
of SunPower Corp. continue to be traded on the Nasdaq.
The acquisition cost, whose cash payment occurred on
June 21, 2011, amounts to €974 million ($1,394 million).
In accordance with revised IFRS 3, TOTAL is currently
assessing the fair value of identifiable acquired assets, liabilities
and contingent liabilities. Based on available information,
provisional fair value of net assets acquired at 100% amounts
to $1,512 million.
Given the estimated fair value of instruments that are likely to
confer rights to non-controlling interests, provisional goodwill
amounts to $533 million. This goodwill must be allocated within
twelve months from the acquisition date.
During 2011, 2010 and 2009, main changes in the Group structure
and main acquisitions and divestments were as follows:
2011
(cid:129) Upstream
– TOTAL finalized in March 2011 the acquisition from Santos
of an additional 7.5% interest in Australia’s GLNG project.
This increases TOTAL’s overall stake in the project to 27.5%.
The acquisition cost amounts to €202 million ($281 million) and
mainly corresponds to the value of mineral interests that have
been recognized as intangible assets in the consolidated balance
sheet for €227 million.
– In March 2011, Total E&P Canada Ltd., a TOTAL subsidiary,
and Suncor Energy Inc. (Suncor) have finalized a strategic oil
sands alliance encompassing the Suncor-operated Fort Hills
mining project, the TOTAL-operated Joslyn mining project and
the Suncor-operated Voyageur upgrader project. All three assets
are located in the Athabasca region of the province of Alberta,
in Canada.
TOTAL acquired 19.2% of Suncor’s interest in the Fort Hills
project, increasing TOTAL’s overall interest in the project
to 39.2%. Suncor, as operator, holds 40.8%. TOTAL also
acquired a 49% stake in the Suncor-operated Voyageur
upgrader project. For those two acquisitions, the Group paid
€1,937 million (CAD 2,666 million) mainly representing the value
of intangible assets for €474 million and the value of tangible
assets for €1,550 million.
Furthermore, TOTAL sold to Suncor 36.75% interest in the
Joslyn project for €612 million (CAD 842 million). The Group,
as operator, retains a 38.25% interest in the project.
– TOTAL finalized in April 2011 the sale of its 75.8% interest in its
upstream Cameroonian affiliate Total E&P Cameroun to Perenco,
for an amount of €172 million ($247 million), net of cash sold.
– TOTAL and the Russian company Novatek signed in March 2011
two Memorandums of Cooperation to develop the cooperation
between TOTAL on one side, and Novatek and its main
shareholders on the other side.
194
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
Provisional allocation of the acquisition price and the amount of non-controlling interests at the acquisition date are as follows:
(M$)
Intangible assets
Tangible assets
Accounts receivable, net
Other current assets
Other capital employed
Net debt
Net assets of SunPower (100%) as of June 21, 2011
Share attributable at 100% to non-controlling interests
Net assets of SunPower (100%) as of June 21, 2011 to share
Fair value at the acquisition date
465
589
396
223
292
(453)
1,512
(76)
1,436
Group share 60% 861
Goodwill 533
Acquisition cost of SunPower's shares
1,394
Non-controlling interests (40%) 575
Reinclusion of the share attributable at 100% to non-controlling interests 76
Non-controlling interests as of June 21, 2011
651
Since the acquisition date, sales and net income Group share
(before impairment of goodwill) realized by SunPower amount
respectively to $1,447 million and $(56) million. The goodwill
arising from the acquisition of SunPower has been impaired
in 2011 (see Note 4E to the Consolidated Financial Statements).
Acquisition-related costs recognized in the statement of income
for the period amount to €9 million.
As part of the transaction, various agreements were signed,
including a financial guarantee agreement through which TOTAL
guarantees up to $1 billion SunPower’s repayments obligations
under letters of credit that would be issued during the next five
years for the development of solar power plants and large roofs
activities. Furthermore, SunPower’s off-balance sheet
commitments and contractual obligations are now included
in TOTAL’s notes to the Consolidated Financial Statements
(see Note 23 to the Consolidated Financial Statements).
– TOTAL finalized in July 2011 the sale of 10% of its interest in
the Colombian pipeline OCENSA. The Group still holds a 5.2%
interest in this asset.
– TOTAL finalized in September 2011 the acquisition of Esso
Italiana’s interests respectively in the Gorgoglione concession
(25% interest), which contains the Tempa Rossa field, and in two
exploration licenses located in the same area (51.7% for each
one). The acquisition increases TOTAL’s interest in the operated
Tempa Rossa field to 75%.
– TOTAL finalized in December 2011 the sale to Silex Gas Norway
AS, a wholly owned subsidiary of Allianz, of its entire stake in
Gassled (6.4%) and related entities for an amount of €477 million
(NOK 3.7 billion).
– Total E&P USA Inc. signed in December 2011 an agreement to
enter into a Joint Venture with Chesapeake Exploration L.L.C.,
a subsidiary of Chesapeake Energy Corporation, and its partner
EnerVest Ltd. Under the terms of this agreement, TOTAL
acquired a 25% share in Chesapeake’s and EnerVest’s liquids-rich
area of the Utica shale play. TOTAL paid to Chesapeake and
EnerVest €500 million ($696 million) in cash for the acquisition
of these assets. TOTAL will also be committed to pay additional
amounts up to $1.63 billion over a maximum period of 7 years
in the form of a 60% carry of Chesapeake and EnerVest’s future
capital expenditures on drilling and completion of wells within
the Joint Venture. Furthermore, TOTAL will also acquire a 25%
share in any new acreage which will be acquired by Chesapeake
in the liquids-rich area of the Utica shale play.
(cid:129) Downstream
– TOTAL and International Petroleum Investment Company
(a company wholly-owned by the Government of Abu Dhabi)
entered into an agreement on February 15, 2011 for the sale,
to International Petroleum Investment Company (IPIC), of
the 48.83% equity interest held by TOTAL in the share capital of
CEPSA, to be completed within the framework of a public tender
offer being launched by IPIC for all the CEPSA shares not yet
held by IPIC, at a unit purchase price of €28 per CEPSA share.
TOTAL sold to IPIC all of its equity interest in CEPSA and
received, as of July 29, 2011, an amount of €3,659 million.
– TOTAL finalized in October 2011 the sale of most of its Marketing
assets in the United Kingdom, the Channel Islands and the Isle of
Man, to Rontec Investments LLP, a consortium led by Snax 24,
one of the leading independent forecourt operators in the United
Kingdom, for an amount of €424 million (£368 million).
(cid:129) Chemicals
– TOTAL finalized in July 2011 the sale of its photocure and
coatings resins businesses to Arkema for an amount of
€520 million, net of cash sold.
Registration Document 2011. TOTAL
195
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
2010
(cid:129) Upstream
– Total E&P Canada Ltd., a TOTAL subsidiary, signed in July 2010
an agreement with UTS Energy Corporation (UTS) to acquire
UTS Corporation with its main asset, a 20% interest in the Fort
Hills mining project in the Athabasca region of the Canadian
province of Alberta.
Total E&P Canada completed on September 30, 2010 the
acquisition of all UTS shares for a cash amount of 3.08 Canadian
dollars per share. Taking into account the cash held by UTS
and acquired by TOTAL (€232 million), the cost of the acquisition
for TOTAL amounted to €862 million. This amount mainly
represented the value of mineral interests that have been
recognized as intangible assets in the consolidated balance
sheet for €646 million and the value of tangible assets that have
been recognized in the consolidated balance sheet for
€217 million.
– TOTAL completed in September 2010 an agreement for the sale
to BP and Hess of its interests in the Valhall (15.72%) and Hod
(25%) fields, in the Norwegian North Sea, for an amount of
€800 million.
– TOTAL signed in September 2010 an agreement with Santos
and Petronas to acquire a 20% interest in the GLNG project
in Australia. Upon completion of this transaction finalised in
October 2010, the project brought together Santos (45%,
operator), Petronas (35%) and TOTAL (20%).
The acquisition cost amounted to €566 million and it mainly
represented the value of mineral interests that have been
recognized as intangible assets in the consolidated balance
sheet for €617 million.
In addition, TOTAL announced in December 2010 the signature of
an agreement to acquire an additional 7.5% interest in this project.
– TOTAL sold in December 2010 its 5% interest in Block 31,
located in the Angolan ultra deep offshore, to the company China
Sonangol International Holding Limited.
(cid:129) Downstream
– TOTAL and ERG announced in January 2010 that they signed
an agreement to create a joint venture, named TotalErg, by
contribution of the major part of their activities in the refining
and marketing business in Italy. TotalErg has been operational
since October 1st, 2010. The shareholder pact calls for joint
governance as well as operating independence for the new
entity. TOTAL’s interest in TotalErg is 49% and is accounted
for by the equity method (see Note 12 to the Consolidated
Financial Statements).
(cid:129) Chemicals
– TOTAL closed on April 1, 2010 the sale of its consumer specialty
chemicals business, Mapa Spontex, to U.S.-based Jarden
Corporation for an enterprise value of €335 million.
Aquitaine’s share capital and 0.27% of its voting rights, at a price
of €305 per share (including the remaining 2009 dividend). On
April 13, 2010, the French Autorité des marchés financiers (AMF)
issued its clearance decision for this offer.
The public tender offer was open from April 16 to April 29, 2010
inclusive. The Elf Aquitaine shares targeted by the offer which
were not tendered to the offer have been transferred to
TOTAL S.A. under the squeeze out upon payment to the
shareholders equal to the offer price on the first trading day after
the offer closing date, i.e. on April 30, 2010.
On April 30, 2010, TOTAL S.A. announced that, following the
squeeze out, it held 100% of Elf Aquitaine shares, with the
transaction amounting to €450 million.
In application of revised standard IAS 27 “Consolidated and
Separate Financial Statements”, effective for annual periods
beginning on or after January 1, 2010, transactions with
non-controlling interests are accounted for as equity
transactions, i.e. in consolidated shareholder’s equity.
As a consequence, following the squeeze out of the Elf Aquitaine
shares by TOTAL S.A., the difference between the consideration
paid and the book value of non-controlling interests acquired
was recognized directly as a decrease in equity.
– During 2010, TOTAL progressively sold 1.88% of Sanofi’s share
capital, thus reducing its interest to 5.51%.
As from July 1, 2010, given its reduced representation on the
Board of Directors and the decrease in the percentage of voting
rights, TOTAL ceased to have a significant influence over
Sanofi-Aventis and no longer consolidated this investment under
the equity method. The investment in Sanofi is accounted for as
a financial asset available for sale in the line “Other investments”
of the consolidated balance sheet at its fair value, i.e. at the
stock price.
Net income as of December 31, 2010 included a €135 million
gain relating to this change in the accounting treatment.
2009
(cid:129) Upstream
– In December 2009, TOTAL signed an agreement with
Chesapeake Energy Corporation whereby TOTAL acquired
a 25% share in Chesapeake’s Barnett shale gas portfolio located
in the United States (State of Texas). The acquisition cost of
these assets amounted to €1,562 million and it represented the
value of mineral interests that have been recognized as intangible
assets in the consolidated balance sheet for €1,449 million and
the value of tangible assets that have been recognized in the
consolidated balance sheet for €113 million. As no cash
payment has occurred in 2009, a corresponding debt has been
recognized in the sections “Provisions and other non-current
liabilities” and “Other creditors and accrued liabilities” for
€818 million and €744 million respectively.
(cid:129) Corporate
(cid:129) Corporate
– On March 24, 2010, TOTAL S.A. filed a public tender offer
followed by a squeeze out with the French Autorité des Marchés
Financiers (AMF) in order to buy the 1,468,725 Elf Aquitaine
shares that it did not already hold, representing 0.52% of Elf
– During 2009, TOTAL progressively sold 3.99% of Sanofi-Aventis’
share capital, thus reducing its interest to 7.39%. Sanofi-Aventis
is accounted for by the equity method in TOTAL’s Consolidated
Financial Statements for the year ended December 31, 2009.
196
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
4) Business segment information
Financial information by business segment is reported in accordance
with the internal reporting system and shows internal segment
information that is used to manage and measure the performance of
TOTAL. The Group’s activities are conducted through three business
segments:
– the Upstream segment includes the activities of the
Exploration & Production division and the Gas & Power division;
– the Downstream segment includes activities of the
Refining & Marketing division and the Trading & Shipping division;
and
– the Chemicals segment includes Base Chemicals and
Specialties.
The Corporate segment includes the operating and financial
activities of the holding companies (including the investment
in Sanofi).
The operational profit and assets are broken down by business
segment prior to the consolidation and inter-segment adjustments.
Sales prices between business segments approximate market prices.
Furthermore, the Group announced in October 2011 a plan of
reorganization of its business segments Downstream and
Chemicals. The consultation and notification process towards
employee representatives is finished and this reorganization
became effective as of January 1st, 2012.
This plan changed the organization through the creation of:
– a Refining & Chemicals segment that is a major production hub
combining TOTAL’s refining, petrochemicals, fertilizers and
specialty chemicals operations. This segment also includes
Trading & Shipping activities;
– a Supply & Marketing segment that is dedicated to the global
supply and marketing of petroleum products.
Registration Document 2011. TOTAL
197
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
A) Information by business segment
For the year ended December 31, 2011
(M€) Upstream Downstream Chemicals Corporate Intercompany Total
Non-Group sales 23,298 141,907 19,477 11 - 184,693
Intersegment sales 27,301 5,983 1,234 185 (34,703) -
Excise taxes - (18,143) - - - (18,143)
Revenues from sales 50,599 129,747 20,711 196 (34,703) 166,550
Operating expenses (23,079) (126,145) (19,566) (667) 34,703 (134,754)
Depreciation, depletion and amortization
of tangible assets and mineral interests (5,076) (1,908) (487) (35) - (7,506)
Operating income 22,444 1,694 658 (506) - 24,290
Equity in income (loss) of affiliates and other items 1,596 401 471 336 - 2,804
Tax on net operating income (13,506) (409) (225) (38) - (14,178)
Net operating income 10,534 1,686 904 (208) - 12,916
Net cost of net debt - - - - - (335)
Non-controlling interests - - - - - (305)
Net income - - - - - 12,276
For the year ended December 31, 2011
(adjustments(a))
(M€) Upstream Downstream Chemicals Corporate Intercompany Total
Non-Group sales 45 - - - - 45
Intersegment sales - - - - - -
Excise taxes - - - - - -
Revenues from sales 45 - - - - 45
Operating expenses - 1,156 (33) - - 1,123
Depreciation, depletion and amortization
of tangible assets and mineral interests (75) (700) (6) - - (781)
Operating income(b) (30) 456 (39) - - 387
Equity in income (loss) of affiliates and other items 191 256 209 90 - 746
Tax on net operating income (32) (109) (41) (80) - (262)
Net operating income(b) 129 603 129 10 - 871
Net cost of net debt - - - - - -
Non-controlling interests - - - - - (19)
Net income - - - - - 852
(a) Adjustments include special items, inventory valuation effect and, as from January 1st, 2011, the effect of changes in fair value.
(b) Of which inventory valuation effect Upstream Downstream Chemicals Corporate
- on operating income - 1,224 (9) -
- on net operating income - 859 10 -
198
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
For the year ended December 31, 2011 (adjusted)
(M€) (a) Upstream Downstream Chemicals Corporate Intercompany Total
Non-Group sales 23,253 141,907 19,477 11 - 184,648
Intersegment sales 27,301 5,983 1,234 185 (34,703) -
Excise taxes - (18,143) - - - (18,143)
Revenues from sales 50,554 129,747 20,711 196 (34,703) 166,505
Operating expenses (23,079) (127,301) (19,533) (667) 34,703 (135,877)
Depreciation, depletion and amortization
of tangible assets and mineral interests (5,001) (1,208) (481) (35) - (6,725)
Adjusted operating income 22,474 1,238 697 (506) - 23,903
Equity in income (loss) of affiliates and other items 1,405 145 262 246 - 2,058
Tax on net operating income (13,474) (300) (184) 42 - (13,916)
Adjusted net operating income 10,405 1,083 775 (218) - 12,045
Net cost of net debt - - - - - (335)
Non-controlling interests - - - - - (286)
Adjusted net income - - - - - 11,424
Adjusted fully-diluted earnings per share (€) - - - - - 5.06
(a) Except for earnings per share.
For the year ended December 31, 2011
(M€) Upstream Downstream Chemicals Corporate Intercompany Total
Total expenditures 21,689 1,870 847 135 - 24,541
Total divestments 2,656 3,235 1,164 1,523 - 8,578
Cash flow from operating activities 17,054 2,165 512 (195) - 19,536
Balance sheet as of December 31, 2011
Property, plant and equipment, intangible assets, net 64,069 7,918 4,638 245 - 76,870
Investments in equity affiliates 8,932 699 1,118 - - 10,749
Loans to equity affiliates and other non-current assets 4,793 1,749 1,144 3,105 - 10,791
Working capital 1,240 9,627 2,585 (1,374) - 12,078
Provisions and other non-current liabilities (20,095) (2,577) (1,593) (1,136) - (25,401)
Assets and liabilities classified as held for sale - - - - - -
Capital Employed (balance sheet) 58,939 17,416 7,892 840 - 85,087
Less inventory valuation effect - (3,615) (419) 13 - (4,021)
Capital Employed (Business segment information) 58,939 13,801 7,473 853 - 81,066
ROACE as a percentage 20% 7% 10% - - 16%
Registration Document 2011. TOTAL
199
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
For the year ended December 31, 2010
(M€) Upstream Downstream Chemicals Corporate Intercompany Total
Non-Group sales 18,527 123,245 17,490 7 - 159,269
Intersegment sales 22,540 4,693 981 186 (28,400) -
Excise taxes - (18,793) - - - (18,793)
Revenues from sales 41,067 109,145 18,471 193 (28,400) 140,476
Operating expenses (18,271) (105,660) (16,974) (665) 28,400 (113,170)
Depreciation, depletion and amortization
of tangible assets and mineral interests (5,346) (2,503) (533) (39) - (8,421)
Operating income 17,450 982 964 (511) - 18,885
Equity in income (loss) of affiliates and other items 1,533 141 215 595 - 2,484
Tax on net operating income (10,131) (201) (267) 263 - (10,336)
Net operating income 8,852 922 912 347 - 11,033
Net cost of net debt - - - - - (226)
Non-controlling interests - - - - - (236)
Net income - - - - - 10,571
For the year ended December 31, 2010
(adjustments(a))
(M€) Upstream Downstream Chemicals Corporate Intercompany Total
Non-Group sales - - - - - -
Intersegment sales - - - - - -
Excise taxes - - - - - -
Revenues from sales - - - - - -
Operating expenses - 923 92 - - 1,015
Depreciation, depletion and amortization
of tangible assets and mineral interests (203) (1,192) (21) - - (1,416)
Operating income (b) (203) (269) 71 - - (401)
Equity in income (loss) of affiliates and other items (c) 183 (126) (16) 227 - 268
Tax on net operating income 275 149 - (6) - 418
Net operating income (b) 255 (246) 55 221 - 285
Net cost of net debt - - - - - -
Non-controlling interests - - - - - (2)
Net income - - - - - 283
(a) Adjustments include special items, inventory valuation effect and, until June 30, 2010, equity share of adjustments related to Sanofi.
(b) Of which inventory valuation effect Upstream Downstream Chemicals Corporate
- on operating income - 863 130 -
- on net operating income - 640 113 -
(c) Of which equity share of adjustments related to Sanofi - - - (81)
200
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
For the year ended December 31, 2010 (adjusted)
(M€) (a) Upstream Downstream Chemicals Corporate Intercompany Total
Non-Group sales 18,527 123,245 17,490 7 - 159,269
Intersegment sales 22,540 4,693 981 186 (28,400) -
Excise taxes - (18,793) - - - (18,793)
Revenues from sales 41,067 109,145 18,471 193 (28,400) 140,476
Operating expenses (18,271) (106,583) (17,066) (665) 28,400 (114,185)
Depreciation, depletion and amortization
of tangible assets and mineral interests (5,143) (1,311) (512) (39) - (7,005)
Adjusted operating income 17,653 1,251 893 (511) - 19,286
Equity in income (loss) of affiliates and other items 1,350 267 231 368 - 2,216
Tax on net operating income (10,406) (350) (267) 269 - (10,754)
Adjusted net operating income 8,597 1,168 857 126 - 10,748
Net cost of net debt - - - - - (226)
Non-controlling interests - - - - - (234)
Adjusted net income - - - - - 10,288
Adjusted fully-diluted earnings per share (€) - - - - - 4.58
(a) Except for earnings per share.
For the year ended December 31, 2010
(M€) Upstream Downstream Chemicals Corporate Intercompany Total
Total expenditures 13,208 2,343 641 81 - 16,273
Total divestments 2,067 499 347 1,403 - 4,316
Cash flow from operating activities 15,573 1,441 934 545 - 18,493
Balance sheet as of December 31, 2010
Property, plant and equipment, intangible assets, net 50,565 8,675 4,388 253 - 63,881
Investments in equity affiliates 5,002 2,782 1,349 - - 9,133
Loans to equity affiliates and other non-current assets 4,184 1,366 979 4,099 - 10,628
Working capital (363) 9,154 2,223 (211) - 10,803
Provisions and other non-current liabilities (16,076) (2,328) (1,631) (1,181) - (21,216)
Assets and liabilities classified as held for sale 660 - 413 - - 1,073
Capital Employed (balance sheet) 43,972 19,649 7,721 2,960 - 74,302
Less inventory valuation effect - (4,088) (409) 1,061 - (3,436)
Capital Employed (Business segment information) 43,972 15,561 7,312 4,021 - 70,866
ROACE as a percentage 21% 8% 12% - - 16%
Registration Document 2011. TOTAL
201
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
For the year ended December 31, 2009
(M€) Upstream Downstream Chemicals Corporate Intercompany Total
Non-Group sales 16,072 100,518 14,726 11 - 131,327
Intersegment sales 15,958 3,786 735 156 (20,635) -
Excise taxes - (19,174) - - - (19,174)
Revenues from sales 32,030 85,130 15,461 167 (20,635) 112,153
Operating expenses (14,752) (81,281) (14,293) (656) 20,635 (90,347)
Depreciation, depletion and amortization
of tangible assets and mineral interests (4,420) (1,612) (615) (35) - (6,682)
Operating income 12,858 2,237 553 (524) - 15,124
Equity in income (loss) of affiliates and other items 846 169 (58) 697 - 1,654
Tax on net operating income (7,486) (633) (92) 326 - (7,885)
Net operating income 6,218 1,773 403 499 - 8,893
Net cost of net debt - - - - - (264)
Non-controlling interests - - - - - (182)
Net income - - - - - 8,447
For the year ended December 31, 2009
(adjustments(a))
(M€) Upstream Downstream Chemicals Corporate Intercompany Total
Non-Group sales - - - - - -
Intersegment sales - - - - - -
Excise taxes - - - - - -
Revenues from sales - - - - - -
Operating expenses (17) 1,558 344 - - 1,885
Depreciation, depletion and amortization
of tangible assets and mineral interests (4) (347) (40) - - (391)
Operating income (b) (21) 1,211 304 - - 1,494
Equity in income (loss) of affiliates and other items (c) (160) 22 (123) (117) - (378)
Tax on net operating income 17 (413) (50) (3) - (449)
Net operating income (b) (164) 820 131 (120) - 667
Net cost of net debt - - - - - -
Non-controlling interests - - - - - (4)
Net income - - - - - 663
(a) Adjustments include special items, inventory valuation effect and equity share of adjustments related to Sanofi.
(b) Of which inventory valuation effect Upstream Downstream Chemicals Corporate
- on operating income - 1,816 389 -
- on net operating income - 1,285 254 -
(c) Of which equity share of adjustments related to Sanofi - - - (300)
202
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
For the year ended December 31, 2009 (adjusted)
(M€) (a) Upstream Downstream Chemicals Corporate Intercompany Total
Non-Group sales 16,072 100,518 14,726 11 - 131,327
Intersegment sales 15,958 3,786 735 156 (20,635) -
Excise taxes - (19,174) - - - (19,174)
Revenues from sales 32,030 85,130 15,461 167 (20,635) 112,153
Operating expenses (14,735) (82,839) (14,637) (656) 20,635 (92,232)
Depreciation, depletion and amortization
of tangible assets and mineral interests (4,416) (1,265) (575) (35) - (6,291)
Adjusted operating income 12,879 1,026 249 (524) - 13,630
Equity in income (loss) of affiliates and other items 1,006 147 65 814 - 2,032
Tax on net operating income (7,503) (220) (42) 329 - (7,436)
Adjusted net operating income 6,382 953 272 619 - 8,226
Net cost of net debt - - - - - (264)
Non-controlling interests - - - - - (178)
Adjusted net income - - - - - 7,784
Adjusted fully-diluted earnings per share (€) - - - - - 3.48
(a) Except for earnings per share.
For the year ended December 31, 2009
(M€) Upstream Downstream Chemicals Corporate Intercompany Total
Total expenditures 9,855 2,771 631 92 - 13,349
Total divestments 398 133 47 2,503 - 3,081
Cash flow from operating activities 10,200 1,164 1,082 (86) - 12,360
Balance sheet as of December 31, 2009
Property, plant and equipment, intangible assets, net 43,997 9,588 5,248 271 - 59,104
Investments in equity affiliates 4,260 2,110 652 4,235 - 11,257
Loans to equity affiliates and other non-current assets 3,844 1,369 850 547 - 6,610
Working capital 660 7,624 2,151 58 - 10,493
Provisions and other non-current liabilities (15,364) (2,190) (1,721) (1,094) - (20,369)
Assets and liabilities classified as held for sale - - - - - -
Capital Employed (balance sheet) 37,397 18,501 7,180 4,017 - 67,095
Less inventory valuation effect - (3,202) (282) 840 - (2,644)
Capital Employed (Business segment information) 37,397 15,299 6,898 4,857 - 64,451
ROACE as a percentage 18% 7% 4% - - 13%
Registration Document 2011. TOTAL
203
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
B) ROE (Return on Equity)
The Group evaluates the return on equity as the ratio of adjusted consolidated net income to average adjusted shareholders’ equity between
the beginning and the end of the period. Thus, adjusted shareholders’ equity for the year ended December 31, 2011 is calculated after
payment of a dividend of €2.28 per share, subject to approval by the shareholders’ meeting on May 11, 2012.
The ROE is calculated as follows:
For the year ended December 31,
(M€) 2011 2010 2009
Adjusted net income - Group share 11,424 10,288 7,784
Adjusted non-controlling interests 286 234 178
Adjusted consolidated net income 11,710 10,522 7,962
Shareholders' equity - Group share 68,037 60,414 52,552
Distribution of the income based on existing shares at the closing date (1,255) (2,553) (2,546)
Non-controlling interests 1,352 857 987
Adjusted shareholders' equity (a)
68,134 58,718 50,993
ROE 18% 19% 16%
(a) Adjusted shareholders' equity as of December 31, 2008 amounted to €47,410 million.
C) Reconciliation of the information by business segment with consolidated financial statements
The table below presents the impact of adjustment items on the Consolidated Statement of Income:
For the year ended December 31, 2011 Adjusted Adjustments (a) Consolidated
(M€) statement
of income
Sales 184,648 45 184,693
Excise taxes (18,143) - (18,143)
Revenues from sales 166,505 45 166,550
Purchases, net of inventory variation (115,107) 1,215 (113,892)
Other operating expenses (19,751) (92) (19,843)
Exploration costs (1,019) - (1,019)
Depreciation, depletion and amortization of tangible assets and mineral interests (6,725) (781) (7,506)
Other income 430 1,516 1,946
Other expense (536) (711) (1,247)
Financial interest on debt (713) - (713)
Financial income from marketable securities & cash equivalents 273 - 273
Cost of net debt (440) - (440)
Other financial income 609 - 609
Other financial expense (429) - (429)
Equity in income (loss) of affiliates 1,984 (59) 1,925
Income taxes (13,811) (262) (14,073)
Consolidated net income 11,710 871 12,581
Group share 11,424 852 12,276
Non-controlling interests 286 19 305
(a) Adjustments include special items, inventory valuation effect and, as from January 1st, 2011, the effect of changes in fair value.
204
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
For the year ended December 31, 2010 Adjusted Adjustments (a) Consolidated
(M€) statement
of income
Sales 159,269 - 159,269
Excise taxes (18,793) - (18,793)
Revenues from sales 140,476 - 140,476
Purchases, net of inventory variation (94,286) 1,115 (93,171)
Other operating expenses (19,035) (100) (19,135)
Exploration costs (864) - (864)
Depreciation, depletion and amortization of tangible assets and mineral interests (7,005) (1,416) (8,421)
Other income 524 872 1,396
Other expense (346) (554) (900)
Financial interest on debt (465) - (465)
Financial income from marketable securities & cash equivalents 131 - 131
Cost of net debt (334) - (334)
Other financial income 442 - 442
Other financial expense (407) - (407)
Equity in income (loss) of affiliates 2,003 (50) 1,953
Income taxes (10,646) 418 (10,228)
Consolidated net income 10,522 285 10,807
Group share 10,288 283 10,571
Non-controlling interests 234 2 236
(a) Adjustments include special items, inventory valuation effect and, until June 30, 2010, equity share of adjustments related to Sanofi.
For the year ended December 31, 2009 Adjusted Adjustments (a) Consolidated
(M€) statement
of income
Sales 131,327 - 131,327
Excise taxes (19,174) - (19,174)
Revenues from sales 112,153 - 112,153
Purchases, net of inventory variation (73,263) 2,205 (71,058)
Other operating expenses (18,271) (320) (18,591)
Exploration costs (698) - (698)
Depreciation, depletion and amortization of tangible assets and mineral interests (6,291) (391) (6,682)
Other income 131 183 314
Other expense (315) (285) (600)
Financial interest on debt (530) - (530)
Financial income from marketable securities & cash equivalents 132 - 132
Cost of net debt (398) - (398)
Other financial income 643 - 643
Other financial expense (345) - (345)
Equity in income (loss) of affiliates 1,918 (276) 1,642
Income taxes (7,302) (449) (7,751)
Consolidated net income 7,962 667 8,629
Group share 7,784 663 8,447
Non-controlling interests 178 4 182
(a) Adjustments include special items, inventory valuation effect and equity share of adjustments related to Sanofi.
Registration Document 2011. TOTAL
205
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
D) Adjustment items by business segment
The adjustment items for income as per Note 2 to the Consolidated Financial Statements are detailed as follows:
Adjustments to operating income
For the year ended December 31, 2011
(M€) Upstream Downstream Chemicals Corporate Total
Inventory valuation effect - 1,224 (9) - 1,215
Effect of changes in fair value 45 - - - 45
Restructuring charges - - - - -
Asset impairment charges (75) (700) (6) - (781)
Other items - (68) (24) - (92)
Total (30) 456 (39) - 387
Adjustments to net income, Group share
For the year ended December 31, 2011
(M€) Upstream Downstream Chemicals Corporate Total
Inventory valuation effect - 824 10 - 834
Effect of changes in fair value 32 - - - 32
Restructuring charges - (113) (9) - (122)
Asset impairment charges (531) (478) (5) - (1,014)
Gains (losses) on disposals of assets 843 412 209 74 1,538
Other items (202) (74) (76) (64) (416)
Total 142 571 129 10 852
Adjustments to operating income
For the year ended December 31, 2010
(M€) Upstream Downstream Chemicals Corporate Total
Inventory valuation effect - 863 130 - 993
Restructuring charges - - - - -
Asset impairment charges (203) (1,192) (21) - (1,416)
Other items - 60 (38) - 22
Total (203) (269) 71 - (401)
Adjustments to net income, Group share
For the year ended December 31, 2010
(M€) Upstream Downstream Chemicals Corporate Total
Inventory valuation effect - 635 113 - 748
TOTAL’s equity share of adjustments related to Sanofi - - - (81) (81)
Restructuring charges - (12) (41) - (53)
Asset impairment charges (297) (913) (14) - (1,224)
Gains (losses) on disposals of assets 589 122 33 302 1,046
Other items (37) (83) (33) - (153)
Total 255 (251) 58 221 283
Adjustments to operating income
For the year ended December 31, 2009
(M€) Upstream Downstream Chemicals Corporate Total
Inventory valuation effect - 1,816 389 - 2,205
Restructuring charges - - - - -
Asset impairment charges (4) (347) (40) - (391)
Other items (17) (258) (45) - (320)
Total (21) 1,211 304 - 1,494
206
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
Adjustments to net income, Group share
For the year ended December 31, 2009
(M€) Upstream Downstream Chemicals Corporate Total
Inventory valuation effect - 1,279 254 - 1,533
TOTAL’s equity share of adjustments related to Sanofi - - - (300) (300)
Restructuring charges - (27) (102) - (129)
Asset impairment charges (52) (253) (28) - (333)
Gains (losses) on disposals of assets - - - 179 179
Other items (112) (182) 7 - (287)
Total (164) 817 131 (121) 663
E) Additional information on impairments
In the Upstream, Downstream and Chemicals segments,
impairments of assets have been recognized for the year ended
December 31, 2011, with an impact of €781 million in operating
income and €1,014 million in net income, Group share. These
impairments have been disclosed as adjustments to operating
income and adjustments to net income, Group share. These items
are identified in paragraph 4D above as adjustment items with the
heading “Asset impairment charges”.
The impairment losses impact certain Cash Generating Units (CGU)
for which there were indications of impairment, due mainly to
changes in the operating conditions or the economic environment
of their specific businesses.
The principles applied are the following:
– the recoverable amount of CGUs has been based on their value
in use, as defined in Note 1 paragraph L to the Consolidated
Financial Statements “Impairment of long-lived assets”;
– future cash flows have been determined with the assumptions
in the long-term plan of the Group. These assumptions (including
future prices of products, supply and demand for products,
future production volumes) represent the best estimate by
management of the Group of all economic conditions during
the remaining life of assets;
– future cash flows, based on the long-term plan, are prepared
over a period consistent with the life of the assets within the CGU.
They are prepared post-tax and include specific risks attached to
CGU assets. They are discounted using a 8% post-tax discount
rate, this rate being a weighted-average capital cost estimated
from historical market data. This rate has been applied
consistently for the years ending in 2009, 2010 and 2011.
SunPower is a CGU acquired in 2011 for which specific
assumptions were applied because of its own financing and its
listing on Nasdaq. Thus, future cash flows of this CGU have been
discounted using a 14% post-tax discount rate, corresponding
to the weighted-average capital cost of this CGU.
– value in use calculated by discounting the above post-tax cash
flows using a 8% post-tax discount rate is not materially different
from value in use calculated by discounting pre-tax cash flows
using a pre-tax discount rate determined by an iterative
computation from the post-tax value in use. These pre-tax
discount rates are in a range from 10% to 13% in 2011.
SunPower’s pre-tax discount rate is 16%.
The CGUs of the Upstream segment affected by these impairments
are oil fields, assets in solar energy and investments in associates
accounted for by the equity method. For the year ended
December 31, 2011, the Group has recognized impairments with
an impact of €75 million in operating income and €531 million in
net income, Group share. A 10% decrease in hydrocarbons prices
would not lead to additional impairment losses. In 2011, impairment
losses accounted for mainly include the impairment of the whole
goodwill arising from the acquisition of SunPower for €383 million.
Indeed, the stress on public debt markets of some European states
during the second half of 2011, successive austerity plans adopted
by these states and their impact on financial incentives specific to
the solar industry have greatly worsened the financial situation and
forecasts of future cash flows of the solar industry companies,
including SunPower. The market capitalization of these companies
fell sharply in 2011, thus the share price of SunPower as of
December 31, 2011 stood at $6.23 per share, down 73%
compared to the share price at the acquisition date.
The CGUs of the Downstream segment are affiliates or groups of
affiliates (or industrial assets) organized mostly by country for the
refining activities and by relevant geographical area for the
marketing activities. For the refining activities, the unfavorable
trends observed in 2010 have continued in 2011, with a worldwide
context of surplus in refining capacities compared to the demand
for petroleum products. This surplus is still based in Europe with a
falling demand, whereas the emerging countries (Middle East and
Asia) report a strong growth in the consumption of petroleum
products. In this persistent context of deteriorated margins, the
refining CGUs in France and in the United Kingdom have suffered
substantial operating losses despite the constant efforts to improve
operations. This situation, coupled with less favorable outlooks, led
the Group to recognize impairments within the CGUs Refining
France and United Kingdom with an impact of €700 million in
operating income and €478 million in net income, Group share.
A variation of +5% of projections of gross margin in identical
operating conditions would have a positive impact of €676 million
in operating income and €443 million in net income, Group share.
A variation of (1)% of the discount rate would have a positive impact
of €335 million in operating income and €219 million in net income,
Group share. Inverse variations of projections of gross margin and
discount rate would have impacts of respectively €(683) million and
€(249) million in operating income and €(448) million and
€(164) million in net income, Group share.
The CGUs of the Chemicals segment are worldwide business units,
including activities or products with common strategic, commercial
and industrial characteristics. The different scenarios of sensitivity
would not lead to additional impairment losses.
For the year ended December 31, 2010, impairments of assets
have been recognized in the Upstream, Downstream and
Chemicals segments with an impact of €1,416 million in operating
income and €1,224 million in net income, Group share. These
Registration Document 2011. TOTAL
207
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
impairments have been disclosed as adjustments to operating
income and adjustments to net income, Group share.
For the year ended December 31, 2009, impairments of assets
have been recognized in the Upstream, Downstream and
Chemicals segments with an impact of €413 million in operating
income and €382 million in net income, Group share.
These impairments have been disclosed as adjustments to
operating income for €391 million and adjustments to net income,
Group share for €333 million.
For the years ended December 31, 2011, 2010 and 2009,
no reversal of impairment has been recognized.
5) Information by geographical area
(M€) France Rest North Africa Rest of Total
of Europe America the world
For the year ended December 31, 2011
Non-Group sales 42,626 81,453 15,917 15,077 29,620 184,693
Property, plant and equipment, intangible assets, net 5,637 15,576 14,518 23,546 17,593 76,870
Capital expenditures 1,530 3,802 5,245 5,264 8,700 24,541
For the year ended December 31, 2010
Non-Group sales 36,820 72,636 12,432 12,561 24,820 159,269
Property, plant and equipment, intangible assets, net 5,666 14,568 9,584 20,166 13,897 63,881
Capital expenditures 1,062 2,629 3,626 4,855 4,101 16,273
For the year ended December 31, 2009
Non-Group sales 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
6) Operating expenses
For the year ended December 31,
(M€) 2011 2010 2009
Purchases, net of inventory variation (a) (113,892)(b) (93,171) (71,058)
Exploration costs (1,019) (864) (698)
Other operating expenses (c) (19,843) (19,135) (18,591)
of which non-current operating liabilities (allowances) reversals 615 387 515
of which current operating liabilities (allowances) reversals (150) (101) (43)
Operating expenses (134,754) (113,170) (90,347)
(a) Includes taxes paid on oil and gas production in the Upstream segment, namely royalties.
(b) As of December 31, 2011, the Group valued under/over lifting at market value. The impact in operating expenses is €577 million and €103 million in net income, Group share as of
December 31, 2011.
(c) Principally composed of production and administrative costs (see in particular the payroll costs as detailed in Note 26 to the Consolidated Financial Statements “Payroll and staff”).
208
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
7) Other income and other expense
For the year ended December 31,
(M€) 2011 2010 2009
Gains (losses) on disposal of assets 1,650 1,117 200
Foreign exchange gains 118 - -
Other 178 279 114
Other income 1,946 1,396 314
Foreign exchange losses - - (32)
Amortization of other intangible assets (excl. mineral interests) (592) (267) (142)
Other (655) (633) (426)
Other expense (1,247) (900) (600)
Other income
Other expense
In 2011, the heading “Other” is mainly comprised of €243 million
of restructuring charges in the Upstream, Downstream and
Chemicals segments.
In 2010, the heading “Other” was mainly comprised of
€248 million of restructuring charges in the Downstream
and Chemicals segments.
In 2009, the heading “Other” was mainly comprised of €190 million
of restructuring charges in the Downstream and Chemicals
segments.
In 2011, gains and losses on disposal of assets are mainly related
to the sale of the interest in CEPSA, to the sale of assets in the
Upstream segment (especially the sale of 10% Group’s interest in
the Colombian pipeline OCENSA) and to the sale of photocure and
coatings resins businesses. These disposals are described in
Note 3 to the Consolidated Financial Statements.
In 2010, gains and losses on disposal of assets were mainly related
to sales of assets in the Upstream segment (sale of the interests in
the Valhall and Hod fields in Norway and sale of the interest in
Block 31 in Angola, see Note 3 to the Consolidated Financial
Statements), as well as the change in the accounting treatment and
the disposal of shares of Sanofi (see Note 3 to the Consolidated
Financial Statements).
In 2009, gains and losses on disposal of assets were mainly related
to the disposal of shares of Sanofi.
8) Other financial income and expense
As of December 31,
(M€) 2011 2010 2009
Dividend income on non-consolidated subsidiaries 330 255 210
Capitalized financial expenses 171 113 117
Other 108 74 316
Other financial income 609 442 643
Accretion of asset retirement obligations (344) (338) (283)
Other (85) (69) (62)
Other financial expense (429) (407) (345)
Registration Document 2011. TOTAL
209
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
9) Income taxes
Since 1966, the Group had been taxed in accordance with the
consolidated income tax treatment approved on a three-year
renewable basis by the French Ministry of Economy, Finance and
Industry. The approval for the period 2008-2010 expired on
December 31, 2010 and TOTAL S.A. announced in July 2011
that it took the decision not to proceed with its initial application
for the renewal of this agreement.
As a consequence, TOTAL S.A. is taxed in accordance with the
common tax regime as from 2011. The exit of the consolidated
income tax treatment has no significant impact, neither on the
Group’s financial situation nor on the consolidated results.
Income taxes are detailed as follows:
No deferred tax is recognized for the temporary differences
between the carrying amounts and tax bases of investments
in foreign subsidiaries which are considered to be permanent
investments. Undistributed earnings from foreign subsidiaries
considered to be reinvested indefinitely amounted to
€27,444 million as of December 31, 2011. The determination of
the tax effect relating to such reinvested income is not practicable.
In addition, no deferred tax is recognized on unremitted earnings
(approximately €22,585 million) of the Group’s French subsidiaries
since the remittance of such earnings would be tax exempt for the
subsidiaries in which the Company owns 95% or more of the
outstanding shares.
For the year ended December 31,
(M€) 2011 2010 2009
Current income taxes (12,495) (9,934) (7,213)
Deferred income taxes (1,578) (294) (538)
Total income taxes (14,073) (10,228) (7,751)
Before netting deferred tax assets and liabilities by fiscal entity, the components of deferred tax balances are as follows:
As of December 31,
(M€) 2011 2010 2009
Net operating losses and tax carry forwards 1,584 1,145 1,114
Employee benefits 621 535 517
Other temporary non-deductible provisions 3,521 2,757 2,184
Gross deferred tax assets 5,726 4,437 3,815
Valuation allowance (667) (576) (484)
Net deferred tax assets 5,059 3,861 3,331
Excess tax over book depreciation (12,831) (10,966) (9,791)
Other temporary tax deductions (2,721) (1,339) (1,179)
Gross deferred tax liability (15,552) (12,305) (10,970)
Net deferred tax liability (10,493) (8,444) (7,639)
Net operating losses and tax carry forwards only come from foreign subsidiaries.
After netting deferred tax assets and liabilities by fiscal entity, deferred taxes are presented on the balance sheet as follows:
As of December 31,
(M€) 2011 2010 2009
Deferred tax assets, non-current (note 14) 1,767 1,378 1,164
Deferred tax assets, current (note 16) - 151 214
Deferred tax liabilities, non-current (12,260) (9,947) (8,948)
Deferred tax liabilities, current - (26) (69)
Net amount (10,493) (8,444) (7,639)
210
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
The net deferred tax variation in the balance sheet is analyzed as follows:
As of December 31,
(M€) 2011 2010 2009
Opening balance (8,444) (7,639) (6,857)
Deferred tax on income (1,578) (294) (538)
Deferred tax on shareholders’ equity (a) (55) 28 (38)
Changes in scope of consolidation (17) (59) (1)
Currency translation adjustment (399) (480) (205)
Closing balance (10,493) (8,444) (7,639)
(a) This amount includes mainly current income taxes and deferred taxes for changes in fair value of listed securities classified as financial assets available for sale as well as deferred taxes
related to the cash flow hedge (see Note 17 to the Consolidated Financial Statements).
Reconciliation between provision for income taxes and pre-tax income
For the year ended December 31,
(M€) 2011 2010 2009
Consolidated net income 12,581 10,807 8,629
Provision for income taxes 14,073 10,228 7,751
Pre-tax income 26,654 21,035 16,380
French statutory tax rate 36.10% 34.43% 34.43%
Theoretical tax charge (9,622) (7,242) (5,640)
Difference between French and foreign income tax rates (5,740) (4,921) (3,214)
Tax effect of equity in income (loss) of affiliates 695 672 565
Permanent differences 889 1,375 597
Adjustments on prior years income taxes (19) (45) (47)
Adjustments on deferred tax related to changes in tax rates (201) 2 (1)
Changes in valuation allowance of deferred tax assets (71) (65) (6)
Other (4) (4) (5)
Net provision for income taxes (14,073) (10,228) (7,751)
The French statutory tax rate includes the standard corporate tax rate (33.33%) and additional applicable taxes that bring the overall tax rate
to 36.10% in 2011 (versus 34.43% in 2010 and 2009).
Permanent differences are mainly due to impairment of goodwill and to dividends from non-consolidated companies as well as the specific
taxation rules applicable to certain activities.
Net operating losses and tax credit carryforwards
Deferred tax assets related to net operating losses and tax carryforwards expire in the following years:
As of December 31,
(M€)
Basis
2011
Tax
Basis
2010
Tax
Basis
2009
Tax
2010 - - - - 258 126
2011 - - 225 110 170 83
2012 242 115 177 80 121 52
2013 171 81 146 59 133 43
2014 (a) 104 47 1,807 602 1,804 599
2015 (b) 8 2 190 62 - -
2016 and after 2,095 688 - - - -
Unlimited 2,119 651 774 232 661 211
Total 4,739 1,584 3,319 1,145 3,147 1,114
(a) Net operating losses and tax credit carryforwards in 2014 and after for 2009.
(b) Net operating losses and tax credit carryforwards in 2015 and after for 2010.
Registration Document 2011. TOTAL
211
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
10) Intangible assets
As of December 31, 2011 Cost Amortization Net
(M€) and impairment
Goodwill 1,903 (993) 910
Proved and unproved mineral interests 13,719 (3,181) 10,538
Other intangible assets 3,377 (2,412) 965
Total intangible assets 18,999 (6,586) 12,413
As of December 31, 2010 Cost Amortization Net
(M€) and impairment
Goodwill 1,498 (596) 902
Proved and unproved mineral interests 10,099 (2,712) 7,387
Other intangible assets 2,803 (2,175) 628
Total intangible assets 14,400 (5,483) 8,917
As of December 31, 2009 Cost Amortization Net
(M€) and impairment
Goodwill 1,776 (614) 1,162
Proved and unproved mineral interests 8,204 (2,421) 5,783
Other intangible assets 2,712 (2,143) 569
Total intangible assets 12,692 (5,178) 7,514
Changes in net intangible assets are analyzed in the following table:
(M€)
Net amount
as of
January 1,
Acquisitions
Disposals
Amortization
and impairment
Currency
translation
adjustment
Other
Net amount
as of
December 31,
2011 8,917 2,504 (428) (991) 358 2,053 12,413
2010 7,514 2,466 (62) (553) 491 (939) 8,917
2009 5,341 629 (64) (345) 2 1,951 7,514
In 2011, the heading “Other” mainly includes Chesapeake’s
Barnett shale mineral interests reclassified into the acquisitions for
€(649) million, the not yet paid part of the acquisition of
Chesapeake’s mineral interests in Utica for €1,216 million, the
reclassification of Joslyn’s mineral interests sold in 2011 and
formerly classified in accordance with IFRS 5 “Non-current assets
held for sale and discontinued operations” for €384 million, and
€697 million related to the acquisition of SunPower.
In 2010, the heading “Other” mainly included Chesapeake’s Barnett
shale mineral interests reclassified into the acquisitions for
€(975) million and the reclassification of Joslyn’s mineral interests in
accordance with IFRS 5 “Non-current assets held for sale and
discontinued operations” for €(390) million, including the currency
translation adjustment, partially compensated by the acquisition of
UTS for €646 million (see Note 3 to the Consolidated Financial
Statements).
In 2009, the heading “Other” mainly included Chesapeake’s Barnett
shale mineral interests for €1,449 million (see Note 3 to the
Consolidated Financial Statements).
A summary of changes in the carrying amount of goodwill by business segment for the year ended December 31, 2011 is as follows:
(M€)
Net goodwill
as of
January 1, 2011
Increases
Impairments
Other
Net goodwill
as of
December 31, 2011
Upstream 78 396 (383) (2) 89
Downstream 82 - (1) (12) 69
Chemicals 717 23 (4) (9) 727
Corporate 25 - - - 25
Total 902 419 (388) (23) 910
In 2011, impairments of goodwill in the Upstream segment amount to €383 million and correspond to the impairment of the whole goodwill
arising from the acquisition of SunPower (see Note 4E to the Consolidated Financial Statements).
212
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
11) Property, plant and equipment
As of December 31, 2011 Cost Depreciation Net
(M€) and impairment
Upstream properties
Proved properties 84,222 (54,589) 29,633
Unproved properties 209 - 209
Work in progress 21,190 (15) 21,175
Subtotal 105,621 (54,604) 51,017
Other property, plant and equipment
Land 1,346 (398) 948
Machinery, plant and equipment (including transportation equipment) 25,838 (18,349) 7,489
Buildings 6,241 (4,131) 2,110
Work in progress 1,534 (306) 1,228
Other 6,564 (4,899) 1,665
Subtotal 41,523 (28,083) 13,440
Total property, plant and equipment 147,144 (82,687) 64,457
As of December 31, 2010 Cost Depreciation Net
(M€) and impairment
Upstream properties
Proved properties 77,183 (50,582) 26,601
Unproved properties 347 (1) 346
Work in progress 14,712 (37) 14,675
Subtotal 92,242 (50,620) 41,622
Other property, plant and equipment
Land 1,304 (393) 911
Machinery, plant and equipment (including transportation equipment) 23,831 (17,010) 6,821
Buildings 6,029 (3,758) 2,271
Work in progress 2,350 (488) 1,862
Other 6,164 (4,687) 1,477
Subtotal 39,678 (26,336) 13,342
Total property, plant and equipment 131,920 (76,956) 54,964
As of December 31, 2009 Cost Depreciation Net
(M€) and impairment
Upstream properties
Proved properties 71,082 (44,718) 26,364
Unproved properties 182 (1) 181
Work in progress 10,351 (51) 10,300
Subtotal 81,615 (44,770) 36,845
Other property, plant and equipment
Land 1,458 (435) 1,023
Machinery, plant and equipment (including transportation equipment) 22,927 (15,900) 7,027
Buildings 6,142 (3,707) 2,435
Work in progress 2,774 (155) 2,619
Other 6,506 (4,865) 1,641
Subtotal 39,807 (25,062) 14,745
Total property, plant and equipment 121,422 (69,832) 51,590
Registration Document 2011. TOTAL
213
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Changes in net property, plant and equipment are analyzed in the following table:
(M€)
Net amount
as of January 1,
Acquisitions
Disposals
Depreciation
and impairment
Currency
translation
adjustment
Other
Net amount
as of December 31,
2011 54,964 15,443 (1,489) (7,636) 1,692 1,483 64,457
2010 51,590 11,346 (1,269) (8,564) 2,974 (1,113) 54,964
2009 46,142 11,212 (65) (6,765) 397 669 51,590
In 2011, the heading “Disposals” mainly includes the impact of
sales of assets in the Upstream segment (disposal of the interests
in Gassled in Norway and in Joslyn’s field in Canada) and in the
Downstream segment (disposal of Marketing assets in the United
Kingdom) (see Note 3 to the Consolidated Financial Statements).
In 2011, the heading “Depreciation and impairment” includes the
impact of impairments of assets recognized for €781 million (see
Note 4D to the Consolidated Financial Statements).
In 2011, the heading “Other” corresponds to the increase of the
asset for sites restitution for an amount of €653 million. It also
includes €428 million related to the reclassification of tangible
assets of Joslyn and resins businesses sold in 2011 and formerly
classified in accordance with IFRS 5 "Non-current assets held for
sale and discontinued operations”.
In 2010, the heading “Disposals” mainly included the impact of
sales of assets in the Upstream segment (sale of the interests in the
Valhall and Hod fields in Norway and sale of the interest in Block 31
in Angola, see Note 3 to the Consolidated Financial Statements).
In 2010, the heading “Depreciation and impairment” included the
impact of impairments of assets recognized for €1,416 million (see
Note 4D to the Consolidated Financial Statements).
In 2010, the heading “Other” mainly corresponded to the change in
the consolidation method of Samsung Total Petrochemicals (see
Note 12 to the Consolidated Financial Statements) for
€(541) million and the reclassification for €(537) million, including
the currency translation adjustment, of property, plant and
equipment related to Joslyn, Total E&P Cameroun, and resins
businesses subject to a disposal project in accordance with IFRS 5
“Non-current assets held for sale and discontinued operations”,
partially compensated by the acquisition of UTS for €217 million
(see Note 3 to the Consolidated Financial Statements).
In 2009, the heading “Other” mainly included changes in net
property, plant and equipment related to asset retirement
obligations and Chesapeake’s Barnett shale tangible assets for
€113 million (see Note 3 to the Consolidated Financial Statements).
Property, plant and equipment presented above include the following amounts for facilities and equipment under finance leases that have
been capitalized:
As of December 31, 2011 Cost Depreciation Net
(M€) and impairment
Machinery, plant and equipment 414 (284) 130
Buildings 54 (25) 29
Other - - -
Total 468 (309) 159
As of December 31, 2010 Cost Depreciation Net
(M€) and impairment
Machinery, plant and equipment 480 (332) 148
Buildings 54 (24) 30
Other - - -
Total 534 (356) 178
As of December 31, 2009 Cost Depreciation Net
(M€) and impairment
Machinery, plant and equipment 548 (343) 205
Buildings 60 (30) 30
Other - - -
Total 608 (373) 235
214
TOTAL. Registration Document 2011
12) Equity affiliates: investments and loans
Equity value
As of December 31,
(M€)
2011
% owned
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
2010
2009
2011
2010
2009
Equity value
NLNG 15.00% 15.00% 15.00% 953 1,108 1,136
PetroCedeño - EM 30.32% 30.32% 30.32% 1,233 1,136 874
CEPSA (Upstream share) (d) - 48.83% 48.83% - 340 385
Angola LNG Ltd. 13.60% 13.60% 13.60% 869 710 490
Qatargas 10.00% 10.00% 10.00% 97 85 83
Société du Terminal Méthanier de Fos Cavaou 27.60% 28.03% 28.79% 119 125 124
Dolphin Energy Ltd. (Del) Abu Dhabi 24.50% 24.50% 24.50% 208 172 118
Qatar Liquefied Gas Company Limited II (Train B) 16.70% 16.70% 16.70% 209 184 143
Yemen LNG Co 39.62% 39.62% 39.62% 169 25 (15)
Shtokman Development AG 25.00% 25.00% 25.00% 248 214 162
AMYRIS (a) 21.37% 22.03% - 79 101 -
Novatek (e) 14.09% - - 3,368 - -
Other - - - 803 724 760
Total associates 8,355 4,924 4,260
Yamal LNG (e) 20.01% - - 495 - -
Ichthys LNG Ltd. (e) 24.00% - - 82 - -
Other - - - - 78 -
Total jointly-controlled entities 577 78 -
Total Upstream 8,932 5,002 4,260
CEPSA (Downstream share) (d) - 48.83% 48.83% - 2,151 1,927
Saudi Aramco Total Refining & Petrochemicals
(Downstream share) 37.50% 37.50% 37.50% 112 47 60
Other - - - 166 159 123
Total associates 278 2,357 2,110
SARA (c) 50.00% 50.00% - 125 134 -
TotalErg (a) 49.00% 49.00% - 296 289 -
Other - - - - 2 -
Total jointly-controlled entities 421 425 -
Total Downstream 699 2,782 2,110
CEPSA (Chemicals share) (d) - 48.83% 48.83% - 411 396
Qatar Petrochemical Company Ltd. 20.00% 20.00% 20.00% 240 221 205
Saudi Aramco Total Refining & Petrochemicals
(Chemicals share) 37.50% 37.50% 37.50% 9 4 5
Qatofin Company Limited 36.36% 36.36% 36.36% 136 27 9
Other - - - 27 41 37
Total associates 412 704 652
Samsung Total Petrochemicals (c) 50.00% 50.00% - 706 645 -
Total jointly-controlled entities 706 645 -
Total Chemicals 1,118 1,349 652
Sanofi (b) - - 7.39% - - 4,235
Total associates - - 4,235
Total jointly-controlled entities - - -
Total Corporate - - 4,235
Total investments 10,749 9,133 11,257
Loans 2,246 2,383 2,367
Total investments and loans 12,995 11,516 13,624
(a) Investment accounted for by the equity method as from 2010.
(b) End of the accounting for by the equity method of Sanofi as of July 1st, 2010 (see Note 3 to the Consolidated Financial Statements).
(c) Change in the consolidation method as of January 1st, 2010.
(d) Sale of CEPSA on July 29th, 2011.
(e) Investment accounted for by the equity method as from 2011.
