2016 EDITION
form 20-F
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 20-F
(Mark One)
‘ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
Í ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2016
OR
OR
‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
‘ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
OR
Commission file number: 1-10888
TOTAL S.A.
(Exact Name of Registrant as Specified in Its Charter)
Republic of France
(Jurisdiction of Incorporation or Organization)
2, place Jean Millier
La Défense 6
92400 Courbevoie
France
(Address of Principal Executive Offices)
Patrick de La Chevardière
Chief Financial Officer
TOTAL S.A.
2, place Jean Millier
La Défense 6
92400 Courbevoie
France
Tel: +33 (0)1 47 44 45 46
Fax: +33 (0)1 47 44 49 44
(Name, Telephone, Email and/or Facsimile Number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class
Shares
American Depositary Shares
Name of each exchange on which registered
New York Stock Exchange*
New York Stock Exchange
Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.
*
Securities registered or to be registered pursuant to Section 12(g) of the Act.
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
2,430,365,862 Shares, par value €2.50 each, as of December 31, 2016
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes Í No ‘
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934. Yes ‘ No Í
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes Í No ‘
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).**
** This requirement is not currently applicable to the registrant.
Yes ‘ No ‘
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large
accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer Í
Accelerated filer ‘
Non-accelerated filer ‘
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ‘
International Financial Reporting Standards as issued by the International
Accounting Standards Board Í
Other ‘
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to
follow.
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ‘ No Í
Item 17 ‘ Item 18 ‘
[THIS PAGE INTENTIONALLY LEFT BLANK]
TABLE OF CONTENTS
BASIS OF PRESENTATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
STATEMENTS REGARDING COMPETITIVE POSITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CERTAIN TERMS, ABBREVIATIONS AND CONVERSION TABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 1.
Item 2.
Item 3.
Identity of Directors, Senior Management and Advisers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Offer Statistics and Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Key Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exchange Rate Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4.
Information on the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
History and Development
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Business Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 4A.
Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 5.
Item 6.
Item 7.
Item 8.
Item 9.
Operating and Financial Review and Prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Directors, Senior Management and Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Directors and Senior Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employees and Share Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Major Shareholders and Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
The Offer and Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 10.
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11.
Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 12.
Description of Securities Other than Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 13.
Defaults, Dividend Arrearages and Delinquencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . .
Item 15.
Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16A.
Audit Committee Financial Expert
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16B.
Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16C.
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16D.
Exemptions from the Listing Standards for Audit Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16E.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16F.
Change in Registrant’s Certifying Accountant
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16G.
Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 16H. Mine Safety Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 17.
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 18.
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 19.
Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Page
i
i
i
i
i
1
1
1
1
1
2
2
2
2
2
2
2
12
12
12
12
12
12
12
12
13
17
17
17
17
17
18
18
18
19
19
19
19
21
21
21
24
[THIS PAGE INTENTIONALLY LEFT BLANK]
Basis of presentation
References in this Annual Report on Form 20-F to pages and sections of the 2016 Registration Document are references only to those pages
and sections of TOTAL’s Registration Document for the year ended December 31, 2016 attached in Exhibit 15.1 to this Form 20-F. Other
than as expressly provided herein, the 2016 Registration Document is not incorporated herein by reference.
TOTAL’s Consolidated Financial Statements, which start on page 205 of the 2016 Registration Document and are incorporated herein by
reference, are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board (IASB) and IFRS as adopted by the European Union (EU) as of December 31, 2016.
In addition, this Annual Report on Form 20-F and the 2016 Registration Document contain certain measures that are not defined by generally
accepted accounting principles (GAAP) such as IFRS. Our management uses these financial measures, along with the most directly
comparable GAAP financial measures, in evaluating our operating performance. We believe that presentation of this information, along with
comparable GAAP measures, is useful to investors because it allows investors to understand the primary method used by management to
evaluate performance on a meaningful basis. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for,
financial information presented in compliance with GAAP. Non-GAAP financial measures as reported by us may not be comparable with
similarly titled amounts reported by other companies.
Statements regarding competitive position
Unless otherwise indicated, statements made in “Item 4. Information on the Company” referring to TOTAL’s competitive position are based
on the Company’s estimates, and in some cases rely on a range of sources, including investment analysts’ reports, independent market
studies and TOTAL’s internal assessments of market share based on publicly available information about the financial results and
performance of market participants.
Additional information
This Annual Report on Form 20-F reports information primarily regarding TOTAL’s business, operations and financial information relating to
the fiscal year ended December 31, 2016. For more recent updates regarding TOTAL, you may inspect any reports, statements or other
information TOTAL files with the United States Securities and Exchange Commission (“SEC”). All of TOTAL’s SEC filings made after
December 31, 2001, are available to the public at the SEC website at http://www.sec.gov and from certain commercial document retrieval
services. See also “Item 10. — 8. Documents on display”.
No material on the TOTAL website forms any part of this Annual Report on Form 20-F. References in this document to documents on the
TOTAL website are included as an aid to their location and are not incorporated by reference into this document.
Certain terms, abbreviations and conversion table
For the meanings of certain terms used in this document, as well as certain abbreviations and a conversion table, refer to the “Glossary”
starting on page 369 of the 2016 Registration Document, which is incorporated herein by reference.
Cautionary statement concerning forward-looking statements
TOTAL has made certain forward-looking statements in this document and in the documents referred to in, or incorporated by reference into,
this Annual Report. Such statements are subject to risks and uncertainties. These statements are based on the beliefs and assumptions of
the management of TOTAL and on the information currently available to such management. Forward-looking statements include information
concerning forecasts, projections, anticipated synergies, and other information concerning possible or assumed future results of TOTAL, and
may be preceded by, followed by, or otherwise include the words “believes”, “expects”, “anticipates”, “intends”, “plans”, “targets”,
“estimates” or similar expressions.
Forward-looking statements are not assurances of results or values. They involve risks, uncertainties and assumptions. TOTAL’s future results
and share value may differ materially from those expressed in these forward-looking statements. Many of the factors that will determine these
results and values are beyond TOTAL’s ability to control or predict. Except for its ongoing obligations to disclose material information as
required by applicable securities laws, TOTAL does not have any intention or obligation to update forward-looking statements after the
distribution of this document, even if new information, future events or other circumstances have made them incorrect or misleading.
Various factors, certain of which are discussed elsewhere in this document and in the documents referred to in, or incorporated by reference
into, this document, could affect the future results of TOTAL and could cause actual results to differ materially from those expressed in such
forward-looking statements, including:
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
material adverse changes in general economic conditions or in the markets served by TOTAL, including changes in the prices of oil,
natural gas, refined products, petrochemical products and other chemicals;
changes in currency exchange rates and currency devaluations;
the success and the economic efficiency of oil and natural gas exploration, development and production programs, including,
without limitation, those that are not controlled and/or operated by TOTAL;
uncertainties about estimates of changes in proven and potential reserves and the capabilities of production facilities;
uncertainties about the ability to control unit costs in exploration, production, refining and marketing (including refining margins) and
chemicals;
changes in the current capital expenditure plans of TOTAL;
the ability of TOTAL to realize anticipated cost savings, synergies and operating efficiencies;
the financial resources of competitors;
changes in laws and regulations, including tax and environmental laws and industrial safety regulations;
the quality of future opportunities that may be presented to or pursued by TOTAL;
the ability to generate cash flow or obtain financing to fund growth and the cost of such financing and liquidity conditions in the
capital markets generally;
the ability to obtain governmental or regulatory approvals;
the ability to respond to challenges in international markets, including political or economic conditions (including national and
international armed conflict) and trade and regulatory matters (including actual or proposed sanctions on companies that conduct
business in certain countries);
the ability to complete and integrate appropriate acquisitions, strategic alliances and joint ventures;
changes in the political environment that adversely affect exploration, production licenses and contractual rights or impose minimum
drilling obligations, price controls, nationalization or expropriation, and regulation of refining and marketing, chemicals and power
generating activities;
2016 Form 20-F TOTAL S.A.
i
(cid:129)
(cid:129)
the possibility that other unpredictable events such as labor disputes or industrial accidents will adversely affect the business of
TOTAL; and
the risk that TOTAL will inadequately hedge the price of crude oil or finished products.
For additional factors, please read the information set forth under “Item 3. — 3. Risk Factors”, “Item 5. Operating and Financial Review and
Prospects” and “Item 11. Quantitative and Qualitative Disclosures About Market Risk”.
ii
TOTAL S.A. Form 20-F 2016
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
1. Selected financial data
ITEM 3. KEY INFORMATION
The following table presents selected consolidated financial data for TOTAL on the basis of IFRS as issued by the IASB and IFRS as adopted
by the EU for the years ended December 31, 2016, 2015, 2014, 2013 and 2012. Effective January 1, 2014, TOTAL changed the
presentation currency of the Group’s Consolidated Financial Statements from the Euro to the US Dollar. Comparative 2013 and 2012
information in the table below has been restated. Following the retrospective application of the accounting interpretation IFRIC 21 effective
January 1, 2014, the information for 2013 and 2012 has been restated; however, the impact on such restated results is not significant.
ERNST & YOUNG Audit and KPMG Audit, a division of KPMG S.A., independent registered public accounting firms and the Company’s
auditors, audited the historical consolidated financial statements of TOTAL for these periods from which the financial data presented below
for such periods are derived, except for the application of IFRIC 21. All such data should be read in conjunction with the Consolidated
Financial Statements and the Notes thereto starting on page 205 of the 2016 Registration Document, which are incorporated herein by
reference.
(M$, except share and per share data)(a)
2016
2015
2014
2013
2012
INCOME STATEMENT DATA
Revenues from sales . . . . . . . . . . . . . . . . . . . .
Net income, Group share . . . . . . . . . . . . . . . . .
Earnings per share . . . . . . . . . . . . . . . . . . . . .
Fully diluted earnings per share . . . . . . . . . . . . . .
CASH FLOW STATEMENT DATA
Cash flow from operating activities . . . . . . . . . . . .
Total expenditures . . . . . . . . . . . . . . . . . . . . . .
BALANCE SHEET DATA
Total assets . . . . . . . . . . . . . . . . . . . . . . . . .
Non-current financial debt . . . . . . . . . . . . . . . . .
Non-controlling interests . . . . . . . . . . . . . . . . . .
Shareholders’ equity — Group share . . . . . . . . . . .
Common shares . . . . . . . . . . . . . . . . .
DIVIDENDS
127,925
6,196
2.52
2.51
16,521
20,530
230,978
43,067
2,894
98,680
7,604
Dividend per share (euros) . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . .
Dividend per share (dollars)
€2.45(b)
$2.61(b)(c)
COMMON SHARES(d)
Average number outstanding of common shares
143,421
5,087
2.17
2.16
19,946
28,033
224,484
44,464
2,915
92,494
7,670
€2.44
$2.67
212,018
4,244
1.87
1.86
25,608
30,509
229,798
45,481
3,201
90,330
7,518
€2.44
$2.93
227,969
11,228
4.96
4.94
28,513
34,431
239,223
34,574
3,138
100,241
7,493
€2.38
$3.24
234,216
13,648
6.05
6.02
28,858
29,475
225,886
29,392
1,689
93,969
7,454
€2.34
$3.05
€2.50 par value (shares undiluted) . . . . . . . . . . .
2,379,182,155
2,295,037,940
2,272,859,512
2,264,349,795
2,255,801,563
Average number outstanding of common shares
€2.50 par value (shares diluted)
. . . . . . . . . . . .
2,389,713,936
2,304,435,542
2,281,004,151
2,271,543,658
2,266,635,745
(a)
Following the retrospective application of the accounting interpretation IFRIC 21 effective January 1, 2014, the information for 2013 has been restated;
however, the impact on such restated results is not significant.
(b) Subject to approval by the shareholders’ meeting on May 26, 2017.
(c)
Estimated dividend in dollars includes the first quarterly interim ADR dividend of $0.67 paid in October 2016 and the second quarterly interim ADR dividend
of $0.65 paid in January 2017, as well as the third quarterly interim ADR dividend of $0.64 payable in April 2017 and the proposed final interim ADR
dividend of $0.65 payable in June 2017, both converted at a rate of $1.05/€.
The number of common shares shown has been used to calculate per share amounts.
(d)
2. Exchange rate information
For information regarding the effects of currency fluctuations on TOTAL’s results, see “Item 5. Operating and Financial Review and
Prospects”.
Most currency amounts in this Annual Report on Form 20-F are expressed in U.S. dollars (“dollars” or “$”) or in euros (“euros” or “€ ”). For the
convenience of the reader, this Annual Report on Form 20-F presents certain translations into dollars of certain euro amounts ($1.10/€ 1.00).
The following table sets out the average dollar/euro exchange rates expressed in dollars per €1.00 for the years indicated, based on an
average of the daily European Central Bank (“ECB”) reference exchange rate.(1) Such rates are used by TOTAL in preparation of its
Consolidated Statement of Income and Consolidated Statement of Cash Flow in its Consolidated Financial Statements. No representation is
made that the euro could have been converted into dollars at the rates shown or at any other rates for such periods or at such dates.
Dollar/euro exchange rates for the years provided
Average rate
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.2848
1.3281
1.3285
1.1095
1.1069
(1)
For the period 2012-2016, the averages of the ECB reference exchange rates expressed in dollars per €1.00 on the last business day of each month during
the relevant year are as follows: 2012 —1.29; 2013 —1.33; 2014 — 1.32; 2015 — 1.10; and 2016 —1.10.
2016 Form 20-F TOTAL S.A.
1
The table below shows the high and low dollar/euro exchange rates for the four months ended December 31, 2016, and for the first months
of 2017, based on the daily ECB reference exchange rates published during the relevant month expressed in dollars per €1.00.
Dollar/euro exchange rates for the periods provided
High
Low
September 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
October 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
November 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
January 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
March 2017(a)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.1296
1.1236
1.1095
1.0762
1.0755
1.0808
1.0663
1.1146
1.0872
1.0548
1.0364
1.0385
1.0513
1.0514
(a)
Through March 14, 2017.
The ECB reference exchange rate on March 14, 2017 for the dollar against the euro was $1.0631/€ .
3. Risk factors
The Group and its businesses are subject to various risks relating to changing competitive, economic, political, legal, social, industry,
business and financial conditions, including changes in such conditions. Point 1 (“Risk factors”) of chapter 4 of the 2016 Registration
Document (starting on page 62) is incorporated herein by reference.
For additional information on these conditions, along with TOTAL’s approaches to managing certain of these risks, please refer to “Item 5.
Operating and Financial Review and Prospects” and “Item 11. Quantitative and Qualitative Disclosures About Market Risk”, as well as point 4
(“Internal control and risk management procedures”) of chapter 4 of the 2016 Registration Document (starting on page 76), which is
incorporated herein by reference.
ITEM 4. INFORMATION ON THE COMPANY
The following information concerning the Group’s history and development from the 2016 Registration Document is incorporated herein by
reference:
(cid:129)
(cid:129)
(cid:129)
history and development (point 1.1 of chapter 2, on page 6);
Group organization fully effective since January 1, 2017 (point 1.3 of chapter 2, on page 7); and
information concerning the Group’s principal capital expenditures and divestitures (point 3 of chapter 2, starting on page 42). See
also “Item 5. — 2. Results 2014-2016” and “Item 5. — 3. Liquidity and capital resources”.
The following information providing an overview of the Group’s businesses and activities from the 2016 Registration Document is
incorporated herein by reference:
(cid:129)
(cid:129)
(cid:129)
TOTAL’s strategy (point 1.2 of chapter 2, on page 6);
business overview for fiscal year 2016 (point 2 of chapter 2, starting on page 8); and
geographical breakdown of the Group’s sales, property, plants and equipment, intangible assets and capital expenditures over the
past three years (Note 4 to the Consolidated Financial Statements, on page 227).
The following other matters from the 2016 Registration Document are incorporated herein by reference:
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
property, plant and equipment (point 5 of chapter 2, on page 48);
organizational structure (points 6 and 7 of chapter 2, starting on page 49);
discussion of the Group’s investments (point 3 of chapter 2, starting on page 42);
insurance and risk management (point 3 of chapter 4, starting on page 75);
social, environmental and societal information (introduction and points 1.2 to 4 of chapter 7, starting on page 144);
factors likely to have an impact in the event of a public offering (point 4.5 of chapter 8, starting on page 190); and
information on investor relations (point 6 of chapter 8, starting on page 192).
ITEM 4A. UNRESOLVED STAFF COMMENTS
None.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
This section is the Company’s analysis of its financial performance and of significant trends that may affect its future performance. It should
be read in conjunction with the Consolidated Financial Statements and the Notes thereto in the 2016 Registration Document (starting on
page 205), which are incorporated herein by reference. The Consolidated Financial Statements and the Notes thereto are prepared in
accordance with IFRS as issued by the IASB and IFRS as adopted by the EU.
This section contains forward-looking statements that are subject to risks and uncertainties. For a list of important factors that could cause
actual results to differ materially from those expressed in the forward-looking statements, see “Cautionary Statement Concerning Forward-
Looking Statements” starting on page i.
For an overview of TOTAL’s critical accounting policies, including policies involving management’s judgment and estimates, refer to the
Introduction to the Notes to the Consolidated Financial Statements in the 2016 Registration Document (starting on page 212), which is
incorporated herein by reference.
1. Overview
TOTAL’s results are affected by a variety of factors, including changes in crude oil and natural gas prices as well as refining and marketing
margins, which are all generally expressed in dollars, and changes in exchange rates, particularly the value of the euro compared to the
dollar. Lower crude oil and natural gas prices generally have a negative effect on the income of TOTAL, since its Upstream oil and gas
business is negatively impacted by the resulting decrease in revenues realized from production. Higher crude oil and natural gas prices
generally have a corresponding positive effect. The effect of changes in crude oil prices on TOTAL’s Refining & Chemicals and Marketing &
Services activities depends upon the speed at which the prices of refined petroleum products adjust to reflect such changes. TOTAL’s results
are also significantly affected by the costs of its activities, in particular those related to exploration and production, and by the outcome of its
strategic decisions with respect to cost reduction efforts. In addition, TOTAL’s results are affected by general economic and political
conditions and changes in governmental laws and regulations, as well as by the impact of decisions by OPEC on production levels. For more
information, see “Item 3. — 3. Risk Factors” and “Item 4. — Other Matters”.
2
TOTAL S.A. Form 20-F 2016
After falling from $100/b in 2014 to $52/b on average in 2015, Brent prices were highly volatile in 2016, fluctuating between $27/b and
$58/b, with an average of $44/b for the year. In this difficult environment, the Group demonstrated its resilience by generating the highest
profitability among the majors due to the strength of its integrated model and commitment of its teams to reduce the breakeven.
In this context, TOTAL’s net income (Group share) in 2016 increased by 22% to $6,196 million from $5,087 million in 2015, mainly due to a
less negative impact on net income (Group share) of special items in 2016, with the Group demonstrating its resilience despite the 19% drop
in hydrocarbon prices. Adjustments to net income (Group share), which include special items and the after-tax inventory valuation effect, had
a negative impact of $2,091 million in 2016. Excluding these items, adjusted net income declined by 21% to $8,287 million in 2016
compared to $10,518 million in 2015, primarily due to the impact of lower Brent prices on Upstream results, partially offset by the contribution
from downstream activities. For additional information, refer to “— 2. Results 2014-2016”.
The Group’s resilience was supported by outstanding production growth over the past two years (14.3%, including 4.5% in 2016). In the
Upstream, the Group strengthened its position in the Middle East by entering the Al Shaheen field in Qatar, and in the United States with the
acquisition of shale gas assets. The Group is preparing future growth with the signing of major deals in Brazil with Petrobras, in Uganda and
in Iran on the giant South Pars 11 project. The Group renewed its reserves with a replacement rate of 136% at constant prices and delivered
promising exploration results, with two major discoveries in the United States (North Platte) and Nigeria (Owowo).
Despite lower refining margins, the Downstream(1) once again achieved its objectives and thereby demonstrated that its results are
sustainable, with operating cash flow before working capital changes at replacement cost(2) of $7 billion and ROACE(3) above 30%, the
highest among the majors. Results from the Refining & Chemicals segment were underpinned by the strong performance of its Asia and
Middle East integrated platforms, while Marketing & Services results were driven by growth in retail and lubricants.
Financial discipline was successfully maintained across all business segments both for investments ($18.3 billion including resource
acquisitions) and operating costs, with savings of $2.8 billion in 2016, exceeding the objective of $2.4 billion. Production costs were reduced
to $5.9/boe in 2016, compared to $9.9/boe in 2014.
The $10 billion asset sale program is around 80% complete following the closing of the Atotech sale, and this contributed to the Group’s
financial strength with a net-debt-to-equity ratio at 27%, lower than it was in 2014.
In this context, the Board of Directors proposed to increase the dividend, despite the volatility of hydrocarbon prices, to €2.45/share,
corresponding to a fourth quarter dividend of €0.62/share, a 1.6% increase compared to the previous three quarterly dividends. This
demonstrates the Board’s confidence in the strength of the Group’s results and balance sheet as well as its prospects for cash flow growth.
–
Outlook
Brent increased following the announced production cuts agreed by OPEC and non-OPEC countries, including Russia. However, inventory
levels are high and prices are likely to remain volatile. In this context, the Group is continuing to cut costs with the objective of achieving
$3.5 billion of cost savings in 2017 and bringing production costs down to $5.5/boe for the year. Investments are moving into the sustainable
range needed to deliver profitable future growth and are expected to be between $16 billion and $17 billion in 2017 including resource
acquisitions.
In the Upstream, production is set to grow by more than 4% in 2017, supporting the objective of increasing production on average by 5% per
year from 2014 to 2020. As a result of this growth, the sensitivity of the portfolio to Brent increases to $2.5 billion(4) for a $10/b change in
Brent in 2017. The Group plans to take advantage of the favorable cost environment by launching around 10 projects over the next 18
months and adding attractive resources to the portfolio.
In 2017, the Downstream is expected to continue generating stable operating cash flow before working capital changes at replacement cost of
around $7 billion thanks to its diverse portfolio of activities. Refining & Chemicals’ performance has been strengthened by the restructuring and
the segment will continue to benefit from the quality of its integrated platforms, notably in Antwerp, in the United States, in Asia and in the
Middle East. The final investment decision to launch the Port Arthur side-cracker is expected to be made in 2017. The Marketing & Services
segment is pursuing its cash generation growth strategy by leveraging its strong position in high-potential retail and lubricant markets.
In 2017, the Group expects its breakeven will continue to fall, reaching less than $40/b pre-dividend. Cash flow from operations is expected
to cover investments and the cash portion of the dividend at $50/b. TOTAL confirms its medium-term objective to achieve a
net-debt-to-equity ratio of 20%.
The Group is committed to maintaining attractive returns for its shareholders and will eliminate the discount on the scrip dividend with Brent
at $60/b.
(1)
(2)
(3)
(4)
Refining & Chemicals and Marketing & Services segments, excluding New Energies.
For information on the replacement cost method, refer to “— 2. Results 2014-2016 — Business segment reporting” and Note 3 to the Consolidated Financial
Statements in the 2016 Registration Document (starting on page 215), which is incorporated herein by reference.
Based on adjusted net operating income and average capital employed at replacement cost.
Estimated impact on cash flow from operations.
2016 Form 20-F TOTAL S.A.
3
2. Results 2014-2016
As of and for the year ended December 31, (M$, except per share data)
Non-Group sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjusted net operating income from business segments(a)
(cid:129) Upstream . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(cid:129) Refining & Chemicals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(cid:129) Marketing & Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in net income (loss) of affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fully-diluted earnings per share ($)
Fully-diluted weighted-average shares (millions)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income (Group share)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Gross investments(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Divestments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net investments(c)
Organic investments(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cash flow from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(cid:129) Includes (increase)/decrease in working capital(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016
2015
2014
149,743
165,357
236,122
3,633
4,201
1,586
2,214
2.51
2,390
6,196
20,530
2,877
17,757
17,484
16,521
(1,119)
4,774
4,889
1,699
2,361
2.16
2,304
5,087
28,033
7,584
20,360
22,976
19,946
1,683
10,504
2,489
1,254
2,662
1.86
2,281
4,244
30,509
6,190
24,140
26,430
25,608
4,480
(a) Adjusted results are defined as income using replacement cost, adjusted for special items, excluding the impact of changes for fair value. See “Business
(b)
segment reporting” below for further details.
Including acquisitions and increases in non-current loans. For additional information on investments, refer to point 3 (“Investments”) of chapter 2 of the 2016
Registration Document (starting on page 42), which is incorporated herein by reference.
(c) “Net investments” = gross investments — divestments — repayment of non-current loans — other operations with non-controlling interests. For additional
information on investments, refer to point 3 (“Investments”) of chapter 2 of the 2016 Registration Document (starting on page 42), which is incorporated
herein by reference.
(d) “Organic investments” = net investments excluding acquisitions, asset sales and other operations with non-controlling interests. For additional information
on investments, refer to point 3 (“Investments”) of chapter 2 of the 2016 Registration Document (starting on page 42), which is incorporated herein by
reference.
(e) The change in working capital as determined using the replacement cost method was $(467) million in 2016, $570 million in 2015, and $1,011 million in
2014. For information on the replacement cost method, refer to Note 3 to the Consolidated Financial Statements in the 2016 Registration Document
(starting on page 215), which is incorporated herein by reference.
–
Group results 2016 vs. 2015
After falling from $100/b in 2014 to $52/b on average in 2015, Brent prices were highly volatile in 2016, fluctuating between $27/b and
$58/b, with an average of $44/b for the year. In 2016, TOTAL’s average liquids price realization(1) decreased by 15% to $40.3/b from $47.4/b
in 2015. TOTAL’s average natural gas price realization for the Group’s consolidated subsidiaries decreased in 2016 by 25% to $3.56/Mbtu
from $4.75/Mbtu in 2015. In the downstream, the Group’s European refining margin indicator (“ERMI”) was $34/t in 2016, a 30% decrease
compared to the high levels in 2015 ($48.5/t), in the context of high petroleum stocks. In the fourth quarter of 2016, the ERMI was $41.0/t.
The environment for petrochemicals remained favorable.
The Euro remained stable in 2016 compared to the US Dollar, with the euro-dollar exchange rate averaging $1.11/€ in 2016 and 2015.
In this less favorable environment, non-Group sales in 2016 were $149,743 million, a decrease of 9% compared to $165,357 million for 2015.
The decrease in hydrocarbon prices and refining margins were partially offset by production growth and strong results for petrochemicals.
Non-Group sales decreased 13% for the Upstream segment, 7% for the Refining & Chemicals segment and 11% for the Marketing &
Services segment.
Net income (Group share) in 2016 increased by 22% to $6,196 million from $5,087 million in 2015, mainly due to a less negative impact on net
income (Group share) in 2016 of special items (as further discussed below), with the Group demonstrating its resilience despite the 19% drop in
hydrocarbon prices due to the strength of its integrated model and commitment of its teams to reducing the breakeven. In 2016, adjustments
to net income (Group share), which included special items of $(2,567) million and after-tax inventory valuation effect of $479 million, had a
negative impact on net income (Group share) of $2,091 million in 2016. Special items included impairments on Gladstone LNG in Australia,
Angola LNG, and Laggan-Tormore in the United Kingdom, reflecting the decrease in gas price assumptions for the coming years. For a detailed
overview of adjustment items for 2016, refer to Note 3 to the Consolidated Financial Statements in the 2016 Registration Document (starting on
page 215), which is incorporated herein by reference. In 2015, adjustment items, which included special items of $(4,675) million and after-tax
inventory valuation effect of $(747) million, had a negative impact on net income (Group share) of $5,431 million. Special items included
impairments on Fort Hills in Canada and Gladstone LNG in Australia as well as in Libya, an adjustment to depreciation on Usan in Nigeria
following the cancellation of the sale process and the impairment of exploration projects that will not be developed. Excluding these items,
adjusted net income declined by 21% to $8,287 million in 2016 compared to $10,518 million in 2015, primarily due to the impact of lower Brent
prices on Upstream results, partially offset by the contribution from downstream activities.
Income taxes in 2016 amounted to $970 million, a decrease of 41% compared to $1,653 million in 2015, due to the relative weight and lower
tax rates in the Upstream in a lower hydrocarbon price environment.
In 2016, the Company bought back 100,331,268 TOTAL treasury shares owned by Group affiliates under the authorization granted by the
shareholders at the meeting of May 24, 2016, which were subsequently canceled by the Company’s Board of Directors (for additional
information, refer to point 3 (“Share buybacks”) of chapter 8 of the 2016 Registration Document (starting on page 183), which is incorporated
herein by reference). TOTAL bought back approximately 4.7 million of its own shares in 2015 (i.e., approximately 0.19% of the share capital
as of December 31, 2015) under the authorization granted by the shareholders at the meeting of May 29, 2015. The number of fully-diluted
shares at December 31, 2016, was 2,436 million compared to 2,336 million at December 31, 2015.
Fully-diluted earnings per share, based on 2,390 million weighted-average shares, was $2.51 in 2016 compared to $2.16 in 2015, an
increase of 16%.
Asset sales were $1,864 million in 2016, mainly comprised of the sale of a 15% interest in the Gina Krog field in Norway, the FUKA gas
pipeline network in the North Sea and the retail network in Turkey. Asset sales were $5,968 million in 2015.
Acquisitions were $2,033 million in 2016, including $780 million of resource acquisitions, mainly comprised of the additional 75% interest in
the Barnett shale gas field in the United States, and the acquisitions of Saft, Lampiris and a retail network in the Dominican Republic.
Acquisitions were $3,441 million in 2015, including $2,808 million of resource acquisitions.
(1)
4
Consolidated subsidiaries, excluding fixed margins.
TOTAL S.A. Form 20-F 2016
Cash flow from operating activities was $16,521 million in 2016, a decrease of 17% compared to $19,946 million in 2015, essentially due to
the decrease in cash flow from operations as a result of lower hydrocarbon prices and refining margins. The change in working capital as
determined in accordance with IFRS was $(1,119) million in 2016, compared to $1,683 million in 2015. In 2016, the change in working capital
at replacement cost, which is the difference between the change in working capital of $(1,119) million and the pre-tax inventory valuation
effect of $652 million, was $(467) million compared to $570 million in 2015. Operating cash flow in 2016 excluding the change in working
capital at replacement cost(1) was $16,988 million, a decrease of 12% compared to $19,376 million in 2015.
See also “— 3. Liquidity and Capital Resources”, below.
–
Group results 2015 vs. 2014
Market conditions were less favorable in 2015 compared to 2014, with the average Brent price having decreased by 47% to $52.4/b in 2015
compared to $99.0/b in 2014. In 2015, TOTAL’s average liquids price realization decreased by 47% to $47.4/b from $89.4/b in 2014.
TOTAL’s average natural gas price realization for the Group’s consolidated subsidiaries decreased in 2015 by 28% to $4.75/Mbtu from
$6.57/Mbtu in 2014. In the downstream, the ERMI more than doubled to $48.5/t in 2015 compared to $18.7/t in 2014. In the fourth quarter
of 2015, the ERMI was $38.1/t. Petrochemical margins in Europe increased in 2015 due to a strong demand for polymers and the decrease
in raw material costs.
The Euro depreciated in 2015 compared to the US Dollar, with the euro-dollar exchange rate averaging $1.11/€ in 2015 compared to
$1.33/€ in 2014.
In this context, non-Group sales in 2015 were $165,357 million, a decrease of 30% compared to $236,122 million for 2014, due mainly to the
decrease of oil and gas prices, with non-Group sales decreasing 28% for the Upstream segment, 33% for the Refining & Chemicals segment
and 27% for the Marketing & Services segment.
Net income (Group share) in 2015 increased by 20% to $5,087 million from $4,244 million in 2014, mainly due to a less negative impact on
net income (Group share) in 2015 of special items, with the strong performance of the Group’s integrated model and its cost reduction
program being demonstrated despite the 47% drop in the Brent price. Adjustments to net income (Group share), which included special
items of $(4,675) million and after-tax inventory valuation effect of $(747) million, had a negative impact on net income (Group share) of
$5,431 million in 2015. Special items included impairments on Fort Hills in Canada and Gladstone LNG in Australia as well as in Libya, an
adjustment to depreciation on Usan in Nigeria following the cancellation of the sale process and the impairment of exploration projects that
will not be developed. In 2014, adjustment items, which included special items of $(6,165) million and after-tax inventory valuation effect of
$(2,453) million, had a negative impact on net income (Group share) of $8,593 million. Special items included impairments of oil sands in
Canada, unconventional gas notably in the United States, refining in Europe and certain other assets in the Upstream, which was partially
offset by a gain on asset sales, including for the Group’s interests in Shah Deniz in Azerbaijan and GTT. Excluding these items, adjusted net
income (Group share) declined by 18% to $10,518 million in 2015 compared to $12,837 million in 2014, primarily due to the impact of lower
Brent prices on Upstream results, partially offset by a higher contribution from downstream activities.
Income taxes in 2015 amounted to $1,653 million, a decrease of 81% compared to $8,614 million in 2014, as a result of the decrease in
taxable income and the Group’s lower tax rate.
TOTAL bought back in 2015 approximately 4.7 million of its own shares (i.e., approximately 0.19% of the share capital as of December 31,
2015) under the authorization granted by the shareholders at the meeting of May 29, 2015. The number of fully-diluted shares at
December 31, 2015, was 2,336 million compared to 2,285 million at December 31, 2014.
Fully-diluted earnings per share, based on 2,304 million weighted-average shares, was $2.16 in 2015 compared to $1.86 in 2014, an
increase of 16%.
Asset sales were $5,968 million in 2015, comprised mainly of the sales of Bostik, interests in onshore blocks in Nigeria, Totalgaz, the
Schwedt Refinery, the Geosel oil storage facility, coal mining assets in South Africa and partial interests in Laggan-Tormore and Fort Hills.
Asset sales were $4,650 million in 2014.
Acquisitions were $3,441 million in 2015, including $2,808 million of resource acquisitions, comprised mainly of the renewal of the ADCO
license in the United Arab Emirates, the acquisition of a further 0.7% in the capital of Novatek in Russia bringing the Group participation to
18.9%, and the carry on the Utica gas and condensate field in the United States. Acquisitions were $2,539 million in 2014, including
$1,765 million of resource acquisitions.
Cash flow from operating activities was $19,946 million in 2015, a decrease of 22% compared to $25,608 million in 2014, essentially due to
the decrease in cash flow from operations in the context of a 47% lower Brent price. The change in working capital as determined in
accordance with IFRS was $1,683 million in 2015, compared to $4,480 million in 2014. In 2015, the change in working capital at
replacement cost, which is the difference between the change in working capital of $1,683 million and the pre-tax inventory valuation effect of
$(1,113) million, was $570 million compared to $1,011 million in 2014. Operating cash flow in 2015 excluding the change in working capital
at replacement cost was $19,376 million, a decrease of 21% compared to $24,597 million in 2014.
See also “— 3. Liquidity and Capital Resources”, below.
–
Business segment reporting
The financial information for each business segment is reported on the same basis as that used internally by the chief operating decision-
maker in assessing segment performance and the allocation of segment resources. Due to their particular nature or significance, certain
transactions qualifying as “special items” are excluded from the business segment figures. In general, special items relate to transactions that
are significant, infrequent or unusual. In certain instances, certain transactions such as restructuring costs or asset disposals, which are not
considered to be representative of the normal course of business, may qualify as special items although they may have occurred in prior
years or are likely to recur in following years.
In accordance with IAS 2, the Group values inventories of petroleum products in its financial statements according to the First-In, First-Out
(FIFO) method and other inventories using the weighted-average cost method. Under the FIFO method, the cost of inventory is based on the
historic cost of acquisition or manufacture rather than the current replacement cost. In volatile energy markets, this can have a significant
distorting effect on the reported income. Accordingly, the adjusted results of the Refining & Chemicals and Marketing & Services segments
are presented according to the replacement cost method in order to facilitate the comparability of the Group’s results with those of its
competitors and to help illustrate the operating performance of these segments excluding the impact of oil price changes on the replacement
of inventories. In the replacement cost method, which approximates the Last-In, First-Out (LIFO) 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 price differential between one
(1)
Operating cash flow excluding the change in working capital at replacement cost provides information on underlying cash flow without the short-term impacts of changes in
inventory and other working capital elements at replacement cost. For information on the replacement cost method, refer to “— 2. Results 2014-2016 — Business segment
reporting” and Note 3 to the Consolidated Financial Statements in the 2016 Registration Document (starting on page 215), which is incorporated herein by reference.
2016 Form 20-F TOTAL S.A.
5
period and another or the average prices of the period. The inventory valuation effect is the difference between the results under the FIFO and
replacement cost methods.
The effect of changes in fair value presented as an adjustment item reflects, for trading inventories and storage contracts, differences
between internal measures of performance used by TOTAL’s management and the accounting for these transactions under IFRS, which
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
recorded at their fair value based on forward prices. Furthermore, TOTAL, in its trading activities, enters into storage contracts, the future
effects of which are recorded at fair value in the Group’s internal economic performance. IFRS, by requiring accounting for storage contracts
on an accrual basis, precludes recognition of this fair value effect.
The adjusted business segment results (adjusted operating income and adjusted net operating income) are defined as replacement cost
results, adjusted for special items, excluding the effect of changes in fair value. For further information on the adjustments affecting operating
income on a segment-by-segment basis, and for a reconciliation of segment figures to figures reported in the Company’s audited
consolidated financial statements, see Note 3 to the Consolidated Financial Statements in the 2016 Registration Document (starting on
page 215), which is incorporated herein by reference.
The Group measures performance at the segment level on the basis of adjusted net operating income. Net operating income comprises
operating income of the relevant segment after deducting the amortization and the depreciation of intangible assets other than leasehold
rights, translation adjustments and gains or losses on the sale of assets, as well as all other income and expenses related to capital employed
(dividends from non-consolidated companies, income from equity affiliates and capitalized interest expenses) and after income taxes
applicable to the above. The income and expenses not included in net operating income that are included in net income are interest
expenses related to long-term liabilities net of interest earned on cash and cash equivalents, after applicable income taxes (net cost of net
debt and non-controlling interests). Adjusted net operating income excludes the effect of the adjustments (special items and the inventory
valuation effect) described above. For further discussion of the calculation of net operating income and the calculation of return on average
capital employed (ROACE(1)), see Note 3 to the Consolidated Financial Statements in the 2016 Registration Document (starting on page 215),
which is incorporated herein by reference.
–
Upstream segment
Environment — liquids and gas price realizations(a)
Brent ($/b)
Average liquids price ($/b)
Average gas price ($/Mbtu)
Average hydrocarbons price ($/boe)
(a) Consolidated subsidiaries, excluding fixed margins.
Production
Combined production (kboe/d)
(cid:129) Liquids (kb/d)
(cid:129) Gas (Mcf/d)
Results (M$)
Non-Group sales
Operating income(a)
Equity in income (loss) of affiliates and other items
Effective tax rate(b)
Tax on net operating income
Net operating income(a)
Adjustments affecting net operating income
Adjusted net operating income(c)
Investments
Divestments
Organic investments
Cash flow from operating activities
ROACE
2016
2015
2014
43.7
40.3
3.56
31.9
52.4
47.4
4.75
39.2
99.0
89.4
6.57
66.2
2016
2015
2014
2,452
1,271
6,447
2,347
1,237
6,054
2,146
1,034
6,063
2016
2015
2014
23,484
16,840
14,683
(2,941) 10,494
(274)
1,489
4,302
2,019
26.6% 45.5% 57.1%
(8,799)
5,997
4,507
10,504
26,520
5,764
22,959
16,666
11%
(294)
(1,216)
5,990
4,774
24,270
3,215
20,508
11,182
5%
363
1,578
2,055
3,633
16,035
2,331
14,316
9,675
3%
(a) For the definitions of operating income and net operating income, refer to Note 3 to the Consolidated Financial Statements in the 2016 Registration
(b)
Document (starting on page 215), which is incorporated herein by reference.
“Effective tax rate” = tax on adjusted net operating income / (adjusted net operating income — income from equity affiliates — dividends received from
investments — impairment of goodwill + tax on adjusted net operating income).
(c) Adjusted for special items. See Note 3 to the Consolidated Financial Statements in the 2016 Registration Document (starting on page 215), which is
incorporated herein by reference.
2016 vs. 2015
Market conditions were less favorable in 2016 compared to 2015. The average realized price of liquids decreased by 15% and the average
realized gas prices by 25%.
For the full-year 2016, hydrocarbon production was 2,452 kboe/d, an increase of 4.5% compared to 2,347 kboe/d in 2015, due to the
following:
(cid:129)
+6% due to new start ups and ramp ups, notably Laggan-Tormore, Surmont Phase 2, Termokarstovoye, Gladstone LNG, Moho
Phase 1b, and Vega Pleyade, and Incahuasi; and
-1.5% due to the security situation in Nigeria and Yemen, and wild fires in Canada.
Natural field decline was offset by a positive price effect(2) and portfolio effects.
(cid:129)
(cid:129)
For a discussion of the Group’s proved reserves, refer to point 2.1.1.2 (“Reserves”) of chapter 2 of the 2016 Registration Document (starting
on page 10), which is incorporated herein by reference. See also point 1 (“Oil and gas information pursuant to FASB Accounting Standards
Codification 932”) of chapter 11 of the 2016 Registration Document (starting on page 308), which is incorporated herein by reference, for
additional information on proved reserves, including tables showing changes in proved reserves by region.
(1)
(2)
6
“ROACE” = ratio of adjusted net operating income to average capital employed at replacement cost between the beginning and the end of the period.
The “price effect” refers to the impact of changing hydrocarbon prices on entitlement volumes from production sharing and buyback contracts. For example,
as the price of oil or gas increases above certain pre-determined levels, TOTAL’s share of production generally decreases.
TOTAL S.A. Form 20-F 2016
Non-Group sales for the segment in 2016 were $14,683 million compared to $16,840 million in 2015, a decrease of 13%.
Adjusted net operating income from the Upstream segment was $3,633 million in 2016, a decrease of 24% compared to 2015. The increase
in production combined with the decrease in operating costs as well as the lower effective tax rate partially offset the impact of lower
hydrocarbon prices.
Adjusted net operating income for the Upstream segment excludes special items. The exclusion of special items had a positive impact on the
segment’s adjusted net operating income in 2016 of $2,055 million, comprised mainly of impairments on Gladstone LNG in Australia, Angola
LNG, and Laggan-Tormore in the United Kingdom, reflecting the decrease in gas price assumptions for the coming years (for additional
information, refer to Note 3 to the Consolidated Financial Statements in the 2016 Registration Document (starting on page 215), which is
incorporated herein by reference). In 2015, the exclusion of special items had a positive impact on the segment’s adjusted net operating
income of $5,990 million, comprised mainly of impairments on Fort Hills in Canada and Gladstone LNG in Australia as well as in Libya, an
adjustment to depreciation on Usan in Nigeria following the cancellation of the sale process and the impairment of exploration projects that
will not be developed.
Technical costs(1) for consolidated subsidiaries, calculated in accordance with ASC 932(2), were reduced to $20.4/boe in 2016 compared to
$23.0/boe in 2015. This decrease was essentially due to the reduction in operating costs from $7.4/boe in 2015 to $5.9/boe in 2016.
Cash flow from operating activities was $9,675 million in 2016, a decrease of 13% compared to $11,182 million in 2015. Operating cash flow
in 2016 for the segment excluding the change in working capital at replacement cost of $(237) million ($3 million in 2015) was $9,912 million,
a decrease of 11% compared to $11,179 million in 2015, essentially due to the decrease in hydrocarbon prices, partially offset by the
increase in production and decrease in operating costs.
For information on the Upstream segment’s capital expenditures, refer to points 2.1.1.1 (“Exploration and development”) (on page 10) and 3
(“Investments”) (starting on page 42) of chapter 2 of the 2016 Registration Document, which are incorporated herein by reference. See also
“— 3. Liquidity and Capital Resources”, below.
In this context, the segment’s ROACE for the full-year 2016 was 3% compared to 5% for the full-year 2015.
2015 vs. 2014
Market conditions were less favorable in 2015. The average realized price of liquids fell by 47% and the average realized price of gas by 28%
compared to 2014.
For the full-year 2015, hydrocarbon production was 2,347 kboe/d, an increase of 9.4% compared to 2014, due to the following:
(cid:129)
(cid:129)
(cid:129)
(cid:129)
+6% for new project start ups and ramp ups, notably CLOV, West Franklin Phase 2, Eldfisk II and Termokarstovoye;
+6% due to portfolio changes, mainly the extension of the ADCO concession in the United Arab Emirates, partially offset by asset
sales in the North Sea, Nigeria and Azerbaijan;
-4% due to shutdowns in Yemen and in Libya; and
+1% due to the price effect and field performance, net of natural field decline.
For a discussion of the Group’s proved reserves, refer to point 2.1.1.2 (“Reserves”) of chapter 2 of the 2016 Registration Document (starting
on page 10), which is incorporated herein by reference. See also point 1 (“Oil and gas information pursuant to FASB Accounting Standards
Codification 932”) of chapter 11 of the 2016 Registration Document (starting on page 308), which is incorporated herein by reference, for
additional information on proved reserves, including tables showing changes in proved reserves by region.
Non-Group sales for the segment in 2015 were $16,840 million compared to $23,484 million in 2014, a decrease of 28%.
Adjusted net operating income from the Upstream segment was $4,774 million for the full-year 2015, a decrease of 55% compared to
$10,504 million for 2014, essentially due to the lower price of hydrocarbons, partially offset by an increase in production, a decrease in
operating costs, and a lower effective tax rate.
Adjusted net operating income for the Upstream segment excludes special items. The exclusion of special items had a positive impact on the
segment’s adjusted net operating income in 2015 of $5,990 million, comprised mainly of impairments on Fort Hills in Canada and Gladstone
LNG in Australia as well as in Libya, an adjustment to depreciation on Usan in Nigeria following the cancellation of the sale process and the
impairment of exploration projects that will not be developed. In 2014, the exclusion of special items had a positive impact on the segment’s
adjusted net operating income of $4,507 million, comprised mainly of the impairment of the Group’s oil sands assets in Canada, its
unconventional gas assets, notably in the United States, and certain other assets in the Upstream segment.
Technical costs for consolidated subsidiaries, calculated in accordance with ASC 932, were $23.0/boe in 2015 compared to $28.3/boe in
2014. This reduction was essentially due to the execution of the Group’s program to reduce operating costs (which decreased from $9.9/boe
in 2014 to $7.4/boe in 2015) and lower depreciation (portfolio effect).
Cash flow from operating activities was $11,182 million in 2015, a decrease of 33% compared to $16,666 million in 2014. Operating cash
flow in 2015 for the segment excluding the change in working capital at replacement cost of $3 million ($(2,001) million in 2014) was
$11,179 million, a decrease of 40% compared to $18,667 million in 2014.
For information on the Upstream segment’s capital expenditures, refer to points 2.1.1.1 (“Exploration and development”) (on page 10) and 3
(“Investments”) (starting on page 42) of chapter 2 of the 2016 Registration Document, which are incorporated herein by reference. See also
“— 3. Liquidity and Capital Resources”, below.
In this context, the segment’s ROACE for the full-year 2015 was 5% compared to 11% for the full-year 2014.
–
Refining & Chemicals segment
Refinery throughput and utilization rates(a)
Total refinery throughput (kb/d)
(cid:129) France
(cid:129) Rest of Europe
(cid:129) Rest of World
Utilization rates(b)
(cid:129) Based on crude only
(cid:129) Based on crude and other feedstock
2016
2015
2014
1,965
669
802
494
85%
87%
2,023
674
849
500
86%
88%
1,775
639
794
342
77%
81%
(a)
Includes share of TotalErg, as well as refineries in Africa and the French Antilles that are reported in the Marketing & Services segment. The condensate
splitters at Port Arthur and Daesan are also included and 2015 figures have been restated accordingly.
(b) Based on distillation capacity at the beginning of the year.
(1)
(2)
“Technical costs” = (Production costs + exploration expenses + depreciation, depletion and amortization and valuation allowances)/production of the year.
Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 932, Extractive industries — Oil and Gas.
2016 Form 20-F TOTAL S.A.
7
Results (M$, except ERMI)
European refining margin indicator (“ERMI”) ($/t)
Non-Group sales
Operating income(a)
Equity in income (loss) of affiliates and other items
Tax on net operating income
Net operating income(a)
Adjustments affecting net operating income
Adjusted net operating income(b)
(cid:129) Including specialty chemicals(c)
Investments
Divestments
Organic investments
Cash flow from operating activities
ROACE
2016
2015
2014
34.1
65,632
5,000
833
(1,245)
4,588
(387)
4,201
581
1,849
86
1,636
4,587
38%
48.5
70,623
4,544
1,780
(1,105)
5,219
(330)
4,889
496
1,843
3,488
827
6,432
41%
18.7
106,124
(1,691)
90
391
(1,210)
3,699
2,489
629
2,022
192
1,944
6,302
15%
(a) For the definitions of operating income and net operating income, refer to Note 3 to the Consolidated Financial Statements in the 2016 Registration
Document (starting on page 215), which is incorporated herein by reference.
(b) Adjusted for special items. See Note 3 to the Consolidated Financial Statements in the 2016 Registration Document (starting on page 215), which is
incorporated herein by reference.
(c) Hutchinson and Atotech. Bostik until February 2015.
2016 vs. 2015
The ERMI averaged $34/t in 2016, a decrease of 30% compared to the high level of 2015, in the context of high petroleum product stocks. In
the fourth quarter of 2016, the ERMI was $41.0/t. Refinery throughput for the full-year 2016 decreased by 3% compared to 2015, notably
due to shutdowns in Europe and the United States in the second quarter and the sale of the Schwedt refinery in Germany.
Non-Group sales for the segment in 2016 were $65,632 million compared to $70,623 million in 2015, a decrease of 7%.
The segment’s adjusted net operating income was $4,201 million in 2016, a decrease of 14% compared to 2015, essentially due to the
decrease in refining margins. Petrochemicals continued to generate good results, notably due to the strong contribution from the Group’s
major integrated platforms in Asia and the Middle East.
Adjusted net operating income for the Refining & Chemicals segment excludes any after-tax inventory valuation effect and special items. The
exclusion of the inventory valuation effect had a negative impact on the segment’s adjusted net operating income in 2016 of $500 million
compared to a positive impact of $590 million in 2015. The exclusion of special items had a positive impact on the segment’s adjusted net
operating income in 2016 of $113 million compared to a negative impact in 2015 of $920 million, consisting essentially of gains on asset
sales.
Cash flow from operating activities was $4,587 million in 2016, a decrease of 29% compared to $6,432 million in 2015. Operating cash flow
in 2016 for the segment excluding the change in working capital at replacement cost of $(291) million ($647 million in 2015) was
$4,878 million, a decrease of 16% compared to $5,785 million in 2015.
For information on the Refining & Chemicals segment’s investments, refer to point 3 (“Investments”) of chapter 2 of the 2016 Registration
Document (starting on page 42), which is incorporated herein by reference. See also “— 3. Liquidity and Capital Resources”, below.
In this context, the segment’s ROACE for the full-year 2016 was 38% compared to 41% for the full year 2015.
2015 vs. 2014
In 2015, the segment benefited from a favorable environment, notably in Europe. The ERMI averaged $48.5/t in 2015 compared to $18.7/t in
2014, mainly due to strong demand for gasoline. In the fourth quarter of 2015, the ERMI was $38.1/t. Refinery throughput in 2015 increased
by 14% to 2,023 kb/d compared to 1,775 kb/d in 2014. Actions to improve the availability in Europe resulted in a high utilization rate of 89%.
The segment also benefited from the ramp-up of SATORP in Saudi Arabia. Petrochemical margins in Europe increased in 2015 due to strong
demand for polymers and the decrease in raw material costs.
Non-Group sales for the segment in 2015 were $70,623 million compared to $106,124 million in 2014, a decrease of 33%.
The segment’s adjusted net operating income in 2015 was $4,889 million, twice the level of $2,489 million in 2014, due to strong industrial
performance during a period of high margins and cost reduction programs.
Adjusted net operating income for the Refining & Chemicals segment excludes any after-tax inventory valuation effect and special items. The
exclusion of the inventory valuation effect had a positive impact on the segment’s adjusted net operating income in 2015 of $590 million
compared to a positive impact of $2,114 million in 2014, for both periods essentially due to a reduction of stock. The exclusion of special
items had a negative impact on the segment’s adjusted net operating income in 2015 of $920 million, consisting essentially of gains on asset
sales, compared to a positive impact of $1,585 million in 2014, consisting essentially of impairments of European refining assets.
Cash flow from operating activities was $6,432 million in 2015, an increase of 2% compared to $6,302 million in 2014. Operating cash flow in
2015 for the segment excluding the change in working capital at replacement cost of $647 million ($2,274 million in 2014) was $5,785 million,
an increase of 44% compared to $4,028 million in 2014.
For information on the Refining & Chemicals segment’s investments, refer to point 3 (“Investments”) of chapter 2 of the 2016 Registration
Document (starting on page 42), which is incorporated herein by reference. See also “— 3. Liquidity and Capital Resources”, below.
In this context, the segment’s ROACE for the full-year 2015 was 41% compared to 15% for the full year 2014.
–
Marketing & Services segment
Petroleum product sales (kb/d)(a)
Total Marketing & Services sales
(cid:129) Europe
(cid:129) Rest of world
2016
2015
2014
1,793
1,093
700
1,818
1,092
726
1,769
1,100
669
(a) Excludes trading and bulk Refining sales, which are reported under the Refining & Chemicals segment; includes share of TotalErg.
8
TOTAL S.A. Form 20-F 2016
Results (M$)
Non-Group sales
Operating income(a)
Equity in income (loss) of affiliates and other items
Tax on net operating income
Net operating income(a)
Adjustments affecting net operating income
Adjusted net operating income(b)
(cid:129) Including New Energies
Investments
Divestments
Organic investments
Cash flow from operating activities
ROACE
2016
2015
2014
69,421
1,461
84
(506)
1,039
547
1,586
26
2,506
446
1,432
1,623
18%
77,887
1,758
297
(585)
1,470
229
1,699
108
1,841
856
1,569
2,323
20%
106,509
1,158
(140)
(344)
674
580
1,254
10
1,818
163
1,424
2,721
13%
(a) For the definitions of operating income and net operating income, refer to Note 3 to the Consolidated Financial Statements in the 2016 Registration
Document (starting on page 215), which is incorporated herein by reference.
(b) Adjusted for special items. See Note 3 to the Consolidated Financial Statements in the 2016 Registration Document (starting on page 215), which is
incorporated herein by reference.
2016 vs. 2015
In 2016, refined product sales decreased slightly compared to 2015, essentially due to the sale of the retail network in Turkey. Excluding
portfolio effects, retail network sales increased by around 4%. Sales of land-based lubricants also increased by around 4%.
Non-Group sales for the segment in 2016 were $69,421 million compared to $77,887 million in 2015, a decrease of 11%.
Adjusted net operating income in 2016 for the segment was $1,586 million in 2016, a decrease of 7% compared to 2015. Excluding New
Energies, which benefited in 2015 from the delivery of the Quinto solar farm in the United States, adjusted net operating income was stable
despite asset sales (retail network in Turkey).
Adjusted net operating income for the Marketing & Services segment excludes any after-tax inventory valuation effect and special items. The
exclusion of the inventory valuation effect had a positive impact on the segment’s adjusted net operating income in 2016 of $13 million
compared to a positive impact of $169 million in 2015. The exclusion of special items had a positive impact on the segment’s adjusted net
operating income in 2016 of $534 million, including restructuring charges related to New Energies, compared to a positive impact of
$60 million in 2015.
Cash flow from operating activities was $1,623 million in 2016, a decrease of 30% compared to $2,323 million in 2015. Operating cash flow
in 2016 for the segment excluding the change in working capital at replacement cost of $(208) million ($258 million in 2015) was
$1,831 million, a decrease of 11% compared to $2,065 million in 2015.
For information on the Marketing & Services segment’s investments, refer to point 3 (“Investments”) of chapter 2 of the 2016 Registration
Document (starting on page 42), which is incorporated herein by reference. See also “— 3. Liquidity and Capital Resources”, below.
In this context, the segment’s ROACE for the full-year 2016 was 18% compared to 20% for the full year 2015.
2015 vs. 2014
The segment’s petroleum product sales were 1,818 kb/d in 2015 compared to 1,769 kb/d in 2014, an increase of 3%. In addition to strong
growth in Africa, the sector benefited from its strategic repositioning in Europe and demand stimulated by lower prices.
Non-Group sales for the segment in 2015 were $77,887 million compared to $106,509 million in 2014, a decrease of 27%.
Adjusted net operating income in 2015 for the segment was $1,699 million compared to $1,254 million in 2014, an increase of 35%
benefiting from an increase in sales and margins in a favorable environment, and the contribution of SunPower.
Adjusted net operating income for the Marketing & Services segment excludes any after-tax inventory valuation effect and special items. The
exclusion of the inventory valuation effect had a positive impact on the segment’s adjusted net operating income in 2015 of $169 million
compared to a positive impact of $384 million in 2014. The exclusion of special items had a positive impact on the segment’s adjusted net
operating income in 2015 of $60 million compared to a positive impact of $196 million in 2014.
Cash flow from operating activities was $2,323 million in 2015, a decrease of 15% compared to $2,721 million in 2014. Operating cash flow
in 2015 for the segment excluding the change in working capital at replacement cost of $258 million ($705 million in 2014) was
$2,065 million, an increase of 2% compared to $2,016 million in 2014.
For information on the Marketing & Services segment’s investments, refer to point 3 (“Investments”) of chapter 2 of the 2016 Registration
Document (starting on page 42), which is incorporated herein by reference. See also “— 3. Liquidity and Capital Resources”, below.
In this context, the segment’s ROACE for the full-year 2015 was 20% compared to 13% for the full year 2014.
3. Liquidity and capital resources
(M$)
Cash flow from operating activities
Including (increase) decrease in working capital
Cash flow used in investing activities
Total expenditures
Total divestments
Cash flow from financing activities
Net increase (decrease) in cash and cash equivalents
Effect of exchange rates
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
2016
2015
2014
16,521
(1,119)
(17,653)
(20,530)
2,877
3,532
2,400
(1,072)
23,269
24,597
19,946
1,683
(20,449)
(28,033)
7,584
1,060
577
(2,469)
25,181
23,269
25,608
4,480
(24,319)
(30,509)
6,190
5,909
7,198
(2,217)
20,200
25,181
2016 Form 20-F TOTAL S.A.
9
TOTAL’s cash requirements for working capital, capital expenditures, acquisitions and dividend payments over the past three years were
financed primarily by a combination of funds generated from operations, borrowings and divestments of non-core assets. In the current
environment, TOTAL expects its external debt to be principally financed from the international debt capital markets. The Group continually
monitors the balance between cash flow from operating activities and net expenditures. In the Company’s opinion, its working capital is
sufficient for its present requirements.
–
Capital expenditures
The largest part of TOTAL’s capital expenditures in 2016 was made up of additions to intangible assets and property, plant and equipment
(approximately 87%), with the remainder attributable to equity-method affiliates and to acquisitions of subsidiaries. In the Upstream segment,
as described in more detail under point 1.6 (“Cost incurred”) of chapter 11 of the 2016 Registration Document (on page 321), which is
incorporated herein by reference, capital expenditures in 2016 were principally development costs (approximately 90%, mainly for
construction of new production facilities), exploration expenditures (successful or unsuccessful, approximately 4%) and acquisitions of proved
and unproved properties (approximately 6%). In the Refining & Chemicals segment, about 75% of capital expenditures in 2016 were related
to refining and petrochemical activities (essentially 50% for existing units including maintenance and major turnarounds and 50% for new
construction), the balance being related to Specialty Chemicals. In the Marketing & Services segment, capital expenditures were split
between marketing/retail activities (approximately 50%) and New Energies (approximately 50%). For additional information on capital
expenditures, please refer to the discussion above in “— 1. Overview” and “— 2. Results 2014-2016”, above, and point 3 (“Investments”) of
chapter 2 of the 2016 Registration Document (starting on page 42), which is incorporated herein by reference.
–
Cash flow
Cash flow from operating activities in 2016 was $16,521 million compared to $19,946 million in 2015 and $25,608 million in 2014. The
$3,425 million decrease in cash flow from operating activities from 2015 to 2016 was due mainly to an increase in working capital
requirements in 2016 of $1,119 million compared to a decrease of $1,683 million in 2015. The Group’s working capital requirement was
affected by the effect of changes in oil and oil product prices. As IFRS rules require TOTAL to account for inventories of petroleum products
according to the FIFO method, an increase in oil and oil products in 2016 compared to a decrease in 2015 generates, all other factors
remaining equal, an increase in inventories, resulting in an increase in working capital requirements. In 2016, the Group’s working capital
requirement increased by $1,119 million, due to increases in inventories and receivables partially offset by an increase in payables. The
Group’s working capital requirement decreased by $1,683 million in 2015 and by $4,480 million in 2014, in both cases mainly due to
reductions in inventory and receivables.
Cash flow used in investing activities in 2016 was $17,653 million compared to $20,449 million in 2015 and $24,319 million in 2014. The
decrease from 2015 to 2016 was mainly due to lower expenditures on the Group’s portfolio of Upstream projects and lower divestments
mainly in the Refining & Chemicals segment, which had a higher level of divestments in 2015 due to the sale of Bostik. The decrease from
2014 to 2015 was due to lower expenditures on the Group’s portfolio of Upstream projects, as various projects approached completion, and
by the divestment of Bostik in the Refining & Chemicals segment, partly offset by the extension of the ADCO concession in Abu Dhabi. Total
expenditures in 2016 were $20,530 million compared to $28,033 million in 2015 and $30,509 million in 2014. During 2016, 78% of the
expenditures were made by the Upstream segment (as compared to 87% in 2015 and 2014), 9% by the Refining & Chemicals segment
(compared to 7% in 2015 and 2014) and 13% by the Marketing & Services segment (compared to 6% in 2015 and 2014). The main source
of funding for these expenditures has been cash from operating activities and issuances of non-current debt and perpetual subordinated
notes. For additional information on expenditures, please refer to the discussions in “— 1. Overview” and “— 2. Results 2014-2016”, above,
and point 3 (“Investments”) of chapter 2 of the 2016 Registration Document (starting on page 42), which is incorporated herein by reference.
Divestments, based on selling price and net of cash sold, in 2016 were $2,877 million compared to $7,584 million in 2015 and $6,190 million in
2014. In 2016, the Group’s principal divestments were asset sales of $1,864 million, consisting mainly of interests in the FUKA and SIRGE gas
pipelines, and the St. Fergus gas terminal in the United Kingdom. In 2015, the Group’s principal divestments were asset sales of $5,968 million,
consisting mainly of sales of Bostik, interests in onshore blocks in Nigeria, Totalgaz, the Schwedt refinery, the Géosel oil storage facility, coal
mining assets in South Africa, and partial interests in Laggan-Tormore and Fort Hills. In 2014, the Group’s principal divestments were asset
sales of $4,650 million, consisting mainly of sales in the Upstream segment in Azerbaijan, Angola and the United States.
Cash flow raised from financing activities in 2016 was $3,532 million compared to $1,060 million in 2015 and $5,909 million in 2014. The
increase in cash flow from financing activities in 2016 compared to 2015 was primarily due to the variation of current financial assets and
liabilities ($1,396 million in 2016 compared to $(5,517) million in 2015), partially offset by the decrease in variation of current borrowings
$(3,260) million in 2016 compared to $(597) million in 2015), the lower issuance of perpetual subordinated notes in 2016 ($4,711 million
compared to $5,616 million in 2015) and the decrease in net issuance of non-current borrowings ($3,576 million in 2016 compared to
$4,166 million in 2015).
–
Indebtedness
The Company’s non-current financial debt at year-end 2016 was $43,067 million(1) compared to $44,464 million at year-end 2015 and
$45,481 million at year-end 2014. For further information on the Company’s level of borrowing and the type of financial instruments, including
maturity profile of debt and currency and interest rate structure, see Note 15 to the Consolidated Financial Statements in the 2016
Registration Document (starting on page 270), which is incorporated herein by reference. For further information on the Company’s treasury
policies, including the use of instruments for hedging purposes and the currencies in which cash and cash equivalents are held, see “Item 11.
Quantitative and Qualitative Disclosures About Market Risk”.
On February 22, 2016, Standard & Poor’s downgraded TOTAL’s long term credit rating from AA- to A+ with a negative outlook. The short
term credit rating was also downgraded from A-1+ to A-1. On April 8, 2016, Moody’s downgraded TOTAL’s long term credit rating from Aa1
to Aa3 with a stable outlook.
Cash and cash equivalents at year-end 2016 were $24,597 million compared to $23,269 million at year-end 2015 and $25,181 million at
year-end 2014.
–
Shareholders’ equity
Shareholders’ equity at year-end 2016 was $101,574 million compared to $95,409 million at year-end 2015 and $93,531 million at year-end
2014. Changes in shareholders’ equity in 2016 were primarily due to the impacts of comprehensive income, dividend payments, the issuance
of perpetual subordinated notes and the issuance of common shares. Changes in shareholders’ equity in 2015 were primarily due to the
impacts of dividend payments, the issuance of perpetual subordinated notes and the issuance of common shares. Changes in shareholders’
equity in 2014 were primarily due to the impacts of dividend payments, variations in foreign exchange and impairments (for information
concerning the impairments, refer to “—2. Results 2014-2016”, above).
(1)
Excludes net current and non-current financial debt of $(140) million as of December 31, 2016, $141 million as of December 31, 2015 and $(56) million as of
December 31, 2014, related to assets classified in accordance with IFRS 5 “non-current assets held for sale and discontinued operations”.
10
TOTAL S.A. Form 20-F 2016
At the meeting held on December 15, 2016, and pursuant to the authorization of the Extraordinary Shareholders’ Meeting of May 11, 2012,
the Board of Directors of TOTAL S.A. decided to cancel 100,331,268 treasury shares (i.e., 4.13% of the share capital as of December 31,
2016) that TOTAL S.A. had bought back off-market in December 2016 from four of its 100% indirectly controlled subsidiaries. Following this
transaction, Group affiliates no longer hold any treasury shares. This buyback of shares had no impact on the consolidated financial
statements of TOTAL S.A. For additional information, refer to point 3 of chapter 8 (“Share buybacks”) of the 2016 Registration Document
(starting on page 183), which is incorporated herein by reference. In 2015, TOTAL S.A. bought back nearly 4.7 million of its own shares
(i.e., 0.19% of the share capital as of December 31, 2015) under the previous authorization granted by the shareholders at the meeting of
May 29, 2015. In 2014, TOTAL S.A. bought back nearly 4.4 million of its own shares (i.e., 0.18% of the share capital as of December 31,
2014) under the authorization granted by the shareholders at the meeting of May 16, 2014.
–
Net-debt-to-equity
As of December 31, 2016, TOTAL’s net-debt-to-equity ratio(1) was 27.1% compared to 28.3% and 31.3% at year-ends 2015 and 2014,
respectively. The decrease from 2014 to 2015 was mostly due to the issuance of perpetual subordinated notes.
As of December 31, 2016, TOTAL S.A. had $10,076 million of long-term confirmed lines of credit, of which $10,076 million were unused.
4. Guarantees and other off-balance sheet arrangements
As of December 31, 2016, the guarantees provided by TOTAL S.A. in connection with the financing of the Ichthys LNG project amounted to
$7,800 million.
Guarantees given against borrowings also include the guarantee given in 2008 by TOTAL S.A. in connection with the financing of the Yemen
LNG project for an amount of $551 million and the guarantee given in 2016 by TOTAL S.A. in connection with the financing of the Yamal LNG
project for an amount of $3,147 million.
In 2015, TOTAL S.A. has confirmed and extended guarantees for TOTAL Refining SAUDI ARABIA SAS shareholders’ advances for an
amount of $1,013 million. As of December 31, 2016, the guarantees amounted to $1,230 million.
These guarantees and other information on the Company’s commitments and contingencies are presented in Note 13 to the Consolidated
Financial Statements in the 2016 Registration Document (starting on page 263), which is incorporated herein by reference.
The Group does not currently consider that these guarantees, or any other off-balance sheet arrangements of TOTAL S.A. nor any other
members of the Group, have or are reasonably likely to have, currently or in the future, a material effect on the Group’s financial condition,
changes in financial condition, revenues or expenses, results of operation, liquidity, capital expenditures or capital resources.
5. Contractual obligations
Payment due by period (M$)
Non-current debt obligations(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of non-current debt obligations(b) . . . . . . . . . . . . . . . . . . . . . . .
Finance lease obligations(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Asset retirement obligations(d)
Operating lease obligations(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Purchase obligations(e)
Less
than
1 year
1-3
years
— 9,963
—
59
1,325
1,831
8,731
4,614
8
685
1,582
10,898
3-5
years
8,486
—
44
944
1,122
11,839
More
than
5 years
23,398
—
208
9,711
1,943
73,740
Total
41,847
4,614
319
12,665
6,478
105,208
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17,787
21,909
22,435
109,000
171,131
(a) Non-current debt obligations are included in the items “Non-current financial debt” and “Hedging instruments of non-current financial debt” of the Consolidated
(b)
(c)
(d)
(e)
Balance Sheet (refer to point 4 of chapter 10 of the 2016 Registration Document (on page 209), which is incorporated herein by reference). The figures in this
table are net of the non-current portion of issue swaps and swaps hedging bonds, and exclude non-current finance lease obligations of $311 million and net
current and non-current financial debt of $(140) million related to assets classified in accordance with IFRS 5 “non-current assets held for sale and
discontinued operations”.
The current portion of non-current debt is included in the items “Current borrowings”, “Current financial assets” and “Other current financial liabilities” of the
balance sheet. The figures in this table are net of the current portion of issue swaps and swaps hedging bonds and exclude the current portion of finance lease
obligations of $8 million.
Finance lease obligations and operating lease obligations: the Group leases real estate, retail stations, ships, and other equipment through non-cancelable
capital and operating leases. These amounts represent the future minimum lease payments on non-cancelable leases to which the Group is committed as of
December 31, 2016, less the financial expense due on finance lease obligations for $74 million.
The discounted present value of Upstream asset retirement obligations, primarily asset removal costs at the completion date.
Purchase obligations are obligations under contractual agreements to purchase goods or services, including capital projects. These obligations are enforceable
and legally binding on TOTAL 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 downstream capital investment projects. This disclosure does not include contractual exploration obligations with host states where a monetary
value is not attributed and purchases of booking capacities in pipelines where the Group has a participation superior to the capacity used.
For additional information on the Group’s contractual obligations, see Note 13 to the Consolidated Financial Statements in the 2016 Registration
Document (starting on page 263), which is incorporated herein by reference. The Group has other obligations in connection with pension plans
which are described in Note 10 to the Consolidated Financial Statements in the 2016 Registration Document (starting on page 254), which is
incorporated herein by reference. As these obligations are not contractually fixed as to timing and amount, they have not been included in this
disclosure. Other non-current liabilities, detailed in Note 12 to the Consolidated Financial Statements in the 2016 Registration Document (starting on
page 260), which is incorporated herein by reference, are liabilities related to risks that are probable and amounts that can be reasonably estimated.
However, no contractual agreements exist related to the settlement of such liabilities, and the timing of the settlement is not known.
(1) Net-debt-to-equity ratio = net debt (i.e., the sum of current borrowings, other current financial liabilities and non-current financial debt, net of current financial
assets, net financial assets and liabilities related to assets classified in accordance with IFRS 5 as non-current assets held for sale, hedging instruments on
non-current financial debt and cash and cash equivalents) divided by the sum of shareholders’ equity and non-controlling interests after expected dividends
payable.
2016 Form 20-F TOTAL S.A.
11
6. Research and development
For a discussion of the Group’s R&D policies and activities, refer to point 4 (“Research & Development”) of chapter 2 of the 2016 Registration
Document (starting on page 44), which is incorporated herein by reference.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
The following information concerning directors and senior management from the 2016 Registration Document is incorporated herein by reference:
(cid:129)
(cid:129)
composition of the Board of Directors and related information (introduction and point 1.1 of chapter 5, starting on page 86); and
General Management (point 2 of chapter 5, on page 112).
The following information concerning compensation from the 2016 Registration Document is incorporated herein by reference:
(cid:129)
(cid:129)
approach to overall compensation (point 1.1.3 of chapter 7, starting on page 146); and
compensation of the administration and management bodies (points 1 to 6 of chapter 6, starting on page 116).
The following information concerning board practices and corporate governance from the 2016 Registration Document is incorporated herein
by reference:
(cid:129)
(cid:129)
practices of the Board of Directors (point 1.2 of chapter 5, starting on page 97); and
statement regarding corporate governance (point 1.3 of chapter 5, on page 111).
The following information concerning employees and share ownership from the 2016 Registration Document is incorporated herein by reference:
(cid:129)
(cid:129)
(cid:129)
(cid:129)
Group employees as of December 31, 2016 (point 1.1.1 of chapter 7, on page 145);
employees joining and leaving TOTAL (point 1.1.2 of chapter 7, on page 146);
shares held by the administration and management bodies (point 3 of chapter 5, starting on page 112); and
employee shareholding (point 4.2 of chapter 8, on page 189).
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
The following information concerning shareholders from the 2016 Registration Document is incorporated herein by reference:
(cid:129)
(cid:129)
major shareholders (point 4.1 of chapter 8, starting on page 187); and
shareholding structure (point 4.3 of chapter 8, on page 190).
The Group’s main transactions with related parties (principally all the investments carried under the equity method) and the balances
receivable from and payable to them are shown in Note 8 to the Consolidated Financial Statements in the 2016 Registration Document
(starting on page 239), which is incorporated herein by reference). In the ordinary course of its business, TOTAL enters into transactions with
various organizations with which certain of its directors or executive officers may be associated, but no such transactions of a material or
unusual nature have been entered into during the period commencing on January 1, 2014, and ending on March 15, 2017.
ITEM 8. FINANCIAL INFORMATION
The following information from the 2016 Registration Document is incorporated herein by reference:
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
Consolidated Financial Statements and Notes thereto (points 2 to 7 of chapter 10, starting on page 205);
supplemental oil and gas information (points 1 and 2 of chapter 11, starting on page 308);
report on payments made to governments (point 3 of chapter 11, starting on page 329);
legal and arbitration proceedings (point 2 of chapter 4, starting on page 73); and
dividend policy and other related information (point 2 of chapter 8, starting on page 181).
Except for certain events mentioned in “Item 5. Operating and Financial Review and Prospects” and point 2 (“Legal and arbitration
proceedings”) of chapter 4 (starting on page 73) and Note 17 (“Post closing events”) to the Consolidated Financial Statements (on page 289)
of the 2016 Registration Document, which are incorporated herein by reference, no significant changes to the Group’s financial or
commercial situation have occurred since the date of the Company’s Consolidated Financial Statements.
Refer to “Item 18. Financial Statements” for the reports of the statutory auditors.
1. Markets
ITEM 9. THE OFFER AND LISTING
The principal trading markets for the Company’s shares are the Euronext Paris exchange in France and the New York Stock Exchange
(“NYSE”) in the United States. The shares are also listed on Euronext Brussels and the London Stock Exchange.
2. Offer and listing details
Provided below is certain information on trading on Euronext Paris and the New York Stock Exchange. For additional information on listing
details and share performance, refer to point 1 (“Listing details”) of chapter 8 of the 2016 Registration Document (starting on page 178),
which is incorporated herein by reference.
–
Trading on Euronext Paris
Official trading of listed securities on Euronext Paris, including the shares, is transacted through French investment service providers that are
members of Euronext Paris and takes place continuously on each business day in Paris from 9:00 a.m. to 5:30 p.m. (Paris time), with a fixing
of the closing price at 5:35 p.m. Euronext Paris may suspend or resume trading in a security listed on Euronext Paris if the quoted price of
the security exceeds certain price limits defined by the regulations of Euronext Paris.
The markets of Euronext Paris settle and transfer ownership two trading days after a transaction (T+2). Highly liquid shares, including those of
the Company, are eligible for deferred settlement (Service de Règlement Différé — SRD). Payment and delivery for shares under the SRD
occurs on the last trading day of each month. Use of the SRD service requires payment of a commission.
In France, the shares are included in the principal index published by Euronext Paris (the “CAC 40 Index”). The CAC 40 Index is derived daily
by comparing the total market capitalization of forty stocks traded on Euronext Paris to the total market capitalization of the stocks that made
up the CAC 40 Index on December 31, 1987. Adjustments are made to allow for expansion of the sample due to new issues. The CAC 40
index indicates trends in the French stock market as a whole and is one of the most widely followed stock price indices in France. In the UK,
the shares are listed in both the FTSE Eurotop 100 and FTSEurofirst 300 index. As a result of the creation of Euronext, the shares are
included in Euronext 100, the index representing Euronext’s blue chip companies based on market capitalization. The shares are also
included in the Dow Jones Stoxx Europe 50 and Dow Jones Euro Stoxx 50, blue chip indices comprised of the fifty most highly capitalized
and most actively traded equities throughout Europe and within the European Monetary Union, respectively. Since June 2000, the shares
have been included in the Dow Jones Global Titans 50 Index which consists of fifty global companies selected based on market
capitalization, book value, assets, revenue and earnings.
12
TOTAL S.A. Form 20-F 2016
The table below sets forth, for the periods indicated, the reported high and low quoted prices in euros for the currently outstanding shares on
Euronext Paris.
Price per share (€)
2012
2013
2014
2015
First Quarter
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016
First Quarter
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
October . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
November . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 (through February 28)
January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
High
Low
42.970
45.670
54.710
50.300
48.600
50.300
46.500
47.400
48.885
43.430
45.225
44.955
44.955
48.885
44.840
45.405
48.885
49.500
49.500
48.985
33.420
35.175
38.250
36.920
39.345
43.285
36.920
40.255
35.210
35.210
38.065
40.530
40.530
41.825
42.160
41.825
44.110
46.140
46.385
46.140
–
Trading on the New York Stock Exchange
ADSs evidenced by ADRs have been listed on the NYSE since October 25, 1991. JPMORGAN CHASE BANK, N.A. serves as depositary
with respect to the ADSs evidenced by ADRs traded on the NYSE. One ADS corresponds to one TOTAL share. The table below sets forth,
for the periods indicated, the reported high and low prices quoted in dollars for the currently outstanding ADSs evidenced by ADRs on the
NYSE.
Price per ADR ($)
2012
2013
2014
2015
First Quarter
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2016
First Quarter
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
September . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
October . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
November . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2017 (through February 28)
January . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
February . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1. Share capital
ITEM 10. ADDITIONAL INFORMATION
High
Low
57.06
62.45
74.220
54.790
55.860
54.790
50.870
52.340
51.360
48.000
51.300
50.210
50.210
51.360
49.105
48.040
51.360
52.040
52.040
51.980
41.75
45.93
48.433
40.930
46.610
48.530
40.930
44.190
39.050
39.050
43.550
45.355
45.355
45.050
47.410
45.050
47.380
49.330
49.567
49.330
The information set forth in point 1 (“Share capital”) of chapter 9 (starting on page 196) and point 3 (“Share buybacks”) of chapter 8 (starting
on page 183) of the 2016 Registration Document is incorporated herein by reference.
2. Memorandum and articles of association
The information set forth in point 2 (“Articles of incorporation and bylaws; other information”) of chapter 9 of the 2016 Registration Document
(starting on page 198) is incorporated herein by reference.
3. Material contracts
There have been no material contracts (not entered into in the ordinary course of business) entered into by members of the Group since
March 15, 2015.
4. Exchange controls
Under current French exchange control regulations, no limits exist on the amount of payments that TOTAL may remit to residents of the
United States. Laws and regulations concerning foreign exchange controls do require, however, that an accredited intermediary must handle
all payments or transfer of funds made by a French resident to a non-resident.
2016 Form 20-F TOTAL S.A.
13
5. Taxation
–
General
This section generally summarizes the material U.S. federal income tax and French tax consequences of owning and disposing of shares or
ADSs of TOTAL to U.S. Holders that hold their shares or ADSs as capital assets for tax purposes. A U.S. Holder is a beneficial owner of
shares or ADSs that is (i) a citizen or resident of the United States for U.S. federal income tax purposes, (ii) a domestic corporation or other
domestic entity treated as a corporation for U.S. federal income tax purposes, (iii) an estate whose income is subject to U.S. federal income
tax regardless of its source, or (iv) a trust if a U.S. court can exercise primary supervision over the trust’s administration and one or more
U.S. persons are authorized to control all substantial decisions of the trust.
This section does not address the Medicare tax on net investment income and does not apply to members of special classes of holders
subject to special rules, including:
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
dealers in securities;
traders in securities that elect to use a mark-to-market method of accounting for their securities holdings;
tax-exempt organizations;
life insurance companies;
U.S. pension funds;
U.S. Regulated Investment Companies (RICs), Real Estate Investment Trusts (REITs), and Real Estate Mortgage Investment
Conduits (REMICs);
persons who are liable for the alternative minimum tax;
persons that actually or constructively own 10% or more of the share capital or voting rights in TOTAL;
persons that purchase or sell shares or ADSs as part of a wash sale for U.S. federal income tax purposes;
persons that hold the shares or ADSs as part of a straddle or a hedging or conversion transaction; or
persons whose functional currency is not the U.S. dollar.
If a partnership or other entity treated as a partnership for U.S. federal income tax purposes holds shares or ADSs, the tax treatment of a
partner will generally depend upon the status of the partner and upon the activities of the partnership. Partners of a partnership holding these
shares or ADSs should consult their tax advisors as to the tax consequences of owning or disposing of shares or ADSs, as applicable.
Under French law, specific rules apply to trusts, in particular specific tax and filing requirements as well as modifications to wealth, estate and
gift taxes as they apply to trusts. Given the complex nature of these rules and the fact that their application varies depending on the status of
the trust, the grantor, the beneficiary and the assets held in the trust, the following summary does not address the tax treatment of ADSs or
shares held in a trust. If ADSs or shares are held in trust, the grantor, trustee and beneficiary are urged to consult their own tax advisor
regarding the specific tax consequences of acquiring, owning and disposing of ADSs or shares.
In addition, the discussion below is limited to U.S. Holders that (i) are residents of the United States for purposes of the Treaty (as defined
below), (ii) do not maintain a permanent establishment or fixed base in France to which the shares or ADSs are attributable and through
which the respective U.S. Holders carry on, or have carried on, a business (or, if the holder is an individual, performs or has performed
independent personal services), and (iii) are otherwise eligible for the benefits of the Treaty in respect of income and gain from the shares or
ADSs (in particular, under the “Limitation on Benefits” provision of the Treaty). In addition, this section is based in part upon the
representations of the Depositary and the assumption that each obligation in the Deposit Agreement and any related agreement will be
performed in accordance with its terms.
This section is based on the Internal Revenue Code of 1986, as amended (“IRC”), its legislative history, existing and proposed regulations,
published rulings and court decisions, and with respect to the description of the material French tax consequences, the laws of the Republic
of France and French tax regulations, all as currently in effect, as well as on the Convention Between the United States and the Republic of
France for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital dated
August 31, 1994, as amended (the “Treaty”). These laws, regulations and the Treaty are subject to change, possibly on a retroactive basis.
This discussion is intended only as a descriptive summary and does not purport to be a complete analysis or listing of all potential tax effects
of the ownership or disposition of the shares and ADSs and is not intended to substitute competent professional advice. Individual situations
of holders of shares and ADSs may vary from the description made below. The following summary does not address the French tax
treatment applicable to dividends paid in so-called “Non Cooperative Countries and Territories” (“NCCT”) within the meaning of
Section 238-0 A of the French Tax Code. It does not apply to dividends paid to persons established or domiciled in such a NCCT, or paid to
a bank account opened in a financial institution located in such a NCCT.
Holders are urged to consult their own tax advisors regarding the U.S. federal, state and local, and French and other tax
consequences of owning and disposing shares or ADSs of TOTAL in their respective circumstances. In particular, a holder is
encouraged to confirm with its advisor whether the holder is a U.S. Holder eligible for the benefits of the Treaty.
–
Taxation of dividends
French taxation
The term “dividends” used in the following discussion means dividends within the meaning of the Treaty.
Dividends paid to non-residents of France are in principle subject to a French withholding tax at a rate of 30%, regardless of whether they are
paid in cash, in shares or a mix of both.
However, under the Treaty, a U.S. Holder is generally entitled to a reduced rate of French withholding tax of 15% with respect to dividends,
provided that certain requirements are satisfied.
Administrative guidelines (Bulletin Officiel des Finances Publiques, BOI-INT-DG-20-20-20-20-20120912) (the “Administrative Guidelines”) set
forth the conditions under which the reduced French withholding tax at the rate of 15% may be available. The immediate application of the
reduced 15% rate is available to those U.S. Holders that may benefit from the so-called “simplified procedure” (within the meaning of the
Administrative Guidelines).
Under the “simplified procedure”, U.S. Holders may claim the immediate application of withholding tax at the rate of 15% on the dividends to
be received by them, provided that:
(i)
they furnish to the U.S. financial institution managing their securities account a certificate of residence conforming with form No.
5000-FR. The immediate application of the 15% withholding tax will be available only if the certificate of residence is sent to the
U.S. financial institution managing their securities account no later than the dividend payment date. Furthermore, each financial
institution managing the U.S. Holders’ securities account must also send to the French paying agent the figure of the total amount
of dividends to be received which are eligible to the reduced withholding tax rate before the dividend payment date; and
14
TOTAL S.A. Form 20-F 2016
(ii)
the U.S. financial institution managing the U.S. Holder’s securities account provides to the French paying agent a list of the eligible
U.S. Holders and other pieces of information set forth in the Administrative Guidelines. Furthermore, the financial institution
managing the U.S. Holders’ securities account should certify that the U.S. Holder is, to the best of its knowledge, a United States
resident within the meaning of the Treaty. These documents must be sent to the French paying agent within a time frame that will
allow the French paying agent to file them no later than the end of the third month computed as from the end of the month of the
dividend payment date.
Where the U.S. Holder’s identity and tax residence are known by the French paying agent, the latter may release such U.S. Holder from
furnishing to (i) the financial institution managing its securities account, or (ii) as the case may be, the U.S. Internal Revenue Service (“IRS”),
the abovementioned certificate of residence, and apply the 15% withholding tax rate to dividends it pays to such U.S. Holder.
For a U.S. Holder that is not entitled to the “simplified procedure” and whose identity and tax residence are not known by the paying agent at
the time of the payment, the 30% French withholding tax will be levied at the time the dividends are paid. Such U.S. Holder, however, may 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 U.S. Holder furnishes to the French paying agent an application for refund on forms No. 5000-FR and 5001-FR
(or any other relevant form to be issued by the French tax authorities) certified by the U.S. financial institution managing the U.S. Holder’s
securities account (or, if not, by the competent U.S. tax authorities) before December 31 of the second year following the date of payment of
the withholding tax at the 30% rate to the French tax authorities, according to the requirements provided by the Administrative Guidelines.
Copies of forms No. 5000-FR and 5001-FR (or any other relevant form to be issued by the French tax authorities) as well as the form of the
certificate of residence and the U.S. financial institution certification, together with instructions, are available from the IRS and the French tax
authorities.
These forms, together with instructions, are to be provided by the Depositary to all U.S. Holders of ADRs registered with the Depositary. The
Depositary is to use reasonable efforts to follow the procedures established by the French tax authorities for U.S. Holders to benefit from the
immediate application of the 15% French withholding tax rate or, as the case may be, to recover the excess 15% French withholding tax
initially withheld and deducted in respect of dividends distributed to them by TOTAL. To effect such benefit or recovery, the Depositary shall
advise such U.S. Holder to return the relevant forms to it, properly completed and executed. Upon receipt of the relevant forms properly
completed and executed by such U.S. Holder, the Depositary shall cause them to be filed with the appropriate French tax authorities, and
upon receipt of any resulting remittance, the Depositary shall distribute to the U.S. Holder entitled thereto, as soon as practicable, the
proceeds thereof in U.S. dollars.
The identity and address of the French paying agent are available from TOTAL.
In addition, subject to certain specific filing obligations, there is no withholding tax on dividend payments made by French companies to:
(i)
(ii)
non-French collective investment funds formed under foreign law and established in a Member State of the European Union or in
another State or territory, such as the United States, that has entered with France into an administrative assistance agreement for
the purpose of combating fraud and tax evasion, and which fulfill the two following conditions: (a) the fund raises capital among a
number of investors for the purpose of investing in accordance with a defined investment policy, in the interest of its investors, and
(b) the fund has characteristics similar to those of collective investment funds organized under French law (i.e., among others,
open-end mutual fund (OPCVM), open-end real estate fund (OPCI) and closed-end investment companies (SICAF)); and
companies whose effective place of management is, or which have a permanent establishment receiving the dividends, in a
Member State of the European Union or in another State or territory that has entered with France into an administrative assistance
agreement for the purpose of combating fraud and tax evasion, such as the United States, that are in a loss-making position and
subject, at the time of the distribution, to insolvency proceedings similar to the one set out in article L.640-1 of the French
Commercial Code and that meet the other conditions set out in article 119 quinquies of the French Tax Code as specified by the
administrative guidelines n° BOI-RPPM-RCM-30-30-20-80-20160406.
Collective investment funds and companies mentioned in (ii) above are urged to consult their own tax advisors to confirm whether they are
eligible to such provisions and under which conditions.
U.S. taxation
For U.S. federal income tax purposes and subject to the passive foreign investment company rules discussed below, the gross amount of
any dividend that a U.S. Holder must include in gross income equals the amount paid by TOTAL (i.e., the net distribution received plus any
tax withheld therefrom) to the extent of the current and accumulated earnings and profits of TOTAL (as determined for U.S. federal income
tax purposes). Dividends paid to a non-corporate U.S. Holder that constitute qualified dividend income will be taxable to the holder at the
preferential rates applicable to long-term capital gains provided that the shares or ADSs are held for more than sixty days during the 121-day
period beginning sixty days before the ex-dividend date and the holder meets other holding period requirements. TOTAL believes that
dividends paid by TOTAL with respect to its shares or ADSs will be qualified dividend income. The dividend will not be eligible for the
dividends-received deduction allowed to a U.S. corporation under IRC Section 243. The dividend is taxable to the U.S. Holder when the
holder, in the case of shares, or the Depositary, in the case of ADSs, receives the dividend, actually or constructively. Because TOTAL does
not currently maintain calculations of earnings and profits for U.S. federal income tax purposes, a U.S. Holder of shares or ADSs of TOTAL
should expect to treat distributions with respect to the shares or ADSs as dividends
The amount of any dividend distribution includible in the income of a U.S. Holder equals the U.S. dollar value of the euro payment made,
determined at the spot euro/dollar exchange rate on the date the dividend distribution is includible in the U.S. Holder’s income, regardless of
whether the payment is in fact converted into U.S. dollars. Any gain or loss resulting from currency exchange fluctuations during the period
from the date the dividend payment is includible in the U.S. Holder’s income to the date the payment is converted into U.S. dollars will
generally be treated as ordinary income or loss and, for foreign tax credit limitation purposes, from sources within the United States and will
not be eligible for the special tax rate applicable to qualified dividend income. The U.S. federal income tax rules governing the
availability and computation of foreign tax credits are complex. U.S. Holders should consult their own tax advisors concerning
the implications of these rules in light of their particular circumstances.
Subject to certain conditions and limitations, French taxes withheld in accordance with the Treaty and paid over to the French tax authorities
will generally be eligible for credit against the U.S. Holder’s U.S. federal income tax liability. The limitation on foreign taxes eligible for credit is
calculated separately with respect to specific classes of income. In addition, special rules apply in determining the foreign tax credit limitation
with respect to dividends that are subject to the preferential tax rates. To the extent a refund of the tax withheld is available to a U.S. Holder
under French law or under the Treaty, the amount of tax withheld that is refundable will not be eligible for credit against such holder’s U.S.
federal income tax liability.
For this purpose, dividends distributed by TOTAL will constitute “passive income”, or, in the case of certain U.S. Holders, “general income”,
which are treated separately from one another for purposes of computing the foreign tax credit allowable to the U.S. Holder. Alternatively, a
U.S. Holder may claim all foreign taxes paid as an itemized deduction in lieu of claiming a foreign tax credit.
2016 Form 20-F TOTAL S.A.
15
If a U.S. Holder has the option to receive a distribution in shares (or ADSs) instead of cash, the distribution of shares (or ADSs) will be taxable
as if the holder had received an amount equal to the fair market value of the distributed shares (or ADSs), and such holder’s tax basis in the
distributed shares (or ADSs) will be equal to such amount.
–
Taxation of disposition of shares
In general, a U.S. Holder will not be subject to French tax on any capital gain from the sale or exchange of the shares or ADSs or redemption
of the underlying shares that the ADSs represent unless those shares or ADSs form part of a business property of a permanent establishment
or fixed base that the U.S. Holder has in France. Special rules may apply to individuals who are residents of more than one country.
A financial transaction tax applies, under certain conditions, to the acquisition of shares of publicly traded companies registered in France
having a market capitalization over €1 billion on December 1st of the year preceding the acquisition. A list of the companies within the scope
of the financial transaction tax for 2017 is published in the French Guidelines Bulletin Officiel des Finances Publiques, BOI-ANNX-000467-
20161220. TOTAL is included in this list. The tax also applies to the acquisition of ADRs evidencing ADSs. The financial transaction tax is due
at a rate of 0.3% on the price paid to acquire the shares as from January 1, 2017. The person or entity liable for the tax is generally the
provider of investment services defined in Article L. 321-1 of the French Monetary and Financial Code (prestataire de services
d’investissement). Investment service providers providing equivalent services outside France are subject to the tax under the same terms and
conditions. Taxable transactions are broadly construed but several exceptions may apply. In general, non-income taxes, such as this financial
transaction tax, paid by a U.S. Holder are not eligible for a foreign tax credit for U.S. federal income tax purposes. U.S. Holders should
consult their own tax advisors as to the tax consequences and creditability of such financial transaction tax.
For U.S. federal income tax purposes and subject to the passive foreign investment company rules discussed below, a U.S. Holder generally
will recognize capital gain or loss upon the sale or other disposition of shares or ADSs equal to the difference between the U.S. dollar value of
the amount realized on the sale or disposition and the holder’s tax basis, determined in U.S. dollars, in the shares or ADSs. The gain or loss
generally will be U.S. source gain or loss and will be long-term capital gain or loss if the U.S. Holder’s holding period of the shares or ADSs is
more than one year at the time of the disposition. Long-term capital gain of a non-corporate U.S. Holder is generally taxed at preferential
rates if specified minimum holding periods are met. The deductibility of capital losses is subject to limitation.
–
Passive foreign investment status
TOTAL believes that the shares or ADSs are not treated as stock of a passive foreign investment company (“PFIC”) for U.S. federal income
tax purposes, and TOTAL does not expect that it will be treated as a PFIC in the current or future taxable years. This conclusion is a factual
determination that is made annually and thus is subject to change. If TOTAL is treated as a PFIC, gain realized on the sale or other disposition
of the shares or ADSs would in general not be treated as capital gain. Instead, unless a U.S. Holder elects to be taxed annually on a
mark-to-market basis with respect to the shares or ADSs, a U.S. Holder would be treated as if he or she had realized such gain and certain
“excess distributions” ratably over the holding period for the shares or ADSs and would be taxed at the highest tax rate in effect for each
such year to which the gain was allocated, in addition to an interest charge in respect of the tax attributable to each such year. With certain
exceptions, a U.S. Holder’s shares or ADSs will be treated as stock in a PFIC if TOTAL were a PFIC at any time during such holder’s holding
period in the shares or ADSs. Dividends paid will not be eligible for the preferential tax rates applicable to qualified dividend income if TOTAL
is treated as a PFIC with respect to a U.S. Holder either in the taxable year of the distribution or the preceding taxable year, but instead will
be taxable at rates applicable to ordinary income.
–
French estate and gift taxes
In general, a transfer of shares or ADSs by gift or by reason of the death of a U.S. Holder that would otherwise be subject to French gift or
inheritance tax, respectively, will not be subject to such French tax by reason of the Convention between the United States of America and
the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Estates,
Inheritances and Gifts, dated November 24, 1978, as amended, unless the donor or the transferor is domiciled in France at the time of
making the gift, or at the time of his death, or if the shares or ADSs were used in, or held for use in, the conduct of a business through a
permanent establishment or a fixed base in France.
–
French wealth tax
The French wealth tax does not apply to a U.S. Holder (i) that is not an individual, or (ii) in the case of individuals who are eligible for the
benefits of the Treaty and who own, alone or with related persons, directly or indirectly, TOTAL shares which give right to less than 25% of
TOTAL’s earnings.
–
U.S. state and local taxes
In addition to U.S. federal income tax, U.S. Holders of shares or ADSs may be subject to U.S. state and local taxes with respect to their
shares or ADSs. U.S. Holders should consult their own tax advisors.
6. Dividends and paying agents
The information set forth in point 2.2 (“Dividend payment”) of chapter 8 of the 2016 Registration Document (on page 182) is incorporated
herein by reference.
7. Statements by experts
The independent third-party report of DeGolyer and MacNaughton, a petroleum engineering consulting firm with address at 5001 Spring
Valley Road, Suite 800 East, Dallas, Texas 75244, is attached as Exhibit 15.3 to this Form 20-F. This report provided TOTAL estimates of
proved crude oil, condensate and natural gas reserves, as of December 31, 2016, of certain properties owned by PAO NOVATEK. As
evidenced by Exhibit 15.4 to this Form 20-F, DeGolyer and MacNaughton has consented to the inclusion of their report in this Form 20-F.
8. Documents on display
TOTAL files annual, periodic, and other reports and information with the Securities and Exchange Commission. You may inspect any reports,
statements or other information TOTAL files with the United States Securities and Exchange Commission (“SEC”) at the SEC’s public
reference rooms by calling the SEC for more information at 1-800-SEC-0330. All of TOTAL’s SEC filings made after December 31, 2001, are
available to the public at the SEC website at http://www.sec.gov and from certain commercial document retrieval services. You may also
inspect any document the Company files with the SEC at the offices of The New York Stock Exchange, 20 Broad Street, New York, New
York 10005.
16
TOTAL S.A. Form 20-F 2016
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Please refer to Notes 15.3 (starting on page 279) and 16.2 (starting on page 288) to the Consolidated Financial Statements in the 2016
Registration Document, which are incorporated herein by reference, for a qualitative and quantitative discussion of the Group’s exposure to
market risks. Please also refer to Notes 15.2 (starting on page 274) and 16 (starting on page 285) to the Consolidated Financial Statements in
the 2016 Registration Document, which are incorporated herein by reference, for details of the different derivatives owned by the Group in
these markets.
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 mainly interest rate and currency swaps. The Group may also occasionally use
futures contracts and options. These operations and their accounting treatment are detailed in Notes 15.2 (starting on page 274) and 16
(starting on page 285) to the Consolidated Financial Statements in the 2016 Registration Document, which are incorporated herein by
reference.
The financial performance of TOTAL is sensitive to a number of factors; the most significant being oil and gas prices, generally expressed in
dollars, 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. The
impact of changes in crude oil prices on the activities of the Refining & Chemicals and Marketing & Services segments depends upon the
speed at which the prices of finished products adjust to reflect these changes. All of the Group’s activities are, to various degrees, sensitive
to fluctuations in the dollar/euro exchange rate.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
American Depositary Receipts fees and charges
JPMORGAN CHASE BANK, N.A., as depositary for the TOTAL S.A. ADR program, collects its fees for delivery and surrender of ADRs
directly from investors depositing shares or surrendering ADRs for the purpose of withdrawal or from intermediaries acting for them. The
depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of
distributable property to pay the fees. The depositary may generally refuse to provide fee-attracting services until its fees for those services
are paid. A copy of the depositary agreement is attached as Exhibit (a) to the registration statement on Form F-6 (Reg. No. 333-199737) filed
by the Company with the SEC on October 31, 2014.
Investors must pay:
For:
$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)
A fee equivalent to the fee that would be payable if securities
distributed to the investor had been shares and the shares had been
deposited for issuance of ADSs
Registration or transfer fees
Expenses of the depositary
Taxes and other governmental charges the depositary or the
custodian have to pay on any ADS or share underlying an ADS, for
example, stock transfer taxes, stamp duty or withholding taxes
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
(cid:129)
Issuance of ADRs, including issuances resulting from a
distribution of shares or rights or other property, stocks splits
or mergers
Cancellation of ADRs for the purpose of withdrawal, including
if the deposit agreement terminates
Distribution of securities distributed to holders of deposited
securities that are distributed by the depositary to ADS
registered holders
Transfer and registration of shares on the Company’s share
register to or from the name of the depositary or its agent
when the investor deposits or withdraws shares
Cable, telex and facsimile transmissions (when expressly
provided in the deposit agreement)
Converting foreign currency to U.S. dollars
As necessary
Any charges incurred by the depositary or its agents for servicing the
deposited securities
(cid:129)
As necessary
The depositary has agreed to provide the Company with payments concerning, among other things, expenses incurred by the Company for
the establishment and maintenance of the ADR program that include, but are not limited to, exchange listing fees, annual meeting expenses,
standard out-of-pocket maintenance costs for the ADRs (e.g., the expenses of postage and envelopes for mailing annual and interim financial
reports, printing and distributing dividend checks, electronic filing of U.S. Federal tax information, mailing required tax forms, stationery,
postage, facsimile, and telephone calls), shareholder identification, investor relations activities or programs in North America, accounting fees
(such as external audit fees incurred in connection with the Sarbanes-Oxley Act, the preparation of the Company’s Form 20-F and paid to the
FASB and the PCAOB), legal fees and other expenses incurred in connection with the preparation of regulatory filings and other
documentation related to ongoing SEC, NYSE and U.S. securities law compliance. In certain instances, the depositary has agreed to make
additional payments to the Company based on certain applicable performance indicators related to the ADR facility.
During the calendar year preceding March 1, 2017, the Company received net payments of approximately $6.6 million from the depositary.
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
None.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF
SECURITY HOLDERS AND USE OF PROCEEDS
1. Disclosure controls and procedures
ITEM 15. CONTROLS AND PROCEDURES
An evaluation was carried out under the supervision and with the participation of the Group’s management, including the Chief Executive
Officer and the Chief Financial Officer, of the effectiveness, as of the end of the period covered by this report, of the design and operation of
2016 Form 20-F TOTAL S.A.
17
the Group’s disclosure controls and procedures, which are defined as those controls and procedures designed to ensure that information
required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended, is recorded, summarized and reported
within specified time periods. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures,
including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective
disclosure controls and procedures can provide only reasonable assurance of achieving their control objectives. Based on this evaluation, the
Chief Executive Officer and the Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures
were effective to provide reasonable assurance that information required to be disclosed in the reports that the Company files under the
Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the applicable rules and forms, and that
it is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate to
allow timely decisions regarding required disclosure.
2. Management’s annual report on internal control over financial reporting
The Group’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Because of its
inherent limitations, internal control over financial reporting may not prevent or detect misstatements and even when determined to be
effective, can only provide reasonable assurance with respect to financial statement preparation and presentation. Also, the effectiveness of
an internal control system may change over time.
The Group’s management, including the Chief Executive Officer and the Chief Financial Officer, conducted an evaluation of the effectiveness
of internal control over financial reporting using the criteria set forth in Internal Control — Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Based on the results of this evaluation, the Group’s
management concluded that its internal control over financial reporting was effective as of December 31, 2016.
The effectiveness of internal control over financial reporting as of December 31, 2016, was audited by ERNST & YOUNG Audit and KPMG
Audit, a division of KPMG S.A., independent registered public accounting firms, as stated in their report included in Item 18 of this Annual
Report.
3. Changes in internal control over financial reporting
There were no changes in the Group’s internal control over financial reporting that occurred during the period covered by this report that have
materially affected, or that were reasonably likely to materially affect, the Group’s internal control over financial reporting.
4.
Internal control and risk management procedures (Article L. 225-37 of the French
Commercial Code)
For additional information, refer to point 4 (“Internal control and risk management procedures”) of chapter 4 of the 2016 Registration
Document (starting on page 76), which is incorporated herein by reference.
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
Ms. Marie-Christine Coisne-Roquette is the Audit Committee financial expert. She is an independent member of the Board of Directors in
accordance with the NYSE listing standards applicable to TOTAL.
ITEM 16B. CODE OF ETHICS
At its meeting on October 27, 2016, the Board of Directors adopted a revised code of ethics that applies to its Chief Executive Officer, Chief
Financial Officer, Chief Accounting Officer and the financial and accounting officers for its principal activities. A copy of this code of ethics is
included as an exhibit to this Annual Report.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
1. Fees for accountants’ services
During the fiscal years ended December 31, 2016 and 2015, fees for services provided by ERNST & YOUNG Audit and KPMG Audit were as
follows:
(M$)
Audit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Audit-Related Fees(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Legal, Tax, Labor Law Fees(b)
All Other Fees(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ERNST & YOUNG
Audit
fiscal year
KPMG Audit
fiscal year
2016
20.2
5.0
6.1
0.5
31.8
2015
22.0
1.1
3.3
0.5
26.9
2016
16.5
4.5
2.4
0.1
23.5
2015
16.0
4.8
3.0
0.3
24.1
(a)
(b)
(c)
Audit-related fees are generally fees billed for services that are closely related to the performance of the audit or review of financial statements. These include due
diligence services related to business combinations, attestation services not required by statute or regulation, agreed upon or expanded auditing procedures related to
accounting or billing records required to respond to or comply with financial, accounting or regulatory reporting matters, consultations concerning financial accounting
and reporting standards, information system reviews, internal control reviews and assistance with internal control reporting requirements.
Tax fees are fees for services related to international and domestic tax compliance, including the preparation of tax returns and claims for refund, tax planning and tax
advice, including assistance with tax audits and tax appeals, and tax services regarding statutory, regulatory or administrative developments and expatriate tax
assistance and compliance.
All other fees are principally for risk management advisory services.
2. Audit Committee Pre-Approval Policy
The Audit Committee has adopted an Audit and Non-Audit Services Pre-Approval Policy that sets forth the procedures and the conditions
pursuant to which services proposed to be performed by the statutory auditors may be pre-approved and that are not prohibited by
regulatory or other professional requirements. This policy provides for both pre-approval of certain types of services through the use of an
annual budget approved by the Audit Committee for these types of services and special pre-approval of services by the Audit Committee on
a case-by-case basis. The Audit Committee reviews on an annual basis the services provided by the statutory auditors. During 2016, no
audit-related fees, tax fees or other non-audit fees were approved by the Audit Committee pursuant to the de minimis exception to the
pre-approval requirement provided by paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
18
TOTAL S.A. Form 20-F 2016
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
current statutory auditors and the alternate auditors will expire at the end of the Annual Shareholders’ Meeting called in 2022 to approve the
financial statements for fiscal year 2021.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
None.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED
PURCHASERS
Period
January 2016 . . . . . . . . . . . . . . . . . . .
February 2016 . . . . . . . . . . . . . . . . . . .
March 2016 . . . . . . . . . . . . . . . . . . . .
April 2016 . . . . . . . . . . . . . . . . . . . . .
May 2016 . . . . . . . . . . . . . . . . . . . . .
June 2016 . . . . . . . . . . . . . . . . . . . . .
July 2016 . . . . . . . . . . . . . . . . . . . . .
August 2016 . . . . . . . . . . . . . . . . . . . .
September 2016 . . . . . . . . . . . . . . . . .
October 2016 . . . . . . . . . . . . . . . . . . .
November 2016 . . . . . . . . . . . . . . . . . .
December 2016 . . . . . . . . . . . . . . . . . .
January 2017 . . . . . . . . . . . . . . . . . . .
February 2017 . . . . . . . . . . . . . . . . . . .
Total Number Of
Shares (Or
Units)
Purchased
Average Price
Paid Per
Share (Or
Units) (€)
Total Number Of
Shares (Or Units)
Purchased,
As Part Of Publicly
Announced Plans Or
Programs(a)
Maximum Number
Of Shares (Or Units)
That May
Yet Be Purchased
Under The Plans Or
Programs(b)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
100,331,268(c)
47.495(d)
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
100,331,268
—
—
131,432,881
131,433,756
131,436,470
133,915,736
133,917,941
136,360,049
139,415,875
139,422,212
139,482,313
142,037,884
142,059,395
232,448,764
234,779,415
234,792,947
(a)
The Annual Shareholders’ Meeting of May 24, 2016, canceled and replaced the previous resolution from the Annual Shareholders’ Meeting of May 29,
2015, authorizing the Board of Directors to trade in the Company’s own shares on the market for a period of eighteen months within the framework of the
stock purchase program. The maximum number of shares that may be purchased by virtue of this authorization or under the previous authorization may not
exceed 10% of the total number of shares constituting the share capital, this amount being periodically adjusted to take into account operations modifying
the share capital after each shareholders’ meeting. Under no circumstances may the total number of shares the Company holds, either directly or indirectly
through its subsidiaries, exceed 10% of the share capital. This authorization will be renewed subject to the approval of the Annual Shareholders’ Meeting of
May 26, 2017 through the 5th resolution.
(b) Based on 10% of the Company’s share capital, and after deducting the shares held by the Company for cancellation and the shares held by the Company
to cover the share purchase option plans for Company employees and restricted share grants for Company employees, as well as after deducting the
shares held by the subsidiaries.
(c) Under the authorization granted by the Annual Shareholders’ Meeting of May 24, 2016, 100,331,268 TOTAL treasury shares owned by Group affiliates
were bought back by TOTAL S.A. in order to be immediately canceled. For additional information, refer to point 3 (“Share buybacks”) of chapter 8 of the
2016 Registration Document (starting on page 183), which is incorporated herein by reference.
(d) Price equal to the closing price of TOTAL ordinary share on Euronext Paris on the day of the buyback, which was completed off-market on December 15,
2016, i.e, €47.495 per share.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not applicable.
This section presents a summary of significant differences between French corporate governance practices and the NYSE’s corporate
governance standards, as required by section 303A.11 of the NYSE Listed Company Manual.
ITEM 16G. CORPORATE GOVERNANCE
–
Overview
The following paragraphs provide a brief, general summary of significant ways in which our corporate governance practices differ from those
required by the listing standards of the New York Stock Exchange (“NYSE”) for U.S. companies that have common stock listed on the NYSE.
While our management believes that our corporate governance practices are similar in many respects to those of U.S. domestic NYSE listed
companies and provide investors with protections that are comparable in many respects to those established by the NYSE Listed Company
Manual, certain significant differences are described below.
The principal sources of corporate governance standards in France are the French Commercial Code (Code de commerce), the French
Financial and Monetary Code (Code monétaire et financier) and the regulations and recommendations provided by the French Financial
Markets Authority (Autorité des marchés financiers, AMF), as well as a number of general recommendations and guidelines on corporate
governance, most notably the Corporate Governance Code of Listed Corporations (the “AFEP-MEDEF Code”) published by the two main
French business confederations, the Association Française des Entreprises Privées (AFEP) and the Mouvement des Entreprises de France
(MEDEF) , the latest version of which was published in November 2016.
The AFEP-MEDEF Code includes, among other things, recommendations relating to the role and operation of the board of directors
(creation, composition and evaluation of the board of directors and the audit, compensation and nominating committees) and the
independence criteria for board members. Articles L. 820-1 et seq. of the French Commercial Code prohibits statutory auditors from
providing certain non-audit services and defines certain criteria for the independence of statutory auditors. In France, the independence of
statutory auditors is also monitored by an independent body, the High Council for Statutory Auditors (Haut Conseil du Commissariat aux
Comptes).
For an overview of certain of our corporate governance policies, see points 1.1 to 1.3 of chapter 5 of the 2016 Registration Document
(starting on page 87), which are incorporated herein by reference.
2016 Form 20-F TOTAL S.A.
19
–
Composition of Board of Directors; Independence
The NYSE listing standards provide that the board of directors of a U.S.-listed company must include a majority of independent directors and
that the audit committee, the nominating/corporate governance committee and the compensation committee must be composed entirely of
independent directors. A director qualifies as independent only if the board affirmatively determines that the director has no material
relationship with the company, either directly or as a partner, shareholder or officer of an organization that has a relationship with the
company. Furthermore, as discussed below, the listing standards require additional procedures in regards to the independence of directors
who sit on the compensation committee. In addition, the listing standards enumerate a number of relationships that preclude independence.
French law does not contain any independence requirement for the members of the board of directors of a French company, except for the
audit committee, as described below. The AFEP-MEDEF Code recommends, however, that (i) at least half of the members of the board of
directors be independent in companies that have a dispersed ownership structure and no controlling shareholder, and (ii) at least a third of
the members of the board of directors be independent in companies that have a controlling shareholder. Members of the board representing
employees and employee shareholders are not taken into account in calculating these percentages. The AFEP-MEDEF Code states that a
director is independent when “he or she has no relationship of any kind whatsoever with the corporation, its group or the management that
may interfere with his or her freedom of judgment.” The AFEP-MEDEF Code also enumerates specific criteria for determining independence,
which are on the whole consistent with the goals of the NYSE listing standards, as recently amended, although the specific tests under the
two standards may vary on some points.
For an overview of the Company’s Board of Directors’ assessment of the independence of the Company’s Directors, including a description
of the Board’s independence criteria, refer to point 1.1.3 of chapter 5 of the 2016 Registration Document (on page 96), which is incorporated
herein by reference.
–
Representation of women on corporate boards
The French Commercial Code provides for legally binding quotas to balance gender representation on boards of directors of French listed
companies, requiring that each gender represent at least 40% following the first ordinary shareholders’ meeting held after January 1, 2017.
Members of the board representing the employees are not taken into account in calculating these percentages. Effective January 1, 2017,
when the board of directors consists of a maximum of eight members, the difference between the number of directors of each gender should
not be higher than two. Any appointment of a director made in violation of these rules will be declared null and void and payment of the
directors’ compensation will be suspended until the board composition is compliant with the required quota (the suspension of the directors’
compensation will also be disclosed in the management report). However, if a director whose appointment is null and void takes part in
decisions of the board of directors, such decisions are not declared automatically null and void by virtue thereof. As of February 8, 2017, the
Company’s Board had six male and six female members. Therefore, excluding the director representing employees in accordance with
French law(1), the proportion of women on the Board was 54.5%.
–
Board committees
Overview
The NYSE listing standards require that a U.S.-listed company have an audit committee, a nominating/corporate governance committee and
a compensation committee. Each of these committees must consist solely of independent directors and must have a written charter that
addresses certain matters specified in the listing standards. Furthermore, the listing standards require that, in addition to the independence
criteria referenced above under “Composition of Board of Directors; Independence”, certain enumerated factors be taken into consideration
when making a determination on the independence of directors on the compensation committee or when engaging advisors to the
compensation committee.
With the exception of an audit committee, as described below, French law currently requires neither the establishment of board committees
nor the adoption of written charters.
The AFEP-MEDEF Code recommends, however, that the board of directors sets up, in addition to the audit committee required by law, a
nominations committee and a compensation committee, indicating that the nominations and compensation committees may or may not be
separate. The AFEP-MEDEF Code also recommends that at least two-thirds of the audit committee members and a majority of the members
of each of the compensation committee and the nominations committee be independent directors, provided that the chairman of the
compensation committee should be independent, and that none of those three committees should include any executive director.
TOTAL has established an Audit Committee, a Governance and Ethics Committee, a Compensation Committee and a Strategic Committee.
As of February 8, 2017, the composition of these committees was as follows:
(cid:129)
(cid:129)
(cid:129)
(cid:129)
the Audit Committee had three members, all members of this committee have been deemed independent by the Board of Directors;
the Governance and Ethics Committee had three members, all members of this committee have been deemed independent by the
Board of Directors;
the Compensation Committee had three members, all of whom have been deemed independent by the Board of Directors; and
the Strategic Committee had five members. With the exception of Mr. Pouyanné, who chairs the committee and the director
representing the employees (Mr. Blanc), all members of this committee have been deemed independent by the Board of Directors.
For a description of the scope of each committee’s activity and the independence assessment of each member, see points 1.2.4—1.2.7 of
chapter 5 of the 2016 Registration Document (starting on page 105), which are incorporated herein by reference.
The NYSE listing standards also require that the audit, nominating/corporate governance and compensation committees of a U.S.-listed
company be vested with decision-making powers on certain matters. Under French law, however, those committees are advisory in nature
and have no decision-making authority. Board committees are responsible for examining matters within the scope of their charter and making
recommendations thereon to the board of directors. Under French law, the board of directors has the final decision-making authority.
Audit committee
The NYSE listing standards contain detailed requirements for the audit committees of U.S.-listed companies. Some, but not all, of these
requirements also apply to non-U.S.-listed companies, such as TOTAL. French law and the AFEP-MEDEF Code share the NYSE listing
standards’ goal of establishing a system for overseeing the company’s accounting process that is independent from management and that
ensures auditor independence. As a result, they address similar topics, with some overlap.
Article L. 823-19 of the French Commercial Code requires the board of directors of companies listed in France to establish an audit
committee, at least one member of which must be an independent director and must be competent in finance, accounting or statutory audit
(1)
As per French law, the director representing employees shall be excluded for the computation of the gender percentage. As of February 8, 2017, the gender percentage is
54.5%, because six Board seats were held by women out of a total of eleven seats (excluding the director representing the employees of TOTAL’s Board of Directors).
20
TOTAL S.A. Form 20-F 2016
procedures. The AFEP-MEDEF Code provides that at least two-thirds of the directors on the audit committee be independent and that the
audit committee should not include any executive director. Under NYSE rules, in the absence of an applicable exemption, audit committees
are required to satisfy the independence requirements under Rule 10A-3 of the Exchange Act. TOTAL’s Audit Committee consists of three
directors, all of whom meet the independence requirements under Rule 10A-3.
The duties of the Company’s Audit Committee, in line with French law and the AFEP-MEDEF Code, are described in point 1.2.4 of chapter 5
of the 2016 Registration Document (starting on page 105), which is incorporated herein by reference. The Audit Committee regularly reports
to the Board of Directors on the fulfillment of its tasks, the results of the financial statements certification process and the contribution of such
process to guaranteeing the financial information’s integrity.
One structural difference between the legal status of the audit committee of a U.S.-listed company and that of a French-listed company
concerns the degree of the committee’s involvement in managing the relationship between the company and the auditors. French law
requires French companies that publish consolidated financial statements, such as TOTAL S.A., to have two co-auditors. While the NYSE
listing standards require that the audit committee of a U.S.-listed company have direct responsibility for the appointment, compensation,
retention and oversight of the work of the auditor, French law provides that the election of the co-auditors is the sole responsibility of the
shareholders duly convened at a shareholders’ meeting. In making their decision, the shareholders may rely on proposals submitted to them
by the board of directors based on recommendations from the audit committee. The shareholders elect the auditors for an audit period of six
financial years. The auditors may only be revoked by a court order and only on grounds of professional negligence or incapacity to perform
their mission.
–
Meetings of non-management directors
The NYSE listing standards require that the non-management directors of a U.S.-listed company meet at regularly scheduled executive
sessions without management. French law does not contain such a requirement. The AFEP-MEDEF Code recommends, however, that
non-executive directors meet at least once a year without executive officers.
Since December 16, 2015, the rules of procedure of the Board of Directors provide that, with the agreement of the Governance and Ethics
Committee, the Lead Independent Director may hold meetings of the directors who do not hold executive or salaried positions on the Board
of Directors. He or she reports to the Board of Directors on the conclusions of such meetings.
In December 2016, the Lead Independent Director held a meeting of the non-executive and non-salaried directors. She subsequently
presented a summary of this meeting to the Board of Directors.
Thus, the Board of Directors’ practice is in line with the recommendation made in the AFEP-MEDEF Code.
–
Disclosure
The NYSE listing standards require U.S.-listed companies to adopt, and post on their websites, a set of corporate governance guidelines.
The guidelines must address, among other things: director qualification standards, director responsibilities, director access to management
and independent advisers, director compensation, director orientation and continuing education, management succession and an annual
performance evaluation of the board. In addition, the chief executive officer of a U.S.-listed company must certify to the NYSE annually that
he or she is not aware of any violations by the company of the NYSE’s corporate governance listing standards.
French law requires neither the adoption of such guidelines nor the provision of such certification. The AFEP-MEDEF Code recommends,
however, that the Board of Directors of a French-listed company review its operation annually and perform a formal evaluation at least once
every three years, under the leadership of the appointments or nominations committee or an independent director, with help from an external
consultant. TOTAL’s Board of Directors’ most recent formal evaluation took place in early 2016. The AFEP-MEDEF Code also recommends
that shareholders be informed of these evaluations each year in the annual report. In addition, Article L. 225-37 of the French Commercial
Code requires the chairman of the Board of Directors to submit an annual report to the shareholders describing the composition of the board
and the balanced representation of men and women on the board, the preparation and organization of the board’s work, as well as the
internal control and risk management procedures implemented by the company. The AFEP-MEDEF Code also includes ethical rules
concerning which directors are expected to comply.
–
Code of business conduct and ethics
The NYSE listing standards require each U.S.-listed company to adopt, and post on its website, a code of business conduct and ethics for its
directors, officers and employees. There were no similar requirements applicable under French law in 2016. Article 17 of Law n° 2016/1691
(“Sapin II”) of December 9, 2016, requires the top management (such as the President or Chief Executive Officer) of large French companies
to adopt by June 1, 2017, a code of conduct proscribing the different types of behavior being likely to characterize acts of corruption, bribery
or influence peddling, which code shall be included in the rules of procedure of the company and be submitted to employee representatives.
Under the SEC’s rules and regulations, all companies required to submit periodic reports to the SEC, including TOTAL, must disclose in their
annual reports whether they have adopted a code of ethics for their principal executive officer and senior financial officers. In addition, they
must file a copy of the code with the SEC, post the text of the code on their website or undertake to provide a copy upon request to any
person without charge. There is significant, though not complete, overlap between the code of ethics required by the NYSE listing standards
and the code of ethics for senior financial officers required by the SEC’s rules. For a description of the code of ethics adopted by TOTAL,
refer to point 4 of chapter 4 of the 2016 Registration Document (starting on page 76), which is incorporated herein by reference, and
“Item 16B. Code of Ethics”.
Not applicable.
Not applicable.
ITEM 16H. MINE SAFETY DISCLOSURE
ITEM 17. FINANCIAL STATEMENTS
ITEM 18. FINANCIAL STATEMENTS
The Consolidated Financial Statements and Notes thereto included in the 2016 Registration Document (starting on page 205) are
incorporated herein by reference.
The reports of the statutory auditors, ERNST & YOUNG Audit and KPMG Audit, a division of KPMG S.A., are included in the following pages:
2016 Form 20-F TOTAL S.A.
21
KPMG Audit, a division of KPMG S.A.
Tour EQHO
2 Avenue Gambetta
CS 60055
92066 Paris la Défense Cedex
France
TOTAL S.A.
ERNST & YOUNG Audit
1/2, place des Saisons
92400 Courbevoie – Paris La Défense 1
France
Registered office: 2, place Jean Millier – La Défense 6 – 92400 Courbevoie – France
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS ON THE
CONSOLIDATED FINANCIAL STATEMENTS
Year ended December 31, 2016
The Board of Directors and Shareholders,
We have audited the accompanying consolidated balance sheets of TOTAL S.A. and subsidiaries (“the Company”) as of December 31, 2016,
2015 and 2014, and the related consolidated statements of income, comprehensive income, cash flows and changes in shareholders’ equity
for each of the years in the three-year period ended December 31, 2016. These consolidated financial statements are the responsibility of the
Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial
position of the Company as of December 31, 2016, 2015 and 2014, and the consolidated results of its operations and its consolidated cash
flows for each of the years in the three-year period ended December 31, 2016, in conformity with International Financial Reporting Standards
as adopted by the European Union and in conformity with International Financial Reporting Standards as issued by the International
Accounting Standards Board.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s
internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control – Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated March 15, 2017
expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Paris La Défense, March 15, 2017
KPMG Audit
A division of KPMG S.A.
ERNST & YOUNG Audit
/s/ MICHEL PIETTE
/s/ VALÉRIE BESSON
/s/ YVON SALAÜN
/s/ LAURENT MIANNAY
Michel Piette
Partner
Valérie Besson
Partner
Yvon Salaün
Partner
Laurent Miannay
Partner
22
TOTAL S.A. Form 20-F 2016
KPMG Audit, a division of KPMG S.A.
Tour EQHO
2 Avenue Gambetta
CS 60055
92066 Paris la Défense Cedex
France
TOTAL S.A.
ERNST & YOUNG Audit
1/2, place des Saisons
92400 Courbevoie – Paris La Défense 1
France
Registered office: 2, place Jean Millier – La Défense 6 – 92400 Courbevoie – France
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS ON THE
INTERNAL CONTROL OVER FINANCIAL REPORTING
Year ended December 31, 2016
The Board of Directors and Shareholders,
We have audited TOTAL S.A. and subsidiaries’ (“the Company”) internal control over financial reporting as of December 31, 2016,
based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). The Company’s management is responsible for maintaining effective internal
control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the
accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion
on the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control
over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of
the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that
could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31,
2016, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the
consolidated balance sheets of the Company as of December 31, 2016, 2015 and 2014, and the related consolidated statements of
income, comprehensive income, cash flows and changes in shareholders’ equity for each of the years in the three-year period ended
December 31, 2016, and our report dated March 15, 2017 expressed an unqualified opinion on those consolidated financial
statements.
Paris La Défense, March 15, 2017
KPMG Audit
A division of KPMG S.A.
ERNST & YOUNG Audit
/s/ MICHEL PIETTE
/s/ VALÉRIE BESSON
/s/ YVON SALAÜN
/s/ LAURENT MIANNAY
Michel Piette
Partner
Valérie Besson
Partner
Yvon Salaün
Partner
Laurent Miannay
Partner
2016 Form 20-F TOTAL S.A.
23
The following documents are filed as part of this annual report:
ITEM 19. EXHIBITS
1
2
7.1
7.2
8
11
12.1
12.2
13.1
13.2
15.1
15.2
15.3
15.4
Bylaws (Statuts) of TOTAL S.A. (as amended through January 12, 2017).
The total amount of long-term debt securities authorized under any instrument does not exceed 10% of the total assets of
the Company and its subsidiaries on a consolidated basis. We hereby agree to furnish to the SEC, upon its request, a
copy of any instrument defining the rights of holders of long-term debt of the Company or of its subsidiaries for which
consolidated or unconsolidated financial statements are required to be filed.
Ratio of earnings to fixed charges.
Computation of earnings to fixed charges.
List of Subsidiaries (see Note 18 to the Consolidated Financial Statements included in the 2016 Registration Document
(starting on page 290), which is incorporated herein by reference).
Code of Ethics.
Certification of Chief Executive Officer.
Certification of Chief Financial Officer.
Certification of Chief Executive Officer.
Certification of Chief Financial Officer.
Excerpt of the pages and sections of the 2016 Registration Document incorporated herein by reference.
Consent of ERNST & YOUNG Audit and of KPMG Audit, a division of KPMG S.A.
Third party report of DeGolyer and MacNaughton.
Consent of DeGolyer and MacNaughton.
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the
undersigned to sign this annual report on its behalf.
SIGNATURE
Date: March 17, 2017
TOTAL S.A.
By: /S/ PATRICK POUYANNÉ
Name: Patrick Pouyanné
Title: Chairman and Chief Executive Officer
24
TOTAL S.A. Form 20-F 2016
EXHIBIT 15.1
Exhibit 15.1 contains the excerpts of TOTAL S.A.’s 2016 Registration Document that
are incorporated by reference into this Annual Report on Form 20-F.(1)
(1) Where information has been deleted from TOTAL S.A.’s 2016 Registration Document, such
deletion is indicated in this exhibit with a notation that such information has been redacted.
Contents
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
7. Social, environmental
and societal information
2. Business overview
1. History and strategy of TOTAL . . . . . . . . . . . . . . . . . . . 6
2. Business overview for fiscal year 2016 . . . . . . . . . . . . 8
3. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4. Research & Development . . . . . . . . . . . . . . . . . . . . . . 44
5. Property, plant and equipment . . . . . . . . . . . . . . . . . . 48
6. Group organization . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7. Organization charts . . . . . . . . . . . . . . . . . . . . . . . . . . 50
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
4. Risks and control
1. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
2. Legal and arbitration proceedings . . . . . . . . . . . . . . . 73
3. Insurance and risk management . . . . . . . . . . . . . . . . 75
4. Internal control and risk management procedures
(Article L. 225-37 of the French Commercial Code) . 76
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
5. Corporate governance
1. Composition and practices of the Board of Directors . . 86
2. General Management . . . . . . . . . . . . . . . . . . . . . . . . 112
3. Shares held by the administration
and management bodies . . . . . . . . . . . . . . . . . . . . . 112
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
6. Compensation of the administration
and management bodies
1. Board members’ compensation . . . . . . . . . . . . . . . . 116
2. Chairman and Chief Executive Officer’s
compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
3. Executive officers’ compensation . . . . . . . . . . . . . . 125
4. Stock option and free share grants . . . . . . . . . . . . . 125
5. Summary table of compensation components
due or granted to the Chairman and
Chief Executive Officer for fiscal year 2016,
as submitted to the Ordinary Shareholders’
Meeting for vote . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132
6. Report on the principles and criteria
for the determination, breakdown and allocation
of the fixed, variable and extraordinary components
of the total compensation (including in-kind benefits)
attributable to the Chairman and Chief Executive
Officer (Article L. 225-37-2 of the French
Commercial Code) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
1. Social information . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
2. Safety, health and environment information . . . . . . 151
3. Societal information . . . . . . . . . . . . . . . . . . . . . . . . . 161
4. Reporting scopes and method . . . . . . . . . . . . . . . . . . 172
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
8. TOTAL and its shareholders
1. Listing details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178
2. Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181
3. Share buybacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183
4. Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
6. Investor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
9. General information
1. Share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
2. Articles of incorporation and bylaws;
other information . . . . . . . . . . . . . . . . . . . . . . . . . . . 198
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
10. Consolidated Financial Statements
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
2. Consolidated statement of income . . . . . . . . . . . . . 207
3. Consolidated statement of comprehensive income . . . 208
4. Consolidated balance sheet . . . . . . . . . . . . . . . . . . 209
5. Consolidated statement of cash flow . . . . . . . . . . . 210
6. Consolidated statement of changes
in shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . 211
7. Notes to the Consolidated Financial Statements . . . 212
11. Supplemental oil and gas information
(unaudited)
1. Oil and gas information pursuant to FASB
Accounting Standards Codification 932 . . . . . . . . . 308
2. Other information . . . . . . . . . . . . . . . . . . . . . . . . . . . 327
3. Report on the payments made to governments . . 329
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
Glossary 369
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
2.Présentation des activités
Business overview
2
Business overview
1. History and strategy of TOTAL 6
1.1.
1.2.
1.3.
History and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Group organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
2. Business overview for fiscal year 2016 8
2.1.
2.2.
2.3.
Upstream segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Refining & Chemicals segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
Marketing & Services segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
3. Investments 42
3.1.
3.2.
Major investments over the 2014-2016 period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Major planned investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
4. Research & Development 44
4.1.
4.2.
4.3.
4.4.
4.5.
Upstream . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
Refining & Chemicals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Marketing & Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
R&D Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
5. Property, plant and equipment 48
6. Group organization 49
6.1.
6.2.
6.3.
Position of the Company within the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
Company subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
Group interests in publicly-traded companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
7. Organization charts 50
TOTAL. Registration Document 2016
5
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 on March 28, 1924 is, together with its subsidiaries
and affiliates, the world’s fourth largest publicly-traded integrated oil
and gas company (1).
With operations in more than 130 countries, TOTAL is engaged in
every sector of the oil and gas industry, including upstream
(hydrocarbon exploration, development and production) and
downstream (refining, petrochemicals, specialty chemicals, trading and
shipping of crude oil and petroleum products and marketing). TOTAL is
also involved in the renewable energies and power generation sectors.
TOTAL began its Upstream operations in the Middle East in 1924.
Since then, the Company has grown and expanded its operations
worldwide. In early 1999, the Company took over PetroFina S.A.
and in early 2000 it took over Elf Aquitaine. Since the repeal in 2002
of the decree of December 13, 1993 that established a golden
share of Elf Aquitaine held by the French government, there are
no longer any agreements or regulatory provisions governing
shareholding relationships between TOTAL and the French
government. Information on TOTAL S.A.’s shareholding structure
is presented in point 4.1 of chapter 8.
1.2. Strategy
TOTAL is a leading international oil and gas company and aims to
be the responsible energy major by helping to supply accessible,
affordable and clean energy to as many people as possible. To
accomplish this goal, TOTAL leverages its integrated business
model, which enables it to capture synergies between the different
activities of the Group. To achieve its ambition, TOTAL relies upon
its operational excellence, technological expertise and capacity to
manage complex projects.
The Group’s strategy is based on four main priorities:
– driving profitable, sustainable growth in
Exploration & Production’s hydrocarbon activities, with priority
given to reducing production costs, disciplined investments and
cash flow generation;
– continuing to enhance the competitiveness of major integrated
refining and petrochemical platforms;
– increasing the distribution of petroleum products, particularly in
high-growth regions, and offering innovative solutions and
services that meet customers’ evolving needs above and beyond
the supply of petroleum products; and
– expanding along the full gas value chain by unlocking access to
new markets, and developing profitable low-carbon businesses,
in particular renewable energies.
This strategy incorporates the challenges of climate change, using
as a point of reference the 2°C scenario of the International Energy
Agency and its impact on energy markets. TOTAL’s challenge is to
increase access to affordable energy to satisfy the needs of a
growing population, while providing concrete solutions to help limit
the effects of climate change and supplying its clients with an
energy mix featuring a progressively decreasing carbon intensity.
In addition to safety, the values of respect, responsibility and
exemplary conduct underpin TOTAL’s Code of Conduct and
accompany priority business principles in the realms of
safety / security / health / environment, integrity (preventing corruption,
fraud and anti-competitive practices) and human rights. It is
through strict adherence to these values and principles that TOTAL
intends to build strong and sustainable growth for the Group and its
stakeholders and deliver on its commitment to better energy.
(1) Based on market capitalization (in dollars) as of December 31, 2016.
6
TOTAL. Registration Document 2016
Business overview 2
History and strategy of TOTAL
1.3. Group organization
In order to implement TOTAL’s strategy and in line with the “One
Total” company project, a new organization, fully effective since
January 1, 2017, was put in place and is structured around four
business segments following the creation of the Gas,
Renewables & Power (GRP) segment, alongside the existing
Exploration & Production, Refining & Chemicals and
Marketing & Services segments.
The GRP segment spearheads TOTAL’s ambitions in low-carbon
businesses by expanding in downstream gas and renewable
energies as well as in energy efficiency businesses. This segment
brings together the Gas and New Energies divisions (excluding
biotechnologies) and a new Innovation & Energy efficiency division.
Concerning bioenergies, a new Biofuels division now regroups
within the Refining & Chemicals segment all these activities.
In order to improve efficiency, reduce costs and create value within
the Group, the new branch Total Global Services (TGS) pools
the various segments’ support services (Accounting, Purchasing,
Information Systems, Training, Human Resources Administration
and Facilities Management). The entities making up TGS operate as
service companies for internal clients across all four business
segments and the corporate Holding level.
Finally, the diverse Corporate entities were regrouped in two
divisions.
The new People & Social Responsibility division consists of: the
Human Resources division, including Senior Executive
Management; the Health, Safety and Environment division, which
combines HSE departments across the different segments to
establish a strong, unified environmental and safety model; the
Security division; and the new Civil Society Engagement division.
The new Strategy-Innovation division is made of: a new Strategy &
Climate division, responsible notably for ensuring that TOTAL’s strategy
incorporates climate issues; the Public Affairs division; the Audit
division; the Research & Development division (which replaces
the Scientific Development Department and now coordinates
all of the Group’s R&D activities and notably transversal programs
such as on carbon capture, use and storage of CO2); the Chief
Digital Officer; and the Senior Vice President, Technology Experts.
Registration Document 2016. TOTAL
7
2 Business overview
Upstream segment
2. Business overview for fiscal year 2016
2.1. Upstream segment
TOTAL’s Upstream segment includes the activities of Exploration &
Production and Gas. The Group has exploration and production
activities in more than 50 countries and produces oil and gas in
approximately 30 countries. The Gas division conducts downstream
activities related to natural gas, Liquefied Natural Gas (LNG)
and Liquefied Petroleum Gas (LPG), as well as power generation
and trading.
Within the context of the One Total new organization, as of financial
year 2017, Upstream activities will be reported within two segments:
the Exploration & Production segment and the new Gas,
Renewables & Power segment, which includes downstream gas
activities (see point 1.3 of this chapter).
2.45 Mboe / d
hydrocarbons
produced in 2016
11.5 Bboe
of proved hydrocarbon
reserves as of
December 31, 2016 (1)
$15.1billion
of organic investments (2) and
resource acquisitions in 2016
15,191
employees present
Upstream segment financial data
(M$) 2016 2015 20 14
Adjusted operating income (a) 2,737 4,925 17,156
Adjusted net operating income (a) 3,633 4,774 10,504
(a) Adjusted results are defined as income using replacement cost, adjusted for special items, excluding the impact of changes for fair value.
Upstream adjusted net operating income was $3,633 million for the full-year 2016, compared to $4,774 million in 2015, a decrease of 24%,
mainly due the impact of lower hydrocarbon prices which was partially offset by the increase in production combined with the decrease in
operating costs as well as the lower effective tax rate. The effective tax rate for the Upstream was 26.6% in 2016 compared to 45.5% in 2015.
Technical costs (3) for consolidated affiliates, calculated in accordance with ASC 932 (4), were reduced to 20.4 $ / boe in 2016 compared to
23.0 $ / boe in 2015. This decrease was essentially due to the reduction in operating costs from 7.4 $ / boe in 2015 to 5.9 $ / boe in 2016.
Price realizations (a) 2016 2015 2014
Average liquids price ($ / b) 40.3 47.4 89.4
Average gas price ($ / Mbtu) 3.56 4.75 6.57
(a) Consolidated subsidiaries, excluding fixed margins.
The average liquids price decreased by 15% for the full-year 2016 compared to 2015 and the average gas price decreased by 25% in 2016
compared to 2015.
(1) Based on a Brent crude price of 42.82 $/b (reference price in 2016), according to rules established by the Securities and Exchange Commission (refer to point 2.1.1.2).
(2) Organic investments = net investments, excluding acquisitions, divestments and other operations with non-controlling interests (refer to point 3.1 of chapter 2).
(3) (Production costs + exploration expenses + depreciation, depletion and amortization and valuation allowances) / production of the year.
(4) FASB Accounting Standards Codification 932, Extractive industries – Oil and Gas.
8
TOTAL. Registration Document 2016
Business overview 2
Upstream segment
Production
Hydrocarbon production 2016 2015 2014
Combined production (kboe / d) 2,452 2,347 2,146
Liquids (kb / d) 1,271 1,237 1,034
Gas (Mcf / d) 6,447 6,054 6,063
Europe and
Central Asia 757 kboe/d
Africa (a) 634 kboe/d
Middle East
and North Africa 517 kboe/d
Americas 279 kboe/d
Asia-Pacific 265 kboe/d
(a) Excluding North Africa.
Proved reserves
For the full-year 2016, hydrocarbon production was 2,452 kboe / d,
an increase of 4.5% compared to 2015, due to the following:
• +6% due to new start ups and ramp ups, notably Laggan-Tormore,
Surmont Phase 2, Termokarstovoye, Gladstone LNG, Moho
Phase 1b, Vega Pleyade, and Incahuasi;
• -1.5% due to the security situation in Nigeria and Yemen,
and wild fires in Canada;
• natural field decline was offset by a positive price effect and
portfolio effects.
As of December 31, 2016 2015 2014
Hydrocarbon reserves (Mboe) 11,518 11,580 11,523
Liquides (Mb) 5,414 5,605 5,303
Gaz (Bcf) 32,984 32,206 33,590
Europe and
Central Asia 4,126 Mbep
Africa(a) 1,872 Mbep
Middle East and
North Africa 2,734 Mbep
Americas 1,804 Mbep
Asia-Pacific 982 Mbep
(a) Excluding North Africa.
Proved reserves based on SEC rules (based on Brent at 42.82 $ / b)
were 11,518 Mboe at December 31, 2016. The 2016 proved
reserve replacement rate (1), based on SEC rules (based on Brent
at 42.82 $/b in 2016), was 93% in 2016 and 100% over three years.
At a constant price (54.17 $/b in 2015), the proved reserve
replacement rate was 136% in 2016. The difference between the
proved reserves based on SEC rules and the proved reserves
based on a constant price is mainly due to the debooking of proved
undeveloped reserves of Canadian oil sands on the Surmont permit.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
(1) Change in reserves excluding production: (revisions + discoveries, extensions + acquisitions – divestments) / production for the period.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED]
Registration Document 2016. TOTAL
9
2 Business overview
Upstream segment
2.1.1. Exploration & Production
Exploration & Production (E&P)’s mission is to discover and develop
oil and gas fields in order to meet growing energy demand. Safety
is a core value for that mission.
In an environment marked by the strong volatility of hydrocarbon
prices, E&P’s strategy is to develop an oil and gas production model
that is resilient (i.e., able to withstand a long period of low oil and
gas prices), profitable and sustainable.
This strategy is based on three main levers:
– increase profitability: E&P strives to maximize the value of its
assets through operational excellence and to ensure strict
investment discipline by being selective in the sanctioning of new
projects. In addition, E&P continues to restructure or sell the least
performing assets in its portfolio;
– develop operational excellence: in order to ensure its resilience,
E&P continues to reduce costs, improve the efficiency of its
installations and start up projects on time and within budget. E&P
also seeks to minimize the environmental impact of its activities; and
– renew reserves, through exploration as well as accessing already
discovered resources, building on E&P’s competitive advantages
in terms of geographical spread and technical skills.
E&P is exiting a heavy investments phase, which peaked in 2013
and which is expected to enable production to increase 5% on
average per year over the period of 2014-2020. That growth is
supported, on the one hand, by the start-up of 12 major projects in
2017 and 2018 and, on the other hand, by the improvement of the
facilities’ operational efficiency. In 2016, 5 projects were started up,
contributing to production growth of 4.5% compared to 2015.
2.1.1.1. Exploration and development
TOTAL evaluates exploration opportunities based on a variety
of geological, technical, political, economic (including tax and
contractual terms) environmental and societal factors.
The exploration strategy deployed since 2015 aims to prioritize
the most promising drill targets with a view to creating value and
resources. The Group plans balanced exploration investments:
Organic investments (1) from all Exploration & Production subsidiaries
were $14.5 billion (2) in 2016, compared to $20.5 billion in 2015 and
$23 billion in 2014, and were mainly in Angola, the Republic of the
Congo, Nigeria, Norway, Canada, Australia, Kazakhstan, the United
Kingdom, Russia, the United States, Abu Dhabi, Indonesia and Brazil.
2.1.1.2. 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. 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:
– that internal peer review of technical evaluations are carried out
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 concerning the reserves and their evaluation
process, see points 1 and 2 of chapter 11.
– 50% for core and emerging basins, where the presence of
Proved reserves for 2016, 2015 and 2014
hydrocarbons is already proven;
– 25% for near-field exploration around producing assets; and
– 25% for high-potential frontier basins.
In 2015, a new organization for the Group’s exploration activities,
adapted to the new strategy, was implemented with a new senior
exploration management team. The organizational changes,
focused notably on strengthening regional basin mastery and
technical excellence, were finalized in 2016 with the transfer of
Asia-Pacific and Americas regional hubs to Singapore and
Houston, respectively.
In 2016, exploration expenditure from all Exploration & Production
subsidiaries was $1.4 billion, mainly in the United States, Norway,
Papua New Guinea, Brazil, Iraq, Bulgaria, Myanmar and the United
Kingdom, compared to $1.9 billion in 2015 and $2.6 billion in 2014.
The 2017 exploration budget is $1.25 billion.
In accordance with the amended Rule 4-10 of Regulation S-X,
proved reserves at December 31 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 average reference
prices for Brent crude for 2016, 2015 and 2014 were, respectively,
42.82 $ / b, 54.17 $ / b and 101.27 $ / b.
As of December 31, 2016, TOTAL’s combined proved reserves of oil
and gas were 11,518 Mboe (58% of which were proved developed
reserves). Liquids (crude oil, condensates, natural gas liquids and
bitumen) represented approximately 47% of these reserves and
natural gas 53%. These reserves were located in Europe (mainly in
Norway and the United Kingdom), Africa (mainly in Angola, Gabon,
Nigeria and the Republic of the Congo), the Americas (mainly in
Canada, Argentina, the United States and Venezuela), the Middle
East (mainly in Qatar, the United Arab Emirates and Yemen), and
Asia-Pacific (mainly in Australia) and in Kazakhstan and Russia.
(1) For Exploration & Production, organic investments include exploration investments, net development investments and net financial investments.
(2) Excluding the Group’s Gas activities.
10
TOTAL. Registration Document 2016
Business overview 2
Upstream segment
At a constant oil price (54.17 $/b) the proved reserves were 11,905
Mboe. The difference between the proved reserves based on SEC
rules and the proved reserves based on a constant price is mainly
due to the debooking of proved undeveloped reserves of Canadian
oil sands on the Surmont permit.
Discoveries of new fields and extensions of existing fields added
2,172 Mboe to the Upstream segment’s proved reserves during
the 3-year period ended December 31, 2016 (before deducting
production and sales of reserves in place and adding any acquisitions
of reserves in place during this period). The net level of reserve
revisions during this 3-year period is +505 Mboe, which was mainly
due to the overall positive revisions in field behaviors and to the
positive impact of the decrease in hydrocarbon prices in 2015
and 2016 that led to a reserves increase on fields with production
sharing or service contracts and on Canadian bitumen fields (royalty
effect), which was partially offset by the reserves decrease resulting
from the suspension or cancellation due to economic reasons of
capital expenditures associated with, or from shorter producing life
of, certain producing fields.
The 2016 proved reserve replacement rate (1), based on SEC rules
(based on Brent at 42.82 $/b in 2016), was 93% in 2016 and 100%
over three years. At a constant price (54.17 $/b in 2015), the proved
reserve replacement rate was 136% in 2016.
As of December 31, 2015, TOTAL’s combined proved reserves of oil
and gas were 11,580 Mboe (53% of which were proved developed
reserves) compared to 11, 523 Mboe (50% of which were proved
developed reserves) as of December 31, 2014. Liquids (crude oil,
condensates, natural gas liquids and bitumen) at year-end 2015
represented approximately 48% of these reserves and natural gas
the remaining 52% and, at year-end 2014, approximately 46% of
these reserves and natural gas the remaining 54%.
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 19% of TOTAL’s
reserves as of December 31, 2016). 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 decrease,
more barrels are necessary to cover the same amount of expenses.
Moreover, the number of barrels recoverable 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 increase is partly offset by a reduction of the duration
over which fields can be produced economically. However, the
decrease in reserves due to this reduction is generally less than the
increase in reserves under production sharing or risked service
contracts due to such lower prices. As a result, lower prices usually
lead to an increase in TOTAL’s reserves. In Canada, a decrease in
the reference price per barrel used as a reference for estimating
proved reserves leads to a decrease in the volume of royalties and,
therefore, an increase of the proved reserves, and vice versa.
Lastly, for any type of contract, a significant decrease in the
reference price of petroleum products that negatively impacts
projects profitability may lead to a reduction of proved reserves.
2.1.1.3. Production
The average daily production of liquids and natural gas was
2,452 kboe / d in 2016 compared to 2,347 kboe / d in 2015 and
2,146 kboe / d in 2014. Liquids represented approximately 52%
and natural gas approximately 48% of TOTAL’s overall production
in 2016.
The tables on the following pages set forth TOTAL’s annual and
average daily production of liquids and natural gas by geographic
area and for each of the last three fiscal 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). The Group’s entities may frequently act as operator (the
party responsible for technical production) on acreage in which it
holds an interest. Refer to the table “Presentation of production
activities by region” on the following pages for a presentation of the
Group’s producing assets.
As in 2015 and 2014, substantially all of the liquids production from
TOTAL’s Upstream segment in 2016 was marketed by the Trading &
Shipping division of TOTAL’s Refining & Chemicals segment (refer to
table “Trading’s crude oil sales and supply and petroleum products
sales” in point 2.2.2.1 of this chapter).
2.1.1.4. Delivery commitments
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, the Netherlands and
Norway, 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.
Some of TOTAL’s long-term contracts, notably in Bolivia, Indonesia,
Nigeria, Norway, Thailand and Qatar, 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 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 2017-2019 to be
4,734 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
(refer to points 1 and 2 of chapter 11).
2.1.1.5. Contractual framework of activities
Licenses, permits and contracts governing the Group’s ownership
of oil and gas interests have terms that vary from country to country
and 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 agreements usually take the form of
concessions or production sharing contracts.
(1) Change in reserves excluding production: (revisions + discoveries, extensions + acquisitions – divestments) / production for the period.
Registration Document 2016. TOTAL
11
2 Business overview
Upstream segment
In the framework of oil concession agreements, 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 host country, 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 country, which is generally
represented by a state-owned company. The latter can thus be
involved in operating decisions, cost accounting and production
allocation. 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 is intended to cover its incurred
expenses (capital and operating costs). The balance of production,
known as “profit oil”, is then shared in varying proportions, between
the company or consortium, on the one hand, and the host country
or state-owned company, on the other hand.
Today, concession agreements and PSCs can coexist, sometimes
in the same country or even on the same block. Even though there
are other contractual models, TOTAL’s license portfolio is
comprised mainly of concession agreements.
On most licenses, the partners and authorities of the host country,
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 PSCs. However, the profit oil
is replaced by a defined cash monetary remuneration, agreed by
contract, which depends notably on field performance parameters
such as the amount of barrels 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 relinquish 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, PSCs 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 are generally
substantially higher than those imposed on other industrial or
commercial businesses.
12
TOTAL. Registration Document 2016
2.1.1.6. Production by region
The following table sets forth the Group’s annual liquids and natural gas production by region, according to the internal business units of the Group.
2016
2015
20 14
Business overview 2
Upstream segment
Liquids Natural Total Liquids Natural Total Liquids Natural Total
gas Mboe
Mb(a)
Bcf(b) Bcf(b) Bcf(b)
gas Mboe Mb(a)
gas Mboe Mb(a)
Europe and Central Asia 91 1,002 277 80 881 243 73 812 224
Azerbaijan - - - - - - 1 22 5
France - - - - - - - 3 1
Italia - - - - - - - - -
Kazakhstan 1 2 1 - - - - - -
Norway 44 226 86 47 224 88 49 210 88
The Netherlands - 52 9 - 58 10 - 62 11
United Kingdom 18 218 58 13 142 39 11 122 32
Russia 28 504 123 20 457 106 12 393 86
Africa (excluding North Africa) 186 227 232 190 212 233 179 225 223
Angola 84 25 89 86 18 90 70 20 73
Republic of the Congo 31 11 33 30 11 32 32 13 35
Gabon 20 5 21 20 5 22 20 5 21
Nigeria 51 186 89 54 178 89 57 187 94
Middle East and North Africa 137 291 189 136 318 193 82 424 159
Algeria 2 33 8 3 35 9 2 29 7
United Arab Emirates 102 25 107 100 24 105 42 22 46
Iraq 6 <1 7 7 - 7 4 - 4
Libya 5 - 5 5 - 5 10 - 10
Oman 10 23 14 8 21 12 9 22 13
Qatar 11 210 49 12 209 49 12 203 48
Yemen - - - 1 29 6 3 148 31
Americas 40 346 102 35 327 93 32 323 90
Argentina 3 143 29 3 129 26 3 134 27
Bolivia 1 59 12 1 49 10 1 51 11
Canada 12 - 12 5 - 5 4 - 4
United States 11 111 31 13 112 33 10 104 28
Venezuela 12 33 17 13 37 19 14 34 19
Asia-Pacific 11 494 97 12 471 94 11 429 87
Australia - 33 6 - 10 1 - 8 1
Brunei 1 29 7 1 23 5 1 24 5
China - 19 4 - 22 4 - 23 4
Indonesia 7 240 51 8 247 54 7 217 47
Myanmar - 60 8 - 56 7 - 49 6
Thailand 3 112 22 3 113 23 4 108 22
Total production 465 2,360 897 453 2,209 856 377 2,213 783
Including share
of equity affiliates 91 694 220 81 667 204 73 726 208
Angola - 7 2 - - - - 4 1
United Arab Emirates 42 19 45 39 18 43 40 19 43
Oman 9 23 13 8 21 12 8 22 12
Qatar 3 139 28 3 140 28 3 139 28
Russia 25 503 120 17 456 102 9 392 83
Venezuela 12 3 12 14 3 14 14 2 14
Yemen - - - - 29 5 - 147 27
(a) Liquids consist of crude oil, bitumen, condensates and natural gas liquids (NGL). With respect to bitumen, the Group’s production in Canada consists of bitumen only, and all of the Group’s
bitumen production is in Canada. With respect to NGL, the table above does not set forth separate figures for NGL because they represented less than 7.5% of the Group’s total liquids
production in each of the years 2014, 2015 and 2016.
(b) Including fuel gas (163 Bcf in 2016, 159 Bcf in 2015, 155 Bcf in 2014).
Registration Document 2016. TOTAL
13
2 Business overview
Upstream segment
The following table sets forth the Group’s average daily liquids and natural gas production by region, according to the internal business units
of the Group.
2016
2015
2014
Liquids Natural Total Liquids Natural Total Liquids Natural Total
gas kboe/d
kb/d(a)
Mcf/d(b) Mcf/d(b) Mcf/d(b)
gas kboe/d kb/d(a)
gas kboe/d kb/d(a)
Europe and Central Asia 249 2,737 757 215 2,413 664 201 2,224 613
Azerbaijan - - - - - - 3 59 14
France - - - - - - - 9 2
Italia - - - - - - - - -
Kazakhstan 3 6 4 - - - - - -
Norway 121 618 235 125 614 239 135 576 242
The Netherlands - 141 25 1 158 28 1 171 31
United Kingdom 49 595 158 35 389 107 29 333 89
Russia 76 1,377 335 54 1,252 290 33 1,076 235
Africa (excluding North Africa) 509 621 634 521 581 639 490 614 610
Angola 230 68 243 238 49 248 191 54 200
Republic of the Congo 84 29 90 81 30 87 88 35 95
Gabon 55 15 58 55 15 59 55 14 58
Nigeria 140 509 243 147 487 245 156 511 257
Middle East and North Africa 373 795 517 372 874 531 224 1,163 438
Algeria 6 90 23 7 96 25 5 79 20
United Arab Emirates 279 67 291 274 66 287 115 61 127
Iraq 17 1 18 18 1 18 12 1 12
Libya 14 - 14 14 - 14 27 - 27
Oman 26 62 37 25 58 36 24 61 36
Qatar 31 575 134 32 573 134 32 555 132
Yemen - - - 2 80 17 9 406 84
Americas 109 944 279 95 896 255 89 884 247
Argentina 8 391 78 8 354 72 9 367 75
Bolivia 4 160 34 3 133 28 4 139 30
Canada 34 - 34 14 - 14 12 - 12
United States 31 304 86 34 308 89 27 285 78
Venezuela 32 89 47 36 101 52 37 93 52
Asia-Pacific 31 1,350 265 34 1,290 258 30 1,178 238
Australia - 91 16 - 28 4 - 23 4
Brunei 3 78 18 3 62 15 2 66 15
China - 53 10 - 59 11 - 63 12
Indonesia 19 657 140 22 676 147 18 594 130
Myanmar - 165 21 - 153 19 - 135 17
Thailand 9 306 60 9 312 62 10 297 60
Total production 1,271 6,447 2,452 1,237 6,054 2,347 1,034 6,063 2,146
Including share
of equity affiliates 247 1,894 600 219 1,828 559 200 1,988 571
Angola 1 20 5 - - - - 10 2
United Arab Emirates 114 51 123 107 50 116 109 51 118
Oman 24 62 36 24 58 34 23 61 34
Qatar 7 379 76 7 383 77 7 381 77
Russia 69 1,375 327 45 1,250 280 24 1,075 227
Venezuela 32 7 33 36 7 37 37 6 38
Yemen - - - - 80 15 - 404 75
(a) Liquids consist of crude oil, bitumen, condensates and natural gas liquids (NGL). With respect to bitumen, the Group’s production in Canada consists of bitumen only, and all of the Group’s
bitumen production is in Canada. With respect to NGL, the table above does not set forth separate figures for NGL because they represented less than 7.5% of the Group’s total liquids
production in each of the years 2014, 2015 and 2016.
(b) Including fuel gas (448 Mcf / d in 2016, 435 Mcf / d in 2015, 426 Mcf / d in 2014).
14
TOTAL. Registration Document 2016
Business overview 2
Upstream segment
2.1.1.7. Presentation of production activities by geographical zone
The table below sets forth, by geographical zone according to the internal business units of the Group, TOTAL’s producing assets, the year
in which TOTAL’s activities started, the Group’s interest in each asset and whether TOTAL is operator of the asset.
TOTAL’s producing assets as of December 31, 2016 (a)
Europe
and Central Asia
Kazakhstan
1992
Norway
1965
Non operated: Kashagan (16.81%)
Operated: Atla (40.00%), Skirne (40.00%)
Non-operated: Åsgard (7.68%), Ekofisk (39.90%), Ekofisk South (39.90%), Eldfisk (39.90%), Embla (39.90%),
Gimle (4.90%), Heimdal (16.76%), Islay (5.51%) (b), Kristin (6.00%), Kvitebjørn (5.00%), Mikkel (7.65%), Oseberg
(14.70%), Oseberg East (14.70%), Oseberg South (14.70), Snøhvit (18.40%), Stjerne (14.70%), Troll I (3.69%),
Troll II (3.69%), Tune (10.00%), Tyrihans (23.15%), Visund (7.70%), Visund South (7.70%), Visund North (7.70%)
The Netherlands
1964
Operated: F6a oil (65.68%), F15a Jurassic (38.20%), F15a Triassic (32.47%), J3a (30.00%), K1a (40.10%), K3b (56.16%),
K4a (50.00%), K4b / K5a (36.31%), K5b (50.00%), K6 / L7 (56.16%), L1a (60.00%), L1d (60.00%), L1e (55.66%),
L1f (55.66%), L4d (55.66%)
Non-operated: E16a (16.92%), E17a / E17b (14.10%), J3b / J6 (25.00%), K9ab-A (22.46%), Q16a (6.49%)
Russia
1991
Non-operated: Kharyaga (20.00%), Termokarstovoye (49.00%) (c), several fields through the participation
in Novatek (18.90%)
United Kingdom
1962
Operated: Alwyn North (100.00%), Dunbar (100.00%), Ellon (100.00%), Forvie North (100.00%), Grant (100.00%),
Jura (100.00%), Nuggets (100.00%), Elgin-Franklin (46.17%), West Franklin (46.17%), Glenelg (58.73%), Islay (94.49%) (b),
Laggan Tormore (60.00%)
Non-operated: Bruce (43.25%), Markham unitized field (7.35%), Keith (25.00%)
Africa
(excl. North Africa)
Angola
1953
Gabon
1928
Nigeria
1962
Operated: Girassol, Jasmim, Rosa, Dalia, Pazflor, CLOV (Block 17) (40.00%)
Non-operated: Cabinda Block 0 (10.00%), Kuito, BBLT, Tombua-Landana (Block 14) (20.00%) (d),
Lianzi (Block 14K) (10.00%) (d), Angola LNG (13.60%)
Operated: Anguille Marine (100.00%), Anguille Nord Est (100.00%), Atora (40.00%), Avocette (57.50%), 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’Boukou (57.50%), Mérou Sardine Sud (50.00%), N’Tchengue (100.00%), Port Gentil Océan
(100.00%), Torpille (100.00%), Torpille Nord Est (100.00%)
Non operated: Rabi Kounga (47.50%)
Operated: OML 58 (40.00%), OML 99 Amenam-Kpono (30.40%), OML 100 (40.00%), OML 102 (40.00%),
OML 130 (24.00%)
Non-operated: OML 102 – Ekanga (40.00%), Shell Petroleum Development Company (SPDC 10.00%),
OML 118 – Bonga (12.50%), OML 138 (20.00%)
The Republic
of the Congo
1968
Operated: Kombi-Likalala-Libondo (65.00%), Moho Bilondo (including Moho phase 1b) (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%)
Non-operated: Lianzi (26.75%), Loango (42.50%), Zatchi (29.75%)
(a) The Group’s interest in the local entity is approximately 100% in all cases except for Total Gabon (58.28%), Total E&P Congo (85%) and certain entities in Abu Dhabi and Oman (see notes b
through k below).
(b) The field of Islay extends partially in Norway. Total E&P UK holds a 94.49% stake and Total E&P Norge 5.51%.
(c) TOTAL’s interest in the joint venture ZAO Terneftegas with Novatek (51.00 %).
(d) Stake in the company Angola Block 14 BV (TOTAL 50.01%).
Operated (Group share in %).
Non-operated (Group share in %).
Registration Document 2016. TOTAL
15
2 Business overview
Upstream segment
Middle East
and North Africa
Algeria
1952
U.A.E.
1939
Iraq
1920
Libya
1959
Oman
1937
Qatar
1936
Yemen
1987
Americas
Argentina
1978
Bolivia
1995
Canada
1999
Non-operated: Tin Fouyé Tabankort (35.00%)
Operated: Abu Al Bukhoosh (75.00%)
Non-operated: ADCO (10.00%), Abu Dhabi offshore (13.33%) (e), GASCO (15.00%), ADGAS (5.00%)
Non-operated: Halfaya (22.5%) (f)
Non-operated: zones 15, 16 & 32 (75.00%) (g), zone 129 & 130 (30.00%) (g)
Non-operated: various onshore fields (Block 6) (4.00%) (h), Mukhaizna field (Block 53) (2.00%) (i)
Operated: Al Khalij (40.00%)
Non-operated: North Field-Block NF Dolphin (24.50%), North Field-Qatargas 1 Downstream (10.00%),
North Field-Qatargas 1 Upstream (20.00%), North Field-Qatargas 2 Train 5 (16.70%)
Non-operated: Various onshore fields (Block 5) (15.00%)
Operated: Aguada Pichana (27.27%), Aguada San Roque (24.71%), Rincon La Ceniza (45.00%), Aries (37.50%),
Cañadon Alfa Complex (37.50%), Carina (37.50%), Hidra (37.50%), Kaus (37.50%), Vega Pleyade (37.50%),
La Escalonada (45.00%)
Non-operated: Rincón de Aranda (45.00%), Sierra Chata (2.51%)
Operated: Incahuasi (50.00%)
Non-operated: San Alberto (15.00%), San Antonio (15.00%), Itaú (41.00%)
Non-operated: Surmont (50.00%)
United States
1957
Operated: several assets in the Barnett Shale area (100.00%)
Non-operated: several assets in the Utica Shale area (25.00%) (j), Chinook (33.33%), Tahiti (17.00%)
Venezuela
1980
Asia-Pacific
Australia
2005
Brunei
1986
China
2006
Indonesia
1968
Myanmar
1992
Thailand
1990
Non-operated: PetroCedeño (30.32%), Yucal Placer (69.50%)
Non-operated: several fields in UJV GLNG (27.50%) (k)
Operated: Maharaja Lela Jamalulalam (37.50%)
Non-operated: South Sulige (49.00%)
Operated: Bekapai (50.00%), Handil (50.00%), Peciko (50.00%), Sisi-Nubi (47.90%), South Mahakam (50.00%),
Tambora (50.00%), Tunu (50.00%)
Non-operated: Badak (1.05%), Nilam-gas and condensates (9.29%), Nilam-oil (10.58%),
Ruby-gas and condensates (15.00%)
Operated: Blocks M5/M6 (Yadana, Sein) (31.24%)
Non-operated: Bongkot (33.33%)
(e) Via Abu Dhabi Marine Areas Limited (equity affiliate), TOTAL holds a 13.33% stake in the Abu Dhabi Marine Areas (ADMA) concession operated by ADMA-OPCO.
(f) TOTAL’s interest in the joint venture.
(g) TOTAL’s stake in the foreign consortium.
(h) TOTAL’s indirect interest (4.00%) in the concession, via its 10% interest in Private Oil Holdings Oman Ltd. TOTAL also has a direct interest (5.54%) in the Oman LNG facility (trains 1 and
2), and an indirect participation (2.04%) through OLNG in Qalhat LNG (train 3).
(i) TOTAL’s direct interest in Block 53.
(j) TOTAL’s interest in the joint venture with Chesapeake.
(k) TOTAL’s interest in the unincorporated joint venture.
Operated (Group share in %).
Non-operated (Group share in %).
16
TOTAL. Registration Document 2016
Business overview 2
Upstream segment
2.1.1.8. Main activities by geographical zone
– In the Sleipner area, the development of the Gina Krog field located
The information below describes the Group’s main exploration and
production activities presented by geographical zones according to the
internal business units (1) of the Group, without detailing all of the assets
held by TOTAL. In each area, the countries are presented in decreasing
order of production. The capacities referred to herein are expressed on
a 100% basis, regardless of the Group’s stake in the asset.
Europe and Central Asia
In 2016, TOTAL’s production in the zone of Europe and Central
Asia was 757 kboe / d, representing 31% of the Group’s total
production, compared to 664 kboe / d in 2015 and 613 kboe / d
in 2014. The two main producing countries in this zone in 2016
were Russia and Norway.
In Russia, where the largest percentage of TOTAL’s proved reserves
are located (nearly 21% as of December 31, 2016), the Group’s
production was 335 kboe / d in 2016, compared to 290 kboe / d in
2015 and 235 kboe / d in 2014. This production comes from the
Kharyaga and Termokarstovoye fields and TOTAL’s stake in PAO
Novatek (2). Since 2015, Russia has been the leading contributor to
the Group’s production.
in the north of Sleipner and approved in 2013 is underway.
In December 2016, the Group sold a stake of 15% in this field,
reducing its participation from 30% to 15%.
– In the Greater Hild area, the development of the Martin Linge field
(51%, operator, estimated capacity 80 kboe / d) is underway.
– In the Barents Sea, the Group holds an 18.4% stake in the gas
liquefaction plant of Snøhvit (capacity of 4.2 Mt / y). This plant is
supplied with production from the Snøhvit and Albatross gas fields.
In the United Kingdom, the Group’s production was 158 kboe / d
in 2016 compared to 107 kboe / d in 2015 and 89 kboe / d in 2014.
More than 90% of this production comes from operated fields in
the three main areas described below.
– In the Alwyn / Dunbar area (100%) in the Northern North Sea,
production from the Alwyn and Dunbar fields represents 25%
and 18% of production, respectively, of this area. The rest of the
production comes from satellites, which are:
1) linked to Alwyn by subsea tieback: the Forvie gas and
condensates field joined by the Jura and Islay fields and the
Nuggets gas field network; and
2) linked to Dunbar: the Ellon (oil and gas) and the Grant (gas and
condensates) fields.
In addition to the shareholding in Novatek, TOTAL currently
participates in the Yamal LNG and Termokarstovoye projects with
Novatek via a direct stake:
On the Dunbar field (100%), the additional development phase
(Dunbar phase IV) was stopped in 2016 for technical and
economic reasons.
– Yamal LNG: in 2013, the company OAO Yamal LNG (3) launched
this project aimed at developing the onshore field of South
Tambey (gas and condensates) located on the Yamal peninsula,
and at building a three-train gas liquefaction plant with total LNG
capacity of 16.5 Mt / y. The Yamal LNG project’s financing was
finalized in 2016 in compliance with applicable regulations.
At year-end 2016, 75% of the project was completed and over
96% of the LNG volumes have been sold through long-term sale
agreements. Production is expected to start by year-end 2017.
– Termokarstovoye (an onshore gas and condensates field, located
in the Yamalo-Nenets region): the development and production
license of Termokarstovoye field is held by ZAO Terneftegas, a
joint venture between Novatek (51%) and TOTAL (49%). The field
came into production in 2015 (capacity of 65 kboe / d).
In August 2016, TOTAL sold a 20% interest in the Kharyaga field
(thus reducing its stake to 20%) and transferred operatorship of the
field to the purchaser, Zarubezhneft.
Since 2014, certain Russian persons and entities, including various
entities operating in the energy sector, are subject to international
economic sanctions adopted, in particular, by the United States,
the European Union. TOTAL complies with sanctions applicable to
its activities. For further information, refer to point 1.9 of chapter 4
(Risk factors).
In Norway, TOTAL has equity stakes in 93 production licenses on
the Norwegian maritime continental shelf, 35 of which it operates.
The Group’s production in 2016 was 235 kboe / d compared to
239 kboe / d in 2015 and 242 kboe / d in 2014.
– In the Greater Ekofisk area, the Group holds a 39.9% stake in the
Ekofisk and Eldfisk fields. Production at Ekofisk South started in
2013 and at Eldfisk II in 2015 (capacity of 70 kboe / d each).
– In the Elgin / Franklin area in the Central Graben, TOTAL holds
stakes in the Elgin-Franklin and West Franklin fields (46.17%,
operator). Concerning the Elgin redevelopment project (drilling of
five wells), two wells were drilled in 2016. The West Franklin
Phase II project, comprising the addition of two platforms and
the drilling of three wells, was completed in 2016 when the last
well was drilled.
– In the West of Shetland area, the Laggan and Tormore fields
(60%, operator) came into production in 2016. Production is
expected to start on the Edradour and Glenlivet fields (60%,
operator) in 2017 (total production capacity of 90 kboe / d).
TOTAL also operates the P967 license, including the Tobermory
gas discovery (30%).
Impairments on gas assets in the United Kingdom were recognized
in the 2015 and 2016 Consolidated Financial Statements.
In addition, TOTAL holds five shale gas exploration and production
licenses (PEDL 139 and 140, 40%; PEDL 273, 305 and 316, 50%)
located in the Gainsborough Trough basin (East Midlands region).
The sale of interests held by Total E&P UK in transport pipelines
(FUKA and SIRGE) and the St. Fergus terminal was finalized in
March 2016.
In the Netherlands, the Group’s production was 25 kboe / d in 2016
compared to 28 kboe / d in 2015 and 31 kboe / d in 2014. This decrease
was due to natural field decline. TOTAL holds interests in 24 offshore
production licenses, including 20 that it operates, and an offshore
exploration license (K1c, 30%).
(1) The geographical zones are as follows: Europe and Central Asia; Africa (excluding North Africa); Middle East and North Africa; Americas; and Asia-Pacific. The information presented relating to 2015
and 2014 production has been restated accordingly.
(2) A Russian company listed on stock exchanges in the Moscow and London stock exchanges and in which the Group held an interest of 18.9% as of December 31, 2016.
(3) OAO Yamal LNG is held by PAO Novatek (50.1%), Total E&P Yamal (20%), CNODC (20%), a subsidiary of China National Petroleum Corporation, and Silk Road Fund (9.9%).
Registration Document 2016. TOTAL
17
2 Business overview
Upstream segment
In Kazakhstan, TOTAL holds a stake in the North Caspian license
(16.81%), which covers the Kashagan field. Production of the first
phase of the Kashagan field and the associated processing plant
(capacity of 370 kb / d) restarted in October 2016 after pipeline
problems had taken it off stream for three years. Replacement of
the pipelines by the operator was completed in the summer of 2016.
The Group’s production was 4 kboe / d in 2016 and is expected to
gradually increase between now and the end of 2017. In July 2016,
TOTAL withdrew from the Nurmunaï North and South onshore
exploration licenses (51.1%, operator) located in the southwest of
the country, due to negative results from the two exploration wells
drilled in 2015.
In Italy, TOTAL holds stakes in the Tempa Rossa field (50%, operator),
located on the Gorgoglione concession (Basilicate region), and
three exploration licenses. The Tempa Rossa development project
is underway, with production expected to start at the end of 2017.
In Azerbaijan, TOTAL signed an agreement in November 2016
establishing the contractual and commercial conditions for a first
phase of production of the Absheron gas and condensate field
located in the Caspian Sea and discovered by TOTAL in 2011
(40%, operator). The agreement enabled to define a cost-competitive
development scheme by tying the field to existing infrastructure in
order to deliver gas at a competitive price. The capacity production
from this high pressure field is expected to be approximately 35 kboe / d.
The produced gas will supply Azerbaijan’s domestic market.
In France, the Group’s production ended in 2014 with the sale of
the Lacq concessions to Geopetrol. Total E&P France remains the
owner of parts of the Lacq industrial site, located in the southwest
of France, and is carrying out decommissioning, dismantling and
site rehabilitation activities.
In Bulgaria, where TOTAL has been present since 2012, the Group
drilled a deep offshore exploration well in 2016 on the Han Asparuh
block (14,220 km²), 100 km offshore in the Black Sea, which revealed
the presence of oil in this area for the first time.
In Denmark, TOTAL relinquished the two shale gas exploration
licenses (80%, operator) it acquired in 2010, in July 2015 for the
license 2 / 10 (Nordsjaelland) and in June 2016 for the license 1 / 10
(Nordjylland).
Rest of the Europe and Central Asia area
TOTAL also holds interests in an exploration license without activity
in Tajikistan.
Africa
In 2016, TOTAL’s production in the zone of Africa (excluding
North Africa) was 634 kboe / d, representing 26% of the Group’s
total production, compared to 639 kboe / d in 2015 and 610 kboe / d
2014. The two main producing countries in this zone in 2016
were Nigeria and Angola.
In Nigeria, the Group’s production, primarily offshore, was 243 kboe / d
in 2016, compared to 245 kboe / d in 2015 and 257 kboe / d in 2014.
This drop in production was due mainly to the sale of interests in
certain licenses of the Shell Petroleum Development Company
(SPDC) joint venture as well as to difficult operational security
conditions in the Niger delta that had a negative impact on onshore
production and, in particular, the oil export of the Forcados terminal
operated by Shell.
TOTAL operates 5 of the 35 oil mining leases (OML) in which it has
interests and also holds interests in 3 oil prospecting licenses (OPL).
TOTAL has offshore operations (production was 160 kboe / d in
2016) notably on the following leases:
– On OML 139 (18%), the Owowo-3 exploration well, drilled
in 2016, confirmed the discovery of oil made in 2012 and should
enable progress in the preparation of the development plan.
The discovery is located near OML 138 (20%), where three oil
discoveries were made in 2014 and 2015.
– OML 130 (24%, operator): the development of the Egina field
(200 kboe / d capacity) launched in 2013 is underway, and
production is expected to start in 2018. The assessment of the
Preowei field is planned in 2017.
– On OML 102 (40%, operator), in 2014 TOTAL stopped routine
flaring on the Ofon field (Ofon phase 2 project). The gas
associated with the production of oil is now compressed and
sent onshore to the Nigeria LNG plant. All activities of the Ofon 2
project were completed in 2016 and the drilling of 24 additional
wells, started in 2015, continues.
– On OML 99 (40%, operator), studies are ongoing for the
development of the Ikike field.
– On OML 118 (12.5%), the Bonga field contributed 19 kboe / d to
the Group’s production in 2016. Optimization studies of the
Bonga South West Aparo project (10% unitized) are ongoing
with an investment decision target in 2018.
TOTAL has onshore operations (production was 83 kboe / d in 2016),
notably:
– On OML 58 (40%, operator), under its joint venture with Nigerian
National Petroleum Corporation (NNPC), a gas production
capacity of 550 Mcf / d was reached and delivery of gas to the
Nigerian domestic market started in 2016.
– In relation to the SPDC joint venture (10%), which includes 20 oil
mining leases (of which 17 are located onshore), the 2016
production was 46 kboe / d (of which 43 kboe / d was onshore).
TOTAL sold its 10% interest in OML 24 (in 2014) and OMLs 18
and 29 (in 2015), operated via the SPDC joint venture. In addition,
the sale process of OML 25 is underway.
TOTAL is also developing LNG activities with a 15% stake in the
Nigeria LNG Ltd company, which owns a liquefaction plant with a
22 Mt / year total capacity. Assessments are ongoing for the
installation of an additional capacity of approximately 8.5 Mt / year.
In Angola, where TOTAL is the leading oil operator in the country (1),
the Group’s production was 243 kboe / d in 2016, compared to
248 kboe / d in 2015 and 200 kboe / d in 2014. This production
comes from Blocks 17, 14 and 0, and Angola LNG.
– Deep offshore Block 17 (40%, operator), TOTAL’s main asset in
Angola, is composed of four major producing hubs: Girassol, Dalia,
Pazflor and CLOV. TOTAL continued to invest in brown field
projects in 2016, including in particular Dalia Phase 2A and Girassol
M14, which are expected to start production in 2017. In 2015,
Dalia Phase 1A went into production and the start of multiphase
pumps enabled production to be increased at Girassol. The Zinia
phase 2 project, a satellite development of Pazflor, is moving forward.
– On the ultra-deep offshore Block 32 (30%, operator), the Kaombo
project was launched in 2014 to develop the discoveries in the
southeast part of the block via two FPSOs (floating production
storage and offloading facilities) with a capacity of 115 kb / d
(1) Company data.
18
TOTAL. Registration Document 2016
Business overview 2
Upstream segment
each. The drilling campaign of 59 wells began in 2015. In
June 2016, a presidential decree was published providing new
tax conditions for the project. The center and north parts of the
block (outside Kaombo) offer additional exploration potential and
are currently being assessed.
– On Block 14 (20%) (1), production comes from the Tombua-
Landana and Kuito fields as well as the BBLT project, comprising
the Benguela, Belize, Lobito and Tomboco fields.
– Block 14K (36.75%) is the offshore unitization area between
Angola (Block 14) and the Republic of the Congo (Haute Mer
license). The Lianzi field, which is connected to the existing BBLT
platform (Block 14), started production in 2015. TOTAL’s interest
in the unitized zone is held 10% through Angola Block 14 BV and
26.75% through Total E&P Congo.
– On Block 0 (10%), the second phase of the Mafumeira field
development project started production in March 2017.
TOTAL is also developing its LNG activities through the Angola LNG
project (13.6%), which includes a gas liquefaction plant near Soyo
supplied by gas associated with production from Blocks 0, 14, 15,
17 and 18. LNG production started in 2013, but various technical
incidents required an extended shutdown of the plant. LNG
production restarted in May 2016. Taking into account the revised
gas price assumptions, an impairment on Angola LNG was
recognized in the 2016 Consolidated Financial Statements.
In the Bas-Congo basin, TOTAL is also the operator of exploration
Block 17 / 06 (30%).
In the deep offshore Kwanza basin, TOTAL is the operator of
Blocks 25 (35%) and 40 (40%).The Block 39 license (7.5%) expired
at the end of December 2016.
In the Republic of the Congo, the Group’s production, through its
subsidiary Total E&P Congo (2), was 90 kboe / d in 2016, compared
to 87 kboe / d in 2015 and 95 kboe / d in 2014.
– On the offshore field Moho Bilondo (53.5%, operator), the Phase
1b project (estimated capacity of 40 kboe / d) started production
in 2015. The Moho Nord project (estimated capacity of 100 kboe / d)
started production in March 2017.
– Block 14K (36.75%) corresponds to the offshore unitization area
between the Republic of the Congo (Haute Mer license) and
Angola (Block 14 located in Angola). The Lianzi field started
production in 2015. TOTAL’s interests in the unitization area are
held 26.75% by Total E&P Congo and 10% by Angola Block 14 BV.
– Total E&P Congo is operator of Djéno (63%) the sole oil terminal
in the country.
– On December 31, 2016, Total E&P Congo returned its interests
in the Tchibouela, Tchendo, Tchibeli and Litanzi fields (65%) to
the Republic of the Congo, as the licenses have expired.
In Gabon, the Group’s production was 58 kboe / d in 2016 compared
to 59 kboe / d in 2015 and 58 kboe / d in 2014. The Group’s activities
in Gabon are primarily carried out by Total Gabon (3). TOTAL wholly
owns and operates the Anguille and Torpille sector offshore fields,
the Mandji Island sector onshore fields and the Cap Lopez oil
terminal. TOTAL is also the operator of the Baudroie-Mérou
offshore fields (50%) and the Diaba deep offshore license (42.5%),
where the Diaman gas discovery was made in 2013. In February
2017, TOTAL signed an agreement for the sale of stakes and the
transfer of operatorship in various mature assets. The transaction is
subject to approval by the authorities.
In Uganda, a growth area for the Group TOTAL has been present
in the upstream since 2012, and has a 33.33% stake in the licenses
EA-1, EA-1A (Lyec), EA-2 (Bulisa and Kaiso Tonya area) and EA-3
(Kingfisher) all located in the Lake Albert region. TOTAL is the
operator of licenses EA-1 and EA-1A. In January 2017, TOTAL
signed an agreement to acquire 21.57% of the 33.33% interest
held by Tullow in the licenses EA-1, EA-1A, EA-2 and EA-3. TOTAL
will take over operatorship from Tullow of license EA-2, enabling
significant efficiency gains and synergies. This agreement remains
subject to the approvals of the Ugandan authorities and the pre-
emption rights of the partners.
In April 2016, the Government of Uganda decided to export the
Lake Albert oil through a pipeline (EACOP) via Tanzania to the port
of Tanga. In August 2016, the production licenses for EA-1 and
EA-2 were formally granted. The partners of the Uganda Joint
Venture have launched the FEED (Front End Engineering and
Design) phase for the Upstream and the EACOP pipeline.
Rest of the zone of Africa
TOTAL also holds interests in exploration licenses in South Africa,
Côte d’Ivoire, Kenya, Mauritania, Mozambique and the Democratic
Republic of the Congo, and is negotiating with the authorities with a
view to resuming exploration activities in the Republic of South
Sudan. In July 2016, TOTAL withdrew from the Bemolanga license
in Madagascar.
Middle East and North Africa
In 2016, TOTAL’s production in the zone of the Middle East and
North Africa was 517 kboe / d, representing 21% of the Group’s
total production, compared to 531 kboe / d in 2015 and 438 kboe / d
in 2014. The two main producing countries in this zone in 2016
were the United Arab Emirates and Qatar.
In the United Arab Emirates, the Group’s production was 291 kboe / d
in 2016 compared to 287 kboe / d in 2015 and 127 kboe / d in 2014.
The Group holds, since January 1, 2015, a 10% stake in the Abu
Dhabi Company for Onshore Petroleum Operations Ltd. (ADCO)
concession for a period of 40 years, which follows a previous onshore
concession. This concession covers the 15 main onshore fields of
Abu Dhabi and represents more than half of the Emirate’s production.
TOTAL holds a 75% stake (operator) in the Abu Al Bukhoosh field
and a 13.3% stake in the Abu Dhabi Marine (ADMA) concession,
which operates two of the main offshore fields in Abu Dhabi (Umm
Shaif and Lower Zakum). TOTAL also holds a 15% stake in Abu
Dhabi Gas Industries (GASCO), which produces NGL and
condensates from the associated gas produced by ADCO. In addition,
TOTAL holds 5% of the Abu Dhabi Gas Liquefaction Company
(ADGAS), which processes the associated gas produced by ADMA
in order to produce LNG, NGL and condensates, and 5% of
National Gas Shipping Company (NGSCO), which owns eight LNG
tankers and exports the LNG produced by ADGAS.
TOTAL holds a 24.5% stake in Dolphin Energy Ltd. in partnership
with Mubadala, a company owned by the government of Abu Dhabi,
that markets to the United Arab Emirates gas coming from Qatar.
In October 2016, a long-term gas sale and purchase agreement
(1) Stake held by the company Angola Block 14 BV (TOTAL 50.01%).
(2) Total E&P Congo is owned by TOTAL (85%) and Qatar Petroleum (15%).
(3) Total Gabon is a company under Gabonese law, the shares of which are listed on Euronext Paris and owned by TOTAL (58.28%), the Republic of Gabon (25%) and the public (16.72%).
Registration Document 2016. TOTAL
19
2 Business overview
Upstream segment
was signed with Qatar Petroleum for the supply of an additional
0.3 Bcf / d of gas coming from Qatar to be sold domestically.
The Group also owns 33.33% of Ruwais Fertilizer Industries
(FERTIL), which produces urea (production capacity of 2 Mt / year).
In Qatar, the Group’s production was 134 kboe / d in 2016 and
in 2015, compared to 132 kboe / d in 2014.
In June 2016, TOTAL signed an agreement granting it a 30% stake
in the Al-Shaheen offshore oil field concession for a period of 25
years beginning July 14, 2017. The Al-Shaheen field has been
producing since 1994 and lies offshore 80 km north of Ras Laffan.
Production, which represents approximately half of Qatar’s oil
production (1), is provided by 30 platforms and 300 wells. As of
July 2017, the Al-Shaheen field will be operated by a new operating
company, North Oil Company, held by TOTAL (30%) and Qatar
Petroleum (70%).
TOTAL operates the Al Khalij field (40%, operator) and participates
in the production, processing and exporting of gas from the North
Field through its stakes in the Qatargas 1 and Qatargas 2 LNG
plants and in Dolphin Energy:
– Qatargas 1: TOTAL holds a 20% stake in the upstream block of
Qatargas 1 supplying the three LNG trains of Qatargas 1
(capacity of 10 Mt / y), in which the Group has a 10% interest.
– Qatargas 2: the Group holds a 16.7% stake in train 5, which has
an LNG production capacity of 8 Mt / y. TOTAL offtakes part of the
LNG produced under the 2006 contracts that provide for the
purchase of 5.2 Mt / y of LNG by the Group.
– Dolphin Energy (24.5%): the contract signed in 2001 with Qatar
Petroleum provides for the production and sale of gas and liquids
from the Dolphin block located on the North Field. Raw gas is
processed at the Dolphin plant in Ras Laffan, where the liquids
are extracted. This gas is then routed to the United Arab
Emirates by a 360 km gas pipeline in order to be sold (contract
of 2 Bcf / d over a 25-year period).
In Oman, the Group’s production was 37 kboe / d in 2016,
compared to 36 kboe / d in 2015 and 2014. TOTAL participates in
the production of oil principally in Block 6 (4%) (2), but also in Block
53 (2%). The Group also produces LNG through its investments in
the Oman LNG (5.54%) / Qalhat LNG (2.04%) (3) liquefaction
complex, with an overall capacity of 10.5 Mt / y.
In Algeria, TOTAL’s production was 23 kboe / d in 2016 compared
to 25 kboe / d in 2015 and 20 kboe / d in 2014. All of the Group’s
production in Algeria comes from the Tin Fouyé Tabankort (TFT)
field (35%). In addition, the development of the Timimoun gas field
(37.75%) continued in 2016 with engineering activities, activities
related to the construction of the plant and drilling.
In Iraq, the Group’s production was 18 kboe / d in 2016, stable
compared to 2015, and 12 kboe / d in 2014. TOTAL holds a 22.5%
stake in the development and production contract for the Halfaya
field, located in Missan province. In 2016, the development of
phase 3 of the project (to increase production to 400 kb / d) was the
subject of additional studies. In Iraqi Kurdistan, TOTAL relinquished
four exploration blocks that expired in 2016. An impairment on the
assets in Iraqi Kurdistan was recognized in the 2016 Consolidated
Financial Statements.
In Libya, where security conditions remain unstable, the Group’s
production was 14 kboe / d in 2016 and in 2015, compared to
27 kboe / d in 2014. This production comes from blocks located on
offshore areas 15, 16 and 32 (Al Jurf, 75% (4)), which have not been
affected by security issues. Since the fourth quarter of 2014,
production as well as exploration activities have been stopped
on Mabruk – onshore areas 70 and 87 (75% (4)) – and on the fields
of El Sharara – onshore area 130 and 131 (24% (4)). The production
on the fields of El Sharara – onshore area 129 and 130 (30% (4)) –
resumed at the end of December 2016. Taking into account the
uncertain context in Libya, an impairment on the onshore assets
was recognized in the 2015 Consolidated Financial Statements.
In Yemen, the Group had no production in 2016, compared to
17 kboe / d in 2015 and 84 kboe / d in 2014. Due to the security
conditions in the vicinity of Balhaf, Yemen LNG, in which the Group
holds a stake of 39.62%, stopped its commercial production and
export of LNG in April 2015, when Yemen LNG declared force majeure
to its various stakeholders. The plant is in a preservation mode.
TOTAL is a partner in Block 5 (Marib basin, Jannah license, 15%)
and holds various stakes in four onshore exploration licenses.
In Iran, TOTAL signed a heads of agreement in November 2016
to develop phase 11 of the giant South Pars gas field (expected
production capacity of 370 kboe / d), pursuant to which TOTAL is
expected to operate South Pars 11 with a 50.1% interest alongside
Petropars (19.9%), a wholly-owned subsidiary of the National
Iranian Oil Company (“NIOC”), and the Chinese state-owned
company CNPC (30%). The produced gas is expected to supply
the Iranian domestic market. Two development phases are
planned: the first for the construction of two platforms, 30 wells
and two connecting lines to existing onshore treatment facilities,
and the second for the installation of offshore compression facilities.
This project fits with TOTAL’s strategy of expanding its presence in
the Middle East and growing its gas portfolio by adding a low unit
cost, long plateau gas asset. For further information on the
international sanctions concerning Iran, refer to point 1.9
of chapter 4 (Risk factors).
In Syria, TOTAL has had no production and no activity since
December 2011. The Group has a 100% stake in the Deir Ez Zor
license, which was operated by the joint venture company DEZPC, in
which TOTAL and the state-owned company SPC each have a 50%
share. Additionally, TOTAL is holder of the Tabiyeh contract which came
into effect in 2009. For further information on the international sanctions
concerning Syria, refer to point 1.9 of chapter 4 (Risk factors).
Rest of the zone of the Middle East and North Africa
TOTAL also holds interests in exploration licenses in Cyprus and Egypt.
(1) Company data.
(2) TOTAL holds an indirect 4% stake in Petroleum Development Oman LLC, operator of Block 6, via its 10% stake in Private Oil Holdings Oman Ltd.
(3) TOTAL’s indirect stake via Oman LNG’s stake in Qalhat LNG.
(4) TOTAL’s stake in the foreign consortium.
20
TOTAL. Registration Document 2016
Business overview 2
Upstream segment
Americas
In 2016, TOTAL’s production in the zone of the Americas was
279 kboe / d, representing 11% of the Group’s total production,
compared to 255 kboe / d in 2015 and 247 kboe / d in 2014.
The two main producing countries in this zone in 2016 were
the United States and Argentina.
In the United States, the Group’s production was 86 kboe / d in
2016, compared to 89 kboe / d in 2015 and 78 kboe / d in 2014.
Following the exercise of its preemption right, TOTAL acquired in
November 2016 the 75% stake held by Chesapeake in the Barnett
shale gas assets area located in North Texas, in which the Group
had already a 25% interest since 2009. This transaction provides
for the restructuring of the gas gathering and transportation contracts
with respect to the acquired stake. The planned work relates to well
intervention and well restarts. No wells were drilled in 2016 compared
to 4 in 2015 and 40 in 2014.
TOTAL also has a 25% stake in a joint venture operated by Chesapeake
in the Utica basin (on an acreage mainly located in Ohio) that produces
shale gas. TOTAL was not involved in the drilling of any wells in
2016 compared to 8 in 2015 and approximately 170 in 2014.
Following successive decreases in gas prices in the United States,
impairments on shale gas assets were recognized in the 2014 and
2015 Consolidated Financial Statements.
In the Gulf of Mexico, TOTAL holds interests in the deep offshore
fields Tahiti (17%) and Chinook (33.33%). In Tahiti, the Tahiti Vertical
Expansion (TVEX) project was launched in 2016 in order to extend
the production level of the field.
The TOTAL (40%) – Cobalt (60%, operator) alliance, formed in 2009
for exploration in the Gulf of Mexico, continued its work to delineate
the North Platte discovery.
In Argentina, TOTAL operated approximately 30% (1) of the country’s
gas production in 2016. The Group’s production was 78 kboe / d in
2016 compared to 72 kboe / d in 2015 and 75 kboe / d in 2014.
– In Tierra del Fuego, the Group operates the Carina and Aries
offshore fields (37.5%). The drilling of two additional wells off the
existing platform was completed in 2015. The Vega Pleyade field
(37.5%, operator), where development work was launched in
2013 (with a production capacity of 350 Mcf / d), started
production in February 2016.
– In the Neuquén basin, two pilot projects were launched following
positive initial results of the exploration campaign on its mining
licenses in order to assess its gas and shale oil potential: the first
on the Aguada Pichana Block (27.27%, operator), where
production started mid-2015, and the second on the Rincón la
Ceniza (45.00%, operator) and La Escalonada (45.00%,
operator) Blocks, where production started in July 2016.
In Venezuela, the Group’s production was 47 kboe / d in 2016
compared to 52 kboe / d in 2015 and 2014. TOTAL has stakes in
PetroCedeño (30.32%) and Yucal Placer (69.50%) as well as the
offshore exploration Block 4 of Plataforma Deltana (49%).
Development of the extra heavy oil field of PetroCedeño continues
(39 production wells were drilled in 2016 compared to 47 in 2015
and 86 in 2014), as well as the debottlenecking project for the
water separation and treatment facilities.
In Bolivia, the Group’s production, mainly gas, was 34 kboe / d in
2016, compared to 28 kboe / d in 2015 and 30 kboe / d in 2014.
TOTAL is active on seven licenses: three production licenses at San
Alberto (15%), San Antonio (15%) and Block XX Tarija Oeste (41%);
two licenses in development phase, Aquio and Ipati (50% (2),
operator); and two exploration phase licenses, Rio Hondo (50%)
and Azero (50%, operator of the exploration phase).
– The Incahuasi gas field, located in the Aquio and Ipati Blocks,
started production in August 2016. A second development
phase, which would involve the drilling of three additional wells,
is under consideration.
– TOTAL holds a 50% stake in the Azero exploration license
located in the Andean foothills, which extends over an area of
more than 7,800 km². The exploration period began in 2014.
A geophysical data acquisition campaign was started in the fourth
quarter of 2016 and is expected to be followed by the drilling of a
well in 2018.
In Canada, the Group’s production was 34 kboe / d in 2016
compared to 14 kboe / d in 2015 and 12 kboe / d in 2014. The Group’s
activities were not significantly affected by the wildfires that struck
Alberta in May and June 2016. The Group’s production comes
entirely from the Surmont (50%) project developed by SAGD (3),
the second phase of which was commissioned in 2015. Following
the ramp-up of this phase in 2016 and 2017, the project is expected
to produce a total of approximately 150 kb / d (75 kb / d Group share).
Construction of the Fort Hills oil sands mining project was more
than 80% complete at year-end 2016, and the operator expects
to start production at the end of 2017.
As a result of a full comparative analysis of its global asset portfolio
in the context of lower oil prices, the Group decided in 2015 to
decrease its exposure to Canadian oil sands and reduced its stake
in Fort Hills from 39.2% to 29.2%. An impairment on the part
of the asset sold was recognized in the 2015 Consolidated
Financial Statements.
On the Joslyn (38.25%, operator) and Northern Lights (50% operator)
licenses, the projects were suspended in 2014 and works have
been strictly limited to legal and contractual obligations, and
maintaining safety.
An impairment on the oil sands assets was recognized
in the 2014 Consolidated Financial Statements.
In Brazil, a growth area for the Group, TOTAL acquired in 2013 a
20% stake in the Libra field, located in the Santos basin.
The Libra field is located in the ultra-deep offshore (2,000 m)
approximately 170 km off the coast of Rio de Janeiro, and covers
an area of 1,550 km². In 2014, construction started on a 50 kb / d
capacity FPSO for long-term production testing. At year-end 2016,
in addition to the discovery well, eight wells have been drilled in the
field. Development phase 1 (17 wells connected to an FPSO with a
capacity of 150 kb / d) is expected to start in 2017.
In addition, the Group holds 17 exploration licenses located in the
Foz do Amazonas, Barreirinhas, Ceará, Espirito Santo and Pelotas
(1) Source: Department of Federal Planning, Public Investment and Services, Energy Secretariat.
(2) In 2016, TOTAL reduced its stake in Aquio and Ipati from 60% to 50%.
(3) Steam Assisted Gravity Drainage, production by injection of recycled water vapor.
Registration Document 2016. TOTAL
21
2 Business overview
Upstream segment
basins. An initial exploration well is expected to be drilled by year-
end 2017 in the Foz do Amazonas basin.
In February 2017, TOTAL and Petrobras signed definitive contracts
in relation to a package of upstream and downstream gas and
electricity assets in Brazil and other international opportunities
contemplated by their strategic alliance agreed in December 2016.
As part of this strategic alliance, TOTAL will hold a 22.5% interest in
the concession area named Iara, located in Block BM-S-11, which
is currently under development, as well as a 35% interest and the
operatorship in the Lapa field concession area, located in Block
BM-S-9. The Lapa field entered into production in December 2016.
Petrobras will have the option of taking a 20% stake in the deep-
water exploration Block 2 (Perdido Belt) recently obtained during
the bid round in Mexico. Finally, technical cooperation between the
two companies will be strongly reinforced, in particular by the joint
assessment of the exploration potential of promising areas in Brazil
and by the development of new technologies, in particular in deep-
water. The deal is subject to regulatory approvals, the potential
exercise of preemptive rights by current partners on the Iara
concession and other conditions precedent.
In Mexico, TOTAL was awarded in December 2016 exploration
licenses on three blocks in offshore Mexico, following the country’s
first competitive deep water bid round resulting from the reform of
the energy sector. Located in the Perdido basin, Block 2 (50%,
operator) covers a surface area of 2,977 km² at water depths
ranging from 2,300 m to 3,600 m. Block 1 (33.3%) and Block 3
(33.3%) are located in the Salina basin and cover a surface area of
2,381 km² and 3,287 km², respectively.
Rest of the zone of the Americas
TOTAL also owns interests in exploration licenses in Aruba,
Colombia, French Guyana and Uruguay.
Asia-Pacific
In 2016, TOTAL’s production in the zone of Asia-Pacific was
265 kboe / d, representing 11% of the Group’s overall production,
compared to 258 kboe / d in 2015 and 238 kboe / d in 2014.
The two main producing countries in this zone in 2016 were
Indonesia and Thailand.
In Indonesia, the Group’s production was 140 kboe / d in 2016
compared to 147 kboe / d in 2015 and 130 kboe / d in 2014.
TOTAL’s operations in Indonesia are primarily concentrated on the
Mahakam license (50%, operator), which in particular includes the
Peciko and Tunu gas fields. The Group also has a stake in the Sisi-
Nubi gas field (47.9%, operator). The Mahakam license expires in
December 2017. The Indonesian government has decided to
allocate 100% of the participating interest to Pertamina (operator)
from January 1, 2018 onwards, while giving Pertamina the possibility
to farm out some interests to TOTAL and its current partner, INPEX.
The Group delivers most of its natural gas production to the
Bontang LNG plant. These volumes of gas represented more than
80% of the Bontang plant’s supply in 2016. To this gas production
was added the operated production of oil and condensates from
the Handil and Bekapai fields.
– On the Mahakam license, the works aimed at maintaining
production on the Tunu, Peciko, South Mahakam, Sisi-Nubi and
Bekapai fields continued.
– On the Sebuku license (15%), production from the Ruby gas field
is routed by pipeline for processing and separation at the
Senipah terminal (operated by TOTAL).
– TOTAL also holds stakes in two exploration blocks: Mentawai
(80%, operator) and Telen (100%).
In addition, the Group holds stakes in blocks with no activity
and for which a relinquishment process is underway: South Mandar
(49.3%), South Sageri (100%), South West Bird’s Head (90%,
operator) and South East Mahakam (50%, operator).
In Thailand, the Group’s production was 60 kboe / d in 2016 compared
to 62 kboe / d in 2015 and 60 kboe / d in 2014. This production comes
from the offshore gas and condensate field of Bongkot (33.33%).
PTT (the Thai state-owned company) purchases all of the natural
gas and condensate production. New investments are underway
for maintaining the plateau and responding to gas demand.
In Myanmar, the Group’s production was 21 kboe / d in 2016,
compared to 19 kboe / d in 2015 and 17 kboe / d in 2014.
The Yadana field (31.24%, operator), located on the offshore Blocks
M5 and M6, primarily produces gas for delivery to PTT for use in
Thai power plants. The Yadana field also supplies the domestic
market via an offshore pipeline built and operated by MOGE, a
Myanmar state-owned company. The LCP-Badamyar project,
which includes the installation of the Badamyar field compression
and development platform connected to the Yadana facilities, was
launched in 2014. Drilling at Badamyar began in November 2016.
In 2014, TOTAL was awarded the deep offshore Block YWB
(100%, operator) during the offshore round launched by the local
authorities. The PSC was signed in 2015.
In 2015, the Group sold its stake in the offshore Block M11
(47.06%) and entered exploration license A6 (40%) located in the
deep offshore area west of Myanmar. A first well was drilled in 2015
on which a natural gas discovery has been made and which
requires further evaluation work.
In 2016, TOTAL signed farm-in agreements on the deep offshore
licenses MD-02 (40%), MD-04 (40%) and MD-07 (50%).
In Brunei, TOTAL operates the Maharaja Lela Jamalulalam offshore
gas and condensate field on Block B (37.5%). The Group’s
production was 18 kboe / d in 2016 compared to 15 kboe / d in 2015
and 2014. The gas is delivered to the Brunei LNG liquefaction plant.
Discussions are underway regarding the terms of the unitization of
the northern part of the Maharaja Lela Jamalulalam field with the
Malaysian part of the field.
On the Maharaja Lela South project, a first debottlenecking phase
for the production processing plant was completed in 2015,
increasing production capacity by 20% (from 165 Mcf/ d to 200
Mcf / d). Offshore, the installation of a third platform was completed
at the end of 2015 and the drilling campaign is ongoing. Three wells
started production in 2016.
Studies are currently being conducted to reassess the potential of
the deep offshore exploration Block CA1 (86.9%, operator), which
includes the Jagus East discovery. A well was drilled in 2015, and
has confirmed the connection of the Jagus East field with the
Gumusut-Kakap reservoirs in Malaysia. Discussions regarding the
terms of the unitization of these two reservoirs are underway. They
aim to ensure unified governance of the fields while setting out the
distribution of costs and production between the parties.
22
TOTAL. Registration Document 2016
Business overview 2
Upstream segment
In Australia, where TOTAL has had mining rights since 2005, the
Group’s production was 16 kboe / d in 2016, compared to 4 kboe / d
in 2015 and 2014.
– The Ichthys project (30%) involves the development of a gas and
condensate field located in the Browse Basin. This development
will include a floating platform designed for the production,
processing and export of gas, an FPSO (with condensate
processing capacity of 100 kb / d) to stabilize and export the
condensate, an 889 km gas pipeline and an onshore liquefaction
plant (with 8.9 Mt / y LNG and 1.6 Mt / y LPG capacities) at Darwin.
The LNG has already been sold, mainly to Asian buyers, under
long-term contracts. As per the information provided by the
operator, production is expected to start before the end of 2017.
– Gladstone LNG (GLNG) (27.5%) is an integrated gas production,
transportation and liquefaction project with a capacity of 7.8 Mt / y
from the Fairview, Roma, Scotia and Arcadia fields. Train 1
of the plant started production in 2015 and train 2 in May 2016.
An impairment was recognized in the 2015 and 2016 Consolidated
Financial Statements.
In China, where TOTAL has been operating since 2006, the Group’s
production was 10 kboe / d in 2016 compared to 11 kboe / d in 2015
and 12 kboe / d in 2014. This production comes from the South
Sulige Block (49%) in the Ordos Basin of Inner Mongolia, where the
drilling of tight gas development wells is ongoing.
In Papua New Guinea, where TOTAL has been active since 2012,
the Group owns a stake in Block PRL-15 (40.1%, operator since
2015). The State of Papua New Guinea retains the right to take a
stake in the license (when the final investment decision is made) at
a maximum level of 22.5%. In this case, TOTAL’s stake would be
reduced to 31.1%.
Block PRL-15 includes the two discoveries Elk and Antelope,
growth areas for the Group. A delineation program of these
discoveries is underway. The results of the first wells drilled have
confirmed the level of resources in the Elk and Antelope fields.
In 2015, the location of the various production sites was announced
to the authorities. In 2016, work on the development studies
continued and the Group carried out the environmental and societal
baseline studies in the country that are necessary for the granting
of authorization to start production in the fields.
In 2016, TOTAL signed an agreement to obtain a 35% stake in
exploration license PPL339, located in Gulf Province.
In 2016, the authorities awarded TOTAL (100%) deep offshore
exploration license PPL576 in the Coral Sea. A multi-client seismic
survey was performed on the block during the fourth quarter of 2016.
Rest of the zone of Asia-Pacific
TOTAL also holds interests in exploration licenses in Malaysia and
the Philippines. In Cambodia, TOTAL is working to implement an
agreement entered into in 2009 with the Cambodian government
for the exploration of Block 3 located in an area of the Gulf of
Thailand disputed by the governments of Cambodia and Thailand.
This agreement remains conditioned on the establishment by both
countries of an appropriate contractual framework.
Registration Document 2016. TOTAL
23
2 Business overview
Upstream segment
2.1.1.9. Oil and gas acreage
2016
As of December 31, Undeveloped Developed
(in thousands of acres at year-end) acreage(a) acreage
Europe and Central Asia (excl. Russia) Gross 18,416 719
Net 6,989 154
Russia Gross 3,584 503
Net 666 93
Africa (excl. North Africa) Gross 79,517 806
Net 46,071 200
Middle East and North Africa Gross 37,148 2,606
Net 9,991 371
Americas Gross 24,569 992
Net 13,155 468
Asia-Pacific Gross 44,242 738
Net 27,373 276
Total Gross 207,476 6,364
Net (b) 104,245 1,562
(a) Undeveloped acreage includes leases and concessions.
(b) Net acreage equals the sum of the Group’s equity stakes in gross acreage.
2.1.1.10. Number of productive wells
2016
Gross Net
As of December 31, productive productive
(wells at year-end) wells wells(a)
Europe and Central Asia (excl. Russia) Oil 415 106
Gas 259 87
Russia Oil 232 39
Gas 489 80
Africa (excl. North Africa) Oil 2,091 561
Gas 96 19
Middle East and North Africa Oil 9,385 609
Gas 161 44
Americas Oil 954 322
Gas 3,585 2,230
Asia-Pacific Oil 124 55
Gas 2,802 976
Total Oil 13,201 1,692
Gas 7,392 3,436
(a) Net wells equal the sum of the Group’s equity stakes in gross wells.
24
TOTAL. Registration Document 2016
Business overview 2
Upstream segment
2.1.1.11. Number of net productive and dry wells drilled
As of December 31,
2016
2015
2014
(wells at year-end) Net Net dry Net total Net Net dry Net total Net Net dry Net total
productive wells wells productive wells wells productive wells wells
wells drilled(a)(c) drilled(a)(c) wells drilled(a)(c) drilled(a)(c) wells drilled(a)(c) drilled(a)(c)
drilled(a)(b) drilled(a)(b) drilled(a)(b)
Exploratory
Europe and Central Asia
(excl. Russia) 1.1 1.0 2.1 1.0 4.6 5.6 1.4 0.2 1.6
Russia - - - - - - - 0.3 0.3
Africa (excl. North Africa) 0.7 - 0.7 0.2 2.1 2.3 1.7 2.3 4.0
Middle East and North Africa 0.8 - 0.8 0.3 0.5 0.8 0.6 1.3 1.9
Americas 2.1 0.8 2.9 1.4 0.6 2.0 2.1 0.3 2.4
Asia-Pacific 1.6 - 1.6 2.0 0.9 2.9 1.2 1.1 2.3
Total 6.3 1.8 8.1 4.9 8.7 13.6 7.0 5.5 12.5
Development
Europe and Central Asia
(excl. Russia) 13.6 0.5 14.1 15.7 0.4 16.1 9.0 - 9.0
Russia 18.7 - 18.7 22.9 - 22.9 28.8 0.8 29.6
Africa (excl. North Africa) 14.6 - 14.6 21.4 - 21.4 24.1 1.0 25.1
Middle East and North Africa 49.3 1.1 50.4 36.6 0.6 37.2 36.6 0.2 36.8
Americas 35.4 - 35.4 60.6 0.1 60.7 128.1 0.2 128.3
Asia-Pacific 151.0 - 151.0 86.9 - 86.9 106.0 0.5 106.5
Total 282.6 1.6 284.2 244.1 1.1 245.2 332.6 2.7 335.3
Total 288.9 3.4 292.3 249.0 9.8 258.8 339.6 8.2 347.8
(a) Net wells equal the sum of the Company’s fractional interests in gross wells.
(b) Includes certain exploratory wells that were abandoned, but which would have been capable of producing oil in sufficient quantities to justify completion.
(c) For information: service wells and stratigraphic wells are not reported in this table.
2.1.1.12. Wells in the process of being drilled (including wells temporarily suspended)
As of December 31,
2016
(wells at year-end)
Gross Net(a)
Exploratory
Europe and Central Asia (excl. Russia)
Russia
Africa (excl. North Africa)
Middle East and North Africa
Americas
Asia-Pacific
Total
Other wells (b)
Europe and Central Asia (excl. Russia)
Russia
Africa (excl. North Africa)
Middle East and North Africa
Americas
Asia-Pacific
Total
Total
4
-
18
2
10
5
39
45
111
72
174
46
421
869
908
0.9
-
4.6
0.8
3.5
1.3
11.1
11.8
27.9
21.3
25.2
28.0
116.7
230.9
242.0
(a) Net wells equal the sum of the Group’s equity stakes in gross wells. Includes wells for which surface facilities permitting production have not yet been constructed. Such wells are also
reported in the table “Number of net productive and dry wells drilled”, above, for the year in which they were drilled.
(b) Other wells are developments wells, service wells, stratigraphic wells and extension wells.
Registration Document 2016. TOTAL
25
2 Business overview
Upstream segment
2.1.1.13. Interests in pipelines
The table below sets forth interests of the Group’s entities (1) in the main oil and gas pipelines as of December 31, 2016.
Pipeline(s) Origin Destination (%) interest Operator Liquids Gas
Europe and Central Asia
Azerbaijan
BTC Baku (Azerbaijan) Ceyhan 5.00 X
(Turkey, Mediterranean)
Norway
Frostpipe (inhibited) Lille-Frigg, Froy Oseberg 36.25 X
Heimdal to Brae Condensate Line Heimdal Brae 16.76 X
Kvitebjorn Pipeline Kvitebjorn Mongstad 5.00 X
Norpipe Oil Ekofisk Treatment center Teeside (UK) 34.93 X
Oseberg Transport System Oseberg, Brage and Veslefrikk Sture 12.98 X
Sleipner East Condensate Pipe Sleipner East Karsto 10.00 X
Troll Oil Pipeline I et II Troll B et C Vestprosess 3.71 X
(Mongstad refinery)
Vestprosess Kollsnes (Area E) Vestprosess 5.00 X
(Mongstad refinery)
Polarled Asta Hansteen / Linnorm Nyhamna 5.11 X
The Netherlands
Nogat Pipeline F3-FB Den Helder 5.00 X
WGT K13-Den Helder K13A Den Helder 4.66 X
WGT K13-Extension Markham K13 (via K4 / K5) 23.00 X
United Kingdom
Alwyn Liquid Export Line Alwyn North Cormorant 100.00 X X
Bruce Liquid Export Line Bruce Forties (Unity) 43.25 X
Central Graben Liquid Export Line (LEP) Elgin-Franklin ETAP 15.89 X
Frigg System: UK Line Alwyn North, Bruce and others St. Fergus (Scotland) 100.00 X X
Ninian Pipeline System Ninian Sullom Voe 16.00 X
Shearwater Elgin Area Line (SEAL) Elgin-Franklin, Shearwater Bacton 25.73 X
SEAL to Interconnector Link (SILK) Bacton Interconnector 54.66 X X
Africa (excl. North Africa)
Gabon
Mandji Pipes Mandji fields Cap Lopez Terminal 100.00 (a) X X
Rabi Pipes Rabi fields Cap Lopez Terminal 100.00 (a) X X
Nigeria
O.U.R Obite Rumuji 40.00 X X
NOPL Rumuji Owaza 40.00 X X
Middle East and North Africa
Qatar
Dolphin North Field (Qatar) Taweelah-Fujairah-Al Ain 24.50 X
(United Arab Emirates)
Americas
Argentina
TGN Network (Northern Argentina) 15.38 X
TGM TGN Uruguyana (Brazil) 32.68 X
Brazil
TBG Bolivia-Brazil border Porto Alegre 9.67 X
via São Paulo
TSB Argentina-Brazil Uruguyana (Brazil) 25.00 X
border (TGM) Porto Alegre Canoas
Asia-Pacific
Australia
GLNG Fairview, Roma, Scotia, GLNG (Curtis Island) 27.50 X
Arcadia
Myanmar
Yadana Champ de Yadana field Ban-I Tong (Thai border) 31.24 X X
(a) Interest of Total Gabon. The Group has a financial interest of 58.28% in Total Gabon.
(1) Excluding equity affiliates, except for the Yadana and Dolphin pipelines.
26
TOTAL. Registration Document 2016
Business overview 2
Upstream segment
2.1.2. Gas
The activities of TOTAL in the gas business have a primary objective
to contribute to the growth of the Group by ensuring market outlets
for its current and future natural gas production.
Beyond the production and liquefaction of natural gas (refer to point
2.1.1 of this chapter), TOTAL actively markets natural gas, which is
sold either by pipeline or in the form of Liquefied Natural Gas (LNG)
and develops a downstream portfolio for its trading and shipping
activities, as well as regasification terminals.
In order to enhance the value of the Group’s gas resources, the
activities of Gas also include the trading and marketing of natural
gas, LNG, Liquefied Petroleum Gas (LPG) and electricity as well as
shipping of LNG and LPG. The Group also has stakes in
infrastructure companies (including regasification terminals, natural
gas transportation and storage, and power plants) necessary to
implement its strategy.
2.1.2.1. Purchases, sales and shipping of LNG
A pioneer in the LNG industry, TOTAL is today one of the world’s
leading players (1) in the sector and has sound and diversified
positions both in the upstream and downstream portions of the
LNG chain. LNG development is a key element of the Group’s
strategy, strengthening its positions in most major production zones
and markets.
Through its stakes in liquefaction plants located in Qatar, the United
Arab Emirates, Oman, Nigeria, Norway, Yemen, Angola and
Australia and its gas supply agreement with the Bontang plant in
Indonesia, the Group markets LNG in all global markets. In 2016,
the share of LNG production sold by TOTAL was 11 Mt, compared
to 10.2 Mt in 2015 and 12.2 Mt in 2014. The reduction between
2014 and 2015 was due to force majeure being declared in 2015
for the Yemen LNG (2) joint venture due to the deterioration of
security conditions. The growth of LNG production sold by TOTAL
over the coming years is expected to be ensured by the Group’s
liquefaction projects under construction in Australia and Russia and
by projects currently under consideration, including a new project in
Papua New Guinea and the expansion of the Nigeria LNG plant.
In January 2017, TOTAL finalized the acquisition of approximately 23%
of Tellurian Investments Inc. (“Tellurian”), announced in December 2016,
in order to develop an integrated gas project, from the acquisition of gas
produced at a competitive cost in the United States to the delivery
of LNG to international markets from the Driftwood LNG terminal.
Driftwood LNG is in the engineering design and pre-filing phase.
Long-term Group LNG purchases and sales
TOTAL acquires long-term LNG volumes mainly from liquefaction
projects in which the Group holds an interest, including Qatargas 2
(Qatar), Yemen LNG (Yemen), Nigeria LNG (Nigeria) and Snøhvit
(Norway). These volumes support the expansion of the Group’s
worldwide LNG portfolio.
Since 2009, a growing portion of the long-term volume purchased
by the Group that was initially intended for delivery to North
American and European markets has been diverted to more
buoyant Asian markets.
New LNG sources are expected to support the growth of the Group’s
LNG portfolio, including Ichthys LNG (Australia), Yamal LNG (3)
(Russia), trains 3 and 5 of Sabine Pass LNG (United States) and
Cameron LNG (United States).
TOTAL has entered into several significant long-term agreements
throughout the world for the sale of LNG from the Group’s global LNG
portfolio, notably in China, Indonesia, Japan, South Korea and Spain.
LNG shipping
As part of its LNG transport activities, TOTAL uses two long-term
chartered LNG tankers: since 2006, the Arctic Lady, with a capacity
of 145,000 m³, and since 2011, the Meridian Spirit, with a capacity
of 165,000 m³, primarily for the transport of volumes from Snøhvit
in Norway.
TOTAL continues to develop its fleet. The Group also signed a long-
term charter agreement in 2013 with SK Shipping and Marubeni
for two 180,000 m³ LNG tankers. The vessels will serve to fulfill
the purchase obligations of Total Gas & Power Limited, including
commitments relating to the Ichthys and Sabine Pass projects.
They will be among the largest LNG tankers to navigate the
Panama Canal and are expected to be delivered in 2017 and 2018
respectively.
2.1.2.2. Trading
In 2016, TOTAL continued its strategy downstream from natural
gas and LNG production by developing its trading, marketing and
logistics activities. The aim of this strategy is to optimize access for
the Group’s current and future production to markets supplied
based on long-term contracts and to markets open to international
competition (with short-term contracts and spot sales). Furthermore,
the Group is developing new LNG markets by promoting LNG
import infrastructure projects such as described in point 2.1.2.4,
below. The Group also has operations in electricity trading and the
marketing of LPG and petcoke. Since 2016, TOTAL has also been
active in the marketing of sulfur. In 2016, the Group stopped its
coal trading activities.
The trading teams are located in London, Houston, Geneva and
Singapore.
Gas and electricity
TOTAL is pursuing gas and electricity trading operations in Europe
and North America in order to sell the Group’s production, to supply
its marketing subsidiaries and to support other entities of the Group.
In Europe, TOTAL traded 887 Bcf (25.1 Bcm) of natural gas in
2016, compared to 849 Bcf (24 Bcm) in 2015 and 911 Bcf (25.8 Bcm)
in 2014. The Group also traded 49.1 TWh of electricity in 2016,
compared to 41.1 TWh in 2015 and 44.8 TWh in 2014, mainly from
external sources.
In North America, TOTAL traded 356 Bcf (10.1 Bcm) of natural gas
in 2016 from its own production or from external resources compared
to 441 Bcf (12.5 Bcm) in 2015 and 593 Bcf (16.8 Bcm) in 2014.
(1) Company data, based on upstream and downstream LNG portfolios in 2016.
(2) The Yemen LNG plant has been shut down since April 2015. For more information, refer to point 2.1.1.8 of this chapter.
(3) OAO Yamal LNG, which is developing the Yamal LNG project, is held by PAO Novatek (50.1%), Total E&P Yamal (20%), CNODC (20%), a subsidiary of China National Petroleum Corporation,
and Silk Road Fund (9.9%). For information on international economic sanctions concerning Russia, refer to point 1.9 of chapter 4.
Registration Document 2016. TOTAL
27
2 Business overview
Upstream segment
LNG
TOTAL operates LNG trading activities through both spot sales and
long-term contracts such as those described in point 2.1.2.1
above. Significant sales and purchase agreements (SPAs) have
permitted appreciable development of the Group’s activities in LNG
trading, especially in the Asian markets (China, South Korea, India
and Japan). The 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 2016, TOTAL purchased 51 contractual cargoes under long term
contracts (from Qatar, Nigeria and Norway) and 19 spot or medium
term cargoes, compared to, respectively, 64 and 20 in 2015 and 88
and 7 in 2014. Deliveries from Yemen LNG have been interrupted
since April 2015.
LPG
In 2016, TOTAL traded nearly 5.3 Mt of LPG (propane and butane)
worldwide, compared to 5.8 Mt in 2015 and 5.5 Mt in 2014. Nearly
28% of these quantities come from fields or refineries operated by
the Group. This trading activity was conducted by means of 9 time-
chartered vessels. In 2016, 323 voyages were necessary for
transporting the negotiated quantities, including 217 journeys
carried out by TOTAL’s time-chartered vessels and 106 journeys by
spot-chartered vessels.
Petcoke and sulfur
TOTAL has been trading petcoke produced since 2011 by the Port
Arthur refinery in the United States. 1.1 Mt of petcoke were sold
on the international market in 2016, compared to 1.1 Mt in 2015
and 1.3 Mt in 2014.
In 2014, TOTAL began trading petcoke from the Jubail refinery in
Saudi Arabia. In 2016, 890 kt were sold, compared to 720 kt in
2015 and 100 kt in 2014.
Petcoke is sold to cement producers and electricity producers
mainly in India, as well as in Mexico, Brazil and other Latin
American countries and in Turkey.
In 2016, TOTAL sold 0.7 Mt of sulfur, mainly from its refineries’
production.
2.1.2.3. Marketing
To optimize its position throughout the value chain and to leverage
the synergies from the Group’s other activities, TOTAL has been
developing the business of marketing natural gas and electricity to
end users.
In the United Kingdom, TOTAL markets gas and electricity to the
industrial and commercial segments through its subsidiary Total
Gas & Power Ltd. In 2016, the volumes of gas sold were 143 Bcf
(4.0 Bcm), compared to 140 Bcf (4.0 Bcm) in 2015 and 135 Bcf
(3.8 Bcm) in 2014. Electricity sales were 7.4 TWh in 2016,
compared to 6.0 TWh in 2015 and 5.3 TWh in 2014.
In 2016, the volumes of gas delivered to the industrial and commercial
segments were 4 Bcf (0.1 Bcm) in Belgium (Total Gas & Power
Belgium) and 9 Bcf (0.3 Bcm) in the Netherlands (Total Gas & Power
Nederland B.V.), an increase with respect to previous years, these
two subsidiaries having started marketing gas in 2013.
In 2015, the natural gas marketing subsidiaries in France, Germany,
Belgium and the Netherlands extended their activities to the
marketing of electricity to industrial and commercial consumers.
The volumes sold in 2016 are still modest.
As part of its development strategy for its gas and electricity
marketing activities, TOTAL finalized in September 2016 the
acquisition of Lampiris, the third-largest gas and electricity supplier
in Belgium with more than 750,000 metering points. Lampiris is
also active in France, where it markets gas and electricity to the
residential and commercial segments.
In Spain, TOTAL markets natural gas to the industrial and
commercial segments through Cepsa Gas Comercializadora, in
which it holds a 35% stake. In 2016, the volumes of gas sold
reached 100 Bcf (2.8 Bcm), compared to 105 Bcf (3.0 Bcm) in
2015 and 94 Bcf (2.7 Bcm) in 2014.
In Argentina, the subsidiary Total Gas Marketing Cono Sur oversees
the marketing of gas on behalf of Total Austral, the Group’s
production subsidiary in Argentina. In 2016, the volumes of gas
sold reached 142 Bcf (4.0 Bcm), compared to 128 Bcf (3.6 Bcm)
in 2015 and 131 Bcf (3.7 Bcm) in 2014.
The Group also holds stakes in the marketing companies that are
associated with the LNG regasification terminals located at Altamira
in Mexico and Hazira in India.
2.1.2.4. Gas facilities
Downstream from its natural gas and LNG production activities,
TOTAL holds stakes in natural gas transport networks and LNG
regasification terminals.
Transportation and storage of natural gas
The Group holds stakes in several natural gas transportation
companies located in Brazil and Argentina. These companies are
facing a difficult operational and financial environment in Argentina.
In France, TOTAL sold in February 2016 its stake in Géosud, which
held an interest in Géométhane, a company that owns and
operates several natural gas storage caverns in Manosque.
LNG regasification
TOTAL has entered into agreements to obtain long-term access to
LNG regasification capacity worldwide: in the Americas (United
States, Mexico and Brazil), Europe (France and the United
Kingdom), Asia (India) and Africa (Côte d’Ivoire). This diversified
market presence allows the Group to access new liquefaction
projects by becoming a long-term buyer of a portion of the LNG
produced, thereby strengthening TOTAL’s LNG supply portfolio.
In France, TOTAL operates in the natural gas market through
its marketing subsidiary Total Énergie Gaz, the sales of which were
77 Bcf (2.2 Bcm) in 2016, compared to 84 Bcf (2.4 Bcm) in 2015
and 95 Bcf (2.7 Bcm) in 2014.
In France, TOTAL holds a 27.5% stake in the company Fosmax
and has access to a regasification capacity of 78 Bcf / y (2.25 Bcm / y).
The terminal received 54 vessels in 2016, compared to 46 in 2015
and 2014.
In Germany, Total Energie Gas GmbH, a marketing subsidiary
of TOTAL, marketed 29 Bcf (0.9 Bcm) of gas in 2016 to industrial
and commercial customers, compared to 31 Bcf (0.9 Bcm) in 2015
and 24 Bcf (0.7 Bcm) in 2014.
TOTAL holds a 9.99% stake in Dunkerque LNG, which operates an
LNG receiving terminal with a capacity of 459 Bcf / y (13 Bcm / y).
Trade agreements have also been signed that allow TOTAL to
reserve up to 2 Bcm / y of regasification capacity over a 20-year
term. Commercial operations started on January 1, 2017.
28
TOTAL. Registration Document 2016
Business overview 2
Upstream segment
In the United Kingdom, through its equity interest in the Qatargas
2 project, TOTAL holds an 8.35% stake in the South Hook LNG
receiving terminal with a total capacity of 742 Bcf/ y (21 Bcm / y) and
an equivalent access right to the regasification capacity. The terminal
received 67 cargoes in 2016, compared to 84 in 2015 and 67 in 2014.
In Mexico, TOTAL has reserved 25% of the regasification capacity
of the Altamira receiving terminal, i.e., 59 Bcf/ y (1.7 Bcm / y), through
its 25% stake in Gas del Litoral.
In the United States, TOTAL has reserved a regasification capacity
of approximately 353 Bcf/ y (10 Bcm / y) in the Sabine Pass terminal
(Louisiana) for a 20-year period until 2029. In 2012, TOTAL and
Sabine Pass Liquefaction (SPL) signed agreements allowing SPL to
gradually obtain access to TOTAL’s reserved capacity. Access to
38 Bcf/ y commenced in 2012, growing to 195 Bcf / y from the start-
up of train 3 scheduled in 2017 and plateauing at substantially all of
TOTAL’s capacity from the start-up of train 5 scheduled in 2019. In
return, SPL will pay TOTAL a fee linked to the capacity assigned.
In India, TOTAL holds a 26% stake in the Hazira receiving terminal,
with a regasification capacity of 244 Bcf / y (6.9 Bcm / y). Located in
the Gujarat state, this merchant terminal with operations that cover
both LNG regasification and gas marketing, received 60 vessels
(equivalent) in 2016, compared to 57 in 2015 and 45 in 2014.
In Côte d’Ivoire, a consortium led by TOTAL (34%, operator) has
been assigned responsibility for developing and operating an LNG
regasification terminal in Abidjan with a capacity of 3 Mt / y and a
start-up scheduled in 2018.
In Brazil, as part of its strategic alliance with Petrobras, the
definitive contracts of which were signed in February 2017, TOTAL
expects to proceed with the acquisition from Petrobras of
regasification capacity in the Bahia LNG terminal.
2.1.2.5. 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.
In Abu Dhabi, the Taweelah A1 gas-fired power plant, which is
owned by Gulf Total Tractebel Power Company (TOTAL, 20%),
combines electricity generation and water desalination. The plant, in
operation since 2003, currently has a net power generation capacity
of 1,600 MW and a 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 Thailand, in September 2016 TOTAL sold the 28% stake it held
in Eastern Power and Electric Company Ltd which operates the
Bang Bo gas-fired combined cycle power plant with a capacity of
350 MW.
In Brazil, as part of its strategic alliance with Petrobras, TOTAL
expects to proceed with the acquisition from Petrobras of a 50%
interest in two co-generation plants located in the Bahia area.
2.1.2.6. End of coal production and trading
Following completion of the sale in 2015 of its subsidiary Total Coal
South Africa, the Group ceased its coal production activities. In
addition, in 2016 the Group ended its coal trading activities.
Registration Document 2016. TOTAL
29
2 Business overview
Refining & Chemicals segment
2.2. Refining & Chemicals segment
Refining & Chemicals is a large industrial segment that encompasses
refining, petrochemicals and specialty chemicals operations. It also
includes the activities of Trading & Shipping.
As part of the One Total new organization, Group biomass activities
will be reported within the Refining & Chemicals segment as of financial
year 2017 (refer to point 1.3 of this chapter). They were previously
part of New Energies within the Marketing & Services segment.
Among the
world’s
10 largest
integrated producers (1)
Refining capacity of
2.0 Mb / d
at year-end 2016
One of the leading
traders of oil and
refined products
worldwide
$1.6 billion
of organic
investments (2) in 2016
50,433
employees present
Refinery throughput (3)
2,023
1,965
1,775
1,433
342
Europe
Rest of
world
1,523
1,471
500
494
(kb/d)
2014 (a)
2015 (b)
2016
(a) Excluding the condensate splitters of Port Arthur and Daesan.
(b) Since 2015, Port-Arthur and Daesan condensate splitters are
integrated in the Group’s refining capacity and the 2015 data have
been restated.
Refinery throughput decreased by 3% for the full-year 2016
compared to 2015, notably due to shutdowns in Europe and
the US in the second quarter and the sale of the Schwedt refinery
in Germany in the fourth quarter 2015.
Refining & Chemicals segment financial data
(M$) 2016 2015 2014
Non-Group sales 65,632 70,623 106,124
Adjusted operating income (a) 4,373 5,649 2,739
Adjusted net operating income (a) 4,201 4,889 2,489
of which specialty chemicals 581 496 629
(a) Adjusted results are defined as income at replacement cost, excluding non-recurring items, and excluding the impact of fair value changes.
The ERMI average was 34 $ / t for the full-year 2016, a decrease
of 30% compared to the high level of 2015, in the context of high
inventories of refined products. Petrochemicals continued to benefit
from a favorable environment in 2016.
Adjusted net operating income from the Refining & Chemicals
segment was $4,201 million for the full-year 2016, a decrease of
14% compared to 2015 essentially due to the decrease in refining
margins. Petrochemicals continued to generate good results, notably
due to the strong contribution from the Group’s major integrated
platforms in Asia and the Middle East.
(1) Based on publicly available information, production capacities at year-end 2015.
(2) Organic investments = net investments, excluding acquisitions, divestments and other operations with non-controlling interests (refer to point 3.1 of this chapter ).
(3) Includes share of TotalErg, as well as refineries in Africa and the French Antilles that are reported in the Marketing & Services segment.
30
TOTAL. Registration Document 2016
Business overview 2
Refining & Chemicals segment
2.2.1. Refining & Chemicals
Refining & Chemicals includes the Group’s refining, petrochemicals
and specialty chemicals businesses:
– the petrochemicals business includes base petrochemicals
(olefins and aromatics) and polymer derivatives (polyethylene,
polypropylene, polystyrene and hydrocarbon resins); and
– the specialty chemicals business covers elastomer processing.
The sales of electroplating chemistry (Atotech) and adhesives
(Bostik) activities were completed in early 2017 and in 2015,
respectively.
The volume of its Refining & Chemicals activities places TOTAL
among the top ten integrated chemical producers in the world (1).
The strategy of Refining & Chemicals integrates a constant
requirement of safety, a core value of the Group, and priority given
to respect of the environment. In a context of rising worldwide
demand for oil and petrochemicals driven by non-OECD countries
and the entry of new capacities into the market, the strategy
involves:
– improving competitiveness of refining and petrochemicals
activities by making optimal use of industrial means of
production, concentrating investments on large integrated
platforms and adapting production capacity to changes in
demand in Europe;
– developing petrochemicals in the United States and the Middle
East by exploiting the proximity of advantaged oil and gas
resources in order to supply growth markets, in particular Asia; and
– innovating in low-carbon solutions / products by developing
biofuels and biopolymers as well as materials and solutions
contributing to the energy efficiency of the Group’s customers,
in particular in the automotive market.
2.2.1.1. Refining and petrochemicals
TOTAL’s refining capacity was 2,011 kb / d as of December 31,
2016, compared to 2,247 kb / d at year-end 2015 and 2,187 kb / d at
year-end 2014. TOTAL has equity stakes in 19 refineries (including
nine operated by companies of the Group), located in Europe, the
United States, Africa, the Middle East and Asia.
The Refining & Chemicals segment manages refining operations
located in Europe (excluding TotalErg in Italy), the United States, the
Middle East, Asia and Africa (2) with a capacity of 1,962 kb / j at year-
end 2016, i.e., 98% of the Group’s total capacity.
The petrochemicals businesses are located mainly in Europe, the
United States, Qatar, South Korea and Saudi Arabia. Most of these
sites are either adjacent to or connected by pipelines to Group
refineries. As a result, TOTAL’s petrochemical operations are
integrated within its refining operations, thereby maximizing synergies.
Between 2011 and 2016, the Group reduced its production
capacities in Europe by 20%, thereby fully meeting the target it had
set itself for 2017. The year 2016 saw the continuation of plans to
adapt the Lindsey refinery in the United Kingdom with closure at the
end of September of one of the two atmospheric distillation towers,
and the La Mède refinery in France with stoppage in December of
the crude oil treatment prior to the transformation of the site into a
bio-refinery scheduled for 2018. TOTAL also continued to develop
its major investment project launched in 2013 on the integrated
Antwerp platform in Belgium, which is intended to improve the site’s
conversion rate.
Activities by geographical area
Europe
TOTAL is the largest refiner in Western Europe (3).
Western Europe accounts for 72% of the Group’s refining capacity, i.e.,
1,454 kb / d at year-end 2016, compared to 1,699 kb / d at year-end
2015 and 1,736 kb / d at year-end 2014, in line with the Group’s
target of reducing capacity in Europe.
The Group operates eight refineries in Western Europe (one in
Antwerp, Belgium, five in France in Donges, Feyzin, Gonfreville,
Grandpuits and La Mède, one in Immingham in the United
Kingdom and one in Leuna, Germany) and owns stakes in the
Vlissingen refinery (Zeeland) in the Netherlands and the Trecate
refinery in Italy through its interest in TotalErg.
The Group’s main petrochemical sites in Europe are located in
Belgium, in Antwerp (steam crackers, aromatics, polyethylene) and
Feluy (polyolefins, polystyrene), and in France, in Carling (polyethylene,
polystyrene), Feyzin (steam cracker, aromatics), Gonfreville (steam
crackers, aromatics, styrene, polyolefins, polystyrene) and Lavéra
(steam cracker, aromatics, polypropylene). Europe accounts for 49%
of the Group’s petrochemicals capacity, i.e., 10,383 kt at year-end
2016, compared to 10,394 kt at year-end 2015 and 10,909 kt at
year-end 2014.
– In France, the Group continues to adapt its refining capacity and
to improve its operational efficiency against the backdrop of
structural decline in the demand for petroleum products in Europe.
In 2016, TOTAL continued the significant modernization plan
announced in April 2015 for its refining facilities in France, in
particular at La Mède, with an investment decision made in 2015
for over €200 million to transform the site and in particular create
the first bio-refinery in France. The first step relating to this
investment took place at the end of 2016 when the treatment of
crude oil was ended. The industrial transformation of La Mède
will allow TOTAL to respond to the growing demand for biofuel in
Europe. Other activities, such as a logistics and storage platform,
a solar energy farm, a training center and an AdBlue production
plant (4), will also be developed on the site.
In Donges, the €400 million investment project for the construction
of intermediate feedstock desulfurization units and hydrogen
production units is being considered. This program requires the
re-routing of the railroad track that currently crosses the refinery.
A three-party memorandum of intent to fund this re-routing work
between the state, local authorities and TOTAL was signed at the
end of 2015.
In 2014, the Group completed its industrial plan, launched in
2009, to reconfigure the Gonfreville refinery in Normandy by
commissioning a new diesel desulfurization unit. In addition,
the Group modernized production of specialty products on the
site and decreased the base oil production capacity.
(1) Based on publicly available information, refining and petrochemicals production capacities at year-end 2015.
(2) Earnings related to certain refining assets in Africa and to the TotalErg joint venture are reported in the results of the Marketing & Services segment.
(3) Based on publicly available information, 2015 refining capacities.
(4) Fuel additive intended for road transport and designed to lower nitrogen oxide (NOx) compound emissions.
Registration Document 2016. TOTAL
31
2 Business overview
Refining & Chemicals segment
In petrochemicals, the Group reconfigured the Carling platform
in Lorraine. Steam cracking ended in October 2015. New
hydrocarbon resin and compound polypropylene production
units were commissioned in 2016.
– In Germany, TOTAL operates the Leuna refinery (100%).
In 2015, the Group completed the sale of its stake in the Schwedt
refinery (16.7%) and acquired a majority stake in Polyblend, a
manufacturer of polyolefin compounds that are mainly used in
the automotive industry.
– In Belgium, the Group launched a major project in 2013 to
modernize its Antwerp platform which is expected to be
commissioned in 2017:
- new conversion units in response to the shift in demand towards
lighter petroleum products with a very low sulfur content,
- a new unit to convert part of the combustible gases recovered
from the refining process into raw materials for the
petrochemical units.
has high-level platforms in these markets which are ideally
positioned for growth.
In Saudi Arabia, TOTAL has a 37.5% stake in the company
SATORP (Saudi Aramco Total Refining and Petrochemical Company),
which operates the Jubail refinery. It has been fully operational since
mid-2014 and technical and financial completions were reached in
June 2016. This refinery has an initial capacity of 400 kb / d and is
situated close to Saudi Arabia’s heavy crude oil fields. The refinery’s
configuration enables it to process these heavy crudes and sell
fuels and other light products that meet strict specifications and are
mainly intended for export. The refinery is also integrated with
petrochemical units: a 700 kt / y paraxylene unit, a 200 kt / y
propylene unit, and a 140 kt / y benzene unit.
In China, TOTAL holds a 22.4% stake in WEPEC, a company that
operates a refinery located in Dalian. Discussions are underway to
sell this stake to the Chinese partners of the joint venture.
In addition, the Group is developing a project to enable greater
flexibility on one of the steam-cracking units in order to process
European ethane as from 2017.
The Group is also active through its polystyrene plant in Foshan in
the Guangzhou region and its polystyrene plant in Ningbo in the
Shanghai region, each with a capacity of 200 kt / y.
– In the United Kingdom, TOTAL decreased the capacity of the
Lindsey refinery by half in 2016, reducing it to 5.5 Mt / y. The
investment plan also focused on improving the conversion ratio,
adapting logistics and simplifying the refinery’s organization,
thereby lowering the site’s break-even point.
North America
The Group’s main sites in North America are located in Texas,
at Port Arthur (refinery, steam cracker), Bayport (polyethylene) and
La Porte (polypropylene), and in Louisiana, at Carville (styrene,
polystyrene).
At Port Arthur, TOTAL holds at the same site a 100% interest in a
178 kb / d capacity refinery and a 40% stake in BASF Total
Petrochemicals (BTP), which has a condensate splitter and a steam
cracker. The Group continues to work on strengthening the
synergies between these two plants.
A pipeline connecting the Port Arthur refinery to the Sun terminal in
Nederland was commissioned in 2014 to facilitate access to all
domestic crudes, which are priced advantageously compared to
the international market. Following investments to adapt its
furnaces and the construction of a tenth ethane furnace, which was
commissioned in 2014, BTP’s cracker can produce more than 1
Mt / year of ethylene, including more than 85% from advantaged
feedstock (ethane, propane, butane). BTP thus benefits from
favorable market conditions in the United States. In addition,
in mid-2016, TOTAL completed detailed studies (FEED) for the
construction of a new ethane steam cracker with an ethylene
production capacity of 1 Mt / y on the Port Arthur site, in synergy
with the refinery and BTP steam cracker.
Asia, the Middle East and Africa
TOTAL is continuing to expand in growth areas and is developing
sites in countries with favorable access to raw materials. The Group
In South Korea, TOTAL has a 50% stake in Hanwha Total
Petrochemicals Co., Ltd. (“HTC”), which operates a petrochemical
complex in Daesan (condensate splitter, steam cracker, styrene,
paraxylene, polyolefins). Following the launch in 2014 of new
aromatics (paraxylene and benzene) and polymer units (EVA2), HTC
continued to expand its activities in 2015 with debottlenecking of
the steam cracker and a styrene unit thereby raising its ethylene
production capacity to 1.09 Mt / y and styrene production capacity
to 1.04 Mt / y. At the end of 2016, the EVA2 unit was
debottlenecked. In 2016, the Group benefited from these
investments in a favorable economic environment.
In Qatar, the Group holds interests (1) in two ethane-based steam
crackers (Qapco, Ras Laffan Olefin Cracker – RLOC) and four
polyethylene lines (Qapco, Qatofin), including the Qatofin linear low-
density polyethylene plant in Messaied with a capacity of 550 kt / y
and a 300 kt / y low-density polyethylene line operated by Qapco,
which started up in 2012. The Group is considering the
debottlenecking of these sites to optimize benefits from the
available ethane in the region.
TOTAL holds a 10% stake in the Ras Laffan condensate refinery,
the capacity of which increased to 300 kb / d following completion of
the project to double the refinery’s capacity; the new facilities were
commissioned in late 2016.
In Africa, the Group holds interests in four refineries (Cameroon,
Côte d’Ivoire, Senegal, South Africa) after the sale of its interest
in the refinery in Gabon in 2016. Refining & Chemicals provides
technical assistance for two of these refineries: the Natref refinery
with a capacity of 109 kb / d in South Africa and the SIR refinery
with a capacity of 80 kb / d in Côte d’Ivoire.
(1) TOTAL shareholdings: Qapco (20%); Qatofin (49%); RLOC (22.5%).
32
TOTAL. Registration Document 2016
Business overview 2
Refining & Chemicals segment
Crude oil refining capacity
The table below sets forth TOTAL’s crude oil refining capacity (a):
As of December 31
(kb / d) 2016 2015 2014
Nine refineries operated by Group companies
Normandy-Gonfreville (100%) 253 247 247
Provence-La Mède (100%) - (b) 153 153
Donges (100%) 219 219 219
Feyzin (100%) 109 109 109
Grandpuits (100%) 101 101 101
Antwerp (100%) 338 338 338
Leuna (100%) 227 227 227
Lindsey-Immingham (100%) 109 207 207
Port-Arthur (100%) and BTP (40%) (c) 202 198 169
Subtotal 1,558 1,799 1,770
Other refineries in which the Group has equity stakes (d) 453 448 417
Total 2,011 2,247 2,187
(a) Capacity data based on refinery process unit stream-day capacities under normal operating conditions, less the impact of shutdown for regular repair and maintenance activities
averaged over an extended period of time.
(b) Crude oil processing stopped indefinitely at the end of 2016.
(c) The condensate splitter held by the joint venture between TOTAL 40% and BASF 60% located in Port-Arthur refinery has been taken into account since end 2015.
(d) TOTAL’s share in the 10 refineries in which it has equity stakes as of December 31, 2016 ranging from 10% to 55% (one each in the Netherlands, China, Korea, Qatar, Saudi Arabia,
Italy and four in Africa). In addition to the sale of its participation in the Schwedt refinery in November 2015 and to the sale of its 50% stake in Société Anonyme de la Raffinerie des
Antilles (SARA) in Martinique in May 2015, TOTAL completed in December 2016 the sale of its stake in the SOGARA refinery in Gabon. In addition, the condensate splitter of Daesan in
Korea has been taken into account since end 2015, for a capacity of 79 kb / d (in TOTAL share of 50%).
Refined products
The table below sets forth by product category TOTAL’s net share (a) of refined quantities produced at the Group’s refineries:
(kb / d) 2016 2015 (c) 2014 (d)
Gasoline 324 346 344
Aviation fuel (b) 182 190 148
Diesel and heating oils 795 825 787
Heavy fuels 140 131 134
Other products 430 439 329
Total 1,871 1,931 1,742
(a) For refineries not 100% owned by TOTAL, the production shown is TOTAL’s equity share in the site’s overall production.
(b) Avgas, jet fuel and kerosene.
(c) Since 2015, the condensate splitters of Port Arthur and Daesan are integrated in the refining capacities and 2015 data have been restated.
(d) Excluding the condensate splitters of Port Arthur and Daesan.
Utilization rate
The tables below set forth the utilization rate of the Group’s refineries:
On crude and other feedstock (a) (b) 2016 2015 (c) 2014 (d)
France 81% 81% 77%
Rest of Europe 92% 94% 88%
Americas 97% 111% 106%
Asia and the Middle East 86% 80% 50%
Africa 85% 84% 77%
Average 87% 88% 81%
(a) Including equity share of refineries in which the Group has a stake.
(b) Crude + crackers’ feedstock / distillation capacity at the beginning of the year.
(c) Since 2015, the condensate splitters of Port Arthur and Daesan are integrated in the refining capacities and 2015 data have been restated.
(d) Excluding the condensate splitters of Port Arthur and Daesan.
On crude (a) (b) 2016 2015 2014
Average 85% 86% 77%
(a) Including equity share of refineries in which the Group has a stake.
(b) Crude / distillation capacity at the beginning of the year.
Registration Document 2016. TOTAL
33
2 Business overview
Refining & Chemicals segment
Petrochemicals: breakdown of TOTAL’s main production capacities
As of December 31
(in thousands of tons) 2016 2015 2014
Europe North Asia and Worldwide Worldwide Worldwide
America Middle East (a)
Olefins (b)
7,791
Aromatics (c) 2,903 1,512 2,429 6,844 6,783 6,773
Polyethylene 1,120 445 773 2,338 2,338 2,338
Polypropylene 1,350 1,200 400 2,950 2,950 2,950
Polystyrene 637 700 408 1,745 1,745 1,805
Other (d) 63 63 63 63
1,571
7,433
1,525
4,373
7,468
Total 10,383 5,382 5,643 21,407 21,312 21,720
(a) Including interests in Qatar, 50% of Hanwha Total Petrochemicals Co. Ltd. and 37.5% of SATORP in Saudi Arabia.
(b) Ethylene + propylene + butadiene.
(c) Including monomer styrene.
(d) Mainly monoethylene glycol (MEG) and cyclohexane.
Development of new avenues for the production
of fuels and polymers
TOTAL is exploring new ways to monetize carbon resources,
conventional or otherwise (natural gas, biomass, waste). These projects
are part of the Group’s commitment to building a diversified energy
mix generating lower CO2 emissions.
As regards biomass development, TOTAL is pursuing several
industrial and exploratory projects. The scope of these developments
is broad since they entail defining access to the resource (nature,
sustainability, location, supply method, transport), the nature of the
molecules and target markets (fuels, petrochemicals, specialty
chemicals) and the most appropriate, efficient and environmentally
friendly conversion processes.
Biomass to fuels
In Europe, TOTAL produces biofuel, notably hydrotreated vegetable
oils (HVO) for incorporation into diesel, and ether produced from
ethanol and isobutene (ETBE) for incorporation into gasoline.
In 2016, the Group blended, at its European refineries and
several depots (1), 424 kt of ethanol (2) in gasoline, and 1,872 kt
of fatty-acid-methyl-ester (FAME) or HVO (2) in diesel.
In addition, as part of the La Mède refinery transformation program
announced in 2015, the Group will construct the first bio-refinery in
France. Work is expected to begin in 2017 with a view to reaching
a production capacity of almost 500 kt / y of biofuel, mainly high-quality
biodiesel (HVO), but also biojet and petrochemical bio-feedstocks.
This will therefore allow the La Mède plant to meet the growing
biofuel market. Furthermore, the Group entered into a partnership
in 2016 with Suez to increase the supply and the recycling of used
oil, which could then be processed at La Mède.
In 2016, TOTAL engaged in extensive research activity targeting the
emergence of new biofuel solutions. Construction now underway
as part of the BioTFuel consortium of a pilot demonstration unit on
the Dunkirk site is expected to lead to commencement in 2017 of a
gasification test program for conversion of biomass into fungible,
sulfur-free fuels.
Biomass to polymers
TOTAL is actively involved in developing activities associated
with the conversion of biomass to polymers. The main area of focus
is developing drop-in solutions for direct substitutions, by incorporating
biomass into the Group’s existing units, for example HVO or other
hydrotreated vegetable oil co-products in a naphtha cracker, and
developing the production of new molecules such as polylactic acid
polymer (PLA). Thus, in November 2016, the Group signed a
cooperation agreement with Corbion to create a joint venture for
construction of a PLA production site in Thailand.
2.2.1.2. Specialty chemicals
As part of active management of its business portfolio, TOTAL
completed in early 2017 the sale of its subsidiary Atotech,
specialized in electroplating technologies. In 2016, Atotech had
almost 4,000 employees with 18 production sites in the world and
its sales were €1 billion ($1.1 billion). In 2015, TOTAL also completed
the sale of its subsidiary Bostik, specialized in adhesive chemicals.
Hutchinson actively contributes to the mobility of the future by
addressing its customers’ needs (automotive, aerospace and major
industries – defense, rail, energy) in order to offer a greater level of
safety, comfort and energy performance, as well as more responsible
solutions.
The company draws on wide-ranging expertise and deploys its
know-how from the custom design of materials to the integration of
connected solutions: structural sealing solutions, precision sealing,
management of fluids, materials and structures, anti-vibration
systems and transmission systems.
To serve its customers, Hutchinson had 89 production sites across
the world (of which 56 are located in Europe and 18 in North America)
and 34,200 employees at December 31, 2016.
Hutchinson’s sales were €4.0 billion ($4.5 billion) in 2016, up 5.4%
compared to 2015 and 16.7% compared to 2014. This growth was
due to outperformance on the world’s automotive markets, especially
among German and Asian manufacturers. In 2016, Hutchinson also
performed well on its other markets, particularly commercial aircrafts.
(1) Excluding the Group’s participation in TotalErg.
(2) Including ethanol from ETBE (ethyl-tertio-butyl-ether) expressed in ethanol equivalent and HVO expressed in FAME equivalent. These equivalents are defined according to the EU Renewable
Energy Directive.
34
TOTAL. Registration Document 2016
Business overview 2
Refining & Chemicals segment
2.2.2. Trading & Shipping
2.2.2.1. Trading
Trading & Shipping focuses on serving the Group’s needs by:
– selling and marketing the Group’s crude oil production;
– providing a supply of crude oil for the Group’s refineries;
– importing and exporting the appropriate petroleum products for
the Group’s refineries to be able to adjust their production to the
needs of local markets;
– chartering appropriate ships for these activities; and
– undertaking trading on various derivatives markets.
In addition, with its acquired expertise, Trading & Shipping
is able to extend its scope beyond the aforementioned activities.
Trading & Shipping conducts its activities worldwide through
various wholly-owned subsidiaries established on strategically
important oil markets in Europe, Asia and North America.
In 2016, crude oil prices reached their lowest point in January and
then strengthened progressively, while remaining low, with high
volatility and a reduction in the contango (1) structure of certain oil
indexes compared with 2015. Significant storage capacities in
different parts of the world, made available through leases,
contributed to the strong performance of Trading’s activities. The
Group’s offices in Houston and Singapore also contributed to the
growth of results by expanding their respective activities.
TOTAL is one of the world’s largest traders of crude oil and
petroleum products on the basis of volumes traded. The table
below presents Trading’s worldwide crude oil sales and supply
sources and petroleum products sales for each of the past three
years. Trading of physical volumes of crude oil and petroleum
products amounted to 5.6 Mb / d in 2016, compared to 5.2 Mb / d in
2015 and to 4.9 Mb / d in 2014.
Trading’s crude oil sales and supply and petroleum products sales (a)
(kb / d) 2016 2015 20 14
Group’s worldwide liquids production 1,271 1,237 1,034
Purchased from Exploration & Production 1,078 935 791
Purchased from external suppliers 2,444 2,336 2,227
Total of Trading’s crude supply 3,522 3,271 3,018
Sales to Refining & Chemicals and Marketing & Services segments 1,590 1,668 1,520
Sales to external customers 1,932 1,603 1,498
Total of Trading’s crude sales 3,522 3,271 3,018
Petroleum products sales by Trading 2,105 1,961 1,854
(a) Including condensates.
Trading 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 and options) with the
aim of adjusting its exposure to fluctuations in the price of crude oil
and petroleum products. These transactions are entered into with a
wide variety of counterparties.
For additional information concerning derivatives transactions by
Trading & Shipping, see Note 16 (Financial instruments related to
commodity contracts) to the Consolidated Financial Statements
(refer to point 7 of chapter 10).
All of TOTAL’s Trading activities are subject to strict internal controls
and trading limits.
2.2.2.2. Shipping
The transportation of crude oil and petroleum products necessary
for the activities of the Group is coordinated by Shipping. These
requirements are fulfilled through balanced use of the spot and
time-charter markets. The additional transport capacity can also be
used to transport third-party cargo. Shipping maintains a rigorous
safety policy, mainly through a strict selection of chartered vessels.
In 2016, Shipping chartered approximately 2,900 voyages (relatively
stable compared to 2015 and 2014) to transport 131 Mt of crude oil
and petroleum products, compared to 126 Mt in 2015 and 122 Mt
in 2014. On December 31, 2016, the mid- and long-term chartered
fleet amounted to 59 vessels (including 8 LPG vessels), compared
to 55 in 2015 and 48 in 2014. None of these vessels is single-hulled
and the average age of the fleet is approximately six years.
Like a certain number of other oil companies and ship owners, the
Group uses freight rate derivative contracts to adjust Shipping’s
exposure to freight rate fluctuations.
(1) Contango is the price structure where the prompt price of an index is lower than the future price.
Registration Document 2016. TOTAL
35
2 Business overview
Marketing & Services segment
2.3. Marketing & Services segment
The Marketing & Services segment includes worldwide supply and
marketing activities in the oil products and services field as well as
the activity of New Energies.
As part of the One Total new organization, New Energies has been
reorganized. As from financial year 2017, solar activities will be
reported within the new Gas, Renewables & Power segment, while
biomass activities will be reported within the Refining & Chemicals
segment (refer to point 1.3 of this chapter).
Historically among
the largest
marketers in Western
Europe (1)
Leading
marketer
in Africa (2)
16,461
branded service stations (3)
at year-end 2016
$1.4 billion
of organic investments (4)
in 2016
32,036
employees present
2016 petroleum products sales (a)
1,769
1,818
1,793
1,100
1,092
1,093
Europe
Reste of
world
669
726
700
(kb/d)
2014
2015
2016
(a) Excludes trading and refining bulk sales,
including share of TotalErg.
In 2016, refined product sales decreased slightly compared to
2015, essentially due to the sale of the retail network in Turkey.
Excluding portfolio effects, retail network sales increased by nearly
4%. Sales of land-based lubricants also increased by nearly 4%.
Marketing & Services segment financial data
(M$) 2016 2015 2014
Non-Group sales 69,421 77,887 106,509
Adjusted operating income (a) 1,818 2,098 1,709
Adjusted net operating income (a) 1,586 1,699 1,254
including New Energies 26 108 10
(a) Adjusted results are defined as income using replacement cost, adjusted for special items, excluding the impact of changes for fair value.
Adjusted net operating income from the Marketing & Services segment was $1,586 million for the full-year 2016, a 7% decrease compared to
2015. Excluding New Energies, which was particularly high in 2015 due to the delivery of the Quinto solar farm in the United States, net
operating income was stable despite asset sales.
(1) Data published by the companies based on quantities sold.
(2) PFC Energy and Company data 2015.
(3) Total, Total Access, Elf, Elan and AS24, including service stations owned by third parties.
(4) Organic investments = net investments, excluding acquisitions, divestments and other operations with non-controlling interests (refer to point 3.1 of this chapter).
36
TOTAL. Registration Document 2016
Business overview 2
Marketing & Services segment
2.3.1. Marketing & Services
The Marketing & Services (M&S) business segment is dedicated to
the development of TOTAL’s petroleum products distribution
activities and related services throughout the world. Present in more
than 150 countries (1), M&S conveys TOTAL’s brand image to its
customers, both individual and professional. TOTAL’s brand
renown, underpinned by advertising campaigns, substantial
investment in R&D and a digital transformation plan, all contribute
to building M&S’s highly visible, innovative and assertive lineup of
commercial solutions for its customers. Close proximity to its
customers is a core tenet of M&S’s strategy and the Group aims to
promote this proximity in all of its business segments. Finally, M&S
is committed to supplying environmentally responsible solutions.
M&S pursues a proactive, primarily organic, development strategy.
M&S is consolidating its market share in its key western European
markets (2), where it has reached critical mass and is one of the
main distributors of petroleum products (3). M&S continues to
develop its activities in high-growth areas, particularly in Africa
where it is the market leader (4), and in Asia. In 2016, organic
investments were approximately $1 billion, stable compared to
2015, and focused mainly on network development.
M&S is implementing an active portfolio management strategy.
In 2016, it completed the sale of its network of service stations
in Turkey and, with its partner Erg, started the process of selling
the joint venture TotalErg in Italy. In 2014 and 2015, M&S disposed
of several assets to optimize its position in Europe (sales of the
Liquefied Petroleum Gas (LPG) marketing subsidiaries in France
and Hungary and the LPG / commercial sales activity in Switzerland).
M&S also disposed of low-growth mature assets (stakes in the
Société Anonyme de la Raffinerie des Antilles and the Société
Réunionnaise de Produits Pétroliers). In parallel, M&S made
targeted acquisitions. In 2016, M&S announced the acquisition of
assets in East Africa (Kenya, Uganda and Tanzania), and in 2014
and 2015, it completed acquisitions in Pakistan, Vietnam and the
Dominican Republic.
M&S’s three main business areas are:
– Retail, with a network of more than 16,000 service stations.
The Group is focusing on its key markets in Western Europe and
continues to develop in Africa, where it is already present in more
than 40 countries. In addition to the sale of high-performance
fuels and petroleum products, M&S captures new customers
and builds customer loyalty by diversifying its offer in its stores
and service stations (e.g., car wash, catering, car servicing)
through partnerships with other leading brands. The aim of these
additional offerings is to support customers in their mobility by
providing them with all of the products and services they need at
“one stop shop” service stations. In 2016, excluding the portfolio
effect, retail saw a 4% growth in sales compared to 2015.
– The production and sales of lubricants, a highly profitable sector
that accounts for more than one third of M&S’s results (5), and in
which TOTAL intends to pursue growth. M&S has entered into
commercial and technological partnerships with European and
Asian car manufacturers. With its 41 blending plants, including
the plant in Singapore commissioned in 2015, and its R&D
investments, M&S is able to supply high-quality lubricants to its
customers worldwide. In 2016, inland (6) lubricants sales increased
by nearly 4% compared to 2015.
– The distribution of products and services for professional
markets. TOTAL is a partner of choice and a local supplier of
products (mainly bulk fuels, aviation fuel, special fluids, LPG,
bitumens, heavy fuels and marine bunkers) and a solution
provider that helps its customers to manage all their energy
needs with services such as the maintenance of on-site facilities
and the optimization of consumption.
As part of its activities, M&S holds interests in four refineries in Africa,
following the sale in 2016 of its minority interest in a refinery in
Gabon, and one in Europe through its 49% stake in TotalErg in Italy.
To meet its customers’ current and future needs, M&S has
strengthened its efforts in R&D, which increased by 19% between
2014 and 2016, in order to design and develop new product
ranges, in particular for the engine technologies of the future.
2.3.1.1. Sales of petroleum products
The following table presents M&S petroleum products sales (7) by
geographical area:
(kb / d) 2016 2015 2014
Europe 1,093 1,092 1,100
France 541 541 547
Europe, excluding France 552 551 553
Africa (excl. North Africa) 419 423 380
Middle East 55 85 77
Asia-Pacific (a) 150 148 134
Americas 76 70 78
(a) Including Indian Ocean islands.
For data on biofuels, refer to point 2.2.1.1 of this chapter.
2.3.1.2. Service stations
The table below presents the geographical distribution of the
Group’s branded (a) service stations:
As of December 31 2016 2015 2014
Europe (b) 8,309 8,391 8,557
of which France 3,593 3,667 3,727
of which TotalErg 2,585 2,608 2,749
Africa (excl. North Africa) 4,167 4,058 3,991
Middle East 809 816 796
Asia-Pacific (c) 1,790 1,531 1,033
Americas 585 464 452
AS24 network (dedicated
to heavy-duty vehicles) 801 763 740
Total 16,461 16,023
15,569
(a) TOTAL, Total Access, Elf, Elan and AS24. Including service stations not owned by TOTAL.
(b) Excluding AS24 network.
(c) Including Indian Ocean islands.
(1) Including via national distributors.
(2) France, Germany, Belgium, Luxembourg and the Netherlands.
(3) Publicly available information, based on quantities sold in 2015.
(4) PFC Energy and Company data 2015.
(5) Adjusted net operating income of M&S, excluding New Energies.
(6) For non-maritime transportation and industrial applications.
(7) In addition to M&S’s petroleum product sales, the Group’s sales also include international Trading (1,690 kb / d in 2016, 1,538 kb / d in 2015 and 1,385 kb / d in 2014) and bulk refining sales
(700 kb / d in 2016, 649 kb / d in 2015 and 615 kb / d in 2014).
Registration Document 2016. TOTAL
37
2 Business overview
Marketing & Services segment
2.3.1.3. Main activities by geographical area
Africa & the Middle East
Europe
Retail
In Western Europe, the Group aims to optimize its activities in the
countries where it has a large market share, enabling a high level of
profitability. It has a retail network of more than 8,300 service stations (1)
mainly spread throughout France, Belgium, the Netherlands,
Luxembourg, Germany and Italy. TOTAL is regaining market shares
in Western Europe by developing an innovative and diversified line
of products and services.
– In France, the Group’s dense retail network includes over 1,500
TOTAL-branded service stations, nearly 700 Total Access
stations (service station concept combining low prices and
premium TOTAL-branded fuels and services) and almost 1,300
Elan service stations, which are mainly located in rural areas.
Since its launch in 2011, Total Access has led to the Group
regaining nearly 3% (2) market share.
– In Germany, where TOTAL is the country’s fourth-largest operator (3)
with nearly 1,200 service stations at the end of 2016, and in
Belgium, where TOTAL is the country’s biggest operator (3) with
more than 530 service stations, the Group’s market share has
increased by almost 1% in three years.
– In Italy, TOTAL and its partner Erg have started the process of
selling the joint venture TotalErg, in which the Group has a 49%
stake. TotalErg’s network includes nearly 2,600 service stations.
TOTAL will continue to have a presence in the country through its
marketing of lubricants and jet fuel.
– In the overall perimeter and bolstered by a network of more than
800 branded service stations, AS24 targets the heavy-duty
vehicles segment in 28 countries and seeks continued growth
primarily through expansion in the Mediterranean basin and
Eastern Europe and through its toll payment card service, which
covers nearly 20 countries.
TOTAL is also a major player in the European market for fuel
payment cards with nearly 3.3 million cards issued, enabling
companies of all sizes to improve fuel cost management and
access an ever-increasing number of services.
Lubricants
TOTAL is pursuing its development in high-growth segments
throughout Europe. It relies mainly on its lubricant production sites
in Rouen (France) and Ertvelde (Belgium). In 2016, TOTAL launched
the construction of a lubricant production site in Russia.
Professional markets and other specialties
TOTAL produces and markets specialty products in Europe, and
relies on its industrial facilities to produce special fluids (Oudalle in
France) and bitumen (Brunsbüttel in Germany).
In France, TOTAL promotes a large fuel and service offering to
120,000 vehicle fleet managers. As for fuel sales (heavy fuels,
domestic fuels, etc.), they reach nearly one million customers.
Retail
TOTAL is the leading marketer of petroleum products in Africa.
The Group achieved an average market share of nearly 18% (4) in
retail in 2016, an increase of 1% compared to 2014. It is pursuing
a strategy of profitable growth and increased market share in Africa.
In the zone Africa & the Middle East, the retail network has made of
approximately 5,000 service-stations in 2016, spread across more
than 40 countries. The Group operates major networks in South
Africa, Nigeria, Egypt and Morocco.
As part of its dynamic asset management policy, TOTAL finalized in
2016 the disposal of its network of 450 service stations in Turkey,
while retaining its brand and lubricants business in the country.
In order to achieve its goal of gaining market share in all of the
countries where it operates in Africa & the Middle East, and in
addition to its organic growth strategy, M&S acquires independent
petroleum networks in certain countries. The acquisition underway
of assets in Kenya, Uganda and Tanzania will strengthen the supply
and logistics system in the region and speed up the growth of the
service station network, particularly in Tanzania.
M&S is diversifying its offering at service stations and is deploying
a range of innovative products and services through partnerships
in catering and stores, as well as in digital solutions.
Lubricants
TOTAL continues to pursue a growth strategy in lubricants in
Africa & the Middle East. M&S relies in particular on its lubricant
production plants in Dubai, Egypt and Saudi Arabia. In Africa,
TOTAL is the leading distributor of lubricants with 16.5% (5) market
share.
Professional markets and other specialties
TOTAL acts as a leading partner, notably for mining customers in
Africa by delivering complete supply chain and management
solutions for fuels and lubricants.
M&S also offers a diverse range of products and services aimed at
professionals in Africa. Among the different products, the bitumen
offering meets the requirements of the public works sector in Africa
with a variety of packaging options, and special fluids form an
integral part of development projects in the petroleum, mining and
agricultural sectors. Industrial customers also receive support from
TOTAL for the maintenance of on-site facilities through lubricants in
service analysis, among others.
Asia-Pacific
At year-end 2016, TOTAL was present in 20 countries in the Asia-
Pacific zone and continued to strengthen its position in the distribution
of fuels and specialty products.
Retail
TOTAL operates service station networks in China, Pakistan, the
Philippines, Cambodia and Indonesia, and is a significant player in
the Pacific islands. The Group network continued to expand, and
reached nearly 1,630 service stations at year-end 2016, an increase
of nearly 800 compared to 2014.
(1) Excluding AS24 network.
(2) Company data between 2011 and 2016.
(3) Source: IHS 2015.
(4) Retail market share in Africa in the countries where the Group operates, based on 2015 publicly available information on quantities sold.
(5) Company data.
38
TOTAL. Registration Document 2016
Business overview 2
Marketing & Services segment
– In Pakistan, TOTAL’s acquisition in 2015, with its local partner
PARCO, of Chevron’s distribution network, has increased the
TOTAL network by 500 service stations and strengthened the
Group’s distribution and logistics capacities in Pakistan.
– In the Philippines, TOTAL doubled its market share (from 3% to
6% (1)) in retail through the creation of a joint venture with its local
operator FilOil in 2016. TOTAL has thus increased its retail
network by 200 service stations.
– In China, TOTAL was operating more than 230 services stations
at year-end 2016 through a wholly-owned subsidiary and two
joint ventures with Sinochem, one of which obtained a
commercial wholesales license in 2016 that will enable it to
expand its activities.
Lubricants
TOTAL’s share of the inland lubricant market reached 3.6% in 2016
in this region. One of the Group’s largest lubricant production plants
started up in mid-2015 in Singapore in order to support M&S’s
ambitions for growth in the region. It has a production capacity
of 310 kt / year.
TOTAL lubricant sales in China increased in 2016. To support its
ambitions for growth in China and in the region, TOTAL opened a
grease production site in Tianjin (China) in 2016.
Professional markets and other specialties
TOTAL continues to strengthen its presence in the specialties
markets in the region, in particular in Vietnam, where the Group
confirmed its position as the number two player (1) in the LPG
market, and in India.
Americas
In retail, the Group operates in several Caribbean islands with
nearly 600 service stations at year-end 2016. In January 2016,
TOTAL strengthened its position with the acquisition of a majority
stake of 70% in the fuel marketing leader in the Dominican
Republic, which operates a network of 130 service stations,
commercial sales and lubricants activities.
In lubricants and other specialty products, TOTAL is pursuing
in the overall region its strategy of growth, mainly in lubricants,
aviation fuel and special fluids. To strengthen its special fluids
business, the Group has built a special fluids production plant in
Bayport, Texas, which has been operational since early 2016.
2.3.1.4. Products and services developments
The Group develops technologically advanced products, some of
which are formulated for use in motor sports before being generally
released on the market. In 2016, TOTAL continued its technical
partnerships, in particular with Renault Sport Racing, the PSA
group (WRC, WTCC and Rallycross) and Aston Martin Racing.
These partnerships demonstrate TOTAL’s technical excellence in
the formulation of fuels and lubricants under extreme conditions
and subject to requirements to reduce fuel consumption. At the end
of 2016, TOTAL and PSA (Peugeot, Citroën and DS) renewed their
partnership for five years in the areas of R&D, business relations
with the three PSA brands and motor sports.
In order to respond to developments in world markets and prepare
for tomorrow’s growth opportunities, TOTAL develops products and
services in collaboration with its customers that optimize their
energy bills, such as the products under the Total Ecosolutions
label, which include Excellium fuels and Fuel Economy lubricants
(refer to point 2.3.4 of chapter 7). These solutions include a
diversified range of energy supplies (fuels, gas, solar and wood
pellets) as well as consumption auditing, monitoring and
management services.
Looking beyond energy services, TOTAL also relies on digital
innovations to develop new offers for its customers. This is how
TOTAL enables money transfers and payment by smartphone in
Africa, or online domestic heating oil orders in France. The Total
Services mobile application has been deployed in 43 countries, and
the customer relationship program uses a central tool to send
personalized offers to over one million customers in 10 countries.
For its professional customers, M&S has launched Bitume Online in
France, a platform that offers bitumens at fixed rates, and a portal
for lubricant distributors deployed in some 20 countries (including in
the United Arab Emirates), among others.
For the longer term, TOTAL also supports the development of
alternatives to traditional fuels, and M&S intends to expand in these
segments:
– Electro-mobility: in 2016, TOTAL’s European subsidiaries
continued the developments and demonstrations of the distribution
of electricity intended for electric vehicles. TOTAL will have in 2017
approximately 100 service stations equipped with higher power
charging points in Belgium, the Netherlands, Luxembourg,
France and Germany. Service stations on major routes in Europe
are due to be fitted with super-fast charging stations over the
coming years. In the short term, a new offering will be added to
Total cards to give professional customers access to the largest
public charging networks in Europe.
– Gas for transport: TOTAL has approximately 450 stations that
deliver natural gas vehicles (NGV) in Asia, Africa and Europe, and
intends to develop several hundred additional stations, mainly in
Europe, over the coming years.
– Hydrogen: with its partners Air Liquide, Daimler, Linde, OMV and
Shell, TOTAL created in 2015 the H2 Mobility Germany joint
venture, which aims to deploy some 400 hydrogen stations in
Germany, with a forecast of more than 250,000 fuel cell vehicles
being in circulation by 2025. The majority of the hydrogen
stations also developed through the Clean Energy Partnership in
Germany (target of 50 stations in 2017, 13 of which are in the
TOTAL network) will be incorporated into the H2 Mobility
Germany joint venture.
2.3.2. New Energies
As part of its ambition to become the responsible energy major,
the Group is developing its activities in low-carbon and renewable
energies businesses. Facing the challenge of climate change, TOTAL
positions itself on an energy mix, with decreasing carbon intensity
that takes into account the 2°C scenario of the IEA.
(1) Company data.
Registration Document 2016. TOTAL
39
2 Business overview
Marketing & Services segment
The Group is active along the entire solar photovoltaic value chain,
with SunPower and Total Solar, from the production of photovoltaic
cells to the development of solar farms or installation of solar
facilities in private households.
Over the longer term, it pursues a second axe of development with
the transformation of biomass through biotechnology, which aims
to develop new biosourced product solutions for transportation
and chemicals.
TOTAL actively follows developments in other renewable energies.
In this context, the Group owns a farm of four wind turbines (10 MW
near Dunkirk, France) and a stake in marine energy (9.99% in the
company Scotrenewables Tidal Power, Scotland).
The acquisition of Saft Groupe S.A. in 2016 is consistent with this
ambition. The Group plans to pursue its investments in low-carbon
businesses.
2.3.2.1. Solar energy
TOTAL acquired a majority share in SunPower in 2011. In addition,
the Group develops and holds interests via Total Solar in solar
farms and is pursuing R&D investments in the photovoltaic field
through several industrial and academic partnerships.
The steady reduction in photovoltaic electricity costs opens an
ever-growing number of markets. However, in some areas,
achievement of the full potential of this technology requires the
support of public programs.
SunPower
TOTAL holds 56.73% of SunPower as of December 31, 2016,
an American company listed on NASDAQ and based in California.
As an integrated player, SunPower operates over the entire solar
power value chain. Upstream, it designs, manufactures and
supplies cells as well as the highest-efficiency solar panels on the
market. Downstream, SunPower is active in the design and
construction of large turnkey power plants and in the marketing of
integrated solar solutions for decentralized electricity generation.
Upstream, SunPower manufactures all its cells in Asia (Philippines,
Malaysia) and has a nominal production capacity of approximately
1,050 MW / y at year-end 2016. Through its significant R&D
program, the company is constantly optimizing its production process
to reduce costs while maintaining its technological leadership. The
cells are assembled into modules, or solar panels, in plants located
mainly in Mexico and Europe.
To extend its commercial offering, from 2016 SunPower has marketed
a new lower-priced modules range to target the most competitive market
sectors while continuing to hold a technical edge over its competitors.
Downstream, SunPower markets its panels worldwide for
applications ranging from residential and commercial roof tiles to
large solar power plants. SunPower installed more than 1.3 GW in
2016 compared to 1.2 GW in 2015. As of December 31, 2016,
SunPower holds a 36.53% stake in the company 8point3 Energy
Partners, initially set up with First Solar. 8point3 Energy Partners, the
purpose of which is to acquire and operate solar projects, was listed
on NASDAQ in 2015. Additionally, in 2016 SunPower completed the
construction in the United States of the solar farm Boulder Solar 1
(125 MWc) and the Henrietta farm (128 MWc). SunPower also
completed construction of the Prieska farm (86 MWc) in South Africa.
(1) Company data.
40
TOTAL. Registration Document 2016
SunPower is pursuing its development in residential and commercial
markets, in particular in the United States, by increasing its service
offerings for solar power production, management and financing.
SunPower is also developing its Smart Energy activity to permit its
residential and commercial customers to optimize their power
consumption. Thus in 2016, SunPower launched a pilot project in
New York State involving electricity production and consumption
management with a storage offer in association with the local
electricity provider.
The second half of 2016 was marked by a sharp deterioration of
the global market, in a context of strong overcapacity of photovoltaic
cells production. SunPower announced an adjustment plan to cope
with this market deterioration. This plan is essentially based on a
reduction of the company’s operational costs and on the closure of
a cells manufacturing unit in the Philippines.
In this context, TOTAL and SunPower decided to deepen their
cooperation through several strategic initiatives. In particular, in
November 2016, TOTAL concluded an agreement with SunPower
to supply the panels required for retrofitting over the next five years
5,000 service stations and approximately 100 other sites across
the world for an installed capacity of 200 MW. In addition, TOTAL
undertook via Total Solar the acquisition of projects developed
by SunPower in Japan, South-Africa and France.
Other solar assets
The Group holds a 20% stake in the solar power plant Shams 1,
commissioned in 2013 in Abu Dhabi. With 109 MW of parabolic
concentrated solar power, Shams 1 is the largest thermal parabolic
concentrated solar power plant in the Middle East (1). In addition,
Total Solar co-developed and holds interests in the solar farms built
by SunPower: Salvador in Chile and Prieska in South-Africa, as well
as Nanao in Japan, which is under construction.
In line with its CSR approach, the Group continues to install solar
solutions through its decentralized rural electrification projects in
several countries, especially in South Africa via KES (Kwazulu
Energy Services Company), in which TOTAL holds a 35% stake.
New solar technologies
In order to strengthen its technological leadership in the crystalline
silicon value chain, and in addition to its cooperation with
SunPower in the R&D field, New Energies partners with leading
laboratories and international research institutes. This work consists
of developing and optimizing the photovoltaic solar power chain
(from silicon through to power systems and including wafers, cells
and modules), reducing production costs and increasing the
efficiency and reliability of components. The Group is also
strengthening its expertise in solar resource evaluation and prediction.
Additionally, downstream, TOTAL is continuing its research efforts
on new generations of energy management and control systems for
residential and commercial applications in order to differentiate the
Group entities’ offer on the electric market and to lower the cost of
energy consumed for customers.
Business overview 2
Marketing & Services segment
2.3.2.2. Energy storage
2.3.2.3. Biotechnologies and the conversion of biomass
Energy storage is one of the solutions that can offset the
intermittent nature of renewable energies, thereby increasing their
profitability and facilitating their development. The Group has
invested in this area since 2009 via collaborative R&D programs
with academic partners and minority stakes in start-ups, through
among others Total Energy Ventures, a venture capital company
(refer to point 2.3.5 of chapter 7).
The acquisition of 100% of the shares of Saft Groupe S.A. (“Saft”),
completed in August 2016 following a successful voluntary
takeover bid, is fully in line with TOTAL’s goal to develop in the
renewable energies and electricity businesses.
Saft is a French company founded in 1918 specializing in the
design, manufacture and marketing of high technology batteries for
industry. In 2016, Saft achieved sales of €738 million, including
75% on markets where it is the leader (1), such as nickel and primary
lithium batteries for industrial infrastructure, transport and civil and
military electronics applications. It also develops batteries for space
and defense using its lithium-ion technologies, which are also
deployed in the domains of energy storage, transport and
telecommunications networks. Building on its technological
expertise, the company is well positioned to benefit from growth in
renewable energies beyond its current activities.
As of year-end 2016, Saft is present in 19 countries in the world
(historically Europe and the United States) and has over 4,000
employees. It is achieving steady growth in emerging countries, in
particular in Asia, South America and Russia, and has 14 production
sites and approximately 30 sales offices.
TOTAL has launched numerous collaborative R&D projects for the
development of bio-sourced molecules with various academic
partners (the Joint BioEnergy Institute in the United States, the
University of Wageningen in the Netherlands) and industrial partners
in Europe (the Toulouse White Biotechnology consortium) and in the
United States (Amyris Inc., Novogy). Amyris Inc. is an American
company listed on NASDAQ, in which TOTAL holds an interest of
23.51% as of December 31, 2016. It produces biojet fuel from
farnesane, which has been used successfully in demonstration
flights, notably with Air France, KLM and Cathay Pacific.
TOTAL is exploring a number of opportunities for developing
biomass. In particular, TOTAL has invested in the start-up
Renmatix, which is developing an innovative technology involving
the deconstruction of lignocellulose into fermentable sugars.
This is in addition to the action already initiated by the Group within
the French consortium Futurol for the conversion of lignocellulose
into ethanol.
In 2015 and 2016, TOTAL also acquired two new R&D platforms:
one at Emeryville in California (United States) dedicated to the
development of processes for fermenting and separating molecules
from biotechnologies, and the other at Solaize (France) with the
goal of developing new biocomponents by implementing predictive
retrosynthesis methodologies.
In the longer term, the Group is also studying the potential for
developing a cost-effective phototrophic process for producing
biomolecules through microalgae bioengineering.
(1) Largest market share. Company data.
Registration Document 2016. TOTAL
41
2 Business overview
Investments
3. Investments
3.1. Major investments over the 2014-2016 period
Gross investments (a) (M$) 2016 2015 2014
Upstream 16,035 24,270 26,520
Refining & Chemicals 1,849 1,843 2,022
Marketing & Services 2,506 1,841 1,818
Corporate 140 79 149
Total 20,530 28,033 30,509
Net investments (b) (M$) 2016 2015 2014
Upstream 13,701 21,055 20,756
Refining & Chemicals 1,763 (1,645) 1,830
Marketing & Services 2,167 896 1,476
Corporate 126 54 78
Total 17,757 20,360 24,140
(M$) 2016 2015 2014
Acquisitions 2,033 3,441 2,539
including resource acquisitions 780 2,808 1,765
Divestments 1,864 5,968 4,650
Other operations with non-controlling interests (104) 89 179
Organic investments (c) (M$) 2016 2015 2014
Upstream 14,316 20,508 22,959
Refining & Chemicals 1,636 827 1,944
Marketing & Services 1,432 1,569 1,424
Corporate 100 72 104
Total 17,484 22,976 26,430
(a) Including acquisitions and increases in non-current loans. The main acquisitions for the 2014-2016 period are detailed in Note 3 to the Consolidated Financial Statements (point 7 of
chapter 10).
(b) Net investments = gross investments – divestments – repayment of non-current loans – other operations with non-controlling interests. The main divestments for the 2014-2016 period
are detailed in Note 7 to the Consolidated Financial Statements (point 7 of chapter 10).
(c) Organic investments = net investments, excluding acquisitions, divestments and other operations with non-controlling interests.
In 2016, the Group’s organic investments and resource acquisitions
were $18.3 billion. The decrease in investments compared to 2015
follows the completion and start-up of nine major production growth
projects in 2015 and five in 2016. The reduction also resulted from
a successful capital efficiency program implemented in response to
the fall in Brent prices.
In the Upstream segment, most of the investments were geared
toward the development of new hydrocarbon production facilities,
the maintenance of existing facilities and exploration activities.
Development expenditures were mainly related to the five projects
that started up in 2016 (Laggan-Tormore, Vega Pleyade, Incahuasi,
Angola LNG and Kashagan) and to other major projects under
construction and expected to start up in 2017 and 2018, including
Moho North in the Republic of the Congo, Yamal LNG in Russia,
Ichthys LNG in Australia, Kaombo in Angola and Egina in Nigeria.
In the Refining & Chemicals segment, investments were made
in facilities maintenance and safety, as well as in projects aimed
at improving the plants’ competitiveness. In 2016, the Group
progressed with the transformation of the La Mède refinery in
France into a bio-refinery and the modernization of the Antwerp
refinery in Belgium with the addition of a new heavy fuel oil
conversion unit and another petrochemical unit, and reduced by
50% the capacity of the Lindsey oil refinery in the United Kingdom.
In the Marketing & Services segment, investments in 2016 mainly
concerned retail networks in growth regions, logistics and specialty
products production and storage facilities.
Acquisitions in 2016 totaled $2.0 billion, including $780 million of
resource acquisitions, a 41% decrease compared to $3.4 billion
in 2015.
The Group took advantage of favorable market conditions to
expand its Upstream portfolio. The Group strengthened its position
in the Middle East by entering the Al Shaheen field in Qatar, and in
the US with the acquisition of shale gas assets. Resources
acquisitions were $780 million in 2016, comprised mainly of the
additional 75% interest in the Barnett shale gas field in the United
States. The Group is preparing future growth with the signing of
major deals in Brazil with Petrobras, in Uganda and in Iran on the
giant South Pars 11 project.
42
TOTAL. Registration Document 2016
Business overview 2
Investments
As part of the development of profitable low-carbon businesses,
the Group acquired Saft Groupe, a leader in energy storage solutions.
In line with the strategy to expand its gas and power distribution
activities, the Group also acquired Lampiris, a supplier of natural gas
and energy services in Belgium and France. Finally, in the Marketing &
Services segment, the Group announced the planned acquisition of
a retail and supply terminal network in Kenya, Uganda and Tanzania
to strengthen its marketing and supply activities in the region.
The Group also continued its divestment program of mature and
non-core assets for a total of $1.9 billion in 2016, including the sale
of a 15% stake in the Gina Krog field in Norway and a 20% stake in
the Kharyaga field in Russia, as well as the sale of the FUKA
pipeline system in the North Sea and a retail network in Turkey. The
Group also finalized in January 2017 the sale of Atotech, a plating
chemistry company, for $3.2 billion, which was announced in 2016.
The $10 billion asset sale program for 2015-2017 was around 80%
complete following the closing of the Atotech sale in 2017.
Net investments were $17.8 billion in 2016, compared
to $20.4 billion in 2015, a decrease of 13% essentially related to the
decrease in organic investments.
3.2. Major planned investments
Investments are moving into the sustainable range needed to
deliver profitable future growth and are expected to be between
$16 and $17 billion in 2017 including resource acquisitions.
Investments in the Exploration & Production segment will be largely
allocated to major development projects under construction,
including Moho North in the Republic of the Congo, Yamal LNG in
Russia, Ichthys LNG in Australia, Kaombo in Angola and Egina in
Nigeria as well to a number of new projects expected to be
launched this year. A portion of the funds will also be allocated to
assets already in production, in particular for maintenance capital
expenditures and in-fill wells.
In the Refining & Chemicals segment, the modernization of the
Antwerp integrated platform and the transformation of the La Mède
refinery to a bio-refinery will be among the major investments
in 2017. The Group is also progressing plans for the construction
of a side cracker at the Port Arthur refinery complex in the United
States. A significant portion of the segment’s budget will also
be allocated to required maintenance and safety investments.
The Marketing & Services segment’s investment budget will,
finance, in particular, the service station network, logistics, specialty
products production and storage facilities, particularly lubricants.
Most of the Marketing & Services budget will be allocated to growth
regions, notably Africa, the Middle East and Asia.
The Group will also continue investing to grow its Downstream gas
and renewables businesses through the newly established Gas,
Renewables and Power segment, as well as in R&D.
TOTAL self-finances most of its investments with cash flow from
operating activities and occasionally accesses the bond market
when financial market conditions are favorable. Investments for joint
ventures between TOTAL and external partners are generally
funded through specific project financing.
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 the Group’s off-
balance sheet commitments and contractual obligations appear in
Note13 to the Consolidated Financial Statements (point 7 of
chapter 10). The Group currently believes that neither these
guarantees nor the other off-balance sheet commitments of TOTAL
S.A. or of any other Group company have, or could reasonably
have in the future, a material effect on the Group’s financial position,
income and expenses, liquidity, investments or financial resources.
Registration Document 2016. TOTAL
43
2 Business overview
Research & Development
4. Research & Development
The Group’s overall R&D investments were $1,050 million in 2016,
compared to $980 million in 2015 and $1,245 million in 2014.
There were 4,939 people dedicated to R&D activities in 2016
compared to 4,248 in 2015 and 4,596 in 2014 (1).
– mastering and using innovative technologies such as
biotechnologies, materials sciences, nanotechnologies, high-
performance computing, information and communication
technologies or new analytical techniques.
TOTAL invested $689 million in 2016 in innovation and R&D for its
oil and gas activities (2). The expenses dedicated to these activities are
expected to increase by 5% on average between 2015 and 2017.
R&D at TOTAL focuses on six major axes:
– developing knowledge, tools and technological expertise to
discover and profitably produce complex oil and gas resources at
a reduced cost to help meet the global demand for energy;
– developing, industrializing and improving competitive processes
for the conversion of oil, gas 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 profitability in the long term;
– developing and industrializing solar, biomass and carbon capture
and storage technologies to help prepare for future energy needs
in an economically competitive manner;
– developing practical, innovative and competitive materials and
products that meet customers’ specific needs, contribute to the
emergence of new features and systems, enable current
materials to be replaced by materials delivering higher
performance to users, and address the challenges of improved
energy efficiency, lower environmental impact and toxicity, better
management of their life cycle and waste recovery;
– understanding and measuring the impacts of the Group’s
operations and products on ecosystems (water, soil, air, biodiversity)
and recovering waste to improve environmental safety, as part of
the regulation in place, and reduce their environmental footprint to
endeavor to achieve sustainability in the Group’s operations; and
4.1. Upstream
These issues are incorporated into the project portfolio to develop
synergies. Different aspects may be looked at independently by
different business segments, with high levels of interaction between
R&D, technology and business unit teams.
Since 2009, Total Energy Ventures, which is in charge of developing
small and medium-sized enterprises (SMEs) specialized in innovative
energy technologies and clean technologies for the Group,
manages a portfolio that has grown regularly. In addition, a loan
facility was introduced for innovative SMEs that develop
technologies of interest for the Group.
In 2016, a Group R&D Division was set up as part of the Group’s
new organization, “One Total” (refer to point 1.3 of this chapter).
This new division is in charge of:
– constructing a consolidated view of all of the Group’s R&D
activities and putting in place an R&D roadmap taking into
account the 2°C scenario of the IAE;
– launching and monitoring transversal studies on key subjects for
the Group, such as CO2 capture, use and storage, health, safety
and the environment (HSE) and energy efficiency;
– increasing synergies between R&D teams by facilitating the
sharing of tools, expertise and, when needed, resources,
selecting and respecting good practices, and capitalizing on
scientific expertise; and
– ensuring the transfer of technologies towards the Group’s
industrial and commercial activities.
In Exploration & Production, the R&D project portfolio was reviewed
in 2016 according to the impacts on reducing costs and the
environmental footprint, and on improving safety and production.
More than half of the R&D budget is focused on improving
exploration (geological structures, seismic acquisition and imaging
technologies), characterization of hydrocarbon reservoirs and
simulation of field evolution during production. Enhancing oil
recovery from mature reservoirs remains an active area of research,
particularly in the Group’s partnerships in the Middle East.
R&D activities in deep offshore aiming at greater distances for
multiphase production transport have been increased further, which
is fully in line with the goals of Exploration & Production and
supports major technology-intensive assets such as Libra in Brazil.
Operations on wells, from drilling to closure, account for a
significant share of Upstream costs; new R&D projects are under
way to reduce these and further increase operational safety.
end in 2016. The Group now has a strong command of the methods
used to characterize reservoirs and their mechanical properties for this
type of injection. New R&D projects are being identified in order to
develop carbon capture, use and storage (CCUS) in the coming years.
A sustained effort to adapt mature technologies in order to reduce their
costs has been implemented. In particular, new technologies addressing
the management of water associated with hydrocarbon production are
now available for new developments. This subject is part of a larger
program dedicated to Sustainable Development. The increased use of
digital technology also forms part of this cost-reduction program.
Finally, R&D programs prepare for the medium and long terms,
whether for researching new exploration concepts, non-
conventional resources or developing technologies, such as
robotics, nanotechnologies or high-performance computing
(notably, the Pangea supercomputer, a decision-support tool for
exploration and field management).
The monitoring phase of the oxy-combustion CO2 capture and storage
project in the depleted Rousse reservoir in Lacq (France) came to an
Concerning the activities of Gas, the program to develop new
technological acid gas treatment and LNG solutions is continuing.
(1) Figures for 2014 and 2015 concerning the Group’s R&D investments and employees were restated to reflect the accounting reporting scope.
(2) Excluding R&D budgets of Atotech, Hutchinson, SunPower and Saft Groupe.
44
TOTAL. Registration Document 2016
Business overview 2
Research & Development
4.2. Refining & Chemicals
4.2.1. Refining & Chemicals
(excluding specialty chemicals)
The aim of R&D is to support the medium and long-term
development of Refining & Chemicals. In doing so, it contributes to
the technological differentiation of this business through the
development, implementation and promotion of effective R&D
programs that pave the way for the industrialization of knowledge,
processes and technologies.
In line with Refining & Chemicals’ strategy, R&D places special
emphasis on the following four major challenges: taking advantage
of different types of feedstock; maximizing asset value; continuing
to develop innovative products; and developing biosourced
products. The medium-term strategy of the project portfolio and its
deployment plan will facilitate Refining & Chemicals’ technological
differentiation.
To take advantage of different types of feedstock, R&D activities
related to the processing of more diversified crudes have increased
significantly through a clearer insight into the effect that feedstocks
have on equipment and processes at the molecular level. R&D is
launching ambitious new programs to develop various technologies
for producing liquid fuels, monomers and intermediates from gas.
R&D is developing expertise and technologies with a view to
maximizing asset value. Its efforts mainly involve programs focusing
on the flexibility and availability of facilities. Advanced modeling of
feedstocks and processes helps the units overcome processing-
related constraints and operate while taking these constraints into
account in real time. Research conducted on catalysts is helping to
increase their resistance, improve catalytic stability and extend the
cycle time at a lower cost. Programs are being set up to maximize
the value of heavy residues. The new opportunities presented by
digital technology are being examined to pave the way for the
“plant of the future”, which will provide an even safer working
environment and increased productivity, while consuming less
energy and producing less waste.
In line with the Group’s low-carbon strategy, R&D is pioneering
solutions to reduce greenhouse gas emissions through carbon
capture and recovery by conversion. In addition, out of concern for
the environmental footprint of Refining & Chemicals’ activities, R&D is
developing new technologies to improve the energy efficiency of
facilities and reduce the impact of the activities on water, air, soil, etc.
The offer of innovative products is a key aspect of research on
polymers. R&D draws on its knowledge of metallocenes and
4.3. Marketing & Services
4.3.1. Marketing & Services
In 2016, the R&D activities of Marketing & Services continued to roll
out its new roadmap in line with its ambitions.
The roadmap features two focal points: reducing the environmental
footprint of products, particularly CO2 emissions, and increasing
energy efficiency by improving the durability of end users’
equipment. These are broken down into a number of areas: energy
savings for customers; competitive advantage and new solutions;
anticipation of changes in legislation; and incorporation of
biosourced molecules.
bimodality to develop different types of mass consumption
polymers that have exceptional properties allowing them to replace
heavier materials and compete with technical polymers. Value-
added niche polymers are also being developed, whether in the
form of blends or composites. Efforts to diversify into biosourced
products are focused mainly on products endorsed by the market:
biomonomers, biointermediates, and biopolymers. R&D is thus
focusing on polylactic acid due to the new applications that can be
envisaged as a result of its specific properties. For plastics
recycling, R&D is designing technologies that will make it possible
to recycle polymers under acceptable conditions in terms of end
product quality, cost and environmental impact.
With regard to biofuels, R&D has directed its efforts towards
gasification and coprocessing to produce liquid fuels from biomass.
R&D is also particularly mindful of issues related to blends and
product quality raised by the use of biomolecules.
The efficient use of resources is a major challenge for Sustainable
Development. As a result, R&D is pioneering technologies enabling
more efficient use of biosourced molecules to produce higher
added-value chemical compounds, whether through biotechnologies
or thermochemical processes.
4.2.2. Specialty chemicals
R&D is strategically important for specialty chemical products.
It is closely linked to the needs of the subsidiaries and industrial
customers.
For Hutchinson, R&D is an important factor in innovation and
differentiation. The company is present along the entire value chain,
from designing custom materials (e.g., rubber, thermoplastics,
composites) to incorporating connected solutions (e.g., complex
solutions, mechatronics, connected objects).
With a corporate research and innovation center, more than
25 technical centers and a number of university partnerships
worldwide, Hutchinson is equipped to rise to the challenge of
contributing to the safer, more comfortable, and more responsible
mobility of the future.
Weight reduction, increased energy efficiency and improved
diagnostic and control functionality are common preoccupations
across all of Hutchinson’s markets (e.g., automotive, aerospace,
defense, railways). Hutchinson designs innovative solutions to put
its customers ahead of the game, and transposes those solutions
between markets, adopting a cross-fertilization approach.
A new “Chemicals and biocomponent processes” department
shared by the Marketing & Services and Refining & Chemicals
segments opened in April 2016 on the Solaize site, with the aim of
using a predictive approach to design components derived from
renewable sources. This approach uses cheminformatics and
digital tools to simulate, model and predict how the components
will perform, in order to help chemists and formulators better
identify ideal chemical structures.
The “Fuel Economy” range of lubricants continues to expand with
many new products designed to comply with the specifications of
Registration Document 2016. TOTAL
45
2 Business overview
Research & Development
manufacturers targeted by the Total Lubricants business line in all
fields of application (automotive, marine and manufacturing). The
key work is focused on the design and incorporation of
breakthrough components in formulations. At the same time, more
fundamental work has been started to anticipate the issues that
manufacturers will face as a result of changes in engine technology
and legislation. New contracts have been won with strategic
manufacturers. In addition, the new marine lubricant for two-stroke
engines that run on fuels with sulfur contents of 0 to 3.5% has been
introduced onto the market. The International Maritime
Organization’s recent decision to limit the sulfur content of fuels to
0.5% by 2020 has led to the redefinition of marine lubricant
development programs.
Launched in 2015, the project to synthesize new molecules for
future generations of the “Total Excellium” fuel range is based on
the areas of chemicals, methods & measurements and
benchmarking. Alongside this, work to develop new products
tailored to specific local requirements has been finalized, mainly for
the African market.
In the field of refinery additives, research continued into
understanding and developing new additives to improve the
performance of distillates in cold temperatures.
With respect to bitumen, in order to meet the challenges of
competitiveness, sustainable logistics, Sustainable Development
and geographic expansion in the bitumen sector, researchers
mainly concentrated on the prospect of transporting bitumen in
solid form, establishing a program to reduce binder aging and
developing Styrelf formulas for the international market.
The new “Bio Life” range of special fluids derived from renewable
sources was put on the market. It is protected by several patent
applications covering the production methods and applications of
the fluids.
In Formula 1 racing, important work on understanding combustion
and lubrication phenomena, in conjunction with closer technical ties
with manufacturers, once again brought very significant
improvements in engine performance in 2016. As a result of this
collaboration, new skills have been acquired in-house that can be
used in other areas (e.g., production vehicles, electric engines).
The Asia-Pacific Technical Center based in Mumbai, India,
increased its activities and skills, mainly in lubricants (particularly for
textiles and two-wheeled vehicles), special fluids (including drilling
fluids) and fuel additives.
The enlisting of French and international skills has increased in
recent years, with a growing number of ties to academia,
researchers seconded to universities in France, Italy, Switzerland
and the United States, and international researchers recruited. R&D
has also increased its activities relating to evaluating and selecting
external technologies and partners with shared interests (SMEs,
start-ups). These different approaches enhance the work necessary
for the guided design and development of breakthrough products
included in Marketing & Services’ objectives.