Registration Document 2011. TOTAL
215
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Equity in income (loss)
(M€)
As of December 31,
For the year ended December 31,
2011
2010
2009
2011
2010
2009
% owned
Equity in income (loss)
NLNG 15.00% 15.00% 15.00% 374 207 227
PetroCedeño - EM 30.32% 30.32% 30.32% 55 195 166
CEPSA (Upstream share) (d) - 48.83% 48.83% 15 57 23
Angola LNG Ltd. 13.60% 13.60% 13.60% 6 8 9
Qatargas 10.00% 10.00% 10.00% 196 136 114
Société du Terminal Méthanier de Fos Cavaou 27.60% 28.03% 28.79% 13 - -
Dolphin Energy Ltd. (Del) Abu Dhabi 24.50% 24.50% 24.50% 131 121 94
Qatar Liquefied Gas Company Limited II (Train B) 16.70% 16.70% 16.70% 446 288 8
Yemen LNG Co 39.62% 39.62% 39.62% 130 37 34
Shtokman Development AG 25.00% 25.00% 25.00% 1 (5) 4
AMYRIS (a) 21.37% 22.03% - (23) (3) -
Novatek (e) 14.09% - - 24 - -
Other - - - 274 140 180
Total associates 1,642 1,181 859
Yamal LNG (e) 20.01% - - - - -
Ichthys LNG Ltd. (e) 24.00% - - (7) - -
Other - - - (56) 6 -
Total jointly-controlled entities (63) 6 -
Total Upstream 1,579 1,187 859
CEPSA (Downstream share) (d) - 48.83% 48.83% 26 172 149
Saudi Aramco Total Refining & Petrochemicals
(Downstream share) 37.50% 37.50% 37.50% (27) (19) (12)
Other - - - 24 76 81
Total associates 23 229 218
SARA (c) 50.00% 50.00% - 11 31 -
TotalErg (a) 49.00% 49.00% - 7 (11) -
Other - - - 1 2 -
Total jointly-controlled entities 19 22 -
Total Downstream 42 251 218
CEPSA (Chemicals share) (d) - 48.83% 48.83% 19 78 10
Qatar Petrochemical Company Ltd. 20.00% 20.00% 20.00% 89 84 74
Saudi Aramco Total Refining & Petrochemicals
(Chemicals share) 37.50% 37.50% 37.50% (3) (1) (1)
Qatofin Company Limited 36.36% 36.36% 36.36% 98 36 (5)
Other - - - (13) 5 1
Total associates 190 202 79
Samsung Total Petrochemicals (c) 50.00% 50.00% - 114 104 -
Total jointly-controlled entities 114 104 -
Total Chemicals 304 306 79
Sanofi (b) - - 7.39% - 209 486
Total associates - 209 486
Total jointly-controlled entities - - -
Total Corporate - 209 486
Total investments 1,925 1,953 1,642
(a) Investment accounted for by the equity method as from 2010.
(b) End of the accounting for by the equity method of Sanofi as of July 1st, 2010 (see Note 3 to the Consolidated Financial Statements).
(c) Change in the consolidation method as of January 1st, 2010.
(d) Sale of CEPSA on July 29th, 2011.
(e) Investment accounted for by the equity method as from 2011.
The market value of the Group’s share in Novatek amounts to €4,034 million as of December 31, 2011 for an equity value of €3,368 million.
216
TOTAL. Registration Document 2011
In Group share, the main financial items of the equity affiliates are as follows:
As of December 31,
(M€)
2011
Associates
Jointly-
controlled
entities
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
2010
Associates
Jointly-
controlled
entities
2009
Associates
Jointly-
controlled
entities
Assets 18,088 3,679 19,192 2,770 22,681 -
Shareholders’ equity 9,045 1,704 7,985 1,148 11,257 -
Liabilities 9,043 1,975 11,207 1,622 11,424 -
For the year ended December 31,
(M€)
2011
Associates
Jointly-
controlled
entities
2010
Associates
Jointly-
controlled
entities
2009
Associates
Jointly-
controlled
entities
Revenues from sales 9,948 5,631 16,529 2,575 14,434 -
Pre-tax income 2,449 119 2,389 166 2,168 -
Income tax (594) (49) (568) (34) (526) -
Net income 1,855 70 1,821 132 1,642 -
13) Other investments
The investments detailed below are classified as “Financial assets available for sale” (see Note 1 paragraph M(ii) to the Consolidated
Financial Statements).
As of December 31, 2011 Carrying Unrealized gain Balance
(M€) amount (loss) sheet value
Sanofi (a) 2,100 351 2,451
Areva (b) 69 1 70
Arkema - - -
Chicago Mercantile Exchange Group 1 6 7
Olympia Energy Fund - energy investment fund 38 (5) 33
Gevo 15 (3) 12
Other publicly traded equity securities 3 (1) 2
Total publicly traded equity securities (c) 2,226 349 2,575
BBPP 62 - 62
Ocensa (d) 85 - 85
BTC Limited 132 - 132
Other equity securities 820 - 820
Total other equity securities (c) 1,099 - 1,099
Other investments 3,325 349 3,674
As of December 31, 2010 Carrying Unrealized gain Balance
(M€) amount (loss) sheet value
Sanofi (a) 3,510 (56) 3,454
Areva (b) 69 63 132
Arkema - - -
Chicago Mercantile Exchange Group 1 9 10
Olympia Energy Fund - energy investment fund 37 (3) 34
Other publicly traded equity securities 2 (1) 1
Total publicly traded equity securities (c) 3,619 12 3,631
BBPP 60 - 60
BTC Limited 141 - 141
Other equity securities 758 - 758
Total other equity securities (c) 959 - 959
Other investments 4,578 12 4,590
Registration Document 2011. TOTAL
217
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
As of December 31, 2009 Carrying Unrealized gain Balance
(M€) amount (loss) sheet value
Areva(b) 69 58 127
Arkema 15 47 62
Chicago Mercantile Exchange Group 1 9 10
Olympia Energy Fund - energy investment fund 35 (2) 33
Other publicly traded equity securities - - -
Total publicly traded equity securities(c) 120 112 232
BBPP 72 - 72
BTC Limited 144 - 144
Other equity securities 714 - 714
Total other equity securities(c) 930 - 930
Other investments 1,050 112 1,162
(a) End of the accounting for by the equity method of Sanofi as of July 1st, 2010 (see Note 3 to the Consolidated Financial Statements).
(b) Unrealized gain based on the investment certificate.
(c) Including cumulative impairments of €604 million in 2011, €597 million in 2010 and €599 million in 2009.
(d) End of the accounting for by the equity method of Ocensa in July 2011 (see Note 3 to the Consolidated Financial Statements).
14) Other non-current assets
As of December 31, 2011
(M€) Gross value Valuation allowance Net value
Deferred income tax assets 1,767 - 1,767
Loans and advances (a) 2,454 (399) 2,055
Other 1,049 - 1,049
Total 5,270 (399) 4,871
As of December 31, 2010
(M€) Gross value Valuation allowance Net value
Deferred income tax assets 1,378 - 1,378
Loans and advances (a) 2,060 (464) 1,596
Other 681 - 681
Total 4,119 (464) 3,655
As of December 31, 2009
(M€) Gross value Valuation allowance Net value
Deferred income tax assets 1,164 - 1,164
Loans and advances (a) 1,871 (587) 1,284
Other 633 - 633
Total 3,668 (587) 3,081
(a) Excluding loans to equity affiliates.
Changes in the valuation allowance on loans and advances are detailed as follows:
For the year Valuation Increases Decreases Currency Valuation
translation adjustment allowance
ended December 31, allowance
(M€) as of January 1,
and other variations as of December 31,
2011 (464) (25) 122 (32) (399)
2010 (587) (33) 220 (64) (464)
2009 (529) (19) 29 (68) (587)
218
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
15) Inventories
As of December 31, 2011
(M€) Gross value Valuation allowance Net value
Crude oil and natural gas 4,735 (24) 4,711
Refined products 9,706 (36) 9,670
Chemicals products 1,489 (103) 1,386
Other inventories 2,761 (406) 2,355
Total 18,691 (569) 18,122
As of December 31, 2010
(M€) Gross value Valuation allowance Net value
Crude oil and natural gas 4,990 - 4,990
Refined products 7,794 (28) 7,766
Chemicals products 1,350 (99) 1,251
Other inventories 1,911 (318) 1,593
Total 16,045 (445) 15,600
As of December 31, 2009
(M€) Gross value Valuation allowance Net value
Crude oil and natural gas 4,581 - 4,581
Refined products 6,647 (18) 6,629
Chemicals products 1,234 (113) 1,121
Other inventories 1,822 (286) 1,536
Total 14,284 (417) 13,867
Changes in the valuation allowance on inventories are as follows:
For the year Valuation Increase Currency Valuation
ended December 31, allowance (net) translation adjustment allowance
(M€) as of January 1, and other variations as of December 31,
2011 (445) (83) (41) (569)
2010 (417) (39) 11 (445)
2009 (1,115) 700 (2) (417)
Registration Document 2011. TOTAL
219
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
16) Accounts receivable and other current assets
As of December 31, 2011
(M€) Gross value Valuation allowance Net value
Accounts receivable 20,532 (483) 20,049
Recoverable taxes 2,398 - 2,398
Other operating receivables 7,750 (283) 7,467
Deferred income tax - - -
Prepaid expenses 840 - 840
Other current assets 62 - 62
Other current assets 11,050 (283) 10,767
As of December 31, 2010
(M€) Gross value Valuation allowance Net value
Accounts receivable 18,635 (476) 18,159
Recoverable taxes 2,227 - 2,227
Other operating receivables 4,543 (136) 4,407
Deferred income tax 151 - 151
Prepaid expenses 657 - 657
Other current assets 41 - 41
Other current assets 7,619 (136) 7,483
As of December 31, 2009
(M€) Gross value Valuation allowance Net value
Accounts receivable 16,187 (468) 15,719
Recoverable taxes 2,156 - 2,156
Other operating receivables 5,214 (69) 5,145
Deferred income tax 214 - 214
Prepaid expenses 638 - 638
Other current assets 45 - 45
Other current assets 8,267 (69) 8,198
Changes in the valuation allowance on “Accounts receivable” and “Other current assets” are as follows:
(M€) Valuation Increase Currency Valuation
allowance (net) translation adjustments allowance
as of January 1, and other variations as of December 31,
Accounts receivable
2011 (476) 4 (11) (483)
2010 (468) (31) 23 (476)
2009 (460) (17) 9 (468)
Other current assets
2011 (136) (132) (15) (283)
2010 (69) (66) (1) (136)
2009 (19) (14) (36) (69)
As of December 31, 2011, the net portion of the overdue
receivables included in “Accounts receivable” and “Other current
assets” is €3,556 million, of which €1,857 million has expired for
less than 90 days, €365 million has expired between 90 days
and 6 months, €746 million has expired between 6 and 12 months
and €588 million has expired for more than 12 months.
As of December 31, 2010, the net portion of the overdue
receivables included in “Accounts receivable” and “Other current
assets” is €3,141 million, of which €1,885 million has expired for
less than 90 days, €292 million has expired between 90 days
and 6 months, €299 million has expired between 6 and 12 months
and €665 million has expired for more than 12 months.
As of December 31, 2009, the net portion of the overdue
receivables included in “Accounts receivable” and “Other current
assets” is €3,610 million, of which €2,116 million has expired for
less than 90 days, €486 million has expired between 90 days
and 6 months, €246 million has expired between 6 and 12 months
and €762 million has expired for more than 12 months.
220
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
17) Shareholders’ equity
Number of TOTAL shares
The Company’s common shares, par value €2.50, as of
December 31, 2011 are the only category of shares. Shares may
be held in either bearer or registered form.
Double voting rights are granted to holders of shares that are fully-
paid and held in the name of the same shareholder for at least two
years, with due consideration for the total portion of the share
capital represented. Double voting rights are also assigned to
restricted shares in the event of an increase in share capital by
incorporation of reserves, profits or premiums based on shares
already held that are entitled to double voting rights.
Pursuant to the Company’s bylaws (Statuts), no shareholder may
cast a vote at a shareholders’ meeting, either by himself or through
an agent, representing more than 10% of the total voting rights for
the Company’s shares. This limit applies to the aggregated amount
of voting rights held directly, indirectly or through voting proxies.
However, in the case of double voting rights, this limit may be
extended to 20%.
These restrictions no longer apply if any individual or entity, acting
alone or in concert, acquires at least two-thirds of the total share
capital of the Company, directly or indirectly, following a public
tender offer for all of the Company’s shares.
The authorized share capital amounts to 3,446,401,650 shares as
of December 31, 2011 compared to 3,439,391,697 shares as of
December 31, 2010 and 3,381,921,458 as of December 31, 2009.
Variation of the share capital
As of January 1, 2009 2,371,808,074
Shares issued in connection with: Exercise of TOTAL share subscription options 934,780
Exchange guarantee offered to the beneficiaries of Elf Aquitaine share subscription options 480,030
Cancellation of shares(a) (24,800,000)
As of January 1, 2010 2,348,422,884
Shares issued in connection with: Exercise of TOTAL share subscription options 1,218,047
As of January 1, 2011 2,349,640,931
Shares issued in connection with: Capital increase reserved for employees 8,902,717
Exercise of TOTAL share subscription options 5,223,665
As of December 31, 2011(b) 2,363,767,313
(a) Decided by the Board of Directors on July 30, 2009.
(b) Including 109,554,173 treasury shares deducted from consolidated shareholders’ equity.
The variation of both weighted-average number of shares and weighted-average number of diluted shares respectively used in the calculation
of earnings per share and fully-diluted earnings per share is detailed as follows:
2011 2010 2009
Number of shares as of January 1, 2,349,640 931 2,348,422,884 2,371,808,074
Number of shares issued during the year (pro rated) -
Exercise of TOTAL share subscription options 3,412,123 412,114 221,393
Exercise of TOTAL share purchase options - 984,800 93,827
Exchange guarantee offered to the beneficiaries
of Elf Aquitaine share subscription options - - 393,623
TOTAL performance shares 978,503 416,420 1,164,389
Global free TOTAL share plan (a) 506 15 -
Capital increase reserved for employees 5,935,145 - -
TOTAL shares held by TOTAL S.A. or by its subsidiaries
and deducted from shareholders’ equity (112,487,679) (115,407,190) (143,082,095)
Weighted-average number of shares 2,247,479,529 2,234,829,043 2,230,599,211
Dilutive effect -
TOTAL share subscription and purchase options 470,095 1,758,006 1,711,961
TOTAL performance shares 6,174,808 6,031,963 4,920,599
Global free TOTAL share plan(a) 2,523,233 1,504,071 -
Exchange guarantee offered to the beneficiaries
of Elf Aquitaine share subscription options - - 60,428
Capital increase reserved for employees 303,738 371,493 -
Weighted-average number of diluted shares 2,256,951,403 2,244,494,576 2,237,292,199
(a) The Board of Directors approved on May 21, 2010 the implementation and conditions of a global free share plan intended for the Group employees.
Registration Document 2011. TOTAL
221
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Capital increase reserved for Group employees
At the shareholders’ meeting held on May 21, 2010, the
shareholders delegated to the Board of Directors the authority
to increase the share capital of the Company in one or more
transactions and within a maximum period of 26 months from the
date of the meeting, by an amount not exceeding 1.5% of the
share capital outstanding on the date of the meeting of the Board
of Directors at which a decision to proceed with an issuance is
made reserving subscriptions for such issuance to the Group
employees participating in a company savings plan. It is being
specified that the amount of any such capital increase reserved for
Group employees was counted against the aggregate maximum
nominal amount of share capital increases authorized by the
shareholders’ meeting held on May 21, 2010 for issuing new
ordinary shares or other securities granting immediate or future
access to the Company’s share capital with preferential
subscription rights (€2.5 billion in nominal value).
Pursuant to this delegation of authorization, the Board of Directors,
during its October 28, 2010 meeting, decided to proceed with a
capital increase reserved for employees in 2011 within the limit
of 12 million shares with dividend rights as of January 1, 2010 and
delegated to the Chairman and Chief Executive Officer all powers
to determine the opening and closing of the subscription period
and the subscription price.
On March 14, 2011, the Chairman and Chief Executive Officer
decided that the subscription period would be set from
March 16, 2011 to April 1, 2011 included, and acknowledged that
the subscription price per ordinary share would be set at €34.80.
With respect to this capital increase, 8,902,717 TOTAL shares were
subscribed and created on April 28, 2011.
Share cancellation
Pursuant to the authorization granted by the shareholders’ meeting
held on May 11, 2007 authorizing reduction of capital by
cancellation of shares held by the Company within the limit of 10%
of the outstanding capital every 24 months, the Board of Directors
decided on July 30, 2009 to cancel 24,800,000 shares acquired
in 2008 at an average price of €49.28 per share.
Treasury shares
(TOTAL shares held by TOTAL S.A.)
As of December 31, 2011, TOTAL S.A. holds 9,222,905 of its own
shares, representing 0.39% of its share capital, detailed as follows:
– 6,712,528 shares allocated to TOTAL share grant plans for
Group employees;
– 2,510,377 shares intended to be allocated to new TOTAL share
purchase option plans or to new share grant plans.
These shares are deducted from the consolidated shareholders’
equity.
As of December 31, 2009, TOTAL S.A. held 15,075,922 of its own
shares, representing 0.64% of its share capital, detailed as follows:
– 6,017,499 shares allocated to covering TOTAL share purchase
option plans for Group employees and executive officers;
– 5,799,400 shares allocated to TOTAL share grant plans for
Group employees; and
– 3,259,023 shares intended to be allocated to new TOTAL share
purchase option plans or to new share grant plans.
These shares were deducted from the consolidated shareholders’
equity.
TOTAL shares held by Group subsidiaries
As of December 31, 2011, 2010 and 2009, TOTAL S.A. held
indirectly through its subsidiaries 100,331,268 of its own shares,
representing 4.24% of its share capital as of December 31, 2011,
4.27% of its share capital as of December 31, 2010 and 4.27%
of its share capital as of December 31, 2009 detailed as follows:
– 2,023,672 shares held by a consolidated subsidiary, Total
Nucléaire, 100% indirectly controlled by TOTAL S.A.; and
– 98,307,596 shares held by subsidiaries of Elf Aquitaine
(Financière Valorgest, Sogapar and Fingestval), 100% indirectly
controlled by TOTAL S.A.
These shares are deducted from the consolidated shareholders’
equity.
Dividend
TOTAL S.A. paid on May 26, 2011 the balance of the dividend of
€1.14 per share for the 2010 fiscal year (the ex-dividend date was
May 23, 2011). In addition, TOTAL S.A. paid two quarterly interim
dividends for the fiscal year 2011:
– The first quarterly interim dividend of €0.57 per share for
the fiscal year 2011, decided by the Board of Directors on
April 28, 2011, was paid on September 22, 2011 (the ex-dividend
date was September 19, 2011);
– The second quarterly interim dividend of €0.57 per share for
the fiscal year 2011, decided by the Board of Directors on
July 28, 2011, was paid on December 22, 2011 (the ex-dividend
date was December 19, 2011).
The Board of Directors, during its October 27, 2011 meeting,
decided to set the third quarterly interim dividend for the fiscal
year 2011 at €0.57 per share. This interim dividend will be paid on
March 22, 2012 (the ex-dividend date will be March 19, 2012).
A resolution will be submitted at the shareholders’ meeting on
May 11, 2012 to pay a dividend of €2.28 per share for the 2011
fiscal year, i.e. a balance of €0.57 per share to be distributed after
deducting the three quarterly interim dividends of €0.57 per share
that will have already been paid.
As of December 31, 2010, TOTAL S.A. held 12,156,411 of its own
shares, representing 0.52% of its share capital, detailed as follows:
Paid-in surplus
– 6,012,460 shares allocated to TOTAL share grant plans for
Group employees;
– 6,143,951 shares intended to be allocated to new TOTAL share
purchase option plans or to new share grant plans.
These shares were deducted from the consolidated shareholders’
equity.
In accordance with French law, the paid-in surplus corresponds
to share premiums of the parent company which can be capitalized
or used to offset losses if the legal reserve has reached its minimum
required level. The amount of the paid-in surplus may also be
distributed subject to taxation unless the unrestricted reserves of
the parent company are distributed prior to this item.
222
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
As of December 31, 2011, paid-in surplus amounted to
€27,655 million (€27,208 million as of December 31, 2010
and €27,171 million as of December 31, 2009).
value of the share capital. This reserve cannot be distributed
to the shareholders other than upon liquidation but can be used
to offset losses.
Reserves
Under French law, 5% of net income must be transferred to the
legal reserve until the legal reserve reaches 10% of the nominal
Other comprehensive income
If wholly distributed, the unrestricted reserves of the parent
company would be taxed for an approximate amount of
€539 million as of December 31, 2011 (€514 million as of
December 31, 2010 and as of December 31, 2009).
Detail of other comprehensive income showing items reclassified from equity to net income is presented in the table below:
For the year ended December 31,
(M€) 2011 2010 2009
Currency translation adjustment 1,498 2,231 (244)
Unrealized gain/(loss) of the period 1,435 2,234 (243)
Less gain/(loss) included in net income (63) 3 1
Available for sale financial assets 337 (100) 38
Unrealized gain/(loss) of the period 382 (50) 38
Less gain/(loss) included in net income 45 50 -
Cash flow hedge (84) (80) 128
Unrealized gain/(loss) of the period (131) (195) 349
Less gain/(loss) included in net income (47) (115) 221
Share of other comprehensive income of equity
affiliates, net amount (15) 302 234
Other (2) (7) (5)
Unrealized gain/(loss) of the period (2) (7) (5)
Less gain/(loss) included in net income - - -
Tax effect (55) 28 (38)
Total other comprehensive income, net amount 1,679 2,374 113
Tax effects relating to each component of other comprehensive income are as follows:
For the year ended December 31,
(M€)
2011
2010
2009
Pre-tax
amount
Tax
effect
Net
amount
Pre-tax
amount
Tax
effect
Net
amount
Pre-tax
amount
Tax
effect
Net
amount
Currency translation adjustment 1,498 - 1,498 2,231 - 2,231 (244) - (244)
Available for sale financial assets 337 (93) 244 (100) 2 (98) 38 4 42
Cash flow hedge (84) 38 (46) (80) 26 (54) 128 (42) 86
Share of other comprehensive income
of equity affiliates, net amount (15) - (15) 302 - 302 234 - 234
Other (2) - (2) (7) - (7) (5) - (5)
Total other comprehensive income 1,734 (55) 1,679 2,346 28 2,374 151 (38) 113
Registration Document 2011. TOTAL
223
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
18) Employee benefits obligations
Liabilities for employee benefits obligations consist of the following:
As of December 31,
(M€) 2011 2010 2009
Pension benefits liabilities 1,268 1,268 1,236
Other benefits liabilities 620 605 592
Restructuring reserves (early retirement plans) 344 298 212
Total 2,232 2,171 2,040
The Group’s main defined benefit pension plans are located in France, in the United Kingdom, in the United States, in Belgium and in
Germany. Their main characteristics are the following:
– The benefits are usually based on the final salary and seniority;
– They are usually funded (pension fund or insurer); and
– They are closed to new employees who benefit from defined contribution pension plans.
The pension benefits include also termination indemnities and early retirement benefits.
The other benefits are the employer contribution to post-employment medical care.
The fair value of the defined benefit obligation and plan assets in the Consolidated Financial Statements is detailed as follows:
As of December 31,
(M€)
Pension benefits
Other benefits
2011
2010
2009
2011
2010
2009
Change in benefit obligation
Benefit obligation at beginning of year 8,740 8,169 7,405 623 547 544
Service cost 163 159 134 13 11 10
Interest cost 420 441 428 28 29 30
Curtailments (24) (4) (5) (1) (3) (1)
Settlements (111) (60) (3) - - -
Special termination benefits - - - - 1 -
Plan participants’ contributions 9 11 10 - - -
Benefits paid (451) (471) (484) (34) (33) (33)
Plan amendments 33 28 118 4 1 (2)
Actuarial losses (gains) 435 330 446 (9) 57 -
Foreign currency translation and other 108 137 120 4 13 (1)
Benefit obligation at year-end 9,322 8,740 8,169 628 623 547
Change in fair value of plan assets
Fair value of plan assets at beginning of year (6,809) (6,286) (5,764) - - -
Expected return on plan assets (385) (396) (343) - - -
Actuarial losses (gains) 155 (163) (317) - - -
Settlements 80 56 2 - - -
Plan participants’ contributions (9) (11) (10) - - -
Employer contributions (347) (269) (126) - - -
Benefits paid 386 394 396 - - -
Foreign currency translation and other (99) (134) (124) - - -
Fair value of plan assets at year-end (7,028) (6,809) (6,286) - - -
Unfunded status 2,294 1,931 1,883 628 623 547
Unrecognized prior service cost (78) (105) (153) 9 10 15
Unrecognized actuarial (losses) gains (1,713) (1,170) (1,045) (17) (28) 30
Asset ceiling 10 9 9 - - -
Net recognized amount 513 665 694 620 605 592
Pension benefits and other benefits liabilities 1,268 1,268 1,236 620 605 592
Other non-current assets (755) (603) (542) - - -
As of December 31, 2011, the fair value of pension benefits and other pension benefits which are entirely or partially funded amounts to
€8,277 million and the present value of the unfunded benefits amounts to €1,673 million (against €7,727 million and €1,636 million
respectively as of December 31, 2010 and €7,206 million and €1,510 million respectively as of December 31, 2009).
224
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
The experience actuarial (gains) losses related to the defined benefit obligation and the fair value of plan assets are as follows:
For the year ended December 31,
(M€) 2011 2010 2009 2008 2007
Experience actuarial (gains)
losses related to the defined benefit obligation (58) (54) (108) 12 80
Experience actuarial (gains)
losses related to the fair value of plan assets 155 (163) (317) 1,099 140
As of December 31,
(M€) 2011 2010 2009 2008 2007
Pension benefits
Benefit obligation 9,322 8,740 8,169 7,405 8,129
Fair value of plan assets (7,028) (6,809) (6,286) (5,764) (6,604)
Unfunded status 2,294 1,931 1,883 1,641 1,525
Other benefits
Benefits obligation 628 623 547 544 583
Fair value of plan assets - - - - -
Unfunded status 628 623 547 544 583
The Group expects to contribute €182 million to its pension plans in 2012.
Estimated future payments
(M€) Pension benefits Other benefits
2012 479 35
2013 467 35
2014 505 35
2015 511 35
2016 512 37
2017-2021 2,767 191
Asset allocation
As of December 31,
Pension benefits
2011
2010
2009
Equity securities 29% 34% 31%
Debt securities 64% 60% 62%
Monetary 4% 3% 3%
Real estate 3% 3% 4%
The Group’s assumptions of expected returns on assets are built up by asset class and by country based on long-term bond yields and risk
premiums.
The discount rate retained corresponds to the rate of prime corporate bonds according to a benchmark per country of different market data
on the closing date.
Registration Document 2011. TOTAL
225
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Assumptions used to
determine benefits obligations
Pension benefits
Other benefits
As of December 31,
2011
2010
2009
2011
2010
2009
Discount rate (weighted average for all regions) 4.61% 5.01% 5.41% 4.70% 5.00% 5.60%
Of which Euro zone 4.21% 4.58% 5.12% 4.25% 4.55% 5.18%
Of which United States 5.00% 5.49% 6.00% 4.97% 5.42% 5.99%
Of which United Kingdom 4.75% 5.50% 5.50% - - -
Average expected rate of salary increase 4.69% 4.55% 4.50% - - -
Expected rate of healthcare inflation
– initial rate - - - 4.82% 4.82% 4.91%
– ultimate rate - - - 3.77% 3.75% 3.79%
Assumptions used to determine
the net periodic benefit cost (income)
Pension benefits
Other benefits
For the year ended December 31,
2011
2010
2009
2011
2010
2009
Discount rate (weighted average for all regions) 5.01% 5.41% 5.93% 5.00% 5.60% 6.00%
Of which Euro zone 4.58% 5.12% 5.72% 4.55% 5.18% 5.74%
Of which United States 5.49% 6.00% 6.23% 5.42% 5.99% 6.21%
Of which United Kingdom 5.50% 5.50% 6.00% - - 6.00%
Average expected rate of salary increase 4.55% 4.50% 4.56% - - -
Expected return on plan assets 5.90% 6.39% 6.14% - - -
Expected rate of healthcare inflation
– initial rate - - - 4.82% 4.91% 4.88%
– ultimate rate - - - 3.75% 3.79% 3.64%
A 0.5% increase or decrease in discount rates – all other things being equal - would have the following approximate impact:
(M€) 0.5% increase 0.5% decrease
Benefit obligation as of December 31, 2011 (513) 551
2012 net periodic benefit cost (income) (41) 56
A 0.5% increase or decrease in expected return on plan assets rate - all other things being equal - would have an impact of €31 million
on 2012 net periodic benefit cost (income).
The components of the net periodic benefit cost (income) in 2011, 2010 and 2009 are:
For the year ended December 31,
(M€)
Pension benefits
Other benefits
2011
2010
2009
2011
2010
2009
Service cost 163 159 134 13 11 10
Interest cost 420 441 428 28 29 30
Expected return on plan assets (385) (396) (343) - - -
Amortization of prior service cost 58 74 13 2 (5) (7)
Amortization of actuarial losses (gains) 46 66 50 - (4) (6)
Asset ceiling 2 (3) 4 - - -
Curtailments (22) (3) (4) (1) (3) (1)
Settlements (9) 7 (1) - - -
Special termination benefits - - - - 1 -
Net periodic benefit cost (income) 273 345 281 42 29 26
A positive or negative change of one-percentage-point in the healthcare inflation rate would have the following approximate impact:
(M€) 1% point increase 1% point decrease
Benefit obligation as of December 31, 2011 53 (63)
2011 net periodic benefit cost (income) 5 (5)
226
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
19) Provisions and other non-current liabilities
As of December 31,
(M€) 2011 2010 2009
Litigations and accrued penalty claims 572 485 423
Provisions for environmental contingencies 600 644 623
Asset retirement obligations 6,884 5,917 5,469
Other non-current provisions 1,099 1,116 1,331
Other non-current liabilities 1,754 936 1,535
Total 10,909 9,098 9,381
In 2011, litigation reserves mainly include a provision covering risks
concerning antitrust investigations related to Arkema amounting to
€17 million as of December 31, 2011. Other risks and commitments
that give rise to contingent liabilities are described in Note 32 to the
Consolidated Financial Statements.
In 2011, other non-current provisions mainly include:
– Provisions related to restructuring activities in the Downstream and
Chemicals segments for €261 million as of December 31, 2010;
and
– The contingency reserve related to the Buncefield depot
explosion (civil liability) for €194 million as of
December 31, 2010.
– The contingency reserve related to the Toulouse-AZF plant
explosion (civil liability) for €21 million as of December 31, 2011;
In 2010, other non-current liabilities mainly included debts (whose
maturity is more than one year) related to fixed assets acquisitions.
– Provisions related to restructuring activities in the Downstream
and Chemicals segments for €211 million as of
December 31, 2011; and
– The contingency reserve related to the Buncefield depot
explosion (civil liability) for €80 million as of December 31, 2011.
In 2011, other non-current liabilities mainly include debts (whose
maturity is more than one year) related to fixed assets acquisitions.
This heading is mainly composed of a €991 million debt related to
the acquisition of an interest in the liquids-rich area of the Utica
shale play (see Note 3 to the Consolidated Financial Statements).
In 2010, litigation reserves mainly included a provision covering
risks concerning antitrust investigations related to Arkema
amounting to €17 million as of December 31, 2010. Other risks
and commitments that give rise to contingent liabilities are
described in Note 32 to the Consolidated Financial Statements.
In 2010, other non-current provisions mainly included:
– The contingency reserve related to the Toulouse-AZF plant
explosion (civil liability) for €31 million as of December 31, 2010;
In 2009, litigation reserves mainly included a provision covering
risks concerning antitrust investigations related to Arkema
amounting to €43 million as of December 31, 2009. Other risks
and commitments that give rise to contingent liabilities are
described in Note 32 to the Consolidated Financial Statements.
In 2009, other non-current provisions mainly included:
– The contingency reserve related to the Toulouse-AZF plant
explosion (civil liability) for €40 million as of December 31, 2009;
– Provisions related to restructuring activities in the Downstream
and Chemicals segments for €130 million as of
December 31, 2009; and
– The contingency reserve related to the Buncefield depot
explosion (civil liability) for €295 million as of
December 31, 2009.
In 2009, other non-current liabilities mainly included debts (whose
maturity is more than one year) related to fixed assets acquisitions.
This heading was mainly composed of a €818 million debt related
to Chesapeake acquisition (see Note 3 to the Consolidated
Financial Statements).
Changes in provisions and other non-current liabilities
Changes in provisions and other non-current liabilities are as follows:
(M€) As of Allowances Reversals Currency Other As of
January 1, translation December 31,
adjustment
2011 9,098 921 (798) 227 1,461 10,909
2010 9,381 1,052 (971) 497 (861) 9,098
2009 7,858 1,254 (1,413) 202 1,480 9,381
Registration Document 2011. TOTAL
227
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Allowances
In 2011, allowances of the period (€921 million) mainly include:
– Asset retirement obligations for €344 million (accretion);
– Environmental contingencies for €100 million in the Downstream
and Chemicals segments; and
– Provisions related to restructuring of activities for €79 million.
In 2010, allowances of the period (€1,052 million) mainly included:
– The contingency reserve related to the Buncefield depot
explosion (civil liability), written back for €116 million; and
– Provisions for restructuring and social plans written back for
€164 million.
In 2010, reversals of the period (€971 million) were mainly related
to the following incurred expenses:
– Provisions for asset retirement obligations for €214 million;
– €26 million for litigation reserves in connection with antitrust
– Asset retirement obligations for €338 million (accretion);
investigations;
– Environmental contingencies for €88 million in the Downstream
– Environmental contingencies written back for €66 million;
and Chemicals segments;
– The contingency reserve related to the Buncefield depot
explosion (civil liability) for €79 million; and
– Provisions related to restructuring of activities for €226 million.
– The contingency reserve related to the Toulouse-AZF plant
explosion (civil liability), written back for €9 million;
– The contingency reserve related to the Buncefield depot
explosion (civil liability), written back for €190 million; and
In 2009, allowances of the period (€1,254 million) mainly included:
– Provisions for restructuring and social plans written back for
– Asset retirement obligations for €283 million (accretion);
– Environmental contingencies for €147 million in the Downstream
and Chemicals segments;
– The contingency reserve related to the Buncefield depot
explosion (civil liability) for €223 million; and
€60 million.
In 2009, reversals of the period (€1,413 million) were mainly related
to the following incurred expenses:
– Provisions for asset retirement obligations for €191 million;
– €52 million for litigation reserves in connection with antitrust
– Provisions related to restructuring of activities for €121 million.
investigations;
Reversals
In 2011, reversals of the period (€798 million) are mainly related to
the following incurred expenses:
– Provisions for asset retirement obligations for €189 million;
– Environmental contingencies written back for €86 million;
– The contingency reserve related to the Toulouse-AZF plant
explosion (civil liability), written back for €216 million;
– The contingency reserve related to the Buncefield depot
explosion (civil liability), written back for €375 million; and
– Environmental contingencies written back for €70 million;
– Provisions for restructuring and social plans written back for
– The contingency reserve related to the Toulouse-AZF plant
explosion (civil liability), written back for €10 million;
€28 million.
Changes in the asset retirement obligation
Changes in the asset retirement obligation are as follows:
(M€) As of Accretion Revision in New Spending on Currency Other As of
January 1, estimates obligations existing translation December 31,
obligations adjustment
2011 5,917 344 330 323 (189) 150 9 6,884
2010 5,469 338 79 175 (214) 316 (246) 5,917
2009 4,500 283 447 179 (191) 232 19 5,469
228
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
20) Financial debt and related financial instruments
A) Non-current financial debt and related financial instruments
As of December 31, 2011
(M€)
(Assets)/Liabilities
Secured Unsecured
Total
Non-current financial debt 349 22,208 22,557
of which hedging instruments of non-current financial debt (liabilities) - 146 146
Hedging instruments of non-current financial debt (assets)(a) - (1,976) (1,976)
Non-current financial debt - net of hedging instruments 349 20,232 20,581
Bonds after fair value hedge - 15,148 15,148
Fixed rate bonds and bonds after cash flow hedge - 4,424 4,424
Bank and other, floating rate 129 446 575
Bank and other, fixed rate 76 206 282
Financial lease obligations 144 8 152
Non-current financial debt - net of hedging instruments 349 20,232 20,581
(a) See the description of these hedging instruments in Notes 1 paragraph M(iii) “Long-term financing”, 28 and 29 to the Consolidated Financial Statements.
As of December 31, 2010
(M€)
(Assets)/Liabilities
Secured Unsecured
Total
Non-current financial debt 287 20,496 20,783
of which hedging instruments of non-current financial debt (liabilities) - 178 178
Hedging instruments of non-current financial debt (assets)(a) - (1,870) (1,870)
Non-current financial debt - net of hedging instruments 287 18,626 18,913
Bonds after fair value hedge - 15,491 15,491
Fixed rate bonds and bonds after cash flow hedge - 2,836 2,836
Bank and other, floating rate 47 189 236
Bank and other, fixed rate 65 110 175
Financial lease obligations 175 - 175
Non-current financial debt - net of hedging instruments 287 18,626 18,913
(a) See the description of these hedging instruments in Notes 1 paragraph M(iii) “Long-term financing”, 28 and 29 to the Consolidated Financial Statements.
As of December 31, 2009
(M€)
(Assets)/Liabilities
Secured Unsecured
Total
Non-current financial debt 312 19,125 19,437
of which hedging instruments of non-current financial debt (liabilities) - 241 241
Hedging instruments of non-current financial debt (assets)(a) - (1,025) (1,025)
Non-current financial debt - net of hedging instruments 312 18,100 18,412
Bonds after fair value hedge - 15,884 15,884
Fixed rate bonds and bonds after cash flow hedge - 1,700 1,700
Bank and other, floating rate 60 379 439
Bank and other, fixed rate 50 79 129
Financial lease obligations 202 58 260
Non-current financial debt - net of hedging instruments 312 18,100 18,412
(a) See the description of these hedging instruments in Notes 1 paragraph M(iii) “Long-term financing”, 28 and 29 to the Consolidated Financial Statements.
Registration Document 2011. TOTAL
229
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Fair value of bonds, as of December 31, 2011, after taking into account currency and interest rates swaps, is detailed as follows:
Bonds after
fair value hedge
(M€)
Year of
issue
Fair value
after
hedging as of
December 31,
2011
Fair value
after
hedging as of
December 31,
2010
Fair value
after
hedging as of
December 31,
2009
Currency
Maturity
Initial rate
before
hedging
instruments
Parent company
Bond 1998 129 125 116 FRF 2013 5.000%
Bond 2000 - - 61 EUR 2010 5.650%
Current portion
(less than one year) - - (61)
Total parent company 129 125 116
TOTAL CAPITAL(a)
Bond 2002 15 15 14 USD 2012 5.890%
Bond 2003 - - 160 CHF 2010 2.385%
Bond 2003 23 22 21 USD 2013 4.500%
Bond 2004 - - 53 CAD 2010 4.000%
Bond 2004 - - 113 CHF 2010 2.385%
Bond 2004 - - 438 EUR 2010 3.750%
Bond 2004 - - 322 GBP 2010 4.875%
Bond 2004 - - 128 GBP 2010 4.875%
Bond 2004 - - 185 GBP 2010 4.875%
Bond 2004 - 57 53 AUD 2011 5.750%
Bond 2004 - 116 107 CAD 2011 4.875%
Bond 2004 - 235 203 USD 2011 4.125%
Bond 2004 - 75 69 USD 2011 4.125%
Bond 2004 129 125 116 CHF 2012 2.375%
Bond 2004 52 51 47 NZD 2014 6.750%
Bond 2005 - 57 53 AUD 2011 5.750%
Bond 2005 - 60 56 CAD 2011 4.000%
Bond 2005 - 120 112 CHF 2011 1.625%
Bond 2005 - 226 226 CHF 2011 1.625%
Bond 2005 - 139 144 USD 2011 4.125%
Bond 2005 63 63 63 AUD 2012 5.750%
Bond 2005 200 194 180 CHF 2012 2.135%
Bond 2005 65 65 65 CHF 2012 2.135%
Bond 2005 97 97 97 CHF 2012 2.375%
Bond 2005 404 391 363 EUR 2012 3.250%
Bond 2005 57 57 57 NZD 2012 6.500%
Bond 2006 - - 75 GBP 2010 4.875%
Bond 2006 - - 50 EUR 2010 3.750%
Bond 2006 - - 50 EUR 2010 3.750%
Bond 2006 - - 100 EUR 2010 3.750%
Bond 2006 - 42 42 EUR 2011 EURIBOR 3 months +0.040%
Bond 2006 - 300 300 EUR 2011 3.875%
Bond 2006 - 150 150 EUR 2011 3.875%
Bond 2006 - 300 300 EUR 2011 3.875%
Bond 2006 - 120 120 USD 2011 5.000%
Bond 2006 - 300 300 EUR 2011 3.875%
Bond 2006 - 472 472 USD 2011 5.000%
Bond 2006 62 62 62 AUD 2012 5.625%
Bond 2006 72 72 72 CAD 2012 4.125%
Bond 2006 100 100 100 EUR 2012 3.250%
Bond 2006 74 74 74 GBP 2012 4.625%
Bond 2006 100 100 100 EUR 2012 3.250%
Bond 2006 125 125 125 CHF 2013 2.510%
Bond 2006 127 127 127 CHF 2014 2.635%
Bond 2006 130 130 130 CHF 2016 2.385%
Bond 2006 65 65 65 CHF 2016 2.385%
Bond 2006 64 64 64 CHF 2016 2.385%
Bond 2006 63 63 63 CHF 2016 2.385%
230
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
Bonds after
fair value hedge
(M€)
Year of
issue
Fair value
after
hedging as of
December 31,
2011
Fair value
after
hedging as of
December 31,
2010
Fair value
after
hedging as of
December 31,
2009
Currency
Maturity
Initial rate
before
hedging
instruments
TOTAL CAPITAL(a) (continued)
Bond 2006 129 129 129 CHF 2018 3.135%
Bond 2007 - - 60 CHF 2010 2.385%
Bond 2007 - - 74 GBP 2010 4.875%
Bond 2007 - 77 77 USD 2011 5.000%
Bond 2007 370 370 370 USD 2012 5.000%
Bond 2007 222 222 222 USD 2012 5.000%
Bond 2007 61 61 61 AUD 2012 6.500%
Bond 2007 72 72 72 CAD 2012 4.125%
Bond 2007 71 71 71 GBP 2012 4.625%
Bond 2007 300 300 300 EUR 2013 4.125%
Bond 2007 73 73 73 GBP 2013 5.500%
Bond 2007 306 306 306 GBP 2013 5.500%
Bond 2007 72 72 72 GBP 2013 5.500%
Bond 2007 248 248 248 CHF 2014 2.635%
Bond 2007 31 31 31 JPY 2014 1.505%
Bond 2007 61 61 61 CHF 2014 2.635%
Bond 2007 49 49 49 JPY 2014 1.723%
Bond 2007 121 121 121 CHF 2015 3.125%
Bond 2007 300 300 300 EUR 2017 4.700%
Bond 2007 76 76 76 CHF 2018 3.135%
Bond 2007 60 60 60 CHF 2018 3.135%
Bond 2008 - - 63 GBP 2010 4.875%
Bond 2008 - - 66 GBP 2010 4.875%
Bond 2008 - 92 92 AUD 2011 7.500%
Bond 2008 - 100 100 EUR 2011 3.875%
Bond 2008 - 150 150 EUR 2011 3.875%
Bond 2008 - 50 50 EUR 2011 3.875%
Bond 2008 - 50 50 EUR 2011 3.875%
Bond 2008 - 60 60 JPY 2011 EURIBOR 6 months +0.018%
Bond 2008 - 102 102 USD 2011 3.750%
Bond 2008 62 62 62 CHF 2012 2.135%
Bond 2008 124 124 124 CHF 2012 3.635%
Bond 2008 46 46 46 CHF 2012 2.385%
Bond 2008 92 92 92 CHF 2012 2.385%
Bond 2008 64 64 64 CHF 2012 2.385%
Bond 2008 50 50 50 EUR 2012 3.250%
Bond 2008 63 63 63 GBP 2012 4.625%
Bond 2008 63 63 63 GBP 2012 4.625%
Bond 2008 63 63 63 GBP 2012 4.625%
Bond 2008 62 62 62 NOK 2012 6.000%
Bond 2008 69 69 69 USD 2012 5.000%
Bond 2008 60 60 60 AUD 2013 7.500%
Bond 2008 61 61 61 AUD 2013 7.500%
Bond 2008 128 127 127 CHF 2013 3.135%
Bond 2008 62 62 62 CHF 2013 3.135%
Bond 2008 200 200 200 EUR 2013 4.125%
Bond 2008 100 100 100 EUR 2013 4.125%
Bond 2008 1,000 1,000 1,000 EUR 2013 4.750%
Bond 2008 63 63 63 GBP 2013 5.500%
Bond 2008 149 149 149 JPY 2013 EURIBOR 6 months +0.008%
Bond 2008 191 191 191 USD 2013 4.000%
Bond 2008 61 61 61 CHF 2015 3.135%
Bond 2008 62 62 62 CHF 2015 3.135%
Bond 2008 61 61 61 CHF 2015 3.135%
Bond 2008 62 62 62 CHF 2018 3.135%
Bond 2009 56 56 56 AUD 2013 5.500%
Bond 2009 54 54 54 AUD 2013 5.500%
Bond 2009 236 236 236 CHF 2013 2.500%
Registration Document 2011. TOTAL
231
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Bonds after
fair value hedge
(M€)
Year of
issue
Fair value
after
hedging as of
December 31,
2011
Fair value
after
hedging as of
December 31,
2010
Fair value
after
hedging as of
December 31,
2009
Currency
Maturity
Initial rate
before
hedging
instruments
TOTAL CAPITAL (a) (continued)
Bond 2009 77 77 77 USD 2013 4.000%
Bond 2009 131 131 131 CHF 2014 2.625%
Bond 2009 998 997 998 EUR 2014 3.500%
Bond 2009 150 150 150 EUR 2014 3.500%
Bond 2009 40 40 40 HKD 2014 3.240%
Bond 2009 107 103 96 AUD 2015 6.000%
Bond 2009 550 550 550 EUR 2015 3.625%
Bond 2009 684 684 684 USD 2015 3.125%
Bond 2009 232 224 208 USD 2015 3.125%
Bond 2009 99 99 99 CHF 2016 2.385%
Bond 2009 115 115 115 GBP 2017 4.250%
Bond 2009 225 225 225 GBP 2017 4.250%
Bond 2009 448 448 448 EUR 2019 4.875%
Bond 2009 69 69 69 HKD 2019 4.180%
Bond 2009 - 374 347 USD 2021 4.250%
Bond 2010 105 102 - AUD 2014 5.750%
Bond 2010 111 108 - CAD 2014 2.500%
Bond 2010 54 53 - NZD 2014 4.750%
Bond 2010 193 187 - USD 2015 2.875%
Bond 2010 966 935 - USD 2015 3.000%
Bond 2010 70 68 - AUD 2015 6,000%
Bond 2010 71 69 - AUD 2015 6,000%
Bond 2010 64 64 - AUD 2015 6,000%
Bond 2010 773 748 - USD 2016 2.300%
Bond 2010 491 476 - EUR 2022 3.125%
Bond 2011 116 - - USD 2016 6.500%
Bond 2011 597 - - USD 2018 3.875%
Current portion (less than one year) (2,992) (3,450) (1,937)
Total TOTAL CAPITAL 12,617 15,143 15,615
TOTAL CAPITAL CANADA Ltd.(b)
Bond 2011 565 - - CAD 2014 1.625%
Bond 2011 565 - - CAD 2014 USLIBOR 3 months +0.38%
Bond 2011 75 - - CAD 2014 5.750%
Bond 2011 738 - - CAD 2013 USLIBOR 3 months +0.09%
Bond 2011 82 - - CAD 2016 4.000%
Bond 2011 69 - - CAD 2016 3.625%
Current portion (less than one year) - - -
Total TOTAL CAPITAL CANADA Ltd. 2,094
TOTAL CAPITAL INTERNATIONAL(c) - - -
Other consolidated subsidiaries 308 223 153
Total bonds after fair value hedge 15,148 15,491 15,884
232
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
Bonds after
cash flow hedge
and fix rate bonds
(M€)
Year of
issue
Amount
after
hedging as of
December 31,
2011
Amount
after
hedging as of
December 31,
2010
Amount
after
hedging as of
December 31,
2009
Currency
Maturity
Initial rate
before
hedging
instruments
TOTAL CAPITAL (a)
Bond 2005 294 293 292 GBP 2012 4.625%
Bond 2009 744 691 602 EUR 2019 4.875%
Bond 2009 386 - - USD 2021 4.250%
Bond 2009 1,016 917 806 EUR 2024 5.125%
Bond 2010 966 935 - USD 2020 4.450%
Bond 2011 386 - - USD 2021 4.125%
Current portion (less than one year) (294) - -
Total TOTAL CAPITAL 3,498 2,836 1,700
Other consolidated subsidiaries(d) 926 - -
Total Bonds after cash flow hedge 4,424 2,836 1,700
(a) TOTAL CAPITAL is a wholly-owned indirect subsidiary of TOTAL S.A. (with the exception of one share held by each member of its Board of Directors). It acts as a financing vehicle
for the Group. Its debt securities are fully and unconditionally guaranteed by TOTAL S.A. as to payment of principal, premium, if any, interest and any other amounts due.
(b) TOTAL CAPITAL CANADA Ltd. is a wholly-owned direct subsidiary of TOTAL S.A. It acts as a financing vehicle for the activities of the Group in Canada. Its debt securities are fully
and unconditionally guaranteed by TOTAL S.A. as to payment of principal, premium, if any, interest and any other amounts due.
(c) TOTAL CAPITAL INTERNATIONAL is a wholly-owned direct subsidiary of TOTAL S.A. It acts as a financing vehicle for the Group. Its debt securities are fully and unconditionally
guaranteed by TOTAL S.A. as to payment of principal, premium, if any, interest and any other amounts due.
(d) This amount includes SunPower's convertible bonds for an amount of €355 million.
Loan repayment schedule (excluding current portion)
As of December 31, 2011
(M€)
Non-current
financial debt
of which hedging
instruments of
non-current
financial debt
(liabilities)
Hedging
instruments of
non-current
financial debt
(assets)
Non-current
financial
debt - net of
hedging
instruments
%
2013 5,021 80 (529) 4,492 22%
2014 4,020 3 (390) 3,630 18%
2015 4,070 6 (456) 3,614 18%
2016 1,712 9 (193) 1,519 7%
2017 and beyond 7,734 48 (408) 7,326 35%
Total 22,557 146 (1,976) 20,581 100%
As of December 31, 2010
(M€)
Non-current
financial debt
of which hedging
instruments of
non-current
financial debt
(liabilities)
Hedging
instruments of
non-current
financial debt
(assets)
Non-current
financial
debt - net of
hedging
instruments
%
2012 3,756 34 (401) 3,355 18%
2013 4,017 76 (473) 3,544 19%
2014 2,508 1 (290) 2,218 12%
2015 3,706 2 (302) 3,404 18%
2016 and beyond 6,796 65 (404) 6,392 33%
Total 20,783 178 (1,870) 18,913 100%
As of December 31, 2009
(M€)
Non-current
financial debt
of which hedging
instruments of
non-current
financial debt
(liabilities)
Hedging
instruments of
non-current
financial debt
(assets)
Non-current
financial
debt - net of
hedging
instruments
%
2011 3,857 42 (199) 3,658 20%
2012 3,468 48 (191) 3,277 18%
2013 3,781 95 (236) 3,545 19%
2014 2,199 6 (90) 2,109 11%
2015 and beyond 6,132 50 (309) 5,823 32%
Total 19,437 241 (1,025) 18,412 100%
Registration Document 2011. TOTAL
233
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Analysis by currency and interest rate
These analyses take into account interest rate and foreign currency swaps to hedge non-current financial debt.
As of December 31,
(M€) 2011 % 2010 % 2009 %
U.S. Dollar 8,645 42% 7,248 39% 3,962 21%
Euro 9,582 47% 11,417 60% 14,110 77%
Other currencies 2,354 11% 248 1% 340 2%
Total 20,581 100% 18,913 100% 18,412 100%
As of December 31,
(M€) 2011 % 2010 % 2009 %
Fixed rate 4,854 24% 3,177 17% 2,064 11%
Floating rate 15,727 76% 15,736 83% 16,348 89%
Total 20,581 100% 18,913 100% 18,412 100%
B) Current financial assets and liabilities
Current borrowings consist mainly of commercial papers or treasury bills or draws on bank loans. These instruments bear interest at rates
that are close to market rates.
As of December 31,
(M€)
(Assets)/Liabilities 2011 2010 2009
Current financial debt(a) 5,819 5,867 4,761
Current portion of non-current financial debt 3,856 3,786 2,233
Current borrowings (note 28) 9,675 9,653 6,994
Current portion of hedging instruments of debt (liabilities) 40 12 97
Other current financial instruments (liabilities) 127 147 26
Other current financial liabilities (note 28) 167 159 123
Current deposits beyond three months (101) (869) (55)
Current portion of hedging instruments of debt (assets) (383) (292) (197)
Other current financial instruments (assets) (216) (44) (59)
Current financial assets (note 28) (700) (1,205) (311)
Current borrowings and related financial assets and liabilities, net 9,142 8,607 6,806
(a) As of December 31, 2011 and as of December 31, 2010, the current financial debt includes a commercial paper program in Total Capital Canada Ltd. Total Capital Canada Ltd. is a
wholly-owned direct subsidiary of TOTAL S.A. It acts as a financing vehicle for the activities of the Group in Canada. Its debt securities are fully and unconditionally guaranteed by
TOTAL S.A. as to payment of principal, premium, if any, interest and any other amounts due.
234
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
C) Net-debt-to-equity ratio
For its internal and external communication needs, the Group calculates a debt ratio by dividing its net financial debt by equity. Adjusted
shareholders’ equity for the year ended December 31, 2011 is calculated after payment of a dividend of €2.28 per share, subject to
approval by the shareholders’ meeting on May 11, 2012.
The net-debt-to-equity ratio is calculated as follows:
As of December 31,
(M€)
(Assets)/Liabilities 2011 2010 2009
Current borrowings 9,675 9,653 6,994
Other current financial liabilities 167 159 123
Current financial assets (700) (1,205) (311)
Non-current financial debt 22,557 20,783 19,437
Hedging instruments on non-current financial debt (1,976) (1,870) (1,025)
Cash and cash equivalents (14,025) (14,489) (11,662)
Net financial debt 15,698 13,031 13,556
Shareholders’ equity - Group share 68,037 60,414 52,552
Distribution of the income based on existing shares at the closing date (1,255) (2,553) (2,546)
Non-controlling interests 1,352 857 987
Adjusted shareholders’ equity 68,134 58,718 50,993
Net-debt-to-equity ratio 23.0% 22.2% 26.6%
21) Other creditors and accrued liabilities
As of December 31,
(M€) 2011 2010 2009
Accruals and deferred income 231 184 223
Payable to States (including taxes and duties) 8,040 7,235 6,024
Payroll 1,062 996 955
Other operating liabilities 5,441 3,574 4,706
Total 14,774 11,989 11,908
As of December 31, 2011, the heading “Other operating liabilities” mainly includes the third quarterly interim dividend for the fiscal year 2011
for €1,317 million. This interim dividend will be paid on March 2012.
As of December 31, 2009, the heading “Other operating liabilities” mainly included €744 million related to Chesapeake acquisition
(see Note 3 to the Consolidated Financial Statements).
Registration Document 2011. TOTAL
235
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
22) Lease contracts
The Group leases real estate, retail stations, ships, and other equipments (see Note 11 to the Consolidated Financial Statements).
The future minimum lease payments on operating and finance leases to which the Group is committed are shown as follows:
For the year ended December 31, 2011
(M€) Operating leases Finance leases
2012 762 41
2013 552 40
2014 416 37
2015 335 36
2016 316 34
2017 and beyond 940 20
Total minimum payments 3,321 208
Less financial expenses - (31)
Nominal value of contracts - 177
Less current portion of finance lease contracts - (25)
Outstanding liability of finance lease contracts - 152
For the year ended December 31, 2010
(M€) Operating leases Finance leases
2011 582 39
2012 422 39
2013 335 39
2014 274 35
2015 230 35
2016 and beyond 1,105 54
Total minimum payments 2,948 241
Less financial expenses - (43)
Nominal value of contracts - 198
Less current portion of finance lease contracts - (23)
Outstanding liability of finance lease contracts - 175
For the year ended December 31, 2009
(M€) Operating leases Finance leases
2010 523 42
2011 377 43
2012 299 42
2013 243 41
2014 203 39
2015 and beyond 894 128
Total minimum payments 2,539 335
Less financial expenses - (53)
Nominal value of contracts - 282
Less current portion of finance lease contracts - (22)
Outstanding liability of finance lease contracts - 260
Net rental expense incurred under operating leases for the year ended December 31, 2011 is €645 million (against €605 million in 2010 and
€613 million in 2009).
236
TOTAL. Registration Document 2011
23) Commitments and contingencies
As of December 31, 2011
(M€)
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
Maturity and installments
Total
Less than
1 year
Between 1
and 5 years
More than
5 years
Non-current debt obligations net of hedging instruments (note 20) 20,429 - 13,121 7,308
Current portion of non-current debt obligations net of hedging instruments (note 20) 3,488 3,488 - -
Finance lease obligations (note 22) 177 25 134 18
Asset retirement obligations (note 19) 6,884 272 804 5,808
Contractual obligations recorded in the balance sheet 30,978 3,785 14,059 13,134
Operating lease obligations (note 22) 3,321 762 1,619 940
Purchase obligations 77,353 11,049 20,534 45,770
Contractual obligations not recorded in the balance sheet 80,674 11,811 22,153 46,710
Total of contractual obligations 111,652 15,596 36,212 59,844
Guarantees given for excise taxes 1,765 1,594 73 98
Guarantees given against borrowings 4,778 3,501 323 954
Indemnities related to sales of businesses 39 - 34 5
Guarantees of current liabilities 376 262 35 79
Guarantees to customers/suppliers 3,265 1,634 57 1,574
Letters of credit 2,408 1,898 301 209
Other operating commitments 2,477 433 697 1,347
Total of other commitments given 15,108 9,322 1,520 4,266
Mortgages and liens received 408 7 119 282
Goods and services sale obligations(a) 62,216 4,221 17,161 40,834
Other commitments received 6,740 4,415 757 1,568
Total of commitments received 69,364 8,643 18,037 42,684
(a) As from December 31, 2011, the Group discloses its goods and services sale obligations.