4.3.2. New Energies
New Energies’ R&D efforts are focused, on the one hand, on the
solar value chain from silicon to photovoltaic electricity
management systems, and, on the other hand, on the development
of biotechnological methods of converting biomass into products of
interest to the Group’s markets.
In the field of solar energy, R&D is striving to improve SunPower’s (1)
methods of producing cells and modules in order to drive down
costs while enhancing efficiency and reliability, with the aim of
maintaining the company’s global technological leadership and
tailoring its offering to the different application markets, from solar
farms to the residential sector. It is also preparing future generation
photovoltaic cells within the framework of several strategic
partnerships between TOTAL and renowned academic research
institutes. In particular, TOTAL is the founding partner of the Ile-de-
France Photovoltaic Institute, a research institute on the Paris-
Saclay campus that has reached critical mass and offers a very
high-quality technical platform and scientific support structure with
the ambitious aim of identifying breakthrough technologies to
produce highly efficient, low-cost panels.
Downstream in the solar value chain, R&D is monitoring the
development of low-cost stationary storage technologies. At the
same time, Saft Groupe’s R&D teams are focusing on improving
lithium-ion technologies, reducing costs and environmental impact,
and developing management systems. This last activity provides a
link to the R&D activities of New Energies, which is preparing
solutions for supplying solar power and associated services to
residential markets by developing software tools and algorithms for
the intelligent management of domestic electricity production and
consumption, and also by integrating and testing systems
combining photovoltaics, storage, control of demand as well as
pilots for assessing and improving systems and algorithms in
contact with customers.
With regard to biotechnologies, the Group is developing methods
for converting sugars into biofuels and molecules of interest for
chemicals, as well as processes for the deconstruction of
lignocellulose into sugars. To support its ambitions, the Group has
set up laboratories, including one research center specializing in
fermentation and another specializing in predictive approaches, a
cutting-edge technology for anticipating the properties of
components and providing a better response to future needs, with
unprecedented performance levels. To this end, TOTAL’s biotech
research team heads up a network of partners including academic
laboratories and start-ups in the United States and Europe.
The Group mainly works with Amyris (2), a company specializing
in biotechnologies.
(1) American company listed on NASDAQ in which the Group holds a 56.73% interest as of December 31, 2016.
(2) American company listed on NASDAQ in which the Group holds a 23.51% interest as of December 31, 2016.
46
TOTAL. Registration Document 2016
Business overview 2
Research & Development
4.4. Environment
Environmental issues are important throughout the Group and are
taken into account in all R&D projects. R&D’s effort is to manage
environmental risks more effectively, particularly with regard to:
– water management, especially by reducing the use of water from
natural environments and lowering emissions in compliance with
local, national and international regulations;
– reduction of greenhouse gas emissions by improving energy
efficiency and monitoring carbon capture, use and storage of CO2
and the potential effects of CO2 on the natural environment;
– detection and reduction of discharges into the air and simulation
of their dispersal;
– prevention of soil contamination and regulatory compliance with
regard to historical aspects and the remediation of sites; and
– changes in the Group’s different products and management of
their life cycle, in particular in compliance with the Registration,
Evaluation, Authorisation and Restriction of Chemicals regulation
(REACH).
4.5. R&D Organization
The Group intends to increase R&D in all of its segments through
cross-functional themes and technologies. Constant attention is
paid to R&D synergies between business segments.
The Group has 18 R&D sites worldwide and has entered into
approximately 1,000 partner agreements 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 consult on matters of interest
to the Group’s R&D activities. Long-term partnerships with
universities and academic laboratories considered to be of strategic
importance in Europe, the United States, Japan and China, as well
as innovative small businesses, are part of the Group’s approach.
Each business segment is developing an active intellectual property
activity aimed at protecting its innovations, allowing its activity to
develop and promoting its technological assets among its partners.
In 2016, more than 200 patent applications were filed by the Group.
Registration Document 2016. TOTAL
47
2 Business overview
Property, plant and equipment
5. Property, plant and equipment
The companies of the Group have 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, Refining & Chemicals and
Marketing & Services).
A summary of the Group’s property, plant and equipment and their
main related expenses (depreciation and impairment) is included
in Note 7 to the Consolidated Financial Statements (point 7 of
chapter 10).
Minimum royalties from finance lease agreements regarding
properties, service stations, vessels and other equipment are
presented in Note 13 to the Consolidated Financial Statements
(point 7 of chapter 10).
Information about the objectives of the Company’s environmental
policy, in particular those related to the Group’s industrial sites or
facilities, is presented in chapter 7.
48
TOTAL. Registration Document 2016
Business overview 2
Group organization
6. Group organization
6.1. Position of the Company within the Group
TOTAL S.A. is the Group’s parent company.
The Group’s businesses are organized in business segments, which receive assistance from the corporate functional divisions.
6.2. Company subsidiaries
A list of the major subsidiaries directly or indirectly held by the
Company included in TOTAL S.A.’s scope of consolidation is
presented in Note 18 to the Consolidated Financial Statements
(refer to point 7 of chapter 10).
As of December 31, 2016, there were 934 consolidated
companies, of which 839 were fully consolidated and 95 were
accounted for under the equity method. The principles of
consolidation are described in Note 1.1 to the Consolidated
Financial Statements.
In addition, the table of subsidiaries and affiliates in point 5.1 of
chapter 12 presents the Company’s direct subsidiaries and
shareholdings, and in particular those with a gross value exceeding
1% of the Company’s share capital.
The decision of TOTAL S.A.’s 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, 2016, there is no restriction under such provisions
that would materially restrict the distribution to TOTAL S.A. of the
dividends declared by those subsidiaries.
During the fiscal year 2016, TOTAL S.A. acquired 100% of the
shares of Saft Group S.A. in August 2016 following a successful
voluntary takeover bid. TOTAL S.A. did not acquire any other stakes
in companies with registered offices in France representing more
than one twentieth, one tenth, one fifth, one third or one half of the
capital of these companies, nor took control of any such companies.
6.3. Group interests in publicly-traded companies
TOTAL holds stakes in a limited number of companies that issue
publicly-traded financial instruments in France or abroad. These
companies are mainly the Group’s financing vehicles (Total Capital,
Total Capital Canada Ltd., Total Capital International) or the operational
subsidiaries in its business segments, in particular in Africa, such as
Total Gabon (1).
TOTAL also holds a majority stake in SunPower (56.73% on
December 31, 2016), an American company listed on NASDAQ,
and minority interests in other companies, including PAO Novatek
(18.9% on December 31, 2016), a Russian company listed on the
Moscow Interbank Currency Exchange and the London Stock
Exchange.
(1) Total Gabon is a company under Gabonese law, the shares of which are listed on Euronext Paris and owned by TOTAL (58.28%), the Republic of Gabon (25%) and the public (16.72%).
Registration Document 2016. TOTAL
49
2 Business overview
Organization chart as of January 1, 2016
7. Organization charts
e
h
t
o
t
s
r
e
s
v
d
A
i
O
E
C
&
n
a
m
r
i
a
h
C
&
y
g
e
t
a
r
t
S
s
s
e
n
s
u
B
i
e
c
n
e
g
i
l
l
e
t
n
I
c
i
f
i
t
n
e
c
S
i
t
n
e
m
p
o
e
v
e
D
l
l
a
g
e
L
e
t
a
r
o
p
r
o
C
n
o
i
t
a
m
r
o
n
f
I
s
r
i
a
f
f
A
i
s
n
o
i
t
a
c
n
u
m
m
o
C
l
y
g
o
o
n
h
c
e
T
e
c
n
a
n
F
i
t
n
e
m
s
s
e
s
s
A
k
s
R
i
s
e
c
n
a
r
u
s
n
I
d
n
a
i
n
o
s
v
D
i
i
e
c
n
a
n
F
i
I
E
E
T
T
M
M
O
C
E
V
T
U
C
E
X
E
I
e
t
a
r
o
p
r
o
C
s
r
i
a
f
f
A
s
e
c
r
u
o
s
e
R
n
a
m
u
H
t
i
d
u
A
d
n
a
l
o
r
t
n
o
C
l
a
n
r
e
t
n
I
y
t
i
r
u
c
e
S
e
t
a
r
o
p
r
o
C
l
t
n
e
m
p
o
e
v
e
D
e
b
a
n
a
t
s
u
S
i
l
y
t
e
a
S
f
l
a
i
r
t
s
u
d
n
I
s
r
e
e
r
a
C
e
v
i
t
u
c
e
x
E
t
n
e
m
e
g
a
n
a
M
d
n
a
t
n
e
m
n
o
r
i
v
n
E
&
s
r
i
a
f
f
A
c
i
l
b
u
P
i
g
n
s
a
h
c
r
u
P
E
C
N
A
M
R
O
F
R
E
P
P
U
O
R
G
T
N
E
M
E
G
A
N
A
M
I
E
E
T
T
M
M
O
C
O
E
C
&
N
A
M
R
A
H
C
I
i
s
c
h
t
E
e
e
t
t
i
m
m
o
C
50
TOTAL. Registration Document 2016
i
s
e
g
r
e
n
E
w
e
N
i
s
e
c
v
r
e
S
&
g
n
i
t
e
k
r
a
M
i
l
s
a
c
m
e
h
C
&
g
n
n
i
i
f
e
R
i
i
g
n
p
p
h
S
&
g
n
d
a
r
T
i
s
a
G
n
o
i
t
c
u
d
o
r
P
&
n
o
i
t
a
r
o
p
x
E
l
,
g
n
i
t
s
a
c
e
r
o
F
e
t
a
r
o
p
r
o
C
l
a
n
o
i
t
u
t
i
t
s
n
I
&
s
n
o
i
t
a
e
R
l
i
s
n
o
i
t
a
c
n
u
m
m
o
C
s
s
e
n
s
u
B
i
s
n
o
i
t
a
r
e
p
O
&
s
r
i
a
f
f
A
I
T
N
E
M
G
E
S
S
E
C
V
R
E
S
&
G
N
T
E
K
R
A
M
I
s
e
s
s
e
n
s
u
B
i
l
a
b
o
G
l
,
y
t
e
a
S
f
,
h
t
l
a
e
H
,
y
t
i
r
u
c
e
S
t
n
e
m
n
o
r
i
v
n
E
y
t
i
l
a
u
Q
d
n
a
e
p
o
r
u
E
a
c
i
r
f
A
t
s
a
E
e
d
d
M
i
l
,
y
g
e
t
a
r
t
S
,
g
n
i
t
e
k
r
a
M
h
c
r
a
e
s
e
R
n
a
m
u
H
s
e
c
r
u
o
s
e
R
l
&
y
p
p
u
S
s
c
i
t
s
g
o
L
i
s
a
c
i
r
e
m
A
i
-
a
s
A
c
i
f
i
c
a
P
h
t
l
a
e
H
y
t
e
a
S
f
t
n
e
m
n
o
r
i
v
n
E
g
n
i
r
u
t
c
a
u
n
a
M
f
j
s
t
c
e
o
r
P
&
i
n
o
s
v
D
i
i
y
g
e
t
a
r
t
S
t
n
e
m
p
o
e
v
e
D
l
h
c
r
a
e
s
e
R
e
t
a
r
o
p
r
o
C
s
r
i
a
f
f
A
r
e
b
b
u
R
i
g
n
s
s
e
c
o
r
p
)
i
n
o
s
n
h
c
t
u
H
(
g
n
n
i
i
f
e
R
l
i
s
a
c
m
e
h
c
o
r
t
e
P
t
n
e
i
r
O
g
n
n
i
i
f
e
R
i
l
s
a
c
m
e
h
c
o
r
t
e
P
s
a
c
i
r
e
m
A
s
r
e
m
y
o
P
l
l
g
n
i
t
a
p
o
r
t
c
e
E
l
)
h
c
e
t
o
t
A
(
m
e
h
C
g
n
n
i
i
f
e
R
e
p
o
r
u
E
e
s
a
b
s
t
c
u
d
o
r
P
s
e
v
i
t
a
v
i
r
e
D
&
i
g
n
d
a
r
T
l
i
O
e
d
u
r
C
i
g
n
d
a
r
T
,
y
g
e
t
a
r
t
S
G
N
L
&
t
e
k
r
a
M
l
a
i
r
t
s
u
d
n
I
,
s
t
e
s
s
A
T
I
,
e
c
n
a
n
F
i
e
t
a
r
o
p
r
o
C
s
r
i
a
f
f
A
i
g
n
p
p
h
S
i
s
t
c
u
d
o
r
P
i
g
n
d
a
r
T
g
n
i
t
e
k
r
a
M
i
g
n
d
a
r
T
n
o
i
t
a
r
o
p
x
E
l
t
n
e
m
p
o
e
v
e
D
l
t
r
o
p
p
u
S
d
n
a
s
n
o
i
t
a
r
e
p
O
o
t
i
s
s
e
n
s
u
B
y
g
e
t
a
r
t
S
t
n
e
m
p
o
e
v
e
D
l
D
&
R
h
t
l
a
e
H
y
t
i
l
a
u
Q
a
c
i
r
f
A
t
s
a
E
e
d
d
M
l
i
a
c
i
r
f
A
h
t
r
o
N
s
a
c
i
r
e
m
A
i
-
a
s
A
c
i
f
i
c
a
P
T
N
E
M
G
E
S
M
A
E
R
T
S
P
U
y
t
i
r
u
c
e
S
t
n
e
m
n
o
r
i
v
n
E
l
i
a
t
e
c
o
S
y
t
e
a
S
f
e
p
o
r
u
E
i
a
s
A
l
a
r
t
n
e
C
&
I
T
N
E
M
G
E
S
S
L
A
C
M
E
H
C
&
G
N
N
F
E
R
I
I
l
a
b
o
G
l
l
a
t
o
T
y
t
i
l
i
i
b
s
n
o
p
s
e
R
l
i
a
c
o
S
&
e
p
o
e
P
l
i
s
e
c
v
r
e
S
i
y
t
e
c
o
S
l
i
i
v
C
t
n
e
m
e
g
a
g
n
E
n
a
m
u
H
s
e
c
r
u
o
s
e
R
k
s
R
i
t
n
e
m
s
s
e
s
s
A
e
c
n
a
r
u
s
n
I
d
n
a
e
c
n
a
n
F
i
e
c
n
a
n
F
i
i
n
o
s
v
D
i
i
y
t
i
r
u
c
e
S
E
S
H
i
s
e
c
v
r
e
S
&
g
n
i
t
e
k
r
a
M
y
g
e
t
a
r
t
S
g
n
i
t
e
k
r
a
M
h
c
r
a
e
s
e
R
e
t
a
r
o
p
r
o
C
s
r
i
a
f
f
A
e
p
o
r
u
E
a
c
i
r
f
A
i
g
n
d
a
r
T
s
t
c
u
d
o
r
P
i
i
g
n
p
p
h
S
&
g
n
d
a
r
T
i
l
y
g
o
o
n
h
c
e
T
n
o
i
t
a
m
r
o
n
f
I
,
s
e
t
a
l
l
i
t
s
D
i
g
n
i
t
e
k
r
a
M
s
e
v
i
t
a
v
i
r
e
D
d
n
a
e
d
u
r
C
i
g
n
d
a
r
T
l
i
O
O
E
C
&
n
a
m
r
i
a
h
C
e
h
t
o
t
i
r
e
s
v
d
A
O
E
C
&
N
A
M
R
A
H
C
I
y
r
a
t
e
r
c
e
S
d
r
a
o
B
e
h
t
f
o
e
e
t
t
i
m
m
o
C
s
c
h
t
E
i
I
E
E
T
T
M
M
O
C
E
V
T
U
C
E
X
E
I
n
o
i
t
a
v
o
n
n
I
-
y
g
e
t
a
r
t
S
s
r
e
s
v
d
A
i
l
i
s
a
c
m
e
h
C
&
g
n
n
i
i
f
e
R
r
e
w
o
P
&
s
e
b
a
w
e
n
e
R
l
,
s
a
G
n
o
i
t
c
u
d
o
r
P
&
n
o
i
t
a
r
o
p
x
E
l
s
r
i
a
f
f
A
c
i
l
b
u
P
f
i
e
h
C
l
y
g
o
o
n
h
c
e
T
r
e
c
i
f
f
O
l
a
t
i
g
D
i
f
i
e
h
C
r
e
c
i
f
f
O
y
g
e
t
a
r
t
S
e
t
a
m
C
&
i
l
&
t
i
d
u
A
l
o
r
t
n
o
C
l
a
n
r
e
t
n
I
l
y
g
o
o
n
h
c
e
T
s
t
r
e
p
x
E
s
r
i
a
f
f
A
l
a
g
e
L
e
t
a
r
o
p
r
o
C
i
s
n
o
i
t
a
c
n
u
m
m
o
C
Organization chart as of January 31, 2017
Business overview 2
s
e
c
r
u
o
s
e
R
n
a
m
u
H
l
t
s
a
E
e
d
d
M
/
a
s
A
i
i
s
r
i
a
f
f
A
e
t
a
r
o
p
r
o
C
l
y
p
p
u
S
i
s
c
i
t
s
g
o
L
&
s
a
c
i
r
e
m
A
s
e
c
r
u
o
s
e
R
n
a
m
u
H
i
g
n
p
p
h
S
i
T
N
E
M
G
E
S
M
A
E
R
T
S
N
W
O
D
I
S
E
C
V
R
E
S
&
G
N
T
E
K
R
A
M
I
s
e
s
s
e
n
s
u
B
i
l
a
b
o
G
l
I
T
N
E
M
G
E
S
S
L
A
C
M
E
H
C
&
G
N
N
F
E
R
I
I
i
s
n
o
i
t
a
c
n
u
m
m
o
C
l
a
n
r
e
t
n
I
&
l
i
s
a
c
m
e
h
c
o
r
t
e
P
s
a
c
i
r
e
m
A
s
r
e
m
y
o
P
l
i
n
o
s
n
h
c
t
u
H
&
S
E
L
B
A
W
E
N
E
R
,
S
A
G
T
N
E
M
G
E
S
R
E
W
O
P
i
g
n
d
a
r
T
s
t
c
u
d
o
r
P
l
i
o
-
l
e
u
F
,
s
t
h
g
L
i
a
c
i
r
f
A
d
n
a
y
g
e
t
a
r
t
S
t
n
e
m
p
o
e
v
e
D
&
l
y
g
e
t
a
r
t
S
t
n
e
m
p
o
e
v
e
D
l
h
c
r
a
e
s
e
R
&
g
n
i
r
u
t
c
a
u
n
a
M
f
i
i
i
n
o
s
v
D
s
t
c
e
o
r
P
j
e
s
a
B
g
n
n
i
i
f
e
R
e
p
o
r
u
E
m
e
h
C
g
n
n
i
i
f
e
R
i
l
s
a
c
m
e
h
c
o
r
t
e
P
t
s
a
E
e
d
d
M
i
l
g
n
n
i
i
f
e
R
l
s
e
b
a
w
e
n
e
R
s
a
G
&
y
g
e
t
a
r
t
S
&
n
o
i
t
a
v
o
n
n
I
s
r
i
a
f
f
A
e
t
a
r
o
p
r
o
C
y
c
n
e
c
i
i
f
f
E
y
g
r
e
n
E
e
t
a
r
o
p
r
o
C
s
r
i
a
f
f
A
n
o
i
t
a
r
o
p
x
E
l
t
n
e
m
p
o
e
v
e
D
l
t
r
o
p
p
u
S
d
n
a
s
n
o
i
t
a
r
e
p
O
o
t
i
s
s
e
n
s
u
B
-
y
g
e
t
a
r
t
S
D
&
R
-
t
n
e
m
p
o
e
v
e
D
l
a
c
i
r
f
A
t
s
a
E
e
d
d
M
l
i
a
c
i
r
f
A
h
t
r
o
N
s
a
c
i
r
e
m
A
c
i
f
i
c
a
P
-
a
s
A
i
M
A
E
R
T
S
P
U
T
N
E
M
G
E
S
I
N
O
T
C
U
D
O
R
P
&
N
O
T
A
R
O
L
P
X
E
I
e
p
o
r
u
E
i
a
s
A
l
a
r
t
n
e
C
&
Registration Document 2016. TOTAL
51
[THIS PAGE INTENTIONALLY LEFT BLANK]
4.Facteurs de risques
Risks and control
4
Risks and control
1. Risk Factors 62
1.1. Risks related to market environment and other financial risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
1.2. Industrial and environmental risks and risks related to climate issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
1.3. Risks related to critical IT systems security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65
1.4. Risks related to the development of major projects and reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65
1.5. Risks related to equity affiliates and management of assets operated by third parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
1.6. Risks related to political or economic factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
1.7. Risks related to competition and lack of innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68
1.8. Ethical misconduct and non-compliance risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68
1.9. Countries targeted by economic sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69
2. Legal and arbitration proceedings 73
3. Insurance and risk management 75
3.1. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75
3.2. Risk and insurance management policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75
3.3. Insurance policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75
4. Internal control and risk management procedures
(Article L. 225-37 of the French Commercial Code) 76
4.1. Basic elements of internal control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76
4.2. Control environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77
4.3. Risk assessment and management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
Registration Document 2016. TOTAL
61
4 Risks and control
Risk Factors
1. Risk Factors
The Group conducts its activities in an ever-changing environment
and is exposed to risks that, if they were to occur, could have a
material adverse effect on its business, financial condition, including
its operating income and cash flow, reputation or outlook.
not be aware of other risks that could, or other risks may not have
been considered by the Group as being likely to, have a material
adverse impact on the Group, its business, financial condition,
including its operating income and cash flow, reputation or outlook.
The Group employs a continuous process of identifying and
analyzing risks in order to determine those that could prevent it
from achieving its objectives. This chapter presents the significant
risks to which the Group believes it is exposed as of the date of this
Registration Document. However, as of such date, the Group may
The main internal control and risk management procedures, which
are part of the report of the Chairman of the Board of Directors
prepared pursuant to Article L. 225-37 of the French Commercial
Code, are described in point 4 of this chapter.
1.1. Risks related to market environment and other financial risks
The financial performance of TOTAL is sensitive to a number of
market environmentrelated factors, the most significant being
hydrocarbon prices, refining margins and exchange rates.
Generally, a decline in hydrocarbon prices has a negative effect on
the Group’s results due to a decrease in revenues from oil and gas
production. Conversely, a rise in hydrocarbon prices increases the
Group’s results.
In 2016, crude oil prices reached their lowest point in January and
then strengthened progressively, notably due to the OPEC/non-
OPEC agreement concluded in November 2016, while remaining
low. The market remains highly volatile.
For the year 2017, according to the scenarios retained below, the
Group estimates that an increase of $10 per barrel in the price of
Brent crude would increase annual adjusted net operating income (1)
by approximately $2 billion and cash flow from operations by
approximately $2.5 billion. Conversely, a decrease of $10 per barrel
in the price of Brent crude would decrease annual adjusted net
operating income by approximately $2 billion and cash flow from
operations by approximately $2.5 billion.
The impact of changes in crude oil and gas prices on downstream
operations depends upon the speed at which the prices of finished
products adjust to reflect these changes. The Group estimates that
a decrease in its European Refining Margin Indicator (“ERMI”)
of $10 per ton would decrease annual adjusted net operating
income by approximately $0.5 billion and cash flow from operations
by approximately $0.6 billion. Conversely, an increase in its ERMI
of $10 per ton would increase annual adjusted net operating
income by approximately $0.5 billion and cash flow from operations
by approximately $0.6 billion.
All of the Group’s activities are, for various reasons and to varying
degrees, sensitive to fluctuations in the dollar / euro exchange rate.
The Group estimates that a decrease of $0.10 per euro
(strengthening of the dollar versus the euro) would increase
adjusted net operating income by approximately $0.1 billion and
have a limited impact on cash flow from operations. Conversely, an
increase of $0.10 per euro (weakening of the dollar versus the euro)
would decrease adjusted net operating income by approximately
$0.1 billion and have a limited impact on cash flow from operations.
Market impact Scenario Change Estimated impact Estimated impact
on adjusted net on cash flow
environment 2017 (a) retained
operating income from operations
Brent 50 $ / b +10 $ / b +2 B$ +2.5 B$
European Refining Margin Indicator (ERMI) 35 $ / t -10 $ / t -0.5 B$ -0.6 B$
$ / € 1.1 $ / € -0.1 $ per € +0.1 B$ (cid:2)0 B$
(a) Sensitivities revised once per year upon publication of the previous year’s fourth quarter results. Indicated sensitivities are approximate and based upon TOTAL’s current view of its 2017
portfolio. Results may differ significantly from the estimates implied by the application of these sensitivities. The impact of the $ / € sensitivity on adjusted net operating income is
primarily attributable to the Refining & Chemicals segment.
In addition to the adverse effect on the Group’s revenues,
margins and profitability, a prolonged period of low oil and
natural gas prices could lead the Group to review its projects
and the evaluation of its assets and oil and natural gas reserves.
– the ability of the Organization of the Petroleum Exporting
Countries (OPEC) and other producing nations to influence global
production levels and prices;
– prices of unconventional energies as well as evolving approaches
Prices for oil and natural gas may fluctuate widely due to many
factors over which TOTAL has no control. These factors include:
– variations in global and regional supply of and demand for energy;
– global and regional economic and political developments in
natural resource-producing regions, particularly in the Middle
East, Africa and South America, as well as in Russia;
for developing oil sands and shale oil, which may affect the
Group’s realized prices, notably under its long-term gas sales
contracts and asset valuations, particularly in North America;
– cost and availability of new technology;
– regulations and governmental actions;
– global economic and financial market conditions;
(1) Adjusted results are defined as income at replacement cost, excluding non-recurring items and the impact of fair value changes.
62
TOTAL. Registration Document 2016
Risks and control 4
Risk Factors
– the security situation in certain regions, the magnitude of
international terrorist threats, war or other conflicts;
– changes in demographics, including population growth rates and
consumer preferences; and
– adverse weather conditions that can disrupt supplies or interrupt
operations of the Group’s facilities.
Prolonged periods of low oil and natural gas prices may reduce the
economic viability of projects in production or in development, and
reduce the Group’s liquidity, thereby decreasing its ability to finance
capital expenditures and / or causing it to cancel or postpone
investment projects.
If TOTAL were unable to finance its investment projects, the
Group’s opportunities for future revenue and profitability growth
would be reduced, which could materially impact the Group’s
financial condition, including its operating income and cash flow.
Prolonged periods of low oil and natural gas prices may reduce the
Group’s reported reserves and cause the Group to revise the price
assumptions upon which asset impairment tests are based that
could have a significant adverse effect on the Group’s results in the
period in which it occurs. For additional information on impairments
recognized on the Group’s assets, refer to Note 3 to the
Consolidated Financial Statements (point 7 of chapter 10).
Conversely, in a high oil and gas price environment, the Group can
experience significant increases in cost and government take, and,
under some production-sharing contracts, the Group’s production
rights could be reduced. Higher prices can also reduce demand for
the Group’s products.
The Group’s earnings from its Refining & Chemicals and
Marketing & Services segments are primarily dependent upon the
supply and demand for petroleum products and the associated
margins on sales of these products, with the impact of changes in
oil and gas prices on earnings on these segments being dependent
upon the speed at which the prices of petroleum products adjust to
reflect movements in oil and gas prices. In 2016, the negative
effects of lower oil and gas prices on the Group’s results were
partially offset by the results of the Refining & Chemicals segment.
During 2016, the Group’s refining margins, while remaining at a
good level, fluctuated throughout the year. In 2017, there can be no
assurance that the Group’s refining margins will remain at such level.
The activities of Trading & Shipping (oil, gas and power trading and
shipping activities) are particularly sensitive to market risk and more
specifically to price risk as a consequence of the volatility of oil and
gas prices, to liquidity risk (inability to buy or sell cargoes at market
prices) and to counterparty risk (when a counterparty does not fulfill
its contractual obligations). The Group uses various energy
derivative instruments and freight-rates instruments to adjust its
exposure to price fluctuations of crude oil, petroleum products,
natural gas, power and freight-rates. Although TOTAL believes it
has established appropriate risk management procedures, large
market fluctuations may adversely affect the Group’s activities and
financial condition, including its operating income and cash flow.
For more detailed information on the impact of the lower oil and gas
prices on the Group’s 2016 results, financial condition (including
impairments, significant reductions to capital expenditures and
operating costs, and divestments completed under the Group’s
asset sale program) and outlook, refer to chapter 3.
TOTAL is exposed to other financial risks related to its
financing and cash management activities.
The Group is exposed to changes in interest rates and foreign
exchange rates. Even though the Group generally seeks to
minimize the currency exposure of each entity to its functional
currency (primarily the dollar, the euro, the pound sterling and the
Norwegian krone), the Group’s financial condition, including its
operating income and cash flow, could be impacted by a significant
change in the value of these currencies. In addition, as TOTAL
mostly turns to financial markets for its financing, its financial
condition and operations could be materially impacted if access to
those markets were to become more difficult. For further
information on financial risks, refer to Notes 15 and 16 to the
Consolidated Financial Statements (point 7 of chapter 10).
1.2. Industrial and environmental risks and risks related to climate issues
TOTAL is exposed to risks related to the safety and security of
its operations.
The Group’s activities involve a wide range of operational risks,
such as explosions, fires, accidents, equipment failures, leakage of
toxic products, emissions or discharges into the air, water or soil,
that can potentially cause death or injury, or impact natural
resources and ecosystems.
The industrial event that could have the most significant impact is a
major industrial accident, e.g., blow out, explosion, fire, leakage of
highly toxic products or massive leakage, resulting in death or injury
and / or accidental pollution on a large-scale or at an environmentally
sensitive site.
Acts of terrorism or malicious acts against the Group’s employees,
plants, sites, pipelines and transportation or computer systems
could also disrupt the Group’s business activities and could cause
harm or damage to people, property and the environment.
Certain activities of the Group face specific additional risks. TOTAL’s
Upstream segment is exposed to risks related to the physical
characteristics of oil and gas fields, particularly during drilling
operations, which can cause blow outs, explosions, fires or other
damage, in particular to the environment, and lead to a disruption
of the Group’s operations or reduce its production. In addition to
the risks of explosions and fires, the activities of the
Refining & Chemicals and Marketing & Services business segments
entail risks related to the overall life cycle of the products
manufactured, as well as the materials used. With regard to
transportation, the likelihood of an operational accident depends
not only on the hazardous nature of the products transported, but
also on the volumes involved and the sensitivity of the regions
through which they are transported (quality of infrastructure,
population density, environmental considerations).
TOTAL’s workforce and the public are exposed to risks inherent to
the Group’s operations, which could lead to legal proceedings
against the Group’s entities and legal representatives, notably in
cases of death, injury and property and environmental damage.
Such proceedings could also damage the Group’s reputation. In
addition, like most industrial groups, TOTAL is affected by reports of
occupational illnesses, particularly those caused by past exposure
of Group employees to asbestos.
Registration Document 2016. TOTAL
63
4 Risks and control
Risk Factors
To manage the operational risks to which it is exposed, the Group
has adopted a preventive and remedial approach by putting in
place centralized HSE (healty, safety and environment) and security
management systems that seek to take all necessary measures to
reduce the related risks (refer to point 4.3.1 of this chapter). In
addition, the Group maintains worldwide third-party liability
insurance coverage for all its subsidiaries. TOTAL also has
insurance to protect against the risk of damage to Group property
and / or business interruption at its main refining and petrochemical
sites. TOTAL’s insurance and risk management policies are
described in point 3 of this chapter. However, the Group is not
insured against all potential risks. In certain cases, such as a major
environmental disaster, TOTAL’s liability may exceed the maximum
coverage provided by its third-party liability insurance. The Group
cannot guarantee that it will not suffer any uninsured loss and there
can be no guarantee, particularly in the event of a major environmental
disaster or industrial accident, that such loss would not have a
material adverse effect on the Group’s financial condition, including
its operating income and cash flow, and its reputation.
Crisis management systems are necessary to effectively
respond to emergencies, avoid potential disruptions to
TOTAL’s business and operations and minimize impacts on
third parties or the environment.
TOTAL has crisis management plans in place to deal with emergencies
(refer to point 4 of this chapter). However, these plans cannot exclude
the risk that the Group’s business and operations may be severely
disrupted in a crisis situation or ensure the absence of impacts on
third parties or the environment. TOTAL has also implemented
business continuity plans to continue or resume operations
following a shutdown or incident. An inability for the Group to
resume its activities in a timely manner could prolong the impact of
any disruption and thus could have a material adverse effect on its
financial condition, including its operating income and cash flow.
TOTAL is subject to increasingly stringent environmental,
health and safety laws and regulations in numerous countries
and may incur material related compliance costs.
The Group’s activities are subject to numerous laws and regulations
pertaining to the environment, health and safety. In most countries
where the Group operates, particularly in Europe and the United
States, sites and products are subject to increasingly strict laws
governing the protection of the environment (e.g., water, air, soil,
noise, protection of nature, waste management, impact assessments),
health (e.g., occupational safety, chemical product risk), and the
safety of personnel and residents.
Product quality and consumer protection are also subject to
increasingly strict regulations. The Group’s entities ensure that their
products meet applicable specifications and abide by all applicable
consumer protection laws. Failure to do so could lead to personal
injury, property damage, environmental harm and loss of customers,
which could negatively impact the Group’s financial condition,
including its operating income and cash flow, and its reputation.
TOTAL incurs, and will continue to incur, substantial expenditures to
comply with increasingly complex laws and regulations aimed at
protecting health, safety and the environment. Such expenditures
could have a material adverse effect on the Group’s financial condition.
The introduction of new laws and regulations could compel the
Group to curtail, modify or cease certain operations or implement
temporary shutdowns of facilities, which could diminish its productivity
and have a material adverse impact on its financial condition.
Moreover, most of the Group’s activities will eventually, at site
closure, require decommissioning followed by environmental
remediation after operations are discontinued, in compliance with
applicable regulations. Costs related to such activities may
materially exceed the Group’s provisions and adversely impact its
operating results. With regard to the permanent shutdown of an
activity, the Group’s environmental contingencies and asset
retirement obligations are addressed in the “Asset retirement
obligations” and “Provisions for environmental contingencies”
sections of the Group’s consolidated balance sheet (refer to Note
12 to the Consolidated Financial Statements, point 7 of chapter
10). Future expenditures related to asset retirement obligations are
accounted for in accordance with the accounting principles
described in the same Note.
Laws and regulations related to climate change may adversely
affect the Group’s business and financial condition.
Growing public concern over greenhouse gas (“GHG”) emissions
and climate change, which notably led to the signature of the Paris
Agreement on December 12, 2015 as part of the United Nations
Climate Change Conference (COP 21), is likely to continue to lead
to further regulation in these areas. These additional regulatory
requirements could lead the Group to curtail, change or cease
certain of its operations, and submit the Group’s facilities to
additional compliance obligations, which could adversely affect the
Group’s businesses and financial condition, including its operating
income and cash flow.
Regulations designed to gradually limit fossil fuel use may,
depending on the GHG emission limits and time horizons set,
negatively and significantly affect the development of projects, as
well as the economic value of certain of the Group’s assets. Internal
studies conducted by TOTAL have shown that a long term CO2
price of $40 / t (1) applied worldwide would have an impact of around
5% on the discounted present value of the Group’s assets
(upstream and downstream) (2). In response to these possible
developments, natural gas, which is the fossil energy that emits the
least amount of GHG, represented nearly 48% of TOTAL’s
production in 2016, compared to approximately 35% in 2005, and
the Group’s objective is to grow this percentage over the long term
with the expected growth of gas markets. In addition, the Group
ceased its coal production activities and is developing its activities
in the realms of solar energy production and energy from biomass
(renewable energies).
In Europe, the regulations concerning the market for CO2 emission
allowances, the EU Emissions Trading System (EU-ETS), entered a
third phase on January 1, 2013. This phase marks the end of the
overall free allocation of emission allowances: certain emissions,
such as those related to electricity production, no longer benefit
from free allowances, while for others free allowances have been
significantly reduced. Free allocations are now established based
on the emission level of the top-performing plants (i.e., the least
GHG-emitting) within the same sector (“top 10 benchmark”).
Lower-performing plants must purchase, at market price, the
(1) As from 2021 or the current price in a given country.
(2) Sensitivity calculated for a crude oil price of $60 / 80 / b compared to a reference scenario that takes into account a CO2 price in the regions already covered by a carbon pricing system.
64
TOTAL. Registration Document 2016
Risks and control 4
Risk Factors
necessary allowances to cover their emissions over these free
allocations. The plants also need to indirectly bear the cost of
allowances for all electricity consumed (including electricity
generated internally at the facilities).
The 2014 update to the EU-ETS list of sectors exposed to carbon
leakage confirmed that refining activities in Europe are an exposed
sector and should continue to benefit from free allocations partially
covering its deficits. Based on available information, the Group has
estimated that approximately 25% of its emissions subject to the
EU-ETS will not be covered by free allowances during the period
2013-2020 and at least 30% during the period 2021-2030. The
financial risk related to the foreseeable purchase of CO2 emission
allowances on the market is expected to rise due to the effects of
the ongoing reform of the EU-ETS. At year-end 2016, the price
of CO2 emission allowances stood at approximately €6 / t CO2.
The forecast for 2020 indicates that the price could rise to
approximately €20 / t (1) CO2 due to the combined effects of
backloading (2) (having removed 900 Mt from phase 3 allowance
auctions), of the foreseeable cancellation of quotas and the
establishment of a “market stability reserve” at the end of this
phase. The Group believes that the price of CO2 emission
allowances could rise to at least €30 / t during phase 4 (2021-2030).
The physical effects of climate change may adversely affect
the Group’s business.
TOTAL’s businesses operate in varied locales where the potential
physical impacts of climate change, including changes in weather
patterns, are highly uncertain and may adversely impact the results
of the Group’s operations.
Climate change potentially has multiple effects that could harm the
Group’s operations. The increasing scarcity of water resources may
negatively affect the Group’s operations in some regions of the
world, high sea levels may harm certain coastal activities, and the
multiplication of extreme weather events may damage offshore and
onshore facilities. These climate risk factors are continually
assessed in TOTAL’s management and risk management plans.
The Group believes that it is impossible to guarantee that the
contingencies or liabilities related to the matters mentioned in point
1.2 of this chapter will not have a material adverse impact on its
business, financial condition, including its operating income and
cash flow, reputation or outlook.
1.3. Risks related to critical IT systems security
Disruption to or breaches of TOTAL’s critical IT services or
information security systems could adversely affect the
Group’s operations.
The Group’s activities depend heavily on the reliability and security
of its information technology (IT) systems. If the integrity of its IT
systems were compromised due to, for example, technical failure,
cyber attack, viruses and computer intrusions, power or network
outages or natural disasters, the Group’s activities and assets could
sustain serious damage, material intellectual property could be
divulged and, in some cases, personal injury, property damage,
environmental harm and regulatory violations could occur,
potentially having a material adverse effect on the Group’s financial
condition, including its operating income and cash flow.
1.4. Risks related to the development of major projects and reserves
The Group’s production growth and profitability depend on the
delivery of its major development projects.
Growth of production and profitability of the Group rely heavily on
the successful execution of its major development projects that are
increasingly complex and capital-intensive. These major projects
may face a number of difficulties, including, in particular, those
related to:
– economic or political risks, including threats specific to a certain
country or region, such as terrorism, social unrest or other
conflicts (refer to point 1.6 of this chapter);
– negotiations with partners, governments, local communities,
suppliers, customers and other parties;
– obtaining project financing;
– controlling capital and operating costs;
– earning an adequate return in a low oil and / or gas price
environment;
– adhering to project schedules; and
– the timely issuance or renewal of permits and licenses by public
agencies.
Poor delivery of any major project that underpins production or
production growth could adversely affect the Group’s financial
condition, including its operating income and cash flow.
The Group’s long-term profitability depends on cost-effective
discovery, acquisition and development of economically viable
new reserves; if the Group is unsuccessful, its financial
condition, including its operating income and cash flow, would
be materially and adversely affected.
A large portion of the Group’s revenues and operating results are
derived from the sale of oil and gas that the Group extracts from
underground reserves developed as part of its
Exploration & Production activities. The development of oil and gas
fields, the construction of facilities and the drilling of production or
injection wells is capital intensive and requires advanced
technology. Due to constantly changing market conditions and
environmental challenges, cost projections can be uncertain. For
TOTAL’s Exploration & Production activities to continue to be
profitable, the Group needs to replace its reserves with new proved
reserves that can be developed and produced in an economically
viable manner.
(1) Company data.
(2) Backloading: authorization given to the European Commission to intervene at its own discretion in the CO2 allowance auction calendar.
Registration Document 2016. TOTAL
65
4 Risks and control
Risk Factors
In addition, TOTAL’s ability to discover or acquire and develop new
reserves successfully is uncertain and can be negatively affected by
a number of factors, including:
– the geological nature of oil and gas fields, notably unexpected
drilling conditions including pressure or unexpected
heterogeneities in geological formations;
– the risk of dry holes or failure to find expected commercial
quantities of hydrocarbons;
– equipment failures, fires, blow-outs or accidents;
– shortages or delays in the availability or delivery of appropriate
equipment;
– the Group’s inability to develop or implement new technologies
that enable access to previously inaccessible fields;
– the Group’s inability to anticipate market changes in a timely manner;
– adverse weather conditions;
– the inability of the Group’s partners to execute or finance projects
in which the Group holds an interest or to meet their contractual
obligations;
– the inability of service companies to deliver contracted services
on time and on budget;
– compliance with both anticipated and unanticipated
governmental requirements, including U.S. and EU regulations
that may give a competitive advantage to companies not subject
to such regulations;
– economic or political risks, including threats specific to a certain
country or region, such as terrorism, social unrest or other
conflicts (refer to point 1.6 of this chapter);
– competition from oil and gas companies for the acquisition
and development of assets and licenses (refer to point 1.7
of this chapter);
estimates indicate, the Group’s financial condition, including
its operating income and cash flow, could be negatively impacted.
The Group’s proved reserves figures are estimates prepared in
accordance with SEC rules. Proved reserves are those reserves
which, by analysis of geoscience and engineering data, can be
estimated with reasonable certainty to be economically
recoverable – from a given date forward, from known reservoirs and
under existing economic conditions, operating methods and
government regulations – prior to the time at which contracts
providing the right to operate expire, unless evidence indicates that
renewal is reasonably certain, regardless of whether deterministic or
probabilistic methods are used for the estimation. Reserves are
estimated by teams of qualified, experienced and trained
geoscientists, petroleum engineers and project engineers, who
rigorously review and analyze in detail all available geoscience and
engineering data (e.g., seismic data, electrical logs, cores, fluids,
pressures, flow rates, facilities parameters). This process involves
making subjective judgments, including with respect to the estimate
of hydrocarbons initially in place, initial production rates and
recovery efficiency, based on available geological, technical and
economic data. Consequently, estimates of reserves are not exact
measurements and are subject to revision.
A variety of factors that are beyond the Group’s control could cause
such estimates to be adjusted downward in the future, or cause the
Group’s actual production to be lower than its currently reported
proved reserves indicate. Such factors include:
– a prolonged period of low prices of oil or gas, making reserves
no longer economically viable to exploit and therefore not
classifiable as proved;
– increased taxes and royalties, including retroactive claims and
– an increase in the price of oil or gas, which may reduce the
changes in regulations and tax reassesments;
– disputes related to property titles.
These factors could lead to cost overruns and could impair the
Group’s ability to complete a development project or make
production economical. Some of these factors may also affect the
Group’s projects and facilities further down the oil and gas chain.
If TOTAL fails to develop new reserves cost-effectively and in
sufficient quantities, the Group’s financial condition, including its
operating income and cash flow, could be materially affected.
The Group’s oil and gas reserves data are estimates only and
subsequent downward adjustments are possible. If actual
production from such reserves proves to be lower than current
reserves to which the Group is entitled under production sharing
and risked service contracts and other contractual terms;
– changes in tax rules and other regulations that make reserves no
longer economically viable to exploit; and
– the actual production performance of the Group’s deposits.
The Group’s reserves estimates may therefore require substantial
downward revisions should its subjective judgments prove not to
have been conservative enough based on the available geoscience
and engineering data, or the Group’s assumptions regarding factors
or variables that are beyond its control prove to be incorrect over
time. Any downward adjustment could indicate lower future
production amounts, which could adversely affect the Group’s
financial condition, including its operating income and cash flow.
1.5. Risks related to equity affiliates and management of assets operated
by third parties
Many of the Group’s projects are conducted by equity affiliates
or are operated by third parties. For these projects, the Group’s
degree of control, as well as its ability to identify and manage
risks, may be reduced.
A significant number of the Group’s projects are conducted by
equity affiliates. In cases where the Group’s company is not the
operator, such company may have limited influence over, and
control of, the behavior, performance and costs of the partnership,
its ability to manage risks may be limited and it may, nevertheless,
be prosecuted by regulators or claimants in the event of an incident.
For additional information, refer to Note 8 (“Equity affiliates, other
titles and related parties”) to the Consolidated Financial Statements
(point 7 of chapter 10).
Additionally, the partners of the Group may not be able to meet
their financial or other obligations to the projects, which may
threaten the viability of a given project. These partners may also not
have the financial capacity to fully indemnify the Group or third
parties in the event of an incident.
With respect to joint ventures, contractual terms generally provide
that the operator, whether an entity of the Group or a third party,
assumes full liability for damages caused by its gross negligence or
willful misconduct.
66
TOTAL. Registration Document 2016
Risks and control 4
Risk Factors
In the absence of the operator’s gross negligence or willful
misconduct, other liabilities are generally borne by the joint venture
and the cost thereof is assumed by the partners of the joint venture
in proportion to their respective ownership interests.
With respect to third-party providers of goods and services, the
amount and nature of the liability assumed by the third party
depends on the context and may be limited by contract. Contracts
may also contain obligations to indemnify TOTAL or for TOTAL to
indemnify co-contracting parties or third parties.
1.6. Risks related to political or economic factors
TOTAL has significant production and reserves located in
politically, economically and socially unstable areas, where the
likelihood of material disruption of the Group’s operations is
relatively high.
A significant portion of TOTAL’s oil and gas production and reserves
is located in countries that are not part of the Organisation for
Economic Co-operation and Development (OECD). In recent years,
a number of these countries have experienced varying degrees of
one or more of the following: economic or political instability, civil
war, violent conflict, social unrest, actions of terrorist groups and
the application of international economic sanctions. Any of these
conditions alone or in combination could disrupt the Group’s
operations in any of these regions, causing substantial declines in
production or revisions to reserves estimates.
In Africa, which represented 26% (1) of the Group’s 2016 combined
liquids and gas production, certain of the countries in which the
Group has production have recently suffered from some of these
conditions, including Nigeria, which is one of the main contributing
countries to the Group’s production of hydrocarbons, and Libya
(refer to point 2.1.1.8 of chapter 2).
The Middle East, which represented 21% (2) of the Group’s 2016
combined liquids and gas production, has in recent years suffered
increased political volatility in connection with violent conflict and
social unrest, including Syria, where European Union (EU) and U.S.
economic sanctions have prohibited TOTAL from producing oil and
gas since 2011. In Yemen, the deterioration of security conditions in
the vicinity of Balhaf caused the company Yemen LNG, in which the
Group holds a stake of 39.62%, to stop its commercial production
and export of LNG and to declare force majeure to its various
stakeholders in 2015. The plant has been put in preservation mode.
In Iran, following the suspension on January 16, 2016 of UN
economic sanctions, most U.S. secondary sanctions and most EU
economic sanctions, the Group has engaged in certain activities.
However, sanctions could be reinstated unilaterally in the event of a
dispute over Iran’s compliance with its nuclear commitments or in
certain other cases. For additional information, refer to points 1.9.1
and 1.9.2 of this chapter.
In South America, which represented 6% of the Group’s 2016, combined
liquids and gas production, certain of the countries in which TOTAL
has production have recently suffered from some of the above-
mentioned conditions, including Argentina, Brazil and Venezuela.
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 TOTAL
has 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 and / or cause certain
investors to reduce their holdings of TOTAL’s securities.
TOTAL, like other major international energy 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 political and economic risks. However, there
can be no assurance that such events will not have a material
adverse impact on the Group.
Intervention by host country authorities can adversely affect
the Group’s activities and its operating results.
TOTAL has significant exploration and production activities, and in
some cases refining, marketing or chemicals operations, in
countries whose governmental and regulatory framework is subject
to unexpected change and where the enforcement of contractual
rights is uncertain. 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 risks of renegotiation that, in certain cases,
can reduce or challenge the protections offered by the initial legal
framework and / or the economic benefit to TOTAL.
In addition, the Group’s exploration and production activities in
such countries are often undertaken in conjunction with state-
owned entities, for example as part of a joint venture in which the
state has a significant degree of control. In recent years, in various
regions globally, TOTAL has observed governments and state-
owned enterprises impose more stringent conditions on companies
pursuing exploration and production activities in their respective
countries, increasing the costs and uncertainties of the Group’s
business operations. TOTAL expects this trend to continue.
Potential increasing intervention by governments in such countries
can take a wide variety of forms, including:
Since July 2014, international economic sanctions have been
adopted against certain Russian persons and entities, including
various entities operating in the financial, energy and defense
sectors. As of December 31, 2016, TOTAL held nearly 21% of its
proved reserves in Russia, where from the Group had 14% of its
combined oil and gas production in 2016. For additional
information, refer to point 1.9.1 of this chapter.
– the award or denial of exploration and production interests;
– the imposition of specific drilling obligations;
– price and / or production quota controls and export limits;
– nationalization or expropriation of assets;
– unilateral cancellation or modification of license or contract rights;
– increases in taxes and royalties, including retroactive claims and
changes in regulations and tax reassesments;
(1) Excluding North Africa.
(2) Including North Africa.
Registration Document 2016. TOTAL
67
4 Risks and control
Risk Factors
– the renegotiation of contracts;
– the imposition of increased local content requirements;
– payment delays; and
– currency exchange restrictions or currency devaluation.
If a host government were to intervene in one of these forms in a
country where TOTAL has substantial operations, including
exploration, the Group could incur material costs or the Group’s
production or asset value could decrease, which could potentially
have a material adverse effect on its financial condition, including its
operating income and cash flow.
For example, the Nigerian government has been contemplating
new legislation to govern the petroleum industry which, if passed
into law, could have an impact on the existing and future activities
of the Group in that country through increased taxes and / or
operating costs and could adversely affect financial returns from
projects in that country.
1.7. Risks related to competition and lack of innovation
The Group operates in a highly competitive environment. Its
competitiveness could be adversely impacted if the Group’s
level of innovation lagged behind its competitors.
TOTAL’s main competitors are comprised of national and international
oil companies. The evolution of the energy sector has opened the
door to new competitors and increased market price volatility.
TOTAL is subject to competition 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. In the gas sector, major producers increasingly compete
in the downstream value chain with established distribution
companies. Increased competitive pressure could have a significant
negative effect on the prices, margins and market shares of the
Group’s companies.
The pursuit of unconventional gas development, particularly in the
United States, has contributed to falling market prices and a
marked difference between spot and long-term contract prices.
The competitiveness of long-term contracts indexed to oil prices
could be affected if this discrepancy persists and if it should prove
difficult to invoke price revision clauses.
The Group’s activities are carried out in a constantly changing
environment with new products and technologies continuously
emerging. The Group may not be able to anticipate these changes,
identify and integrate technological developments in order to
maintain its competitiveness, maintain a high level of performance
and operational excellence, and best meet the needs and demands
of its customers. The Group’s innovation policy requires significant
investment, notably in R&D, of which the expected impact cannot
be guaranteed.
In the field of R&D, the multiplication of research partnerships, in
particular in related technical fields, may make it difficult for the
Group to track technical information exchanged with research
partners and monitor related contractual restrictions (e.g.,
confidentiality, limited use). New and increasingly complex digital
technologies as well as the multiplication of partnerships are all
likely to increase contamination risks, which could, as a result, limit
TOTAL’s ability to exploit innovations.
1.8. Ethical misconduct and non-compliance risks
Ethical misconduct or breaches of applicable laws by employees
of the Group could expose TOTAL to criminal and civil penalties
and be damaging to TOTAL’s reputation and shareholder value.
The Group’s Code of Conduct, which applies to all of its
employees, defines TOTAL’s commitment to business integrity and
compliance with all applicable legal requirements and high ethical
standards. This commitment is supported by a “zero tolerance”
principle. Ethical misconduct (notably with respect to human rights)
or non-compliance with applicable laws and regulations (including
corruption, fraud and competition laws) by TOTAL or any third party
acting on its behalf could expose TOTAL and / or its employees to
criminal and civil penalties and could be damaging to TOTAL’s
reputation and shareholder value.
In addition, such misconduct or non-compliance may lead the
competent authorities to impose other measures, such as the
appointment of an independent monitor in charge of assessing the
Group’s compliance and internal control procedures and, if need
be, recommending improvements. For an overview of the
settlements between TOTAL, the SEC and the Department of
Justice (DoJ) providing for the appointment of an independent
monitor, refer to point 4.3 of this chapter and point 3.7 of chapter 7.
Generally, entities of the Group could potentially be subject to
administrative, judicial or arbitration proceedings that could have a
material adverse impact on the Group’s financial condition and
reputation (refer to point 2 of this chapter).
68
TOTAL. Registration Document 2016
Risks and control 4
Risk Factors
1.9. Countries targeted by economic sanctions
TOTAL has activities in certain countries targeted by economic
sanctions. If the Group’s activities are not conducted in
accordance with applicable laws and regulations, TOTAL
could be sanctioned.
Various members of the international community have targeted
certain countries, including Iran and Syria, as well as certain
economic sectors in Russia, with economic sanctions and other
restrictive measures. U.S. and European restrictions relevant to the
Group and certain disclosure concerning the Group’s limited
activities or presence in certain targeted countries are outlined
below in points 1.9.1 and 1.9.2, respectively.
1.9.1. U.S. and European legal restrictions
TOTAL continues to closely monitor the possible impacts of
international economic sanctions regimes on its activities. The
Group does not believe that its activities in targeted countries are in
violation of applicable economic sanctions administered by the
United States, the European Union (“EU”) and other members of
the international community. However, the Group cannot assure
that current or future regulations or developments related to
economic sanctions will not have a negative impact on its business,
financial condition or reputation. A violation by the Group of
applicable laws or regulations could result in criminal, civil and / or
material financial penalties.
Restrictions against Iran
On July 14, 2015, the EU, China, France, Russia, the United
Kingdom, the United States and Germany reached an agreement
with Iran, known as the Joint Comprehensive Plan of Action (the
“JCPOA”), regarding limits on Iran’s nuclear activities and relief
under certain U.S., EU and UN economic sanctions regarding Iran.
On January 16, 2016, the International Atomic Energy Agency
(“IAEA”) confirmed that Iran had met its initial nuclear compliance
commitments under the JCPOA. Therefore, as from that date, UN
economic sanctions, most U.S. secondary sanctions (i.e., those
covering non-U.S. persons (1)) and most EU economic sanctions
were suspended (2)). Sanctions could, however, be reinstated
unilaterally by any participant in the event of a dispute over Iran’s
compliance with its nuclear commitments or in certain other cases.
TOTAL is closely monitoring developments in this regard.
With respect to the Group’s activities conducted under the
sanctions framework that was in place prior to the JCPOA
sanctions relief, the U.S. Department of State made a determination
on September 30, 2010 that certain historical activities would not
be deemed sanctionable and that, so long as TOTAL acts in
accordance with its commitments related to this determination, it
will not be regarded as a company of concern for its past Iran-
related activities. Since 2011, TOTAL has had no production in Iran.
Certain U.S. states have adopted legislation with respect to Iran
requiring, in certain conditions, state pension funds to divest
securities in any company with active business operations in Iran
and state contracts not to be awarded to such companies. State
regulators have adopted similar initiatives relating to investments by
insurance companies. These measures are generally still in effect
despite the JCPOA sanctions relief. If TOTAL’s activities in Iran were
determined to fall within the scope of these prohibitions, and in the
absence of any available exemptions, certain U.S. institutions
holding interests in TOTAL may be required to sell their interests.
On November 8, 2016, TOTAL signed a heads of agreement
(“HOA”) with the National Iranian Oil Company (“NIOC”), which was
removed on January 16, 2016 from the U.S. and EU sanctions
designation lists. The HOA contemplates that the parties will
negotiate an agreement for the development of phase 11 of South
Pars gas field in Iran. For additional information regarding this HOA,
refer to point 1.9.2, below.
TOTAL believes that its current activities in Iran or involving Iranian
persons comply with the EU and U.S. sanctions that remain in force
in respect of Iran.
Restrictions against Syria
The EU adopted measures in 2011 regarding trade with and
investment in Syria that are applicable to European persons and to
entities constituted under the laws of an EU Member State,
including, notably, a prohibition on the purchase, import or
transportation from Syria of crude oil and petroleum products.
The United States also has adopted comprehensive measures that
broadly prohibit trade and investment in Syria. Since 2011, the
Group has ceased activities that contribute to oil and gas production
in Syria and has not purchased hydrocarbons from Syria.
Restrictions against Russia
Since July 2014, international economic sanctions have been adopted
against certain Russian persons and entities, including various
entities operating in the financial, energy and defense sectors.
The economic sanctions adopted by the EU since 2014 do not
materially affect TOTAL’s activities in Russia. TOTAL has been
formally authorized by the French government, which is the
competent authority for granting authorization under the EU
sanctions regime, to continue all its activities in Russia (on the
Kharyaga and Termokarstovoye fields and the Yamal LNG project).
The United States has notably adopted economic sanctions targeting
PAO Novatek (3) (“Novatek”), as well as entities in which Novatek
(individually or with other similarly targeted persons or entities
collectively) owns an interest of at least 50%, including OAO Yamal
LNG (4) (“Yamal LNG”) and Terneftegas (5). These sanctions prohibit
U.S. persons from transacting in, providing financing for or otherwise
dealing in debt issued by these entities after July 16, 2014 of greater
than 90 days maturity. Consequently, the use of the U.S. dollar for
such financing, including for Yamal LNG, is effectively prohibited.
The Yamal LNG project’s financing was finalized in successive steps
in 2016 in compliance with applicable regulations.
(1) For purposes of this chapter, “U.S. person” means any U.S. citizen and permanent resident alien wherever they are in the world, entity organized under the laws of the United States or any
jurisdiction within the United States, including foreign branches, or any person or entity located in the United States.
(2) Certain limited U.S. and EU human rights-related and terrorism-related sanctions remain in force.
(3) A Russian company listed on the Moscow and London stock exchanges and in which the Group held an interest of 18.9% as of December 31, 2016.
(4) A company jointly owned by PAO Novatek (50.1%), Total E&P Yamal (20%), CNODC (20%), a subsidiary of China National Petroleum Corporation (“CNPC”) and Silk Road Fund (9.9%).
(5) A company jointly owned by PAO Novatek (51%) and Total Termokarstovoye BV (49%).
Registration Document 2016. TOTAL
69
4 Risks and control
Risk Factors
TOTAL’s activities in Russia are also not materially affected by
restrictive measures adopted by the United States in August 2015
imposing export controls and restrictions relating to the export of
certain goods, services, and technologies destined for projects
located in Russia in the field of oil exploration.
As of December 31, 2016, TOTAL held nearly 21% of its proved
reserves in Russia, where from the Group had 14% of its combined
oil and gas production in 2016.
TOTAL continues to closely monitor the different international
sanctions regimes targeting certain sectors of the economy of
Russia, and in particular, it closely monitors the potential imposition
of additional sanctions.
1.9.2. Information concerning certain limited
activities in Iran and Syria
Provided in this section is certain information concerning TOTAL’s
activities related to Iran that took place in 2016 that is required to
be disclosed pursuant to Section 13(r) of the Securities Exchange
Act of 1934, as amended (“U.S. Exchange Act”). In addition,
information for 2016 is provided concerning the various types of
payments made by Group affiliates to the government of any
country identified by the United States as a state sponsor of
terrorism (currently, Iran, Syria and Sudan (1)) or any entity controlled
by those governments. TOTAL believes that these activities are not
sanctionable and has not been informed that it is at risk of possible
imposition of sanctions for activities previously disclosed. For more
information on certain U.S. and EU restrictions relevant to TOTAL in
these jurisdictions, see point 1.9.1 above.
Iran
The Iran Threat Reduction and Syria Human Rights Act of 2012
(“ITRA”) added Section 13(r) to the U.S. Exchange Act, which
requires TOTAL to disclose whether it or any of its affiliates has
engaged during the calendar year in certain Iran-related activities,
including those targeted under ISA, without regard to whether such
activities are sanctionable under ISA, and any transaction or dealing
with the Government of Iran that is not conducted pursuant to a
specific authorization of the U.S. government. While neither TOTAL
S.A. nor any of its affiliates have engaged in any activity that would
be required to be disclosed pursuant to subparagraphs (A), (B) or (C)
of Section 13(r) (1), affiliates of the Company may be deemed to
have engaged in certain transactions or dealings with the
government of Iran that would require disclosure pursuant to
Section 13(r) (1) (D), as discussed below.
Upstream
Following the suspension of certain international economic
sanctions against Iran on January 16, 2016 (as described in point
1.9.1 of this chapter), the Group commenced various business
development activities in Iran. TOTAL entered into a memorandum
of understanding (“MOU”) with the National Iranian Oil Company
(“NIOC”), pursuant to which NIOC provided technical data on
certain oil and gas projects so that TOTAL could assess potential
developments in Iran in compliance with the remaining applicable
international economic sanctions. TOTAL subsequently proposed
to develop and operate the South Pars Phase 11 gas field offshore
Iran in the Persian Gulf along the international border with Qatar.
This resulted in the negotiation and signing, on November 8, 2016,
of a heads of agreement (“HOA”) for the development and
operation of the field. The parties to the HOA are NIOC, Total E&P
South Pars S.A.S. (a wholly owned affiliate of TOTAL S.A.), CNPC
International Ltd. (a wholly owned affiliate of China National
Petroleum Company) and Petropars Ltd. (a wholly owned affiliate of
NIOC). The HOA contains the key principles and commercial terms
that will be adopted in a definitive contract for the development and
operation of South Pars Phase 11, should such definitive contract
be finally agreed. The project is expected to have a production
capacity of 370,000 boe / d and the produced gas will be fed into
Iran’s gas network. TOTAL is expected to operate the project with a
50.1% interest alongside Petropars (19.9%) and CNPC (30%). The
required investment is expected to be approximately $4 billion, of
which TOTAL would finance 50.1%, with all equity contributions
and payments in non-U.S. currency. In preparation for the South
Pars Phase 11 project, TOTAL commenced engineering and
reservoir studies, which were presented in part to Pars Oil & Gas
Company (a NIOC affiliate) in 2016 during a technical workshop. In
the event of new or reinstated international economic sanctions, if
such sanctions were to prevent the Group from performing under
the anticipated contract for South Pars Phase 11, TOTAL expects
to be able to terminate the contract and recover its past costs from
NIOC (unless prevented by sanctions).
Regarding other potential oil and gas projects covered by the
aforementioned MOU, TOTAL held technical meetings in 2016 with
representatives of NIOC and its affiliated companies and carried out
a technical review of the South Azadegan oil field in Iran as well as
the Iran LNG Project (a project contemplating a 10 Mt / y LNG
production facility at Tombak Port on Iran’s Persian Gulf coast), the
results of which were partially disclosed to NIOC and relevant
affiliated companies.
In addition, in connection with anticipated activities under the
aforementioned MOU and HOA, TOTAL attended meetings in 2016
with the Iranian oil and gas ministry and several Iranian companies
with ties to the government of Iran.
Also in 2016, TOTAL was selected, along with other international oil
and gas companies, to form an advisory group to the oil and gas
ministries of Iran and Oman concerning a possible future gas
pipeline between the two countries. In that regard, TOTAL entered
into a confidentiality agreement and attended meetings with these
companies and ministries.
In addition, TOTAL registered in 2016 a branch office of a new
entity, Total Iran B.V., a wholly-owned affiliate of TOTAL S.A., the
purpose of which is to serve as the representation office for the
Group in Iran. This entity replaces Total E&P Iran, which previously
served the same purpose, but only for Exploration & Production.
Neither revenues nor profits were recognized from any of the
aforementioned activities in 2016, and the Group expects to
conduct similar business development activities in 2017.
Some payments are yet to be reimbursed to the Group with respect
to past expenditures and remuneration under buyback contracts
entered into between 1997 and 1999 with NIOC for the
development of the South Pars 2&3 and Dorood fields. With
respect to these contracts, development operations were
completed in 2010 and the Group is no longer involved in the
operation of these fields.
(1) Since the independence of the Republic of South Sudan on July 9, 2011, TOTAL is no longer present in Sudan.
70
TOTAL. Registration Document 2016
Risks and control 4
Risk Factors
Concerning payments to Iranian entities in 2016, Total E&P Iran
(100%), Elf Petroleum Iran (99.8%), Total Sirri (100%) and Total
South Pars (99.8%) collectively made payments of approximately
IRR 3 billion (approximately $0.1 million (1)) to (i) the Iranian
administration for taxes and social security contributions
concerning the personnel of the aforementioned local office and
residual buyback contract-related obligations, and (ii) Iranian public
entities for payments with respect to the maintenance of the
aforementioned local office (e.g., utilities, telecommunications).
TOTAL expects similar types of payments to be made by these
affiliates in 2017 albeit in higher amounts due to increased business
development activity in Iran. Neither revenues nor profits were
recognized from the aforementioned activities in 2016.
Furthermore, Total E&P UK Limited (“TEP UK”), a wholly-owned
affiliate of TOTAL, holds a 43.25% interest in a joint venture at the
Bruce field in the UK with BP Exploration Operating Company
Limited (37.5%, operator), BHP Billiton Petroleum Great Britain Ltd
(16%) and Marubeni Oil & Gas (North Sea) Limited (3.75%). This
joint venture is party to an agreement (the “Bruce Rhum
Agreement”) governing certain transportation, processing and
operation services provided to a joint venture at the Rhum field in
the UK that is co-owned by BP (50%, operator) and the Iranian Oil
Company UK Ltd (“IOC”), a subsidiary of NIOC (50%) (together, the
“Rhum Owners”). TEP UK owned and operated the pipeline of the
Frigg UK Association and the St Fergus Gas Terminal and was
party to an agreement governing provision of transportation and
processing services to the Rhum Owners (the “Rhum FUKA
Agreement”) (the Bruce Rhum Agreement and the Rhum FUKA
Agreement being referred to collectively as the “Rhum
Agreements”). On August 27, 2015, TEP UK signed a sale and
purchase agreement to divest its entire interest in the Frigg UK
Association pipeline and St Fergus Gas Terminal to NSMP
Operations Limited (“NSMP”). On March 15, 2016, the divestment
was completed and TEP UK’s interest in the Rhum FUKA
Agreement was novated to NSMP. As from this date, TEP UK’s only
interest in the Rhum FUKA Agreement is in relation to the
settlement of historical force majeure claims with the Rhum Owners
relating to the period when the Rhum field was shut down. To
TOTAL’s knowledge, provision of all services under the Rhum
Agreements was initially suspended in November 2010, when the
Rhum field stopped production following the adoption of EU
sanctions, other than critical safety-related services (i.e., monitoring
and marine inspection of the Rhum facilities), which were permitted
by EU sanctions regulations. On October 22, 2013, the UK
government notified IOC of its decision to apply a temporary
management scheme to IOC’s interest in the Rhum field within the
meaning of UK Regulations 3 and 5 of the Hydrocarbons
(Temporary Management Scheme) Regulations 2013 (the
“Hydrocarbons Regulations”). From October 22, 2013 until the
termination of the temporary management scheme on March 16,
2016 (as further explained below), all correspondence by TEP UK in
respect of IOC’s interest in the Rhum Agreements was with the UK
government in its capacity as temporary manager of IOC’s
interests. On December 6, 2013, the UK government authorized
TEP UK, among others, under Article 43a of EU Regulation
267 / 2012, as amended by 1263 / 2012 and under Regulation 9 of
the Hydrocarbons Regulations, to carry out activities in relation to
the operation and production of the Rhum field. In addition, on
September 4, 2013, the U.S. Treasury Department issued a license
to BP authorizing BP and certain others to engage in various
activities relating to the operation and production of the Rhum field.
Following receipt of all necessary authorizations, the Rhum field
resumed production on October 26, 2014 with IOC’s interest in the
Rhum field and the Rhum Agreements subject to the UK
government’s temporary management pursuant to the
Hydrocarbons Regulations. Services were provided by TEP UK
under the Rhum Agreements from October 26, 2014 and TEP UK
received tariff income and revenues from BP and the UK
government (in its capacity as temporary manager of IOC’s interest
in the Rhum field) in accordance with the terms of the Rhum
Agreements until the termination of the temporary management
scheme in March 2016. As IOC ceased to be a listed person within
the meaning of the Hydrocarbons Regulations on January 16,
2016, the UK government gave notice to IOC on January 22, 2016
of the termination of the temporary management scheme with
effect from March 16, 2016 in accordance with regulation 26(1) (a)
and 27(1) (a) of the Hydrocarbons Regulations. As a result, since
March 16, 2016, TEP UK has liaised directly with IOC concerning
its interest in the Bruce Rhum Agreement, and services have been
provided by TEP UK under the Bruce Rhum Agreement to IOC as
Rhum Owner. In 2016, these activities generated for TEP UK gross
revenue of approximately £8 million (approximately $9.8 million) and
net profit of approximately £0.20 million (approximately $0.25 million).
Subject to the foregoing, TEP UK intends to continue such activities
so long as they continue to be permissible under UK and EU law
and not be in breach of remaining applicable international economic
sanctions.
Downstream
The Group does not own or operate any refineries or chemicals
plants in Iran and did not purchase Iranian hydrocarbons when
prohibited by applicable EU and U.S. economic and financial
sanctions (refer to point 1.9.1, above).
The Group resumed its trading activities with Iran in February 2016
via its wholly-owned affiliates Totsa Total Oil Trading S.A. and Total
Trading Asia Pte Ltd. During 2016, approximately 50 Mb of crude
oil from Iran were purchased for nearly €1.8 billion (nearly $1.9 billion)
pursuant to a mix of spot and term contracts. Most of this crude oil
was used to supply the Group’s refineries and, therefore, it is not
possible to estimate the related gross revenue and net profit.
However, approximately 1.4 Mb of this crude oil were sold to entities
outside of the Group. In addition, in 2016 approximately 11 Mb of
petroleum products were bought from / sold to entities with ties to
the government of Iran. These operations generated gross revenue
of nearly €374 million (nearly $394 million) and net profit of
approximately €2.7 million (approximately $2.8 million). The affiliates
expect to continue these activities in 2017.
Saft Groupe S.A. (“Saft”), a wholly-owned affiliate of the Group, in
2016 sold signaling and backup battery systems for metros and
railways as well as products for the utilities and oil and gas sectors
to companies in Iran, including some having direct or indirect ties
with the Iranian government. In 2016, this activity generated gross
revenue of approximately €5.6 million (approximately $5.9 million)
and net profit of approximately €0.80 million (approximately
$0.84 million). Saft expects to continue this activity in 2017.
(1) Unless otherwise indicated, all non-USD currencies presented in this point 1.9.2 were converted to USD using the prevailing exchange rates available on February 28, 2017.
Registration Document 2016. TOTAL
71
4 Risks and control
Risk Factors
Saft also attended the Iran Oil Show in 2016, where it discussed
business opportunities with Iranian customers, including those with
direct or indirect ties with the Iranian government. Saft expects to
conduct similar business development activities in 2017.
Total Solar (formerly named Total Énergie Développement), a
wholly-owned affiliate of the Group, had preliminary discussions in
2016 regarding the potential development of solar projects with
companies in Iran, including some having direct or indirect ties with
the Iranian government. Neither revenues nor profits were
recognized from this activity in 2016, and Total Solar expects to
continue this activity in 2017.
TOTAL S.A. signed in 2016 a non-binding memorandum of
understanding with the National Petrochemical Company, a
company owned by the government of Iran, to consider a project
for the construction in Iran of a steamcracker and polyethylene
production lines. In relation to the early stages of this project,
several visits to Iran were conducted in 2016. TOTAL S.A. recognized
no revenue or profit from this activity in 2016 and similar activities
are expected to continue in 2017.
Representatives of the companies Le Joint Français (a subsidiary of
Hutchinson SA) and Hutchinson SNC, wholly-owned affiliates of the
Group, conducted multiple visits to Iran in 2016 to discuss
business opportunities in the car industry sector with several
companies, including some having direct or indirect ties with the
Iranian government. These companies recognized no revenue or
profit from this activity in 2016 and expect to continue such
discussions in the future.
Hutchinson Gmbh, a wholly-owned affiliate of the Group, sold
plastic tubing for automobiles in 2016 to Ikco, an affiliate of Iran
Khodro, a company in which the government of Iran holds a 20%
interest and which is supervised by Iran’s Industrial Management
Organization. In 2016, these activities generated gross revenue
of approximately €1.05 million (approximately $1.11 million) and net
profit of approximately €150,000 (approximately $158,000). This
company expects to continue this activity in 2017.
Hanwha Total Petrochemicals (“HTC”), a joint venture in which Total
Holdings UK Limited (a wholly-owned affiliate of TOTAL) holds a
50% interest and Hanwha General Chemicals holds a 50% interest,
purchased nearly 25 Mb of condensates from NIOC for
approximately KRW 1,300 billion (approximately $1,1 billion). These
condensates are used as raw material for certain of the Group’s
steamcrackers. HTC expects to continue this activity in 2017.
Total Research & Technology Feluy (“TRTF”), a wholly-owned
affiliate of TOTAL, commenced in 2016 the process to file a patent
in Iran concerning metallocene technology. Related to this process,
TRTF had contacts with Iranian government officials, but no fees
were paid. TRTF expects to continue the patent filing process in 2017.
Until December 2012, at which time it sold its entire interest, the
Group held a 50% interest in the lubricants retail company Beh
Total (now named Beh Tam) along with Behran Oil (50%), a
company controlled by entities with ties to the government of Iran.
As part of the sale of the Group’s interest in Beh Tam, TOTAL S.A.
agreed to license the trademark “Total” to Beh Tam for an initial 3-
year period for the sale by Beh Tam of lubricants to domestic
consumers in Iran. In 2014, Total E&P Iran (“TEPI”), a wholly-owned
affiliate of TOTAL S.A., received, on behalf of TOTAL S.A., royalty
payments of approximately IRR 24 billion (nearly $1 million (1)) from
Beh Tam for such license. These payments were based on Beh
Tam’s sales of lubricants during the previous calendar year. In 2015,
royalty payments were suspended due to a procedure brought by
the Iranian tax authorities against TEPI. At the end of 2016, this
procedure was still pending and no royalty payments had been
received since 2015. Representatives of Total Outre Mer, a wholly-
owned affiliate of the Group, made several visits to Beh Tam and
Behran Oil during 2016 regarding the possible purchase of shares
of Beh Tam. Subsequent to an internal reorganization, the matter
was transferred to Total Oil Asia-Pacific Ltd, another wholly-owned
affiliate of the Group, which had several exchanges with
representatives of Behran Oil. As of the end of 2016, no agreement
had been reached, no money was paid or received by either
company. Similar discussions may take place in the future.
Total Marketing Middle East FZE (“TMME”), a wholly-owned affiliate
of the Group, sold lubricants to Beh Tam in 2016. The sale in 2016
of approximately 54 t of lubricants and special fluids generated
gross revenue of approximately AED 420,000 (approximately
$114,000) and net profit of approximately AED 360,000 (approximately
$98,000). TMME expects to continue this activity in 2017.
Total Marketing France (“TMF”), a company wholly-owned by Total
Marketing & Services (“TMS”), itself a company wholly-owned by
TOTAL S.A. and six Group employees, provided in 2016 fuel
payment cards to the Iranian embassy in France for use in the Group’s
service stations. In 2016, these activities generated gross revenue
of nearly €22,000 (approximately $23,000) and net profit of nearly
€900 (nearly $950). TMF expects to continue this activity in 2017.
TMF also sold jet fuel in 2016 to Iran Air as part of its airplane
refueling activities at Paris Orly airport in France. The sale of
approximately 2.8 million liters of jet fuel generated gross revenue of
approximately €982,000 (approximately $1.03 million) and net profit
of approximately €10,000 (approximately $11,000). TMF expects
to continue this activity in 2017.
Air Total International (“ATI”), a wholly-owned affiliate of the Group,
on two occasions in 2016 sold jet fuel to a broker based at Le
Bourget airport near Paris that was destined for the refueling of an
Iranian government airplane (official presidential / ministerial visits).
These sales generated gross revenue of approximately €8,000
(approximately $8,400) and net profit of approximately €1,600
(approximately $1,700). ATI may conduct similar activities in 2017.
Total Belgium (“TB”), a company wholly-owned by the Group,
provided in 2016 fuel payment cards to the Iranian embassy in
Brussels (Belgium) for use in the Group’s service stations. In 2016,
these activities generated gross revenue of approximately €1,500
(approximately $1,600) and net profit of approximately €300
(approximately $320). TB expects to continue this activity in 2017.
Proxifuel, a company wholly-owned by the Group, sold in 2016
heating oil to the Iranian embassy in Brussels. In 2016, these activities
generated gross revenue of approximately €200 (approximately $210)
and net profit of approximately €80 (approximately $85). Proxifuel
expects to continue this activity in 2017.
Caldeo, a company wholly-owned by TMS, sold in 2016
approximately 3 m³ of domestic heating oil to the Iranian embassy
in France, which generated gross revenue of nearly €435 (nearly
$460) and net profit of nearly €115 (approximately $120). Caldeo
expects to continue this activity in 2017.
(1) Based on an average daily exchange rate of $1 = IRR 0.000039 during 2014, as published by Bloomberg.
72
TOTAL. Registration Document 2016
Legal and arbitration proceedings
Risks and control 4
Total Namibia (PTY) Ltd (“TN”), a wholly-owned affiliate of Total
South Africa (PTY) Ltd (of which the Group holds 50.1%), sold
petroleum products and services during 2016 to Rössing Uranium
Limited, a company in which the Iranian Foreign Investment Co.
holds an interest of 15.3%. In 2016, these activities generated
gross revenue of nearly N$249 million (approximately $19 million)
and net profit of approximately N$8 million (approximately
$0.6 million). TN expects to continue this activity in 2017.
Syria
Since early December 2011, TOTAL has ceased its activities that
contribute to oil and gas production in Syria and maintains a local
office solely for non-operational functions. In late 2014, the Group
initiated a downsizing of its Damascus office and reduced its staff
to a few employees. In 2016, TOTAL made payments of nearly SYP
500,000 (approximately $2,300) to Syrian government agencies in the
form of taxes and contributions for public services rendered in relation
to the maintenance of the aforementioned office and its personnel.
2. Legal and arbitration proceedings
There are no governmental, legal or arbitration proceedings,
including any proceeding of which the Company is aware that are
pending or threatened against the Company, that could have, or
could have had during the last 12 months, a material impact on the
Group’s financial situation or profitability.
former subsidiary of Elf Aquitaine that was liquidated in 2005,
claiming alleged damages of $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 a matter of law and fact.
Described below are the main administrative, legal and arbitration
proceedings in which the Company and the other entities of the
Group are involved.
Alitalia
In the Marketing & Services segment, a civil proceeding was initiated
in Italy, in 2013, against TOTAL S.A. and its subsidiary Total Aviazione
Italia Srl before the competent Italian civil court. The plaintiff claims
against TOTAL S.A., its subsidiary and other third parties, damages
that it estimates to be nearly €908 million. This proceeding follows
practices that had been condemned by the Italian competition
authority in 2006. The parties have exchanged preliminary findings.
The existence and the assessment of the alleged damages in this
procedure involving multiple defendants remain contested.
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.
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 having lapsed. The judgment of the Court of Appeal of
Paris is now final and binding following two decisions issued on
February 18, 2016 by the French Supreme Court to put an end to
this proceeding.
In connection with the same facts, and 15 years after the
aforementioned exploration and production contract was rendered
null and void (“caduc”), a Russian company, which was held not to
be the contracting party to the contract, and two regions of the
Russian Federation that were not even parties to the contract,
launched an arbitration procedure against the aforementioned
The Group has lodged a criminal complaint to denounce the
fraudulent claim of which the Group believes it is a victim and, has
taken and reserved its rights to take all actions and measures to
defend its interests.
FERC
The Office of Enforcement of the U.S. Federal Energy Regulatory
Commission (FERC) began in 2015 an investigation in connection
with the natural gas trading activities in the United States of Total
Gas & Power North America, Inc. (TGPNA), a U.S. subsidiary of the
Group. The investigation covered transactions made by TGPNA
between June 2009 and June 2012 on the natural gas market.
TGPNA received a Notice of Alleged Violations from FERC on
September 21, 2015. On April 28, 2016, FERC issued an order to
show cause to TGPNA and two of its former employees, and to
TOTAL S.A. and Total Gas & Power Ltd., regarding the same facts.
A class action has been launched to seek damages from these
three companies.
TGPNA has cooperated in the investigation with the U.S. authorities
and contests the claims brought against it.
Grande Paroisse
On September 21, 2001, an explosion occurred at the industrial
site of Grande Paroisse (a former subsidiary of Atofina which
became a subsidiary of Elf Aquitaine Fertilisants on December 31,
2004), in a stockpile of ammonium nitrate pellets. The explosion
caused the death of thirty-one people, including twenty-one
workers at the site, injured many others and caused significant
damage on the site and to property in the city of Toulouse.
Grande Paroisse donated the former site of the plant to the greater
agglomeration of Toulouse. A €10 million endowment was also
granted to the InNaBioSanté research foundation as part of the
setting up of a cancer research center at the site.
After many years, the investigating magistrate brought charges
against Grande Paroisse and the former Plant Manager before the
Toulouse Criminal Court. TOTAL S.A. and the CEO at the time of
the event were summoned to appear in Court pursuant to a request
by a victims association.
Registration Document 2016. TOTAL
73
4 Risks and control
Legal and arbitration proceedings
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 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 Court also ruled that the summonses were
inadmissible.
On September 24, 2012, the Court of Appeal convicted the former
Plant Manager and Grande Paroisse. The summonses were
determined to be inadmissible.
On January 13, 2015, the French Supreme Court (Cour de
cassation) fully quashed the decision of September 24, 2012. The
French Supreme Court ruled that the Court of Appeal impartiality
was questionable and that the application of the law on which the
conviction was partially based was improper. The case has been
referred back to the Court of Appeal of Paris for a new criminal trial,
which began in January 2017.
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. A €4.7 million reserve
remains booked in the Group’s Consolidated Financial Statements
as of December 31, 2016.
Iran
In 2003, the Securities and Exchange Commission (SEC) followed
by the Department of Justice (DoJ) issued a formal order directing
an investigation against TOTAL, and others oil companies, for
alleged violations of the Foreign Corrupt Practices Act (FCPA) and
the Company’s accounting obligations in connection with the
pursuit of business in Iran in the 1990s.
In late May 2013, and after several years of discussions, TOTAL
reached settlements with the U.S. authorities (a Deferred
Prosecution Agreement with the DoJ and a Cease and Desist Order
with the SEC). These settlements, which put an end to these
investigations, were concluded without admission of guilt and in
exchange for TOTAL respecting a number of obligations, including
the payment of a fine and civil compensation for an aggregate
amount of $398.2 million. By virtue of these settlements, TOTAL
also accepted the appointment of an independent compliance
monitor to review the Group’s compliance program and to
recommend possible improvements.
In July 2016, the monitor submitted his third and final report, in
which he certified that TOTAL had devised and implemented an
appropriate compliance program. As a result of this certification, the
U.S. authorities, after having reviewed the monitor’s report,
concluded that TOTAL had fulfilled all of its obligations, thus
bringing an end to the monitoring process. As a result, a court in
the State of Virginia granted a motion to dismiss on November 9,
2016, thereby terminating the procedure directed at the Company,
which can no longer be pursued in the United States for these
same facts.
With respect to the same facts, TOTAL was placed under formal
investigation in France in 2012. In October 2014, the investigating
magistrate decided to refer the case to trial.
Italy
As part of an investigation led by the Public Prosecutor of the
Potenza Court in 2007, Total Italia and also certain Group
employees were the subjects of an investigation related to alleged
irregularities in connection with the purchase of lands and the
award of calls for tenders in relation to the preparation and
development of an oil field located in the south of Italy.
Pursuant to a judgment issued on April 4, 2016, the Potenza
Criminal Court found four employees to be guilty of corruption, with
two of these employees also being found guilty of misappropriation
in connection with the purchase of land. The procedure with
respect to Total Italia was sent back to the public prosecutor due to
the imprecision of the terms of prosecution. The four employees
decided to challenge the judgment before the Court of Appeal.
Oil-for-Food Program
Several countries have launched investigations concerning possible
violations of the UN resolutions relating to the Iraqi Oil-for-Food
Program implemented as from 1996.
Pursuant to a French criminal investigation, certain current or
former Group employees were placed under formal criminal
investigation for possible charges as aiding and abetting the
misappropriation of corporate assets and / or as aiding and abetting
the corruption of foreign public agents. In 2010, TOTAL S.A. was
indicted on bribery charges as well as aiding and abetting and
concealing the influence peddling.
On July 8, 2013, TOTAL S.A. and the persons who were
prosecuted were cleared of all charges by the Paris Criminal Court,
which found that none of the offenses for which they had been
prosecuted was established. The Prosecutor’s office appealed the
parts of the Criminal Court’s decision acquitting TOTAL S.A. for
corruption of foreign public agents. On February 26, 2016, the
Court of Appeal of Paris overturned the Criminal Court’s decision
and TOTAL S.A. was convicted and ordered to pay a fine
of €750,000. The Company has decided to appeal this decision
before the French Supreme Court (Cour de cassation).
74
TOTAL. Registration Document 2016
Insurance and risk management
Risks and control 4
3. Insurance and risk management
3.1. Organization
TOTAL has its own reinsurance company, Omnium Reinsurance
Company (ORC). ORC is integrated within the Group’s insurance
management and is used as a centralized global operations tool for
covering the Group companies’ insurable 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, ORC negotiates a retrocession of the covered risks from
the local insurer. As a result, ORC enters into reinsurance contracts
with the subsidiaries’ local insurance companies, which transfer
most of the risk to ORC.
At the same time, ORC negotiates a reinsurance program at the
Group level with oil industry mutual insurance companies and
commercial reinsurance markets. ORC allows 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 2016, the net amount of risk retained by ORC after reinsurance
was, on the one hand, a maximum of $70 million per onshore or
offshore third-party liability insurance claim and, on the other
hand, $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 ORC would be limited
to its maximum retention of $145 million per occurrence.
3.2. 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 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 financial risk from such events to be either
covered internally by the Group or transferred to the insurance
market.
3.3. Insurance policy
The Group has worldwide property insurance and third-party liability
coverage for all its subsidiaries. These programs are contracted
with first-class insurers (or reinsurers and oil and gas industry
mutual insurance companies through ORC).
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: since the maximum financial risk cannot be
evaluated by a systematic approach, the amounts insured are
based on market conditions and oil and gas industry practice. In
2016, the Group’s third-party liability insurance for any liability
(including potential accidental environmental liabilities) was
capped at $900 million (onshore) and $850 million (offshore). In
addition, the Group adopts, where appropriate, the necessary
means to manage the compensation of victims in the event of an
industrial accident for which it is liable; and
– property damage and business interruption: the amounts insured
vary by sector and by site and are based on the estimated cost
and scenarios of reconstruction under maximum loss situations
and on insurance market conditions. The Group subscribed for
business interruption coverage in 2016 for its main refining and
petrochemical sites.
For example, for the Group’s highest risks (North Sea platforms and
main refineries or petrochemical plants), in 2016 the insurance limit
for the Group share of the installations was approximately $1.75
billion for the Refining & Chemicals segment and
approximately $2.15 billion for the Upstream segment.
Deductibles for property damage and third-party liability fluctuate
between €0.1 and €10 million depending on the level of risk and
liability, and are borne by the relevant subsidiaries. For business
interruption, coverage is triggered 60 days after the occurrence
giving rise to the interruption. In addition, the main refineries and
petrochemical plants bear a combined retention for property
damage and business interruption of $75 million per insurance
claim.
Other insurance contracts are bought by the Group in addition to
property damage and third-party liability coverage, mainly in
connection with car fleets, credit insurance and employee benefits.
These risks are mostly underwritten by outside insurance
companies.
The above-described policy is given as an example of a situation as
of a given date 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 General Management’s assessment of the
risks incurred and the adequacy of their coverage.
Registration Document 2016. TOTAL
75
4 Risks and control
Internal control and risk management procedures
TOTAL believes that its insurance coverage is in line with industry
practice and sufficient to cover normal risks in its operations.
However, the Group is not insured against all potential 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 of
the event 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 event of a major environmental
disaster or industrial accident, that such loss would not have a
material adverse effect on the Group.
4. Internal control and risk management procedures
(Article L. 225-37 of the French Commercial Code)
The information related to the internal control and risk management
procedures implemented within the Group presented hereafter forms
part of the Report of the Chairman of the Board of Directors prepared
pursuant to Article L. 225-37 of the French Commercial Code
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.].
The information contained in the Report of the Chairman of the
Board of Directors was prepared with the assistance of several of
the Company’s functional departments, including in particular the
Legal, Finance and Audit & Internal Control Divisions. After the
sections relevant to their respective duties were reviewed by the
Governance and Ethics Committee, the Compensation Committee
and the Audit Committee, the information was approved by the
Board of Directors.
4.1. Basic elements of internal control
The Group is structured around business segments to which the
Group’s operational entities report. The business segments’
management are responsible, within their area of responsibility, for
ensuring that operations are carried out in accordance with the
strategic objectives defined by the Board of Directors and General
Management. The functional departments at the Holding level help
General Management define norms and standards, oversee their
application and monitor activities. They also lend their expertise to
the operational divisions.
The Group’s internal control and risk management systems are
structured around this three-level organization – Holding level,
business segments, operational entities – where each level is
directly involved and accountable in line with the level of delegation
determined by General Management.
General Management constantly strives to maintain an efficient
internal control system across the Group, based on the framework
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
objectives related to operations, reporting and compliance with
applicable laws and regulations are achieved. As for any internal
control system, it cannot provide an absolute guarantee that all
risks are completely controlled or eliminated. The COSO framework
is considered equivalent to the reference framework of the French
Financial Markets Authority (Autorité des marchés financiers). The
Group has also chosen to rely on this framework as part of its
obligations under the Sarbanes-Oxley Act.
The Group’s internal control and risk management systems are
therefore based on the five components of this framework: control
environment, risk assessment, control activities, monitoring and
information, and communication.
The Group’s risk management system draws on the main
international standards (COSO Enterprise Risk Management
integrated framework, ISO 31000: 2009 – Risk management) as
well as on French standards (Reference framework of the French
Financial Markets Authority). The internal Risk Management,
Internal Control and Audit Charter forms the common framework
on which the Group relies to ensure control of its activities.
The Group’s internal control and risk management systems cover
the processes of the fully consolidated entities and the most
important equity affiliates.
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
systems, assisted by the Corporate Audit & Internal Control Division
and the internal control teams from the business segments. These
rules are particularly designed to allow the Board of Directors to
ensure that internal control is effective and that published information
available to shareholders and financial markets is reliable.
Approximately 400 employees monitor the internal control systems
within the Group. The assessment of the internal control and risk
management system is mainly overseen by the Corporate
Audit & Internal Control Division, which employed 77 people in
2016 and carried out more than 165 internal audits.
76
TOTAL. Registration Document 2016
Internal control and risk management procedures
Risks and control 4
4.2. Control environment
TOTAL’s control environment is based primarily on its Code of
Conduct, which, in addition to safety, sets forth its core values
(respect, responsibility and exemplary conduct) and business
principles in terms of safety, security, health, protection of the
environment, integrity and respect for human rights. This Code
of Conduct builds trust between TOTAL and both its employees
and stakeholders.
Integrity and ethics
The Group’s values and business principles are set out in its Code
of Conduct (revised in 2014), its Business Integrity Guide and its
Human Rights Guide (revised in 2015). These documents are
distributed to all employees and are available on the intranet. They
also set out the rules of individual behavior expected of all
employees in the countries where the Group has a presence. The
Group has pledged its adherence to recognized international
standards related to human rights and, in particular, the core
conventions of the International Labour Organization (ILO), the
voluntary principles on security and human rights and the United
Nations guiding principles on business and human rights.
The Financial Code of Ethics, which also refers to the Code of
Conduct, sets forth specific rules for the Chairman and Chief
Executive Officer, the Chief Financial Officer, the Vice President of
the Corporate Accounting Division and the financial and accounting
officers of the principal Group activities.
As a priority of General Management, the Group deploys ethics and
compliance policies and programs, including in particular programs
for the prevention of corruption, fraud and competition law
infringement. These include awareness and training activities as
well as compliance audits and ethical assessments (refer to point
3.7 of chapter 7). The Group also relies on the Ethics Committee,
the role of which is to listen and provide assistance in these areas.
The relationship between the Group and its service providers is also
based on adherence to the principles set forth in the Code of
Conduct and on the Fundamental Principles of Purchasing attached
to contracts. Suppliers and service providers are required to apply
standards equivalent to those of the Group, particularly with respect
to their employees, and to make every effort to encourage their
own suppliers and subcontractors in turn to respect these principles
(for further information about relations between the Group and its
suppliers, refer to point 3.6 of chapter 7).
employees, and (3) internal auditors who, through their internal
control reports, provide recommendations to improve the
effectiveness of the system.
In addition, an accountability system is defined and formalized at all
levels of the organization, through organization notes, organization
charts, appointment notes, job descriptions and delegations of
powers. Each business segment has established clear rules applicable
to its specific scope by directly integrating the Group’s instructions.
Policies and procedures
TOTAL incorporates the values, fundamental principles, strategic
options and respective requirements of the businesses, at all levels
of the organization, into a normative framework, supplemented by a
set of practical recommendations and feedback. Like the Group’s
organization, this framework has a three-level structure: a Group
level, with the REFLEX Group framework and the technical
framework set out by the Corporate Technology Group,
frameworks for each business segment; and a specific framework
for each significant operational entity.
A document known as the governance framework details the
relationship between these frameworks and describes their
respective scope, the way in which the standards differ from one
another (by adaptation, clarification or stricter requirements relative
to higher level standards), exemption processes, if any, standards
development processes and the monitoring system put in place.
The main procedures regarding financial controls established at the
corporate level cover acquisitions and sales, capital expenditure,
financing and cash management, budget control and financial
reporting. Disclosure controls and procedures are in place (refer to
point 4.3.2 below). At the operating levels, these procedures mainly
pertain to directives, rules and recommendations regarding health,
safety, industrial safety, IT security and the environment, as well as
integrity and fraud and corruption prevention.
These documents, all of which are published on the Group’s
intranet, are reviewed regularly and their implementation is monitored.
At the business segment or operational entity levels, control
activities are organized around the main operational processes:
exploration and reserves, procurement, capital expenditure,
production, sales, oil and gas trading, inventories, human resources,
financing and cash management, and account closing process.
Structure, authority and responsibility
Commitment to competence
General Management ensures that the organizational structure and
reporting lines plan, execute, control and periodically assess the
Group’s activities. General Management regularly reviews the
relevance of the organizational structures so as to be able to adapt
them quickly to changes in the activities and in the environment in
which they are carried out.
The Group’s human resources policy sets out rules and practices
that reflect its commitment in terms of social responsibility and its
expectations of employees, particularly in terms of competencies.
Descriptions of jobs within the Group’s various entities define the
competencies and expertise required for employees to carry out
their functions effectively.
The Group has also defined central responsibilities that cover the
three lines of defense of internal control: (1) operational
management, which is responsible for implementing internal
control, (2) support functions (such as Finance, Legal, Human
Resources, etc.), which prescribe the internal control systems,
verify their implementation and effectiveness and assist operational
In addition, the Human Resources function shapes and regularly
updates policies aimed at attracting new talents, including
employee training, assessment and retention policies (annual
appraisals, training programs, compensation policies and career
management – refer to point 1 of chapter 7).
Registration Document 2016. TOTAL
77
4 Risks and control
Internal control and risk management procedures
Accountability
The Board of Directors, with the support of the Audit Committee,
ensures that the internal control functions are operating properly.
The Audit Committee ensures that General Management implements
internal control and risk management procedures based on the
risks identified, such that the Group’s objectives are achieved.
The general managements of the business segments and
operational entities are responsible for designing and deploying
specific components of this internal control and risk management
system within their area of responsibility. A representation letter
process deployed at the various levels of the organization reinforces
the effectiveness of the internal control system, particularly over
financial reporting.
The Internal Control Department has pursued a process aimed at
strengthening the assessment of the role and involvement of all
employees in terms of internal control. Training initiatives tailored to
the various stakeholders involved in the internal control process are
regularly launched within the Group. In 2016, an internal control
seminar brought together over 100 Group employees in addition to
online participants.
Control activities and assessment
The Group regularly examines and assesses the design and
effectiveness of the key operational, financial and information
technology controls related to internal control over financial
reporting, pursuant to Section 404 of the Sarbanes-Oxley Act. In
2016, this assessment was performed with the assistance of the
Group’s main entities and the Corporate Audit & Internal Control
Division. The system used covers:
– the most significant entities, which assess the key operational
controls of their significant processes and respond to a Group
questionnaire for assessing the internal control system; and
– other less significant entities, which respond only to the Group
questionnaire for assessing the internal control system.
4.3. Risk assessment and management
To implement its strategy, General Management ensures that clear
and precise objectives are defined at the various levels of the
organization with regard to operations, reporting and compliance.
Operational objectives focus on the definition and efficient use of
human, financial and technical resources. In particular, they are
defined during the budgetary processes and in the long-term plan,
and are regularly monitored as part of the self-assessment process.
The monitoring of operational objectives (financial and non-financial)
helps in decision-making and monitoring performance of activities
at each level of the organization.
TOTAL has set up an ongoing process to identify and analyze risks
that may affect its employees, assets and environment, and
preclude the achievement of its objectives. The Group takes into
account risks at all levels of the organization and in all its entities,
and examines factors that influence the severity, probability of
occurrence of risks or the loss of its assets and the potential impact
on operations, reporting (financial and non-financial) and
compliance with applicable laws and regulations.
These two categories of entities account for approximately 80%
and 10%, respectively, of the financial aggregates in the Group’s
Consolidated Financial Statements.
In addition, any activity, process or management system may be
the subject of an internal audit conducted by Group Audit, in
accordance with the international internal audit framework and its
Code of Ethics. The Corporate Audit & Internal Control Division also
conducts joint audits with third-party auditors and provides
assistance (advice, analysis, input regarding methodology). The
audit plan, which is based on an analysis of the risks and risk
management systems, is submitted annually to the Executive
Committee and the Audit Committee for approval. The statutory
auditors also review the internal controls that they deem necessary
as part of their certification of the financial statements. In 2016, they
reviewed the implementation of the Group’s internal control
framework and the design and effectiveness of key internal controls
at its main entities regarding financial reporting. Based on their
review, the statutory auditors stated that they had no remarks on
the information and statements presented in this present Report of
the Chairman of the Board of Directors on internal control and risk
management procedures.
The reports on the work performed by the Group Audit and
statutory auditors are periodically summarized and presented
to the Audit Committee and, thereby, to the Board of Directors.
The Senior Vice President, Audit & Internal Control attended all
Audit Committee meetings held in 2016. The Audit Committee also
interviews the statutory auditors at least once a year without any
Company representatives present.
If areas of improvement are identified by these internal audits and
operational controls, then corrective action plans are drawn up and
shared with operational management, who along with the
Corporate Audit & Internal Control Division, monitor them closely.
Based on the internal reviews, General Management has reasonable
assurance of the effectiveness of the Group’s internal control.
The Group has developed a control framework in line with the risk
assessments performed and implements initiatives necessary for
addressing specific risks by enforcing Group-wide rules. These
initiatives must reduce the probability of occurrence of risks and
their possible impact. They also cover the main processes
outsourced via subcontracting agreements.
TOTAL also identifies changes that could have a significant impact
on its internal control system, particularly changes related to assets
consolidated by the business segments. To this end, the Group
relies on governance bodies adapted to its various activities and
capable of making and implementing decisions necessary for quickly
responding to material changes that the Group must deal with.
The risk-mapping activities carried out by the Group’s entities as
part of a regular risk assessment process help identify and analyze
key ongoing or foreseeable changes.
78
TOTAL. Registration Document 2016
Internal control and risk management procedures
Risks and control 4
4.3.1. Monitoring of risk management systems
The Executive Committee, with the assistance of the Group Risk
Management Committee created in 2011, is responsible for
identifying and analyzing internal and external risks that could
impact TOTAL’s performance. The main responsibilities of the
Group Risk Management Committee include ensuring that the
Group has an up-to-date map of the risks to which it is exposed
and that efficient risk management systems are in place.
The Group Risk Management Committee relies on the work carried
out by the business segments and functional departments, which
concurrently establish their own risk mapping. These maps are
drawn up according to a methodological framework developed by
the Group. The activities of the Group Risk Management Committee,
the major risks identified by the Group and the risk mappings of the
business segments are regularly reported to the Audit Committee.
The Group’s business segments and entities are responsible for
defining and implementing a risk management policy suited to their
specific activities. However, the handling of certain transverse risks
is more closely coordinated by the respective functional departments.
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. The Risk Committee (CORISK) is tasked with reviewing
these projects in advance and informing the Executive Committee
of its findings. As part of this review, the CORISK verifies the
analysis of the various project-related risks.
The Group strives to implement effective control systems for the
main risks identified.
Financial risks
The management and conditions procedures for using financial
instruments are governed by strict rules that are defined by the
Group’s General Management, and which provide for centralization
by the Treasury Division of liquidity, interest exchange rate positions,
management of financial instruments and access to capital markets.
The Group’s financing policy consists of incurring long-term debt at
a floating rate or at a fixed rate depending on interest rates. Debt is
mainly incurred in dollars or euros according to the Group’s general
corporate needs.
The Group’s cash balances, which mainly consist of dollars and
euros, are managed to maintain liquidity based on daily interest
rates in the given currency. Maximum amounts are set for
transactions exceeding one month, with placements not to exceed
12 months. TOTAL S.A. also has confirmed credit facilities granted
by international banks. These credit facilities, along with the Group’s
net cash position, allow it to continually maintain a high level of
liquidity in accordance with targets set by General Management.
In terms of counterparty risk in financial transactions, the Group
adheres to a cautious policy, and only makes commitments with
institutions featuring a high degree of financial soundness, as based
on a multi-criteria analysis. An overall credit limit is set for each
authorized financial counterparty and allocated among the Group’s
subsidiaries. In addition, to reduce market value risk on its
commitments, the Treasury Division has entered into margin call
contracts with its significant counterparties.
The Group seeks to minimize its currency exposure, on the one
hand by financing its long-term assets in the functional currency of
the entity to which they belong and, on the other hand, by
systematically hedging the currency exposure generated by
commercial activity. These risks are managed centrally by the
Treasury Department, which operates within a set of limits defined
by General Management.
The policy for managing risks related to financing and cash
management activities as well as the Group’s currency exposure
and interest rate risks is described in detail in Note 15 to the
Consolidated Financial Statements (point 7 of chapter 10).
Industrial and environmental risks and risks related
to climate issues
The Group has developed a Safety Health Environment Quality
Charter that sets out the basic principles applicable to the
protection of people, property and the environment and also covers
the aspects of safety and health (H3SEQ). This Charter is
implemented at several levels within the Group through its
management systems.
Along these lines, TOTAL implements management systems such
as the internal management system MAESTRO, which meets all of
the requirements of the standards ISO 14001, ISO 9001 and
OHSAS 18001, as well as the future ISO 45001. The Group
performs regular assessments, following various procedures, of the
risks and impacts of its activities in the areas of industrial safety
(particularly process safety), the environment and the protection of
workers and local residents:
– prior to approving new investment, acquisition and
disposal projects;
– during operations (safety studies, environmental impact
assessments, health impact studies); and
– prior to releasing new substances on the market (toxicological
and ecotoxicological studies and life cycle analyses).
These assessments incorporate the regulatory requirements of the
countries where the Group’s activities are carried out and generally
accepted professional practices.
In countries where prior administrative authorization and supervision
is required, projects are not undertaken without the authorization of
the relevant authorities based on the studies provided to them.
In particular, TOTAL has developed a common methodology for
analyzing technological risks that is being gradually applied to all
activities carried out by the companies of the Group (refer to point
2.2.2 of chapter 7). TOTAL develops risk management measures
based on risk and impact assessments. These measures involve
facility and structure design, the reinforcement of safety devices
and environmental remediation.
In addition to developing management systems as described
above, the Group strives to minimize industrial, safety and
environmental risks inherent in its operations by conducting
thorough inspections and audits, training personnel and raising
awareness among all those involved.
In addition, performance indicators (particularly 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 (refer to point 2 of chapter 7).
Although the emphasis is on preventing risks, TOTAL takes regular
steps to prepare for crisis management based on identified risk
scenarios. The Group has a crisis management process that relies
on a permanent on-call system, regular drills, training courses in
crisis management and a set of tools. The organization set up in
the event of a crisis is deployed at two closely coordinated levels:
Registration Document 2016. TOTAL
79
4 Risks and control
Internal control and risk management procedures
– at the local level (country, site or entities), a crisis unit is
responsible for ensuring operational management and
implementing emergency plans; and
– at the head office level, a crisis unit consisting of a
multidisciplinary team is tasked with assessing the situation and
overseeing crisis management. This central unit provides the
necessary expertise and mobilizes additional resources to assist
the local crisis unit when necessary and intervene directly when
the situation cannot be handled locally.
Concerning the area of security, the Group has put in place the means
to monitor and analyze threats and risks at a central level in order to
anticipate and take all necessary preventive measures so as to
diminish its exposure to security risks in the countries where it operates.
In addition, TOTAL has developed emergency plans and
procedures to respond to an oil spill or leak. These plans and
procedures are specific to each subsidiary and adapted to its
organization, activities and environment, and are consistent with the
Group’s anti-pollution plan. They are reviewed regularly and tested
through drills (refer to point 2.2.3 of chapter 7).
At the Group level, TOTAL has set up an organization structured
around the Plan to Mobilize Resources Against Pollution
(PARAPOL) alert scheme to facilitate crisis management and
provide assistance regardless of geographical restrictions in the
event of pollution of marine, coastal or inland waters. Its main
objective is to facilitate access to internal and external experts and
physical response resources (FOST, Cedre, OSRL).
With regard to risks related to climate issues, TOTAL is committed
to managing its energy consumption and develops processes to
improve its energy performance and that of its customers, in
accordance with its Safety Health Environment Quality Charter.
In its decision-making process, the risks and associated climate
issues (flaring, greenhouse gas emissions, CO2 price sensitivity) are
assessed prior to the presentation of the projects to the Executive
Committee.
In order to ensure the viability of its projects and long-term strategy
in light of the challenges raised by climate change, the Group
integrates, into the financial evaluation of investments presented to
the Executive Committee, either a long-term CO2 price of $30
to $40 per ton (depending on the price of crude), or the actual price
of CO2 in a given country if higher. The Group performs sensitivity
tests to assess the ability of its asset portfolio to withstand an
increase in the price per ton of CO2.
In addition, TOTAL takes into account the 2°C scenario of the
International Agency for Energy (IAE) in its analysis of changes in
energy markets (notably that of hydrocarbons) and its development
strategy. As a result, the Group is prioritizing its projects and
focusing on hydrocarbon assets with moderate production
and processing costs that meet the highest environmental
and safety standards.
Finally, the Group assesses the vulnerability of its facilities to
climatic events so that their consequences do not affect the
integrity of the facilities or the safety of individuals. More generally,
natural hazards (climate-related risks as well as seismic, tsunami,
soil strength and other risks) are taken into account in the
conception of industrial facilities, which are designed to withstand
both normal and extreme conditions. The Group carries out a
systematic assessment of the possible repercussions of climate
change on its future projects. These analyses include a review by
type of risk (e.g., sea level, storms, temperature, permafrost) and
take into account the life span of the projects and their capacity to
gradually adapt. These studies have not identified any facilities that
cannot withstand the consequences of climate change known today.
Risks related to information systems
TOTAL’s IT Department has developed and distributed governance
and security rules that describe the recommended infrastructure,
organization and procedures in order to maintain information
systems that are appropriate to the organization’s needs and the
risks associated with information systems and their data. These
rules are implemented across the Group under the responsibility of
the various business segments.
The Group has also developed control activities at various levels of
the organization relating to areas where information systems cover
all or part of the processes. Information Technology General
Controls aim to guarantee that information systems function and
are available as required, and that data integrity is guaranteed and
changes controlled.
Information Technology Automated Controls aim to ensure the
integrity of data generated or supported by business applications,
particularly those that impact financial flows.
The outsourcing of some components of the Group’s IT
infrastructure to service providers poses specific risks and requires
the selection and development of additional controls of the
completeness, accuracy and validity of the information supplied
and received from such service providers. Accordingly, to ensure
continuous improvement, the Group assesses whether suitable
controls are implemented by the service providers concerned and
what controls are necessary within its own organization to maintain
these risks at an acceptable level.
In addition, in light of increasing legal risks (such as document
retention, personal data protection or copyright) and security risks
(such as loss of information, external and internal threats or fraud),
the Group deploys information protection, document retention and
personal data protection policies. In order to reduce these risks, the
Group has employed an Operational Security Center to detect and
analyze IT system security events.
Risks related to the protection of intellectual assets
To mitigate the risks of third parties infringing its intellectual proprety
and the leak of know-how, TOTAL protects its rights under research
partnership agreements negotiated by the Group’s intellectual
property specialists, the terms and conditions of which are
consistent with the Group’s industrial and commercial strategy.
The Group has a policy of filing and maintaining patents, it monitors
technological developments in terms of freedom of use, and it
takes, when necessary, all appropriate measures to ensure the
protection of its rights.
In addition, since some of its employees have access to confidential
documents while performing their duties, TOTAL adopted internal rules
concerning the management of confidential information. The Group’s
intellectual proprety specialists also carry out awareness-raising
activities with the R&D teams so that the teams are better informed
about restrictions that may apply to the use of information and data.
80
TOTAL. Registration Document 2016
Internal control and risk management procedures
Risks and control 4
Ethical misconduct and non-compliance risks
Fraud prevention
The Group deploys an anti-fraud and fraud prevention program and
has implemented a 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 values of individual
behavior described in the Group’s Code of Conduct and other
standards applied by the Group’s business segments.
The Group has issued a directive for handling incidents of fraud that
has been widely distributed to employees, and has created an alert
system that employees can use to report acts including those that
may constitute fraud.
In 2015, a large campaign on fraud risks to raise awareness of all
Group employees was launched. A guide on “Prevention and Fight
Against Fraud”, which highlights the different actions conducted
through the anti-fraud program, was distributed. A map of fraud
risks in the Group was finalized in late 2015, allowing priority
actions to be defined for 2016. A guide to the different types of
fraud risk, with descriptions of the main risks, was distributed in
2016. Fraud risk analyses are carried out in the subsidiaries. An
awareness campaign relating to the four major fraud risks was
launched at the end of 2016, particularly by means of videos widely
distributed within the Group.
The deployment of the anti-fraud and fraud prevention program
relies on the network of fraud risks coordinators within the business
segments and operational entities.
Prevention of corruption risks
General Management constantly reiterates the principle of zero
tolerance with regard to corruption. The Corruption Prevention
Policy was updated in 2016, thus reaffirming the Group’s
commitment to the matter. Internal rules have been published since
2011 in this area. They cover various areas where particular risks of
exposure to corruption may exist (business partnerships,
representatives dealing with public officials, procurement and sales,
donations, acquisitions, joint ventures, human resources, gifts and
invitations, etc.) in an effort to detect, assess and address risks at a
very early stage through an appropriate due diligence process.
To support this program, awareness campaigns aimed at all
employees are conducted and training is regularly given to those in
positions with the greatest risk of exposure. For more information,
refer to point 3.7 of chapter 7.
In addition, more than 370 Compliance Officers have been
appointed and trained within the business segments and
operational entities. Their role is to ensure that the program is
implemented at the local level.
Finally, under the settlements reached in 2013 between TOTAL,
the U.S. Securities and Exchange Commission and the U.S.
Department of Justice, an independent monitor had been
appointed for three years to conduct a review of anti-corruption
compliance and related internal control procedures implemented by
the Group and to recommend improvements, where necessary. In
July 2016, the monitor submitted his third and final report, in which
he certified that TOTAL had devised and implemented an
appropriate compliance program. As a result of this certification, the
U.S. authorities concluded, after having reviewed the monitor’s
report, that TOTAL had fulfilled all of its obligations, thus bringing an
end to the monitoring process. As a result, a court in the State of
Virginia granted a motion to dismiss on November 9, 2016, thereby
terminating the procedure directed at the Company, which can no
longer be pursued in the United States for these same facts. The
mobililization of the entire Group and its efforts in this area continue
with the goal of ensuring the durability, evolution and continuous
improvment of this compliance program.
Prevention of competition law infringement
A Group policy aimed at ensuring compliance with, and preventing
infringement of, competition law has been in place since 2014 and
is a follow-up to the various measures previously implemented by
the business segments. Its deployment is based, in particular, on
management and staff involvement, training courses that include an
e-learning module and an organization responsible for
implementing the program.
Prevention of market abuse and conflict of interests
The Group implements a policy to prevent market abuse linked to
trading on the financial markets that is based, in particular, on
internal ethics rules that are updated on a regular basis and widely
distributed to employees. In addition, the Group’s senior executives
and certain employees, in light of their positions, are asked to
refrain from carrying out any transactions, including hedging
transactions, on TOTAL shares or ADRs and in collective
investment plans (FCPE) invested primarily in TOTAL shares (as well
as derivatives related to such shares) on the day on which the
Company discloses its periodic results publications (quarterly,
interim and annual) as well as during the 30 calendar-day period
preceding such date. An annual campaign specifies the applicable
“blackout” periods.
To prevent conflicts of interest, each of the Group’s senior
executives completes an annual statement declaring any conflicts
of interest to which they may be subject. By completing this
declaration, each senior executive also agrees to report to their
supervisor any conflict of interest that he or she has had or of which
he or she is aware in performing his or her duties. An internal rule
named “Conflicts of Interests”, published in 2015, reminds all
employees of their obligation to report to their supervisor any
situation that might give rise to a conflict of interests.
4.3.2. Internal control procedures related
to the preparation and processing
of accounting and financial information
Accounting information
The Group’s Accounting Department, which reports to the Group’s
Chief Financial Officer, draws up the Group’s Consolidated Financial
Statements according to IFRS standards based on the reporting
packages prepared quarterly by the consolidated entities, as well
as the statutory financial statements of TOTAL S.A. as parent
company and those of certain French entities. Each quarter, the
Consolidated Financial Statements and statutory financial
statements of TOTAL S.A. are reviewed by the Audit Committee
and the Board of Directors.
The Consolidated Financial Statements are prepared based on the
following principles:
– homogeneity of the accounting framework and standards; to this
end, the interpretation of accounting standards applicable to the
Consolidated Financial Statements is centralized by the Group’s
Accounting Department, which also distributes these standards
through formal procedures and an internal financial reporting
manual. The department monitors the effective implementation of
these standards through periodic formal communication with
managers of the business segments; and
Registration Document 2016. TOTAL
81
The internal control process related to estimating reserves is
formalized in a special procedure described in detail in point 2.1.1.2
of chapter 2. The reserves evaluation and the related internal
control processes are audited periodically.
The strategic outlook published by the Group is prepared, in
particular, according to the long-term plans drawn up at the
business segment and Group levels, and on the work carried out at
each relevant level of the organization. The Board of Directors
reviews the strategic outlook each year.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
4 Risks and control
Internal control and risk management procedures
– a supervised account closing process based mainly on
formalization of economic assumptions, judgments and
estimates, treatment of complex accounting transactions and on
respect of established timetables announced through Group
instructions disclosed to each entity.
Off-balance sheet commitments, which are valued according to the
financial reporting manual are reported on a quarterly basis to the
Audit Committee.
Internal control of accounting information is mainly focused around
the following areas:
– a monthly financial report is formalized by Group and business
segment control panels. This report and the Consolidated
Financial Statements use the same framework and standards. In
addition, the quarterly closing schedule is the same for preparing
the Consolidated Financial Statements and financial reporting;
– a detailed analysis of differences as part of the quarterly
reconciliation between the Consolidated Financial Statements
and financial reporting is supervised by the Accounting
and Budget-Controlling Divisions, which are part of
the Finance Division;
– a detailed analysis of differences between actual amounts and
the yearly budget established on a monthly basis is realized at
each level of the organization;
– an annual reconciliation between the parent company financial
statements and the financial statements based on IFRS
standards is performed by entity;
– periodic controls are designed to ensure the reliability of
accounting information and mainly concern the processes for
preparing aggregated financial items;
– a regular process for the signature of representation letters is
deployed at each level of the organization; and
– the Disclosure Committee ensures the application of the
procedures in place.
Because of the important contribution of the equity affiliates to the
Group’s aggregated financial items, an annual review of the control
on these companies’ financial statements is implemented based on
a detailed questionnaire completed by each entity. This system is
integrated into the Group’s internal control framework.
Other financial information
Proved oil and gas reserves are evaluated annually by the relevant
entities. They are reviewed by the Reserves Committee, approved
by Exploration & Production’s senior management and then
validated by the Group’s General Management. They are also
presented to the Audit Committee each year.
82
TOTAL. Registration Document 2016
Corporate governance
5
Corporate governance
1. Composition and practices of the Board of Directors 86
1.1. Composition of the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .87
1.2. Practices of the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97
1.3. Statement regarding corporate governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .111
2. General Management 112
2.1. The Executive Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .112
2.2. The Group Performance Management Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .112
3. Shares held by the administration and management bodies 112
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
Document de référence 2016. TOTAL
85
5 Corporate governance
Composition and practices of the Board of Directors
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
Report of the Chairman of the Board of Directors must include
certain information related to corporate governance, in particular
the composition of the Board of Directors, the Board of Directors’
application of the principle of balanced representation of men and
women, the preparation and organization of the work of the Board
of Directors, internal control and risk management procedures
implemented by the Company, any limits set by the Board of
Directors concerning the powers of the Chief Executive Officer, the
financial risks related to the effects of climate change and measures
adopted by the company to reduce them and implement a low-
carbon strategy in all its activities, the bylaws concerning
participation in Shareholders’ Meetings, the principles and rules
applied to determine the compensation and other benefits granted
to the executive and non-executive directors (mandataires sociaux),
and the information required by Article L. 225-100-3 of the French
Commercial Code.
The information related to the composition of the Board of
Directors, the Board of Directors’ application of the principle of
balanced representation of men and women, the preparation and
organization of the work of the Board of Directors and any limits set
by the Board of Directors concerning the powers of the Chief
Executive Officer is presented below in point 1.
Information related to the internal control and risk management
procedures implemented within the Group and to financial risks
related to the effects of climate change and measures adopted by
the Company to reduce them and implement a low-carbon strategy
in all its activities is presented in chapter 4, points 1 and 4;
information related to bylaws concerning participation in
Shareholders’ Meetings is presented in chapter 9, point 2.4;
information related to the principles and rules applied to determine
the compensation and other benefits granted to the executive and
non-executive directors (mandataires sociaux) is presented in
chapter 6, point 6, and information likely to have an impact in the
event of a public offering and required by Article L. 225-100-3 of
the French Commercial Code is presented in chapter 8, point 4.5.
This information collectively forms the Report of the Chairman of
the Board of Directors prepared pursuant to Article L. 225-37 of the
French Commercial Code [REDACTED SECTION: CERTAIN TEXT
HAS BEEN REDACTED.].
The information contained in the Report of the Chairman of the
Board of Directors was prepared with the assistance of several of
the Company’s corporate functional divisions, including in particular
the Legal, Finance and Corporate Audit & Internal Control
Departments. After the sections relevant to their respective duties
were reviewed by the Governance and Ethics Committee, the
Compensation Committee and the Audit Committee, the
information was approved by the Board of Directors at its meeting
on March 15, 2017.
1. Composition and practices
of the Board of Directors
As of February 8, 2017, the Company is administered by a Board of Directors composed of 12 members, including: 11 directors elected by
the Annual Shareholders’ Meeting, including 1 director elected on the proposal of the employee shareholders, and 1 director representing
employees appointed by the Central Works Council.
80%
54.5% 45.5%
5
independent directors (1)
women
men (2)
non-French directors
10 meetings
of the Board of Directors
in 2016
88.4%
attendance rate
1executive session
chaired by the Lead Independent
Director
(1) Excluding the director elected on the proposal of the employee shareholders and the director representing employees, in accordance with the recommendations of the AFEP-MEDEF
Code (point 8.3).
(2) Excluding the director representing employees, in accordance with Article L. 225-27-1 of the French Commercial Code.
86
TOTAL. Registration Document 2016
Composition and practices of the Board of Directors
Corporate governance 5
1.1. Composition of the Board of Directors
The Company is administered by a Board of Directors composed of
12 members. The members of the Board of Directors include one
director elected on the proposal of the employee shareholders
pursuant to the provisions of Article L. 255-23 of the French
Commercial Code (hereafter referred to as the “director
representing employee shareholders”), and one director
representing employees appointed by the Central Works Council
pursuant to the provisions of Article L. 225-27-1 of the French
Commercial Code.
Directors are appointed for a three-year term (Article 11 of the
Company’s bylaws) by the Annual Shareholders’ Meeting, with the
exception of the director representing employees, who is appointed
by the Central Works Council.
The terms of office of the members of the Board are staggered to
space more evenly the renewal of appointments and to ensure the
continuity of the work of the Board of Directors and its Committees,
in accordance with the recommendations made in the AFEP-
MEDEF Code, which the Company uses as a reference.
Overview of the Board of Directors
As of February 8, 2017, the Board of Directors had eight
independent directors, i.e., 80%(1) of the directors
(refer to point 1.1.3).
Mr. Patrick Pouyanné has served as Chairman of the Board of
Directors since December 19, 2015, the date on which the
functions of Chairman of the Board of Directors and Chief Executive
Officer of TOTAL S.A. were combined following the decision made
by the Board of Directors at its meeting on December 16, 2015
(refer to point 1.2.1). Since December 19, 2015, Mr. Pouyanné has
therefore been Chairman and Chief Executive Officer of TOTAL S.A.
At its meeting on December 16, 2015, the Board of Directors also
appointed Ms. Patricia Barbizet as Lead Independent Director for
the duration of her term of office as director. Her designation took
effect on December 19, 2015. Her duties are described in point
1.2.2 below.
The profiles, experience and expertise of the directors are detailed
in the biographies below.
As of February 8, 2017 Age Sex Inde- Audit Governance Compensation Strategic First Years’ Expiry
Committee Committee appointment service on of term
pendent Committee and Ethics
the Board of office
Committee
Chairman and Chief
Executive Officer – Director
Patrick Pouyanné 53 M
C 2015 2 2018
Directors
Patrick Artus 65 M • •
• 2009 8 2018
Patricia Barbizet (a) 61 F • C
• • 2008 9 2017
Marie-Christine
Coisne-Roquette 60 F • C
• 2011 6 2017
Paul Desmarais, Jr 62 M
2002 15 2017
Maria van der Hoeven 67 F •
2016 1 2019
Anne-Marie Idrac 65 F • •
2012 5 2018
Barbara Kux 62 F • •
• 2011 6 2017
Gérard Lamarche 55 M • •
C 2012 5 2019
Jean Lemierre 66 M •
2016 1 2019
Director representing
employee shareholders
Renata Perycz 53 F n / a
2016 1 2019
Director representing
employees
Marc Blanc (b) 62 M n / a
• 2014 3 2017
(a) Lead Independent Director.
(b) Designated by the Central Works Council of UES Amont Holding on November 4, 2014. Marc Blanc’s office will expire at the end of the Annual Shareholders’ Meeting of May 26, 2017
and the UES Amont Central Works Council – Global Services – Holding shall designate the new director representing employees pursuant to the provisions of Article L. 225-27-1 of the
French Commercial Code and of the Company’s bylaws. The new director representing employees will be designated for a three-year term to expire at the end of the Annual
Shareholders’ Meeting held in 2020 to approve the 2019 financial statements.
C: Chairperson of the Committee.
(1) Excluding the director representing employee shareholders and the director representing employees, in accordance with the recommendations of the AFEP-MEDEF Code (point 8.3).
Registration Document 2016. TOTAL
87
5 Corporate governance
Composition and practices of the Board of Directors
Changes to the composition of the Board of Directors and Committees
As of February 8, 2017 Date Departure Appointment Renewal
Board of Directors
05 / 24 / 2016 Thierry Desmarest Maria van der Hoeven (a) Gérard Lamarche
Gunnar Brock (a) Jean Lemierre (a)
Charles Keller (b) Renata Perycz (b)
Audit Committee
05 / 24 / 2016 Charles Keller (b)
Governance and Ethics Committee
05 / 24 / 2016 Thierry Desmarest
Gunnar Brock (a)
Compensation Committee
05 / 24 / 2016 Gunnar Brock (a)
Strategic Committee
05 / 24 / 2016 Thierry Desmarest
Gunnar Brock (a)
(a) Independent director.
(b) Director representing employee shareholders.
1.1.1. Profile, experience and expertise of the directors (information as of December 31, 2016 (1))
Patrick Pouyanné
Born on June 24, 1963 (French).
Chairman and Chief Executive Officer of TOTAL S.A. Director of TOTAL S.A. since May 29, 2015 until 2018. Chairman of the Strategic
Committee. Holds 72,470 TOTAL shares and 8,177.02 units of the TOTAL ACTIONNARIAT FRANCE collective investment fund.
Main function: Chairman and Chief Executive Officer of TOTAL S.A.*
A graduate of École Polytechnique and a Chief Engineer of France’s Corps des Mines, Mr. Pouyanné held, between 1989 and 1996, various
administrative positions in the Ministry of Industry and other cabinet positions (technical advisor to the Prime Minister – Édouard Balladur –
in the fields of the Environment and Industry from 1993 to 1995, Chief of staff for the Minister for Information and Aerospace Technologies
– François Fillon – from 1995 to 1996). In January 1997, he joined TOTAL’s Exploration & Production division, first as Chief Administrative Officer
in Angola, before becoming Group representative in Qatar and President of the Exploration and Production subsidiary in that country in 1999.
In August 2002, he was appointed President, Finance, Economy and IT for Exploration & Production. In January 2006, he became Senior Vice
President, Strategy, Business Development and R&D in Exploration & Production and was appointed a member of the Group’s Management
Committee in May 2006. In March 2011, Mr. Pouyanné was appointed Deputy General Manager, Chemicals, and Deputy General Manager,
Petrochemicals. In January 2012, he became President, Refining & Chemicals and a member of the Group’s Executive Committee.
On October 22, 2014, he was appointed Chief Executive Officer of TOTAL. On May 29, 2015, he was appointed by the Annual
Shareholders’ Meeting as director of TOTAL S.A. for a three-year term. At its meeting on December 16, 2015, the Board of Directors of
TOTAL appointed him as Chairman of the Board of Directors as of December 19, 2015 for the remainder of his term of office as director.
Mr. Pouyanné is therefore now Chairman and Chief Executive Officer.
Current directorships
Directorships that have expired in the previous five years
– Chairman and Chief Executive Officer of TOTAL S.A.*
– Chairman and Director of Total Raffinage Chimie until 2014
– Chairman and Director of Total Petrochemicals & Refining
SA / NV until 2014
(1) Including information pursuant to point 4 of Article L. 225-102-1 of the French Commercial Code or item 14.1 of Annex I of EC Regulation No. 809 / 2004 of April 29, 2004.
For information related to directorships, company names marked with an asterisk are publicly listed companies and underlined companies are companies that do not belong
to the group in which the director has his or her main duties.
88
TOTAL. Registration Document 2016
Composition and practices of the Board of Directors
Corporate governance 5
Patrick Artus
Born on October 14, 1951 (French).
Director of TOTAL S.A. since 2009. Last renewal: May 29, 2015 until 2018. Independent director.
Member of the Audit Committee and the Strategic Committee. Holds 1,000 TOTAL shares.
Main function: Head of the research department and member of the Executive Committee of Natixis
A graduate of École Polytechnique, École Nationale de la Statistique et de l’Administration Économique (ENSAE) and Institut d’études
politiques de Paris, Mr. Artus began his career at INSEE (the 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 advisor at the research department of the Banque de France, before joining
the Natixis Group as the head of the research department, and has been a member of its Executive Committee since May 2013. He is an
associate professor at the University of Paris I, Sorbonne. He is also a member of the Cercle des Économistes.
Current directorships
– Director of TOTAL S.A.*
– Director of IPSOS*
Patricia Barbizet
Born on April 17, 1955 (French).
Directorships that have expired in the previous five years
None.
Director of TOTAL S.A. since 2008. Last renewal: May 16, 2014 until 2017. Independent director. Lead Independent Director, Chairwoman
of the Governance and Ethics Committee, member of the Compensation Committee and Strategic Committee. Holds 1,034 TOTAL shares.
Main function: Chief Executive Officer of Artémis
A graduate of École Supérieure de Commerce de Paris in 1976, Ms. Barbizet started her career in the Treasury division of Renault Véhicules
Industriels, and then as CFO of Renault Crédit International (1984-1989). In 1989, Ms. Barbizet joined the group of François Pinault as CFO.
Then appointed as Deputy Director of Finance and Communication of Pinault-CFAO, she participated, in 1992, in the creation of Artémis,
of which she was also appointed CEO. Ms. Barbizet is Vice Chairperson of the Board of Directors of the group Pinault-Printemps-Redoute,
which has become Kering in 2013. Ms. Barbizet has been Chairwoman of the Board of Christie’s from 2002 to 2016, and CEO of the
auction house from 2014 to 2016, while maintaining her role of Chairwoman. She has served as Director of the Boards of Bouygues,
Air France-KLM and PSA Peugeot-Citroën. She has been Chairwoman of the Investment Committee of the Fonds Stratégique
d’Investissement (FSI) from 2008 to 2013.
Current directorships
Directorships that have expired in the previous five years
– Director of TOTAL S.A.*
– Director and Vice Chairperson of the Board of Directors
of Kering S.A.*
– Chairwoman of Christie’s International Plc until January 1, 2017
– CEO of Christie’s International Plc until January 1, 2017
– Member of the supervisory board of Peugeot S.A.*
– Vice Chairwoman of Christie’s International Plc (England)
– Director of Groupe Fnac* (S.A.)
– Director and Chief Executive Officer of Artémis (S.A.)
– Chief Executive Officer (non-Director) of Financière Pinault (S.C.A.)
– Member of the Supervisory Board of Financière Pinault (S.C.A.)
– Permanent representative of Artémis, member of the Board
of Directors of Agefi (S.A.)
– Permanent representative of Artémis, member of the Board
of Directors of Sebdo le Point (S.A.)
until April 26, 2016
– Director of Société Nouvelle du Théâtre Marigny (S.A.) until 2015
– Director of Air France-KLM* (S.A.) until 2013
– Director of Fonds Stratégique d’Investissement (S.A.) until 2013
– Director of Bouygues* (S.A.) until 2013
– Director of TF1* (S.A.) until 2013
– Board member of Gucci Group NV until 2013
– Non-executive Director of Tawa Plc* until 2012
– Deputy Chief Executive Officer of Société Nouvelle du Théâtre
– Member of the Management Board of Société Civile du Vignoble
Marigny until 2012
de Château Latour (société civile)
– Director of Yves Saint Laurent (S.A.S.)
– Deputy manager of Palazzo Grazzi (Italy)
– Member of the supervisory board of Ponant
– Permanent representative of Artémis, member of the supervisory
board of Collection Pinault Paris.
Registration Document 2016. TOTAL
89
5
Corporate governance
Composition and practices of the Board of Directors
Marc Blanc
Born on December 7, 1954 (French).
Director representing employees of TOTAL S.A. as of November 4, 2014 until 2017.
Member of the Strategic Committee. Holds 326 TOTAL shares and 847.51 units of the TOTAL ACTIONNARIAT FRANCE collective
investment fund and 21.33 units of the TOTAL FRANCE CAPITAL + fund.
Main function: Group Employee
After joining the Group in 1980 as a refinery operator at the Grandpuits Refinery, Mr. Blanc has, since 1983, exercised a number of trade
union functions, in particular as Secretary of the European Elf Aquitaine Committee and then at TOTAL S.A. from 1991 to 2005. From 1995
to 1997, he worked as Secretary General of the CFDT Seine-et-Marne trade union for the Chemicals industry (Syndicat Chimie CFDT), and
then, from 1997 to 2001, as Deputy Secretary General of the CFDT trade union for the power and Chemicals industries in the Île-de-France
region (Syndicat Énergie Chimie, SECIF), where he became Secretary General in 2001 and continued in this role until 2005. Subsequently,
from 2005 to 2012, Mr. Blanc acted as Federal Secretary of the CFDT chemical and power industry federation (Fédération Chimie Énergie)
where he was responsible first for industrial policy and then for Sustainable Development, Corporate Social Responsibility, international
affairs (excluding Europe), and the oil and chemicals sectors. From 2009 to 2014, he was Director of the Chemicals and Power Industry
Research and Training Institute (IDEFORCE association) as well as Advisor to the Economic, Social and Environmental Council (Conseil
Économique, Social et Environnemental, CESE) where he sat as a member of the Economic and Finance section as well as of the
Environment section. In particular, he was responsible for submitting a report on the societal challenges of biodiversity (La biodiversité,
relever le défi sociétal) in June 2011, and was the co-author with Alain Bougrain-Dubourg of a follow-up opinion entitled “Acting for
Biodiversity” (Agir pour la Biodiversité) submitted in 2013. Mr. Blanc was also a member of the CESE’s temporary Committee on the “annual
report on the state of France” in October 2013.
Current directorships
Directorships that have expired in the previous five years
– Director representing employees of TOTAL S.A.*
None.
Marie-Christine Coisne-Roquette
Born on November 4, 1956 (French).
Director of TOTAL S.A. since 2011. Last renewal: May 16, 2014 until 2017. Independent director.
Chairwoman of the Audit Committee and member of the Compensation Committee. Holds 3,778 TOTAL shares.
Main function: Chairwoman of Sonepar S.A.S.
Ms. Coisne-Roquette has a Bachelor’s Degree in English. A lawyer by training, with a French Masters’ in Law and a Specialized Law
Certificate from the New York bar, she started a career as an attorney in 1981 at the Paris and New York bars, as an associate of Cabinet
Sonier & Associés in Paris. In 1984, she joined the Board of Sonepar as a director and gave up her law career in 1988 to work full time for
the family group. As Chairwoman of the family holding company, Colam Entreprendre, and later of the Sonepar Supervisory Board, she
consolidated family ownership, reorganized the Group structures and reinforced the shareholders’ Group to sustain its growth strategy.
Chairwoman and Chief Executive Officer of Sonepar as of 2002, and then Chairwoman of the Board of Directors, Marie-Christine Coisne-Roquette
became Chairwoman of Sonepar S.A.S. on May 27, 2016. At the same time, she heads Colam Entreprendre as its Chairwoman and Chief
Executive Officer. Formerly a member of the Young Presidents’ Organization (YPO), she served the MEDEF (France’s main employers’
association) as Executive Committee member for 13 years and was Chairwoman of its Tax Commission from 2005 to 2013. She was a
member of the Economic, Social and Environmental Council from 2013 and 2015 and is currently a Director of TOTAL S.A.
Current directorships
– Director of TOTAL S.A.*
– Chairwoman of Sonepar S.A.S.
– Chairwoman and Chief Executive Officer of Colam Entreprendre
– Permanent representative of Colam Entreprendre, co-manager
– Permanent representative of Colam Entreprendre, Director
of Sovemarco Europe (S.A.)
– Chief Executive Officer of Sonepack S.A.S.
– Co-manager of Développement Mobilier & Industriel (D.M.I.)
of Sonedis (société civile)
(société civile)
– Manager of Ker Coro (société civile immobilière)
90
TOTAL. Registration Document 2016
Composition and practices of the Board of Directors 5
Corporate governance
Directorships that have expired in the previous five years
– Chairwoman of the Board of Directors of Sonepar S.A. until 2016
– Permanent representative of Sonepar, Director of Sonepar
France until 2014
– Director of Hagemeyer Canada, Inc. until 2013
– Chairwoman of the Supervisory Board of Otra N.V. until 2013
– Director of Sonepar Canada, Inc. until 2013
– Chairwoman of the Supervisory Board of Sonepar Deutschland
GmbH until 2013
– Director of Sonepar Ibérica until 2013
– Director of Sonepar Italia Holding until 2013
– Director of Sonepar Mexico until 2013
– Member of the Supervisory Board of Sonepar Nederland B.V.
until 2013
– Director of Sonepar USA Holdings, Inc. until 2013
– Director of Feljas et Masson S.A.S. until 2013
– Permanent representative of Colam Entreprendre, member
of the Board of Directors at Cabus & Raulot (S.A.S.) until 2013
– Chief Executive Officer of Sonepar S.A. until 2012
– Permanent representative of Sonepar S.A., co-manager
of Sonedis (société civile) until 2012
– Permanent representative of Sonepar International (S.A.S.)
until 2012
– Chairwoman of the Board of Directors of Sonepar Mexico
until 2012
Paul Desmarais, Jr
Born on July 3, 1954 (Canadian).
Director of TOTAL S.A. since 2002. Last renewal: May 16, 2014 until 2017. Holds 2,000 ADRs (corresponding to 2,000 TOTAL shares).
Main function: Chairman of the Board & Co-Chief Executive Officer of Power Corporation of Canada*
A graduate of McGill University in Montreal and Institut européen d’administration des affaires (INSEAD) in Fontainebleau, Mr. Desmarais was
first appointed as Vice President (1984), and then as President and Chief Operating Officer (1986), Executive Vice Chairman of the Board
(1989), Executive Chairman of the Board (1990), Chairman of the Executive Committee (2006) and Executive Co-Chairman of the Board
(2008) of Power Financial Corporation, a company he helped found in 1984. Since 1996, he has also served as Chairman of the Board and
Co-Chief Executive Officer of Power Corporation of Canada.
Current directorships
– Director of TOTAL S.A.*
– Chairman of the Board & Co-Chief Executive Officer of Power
– Director and member of the Nomination, Compensation and
Governance Committee of LafargeHolcim Ltd* (Switzerland)
Corporation of Canada*
– Executive Co-Chairman of the Board of Power Financial
Corporation* (Canada)
– Executive Chairman of the Board of Directors and Co-Chief
Executive Officer of Pargesa Holding S.A.* (Switzerland)
– Director and member of the Executive Committee of
The Canada Life Assurance Company (Canada)
– Director and member of the Executive Committee of
The Canada Life Financial Corporation (Canada)
– Director and member of the Executive Committee of
– Director and member of the Executive Committee of Great-West
IGM Financial Inc.* (Canada)
Lifeco Inc.* (Canada)
– Director and Chairman of the Board of 171263 Canada Inc.
– Director and member of the Executive Committee of Great-West
(Canada)
Life Assurance Company (Canada)
– Director and member of the Executive Committee of Great-West
Life & Annuity Insurance Company (United States of America)
– Director of Great-West Financial (Canada) Inc. (Canada)
– Vice Chairman of the Board, Director and member of
– Director of 152245 Canada Inc. (Canada)
– Director of GWL&A Financial Inc. (United States of America)
– Director of Great-West Financial (Nova Scotia) Co. (Canada)
– Director of Great-West Life & Annuity Insurance Company
of New York (United States of America)
the Standing Committee of Groupe Bruxelles Lambert S.A.*
(Belgium)
– Director of Power Communications Inc. (Canada)
– Director and Chairman of the Board of Power Corporation
– Director and member of the Executive Committee of
International (Canada)
Investors Group Inc. (Canada)
– Director and member of the Executive Committee of
London Insurance Group Inc. (Canada)
– Director and member of the Executive Committee of
Putnam Investments, LLC (United States of America)
– Member of the Supervisory Board of Power Financial
– Director and member of the Executive Committee of
Europe B.V. (Netherlands)
London Life Insurance Company (Canada)
– Director and member of the Executive Committee of
– Director and member of the Executive Committee of
The Canada Life Insurance Company of Canada (Canada)
Mackenzie Inc.
– Director and Deputy Chairman of the Board of La Presse,
ltée (Canada)
– Director and Deputy Chairman of Gesca ltée (Canada)
– Director and Deputy Chairman of the Board of Groupe
de Communications Square Victoria Inc. (Canada)
– Member of the Supervisory Board of Parjointco N.V. (Netherlands)
– Director of SGS S.A.* (Switzerland)
Registration Document 2016. TOTAL
91
5 Corporate governance
Composition and practices of the Board of Directors
Directorships that have expired in the previous five years
– Director of Canada Life Capital Corporation Inc. (Canada)
until 2015
– Director of Lafarge* (France) until 2015
– Director of GDF Suez* (France) until 2014
– Director and member of the Executive Committee of
Crown Life Insurance Company (Canada) until 2012
Maria van der Hoeven
Born on September 13, 1949 (Dutch).
Director of TOTAL S.A. since 2016 until 2019. Independent director. Holds 1,000 TOTAL shares.
Main function: Independent director
Ms. van der Hoeven, after a teaching training, was a professor in economic sciences and administration then a school counselor. She was
then Executive Director of the Administrative Center for vocational training for adults in Maastricht for seven years and then Director of the
technologic Center of Limbourg. She was member of the Dutch Parliament, served as Minister of Education, Culture and Science from 2002
to 2007, and was Minister of Economic Affairs of the Netherlands from 2007 to 2010. Ms. van der Hoeven then served as Executive Director
of the International Energy Agency (IEA) from September 2011 to August 2015. During this period, she contributed to increasing the number
of members of the Agency and emphasized the close link between climate and energy policy. In October 2015, Ms. van der Hoeven joined
the Board de Trustees of Rocky Mountain Institute (USA) and in September 2016, member of the supervisory board of Innogy SE* (Germany).
Current directorships
Directorships that have expired in the previous five years
– Director of TOTAL S.A.*
– Member of the Supervisory Board of Innogy SE*
– Member of the Board de Trustees of Rocky Mountain Institute (USA)
– Member of the Supervisory Board of RWE AG (Germany)
Anne-Marie Idrac
Born on July 27, 1951 (French).
Director of TOTAL S.A. since 2012. Last renewal: May 29, 2015 until 2018. Independent director. Member of the Governance and Ethics
Committee. Holds 1,250 TOTAL shares.
Main function: Chairwoman of the Supervisory Board of Toulouse-Blagnac Airport
A graduate of Institut d’Etudes Politiques de Paris and formerly a student at École Nationale d’Administration (ENA -1974), Ms. Idrac began
her career holding various positions as a senior civil servant at the Ministry of Infrastructure (Ministère de l’Équipement) in the fields of
environment, housing, urban planning and transportation. She served as Executive Director of the public institution in charge of the
development of Cergy-Pontoise (Établissement public d’Aménagement de Cergy-Pontoise) from 1990 to 1993 and Director of land transport
from 1993 to 1995. Ms. Idrac was State Secretary for Transport from May 1995 to June 1997, elected member of Parliament for Yvelines
from 1997 to 2002, regional councilor for Île-de-France from 1998 to 2002 and State Secretary for Foreign Trade from March 2008 to
November 2010. She also served as Chairwoman and Chief Executive Officer of RATP from 2002 to 2006 and then as Chairwoman of
SNCF from 2006 to 2008.
Current directorships
Directorships that have expired in the previous five years
– Director of TOTAL S.A.*
– Director of Bouygues*
– Director of Saint Gobain*
– Chairwoman of the Supervisory Board of Toulouse-Blagnac Airport
– Member of the Supervisory Board of Vallourec* until 2015
– Director of Mediobanca S.p.A.* (Italy) until 2014
92
TOTAL. Registration Document 2016
Composition and practices of the Board of Directors
Corporate governance 5
Barbara Kux
Born on February 26, 1954 (Swiss).
Director of TOTAL S.A. since 2011. Last renewal: May 16, 2014 until 2017. Independent director. Member of the Governance and Ethics
Committee and the Strategic Committee. Holds 1,000 shares.
Main function: 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 Executive Committee of the Philips group and, starting in 2005, was in charge of the supply chain and
Sustainable Development. From 2008 to 2013, she was a member of the Executive Board of Siemens AG, a global leader in high technology
present in the energy and renewable energy sector. She was responsible for Sustainable Development and the supply chain of the group.
Since 2013, she has been a director of various world-class international companies and is also a member of the Advisory Board of INSEAD.
In 2016, she has been appointed by the European Commission to the newly established high level Decarbonisation Pathways Panel.
Current directorships
Directorships that have expired in the previous five years
– Member of the Management Board of Siemens AG* until 2013
– Director of TOTAL S.A.*
– Director of Engie S.A.*
– Director of Pargesa Holding S.A.*
– Member of the Supervisory Board of Henkel*
– Director of Umicore*
– Member of the Board of Directors of Firmenich S.A.
Gérard Lamarche
Born on July 15, 1961 (Belgian).
Director of TOTAL S.A. since 2012. Last renewal: May 24, 2016 until 2019. Independent director. Chairman of the Compensation Committee
and member of the Audit Committee. Holds 2,929 TOTAL shares.
Main function: Deputy Managing Director of Groupe Bruxelles Lambert*
Mr. Lamarche graduated in economic science from Louvain-La-Neuve University and is also a graduate of INSEAD business school (Advanced
Management Program for Suez Group Executives). He also attended the Global Leadership Series training course at the Wharton International
Forum in 1998-99. He started his career at Deloitte Haskins & Sells in Belgium in 1983, before becoming a consultant in mergers and
acquisitions in the Netherlands in 1987. In 1988, Mr. Lamarche joined Société Générale de Belgique as an investment manager. He was
promoted to the position of management controller in 1989 before becoming 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 being appointed as the acting Managing Director in charge of Planning, Management Control and Accounts. In 2000, Mr. Lamarche
moved to NALCO (the American subsidiary of the Suez group and the world leader in the treatment of industrial water) as Director and Chief
Executive Officer. He was appointed Chief Financial Officer of the Suez group in 2003. In April 2011, Mr. Lamarche became a director on the
Board of Directors of Groupe Bruxelles Lambert (GBL). He has been the Deputy Managing Director since January 2012. Mr. Lamarche is
currently a director of LafargeHolcim Ltd (Switzerland), TOTAL S.A. and SGS S.A.
Current directorships
Directorships that have expired in the previous five years
– Director of TOTAL S.A.*
– Deputy Managing Director of Groupe Bruxelles Lambert*
– Director and Chairman of the Audit Committee of
LafargeHolcim Ltd* (Switzerland)
– Director of SGS S.A.* (Switzerland)
– Director of Lafarge until 2016
– Director and Chairman of the Audit Committee of Legrand*
until 2016
– Non-voting member (censeur) of Engie S.A.* until 2015
Registration Document 2016. TOTAL
93
5 Corporate governance
Composition and practices of the Board of Directors
Jean Lemierre
Born on June 26, 1950 (French).
Director of TOTAL S.A. since 2016 until 2019. Independent director. Holds 1,000 TOTAL shares.
Main function: Chairman of the Board of Directors of BNP Paribas*
Mr. Lemierre is a graduate of the Institut d’études politiques de Paris and the École Nationale d’Administration; he also has a law degree. Mr.
Lemierre held various positions at the French tax authority, including as Head of the fiscal legislation department and Director-General of
Taxes. He was then appointed as Cabinet Director at the French Ministry of Economy and Finance before becoming Director of the French
Treasury in October 1995. Between 2000 and 2008, he was President of the European Bank for Reconstruction and Development (EBRD).
He became an advisor to the Chairman of BNP Paribas in 2008 and has been Chairman of BNP Paribas since December 1, 2014.
During his career, Mr. Lemierre has also been a member of the European Monetary Committee (1995-1998), Chairman of the European
Union Economic and Financial Committee (1999-2000) and Chairman of the Paris Club (1999-2000). He then became a member of the
International Advisory Council of China Investment Corporation (CIC) and the International Advisory Council of China Development Bank
(CDB). He is currently Chairman of the Centre d’Etudes Prospectives et d’Informations Internationales (CEPII), and a member of the Institute
of International Finance (IIF).