As of December 31, 2010
(M€)
Maturity and installments
Total
Less than
1 year
Between 1
and 5 years
More than
5 years
Non-current debt obligations net of hedging instruments (note 20) 18,738 - 12,392 6,346
Current portion of non-current debt obligations net of hedging instruments (note 20)
3,483 3,483 - -
Finance lease obligations (note 22) 198 23 129 46
Asset retirement obligations (note 19) 5,917 177 872 4,868
Contractual obligations recorded in the balance sheet 28,336 3,683 13,393 11,260
Operating lease obligations (note 22) 2,948 582 1,261 1,105
Purchase obligations 61,293 6,347 14,427 40,519
Contractual obligations not recorded in the balance sheet 64,241 6,929 15,688 41,624
Total of contractual obligations 92,577 10,612 29,081 52,884
Guarantees given for excise taxes 1,753 1,594 71 88
Guarantees given against borrowings 5,005 1,333 493 3,179
Indemnities related to sales of businesses 37 - 31 6
Guarantees of current liabilities 171 147 19 5
Guarantees to customers/suppliers 3,020 1,621 96 1,303
Letters of credit 1,250 1,247 - 3
Other operating commitments 2,057 467 220 1,370
Total of other commitments given 13,293 6,409 930 5,954
Mortgages and liens received 429 2 114 313
Other commitments received 6,387 3,878 679 1,830
Total of commitments received 6,816 3,880 793 2,143
Registration Document 2011. TOTAL
237
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
As of December 31, 2009
(M€)
Maturity and installments
Total
Less than
1 year
Between 1
and 5 years
More than
5 years
Non-current debt obligations net of hedging instruments (note 20) 18,152 - 12,443 5,709
Current portion of non-current debt obligations net of hedging instruments (note 20) 2,111 2,111 - -
Finance lease obligations (note 22) 282 22 146 114
Asset retirement obligations (note 19) 5,469 235 972 4,262
Contractual obligations recorded in the balance sheet 26,014 2,368 13,561 10,085
Operating lease obligations (note 22)
2,539 523 1,122 894
Purchase obligations 49,808 4,542 9,919 35,347
Contractual obligations not recorded in the balance sheet 52,347 5,065 11,041 36,241
Total of contractual obligations 78,361 7,433 24,602 46,326
Guarantees given for excise taxes 1,765 1,617 69 79
Guarantees given against borrowings 2,882 1,383 709 790
Indemnities related to sales of businesses 36 - 1 35
Guarantees of current liabilities 203 160 38 5
Guarantees to customers/suppliers 2,770 1,917 70 783
Letters of credit 1,499 1,485 2 12
Other operating commitments 765 582 103 80
Total of other commitments given 9,920 7,144 992 1,784
Mortgages and liens received 330 5 106 219
Other commitments received 5,637 3,187 481 1,969
Total of commitments received 5,967 3,192 587 2,188
A) Contractual obligations
Purchase obligations
Debt obligations
“Non-current debt obligations” are included in the items
“Non-current financial debt” and “Hedging instruments of
non-current financial debt” of the Consolidated Balance Sheet.
It includes the non-current portion of swaps hedging bonds, and
excludes non-current finance lease obligations of €152 million.
The current portion of non-current debt is included in the items
“Current borrowings”, “Current financial assets” and “Other current
financial liabilities” of the Consolidated Balance Sheet. It includes
the current portion of swaps hedging bonds, and excludes the
current portion of finance lease obligations of €25 million.
The information regarding contractual obligations linked to
indebtedness is presented in Note 20 to the Consolidated
Financial Statements.
Lease contracts
The information regarding operating and finance leases is
presented in Note 22 to the Consolidated Financial Statements.
Asset retirement obligations
This item represents the discounted present value of Upstream
asset retirement obligations, primarily asset removal costs at the
completion date. The information regarding contractual obligations
linked to asset retirement obligations is presented in Notes 1Q
and 19 to the Consolidated Financial Statements.
Purchase obligations are obligations under contractual agreements
to purchase goods or services, including capital projects. These
obligations are enforceable and legally binding on the company
and specify all significant terms, including the amount and the
timing of the payments.
These obligations mainly include: hydrocarbon unconditional
purchase contracts (except where an active, highly-liquid market
exists and when the hydrocarbons are expected to be re-sold
shortly after purchase), reservation of transport capacities in
pipelines, unconditional exploration works and development works
in the Upstream segment, and contracts for capital investment
projects in the Downstream segment.
B) Other commitments given
Guarantees given for excise taxes
They consist of guarantees given to other oil and gas companies
in order to comply with French tax authorities’ requirements for oil
and gas imports in France. A payment would be triggered by a
failure of the guaranteed party with respect to the French tax
authorities. The default of the guaranteed parties is however
considered to be highly remote by the Group.
Guarantees given against borrowings
The Group guarantees bank debt and finance lease obligations
of certain non-consolidated subsidiaries and equity affiliates.
Maturity dates vary, and guarantees will terminate on payment
and/or cancellation of the obligation. A payment would be triggered
by failure of the guaranteed party to fulfill its obligation covered by
the guarantee, and no assets are held as collateral for these
238
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
guarantees. As of December 31, 2011, the maturities of these
guarantees are up to 2023.
Guarantees given against borrowings include the guarantee given
in 2008 by TOTAL S.A. in connection with the financing of the
Yemen LNG project for an amount of €1,208 million. In turn, certain
partners involved in this project have given commitments that
could, in the case of Total S.A.’s guarantees being called for
the maximum amount, reduce the Group’s exposure by up to
€404 million, recorded under “Other commitments received”.
In 2010, TOTAL S.A. provided guarantees in connection with the
financing of the Jubail project (operated by SAUDI ARAMCO
TOTAL Refining and Petrochemical Company (SATORP)) of up to
€2,463 million, proportional to TOTAL’s share in the project
(37.5%). In addition, TOTAL S.A. provided in 2010 a guarantee in
favor of its partner in the Jubail project (Saudi Arabian Oil Company)
with respect to Total Refining Saudi Arabia SAS’s obligations under
the shareholders agreement with respect to SATORP. As of
December 31, 2011, this guarantee is of up to €1,095 million and
has been recorded under “Other operating commitments”.
Indemnities related to sales of businesses
In the ordinary course of business, the Group executes contracts
involving standard indemnities in oil industry and indemnities
specific to transactions such as sales of businesses. These
indemnities might include claims against any of the following:
environmental, tax and shareholder matters, intellectual property
rights, governmental regulations and employment-related matters,
dealer, supplier, and other commercial contractual relationships.
Performance under these indemnities would generally be triggered
by a breach of terms of the contract or by a third party claim.
The Group regularly evaluates the probability of having to incur
costs associated with these indemnities.
The guarantees related to antitrust investigations granted as part
of the agreement relating to the spin-off of Arkema are described in
Note 32 to the Consolidated Financial Statements.
Other guarantees given
Non-consolidated subsidiaries
The Group also guarantees the current liabilities of certain
non-consolidated subsidiaries. Performance under these
guarantees would be triggered by a financial default of the entity.
Operating agreements
As part of normal ongoing business operations and consistent
with generally and accepted recognized industry practices,
the Group enters into numerous agreements with other parties.
These commitments are often entered into for commercial purposes,
for regulatory purposes or for other operating agreements.
C) Commitments received
Goods and services sale obligations
These amounts represent binding obligations under contractual
agreements to sell goods or services, including in particular
hydrocarbon unconditional sale contracts (except when an
active, highly-liquid market exists and volumes are re-sold shortly
after purchase).
Registration Document 2011. TOTAL
239
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
24) Related parties
The main transactions and balances with related parties (principally non-consolidated subsidiaries and equity affiliates) are detailed as follows:
As of December 31,
(M€) 2011 2010 2009
Balance sheet
Receivables
Debtors and other debtors 585 432 293
Loans (excl. loans to equity affiliates) 331 315 438
Payables
Creditors and other creditors 724 497 386
Debts 31 28 42
For the year ended December 31,
(M€) 2011 2010 2009
Statement of income
Sales 4,400 3,194 2,183
Purchases 5,508 5,576 2,958
Financial expense - 69 1
Financial income 79 74 68
Compensation for the administration and management bodies
The aggregate amount of direct and indirect compensation accounted for by the French and foreign affiliates of the Company for the
executive officers of TOTAL (the members of the Management Committee and the Treasurer) and for the members of the Board of Directors
who are employees of the Group, is detailed as follows:
For the year ended December 31,
(M€) 2011 2010 2009
Number of people 30 26 27
Direct or indirect compensation received 20.4 20.8 19.4
Pension expenses (a) 9.4 12.2 10.6
Other long-term benefits expenses - - -
Termination benefits expenses 4.8 - -
Share-based payments expense (IFRS 2) (b) 10.2 10.0 11.2
(a) The benefits provided for executive officers and certain members of the Board of Directors, employees and former employees of the Group, include severance to be paid on retirement,
supplementary pension schemes and insurance plans, which represent €139.7 million provisioned as of December 31, 2011 (against €113.8 million as of December 31, 2010 and
€96.6 million as of December 31, 2009).
(b) Share-based payments expense computed for the executive officers and the members of the Board of Directors who are employees of the Group as described in Note 25 paragraph E
to the Consolidated Financial Statements and based on the principles of IFRS 2 “Share-based payments” described in Note 1 paragraph E to the Consolidated Financial Statements.
The compensation allocated to members of the Board of Directors for directors’ fees totaled €1.07 million in 2011 (€0.96 million in 2010
and €0.97 million in 2009).
240
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
25) Share-based payments
A) TOTAL share subscription option plans
2003 Plan 2004 Plan 2005 Plan 2006 Plan 2007 Plan 2008 Plan 2009 Plan 2010 Plan 2011 Plan
Total Weighted
average
exercise
price
Date of the
shareholders’ meeting 05/17/2001 05/14/2004 05/14/2004 05/14/2004 05/11/2007 05/11/2007 05/11/2007 05/21/2010 05/21/2010 - -
Date of the award(a) 07/16/2003 07/20/2004 07/19/2005 07/18/2006 07/17/2007 10/09/2008 09/15/2009 09/14/2010 09/14/2011 - -
Exercise price until
May 23, 2006 included(b) 33.30 39.85 49.73 - - - - - - - -
Exercise price
since May 24, 2006(b) 32.84 39.30 49.04 50.60 60.10 42.90 39.90 38.20 33.00 - -
Expiry date 07/16/2011 07/20/2012 07/19/2013 07/18/2014 07/17/2015 10/09/2016 09/15/2017 09/14/2018 09/14/2019 - -
Number of options(c)
Existing options
as of January 1, 2008 8,368,378 13,197,236 6,243,438 5,711,060 5,920,105 - - - - 39,440,217 44.23
Granted - - - - - 4,449,810 - - - 4,449,810 42.90
Cancelled (25,184) (118,140) (34,032) (53,304) (34,660) (6,000) - - - (271,320) 44.88
Exercised (841,846) (311,919) (17,702) (6,700) - - - - - (1,178,167) 34.89
Existing options
as of January 1, 2009 7,501,348 12,767,177 6,191,704 5,651,056 5,885,445 4,443,810 - - - 42,440,540 44.35
Granted - - - - - - 4,387,620 - - 4,387,620 39.90
Cancelled (8,020) (18,387) (6,264) (5,370) (13,780) (2,180) (10,610) - - (64,611) 45.04
Exercised (681,699) (253,081) - - - - - - - (934,780) 34.59
Existing options
as of January 1, 2010 6,811,629 12,495,709 6,185,440 5,645,686 5,871,665 4,441,630 4,377,010 - - 45,828,769 44.12
Granted - - - - - - - 4,788,420 - 4,788,420 38.20
Cancelled(d) (1,420) (15,660) (6,584) (4,800) (5,220) (92,472) (4,040) (1,120) - (131,316) 43.50
Exercised (1,075,765) (141,202) - - - - (1,080) - - (1,218,047) 33.60
Existing options
as of January 1, 2011 5,734,444 12,338,847 6,178,856 5,640,886 5,866,445 4,349,158 4,371,890 4,787,300 - 49,267,826 43.80
Granted - - - - - - - - 1,518,840 1,518,840 33.00
Cancelled(e) (738,534) (28,208) (16,320) (17,380) (16,080) (13,260) (14,090) (85,217) (1,000) (930,089) 34.86
Exercised (4,995,910) (216,115) - - - (200) - (2,040) (9,400) (5,223,665) 33.11
Existing options
as of December 31, 2011 - 12,094,524 6,162,536 5,623,506 5,850,365 4,335,698 4,357,800 4,700,043 1,508,440 44,632,912 44.87
(a) The grant date is the date of the Board meeting awarding the share subscription options, except for the grant of October 9, 2008, decided by the Board on September 9, 2008.
(b) Exercise price in euro. The exercise prices of TOTAL subscription shares of the plans in force at that date were multiplied by 0.25 to take into account the four-for-one stock split
on May 18, 2006. Moreover, following the spin-off of Arkema, the exercise prices of TOTAL subscription shares of these plans were multiplied by an adjustment factor equal
to 0.986147 effective as of May 24, 2006.
(c) The number of options awarded, outstanding, canceled or exercised before May 23, 2006 included, was multiplied by four to take into account the four-for-one stock split approved
by the shareholders’ meeting on May 12, 2006.
(d) Out of 92,472 options awarded under the 2008 Plan that were canceled, 88,532 options were canceled due to the performance condition. The acquisition rate applicable to the
subscription options that were subject to the performance condition of the 2008 Plan was 60%.
(e) Out of the 930,089 options canceled in 2011, 738,534 options that were not exercised expired due to the expiry of the 2003 subscription option Plan on July 16, 2011.
Registration Document 2011. TOTAL
241
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Options are exercisable, subject to a continuous employment
condition, after a 2-year period from the date of the Board meeting
awarding the options and expire eight years after this date. The
underlying shares may not be transferred during four years from the
date of grant. For the 2007 to 2011 Plans, the 4-year transfer
restriction period does not apply to employees of non-French
subsidiaries as of the date of the grant, who may transfer the
underlying shares after a 2-year period from the date of the grant.
2011 Plan
For the 2011 Plan, the Board of Directors decided that for each
grantee other than the Chairman and Chief Executive Officer, the
options will be finally granted to their beneficiary provided that the
performance condition is fulfilled.
The performance condition states that the number of options finally
granted is based on the average of the Return On Equity (ROE) of
the Group. The average ROE is calculated by the Group from the
consolidated balance sheet and statement of income of the Group
for fiscal years 2011 and 2012.
The acquisition rate:
– is equal to zero if the average ROE is less than or equal to 7%;
– varies on straight-line basis between 0% and 100% if the
average ROE is more than 7% and less than 18%; and
– is equal to 100% if the average ROE is more than or equal
to 18%.
In addition, as part of the 2011 Plan, the Board of Directors
decided that the number of share subscription options finally
awarded to the Chairman and Chief Executive Officer will be
subject to two performance conditions:
– For 50% of the share subscription options granted, the
performance condition states that the number of options finally
granted is based on the average ROE of the Group. The average
ROE is calculated by the Group from the consolidated balance
sheet and statement of income of the Group for fiscal years 2011
and 2012. The acquisition rate is equal to zero if the average
ROE is less than or equal to 7%; varies on a straight-line basis
between 0% and 100% if the average ROE is more than 7% and
less than 18%; and is equal to 100% if the average ROE is more
than or equal to 18%.
– For 50% of the share subscription options granted, the
performance condition states that the number of options finally
granted is based on the average of the Return On Average
Capital Employed (ROACE) of the Group. The average ROACE is
calculated by the Group from the consolidated balance sheet
and statement of income of the Group for fiscal years 2011
and 2012. The acquisition rate is equal to zero if the average
ROACE is less than or equal to 6%; varies on a straight-line basis
between 0% and 100% if the average ROACE is more than 6%
and less than 15%; and is equal to 100% if the average ROACE
is more than or equal to 15%.
2010 Plan
For the 2010 Plan, the Board of Directors decided that:
– For each grantee of up to 3,000 options, other than the
Chairman and Chief Executive Officer, the options will be finally
granted to their beneficiary.
– For each grantee of more than 3,000 options and less or equal
to 50,000 options (other than the Chairman and Chief Executive
Officer):
- The first 3,000 options and two-thirds above the first 3,000
options will be finally granted to their beneficiary;
- The outstanding options, that is one-third of the options above
the first 3,000 options, will be finally granted provided that the
performance condition described below is fulfilled.
– For each grantee of more than 50,000 options (other than the
Chairman and Chief Executive Officer):
- The first 3,000 options, two-thirds of the options above the
first 3,000 options and below the first 50,000 options, and
one-third of the options above the first 50,000 options, will be
finally granted to their beneficiary;
- The outstanding options, that is one-third of the options above
the first 3,000 options and below the first 50,000 options and
two-thirds of the options above the first 50,000 options, will be
finally granted provided that the performance condition is fulfilled.
The performance condition states that the number of options finally
granted is based on the average ROE of the Group. The average
ROE is calculated by the Group based on TOTAL’s consolidated
balance sheet and statement of income for fiscal years 2010
and 2011.The acquisition rate:
– is equal to zero if the average ROE is less than or equal to 7%;
– varies on straight-line basis between 0% and 100% if the
average ROE is more than 7% and less than 18%; and
– is equal to 100% if the average ROE is more than or equal
to 18%.
In addition, as part of the 2010 Plan, the Board of Directors
decided that the number of share subscription options finally
awarded to the Chairman and Chief Executive Officer will be
subject to two performance conditions:
– For 50% of the share subscription options granted, the
performance condition states that the number of options finally
granted is based on the average ROE of the Group. The average
ROE is calculated by the Group based on TOTAL’s consolidated
balance sheet and statement of income for fiscal years 2010
and 2011. The acquisition rate is equal to zero if the average
ROE is less than or equal to 7%; varies on a straight-line basis
between 0% and 100% if the average ROE is more than 7% and
less than 18%; and is equal to 100% if the average ROE is more
than or equal to 18%.
– For 50% of the share subscription options granted, the
performance condition states that the number of options finally
granted is based on the average ROACE of the Group. The
average ROACE is calculated by the Group based on TOTAL’s
consolidated balance sheet and statement of income for fiscal
years 2010 and 2011. The acquisition rate is equal to zero if the
average ROACE is less than or equal to 6%; varies on a straight-
line basis between 0% and 100% if the average ROACE is more
than 6% and less than 15%; and is equal to 100% if the average
ROACE is more than or equal to 15%.
2009 Plan
For the 2009 Plan, the Board of Directors decided that for each
beneficiary, other than the Chief Executive Officer, of more
than 25,000 options, one third of the options granted in excess of
this number will be finally granted subject to a performance
242
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
condition. This condition states that the final number of options
finally granted is based on the average ROE of the Group as
published by TOTAL. The average ROE is calculated based on the
Group’s consolidated balance sheet and statement of income for
fiscal years 2009 and 2010. The acquisition rate:
– is equal to zero if the average ROE is less than or equal to 7%;
– varies on straight-line basis between 0% and 100% if the
average ROE is more than 7% and less than 18%; and
– is equal to 100% if the average ROE is more than or equal
to 18%.
In addition, the Board of Directors decided that, for the Chief
Executive Officer, the number of share subscription options finally
granted will be subject to two performance conditions:
– For 50% of the share subscription options granted, the
performance condition states that the number of options finally
granted is based on the average ROE of the Group as published
by TOTAL. The average ROE is calculated based on the Group’s
consolidated balance sheet and statement of income for fiscal
years 2009 and 2010. The acquisition rate is equal to zero if the
average ROE is less than or equal to 7%; varies on a straight-line
basis between 0% and 100% if the average ROE is more
than 7% and less than 18%; and is equal to 100% if the average
ROE is more than or equal to 18%.
– For 50% of the share subscription options granted, the
performance condition states that the number of options finally
granted is based on the average ROACE of the Group as
published by TOTAL. The average ROACE is calculated based
on the Group’s consolidated balance sheet and statement of
income for fiscal years 2009 and 2010. The acquisition rate is
equal to zero if the average ROACE is less than or equal to 6%;
varies on a straight-line basis between 0% and 100% if the
average ROACE is more than 6% and less than 15%; and is
equal to 100% if the average ROACE is more than or equal
to 15%.
Due to the application of the performance condition, the acquisition
rates were 100% for the 2009 Plan.
B) TOTAL share purchase option plans
2001Plan(a)
2002 Plan(b)
Total
Weighted
average
exercise
price
Date of the shareholders’ meeting 05/17/2001 05/17/2001
Grant date (c) 07/10/2001 07/09/2002
Exercise price until May 23, 2006 included(d) 42.05 39.58 - -
Exercise price since May 24, 2006(d) 41.47 39.03 - -
Expiry date 07/10/2009 07/09/2010
Number of options(e)
Outstanding as of January 1, 2009 4,691,426 6,450,857 11,142,283 40.06
Awarded - - - -
Canceled (4,650,446) (7,920) (4,658,366) 41.47
Exercised (40,980) (507,676) (548,656) 39.21
Outstanding as of January 1, 2010 - 5,935,261 5,935,261 39.03
Awarded - - - -
Canceled(f) - (4,671,989) (4,671,989) 39.03
Exercised - (1,263,272) (1,263,272) 39.03
Outstanding as of January 1, 2011 - - - -
Awarded - - - -
Canceled - - - -
Exercised - - - -
Outstanding as of December 31, 2011 - - - -
(a) Options were exercisable, subject to a continued employment condition, after a 3.5-year vesting period from the date of the Board meeting awarding the options and expired 8 years
after this date. The underlying shares may not be transferred during the 4-year period from the date of the grant. This plan expired on July 10, 2009.
(b) Options were exercisable, subject to a continued employment condition, after a 2-year vesting period from the date of the Board meeting awarding the options and expired 8 years after
this date. The underlying shares may not be transferred during the 4-year period from the date of the grant. This plan expired on July 9, 2010.
(c) The grant date is the date of the Board meeting awarding the options.
(d) Exercise price in euro. The exercise prices of TOTAL share purchase options of the plans at that date were multiplied by 0.25 to take into account the four-for-one stock split on
May 18, 2006. Moreover, following the spin-off of Arkema, the exercise prices of TOTAL share purchase options of these plans were multiplied by an adjustment factor equal
to 0.986147 effective as of May 24, 2006.
(e) The number of options awarded, outstanding, canceled or exercised before May 23, 2006 included, was multiplied by four to take into account the four-for-one stock split approved by
the shareholders’ meeting on May 12, 2006.
(f) Out of the 4,671,989 options canceled in 2010, 4,671,145 options that were not exercised expired due to the expiry of the 2002 purchase option Plan on July 9, 2010.
Registration Document 2011. TOTAL
243
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
C) Exchange guarantee granted to the holders
of Elf Aquitaine share subscription options
Pursuant to the public exchange offer for Elf Aquitaine shares which
was made in 1999, the Group made a commitment to guarantee
the holders of Elf Aquitaine share subscription options, at the end
of the period referred to in Article 163 bis C of the French Tax Code
(CGI), and until the end of the period for the exercise of the options,
the possibility to exchange their future Elf Aquitaine shares for
TOTAL shares, on the basis of the exchange ratio of the offer
(nineteen TOTAL shares for thirteen Elf Aquitaine shares).
In order to take into account the spin-off of S.D.A. (Société de
Développement Arkema) by Elf Aquitaine, the spin-off of Arkema by
TOTAL S.A. and the four-for-one TOTAL stock split, the Board of
Directors of TOTAL S.A., in accordance with the terms of the share
D) TOTAL performance share grants
exchange undertaking, approved on March 14, 2006 to adjust the
exchange ratio described above (see pages 24 and 25 of the
“Prospectus for the purpose of listing Arkema shares on Euronext
Paris in connection with the allocation of Arkema shares to
TOTAL S.A. shareholders”). Following the approval by Elf Aquitaine
shareholders’ meeting on May 10, 2006 of the spin-off of S.D.A.
by Elf Aquitaine, the approval by TOTAL S.A. shareholders’ meeting
on May 12, 2006 of the spin-off of Arkema by TOTAL S.A. and the
four-for-one TOTAL stock split, the exchange ratio was adjusted to
six TOTAL shares for one Elf Aquitaine share on May 22, 2006.
This exchange guarantee expired on September 12, 2009, due to
the expiry of the Elf Aquitaine share subscription option plan No. 2
of 1999. Subsequently, no Elf Aquitaine shares are covered by the
exchange guarantee.
2005 Plan 2006 Plan 2007 Plan 2008 Plan 2009 Plan 2010 Plan 2011 Plan Total
Date of the shareholders’ meeting 05/17/2005 05/17/2005 05/17/2005 05/16/2008 05/16/2008 05/16/2008 05/13/2011
Grant date (a) 07/19/2005 07/18/2006 07/17/2007 10/09/2008 09/15/2009 09/14/2010 09/14/2011
Final grant date
(end of the vesting period) 07/20/2007 07/19/2008 07/18/2009 10/10/2010 09/16/2011 09/15/2012 09/15/2013
Transfer possible from 07/20/2009 07/19/2010 07/18/2011 10/10/2012 09/16/2013 09/15/2014 09/15/2015
Number of performance shares
Outstanding as
of January 1, 2009 - - 2,333,217 2,772,748 - - - 5,105,965
Awarded - - - - 2,972,018 - - 2,972,018
Canceled 1,928 2,922 (12,418) (9,672) (5,982) - - (23,222)
Finally granted(b)(c) (1,928) (2,922) (2,320,799) (600) - - - (2,326,249)
Outstanding as
of January 1, 2010 - - - 2,762,476 2,966,036 - - 5,728,512
Awarded - - - - - 3,010,011 - 3,010,011
Canceled(d) 1,024 3,034 552 (1,113,462) (9,796) (8,738) - (1,127,386)
Finally granted b)(c) (1,024) (3,034) (552) (1,649,014) (1,904) (636) - (1,656,164)
Outstanding as
of January 1, 2011 - - - - 2,954,336 3,000,637 - 5,954,973
Awarded - - - - - - 3,649,770 3,649,770
Canceled 800 700 792 356 (26,214) (10,750) (19,579) (53,895)
Finally granted(b)(c)(e) (800) (700) (792) (356) (2,928,122) (1,836) - (2,932,606)
Outstanding as
of December 31, 2011 - - - - - 2,988,051 3,630,191 6,618,242
(a) The grant date is the date of the Board of Directors meeting that awarded the shares, except for the shares awarded by the Board of Directors at their meeting of September 9, 2008,
and granted on October 9, 2008.
(b) Performance shares finally granted following the death of their beneficiaries.
(c) Including performance shares finally granted for which the entitlement right had been canceled erroneously.
(d) Out of the 1,113,462 canceled rights to the grant share under the 2008 Plan, 1,094,914 entitlement rights were canceled due to the performance condition. The acquisition rate for
the 2008 Plan was 60%.
(e) The acquisition rate for the 2009 Plan was 100%.
The performance shares, which are bought back by the Company
on the market, are finally granted to their beneficiaries after a 2-year
vesting period from the date of the grant. The final grant is subject
to a continued employment condition and a performance condition.
Moreover, the transfer of the performance shares finally granted will
not be permitted until the end of a 2-year mandatory holding period
from the date of the final grant.
2011 Plan
For the 2011 Plan, the Board of Directors decided that, for each
senior executives (other than the Chairman and Chief Executive
Officer), the shares will be finally granted subject to a performance
condition. This condition is based on the average ROE as published
by the Group and calculated based on the Group’s consolidated
balance sheet and statement of income for fiscal years 2011
and 2012. The acquisition rate:
– is equal to zero if the average ROE is less than or equal to 7%;
244
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
– varies on a straight-line basis between 0% and 100% if the
average ROE is greater than 7% and less than 18%; and
– is equal to 100% if the average ROE is greater than or equal
to 18%.
The Board of Directors decided also that, for each beneficiary
(other than the Chairman and Chief Executive Officer and the senior
executives) of more than 100 shares, the shares in excess of this
number will be finally granted subject to the performance condition
mentioned before.
In addition, as part of the 2011 plan, the Board of Directors decided
that the number of performance share finally granted to the
Chairman and Chief Executive Officer will be subject to two
performance conditions:
– For 50% of the share granted, the performance condition states
that the number of shares finally granted is based on the average
ROE of the Group. The average ROE is calculated by the Group
from the consolidated balance sheet and statement of income of
the Group for fiscal years 2011 and 2012. The acquisition rate is
equal to zero if the average ROE is less than or equal to 7%;
varies on a straight-line basis between 0% and 100% if the
average ROE is more than 7% and less than 18%; and is equal
to 100% if the average ROE is more than or equal to 18%.
– For 50% of the share granted, the performance condition states
that the number of shares finally granted is based on the average
ROACE of the Group. The average ROACE is calculated by the
Group from the consolidated balance sheet and statement of
income of the Group for fiscal years 2011 and 2012. The
acquisition rate is equal to zero if the average ROACE is less
than or equal to 6%; varies on a straight-line basis between 0%
and 100% if the average ROACE is more than 6% and less
than 15%; and is equal to 100% if the average ROACE is more
than or equal to 15%.
E) Global free TOTAL share plan
2010 Plan
For the 2010 Plan, the Board of Directors decided that, for each
beneficiary of more than 100 shares, half of the shares in excess of
this number will be finally granted subject to a performance
condition. This condition is based on the average ROE calculated
by the Group based on TOTAL’s consolidated balance sheet and
statement of income for fiscal years 2010 and 2011. The
acquisition rate:
– is equal to zero if the average ROE is less than or equal to 7%;
– varies on a straight-line basis between 0% and 100% if the
average ROE is greater than 7% and less than 18%; and
– is equal to 100% if the average ROE is greater than or equal to 18%.
2009 Plan
For the 2009 Plan, the Board of Directors decided that, for each
beneficiary of more than 100 shares, half of the shares in excess
of this number will be finally granted subject to a performance
condition. This condition states that the number of shares finally
granted is based on the average ROE as published by the Group
and calculated based on the Group’s consolidated balance sheet
and statement of income for fiscal years 2009 and 2010. The
acquisition rate:
– is equal to zero if the average ROE is less than or equal to 7%;
– varies on a straight-line basis between 0% and 100% if the
average ROE is greater than 7% and less than 18%; and
– is equal to 100% if the average ROE is greater than or equal
to 18%.
Due to the application of the performance condition, the acquisition
rate was 100% for the 2009 Plan.
The Board of Directors approved at its meeting on May 21, 2010 the implementation and conditions of a global free share plan intended
for the Group employees. On June 30, 2010, entitlement rights to 25 free shares were granted to every employee. The final grant is subject
to a continued employment condition during the plan’s vesting period. The shares are not subject to any performance condition. Following
the vesting period, the shares awarded will be new shares.
2010 Plan 2010 Plan Total
(2 + 2) (4 + 0)
Date of the shareholders’ meeting 05/16/2008 05/16/2008 -
Date of the award (a) 06/30/2010 06/30/2010 -
Date of the final award 07/01/2012 07/01/2014 -
Transfer authorized as from 07/01/2014 07/01/2014 -
Number of free shares
Outstanding as of January 1, 2010 - - -
Notified 1,508,850 1,070,650 2,579,500
Cancelled (125) (75) (200)
Finally granted(b) (75) - (75)
Outstanding as of January 1, 2011 1,508,650 1,070,575 2,579,225
Notified - - -
Cancelled (29,175) (54,625) (83,800)
Finally granted(b) (475) (425) (900)
Outstanding as of December 31, 2011 1,479,000 1,015,525 2,494,525
(a) The June 30, 2010, grant was decided by the Board of Directors on May 21, 2010.
(b) Final grant following the death or disability of the beneficiary of the shares.
Registration Document 2011. TOTAL
245
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
F) SunPower plans
SunPower has three stock incentive plans: the 1996 Stock Plan
(“1996 Plan”), the Second Amended and Restated 2005 SunPower
Corporation Stock Incentive Plan (“2005 Plan”) and the PowerLight
Corporation Common Stock Option and Common Stock Purchase
Plan (“PowerLight Plan”). The PowerLight Plan was assumed by
SunPower by way of the acquisition of PowerLight in fiscal 2007.
Under the terms of all three plans, SunPower may issue incentive or
non-statutory stock options or stock purchase rights to directors,
employees and consultants to purchase common stock. The 2005
Plan was adopted by SunPower’s Board of Directors in
August 2005, and was approved by shareholders in
November 2005. The 2005 Plan replaced the 1996 Plan and allows
not only for the grant of options, but also for the grant of stock
appreciation rights, restricted stock grants, restricted stock units
and other equity rights. The 2005 Plan also allows for tax
withholding obligations related to stock option exercises or
restricted stock awards to be satisfied through the retention of
shares otherwise released upon vesting. The PowerLight Plan was
adopted by PowerLight’s Board of Directors in October 2000.
In May 2008, SunPower’s stockholders approved an automatic
annual increase available for grant under the 2005 Plan, beginning
in fiscal 2009. The automatic annual increase is equal to the lower
of three percent of the outstanding shares of all classes of
SunPower’s common stock measured on the last day of the
immediately preceding fiscal quarter, 6.0 million shares, or such
The following table summarizes SunPower’s stock option activities:
other number of shares as determined by SunPower’s Board of
Directors. As of January 1, 2012, approximately 3.3 million shares
were available for grant under the 2005 Plan. No new awards are
being granted under the 1996 Plan or the PowerLight Plan.
Incentive stock options may be granted at no less than the fair
value of the common stock on the date of grant. Non-statutory
stock options and stock purchase rights may be granted at no
less than 85% of the fair value of the common stock at the date of
grant. The options and rights become exercisable when and as
determined by SunPower’s Board of Directors, although these
terms generally do not exceed ten years for stock options. Under
the 1996 and 2005 Plans, the options typically vest over five years
with a one-year cliff and monthly vesting thereafter. Under the
PowerLight Plan, the options typically vest over five years with
yearly cliff vesting. Under the 2005 Plan, the restricted stock grants
and restricted stock units typically vest in three equal installments
annually over three years.
The majority of shares issued are net of the minimum statutory
withholding requirements that SunPower pays on behalf of its
employees. During the six months ended January 1, 2012
SunPower withheld 221,262 shares to satisfy the employees’ tax
obligations. SunPower pays such withholding requirements in
cash to the appropriate taxing authorities. Shares withheld are
treated as common stock repurchases for accounting and
disclosure purposes and reduce the number of shares outstanding
upon vesting.
Outstanding Stock Options
Shares
(in thousands)
Weighted-Average
Exercise Price Per
Share
Weighted-Average
Remaining
Contractual Term
Aggregate
Intrinsic
Value
(in dollars)
(in years)
(in thousands dollars)
Outstanding as of July 3, 2011 519 25.39
Exercised (29) 3.93
Forfeited (6) 31.29
Outstanding as of January 1, 2012 484 26.62 4.71 480
Exercisable as of January 1, 2012 441 24.52 4.53 480
Expected to vest after January 1, 2012 40 48.08 6.64 -
The intrinsic value of options exercised in the six months ended January 1, 2012 was $0.3 million. There were no stock options granted in
the six months ended January 1, 2012.
The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on SunPower’s closing stock price
of $6.23 at December 30, 2011, which would have been received by the option holders had all option holders exercised their options as of
that date. The total number of in-the-money options exercisable was 0.1 million shares as of January 1, 2012.
246
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
The following table summarizes SunPower’s non-vested stock options and restricted stock activities thereafter:
Stock Options
Restricted Stock Awards and Units
Shares
(in thousands)
Weighted-Average
Exercise Price
Per Share
(in dollars)
Shares
(in thousands)
Weighted-Average
Grant Date Fair
Value Per Share
(in dollars) (a)
Outstanding as of July 3, 2011 67 41.34 7,198 16.03
Granted - - 2,336 6.91
Vested (b) (19) 28.73 (691) 18.96
Forfeited (5) 31.29 (1,473) 14.10
Outstanding as of December 31, 2011 43 48.33 7,370 13.25
(a) The Company estimates the fair value of the restricted stock unit awards as the stock price on the grant date.
(b) Restricted stock awards and units vested include shares withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements.
G) Share-based payment expense
Share-based payment expense before tax for the year 2011
amounts to €178 million and is broken down as follows:
Share-based payment expense before tax for the year 2010
amounted to €140 million and was broken down as follows:
– €31 million for TOTAL share subscription plans; and
– €27 million for TOTAL share subscription plans;
– €109 million for TOTAL restricted shares plans.
– €134 million for TOTAL restricted shares plans; and
– €17 million for SunPower plans.
Share-based payment expense before tax for the year 2009
amounted to €106 million and was broken down as follows:
– €38 million for TOTAL share subscription plans; and
– €68 million for TOTAL restricted shares plans.
The fair value of the options granted in 2011, 2010 and 2009 has been measured according to the Black-Scholes method and based on the
following assumptions:
For the year ended December 31, 2011 2010 2009
Risk free interest rate (%) (a) 2.0 2.1 2.9
Expected dividends (%) (b) 5.6 5.9 4.8
Expected volatility (%) (c) 27.5 25.0 31.0
Vesting period (years) 2 2 2
Exercice period (years) 8 8 8
Fair value of the granted options (€ per option) 4.4 5.8 8.4
(a) Zero coupon Euro swap rate at 6 years.
(b) The expected dividends are based on the price of TOTAL share derivatives traded on the markets.
(c) The expected volatility is based on the implied volatility of TOTAL share options and of share indices options traded on the markets.
At the shareholders’ meeting held on May 21, 2010, the
shareholders delegated to the Board of Directors the authority to
increase the share capital of the Company in one or more
transactions and within a maximum period of 26 months from the
date of the meeting, by an amount not exceeding 1.5% of the
share capital outstanding on the date of the meeting of the Board
of Directors at which a decision to proceed with an issuance is
made reserving subscriptions for such issuance to the Group
employees participating in a company savings plan. It is being
specified that the amount of any such capital increase reserved for
Group employees was counted against the aggregate maximum
nominal amount of share capital increases authorized by the
shareholders’ meeting held on May 21, 2010 for issuing new
ordinary shares or other securities granting immediate or future
access to the Company’s share capital with preferential
subscription rights (€2.5 billion in nominal value).
Pursuant to this delegation of authorization, the Board of Directors,
during its October 28, 2010 meeting, implemented a capital increase
reserved for employees within the limit of 12 million shares, with
dividend rights as of the January 1, 2010 and delegated all power to
the Chairman and Chief Executive Officer to determine the opening
and closing of subscription period and the subscription price.
On March 14, 2011, the Chairman and Chief Executive Officer
decided that the subscription period would be set from
March 16, 2011 to April 1, 2011 and acknowledged that the
subscription price per ordinary share would be set at €34.80.
During this capital increase, 8,902,717 TOTAL shares were
subscribed and created on April 28, 2011.
The cost of capital increases reserved for employees is reduced to
take into account the non transferability of the shares that could be
subscribed by the employees over a period of five years. The
valuation method of non transferability of the shares is based on a
strategy cost in two steps consisting, first, in a five years forward
sale of the nontransferable shares, and second, in purchasing the
Registration Document 2011. TOTAL
247
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
same number of shares in cash with a loan financing reimbursable “in fine”. During the year 2011, the main assumptions used for the
valuation of the cost of capital increase reserved for employees were the following:
For the year ended December 31, 2011
Date of the Board of Directors meeting that decided the issue October 28, 2010
Subscription price (€) 34.80
Share price at the reference date (€)(a) 41.60
Number of shares (in millions) 8.90
Risk free interest rate (%)(b) 2.82
Employees loan financing rate (%)(c) 7.23
Non transferability cost (% of the reference’s share price) 17.6
(a) Share price at the date which the Chairman and Chief Executive Officer decided the subscription period.
(b) Zero coupon Euro swap rate at 5 years.
(c) The employees loan financing rate is based on a 5 year consumer’s credit rate.
Due to the fact that the non transferability cost is higher than the discount, no cost has been accounted to the fiscal year 2011.
26) Payroll and staff
For the year ended December 31, 2011 2010 2009
Personnel expenses (M€)
Wages and salaries (including social charges) 6,579 6,246 6,177
Group employees
France
Management 11,123 10,852 10,906
Other 23,914 24,317 25,501
International
Management 15,713 15,146 15,243
Other 45,354 42,540 44,737
Total 96,104 92,855 96,387
The number of employees includes only employees of fully consolidated subsidiaries.
The increase in the number of employees between December 31, 2011 and December 31, 2010 is mainly explained by the acquisition
of SunPower, partially compensated by the sale of the photocure and coatings resins businesses (see Note 3 to the Consolidated
Financial Statements).
248
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
27) Statement of cash flows
A) Cash flow from operating activities
The following table gives additional information on cash paid or received in the cash flow from operating activities:
For the year ended December 31,
(M€) 2011 2010 2009
Interests paid (679) (470) (678)
Interests received 277 132 148
Income tax paid(a) (12,061) (8,848) (7,027)
Dividends received 2,133 1,722 1,456
(a) These amounts include taxes paid in kind under production-sharing contracts in the exploration-production.
Changes in working capital are detailed as follows:
For the year ended December 31,
(M€) 2011 2010 2009
Inventories (1,845) (1,896) (4,217)
Accounts receivable (1,287) (2,712) (344)
Other current assets (2,409) 911 1,505
Accounts payable 2,646 2,482 571
Other creditors and accrued liabilities 1,156 719 (831)
Net amount (1,739) (496) (3,316)
B) Cash flow used in financing activities
Changes in non-current financial debt are detailed in the following table under a net value due to the high number of multiple drawings:
For the year ended December 31,
(M€) 2011 2010 2009
Issuance of non-current debt 4,234 3,995 6,309
Repayment of non-current debt (165) (206) (787)
Net amount 4,069 3,789 5,522
C) Cash and cash equivalents
Cash and cash equivalents are detailed as follows:
For the year ended December 31,
(M€) 2011 2010 2009
Cash 4,715 4,679 2,448
Cash equivalents 9,310 9,810 9,214
Total 14,025 14,489 11,662
Cash equivalents are mainly composed of deposits less than three months deposited in government institutions or deposit banks selected in
accordance with strict criteria.
Registration Document 2011. TOTAL
249
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
28) Financial assets and liabilities analysis per instruments class and strategy
The financial assets and liabilities disclosed in the balance sheet are detailed as follows:
As of December 31, 2011
(M€)
Financial instruments related to financing and trading activities
Other
financial
instruments
Total
Fair
value
Amortized cost
Fair value
Assets/(Liabilities)
Available
for sale(a)
Held
for
trading
Financial
debt (b)
Hedging
of
financial
debt
Cash
flow
hedge
Net
investment
hedge
and other
Equity affiliates: loans 2,246 - - - - - - - 2,246 2,246
Other investments - 3,674 - - - - - - 3,674 3,674
Hedging instruments of
non-current financial debt - - - - 1,971 5 - - 1,976 1,976
Other non-current assets 2,055 - - - - - - 2,055 2,055
Accounts receivable, net - - - - - - - 20,049 20,049 20,049
Other operating receivables - - 1,074 - - - - 6,393 7,467 7,467
Current financial assets 146 - 159 - 383 12 - - 700 700
Cash and cash equivalents - - - - - - - 14,025 14,025 14,025
Total financial assets 4,447 3,674 1,233 - 2,354 17 - 40,467 52,192 52,192
Total non-financial assets - - - - - - - - 111,857 -
Total assets - - - - - - - - 164,049 -
Non-current financial debt (4,858) - - (17,551) (97) (49) - (2) (22,557) (23,247)
Accounts payable - - - - - - - (22,086) (22,086) (22,086)
Other operating liabilities - - (606) - - - - (4,835) (5,441) (5,441)
Current borrowings (6,158) - - (3,517) - - (9,675) (9,675)
Other current financial liabilities - - (87) - (40) (14) (26) - (167) (167)
Total financial liabilities (11,016) - (693) (21,068) (137) (63) (26) (26,923) (59,926) (60,616)
Total non-financial liabilities - - - - - - - - (104,123) -
Total liabilities - - - - - - - - (164,049) -
(a) Financial assets available for sale are measured at their fair value except for unlisted securities (see Note 1 paragraph M(ii) and Note 13 to the Consolidated Financial Statements).
(b) The financial debt is adjusted to the hedged risks value (currency and interest rate) as part of hedge accounting (see Note 1 paragraph M(iii) to the Consolidated Financial Statements).
250
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
As of December 31, 2010
(M€)
Financial instruments related to financing and trading activities
Other
financial
instruments
Total
Fair
value
Amortized cost
Fair value
Assets/(Liabilities)
Available
for sale(a)
Held
for
trading
Financial
debt (b)
Hedging
of
financial
debt
Cash
flow
hedge
Net
investment
hedge
and other
Equity affiliates: loans 2,383 - - - - - - - 2,383 2,383
Other investments - 4,590 - - - - - - 4,590 4,590
Hedging instruments of
non-current financial debt - - - - 1,814 56 - - 1,870 1,870
Other non-current assets 1,596 - - - - - - - 1,596 1,596
Accounts receivable, net - - - - - - - 18,159 18,159 18,159
Other operating receivables - - 499 - - - - 3,908 4,407 4,407
Current financial assets 869 - 38 - 292 - 6 - 1,205 1,205
Cash and cash equivalents - - - - - - - 14,489 14,489 14,489
Total financial assets 4,848 4,590 537 - 2,106 56 6 36,556 48,699 48,699
Total non-financial assets - - - - - - - - 95,019 -
Total assets - - - - - - - - 143,718 -
Non-current financial debt (3,186) - - (17,419) (178) - - - (20,783) (21,172)
Accounts payable - - - - - - - (18,450) (18,450) (18,450)
Other operating liabilities - - (559) - - - - (3,015) (3,574) (3,574)
Current borrowings (5,916) - - (3,737) - - - - (9,653) (9,653)
Other current financial liabilities - - (147) - (12) - - - (159) (159)
Total financial liabilities (9,102) - (706) (21,156) (190) - - (21,465) (52,619) (53,008)
Total non-financial liabilities - - - - - - - - (91,099) -
Total liabilities - - - - - - - - (143,718) -
(a) Financial assets available for sale are measured at their fair value except for unlisted securities (see Note 1 paragraph M(ii) and Note 13 to the Consolidated Financial Statements).
(b) The financial debt is adjusted to the hedged risks value (currency and interest rate) as part of hedge accounting (see Note 1 paragraph M(iii) to the Consolidated Financial Statements).
Registration Document 2011. TOTAL
251
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
As of December 31, 2009
(M€)
Financial instruments related to financing and trading activities
Other
financial
instruments
Total
Fair
value
Amortized cost
Fair value
Assets/(Liabilities)
Available
for sale(a)
Held
for
trading
Financial
debt (b)
Hedging
of
financial
debt
Cash
flow
hedge
Net
investment
hedge
and other
Equity affiliates: loans 2,367 - - - - - - - 2,367 2,367
Other investments - 1,162 - - - - - - 1,162 1,162
Hedging instruments of
non-current financial debt - - - - 889 136 - - 1,025 1,025
Other non-current assets 1,284 - - - - - - - 1,284 1,284
Accounts receivable, net - - - - - - - 15,719 15,719 15,719
Other operating receivables - - 1,029 - - - - 4,116 5,145 5,145
Current financial assets 55 - 53 - 197 - 6 - 311 311
Cash and cash equivalents - - - - - - - 11,662 11,662 11,662
Total financial assets 3,706 1,162 1,082 - 1,086 136 6 31,497 38,675 38,675
Total non-financial assets - - - - - - - - 89,078 -
Total assets - - - - - - - - 127,753 -
Non-current financial debt (2,089) - - (17,107) (241) - - - (19,437) (19,905)
Accounts payable - - - - - - - (15,383) (15,383) (15,383)
Other operating liabilities - - (923) - - - - (3,783) (4,706) (4,706)
Current borrowings (4,849) - - (2,145) - - - - (6,994) (6,994)
Other current financial liabilities - - (25) - (97) - (1) - (123) (123)
Total financial liabilities (6,938) - (948) (19,252) (338) - (1) (19,166) (46,643) (47,111)
Total non-financial liabilities - - - - - - - - (81,110) -
Total liabilities - - - - - - - - (127,753) -
(a) Financial assets available for sale are measured at their fair value except for unlisted securities (see Note 1 paragraph M(ii) and Note 13 to the Consolidated Financial Statements).
(b) The financial debt is adjusted to the hedged risks value (currency and interest rate) as part of hedge accounting (see Note 1 paragraph M(iii) to the Consolidated Financial Statements).
29) Fair value of financial instruments (excluding commodity contracts)
A) Impact on the statement of income per nature of financial instruments
Operating assets and liabilities
The impact on the statement of income is detailed as follows:
For the year ended December 31,
(M€) 2011 2010 2009
Assets available for sale (investments):
– dividend income on non-consolidated subsidiaries 330 255 210
– gains (losses) on disposal of assets 103 60 6
– other (29) (17) (18)
Loans and receivables (34) 90 41
Impact on net operating income 370 388 239
The impact in the statement of income mainly includes:
– Dividends and gains or losses on disposal of other investments classified as “Other investments”;
– Financial gains and depreciation on loans related to equity affiliates, non-consolidated companies and on receivables reported in “Loans
and receivables”.
252
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
Assets and liabilities from financing activities
The impact on the statement of income of financing assets and liabilities is detailed as follows:
For the year ended December 31,
(M€) 2011 2010 2009
Loans and receivables 271 133 158
Financing liabilities and associated hedging instruments (730) (469) (563)
Fair value hedge (ineffective portion) 17 4 33
Assets and liabilities held for trading 2 (2) (26)
Impact on the cost of net debt (440) (334) (398)
The impact on the statement of income mainly includes:
– Financial income on cash, cash equivalents, and current financial
assets (notably current deposits beyond three months) classified
as “Loans and receivables”;
– Financial expense of long term subsidiaries financing, associated
hedging instruments (excluding ineffective portion of the hedge
detailed below) and financial expense of short term financing
classified as “Financing liabilities and associated hedging
instruments”;
– Ineffective portion of bond hedging; and
– Financial income, financial expense and fair value of derivative
instruments used for cash management purposes classified
as “Assets and liabilities held for trading”.
Financial derivative instruments used for cash management
purposes (interest rate and foreign exchange) are considered
to be held for trading. Based on practical documentation issues,
the Group did not elect to set up hedge accounting for such
instruments. The impact on income of the derivatives is offset
by the impact of loans and current liabilities they are related to.
Therefore these transactions taken as a whole do not have a
significant impact on the Consolidated Financial Statements.
B) Impact of the hedging strategies
Fair value hedge
The impact on the statement of income of the bond hedging instruments which is recorded in the item “Financial interest on debt”
in the Consolidated Statement of Income is detailed as follows:
For the year ended December 31,
(M€) 2011 2010 2009
Revaluation at market value of bonds (301) (1,164) (183)
Swap hedging of bonds 318 1,168 216
Ineffective portion of the fair value hedge 17 4 33
The ineffective portion is not representative of the Group’s performance considering the Group’s objective to hold swaps to maturity. The current
portion of the swaps valuation is not subject to active management.
Net investment hedge
These instruments are recorded directly in shareholders’ equity under “Currency translation adjustments”. The variations of the period are
detailed in the table below:
For the year ended December 31,
(M€)
As of
January 1,
Variations
Disposals
As of
December 31,
2011 (243) 139 - (104)
2010 25 (268) - (243)
2009 124 (99) - 25
As of December 31, 2011, the fair value of the open instruments amounts to €(26) million compared to €6 million in 2010 and €5 million
in 2009.
Registration Document 2011. TOTAL
253
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
Cash flow hedge
The impact on the statement of income and on equity of the hedging instruments qualified as cash flow hedges is detailed as follows:
For the year ended December 31,
(M€) 2011 2010 2009
Profit (Loss) recorded in equity during the period (84) (80) 128
Recycled amount from equity to the income statement during the period (47) (115) 221
As of December 31, 2011, 2010 and 2009, the ineffective portion of these financial instruments is equal to zero.
C) Maturity of derivative instruments
The maturity of the notional amounts of derivative instruments, excluding the commodity contracts, is detailed in the following table:
As of December 31, 2011
(M€)
Assets/(Liabilities)
Fair value
Notional value(a)
Total
2012
2013
2014
2015
2016
2017
and after
Fair value hedge
Swaps hedging fixed-rates bonds (liabilities) (97) 1,478 - - - - - -
Swaps hedging fixed-rates bonds (assets) 1,971 15,653 - - - - - -
Total swaps hedging fixed-rates bonds
(assets and liabilities) 1,874 17,131 - 4,204 4,215 3,380 1,661 3,671
Swaps hedging fixed-rates bonds (current portion) (liabilities) (40) 642 - - - - - -
Swaps hedging fixed-rates bonds (current portion) (assets) 383 2,349 - - - - - -
Total swaps hedging fixed-rates bonds
(current portion) (assets and liabilities) 343 2,991 2,991 - - - - -
Cash flow hedge
Swaps hedging fixed-rates bonds (liabilities) (49) 967 - - - - - -
Swaps hedging fixed-rates bonds (assets) 5 749 - - - - - -
Total swaps hedging fixed-rates bonds
(assets and liabilities) (44) 1,716 - - - - - 1,716
Swaps hedging fixed-rates bonds (current portion) (liabilities) (14) 582 - - - - - -
Swaps hedging fixed-rates bonds (current portion) (assets) 12 908 - - - - - -
Total swaps hedging fixed-rates bonds
(current portion) (assets and liabilities) (2) 1,490 1,490 - - - - -
Net investment hedge
Currency swaps and forward exchange contracts (assets) - - - - - - - -
Currency swaps and forward exchange contracts (liabilities) (26) 881 - - - - - -
Total swaps hedging net investments (26) 881 881 - - - - -
Held for trading
Other interest rate swaps (assets) 1 3,605 - - - - - -
Other interest rate swaps (liabilities) (2) 14,679 - - - - - -
Total other interest rate swaps (assets and liabilities) (1) 18,284 18,284 - - - - -
Currency swaps and forward exchange contracts (assets) 158 6,984 - - - - - -
Currency swaps and forward exchange contracts (liabilities) (85) 4,453 - - - - - -
Total currency swaps and forward exchange contracts
(assets and liabilities) 73 11,437 11,176 80 58 36 31 56
(a) These amounts set the levels of notional commitment and are not indicative of a contingent gain or loss.
254
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
As of December 31, 2010
(M€)
Assets/(Liabilities)
Fair value
Notional value(a)
Total
2011
2012
2013
2014
2015
2016
and after
Fair value hedge
Swaps hedging fixed-rates bonds (liabilities) (178) 2,244 - - - - - -
Swaps hedging fixed-rates bonds (assets) 1,814 13,939 - - - - - -
Total swaps hedging fixed-rates bonds
(assets and liabilities) 1,636 16,183 - 2,967 3,461 2,421 3,328 4,006
Swaps hedging fixed-rates bonds (current portion) (liabilities) (12) 592 - - - - - -
Swaps hedging fixed-rates bonds (current portion) (assets) 292 2,815 - - - - - -
Total swaps hedging fixed-rates bonds
(current portion) (assets and liabilities) 280 3,407 3,407 - - - - -
Cash flow hedge
Swaps hedging fixed-rates bonds (liabilities) - - - - - - - -
Swaps hedging fixed-rates bonds (assets) 56 1,957 - - - - - -
Total swaps hedging fixed-rates bonds
(assets and liabilities) 56 1,957 - 295 - - - 1,662
Swaps hedging fixed-rates bonds (current portion) (liabilities) - - - - - - - -
Swaps hedging fixed-rates bonds (current portion) (assets) - - - - - - - -
Total swaps hedging fixed-rates bonds (current portion)
(assets and liabilities) - - - - - - - -
Net investment hedge
Currency swaps and forward exchange contracts (assets) 6 381 - - - - - -
Currency swaps and forward exchange contracts (liabilities) - - - - - - - -
Total swaps hedging net investments 6 381 381 - - - - -
Held for trading
Other interest rate swaps (assets) 1 6,463 - - - - - -
Other interest rate swaps (liabilities) (3) 11,395 - - - - - -
Total other interest rate swaps (assets and liabilities) (2) 17,858 17,667 189 - - 2 -
Currency swaps and forward exchange contracts (assets) 37 1,532 - - - - - -
Currency swaps and forward exchange contracts (liabilities) (144) 6,757 - - - - - -
Total currency swaps and forward exchange contracts
(assets and liabilities) (107) 8,289 8,102 - 25 49 31 82
(a) These amounts set the levels of notional commitment and are not indicative of a contingent gain or loss.
Registration Document 2011. TOTAL
255
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
As of December 31, 2009
(M€)
Assets/(Liabilities)
Fair value
Notional value(a)
Total
2010
2011
2012
2013
2014
2015
and after
Fair value hedge
Swaps hedging fixed-rates bonds (liabilities) (241) 4,615 - - - - - -
Swaps hedging fixed-rates bonds (assets) 889 11,076 - - - - - -
Total swaps hedging fixed-rates bonds
(assets and liabilities) 648 15,691 - 3,345 2,914 3,450 1,884 4,098
Swaps hedging fixed-rates bonds (current portion) (liabilities) (97) 912 - - - - - -
Swaps hedging fixed-rates bonds (current portion) (assets) 197 1,084 - - - - - -
Total swaps hedging fixed-rates bonds (current portion)
(assets and liabilities) 100 1,996 1,996 - - - - -
Cash flow hedge
Swaps hedging fixed-rates bonds (liabilities) - - - - - - - -
Swaps hedging fixed-rates bonds (assets) 136 1,837 - - 295 - - 1,542
Total swaps hedging fixed-rates bonds
(assets and liabilities) 136 1,837 - - 295 - - 1,542
Swaps hedging fixed-rates bonds (current portion) (liabilities) - - - - - - - -
Swaps hedging fixed-rates bonds (current portion) (assets) - - - - - - - -
Total swaps hedging fixed-rates bonds (current portion)
(assets and liabilities) - - - - - - - -
Net investment hedge
Currency swaps and forward exchange contracts (assets) 6 701 - - - - - -
Currency swaps and forward exchange contracts (liabilities) (1) 224 - - - - - -
Total swaps hedging net investments 5 925 925 - - - - -
Held for trading
Other interest rate swaps (assets) - 1,459 - - - - - -
Other interest rate swaps (liabilities) (1) 10,865 - - - - - -
Total other interest rate swaps (assets and liabilities) (1) 12,324 12,208 114 2
Currency swaps and forward exchange contracts (assets) 53 4,017 - - - - - -
Currency swaps and forward exchange contracts (liabilities) (24) 3,456 - - - - - -
Total currency swaps and forward exchange contracts
(assets and liabilities) 29 7,473 7,224 - 52 50 47 100
(a) These amounts set the levels of notional commitment and are not indicative of a contingent gain or loss.
256
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
D) Fair value hierarchy
The fair value hierarchy for financial instruments excluding commodity contracts is as follows:
As of December 31, 2011
(M€)
Quoted prices
in active markets
for identical
assets
(level 1)
Prices based
on observable
data
(level 2)
Prices based
on non
observable
data
(level 3)
Total
Fair value hedge instruments - 2,217 - 2,217
Cash flow hedge instruments - (46) - (46)
Net investment hedge instruments - (26) - (26)
Assets and liablities held for trading - 72 - 72
Assets available for sale 2,575 - - 2,575
Total 2,575 2,217 - 4,792
As of December 31, 2010
(M€)
Quoted prices
in active markets
for identical
assets
(level 1)
Prices based
on observable
data
(level 2)
Prices based
on non
observable
data
(level 3)
Total
Fair value hedge instruments - 1,916 - 1,916
Cash flow hedge instruments - 56 - 56
Net investment hedge instruments - 6 - 6
Assets and liablities held for trading - (109) - (109)
Assets available for sale 3,631 - - 3,631
Total 3,631 1,869 - 5,500
As of December 31, 2009
(M€)
Quoted prices
in active markets
for identical
assets
(level 1)
Prices based
on observable
data
(level 2)
Prices based
on non
observable
data
(level 3)
Total
Fair value hedge instruments - 748 - 748
Cash flow hedge instruments - 136 - 136
Net investment hedge instruments - 5 - 5
Assets and liablities held for trading - 28 - 28
Assets available for sale 232 - - 232
Total 232 917 - 1,149
The description of each fair value level is presented in Note 1 paragraph M(v) to the Consolidated Financial Statements.
Registration Document 2011. TOTAL
257
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
30) Financial instruments related to commodity contracts
Financial instruments related to oil, gas and power activities as well as related currency derivatives are recorded at fair value under “Other
current assets” or “Other creditors and accrued liabilities” depending on whether they are assets or liabilities.
As of December 31, 2011
(M€)
Assets/(Liabilities) Carrying amount Fair value(b)
Crude oil, petroleum products and freight rates activities
Petroleum products and crude oil swaps 3 3
Freight rate swaps - -
Forwards(a) (16) (16)
Options (4) (4)
Futures (14) (14)
Options on futures (6) (6)
Total crude oil, petroleum products and freight rates (37) (37)
Gas & Power activities
Swaps 57 57
Forwards(a) 452 452
Options (3) (3)
Futures - -
Total Gas & Power 506 506
Total 469 469
Total of fair value non recognized in the balance sheet -
(a) Forwards: contracts resulting in physical delivery are accounted for as derivative commodity contracts and included in the amounts shown.
(b) When the fair value of derivatives listed on an organized exchange market (futures, options on futures and swaps) is offset with the margin call received or paid in the balance sheet,
this fair value is set to zero.
As of December 31, 2010
(M€)
Assets/(Liabilities) Carrying amount Fair value(b)
Crude oil, petroleum products and freight rates activities
Petroleum products and crude oil swaps (2) (2)
Freight rate swaps - -
Forwards(a) 5 5
Options 51 51
Futures (12) (12)
Options on futures (4) (4)
Total crude oil, petroleum products and freight rates 38 38
Gas & Power activities
Swaps (1) (1)
Forwards(a) (102) (102)
Options 5 5
Futures - -
Total Gas & Power (98) (98)
Total (60) (60)
Total of fair value non recognized in the balance sheet -
(a) Forwards: contracts resulting in physical delivery are accounted for as derivative commodity contracts and included in the amounts shown.
(b) When the fair value of derivatives listed on an organized exchange market (futures, options on futures and swaps) is offset with the margin call received or paid in the balance sheet,
this fair value is set to zero.
258
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
As of December 31, 2009
(M€)
Assets/(Liabilities) Carrying amount Fair value(b)
Crude oil, petroleum products and freight rates activities
Petroleum products and crude oil swaps (29) (29)
Freight rate swaps - -
Forwards(a) (9) (9)
Options 21 21
Futures (17) (17)
Options on futures 6 6
Total crude oil, petroleum products and freight rates (28) (28)
Gas & Power activities
Swaps 52 52
Forwards(a) 78 78
Options 4 4
Futures - -
Total Gas & Power 134 134
Total 106 106
Total of fair value non recognized in the balance sheet -
(a) Forwards: contracts resulting in physical delivery are accounted for as derivative commodity contracts and included in the amounts shown.
(b) When the fair value of derivatives listed on an organized exchange market (futures, options on futures and swaps) is offset with the margin call received or paid in the balance sheet, this
fair value is set to zero.
Most commitments on crude oil and refined products have a short term maturity (less than one year). The maturity of most Gas & Power
energy derivatives is less than three years forward.
The changes in fair value of financial instruments related to commodity contracts are detailed as follows:
For the year ended December 31,
(M€)
Fair value
as of January 1,
Impact on
income
Settled
contracts
Other Fair value as of
December 31,
Crude oil, petroleum products and freight rates activities
2011 38 1,572 (1,648) 1 (37)
2010 (28) 1,556 (1,488) (2) 38
2009 39 1,713 (1,779) (1) (28)
Gas & Power activities
2011 (98) 899 (295) 0 506
2010 134 410 (648) 6 (98)
2009 592 327 (824) 39 134
Registration Document 2011. TOTAL
259
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The fair value hierarchy for financial instruments related to commodity contracts is as follows:
As of December 31, 2011
(M€)
Quoted prices
in active markets
for identical
assets
(level 1)
Prices based
on observable
data
(level 2)
Prices based
on non
observable
data
(level 3)
Total
Crude oil, petroleum products and freight rates activities (38) 1 - (37)
Gas & Power activities (44) 550 - 506
Total (82) 551 - 469
As of December 31, 2010
(M€)
Quoted prices
in active markets
for identical
assets
(level 1)
Prices based
on observable
data
(level 2)
Prices based
on non
observable
data
(level 3)
Total
Crude oil, petroleum products and freight rates activities (10) 48 - 38
Gas & Power activities 50 (148) - (98)
Total 40 (100) - (60)
As of December 31, 2009
(M€)
Quoted prices
in active markets
for identical
assets
(level 1)
Prices based
on observable
data
(level 2)
Prices based
on non
observable
data
(level 3)
Total
Crude oil, petroleum products and freight rates activities (45) 17 - (28)
Gas & Power activities 140 (6) - 134
Total 95 11 - 106
The description of each fair value level is presented in Note 1 paragraph M(v) to the Consolidated Financial Statements.
31) Financial risks management
Oil and gas market related risks
Due to the nature of its business, the Group has significant oil and
gas trading activities as part of its day-to-day operations in order
to optimize revenues from its oil and gas production and to obtain
favorable pricing to supply its refineries.
In its international oil trading business, the Group follows a policy
of not selling its future production. However, in connection with this
trading business, the Group, like most other oil companies, uses
energy derivative instruments to adjust its exposure to price
fluctuations of crude oil, refined products, natural gas, power and
coal. The Group also uses freight rate derivative contracts in its
shipping business to adjust its exposure to freight-rate fluctuations.
To hedge against this risk, the Group uses various instruments such
as futures, forwards, swaps and options on organised markets or
over-the-counter markets. The list of the different derivatives held
by the Group in these markets is detailed in Note 30 to the
Consolidated Financial Statements.
The Trading & Shipping division measures its market risk exposure,
i.e. potential loss in fair values, on its crude oil, refined products
and freight rates trading activities using a value-at-risk technique.
This technique is based on an historical model and makes an
assessment of the market risk arising from possible future changes
in market values over a 24-hour period. The calculation of the range
of potential changes in fair values takes into account a snapshot
of the end-of-day exposures and the set of historical price
movements for the last 400 business days for all instruments
and maturities in the global trading activities. Options are
systematically reevaluated using appropriate models.
The potential movement in fair values corresponds to a 97.5%
value-at-risk type confidence level. This means that the Group’s
portfolio result is likely to exceed the value-at-risk loss measure
once over 40 business days if the portfolio exposures were left
unchanged.
Trading & Shipping: value-at-risk with a 97.5% probability
As of December 31,
(M€) High Low Average Year end
2011 10.6 3.7 6.1 6.3
2010 23.1 3.4 8.9 3.8
2009 18.8 5.8 10.2 7.6
260
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
As part of its gas, power and coal trading activity, the Group also
uses derivative instruments such as futures, forwards, swaps and
options in both organised and over-the-counter markets. In general,
the transactions are settled at maturity date through physical
delivery. The Gas & Power division measures its market risk
exposure, i.e. potential loss in fair values, on its trading business
using a value-at-risk technique. This technique is based on an
historical model and makes an assessment of the market risk
arising from possible future changes in market values over a one-
day period. The calculation of the range of potential changes in fair
values takes into account a snapshot of the end-of-day exposures
and the set of historical price movements for the past two years for
all instruments and maturities in the global trading business.
Gas & Power trading: value-at-risk with a 97.5% probability
As of December 31,
(M€) High Low Average Year end
2011 21.0 12.7 16.0 17.6
2010 13.9 2.7 6.8 10.0
2009 9.8 1.9 5.0 4.8
The Group has implemented strict policies and procedures to manage
and monitor these market risks. These are based on the separation
of control and front-office functions and on an integrated information
system that enables real-time monitoring of trading activities.
Limits on trading positions are approved by the Group’s Executive
Committee and are monitored daily. To increase flexibility and
encourage liquidity, hedging operations are performed with
numerous independent operators, including other oil companies,
major energy producers or consumers and financial institutions.
The Group has established counterparty limits and monitors
outstanding amounts with each counterparty on an ongoing basis.
Financial markets related risks
As part of its financing and cash management activities, the Group
uses derivative instruments to manage its exposure to changes in
interest rates and foreign exchange rates. These instruments are
principally interest rate and currency swaps. The Group may also
use, on a less frequent basis, futures and options contracts.
These operations and their accounting treatment are detailed
in Notes 1 paragraph M, 20, 28 and 29 to the Consolidated
Financial Statements.
Risks relative to cash management operations and to interest rate
and foreign exchange financial instruments are managed according
to rules set by the Group’s senior management, which provide for
regular pooling of available cash balances, open positions and
management of the financial instruments by the Treasury
Department. Excess cash of the Group is deposited mainly in
government institutions, deposit banks, or major companies
through deposits, reverse repurchase agreements and purchase
of commercial paper. Liquidity positions and the management of
financial instruments are centralized by the Treasury Department,
where they are managed by a team specialized in foreign exchange
and interest rate market transactions.
The Cash Monitoring-Management Unit within the Treasury
Department monitors limits and positions per bank on a daily
basis and results of the Front Office. This unit also prepares
marked-to-market valuations of used financial instruments and,
when necessary, performs sensitivity analysis.
Counterparty risk
The Group has established standards for market transactions
under which bank counterparties must be approved in advance,
based on an assessment of the counterparty’s financial soundness
(multi-criteria analysis including a review of market prices and
of the Credit Default Swap (CDS), its ratings with Standard
& Poor’s and Moody’s, which must be of high quality, and its
overall financial condition).
An overall authorized credit limit is set for each bank and is allotted
among the subsidiaries and the Group’s central treasury entities
according to their needs.
To reduce the market values risk on its commitments, in particular
for swaps set as part of bonds issuance, the Treasury Department
also developed a system of margin call that is gradually
implemented with significant counterparties.
Currency exposure
The Group seeks to minimize the currency exposure of each entity
to its functional currency (primarily the euro, the dollar, the
Canadian dollar, the pound sterling and the Norwegian krone).
For currency exposure generated by commercial activity, the
hedging of revenues and costs in foreign currencies is typically
performed using currency operations on the spot market and,
in some cases, on the forward market. The Group rarely hedges
future cash flows, although it may use options to do so.
With respect to currency exposure linked to non-current assets
booked in a currency other than the euro, the Group has a policy
of reducing the related currency exposure by financing these assets
in the same currency.
Net short-term currency exposure is periodically monitored against
limits set by the Group’s senior management.
The non-current debt described in Note 20 to the Consolidated
Financial Statements is generally raised by the corporate treasury
entities either directly in dollars, in euros or in Canadian dollars,
or in other currencies which are then exchanged for dollars or euros
through swaps issues to appropriately match general corporate
needs. The proceeds from these debt issuances are loaned to
affiliates whose accounts are kept in dollars, in Canadian dollars
or in euros. Thus, the net sensitivity of these positions to currency
exposure is not significant.
Registration Document 2011. TOTAL
261
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The Group’s short-term currency swaps, the notional value of which
appears in Note 29 to the Consolidated Financial Statements, are
used to attempt to optimize the centralized cash management of
the Group. Thus, the sensitivity to currency fluctuations which may
be induced is likewise considered negligible.
Short-term interest rate exposure and cash
Cash balances, which are primarily composed of euros and dollars,
are managed according to the guidelines established by the
Group’s senior management (maintain an adequate level of liquidity,
optimize revenue from investments considering existing interest rate
yield curves, and minimize the cost of borrowing) over a less than
twelve-month horizon and on the basis of a daily interest rate
benchmark, primarily through short-term interest rate swaps and
short-term currency swaps, without modifying currency exposure.
Interest rate risk on non-current debt
The Group’s policy consists of incurring non-current debt primarily at
a floating rate, or, if the opportunity arises at the time of an issuance,
at a fixed rate. Debt is incurred in dollars, in euros or in Canadian
dollars according to general corporate needs. Long-term interest
rate and currency swaps may be used to hedge bonds at their
issuance in order to create a variable or fixed rate synthetic debt. In
order to partially modify the interest rate structure of the long-term
debt, TOTAL may also enter into long-term interest rate swaps.
Sensitivity analysis on interest rate and foreign exchange risk
The tables below present the potential impact of an increase or decrease of 10 basis points on the interest rate yield curves for each of the
currencies on the fair value of the current financial instruments as of December 31, 2011, 2010 and 2009.
Assets/(Liabilities)
(M€)
As of December 31, 2011
Change in fair value
due to a change
in interest rate by:
Carrying
amount
Estimated
fair value
+10 basis
points
-10 basis
points
Bonds (non-current portion, before swaps) (21,402) (22,092) 83 (83)
Swaps hedging fixed-rates bonds (liabilities) (146) (146) - -
Swaps hedging fixed-rates bonds (assets) 1,976 1,976 - -
Total swaps hedging fixed-rates bonds (assets and liabilities) 1,830 1,830 (49) 49
Current portion of non-current debt after swap (excluding capital lease obligations) 3,488 3,488 3 (3)
Other interest rates swaps (1) (1) 3 (3)
Currency swaps and forward exchange contracts 47 47 - -
As of December 31, 2010
Bonds (non-current portion, before swaps) (20,019) (20,408) 86 (84)
Swaps hedging fixed-rates bonds (liabilities) (178) (178) - -
Swaps hedging fixed-rates bonds (assets) 1,870 1,870 - -
Total swaps hedging fixed-rates bonds (assets and liabilities) 1,692 1,692 (59) 59
Current portion of non-current debt after swap (excluding capital lease obligations) 3,483 3,483 4 (4)
Other interest rates swaps (2) (2) 3 (3)
Currency swaps and forward exchange contracts (101) (101) - -
As of December 31, 2009
Bonds (non-current portion, before swaps) (18,368) (18,836) 75 (75)
Swaps hedging fixed-rates bonds (liabilities) (241) (241) - -
Swaps hedging fixed-rates bonds (assets) 1,025 1,025 - -
Total swaps hedging fixed-rates bonds (assets and liabilities) 784 784 (57) 57
Current portion of non-current debt after swap (excluding capital lease obligations) (2,111) (2,111) 3 (3)
Other interest rates swaps (1) (1) 1 (1)
Currency swaps and forward exchange contracts 34 34 - -
The impact of changes in interest rates on the cost of net debt before tax is as follows:
For the year ended December 31,
(M€) 2011 2010 2009
Cost of net debt (440) (334) (398)
Interest rate translation of:
+10 basis points (10) (11) (11)
-10 basis points 10 11 11
+100 basis points (103) (107) (108)
-100 basis points 103 107 108
As a result of the policy for the management of currency exposure previously described, the Group’s sensitivity to currency exposure is
primarily influenced by the net equity of the subsidiaries whose functional currency is the dollar and, to a lesser extent, the pound sterling,
the Norwegian krone and the Canadian dollar.
262
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
This sensitivity is reflected in the historical evolution of the currency translation adjustment recorded in the statement of changes in
shareholders’ equity which, in the course of the last three fiscal years, is essentially related to the fluctuation of dollar and pound sterling and
is set forth in the table below:
Euro/Dollar Euro/Pound sterling
exchange rates exchange rates
As of December 31, 2011 1.29 0.84
As of December 31, 2010 1.34 0.86
As of December 31, 2009 1.44 0.89
As of December 31, 2011 Total Euro Dollar Pound Other currencies
(M€) sterling and equity affiliates
Shareholders’ equity at historical exchange rate 69,025 41,396 21,728 4,713 1,188
Currency translation adjustment
before net investment hedge (962) 127 (923) (166)
Net investment hedge - open instruments (26) (25) (1) -
Shareholders’ equity at exchange rate
as of December 31, 2011 68,037 41,396 21,830 3,789 1,022
As of December 31, 2010 Total Euro Dollar Pound Other currencies
(M€) sterling and equity affiliates(a)
Shareholders’ equity at historical exchange rate 62,909 32,894 22,242 4,997 2,776
Currency translation adjustment
before net investment hedge (2,501) - (1,237) (1,274) 10
Net investment hedge - open instruments 6 - 6 - -
Shareholders’ equity at exchange rate
as of December 31, 2010 60,414 32,894 21,011 3,723 2,786
As of December 31, 2009 Total Euro Dollar Pound Other currencies
(M€) sterling and equity affiliates
Shareholders’ equity at historical exchange rate 57,621 27,717 18,671 5,201 6,032
Currency translation adjustment
before net investment hedge (5,074) - (3,027) (1,465) (582)
Net investment hedge - open instruments 5 - 6 (1) -
Shareholders’ equity at exchange rate
as of December 31, 2009 52,552 27,717 15,650 3,735 5,450
(a) The decrease in the heading "Other currencies and equity affiliates" is mainly explained by the change in the consolidation method of Sanofi (see Note 3 to the Consolidated Financial
Statements). The contribution to the shareholders’ equity of this investment is now reclassified into the heading for the Eurozone.
As a result of this policy, the impact of currency exchange rate
fluctuations on consolidated income, as illustrated in Note 7 to the
Consolidated Financial Statements, has not been significant over
the last three years despite the considerable fluctuation of the dollar
(gain of €118 million in 2011, nil result in 2010, loss of €32 million
in 2009).
Stock market risk
The Group holds interests in a number of publicly-traded
companies (see Notes 12 and 13 to the Consolidated Financial
Statements). The market value of these holdings fluctuates due to
various factors, including stock market trends, valuations of the
sectors in which the companies operate, and the economic and
financial condition of each individual company.
Liquidity risk
TOTAL S.A. has confirmed lines of credit granted by international
banks, which are calculated to allow it to manage its short-term
liquidity needs as required.
As of December 31, 2011, these lines of credit amounted
to $10,139 million, of which $10,096 million was unused. The
agreements for the lines of credit granted to TOTAL S.A. do not
contain conditions related to the Company’s financial ratios, to its
financial ratings from specialized agencies, or to the occurrence of
events that could have a material adverse effect on its financial
position. As of December 31, 2011, the aggregate amount of the
principal confirmed lines of credit granted by international banks to
Group companies, including TOTAL S.A., was $11,447 million, of
which $11,154 million was unused. The lines of credit granted to
Group companies other than TOTAL S.A. are not intended to finance
the Group’s general needs; they are intended to finance either the
general needs of the borrowing subsidiary or a specific project.
Registration Document 2011. TOTAL
263
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
The following tables show the maturity of the financial assets and liabilities of the Group as of December 31, 2011, 2010 and 2009
(see Note 20 to the Consolidated Financial Statements).
As of December 31, 2011
Assets/(Liabilities) Less than 1-2 years 2-3 years 3-4 years 4-5 years More than Total
(M€) one year 5 years
Non-current financial debt
(notional value excluding interests) - (4,492) (3,630) (3,614) (1,519) (7,326) (20,581)
Current borrowings (9,675) - - - - - (9,675)
Other current financial liabilities (167) - - - - - (167)
Current financial assets 700 - - - - - 700
Cash and cash equivalents 14,025 - - - - - 14,025
Net amount before financial expense 4,883 (4,492) (3,630) (3,614) (1,519) (7,326) (15,698)
Financial expense on non-current financial debt (785) (691) (521) (417) (302) (1,075) (3,791)
Interest differential on swaps 320 331 221 120 55 44 1,091
Net amount 4,418 (4,852) (3,930) (3,911) (1,766) (8,357) (18,398)
As of December 31, 2010
Assets/(Liabilities) Less than 1-2 years 2-3 years 3-4 years 4-5 years More than Total
(M€) one year 5 years
Non-current financial debt
(notional value excluding interests) - (3,355) (3,544) (2,218) (3,404) (6,392) (18,913)
Current borrowings (9,653) - - - - - (9,653)
Other current financial liabilities (159) - - - - - (159)
Current financial assets 1,205 - - - - - 1,205
Cash and cash equivalents 14,489 - - - - - 14,489
Net amount before financial expense 5,882 (3,355) (3,544) (2,218) (3,404) (6,392) (13,031)
Financial expense on non-current financial debt (843) (729) (605) (450) (358) (1,195) (4,180)
Interest differential on swaps 461 334 153 33 2 (78) 905
Net amount 5,500 (3,750) (3,996) (2,635) (3,760) (7,665) (16,306)
As of December 31, 2009
Assets/(Liabilities) Less than 1-2 years 2-3 years 3-4 years 4-5 years More than Total
(M€) one year 5 years
Non-current financial debt
(notional value excluding interests) - (3,658) (3,277) (3,545) (2,109) (5,823) (18,412)
Current borrowings (6,994) - - - - - (6,994)
Other current financial liabilities (123) - - - - - (123)
Current financial assets 311 - - - - - 311
Cash and cash equivalents 11,662 - - - - - 11,662
Net amount before financial expense 4,856 (3,658) (3,277) (3,545) (2,109) (5,823) (13,556)
Financial expense on non-current financial debt (768) (697) (561) (448) (301) (1,112) (3,887)
Interest differential on swaps 447 233 100 25 (16) (55) 734
Net amount 4,535 (4,122) (3,738) (3,968) (2,426) (6,990) (16,709)
In addition, the Group guarantees bank debt and finance lease
obligations of certain non-consolidated companies and equity
affiliates. A payment would be triggered by failure of the guaranteed
party to fulfill its obligation covered by the guarantee, and no assets
are held as collateral for these guarantees. Maturity dates and
amounts are set forth in Note 23 to the Consolidated Financial
Statements (“Guarantees given against borrowings”).
The Group also guarantees the current liabilities of certain non-
consolidated companies. Performance under these guarantees
would be triggered by a financial default of these entities. Maturity
dates and amounts are set forth in Note 23 to the Consolidated
Financial Statements (“Guarantees of current liabilities”).
264
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
The following table sets forth financial assets and liabilities related to operating activities as of December 31, 2011, 2010 and 2009 (see
Note 28 to the Consolidated Financial Statements).
As of December 31,
(M€)
Assets/(Liabilities) 2011 2010 2009
Accounts payable (22,086) (18,450) (15,383)
Other operating liabilities (5,441) (3,574) (4,706)
including financial instruments related to commodity contracts (606) (559) (923)
Accounts receivable, net 20,049 18,159 15,719
Other operating receivables 7,467 4,407 5,145
including financial instruments related to commodity contracts 1,074 499 1,029
Total (11) 542 775
These financial assets and liabilities mainly have a maturity date below one year.
Credit risk
Credit risk is defined as the risk of the counterparty to a contract failing to perform or pay the amounts due.
The Group is exposed to credit risks in its operating and financing activities. The Group’s maximum exposure to credit risk is partially related
to financial assets recorded on its balance sheet, including energy derivative instruments that have a positive market value.
The following table presents the Group’s maximum credit risk exposure:
As of December 31,
(M€)
Assets/(Liabilities) 2011 2010 2009
Loans to equity affiliates (note 12) 2,246 2,383 2,367
Loans and advances (note 14) 2,055 1,596 1,284
Hedging instruments of non-current financial debt (note 20) 1,976 1,870 1,025
Accounts receivable (note 16) 20,049 18,159 15,719
Other operating receivables (note 16) 7,467 4,407 5,145
Current financial assets (note 20) 700 1,205 311
Cash and cash equivalents (note 27) 14,025 14,489 11,662
Total 48,518 44,109 37,513
The valuation allowance on loans and advances and on accounts
receivable and other operating receivables is detailed respectively
in Notes 14 and 16 to the Consolidated Financial Statements.
Customer receivables are subject to provisions on a case-by-
case basis, based on prior history and management’s
assessment of the facts and circumstances.
As part of its credit risk management related to operating and
financing activities, the Group has developed margin call contracts
with certain counterparties. As of December 31, 2011, the net
amount received as part of these margin calls was €1,682 million
(against €1,560 million as of December 31, 2010 and €693 million
as of December 31, 2009).
Credit risk is managed by the Group’s business segments as
follows:
Upstream Segment
- Exploration & Production
Risks arising under contracts with government authorities or
other oil companies or under long-term supply contracts
necessary for the development of projects are evaluated during
the project approval process. The long-term aspect of these
contracts and the high-quality of the other parties lead to a low
level of credit risk.
Risks related to commercial operations, other than those
described above (which are, in practice, directly monitored by
subsidiaries), are subject to procedures for establishing and
reviewing credit.
- Gas & Power
The Gas & Power division deals with counterparties in the
energy, industrial and financial sectors throughout the world.
Financial institutions providing credit risk coverage are highly
rated international bank and insurance groups.
Potential counterparties are subject to credit assessment
and approval before concluding transactions and are thereafter
subject to regular review, including re-appraisal and approval
of the limits previously granted.
The creditworthiness of counterparties is assessed based on
an analysis of quantitative and qualitative data regarding financial
standing and business risks, together with the review of any
relevant third party and market information, such as data
published by rating agencies. On this basis, credit limits are
defined for each potential counterparty and, where appropriate,
transactions are subject to specific authorisations.
Credit exposure, which is essentially an economic exposure or
an expected future physical exposure, is permanently monitored
and subject to sensitivity measures.
Credit risk is mitigated by the systematic use of industry standard
Registration Document 2011. TOTAL
265
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
contractual frameworks that permit netting, enable requiring
added security in case of adverse change in the counterparty
risk, and allow for termination of the contract upon occurrence
of certain events of default.
Downstream Segment
- Refining & Marketing
Internal procedures for the Refining & Marketing division include
rules on credit risk that describe the basis of internal control in
this domain, including the separation of authority between
commercial and financial operations. Credit policies are defined
at the local level, complemented by the implementation of
procedures to monitor customer risk (credit committees at the
subsidiary level, the creation of credit limits for corporate
customers, portfolio guarantees, etc.).
Potential counterparties are subject to credit assessment and
approval prior to any transaction being concluded and all active
counterparties are subject to regular reviews, including re-
appraisal and approval of granted limits. The creditworthiness of
counterparties is assessed based on an analysis of quantitative
and qualitative data regarding financial standing and business
risks, together with the review of any relevant third party and
market information, such as ratings published by Standard
& Poor’s, Moody’s Investors Service and other agencies.
Contractual arrangements are structured so as to maximize the
risk mitigation benefits of netting between transactions wherever
possible and additional protective terms providing for the
provision of security in the event of financial deterioration and the
termination of transactions on the occurrence of defined default
events are used to the greatest permitted extent.
Each entity also implements monitoring of its outstanding
receivables. Risks related to credit may be mitigated or
limited by subscription of credit insurance and/or requiring
security or guarantees.
Credit risks in excess of approved levels are secured by means
of letters of credit and other guarantees, cash deposits and
insurance arrangements. In respect of derivative transactions,
risks are secured by margin call contracts wherever possible.
Bad debts are provisioned on a case-by-case basis at a rate
determined by management based on an assessment of the risk
of credit loss.
- Trading & Shipping
Trading & Shipping deals with commercial counterparties and
financial institutions located throughout the world. Counterparties
to physical and derivative transactions are primarily entities
involved in the oil and gas industry or in the trading of energy
commodities, or financial institutions. Credit risk coverage is
concluded with financial institutions, international banks and
insurance groups selected in accordance with strict criteria.
The Trading & Shipping division has a strict policy of internal
delegation of authority governing establishment of country and
counterparty credit limits and approval of specific transactions.
Credit exposures contracted under these limits and approvals
are monitored on a daily basis.
32) Other risks and contingent liabilities
TOTAL is not currently aware of any exceptional event, dispute,
risks or contingent liabilities that could have a material impact on
the assets and liabilities, results, financial position or operations of
the Group.
The contingent commitments and contractual obligations are
detailed in note 23 to the consolidated financial statement.
Antitrust investigations
The principal antitrust proceedings in which the Group’s companies
are involved are described thereafter.
Chemicals
– As part of the spin-off of Arkema (1) in 2006, TOTAL S.A. or
certain other Group companies agreed to grant Arkema a
guarantee for potential monetary consequences related to
antitrust proceedings arising from events prior to the spin-off.
Chemicals Segment
Credit risk in the Chemicals segment is primarily related to
commercial receivables. Each division implements procedures for
managing and provisioning credit risk that differ based on the size
of the subsidiary and the market in which it operates. The principal
elements of these procedures are:
– implementation of credit limits with different authorization
procedures for possible credit overruns;
– use of insurance policies or specific guarantees (letters of credit);
– regular monitoring and assessment of overdue accounts (aging
balance), including collection procedures; and
– provisioning of bad debts on a customer-by-customer basis,
according to payment delays and local payment practices
(provisions may also be calculated based on statistics).
This guarantee covers, for a period of ten years from the date
of the spin-off, 90% of amounts paid by Arkema related to (i) fines
imposed by European authorities or European member-states for
competition law violations, (ii) fines imposed by U.S. courts or
antitrust authorities for federal antitrust violations or violations of
the competition laws of U.S. states, (iii) damages awarded in civil
proceedings related to the government proceedings mentioned
above, and (iv) certain costs related to these proceedings. The
guarantee related to anti-competition violations in Europe applies
to amounts above a €176.5 million threshold. On the other hand,
the agreements provide that Arkema will indemnify TOTAL S.A.
or any Group company for 10% of any amount that TOTAL S.A.
or any Group company are required to pay under any of the
proceedings covered by this guarantee, in Europe.
If one or more individuals or legal entities, acting alone or
together, directly or indirectly holds more than one-third of the
voting rights of Arkema, or if Arkema transfers more than 50% of
(1) Arkema is used in this section to designate those companies of the Arkema group whose ultimate parent company is Arkema S.A. Arkema became an independent company after being
spun-off from TOTAL S.A. in May 2006.
266
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
its assets (as calculated under the enterprise valuation method,
as of the date of the transfer) to a third party or parties acting
together, irrespective of the type or number of transfers, this
guarantee will become void.
– In the United States, civil liability lawsuits, for which TOTAL S.A.
has been named as the parent company, are closed without
significant impact on the Group’s financial position.
– In Europe, since 2006, the European Commission has fined
companies of the Group in its configuration prior to the spin-off
an overall amount of €385.47 million, of which Elf Aquitaine
and/or TOTAL S.A. were held jointly liable for €280.17 million,
Elf Aquitaine being personally fined €23.6 million for deterrence.
These fines are entirely settled as of today.
As a result, since the spin-off, the Group has paid the overall
amount of €188.07 million (1), corresponding to 90% of the fines
overall amount once the threshold provided for by the guarantee
is deducted to which an amount of €31.31 million of interest has
been added as explained hereinafter.
The European Commission imposed these fines following
investigations between 2000 and 2004 into commercial practices
involving eight products sold by Arkema. Five of these
investigations resulted in prosecutions from the European
Commission for which Elf Aquitaine has been named as the
parent company, and two of these investigations named
TOTAL S.A. as the ultimate parent company of the Group.
TOTAL S.A. and Elf Aquitaine are contesting their liability
based solely on their status as parent companies and appealed
for cancellation and reformation of the rulings that are still
pending before the relevant EU court of appeals or supreme
court of appeals.
During the year 2011, four of the proceedings have evolved
and are closed as far as Arkema is concerned:
– In one of these proceedings, the Court of Justice of the
European Union (CJEU) has rejected the action of Arkema while
the decisions of the European Commission and of the General
Court of the European Union against the parent companies have
been squashed. Consequently, this proceeding is definitively
closed regarding Arkema as well as the parent companies.
– In two other proceedings, previous decisions against Arkema
and the parent companies have been upheld by the General
Court of the European Union. While the parent companies
have introduced an appeal before the CJEU, Arkema did not
appeal to the CJEU.
– Finally, in a last proceeding, the General Court has decided to
reduce the amount of the fine initially ordered against Arkema
while, in parallel, it has rejected the actions of the parent
companies that have remained obliged to pay the whole
amount of the fine initially ordered by the European
Commission. Arkema has accepted this decision while the
parent companies have introduced an appeal before the CJEU.
With the exception of the €31.31 million of interest charged by the
European Commission to the parent companies, which has been
required to pay in accordance with the decision concerning the last
proceeding referred hereinabove, the evolution of the proceedings
during the year 2011 did not modify the global amount assumed by
the Group in execution of the guarantee.
In addition, civil proceedings against Arkema and other groups of
companies were initiated in 2009 and 2011, respectively, before
German and Dutch courts by third parties for alleged damages
pursuant to two of the above mentioned legal proceedings.
TOTAL S.A. was summoned to serve notice of the dispute before
the German court. At this point, the probability to have a favorable
verdict and the financial impacts of these proceedings are uncertain
due to the number of legal difficulties they give rise to, the lack of
documented claims and evaluations of the alleged damages.
Arkema began implementing compliance procedures in 2001
that are designed to prevent its employees from violating antitrust
provisions. However, it is not possible to exclude the possibility
that the relevant authorities could commence additional proceedings
involving Arkema regarding events prior to the spin-off, as well
as Elf Aquitaine and/or TOTAL S.A. based on their status as
parent company.
Within the framework of all of the legal proceedings described
above, a €17 million reserve remains booked in the Group’s
consolidated financial statements as of December 31, 2011.
Downstream
– Pursuant to a statement of objections received by Total Nederland
N.V. and TOTAL S.A. (based on its status as parent company)
from the European Commission, Total Nederland N.V. was fined
€20.25 million in 2006, for which TOTAL S.A. was held jointly
liable for €13.5 million. TOTAL S.A. appealed this decision before
the relevant court and this appeal is still pending.
– In addition, pursuant to a statement of objections received by
Total Raffinage Marketing (formerly Total France) and TOTAL S.A.
from the European Commission regarding another product line of
the Refining & Marketing division, Total Raffinage Marketing was
fined €128.2 million in 2008, which has been paid, and for which
TOTAL S.A. was held jointly liable based on its status as parent
company. TOTAL S.A. also appealed this decision before the
relevant court and this appeal is still pending.
– In addition, civil proceedings against TOTAL S.A and Total Raffinage
Marketing and other companies were initiated before U.K and
Dutch courts by third parties for alleged damages in connection
with the prosecutions brought by the European Commission in
this case. At this point, the probability to have a favorable verdict
and the financial impacts of these procedures are uncertain due
to the number of legal difficulties they gave rise to, the lack of
documented claims and evaluations of the alleged damages.
Within the framework of the legal proceedings described above, a
€30 million reserve is booked in the Group’s consolidated financial
statements as of December 31, 2011.
Whatever the evolution of the proceedings described above, the
Group believes that their outcome should not have a material adverse
effect on the Group’s financial situation or consolidated results.
Grande Paroisse
An explosion occurred at the Grande Paroisse industrial site in the
city of Toulouse in France on September 21, 2001. Grande
Paroisse, a former subsidiary of Atofina which became a subsidiary
of Elf Aquitaine Fertilisants on December 31, 2004, as part of the
reorganization of the Chemicals segment, was principally engaged
(1) This amount does not take into account a case that led to Arkema, prior to Arkema’s spin-off from TOTAL, and Elf Aquitaine being fined jointly €45 million and Arkema being fined €13.5 million.
Registration Document 2011. TOTAL
267
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
in the production and sale of agricultural fertilizers. The explosion,
which involved a stockpile of ammonium nitrate pellets, destroyed
a portion of the site and caused the death of thirty-one people,
including twenty-one workers at the site, and injured many others.
The explosion also caused significant damage to certain property
in part of the city of Toulouse.
This plant has been closed and individual assistance packages
have been provided for employees. The site has been rehabilitated.
On December 14, 2006, Grande Paroisse signed, under the
supervision of the city of Toulouse, the deed whereby it donated the
former site of the AZF plant to the greater agglomeration of
Toulouse (CAGT) and the Caisse des dépôts et consignations and
its subsidiary ICADE. Under this deed, TOTAL S.A. guaranteed
the site restoration obligations of Grande Paroisse and granted a
€10 million endowment to the InNaBioSanté research foundation
as part of the setting up of a cancer research center at the site
by the city of Toulouse.
Regarding the cause of the explosion, the hypothesis that the
explosion was caused by Grande Paroisse through the accidental
mixing of hundreds of kilos of a chlorine compound at a storage site
for ammonium nitrate was discredited over the course of the
investigation. As a result, proceedings against ten of the eleven
Grande Paroisse employees charged during the criminal
investigation conducted by the Toulouse Regional Court (Tribunal de
grande instance) were dismissed and this dismissal was upheld on
appeal. Nevertheless, the final experts’ report filed on May 11, 2006
continued to focus on the hypothesis of a chemical accident,
although this hypothesis was not confirmed during the attempt to
reconstruct the accident at the site. After having articulated several
hypotheses, the experts no longer maintain that the accident was
caused by pouring a large quantity of a chlorine compound over
ammonium nitrate. Instead, the experts have retained a scenario
where a container of chlorine compound sweepings was poured
between a layer of wet ammonium nitrate covering the floor and a
quantity of dry agricultural nitrate at a location not far from the
principal storage site. This is claimed to have caused an explosion
which then spread into the main storage site. Grande Paroisse was
investigated based on this new hypothesis in 2006; Grande Paroisse
is contesting this explanation, which it believes to be based on
elements that are not factually accurate.
All the requests for additional investigations that were submitted
by Grande Paroisse, the former site manager and various plaintiffs
were denied on appeal after the end of the criminal investigation
procedure. On July 9, 2007, the investigating judge brought
charges against Grande Paroisse and the former plant manager
before the criminal chamber of the Court of Appeal of Toulouse. In
late 2008, TOTAL S.A. and Mr. Thierry Desmarest were summoned
to appear in Court pursuant to a request by a victims association.
The trial for this case began on February 23, 2009, and lasted
approximately four months.
On November 19, 2009, the Toulouse Criminal Court acquitted
both the former Plant Manager, and Grande Paroisse due to the
lack of reliable evidence for the explosion. The Court also ruled that
the summonses against TOTAL S.A. and Mr. Thierry Desmarest,
Chairman and CEO at the time of the disaster, were inadmissible.
Due to the presumption of civil liability that applied to Grande
Paroisse, the Court declared Grande Paroisse civilly liable for the
damages caused by the explosion to the victims in its capacity as
custodian and operator of the plant.
The Prosecutor’s office, together with certain third parties, has
appealed the Toulouse Criminal Court verdict. In order to preserve
its rights, Grande Paroisse lodged a cross-appeal with respect
to civil charges.
The appeal proceedings before the Court of Appeal of Toulouse
started on November 3, 2011.
A compensation mechanism for victims was set up immediately
following the explosion. €2.3 billion was paid for the compensation
of claims and related expenses amounts. As of December 31, 2011,
a €21 million reserve was recorded in the Group’s consolidated
balance sheet.
Buncefield
On December 11, 2005, several explosions, followed by a major
fire, occurred at an oil storage depot at Buncefield, north of
London. This depot was operated by Hertfordshire Oil Storage
Limited (HOSL), a company in which TOTAL’s UK subsidiary
holds 60% and another oil group holds 40%.
The explosion caused injuries, most of which were minor injuries,
to a number of people and caused property damage to the depot
and the buildings and homes located nearby. The official
Independent Investigation Board has indicated that the explosion
was caused by the overflow of a tank at the depot. The Board’s
final report was released on December 11, 2008. The civil
procedure for claims, which had not yet been settled, took place
between October and December 2008. The Court’s decision of
March 20, 2009, declared TOTAL’s UK subsidiary liable for the
accident and solely liable for indemnifying the victims. The
subsidiary appealed the decision. The appeal trial took place in
January 2010. The Court of Appeals, by a decision handed down
on March 4, 2010, confirmed the prior judgment. The Supreme
Court of United Kingdom has partially authorized TOTAL’s UK
subsidiary to contest the decision. TOTAL’s UK subsidiary finally
decided to withdraw from this recourse due to settlement
agreements reached in mid-February 2011.
The Group carries insurance for damage to its interests in these
facilities, business interruption and civil liability claims from third parties.
The provision for the civil liability that appears in the Group’s
consolidated financial statements as of December 31, 2011, stands
at €80 million after taking into account the payments previously made.
The Group believes that, based on the information currently
available, on a reasonable estimate of its liability and on provisions
recognized, this accident should not have a significant impact
on the Group’s financial situation or consolidated results.
In addition, on December 1, 2008, the Health and Safety
Executive (HSE) and the Environment Agency (EA) issued a Notice
of prosecution against five companies, including TOTAL’s UK
subsidiary. By a judgment on July 16, 2010, the subsidiary was
fined £3.6 million and paid it. The decision takes into account a
number of elements that have mitigated the impact of the charges
brought against it.
Erika
Following the sinking in December 1999 of the Erika, a tanker
that was transporting products belonging to one of the Group
companies, the Tribunal de grande instance of Paris convicted
TOTAL S.A. of marine pollution pursuant to a judgment issued
on January 16, 2008, finding that TOTAL S.A. was negligent in its
vetting procedure for vessel selection, and ordering TOTAL S.A.
to pay a fine of €375,000. The Court also ordered compensation to
268
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
be paid to those affected by the pollution from the Erika up to an
aggregate amount of €192 million, declaring TOTAL S.A. jointly
and severally liable for such payments together with the Erika’s
inspection and classification firm, the Erika’s owner and the Erika’s
manager.
TOTAL has appealed the verdict of January 16, 2008. In the
meantime, it nevertheless proposed to pay third parties who so
requested definitive compensation as determined by the Court.
Forty-two third parties have been compensated for an aggregate
amount of €171.5 million.
By a decision dated March 30, 2010, the Court of Appeal of Paris
upheld the lower Court verdict pursuant to which TOTAL S.A. was
convicted of marine pollution and fined €375,000. TOTAL appealed
this decision to the French Supreme Court (Cour de cassation).
However, the Court of Appeal ruled that TOTAL S.A. bears no civil
liability according to the applicable international conventions and
consequently ruled that TOTAL S.A. be not convicted.
To facilitate the payment of damages awarded by the Court of
Appeal in Paris to third parties against Erika’s controlling and
classification firm, the ship-owner and the ship-manager, a global
settlement agreement was signed late 2011 between these parties
and TOTAL S.A. under the auspices of the IOPC Fund. Under this
global settlement agreement, each party agreed to the withdrawal
of all civil proceedings initiated against all other parties to the
agreement.
TOTAL S.A. believes that, based on the information currently
available, the case should not have a significant impact on the
Group’s financial situation or consolidated results.
Blue Rapid and the Russian Olympic Committee -
Russian regions and Interneft
Blue Rapid, a Panamanian company, and the Russian Olympic
Committee filed a claim for damages with the Paris Commercial
Court against Elf Aquitaine, alleging a so-called non-completion
by a former subsidiary of Elf Aquitaine of a contract related to an
exploration and production project in Russia negotiated in the
early 1990s. Elf Aquitaine believed this claim to be unfounded and
opposed it. On January 12, 2009, the Commercial Court of Paris
rejected Blue Rapid’s claim against Elf Aquitaine and found that the
Russian Olympic Committee did not have standing in the matter.
Blue Rapid and the Russian Olympic Committee appealed this
decision. On June 30, 2011, the Court of Appeal of Paris dismissed
as inadmissible the claim of Blue Rapid and the Russian Olympic
Committee against Elf Aquitaine, notably on the grounds of the
contract’s termination. Blue Rapid and the Russian Olympic
Committee appealed this decision to the French Supreme Court.
In connection with the same facts, and fifteen years after the
termination of the exploration and production contract, a Russian
company, which was held not to be the contracting party to the
contract, and two regions of the Russian Federation which were
not even parties to the contract, have launched an arbitration
procedure against the aforementioned former subsidiary of
Elf Aquitaine that was liquidated in 2005, claiming alleged damages
of U.S.$ 22.4 billion. For the same reasons as those successfully
adjudicated by Elf Aquitaine against Blue Rapid and the
Russian Olympic Committee, the Group considers this claim to
be unfounded as to a matter of law or fact. The Group has lodged
a criminal complaint to denounce the fraudulent claim which the
Group believes it is a victim of and, has taken and reserved its
rights to take other actions and measures to defend its interests.
Iran
In 2003, the United States Securities and Exchange Commission
(SEC) followed by the Department of Justice (DoJ) issued a
formal order directing an investigation in connection with the pursuit
of business in Iran, by certain oil companies including, among
others, TOTAL.
The inquiry concerns an agreement concluded by the Company
with a consultant concerning a gas field in Iran and aims to verify
whether certain payments made under this agreement would have
benefited Iranian officials in violation of the Foreign Corrupt
Practices Act (FCPA) and the Company’s accounting obligations.
Investigations are still pending and the Company is cooperating
with the SEC and the DoJ. In 2010, the Company opened talks
with U.S. authorities, without any acknowledgement of facts, to
consider an out-of-court settlement as it is often the case in this
kind of proceeding.
Late in 2011, the SEC and the DoJ proposed to TOTAL out-of-court
settlements that would close their inquiries, in exchange for
TOTAL’s committing to a number of obligations and paying fines.
As TOTAL was unable to agree to several substantial elements of
the proposal, the Company is continuing discussions with the U.S.
authorities. The Company is free not to accept an out-of-court
settlement solution, in which case it would be exposed to the risk of
prosecution in the United States.
In this same affair, a parallel judicial inquiry related to TOTAL was
initiated in France in 2006. In 2007, the Company’s Chief Executive
Officer was placed under formal investigation in relation to this
inquiry, as the former President of the Middle East department of
the Group’s Exploration & Production division. The Company has
not been notified of any significant developments in the
proceedings since the formal investigation was launched.
At this point, the Company cannot determine when these investigations
will terminate, and cannot predict their results, or the outcome of
the talks that have been initiated. Resolving these cases is not
expected to have a significant impact on the Group’s financial
situation or consequences on its future planned operations.
Oil-for-Food Program
Several countries have launched investigations concerning possible
violations related to the United Nations (UN) Oil-for-Food program
in Iraq.
Pursuant to a French criminal investigation, certain current or
former Group employees were placed under formal criminal
investigation for possible charges as accessories to the
misappropriation of corporate assets and as accessories to the
corruption of foreign public agents. The Chairman and Chief
Executive Officer of the Company, formerly President of the Group’s
Exploration & Production division, was also placed under formal
investigation in October 2006. In 2007, the criminal investigation
was closed and the case was transferred to the Prosecutor’s office.
In 2009, the Prosecutor’s office recommended to the investigating
judge that the case against the Group’s current and former
employees and TOTAL’s Chairman and Chief Executive Officer not
be pursued.
In early 2010, despite the recommendation of the Prosecutor’s
office, a new investigating judge, having taken over the case,
Registration Document 2011. TOTAL
269
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
decided to indict TOTAL S.A. on bribery charges as well as
complicity and influence peddling. The indictment was brought
eight years after the beginning of the investigation without any new
evidence being introduced.
In October 2010, the Prosecutor’s office recommended to the
investigating judge that the case against TOTAL S.A., the Group’s
current and former employees and TOTAL’s Chairman and Chief
Executive Officer not be pursued. However, by ordinance notified in
early August 2011, the investigating judge on the matter decided to
send the case to trial.
The Company believes that its activities related to the Oil-for-Food
program have been in compliance with this program, as organized
by the UN in 1996.
The Volcker report released by the independent investigating committee
set up by the UN had discarded any bribery grievance within the
framework of the Oil-For-Food program with respect to TOTAL.
Italy
As part of an investigation led by the Prosecutor of the Republic of
the Potenza Court, Total Italia and certain Group’s employees are
the subject of an investigation related to certain calls for tenders that
Total Italia made for the preparation and development of an oil field.
On February 16, 2009, as a preliminary measure before the
proceedings go before the Court, the preliminary investigation judge
of Potenza served notice to Total Italia of a decision that would
suspend the concession for this field for one year. Total Italia has
appealed the decision by the preliminary investigation judge before
the Court of Appeal of Potenza. In a decision dated April 8, 2009,
the Court reversed the suspension of the concession and appointed
for one year, i.e. until February 16, 2010, a judicial administrator to
supervise the operations related to the development of the
concession, allowing the Tempa Rossa project to continue.
The criminal investigation was closed in the first half of 2010.
The preliminary hearing judge, who will decide whether the case
shall be returned to the Criminal Court to be judged on the merits,
held the first hearing on December 6, 2010. The proceedings
before the Judge of the preliminary hearing are still pending.
In 2010, Total Italia’s exploration and production operations were
transferred to Total E&P Italia and refining and marketing operations
were merged with those of Erg Petroli.
Libya
During the financial year 2011, the Group’s activities were affected
by the security context in Libya, and the Group’s production was
gradually shut down as from the end of February. The Group’s
production started up again at the end of September 2011 on the
offshore Al Jurf field located in zones 15, 16 & 32 (ex C137) at the
level existing before the events, and has gradually restarted since
October 2011 in onshore zones 129, 130 and 131. The restart of
the Group’s production on the other onshore zones is expected to
occur progressively in 2012.
In June 2011, the United States Securities and Exchange
Commission (SEC) issued to certain oil companies - including,
among others, TOTAL - a formal request for information related to
their operations in Libya. TOTAL is cooperating with this non public
investigation.
Yemen
During the financial year 2011, the Group’s activities were not
significantly impacted by the security context in Yemen, but the
Group nevertheless reorganized locally to minimize the risks to its
personnel. In addition, on October 15, 2011, the gas pipeline
supplying Yemen LNG was sabotaged, and then repaired with no
delay, enabling LNG production to resume as from
October 26, 2011.
Syria
In May 2011, the European Union adopted measures with criminal
and financial penalties that prohibit the supply of certain equipment
to Syria, as well as certain financial and asset transactions with
respect to a list of named individuals and entities. These measures
apply to European persons and to entities constituted under the laws
of a EU Member State. In September 2011, the EU adopted further
measures, including, notably, a prohibition on the purchase, import or
transportation from Syria of crude oil and petroleum products. Since
early September 2011, the Group ceased to purchase hydrocarbons
from Syria. On December 1, 2011, the EU extended sanctions
against, among others, three state-owned Syrian oil firms, including
General Petroleum Corporation, the Group’s co-contracting partner
in PSA 1988 (Deir Es Zor license) and the Tabiyeh contract. Since
early December 2011, TOTAL has ceased its activities that contribute
to oil and gas production in Syria.
270
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
33) Other information
Research and development costs incurred by the Group in 2011
amounted to €776 million (€715 million in 2010 and €650 million
in 2009), corresponding to 0.4% of the sales.
The staff dedicated in 2011 to these research and development
activities are estimated at 3,946 people (4,087 in 2010 and
4,016 in 2009).
34) Changes in progress in the Group structure
– TOTAL signed in March 2011 agreements for the acquisition in
Uganda of a one-third interest in Blocks 1, 2 and 3A held by
Tullow Oil plc for $1,467 million (amount as of January 1, 2010,
to which will add costs of interim period). Following this
acquisition, TOTAL would become an equal partner with
Tullow and CNOOC in the blocks, each with a one-third interest
and each being an operator of one of the blocks. Subject
to the decision of the Authorities, TOTAL would be the operator
of Block 1.
– TOTAL announced in February 2012 the signature of an
agreement with Sinochem to sell its interests in the Cusiana field
and in OAM and ODC pipelines. This transaction is subject to
approval by the relevant authorities.
– As of December 31, 2010, the sections “Assets classified as held
for sale” and “Liabilities directly associated with the assets
classified as held for sale” included the assets and liabilities of
Total E&P Cameroun, of Joslyn and of photocure and coatings
resins businesses.
Registration Document 2011. TOTAL
271
9 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
35) Consolidation scope
As of December 31, 2011, 870 entities are consolidated of which 783 are fully consolidated,
and 87 are accounted for under the equity method (identified with the letter E). This simplified
organizational chart shows the main consolidated entities. For each of them, the Group interest
is mentioned between brackets. This chart of legal detentions is not exhaustive and does not
reflect neither the operational structure nor the relative economic size of the Group entities
and the business segments.
Treasury shares
& TOTAL shares
owned by Group
subsidiaries : 4.6%
TOTAL S.A.
67.9%
32.1%
65.8%
34.2%
TOTAL RAFFINAGE MARKETING
(100%)
TOTAL E & P HOLDINGS
(100%)
AS24
Totalgaz SNC
TOTAL Lubrifiants S.A.
TOTAL Fluides
Urbaine des Pétroles
TOTAL (Philippines) Corp.
TOTAL Belgium
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
TOTAL / T.R.M.
other common subsidiaries
S.A. de la Raffinerie des Antilles
(50%) E
TOTAL E & P Russie
TOTAL E & P Yamal
Yamal LNG
TOTAL E & P Arctic Russia
Novatek
TOTAL (BTC) Ltd.
TOTAL E & P Nigeria Ltd.
TOTAL E & P Algérie
TOTAL E & P Angola
TOTAL E & P Libye
TOTAL Abu Al Bu Khoosh
TOTAL South Pars
Elf Petroleum Iran
TOTAL E & P Oman
TOTAL Qatar Oil & Gas
TOTAL E & P Qatar
TOTAL E & P Syrie
TOTAL E & P Yémen
TOTAL E & P Indonésie
TOTAL E & P Myanmar
TOTAL Profils Pétroliers
TOTAL E & P Thaïland
TOTAL Austral
TOTAL E & P Canada Ltd.
TOTAL E & P Bolivie
TOTAL LNG Angola Ltd.
Angola LNG Ltd.
Brass Holdings Company Ltd.
Brass LNG Ltd.
Qatar Liquefied Gas Company Ltd.
TOTAL Yemen LNG Company Ltd.
Yemen LNG
TOTAL Holding Dolphin Amont Ltd.
TOTAL E & P Dolphin Upstream Ltd.
TOTAL Dolphin Midstream Ltd.
Dolphin Energy Ltd.
(100%)
(100%)
(31.3%) E
(100%)
(14.1%) E
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(13.6%) E
(100%)
(17.0%) E
(10,0%) E
(100%)
(39.6%) E
(100%)
(100%)
(100%)
(24.5%) E
TOTAL / Total E & P Holdings
other common subsidiairies
TOTAL Trading and Marketing Canada LP
(100%)
TOTAL Subsidiaries
100%
TOTAL E & P Kazakhstan
TOTAL E & P Nigeria SAS
Total Upstream Nigeria Ltd.
TOTAL Coal South Africa Ltd.
TOTAL Gasandes S.A.
CDF Energie
TOTAL Venezuela
Petrocedeño
TOTAL E & P USA, Inc.
TOTAL E & P Chine
TOTAL E & P Malaysia
TOTAL E & P Australia
TOTAL E & P Mauritanie
TOTAL E & P Iraq
TOTAL E & P Côte d'Ivoire
TOTAL E & P Guyane française
TOTAL E&P Golfe Holdings Ltd.
TOTAL E&P Golfe Ltd.
Qatar Liquefied Gas Co. Ltd. II (Train B)
TOTAL Energie Développement
Ténésol
TOTAL Gaz & Energies Nouvelles Holding
Géosud
Gaz Transport et Technigaz
TOTAL Energie Solaire Concentrée
TOTAL Abengoa Solar Emirates Investment
Company
TOTAL E & P Holding Australia
TOTAL E & P Holding Ichtys
Ichthys LNG Ltd.
TOTAL Outre-Mer
Total Petroleum Puerto Rico Corp.
TOTAL (China) Investments
Air Total International
TOTAL Refining Saudi Arabia SAS
Saudi Aramco Total Refining & Petrochemical
Company
Chartering & Shipping Services S.A.
TOTAL International Ltd.
Atlantic Trading & Marketing
Total Trading Canada Limited
Cray Valley S.A.
TOTAL Chimie
Hutchinson S.A.
Total Petrochemicals Iberica
PetroFina S.A.
TOTAL Oil Asia-Pacific Pte Ltd.