Current directorships
Directorships that have expired in the previous five years
– Director of Bank Gospodarki Zywnosciowej (BGZ) (Pologne) until
2014
– Chairman of the Board of Directors of BNP Paribas*
– Director of TEB Holding AS (Turkey)
– Director of TOTAL S.A.*
– Chairperson of Centre d’Études Prospectives et d’Informations
Internationales (CEPII)
– Member of Institute of International Finance (IIF)
– Member of International Advisory Board of Orange
– Member of International Advisory Council of China Development
Bank (CDB)
– Member of International Advisory Council of China Investment
Corporation (CIC)
– Member of International Advisory Panel (IAP) of Monetary
Authority of Singapore (MAS)
Renata Perycz
Born on November 05, 1963 (Polish).
Director representing employee shareholders of TOTAL S.A. since 2016 until 2019. Holds 280 TOTAL shares and 1,211.30 units of the
TOTAL ACTIONNARIAT INTERNATIONAL CAPITALISATION and 36.10 units of the Total INTL Capital collective investment funds.
Main function: Human Resources and Internal Communications Director of Total Polska sp. z.o.o.
Ms. Perycz is a graduate of the University of Warsaw, the Ecole des Hautes Etudes Commerciales (HEC) and the SGH Warsaw School of
Economics. Ms. Perycz entered the Group in 1993 as a logistics and sales manager for Total Polska. In 2000, she became a supplies and
logistics manager before becoming head of the subsidiary’s purchasing department in 2003. In 2007, she became Total Polska sp. z.o.o.’s
Human Resources and Purchasing director. Since 2013, Ms. Perycz has been the subsidiary’s Human Resources and Internal
Communications director. She has also been an elected member, representing unit-holders, of the Supervisory Board of FCPE Total
Actionnariat International Capitalisation since 2012.
Current directorships
Directorships that have expired in the previous five years
– Director representing employee shareholders of TOTAL S.A.*
None.
94
TOTAL. Registration Document 2016
Composition and practices of the Board of Directors
Corporate governance 5
Directorships of TOTAL S.A. expired in 2016
Thierry Desmarest
Born on December 18, 1945 (French).
A graduate of École Polytechnique and an Engineer of France’s
Corps des Mines engineering school, 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 then appointed Honorary Chairman of
TOTAL where he remains a director, and was Chairman of the Total
Foundation until January 2015. On October 22, 2014, he was again
appointed as Chairman of the Board of Directors for a term of office
that expired on December 18, 2015.
Main function: Honorary Chairman of TOTAL S.A.*
Director of TOTAL S.A. since 1995.
Last renewal: May 17, 2013 until 2016.
Member of the Governance and Ethics Committee and the
Strategic Committee until 2016.
Current directorships
– Director of Air Liquide*
– Director of Renault S.A.*
– Director of Renault S.A.S.
Directorships that have expired in the previous five years
– Director of TOTAL S.A.* until 2016
– Chairman of the Board of Directors of TOTAL S.A.* until 2015
– Director of Bombardier Inc.* (Canada) until 2014
– Director of Sanofi* until 2014
– Member of the Board of Syngenta AG*
– Chairman of the Board of Mölnlycke Health Care Group
– Member of the Board of Stena AB
Directorships that have expired in the previous five years
– Director of TOTAL S.A.* until 2016
– Chairman of the Board of Rolling Optics until 2016
– Member of the Supervisory Board of Spencer Stuart Scandinavia
until 2011
Charles Keller
Born on November 15, 1980 (French).
A graduate of École Polytechnique and École des Hautes Études
Commerciales (HEC), Mr. Keller joined the Group in 2005 at the
refinery in Normandy as a performance auditor. In 2008, he was
named Project Manager at the Grandpuits refinery to improve the
site’s energy efficiency and oversee its reliability plan. In 2010, he
joined Exploration & Production and Yemen LNG as head of the
Production Support department in charge of optimizing the plant.
Since February 2014, he has been a reservoir engineer at the head
office in La Défense. While performing his duties in the refining
sector, Mr. Keller sat on the Works Committees of the two refineries
and contributed to the activities of the Central Works Council of
UES Aval, first as an elected member and then as a union
representative. Mr. Keller has been an elected member,
representing holders of fund units, of the Supervisory Board of the
TOTAL ACTIONNARIAT FRANCE collective investment fund since
November 2012.
Main function: Engineer.
Director of TOTAL S.A. representing employee shareholders since
May 17, 2013 and until 2016.
Member of the Audit Committee until 2016.
Gunnar Brock
Born on April 12, 1950 (Swedish).
Current directorships
None.
A graduate of Stockholm School of Economics with an MBA 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.
Main function: Chairman of the Board of Directors of Stora Enso
Oy*.
Director of TOTAL S.A. since 2010.
Last renewal: May 17, 2013 until 2016.
Independent director. Member of the Compensation Committee,
the Governance and Ethics Committee and the Strategic
Committee until 2016.
Current directorships
– Chairman of the Board of Directors of Stora Enso Oy*
– Member of the Board of Investor AB*
Directorships that have expired in the previous five years
– Director of TOTAL S.A.* representing employee shareholders until
2016.
1.1.2. Absence of conflicts of interest
or convictions
The Board of Directors noted the absence of potential conflicts of
interest between the directors’ duties with respect to the Company
and their private interests. To the Company’s knowledge, there is
no family relationship among the members of the Board of Directors
of TOTAL S.A., there is no arrangement or agreement with
customers or suppliers under which a director was selected, and
there is no service agreement that binds a director to TOTAL S.A.
or to any of its subsidiaries and provides for special benefits under
the terms thereof.
The Board of Directors’ Rules of Procedure stipulate the specific
rules for preventing conflicts of interest as applicable to directors
(refer to article 2.5 of the Rules of Procedure – Duty of Loyalty).
The current members of the Board of Directors of the Company
have declared to the Company that they have not been convicted,
Registration Document 2016. TOTAL
95
5 Corporate governance
Composition and practices of the Board of Directors
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 No. 809 / 2004 of April 29, 2004.
The Board of Directors, at its meeting on February 8, 2017, based
on the proposals of the Governance and Ethics Committee, thus
noted that Mr. Desmarais, Jr could not be considered as
independent as of December 31, 2016.
1.1.3. Director independence
At its meeting on February 8, 2017, the Board of Directors, on the
recommendation of the Governance and Ethics Committee,
reviewed the independence of the Company’s directors as of
December 31, 2016. At the Committee’s proposal, 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 point 8.5 of the AFEP-MEDEF Code, revised in
November 2016, as described below:
– not to be an employee or executive director of the Company, or
an employee, executive director or director of its parent company
or of a company consolidated by its parent company, and not
having been in such a position for the previous five years;
– not to be an executive director of a company in which the
Company holds a directorship, directly or indirectly, or in which
an employee appointed as such or an executive director of the
Company (currently in office or having held such office for less
than five years) is a director;
– not to be a significant customer, supplier, investment banker or
commercial banker of the Company or Group or for which the
Company or the Group represents a material part of their
business (the assessment of the materiality or non-materiality of
the relationship must be discussed by the Board and the
quantitative and qualitative criteria on which this assessment was
based (continuity, economic dependence, exclusivity, etc.) must
be explained in the annual report;
– not to be related by close family ties to a director of the Company;
– not to have been a statutory auditor of the Company within the
previous five years; and
– not to have been a director of the Company for more than 12
years. Loss of the status of independent director occurs on the
date at which this period of 12 years is reached.
The AFEP-MEDEF Code stipulates that non-executive directors
cannot be considered independent if they receive variable
compensation in cash or in the form of shares or any other
compensation linked to the performance of the Company or Group.
It also stipulates that directors representing major shareholders of
the corporation or its parent company may be considered as being
independent provided that these shareholders do not take part in
control of the corporation. Nevertheless, beyond a 10% holding of
stock or 10% of the voting rights, the Board, upon a report from the
nominations committee, should systematically review the qualification
of a director as independent in the light of the make-up of the
corporation’s capital and the existence of a potential conflict of interest.
With regard to the criterion of 12 years of service, the Board of
Directors, at its meeting on February 10, 2016, noted that as of
December 31, 2015, Mr. Desmarais, Jr was disqualified from being
considered as independent within the meaning of the AFEP-MEDEF
Code, because he had served on the Board for more than 12 years.
Concerning the independence of Ms. Kux and Mr. Lemierre, the Board
of Directors, at its meeting on February 8, 2017, based on the proposals
of the Governance and Ethics Committee, confirmed that the
independence analysis carried out in 2016 continues to be relevant.
Accordingly, Mses. Barbizet, Coisne-Roquette, Idrac, van der
Hoeven and Kux and Messrs. Artus, Lamarche and Lemierre were
deemed to be independent directors.
The percentage of independent directors on the Board based on its
composition as of December 31, 2016 was 80% (1).
The rate of independence of the Board of Directors is higher than
that recommended by the AFEP-MEDEF Code, which specifies that
at least half of the members of the Board in widely-held companies
with no controlling shareholders must be independent.
1.1.4. Diversity policy of the Board of Directors
The Board of Directors places a great deal of importance on its
composition and the composition of its Committees. In particular, it
relies on the work of the Governance and Ethics Committee, which
reviews annually and proposes, as circumstances may require,
desirable changes to the composition of the Board of Directors and
Committees based on the Group’s strategy.
The Governance and Ethics Committee conducts its work within
the framework of a formal procedure so as to ensure that the
directors’ fields of speciality are complementary and that their
profiles are diverse, to maintain an overall proportion of
independent members that is appropriate to the Company’s
governance structure and shareholder base, to allow for a balanced
representation of men and women on the Board, and to promote
an appropriate representation of directors of different nationalities.
As part of an effort that began several years ago, the composition of
the Board of Directors has changed significantly since 2010 to achieve
better gender balance and an openness to more international profiles.
As of February 8, 2017, the Board of Directors had, among its
twelve members, five non-French members, as well as six male
directors and six female directors.
The director(s) representing employees appointed in accordance
with Article L. 225-27-1 of the French Commercial Code are not
taken into account to apply provisions on the balanced
representation of men and women on the Board. Therefore, the
proportion of women on the Board was 54.5% as of December 31,
2016 (six women out of eleven directors).
The 40% proportion of directors from each gender has thus been
reached since the Shareholders’ Meeting held on May 24, 2016 (six
women and five men over eleven directors), by early application of
the legal provisions providing for the same 40% threshold
applicable as from January 1, 2017.
1.1.5. Training of directors
Directors may ask to receive training in the specifics of the
Company, its businesses and its business sector, as well as any
training that may help them perform their duties as directors.
(1) Excluding the director representing employee shareholders and the director representing employees, in accordance with the recommendations of the AFEP-MEDEF Code (point 8.3).
96
TOTAL. Registration Document 2016
Composition and practices of the Board of Directors
Corporate governance 5
The director representing employees also receives 20 hours of
training per year, which covers in-house training at the Company
and / or training in economics offered by an outside company
chosen by the director, after the Board Secretary has accepted the
company and the training program.
Since 2013, the Board of Directors has met each year at a Group
site. In October 2016, the Board of Directors met in Scotland in the
West of Shetland area at the Laggan project site. Meetings of the
Board held at sites contribute to the integration of new directors.
1.1.6. Appointment and renewal of directorships
proposed to the Shareholders’ Meeting of
May 26, 2017
Renewal of the directorship of Mses. Patricia Barbizet
and Marie-Christine Coisne-Roquette
Directorships of Mses. Patricia Barbizet, Marie-Christine Coisne-
Roquette, Barbara Kux and of Mr. Paul Desmarais, jr. will expire at
the end of the Annual Shareholders’ Meeting of May 26, 2017. Ms.
Barbara Kux and Mr. Paul Desmarais, jr. have not requested the
renewal of their directorship.
As a result, at its meeting of February 8, 2017, and further to a
proposal by the Governance and Ethics Committee, the Board of
Directors decided to submit to the Annual Shareholders’ Meeting of
May 26, 2017 the renewal of the directorship of Mses. Patricia
Barbizet and Marie-Christine Coisne-Roquette for a three-year term
to expire at the end of the Annual Shareholders’ Meeting held in
2020 to approve the 2019 financial statements.
1.2. Practices of the Board of Directors
1.2.1. Governance structure
Combination of the management positions
At its meeting on December 16, 2015, the Board of Directors
decided to reunify the positions of Chairman and Chief Executive
Officer of TOTAL S.A. as of December 19, 2015. As a result, since
that date, Mr. Pouyanné has held the position of Chairman and
Chief Executive Officer of TOTAL S.A.
Following the death of TOTAL’s former Chairman and Chief Executive
Officer, Mr. de Margerie, the Board of Directors decided, at its meeting
on October 22, 2014, to separate the functions of Chairman and
Chief Executive Officer in order to best ensure the transition of the
General Management. The Board of Directors therefore appointed
Mr. Pouyanné as Chief Executive Officer for a term of office expiring
at the end of the Annual Shareholders’ Meeting called in 2017 to approve
the 2016 financial statements (2), and Mr. Desmarest as Chairman of the
Board of Directors for a term of office expiring on December 18, 2015,
in accordance with the age limit set out in the bylaws. It was
announced that, on that date, the functions of Chairman and Chief
Executive Officer of TOTAL S.A. would be combined.
The decision to reunify the positions of Chairman of the Board of
Directors and Chief Executive Officer was made further to work
Appointment of Mr. Mark Cutifani and Mr. Carlos Tavares
At its meeting of February 8, 2017, and further to a proposal by the
Governance and Ethics Committee, the Board of Directors decided
to submit to the same Shareholders’ Meeting the appointment of
Mr. Mark Cutifani and Mr. Carlos Tavares as directors for a three-
year term to expire at the end of the Shareholders’ Meeting to be
held in 2020 to approve the 2019 financial statements.
Mr. Mark Cutifani, of Australian nationality, Chief Executive of the
Anglo-American Plc. company, will, in particular, bring to the Board
his knowledge of industry and raw-material cyclical economy, Mark
Cutifani having in addition a professional experience in several
countries where the Group is developing (Australia, South Africa,
Brazil, Canada, UK).
Mr. Carlos Tavares, of Portuguese nationality, Chairman of the
Management Board of the company Peugeot S.A., will, in particular,
bring to the Board his knowledge of the industrial world and the
inland transport sector, downstream from the oil and gas sector.
The Board of Directors considered that Mr. Mark Cutifani and
Mr. Carlos Tavares could be deemed to be independent following
an assessment based on the independence criteria set forth in the
AFEP-MEDEF Code.
Following the Shareholders’ Meeting of May 26, 2017, if the
proposed resolutions are approved, the Board of Directors will have
twelve members (as previously), of which five would be non-French
nationals. The proportion of directors from each gender would be
higher than 40% in accordance with the provisions of Article
L. 225-18-1 of the French Commercial Code (five women and six
men over eleven directors) (1).
done by the Governance and Ethics Committee and in the best
interests of the Company. The Board of Directors deemed that a
unified Management Form was most appropriate to the Group’s
organization, modus operandi and business, and to the specificities
of the oil and gas sector. In its decision, the Board in particular noted
the advantage for the Group of having a unified management in
strategic negotiations with governments and the Group’s partners.
The Board also wanted the Group’s governance structure to ensure
a balanced distribution of powers. To this end, at its meeting on
December 16, 2015, the Board amended the provisions of its Rules
of Procedure to provide for the appointment of a Lead Independent
Director in case of the combination of the positions of Chairman
of the Board of Directors and Chief Executive Officer. The Lead
Independent Director’s duties, resources and rights are described
in the Rules of Procedure of the Board of Directors.
The balance of powers within the Company’s bodies is also
ensured by the composition of the Board of Directors and that of its
four Committees, particularly given the high proportion of members
who are independent directors. It is further ensured by the directors’
full involvement in the work of the Board and the Committees, and
by their diverse profiles, skills and expertise (refer to point 1.1 above).
(1) Excluding the director representing employees, in accordance with Article L.225-27-1 of the French Commercial Code.
(2) The Board of Directors of December 16, 2015 decided to prorogate the term of this office to the end of the 2018 Annual Shareholders’ Meeting, date of expiry of the term of office of
Mr. Pouyanné as Director.
Registration Document 2016. TOTAL
97
5 Corporate governance
Composition and practices of the Board of Directors
In addition, the Board’s Rules of Procedure provide that investments
and divestments considered by the Group exceeding 3% of equity
must be approved by the Board, which is also informed of any
significant events related to the Company’s operations, particularly
investments and divestments in amounts exceeding 1% of equity.
Finally, the Company’s bylaws also offer the necessary guarantees
to ensure compliance with best governance practices under a unified
Management Form. In particular, they stipulate that a Board meeting
may be convened by any means, including verbally, and at short notice
in case of urgency, by the Chairman, a Vice Chairman, or by a third
of its members, at any time and as often as required to ensure the best
interests of the Company. The Rules of Procedure of the Board of
Directors also state that each director must notify the Board of Directors
of any existing or potential conflict of interest with the Company or any
Group company and must refrain from participating in any vote related
to the corresponding resolution as well as in any discussion
preceding such vote.
Lead Independent Director
At its meeting on December 16, 2015, the Board of Directors appointed
Ms. Barbizet as Lead Independent Director as of December 19, 2015.
Pursuant to the provisions of the Rules of Procedure of the Board
of Directors, she therefore chairs the Governance and Ethics Committee.
The duties of the Lead Independent Director are described in detail
in the Rules of Procedure of the Board of Directors, the full version
of which is provided in point 1.2.2 below.
1.2.2. Working procedures of the Board of Directors
The working procedures of the Board of Directors are set out in its
Rules of Procedure, which specify the mission of the Board of Directors
and the rules related to the organization of its work. The Board’s
Rules of Procedure also specify the obligations of each director, as well
as the role and powers of the Chairman and the Chief Executive Officer.
Mr. Charles Paris de Bollardière has served as Secretary of the
Board of Directors since his appointment by the Board of Directors
on September 15, 2009.
Since November 4, 2014, the date of the first appointment of the
director representing employees on the Board of Directors, a member
of the Central Works Council attends Board meetings in an advisory
capacity, pursuant to Article L. 2323-65 of the French Labor Code.
The Rules of Procedure of the Board of Directors are reviewed on a
regular basis to adapt them to changes in governance rules and
practices. In 2014, changes were made to include, in particular,
new provisions relating to information of the Board of Directors in
the event of new directorships being assumed by the directors or
changes in existing directorships, together with a reminder of the
obligations of confidentiality inherent to the work of the Board.
In December 2015, changes were made to provide for the appointment
of a Lead Independent Director in the event of the unification of the
Management Form and to define his or her duties.
The text of the latest unabridged version of the Rules of Procedure
of the Board of Directors, as approved by the Board of Directors at
its meeting on December 16, 2015, is provided below. It is also
available on the Company’s website under “Our Group / Governance”.
The Board of Directors of TOTAL S.A.(1) approved the following Rules of Procedure.
1. ROLE OF THE BOARD OF DIRECTORS
The Board of Directors is a collegial body that determines the strategic direction of the Company and supervises 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 Company’s operation and make 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 executive directors (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 being considered by the Group that exceed 3% of shareholders’ equity;
– reviewing information on significant events related to the Company’s operations, in particular for investments and divestments involving
amounts exceeding 1% of shareholders’ equity;
– conducting any audits and investigations it deems appropriate. In particular, the Board, with the assistance of the Audit Committee, ensures that:
- authority has been properly defined and that the various corporate bodies of the Company make proper use of their powers and responsibilities,
- no individual is authorized 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 the statutory auditors are able to perform their mission satisfactorily, and
- the Committees it has created duly perform their responsibilities;
– ensuring the quality of the information provided to shareholders and financial markets through the financial statements that it approves as
well as the annual reports, or when major transactions are conducted;
– convening and setting the agenda for Shareholders’ Meetings or meetings of bond holders;
– preparing on an annual basis the list of directors it deems to be independent according to generally accepted corporate governance criteria; and
– appointing a Lead Independent Director under the conditions set out in article 7, when the Chairman of the Board of Directors is also the
Chief Executive Officer pursuant to a decision by the Board of Directors.
(1) TOTAL S.A. is referred to in these Rules of Procedure as the “Company” and collectively with all its direct and indirect subsidiaries as the “Group”.
(2) The term “executive director” refers to the Chairman and Chief Executive Officer, if the Chairman of the Board of Directors is also responsible for the management of the Company;
the Chairman of the Board of Directors and the Chief Executive Officer, if the two roles are carried out separately; and, where applicable, any Deputy Chief Executive Officers or Chief
Operating Officers, depending on the organizational structure adopted by the Board of Directors.
98
TOTAL. Registration Document 2016
Composition and practices of the Board of Directors
Corporate governance 5
2. OBLIGATIONS OF THE DIRECTORS OF TOTAL S.A.
Before accepting a directorship, all candidates receive a copy of TOTAL S.A.’s bylaws and these rules of procedure. They must ensure that
they have broad knowledge of the general and particular obligations related to their duty, especially the laws and regulations governing
directorships in French limited liability companies (sociétés anonymes) whose shares are listed in one or several regulated markets. They must
also ensure that they are familiar with the guidelines set out in the Corporate Governance Code to which the Company refers.
Accepting a directorship creates an obligation to comply with applicable regulations relating in particular to the functioning of the Board of
Directors, and with the ethical rules of professional conduct for directors as described in the Corporate Governance Code to which the
Company refers. It also creates an obligation to comply with these rules of procedure and to uphold the Group’s values as described in its
Code of Conduct.
When directors participate in and vote at meetings of the Board of Directors, they are required to represent all of the Company’s
shareholders and to act in the interest of the Company as a whole.
2.1. INDEPENDENCE OF JUDGMENT
Directors undertake to maintain, in all circumstances, 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 or, more generally,
any third party.
2.2. OTHER DIRECTORSHIPS OR FUNCTIONS
Directors must keep the Board of Directors informed of any position they hold on the management team, Board of Directors or Supervisory
Board of any other company, whether French or foreign, listed or unlisted. This includes any positions as a non-voting member (censeur) of a
board. To this end, directors expressly undertake to promptly notify the Chairman of the Board of Directors, and the Lead Independent
Director if one has been appointed, of any changes to the positions held, for any reason, whether appointment, resignation, termination or
non-renewal.
2.3. PARTICIPATION IN THE BOARD’S WORK
Directors undertake to devote the amount of time required to duly consider the information they are given and otherwise prepare for meetings
of the Board of Directors and of the Committees of the Board of Directors on which they sit. They may request from the executive directors
any additional information they deem necessary or useful to their duties. If they consider it necessary, they may request training on the Company’s
specificities, businesses and industry sector, and any other training that may be of use to the effective exercise of their duties as directors.
Unless unable, in which case the Chairman of the Board shall be provided with advance notice, directors are to attend all meetings of the
Board of Directors, meetings of Committees of the Board of Directors on which they serve and Shareholders’ Meetings.
The Chairman of the Board ensures that directors receive all relevant information concerning the Company, including that of a negative
nature, particularly analyst reports, press releases and the most important media articles.
2.4. CONFIDENTIALITY
Directors and any other person who attends all or part of any meeting of the Board of Directors or its Committees are under the strict
obligation not to disclose any details of the proceedings.
All documents reviewed at meetings of the Board of Directors, as well as information conveyed prior to or during the meetings, are strictly
confidential.
With respect to all non-public information acquired during the exercise of their functions, directors are bound by professional secrecy not to divulge
such information to employees of the Group or to outside parties. This obligation goes beyond the mere duty of discretion provided for by law.
Directors must not use confidential information obtained prior to or during meetings for their own personal benefit or for the benefit of
anyone else, for whatever reason. They must take all necessary steps to ensure that the information remains confidential. Confidentiality and
privacy are lifted when such information is made publicly available by the Company.
2.5. DUTY OF LOYALTY
Directors must not take advantage of their office or duties to gain, for themselves or a third party, any monetary or non-monetary benefit.
They must notify the Chairman of the Board of Directors and the Lead Independent Director, if one has been appointed, of any existing or
potential conflict of interest with the Company or any Group company and they must refrain from participating in the vote relating to the
corresponding resolution as well as in any discussion preceding such vote.
Directors must inform the Board of Directors of their participation in any transaction that directly involves the Company, or any Group
company, before such transaction is finalized.
Directors must not assume personal responsibilities in companies or businesses having activities in competition with those of the Company
or any Group company without first having informed the Board of Directors.
Directors undertake not to seek or accept from the Company, or from companies directly or indirectly connected to the Company, any
advantages liable to be considered as being of a nature that may compromise their independence.
Registration Document 2016. TOTAL
99
5 Corporate governance
Composition and practices of the Board of Directors
2.6. DUTY OF EXPRESSION
Directors undertake to clearly express their opposition if they deem a decision being considered by the Board of Directors is contrary to the
Company’s corporate interest and they must endeavor to convince the Board of Directors of the pertinence of their position.
2.7. TRANSACTIONS IN THE COMPANY’S SECURITIES AND STOCK EXCHANGE RULES
While in office, directors are required to hold the minimum number of registered shares of the Company as set by the bylaws.
Generally speaking, directors must act with the highest degree of prudence and vigilance when completing any personal transaction
involving the financial instruments of the Company, its subsidiaries or affiliates that are listed or that issue listed financial instruments.
To that end, directors must comply with the following requirements:
1. Any shares or ADRs of TOTAL S.A. or its listed subsidiaries are to be held in registered form, either with the Company or its agent, or as
administered registered shares with a French broker (or North American broker for ADRs), whose contact details are communicated by
the director to the Secretary of the Board of Directors.
2. Directors shall refrain from directly or indirectly engaging in (or recommending engagement in) transactions involving the financial
instruments (shares, ADRs or any other securities related to such financial instruments) of the Company or its listed subsidiaries, or any
listed financial instruments for which the director has insider information.
Insider information is specific information that has not yet been made public and that directly or indirectly concerns one or more issuers of
financial instruments or one or more financial instruments and which, if it were made public, could have a significant impact on the price of
the financial instruments concerned or on the price of financial instruments related to them.
3. Any transaction in the Company’s financial instruments (shares, ADRs or related financial instruments) is strictly prohibited during the thirty
calendar days preceding the publication by the Company of its periodic results (quarterly, half-year or annual) as well as on the day of any
such announcement.
4. Moreover, directors shall comply, where applicable, with the provisions of Article L. 255-197-1 of the French Commercial Code, which
stipulates that free shares may not be sold:
– during the ten trading days preceding and the three trading days following the date on which the Consolidated Financial Statements or,
failing that, the annual financial statements, are made public; and
– during the period from the date on which the Company’s corporate bodies become aware of information that, if it were made public,
could have a significant impact on the Company’s share price, until ten trading days after such information is made public.
5. Directors are prohibited from carrying out transactions on any financial instruments related to the Company’s share (Paris option market
(MONEP), warrants, exchangeable bonds, etc.) and from buying on margin or short selling such financial instruments.
6. Directors are also prohibited from hedging the shares of the Company and any financial instruments related to them, and in particular:
– all Company shares that they hold; and, where applicable;
– Company share subscription or purchase options;
– rights to Company shares that may be awarded free of charge; and
– Company shares obtained from the exercise of options or granted free of charge.
7. Directors must make all necessary arrangements to declare, pursuant to the form and time frame provided by applicable law, to the
French Financial Markets Authority (Autorité des marchés financiers), as well as to the Secretary of the Board of Directors, any transaction
involving the Company’s securities conducted by themselves or by any other person to whom they are closely related.
3. FUNCTIONING OF THE BOARD OF DIRECTORS
3.1. BOARD MEETINGS
The Board of Directors meets at least four times a year and whenever circumstances require.
Prior to each Board meeting, the directors receive the agenda and, whenever possible, all other materials necessary to consider for the
session.
Directors may be represented by another director at a meeting of the Board, provided that no director holds more than one proxy at any
single meeting.
Whenever authorized by law, directors are considered present for quorum and majority purposes who attend Board meetings through video
conferencing or other audiovisual means that are compliant with the technical requirements set by applicable regulations.
3.2. DIRECTORS’ FEES
The Board of Directors allocates annual directors’ fees within the total amount authorized by the Annual Shareholders’ Meeting.
Compensation includes a fixed portion and a variable portion that takes into account each directors’ actual participation in the work of the
Board of Directors and its Committees together with, if applicable, the duties of the Lead Independent Director.
The Chief Executive Officer or, if the functions are combined, the Chairman and Chief Executive Officer, does not receive any director’s fees
for his participation in the work of the Board and its Committees.
100
TOTAL. Registration Document 2016
Composition and practices of the Board of Directors
Corporate governance 5
3.3. SECRETARY OF THE BOARD OF DIRECTORS
The Board of Directors, based on the recommendation of its Chairman, appoints a Secretary of the Board who assists the Chairman in
organizing the Board’s activities, and particularly in preparing the annual work program and the schedule of Board meetings.
The Secretary drafts the minutes of Board meetings, which are then submitted to the Board for approval. The Secretary is authorized to
dispatch Board meeting minutes and to certify copies and excerpts of the minutes.
The Secretary is responsible for all procedures pertaining to the functioning of the Board of Directors. These procedures are reviewed
periodically by the Board.
All Board members may ask the Secretary for information or assistance.
3.4. EVALUATION OF THE FUNCTIONING OF THE BOARD OF DIRECTORS
The Board evaluates its functioning at regular intervals not exceeding three years. The evaluation is carried out under the supervision of the
Lead Independent Director, if one has been appointed, or under the supervision of the Governance and Ethics Committee, with the
assistance of an outside consultant. The Board of Directors also conducts an annual review of its practices.
4. ROLE AND AUTHORITY OF THE CHAIRMAN
The Chairman represents the Board of Directors and, except under exceptional circumstances, has sole authority to act and speak on behalf
of the Board of Directors.
The Chairman organizes and oversees the work of the Board of Directors and ensures that the Company’s corporate bodies operate
effectively and in compliance with good governance principles. The Chairman coordinates the work of the Board of Directors and its
Committees. The Chairman establishes the agenda for each Board meeting, including items suggested by the Chief Executive Officer.
The Chairman ensures that directors receive, in a timely manner and in a clear and appropriate format, the information they need to
effectively carry out their duties.
In liaison with the Group’s General Management, the Chairman is responsible for maintaining relations between the Board of Directors and
the Company’s shareholders. The Chairman monitors the quality of information disclosed by the Company.
In close cooperation with the Group’s General Management, the Chairman may represent the Company in high-level discussions with
government authorities and major partners, both at a national and international level.
The Chairman is regularly informed by the Chief Executive Officer of significant events and situations relating to the Group, particularly with
regard to strategy, organization, monthly financial reporting, major investment and divestment projects and key financial transactions.
The Chairman may ask the Chief Executive Officer or other senior executives of the Company, provided that the Chief Executive Officer is
informed, to supply any information that may help the Board or its Committees to carry out their duties.
The Chairman may meet with the statutory auditors in order to prepare the work of the Board of Directors and the Audit Committee.
Every year, the Chairman presents a report to the Annual Shareholders’ Meeting describing the preparation and organization of the Board
of Directors’ work, any limits set by the Board of Directors concerning the powers of the Chief Executive Officer, and the internal control
procedures implemented by the Company. To this end, the Chairman obtains the necessary information from the Chief Executive Officer.
5. AUTHORITY OF THE CHIEF EXECUTIVE OFFICER
The Chief Executive Officer is responsible for the Company’s overall management. He represents the Company in its relationships with third
parties and chairs the Executive Committee. The Chief Executive Officer is vested with the broadest powers to act on behalf of the Company
in all circumstances, subject to the powers that are, by law, restricted to the Board of Directors and to the Annual Shareholders’ Meeting, as
well as to the Company’s corporate governance rules and in particular these rules of procedure of the Board of Directors.
The Chief Executive Officer is responsible for presenting the Group’s results and prospects to shareholders and the financial community on a
regular basis.
At each meeting of the Board of Directors, the Chief Executive Officer presents an overview of significant Group events.
6. BOARD COMMITTEES
The Board of Directors approved the creation of:
– an Audit Committee;
– a Governance and Ethics Committee;
– a Compensation Committee; and
– a Strategic Committee.
The roles and composition of each Committee are set forth in their respective rules of procedure, which have been approved by the Board of Directors.
Registration Document 2016. TOTAL
101
5 Corporate governance
Composition and practices of the Board of Directors
The Committees perform their duties under the authority and for the benefit of the Board of Directors.
Each Committee reports on its activities to the Board of Directors.
7. LEAD INDEPENDENT DIRECTOR
7.1. APPOINTMENT OF THE LEAD INDEPENDENT DIRECTOR
When the functions of the Chairman of the Board and Chief Executive Officer are combined, the Board of Directors appoints a Lead
Independent Director, on the recommendation of the Governance and Ethics Committee, from among the directors considered to be
independent by the Board of Directors.
The appointed Lead Independent Director holds this position while in office as director, unless otherwise decided by the Board of Directors,
which may choose to terminate his or her duties at any time. If for any reason the director is no longer deemed to be independent, his or her
position as Lead Independent Director will be terminated.
The Lead Independent Director, if one is appointed, chairs the Governance and Ethics Committee.
7.2. DUTIES OF THE LEAD INDEPENDENT DIRECTOR
The Lead Independent Director’s duties include:
1. Convening meetings of the Board of Directors – Meeting Agenda
The Lead Independent Director may request that the Chairman and Chief Executive Officer call a meeting of the Board of Directors to
discuss a given agenda.
He or she may request that the Chairman and Chief Executive Officer include additional items on the agenda of any meeting of the Board
of Directors.
2. Participation in the work of the Committees
If not a member of the Compensation Committee, the Lead Independent Director is invited to attend meetings and participates in the
work of the Compensation Committee relating to the annual review of the executive directors’ performance and recommendations
regarding their compensation.
3. Acting as Chairperson of Board of Directors’ meetings
When the Chairman and Chief Executive Officer is unable to attend all or part of a meeting of the Board of Directors, the Lead
Independent Director chairs the meeting. In particular, he or she chairs those Board meetings the proceedings of which relate to the
evaluation of the performance of the executive directors and the determination of their compensation, which take place in their absence.
4. Evaluation of the functioning of the Board of Directors
The Lead Independent Director manages the evaluation process relating to the functioning of the Board of Directors and reports on this
evaluation to the Board of Directors.
5. Prevention of conflicts of interest
Within the Governance and Ethics Committee, the Lead Independent Director organizes the performance of due diligence in order to
identify and analyze potential conflicts of interest within the Board of Directors. He or she informs the Chairman and Chief Executive Officer
of any conflicts of interest identified as a result and reports to the Board of Directors on these activities.
Pursuant to the obligation to declare conflicts of interest set out in article 2.5 of these Rules, any director affected by an existing or
potential conflict of interest must inform the Chairman and Chief Executive Officer and the Lead Independent Director.
6. Monitoring of the satisfactory functioning of the Board and compliance with the Rules of Procedure
The Lead Independent Director ensures compliance with the rules of the Corporate Governance Code to which TOTAL S.A. refers and
with the Rules of Procedure of the Board of Directors. He or she may make any suggestions or recommendations that he deems
appropriate to this end.
He or she ensures that the directors are in a position to carry out their tasks under optimal conditions and that they have sufficient
information to perform their duties.
With the agreement of the Governance and Ethics Committee, the Lead Independent Director may hold meetings of the directors who do
not hold executive or salaried positions on the Board of Directors. He or she reports to the Board of Directors on the conclusions of such
meetings.
7. Relationships with Shareholders
The Chairman and Chief Executive Officer and the Lead Independent Director are the shareholders’ dedicated contacts on issues that fall
within the remit of the Board.
When a shareholder approaches the Chairman and Chief Executive Officer in relation to such issues, they may seek the opinion of the
Lead Independent Director before responding appropriately to the shareholder’s request.
When the Lead Independent Director is approached by a shareholder in relation to such issues, he or she must inform the Chairman and
Chief Executive Officer, providing his or her opinion, so that the Chairman and Chief Executive Officer may respond appropriately to the
request. The Chairman and Chief Executive Officer must inform the Lead Independent Director of the response given.
7.3. RESOURCES, CONDITIONS OF OFFICE AND ACTIVITY REPORT
The Chairman and Chief Executive Officer must regularly update the Lead Independent Director on the Company’s activities.
The Lead Independent Director has access to all of the documents and information necessary for the performance of his or her duties.
102
TOTAL. Registration Document 2016
Composition and practices of the Board of Directors
Corporate governance 5
The Lead Independent Director may consult the Secretary of the Board and use the latter’s services in the performance of his or her duties.
Under the conditions set out in article 3.2 of these Rules and those established by the Board of Directors, the Lead Independent Director
may receive additional director’s fees for the duties entrusted to him or her.
The Lead Independent Director must report annually to the Board of Directors on the performance of his or her duties. During Annual
General Meetings, the Chairman and Chief Executive Officer may invite the Lead Independent Director to report on his or her activities.
1.2.3. Activity of the Board of Directors
Directors are generally given written notice of Board meetings
during the week preceding the 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 the following Board
meeting.
The Board of Directors held 10 meetings in 2016. The attendance
rate for all the directors was 88.4%. The Audit Committee held 7
meetings, with an attendance rate of 92.9%; the Compensation
Committee met 3 times, with 100% attendance; the Governance
and Ethics Committee held 2 meetings, with 100% attendance;
and the Strategic Committee met twice, with 90% attendance.
A table summarizing individual attendance at the Board of Directors
and Committee meetings is provided below.
Directors’ attendance at Board and Committee meetings in 2016
Directors Board of Audit Compensation Governance Strategic
Directors Committee Committee and Ethics Committee
Committee
Attendance Number of Attendance Number of Attendance Number of Attendance Number of Attendance Number of
rate meetings rate meetings rate meetings rate meetings rate meetings
Patrick Pouyanné 100% 10 / 10 - - - - - - 100% 2 / 2
Thierry Desmarest (a) 100% 5 / 5 - - - - 100% 1 / 1 100% 1 / 1
Patrick Artus 80% 8 / 10 100% 7 / 7 - - - - 100% 2 / 2
Patricia Barbizet 90% 9 / 10 - - 100% 3 / 3 100% 2 / 2 100% 2 / 2
Marc Blanc 100% 10 / 10 - - - - - - 50% 1 / 2
Gunnar Brock (a) 60% 3 / 5 - - 100% 2 / 2 100% 1 / 1 100% 1 / 1
Marie-Christine Coisne-Roquette 100% 10 / 10 100% 7 / 7 100% 3 / 3 - - 100% (b) 2 / 2 (b)
Paul Desmarais, Jr 40% 4 / 10 - - - - - - 50% (b) 1 / 2 (b)
Maria van der Hoeven (c) 80% 4 / 5 - - - - - - 100% (b) 1 / 1 (b)
Anne-Marie Idrac 100% 10 / 10 - - - - 100% 2 / 2 100% (b) 2 / 2 (b)
Charles Keller (a) 100% 5 / 5 100% 3 / 3 - - - - 100% (b) 1 / 1 (b)
Barbara Kux 100% 10 / 10 - - - - 100% 2 / 2 100% 2 / 2
Gérard Lamarche 90% 9 / 10 71.5% 5 / 7 100% 3 / 3 - - - -
Jean Lemierre (c) 80% 4 / 5 - - - - - - - -
Renata Perycz (c) 100% 5 / 5 - - - - - - 100% (b) 1 / 1 (b)
Attendance rate 88.4% 92.9% 100% 100% 90% (d)
(a) Director until May 24, 2016.
(b) Voluntary participation (director not a member of the Strategic Committee).
(c) Director since May 24, 2016.
(d) Excluding voluntary participation.
The Board meetings included, but were not limited to, a review of
the following subjects:
– renewal of the authorization to issue bonds;
– renewal of the authorization to issue security, commitments
February 10
– 2015 accounts (Consolidated Financial Statements, parent
company accounts) after the Audit Committee’s report and
work performed by the statutory auditors;
– draft allocation of the profits of TOTAL S.A., setting of the
dividend, ex-dividend and payment dates, option for the
payment of the balance of the dividend in shares;
– main financial communications, including industrial safety
aspects;
– examination of the Report of the Chairman of the Board of
Directors (Article L. 225-37 of the French Commercial Code);
– information about the results of the option to receive the payment
of the second interim dividend for fiscal year 2015 in shares;
– information on the credit ratings of the long-term debt of TOTAL S.A.;
and guarantees;
– debate on the Board of Directors’ practices based on a summary
presented by the Governance and Ethics Committee of the
evaluation carried out in the form of a detailed questionnaire to
which each director responded; definition of the proposed
strategic directions;
– assessment of the directors’ independence and report on
the absence of conflicts of interest;
– opinion on the candidates for the position of director
representing employee shareholders;
– proposal to appoint and renew directorships;
– determination of the amount of directors’ fees due for fiscal
year 2015;
– the Chairman and Chief Executive Officer’s compensation
(in the absence of the Chairman and Chief Executive Officer).
Registration Document 2016. TOTAL
103
5 Corporate governance
Composition and practices of the Board of Directors
March 15
– presentation to the Board of the work of the Audit Committee
at its meeting on March 11, 2016;
– presentation to the Board of the work of the Compensation
Committee, and acknowledgment of the acquisition rate of
performance shares under the 2013 plan;
– results for the second quarter 2016 and the first half of 2016
after the Audit Committee’s report and work performed by the
statutory auditors;
– setting of a second interim dividend;
– presentation to the Board of the work of the Compensation
Committee;
– presentation of the report of the independent monitor designated
– share capital increase reserved for Group employees and
by the American authorities: summary and outlook;
free grant of shares as a deferred contribution;
– review of various chapters of the Registration Document forming
– performance share grants on the recommendation of the
the Management Report within the meaning of the French
Commercial Code;
– preparation of the Annual Shareholders’ Meeting: agenda,
resolutions and reports;
– setting the schedule related to the payment of interim dividends
and the balance of the dividend for 2017;
– distribution of the third interim dividend for the 2015 fiscal year
and setting of the new share issue price for the option to receive
the interim dividend in shares.
April 26
– summary of the Strategic Committee meeting of March 15, 2016;
– presentation of the Group’s map of risks;
– results for the first quarter of 2016 after the Audit Committee’s
report and work performed by the statutory auditors;
– presentation to the Board of the work of the Audit Committee
at its meeting on April 22, 2016;
– setting of a first interim dividend;
– information about the results of the option to receive the payment
of the third interim dividend for fiscal year 2015 in shares;
– request for authorization to issue guarantees;
– information on declarations of thresholds in the Company’s
capital to be declared;
– preparation of the Annual Shareholders’ Meeting: review of a
request made by the shareholders to include a point on the
Annual Shareholders’ Meeting agenda; the Board of Directors’
position on this request;
– the economic and financial situation of the Company:
communication of the opinion of the Central Works Council
meeting on March 31, 2016.
May 9
– information on the project to acquire Saft Groupe.
May 24 – pre-Shareholders’ Meeting
– review of the draft responses to the written questions submitted
by shareholders;
– presentation of the report “Total and the climate”;
– setting of the share issue price for the payment of the balance of
the 2015 dividend in shares, subject to the adoption of the
resolution by the Annual Shareholders’ Meeting of May 24, 2016;
– information on bond issues;
– request for authorization to issue guarantees;
– information on the public offer made by the Company for
Saft Groupe;
– delegation of powers to operate on Company shares, subject to
the adoption of the resolution of the Shareholders’ Meeting on
May 24, 2016;
– information on the project to acquire an interest in the permits in
Papua New Guinea.
July 27
– information on the Al-Shaheen field and request for authorization
to issue the related guarantees;
– strategic perspectives of the Refining & Chemicals segment
including safety and energy efficiency aspects and prevention of
major environmental risks;
Compensation Committee;
– information about the results of the votes on the resolutions
at the Annual Shareholders’ Meeting held on May 24, 2016,
the results of the option to receive the payment of the remaining
balance of the dividend for fiscal year 2015 in shares;
– information on bond issues;
– information on the public offer launched on Saft Groupe;
– information on the notifications received of the crossings of
thresholds in the Company’s capital.
September 21
– presentation of the project to sell Atotech;
– summary of the Strategic Committee meeting of September 21,
2016;
– strategic perspectives of Exploration & Production activities with
a presentation of safety indicators and environmental objectives;
– mid-2016 financial communications: presentation of the outlook
and objectives for the coming years;
– the Company’s strategic directions;
– presentation of the Company’s equal opportunity and salary
equality policy and comparative status of overall employment
and training conditions for women and men in the Company;
– distribution of the first interim dividend for the 2016 fiscal year
and setting of the new share issue price for the option to receive
the interim dividend in shares;
– information on the public offer launched on Saft Groupe;
– information on the powers subdelegated to the Treasurer.
October 6
– approval of the proposal to sell Atotech.
October 27 – meeting held in Scotland in the West of Shetland
area at the Laggan project site
– summary of the Strategic Committee meeting of September 21, 2016;
– strategic perspectives of Marketing & Services activities,
including the operational safety, technological risk and
environmental aspects;
– the Group’s 5-year plan;
– results for the third quarter of 2016 after the Audit Committee’s
report and work performed by the statutory auditors;
– setting of a third interim dividend;
– information on bond issues;
– information about the results of the option to receive the payment
of the first interim dividend for fiscal year 2016 in shares;
– request for authorization to issue guarantees;
– information on the notifications received of the crossings of
thresholds in the Company’s capital.
December 15
– Board of Directors’ response to the Central Works Council’s
opinion on the strategic directions presented to the Board;
– information on the end of the monitoring process and the
compliance program;
– 2017 budget review;
– distribution of the second interim dividend for the 2016 fiscal year
and setting of the new share issue price;
104
TOTAL. Registration Document 2016
Composition and practices of the Board of Directors
Corporate governance 5
– information on agreements and commitments concluded and
authorized in the preceding periods, the execution of which
continued during the 2016 fiscal period;
– information on bond issues;
– purchase of treasury shares and correlative reduction of the
Company’s share capital.
1.2.4. Audit Committee
Composition
As of February 8, 2017 Age Sex Independence Years’ Expiry of
service on director’s term
the Board of office
Marie-Christine Coisne-Roquette Chairperson of the Committee 60 F • 6 2017
Patrick Artus Member 65 M • 8 2018
Gérard Lamarche Member 55 M • 5 2019
As of February 8, 2017, the Committee has three members, all of
whom are independent. The careers of all of the Committee members
attest to their possession of acknowledged expertise in the financial
and accounting or economic fields (refer to point 1.1.1 above).
– monitoring the implementation and the proper workings of a
disclosures committee in the Company, and reviewing its
conclusions;
– examining the assumptions used to prepare the financial
Ms. Coisne-Roquette was appointed “financial expert” of the
Committee by the Board at its meeting of December 16, 2015.
Duties
The rules of procedure of the Audit Committee define the
Committee’s duties and working procedures. The rules of procedure
were last modified on February 8, 2017, in order to adapt the
missions of the Committee to the European audit reform. The text of
the unabridged version of the rules of procedure approved by the
Board of Directors on February 8, 2017 is available on the
Company’s website under “Our Group / Corporate Governance”.
Notwithstanding the duties of the Board of Directors, the Audit
Committee is tasked with the following missions in particular:
Regarding the statutory auditors:
– making a recommendation to the Board of Directors on the
statutory auditors put before the Annual Shareholders’ Meeting for
designation or renewal, following their selection procedure organized
by General Management and enforcing the applicable regulations;
– monitoring the statutory auditors in the performance of their
missions and, in particular, examining the additional report drawn
up by the statutory auditors for the Committee, while taking
account of the observations and conclusions of the High Council
of statutory auditors (Haut Conseil du Commissariat aux
comptes) further to the inspection of the auditors in question in
application of the legal provisions, where appropriate; and
– ensuring that the statutory auditors meet the conditions of
independence as defined by the regulations, and to analyzing the
risks to their independence and the measures taken to mitigate
these risks; to this end, examining all the fees paid by the Group
to the statutory auditors, including for services other than the
certification of the financial statements, and making sure that the
rules applying to the maximum length of the term of the statutory
auditors and the obligation to alternate are obeyed;
– approving the delivery by the statutory auditors of services other
than those relating to the certification of the financial statements,
in accordance with the applicable regulations.
Regarding accounting and financial information:
– following the process to produce financial information and,
where appropriate, formulating recommendations to guarantee
its integrity, where appropriate;
statements, assessing the validity of the methods used to handle
significant transactions and examining the parent company
financial statements and annual, half-yearly, and quarterly
Consolidated Financial Statements prior to their examination by
the Board of Directors, after regularly monitoring the financial
situation, cash position and off-balance sheet commitments;
– guaranteeing the appropriateness and the permanence of the
accounting policies and principles chosen to prepare the
statutory and Consolidated Financial Statements of the Company;
– examining the scope of the consolidated companies and, where
appropriate, the reasons why companies are not included;
– examining the process to validate the proved reserves of the
companies included in the scope of consolidation; and
– reviewing, if requested by the Board of Directors, major
transactions contemplated by the Company.
Regarding internal control and risk management procedures:
– monitoring the efficiency of the internal control and risk
management systems and of internal audits, in particular with
regard to the procedures relating to the production and
processing of accounting and financial information, without
compromising its independence, and in this respect:
- checking that these systems exist and are deployed, and that
actions are taken to correct any identified weaknesses or
anomalies,
- examining the exposure to risk and significant off-balance sheet
commitments,
- annually examining the reports on the work of the Group Risk
Management Committee (formely named Group Risk
Committee) and the major issues for the Group,
- examining the annual work program of the internal auditors and
being regularly informed of their work,
- reviewing significant litigation at least once a year,
- overseeing the implementation of the Group’s 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 control
or auditing matters, and monitoring the implementation of this
procedure, and
- where appropriate, examining important operations in which a
conflict of interests could have arisen.
Registration Document 2016. TOTAL
105
5 Corporate governance
Composition and practices of the Board of Directors
Organization of activities
The Committee meets at least seven times each year: each quarter
to review in particular the statutory financial statements of the
Company, and the annual and quarterly Consolidated Financial
Statements, and at least on three other occasions to review
matters not directly related to the review of the quarterly financial
statements.
At each Committee meeting where the quarterly financial
statements are reviewed, the Group’s Chief Financial Officer
presents the Consolidated Financial Statements and the statutory
financial statements of the Company, as well as the Group’s
financial position and, in particular, its liquidity, cash flow and debt
situation. A memo describing risk exposure and off-balance sheet
commitments is communicated to the Committee. This review of
the financial statements includes a presentation by the statutory
auditors underscoring the key points observed.
As part of monitoring the efficiency of the internal control and risk
management systems, the Committee is informed of the work
program of the Audit & Internal Control Division and its organization,
on which it may issue an opinion. The Committee also receives a
summary of the internal audit reports, which is presented at each
Committee meeting where the quarterly financial statements are
reviewed. The risk management processes implemented within the
Group and updates to them are presented regularly to the Committee.
The Committee may meet with the Chairman and Chief Executive
Officer or, if the functions are separate, the Chairman of the Board
of Directors, the Chief Executive Officer and, if applicable, any
Deputy Chief Executive Officer of the Company. It may perform
inspections and consult with managers of operational or functional
entities, as may be useful in performing its duties. The Chairperson
of the Committee gives prior notice of such meeting to the
Chairman and Chief Executive Officer or, if the functions are
separate, both the Chairman of the Board of Directors and the
Chief Executive Officer. 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.
– presentation of certain sections of the Registration Document:
risk factors and legal proceedings;
– update on internal audit and controls: presentation of the 2015
main accomplishments and key topics of the audit plan for 2016.
Comments on the results of the assessment of internal control on
financial reporting conducted for fiscal year 2015 as part of the
implementation of the Sarbanes-Oxley Act (SOX), along with a
summary of the statutory auditors’ assessments of internal control
related to financial reporting as part of the SOX 404 process;
– review of the draft of the Chairman’s report on internal control
and risk management procedures;
– update on unvalued guarantees given by TOTAL S.A.
March 11
– update on compliance procedures: 2015 results and
implementation of programs; presentation of the interim report of
the independent monitor designated by the American authorities;
– presentation of the social, environmental and societal information
in the Registration Document; presentation by the statutory
auditors of their procedures and the conclusions of their review
of these issues;
– review of the hydrocarbon reserves evaluation process at
year-end 2015;
– presentation by the statutory auditors of the report on the
payments made to governments;
– presentation of the Group’s insurance policy: coverage for 2016
against property damage, business interruption and civil liability.
April 22
– review of the statutory and consolidated financial statements of
TOTAL S.A. as parent company for the first quarter of 2016, with a
presentation by the statutory auditors of a summary of their work;
– presentation of the Group’s financial position at the end of the
quarter;
– update on the internal audits conducted in the first quarter of 2016;
– presentation of the Group’s risk map.
June 8
– presentation of the topics covered by the Group Risk Committee
in 2015, including crisis communications, the management of
intellectual property, supplier risks, the map of security risks and
industrial information systems security;
The Committee consults with the statutory auditors regularly,
including at least once a year without any Company representative
present. If it is informed of a substantial irregularity, it recommends
that the Board of Directors takes all appropriate action.
– presentation of the main risks related to governance in the
Group: human rights, international economic sanctions,
intellectual property, application of the regulatory framework;
– presentation of the updated Treasury Department risk map.
Audit Committee activity
In 2016, the Audit Committee met seven times, with an attendance
rate of 92.9%. Its work mainly focused on the following areas:
February 8
– review of the accounts for the fourth quarter of 2015, the Group’s
consolidated results and the statutory financial statements of
TOTAL S.A. as parent company for 2015. Presentation by the
statutory auditors of a summary of their work performed in
accordance with French and American professional audit
standards, in particular on the Group’s positions in terms of
valuing assets;
– review of the Group’s financial position;
– presentation of the preparation process and key validation stages
of the Management Report forming chapter 3 of the
Registration Document;
July 25
– review of the Consolidated Financial Statements for the second
quarter and first half of 2016 and the statutory financial
statements of TOTAL S.A. as parent company. Presentation by
the statutory auditors of a summary of their work;
– presentation of the Group’s financial position at the end of the
quarter;
– update on the internal audits conducted during the second
quarter of 2016;
– update on the new, recently adopted accounting standards:
recognition of sales; leases.
October 10
– presentation of the risk map of Exploration & Production’s
General Management;
– statutory auditors’ analysis of the main transverse risks to be
addressed as important points in their audit plan for the closing
of the 2016 accounts;
106
TOTAL. Registration Document 2016
Composition and practices of the Board of Directors
Corporate governance 5
– presentation of the European audit reform by the statutory
– information on compliance by relevant employees with the
auditors;
– presentation of the changes to the rules of procedure of the
Audit Committee due to the European audit reform;
– statutory auditors: update on fees followed by review of the rules
for pre-approval of audit and non-audit services and approval, as
modified due to the introduction of the European audit reform;
– review of significant litigation and status update on the main
pending proceedings involving the Group;
– update on the settlements with the American authorities
concluded in 2013, bringing an end to the inquiry of the SEC and
the DoJ into activities in Iran in the 1990s;
– presentation of changes to the Financial Code of Ethics.
The members of the Committee then met with the statutory
auditors without any Group employees being present.
October 25
– review of the statutory and consolidated financial statements of
TOTAL S.A. as parent company for the third quarter of 2016 and
the first nine months of 2016. Presentation by the statutory
auditors of a summary of their work;
– presentation of the Group’s financial position at the end of the
quarter;
– update on the internal audits conducted in the third quarter of
2016;
provisions of the Financial Code of Ethics;
– presentation of the Group’s fiscal position.
At each meeting related to the quarterly financial statements, the
Committee reviewed the Group’s financial position in terms of liquidity,
cash flow and debt, as well as its significant risks and off-balance
sheet commitments. The Audit Committee was periodically
informed of the risk management processes implemented within
the Group and the work carried out by the Audit & Internal Control
Division, which was presented at each Committee meeting where
the quarterly financial statements were reviewed.
The Audit Committee reviewed the financial statements no later
than two days before they were reviewed by the Board of Directors,
a sufficient amount of time as precluded by the recommendations
of the AFEP-MEDEF Code.
The statutory auditors attended all Audit Committee meetings held
in 2016.
The Chief Financial Officer, the Vice President Accounting, the Senior
Vice President Audit & Internal Control Division and the Treasurer
attended all Audit Committee meetings, related to their area.
The Chairman of the Committee reported to the Board of Directors
on the Committee’s activities.
1.2.5. Governance and Ethics Committee
Composition
As of February 8, 2017 Age Sex Independence Years’ Expiry of
service on director’s term
the Board of office
Patricia Barbizet Chairperson of the Committee 61 F • 9 2017
Anne-Marie Idrac Member 65 F • 5 2018
Barbara Kux Member 62 F • 6 2017
As of February 8, 2017, the Governance and Ethics Committee has
three members, all of whom are independent.
Duties
The rules of procedure of the Governance and Ethics Committee
define the Committee’s duties and working procedures. The text of
the unabridged version of the rules of procedure approved by the
Board of Directors on December 16, 2015 is available on the
Company’s website under “Our Group / Corporate Governance”.
The Governance and Ethics Committee is focused on:
– recommending to the Board of Directors persons who are
qualified to be appointed as directors, so as to ensure that the
directors have a wide range of skills and diverse profiles;
– recommending to the Board of Directors the persons who are
qualified to be appointed as executive directors;
– preparing the Company’s corporate governance rules and
supervising their implementation; and
– ensuring compliance with ethics rules and examining any
questions related to ethics and conflicts of interest.
Its duties include:
– presenting recommendations to the Board regarding its
composition and that of its Committees, and regarding the
independence of each candidate for directors’ positions on
the Board of Directors;
– proposing annually to the Board of Directors the list of directors
who may be considered as “independent directors”;
– examining sections within its purview of reports to be sent by
the Board of Directors or its Chairman to shareholders;
– assisting the Board of Directors in the selection and assessment
of the executive directors and examining the preparation of their
possible successors, including cases of unforeseeable absence;
– recommending to the Board of Directors persons who are
qualified to be appointed as directors;
– recommending to the Board of Directors persons who are
qualified to be appointed as members of a Committee of
the Board of Directors;
– proposing methods for the Board of Directors to evaluate its
performance, and in particular preparing means of regular self-
assessment of the practices of the Board of Directors, and the
possible assessment thereof by an external consultant;
Registration Document 2016. TOTAL
107
5 Corporate governance
Composition and practices of the Board of Directors
– proposing to the Board of Directors terms and conditions for
allocating directors’ fees and conditions under which expenses
incurred by the directors are reimbursed;
– developing and recommending to the Board of Directors the
corporate governance principles applicable to the Company;
– preparing recommendations requested at any time by the
Board of Directors or the General Management of the Company
regarding appointments or governance;
– examining the conformity of the Company’s governance
practices with the recommendations of the Corporate
Governance Code adopted by the Company;
– supervising and monitoring implementation of the Company’s
ethics and compliance program and, in this respect, ensuring
that the necessary procedures for updating the Group’s Code
of Conduct are put in place and that this Code is disseminated
and applied;
the assistance of an external consultant, to which the directors
responded;
– proposals to the Board of Directors regarding the assessment of
the independence of the directors based on the independence
criteria specified in the AFEP-MEDEF Code and after reviewing
the level of activity between certain directors and the Group’s
suppliers;
– proposal to the Board of Directors regarding the director
representing employee shareholders appointed by the 2016
Annual Shareholders’ Meeting;
– proposals to the Board of Directors regarding the new directors
appointed by the 2016 Annual Shareholders’ Meeting;
– review of the terms and conditions for allocating directors’ fees to
directors and Committee members;
– information update on transactions on the Company’s securities
by executive and non-executive directors;
– examining any questions related to ethics and conflicts of
– examining sections within its purview of reports to be sent by the
interest; and
Board of Directors or its Chairman to shareholders.
– examining changes in the duties of the Board of Directors.
Governance and Ethics Committee activity
In 2016, the Governance and Ethics Committee held two meetings,
with 100% attendance. Its work mainly focused on the following
areas:
February 10
– results of the formal self-assessment of the Board’s practices
conducted in the form of a detailed questionnaire, prepared with
July 27
– presentation by the Chairman of the Ethics Committee of a
review of the ethics program for 2015 (information and training
campaigns, changes in the matters and cases reviewed, ethical
assessments conducted within the Group’s entities, actions
related to human rights) and presentation of the priorities for
2016;
– discussion of changes to the composition of the Board
of Directors.
1.2.6. Compensation Committee
Composition
As of February 8, 2017 Age Sex Independence Years’ Expiry of
service on director’s term
the Board of office
Gérard Lamarche Chairman of the Committee 55 M • 5 2019
Patricia Barbizet Member 61 F • 9 2017
Marie-Christine Coisne-Roquette Member 60 F • 6 2017
As of February 8, 2017, the Compensation Committee has three
members, all of whom are independent.
Duties
The rules of procedure of the Compensation Committee define the
Committee’s duties and working procedures. The text of the
unabridged version of the rules of procedure approved by the
Board of Directors on February 9, 2012 is available on the
Company’s website under “Our Group / Corporate Governance”.
The Committee is focused on:
– examining the executive compensation policies implemented by
the Group and the compensation of members of the Executive
Committee;
Its duties include:
– reviewing the main objectives proposed by the General
Management of the Company regarding compensation of the
Group’s executive directors, including stock option plans, free
share plans and equity-based plans, and advising on this
subject;
– making 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 executive directors of the Company; in particular, the
Committee proposes compensation structures that take into
account the Company’s strategy, objectives and earnings as
well as market practices,
– evaluating the performance and recommending the
- grants of stock options and free shares, particularly grants of
compensation of each executive director; and
registered shares to the executive directors;
– preparing reports which the Company must present in these
areas.
108
TOTAL. Registration Document 2016
Composition and practices of the Board of Directors
Corporate governance 5
– examining sections within its purview of reports to be sent by
the Board of Directors or its Chairman to shareholders;
– review of compliance with the restrictions on share transfers
by the Chairman and Chief Executive Officer.
March 14
– confirmation of the acquisition rate of performance shares under
the 2013 plan;
– review of the performance share and stock option grant policy
for 2016;
– review of the Executive Committee members’ compensation.
July 27
– proposal related to the capital increase reserved for Group
employees;
– proposal of acquisition of free shares as a contribution as part of
the capital increase reserved for Group employees;
– proposals regarding the 2016 performance share plan: number
of beneficiaries, length of the acquisition period (three years) and
retention period (two years), performance conditions for final
grant, proposal regarding the grant of performance shares to the
Chairman and Chief Executive Officer.
– reviewing the compensation of the members of the Executive
Committee, including stock option plans, free share plans and
equity-based plans, pension and insurance plans and in-kind
benefits;
– preparing and presenting reports in accordance with its rules of
procedure;
– examining, for the parts within its remit, reports to be sent by the
Board of Directors or its Chairman to shareholders; and
– preparing recommendations requested at any time by the
Chairman of the Board of Directors or the General Management
of the Company regarding compensation.
Work of the Compensation Committee
In 2016, the Compensation Committee held three meetings, with
100% attendance. The Chairman and the Chief Executive Officer is
not allowed to attend the Committee’s deliberations regarding his
own situation.
Its work mainly focused on the following areas:
February 10
– determination of the variable portion of the compensation
to be paid to the Chairman and Chief Executive Officer for
his performance in 2015;
– proposed compensation for the Chairman and Chief Executive
Officer (fixed and variable portion for fiscal year 2016);
1.2.7. Strategic Committee
Composition
As of February 8, 2017 Age Sex Independence Years’ Expiry of
service on director’s term
the Board of office
Patrick Pouyanné Chairman of the Committee 53 M 2 2018
Patrick Artus Member 65 M • 8 2018
Patricia Barbizet Member 61 F • 9 2017
Marc Blanc Member 62 M 3 2017
Barbara Kux Member 62 F • 6 2017
As of February 8, 2017, the Strategic Committee has five members,
three of whom are independent.
Duties
The rules of procedure of the Strategic Committee define the
Committee’s duties and working procedures. The text of the
unabridged version of the rules of procedure approved by the
Board of Directors on April 25, 2013 is available on the Company’s
website under “Our Group / Corporate Governance”.
To allow the Board of Directors of TOTAL S.A. to ensure the
Group’s development, the Strategic Committee’s duties include:
– examining the Group’s overall strategy proposed by the
Company’s Chief Executive Officer;
– examining operations that are of particular strategic importance;
and
– reviewing competition and the resulting medium and long-term
outlook for the Group.
Work of the Strategic Committee
In 2016, the Strategic Committee held two meetings, with 90%
attendance. Its work mainly focused on the following areas:
March 15
– analysis of the strategy of two of the Group’s major competitors;
– analysis of TOTAL’s ambitions over the next 20 years.
September 21
– analysis of the strategy of one of the Group’s major competitors;
– analysis of long-term demand on the oil and gas markets.
1.2.8. Assessment of the Board’s practices
Once a year, the Board of Directors discusses its practices. It also
conducts a formal assessment of its own practices at regular
intervals of up to three years. This evaluation is carried out under
the supervision of the Lead Independent Director, if one has been
appointed, or under the supervision of the Governance and Ethics
Committee with the help of an outside consultant. When a Lead
Independent Director is appointed, he or she oversees this
evaluation process and reports on it to the Board of Directors.
Registration Document 2016. TOTAL
109
5 Corporate governance
Composition and practices of the Board of Directors
At its meeting on February 8, 2017, the Board of Directors
discussed its practices on the basis of a formal self-assessment
carried out in the form of a detailed questionnaire. The evaluation
was carried out under the supervision of Ms. Barbizet, Lead
Independent Director, in January 2017. The responses given by the
directors were then presented to the Governance and Ethics
Committee to be reviewed and summarized. This summary was
then discussed by the Board of Directors. This process made it
possible to confirm the quality of each director’s contribution to the
work of the Board and its Committees.
This formal evaluation showed a positive opinion of the practices
of the Board of Directors and the Committees. In particular, it was
noted that the suggestions for improvement made by the directors
in recent years had generally been taken into account. During the
Board of Directors’ meetings, some of which were held at certain
of the Group’s sites, special attention was paid at the start of each
meeting to the review of the main points to be examined by the
Board (financial statements, large-scale investment and divestment
projects, etc.).
Furthermore, the main suggestions for improving the Board made
by the directors during their January 2016 self-assessment have
been put in place:
– monitoring risks at the Board’s level: a presentation of the
Group’s risk map was made to the Board during its meeting of
April 26, 2016, and such presentation is to take place annually;
– evolution of the Board’s composition: proposals by the
Governance and Ethics Committee to the Board of Directors of
February 8, 2017 met the directors’ expectations;
– independent directors’ meeting: held on December 15, 2016 at
the initiative of the Lead Independent Director; and
– secured platform to access the Board’s documents: this platform
was put in place in September 2016.
This self-assessment conducted in January 2017 highlighted the
directors’ satisfaction with the practices of the Board of Directors,
both in terms of form and substance, and, in particular, concerning
freedom of expression, an appropriate level of dialogue, the collegiality
of decision-making and the relevance of subjects addressed.
The directors appreciated notably the pace and agenda of meetings,
the possibility for informal exchanges during lunches and meetings
held at Group sites, as well as the quality of relations with the Lead
Independent Director. The Board of Directors made the following
suggestions that could further improve its practices:
– understanding of the Group’s organization and knowledge
of its executive officers;
– analysis of extra-financial risks, in particular geopolitical risks,
relating to significant investment projects submitted to the Board;
– ex post analysis of major investment decisions;
– new director induction program; and
– facilitation of access to the electronic document platform of the
Board of Directors.
In addition, in compliance with Article 7.2.6. of the Board Rules of
Procedures, the Lead Independent Director held on December 15,
2016, a meeting of the directors who do not hold executive or
salaried positions on the Board of Directors. During this meeting,
which was reported to the Board of Directors, directors also
discussed the Board of Directors’ practices.
1.2.9. Report of the Lead Independent Director on
her mandate
During the Board meeting of February 8, 2017, Ms. Barbizet
presented a report of her mandate as Lead Independent Director.
The Lead Independent Director indicated that she exercised her
duties since her appointment on December 15, 2016 as follows:
– contact with the Chairman and Chief Executive Officer: the Lead
Independent Director is a privileged interlocutor of the Chairman
and Chief Executive Officer with respect to significant matters
concerning the Group’s business and preparing meetings of the
Board of Directors;
– assessment of the Board’s practices: the Lead Independent
Director conducted the assessment of the Board’s practices
(refer to point 1.2.8, above);
– avoidance of conflicts of interest: the Lead Independent Director
put in place the diligence intended to identify and analyze
potential situations of conflicts of interest. She brought to the
attention of the Chairman and Chief Executive Officer potential
situations of conflict of interest that had been identified. In
September 2016, a director thus consulted the Lead
Independent Director concerning a potential conflict of interest
that could arise due to the director’s potential participation on a
committee in charge of strategically advising the board of
directors of a company of the energy sector. Following this
consultation, this director decided on September 22, 2016 to not
accept the offer to participate in the committee. The Lead
Independent Director also indicated to the Board that the
Chairman and Chief Executive Officer has informed the
Governance and Ethics Committee that he had been solicited so
that his appointment as director of Cap Gemini S.A. would be
proposed to the next shareholders meeting of that company.
Considering this company’s activities in advanced technologies
that could have an important role in the evolution of the Group’s
businesses, the Committee recommended to the Board that it
grants its authorization. The Board of Directors authorized the
Chairman and Chief Executive Officer to accept this proposal;
– monitoring of the Board’s practices: the Lead Independent Director
held a meeting on December 15, 2016 of the non-executive and
non-salaried directors. She presented a summary of this meeting
to the Board of Directors. The specific issues discussed during
this meeting were the following: understanding internal organization
and knowledge of senior executives in order to, notably, make
succession plans; analysis of extra-financial risks, in particular
geopolitical risks; and ex post analysis of implemented projects;
– relations with shareholders: the Chairman and Chief Executive
Officer and the Lead Independent Director are the priviledged
points of contacts for shareholders concerning accountability of
the Board. When the Chairman and Chief Executive Officer is
solicited in this area by a shareholder, he may consult with the
Lead Independent Director before responding. When the Lead
Independent Director is solicited in this area by a shareholder,
she informs the Chairman and Chief Executive Officer and gives
her opinion so that the Chairman and Chief Executive Officer can
give appropriate response to the request. The Chairman and
Chief Executive Officer informs the Lead Independent Director of
the response. Thus, for example, the Lead Independent Director
was informed in January 2016 of a question of a shareholder of
the Company concerning the high number of mandates exercised
by a director and the answer that was given by the Company;
110
TOTAL. Registration Document 2016
Composition and practices of the Board of Directors
Corporate governance 5
– relations with other stakeholders: certain suppliers of the Group
contacted the Lead Independent Director concerning various
claims against the Company. Responses were transmitted by
various relevant services of the Company after the Lead
Independent Director had been informed on the matters.
1.3. Statement regarding corporate governance
For many years, TOTAL has taken an active approach to corporate
governance and at its meeting on November 4, 2008, the Board of
Directors decided to refer to the AFEP-MEDEF Code of Corporate
Governance for publicly traded companies.
The AFEP-MEDEF Code is available on the Internet websites of the
AFEP and the MEDEF.
The AFEP-MEDEF Code was revised in June 2013 to introduce
new changes regarding, in particular, a consultation procedure in
which shareholders can express an opinion on the individual
compensation of the executive directors (say on pay), as well as the
establishment of a High Committee for corporate governance, an
independent structure in charge of monitoring implementation of
the Code. It was also revised in November 2015 to introduce the
principle of consultation of the Annual Shareholders’ Meeting in
case of the sale of at least one half of the Company’s assets and to
bring the Code in line with new laws regarding supplementary
pensions of executive directors. The Code was also revised in
November 2016 in order to clarify and complete certain
recommendations, in particular on the independence of directors,
CSR and the compensation of the executive directors.
Pursuant to Article L. 225-37 of the French Commercial Code, the following table sets forth the sole recommendation made in the AFEP-
MEDEF Code that the Company has opted not to follow and the reasons for such decision.
Recommendations not followed Explanation – Practice followed by TOTAL
Supplementary pension plan (point 24.6.2 of the Code)
– Supplementary pension schemes with defined benefits must be
subject to the condition that the beneficiary must be a director or
employee of the Company when claiming his or her pension
rights pursuant to the applicable rules.
It appeared justified not to deprive the relevant beneficiaries of the
benefit of the pension commitments made by the Company in the
particular cases of the disability or departure of a beneficiary over
55 years of age at the initiative of the Group. In addition, it should
be noted that the supplementary pension plan set up by the Company
was declared to URSSAF in 2004, in accordance with Articles
L. 137-11 and R. 137-16 of the French Social Security Code.
Compared to the prior fiscal year, the Company’s practices have
evolved in two areas concerning the recommendations made in the
AFEP-MEDEF Code. First, a meeting not attended by the executive
and non-executive directors took place on December 15, 2016.
The recommendation made in the AFEP-MEDEF Code (point 10.3)
stating that “It is recommended that a meeting not attended by the
executive Officers be organized each year” was, therefore, followed.
Second, concerning the recommendation made in the AFEP-
MEDEF Code concerning the composition of the Compensation
Committee that one “director designated by employees should be a
member”, the Board of Directors approved on February 8, 2017,
the proposal of the Governance and Ethics Committee to appoint
Ms. Renata Perycz as a member of the Compensation Committee
as from the end of the Shareholder Meeting of May 26, 2017.
Ms. Perycz, thanks to the nature of her salaried duties in the Group,
will in particular bring to the Compensation Committee her experience
in Human Resources.
Registration Document 2016. TOTAL
111
5 Corporate governance
General Management. Shares held by the administration and management bodies
2. General Management
2.1. The Executive Committee
The Executive Committee, under the responsibility of the Chairman
and Chief Executive Officer, is the decision-making body of the
Group.
It implements the strategy formulated by the Board of Directors and
authorizes related investments, subject to the approval of the Board
of Directors for investments exceeding 3% of the Group’s equity or
notification of the Board for investments exceeding 1% of equity.
In 2016, the Executive Committee met at least twice a month,
except in August when it met once.
As of December 31, 2016, the members of TOTAL’s Executive
Committee were as follows:
– Patrick Pouyanné, Chairman and Chief Executive Officer
and President of the Executive Committee;
– Arnaud Breuillac, President, Exploration & Production;
– Patrick de La Chevardière, Chief Financial Officer;
– Momar Nguer, President, Marketing & Services;
– Bernard Pinatel, President, Refining & Chemicals;
– Philippe Sauquet, President, Gas, Renewables & Power,
and President, Group Strategy-Innovation; and
– Namita Shah, President, People & Social Responsibility.
2.2. The Group Performance Management Committee
The mission of the Group Performance Management Committee is
to examine, analyze and monitor the safety, financial and
operational results of the Group. It is chaired by the Chairman and
Chief Executive Officer and meets monthly.
In addition to the members of the Executive Committee, this
Committee, chaired by the Chairman and Chief Executive Officer, is
made up of the head of the Group’s main business units, as well as
a limited number of Senior Vice Presidents of functions at the
Group and business segment levels.
3. Shares held by the administration
and management bodies
As of December 31, 2016, based on statements by the directors
and the share register listing registered shares, all of the members
of the Board of Directors and the Group’s executive officers (1) held
less than 0.5% of the share capital:
– members of the Board of Directors (2): 88,067 shares and
10,293.26 units of the collective investment fund (“FCPE”)
invested in TOTAL shares;
– Chairman and Chief Executive Officer: 72,470 shares and
8,177.02 units of the FCPE invested in TOTAL shares;
– members of the Executive Committee (3): 290,233 shares and
15,133.81 units of the FCPE invested in TOTAL shares; and
– executive officers (3): 359,483 shares and 22,079.74 units of the
FCPE invested in TOTAL shares.
By decision of the Board of Directors:
– executive directors 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; and
– 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
must be acquired within three years of their appointment to the
Executive Committee.
The number of TOTAL shares to be considered are comprised of
TOTAL shares and units of the FCPE invested in TOTAL shares.
(1) The Group’s executive officers include the members of the Executive Committee, the four Senior Vice Presidents of the central Group functions who are members of the Group
Performance Management Committee (HSE, Strategy & Climate, Communications, Legal) and the Treasurer.
(2) Including the Chairman and Chief Executive Officer, the director representing employee shareholders and the director representing employees.
(3) Excluding the Chairman and Chief Executive Officer.
112
TOTAL. Registration Document 2016
Shares held by the administration and management bodies
Corporate governance 5
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 2016 by the individuals referred to in paragraphs a), b) (1) and c) of Article L. 621-18-2 of the French Monetary and
Financial Code:
Year 2016 Acquisition Subscription Transfer Exchange Exercise
of stock
options
Patrick Pouyanné (a) TOTAL shares - 2,182.00 16,000.00 16,000.00
Units in FCPE and other related financial instruments (b) 409.25 0.71 - - -
Maria van der Hoeven (a) TOTAL shares 1,000.00 - - - -
Units in FCPE and other related financial instruments (b) - - - - -
Gérard Lamarche (a) TOTAL shares - 30.00 - - -
Units in FCPE and other related financial instruments (b) - - - - -
Jean Lemierre (a) TOTAL shares 1,000.00 - - - -
Units in FCPE and other related financial instruments (b) - - - - -
Philippe Boisseau (a) TOTAL shares - 299.00 - - -
Units in FCPE and other related financial instruments (b) 19.78 13.64 - - -
Arnaud Breuillac (a) TOTAL shares - 1,403.00 12.500,00 - 17,500.00
Units in FCPE and other related financial instruments (b) 130.59 230.99 3,620.21 - -
Patrick de La Chevardière (a) TOTAL shares - 4,738.00 20,000.00 - 20,000.00
Units in FCPE and other related financial instruments (b) 117.89 418.83 941.94 - -
Jean-Jacques Guilbaud (a) TOTAL shares - 1,854.00 - - -
Units in FCPE and other related financial instruments (b) 143.38 585.02 - - -
Momar Nguer (a) TOTAL shares - 167.00 17,949.00 - 21,800.00
Units in FCPE and other related financial instruments (b) 78.79 0.268 6,579.67 - -
Bernard Pinatel (a) TOTAL shares - 333.00 20,500.00 - 20,500.00
Units in FCPE and other related financial instruments (b) 9.21 - - - -
Philippe Sauquet (a) TOTAL shares - 1,575.00 - - 7,600.00
Units in FCPE and other related financial instruments (b) 642.51 11.46 6,851.25 - -
Namita Shah (a) TOTAL shares - 49.00 - - -
Units in FCPE and other related financial instruments (b) 11.91 5.86 - - -
(a) Including related parties within the meaning of the provisions of Article R. 621-43-1 of the French Monetary and Financial Code.
(b) FCPE primarily invested in TOTAL shares.
(1) The individuals referred to in paragraph b) of Article L. 621-18-2 of the French Monetary and Financial Code include the members of the Executive Committee.
Registration Document 2016. TOTAL
113
[THIS PAGE INTENTIONALLY LEFT BLANK]
12. Responsabilité sociale, environ-
nementale et sociétale
Compensation of the administration
and management bodies 6
Compensation of the administration
and management bodies
1. Board members’ compensation 116
2. Chairman and Chief Executive Officer’s compensation 118
2.1.
2.2.
2.3.
Compensation of the Chairman and Chief Executive Officer due or granted for fiscal year 2016 . . . . . . . . . . . . . . . . . . . . .118
Commitments made by the Company to the Chairman and Chief Executive Officer
(Article L. 225-102-1, paragraph 3, of the French Commercial Code) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .120
Summary tables (AFEP-MEDEF Code / AMF position-recommendation No. 2009-16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123
3. Executive officers’ compensation 125
4. Stock option and free share grants 125
4.1.
4.2.
4.3.
4.4.
General policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .125
Follow-up of grants to the executive directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .126
Follow-up of TOTAL stock option plans as of December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .128
Follow-up of TOTAL free share grants as of December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .130
5. Summary table of compensation components due or granted
to the Chairman and Chief Executive Officer for fiscal year 2016,
as submitted to the Ordinary Shareholders’ Meeting for vote
(AFEP-MEDEF Code, point 26) 132
6. Report on the principles and criteria for the determination, breakdown
and allocation of the fixed, variable and extraordinary components
of the total compensation (including in-kind benefits) attributable
to the Chairman and Chief Executive Officer (Article L. 225-37-2
of the French Commercial Code) 138
6.1.
6.2.
6.3.
General principles for determining the compensation of the executive directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .138
Compensation policy for the Chairman and Chief Executive Officer for fiscal year 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . .139
Draft resolution prepared by the Board of Directors in accordance with Article L. 225-37-2
of the French Commercial Code (paragraph 1) submitted to the Ordinary Shareholders’ Meeting of May 26, 2017 . . . . . .142
Registration Document 2016. TOTAL
115
6 Compensation of the administration and management bodies
Board members’ compensation
1. Board members’ compensation
The conditions applicable to Board members’ compensation are
defined by the Board of Directors on the proposal of the
Governance and Ethics Committee, subject to the aggregate
maximum amount of directors’ fees authorized by the Annual
Shareholders’ Meeting of May 17, 2013 and set at €1.4 million per
fiscal year.
In 2016, the aggregate amount of directors’ fees due to the
members of the Board of Directors was €1.1 million, noting that
there were 12 directors as of December 31, 2016.
The directors’ fees for fiscal year 2016 are allocated according to a
formula comprised of fixed compensation and variable
compensation based on fixed amounts per meeting, which makes
it possible to take into account each director’s actual attendance at
the meetings of the Board of Directors and its committees, subject
to the conditions below:
– a fixed annual portion of €20,000 per director (1), except for the
Chairman of the Audit Committee, for whom the fixed annual
portion is €30,000, and the other Audit Committee members, for
whom the fixed annual portion is €25,000;
– an additional fixed annual portion (1) of €15,000 for the Lead
Independent Director;
– an additional fixed annual portion (1) of €5,000 for the Chairman
of the Governance and Ethics Committee and for the Chairman
of the Compensation Committee;
– an amount of €5,000 per director for each Board of Directors’
meeting actually attended;
– an amount of €3,500 per director for each Governance and
Ethics Committee, Compensation Committee or Strategic
Committee meeting actually attended;
– an amount of €7,000 per director for each Audit Committee
meeting actually attended; and
– a premium of €2,000 for travel from outside France to attend a
Board of Directors’ or Committee meeting.
The Chairman and Chief Executive Officer does not receive directors’
fees for his work on the Board and Committees of TOTAL S.A.
The total amount paid to each director is determined after taking
into consideration the director’s actual presence at each Board of
Directors’ or Committee meeting and, if appropriate, after prorating
the amount set for each director such that the overall amount paid
remains within the maximum limit set by the Shareholders’ Meeting.
Directors’ fees for each fiscal year are paid following a decision by
the Board of Directors, on the proposal of the Governance and
Ethics Committee, at the beginning of the following fiscal year.
The director representing employee shareholders and the director
representing employees receive directors’ fees according to the
same terms and conditions as any other director.
The table below presents the total compensation (including in-kind
benefits) due and paid to each executive and non-executive
director (mandataires sociaux) during the previous two fiscal years
(Article L. 225-102-1 of the French Commercial Code, 1st and
2nd paragraphs).
Mr. Marc Blanc, the director representing employees, participates in
the internal defined contribution pension plan applicable to all
TOTAL S.A. employees, known as RECOSUP (Régime collectif et
obligatoire de retraite supplémentaire à cotisations définies),
governed by Article L. 242-1 of the French Social Security Code.
The Company’s commitment is limited to its share of the
contributions paid to the insurance company that manages the
plan. For fiscal year 2016, this pension plan represented a booked
expense to TOTAL S.A. in favor of Mr. Blanc of €764.
Mr. Blanc, who joined the Elf Aquitaine Group in 1980, also
participates in a supplementary defined benefit pension plan,
known as CREA, set up and financed by the Company. This plan
covers former employees of the Elf Aquitaine Group and was
closed on December 31, 1994. It does not require a presence
condition within the Group at the time of retirement. The
commitments made by the Group in favor of Mr. Blanc under this
plan represent, at December 31, 2016, a gross annual pension,
payable to his spouse within a limit of 60% in case of death of the
beneficiary, estimated at €4,877. Nearly the full amount of the
Group’s commitments under the CREA plan is outsourced to an
insurance company and the non-outsourced balance is evaluated
annually and adjusted through a provision in the accounts. The
amount of these commitments at December 31, 2016 in favor of
Mr. Blanc is €138.6 thousand. This amount represents the gross
value of the Group’s commitments to this beneficiary based on the
gross annual pension estimated as of December 31, 2016, as well
as a statistical life expectancy of the beneficiary and his spouse.
During the past two years, the directors currently in office have not
received any compensation or in-kind benefits from TOTAL S.A. or
from its controlled companies other than those mentioned in the
table below.
Moreover, there is no service contract between a director and
TOTAL S.A. or any of its controlled companies that provides for the
grant of benefits under such a contract.
(1) Calculated on a prorata basis in case of a change during the year.
116
TOTAL. Registration Document 2016
Compensation of the administration and management bodies 6
Board members’ compensation
Table of directors’ fees and other compensation due and paid to the executive and non-executive directors
(AMF Table No. 3)
Gross amount
(€)
Patrick Pouyanné
Directors’ fees
Other compensation
Thierry Desmarest
Directors’ fees (b) (f)
Other compensation
Patrick Artus
Directors’ fees
Other compensation
Patricia Barbizet
Directors’ fees (c)
Other compensation
Marc Blanc
Directors’ fees (d) (e)
Other compensation
Gunnar Brock
Directors’ fees (f)
Other compensation
Marie-Christine Coisne-Roquette
Directors’ fees (g)
Other compensation
Bertrand Collomb
Directors’ fees (h)
Other compensation
Paul Desmarais, Jr
Directors’ fees
Other compensation
Maria van der Hoeven
Directors’ fees (i)
Other compensation
Anne-Marie Idrac
Directors’ fees
Other compensation
Charles Keller
Directors’ fees (e) (j)
Other compensation
Barbara Kux
Directors’ fees
Other compensation
Gérard Lamarche
Directors’ fees (k)
Other compensation
Anne Lauvergeon
Directors’ fees (h)
Other compensation
Jean Lemierre
Directors’ fees (i)
Other compensation
Michel Pébereau
Directors’ fees (h)
Other compensation
Renata Perycz
Directors’ fees (l)
Other compensation
Total
For fiscal year 2016
For fiscal year 2015
Amounts
due
Amounts
paid
Amounts
due
Amounts
paid
None
(a)
39,924
None
121,000
None
109,500
None
73,500
76,443
42,924
None
146,500
None
n / a
n / a
49,500
None
43,576
None
84,000
None
59,405
90,326
100,000
None
150,000
None
n / a
n / a
32,076
None
n / a
n / a
48,576
53,158
None
(a)
82,500
None
88,000
None
130,644
None
72,000
76,443
107,500
None
122,679
None
28,109
None
61,000
None
None
None
79,000
None
126,000
90,326
102,500
None
147,000
None
31,609
None
None
None
31,609
None
None
53,158
None
(a)
82,500
None
88,000
None
None
(a)
101,500
None
101,500
None
130,644
None
136,000
None
72,000
75,014
107,500
None
122,679
None
28,109
None
61,000
None
n / a
n / a
79,000
None
126,000
91,947
102,500
None
147,000
None
31,609
None
n / a
n / a
8,178
75,014
115,000
None
126,000
None
81,000
None
56,000
None
n / a
n / a
77,000
None
93,083
91,947
104,000
None
156,000
None
68,500
None
n / a
n / a
31,609
None
74,000
None
n / a
n / a
n / a
n / a
1,320,408
1,430,077
1,377,111
1,507,673
(a) For more information concerning compensation, refer to the summary tables presented in point 2.3 of this chapter.
(b) Mr. Desmarest did not receive any specific compensation as Chairman of the Board until December 18, 2015. In respect of the previous duties that he performed within the Group until
May 21, 2010, he receives a retirement pension from the pension plans set up by the Company (internal defined contribution pension plan known as RECOSUP and supplementary
defined benefit pension plan).
(c) Lead Independent Director and Chairwoman of the Governance and Ethics Committee since December 19, 2015. Chairwoman of the Audit Committee until December 18, 2015.
(d) Director representing employees since November 4, 2014.
(e) Messrs. Blanc and Keller chose to pay all their directors’ fees to their trade union membership organizations for the entire term of their directorship.
(f) Director until May 24, 2016.
(g) Chairwoman of the Audit Committee since December 19, 2015.
(h) Director until May 29, 2015.
(i) Director since May 24, 2016.
(j) Director representing employee shareholders until May 24, 2016.
(k) Chairman of the Compensation Committee since December 19, 2015.
(l) Director representing employee shareholders since May 24, 2016.
Registration Document 2016. TOTAL
117
6 Compensation of the administration and management bodies
Chairman and Chief Executive Officer’s compensation
2. Chairman and Chief Executive Officer’s compensation
2.1. Compensation of the Chairman and Chief Executive Officer due or granted
for fiscal year 2016
The compensation policy applicable to the Chairman and Chief
Executive Officer is reviewed each year by the Board of Directors
on the proposal of the Compensation Committee. The
compensation policy for the Chairman and Chief Executive Officer
for fiscal year 2016 was approved by the Board of Directors on
December 16, 2015, on the proposal of the Compensation
Committee.
Mr. Pouyanné’s compensation consists of a fixed portion, an annual
variable portion calculated on the basis of predefined criteria and a
long-term component in the form of performance shares.
Performance shares are granted under plans that are not specific to
the Chairman and Chief Executive Officer and are structured over a
five-year period with a three-year vesting period followed by a
mandatory two-year holding period. The definitive grant of shares is
subject to a presence condition and performance conditions
assessed at the end of the three-year vesting period.
Mr. Pouyanné does not receive any multi-year or deferred variable
compensation or any extraordinary compensation. He does not
receive directors’ fees as director of TOTAL S.A.
In addition, the Company is committed to paying Mr. Pouyanné a
retirement benefit and a severance benefit in the event of forced
departure related to a change of control or strategy. The Chairman
and Chief Executive Officer is also entitled to the pension plans in
place within the Group. In line with the principles of the AFEP-
MEDEF Code, the benefit accruing from participation in the pension
plans has been taken into consideration when determining the
compensation policy applicable to the Chairman and Chief
Executive Officer for fiscal year 2016. These commitments, which
are subject to performance conditions, are described in more detail
in point 2.2 below.
In addition, Mr. Pouyanné has the use of a company car and
benefits from the life insurance plans and the health care plan that
are described in more detail in point 2.2 below.
The structure of the compensation due or granted to Mr. Pouyanné
for fiscal year 2016 is as follows:
2,561,100
2,339,400
2.1.1. Fixed and variable annual compensation
due in 2016
In accordance with the compensation policy defined by the Board
of Directors on December 16, 2015, at its meeting on February 8,
2017 and on a proposal from the Compensation Committee, the
Board of Directors determined the compensation due to Mr.
Pouyanné for his duties as Chairman and Chief Executive Officer for
fiscal year 2016. This compensation consists of a base salary (fixed
portion) of €1,400,000 (higher than in fiscal year 2015 following the
Board of Directors’ decision to appoint Patrick Pouyanné as
Chairman and Chief Executive Officer of TOTAL S.A.) and a variable
portion (paid in 2017) of €2,339,400 corresponding to 167.10% of
his fixed compensation.
To determine the variable portion of the compensation due to the
Chairman and Chief Executive Officer for fiscal year 2016, at its
meeting on February 8, 2017, the Board of Directors reviewed the
level of achievement of the economic parameters based on the
targets set by the Board of Directors at its meeting on
December 16, 2015. The Board of Directors also assessed the
Chairman and Chief Executive Officer’s personal contribution on the
basis of the four objective and operational target criteria set during
its meeting on December 16, 2015.
Annual variable compensation due
for fiscal year 2016 (expressed as a percentage
of the base salary)
Maximum Percentage
percentage allocated
Economic parameters 140% 127.10%
– Safety - comparative 20%
– Return on equity (ROE) 30%
– Net debt-to-equity ratio 40%
– Adjusted net income (ANI) -
comparative 50%
20%
17.10%
40%
50%
Personal contribution: 40% 40%
– successful managerial transition 10%
– achievement of production
and reserve targets 10%
– successful strategic negotiations
with producing countries 10%
10%
– Corporate Social Responsibility
(CSR) performance 10% 10%
10%
10%
1,400,000
Fixed portion
Annual
variable
portion
Performance
shares
(accounting
valuation)
In-kind
benefits
(€)
Total 180% 167.10%
The Board of Directors assessed achievement of the targets set for
the economic parameters as follows:
– The safety criterion was assessed based on the achievement of
an annual TRIR (Total Recordable Injury Rate) target and the
number of accidental deaths per million hours worked, FIR
(Fatality Incident Rate), compared with those of four large oil
58,945
118
TOTAL. Registration Document 2016
Compensation of the administration and management bodies 6
Chairman and Chief Executive Officer’s compensation
companies (1). The Board of Directors noted that the target of a
TRIR lower than 1.15 was fully achieved in 2016. It also noted
that the number of accidental deaths per million hours worked,
FIR (Fatality Incident Rate), was the best among the panel of
majors. It therefore set the portion for this criterion at 20% of the
fixed compensation (of a maximum of 20%).
Mr. Pouyanné had the use in 2016 of a company car and benefited
from the life insurance plans and the health care plan described in
detail in point 2.2 below. These benefits were booked in the amount
of €58,945 in the Consolidated Financial Statements at
December 31, 2016.
– For the return on equity (ROE) criterion (2), the Board of Directors
2.1.2. Grant of performance shares in 2016
noted that, in 2016, the ROE was 8.7%, which led the portion for
this criterion to be set at 17.10% of the fixed compensation for
fiscal year 2016 (of a maximum of 30%).
– For the net debt-to-equity ratio criterion (3), the Board of Directors
noted that, in 2016, the Group’s net debt-to-equity ratio is less
than 30%, which led the portion for this criterion to be set at
40% of the fixed compensation for fiscal year 2016 (of a
maximum of 40%).
– The criterion related to the change in the Group’s adjusted net
income (ANI) was assessed by comparison with those of the four
large oil companies (1). The Board of Directors noted that the
increase in the Group’s three-year average ANI was better than
that of the panel (4), which led the portion for this criterion to be
set at 50% of the fixed compensation for fiscal year 2016 (of a
maximum of 50%).
Regarding the Chairman and Chief Executive Officer’s personal
contribution, the Board of Directors determined that the targets set
were largely achieved, particularly those related to the increase in oil
and gas production (+4.5% in 2016 compared to 2015), the
successful strategic negotiations with producing countries
(acquisition of an interest in the giant Al-Shaheen oil field in Qatar
for a period of 25 years, signing of a heads of agreement with the
Iranian state-owned company to develop phase 11 of South Pars,
strategic alliance with Petrobras in Brazil) and the successful
managerial transition (implementation of the project “One Total, one
ambition”, acquisition of Saft Groupe which permitted the
integration of electricity storage solutions in the Group’s portfolio,
acquisition of the gas distributor Lampiris, sale of Atotech, renewal
of the Executive Committee as of September 1, 2016). CSR
performance was also considered fully satisfactory based on the
decrease of the Group’s CO2 emissions (-7% in 2016 compared to
2015) and on the improvement of the Group’s position in the
rankings published by non-financial rating agencies.
The Chairman and Chief Executive Officer’s personal contribution
was therefore set at 40% of the fixed compensation (of a maximum
of 40%).
Mr. Pouyanné did not benefit from any other components of
compensation due or granted for fiscal year 2016. No multi-year or
deferred variable compensation or extraordinary compensation was
paid to him for fiscal year 2016.
At its meeting on July 27, 2016, the Board of Directors, on the
proposal of the Compensation Committee and pursuant to the
authorization of the Company’s Combined Shareholders’ Meeting
of May 24, 2016 (twenty-fourth resolution), decided to grant Mr.
Pouyanné 60,000 existing shares of the Company (corresponding
to 0.002% of the share capital) subject to the conditions set out
below. These shares were granted under a broader share plan
approved by the Board of Directors on July 27, 2016, relating to
0.8% of the share capital in favor of more than 10,000 non
executive beneficiaries.
The definitive grant of all the shares is subject to the beneficiary’s
continued presence within the Group during the vesting period and
to performance conditions as described below.
The definitive number of shares granted will be based on the
comparative TSR (Total Shareholder Return) and the annual
variation in net cash flow per share for fiscal years 2016 to 2018,
applied as follows:
– the Company will be ranked each year against its peers (1) during
the three vesting years (2016, 2017 and 2018) based on the TSR
criterion using the average closing market price expressed in
dollars over one quarter at the beginning and end of each three-
year period (Q4 year N vs. / Q4 year N-3). The dividend will be
considered reinvested based on the last market price on the ex-
dividend date.
TSR N = (average price Q4 N – average price Q4 N-3 +
reinvested dividends) / (average price Q4 N-3);
– the Company will be ranked each year against its peers (1) using
the annual variation in net cash flow per share expressed in
dollars criterion. Net cash flow is defined as cash flow from
operating activities minus cash flow from investing activities
including acquisitions and disposals. This data expressed in
dollars will come from the consolidated statements of cash flow
taken from the annual Consolidated Financial Statements of the
Company and its peers for the fiscal years in question (based on
the accounting standards applicable at the time of the closing of
the accounts for such fiscal years).
The number of shares used to calculate net cash flow per share
will be the weighted-average number of diluted shares for the
Company and each of its peers.
(1) ExxonMobil, Royal Dutch Shell, BP and Chevron.
(2) The Group measures the ROE as the ratio of adjusted consolidated net income to average adjusted shareholders’ equity between the beginning and the end of the period. Adjusted
shareholders’ equity for fiscal year 2016 is calculated after payment of a dividend of €2.45 per share, subject to approval by the Annual Shareholders’ Meeting on May 26, 2017. In 2015, the
ROE was 11.5%.
(3) For its internal management and external communication purposes, the Group calculates a net debt-to-equity ratio by dividing its net financial debt by its adjusted shareholders’ equity. The
2016 adjusted shareholders’ equity is calculated after payment of a dividend of €2.45 per share, subject to approval by the Annual Shareholders’ Meeting on May 26, 2017. In 2016, the net
debt-to-equity ratio was 27.1%. In 2015, it was 28.3%.
(4) Adjusted results are defined as income at replacement cost, excluding non-recurring items and excluding the impact of fair value changes. The annual ANI of each peer used for the
calculation is determined by taking the average of the ANIs published by a panel of six financial analysts: UBS, Crédit Suisse, Barclays, Bank of America Merrill Lynch, JP Morgan and
Deutsche Bank. If any of these analysts is unable to publish the results of one or more peers for a given year, it will be replaced, for the year and for the peer(s) in question, in the order listed,
by an analyst included in the following additional list: Jefferies, HSBC, Société Générale, Goldman Sachs and Citi. The ANIs used will be set according to these analysts’ last publications two
business days after the publication of the press release announcing the “fourth quarter and annual results” of the last peer.
Registration Document 2016. TOTAL
119
6 Compensation of the administration and management bodies
Chairman and Chief Executive Officer’s compensation
Based on the ranking, a grant rate will be determined for each year:
– 1st: 180% of the grant;
– 2nd: 130% of the grant;
– 3rd: 80% of the grant; and
– 4th and 5th: 0%.
For each of the criteria, the average of the three grant rates
obtained (for each of the three fiscal years for which the
performance conditions are assessed) will be rounded to the
nearest 0.1 whole percent (0.05% being rounded to 0.1%) and
capped at 100%. Each criterion will have a weight of 50% in the
definitive grant rate. The definitive grant rate will be rounded to the
nearest 0.1 whole percent (0.05% being rounded to 0.1%).
The number of shares definitively granted, after confirmation of the
performance conditions, will be rounded to the nearest whole
number of shares in case of a fractional lot.
In accordance with the provisions of the French Commercial Code,
Mr. Pouyanné will, until the end of his term, be required to retain in
the form of registered shares 50% of the gains on the acquired
shares net of tax and national insurance contributions related to the
shares granted. When Mr. Pouyanné holds a volume of shares (1)
representing five times the fixed portion of his gross annual
compensation, this percentage will be equal to 10%. If this
condition is no longer met, the above-mentioned 50% holding
requirement will again apply.
In addition, the Board of Directors has noted that, pursuant to the
Board’s Rules of Procedure applicable to all directors, the Chairman
and Chief Executive Officer is not allowed to hedge the shares of
the Company or any related financial instruments and has taken
note of Mr. Pouyanné’s commitment to abstain from such hedging
operations with regard to the performance shares granted.
The grant of performance shares to Mr. Pouyanné is subject to the
same requirements applicable to the other beneficiaries of the
performance share plan and were approved by the Board at its
meeting on July 27, 2016. In particular, these provisions stipulate
that the shares definitively granted at the end of the three-year
vesting period will, after confirmation of fulfillment of the presence
and performance conditions, be automatically recorded as pure
registered shares on the start date of the two-year holding period
and will remain non-transferable and unavailable until the end of the
holding period.
2.2. Commitments made by the Company to the Chairman and Chief Executive Officer
(Article L. 225-102-1, paragraph 3, of the French Commercial Code)
The Chairman and Chief Executive Officer also participates in a
supplementary defined benefit pension plan, covered by Article
L. 137-11 of the French Social Security Code, set up and financed
by the Company and approved by the Board of Directors on
March 13, 2001, for which management is outsourced to two
insurance companies effective January 1, 2012. This plan applies to
all TOTAL S.A. employees whose compensation exceeds eight
times the annual ceiling for calculating French Social Security
contributions (PASS), set at €38,616 for 2016 (i.e., €308,928), and
above which there is no conventional pension plan. To be eligible
for this supplementary pension plan, participants must have served
for at least five years, be at least 60 years old and exercised his or
her rights to retirement from the French Social Security. The
benefits under this plan are subject to a presence condition under
which the beneficiary must still be employed at the time of
retirement. However, the presence condition does not apply if a
beneficiary aged 55 or older leaves the Company at the Company’s
initiative or in case of disability.
The length of service acquired by Mr. Pouyanné as a result of his
previous salaried duties held at the Group since January 1, 1997
has been maintained for the benefit of this plan.
The compensation taken into account to calculate the
supplementary pension is the average gross annual compensation
(fixed and variable portion) over the last three years. The amount
paid under this plan is equal to 1.8% of the portion of the
compensation falling between 8 and 40 times the PASS and 1%
for the portion of the compensation falling between 40 and 60
times the PASS, multiplied by the number of years of service up to
a maximum of 20 years.
The commitments made to the Chairman and Chief Executive
Officer regarding pension plans, retirement benefit and severance
benefit to be paid in the event of forced departure related to a
change of control or strategy, as well as the life insurance and
health care benefits set out below, were approved by the Board
of Directors on December 16, 2015. They were approved by the
Annual Shareholders’ Meeting of May 24, 2016, in accordance with
the provisions of Article L. 225-42-1 of the French Commercial Code.
It should be noted that Mr. Pouyanné already benefited from all
these provisions when he was an employee of the Company,
except for the commitment to pay severance benefits in the event
of forced departure related to a change of control or strategy. It
should also be noted that Mr. Pouyanné, who joined the Group on
January 1, 1997, ended the employment contract that he
previously had with TOTAL S.A. through his resignation at the time
of his appointment as Chief Executive Officer on October 22, 2014.
Pension plans
Pursuant to applicable legislation, the Chairman and Chief
Executive Officer is eligible for the basic French Social Security
pension and for pension benefits under the ARRCO and AGIRC
supplementary pension plans.
He also participates in the internal defined contribution pension
plan applicable to all TOTAL S.A. employees, known as RECOSUP
(Régime collectif et obligatoire de retraite supplémentaire à
cotisations définies), covered by Article L. 242-1 of the French
Social Security Code. The Company’s commitment is limited to its
share of the contribution paid to the insurance company that
manages the plan. For fiscal year 2016, this pension plan
represented a booked expense to TOTAL S.A. in favor of the
Chairman and Chief Executive Officer of €2,317.
(1) In the form of shares or units of mutual funds invested in shares of the Company.
120
TOTAL. Registration Document 2016
Compensation of the administration and management bodies 6
Chairman and Chief Executive Officer’s compensation
The sum of the annual supplementary pension plan benefits and
other pension plan benefits (other than those set up individually and
on a voluntary basis) may not exceed 45% of the average gross
compensation (fixed and variable portion) over the last three years.
In the event that this percentage is exceeded, the supplementary
pension is reduced accordingly. The amount of the supplementary
pension determined in this way is indexed to the ARRCO pension
point.
The supplementary pension includes a clause whereby 60% of the
amount will be paid to beneficiaries in the event of death after
retirement.
To ensure that the acquisition of additional pension rights under this
defined-benefit pension plan is subject to performance conditions
to be defined pursuant to the provisions of Article L. 225-42-1 of
the French Commercial Code amended by law No. 2015-990 of
August 6, 2015, on December 15, 2016, the Board of Directors
noted the existence of the Chief Executive Officer’s pension rights
under the above-mentioned pension plan, immediately before his
appointment as Chairman, for the period from January 1, 1997 to
December 18, 2015.
The conditional rights granted for the period from January 1, 1997
to December 18, 2015 (inclusive), acquired without performance
conditions, correspond to a replacement rate equal to 34.14% for
the portion of the base compensation falling between 8 and 40
times the PASS and a replacement rate of 18.96% for the portion of
the base compensation falling between 40 and 60 times the PASS.
The conditional rights granted for the period from December 19,
2015 to December 31, 2016 are subject to the performance
condition described below and correspond to a maximum
replacement rate equal to 1.86% for the portion of the base
compensation falling between 8 and 40 times the PASS and a
replacement rate equal to 1.04% for the portion of the base
compensation falling between 40 and 60 times the PASS.
Pursuant to the provisions of Article L. 225-42-1 of the French
Commercial Code, the Board of Directors decided to make the
acquisition of these conditional rights for the period from
December 19, 2015 to December 31, 2016, subject to a condition
related to the beneficiary’s performance, which is considered
fulfilled if the variable portion of the Chairman and Chief Executive
Officer’s compensation paid in 2017 for fiscal year 2016 reaches
100% of the base salary due for fiscal year 2016. In the event that
the variable portion does not reach 100% of the base salary, the
rights granted will be calculated on a prorata basis.
On February 8, 2017, the Board of Directors noted that the
specified performance condition was fully met and therefore
confirmed the acquisition by Mr. Pouyanné of additional pension
rights mentioned above for the period from December 19, 2015 to
December 31, 2016.
The Board also noted that Mr. Pouyanné would no longer be able
to acquire additional pension rights under this plan given the rules
for determining pension rights set out in the plan and the 20 years
of service of Mr. Pouyanné as of December 31, 2016.
The commitments made by TOTAL S.A. to its Chairman and Chief
Executive Officer regarding the supplementary defined benefit and
similar pension plans therefore represent, at December 31, 2016, a
gross annual pension estimated at €599,320 based on the length
of service acquired as of December 31, 2016 (i.e., 20 years of
service), corresponding to 16.03% of Mr. Pouyanné’s gross annual
compensation consisting of the annual fixed portion for 2016
(i.e., €1,400,000) and the variable portion paid in 2017 for fiscal
year 2016 (i.e., €2,339,400).
Nearly the full amount of TOTAL S.A.’s commitments under these
supplementary and similar retirement plans (including the retirement
benefit) is outsourced to insurance companies and the non-
outsourced balance is evaluated annually and adjusted through a
provision in the accounts. The amount of these commitments as of
December 31, 2016 is €16.1 million for the Chairman and Chief
Executive Officer (€16.4 million for the Chairman and Chief
Executive Officer and the executive and non-executive directors
covered by these plans). These amounts represent the gross value
of TOTAL S.A.’s commitments to these beneficiaries based on the
estimated gross annual pensions as of December 31, 2016 and the
statistical life expectancy of the beneficiaries.
The total amount of all the pension plans in which Mr. Pouyanné
participates represents, at December 31, 2016, a gross annual
pension estimated at €690,600 based on the length of service
acquired as of December 31, 2016 (i.e., 20 years of service),
corresponding to 18.47% of Mr. Pouyanné’s gross annual
compensation defined above (annual fixed portion for 2016 and
variable portion paid in 2017 for fiscal year 2016).
Retirement benefit
The Chairman and Chief Executive Officer is entitled to a retirement
benefit equal to those available to eligible members of the Group
under the French National Collective Bargaining Agreement for the
Petroleum Industry. This benefit is equal to 25% of the fixed and
variable annual compensation received during the 12 months
preceding retirement.
Pursuant to the provisions of Article L. 225-42-1 of the French
Commercial Code, receipt of this retirement benefit is contingent
upon a performance-related condition applicable to the beneficiary,
which is deemed to be fulfilled if at least two of the following criteria
are met:
– the average ROE (return on equity) for the three years preceding
the year in which the Chairman and Chief Executive Officer retires
is at least 10%;
– the average net debt-to-equity ratio for the three years preceding
the year in which the Chairman and Chief Executive Officer retires
is less than or equal to 30%; and
– growth in TOTAL’s oil and gas production is greater than or equal
to the average growth rate of four oil companies (ExxonMobil,
Royal Dutch Shell, BP and Chevron) during the three years
preceding the year in which the Chairman and Chief Executive
Officer retires.
The retirement benefit cannot be combined with the severance
benefit described below.
Severance benefit
The Chairman and Chief Executive Officer is entitled to a benefit
equal to two years of his gross compensation in the event of a
forced departure related to a change of control or strategy. The
Registration Document 2016. TOTAL
121
6 Compensation of the administration and management bodies
Chairman and Chief Executive Officer’s compensation
calculation is based on the gross compensation (fixed and variable)
of the 12 months preceding the date of termination or non-renewal
of his term of office.
The severance benefit will only be paid in the event of a forced
departure related to a change of control or strategy. It will not be
due in 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.
Pursuant to the provisions of Article L. 225-42-1 of the French
Commercial Code, receipt of this severance benefit is contingent
upon a performance-related condition applicable to the beneficiary,
which is deemed to be fulfilled if at least two of the following criteria
are met:
– the average ROE (return on equity) for the three years preceding
the year in which the Chairman and Chief Executive Officer retires
is at least 10%;
– the average net debt-to-equity ratio for the three years preceding
the year in which the Chairman and Chief Executive Officer retires
is less than or equal to 30%; and
– growth in TOTAL’s oil and gas production is greater than or equal
to the average growth rate of four oil companies (ExxonMobil,
Royal Dutch Shell, BP and Chevron) during the three years
preceding the year in which the Chairman and Chief Executive
Officer retires.
Life insurance and health care plans
The Chairman and Chief Executive Officer is covered by the
following life insurance plans provided by various life insurance
companies:
– an “incapacity, disability, life insurance” plan applicable to all
employees, partly paid for by the Company, that provides for two
options in case of death of a married employee: either the
payment of a lump sum equal to five times the annual
compensation up to 16 times the PASS, corresponding to a
maximum of €3,138,240 in 2017, plus an additional amount if
there is a dependent child or children, or the payment of a lump
sum equal to three times the annual compensation up to 16
times the PASS, plus a survivor’s pension and education
allowance;
– a second “disability and life insurance” plan, fully paid by the
Company, applicable to executive directors and senior executives
whose annual gross compensation is more than 16 times the
PASS. This contract, signed on October 17, 2002, amended on
January 28 and December 16, 2015, guarantees the beneficiary
the payment of a lump sum, in case of death, equal to two years
of compensation (defined as the gross annual fixed reference
compensation (base France), which corresponds to 12 times
the monthly gross fixed compensation paid during the month
prior to death or sick leave, to which is added the highest amount
in absolute value of the variable portion received during one of
the five previous years of activity), which is increased to three years
in case of accidental death and, in case of accidental permanent
disability, a lump sum proportional to the degree of disability.
The death benefit is increased by 15% for each dependent child.
Payments due under this contract are made after the deduction of
any amount paid under the above-mentioned plan applicable to all
employees.
The Chairman and Chief Executive Officer also benefits from the
health care plan applicable to all employees.
122
TOTAL. Registration Document 2016
Compensation of the administration and management bodies 6
Chairman and Chief Executive Officer’s compensation
2.3. Summary tables
(AFEP-MEDEF Code / AMF position-recommendation No. 2009-16)
Summary of the compensation of each executive director (AMF Table No. 2)
For fiscal For fiscal
year 2015 year 2016
Amount due Amount paid Amount due Amount paid
for the during the for the during the
(€) fiscal year fiscal year (a) fiscal year fiscal year (a)
Patrick Pouyanné,
Chairman and Chief Executive Officer
Fixed compensation 1,200,000 1,200,000 1,400,000 1,400,000
Annual variable compensation (b) 1,814,400 295,469 2,339,400 1,814,400
Multi-year variable compensation - - - -
Extraordinary compensation - - - -
Directors’ fees - - - -
In-kind benefits (c) 36,390 36,390 58,945 58,945
Total 3,050,790 1,531,859 3,798,345 3,273,345
(a) Variable portion paid for the prior fiscal year.
(b) For details regarding the parameters used to calculate the variable portion due for fiscal year 2016, refer to point 2.1 of this chapter.
(c) Mr. Pouyanné has the use of a company car and is covered by life insurance and health care plans paid by the Company (refer to point 2.2 of this chapter).
Summary of the compensation, options and shares granted to each executive director
(AMF Table No. 1)
For fiscal For fiscal
(in €, except the number of shares) 2015 2016
Patrick Pouyanné,
Chairman and Chief Executive Officer
Compensation due in respect of the fiscal year (detailed in AMF Table No. 2 above) 3,050,790 3,798,345
Valuation of multi-year variable compensation paid during the fiscal year - -
Accounting valuation of the options granted during the fiscal year - -
Accounting valuation of the performance shares granted during the fiscal year (a) 1,722,960 2,561,100
Number of performance shares granted during the fiscal year 48,000 60,000
Total 4,773,750 6,359,445
Note: The valuations of the options and performance shares correspond to a valuation performed in accordance with IFRS 2 (see Note 9 to the Consolidated Financial Statements) and not
to any compensation actually received during the fiscal year. Entitlement to performance shares is subject to the fulfillment of performance conditions assessed over a three-year period.
(a) For detailed information, refer to AMF Table No. 6 below. The valuation of the shares was calculated on the grant date (see Note 9 to the Consolidated Financial Statements).
Stock options granted in 2016 to each executive director by the issuer and by any Group company
(AMF Table No. 4)
Executive directors
Plan No.
and date
Type
of options
(purchase or
subscription)
Valuation
of options
Number
of options
(€) (a) granted during
the fiscal year
Strike
price
Exercise
period
Patrick Pouyanné
Chairman and Chief Executive Officer
-
-
-
-
-
-
(a) According to the method used for the Consolidated Financial Statements.
Registration Document 2016. TOTAL
123
6 Compensation of the administration and management bodies
Chairman and Chief Executive Officer’s compensation
Free performance shares granted in 2016 to each executive director by the issuer or by any Group company
(Extract from AMF Table No. 6)
Plan No. Number Valuation Acquisition Date of Performance
and date of shares of the date transferability
granted shares (€) (a)
during the
fiscal year
conditions
Patrick Pouyanné
07 / 28 / 2019 07 / 29 / 2021
Chairman and Chief 07 / 27 / 2016
Executive Officer
2,561,100
2016 Plan
60,000
The performance conditions
are based:
– for 50% of the performance shares
granted, the Company will be ranked
each year against its peers (b) during
the three vesting years (2016, 2017
and 2018) based on the TSR criterion
using the average closing market price
expressed in dollars over one quarter
at the beginning and end of each
three-year period (Q4 year N vs. / Q4
year N-3);
– for 50% of the performance shares
granted, the Company will be ranked
each year against its peers (b) using the
annual variation in net cash flow per
share expressed in dollars criterion.
For further details, refer to point 2.1.2
of this chapter.
(a) The valuation of the shares was calculated on the grant date according to the method used for the Consolidated Financial Statements.
(b) ExxonMobil, Royal Dutch Shell, BP and Chevron.
AMF Table No. 11
Executive directors Employment Supplementary Payments or benefits Benefits
contract pension plan due or likely to be due related to a
upon termination non-compete
or change in duties agreement
Patrick Pouyanné NO YES YES (a) NO
Chairman and Chief Executive Officer Internal supplementary Severance benefit
Start of term of office: December 19, 2015 defined benefit pension and retirement benefit
End of current term of office: Shareholders’ Meeting plan (a) and defined
held in 2018 to approve the financial statements contribution pension plan
for fiscal year 2017 known as RECOSUP
(a) Payment subject to a performance condition under the terms approved by the Board of Directors on December 16, 2015. Details of these commitments are provided in point 2.2 above.
The retirement benefit cannot be combined with the severance benefit.
124
TOTAL. Registration Document 2016
Compensation of the administration and management bodies 6
Executive officers’ compensation. Stock option and free share grants
3. Executive officers’ compensation
In 2016, the aggregate amount paid directly or indirectly by the Group’s companies as compensation to the Group’s executive officers (1) in
office as of December 31, 2016 (12 people) was €11.98 million (compared to €11.34 million in 2015), including €8.56 million paid to the
members of the Executive Committee (seven people). The variable portion accounted for 44.78% of this aggregate amount of €11.98 million.
The following individuals were executive officers of the Group as of December 31, 2016 (12 people, number unchanged from December 31, 2015):
Patrick Pouyanné (2)
Arnaud Breuillac (3)
Patrick de La Chevardière (3)
Momar Nguer (3)
Bernard Pinatel (3)
Philippe Sauquet (3)
Namita Shah (3)
Bernadette Spinoy
Ladislas Paszkiewicz
Jacques-Emmanuel Saulnier
Maarten Scholten
Jean-Pierre Sbraire
4. Stock option and free share grants
4.1. General policy
In addition to its employee shareholding development policy, TOTAL
S.A. has implemented a policy to involve employees and senior
executives in the Group’s future performance which entails granting
free performance shares each year. TOTAL S.A. may also grant
stock options, although no plan has been put in place since
September 14, 2011. These shares are granted under selective
plans based on a review of individual performance at the time of
each grant.
The stock option and free share plans offered by TOTAL S.A.
concern only TOTAL shares and no free shares of the Group’s listed
subsidiaries or options on them are granted by TOTAL S.A.
All grants are approved by the Board of Directors, on the proposal
of the Compensation Committee. For each plan, the Compensation
Committee recommends a list of beneficiaries, the conditions and
the number of options or shares granted to each beneficiary. The
Board of Directors then gives final approval for this list and the grant
conditions.
• Grant of performance shares
Grants of free performance shares under selective plans become
definitive only at the end of a three-year vesting period, subject to
fulfillment of the applicable presence and performance conditions.
At the end of the vesting period, and provided that the conditions
are met, the TOTAL shares are definitively granted to the beneficiaries,
who must then hold them for at least two years (holding period).
All shares granted are subject to the presence condition.
For beneficiaries employed by a non-French company on the grant
date, the vesting period for free shares may be increased to four
years, in which case there is no mandatory holding period. Since
2011, all shares granted to senior executives have been subject to
performance conditions.
• Stock options
Stock options have a term of eight years, with a strike price set at
the average of the closing TOTAL share prices on Euronext Paris
during the 20 trading days preceding the grant date, without any
discount. Exercise of the options is subject to a presence condition
and performance conditions, related to the Group’s return on equity
(ROE), which vary depending on the plan and category of beneficiary.
All options granted in 2011 have been subject to performance
conditions. For options granted pursuant to the authorization given
by the Extraordinary Shareholders’ Meeting of May 24, 2016
(twenty-fifth resolution), the performance conditions will be
assessed over a minimum period of three consecutive fiscal years.
For earlier option plans, and subject to the applicable presence and
performance conditions being met, options may be exercised only
at the end of an initial two-year period and the shares resulting from
the exercise may only be disposed of at the end of a second two-
year period.
Moreover, for the 2007 to 2011 option plans, the shares resulting
from the exercise of options by beneficiaries employed by a non-
French company on the grant date may be disposed of or converted
to bearer form at the end of the first two-year vesting period.
(1) The Group’s executive officers (non-executive directors with the exception of the Chairman and Chief Executive Officer) include the members of the Executive Committee, the four Senior Vice
Presidents of the Group central functions who are members of the Group Performance Management Committee (HSE, Strategy & Climate, Communications, Legal) and the Treasurer.
(2) Chairman and Chief Executive Officer and Chairman of the Executive Committee.
(3) Member of the Executive Committee.
Registration Document 2016. TOTAL
125
6 Compensation of the administration and management bodies
Stock option and free share grants
4.2. Follow-up of grants to the executive directors
4.2.1. Stock options
No stock options have been granted since September 14, 2011.
Until that date, the Company’s executive directors in office at the
time of the decision were granted stock options as part of broader
grant plans approved by the Board of Directors for certain Group
employees and senior executives. The options granted to the
executive directors were subject to the same requirements
applicable to the other beneficiaries of the grant plans.
For the options granted between 2007 and 2011, the Board of
Directors made the exercise of the options granted to the executive
directors in office contingent upon a presence condition and
performance conditions based on the Group’s ROE and ROACE.
The grant rate of the performance-related options under the 2009,
2010 and 2011 plans was 100%. It had been 60% for the 2008 plan.
All the options granted to Mr. Pouyanné outstanding at
December 31, 2016 represented 0.0019% of the Company’s share
capital (1) on that date.
Stock options exercised in fiscal year 2016 by each executive director (AMF Table No. 5)
Plan No. Number of Strike
and date options exercised price
during the fiscal year
Patrick Pouyanné 2010 Plan 16,000 38.20
Chairman and Chief Executive Officer since December 19, 2015 09 / 14 / 2010
4.2.2. Grant of performance shares
Mr. Pouyanné is granted performance shares as part of the broader
grant plans approved by the Board of Directors for certain Group
employees. The performance shares granted to him are subject to
the same requirements applicable to the other beneficiaries of the
grant plans.
(1) Based on a capital of 2,430,365,862 shares.
126
TOTAL. Registration Document 2016
Compensation of the administration and management bodies 6
Stock option and free share grants
Summary tables
Free shares granted to each director (b) in fiscal year 2016 by the issuer and by any Group company
(AMF Table No. 6)
Plan No. Number Valuation Acquisition Date of Performance
and date of shares of the date transferability conditions
granted shares (€) (a)
during the
fiscal year
Patrick Pouyanné 2016 Plan 60,000 2,561,100 07 / 28 / 2019 07 / 29 / 2021
Chairman and Chief 07 / 27 / 2016
Executive Officer
The performance conditions are the
following:
– for 50% of the performance shares
Marc Blanc 2016 Plan - - - -
Director representing 07 / 27 / 2016
employees since
November 4, 2014
2016 Plan n/a - - -
Charles Keller
Director representing 07 / 27 / 2016
employee shareholders
until May 24, 2016
Renata Perycz 2016 Plan 160 6,829.6 07 / 28 / 2019 07 / 29 / 2021
Director representing 07 / 27 / 2016
employee shareholders
since May 24, 2016
granted, the Company will be ranked
each year against its peers (c) during
the three vesting years (2016, 2017
and 2018) based on the TSR criterion
using the average closing market
price expressed in dollars over one
quarter at the beginning and end of
each three-year period (Q4 year N
vs. / Q4 year N-3);
– for 50% of the performance shares
granted, the Company will be ranked
each year against its peers (c) using the
annual variation in net cash flow per
share expressed in dollars criterion.
For further details, refer to point 2.1.2
of this chapter.
Total 60,160 2,567,929.6
(a) The valuation of the shares was calculated on the grant date according to the method used for the Consolidated Financial Statements.
(b) List of executive and non-executive directors who had this status during fiscal year 2016.
(c) ExxonMobil, Royal Dutch Shell, BP and Chevron.
Free shares that have become transferable for each director (a) (AMF Table No. 7)
Plan No. Number of shares that Vesting
and date become transferable conditions
during the fiscal year
Patrick Pouyanné 2013 Plan 14,175
Chairman and Chief Executive Officer 07 / 25 / 2013
Marc Blanc 2013 Plan -
Director representing employees 07 / 25 / 2013
since November 4, 2014
Charles Keller 2013 Plan n/a
Director representing employee shareholders
07 / 25 / 2013
until May 24, 2016
Renata Perycz 2013 Plan 119
Director representing employee shareholders
since May 24, 2016
07 / 25 / 2013
(a) List of executive and non-executive directors who had this status during fiscal year 2016.
Shares are subject to a performance
condition based on the Group’s average
ROE in fiscal years 2013, 2014 and
2015. For beneficiaries other than senior
executives, the performance condition
applies to shares in excess of the first
100. For the 2013 plan, pursuant to
performance condition, the acquisition
rate was 63%.
Registration Document 2016. TOTAL
127
6 Compensation of the administration and management bodies
Stock option and free share grants
4.3. Follow-up of TOTAL stock option plans as of December 31, 2016
4.3.1. Breakdown of TOTAL stock option grants by category of beneficiary
The breakdown of TOTAL stock options granted by category of beneficiary (executive officers, other senior executives and other employees)
for each of the plans in effect during fiscal year 2016 is as follows:
Number of
beneficiaries
Number of
notified
options
Percentage
Average
number of
options per
beneficiary
2008 Plan (b): Subscription options
Granted on October 9, 2008, pursuant to the decision Executive officers (a) 26 1,227,500 27.6% 47,212
of the Board of Directors of September 9, 2008 Other senior executives 298 1,988,420 44.7% 6,673
Strike 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 (b): Subscription options
Decision of the Board of Directors Executive officers (a) 26 1,201,500 27.4% 46,212
of September 15, 2009 Other senior executives 284 1,825,540 41.6% 6,428
Strike price: €39.90; discount: 0.0% Other employees 1,742 1,360,460 31.0% 781
Total 2,052 4,387,500 100% 2,138
2010 Plan (b): Subscription options
Decision of the Board of Directors Executive officers (a) 25 1,348,100 28.2% 53,924
of September 14, 2010 Other senior executives 282 2,047,600 42.8% 7,261
Strike price: €38.20; discount: 0.0% Other employees 1,790 1,392,720 29.0% 778
Total 2,097 4,788,420 100% 2,283
2011 Plan (b): Subscription options
Decision of the Board of Directors Executive officers (a) 29 846,600 55.7% 29,193
of September 14, 2011 Other senior executives 177 672,240 44.3% 3,798
Strike price: €33.00; discount: 0.0% Other employees - - - -
Total 206 1,518,840 100% 7,373
(a) Members of the Management Committee and the Treasurer, as defined on the date of the Board meeting granting the performance shares.
(b) The grant rate of performance-related options was 60% for the 2008 plan and 100% for the 2009, 2010 and 2011 plans.
For the 2008 and 2009 stock option plans, the Board of Directors decided that for each beneficiary of more than 25,000 options, one third
of the options granted in excess of that number would be subject to a performance condition.
For the 2010 stock option plan, a portion of the options granted to beneficiaries of more than 3,000 options are subject to a performance
condition. For the 2011 stock option plan, all the options are subject to a performance condition.
Since September 14, 2011, the Board of Directors has not granted any stock options.
128
TOTAL. Registration Document 2016
Compensation of the administration and management bodies 6
Stock option and free share grants
4.3.2. Breakdown of TOTAL stock option plans
History of stock option grants – Information on stock options (AMF Table No. 8)
2008 Plan 2009 Plan 2010 Plan 2011 Plan Total
Type of options Subscription Subscription Subscription Subscription
options options options options
Date of the Shareholders’ Meeting 05 / 11 / 2007 05 / 11 / 2007 05 / 21 / 2010 05 / 21 / 2010
Date of the Board meeting / grant date (a) 10 / 09 / 2008 09 / 15 / 2009 09 / 14 / 2010 09 / 14 / 2011
Total number of options granted
by the Board of Directors, including to: 4,449,810 4,387,620 4,788,420 1,518,840 15,144,690
Executive and non-executive directors (b) 30,000 30,000 40,000 30,400 130,400
– P. Pouyanné 30,000 30,000 40,000 30,400 130,400
– M. Blanc n / a n / a n / a n / a n / a
– C. Keller n / a n / a n / a n / a n / a
– R. Perycz n / a n / a n / a n / a n / a
Date as of which the options may be exercised: 10 / 10 / 2010 09 / 16 / 2011 09 / 15 / 2012 09 / 15 / 2013
Expiration date 10 / 09 / 2016 09 / 15 / 2017 09 / 14 / 2018 09 / 14 / 2019
Strike price (€) (c) 42.90 39.90 38.20 33.00
Cumulative number of options exercised as of December 31, 2016 2,537,634 2,576,047 1,816,986 888,112 7,818,779
Cumulative number of options canceled as of December 31, 2016 1,912,176 32,520 91,197 4,400 2,040,293
Number of options:
– Outstanding as of January 1, 2016 2,561,502 2,710,783 3,323,246 722,309 9,317,840
– Granted in 2016 - - - - -
– Canceled in 2016 (d) 1,794,304 - - - 1,794,304
– Exercised in 2016 767,198 931,730 443,009 95,981 2,237,918
Outstanding as of December 31, 2016 - 1,779,053 2,880,237 626,328 5,285,618
(a) The grant date is the date of the Board meeting granting the options, except for the grant of stock options on October 9, 2008 approved by the Board on September 9, 2008.
(b) List of executive and non-executive directors who had this status during fiscal year 2016. The directorships of Messrs. Keller and Desmarest ended on May 24, 2016.
(c) The strike price is the average closing price of TOTAL’s share on Euronext Paris during the 20 trading days preceding the option grant date, without any discount.
(d) The 1,794,304 options canceled in 2016 were unexercised options that expired on October 9, 2016 due to the expiration of the 2008 stock option plan.
If all the stock options outstanding at December 31, 2016 were exercised, the corresponding shares would represent 0.22% (1) of the
Company’s share capital on that date.
4.3.3. Stock options granted to the 10 employees (other than executive or non-executive directors)
receiving the largest number of options / Stock options exercised by the 10 employees (other than
executive or non-executive directors) exercising the largest number of options (AMF Table No. 9)
Total number Average 2008 Plan 2009 Plan 2010 Plan 2011 Plan
of options weighted 10 / 09 / 2008 (a) 09 / 15 / 2009 09 / 14 / 2010 09 / 14 / 2011
granted / strike price
exercised (€)
Options granted in fiscal year 2016
by TOTAL S.A. and its affiliates (b) to each of the
10 TOTAL S.A. employees (other than
executive or non-executive directors)
receiving the largest number of options
(aggregate – not individual information) - - - - - -
Options held on TOTAL S.A. and its
affiliates (b) and exercised in fiscal year
2016 by the 10 TOTAL S.A. employees
(other than executive or non-executive
directors at the date of the exercises)
who purchased or subscribed for
the largest number of shares
(aggregate – not individual information) 315,183 39.67 38,700 207,900 54,900 13,683
(a) The grant date is the date of the Board meeting granting the options, except for the grant of stock options on October 9, 2008 approved by the Board on September 9, 2008.
(b) Pursuant to the conditions of Article L. 225-180 of the French Commercial Code.
(1) Based on a capital of 2,430,365,862 shares.
Registration Document 2016. TOTAL
129
6 Compensation of the administration and management bodies
Stock option and free share grants
4.4. Follow-up of TOTAL free share grants as of December 31, 2016
4.4.1. Breakdown of TOTAL performance share grants by category of beneficiary
The following table gives a breakdown of TOTAL performance share grants by category of beneficiary (executive officers, other senior
executives and other employees):
Number of
beneficiaries
Number of
notified
shares
Percentage
Average
number of
shares per
beneficiary
2012 Plan (a)
Decision of the Board of Directors Executive officers (b) 33 416,100 9.7% 12,609
of July 26, 2012 Other senior executives 274 873,000 20.3% 3,186
Other employees 9,698 3,006,830 70.0% 310
Total 10,005 4,295,930 100% 429
2013 Plan
Decision of the Board of Directors Executive officers (b) 32 422,600 9.5% 13,206
of July 25, 2013 Other senior executives 277 934,500 20.9% 3,374
Other employees (c) 9,625 3,107,100 69.6% 323
Total 9,934 4,464,200 100% 449
2014 Plan
Decision of the Board of Directors Executive officers (b) 32 421,200 9.4% 13,163
of July 29, 2014 Other senior executives 281 975,300 21.7% 3,471
Other employees (c) 9,624 3,089,800 68.9% 321
Total 9,937 4,486,300 100% 451
2015 Plan
Decision of the Board of Directors Executive officers (d) 13 264,600 5.6% 20,354
of July 28, 2015 Other senior executives 290 1,132,750 23.8% 3,906
Other employees (c) 10,012 3,364,585 70.6% 336
Total 10,315 4,761,935 100% 462
2016 Plan
Decision of the Board of Directors Executive officers (d) 12 269,900 4.8% 22,492
of July 27, 2016 Other senior executives 279 1,322,300 23.4% 4,739
Other employees (c) 10,028 4,047,200 71.8% 404
Total 10,319 5,639,400 100% 547
(a) For the 2012 and 2013 plans, the share acquisition rate related to the ROE performance condition was 100% and 63%, respectively.
(b) Members of the Management Committee and the Treasurer, as defined on the date of the Board meeting granting the performance shares.
(c) Mr. Keller, a TOTAL S.A. employee and a TOTAL S.A. director representing employee shareholders from May 17, 2013 to May 24, 2016, was granted 400 performance shares under
the 2013 plan and 400 performance shares under the 2014 plan. He was not granted any shares under the 2015 or 2016 plans. Mr. Blanc, a TOTAL S.A. employee and a TOTAL S.A.
director representing employees since November 4, 2014, was not granted any shares under the 2014, 2015 and 2016 plans. Ms. Perycz, an employee of the Group and a TOTAL S.A.
director representing employees shareholders since May 24, 2016, was granted 160 shares under the 2016 plan.
(d) Group’s executive officers as defined on the date of the Board meeting granting the performance shares. On that date, the Group’s executive officers included the members of the
Executive Committee, the five Senior Vice Presidents of the Group central functions who are members of the Group Performance Management Committee (Corporate Communications,
Human Resources, Legal, Industrial Safety, Strategy and Business Intelligence) and the Treasurer.
The performance shares, which were previously bought back by
the Company on the market, are definitively granted to their
beneficiaries at the end of a three-year vesting period from the
grant date. For the shares granted under the 2012 plan, the vesting
period was two years.
The definitive grant of performance shares is subject to a presence
condition and performance conditions.
For the 2016 plan, the applicable performance conditions are the
following:
– for 50% of the performance shares granted, the Company will be
ranked each year against its peers (1) during the three vesting
years (2016, 2017 and 2018) based on the TSR criterion using
the average closing market price expressed in dollars over one
quarter at the beginning and end of each three-year period
(Q4 year N vs. / Q4 year N-3). The dividend will be considered
reinvested based on the last market price on the ex-dividend
date; and
– for 50% of the performance shares granted, the Company will be
ranked each year against its peers (1) using the annual variation in
net cash flow per share expressed in dollars criterion.
In addition, shares that have been definitively granted cannot be
disposed of before the end of a mandatory two-year holding period.
(1) ExxonMobil, Royal Dutch Shell, BP and Chevron.
130
TOTAL. Registration Document 2016
Compensation of the administration and management bodies 6
Stock option and free share grants
4.4.2. Breakdown of TOTAL performance share plans
History of TOTAL performance share grants –
Information on performance shares granted (AMF Table No. 10)
2012 Plan 2013 Plan 2014 Plan 2015 Plan 2016 Plan
Date of the Shareholders’ Meeting 05 / 13 / 2011 05 / 13 / 2011 05 / 16 / 2014 05 / 16 / 2014 05 / 24 / 2016
Date of Board meeting / grant date 07 / 26 / 2012 07 / 25 / 2013 07 / 29 / 2014 07 / 28 / 2015 07 / 27 / 2016
Closing price on grant date €36.120 €40.005 €52.220 €43.215 €42.685
Average purchase price per share paid by the Company €38.810 €40.560 €48.320 €45.150 €42.22
Total number of performance shares granted, including to: 4,295,930 4,464,200 4,486,300 4,761,935 5,639,400
Executive and non-executive directors (a) 22,500 22,900 25,400 48,000 60,160
– P. Pouyanné 22,500 (b) 22,500 (b) 25,000 (b) 48,000 60,000
– M. Blanc n / a n / a - - -
– C. Keller n / a 400 400 - n/a
– R. Perycz n / a n / a n / a n / a 160
Start of the vesting period 07 / 26 / 2012 07 / 25 / 2013 07 / 29 / 2014 07 / 28 / 2015 07 / 27 / 2016
Definitive grant date, subject to the conditions set
(end of the vesting period) 07 / 27 / 2014 07 / 26 / 2016 07 / 30 / 2017 07 / 29 / 2018 07 / 28 / 2019
Disposal possible from (end of the mandatory holding period) 07 / 27 / 2016 07 / 26 / 2018 07 / 30 / 2019 07 / 29 / 2020 07 / 29 / 2021
Number of free shares:
– Outstanding as of January 1, 2016 - 4,350,830 4,402,460 4,760,505 -
– Notified in 2016 - - - 5,639,400
– Canceled in 2016 - (1,303,732) (37,100) (29,170) (1,730)
– Definitively granted in 2016 (c) - (3,047,098) (860) (600) (110)
Outstanding as of December 31, 2016 - - 4,364,500 4,730,735 5,637,560
(a) List of executive and non-executive directors who had this status during fiscal year 2016.
(b) Shares granted in respect of his previous salaried duties.
(c) Definitive grants completed early following the death of the beneficiaries of shares for the respective plan.
If all the performance shares outstanding at December 31, 2016 were definitively granted, they would represent 0.61% (1) of the Company’s
share capital on that date.
4.4.3. Performance shares granted to the 10 employees (other than executive and non-executive directors)
receiving the largest number of performance shares
Number of Grant Definitive Date of
performance date grant date transferability
shares notified / (end of the (end of the
definitively vesting holding
granted period) period)
Performance share grants approved by the Board of Directors
at its meeting on July 27, 2016 to the 10 TOTAL S.A. employees
(other than executive and non-executive directors on the date of the decision)
receiving the largest number of performance shares (a) 221,000 07 / 27 / 2016 07 / 28 / 2019 07 / 29 / 2021
Performance shares definitively granted in fiscal year 2016
to the 10 TOTAL S.A. employees (other than executive
and non-executive directors on the date of the decision)
receiving the largest number of performance shares 85,932 07 / 25 / 2013 07 / 26 / 2016 07 / 26 / 2018
(a) These shares will be definitively granted to their beneficiaries at the end of a three-year vesting period, i.e., on July 28, 2019, subject to two performance conditions being met (refer to
point 4.4.1 of this chapter). The free shares that have been definitively granted cannot be disposed of before the end of a two-year holding period, i.e., from July 29, 2021.
(1) Based on a capital of 2,430,365,862 shares.
Registration Document 2016. TOTAL
131
6 Compensation of the administration and management bodies
Summary table of compensation components due or granted to the Chairman and Chief Executive Officer for fiscal year 2016,
as submitted to the Ordinary Shareholders’ Meeting for vote (AFEP-MEDEF Code, point 26)
5. Summary table of compensation components due or
granted to the Chairman and Chief Executive Officer
for fiscal year 2016, as submitted to the Ordinary
Shareholders’ Meeting for vote
(AFEP-MEDEF Code, point 26)
The table below summarizes the components of compensation due or granted to the Chairman and Chief Executive Officer for fiscal year
2016 by the Board of Directors, on the proposal of the Compensation Committee, and submitted to the Annual Shareholders’ Meeting of
May 26, 2017 for vote, in compliance with the recommendation of the AFEP-MEDEF Code (point 26).
Summary table of the components of compensation for Mr. Patrick Pouyanné,
Chairman and Chief Executive Officer
Components of Amount or accounting Presentation
compensation valuation submitted
for vote
Components of compensation due or granted for fiscal year 2016
Fixed compensation
€1,400,000
(amount paid in 2016)
Annual variable
compensation
€2,339,400
(amount paid in 2017)
The compensation due to Mr. Pouyanné for his duties as Chairman and Chief
Executive Officer for fiscal year 2016 is €1,400,000 (higher than in fiscal year 2015
following the Board of Directors’ decision to appoint Patrick Pouyanné as Chairman
and Chief Executive Officer of TOTAL S.A.).
The variable portion of Mr. Pouyanné’s compensation for his duties as Chairman and
Chief Executive Officer for fiscal year 2016 has been set at €2,339,400,
corresponding to 167.10% (of a maximum of 180%) of his fixed annual
compensation based on his performance.
At its meeting on February 8, 2017, the Board of Directors reviewed the level of
achievement of the economic parameters based on the targets set by the Board of
Directors at its meeting on December 16, 2015. The Board of Directors also
assessed the Chairman and Chief Executive Officer’s personal contribution on the
basis of the four objective and operational target criteria set during its meeting on
December 16, 2015.
The Board of Directors assessed achievement of the targets set for the economic
parameters as follows:
– the safety criterion was assessed based on the achievement of an annual TRIR
(Total Recordable Injury Rate) target and the number of accidental deaths
per million hours worked, FIR (Fatality Incident Rate), compared with those of four
large oil companies (1). The Board of Directors noted that the target of a TRIR lower
than 1.15 was fully achieved in 2016. It also noted that the number of accidental
deaths per million hours worked, FIR (Fatality Incident Rate), the best among the
panel of majors. It therefore set the portion for this criterion at 20% of the fixed
compensation (of a maximum of 20%);
– for the return on equity (ROE) criterion (2), the Board of Directors noted that, in
2016, the ROE was 8.7%, which led the portion for this criterion to be set at
17.10% of the fixed compensation for fiscal year 2016 (of a maximum of 30%);
– for the net debt-to-equity ratio criterion (3), the Board of Directors noted that, in
2016, the Group’s net debt-to-equity ratio is less than 30%, which led the portion
for this criterion to be set at 40% of the fixed compensation for fiscal year 2016
(of a maximum of 40%);
(1) ExxonMobil, Royal Dutch Shell, BP and Chevron.
(2) The Group measures 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.
Adjusted shareholders’ equity for fiscal year 2016 is calculated after payment of a dividend of €2.45 per share, subject to approval by the Annual Shareholders’ Meeting on May 26, 2017.
In 2015, the ROE was 11.5%.
(3) For its internal management and external communication purposes, the Group calculates a net debt-to-equity ratio by dividing its net financial debt by its adjusted shareholders’ equity.
The 2016 adjusted shareholders’ equity is calculated after payment of a dividend of €2.45 per share, subject to approval by the Annual Shareholders’ Meeting on May 26, 2017.
In 2016, the net debt-to-equity ratio was 27.1%. In 2015, it was 28.3%.
132
TOTAL. Registration Document 2016
Summary table of compensation components due or granted to the Chairman and Chief Executive Officer for fiscal year 2016,
as submitted to the Ordinary Shareholders’ Meeting for vote (AFEP-MEDEF Code, point 26)
Compensation of the administration and management bodies 6
Components of Amount or accounting Presentation
compensation valuation submitted
for vote
Components of compensation due or granted for fiscal year 2016
Annual variable
compensation
(continued)
Multi-year or deferred
variable compensation
Extraordinary
compensation
Directors’ fees
n / a
n / a
n / a
€2,561,100
(accounting valuation)
Stock options,
performance shares
(and all other forms of
long-term
compensation)
– the criterion related to the change in the Group’s adjusted net income (ANI) was
assessed by comparison with those of the four large oil companies (1). The Board of
Directors noted that the increase in the Group’s three-year average ANI was better
than that of the panel (2), which led the portion for this criterion to be set at 50% of
the fixed compensation for fiscal year 2016 (of a maximum of 50%).
Regarding the Chairman and Chief Executive Officer’s personal contribution, the
Board of Directors determined that the targets set were largely achieved, particularly
those related to the increase in oil and gas production (+4.5% in 2016 compared to
2015), the successful strategic negotiations with producing countries (acquisition of
an interest in the giant Al-Shaheen oil field in Qatar for a period of 25 years,signing of
a heads of agreement with the Iranian state-owned company to develop phase 11 of
South Pars, strategic alliance with Petrobras in Brazil) and the successful managerial
transition (implementation of the project “One Total, one ambition”, acquisition of Saft
Groupe which permitted the integration of electricity storage solutions in the Group’s
portfolio, acquisition of the gas distributor Lampiris, sale of Atotech, renewal of the
Executive Committee as of September 1, 2016). CSR performance was also
considered fully satisfactory based on the decrease of the Group’s CO2 emissions
(-7% in 2016 compared to 2015) and on the improvement of the Group’s position in
the rankings published by non-financial rating agencies. The Chairman and Chief
Executive Officer’s personal contribution was therefore set at 40% of the fixed
compensation (of a maximum of 40%).
The Board of Directors has not granted any multi-year or deferred variable
compensation.
The Board of Directors has not granted any extraordinary compensation.
Mr. Pouyanné does not receive directors’ fees for his duties at TOTAL S.A or at the
companies it controls.
On July 27, 2016, Mr. Pouyanné was granted 60,000 existing shares of the Company
(corresponding to 0.002% of the share capital) pursuant to the authorization of the
Company’s Combined Shareholders’ Meeting of May 24, 2016 (twenty-fourth
resolution) subject to the conditions set out below. These shares were granted under
a broader share plan approved by the Board of Directors on July 27, 2016, relating to
0.8% of the share capital in favor of more than 10,000 beneficiaries. The definitive
grant of all the shares is subject to the beneficiary’s continued presence within the
Group during the vesting period and to performance conditions as described below.
The definitive number of shares granted will be based on the comparative TSR (Total
Shareholder Return) and the annual variation in net cash flow per share for fiscal
years 2016 to 2018, applied as follows:
– the Company will be ranked each year against its peers (1) during the three vesting
years (2016, 2017 and 2018) based on the TSR criterion using the average closing
market price expressed in dollars over one quarter at the beginning and end of
each three-year period (Q4 year N vs. / Q4 year N-3). The dividend will be
considered reinvested based on the last market price on the ex-dividend date.
TSR N = (average price Q4 N – average price Q4 N-3 + reinvested
dividends) / (average price Q4 N-3);
(1) ExxonMobil, Royal Dutch Shell, BP and Chevron.
(2) The annual ANI of each peer used for the calculation is determined by taking the average of the ANIs published by a panel of six financial analysts: UBS, Crédit Suisse, Barclays, Bank of
America Merrill Lynch, JP Morgan and Deutsche Bank. If any of these analysts is unable to publish the results of one or more peers for a given year, it will be replaced, for the year and for the
peer(s) in question, in the order listed, by an analyst included in the following additional list: Jefferies, HSBC, Société Générale, Goldman Sachs and Citi. The ANIs used will be set according to
these analysts’ last publications two business days after the publication of the press release announcing the “fourth quarter and annual results” of the last peer.
Registration Document 2016. TOTAL
133
6 Compensation of the administration and management bodies
Summary table of compensation components due or granted to the Chairman and Chief Executive Officer for fiscal year 2016,
as submitted to the Ordinary Shareholders’ Meeting for vote (AFEP-MEDEF Code, point 26)
Components of Amount or accounting Presentation
compensation valuation submitted
for vote
Components of compensation due or granted for fiscal year 2016
Stock options,
performance shares
(and all other forms of
long-term
compensation)
(continued)
Payment for assuming
a position
n / a
– the Company will be ranked each year against its peers (1) using the annual variation
in net cash flow per share expressed in dollars criterion. Net cash flow is defined
as cash flow from operating activities minus cash flow from investing activities
including acquisitions and disposals. This data expressed in dollars will come from
the consolidated statements of cash flow taken from the annual Consolidated
Financial Statements of the Company and its peers for the fiscal years in question
(based on the accounting standards applicable at the time of the closing of the
accounts for such fiscal years).
The number of shares used to calculate net cash flow per share will be the
weighted-average number of diluted shares for the Company and each of its peers.
Based on the ranking, a grant rate will be determined for each year: 1st 180% of the
grant; 2nd: 130%: of the grant; 3rd: 80% of the grant; 4th and 5th: 0%.
For each of the criteria, the average of the three grant rates obtained (for each of the
three fiscal years for which the performance conditions are assessed) will be rounded
to the nearest 0.1 whole percent (0.05% being rounded to 0.1%) and capped at
100%. Each criterion will have a weight of 50% in the definitive grant rate. The
definitive grant rate will be rounded to the nearest 0.1 whole percent (0.05% being
rounded to 0.1%).
The number of shares definitively granted, after confirmation of the performance
conditions, will be rounded to the nearest whole number of shares in case of a
fractional lot.
In accordance with the provisions of the French Commercial Code, Mr. Pouyanné
will, until the end of his term, be required to retain in the form of registered shares
50% of the gains on the acquired shares net of tax and national insurance
contributions related to the shares granted. When Mr. Pouyanné holds (2) a volume of
shares representing five times the fixed portion of his gross annual compensation,
this percentage will be equal to 10%. If this condition is no longer met, the above-
mentioned 50% holding requirement will again apply. Given this holding requirement,
the availability of the performance shares is not dependent on the purchase of further
shares in the Company.
In addition, the Board of Directors has noted that, pursuant to the Board’s Rules of
Procedure applicable to all directors, the Chairman and Chief Executive Officer is not
allowed to hedge the shares of the Company or any related financial instruments and
has taken note of Mr. Pouyanné’s commitment to abstain from such hedging
operations with regard to the performance shares granted.