Omnium Insurance and Reinsurance Cy
TOTAL Gestion USA
TOTAL Holdings USA, Inc.
TOTAL Petrochemicals USA, Inc.
TOTAL Gas & Power North America
Hutchinson Corporation
TOTAL Capital
TOTAL Treasury
TOTAL Finance
TOTAL Finance Exploitation
TOTAL Capital Canada Ltd.
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(30.3%) E
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(16.7%) E
(100%)
(100%)
(100%)
(71.1%) E
(30%) E
(100%)
(50%) E
(100%)
(100%)
(24%) E
(100%)
(100%)
(100%)
(100%)
(100%)
(37.5%) E
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
TOTAL other subsidiaries
TOTAL South Africa
Zeeland Refinery N.V.
Total Tractebel Emirates Power Cy
(50.1%)
(55%)
(50 %) E
272
TOTAL. Registration Document 2011
Consolidated Financial Statements 9
Notes to the Consolidated Financial Statements
The business segments are identified with the following colors:
Upstream
Downstream
Chemicals
Holding
100%
Elf Aquitaine
(100%)
100%
Elf Exploration Production
(100%)
53.2%
16.9%
29.9%
TOTAL HOLDINGS EUROPE
(100%)
TOTAL Holdings UK Ltd.
TOTAL Upstream UK Ltd.
TOTAL Midstream UK Ltd.
Elf Petroleum UK Plc
South Hook LNG Terminal Company Ltd.
TOTAL UK Ltd.
Samsung Total Petrochemicals
TOTAL E & P Norge AS
TOTAL E & P Italia Spa
TOTAL Holdings Nederland B.V.
TOTAL E & P Nederland B.V.
TOTAL E & P Azerbaidjan B.V.
TOTAL E & P Bornéo B.V.
Tepma Colombie
TOTAL Oil & Gas Venezuela B.V.
TOTAL Shtokman B.V.
Shtokman Development A.G.
TOTAL Termokarstovoye B.V.
Terneftegaz J.S.C.
TOTAL E & P Absheron B.V.
TOTAL Nederland N.V.
TOTALErg
TOTAL Mineraloel und Chemie GmbH
TOTAL Deutschland GmbH
TOTAL Raffinerie Mitteldeutschland
Atotech BV
(100%)
(100%)
(100%)
(100%)
(8.3%) E
(100%)
(50%) E
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(25%) E
(100%)
(49%) E
(100%)
(100%)
(49%) E
(100%)
(100%)
(100%)
(100%)
Elf Aquitaine subsidiaries
100%
TOTAL E & P France
TOTAL E & P Congo
TOTAL E & P Do Brazil
TOTAL Participations Petrolières Gabon
TOTAL Gaz & Electricité Holdings France
TOTAL LNG Nigeria Ltd.
NLNG
TOTAL Infrastructures Gaz France
TOTAL Energie Gaz
Hazira LNG Private Ltd.
TOTAL Gas and Power U.S.A.
SunPower
AE Polysilicon Corporation
Amyris
TOTAL (Africa) Ltd.
TOTSA Total Oil Trading S.A.
Socap International Ltd.
Sofax Banque
Socap S.A.S.
Elf Aquitaine Fertilisants
Grande Paroisse S.A.
G.P.N. S.A.
Elf Aquitaine other subsidiaries
TOTAL Gabon
Rosier
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(15%) E
(100%)
(100%)
(26%) E
(100%)
(59.7%)
(30%) E
(21.3%) E
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(100%)
(58.3%)
(56.9%)
TOTAL /Elf Aquitaine
other common subsidiaries
TOTAL Nigeria
TOTAL Turkiye
TOTAL Kenya
TOTAL Sénégal
TOTAL Petrochemicals France
Qatar Petrochemical Company Ltd.
Qatofin Company Ltd.
Bostik Holding S.A.
Bostik S.A.
(61.7%)
(100%)
(87.3%)
(95.1%)
(100%)
(20%) E
(49.1%) E
(100%)
(100%)
Registration Document 2011. TOTAL
273
274
TOTAL. Registration Document 2011
Supplemental oil and gas information (unaudited) 10
Supplemental oil and gas information
(unaudited)
1. Oil and gas information pursuant
to FASB Accounting Standards Codification 932 276
1.1. Preparation of reserves estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .276
1.2. Proved developed reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .276
1.3. Proved undeveloped reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .277
1.4. Estimated proved reserves of oil, bitumen and gas reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .277
1.5. Results of operations for oil and gas producing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .285
1.6. Cost incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .287
1.7. Capitalized costs related to oil and gas producing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .288
1.8. Standardized measure of discounted future net cash flows (excluding transportation) . . . . . . . . . . . . . . . . . . . . . . . . . . . .289
1.9. Changes in the standardized measure of discounted future net cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .291
2. Other information 292
2.1. Net gas production, production prices and production costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .292
Registration Document 2011. TOTAL
275
10 Supplemental oil and gas information (unaudited)
Oil and gas information pursuant to FASB Accounting Standards Codification 932
1. Oil and gas information pursuant to FASB
Accounting Standards Codification 932
As from 2009, the amendments to the Securities and Exchange
Commission (SEC) Rule 4-10 of Regulation S-X set forth in the
“Modernization of Oil and Gas Reporting” release (SEC Release
n° 33-8995) and the Financial Accounting Standard Board (FASB)
Accounting Standards Update regarding Extractive Activities -
Oil and Gas (ASC 932) change a number of reserves estimation
and disclosure requirements. As a reminder, in terms of reserves
estimation, the main changes are: the use of an average price
instead of a single year-end price; the use of new reliable
technologies to assess proved reserves; and the inclusion,
under certain conditions, of non-traditional sources as oil
and gas producing activities. The revised rules form the basis
of the 2011, 2010 and 2009 year-end estimation
of proved reserves.
1.1. Preparation of reserves estimates
The estimation of reserves is an ongoing process which is done within
affiliates by experienced geoscientists, engineers and economists
under the supervision of each affiliate’s General Management.
Persons involved in reserves evaluation are trained to follow
SEC-compliant internal guidelines and policies regarding criteria
that must be met before reserves can be considered as proved.
The technical validation process relies on a Technical Reserves
Committee that is responsible for approving proved reserves
changes above a certain threshold and technical evaluations of
reserves associated with any investment decision that requires
approval from the Exploration & Production Executive Committee.
The Chairman of the Technical Reserves Committee is appointed
by the Senior Management of Exploration & Production and its
members represent expertise in reservoir engineering, production
geology, production geophysics, drilling, and development studies.
An internal control process related to reserves estimation is well
established within TOTAL and involves the following elements:
– A central Reserve Entity whose responsibility is to consolidate,
document and archive the Group’s reserves; to ensure
coherence of evaluations worldwide; to maintain the Corporate
Reserves Guidelines Standards in line with SEC guidelines
and policies; to deliver training on reserves evaluation and
classification; and to conduct periodically in-depth technical
review of reserves for each affiliate.
– An annual review of affiliates reserves conducted by an internal
group of specialists selected for their expertise in geosciences
and engineering or their knowledge of the affiliate. All members
of this group chaired by the Reserves Vice-president and
composed of at least three Technical Reserves Committee
members are knowledgeable in the SEC guidelines for proved
reserves evaluation. Their responsibility is to provide an
independent review of reserves changes proposed by affiliates
and ensure that reserves are estimated using appropriate
standards and procedures.
1.2. Proved developed reserves
– At the end of the annual review carried out by the Development
Division, an SEC Reserves Committee chaired by the
Exploration & Production Finance Senior Vice President and
comprised of the Development, Exploration, Strategy and Legal
Senior Vice Presidents, or their representatives, as well as the
Chairman of the Technical Reserves Committee and the
Reserves Vice-President, approves the SEC reserve booking
proposals regarding criteria that are not dependent upon
reservoir and geosciences techniques. The results of the
annual review and the proposals for including revisions or
additions of SEC Proved Reserves are presented to the
Exploration & Production Executive Committee for approval
before final validation by the Group Executive Management.
The reserves evaluation and control process is audited periodically
by the Group’s internal auditors who verify the effectiveness of the
reserves evaluation process and control procedures.
The reserves Vice-President (RVP) is the technical person
responsible for preparing the reserves estimates for the Group.
Appointed by the President of Exploration & Production, the RVP
supervises the Reserve Entity, chairs the annual review of reserves,
and is a member of the Technical Reserves Committee and the
SEC Reserves Committee. The RVP has over thirty years of
experience in the oil & gas industry. He previously held several
management positions in the Group in reservoir engineering and
geosciences, and has more than fifteen years of experience in
the field of reserves evaluation and control process. He holds an
engineering degree from Institut National des Sciences Appliquées,
Lyon, France, and a petroleum engineering degree from École
Nationale Supérieure du Pétrole et des Moteurs (IFP School),
France. He is a past member and past chairman of the Society
of Petroleum Engineering Oil and Gas Reserves Committee and
a member of the UNECE (United Nations Economic Commission
for Europe) Expert Group on Resource Classification.
At the end of 2011, proved developed reserves of oil and gas
were 6,046 Mboe and represented 53% of the proved reserves.
At the end of 2010, proved developed reserves of oil and gas
were 5,708 Mboe and represented 53% of the proved reserves.
At the end of 2009, proved developed reserves of oil and gas
were 5,835 Mboe and represented 56% of the proved reserves.
Over the past three years, the level of proved developed reserves
has remained above 5.7 Bboe and over 53% of proved reserves,
illustrating TOTAL’s ability to consistently transfer proved
undeveloped reserves into developed status.
276
TOTAL. Registration Document 2011
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Supplemental oil and gas information (unaudited) 10
1.3. Proved undeveloped reserves
As of December 31, 2011, TOTAL’s combined proved undeveloped
reserves of oil and gas were 5,377 Mboe as compared to 4,987 Mboe
at the end of 2010. The net increase of 390 Mboe of proved
undeveloped reserves is due to the addition of +639 Mboe of
undeveloped reserves related to extensions and discoveries, a net
increase of +401 Mboe due to acquisitions/divestitures, the revision
of -168 Mboe of previous estimates (partly resulting from negative
price effects), and the transfer of 482 Mboe from proved
undeveloped reserves to proved developed reserves. In 2011,
the costs incurred to develop proved undeveloped reserves (PUDs)
was €10.2 billion, which represents 84% of 2011 development
costs incurred, and was related to projects located for the most
part in Angola, Australia, Canada, Kazakhstan, Nigeria, Norway,
United Kingdom and Russia.
Approximately 57% of the Group’s proved undeveloped reserves
are associated with producing projects and are located for the most
part in Angola, Canada, Nigeria, Norway, and Venezuela. These
reserves are expected to be developed over time as part of initial
field development plans or additional development phases.
The timing to bring these proved reserves into production will
depend upon several factors including reservoir performance,
surface facilities or plant capacity constraints and contractual
limitations on production level. The remaining proved undeveloped
reserves correspond to undeveloped fields or assets for which
a development has been sanctioned or is in progress.
The Group’s portfolio of projects includes a few large scale and
complex developments for which it anticipates that it may take
more than five years from the time of recording proved reserves
to the start of production. These specific projects represent
approximately 26% of the Group’s proved undeveloped reserves
and include the development of a giant field in Kazakhstan, deep
offshore developments in Angola, Nigeria and the United Kingdom
and development of oil sands in Canada. These projects are highly
complex to develop due to a combination of factors that include,
among others, the nature of the reservoir rock and fluid properties,
challenging operating environments and the size of the projects.
In addition, some of these projects are generally designed and
optimized for a given production capacity that controls the pace at
which the field is developed and the wells are drilled. At production
start-up, only a portion of the proved reserves are developed
in order to deliver sufficient production potential to meet capacity
constraints and contractual obligations. The remaining PUD’s
associated with the complete development plan will therefore
remain undeveloped for more than five years following project
approval and booking. Under these specific circumstances,
the Group believes that it is justified to report as proved reserves
the level of reserves used in connection with the approved project,
despite the fact that some of these PUDs may remain undeveloped
for more than five years. In addition, TOTAL has demonstrated in
recent years the Group’s ability to successfully develop and bring
into production similar large scale and complex projects, including
the development of deep-offshore fields in Angola, Nigeria, the
Republic of Congo, HP/HT fields in the United Kingdom, heavy oil
projects in Venezuela and LNG projects in Qatar, Yemen, Nigeria
and Indonesia.
Information shown in the following tables is presented in
accordance with the FASB’s ASC 932 and the requirements of
the SEC Regulation S-K (Items 1200 to 1208).
The tables provided below are presented by the following
geographic areas: Europe, Africa, the Americas, Middle East
and Asia (including CIS).
1.4. Estimated proved reserves of oil, bitumen and gas reserves
The following tables present, for oil, bitumen and gas reserves,
an estimate of the Group’s oil, bitumen and gas quantities by
geographic areas as of December 31, 2011, 2010 and 2009.
Quantities shown concern proved developed and undeveloped
reserves together with changes in quantities for 2011, 2010
and 2009.
The definitions used for proved, proved developed and proved
undeveloped oil and gas reserves are in accordance with the
revised Rule 4-10 of SEC Regulation S-X.
All references in the following tables to reserves or production
are to the Group’s entire share of such reserves or 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.
Registration Document 2011. TOTAL
277
10 Supplemental oil and gas information (unaudited)
Oil and gas information pursuant to FASB Accounting Standards Codification 932
1.4.1. Changes in oil, bitumen and gas reserves
(in million barrels of oil equivalent)
Consolidated subsidiaries
Proved developed and undeveloped reserves
Europe
Africa
Americas
Middle East
Asia
Total
Balance as of December 31, 2008 1,815 3,646 732 530 1,242 7,965
Revisions of previous estimates 46 76 14 (7) 25 154
Extensions, discoveries and other 18 53 284 76 - 431
Acquisitions of reserves in place 12 - 130 - - 142
Sales of reserves in place (2) (43) (14) - - (59)
Production for the year (224) (266) (56) (55) (101) (702)
Balance as of December 31, 2009 1,665 3,466 1,090 544 1,166 7,931
Revisions of previous estimates 92 200 82 (10) 1 365
Extensions, discoveries and other 182 - 18 96 30 326
Acquisitions of reserves in place 23 - 425 - 9 457
Sales of reserves in place (45) (26) (5) - (8) (84)
Production for the year (211) (269) (70) (56) (99) (705)
Balance as of December 31, 2010 1,706 3,371 1,540 574 1,099 8,290
Revisions of previous estimates 117 (61) (36) (68) (19) (67)
Extensions, discoveries and other 57 6 - - 588 651
Acquisitions of reserves in place 44 - 309 - 2 355
Sales of reserves in place - (65) - - - (65)
Production for the year (187) (237) (75) (56) (93) (648)
Balance as of December 31, 2011 1,737 3,014 1,738 450 1,577 8,516
Minority interest in proved developed and undeveloped reserves as of
December 31, 2009 26 98 - - - 124
December 31, 2010 26 100 - - - 126
December 31, 2011 - 98 - - - 98
(in million barrels of oil equivalent)
Equity affiliates
Proved developed and undeveloped reserves
Europe
Africa
Americas
Middle East
Asia
Total
Balance as of December 31, 2008 - 98 527 1,868 - 2,493
Revisions of previous estimates - 10 (7) 51 - 54
Extensions, discoveries and other - - - 136 - 136
Acquisitions of reserves in place - - - - - -
Sales of reserves in place - - - - - -
Production for the year - (8) (18) (105) - (131)
Balance as of December 31, 2009 - 100 502 1,950 - 2,552
Revisions of previous estimates - 14 4 (2) - 16
Extensions, discoveries and other - - - - - -
Acquisitions of reserves in place - - - - - -
Sales of reserves in place - - - - - -
Production for the year - (7) (20) (136) - (163)
Balance as of December 31, 2010 - 107 486 1,812 - 2,405
Revisions of previous estimates - (1) (8) (20) - (29)
Extensions, discoveries and other - - - - - -
Acquisitions of reserves in place - - - - 779 779
Sales of reserves in place - (24) (4) (11) - (39)
Production for the year - (4) (18) (152) (35) (209)
Balance as of December 31, 2011 - 78 456 1,629 744 2,907
278
TOTAL. Registration Document 2011
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Supplemental oil and gas information (unaudited) 10
(in million barrels of oil equivalent)
Consolidated subsidiaries and equity affiliates
Europe
Africa
Americas
Middle East
Asia
Total
As of December 31, 2009
Proved developed and undeveloped reserves 1,665 3,566 1,592 2,494 1,166 10,483
Consolidated subsidiaries 1,665 3,466 1,090 544 1,166 7,931
Equity affiliates - 100 502 1,950 - 2,552
Proved developed reserves 1,096 1,775 631 1,918 415 5,835
Consolidated subsidiaries 1,096 1,745 503 482 415 4,241
Equity affiliates - 30 128 1,436 - 1,594
Proved undeveloped reserves 569 1,791 961 576 751 4,648
Consolidated subsidiaries 569 1,721 587 62 751 3,690
Equity affiliates - 70 374 514 - 958
As of December 31, 2010
Proved developed and undeveloped reserves 1,706 3,478 2,026 2,386 1,099 10,695
Consolidated subsidiaries 1,706 3,371 1,540 574 1,099 8,290
Equity affiliates - 107 486 1,812 - 2,405
Proved developed reserves 962 1,692 638 2,055 361 5,708
Consolidated subsidiaries 962 1,666 505 427 361 3,921
Equity affiliates - 26 133 1,628 - 1,787
Proved undeveloped reserves 744 1,786 1,388 331 738 4,987
Consolidated subsidiaries 744 1,705 1,035 147 738 4,369
Equity affiliates - 81 353 184 - 618
As of December 31, 2011
Proved developed and undeveloped reserves 1,737 3,092 2,194 2,079 2,321 11,423
Consolidated subsidiaries 1,737 3,014 1,738 450 1,577 8,516
Equity affiliates - 78 456 1,629 744 2,907
Proved developed reserves 894 1,660 647 1,869 976 6,046
Consolidated subsidiaries 894 1,639 524 371 321 3,749
Equity affiliates - 21 123 1,498 655 2,297
Proved undeveloped reserves 843 1,432 1,547 210 1,345 5,377
Consolidated subsidiaries 843 1,375 1,214 79 1,256 4,767
Equity affiliates - 57 333 131 89 610
Registration Document 2011. TOTAL
279
10 Supplemental oil and gas information (unaudited)
Oil and gas information pursuant to FASB Accounting Standards Codification 932
1.4.2. Changes in oil reserves
The oil reserves for the years prior to 2009 include crude oil, natural gas liquids (condensates, LPG) and bitumen reserves.
Bitumen reserves as from 2009 are shown separately.
(in million barrels)
Consolidated subsidiaries
Proved developed and undeveloped reserves
Europe
Africa
Americas
Middle East
Asia
Total
Balance as of December 31, 2008 798 2,597 252 225 538 4,410
Revisions of previous estimates 34 92 (170) (4) 51 3
Extensions, discoveries and other 8 38 22 1 - 69
Acquisitions of reserves in place 1 - - - - 1
Sales of reserves in place - (44) (1) - - (45)
Production for the year (108) (223) (15) (34) (17) (397)
Balance as of December 31, 2009 733 2,460 88 188 572 4,041
Revisions of previous estimates 46 131 7 (2) - 182
Extensions, discoveries and other 146 - 2 82 4 234
Acquisitions of reserves in place 2 - - - - 2
Sales of reserves in place (37) (23) (2) - (7) (69)
Production for the year (98) (218) (16) (29) (15) (376)
Balance as of December 31, 2010 792 2,350 79 239 554 4,014
Revisions of previous estimates 49 (19) 9 (33) (24) (18)
Extensions, discoveries and other 17 6 - - 58 81
Acquisitions of reserves in place 42 - - - - 42
Sales of reserves in place - (57) - - - (57)
Production for the year (88) (185) (15) (25) (15) (328)
Balance as of December 31, 2011 812 2,095 73 181 573 3,734
Minority interest in proved developed and undeveloped reserves as of
December 31, 2009 12 88 - - - 100
December 31, 2010 11 89 - - - 100
December 31, 2011 - 88 - - - 88
(in million barrels)
Equity affiliates
Proved developed and undeveloped reserves
Europe
Africa
Americas
Middle East
Asia
Total
Balance as of December 31, 2008 - 58 508 719 - 1,285
Revisions of previous estimates - (14) (5) (15) - (34)
Extensions, discoveries and other - - - 136 - 136
Acquisitions of reserves in place - - - - - -
Sales of reserves in place - - - - - -
Production for the year - (7) (18) (79) - (104)
Balance as of December 31, 2009 - 37 485 761 - 1,283
Revisions of previous estimates - 4 4 3 - 11
Extensions, discoveries and other - - - - - -
Acquisitions of reserves in place - - - - - -
Sales of reserves in place - - - - - -
Production for the year - (7) (19) (84) - (110)
Balance as of December 31, 2010 - 34 470 680 - 1,184
Revisions of previous estimates - 2 (6) (12) - (16)
Extensions, discoveries and other - - - - - -
Acquisitions of reserves in place - - - - 51 51
Sales of reserves in place - (22) (4) (12) - (38)
Production for the year - (4) (17) (91) (3) (115)
Balance as of December 31, 2011 - 10 443 565 48 1,066
280
TOTAL. Registration Document 2011
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Supplemental oil and gas information (unaudited) 10
(in million barrels)
Consolidated subsidiaries and equity affiliates
Europe
Africa
Americas
Middle East
Asia
Total
As of December 31, 2009
Proved developed and undeveloped reserves 733 2,497 573 949 572 5,324
Consolidated subsidiaries 733 2,460 88 188 572 4,041
Equity affiliates - 37 485 761 - 1,283
Proved developed reserves 457 1,331 187 728 65 2,768
Consolidated subsidiaries 457 1,303 66 174 65 2,065
Equity affiliates - 28 121 554 - 703
Proved undeveloped reserves 276 1,166 386 221 507 2,556
Consolidated subsidiaries 276 1,157 22 14 507 1,976
Equity affiliates - 9 364 207 - 580
As of December 31, 2010
Proved developed and undeveloped reserves 792 2,384 549 919 554 5,198
Consolidated subsidiaries 792 2,350 79 239 554 4,014
Equity affiliates - 34 470 680 - 1,184
Proved developed reserves 394 1,250 180 662 58 2,544
Consolidated subsidiaries 394 1,226 53 151 58 1,882
Equity affiliates - 24 127 511 - 662
Proved undeveloped reserves 398 1,134 369 257 496 2,654
Consolidated subsidiaries 398 1,124 26 88 496 2,132
Equity affiliates - 10 343 169 - 522
As of December 31, 2011
Proved developed and undeveloped reserves 812 2,105 516 746 621 4,800
Consolidated subsidiaries 812 2,095 73 181 573 3,734
Equity affiliates - 10 443 565 48 1,066
Proved developed reserves 351 1,206 165 565 91 2,378
Consolidated subsidiaries 351 1,202 48 116 50 1,767
Equity affiliates - 4 117 449 41 611
Proved undeveloped reserves 461 899 351 181 530 2,422
Consolidated subsidiaries 461 893 25 65 523 1,967
Equity affiliates - 6 326 116 7 455
Registration Document 2011. TOTAL
281
10 Supplemental oil and gas information (unaudited)
Oil and gas information pursuant to FASB Accounting Standards Codification 932
1.4.3. Changes in bitumen reserves
Bitumen reserves as of December 31, 2008 and before are included in oil reserves presented in the table “Changes in oil reserves”.
(in million barrels)
Consolidated subsidiaries
Proved developed and undeveloped reserves
Europe
Africa
Americas
Middle East
Asia
Total
Balance as of December 31, 2008 - - - - - -
Revisions of previous estimates - - 176 - - 176
Extensions, discoveries and other - - 192 - - 192
Acquisitions of reserves in place - - - - - -
Sales of reserves in place - - - - - -
Production for the year - - (3) - - (3)
Balance as of December 31, 2009 - - 365 - - 365
Revisions of previous estimates - - 3 - - 3
Extensions, discoveries and other - - - - - -
Acquisitions of reserves in place - - 425 - - 425
Sales of reserves in place - - - - - -
Production for the year - - (4) - - (4)
Balance as of December 31, 2010 - - 789 - - 789
Revisions of previous estimates - - (109) - - (109)
Extensions, discoveries and other - - - - - -
Acquisitions of reserves in place - - 308 - - 308
Sales of reserves in place - - - - - -
Production for the year - - (4) - - (4)
Balance as of December 31, 2011 - - 984 - - 984
Proved developed reserves as of
December 31, 2009 - - 19 - - 19
December 31, 2010 - - 18 - - 18
December 31, 2011 - - 21 - - 21
Proved undeveloped reserves as of
December 31, 2009 - - 346 - - 346
December 31, 2010 - - 771 - - 771
December 31, 2011 - - 963 - - 963
There are no bitumen reserves for equity affiliates.
There are no minority interests for bitumen reserves.
282
TOTAL. Registration Document 2011
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Supplemental oil and gas information (unaudited) 10
1.4.4. Changes in gas reserves
(in billion cubic feet)
Consolidated subsidiaries
Proved developed and undeveloped reserves
Europe
Africa
Americas
Middle East
Asia
Total
Balance as of December 31, 2008 5,507 5,529 2,714 1,769 4,098 19,617
Revisions of previous estimates 73 (127) 25 (18) (165) (212)
Extensions, discoveries and other 55 61 382 399 - 897
Acquisitions of reserves in place 58 - 752 - - 810
Sales of reserves in place (13) - (64) - - (77)
Production for the year (633) (217) (212) (122) (467) (1,651)
Balance as of December 31, 2009 5,047 5,246 3,597 2,028 3,466 19,384
Revisions of previous estimates 271 346 415 (80) 15 967
Extensions, discoveries and other 193 - 88 70 138 489
Acquisitions of reserves in place 111 - - - 51 162
Sales of reserves in place (43) (20) (16) - (4) (83)
Production for the year (617) (258) (278) (151) (472) (1,776)
Balance as of December 31, 2010 4,962 5,314 3,806 1,867 3,194 19,143
Revisions of previous estimates 358 (216) 367 (180) 1 330
Extensions, discoveries and other 211 - - - 2,824 3,035
Acquisitions of reserves in place 11 - 7 - 13 31
Sales of reserves in place - (46) - - - (46)
Production for the year (528) (259) (317) (169) (445) (1,718)
Balance as of December 31, 2011 5,014 4,793 3,863 1,518 5,587 20,775
Minority interest in proved developed and undeveloped reserves as of
December 31, 2009 73 60 - - - 133
December 31, 2010 83 67 - - - 150
December 31, 2011 - 62 - - - 62
(in billion cubic feet)
Equity affiliates
Proved developed and undeveloped reserves
Europe
Africa
Americas
Middle East
Asia
Total
Balance as of December 31, 2008 - 215 110 6,276 - 6,601
Revisions of previous estimates - 127 (13) 363 - 477
Extensions, discoveries and other - - - - - -
Acquisitions of reserves in place - - - - - -
Sales of reserves in place - - - - - -
Production for the year - (1) (2) (141) - (144)
Balance as of December 31, 2009 - 341 95 6,498 - 6,934
Revisions of previous estimates - 50 (2) (52) - (4)
Extensions, discoveries and other - - - - - -
Acquisitions of reserves in place - - - - - -
Sales of reserves in place - - - - - -
Production for the year - (1) (2) (282) - (285)
Balance as of December 31, 2010 - 390 91 6,164 - 6,645
Revisions of previous estimates - (16) (10) (31) - (57)
Extensions, discoveries and other - - - - - -
Acquisitions of reserves in place - - - - 3,865 3,865
Sales of reserves in place - (10) - - - (10)
Production for the year - (1) (2) (331) (167) (501)
Balance as of December 31, 2011 - 363 79 5,802 3,698 9,942
Registration Document 2011. TOTAL
283
10 Supplemental oil and gas information (unaudited)
Oil and gas information pursuant to FASB Accounting Standards Codification 932
(in billion cubic feet)
Consolidated subsidiaries and equity affiliates
Europe
Africa
Americas
Middle East
Asia
Total
As of December 31, 2009
Proved developed and undeveloped reserves 5,047 5,587 3,692 8,526 3,466 26,318
Consolidated subsidiaries 5,047 5,246 3,597 2,028 3,466 19,384
Equity affiliates - 341 95 6,498 - 6,934
Proved developed reserves 3,463 2,272 2,388 6,606 2,059 16,788
Consolidated subsidiaries 3,463 2,261 2,343 1,773 2,059 11,899
Equity affiliates - 11 45 4,833 - 4,889
Proved undeveloped reserves 1,584 3,315 1,304 1,920 1,407 9,530
Consolidated subsidiaries 1,584 2,985 1,254 255 1,407 7,485
Equity affiliates - 330 50 1,665 - 2,045
As of December 31, 2010
Proved developed and undeveloped reserves 4,962 5,704 3,897 8,031 3,194 25,788
Consolidated subsidiaries 4,962 5,314 3,806 1,867 3,194 19,143
Equity affiliates - 390 91 6,164 - 6,645
Proved developed reserves 3,089 2,240 2,474 7,649 1,790 17,242
Consolidated subsidiaries 3,089 2,229 2,439 1,578 1,790 11,125
Equity affiliates - 11 35 6,071 - 6,117
Proved undeveloped reserves 1,873 3,464 1,423 382 1,404 8,546
Consolidated subsidiaries 1,873 3,085 1,367 289 1,404 8,018
Equity affiliates - 379 56 93 - 528
As of December 31, 2011
Proved developed and undeveloped reserves 5,014 5,156 3,942 7,320 9,285 30,717
Consolidated subsidiaries 5,014 4,793 3,863 1,518 5,587 20,775
Equity affiliates - 363 79 5,802 3,698 9,942
Proved developed reserves 2,943 2,308 2,600 7,170 4,854 19,875
Consolidated subsidiaries 2,943 2,216 2,567 1,450 1,594 10,770
Equity affiliates - 92 33 5,720 3,260 9,105
Proved undeveloped reserves 2,071 2,848 1,342 150 4,431 10,842
Consolidated subsidiaries 2,071 2,577 1,296 68 3,993 10,005
Equity affiliates - 271 46 82 438 837
284
TOTAL. Registration Document 2011
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Supplemental oil and gas information (unaudited) 10
1.5. Results of operations for oil and gas producing activities
The following tables do not include revenues and expenses related to oil and gas transportation activities and LNG liquefaction
and transportation activities.
(M€)
2009
Europe
Africa
Americas
Middle East
Asia
Total
Consolidated subsidiaries
Non-Group sales 2,499 1,994 583 859 1,926 7,861
Group sales 4,728 7,423 310 556 597 13,614
Total Revenues 7,227 9,417 893 1,415 2,523 21,475
Production costs (1,155) (1,122) (193) (204) (243) (2,917)
Exploration expenses (160) (265) (121) (81) (70) (697)
Depreciation, depletion and amortization
and valuation allowances (1,489) (1,471) (262) (314) (613) (4,149)
Other expenses (a) (261) (895) (181) (170) (56) (1,563)
Pre-tax income from producing activities 4,162 5,664 136 646 1,541 12,149
Income tax (2,948) (3,427) (103) (309) (747) (7,534)
Results of oil and gas producing activities 1,214 2,237 33 337 794 4,615
2010
Non-Group sales 2,839 2,639 628 1,038 2,540 9,684
Group sales 5,599 9,894 540 644 683 17,360
Total Revenues 8,438 12,533 1,168 1,682 3,223 27,044
Production costs (1,281) (1,187) (222) (259) (279) (3,228)
Exploration expenses (266) (275) (216) (8) (99) (864)
Depreciation, depletion and amortization
and valuation allowances (1,404) (1,848) (368) (264) (830) (4,714)
Other expenses (a) (299) (1,014) (218) (241) (72) (1,844)
Pre-tax income from producing activities 5,188 8,209 144 910 1,943 16,394
Income tax (3,237) (5,068) (83) (402) (950) (9,740)
Results of oil and gas producing activities 1,951 3,141 61 508 993 6,654
2011
Non-Group sales 3,116 3,188 776 1,159 3,201 11,440
Group sales 7,057 11,365 764 737 712 20,635
Total Revenues 10,173 14,553 1,540 1,896 3,913 32,075
Production costs (1,235) (1,179) (250) (286) (304) (3,254)
Exploration expenses (343) (323) (48) (11) (294) (1,019)
Depreciation, depletion and amortization
and valuation allowances (1,336) (1,845) (352) (278) (791) (4,602)
Other expenses (a) (307) (1,181) (274) (276) (95) (2,133)
Pre-tax income from producing activities 6,952 10,025 616 1,045 2,429 21,067
Income tax (5,059) (6,484) (293) (465) (1,302) (13,603)
Results of oil and gas producing activities 1,893 3,541 323 580 1,127 7,464
(a) Included production taxes and accretion expense as provided for by IAS 37 (€271 million in 2009, €326 million in 2010 and €338 million in 2011).
Registration Document 2011. TOTAL
285
10 Supplemental oil and gas information (unaudited)
Oil and gas information pursuant to FASB Accounting Standards Codification 932
(M€)
Equity affiliates
Europe
Africa
Americas
Middle East
Asia
Total
2009
Non-Group sales - 203 528 231 - 962
Group sales - - - 3,382 - 3,382
Total Revenues - 203 528 3,613 - 4,344
Production costs - (31) (41) (271) - (343)
Exploration expenses - - (17) - - (17)
Depreciation, depletion and amortization and valuation allowances - (42) (73) (247) - (362)
Other expenses - (9) (205) (2,800) - (3,014)
Pre-tax income from producing activities - 121 192 295 - 608
Income tax - (93) (74) (101) - (268)
Results of oil and gas producing activities - 28 118 194 - 340
2010
Non-Group sales - 148 120 596 - 864
Group sales - 3 565 4,646 - 5,214
Total Revenues - 151 685 5,242 - 6,078
Production costs - (44) (53) (195) (1) (293)
Exploration expenses - (7) (23) - - (30)
Depreciation, depletion and amortization and valuation allowances - (44) (89) (259) - (392)
Other expenses - - (268) (4,034) - (4,302)
Pre-tax income from producing activities - 56 252 754 (1) 1,061
Income tax - - (44) (142) - (186)
Results of oil and gas producing activities - 56 208 612 (1) 875
2011
Non-Group sales - 26 15 1,080 256 1,377
Group sales - - 831 6,804 - 7,635
Total Revenues - 26 846 7,884 256 9,012
Production costs - (7) (48) (250) (28) (333)
Exploration expenses - - - - (4) (4)
Depreciation, depletion and amortization and valuation allowances - (7) (44) (225) (109) (385)
Other expenses - - (550) (6,101) (36) (6,687)
Pre-tax income from producing activities - 12 204 1,308 79 1,603
Income tax - - (95) (285) (34) (414)
Results of oil and gas producing activities - 12 109 1,023 45 1,189
286
TOTAL. Registration Document 2011
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Supplemental oil and gas information (unaudited) 10
1.6. Cost incurred
The following tables set forth the costs incurred in the Group’s oil and gas property acquisition, exploration and development activities,
including both capitalized and expensed amounts. They do not include costs incurred related to oil and gas transportation and LNG
liquefaction and transportation activities.
(M€)
Consolidated subsidiaries
Europe
Africa
Americas
Middle East
Asia
Total
2009
Proved property acquisition 71 45 1,551 105 - 1,772
Unproved property acquisition 26 8 403 - 21 458
Exploration costs 284 475 222 87 123 1,191
Development costs (a) 1,658 3,288 618 250 1,852 7,666
Total cost incurred 2,039 3,816 2,794 442 1,996 11,087
2010
Proved property acquisition 162 137 26 139 21 485
Unproved property acquisition 5 124 1,186 8 619 1,942
Exploration costs 361 407 276 17 250 1,311
Development costs (a) 1,565 3,105 718 247 2,007 7,642
Total cost incurred 2,093 3,773 2,206 411 2,897 11,380
2011
Proved property acquisition 298 10 413 2 251 974
Unproved property acquisition 1 397 1,692 3 14 2,107
Exploration costs 505 384 239 17 417 1,562
Development costs (a) 2,352 3,895 1,329 329 2,823 10,728
Total cost incurred 3,156 4,686 3,673 351 3,505 15,371
(M€)
Equity affiliates
Europe
Africa
Americas
Middle East
Asia
Total
2009
Proved property acquisition - - - - - -
Unproved property acquisition - - - - - -
Exploration costs - - 22 3 - 25
Development costs (a) - 28 93 293 23 437
Total cost incurred - 28 115 296 23 462
2010
Proved property acquisition - - - - - -
Unproved property acquisition - - - - - -
Exploration costs - 4 30 4 - 38
Development costs (a) - 20 99 476 73 668
Total cost incurred - 24 129 480 73 706
2011
Proved property acquisition - - - - 2,691 2,691
Unproved property acquisition - - - - 1,116 1,116
Exploration costs - - 2 - - 2
Development costs (a) - 2 106 314 939 1,361
Total cost incurred - 2 108 314 4,746 5,170
(a) Including asset retirement costs capitalized during the year and any gains or losses recognized upon settlement of asset retirement obligation during the year.
Registration Document 2011. TOTAL
287
10 Supplemental oil and gas information (unaudited)
Oil and gas information pursuant to FASB Accounting Standards Codification 932
1.7. Capitalized costs related to oil and gas producing activities
The following tables do not include capitalized costs related to oil and gas transportation and LNG liquefaction and transportation activities.
(M€)
Consolidated subsidiaries
Europe
Africa
Americas
Middle East
Asia
Total
As of December 31, 2009
Proved properties 30,613 27,557 7,123 5,148 10,102 80,543
Unproved properties 337 1,138 839 30 555 2,899
Total capitalized costs 30,950 28,695 7,962 5,178 10,657 83,442
Accumulated depreciation, depletion and amortization (21,870) (13,510) (2,214) (3,325) (3,085) (44,004)
Net capitalized costs 9,080 15,185 5,748 1,853 7,572 39,438
As of December 31, 2010
Proved properties 31,735 32,494 7,588 5,715 12,750 90,282
Unproved properties 402 1,458 2,142 49 1,433 5,484
Total capitalized costs 32,137 33,952 9,730 5,764 14,183 95,766
Accumulated depreciation, depletion and amortization (23,006) (16,716) (2,302) (3,849) (4,092) (49,965)
Net capitalized costs 9,131 17,236 7,428 1,915 10,091 45,801
As of December 31, 2011
Proved properties 34,308 37,032 8,812 6,229 17,079 103,460
Unproved properties 460 1,962 4,179 62 911 7,574
Total capitalized costs 34,768 38,994 12,991 6,291 17,990 111,034
Accumulated depreciation, depletion and amortization (24,047) (18,642) (2,294) (4,274) (5,066) (54,323)
Net capitalized costs 10,721 20,352 10,697 2,017 12,924 56,711
(M€)
Equity affiliates
Europe
Africa
Americas
Middle East
Asia
Total
As of December 31, 2009
Proved properties - 610 726 2,404 - 3,740
Unproved properties - - 135 - 62 197
Total capitalized costs - 610 861 2,404 62 3,937
Accumulated depreciation, depletion and amortization - (387) (171) (1,723) - (2,281)
Net capitalized costs - 223 690 681 62 1,656
As of December 31, 2010
Proved properties - 639 887 3,110 - 4,636
Unproved properties - 25 168 - 138 331
Total capitalized costs - 664 1,055 3,110 138 4,967
Accumulated depreciation, depletion and amortization - (462) (307) (2,029) - (2,798)
Net capitalized costs - 202 748 1,081 138 2,169
As of December 31, 2011
Proved properties - - 731 3,496 3,973 8,200
Unproved properties - - - - 1,146 1,146
Total capitalized costs - - 731 3,496 5,119 9,346
Accumulated depreciation, depletion and amortization - - (96) (2,337) (213) (2,646)
Net capitalized costs - - 635 1,159 4,906 6,700
288
TOTAL. Registration Document 2011
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Supplemental oil and gas information (unaudited) 10
1.8. Standardized measure of discounted future net cash flows
(excluding transportation)
The standardized measure of discounted future net cash flows
relating to proved oil and gas reserve quantities was developed
as follows:
– future income taxes are computed by applying the year-end
statutory tax rate to future net cash flows after consideration
of permanent differences and future income tax credits; and
– estimates of proved reserves and the corresponding production
– future net cash flows are discounted at a standard discount
profiles are based on existing technical and economic conditions;
rate of 10 percent.
– the estimated future cash flows are determined based on prices
used in estimating the Group’s proved oil and gas reserves;
– the future cash flows incorporate estimated production costs
(including production taxes), future development costs and asset
retirement costs. All cost estimates are based on year-end
technical and economic conditions;
These principles applied are those required by ASC 932 and do
not reflect the expectations of real revenues from these reserves,
nor their present value; hence, they do not constitute criteria
for investment decisions. An estimate of the fair value of reserves
should also take into account, among other things, the recovery
of reserves not presently classified as proved, anticipated future
changes in prices and costs and a discount factor more
representative of the time value of money and the risks inherent
in reserves estimates.
(M€)
As of December 31, 2009
Europe
Africa
Americas
Middle East
Asia
Total
Consolidated subsidiaries
Future cash inflows 50,580 107,679 18,804 9,013 32,004 218,080
Future production costs (11,373) (23,253) (8,286) (2,831) (6,996) (52,739)
Future development costs (12,795) (21,375) (5,728) (698) (6,572) (47,168)
Future income taxes (17,126) (36,286) (1,293) (2,041) (5,325) (62,071)
Future net cash flows, after income taxes 9,286 26,765 3,497 3,443 13,111 56,102
Discount at 10% (3,939) (13,882) (2,696) (1,558) (8,225) (30,300)
Standardized measure of discounted future net cash flows 5,347 12,883 801 1,885 4,886 25,802
As of December 31, 2010
Future cash inflows 65,644 142,085 42,378 14,777 41,075 305,959
Future production costs (16,143) (29,479) (19,477) (4,110) (6,476) (75,685)
Future development costs (18,744) (25,587) (8,317) (3,788) (8,334) (64,770)
Future income taxes (20,571) (51,390) (3,217) (2,541) (7,281) (85,000)
Future net cash flows, after income taxes 10,186 35,629 11,367 4,338 18,984 80,504
Discount at 10% (5,182) (16,722) (8,667) (2,106) (11,794) (44,471)
Standardized measure of discounted future net cash flows 5,004 18,907 2,700 2,232 7,190 36,033
As of December 31, 2011
Future cash inflows 85,919 167,367 53,578 14,297 67,868 389,029
Future production costs (18,787) (31,741) (22,713) (3,962) (12,646) (89,849)
Future development costs (21,631) (22,776) (11,548) (3,110) (11,044) (70,109)
Future income taxes (28,075) (71,049) (4,361) (2,794) (12,963) (119,242)
Future net cash flows, after income taxes 17,426 41,801 14,956 4,431 31,215 109,829
Discount at 10% (9,426) (17,789) (12,298) (2,186) (20,717) (62,416)
Standardized measure of discounted future net cash flows 8,000 24,012 2,658 2,245 10,498 47,413
Minority interests in future net cash flows as of
(M€)
December 31, 2009 212 60 - - - 272
December 31, 2010 273 344 - - - 617
December 31, 2011 - 558 - - - 558
Registration Document 2011. TOTAL
289
10 Supplemental oil and gas information (unaudited)
Oil and gas information pursuant to FASB Accounting Standards Codification 932
(M€)
As of December 31, 2009
Europe
Africa
Americas
Middle East
Asia
Total
Equity affiliates
Future cash inflows - 1,432 16,750 48,486 - 66,668
Future production costs - (624) (6,993) (30,739) - (38,356)
Future development costs - (26) (1,924) (3,891) - (5,841)
Future income taxes - (245) (3,650) (1,843) - (5,738)
Future net cash flows, after income taxes - 537 4,183 12,013 - 16,733
Discount at 10% - (239) (2,816) (6,383) - (9,438)
Standardized measure of discounted future net cash flows - 298 1,367 5,630 - 7,295
As of December 31, 2010
Future cash inflows - 1,814 22,293 59,472 - 83,579
Future production costs - (765) (8,666) (40,085) - (49,516)
Future development costs - (26) (2,020) (3,006) - (5,052)
Future income taxes - (349) (5,503) (2,390) - (8,242)
Future net cash flows, after income taxes - 674 6,104 13,991 - 20,769
Discount at 10% - (203) (3,946) (7,386) - (11,535)
Standardized measure of discounted future net cash flows - 471 2,158 6,605 - 9,234
As of December 31, 2011
Future cash inflows - 210 29,887 64,977 7,116 102,190
Future production costs - (95) (17,393) (39,800) (2,683) (59,971)
Future development costs - - (1,838) (2,809) (1,297) (5,944)
Future income taxes - (29) (5,152) (3,942) (2,280) (11,403)
Future net cash flows, after income taxes - 86 5,504 18,426 856 24,872
Discount at 10% - (36) (3,652) (9,757) (196) (13,641)
Standardized measure of discounted future net cash flows - 50 1,852 8,669 660 11,231
290
TOTAL. Registration Document 2011
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Supplemental oil and gas information (unaudited) 10
1.9. Changes in the standardized measure of discounted future net cash flows
Consolidated subsidiaries
(M€)
2009
2010
2011
Beginning of year 15,986 25,802 36,033
Sales and transfers, net of production costs (17,266) (22,297) (27,026)
Net change in sales and transfer prices and in production costs and other expenses 35,738 30,390 44,315
Extensions, discoveries and improved recovery (267) 716 1,680
Changes in estimated future development costs (4,847) (7,245) (4,798)
Previously estimated development costs incurred during the year 7,552 7,896 9,519
Revisions of previous quantity estimates 164 5,523 1,288
Accretion of discount 1,599 2,580 3,603
Net change in income taxes (12,455) (6,773) (16,925)
Purchases of reserves in place 230 442 885
Sales of reserves in place (632) (1,001) (1,161)
End of year 25,802 36,033 47,413
Equity affiliates
(M€)
2009
2010
2011
Beginning of year 5,301 7,295 9,234
Sales and transfers, net of production costs (987) (1,583) (1,991)
Net change in sales and transfer prices and in production costs and other expenses 2,789 2,366 3,715
Extensions, discoveries and improved recovery 407 - -
Changes in estimated future development costs (88) 195 (383)
Previously estimated development costs incurred during the year 854 651 635
Revisions of previous quantity estimates (790) 308 (749)
Accretion of discount 530 730 923
Net change in income taxes (721) (728) (1,341)
Purchases of reserves in place - - 1,812
Sales of reserves in place - - (624)
End of year 7,295 9,234 11,231
Registration Document 2011. TOTAL
291
10 Supplemental oil and gas information (unaudited)
Other information
2. Other information
2.1. Net gas production, production prices and production costs
Europe
Africa
Americas
Middle East
Asia
Total
Consolidated subsidiaries
2009
Natural gas production available for sale (Mcf/d) (a) 1,643 480 545 297 1,224 4,189
Production prices (b)
Oil (€/b) 40.76 40.77 36.22 39.94 37.66 40.38
Bitumen (€/b) - - 23.17 - - 23.17
Natural gas (€/kcf) 4.81 1.33 1.56 0.72 4.47 3.70
Production costs per unit of production (€/boe) (c)
Total liquids and natural gas 5.30 4.35 3.59 3.86 2.52 4.30
Bitumen - - 25.45 - - 25.45
Europe
Africa
Americas
Middle East
Asia
Total
Equity affiliates
2009
Natural gas production available for sale (Mcf/d) (a) - - - 268 -
268
Production prices (b)
Oil (€/b) - 42.98 33.14 43.98 - 42.18
Bitumen (€/b) - - - - - -
Natural gas (€/kcf) - - - 3.53 - 3.53
Production costs per unit of production (€/boe) (c)
Total liquids and natural gas - 4.21 2.24 2.81 - 2.81
Bitumen - - - - - -
Europe
Africa
Americas
Middle East
Asia
Total
Consolidated subsidiaries
2010
Natural gas production available for sale (Mcf/d) (a) 1,603 608 732 375 1,234 4,552
Production prices (b)
Oil (€/b) 55.70 56.18 45.28 55.83 52.33 55.39
Bitumen (€/b) - - 33.19 - - 33.19
Natural gas (€/kcf) 5.17 1.55 1.83 0.63 5.67 3.94
Production costs per unit of production (€/boe) (c)
Total liquids and natural gas 6.23 4.53 3.29 4.82 2.93 4.72
Bitumen - - 17.49 - - 17.49
Europe
Africa
Americas
Middle East
Asia
Total
Equity affiliates
2010
Natural gas production available for sale (Mcf/d) (a) - - - 650 -
650
Production prices (b)
Oil (€/b) - 53.96 43.81 57.03 - 54.95
Bitumen (€/b) - - - - - -
Natural gas (€/kcf) - - - 2.30 - 2.30
Production costs per unit of production (€/boe) (c)
Total liquids and natural gas - 6.31 2.76 1.54 - 1.91
Bitumen - - - - - -
292
TOTAL. Registration Document 2011
Supplemental oil and gas information (unaudited) 10
Other information
Europe
Africa
Americas
Middle East
Asia
Total
Consolidated subsidiaries
2011
Natural gas production available for sale (Mcf/d) (a) 1,350 607 839 424 1,162 4,382
Production prices (b)
Oil (€/b) 74.24 74.72 55.13 73.73 68.76 73.34
Bitumen (€/b) - - 31.36 - - 31.36
Natural gas (€/kcf) 6.58 1.81 2.06 0.54 7.45 4.72
Production costs per unit of production (€/boe) (c)
Total liquids and natural gas 6.86 5.14 3.41 5.36 3.40 5.20
Bitumen - - 20.70 - - 20.70
Europe
Africa
Americas
Middle East
Asia
Total
Equity affiliates
2011
Natural gas production available for sale (Mcf/d) (a) - - - 891 457 1,348
Production prices (b)
Oil (€/b) - 66.21 61.15 77.07 30.75 73.61
Bitumen (€/b) - - - - - -
Natural gas (€/kcf) - - - 1.29 0.95 1.23
Production costs per unit of production (€/boe) (c)
Total liquids and natural gas - 1.99 2.75 1.66 0.79 1.61
Bitumen - - - - - -
(a) The reported volumes are different from those shown in the reserves table due to gas consumed in operations.
(b) The volumes used for calculation of the average sales prices are the ones sold from the Group’s own production.
(c) The volumes of liquids used for this computation are shown in the proved reserves tables of this report. The reported volumes for natural gas are different from those shown
in the reserves table due to gas consumed in operations.
Registration Document 2011. TOTAL
293
294
TOTAL. Registration Document 2011
TOTAL S.A. 11
TOTAL S.A.
The statutory Financial Statements were approved by the Board of Directors on February 9, 2012,
and have not been updated with subsequent events.
1. Statutory auditor’s report on regulated agreements and commitments 296
2. Statutory auditor’s report on the financial statements 298
3. Statutory Financial Statements of TOTAL S.A. as parent company 299
3.1. Statement of income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .299
3.2. Balance sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .300
3.3. Statement of cash flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .301
3.4. Statement of changes in shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .302
4. Notes to the Statutory Financial Statements 303
1) Accounting policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .303
2) Intangible assets and property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .303
3) Subsidiaries and affiliates: investments and loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .304
4) Other non-current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .305
5) Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .305
6) Shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .306
7) Contingency reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .307
8) Employee benefits obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .307
9) Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .308
10) Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .308
11) Translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .309
12) Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .309
13) Net operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .309
14) Operating depreciation, amortization and allowances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .309
15) Financial expenses and income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .310
16) Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .310
17) Other financial income and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .310
18) Non-recurring income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .310
19) Basis of taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .310
20) Foreign exchange and counterparty risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .310
21) Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .311
22) Average number of employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .311
23) Stock option, restricted share and free share plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .312
24) Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .317
5. Other financial information concerning the parent company 318
5.1. Subsidiaries and affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .318
5.2. Five-year financial data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .319
5.3. Allocation of 2011 income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .320
5.4. Statement of changes in share capital for the past five . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .320
6. Consolidated financial information for the last five years 321
6.1. Summary consolidated balance sheet for the last five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .321
6.2. Consolidated statement of income for the last five years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .321
Registration Document 2011. TOTAL
295
11 TOTAL S.A.
Statutory auditor’s report on regulated agreements and commitments
1. Statutory auditors’ report on regulated
agreements and commitments
This is a free translation into English of a report issued in French and is provided solely for the convenience of English-speaking readers. This report
should be read in conjunction and construed in accordance with French law and the relevant professional auditing standards applicable in France.
Shareholders’ meeting on the approval of the financial statements for the year ended December 31, 2011
To the Shareholders,
In our capacity as statutory auditors of your Company, we hereby present to you our report on the regulated agreements and commitments.
We are required to inform you, on the basis of the information provided to us, of the terms and conditions of those agreements and
commitments indicated to us or those that we could have found in the course of our engagement. We are not required to comment as to
whether they are beneficial or appropriate neither to ascertain whether any other agreements and commitments exist. It is your responsibility,
in accordance with Article R.225-31 of the French Commercial Law (Code de commerce), to evaluate the benefits resulting from these
agreements and commitments prior to their approval.
In addition, we are required, if applicable, in accordance with Article R.225-31 of the French Commercial Law, to inform you of the
agreements and commitments, which were approved during previous years and which were applicable during the period.
We performed the procedures we considered necessary in accordance with professional guidance issued by the national institute of auditors
(Compagnie nationale des commissaires aux comptes), relating to this engagement. Our work consisted in verifying that the information
provided to us is in agreement with the underlying documentation from which it was extracted.
1. Agreements and commitments to be approved by the Shareholders’ meeting
Agreements and commitments approved in 2011
We have not been advised of agreements and commitments to be approved by the Shareholders’ meeting in accordance with Article L.225-38
of the French Commercial Law (Code de commerce).
Agreements and commitments approved in 2012
We have been advised that the following commitments, authorized in 2012, which have been previously authorized by your Board of Directors
held on February 9, 2012 and which have to be approved again by the Shareholders’ meeting in accordance with paragraph 4 of Article
L.225-42-1 of the French Commercial Law (Code de commerce), due to the renewal of the mandate of Mr Christophe de Margerie,
Chairman and Chief Executive Officer. This approval is subject to the renewal of his Board member mandate by the Shareholders’ meeting,
to the renewal of his mandates of Chairman and Chief Executive Officer by the Board of Directors and to the fact that commitments subject
to performance conditions and concerning the pension plan, as detailed below, remain the same.
a) Agreements concerning the pension plan
– Director affected by the agreement or commitment:
Mr Christophe de Margerie, Chairman and Chief Executive Officer.
– Purpose of the agreement or commitment:
The Chairman and Chief Executive Officer is entitled to a retirement benefit calculated pursuant to the same formula used for all
employees of TOTAL S.A.
– Terms and conditions of the agreement or commitment:
- Retirement benefit:
The Chairman and Chief Executive Officer is also entitled to retirement benefits equal to those available to eligible members of the Group
under the French National Collective Bargaining Agreement for the Petroleum. This benefit amounts to 25% of the annual compensation
(including fixed and variable portions) of the twelve-month period preceding the retirement of the Chairman and Chief Executive Officer.
The payment of this benefit is subject to performance conditions. These performance conditions are deemed to be met if at least two of the
three following criteria are satisfied:
- The average ROE (return on equity) over the three years immediately preceding the year in which the officer retires is at least 12%;
- The average ROACE (return on average capital employed) over the three years immediately preceding the year in which the officer
retires is at least 10%;
- The Company’s oil and gas production growth over the three years immediately preceding the year in which the officer retires is
greater than or equal to the average production growth of the four following companies: ExxonMobil, Shell, BP, and Chevron.
- Supplementary pension plan:
This supplementary pension is applicable to the Chairman and Chief Executive Officer and employees of the Group whose annual
compensation is greater than the annual social security threshold multiplied by eight. There are no French legal or collective bargaining
provisions that apply to remuneration above this social security ceiling.
296
TOTAL. Registration Document 2011
Statutory auditor’s report on regulated agreements and commitments
TOTAL S.A. 11
To be eligible for this supplementary pension plan, financed and managed by TOTAL SA, participants must meet specific age and length
of service criteria. They must also still be employed by the Company upon retirement, unless they retire due to disability or had taken early
retirement at the Group’s initiative after the age of 55.
The plan provides participants with a pension equal to the sum of 1.8% of the portion of the reference compensation between eight
and forty times the annual ceiling for calculating French social security contributions, and 1% of the reference compensation between forty
and sixty times the annual ceiling for calculating French social security contributions, which is multiplied by the number of years of service
(up to twenty years).This pension is indexed to the French Association for Complementary Pensions Schemes (ARRCO) index.
The sum of the supplementary pension plan benefits and external pension plan benefits may not exceed 45% of the compensation used
as the calculation basis. In the event this percentage is exceeded, the supplementary pension is reduced accordingly.
For the Chairman and Chief Executive Officer, the Group’s pension obligations are, as of December 31, 2011, the equivalent of an annual
pension of 18.01% of his 2011 compensation.
b) Agreement in case of termination of the Chairman and Chief Executive Officer’s employment
or in case his term of office is not renewed
– Director affected by the agreement or commitment:
Mr Christophe de Margerie, Chairman and Chief Executive Officer.
– Purpose of the agreement or commitment:
If the Chairman and Chief Executive Officer’s employment is terminated or if his term of office is not renewed, he is eligible for severance benefits.
– Terms and conditions of the agreement or commitment:
This severance benefit is equal to two times an individual’s annual pay.
The calculation will be based on the gross compensation (including both fixed and variable) paid in the twelve-month period preceding the
termination or the no renewal of the Chief Executive Officer’s term.
The severance benefits that may be paid upon a change of control or a change of strategy of the Company are cancelled in the case of
gross negligence or willful misconduct or if the Chairman and Chief Executive Officer leaves the Company of his own volition, accepts new
responsibilities within the Group, or may claim full retirement benefits within a short time period.