The grant of performance shares to Mr. Pouyanné is subject to the same
requirements applicable to the other beneficiaries of the performance share plan and
were approved by the Board at its meeting on July 27, 2016. In particular, these
provisions stipulate that the shares definitively granted at the end of the three-year
vesting period will, after confirmation of fulfillment of the presence and performance
conditions, be automatically recorded as pure registered shares on the start date of
the two-year holding period and will remain non-transferable and unavailable until the
end of the holding period.
Mr. Pouyanné was not granted any payment for assuming his position.
(1) ExxonMobil, Royal Dutch Shell, BP and Chevron.
(2) In the form of shares or units of mutual funds invested in shares of the Company.
134
TOTAL. Registration Document 2016
Summary table of compensation components due or granted to the Chairman and Chief Executive Officer for fiscal year 2016,
as submitted to the Ordinary Shareholders’ Meeting for vote (AFEP-MEDEF Code, point 26)
Compensation of the administration and management bodies 6
Components of Amount or accounting Presentation
compensation valuation submitted
for vote
Components of compensation due or granted for fiscal year 2016 that have been submitted to a vote at the Shareholders’ Meeting
by virtue of the regulated agreements and commitments procedure
Valuation of in-kind
benefits
€58,945
(accounting valuation)
The Chairman and Chief Executive Officer has the use of a company car and is
covered by the life insurance and health care plans paid for by the Company.
Severance benefit None
Retirement benefit None
The Chairman and Chief Executive Officer is entitled to a benefit equal to two years of
his gross compensation in the event of a forced departure related to a change of
control or strategy. The calculation is based on the gross compensation (fixed and
variable) of the 12 months preceding the date of termination or non-renewal of his
term of office.
The severance benefit will only be paid in the event of a forced departure related to a
change of control or strategy. It will not be due in 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. Pursuant to the provisions of Article L. 225-42-1 of
the French Commercial Code, receipt of this severance benefit is contingent upon a
performance-related condition applicable to the beneficiary, which is deemed to be
fulfilled if at least two of the following criteria are met:
– the average ROE (return on equity) for the three years preceding the year in which
the Chairman and Chief Executive Officer retires is at least 10%;
– the average net debt-to-equity ratio for the three years preceding the year in which
the Chairman and Chief Executive Officer retires is less than or equal to 30%;
– growth in TOTAL’s oil and gas production is greater than or equal to the average
growth rate of four oil companies (ExxonMobil, Royal Dutch Shell, BP and
Chevron) during the three years preceding the year in which the Chairman and
Chief Executive Officer retires.
The Chairman and Chief Executive Officer is entitled to a retirement benefit equal to
those available to eligible members of the Group under the French National Collective
Bargaining Agreement for the Petroleum Industry. This benefit is equal to 25% of the
fixed and variable annual compensation received during the 12 months preceding
retirement.
Pursuant to the provisions of Article L. 225-42-1 of the French Commercial Code,
receipt of this retirement benefit is contingent upon a performance-related condition
applicable to the beneficiary, which is deemed to be fulfilled if at least two of the
following criteria are met:
– the average ROE (return on equity) for the three years preceding the year in which
the Chairman and Chief Executive Officer retires is at least 10%;
– the average net debt-to-equity ratio for the three years preceding the year in which
the Chairman and Chief Executive Officer retires is less than or equal to 30%;
– growth in TOTAL’s oil and gas production is greater than or equal to the average
growth rate of four oil companies (ExxonMobil, Royal Dutch Shell, BP and
Chevron) during the three years preceding the year in which the Chairman and
Chief Executive Officer retires. The retirement benefit cannot be combined with the
severance benefit described above.
Non-compete
compensation
n / a
Mr. Pouyanné has not received any non-compete compensation.
Registration Document 2016. TOTAL
135
6 Compensation of the administration and management bodies
Summary table of compensation components due or granted to the Chairman and Chief Executive Officer for fiscal year 2016,
as submitted to the Ordinary Shareholders’ Meeting for vote (AFEP-MEDEF Code, point 26)
Components of Amount or accounting Presentation
compensation valuation submitted
for vote
Supplementary
pension plan
None Pursuant to applicable legislation, the Chairman and Chief Executive Officer is eligible
for the basic French Social Security pension and for pension benefits under the
ARRCO and AGIRC supplementary pension plans.
He also participates in the internal defined contribution pension plan applicable to all
TOTAL S.A. employees, known as RECOSUP (Régime collectif et obligatoire de
retraite supplémentaire à cotisations définies), covered by Article L. 242-1 of the
French Social Security Code. The Company’s commitment is limited to its share of
the contributions paid to the insurance company that manages the plan. For fiscal
year 2016, this pension plan represented a booked expense to TOTAL S.A. in favor
of the Chairman and Chief Executive Officer of €2,317.
The Chairman and Chief Executive Officer also participates in a supplementary
defined benefit pension plan, covered by Article L. 137-11 of the French Social
Security Code, set up and financed by the Company and approved by the Board of
Directors on March 13, 2001, for which management is outsourced to two insurance
companies effective January 1, 2012. This plan applies to all TOTAL S.A. employees
whose compensation exceeds eight times the annual ceiling for calculating French
Social Security contributions (PASS), set at €38,616 for 2016 (i.e., €308,928), and
above which there is no conventional pension plan.
To be eligible for this supplementary pension plan, participants must have served for
at least five years, be at least 60 years old and exercised his or her rights to
retirement from the French Social Security. The benefits under this plan are subject to
a presence condition under which the beneficiary must still be employed at the time
of retirement. However, the presence condition does not apply if a beneficiary aged
55 or older leaves the Company at the Company’s initiative or in case of disability.
The length of service acquired by Mr. Pouyanné as a result of his previous salaried
duties held at the Group since January 1, 1997 has been maintained for the benefit
of this plan. The compensation taken into account to calculate the supplementary
pension is the average gross annual compensation (fixed and variable portion) over
the last three years. The amount paid under this plan is equal to 1.8% of the
compensation falling between 8 and 40 times the PASS and 1% for the portion of the
compensation falling between 40 and 60 times this ceiling, multiplied by the number
of years of service up to a maximum of 20 years, subject to the performance
condition set out below applicable to the Chairman and Chief Executive Officer.
The sum of the annual supplementary pension plan benefits and other pension plan
benefits (other than those set up individually and on a voluntary basis) may not
exceed 45% of the average gross compensation (fixed and variable portion) over the
last three years. In the event that this percentage is exceeded, the supplementary
pension is reduced accordingly. The amount of the supplementary pension
determined in this way is indexed to the ARRCO pension point.
The supplementary pension includes a clause whereby 60% of the amount will be
paid to beneficiaries in the event of death after retirement.
To ensure that the acquisition of additional pension rights under this defined-benefit
pension plan is subject to performance conditions to be defined pursuant to the
provisions of Article L. 225-42-1 of the French Commercial Code amended by law
No. 2015-990 of August 6, 2015, the Board of Directors noted the existence of the
Chief Executive Officer’s pension rights under the above-mentioned pension plan,
immediately before his appointment as Chairman, for the period from January 1,
1997 to December 18, 2015.
The conditional rights granted for the period from January 1, 1997 to December 18,
2015 (inclusive), acquired without performance conditions, correspond to a
replacement rate equal to 34.14% for the portion of the base compensation falling
between 8 and 40 times the PASS and a replacement rate of 18.96% for the portion
of the base compensation falling between 40 and 60 times the PASS.
136
TOTAL. Registration Document 2016
Summary table of compensation components due or granted to the Chairman and Chief Executive Officer for fiscal year 2016,
as submitted to the Ordinary Shareholders’ Meeting for vote (AFEP-MEDEF Code, point 26)
Compensation of the administration and management bodies 6
Components of Amount or accounting Presentation
compensation valuation submitted
for vote
Supplementary
pension plan
(continued)
Approval by the
Annual Shareholders’
Meeting
-
The conditional rights granted for the period from December 19, 2015 to
December 31, 2016 are subject to the performance condition described below and
correspond to a maximum replacement rate equal to 1.86% for the portion of the
base compensation falling between 8 and 40 times the PASS and a replacement rate
equal to 1.04% for the portion of the base compensation falling between 40 and 60
times the PASS.
Pursuant to the provisions of Article L. 225-42-1 of the French Commercial Code, on
December 16, 2015 the Board of Directors decided to make the acquisition of these
conditional rights for the period from December 19, 2015 to December 31, 2016,
subject to a condition related to the beneficiary’s performance, which is considered
fulfilled if the variable portion of the Chairman and Chief Executive Officer’s
compensation paid in 2017 for fiscal year 2016 reaches 100% of the base salary due
for fiscal year 2016. In the event that the variable portion does not reach 100% of the
base salary, the rights granted will be calculated on a prorata basis.
On February 8, 2017, the Board of Directors noted that the specified performance
condition was fully met and therefore confirmed the acquisition by Mr. Pouyanné of
additional pension rights for the period from December 19, 2015 to December 31,
2016 under this defined-benefit pension plan.
The Board also noted that Mr. Pouyanné would no longer be able to acquire additional
pension rights under this plan given the rules for determining pension rights set out in
the plan and the 20 years of service of Mr. Pouyanné as of December 31, 2016.
The commitments made by TOTAL S.A. to its Chairman and Chief Executive Officer
regarding the supplementary defined benefit and similar pension plans therefore
represent, at December 31, 2016, a gross annual pension estimated at €599,320
based on the length of service acquired as of December 31, 2016 (i.e., 20 years of
service), corresponding to 16.03% of Mr. Pouyanné’s gross annual compensation
consisting of the annual fixed portion for 2016 (i.e., €1,400,000) and the variable
portion paid in 2017 for fiscal year 2016 (i.e., €2,339,400). Nearly the full amount of
TOTAL S.A.’s commitments under these supplementary and similar retirement plans
(including the retirement benefit) is outsourced to insurance companies and the non-
outsourced balance is evaluated annually and adjusted through a provision in the
accounts. The amount of these commitments as of December 31, 2016
is €16.1 million for the Chairman and Chief Executive Officer (€16.4 million for the
Chairman and Chief Executive Officer and the executive and non-executive directors
covered by these plans). These amounts represent the gross value of TOTAL S.A.’s
commitments to these beneficiaries based on the estimated gross annual pensions
as of December 31, 2016 and the statistical life expectancy of the beneficiaries.
The total amount of all the pension plans in which Mr. Pouyanné participates
represents, at December 31, 2016, a gross annual pension estimated at €690,600
based on the length of service acquired as of December 31, 2016 (i.e., 20 years of
service), corresponding to 18.47% of Mr. Pouyanné’s gross annual compensation
defined above (annual fixed portion for 2016 and variable portion paid in 2017 for
fiscal year 2016).
In line with the principles for determining the compensation of executive directors as
set out in the AFEP-MEDEF Code which the Company uses as a reference, the
Board of Directors took into account the benefit accruing from participation in the
pension plans when determining the Chairman and Chief Executive Officer’s
compensation.
The commitments made to the Chairman and Chief Executive Officer regarding the
pension and insurance plans, the retirement benefit and the severance benefit (in the
event of forced departure related to a change of control or strategy) were authorized
by the Board of Directors on December 16, 2015 and approved by the Annual
Shareholders’ Meeting on May 24, 2016.
Registration Document 2016. TOTAL
137
6 Compensation of the administration and management bodies
Report on the principles and criteria for the determination, breakdown and allocation of the fixed, variable and extraordinary components
of the total compensation (including in-kind benefits) attributable to the Chairman and Chief Executive Officer
(Article L. 225-37-2 of the French Commercial Code)
6. Report on the principles and criteria for the
determination, breakdown and allocation of the fixed,
variable and extraordinary components of the total
compensation (including in-kind benefits) attributable
to the Chairman and Chief Executive Officer
(Article L. 225-37-2 of the French Commercial Code)
In accordance with the provisions of Article L. 225-37-2 of the
French Commercial Code, this report attached to the report
referred to in Articles L. 225-100 and L. 225-102 describes the
principles and criteria for the determination, breakdown and
allocation of the fixed, variable and extraordinary components of the
total compensation (including in-kind benefits) attributable to the
Chairman and Chief Executive Officer as a result of his duties.
These components will be submitted to the Annual Shareholders’
Meeting of May 26, 2017 for approval.
This report reviewed by the Compensation Committee was
approved by the Board of Directors.
The compensation policy for the Chairman and Chief Executive
Officer is approved by the Board of Directors on the proposal of the
Compensation Committee. It is based on the general principles for
determining the compensation of the executive directors approved
by the Board of Directors at its meeting on February 9, 2012, which
have not been changed since then and are set out below.
At its meeting on March 15, 2017, the Board of Directors, on the
proposal of the Compensation Committee, approved the
compensation policy for the Chairman and Chief Executive Officer
applicable for fiscal year 2017 and presented in point 6.2.
In line with the principles for determining the compensation of
executive directors as set out in the AFEP-MEDEF Code which the
Company uses as a reference, the Board of Directors took into
account the benefit accruing from participation in the pension plans
when determining the compensation policy for the Chairman and
Chief Executive Officer for fiscal year 2017.
6.1. General principles for determining the compensation of the executive directors
The general principles for determining the compensation and other
benefits granted to the executive directors of TOTAL S.A. are as
follows:
The Board of Directors monitors the change in the fixed and
variable portions of the executive directors’ compensation over
several years in light of the Company’s performance;
– compensation and benefits for the executive directors are set by
the Board of Directors on the proposal of the Compensation
Committee. Such compensation must be reasonable and fair, in
a context that values both teamwork and motivation within the
Company. Compensation for the executive directors is based on
the market, the work performed, the results obtained and the
responsibilities assumed;
– compensation for the executive directors includes a fixed portion
and a variable portion. The fixed portion is reviewed at least every
two years;
– the amount of the variable portion is reviewed each year and may
not exceed a stated percentage of the fixed portion. 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 Company’s strategy;
– the variable portion rewards short-term performance and the
progress made toward paving the way for medium-term
development. It is determined in a manner consistent with the
annual performance review of the executive directors and the
Company’s medium-term strategy.
– there is no specific pension plan for the executive directors. They
are eligible for retirement benefits and pension plans available to
certain employee categories in the Group under conditions
determined by the Board;
– stock options and performance shares are designed to align the
interests of the executive directors with those of the shareholders
over the long term.
The grant of options and performance shares to the executive
directors is reviewed in light of all the components of
compensation of the person in question. No discount is applied
when stock options are granted.
Stock options and performance shares are granted at regular
intervals to prevent any opportunistic behavior.
The exercise of options and the definitive grant of performance
shares to which the executive directors are entitled are subject to
performance conditions that must be met over several years.
The Board of Directors determines the rules related to holding a
portion of the shares resulting from the exercise of options and
the performance shares definitively granted, which apply to the
executive directors until the end of their term of office.
138
TOTAL. Registration Document 2016
Report on the principles and criteria for the determination, breakdown and allocation of the fixed, variable and extraordinary components of
the total compensation (including in-kind benefits) attributable to the Chairman and Chief Executive Officer
(Article L. 225-37-2 of the French Commercial Code)
Compensation of the administration and management bodies 6
The executive directors cannot be granted stock options or
performance shares when they leave office;
– after three years in office, the executive directors are required to
hold at least the number of Company shares set by the Board;
– the components of compensation of the executive directors are
made public after the Board of Directors’ meeting at which they
are approved.
The executive directors do not take part in any discussions or
deliberations of the corporate bodies regarding items on the
agenda of Board of Directors’ meetings related to the assessment
of their performance or the determination of the components of
their compensation.
6.2. Compensation policy for the Chairman and Chief Executive Officer
for fiscal year 2017
The compensation policy for the Chairman and Chief Executive
Officer for fiscal year 2017, as approved by the Board of Directors
on March 15, 2017, is presented below.
Base salary of the Chairman and Chief Executive Officer
(fixed compensation)
The Board of Directors decided to set Mr. Pouyanné’s annual base
salary (fixed compensation) for his duties as Chairman and Chief
Executive Officer for fiscal year 2017 at €1,400,000 (same as the
fixed portion due for fiscal year 2016).
The level of the Chairman and Chief Executive Officer’s fixed
compensation was set based on the responsibilities assumed
and the compensation levels applied for executive directors
of comparable companies (particularly CAC 40 companies).
Annual variable portion of the Chairman and Chief
Executive Officer’s compensation
The Board of Directors also decided to set the maximum amount of
the variable portion that could be paid to the Chairman and Chief
Executive Officer for fiscal year 2017 at 180% of his base salary
(same percentage as in fiscal year 2016). This ceiling was set based
on the level applied by a benchmark sample of companies
operating in the energy sectors.
As in 2016, the formula for calculating the variable portion of the
Chairman and Chief Executive Officer’s compensation for fiscal year
2017 uses economic parameters that refer to quantitative targets
reflecting the Group’s performance as well as the Chairman and
Chief Executive Officer’s personal contribution allowing a qualitative
assessment of his management.
Annual variable compensation due for fiscal year 2017 (expressed as a percentage of the base salary)
Maximum
percentage
Economic parameters 140%
– Safety – comparative 20%
– Return on equity (ROE) 30%
– Net debt-to-equity ratio 40%
– Adjusted net income (ANI) – comparative 50%
Personal contribution: 40%
– steering of the strategy and successful strategic negotiations with producing countries 10%
– achievement of production and reserve targets 10%
– performance and outlook with respect to Downstream activities 10%
– Corporate Social Responsibility (CSR) performance 10%
Total 180%
The parameters used include:
– change in safety, for up to 20% of the base salary, assessed
through the achievement of an annual TRIR (Total Recordable
Injury Rate) target and the number of accidental deaths
per million hours worked, FIR (Fatality Incident Rate) compared to
those of four large competitor oil companies (1), as well as through
changes in the Tier 1 + Tier 2 indicator (2);
– return on equity (ROE) as published by the Group on the basis of
its balance sheet and consolidated statement of income, for up
to 30% of the base salary;
– net debt-to-equity ratio as published by the Group on the basis
of its balance sheet and consolidated statement of income, for
up to 40% of the base salary; and
– change in adjusted net income (ANI), for up to 50% of the base
salary, determined on the basis of the financial statements
published by the Group (in accordance with the accounting
standards applicable at the time of the closing of the accounts
for the fiscal years in question) and compared with the ANI values
of four major oil companies (1) determined on the basis of
estimates calculated by a group of leading financial analysts.
(1) ExxonMobil, Royal Dutch Shell, BP and Chevron.
(2) Tier 1 and Tier 2: indicator of the number of loss of primary containment events, with more or less significant consequences, as defined by the API 754 (for downstream) and IOGP 456 (for
upstream) standards. Excluding acts of sabotage and theft.
Registration Document 2016. TOTAL
139
6 Compensation of the administration and management bodies
Report on the principles and criteria for the determination, breakdown and allocation of the fixed, variable and extraordinary components of the
total compensation (including in-kind benefits) attributable to the Chairman and Chief Executive Officer
(Article L. 225-37-2 of the French Commercial Code)
The expected levels of achievement of the quantitative targets for
determining the variable portion of the Chairman and Chief
Executive Officer’s compensation have been clearly defined but are
not made public for reasons of confidentiality.
The Chairman and Chief Executive Officer’s personal contribution,
which may represent up to 40% of the base salary, is evaluated
based on the following criteria:
– steering of the strategy and successful strategic negotiations
with producing countries, for up to 10%;
– achievement of production and reserve targets, for up to 10%;
– performance and outlook with respect to Downstream activities,
for up to 10%; and
– CSR performance, for up to 10%, notably taking into account
climate issues in the Group’s strategy as well as the Group’s
reputation in the domain of corporate social responsibility.
Performance shares
Each year, the Chairman and Chief Executive Officer can be
granted performance shares as part of the broader grant plans
approved by the Board of Directors for certain Group employees.
The performance shares granted to him are subject to the same
requirements applicable to the other beneficiaries of the grant
plans.
As in previous years, in 2017 the Board of Directors will consider
offering a performance share plan to various beneficiaries, including
the Chairman and Chief Executive Officer. The performance
conditions would be based on the Company’s ranking established
each year against its peers (1) during the three vesting years (2017,
2018, 2019) using the TSR (Total Shareholder Return) criterion; and
on the Company’s ranking established each year against its peers (1)
during the three vesting years (2017, 2018, 2019) using the annual
variation in net cash flow per share expressed in dollars criterion.
At the end of the three-year vesting period, the shares granted
would need to be held for two years following their definitive grant.
Commitments made by the Company to the Chairman
and Chief Executive Officer (Article L. 225-102-1,
paragraph 3, of the French Commercial Code)
The commitments made to the Chairman and Chief Executive
Officer regarding the pension plans, the retirement benefit and the
severance benefit to be paid in the event of forced departure
related to a change of control or strategy, as well as the life
insurance and health care benefits, approved by the Board of
Directors on December 16, 2015 and by the Annual Shareholders’
Meeting on May 24, 2016, in accordance with the provisions of
Article L. 225-42-1 of the French Commercial Code, will not be
likely to be changed before the expiration of the Chairman and
Chief Executive Officer’s term of office. They are presented below.
It should be noted that Mr. Pouyanné already benefited from all
these provisions when he was an employee of the Company,
except for the commitment to pay severance benefits in the event
of forced departure related to a change of control or strategy. It
should also be noted that Mr. Pouyanné, who joined the Group on
January 1, 1997, ended the employment contract that he previously
had with TOTAL S.A. through his resignation at the time of his
appointment as Chief Executive Officer on October 22, 2014.
Pension plans
Pursuant to applicable legislation, the Chairman and Chief
Executive Officer is eligible for the basic French Social Security
pension and for pension benefits under the ARRCO and AGIRC
supplementary pension plans.
He also participates in the internal defined contribution pension
plan applicable to all TOTAL S.A. employees, known as RECOSUP
(Régime collectif et obligatoire de retraite supplémentaire à
cotisations définies), covered by Article L. 242-1 of the French
Social Security Code. The Company’s commitment is limited to its
share of the contributions paid to the insurance company that
manages the plan. For fiscal year 2016, this pension plan
represented a booked expense to TOTAL S.A. in favor of the
Chairman and Chief Executive Officer of €2,317.
The Chairman and Chief Executive Officer also participates in a
supplementary defined benefit pension plan, covered by Article
L. 137-11 of the French Social Security Code, set up and financed
by the Company and approved by the Board of Directors on
March 13, 2001, for which management is outsourced to two
insurance companies effective January 1, 2012. This plan applies to
all TOTAL S.A. employees whose compensation exceeds eight
times the annual ceiling for calculating French Social Security
contributions (PASS), set at €38,616 for 2016 (i.e., €308,928), and
above which there is no conventional pension plan.
To be eligible for this supplementary pension plan, participants
must have served for at least five years, be at least 60 years old
and exercised his or her rights to retirement from the French Social
Security. The benefits under this plan are subject to a presence
condition under which the beneficiary must still be employed at the
time of retirement. However, the presence condition does not apply
a beneficiary aged 55 or older leaves the Company at the
Company’s initiative or in case of disability.
The length of service acquired by Mr. Pouyanné as a result of his
previous salaried duties held at the Group since January 1, 1997
has been maintained for the benefit of this plan. The compensation
taken into account to calculate the supplementary pension is the
average gross annual compensation (fixed and variable portion)
over the last three years. The amount paid under this plan is equal
to 1.8% of the compensation falling between 8 and 40 times the
PASS and 1% for the portion of the compensation falling between
40 and 60 times this ceiling, multiplied by the number of years of
service up to a maximum of 20 years, subject to the performance
condition set out below applicable to the Chairman and Chief
Executive Officer.
The sum of the annual supplementary pension plan benefits and
other pension plan benefits (other than those set up individually and
on a voluntary basis) may not exceed 45% of the average gross
compensation (fixed and variable portion) over the last three years.
In the event that this percentage is exceeded, the supplementary
pension is reduced accordingly. The amount of the supplementary
pension determined in this way is indexed to the ARRCO pension
point.
The supplementary pension includes a clause whereby 60% of the
amount will be paid to beneficiaries in the event of death after
retirement.
(1) ExxonMobil, Royal Dutch Shell, BP and Chevron.
140
TOTAL. Registration Document 2016
Report on the principles and criteria for the determination, breakdown and allocation of the fixed, variable and extraordinary components of
the total compensation (including in-kind benefits) attributable to the Chairman and Chief Executive Officer
(Article L. 225-37-2 of the French Commercial Code)
Compensation of the administration and management bodies 6
To ensure that the acquisition of additional pension rights under this
defined-benefit pension plan is subject to performance conditions
to be defined pursuant to the provisions of Article L. 225-42-1 of
the French Commercial Code amended by law No. 2015-990 of
August 6, 2015, the Board of Directors noted the existence of the
Chief Executive Officer’s pension rights under the above-mentioned
pension plan, immediately before his appointment as Chairman, for
the period from January 1, 1997 to December 18, 2015.
The conditional rights granted for the period from January 1, 1997
to December 18, 2015 (inclusive), acquired without performance
conditions, correspond to a replacement rate equal to 34.14% for
the portion of the base compensation falling between 8 and 40
times the PASS and a replacement rate of 18.96% for the portion of
the base compensation falling between 40 and 60 times the PASS.
The conditional rights granted for the period from December 19,
2015 to December 31, 2016 are subject to the performance
condition described below and correspond to a maximum
replacement rate equal to 1.86% for the portion of the base
compensation falling between 8 and 40 times the PASS and a
replacement rate equal to 1.04% for the portion of the base
compensation falling between 40 and 60 times the PASS.
Pursuant to the provisions of Article L. 225-42-1 of the French
Commercial Code, the Board of Directors decided to make the
acquisition of these conditional rights for the period from
December 19, 2015 to December 31, 2016, subject to a condition
related to the beneficiary’s performance, which is considered
fulfilled if the variable portion of the Chairman and Chief Executive
Officer’s compensation paid in 2017 for fiscal year 2016 reaches
100% of the base salary due for fiscal year 2016. In the event that
the variable portion does not reach 100% of the base salary, the
rights granted will be calculated on a prorata basis.
On February 8, 2017, the Board of Directors noted that the specified
performance condition was fully met and therefore confirmed the
acquisition by Mr. Pouyanné of additional pension rights for the
period from December 19, 2015 to December 31, 2016.
The Board also noted that Mr. Pouyanné would no longer be able
to acquire additional pension rights under this plan given the rules
for determining pension rights set out in the plan and the 20 years
of service of Mr. Pouyanné as of December 31, 2016.
The commitments made by TOTAL S.A. to its Chairman and Chief
Executive Officer regarding the supplementary defined benefit and
similar pension plans therefore represent, at December 31, 2016, a
gross annual pension estimated at €599,320 based on the length
of service acquired as of December 31, 2016 (i.e., 20 years of
service), corresponding to 16.03% of Mr. Pouyanné’s gross annual
compensation consisting of the annual fixed portion for 2016
(i.e., €1,400,000) and the variable portion paid in 2017 for fiscal
year 2016 (i.e., €2,339,400).
Nearly the full amount of TOTAL S.A.’s commitments under these
supplementary and similar retirement plans (including the retirement
benefit) is outsourced to insurance companies and the non-
outsourced balance is evaluated annually and adjusted through a
provision in the accounts. The amount of these commitments as of
December 31, 2016 is €16.1 million for the Chairman and Chief
Executive Officer (€16.4 million for the Chairman and Chief
Executive Officer and the executive and non-executive directors
covered by these plans). These amounts represent the gross value
of TOTAL S.A.’s commitments to these beneficiaries based on the
estimated gross annual pensions as of December 31, 2016 and the
statistical life expectancy of the beneficiaries.
The total amount of all the pension plans in which Mr. Pouyanné
participates represents, at December 31, 2016, a gross annual
pension estimated at €690,600 based on the length of service
acquired as of December 31, 2016 (i.e., 20 years of service),
corresponding to 18.47% of Mr. Pouyanné’s gross annual
compensation defined above (annual fixed portion for 2016 and
variable portion paid in 2017 for fiscal year 2016).
Retirement benefit
The Chairman and Chief Executive Officer is entitled to a retirement
benefit equal to those available to eligible members of the Group
under the French National Collective Bargaining Agreement for the
Petroleum Industry. This benefit is equal to 25% of the fixed and
variable annual compensation received during the 12 months
preceding retirement.
Pursuant to the provisions of Article L. 225-42-1 of the French
Commercial Code, receipt of this retirement benefit is contingent upon
a performance-related condition applicable to the beneficiary, which
is deemed to be fulfilled if at least two of the following criteria are met:
– the average ROE (return on equity) for the three years preceding
the year in which the Chairman and Chief Executive Officer retires
is at least 10%;
– the average net debt-to-equity ratio for the three years preceding
the year in which the Chairman and Chief Executive Officer retires
is less than or equal to 30%; and
– growth in TOTAL’s oil and gas production is greater than or equal
to the average growth rate of four oil companies (ExxonMobil,
Royal Dutch Shell, BP and Chevron) during the three years
preceding the year in which the Chairman and Chief Executive
Officer retires.
The retirement benefit cannot be combined with the severance
benefit described below.
Severance benefit
The Chairman and Chief Executive Officer is entitled to a benefit
equal to two years of his gross compensation in the event of a
forced departure related to a change of control or strategy. The
calculation is based on the gross compensation (fixed and variable)
of the 12 months preceding the date of termination or non-renewal
of his term of office.
The severance benefit will only be paid in the event of a forced
departure related to a change of control or strategy. It will not be
due in 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.
Pursuant to the provisions of Article L. 225-42-1 of the French
Commercial Code, receipt of this severance benefit is contingent
upon a performance-related condition applicable to the beneficiary,
which is deemed to be fulfilled if at least two of the following criteria
are met:
– the average ROE (return on equity) for the three years preceding
the year in which the Chairman and Chief Executive Officer retires
is at least 10%;
– the average net debt-to-equity ratio for the three years preceding
the year in which the Chairman and Chief Executive Officer retires
is less than or equal to 30%; and
– growth in TOTAL’s oil and gas production is greater than or equal
to the average growth rate of four oil companies (ExxonMobil,
Registration Document 2016. TOTAL
141
6 Compensation of the administration and management bodies
Report on the principles and criteria for the determination, breakdown and allocation of the fixed, variable and extraordinary components of the
total compensation (including in-kind benefits) attributable to the Chairman and Chief Executive Officer
(Article L. 225-37-2 of the French Commercial Code)
Royal Dutch Shell, BP and Chevron) during the three years
preceding the year in which the Chairman and Chief Executive
Officer retires.
Life insurance and health care plans
The Chairman and Chief Executive Officer is covered by the
following life insurance plans provided by various life insurance
companies:
– an “incapacity, disability, life insurance” plan applicable to all
employees, partly paid for by the Company, that provides for two
options in case of death of a married employee: either the
payment of a lump sum equal to five times the annual
compensation up to 16 times the PASS, corresponding to a
maximum of €3,138,240 in 2017, plus an additional amount if
there is a dependent child or children, or the payment of a lump
sum equal to three times the annual compensation up to 16
times the PASS, plus a survivor’s pension and education
allowance;
– a second “disability and life insurance” plan, fully paid by the
Company, applicable to executive officers and senior executives
whose annual gross compensation is more than 16 times the
PASS. This contract, signed on October 17, 2002, amended on
January 28 and December 16, 2015, guarantees the beneficiary
the payment of a lump sum, in case of death, equal to two years
of compensation (defined as the gross annual fixed reference
compensation (base France), which corresponds to 12 times the
monthly gross fixed compensation paid during the month prior to
death or sick leave, to which is added the highest amount in
absolute value of the variable portion received during one of the
five previous years of activity), which is increased to three years in
case of accidental death and, in case of accidental permanent
disability, a lump sum proportional to the degree of disability. The
death benefit is increased by 15% for each dependent child.
Payments due under this contract are made after the deduction of
any amount paid under the above-mentioned plan applicable to all
employees.
The Chairman and Chief Executive Officer also has the use of a
company car and is covered by the health care plan available to all
employees.
6.3. Draft resolution prepared by the Board of Directors in accordance with
Article L. 225-37-2 of the French Commercial Code (paragraph 1) submitted to
the Ordinary Shareholders’ Meeting of May 26, 2017
Approval of the principles and criteria for the
determination, breakdown and allocation of the fixed,
variable and extraordinary components of the total
compensation (including in-kind benefits) attributable
to the Chairman and Chief Executive Officer
Voting under the conditions of quorum and majority required
for Ordinary Shareholders’ Meetings and in accordance with
Article L. 225-37-2 of the French Commercial Code, the shareholders
approve the principles and criteria for the determination, breakdown
and allocation of the fixed, variable and extraordinary components
of the total compensation (including in-kind benefits) attributable to
the Chairman and Chief Executive Officer, as detailed in the report
attached to the report referred to in Articles L. 225-100 and L. 225-
102 of the French Commercial Code, presented in the 2016
Registration Document (chapter 6, point 6).
142
TOTAL. Registration Document 2016
12. Responsabilité sociale, environ-
nementale et sociétale
Social, environmental
and societal information 7
Social, environmental
and societal information
1. Social information 145
1.1.
1.2.
1.3.
1.4.
1.5.
Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .145
Organization of work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .147
Dialogue with employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .148
Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .148
Equal opportunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .149
2. Safety, health and environment information 151
2.1.
2.2.
2.3.
Occupational health and safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .151
Environmental protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .153
Climate change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .157
3. Societal information 161
3.1.
3.2.
3.3.
3.4.
3.5.
3.6.
3.7.
A structured societal approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .161
Dialogue and involvement with stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .161
Controlling the impact of the Group’s activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .162
Creating local value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .163
Partnerships and philanthropy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .166
Contractors and suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .167
Fair operating practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .169
4. Reporting scopes and method 172
4.1.
4.2.
4.3.
4.4.
Reporting guidance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .172
Scopes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .172
Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .173
Details of certain indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .173
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
TOTAL. Registration Document 2016
143
7 Social, environmental and societal information
TOTAL puts Corporate Social Responsibility (CSR) at the heart of its
activities and conducts its operations according to the following
principles of:
– protecting the safety and security of people and its facilities;
– limiting its environmental footprint;
– ensuring that its Code of Conduct is applied in its sphere of
operations;
– incorporating the challenges of sustainable development in the
exercise of its activities;
– increasing its local integration by placing dialogue with its stakeholders
at the heart of its policy and contributing to the economic and
social development of the regions where the Group has operations
with the objective of creating shared value; and
– promoting equal opportunities and fostering diversity and cultural
mix among its personnel.
The Group’s CSR performance is measured by non-financial
rating agencies. TOTAL has been included continuously in the
FTSE4Good index (London Stock Exchange) since 2001 and in the
Dow Jones Sustainability World Index (DJSI World – New York
Stock Exchange) since 2004. TOTAL was listed in the DJSI Europe
in 2016.
In terms of reporting, TOTAL refers to the IPIECA (global oil and gas
industry association for environmental and social issues) guidance
and to the Global Reporting Initiative (GRI). Detailed information on
these reporting guidelines is available on the Group’s website
(sustainable-performance.total.com).
The reporting scopes and method concerning the information in
this chapter are presented in point 4 below. The data presented in
this section are provided on a current-scope basis.
TOTAL’s ambition is to become the responsible energy major by
supplying affordable energy to a growing population, taking the
issue of climate into consideration and meeting its customers’ new
expectations. In 2016, this 20-year ambition was reflected in the
One Total company project, which saw the introduction of a new
organization, fully effective on January 1, 2017 (also refer to point
1.3 in chapter 2). This new organization is reflected in particular by
the implementation of:
– a new Gas, Renewables & Power business segment, whose
President is a member of the Executive Committee, which
spearheads the Group’s ambitions in low-carbon and energy
efficiency businesses. This segment is also tasked with managing
the Total Energy Ventures investment fund and activities to
develop access to energy (Awango by Total);
– a Strategy-Innovation corporate division, which includes a
Strategy & Climate division tasked with incorporating climate
issues into the Group’s strategy; and
– a People & Social Responsibility corporate division, whose President
is a member of the Executive Committee, which includes a
Human Resources division focused on its strategic missions,
an HSE (Health Safety Environment) division bringing together
all the central HSE divisions of the business segments, whose
mission is to implement a strengthened HSE model, a Security
division and a new Civil Society Engagement division that
manages all the Group’s initiatives in this field.
TOTAL and the United Nations’ Sustainable
Development Goals
In 2015, the United Nations adopted the 17 Sustainable Development
Goals (SDGs). These goals acknowledge the decisive role
corporations can play in economic development and growth and
ask of them to show creativity and innovation in finding solutions to
global sustainable development challenges.
TOTAL is proactively committed to incorporating the SDGs into its
activities, especially in those areas where its activities have the greatest
impact or enable the Group to make a positive and differentiating
contribution. This is particularly true for the following topics:
– climate change (SDG 13): in May 2016, TOTAL published a
detailed report specifying how climate-related challenges are
integrated in its strategy, and setting a 20-year ambition that
takes into account the IEA’s 2°C scenario (refer to point 2.3
below). An update of this report will be published in May 2017;
– decent work and human rights (SDGs 8 and 16): in July 2016,
TOTAL became the first oil and gas company to publish a
detailed report specifying how the Group incorporates respect
for human rights in its activities. TOTAL strives to communicate
transparently and indicate which actions have been taken to rise
to the challenges the Group is facing (refer to point 3.7.2 below);
– access to energy (SDG 7): TOTAL’s ambition is to supply
affordable energy to growing populations (refer to point 3.4.5
below); and
– biodiversity (SDGs 14 and 15): TOTAL pursues an active policy
to reduce the environmental footprint of its activities by paying
particularly close attention to protected and sensitive zones
(refer to point 2.2.5 below).
In 2016, TOTAL has committed to developing an action plan
as promoted by the United Nations for implementing SDGs.
Information on the Group’s current contributions per SDG can
be found on the total.com site (Sustainable Performance page).
TOTAL is also working with the IPIECA to define a common
framework describing the contributions that the oil industry can
make to the SDGs.
The SDG pictograms are included in this chapter to illustrate
TOTAL’s contributions.
144
TOTAL. Registration Document 2016
Social, environmental and societal information 7
Social information
1. Social information
The quantitative information set out below regarding the Group’s employees worldwide covers all the entities that are fully consolidated (1) in
the Group’s financial statements. However, some of the data comes from the Group’s Worldwide Human Resources Survey (WHRS), which
gathers approximately 100 indicators measuring important aspects of TOTAL’s human resources policy. The WHRS is performed on a sample
of employees from representative consolidated companies at the business segment and regional levels; when WHRS is mentioned in this
document, reference is made to data related to this sample, which represents 87.5% of the Group’s employees at 135 subsidiaries in 2016,
a slight decrease compared to 2015 (91%) and 2014 (91%), due to the variation in the number of employees in the consolidated companies,
principally due to the acquisitions of Saft Groupe and Lampiris.
1.1. Employment
1.1.1. Group employees
As of December 31, 2016, the Group had 102,168 employees
belonging to 340 employing companies and subsidiaries located in
104 countries. The tables below present the breakdown of employees
by the following categories: gender, nationality, business segment,
region and age bracket.
Group registered headcount 2016 2015 2014
as of December 31,
Total number of employees 102,168 96,019 100,307
Women 32.4% 32.0% 31.1%
Men 67.6% 68.0% 68.9%
French 31.0% 31.2% 32.2%
Other nationalities 69.0% 68.8% 67.8%
Breakdown by business segment
Upstream
Exploration & Production 14.6% 17.1% 17.2%
Gas 1.2% 0.8% 1.1%
Refining & Chemicals
Refining & Chemicals 49.8% 49.6% 50.9%
Trading & Shipping 0.6% 0.6% 0.6%
Marketing & Services
Marketing & Services 20.4% 21.3% 21.2%
New Energies 11.5% 8.9% 7.4%
1.6%
Corporate 1.9% 1.7%
Group employees 2016 2015 2014
as of December 31,
Breakdown by region
France 31.1% 31.5% 32.5%
French overseas departments
and territories 0.4% 0.4% 0.3%
Rest of Europe 25.2% 24.5% 23.9%
Africa 9.9% 10.5% 10.2%
North America 7.1% 6.4% 6.6%
Latin America 11.8% 10.5% 9.7%
Asia 13.4% 14.8% 15.0%
Middle East 1.0% 1.3% 1.3%
Oceania 0.1% 0.1% 0.5%
(1) Refer to point 4.3.2 of this chapter.
(2) The Hay method is a unique reference framework used to classify and assess jobs.
(3) Employees present as defined in point 4.3.2 of this chapter.
Group employees 2016 2015 2014
as of December 31,
Breakdown by age bracket
< 25 years 7.0% 6.6% 6.3%
25 to 34 years 27.8% 28.8% 29.0%
35 to 44 years 29.3% 29.1% 29.1%
45 to 54 years 22.7% 22.6% 22.7%
> 55 years 13.2% 12.9% 12.9%
At year-end 2016, the countries with the most employees were
France, the United States, Mexico, Poland and China. The increase
in the number of employees between 2015 and 2016 was
principally due to the acquisitions of Saft Groupe and Lampiris. The
decrease in the number of employees between 2014 and 2015 was
due, on the one hand, to the policy of limiting recruitment in the Group’s
oil-related sector to face the decrease in the price of hydrocarbons
and, on the other hand, to divestments made during the year.
The breakdown by gender and nationality of managers or
equivalent positions ((cid:3) 300 Hay points (2)) is as follows:
Breakdown of managers 2016 2015 2014
or equivalent as of December 31,
Total number of managers 29,243 27,624 29,271
Women 25.5% 25.1% 24.5%
Men 74.5% 74.9% 75.5%
French 41.2% 39.1% 38.8%
Other nationalities 58.8% 60.9% 61.2%
The table below presents the breakdown by business segment of
the Group employees present (3).
Breakdown by business segment 2016 2015 2014
of the Group employees present
as of December 31,
Upstream
Exploration & Production 13,975 15,366 16,157
Gas 1,216 915 1,111
Refining & Chemicals
Refining & Chemicals 49,829 46,661 49,967
Trading & Shipping 604 563 567
Marketing & Services
Marketing & Services 20,402 19,923 20,682
New Energies 11,634 8,475 7,425
Corporate 1,951 1,568 1,551
Registration Document 2016. TOTAL
145
7 Social, environmental and societal information
Social information
1.1.2. Employees joining and leaving TOTAL
As of December 31, 2016 2015 2014
Total number hired on
open-ended contracts (a) 10,940 9,022 10,771
Women 36.9% 34.9% 33.2%
Men 63.1% 65.1% 66.8%
French 6.6% 6.5% 9.5%
Other nationalities 93.4% 93.5% 90.5%
(a) Recruitments in China, which represent 11.3% of 2016 recruitments, are long-term
contracts as defined by local law.
Amid an economic downturn related to oil prices, the policy of
limiting the hiring of employees under open-ended contracts that
began in 2015 continued in 2016. The increase in the consolidated
scope was mainly due to the 41% increase in Hutchinson’s hiring.
The regions in which the largest number of employees were hired
were Latin America (42.9%), Europe (excluding France) (19.5%)
and Asia (16.5%). In 2016, the fully consolidated Group companies
also hired 4,433 employees on fixed-term contracts. Close to
464,000 job applications were received by the companies covered
by the WHRS.
As of December 31, 2016 2015 2014
Total number of departures (a) 11,058 7,724 7,195
Deaths 90 128 108
Resignations 5,868 4,719 4,545
Dismissals / negotiated departures 4,958 2,754 2,413
Ruptures conventionnelles
(specific negotiated departure in France) 142 123 129
Total departures / total employees 10.8% 8% 7.2%
(a) Excluding retirements, transfers, early retirements, voluntary departures and expiration
of short-term contracts.
The increase in the number of departures from 2015 to 2016 was
mainly due to a high turnover in SunPower and Hutchinson.
1.1.3. Compensation
The Group’s Human Resources policy applies to all companies in
which TOTAL S.A. holds the majority of voting rights. In terms of
compensation, the aim of this policy is to ensure external
competitiveness and internal fairness, reinforce the link to individual
performance, increase employee share ownership and fulfill the
Group’s CSR commitments.
A large majority of employees benefit from laws that guarantee a
minimum wage, and, whenever this is not the case, the Group’s
policy ensures that compensation is above the minimum wage
observed locally. Regular benchmarking is used to assess
compensation based on the external market and the entity’s
competitive environment. Each entity’s positioning relative to its
reference market is assessed by the Human Resources department
of each business segment, which monitors evolutions in payroll,
turnover and consistency with the market.
Fair treatment is ensured within the Group through the widespread
implementation of a job level evaluation using a common method
(the Hay method), which associates a salary range to each job level.
Performance of the Group’s employees (attainment of set targets,
skills assessment, overall evaluation of job performance) is
evaluated during an annual individual review and formalized in
accordance with principles common to the entire Group.
The compensation structure of the Group’s employees is based on
the following components, depending on the country:
– a base salary, which each year, in addition to a general salary-
raise campaign, is subject to a merit-based salary-raise
campaign intended to compensate employees’ individual
performance according to the targets set during the annual
individual review, including at least one HSE (Health, Safety,
Environment) target; and
– individual variable compensation starting at a certain level of
responsibility, which is intended to compensate individual
performance (quantitative and qualitative attainment of previously
set targets) and the employee’s contribution to collective
performance evaluated among others according to HSE targets
set for each business segment, which represent up to 10% of
the variable portion. In 2016, 82.2% % of the Group’s entities
(WHRS scope) included HSE criteria in the variable compensation.
Complementary collective variable compensation programs
are implemented in some countries, such as France, via incentives
and profit-sharing that also incorporates HSE criteria. According to
the agreement signed for 2015-2017 applicable to the oil and
petrochemicals (1) (scope of more than 18,000 employees in 2016)
sector in France, the amount available for employee incentive is
determined based on financial parameters (the Group’s return on
equity and the evolution of the net adjusted income compared to
the other major oil companies (2)) and the attainment of safety
targets (injury rate and accidental deaths).
The Group also offers employee benefit and pension programs
(health, death and pension) based on a single standard of coverage
at the Group level. These programs, which supplement those that
may be provided for by local regulations, allow each employee to:
– benefit, in case of illness, from coverage that is at least equal to
the median amount for the national industrial market;
– save or accumulate income substitution benefits for retirement;
and
– arrange for the protection of family members in case of the
employee’s death via insurance that provides for the payment of
a benefit recommended to equal two years’ gross salary. This
program was made available to 91% of the workforce in 2016
(WHRS scope).
These programs are reviewed on a regular basis and adjusted
when necessary.
Employee shareholding, one of the pillars of the Group’s human
resources policy, is extended via three main mechanisms: the grant
of performance shares, share capital increases reserved for
employees, and employee savings. In this way, TOTAL wishes to
encourage employee shareholding, strengthen their sense of
belonging to the Group and give them a stake in the Group’s
performance by allowing them to benefit from their involvement.
(1) In 2016, it includes the following Upstream, Refining & Chemicals and Marketing & Services companies in France: TOTAL S.A., Elf Exploration Production, Total Exploration Production France,
CDF Énergie, Total Marketing Services, Total Marketing France, Total Additifs et Carburants Spéciaux, Total Lubrifiants, Total Fluides, Total Raffinage-Chimie, Total Petrochemicals France,
Total Raffinage France and Total Global Information Technology Services. As of January 1, 2017, this scope also includes the following companies: Total Global Financial Services, Total Global
Procurement, Total Global Human Resources Services, Total Learning Solutions, Total Facilities Management Services, and Total Consulting.
(2) ExxonMobil, Royal Dutch Shell, BP and Chevron.
146
TOTAL. Registration Document 2016
Social, environmental and societal information 7
Social information
will give holders current dividend rights. The subscription period will
close at the end of March 2017.
The previous operation took place in 2015. Approximately 42,000
employees in 102 countries participated in this share capital
increase, which resulted in the subscription of 10,108,918 shares at
a price of €37.50 per share.
In addition, at its meeting on July 27, 2016 the Board of Directors
of TOTAL S.A. approved an ambitious employee shareholding
policy and, in particular, the principle of a share capital increase
reserved for employees each year rather than every two to three
years, as was previously the case.
Employee savings are also developed via the TOTAL Group
Savings Plan (PEGT) and the Complementary Company Savings
Plan (PEC), both open to employees of the Group’s French
companies that have subscribed to the plans under the agreements
signed in 2002 and 2004 and their amendments. These plans allow
investments in a wide range of mutual funds, including the TOTAL
ACTIONNARIAT FRANCE fund that is invested in TOTAL shares.
A Collective Retirement Savings Plan (PERCO) is open to employees
of the Group’s French companies covered by the 2004 Group
agreement on provisions for retirement savings. Other saving plans
and PERCO are open in some French companies covered by
specific agreements. Employees can make discretionary
contributions in the framework of this various plans, which the
Group’s companies may supplement under certain conditions
through a matching contribution. The Group’s companies made
gross matching contributions that totaled €70 million in 2016.
WHRS WHRS WHRS
2016 2015 2014
% of companies offering the option
of teleworking 18.5% 17.2% 16%
% of employees involved in teleworking
of those given the option 3.4% 2.5% 2.1%
The sickness absenteeism rate is one of the indicators monitored
in the WHRS:
WHRS WHRS WHRS
2016 2015 2014
Sickness absenteeism rate 2.4% 2.1% 2.3%
Each year since 2005, TOTAL has granted performance shares to
many of its employees (approximately 10,000 each year since
2009). The definitive granting of these shares depends on the
fulfillment of performance conditions assessed at the end of a
vesting period extended to three years in 2013 (refer to point 4 of
chapter 6). The last plan approved by the Board of Directors of
TOTAL S.A. in July 2016 granted nearly a 20% higher volume of
performance shares and ensured a significant replenishment rate:
40% of plan beneficiaries had not received performance shares the
previous year. More than 10,000 non-senior executive employees
were concerned by this plan, namely 97% of the beneficiaries.
The Group also regularly invites its employees to subscribe to
capital increases reserved for employees through a Shareholder
Group Savings Plan (PEG-A) created in 1999 for this purpose.
Depending on the offerings chosen and the employees’ location,
these operations are completed either through Company Savings
Plans (1) (FCPE) or by subscribing directly for shares or for American
Depositary Receipts (ADR) in the United States.
Pursuant to the authorization given by the Annual Shareholders’
Meeting of May 24, 2016, at its meeting on July 27, 2016 the
Board of Directors of TOTAL S.A. approved the principle of a share
capital increase reserved for employees to be completed in 2017.
This operation concerns approximately 110 countries. As in 2015,
two offerings are proposed: a traditional scheme with a 20%
discount and a leveraged scheme in all countries where permitted
by law. Employees will receive a matching contribution of five free
shares for the first five shares subscribed. The shares subscribed
1.2. Organization of work
The average work week is determined in accordance with applicable
local law and limits set by International Labour Organization (ILO)
conventions. It is less than 40 hours in most subsidiaries located in
Europe, Japan and Qatar. It is 40 hours in most subsidiaries located
in Asian, African and North American countries. It is above 40 hours,
without exceeding 48 hours, in subsidiaries located in Latin America
(mainly Argentina, Mexico, Brazil), a few countries in Asia (India,
Cambodia, Philippines) and Africa (mainly South Africa, Equatorial
Guinea and Morocco).
In addition, there are two specific employment regimes within
the Group, the “shift” (2) regime and the “rotational” (3) regime.
Most shift workers are employed in the Refining & Chemicals and
Marketing & Services business segments, while the rotational
regime concerns the Upstream segment.
Depending on local law, there are several programs that aim to
create a better balance between work and private life and / or
encourage equal career opportunities. In France, teleworking was
introduced in 2012. As of December 31, 2016, the number of
teleworkers in France (WHRS scope) was 746, 33% of whom were
men, compared to 454 in 2015 and 346 in 2014.
(1) TOTAL ACTIONNARIAT FRANCE, TOTAL FRANCE CAPITAL+, TOTAL ACTIONNARIAT INTERNATIONAL CAPITALISATION, TOTAL INTERNATIONAL CAPITAL.
(2) For employees providing a continual activity with relays between alternating teams to maintain production (two or three 8-hour shifts), for example in plants or refineries.
(3) For employees working at a location (town or worksite) far from their place of residence with alternating periods of work and rest.
Registration Document 2016. TOTAL
147
7 Social, environmental and societal information
Social information
1.3. Dialogue with employees
In 2015, TOTAL signed a global agreement with the worldwide
trade union federation, IndustriALL Global Union, which represents
50 million employees in 140 countries. Under this agreement, the
Group made a commitment to maintain minimum Corporate Social
Responsibility (CSR) standards and guarantees worldwide for
subsidiaries in which it has more than a 50% stake, in the areas of
occupational health and safety, human rights in the workplace,
enhancement of the dialogue with employees, life insurance,
professional equality, social responsibility and assistance with
organizational changes. The Group also ensures that the principles
of the agreement on health, safety and human rights are disclosed
to and promoted among its service providers and suppliers.
The implementation of this agreement is monitored annually with
representatives who are members of trade unions affiliated with the
IndustriALL Global Union and appointed by this federation. An initial
follow-up meeting was therefore held in April 2016 to assess the
implementation of the agreement and identify certain areas of
improvement and actions to be taken.
A European Committee (single representative body for the
employees at the Group level) has been set up in order to inform
employees and hold discussions on the Group’s strategy,
its social, economic and financial situation, as well as questions of
sustainable development, environmental and societal responsibility,
and safety on a European scale. It also examines any significant
proposed organizational change concerning at least two
companies in two European countries, to express its opinion,
in addition to the procedures initiated before the national
representative bodies.
In addition, every other year, TOTAL carries out an internal survey
(Total Survey) among its employees to gather their views and
expectations with regard to their work situation and perception of
the Company, locally and as a Group. The results of the survey
conducted in 2015 among 65,000 employees at 508 entities
in 115 countries demonstrated that employees have a commitment
rate of 75% and that 87% of them are proud to work for TOTAL.
Among the numerous stakeholders with which TOTAL maintains
regular dialogue (refer also to point 3.2 of this chapter), the Group’s
employees and their representatives have a privileged position and
role, particularly in constructive discussions with management. In
countries where employee representation is not required by law (for
example in Myanmar and Brunei), 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 some are shared throughout, such as health and safety, work
time, compensation, training and equal opportunity.
Within the Group, organizational changes are made in consultation
with the employee representatives. For example, implementation of
the One Total company project was preceded by a participatory
process (via workshops involving over 2,500 employees). This was
also true of the Group’s new organization (refer to point 1.3 of
chapter 2), which resulted in the transfer of numerous activities and
positions (approximately 1 200 employees affected) and was based
on a constructive social dialogue. This dialogue led to agreements
aimed at supporting organizational change and equipping the new
companies created within this framework with social programs.
In addition, 330 agreements were signed in 2016 with employee
representatives around the world, including 245 in France, (1)
covering in particular retirement, employee savings, teleworking and
compensation systems.
WHRS WHRS WHRS
2016 2015 2014
Percentage of companies
with employee representation 78.5% 76.9% 75.5%
Percentage of employees
covered by collective agreements 68.9% 65.5% 67.8%
1.4. Training
The Group has four priorities in the field of training:
– sharing TOTAL’s corporate values, particularly with respect to
HSE and ethics;
– increasing key skills in all business areas to maintain a high level
of operating performance;
– promoting employees’ integration and career development
through Group induction and training on management and
personal development; and
– supporting the policy of diversity and mobility within the Group
through language and intercultural training.
The Group’s training efforts were still significant in 2016, with 79%
of employees having taken at least one training course during the
year. Within the WHRS scope, 274,858 days of training were
offered on-site, compared to 289,000 days in 2015, for a total
training budget of approximately €164 million, compared to
€170 million in 2015 and €235 million in 2014. This decrease
between 2015 and 2016 was due to the increase in online training
courses, which are gradually being combined with or replacing on-
site courses as part of the Group’s e-learning program, and to the
combined effect of optimizing the length of training courses and
improving training selection in order to be in line with priorities.
The digitalization within the Group, which began in 2015, aims to
improve the effectiveness of the courses and impact the largest
number of people as quickly as possible. It was accompanied by
the launch in 2016 of a digital passport program to support the
Group’s goals in this area, and nearly 12,000 people have already
obtained this passport. Approximately 42,000 people received
online training in 2016 and in 2015, compared to 30,000 in 2014.
(1) Some agreements cover several companies at once (for example, agreements in the Social and Economic Units or group of companies).
148
TOTAL. Registration Document 2016
Social, environmental and societal information 7
Social information
In addition, Total University offers Group integration programs as
well as courses aimed specifically at developing leadership among
executive officers and managers. Total University also offers specific
theme-based conferences, some of which are open to external
audiences. These conferences cover strategic topics in the field of
energy ranging from technology to geopolitics and societal matters.
Average number of training days / year per employee WHRS 2016 WHRS 2015 WHRS 2014
(excluding “Companion” apprenticeships and e-learning) (a)
Group average 3.2 3.3 4.2
By segment
Upstream 5.9 7.0 9.2
Exploration & Production 6.2 7.2 9.5
Gas 2.0 4.2 2.7
Refining & Chemicals 2.7 2.3 3.5
Refining & Chemicals 2.7 2.3 3.6
Trading & Shipping 1.7 1.4 2.0
Marketing & Services 2.4 2.8 2.2
Marketing & Services 2.5 2.4 2.9
New Energies 1.9 3.8 0.3
Corporate 2.6 2.6 3.0
By region
Africa 5.2 5.5 7.6
North America 3.0 1.1 3.1
Latin America 2.8 3.7 5.3
Asia-Pacific 3.6 4.9 4.6
Europe 2.8 2.7 3.5
Middle East 4.8 2.9 6.9
Oceania 0.4 0.7 0.1
French overseas departments and territories 1.7 3.2 1.6
Breakdown by type of training given
Technical 38% 37% 35%
Health, Safety, Environment, Quality (HSEQ) 23% 22% 21%
Language 8% 11% 14%
Other (management, personal development, intercultural, etc.) 31% 30% 30%
(a) This number is calculated using the number of training hours, where 7.6 hours equal one day.
1.5. Equal opportunity
TOTAL is an international Group in terms of both its operations and
its team members. The diversity of its employees and management
is crucial to the Group’s competitiveness, innovative capacity and
attractiveness.
For this reason, TOTAL develops its employees’ skills and careers
while prohibiting any discrimination related to origin, gender, sexual
orientation or identity, disability, age or affiliation with a political, labor
or religious organization. This policy is upheld by the Diversity Council,
which is chaired by a member of the Group’s Executive Committee.
Each entity is responsible for defining its own areas of focus based
on the legal context and its challenges and for creating a suitable
work environment to fully benefit from skills and diverse approaches.
This on-the-ground commitment combined with leadership at the
highest level ensures that all employees, regardless of their gender
or nationality, are offered the same career opportunities. The
Group’s target for 2020 is:
– women represent 25% of senior executives (having represented
approximately 5% in 2004 and 19.9% in 2016);
– non-French nationals represent 40% of senior executives (having
represented approximately 19% in 2004 and 28.2% in 2016);
– women represent more than 20% of Management Committee
members (head office and subsidiaries) (having represented
approximately 20% in 2016); and
– local managers represent 50% to 75% of the subsidiaries’
Management Committee members (having represented 54% in
2015 and 2016).
1.5.1. Equal treatment for men and women
In 2010, TOTAL signed the “Women’s Empowerment
Principles – Equality Means Business” set out in the United Nations
Global Compact, and its commitment to equal treatment of men
and women is regularly embodied in agreements, such as the
global agreement signed in 2015 with IndustriALL (refer to point 1.3
of this chapter). Specific measures are taken to correct
discrepancies, such as salary equality (review and adjustment of
compensation in 2013 and again in 2015) and teleworking to
improve employees’ work-life balance.
Registration Document 2016. TOTAL
149
7 Social, environmental and societal information
Social information
In 2016, TOTAL, along with 20 other oil and gas companies, made
a commitment at the World Economic Forum by signing “Closing
the Gender Gap – a Call to Action”. This joint declaration is based
on seven action principles: involvement of management;
expectation and goal setting; program dedicated to the fields of
Science, Technology, Engineering and Mathematics (STEM); clear
responsibilities; recruitment, retention and promotion policy; inclusive
corporate culture; and work environment and work-life balance.
The Group also promotes gender diversity in its professions. In
France, TOTAL has partnered with “Elles bougent” since 2011 and
served as honorary Chairman in 2015. Some 130 female engineers
regularly inform high-school girls about careers in science. An event
entitled “Elles bougent pour l’énergie” was attended by more than
2,000 participants throughout France.
In line with the goal of increasing the number of women in positions
of responsibility, the TWICE network (Total Women’s Initiative for
Communication and Exchange) aims to promote career development
for women and train and educate men and women about gender
diversity. Created in 2006, it is currently in place in France and
abroad (19 local networks) and has over 3,000 members. As part
of this network, a mentoring program is deployed internationally,
and has benefited nearly 500 women since 2010.
TOTAL also participates in the “BoardWomen Partners” program, which
aims to increase the proportion of women on boards of directors in
large European companies. At the end of 2016, women (1) accounted
for 54.5% of TOTAL S.A.’s Board members (above the 40% required
by Article L. 225-18-1 of the French Commercial Code) compared
to 36.4% at the end of 2015 and 38.5% at the end of 2014.
% of women 2016 2015 2014
Open-ended contract recruitment 36.9% 34.9% 33.2%
Managers (JL (cid:3)10 (a)) recruitment 29.7% 30.6% 27.6%
Employees 32.4% 32.0% 31.1%
Managers (JL (cid:3)10) (a) 25.5% 25.1% 24.5%
Senior executives 19.9% 18.6% 17.6%
(a) Job Level of the position according to the Hay method. JL10 corresponds to junior
manager (cadre débutant).
1.5.2. Internationalization of management
With employees representing over 150 nationalities, TOTAL enjoys
broad cultural diversity and believes that it is important to reflect this
at all levels of its activities. In 2016, 93.4% of employees hired by
the Group and 75.3% of managers hired were non-French nationals.
Several measures have been put in place to internationalize
management, including training courses to internationalize careers,
increasing the number of foreign postings for employees of all
nationalities (nearly 4,300 employees of 108 nationalities are posted
in 114 countries as of June 30, 2016), and integration and personal
development training organized by large regional hubs (such as
Houston, Johannesburg and Singapore).
% of employees 2016 2015 2014
of non-French nationality
Open-ended contract recruitment 93.4% 93.5% 90.5%
Managers (JL (cid:3)10) recruitment (a) 75.3% 76.3% 75.8%
Employees 69.0% 68.8% 67.8%
Managers (JL (cid:3)10) (a) 58.8% 60.9% 61.2%
Senior executives 28.2% 27.9% 27.2%
(a) Job Level of the position according to the Hay method. JL10 corresponds to junior
manager (cadre débutant).
1.5.3. Measures promoting the employment
and integration of people with disabilities
For over 20 years, TOTAL has expressly set out its disability policy
in France through successive agreements signed with employee
representatives to promote the employment of workers with
disabilities. Three framework agreements signed for three years
(2016-2018) with the French representative unions set out TOTAL’s
policy with regard to integrating people with disabilities into the work
world. The average Group employment rate of people with disabilities
in France (direct and indirect employment) was 4.99% in 2015 (2)
(compared to 4.74% in 2014 and 4.27% in 2013).
TOTAL promotes the direct recruitment of disabled people and
cooperation with the sector for disabled workers, while at the same
time taking various types of action:
– internally: integration, professional training, support and job
retention, communication, awareness sessions organized
for managers and teams, Human Resources managers, etc.; and
– externally: information and advertising aimed at students,
cooperation with recruitment agencies, attendance at specialized
forums, etc.
1.5.4. Measures promoting non-discrimination
Large-scale initiatives aimed at raising employees’ awareness of
diversity are organized on a regular basis. After Berlin in 2015 and
Singapore in 2014, in 2016 the Group’s Diversity Council, led by
Momar Nguer, President of Marketing & Services and member of
the Executive Committee, met with some 60 senior executives from
16 countries in South Africa to secure their commitment to pursue
their actions in the areas of diversity and inclusion. The most recent
World Diversity Day, which takes place every two years, was
celebrated in 2015 at more than 180 Group sites around the theme
“Diversity makes us better”.
TOTAL is involved in a number of initiatives to promote diversity,
including the professional integration of young people in France, for
example via the “La France s’engage” partnership with the French
government (refer to point 3.5.2 of this chapter).
In 2014, the Group also signed the LGBT (lesbian, gay, bisexual
and transgender) Charter. This document, prepared by the L’Autre
Cercle association, establishes a framework for combating
discrimination related to sexual orientation or identity in the
workplace in France.
(1) Excluding the director representing employees, in accordance with Article L. 225-27-1 of the French Commercial Code.
(2) The rate for 2016 was not available at the time of the publication of this Registration Document.
150
TOTAL. Registration Document 2016
Social, environmental and societal information 7
Safety, health and environment information
2. Safety, health and environment information
In line with its Code of Conduct, TOTAL has adopted a Safety Health Environment Quality Charter on which the Group relies for the conduct
of its operations (available on total.com). This Charter represents the common framework of the Group’s management systems. Group
directives define the minimum requirements expected in the areas of safety, security, health, the environment, quality and societal, and are
implemented in the business segments, which subsequently factor in the specific characteristics of their operations. Recommendations,
guides and manuals, which are the primary documents used for implementing and managing the Group’s policies, are regularly distributed
within the different business segments. The HSE division supports the Group business segments and oversees the implementation of the
policies that reflect the HSE principles of this charter concretely and effectively.
2.1. Occupational health and safety
For many years, the Group has been developing a normative
framework related to occupational health and safety, security,
societal commitment and the environment. TOTAL implements
management systems in these areas (MAESTRO). In this respect,
directives have been drawn up for occupational health and safety.
These directives set out TOTAL’s requirements in these areas for
personnel working on its sites. Since 2013, the Group’s business
segments have increased their efforts regarding the frameworks of
the HSE management systems in order to provide greater overall
consistency, while at the same time respecting the businesses’
specific characteristics.
The Group’s safety efforts are focused on preventing occupational
and transport accidents, and on preventing major accidents and
accidental spills (refer to point 2.2.2 of this chapter and to point 4 of
chapter 4). They cover both TOTAL employees and employees of
external contractors, whose safety indicators are monitored with
the same vigilance as those concerning TOTAL’s personnel.
Indicators are used to measure the main results in these areas.
Monthly reporting of occupational accidents is used to monitor
performance at both the global and site levels.
Safety indicators 2016 2015 2014
TRIR (a): number of recorded injuries
per million hours worked 0.91 1.17 1.30
Employees of TOTAL 0.83 0.92 1.06
Employees of external contractors (b) 0.99 1.38 1.51
LTIR (c): number of lost time injuries
per million hours worked 0.51 0.66 0.74
SIR (d): average number of days
lost per lost time injury 30.23 30.11 29.74
Number of occupational fatalities 1 9 9
(a) TRIR: Total Recordable Injury Rate.
(b) As defined in point 4.4.1 of this chapter.
(c) LTIR: Lost Time Injury Rate.
(d) SIR: Severity Injury Rate.
For more than 10 years, the TRIR and the LTIR have declined
continuously. In 2016, the Group regrettably recorded one accident
that led to a fatality. The measures adopted in 2015 have helped to
improve the safety of employees working for external contractors.
These measures continue to be deployed, with a view to strengthening
and sharing safety values throughout and outside the Group.
Safety is the subject of regular training activities, in particular at
management level (refer to point 2.2.1 below), as well as of a policy
that recognizes HSE performance, in particular by taking account
safety-related criteria in the calculation of compensation (refer to
point 1.1.3 above).
Since 2010, the basic rules to be scrupulously followed by all
personnel, employees and contractors alike, in all of the Group’s
businesses worldwide, have been set out in a safety document
entitled “Safety at Work: TOTAL’s Twelve Golden Rules”.
According to the Group’s internal statistics, in 2016, in more than
90% of severe incidents or near misses with high severity potential
in the workplace, at least one of the golden rules had not been
followed. The proper application of these golden rules, and more
generally of all occupational safety procedures, is verified through
site visits and internal audits. An e-learning tool has been
developed to train the personnel in the 12 golden rules and was
rolled out in 2016. An update of these rules, prepared in 2016, will
be deployed in April 2017, on the occasion of the World Safety Day.
For simplicity’s sake, the decision was taken to reformulate the
golden rules as do’s and don’ts. This more operational approach
should improve the adoption of the rules and make it easier to
control their application.
One of the priority programs launched in 2016 to improve long-term
safety performance was focused on strengthening the control of
the activity of employees working for external contractors, who are
statistically the main victims of accidents. In 2016, the Group
launched a program of regular meetings with the management of
external contractors. These safety meetings are organized both on
the sites and in the subsidiaries for local contractors, and at Group
level for some international contractors.
Moreover, the reporting of anomalies (895,000 in 2016) and near
misses is strongly encouraged and monitored. The ability of each
employee to identify anomalies or dangerous situations is one of
the measures of the personnel’s involvement and vigilance in
accident prevention and reflects the safety culture within the Group.
An investigation is generally launched in response to any type of
accident whatsoever. The method and scope of investigation
depend on the actual or potential severity of the event. For example,
a near miss with a high severity potential level is treated in the same
way as a severe incident: its analysis is considered to be a key
driving force for progress and, depending on its relevance to the
Group’s other entities, triggers a safety alert and even the
dissemination of a feedback report.
Registration Document 2016. TOTAL
151
7 Social, environmental and societal information
Safety, health and environment information
With respect to transport safety, the Group constantly strives to
improve its performance in terms of road accidents. The actions
taken in recent years have helped decrease the severe accident
rate by 40% between 2013 and 2016, with a focus on measures
in Africa and the Middle East zone of Marketing & Services.
These actions rely, in particular, on inspections of transporters.
The program was also rolled out in three Asian pilot countries
where Marketing & Services is present (Cambodia, India and
Pakistan), and it will gradually be extended to other subsidiaries
in Asia-Pacific in 2017.
Along with 21 other major French companies, the Group also
responded to the national call in favor of occupational road safety.
TOTAL has been investing in this issue for a long time, and even
goes beyond some of the commitments stated in the call by taking
actions for its employees all over the world, in addition to the
requirements of local regulations. By way of example, the Group
expressly forbids the use of mobile phones while driving.
In 2016, the Group-wide coordination for safety in marine and
inland waterway terminals was reinforced. The training in the Ship
Shore Safety Check List of the International Safety Guide for Oil
Tankers and Terminals, which covers the movement of products
during loading and unloading operations of ships or barges, a
particularly sensitive phase, was promoted at the last safety
seminar for the European operators of marine and inland waterway
terminals in Vlissingen (the Netherlands) in September 2016. More
than 300 terminal operators have been trained.
With regards to health, the Group has drawn up a policy to define
TOTAL’s minimum requirements in terms of the prevention of
industrial risks to health and the protection of workers.
In particular, based on the Directive on industrial hygiene and
occupational health, the Group’s companies are expected to
prepare and carry out a formal risk assessment (chemical, physical,
biological, ergonomic or psychosocial), create a risk management
action plan and provide medical monitoring of staff in line with the
risks to which they are exposed.
The Group monitors the following indicators in this area:
Health indicators (WHRS scope) 2016 2015 2014
Percentage of companies offering
employees regular medical monitoring 99.3% 99.3% 97.3%
Number of occupational illnesses
recorded in the year (in accordance
with local regulations) (a) 108 145 200
(a) In 2016, the number of occupational illnesses was collected for companies replying to
the WHRS in order to improve consistency between social and health data. In addition,
this indicator, which was reported as a ratio of hours worked, is now expressed as an
absolute figure.
Reporting on occupational illnesses covers only the Group’s
personnel (WHRS scope) and illnesses reported according to the
regulations applicable in the country of operation of each entity.
Musculoskeletal disorders, the main cause of occupational
illnesses, represented 64% of all recorded illnesses in 2016, stable
compared to 2015.
A Medical Advisory Committee meets regularly to discuss key
health issues that may affect the Group’s employees. It consists of
external scientific experts and brings together TOTAL’s
management team and the relevant members of the Group. This
Committee provides scientific monitoring of health problems that
could impact the Group, thus enabling the best health protection
strategies to be put in place when necessary.
In support of the Group’s health policy and to complement the
periodic medical surveillance program currently in place and
organized by the Group’s medical staff, an employee health
observatory has also been set up. This observatory aims at
establishing health indicators for keeping track over the long term of
any medical conditions that could affect employees using a
population-based approach. This program can be used to quickly
identify the emergence of certain illnesses and, if applicable,
suggest and oversee appropriate preventive measures.
Approximately 13% of the Group’s employees worldwide, whatever
their position, age or horizon, took part anonymously in this
program, thereby providing a representative sample of the Group’s
different business segments and professions, including
administrative as much as operational staff.
The study entitled Sleep, shift work and cardio-metabolic illnesses
was initiated on the basis of the findings of the TOTAL health
observatory. The study covered the employees on four
Refining & Chemicals industrial sites in France (Carling, Donges,
La Mède and Normandy) and was conducted in collaboration with
the occupational health departments on each site. The results are
expected to be published in 2017.
On a broader level, TOTAL is associated with promoting individual
and collective health in the countries where it operates, including flu
vaccination campaigns and prevention and screening programs for
certain diseases (AIDS, cancer, malaria, Ebola, etc.) for employees,
their families and local communities. For several years, awareness
campaigns have also been in place concerning, for example,
musculoskeletal disorder prevention and lifestyle risks (anti-smoking
and anti-drinking campaigns).
152
TOTAL. Registration Document 2016
Social, environmental and societal information 7
Safety, health and environment information
2.2. Environmental protection
2.2.1. General policy and environmental targets
The HSE division and the HSE departments within the Group’s
entities seek to ensure that both applicable local regulations and
internal minimum requirements are being met. The Group steering
bodies, led by the HSE division, have a threefold task:
– monitoring TOTAL’s environmental performance, which is
reviewed annually by the Executive Committee, for which multi-
annual improvement targets are set;
– handling, in conjunction with the business segments, the various
environment-related subjects under their responsibility; and
– promoting the internal standards to be applied by the Group’s
operational entities as set out in the Safety Health Environment
Quality Charter.
The Group defined in early 2016 a new set of coherent
environmental targets aligned with the 2010-2020 period:
– continue its efforts to reduce greenhouse gas (GHG) emissions,
particularly through:
1. an 80% reduction of routine flaring (1) with the aim to eliminate it
by 2030, and
2. an average 1% improvement per year in the energy efficiency
of the Group’s operated facilities;
– decrease SO2 air emissions by 50%; and
– maintain hydrocarbon content of water discharges below 30 mg / l
for offshore sites and below 15 mg / l for onshore and coastal
sites.
operations started in 2016, are expected to be certified in 2017.
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 (also refer
to point 4.3.1 of chapter 4).
TOTAL seeks to ensure that all employees share its environmental
protection requirements. Employees receive training in the required
skills. TOTAL also raises employee awareness through internal
communication campaigns (e.g., in-house magazines, intranet,
posters) and provides annual information about the Group’s
environmental performance.
Training courses are organized for managers and senior executives.
In 2016, 48 training sessions were attended by more than 800
participants in 1899 training days across 11 countries. Three HSE
training courses are made available to the operational entities: “HSE
for Managers”, “HSE Implementation” and “HSE Leadership for
Group Senior Executives”. The training session “HSE for Managers”
is aimed at senior managers and operational or functional
managers who are currently or will in the future be responsible for
one of the Group’s operational entities (five sessions were held in
2016 with 253 participants). “HSE Implementation” sessions are
aimed at employees whose job is specifically to handle one or more
HSE or operational areas within an operational entity (one session
was held in 2016 with 10 participants). This offer completes an
existing course for the same target population provided by the
Group’s business segments. In addition, the “HSE Leadership for
Group Senior Executives” course focusing on management styles
has been organized since 2012. Since 2012, close to 260 senior
executives have taken part in this program.
TOTAL’s performance in relation to these targets is detailed in the
following sections.
2.2.2. Incident risk
In addition, the Group:
– develops biodiversity action plans for production sites located in
protected areas (2);
– does not conduct oil and gas exploration or production
operations at natural sites included on the UNESCO World
Heritage List (3) or in oil fields under sea ice in polar areas; and
– reclaims more than half of its waste and intends to continue its
efforts in this area.
TOTAL has a goal of progressively lowering the carbon intensity of
its energy mix.
The environment management systems on TOTAL’s major sites are
ISO 14001 certified: 100% of the 69 production sites emitting more
than 10 kt of GHG per year (excluding start-ups or newly acquired
sites, which have two years to be certified) are ISO 14001 certified.
Overall, at year-end 2016, 279 sites had ISO 14001 certification.
The CLOV site in Angola, which started up in 2015, was ISO 14001
certified in 2016. Group rules require certification to be obtained
within two years of start-up of operations; accordingly, the Laggan-
Tormore (United Kingdom) and Incahuasi (Bolivia) sites, where
The Group has management structures and systems that present
similar requirements and expectations across all the entities. TOTAL
strives to minimize the potential impacts of its operations on
people, the environment and property through a major risk
management policy. This policy draws on a shared approach that
includes, on the one hand, risk identification and analysis, and on
the other hand, the management of these risks.
This structured approach applies to all of the Group’s operated
businesses exposed to major risks. In addition to its drilling and
pipeline transport operations, the Group has 222 sites and
operating zones corresponding to:
– the Seveso classified industrial sites (upper and lower threshold)
and their equivalents (excluding Exploration & Production)
outside the EU; and
– all the offshore and onshore operating activities in
Exploration & Production.
(1) Routine flaring, as defined by the working group of the Global Gas Flaring Reduction program within the framework of the World Bank’s Zero Routine Flaring initiative.
(2) Sites located in a IUCN I to IV or Ramsar convention protected area.
(3) Natural sites included on the UNESCO World Heritage List of June 4, 2013.
Registration Document 2016. TOTAL
153
7 Social, environmental and societal information
Safety, health and environment information
This approach first sets out an analysis of the risks related to these
industrial operations based on incident scenarios for which the
probability of occurrence and the severity of the consequences are
assessed.
Second, based on these parameters, a prioritization matrix is used
to determine whether further measures are needed in addition to
compliance with the Group’s standards and local regulations. These
mainly include preventive measures but can also include mitigation
measures.
The management of major risks also hinges on:
– staff training and raising awareness (refer to point 2.2.1 of this
chapter);
– a coherent event reporting and indicators system;
– systematic, structured event analysis, particularly to learn lessons
in terms of design and operation; and
– regularly tested contingency plans and measures.
In terms of monitoring indicators, the Group reports the number
of Tier 1 and Tier 2 events as defined by the API and the IOGP.
A significant reduction in the number of losses of primary containment
was observed in comparison to 2015. In addition to the 38 Tier 1
operational events indicated in the table below, the Group recorded
one other Tier 1 event due to sabotage or theft in 2016.
Loss of primary containment 2016 2015 2014
Loss of primary containment (Tier 1) (a) 38 51 39
Loss of primary containment (Tier 2) (a) 101 111 129
(a) Excluding acts of sabotage and theft.
In accordance with industry best practices, TOTAL also monitors
accidental liquid hydrocarbon spills of more than one barrel. Spills
that exceed a predetermined severity threshold (in terms of volume
spilled, toxicity of the product in question or sensitivity of the natural
environment affected) are reviewed on a monthly basis and annual
statistics are sent to the Group Performance Management
Committee. All accidental spills are followed by corrective actions
aimed at returning the environment to its original state as quickly as
possible.
Accidental hydrocarbon spills (a) 2016 2015 2014
Number of hydrocarbon spills 73 128 129
Total volume of hydrocarbon spills
(thousands of m³) 0.9 1.4 1.3
(a) Accidental spills with an environmental impact and of more than one barrel.
In addition, the Group has set up a crisis management process with
a dedicated organization (also refer to point 4.3.1 of chapter 4) and
a crisis management center at the head office to enable the
management of two simultaneous crises. As part of this process,
TOTAL regularly trains in crisis management on the basis of risk
scenarios identified through analyses. In particular, the Group has
response plans and procedures in place in the event of a
hydrocarbon leak or spill. For accidental spills that reach the
surface, oil spill contingency plans are regularly reviewed and tested
during exercises. These plans are specific to each company or site
and are adapted to their structure, activities and environment while
complying with Group recommendations.
Oil spill preparedness 2016 2015 2014
Number of sites whose risk
analysis identified at least one
scenario of major accidental
pollution to surface water 141 167 155
Proportion of those sites with an
operational oil spill contingency plan 99% 98% 90%
Proportion of those sites
that have performed at least
one oil spill response exercise
during the year 89% (a) 98% 82%
(a) Decrease in 2016 compared to 2015 corresponds mainly to three affiliates which
postponed their exercices to 2017.
A Plan to Mobilize Resources Against Pollution (Parapol) is available
to the Group’s companies, which also have assistance agreements
with the main third-party bodies specializing in hydrocarbons spill
management (refer to point 4.3.1 of chapter 4).
Subsea capping and subsea containment equipment has been
installed at different points of the world (South Africa, Brazil,
Singapore and Norway) since 2014 in order to provide solutions
that can be deployed rapidly in the event of oil or gas eruptions in
deep offshore drilling operations. This equipment was developed by
a group of nine oil companies, including TOTAL, and is managed by
Oil Spill Response Ltd (OSRL), a cooperative dedicated to the
response to marine pollution by hydrocarbons.
TOTAL has also designed and developed its own “Subsea Emergency
Response System” to stop potential eruptions in drilling or
production operations as quickly as possible. Equipment has been
in place in Angola since 2015, and the in the Republic of Congo
since 2016, potentially covering the entire Gulf of Guinea region.
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 consisting of the main global oil
companies that promotes best practices in oil shipping, and on its
Ship Inspection Report (SIRE) Program. TOTAL does not charter
any single-hulled vessels for shipping hydrocarbons and the
average age of the fleet chartered on time by TOTAL’s Shipping
division is approximately six years
2.2.3. Environmental footprint
TOTAL implements an active policy of avoiding, reducing, managing
and monitoring the environmental footprint of its operations. As part
of this policy, emissions are identified and quantified by environment
(water, air and soil) so that appropriate measures can be taken to
better control them.
Water, air
The Group’s operations generate emissions into the atmosphere
from combustion plants and the various conversion processes and
discharges into wastewater. In addition to complying with
154
TOTAL. Registration Document 2016
Social, environmental and societal information 7
Safety, health and environment information
applicable legislation, the Group’s companies actively pursue a
policy aimed at reducing emissions. Sites use various reduction
systems that include organizational measures (such as using
predictive models to control peaks in SO2 emissions based on
weather forecast data and the improvement of combustion
processes management, etc.) and technical measures (wastewater
treatment plants, using low NOx burners and electrostatic
dedusters, etc.).
Between 2013 and 2016, the Refining & Chemicals business
segment partnered with Ondeo Industrial Solutions (Suez group) in
the ambitious E4Water European project. Seven pilot research
projects were conducted at TOTAL’s petrochemicals plant at the
Normandy platform. A €1.2 million budget was allocated to test
three water treatment processes (wastewater from the site’s water
treatment plant, cooling water and cooling blowdown). Pertinent
technologies were identified to reduce pollutants and water
consumption. These technologies could be installed, where
necessary, to reduce the water footprint of facilities.
Chronic emissions into 2016 2015 2014
the atmosphere (excluding GHG)
SO2 emissions (kt) 49 59 65
NOx emissions (kt) 75 82 93
In 2010, SO2 emissions totaled 99 kt, and the target for 2020 is to
remain below 49.5 kt, a level reached in 2016.
Discharged water quality (a) 2016 2015 2014
Hydrocarbon content of offshore
water discharges in mg / l 17.2 19.4 19.3
% of sites that meet the target
for the quality of offshore
discharges (30 mg / l) 100%(b) 100%(b) 100%(b)
Hydrocarbon content of onshore
water discharges in mg / l 3.2 3.7 3.3
% of sites that meet the target
for the quality of onshore
discharges (15 mg / l) 100% 97% 98%
(a) In the scope of Exploration & Production and Refining & Chemicals. The “hydrocarbons
in water discharges” in tons indicator, which was used until 2015, has been replaced
by the above indicators, in line with the Group’s objectives.
(b) Alwynn site (United Kingdom) excluded, as its produced water discharges are
discontinuous, only occur during the maintenance periods of the water reinjection
system and are subject to a specific regulatory authorization.
The improvement in the quality of onshore water discharges in
2016 is linked to significant investments on the produced water
treatment plant at Djeno Terminal in the Republic of the Congo.
Soil
The risks of soil pollution related to TOTAL’s operations come
mainly from accidental spills (refer to point 2.2.2 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:
– preventing leaks, by implementing industry best practices in
engineering, operations and transport;
– carrying out maintenance at appropriate intervals to minimize the
risk of leaks;
– overall monitoring of the environment to identify any soil and
groundwater pollution; and
– controlling pollution from previous activities by means of
containment or reduction operations.
In addition, a Group directive defines the following minimum
requirements:
– systematic identification of each site’s environmental and health
impacts related to possible soil and groundwater contamination;
– assessment of soil and groundwater contamination based on
various factors (extent of pollution inside or outside the site’s
boundaries, nature and concentrations of pollutants, presence of
a vector that could allow the pollution to migrate, use of the land
and groundwater in and around the site); and
– management of health or environmental impacts identified based
on the use of the site (current or future, if any) and the risk
acceptability criteria recommended by the World Health
Organization (WHO) and the Group.
Lastly, decommissioned Group facilities (i.e., chemical plants,
service stations, mud pits or lagoons resulting from hydrocarbon
extraction operations, wasteland on the site of decommissioned
refinery units, etc.) impact the landscape and may, despite all the
precautions taken, be sources of chronic or accidental pollution.
TOTAL has a site remediation policy with the aim to, in agreement
with the authorities; allow new operations to be set up once the
future use of the land has been determined. These remediation
operations are conducted by the Group’s specialized entities.
The Group’s provisions for the protection of the environment
and site remediation are detailed in Note 12 to the Consolidated
Financial Statements (point 7 of chapter 10).
Nuisances
The nuisances resulting from TOTAL’s operations, including sound
or odor nuisances or the result of vibrations or road, sea or river
traffic, are monitored at the Group’s main industrial sites.
Monitoring systems that can be put in place include sound level
measurements at the site perimeter or networks of “noses” to
determine the origin and intensity of odors. In addition, most sites
have a system for receiving and handling residents’ complaints,
with the aim of gaining a clearer insight into the different types of
nuisances and minimizing them (refer to point 3.3.2 of this chapter).
2.2.4. Circular economy
TOTAL announced in February 2017 a circular economy action plan
covering the 2017-2020 period which comprises five commitments
(purchasing, waste, new ranges of polymers, solarization of service
stations and improvement of energy efficiency).
Registration Document 2016. TOTAL
155
7 Social, environmental and societal information
Safety, health and environment information
Waste prevention and management
The Group’s companies are focused on controlling the waste
produced at every stage in their operations. 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 waste produced by the Group’s operations;
2. reusing products for a similar purpose in order to prevent them
from becoming waste;
3. recycling residual waste; and
4. recovering energy, wherever possible, from non-recycled
products.
A Group directive sets out the minimum requirements related to
waste management. It is carried out in four basic stages: waste
identification (technical and regulatory); waste storage (soil
protection and discharge management); waste traceability, from
production through to disposal (e.g., notes, logs, statements); and
waste treatment, with technical and regulatory knowledge of the
relevant processes, under the site’s responsibility.
On its sites, TOTAL deploys programs to valorize (recycling
and valorization) more than half of the Group’s waste by 2020.
Moreover, TOTAL is especially committed to managing and treating
waste classified as hazardous. Due to its nature, hazardous waste
is mainly treated outside the Group by specialized companies
187 kt in 2016, compared to 202 kt in 2015 and 223 kt in 2014).
This decrease can be explained by a continuous waste production
reduction policy started in Refining & Chemicals in 2015.
Waste treatment processes 2016 2015 2014
Recycling and / or valorization 58% 55% 56%
Landfill 18% 14% 20%
Others (incineration, biotreatment, etc.) 24% 31% 24%
Sustainable use of resources
Fresh water
The nature of the Group’s activities, and mainly those of
Refining & Chemicals (about 80% of fresh water withdrawals in
2016), and to a lesser extent those of Exploration & Production, as
well as other activities (such as gas and solar), is such that they
have an impact on, and are dependent on, water resources. This is
especially true when the activity is located in an environment that is
sensitive in terms of water resources.
TOTAL is aware of these challenges and takes water resources into
account in its guidelines and operations:
– in the Safety Health Environment Quality Charter, which states
that “TOTAL controls its use of natural resources…”, in particular
water, which is an important natural resource; and
– in its approach to water, set within the Group’s environmental
framework, which incorporates the following core principles for
action:
1. identification of priority sites that are sensitive in terms of water
resources,
2. global management of risks to and impacts on water
resources in the environmental management system, and
3. monitoring and integration of changes in this area, especially
those associated with climate change, through its
stakeholders, partnerships and R&D.
To determine which facilities are most affected by the availability of
fresh water, TOTAL monitors its water withdrawals and discharges
across all of its sites.
TOTAL identifies the levels of risk of its sites that withdraw more
than 500,000 m³ per year and are located in areas potentially
exposed to water resource risks, using the Local Water Tool (LWT)
from the Global Environmental Management Initiative (GEMI).
This tool also helps to guide the actions taken to mitigate these risks
in order to make optimal use of water resources on these sites.
Since 2016, the level of water risk was assessed on 11 Group sites:
8 Refining & Chemicals sites and 3 Exploration & Production sites.
This assessment will gradually be extended to 13 more priority sites
that have already been identified. A plan to optimize the use of
water resources on these sites may be drawn up, depending on the
nature of the risks and impacts.
For example, in Exploration & Production operations, reinjecting
water extracted along with hydrocarbons (known as produced
water) back into the original reservoir is one of the methods used
to maintain reservoir pressure. The technical specifications in force
in the Group stipulate that this option be prioritized over other
methods. The Group’s R&D programs make it possible to examine
the best techniques for treating this produced water so as to
facilitate its reinjection or consider its recovery and otherwise
discharge it into the natural environment while respecting natural
and regulatory constraints.
Approximately 80% of the fresh water withdrawals were taken from
the Refining & Chemicals segment in 2016. At refineries and
petrochemicals sites, water is mainly used to produce steam and
for cooling units. Increasing recycling and replacing water cooling
with air cooling, such as at the Normandy (France) and Antwerp
(Belgium) refineries, are TOTAL’s preferred approaches for reducing
fresh water withdrawals. The reuse of water was also investigated
at Gonfreville as part of the E4Water program.
Efforts to optimize water risk management tools are being made
both internally, with the LWT (used as a multi-site dash board), and
externally, via the IPIECA, which is developing an e-learning module
to extend and facilitate access to these tools.
On the whole, the Group’s indicators relating to water follow the
IPIECA framework. The main indicator is aggregate withdrawals.
Water-related indicator 2016 2015 2014
Fresh water withdrawals
excluding cooling water (million m³) 120 118 112
The increase in water withdrawals between 2014 and 2015 was
mainly due to the increase in activity of certain refineries in
maintenance shutdown in 2014. The value remained relatively
stable between 2015 and 2016.
Soil
TOTAL uses the ground surface that it needs to safely conduct its
industrial operations and, to date, does not make extensive use of
ground surfaces that could substantially conflict with various natural
ecosystems or agriculture.
For open-pit oil sands mining projects, TOTAL strives to ensure that
environmental issues are managed by the operator, in particular
with regard to the reclamation of affected soils.
TOTAL has set up a working group to look into the conditions and
the impacts of supplies of vegetable oil to the La Mède bio-refinery,
which is due to start up at the end of 2017.
156
TOTAL. Registration Document 2016
Social, environmental and societal information 7
Safety, health and environment information
Raw materials
Hydrocarbons, the Group’s main raw material, are a form of energy.
Losses of this raw material are divided mainly into 4 categories:
safety or operational gas flaring (point 2.3.4 of this chapter); cold
venting (point 2.3.4 of this chapter); hydrocarbons discharged in
very low quantities through aqueous effluents, which amounted to
758 t in 2016; and accidental oil spills (point 2.2.2 of this chapter).
These raw material losses remain negligible with respect to the
Group’s production in 2016.
2.2.5. Protecting biodiversity and ecosystems
Due to their nature, the Group’s activities, and particularly its
Exploration & Production activities, may be located in sensitive
natural environments. TOTAL’s operations can therefore have an
impact on ecosystems and their biodiversity.
TOTAL is aware of these challenges and takes biodiversity and
ecosystems into account in its guidelines and operations:
– in the Safety Health Environment Quality Charter, which specifies
that TOTAL “is committed to managing (…) its use of natural
resources and its impact on biodiversity” and ecosystems; and
– in the biodiversity approach, set within the Group’s environmental
framework, which incorporates the following core principles for
action:
1. deploy the mitigation hierarchy “avoid – mitigate –
compensate”: TOTAL applies this approach for the duration
of its projects’ lifecycle to minimize the impact of its activities
on biodiversity,
2. take into consideration the sensitivity of ecosystems:
In the course of its business, TOTAL identifies and takes into
account the diversity and sensitivity of various environments in
terms of biodiversity,
3. manage biodiversity: TOTAL incorporates the biodiversity
impact and risk management into its environmental
management systems and refers to good practices within the
industry,
2.3. Climate change
The Group’s strategy incorporates the challenges of climate change,
using as a point of reference the 2°C scenario of the International
Energy Agency (IEA) and its impact on energy markets. TOTAL’s
challenge is to increase access to affordable energy to satisfy the
needs of a growing population, while providing concrete solutions
to help limit the effects of climate change and supplying its clients with
an energy mix featuring a progressively decreasing carbon intensity.
TOTAL focuses its action around the following priority areas:
– developing natural gas as the primary fossil energy source due to
its lower carbon intensity;
4. report: TOTAL reports to its stakeholders on its biodiversity
performance, and
5. improve knowledge of biodiversity: TOTAL participates in
the improvement of knowledge of biodiversity and ecosystems
as well as managing the stakes involved, through R&D
initiatives taken with local and international partners,
professional associations and the Total Foundation.
The Group made a commitment not to engage in oil and gas
exploration or extraction operations at natural sites included on the
UNESCO World Heritage List of June 4, 2013. In the Democratic
Republic of the Congo, TOTAL made the commitment to not carry
out any exploration activity in the Virunga National Park, partly
located in Block III of the Graben Albertine. Since 2017, the Group
publishes the list of its licenses in the Arctic zone on its web site,
and TOTAL does not conduct any exploration activities of oil fields
under sea ice in polar areas.
To develop its projects located in sensitive habitats, TOTAL
developed, based on the sensitivity and impact analysis, a
Biodiversity Action Plan for Group operated sites located in the
most sensitive protected areas corresponding to IUCN I to IV or
Ramsar categories. The two biodiversity action plans developed in
2015 in Gabon (Atora) and the Democratic Republic of the Congo
(Djeno) are currently being deployed. Other plans will be launched
in the short term, in particular in Italy (the Tempa Rossa project), or
in the medium term in Uganda and Papua New Guinea.
The Group actively contributes to the development of best practices
related to biodiversity and ecosystem management in the extractive
industry through its partnerships with IPIECA, the Cross-Sector
Biodiversity Initiative (which brings together the Equator Principles
signatory banks and the mining and oil industries), the United
Nation Environment Program’s World Conservation Monitoring
(UNEP-WCMC) and other work groups on biodiversity bringing
together stakeholders from beyond the private sector, such as the
Business and Biodiversity Offset Program (BBOP), which includes
international NGOs, governments, universities, the World Bank, etc.
In France, TOTAL continues its partnership with the Fondation
pour la Recherche sur la Biodiversité (Foundation for biodiversity
research) and the Centre Vétérinaire de la Faune Sauvage et des
Ecosystèmes des Pays de la Loire (France).
– selecting and developing hydrocarbon projects based on their
economic merit order, which incorporates their resistance to low
price scenarios;
– developing the solar energy offer as the renewable energy of
choice in the evolution of the energy mix, as well as the
production of biofuels from biomass;
– improving the energy efficiency of the Group’s facilities, products
and services, and maintaining efforts to reduce direct emissions
of greenhouse gases (GHG);
– increasing access to more sustainable energy, for as many
people as possible, particularly by means of an innovative solar
energy solution; and
– stimulating initiatives in the oil and gas sector and supporting the
implementation of an international framework on climate.
Registration Document 2016. TOTAL
157
7 Social, environmental and societal information
Safety, health and environment information
In 2016, the Group acquired the Belgian company Lampiris in line
with the goal to expand over the entire gas value chain until the end
customer. Within a few years, Lampiris became the third-largest
supplier (1) of natural gas, green power and energy services (e.g.,
insulation, boiler maintenance, wood and pellets for heating, smart
thermostats) in the Belgian market and is starting to extend its business
in France. In 2016, the Group also entered the complementary energy
storage segment with the acquisition of the company Saft Groupe
specializing in high-technology batteries (refer to point 2.3.2.3
of chapter 2). Energy storage is an essential complement to the
development of intermittent renewable energies.
2.3.1. The role of gas
The percentage of natural gas in the Group’s production rose from
approximately 35% in 2005 to nearly 48% in 2016, and, taking
account of market developments, this percentage is expected to
increase over the coming years.
The Group believes in the essential role of natural gas as one of the
solutions to climate change issues. Replacing coal with natural gas
at power plants could help reduce worldwide CO2 emissions by
5 Bt / y, i.e., approximately 10% of world emissions (2). Strengthening
the position of gas in the energy mix must however be accompanied
by a greater focus on control of methane emissions. To preserve
the advantage that gas offers in terms of GHG emissions compared
to coal for electricity generation, it is necessary to reduce methane
emissions associated with the production and transportation of gas.
TOTAL’s methane emissions specifically associated with gas
production are less than 0.5% of the Group’s marketed operated
gas production. Improving measurement of these emissions and their
reduction is a priority for TOTAL in terms of environmental impact.
On this basis, since 2014 the Group has been a member of the
partnership between governments and industrial companies for the
improvement of tools to measure and control methane emissions
set up by the Climate and Clean Air Coalition and promoted by the
UN Environment Programme and the non-profit organization
Environmental Defense Fund. The Group has also committed, via
the Oil & Gas Climate Initiative (refer to point 2.3.6 of this chapter),
to strengthening its action in this area.
2.3.2. Project selection
In its strategy for growth, TOTAL prioritizes its projects by focusing
on assets with moderate production and processing costs, while
respecting the highest safety and environment standards.
Furthermore, the Group ensures sustainability of its projects and
long-term strategy relative to climate change issues by
incorporating into financial evaluations of its investments submitted
to the Executive Committee a long-term CO2 price of $30 to $40
per ton (depending on the crude price), or the current CO2 price
if this is higher in a given country. This price is consistent with
promoting gas over coal in power generation and encouraging
investment in research on low-carbon technologies.
Moreover, with respect to coal, the Group ceased all production
activity in 2015 and all marketing activity in 2016. In 2016, the Group
withdrew from a project involving construction of a coal-based
facility, coal-to-olefins, in China.
2.3.3. Developing renewable energies
For some 15 years, TOTAL has been committed to developing
renewable energies. The Group’s activities in this area are set out in
point 2.3.2 of chapter 2.
The Group’s priority strategic development is solar energy, in
particular through its interest in SunPower (56.73% owned by the
Group as of December 31, 2016). SunPower is involved in the
design and manufacture of photovoltaic cells, the construction of
large turnkey solar power plants and the marketing of integrated
energy solutions facilitating decentralized electricity generation.
In November 2016, TOTAL launched a 5-year program to equip
5,000 service stations across the world with photovoltaic panels,
including 800 in France. The project corresponds to an installed
capacity of around 200 MW, equivalent to the electricity used by a
city with a population of 200,000.
In addition to solar energy, biomass is TOTAL’s second strategic
development area in the field of renewable energies. In general,
biomass represents approximately 10% of worldwide energy
consumption and is mostly used for heating or cooking purposes.
Biomass is the only directly substitutable renewable alternative to
fossil resources for the provision of liquid fuel for transport
(biodiesel, bioethanol, biokerosene), lubricants and base molecules
for chemicals (solvents or polymers).
TOTAL also invests in startups working on ways to reduce direct
GHG emissions into the atmosphere by other means. For example,
through its venture capital fund Total Energy Ventures (TEV), the
Group supports the development of companies offering innovative
technologies or business models in such areas as renewable
energies, energy efficiency, energy storage and sustainable mobility.
For instance, in 2016, TEV acquired a stake in Off-Grid Electric and
PowerHive, suppliers of electricity produced by solar energy in
African rural areas that have no or poor grid connection.
2.3.4. Energy efficiency and ecoperformance
In its scope of activities, TOTAL has made reducing GHG emissions
one of its priorities. The Group exceeded its objective of reducing
GHG emissions from its operated activities by 15% from 2008
to 2015. The reduction of GHG emissions entails reducing flaring
and improving energy efficiency.
GHG emissions, in Mt CO2 eq (a) 2016 2015 2014
Scope 1: Operated direct GHG
emissions (100% of emissions
from sites operated by the Group) 39 42 44
Scope 1: Group share of direct
GHG emissions 51 50 54
Scope 2: Indirect emissions attributable
to energy consumption by sites 4 4 4
Scope 3: Other indirect emissions
Use by customers of products
sold for end use 420 410 430
(a) For further information on the methods involved for these indicators, refer to point 4.4.2
of this chapter.
(1) Company data.
(2) Source: IEA.
158
TOTAL. Registration Document 2016
Social, environmental and societal information 7
Safety, health and environment information
Reducing flaring
Since 2010, energy efficiency has already improved by more than 9%.
Reducing routine flaring has been a long-standing goal of the
Group, with a commitment made in 2000 to have no continuous
flaring of associated gas incorporated into the design of its new
projects. Furthermore, the Group has supported the World Bank in
developing and launching the Zero Routine Flaring initiative
involving oil & gas companies, producing countries and international
institutions. The initiative aims to support elimination of routine
flaring by 2030. To ensure progression, an objective to decrease by
80% has been defined for 2020 compared to 2010, in other words
to achieve an average of 1.5 Mm³/d. TOTAL has already reduced
routine flaring on its operated facilities by about 77% between 2010
and 2016.
Furthermore, as part of the Global Gas Flaring Reduction program,
TOTAL has worked alongside the World Bank for over 10 years to
help producing countries and industrial players control routine
flaring of associated gas.
Flaring 2016 2015 2014
Global volumes
of flared gas flared in Mm³ / d 7.1 7.2 9.8
3.4 (b)
Including routine flaring in Mm³ / d 1.7 (a) 2.3 (b)
(a) Volume estimated based on data as of end of 2016, according to the new routine
flaring definition published in June 2016 by the working group of the Global Gas Flaring
Reduction program.
(b) Volumes estimated based on available historical data.
Improving the energy efficiency of the Group’s facilities
One of the Group’s performance targets is to better control energy
consumption. Internal documents (roadmaps and guides) describe
the challenges and set out methodologies and action plans. Since
the beginning of 2013, a Group directive has defined the requirements
to be met at operated sites using more than 50,000 tons of oil
equivalent per year of primary energy (approximately 40 sites). At
year-end 2016, 83% of the concerned sites have reported compliance
or engaged the actions to meet compliance with this directive.
Energy efficiency is a key factor for improvement of economic,
environmental and industrial performance. Since 2013 the Group
has used a Group Energy Efficiency Index (GEEI) to assess its
performance in this area. It consists of a combination of energy
intensity ratios (ratio of net primary energy consumption to the level
of activity) per business.
The Group’s objective for the 2010-2020 period is to improve the
energy efficiency of its operated facilities by on average 1% per
year. By design, the base value of the GEEI was defined as 100 in
2010 and the goal is to reach 90.4 in 2020.
Energy efficiency 2016 2015 2014
Net primary energy
consumption (TWh) 146 153 153
Group Energy Efficiency
Index GEEI (base 100 in 2010) 91.0 90.8 (a) 100.0 (a)
(a) The 2015 and 2014 data have been restated to take account of the new reference
period 2010-2020 (the previous target period was 2012-2017).
In addition to the mandatory audits conducted in Europe as per
transposition of the European Energy Efficiency Directive
2012 / 27 / EU, the Group is implementing energy management
systems based on ISO 50001. After the Leuna refinery and the
Brunsbüttel bitumen plant (Germany), which have been certified for
several years, the French energy-intensive refining and
petrochemicals sites are preparing for ISO 50001 certification
supported by the Group’s energy services subsidiary BHC. The
certification audits are scheduled in 2017.
Several Marketing & Services sites in France obtained ISO50001
certification in 2015: the Solaize research center, the Saint-Martin-
d’Hères site, along with 7 depots and 193 service stations. In
Exploration & Production, Total ABK (Abu Dhabi) also obtained this
certification in early 2016.
TOTAL uses the most appropriate architectures and equipment and
introduces technological innovations. For example, on offshore
production barges, offshore platforms and onshore facilities, heat
recovery systems at gas turbine exhausts have been implemented
thereby avoiding the need for furnaces or boiler systems. For some
offshore projects, such as Martin Linge (Hild) in the Norwegian
North Sea, an “all-electric” facility has been put in place. Electricity
is produced onshore then transported undersea to the platform,
resulting in higher efficiency compared to electricity generated on
an onshore platform.
Improving the environmental
footprint of products and services
Approximately 85% of GHG related to the use of oil and gas are
emitted during the customer usage phase, compared to 15%
during the production phase (1). For this reason, in addition to the
measures taken by TOTAL at its industrial sites, the Group believes
that improving the environmental footprint of its products is a key
factor in the fight against climate change.
The Group offers its customers solutions (products and services) for
responsible energy use. In terms of energy services, TOTAL draws
in particular on the know-how of its Tenag joint venture in Germany
(49% owned) and BHC Energy in France acquired in 2014. These
service companies work mainly for European customers, as well as
in Africa and the Middle East. They use results obtained in-house to
give industrial customers advice on improving their performance
and energy efficiency.
Through the “Total Ecosolutions” program, the Group is also
developing innovative products and services that perform above
market standards on the environmental front, in particular in terms
of reducing energy use, GHG emissions and the impact on human
health. At year-end 2016, 96 products and services bore the “Total
Ecosolutions” label. They relate to a variety of sectors, including
mobility, agriculture, buildings, packaging, infrastructure and
industrial manufacturing. Some of the products result in reduced
energy consumption, such as Total Excellium fuel, Total Quartz Fuel
Economy lubricant, and the Azalt® ECO2 and Styrelf® ECO2 bitumen
ranges. Others, such as the new BioLife range of special fluids
(1) Source: IPCC et IEA.
Registration Document 2016. TOTAL
159
7 Social, environmental and societal information
Safety, health and environment information
derived from raw materials from fully certified renewable sources,
enable a significant reduction in environmental impact (compared to
the fossil equivalent).
The CO2 eq emissions avoided throughout the life cycle by the use
of “Total Ecosolutions” products and services, compared to the use
of benchmark products on the market and for an equivalent level
of service, are measured annually based on sales volumes.
This represented 1.75 Mt CO2 eq in 2016.
In addition to its efforts on facilities and solutions offered to its
customers, since 2012 the Group has provided support for its
employees in France on improving the energy efficiency of their
homes through advice and help with the necessary investment.
Since the beginning of this offer, 2,167 energy renovation works
were supported by the Group and in 2016 5,300 packs of five LED
bulbs were distributed free to employees.
Progressing in carbon capture, usage
and storage technologies
Development of carbon capture usage and storage technologies
(CCUS) has been a long-standing Group commitment, in particular
through its Lacq pilot project conducted from 2010 to 2013 (oxy-
combustion capture and storage in a depleted reservoir). The
Group systematically studies opportunities to re-inject the CO2
contained in the deposits it exploits and is looking at use of CO2 to
improve hydrocarbon recovery. Building on these experiences,
TOTAL believes it is important to continue its R&D efforts in various
fields including maturity of capture technologies, availability and
location of storage capacities, CO2 usage, technical feasibility on
the scale needed and reducing costs of technologies. With this goal
in mind, TOTAL intends to devote up to 10% of its R&D investments
to CCUS and has initiated work alongside its peers, within the
Oil & Gas Climate Initiative, on the issues of marketability, capture
technologies and world storage capacities.
2.3.5. Access to energy
The World Bank estimate for the number of people without access
to electricity has exceeded 1.3 billion. In 2011, TOTAL therefore
launched a range of innovative solar energy solutions, accessible to
as many as people possible, led by its flagship project Awango by
Total (refer to point 3.4.5 of this chapter).
2.3.6. Sector initiatives
and international framework
In 2014, TOTAL decided to join the call of the UN Global Compact,
which encourages companies to consider a CO2 price internally and
publicly support the importance of such a price via regulation
mechanisms suited to the local context. TOTAL also works
alongside the World Bank as part of the Carbon Pricing Leadership
Coalition (CPLC): in 2016 the Group was appointed co-chair of one
of the CPLC working groups (Convening Leadership). In particular,
TOTAL advocates the emergence of a balanced, progressive
international agreement that prevents the distortion of competition
between industries or regions of the world. Drawing attention to
future constraints on GHG emissions is crucial to changing the
energy mix. TOTAL therefore encourages the setting of a worldwide
price for each ton of carbon emitted, while ensuring fair treatment
of “sectors exposed to carbon leakage” (as defined by the EU). To
this end, six oil & gas industry leaders, including the Group’s
Chairman and Chief Executive Officer, called for the setting up of
carbon pricing mechanisms at the UN Framework Convention on
Climate Change in June 2015.
According to the IEA, the electricity-generating sector is the sector
that must contribute most to the decrease of CO2 emissions in the
world by 2035 in order to remain within the 450 ppm of CO2 scenario
(electricity generation contributes more than 65% to the emission
reduction effort, compared to 11% for the industrial sector, 16% for
transport and 4% for the construction sector). Substituting coal
with gas in the electricity-generating sector is one fastest and
cheapest way of reducing worldwide CO2 emissions. This solution is
immediately available and offers the necessary flexibility to electric
networks, supplementing intermittent energies. As a result, TOTAL
supports standards that impose emission ceilings on electricity
generation, such as those in force in the United Kingdom.
In 2014, TOTAL was actively involved in launching and developing
the Oil & Gas Climate Initiative (OGCI), a global industry partnership.
At year-end 2016, this initiative involves 10 major international energy
players. Its purpose is to share experiences, advance technological
solutions and catalyze meaningful action in order to assist the
evolution of the energy mix in a manner that takes into account
climate change issues. In 2016, the OGCI worked in particular on
CCUS and on reducing methane emissions. In November 2016,
at a panel discussion with international energy and climate experts,
the executives of the member companies published the second
OGCI report also announcing the creation of an investment fund
of $1 billion over 10 years. This OGCI Climate Investments fund will
finance startups and projects demonstrating high potential in terms
of reducing greenhouse gas emissions. Initial priority will be given
to deploying large-scale solutions for CCUS, reducing methane
emissions throughout the gas value chain in order to increase its
development, and improving energy efficiency, in both transport
and industry.
TOTAL is the technical partner of the Breakthrough Energy Coalition
(a $1 billion fund), and in this capacity should help identify investment
priorities and evaluate viable technologies.
TOTAL also actively participates in the debate on climate issues
and has long-term partnerships with key stakeholders. For example,
TOTAL funds research programs in France conducted by the ADEME,
Paris-Saclay and the Climate Economics Chair at Paris-Dauphine
University, as well as the Massachusetts Institute of Technology
(MIT) in the United States. TOTAL has also been an active member
of the World Business Council for Sustainable Development since
2014. Lastly, TOTAL offers training and makes presentations at
several universities, thereby taking part in the debate.
2.3.7. Adapting to climate change
The Group ensures that it assesses the vulnerability of its facilities
to climate hazards so that the consequences do not affect the
integrity of the facilities, or the safety or people. More generally,
natural hazards (climate hazards but also seismic risks, tsunami
risks, subsidence, etc.) are taken account of in the design of
industrial facilities enabling them to withstand normal and extreme
conditions. The Group routinely assesses the possible consequences
of climate change for its future projects. The assessments include a
review for each hazard type (sea level, storms, temperature, permafrost,
etc.) and consider the lifespan of projects and their capacity to
progressively adapt. Studies conducted have not identified any
facilities that are not able to withstand the currently known
consequences of climate change.
160
TOTAL. Registration Document 2016
Social, environmental and societal information 7
Societal information
3. Societal information
3.1. A structured societal approach
On the basis of the values and principles set out in its Code of
Conduct and Safety Health Environment and Quality Charter, TOTAL
places its commitment to community development at the heart of
its corporate responsibility in order to create shared value with
people living near its facilities, its customers and suppliers, and its
employees. Dialogue with stakeholders, impact management and
the creation of value are the pillars of the Group’s societal policy.
This approach, which is deployed in direct relation with industrial or
commercial operations, guides the actions taken by the Group to
improve the way it is integrated into local territories. In line with the
strategic priorities defined by the General Management, annual
reporting tools are used to track and monitor overall societal
performance. Several indicators, which are based on the societal
policy, measure the quality of dialogue with stakeholders, the
management of the impact of the Group’s activities, socioeconomic
development projects and access to energy. Four topics have been
identified as Group priorities: education, employment, road safety
and access to energy.
3.2. Dialogue and involvement with stakeholders
In addition to holding regulatory forums for dialogue,
Refining & Chemicals has voluntarily set up structures for dialogue
with local stakeholders (such as Community Advisory Panels in the
United States and special commissions for some European
platforms). In application of the worldwide Responsible Care®
voluntary charter covering the scope of its worldwide petrochemical
activities, Refining & Chemicals consults its stakeholders in order to
understand their concerns and offer an appropriate response.
3.2.2. Implementation of the SRM+ tool
To put its societal approach on a professional footing, TOTAL has
applied its internal Stakeholder Relationship Management (SRM+)
methodology since 2006. The aim is to identify and map out the
main stakeholders and the societal issues in the local context, to
meet the stakeholders, understand their views and issues, and then
define an action plan for building a long-term trusting relationship.
These discussions allow the Group to better address the expectations
of the stakeholders and consolidate the societal strategy of the
subsidiaries and sites. Since 2006, SRM+ has been implemented in
over 100 entities, and the deployment will continue in 2016:
– at Exploration & Production, the SRM+ method was rolled out on
the site in Pau, France as part of an initiative to optimize the
portfolio of societal actions deployed all over the country;
– at Refining & Chemicals, the SRM+ was deployed on three sites
in 2016: the Flanders site and the Normandy (France) and
Antwerp (Belgium) platforms; and
– at Marketing & Services, a specific module, developed in 2012,
has now been deployed in 80% of the countries covered,
including Costa Rica, Singapore, Sierra Leone and the
Netherlands in 2016.
Openness, dialogue and engagement are essential for developing
long-term, constructive and transparent relations with stakeholders.
For the past 20 years or so, changes in the regulatory framework
have promoted information, consultation and dialogue prior to high-
impact decisions being made.
In addition to complying with regulations, TOTAL encourages dialog
at every level of its organization. The Group societal directive
demands that “each asset must consult its stakeholders regularly to
gain a clearer understanding of their expectations and concerns,
measure their level of satisfaction regarding the Group and identify
avenues of improvement for its societal strategy”.
3.2.1. Stakeholder consultation
In Exploration & Production, dialogue is initiated within the
framework of societal baseline studies carried out to identify
at a very early stage (even before the start of operational activities)
stakeholders that may potentially be affected and to understand the
human socioeconomic context of the area in question. The Community
Liaison Officer (CLO) maintains a dialogue between the subsidiary
and the local communities. CLOs, who are employees of TOTAL
and come from the local community and therefore speak the local
language and understand local customs; as such they often play
a key role in facilitating the Company’s integration into the local
context. To formalize and organize relations with stakeholders,
agreements may also be signed and meetings held, such as public
consultations.
For example in the Democratic Republic of the Congo, two societal
officers were hired to work shifts and remain present seven days a
week, with the support of four CLOs recruited from the impacted
communities, in readiness for a seismic campaign launched at the
start of 2016. Six additional CLOs were recruited by the contractor
in charge of the seismic campaign in order to maintain permanent
dialogue with the communities.
Registration Document 2016. TOTAL
161
7 Social, environmental and societal information
Societal information
3.2.3. Respecting the rights of indigenous peoples
TOTAL acknowledges the specificities of indigenous and tribal
peoples (as referred to in International Labor Organization’s
Convention No. 169) and has developed a Charter of Principles and
Guidelines Regarding Indigenous and Tribal Peoples to be followed
with communities that are in contact with its subsidiaries. This
Charter encourages the use of experts in order to identify and
understand these peoples’ expectations and specificities, consult
with them and contribute to their socioeconomic development.
In Bolivia, the societal and environmental situation of the Azero
Block (indigenous communities and a national park) prompted the
Total E&P Bolivia subsidiary to put an even greater focus on human
rights in the execution of the project and to improve dialogue with
the local communities. The discovery of remains and archaeological
tools during the construction of the Incahuasi gas treatment plant,
located on the territory of the Guarani indigenous people, was
managed in collaboration with the Bolivian authorities and the local
Guarani communities. TOTAL agreed to move the treatment plant’s
torch to another position, so that the funereal remains could be
buried on the spot where they were found. In 2015, International
Alert (IA), a British NGO that specializes in finding and supporting
peaceful solutions to conflicts, conducted an impact assessment
on human rights and the risks of conflict. IA drew up
recommendations with a view to better integrating respect of
human rights into the management of the project and to improve
dialogue with local communities, by taking the cultural dimension
into consideration. The report is available online.
Additionally, an internal team of professionals from the social and
natural sciences was recruited to initiate a participative approach
and to establish dialogue with local actors at the earliest possible
stage. The initial societal baseline survey, which was launched in
August 2015 and involved several meetings with local organizations
and all the affected communities, defined a framework of respect
for the stakeholders, of information, dialogue and coordination that
was given to every organization. These efforts to establish a dialogue
reached more than 2,500 people, of whom 36% were women.
3.3. Controlling the impact of the Group’s activities
The societal initiative is integrated into operational processes using
the internal H3SE management system (occupational health and
safety, security, societal commitment and the environment), known
as MAESTRO (Management And Expectations Standards Towards
Robust Operations). Audits conducted with MAESTRO give rise to
recommendations and strengthen efforts in order to better manage
the Group’s operations.
3.3.1. Conducting impact assessments
An understanding of the socioeconomic context is gained through
a baseline study, which is generally accompanied by a consultation
phase involving local stakeholders.
These societal studies, which are a systematic prerequisite for
Exploration & Production projects, are made before any start-up of
operations in an effort to avoid, reduce, compensate or remedy any
negative impacts. For example, in Egypt dialogue was established
by local consultants in the course of the initial societal baseline
studies conducted, at the end of 2015, before the drilling of the
onshore exploration licenses (Block 2, Block NEMO) of the Nile
Delta, and through a number of interviews in a 50 km² zone around
the exploration well close to a hamlet, in early 2016.
Some 360 responses to a questionnaire from these villages and
hamlets led to a better understanding of the societal and the
socioeconomic context of the zone. In addition, 20 discussion
groups (men and women were usually separated to make it easier
for everyone to voice their opinions) and 32 interviews with
stakeholders were organized. This dialogue continued as part of the
societal impact assessment, which analyzed the potential impacts
and defined mitigation measures. The recommendations were then
included in the specifications for the drilling contractor. Furthermore,
replacement farm land was made available in May 2016 for more
than one year.
The Group developed the MOST (Management Operational Societal
Tool) tool that allows users to manage stakeholder relations, site-related
grievances and societal projects. Specific modules (access to land,
compensation and employment) can be added to this common
framework. Societal data is geo-referenced, with automatic display
in a geographic information system. MOST generates reports that
serve as a basis for the analysis of societal performance. Using this
tool, a new version of which was released in 2016, is part of the
process to raise the standards of professionalism of the local teams.
In 2016, the tool was deployed in three new countries (Angola,
Argentina and Papua New Guinea), bringing to 15 the number of
subsidiaries of Exploration & Production that use the tool.
3.3.2. Handling grievances from local communities
The grievance mechanism was reinforced in 2016 in preparation for
its gradual introduction at all the Group’s subsidiaries and sites.
At Exploration & Production, a manual on the handling of
grievances, inspired by the UN Guiding Principles on
Business & Human Rights, has been available since 2013. For
example, Total E&P RDC has taken several preventive measures
related to human rights. The mechanism to handle grievances
includes an escalation system for any grievances or incidents that
could have consequences for human rights.
At Refining & Chemicals, grievance handling systems are in place
on every platform. Certain issues may be addressed with the
support of the stakeholders. For example, a program was set up
to monitor odors near an industrial park, thanks to the participation
of NGOs and volunteers. A panel of “noses” were trained in the
characterization of odors, which were monitored for a one-year
observation period. The findings were collected and the results
were presented at a discussion meeting with the stakeholders.
At Marketing & Services, a guide to raise awareness of grievance
management has been available since 2014 to allow the subsidiaries
and operating sites to introduce a dedicated system separate from
the one used to handle commercial complaints. This mechanism
was incorporated into Marketing & Service’s societal framework.
162
TOTAL. Registration Document 2016
3.3.3. Improving road safety
Safety is one of TOTAL’s values (refer to point 2.1 in this chapter,
which covers the safety of employees and transport contractors).
Road safety in particular is a global issue that is right at the heart of
the Group’s business, and one of the top priorities of its societal action.
The Group’s ambition to actively take part in the reduction in the
numbers of victims of road accidents is reflected by the numerous
actions taken as part of the United Nations Decade of Action for
Road Safety (2011 – 2020), of which TOTAL is a partner. In 2016,
the Chairman and Chief Executive Officer restated the Group’s
commitment by joining the high-level consultative group initiated by
the International Automobile Federation, which has been tasked
with uniting leaders from all over the world in the promotion of
innovative solutions to the challenge of road safety. In this context,
the Group took part in the first study mission in Myanmar, intended
to establish a baseline in order to propose a national road safety
action plan to the country’s authorities.
The Group is also a member of the Global Road Safety Partnership
(GRSP), which aims to encourage the development of multi-sector
partnerships that will spread good practices on the road all over the
world. In 2016, the Group continued to support the seminars
organized by the GRSP in Beijing (China) in May, and in Durban
(South Africa) in October, that were attended by experts and
players in road safety from Asia and Africa respectively.
The GRSP is also helping TOTAL to improve its “En route pour ta
Sécurité” flagship program, intended to raise children’s awareness
of dangers on the road. Developed in 2012, this game-based
educational program has been deployed in 37 countries in Africa
and the Middle East, and in 8 Asian countries, reaching out to more
than 700,000 children. A study conducted with the GRSP identified
paths of improvement and produced a methodological guide
3.4. Creating local value
The Group has a special responsibility towards communities living
in the vicinity of its facilities, and strives to turn its activities into
sources of value and opportunity for them. TOTAL’s ambition is to
act and be recognized as a partner in the sustainable economic
and social development of the communities and territories where it
operates, and as a standard-setter for access to energy.
TOTAL is building a global, integrated local development approach
(“In-Country Value”) that creates synergies among all the value-
creating elements for host countries (infrastructure, support for local
industries, employment, subcontracting, socioeconomic
development projects, education, access to energy, etc.) by
promoting the Group’s industrial know-how. This approach is
reflected in two key strategies: on the one hand, the Group’s
commitment to local content and, on the other hand, support for
the implementation of socioeconomic programs, including in
particular the implementation of access-to-energy programs.
Social, environmental and societal information 7
Societal information
intended to strengthen its impact, in particular by involving local
stakeholders in the identification of changes to road layouts around
schools. TOTAL hopes to build a network of excellence, made up
of highly motivated schools and competent partners that will turn
everyone into an ambassador of road safety. The system aims to
make 200,000 children more aware every year. For several years
now, TOTAL has been deploying a game-based and educational
cube-shaped tool designed by TOTAL for teachers (the “Cube
Sécurité”) that is also easy to use in communities. Some 750
schools worldwide already use this cube, and 1,000 more cubes
will be distributed in 2017.
Other local initiatives for two-wheelers are also being deployed in
Asia, and in particular the “Prends soin de toi aussi bien que de ta
monture” campaign, focusing on the importance of wearing a
helmet and proper maintenance. TOTAL is continuing its actions to
bring the public and private sectors on board through the Safe Way
Right Way platforms designed to mobilize partners, raise funds,
develop training and awareness-raising actions, or to contribute to
improving the regulations and their application along two major
highways between Kenya and Uganda on one hand, and in
Cameroon on the other.
In 2016, in France, TOTAL and 20 other major companies signed
the national appeal in favor of road safety and work, initiated by the
Ministry of the Interior, which aims to engage with businesses with a
view to reinforcing prevention amongst employees through
concrete commitments. Since 1995, TOTAL has been a partner of
the “10 de Conduite Jeune” training campaign for young drivers in
cooperation with the French national police, Groupama and
Renault. Each year, this initiative raises awareness among more
than 10,000 junior and secondary school students of dangerous
behavior on the road.
3.4.1. Acting as a partner for human, social and
economic development
TOTAL’s contribution to the socioeconomic and human
development of the countries in which the Group operates is
reflected in its involvement in local development programs.
In 2016, €387 million was spent on societal projects, compared to
€384 million in 2015 and €459 million in 2014. Certain expenses
are managed directly by host countries in application of contractual
provisions, for example in Nigeria (Niger Delta Devlopment
Committee) or in the Republic of the Congo (Provisions
d’investissements diversifiés). In 2016, 3,000 societal actions were
reported. These programs support local populations and fall into
three main categories: local economic development, human and
social development and citizenship.
Two cross-functional priorities underlie these projects: partnerships
and skills development. Built on constructive dialogue and the
determination to forge long-term relationships of trust with
stakeholders, partnerships with local institutions and organizations
guarantee the long-term success of projects. In all its actions,
TOTAL ensures that it respects local authorities’ prerogatives and
Registration Document 2016. TOTAL
163
7 Social, environmental and societal information
Societal information
teams up with NGOs that have field experience. In the same vein,
TOTAL promotes actions that help strengthen the ability of
individuals and local bodies to organize their development
independently in order to ensure sustainability.
The Group’s expertise is based on the continued professionalization
of its societal teams through structuring projects, setting goals and
monitoring performance indicators. At the Group’s head office, an
individual is dedicated to relations with NGOs. At Exploration &
Production, more than 400 people work in societal matters, over
360 of which on a full-time basis. Several in-house training modules
have been created for all Group employees, including an e-learning
devlopped in 2016 on the Group’s societal approach
3.4.3. Boosting regional development
and supporting major industrial changes
to the Group’s platforms
In addition to the jobs generated by its activities, the Group, as a
responsible company, supports SMEs, particularly in France,
through its Total Développement Régional (TDR) subsidiary. To help
and support the economic development of SMEs and the regions,
TOTAL has set up a program to examine applications for funding
from French SMEs in accordance with the Group’s standards.
This support is a major element in TOTAL’s commitment to its
industrial and economic responsibilities and takes a number of
different forms within TDR that help create long-term jobs:
3.4.2. Committing to local content
– financial assistance for the setting up, development or takeover
The Group is committed to increasing its use of local labor and
subcontractors that meet the operational requirements of its
activities, in particular through programs designed to train and
support SMEs and important players in the local economy. TOTAL
contributes to the diversification of the economy in the territories
where it operates by supporting multiple local initiatives, with a
particular emphasis on the improvement of skills and education.
To this end, Exploration & Production shifted from a local content
approach (focused mainly on direct and indirect local employment)
to an In-Country Value approach geared toward local value
creation. The segment’s roadmap is centered on four main areas:
publishing future industrial and manpower needs; using a unique
supplier database for each subsidiary; developing a large-scale
program for training technicians; and comprehensively studying
local value creation. TOTAL participated in the development of the
IPIECA “Local content strategy guide” and recently helped update
this document.
For example, in the Republic of the Congo, Total E&P Congo has
had since 2012 an organization dedicated to the development of
local content, which identifies and rates local companies that are
potential subcontractors. The Moho Nord project introduced a plan
for the compulsory use of local content by its international
subcontractors and the local lower-level subcontractors. In a drive
to favor the use of local labor, training plans were set up to improve
the skills of the local workforce and to align them with the needs of
the project: more than 200,000 hours of training for junior
managers working on the project, and more than 3,200 hours of
training for 46 lecturers from technical and engineering universities.
With respect to Marketing & Services, the first “Start-upper of the
year by TOTAL” contest was organized in 34 African countries in
2016. This pan-African contest aims to support young
entrepreneurs from all backgrounds, and in all fields of activity. Of
the 6,642 projects received, 102 winners were selected (three per
country), including four continental prize-winners from Egypt,
Nigeria, Senegal and Cameroon. The winning start-uppers receive
funding, heightened visibility (with the “2016 start-upper of the year
by TOTAL”) and business support for their project from the Group’s
local subsidiaries and expert partners in the field selected by TOTAL.
For the four continental winners, TOTAL works with Bon’Innov, an
incubator for innovative projects with a strong economic and
societal impact. In Africa and the Middle East, TOTAL is pursuing
the “Young Dealers” program that aims to help young service
station employees gain promotion to management positions.
of SMEs in the form of loans;
– industrial conversion assistance alongside local development
bodies; and
– assistance in the development of export activities and
international trade, and help for innovative SMEs.
Between 2014 and 2016, TDR has issued a total of €23.4 million in
loans to 434 SME projects, thereby supporting nearly 8,000 jobs.
The Group relies on TDR for the local implementation of
agreements signed with governmental authorities in connection
with its industrial conversion projects. These included, for example,
the conversion of the ICD platform in Dunkirk and the future Carling
Saint-Avold and La Mède platform projects.
To maintain industrial activities and jobs once refining operations at
the Flanders facility end, two industrial projects are underway:
construction of a dietary phosphate production plant by 2017
(Ecophos), and construction of a pilot biodiesel and biofuel
production plant in which the Group has a stake (BioTFuel). Overall,
the 2012-2014 regional development framework agreement helped
create or maintain 800 jobs.
In Carling (France), the second steam cracker was permanently
shut down in 2015. To adapt the platform and ensure its future by
restoring its competitiveness, TOTAL invested €180 million in 2016
in order to develop new activities in the growing hydrocarbon resins
(Cray Valley) and polymers markets. TOTAL has made a
commitment to implement this industrial conversion without any
lay-offs and to fulfill all of its contractual obligations with its clients
and partner companies, particularly through a support fund for
subcontractors. In addition, TOTAL is committed to improving the
Carling industrial platform’s attractiveness by developing a shared
services offer, with the aim of helping new industrial stakeholders
become established at the platform. In this way, TOTAL confirms its
responsibility towards the employment areas in which the Group
operates as well as its commitment to maintain a strong and
sustainable industrial presence in the Lorraine region.
Plans to convert the La Mède refinery through an investment
greater than (cid:4)200 million are underway to create the first French
bio-refinery, establish an 8 MW solar farm and set up a training
center in partnership with the French Institute for Oil and New
Energies. This project will be completed without any lay-offs.
TDR is particularly involved in providing support to the subcontractors
and putting the Group’s commitments into action.
In Carling and La Mède, these commitments to local authorities
have been set out in a Voluntary Agreement for Economic and
Social Development, including Group support for SMEs (e.g.,
subcontractors, loans to SMEs) and industrial initiatives (e.g.,
improved platform structure and greater appeal, search and
examination of third-party industrial projects).
164
TOTAL. Registration Document 2016
Social, environmental and societal information 7
Societal information
3.4.4. Supporting education
Education is key to creating shared value by helping host countries
develop the skills of their young people and training the future
employees that industry will need. TOTAL’s contributions to education
are framed within existing local systems, adapted to local realities
and always undertaken in the form of partnerships. In addition to
support for primary and secondary education where needs have
been identified, the Group’s educational initiatives are built around
four core international programs: scholarships, partnerships with
universities, teaching and research chairs, and professional training.
TOTAL promotes the internationalization of its management, the
recruitment of local personnel and their access to positions of
responsibility, particularly within their original subsidiaries. To
achieve this, the Group offers local, regional and international
scholarships prior to recruitment. For example, since 2004, over
1,000 students from the Group’s host countries have been able to
prepare for qualifications (doctorates, MBAs, Master’s degrees,
engineering schools, bachelor’s degrees and university institutes of
technology) at the best institutions, mainly in France.
3.4.5. Giving the most disadvantaged
populations greater access to energy
For more than 10 years, several Group subsidiaries have been
engaged in various one-off access-to-energy projects for low-
income populations, usually in cooperation with neighboring
communities and local authorities in host countries. To improve its
societal performance, structure its approach and reach out to the
widest possible audience, TOTAL aims to develop models that are
both profitable and sustainable. For this reason, in 2010 the Group
launched the “Total Access to Energy” program, a source of
initiatives for identifying and testing solutions that facilitate access
to energy for the poorest populations.
Awango by Total, a new business model
The first large-scale achievement to come out of this program,
Awango by Total is a business response to a societal problem.
This innovative, sustainable and reproducible business model offers
a range of solar solutions for lighting and recharging small electrical
appliances such as mobile phones.
To help the companies recruit qualified local staff, TOTAL helps to
strengthen the African continent’s universities by making the Group’s
technical and scientific expertise available to them. Approximately
30 framework agreements have been signed with leading institutes
of higher education, such as the 2IE Institute in Burkina Faso and
the universities of Cape Town and Witwatersrand in South Africa.
The university partnership program launched in Africa in 2010 has
subsequently been deployed across Europe, Asia and the Middle East
and now includes 80 establishments in regular dialogue with TOTAL.
Launched in 2011 in four pilot countries, this offer was sold in close
to 50 countries in 2016, including 12 where it is currently being
launched. By the end of 2016, nearly 1.8 million lamps had been
sold, improving the day-to-day lives of nearly 9.5 million people.
The distribution networks used are both TOTAL’s traditional
networks (service stations) and “last mile” networks built with local
partners to bring these solutions to isolated areas. Reseller networks
are then set up and economic programs developed with the support
of external partners to recruit and train young solar resellers.
TOTAL lends its support to teaching and research chairs, and in
particular research and innovation at 24 institutions, to address the
needs of the business world.
In addition, professional training programs adapted to the needs of
each country are organized in cooperation with local actors and
allow trainees to obtain diplomas and recognized professional
qualifications. These programs are complemented by “TOTAL
associate teachers”. This original initiative is a non-profit association
run by current or retired employees of the Group who teach
courses free of charge in schools and universities. Over 250
teachers give courses and lectures in oil-related fields. During the
2015-2016 academic year, over 17,000 students throughout the
world benefited from this expertise.
In 2016, the inaugural session of the Total Energy Summer School
(TESS) was attended by 84 students, 40 teachers and researchers
from around the world and 75 Group experts. The event included
three days of workshops, in which participants addressed the
future energy challenges facing science, industry, the economy,
education and social responsibility. Some plenary sessions were
streamed live or replayed at the Total Campus, the dedicated
platform for students, to encourage the widest possible participation.
Finally, to help provide access to education to as many people as
possible, TOTAL broke new ground by contributing to the creation
and distribution of a free massive open online course (MOOC) on
the oil chain (entitled “Oil & Gas: from Exploration to Distribution”)
a four-week online course taken by 21,800 participants.
This model is based on innovative partnerships with various
stakeholders : in 2016, approximately 50 business partnerships
were launched with such varied stakeholders as NGOs,
development agencies, professional customers (retailers, TOTAL
key account customers, etc.), telecommunications operators or
international organizations.
The Group’s goal is to further develop this program and reach out
to 25 million people in Africa by 2020 by selling five million lamps in
a continent that is at the core of TOTAL’s global strategy.
Several new business models are being trialed. Two significant
examples include:
– the development of solar kit and lamp ownership schemes on a
pay-as-you-go or credit basis. The sale of a solar kit (several light
sources, a flashlight, a radio and a cable for recharging a cell phone)
worth approximately $100 to $150 is accompanied by a financing
plan allowing customers to spread out their payments; and
– the launch of the first crowdfunding platform to promote access
to energy in partnership with Babyloan, a European leader in
crowdfunding. This partnership aims to accelerate access to
energy and related financing solutions, particularly in Africa, Asia
and Latin America, where the need is greatest. This collaboration
aims to support the creation of local microbusinesses that will
develop distribution networks towards isolated communities and
better address last mile distribution challenges. By the end of
2016, three microfinancing institutions were qualified, two of
which are operational on the platform, in Peru and Kenya. In
2017, 2,000 projects are expected to be financed in
approximately 10 countries.
Registration Document 2016. TOTAL
165
7 Social, environmental and societal information
Societal information
Fighting fuel poverty and developing
more inclusive mobility
TOTAL is actively involved in the fight against fuel poverty in France
by supporting and guiding low-income households in improving
thermal insulation in their homes. The Group is working alongside
the French government and other energy producers in the “Living
Better” program, which has allowed 200,000 low-income
households (1) to benefit from thermal renovation since its creation in
2011. In addition, the 90 energy efficiency ambassadors at SOLIHA
and FACE (agreement signed with the French Ministry for the City,
Youth and Sport) have helped to identify and support households
affected by energy poverty in 30 departments in France (assistance
with building renovation formalities, financing solutions, training in
eco-friendly behavior).
As a driving force for mobility, TOTAL supports the launch and
development of mobility platforms aimed at addressing the
transport needs of vulnerable people. This initiative is being
spearheaded in partnership with the Wimoov association, which
offers mobility advice and solutions to 7,500 people a year (2), 50%
of whom find jobs or new employment. TOTAL and Wimoov jointly
created the Inclusive Mobility Laboratory, which focuses on the
global recognition of mobility advisors and innovative services
available to vulnerable groups, including local support via
community services and tailored digital solutions that bring together
transport operators and players in the social economy. The call for
projects issued in partnership with the French Ministry for the City,
Youth and Sport (Experimental Youth Development Fund) has made
it possible to fund and support, via the Agence nouvelle des
Solidarités actives (new agency for active inclusion), 16 innovative
youth initiatives throughout France until the end of 2016.
Finally, TOTAL launched service stations with reduced investment
and operating costs for municipalities according to a social
business model intended to facilitate access to fuel in rural areas
in France.
3.5. Partnerships and philanthropy
In addition to the societal initiatives that are directly related to the
Group’s industrial activities, TOTAL has also been committed for over
20 years to taking general-interest measures in the countries where
it has operations. These actions are essentially conducted by the
Total Foundation and the Philanthropy Department of TOTAL S.A.
3.5.1. Total Foundation
For the period of 2013-2017, the Group has renewed its
commitment to its foundation, which has a five-year budget of
€50 million. The Total Foundation is active in four fields: health,
solidarity, oceans and marine biodiversity, culture and heritage.
In the health field, the Group has been a partner of the Pasteur
Institute since 2005. The aim of this partnership, renewed for 2015
to 2017, is to support the fight against childhood diseases through
research programs and field actions in partnership with the Group’s
subsidiaries. Projects are focused on providing training to local
actors and are mainly carried out in Africa and South-East Asia.
In the field of solidarity, the Total Foundation encourages Group
employees to engage with the community through support for
projects championed by non-profit organizations with which they
volunteer on a personal basis. In 2016, the Foundation supported
46 employee projects in 25 countries.
With regard to marine biodiversity, the Total Foundation funds
research programs undertaken to improve knowledge about marine
species and ecosystems and challenges related to their protection
and enhancement. For the 54 projects supported in 2016, the
Foundation ensures the sharing of knowledge through awareness
and education campaigns.
In the culture and heritage field, the Total Foundation partly funded
11 exhibitions in 2016 that helped to showcase the cultures of the
countries in which the Group operates. In 2015, the Total
Foundation and the Fondation du Patrimoine (heritage foundation)
renewed their partnership for the fourth time for the 2015-2017
period. The partnership primarily focuses its activities on the
rehabilitation of the country’s industrial, craft, port and maritime
heritage converted for sociocultural purposes and on work sites
designed to further professional training and social integration.
Since 2006, over 180 projects, including 35 worksites for
employment integration (or including social integration clauses), set
up across France have received nearly €22 million in funding from
this partnership. In 2016, 8 new worksites of this kind have been
supported by Total Foundation for an amount of €795,000.
3.5.2. TOTAL S.A. philanthropy
In the field of solidarity, the Philanthropy Department has forged a
number of major institutional partnerships in France. Since 2009, it
has worked with the French government and the ministry responsible
for youth to promote the social, professional and civic integration of
young people. This program, developed under the “La France
s’engage” label, has benefited over one million people since 2014.
This partnership, with an overall budget of €60 million and the
experimental youth development fund as its primary technical and
financial tool, has enabled the financing of 31 projects in 2016.
In the marine field, the Group has been a partner of the French
Society of Sea Rescuers (SNSM) since 2008. Through its funding
and expertise, it plays a role in improving the safety of rescue
operations and training volunteers. Thanks to its support, the Sea
Rescuers have a center equipped with a state-of-the-art navigation
and vessel handling simulator. Each year, over 500 rescuers have
access to this training.
In the field of culture, convinced that access to culture from a very
young age is key to self-confidence and respect for others, the
Group supports numerous initiatives designed to instruct young people
in the worlds of art and culture. In total, nearly 100,000 children
from metropolitan France and the Overseas Departments have
benefited from these projects.
(1) Source: Anah.
(2) Source: Wimoov.
166
TOTAL. Registration Document 2016
Social, environmental and societal information 7
Societal information
3.6. Contractors and suppliers
TOTAL’s activities generate hundreds of thousands of direct and
indirect jobs worldwide. The Group’s purchases of goods and
services (excluding oil products) represented approximately $34 billion
worldwide in 2016. Approximately 25% of these expenditures were
for goods (e.g., products, materials) and approximately 75% were
for services (including consulting services, work with supply of materials
and transport). The number of hours worked by subcontractors is
monitored for large projects. This involves a range of environmental,
social and societal impact concerns addressed by TOTAL when
dealing with its suppliers via its principles, purchasing commitments
and sustainable procurement initiatives.
TOTAL’s societal commitment is shared by the Group’s employees,
partners, customers and suppliers, in particular by employing more
local staff and subcontracting more work to local businesses
wherever the operating constraints of its activities allow. The Group’s
societal directive stipulates that purchasing processes must be
adapted as required in cases where a societal action plan has been
implemented.
TOTAL has created a map of the CSR risks and opportunities in the
Group’s main purchasing categories to identify key issues in three
areas: ethics and human rights, environmental impact and the creation
of value with local communities. Pilot projects were implemented in
certain purchasing categories to integrate the monitoring of CSR
aspects into the purchasing process through concrete measures:
specific questionnaire focusing on the Fundamental Principles of
Purchasing, drafting of suitable contract clauses, good practices
factsheets for purchases from the disabled and sheltered
employment sectors, organization of a workshop with internal
experts on the climate and energy efficiency in preparation of a
global request for proposals on the air transportation of passengers,
and creation of a guide for buyers on how to calculate the total cost
of utilization (TCU) for support boat services and thereby assess
commercial solutions with greater accuracy.
3.6.1. Monitoring responsible practices
among suppliers
In its Code of Conduct, TOTAL states that it works with its suppliers
to ensure the protection of the interests of both parties on the basis
of clear and fairly negotiated contractual conditions. This
relationship is founded on three key principles: dialogue,
professionalism and adherence to commitments.
TOTAL expects its suppliers to:
– adhere to principles equivalent to those in its own Code of
Conduct, such as those set out in the Fundamental Principles of
Purchasing directive; and
– agree to be audited, be particularly attentive to the human rights-
related aspects of their standards and procedures, in particular
their employees’ working conditions, and ensure that their own
suppliers and contractors respect equivalent principles.
The Fundamental Principles of Purchasing, launched in 2010 and
formally set out in a Group directive in 2014, specify the
commitments that TOTAL expects of its suppliers in the following
areas: respect for human rights at work, health protection, assurance
of safety and security, preservation of the environment, prevention
of corruption, conflicts of interest and fraud, respect for competition
law, as well as the promotion of economic and social development.
TOTAL’s suppliers must be made aware of these rules, which apply
to all the Group’s companies, by including or transposing them into
the agreements concluded with these suppliers. These principles
are available for consultation by all suppliers in both French and
English on TOTAL’s website (under “Suppliers”).
Questionnaires focused on environmental and societal issues are
used to gather more in-depth information from suppliers about their
approach to these subjects, either during qualification or as part of
an audit. Supplier relations are also considered from an
environmental and societal perspective on occasion as part of
ethical assessments of Group subsidiaries and entities undertaken
by GoodCorporation (refer to point 3.7.2 of this chapter) in all
continents in which the Group is present. In 2016, TOTAL also
signed a contract with an auditing firm specializing in working
conditions with the aim of developing support for suppliers in this
particular area. The first audits have been completed in 2016.
In 2015, TOTAL signed an agreement with the worldwide trade
union federation, IndustriALL Global Union, which marks a major
step in TOTAL’s commitment as a responsible employer (refer to
point 1.3 of this chapter). In addition, TOTAL is committed to
disclosing and promoting the principles of this agreement to its
service providers and suppliers.
The Group also pursued a number of one-off initiatives in 2016.
For example, Marketing & Services held two awareness-raising
sessions to train buyers on how to evaluate suppliers in terms of
CSR, sustainable development and respect for human rights at work.
The deployment of the anti-corruption policy in purchasing continued
in 2016 with the dispatching of specific questionnaires to select
suppliers and, in some cases, external controls. In 2015,
Refining & Chemicals ramped up the deployment of this policy and
analyzed over 3,000 suppliers. Slightly more than 300 suppliers had
to complete and sign a detailed questionnaire. This process
continued in 2016 with over 800 suppliers analyzed and over 80
questionnaires sent out. In parallele, an initiative was launched in 2014
in which service providers working on Group sites were asked to take
a training module similar to the Group’s anti-corruption e-learning
module. CDs of this e-learning course were also distributed by
several entities to their suppliers. For further information on the
prevention of corruption, refer to point 3.7.1 of this chapter.
In addition, pursuant to Rule 13p-1 of the Securities Exchange Act
of 1934, as amended, which implemented certain provisions of the
Dodd-Frank Wall Street Reform and Consumer Protection Act of
2010, TOTAL has submitted since 2014 to the SEC an annual
document relating to certain minerals (deemed “conflict minerals” (1)
by this Rule) sourced from the Democratic Republic of the Congo
Registration Document 2016. TOTAL
167
7 Social, environmental and societal information
Societal information
or a neighboring country. The document indicates whether TOTAL
S.A. Or one of its affiliates had, during the preceding calendar year,
used any such minerals that were necessary to the functionality or
production of a product manufactured or contracted to be
manufactured by the Group. The document also states whether
such minerals were sourced from the Democratic Republic of the
Congo or a neighboring country. The main objective of the rule’s
obligation to publish this information is to prevent the direct or
indirect funding of armed groups in central Africa. For more
information, refer to TOTAL’s most recent publication available at:
http://www.sustainable-performance.total.com / fr / enjeux / supply-
chain-management or http://www.sec.gov / .
3.6.2. Promoting sustainable procurement
An interdisciplinary working group dedicated to the issue of
sustainable procurement is tasked with strengthening TOTAL’s
policy in this area based on initiatives developed by each segment.
As part of the work pursued by the Association française des
entreprises privées (AFEP) in 2016, TOTAL presented an action
program for 2017-2020 targeting the circular economy, which
includes a circular economy-based criterion in the relevant
purchasing categories.
In addition to the Human Rights information document that TOTAL
published in July 2016, the Group updated its “human rights”
roadmap to include the commitments taken by the Purchasing
function to raise awareness among buyers and suppliers (refer to
point 3.7.2 of this chapter).
The Group’s buyers take part in international working groups on
sustainable procurement. TOTAL is an active member of IPIECA’s
Supply Chain Task Force. Building on the workshops held in 2015,
TOTAL participated in a special workshop on Operationalization of
the UN Guiding Principles organized by the IPIECA in March 2016,
aimed at both oil and gas companies and engineering,
procurement, construction (EPC) contractors. TOTAL is also
represented in the French delegation involved in the international
discussions considering the forthcoming ISO 20400 standard on
sustainable procurement. The aim of this standard is to transpose
the concept of social responsibility – as defined in ISO 26000 – to
purchasing activities. Forty-one countries from every continent, as
well as international organizations such as the OECD, the UN and the
International Labour Organization, are involved in drafting this standard.
Sustainable procurement targets are integrated into the central
buyers’ annual appraisals. Practical tools have been developed
and are available for all employees on the intranet in the
Sustainable Procurement community (country factsheets on local
laws and regulations, internal feedback and methodology sheets
on human rights).
In 2016, TOTAL decided to dedicate the second edition of its
Business Ethics Day to the supply chain. This initiative alerted
employees and especially buyers to the issues of human rights and
the prevention of corruption in the supply chain. Various events were
held at the Group’s headquarters and subsidiaries. A brochure
designed to explain the Fundamental Principles of Purchasing to
employees and suppliers was handed out to the workforce and
uploaded to the intranet. A video of the interview with the Chairman
and Chief Executive Officer was widely disseminated over the intranet
to spread the word about TOTAL’s commitment. This video contains
a discussion about the feedback from a major TOTAL supplier.