The payment of this severance benefit is subject to performance conditions. These performance conditions are deemed to be met if at least
two of the three following criteria are satisfied:
- The average ROE (return on equity) over the three years immediately preceding the year in which the Chairman and Chief Executive
Officer retires is at least 12%;
- The average ROACE (return on average capital employed) over the three years immediately preceding the year in which the
Chairman and Chief Executive Officer retires is at least 10%;
- The Company’s oil and gas production growth over the three years immediately preceding the year in which the Chairman and
Chief Executive Officer retires is greater than or equal to the average production growth of the four following companies:
ExxonMobil, Shell, BP, and Chevron.
2. Agreements and commitments already approved by the Shareholders’ meeting
a) Applicable during the period
In accordance with Article R.225-30 of the French Commercial Law (Code de commerce), we have been informed of the following
agreement, which was already approved by the Shareholders’ meeting, and which was applicable during the period.
Engagement concerning specific resources made available to the Honorary Chairman
– Director affected by the agreement or commitment
Mr Thierry Desmarest, director and Honorary Chairman.
– Purpose of the agreement or commitment
Company resources made available for use by the Honorary Chairman.
– Terms and conditions of the agreement or commitment
In consideration of his responsibilities to represent the Group, the following company resources are made available to the Honorary
Chairman: an office, an administrative assistant, and a company vehicle with a driver.
b) Not applicable during the period
In addition, we have been informed of the continuance of the commitments, described in details above, regarding the retirement benefit,
the supplementary pension plan and, under certain conditions, the severance benefit if Mr Christophe de Margerie’s contract is terminated
or if his term of office is not renewed, already approved by the Shareholders’ meeting, and which were not applicable during the period.
Paris, La Défense March 23, 2012
French original signed by
KPMG Audit
A division of KPMG S.A.
Jay Nirsimloo
The statutory auditors
ERNST & YOUNG Audit
Pascal Macioce
Laurent Vitse
Registration Document 2011. TOTAL
297
11 TOTAL S.A.
Statutory auditor’s report on the financial statements
2. Statutory auditor’s report on the financial statements
This is a free translation into English of the statutory auditors’ report on the financial statements issued in French and it is provided solely for the
convenience of English speaking users.
The statutory auditors’ report includes information specifically required by French law in such reports, whether modified or not. This information
is presented below the audit opinion on the financial statements and includes an explanatory paragraph discussing the auditors’ assessments
of certain significant accounting and auditing matters. These assessments were considered for the purpose of issuing an audit opinion on the
financial statements taken as a whole and not to provide separate assurance on individual account balances, transactions, or disclosures.
This report also includes information relating to the specific verification of information given in the management report and in the documents
addressed to shareholders.
This report should be read in conjunction with, and construed in accordance with, French law and professional auditing standards applicable
in France.
TOTAL S.A.
Year ended December 31, 2011
To the Shareholders,
In compliance with the assignment entrusted to us by your Shareholder’s meeting, we hereby report to you, for the year ended
December 31, 2011, on:
– the audit of the accompanying financial statements of TOTAL S.A.;
– the justification of our assessments;
– the specific verifications and information required by law.
These financial statements have been approved by the Board of Directors. Our role is to express an opinion on these financial statements
based on our audit.
I. Opinion on the financial statements
We conducted our audit in accordance with professional standards applicable in France; those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves
performing procedures, using sampling techniques or other methods of selection, to obtain audit evidence about the amounts and
disclosures in the financial statements. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made, as well as the overall presentation of the financial statements. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the financial statements give a true and fair view of the assets and liabilities and of the financial position of the Company as
at December 31, 2011 and of the results of its operations for the year then ended in accordance with French accounting principles.
II. Justification of our assessments
In accordance with the requirements of article L. 823-9 of the French Commercial Law (Code de commerce) relating to the justification of our
assessments, we bring to your attention the following matter:
We assessed the approaches used by your company to value investments in subsidiaries and affiliates as described in Note 1 to the financial
statements, based on the information available to date and performed tests to verify the application of those methods. Within the framework
of our assessments, we also verified the reasonable nature of the estimates derived from these methods.
These assessments were made as part of our audit of the financial statements, taken as a whole, and therefore contributed to the opinion
we formed which is expressed in the first part of this report.
III. Specific verification and information
We have also performed, in accordance with professional standards applicable in France, the specific verifications required by French law.
We have no matters to report as to the fair presentation and the consistency with the financial statements of the information given in the
management report of the Board of Directors, and in the documents addressed to shareholders with respect to the financial position and
the financial statements.
Concerning the information given in accordance with the requirements of article L. 225-102-1 of the French Commercial Law (Code de
commerce) relating to remunerations and benefits received by the directors and any other commitments made in their favour, we have
verified its consistency with the financial statements or with the underlying information used to prepare these financial statements and,
where applicable, with the information obtained by your company from companies controlling your company or controlled by it. Based
on this work, we attest the accuracy and fair presentation of this information.
In accordance with French law, we have verified that the required information concerning the purchase of investments and controlling
interests and the identity of the shareholders and holders of the voting rights has been properly disclosed in the management report.
Paris-La Défense, March 23, 2012
French original signed by
KPMG Audit
A division of KPMG S.A.
Jay Nirsimloo
298
TOTAL. Registration Document 2011
The statutory auditors
ERNST & YOUNG Audit
Pascal Macioce
Laurent Vitse
Statutory Financial Statements of TOTAL S.A. as parent company
TOTAL S.A. 11
3. Statutory Financial Statements of TOTAL S.A.
as parent company
3.1. Statement of income
For the year ended
(K€) 2011 2010 2009
Sales (note 12) 14,246,392 10,307,170 8,222,687
Net operating expenses (note 13) (10,907,658) (8,179,634) (6,758,269)
Operating depreciation, amortization and allowances (note 14) (260,650) (141,174) (129,113)
Operating income 3,078,084 1,986,362 1,335,305
Financial expenses and income (note 15) (428,098) (448,084) (449,419)
Dividends (note 16) 10,599,281 6,497,082 5,777,717
Net depletion (839,231) (489,911) (236,234)
Other financial expenses and income (note 17) (8,656) (7,945) 2,328
Financial income 9,323,296 5,551,142 5,094,392
Current income 12,401,380 7,537,504 6,429,697
Gains (Losses) on sales of marketable securities and loans 435,924 (34,976) 639,371
Gains (Losses) on sales of fixed assets 43 239 -
Non-recurring items 31,866 (75,259) (13,802)
Non-recurring income (note 18) 467,833 (109,996) 625,569
Employee profit-sharing plan (52,073) (54,613) (36,973)
Taxes (3,050,856) (1,532,807) (1,384,612)
Net income 9,766,284 5,840,088 5,633,681
Registration Document 2011. TOTAL
299
11 TOTAL S.A.
Statutory Financial Statements of TOTAL S.A. as parent company
3.2. Balance sheet
As of December 31
(M€)
ASSETS 2011 2010 2009
Non-current assets
Intangible assets (note 2) 864,554 817,999 775,519
Depreciation and valuation allowance (310,388) (245,031) (208,540)
Intangible assets, net 554,166 572,968 566,979
Property, plant and equipment (note 2) 585,783 535,475 511,070
Depreciation and valuation allowance (406,249) (361,610) (327,094)
Property, plant and equipment, net 179,534 173,865 183,976
Subsidiaries and affiliates: investments and loans (note 3) 87,744,158 84,934,902 78,874,175
Depreciation and valuation allowance (574,296) (565,561) (545,634)
Other non-current assets (note 4) 63,008 52,535 59,547
Investments and other non-current assets, net 87,232,870 84,421,876 78,388,088
Total non-current assets 87,966,570 85,168,709 79,139,043
Current assets
Inventories 9,137 4,832 2,293
Operating receivables (note 5) 3,495,789 2,141,796 2,062,978
Marketable securities 363,533 476,610 596,076
Cash/cash equivalents and short-term deposits 38,047 141,131 225,209
Total current assets 3,906,506 2,764,369 2,886,556
Prepaid expenses 15,649 5,782 3,532
Translation adjustments (note 11) 4 12 212,588
Total assets 91,888,729 87,938,872 82,241,719
As of December 31
(M€)
LIABILITIES & SHAREHOLDERS’ EQUITY 2011 2010 2009
Shareholders’ equity (note 6)
Share capital 5,909,418 5,874,102 5,871,057
Paid-in surplus 27,655,005 27,208,151 27,170,640
Reserves (note 6B) 3,986,875 3,986,382 3,975,314
Retained earnings 4,916,078 4,425,753 4,114,277
Net income 9,766,284 5,840,088 5,633,681
Interim dividends (4,058,442) (2,664,730) (2,660,016)
Total shareholders’ equity 48,175,218 44,669,746 44,104,953
Contingency reserves (notes 7 and 8) 4,736,302 3,771,567 3,199,872
Debts
Long-term loans (note 9) 28,296,453 15,929,648 14,614,076
Short-term loans (note 9) 6,541,883 21,715,905 18,651,431
Operating liabilities (note 10) 3,839,704 1,790,981 1,671,306
Total debts 38,678,040 39,436,534 34,936,813
Accrued income 25 0 - -
Translation adjustments (note 11) 298,919 61,025 81
Total liabilities and Shareholders’ equity 91,888,729 87,938,872 82,241,719
300
TOTAL. Registration Document 2011
Statutory Financial Statements of TOTAL S.A. as parent company
TOTAL S.A. 11
3.3. Statement of cash flow
For the year ended
(M€) 2011 2010 2009
Cash flow from operating activities
Net income 9,766 5,840 5,634
Depreciation, depletion and amortization 110 102 89
Accrued expenses of investments 7 24 -
Other provisions 965 571 274
Funds generated from operations 10,848 6,537 5,997
(Gains) Losses on disposal of assets (436) 35 (639)
(Increase) Decrease in working capital (789) (266) (299)
Other, net (4) 126 31
Cash flow from operating activities 9,619 6,432 5,090
Cash flow used in investing activities
Purchase of property, plant and equipment and intangible assets (82) (64) (538)
Purchase of investments and long-term loans (4,361) (6,317) (1,401)
Investments (4,443) (6,381) (1,939)
Proceeds from disposal of marketable securities and loans 2,419 782 955
Total divestitures 2,419 782 955
Cash flow used in investing activities (2,024) (5,599) (984)
Cash flow from financing activities
Capital increase 482 41 32
Share buybacks - - -
Balance of cash dividends paid (2,685) (2,662) (2,655)
Cash interim dividends paid (2,684) (2,665) (2,660)
Repayment of long-term debt - (63) (245)
Increase (Decrease) in short-term borrowings and bank overdrafts (2,811) 4,432 1,220
Cash flow from financing activities (7,698) (917) (4,308)
Increase (Decrease) in cash and cash equivalents (103) (84) (202)
Cash and cash equivalents at beginning of year 141 225 427
Cash and cash equivalents at year-end 38 141 225
Registration Document 2011. TOTAL
301
11 TOTAL S.A.
Statutory Financial Statements of TOTAL S.A. as parent company
3.4. Statement of changes in shareholders’ equity
(M€)
Common shares issued
Number
Amount
Issue
premiums
General
reserves
and retained
earnings
Revaluation
reserve
Total
As of January 1 2009 2,371,808,074 5,930 28,283 10,708 39 44,960
Balance of cash dividends paid (a) - - - (2,655) - (2,655)
Net income 2009 - - - 5,634 - 5,634
Cash interim dividends paid for 2009 (b) - - - (2,660) - (2,660)
Capital decrease (24,800,000) (62) (1,160) - - (1,222)
Exercise of Elf Aquitaine share subscription options
covered by the exchange guarantee 480,030 1 17 - - 18
Issuance of common shares 934,780 2 30 32
Changes in revaluation differences - - - - (2) (2)
As of December 31 2009 2,348,422,884 5,871 27,170 11,027 37 44,105
Balance of cash dividends paid (c) - - - (2,662) - (2,662)
Net income 2010 - - - 5,840 - 5,840
Cash interim dividends paid for 2010 (d) - - - (2,665) - (2,665)
Capital decrease - - - - - -
Issuance of common shares 1,218,047 3 38 - - 41
Changes in revaluation differences - - - 11 11
As of December 31 2010 2,349,640,931 5,874 27,208 11,540 48 44,670
Balance of cash dividends paid (e) - - - (2,685) - (2,685)
Net income 2011 - - - 9,766 - 9,766
Cash interim dividends paid for 2011 (f) (g) - - - (4,058) (4,058)
Issuance of common shares 5,223,665 13 160 173
Capital increase reserved for Group employees 8,902,717 22 288 - - 310
Changes in revaluation differences - - - - - -
Expenses related to the capital increase reserved
for employees - - (1) - - (1)
As of December 31 2011 2,363,767,313 5,909 27,655 14,563 48 48,175
(a) Balance of the 2008 dividend paid in 2009: €2,655 million (€1.14 per share).
(b) Interim dividend paid in 2009: €2,660 million (€1.14 per share).
(c) Balance of the 2009 dividend paid in 2010: €2,662 million (€1.14 per share).
(d) Interim dividend paid in 2010: €2,665 million (€1.14 per share).
(e) Balance of the 2010 dividend paid in 2011: €2,685 million (€1.14 per share).
(f)
(g) Interim dividend not paid in 2011 for the 3rd quarter: €1,374 million (€0.57 per share).
Interim dividend paid in 2011 for the 1st and 2nd quarter: €2,684 million (€0.57 per share per dividend).
302
TOTAL. Registration Document 2011
Notes to the Statutory Financial Statements
TOTAL S.A. 11
4. Notes to the Statutory Financial Statements
1) Accounting policies
The 2011 financial statements have been prepared in accordance with
French Generally Accepted Accounting Principles (“French GAAP”).
Property, plant and equipment
Property, plant and equipment are carried at cost with the exception
of assets that were acquired before 1976 for which the basis has
been revalued pursuant to French regulations. They are depreciated
by the straight-line method over their estimated useful life, as follows:
Buildings 20 - 30 years
Furniture and fixtures 5 - 10 years
Transportation equipment 2 - 5 years
Office equipment and furniture 5 - 10 years
Computer equipment 3 - 5 years
Investments and loans to consolidated
subsidiaries and equity affiliates
Investments in consolidated subsidiaries and equity affiliates
are accounted for at the acquisition cost, or the appraised value
for investments affected by the 1976 legal revaluation.
Loans to consolidated subsidiaries and equity affiliates are stated
at their nominal value.
In the Upstream segment, in the absence of a development
decision, allowances are recorded against investments and loans
for an amount corresponding to the exploration costs incurred.
When the existence of proved reserves is established, the value
of the investments and loans is limited to the subsidiary expected
pay-back evaluated at year-end.
For other segments, allowances for impairment in value are
calculated by reference to the Company’s equity in the underlying
net assets, the fair value and usefulness of the investment.
Inventories
Inventories are valued at either the historical cost or the market
value, whichever is lower. Cost for crude oil and refined product
inventories is determined according to the First-In, First-Out (FIFO)
method.
Receivables and payables
Receivables and payables are stated at nominal value. Allowances
for doubtful debts are recorded when the actual value is inferior to
the book value.
Foreign currency transactions
Receivables and payables denominated in foreign currencies are
translated into euros at the year-end exchange rate. Translation
differences for non-hedged items are recorded under “Translation
adjustment” on the assets or liabilities side of the balance sheet.
Unrealized exchange losses are recorded as provisions.
Translation differences related to other foreign receivables and
payables are recorded in the statement of income and offset by
unrealized gains or losses from off-balance sheet hedging.
Financial instruments
TOTAL S.A. uses financial instruments for hedging purposes only
in order to manage its exposure to changes in interest rates and
foreign exchange rates.
As part of this policy, the Company enters into interest rate swap
agreements and forward transactions. The difference between
interest to be paid and interest to be received on these swaps or
premiums and discounts on these forward transactions is
recognized as interest expense or interest income on a prorated
basis, over the life of the instruments.
2) Intangible assets and property, plant and equipment
As of December 31
(M€)
2011
Cost
Depreciation, depletion
and amortization
and valuation allowances
2010
Net
Net
Headquarters (a) 375 (245) 130 141
Branch (A.D.G.I.L) (b) 489 (65) 424 432
Total intangible assets 864 (310) 554 573
Land 36 - 36 34
Buildings 93 (50) 43 46
Other 457 (356) 101 94
Total property, plant and equipment 586 (406) 180 174
Total (c) 1,450 (716) 734 747
(a) Including ongoing DD&A for €13 million in 2011 and €15 million in 2010, software for a gross amount of €206 million in 2011 and €184 million in 2010, and other for a gross amount
of €156 million in 2011 and €146 million in 2010.
(b) The subsidiaries’ depreciation, depletion and amortization related to commercial activity are accounted for as purchase cost of goods sold.
(c) As of December 31, 2010, aggregate cost, depreciation and valuation allowance amounted respectively to €1,354 million and €607 million.
Registration Document 2011. TOTAL
303
11 TOTAL S.A.
Notes to the Statutory Financial Statements
3) Subsidiaries and affiliates: investments and loans
A) Changes in investments and loans
As of December 31
(M€)
Gross amount
at beginning
of year
Increases
Decreases
Monetary Non monetary
Monetary Non monetary
Translation
adjustment
Gross amount
at year-end
2011
Investments 77,278 2,371 2 (1,685) - - 77,966
Receivables (a) 7,657 2,157 - (267) (9) 240 9,778
Total 84,935 4,528 2 (1,952) (9) 240 87,744
Analysis by segment
Upstream 6,775 931 2 (1,906) (7) 3 5,798
Downstream 3,490 1,521 - (16) - - 4,995
Chemicals 13,394 22 - - - - 13,416
Financial activities 61,276 2,054 - (30) (2) 237 63,535
Total 84,935 4,528 2 (1,952) (9) 240 87,744
(a) Changes in receivables mainly result from flows of funds with Total Finance and Total Treasury.
B) Allowances for investments and loans
As of December 31
(M€)
2011
Cost
Valuation
allowance
Net
2010
Net
Investments 77,966 (465) 77,501 76,822
Receivables (a) (b) 9,778 (109) 9,669 7,547
Total (c) 87,744 (574) 87,170 84,369
Analysis by segment
Upstream 5,798 (303) 5,495 6,463
Downstream 4,995 (132) 4,863 3,221
Chemicals 13,416 (118) 13,298 13,279
Financial activities 63,535 (21) 63,514 61,406
Total 87,744 (574) 87,170 84,369
(a) As of December 31, 2011, the gross amount included €9,254 million related to affiliates.
(b) As of December 31, 2011, the net amount was split into €2,250 million, due in 12 months or less, and €7,419 million, due in 12 months or more.
(c) As of December 31, 2010, aggregate cost and valuation allowance amounted respectively to €84,935 million and €566 million.
304
TOTAL. Registration Document 2011
Notes to the Statutory Financial Statements
TOTAL S.A. 11
4) Other non-current assets
A) Changes in other non-current assets
As of December 31
(M€)
Gross amount
at beginning
of year
Increases
Decreases
Monetary Non monetary
Monetary Non monetary
Translation
adjustment
Gross amount
at year-end
2011
Investment portfolio 4 - - - - - 4
Other non-current assets 34 42 - (32) - - 44
Deposits and guarantees 15 - - - - - 15
Total 53 42 - (32) - - 63
B) Allowances for non-current assets
As of December 31
(M€)
2011
Cost
Valuation
allowance
Net
2010
Net
Investment portfolio 4 - 4 4
Other non-current assets(a) 44 - 44 34
Deposits and guarantees 15 - 15 15
Total (b) 63 - 63 53
(a) As of December 31, 2011, net amount due in 12 months or more.
(b) As of December 31, 2010, aggregate cost and net amounts were equivalent.
5) Accounts receivable
As of December 31,
(M€)
2011
Cost
Valuation
allowance
Net
2010
Net
Accounts and notes receivable 1,285 - 1,285 1,139
Other operating receivables 2,211 - 2,211 1,003
Total (a) (b) 3,496 - 3,496 2,142
(a) Including €2,680 million related to affiliates as of December 31, 2011.
(b) Due in 12 months or less.
Registration Document 2011. TOTAL
305
11 TOTAL S.A.
Notes to the Statutory Financial Statements
6) Shareholders’ equity
A) Common shares
Share capital transactions are detailed as follows:
As of January 1, 2009 2,371,808,074
Shares issued in connection with: Exercise of TOTAL share subscription options 934,780
Exchange guarantee offered to the beneficiaries of Elf Aquitaine share subscription options 480,030
Cancellation of shares (a) (24,800,000)
As of January 1, 2010 2,348,422,884
Shares issued in connection with: Exercise of TOTAL share subscription options 1,218,047
As of January 1, 2011 2,349,640,931
Shares issued in connection with: Capital increase reserved for employees 8,902,717
Exercise of TOTAL share subscription options 5,223,665
As of December 31, 2011(b) 2,363,767,313
(a) Decided by the Board of Directors on July 30, 2009.
(b) Including 109,554,173 treasury shares deducted from consolidated shareholders’ equity.
Capital increase reserved for Group employees
At the shareholders’ meeting held on May 21, 2010, the
shareholders delegated to the Board of Directors the authority
to increase the share capital of the Company in one or more
transactions and within a maximum period of 26 months from the
date of the meeting, by an amount not exceeding 1.5% of the
share capital outstanding on the date of the meeting of the Board
of Directors at which a decision to proceed with an issuance is
made reserving subscriptions for such issuance to the Group
employees participating in a company savings plan. It is being
specified that the amount of any such capital increase reserved for
Group employees was counted against the aggregate maximum
nominal amount of share capital increases authorized by the
shareholders’ meeting held on May 21, 2010 for issuing new
ordinary shares or other securities granting immediate or future
access to the Company’s share capital with preferential
subscription rights (€2.5 billion in nominal value).
Pursuant to this delegation of authorization, the Board of Directors,
during its October 28, 2010 meeting, decided to proceed with a
capital increase reserved for employees in 2011 within the limit
of 12 million shares with dividend rights as of January 1, 2010
and delegated to the Chairman and Chief Executive Officer all
powers to determine the opening and closing of the subscription
period and the subscription price.
On March 14, 2011, the Chairman and Chief Executive Officer
decided that the subscription period would be set from
March 16, 2011 to April 1, 2011 included, and acknowledged that
the subscription price per ordinary share would be set at €34.80.
With respect to this capital increase, 8,902,717 TOTAL shares were
subscribed and created on April 28, 2011.
Share cancellation
Pursuant to the authorization granted by the shareholders’ meeting
held on May 11, 2007 authorizing reduction of capital by
cancellation of shares held by the Company within the limit of 10%
of the outstanding capital every 24 months, the Board of Directors
decided on July 30, 2009 to cancel 24,800,000 shares acquired
in 2008 at an average price of €49.28 per share.
306
TOTAL. Registration Document 2011
Treasury shares
(TOTAL shares held by TOTAL S.A.)
As of December 31, 2011, TOTAL S.A. holds 9,222,905 of its own
shares, representing 0.39% of its share capital, detailed as follows:
– 6,712,528 shares allocated to TOTAL share grant plans for
Group employees;
– 2,510,377 shares intended to be allocated to new TOTAL share
purchase option plans or to new share grant plans.
These shares are deducted from the consolidated shareholders’
equity.
As of December 31, 2010, TOTAL S.A. held 12,156,411 of its own
shares, representing 0.52% of its share capital, detailed as
follows:
– 6,012,460 shares allocated to TOTAL share grant plans for
Group employees;
– 6,143,951 shares intended to be allocated to new TOTAL share
purchase option plans or to new share grant plans.
These shares were deducted from the consolidated shareholders’
equity.
As of December 31, 2009, TOTAL S.A. held 15,075,922 of its own
shares, representing 0.64% of its share capital, detailed as follows:
– 6,017,499 shares allocated to covering TOTAL share purchase
option plans for Group employees and executive officers;
– 5,799,400 shares allocated to TOTAL share grant plans for
Group employees; and
– 3,259,023 shares intended to be allocated to new TOTAL share
purchase option plans or to new share grant plans.
These shares were deducted from the consolidated shareholders’
equity.
Notes to the Statutory Financial Statements
TOTAL S.A. 11
TOTAL shares held by the Group subsidiaries
As of December 31, 2011, 2010 and 2009, TOTAL S.A. held
indirectly through its subsidiaries 100,331,268 of its own shares,
representing 4.24% of its share capital as of December 31, 2011,
4.27% of its share capital as of December 31, 2010 and 4.27% of
its share capital as of December 31, 2009 detailed as follows:
– 2,023,672 shares held by a consolidated subsidiary, Total
Nucléaire, 100% indirectly controlled by TOTAL S.A.; and
– 98,307,596 shares held by subsidiaries of Elf Aquitaine
(Financière Valorgest, Sogapar and Fingestval), 100% indirectly
controlled by TOTAL S.A.
These shares are deducted from the consolidated shareholders’ equity.
B) Reserves
As of December 31,
(M€) 2011 2010 2009
Revaluation reserves 48 48 37
Legal reserves 740 740 740
Untaxed reserves 2,808 2,808 2,808
General reserves 390 390 390
Total 3,986 3,986 3,975
7) Contingency reserves
As of December 31,
(M€)
Gross amount
at beginning
of year
2011
Increases
Decreases
Used
Unused
Gross amount
at year-end
Reserves for financial risks 3,467 832 - - 4,299 (a)
Reserves for operating risks (including note 8)
and compensation expense 261 282 (106) - 437 (b)
Reserves for non-recurring items 44 - (44) - -
Total 3,772 1,114 (150) - 4,736
(a) Reserves for financial risks are mainly comprised of a guarantee granted to an upstream financing subsidiary for €4,282 million.
(b) Reserves for operating risks are comprised of:
– €325 million for retirement benefits, pension plans and special termination plans, €9 million for long-service awards,
– and €97 million for restricted share grant. The calculation is based on the value of the shares bought to cover such plan and prorated basis based on the 2-year vesting period
following which grant of these restricted shares becomes final, subject to a performance condition (Note 23).
8) Employee benefits obligations
TOTAL S.A. enters into employee benefit and pension plans, pre-retirement and special termination benefits. Expenses for defined
contribution and multi-employers plans correspond to the contributions paid.
Provisions as of December 31, are as follows:
(M€) 2011 2010
Pension benefits and other benefits 325 155
Restructuring reserves - -
Provisions as of December 31 325 155
For defined benefit plans, commitments are determined using a prospective methodology called “projected unit credit method”. The
commitment actuarial value depends on various factors such as the length of service, life expectancy, employee turnover rate, salaries
revalorization and actualization assumptions.
In 2011, a provision for a pre-retirement scheme amounting to €172 million was booked.
The actuarial assumptions used as of December 31, are the following:
2011 2010
Discount rate 4.07% 4.36%
Average expected rate of salary increase 4,61% 4.38%
Average expected rate of return on plan assets 4.95% 5.28%
Average residual life expectancy of operations 10-20 years 10-20 years
Registration Document 2011. TOTAL
307
11 TOTAL S.A.
Notes to the Statutory Financial Statements
TOTAL S.A. records a provision in its accounts for the net actuarial liability of the plan assets and the actuarial gains and losses to be
amortized when this sum represents a pension liability.
Actuarial gains and losses resulting from changes in actuarial assumptions are amortized using the straight-line method over the estimated
remaining length of service of employees involved.
The reconciliation between the total commitment for pension plans not covered through insurance companies and the provision booked
is as follows:
(M€) 2011 2010
Actuarial liability as of December 31, 480 251
Actuarial gains and losses to be amortized (157) (96)
Provision for pension benefits and other benefits as of December 31, 323 155
The total commitment for pension plans covered through insurance companies amounts to:
(M€) 2011 2010
Actuarial liability as of December 31, 257 262
Plan assets (191) (225)
Net commitment as of December 31, 66 37
Provision for pension benefits and other benefits as of December 31 2 -
9) Loans
Due date as of December 31, 2011 Within 1 to 5 years Beyond 2010
(M€) one year 5 years
Debenture loans
5% Bonds 1998-2013 (FRF 1,000 million) (a) 129 - 129 - 125
Accrued interest - - - - -
Total debenture loans 129 - 129 - 125
Other loans (b) 28,739 572 27,201 966 16,688
Current accounts (c) 5,970 5,970 - - 20,832
Total 34,838 6,542 27,330 966 37,645
(a) Through the use of issue swaps, this debenture loan becomes equivalent to a dollar floating rate debt.
(b) Including €28,732 million related to affiliates.
(c) Including €5,970 million related to affiliates.
10) Liabilities
As of December 31,
(M€) 2011 2010
Suppliers 1 253(a) 941(b)
Other operating liabilities 2,587 850
Total (c) (d) 3,840 1,791
(a) Excluding invoices not yet received (€550 million), the outstanding liability amounts to €703 million, of which:.
– €626 million for invoices of foreign suppliers to foreign branches for which the payment schedule is as follows:
€393 million within 30 days and €233 million payable no later than 180 days;
– €8 million non-Group payable no later than January 31, 2012;
– €69 million for invoices outstanding to the Group for which the payment schedule is as follows: €11 million paid on December 31, 2011 and €58 million payable no later than January 31, 2012.
(b) Excluding invoices not yet received (€461 million), the outstanding liability amounts to €480 million, of which:.
– €405 million for invoices of foreign suppliers to foreign branches for which the payment schedule is as follows:
€184 million within 30 days and €221 million payable no later than 90 days;
– €2 million non-Group payable no later than January 31, 2011;
– €73 million for invoices outstanding to the Group for which the payment schedule is as follows: €33 million paid on December 31, 2010 and €40 million payable no later than January 31, 2011.
(c) Including €192 million in 2011 and €108 million in 2010 related to affiliates.
(d) Due in 12 months or less.
308
TOTAL. Registration Document 2011
Notes to the Statutory Financial Statements
TOTAL S.A. 11
11) Translation adjustment
The application of the foreign currency translation method outlined in Note 1 resulted in a net translation adjustment of €299 million as of
December 31, 2011, mainly due to dollar-denominated loans.
12) Sales
(M€) France Rest of North Africa Middle East Total
Europe America &
Rest of world
For the year ended 2011 310 453 32 934 12,517 14,246
Hydrocarbon and oil products - 227 - - 11,875 12,102
Technical support fees 310 226 32 934 642 2,144
For the year ended 2010 320 356 42 827 8,762 10,307
Hydrocarbon and oil products - 174 - - 8,173 8,347
Technical support fees 320 182 42 827 589 1,960
13) Net operating expenses
(M€) 2011 2010
Purchase cost of goods sold (8,149) (5,611)
Other purchases and external expenses (1,487) (1,413)
Taxes (37) (37)
Personnel expenses (1,235) (1,119)
Total (10,908) (8,180)
14) Operating depreciation, amortization and allowances
(M€) 2011 2010
Depreciation, valuation allowance and amortization on
– Property, plant and equipment and intangible assets (85) (79)
– Employee benefits (282) (108)
Subtotal 1 (367) (187)
Reversals
– Employee benefits 106 46
Subtotal 2 106 46
Total (1+2) (261) (141)
Registration Document 2011. TOTAL
309
11 TOTAL S.A.
Notes to the Statutory Financial Statements
15) Financial expenses and income
(M€) 2011 2010
Financial expenses (a)
Interest expenses and other (548) (460)
Depreciation on investments and loans to subsidiaries and affiliates - -
Subtotal 1 (548) (460)
Financial income (b)
Net gain on sales of marketable securities and interest on loans to subsidiaries and affiliates 1 1
Interest on short-term deposits and other 119 11
Subtotal 2 120 12
Total (1+2) (428) (448)
(a) Including, related to affiliates: 526 304
(b) Including, related to affiliates: 5 10
16) Dividends
(M€) 2011 2010
Upstream 3,075 2,195
Downstream 53 248
Chemicals - 4
Financial activities 7,471 4,050
Total 10,599 6,497
17) Other financial income
and expenses
Net income of €9 million is comprised entirely of foreign exchange
income.
18) Non-recurring income
Non-recurring income is a profit of €468 million primarily comprised
of an income on disposal of assets for €436 million, including Total
EP Canada for €434 million and others for €2 million. €12 million
correspond mainly to scholarships and grants payment and €44 million
correspond to a reversal of a reserve for taxes due for prior years.
19) Basis of taxation
From 1996 to 2010 inclusive, TOTAL S.A. filed a worldwide tax
return for payment of corporation tax, pursuant to the provisions of
the French Tax Code (Article 209 quinquies). On July 25, 2011, the
company informed the tax authorities of its decision to not request
a renewal of this tax agreement. Consequently, as of January 1, 2011,
TOTAL S.A. is subject to French corporation tax according to the
ordinary rules of law, i.e. based on the principle of territoriality of
tax stipulated in the French Tax Code (Article 209l). It is also taxed
outside France on income from its direct operations abroad.
Moreover, since January 1, 1992, TOTAL S.A. has elected the
95%-owned French subsidiaries tax regime provided for by Articles
223 A and following of the French Tax Code (Régime de l’intégration
fiscale). In accordance with the integration agreement signed
between TOTAL S.A. and its consolidated subsidiaries, the deficits
realized by the consolidated companies during the period of
integration are definitively acquired by the parent company.
20) Foreign exchange
and counterparty risk
The commercial foreign exchange positions are systematically
covered by the purchase or sale of the corresponding currencies,
mainly with cash transactions and sometimes on forward markets.
Regarding long-term assets in foreign currencies, the Company
tries to reduce the corresponding exchange risk by associating
them, as far as possible, with financing in the same currency.
In terms of interest rates, most of the long-term debt is brought
back to a variable rate through the use of issue swaps (long-term
interest rate and foreign currency swaps). Day to day treasury
management operates on the basis of the daily rates, for instance
by using short-term interest rate swaps.
An independent department monitors the status of the financial
instruments, especially through marked-to-market valuations and
sensitivity estimations. Counterparty risk is monitored on a regular
basis against limits set by the Group’s senior management.
310
TOTAL. Registration Document 2011
Notes to the Statutory Financial Statements
TOTAL S.A. 11
21) Commitments
As of December 31
(M€) 2011 2010
Commitments given
Guarantees on custom duties 1,021 1,021
Bank guarantees 6,738 6,886
Guarantees given on other commitments (a) 10,203 6,101
Guarantees related to confirmed lines of credit 81 604
Short term financing plan (b) 17,964 17,555
Bond issue plan (b) 35,690 33,510
Total commitments given 71,697 65,677
Commitments received
Guarantees related to confirmed lines of credit 8,836 7,178
Guarantees on confirmed authorized bank overdrafts 7,611 4,373
Other commitments received 1,183 1,671
Total of commitments received 17,630 13,222
(a) The €4,102 million increase in other commitments between 2010 and 2011 is related to the guarantees given for the LNG plant construction contract with Bechtel in Australia
and the agreements signed in connection with the projects in Uganda.
(b) TOTAL S.A. guarantees the short-term financing plan and the bond issue incurred by Total Capital and Total Capital Canada Ltd. On the overall plan amount of €53,654 million,
€23,448 million were incurred as of December 31, 2011 and €22,795 million as of December 31, 2010.
Portfolio of financial derivative instruments
The off-balance sheet commitments related to financial derivative instruments are set forth below.
As of December 31
(M€) 2011 2010
Issue swaps
Notional amount, accrued coupon interest (a) 129 125
Fair value, accrued coupon interest (b) 32 40
Short term swap
Lender at fixed rate (a) - 935
Fair value, accrued coupon interest (b) - -
Forward contract of currencies
Notional value (a) 912 607
Fair value (b) (29) 1
(a) These amounts set the levels of notional commitment and are not indicative of a contingent gain or loss.
(b) This value was determined by estimating future cash flows on a borrowing-by-borrowing basis and discounting these future cash flows using the zero coupon interest rate curves
at year-end and taking into account a spread that corresponds to the average risk classification of the Company.
22) Average number of employees
As of December 31 2011 2010
Managers 5,101 4,921
Supervisors 1,452 1,449
Technical and administrative staff 448 439
Total 7,001 6,809
Registration Document 2011. TOTAL
311
11 TOTAL S.A.
Notes to the Statutory Financial Statements
23) Stock option, restricted share and free share plans
A) TOTAL share subscription option plans
2003 Plan 2004 Plan 2005 Plan 2006 Plan 2007 Plan 2008 Plan 2009 Plan 2010 Plan 2011 Plan
Total Weighted
average
exercise
price
Date of the
shareholders’ meeting 05/17/2001 05/14/2004 05/14/2004 05/14/2004 05/11/2007 05/11/2007 05/11/2007 05/21/2010 05/21/2010
Date of the award (a) 07/16/2003 07/20/2004 07/19/2005 07/18/2006 07/17/2007 10/09/2008 09/15/2009 09/14/2010 09/14/2011
Exercise price until
May 23, 2006 included (b) 33,30 39,85 49,73 - - - - - - - -
Exercise price
since May 24, 2006 (b) 32,84 39,30 49,04 50,60 60,10 42,90 39,90 38,20 33,00 - -
Expiry date 07/16/2011 07/20/2012 07/19/2013 07/18/2014 07/17/2015 10/09/2016 09/15/2017 09/14/2018 09/14/2019 -
Number of options (c)
Existing options
as of January 1, 2008 8,368,378 13,197,236 6,243,438 5,711,060 5,920,105 39,440,217 44.23
Granted - - - - - 4,449,810 - - - 4,449,810 42.90
Cancelled (25,184) (118,140) (34,032) (53,304) (34,660) (6,000) - - - (271,320) 44.88
Exercised (841,846) (311,919) (17,702) (6,700) - - - - - (1,178,167) 34.89
Existing options
as of January 1, 2009 7,501,348 12,767,177 6,191,704 5,651,056 5,885,445 4,443,810 - - - 42,440,540 44.35
Granted - - - - - - 4,387,620 - - 4,387,620 39.90
Cancelled (8,020) (18,387) (6,264) (5,370) (13,780) (2,180) (10,610) - - (64,611) 45.04
Exercised (681,699) (253,081) - - - - - - - (934,780) 34.59
Existing options
as of January 1, 2010 6,811,629 12,495,709 6,185,440 5,645,686 5,871,665 4,441,630 4,377,010 - - 45,828,769 44.12
Granted - - - - - - - 4,788,420 - 4,788,420 38.20
Cancelled (d) (1,420) (15,660) (6,584) (4,800) (5,220) (92,472) (4,040) (1,120) - (131,316) 43.50
Exercised (1,075,765) (141,202) - - - - (1,080) - - (1,218,047) 33.60
Existing options
as of January 1, 2011 5,734,444 12,338,847 6,178,856 5,640,886 5,866,445 4,349,158 4,371,890 4,787,300 - 49,267,826 43.80
Granted - - - - - - - - 1,518,840 1,518,840 33.00
Cancelled (e) (738,534) (28,208) (16,320) (17,380) (16,080) (13,260) (14,090) (85,217) (1,000) (930,089) 34.86
Exercised (4,995,910) (216,115) - - - (200) - (2,040) (9,400) (5,223,665) 33.11
Existing options
as of December 31, 2011 - 12,094,524 6,162,536 5,623,506 5,850,365 4,335,698 4,357,800 4,700,043 1,508,440 44,632,912 44,87
(a) The grant date is the date of the Board meeting awarding the share subscription options, except for the grant of October 9, 2008, decided by the Board on September 9, 2008.
(b) Exercise price in euro. The exercise prices of TOTAL subscription shares of the plans in force at that date were multiplied by 0.25 to take into account the four-for-one stock split
on May 18, 2006. Moreover, following the spin-off of Arkema, the exercise prices of TOTAL subscription shares of these plans were multiplied by an adjustment factor equal
to 0.986147 effective as of May 24, 2006.
(c) The number of options awarded, outstanding, canceled or exercised before May 23, 2006 included, was multiplied by four to take into account the four-for-one stock split approved
by the shareholders’ meeting on May 12, 2006.
(d) Out of 92,472 options awarded under the 2008 Plan that were canceled, 88,532 options were canceled due to the performance condition.
The acquisition rate applicable to the subscription options that were subject to the performance condition of the 2008 Plan was 60%.
(e) Out of the 930,089 options canceled in 2011, 738,534 options that were not exercised expired due to the expiry of the 2003 subscription option Plan on July 16, 2011.
Options are exercisable, subject to a continuous employment
condition, after a 2-year period from the date of the Board meeting
awarding the options and expire eight years after this date. The
underlying shares may not be transferred during four years from the
date of grant. For the 2007 to 2011 Plans, the 4-year transfer
restriction period does not apply to employees of non-French
subsidiaries as of the date of the grant, who may transfer the
underlying shares after a 2-year period from the date of the grant.
options will be finally granted to their beneficiary provided that the
performance condition is fulfilled.
The performance condition states that the number of options finally
granted is based on the average of the Return On Equity (ROE) of
the Group. The average ROE is calculated by the Group from the
consolidated balance sheet and statement of income of the Group
for fiscal years 2011 and 2012.
2011 Plan
For the 2011 Plan, the Board of Directors decided that for each
grantee other than the Chairman and Chief Executive Officer, the
The acquisition rate:
– is equal to zero if the average ROE is less than or equal to 7%;
– varies on straight-line basis between 0% and 100% if the
average ROE is more than 7% and less than 18%; and
312
TOTAL. Registration Document 2011
Notes to the Statutory Financial Statements
TOTAL S.A. 11
– is equal to 100% if the average ROE is more than or equal to 18%.
In addition, as part of the 2011 Plan, the Board of Directors
decided that the number of share subscription options finally
awarded to the Chairman and Chief Executive Officer will be
subject to two performance conditions:
– For 50% of the share subscription options granted, the performance
condition states that the number of options finally granted is based
on the average ROE of the Group. The average ROE is calculated
by the Group from the consolidated balance sheet and statement of
income of the Group for fiscal years 2011 and 2012. The acquisition
rate is equal to zero if the average ROE is less than or equal to 7%;
varies on a straight-line basis between 0% and 100% if the average
ROE is more than 7% and less than 18%; and is equal to 100% if
the average ROE is more than or equal to 18%.
– For 50% of the share subscription options granted, the performance
condition states that the number of options finally granted is based
on the average of the Return On Average Capital Employed
(ROACE) of the Group. The average ROACE is calculated by the
Group from the consolidated balance sheet and statement of
income of the Group for fiscal years 2011 and 2012. The acquisition
rate is equal to zero if the average ROACE is less than or equal
to 6%; varies on a straight-line basis between 0% and 100% if the
average ROACE is more than 6% and less than 15%; and is equal
to 100% if the average ROACE is more than or equal to 15%.
2010 Plan
For the 2010 Plan, the Board of Directors decided that:
– For each grantee of up to 3,000 options, other than the
Chairman and Chief Executive Officer, the options will be finally
granted to their beneficiary.
In addition, as part of the 2010 Plan, the Board of Directors decided that
the number of share subscription options finally awarded to the Chairman
and Chief Executive Officer will be subject to two performance conditions:
– For 50% of the share subscription options granted, the performance
condition states that the number of options finally granted is based
on the average ROE of the Group. The average ROE is calculated
by the Group based on TOTAL’s consolidated balance sheet and
statement of income for fiscal years 2010 and 2011. The acquisition
rate is equal to zero if the average ROE is less than or equal to 7%;
varies on a straight-line basis between 0% and 100% if the average
ROE is more than 7% and less than 18%; and is equal to 100% if
the average ROE is more than or equal to 18%.
– For 50% of the share subscription options granted, the performance
condition states that the number of options finally granted is based
on the average ROACE of the Group. The average ROACE is
calculated by the Group based on TOTAL’s consolidated balance
sheet and statement of income for fiscal years 2010 and 2011. The
acquisition rate is equal to zero if the average ROACE is less than or
equal to 6%; varies on a straight-line basis between 0% and 100%
if the average ROACE is more than 6% and less than 15%; and is
equal to 100% if the average ROACE is more than or equal to 15%.
2009 Plan
For the 2009 Plan, the Board of Directors decided that for each
beneficiary, other than the Chief Executive Officer, of more than 25,000
options, one third of the options granted in excess of this number will
be finally granted subject to a performance condition. This condition
states that the final number of options finally granted is based on the
average ROE of the Group as published by TOTAL. The average ROE
is calculated based on the Group’s consolidated balance sheet and
statement of income for fiscal years 2009 and 2010. The acquisition rate:
– For each grantee of more than 3,000 options and less
– is equal to zero if the average ROE is less than or equal to 7%;
or equal to 50,000 options (other than the Chairman and Chief
Executive Officer):
- The first 3,000 options and two-thirds above the first 3,000
options will be finally granted to their beneficiary;
– varies on straight-line basis between 0% and 100% if the
average ROE is more than 7% and less than 18%; and
– is equal to 100% if the average ROE is more than or equal to 18%.
- The outstanding options, that is one-third of the options above
the first 3,000 options, will be finally granted provided that the
performance condition described below is fulfilled.
In addition, the Board of Directors decided that, for the Chief
Executive Officer, the number of share subscription options finally
granted will be subject to two performance conditions:
– For each grantee of more than 50,000 options (other than the
Chairman and Chief Executive Officer):
- The first 3,000 options, two-thirds of the options above the
first 3,000 options and below the first 50,000 options, and
one-third of the options above the first 50,000 options, will be
finally granted to their beneficiary;
- The outstanding options, that is one-third of the options above
the first 3,000 options and below the first 50,000 options and
two-thirds of the options above the first 50,000 options, will be
finally granted provided that the performance condition is fulfilled.
The performance condition states that the number of options finally
granted is based on the average ROE of the Group. The average
ROE is calculated by the Group based on TOTAL’s consolidated
balance sheet and statement of income for fiscal years 2010
and 2011. The acquisition rate:
– is equal to zero if the average ROE is less than or equal to 7%;
– varies on straight-line basis between 0% and 100% if the
average ROE is more than 7% and less than 18%; and
– is equal to 100% if the average ROE is more than or equal to 18%.
– For 50% of the share subscription options granted, the performance
condition states that the number of options finally granted is based
on the average ROE of the Group as published by TOTAL. The
average ROE is calculated based on the Group’s consolidated
balance sheet and statement of income for fiscal years 2009 and
2010. The acquisition rate is equal to zero if the average ROE is less
than or equal to 7%; varies on a straight-line basis between 0% and
100% if the average ROE is more than 7% and less than 18%; and
is equal to 100% if the average ROE is more than or equal to 18%.
– For 50% of the share subscription options granted, the
performance condition states that the number of options finally
granted is based on the average ROACE of the Group as
published by TOTAL. The average ROACE is calculated based on
the Group’s consolidated balance sheet and statement of income
for fiscal years 2009 and 2010. The acquisition rate is equal to
zero if the average ROACE is less than or equal to 6%; varies
on a straight-line basis between 0% and 100% if the average
ROACE is more than 6% and less than 15%; and is equal
to 100% if the average ROACE is more than or equal to 15%.
Due to the application of the performance condition, the acquisition
rates were 100% for the 2009 Plan.
Registration Document 2011. TOTAL
313
11 TOTAL S.A.
Notes to the Statutory Financial Statements
B) TOTAL share purchase option plans
2001Plan (a)
2002 Plan (b)
Total
Weighted
average
exercise
price
Date of the shareholders’ meeting 05/17/2001 05/17/2001
Grant date (c) 07/10/2001 07/09/2002
Exercise price until May 23, 2006 included (d) 42.05 39.58 - -
Exercise price since May 24, 2006 (d) 41.47 39.03 - -
Expiry date 07/10/2009 07/09/2010
Number of options (e)
Outstanding as of January 1, 2009 4,691,426 6,450,857 11,142,283 40.06
Awarded - - - -
Canceled (4,650,446) (7,920) (4,658,366) 41.47
Exercised (40,980) (507,676) (548,656) 39.21
Outstanding as of January 1, 2010 - 5,935,261 5,935,261 39.03
Awarded - - - -
Canceled (f) - (4,671,989) (4,671,989) 39.03
Exercised - (1,263,272) (1,263,272) 39.03
Outstanding as of January 1, 2011 - - - -
Awarded - - - -
Canceled - - - -
Exercised - - - -
Outstanding as of December 31, 2011 - - - -
(a) Options were exercisable, subject to a continued employment condition, after a 3.5-year vesting period from the date of the Board meeting awarding the options and expired 8 years
after this date. The underlying shares may not be transferred during the 4-year period from the date of the grant. This plan expired on July 10, 2009.
(b) Options were exercisable, subject to a continued employment condition, after a 2-year vesting period from the date of the Board meeting awarding the options and expired 8 years after
this date. The underlying shares may not be transferred during the 4-year period from the date of the grant. This plan expired on July 9, 2010.
(c) The grant date is the date of the Board meeting awarding the options.
(d) Exercise price in euro. The exercise prices of TOTAL share purchase options of the plans at that date were multiplied by 0.25 to take into account the four-for-one stock split on
May 18, 2006. Moreover, following the spin-off of Arkema, the exercise prices of TOTAL share purchase options of these plans were multiplied by an adjustment factor equal
to 0.986147 effective as of May 24, 2006.
(e) The number of options awarded, outstanding, canceled or exercised before May 23, 2006 included, was multiplied by four to take into account the four-for-one stock split approved by
the shareholders’ meeting on May 12, 2006.
(f) Out of the 4,671,989 options canceled in 2010, 4,671,145 options that were not exercised expired due to the expiry of the 2002 purchase option Plan on July 9, 2010.
C) Exchange guarantee granted to the holders
of Elf Aquitaine share subscription options
Pursuant to the public exchange offer for Elf Aquitaine shares which
was made in 1999, the Group made a commitment to guarantee
the holders of Elf Aquitaine share subscription options, at the end
of the period referred to in Article 163 bis C of the French Tax Code
(CGI), and until the end of the period for the exercise of the options,
the possibility to exchange their future Elf Aquitaine shares for
TOTAL shares, on the basis of the exchange ratio of the offer
(nineteen TOTAL shares for thirteen Elf Aquitaine shares).
In order to take into account the spin-off of S.D.A. (Société de
Développement Arkema) by Elf Aquitaine, the spin-off of Arkema
by TOTAL S.A. and the four-for-one TOTAL stock split, the Board
of Directors of TOTAL S.A., in accordance with the terms of the
share exchange undertaking, approved on March 14, 2006 to
adjust the exchange ratio described above (see pages 24 and 25
of the “Prospectus for the purpose of listing Arkema shares
on Euronext Paris in connection with the allocation of Arkema
shares to TOTAL S.A. shareholders”). Following the approval
by Elf Aquitaine shareholders’ meeting on May 10, 2006 of the
spin-off of S.D.A. by Elf Aquitaine, the approval by TOTAL S.A.
shareholders’ meeting on May 12, 2006 of the spin-off of
Arkema by TOTAL S.A. and the four-for-one TOTAL stock split,
the exchange ratio was adjusted to six TOTAL shares for one
Elf Aquitaine share on May 22, 2006.
This exchange guarantee expired on September 12, 2009,
due to the expiry of the Elf Aquitaine share subscription option
plan No. 2 of 1999. Subsequently, no Elf Aquitaine shares are
covered by the exchange guarantee.
314
TOTAL. Registration Document 2011
Notes to the Statutory Financial Statements
TOTAL S.A. 11
D) TOTAL performance share grant
2005 Plan 2006 Plan 2007 Plan 2008 Plan 2009 Plan 2010 Plan 2011 Plan Total
Date of the shareholders’ meeting 05/17/2005 05/17/2005 05/17/2005 05/16/2008 05/16/2008 05/16/2008 05/13/2011
Grant date (a) 07/19/2005 07/18/2006 07/17/2007 10/09/2008 09/15/2009 09/14/2010 09/14/2011
Final grant date
(end of the vesting period) 07/20/2007 07/19/2008 07/18/2009 10/10/2010 09/16/2011 09/15/2012 09/15/2013
Transfer possible from 07/20/2009 07/19/2010 07/18/2011 10/10/2012 09/16/2013 09/15/2014 09/15/2015
Number of performance shares
Outstanding as
of January 1, 2009 - - 2,333,217 2,772,748 - - - 5,105,965
Awarded - - - - 2,972,018 - - 2,972,018
Canceled 1,928 2,922 (12,418) (9,672) (5,982) - - (23,222)
Finally granted (b)(c) (1,928) (2,922) (2,320,799) (600) - - - (2,326,249)
Outstanding as
of January 1, 2010 - - - 2,762,476 2,966,036 - - 5,728,512
Awarded - - - - - 3,010,011 - 3,010,011
Canceled(d) 1,024 3,034 552 (1,113,462) (9,796) (8,738) - (1,127,386)
Finally granted (b)(c) (1,024) (3,034) (552) (1,649,014) (1,904) (636) - (1,656,164)
Outstanding as
of January 1, 2011 - - - - 2,954,336 3,000,637 - 5,954,973
Awarded - - - - - - 3,649,770 3,649,770
Canceled 800 700 792 356 (26,214) (10,750) (19,579) (53,895)
Finally granted (b)(c)(e) (800) (700) (792) (356) (2,928,122) (1,836) - (2,932,606)
Outstanding as
of December 31, 2011 - - - - - 2,988,051 3,630,191 6,618,242
(a) The grant date is the date of the Board of Directors meeting that awarded the shares, except for the shares awarded by the Board of Directors at their meeting of September 9, 2008,
and granted on October 9, 2008.
(b) Performance shares finally granted following the death of their beneficiaries.
(c) Including performance shares finally granted for which the entitlement right had been canceled erroneously.
(d) Out of the 1,113,462 canceled rights to the grant share under the 2008 Plan, 1,094,914 entitlement rights were canceled due to the performance condition.
The acquisition rate for the 2008 Plan was 60%.
(e) The acquisition rate for the 2009 Plan was 100%.
The performance shares, which are bought back by the Company
on the market, are finally granted to their beneficiaries after a 2-year
vesting period from the date of the grant. The final grant is subject
to a continued employment condition and a performance condition.
Moreover, the transfer of the performance shares finally granted will
not be permitted until the end of a 2-year mandatory holding period
from the date of the final grant.
2011 Plan
For the 2011 Plan, the Board of Directors decided that, for each
senior executives (other than the Chairman and Chief Executive
Officer), the shares will be finally granted subject to a performance
condition. This condition is based on the average ROE as published
by the Group and calculated based on the Group’s consolidated
balance sheet and statement of income for fiscal years 2011
and 2012. The acquisition rate:
– is equal to zero if the average ROE is less than or equal to 7%;
– varies on a straight-line basis between 0% and 100% if the
average ROE is greater than 7% and less than 18%; and
– is equal to 100% if the average ROE is greater than or equal to 18%.
The Board of Directors decided also that, for each for each
beneficiary (other than the Chairman and Chief Executive Officer
and the senior executives) of more than 100 shares, the shares
in excess of this number will be finally granted subject to the
performance condition mentioned before.
In addition, as part of the 2011 plan, the Board of Directors decided
that the number of performance share finally granted to the
Chairman and Chief Executive Officer will be subject to two
performance conditions:
– For 50% of the share granted, the performance condition
states that the number of shares finally granted is based on the
average ROE of the Group. The average ROE is calculated by
the Group from the consolidated balance sheet and statement
of income of the Group for fiscal years 2011 and 2012. The
acquisition rate is equal to zero if the average ROE is less than
or equal to 7%; varies on a straight-line basis between 0%
and 100% if the average ROE is more than 7% and less
than 18%; and is equal to 100% if the average ROE is more
than or equal to 18%.
– For 50% of the share granted, the performance condition states
that the number of shares finally granted is based on the average
ROACE of the Group. The average ROACE is calculated by the
Group from the consolidated balance sheet and statement of
income of the Group for fiscal years 2011 and 2012. The
acquisition rate is equal to zero if the average ROACE is less
than or equal to 6%; varies on a straight-line basis between 0%
and 100% if the average ROACE is more than 6% and less
than 15%; and is equal to 100% if the average ROACE is more
than or equal to 15%.
Registration Document 2011. TOTAL
315
11 TOTAL S.A.
Notes to the Statutory Financial Statements
2010 Plan
2009 Plan
For the 2010 Plan, the Board of Directors decided that, for each
beneficiary of more than 100 shares, half of the shares in excess
of this number will be finally granted subject to a performance
condition. This condition is based on the average ROE calculated
by the Group based on TOTAL’s consolidated balance sheet
and statement of income for fiscal years 2010 and 2011.
The acquisition rate:
– is equal to zero if the average ROE is less than or equal to 7%;
– varies on a straight-line basis between 0% and 100% if the
average ROE is greater than 7% and less than 18%; and
– is equal to 100% if the average ROE is greater than or equal to 18%.
For the 2009 Plan, the Board of Directors decided that, for each
beneficiary of more than 100 shares, half of the shares in excess
of this number will be finally granted subject to a performance
condition. This condition states that the number of shares finally
granted is based on the average ROE as published by the Group
and calculated based on the Group’s consolidated balance
sheet and statement of income for fiscal years 2009 and 2010.
The acquisition rate:
– is equal to zero if the average ROE is less than or equal to 7%;
– varies on a straight-line basis between 0% and 100% if the
average ROE is greater than 7% and less than 18%; and
– is equal to 100% if the average ROE is greater than or equal to 18%.
Due to the application of the performance condition, the acquisition
rate was 100% for the 2009 Plan.
E) Global free TOTAL share plan
The Board of Directors approved at its meeting on May 21, 2010 the implementation and conditions of a global free share plan intended
for the Group employees. On June 30, 2010, entitlement rights to 25 free shares were granted to every employee. The final grant is subject
to a continued employment condition during the plan’s vesting period. The shares are not subject to any performance condition. Following
the vesting period, the shares awarded will be new shares.
2010 Plan 2010 Plan Total
(2 + 2) (4 + 0)
Date of the shareholders’ meeting 05/16/08 05/16/08
Date of the award (a) 06/30/10 06/30/10
Date of the final award 07/01/12 07/01/14
Transfer authorized as from 07/01/14 07/01/14
Number of free shares
Outstanding as of January 1, 2010
Notified 1,508 850 1,070 650 2,579 500
Cancelled (125) (75) (200)
Finally granted (b) (75) - (75)
Outstanding as of January 1, 2011 1,508 650 1,070 575 2,579 225
Notified - - -
Cancelled (29 175) (54,625) (83,800)
Finally granted (b) (475) (425) (900)
Outstanding as of December 31, 2011 1,479 000 1,015 525 2,494,525
(a) The June 30, 2010, grant was decided by the Board of Directors on May 21, 2010.