As part of the Corporate Purchasing training program for new
purchasing hires, an induction e-learning course entitled
“Purchasing at Total” reiterates the Group’s ethical commitments
and the Fundamental Principles of Purchasing. “Purchasing St@rt”,
a course featuring a mix of virtual classes and e-learning modules,
follows on from the Corporate Purchasing training program and
once again addresses the issue of compliance and Corporate
Social Responsibility in customer relationship management. The
first session of “Purchasing St@rt” was held in 2016 with a dozen
other sessions lined up for 2017.
In France, the Group’s purchases from the disabled and protected
employment sectors enabled the achievement of an indirect
employment rate of nearly 1% in 2016. TOTAL is a member of the
Pas@Pas association and provides its buyers with an online
directory that can be used to identify potential suppliers and service
providers from the disabled or protected employment sectors by
geographical area and by category.
3.6.3. Acting as a responsible partner
in relation with suppliers
TOTAL received the “Responsible supplier relationships” label in
2014 (maintained in 2015 and 2016) for its Holding and
Marketing & Services activities in France. This label, awarded by the
French authorities, recognizes companies that maintain sustainable
and balanced relationships with their suppliers.
The general terms and conditions of purchase were updated in
2014 to ensure a sharper focus on balanced contractual relations.
This balance is monitored in particular by an interdisciplinary
working group dedicated to the issue of payment terms, set up in
2014. It involves the Purchasing and Finance departments at the
French head offices of all the Group’s business segments. The aim
is for monitoring payment times, reporting and improving the
processing of invoices.
The breakdown of TOTAL S.A.’s accounts payable as of December 31,
2016 and December 31, 2015, in application of the provisions of
Article D. 441-4 of the French Commercial Code, is as follows:
(in M€) 2016
Group Non- Total
Group
Balance 295 907 1,202
Overdue as of December 31 17 2 19
0 to 30 days 189 162 351
Over 30 days 0 379 379
Not yet received 89 364 453
(in M€) 2015
Group Non- Total
Group
Balance 307 930 1,237
Overdue as of December 31 3 1 4
0 to 30 days 228 177 405
Over 30 days 0 348 348
Not yet received 76 404 480
(1) Rule 13p-1 defines “conflict minerals“ as follows (irrespective of their geographical origin): columbite-tantalite (coltan), cassiterite, gold, wolframite and their derivatives, which are limited to
tantalum, tin and tungsten.
168
TOTAL. Registration Document 2016
TOTAL supports its suppliers in the different countries in which it
does business. For example, Total E&P Congo (TEPC) organized
five training sessions in the Republic of the Congo to help 75 local
SMEs prepare more effectively in responding to a request for
proposals. In addition, the subsidiary is taking part in a program to
providing welding training for 20 welders from four local SMEs. A
partnership has already been signed with a local center to provide
training for electricity students. Finally, in order to give its major
technical suppliers a clearer insight into SMEs and their expertise, a
day event entitled “Discovering the skills and expertise of local
industrial SMEs” was organized in November 2016. Close to 30
local SMEs, approximately 100 TEPC technicians, TEPC service
providers and several large organizations took part.
In the United Kingdom, Total E&P UK (TEPUK) organized a HSE
“Suppliers Day” event in 2016 featuring approximately 15 main
suppliers. Every year, TEPUK also takes part in the “Share Fair”
event staged by Oil & Gas UK (association whose members include
oil and gas operators and suppliers in the UK). During the event,
TEPUK presents its activities, its development and procurement
program and its HSE and ethical requirements. The 2016 edition
attracted 650 participants and gave TEPUK chance to carry out
approximately 50 speed meetings. TEPUK received the award for
excellence from both Oil & Gas UK and Oil & Gas Authority for its
level of conformity to the supply chain code of practice.
Regarding the support given to French SMEs, TOTAL is a member
of the “Pacte PME” association and was positively rated by its
Monitoring Committee in 2016. One example is the support that the
Group gives to the international development of SMEs, occasionally
including its own suppliers, through Total Développement Régional
(refer to point 3.4.2 of this chapter).
3.7. Fair operating practices
3.7.1. Preventing corruption
The oil industry must be particularly vigilant concerning the risk of
corruption, especially given the scale of investments and the number
of countries in which operations are conducted. Preventing corruption
is therefore a major challenge for the Group and all its employees.
TOTAL’s stance on the issue of corruption is based on the
principles set out in its Code of Conduct: “The Group adopts a
(cid:2)zero tolerance’ approach to corruption and adheres to the strictest
integrity standards”. This Code 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 the Company’s stakeholders.
In it, TOTAL also reiterates its support for the OECD Guidelines and
the Tenth Principle of the United Nations Global Compact, which urges
businesses to work against corruption in all its forms.
The Group’s commitment has led to a number of actions, including:
– the adoption by the Executive Committee in 2009 of a corruption
prevention policy and the implementation of a dedicated
compliance program. This policy was updated in 2016 to reaffirm
the Group’s commitment to prevent corruption; and
– the establishment of a specific organization including, in
particular, a Compliance and Social Responsibility Department,
which is responsible for rolling out a robust anti-corruption
Social, environmental and societal information 7
Societal information
The identification of innovative SME suppliers takes place through
the appointment of innovation correspondents within each
Purchasing department of TOTAL’s business segments, the use of
the Pacte PME open innovation platform, and participation in
events such as BPI France Inno Génération in May 2016.
In July 2016, a Suppliers Day concerning specialized IT services
allowed 60 recently selected vendors to present their company and
service range during a series of speed meetings at the head office
in La Défense.
To contribute toward the development of good practices in
business relations, TOTAL launched an initiative to raise its
employees’ awareness of mediation as an alternative method for
resolving disputes. Each year since 2013, a training day run by
professional mediators to raise awareness of mediation has been
organized in French and English. In 2016, two sessions were held,
with one in Abidjan and the other in Singapore. Each session brings
together employees of the Group, lawyers and suppliers. This day
enables employees to gain an understanding of mediation and its
advantages, in particular in cementing long-term business relations,
and includes practical exercises. A brochure designed to increase
awareness of the mediation process is also made available to all
employees. In addition, an email address is available on the Group
website (under “Suppliers”). It can be used to contact the Group’s
internal mediator, whose task is to facilitate relations between the
Group and its French and international suppliers. Finally, the general
purchase terms and conditions also mention the possibility of
recourse to mediation.
compliance program via a network of more than 370 Compliance
Officers wherever TOTAL operates.
The corruption prevention program includes:
– a framework of internal rules that allow employees, with the
support of their Compliance Officer, to identify risk situations,
conduct due diligence and implement appropriate actions. The
adopted rules especially encompass representatives dealing with
public officials, purchasing / sales, gifts / invitations,
donations / philanthropy, acquisitions / divestments, joint ventures,
conflicts of interest and Human Resources;
– activities designed to raise awareness among all employees: an
initial e-learning course was rolled out in 2011 in 12 languages,
followed by a more in-depth e-learning module in late 2015. This
module is accessible to all employees and mandatory for the
target groups (approximately 30,000 employees);
– more targeted training activities intended for the most highly
exposed positions (particularly for implementation of new rules)
and in-depth training for all Compliance Officers;
– the prohibition of “facilitation payments”;
– regular reporting and incident feedback mechanisms, including
an ethics alert system;
– audits dedicated to compliance (six to eight per year) covering all
the Group’s activities. These audits are followed up the next year
to verify that the formulated recommendations have been
implemented. In addition, missions carried out by the Group
Audit Department include, depending on their purpose, controls
Registration Document 2016. TOTAL
169
7 Social, environmental and societal information
Societal information
to ensure compliance processes are being followed; and
– the application of suitable sanctions.
In 2016, significant internal communications took place to
emphasize once again the importance that the Group attaches to
these issues. For the UN’s International Anti-Corruption Day and
International Human Rights Day (both observed annually in
December), TOTAL held the second edition of the Business Ethics
Day, which focused on these two themes as part of the supply
chain. This event was organized at the Group level and relayed
locally by the subsidiaries to remind employees how to react
appropriately and to encourage dialogue.
Under the settlements reached in 2013 between TOTAL, the U.S.
Securities and Exchange Commission and the U.S. Department of
Justice, an independent monitor was appointed for three years to
conduct a review of anti-corruption compliance and related internal
control procedures implemented by the Group and to recommend
improvements, when necessary. In July 2016, the monitor
submitted his third and final report, in which he certified that TOTAL
has devised and implemented an appropriate compliance program.
As a result of this certification, the U.S. authorities, after having
reviewed the monitor’s report, concluded that TOTAL has fulfilled all
of its obligations, thus bringing an end to the monitoring process.
As a result, a court in the State of Virginia granted a motion to
dismiss on November 9, 2016, thereby terminating the procedure
directed at the Company, which can no longer be pursued in the
United States for these same facts. The Group is continuing to
empower all employees and maintain its efforts in a bid to ensure
the sustainability, development and continual improvement of this
compliance program.
3.7.2. Respect for human rights
Activities of companies can affect the human rights of employees,
suppliers and partners, customers, local communities and other
stakeholders in numerous ways. TOTAL’s proactive approach to
human rights reflects its ethical commitment and helps to establish
and maintain successful relationships with all stakeholders, which is
essential for the Group to operate effectively.
TOTAL’s approach to respect for human rights is based on several
pillars, described below.
Written commitments
The Group’s Code of Conduct was revised in 2014 to reinforce
TOTAL’s commitments in terms of respect for human rights. It sets
out the Group’s adherence to international standards such as the
UN Guiding Principles on Business and Human Rights and the
Voluntary Principles on Security and Human Rights (VPSHR). In the
event of any discrepancy between legal provisions and the Code of
Conduct, the highest standard of protection of human rights applies.
Respect for human rights is one of the Group’s priority business
principles, alongside integrity (preventing corruption and fraud and
anti-competitive practices) and HSE standards. The Group ensures
that employees’ rights are protected and prohibits any form of
discrimination against them, including due to sexual orientation or
identity. It demands that they themselves respect human rights.
TOTAL also expects its suppliers to respect standards equivalent to
its own and pay particular attention to their employees’ working
conditions. In particular in 2015 TOTAL signed a global agreement
with the worldwide trade union federation, IndustriALL Global
Union, which represents 50 million employees in 140 countries.
Under this agreement, the Group is committed to maintaining
minimum Corporate Social Responsibility (CSR) standards and
guarantees worldwide for subsidiaries in which it has more than a
50% stake. The Group also ensures that the principles of the
agreement on health, safety and human rights are disclosed to and
promoted among its service providers and suppliers. The
implementation of this agreement is monitored annually (refer to
point 1.3 of this chapter).
Furthermore, while respecting the sovereignty of the host countries
in which it operates, the Group reserves the right to express its
conviction on the importance of respecting human rights in matters
concerning it. Finally, TOTAL respects the rights of local
communities by identifying, preventing and limiting the impacts of
its activities on their way of life and remediating them.
Some of these principles are set out in the “To find out more”
section of the Code of Conduct and are detailed in TOTAL’s Human
Rights Guide, as updated in 2015 (available in English and French
at total.com).
In 2013, the Group developed a strategic human rights roadmap to
better integrate respect for human rights into its various risk and
impact management systems. The roadmap, approved by the
Executive Committee, has been implemented by various Group
entities. For example, easy-to-use auto-diagnostic and self-
assessment tools for VPSHR risks for use by subsidiaries have
been developed and were the subject of a pilot deployment in 2016
in 20 exposed entities. This roadmap has been updated for 2016-
2018 in order to continue the efforts already made by the Group. It
proposes actions to:
– integrate respect for human rights more globally into operational
decisions at the local level;
– improve management’s awareness level and accountability with
regard to human rights at all levels of the company; and
– strengthen the analysis process and action and monitoring plans
in the Group’s at-risk entities.
A dedicated organization
The Ethics Committee and the Ethics and Human Rights unit advise
employees, help operatives and monitor efforts to promote respect
for human rights. In particular, they run a human rights Committee
that coordinates the actions taken internally and externally by
the various Group entities. The Ethics Committee is a central,
independent structure that represents all of TOTAL’s business
segments. Its role is to listen and support. Both employees and
people outside the Group can refer matters to it by email at
ethics@total.com. The Committee maintains confidentiality with
regard to referrals, which can only be lifted with the agreement of
the person in question. At the local level, mechanisms for handling
grievances raised by local communities are also implemented by
subsidiaries exposed to societal risks (refer to point 3.3.2
of this chapter).
Awareness and training
To ensure its adopted principles are disseminated in-house, TOTAL
raises employee awareness via corporate communications
channels, such as a group for sharing best practices and
challenges in the area of respect for human rights accessible to
Group employees on the TOTAL intranet, and through events such
170
TOTAL. Registration Document 2016
as the annual Business Ethics Day (refer to point 3.7.1 of this
chapter). The theme of this day event in 2016 focused on
challenges in terms of human rights and anti-corruption in the
supply chain. On this occasion an awareness-raising brochure was
circulated on the Fundamental Principles of Purchasing, which
include human rights. The Group has also produced several videos
on three human rights topics that are key for TOTAL: responsible
security, prevention of societal impacts on local communities, and
working conditions, both for its own employees and within its
supply chain. The Group also offers some employees special
training tailored to the challenges faced in the field, such as the
Responsible Leadership for a Sustainable Business program.
Finally, actions are taken to raise awareness among the Group’s
external stakeholders, such as training related to the VPSHR for its
security providers.
Assessments and reporting
Tools are used to regularly assess the subsidiaries’ human rights
practices and the risks they may have to face. Their objective is to
analyze the societal impacts of a project at the local level or to verify
that the subsidiaries’ practices are in line with the Group’s ethical
standards. TOTAL commissions approximately 10 ethical
assessments per year, with more than 120 subsidiaries evaluated
since 2002. These assessments are undertaken by
GoodCorporation (GoodCorp), a qualified ethics expert. Certain
assessments are also conducted in partnership with the Danish
Institute for Human Rights, a Danish public non-profit organization.
A reference catalog containing approximately 90 questions relating
to human rights, labor law and rules on competition, is used on
site, and numerous internal and external stakeholders are
interviewed by GoodCorp over the course of several weeks.
GoodCorp then issues a final report identifying points requiring
improvement and good practices. The entity is then given several
months to correct any issues that have been identified. A follow-up
report is issued by GoodCorp for the subsidiaries that were
assessed. Other non-profit partner organizations, such as the CDA
Corporate Engagement Project, also contribute by evaluating the
societal impact of the Group’s activities on nearby local
communities, for example by surveying the populations in question.
CDA’s reports are published online on their website. In July 2016,
TOTAL published a dedicated human rights report (available at
www.sustainable-performance.total.com) based on the UN Guiding
Principles Reporting Framework – becoming the first oil & gas
company to do so. This information document presents TOTAL’s
approach to integrate respect for human rights into its operations
and business relations. It focuses on the three key topics for the
Group and presents the most important subjects for each topic:
– human rights in the workplace, concerning TOTAL’s employees
but also those of its suppliers, contractors, partners, and those
of their subcontractors. The subjects identified are forced labor
and child labor, discrimination, fair and just working conditions
and safety;
– human rights and local communities, concerning the impact of
its activities on the communities in countries where TOTAL is
present and including issues of access to land and the right to
health and an adequate standard of living; and
– human rights and security, concerning measures to protect
against the risks and threats to which the Group’s employees
and facilities are exposed, while ensuring that the risk of
disproportionate use of force is avoided.
Social, environmental and societal information 7
Societal information
For each of these subject areas, the information document
summarizes TOTAL’s policies, the training and awareness-raising
actions taken, and the due diligence measures implemented in
response to the identified issues.
Participation in external initiatives
TOTAL is actively involved in numerous initiatives and working
groups on human rights that bring together various stakeholders
including Global Compact, Global Compact LEAD (initiative for
sustainable leadership), Global Business Initiative on Human Rights,
IPIECA, VPSHR and non-profit organizations such as Shift.
3.7.3. Consumer health and safety
Many of the products that TOTAL markets pose potential risks; for
example, if they are used incorrectly. The Group therefore aims to
meet its current and future obligations with regard to information
and prevention in order to minimize the risks throughout its products’
life cycle. TOTAL’s health and products directive sets outs the minimum
requirements for marketing the Group’s products worldwide in order
to reduce potential risks to consumer health and the environment.
TOTAL identifies and assesses the risks inherent to 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.
Registration Document 2016. TOTAL
171
7 Social, environmental and societal information
Reporting scopes and method
4. Reporting scopes and method
4.1. Reporting guidance
The Group’s reporting is based:
– for environmental indicators, on a Group reporting procedure,
– for social indicators, on a practical handbook titled “Corporate
together with segment-specific instructions.
Social Reporting Protocol and Method”;
– for Industrial Safety indicators, on the Corporate Guidance on
These documents are available to all TOTAL companies and can be
consulted at Corporate headquarters, in the relevant departments.
Event and Statistical Reporting; and
4.2. Scopes
In 2016, environmental reporting covered all activities, sites and
industrial assets in which TOTAL S.A., or one of its companies
it controls, is the operator (i.e., either operates or contractually
manages the operations): 808 sites at year-end 2016. greenhouse
gas (GHG) emissions “based on the Group’s equity interest” are the
only data which are published for the “equity interest” scope. This
scope, which is different from the “operated domain” mentioned
above, includes all the assets in which the Group has a financial
interest or rights to production.
dialogue, Code of Conduct application, human rights, health,
compensation, retirement benefits and insurance. The survey
covers a representative sample of the consolidated scope. The
data published in this document are extracted from the most
recent survey, carried out in December 2016 and January 2017;
135 companies in 57 countries, representing 87.5% of the
consolidated Group workforce (89,365 employees) replied to the
survey. With regard to training only, this scope covers 84.7% of the
Group’s consolidated workforce and 132 companies.
Safety reporting covers all TOTAL employees, employees of
contractors working at Group-operated sites and employees of
transport companies under long-term contracts. Each site submits
its safety reporting to the relevant operational entity. The data is
then consolidated at the business level and every month at the Group
level. In 2016, the Group safety reporting scope covered 486 million
hours worked, equivalent to approximately 271,000 people.
Reporting on occupational illnesses follows the scope of the
Worldwide Human Resources Survey (see below).
Social reporting is based on two surveys: the Global Workforce
Analysis, and the complementary Worldwide Human Resources
Survey. Two centralized tools (Sogreat and HR4U) facilitate
performance of the above surveys.
The Global Workforce Analysis is conducted twice a year, on
June 30 and December 31, in all fully consolidated companies at
least 50% owned and consolidated by the global integration
method. The survey mainly covers worldwide workforces, hiring
under permanent and fixed-term contracts (non-French equivalents
of contrats à durée déterminée or indéterminée) as well as
employee turnover. This survey produces a breakdown of the
workforce by gender, professional category (managers and other
employees), age and nationality.
The Worldwide Human Resources Survey (WHRS) is an annual
survey which comprises approximately 100 indicators in addition to
those used in the Global Workforce Analysis. The indicators are
selected in cooperation with the relevant counterparties and cover
major components of the Group Human Resources policy, such as
mobility, career management, training, work conditions, employee
4.2.1. Consolidation method
For the scopes defined above, safety indicators and social data are
fully consolidated. Environmental indicators consolidate 100% of
the emissions of Group operated sites for the “operated” indicators.
GHG emissions are also published on an equity interest basis, i.e.,
by consolidating the Group share of the emissions of all assets in
which the Group has a financial interest or rights to production.
4.2.2. Changes in scope
Social and environmental indicators are calculated on the basis of
the consolidated scope of the Group as of December 31, 2016.
Variations in scope between the Group’s different activities
associated with the new “One Total” organization will be integrated
in 2017. For 2016, social data have been reported based on the
existing structures at the entry date. These data are presented on
the basis of the operational business segments identified in the
2016 Consolidated Financial Statements.
For environmental indicators, acquisitions are taken into account as
from January 1 of the current year as far as possible or as from the
next fiscal year. Any facility sold before December 31 is excluded
from the Group’s reporting scope for the current year.
For safety indicators, acquisitions are taken into account as soon
as possible and at the latest on January 1 of the following year, and
divestments are taken into account at the end of the quarter
preceding their effective date of implementation.
172
TOTAL. Registration Document 2016
Social, environmental and societal information 7
Reporting scopes and method
4.3. Principles
4.3.1. Indicator selection and relevance
4.3.3. Methods
The data published in the Registration Document are intended to
inform stakeholders about TOTAL’s Corporate Social Responsibility
performance for the year in question. The environmental indicators
include Group performance indicators referring to the IPIECA
reporting guidelines, updated in 2015. The indicators have been
selected in order to monitor:
– TOTAL’s commitments and policies, and their effects on matters
The methods may be adjusted to reflect the diversity of TOTAL’s
activities, recent integration of subsidiaries, lack of regulations or
standardized international definitions, practical procedures for
collecting data, or changes in methods.
Restatement of previous years published data, unless there is a
specific statement, is now limited to changes of methodology.
of safety, environment, social, etc.;
4.3.4. Consolidation and internal controls
Environmental, social and industrial safety data are consolidated
and checked by each business unit and business segment, and
then at Group level. Data pertaining to certain specific indicators are
calculated directly by the business segments. These processes
undergo regular internal audits.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
– performance relative to TOTAL’s main challenges and impacts;
and
– information required by laws and regulations (Article L. 225-102-1
of the French Commercial Code).
4.3.2. Terminology used in social reporting
Outside of France, “management staff” refers to any employee
whose job level is the equivalent of 300 or more Hay points.
Permanent contracts correspond to contrats à durée indéterminée
(CDI) and fixed-term contracts to contrats à durée déterminée
(CDD), according to the terminology used in the Group’s social
reporting.
Managed scope: all subsidiaries in which one or more Group
companies own a stake of 50% or more, i.e., 495 companies in
124 countries as of December 31, 2016.
Consolidated scope: all companies fully consolidated by the
global integration method, i.e., 340 companies having employees in
104 countries as of December 31, 2016.
Employees present: employees present are employees on the payroll
of the consolidated scope, less employees who are not present, i.e.,
persons who are under suspended contract (sabbatical, business
development leave, etc.), absent on long-term sick leave (more than
six months), assigned to a company outside the Group, etc.
4.4. Details of certain indicators
4.4.1. Industrial Safety definitions and indicators
TRIR (Total Recordable Injury Rate): number of recorded injuries
per million hours worked.
Incidents and near misses are assessed in terms of actual or
potential severity based on a scale that consists of six levels.
Events with an actual or potential severity level of four or more are
considered serious.
LTIR (Lost Time Injury Rate): number of lost time injuries per million
hours worked.
4.4.2. Environmental indicators
SIR (Severity Injury Rate): average number of days lost per lost time
injury.
ISO sites: sites covered by an ISO 14001 certificate that is valid;
some certificates may cover several sites.
Employees of external contractors: any employee of a service
provider working at a Group-operated site or assigned by a
transport company under a long-term contract.
Tier 1 and Tier 2: indicator of the number of loss of primary
containment events, with more or less significant consequences,
as defined by the API 754 (for downstream) and IOGP 456 (for
upstream) standards.
Near miss: event which, under slightly different circumstances,
could have resulted in a serious accident. The term “potential
severity” is used for near misses.
Safety flaring: flaring to ensure the safe performance of operations
conducted at the production site.
Continuous flaring of associated gas: flaring during normal
production operations conducted in the absence of sufficient
facilities or adequate geological conditions permitting the
reinjection, on-site utilization or commercialization of produced gas.
Continuous flaring of associated gas includes neither safety flaring
nor very low pressure gas.
Registration Document 2016. TOTAL
173
7 Social, environmental and societal information
Reporting scopes and method
Routine flaring: flaring that includes the continuous flaring of
associated gas (see above) and very low pressure gas generated
during the production process, the reuse of which is neither
technically nor economically feasible. Continuous flaring does not
include safety flaring.
Fresh water: water with salinity below 1.5 g / l.
Hydrocarbon spills: spills with a volume greater than 1 barrel (159
liters) are counted. These are accidental spills of which at least part
of the volume spilled reaches the natural environment (including
non-waterproof ground). Spills resulting from sabotage or malicious
acts are included. Spills which remain in a confined watertight
containment system are excluded.
Waste: the contaminated soil excavated and removed from active
sites to be treated externally is counted as waste. However, drilling
debris, mining cuttings or soil polluted in inactive sites are not
reported as waste.
GEEI (Group Energy Efficiency Index): a combination of energy
intensity ratios (ratio of net primary energy consumption to the level
of activity) per business reduced to base 100 in 2010 and
consolidated with a weighting by each business’s net primary
energy consumption.
GHG: the six gases of the Kyoto protocol, which
are CO2, CH4, N2O, HFCs, PFCs and SF6, with their respective
GWP (Global Warming Potential) as described in the 2007 GIEC
report. PFCs and SF6 are virtually absent from the Group’s
emissions.
GHG based on the Group’s equity interest: GHG emissions of
non-significant assets are generally excluded, i.e., assets in which
the Group’s equity interest is less than 10% and for which the
Group share of emissions are less than 50 kt CO2 eq / year. For non-
operated assets, TOTAL relies on information provided by its
partner operators. In cases where this information is not available,
estimates are made based on past data, budget data or by pro rata
with similar assets.
GHG scope 1 emissions: direct GHG emissions from sources
located within the boundaries of a site coming under the operated
domain or in which TOTAL holds a financial interest.
GHG scope 2 emissions: indirect emissions attributable to
brought-in energy (electricity, heat, steam), excluding purchased
industrial gases (H2).
GHG scope 3 emissions: other indirect emissions. The Group
follows the Oil & Gas industry reporting guidelines published by
IPIECA and which conform to the GHG Protocol methodologies. In
this Registration Document, only item 11 of Scope 3 (use of sold
products), which is the most significant, is reported. Emissions for
this item are calculated based on sales of finished products for
which the next stage is end use, in other words combustion of the
products to obtain energy. A stoichiometric emission factor is
applied to these sales (oxidation of molecules to carbon dioxide) to
obtain an emission volume.
Material loss: this is represented by the following four indicators:
safety or operational gas flaring (Exploration & Production only),
cold venting (Exploration & Production only), total volume of oil and
gas discharged in wastewater (Exploration & Production and
Refining & Chemicals only), and accidental hydrocarbon spills.
Oil spill preparedness:
– an oil spill scenario is deemed “important” as soon as its
consequences are on a small scale and with limited impacts on
the environment (orders of magnitude of several hundred meters
of beaches impacted, and several tons of hydrocarbons);
– an oil spill preparedness plan is deemed operational if it
describes the alert mechanisms, if it is based on pollution
scenarios that stem from risk analyses and if it describes
mitigation strategies that are adapted to each scenario, if it
defines the technical and organizational means, internal and
external, to be implemented and, lastly, if it mentions elements to
be taken into account to implement a follow-up of the
environmental impacts of the pollution; and
– oil spill preparedness exercise: only exercises conducted on the
basis of one of the scenarios identified in the oil spill
preparedness plan and which are played out until the stage of
equipment deployment are included for this indicator.
174
TOTAL. Registration Document 2016
6.TOTAL et ses actionnaires
TOTAL and its shareholders
8
TOTAL and its shareholders
1. Listing details 178
1.1. Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .178
1.2. Share performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .179
2. Dividend 181
2.1. Dividend policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .181
2.2. Dividend payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .182
2.3. Coupons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .182
3. Share buybacks 183
3.1. Share buybacks and cancellations in 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .183
3.2. Board’s report on share buybacks and sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .183
3.3. 2017-2018 share buyback program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .185
4. Shareholders 187
4.1. Major shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .187
4.2. Employee shareholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .189
4.3. Shareholding structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .190
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
4.5. Factors likely to have an impact in the event of a public offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .190
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
6. Investor Relations 192
6.1. Documents on display . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .192
6.2. Relationships with institutional investors, financial analysts and individual shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . .192
6.3. Registered shareholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .193
6.4. 2017 calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .193
6.5. 2018 calendar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .193
6.6. Investor Relations contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .194
Registration Document 2016. TOTAL
177
1.1.7. Market capitalization
as of December 31, 2016 (1)
€118.4 billion (2)
$123.8 billion (3)
1.1.8. Percentage of free float
As of December 31, 2016, the free float factor determined by
Euronext for calculating TOTAL’s weight in the CAC 40 was 95%.
The free float factor determined by Stoxx for calculating TOTAL’s
weight in the Euro Stoxx 50 was 100%.
1.1.9. Par value
€2.50.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
8 TOTAL and its shareholders
Listing details
1. Listing details
1.1. Listing
1.1.1. Stock Exchanges
Paris, New York, London and Brussels.
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 and DJ Global Titans.
1.1.4. Included in the following ESG
(Environment, Social, Governance) indexes
DJSI World, DJSI Europe, FTSE4Good and Nasdaq Global
Sustainability.
1.1.5. Weighting in the main stock indexes
as of December 31, 2016
CAC 40 10.9% Largest component in the index
EURO STOXX 50 5.6% Largest component in the index
STOXX EUROPE 50 3.1% 6th largest component in the index
DJ GLOBAL TITANS 1.6% 29th largest component in the index
1.1.6. Market capitalization on Euronext Paris
and in the Euro zone as of December 31, 2016
TOTAL has the largest capitalization on the Euronext Paris
regulated market. Based on the market capitalization of the
companies that make up the Euro Stoxx 50, the largest market
capitalizations in the Euro zone are as follows (a):
As of December 31, 2016
(€B)
AB InBev
TOTAL (b)
Unilever
SAP SE
Industria de Diseno Textil
Siemens
203.0
118.4
116.5
101.7
101.1
99.3
(a) Source: Bloomberg for companies other than TOTAL.
(b) Shares composing the capital on December 31, 2016: 2,430,365,862. TOTAL closing
share price in Paris on December 31, 2016: €48.72.
(1) Shares composing the capital on December 31, 2016: 2,430,365,862.
(2) TOTAL closing share price in Paris on December 31, 2016: €48.72.
(3) TOTAL closing ADR price in New York on December 31, 2016: $50.97.
178
TOTAL. Registration Document 2016
TOTAL and its shareholders 8
Listing details
1.2. Share performance
TOTAL share price in Paris (2013-16)
(in euros)
TOTAL ADR price in New York (2013-16)
(in dollars)
TOTAL
CAC 40
Euro Stoxx 50
TOTAL US
Dow Jones
150
140
130
120
110
100
90
80
160
150
140
130
120
110
100
90
80
70
2013
2014
2015
2016
2013
2014
2015
2016
Base 100 in 2013.
Base 100 in 2013.
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, TOTAL’s Annual
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 the provisions of 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 Echos, 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 shares 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 20 years. After
this time limit, the amounts will permanently become the property of
the French State.
1.2.2. Change in share prices from January 1, 2016
to December 31, 2016
In Europe, for the major European oil companies
(closing price in local currency)
TOTAL (euro)
Royal Dutch Shell A (euro)
Royal Dutch Shell B (pound sterling)
BP (pound sterling)
ENI (euro)
Source: Bloomberg.
In the United States (ADR quotes
for European companies), for the major
international oil companies
(closing price in dollars)
TOTAL
ExxonMobil
Chevron
Royal Dutch Shell A
Royal Dutch Shell B
BP
ENI
Source: Bloomberg.
18.1%
23.2%
52.6%
44.0%
12.1%
13.4%
15.8%
30.8%
18.8%
25.9%
19.6%
8.2%
Registration Document 2016. TOTAL
179
8 TOTAL and its shareholders
Listing details
1.2.3. Annual total return
As of December 31, 2016, for every €1,000 invested in TOTAL shares by an individual residing in France, assuming that the net dividends
are reinvested in TOTAL shares, and excluding tax and social withholding:
Annual Value as of
total return December 31, 2016
of €1,000 invested
Investment length TOTAL (a) CAC 40 (b) TOTAL CAC 40
1 year 24.85% 8.78% 1,249 1,088
5 years 10.35% 12.92% 1,636 1,836
10 years 4.38% 2.41% 1,535 1,269
15 years 6.44% 3.71% 2,550 1,727
(a) TOTAL’s share prices, used for the calculation of the total return, take into account the adjustment made by Euronext Paris in 2006 following the detachment of Arkema’s share
allocation rights.
(b) CAC 40 quotes taken into account to calculate the total return include all dividends distributed by the companies that are in the index.
1.2.4. Market information summary
Share price
(€) 2016 2015 2014 2013 2012
Highest (during regular trading session) 48.89 50.30 54.71 45.67 42.97
Lowest (during regular trading session) 35.21 36.92 38.25 35.18 33.42
End of the year (closing) 48.72 41.27 42.52 44.53 39.01
Average of the last 30 trading sessions (closing) 46.22 43.57 44.32 43.60 38.73
Trading volume (average per session) (a)
Euronext Paris 6,508,817 7,412,179 5,519,597 4,439,725 5,622,504
NYSE (number of ADRs) 2,109,802 1,853,669 1,277,433 1,371,780 3,291,705
(a) Number of shares traded. Source: Euronext Paris, NYSE, composite price.
TOTAL share price at closing on Euronext Paris
(€)
2015
2016
2017
55
50
45
40
35
30
TOTAL average daily volume traded on Euronext Paris
(in millions of shares)
2015
9.62
2016
9.85
9.42
7.84
7.37 7.22
7.25
7.69 7.77 7.60
7.91
6.27
6.47
5.95
7.95
7.30
6.42
5.21
5.05
4.00
2017
6.33
6.38
5.18 5.47
4.50 4.81
J a n u ary
F e bru ary
M arc h
A pril
M ay
J u n e
J uly
180
TOTAL. Registration Document 2016
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
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
TOTAL and its shareholders 8Dividend
2. Dividend
2.1. Dividend policy
2.1.1. Dividend payment policy
On October 28, 2010, TOTAL S.A.’s Board of Directors adopted a
policy based on quarterly dividend payments starting in fiscal year
2011.
2.1.2. Fiscal years 2016 and 2017 dividends
TOTAL has paid the following quarterly interim dividends with
respect to fiscal year 2016:
– on September 21, 2016, the Board of Directors decided on the
payment of the first quarterly interim dividend of €0.61 per share.
The ex-dividend date was September 27, 2016 and the payment
in cash or new shares was made on October 14, 2016. The
issuance price of these newly issued shares was set by the
Board of Directors on September 21, 2016 at €38.00 per share,
equal to 90% of the average Euronext Paris opening price of the
shares for the 20 trading days preceding the Board of Directors
meeting, reduced by the amount of the first interim dividend;
– on December 15, 2016, the Board of Directors decided on the
payment of the second interim dividend of €0.61 per share. The
ex-dividend date was December 21, 2016 and the payment in
cash or new shares was made on January 12, 2017. The
issuance price of these newly issued shares was set by the
Board on December 15, 2016 at €41.87 per share, equal to
95% of the average Euronext Paris opening price of the shares
for the 20 trading days preceding the Board of Directors meeting,
reduced by the amount of the second interim dividend.
The third quarterly interim dividend of €0.61 per share for fiscal
year 2016, the payment of which was decided by the Board of
Directors on March 15, 2017, will be paid on April 6, 2017 (the ex-
dividend date will be March 20, 2017) in cash or in new shares of
the Company.
After closing the 2016 statutory accounts, the Board of Directors
decided on February 8, 2017, to propose to the Annual
Shareholders’ Meeting on May 26, 2017 an annual dividend of
€2.45 per share for fiscal year 2016. Taking into account the
interim dividends for the first three quarters of 2016 decided by the
Board of Directors, the remaining 2016 dividend is €0.62 per share,
a 1.6% increase compared to the previous three quaterly dividends.
The Board of Directors also decided to propose to the shareholders
the option of receiving the remaining 2016 dividend payment in new
shares of the Company. Pending the approval at the Annual
Shareholders’ Meeting, the ex-dividend date would be June 5, 2017,
and the payment date for the cash dividend or the delivery of the
new shares, depending on the election of the shareholder, would
be set for June 22, 2017.
Subject to the applicable legislative and regulatory provisions, and
pending the approval by the Board of Directors and the
shareholders at the Shareholders’ Meeting for the statutory
accounts and the remaining dividend, the ex-date calendar for the
interim quarterly dividends and the final dividend for fiscal year 2017
is expected to be as follows:
– 1st interim dividend: September 25, 2017;
– 2nd interim dividend: December 19, 2017;
– 3rd interim dividend: March 19, 2018; and
– remaining dividend: June 11, 2018.
The provisional ex-dividend dates above relate to the TOTAL shares
traded on Euronext Paris.
Dividends for the last five fiscal years (1)
(in euros)
2.34€
2.38€
2.44€
2.44€
2.45€
2012
2013
2014
2015
2016
Remainder
Interim dividend
In 2016, TOTAL’s pay-out ratio was 80% (2). Changes in the pay-out
ratio (3) over the past five fiscal years are as follows:
80%
58%
60%
50%
43%
2012
2013
2014
2015
2016
(1) Pending approval at the May 26, 2017 Shareholders’ Meeting. Dividends are eligible for the 40% rebate applicable to individuals residing in France for tax purposes, as stipulated in Article 158
of the French General Tax Code.
(2) Based on adjusted fully diluted earnings per share of €3.06 and a dividend of €2.45 per share pending approval at the May 26, 2017 Shareholders’ Meeting.
(3) Based on adjusted fully diluted earnings for the relevant year.
Registration Document 2016. TOTAL
181
8 TOTAL and its shareholders
Dividend
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.
JP Morgan Chase Bank (4 New York Plaza, New York, NY 10005-1401, 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 Total
Petrochemicals & Refining SA / NV (formerly PetroFina) shares.
The CR is a stock certificate provided for by French rules, issued by Euroclear France, intended to circulate exclusively outside of France,
and which may not be held by French residents. The CR is freely convertible from a physical certificate into a security registered on a custody
account and vice-versa. However, in compliance with 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 as of January 1, 2008. In addition, ING Belgique is the bank handling
the payment of all coupons detached from outstanding CRs.
No fees are applicable to the payment of coupons detached from CRs, except for any income or withholding taxes; the payment may be
received on request at the following bank branches:
ING Belgique
BNP Paribas Fortis Avenue des Arts 45, 1040 Brussels, Belgium
KBC BANK N.V.
Avenue Marnix 24, 1000 Brussels, Belgium
Avenue du Port 2, 1080 Brussels, Belgium
2.3. Coupons
For the year ended
December 31
Ex-dividend
date
Date of
payment
Date of
expiration
Type of
coupon
Net amount
(€)
2010
2011
2012
2013
2014
2015
2016 (a)
11 / 12 / 2010
05 / 23 / 2011
09 / 19 / 2011
12 / 19 / 2011
03 / 19 / 2012
06 / 18 / 2012
09 / 24 / 2012
12 / 17 / 2012
03 / 18 / 2013
06 / 24 / 2013
09 / 24 / 2013
12 / 16 / 2013
03 / 24 / 2014
06 /0 2 / 2014
09 / 23 / 2014
12 / 15 / 2014
03 / 23 / 2015
06 /0 8 / 2015
09 / 28 / 2015
12 / 21 / 2015
03 / 21 / 2016
06 / 06 / 2016
11 / 17 / 2010
05 / 26 / 2011
09 / 22 / 2011
12 / 22 / 2011
03 / 22 / 2012
06 / 21 / 2012
09 / 27 / 2012
12 / 20 / 2012
03 / 21 / 2013
06 / 27 / 2013
09 / 27 / 2013
12 / 19 / 2013
03 / 27 / 2014
06 /0 5 / 2014
09 / 26 / 2014
12 / 17 / 2014
03 / 25 / 2015
07 /0 1 / 2015
10 / 21 / 2015
01 / 14 / 2016
04 / 12 / 2016
06 / 23 / 2016
11 / 17 / 2015
05 / 26 / 2016
09 / 22 / 2016
12 / 22 / 2016
03 / 22 / 2017
06 / 21 / 2017
09 / 27 / 2017
12 / 20 / 2017
03 / 21 / 2018
06 / 27 / 2018
09 / 27 / 2018
12 / 19 / 2018
03 / 27 / 2019
06 /05 / 2019
09 / 26 / 2019
12 / 17 / 2019
03 / 25 / 2020
07 /0 1 / 2020
10 / 21 / 2020
01 / 14 / 2021
04 / 12 / 2021
06 / 23 / 2021
Interim dividend
Remaining dividend
Interim dividend
Interim dividend
Interim dividend
Remaining dividend
Interim dividend
Interim dividend
Interim dividend
Remaining dividend
Interim dividend
Interim dividend
Interim dividend
Remaining dividend
Interim dividend
Interim dividend
Interim dividend
Remaining dividend
Interim dividend
Interim dividend
Interim dividend
Remaining dividend
09 / 27 / 2016
12 / 21 / 2016
03 / 20 / 2017
06 /0 5 / 2017
10 / 14 / 2016
01 / 12 / 2017
04 /0 6 / 2017
06 / 22 / 2017
10 / 14 / 2021
01 / 12 / 2022
04 /0 6 / 2022
06 / 22 / 2022
Interim dividend
Interim dividend
Interim dividend
Remaining dividend
1.14
1.14
0.57
0.57
0.57
0.57
0.57
0.59
0.59
0.59
0.59
0.59
0.59
0.61
0.61
0.61
0.61
0.61
0.61
0.61
0.61
0.61
0.61
0.61
0.61
0.62
(a) A resolution will be submitted to the Annual Shareholders’ Meeting on May 26, 2017 to pay a dividend of €2.45 per share for fiscal year 2016, including a remaining dividend of €0.62
per share, with an ex-dividend date on June 5, 2017 and a payment date set for June 22, 2017, in cash or in new shares.
182
TOTAL. Registration Document 2016
TOTAL and its shareholders 8
Share buybacks
3. Share buybacks
The Annual Shareholders’ Meeting of May 24, 2016, 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 EC Regulation
2273 / 2003 of December 22, 2003 (1), to buy and sell the
Company’s shares as part 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 18 months and replaced
the previous authorization granted by the Annual Shareholders’
Meeting of May 29, 2015.
3.1. Share buybacks and cancellations in 2016
At its meeting on December 15, 2016, and pursuant to the authorization of the Extraordinary Shareholders’ Meeting of May 11, 2012, the
Board of Directors of TOTAL S.A. decided to cancel 100,331,268 treasury shares. TOTAL S.A. had previously bought back these shares off-
market from four of its 100% indirectly controlled subsidiaries.
These buybacks of shares, immediately followed by their cancellation, mean that Group affiliates no longer hold treasury shares as part of
the policy to simplify the Group’s structures.
Following their cancellation, the number of shares composing the share capital of TOTAL S.A. was 2,429,723,768 shares.
Percentage of share capital bought back
4.13% (a)
0.08%
0.19%
0.18%
0.19%
2012
2013
2014
2015
2016
(a) Buyback of treasury shares off-market immediately followed by their cancellation.
3.2. Board’s report on share buybacks and sales
3.2.1. Share buybacks during fiscal year 2016
Under the authorization granted by the Annual Shareholders’
Meeting of May 24, 2016, 100,331,268 TOTAL treasury shares
owned by Group affiliates, each with a par value of €2.50, were
bought back by TOTAL S.A. in 2016 in order to be immediately
canceled. These buybacks were completed off-market at a price of
€47.495 per share equal to the closing price of TOTAL ordinary
share on Euronext Paris on the day of the buyback, on
December 15, 2016, for a total cost of approximately €4,765
million.
These buybacks of shares, immediately followed by their
cancellation, means that Group affiliates no longer hold treasury
shares as part of the policy to simplify the Group’s structures.
3.2.2. Cancellation of Company shares
during fiscal years 2014, 2015 and 2016
TOTAL S.A. did not cancel any shares during fiscal year 2014
and 2015.
At its meeting on December 15, 2016, and pursuant to the
authorization of the combined Shareholders’ Meeting of
May 11, 2012, the Board of Directors of TOTAL S.A. decided to reduce
the share capital by a global nominal amount of €250,828,170.00
by canceling 100,331,268 treasury shares that TOTAL S.A. had
previously bought back under the buyback program as described
in point 3.2.1 of this chapter.
(1) Repealed and replaced by Regulation (EU) 596 / 2014 on market abuse.
Registration Document 2016. TOTAL
183
8 TOTAL and its shareholders
Share buybacks
3.2.3. Transfer of shares during fiscal year 2016
3,048,668 TOTAL shares were transferred in 2016 following the
final award of TOTAL shares under the restricted share grant plans.
3.2.4. Shares held in the name of the Company
and its subsidiaries as of December 31, 2016
As of December 31, 2016, the Company held 10,587,822 treasury
shares, representing 0.44% of TOTAL S.A.’s share capital including
10,555,887 shares held to cover the performance share grant plans
and 31,935 shares to be awarded under new share purchase option
plans or new restricted share grant plans. Pursuant to French law,
these shares are deprived of voting rights and dividend rights.
For shares bought back to be allocated to Company or Group
employees pursuant to the objectives referred to in Article 3 of EC
Regulation 2273 / 2003 of December 22, 2003 (which has been
repealed and replaced by Regulation (EU) 596 / 2014 on market
abuse), note that, when such shares are held to cover share purchase
option plans that have expired or performance share grants that
have not been awarded at the end of the vesting period, they will
be allocated to new TOTAL share purchase option plans or restricted
share grant plans that may be approved by the Board of Directors.
3.2.5. Reallocation for other purposes during
fiscal year 2016
Shares purchased by the Company under the authorization granted
by the Annual Shareholders’ Meeting of May 24, 2016, or under
previous authorizations, were not reallocated in 2016 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 March 1, 2016 and February 28, 2017, the Company did
not use any derivative products on the financial markets as part of
the share buyback programs successively authorized by the Annual
Shareholders’ Meetings of May 29, 2015 and May 24, 2016.
3.2.7. Shares held in the name of the Company
and its subsidiaries as of February 28, 2017
As of February 28, 2017, the Company held 10,587,822 shares,
representing 0.43% of TOTAL S.A.’s share capital. Pursuant to
French law, these shares are deprived of voting rights and dividend
rights.
Summary table of transactions completed by the Company involving its own shares
from March 1, 2016 to February 28, 2017 (1)
Cumulative gross movements Open positions as of February 28, 2017
Purchases Sales Open purchase positions Open sales positions
Number of shares 100,331,268 - Bought calls Purchases Sold calls Sales
Maximum average maturity - - - - - -
Transaction price (€) (a) 47.495 - - - - -
Average strike price - - - - - -
Amounts (M€) 4,765 - - - - -
(a) Price equal to the closing price of TOTAL ordinary share on Euronext Paris on the day of the buyback, which was completed off-market on December 15, 2016, i.e., €47.495 per share.
Moreover, following the final award of shares under the performance share grant plans, 3,048,388 TOTAL shares were transferred between
March 1, 2016 and February 28, 2017.
As of February 28, 2017
Percentage of share capital held by TOTAL S.A. 0.43%
Number of shares held in portfolio (a) 10,587,822
Book value of portfolio (M€) 485.7
Market value of the portfolio (M€) (b) 498.2
(a) TOTAL S.A. did not buy back any shares during the two trading days preceding February 28, 2017. As a result, TOTAL S.A. owns all the shares held in portfolio as of that date.
(b) Based on a closing price of €47.050 per share as of February 28, 2017.
(1) In compliance with the applicable regulations as of February 28, 2017, the period indicated begins on the day after the date used as a reference for the publication of information regarding the
previous program published in the Registration Document for fiscal year 2015.
184
TOTAL. Registration Document 2016
TOTAL and its shareholders 8
Share buybacks
3.3. 2017-2018 share buyback program
3.3.1. Description of the share buyback program
under Article 241-1 et seq. of the General
Regulation of the French Financial Markets
Authority
The objectives of the share buyback program are as follows:
– reduce the Company’s capital through the cancellation of shares;
– honor the Company’s obligations related to securities convertible
or exchangeable into Company shares;
– honor the Company’s obligations related to stock option programs
or other share grants to the Company’s executive directors or to
employees of the Company or a Group subsidiary; and
– stimulate the secondary market or the liquidity of the TOTAL
share under a liquidity agreement.
3.3.2. Legal framework
Implementation of this share buyback program, which is covered by
Article L. 225-209 et seq. of the French Commercial Code, Article
241-1 et seq. of the General Regulation of the French Financial
Markets Authority (Autorité des marchés financiers – AMF), and the
provisions of Regulation (EU) 596 / 2014 on market abuse, is subject
to approval by the TOTAL S.A. Annual Shareholders’ Meeting of
May 26, 2017 through the 5th resolution that reads as follows:
“Upon presentation of the report by the Board of Directors and
information appearing in the description of the program prepared
pursuant to Articles 241-1 et seq. of the General Regulation
(règlement général) of the French Financial Markets Authority
(Autorité des marchés financiers, AMF), and voting under the
conditions of quorum and majority required for Ordinary General
Meetings, the shareholders hereby authorize the Board of Directors,
with the possibility to sub-delegate such authority under the terms
provided for by French law, pursuant to the provisions of Article
L. 225-209 of the French Commercial Code, of Regulation (EU)
596 / 2014 on market abuse and of the General Regulation of the
AMF, to buy or sell shares of the Company within the framework of
a share buyback program.
The purchase, sale or transfer of such shares may be transacted by
any means on regulated markets, multilateral trading facilities or
over the counter, including the purchase or sale by block-trades, in
accordance with the regulations of the relevant market authorities.
Such transactions may include the use of 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, in accordance
with the applicable rules and regulations, except during any public
offering periods applying to the Company’s share capital.
The maximum purchase price is set at €80 per share.
In the case of a share capital increase by incorporation of reserves
or share grants for no consideration 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.
Pursuant to the provisions of 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 composing the capital as of the date on
which this authorization is used. This limit of 10% is applicable to a
capital of the Company which may be adjusted from time to time as
a result of transactions after the date of the present Meeting.
Purchases made by the Company may under no circumstances
result in the Company holding more than 10% of the share capital,
either directly or indirectly through indirect subsidiaries.
As of December 31, 2016, out of the 2,430,365,862 shares
outstanding at this date, the Company held 10,587,822 shares
directly. Under these circumstances, the maximum number of
shares that the Company could buy back is 232,448,764 shares
and the maximum amount that the Company may spend to acquire
such shares is €18,595,901,120.
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 of the Company upon conversion or
exchange; or
– share purchase option plans, employee shareholding plans,
Company savings plans or other share allocation programs for
executive directors or employees of the Company or Group
companies.
The purpose of buybacks may also be the market practice
accepted by the French Financial Markets Authority (Autorité des
marchés financiers), i.e., support the secondary market or the
liquidity of TOTAL shares by an investment services provider by
means of a liquidity agreement compliant with the deontology
charter recognized by the French Financial Markets Authority
(Autorité des marchés financiers).
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 under the applicable law or any other permitted market
practice that may be authorized. In case of transactions other than
the above-mentioned intended purposes, the Company will inform
its shareholders in a press release.
Registration Document 2016. TOTAL
185
8 TOTAL and its shareholders
Share buybacks
According to the intended purposes, the treasury shares that are
acquired by the Company through this program may, in particular, be:
– canceled, up to the maximum legal limit of 10% of the total
number of shares composing the capital on the date of the
operation, per each 24-month period;
– granted for no consideration to the employees of the Group and
to the executive directors of the Company or of other companies
of the Group;
– delivered to the holders of the Company’s shares purchase
options having exercised such options;
– sold to employees, either directly or through the intermediary of
Company savings funds;
– 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; or
– used in any other way consistent with the purposes stated in this
resolution.
While they are bought back and held by the Company, such shares
will be deprived of voting rights and dividend rights.
This authorization is granted for a period of 18 months from the
date of this Meeting. It renders ineffective up to the unused portion,
the previous authorization granted by the Ordinary Shareholders’
Meeting held on May 24, 2016.
The Board of Directors is hereby granted full authority, with the right
to delegate such authority, to undertake all actions authorized by
this resolution.”
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 Annual Shareholders’ Meeting of May
26, 2017 may not exceed 10% of the total number of shares
composing the capital, 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 may under no
circumstances 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
Annual Shareholders’ Meeting of May 26, 2017, based on the
number of shares outstanding as of February 28, 2017
(2,453,807,693 shares), and given the 10,587,822 shares held by
the Group as of February 28, 2017, i.e., 0.43% of the share capital,
the maximum number of shares that may be purchased would be
234,792,947, representing a theoretical maximum investment of
€18,783,435,760 based on the maximum purchase price of €80.
Conditions for buybacks
Such shares may be bought back by any means on regulated
markets, multilateral trading facilities or over the counter, including
through the purchase or sale of blocks of shares, under the
conditions authorized by the relevant market authorities. These
means include the use of any financial derivative instrument traded
on a regulated market or over the counter and the implementation
of option strategies, with the Company taking measures, however,
to avoid increasing the volatility of its stock. The portion of the
program carried out through the purchase of blocks of shares will
not be subject to quota allocation, up to the limit set by this
resolution. These transactions may be carried out at any time, in
accordance with the applicable rules and regulations, except during
any public offering periods applying to the Company’s share capital.
Duration and schedule of the share buyback program
In accordance with the 5th resolution, which will be submitted to the
Annual Shareholders’ Meeting of May 26, 2017, the share buyback
program may be implemented over an 18-month period following
the date of this Meeting, and therefore expires on November 25,
2018.
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
(refer to point 3.2 of this chapter).
186
TOTAL. Registration Document 2016
TOTAL and its shareholders 8
Shareholders
4. Shareholders
4.1. Major shareholders
4.1.1. Changes in major shareholders’ holdings
TOTAL’s major shareholders (1) as of December 31, 2016, 2015 and 2014 were as follows:
2016
2015
2014
As of December 31 % of share % of voting % of % of share % of voting % of share % of voting
capital rights theoretical capital rights capital rights
voting rights (a)
BlackRock, Inc. (b) 5.6 4.9 4.9 5.5 5 6.2 5.4
Group employees (c) 4.8 8.6 8.5 4.9 9 4.6 8.8
of which FCPE “TOTAL ACTIONNARIAT FRANCE” 3.5 6.4 6.3 3.5 6.7 3.4 6.7
Other shareholders (d) 89.6 86.5 86.6 89.6 86 89.2 85.8
of which holders of ADRs (e) 9.1 8.6 8.6 7.2 7.2 8.5 8.4
(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) Information taken from Schedule 13G filed by BlackRock, Inc. (“BlackRock”) with the SEC on January 27, 2017, in which BlackRock declared a holding of 137,248,950 shares of the
Company as of December 31, 2016 (i.e., 5.6% of the Company’s share capital). BlackRock stated that it has the exclusive right to dispose of the holding, together with an amount of
125 402 097 voting rights (i.e., 4.9% of the Company’s voting rights). In addition, BlackRock stated that it does not have any joint voting rights or joint right to dispose of these shares.
(c) On the basis of the definition of employee shareholding set forth in Article L. 225-102 of the French Commercial Code. Amundi Group, the Holding company of Amundi Asset
Management, which in turn manages the TOTAL ACTIONNARIAT FRANCE collective investment fund (see below), filed a Schedule 13G with the SEC on February 13, 2017 declaring a
holding of 187,778,448 shares of the Company as of December 31, 2016 (i.e., 7.7% of the Company’s share capital). Amundi Group stated that it does not have any exclusive voting
rights or exclusive right to dispose of these shares and that it has joint voting rights on 71,212,856 of these shares (i.e., 2.9% of the Company’s share capital) and a joint right to dispose
of all of these shares. In addition, a director representing the employees sits on the Board of Directors of TOTAL S.A.
(d) Including 1.56% registered shareholders (non-Group) in 2016.
(e) Including all of the ADS represented by ADR listed on the New York Stock Exchange.
As of December 31, 2016, the holdings of the major shareholders
were calculated based on 2,430,365,862 shares, representing
2,572,363,626 voting rights exercisable at Shareholders’ Meetings,
or 2,582,951,448 theoretical voting rights (2) including 10,587,822
voting rights attached to the 10,587,822 TOTAL shares held by
TOTAL S.A. that are deprived of voting rights.
For prior years, the holdings of the major shareholders were
calculated on the basis of 2,440,057,883 shares to which
2,460,619,275 voting rights exercisable at Shareholders’ Meetings
were attached as of December 31, 2015, and 2,385,267,525
shares to which 2,406,809,364 voting rights exercisable at
Shareholders’ Meetings were attached as of December 31, 2014.
4.1.2. Holdings above the legal thresholds
In accordance with Article L. 233-13 of the French Commercial
Code, to TOTAL’s knowledge, two known shareholders hold 5% or
more of TOTAL’s share capital or voting rights at year-end 2016.
As of December 31, 2016, the TOTAL ACTIONNARIAT FRANCE
collective investment fund held 3.45% of the share capital
representing 6.35% of the voting rights exercisable at Shareholders’
Meetings and 6.32% of the theoretical voting rights.
As of December 31, 2016, BlackRock held 5.65% of the share
capital representing 4.87% of the voting rights exercisable at
Shareholders’ Meetings and 4.85% of the theoretical voting rights.
(1) Major shareholders are defined herein as shareholders whose interest (in the share capital or voting rights) exceeds 5%.
(2) 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.
Registration Document 2016. TOTAL
187
8 TOTAL and its shareholders
Shareholders
4.1.3. Legal threshold notifications in fiscal year 2016
Date on which
threshold were
N° AMF
disclosure breached
Company
Number of % capital % voting Share Number of
shares shares rights Comments capital voting rights
216C0495 02/10/2016
Blackrock
134,165,277 5.50% 5.02% Crossed upward the 5% threshold 2,440,057,883 2,674,918,301
in the Company’s voting rights
216C0514 02/11/2016
Blackrock
132,455,871 5.40% 4.93% Crossed downward the 5% threshold 2,454,003,592 2,688,804,793
in the Company’s voting rights
216C0520 02/12/2016
Blackrock
134,571,995 5.48% 5.01% Crossed upward the 5% threshold 2,454,003,592 2,688,804,793
in the Company’s voting rights
216C0525 02/15/2016
Blackrock
132,707,518 5.41% 4.94% Crossed downward the 5% threshold 2,454,003,592 2,688,804,793
in the Company’s voting rights
216C0543 02/17/2016
Blackrock
134,815,508 5.49% 5.01% Crossed upward the 5% threshold 2,454,003,592 2,688,804,793
in the Company’s voting rights
216C0711 03/17/2016
Blackrock
126,094,618 5.14% 4.69% Crossed downward the 5% threshold 2,454,012,342 2,688,761,040
in the Company’s voting rights
216C0770 03/24/2016
Blackrock
134,770,826 5.49% 5.01% Crossed upward the 5% threshold 2,454,012,342 2,688,761,040
in the Company’s voting rights
216C0876 04/07/2016
Blackrock
131,985,422 5.38% 4.91% Crossed downward the 5% threshold 2,454,029,976 2,688,636,563
in the Company’s voting rights
216C0892 04/08/2016
Blackrock
135,661,976 5.53% 5.05% Crossed upward the 5% threshold 2,454,029,976 2,688,636,563
in the Company’s voting rights
216C0907 04/12/2016
Blackrock
131,111,629 5.34% 4.88% Crossed downward the 5% threshold 2,454,029,976 2,688,636,563
in the Company’s voting rights
216C0913 04/13/2016
Blackrock
135,325,364 5.51% 5.03% Crossed upward the 5% threshold 2,454,029,976 2,688,636,563
in the Company’s voting rights
216C0964 04/19/2016
Blackrock
134,275,767 5.47% 4.99% Crossed downward the 5% threshold 2,454,029,976 2,688,636,563
in the Company’s voting rights
216C0992 04/22/2016
Blackrock
134,838,741 5.49% 5.02% Crossed upward the 5% threshold 2,454,029,976 2,688,636,563
in the Company’s voting rights
216C1024 04/26/2016
Blackrock
131,401,183 5.35% 4.89% Crossed downward the 5% threshold 2,454,029,976 2,688,636,563
in the Company’s voting rights
216C1294 06/02/2016
Blackrock
122,995,244 4.96% 4.53% Crossed downward the 5% threshold 2,478,822,637 2,713,396,788
in the Company’s capital shares
216C1325 06/06/2016
Blackrock
125,977,432 5.08% 4.64% Crossed upward the 5% threshold 2,478,822,637 2,713,396,788
in the Company’s capital shares
216C1734 07/25/2016
Blackrock
121,864,146 4.87% 4.45% Crossed downward the 5% threshold 2,503,262,274 2,737,740,593
in the Company’s capital shares
216C1748 07/26/2016
Blackrock
127,830,803 5.11% 4.67% Crossed upward the 5% threshold 2,503,262,274 2,737,740,593
in the Company’s capital shares
216C1974 09/02/2016
Blackrock
123,340,466 4.93% 4.50% Crossed downward the 5% threshold 2,503,371,652 2,741,896,002
in the Company’s capital shares
216C1988 09/05/2016
Blackrock
126,721,692 5.06% 4.62% Crossed upward the 5% threshold 2,503,371,652 2,741,896,002
in the Company’s capital shares
216C2043 09/12/2016
Blackrock
125,149,247 4.99% 4.56% Crossed downward the 5% threshold 2,503,371,652 2,741,896,002
in the Company’s capital shares
216C2063 09/13/2016
Blackrock
125,753,406 5.02% 4.59% Crossed upward the 5% threshold 2,503,371,652 2,741,896,002
in the Company’s capital shares
216C2075 09/14/2016
Blackrock
124,455,432 4.97% 4.54% Crossed downward the 5% threshold 2,503,371,652 2,741,896,002
in the Company’s capital shares
216C2092 09/15/2016
Blackrock
127,198,461 5.08% 4.64% Crossed upward the 5% threshold 2,503,371,652 2,741,896,002
in the Company’s capital shares
216C2168 09/22/2016
Blackrock
120,685,732 4.82% 4.40% Crossed downward the 5% threshold 2,503,428,524 2,741,599,965
in the Company’s capital shares
216C2266 10/04/2016
Blackrock
125,606,963 5.02% 4.58% Crossed upward the 5% threshold 2,503,428,524 2,741,599,965
in the Company’s capital shares
216C2277 10/05/2016
Blackrock
123,688,339 4.94% 4.51% Crossed downward the 5% threshold 2,503,428,524 2,741,599,965
in the Company’s capital shares
216C2323 10/10/2016
Blackrock
125,825,505 5.03% 4.59% Crossed upward the 5% threshold 2,503,428,524 2,741,599,965
in the Company’s capital shares
216C2334 10/11/2016
Blackrock
122,635,030 4.90% 4.47% Crossed downward the 5% threshold 2,504,029,528 2,742,027,455
in the Company’s capital shares
216C2367 10/14/2016
Blackrock
125,664,996 5.02% 4.58% Crossed upward the 5% threshold 2,504,029,528 2,742,027,455
in the Company’s capital shares
216C2405 10/19/2016
Blackrock
123,971,240 4.95% 4.52% Crossed downward the 5% threshold 2,504,029,528 2,742,027,455
in the Company’s capital shares
216C2415 10/20/2016
Blackrock
126,186,273 5.04% 4.60% Crossed upward the 5% threshold 2,504,029,528 2,742,027,455
in the Company’s capital shares
216C2521 11/07/2016
Blackrock
124,754,489 4.98% 4.55% Crossed downward the 5% threshold 2,504,029,528 2,742,027,455
in the Company’s capital shares
216C2530 11/08/2016
Blackrock
126,892,344 5.07% 4.63% Crossed upward the 5% threshold 2,504,029,528 2,742,027,455
in the Company’s capital shares
216C2544 11/10/2016
Blackrock
124,702,835 4.98% 4.55% Crossed downward the 5% threshold 2,504,029,528 2,742,027,455
in the Company’s capital shares
216C2560 11/11/2016
Blackrock
126,847,315 5.01% 4.55% Crossed upward the 5% threshold 2,529,582,139 2,785,259,009
in the Company’s capital shares
216C2572 11/14/2016
Blackrock
124,839,806 4.94% 4.48% Crossed downward the 5% threshold 2,529,582,139 2,785,259,009
in the Company’s capital shares
216C2600 11/16/2016
Blackrock
127,191,901 5.03% 4.57% Crossed upward the 5% threshold 2,529,582,139 2,785,259,009
in the Company’s capital shares
216C2606 11/17/2016
Blackrock
126,388,314 4.99% 4.54% Crossed downward the 5% threshold 2,529,582,139 2,785,259,009
in the Company’s capital shares
216C2691 11/29/2016
Blackrock
127,181,007 5.03% 4.57% Crossed upward the 5% threshold 2,529,582,139 2,785,259,009
in the Company’s capital shares
216C2964 12/27/2016
Blackrock
129,535,883 5.33% 5.01% Crossed upward the 5% threshold 2,429,723,768 2,584,615,655
in the Company’s voting rights
216C2980 12/29/2016
Blackrock
127,980,062 5.27% 4.95% Crossed downward the 5% threshold 2,429,723,768 2,584,615,655
in the Company’s voting rights
188
TOTAL. Registration Document 2016
TOTAL and its shareholders 8
Shareholders
4.1.4. Threshold notifications required by the bylaws
In addition to the legal obligation to inform the Company and the
French Financial Markets Authority within four trading days of the
date on which the number of shares (or securities similar to shares
or voting rights pursuant to Article L. 233-9 of the French
Commercial Code) held represents more than 5%, 10%, 15%,
20%, 25%, 30%, one third, 50%, two thirds, 90% or 95% of the
share capital or theoretical voting rights (Article L. 233-7 of the
French Commercial Code), any individual or legal entity who directly
or indirectly comes to hold a percentage of the share capital, voting
rights or rights giving future access to the Company’s share capital
that is equal to or greater than 1%, or a multiple of this percentage,
is required to notify the Company, within 15 days of the date on which
each of the above thresholds is exceeded, by registered mail with
return receipt requested, and indicate the number of shares held.
In case the shares above these thresholds are not declared, any
shares held in excess of the threshold that should have been
declared will be deprived of voting rights at Shareholders’ Meetings
if, at a Shareholders’ 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.
Any individual or legal entity is 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.
4.2. Employee shareholding
Notifications must be sent to the Senior Vice President of Investor
Relations in London (contact details in point 6.6 of this chapter).
4.1.5. Temporary transfer of securities
Pursuant to legal provisions, 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 in concert a
number of shares representing more than 0.5% of the Company’s
voting rights pursuant to one or more temporary transfers or similar
operations as described in Article L. 225-126 of the aforementioned
Code is required to notify the Company and the French Financial
Markets Authority of the number of shares temporarily owned no
later than the second business day preceding the Shareholders’
Meeting at midnight.
Notifications must be e-mailed to the Company at the following
address: holding.df-declarationdeparticipation@total.com
If no notification is sent, any shares acquired under any of the
above temporary transfer operations will be deprived of voting
rights at the relevant Shareholders’ Meeting and at any
Shareholders’ Meeting that may be held until such shares are
transferred again or returned.
4.1.6. Shareholders’ agreements
TOTAL is not aware of any agreements among its shareholders.
Presented below is the total number of TOTAL shares held directly or indirectly by the Group’s employees as of December 31, 2016:
TOTAL ACTIONNARIAT FRANCE 83,729,061
TOTAL ACTIONNARIAT INTERNATIONAL CAPITALISATION 22,871,049
TOTAL FRANCE CAPITAL+ 4,641,529
TOTAL INTERNATIONAL CAPITAL 1,902,635
Shares subscribed by employees in the U.S. 517,342
Group Caisse Autonome (Belgium) 515,211
TOTAL shares from the exercise of the Company’s stock options and held as registered shares within a Company Savings Plan 3,138,747
Total shares held by employees 117,315,574
As of December 31, 2016, the Group’s employees held, on the
basis of the definition of employee shareholding set forth in Article
L. 225-102 of the French Commercial Code, 117,315,574 TOTAL
shares, representing 4.83% of the Company’s share capital and
8.58% of the voting rights. The management of each of the FCPEs
(Collective investment funds) mentioned above is controlled by a
dedicated Supervisory Board, two thirds of its members
representing holders of fund units and one third representing the
Company. The Board is responsible for reviewing the Collective
investment fund’s Management Report and annual financial
statements, as well as the financial, administrative and accounting
management of the fund, 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-thirds plus one related to a change in a fund’s rules and
procedures, its conversion or disposal.
For employees holding shares outside of the employee collective
investment funds mentioned in the table above, voting rights are
exercised individually.
The information regarding shares held by the administration and
management bodies is set forth in point 3 of chapter 5.
Registration Document 2016. TOTAL
189
8 TOTAL and its shareholders
Shareholders
4.3. Shareholding structure
Estimates below are as of December 31, 2016, excluding treasury shares, based on the survey of identifiable holders of bearer shares
conducted on that date.
By shareholder type
Group (a)
employees 4.9%
Individual
shareholders 7.9%
Institutional
shareholders 87.2%
of which:
16.2% in France
12.2% in the United Kingdom
15.5% in the Rest of Europe
35.4% in North America
7.9% in the Rest of world
By area
France 27.7%
North
America 36.0%
Rest of
Europe 16.0%
United
Kingdom 12.2%
Rest of world 8.1%
(a) On the basis of employee shareholdings as defined in Article L. 255-102 of the
French Commercial Code, treasury shares excluded (4.8% of the total share
capital, refer to point 4.1 of chapter 8).
The number of French individual TOTAL shareholders is estimated at approximately 450,000.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
4.5. Factors likely to have an impact in the event of a public offering
In accordance with Article L. 225-100-3 of the French Commercial
Code, information relating to factors likely to have an impact in the
event of a public offering is provided below.
• Structure of the share capital and direct or indirect interests
of which the Company is aware pursuant to Articles L. 233-7
and L. 233-12 of the French Commercial Code
The structure of the Company’s share capital and the interests
that the Company is aware of pursuant to Articles L. 233-7
and L. 233-12 of the French Commercial Code are presented
in point 4.1 to 4.3 of this chapter.
• Restrictions on the exercise of voting rights and transfers
of shares provided in the bylaws – Clauses of the agreements
of which the Company has been informed in accordance
with Article L. 233-11 of the French Commercial Code
The provisions of the bylaws relating to shareholders’ voting
rights are mentioned in point 2.4 of chapter 9. The Company has
not been informed of any clauses as specified in paragraph 2
of Article L. 225-100-3 of the French Commercial Code.
• Holders of securities conferring special control rights
Article 18 of the bylaws stipulates that double voting rights are
granted to all the shares held in the name of the same shareholder
for at least two years. Subject to this condition, there are no
securities conferring special control rights as specified in paragraph
4 of Article L. 225-100-3 of the French Commercial Code.
• Control mechanisms specified in an employee shareholding
system
The rules relating to the exercise of voting rights within the
Company collective investment funds are presented in point 4.2
of this chapter.
190
TOTAL. Registration Document 2016
TOTAL and its shareholders 8
Information for foreign shareholders
• Agreements to which the Company is party and which are
altered or terminated in the event of a change of control of the
Company – Agreements providing for the payment of
compensation to members of the Board of Directors or
employees in the event of their resignation or dismissal
without real and serious cause or if their employment were to
be terminated as a result of a tender offer
Although a number of agreements made by the Company
contain a change in control clause, the Company believes that
there are no agreements as specified in paragraph 9 of Article
L. 225-100-3 of the French Commercial Code. The Company
also believes that there are no agreements as specified in
paragraph 10 of Article L. 225-100-3 of the French Commercial
Code. For commitments made for the Chairman and Chief
Executive Officer in the event of a forced departure owing to a
change of control or strategy, refer to point 2.2 of chapter 6.
• Shareholder agreements of which the company is aware and that
could restrict share transfers and the exercise of voting rights
The Company is not aware of any agreements between shareholders
as specified in paragraph 6 of Article L. 225-100-3 of the French
Commercial Code which could result in restrictions on the transfer
of shares and exercise of the voting rights of the Company.
• Rules applicable to the appointment and replacement of
members of the Company’s Board of Directors and
amendment of the bylaws
No provision of the bylaws or an agreement made between the
Company and a third party contains a specific provision relating
to the appointment and / or replacement of the Company’s
directors that is likely to have an impact in the event of a public
offering.
• Powers of the Board of Directors in the event of a public offering
The delegations of authority or authorizations granted by the
Shareholders’ Meeting that are currently in effect limit the powers
of the Board of Directors over the Company’s shares during a
public offering.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
Registration Document 2016. TOTAL
191
8 TOTAL and its shareholders
Investor Relations
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
6. Investor Relations
6.1. Documents on display
Information and documents regarding TOTAL S.A., its bylaws and
the Company’s Statutory and Consolidated Financial Statements
for the year ended December 31, 2016 or previous fiscal years,
may be consulted at its registered office pursuant to the legal and
regulatory provisions in force.
(Autorité des marchés financiers) for each of the past 10 financial
years are available on its website total.com (under Investors / Publications
and regulated information). The Group’s bi-annual presentations of
its results and outlook, as well as the quarterly financial information
are also available on its website.
In addition, the French version of TOTAL S.A.’s Registration
Documents (including the annual financial reports) and mid-year
financial reports filed with the French Financial Markets Authority
In addition, in order to meet its obligations related to the listing of its
shares in the United States, the Company also files an annual
report on Form 20-F, in English, with the SEC.
6.2. Relationships with institutional investors, financial analysts
and individual shareholders
Members of the Group’s General Management and Investor
Relations regularly meet with institutional investors and financial
analysts in the leading financial centers throughout the world. In
2016, the Group organized more than 1,000 meetings.
Each year, two main presentations are given to the financial
community: one in February following the publication of the results
for the previous fiscal year, and one in September to present the
Group’s outlook and objectives. A series of meetings is held after
each of these presentations. In addition, each year the Chief
Financial Officer hosts three conference calls to discuss results for
the first, second and third quarters of the year.
The information presented and broadcast at these events is
available on the Group’s website total.com (under Investors / Results
and outlook).
With a dedicated team, the Group maintains an active dialog with
shareholders in the field of Corporate Social Responsibility (CSR)
and governance. Meetings covering these themes are organized
in France and worldwide. About 90 meetings were held in 2016.
In addition, chapter 7 of this Registration Document focuses on
social and environmental information.
The Group also has a team dedicated to relationships with individual
shareholders. This department, which is ISO 9001 certified, offers a
comprehensive communication package, featuring:
– a direct line, email address, and postal address (refer to point 6.6
of this chapter);
– documentation and material provided for individual shareholders
(i.e., the shareholders’ newsletter, individual shareholders pages
available on the Company’s website, and a Total Investors mobile
app for digital tablets and smartphones);
– shareholder meetings and investor fairs held in France and
worldwide;
– the Shareholders’ Club, which organizes visits to industrial
facilities, visits to natural sites and cultural events sponsored by
the Total Foundation, and conferences about the Group; and
– the Shareholders’ e-Advisory Committee, which expresses its
views on the communication service as a whole.
This team also organizes the Annual Shareholders’ Meeting, which
was held on May 24, 2016 at the Palais des Congrès in Paris and
attended by 3,400 people.
The documentation on relationships with individual shareholders
is available on the Company’s website total.com
(under Investors / Individual shareholders).
192
TOTAL. Registration Document 2016
TOTAL and its shareholders 8
Investor Relations
6.3. Registered shareholding
TOTAL S.A. shares can be held in bearer form or registered form.
In the latter 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 shareholders’
registered shares.
– a 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 (business days), 8:45 a.m. to 6:00 p.m., GMT+1;
– registration as a recipient of all information published by the
6.3.1. Registered shares
There are two forms of registration:
– administered registered shares: shares are registered with
TOTAL through BNP Paribas Securities Services, but the holder’s
financial intermediary continues to administer them with regard to
sales, purchases, coupons, etc.; and
– 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.
6.3.2. Main advantages of registered shares
The advantages of registered shares include:
– double voting rights if the shares are held continuously for two
successive years (refer to point 2.4.1 of chapter 9);
6.4. 2017 calendar
Group for its shareholders; and
– the ability to join the TOTAL Shareholders’ Club by holding
at least 50 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) of the gross amount of the
trade, with no minimum charge and up to €1,000 per trade; and
– the option to view and manage shareholdings online and via the
Planetshares app for digital tablets.
To convert TOTAL shares into pure registered shares, shareholders
must fill out a form that can be obtained upon request from the
Individual Shareholder Relations Department and send it to their
financial intermediary.
February 9 Results of the fourth quarter and full year 2016,
and Investors’ Day – London
July 27 Results of the second quarter and first half 2017
September 25 Investors’ Day (outlook and objectives) – London
March 20 Ex-dividend date for the 2016 third interim dividend
September 25 Ex-dividend date for the 2017 first interim dividend (b)
April 27 Results of the first quarter 2017
May 26 2017 Annual Shareholders’ Meeting in Paris
(Palais des Congrès)
June 5 Ex-dividend date for the 2016 remaining dividend (a)
October 27 Results of the third quarter
and first nine months of 2017
December 19 Ex-dividend date for the 2017
second interim dividend (b)
(a) Subject to approval at the May 26, 2017 Annual Shareholders’ Meeting.
(b) Subject to the Board of Directors’ decision.
The full calendar including shareholder meetings and investor fairs is available on the Company’s website total.com (under Investors ).
6.5. 2018 calendar
March 19 Ex-dividend date for the 2017 third interim dividend (a)
June 11 Ex-dividend date for the 2017 remaining dividend (b)
June 1 2018 Annual Shareholders’ Meeting in Paris
(Palais des Congrès)
(a) Subject to the Board of Directors’ decision.
(b) Subject to approval at the June 1, 2018 Annual Shareholders’ Meeting.
(1) Provided the subscriber has signed the market service agreement. Signing this agreement is free of charge.
Registration Document 2016. TOTAL
193
8 TOTAL and its shareholders
Investor Relations
6.6. Investor Relations contacts
Mr. Mike Sangster, Senior Vice President, Investor Relations
TOTAL S.A.
10 Upper Bank Street
Canary Wharf
London E14 5BF
United Kingdom
E-mail: investor.relations@total.com
Phone: +44 (0)207 7197 962
Mr. Robert Hammond, Director of Investor Relations North America
TOTAL American Services Inc.
1201 Louisiana Street, Suite 1800
Houston, TX 77002
United States
E-mail: ir.tx@total.com
Phone: +1 (713) 483-5070
Ms. Nathalie Portes-Laville, Head of Individual Shareholder Relations
TOTAL S.A.
Individual Shareholder Relations Department
Tour Coupole
2, place Jean Millier
92078 Paris-La Défense Cedex
France
E-mail: actionnairesindividuels@total.com
Phone (Monday to Friday from 9 a.m. to 12:30 p.m. and from
1:30 p.m. to 5:30 p.m., GMT+1):
– from France: 0 800 039 039 (toll-free number from a landline)
– from Belgium: 02 288 3309
– from the United Kingdom: 020 7719 6084
– from Germany: 30 2027 7700
– from other countries: +33 1 47 44 24 02
194
TOTAL. Registration Document 2016
8.Renseignements généraux
General information
9
General information
1. Share capital 196
1.1.
1.2.
1.3.
1.4.
1.5.
1.6.
Share capital as of December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .196
Features of the shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .196
Authorized share capital not issued as of December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .196
Potential share capital as of December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .197
TOTAL shares held by the Company or its subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .197
Share capital history (since January 1, 2014) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .197
2. Articles of incorporation and bylaws; other information 198
2.1.
2.2.
2.3.
2.4.
2.5.
2.6.
2.7.
2.8.
2.9.
General information concerning the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .198
Summary of the Company’s corporate purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .198
Provisions of the bylaws governing the administration and management bodies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .199
Rights, privileges and restrictions attached to the shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .200
Amending shareholders’ rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .200
Shareholders’ Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .201
Identification of the holders of bearer shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .201
Thresholds to be declared according to the bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .201
Changes in the share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .202
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
Registration Document 2016. TOTAL
195
9 General information
Share capital
1. Share capital
1.1. Share capital as of December 31, 2016
€6,075,914,655 consisting of 2,430,365,862 fully paid ordinary shares.
1.2. Features of the shares
There is only one class of shares, and the par value of each share is
€2.50. A double voting right is granted under certain conditions
(refer to point 2.4.1 of this chapter) to every shareholder. 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, 2016
1.3.1. 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 share
capital increases as of December 31, 2016
Type Cap on par value, or number of shares Use in 20 16, Available balance Date of Expiry date
or expressed as % of share capital par value, as of 12/31/2016 delegation of and term of
or number par value, or authority or authorization
of shares number of shares authorization by granted to the
the Extraordinary Board of Directors
Shareholders’
Meeting (ESM)
Debt securities
representing
rights to capital
10 B€
in securities
- 10 B€
An overall cap of 2.5 B€ (i.e., a maximum of
1,000 million shares issued with a pre-emptive
subscription right), from which can be deducted:
18 million shares (a) 2.455 B€
(i.e., 982 million
shares)
May 24, 2016
(18th, 19th,
20th and
22nd resolutions)
July 24, 2018,
26 months
May 24, 2016
(18th resolution)
July 24, 2018,
26 months
Maximum
cap for the
issuance of
securities
granting
immediate
or future
rights to
share
capital
Nominal share capital
1 /
a specific cap of 600 M€, i.e., a maximum
of 240 million shares for issuances without
pre-emptive subscription rights (with potential
use of a greenshoe), including in compensation
with securities contributed within the scope
of a public exchange offer, provided that they
meet the requirements of Article L. 225-148
of the French Commercial Code, from which
can be deducted:
1 / a a sub-cap of 600 M€ with a view to
issuing, through an offer as set forth in
Article L. 411-2 II of the French Monetary
and Financial Code, shares and securities
resulting in a share capital increase,
without a shareholders’ pre-emptive
subscription right
- 600 M€ May 24, 2016
(19th and
21st resolutions)
July 24, 2018,
26 months
- 600 M€ May 24, 2016
(20th and
21st resolutions)
July 24, 2018,
26 months
1 / b a sub-cap of 600 M€ through in-kind
- 600 M€ May 24, 2016
contributions when provisions of Article
L. 225-148 of the French Commercial
Code are not applicable
(22nd resolution)
2 / a specific cap of 1.5% of the share capital
18 million shares (c) 18.5 million shares May 24, 2016
on the date of the Board (b) decision for share
capital increases reserved for employees
participating in a Company savings plan
(23rd resolution)
Stock option grants
0.75% of share capital (b) on the date
of the Board decision to grant options
- 18.2 million shares May 24, 2016
(25th resolution)
July 24, 2018,
26 months
July 24, 2018,
26 months
July 24, 2019,
38 months
Restricted shares awarded
to Group employees
and to executive directors
0.8% of share capital (b) on the date
of the Board decision to grant
the restricted shares
5.6 million shares (d)
13.8 million shares (d)
May 24, 2016
(24th resolution)
July 24, 2019,
38 months
(a) The number of new shares authorized under the 18th resolution of the ESM held on May 24, 2016 cannot exceed 1,000 million shares. Pursuant to the 23rd resolution of the ESM held on May 24, 2016,
the Board of Directors decided on July 27, 2016 to proceed with a share capital increase reserved for Group employees in 2017 (see note (c) below). As a result, the available balance under this authorization
was 982,000,000 new shares as of December 31, 2016.
(b) Share capital as of December 31, 2016: 2,430,365,862 shares.
(c) The number of new shares authorized under the 23rd resolution of the May 24, 2016 ESM may not exceed 1.5% of the share capital on the date when the Board of Directors decides
to use the delegation. The meeting of the Board of Directors of July 27, 2016 decided to proceed with a share capital increase in 2017 with a cap of 18,000,000 shares (subscription
to the shares under this operation is planned for the first quarter of 2017, subject to the decision of the Chairman and Chief Executive Officer). As a result, the available balance under this authorization
was 18,455,487 new shares as of December 31, 2016.
(d) The number of shares that may be awarded as restricted share grants under the 24th resolution of the May 24, 2016 ESM may not exceed 0.8% of the share capital on the date when the restricted
shares are awarded by the Board of Directors. 5,639,400 shares were awarded by the Board of Directors on July 27, 2016. As a result, the number of shares that could still be awarded as of
December 31, 2016 was 13,803,526 shares. In addition, the shares awarded under presence and performance conditions to the Company’s executive directors under the 24th resolution of the ESM
held on May 24, 2016, 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. Taking into account the 60,000 existing
shares awarded under presence and performance conditions to the Chairman and Chief Executive Officer by the meeting of the Board of Directors of July 27, 2016, the remaining number of shares that
may still be awarded to the executive directors is 183,036.
196
TOTAL. Registration Document 2016
General information 9
Share capital
1.3.2. Authorization to cancel shares
of the Company
Pursuant to the terms of the 19th resolution of the Annual
Shareholders’ Meeting held on May 11, 2012, the Board of Directors
is authorized to cancel shares of the Company up to a maximum
of 10% of the share capital of the Company existing as of the date
of the operation within a 24-month period. This authorization is
effective until the Shareholders’ Meeting held to approve the
financial statements for the year ending December 31, 2016.
Based on 2,430,365,862 shares outstanding on December 31,
2016, the Company may, up until the conclusion of the Annual
Shareholders’ Meeting called to approve the financial statements
for the fiscal year ending on December 31, 2016, cancel a
maximum of 142,705,318 shares, taking into account the
100,331,268 shares canceled by the Board of Directors’ decision
of December 15, 2016, before reaching the cancellation threshold
of 10% of share capital canceled over a 24-month period.
1.4. Potential share capital as of December 31, 2016
Securities granting rights to TOTAL shares through exercise are
TOTAL share subscription options amounting to 5,285,618 as of
December 31, 2016, divided into:
– 1,779,053 options awarded on September 15, 2009 under the
plan decided by the Board of Directors;
– 2,880,237 options awarded on September 14, 2010 under the
plan decided by the Board of Directors; and
– 626,328 options awarded on September 14, 2011 under the
plan decided by the Board of Directors.
The potential share capital (i.e., the existing share capital plus rights
and securities that could result in the issuance of new TOTAL
shares through exercise), i.e., 2,435,651,480 shares, represents
100.22% of the share capital as of December 31, 2016, on the
basis of 2,430,365,862 TOTAL shares constituting the share capital
as of December 31, 2016, and 5,285,618 TOTAL shares that could
be issued upon the exercise of TOTAL options.
1.5. TOTAL shares held by the Company or its subsidiaries
As of December 31, 2016
Percentage of share capital held by TOTAL S.A. 0.44%
Number of shares held in portfolio 10,587,822
Book value of portfolio (at purchase prices) (M€) 486
Market value of portfolio (M€) (a) 516
(a) Based on a market price of €48.72 per share as of December 31, 2016.
1.6. Share capital history
(since January 1, 2014)
1.6.1. For fiscal year 2014
July 1, 2014
Acknowledgment of the issuance of 666,575 new shares, par value €2.50 per share, as part of the global free TOTAL
share plan to Group employees decided by the Board of Directors on May 21, 2010, raising the share capital by
€1,666,437.50 from €5,944,195,400 to €5,945,861,837.50.
January 12, 2015
Acknowledgment of the issuance of 6,922,790 new shares, par value €2.50 per share, through the exercise of stock
options between January 1 and December 31, 2014, raising the share capital by €17,306,975 from
€5,945,861,837.50 to €5,963,168,812.50.
1.6.2. For fiscal year 2015
April 27, 2015
July 1, 2015
Acknowledgment of the issuance of 10,479,410 new shares, par value €2.50 per share, as part of the share capital
increase reserved for Group employees approved by the Board of Directors on July 29, 2014, raising the share capital
by €26,198,525 from €5,963,168,812.50 to €5,989,367,337.50.
Acknowledgment of the issuance of 18,609,466 new shares, par value €2.50 per share and a share price of €42.02
(i.e., a par value of €2.50 value and issue premium of €39.52) for the payment of the 2014 remaining dividend in shares,
raising the share capital by €46,523,665 from €5,989,367,337.50 to €6,035,891,002.50.
October 21, 2015
Acknowledgment of the issuance of 24,231,876 new shares, par value €2.50 per share and a share price of €35.63
(i.e., a par value of €2.50 value and issue premium of €33.13) for the payment of the first quarterly interim dividend for
fiscal year 2015 in shares, raising the share capital by €60,579,690 from €6,035,891,002.50 to €6,096,470,692.50.
Registration Document 2016. TOTAL
197
9 General information
Articles of incorporation and bylaws; other information
January 14, 2016
Acknowledgment of the issuance of 1,469,606 new shares, par value €2.50 per share, through the exercise of stock
options between January 1 and December 31, 2015, raising the share capital by €3,674,015 from €6,096,470,692.50
to €6,100,144,707.50.
1.6.3. For fiscal year 2016
January 14, 2016
Acknowledgment of the issuance of 13,945,709 new shares, par value €2.50 per share and a share price of €39.77
(i.e., a par value of €2.50 value and issue premium of €37.27) for the payment of the second quarterly interim dividend
for fiscal year 2015 in shares, raising the share capital by €34,864,272.50 from €6,100,144,707.50 to €6,135,008,980.
April 12, 2016
June 23, 2016
Acknowledgment of the issuance of 24,752,821 new shares, par value €2.50 per share and a share price of €36.24
(i.e., a par value of €2.50 value and issue premium of €33.74) for the payment of the third quarterly interim dividend for
fiscal year 2015 in shares, raising the share capital by €61,882,052.50 from €6,135,008,980 to €6,196,891,032.50.
Acknowledgment of the issuance of 24,372,848 new shares, par value €2.50 per share and a share price of €38.26
(i.e., a par value of €2.50 value and issue premium of €35.76) for the payment of the 2015 fourth quarter dividend in
shares, raising the share capital by €60,932,120 from €6,196,891,032.50 to €6,257,823,152.50.
October 14, 2016
Acknowledgment of the issuance of 25,329,951 new shares, par value €2.50 per share and a share price of €38.00
(i.e., a par value of €2.50 value and issue premium of €35.50) for the payment of the first quarterly interim dividend for
fiscal year 2016 in shares, raising the share capital by €63,324,877.50 from €6,257,823,152.50 to €6,321,148,030.
December 15, 2016 Reduction of the share capital by 100,331,268 shares, par value €2.50 per share for the cancellation of treasury
shares, reducing the share capital by €250,828,170 from €6,321,148,030 to €6,070,319,860.
January 12, 2017
Acknowledgment of the issuance of 2,237,918 new shares, par value €2.50 per share, through the exercise of stock
options between January 1 and December 31, 2016, raising the share capital by €5,594,795 from €6,070,319,860 to
€6,075,914,655.
Acknowledgment of the issuance of 23,206,171 new shares, par value €2.50 per share and a share price of €41.87
(i.e., a par value of €2.50 value and issue premium of €39.37) for the payment of the second quarterly interim dividend
for fiscal year 2016 in shares, raising the share capital by €58,015,427.50 from €6,075,914,655 to
€6,133,930,082.50.
2. Articles of incorporation and bylaws;
other information
2.1. General information concerning the Company
The Company’s name is TOTAL S.A.
TOTAL S.A. is a French limited liability company (société anonyme)
headquartered at 2, place Jean Millier, La Défense 6, 92400
Courbevoie, France. It is registered in the French trade registry in
Nanterre under No. 542 051 180 RCS.
Fiscal year: from January 1 to December 31 of each year.
EC Registration Number: FR 59 542 051 180.
APE Code (NAF): 111Z until January 7, 2008; 7010Z since
January 8, 2008.
The Company’s bylaws are on file with K.L. Associés, Notaries in Paris.
The company has two secondary establishments in France, located
in Lacq and Pau.
Its telephone number is +33 (0)1 47 44 45 46 and its internet
address is total.com.
The Company’s term was extended for 99 years from March 22,
2000, to expire on March 22, 2099, unless dissolved prior to this
date or extended.
2.2. Summary of the Company’s corporate 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 bylaws.
198
TOTAL. Registration Document 2016
Articles of incorporation and bylaws; other information
General information 9
2.3. Provisions of the bylaws governing the administration and management bodies
2.3.1. Election of directors and term of office
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 Ordinary 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 bylaws in force. However, his or her 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 or her replacement is named.
Furthermore, a director representing the employees is designated
by the Company’s Central Works Council. Where the number of
directors appointed by the Shareholders’ Meeting is greater than
12 (1), a second director representing the employees is designated
by the Company’s European Works Council. In accordance with
applicable legal provisions, the director elected by the Central
Works Council must have held an employment contract with the
Company or one of its direct or indirect subsidiaries, whose
registered office is based in mainland France, for at least two years
prior to appointment. The second director elected by the European
Works Council must have held an employment contract with the
Company or one of its direct or indirect subsidiaries for at least two
years prior to appointment. The term of office for a director
representing the employees is three years. However, the term of
office ends following the Ordinary Shareholders’ Meeting called to
approve the financial statements for the last fiscal year and held in
the year during which the said director’s term of office expires.
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 of the Board and
the Chief Executive Officer
The duties of the Chairman of the Board automatically cease on his
or her 70th birthday at the latest.
To hold this office, the Chief Executive Officer must be under the
age of 67. When the age limit is reached during his or her duties,
such duties automatically cease, and the Board of Directors elects
a new Chief Executive Officer. However, his or her duties as Chief
Executive Officer will continue until the date of the Board of
Directors’ meeting aimed at electing his or her successor. Subject
to the age limit specified above, the Chief Executive Officer can
always be re-elected.
The age limits specified above are stipulated in the Company’s
bylaws and were approved by the Annual Shareholders’ Meeting
held on May 16, 2014.
2.3.4. Minimum interest in the Company
held by directors
Each director (other than the director representing the employee
shareholders or the director representing the employees) must own
at least 1,000 shares of stock during his or her term of office. If,
however, any director ceases to own the required number of
shares, they may adjust their position subject to the conditions set
by law. The director representing employee shareholders must hold,
during his or her term of office, either individually or through a
Company Savings Plan (Fonds Commun de Placement
d’Entreprise, FCPE) governed by Article L. 214-165 of the French
Monetary and Financial Code, at least one share or a number of
units in said fund equivalent to at least one share. The director
representing the employees is not bound to be a shareholder.
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 person chairing the
meeting shall cast the deciding vote.
2.3.6. Rules of procedure of the Board and
Committees of the Board of Directors
Refer to point 1 of chapter 5 of this Registration Document.
2.3.7. Form of management
Management of the Company is assumed either by the Chairman
of the Board (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.
At its meeting on December 16, 2015, the Board of Directors
decided to reunify the positions of Chairman and Chief Executive
Officer of TOTAL S.A. as of December 19, 2015. As of such date,
Mr. Pouyanné was appointed Chairman and Chief Executive Officer
of TOTAL S.A. For further information on governance structure,
refer to point 1.2.1 of chapter 5.
(1) Neither the director representing employee shareholders, elected by the Annual Shareholders’ Meeting, nor the director(s) representing employees are taken into consideration when
calculating the 12-member threshold, which is assessed on the date on which the employee director(s) is / are elected.
Registration Document 2016. TOTAL
199
9 General information
Articles of incorporation and bylaws; 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 that is proportional to the number of shares
issued, subject to the laws and regulations in force and the bylaws.
Since in such circumstances the limitation no longer applies, such
limitation on voting rights cannot prevent or 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.
With the exception of double voting rights, no privilege is attached
to a specific class of shares or to a specific class of shareholders.
2.4.3. Fractional rights
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 share 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 bylaws 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. In the case of double voting rights, by himself or
through his agent, this limit may be exceeded, taking only the
resulting additional voting rights into account, provided that the total
voting rights that he exercises do not exceed 20% of the total voting
rights associated with the shares in the Company.
Moreover, Article 18 of the bylaws 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 bylaws
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 thirds of the
overall number of shares of the Company was made possible, and
not solely to the first meeting following that public tender offer.
2.5. Amending shareholders’ 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 Company may distribute dividends under the conditions
provided for by the French Commercial Code and the Company’s
bylaws.
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 that have not been claimed at the end of a 5-year period
are forfeited to the French State.
Any amendment to the bylaws 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 the bylaws).
200
TOTAL. Registration Document 2016
Articles of incorporation and bylaws; other information
General information 9
2.6. Shareholders’ Meetings
2.6.1. Notice of meetings
Shareholders’ Meetings are convened and conducted under the
conditions provided for by law.
The Ordinary Shareholders’ Meeting is called to take any decisions
that do not modify the Company’s bylaws. It is held at least once a
year within six months of the closing date of each fiscal year to
approve the financial statements of that year. It may only deliberate,
at its first meeting, if the shareholders present, represented or
participating by remote voting hold at least one fifth of the shares
that confer voting rights. No quorum is required at its second
meeting. Ordinary Shareholders’ Meeting decisions are made with
the majority of votes of shareholders present, represented or
participating by remote voting.
Only the Extraordinary Shareholders’ Meeting is authorized to
modify the bylaws. It may not, however, increase shareholders’
commitments. It may only deliberate, at its first meeting, if the
shareholders present, represented or participating by remote voting
hold at least one quarter, and, at the second meeting, one fifth, of
the shares that confer voting rights. Decisions of Extraordinary
Shareholders’ Meetings are made with a two thirds majority of
votes of shareholders present, represented or participating by
remote voting.
One or several shareholders holding a certain percentage of the
Company’s share capital (calculated using a decreasing scale
based on the share capital) may ask for items or resolution drafts to
be added to the agenda of a Shareholders’ Meeting under the
forms, terms and deadlines set forth by the French Commercial
Code. Requests to add items or resolution drafts to the agenda
must be sent no later than 20 days after the publication of the
notice of meeting that the Company must publish in the French
official journal of legal notices (Bulletin des annonces légales
obligatoires, BALO). Any request to add an item to the agenda
must be justified. Any request to add a draft resolution must be
accompanied by the draft resolution text and brief summary of the
grounds for this request. Requests made by shareholders must be
accompanied by a proof of their share ownership and their
ownership of the portion of capital as required by the regulations.
Review of the item or draft resolution filed pursuant to regulatory
conditions is subject to those making the request providing a new
attestation justifying the shares being recorded in a book-entry form
in the same accounts on the second working date preceding the
date of the meeting.
The Central Works Council may also request the addition of draft
resolutions to the meeting agendas under the forms, terms and
deadlines set by the French Labor Code. In particular, requests to
add draft resolutions must be sent within 10 business days
following the date the notice of meeting was published.
2.6.2. Admission to meetings
Participation in any form in Shareholders’ Meetings is subject to
registration of participating shares, either 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 is obtained under a certificate
of participation (attestation de participation) delivered to the
shareholder. Registration of the shares must be effective no later
than midnight (Paris time) on the second business day preceding
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. Identification of the holders of bearer shares
In accordance with Article 9 of its bylaws, TOTAL S.A. 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.
2.8. Thresholds to be declared according to the bylaws
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 that is equal to or
greater than 1%, or a multiple of this percentage, is required to
notify the Company within 15 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, as
specified in the preceding paragraph, any shares held in excess of,
the threshold that should have been declared will be deprived of
voting rights at Shareholders’ Meetings if, at a Shareholders’
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 thresholds
mentioned in the first paragraph.
Registration Document 2016. TOTAL
201
9 General information
Historical financial information and other information
2.9. 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 bylaws, charter, or internal regulations provide
for more stringent conditions than the law governing changes in the
Company’s share capital.
The French Commercial Code stipulates that shareholders hold,
in proportion to their number of shares, a pre-emptive subscription
right to shares issued for cash to increase the share capital.
The Extraordinary Shareholders’ Meeting can decide, under the
conditions provided for by law, to remove this pre-emptive
subscription right.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
202
TOTAL. Registration Document 2016
9.Comptes consolidés
Consolidated Financial Statements
10
Consolidated Financial Statements
The Consolidated Financial Statements were approved by the Board of Directors on February 8, 2017 and have not been updated with
subsequent events.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
2. Consolidated statement of income 207
3. Consolidated statement of comprehensive income 208
4. Consolidated balance sheet 209
5. Consolidated statement of cash flow 210
6. Consolidated statement of changes in shareholders’ equity 211
7. Notes to the Consolidated Financial Statements 212
Basis of preparation of the Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .212
Major judgments and accounting estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .212
Judgments in case of transactions not addressed by any accounting standard or interpretation . . . . . . . . . . . . . . . . . . . .213
General accounting policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .213
Changes in the Group structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .214
Business segment information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .215
Segment Information by geographical area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .227
Main items related to operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .228
Other items from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .233
Intangible and tangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .235
Equity affiliates, other investments and related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .239
Shareholders’ equity and share-based payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .245
Payroll, staff and employee benefits obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .254
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .258
Provisions and other non-current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .260
Commitments and lease contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .263
Financial assets and liabilities analysis per instrument class and strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .267
Financial structure and financial costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .270
Financial instruments related to commodity contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .285
Post closing events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .289
Consolidation scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .290
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
11)
12)
13)
14)
15)
16)
17)
18)
Registration Document 2016. TOTAL
205
[THIS PAGE INTENTIONALLY LEFT BLANK]
Consolidated Financial Statements 10
Consolidated statement of income
2. Consolidated statement of income
TOTAL
For the year ended December 31,
(M$)(a) 2016 2015 20 14
Sales (Notes 3, 4, 5) 149,743 165,357 236,122
Excise taxes (Notes 3, 5) (21,818) (21,936) (24,104)
Revenues from sales (Notes 3, 5) 127,925 143,421 212,018
Purchases, net of inventory variation (Note 5) (83,377) (96,671) (152,975)
Other operating expenses (Note 5) (24,302) (24,345) (28,349)
Exploration costs (Note 5) (1,264) (1,991) (1,964)
Depreciation, depletion and impairment of tangible assets and mineral interests (Note 5) (13,523) (17,720) (19,656)
Other income (Note 6) 1,299 3,606 2,577
Other expense (Note 6) (1,027) (1,577) (954)
Financial interest on debt (1,108) (967) (748)
Financial income and expense from cash & cash equivalents 4 94 108
Cost of net debt (Note 15) (1,104) (873) (640)
Other financial income (Note 6) 971 882 821
Other financial expense (Note 6) (636) (654) (676)
Equity in net income (loss) of affiliates (Note 8) 2,214 2,361 2,662
Income taxes (Note 11) (970) (1,653) (8,614)
Consolidated net income 6,206 4,786 4,250
Group share 6,196 5,087 4,244
Non-controlling interests 10 (301) 6
Earnings per share ($) 2.52 2.17 1.87
Fully-diluted earnings per share ($) 2.51 2.16 1.86
(a) Except for per share amounts.
Registration Document 2016. TOTAL
207
10 Consolidated Financial Statements
Consolidated statement of comprehensive income
3. Consolidated statement of comprehensive income
TOTAL
For the year ended December 31,
(M$) 2016 2015 20 14
Consolidated net income
6,206 4,786 4,250
Other comprehensive income
Actuarial gains and losses
Tax effect
Currency translation adjustment generated by the parent company
(Note 10) (371) 557 (1,526)
55 (278) 580
(Note 9) (1,548) (7,268) (9,039)
Items not potentially reclassifiable to profit and loss
(1,864) (6,989) (9,985)
Currency translation adjustment
Available for sale financial assets
Cash flow hedge
Share of other comprehensive income of equity affiliates, net amount
Other
Tax effect
(Note 9) (1,098) 2,456 4,245
(Note 8) 4 9 (29)
(Notes 15, 16) 239 (185) 97
(Note 8) 935 120 (1,538)
1 1 3
(76) 53 (18)
Items potentially reclassifiable to profit and loss
5 2,454 2,760
Total other comprehensive income (net amount)
(1,859) (4,535) (7,225)
Comprehensive income
Group share
Non-controlling interests
4,347 251 (2,975)
4,336 633 (2,938)
11 (382) (37)
208
TOTAL. Registration Document 2016
Consolidated Financial Statements 10
Consolidated balance sheet
4. Consolidated balance sheet
TOTAL
As of December 31,
(M$)
ASSETS 2016 2015 2014
Non-current assets
Intangible assets, net (Notes 4 & 7) 15,362 14,549 14,682
Property, plant and equipment, net (Notes 4 & 7) 111,971 109,518 106,876
Equity affiliates: investments and loans (Note 8) 20,576 19,384 19,274
Other investments (Note 8) 1,133 1,241 1,399
Non-current financial assets (Note 15) 908 1,219 1,319
Deferred income taxes (Note 11) 4,368 3,982 4,079
Other non-current assets (Note 6) 4,143 4,355 4,192
Total non-current assets 158,461 154,248 151,821
Current assets
Inventories, net (Note 5) 15,247 13,116 15,196
Accounts receivable, net (Note 5) 12,213 10,629 15,704
Other current assets (Note 5) 14,835 15,843 15,702
Current financial assets (Note 15) 4,548 6,190 1,293
Cash and cash equivalents (Note 15) 24,597 23,269 25,181
Assets classified as held for sale (Note 2) 1,077 1,189 4,901
Total current assets 72,517 70,236 77,977
Total assets 230,978 224,484 229,798
LIABILITIES & SHAREHOLDERS’ EQUITY 2016 2015 20 14
Shareholders’ equity
Common shares 7,604 7,670 7,518
Paid-in surplus and retained earnings 105,547 101,528 94,646
Currency translation adjustment (13,871) (12,119) (7,480)
Treasury shares (600) (4,585) (4,354)
Total shareholders’ equity – Group share (Note 9) 98,680 92,494 90,330
Non-controlling interests 2,894 2,915 3,201
Total shareholders’ equity 101,574 95,409 93,531
Non-current liabilities
Deferred income taxes (Note 11) 11,060 12,360 14,810
Employee benefits (Note 10) 3,746 3,774 4,758
Provisions and other non-current liabilities (Note 12) 16,846 17,502 17,545
Non-current financial debt (Note 15) 43,067 44,464 45,481
Total non-current liabilities 74,719 78,100 82,594
Current liabilities
Accounts payable 23,227 20,928 24,150
Other creditors and accrued liabilities (Note 5) 16,720 16,884 16,641
Current borrowings (Note 15) 13,920 12,488 10,942
Other current financial liabilities (Note 15) 327 171 180
Liabilities directly associated with the assets classified as held for sale (Note 2) 491 504 1,760
Total current liabilities 54,685 50,975 53,673
Total liabilities & shareholders’ equity 230,978 224,484 229,798
Registration Document 2016. TOTAL
209
10 Consolidated Financial Statements
Consolidated statement of cash flow
5. Consolidated statement of cash flow
TOTAL
For the year ended December 31,
(M$)
CASH FLOW FROM OPERATING ACTIVITIES
2016
2015
2014
Consolidated net income 6,206 4,786 4,250
Depreciation, depletion, amortization and impairment (Note 5.3) 14,423 19,334 20,859
Non-current liabilities, valuation allowances, and deferred taxes (Note 5.5) (1,559) (2,563) (1,980)
(Gains) losses on disposals of assets (263) (2,459) (1,979)
Undistributed affiliates’ equity earnings (643) (311) 29
(Increase) decrease in working capital (Note 5.5) (1,119) 1,683 4,480
Other changes, net (524) (524) (51)
Cash flow from operating activities 16,521 19,946 25,608
CASH FLOW USED IN INVESTING ACTIVITIES
Intangible assets and property, plant and equipment additions (Note 7) (18,106) (25,132) (26,320)
Acquisitions of subsidiaries, net of cash acquired (1,123) (128) (471)
Investments in equity affiliates and other securities (180) (513) (949)
Increase in non-current loans (1,121) (2,260) (2,769)
Total expenditures (20,530) (28,033) (30,509)
Proceeds from disposals of intangible assets and property, plant and equipment 1,462 2,623 3,442
Proceeds from disposals of subsidiaries, net of cash sold 270 2,508 136
Proceeds from disposals of non-current investments 132 837 1,072
Repayment of non-current loans 1,013 1,616 1,540
Total divestments 2,877 7,584 6,190
Cash flow used in investing activities (17,653) (20,449) (24,319)
CASH FLOW FROM FINANCING ACTIVITIES
Issuance (repayment) of shares:
– Parent company shareholders 100 485 420
– Treasury shares - (237) (289)
Dividends paid:
– Parent company shareholders (2,661) (2,845) (7,308)
– Non-controlling interests (93) (100) (154)
Issuance of perpetual subordinated notes (Note 9) 4,711 5,616 -
Payments on perpetual subordinated notes (133) - -
Other transactions with non-controlling interests (104) 89 179
Net issuance (repayment) of non-current debt (Note 15) 3,576 4,166 15,786
Increase (decrease) in current borrowings (3,260) (597) (2,374)
Increase (decrease) in current financial assets and liabilities 1,396 (5,517) (351)
Cash flow from / (used in) financing activities 3,532 1,060 5,909
Net increase (decrease) in cash and cash equivalents 2,400 557 7,198
Effect of exchange rates (1,072) (2,469) (2,217)
Cash and cash equivalents at the beginning of the period 23,269 25,181 20,200
Cash and cash equivalents at the end of the period (Note 15) 24,597 23,269 25,181
210
TOTAL. Registration Document 2016
Consolidated statement of changes in shareholders’ equity
Consolidated Financial Statements 10
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’
Number Amount Group share
Total
Non-
equity controlling shareholders’
equity
interests
As of January 1, 2014 2,377,678,160 7,493 98,254 (1,203) (109,214,448) (4,303) 100,241 3,138 103,379
Net income 2014 - - 4,244 - - - 4,244 6 4,250
Other comprehensive income - - (907) (6,275) - - (7,182) (43) (7,225)
Comprehensive income - - 3,337 (6,275) - - (2,938) (37) (2,975)
Dividend - - (7,378) - - - (7,378) (154) (7,532)
Issuance of common shares 7,589,365 25 395 - - - 420 - 420
Purchase of treasury shares - - - - (4,386,300) (283) (283) - (283)
Sale of treasury shares (a) - - (232) - 4,239,335 232 - - -
Share-based payments - - 114 - - - 114 - 114
Share cancellation - - - - - - - - -
Other operations with
non-controlling interests - - 148 (2) - - 146 195 341
Other items - - 8 - - - 8 59 67
As of December 31, 2014 2,385,267,525 7,518 94,646 (7,480) (109,361,413) (4,354) 90,330 3,201 93,531
Net income 2015 - - 5,087 - - - 5,087 (301) 4,786
Other comprehensive income - - 185 (4,639) - - (4,454) (81) (4,535)
Comprehensive income - - 5,272 (4,639) - - 633 (382) 251
Dividend - - (6,303) - - - (6,303) (100) (6,403)
Issuance of common shares 54,790,358 152 2,159 - - - 2,311 - 2,311
Purchase of treasury shares - - - - (4,711,935) (237) (237) - (237)
Sale of treasury shares (a) - - (6) - 105,590 6 - - -
Share-based payments - - 101 - - - 101 - 101
Share cancellation - - - - - - - - -
Issuance of perpetual
subordinated notes - - 5,616 - - - 5,616 - 5,616
Payments on perpetual
subordinated notes - - (114) - - - (114) - (114)
Other operations with
non-controlling interests - - 23 - - - 23 64 87
Other items - - 134 - - - 134 132 266
As of December 31, 2015 2,440,057,883 7,670 101,528 (12,119) (113,967,758) (4,585) 92,494 2,915 95,409
Net income 2016 - - 6,196 - - - 6,196 10 6,206
Other comprehensive income - - (108) (1,752) - - (1,860) 1 (1,859)
Comprehensive income - - 6,088 (1,752) - - 4,336 11 4,347
Dividend - - (6,512) - - - (6,512) (93) (6,605)
Issuance of common shares 90,639,247 251 3,553 - - - 3,804 - 3,804
Purchase of treasury shares - - - - - - - - -
Sale of treasury shares (a) - - (163) - 3,048,668 163 - - -
Share-based payments - - 112 - - - 112 - 112
Share cancellation (100,331,268) (317) (3,505) - 100,331,268 3,822 - - -
Issuance of perpetual
subordinated notes - - 4,711 - - - 4,711 - 4,711
Payments on perpetual
subordinated notes - - (203) - - - (203) - (203)
Other operations with
non-controlling interests - - (98) - - - (98) (43) (141)
Other items - - 36 - - - 36 104 140
As of December 31, 2016 2,430,365,862 7,604 105,547 (13,871) (10,587,822) (600) 98,680 2,894 101,574
(a) Treasury shares related to the restricted stock grants.
Changes in equity are detailed in Note 9.
Registration Document 2016. TOTAL
211
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements
7. Notes to the Consolidated Financial Statements
On February 8, 2017, the Board of Directors established and authorized the publication of the Consolidated Financial Statements of TOTAL S.A.
for the year ended December 31, 2016, which will be submitted for approval to the Shareholders’ Meeting to be held on May 26, 2017.
Basis of preparation of the Consolidated Financial Statements
The Consolidated Financial Statements of TOTAL S.A. and its
subsidiaries (the Group) are presented in U.S. dollars 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, 2016.
The accounting policies and principles applied in the Consolidated
Financial Statements as of December 31, 2016 were the same as
those that were used as of December 31, 2015 except for
standards, amendments and interpretations of IFRS which were
mandatory for the periods beginning after January 1, 2016 (and not
early adopted). Their application did not have a significant impact
on the financial statements as of December 31, 2016.
Major judgments and accounting estimates
The preparation of financial statements in accordance with IFRS for
the closing as of December 31, 2016 requires the executive
management to make estimates, assumptions and judgments that
affect the information reported in the Consolidated Financial
Statements and the Notes thereto.
These estimates, assumptions and judgments are based on
historical experience and other factors believed to be reasonable at
the date of preparation of the financial statements. They are reviewed
on an on-going basis by management and therefore could be
revised as circumstances change or as a result of new information.
Different estimates, assumptions and judgments could significantly
affect the information reported, and actual results may differ from
the amounts included in the Consolidated Financial Statements and
the Notes thereto.
The following summary provides further information about the key
estimates, assumptions and judgments that are involved in
preparing, the Consolidated Financial Statements and the Notes
thereto. It should be read in conjunction with the sections of the
Notes mentioned in the summary.
unless prices are defined by contractual arrangements, excluding
escalations based upon future conditions. The Group reassesses
its oil and gas reserves at least once a year on all its properties.
The Successful Efforts method and the mineral interests and
property and equipment of exploration and production are presented
in Note 7 “Intangible and tangible assets”.
Impairment of assets
As part of the determination of the recoverable value of assets for
impairment (IAS36), the estimates, assumptions and judgments mainly
concern hydrocarbon prices scenarios, operating costs, production
volumes and oil and gas proved reserves, refining margins and
product marketing conditions (mainly petroleum, petrochemical and
chemical products as well as solar industry products). The estimates
and assumptions used by the executive management are determined
in specialized internal departments in light of economic conditions and
external expert analysis. The discount rate is reviewed annually.
Asset impairment and the method applied are described in Note 3
“Business segment information”.
Estimation of hydrocarbon reserves
Employee benefits
The estimation of oil and gas reserves is a key factor in the Successful
Efforts method used by the Group to account for its oil and gas
activities.
The Group’s oil and gas reserves are estimated by the Group’s
petroleum engineers in accordance with industry standards and
SEC (U.S. Securities and Exchange Commission) regulations.
Proved oil and gas reserves are those quantities of oil and gas,
which, by analysis of geosciences and engineering data, can be
determined with reasonable certainty to be recoverable (from a
given date forward, from known reservoirs, and under existing
economic conditions, operating methods, and government regulations),
prior to the time at which contracts providing the rights to operate
expire, unless evidence indicates that renewal is reasonably certain,
regardless of whether deterministic or probabilistic methods are
used for the estimation.
The benefit obligations and plan assets can be subject to significant
volatility due in part to changes in market values and actuarial
assumptions. These assumptions vary between different pension
plans and thus take into account local conditions. They are
determined following a formal process involving expertise and Group
internal judgments, in financial and actuarial terms, and also in
consultation with actuaries and independent experts.
The assumptions for each plan are reviewed annually and adjusted
if necessary to reflect changes from the experience and actuarial
advices.
Payroll, staff and employee benefits obligations and the method
applied are described in Note 10 “Payroll, staff and employee
benefits obligations”.
Asset retirement obligations
Proved oil and gas reserves 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
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.
212
TOTAL. Registration Document 2016
Note 1 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
This estimate is based on information available in terms of costs
and work program. It is regularly reviewed to take into account the
changes in laws and regulations, the estimates of reserves and
production, the analysis of site conditions and technologies.
The discount rate is reviewed annually.
Asset retirement obligations and the method used are described in
Note 12 “Provisions and other non-current liabilities”.
Income Taxes
A tax liability is recognized when a future payment, in application
of a tax regulation, is considered probable and can be reasonably
estimated. The exercise of judgment is required to assess the impact
of new events on the amount of the liability.
Deferred tax assets are recognized in the accounts to the extent
that their recovery is considered probable. The amount of these
assets is determined based on future taxable profits estimated
inherently uncertain and subject to change over time. The exercise
of judgment is required to assess the impact of new events on the
value of these assets and including changes in estimates of future
taxable profits and the deadlines for their use.
In addition, these tax positions may depend on interpretations of
tax laws and regulations in the countries where the Group operates.
These interpretations may have uncertain nature. Depending on the
circumstances, they are final only after negotiations or resolution of
disputes with authorities that can last several years.
Incomes taxes and the accounting methods are described in Note
11 “Income taxes”.
Judgments in case of transactions not addressed by any accounting standard
or interpretation
Furthermore, when 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 provide information consistent with the general IFRS
concepts: faithful representation, relevance and materiality.
1) General accounting policies
1.1) Accounting policies
A) Principles of consolidation
Entities that are directly controlled by the parent company or indirectly
controlled by other consolidated entities are fully consolidated.
Investments in joint ventures are consolidated under the equity
method. The Group accounts for joint operations by recognizing
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 internal balances, transactions and income are eliminated.
B) Business combinations
Business combinations are accounted for using the acquisition
method. This method requires the recognition of the acquired
identifiable assets and assumed liabilities of the companies
acquired by the Group at their fair value.
The value of the purchase price is finalized up to a maximum of one
year from the acquisition date.
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. After having completed such
additional analysis, any badwill is recorded as income.
Non-controlling interests are measured either at their proportionate
share in the net assets of the acquired company or at fair value.
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.
C) Foreign currency translation
The presentation currency of the Group’s Consolidated Financial
Statements is the US dollar. However the functional currency of the
parent company is the euro. The resulting currency translation
adjustments are presented on the line “currency translation
adjustment generated by the parent company” of the consolidated
statement of comprehensive income, within “items not potentially
reclassifiable to profit and loss”. In the balance sheet, they are
recorded in “currency translation adjustment”.
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 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
Assets and liabilities of entities denominated in currencies other
than dollar are translated into dollar on the basis of the exchange
rates at the end of the period. The income and cash flow statements
Registration Document 2016. TOTAL
213
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Notes 1, 2
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.
1.2) Significant accounting policies applicable in the future
The standards or interpretations published respectively by the
International Accounting Standards Board (IASB) and the International
Financial Reporting Standards Interpretations Committee (IFRS IC)
which were not yet in effect at December 31, 2016, are as follows:
• Standards adopted by the European Union at December 31, 2016
– In May 2014, the IASB issued standard IFRS 15 that includes
requirements for the recognition of revenue from contracts with
customers. The standard is applicable for annual periods starting
on or after January 1, 2018. An analysis was performed at Group
level in order to evaluate the impacts of the standard. Main issues
analyzed are related to take or pay, incoterms, excise duties,
principal vs agent considerations, variable price adjustment
clause. Impact of the standard is expected to be not significant
for the Group.
– In July 2014, the IASB issued standard IFRS 9 “Financial
Instruments” that includes requirements for the recognition and
measurement of financial instruments. This standard brings
together three phases: classification and measurement,
impairment of financial assets and hedge accounting excluding
macro-hedging. The standard is applicable for annual periods
starting on or after January 1, 2018. The impacts of the application
of this standard are under analysis.
• Standards not yet adopted by the European Union at
December 31, 2016
– In addition, in January 2016, the IASB issued standard IFRS 16,
which sets out the principles for recognition of leases contracts.
The standard is applicable for annual periods starting on or after
January 1, 2019. A working group was set up to evaluate the
impacts of the standard and manage the transition. This working
group is currently identifying lease contracts and estimating
expected impacts at Group level.
2) Changes in the Group structure
2.1) Main acquisitions and divestments
In 2016, the main changes in the Group structure and main
acquisitions and divestments were as follows:
Upstream
– In March 2016, TOTAL finalized the sale to North Sea Midstream
Partners of all its interests in the FUKA and SIRGE gas pipelines,
and the St. Fergus gas terminal in the United Kingdom.
– In June 2016, TOTAL has signed an agreement with Qatar
Petroleum, granting the Group a 30% interest in the concession
covering the offshore Al Shaheen oil field in Qatar for a period of
25 years beginning July 14, 2017.
– In June 2016, TOTAL and Lampiris, the third-largest supplier of
natural gas and renewable power to the Belgium residential sector,
have signed an agreement under which TOTAL has acquired all of
the shares in Lampiris. All regulatory approvals being obtained,
the transaction was finalized on September 29, 2016.
– In August 2016, TOTAL finalized the transfer to Zarubezhneft of a
20% stake and the operatorship in Kharyaga, Russia.
– In September 2016, TOTAL exercised its preemption rights to
acquire Chesapeake’s 75% interests in the Barnett Shale
operating area located in North Texas, in which it already held a
25% interest since December 2009. The acquisition breakdown
is presented in Note 2.2 to the Consolidated Financial Statements.
Marketing & Services
– In January 2016, TOTAL finalized the acquisition of a majority
70% interest in the leading Dominican fuel retailer.
– In April 2016, TOTAL finalized the sale to Demirören Group of its
service station network and commercial sales, supply and
logistics assets located in Turkey.
– In July 2016, in the activity of New Energies, TOTAL has acquired
via a friendly tender offer a majority 90.14% interest in SAFT
Groupe, a world leading designer and manufacturer of advanced
technology batteries for the industry. In August 2016, following
the reopening of the public tender offer, TOTAL increased its
interest to 100%. The acquisition breakdown is presented in
Note 2.2 to the Consolidated Financial Statements.
214
TOTAL. Registration Document 2016
Notes 2, 3 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
2.2) Major business combinations
Upstream
The acquisition was carried out in two steps:
– The acquisition of Chesapeake’s 75% interests in the Barnett
Shale operating area was finalized on November 1, 2016 at cost
of $638 million. In accordance with IFRS 3, TOTAL is currently
assessing the fair value of identifiable acquired assets and
assumed liabilities and contingent liabilities. At December 31, 2016
the fair value of the identifiable assets acquired and assumed
liabilities amounted to $638 million of which $612 million of mining
interests, $76 million of tangible assets and $(50) million of other
assets and liabilities.
– a first step where TOTAL obtained control over SAFT by the acquisition
of 90.14% of its shares for an amount of €856 million ($954 million)
and recorded on this operation a partial goodwill of €423 million
($472 million);
– a second step where TOTAL acquired the remaining 9.86%
for an amount of €105 million, treated as a transaction with
non-controlling interests.
The net book value by main categories of assets and liabilities
is as follows:
Marketing & Services – New Energies
($ million)
At the acquisition date
– The acquisition cost of SAFT Groupe amounts to €961 million
($1,064 million), for a net book value of the assets and liabilities
acquired at 100% of €482 million ($535 million).
Goodwill
Intangible assets
Tangible assets
Other assets and liabilities
Debt net of acquired cash & cash equivalents
Net assets attributable to non-controlling interests
Fair value of the consideration paid
472
497
236
(106)
(92)
(53)
954
2.3) Divestment projects
Accounting policies
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.
Depreciation of assets ceases from the date of classification
in “Non-current assets held for sale”.
Refining & Chemicals
– Following the sale offering of its electroplating activity Atotech in
May 2016, the assets and liabilities have been classified in the
consolidated balance sheet respectively in “assets classified as
held for sale” for an amount of $1,077 million and “liabilities
directly associated with the assets classified as held for sale”
for an amount of $491 million at December 31, 2016. The assets
and liabilities concerned mainly include tangible assets for an
amount of $351 million, inventories for an amount of $145 million,
receivables for an amount of $236 million, non-current liabilities
for an amount of $181 million, payables for an amount of $97 million
and other creditors and accrued liabilities for an amount
of $199 million.
On October 7, 2016, TOTAL announced the sale of Atotech to the
Carlyle Group for an amount of $3.2 billion. As of January 31, 2017,
all required authorizations being obtained, the transaction was closed.
3) Business segment information
Description of the business segments
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 and which is reviewed by the main operational decision-
making body of the Group, namely the Executive Committee.
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.
The Group’s activities are divided into three business segments
as follows:
– an Upstream segment including, alongside the activities of the
Exploration & Production of hydrocarbons, the activities of Gas;
– a Refining & Chemicals segment constituting a major industrial
hub comprising the activities of refining, petrochemicals and
specialty chemicals. This segment also includes the activities
of oil Trading & Shipping; and marine shipping;
– a Marketing & Services segment including the global activities
of supply and marketing in the field of petroleum products as well
as the activity of New Energies.
In addition, the Corporate segment includes holdings operating and
financial activities.
Registration Document 2016. TOTAL
215
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 3
Definition of the indicators
(i) Operating income
(measure used to evaluate operating performance)
Revenue from sales after deducting cost of goods sold and
inventory variation, other operating expenses, exploration expenses
and depreciation, depletion, and impairment of tangible assets and
mineral interests.
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 Group share 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 below.
(iv) Fully-diluted adjusted earnings per share
Adjusted net income divided by the fully-diluted weighted-average
number of common shares.
(v) Capital employed
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 net operating income to average capital employed
between the beginning and the end of the period.
Adjustment items
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 Refining & Chemicals and Marketing &
Services 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
The effect of changes in fair value presented as adjustment items
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.
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.
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.
216
TOTAL. Registration Document 2016
Note 3 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
A) Information by business segment
For the year ended December 31, 2016
(M$)
Upstream Refining & Marketing
& Services
Chemicals
Corporate
Intercompany
Total
Non-Group sales 14,683 65,632 69,421 7 - 149,743
Intersegment sales 17,070 21,467 747 307 (39,591) -
Excise taxes - (3,544) (18,274) - - (21,818)
Revenues from sales 31,753 83,555 51,894 314 (39,591) 127,925
Operating expenses (20,438) (77,553) (49,538) (1,005) 39,591 (108,943)
Depreciation, depletion and impairment
of tangible assets and mineral interests (11,589) (1,002) (895) (37) - (13,523)
Operating income (274) 5,000 1,461 (728) - 5,459
Equity in net income (loss) of affiliates and other items 1,489 833 84 415 - 2,821
Tax on net operating income 363 (1,245) (506) 164 - (1,224)
Net operating income 1,578 4,588 1,039 (149) - 7,056
Net cost of net debt (850)
Non-controlling interests (10)
Net income 6,196
For the year ended December 31, 2016
(adjustments)(a)
Upstream Refining & Marketing
& Services
Chemicals
(M$)
Total
Corporate
Intercompany
Total
Non-Group sales (231) - - - - (231)
Intersegment sales - - - - - -
Excise taxes - - - - - -
Revenues from sales (231) - - - - (231)
Operating expenses (691) 627 (217) - - (281)
Depreciation, depletion and impairment
of tangible assets and mineral interests (2,089) - (140) - - (2,229)
Operating income (b) (3,011) 627 (357) - - (2,741)
Equity in net income (loss) of affiliates and other items (199) (39) (230) (4) - (472)
Tax on net operating income 1,155 (201) 40 1 - 995
Net operating income (b) (2,055) 387 (547) (3) - (2,218)
Net cost of net debt (23)
Non-controlling interests 150
Net income (2,091)
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
(b) Of which inventory valuation effect
On operating income - 695 (43) -
On net operating income - 500 (13) -
Registration Document 2016. TOTAL
217
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 3
For the year ended December 31, 2016
(adjusted)
(M$) (a)
Upstream Refining & Marketing
& Services
Chemicals
Corporate
Intercompany
Total
Non-Group sales 14,914 65,632 69,421 7 - 149,974
Intersegment sales 17,070 21,467 747 307 (39,591) -
Excise taxes - (3,544) (18,274) - - (21,818)
Revenues from sales 31,984 83,555 51,894 314 (39,591) 128,156
Operating expenses (19,747) (78,180) (49,321) (1,005) 39,591 (108,662)
Depreciation, depletion and impairment
of tangible assets and mineral interests (9,500) (1,002) (755) (37) - (11,294)
Adjusted operating income 2,737 4,373 1,818 (728) - 8,200
Equity in net income (loss) of affiliates and other items 1,688 872 314 419 - 3,293
Tax on net operating income (792) (1,044) (546) 163 - (2,219)
Adjusted net operating income 3,633 4,201 1,586 (146) - 9,274
Net cost of net debt (827)
Non-controlling interests (160)
Adjusted net income 8,287
Adjusted fully-diluted earnings per share ($) 3.38
(a) Except for earnings per share.
For the year ended December 31, 2016
(M$)
Upstream Refining & Marketing
& Services
Chemicals
Corporate
Intercompany
Total
Total expenditures 16,035 1,849 2,506 140 - 20,530
Total divestments 2,331 86 446 14 - 2,877
Cash flow from operating activities 9,675 4,587 1,623 636 - 16,521
Balance sheet as of December 31, 2016
Property, plant and equipment, intangible assets, net 109,775 9,293 7,900 365 - 127,333
Investments & loans in equity affiliates 16,213 3,303 1,060 - - 20,576
Other non-current assets 7,097 568 1,857 122 - 9,644
Working capital 1,909 2,641 1,114 (3,316) - 2,348
Provisions and other non-current liabilities (26,281) (3,569) (2,019) 217 - (31,652)
Assets and liabilities classified as held for sale -
Capital Employed - 446 - - - 446
Capital Employed (balance sheet) 108,713 12,682 9,912 (2,612) - 128,695
Less inventory valuation effect - (1,064) (211) 3 - (1,272)
Capital Employed (Business segment information) 108,713 11,618 9,701 (2,609) - 127,423
ROACE as a percentage 3% 38% 18% - - 7%
218
TOTAL. Registration Document 2016
Note 3 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
For the year ended December 31, 2015
(M$)
Upstream Refining & Marketing
& Services
Chemicals
Corporate
Intercompany
Total
Non-Group sales 16,840 70,623 77,887 7 - 165,357
Intersegment sales 17,927 26,794 911 218 (45,850) -
Excise taxes - (4,107) (17,829) - - (21,936)
Revenues from sales 34,767 93,310 60,969 225 (45,850) 143,421
Operating expenses (21,851) (87,674) (58,467) (865) 45,850 (123,007)
Depreciation, depletion and impairment
of tangible assets and mineral interests (15,857) (1,092) (744) (27) - (17,720)
Operating income (2,941) 4,544 1,758 (667) - 2,694
Equity in net income (loss) of affiliates and other items 2,019 1,780 297 522 - 4,618
Tax on net operating income (294) (1,105) (585) 171 - (1,813)
Net operating income (1,216) 5,219 1,470 26 - 5,499
Net cost of net debt (713)
Non-controlling interests 301
Net income 5,087
For the year ended December 31, 2015
(adjustments) (a)
Upstream Refining & Marketing
& Services
Chemicals
Corporate
Intercompany
Total
(M$)
Non-Group sales (519) - - - - (519)
Intersegment sales - - - - - -
Excise taxes - - - - - -
Revenues from sales (519) - - - - (519)
Operating expenses (564) (1,035) (316) - - (1,915)
Depreciation, depletion and impairment
of tangible assets and mineral interests (6,783) (70) (24) - - (6,877)
Operating income (b) (7,866) (1,105) (340) - - (9,311)
Equity in net income (loss) of affiliates and other items (264) 1,172 24 (19) - 913
Tax on net operating income 2,140 263 87 7 - 2,497
Net operating income (b) (5,990) 330 (229) (12) - (5,901)
Net cost of net debt (11)
Non-controlling interests 481
Net income (5,431)
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
(b) Of which inventory valuation effect
On operating income - (859) (254) -
On net operating income - (590) (169) -
Registration Document 2016. TOTAL
219
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 3
For the year ended December 31, 2015
(adjusted)
(M$) (a)
Upstream Refining & Marketing
& Services
Chemicals
Corporate
Intercompany
Total
Non-Group sales 17,359 70,623 77,887 7 - 165,876
Intersegment sales 17,927 26,794 911 218 (45,850) -
Excise taxes - (4,107) (17,829) - - (21,936)
Revenues from sales 35,286 93,310 60,969 225 (45,850) 143,940
Operating expenses (21,287) (86,639) (58,151) (865) 45,850 (121,092)
Depreciation, depletion and impairment
of tangible assets and mineral interests (9,074) (1,022) (720) (27) - (10,843)
Adjusted operating income 4,925 5,649 2,098 (667) - 12,005
Equity in net income (loss) of affiliates and other items 2,283 608 273 541 - 3,705
Tax on net operating income (2,434) (1,368) (672) 164 - (4,310)
Adjusted net operating income 4,774 4,889 1,699 38 - 11,400
Net cost of net debt (702)
Non-controlling interests (180)
Ajusted net income 10,518
Adjusted fully-diluted earnings per share ($) 4.51
(a) Except for earnings per share.
For the year ended December 31, 2015
Upstream Refining & Marketing Corporate
Intercompany
Total
(M$)
Chemicals
& Services
Total expenditures 24,270 1,843 1,841 79 - 28,033
Total divestments 3,215 3,488 856 25 - 7,584
Cash flow from operating activities 11,182 6,432 2,323 9 - 19,946
Balance sheet as of December 31, 2015
Property, plant and equipment, intangible assets, net 108,218 9,317 6,223 309 - 124,067
Investments & loans in equity affiliates 15,170 3,028 1,186 - - 19,384
Other non-current assets 7,626 640 1,753 (441) - 9,578
Working capital 1,928 1,828 997 (2,977) - 1,776
Provisions and other non-current liabilities (27,844) (3,784) (1,858) (150) - (33,636)
Assets and liabilities classified as held for sale -
Capital Employed 482 - 344 - - 826
Capital Employed (balance sheet) 105,580 11,029 8,645 (3,259) - 121,995
Less inventory valuation effect - (622) (230) - - (852)
Capital Employed (Business segment information) 105,580 10,407 8,415 (3,259) - 121,143
ROACE as a percentage 5% 41% 20% - - 9%
220
TOTAL. Registration Document 2016
Note 3 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
For the year ended December 31, 2014
Upstream Refining & Marketing Corporate
Intercompany
Total
(M$)
Chemicals
& Services
Non-Group sales 23,484 106,124 106,509 5 - 236,122
Intersegment sales 29,183 44,950 1,615 236 (75,984) -
Excise taxes - (4,850) (19,254) - - (24,104)
Revenues from sales 52,667 146,224 88,870 241 (75,984) 212,018
Operating expenses (26,235) (145,014) (86,931) (1,092) 75,984 (183,288)
Depreciation, depletion and impairment
of tangible assets and mineral interests (15,938) (2,901) (781) (36) - (19,656)
Operating income 10,494 (1,691) 1,158 (887) - 9,074
Equity in net income (loss) of affiliates and other items 4,302 90 (140) 178 - 4,430
Tax on net operating income (8,799) 391 (344) (8) - (8,760)
Net operating income 5,997 (1,210) 674 (717) - 4,744
Net cost of net debt (494)
Non-controlling interests (6)
Net income 4,244
For the year ended December 31, 2014
(adjustments) (a)
(M$)
Upstream Refining & Marketing Corporate
Intercompany
Total
Chemicals
& Services
Non-Group sales 31 - - - - 31
Intersegment sales - - - - - -
Excise taxes - - - - - -
Revenues from sales 31 - - - - 31
Operating expenses (164) (2,980) (551) - - (3,695)
Depreciation, depletion and impairment
of tangible assets and mineral interests (6,529) (1,450) - - - (7,979)
Operating income(b) (6,662) (4,430) (551) - - (11,643)
Equity in net income (loss) of affiliates and other items 883 (282) (203) - - 398
Tax on net operating income 1,272 1,013 174 - - 2,459
Net operating income(b) (4,507) (3,699) (580) - - (8,786)
Net cost of net debt -
Non-controlling interests 193
Net income (8,593)
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
(b) Of which inventory valuation effect
On operating income - (2,944) (525) -
On net operating income - (2,114) (384) -
Registration Document 2016. TOTAL
221
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 3
For the year ended December 31, 2014
(adjusted)
(M$) (a)
Upstream Refining & Marketing Corporate
Intercompany
Total
Chemicals
& Services
Non-Group sales 23,453 106,124 106,509 5 - 236,091
Intersegment sales 29,183 44,950 1,615 236 (75,984) -
Excise taxes - (4,850) (19,254) - - (24,104)
Revenues from sales 52,636 146,224 88,870 241 (75,984) 211,987
Operating expenses (26,071) (142,034) (86,380) (1,092) 75,984 (179,593)
Depreciation, depletion and impairment
of tangible assets and mineral interests (9,409) (1,451) (781) (36) - (11,677)
Adjusted operating income 17,156 2,739 1,709 (887) - 20,717
Equity in net income (loss) of affiliates and other items 3,419 372 63 178 - 4,032
Tax on net operating income (10,071) (622) (518) (8) - (11,219)
Adjusted net operating income 10,504 2,489 1,254 (717) - 13,530
Net cost of net debt (494)
Non-controlling interests (199)
Adjusted net income 12,837
Adjusted fully-diluted earnings per share ($) 5.63
(a) Except for earnings per share.
For the year ended December 31, 2014
(M$)
Upstream Refining & Marketing
& Services
Chemicals
Corporate
Intercompany
Total
Total expenditures 26,520 2,022 1,818 149 - 30,509
Total divestments 5,764 192 163 71 - 6,190
Cash flow from operating activities 16,666 6,302 2,721 (81) - 25,608
Balance sheet as of December 31, 2014
Property, plant and equipment, intangible assets, net 105,273 9,512 6,443 330 - 121,558
Investments & loans in equity affiliates 14,921 3,516 837 - - 19,274
Other non-current assets 6,711 959 1,849 151 - 9,670
Working capital 2,015 4,041 2,141 (2,386) - 5,811
Provisions and other non-current liabilities (30,385) (4,290) (2,097) (341) - (37,113)
Assets and liabilities classified as held for sale -
Capital Employed 1,962 1,032 91 - - 3,085
Capital Employed (balance sheet) 100,497 14,770 9,264 (2,246) - 122,285
Less inventory valuation effect - (1,319) (439) (1) - (1,759)
Capital Employed (Business segment information) 100,497 13,451 8,825 (2,247) - 120,526
ROACE as a percentage 11% 15% 13% - - 11%
222
TOTAL. Registration Document 2016
Note 3 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
B) 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, 2016
Adjusted Adjustments (a)
(M$)
Consolidated
statement
of income
Sales 149,974 (231) 149,743
Excise taxes (21,818) - (21,818)
Revenues from sales 128,156 (231) 127,925
Purchases, net of inventory variation (83,916) 539 (83,377)
Other operating expenses (23,832) (470) (24,302)
Exploration costs (914) (350) (1,264)
Depreciation, depletion and impairment of tangible assets and mineral interests (11,294) (2,229) (13,523)
Other income 964 335 1,299
Other expense (537) (490) (1,027)
Financial interest on debt (1,085) (23) (1,108)
Financial income and expense from cash & cash equivalents 4 - 4
Cost of net debt (1,081) (23) (1,104)
Other financial income 971 - 971
Other financial expense (636) - (636)
Equity in net income (loss) of affiliates 2,531 (317) 2,214
Income taxes (1,965) 995 (970)
Consolidated net income 8,447 (2,241) 6,206
Group share 8,287 (2,091) 6,196
Non-controlling interests 160 (150) 10
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
For the year ended December 31, 2015
Adjusted Adjustments (a)
(M$)
Consolidated
statement
of income
Sales
165,357
Excise taxes (21,936) - (21,936)
Revenues from sales 143,940 (519) 143,421
165,876
(519)
Purchases, net of inventory variation (95,558) (1,113) (96,671)
Other operating expenses (23,984) (361) (24,345)
Exploration costs (1,550) (441) (1,991)
Depreciation, depletion and impairment of tangible assets and mineral interests (10,843) (6,877) (17,720)
Other income 1,468 2,138 3,606
Other expense (405) (1,172) (1,577)
Financial interest on debt (956) (11) (967)
Financial income and expense from cash & cash equivalents 94 - 94
Cost of net debt (862) (11) (873)
Other financial income 882 - 882
Other financial expense (654) - (654)
Equity in net income (loss) of affiliates 2,414 (53) 2,361
Income taxes (4,150) 2,497 (1,653)
Consolidated net income 10,698 (5,912) 4,786
Group share 10,518 (5,431) 5,087
Non-controlling interests 180 (481) (301)
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
Registration Document 2016. TOTAL
223
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 3
For the year ended December 31, 2014
Adjusted Adjustments (a)
(M$)
Consolidated
statement
of income
236,122
Sales
Excise taxes (24,104) - (24,104)
Revenues from sales 211,987 31 212,018
236,091
31
Purchases, net of inventory variation (149,506) (3,469) (152,975)
Other operating expenses (28,123) (226) (28,349)
Exploration costs (1,964) - (1,964)
Depreciation, depletion and impairment of tangible assets and mineral interests (11,677) (7,979) (19,656)
Other income 1,272 1,305 2,577
Other expense (700) (254) (954)
Financial interest on debt (748) - (748)
Financial income and expense from cash & cash equivalents 108 - 108
Cost of net debt (640) - (640)
Other financial income 821 - 821
Other financial expense (676) - (676)
Equity in net income (loss) of affiliates 3,315 (653) 2,662
Income taxes (11,073) 2,459 (8,614)
Consolidated net income 13,036 (8,786) 4,250
Group share 12,837 (8,593) 4,244
Non-controlling interests 199 (193) 6
(a) Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
C) Additional information on adjustment items
3) “Other elements” amount to $(1,123) million in operating income
The main adjustment items for 2016 are the following:
1) The line “Gains (losses) on disposals of assets” includes the 2016
gains and losses on disposals, mainly, in the Upstream segment
with the sales of the Group’s interests in the FUKA and SIRGE gas
pipelines and of the St. Fergus Gas Terminal in the United Kingdom.
2) The line “Asset impairment charges” amounting to $(2,229) million
in operating income and $(2,097) million in net income Group
share includes non-current assets impairment charges recorded
in 2016. Impairment testing methodology and asset impairment
charges recorded during the year are detailed in the paragraph D
of Note 3.
and $(705) million in net income, Group share and mainly include,
in the Upstream segment charges related to onerous contracts in
the United States of America and charges related to the security
situation in Yemen ($(549) million in operating income, $(391) million
in net income, Group share), the impact on the deferred tax
position of the removal of the Petroleum Revenue Tax and the
decrease of the Supplementary Charge Tax in the United Kingdom
($200 million in net income, Group share) and, charges related
to the cessation of the Group activities in Kurdistan ($(350) million
in operating income, $(226) million in net income, Group share).
Adjustments to operating income
For the year ended December 31, 2016
(M$)
Upstream Refining & Marketing &
Services
Chemicals
Corporate
Total
Inventory valuation effect
652
Effect of changes in fair value (4) - - - (4)
Restructuring charges (19) - (18) - (37)
Asset impairment charges (2,089) - (140) - (2,229)
Other items (899) (68) (156) - (1,123)
695
(43)
-
-
Total (3,011) 627 (357) - (2,741)
224
TOTAL. Registration Document 2016
Note 3 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
Adjustments to net income, Group share
For the year ended December 31, 2016
(M$)
Upstream Refining & Marketing &
Services
Chemicals
Corporate
Total
479
Inventory valuation effect
Effect of changes in fair value (3) - - - (3)
Restructuring charges (4) - (28) - (32)
Asset impairment charges (1,867) (25) (202) (3) (2,097)
Gains (losses) on disposals of assets 292 - (25) - 267
Other items (478) (88) (139) - (705)
498
(19)
-
-
Total (2,060) 385 (413) (3) (2,091)
Adjustments to operating income
For the year ended December 31, 2015
(M$)
Upstream Refining & Marketing &
Services
Chemicals
Corporate
Total
(1,113)
Inventory valuation effect
Effect of changes in fair value (16) - - - (16)
Restructuring charges (43) - (5) - (48)
Asset impairment charges (6,783) (70) (24) - (6,877)
Other items (1,024) (176) (57) - (1,257)
(859)
(254)
-
-
Total (7,866) (1,105) (340) - (9,311)
Adjustments to net income, Group share
For the year ended December 31, 2015
(M$)
Upstream Refining & Marketing &
Services
Chemicals
Corporate
Total
Inventory valuation effect
(747)
Effect of changes in fair value (9) - - - (9)
Restructuring charges (10) (52) (10) - (72)
Asset impairment charges (5,249) (59) (127) (12) (5,447)
Gains (losses) on disposals of assets 162 1,288 360 - 1,810
Other items (516) (257) (193) - (966)
(590)
(157)
-
-
Total (5,622) 330 (127) (12) (5,431)
Adjustments to operating income
For the year ended December 31, 2014
(M$)
Upstream Refining & Marketing &
Services
Chemicals
Corporate
Total
Inventory valuation effect
(3,469)
Effect of changes in fair value 31 - - - 31
Restructuring charges - - - - -
Asset impairment charges (6,529) (1,450) - - (7,979)
Other items (164) (36) (26) - (226)
(2,944)
(525)
-
-
Total (6,662) (4,430) (551) - (11,643)
Adjustments to net income, Group share
For the year ended December 31, 2014
(M$)
Upstream Refining & Marketing &
Services
Chemicals
Corporate
Total
Inventory valuation effect - (2,114) (339) - (2,453)
Effect of changes in fair value 25 - - - 25
Restructuring charges - (13) (7) - (20)
Asset impairment charges (5,514) (1,409) (140) - (7,063)
Gains (losses) on disposals of assets 1,314 (105) - - 1,209
Other items (193) (58) (40) - (291)
Total (4,368) (3,699) (526) - (8,593)
Registration Document 2016. TOTAL
225
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 3
D) Asset impairment
Accounting principles
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 CGU 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
with a corresponding amount in “Other expenses”. Any further
losses are then allocated to property, plant and mineral interests
with a corresponding amount in “Depreciation, depletion and
impairment of tangible assets and mineral interests” and to other
intangible assets with a corresponding amount in “Other expenses”.
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.
For the financial year 2016, asset impairments were recorded for an
amount of $2,229 million in operating income and $2,097 million in net
income, Group share. These impairments were qualified as adjustments
items of the operating income and net income, Group share.
Impairments relate to certain cash-generating units (CGUs)
for which indicators of impairment have been identified, due to
changes in operating conditions or the economic environment
of the activities concerned.
The principles applied are as follows:
– the future cash flows were determined using the assumptions
included in the 2017 budget and in the long-term plan of the
Group approved by the Group Executive Committee and the
Board of Directors. These assumptions, including in particular
future prices of products, operational costs, estimation of oil and
gas reserves, future volumes produced and marketed, represent
the best estimate of the Group management of all economic and
technical conditions over the remaining life of the assets;
– the Group, notably relying on global energy demand from “World
Energy Outlook” issued by IEA in 2016 and on its own supply
assessments, sets the oil & gas prices scenarios based on
assumptions about the evolution of core indicators of the
Upstream segment (demand for oil & gas products in different
markets, investment forecasts, decline in production fields,
changes in oil & gas reserves and supply by area and by nature
of oil & gas products), of the Downstream segment (changes in
refining capacity and demand for petroleum products) and by
integrating the climate issue (New Policies Scenario and 450ppm
scenario of the IEA).
These price scenarios, first prepared within the Strategy and
Climate Department, are also reviewed by the Group segments
which bring their own expertise. They also integrate studies issued
by international agencies, banks and independent consultants. They
are then eventually approved by the Executive Committee and the
Board of Directors.
quotas by OPEC and a steady growth in demand for hydrocarbons,
particularly in emerging countries.
In this context:
- for crude oil, the price level used for 2017 to determine the
recoverable value of CGU in 2017 amounts to 50 dollars per
barrel of Brent. This price rises progressively from 2018 to
reach 80 dollars in 2020 and is gradually increasing beyond
that date. These assumptions are broadly in line with the IEA’s
New Policies Scenario: “In the New Policies Scenario, balancing
supply and demand requires an oil price approaching $80 / barrel
in 2020 and further gradual increase thereafter”,
- for gas, the Group estimates that due to new market balances
that emerged in 2016, in particular a strong increase in supply,
prices will appreciate more slowly than those of crude oil
prices. Price level used in determining the recoverable value
of concerned CGU for 2017 amounts to $5 per million BTU for
the NBP price (Europe). It reaches $7 per million BTU in 2020,
and will inflate beyond,
– the future operational costs were determined by taking into
account the existing technologies, the fluctuation of prices for
petroleum services in line with market developments and the
internal cost reduction programs effectively implemented;
– the future cash flows are estimated over a period consistent with
the life of the assets of the CGU. They are prepared post-tax and
take into account specific risks related to the CGU’s assets. They
are discounted using a 7% post-tax discount rate, this rate being
the weighted-average cost of capital estimated from historical
market data. This rate was 7% in 2015 and 2014. The value in
use calculated by discounting the above post-tax cash flows
using a 7% post-tax discount rate is not materially different from
the 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
range from 7% to 17% in 2016.
At the end of 2016, the main scenario adopted by the Group is in
line with the IEA’s New Policies scenario: the scenario forecasts a
reduction in supply under the combined effect of the decline in oil
industry investments since 2015 and the setting-up of production
The CGUs for the Upstream segment are defined as oil and gas
fields or groups of oil and gas fields with industrial assets enabling
the production, treatment and evacuation of the oil and gas. For the
year 2016, impairments of assets were recognized over CGUs of
226
TOTAL. Registration Document 2016
Notes 3, 4 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
the Upstream segment for an impact of $2,089 million in operating
income and $1,867 million in net income, Group share. These
impairments were mainly recognized on gas assets regarding the
downward revision of gas price assumptions compared to the
previous year. In particular, impairments concerned:
– gas assets in the United Kingdom for $896 million in operating
income and $650 million in net income, Group share;
– gas assets related to the GLNG project in Australia for an amount
of $670 million in operating income and $556 million in net income,
Group share;
– gas assets related to the ALNG project in Angola for an amount
of $333 million in net income, Group share;
– assets in Kurdistan following the cessation of the Group’s activities
in this region, for an amount of $200 million in operating income
and $129 million in net income, Group share;
– and other assets in Nigeria, Congo and Russia.
As for the sensitivity analysis:
– a decrease by one point in the discount rate would have a positive
impact of approximately $0.5 billion in operating income and in
net income, Group share;
– an increase by one point in the discount rate would have an
additional negative impact of approximately $1.1 billion in
operating income and approximately $0.8 billion in net income,
Group share;
– a variation of (10)% of the oil and gas prices over the long term
plan would have an additional negative impact of approximately
$2.9 billion in operating income and $2.3 billion in net income,
Group share.
The most sensitive assets would be:
– the assets already impaired (impact of approximately $1.2 billion
in operating income and in net income, Group share), including
GLNG in Australia and ALNG in Angola;
– other assets (impact of approximately $1.7 billion in operating
income and $1.1 in net income, Group share), including in Congo
and Kazakhstan.
The CGUs for the Refining & Chemicals segment are defined as
legal entities with operational activities for refining and petrochemicals
activities. Future cash flows are based on the gross contribution
margin (calculated on the basis of net sales after purchases of
crude oil and refined products, the effect of inventory valuation and
variable costs). The other activities of the segment are global divisions,
each division gathering a set of businesses or homogeneous products
for strategic, commercial and industrial plans. Future cash flows are
determined from the specific margins of these activities, unrelated
to the price of oil. In year 2016, the Group recorded impairments on
CGUs in the Refining and Chemicals segment for $25 million in net
income, Group share. These impairments mainly concern intangible
assets. A variation of (5)% or +5% of the gross margin on variable
costs under identical operating conditions or (1)% or +1% of the
discount rate would have no impact on the operating profit or the
net profit, Group share.
The CGUs of the Marketing & Services segment are subsidiaries
or groups of subsidiaries organized by geographical area.
For year 2016, the Group recorded impairments on the CGUs
of the Marketing & Services segment for an amount of $140 million
in operating income and $202 million in net income, Group share.
These impairments primarily relate to assets of SunPower due to
the depressed economic environment of solar activity.
In 2015, the Group recognized impairments of assets in the Upstream,
Refining & Chemicals and Marketing & Services segments for an impact
of $6,877 million in operating income and of $5,447 income and net
income, Group share. These impairments were qualified as adjustments
items of the operating income and net income, Group share.
In 2014, the Group recognized impairments of assets in the Upstream,
Refining & Chemicals and Marketing & Services segments for an impact
of $7,979 million in operating income and of $7,063 million in net
income, Group share. These impairments were qualified as adjustments
items of the operating income and net income, Group share.
No reversal of impairment was accounted for in respect of the years
2014, 2015 and 2016.
4) Segment Information by geographical area
(M$)
France
Rest
of Europe
North
America
Africa
Rest of
the world
Total
For the year ended December 31, 2016
Non-Group sales(a) 33,472 71,551 15,383 15,294 14,043 149,743
Property, plant and equipment, intangible assets, net 5,361 20,647 19,154 45,032 37,139 127,333
Capital expenditures 1,835 3,842 2,825 6,859 5,169 20,530
For the year ended December 31, 2015
Non-Group sales(a) 36,536 79,463 14,857 17,612 16,889 165,357
Property, plant and equipment, intangible assets, net 4,123 22,354 17,169 43,536 36,885 124,067
Capital expenditures 980 4,783 3,493 9,154 9,623 28,033
For the year ended December 31, 2014
Non-Group sales(a) 51,471 114,747 23,766 23,281 22,857 236,122
Property, plant and equipment, intangible assets, net 4,350 25,137 16,064 41,405 34,602 121,558
Capital expenditures 1,266 5,880 3,658 9,798 9,907 30,509
(a) No customer amounts to 10% or more of Non-Group sales.
Registration Document 2016. TOTAL
227
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 5
5) Main items related to operating activities
Items related to the statement of income
5.1) Net sales
Accounting policies
Sales 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 and natural gas 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 from 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.
Sales 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.
Solar Farm Development Projects
SunPower develops and sells solar farm projects. This activity
generally contains a property component (land ownership or an
interest in land rights). The revenue associated with the development
of these projects is recognized when the project-entities and land
rights are irrevocably sold.
Revenues under contracts for construction of solar systems are
recognized based on the progress of construction works, measured
according to the percentage of costs incurred relative to total
forecast costs.
Excise taxes
Sales 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.
Excise taxes are rights or taxes which amount is calculated based
on the quantity of oil and gas products put on the market. Excise
taxes are determined by the states. They are paid directly to the
customs and tax authorities and then invoiced to final customers
by being included in the sales price.
The analysis of the criteria set by IAS 18 led the Group to determine
that it was acting as principal in these transactions. On this basis,
the sales presented include the amount of excise taxes invoiced
to the customers.
5.2) Operating expenses and research and development
Accounting policies
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.
Geological and geophysical costs, including seismic surveys for
exploration purposes are expensed as incurred in exploration costs.
Costs of dry wells and wells that have not found proved reserves
are charged to expense in exploration costs.
228
TOTAL. Registration Document 2016
Note 5 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
5.2.1) Operating expenses
For the year ended December 31,
(M$)
Purchases, net of inventory variation (a) (b)
Exploration costs
Other operating expenses (c)
of which non-current operating liabilities (allowances) reversals
of which current operating liabilities (allowances) reversals
2016
2015
2014
(83,377)
(1,264)
(24,302)
369
(58)
(96,671)
(1,991)
(24,345)
858
(86)
(152,975)
(1,964)
(28,349)
717
(147)
Operating expenses (108,943) (123,007) (183,288)
(a) Includes taxes paid on oil and gas production in the Upstream segment, amongst others royalties.
(b) The Group values under / over lifting at market value.
(c) Principally composed of production and administrative costs (see in particular the payroll costs as detailed in Note 10 to the Consolidated Financial Statements “Payroll, staff and employee
benefits obligations”).
5.2.2) Research and development costs
Accounting policies
Research costs are charged to expense as incurred.
Development expenses are capitalized when the criteria of IAS38 are met.
Research and development costs incurred by the Group in 2016
and booked in operating expenses amount to $1,050 million
($980 million in 2015 and $1,245 million in 2014), corresponding
to 0.70% of the sales.
The staff dedicated in 2016 to these research and development
activities are estimated at 4,939 people (4,248 in 2015 and 4,596
in 2014).
5.3) Amortization, depreciation and impairment of tangible assets and mineral interests
The amortization, depreciation and impairment of tangible assets and mineral interests are detailed as follows:
For the year ended December 31,
(M$)
2016
2015
2014
Depreciation and impairment of tangible assets (12,615) (15,727) (15,988)
Amortization and impairment of mineral assets (908) (1,993) (3,668)
Total (13,523) (17,720) (19,656)
Items related to balance sheet
5.4) Working capital
5.4.1) Inventories
Accounting policies
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. In addition stocks held
for trading are measured at fair value less costs of sale.
Refining & Chemicals
Petroleum product inventories are mainly comprised of crude oil
and refined products. Refined products principally consist of
gasoline, distillate and fuel produced by the Group’s refineries.
The turnover of petroleum products does not exceed more than
two months on average. Crude oil costs include raw material and
receiving costs. Refining costs principally include crude oil costs,
production costs (energy, labor, depreciation of producing assets)
and an allocation of production overheads (taxes, maintenance,
insurance, etc.). Costs of chemical product inventories consist of raw
material costs, direct labor costs and an allocation of production
overheads. Start-up costs, general administrative costs and
financing costs are excluded from the cost price of refined and
chemicals products.
Marketing & Services
The costs of refined products include mainly raw materials costs,
production costs (energy, labor, depreciation of producing assets)
and an allocation of production overheads (taxes, maintenance,
insurance, etc.). General administrative costs and financing costs
are excluded from the cost price of refined products.
Registration Document 2016. TOTAL
229
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 5
Products purchased from entities external to the Group are
valued at their purchase cost plus primary costs of transport.
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 to surrender emission rights 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 surrendered;
– if emission rights to be surrendered at the end of the compliance
period are higher than emission rights recorded 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.
Energy savings certificates
In the absence of current IFRS standards or interpretations on
accounting for energy savings certificates (ESC), the following
principles are applied:
– if the obligations linked to the sales of energy are greater than the
number of ESC’s held then a liability is recorded. These liabilities
are valued based on the price of the last transactions;
– in the event that the number of ESC’s held exceeds the obligation
at the balance sheet date this is accounted for as inventory;
– ESC inventories are valued at weighted average cost (acquisition
cost for those ESC’s acquired or cost incurred for those ESC’s
generated internally).
If the carrying value of the inventory of certificates at the balance
sheet date is higher than the market value, an impairment loss
is recorded.
As of December 31, 2016
(M$)
Gross value
Valuation allowance
Net value
Crude oil and natural gas
2,208
Refined products 4,577 (30) 4,547
Chemicals products 877 (58) 819
Trading inventories 4,613 - 4,613
Other inventories 3,936 (876) 3,060
2,215
(7)
Total 16,218 (971) 15,247
As of December 31, 2015
(M$)
Gross value
Valuation allowance
Net value
Crude oil and natural gas
1,729
Refined products 4,177 (130) 4,047
Chemicals products 989 (72) 917
Trading inventories 3,168 - 3,168
Other inventories 4,062 (807) 3,255
1,788
(59)
Total 14,184 (1,068) 13,116
As of December 31, 2014
(M$)
Gross value
Valuation allowance
Net value
2,509
Crude oil and natural gas
Refined products 5,922 (422) 5,500
Chemicals products 1,119 (85) 1,034
Trading inventories 2,950 - 2,950
Other inventories 3,903 (700) 3,203
2,697
(188)
Total 16,591 (1,395) 15,196
230
TOTAL. Registration Document 2016
Note 5 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
Changes in the valuation allowance on inventories are as follows:
For the year
ended December 31,
(M$)
2016
Valuation
allowance
as of January 1,
Increase
(net)
Currency
translation adjustment
and other variations
Valuation
allowance
as of December 31,
(1,068)
41
56
2015 (1,395) 256 71
2014 (1,022) (495) 122
(971)
(1,068)
(1,395)
5.4.2) Accounts receivable and other current assets
As of December 31, 2016
(M$)
Accounts receivable
Gross value
Valuation allowance
12,809
(596)
Net value
12,213
Recoverable taxes 3,180 - 3,180
Other operating receivables 10,618 (400) 10,218
Prepaid expenses 1,399 - 1,399
Other current assets 38 - 38
Other current assets 15,235 (400) 14,835
As of December 31, 2015
(M$)
Accounts receivable
Gross value
Valuation allowance
11,173
(544)
Net value
10,629
Recoverable taxes 3,328 - 3,328
Other operating receivables 11,335 (426) 10,909
Prepaid expenses 1,554 - 1,554
Other current assets 52 - 52
Other current assets 16,269 (426) 15,843
As of December 31, 2014
(M$)
Accounts receivable
Gross value
Valuation allowance
16,306
(602)
Net value
15,704
Recoverable taxes 3,242 - 3,242
Other operating receivables 11,159 (367) 10,792
Prepaid expenses 1,609 - 1,609
Other current assets 59 - 59
Other current assets 16,069 (367) 15,702
Changes in the valuation allowance on “Accounts receivable” and “Other current assets” are as follows:
For the year ended December 31,
(M$)
Valuation
allowance
as of January 1,
Increase
(net)
Currency
translation adjustments
and other variations
Valuation
allowance
as of December 31,
Accounts receivable
2016 (544) (17) (35) (596)
2015 (602) 5 53 (544)
2014 (743) 46 95 (602)
Other current assets
2016 (426) 33 (7) (400)
2015 (367) (79) 20 (426)
2014 (154) (221) 8 (367)
Registration Document 2016. TOTAL
231
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 5
As of December 31, 2016, the net portion of the overdue receivables
included in “Accounts receivable” and “Other current assets”
was $3,525 million, of which $1,273 million was due in less than
90 days, $1,013 million was due between 90 days and 6 months,
$538 million was due between 6 and 12 months and $701 million
was due after 12 months.
As of December 31, 2015, the net portion of the overdue receivables
included in “Accounts receivable” and “Other current assets”
was $3,159 million, of which $1,313 million was due in less than
90 days, $460 million was due between 90 days and 6 months,
$570 million was due between 6 and 12 months and $816 million
was due after 12 months.
As of December 31, 2014, the net portion of the overdue receivables
included in “Accounts receivable” and “Other current assets”
was $3,049 million, of which $1,382 million was due in less than
90 days, $593 million was due between 90 days and 6 months,
$226 million was due between 6 and 12 months and $848 million
was due after 12 months.
5.4.3) Other creditors and accrued liabilities
As of December 31,
(M$) 2016 2015 2014
Accruals and deferred income 424 342 469
Payable to States (including taxes and duties) 5,455 5,363 6,894
Payroll 1,225 1,265 1,343
Other operating liabilities 9,616 9,914 7,935
Total 16,720 16,884 16,641
As of December 31, 2016, the heading “Other operating liabilities”
includes mainly the second quarterly interim dividend for the fiscal
year 2016 for $1,592 million, which was paid in January 2017
and the third quarterly interim dividend for the fiscal year 2016
for $1,593 million, which will be paid in April 2017.
As of December 31, 2015, the heading “Other operating liabilities”
included mainly the second quarterly interim dividend for the fiscal
year 2015 for $1,560 million, which was paid in January 2016
and the third quarterly interim dividend for the fiscal year 2015
for $1,584 million, which was paid in April 2016.
As of December 31, 2014, the heading “Other operating liabilities”
included mainly the third quarterly interim dividend for the fiscal
year 2014 for $1,718 million. This interim dividend was paid in
March 2015.
Items related to the cash flow statement
5.5) Cash flow from operating activities
Accounting policies
The Consolidated Statement of Cash Flows prepared in currencies
other than dollar has been translated into dollars using the
exchange rate on the transaction date or the average exchange
rate for the period. Currency translation differences arising from the
translation of monetary assets and liabilities denominated in foreign
currency into dollars using the closing exchange rates are shown in
the Consolidated Statement of Cash Flows under “Effect of
exchange rates”. Therefore, the Consolidated Statement of Cash
Flows will not agree with the figures derived from the consolidated
balance sheet.
The following table gives additional information on cash paid or received in the cash flow from operating activities:
Detail of interest, taxes and dividends
For the year ended December 31,
(M$) 2016 2015 20 14
Interests paid (1,028) (862) (789)
Interests received 90 113 119
Income tax paid(a) (2,892) (4,937) (11,374)
Dividends received 1,702 2,309 2,992
(a) These amounts include taxes paid in kind under production-sharing contracts in Exploration & Production.
232
TOTAL. Registration Document 2016
Notes 5, 6 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
Detail of changes in working capital:
For the year ended December 31,
(M$) 2016 2015 2014
Inventories (2,475) 888 5,289
Accounts receivable (1,916) 4,153 5,916
Other current assets 185 (726) (1,605)
Accounts payable 2,546 (2,235) (4,531)
Other creditors and accrued liabilities 541 (397) (589)
Net amount (1,119) 1,683 4,480
Detail of provisions and deferred taxes
As of December 31,
(M$) 2016 2015 2014
Accruals
160
Deferred taxes (1,941) (2,899) (2,140)
382
336
Total (1,559) (2,563) (1,980)
6) Other items from operating activities
6.1) Other income and other expense
For the year ended December 31,
(M$) 2016 2015 2014
Gains on disposal of assets
2,085
Foreign exchange gains 548 663 216
Other 272 285 276
2,658
479
Other income 1,299 3,606 2,577
Losses on disposal of assets (216) (199) (106)
Foreign exchange losses - (102) -
Amortization of other intangible assets (excl. mineral interests) (344) (332) (254)
Other (467) (944) (594)
Other expense (1,027) (1,577) (954)
Other income
Other expense
In 2016, gains on disposal of assets are mainly related to sales
of assets in United-Kingdom in the Upstream segment.
In 2015, gains on disposal of assets mainly related to sales
of assets in Nigeria in the Upstream segment, to sales of interests
in Geosel and the Schwedt refinery in the Refining & Chemicals
segment, to the sale of the Bostik adhesives activity, also in the
Refining & Chemicals segment, and to the sale of 100% of Totalgaz
in the Marketing & Services segment.
In 2014, gains on disposal of assets mainly related to sales
of assets in the Upstream segment in Angola and the United-States
and to sales of interests, also in the Upstream segment in: the
company GTT (GazTransport et Technigaz), the Shah Deniz field
and the South Caucasus pipeline.
In 2016, the loss on disposals is mainly related to the sale of 20%
of interests in Kharyaga in Russia. The heading “Other” mainly
consists of the impairment of non-consolidated shares and loans
granted to non-consolidated subsidiaries and equity affiliates for
an amount of $142 million and $37 million of restructuring charges
in the Refining & Chemicals and Marketing & Services segments.
In 2015, the loss on disposals mainly related to the sale of 20% of
interests in fields in the United Kingdom. The heading “Other” mainly
consists of the impairment of non-consolidated shares and loans
granted to non-consolidated subsidiaries and equity affiliates for an
amount of $409 million, $180 million of restructuring charges in the
Upstream, Refining & Chemicals and Marketing & Services segments
as well as $162 million for expenses relating to a litigation in Qatar.
In 2014, the loss on disposals is mainly related to the sale of CCP
Composites to Polynt Group. The heading “Other” mainly consists
of the impairment of shares and loans of non-consolidated
subsidiaries for an amount of $88 million, $43 million of restructuring
charges as well as $34 million for expenses relating to sales.
Registration Document 2016. TOTAL
233
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 6
6.2) Other financial income and expense
As of December 31,
(M$) 2016 2015 2014
282
Dividend income on non-consolidated subsidiaries
Capitalized financial expenses 477 364 348
Other 324 251 191
170
267
Other financial income 971 882 821
Accretion of asset retirement obligations (523) (513) (543)
Other (113) (141) (133)
Other financial expense (636) (654) (676)
6.3) Other non-current assets
As of December 31, 2016
(M$)
Gross value
Valuation allowance
Net value
Loans and advances(a)
3,048
Other 1,095 - 1,095
3,334
(286)
Total 4,429 (286) 4,143
As of December 31, 2015
(M$)
Gross value
Valuation allowance
Net value
3,407
Loans and advances(a)
Other 948 - 948
3,687
(280)
Total 4,635 (280) 4,355
As of December 31, 2014
(M$)
Gross value
Valuation allowance
Net value
Loans and advances(a)
3,326
Other 866 - 866
3,998
(672)
Total 4,864 (672) 4,192
(a) Excluding loans to equity affiliates.
Changes in the valuation allowance on loans and advances are detailed as follows:
For the year
ended December 31,
(M$)
2016
Valuation
allowance
as of January 1,
Increases Decreases
Currency
translation adjustment
and other variations
Valuation
allowance
as of December 31,
(280)
(15)
7
2
(286)
2015 (672) (62) 393 61 (280)
2014 (498) (63) 102 (213) (672)
234
TOTAL. Registration Document 2016
Note 7 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
7) Intangible and tangible assets
7.1) Intangible assets
Accounting policies
Exploration costs
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.
Mineral 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.
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 exploration costs.
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.
Proved mineral interests are depreciated using the unit-of-production
method based on proved reserves. The corresponding expense is
recorded as depreciation of tangible assets and mineral interests.
Exploratory wells are tested for impairment on a well-by-well basis
and accounted for as follows:
– 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;
– 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, if
appropriate, its completion as a producing well, assuming that
the required capital expenditures are made,
- 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
Goodwill and other intangible assets excluding mineral interests
Other intangible assets include goodwill, patents, trademarks, and
lease rights.
Intangible assets are carried at cost, after deducting any accumulated
amortization and accumulated impairment losses.
Guidance for calculating goodwill is presented in Note 1.1 paragraph B
to the Consolidated Financial Statements. Goodwill is not amortized
but is tested for impairment at least annually and as soon as there
is any indication of impairment.
Intangible assets (excluding mineral interests) that have a finite useful
life are amortized on a straight-line basis over three to twenty years
depending on the useful life of the assets. The corresponding
expense is recorded under other expense.
As of December 31, 2016
(M$)
Cost
Amortization
and impairment
Net
1,157
Goodwill
Proved mineral interests 13,347 (6,985) 6,362
Unproved mineral interests 11,582 (5,130) 6,452
Other intangible assets 4,182 (2,791) 1,391
(1,002)
2,159
Total intangible assets 31,270 (15,908) 15,362
As of December 31, 2015
(M$)
Cost
Amortization
and impairment
Net
626
Goodwill
Proved mineral interests 12,800 (6,436) 6,364
Unproved mineral interests 11,751 (5,082) 6,669
Other intangible assets 4,059 (3,169) 890
1,597
(971)
Total intangible assets 30,207 (15,658) 14,549
Registration Document 2016. TOTAL
235
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 7
As of December 31, 2014
(M$)
Cost
Amortization
and impairment
Net
Goodwill
619
Proved mineral interests 12,215 (5,514) 6,701
Unproved mineral interests 10,673 (4,498) 6,175
Other intangible assets 4,387 (3,200) 1,187
(1,020)
1,639
Total intangible assets 28,914 (14,232) 14,682
Changes in net intangible assets are analyzed in the following table:
(M$) Net amount Acquisitions Disposals Amortization Currency Other Net amount
as of and impairment translation as of
January 1, adjustment December 31,
2016
14,549
1,039
(117)
(1,252)
(187)
1,330
15,362
2015 14,682 2,750 (343) (2,324) (200) (16) 14,549
2014 18,395 1,000 (178) (3,920) (276) (339) 14,682
In 2016, the heading “Amortization and impairment” includes the
impact of exceptional asset impairments for an amount of $543 million
(see Note 3 paragraph D to the Consolidated Financial Statements).
In 2016, the heading “Other” principally corresponds to the effect
of the entries in the consolidation scope (including SAFT Group
and Lampiris) for $1,394 million and to the reclassification of assets
classified in accordance with IFRS 5 “Non-current assets held for
sale and discontinued operations”.
In 2015, the heading “Amortization and impairment” included the
accounting impact of exceptional asset impairments for an amount
of $1,482 million (see Note 3 paragraph D to the Consolidated
Financial Statements).
In 2014, the heading “Amortization and impairment” included the
accounting impact of exceptional asset impairments for an amount
of $3,177 million (see Note 3 paragraph D to the Consolidated
Financial Statements).
In 2014, the heading “Other” mainly included mineral interests
in Utica reclassified into acquisitions for $(524) million, the recognition
of mineral interests in Papua New Guinea for $429 million, the
reclassification of assets in accordance with IFRS 5 “Non-current
assets held for sale and discontinued operations” for $(561) million
and the reversal of the reclassification under IFRS 5 as at
December 31, 2013 for $96 million corresponding to disposals.
A summary of changes in the carrying amount of goodwill by business segment for the year ended December 31, 2016 is as follows:
(M$)
Net goodwill
Increases
Impairments
Other
as of
January 1, 2016
Net goodwill
as of
December 31, 2016
Upstream
99
Refining & Chemicals 470 42 - (50) 462
Marketing & Services 129 620 (148) (31) 570
Corporate 27 - - (1) 26
102
(3)
-
-
Total 626 764 (148) (85) 1,157
In 2016, the increases are mainly related to the acquisitions of SAFT Group and Lampiris.
236
TOTAL. Registration Document 2016
Note 7 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
7.2) Property, plant and equipment
Accounting policies
Exploration & Production 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 equal to the ratio
of oil and gas production for the period to proved developed
reserves (unit-of-production method). In the event that, due to the
price effect on reserves evaluation, the unit-of-production method
does not reflect properly the useful life of the asset, an alternative
depreciation method is applied based on the reserves evaluated
with the price of the previous year. With respect to phased development
projects or projects subject to progressive well production start-up,
the fixed assets’ depreciable amount, excluding production or
service wells, is adjusted to exclude the portion of development
costs attributable to the undeveloped reserves of these projects.
With respect to production sharing contracts, the unit-of-production
method 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 / gas) as well as the sharing of hydrocarbon
rights (profit oil / gas). Hydrocarbon transportation and processing
assets are depreciated using the unit-of-production method based
on throughput or by using the straight-line method whichever best
reflects the duration of use of the economic life of the asset.
Other property, plant and equipment excluding
Exploration & Production
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:
– if the project benefits from a specific funding, the capitalization
of borrowing costs is based on the borrowing rate;
– 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 equipment
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
As of December 31, 2016
(M$)
Cost
Depreciation
and impairment
Net
Upstream properties
Proved properties 163,860 (100,959) 62,901
Unproved properties 1,996 - 1,996
Work in progress 33,860 (2,075) 31,785
Subtotal 199,716 (103,034) 96,682
Other property, plant and equipment
Land 1,578 (567) 1,011
Machinery, plant and equipment (including transportation equipment) 28,620 (22,940) 5,680
Buildings 7,977 (4,979) 2,998
Work in progress 2,780 (10) 2,770
Other 8,296 (5,466) 2,830
Subtotal 49,251 (33,962) 15,289
Total property, plant and equipment 248,967 (136,996) 111,971
Registration Document 2016. TOTAL
237
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 7
As of December 31, 2015
(M$)
Cost
Depreciation
and impairment
Net
Upstream properties
Proved properties 153,530 (94,843) 58,687
Unproved properties 2,423 - 2,423
Work in progress 36,246 (2,284) 33,962
Subtotal 192,199 (97,127) 95,072
Other property, plant and equipment
Land 1,551 (581) 970
Machinery, plant and equipment (including transportation equipment) 28,723 (22,975) 5,748
Buildings 7,655 (5,018) 2,637
Work in progress 2,705 (128) 2,577
Other 8,182 (5,668) 2,514
Subtotal 48,816 (34,370) 14,446
Total property, plant and equipment 241,015 (131,497) 109,518
As of December 31, 2014
(M$)
Cost
Depreciation
and impairment
Net
Upstream properties
Proved properties 139,294 (86,326) 52,968
Unproved properties 2,153 - 2,153
Work in progress 38,698 (1,574) 37,124
Subtotal 180,145 (87,900) 92,245
Other property, plant and equipment
Land 1,683 (613) 1,070
Machinery, plant and equipment (including transportation equipment) 30,966 (24,874) 6,092
Buildings 8,141 (5,291) 2,850
Work in progress 2,367 (324) 2,043
Other 8,673 (6,097) 2,576
Subtotal 51,830 (37,199) 14,631
Total property, plant and equipment 231,975 (125,099) 106,876
Changes in net property, plant and equipment are analyzed in the following table:
(M$)
2016
Net amount
as of
January 1,
Acquisitions
Disposals
Depreciation
and impairment
Currency
translation
adjustment
Other
Net amount
as of
December 31,
109,518
17,067
(1,869)
(13,171)
(1,057)
1,483
111,971
2015 106,876 22,382 (1,842) (17,010) (3,449) 2,561 109,518
2014 104,480 25,320 (2,211) (16,939) (4,438) 664 106,876
In 2016, the heading “Disposals” mainly includes the impact of
sales in the Upstream segment (sale of interests in the FUKA and
SIRGE gas pipelines, and the St. Fergus gas terminal in the United
Kingdom, and sale of a 20% stake in Kharyaga, Russia.).
In 2016, the heading “Depreciation and impairment” includes the
impact of impairments of assets recognized for an amount
of $1,780 million (see Note 3 paragraph D to the Consolidated
Financial Statements).
In 2016, the heading “Other” principally corresponds to the effect of
the entries in the consolidation scope (including SAFT Group and
Lampiris) for $751 million, to the reclassification of assets in accordance
with IFRS 5 “Non-current assets held for sale and discontinued
operations” for $(365) million and the reversal of the reclassification
under IFRS 5 as at December 31, 2015 for $627 million corresponding
to disposals.
In 2015, the heading “Disposals” mainly included the impact of sales
in the Upstream segment (sale of 4 blocks in Nigeria, West of
Shetland fields in United Kingdom and a part of Fort Hills in Canada).
In 2015, the heading “Depreciation and impairment” included
the impact of impairments of assets recognized for an amount
of $5,544 million (see Note 3 paragraph D to the Consolidated
Financial Statements).
In 2015, the heading “Other” principally corresponded to the
increase of the asset for site restitution for an amount of $956 million
and the reclassification of assets classified in accordance with IFRS 5
“Non-current assets held for sale and discontinued operations”
for $1,128 million, primarily related to the Usan field in Nigeria.
In 2014, the heading “Disposals” mainly included the impact of
sales in the Upstream segment (sale of Block 15 / 06 in Angola and
the Shah Deniz field in Azerbaijan).
238
TOTAL. Registration Document 2016
Notes 7, 8 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
In 2014, the heading “Depreciation and impairment” included the
impact of impairments of assets recognized for an amount
of $4,802 million (see Note 3 paragraph D to the Consolidated
Financial Statements).
In 2014, the heading “Other” principally corresponded to the increase
of the asset for site restitution for an amount of $1,366 million.
It also includes $(466) million related to the reclassification of assets
classified in accordance with IFRS 5 “Non-current assets held for
sale and discontinued operations” primarily related to the sales of
Total Coal South Africa and Bostik.
Property, plant and equipment presented above include the following amounts for facilities and equipment under finance leases:
As of December 31, 2016
(M$)
Cost
Depreciation
and impairment
Net
Machinery, plant and equipment
35
Buildings 109 (38) 71
Other 179 (41) 138
(391)
426
Total 714 (470) 244
As of December 31, 2015
(M$)
Cost
Depreciation
and impairment
Net
Machinery, plant and equipment
42
Buildings 95 (38) 57
Other 175 (31) 144
(384)
426
Total 696 (453) 243
As of December 31, 2014
(M$)
Cost
Depreciation
and impairment
Net
Machinery, plant and equipment
77
Buildings 72 (45) 27
Other 245 (29) 216
(443)
520
Total 837 (517) 320
8) Equity affiliates, other investments and related parties
8.1) Equity affiliates: investments and loans
Accounting principles
Under the equity method, the investment in the associate or joint
venture is initially recognized at acquisition cost and subsequently
adjusted to recognize the Group’s share of the net income and
other comprehensive income of the associate or joint venture.
In equity affiliates, goodwill is included in investment book value.
In cases where the group holds less than 20% of the voting rights
in another entity, the determination of whether the Group exercises
significant influence is also based on other facts and circumstances:
representation on the Board of Directors or an equivalent governing
body of the entity, participation in policy-making processes,
including participation in decisions relating to dividends or other
distributions, significant transactions between the investor and the
entity, exchange of management personnel, or provision of
essential technical information.
Registration Document 2016. TOTAL
239
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 8
The contribution of equity affiliates in the consolidated balance sheet, consolidated statement of income and consolidated statement of
comprehensive income is presented below:
Equity value
As of December 31,
(M$)
2016
2015
2014
Total Associates
11,632
Total Joint ventures 4,039 3,751 3,016
11,255
11,819
Total 15,858 15,006 14,648
Loans 4,718 4,378 4,626
Total 20,576 19,384 19,274
Equity share in profit/(loss)
As of December 31,
(M$)
2016
2015
2014
2,786
Total Associates
Total Joint ventures 684 357 (124)
1,530
2,004
Total 2,214 2,361 2,662
Other comprehensive income
As of December 31,
(M$)
2016
2015
2014
(1,532)
Total Associates
Total Joint ventures 88 (19) (6)
847
139
Total 935 120 (1,538)
A) Information related to associates
Information (100% gross) related to significant associates is as follows:
Upstream
(M$)
Novatek (a)
Liquefaction entities
PetroCedeño
2016 2015 2014 2016 2015 2014 2016 2015 2014
Non current assets 13,981 9,768 9,551 31,044 33,294 33,909 5,515 6,916 6,458
Current assets 2,409 2,237 1,648 5,790 7,427 9,007 4,166 3,437 10,033
Total Assets 16,390 12,005 11,199 36,834 40,721 42,916 9,681 10,353 16,491
Shareholder’s equity 11,015 6,745 7,135 22,886 25,941 25,090 5,515 5,538 5,597
Non current liabilities 3,574 3,014 3,352 10,839 9,373 10,876 10 10 274
Current liabilities 1,801 2,246 712 3,109 5,407 6,950 4,156 4,805 10,620
Total Liabilities 16,390 12,005 11,199 36,834 40,721 42,916 9,681 10,353 16,491
Revenue from sales 7,779 7,130 9,222 15,557 22,731 39,502 1,398 1,840 3,644
Net income 3,137 1,755 2,759 1,472 7,720 14,269 277 399 343
Other comprehensive income 1,651 (1,682) (5,431) - - - - - -
% owned 18.90% 18.90% 18.24% 30.32% 30.32% 30.32%
Revaluation identifiable
assets on equity affiliates 1,811 1,580 1,944 - - - - - -
Equity value 3,893 2,855 3,245 3,755 4,183 4,130 1,672 1,679 1,697
Equity share in profit / (loss) 494 229 193 147 978 2,125 84 121 104
Equity other comprehensive income 808 (135) (1,844) 23 156 200 - - -
Dividends paid to the Group 111 102 126 479 1,072 1,687 91 139 99
(a) Information includes estimates at the date of TOTAL’s financial statements.
240
TOTAL. Registration Document 2016
Note 8 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
Novatek, listed in Moscow and London, is the 2nd largest producer
of natural gas in Russia. The Group share of Novatek’s market value
amounted to $7,450 million as at December 31, 2016. Novatek
is consolidated by the equity method. TOTAL considers, in fact,
that it exercises significant influence particularly via its representation
on the Board of Directors of Novatek and its interest in the major
project of Yamal LNG.
The Group is not aware of significant restrictions limiting the ability
of OAO Novatek to transfer funds to its shareholder, be it under the
form of dividends, repayment of advances or loans made.
The Group’s interests in associates operating liquefaction plants
are combined. The amounts include investments in: Nigeria LNG
(15.00%), Angola LNG (13.60%), Yemen LNG (39.62%), Qatargas
(10.00%), Qatar Liquefied Gas Company Limited II – Train B
(16.70%), Oman LNG (5.54%), and Abu Dhabi Gas Lc (5.00%).
PetroCedeño produces and upgrades extra-heavy crude oil in
Venezuela.
Refining & Chemicals
(M$)
Saudi Aramco Total
Refining & Petrochemicals
Qatar
2016
2015
2014
2016
2015
20 14
3,020
Non current assets
Current assets 1,531 960 1,250 1,404 968 1,385
12,654
12,536
12,056
4,152
2,530
Total Assets 13,587 13,496 13,904 5,556 3,498 4,405
Shareholder’s equity 2,302 2,011 1,672 3,393 2,803 2,930
Non current liabilities 9,466 9,873 9,584 1,349 356 409
Current liabilities 1,819 1,612 2,648 814 339 1,066
Total Liabilities 13,587 13,496 13,904 5,556 3,498 4,405
Revenue from sales 7,134 8,032 7,061 4,665 1,823 1,817
Net income 289 339 (113) 615 631 875
Other comprehensive income 2 - - (11) 2 -
% owned 37.50% 37.50% 37.50%
Revaluation identifiable assets on equity affiliates - - - - - -
Equity value 863 754 627 832 818 850
Equity share in profit / (loss) 108 127 (42) 211 208 312
Equity other comprehensive income 22 77 89 6 28 25
Dividends paid to the Group - - - 292 248 261
Saudi Aramco Total Refining & Petrochemicals is an entity including a refinery in Jubail, Saudi Arabia, with a capacity of 400,000 barrels / day
with integrated petrochemical units.
The Group’s interests in associates of the Refining & Chemicals segment, operating steam crackers and polyethylene lines in Qatar have
been combined: Qatar Petrochemical Company Ltd. (20.00%), Qatofin (49.09%), Laffan Refinery (10.00%) and Laffan Refinery II (10.00%).
Registration Document 2016. TOTAL
241
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 8
B) Information related to joint ventures
The information (100% gross) related to significant joint ventures is as follows:
(M$)
Non current assets
Current assets excluding cash and cash equivalents
Cash and cash equivalents
Liquefaction entities
(Upstream)
Hanwha Total Petrochemicals
(Refining & Chemicals)
2016
47,014
922
703
2015
35,341
455
501
2014
23,326
731
516
2016
3,454
1,506
473
2015
3,543
1,501
240
20 14
3,754
1,972
149
Total Assets 48,639 36,297 24,573 5,433 5,284 5,875
Shareholder’s equity 2,961 1,840 1,198 2,947 2,609 2,323
Other non current liabilities 327 349 225 120 107 126
Non current financial debts 43,980 32,996 21,596 1,105 1,388 1,793
Other current liabilities 1,371 1,112 1,269 764 713 705
Current financial debts - - 285 497 467 928
Total Liabilities 48,639 36,297 24,573 5,433 5,284 5,875
Revenue from sales 52 32 5 7,057 7,307 8,366
Depreciation and amortization (12) (14) (5) (259) (247) (223)
Interest income 5 10 2 - - 1
Interest expense (7) (10) (1) (3) (64) (45)
Income taxes (29) (81) 50 (338) (192) (114)
Net income 449 279 36 930 514 79
Other comprehensive income 166 61 - (79) (186) (94)
% owned 50.00% 50.00% 50.00%
Revaluation identifiable assets on equity affiliates 905 965 874 - - -
Equity value 1,555 1,355 1,130 1,474 1,305 1,161
Equity share in profit / (loss) 88 55 10 465 257 40
Equity other comprehensive income 50 18 (26) 22 (75) (24)
Dividends paid to the Group - - - 256 20 -
The Group’s interests in joint ventures operating liquefaction plants have been combined. The amounts include investments in Yamal LNG in
Russia (20.02% direct holding) and Ichthys LNG in Australia (30.00%).
Hanwha Total Petrochemicals is a South Korean company that operates a petrochemical complex in Daesan, South Korea (condensate
separator, steam cracker, styrene, paraxylene, polyolefins).
Off balance sheet commitments relating to joint ventures are disclosed in Note 13 of the Consolidated Financial Statements.
In Group share, the main aggregated financial items in equity consolidated affiliates which have not been presented individually are as follows:
As of December 31, 2016 2015 2014
(M$)
Associates Joint Associates Joint Associates Joint
ventures ventures ventures
Non Current assets
1,456
Current assets 1,365 825 1,440 860 1,478 1,283
2,005
3,491
1,971
3,502
3,047
Total Assets 4,412 2,796 4,931 2,865 4,980 2,739
Shareholder’s equity 804 1,010 966 1,091 1,083 725
Non current liabilities 2,369 985 2,612 951 2,348 877
Current liabilities 1,239 801 1,353 823 1,549 1,137
Total Liabilities 4,412 2,796 4,931 2,865 4,980 2,739
242
TOTAL. Registration Document 2016
Note 8 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
For the year ended December 31, 2016 2015 2014
(M$)
Associates Joint Associates Joint Associates Joint
ventures ventures ventures
Revenues from sales
2,603
3,181
2,661
3,362
4,124
4,473
Net income 486 131 341 45 95 (175)
Share of other comprehensive income items (12) 16 13 38 (2) 44
Equity value 804 1,010 966 1,091 1,083 725
Dividends paid to the Group 308 30 442 22 470 43
8.2) Other investments
Accounting policies
These assets are classified as financial assets available for sale and
therefore measured at their fair value. For listed securities, this fair value
is equal to the market price. For unlisted securities, if the fair value
is not reliably determinable, the securities are recorded at their
historical value. Changes in fair value are recorded in other
comprehensive income. If there is any evidence of a significant
or long-lasting impairment loss, a loss is recorded in the statement
of income. This impairment is irreversible.
As of December 31, 2016
(M$)
Carrying
amount
Unrealized gain
(loss)
Balance
sheet value
Areva
17
Other publicly traded equity securities 8 29 37
17
-
Total publicly traded equity securities (a) 25 29 54
BBPP 62 - 62
BTC Limited 121 - 121
DUNKERQUE LNG SAS 133 - 133
Other equity securities (unit value below $50 million) 763 - 763
Total other equity securities (a) 1,079 - 1,079
Other investments 1,104 29 1,133
As of December 31, 2015
(M$)
Carrying
amount
Unrealized gain
(loss)
Balance
sheet value
Areva
22
Other publicly traded equity securities 9 28 37
22
-
Total publicly traded equity securities (a) 31 28 59
BBPP 62 - 62
BTC Limited 121 - 121
DUNKERQUE LNG SAS 116 - 116
Other equity securities (unit value below $50 million) 883 - 883
Total other equity securities (a) 1,182 - 1,182
Other investments 1,213 28 1,241
Registration Document 2016. TOTAL
243
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 8
As of December 31, 2014
(M$)
Carrying
amount
Unrealized gain
(loss)
Balance
sheet value
Areva
40
Other publicly traded equity securities 21 23 44
44
(4)
Total publicly traded equity securities (a) 65 19 84
BBPP 62 - 62
BTC Limited 132 - 132
DUNKERQUE LNG SAS 100 - 100
Other equity securities (unit value below $50 million) 1,021 - 1,021
Total other equity securities (a) 1,315 - 1,315
Other investments 1,380 19 1,399
(a) Including cumulative impairments of $1,633 million in 2016, $949 million in 2015 and $856 million in 2014.
8.3) Related parties
The main transactions and receivable and payable balances with related parties (principally non-consolidated subsidiaries and equity
consolidated affiliates) are detailed as follows:
As of December 31,
(M$)
2016
2015
2014
Balance sheet
Receivables
Debtors and other debtors 492 533 697
Loans (excl. loans to equity affiliates) 65 71 155
Payables
Creditors and other creditors 897 835 1,199
Debts 6 10 14
For the year ended December 31,
(M$)
2016
2015
2014
Statement of income
Sales 2,270 3,062 4,308
Purchases 4,882 6,999 9,890
Financial expense - - -
Financial income 6 6 16
8.4) Compensation for the administration and management bodies
The aggregate amount of direct and indirect compensation accounted by the French and foreign affiliates of the Company, for all executive
officers of TOTAL as of December 31, 2016 and for the members of the Board of Directors who are employees of the Group, is detailed below.
The main Group executive officers include the members of the Executive Committee and the four directors of the corporate functions members
of the Group Performance Management Committee (Communication, Legal, Health, Safety and Environment, Strategy & Climate) and the
Group Treasurer.
For the year ended December 31,
(M$)
2016
2015
2014
Number of people 14 14 31
Direct or indirect compensation 13.4 12.8 28.3
Pension expenses (a) 6.1 3.9 6.8
Share-based payments expense (IFRS 2) (b) 5.3 3.5 9.0
(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 $104.7 million provisioned as of December 31, 2016 (against $96.7 million as of December 31, 2015 and $233.7 million
as of December 31, 2014).
The change in the pension expenses in 2016 relates to a scope effect: entry in the scope of an employee whose pension expense should be accrued according to the career’s length.
(b) Share-based payments expense computed for the executive officers and the members of the Board of Directors who are employees of the Group and based on the principles of IFRS 2
“Share-based payments” described in Note 9.
The compensation allocated to members of the Board of Directors for directors’ fees totaled $1.22 million in 2016 (against $1.34 million in 2015
and $1.78 million in 2014).
244
TOTAL. Registration Document 2016
Note 9 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
9) Shareholders’ equity and share-based payments
9.1) Shareholders’ equity
Number of TOTAL shares
The Company’s common shares, par value €2.50, as of
December 31, 2016 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 (Statutes), 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.
Variation of the share capital
The authorized share capital amounts to 3,449,682,749 shares as
of December 31, 2016 compared to 3,467,448,093 shares as of
December 31, 2015 and 3,416,388,282 as of December 31, 2014.
As of December 31, 2016, the share capital of TOTAL S.A.
amounted to €6,075,914,655.
Share cancellation
In 2016, TOTAL S.A. reduced the Company’s capital through the
cancellation of shares.
At the meeting held on December 15, 2016, and pursuant to
the authorization of the Extraordinary Shareholders’ Meeting of
May 11, 2012, the Board of Directors of TOTAL S.A. decided
to cancel 100,331,268 treasury shares that TOTAL S.A. had
previously bought back off-market from four of its 100% indirectly
controlled subsidiaries.
Following this transaction the Group affiliates no longer hold
treasury shares.
This buyback of shares has no impact on the Consolidated
Financial Statements of TOTAL S.A., the fully-diluted weighted-
average shares and the earnings per share.
TOTAL S.A. did not cancel any shares in 2014 and 2015.
As of December 31, 2013 2,377,678,160
Shares issued in connection with: Capital increase as part of the global free share plan
intended for the Group employees 666,575
Exercise of TOTAL share subscription options 6,922,790
As of December 31, 2014 2,385,267,525
Shares issued in connection with: Capital increase reserved for employees 10,479,410
Capital increase within stock dividend
(2014 remainder and first interim dividend for 2015) 42,841,342
Exercise of TOTAL share subscription options 1,469,606
As of December 31, 2015 (a) 2,440,057,883
Shares issued in connection with: Capital increase within stock dividend (second interim dividend for 2015,
third interim dividend for 2015, 2015 remainder and first interim dividend for 2016) 88,401,329
Exercise of TOTAL share subscription options 2,237,918
Cancellation of treasury shares (100,331,268)
As of December 31, 2016 (b) 2,430,365,862
(a) Including 113,967,758 treasury shares deducted from consolidated shareholders’ equity.
(a) Including 10,587,822 treasury shares deducted from consolidated shareholders’ equity.
Capital increase reserved for Group employees
The Combined General Meeting of May 24, 2016, delegated to
the Board of Directors in its twenty-third resolution, the authority
to carry out, a capital increase, in one or more occasions within
a maximum period of twenty-six months, reserved to members
of a company or group savings plan of the Company.
Pursuant to this delegation, the Board of Directors, during its
meeting on July 27, 2016, decided to proceed with a capital
increase reserved for employees and retirees of the Company that
included a classic offering and a leveraged offering depending on
the employees’ choice, within the limit of 18 million shares with
immediate dividend rights. All powers have been delegated to the
Chairman and Chief Executive Officer to determine the opening
and closing of the subscription period and the subscription price.
This capital increase, opened in 2017, is expected to be completed
before the General Meeting of 2017.
Registration Document 2016. TOTAL
245
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 9
Treasury shares
Accounting policies
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.
TOTAL shares held by TOTAL S.A.
As of December 31, 2016 2015 2014
Number of treasury shares 10,587,822 13,636,490 9,030,145
Percentage of share capital 0.44% 0.56% 0.38%
Shares allocated to TOTAL share grant plans for Group employees 10,555,887 13,603,525 8,946,930
Shares intended to be allocated to new TOTAL share
purchase option plans or to new share grant plans 31,935 32,965 83,215
TOTAL shares held by Group subsidiaries
As of December 31, 2016 2015 2014
Number of shares held by Group subsidiaries - 100,331,268 100,331,268
Percentage of share capital - 4.11% 4.21%
Shares held by a consolidated subsidiary,
Total Nucléaire, 100% indirectly controlled by TOTAL S.A. - 2,023,672 2,023,672
Shares held by subsidiaries of Elf Aquitaine (Financière Valorgest,
Sogapar and Fingestval), 100% indirectly controlled by TOTAL S.A. - 98,307,596 98,307,596
Paid-in surplus
In accordance with French law, the paid-in surplus corresponds to
premiums related to shares, contributions or mergers 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
except in cases of a refund of shareholder contributions to.
As of December 31, 2016, paid-in surplus relating to TOTAL S.A.
amounted to €28,961 million (€30,265 million as of December 31,
2015 and €28,319 million as of December 31, 2014).
Reserves
Under French law, 5% of net income must be transferred to the
legal reserve until the legal reserve reaches 10% of the nominal
value of the share capital. This reserve cannot be distributed
to the shareholders other than upon liquidation but can be used
to offset losses.
If wholly distributed, the unrestricted reserves of the parent
company would be taxed for an approximate amount
of $569 million as of December 31, 2016 ($630 million as of
December 31, 2015 and $755 million as of December 31, 2014)
with regards to additional corporation tax to be applied on
regulatory reserves so that they become distributable.
Futhermore, the additional tax to corporate income tax of 3%,
due on dividends distributed by French companies or foreign
organizations subject to corporate income in France, established by
the second corrective finance act for 2012 would be payable for an
amount of $621 million as of December 31, 2016, ($450 million as
of December 31, 2015 and $553 million as of December 31, 2014).
Earnings per share
Accounting policies
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
246
TOTAL. Registration Document 2016
Note 9 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
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.
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.
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
In compliance with IAS 33, earnings per share and diluted earnings
per share are based on the net income after deduction of the
remuneration due to the holders of deeply subordinated notes.
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:
2016 2015 2014
Number of shares as of January 1, 2,440,057,883 2,385,267,525 2,377,678,160
Number of shares issued during the year (pro rated)
Exercise of TOTAL share subscription options 538,621 662,351 3,768,183
Exercise of TOTAL share purchase options - - -
TOTAL performance shares 1,524,172 103,131 2,121,605
Global free TOTAL share plan (a) - - 333,637
Capital increase reserved for employees - 6,986,273 -
Capital increase within stock dividend 51,029,237 13,343,379 -
Buyback of treasury shares on December 15, 2016 4,180,470 - -
Cancellation of treasury shares on December 15, 2016 (4,180,470) - -
TOTAL shares held by TOTAL S.A. or by its subsidiaries
and deducted from shareholders’ equity (113,967,758) (111,324,719) (111,042,073)
Weighted-average number of shares 2,379,182,155 2,295,037,940 2,272,859,512
Dilutive effect
TOTAL share subscription and purchase options 630,474 1,168,644 2,119,759
TOTAL performance shares 9,058,264 7,647,690 3,578,225
Global free TOTAL share plan (a) - - 353,054
Capital increase reserved for employees 843,043 581,268 2,093,601
Weighted-average number of diluted shares 2,389,713,936 2,304,435,542 2,281,004,151
(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.
Earnings per share in euros
The earnings per share in euros, obtained from the earnings per
share in dollars, converted by using the average exchange rate
euro / dollar, is €2.28 per share for 2016 closing (€1.96 for 2015
closing). The fully-diluted earnings per share calculated by using the
same method is €2.27 per share for 2016 closing (€1.95 for 2015
closing).
Dividend
For the fiscal year 2016, TOTAL S.A. already paid two quarterly
interim dividends:
– payment of the first interim dividend for the fiscal year 2016
of €0.61 per share, decided by the Board of Directors on
September 21, 2016 has been done in cash or in shares on
October 14, 2016 (the ex-dividend date was September 27,
2016). The number of shares issued in lieu of the cash dividend
was based on the dividend amount divided by €38.00 per share,
equal to 90% of the average Euronext Paris opening price of the
shares for the 20 trading days preceding the Board of the Directors
meeting on September 21, 2016 reduced by the amount of the
first interim dividend. On October 14, 2016, 25,329,951 shares
have been issued at a price of 38.00 € per share;
– payment of the second interim dividend for the fiscal year 2016
of €0.61 per share, decided by the Board of Directors on
December 15, 2016 has been done in cash or in shares on
January 12, 2017 (the ex-dividend date was December 21,
2016). The number of shares issued in lieu of the cash dividend
was based on the dividend amount divided by €41.87 per share,
equal to 95% of the average Euronext Paris opening price of the
shares for the 20 trading days preceding the Board of Directors
meeting, reduced by the amount of the second interim dividend.
On January 12, 2017, 23,206,171 shares have been issued at a
price of €41.87 per share.
The Board of Directors, during its October 27, 2016 meeting,
decided to set the third quarterly interim dividend for the fiscal year
2016 at €0.61 per share. This interim dividend will be paid on
April 6, 2017 (the ex-dividend date will be March 20, 2017).
A resolution will be submitted at the Shareholders’ Meeting on May
26, 2017 to pay a dividend of €2.45 per share for the 2016 fiscal
year, as a balance of €0.62 per share to be distributed after
deducting the three quarterly interim dividends of €0.61 per share
that will have already been paid.
Registration Document 2016. TOTAL
247
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 9
Issuance of perpetual subordinated notes
– deeply subordinated note 2.625% perpetual maturity callable
In 2016, the Group issued three tranches of perpetual subordinated
notes in euros through TOTAL S.A.:
– deeply subordinated note 3.875% perpetual maturity callable
after 6 years (€1,750 million);
– deeply subordinated note 2.708% perpetual maturity callable
after 6.6 years (€1,000 million);
– deeply subordinated note 3.369% perpetual maturity callable
after 10 years (€1,500 million).
In 2015, the Group issued two tranches of perpetual subordinated
notes in EUR through TOTAL S.A.:
– deeply subordinated note 2.250% perpetual maturity callable
after 6 years (€2,500 million);
Other comprehensive income
after 10 years (€2,500 million).
Based on their characteristics (mainly no mandatory repayment
and no obligation to pay a coupon except in the event of a dividend
distribution) and in compliance with IAS 32 standard “Financial
instruments - presentation”, these notes were recorded in equity.
As of December 31, 2016, the amount of the perpetual deeply
subordinated note booked in the Group shareholders’ equity
is $10,327 million. The coupons attributable to the holders of these
securities are booked in deduction of the Group shareholders’
equity for an amount of $203 million for fiscal year 2016 closing.
The tax saving due to these coupons is booked in the statement
of income.
Detail of other comprehensive income showing both items potentially reclassifiable and those not potentially reclassifiable from equity to net
income is presented in the table below:
For the year ended December 31,
(M$) 2016 2015 20 14
Actuarial gains and loses (371) 557 (1,526)
Tax effect 55 (278) 580
Currency translation adjustment generated
by the parent company (1,548) (7,268) (9,039)
Sub-total items not potentially reclassifiable
to profit & loss (1,864) (6,989) (9,985)
Currency translation adjustment (1,098) 2,456 4,245
– Unrealized gain / (loss) of the period (543) 3,032 4,413
– Less gain / (loss) included in net income 555 576 168
Available for sale financial assets 4 9 (29)
– Unrealized gain / (loss) of the period 4 10 (39)
– Less gain / (loss) included in net income - 1 (10)
Cash flow hedge 239 (185) 97
– Unrealized gain / (loss) of the period 186 (390) (198)
– Less gain / (loss) included in net income (53) (205) (295)
Share of other comprehensive income
of equity affiliates, net amount 935 120 (1,538)
– Unrealized gain / (loss) of the period 933 118 (1,538)
– Less gain / (loss) included in net income (2) (2) -
Other 1 1 3
Tax effect (76) 53 (18)
Sub-total items potentially reclassifiable
to profit & loss 5 2,454 2,760
Total other comprehensive income, net amount (1,859) (4,535) (7,225)
248
TOTAL. Registration Document 2016
Note 9 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
The currency translation adjustment by currency is detailed in the following table:
As of December 31, 2016 Pound Other
(M$) Total Euro sterling Ruble currencies
Currency translation adjustment generated by the parent company (1,548) (1,548) - - -
Currency translation adjustment (1,098) (184) (887) 7 (34)
Currency translation adjustment of equity affiliates 890 223 54 643 (30)
Total currency translation adjustment recognized
in comprehensive income (1,756) (1,509) (833) 650 (64)
As of December 31, 2015 Pound Other
(M$) Total Euro sterling Ruble currencies
Currency translation adjustment generated by the parent company (7,268) (7,268) - - -
Currency translation adjustment 2,456 3,318 (267) (3) (592)
Currency translation adjustment of equity affiliates 87 903 16 (718) (114)
Total currency translation adjustment recognized
in comprehensive income (4,725) (3,047) (251) (721) (706)
As of December 31, 2014 Pound Other
(M$) Total Euro sterling Ruble currencies
Currency translation adjustment generated by the parent company (9,039) (9,039) - - -
Currency translation adjustment 4,245 5,474 (372) (22) (835)
Currency translation adjustment of equity affiliates (1,521) 1,127 21 (2,586) (83)
Total currency translation adjustment recognized
in comprehensive income (6,315) (2,438) (351) (2,608) (918)
Tax effects relating to each component of other comprehensive income are as follows:
For the year ended December 31,
(M$)
2016
2015
2014
Pre-tax Tax Net Pre-tax Tax Net Pre-tax Tax Net
amount effect amount amount effect amount amount effect amount
Actuarial gains and losses (371) 55 (316) 557 (278) 279 (1,526) 580 (946)
Currency translation adjustment
generated by the parent company (1,548) - (1,548) (7,268) - (7,268) (9,039) - (9,039)
Sub-total items not potentially
reclassifiable to profit & loss (1,919) 55 (1,864) (6,711) (278) (6,989) (10,565) 580 (9,985)
Currency translation adjustment (1,098) - (1,098) 2,456 - 2,456 4,245 - 4,245
Available for sale financial assets 4 - 4 9 (5) 4 (29) 15 (14)
Cash flow hedge 239 (76) 163 (185) 58 (127) 97 (33) 64
Share of other comprehensive income
of equity affiliates, net amount 935 - 935 120 - 120 (1,538) - (1,538)
Other 1 - 1 1 - 1 3 - 3
Sub-total items potentially
reclassifiable to profit & loss 81 (76) 5 2,401 53 2,454 2,778 (18) 2,760
Total other comprehensive income (1,838) (21) (1,859) (4,310) (225) (4,535) (7,787) 562 (7,225)
Non-controlling interests
As of December 31, 2016, no subsidiary has non-controlling interests that would have a material effect on the Group financial statements.
Registration Document 2016. TOTAL
249
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 9
9.2) Share-based payments
Accounting policies
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 expense is recognized on a straight-line basis over the period
in which the advantages are acquired.
The fair value of the options is calculated using the Black-Scholes
model at the grant date.
For restricted share plans, the fair value is calculated using the
market price at the grant date after deducting the expected
distribution rate during the vesting period. The number of allocated
equity instruments can be revised during the vesting period in
cases of non compliance with performance conditions, with the
exception of those related to the market, or according to the rate
of turnover of the beneficiaries.
A) TOTAL share subscription option plans
The cost of employee-reserved capital increases is immediately
expensed.
The cost of the capital increase reserved for employees consists
of the cost related to the discount on all the shares subscribed
using both the classic and the leveraged schemes, and the
opportunity gain for the shares subscribed using the leveraged
scheme. This opportunity gain corresponds to the benefit
of subscribing to the leveraged offer, rather than reproducing
the same economic profile through the purchase of options in the
market for individual investors.
The global cost 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 same number of shares in cash
with a loan financing reimbursable “in fine”.
2006 Plan
2007 Plan
2008 Plan
2009 Plan
2010 Plan
2011 Plan
Total
Weighted
average
exercise
price
(in euros)
Date of the Shareholders’ Meeting 05 / 14 / 2004 05 / 11 / 2007 05 / 11 / 2007 05 / 11 / 2007 05 / 21 / 2010 05 / 21 / 2010
Date of the award (a) 07 / 18 / 2006 07 / 17 / 2007 10 / 09 / 2008 09 / 15 / 2009 09 / 14 / 2010 09 / 14 / 2011
Strike price 50.60 60.10 42.90 39.90 38.20 33.00
Expiry date 07 / 18 / 2014 07 / 17 / 2015 10 /0 9 / 2016 09 / 15 / 2017 09 / 14 / 2018 09 / 14 / 2019
Number of options (b)
Existing options
as of January 1, 2014 5,620,626 5,847,965 4,219,198 3,989,378 4,537,852 1,141,094 25,356,113 46.82
Granted - - - - - - - -
Cancelled (b) (1,797,912) - - - - - (1,797,912) 50.60
Exercised (3,822,714) - (1,003,314) (978,109) (836,634) (282,019) (6,922,790) 45.76
Existing options
as of January 1, 2015 - 5,847,965 3,215,884 3,011,269 3,701,218 859,075 16,635,411 46.85
Granted - - - - - - - -
Cancelled (b) - (5,847,965) - - - - (5,847,965) 60.10
Exercised - - (654,382) (300,486) (377,972) (136,766) (1,469,606) 40.16
Existing options
as of January 1, 2016 - - 2,561,502 2,710,783 3,323,246 722,309 9,317,840 39.58
Granted - - - - - - - -
Cancelled (b) - - (1,794,304) - - - (1,794,304) 42.90
Exercised - - (767,198) (931,730) (443,009) (95,981) (2,237,918) 40.30
Existing options
as of December 31, 2016 - - - 1,779,053 2,880,237 626,328 5,285,618 38.16
(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) Out of the options canceled in 2014, 2015 and 2016, 1,797,912 options that were not exercised expired on July 18, 2014 due to the expiry of the 2006 plan, 5,847,965 options that were
not exercised expired on July 17, 2015 due to the expiry of the 2007 plan, and 1,794,304 options that were not exercised expired on October 9, 2016 due to the expiry of the 2008 plan.
250
TOTAL. Registration Document 2016
Note 9 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
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.
Since the 2011 Plan, no new TOTAL share subscription option plan
or TOTAL share purchase plan was decided.
B) TOTAL performance share grants
2012 Plan
2013 Plan
2014 Plan
2015 Plan
2016 Plan
Total
Date of the Shareholders’ Meeting
Date of the award
Date of the final award (end of the vesting period) 07 / 27 / 2014 07 / 26 / 2016 07 / 30 / 2017 07 / 29 / 2018 07 / 28 / 2019
Transfer authorized as from 07 / 27 / 2016 07 / 26 / 2018 07 / 30 / 2019 07 / 29 / 2020 07 / 29 / 2021
Grant date IFRS 2 fair value €31.41 €32.64 €44.66 €35.90 €35.37
Number of performance shares
05 / 13 / 2011 05 / 13 / 2011 05 / 16 / 2014 05 / 16 / 2014 05 / 24 / 2016
07 / 26 / 2012 07 / 25 / 2013 07 / 29 / 2014 07 / 28 / 2015 07 / 27 / 2016
Outstanding as of January 1, 2014 4,278,410 4,460,390 - - - 8,738,800
Notified - - 4,486,300 - - 4,486,300
Cancelled (43,320) (22,360) (11,270) - - (76,950)
Finally granted (4,235,090) (3,570) - - - (4,238,660)
Outstanding as of January 1, 2015 - 4,434,460 4,475,030 - - 8,909,490
Notified - - - 4,761,935 - 4,761,935
Cancelled - (28,230) (22,630) (1,430) - (52,290)
Finally granted - (55,400) (49,940) - - (105,340)
Outstanding as of January 1, 2016 - 4,350,830 4,402,460 4,760,505 - 13,513,795
Notified - - - - 5,639,400 5,639,400
Cancelled - (1,303,732) (37,100) (29,170) (1,730) (1,371,732)
Finally granted - (3,047,098) (860) (600) (110) (3,048,668)
Outstanding as of December 31, 2016 - - 4,364,500 4,730,735 5,637,560 14,732,795
The performance shares, which are bought back by the Company
on the market, are finally granted to their beneficiaries after a 3-year
vesting period for the 2013 Plan and following Plans, and a 2-year
vesting period for the previous Plans, from the date of the grant.
The final grant is subject to a continued employment condition and
one performance condition for the 2013 and 2014 Plans and two
performance conditions for the 2015 and 2016 Plans. Moreover,
the transfer of the performance shares finally granted will not be
permitted until the end of a 2-year holding period from the date of
the final grant.
using the average of closing prices over one quarter, in USD, at
the beginning and at the end of each three-year period (Q4 year
N / Q4 year N-3). The dividend is considered as being reinvested
on the closing price basis, on the ex-dividend date;
– the Group ranking relative to those of its peers (ExxonMobil,
Royal Dutch Shell, BP and Chevron), which is evaluated annually
using the yearly variation in net cash flow per share, in USD,
as released by companies.
Depending on TOTAL S.A.’s ranking, a grant rate is determined
each year, for both criterion:
2016 Plan
The Board of Directors decided on July 27, 2016 to proceed with
Total performance share grants in favor of certain employees and
executive directors of the Company or companies of the Group,
subject to the fulfillment of the presence conditions and of the two
performance conditions.
The presence condition applies to all shares.
The performance conditions, each of them respectively
representing 50% of the final grant rate, are as follows:
– the Group ranking relative to those of its peers (ExxonMobil,
Royal Dutch Shell, BP and Chevron) according to the Total
Shareholder Return (TSR) criteria, which is evaluated annually
– 1st place: 180% of the grant;
– 2nd place: 130% of the grant;
– 3rd place: 80% of the grant;
– 4th and 5th places: 0% of the grant.
For both conditions, the average of the three “attribution rates”
(on each of the three financial years on which the performance
conditions are based), will be expressed in percentage and capped
at 100%.
The performance conditions apply for all shares granted to senior
executives. The first 150 shares granted to non-senior executive
are not subject to the performance conditions, but all shares
beyond this threshold are.
Registration Document 2016. TOTAL
251
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 9
C) SunPower plans
SunPower has four stock incentive plans: the 1996 Stock Plan
(“1996 Plan”), the Third Amended and Restated 2005 SunPower
Corporation Stock Incentive Plan (“2005 Plan”), the PowerLight
Corporation Common Stock Option and Common Stock Purchase
Plan (“PowerLight Plan”) and the SunPower Corporation 2015
Omnibus Incentive Plan (“2015 Plan”). The PowerLight Plan was
assumed by SunPower by way of the acquisition of PowerLight in
fiscal year 2007. Under the terms of all plans, SunPower may issue
incentive or non-statutory stock options or stock purchase rights to
directors, employees and consultants to purchase common stock.
The 2015 Plan, which subsequently replaced the 2005 Plan, was
adopted by the SunPower’s Board of Directors in February 2015,
and was approved by shareholders in June 2015. The 2015 Plan
allows for the grant of options, as well as grant of stock appreciation
rights, restricted stock grants, restricted stock units and other
equity rights. The 2015 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 2015 Plan includes an automatic annual increase mechanism
equal to the lower of 3% of the outstanding shares of all classes
of the SunPower’s common stock measured on the last day of the
immediately preceding fiscal year, 6.0 million shares, or such other
number of shares a determined by SunPower’s Board of Directors.
Subsequent to the adoption of the 2015 Plan, no new awards are
being granted under the 2005 Plan, the 1996 Plan, or the PowerLight
The following table summarizes SunPower’s stock option activities:
Plan. Outstanding awards granted under these plans continue
to be governed by their respective terms. As of January 1, 2017,
approximately 7.0 million shares were available for grant under
the 2015 Plan.
Incentive stock options, non-statutory stock options, and stock
appreciation rights may be granted at no less than the fair value of
the common stock on 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. SunPower has
not granted stock options since fiscal year 2008, and accordingly
all outstanding options are fully vested. Under the 2005 and 2015
plans, 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 fiscal year 2016, 2015 and 2014, SunPower
withheld 1,039,027 shares, 1,380,891 shares and 1,738,625
shares, respectively, 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 Weighted-Average
Remaining
Contractual Term
Exercise Price
Per Share
Aggregate
Intrinsic Value
(in thousands dollars)
Outstanding and exercisable as of January 1, 2017
134
(in dollars)
56.21
(in years)
1.41
2
The intrinsic value of options exercised in fiscal year 2016 was nil, versus $1.0 million and $2.4 million respectively in 2015 and 2014.
There were no stock options granted in fiscal years 2016, 2015 and 2014.
The aggregate intrinsic value in the preceding table represents the total pre-tax intrinsic value, based on SunPower’s closing stock price
of $6.61 at January 1, 2017 which would have been received by the option holders had all option holders exercised their options as of that
date. The total number of in-the-money options exercisable was 0.3 thousand shares as of January 1, 2017.
252
TOTAL. Registration Document 2016
The following table summarizes SunPower’s restricted stock activities:
Note 9 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
Restricted Stock Awards and Units
Shares
Weighted-Average
(in thousands) Grant Date Fair Value
Per Share (in dollars) (a)
Outstanding as of December 29, 2013 9,592 12.26
Granted
Vested (b)
Forfeited
2,187
(4,432)
(792)
31.8
11.61
15.00
Outstanding as of December 28, 2014 6,555 18.88
Granted
Vested (b)
Forfeited
2,695
(3,560)
(627)
29.77
15.31
22.99
Outstanding as of January 3, 2016 5,063 26.68
Granted
Vested (b)
Forfeited
4,978
(2,837)
(1,057)
18.81
23.47
26.30
Outstanding as of January 1, 2017 6,147 21.85
(a) SunPower estimates the fair value of the restricted stock unit awards as the stock price on the grant date.
(b) Restricted stock awards and units vested include shares withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements.
D) Share-based payment expense
Share-based payment expense before tax was broken down as follows:
As of December 31,
(M$) 2016 2015 2014
Total restricted shares plans 113 71 114
SunPower plans 28 78 80
Capital increase reserved for employees - 30 -
Total 141 179 194
In 2014, 2015 and 2016, no new TOTAL share subscription option plan has been decided.
During the year 2015, the main assumptions used for the valuation of the cost of the capital increase reserved for employees were the following:
For the year ended December 31, 2015
Date of the Board of Directors meeting that decided the issue July 29, 2014
Subscription price (€) (a) 37.50
Share price at the reference date (€) (b) 44.65
Number of shares (in millions) 10.50
Risk free interest rate (%) (c) 0.01
Employees loan financing rate (%) (d) 6.32
Non transferability cost (% of the reference’s share price) 23.0
Expenses ($ million) 30.0
(a) Average of the closing TOTAL share prices during the twenty trading days prior to the subscription period, after deduction of a 20% discount.
(b) Share price on March 13, 2015, date on which the Chief Executive Officer set the subscription period.
(c) Zero coupon euro swap rate at 5 years.
(d) The employees’ loan financing rate is based on a 5 year consumer’s credit rate.
Registration Document 2016. TOTAL
253
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 10
10) Payroll, staff and employee benefits obligations
10.1. Employee benefits obligations
Accounting policies
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. Such gains and losses
are recognized in the statement of comprehensive income, with no
possibility to subsequently recycle them to the income statement.
The past service cost is recorded immediately in the statement of
income, whether vested or unvested.
The net periodic pension cost is recognized under “Other operating
expenses”.
Liabilities for employee benefits obligations consist of the following:
As of December 31,
(M$) 2016 2015 2014
Pension benefits liabilities 2,948 2,926 3,751
Other benefits liabilities 648 627 757
Restructuring reserves (early retirement plans) 150 221 250
Total 3,746 3,774 4,758
Net liabilities relating to assets held for sale 145 3 208
Description of plans and risk management
The Group operates, for the benefit of its current and former
employees, both defined benefit plans and defined contribution plans.
The Group recognized a charge of $157 million for defined contribution
plans in 2016 ($159 million in 2015 and $157 million in 2014).
The Group’s main defined benefit pension plans are located in
France, the United Kingdom, the United States, Belgium and
Germany. Their main characteristics, depending on the country-
specific regulatory environment, are the following:
– the benefits are usually based on the final salary and seniority;
– they are usually funded (pension fund or insurer);
– they are usually closed to new employees who benefit from
defined contribution pension plans;
– they are paid in annuity or in lump sum.
The pension benefits include also termination indemnities and early
retirement benefits. The other benefits are employer contributions
to post-employment medical care.
In order to manage the inherent risks, the Group has implemented
a dedicated governance framework to ensure the supervision
of the different plans. These governance rules provide for:
– the Group’s representation in key governance bodies or monitoring
committees;
– the principles of the funding policy;
– the general investment policy, including for most plans the
establishment of a monitoring committee to define and follow
the investment strategy and performance and to ensure the
principles in respect of investment allocation are respected;
– a procedure to approve the establishment of new plans or the
amendment of existing plans;
– principles of administration, communication and reporting.
254
TOTAL. Registration Document 2016
Note 10 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
Change in benefit obligations and plan assets
The fair value of the defined benefit obligation and plan assets in the Consolidated Financial Statements is detailed as follows:
As of December 31, Pension benefits Other benefits
(M$)
2016 2015 2014 2016 2015 20 14
Change in benefit obligation
Benefit obligation at beginning of year 12,473 14,297 14,310 627 845 788
Current service cost 251 271 281 13 17 16
Interest cost 373 402 560 21 22 31
Past service cost (92) (35) (84) - - (4)
Settlements - (58) 1 - - -
Plan participants’ contributions 8 8 11 - - -
Benefits paid (651) (653) (694) (30) (32) (38)
Actuarial losses (gains) 762 (533) 1,281 37 (71) 127
Foreign currency translation and other (960) (1,226) (1,369) (20) (154) (75)
Benefit obligation at year-end 12,164 12,473 14,297 648 627 845
of which plans entirely or partially funded 11,376 11,742 13,448 - - -
of which plans not funded 788 731 849 648 627 845
Change in fair value of plan assets
Fair value of plan assets at beginning of year (9,627) (10,498) (11,293) - - -
Interest income (307) (318) (463) - - -
Actuarial losses (gains) (428) 48 111 - - -
Settlements - 44 - - - -
Plan participants’ contributions (8) (8) (11) - - -
Employer contributions (130) (311) (384) - - -
Benefits paid 538 553 563 - - -
Foreign currency translation and other 839 863 979 - - -
Fair value of plan assets at year-end (9,123) (9,627) (10,498) - - -
Unfunded status 3,041 2,846 3,799 648 627 845
Asset ceiling 26 27 34 - - -
Net recognized amount 3,067 2,873 3,833 648 627 845
Pension benefits and other benefits liabilities 2,948 2,926 3,751 648 627 757
Other non-current assets (26) (56) (38) - - -
Net benefit liabilities relating to assets held for sale 145 3 120 - - 88
As of December 31, 2016, the contribution from the main geographical areas for the net pension liability in the balance sheet is: 59% for the
euro area, 19% for the United Kingdom and 15% for the United States.
Registration Document 2016. TOTAL
255
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 10
The amounts recognized in the consolidated income statement and the consolidated statement of comprehensive income for defined benefit
plans are detailed as follows:
For the year ended December 31, Pension benefits Other benefits
(M$)
2016 2015 2014 2016 2015 20 14
Current service cost 251 271 281 13 17 16
Past service cost (92) (35) (84) - - (4)
Settlements - (14) 1 - - -
Net interest cost 66 84 97 21 22 31
Benefit amounts recognized on Profit & Loss 225 306 295 34 39 43
Actuarial (Gains)/Losses
– Effect of changes in demographic assumptions (56) (41) 178 (7) (10) 18
– Effect of changes in financial assumptions 1,008 (384) 1,295 48 (27) 129
– Effect of experience adjustments (190) (108) (192) (4) (34) (20)
– Actual return on plan assets
(excluding interest income) (421) 48 111 - - -
Effect of asset ceiling (7) (1) 7 - - -
Benefit amounts recognized on Equity 334 (486) 1,399 37 (71) 127
Total benefit amounts recognized
on other comprehensive income 559 (180) 1,694 71 (32) 170
Expected future cash out flow
The average duration of accrued benefits is approximately 15 years for defined pension benefits and 18 years for other benefits. The Group
expects to pay contributions of $151 million in respect of funded pension plans in 2017.
Estimated future benefits either financed from plan assets or directly paid by the employer are detailed as follows:
Estimated future payments (M$) Pension benefits Other benefits
2017 639 28
2018 709 28
2019 597 27
2020 608 27
2021 609 26
2022-2026 3,145 130
Type of assets
Asset allocation
Pension benefits
As of December 31, 2016 2015 2014
Equity securities 27% 28% 29%
Debt securities 42% 42% 43%
Monetary 2% 4% 3%
Annuity contracts 21% 21% 21%
Real estate 8% 5% 4%
Investments on equity and debt markets are quoted on active markets.
256
TOTAL. Registration Document 2016
Note 10 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
Main actuarial assumptions and sensitivity analysis
Assumptions used to determine
benefits obligations Pension benefits Other benefits
As of December 31, 2016 2015 2014 2016 2015 20 14
Discount rate (weighted average for all regions) 2.60% 3.25% 3.06% 2.51% 3.00% 3.12%
of which Euro zone 1.69% 2.18% 1.95% 1.85% 2.42% 2.22%
of which United States 4.00% 4.25% 4.00% 4.00% 4.25% 4.00%
of which United Kingdom 2.75% 3.75% 3.75% - - -
Inflation rate (weighted average for all regions) 2.41% 2.43% 2.44% - - -
of which Euro zone 1.50% 1.75% 1.75% - - -
of which United States 2.50% 2.50% 2.50% - - -
of which United Kingdom 3.50% 3.25% 3.25% - - -
The discount rate retained is determined by reference to the high quality rates for AA-rated corporate bonds for a duration equivalent to that
of the obligations. It derives from a benchmark per monetary area of different market data at the closing date.
Sensitivity to inflation in respect of defined benefit pension plans is not material in the United States.
A 0.5% increase or decrease in discount rates – all other things being equal – would have the following approximate impact on the benefit obligation:
(M$) 0.5% Increase 0.5% Decrease
Benefit obligation as of December 31, 2016 (853) 977
A 0.5% increase or decrease in inflation rates – all other things being equal – would have the following approximate impact on the benefit
obligation:
(M$) 0.5% Increase 0.5% Decrease
Benefit obligation as of December 31, 2016 667 (568)
10.2) Payroll and staff
For the year ended December 31, 2016 2015 2014
Personnel expenses (M$)
Wages and salaries (including social charges) 8,238 8,088 9,690
Group employees at December 31,
France
Management 12,057 11,000 11,477
Other 19,567 19,219 21,120
International
Management 17,186 16,624 17,794
Other 53,358 49,176 49,916
Total 102,168 96,019 100,307
The number of employees includes only employees of fully consolidated subsidiaries.
Registration Document 2016. TOTAL
257
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 11
11) Income taxes
Accounting policies
Income taxes disclosed in the statement of income include the
current tax expenses (or income) and the deferred tax expenses
(or income).
The expense (or income) of current tax is the estimated amount of
the tax due for the taxable income of the period.
The Group uses the method whereby deferred income taxes are
recorded based on the temporary differences between the carrying
amounts of assets and liabilities recorded in the balance sheet and their
tax bases, and on carry-forwards of unused tax losses and tax credits.
Deferred tax assets and liabilities are measured using the tax rates
that have been enacted or substantially enacted at the balance
sheet date. The tax rates used depend on the timing of reversals of
temporary differences, tax losses and other tax credits. The effect
of a change in tax rate is recognized either in the consolidated
statement of income or in shareholders’ equity depending on the
item it relates to.
Deferred tax resulting from temporary differences between the carrying
amounts of equity-method investments and their tax bases are
recognized. The deferred tax calculation is based on the expected
future tax effect (dividend distribution rate or tax rate on capital gains).
Income taxes are detailed as follows:
For the year ended December 31,
(M$) 2016 2015 2014
Current income taxes (2,911) (4,552) (10,904)
Deferred income taxes 1,941 2,899 2,290
Total income taxes (970) (1,653) (8,614)
Before netting deferred tax assets and liabilities by fiscal entity, the components of deferred tax balances are as follows:
As of December 31,
(M$) 2016 2015 2014
Net operating losses and tax carry forwards 5,077 4,849 5,213
Employee benefits 1,258 1,260 1,770
Other temporary non-deductible provisions 5,876 6,481 6,258
Differences in depreciations (14,208) (15,932) (18,129)
Other temporary tax deductions (2,126) (1,795) (2,542)
Valuation allowance (2,569) (3,241) (3,301)
Net deferred tax liability (6,692) (8,378) (10,731)
The reserves of TOTAL subsidiaries that would be taxable if distributed but for which no distribution is planned, and for which no deferred
tax liability has therefore been recognized, totaled $10,220 million as of December 31, 2016.
The impairment of deferred tax assets in the table above for $2,569 million as of December 31, 2016, relates notably to France for an amount
of $523 million, to Congo for an amount of $503 million, to Australia for an amount of $399 million, to Canada for an amount of $341 million
and to Belgium for an amount of $251 million.
After netting deferred tax assets and liabilities by fiscal entity, deferred taxes are presented on the balance sheet as follows:
As of December 31,
(M$) 2016 2015 2014
Deferred tax assets, non-current 4,368 3,982 4,079
Deferred tax liabilities, non-current (11,060) (12,360) (14,810)
Net amount (6,692) (8,378) (10,731)
258
TOTAL. Registration Document 2016
Note 11 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
The net deferred tax variation in the balance sheet is analyzed as follows:
As of December 31,
(M$) 2016 2015 2014
Opening balance (8,378) (10,731) (14,012)
Deferred tax on income 1,941 2,899 2,290
Deferred tax on shareholders’ equity (a) (21) (225) 562
Changes in scope of consolidation (b) (370) (552) 356
Currency translation adjustment 136 231 73
Closing balance (6,692) (8,378) (10,731)
(a) This amount includes mainly deferred taxes on actuarial gains and losses, 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 9 to the Consolidated Financial Statements).
(b) Changes in scope of consolidation include, as of December 31, 2016 the impact of reclassifications in assets and liabilities classified as held for sale for $(106) million and the acquisition
of SAFT for $(151) million.
Reconciliation between provision for income taxes and pre-tax income:
For the year ended December 31,
(M$) 2016 2015 2014
Consolidated net income
4,250
Provision for income taxes 970 1,653 8,614
6,206
4,786
Pre-tax income 7,176 6,439 12,864
French statutory tax rate 34.43% 38.00% 38.00%
Theoretical tax charge (2,471) (2,447) (4,888)
Difference between French and foreign income tax rates 5 (6) (4,256)
Tax effect of equity in income (loss) of affiliates 761 897 1,012
Permanent differences (76) (371) 833
Adjustments on prior years income taxes 54 100 33
Adjustments on deferred tax related to changes in tax rates 234 483 (1)
Changes in valuation allowance of deferred tax assets 523 (309) (1,347)
Net provision for income taxes (970) (1,653) (8,614)
The French statutory tax rate includes the standard corporate tax rate (33.33%) and additional applicable taxes that bring the overall tax rate
to 34.43% (versus 38% in 2015 and 38% in 2014).
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 carried forward tax credits
Deferred tax assets related to carried forward tax credits on net operating losses expire in the following years:
As of December 31,
(M$)
Basis
2016
Tax
Basis
2015
Tax
Basis
2014
Tax
-
2015
218
2016 - - 396 193 306 151
2017 636 265 617 248 623 229
2018 582 237 489 182 424 143
2019 (a) 148 71 15 3 3,313 899
2020 (b) 15 4 3,289 948 - -
2021 and after 4,775 1,283 - - - -
Unlimited 9,753 3,217 9,656 3,275 9,906 3,573
443
-
-
-
Total 15,909 5,077 14,462 4,849 15,015 5,213
(a) Net operating losses and carried forward tax credits in 2019 and after for 2014.
(b) Net operating losses and carried forward tax credits in 2020 and after for 2015.
Registration Document 2016. TOTAL
259
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Notes 11, 12
As of December 31, 2016 the schedule of the net operating losses and the carried forward tax credits for the main countries is as follows:
As of December 31, 2016
(M$)
2017
2018
2019
2020
2021 and after
Unlimited
Tax
Canada
France
Australia
United
Kingdom
United
States
-
-
-
-
752
237
-
-
-
-
-
803
-
-
-
-
-
748
-
-
-
-
-
572
-
-
-
-
296
166
Total 989 803 748 572 462
The Group has unused tax losses for which deferred tax has not been recognized for an amount of $961 million as of December 31, 2016,
mainly in the Upstream segment when the affiliate or the field concerned is in its exploration phase. The net operating losses created during
this exploration phase will be useable only if a final investment and development decision is made. Accordingly, the time limit for the utilization
of these net operating losses is not known.
12) Provisions and other non-current liabilities
12.1) Provisions and other non-current liabilities
Accounting policies
A provision is recognized when the Group has a present obligation
(legal or constructive) as a result of a past event for which it is
probable that an outflow of resources will be required and when a
reliable estimate can be made regarding the amount of the obligation.
The amount of the liability corresponds to the best possible estimate.
Provisions and non-current liabilities are comprised of liabilities for
which the amount and the timing are uncertain. They arise from
environmental risks, legal and tax risks, litigation and other risks.
As of December 31,
(M$) 2016 2015 2014
Litigations and accrued penalty claims 1,123 1,120 1,040
Provisions for environmental contingencies 938 909 994
Asset retirement obligations 12,665 13,314 13,121
Other non-current provisions 1,455 1,357 1,528
of which restructuring activities (Refining & Chemicals and Marketing & Services) 184 223 241
of which financial risks related to non-consolidated and equity consolidated affiliates 63 216 228
of which contingency reserve regarding guarantees granted in relation to solar panels (SunPower) 168 166 155
Other non-current liabilities 665 802 862
Total 16,846 17,502 17,545
In 2016, litigation reserves amount to $1,123 million of which
$959 million is in the Upstream, notably in Angola and Nigeria.
In 2014, litigation reserves amounted to $1,040 million of which
$861 million was in the Upstream, notably in Angola and Nigeria.
In 2016, other non-current liabilities mainly include debts (whose
maturity is more than one year) related to fixed assets acquisitions.
In 2015, litigation reserves amounted to $1,120 million of which
$895 million was in the Upstream, notably in Angola and Nigeria.
In 2015, other non-current liabilities mainly include debts (whose
maturity is more than one year) related to fixed assets acquisitions.
In 2014, 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 $32 million debt related to
the acquisition of an interest in the liquids-rich area of the Utica
shale play.
260
TOTAL. Registration Document 2016
Note 12 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
Changes in provisions and other non-current liabilities
Changes in provisions and other non-current liabilities are as follows:
(M$) As of Allowances Reversals Currency Other As of
January 1, translation December 31,
adjustment
2016 17,502 1,569 (1,268) (484) (473) 16,846
of which asset retirement obligations
(accretion for allowances) 523 (502)
of which environmental contingencies
(Marketing & Services, Refining & Chemicals) 29 (82)
of which restructuring of activities 25 (68)
2015 17,545 1,280 (1,236) (958) 871 17,502
of which asset retirement obligations
(accretion for allowances) 513 (566)
of which environmental contingencies
(Marketing & Services, Refining & Chemicals) 105 (95)
of which restructuring of activities 134 (60)
2014 17,517 1,463 (1,029) (1,228) 822 17,545
of which asset retirement obligations
(accretion for allowances) 543 (440)
of which environmental contingencies
(Marketing & Services, Refining & Chemicals) 69 (98)
of which restructuring of activities 38 (80)
Changes in the asset retirement obligation
Accounting policies
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.
The discount rate used in 2016 for the valuation of asset retirement
obligation is 4.5% as in 2015 and 2014 (the expenses are
estimated at current currency values with an inflation rate of 2%).
A decrease of 0.5% of this rate would increase the asset retirement
obligation by $918 million, with a corresponding impact in tangible
Changes in the asset retirement obligation are as follows:
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. Given
the long term nature of expenditures related to our asset retirement
obligations, the rate is determined by reference to the high quality
rates for AA-rated Corporate bonds on the USD area for a long-term
horizon. The increase of the provision due to the passage of time is
recognized as “Other financial expense”.
assets, and with a negative impact of approximately $94 million on
the following years net income. Conversely, an increase of 0.5%
would have a nearly symmetrical impact compared to the effect of
the decrease of 0.5%.
(M$) As of Accretion Revision in New Spending on Currency Other As of
January 1, estimates obligations existing translation December 31,
obligations adjustment
2016 13,314 523 (558) 375 (502) (395) (92) 12,665
2015 13,121 513 685 271 (566) (676) (34) 13,314
2014 12,808 543 1,007 359 (440) (902) (254) 13,121
Registration Document 2016. TOTAL
261
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 12
12.2) 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.
Alitalia
In the Marketing & Services segment, a civil proceeding was initiated
in Italy, in 2013, against TOTAL S.A. and its subsidiary Total Aviazione
Italia Srl before the competent Italian civil court. The plaintiff claims
against TOTAL S.A., its subsidiary and other third parties, damages
that it estimates to be nearly €908 million. This proceeding follows
practices that had been condemned by the Italian competition
authority in 2006. The parties have exchanged preliminary findings.
The existence and the assessment of the alleged damages in this
procedure involving multiple defendants remain contested.
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.
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 having lapsed. The judgment of the Court of Appeal of
Paris is now final and binding following two decisions issued on
February 18, 2016 by the French Supreme Court to put an end to
this proceeding.
In connection with the same facts, and fifteen years after the
aforementioned exploration and production contract was rendered
null and void (“caduc”), a Russian company, which was held not to
be the contracting party to the contract, and two regions of the
Russian Federation that were not even parties to the contract,
launched an arbitration procedure against the aforementioned
former subsidiary of Elf Aquitaine that was liquidated in 2005,
claiming alleged damages of $22.4 billion. For the same reasons as
those successfully adjudicated by Elf Aquitaine against Blue Rapid
and the Russian Olympic Committee, the Group considers this
claim to be unfounded as a matter of law and fact.
The Group has lodged a criminal complaint to denounce the
fraudulent claim of which the Group believes it is a victim and, has
taken and reserved its rights to take other actions and measures to
defend its interests.
FERC
The Office of Enforcement of the U.S. Federal Energy Regulatory
Commission (FERC) began in 2015 an investigation in connection
with the natural gas trading activities in the United States of Total
Gas & Power North America, Inc. (TGPNA), a U.S. subsidiary of the
Group. The investigation covered transactions made by TGPNA
between June 2009 and June 2012 on the natural gas market.
TGPNA received a Notice of Alleged Violations from FERC on
September 21, 2015. On April 28, 2016, FERC issued an order to
show cause to TGPNA and two of its former employees, and to
TOTAL S.A. and Total Gas & Power Ltd., regarding the same facts.
A class action has been launched to seek damages from these
three companies.
TGPNA has cooperated in the investigation with the U.S. authorities
and contests the claims brought against it.
Yemen
Due to the security conditions in the vicinity of Balhaf, Yemen LNG,
in which the Group holds a stake of 39.62%, stopped its
commercial production and export of LNG in April 2015, when it
declared force majeure to its various stakeholders. The plant is in a
preservation mode.
262
TOTAL. Registration Document 2016
Note 13 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
13) Commitments and lease contracts
13.1) Commitments and contingencies
As of December 31, 2016
(M$)
Maturity and installments
Total
Less than Between 1 More than
5 years
1 year and 5 years
Non-current debt obligations net of hedging instruments (Note 15) 41,848 - 18,449 23,399
Current portion of non-current debt obligations net of hedging instruments (Note 15) 4,614 4,614 - -
Finance lease obligations (Note 13.2) 319 8 103 208
Asset retirement obligations (Note 12) 12,665 685 2,269 9,711
Contractual obligations recorded in the balance sheet 59,446 5,307 20,821 33,318
Operating lease obligations (Note 13.2) 6,478 1,582 2,953 1,943
Purchase obligations 105,208 10,898 20,570 73,740
Contractual obligations not recorded in the balance sheet 111,686 12,480 23,523 75,683
Total of contractual obligations 171,132 17,787 44,344 109,001
Guarantees given for excise taxes 1,887 1,740 58 89
Guarantees given against borrowings 14,666 215 664 13,787
Indemnities related to sales of businesses 375 158 59 158
Guarantees of current liabilities 391 89 99 203
Guarantees to customers / suppliers 3,997 1,038 225 2,734
Letters of credit 1,457 1,215 81 161
Other operating commitments 3,592 1,319 409 1,864
Total of other commitments given 26,365 5,774 1,595 18,996
Mortgages and liens received 77 20 19 38
Sales obligations 82,756 7,331 21,356 54,069
Other commitments received 6,799 3,133 1,124 2,542
Total of commitments received 89,632 10,484 22,499 56,649
Of which commitments given relating to joint ventures 48,257 61 3,211 44,985
Of which commitments given relating to associates 21,959 603 3,265 18,091
Registration Document 2016. TOTAL
263
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 13
As of December 31, 2015
(M$)
Maturity and installments
Total
Less than Between 1 More than
5 years
1 year and 5 years
Non-current debt obligations net of hedging instruments (Note 15) 42,950 - 19,448 23,502
Current portion of non-current debt obligations net of hedging instruments (Note 15) 4,518 4,518 - -
Finance lease obligations (Note 13.2) 336 41 81 214
Asset retirement obligations (Note 12) 13,314 707 2,117 10,490
Contractual obligations recorded in the balance sheet 61,118 5,266 21,646 34,206
Operating lease obligations (Note 13.2) 5,973 1,430 2,825 1,718
Purchase obligations 123,968 14,728 24,612 84,628
Contractual obligations not recorded in the balance sheet 129,941 16,158 27,437 86,346
Total of contractual obligations 191,059 21,424 49,083 120,552
Guarantees given for excise taxes 2,982 2,604 57 321
Guarantees given against borrowings 12,872 3,553 547 8,772
Indemnities related to sales of businesses 371 109 103 159
Guarantees of current liabilities 501 102 229 170
Guarantees to customers / suppliers 4,405 1,364 194 2,847
Letters of credit 1,081 785 45 251
Other operating commitments 3,655 1,586 248 1,821
Total of other commitments given 25,867 10,103 1,423 14,341
Mortgages and liens received 359 23 7 329
Sales obligations 72,278 7,889 24,589 39,800
Other commitments received 7,158 2,602 1,601 2,955
Total of commitments received 79,795 10,514 26,197 43,084
Of which commitments given relating to joint ventures 46,178 544 2,925 42,709
As of December 31, 2014
(M$)
Maturity and installments
Total
Less than Between 1 More than
5 years
1 year and 5 years
Non-current debt obligations net of hedging instruments (Note 15) 43,844 - 18,458 25,386
Current portion of non-current debt obligations net of hedging instruments (Note 15) 4,411 4,411 - -
Finance lease obligations (Note 13.2) 358 40 98 220
Asset retirement obligations (Note 12) 13,121 651 2,430 10,040
Contractual obligations recorded in the balance sheet 61,734 5,102 20,986 35,646
Operating lease obligations (Note 13.2) 5,620 1,218 2,727 1,675
Purchase obligations 160,837 19,987 33,908 106,942
Contractual obligations not recorded in the balance sheet 166,457 21,205 36,635 108,617
Total of contractual obligations 228,191 26,307 57,621 144,263
Guarantees given for excise taxes 2,382 1,855 91 436
Guarantees given against borrowings 10,192 140 3,784 6,268
Indemnities related to sales of businesses 396 121 110 165
Guarantees of current liabilities 635 144 165 326
Guarantees to customers / suppliers 5,599 2,564 168 2,867
Letters of credit 1,552 1,138 3 411
Other operating commitments 4,762 1,455 2,700 607
Total of other commitments given 25,518 7,417 7,021 11,080
Mortgages and liens received 418 17 4 397
Sales obligations 110,949 9,287 33,629 68,033
Other commitments received 7,081 3,321 1,388 2,372
Total of commitments received 118,448 12,625 35,021 70,802
Of which commitments given relating to joint ventures 57,439 298 1,915 55,226
264
TOTAL. Registration Document 2016
Note 13 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
A) Contractual obligations
Guarantees given against borrowings
Debt obligations
“Non-current debt obligations” are included in the items “Non-
current financial debt” and “Non-current financial assets” of the
consolidated balance sheet. It includes the non-current portion of
swaps hedging bonds, and excludes non-current finance lease
obligations of $311 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 $8 million.
The information regarding contractual obligations linked to indebtedness
is presented in Note 15 to the Consolidated Financial Statements.
Lease contracts
The information regarding operating and finance leases is
presented in Note 13 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 Note 12 to the
Consolidated Financial Statements.
Purchase obligations
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: unconditional hydrocarbon
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 Refining & Chemicals segment.
B) Other commitments given
Guarantees given for excise taxes
These consist of guarantees given by the Group to customs
authorities in order to guarantee the payments of taxes and excise
duties on the importation of oil and gas products, mostly in France.
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
guarantees. As of December 31, 2016, the maturities of these
guarantees are up to 2043.
As of December 31, 2016, the guarantees provided by TOTAL S.A.
in connection with the financing of the Ichthys LNG project
amounted to $7,800 million.
Guarantees given against borrowings also include the guarantee
given in 2008 by TOTAL S.A. in connection with the financing
of the Yemen LNG project for an amount of $551 million and the
guarantee given in 2016 by TOTAL S.A. in connection with the
financing of the Yamal LNG project for an amount of $3,147 million.
In 2015, TOTAL S.A. has confirmed and extended guarantees
for TOTAL Refining SAUDI ARABIA SAS shareholders’ advances
for an amount of $1,013 million. As of December 31, 2016, the
guarantees amount to $1,230 million.
Indemnities related to sales of businesses
In the ordinary course of business, the Group executes contracts
involving standard indemnities for the 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.
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 accepted and 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
Sales obligations
These amounts represent binding obligations under contractual
agreements to sell goods, including in particular unconditional
hydrocarbon sales contracts (except where an active, highly-liquid
market exists and when the volumes are expected to be re-sold
shortly after purchase).
Registration Document 2016. TOTAL
265
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 13
13.2) Lease contracts
Accounting principles
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 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.
The Group leases real estate, retail stations, ships, and other equipment (see Note 7 to the Consolidated Financial Statements).
The future minimum lease payments on operating and finance leases to which the Group is committed are as follows:
For the year ended December 31, 2016
(M$) Operating leases Finance leases
2017 1,582 24
2018 1,054 26
2019 777 44
2020 687 27
2021 435 25
2022 and beyond 1,943 247
Total minimum payments 6,478 393
Less financial expenses (74)
Nominal value of contracts 319
Less current portion of finance lease contracts (8)
Outstanding liability of finance lease contracts 311
For the year ended December 31, 2015
(M$) Operating leases Finance leases
2016 1,430 57
2017 1,049 23
2018 784 23
2019 550 23
2020 442 23
2021 and beyond 1,718 242
Total minimum payments 5,973 391
Less financial expenses (55)
Nominal value of contracts 336
Less current portion of finance lease contracts (41)
Outstanding liability of finance lease contracts 295
266
TOTAL. Registration Document 2016
Notes 13, 14 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
For the year ended December 31, 2014
(M$) Operating leases Finance leases
2015 1,218 61
2016 978 58
2017 768 19
2018 590 19
2019 391 19
2020 and beyond 1,675 260
Total minimum payments 5,620 436
Less financial expenses (78)
Nominal value of contracts 358
Less current portion of finance lease contracts (40)
Outstanding liability of finance lease contracts 318
Net rental expense incurred under operating leases for the year ended December 31, 2016 is $1,629 million (against $1,282 million in 2015
and $1,091 million in 2014).
14) Financial assets and liabilities analysis per instrument class and strategy
The financial assets and liabilities disclosed in the balance sheet are detailed as follows:
As of December 31, 2016
(M$)
Financial instruments related to financing and operational activities
Amortized
cost
Fair value
Assets / (Liabilities)
Available
for sale (a)
Held for
trading
Financial Hedging of
financial
debt
debt (b)
Cash flow
hedge
Net
investment
hedge and
other
Total
Fair value
Other
financial
instruments
Amortized
cost
Equity affiliates: loans
4,718
-
Other investments - 1,133 - - - - - - 1,133 1,133
4,718
4,718
-
-
-
-
-
Non-current financial assets - - 63 - 716 129 - - 908 908
Other non-current assets 3,048 - - - - - - - 3,048 3,048
Accounts receivable, net (c) - - - - - - - 12,213 12,213 12,213
Other operating receivables - - 2,425 - - 4 - 7,789 10,218 10,218
Current financial assets 4,413 - 94 - 41 - - - 4,548 4,548
Cash and cash equivalents - - - - - - - 24,597 24,597 24,597
Total financial assets 12,179 1,133 2,582 - 757 133 - 44,599 61,383 61,383
Total non-financial assets - - - - - - - - 169,595 -
Total assets - - - - - - - - 230,978 -
Non-current financial debt (11,188) - (5) (28,223) (3,007) (644) - - (43,067) (44,168)
Accounts payable (c) - - - - - - - (23,227) (23,227) (23,227)
Other operating liabilities - - (2,001) - - (107) - (7,508) (9,616) (9,616)
Current borrowings (9,700) - - (4,220) - - - - (13,920) (13,920)
Other current financial liabilities - - (115) - (212) - - - (327) (327)
Total financial liabilities (20,888) - (2,121) (32,443) (3,219) (751) - (30,735) (90,157) (91,258)
Total non-financial liabilities - - - - - - - - (140,821) -
Total liabilities - - - - - - - - (230,978) -
(a) Financial assets available for sale are measured at their fair value except for unlisted securities (see Note 8 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 15 to the Consolidated Financial Statements).
(c) The impact of offsetting on accounts receivable, net is $(1,828) million and $+1,828 million on accounts payable.
Registration Document 2016. TOTAL
267
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 14
As of December 31, 2015
(M$)
Financial instruments related to financing and operational activities
Amortized
cost
Fair value
Assets / (Liabilities)
Available
for sale (a)
Held for
trading
Financial Hedging of
financial
debt
debt (b)
Cash flow
hedge
Net
investment
hedge and
other
Total
Fair value
Other
financial
instruments
Amortized
cost
Equity affiliates: loans
4,378
-
-
-
-
-
-
-
4,378
4,378
Other investments - 1,241 - - - - - - 1,241 1,241
Non-current financial assets - - - - 1,075 144 - - 1,219 1,219
Other non-current assets 3,407 - - - - - - - 3,407 3,407
Accounts receivable, net (c) - - - - - - - 10,629 10,629 10,629
Other operating receivables - - 3,379 - - 9 - 7,521 10,909 10,909
Current financial assets 5,858 - 112 - 220 - - - 6,190 6,190
Cash and cash equivalents - - - - - - - 23,269 23,269 23,269
Total financial assets 13,643 1,241 3,491 - 1,295 153 - 41,419 61,242 61,242
Total non-financial assets - - - - - - - - 163,242 -
Total assets - - - - - - - - 224,484 -
Non-current financial debt (7,810) - - (33,762) (2,891) (1) - - (44,464) (45,294)
Accounts payable (c) - - - - - - - (20,928) (20,928) (20,928)
Other operating liabilities - - (1,609) - - (103) - (8,202) (9,914) (9,914)
Current borrowings (8,230) - - (4,258) - - - - (12,488) (12,488)
Other current financial liabilities - - (44) - (127) - - - (171) (171)
Total financial liabilities (16,040) - (1,653) (38,020) (3,018) (104) - (29,130) (87,965) (88,795)
Total non-financial liabilities - - - - - - - - (136,519) -
Total liabilities - - - - - - - - (224,484) -
(a) Financial assets available for sale are measured at their fair value except for unlisted securities (see Note 8 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 15 to the Consolidated Financial Statements).
(c) The impact of offsetting on accounts receivable, net is $(1,044) million and $+1,044 million on accounts payable.
268
TOTAL. Registration Document 2016
Note 14 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
As of December 31, 2014
(M$)
Financial instruments related to financing and operational activities
Amortized
cost
Fair value
Assets / (Liabilities)
Available
for sale (a)
Held for
trading
Financial Hedging of
financial
debt
debt (b)
Cash flow
hedge
Net
investment
hedge and
other
Total
Fair value
Other
financial
instruments
Amortized
cost
Equity affiliates: loans
4,626
-
-
-
-
-
-
-
4,626
4,626
Other investments - 1,399 - - - - - - 1,399 1,399
Non-current financial assets - - - - 1,084 235 - - 1,319 1,319
Other non-current assets 3,326 - - - - - - - 3,326 3,326
Accounts receivable, net (c) - - - - - - - 15,704 15,704 15,704
Other operating receivables - - 2,502 - - 7 - 8,283 10,792 10,792
Current financial assets 469 - 364 - 460 - - - 1,293 1,293
Cash and cash equivalents - - - - - - - 25,181 25,181 25,181
Total financial assets 8,421 1,399 2,866 - 1,544 242 - 49,168 63,640 63,640
Total non-financial assets - - - - - - - - 166,158 -
Total assets - - - - - - - - 229,798 -
Non-current financial debt (7,179) - - (37,355) (944) (3) - - (45,481) (46,472)
Accounts payable (c) - - - - - - - (24,150) (24,150) (24,150)
Other operating liabilities - - (1,073) - - (4) - (6,858) (7,935) (7,935)
Current borrowings (6,241) - - (4,701) - - - - (10,942) (10,942)
Other current financial liabilities - - (47) - (133) - - - (180) (180)
Total financial liabilities (13,420) - (1,120) (42,056) (1,077) (7) - (31,008) (88,688) (89,679)
Total non-financial liabilities - - - - - - - - (141,110) -
Total liabilities - - - - - - - - (229,798) -
(a) Financial assets available for sale are measured at their fair value except for unlisted securities (see Note 8 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 15 to the Consolidated Financial Statements).
(c) The impact of offsetting on accounts receivable, net is $(1,970) million and $+1,970 million on accounts payable.
Registration Document 2016. TOTAL
269
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 15
15) Financial structure and financial costs
15.1) Financial debt and related financial instruments
A) Non-current financial debt and related financial instruments
As of December 31, 2016
(M$) Secured Unsecured Total
(Assets) / Liabilities
Non-current financial debt 572 42,495 43,067
of which hedging instruments of non-current financial debt (liabilities) - 3,651 3,651
Non-current financial assets - (908) (908)
of which hedging instruments of non-current financial debt (assets) - (845) (845)
Non-current financial debt and related financial instruments 572 41,587 42,159
Bonds after fair value hedge - 29,147 29,147
Fixed rate bonds and bonds after cash flow hedge - 10,315 10,315
Other floating rate debt 76 1,291 1,367
Other fixed rate debt 185 892 1,077
Financial lease obligations 311 - 311
Non-current instruments held for trading - (58) (58)
Non-current financial debt and related financial instruments 572 41,587 42,159
As of December 31, 2015
(M$) Secured Unsecured Total
(Assets) / Liabilities
Non-current financial debt 655 43,809 44,464
of which hedging instruments of non-current financial debt (liabilities) - 2,891 2,891
Non-current financial assets - (1,219) (1,219)
of which hedging instruments of non-current financial debt (assets) - (1,219) (1,219)
Non-current financial debt and related financial instruments 655 42,590 43,245
Bonds after fair value hedge - 34,435 34,435
Fixed rate bonds and bonds after cash flow hedge - 6,494 6,494
Other floating rate debt 34 1,110 1,144
Other fixed rate debt 326 551 877
Financial lease obligations 295 - 295
Non-current instruments held for trading - - -
Non-current financial debt and related financial instruments 655 42,590 43,245
As of December 31, 2014
(M$) Secured Unsecured Total
(Assets) / Liabilities
Non-current financial debt 798 44,683 45,481
of which hedging instruments of non-current financial debt (liabilities) - 944 944
Non-current financial assets - (1,319) (1,319)
of which hedging instruments of non-current financial debt (assets) - (1,319) (1,319)
Non-current financial debt and related financial instruments 798 43,364 44,162
Bonds after fair value hedge - 36,558 36,558
Fixed rate bonds and bonds after cash flow hedge - 6,155 6,155
Other floating rate debt 265 395 660
Other fixed rate debt 215 256 471
Financial lease obligations 318 - 318
Non-current instruments held for trading - - -
Non-current financial debt and related financial instruments 798 43,364 44,162
270
TOTAL. Registration Document 2016
Note 15 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
The fair value of bonds, as of December 31, 2016, after taking into account currency and interest rates swaps, is detailed as follows:
Bonds after fair Currency of Fair value Fair value Fair value Range Range of initial
value hedge issuance after after after of current current rate before
hedging as of hedging as of hedging as of maturities hedging instruments
December 31, December 31, December 31,
(M$) 2016 2015 20 14
Bond USD 11,036 13,754 16,385 2017-2024 1.000%-3.750%
Bond USD 1,385 2,385 2,385 2018-2020 USLIBOR 3 months + 0.03%
– USLIBOR 3 months + 0.75%
Bond CHF 1,441 1,910 2,161 2018-2027 0.510%-3.135%
Bond NZD 251 251 251 2019-2020 4.750%-5.000%
Bond AUD 1,211 1,360 1,689 2017-2025 3.750%-4.875%
Bond EUR 10,958 11,365 12,127 2017-2044 0.250%-4.875%
Bond EUR 1,638 1,638 1,638 2020 EURIBOR 3 months + 0.30%
– EURIBOR 3 months + 0.31%
Bond CAD 289 289 288 2017-2020 2.000%-2.375%
Bond GBP 2,215 2,225 1,662 2017-2022 2.250%-4.250%
Bond GBP 469 469 468 2019 GBLIB3M + 0.30%
Bond NOK 355 566 566 2017-2018 2.250%-2.500%
Bond HKD 392 394 213 2019-2026 2.920%-4.180%
Bond SEK 95 95
Current portion (less than one year) (4,391) (4,164) (4,068)
Total Principal
Financing Entities (a) + (b) + (c) 27,249 32,537 35,860
TOTAL S.A. (d) 1,200 1,200 2022 0.500%
Other Consolidated Subsidiaries 698 698 698
Total bonds after fair value hedge 29,147 34,435 36,558
Bonds after cash flow hedge Currency of Fair value Fair value Fair value Range Range of initial
and fixed rate bonds issuance after after after of current current rate before
hedging as of hedging as of hedging as of maturities hedging instruments
December 31, December 31, December 31,
(M$) 2016 2015 20 14
Bond EUR 5,248 2,077 1,986 2019-2026 1.365%-5.125%
Bond USD 4,250 3,750 3,750 2020-2023 2.750%-4.450%
Bond CNY 153 164 172 2018 3.750%
Current portion (less than one year)
Total Principal
Financing Entities (a) + (b) + (c) 9,651 5,991 5,908
Other Consolidated Subsidiaries 664 503 247
Total bonds after cash flow hedge
and fixed rate bonds 10,315 6,494 6,155
All debt securities issued through the following subsidiaries are fully and unconditionally guaranteed by TOTAL S.A. as to payment of principal, premium, if any, interest and any other amounts due:
(a) TOTAL CAPITAL is a wholly-owned subsidiary of TOTAL S.A. It acts as a financing vehicle for the Group.
(b) TOTAL CAPITAL CANADA Ltd. is a wholly-owned subsidiary of TOTAL S.A. It acts as a financing vehicle for the activities of the Group in Canada.
(c) TOTAL CAPITAL INTERNATIONAL is a wholly-owned subsidiary of TOTAL S.A. It acts as a financing vehicle for the Group.
(d) Debt financing of $1.2 billion through a structure combining the issue of cash-settled convertible bonds with the purchase of cash-settled call options to hedge TOTAL’s exposure to the
exercise of the conversion rights under the bonds.
Registration Document 2016. TOTAL
271
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 15
Loan repayment schedule (excluding current portion)
As of December 31, 2016 Non-current Of which hedging Non-current Of which hedging Non-current %
(M$) financial debt instruments financial instruments financial debt -
of non-current assets of non-current net of hedging
financial debt
financial debt instruments
(liabilities) (assets)
2018 4,572 249 (252) (235) 4,320 10%
2019 5,812 327 (110) (104) 5,702 14%
2020 4,956 564 (4) - 4,952 12%
2021 3,609 237 (31) (7) 3,578 8%
2022 and beyond 24,118 2,274 (511) (499) 23,607 56%
Total 43,067 3,651 (908) (845) 42,159 100%
As of December 31, 2015 Non-current Of which hedging Non-current Of which hedging Non-current %
(M$) financial debt instruments financial instruments financial debt -
of non-current assets of non-current net of hedging
financial debt
financial debt instruments
(liabilities) (assets)
2017 4,729 213 (127) (127) 4,602 11%
2018 4,803 218 (383) (383) 4,420 10%
2019 5,716 124 (174) (174) 5,542 13%
2020 4,965 434 - - 4,965 11%
2021 and beyond 24,251 1,902 (535) (535) 23,716 55%
Total 44,464 2,891 (1,219) (1,219) 43,245 100%
As of December 31, 2014 Non-current Of which hedging Non-current Of which hedging Non-current %
(M$) financial debt instruments financial instruments financial debt -
of non-current assets of non-current net of hedging
financial debt
financial debt instruments
(liabilities) (assets)
2016 4,987 73 (194) (194) 4,793 11%
2017 4,689 132 (142) (142) 4,547 10%
2018 4,784 108 (333) (333) 4,451 10%
2019 4,973 62 (208) (208) 4,765 11%
2020 and beyond 26,048 569 (442) (442) 25,606 58%
Total 45,481 944 (1,319) (1,319) 44,162 100%
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$) 2016 % 2015 % 2014 %
U.S. dollar 39,963 95% 40,337 93% 41,369 94%
Euro 977 2% 1,681 4% 2,428 5%
Norwegian krone 928 2% 907 2% - 0%
Other currencies 291 1% 320 1% 365 1%
Total 42,159 100% 43,245 100% 44,162 100%
As of December 31,
(M$) 2016 % 2015 % 2014 %
Fixed rate 11,703 28% 7,666 18% 6,944 16%
Floating rate 30,456 72% 35,579 82% 37,218 84%
Total 42,159 100% 43,245 100% 44,162 100%
272
TOTAL. Registration Document 2016
Note 15 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
B) Current financial assets and liabilities
Current borrowings consist mainly of commercial paper or treasury bills or drawings on bank loans. These instruments bear interest at rates
that are close to market rates.
As of December 31,
(M$)
(Assets)/ Liabilities 2016 2015 20 14
Current financial debt(a) 9,469 7,836 6,164
Current portion of non-current financial debt 4,451 4,652 4,778
Current borrowings (Note 14) 13,920 12,488 10,942
Current portion of hedging instruments of debt (liabilities) 212 127 133
Other current financial instruments (liabilities) 115 44 47
Other current financial liabilities (Note 14) 327 171 180
Current deposits beyond three months (4,413) (5,858) (469)
Current portion of hedging instruments of debt (assets) (41) (220) (460)
Other current financial instruments (assets) (94) (112) (364)
Current financial assets (Note 14) (4,548) (6,190) (1,293)
Current borrowings and related financial assets and liabilities, net 9,699 6,469 9,829
(a) As of December 31, 2016, December 31, 2015 and December 31, 2014, the current financial debt includes a commercial paper program in Total Capital Canada Ltd. Total Capital
Canada Ltd. is a wholly-owned subsidiary of TOTAL S.A. It acts as a financing vehicle for the activities of the Group in Canada. Its debt securities are fully and unconditionally
guaranteed by TOTAL S.A. as to payment of principal, premium, if any, interest and any other amounts due.
C) Cash flow from (used in) financing activities
Changes in non-current financial debt are detailed in the following table as a net value:
For the year ended December 31,
(M$) 2016 2015 2014
Issuance of non-current debt 4,096 4,468 15,874
Repayment of non-current debt (520) (302) (88)
Net amount 3,576 4,166 15,786
D) Cash and cash equivalents
Accounting policies
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”.
Changes in current financial assets and liabilities are included in the
financing activities section of the Consolidated Statement of Cash Flows.
Cash and cash equivalents are detailed as follows:
For the year ended December 31,
(M$) 2016 2015 2014
Cash 12,129 12,291 13,874
Cash equivalents 12,468 10,978 11,307
Total 24,597 23,269 25,181
Cash equivalents are mainly composed of deposits less than three months deposited in government institutions or deposit banks selected in
accordance with strict criteria.
As of December 31, 2016, the cash and cash equivalents include $1,272 million subject to restrictions particularly due to a regulatory
framework or due to the fact they are owned by affiliates located in countries with exchange controls.
Registration Document 2016. TOTAL
273
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 15
E) Net-debt-to-equity ratio
For its internal and external communication needs, the Group calculates a debt ratio by dividing its net financial debt by equity. Adjusted
shareholders’ equity for the year ended December 31, 2016 is calculated after payment of a 2016 dividend of €2.45 per share, subject to
approval by the Shareholders’ Meeting on May 26, 2017.
The net-debt-to-equity ratio is calculated as follows:
As of December 31,
(M$)
(Assets)/ Liabilities 2016 2015 2014
Current borrowings 13,920 12,488 10,942
Other current financial liabilities 327 171 180
Current financial assets (4,548) (6,190) (1,293)
Net financial assets and liabilities held for sale or exchange (140) 141 (56)
Non-current financial debt 43,067 44,464 45,481
Non-current financial assets (908) (1,219) (1,319)
Cash and cash equivalents (24,597) (23,269) (25,181)
Net financial debt 27,121 26,586 28,754
Shareholders’ equity – Group share 98,680 92,494 90,330
Distribution of the income based on existing shares at the closing date (1,581) (1,545) (1,686)
Non-controlling interests 2,894 2,915 3,201
Adjusted shareholders’ equity 99,993 93,864 91,845
Net-debt-to-equity ratio 27.1% 28.3% 31.3%
15.2) Fair value of financial instruments (excluding commodity contracts)
Accounting policies
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 other comprehensive income and are
recognized in the balance sheet in the accounts corresponding to their
nature, according to the risk management strategy. The derivative
instruments used by the Group are the following:
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”.
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 assets under “Non-current financial
assets” or in 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 Other comprehensive
Income 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 assets under “Non-current financial assets” or in
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 reclassified to the income statement
only when the hedged transaction affects profit or loss.
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
274
TOTAL. Registration Document 2016
Note 15 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
hedges” and changes in fair value are recorded in other comprehensive
income for the effective portion of the hedging and in the statement
of income for the ineffective portion of the hedging. Gains or losses
on hedging instruments previously recorded in equity, are reclassified
to the statement of income in the same period as the total or partial
disposal of the foreign activity.
The fair value of these instruments is recorded under “Current
financial assets” or “Other current financial liabilities”.
Commitments to purchase shares held by non-controlling
interests (put options written on minority interests)
Put options granted to non-controlling-interest shareholders are
initially recognized as financial liabilities at the present value of the
exercise price of the options with a corresponding reduction in
shareholders’ equity. The financial liability is subsequently measured
at fair value at each balance sheet date in accordance with contractual
clauses and any variation is recorded in the statement of income
(cost of debt).
A) Impact on the statement of income per nature of financial instruments
Assets and liabilities from financing activities
The impact on the statement of income of financing assets and
liabilities is detailed as follows:
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.
For the year ended December 31,
(M$) 2016 2015 2014
Loans and receivables 82 121 135
Financing liabilities and associated hedging instruments (1,111) (965) (750)
Fair value hedge (ineffective portion) 3 (1) 2
Assets and liabilities held for trading (78) (28) (27)
Impact on the cost of net debt (1,104) (873) (640)
B) Impact of the hedging strategies
Fair value hedge
The impact on the statement of income of the bond hedging instruments which is recorded in the item “Financial interest on debt” in the
consolidated statement of income is detailed as follows:
For the year ended December 31,
(M$) 2016 2015 2014
Revaluation at market value of bonds 693 2,133 443
Swap hedging of bonds (690) (2,134) (441)
Ineffective portion of the fair value hedge 3 (1) 2
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.
Registration Document 2016. TOTAL
275
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 15
Net investment hedge
These instruments are recorded directly in other comprehensive income under “Currency translation adjustments”. The variations of the period
are detailed in the table below:
For the year ended December 31, As of Variations As of
(M$) January 1, December 31,
2016 (674) 16 (658)
2015 (511) (163) (674)
2014 (367) (144) (511)
As of December 31, 2016, 2015 and 2014 the Group had no open forward contracts under these hedging instruments.
Cash flow hedge
The impact on the statement of income and other comprehensive income of the hedging instruments qualified as cash flow hedges is
detailed as follows:
For the year ended December 31,
(M$) 2016 2015 2014
Profit (Loss) recorded in equity during the period 308 (185) 97
Amount reclassified from equity to the income statement during the period (52) (205) (295)
As of December 31, 2016, 2015 and 2014, the ineffective portion of these financial instruments is nil.
C) Maturity of derivative instruments
The maturity of the notional amounts of derivative instruments, excluding the commodity contracts, is detailed in the following table:
For the year ended December 31, 2016 Fair Notional
(M$) value value value
2017
Assets / (Liabilities)
Fair Notional value schedule
2018 2018 2019 2020 2021 2022
and after and after
Fair value hedge
Swaps hedging fixed-rates bonds (assets) 41 2,213 716 7,618 - - - - -
Swaps hedging fixed-rates bonds (liabilities) (212) 2,175 (3,007) 20,549 - - - - -
Total swaps hedging fixed-rates bonds (171) 4,388 (2,291) 28,167 4,097 3,172 3,346 1,945 15,607
Cash flow hedge
Swaps hedging fixed-rates bonds (assets) - - 129 3,457 - - - - -
Swaps hedging fixed-rates bonds (liabilities) - - (644) 5,679 - - - - -
Total swaps hedging fixed-rates bonds - - (515) 9,136 - 969 - - 8,167
Forward exchange contracts related
to operational activites (assets) 3 30 1 13 - - - - -
Forward exchange contracts related
to operational activites (liabilities) (26) 296 (5) 80 - - - - -
Total swaps hedging fixed-rates bonds (23) 326 (4) 93 93 - - - -
Held for trading
Other interest rate swaps (assets) 7 16,582 35 1,859 - - - - -
Other interest rate swaps (liabilities) (5) 24,642 (4) 603 - - - - -
Total other interest rate swaps 2 41,224 31 2,462 1,291 - - 1,000 171
Currency swaps and forward exchange contracts (assets) 87 6,714 28 578 - - - - -
Currency swaps and forward exchange contracts (liabilities) (110) 3,803 (1) 6 - - - - -
Total currency swaps and forward exchange contracts (23) 10,517 27 584 322 137 80 43 2
Notional amounts set the levels of commitment and are indicative nor of a contingent gain or loss neither of a related debt.
276
TOTAL. Registration Document 2016
Note 15 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
For the year ended December 31, 2015 Fair Notional
(M$) value value value
2016
Assets / (Liabilities)
Fair Notional value schedule
2017 2017 2018 2019 2020 2021
and after and after
Fair value hedge
Swaps hedging fixed-rates bonds (assets) 220 2,709 1,075 11,701 - - - - -
Swaps hedging fixed-rates bonds (liabilities) (127) 579 (2,891) 21,835 - - - - -
Total swaps hedging fixed-rates bonds 93 3,288 (1,816) 33,536 4,410 4,129 3,190 3,346 18,461
Cash flow hedge
Swaps hedging fixed-rates bonds (assets) - - 144 2,221 - - - - -
Swaps hedging fixed-rates bonds (liabilities) - - (1) 36 - - - - -
Total swaps hedging fixed-rates bonds - - 143 2,257 - - 969 - 1,288
Forward exchange contracts related
to operational activites (assets) 9 145 - - - - - - -
Forward exchange contracts related
to operational activites (liabilities) (61) 497 (42) 376 - - - - -
Total forward exchange contracts related
to operational activites (52) 642 (42) 376 296 80 - - -
Held for trading
Other interest rate swaps (assets) 7 17,220 1 90 - - - - -
Other interest rate swaps (liabilities) (9) 26,914 - 59 - - - - -
Total other interest rate swaps (2) 44,134 1 149 82 67 - - -
Currency swaps and forward exchange contracts (assets) 82 5,476 22 627 - - - - -
Currency swaps and forward exchange contracts (liabilities) (35) 3,970 - 33 - - - - -
Total currency swaps and forward exchange contracts 47 9,446 22 660 290 226 58 41 45
Notional amounts set the levels of commitment and are indicative nor of a contingent gain or loss neither of a related debt.
For the year ended December 31, 2014 Fair Notional
(M$) value value value
2015
Assets / (Liabilities)
Fair Notional value schedule
2016 2016 2017 2018 2019 2020
and after and after
Fair value hedge
Swaps hedging fixed-rates bonds (assets) 460 4,163 1,084 14,946 - - - - -
Swaps hedging fixed-rates bonds (liabilities) (133) 1,004 (944) 21,546 - - - - -
Total swaps hedging fixed-rates bonds 327 5,167 140 36,492 3,505 4,490 5,018 3,255 20,224
Cash flow hedge
Swaps hedging fixed-rates bonds (assets) - - 235 2,221 - - - - -
Swaps hedging fixed-rates bonds (liabilities) - - (3) 247 - - - - -
Total swaps hedging fixed-rates bonds - - 232 2,468 - - - 969 1,499
Forward exchange contracts related
to operational activites (assets) 7 146 - - - - - - -
Forward exchange contracts related
to operational activites (liabilities) (4) 45 - - - - - - -
Total forward exchange contracts related
to operational activites 3 191 - - - - - - -
Held for trading
Other interest rate swaps (assets) 8 14,359 2 178 - - - - -
Other interest rate swaps (liabilities) (8) 11,361 - 82 - - - - -
Total other interest rate swaps - 25,720 2 260 109 83 68 - -
Currency swaps and forward exchange contracts (assets) 330 14,256 24 328 - - - - -
Currency swaps and forward exchange contracts (liabilities) (33) 1,850 (6) 120 - - - - -
Total currency swaps and forward exchange contracts 297 16,106 18 448 308 89 45 1 5
Notional amounts set the levels of commitment and are indicative nor of a contingent gain or loss neither of a related debt.
Registration Document 2016. TOTAL
277
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 15
D) Fair value hierarchy
Accounting policies
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.
Estimations of fair value, 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:
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.
Other financial instruments
The fair value of the interest rate swaps and of FRA’s (Forward Rate
Agreements) 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 negotiated 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.
The fair value hierarchy for financial instruments, excluding commodity contracts, is as follows:
As of December 31, 2016 Quoted prices in Prices based
(M$) active markets on observable on non
for identical assets data observable
(level 1) (level 2) data
(level 3)
Prices based Total
Fair value hedge instruments - (2,462) - (2,462)
Cash flow hedge instruments - (542) - (542)
Assets and liabilities held for trading - 37 - 37
Assets available for sale 54 - - 54
Total 54 (2,967) - (2,913)
As of December 31, 2015 Quoted prices in Prices based
(M$) active markets on observable on non
for identical assets data observable
(level 1) (level 2) data
(level 3)
Prices based Total
Fair value hedge instruments - (1,723) - (1,723)
Cash flow hedge instruments - 49 - 49
Assets and liabilities held for trading - 68 - 68
Assets available for sale 59 - - 59
Total 59 (1,606) - (1,547)
As of December 31, 2014 Quoted prices in Prices based
(M$) active markets on observable on non
for identical assets data observable
(level 1) (level 2) data
(level 3)
Prices based Total
Fair value hedge instruments - 467 - 467
Cash flow hedge instruments - 235 - 235
Assets and liabilities held for trading - 317 - 317
Assets available for sale 84 - - 84
Total 84 1,019 - 1,103
278
TOTAL. Registration Document 2016
Note 15 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
15.3) Financial risks management
Financial markets related risks
Interest rate risk on non-current debt
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
mainly interest rate and currency swaps. The Group may also
occasionally use futures contracts and options. These operations
and their accounting treatment are detailed in Notes 14, 15.1 and
15.2 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 value risk on its commitments, in particular
for swaps set as part of bonds issuance, the Treasury Department
has concluded margin call contracts with significant counterparties.
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 (to 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.
The Group’s policy consists of incurring non-current debt at a
floating rate or at a fixed rate, depending on the interest rates at the
time of issue. Debt is incurred in dollars, in euros 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.
Currency exposure
The Group generally seeks to minimize the currency exposure of
each entity to its functional currency (primarily the dollar, the euro,
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, the
Group has a hedging policy of financing these assets in their
functional 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 15.1 to the Consolidated
Financial Statements is generally raised by the corporate treasury
entities either directly in dollars or in euros, or in other currencies
which are then exchanged for dollars or euros through swap issues
to appropriately match general corporate needs. The proceeds
from these debt issuances are loaned to affiliates whose accounts
are kept in dollars or in euros. 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 15.2 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.
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, 2016, 2015 and 2014.
Registration Document 2016. TOTAL
279
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 15
Change in fair value
due to a change in interest
rate by
Assets / (Liabilities) Carrying Estimated +10 basis -10 basis
(M$) amount fair value points points
As of December 31, 2016
Bonds (non-current portion, before swaps) (36,656) (37,757) 221 (221)
Swaps hedging fixed-rates bonds (liabilities) (3,651) (3,651) - -
Swaps hedging fixed-rates bonds (assets) 845 845 - -
Total swaps hedging fixed-rates bonds (assets and liabilities) (2,806) (2,806) (117) 117
Current portion of non-current debt after swap (excluding capital lease obligations) (4,614) (4,614) 5 (4)
Other interest rates swaps 33 33 7 (7)
Currency swaps and forward exchange contracts (23) (23) - -
As of December 31, 2015
Bonds (non-current portion, before swaps) (39,257) (40,087) 156 (156)
Swaps hedging fixed-rates bonds (liabilities) (2,891) (2,891) - -
Swaps hedging fixed-rates bonds (assets) 1,219 1,219 - -
Total swaps hedging fixed-rates bonds (assets and liabilities) (1,672) (1,672) (144) 144
Current portion of non-current debt after swap (excluding capital lease obligations) (4,518) (4,518) 5 (5)
Other interest rates swaps (1) (1) 8 (8)
Currency swaps and forward exchange contracts (26) (26) - -
As of December 31, 2014
Bonds (non-current portion, before swaps) (43,088) (44,079) 292 (286)
Swaps hedging fixed-rates bonds (liabilities) (944) (944) - -
Swaps hedging fixed-rates bonds (assets) 1,319 1,319 - -
Total swaps hedging fixed-rates bonds (assets and liabilities) 375 375 (153) 149
Current portion of non-current debt after swap (excluding capital lease obligations) (4,411) (4,411) 5 (4)
Other interest rates swaps 2 2 3 (3)
Currency swaps and forward exchange contracts 318 318 - -
The impact of changes in interest rates on the cost of net debt before tax is as follows:
For the year ended December 31,
(M$) 2016 2015 2014
Cost of net debt (1,104) (873) (640)
Interest rate translation of:
+ 10 basis points (17) (20) (19)
-10 basis points 17 20 19
+ 100 basis points (172) (204) (193)
-100 basis points 172 204 193
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 euro and the ruble, and to a lesser extent, the
pound sterling, the Norwegian krone.
This sensitivity is reflected in the historical evolution of the currency translation adjustment recorded in the statement of changes in
consolidated shareholders’ equity which, over the course of the last three years, is essentially related to the fluctuation of the euro, the ruble
and the pound sterling and is set forth in the table below:
Dollar / Euro Dollar / Pound sterling Dollar / Ruble
exchange rates exchange rates exchange rates
December 31, 2016 0.95 0.81 61.00
December 31, 2015 0.92 0.67 74.10
December 31, 2014 0.82 0.64 59.58
280
TOTAL. Registration Document 2016
Note 15 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
As of December 31, 2016 Pound Other
(M$) Total Euro Dollar sterling Ruble Currencies
Shareholders’ equity at historical exchange rate 112,551 38,645 51,863 5,997 7,227 8,819
Currency translation adjustment before
net investment hedge (13,871) (6,845) - (1,978) (3,286) (1,762)
Net investment hedge – open instruments - - - - - -
Shareholders’ equity at exchange
rate as of December 31, 2016 98,680 31,800 51,863 4,019 3,941 7,057
As of December 31, 2015 Pound Other
(M$) Total Euro Dollar sterling Ruble Currencies
Shareholders’ equity at historical exchange rate 104,613 37,345 46,272 5,926 6,816 8,254
Currency translation adjustment before
net investment hedge (12,119) (5,337) - (1,145) (3,936) (1,701)
Net investment hedge – open instruments - - - - - -
Shareholders’ equity at exchange
rate as of December 31, 2015 92,494 32,008 46,272 4,781 2,880 6,553
As of December 31, 2014 Pound Other
(M$) Total Euro Dollar sterling Ruble Currencies
Shareholders’ equity at historical exchange rate 97,810 26,056 50,179 6,762 6,489 8,324
Currency translation adjustment before
net investment hedge (7,480) (2,290) - (894) (3,215) (1,081)
Net investment hedge – open instruments - - - - - -
Shareholders’ equity at exchange
rate as of December 31, 2014 90,330 23,766 50,179 5,868 3,274 7,243
Based on the 2016 financial statements, a conversion using rates different from + or – 10% for each of the currencies below would have the
following impact on shareholders equity and net income (Group share):
As of December 31, 2016 Pound
(M$) Euro sterling Ruble
Impact of an increase of 10% of exchange rates on:
– shareholders equity 3,180 402 394
– net income (Group share) 126 8 52
Impact of a decrease of 10% of exchange rates on:
– shareholders equity (3,180) (402) (394)
– net income (Group share) (126) (8) (52)
Stock market risk
The Group holds interests in a number of publicly-traded
companies (see Note 8 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, 2016, these lines of credit amounted
to $10,076 million, of which $10,076 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, 2016, the aggregate amount of the
principal confirmed lines of credit granted by international banks to
Group companies, including TOTAL S.A., was $11,164 million, of
which $10,724 million was unused. The lines of credit granted to
Group companies other than TOTAL S.A. are not intended to finance
the Group’s general needs; they are intended to finance either the
general needs of the borrowing subsidiary or a specific project.
Registration Document 2016. TOTAL
281
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 15
The following tables show the maturity of the financial assets and liabilities of the Group as of December 31, 2016, 2015 and 2014 (see Note 15.1
to the Consolidated Financial Statements).
As of December 31, 2016
(M$) Less than 1-2 years 2-3 years 3-4 years 4-5 years More than Total
Assets / (Liabilities) 1 year 5 years
Non-current financial debt
(notional value excluding interests) - (4,320) (5,702) (4,952) (3,578) (23,607) (42,159)
Current borrowings (13,920) - - - - - (13,920)
Other current financial liabilities (327) - - - - - (327)
Current financial assets 4,548 - - - - - 4,548
Assets and liabilities available
for sale or exchange 140 - - - - - 140
Cash and cash equivalents 24,597 - - - - - 24,597
Net amount before financial expense 15,038 (4,320) (5,702) (4,952) (3,578) (23,607) (27,121)
Financial expense on
non-current financial debt (799) (783) (682) (552) (465) (1,271) (4,552)
Interest differential on swaps (79) (56) (201) (253) (272) (910) (1,771)
Net amount 14,160 (5,159) (6,585) (5,757) (4,315) (25,788) (33,444)
As of December 31, 2015
(M$) Less than 1-2 years 2-3 years 3-4 years 4-5 years More than Total
Assets / (Liabilities) 1 year 5 years
Non-current financial debt
(notional value excluding interests) - (4,602) (4,420) (5,542) (4,965) (23,716) (43,245)
Current borrowings (12,488) - - - - - (12,488)
Other current financial liabilities (171) - - - - - (171)
Current financial assets 6,190 - - - - - 6,190
Assets and liabilities available
for sale or exchange (141) - - - - - (141)
Cash and cash equivalents 23,269 - - - - - 23,269
Net amount before financial expense 16,659 (4,602) (4,420) (5,542) (4,965) (23,716) (26,586)
Financial expense on
non-current financial debt (763) (813) (747) (663) (524) (1,104) (4,614)
Interest differential on swaps 131 171 48 (55) (126) (610) (441)
Net amount 16,027 (5,244) (5,119) (6,260) (5,615) (25,430) (31,641)
As of December 31, 2014
(M$) Less than 1-2 years 2-3 years 3-4 years 4-5 years More than Total
Assets / (Liabilities) 1 year 5 years
Non-current financial debt
(notional value excluding interests) - (4,793) (4,547) (4,451) (4,765) (25,606) (44,162)
Current borrowings (10,942) - - - - - (10,942)
Other current financial liabilities (180) - - - - - (180)
Current financial assets 1,293 - - - - - 1,293
Assets and liabilities available
for sale or exchange 56 - - - - - 56
Cash and cash equivalents 25,181 - - - - - 25,181
Net amount before financial expense 15,408 (4,793) (4,547) (4,451) (4,765) (25,606) (28,754)
Financial expense on
non-current financial debt (901) (833) (783) (718) (624) (1,960) (5,819)
Interest differential on swaps 369 167 (31) (127) (154) (790) (566)
Net amount 14,876 (5,459) (5,361) (5,296) (5,543) (28,356) (35,139)
282
TOTAL. Registration Document 2016
Note 15 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
The following table sets forth financial assets and liabilities related to operating activities as of December 31, 2016, 2015 and 2014 (see Note 14
of the Notes to the Consolidated Financial Statements).
As of December 31,
(M$)
Assets / (Liabilities) 2016 2015 2014
Accounts payable (23,227) (20,928) (24,150)
Other operating liabilities (9,616) (9,914) (7,935)
including financial instruments related to commodity contracts (2,077) (1,609) (1,073)
Accounts receivable, net 12,213 10,629 15,704
Other operating receivables 10,218 10,909 10,792
including financial instruments related to commodity contracts 2,425 3,379 2,502
Total (10,412) (9,304) (5,589)
These financial assets and liabilities mainly have a maturity date below one year.
Credit risk
Credit risk is defined as the risk of the counterparty to a contract failing to perform or pay the amounts due.
The Group is exposed to credit risks in its operating and financing activities. The Group’s maximum exposure to credit risk is partially related
to financial assets recorded on its balance sheet, including energy derivative instruments that have a positive market value.
The following table presents the Group’s maximum credit risk exposure:
As of December 31,
(M$)
Assets / (Liabilities) 2016 2015 2014
Loans to equity affiliates (Note 8) 4,718 4,378 4,626
Loans and advances (Note 6) 3,048 3,407 3,326
Non-current financial assets (Note 15.1) 908 1,219 1,319
Accounts receivable (Note 5) 12,213 10,629 15,704
Other operating receivables (Note 5) 10,218 10,909 10,792
Current financial assets (Note 15.1) 4,548 6,190 1,293
Cash and cash equivalents (Note 15.1) 24,597 23,269 25,181
Total 60,250 60,001 62,241
The valuation allowance on accounts receivable, other operating
receivables and on loans and advances is detailed in Notes 5 and 6
to the Consolidated Financial Statements.
Furthermore, in 2016 the Group conducted several operations of
reverse factoring for a value of $275 million and some operations of
stock disposal for a value of $366 million.
As part of its credit risk management related to operating and
financing activities, the Group has developed margining agreements
with certain counterparties. As of December 31, 2016, the net
margin call paid amounted to $2,605 million (against $124 million
paid as of December 31, 2015 and $1,437 million received as of
December 31, 2014).
The Group has established a number of programs for the sale of
receivables, without recourse, with various banks, primarily to
reduce its exposure to such receivables. As a result of these
programs the Group retains no risk of payment default after the
sale, but may continue to service the customer accounts as part of
a service arrangement on behalf of the buyer and is required to pay
to the buyer payments it receives from the customers relating to the
receivables sold. As of December 31, 2016, the net value of
receivables sold amounted to $5,369 million. The Group has
substantially transferred all the risks and rewards related to
receivables. No financial asset or liability remains recognized in the
consolidated balance sheet after the date of sale.
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 credit
limits and reviewing outstanding balances.
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.
Registration Document 2016. TOTAL
283
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 15
− Gas activities
Gas activities deal 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 authorizations.
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.
Refining & Chemicals segment
− Refining & Chemicals
Credit risk is primarily related to commercial receivables. Internal
procedures of Refining & Chemicals include rules for the
management of credit describing the fundamentals of internal
control in this domain. Each Business Unit implements the
procedures of the activity for managing and provisioning credit
risk according to 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,
- use of insurance policies or specific guarantees (letters of credit),
- regular monitoring and assessment of overdue accounts (aging
balance), including collection procedures,
- 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).
Counterparties are subject to credit assessment and approval
prior to any transaction being concluded. Regular reviews are
made for all active counterparties including a re-appraisal and
renewing of the granted credit limits. The limits of the
counterparties are assessed based on quantitative and
qualitative data regarding financial standing, together with the
review of any relevant third party and market information, such as
that provided by rating agencies and insurance companies.
− 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
arranged with financial institutions, international banks and
insurance groups selected in accordance with strict criteria.
The Trading & Shipping division applies 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.
Marketing & Services segment
− Marketing & Services
Internal procedures for the Marketing & Services 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 and procedures to
monitor customer risk are implemented (credit committees at the
subsidiary level, the creation of credit limits for corporate
customers, 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.
− New Energies
Internal procedures for the New Energies division include rules
on credit risk management. Procedures to monitor customer
risk are defined at the local level, especially for SunPower (rules
for the approval of credit limits, use of guarantees, monitoring
and assessment of the receivables portfolio, provisioning of
doubtful debts…).
284
TOTAL. Registration Document 2016
Note 16 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
16) Financial instruments related to commodity contracts
16.1) Financial instruments related to commodity contracts
Accounting policies
Financial instruments related to commodity contracts, including
crude oil, petroleum products, gas, and power 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.
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
when market data is 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.
As of December 31, 2016 Gross value Gross value Amounts Amounts Net balance Net balance Other Net Fair
(M$) before before offset offset sheet value sheet value amounts carrying value (b)
offsetting offsetting - assets (c) - liabilities (c) presented presented not offset amount
Assets / (Liabilities) - assets - liabilities - assets - liabilities
Crude oil, petroleum
products and freight
rates activities
Petroleum products, crude
oil and freight rate swaps 464 (266) (140) 140 324 (126) - 198 198
Forwards (a) 172 (214) (8) 8 164 (206) - (42) (42)
Options 194 (207) (125) 125 69 (82) - (13) (13)
Futures - - - - - - - - -
Options on futures 151 (164) (150) 150 1 (14) - (13) (13)
Other / Collateral - - - - - - (220) (220) (220)
Total crude oil,
petroleum products
and freight rates 981 (851) (423) 423 558 (428) (220) (90) (90)
Gas activities
Swaps 63 (39) (3) 3 60 (36) - 24 24
Forwards (a) 1,879 (1,672) (61) 61 1,818 (1,611) - 207 207
Options 15 (28) (26) 26 (11) (2) - (13) (13)
Futures - - - - - - - - -
Other / Collateral - - - - - - (97) (97) (97)
Total Gas 1,957 (1,739) (90) 90 1,867 (1,649) (97) 121 121
Total 2,938 (2,590) (513) 513 2,425 (2,077) (317) 31 31
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.
(c) Amounts offset in accordance with IAS 32.
Registration Document 2016. TOTAL
285
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 16
As of December 31, 2015 Gross value Gross value Amounts Amounts Net balance Net balance Other Net Fair
(M$) before before offset offset sheet value sheet value amounts carrying value (b)
offsetting offsetting - assets (c) - liabilities (c) presented presented not offset amount
Assets / (Liabilities) - assets - liabilities - assets - liabilities
Crude oil, petroleum
products and freight
rates activities
Petroleum products, crude
oil and freight rate swaps 1,517 (498) (350) 350 1,167 (148) - 1,019 1,019
Forwards (a) 68 (130) (25) 25 43 (105) - (62) (62)
Options 660 (468) (460) 460 200 (8) - 192 192
Futures 9 - - - 9 - - 9 9
Options on futures 127 (128) (127) 127 - (1) - (1) (1)
Other / Collateral - - - - - - (1,145) (1,145) (1,145)
Total crude oil,
petroleum products
and freight rates 2,381 (1,224) (962) 962 1,419 (262) (1,145) 12 12
Gas activities
Swaps 50 (175) (19) 19 31 (156) - (125) (125)
Forwards (a) 2,255 (1,498) (320) 320 1,935 (1,178) - 757 757
Options 5 (24) (11) 11 (6) (13) - (19) (19)
Futures - - - - - - - - -
Other / Collateral - - - - - - 23 23 23
Total Gas 2,310 (1,697) (350) 350 1,960 (1,347) 23 636 636
Total 4,691 (2,921) (1,312) 1,312 3,379 (1,609) (1,122) 648 648
Total of fair value
non recognized
in the balance sheet -
(a) Forwards: contracts resulting in physical delivery are accounted for as derivative commodity contracts and included in the amounts shown.
(b) When the fair value of derivatives listed on an organized exchange market (futures, options on futures and swaps) is offset with the margin call received or paid in the balance sheet,
this fair value is set to zero.
(c) Amounts offset in accordance with IAS 32.
286
TOTAL. Registration Document 2016
Note 16 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
As of December 31, 2014 Gross value Gross value Amounts Amounts Net balance Net balance Other Net Fair
(M$) before before offset offset sheet value sheet value amounts carrying value (b)
offsetting offsetting - assets (c) - liabilities (c) presented presented not offset amount
Assets / (Liabilities) - assets - liabilities - assets - liabilities
Crude oil, petroleum
products and freight
rates activities
Petroleum products, crude
oil and freight rate swaps 1,505 (465) (384) 384 1,121 (81) - 1,040 1,040
Forwards (a) 168 (197) (56) 56 112 (141) - (29) (29)
Options 928 (1,224) (790) 790 138 (434) - (296) (296)
Futures 5 - - - 5 - - 5 5
Options on futures 307 (130) (130) 130 177 - - 177 177
Other / Collateral - - - - - - (505) (505) (505)
Total crude oil,
petroleum products
and freight rates 2,913 (2,016) (1,360) 1,360 1,553 (656) (505) 392 392
Gas activities
Swaps 138 (41) (19) 19 119 (22) - 97 97
Forwards (a) 1,110 (671) (278) 278 832 (393) - 439 439
Options 5 (9) (7) 7 (2) (2) - (4) (4)
Futures - - - - - - - - -
Other / Collateral - - - - - - (89) (89) (89)
Total Gas 1,253 (721) (304) 304 949 (417) (89) 443 443
Total 4,166 (2,737) (1,664) 1,664 2,502 (1,073) (594) 835 835
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.
(c) Amounts offset in accordance with IAS 32.
Most commitments on crude oil and refined products have a short term maturity (less than one year). The maturity of most Gas division
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, Fair value as of Impact on Settled Other Fair value as of
(M$) January 1, income contracts December 31,
Crude oil, petroleum products and freight rates activities
2016 1,157 3,013 (4,040) - 130
2015 897 3,318 (3,058) - 1,157
2014 (128) 2,471 (1,445) (1) 897
Gas activities
2016 613 392 (742) (45) 218
2015 532 113 3 (35) 613
2014 558 922 (909) (39) 532
The fair value hierarchy for financial instruments related to commodity contracts is as follows:
As of December 31, 2016 Quoted prices in Prices based Prices based Total
(M$) active markets on observable on non
for identical data observable
assets (level 2) data
(level 1) (level 3)
Crude oil, petroleum products and freight rates activities (22) 152 -
Gas activities 409 (191) -
130
218
Total 387 (39) - 348
Registration Document 2016. TOTAL
287
10
Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Notes 16
As of December 31, 2015 Quoted prices in Prices based Prices based Total
(M$) active markets on observable on non
for identical data observable
assets (level 2) data
(level 1) (level 3)
Crude oil, petroleum products and freight rates activities 15 1,142 -
Gas activities 79 534 -
1,157
613
Total 94 1,676 - 1,770
As of December 31, 2014 Quoted prices in Prices based Prices based Total
(M$) active markets on observable on non
for identical data observable
assets (level 2) data
(level 1) (level 3)
Crude oil, petroleum products and freight rates activities 239 658 -
Gas activities 92 440 -
897
532
Total 331 1,098 - 1,429
The description of each fair value level is presented in Note 15 to the Consolidated Financial Statements.
Cash flow hedge
The impact on the statement of income and other comprehensive income of the hedging instruments related to commodity contracts and
qualified as cash flow hedges is detailed as follows:
As of December 31,
(M$) 2016 2015 2014
Profit (Loss) recorded in equity during the period (69) - -
Amount reclassified from equity to the income statement during the period (1) - -
These financial instruments are mainly two years term Henry Hub derivatives.
As of December 31, 2016, the ineffective portion of these financial instruments is a loss of $5 million. In 2015 and 2014, the ineffective
portion of these financial instruments was nil.
16.2) Oil and Gas market related 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, and power.
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 organized markets or
over-the-counter markets. The list of the different derivatives held
by the Group in these markets is detailed in Note 16.1 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 is based on the end-of-day
exposures and historical price movements of the last 400 business
days for all traded instruments and maturities. Options are
systematically re-evaluated using appropriate models.
The “value-at-risk” represents the most unfavorable movement in
fair value obtained with a 97.5% 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.