(b) Final grant following the death or disability of the beneficiary of the shares.
316
TOTAL. Registration Document 2011
Notes to the Statutory Financial Statements
TOTAL S.A. 11
24) Others
Compensation for the administration and management bodies
The aggregate amount of direct and indirect compensation accounted for by the French and foreign affiliates of the Company for the
executive officers of TOTAL (the members of the Management Committee and the Treasurer) and for the members of the Board of Directors
who are employees of the Group, is detailed as follows:
For the year ended December 31,
(M€) 2011 2010 2009
Number of people 30 26 27
Direct or indirect compensation received 20,4 20,8 19,4
Pension expenses (a) 9,4 12,2 10,6
Other long-term benefits expenses - - -
Termination benefits expenses 4,8 - -
Share-based payments expense (IFRS 2) (b) 10,2 10,0 11,2
(a) The benefits provided for executive officers and certain members of the Board of Directors, employees and former employees of the Group, include severance to be paid on retirement,
supplementary pension schemes and insurance plans, which represent €139.7 million provisioned as of December 31, 2011 (against €113.8 million as of December 31, 2010 and
€96.6 million as of December 31, 2009).
(b) Share-based payments expense computed for the executive officers and the members of the Board of Directors who are employees of the Group as described in Note 25 paragraph E
to the Consolidated Financial Statements and based on the principles of IFRS 2 “Share-based payments” described in Note 1 paragraph E to the Consolidated Financial Statements.
The compensation allocated to members of the Board of Directors for directors’ fees totaled €1.07 million in 2011
(€0.96 million in 2010 and €0.97 million in 2009).
Legal proceedings
All legal proceedings involving TOTAL S.A. are included in Note 32 – Other risks and commitments – to the consolidated financial statements
attached to the registration document.
Registration Document 2011. TOTAL
317
11 TOTAL S.A.
Other financial information concerning the parent company
5. Other financial information
concerning the parent company
5.1. Subsidiaries and affiliates
As of December 31, 2010
(M€)
% of share
capital
owned by
the company
Share
capital
O ther
sharehoders’
equity
Book value
of investments
Loans &
avances
Sales
Net
income
Dividends
paid
Commitments
&
contingencies
gross
net
Subsidiaries
Cray Valley S.A. 100.0 70 29 69 69 - 310 5 - -
Daja 79 S.A.S. 100.0 152 33 152 152 - - 33 - -
Elf Aquitaine 100.0 2,166 26,167 45,787 45,787 - - 7,962 5,983 -
Omnium Insurance
Reinsur. CIE 100.0 31 472 114 114 - 287 130 149 -
Total China
Investment Ltd 100.0 158 9 140 121 5 367 12 - -
Total E&P Golfe
Holdings Ltd 100.0 - (7) 2,855 2,855 - - (3) - -
Total E&P Holdings 65.8 6 4,558 1,118 1,118 - - 4,244 3,015 -
Total E&P Holdings
Ichthys 100.0 84 - 84 84 - - - - -
Total E&P Ichthys 100.0 298 (1) 298 298 - - (1) - -
Total E&P Iraq 100.0 13 3 67 67 - - (4) - -
Total Energie
Développement 100.0 46 (85) 62 32 - 2 (84) - -
Total Gasandes S.A. 100.0 2 72 150 20 - - 14 - -
Total Gaz &
Énergies Nouvelles Hld 100.0 330 90 330 330 - - 21 - -
Total Gestion USA 100.0 3,969 - 3,969 3,969 - - - - -
Total Holdings Europe 53.2 65 8,869 4,446 4,446 - - 2,074 1,316 -
Total Outre Mer 100.0 77 407 95 95 - 3,644 159 - -
Total Raffinage Chimie 100.0 930 12,105 13,117 13,117 - - (427) - -
Total Raffinage
Marketing 67.5 207 1,456 4,132 4,132 - 36,142 (349) - 1,000
Total Refining
Saudi Arabia S.A.S. 100.0 80 15 80 80 107 - - - -
Other - - - 905 619 9,666(a) - - 136 60,493
Total - - - 77,970 77,505 9,778 - - 10,599 61,493
(a) Including Total Finance for €6,668 million and Total Treasury for €2,377 million.
(b) Including €53,654 million concerning Total Capital for debenture loan emission program and short-term financing.
318
TOTAL. Registration Document 2011
Other financial information concerning the parent company
TOTAL S.A. 11
5.2. Five-year financial data
Share capital at year-end
(K€) 2011 2010 2009 2008 2007
Share capital 5,909,418 5,874,102 5,871,057 5,929,520 5,988,830
Number of common shares outstanding (a) 2,363,767,313 2,349,640,931 2,348,422,884 2,371,808,074 2,395,532,097
Number of future shares to issue:
- share subscription options (a) 44,632,912 49,267,826 45,828,769 42,965,666 39,440,217
- Elf Aquitaine options and shares
covered by the exchange guarantee (a) - - - 610,086 841,776
- global free share plan 2,494,525 2,579,225 - - -
Operation and income for the year
(K€) 2011 2010 2009 2008 2007
Net commercial sales 12,102,415 8,347,108 6,246,165 9,970,955 7,904,504
Employee profit sharing 51,000 48,000 35,000 42,000 38,000
Net income 9,766,284 5,840,088 5,633,681 6,007,609 5,778,925
Retained earnings before appropriation 4,916,078 4,425,753 4,114,277 3,416,997 2,496,875
Income available for appropriation 14,682,362 10,265,841 9,747,958 9,424,606 8,275,800
Dividends (including interim dividends) 5,392,829 5,384,541 5,354,404 5,407,722 4,983,591
Retained earnings 9,289,533 4,881,300 4,393,554 4,016,884 3,292,209
Earnings per share
(€) 2011 2010 2009 2008 2007
Income after tax, before depreciation, amortization and provisions (a) (b) 4.80 2.90 2.68 2.87 3.06
Net income (a) (b) 4.33 2.60 2.52 2.67 2.54
Net dividend per share (a) 2.28 2.28 2.28 2.28 2.07
Employees
(K€) 2011 2010 2009 2008 2007
Average number of employees during the year (c) 7,001 6,809 6,595 6,311 6,027
Total payroll for the year 910,707 815,269 881,515 666,686 605,374
Social security and other staff benefits 331,248 311,114 312,973 282,040 258,875
(a) On May 18, 2006, the share par value was divided by four.
(b) Earnings per share are calculated based on the fully-diluted weighted-average number of common shares outstanding during the year, excluding treasury shares and shares held by subsidiaries.
(c) Including employees in end-of-career holiday or early retirement (Exemption from activity: 29 people in 2007, 50 people in 2008, 74 people in 2009, 79 people in 2010 and 89 people in 2011).
Registration Document 2011. TOTAL
319
11 TOTAL S.A.
Other financial information concerning the parent company
5.3. Allocation of 2011 income
(Net dividend proposed: €2.28 per share)
(€)
Income of the year 9,766,283,949.78
Retained earnings before appropriation 4,916,077,732.32
Total available for allocation 14,682,361,682.10
Interim dividends:
- paid in 2011 (2.354.538.642 x €1.14) 2,684,174,051.88
- to be paid in 2012 including interim dividend approved in 2011 (a) 1,360,447,485.75
Balance of dividends to be paid in 2012 1,348,207,179.21
2011 dividends 5,392,828,716.84
Retained earnings 9,289,532,965.26
Total allocated 14,682,361,682.10
(a) (2,365,275,753 - 2,354,538,642) x €1.14 +2,365,275,753 x €0.57
5.4. Statement of changes in share capital for the past five
For the year ended
(€)
2007
Changes in capital
Cash contributions
Par value
Issue/
conversion
premium
Successive
amounts
of nominal
capital
Cumulative
number
of common
shares of the
Company
Options covered by the exchange guarantee 788 16,862 6,065,208 2,426,083,265
Exercise of share subscription options 6,135 76,196 6,071,343 2,428,537,097
Capital decrease (82,513) (1,651,038) 5,988,830 2,395,532,097
2008
Changes in capital
Options covered by the exchange guarantee 569 9,631 5,989,399 2,395,759,521
Exercise of share subscription options 2,945 38,166 5,992,344 2,396,937,688
Capital increase reserved for Group employees 12,176 203,521 6,004,520 2,401,808,074
Capital decrease (75,000) (1,565,629) 5,929,520 2,371,808,074
2009
Changes in capital
2010
2011
Options covered by the exchange guarantee 1,200 17,179 5,930,720 2,372,288,104
Exercise of share subscription options 2,337 29,996 5,933,057 2,373,222,884
Capital decrease (62,000) (1,160,212) 5,871,057 2,348,422,884
Changes in capital
Exercise of share subscription options 3,045 37,875 5,874,102 2,349,640,931
Changes in capital
Exercise of share subscription options 13,059 159,896 5,887,161 2,354,864,596
Capital increase reserved for Group employees 22,257 287,558 5,909,418 2,363,767,313
320
TOTAL. Registration Document 2011
Consolidated financial information for the last five years
TOTAL S.A. 11
6. Consolidated financial information
for the last five years
6.1. Summary consolidated balance sheet for the last five years
As of December 31
(M€)
2011 2010 2009 2008 2007
ASSETS
Non-curret assets 100,386 85,512 77,996 71,252 65,303
Intangible assets 12,413 8,917 7,514 5,341 4,650
Property, plant and equipment 64,457 54,964 51,590 46,142 41,467
Other non-current assets 23,516 21,631 18,892 19,769 19,186
Current assets 63,663 56,936 49,757 47,058 48,238
Inventories 18,122 15,600 13,867 9,621 13,851
Other current assets 45,541 41,336 35,890 37,437 34,387
Assets held for sale or exchange - 1,270 - - -
Total assets 164,049 143,718 127,753 118,310 113,541
LIABILITIES
Shareholder’s equity, Group share 68,037 60,414 52,552 48,992 44,858
Non-controlling interests 1,352 857 987 958 842
Provisions and other non-current liabilities 25,401 21,216 20,369 17,842 17,303
Non-curent financial debt 22,557 20,783 19,437 16,191 14,876
Current debt 46,702 40,251 34,408 34,327 35,662
Liabilities from assets held for sale or exchange - 197 - - -
Total liabilities 164,049 143,718 127,753 118,310 113,541
6.2. Consolidated statement of income for the last five years
As of December 31
(M€)
2011 2010 2009 2008 2007
Sales 184,693 159,269 131,727 179,976 158,752
Operating expenses (152,897) (131,963) (109,521) (150,534) (128,026)
Depreciation and amortization of tangible assets (7,506) (8,421) (6,682) (5,755) (5,425)
Other income and expense 699 496 (286) (185) 204
Cost of net debt (440) (334) (398) (527) (539)
Other financial income and expense 180 35 298 403 369
Equity share of net income from affiliates 1,925 1,953 1,642 1,721 1,775
Income tax (14,073) (10,228) (7,751) (14,146) (13,575)
Consolidated net income 12,581 10,807 9,029 10,953 13,535
Group share 12,276 10,571 8,447 10,590 13,181
Non-controlling interests 305 236 182 363 354
Registration Document 2011. TOTAL
321
322
TOTAL. Registration Document 2011
Corporate social responsibility 12
Corporate social responsibility
The methodological note concerning the information provided in Chapter 12 is available on the Company’s website
(www.total.com, heading CSR Analysts).
1. Employee policy 324
1.1. Group employee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .324
1.2. Organization of work time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .325
1.3. Dialogue with employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .326
1.4. Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .326
1.5. Equal opportunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .327
2. Health, safety and environment information 328
2.1. Occupational health and safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .329
2.2. Environmental protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .329
2.3. Consumer health and safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .333
3. Community development information 334
3.1. Stakeholder relationships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .334
3.2. Social and economic development of host communities and countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .335
3.3. Partnerships and philanthropy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .335
3.4. Fair operating practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .336
4. Other social, community development and environmental information 338
4.1. TOTAL and Canadian oil sands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .338
4.2. TOTAL and shale gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .338
4.3. TOTAL and new energies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .339
5. Third parties assurance reports 340
5.1. Assurance report on E&P and Refining data, on part of the informations and on the Group consolidation . . . . . . . . . . . . .340
5.2. Assurance report on G&P, Marketing and Chemicals data and on the rest of the informations . . . . . . . . . . . . . . . . . . . . . .342
Registration Document 2011. TOTAL
323
12 Corporate social responsibility
Employee policy
1. Employee policy
The quantitative information set out below about TOTAL’s employees worldwide relates to all the subsidiaries consolidated under the global
integration method. Some of the data comes from the Worldwide Human Resources Survey (WHRS), which uses almost one hundred
indicators measuring important factors of the Group’s employee policy. This annual survey is performed on a sample of employees from the
consolidated companies, representative of their distribution by business segment and region; when such WHRS data is mentioned in this
document, reference will be made to the relevant scope.
1.1. Group employee
1.1.1. Group employees
as of December 31, 2011(1)
As of December 31, 2011, the Group had 96,104 employees
belonging to 356 companies and subsidiaries located in 106 countries.
The tables below show, at year-end 2010 and year-end 2011,
the breakdown of employees by the following categories:
gender, nationality, business segment, region, and age bracket:
Group Employees as of December 31, 2011 2010
Total number of employees 96,104 92,855
Women 29.7% 29.4%
Men 70.3% 70.6%
French 36.1% 37.4%
Other nationalities 63.9% 62.6%
Breakdown by business segment
Upstream
Exploration & Production 16.7% 16.7%
Gas & Power 7.8% 1.8%
Downstream
Refining & Marketing 30.1% 34.6%
Trading & Shipping 0.5% 0.5%
Chemicals 43.4% 44.9%
Corporate 1.5% 1.5%
Breakdown by region
Mainland France 36.5% 37.9%
French Overseas Departments and Territories 0.4% 0.3%
Rest of Europe 23.4% 26.8%
Africa 9.6% 9.4%
North America 6.8% 6.7%
South America 7.5% 7.3%
Asia 14.1% 10.1%
Middle East 1.1% 0.9%
Oceania 0.6% 0.6%
Breakdown by age bracket
< 25 5.9% 6.4%
25 to 34 30.0% 27.4%
35 to 44 28.1% 28.7%
45 to 54 24.0% 25.5%
> 55 12.0% 12.0%
The workforce increased by 3.5% between 2010 and 2011. Events
with a significant impact on headcount included the investment in
SunPower and the disposal of part of the Resins business.
After France, at year-end 2011, the country with the most employees
was the United States, followed by Philippines, Belgium and China.
The breakdown by gender and nationality of managers or
equivalent positions (≥ 300 Hay points) is as follows:
Breakdown of managers or equivalent 2011 2010
as of December 31,
Total number of managers 26,836 25,998
Women 23.1% 22.7%
Men 76.9% 77.3%
French 41.1% 41.6%
Other nationalities 58.9% 58.4%
In 2011, the Worldwide Human Resources Survey covered 73,654
employees belonging to 124 subsidiaries.
Group included in WHRS WHRS 2011 WHRS 2010
Employees surveyed 73,654 66,644
% of Group employees 77% (a) 72%
(a) 81% excluding SunPower subsidiaries, which could not be included in the WHRS in 2011.
1.1.2. Employees joining and leaving TOTAL
As of December 31, 2011 2010
Total number hired on
open-ended contracts 9,295 8,792
Women 29.4% 30.7%
Men 70.6% 69.3%
French 12.8% 8.7%
Other nationalities 87.2% 91.3%
The number of employees hired on open-ended contracts in 2011 in
the consolidated companies increased by 5.7% compared to 2010.
The region in which the largest number of employees on open-ended
contracts was hired was Asia (30.5%), followed by Europe (29.8%),
and the business that hired most was the Chemicals (61.1%).
(1) Employees of the globally consolidated companies only.
324
TOTAL. Registration Document 2011
Corporate social responsibility 12
Employee policy
TOTAL also hired 3,321 employees on fixed-term contracts in the
consolidated companies. Over 500,000 job applications were
received by the subsidiaries covered by the WHRS.
As of December 31, 2011 2010
Departures excluding retirement/
transfer/early retirement 6,892 7,939
Death 119 146
Resignations 4,332 4,957
Redundancies/negotiated departures 2,199 2,619
Termination of employment contract
by mutual agreement (France) 242 217
Total departures/Total employees 7.2% 8.5%
1.1.3. Compensation
TOTAL’s approach to overall compensation (salary and
employee benefits) is guided by the dual imperatives of external
competitiveness, with salaries and social protection programs
positioned relative to local reference markets, and internal fairness.
These shared principles are adapted in line with local factors such
as labor laws, the economic context and the job market in the
various countries where the Group operates.
General and merit-based increases take place regularly. TOTAL may
also use tools that reward collective performance (for example, in
France, incentives and profit-sharing), together with base salary
supplements, such as bonuses or variable portions, to acknowledge
individual performance. The HSE (Health, Safety and Environment)
aspect in the future will also increasingly be taken into account by
TOTAL when evaluating individual and collective performance.
TOTAL has set out a HSE performance recognition policy in order
to acknowledge individual managers’ performance and collective
team performance.
1.2. Organization of work time
The average work week is determined by applicable local law.
It is less than forty hours in most of the subsidiaries in Europe and
Japan, and forty hours in most of the Asian and African countries.
It is longer in Mexico and India.
The sickness absenteeism rate is one of the indicators monitored in
the WHRS:
WHRS 2011 WHRS 2010
Sickness absenteeism rate 2.7% 2.8%
Within the scope of the WHRS, more than 91% of the Group’s
employees are paid at a rate higher than the applicable minimum wage.
The development of employee shareholding is another cornerstone of
the Group’s compensation policy. Employee shareholding aims to
foster a good understanding of the company’s core values and to
create a direct link with company performance. TOTAL thus grants
performance shares to a significant number of employees on the basis
of the Group’s achievement of overall economic goals. In
September 2011, the Board of Directors approved a stock option and
performance share plans benefitting approximately 10,000 employees.
The 2011 plan is the seventh implemented by the Group since the
granting of free shares to employees was permitted by French law
and includes a significant percentage of new beneficiaries (38%).
The Group also gave employees the opportunity to subscribe to
a capital increase, the subscription period for which ended on
April 1, 2011. Over 30,000 employees participated in the operation.
TOTAL also aims to develop employee savings and other employee
benefit programs (health insurance, life insurance, etc.) for its
employees. The Group has therefore set up a life insurance
program paying a minimum of two years’ salary. The Group targets
coverage for all employees, and the current percentage of
employees on open-ended contracts in the WHRS who benefit
from this scheme is 87%.
The pension and employee benefit programs improve every year.
Improvements include the gradual introduction of a supplementary
pension plan in certain Downstream subsidiaries (at year-end 2011
just over 4,000 employees in twenty eight countries, mainly in Africa,
were given the option of joining the plan) and the benchmarking and
introduction of supplementary health and life insurance plans in eight
Asian countries (5,500 employees as of June 2011).
For more detailed information, see points 5 and 6 of Chapter 5 of
this registration document.
Depending on current local law, there are several programs that aim
to create a better balance between work and private life and/or to
encourage equal career opportunities:
WHRS 2011 WHRS 2010
% of companies offering the option
of working part-time(a) 63% 70%
% of employees working part-time
of those given the option 5% 5%
% of companies offering the option
of teleworking 15% NA
% of employees involved in teleworking
of those given the option 3% NA
(a) The reduction in this percentage is explained by the differences in the scope of the
WHRS in 2010 and that of 2011.
Registration Document 2011. TOTAL
325
12 Corporate social responsibility
Employee policy
1.3. Dialogue with employees
TOTAL’s employees and their representatives have a privileged
position and role among the numerous stakeholders with which
the Group has and intends to develop regular dialogue (see also
paragraph 3.1 of this Chapter). In countries where employee
representation is not required by law, TOTAL strives to set up such
representation; there are therefore employee representatives in the
majority of Group companies, most of whom are elected. The
subjects covered by dialogue with employees vary from company to
company, but there are common major themes such as work time,
health and safety, compensation, training and equal opportunity.
WHRS 2011 WHRS 2010
Percentage of companies with
employee representation (a) 77.4% 86.2%
Percentage of employees covered by
collective agreements 70.3% 73.4%
(a) The reduction in this percentage is explained by the differences in the scope of the
WHRS in 2010 and that of 2011.
A structure for information and dialogue with European employee
representatives exists in the form of the European Works Council.
Its scope covers all European Union countries where the Group
operates as well as Norway. Another representative body,
the Group Committee, covers all Group activities in France.
Several unions and Senior Management have expressed an interest
in merging the Group Committee with the European Works Council
to form a single Europe-wide employee representative body. In this
regard, Senior Management has committed to opening negotiations
in a timely manner.
In France, on November 30, 2011, Senior Management and all
of the unions in France signed an addendum to the agreement
of July 4, 2000 on trade union coordination providing for dialogue
to continue at a Group level with the union coordinators within
a framework that reflects the legal and regulatory changes (act
of August 20, 2008).
In addition, every other year TOTAL carries out an internal survey to
gather its employees’ views and expectations with regard to their
work situation and perception of the company, locally and as a Group.
1.4. Training
TOTAL’s training activities are guided by four main objectives:
– supporting the policy of diversity and mobility within the Group
– sharing TOTAL’s corporate values, in particular with respect to
ethics and HSE;
– increasing technical skills and maintaining a high level of
operating performance;
– promoting employees’ integration and career development through
induction, management and personal development training;
through language and intercultural training.
The Group continues to provide significant training opportunities.
In 2011, 82% of employees covered by the WHRS attended at
least one training session, representing over 400,000 days of
training, for a total budget of €274 million.
Average number of days’ training/year per employee (including mentoring, excluding e-learning) WHRS 2011 WHRS 2010
Group average 5,8 6,6
By profit center
Upstream 9,5 11,4
Downstream 5,0 5,3
Chemicals 4,5 4,8
Corporate 2,4 2,5
By region
Africa 8,3 8,8
North America 7,9 5,0
South America 6,2 4,3
Asia 9,4 8,5
Europe 4,5 3,6
Middle-East 13,9 16,7
Breakdown by type of training given (including mentoring, excluding e-learning)
Technical 42% 47%
Safety 29% 27%
Other(a) 21% 18%
Language 8% 8%
(a) Other: management, personal development, intercultural.
Training approaches are adapted to suit the specific requirements
of individual regions or business segments. Remote training and
e-learning in particular are increasingly used. In 2011, an ambitious
e-learning program on fighting corruption, aimed at all employees, was
launched in twelve languages. Over 35,000 certificates were awarded
following the assessment carried out at the end of the training.
326
TOTAL. Registration Document 2011
Corporate social responsibility 12
Employee policy
1.5. Equal opportunity
From recruitment until the end of the employment contract, TOTAL
provides equal opportunities for all employees. An affirmative action
plan was launched to ensure that not only recruiters and career
managers, but also business unit managers comply with the
principle of equal opportunities.
Since 2004, the Group’s Diversity Council, chaired by a member
of the Executive Committee, has been overseeing activities with
a view to increasing the number of women employees, international
employees and local employees up to the highest levels of
management. Promoting diversity goes hand-in-hand with
combating all forms of discrimination within the Group, whether
in relation to openness to different social background, equal
opportunities for men and women or the hiring and retaining
of employees with disabilities.
In 2011, 75% of managers recruited were non-French, representing
over eighty nationalities. Several measures have been put in place
to facilitate the internationalization of management, including
harmonizing Human Resources practice (for example with regard to
hiring and annual performance review), increasing numbers of foreign
postings for non-French employees, and decentralizing training.
% of non-French 2011 2010
Employees in recruitment 87% 91%
Employees in management recruitment/JL ≥10 75% 74%
Employees 64% 63%
Employees in management/JL ≥10 59% 58%
Employees in senior management 23% 23%
1.5.1. Equal treatment for men and women
1.5.3. Measures promoting the employment
and integration of people with disabilities
In addition to the various collective agreements embodying its
commitment to equal treatment of men and women, TOTAL signed
in 2010 the Women’s Empowerment Principles - Equality Means
Business, set out by the United Nations Global Compact.
For over twenty years, TOTAL has set out its disability policy
through successive agreements signed with employee
representatives in France to promote the employment of workers
with disabilities.
The Group intends to continue to open more opportunities to
women in all the Group’s professions and to enable women to
obtain positions of responsibility on equal terms with their male
counterparts. In this regard, the Diversity Council monitors the
following indicators:
% of women 2011 2010
In recruitment on open-ended contracts 29% 31%
In management recruitment/JL≥10 28% 27%
Employees 30% 29%
In management/JL≥10 23% 23%
In senior management 15% 13%
TOTAL also participates in the BoardWomen Partners program,
which aims to significantly increase the proportion of women in
the boardrooms of large companies throughout Europe. At the end
of the 2011 Shareholders’ Meeting, 26% of the Board of Directors
of TOTAL was made up of women. For more detailed information,
see paragraph 1.1 of Chapter 5.
The Group also shows its commitment through agreements
or provisions relating to access to employment, maternity leave,
childcare facilities, working conditions, balancing work and
family responsibilities, and managing dual careers.
1.5.2. Internationalization of management
While promoting the direct recruitment of disabled people and
cooperation with the sheltered employment sector, TOTAL also
takes various types of action:
– in-house: leaflets, awareness sessions organized for senior,
line and HR managers, etc.
– externally: cooperation with recruitment agencies, information
and advertising aimed at students, attendance at specialized
recruitment forums, etc.
The Group also supports the integration, professional training
and retaining of workers with disabilities.
A framework agreement with all of the French representative
unions, renewed until 2012, sets out TOTAL’s policy in France with
regard to integrating people with disabilities into the work world.
1.5.4. Measures promoting
non-discrimination and diversity
In addition to basing its recruitment policy on the principle of
non-discrimination on the grounds of ethnicity, TOTAL is involved
in a number of initiatives to promote diversity. In France, the Group
is in particular a partner in the action taken by the Employment
and Diversity division of IMS-Entreprendre pour la Cité (Institut
Mécénat-Solidarité), with a view to facilitating the integration of
young graduates into the workplace.
With employees representing over 130 nationalities, TOTAL enjoys
great cultural diversity, and it is important that this be reflected at
all levels of the company and across all business segments.
TOTAL also works alongside several associations that help young
graduates from disadvantaged backgrounds to find jobs or support
them in further education.
Although it recruits for a highly varied portfolio of business
segments, usually with a large technical component, the Group
strives to prioritize local recruitment. Internships, VIE (Volontariat
International en Entreprise), a French program for voluntary work
abroad), scholarships and work experience are all ways in which
TOTAL is involved in integrating young people into working life.
Registration Document 2011. TOTAL
327
12 Corporate social responsibility
Health, safety and environment information
2. Health, safety and environment information
TOTAL’s health, safety and environment policy is based on the charter below:
Health Safety Environment Quality Charter
Total has based its policy in matters pertaining to health, safety, the environment and quality on the following ten principles:
Article 1
Total considers personal health and safety, operational safety, respect for the environment, customer satisfaction and listening to
stakeholders as paramount priorities.
Article 2
Total strives to comply with applicable laws and regulations wherever it conducts its business and supplements them, when appropriate,
with its own specific requirements.
Article 3
Total promotes among its employees a shared culture the core components of which are skills management, incident feedback, information
and dialogue. This process is driven by the leadership and exemplary conduct of management.
Article 4
Total favors the selection of its industrial and business partners on the basis of their ability to comply with its health, safety, environment
and quality policy.
Article 5
Total implements, for all its operations, appropriate management policies regarding health, safety, environment and quality risks which
are regularly assessed. No project development or product launch may be undertaken without a risk assessment covering the entire life
of the project or product.
Article 6
Appropriate health, safety, environment and quality management systems for each business undergo regular assessment involving
measuring the performance, setting milestones, formulating relevant action plans and instituting suitable control procedures.
Article 7
In order to respond effectively in the event of accidents, Total equips itself appropriately and establishes emergency procedures that are
periodically reviewed and regularly tested during exercises.
Article 8
Each person, at all levels, must be conscious in his or her job of his or her personal responsibility, giving due consideration to the prevention of
risks of accident, harm to health, environmental damage or adverse impacts on product and service quality. Vigilance and professionalism in
these fields are important criteria in evaluating the performance of each member of personnel, in particular for those in positions of responsibility.
Article 9
In matters of health, safety, environment and quality, Total adopts a constructive attitude based on open dialogue with stakeholders
and outside parties. Through its social commitment, it focuses on developing its activities in harmony with the neighboring communities.
Article 10
Total monitors and controls the Group’s energy consumption, greenhouse gas emissions, production of ultimate waste and impact on biodiversity.
The Group develops new processes, products and customer services in order to enhance energy efficiency and reduce environmental footprints.
The Group is engaged in exploring for and developing additional energy resources. Total thus actively contributes to sustainable development.
The Industrial Safety, the Sustainable Development and
Environment departments, together with the Security department,
report to the Corporate Affairs and provide support to the business
units and ensure that they implement policies that reflect the
principles of the charter in a concrete, effective manner.
In accordance with oil and gas industry good practice (set out in
the IPIECA reporting guidelines), the following information relates
to the activities, sites and industrial assets that TOTAL operates or
for which it has been given contractual responsibility for managing
operations, directly or through one of its subsidiaries. This is with
the exception of information about greenhouse gases, which is
also expressed as Group share of all assets in which TOTAL has
a stake. The SunPower subsidiary could not be included in the
results for 2011: this should be done beginning in 2012.
328
TOTAL. Registration Document 2011
Corporate social responsibility 12
Health, safety and environment information
2.1. Occupational health and safety
TOTAL’s occupational health and safety requirements for the
personnel working on its sites are set out in Health, Safety and
Industrial hygiene directives.
Indicators are used to measure the main results in these areas,
and monthly reporting of occupational incidents (LTIR: Lost Time
Incident Rate; TRIR: Total Recordable Incident Rate) is used to
monitor performance overall and by site. The Group does not
differentiate between the safety of its employees and that of
external contractors.
2011 2010
LTIR: number of lost time incidents
per million hours worked 1.3 1.6
TRIR: number of recorded incidents
per million hours worked 2.2 2.6
SIR: average number of days lost
per lost time incident 23.9 23.5
The indicators above include incidents and hours worked by Group
employees and contractors working on its sites.
Since 2010, the basic rules to be strictly followed by all personnel,
employees and contractors alike, in all of the Group’s business
areas worldwide, have been set out in a safety document entitled
“Twelve golden rules of occupational safety.” The Group’s internal
statistics show that in over 90% of severe or high potential severity
incidents in the workplace at least one of the golden rules had not
been followed. The roll-out of the golden rules was accompanied
by an awareness campaign throughout 2011 to ensure that all
employees know and understand the rules.
Regular site visits, presentations and seminars are organized with
the employee representatives on the European Works Council to
promote the golden rules and, more generally, raise awareness of
occupational safety issues.
2.2. Environmental protection
2.2.1. General policy
The main Group entities have Health, Safety and Environment (HSE)
departments or units that ensure compliance with both relevant
local regulations and internal requirements. The equivalent of
over 780 full-time equivalent positions dedicated to environmental
matters was identified within the Group for 2011.
The Group steering bodies, led by the Sustainable Development
and Environment department, have a threefold task:
– monitoring TOTAL’s environmental performance, which is
reviewed annually by the Management Committee and for which
multi-annual improvement targets are set;
– in conjunction with the business units, handling the various areas
for which they are responsible;
– promoting the internal standards to be applied by the Group’s
business units as set out in the charter.
In-house, TOTAL also promotes compliance of its environmental
management systems with ISO 14001. In 2011, 284 out of 860 sites
The Group’s directives are equally demanding with regard to
employee health. Requirements include a formal occupational risk
assessment (chemical, physical, biological or psychosocial), the
creation of a risk management action plan and medical monitoring
of staff in line with the risks to which they are exposed. Two main
indicators are monitored yearly:
2011 2010
Percentage of companies included in WHRS
offering employees regular medical monitoring 96% 98%
Number of occupational illnesses recorded
in the year (in accordance with local regulations)
per million hours worked 0.87 0.75
The main occupational illnesses identified at TOTAL are as follows:
– musculoskeletal disorders, which are the main cause of
occupational illness in over half of all recorded illnesses;
– pathologies related to exposure to asbestos (almost solely in
France due to the specific nature of legislation in this regard);
– hearing loss.
Nine French sites give their employees a questionnaire to complete
when they have periodic medical check-ups, which are used to measure
the impact of the reaction to the stress factors to which they may be
exposed. In-house, a “stress level observatory” follows up the results
of a survey conducted in 2010 of 3,000 employees, which found that
their stress level is below that of a panel of large French companies.
On a broader level, TOTAL is associated to promoting individual
and collective health in the countries where it operates (including
flu vaccination campaigns and prevention and screening programs
for certain diseases such as AIDS, cancer, malaria). Awareness
campaigns relating to lifestyle risks in particular have been
ongoing for several years (including anti-smoking and anti-drinking
campaigns, musculoskeletal disorder prevention programs).
operated by the Group were ISO 14001-certified. Of the 860 sites, sixty
are the most significant contributors to the emissions of their respective
segments; for TOTAL, these sixty sites account for over 90% of the
Group’s emissions of greenhouse gases, nitrous oxide, sulfur oxide,
and freshwater withdrawal. TOTAL has set a goal of having all of
these sites certified ISO 14001 by year-end 2012. This proportion
reached 97% by year-end 2011, compared to 92% in 2010.
The environmental risks and impacts of any planned investment,
disposal or acquisition subject to Executive Committee approval
are assessed and reviewed before the final decision is made.
TOTAL ensures that all employees are aware of its environmental
protection requirements. If necessary, employees are given training in the
required skills. TOTAL also raises employee awareness through internal
campaigns (in-house magazines, intranet, posters, etc.) and provides
annual information about the Group’s environmental performance
through circulation of the Corporate Social Responsibility report.
Two three-day training courses on all aspects of HSE are also made
available to the business units. “HSE Implementation” is aimed at
employees whose job is specifically to handle one or more HSE
Registration Document 2011. TOTAL
329
12 Corporate social responsibility
Health, safety and environment information
areas within an entity. “HSE for Managers” is aimed at senior
managers who are currently or will in the future be responsible
for a Group entity. Several of these courses took place in 2011.
2.2.2. Environmental impact
TOTAL implements an active policy of monitoring, managing
and reducing the environmental impact of its activities. As part of
this policy, emissions are identified and quantified by environment
(air, water, soil) so that the appropriate measures for their control
can be implemented.
Water, air
The Group’s activities generate chronic emissions such as fumes at
combustion plants, emissions into the atmosphere from the various
processes and discharges in wastewater. In order to reduce the
quantities emitted and, at the very least, to comply with applicable
regulations, TOTAL’s sites use various treatment systems:
– organizational measures (for example controlling peaks in SO2
emissions in accordance with weather forecast data, managing
combustion processes, etc.);
– technical measures (such as building wastewater treatment plants).
These measures can be preventive to avoid generating pollutants
(such as low-NOx burners for combustion plants) or curative (such
as biological treatment of process water to reduce the hydrocarbon
content of the final effluent).
To ensure the quality of its wastewater discharge, TOTAL has set a
target of complying with the hydrocarbon concentration requirements
(less than 30 mg/l) set out in the OSPAR standard, which is only
mandatory in the North Sea, for all of its offshore exploration and
production operations. For the third consecutive applicable year, the
Group achieved this goal on yearly average in 2011.
The table below shows changes in chronic emissions into the
atmosphere and discharged water quality:
2011 2010
SO2 emissions (thousands of metric tons) 91 99
NOx emissions (thousands of metric tons) 84 87
Hydrocarbons in discharged water
(metric tons, excluding exploration & production
and specialty chemicals) 50 74
Hydrocarbon concentration in water discharged
by exploration & production (mg/l) 20 22
Chemical oxygen demand (COD) in water
discharged by specialty chemicals (metric tons) 320 355
The decrease in SO2 and NOx emissions is primarily the result of
portfolio changes, notably the sale of the affiliate TOTAL EP
Cameroon at the beginning of 2011 and the reduction of the Group’s
refining activities. Operational improvements, of which some related to
the switch from liquid fuels to natural gas, also contributed significantly
to the overall decrease. The sharp decrease in hydrocarbons
discharged in the water is mainly the result of the continuous
improvement of the wastewater treatment in 4 refineries.
Soil
The risks of soil pollution related to TOTAL’s activities come mainly
from accidental spills (see paragraph 2.2.3 of this Chapter) and
waste storage (see below). The Group’s approach to preventing and
controlling these types of pollution is based on four cornerstones:
– leak prevention, by implementing industry best practice in
engineering and operations;
– maintenance at appropriate intervals to minimize the risk of leaks;
– overall monitoring of the environment to identify any increase in
soil pollution;
– controlling pollution from previous activities by means of
containment or reduction operations.
Decomissioned Group facilities (chemical plants, service stations,
mud pits or lagoons resulting from hydrocarbon extraction activities,
wasteland on the site of decommissioned refinery units, etc.) scar the
landscape and may, despite all of the precautions taken, be sources
of chronic or accidental pollution. TOTAL therefore remediates sites
when it leaves in order to allow new activities to be set up once the
future use of the land has been determined in conjunction with the
authorities. This continuous task is performed by various teams
within the Group, some of which form subsidiaries, such as RETIA,
which decontaminates former Chemicals sites in Europe.
Waste
TOTAL manages waste production across all of its activities.
This commitment is based on the following four principles, listed in
decreasing order of priority:
1. reducing waste at source, by designing products and processes
that generate as little waste as possible, as well as minimizing the
quantity of end-of-life products;
2. reusing products for a similar purpose in order to prevent them
from becoming waste;
3. recycling residual waste;
4. recovering energy, wherever possible, from non-recycled
products.
To this end, TOTAL has entered into a variety of partnerships:
– With Veolia, the Group is involved in the Osilub project to build a
used engine oil recycling plant in Le Havre, France. The plant
(TOTAL, 35%) is scheduled to begin production in 2012 and will
have a processing capacity of 120,000 metric tons per year
(50% of all the used motor oil collected in France); the recycled
oil will be used to make Vacuum Gas Oil (VGO) for refinery
production of lubricants or fuels.
– In March 2011, Total Energy Ventures (Group’s vehicle for
investing in new energy and environmental protection
technologies) acquired a stake in Agilyx, an American start-up
that has developed an innovative process to convert waste
plastic into crude oil. The first production unit, with a capacity of
around ten metric tons of plastic per day, is already in operation.
At the production sites, waste management is carried out in four
basic stages:
– waste identification (technical and regulatory);
– waste storage (soil protection and emission management);
– waste traceability, from production to disposal (notes, logs,
declarations, etc.);
– Waste processing, with technical and regulatory knowledge of
channels, under site responsibility.
330
TOTAL. Registration Document 2011
Corporate social responsibility 12
Health, safety and environment information
TOTAL particularly monitors hazardous waste treated externally:
2011 2010
Volume of hazardous waste treated
outside the Group (kt) 248 263
Environmental nuisance
TOTAL’s activities may cause environmental nuisances for residents
near its industrial sites. These are mainly noise and odors, but can
also be vibrations and road, sea or river traffic.
Most sites have a system for receiving and processing residents’
complaints so that they can be taken into account and the nuisance
reduced as far as possible. Monitoring systems can also be put in
place, such as sound level measurement at the site perimeter, or
networks of sensors to determine the origin and intensity of odors.
2.2.3. Accident risk
For further information, see point 2 of Chapter 4, “Risk factors”.
In addition to setting up management structures and systems,
TOTAL strives to minimize the industrial and environmental risks
inherent in its activities by:
– performing rigorous inspections and audits;
– training staff and raising the awareness of all parties involved;
– implementing an active investment policy.
In particular, TOTAL strives to prevent accidental spills. A common
technical risk management approach has been developed to
formalize this requirement at the Group’s industrial sites. The
methodology is being gradually implemented in all of its operated
businesses and sets out a risk analysis based on accident scenarios
for which the severity of the consequences and the probability of
occurrence are assessed. These parameters are used to create a
decision matrix that identifies the required level of mitigation.
Specifically with regard to shipping, the Group has an internal policy
setting out the rules for selecting vessels. These rules are based on
the recommendations of the Oil Company International Marine
Forum (OCIMF), an industry association made up of the main global
oil companies that promotes good practice in oil shipping, and on
its Ship Inspection Report (SIRE) Program.
In accordance with industry practice, TOTAL particularly monitors
accidental liquid hydrocarbon spills of a volume of more than one
barrel (159 liters). Spills that exceed a certain severity threshold
(whether in terms of volume spilt, toxicity of the product in question
or the natural environment affected) are reviewed on a monthly basis
and annual statistics are sent to the Group’s Management Committee.
All accidental spills are followed by restoration action aimed at
returning the environment to its original state as quickly as possible.
The table below shows the number and volume of accidental
hydrocarbon spills with an environmental impact and that are
greater than one barrel in volume:
2011
Number of hydrocarbon spills with an environmental impact 263
Total volume of hydrocarbon spills with
an environmental impact (thousands of m3) 1.8
NB: Soil on sites is deemed to form part of the natural environment unless it is sealed. 2010
values are not given because they are not comparable due to a change in methodology.
While risk prevention is emphasized, TOTAL regularly addresses the
issue of crisis management on the basis of identified risk scenarios.
In particular, the Group has emergency plans and procedures in
place in the event of an hydrocarbon leak or spill. These plans and
procedures are specific to each subsidiary in line with its structure,
activities and environment, while complying with Group
recommendations, and are regularly reviewed and tested during
exercises.
Also available to TOTAL’s subsidiaries, the PARAPOL (Plan to mobilize
Resources Against Pollution) alert scheme is used to facilitate crisis
management at Group level. Its main aim is to mobilize the internal
and external human and physical resources necessary to respond in
the event of pollution of marine, coastal or inland waters, without
geographical restriction, at any time, at the request of any site.
TOTAL and its subsidiaries have assistance agreements with the
main bodies specializing in oil spill management such as Oil Spill
Response Limited, CEDRE and Clean Caribbean & Americas. Their
role is to provide expertise, resources and equipment in all of the
regions where TOTAL has operations.
After the blowout on the Macondo well in the Gulf of Mexico,
TOTAL created three Task Forces to analyze risks at Group level
and make recommendations.
Task Force No. 1 examined the safety of deep-offshore exploration
and production (well architecture, bop-stack design, staff training
based on lessons learnt from serious incidents in the industry).
Its work resulted in the implementation of even more stringent
inspections and audits of drilling activities.
Task Force No. 2, in conjunction with the Global Industry Response
Group (GIRG) created by the OGP (International Association of Oil
and Gas Producers), is responsible for studying deep offshore oil
capture and the associated containment operations should a
pollution event occur in deep waters. This work will make it possible
to have capture devices available in the near future in several regions
of the world where TOTAL has multiple exploration and production
operations, such as the North Sea and the Gulf of Guinea.
Task Force No. 3 has worked on the revision of oil spill contingency
plans in order to improve TOTAL’s ability to respond to major
pollution related to a blow-out or complete loss of containment
from an FPSO. Its work has resulted in particular in a significant
increase in stocks of dispersants available within the Group.
2.2.4. Sustainable use of resources
Water
The distribution of the freshwater available worldwide varies greatly in
space and time. The issue of water consumption therefore requires
different responses depending on the regional and technical context.
In order to establish which of its facilities are affected by this issue
as a priority, TOTAL both:
– identifies water withdrawals and discharges on all of its sites;
– and identifies sites located in “water stress” areas (watersheds
that will have less than 1,700 m3 of renewable freshwater
available per person per year by 2025, according to the
Falkenmark indicator), using the Global Water Tool for Oil & Gas,
developed jointly by the World Business Council for Sustainable
Development and IPIECA.
Registration Document 2011. TOTAL
331
12 Corporate social responsibility
Health, safety and environment information
2011 2010
– Energy Network days and the Energy seminar provide opportunities
Freshwater withdrawals excluding
cooling water (million m3) 142 147
Percentage of Group sites, excluding
Marketing, located in water stress areas 44% NA
The “Optimizing water consumption on industrial sites” guide sets
out good practice for saving and recycling water on all Group sites.
In exploration and production, reinjecting water extracted at the
same time as the hydrocarbon back into the original reservoir is one
of the methods used to maintain reservoir pressure. The technical
specifications in force in TOTAL’s E&P division stipulate that this option
must be given priority (see Chapter 4 of this registration document).
At refineries and petrochemical sites, water is mainly used to
produce steam and cool units. Increasing recycling and replacing
water by air for cooling are TOTAL’s preferred approaches to
reducing freshwater withdrawals.
Although smaller volumes of water are involved, a growing number
of car washes at TOTAL-branded service stations are fitted with
water recycling units. This means that only the final rinsing of the
cars is done with public-supply water.
Raw materials
Hydrocarbons are the Group’s main raw material, and are an
energy material. Optimum use of hydrocarbons therefore lies in
what is known as “energy efficiency”, as described below.
Since 2011, TOTAL has measured the raw material loss rate for
each business unit. This is the percentage of converted raw
materials that are neither delivered to any of the business unit’s
customers nor used for energy purposes.
Raw material loss rate 2011
Hydrocarbon production business 2.5%
Refining business 0.6%
Petrochemical business 1.0%
Energy efficiency
TOTAL aims to control its energy consumption more effectively.
Internal documents (roadmaps and guides) describe the challenges,
set out methodologies and action plans, and include quantified
goals to reduce consumption.
In particular, a guide produced in late 2008 contains
recommendations for improving energy performance management
in the Group’s various business units. They have since set targets of
a 1 to 2% increase in energy efficiency depending on the segment.
2011 2010
Net primary energy consumption (TWh) 158 157
In early 2011, the Group’s internal structure relating to Climate and
Energy was changed:
– a decision-making body was created in the form of the
CO2/Energy Efficiency Management Committee, whose
guidelines (particularly greenhouse gas emissions and energy
performance targets) are validated by the Executive Committee if
necessary. It is based on a permanent energy efficiency task force
and, where applicable, temporary cross-business task forces;
for internal discussion, reflection and information-sharing.
In France, Energy Efficiency Certificates are awarded by the
Energy and Climate Administration in recognition of energy-saving
activities. Total is encouraging its customers to reduce their energy
consumption by 40 TWh (over the entire service life of the product)
in the 2011-2013 period.
Through the “Total Ecosolutions” program, the Group is also
developing innovative products and services that perform above
market average environmental performance, by curbing natural
resource use and/or environmental impact while providing the same
level of service. At year-end 2011, thirty-two products and services
(Marketing and Chemicals) bore the “Total Ecosolutions” label. For
instance, in 2011, Total Petrochemicals’ PPC 9612 polypropylene,
which significantly reduces the weight of packing crates by up
to 35%, was awarded the 2011 Packaging Oscar in the category
“Materials, Plastics section”. Total Excellium Diesel, which increases
fuel efficiency by 2.5% on average, also received the Total
Ecosolutions label in 2011.
Use of renewable energies
TOTAL only uses minimal quantities of renewable energy to power
its production sites.
However, the Group uses biomass to heat tertiary buildings such as
the one opened in 2011 by TIGF in Cugnaux, France, and has
installed photovoltaic panels on several of its buildings (CSTJF in
Pau, car park in Lacq, etc.) and certain wellheads.
2.2.5. Climate change
Greenhouse gas emissions
TOTAL has made reducing greenhouse gas emissions one of its
priorities and has established quantified targets to this end:
– a 50% reduction in flaring by 2014 compared to 2005;
– increasing energy efficiency by 1% per year in refining and by 2%
in petrochemicals and exploration and production.
2011 2010
Daily volumes of gas flared (million m3 per day) 10.0 14.5
Operated direct greenhouse gas emissions
(Mt equivalent, 100% of emissions from
sites operated by the Group) 46 52
Group share of direct greenhouse gas
emissions (Mt equivalent, from sites
in which TOTAL has a stake) 53 59
In 2011, the Group’s efforts resulted in a further reduction in direct
emissions of greenhouses gases from sites operated by TOTAL, of
around 5.2 Mt, a 10% decrease compared to 2010. Changes in the
assets portfolio (disposal of TEP Cameroun and Block 3 in Angola
and the fact that the SARA refinery was no longer operated
in 2011) explain 3.6 Mt of the decrease.
Further reduction comes from improved operational control of
emission sources and lower activity levels in some sectors,
particularly European refining.
– Flaring accounts for most of the operated greenhouse gas
emissions from TOTAL’s exploration and production activities.
332
TOTAL. Registration Document 2011
Corporate social responsibility 12
Health, safety and environment information
The Group has therefore taken proactive steps in recent years
relating to the design of projects and reducing flaring due to
operational contingencies, particularly the temporary failure of
equipment (such as compressors), the reliability of which has
been improved. These efforts resulted in a 1.7 Mt reduction in
emissions due to reduced flaring, partially offset by a 0.7 Mt
increase due to the energy that is necessary to reinject the non-
flared gas and a 0.4 Mt (eq. ) increase of methane venting.
– In refining, the decline in activities primarily linked to major
shutdowns directly resulted in a 0.7 Mt reduction in greenhouse
gas emissions in 2011 compared to 2010.
– Greenhouse gas emissions in the Chemicals business unit were
also reduced by 0.3 Mt, mainly as a result of N2O emission
management in the fertilizers business.
At the same time as managing its processes, TOTAL invests in
research and development in new technologies and innovative
solutions to reduce direct greenhouse gas emissions into the
atmosphere by other means.
The Group intends in particular to develop capture, transport and
storage technologies and for several years has been working on CCS
(carbon capture and storage) so that it can be used on its industrial
sites when the economic and regulatory conditions permit. Currently,
two production sites in which TOTAL has a stake, the Sleipner and
Snøhvit fields in Norway, are using these technologies. The research
program is ongoing, notably through a pilot project at the Lacq complex
in France, where CO2 is being captured by oxy-fuel combustion,
transported and stored in a depleted natural gas reservoir.
Adapting to climate change
Scientific work, as set out in publications by the Intergovernmental
Panel on Climate Change (IPCC), and notably in its assessment
reports and the special report on extreme climate events, tends
to show that climate change could lead to more extreme events.
The Group assesses the vulnerability of its existing and future
facilities, taking into account predicted climate change. More in-depth
scientific knowledge about climate forecasts, one element of which
will be the IPCC’s publication of a new assessment report in
Fall 2013, is eagerly anticipated.
Climate conditions are factored into the design of industrial facilities,
which are not only built to withstand extreme events observed in
the past but also to include additional safety margins.
In addition to adapting to climate change, limiting the effects of human
activity on the climate must remain a priority for everyone. TOTAL
advocates concerted action in this regard, particularly the emergence
of a balanced, gradual international agreement that prevents the
distortion of competition between industries or regions of the world.
2.3. Consumer health and safety
Many of the products that TOTAL markets pose a potential health risk
if they are incorrectly used. The Group, therefore, meets its current
and future obligations with regard to information and prevention in
order to minimize the risks throughout the product life cycle.
TOTAL uses various guidelines to ensure compliance with the vital
measures in place to promote consumer health and safety:
2.2.6. Protecting biodiversity
Due to the nature of its business, and particularly because new
exploration and production projects are located in potentially
sensitive natural environments, TOTAL’s operations are likely to
have an impact on biodiversity. More specifically:
– impacts related to construction sites, access roads, linear
infrastructures, etc., which can result in habitat fragmentation;
– physicochemical impacts leading to changes in environments
and habitats, or that might affect or interfere with certain species;
– contribution to the propagation of invasive species in terrestrial
and marine environments.
TOTAL is aware of these challenges and takes biodiversity into
account in its guidelines at a number of levels:
– the Health Safety Environment Quality Charter (see point 2 of this
Chapter), Article 10 of which specifies: “TOTAL (…) controls (…)
(its) impact on biodiversity”;
– a biodiversity policy that details the Group’s principles for action
in this area:
1. minimizing the impact of activities on biodiversity throughout the
lifetime of facilities;
2. incorporating biodiversity protection into the environmental
management system, particularly initial analyses and social and
environmental impact studies;
3. paying specific attention to operations in regions with particularly
rich or vulnerable biodiversity;
4. informing and raising the awareness of employees, customers
and the public, helping to improve understanding of ecosystems.
This policy is implemented by means of a number of tools and rules.
In exploration and production, rules and specifications govern the
performance of baseline surveys and environmental impact studies on
land or at sea. Since 2011 all Group entities have access to a detailed
mapping tool showing the world’s protected areas, based on data
provided by the UNEP-WCMC (World Conservation Monitoring Center).
TOTAL’s new projects are also covered by biodiversity action plans
based on the “Avoid, Reduce, Compensate” approach. As a result of
the first plan implemented in France, developed by TIGF for the Artère
du Béarn gas pipeline project, vulnerable areas and protected species
stations were avoided and the impact of the work was reduced
through the use of special tree clearance and river-crossing techniques.
Finally, TOTAL is involved in industry initiatives such as those
launched by IPIECA, which in 2010 resulted in the publication of a
guide to the issue of invasive species. Recommendations include
taking seasons into account when planning work and checking the
origin of the equipment used (see also paragraph 3.3 of this Chapter).
– the Health Safety Environment Quality Charter (articles 1 and 5;
see point 2 of this Chapter);
– a health policy that sets out the Group’s principles for action
in relation to accident prevention and protecting the health of
people in direct or indirect contact with its products, throughout
the entire product life cycle, including customers, users and
anyone else involved (health and products);
Registration Document 2011. TOTAL
333
12 Corporate social responsibility
Community development information
– a directive stating the minimum requirements for marketing
products worldwide in order to avoid or reduce potential risks
to consumer health and the environment.
TOTAL identifies and assesses the risks inherent in its products
and their use, and then informs customers and users of these
risks and the applicable prevention and protection measures.
The material safety data sheets (MSDS) that accompany
all products marketed by the Group (in at least one of the
languages used in the country) and product labels are two key
sources of information in this regard. All new products comply
fully with the regulatory requirements in the countries and markets
for which they are intended.
TOTAL registered a total of 214 substances in the first phase
of application of the European REACH (Registration, Evaluation,
Authorization and Restriction of Chemicals) regulations.
These regulations aim to protect the health of consumers and
professionals by means of a stringent assessment of the
toxicological effects for each substance use scenario and the
implementation of appropriate mitigation measures.
3. Community development information
Consistent with the values and principles set out in the Code of
Conduct, Ethics Charter and Health Safety Environment Quality
Charter (see point 2 of this Chapter), TOTAL places its commitment
to community development at the heart of its corporate responsibility.
This approach, which involves all Group business units and entities,
covers all action taken to improve its integration into the countries
where the Group operates.
TOTAL aims to act and to be known as:
– an energy company that places respect, openness, continuous
dialogue and transparency in relation to stakeholders at the heart
of its strategy;
– a responsible operator that can be welcomed for the long term,
setting an example in the responsible way that it manages the
impact of its activities;
– a partner in the sustainable human, economic and social
development of the communities and countries where it operates;
– a leading player in access to energy.
Formalized in 2011 through the “Sociétal Lab” internal procedure
and accompanied by a directive to facilitate its application within the
Group, this community development policy is one of the cornerstones
of TOTAL’s response to the challenges of sustainable development.
Over the last three years, the Group has invested in excess
of €200 million per year in community development.
3.1. Stakeholder relationships
For around twenty years, changes in the regulatory framework have
fostered the implementation of information, consultation or dialogue
procedures prior to decisions with a significant environmental
impact. In addition to its desire to comply with regulations, TOTAL
implements structures for dialogue with stakeholders at every level
of the Group. In particular, there is one employee at headquarters
responsible for relationships with NGOs.
To put its approach to community development at its sites and
subsidiaries on a professional footing, TOTAL implemented the
internal SRM+ (Stakeholder Relationship Management) tool in 2006.
This tool is used to identify and pinpoint the main stakeholders, to
schedule meetings with them and to record the expectations they
express, and then to create an action plan for building a long-term
relationship. In particular, communities neighboring TOTAL sites
often have questions about the impact of the Group’s activities on
health, safety and the environment. Entering into a dialogue with
local residents enables us to respond to these legitimate concerns.
In addition to SRM+, other schemes for dialogue appropriate to
TOTAL’s locations or businesses exist, such as:
– Community Advisory Panels in the United States, developed on
the initiative of the American Chemistry Council;
– Local Information and Consultation Committees in France,
pursuant to the French technological risk prevention act;
– the “Terrains d’entente” initiative, set up in 2002 within the
TOTAL Chemicals business unit to strengthen dialogue between
industrial sites and their surroundings;
– the Neighbors’ Conference, set up in 2007 by the Feyzin
refinery in France in conjunction with the Feyzin municipal
council. This forum for dialogue is made up of local residents
and helps to improve living conditions and relationships with the
site. It was recognized by the authorities as a consultation body
under the Technological Risk Prevention Plan;
– the launch in 2011, in the Lorraine region of France, of a
collective consultation procedure involving the stakeholders in all
of the Group’s business units operating in that region.
TOTAL is aware of the specificities of indigenous and tribal peoples
(as identified in the International Labor Organization’s Convention
No. 169), and has introduced a Charter of Principles and Guidelines
Regarding Indigenous and Tribal Peoples. Under this Charter and in
compliance with our Code of Conduct, we strive to get to know
and understand the legitimate needs of the communities
neighboring our subsidiaries.
334
TOTAL. Registration Document 2011
Corporate social responsibility 12
Community development information
3.2. Social and economic development of host communities and countries
Social and economic development
of neighboring or local communities
Wherever it operates, TOTAL has particular responsibility for the
social and economic development of the communities living near
its facilities. This aim is embodied in a variety of ways:
– firstly, a requirement for relevant investments and transparency
in its financial contribution (through the payment of taxes,
duties and royalties) to the development of host countries,
in accordance with local legislation;
– secondly, creating direct and indirect local jobs through a
customized contractual policy, as part of a long-term education
and training approach;
– finally, proactive support for the implementation of social
and economic development schemes in emerging countries.
Tailored to community expectations, these schemes are run
in partnership with local organizations and authorities and are
sometimes accompanied by health and education initiatives.
In all its actions, TOTAL is careful not to take the place of the local
authorities, but works alongside them to strengthen or leverage
their initiatives, while ensuring that it:
– fully supports the legitimacy of local social and economic
development or health schemes;
– prevents dependency on TOTAL’s presence, promoting
self-sufficiency over aid;
– ensures the success of projects that require knowledge of local
To help French people in a situation of “fuel poverty,” TOTAL signed
an agreement in September 2011 with the French National Housing
Agency (ANAH) to join the “Habiter mieux” program, overseen by the
French Ministry for Ecology, Sustainable Development, Transportation
and Housing. Under the agreement the Group has committed to
funding work to refurbish the heating of 16,000 homes by 2013.
Developing regional economies
TOTAL’s activities generate hundreds of thousands of direct
and indirect jobs worldwide. The Group’s purchasing activities
alone represent roughly €25 billion. This presents the Group
with numerous challenges with regard to its impact on the
environment, society and community development, all of which
are taken into account in the Group’s relationships with suppliers
(see paragraph 3.4 of this Chapter).
In addition to the jobs generated by its activities, the Group has a
proactive policy of supporting small and medium-sized businesses
in France and worldwide, particularly through Total Développement
Régional (TDR). The aim of this body is to promote job creation and
skill sharing by backing business creation, expansion or buy-out plans.
Although there is usually no economic or social crisis surrounding
these measures, TDR can also support planned employment area
regeneration programs alongside the redeployment of the Group’s
activities.
The support provided forms a major component of TOTAL’s economic
and social responsibility policy and takes a number of forms:
cultures that its employees do not necessarily have.
– financial backing for the creation, buy-out and expansion
The Group’s expertise is based on continuous professionalization
of its community development engineers. Tools such as structuring
projects, setting goals and defining monitoring and assessment
indicators have enabled us to progress from an aid-giving approach
to one of collaborative construction in which communities take
charge of their own development.
TOTAL is supported in this by NGOs specializing in community
development action, which have extensive practical experience.
These organizations help the Group increase the effectiveness
of the social and economic development programs it supports,
particularly by encouraging it to take into account the entire life
cycle of its projects, from the design phase to shutdown. There are
already over three hundred full-time employees working in this area
at headquarters and at the exploration and production subsidiaries.
3.3. Partnerships and philanthropy
Corporate philanthropy
The Group’s philanthropic activities are largely coordinated by two
bodies, the TOTAL Foundation, set up in 1992 after the Rio Earth
Summit, and the Philanthropy Department.
The TOTAL Foundation’s work originally focused on environment
and marine biodiversity, but in 2008 its by-laws were changed
to cover the Group’s other areas of philanthropy. The Foundation,
which celebrates its 20th anniversary in 2012 now operates
in four areas: marine biodiversity; heritage and culture; health;
of SMEs, and support for regeneration;
– export and international expansion support;
– technology support and assistance to innovative SMEs;
– other forms of support such as management or accountancy
training prior to granting financial backing and appropriate to the
context of each country.
In the last ten years, TDR has provided over €60 million in financial
assistance for 1,000 SMEs, supporting some 15,000 jobs.
TOTAL’s regional development policy is becoming increasingly
international, both in Europe and in the emerging countries where
it operates.
and community support. It has a €50 million five-year action plan
which is now in its fourth fiscal year.
– With regard to the environment, the Foundation funds programs
aimed at improved knowledge, protection and enhancement of
marine and coastal species and ecosystems. The Foundation
donated €3 million in this area in 2011.
– The Foundation promotes cultural dialogue by supporting
exhibitions that showcase the heritage and arts of both France and
the Group’s host countries. With the French heritage association
Fondation du Patrimoine, it supports the preservation of traditional
Registration Document 2011. TOTAL
335
12 Corporate social responsibility
Community development information
crafts and industry and the restoration of heritage sites in France.
The Foundation donated €4 million to such initiatives in 2011.
– In the field of health, the Foundation works alongside the Pasteur
Institute to combat infectious diseases. Under the aegis of
Professor Françoise Barré-Sinoussi, winner of the 2008 Nobel
Prize in Medicine and scientific consultant for the partnership,
a budget of €2 million per year is devoted to research and
community action programs.
– The Foundation encourages Group employees to engage with the
community through a number of initiatives including sponsorship,
support for projects championed by non-profit organizations with
which employees volunteer on a personal basis, etc.
In addition, the Group’s Philanthropy Department enters into
partnerships with major institutions. In 2009, TOTAL committed to
donating €50 million over six years to the Fonds d’expérimentation
pour la jeunesse, a community development fund for youth run by
the French Education Ministry. It aims to support innovative social
action designed to inspire public policies promoting educational
success and the social and professional integration of young
people. In 2008, TOTAL committed to €10 million of funding over
five years for the French search and rescue association,
Société nationale de sauvetage en mer, to design and implement
cutting-edge safety equipment. The disbursements for philanthropy
of Total SA (including its Foundation) reached €28 million in 2011.
Educational partnerships
TOTAL firmly believes in the importance of a “localization” policy,
and aims to enable its employees in countries outside France to take
up positions of responsibility within their local subsidiaries. As part of
its social programs, the Group therefore offers local and international
3.4. Fair operating practices
Preventing corruption
The amounts of money involved and the diversity of the various
regions require the oil industry to be particularly vigilant about
corruption and fraud. Around one-quarter of TOTAL employees
work in countries considered to be high-risk in this regard.
Reinforcing integrity and preventing corruption and fraud therefore
constitute a major challenge for the Group and all its employees.
TOTAL’s stance on the issue of corruption is based on clear principles,
set out in 2000 in the Code of Conduct: “TOTAL rejects bribery and
corruption in all forms, whether public or private, active or passive”.
The Code of Conduct sets out the principles governing the actions
and individual behavior of each person, both in their day-to-day
decisions and in their relations with stakeholders. In this Code
TOTAL reiterates its support for the OECD Guidelines for
Multinational Enterprises and the United Nations Global Compact,
the tenth principle of which invites companies to act against all
forms of corruption.
In May 2008, the Chief Executive Officer made a clear
commitment to rejecting corruption in the introduction to
the Business Integrity Guide. This commitment is expressed
concretely through various actions:
scholarships to create skilled local workforces for future hiring.
Thousands of students are thus given the opportunity to pursue their
studies in their country of origin or at the world’s leading universities.
TOTAL’s international scholarship program has also enabled over
five hundred students from twenty-six countries to study in France
for engineering and master’s degrees, MBAs and doctorates.
In addition, with support from other major groups, in autumn 2011,
TOTAL, Paris Tech and the École polytechnique introduced the
Renewable Energy Science and Technology Master II postgraduate
degree program, which is open to international graduates from the
world’s leading universities. TOTAL has also signed a three-year
philanthropy agreement with the Institut d’études politiques
(Sciences Po), France’s leading social sciences university, to educate
and recruit the best students from disadvantaged backgrounds.
Another of the Group’s flagship educational initiatives is the annual
Total Energy and Education Seminar, which was held for the third
time in Paris in early 2011 and brought together fifty professors
from forty-five universities in twenty-two countries. The academics
and some twenty TOTAL managers as well as external experts
discussed issues such as the future of energy, climate change,
relationships between universities and business, and the impact
of globalization on education and human resources management.
The sixth Total Summer School took place in Paris in July 2011,
attended by twenty postgraduate students from twenty-four
countries to debate energy challenges.
In Africa, the Group’s Downstream segment is developing
partnerships with several regional higher education institutions. The
aim is to develop the talent required for TOTAL to further its goals in
that continent. In June 2011, a third regional partnership was signed
in Senegal with the African Center for Higher Management Studies.
– creation of the Compliance and Corporate Social Responsibility
Department within the Group Legal Department, which is now
backed by a network of over 300 compliance managers in
the Group’s various business units, entities and subsidiaries;
– publication of the Business Integrity Guide; 50,000 copies
have been circulated and an interactive version is available
on the Group intranet sites;
– in 2009, approval by the Executive Committee of the Corruption
Prevention Policy and Compliance Program, which includes the
creation of a dedicated compliance structure;
– in 2011, decision of the Executive Committee to strengthen
fraud and corruption prevention by establishing a Business
Integrity Policy and Program; an ambitious e-learning program
has been introduced on the subject (see also paragraph 1.4
of this Chapter).
Human rights
Although ultimate responsibility for human rights lies with
governments, the activities of companies can affect the human
rights of the employees, partners or communities with which they
interact in numerous ways. In addition to being an ethical
336
TOTAL. Registration Document 2011
Corporate social responsibility 12
Community development information
commitment for TOTAL, adopting a proactive approach to human
rights within the company is vital for its smooth functioning. This
approach helps to establish and maintain successful relationships
with all stakeholders.
TOTAL’s Code of Conduct formally recognizes the Group’s support
for the principles of the 1948 Universal Declaration of Human
Rights, the key conventions of the International Labor Organization,
the OECD Guidelines for Multinational Enterprises and the
principles of the United Nations Global Compact. TOTAL is also
actively involved in a number of human rights initiatives and working
groups coordinated by the Global Compact, such as the Human
Rights Working Group, the Responsible Investment in Conflict-
Affected Countries Working Group and the Anti-Corruption Working
Group. Created in 2010, the Global Compact LEAD (Initiative for
Sustainable Leadership) has fifty-four members, of which TOTAL
is the only French company.
Internally, in order to spell out its human rights position and
initiatives, TOTAL has created a Human Rights Coordination
Committee, organized by the Chairman of the Ethics Committee.
A discussion forum meets every other month: its members include
representatives of the Human Resources, Public Affairs, Legal,
Security and Sustainable Development Departments. This
committee coordinates the initiatives taken by the Group’s various
business units, and its meetings mainly address international
initiatives, human rights tools under development and civil society
projects. The introduction of specific internal policies and
procedures (in progress or pending) is also discussed.
In line with the United Nations guiding principles on business and
human rights, TOTAL’s human rights approach is based on several
cornerstones:
1. Written principles: in accordance with its Code of Conduct,
the Group has adopted principles appropriate to its operations
and those countries in which it operates, some of which are set
out in the Human Rights Internal Guide published in 2011.
2. Awareness campaigns: to ensure that its human rights principles
are disseminated in-house, TOTAL raises employee awareness
via internal communications channels such as the Ethics and
Security intranet sites, and through specific training programs
tailored to the various challenges encountered in the field.
These training programs are listed in the TOTAL University
Ethical, Environmental and Social Responsibilities catalogues.
3. Listening and advice bodies: two dedicated bodies, the Ethics
Committee and the Compliance and Corporate Social
Responsibility Department, are available to advise employees
and coordinate efforts to promote human rights. All employees
experiencing difficulties in the practical implementation of the
Code of Conduct should first turn to their line manager;
if necessary, they can contact the Human Resources
Department or take their concerns to the Ethics Committee.
The Ethics Committee is a central, independent structure that
represents all of TOTAL’s business units. Its role is to listen to,
support and advise both employees and people outside the
Group. The Committee maintains complete confidentiality with
regard to referrals; this can only be lifted with the agreement
of the person involved.
4. Assessment tools: these are used for regular assessment of
subsidiaries’ human rights risks and compliance. They analyze
the impact of local projects (social implementation assessment)
or check that subsidiary practice complies with Group standards
(compliance assessment). Some of these tools are implemented
by independent experts, such as GoodCorporation and the
Danish Institute for Human Rights; action plans are created and
monitoring reviews are conducted to take into account the
results of these assessments.
Contractors and suppliers
In its Code of Conduct, TOTAL states that it expects its suppliers
to respect principles equivalent to those that it abides by.
A document entitled “Fundamental Principles in Purchasing” sets
out the Group’s commitments with regard to preventing corruption,
compliance with the rules of free competition, respect for
fundamental principles and rights at work, protecting health and
the environment and promoting economic and social development.
TOTAL suppliers are made aware of these rules, which are covered
by specific contract clauses for major calls for tenders.
Questionnaires focused on environmental and social challenges
are used to gather more in-depth information from suppliers about
their approach to these subjects, either during prequalification
or as part of an audit. This aspect of supplier relationships can also
be examined in ad hoc ethical assessments of Group subsidiaries
or entities, performed by GoodCorporation.
In addition, a sustainable purchasing cross-business task force,
bringing together the different business units and the Purchasing
and Sustainable Development Departments, was set up in 2011.
Its role is to strengthen TOTAL’s sustainable purchasing policy
on the basis of initiatives introduced in each business. Its roadmap
has been validated by the Group Purchasing Committee.
TOTAL has also entered into a partnership with the Danish Institute
for Human Rights to improve the tools and processes it uses to
assess its suppliers’ approach to their environmental and social
impact. This work takes the form of pilot projects in specific
purchasing categories through an operational approach.
Registration Document 2011. TOTAL
337
12 Corporate social responsibility
Other social, community development and environmental information
4. Other social, community development
and environmental information
4.1. TOTAL and Canadian oil sands
With the development of five major projects in Canadian oil sands,
TOTAL expects to produce 200 kb/d of bitumen within ten to fifteen
years. It is essential that the environmental challenges, and in
particular the impact on water, the rehabilitation of the land and
the ecosystems affected, together with greenhouse gas emissions,
be taken into account. For several years, TOTAL has been actively
involved in the various collaborative research initiatives undertaken
by the Canadian industry into these areas, and has invested over
CAD 20 million each year.
In order to restrict water consumption on the Surmont (50%) in situ
project, the Group worked alongside the operator to optimize water
use and recycling. For Phase 2 of the project, the chosen option
goes even further, with water being withdrawn preferably from
saline aquifers and not from freshwater aquifers or rivers, which
will lead to additional processing costs. On Joslyn North (38.25%,
operator), TOTAL has committed to building a freshwater storage
facility sufficient for ninety days of production in order to reduce
withdrawals from the Athabasca River in low flow periods.
The Group is also involved in oil industry work to improve
management of the waste associated with developing oil sand
mines, which has historically been stored in tailing ponds. For
Joslyn North, TOTAL is planning to use processes to segragate
tailings streams and thicken the fine tailings, and even flocculation
and centrifuging, in order to significantly reduce the size of the tailing
ponds and ensure that they are consolidated within several years.
4.2. TOTAL and shale gas
TOTAL has interests either as operator or partner in several shale
gas licenses in Poland, Denmark, the United States and Argentina.
In each of these countries, the Group’s environmental and social
charters, complemented by local laws, provide the framework of
these operations.
The environmental challenges associated with shale gas
development include reducing the quantity and impact of chemical
additives, optimizing water management, and reducing the visual
impact and nuisance caused by the operations. Total puts these
environmental issues at the heart of these operations. Total relies
on its technical expertise and the contributions of its research and
development teams to identify and create innovative solutions,
where needed.
In Europe, where TOTAL has stakes in Denmark (operator) and
Poland (partner), the Group’s efforts are focused on listening to its
contacts so that its operations can proceed in a way that is
As open-pit mining of oil sands disturbs land and ecosystems,
TOTAL is committed to their sustainable rehabilitation throughout
its operations, taking into account the specific features of the
boreal forest; 60% of the rehabilitation work at Joslyn North
should be completed at the end of mining, and the rest in
the next seven years.
Over and above Canadian industry’s efforts to reduce greenhouse
gas emissions from the entire oil sands production chain (which are,
over a complete “well to wheel” lifecycle, approximately 10 to 15%
higher than the average for conventional crude, according to Group
estimates), TOTAL plans to install cogeneration units at its mines.
The Group is also involved in carbon capture and storage project
analyses in Alberta.
Mindful of its responsibilities to its stakeholders and neighbors,
and particularly the First Nations, TOTAL opened a permanent
office in Fort McMurray in 2006. Since that time, the Group has
signed social and economic agreements with the Fort McKay,
Athabasca Chipewyan and Mikisew Cree First Nations, and with
the Regional Municipality of Wood Buffalo. These agreements
reflect TOTAL’s commitment to engaging in dialogue and creating
added value shared with the communities living near its facilities
(see paragraph 3.1 of this Chapter).
For more information visit
http://www.total-ep-canada.com/csr/responsibility.asp
acceptable to all stakeholders. TOTAL firmly believes that shale
gas has a place in the European energy mix, and represents a
considerable economic opportunity through the resulting
development of dedicated services and industries.
In the United States, TOTAL is a partner in the appraisal and
development of shale gas licenses in the Barnett (Texas) and Utica
(Ohio) plays. Chesapeake, the operator, acts in accordance with the
specific legislation in each state, and is committed to reducing its
environmental footprint, publishing a list of the chemicals used,
recycling produced water, and limiting gas emissions into the
atmosphere.
In Argentina, where TOTAL has stakes as either operator or partner
in several exploration licenses in the Neuquén Basin, operations are
also conducted in compliance with local regulations and the
Group’s charters.
338
TOTAL. Registration Document 2011
Other social, community development and environmental information
Corporate social responsibility 12
4.3. TOTAL and new energies
Although fossil hydrocarbons will continue to play a central role in
the coming decades, in the long term all types of energy will have
to be deployed to meet global demand. They will therefore be
complementary. TOTAL decided long ago to invest in new energies,
and its strategy is based on two main areas: solar and bioenergy.
In the transportation sector, biofuels, particularly 2nd and
3rd generation, should be able to meet the challenge of reducing
greenhouse gas emissions while increasing the total fuel supply.
Currently, biofuels are the only substitute for the kerosene used by
the aviation industry.
In concrete terms, TOTAL has partnerships with several companies
in the United States and France:
– Amyris since June 2010, with the aim of developing and
marketing biodiesel, biojet fuel and biolubricants by 2016 through
its advanced synthetic biotechnology platform. Amyris owns
research laboratories and a pilot unit in California and has one
operational production unit in Brazil, with another under
construction. In late 2011, TOTAL and Amyris announced that
they were strengthening their strategic partnership by setting up
a joint R&D program and creating a joint venture:
- increasing R&D efforts in order to develop biodiesel and biojet
fuel. TOTAL has committed to contributing $105 million to the
estimated $180 million of funding required for the program;
- creating a 50-50 joint venture company that will have exclusive
rights to produce and market biodiesel and biojet fuel
worldwide, as well as non-exclusive rights to other renewable
products such as drilling fluids, solvents, polymers and specific
biolubricants. The joint venture is expected to be operational in
the first quarter of 2012.
– Futurol (pilot unit started up in October 2011), a second-
generation bioethanol project in the Marne region of France.
TOTAL sits on the scientific committee and provides its industrial
expertise in incorporating biocomponents into existing fuels;
– BioTfueL (November 2011), a pilot project to develop and market
a second-generation biodiesel and biokerosene production
chain. One of the pilot units (gasification, purification and
synthesis) will be installed on TOTAL’s site in Flandres (France),
with production start-up expected in 2020.
The other area is solar energy. TOTAL firmly believes that solar
energy has significant potential for development. Solar energy
has a much lower environmental footprint compared to fossile
fuels and the rapid fall in costs currently being seen in the
industry means that it will be a competitive way of producing
electricity within a few years. Grid parity has already been
reached on some markets (such as California). In light of this
transition to a mature market, the Group must maintain its
R&D efforts and work to reduce production costs.
In 2011, TOTAL increased its commitment to solar energy to
become one of the world leaders in this field, through:
– the acquisition of a 60% stake in SunPower in June 2011. The
company produces the most efficient solar panels on the market;
– the takeover of Tenesol in late 2011 and the merging of Tenesol
with SunPower in January 2012. As a result of the operation,
TOTAL now owns 66% of SunPower.
The ongoing construction of a solar panel plant (44 MWp) using
SunPower’s cutting-edge technology in Saint-Avold (France).
Commissioning is expected in 2012.
Registration Document 2011. TOTAL
339
12 Corporate social responsibility
Third parties assurance reports
5. Third parties assurance reports
5.1. Assurance report on E&P and Refining data,
on part of the informations and on the Group consolidation
Year ended December 31, 2011
This is a free translation into English of the original report issued in French and is solely provided for the convenience of English speaking
readers. This report should be read in conjunction with, and construed in accordance with French law and professional auditing standards
applicable in France.
To the shareholders,
At Total’s request, and under the provisions of article L. 225-102-1 of the Trade Code (Grenelle II Law of July 12, 2010), we present you our
report on the aspects of environmental and social performance data selected by Total and presented in the Management report established
for the financial year ended December 31, 2011.
The Board of Directors was responsible for preparing the Group Management report which includes environmental and social information (the
“Information”), defining the appropriate Guidance (the “Guidance”) to establish the numerical data(1) (the “Data”) and to ensure their availability.
The Guidance can be consulted at Total’s headquarters and a summary is presented in the Reporting Scope and Method note available on
the Group’s website.
Independance
Our independence is defined by the Code of Ethics from IFAC (International Federations of Accountants).
It is our responsibility, on the basis of our procedures:
– to check, in this report, the completeness of the disclosure of all information required in the January 2012 draft version of the decree
and alert, when necessary, information omitted or not supported by relevant explanation;
– to express a conclusion on the sincerity of the Information and a limited assurance conclusion on the Data presented in Chapter 12
of the Group Management report.
Our procedures were conducted in compliance with the professional standards applicable in France and the International Standard on
Assurance Engagement (ISAE 3000), published in December 2003. We performed a limited review, described below, to provide a limited
level of assurance that the Data are free of material misstatement. A higher level of assurance would have required a more extensive review.
Nature and scope of our procedures
We conducted the following procedures:
– We understood priorities and strategies of the Group toward a sustainable development, with respect to social and environmental impacts
of Group activities, its commitments toward the society and, when relevant, related mitigation actions or programs. We compared the list
of Information with the requirement of the draft decree of January 2012. In particular, our procedures covered the following items:
- for environmental Information: climate change, environmental policy, contamination and waste management, sustainable use of resources
- for social Information: equality of treatment, employment, training, work organization, social relationship, compliance with basic conventions
- health and safety related Information
– We assessed the Guidance defined by the Group with regard to its relevance, reliability, understandability, objectivity and completeness,
considering, when appropriate, sectoral best practices.
– We performed a review to ensure that reporting process aims at providing complete and consistent information to the Board of Directors;
we identified representatives responsible for implementing this process; we reviewed the presence of internal control procedure and risk
management system;
– We met with the relevant persons at the corporate level responsible for reporting the Data, in the Exploration & Production and Refining
businesses, to assess the application of the Guidance, we implemented analytical procedures and consistency checks, and we verified,
on a test basis, the consolidation of the Data;
– We have selected a sample of sites taking into consideration their activity, their contribution to the consolidated data for the Group, their
location and the findings of our previous reviews:
- 6 sites(2) or subsidiaries for the environmental Data,
- 4 sites(3) or subsidiaries for the social Data.
(1) Numerical data of 2011 presented in the tables of Chapter « Social information » and « Environment, health and Safety Information », except data related to LTIR, TRIR and SIR for which only
the consolidation process was reviewed.
(2) Exploration & Production: subsidiaries Total E&P Congo (Congo), Total E&P Indonesia (Indonesia) and Total E&P Borneo B.V (Brunei); Refining: subsidiaries Total Raffinaderij Antwerpen (Belgium),
Total Feyzin Refinery (France) and Total Provence Refinery (France ).
(3) Exploration & Production: subsidiaries Total E&P Congo (Congo), Total E&P Indonesia (Indonesia) and Total E&P Borneo B.V (Brunei); Refining: subsidiary Total Raffinaderij Antwerpen (Belgium)
340
TOTAL. Registration Document 2011
Corporate social responsibility 12
Third parties assurance reports
The selected sites and subsidiaries accounted for 24% of the consolidated greenhouse gas emissions for Total and 3.5% of the consolidated
workforce.
– At the site and subsidiary level, we verified the understanding and application of the Guidance, and conducted detailed checks
on a sampling basis which consisted in checking the calculation formulas and reconciling the data with the supporting documents.
– We took note of verification conclusions provided for the Gas & Power, Marketing and Chemicals businesses;
– And we conducted consistency tests on the consolidation of the Information.
Comments on the guidance and data
Detailed information related to the establishment of the Data is presented in the Reporting Scope and Method note available on the Group’s website.
We draw your attention to the following comments on the Guidance and Data:
Social Reporting
– Total’s social reporting data is based on a reporting software deployed at all units in the review’s scope. This software has made social
data collection more reliable, in particular by automating checks and facilitating consolidation;
– the software reports the number of part-time positions or telecommuting positions on an all or nothing basis by site and subsidiary and
therefore does not represent the real share of employee who can benefit from these work conditions.
Environmental Reporting
– the corporate Guidance is cascaded to each business and segment, which adjust the reporting process to Total’s various activities;
– the calculation rules to evaluate the staff number dedicated to environmental issues are not consistent between sites and subsidiaries and
not sufficiently detailed in the Guidance;
– in the absence of reliable data from operators of assets in which Total has interests without operating it, the non-operated greenhouse
gas emissions are estimated based on theoretical projections creating uncertainty related to the total amount of these emissions;
– in Exploration & Production (E&P) subsidiaries, the measurement methods of freshwater drawn are not reliable, resulting in uncertainty
concerning the data reported.
We consider that our procedures provide a sufficient basis for the conclusion expressed below
Conclusion
Completeness check
We checked the completeness of the Group Management report with regards to the information required by the Board of Directors
on the basis of the draft decree of January 2012; with the exception of soil utilization, for which the non-relevancy rationale presented
by the Group appeared sufficient.
Conclusion on the Information and the Data
For the social and environmental Information and Data provided in the Management report, as well as the related explanation, we express
the following qualifications:
– methods to calculate the number and volume of spills which reach the environment are not consistent between sites and subsidiaries,
resulting in heterogeneous consolidated data;
– regarding the number of training days, the type of training as well as the calculation methodology was not fully understood within some
of the audited sites, affecting the reliability of this indicator.
On the basis of our review, and except for the qualifications listed above, nothing has come to our attention that causes us to believe that:
– the Data have not, in all material respects, been prepared in accordance with the Guidance;
– the social and environmental Information have not been presented in a sincere fashion.
Paris-La Défense, February 22, 2011
Ernst & Young et Associés
Christophe Schmeitzky
Associé
Département Environnement et Développement Durable
Registration Document 2011. TOTAL
341
12 Corporate social responsibility
Third parties assurance reports
5.2. Assurance report on G&P, Marketing and Chemicals data
and on the rest of the informations
Year ended December 31, 2011
Assurance of the social and environmental information
Objectives and Scope of Work
At Total’s request, Bureau Veritas Certification performed an independent review to provide an opinion on the reliability of the social
and environmental information produced by Total in its reference registration document, and provide a moderate level of assurance
on the quantitative data.
We examined the following elements within the framework of the current project of decree for the implementation of Article 225 of the law
n°2010-788 of July 12th, 2010 called “Grenelle II”. This applied to the all information categories including Social, Environmental, Safety,
Societal and Health related data, with a specific focus on:
– the accuracy and reliability of the quantitative environmental and social data provided by the Gas & Power, Chemicals and Marketing
businesses and consolidation at the Group Level; and
– the qualitative assertions in the registration document and sustainable development report, regarding the social information
(e.g. occupational illness, fundamental conventions) and environmental information (e.g. risk prevention, water supply, biodiversity).
The scope of work concerns activities over the reporting period January 1st to December 31st 2011.
Responsibilities
The preparation, presentation of data and content related to social and environmental reporting is the sole responsibility of Total. The information
has been coordinated by the Sustainable Development and Environment Department and Corporate Human Resources according to:
– the Corporate Procedure for the Environmental Performance Reporting (EPR) of the Group; and
– the Social Reporting Total Group Protocol and Methodology Worldwide Human Resources Survey and the biannual Global Workforce Analysis.
Further details of these procedures and their implementation are available on Total’s website.
The responsibility of Bureau Veritas is to provide assurance on the accuracy, reliability and objectivity of the information therein and to
express our overall opinion as per the scope of assurance.
Statement of Bureau Veritas Certification Independence, Impartiality and Competence
Our opinion is independent and impartial: Our work is conducted according to our professional practices and Code of Ethics and
requirements of our external impartiality committee.
Competence: Our assurance team has relevant experience in conducting assurance over environmental, social, ethical and health and safety
information, systems and data in accordance with established guidelines and best practice.
Methodology
We undertook the following activities to inform our assurance engagement:
– Review of the Total Guidance with regard to its relevance, reliability and completeness with the requirements of the current project
of decree for the implementation of Article 225 of the law n°2010-788 of July 12th, 2010 called “Grenelle II”.
– Senior level interviews with those with responsibility for environmental, social and societal issues at a strategic level. This supported
examination of qualitative information and included the:
- Development and Environment Division; Ethics Committee; Total Foundation; Corporate Philanthropy Division; Total Développement
Régional; Corporate Purchasing; France and NGOs Public Affairs Division; Legal Department and Total Education; and
- Review of corporate Guidance and branch documents and procedures and associated data published.
– Analytical review of the overarching data collection, consolidation and checking processes.
– Interviews at corporate level and in the Gas & Power, Marketing and Chemicals business with those responsible for environmental
and/or social reporting to verify the understanding and application of Guidance.
– Audit of 9 sites/subsidiaries to examine source data. This included 6 sites for the environmental and 5 for social information(1). The audits
included; testing the understanding and correct application of the Guidance; review of documented evidence; review of the methodology
for data collection, aggregation and checking processes; sampling data back to source and analysis of calculations.
– The sites selected accounted for 1.3 % of consolidated greenhouse gas emissions for Total and 5 % of the consolidated workforce.
(1) Regarding environmental information: sites of Bayport (USA), La Porte (USA), Bostik (UK), Grand Quevilly (France), Dépôt de Dijon (France), and subsidiary TIGF (France); regarding social
information: subsidiaries: Total Petrochemicals USA, Bostik (UK), TIGF (France), Paulstra SNC (France), Total Lubrifiants (France)
342
TOTAL. Registration Document 2011
Corporate social responsibility 12
Third parties assurance reports
Assurance Opinion
Completeness of data
All the information required by current project of decree for the implementation of the article 225 of the law on the Grenelle II, are present
with the exception of “use of land” (42 of 43 information categories)
Accuracy and reliability of data
In Bureau Veritas Certification’s opinion, the environmental and social data and qualitative information included in this scope of work can be
regarded as accurate and reliable and prepared in line with Total Guidance.
– For the quantitative information, the tests undertaken by Bureau Veritas Certification revealed no meaningful reporting discrepancies at the
corporate level.
– For the developed qualitative information, the work conducted did not reveal distortion nor any erroneous assertions.
Conclusion
On the basis of scope of work, nothing has come to our attention to question the reliability of the information communicated by the Total
in its registration document.
Note that the reference version of this assurance statement is the one established in French language, and published in the French version
of Total’s reporting.
Puteaux, February, 15, 2012
Etienne Casal
Managing Director
Bureau Veritas Certification France S.A.S.
Registration Document 2011. TOTAL
343
344
TOTAL. Registration Document 2011
Glossary
A
C
Acreage
Areas in which mining rights are exercised.
API degrees
Scale established by the American Petroleum Institute (API) to
measure oil density. A higher API-degree indicates lighter oil from
which a higher yield of gasoline can be refined.
Appraisal (delineation)
Work performed after a discovery, for the determination of the
boundaries or extent of a deposit of hydrocarbons,
or assessment of its reserves and production potential.
Associated gas
Gas released during oil production.
Association/ Joint venture/ Consortium
Group of companies not forming a new legal entity. In an oil and
gas joint venture, each member holds an undivided interest in the
specific area of the contract (PSC, concession, buyback, etc.)
and has separate tax obligations toward the host country.
B
Barrel
Unit of measurement of volume of crude oil equal to 42 U.S. gallons
or 158.9 liters. Quantities of liquid hydrocarbons in barrels are
expressed at 60°F.
Barrel of Oil Equivalent (BOE)
Conventional unit for measuring the energy released by a quantity
of fuel by relating it to the energy released by the combustion of a
barrel of oil.
Biochemical conversion
Conversion of energy sources (usually biomass) through biological
transformation (reactions in living organisms). Examples include
fermentation (in the presence of enzymes).
Biofuel
Liquid or gaseous fuel used for transport and produced from biomass.
Biomass
Biodegradable fraction of products, waste and residues of biological
origin from agriculture (including plant and animal substances),
forestry and related industries including fisheries and aquaculture
which, through chemical transformation, can become beneficial
molecules (carbon molecules) for the production of fuels and
specialty chemicals.
Capacity of treatment
Capacity for the treatment (annual or daily) of crude oil by
atmospheric distillation units at a refinery.
Carbon capture and storage (CCS)
Technology designed to reduce greenhouse gas emissions in the
atmosphere during the combustion of fossil materials by capturing,
compressing, transporting and injecting carbon dioxide (CO2) into
deep geological formations for permanent storage. The use of
oxygen instead of air, in CO2 production, is called oxy-combustion.
Catalysts
Substances that facilitate chemical reactions during the refining
process used in conversion units (reformer, hydrocracker, catalytic
cracker) and desulphurization units. Principal catalysts are precious
metals (platinum) or other metals such as nickel or cobalt. There are
some catalysts that regenerate themselves and others that are
consumable.
Coal bed methane
Natural gas present in coal beds.
Cogeneration
Simultaneous generation of electrical and thermal energies from
a combustible source (gas, fuel oil or coal).
Coker
Unit that produces light products (gas, gasoline, diesel) and coke
through the cracking of distillation residues.
Concentrating solar power plant
The most advanced form of solar steam plant which concentrates
sunlight using mirrors to heat a liquid and produce electricity.
This technology consists mainly of tower power plants and
cylindrical-parabolic plants.
Concession contract
Exploration and production contract under which an oil & gas
company (or group of companies) is granted, by a host country,
rights to explore an area and develop and produce potential
reserves. The oil and gas company (or group of oil & gas
companies) undertakes the execution and financing (at its own risk)
of all operations. In return, it is entitled to the entire production.
Condensate
Light hydrocarbon substances produced with natural gas that exist
– either in a gaseous phase or in solution – in the crude oil under
the initial pressure and temperature conditions in the reservoir, and
which are recovered in a liquid state in separators, on-site facilities
or gas treatment units.
Brent
Quality of crude (38° API) produced in the North Sea, at the
Brent fields.
Conversion
Refining operation aiming at transforming heavy products (heavy
fuel oil) into lighter or less viscous ones (oils, jet fuels, etc.)
Buyback
Risk services agreement (the investments and risks are undertaken
by the contractor) combined with an offset mechanism that allows
the contractor to receive a portion of the production equivalent to
the monetary value (with interest) of its investments and a return on
its investment.
Cost oil / gas
In a production sharing contract, the portion of the oil and gas
production made available to the contractor (contractor group) and
contractually reserved for the reimbursement for exploration costs,
costs of site development, exploitation, site restitution
(“recoverable” costs).
Registration Document 2011. TOTAL
345
Cracking
Refining process whereby the molecules of large, complex, heavy
hydrocarbons are converted into simpler, lighter molecules using
heat, pressure and, in some cases, a catalyst. A distinction is made
between catalytic cracking and steam cracking, which uses heat
instead of a catalyst. Steam cracking then produces ethylene and
propylene, in particular.
D
Farnesene
A hydrocarbon molecule (iso-olefin containing 15 carbon atoms),
farnesene is a molecule that is very similar to fossil hydrocarbons
and can therefore be used to produce fuel or chemical compounds.
The Amyris company has developed a process to produce it
through the fermentation of sugar.
FEED studies (Front-End Engineering Design)
Studies aimed at defining the project and preparing for its execution.
In the TOTAL process, this covers the pre-project and basic
engineering phases.
Debottlenecking
Change made to a facility to increase its production capacity.
Fossil energies
Energies produced from oil, natural gas and coal.
Desulphurization unit
Unit in which sulphur and sulphur compounds are eliminated from
mixtures of gaseous or liquid hydrocarbons.
Developed Reserves
Developed oil and gas reserves are reserves that can be expected
to be recovered through existing wells and installations or for which
the cost of the required equipment is relatively minor. This applies
to both proved reserves and proved plus probable reserves.
Development
Operations carried out to bring an oil or gas field on stream, including
in particular construction of the necessary infrastructures for oil
and gas production.
Distillates
Products obtained through the atmospheric distillation of crude
oil or through vacuum distillation. Includes medium distillate such
as aviation fuel, diesel fuel and heating oil.
E
Energy mix
The various energy sources used to meet the demand for energy.
Ethane
A colorless, odorless combustible gas found in natural gas and
petroleum gas.
Ethanol
Also commonly called ethyl alcohol or alcohol, ethanol is obtained
through the fermentation of sugar (beetroot, sugarcane) or starch
(grains, etc.). Ethanol has numerous food, chemical and energy
(biofuel) applications.
Ethylene/Propylene
Petrochemical products derived from cracking and essential to
the production of polyethylene and polypropylene, two plastics
frequently used in packaging, the automotive industry, household
appliances, healthcare and textiles.
F
Farnesane
Farnesane is obtained through the hydrogenation of farnesene,
a saturated hydrocarbon (alkane) that can be added to diesel fuel.
FPSO (Floating production, storage and offloading)
Floating integrated offshore unit comprising the equipment used to
produce, process and store hydrocarbons and off load them
directly to an offshore oil tanker.
H
Hydraulic fracturing
Technique that involves fracturing rock to improve its permeability.
Hydrocarbons
Molecules composed principally of carbon and hydrogen atoms.
They can be solid such as asphalt, liquid such as crude oil or
gaseous such as natural gas. They may also include compounds
with sulphur, nitrogen, metals, etc.
Hydrocracking
Catalytic refining process that uses hydrogen to convert heavy oils
into lighter fractions.
L
Lignocellulose
Lignocellulose makes up the wall of plant cells. In the biofuel sector,
this term is used to designate wood and straw, two resources that
can be used for biofuel production. Lignocellulose can be gasified
(thermochemical conversion) or split into its basic components
(sugars from cellulose and lignin) in order to transform them through
biochemical conversion.
Liquefied Natural Gas (LNG)
Natural gas, primarily methane, that has been liquefied by cooling
in order to transport it.
Liquefied Petroleum Gas (LPG)
Light hydrocarbons (comprised principally of butane and propane)
that are gaseous under normal temperature and pressure conditions
and that are kept in liquid state by increasing the pressure or
reducing the temperature.
M
Mineral interests
The rights to explore for and/or to produce oil and gas in a specific
area for a fixed period. Covers the concepts of “permit”, “license”,
“title”, etc.
346
TOTAL. Registration Document 2011
MTO/OCP
MTO (Methanols to Olefins) involves the conversion of methanol
into olefins. OCP (olefin cracking process) is then used to convert
these olefins into plastics.
N
Naphta
Heavy gasoline used as a base in petrochemicals.
Natural gas
Mixture of gaseous hydrocarbons, composed mainly of methane.
O
Oil and gas exploration
All operations carried out to reveal the existence of oil and gas
deposits.
Olefins
Products (gas) obtained after cracking of petroleum streams.
Olefins are ethylene, propylene and butadiene. These products are
used in the production of large plastics (polyethylene, polypropylene,
PVC, etc.), elastomers (polybutadiene, etc.) and large chemical
intermediates.
Operated production
Quantity of oil and gas produced on fields operated by an oil
company.
Operator
Partner of an oil and gas joint venture in charge of carrying out
the operations on a specific area on behalf of the joint venture.
A refinery is also said to be operated by a specific partner when
the operations are carried out by the partner on behalf of all the
partners of the joint venture that owns the refinery.
P
Permit
Area contractually granted to an oil and gas company (or a joint
venture) by the host country for a defined period. The permit grants
the oil and gas company (or joint venture) exclusive rights to carry
out exploration work (“exploration” permit) or to exploit a deposit
(“exploitation” permit).
Petcoke (or petroleum coke)
Residual product remaining after the improvement of very heavy
petroleum cuts. This solid black product consists mainly of carbon
and can be used as fuel in a manner similar to steam coal.
Polymers
Molecule composed of monomers bonded together by covalent
bonds such as starch and proteins. They are generally organic
(DNA), artificial or synthetic (such as polystyrene). Polyolefins
represent the largest family of polymers.
Production plateau
Expected average stabilized level of production for a field following
the production build-up.
Production Sharing Contract (PSA, PSC)
Exploration and production contract by which a host country or,
more frequently, its national company, transfers to an oil & gas
company (the contractor) or a group of oil and gas companies
(the contractor group) the right to explore in a given area and, if
successful, to develop and produce the reserves of the discovered
deposits. The contractor (contractor group) shall undertake the
execution and financing (as its exclusive risk) of all operations.
In return, it is entitled to a portion of the production, called cost
oil/gas, for the recovery of the costs. The remaining production,
called profit oil/gas, is shared between the contractor (contractor
group) and the national company (and/or the host country).
Proved and probable reserves (2P reserves)
Sum of proved reserves and probable reserves. The 2P reserves
are the median quantities of oil and gas recoverable from fields
that have been drilled, covered by E&P contracts and for which
technical studies have demonstrated economic development in
a long-term price environment. They also include projects to be
developed by mining.
Proved permit
Permit for which there are proved reserves.
Proved reserves (1P reserves)
Estimated quantities of crude oil and natural gas that geologic
and engineering data show, with reasonable certainty (90%)
to be recoverable in the coming years from known reservoirs
under existing contract, economic and operating conditions:
– Developed proved reserves are those that can be recovered with
existing facilities and without significant additional investment;
– Undeveloped proved reserves are those that can be recovered
with new investments (surface facilities, wells, etc.).
R
Refining
The various processes used to produce petroleum products from
crude oil (distillation, reforming, desulphurization, cracking, etc.).
Renewable energies
An energy source whose inventories can be renewed or are
inexhaustible, such as solar, wind, hydraulic, biomass and
geothermal energy.
Reserve life
Ratio of reserves at the end of the year to the production sold
during the past year.
Reserves
Reserves are estimated remaining quantities of oil and gas and
related substances anticipated to be economically producible,
as of a given date, by application of development projects to
known accumulations.
Reservoirs
Porous, permeable underground rock formation that contains oil
or natural gas.
Resources
Sum of proved and probable reserves and contingent resources
(mean quantities potentially recoverable from known accumulations)
– Society of Petroleum Engineers – 03/07.
Registration Document 2011. TOTAL
347
S
Seismic
Method of exploring the subsoil that entails methodically sending
vibration or sound waves and recording their reflections to assess
the type, size, shape and depth of subsurface layers.
Shale gas
Natural gas trapped in very compact, low-permeable rock.
Silicon
The most abundant element in the earth’s crust after oxygen.
It does not exist in a free state but in the form of compounds
such as silica, which has long been used as an essential element
of glass. Polysilicon (or crystalline silicon), which is obtained by
purifying silicon and consists of metal-like crystals, is used in the
construction of photovoltaic solar panels.
Site abandonment
Oil companies may have to incur expenses related to the
abandonment of production sites at the end of exploitation
of a deposit. This definitive shutdown of the production on a field
or part of sites production capacity (a well, a group of wells, etc.)
generally involves the dismantling of production, transport and
storage facilities and the restoration of the sites.
Steam Assisted Gravity Drainage (SAGD)
Technique used in oil sand and heavy oil production which entails
injecting water vapor to increase the temperature of the bitumen
and heavy oil reduce their viscosity, making extraction easier.
T
Thermochemical conversion
Conversion of energy sources (gas, coal, biomass) through thermal
transformation (chemical reactions from heat). Examples include
gasification, combustion and photosynthesis (solar energy).
Tower/cylindrical-parabolic collector power plant
Type of solar steam plant consisting of a field of solar mirrors –
heliostats – which concentrate sunlight toward a boiler located
at the top of the tower. At a cylindrical-parabolic collector plant
(a reference to its shape), the mirrors follow the sun automatically
as it rises.
U
Unconventional hydrocarbons
Hydrocarbons, oil and gas that cannot be produced or extracted
using conventional methods. These hydrocarbons generally include
shale gas, coal bed methane, gas located in very low-permeable
reservoirs, extra heavy oil, oil sands and oil shale.
Unitization
Creation of a new joint venture and nomination of a single operator
for the development and the production as single asset of a
hydrocarbon deposit that straddles several permits/licenses or
countries.
Unproved permit
Permit for which there are no proved reserves.
Upgrader
Refining unit where petroleum products, such as heavy oils,
are upgraded through cracking and hydrogenation.
348
TOTAL. Registration Document 2011
Cross reference lists
Registration Document concordance tables, for use in identifying the information
required by Annex 1 of Regulation 809/2004/EC of 29 April 2004
Information required by Annex 1 Registration Document 2011
of Regulation 809/2004/EC
Relevant chapters Relevant paragraphs
1.
2.
3.
4.
5.
Persons responsible
Statutory auditors
Selected financial information
Risk factors
Information about the issuer
5.1.
History and development
5.1.1. Legal and commercial name
5.1.2. Place of registration and registration number
5.1.3. Date of incorporation and length of life
5.1.4. Domicile, legal form, applicable legislation, country of incorporation
address and telephone number of registered office
Important events in the development of the business
5.1.5.
Investments
5.2.
5.2.1. Principal investments over the last three fiscal years
5.2.2. Principal investments in progress
5.2.3. Principal future investments
6.
Business overview
6.1.
Principal activities
6.2.
Principal markets
6.3.
6.4.
6.5.
7.
7.1.
7.2.
Exceptional factors that have influenced
the principal activities or principal markets
Dependence on certain contracts
Competitive position
Organizational structure
Issuer’s position within the Group
Significant subsidiaries
8.
Property, plant and equipment
8.1.
Most significant tangible fixed assets
8.2.
Environmental issues affecting the most significant
tangible fixed assets
p i p i
5 4.1. to 4.3.
1 2.
4 1. to 4.
2 1.1.
2 1.1.
8 2.1.
2 1.1.
8 2.1.
2 1.1.
8 2.1.
2 1.1.
8 2.1.
2 2. to 5.
3 1.
2 5.1. to 5.2.
2 5.1.
2 5.1.
2 5.2.
1 2.
2 2. to 5.
1 2.
2 2. to 5.
2 2. to 5.
3 1.1. to 1.5.
4 3.3.
2 1.1., 2., 3., 4.
4 3.5.
2 8.
2 6.1.
2 6.2.
9 7. (note 35)
2 1. to 4., 7.
9 7. (note 11)
4 2.
12 2.
Registration Document 2011. TOTAL
349
9.
Operating and financial review
9.1.
Financial condition
Operating results
9.2.
9.2.1. Significant factors materially affecting income from operations
9.2.2. Narrative description of changes in net sales or revenues
9.2.3. External factors that have materially affected, or could materially affect, operations
10.
Capital resources
Information concerning capital resources (both short and long term)
10.1.
10.2. Source, amounts and narrative description of cash flows
10.3. Borrowing requirements and funding structure
10.4. Restrictions on the use of capital resources that have materially affected,
or could materially affect, operations
10.5. Anticipated sources of funds needed for the principal future investments
and major encumbrances on the most significant tangible fixed assets
1 2.
3 1.1. to 1.6.
3 1.1. to 1.6.
3 1.1. to 1.6. and 4.
3 1.1. to 1.6.
3 1.1. to 1.6. and 4.
3 2.1.
3 2.2.
9 5.
3 2.3.
4 1.
n/a n/a
3 2.5.
9 5.
9 7. (note 11)
11.
Research and development, patents and licenses
3 3.
12.
Trend information
12.1. Most significant trends in production, sales and inventory,
and costs and selling prices since the end of the last fiscal year
12.2. Known trends, uncertainties, demands, commitments or events that are
likely to have a material effect on prospects for the current fiscal year
13.
Profit forecasts or estimates
14.
Administrative, management and supervisory bodies and Senior Management
14.1.
Information about members of the administrative
and management bodies
14.2. Conflicts of interests, understandings relating to nominations,
restrictions on the disposal of holdings in the issuer’s securities
15.
Remuneration and benefits
15.1. Remuneration paid and benefits in kind
granted by the issuer and its subsidiaries
15.2. Amounts set aside or accrued to provide pension,
retirement or similar benefits
16.
Board practices
3 4.3.
7 6.
2 5.2.
3 4.
4 1.
7 6.
n/a n/a
5 1.1. to 1.4. and 5.3.
5 1.9.
5 6.3.
5 5.
5 5.5.
9 7. (note 24 and 25)
16.1. Date of expiration of the current term of office, and date of commencement in office
16.2. Contracts with the issuer or any of its subsidiaries providing for benefits
16.3.
upon termination of such contracts
Information about the issuer’s audit committee
and remuneration committee
16.4. Compliance with the corporate governance regime in force in France
5 1.1.1. to 1.1.3.
5 5.5.
5 1.5.1. and 1.5.2.
5 1.6.1. and 1.6.2.
5 1.3.
350
Registration Document 2011. TOTAL
17.
Employees
17.1. Number of employees at the end of the last 3 fiscal years;
breakdown by geographic location and category of activity
17.2.
Shareholdings and stock options
17.3. Arrangements for involving employees
in the capital of the issuer
18.
Major shareholders
18.1.
Interests held above the threshold for notification
(known interests)
18.2. Major shareholders’ voting rights in excess
of their share in the share capital
18.3. Control of the issuer by one or more shareholders
18.4. Arrangements, known to the issuer, the operation of which may
at a subsequent date result in a change in control of the issuer
19.
Related party transactions
20.
Financial information concerning the issuer’s assets and liabilities,
financial position and profits and losses
20.1. Historical financial information
20.2. Pro forma financial information
20.3. Consolidated annual financial statements
20.4. Auditing of historical annual financial information
20.4.1. Auditing of the historical financial information
20.4.2. Other information in the Registration Document
that has been audited by the auditors
20.4.3. Financial data in the Registration Document that is not extracted
from the issuer’s audited financial statements
Interim and other financial information
20.5. Age of latest audited financial information
20.6.
20.6.1. Quarterly or half yearly financial information published
since the date of the last audited financial statements
20.6.2. Interim financial information covering the first six months
of the fiscal year after the end of the last audited fiscal year
20.7. Dividend policy
20.8.
20.9.
Legal and arbitration proceedings
Significant change in the issuer’s financial or commercial position
1 2.
5 6.1.
12 1.1.
1 2.
5 6.2.
12 1.1.3.
5 5.6.
5 6.2.
8 3.1
6 4.4.
6 4.4.
8 2.4.
n/a n/a
n/a n/a
6 4.9.
9 7. (note 24)
7 1. and 2.
n/a n/a
9 2. to 7.
7 2.
9 1.
11 2.
5 2.
11 1.
10 1.5. to 1.9.
10 2.
7 3.
December 31, 2011
n/a n/a
n/a n/a
6 2.1.
7 5.
7 6.
Registration Document 2011. TOTAL
351
21.
Additional information
Share capital
21.1.
21.1.1. Issued capital and authorized capital
21.1.2. Shares not representing capital
21.1.3. Shares held by the issuer or its subsidiaries
21.1.4. Securities granting future access to the issuer’s share capital
21.1.5. Terms of any acquisition rights and/or obligations over
capital issued but not paid, or any capital increase
21.1.6. Capital of any member of the Group which is under option
21.1.7. History of the issuer’s share capital over the last 3 fiscal years
21.2. Memorandum and Articles of Association
21.2.1. Issuer’s objects and purposes
21.2.2. Provisions of statutes and charters with respect to the members
of the administrative, management and supervisory bodies
21.2.3. Rights, preferences and restrictions attaching to each class of the existing shares
21.2.4. Action necessary to change the rights of shareholders
21.2.5. Manner in which annual general meetings of shareholders are called
including the conditions of admission
21.2.6. Provisions of the issuer’s statutes, charter or bylaws that would have the effect
of delaying, deferring or preventing a change in control of the issuer
21.2.7. Provisions of the statutes governing the ownership threshold above
which share ownership must be disclosed
8 1.1. to 1.4.
11 4. (note 6.a)
9 7. (note 17)
n/a n/a
6 3.2.2., 3.2.7.
6 4.4.1., 4.5.
8 1.5.
9 7. (note 17)
11 4. (note 6)
8 1.3. and 1.4.
5 6. 2. 4.
n/a n/a
8 1.6.
9 7. (note 17)
11 4. (note 6.a)
8 2.2.
5 1.4. and 1.5.
8 2.3.
8 2.4.
8 2.5.
8 2.6.
6 4.4.3. and 4.4.4.
8 2.4.
8 2.7.
21.2.8. Conditions governing changes in the capital that are more stringent than is required by law
n/a n/a
22.
Material contracts
(other than contracts entered into in the ordinary course of business)
n/a n/a
23.
Third party information and statement by experts and declarations of any interest
n/a n/a
24.
Documents on display
25.
Information on holdings
8 4.
8 5.
9 7. (note 35)
11 5.
352
Registration Document 2011. TOTAL
Registration Document concordance table, for use in identifying the information contained
in the Annual Financial Report
The concordance table below is used to identify the information in this Registration Document contained in the Annual Financial Report pursuant to
Article L. 451-1-2 of the French Financial and Monetary Code and Article 222-3 of the General Regulation of the French Financial Markets Authority.
Annual Financial Report Registration Document 2011
Relevant chapters Relevant paragraphs
Annual Financial Statements
Consolidated Financial Statements
Management Report (pursuant to the French Financial and Monetary Code)
Information mentioned in Articles L. 225-100 and L.225-100-2 of the French Commercial Code
Analysis of profit and loss, changes in business, financial position and debt position
Use of financial instruments by the company
Key financial and non-financial performance indicators
Principal risks and uncertainties facing the company and all of the entities
taken as a whole included in the consolidation
Summary table of valid delegations with respect to capital increases
Information mentioned in Article L. 225-100-3 of the French Commercial Code:
factors likely to have an impact in the event of a public offering
Information mentioned in Article L. 225-211 of the French Commercial Code:
buybacks of its own shares by the Company
11 3. to 4.
9 2. to 7.
2 2. to 4.
3 1. to 2.
4 4.1.
1 1. and 2.
12 1. to 3.
3 4.1. to 4.3.
4 1. to 4.
7 5.
8 1.3.
8 3.3.
6 3.
Declaration of persons responsible for the Annual Financial Report
p i
Reports of the statutory auditors on the parent company
financial statements and consolidated financial statements
Statutory auditors’ fees
Report of the Chairman of the Board of Directors
(Article L. 225-37 of the French Commercial Code)
Auditors’ Report on the Report of the Chairman of the Board of Directors
(Article L. 225-235 of the French Commercial Code)
9 1.
11 2.
5 4.4.
5 1.
5 2.
Registration Document 2011. TOTAL
353
Registration Document concordance table, for use in identifying the information contained
in the Management Report pursuant to the French Commercial Code
Board of Directors’ Management Report pursuant Registration Document 2011
to the French Commercial Code
Relevant chapters Relevant paragraphs
Position and activities of the Company and Group during the fiscal year
Analysis of changes in the business, results and financial position
of the Company and Group
Key financial and non-financial performance indicators
Foreseeable change in the position of the Company and Group, outlook
Significant changes since the end of the fiscal year
Research and development activities
Significant acquisitions of shares in or takeovers of companies with registered offices in France
Amount of dividends distributed in the last 3 fiscal years and amount of distributed income
Injunctions or penalties for antitrust practices
Information about payment terms of suppliers or customers of the Company
Description of the principal risks and uncertainties faced
by the Company and Group companies
Information about the use of financial instruments by the Company and Group
Company’s exposure to price, credit, liquidity and cash flow risks
Social and environmental consequences of activities;
social commitments to promote sustainable development
Polluting or high-risk activities (upper threshold in accordance with the Seveso II directive)
Terms of office and duties performed in the company as a whole
by each of the directors during the last fiscal year
Form of management of the company
Remuneration and other benefits granted to each of the directors
Mandatory share holding period applicable to directors
Summary of transactions in the Company’s stock carried out by the directors
Information about share capital distribution
TOTAL shares held by Group companies
Information mentioned in Article L. 225-211 of the French Commercial Code
relating to buybacks of its own shares by the Company
Disposals of shares to adjust reciprocal shareholdings
Statement of employee involvement in the share capital on the last day of the fiscal year
Translation adjustments and adjustments to terms of issue or exercise of stock options
or securities granting access to the share capital
Changes made to the method of presentation of the annual financial statements
Observations made by the French Financial Markets Authority on proposed appointments and renewals
Table of results for each of the last five fiscal years
Table and report on delegations with respect to capital increases
Information mentioned in Article L. 225-100-3 of the French Commercial Code
relating to factors likely to have an impact in the event of a public offering
Report of the Chairman of the Board of Directors
L. 225-37 of the French Commercial Code
2 2. to 4.
3 1. to 2.
1 1. and 2.
12 1. to 3.
3 4.
7 6.
3 3.
n/a n/a
6 2.
n/a n/a
9 7. (note 23)
3 4.1. to 4.3.
4 1. to 4.
7 5.
4 4.1.
4 4.1.
12 1. to 4.
4 2.
12 2.
5 1.1. to 1.3.
5 1.7.1. and 3.1.
5 5.
5 5.6.2.
5 6.3.1.
6 4.4.
6 3.2. and 4.5.
8 1.5.
6 3.
n/a n/a
5 6.2.
6 4.4.
n/a n/a
9 7., Introduction
11 4.1.
n/a n/a
11 5.2.
8 1.3.
8 3.3.
5 1.
354
Registration Document 2011. TOTAL
PEFC/10-31-2043
This brochure is printed on 100% recyclable and biodegradable coated paper,
manufactured from ECF (Elemental Chlorine Free) bleached pulp in a European factory
certified ISO 9001 (for its quality management), ISO 14001 (for its environmental management),
CoC PEFC (for the use of paper from sustainably managed forests) and is EMAS-accredited
(for its environmental performance).
Cover photography: © Divaldo Gregorio / TOTAL
Design and Production: Agence Marc Praquin
see you on
www.total.com
TOTAL S.A.
Registered Office:
2, place Jean Millier - La Défense 6
92400 Courbevoie - France
Share capital: 5,909,418,282.50 euros
542 051 180 RCS Nanterre
www.total.com
Standard: +33 (0)1 47 44 45 46
Investor Relations: +33 (0)1 47 44 58 53
North American Investor Relations: +1 (713) 483-5070