288
TOTAL. Registration Document 2016
Notes 16, 17 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
Trading & Shipping: value-at-risk with a 97.5% probability
As of December 31,
(M$) High Low Average Year end
2016 24.6 7.2 14.0 22.1
2015 11.6 5.5 8.6 7.4
2014 12.9 3.3 7.7 5.1
As part of its gas and power trading activity, the Group also uses
derivative instruments such as futures, forwards, swaps and
options in both organized and over-the-counter markets. In general,
the transactions are settled at maturity date through physical
delivery. The Gas 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 division trading: value-at-risk with a 97.5% probability
As of December 31,
(M$) High Low Average Year end
2016 8.4 2.0 3.9 2.1
2015 15.8 2.0 7.1 8.0
2014 15.4 3.2 6.0 4.0
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.
17) Post closing events
On December 21, 2016, TOTAL announced the signing of an
agreement with Petrobras related to the acquisition of a package of
assets representing a global value of around $2.2 billion, made of
cash, carry and contingent payments. At the date the publication of
the Consolidated Financial Statements is authorized, the
transaction remains subject to the final execution of the Sale and
Purchase agreements, to the relevant regulatory approvals and to
partners’ preemption rights only on the Iara transaction.
On January 3, 2017, TOTAL acquired a 23% interest in the
company Tellurian to develop an integrated gas project in the
United States for an amount of $203 million.
On January 31, 2017, TOTAL closed the sale of Atotech to the
Carlyle Group.
Registration Document 2016. TOTAL
289
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 18
18) Consolidation scope
As of December 31, 2016, 934 entities are consolidated of which 839 are fully consolidated and 95 are accounted for under equity method (E).
The table below sets forth the main Group consolidated entities:
Business
segment
Upstream
Statutory corporate name
% Group Method
Abu Dhabi Gas Industries Limited
Abu Dhabi Gas Liquefaction Company Limited
Abu Dhabi Marine Areas Limited
Abu Dhabi Petroleum Company Limited
Angola Block 14 B.V.
Angola LNG Limited
Angola LNG Supply Services LLC
Bonny Gas Transport Limited
Brass Holdings S.A.R.L.
Brass LNG Limited
Cepsa Gas Comercializadora S.A.
Deer Creek Pipelines Limited
Dolphin Energy Limited
E.F. Oil And Gas Limited
Elf E&P
Elf Exploration UK Limited
Elf Petroleum Iran
Elf Petroleum UK Limited
Fosmax LNG
Gas Del Litoral SRLCV
Gas Investment and Services Company Limited
Gulf Total Tractebel Power Company PSJC
Hazira LNG Private Limited
Hazira Port Private Limited
Ichthys LNG PTY Limited
Lampiris France S.A.S.
Lampiris S.A.
Mabruk Oil Operations
Moattama Gas Transportation Company Limited
National Gas Shipping Company Limited
Nigeria LNG Limited
Norpipe Oil A / S
Norpipe Petroleum UK Limited
Norsea Pipeline Limited
North Oil Company
Novatek
Oman LNG LLC
Pars LNG Limited
Petrocedeño
Private Oil Holdings Oman Limited
Qatar Liquefied Gas Company Limited
Qatar Liquefied Gas Company Limited (II)
Ruwais Fertilizer Industries Limited
Société Béarnaise De Gestion Industrielle
South Hook CHP
South Hook LNG Terminal Company Limited
Terneftegas LLC (a)
Total (BTC) B.V.
Total Abu Al Bu Khoosh
Total Austral
Total Brazil Services B.V.
Total Dolphin Midstream
Total E&P Absheron B.V.
interest
15.00%
5.00%
33.33%
23.75%
50.01%
13.60%
13.60%
15.00%
100.00%
20.48%
35.00%
75.00%
24.50%
100.00%
100.00%
100.00%
100.00%
100.00%
27.50%
25.00%
10.00%
20.00%
26.00%
26.00%
30.00%
100.00%
100.00%
49.02%
31.24%
5.00%
15.00%
34.93%
32.87%
32.87%
30.00%
18.90%
5.54%
40.00%
30.32%
10.00%
10.00%
16.70%
33.33%
100.00%
8.35%
8.35%
58.64%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
E
Country of
incorporation
Country of
operations
United Arab Emirates
United Arab Emirates
United Kingdom
United Kingdom
Netherlands
Bermuda
United States
Bermuda
Luxembourg
Nigeria
Spain
Canada
United Arab Emirates
United Kingdom
France
United Kingdom
France
United Kingdom
France
Mexico
Bermuda
United Arab Emirates
India
India
Australia
France
Belgium
France
Bermuda
United Arab Emirates
Nigeria
Norway
United Kingdom
United Kingdom
Qatar
Russia
Oman
Bermuda
Venezuela
United Kingdom
Qatar
Qatar
United Arab Emirates
France
United Kingdom
United Kingdom
Russia
Netherlands
France
France
Netherlands
France
Netherlands
United Arab Emirates
United Arab Emirates
United Arab Emirates
United Arab Emirates
Angola
Angola
United States
Nigeria
Luxembourg
Nigeria
Spain
Canada
United Arab Emirates
United Kingdom
France
United Kingdom
Iran
United Kingdom
France
Mexico
Oman
United Arab Emirates
India
India
Australia
France
Belgium
Libya
Myanmar
United Arab Emirates
Nigeria
Norway
Norway
Norway
Qatar
Russia
Oman
Iran
Venezuela
Oman
Qatar
Qatar
United Arab Emirates
France
United Kingdom
United Kingdom
Russia
Netherlands
United Arab Emirates
Argentina
Netherlands
France
Azerbaijan
(a) % of control different from % of interest: 49%.
290
TOTAL. Registration Document 2016
Note 18 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
Business
segment
Statutory corporate name % Group Method Country of Country of
interest incorporation operations
Upstream (contd)
Total E&P Algérie
Total E&P Americas, LLC
Total E&P Angola
Total E&P Angola Block 15 / 06 Limited
Total E&P Angola Block 17.06
Total E&P Angola Block 25
Total E&P Angola Block 32
Total E&P Angola Block 33
Total E&P Angola Block 39
Total E&P Angola Block 40
Total E&P Aruba B.V.
TOTAL E&P Asia Pacific Pte. Limited
Total E&P Australia
Total E&P Australia II
Total E&P Australia III
Total E&P Azerbaijan B.V.
Total E&P Bolivie
Total E&P Borneo B.V.
Total E&P Bulgaria B.V.
Total E&P Cambodge
Total E&P Canada Limited
Total E&P Chine
Total E&P Colombie
Total E&P Congo
Total E&P Côte d’Ivoire
Total E&P Côte d’Ivoire CI – 514
Total E&P Côte d’Ivoire CI – 515
Total E&P Côte d’Ivoire CI – 516
Total E&P Côte d’Ivoire CI-605 B.V.
Total E&P Cyprus B.V.
Total E&P Deep Offshore Borneo B.V.
Total E&P Denmark B.V.
Total E&P Do Brasil Ltda
Total E&P Dolphin Upstream
Total E&P Dubai
Total E&P East El Burullus Offshore B.V.
Total E&P Egypt Block 2 B.V.
Total E&P Égypte
Total E&P Europe and Central Asia Limited
Total E&P France
Total E&P Golfe Holdings
Total E&P Golfe Limited
Total E&P Guyane Francaise
Total E&P Holding Ichthys
Total E&P Holdings Australia PTY Limited
Total E&P Holdings Russia
Total E&P Holdings UAE B.V.
Total E&P Ichthys B.V.
Total E&P Indonesia GMB Kutai II
Total E&P Indonesia Mentawai B.V.
Total E&P Indonesia South Mandar
Total E&P Indonesia Telen B.V.
Total E&P Indonésie
Total E&P Iran
Total E&P Iraq
Total E&P Italia
Total E&P Kazakhstan
Total E&P Kenya B.V.
Total E&P Kurdistan Region of Iraq (Harir) B.V.
Total E&P Kurdistan Region of Iraq (Safen) B.V.
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
85.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Algeria
United States
Angola
Angola
Angola
Angola
Angola
Angola
Angola
Angola
Aruba
Singapore
Australia
Australia
Australia
Azerbaijan
Bolivia
Brunei
Bulgaria
Cambodia
Canada
China
Colombia
France
United States
France
Bermuda
France
France
France
France
France
France
Netherlands
Singapore
France
France
France
Netherlands
France
Netherlands
Netherlands
France
Canada
France
France
Republic of the Congo Republic of the Congo
France
France
France
France
Netherlands
Netherlands
Netherlands
Netherlands
Brazil
France
France
Netherlands
Netherlands
France
United Kingdom
France
France
France
France
France
Australia
France
Netherlands
Netherlands
France
Netherlands
France
Netherlands
France
France
France
Italy
France
Netherlands
Netherlands
Netherlands
Côte d’Ivoire
Côte d’Ivoire
Côte d’Ivoire
Côte d’Ivoire
Côte d’Ivoire
Cyprus
Brunei
Denmark
Brazil
France
United Arab Emirates
Egypt
Egypt
Egypt
United Kingdom
France
Qatar
Qatar
France
France
Australia
France
United Arab Emirates
Australia
Indonesia
Indonesia
Indonesia
Indonesia
Indonesia
Iran
Iraq
Italy
Kazakhstan
Kenya
Iraq
Iraq
Registration Document 2016. TOTAL
291
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 18
Business
segment
Statutory corporate name % Group Method Country of Country of
interest incorporation operations
Upstream (contd)
Total E&P Kurdistan Region of Iraq (Taza) B.V.
Total E&P Kurdistan Region of Iraq B.V.
Total E&P Libye
Total E&P Malaysia
Total E&P Mauritania Block C9 B.V.
Total E&P Mauritanie
Total E&P Mauritanie Block TA29 B.V.
Total E&P Mexico S.A. de C.V.
Total E&P Mozambique B.V.
Total E&P Myanmar
Total E&P Nederland B.V.
Total E&P New Ventures Inc.
Total E&P Nigeria S.A.S.
Total E&P Nigeria Deepwater A Limited
Total E&P Nigeria Deepwater B Limited
Total E&P Nigeria Deepwater C Limited
Total E&P Nigeria Deepwater D Limited
Total E&P Nigeria Deepwater E Limited
Total E&P Nigeria Deepwater F Limited
Total E&P Nigeria Deepwater G Limited
Total E&P Nigeria Deepwater H Limited
Total E&P Nigeria Limited
Total E&P Norge AS
Total E&P Oman
Total E&P Philippines B.V.
Total E&P PNG 2 B.V.
Total E&P PNG 5 B.V.
Total E&P PNG Limited
Total E&P Poland B.V.
Total E&P Qatar
Total E&P RDC
Total E&P Research & Technology USA LLC
Total E&P Russie
Total E&P Sebuku
Total E&P Services China Company Limited
Total E&P South Africa B.V.
Total E&P South Sageri
Total E&P South Sudan
Total E&P Syrie
Total E&P Tajikistan B.V.
Total E&P Thailand
Total E&P Timan-Pechora LLC
Total E&P Uganda B.V.
Total E&P UK Limited
Total E&P Uruguay B.V.
Total E&P Uruguay Onshore B.V.
Total E&P USA Inc.
Total E&P USA Oil Shale, LLC
Total E&P Well Response
Total E&P Yamal
Total E&P Yemen
Total E&P Yemen Block 3 B.V.
Total Energie Gas GmbH
Total Énergie Gaz
Total Exploration M’Bridge
Total Facilities Management B.V.
Total Gabon
Total Gas & Power Actifs Industriels
Total Gas & Power Asia Private Limited
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
58.28%
100.00%
100.00%
Netherlands
Netherlands
France
France
Netherlands
France
Netherlands
Mexico
Netherlands
France
Netherlands
United States
France
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
Norway
France
Netherlands
Netherlands
Netherlands
Papua New Guinea
Netherlands
France
Democratic Republic
of Congo
United States
France
France
China
Netherlands
France
France
France
Netherlands
France
Russia
Netherlands
United Kingdom
Netherlands
Netherlands
United States
United States
France
France
France
Netherlands
Germany
France
Netherlands
Netherlands
Gabon
France
Singapore
Iraq
Iraq
Libya
Malaysia
Mauritania
Mauritania
Mauritania
Mexico
Mozambique
Myanmar
Netherlands
United States
France
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
Norway
Oman
Philippines
Papua New Guinea
Papua New Guinea
Papua New Guinea
Poland
Qatar
Democratic Republic
of Congo
United States
Russia
Indonesia
China
South Africa
Indonesia
Republic of South Sudan
Syrian Arab Republic
Tajikistan
Thailand
Russia
Uganda
United Kingdom
Uruguay
Uruguay
United States
United States
France
France
Yemen
Yemen
Germany
France
Angola
Netherlands
Gabon
France
Singapore
292
TOTAL. Registration Document 2016
Note 18 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
Business
segment
Statutory corporate name % Group Method Country of Country of
interest incorporation operations
Upstream (contd)
100.00%
Total Gas & Power Brazil
100.00%
Total Gas & Power Chartering Limited
100.00%
Total Gas & Power Limited
100.00%
Total Gas & Power North America Inc.
100.00%
Total Gas & Power Services Limited
100.00%
Total Gas & Power Thailand
100.00%
Total Gas Contracts Limited
100.00%
Total Gas Pipeline USA Inc.
100.00%
Total Gas Y Electricidad Argentina S.A.
100.00%
Total Gasandes
100.00%
Total Gass Handel Norge AS
100.00%
Total Gastransport Nederland B.V.
100.00%
Total Gaz Electricité Holdings France
100.00%
Total GLNG Australia
100.00%
Total GLNG Australia Holdings
100.00%
Total Holding Dolphin Amont
100.00%
Total Holdings International B.V.
100.00%
Total Holdings Nederland B.V.
100.00%
Total Holdings Nederland International B.V.
100.00%
Total LNG Angola
100.00%
Total LNG Supply Services USA Inc.
100.00%
Total Midstream Holdings UK Limited
100.00%
Total NNS LLC
100.00%
Total Oil and Gas South America
100.00%
Total Oil and Gas Venezuela B.V.
100.00%
Total Pars LNG
100.00%
Total Participations Pétrolières Gabon
100.00%
Total Petroleum Angola
100.00%
Total Profils Pétroliers
100.00%
Total Qatar Oil and Gas
100.00%
Total South Pars
100.00%
Total Tengah
100.00%
Total Termokarstovoye B.V.
50.00%
Total Tractebel Emirates O & M Company
50.00%
Total Tractebel Emirates Power Company
100.00%
Total Upstream Nigeria Limited
100.00%
Total Upstream UK Limited
100.00%
Total Venezuela
100.00%
Total Yemen LNG Company Limited
32.68%
Transportadora de Gas del Mercosur S.A.
100.00%
Unitah Colorado Resources II, LLC
29.48%
Yamal LNG (b)
Yemen LNG Company Limited
39.62%
Ypergas S.A. 37.33% Venezuela Venezuela
France
United Kingdom
United Kingdom
United States
United Kingdom
France
United Kingdom
United States
Argentina
France
Norway
Netherlands
France
France
France
France
Netherlands
Netherlands
Netherlands
France
United States
United Kingdom
United States
France
Netherlands
France
Gabon
France
France
France
France
France
Netherlands
France
France
Nigeria
United Kingdom
France
Bermuda
Argentina
United States
Russia
Bermuda
France
United Kingdom
United Kingdom
United States
United Kingdom
France
United Kingdom
United States
Argentina
France
Norway
Netherlands
France
Australia
Australia
France
Netherlands
Netherlands
Netherlands
France
United States
United Kingdom
United Kingdom
France
Venezuela
Iran
Gabon
Angola
France
France
Iran
Indonesia
Russia
United Arab Emirates
United Arab Emirates
Nigeria
United Kingdom
France
Bermuda
Argentina
United States
Russia
Yemen
E
E
E
E
E
Refining & Chemicals
50.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Appryl S.N.C
Atlantic Trading and Marketing Financial Inc.
Atlantic Trading and Marketing Inc.
Atotech (China) Chemicals Limited
Atotech (Yangzhou) Chemicals Limited
Atotech Asia Pacific
Atotech B.V.
Atotech Canada Limited
Atotech CZ
Atotech de Mexico
Atotech Deutschland GmbH
Atotech Development Center Private Limited
Atotech do Brasil Galvanotecnica
Atotech Espana S.A.
(b) % of control different from % of interest: 20.02%.
France
United States
United States
China
China
Hong Kong
Netherlands
Canada
Czech Republic
Mexico
Germany
India
Brazil
Spain
France
United States
United States
China
China
Hong Kong
Netherlands
Canada
Czech Republic
Mexico
Germany
India
Brazil
Spain
Registration Document 2016. TOTAL
293
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 18
Business
segment
Statutory corporate name % Group Method Country of Country of
interest incorporation operations
Refining & Chemicals (contd)
Atotech France
Atotech India Private Limited
Atotech Istanbul Kimya Sanayi
Ticaret Limited Sirketi
Atotech Italia
Atotech Japan
Atotech Korea Limited
Atotech Malaysia Sdn Bhd
Atotech Nederland B.V.
Atotech Österreich GmbH
Atotech Poland
Atotech SEA Pte
Atotech Servicios De Mexico S.A. de C.V.
Atotech SK
Atotech Skandinavien
Atotech Slovenija, Proizvodnja
Kemicnih Izdelkov, D.D.
Atotech Taiwan
Atotech Thailand
Atotech UK
Atotech USA Inc.
Atotech Vietnam Company Limited
Balzatex S.A.S
Barry Controls Aerospace S.N.C.
BASF Total Petrochemicals LLC
Bay Junction Inc.
Borrachas Portalegre Ltda
BOU Verwaltungs GmbH
Buckeye Products Pileline LP
Caoutchoucs Modernes S.A.S.
Catelsa-Caceres S.A.U.
Cie Tunisienne du Caoutchouc S.A.R.L.
Composite Industrie Maroc S.A.R.L.
Composite Industrie S.A.
Cosden, LLC
COS-MAR Company
Cray Valley (Guangzhou)
Chemical Company, Limited
Cray Valley Czech
Cray Valley HSC Asia Limited
Cray Valley Italia S.R.L.
Cray Valley S.A.
CSSA – Chartering and Shipping Services S.A.
Dalian Total Consulting Company Limited
Dalian West Pacific Petrochemical
Company Limited
Espa S.A.R.L.
Ethylène Est
Feluy Immobati
FINA Technology, Inc.
Financière Industrie
FPL Enterprises, Inc.
Gasket (Suzhou) Valve Components
Company, Limited
Gasket International SPA
Grace Development Limited
Grande Paroisse S.A.
Guangzhou Sphere Chemicals Limited
Gulf Coast Pipeline LP
Hanwha Total Petrochemical Co. Limited
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
40.00%
100.00%
100.00%
100.00%
14.66%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
50.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
22.41%
100.00%
99.98%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
14.66%
50.00%
E
E
E
E
France
India
Turkey
Italy
Japan
South Korea
Malaysia
Netherlands
Austria
Poland
Singapore
Mexico
Slovakia
Sweden
Slovenia
Taiwan
Thailand
United Kingdom
United States
Vietnam
France
France
United States
United States
Portugal
Germany
United States
France
Spain
Tunisia
Morocco
France
United States
United States
China
Czech Republic
China
Italy
France
Switzerland
China
China
France
France
Belgium
United States
France
United States
China
Italy
Hong Kong
France
China
United States
South Korea
France
India
Turkey
Italy
Japan
South Korea
Malaysia
Netherlands
Austria
Poland
Singapore
Mexico
Slovakia
Sweden
Slovenia
Taiwan
Thailand
United Kingdom
United States
Vietnam
France
France
United States
United States
Portugal
Germany
United States
France
Spain
Tunisia
Morocco
France
United States
United States
China
Czech Republic
China
Italy
France
Switzerland
China
China
France
France
Belgium
United States
France
United States
China
Italy
Hong Kong
France
China
United States
South Korea
294
TOTAL. Registration Document 2016
Note 18 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
Business
segment
Statutory corporate name % Group Method Country of Country of
interest incorporation operations
Refining & Chemicals (contd)
HBA Hutchinson Brasil Automotive Ltda
Hutchinson (UK) Limited
Hutchinson (Wuhan) Automotive
Rubber Products Company Limited
Hutchinson Aéronautique & Industrie Limited
Hutchinson Aeroservices GmbH
Hutchinson Aeroservices S.A.S.
Hutchinson Aerospace & Industry Inc.
Hutchinson Aerospace GmbH
Hutchinson Aftermarket USA Inc.
Hutchinson Antivibration Systems Inc.
Hutchinson Argentina S.A.
Hutchinson Autopartes Mexico S.A. de C.V.
Hutchinson Borrachas de Portugal Ltda
Hutchinson Corporation
Hutchinson d.o.o Ruma
Hutchinson Do Brasil S.A.
Hutchinson Fluid Management Systems Inc.
Hutchinson GmbH
Hutchinson Holding GmbH
Hutchinson Holdings UK Limited
Hutchinson Iberia S.A.
Hutchinson Industrial Rubber
Products (Suzhou) Company, Limited
Hutchinson Industrias Del Caucho SAU
Hutchinson Industries Inc.
Hutchinson Japan Company Limited
Hutchinson Korea Limited
Hutchinson Maroc S.A.R.L. AU
Hutchinson Nichirin Brake Hoses SL
Hutchinson Palamos
Hutchinson Poland SP ZO.O.
Hutchinson Polymers S.N.C.
Hutchinson Porto Tubos Flexiveis Ltda
Hutchinson Precision Sealing Systems Inc.
Hutchinson Rubber Products
Private Limited Inde
Hutchinson S.A.
Hutchinson S.N.C.
Hutchinson S.R.L. (Italie)
Hutchinson S.R.L. (Roumanie)
Hutchinson Sales Corporation
Hutchinson Santé S.N.C.
Hutchinson Seal De Mexico S.A. de CV.
Hutchinson Sealing Systems Inc.
Hutchinson SRO
Hutchinson Stop – Choc GmbH & CO. KG
Hutchinson Suisse S.A.
Hutchinson Transferencia de Fluidos S.A. de C.V.
Hutchinson Tunisie S.A.R.L.
Industrias Tecnicas De La Espuma SL
Industrielle Desmarquoy S.N.C.
Jéhier S.A.S
JPR S.A.S
Keumhan Vietnam Company Limited
KTN Kunststofftechnik Nobitz GmbH
Laffan Refinery Company Limited
Laffan Refinery Company Limited 2
LaPorte Pipeline Company LP
LaPorte Pipeline GP LLC
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
30.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
99.89%
100.00%
100.00%
100.00%
10.00%
10.00%
50.00%
50.00%
E
E
E
E
E
Brazil
United Kingdom
China
Canada
Germany
France
United States
Germany
United States
United States
Argentina
Mexico
Portugal
United States
Serbia
Brazil
United States
Germany
Germany
United Kingdom
Spain
China
Spain
United States
Japan
South Korea
Morocco
Spain
Spain
Poland
France
Portugal
United States
France
France
France
Italy
Romania
United States
France
Mexico
United States
Czech Republic
Germany
Switzerland
Mexico
Tunisia
Spain
France
France
France
Vietnam
Germany
Qatar
Qatar
United States
United States
Brazil
United Kingdom
China
Canada
Germany
France
United States
Germany
United States
United States
Argentina
Mexico
Portugal
United States
Serbia
Brazil
United States
Germany
Germany
United Kingdom
Spain
China
Spain
United States
Japan
South Korea
Morocco
Spain
Spain
Poland
France
Portugal
United States
India
France
France
Italy
Romania
United States
France
Mexico
United States
Czech Republic
Germany
Switzerland
Mexico
Tunisia
Spain
France
France
France
Vietnam
Germany
Qatar
Qatar
United States
United States
Registration Document 2016. TOTAL
295
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 18
Business
segment
Statutory corporate name % Group Method Country of Country of
interest incorporation operations
Refining & Chemicals (contd)
E
E
E
E
E
E
Le Joint Francais S.N.C.
Legacy Site Services LLC
Les Stratifiés S.A.S
Lone Wolf Land Company
LSS Funding Inc.
Machen Land Limited
Mapa – Spontex Inc.
Naphtachimie
Olutex Oberlausitzer Luftfahrttextilien GmbH
Pamargan (Malta) Products Limited
Pamargan Products Limited
Paulstra S.N.C.
Paulstra Silentbloc S.A.
Polyblend GmbH
Qatar Petrochemical Company Q.S.C. (QAPCO)
Qatofin Company Limited
Résilium
Retia
Retia USA LLC
San Jacinto Rail Limited
Saudi Aramco Total Refining
& Petrochemical Company
SCI Cibat
Sealants Europe
SigmaKalon Group B.V.
Société du Pipeline Sud-Européen
Stillman Seal Corporation
Stop-Choc (UK) Limited
Techlam S.A.S.
Total Activités Maritimes
Total Deutschland GmbH (c)
Total Downstream UK PLC
Total European Trading
Total Laffan Refinery
Total Laffan Refinery II B.V.
Total Lindsey Oil Refinery Limited
Total Oil Trading S.A.
Total Olefins Antwerp
Total Opslag En Pijpleiding Nederland NV
Total PAR LLC
Total Petrochemicals & Refining Ordos B.V.
Total Petrochemicals & Refining S.A. / NV (c)
Total Petrochemicals & Refining USA Inc. (c)
Total Petrochemicals (China)
Trading Company, Limited
Total Petrochemicals (Foshan) Limited
Total Petrochemicals (Hong Kong) Limited
Total Petrochemicals (Ningbo) Limited
Total Petrochemicals Development Feluy
Total Petrochemicals Ecaussinnes
Total Petrochemicals Feluy
Total Petrochemicals France
Total Petrochemicals Iberica
Total Petrochemicals Pipeline USA Inc.
Total Petrochemicals UK Limited
Total Polymers Antwerp
Total Raffinaderij Antwerpen N.V.
Total Raffinage Chimie
Total Raffinage France
Total Raffinerie Mitteldeutschland GmbH
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
50.00%
100.00%
100.00%
100.00%
100.00%
100.00%
68.00%
20.00%
49.09%
100.00%
100.00%
100.00%
17.00%
37.50%
83.33%
34.00%
100.00%
35.14%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
55.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
France
United States
France
United States
United States
United Kingdom
United States
France
Germany
Malta
United Kingdom
France
Belgium
Germany
Qatar
Qatar
Belgium
France
United States
United States
Saoudia Arabia
France
France
Netherlands
France
United States
United Kingdom
France
France
Germany
United Kingdom
France
France
Netherlands
United Kingdom
Switzerland
Belgium
Netherlands
United States
Netherlands
Belgium
United States
China
China
Hong Kong
China
Belgium
Belgium
Belgium
France
Spain
United States
United Kingdom
Belgium
Belgium
France
France
Germany
France
United States
France
United States
United States
United Kingdom
United States
France
Germany
Malta
United Kingdom
France
Belgium
Germany
Qatar
Qatar
Belgium
France
United States
United States
Saoudia Arabia
France
France
Netherlands
France
United States
United Kingdom
France
France
Germany
United Kingdom
France
France
Netherlands
United Kingdom
Switzerland
Belgium
Netherlands
United States
Netherlands
Belgium
United States
China
China
Hong Kong
China
Belgium
Belgium
Belgium
France
Spain
United States
United Kingdom
Belgium
Belgium
France
France
Germany
(c) Multi-segment entities.
296
TOTAL. Registration Document 2016
Note 18 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
Business
segment
Statutory corporate name % Group Method Country of Country of
interest incorporation operations
Refining & Chemicals (contd)
Total Refining & Chemicals Saudi Arabia S.A.S.
Total Research & Technology Feluy
Total Splitter USA Inc
Total Trading and Marketing Canada LP
Total Trading Asia Pte Limited
Total Trading Canada Limited
Total Trading Products S.A.
Transalpes S.N.C.
Trans-Ethylène
UAB Atotech – Chemeta
Vibrachoc SAU
Zeeland Refinery NV 55.00% Netherlands Netherlands
France
Belgium
United States
Canada
Singapore
Canada
Switzerland
France
France
Lithunia
Spain
France
Belgium
United States
Canada
Singapore
Canada
Switzerland
France
France
Lithunia
Spain
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
67.00%
99.98%
100.00%
100.00%
Marketing & Services
28.37%
28.37%
20.71%
20.71%
50.00%
50.00%
39.71%
8point3 General Partner, LLC
8point3 Holding Company, LLC
8point3 OpCo Holdings, LLC
8point3 Operating Company, LLC
Advanced Thermal Batteries Inc.
Aerospatiale Batteries (ASB)
Aetolia Energy Site Anonymi Energeiaki Etaireia
(distinctive title Aetolia Energeiaki Etaireia)
Aetolia Energy Site Malta Limited
Air Total (Suisse) S.A.
Air Total International S.A.
Alcad AB
AlexSun 1 Malta Limited
AlexSun2 Malta Limited
Almyros Energy Solution Anonymi Energeiaki
Etaireaia (Distinctive Title Almyros Energeiaki A.E.)
Almyros Energy Solution Malta Limited
Alvea
Amco-Saft India Limited
Amyris Inc.
Antilles Gaz
Aragonne Solar, LLC
Ardeches Solaire – Draga 1
Arica Solar, LLC
Aristea
Arteco
AS 24
AS 24 Tankservice GmbH
AS24 Belgie N.V.
AS24 Española S.A.
AS24 Fuel Cards Limited
AS24 Polska SP ZO.O.
AUO SunPower Sdn. Bhd
Badenhorst PV 2 Hold Company LLC
Beit Hagedi Renewable Energies Limited
Bertophase (PTY) Limited
Bluestem Solar LLC
BNB Bloomfield Solar, LLC
Boulder Solar II, LLC
Boulder Solar III, LLC
Boulder Solar IV, LLC
Boulder Solar Power Parent, LLC
Boulder Solar Power, LLC
BSP Class B Member HoldCo, LLC
BSP Class B Member, LLC
BSP Holding Company, LLC
BSPCB Class B Member, LLC
56.73%
100.00%
100.00%
100.00%
56.73%
56.73%
39.71%
56.73%
100.00%
100.00%
23.51%
100.00%
56.73%
56.73%
56.73%
51.00%
49.99%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
E
E
E
E
E
E
E
E
E
United States
United States
United States
United States
United States
France
Greece
Malta
Switzerland
Switzerland
Sweden
Malta
Malta
Greece
Malta
France
India
United States
France
United States
France
United States
Belgium
Belgium
France
Germany
Belgium
Spain
United Kingdom
Poland
Malaysia
United States
Israel
South Africa
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
France
Greece
Malta
Switzerland
Switzerland
Sweden
Malta
Malta
Greece
Malta
France
India
United States
France
United States
France
United States
Belgium
Belgium
France
Germany
Belgium
Spain
United Kingdom
Poland
Malaysia
United States
Israel
South Africa
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
Registration Document 2016. TOTAL
297
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 18
Business
segment
Statutory corporate name % Group Method Country of Country of
interest incorporation operations
Marketing & Services (contd)
Buffalo North Star Solar, LLC
Caldeo
Centrale Solaire 1
Centrale Solaire 2
Charente Maritime Solaire – St Léger 1
Charvet La Mure Bianco
Cogenra Development, Inc.
Cogenra Solar, Inc.
Compagnie Pétrolière de l’Ouest- CPO
Cooper Ranch Solar LLC
Corona Sands, LLC
CPE Énergies
Cristal Marketing Egypt
DCA-MORY-SHIPP
Deaar PV Hold Company LLC
Desert SunBurst, LLC
Diamond Energy PTY Limited
Dragonfly Systems, Inc.
Eau Chaude Réunion (ECR)
Egedis
Elf Oil UK Aviation Limited
Elf Oil UK Properties Limited
Fast Jung KB
First Philec Solar Corporation
Frieman & Wolf Batterietechnick GmbH
Georgia Sun I, LLC
GFS I Class B Member HoldCo, LLC
GFS I Class B Member, LLC
GFS I Holding Company, LLC
Gilat Renewable Energies Limited
Golden Fields Solar I Parent, LLC
Golden Fields Solar I, LLC
Golden Fields Solar II, LLC
Golden Fields Solar III, LLC
Golden Fields Solar IV, LLC
Greenbotics, Inc.
Guangzhou Elf Lubricants Company Limited
Helios Residential Solar Fund, LLC
Hemethia Successful Limited
High Plains Ranch I, LLC
Huaxia CPV (Inner Mongolia)
Power Corporation, Limited
Industrial Power Services LLC
Infinite Sunshine 2015-1, LLC
Institut Photovoltaïque D’Ile De France (IPVF)
Java Solar, LLC
JDA Overseas Holdings, LLC
K2015014806 (South Africa) (PTY) Limited
K2015263261 (South Africa) (PTY) Limited
Kern High School District Solar, LLC
Kern High School District Solar (2), LLC
Klipgats 7 Hold Company LLC
Klipgats PV 3 Hold Company LLC
Kozani Energy Anonymi Energeiaki
Etaireia (distinctive title Kozani Energy S.A.)
Kozani Energy Malta Limited
Lemoore Stratford Land Holdings IV, LLC
Livingston Ridge Solar LLC
Loving Solar LLC
Lucerne Valley Solar I, LLC
56.73%
100.00%
56.73%
56.73%
56.73%
100.00%
56.73%
56.73%
100.00%
56.73%
28.36%
100.00%
80.78%
100.00%
56.73%
56.73%
14.18%
56.73%
50.00%
100.00%
100.00%
100.00%
100.00%
8.51%
100.00%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
77.00%
56.73%
56.73%
56.73%
14.18%
56.73%
56.73%
43.00%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
E
E
E
E
United States
France
France
France
France
France
United States
United States
France
United States
United States
France
Egypt
France
United States
United States
Australia
United States
France
France
United Kingdom
United Kingdom
Sweden
Philippines
Germany
United States
United States
United States
United States
Israel
United States
United States
United States
United States
United States
United States
China
United States
Malta
United States
China
United States
United States
France
United States
United States
South Africa
South Africa
United States
United States
United States
United States
Greece
Malta
United States
United States
United States
United States
United States
France
United States
United States
France
France
United States
United States
France
United States
United States
France
Egypt
France
United States
United States
Australia
United States
France
France
United Kingdom
United Kingdom
Sweden
Philippines
Germany
United States
United States
United States
United States
Israel
United States
United States
United States
United States
United States
United States
China
United States
Malta
United States
China
United States
United States
France
United States
United States
United States
United States
United States
United States
United States
United States
Greece
Malta
United States
United States
United States
United States
298
TOTAL. Registration Document 2016
Note 18 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
Business
segment
Statutory corporate name % Group Method Country of Country of
interest incorporation operations
Marketing & Services (contd)
E
E
E
E
Lucerne Valley Solar One Holdings, LLC
Luis Solar, LLC
Lux Residential Solar Fund, LLC
Mesquite Solar I, LLC
Michel Mineralölhandel GmbH
Missiles & Space Batteries Limited
Mulilo Prieska PV (RF) Proprietary Limited
Napa Sanitation District Solar, LLC
National Petroleum Refiners
Of South Africa (PTY) Limited
Nevatim Green Energies Limited
Northstar Macys East Coast 2016, LLC
Northstar Macys Illinois, LLC
Northstar Macys Maryland 2015, LLC
Northstar Macys US West 2016, LLC
Northstar Santa Clara County 2016, LLC
Ochoa Solar LLC
Parrey Parent, LLC
Parrey, LLC
Patish (West) Green Energies Limited
Phantom Field Resources, LLC
Photovoltaic Park Malta Limited
Photovoltaica Parka Veroia Anonymi Etaireia
Pluto Acquisition Company, LLC
Produits Pétroliers Stela
Project Sunday Development, LLC
Project Sunday Holdings LLC
PV Salvador SpA
Quimica Vasca S.A. Unipersonal
Ray of Success Anonymi Energeiaki Etaireia
(Distinctive Title Ray of Sucess A.E.)
Ray of Success Malta Limited
Redstone Solar I, LLC
Rotem SunPower Limited
Saft (Zhuhai FTZ) Batteries Company Limited
Saft AB
Saft Acquisition S.A.S
Saft America Inc.
Saft AS
Saft Australia PTY Limited
Saft Batterias SL
Saft Batterie Italia S.R.L.
Saft Batterien GmbH
Saft Batteries Pte Limited
Saft Batteries PTY Limited
Saft Batterijen B.V.
Saft Do Brasil Ltda
Saft Federal Systems Inc.
Saft Ferak AS
Saft Finance S.A.R.L
Saft Groupe S.A.
Saft Hong Kong Limited
Saft Japan KK
Saft JV Holding Company
Saft Limited
Saft LLC
Saft Nife ME Limited
Saft S.A.S
Saft Sweden AB
Sahara Solar Investment, LLC
56.73%
56.73%
56.73%
56.73%
100.00%
50.00%
27.00%
56.73%
18.22%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
99.99%
56.73%
56.73%
20.00%
100.00%
39.71%
56.73%
56.73%
56.73%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
56.73%
United States
United States
United States
United States
Germany
United Kingdom
South Africa
United States
South Africa
Israel
United States
United States
United States
United States
United States
United States
United States
United States
Israel
United States
Malta
Greece
United States
France
United States
United States
Chile
Spain
Greece
Malta
United States
Israel
China
Sweden
France
United States
Norway
Australia
Spain
Italy
Germany
Singapore
Australia
Netherlands
Brazil
United States
Czech Republic
Luxembourg
France
Hong Kong
Japan
United States
United Kingdom
Russia
Cyprus
France
Sweden
United States
United States
United States
United States
United States
Germany
United Kingdom
South Africa
United States
South Africa
Israel
United States
United States
United States
United States
United States
United States
United States
United States
Israel
United States
Malta
Greece
United States
France
United States
United States
Chile
Spain
Greece
Malta
United States
Israel
China
Sweden
France
United States
Norway
Australia
Spain
Italy
Germany
Singapore
Australia
Netherlands
Brazil
United States
Czech Republic
Luxembourg
France
Hong Kong
Japan
United States
United Kingdom
Russia
Cyprus
France
Sweden
United States
Registration Document 2016. TOTAL
299
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 18
Business
segment
Statutory corporate name % Group Method Country of Country of
interest incorporation operations
Marketing & Services (contd)
E
E
E
E
Sandy Hills Solar I, LLC
Saudi Total Petroleum Products
Servauto Nederland B.V.
SGS Antelope Valley Development, LLC
Sgula (East) Green Energies Limited
Sgula (West) Green Energies Limited
Shams Power Company PJSC
Société des transports pétroliers par pipeline
Société d’exploitation
de centrales photovoltaïques 1
Société d’exploitation de l’usine de Rouen
Société mahoraise de stockage
de produits pétroliers
Société Urbaine des Pétroles
S-Oil Total Lubricants Company Limited
Solar Assurance Capital PTY Limited
Solar Greenhouse I, LLC
Solar Star Arizona HMR-I, LLC
Solar Star Arizona I, LLC
Solar Star Arizona II, LLC
Solar Star Arizona III, LLC
Solar Star Arizona IV, LLC
Solar Star Arizona V, LLC
Solar Star Arizona VI, LLC
Solar Star Arizona VII, LLC
Solar Star Arizona XIII, LLC
Solar Star California I, LLC
Solar Star California IV, LLC
Solar Star California VII, LLC
Solar Star California XII, LLC
Solar Star California XL, LLC
Solar Star California XLI Parent, LLC
Solar Star California XLI, LLC
Solar Star California XLII, LLC
Solar Star California XLIII, LLC
Solar Star California XLIV, LLC
Solar Star California XLVI, LLC
Solar Star California XLVII, LLC
Solar Star California XLVIII, LLC
Solar Star California XV Parent, LLC
Solar Star California XV, LLC
Solar Star California XVI, LLC
Solar Star California XVII, LLC
Solar Star California XVIII, LLC
Solar Star California XXI, LLC
Solar Star California XXII, LLC
Solar Star California XXIII, LLC
Solar Star California XXIV, LLC
Solar Star California XXIX, LLC
Solar Star California XXV, LLC
Solar Star California XXVI, LLC
Solar Star California XXVII, LLC
Solar Star California XXVIII, LLC
Solar Star California XXX (2), LLC
Solar Star California XXXIV, LLC
Solar Star California XXXIX, LLC
Solar Star California XXXV, LLC
Solar Star California XXXVI, LLC
Solar Star California XXXVII, LLC
Solar Star California XXXVIII, LLC
56.73%
51.00%
100.00%
56.73%
56.73%
56.73%
20.00%
35.50%
28.42%
98.98%
100.00%
100.00%
50.00%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
United States
Saoudia Arabia
Netherlands
United States
Israel
Israel
United Arab Emirates
France
France
United States
Saoudia Arabia
Netherlands
United States
United States
Israel
United Arab Emirates
France
France
France
France
France
South Korea
Australia
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
France
France
France
South Korea
Australia
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
300
TOTAL. Registration Document 2016
Note 18 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
Business
segment
Statutory corporate name % Group Method Country of Country of
interest incorporation operations
Marketing & Services (contd)
E
56.73%
Solar Star Colorado II, LLC
56.73%
Solar Star Colorado III Parent, LLC
56.73%
Solar Star Colorado III, LLC
56.73%
Solar Star Connecticut I, LLC
56.73%
Solar Star Hawaii I, LLC
56.73%
Solar Star Hawaii IV, LLC
56.73%
Solar Star Hi Air, LLC
56.73%
Solar Star Massachusetts II, LLC
56.73%
Solar Star New Jersey IV, LLC
56.73%
Solar Star New York I, LLC
56.73%
Solar Star Oceanside, LLC
56.73%
Solar Star Oregon I, LLC
56.73%
Solar Star Rancho CWD I, LLC
56.73%
Solar Star Texas II, LLC
56.73%
Solar Star Texas IV, LLC
56.73%
Solar Star YC, LLC
56.73%
SolarBridge Technologies, Inc.
50.00%
South Asia LPG Private Limited
56.73%
SP Cordobesa Malta Limited
56.73%
SP Quintana Malta Limited
100.00%
Spezial Geratebau Hamburg GmbH
56.73%
SPML Land, Inc.
56.73%
SPWR Energias Renovaveis Unipessoal, Ltda
0.57%
SPWR EW 2013-1, LLC
28.36%
SPWR MS 2013-1, LLC
0.57%
SPWR UBS 2013-1, LLC
0.57%
SPWR USB 2013-2, LLC
0.57%
SPWR USB 2013-3, LLC
56.73%
SSCA XLI Class B Member HoldCo, LLC
56.73%
SSCA XLI Class B Member, LLC
56.73%
SSCA XLI Holding Company, LLC
56.73%
SSCA XXXII Holding Company, LLC
56.73%
SSCO III Class B Holdings, LLC
56.73%
SSCO III Holdings Company, LLC
56.73%
SSCO III Managing Member, LLC
56.73%
SSSA, LLC
56.73%
Strata Solar, LLC
56.73%
SunFront I, LLC
56.73%
SunPower Access I, LLC
56.73%
SunPower AssetCo, LLC
56.73%
SunPower Bermuda Holdings
56.73%
SunPower Capital Australia PTY Limited
56.73%
SunPower Capital Services, LLC
56.73%
SunPower Capital, LLC
SunPower Commercial Holding Company II, LLC
56.73%
SunPower Commercial Holding Company III, LLC 56.73%
56.73%
SunPower Commercial II Class B, LLC
56.73%
SunPower Commercial III Class B, LLC
56.73%
SunPower Corp Israel Limited
56.73%
SunPower Corporation
56.73%
SunPower Corporation (Switzerland) S.A.R.L.
56.73%
SunPower Corporation Australia PTY Limited
56.73%
SunPower Corporation Limited
56.73%
SunPower Corporation Malta Holdings Limited
56.73%
SunPower Corporation Mexico, S. de R.L. de C.V.
56.73%
SunPower Corporation
Southern Africa (PTY) Limited
SunPower Corporation SpA
SunPower Corporation UK Limited
SunPower Corporation, Systems
56.73%
56.73%
56.73%
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
India
Malta
Malta
Germany
Philippines
Portugal
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
Bermuda
Australia
United States
United States
United States
United States
United States
United States
Israel
United States
Switzerland
Australia
Hong Kong
Malta
Mexico
South Africa
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
India
Malta
Malta
Germany
Philippines
Portugal
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
Bermuda
Australia
United States
United States
United States
United States
United States
United States
Israel
United States
Switzerland
Australia
Hong Kong
Malta
Mexico
South Africa
Chile
United Kingdom
United States
Chile
United Kingdom
United States
Registration Document 2016. TOTAL
301
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 18
Business
segment
Statutory corporate name % Group Method Country of Country of
interest incorporation operations
Marketing & Services (contd)
SunPower DevCo, LLC
SunPower Development Company
SunPower Energía SpA
SunPower Energy Corporation Limited
SunPower Energy Systems (PTY) Limited
SunPower Energy Systems Canada Corporation
SunPower Energy Systems Korea
SunPower Energy Systems Singapore
PTE Limited
SunPower Energy Systems
Southern Africa (PTY) Limited
SunPower Energy Systems Spain, S.L.
SunPower Foundation
SunPower France S.A.S.
SunPower GmbH
SunPower HoldCo, LLC
SunPower Italia S.R.L.
SunPower Japan KK
SunPower Malta Limited
SunPower Manufacturing (PTY) Limited
SunPower Manufacturing Corporation Limited
SunPower Manufacturing de Vernejoul
SunPower Mühendislik Insaat Enerji
Üretim ve Ticaret A.S
SunPower Nanao Parent, LLC
SunPower Netherlands Hold Company 1 B.V.
SunPower Netherlands Hold Company 2 B.V.
SunPower Netherlands Hold Company 3 B.V.
SunPower Netherlands Hold Company 4 B.V.
SunPower Netherlands Hold Company 5 B.V.
SunPower Netherlands Hold Company 6 B.V.
SunPower Netherlands Hold Company 7 B.V.
SunPower Netherlands Holdings B.V.
SunPower North America, LLC
SunPower Philippines Limited –
Regional Operating Headquarters
SunPower Philippines Manufacturing Limited
SunPower Software I, Inc.
SunPower Solar Energy
Technology (Tianjin) Corporation, Limited
SunPower Solar India Private Limited
SunPower Solar Malaysia Sdn. Bhd.
SunPower SolarProgram III, LLC
SunPower SolarProgram IV, LLC
SunPower Solarprogram V, LLC
SunPower Solarprogram VI, LLC
SunPower SolarProgram VII, LLC
SunPower SolarProgram VIII, LLC
SunPower SolarProgram IX, LLC
SunPower Systems Belgium SPRL
SunPower Systems Mexico S. de R.L. de C.V.
SunPower Systems S.A.R.L.
SunPower Technologies France S.A.S.
SunPower Technology Limited
SunPower YC Holdings, LLC
SunRay Italy S.R.L.
Sunrente Investissement France S.A.S.
SunRise 1, LLC
Sunzil
Sunzil Caraibes
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
32.06%
50.00%
50.00%
E
E
United States
United States
Chile
Hong Kong
South Africa
Canada
South Korea
Singapore
United States
United States
Chile
United States
South Africa
Canada
South Korea
Singapore
South Africa
South Africa
Spain
United States
France
Germany
United States
Italy
Japan
Malta
South Africa
Hong Kong
France
Turkey
United States
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
United States
Cayman Islands
Cayman Islands
United States
China
India
Malaysia
United States
United States
United States
United States
United States
United States
United States
Belgium
Mexico
Switzerland
France
Cayman Islands
United States
Italy
France
United States
France
France
Spain
United States
France
Germany
United States
Italy
Japan
Malta
South Africa
United States
France
Turkey
United States
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
United States
Philippines
Philippines
United States
China
India
Malaysia
United States
United States
United States
United States
United States
United States
United States
Belgium
Mexico
Switzerland
France
Cayman Islands
United States
Italy
France
United States
France
France
302
TOTAL. Registration Document 2016
Note 18 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
Business
segment
Statutory corporate name % Group Method Country of Country of
interest incorporation operations
Marketing & Services (contd)
Sunzil Mayotte S.A.S.
Sunzil Ocean Indien
Sunzil Pacific
Sunzil Polynésie
Sunzil Polynésie Services
Sunzil Services Caraibes
Sunzil Services Ocean Indien
Swingletree Operations, LLC
Tadiran Batteries GmbH
Tadiran Batteries Limited
TEMASOL
Tenesol S.A.S.
Tenesol SPV1
Tenesol SPV2
Tenesol Venezuela
Tita Energy (PTY) Limited
Torimode (PTY) Limited
Toriprox (PTY) Limited
Torisol (PTY) Limited
Total (Africa) Limited
Total (Fiji) Limited
Total Abengoa Solar Emirates
Investment Company B.V.
Total Additifs et Carburants Spéciaux
Total Africa S.A.
Total Aviation & Export Limited
Total Belgium
Total Bitumen Deutschland GmbH
Total Bitumen UK Limited
Total Botswana (PTY) Limited
Total Burkina
Total Cambodge
Total Cameroun
Total Caraïbes
Total Ceska Republika S.R.O.
Total China Investment Company Limited
Total Congo
Total Corse
Total Côte D’Ivoire
Total Denmark A / S
Total Deutschland GmbH (c)
Total Egypt
Total Énergie Développement
Total Energie Do Brasil
Total Énergies Nouvelles Activités USA
Total Erg SPA
Total España S.A.
Total Especialidades Argentina
Total Ethiopia
Total Fluides
Total Freeport Corporation
Total Fuels Wuhan Company Limited
Total Glass Lubricants Europe GmbH
Total Guadeloupe
Total Guinea Ecuatorial
Total Guinée
Total Holding Asie
Total Holding India
Total Jamaica Limited
Total Jordan PSC
E
E
E
E
E
E
E
E
E
E
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
56.73%
100.00%
100.00%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
100.00%
100.00%
50.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
50.10%
100.00%
100.00%
67.01%
100.00%
100.00%
100.00%
99.70%
100.00%
72.99%
100.00%
100.00%
80.78%
100.00%
56.73%
100.00%
49.00%
100.00%
100.00%
100.00%
100.00%
51.00%
100.00%
100.00%
100.00%
70.00%
100.00%
100.00%
100.00%
100.00%
100.00%
France
France
France
France
France
France
France
United States
Germany
Israel
Morocco
France
France
France
Venezuela
South Africa
South Africa
South Africa
South Africa
United Kingdom
Fiji Islands
Netherlands
France
France
France
France
France
France
France
United States
Germany
Israel
Morocco
France
France
France
Venezuela
United States
South Africa
South Africa
South Africa
United Kingdom
Fiji Islands
United Arab Emirates
France
France
Zambia
Belgium
Germany
United Kingdom
Botswana
Burkina Faso
Cambodia
Cameroon
France
Czech Republic
China
France
France
Zambia
Belgium
Germany
United Kingdom
Botswana
Burkina Faso
Cambodia
Cameroon
France
Czech Republic
China
Republic of the Congo Republic of the Congo
France
Côte d’Ivoire
Denmark
Germany
Egypt
France
Brazil
France
Italy
Spain
Argentina
Ethiopia
France
Philippines
China
Germany
France
Equatorial Guinea
Guinea
France
France
Jamaica
Jordan
France
Côte d’Ivoire
Denmark
Germany
Egypt
France
Brazil
France
Italy
Spain
Argentina
Ethiopia
France
Philippines
China
Germany
France
Equatorial Guinea
Guinea
France
France
Jamaica
Jordan
Registration Document 2016. TOTAL
303
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 18
Business
segment
Statutory corporate name % Group Method Country of Country of
interest incorporation operations
Marketing & Services (contd)
Total Kenya
Total Lesotho (PTY) Limited
Total Liban
Total Liberia Inc.
Total Lubricants (China) Company Limited
Total Lubricants Taiwan Limited
Total Lubrifiants
Total Lubrifiants Service Automobile
Total Luxembourg S.A.
Total Madagasikara S.A.
Total Mali
Total Marine Fuels
Total Marketing Services
Total Marketing Egypt
Total Marketing France
Total Marketing Gabon
Total Marketing Middle East Free Zone
Total Marketing Tchad
Total Marketing Uganda
Total Maroc
Total Mauritius
Total Mayotte
Total Mexico S.A. de C.V.
Total Mineraloel und Chemie GmbH
Total Mineralol GmbH
Total Mozambique
Total Namibia (PTY) Limited
Total Nederland NV
Total New Energies Limited
Total New Energies USA, Inc.
Total New Energies Ventures USA, Inc.
Total Niger S.A.
Total Nigeria PLC
Total Nuevas Energias Chile SpA
Total Oil Asia-Pacific Pte Limited
Total Oil India PVT Limited
Total Outre-Mer
Total Pacifique
Total Parco Pakistan Limited
Total Parko Marketing Limited
Total Petroleum (Shanghai) Company Limited
Total Petroleum Ghana Limited
Total Petroleum Puerto Rico Corp.
Total Philippines Corporation
Total Polska
Total Polynésie
Total RDC
Total Réunion
Total Romania S.A.
Total Sénégal
Total Sinochem Fuels Company Limited
Total Sinochem Oil Company Limited
Total South Africa (PTY) Limited
Total Specialties USA Inc.
Total Supply MS S.A.
Total Swaziland (PTY) Limited
Total Tanzania Limited
Total Tianjin Manufacturing Company Limited
Total Togo
93.96%
50.10%
100.00%
100.00%
77.00%
63.00%
99.98%
99.98%
100.00%
79.44%
100.00%
100.00%
100.00%
80.78%
100.00%
90.00%
100.00%
100.00%
100.00%
55.00%
55.00%
100.00%
100.00%
100.00%
100.00%
100.00%
50.10%
100.00%
100.00%
100.00%
100.00%
100.00%
61.72%
100.00%
100.00%
100.00%
100.00%
100.00%
50.00%
50.00%
100.00%
76.74%
100.00%
51.00%
100.00%
99.54%
60.00%
100.00%
100.00%
69.14%
49.00%
49.00%
50.10%
100.00%
100.00%
50.10%
100.00%
77.00%
76.72%
E
E
E
E
E
Kenya
Lesotho
Lebanon
Liberia
China
Taiwan
France
France
Luxembourg
Madagascar
Mali
Singapore
France
Egypt
France
Gabon
United Arab Emirates
Chad
Uganda
Morocco
Mauritius Island
France
Mexico
Germany
Germany
Mozambique
Namibia
Netherlands
United Kingdom
United States
United States
Niger
Nigeria
Chile
Singapore
India
France
France
Pakistan
Bahamas
China
Ghana
Puerto Rico
Philippines
Poland
France
Democratic Republic
of Congo
France
Romania
Senegal
China
China
South Africa
United States
Switzerland
Swaziland
Tanzania
China
Togo
Kenya
Lesotho
Lebanon
Liberia
China
Taiwan
France
France
Luxembourg
Madagascar
Mali
Singapore
France
Egypt
France
Gabon
United Arab Emirates
Chad
Uganda
Morocco
Mauritius Island
France
Mexico
Germany
Germany
Mozambique
Namibia
Netherlands
United Kingdom
United States
United States
Niger
Nigeria
Chile
Singapore
India
France
France
Pakistan
Pakistan
China
Ghana
Puerto Rico
Philippines
Poland
France
Democratic Republic
of Congo
France
Romania
Senegal
China
China
South Africa
United States
Switzerland
Swaziland
Tanzania
China
Togo
304
TOTAL. Registration Document 2016
Note 18 – Notes to the Consolidated Financial Statements
Consolidated Financial Statements 10
Business
segment
Statutory corporate name % Group Method Country of Country of
interest incorporation operations
Marketing & Services (contd)
Total Tunisie
Total Turkey Pazarlama
Total UAE LLC
Total Uganda Limited
Total UK Limited
Total Union Océane
Total Vostok
Total Zambia
Total Zimbabwe Limited
Tyczka Totalgaz GmbH
Urim Green Energies Limited
V Energy S.A.
Vandenberg Solar I, LLC
Vega Solar 1 S.A.P.I. de C.V.
Vega Solar 2 S.A.P.I. de C.V.
Vega Solar 3 S.A.P.I. de C.V.
Vega Solar 4 S.A.P.I. de C.V.
Vega Solar 5 S.A.P.I. de C.V.
Whippletree Solar, LLC
Wildwood Solar II, LLC
Wood Draw Solar LLC
Zruha Green Energies Limited 56.73% Israel Israel
Tunisia
Turkey
United Arab Emirates
Uganda
United Kingdom
France
Russia
Zambia
Zimbabwe
Germany
Israel
Dominican Republic
United States
Mexico
Mexico
Mexico
Mexico
Mexico
United States
United States
United States
100.00%
100.00%
49.00%
100.00%
100.00%
100.00%
100.00%
100.00%
80.00%
50.00%
56.73%
70.00%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
56.73%
Tunisia
Turkey
United Arab Emirates
Uganda
United Kingdom
France
Russia
Zambia
Zimbabwe
Germany
Israel
Dominican Republic
United States
United States
United States
United States
United States
United States
United States
United States
United States
E
Corporate
Albatros
Elf Aquitaine
Elf Aquitaine Fertilisants
Elf Aquitaine Inc.
Elf Forest Products LLC
Etmofina
Financière Valorgest
Fingestval
Omnium Reinsurance Company S.A.
Pan Insurance Limited
Septentrion Participations
Socap S.A.S.
Société Civile Immobilière CB2
Sofax Banque
Sogapar
TOTAL S.A.
Total Affiliates Capital USA Inc.
Total American Services Inc.
Total Capital
Total Capital Canada Limited
Total Capital International
Total Corporate Management (Beijing)
Company Limited
Total Delaware Inc.
Total Energy Ventures Europe
Total Energy Ventures International
Total Finance
Total Finance Corporate Services Limited
Total Finance Global Services S.A.
Total Finance International B.V.
Total Finance Nederland B.V.
Total Finance USA Inc.
Total Funding Nederland B.V.
Total Funding Nederland International B.V.
Total Gestion Filiales
Total Gestion USA
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
-
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
France
France
France
United States
United States
Belgium
France
France
Switzerland
Ireland
France
France
France
France
France
France
United States
United States
France
Canada
France
China
United States
France
France
France
United Kingdom
Belgium
Netherlands
Netherlands
United States
Netherlands
Netherlands
France
France
France
France
France
United States
United States
Belgium
France
France
Switzerland
Ireland
France
France
France
France
France
France
United States
United States
France
Canada
France
China
United States
France
France
France
United Kingdom
Belgium
Netherlands
Netherlands
United States
Netherlands
Netherlands
France
France
Registration Document 2016. TOTAL
305
10 Consolidated Financial Statements
Notes to the Consolidated Financial Statements – Note 18
Business
segment
Statutory corporate name % Group Method Country of Country of
interest incorporation operations
Corporate (contd)
Total Global Information Technology Services
Total Global Information Technology Services
Belgium
Total Holding Allemagne
Total Holdings Europe
Total Holdings UK Limited
Total Holdings USA Inc.
Total International NV
Total Nucléaire
Total Operations Canada Limited
Total Overseas Holding (PTY) Limited
Total Participations
Total Petrochemicals & Refining S.A. / NV (c)
Total Petrochemicals & Refining USA Inc. (c)
Total Petrochemicals Security USA Inc.
Total Resources (Canada) Limited
Total Treasury
Total UK Finance Limited
100.00%
99.98%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
France
Belgium
France
Belgium
France
France
United Kingdom
United States
Netherlands
France
Canada
South Africa
France
Belgium
United States
United States
Canada
France
United Kingdom
France
France
United Kingdom
United States
Netherlands
France
Canada
Netherlands
France
Belgium
United States
United States
Canada
France
United Kingdom
(c) Multi-segment entities.
306
TOTAL. Registration Document 2016
Supplemental oil and gas information (unaudited) 11
Supplemental oil
and gas information (unaudited)
1. Oil and gas information pursuant to FASB
Accounting Standards Codification 932 308
1.1. Assessment process for reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .308
1.2. Proved developed reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .309
1.3. Proved undeveloped reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .309
1.4. Estimated proved reserves of oil, bitumen and gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .310
1.5. Results of operations for oil and gas producing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .318
1.6. Cost incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .321
1.7. Capitalized costs related to oil and gas producing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .322
1.8. Standardized measure of discounted future net cash flows (excluding transportation) . . . . . . . . . . . . . . . . . . . . . . . . . . . .323
1.9. Changes in the standardized measure of discounted future net cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .326
2. Other information 327
2.1. Net gas production, production prices and production costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .327
3. Report on the payments made to governments
(Article L. 225-102-3 of the French Commercial Code) 329
3.1. Reporting by country and type of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .330
3.2. Reporting of Payments by Project and by type of Payment, and by Government and by type of Payment . . . . . . . . . . . . .331
Registration Document 2016. TOTAL
307
11 Supplemental oil and gas information
Oil and gas information pursuant to FASB Accounting Standards Codification 932
1. Oil and gas information pursuant to FASB
Accounting Standards Codification 932
Proved reserves estimates are calculated according 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), which
provide definitions and disclosure requirements.
1.1. Assessment process for reserves
The estimation of reserves is an ongoing process that is done
within affiliates by experienced geoscientists, engineers and
economists under the supervision of each affiliate’s General
Management. Staff 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. All of the Group’s proved reserves held in subsidiaries and
equity affiliates are estimated within the affiliates of the Group with
the exception of the proved reserves held by the equity affiliate PAO
Novatek. The assessment of the net proved liquids and natural gas
reserves of certain properties owned by PAO Novatek was
completed as of December 31, 2016, in accordance with the
standards applied by the Group, based on an independent third-
party report from DeGolyer & MacNaughton. These independently
assessed reserves account for 48% of PAO Novatek’s net proved
reserves and 52% of the total net proved reserves TOTAL held in
Russia as of December 31, 2016.
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 an 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
formalized and involves the following elements:
– A central Reserve Entity the responsibility of which 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 and / or their knowledge of the affiliate. All members
of this group, chaired by the Reserves Vice-President (“RVP”) of
the Development and Support to Operations division 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.
– At the end of the annual review carried out by the Development
division and Support to Operations, an SEC Reserves
Committee chaired by the Exploration & Production Senior Vice
President Corporate Affairs and comprised of the Development
and Support to Operations, Exploration, Strategy and Legal
Senior Vice Presidents, or their representatives, as well as the
Chairman of the Technical Reserves Committee and the RVP,
approves the elements of the SEC reserve booking proposals
concerning 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’s General Management and Chief Financial Officer.
The reserves evaluation and control process is audited periodically
by the Group’s internal auditors.
The RVP of the Development and Support to Operations division 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 current RVP has over thirty years of experience in the oil and
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 the current Chairman of
the Society of Petroleum Engineers Oil and Gas Reserves
Committee and a member of the UNECE (United Nations Economic
Commission for Europe) Expert Group on Resource Classification.
308
TOTAL. Registration Document 2016
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Supplemental oil and gas information 11
1.2. Proved developed reserves
As of December 31, 2016, proved developed reserves of hydrocarbons
(crude oil, LNG, bitumen and natural gas) were 6,667 Mboe and
represented 58% of the proved reserves. As of December 31,
2015, proved developed reserves of hydrocarbons (crude oil, LNG,
bitumen and natural gas) were 6,186 Mboe and represented 53%
of the proved reserves. As of December 31, 2014, proved
developed reserves of hydrocarbons (crude oil, LNG, bitumen and
natural gas) were 5,706 Mboe and represented 50% of the proved
reserves. Over the past three years, the average of proved
developed reserves renewal has remained above 1,100 Mboe per
year, illustrating TOTAL’s ability to consistently transfer proved
undeveloped reserves into developed status.
1.3. Proved undeveloped reserves
As of December 31, 2016, TOTAL’s combined proved undeveloped
reserves of oil and gas were 4,851 Mboe compared to 5,394 Mboe
at the end of 2015. The decrease of 543 Mboe of proved
undeveloped reserves was due to the addition of 440 Mboe of
undeveloped reserves related to extensions and discoveries,
-340 Mboe due to revisions of previous estimates, -108 Mboe
related to acquisitions / divestitures and -535 Mboe due to the
booking of proved undeveloped reserves to proved developed
reserves. In 2016, the cost incurred to develop proved undeveloped
reserves (PUDs) was $11.8 billion, which represented 87% of 2016
development costs incurred, and was related to projects located
for the most part in Angola, Australia, Canada, the Republic
of the Congo, Kazakhstan, Nigeria, Norway, the United Arab Emirates
and the United Kingdom.
The revisions to previous estimates of -340 Mboe were due to:
– -16 Mboe due to new information obtained from drilling and
production history, including primarily revision of the proved
undeveloped reserves in some fields in Russia, the Republic of
the Congo and Nigeria, and additional infill wells in Qatar and the
United Arab Emirates;
– -262 Mboe due to economic factors as a result of lower yearly
average hydrocarbon prices, including primarily a partial
debooking of the Canadian oil sands proved undeveloped
reserves, an economic cut-off effect (i.e., end of economic
production coming earlier) on several fields, partially
compensated by a higher entitlement share (from, in particular,
assets in Canada and certain other production sharing and
risked service contracts); and
– -62 Mboe due to other revisions including reclassification of
certain projects out of proved reserves primarily in Nigeria and
the United States.
The overall decrease of -108 Mboe related to acquisitions / divestitures
consists primarily of divestitures, including mainly the sales of a
1.87% interest in Yamal (Russia), a 10% interest in Incahuasi & Aquio
(Bolivia), a 20% interest in Kharyaga (Russia) and a 15% interest in
Gina Krog (Norway).
Approximately 44% of the Group’s proved undeveloped reserves
are associated with producing projects and are located for the most
part in Russia, Kazakhstan, Nigeria, Norway, Canada and Qatar.
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 levels. 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 reserves have remained proved
undeveloped for more than five years or the Group 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 29% of the Group’s proved undeveloped
reserves and include developments in deep offshore Nigeria,
in offshore Australia and Norway and in 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 market and 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. 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 develop and bring into production
similar large scale and complex projects, including the development
of deep-offshore fields in Angola, Nigeria, the Republic of the Congo,
HP / HT fields in the United Kingdom, heavy oil projects in Venezuela
and LNG projects in Qatar, Yemen, Nigeria and Indonesia.
The tables provided below are presented by the following
geographic areas: Europe and Central Asia (with figures shown for
Russia separately), Africa (excluding North Africa), the Americas,
Middle East and North Africa, and Asia-Pacific.
Registration Document 2016. TOTAL
309
11 Supplemental oil and gas information
Oil and gas information pursuant to FASB Accounting Standards Codification 932
1.4. Estimated proved reserves of oil, bitumen and gas
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, 2016, 2015 and 2014.
Quantities shown correspond to proved developed and
undeveloped reserves together with changes in quantities for 2016,
2015 and 2014.
– -347 Mboe due to economic factors as a result of lower yearly
average hydrocarbon prices, including primarily a partial
debooking of the Canadian oil sands proved undeveloped
reserves, as well as an earlier economic limit on a number of
other assets, partly compensated, in particular, by higher
entitlement share from production sharing and risked service
contracts; and
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.
– -61 Mboe due to other revisions including primarily a
reclassification of certain projects out of proved reserves on a
number of other assets.
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.
Significant changes in proved reserves between 2015 and 2016 are
discussed below.
For consolidated subsidiaries, the revisions of +88 Mboe for the
year 2016 were due to:
– +496 Mboe due to new information obtained from drilling and
production history mainly in the United Arab Emirates and the
United States and the rebooking of certain fields onshore in Libya
that re-started production;
The acquisition in the Americas corresponds to the purchase of
Chesapeake’s share in the Barnett closed in November 2016.
For equity affiliates, the revisions of +83 Mboe for the year 2016
were due to:
– +58 Mboe mainly due to new information obtained from drilling
and production history mainly in Qatar and Russia; and
– +25 Mboe due to economic factors related to a higher entitlement
share as a result of lower yearly average hydrocarbon prices.
The extensions in Russia correspond mainly to the booking of the
two last gas sales agreements on Yamal LNG.
The acquisition in the zone of Middle East and North Africa
corresponds to the entry in the Northern Oil Company operating
the Al Shaheen field in Qatar.
Price impact on proved reserves
(in million barrels of oil equivalent)
Consolidated subsidiaries and equity affiliates
Proved reserves 2016 based on SEC rules (42.82 $/b)(a) 11,518
Price impact 387
Proved reserves 2016 at constant price (54.17 $/b)(b) 11,905
(a) 42.82 $/b was the average Brent price of the first day of each month of 2016.
(b) 54.17 $/b was the average Brent price of the first day of each month of 2015.
310
TOTAL. Registration Document 2016
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Supplemental oil and gas information 11
1.4.1. Changes in oil, bitumen and gas reserves
(in million barrels of oil equivalent)
Consolidated subsidiaries
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
Proved developed and undeveloped reserves (excl. Russia) Africa) Africa
Balance as of December 31, 2013 -
Brent at 108.02 $/b 2,287 28 2,414 590 1,824 1,082 8,225
Revisions of previous estimates 26 4 42 13 (11) 26 100
Extensions, discoveries and other 21 - 111 3 151 29 315
Acquisitions of reserves in place 1 - - - - - 1
Sales of reserves in place (232) - (21) - - - (253)
Production for the year (138) (3) (222) (49) (76) (87) (575)
Balance as of December 31, 2014 -
Brent at 101.27 $/b 1,965 29 2,324 557 1,888 1,050 7,813
Revisions of previous estimates 1 - (4) (7) 144 62 196
Extensions, discoveries and other 11 - 9 864 6 7 897
Acquisitions of reserves in place - - - - - - -
Sales of reserves in place (28) - (76) - (160) - (264)
Production for the year (137) (4) (233) (105) (79) (94) (652)
Balance as of December 31, 2015 -
Brent at 54.17 $/b 1,812 25 2,020 1,309 1,799 1,025 7,990
Revisions of previous estimates 49 1 1 232 (234) 39 88
Extensions, discoveries and other 47 - 11 5 33 15 111
Acquisitions of reserves in place - - - - 152 - 152
Sales of reserves in place (27) (13) - - (21) - (61)
Production for the year (155) (2) (230) (104) (90) (97) (678)
Balance as of December 31, 2016 -
Brent at 42.82 $/b 1,726 11 1,802 1,442 1,639 982 7,602
Minority interest in proved developed and undeveloped reserves as of
December 31, 2014 - Brent at 101.27 $/b - - 146 - - - 146
December 31, 2015 - Brent at 54.17 $/b - - 128 - - - 128
December 31, 2016 - Brent at 42.82 $/b - - 105 - - - 105
(in million barrels of oil equivalent)
Equity affiliates
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
Proved developed and undeveloped reserves (excl. Russie) Africa) Africa
Balance as of December 31, 2013 -
Brent at 108.02 $/b - 1,642 76 1,335 248 - 3,301
Revisions of previous estimates - 6 (2) (8) 2 - (2)
Extensions, discoveries and other - 516 - 2 - - 518
Acquisitions of reserves in place - 107 - - - - 107
Sales of reserves in place - (6) - - - - (6)
Production for the year - (83) (1) (110) (14) - (208)
Balance as of December 31, 2014 -
Brent at 101.27 $/b - 2,182 73 1,219 236 - 3,710
Revisions of previous estimates - 96 (2) (10) (44) - 40
Extensions, discoveries and other - - - - - - -
Acquisitions of reserves in place - 56 - - - - 56
Sales of reserves in place - (12) - - - - (12)
Production for the year - (102) - (88) (14) - (204)
Balance as of December 31, 2015 -
Brent at 54.17 $/b - 2,220 71 1,121 178 - 3,590
Revisions of previous estimates - 16 - 68 (1) - 83
Extensions, discoveries and other - 331 - - - - 331
Acquisitions of reserves in place - - - 190 - - 190
Sales of reserves in place - (59) - - - - (59)
Production for the year - (119) (1) (87) (12) - (219)
Balance as of December 31, 2016 -
Brent at 42.82 $/b - 2,389 70 1,292 165 - 3,916
Registration Document 2016. TOTAL
311
11 Supplemental oil and gas information
Oil and gas information pursuant to FASB Accounting Standards Codification 932
(in million barrels of oil equivalent)
Consolidated subsidiaries and equity affiliates
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
(excl. Russia) Africa) Africa
As of December 31, 2014 -
Brent at 101.27 $/b
Proved developed
and undeveloped reserves 1,965 2,211 2,397 1,776 2,124 1,050 11,523
Consolidated subsidiaries 1,965 29 2,324 557 1,888 1,050 7,813
Equity affiliates - 2,182 73 1,219 236 - 3,710
Proved developed reserves 991 1,067 1,321 1,593 535 199 5,706
Consolidated subsidiaries 991 18 1,304 467 450 199 3,429
Equity affiliates - 1,049 17 1,126 85 - 2,277
Proved undeveloped reserves 974 1,144 1,076 183 1,589 851 5,817
Consolidated subsidiaries 974 11 1,020 90 1,438 851 4,384
Equity affiliates - 1,133 56 93 151 - 1,433
As of December 31, 2015 -
Brent at 54.17 $/b
Proved developed
and undeveloped reserves 1,812 2,245 2,091 2,430 1,977 1,025 11,580
Consolidated subsidiaries 1,812 25 2,020 1,309 1,799 1,025 7,990
Equity affiliates - 2,220 71 1,121 178 - 3,590
Proved developed reserves 1,009 1,070 1,173 2,062 626 246 6,186
Consolidated subsidiaries 1,009 16 1,161 1,070 549 246 4,051
Equity affiliates - 1,054 12 992 77 - 2,135
Proved undeveloped reserves 803 1,175 918 368 1,351 779 5,394
Consolidated subsidiaries 803 9 859 239 1,250 779 3,939
Equity affiliates - 1,166 59 129 101 - 1,455
As of December 31, 2016 -
Brent at 42.82 $/b
Proved developed
and undeveloped reserves 1,726 2,400 1,872 2,734 1,804 982 11,518
Consolidated subsidiaries 1,726 11 1,802 1,442 1,639 982 7,602
Equity affiliates - 2,389 70 1,292 165 - 3,916
Proved developed reserves 1,025 1,017 1,141 2,281 979 224 6,667
Consolidated subsidiaries 1,025 7 1,132 1,158 897 224 4,443
Equity affiliates - 1,010 9 1,123 82 - 2,224
Proved undeveloped reserves 701 1,383 731 453 825 758 4,851
Consolidated subsidiaries 701 4 670 284 742 758 3,159
Equity affiliates - 1,379 61 169 83 - 1,692
312
TOTAL. Registration Document 2016
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Supplemental oil and gas information 11
1.4.2. Changes in oil reserves
The oil reserves include crude oil, condensates and natural gas liquids reserves.
(in million barrels)
Consolidated subsidiaries
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
Proved developed and undeveloped reserves (excl. Russia) Africa) Africa
Balance as of December 31, 2013 -
Brent at 108.02 $/b 1,131 25 1,758 345 86 211 3,556
Revisions of previous estimates 13 4 27 11 3 5 63
Extensions, discoveries and other 3 - 101 3 14 2 123
Acquisitions of reserves in place - - - - - - -
Sales of reserves in place (43) - (20) - - - (63)
Production for the year (61) (3) (178) (32) (15) (11) (300)
Balance as of December 31, 2014 -
Brent at 101.27 $/b 1,043 26 1,688 327 88 207 3,379
Revisions of previous estimates (9) - 3 (46) 27 10 (15)
Extensions, discoveries and other 4 - 8 856 2 - 870
Acquisitions of reserves in place - - - - - - -
Sales of reserves in place (3) - (58) - - - (61)
Production for the year (59) (3) (191) (86) (16) (12) (367)
Balance as of December 31, 2015 -
Brent at 54.17 $/b 976 23 1,450 1,051 101 205 3,806
Revisions of previous estimates 22 1 6 239 (9) 6 265
Extensions, discoveries and other 14 - 11 4 11 - 40
Acquisitions of reserves in place - - - - - - -
Sales of reserves in place (13) (11) - - (2) - (26)
Production for the year (63) (3) (185) (84) (16) (11) (362)
Balance as of December 31, 2016 -
Brent at 42.82 $/b 936 10 1,282 1,210 85 200 3,723
Minority interest in proved developed and undeveloped reserves as of
December 31, 2014 - Brent at 101.27 $/b - - 128 - - - 128
December 31, 2015 - Brent at 54.17 $/b - - 115 - - - 115
December 31, 2016 - Brent at 42.82 $/b - - 95 - - - 95
(in million barrels)
Equity affiliates
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
Proved developed and undeveloped reserves (excl. Russia) Africa) Africa
Balance as of December 31, 2013 -
Brent at 108.02 $/b - 148 12 372 237 - 769
Revisions of previous estimates - (3) (5) (3) 2 - (9)
Extensions, discoveries and other - 81 - 3 - - 84
Acquisitions of reserves in place - 9 - - - - 9
Sales of reserves in place - (1) - - - - (1)
Production for the year - (9) - (51) (13) - (73)
Balance as of December 31, 2014 -
Brent at 101.27 $/b - 225 7 321 226 - 779
Revisions of previous estimates - 34 6 (11) (42) - (13)
Extensions, discoveries and other - - - - - - -
Acquisitions of reserves in place - 6 - - - - 6
Sales of reserves in place - (2) - - - - (2)
Production for the year - (17) - (50) (14) - (81)
Balance as of December 31, 2015 -
Brent at 54.17 $/b - 246 13 260 170 - 689
Revisions of previous estimates - 42 - 58 (1) - 99
Extensions, discoveries and other - 15 - - - - 15
Acquisitions of reserves in place - - - 167 - - 167
Sales of reserves in place - (2) - - - - (2)
Production for the year - (25) - (53) (12) - (90)
Balance as of December 31, 2016 -
Brent at 42.82 $/b - 276 13 432 157 - 878
Registration Document 2016. TOTAL
313
11 Supplemental oil and gas information
Oil and gas information pursuant to FASB Accounting Standards Codification 932
(in million barrels)
Consolidated subsidiaries and equity affiliates
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
Proved developed and undeveloped reserves (excl. Russia) Africa) Africa
As of December 31, 2014 -
Brent at 101.27 $/b
Proved developed
and undeveloped reserves (a) 1,043 251 1,695 648 314 207 4,158
Consolidated subsidiaries 1,043 26 1,688 327 88 207 3,379
Equity affiliates - 225 7 321 226 - 779
Proved developed reserves 446 136 934 512 136 17 2,181
Consolidated subsidiaries 446 16 930 252 54 17 1,715
Equity affiliates - 120 4 260 82 - 466
Proved undeveloped reserves 597 115 761 136 178 190 1,977
Consolidated subsidiaries 597 10 758 75 34 190 1,664
Equity affiliates - 105 3 61 144 - 313
As of December 31, 2015 -
Brent at 54.17 $/b
Proved developed
and undeveloped reserves (a) 976 269 1,463 1,311 271 205 4,495
Consolidated subsidiaries 976 23 1,450 1,051 101 205 3,806
Equity affiliates - 246 13 260 170 - 689
Proved developed reserves 445 151 836 1,061 145 17 2,655
Consolidated subsidiaries 445 15 833 846 71 17 2,227
Equity affiliates - 136 3 215 74 - 428
Proved undeveloped reserves 531 118 627 250 126 188 1,840
Consolidated subsidiaries 531 8 617 205 30 188 1,579
Equity affiliates - 110 10 45 96 - 261
As of December 31, 2016 -
Brent at 42.82 $/b
Proved developed
and undeveloped reserves (a) 936 286 1,295 1,642 242 200 4,601
Consolidated subsidiaries 936 10 1,282 1,210 85 200 3,723
Equity affiliates - 276 13 432 157 - 878
Proved developed reserves 476 152 819 1,309 151 14 2,921
Consolidated subsidiaries 476 7 816 955 73 14 2,341
Equity affiliates - 145 3 354 78 - 580
Proved undeveloped reserves 460 134 476 333 91 186 1,680
Consolidated subsidiaries 460 3 466 255 12 186 1,382
Equity affiliates - 131 10 78 79 - 298
(a) The tables do not include separate figures for NGL reserves because they represented less than 8.5% of the Group’s proved developed and undeveloped oil reserves in each of the years
2014, 2015 and 2016.
314
TOTAL. Registration Document 2016
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Supplemental oil and gas information 11
1.4.3. Changes in bitumen reserves
(in million barrels)
Consolidated subsidiaries
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
Proved developed and undeveloped reserves (excl. Russia) Africa) Africa
Balance as of December 31, 2013 -
Brent at 108.02 $/b - - - - 1,088 - 1,088
Revisions of previous estimates - - - - (25) - (25)
Extensions, discoveries and other - - - - 87 - 87
Acquisitions of reserves in place - - - - - - -
Sales of reserves in place - - - - - - -
Production for the year - - - - (5) - (5)
Balance as of December 31, 2014 -
Brent at 101.27 $/b - - - - 1,145 - 1,145
Revisions of previous estimates - - - - 130 - 130
Extensions, discoveries and other - - - - - - -
Acquisitions of reserves in place - - - - - - -
Sales of reserves in place - - - - (160) - (160)
Production for the year - - - - (5) - (5)
Balance as of December 31, 2015 -
Brent at 54.17 $/b - - - - 1,110 - 1,110
Revisions of previous estimates - - - - (284) - (284)
Extensions, discoveries and other - - - - - - -
Acquisitions of reserves in place - - - - - - -
Sales of reserves in place - - - - - - -
Production for the year - - - - (13) - (13)
Balance as of December 31, 2016 -
Brent at 42.82 $/b - - - - 813 - 813
Proved developed reserves as of
December 31, 2014 - Brent at 101.27 $/b - - - - 17 - 17
December 31, 2015 - Brent at 54.17 $/b - - - - 100 - 100
December 31, 2016 - Brent at 42.82 $/b - - - - 160 - 160
Proved undeveloped reserves as of
December 31, 2014 - Brent at 101.27 $/b - - - - 1,128 - 1,128
December 31, 2015 - Brent at 54.17 $/b - - - - 1,010 - 1,010
December 31, 2016 - Brent at 42.82 $/b - - - - 653 - 653
There are no bitumen reserves for equity affiliates.
There are no minority interests for bitumen reserves.
Registration Document 2016. TOTAL
315
11 Supplemental oil and gas information
Oil and gas information pursuant to FASB Accounting Standards Codification 932
1.4.4. Changes in gas reserves
(in billion cubic feet)
Consolidated subsidiaries
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
Proved developed and undeveloped reserves (excl. Russia) Africa) Africa
Balance as of December 31, 2013 -
Brent at 108.02 $/b 6,205 16 3,291 1,385 3,663 4,782 19,342
Revisions of previous estimates 81 - 82 11 54 117 345
Extensions, discoveries and other 99 - 56 1 296 154 606
Acquisitions of reserves in place 6 - - - - - 6
Sales of reserves in place (1,038) - (6) - - - (1,044)
Production for the year (419) (1) (220) (97) (320) (431) (1,488)
Balance as of December 31, 2014 -
Brent at 101.27 $/b 4,934 15 3,203 1,300 3,693 4,622 17,767
Revisions of previous estimates 55 1 (57) 197 (92) 296 400
Extensions, discoveries and other 40 - 7 42 24 38 151
Acquisitions of reserves in place - - - - - - -
Sales of reserves in place (135) - (93) - - - (228)
Production for the year (424) (1) (212) (110) (324) (471) (1,542)
Balance as of December 31, 2015 -
Brent at 54.17 $/b 4,470 15 2,848 1,429 3,301 4,485 16,548
Revisions of previous estimates 143 (2) (44) (28) 347 189 605
Extensions, discoveries and other 173 - - 7 126 85 391
Acquisitions of reserves in place - - - - 874 - 874
Sales of reserves in place (80) (7) - - (101) - (188)
Production for the year (498) (1) (220) (111) (343) (494) (1,667)
Balance as of December 31, 2016 -
Brent at 42.82 $/b 4,208 5 2,584 1,297 4,204 4,265 16,563
Minority interest in proved developed and undeveloped reserves as of
December 31, 2014 - Brent at 101.27 $/b - - 91 - - - 91
December 31, 2015 - Brent at 54.17 $/b - - 64 - - - 64
December 31, 2016 - Brent at 42.82 $/b - - 48 - - - 48
(in billion cubic feet)
Equity affiliates
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
Proved developed and undeveloped reserves (excl. Russia) Africa) Africa
Balance as of December 31, 2013 -
Brent at 108.02 $/b - 8,029 343 5,250 62 - 13,684
Revisions of previous estimates - 50 17 (25) 2 - 44
Extensions, discoveries and other - 2,328 - - - - 2,328
Acquisitions of reserves in place - 521 - - - - 521
Sales of reserves in place - (28) - - - - (28)
Production for the year - (392) (4) (328) (2) - (726)
Balance as of December 31, 2014 -
Brent at 107.27 $/b - 10,508 356 4,897 62 - 15,823
Revisions of previous estimates - 337 (45) 6 (11) - 287
Extensions, discoveries and other - - - - - - -
Acquisitions of reserves in place - 267 - - - - 267
Sales of reserves in place - (52) - - - - (52)
Production for the year - (456) - (208) (3) - (667)
Balance as of December 31, 2015 -
Brent at 54.17 $/b - 10,604 311 4,695 48 - 15,658
Revisions of previous estimates - (132) (3) 51 (1) - (85)
Extensions, discoveries and other - 1,717 - - - - 1,717
Acquisitions of reserves in place - - - 132 - - 132
Sales of reserves in place - (308) - - - - (308)
Production for the year - (503) (7) (181) (2) - (693)
Balance as of December 31, 2016 -
Brent at 42.82 $/b - 11,378 301 4,697 45 - 16,421
316
TOTAL. Registration Document 2016
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Supplemental oil and gas information 11
(in billion cubic feet)
Consolidated subsidiaries and equity affiliates
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
(excl. Russia) Africa) Africa
As of December 31, 2014 -
Brent at 101.27 $/b
Proved developed
and undeveloped reserves 4,934 10,523 3,559 6,197 3,755 4,622 33,590
Consolidated subsidiaries 4,934 15 3,203 1,300 3,693 4,622 17,767
Equity affiliates - 10,508 356 4,897 62 - 15,823
Proved developed reserves 2,914 4,958 1,939 5,946 2,167 1,109 19,033
Consolidated subsidiaries 2,914 9 1,871 1,224 2,145 1,109 9,272
Equity affiliates - 4,949 68 4,722 22 - 9,761
Proved undeveloped reserves 2,020 5,565 1,620 251 1,588 3,513 14,557
Consolidated subsidiaries 2,020 6 1,332 76 1,548 3,513 8,495
Equity affiliates - 5,559 288 175 40 - 6,062
As of December 31, 2015 -
Brent at 54.17 $/b
Proved developed
and undeveloped reserves 4,470 10,619 3,159 6,124 3,349 4,485 32,206
Consolidated subsidiaries 4,470 15 2,848 1,429 3,301 4,485 16,548
Equity affiliates - 10,604 311 4,695 48 - 15,658
Proved developed reserves 3,021 4,890 1,657 5,511 2,153 1,378 18,610
Consolidated subsidiaries 3,021 6 1,610 1,277 2,133 1,378 9,425
Equity affiliates - 4,884 47 4,234 20 - 9,185
Proved undeveloped reserves 1,449 5,729 1,502 613 1,196 3,107 13,596
Consolidated subsidiaries 1,449 9 1,238 152 1,168 3,107 7,123
Equity affiliates - 5,720 264 461 28 - 6,473
As of December 31, 2016 -
Brent at 42.82 $/b
Proved developed
and undeveloped reserves 4,208 11,383 2,885 5,994 4,249 4,265 32,984
Consolidated subsidiaries 4,208 5 2,584 1,297 4,204 4,265 16,563
Equity affiliates (a) - 11,378 301 4,697 45 - 16,421
Proved developed reserves 2,912 4,606 1,582 5,356 3,774 1,260 19,490
Consolidated subsidiaries 2,912 3 1,545 1,157 3,751 1,260 10,628
Equity affiliates - 4,603 37 4,199 23 - 8,862
Proved undeveloped reserves 1,296 6,777 1,303 638 475 3,005 13,494
Consolidated subsidiaries 1,296 2 1,039 140 453 3,005 5,935
Equity affiliates - 6,775 264 498 22 - 7,559
Registration Document 2016. TOTAL
317
11 Supplemental oil and gas information
Oil and gas information pursuant to FASB Accounting Standards Codification 932
1.5. Results of operations for oil and gas producing activities
The following tables do not include revenues and expenses related to oil and gas transportation activities and LNG liquefaction and transportation.
(M$)
Consolidated subsidiaries
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
(excl. Russia) Africa) Africa
2014
Revenues Non-Group sales 2,200 - 2,885 1,480 1,195 4,296 12,056
Group sales 6,064 236 13,010 1,348 971 644 22,273
Total Revenues 8,264 236 15,895 2,828 2,166 4,940 34,329
Production costs (1,800) (44) (2,166) (559) (466) (666) (5,701)
Exploration expenses (636) (9) (520) (255) (183) (362) (1,965)
Depreciation, depletion
and amortization and valuation allowances (2,170) (97) (4,570) (724) (5,717) (1,877) (15,155)
Other expenses (a) (419) (29) (1,172) (317) (402) (167) (2,506)
Pre-tax income from
producing activities (b) 3,239 57 7,467 973 (4,602) 1,868 9,002
Income tax (1,693) (32) (5,513) (887) 882 (1,149) (8,392)
Results of oil and
gas producing activities (b) 1,546 25 1,954 86 (3,720) 719 610
(a) Included production taxes and accretion expense as provided for by IAS 37 ($526 million in 2014).
(b) Including adjustment items (see section 10 Notes 3.B, 3.C and 3.D) applicable to ASC 932 perimeter, amounting to a net charge of $6,532 million before tax and $5,364 million after
tax, mainly related to asset impairments.
2015
Revenues Non-Group sales 1,345 - 989 2,340 970 3,013 8,657
Group sales 3,816 129 7,816 1,858 271 356 14,246
Total Revenues 5,161 129 8,805 4,198 1,241 3,369 22,903
Production costs (1,521) (34) (1,779) (659) (497) (456) (4,946)
Exploration expenses (661) (3) (615) (226) (114) (372) (1,991)
Depreciation, depletion
and amortization and valuation allowances (2,415) (203) (6,155) (1,344) (1,548) (3,483) (15,148)
Other expenses (a) (350) (16) (722) (2,756) (280) (121) (4,245)
Pre-tax income from
producing activities (b) 214 (127) (466) (787) (1,198) (1,063) (3,427)
Income tax 458 (4) (220) (123) 210 (173) 148
Results of oil and
gas producing activities (b) 672 (131) (686) (910) (988) (1,236) (3,279)
(a) Included production taxes and accretion expense as provided for by IAS 37 ($497 million in 2015).
(b) Including adjustment items (see section 10 Notes 3.B, 3.C and 3.D) applicable to ASC 932 perimeter, amounting to a net charge of $7,104 million before tax and $5,039 million after tax,
mainly related to asset impairments.
318
TOTAL. Registration Document 2016
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Supplemental oil and gas information 11
(M$)
Consolidated subsidiaries
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
(excl. Russia) Africa) Africa
2016
Revenues Non-Group sales 1,075 - 507 613 963 2,113 5,271
Group sales 3,046 72 6,826 3,033 494 444 13,915
Total Revenues 4,121 72 7,333 3,646 1,457 2,557 19,186
Production costs (1,083) (30) (1,601) (478) (488) (351) (4,031)
Exploration expenses (512) (3) (108) (368) (196) (77) (1,264)
Depreciation, depletion
and amortization and valuation allowances (3,421) (89) (4,566) (599) (603) (1,191) (10,469)
Other expenses (a) (339) (8) (615) (2,328) (224) (97) (3,611)
Pre-tax income from
producing activities (b) (1,234) (58) 443 (127) (54) 841 (189)
Income tax 818 14 (143) (205) (27) (184) 273
Results of oil and
gas producing activities (b) (416) (44) 300 (332) (81) 657 84
(a) Included production taxes and accretion expense as provided for by IAS 37 ($507 million in 2016).
(b) Including adjustment items (see section 10 Notes 3.B, 3.C and 3.D) applicable to ASC 932 perimeter, amounting to a net charge of $1,943 million before tax and $1,198 million after tax,
mainly related to asset impairments.
Registration Document 2016. TOTAL
319
11 Supplemental oil and gas information
Oil and gas information pursuant to FASB Accounting Standards Codification 932
(M$)
Equity affiliates
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
(excl. Russia) Africa) Africa
2014
Revenues Non-Group sales - 1,117 - 2,094 - - 3,211
Group sales - (249) (21) 4,854 885 - 5,469
Total Revenues - 868 (21) 6,948 885 - 8,680
Production costs - (121) - (311) (123) - (555)
Exploration expenses - (1) - - - - (1)
Depreciation, depletion
and amortization and valuation allowances - (54) - (304) (87) - (445)
Other expenses - (142) - (3,806) (537) - (4,485)
Pre-tax income from
producing activities - 550 (21) 2,527 138 - 3,194
Income tax - (140) - (689) (207) - (1,036)
Results of oil and
gas producing activities - 410 (21) 1,838 (69) - 2,158
2015
Revenues Non-Group sales - 670 - 812 380 - 1,862
Group sales - - - 2,404 10 - 2,414
Total Revenues - 670 - 3,216 390 - 4,276
Production costs - (127) - (295) (54) - (476)
Exploration expenses - (1) - - - - (1)
Depreciation, depletion
and amortization and valuation allowances - (58) - (400) (98) - (556)
Other expenses - (134) - (1,638) (170) - (1,942)
Pre-tax income from
producing activities - 350 - 883 68 - 1,301
Income tax - (65) - (184) (36) - (285)
Results of oil and
gas producing activities - 285 - 699 32 - 1,016
2016
Revenues Non-Group sales - 831 - 399 310 - 1,540
Group sales - - - 2,104 (11) - 2,093
Total Revenues - 831 - 2,503 299 - 3,633
Production costs - (103) - (246) (42) - (391)
Exploration expenses - (4) - - - - (4)
Depreciation, depletion
and amortization and valuation allowances - (137) - (496) (94) - (727)
Other expenses - (109) - (1,274) (116) - (1,499)
Pre-tax income from producing activities - 478 - 487 47 - 1,012
Income tax - (80) - (107) 55 - (132)
Results of oil and gas
producing activities - 398 - 380 102 - 880
320
TOTAL. Registration Document 2016
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Supplemental oil and gas information 11
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$)
Consolidated subsidiaries
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
(excl. Russia) Africa) Africa
2014
Proved property acquisition 80 - 17 (1) - 9 105
Unproved property acquisition 82 - 69 7 544 1 703
Exploration costs 500 9 882 403 375 451 2,620
Development costs (a) 5,151 116 8,037 567 3,468 3,024 20,363
Total cost incurred 5,813 125 9,005 976 4,387 3,485 23,791
2015
Proved property acquisition 57 - 59 1,039 - 10 1,165
Unproved property acquisition - 4 26 1,205 199 4 1,438
Exploration costs 618 3 287 263 515 261 1,947
Development costs (a) 4,735 97 7,582 600 3,143 2,381 18,538
Total cost incurred 5,410 104 7,954 3,107 3,857 2,656 23,088
2016
Proved property acquisition 102 1 31 10 415 - 559
Unproved property acquisition 5 - 19 1 289 15 329
Exploration costs 594 3 145 93 387 166 1,388
Development costs (a) 3,041 30 5,977 729 2,032 898 12,707
Total cost incurred 3,742 34 6,172 833 3,123 1,079 14,983
(M$)
Equity affiliates
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
(excl. Russia) Africa) Africa
2014
Proved property acquisition - 246 - - - - 246
Unproved property acquisition - 32 - - - - 32
Exploration costs - - - - - - -
Development costs (a) - 692 - 500 195 - 1,387
Total cost incurred - 970 - 500 195 - 1,665
2015
Proved property acquisition - 218 - - - - 218
Unproved property acquisition - 14 - - - - 14
Exploration costs - - - 8 - - 8
Development costs (a) - 405 - 398 83 - 886
Total cost incurred - 637 - 406 83 - 1,126
2016
Proved property acquisition - - - 35 - - 35
Unproved property acquisition - - - - - - -
Exploration costs - - - 7 - - 7
Development costs (a) - 243 - 502 61 - 806
Total cost incurred - 243 - 544 61 - 848
(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 2016. TOTAL
321
11 Supplemental oil and gas information
Oil and gas information pursuant to FASB Accounting Standards Codification 932
1.7. Capitalized costs related to oil and gas producing activities
Capitalized costs represent the amount of capitalized proved and unproved property costs, including support equipement and facilities,
along with the related accumulated depreciation, depletion and amortization. The following tables do not include capitalized costs related to
oil and gas transportation and LNG liquefaction and transportation activities.
(M$)
Consolidated subsidiaries
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
(excl. Russia) Africa) Africa
As of December 31, 2014
Proved properties 56,698 1,066 66,173 11,219 17,774 20,368 173,298
Unproved properties 1,148 - 4,790 821 8,309 1,210 16,278
Total capitalized costs 57,846 1,066 70,963 12,040 26,083 21,578 189,576
Accumulated depreciation,
depletion and amortization (28,946) (496) (32,725) (8,017) (10,657) (10,807) (91,648)
Net capitalized costs 28,900 570 38,238 4,023 15,426 10,771 97,928
As of December 31, 2015
Proved properties 55,050 1,163 73,842 12,816 19,630 22,886 185,387
Unproved properties 1,018 4 4,362 2,058 8,915 997 17,354
Total capitalized costs 56,068 1,167 78,204 14,874 28,545 23,883 202,741
Accumulated depreciation,
depletion and amortization (28,341) (699) (39,259) (9,283) (11,488) (13,647) (102,717)
Net capitalized costs 27,727 468 38,945 5,591 17,057 10,236 100,024
As of December 31, 2016
Proved properties 54,611 600 78,638 11,275 23,392 23,622 192,138
Unproved properties 1,000 4 4,357 1,657 8,611 1,037 16,666
Total capitalized costs 55,611 604 82,995 12,932 32,003 24,659 208,804
Accumulated depreciation,
depletion and amortization (29,227) (385) (42,988) (7,973) (12,764) (14,735) (108,072)
Net capitalized costs 26,384 219 40,007 4,959 19,239 9,924 100,732
322
TOTAL. Registration Document 2016
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Supplemental oil and gas information 11
(M$)
Equity affiliates
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
(excl. Russia) Africa) Africa
As of December 31, 2014
Proved properties - 4,347 - 5,916 1,411 - 11,674
Unproved properties - 895 - - - - 895
Total capitalized costs - 5,242 - 5,916 1,411 - 12,569
Accumulated depreciation,
depletion and amortization - (635) - (4,764) (310) - (5,709)
Net capitalized costs - 4,607 - 1,152 1,101 - 6,860
As of December 31, 2015
Proved properties - 4,573 - 4,323 1,500 - 10,396
Unproved properties - 202 - - - - 202
Total capitalized costs - 4,775 - 4,323 1,500 - 10,598
Accumulated depreciation,
depletion and amortization - (655) - (3,192) (403) - (4,250)
Net capitalized costs - 4,120 - 1,131 1,097 - 6,348
As of December 31, 2016
Proved properties - 5,802 - 5,029 1,600 - 12,431
Unproved properties - 211 - - - - 211
Total capitalized costs - 6,013 - 5,029 1,600 - 12,642
Accumulated depreciation,
depletion and amortization - (1,026) - (3,850) (506) - (5,382)
Net capitalized costs - 4,987 - 1,179 1,094 - 7,260
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 rate
profiles are based on existing technical and economic conditions;
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.
Registration Document 2016. TOTAL
323
11 Supplemental oil and gas information
Oil and gas information pursuant to FASB Accounting Standards Codification 932
(M$)
Consolidated subsidiaries
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
(excl. Russia) Africa) Africa
As of December 31, 2014
Future cash inflows 129,535 2,294 168,785 33,404 87,965 44,599 466,582
Future production costs (30,633) (1,255) (47,514) (8,522) (38,776) (9,789) (136,489)
Future development costs (32,110) (780) (34,965) (4,253) (16,728) (8,595) (97,431)
Future income taxes (21,287) (172) (50,633) (11,310) (5,891) (7,552) (96,845)
Future net cash flows, after income taxes 45,505 87 35,673 9,319 26,570 18,663 135,817
Discount at 10% (26,240) (5) (13,955) (4,244) (19,489) (11,110) (75,043)
Standardized measure of
discounted future net cash flows 19,265 82 21,718 5,075 7,081 7,553 60,774
As of December 31, 2015
Future cash inflows 69,411 1,045 75,060 57,478 40,866 26,904 270,764
Future production costs (20,263) (512) (27,455) (46,510) (24,103) (8,355) (127,198)
Future development costs (20,418) (495) (24,843) (5,099) (11,104) (6,289) (68,248)
Future income taxes (7,516) (28) (12,050) (1,839) (1,105) (3,046) (25,584)
Future net cash flows, after income taxes 21,214 10 10,712 4,030 4,554 9,214 49,734
Discount at 10% (10,784) 18 (3,450) (2,194) (4,014) (5,299) (25,723)
Standardized measure of
discounted future net cash flows 10,430 28 7,262 1,836 540 3,915 24,011
As of December 31, 2016
Future cash inflows 46,212 365 51,677 52,891 21,520 19,209 191,874
Future production costs (15,428) (179) (19,519) (39,108) (14,267) (7,495) (95,996)
Future development costs (15,334) (219) (19,300) (4,995) (5,487) (4,805) (50,140)
Future income taxes (2,599) (1) (7,480) (2,517) (989) (955) (14,541)
Future net cash flows, after income taxes 12,851 (34) 5,378 6,271 777 5,954 31,197
Discount at 10% (5,172) 8 (64) (2,986) (815) (2,666) (11,695)
Standardized measure of
discounted future net cash flows 7,679 (26) 5,314 3,285 (38) 3,288 19,502
Minority interests in future net cash flows as of
(M$)
As of December 31, 2014 - - 1,103 - - - 1,103
As of December 31, 2015 - - 448 - - - 448
As of December 31, 2016 - - 253 - - - 253
324
TOTAL. Registration Document 2016
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Supplemental oil and gas information 11
(M$)
Equity affiliates
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
(excl. Russia) Africa) Africa
As of December 31, 2014
Future cash inflows - 45,472 1,698 68,109 16,209 - 131,488
Future production costs - (13,536) - (36,848) (9,393) - (59,777)
Future development costs - (3,190) (132) (3,814) (1,683) - (8,819)
Future income taxes - (3,886) (630) (5,525) (1,327) - (11,368)
Future net cash flows, after income taxes - 24,860 936 21,922 3,806 - 51,524
Discount at 10% - (19,447) (575) (10,331) (2,078) - (32,431)
Standardized measure of
discounted future net cash flows - 5,413 361 11,591 1,728 - 19,093
As of December 31, 2015
Future cash inflows - 21,779 52 36,231 7,736 - 65,798
Future production costs - (7,973) - (16,814) (2,884) - (27,671)
Future development costs - (1,146) (28) (2,638) (547) - (4,359)
Future income taxes - (1,450) (29) (2,818) (918) - (5,215)
Future net cash flows, after income taxes - 11,210 (5) 13,961 3,387 - 28,553
Discount at 10% - (9,186) (98) (7,009) (1,759) - (18,052)
Standardized measure of
discounted future net cash flows - 2,024 (103) 6,952 1,628 - 10,501
As of December 31, 2016
Future cash inflows - 22,393 (248) 30,045 5,815 - 58,005
Future production costs - (5,704) (53) (15,846) (2,017) - (23,620)
Future development costs - (929) (1) (2,339) (392) - (3,661)
Future income taxes - (1,228) (20) (4,661) - - (5,909)
Future net cash flows, after income taxes - 14,532 (322) 7,199 3,406 - 24,815
Discount at 10% - (9,471) 139 (3,869) (1,697) - (14,898)
Standardized measure of
discounted future net cash flows - 5,061 (183) 3,330 1,709 - 9,917
Registration Document 2016. TOTAL
325
11 Supplemental oil and gas information
Oil and gas information pursuant to FASB Accounting Standards Codification 932
1.9. Changes in the standardized measure of discounted future net cash flows
Consolidated subsidiaries
(M$) 2014 2015 2016
Beginning of year 63,274 60,774 24,011
Sales and transfers, net of production costs (26,647) (14,209) (12,015)
Net change in sales and transfer prices and in production costs and other expenses (16,703) (88,615) (21,189)
Extensions, discoveries and improved recovery 1,912 933 156
Changes in estimated future development costs (5,407) 4,412 400
Previously estimated development costs incurred during the year 21,484 19,694 13,967
Revisions of previous quantity estimates (1,505) (4,800) 5,347
Accretion of discount 6,327 6,077 2,401
Net change in income taxes 20,116 42,252 6,304
Purchases of reserves in place 26 - 364
Sales of reserves in place (2,103) (2,507) (244)
End of year 60,774 24,011 19,502
Equity affiliates
(M$) 2014 2015 2016
Beginning of year 15,419 19,093 10,501
Sales and transfers, net of production costs (3,639) (1,860) (1,745)
Net change in sales and transfer prices and in production costs and other expenses (1,546) (14,821) (3,840)
Extensions, discoveries and improved recovery 4,444 - 1,204
Changes in estimated future development costs 190 1,572 83
Previously estimated development costs incurred during the year 1,330 1,272 971
Revisions of previous quantity estimates 19 315 214
Accretion of discount 1,542 1,909 1,050
Net change in income taxes 834 2,901 (340)
Purchases of reserves in place 543 186 1,929
Sales of reserves in place (43) (66) (110)
End of year 19,093 10,501 9,917
326
TOTAL. Registration Document 2016
Supplemental oil and gas information 11
Other information
2. Other information
2.1. Net gas production, production prices and production costs
Consolidated subsidiaries
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
(excl. Russia) Africa) Africa
2014
Natural gas production available
for sale (Bcf) (a) 390 - 180 84 310 408 1,372
Production prices (b)
Oil ($ / b) (c) 85.75 81.38 90.78 84.88 60.38 85.62 87.26
Bitumen ($ / b) - - - - 42.83 - 42.83
Natural gas ($ / kcf) 7.24 - 2.64 1.16 3.56 10.28 6.34
Production costs per unit
of production ($ / boe) (d))
Total liquids and natural gas 13.59 14.72 10.10 12.19 6.24 8.05 10.31
Bitumen - - - - 42.04 - 42.04
2015
Natural gas production available
for sale (Bcf) (a) 398 - 171 93 318 449 1,429
Production prices (b)
Oil ($ / b) (c) 45.91 39.83 45.33 47.63 25.68 47.38 45.12
Bitumen ($ / b) - - - - 12.16 - 12.16
Natural gas ($ / kcf) 6.00 - 1.97 1.16 2.53 6.62 4.65
Production costs per unit
of production ($ / boe) (d))
Total liquids and natural gas 11.52 9.77 7.91 6.44 6.35 5.05 7.84
Bitumen - - - - 37.92 - 37.92
2016
Natural gas production available
for sale (Bcf) (a) 469 - 180 94 337 471 1,551
Production prices (b)
Oil ($ / b) (c) 34.63 30.89 37.77 40.23 23.54 37.89 37.18
Bitumen ($ / b) - - - - 10.77 - 10.77
Natural gas ($ / kcf) 4.24 - 1.43 1.20 2.50 4.53 3.48
Production costs per unit
of production ($ / boe) (d))
Total liquids and natural gas 7.25 10.90 7.20 4.76 5.52 3.78 6.14
Bitumen - - - - 19.03 - 19.03
(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 reported price represents an average aggregate price of prices for crude oil, condensates and NGL. The table does not include separate figures for NGL production prices because
the production of NGL represented less than 7.5% of the Group’s total liquids production in each of the years 2014, 2015 and 2016.
(d) 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 2016. TOTAL
327
11 Supplemental oil and gas information
Other information
Equity affiliates
Europe and Russia Africa Middle East Americas Asia-Pacific Total
Central Asia (excl. North and North
(excl. Russia) Africa) Africa
2014
Natural gas production available
for sale (Bcf) (a) - 386 - 319 - - 705
Production prices (b)
Oil ($ / b) (c) - 54.19 - 86.02 85.72 - 85.26
Bitumen ($ / b) - - - - - - -
Natural gas ($ / kcf) - 2.35 - 7.08 - - 4.64
Production costs per unit
of production ($ / boe) (d)
Total liquids and natural gas - 1.48 - 2.86 9.19 - 2.72
Bitumen - - - - - - -
2015
Natural gas production available
for sale (Bcf) (a) - 448 - 200 - - 648
Production prices (b)
Oil ($ / b) (c) - 25.37 - 48.34 32.20 - 42.69
Bitumen ($ / b) - - - - - - -
Natural gas ($ / kcf) - 1.23 - 3.28 - - 1.99
Production costs per unit
of production ($ / boe) (d)
Total liquids and natural gas - 1.26 - 3.40 4.05 - 2.37
Bitumen - - - - - - -
2016
Natural gas production available
for sale (Bcf) (a) - 492 5 173 - - 670
Production prices (b)
Oil ($ / b) (c) - 19.36 - 38.61 28.49 - 32.77
Bitumen ($ / b) - - - - - - -
Natural gas ($ / kcf) - 1.21 - 1.85 - - 1.43
Production costs per unit
of production ($ / boe) (d)
Total liquids and natural gas - 0.88 - 2.92 3.59 - 1.82
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 reported price represents an average aggregate price of prices for crude oil, condensates and NGL. The table does not include separate figures for NGL production prices because
the production of NGL represented less than 7.5% of the Group’s total liquids production in each of the years 2014, 2015 and 2016.
(d) 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.
328
TOTAL. Registration Document 2016
Supplemental oil and gas information 11
Report on the payments made to governments
3. Report on the payments made to governments
(Article L. 225-102-3 of the French Commercial Code)
Article L. 225-102-3 of the French Commercial Code (1) requires that
large undertakings and public-interest entities that are active in the
extractive industry or logging of primary forests disclose in an
annual report payments of at least €100,000 made to governments
in the countries in which they operate.
The consolidated report of TOTAL is presented below pursuant to
the aforementioned provisions. This report covers the
aforementioned payments made by the Group’s extractive
companies as defined below, for the benefit of each government of
States or territories in which TOTAL carries out its activities, by
detailing the total amount of payments made, the total amount by
payment type, the total amount by project and the total amount by
payment type for each project.
This report has been approved by the Board of Directors of
TOTAL S.A.
Definitions
The meaning of certain terms used in this report are set forth below:
Extractive Companies: TOTAL S.A. and any company or
undertaking of which the activities consist, in whole or in part, of the
exploration, prospection, discovery, development and extraction of
minerals, crude oil and natural gas, amongst others, fully
consolidated by TOTAL S.A.
Payment: a single payment or multiple interconnected payments of
an amount equal to, or in excess of, €100,000 (or its equivalent)
paid, whether in money or in kind, for extractives activities.
Payment types included in this report are the following:
– Taxes: taxes and levies paid on income, production or profits,
excluding taxes levied on consumption such as value added
taxes, custom duties, personal income taxes and sales taxes.
– Royalties: percentage of production payable to the owner of
mineral rights.
– License Fees: license fees, surface or rental fees, and other
consideration for licenses and / or concessions that are paid for
access to the area where the extractive activities will be
conducted.
– License Bonus: bonuses paid for and in consideration of
signature, discovery, production, awards, grants and transfers of
extraction rights; bonuses related to achievement or failure to
achieve certain production levels or certain targets, and
discovery of additional mineral reserves / deposits.
– Dividends: dividends paid to a host government holding an
interest in an Extractive Company.
– Payments for infrastructure improvements: payments for local
development, including the improvement of infrastructure, not
directly necessary for the conduct of extractive activities but
mandatory pursuant to the terms of a production sharing contract
or to the terms of a law relating to oil and gas activities.
– Production entitlement: host Government’s share of production.
This payment is generally made in kind.
Government: any national, regional or local authority of a State
or territory, or any department, agency or undertaking controlled by
that authority.
Project: operational activities governed by a single contract,
license, lease, concession or similar legal agreement and that form
the basis for payment liabilities with a Government. If multiple such
agreements are substantially interconnected, they shall be
considered as a single Project. Payments (such as company
income tax when it concerns several projects which cannot be
separated in application of the fiscal regulations) unable to be
attributed to a Project are disclosed under the item “non-attributable”.
Reporting Principles
This report sets forth all payments as booked in the Extractive
Companies’ accounts. They are presented based on the Group
share in each Project, whether the payments have been made
directly by the Group Extractive Companies as operator or indirectly
through third-party operating companies.
Production entitlement and Royalties that are mandatorily paid in
kind and that are owed to host Governments pursuant to legal or
contractual provisions (not booked in the Extractive Companies’
accounts pursuant to the accounting standards) are reported in
proportion to the interest held by the Extractive Company in the
Project as of the date on which such Production entitlements and
Royalties are deemed to be acquired.
Payments in kind are estimated at fair value. Fair value corresponds
to the contractual price of oil and gas used to calculate Production
entitlement, market price (if available) or an appropriate benchmark
price. These prices might be calculated on an averaged basis over
a given period.
(1) Article L. 225-102-3 of the French Commercial Code transposes certain provisions set out in Directive 2013/34/EU of the European Parliament and of the Council of June 26, 2013
(chapter 10).
Registration Document 2016. TOTAL
329
11 Supplemental oil and gas information
Report on the payments made to governments
3.1. Reporting by country and type of Payment
(in thousands of dollars) Taxes Royalties License License Dividends Infrastructure Production Total of
fees bonus improvements entitlements Payments
Europe
and Central Asia 61,573 - 18,308 58,853 - 7,365 20,820 166,919
Bulgaria - - 129 - - - - 129
France 745 - - - - - - 745
Italy - - - - - 738 - 738
Kazakhstan - - - 58,853 - 6,627 818 66,298
Netherlands 14,414 - 1,112 - - - - 15,526
Norway 29,814 - 11,616 - - - - 41,430
Russia 13,645 - 144 - - - 20,002 33,791
United Kingdom 2,955 - 5,307 - - - - 8,262
Africa 1,597,374 - 30,916 37,695 5,063 86,467 1,103,374 2,860,889
Angola 506,910 - 8,699 - - 1,543 1,049,731 1,566,883
Côte d’Ivoire - - 581 8,000 - - - 8,581
Democratic Republic
of the Congo - - 602 - - - - 602
Gabon 195,763 - 7,866 - 5,063 47,419 - 256,111
Madagascar - - 449 - - - - 449
Mauritania - - 310 - - - - 310
Mozambique - - 250 - - - - 250
Nigeria 595,253 - 3,900 - - 37,505 49,386 686,044
Republic of the Congo 299,448 - 7,316 29,695 - - 4,257 340,716
South Africa - - 478 - - - - 478
Uganda - - 465 - - - - 465
Middle East
and North Africa 3,317,282 - 34,350 35,500 - - 844,888 4,232,020
Algeria 76,499 - - - - - 156,548 233,047
Cyprus - - 508 - - - - 508
Egypt - - 150 500 - - - 650
Iraq 9,891 - - - - - - 9,891
Libya 108,614 - - - - - 182,136 290,750
Oman 127,918 - - - - - 8,285 136,203
Qatar 107,273 - - 35,000 - - 497,919 640,192
United Arab Emirates 2,887,087 - 2,344 - - - - 2,889,431
Yemen - - 31,348 - - - - 31,348
Americas 248,455 21,702 31,853 21,583 - - 18,425 342,018
Argentina 132,201 - 4,111 19,300 - - - 155,612
Bolivia 99,467 - 1,880 643 - - 18,425 120,415
Brazil - - 398 - - - - 398
Canada (310) (1) 2,158 20,602 - - - - 22,450
Colombia 9,551 - - - - - - 9,551
United States 7,442 19,544 4,862 1,640 - - - 33,488
Venezuela 104 - - - - - - 104
Asia Pacific 594,328 - 16,546 30,555 - - 733,915 1,375,344
Australia 3,964 - (449) (2) - - - - 3,515
Brunei 64,212 - 5 - - - - 64,217
Cambodia - - 190 - - - - 190
China 6,802 - - - - - 14,879 21,681
Indonesia 254,974 - 16,800 - - - 651,818 923,592
Myanmar 21,825 - - - - - 67,218 89,043
Thailand 242,551 - - 30,555 - - - 273,106
Total 5,819,012 21,702 131,973 184,186 5,063 93,832 2,721,422 8,977,190
(1) Reimbursement of Alberta Scientific Research Experimental Development Tax Credit.
(2) Includes reimbursement of stamp duties by Queensland’s Office of State Revenue.
330
TOTAL. Registration Document 2016
Supplemental oil and gas information 11
Report on the payments made to governments
3.2. Reporting of Payments by Project and by type of Payment,
and by Government and by type of Payment
(in thousands of dollars) Taxes Royalties License License Dividends Infrastructure Production Total of
fees bonus improvements entitlements Payments
Algeria
Payments per Project
Tin Fouyé Tabankort 76,499 - - - - - 156,548 233,047
Total 76,499 - - - - - 156,548 233,047
Payments per Government
Direction Générale des Impôts,
Direction des Grandes Entreprises
c / o Sonatrach 76,499 - - - - - - 76,499
Sonatrach - - - - - - 156,548 156,548
Total 76,499 - - - - - 156,548 233,047
Angola
Payments per Project
Block 17 386,595 - 6,943 - - - 962,294 1,355,832
Block 0 82,321 - 644 - - - - 82,965
Block 14 31,489 - 449 - - - 83,180 115,118
Block 14k 6,505 - - - - - 4,257 10,762
Block 32 - - 248 - - - - 248
Block 17 / 06 - - 169 - - - - 169
Block 25 - - 76 - - - - 76
Block 39 - - - - - 1,543 - 1,543
Block 40 - - 170 - - - - 170
Total 506,910 - 8,699 - - 1,543 1,049,731 1,566,883
Payments per Government
Caixa do Tesouro Nacional 506,910 - 522 - - - - 507,432
Ministério dos Petróleos - - 8,177 - - - - 8,177
Sonangol, E.P. - - - - - 1,543 1,049,731 1,051,274
Total 506,910 - 8,699 - - 1,543 1,049,731 1,566,883
Argentina
Payments per Project
Neuquen 24,189 - 353 19,300 - - - 43,842
Tierra del Fuego 47,976 - 3,719 - - - - 51,695
Santa Cruz - - 39 - - - - 39
Non-attributable 60,036 - - - - - - 60,036
Total 132,201 - 4,111 19,300 - - - 155,612
Payments per Government
Administracion Federal
de Ingresos Publicos 60,036 - - - - - - 60,036
Secretaria de Energia,
Republica Argentina 26,961 - 658 - - - - 27,619
Provincia del Neuquen 24,189 - 353 14,300 - - - 38,842
Provincia del Tierra del Fuego 21,015 - 3,100 - - - - 24,115
Gas y Petroleo del Neuquen S.A. - - - 5,000 - - - 5,000
Total 132,201 - 4,111 19,300 - - - 155,612
Registration Document 2016. TOTAL
331
11 Supplemental oil and gas information
Report on the payments made to governments
(in thousands of dollars) Taxes Royalties License License Dividends Infrastructure Production Total of
fees bonus improvements entitlements Payments
Australia
Payments per Project
GLNG 3,964 - 463 - - - - 4,427
ATP 909 / 911 / 912 - - (912) (1) - - - - (912)
Total 3,964 - (449) - - - - 3,515
Payments per Government
Queensland Government,
Office of State Revenue 3,964 - (449) - - - - 3,515
Total 3,964 - (449) - - - - 3,515
Bolivia
Payments per Project
Ipati 4,155 - 237 - - - - 4,392
Azero - - 560 - - - - 560
Aquio 2,844 - 258 - - - - 3,102
Itau 13,061 - 205 14 - - - 13,280
San Alberto 19,717 - 80 327 - - 2,884 23,008
San Antonio 58,901 - 89 302 - - 15,541 74,833
Rio Hondo - - 451 - - - - 451
Non-attributable 789 - - - - - - 789
Total 99,467 - 1,880 643 - - 18,425 120,415
Payments per Government
Yacimientos Petroliferos
Fiscales Bolivianos (YPFB) - - 1,880 643 - - 18,425 20,948
Servicio de Impuestos
Nacionales (SIN) 789 - - - - - - 789
Servicio de Impuestos
Nacionales (SIN) c / o YPFB 63,154 - - - - - - 63,154
Departamentos c / o YPFB 35,524 - - - - - - 35,524
Total 99,467 - 1,880 643 - - 18,425 120,415
Brazil
Payments per Project
Foz do Amazonas - - 30 - - - - 30
Ceará (CE-M-661) - - 70 - - - - 70
Xerelete (BC-2) - - 28 - - - - 28
BM-S-54 - - 54 - - - - 54
Barreirinhas - - 43 - - - - 43
Espirito Santo - - 18 - - - - 18
Pelotas - - 44 - - - - 44
Non-attributable - - 111 - - - - 111
Total - - 398 - - - - 398
Payments per Government
Agencia National de Petroleo,
Gas Natural e Biocombustiveis - - 398 - - - - 398
Total - - 398 - - - - 398
(1) Reimbursement of stamp duties by Queensland’s Office of State Revenue.
332
TOTAL. Registration Document 2016
Supplemental oil and gas information 11
Report on the payments made to governments
(in thousands of dollars) Taxes Royalties License License Dividends Infrastructure Production Total of
fees bonus improvements entitlements Payments
Brunei
Payments per Project
Block B 64,212 - 5 - - - - 64,217
Total 64,212 - 5 - - - - 64,217
Payments per Government
Brunei Government 64,212 - 5 - - - - 64,217
Total 64,212 - 5 - - - - 64,217
Bulgaria
Payments per Project
Khan Asparuh - - 129 - - - - 129
Total - - 129 - - - - 129
Payments per Government
Ministry of Energy of Bulgaria - - 129 - - - - 129
Total - - 129 - - - - 129
Cambodia
Payments per Project
OCA – zone 3 - - 190 - - - - 190
Total - - 190 - - - - 190
Payments per Government
Ministry of Mines and Energy - - 190 - - - - 190
Total - - 190 - - - - 190
Canada
Payments per Project
Joslyn (310) (1) - 466 - - - - 156
Surmont - 2,158 19,025 - - - - 21,183
Northern Lights - - 41 - - - - 41
Fort Hills - - 985 - - - - 985
Other oil sands projects - - 85 - - - - 85
Total (310) 2,158 20,602 - - - - 22,450
Payments per Government
Province of Alberta (310) 2,158 1,667 - - - - 3,515
Alberta Energy Regulator - - 1,407 - - - - 1,407
Municipality of Wood Buffalo (Alberta) - - 17,528 - - - - 17,528
Total (310) 2,158 20,602 - - - - 22,450
China
Payments per Project
Sulige 6,802 - - - - - 14,879 21,681
Total 6,802 - - - - - 14,879 21,681
Payments per Government
China National Petroleum Company 6,802 - - - - - 14,879 21,681
Total 6,802 - - - - - 14,879 21,681
(1) Reimbursement of Alberta Scientific Research Experimental Development Tax Credit.
Registration Document 2016. TOTAL
333
11 Supplemental oil and gas information
Report on the payments made to governments
(in thousands of dollars) Taxes Royalties License License Dividends Infrastructure Production Total of
fees bonus improvements entitlements Payments
Colombia
Payments per Project
Non-attributable 9,551 - - - - - - 9,551
Total 9,551 - - - - - - 9,551
Payments per Government
Dirección de Impuestos
y aduanas Nacionales 9,551 - - - - - - 9,551
Total 9,551 - - - - - - 9,551
Côte d’Ivoire
Payments per Project
CI-100 - - 111 - - - - 111
CI-514 - - 470 - - - - 470
CI-605 - - - 8,000 - - - 8,000
Total - - 581 8,000 - - - 8,581
Payments per Government
République de Côte d’Ivoire,
Direction Générale
des Hydrocarbures - - 581 8,000 - - - 8,581
Total - - 581 8,000 - - - 8,581
Cyprus
Payments per Project
Block 11 - - 508 - - - - 508
Total - - 508 - - - - 508
Payments per Government
Ministry of Energy, Commerce,
Industry and Tourism - - 508 - - - - 508
Total - - 508 - - - - 508
Democratic Republic
of the Congo
Payments per Project
Block 3 - - 602 - - - - 602
Total - - 602 - - - - 602
Payments per Government
Ministère des Hydrocarbures - - 502 - - - - 502
Ministère de l’Environnement - - 100 - - - - 100
Total - - 602 - - - - 602
Egypt
Payments per Project
North El Mahala Onshore - - 150 - - - - 150
North El Hammad Offshore - - - 500 - - - 500
Total - - 150 500 - - - 650
Payments per Government
Egyptian Natural Gas
Holding Company - - 150 500 - - - 650
Total - - 150 500 - - - 650
334
TOTAL. Registration Document 2016
Supplemental oil and gas information 11
Report on the payments made to governments
(in thousands of dollars) Taxes Royalties License License Dividends Infrastructure Production Total of
fees bonus improvements entitlements Payments
France
Payments per Project
Lacq 745 - - - - - - 745
Total 745 - - - - - - 745
Payments per Government
Trésor Public 745 - - - - - - 745
Total 745 - - - - - - 745
Gabon
Payments per Project
Concession Fields
(Non-attributable) 14,389 - 3,515 - - 47,419 (1) - 65,323
Concession Anguille 40,529 - - - - - - 40,529
Concession Grondin 33,381 - - - - - - 33,381
Concession Torpille 29,570 - - - - - - 29,570
Atora CEPP 9,555 - 170 - - - - 9,725
Coucal CEPP 1,393 - 251 - - - - 1,644
Avocette CEPP 13,989 - 740 - - - - 14,729
Baudroie-Mérou CEPP 12,425 - 515 - - - - 12,940
Mboga CEPP (26) (2) - 3 - - - - (23)
Hylia II CEPP 4,356 - 659 - - - - 5,015
Diaba CEPP - - 454 - - - - 454
Nziembou CEPP - - 153 - - - - 153
Rabi CEPP 36,202 - 1,406 - - - - 37,608
Non-attributable - - - - 5,063 - - 5,063
Total 195,763 - 7,866 - 5,063 47,419 - 256,111
Payments per Government
Trésor Public Gabonais 141,949 - 1,450 - - - - 143,399
Direction Générale
des Hydrocarbures - - 5,246 - - - - 5,246
République du Gabon 53,814 - - - 5,063 39,413 - 98,290
Direction Générale des Impôts - - 682 - - - - 682
Ville de Port-Gentil - - 488 - - 8,006 - 8,494
Total 195,763 - 7,866 - 5,063 47,419 - 256,111
Indonesia
Payments per Project
Mahakam PSC 253,919 - - - - - 649,330 (3) 903,249
Tengah PSC 1,055 - - - - - 2,488 3,543
South Sageri PSC - - 15,000 - - - - 15,000
South West Bird’s head PSC - - 1,800 - - - - 1,800
Total 254,974 - 16,800 - - - 651,818 923,592
Payments per Government
Directorate General of Taxation,
Ministry of Finance 254,974 - - - - - - 254,974
Satuan Khusus Kegiatan Usaha
Hulu Minyak dan Gas Bumi
(SKK Migas) - - 16,800 - - - 651,818 668,618
Total 254,974 - 16,800 - - - 651,818 923,592
(1) Financing of projects (infrastructure, education, health) under joint control of the State and TOTAL within the framework of the Provision pour Investissements Diversifiés (contribution to
diversified investments) and of the Provision pour Investissements dans les Hydrocarbures (contribution to investments in hydrocarbons).
(2) Refund of 2015 production taxes.
(3) Government Production entitlement for export LNG is valued on a net-back price basis (revenues less costs, such as liquefaction and transportation cost). Production entitlement includes
volume of oil taken by the Government to meet domestic obligation. The fees received from the Government are deducted from the valuation of these volumes.
Registration Document 2016. TOTAL
335
11 Supplemental oil and gas information
Report on the payments made to governments
(in thousands of dollars) Taxes Royalties License License Dividends Infrastructure Production Total of
fees bonus improvements entitlements Payments
Iraq
Payments per Project
Halfaya 9,891 - - - - - - 9,891
Total 9,891 - - - - - - 9,891
Payments per Government
Iraq government 9,891 - - - - - - 9,891
Total 9,891 - - - - - - 9,891
Italy
Payments per Project
Gorgoglione Unified License - - - - - 738 - 738
Total - - - - - 738 - 738
Payments per Government
Regione Basilicata - - - - - 738 - 738
Total - - - - - 738 - 738
Kazakhstan
Payments per Project
Kashagan - - - 58,853 - 6,627 818 66,298
Total - - - 58,853 - 6,627 818 66,298
Payments per Government
Government of the
Republic of Kazakhstan - - - 58,853 - - 818 59,671
Atyrau and Mangistau regions
c / o North Caspian Operating
Company b.v. - - - - - 214 - 214
Atyrau region c / o North
Caspian Operating Company b.v. - - - - - 2,378 - 2,378
Mangistau region c / o North
Caspian Operating Company b.v. - - - - - 4,035 - 4,035
Total - - - 58,853 - 6,627 818 66,298
Libya
Payments per Project
Areas 15, 16 & 32 (Al Jurf) 108,312 - - - - - 170,301 278,613
Areas 129 & 130 302 - - - - - 11,835 12,137
Total 108,614 - - - - - 182,136 290,750
Payments per Government
National Oil Corporation 302 - - - - - 182,136 182,438
Ministry of Finance c / o
National Oil Corporation 108,312 - - - - - - 108,312
Total 108,614 - - - - - 182,136 290,750
Madagascar
Payments per Project
Bemolanga - - 449 - - - - 449
Total - - 449 - - - - 449
Payments per Government
Office des Mines Nationales
et des Industries Stratégiques - - 449 - - - - 449
Total - - 449 - - - - 449
336
TOTAL. Registration Document 2016
Supplemental oil and gas information 11
Report on the payments made to governments
(in thousands of dollars) Taxes Royalties License License Dividends Infrastructure Production Total of
fees bonus improvements entitlements Payments
Mauritania
Payments per Project
Block C9 - - 170 - - - - 170
Block TA29 - - 140 - - - - 140
Total - - 310 - - - - 310
Payments per Government
Trésor Public de Mauritanie - - 310 - - - - 310
Total - - 310 - - - - 310
Mozambique
Payments per Project
Rovuma Basin Area 3&6 - - 250 - - - - 250
Total - - 250 - - - - 250
Payments per Government
Instituto Nacional de Petroleo - - 250 - - - - 250
Total - - 250 - - - - 250
Myanmar
Payments per Project
Blocks M5 and M6 21,825 - - - - - 67,218 89,043
Total 21,825 - - - - - 67,218 89,043
Payments per Government
Myanmar Ministry of Finance 21,825 - - - - - - 21,825
Myanmar Oil and Gas Enterprise - - - - - - 67,218 67,218
Total 21,825 - - - - - 67,218 89,043
Netherlands
Payments per Project
Non-attributable 14,414 - - - - - - 14,414
Offshore Blocks - - 1,112 - - - - 1,112
Total 14,414 - 1,112 - - - - 15,526
Payments per Government
Belastingdienst Nederland 14,414 - 1,112 - - - - 15,526
Total 14,414 - 1,112 - - - - 15,526
Registration Document 2016. TOTAL
337
11 Supplemental oil and gas information
Report on the payments made to governments
(in thousands of dollars) Taxes Royalties License License Dividends Infrastructure Production Total of
fees bonus improvements entitlements Payments
Nigeria
Payments per Project
Joint ventures with NNPC,
operated – Non-attributable 10,112 - 2,331 - - 7,094 - 19,537
Joint ventures with NNPC,
non operated – Non-attributable 103,886 - 59 - - - - 103,945
OML58 (joint venture with NNPC,
operated) 14,376 - - - - - - 14,376
OML99 (joint venture with NNPC,
operated) 25,610 - - - - - - 25,610
OML100 (joint venture with NNPC,
operated) 16,985 - - - - - - 16,985
OML102 (joint venture with NNPC,
operated) 51,167 - - - - - - 51,167
OML102 Ekanga (joint venture
with NNPC, non operated) 10,454 - - - - - - 10,454
OML130 - - 1,510 - - - - 1,510
OML130 PSA (Akpo & Egina) 19,209 - - - - 30,411 - 49,620
OML118 (Bonga) 82,996 - - - - - 49,386 132,382
OML138 (Usan) 25,750 - - - - - - 25,750
Non-attributable 234,708 (1) - - - - - - 234,708
Total 595,253 - 3,900 - - 37,505 49,386 686,044
Payments per Government
Federal Inland Revenue Service 305,041 - - - - - - 305,041
Department of Petroleum
Resources, Federal Government
of Nigeria 168,486 - 126 - - - - 168,612
Niger Delta Development
Commission - - - - - 37,505 - 37,505
Nigerian Maritime Administration
& Safety Agency, Federal
Government of Nigeria - - 3,774 - - - - 3,774
Nigerian National Petroleum
Corporation 12,980 - - - - - 49,386 62,366
Federal Inland Revenue Service
c / o Nigerian National Petroleum
Corporation 78,933 - - - - - - 78,933
Department of Petroleum
Resources c / o Nigerian National
Petroleum Corporation 29,813 - - - - - - 29,813
Total 595,253 - 3,900 - - 37,505 49,386 686,044
Norway
Payments per Project
Asgard area - - 3,786 - - - - 3,786
Ekofisk area - - 2,105 - - - - 2,105
Heimdal area - - 1,357 - - - - 1,357
Oseberg area - - 2,228 - - - - 2,228
Sleipner area - - 314 - - - - 314
Snohvit area - - 940 - - - - 940
Troll area - - 387 - - - - 387
Martin Linge PL043 - - 499 - - - - 499
Non-attributable 29,814 - - - - - - 29,814
Total 29,814 - 11,616 - - - - 41,430
(1) This amount includes $23 million which reduce the tax liability in accordance with the provisions of the Modified Carry Agreement (MCA). Under the MCA, Total E&P Nigeria is entitled to recover
85% of the Carry Capital Cost through claims of capital allowance, described in the MCA as “Carry Tax Relief”. The balance of 15% is to be recovered from NNPC’s share of crude oil produced.
338
TOTAL. Registration Document 2016
Supplemental oil and gas information 11
Report on the payments made to governments
(in thousands of dollars) Taxes Royalties License License Dividends Infrastructure Production Total of
fees bonus improvements entitlements Payments
Payments per Government
Norwegian Tax Administration 29,814 - - - - - - 29,814
Norwegian Petroleum Directorate - - 11,616 - - - - 11,616
Total 29,814 - 11,616 - - - - 41,430
Oman
Payments per Project
Block 6 125,340 - - - - - - 125,340
Block 53 2,578 - - - - - 8,285 10,863
Total 127,918 - - - - - 8,285 136,203
Payments per Government
Oman Ministry of Oil and Gas - - - - - - 8,285 8,285
Oman Ministry of Finance 127,918 - - - - - - 127,918
Total 127,918 - - - - - 8,285 136,203
Qatar
Payments per Project
Al Khalij 24,020 - - - - - - 24,020
Qatargas 1 33,312 - - - - - 38,684 71,996
North Oil Company - - - 35,000 - - - 35,000
Dolphin 49,941 - - - - - 459,235 509,176
Total 107,273 - - 35,000 - - 497,919 640,192
Payments per Government
Qatar Petroleum - - - - - - 497,919 497,919
Qatar Ministry of Finance 107,273 - - 35,000 - - - 142,273
Total 107,273 - - 35,000 - - 497,919 640,192
Republic of the Congo
Payments per Project
CPP Haute Mer – Zone A 67,612 - - - - - - 67,612
CPP Haute Mer – Zone B 7,892 - 186 - - - - 8,078
CPP Haute Mer – Zone D 70,284 - 3,752 18,882 - - - 92,918
CPP Pointe Noire
Grands Fonds (PNGF) 61,781 - 1,998 - - - - 63,779
CPP Tchendo 2 14,787 - 408 - - - - 15,195
Kombi, Likalala & Libondo 39,492 - 110 - - - - 39,602
Litanzi & Tchibeli 8,687 - 8 - - - - 8,695
Lianzi 6,505 - - - - - 4,257 10,762
Madingo 22,408 - 854 10,813 - - - 34,075
Total 299,448 - 7,316 29,695 - - 4,257 340,716
Payments per Government
Ministère des hydrocarbures 267,068 - - - - - - 267,068
Trésor Public 25,875 - 7,316 29,695 - - - 62,886
Société Nationale
des Pétroles Congolais 6,505 - - - - - 4,257 10,762
Total 299,448 - 7,316 29,695 - - 4,257 340,716
Registration Document 2016. TOTAL
339
11 Supplemental oil and gas information
Report on the payments made to governments
(in thousands of dollars) Taxes Royalties License License Dividends Infrastructure Production Total of
fees bonus improvements entitlements Payments
Russia
Payments per Project
Kharyaga 13,645 - 144 - - - 20,002 33,791
Total 13,645 - 144 - - - 20,002 33,791
Payments per Government
Nenets Tax Inspection 13,645 - 144 - - - - 13,789
Ministry of Energy - - - - - - 20,002 20,002
Total 13,645 - 144 - - - 20,002 33,791
South Africa
Payments per Project
Blocks 11b and 12b - - 15 - - - - 15
Block South Outeniqua - - 463 - - - - 463
Total - - 478 - - - - 478
Payments per Government
Petroleum Agency South Africa
(PASA) - - 373 - - - - 373
Upstream Training Trust (UTT) - - 105 - - - - 105
Total - - 478 - - - - 478
Thailand
Payments per Project
Bongkot 242,551 - - 30,555 - - - 273,106
Total 242,551 - - 30,555 - - - 273,106
Payments per Government
Revenue Department 152,931 - - - - - - 152,931
Department of Mineral Fuels,
Ministry Of Energy 89,620 - - - - - - 89,620
Ministry Of Energy - - - 30,555 - - - 30,555
Total 242,551 - - 30,555 - - - 273,106
Uganda
Payments per Project
Block EA-1 - - 85 - - - - 85
Block EA-1A - - 67 - - - - 67
Block EA-2 - - 107 - - - - 107
Block EA-3 - - 206 - - - - 206
Total - - 465 - - - - 465
Payments per Government
Ministry of Energy
and Mineral Development - - 465 - - - - 465
Total - - 465 - - - - 465
340
TOTAL. Registration Document 2016
Supplemental oil and gas information 11
Report on the payments made to governments
(in thousands of dollars) Taxes Royalties License License Dividends Infrastructure Production Total of
fees bonus improvements entitlements Payments
United Arab Emirates
Payments per Project
Abu Al Bukhoosh 19,523 - - - - - - 19,523
Abu Dhabi Gas Industries Ltd
(GASCO) 170,486 - 2,344 - - - - 172,830
Abu Dhabi Company for Onshore
Petroleum Operations Ltd (ADCO) 1,896,250 - - - - - - 1,896,250
Abu Dhabi Marine Areas Ltd
(ADMA) 800,828 - - - - - - 800,828
Total 2,887,087 - 2,344 - - - - 2,889,431
Payments per Government
Supreme Petroleum Council –
Government of Abu Dhabi 19,523 - - - - - - 19,523
Abu Dhabi Fiscal Authorities
c / o Abu Dhabi Marine Areas Ltd 800,828 - - - - - - 800,828
Abu Dhabi Fiscal Authorities 2,066,736 - - - - - - 2,066,736
Petroleum Institute - - 2,344 - - - - 2,344
Total 2,887,087 - 2,344 - - - - 2,889,431
United Kingdom
Payments per Project
Alwyn North 6,072 - - - - - - 6,072
Bruce (13,122) (1) - - - - - - (13,122)
Frigg (4,595) (1) - - - - - - (4,595)
Northern North Sea - - 1,633 - - - - 1,633
Central Graben Area 7,586 - 1,123 - - - - 8,709
Markham Area - - 147 - - - - 147
Greater Laggan Area - - 2,207 - - - - 2,207
Onshore - - 40 - - - - 40
Non-attributable 7,014 - 157 - - - - 7,171
Total 2,955 - 5,307 - - - - 8,262
Payments per Government
HM Revenue & Customs 2,955 - - - - - - 2,955
Department of Energy
& Climate Change - - 5,150 - - - - 5,150
Crown Estate - - 157 - - - - 157
Total 2,955 - 5,307 - - - - 8,262
United States
Payments per Project
Tahiti - 14,416 - - - - - 14,416
Barnett Shale 2,323 5,128 - - - - - 7,451
Utica 5,119 - - - - - - 5,119
Gulf of Mexico - - 4,862 1,640 - - - 6,502
Total 7,442 19,544 4,862 1,640 - - - 33,488
(1) Refund of Petroleum Revenue Tax.
Registration Document 2016. TOTAL
341
11 Supplemental oil and gas information
Report on the payments made to governments
(in thousands of dollars) Taxes Royalties License License Dividends Infrastructure Production Total of
fees bonus improvements entitlements Payments
Payments per Government
Bureau of Ocean Energy
Management - - 4,862 1,640 - - - 6,502
Office of Natural Resources
Revenue - 14,416 - - - - - 14,416
State of Ohio 3,129 - - - - - - 3,129
Johnson County Tax Assessor 242 - - - - - - 242
Tarrant County Tax Assessor 1,753 - - - - - - 1,753
Texas State Comptroller’s Office 328 - - - - - - 328
City of Fort Worth - 1,494 - - - - - 1,494
Dallas / Fort Worth International
Airport Board - 362 - - - - - 362
City of Arlington - 268 - - - - - 268
Tarrant Regional Water District - 293 - - - - - 293
Fort Worth Independant
School District - 320 - - - - - 320
Arlington Independant
School District - 120 - - - - - 120
Harrison County 626 - - - - - - 626
Carroll County 1,173 - - - - - - 1,173
Birdville Independent School
District - 925 - - - - - 925
Tarrant County College - 355 - - - - - 355
City of Grand Prairie - 462 - - - - - 462
Kennedale Independant
School District - 393 - - - - - 393
Tarrant County AAAA - 136 - - - - - 136
Columbiana County 191 - - - - - - 191
Total 7,442 19,544 4,862 1,640 - - - 33,488
Venezuela
Payments per Project
Yucal Placer 104 - - - - - - 104
Total 104 - - - - - - 104
Payments per Government
Fondo Nacional de Cienca,
Tecnologia e Innovacion 19 - - - - - - 19
Republica Bolivariana de Venezuela 85 - - - - - - 85
Total 104 - - - - - - 104
Yemen
Payments per Project
Block 10 - - 31,348 (1) - - - - 31,348
Total - - 31,348 - - - - 31,348
Payments per Government
Masila Petroleum Exploration - - 31,348 - - - - 31,348
Total - - 31,348 - - - - 31,348
(1) Payment related to the expiration of the Block 10 license, which was returned to the Yemeni authorities in 2015.
342
TOTAL. Registration Document 2016
Glossary
The terms “TOTAL” and “Group” as used in this document refer to TOTAL S.A. collectively with all of its direct and indirect consolidated companies
located in or outside of France. The term “Company” as used in this report refers to TOTAL S.A., which is the parent company of the Group.
Abbreviations
€: euro
$ or dollar: U.S. dollar
ADR: American Depositary Receipt (evidencing an ADS)
ADS: American Depositary Share
(representing a share of a company)
AMF: Autorité des marchés financiers
(French Financial Markets Authority)
API: American Petroleum Institute
ERMI: European refining margin indicator of the Group
FPSO: floating production, storage and offloading
GHG: greenhouse gas
HSE: health, safety and the environment
IEA: International Energy Agency
IFRS: International Financial Reporting Standards
IPIECA: International Petroleum Industry Environmental
Conservation Association
LNG: liquefied natural gas
LPG: liquefied petroleum gas
OML: oil mining license
NGL: natural gas liquids
ROE: return on equity
ROACE: return on average capital employed
SEC: United States Securities and Exchange Commission
UN: United Nations
Units of measurement
b = barrel
B = billion
boe = barrel of oil equivalent
Btu = British thermal unit
cf = cubic feet
CO2 eq = carbon dioxide equivalent
/ d = per day
GWh = gigawatt hour
k = thousand
km = kilometer
m = meter
m³ = cubic meter
M = million
MW = megawatt
MWp = megawatt peak (direct current)
t = metric ton
TWh = terawatt hour
W = watt
/ y = per year
Conversion table
1 acre (cid:2) 0.405 hectares
1 b = 42 U.S. gallons (cid:2) 159 liters
1 b / d of crude oil (cid:2) 50 t / y of crude oil
1 Bm³ / y (cid:2) 0.1 Bcf / d
1 km (cid:2) 0.62 miles
1 m³ (cid:2) 35.3 cf
1 Mt of LNG (cid:2) 48 Mcf of gas
1 Mt / y of LNG (cid:2) 131 Mcf/ d of gas
1 t of oil (cid:2) 7.5 b of oil (assuming a specific gravity of 37° API)
1 boe = 1 b of crude oil (cid:2) 5,403 cf of gas in 2016 (1)
(5,390 cf in 2015 and 5,400 cf in 2014)
(1) Natural gas is converted to barrels of oil equivalent using a ratio of cubic feet of natural gas per one barrel. This ratio is based on the actual average equivalent energy content of TOTAL’s natural gas
reserves during the applicable periods, and is subject to change. The tabular conversion rate is applicable to TOTAL’s natural gas reserves on a Group-wide basis.
Registration Document 2016. TOTAL
369
A
acreage
Areas in which mining rights are exercised.
adjusted results
Results using replacement cost, adjusted for special items,
excluding the impact of changes for fair value.
API degrees
Scale established by the API to measure oil density. A high API degree
indicates light oil from which a high yield of gasoline can be refined.
appraisal (delineation)
Work performed after a discovery for the purpose of determining
the boundaries or extent of an oil or gas field or assessing its
reserves and production potential.
asset retirement
Companies may have obligations related to well-abandonment,
dismantlement of facilities, decommissioning of plants or restoration
of the environment. These obligations generally result from international
conventions, local regulations or contractual obligations.
associated gas
Gas released during oil production.
association / consortium / joint venture:
Terms used to generally describe a project in which two or more
entities participate. For the principles and methods of consolidation
applicable to different types of joint arrangements according to
IFRS, refer to Note 1 to the Consolidated Financial Statements
(point 7 of chapter 10).
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 carbon resources through biological transformation
(reactions involving living organisms). Fermentation of sugar into
ethanol is an example.
biofuel
Liquid or gaseous fuel that can be used for transport and produced
from biomass, and meeting criteria of reducing GHG compared to
the fossil reference.
biomass
All organic matter from vegetal or animal sources.
Brent
Quality of crude oil (38° API) produced in the North Sea, at the
Brent fields.
brownfield project
Project concerning developed existing fields.
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.
C
capacity of treatment
Annual crude oil treatment capacity of the atmospheric distillation
units of a refinery.
carbon capture, use and storage (CCUS)
Technologies designed to reduce GHG emissions by capturing (C)
CO2 and then compressing and transporting it either to use (U) it for
various industrial processes (e.g., enhanced recovery of oil or gas,
production of chemical products), or to permanently store (S) it in
deep geological formations.
catalysts
Substances that increase a chemical reaction speed. During the
refining process, they are used in conversion units (reformer,
hydrocracker, catalytic cracker) and desulphurization units. Principal
catalysts are precious metals (platinum) or other metals such as
nickel and cobalt.
coal bed methane
Natural gas present in coal seams.
cogeneration
Simultaneous generation of electrical and thermal energies from a
combustible source (gas, fuel oil or coal).
coker (deep conversion unit)
Unit that produces light products (gas, gasoline, diesel) and coke
through the cracking of distillation residues.
concession contract
Exploration and production contract under which a host country
grants to an oil and gas company (or a consortium) the right to
explore a geographic area and develop and produce potential
reserves. The oil and gas company (or consortium) 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.
consortium
Refer to the definition above of “association / consortium / joint
venture”.
conversion
Refining operation aimed at transforming heavy products (heavy
fuel oil) into lighter or less viscous products (e.g., gasoline, jet fuels).
cost oil / gas
In a production sharing contract, portion of the oil and gas
production made available to the contractor (contractor group) and
contractually reserved for reimbursement of exploration, development,
operation and site reclamation costs (“recoverable” costs).
370
TOTAL. Registration Document 2016
cracking
Refining process that entails converting the molecules of large,
complex, heavy hydrocarbons 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. Cracking then produces ethylene and
propylene, in particular.
crude oil
A mixture of compounds (mainly pentanes and heavier
hydrocarbons) that exists in a liquid phase at original reservoir
temperature and pressure and remains liquid at atmospheric
pressure and ambient temperature. “Crude oil” or “oil” are
sometimes used as generic terms to designate crude oil plus
condensates plus NGL.
D
Dated Brent
A market term representing the minimum value of physical cargoes
of Brent, Forties, Oseberg, or Ekofisk crude oil, loading between
the 10th and the 25th day forward. Dated Brent prices are used,
directly and indirectly, as a benchmark for a large proportion of the
crude oil that is traded internationally.
debottlenecking
Change made to a facility to increase its production capacity.
desulphurization unit
Unit in which sulphur and sulphur compounds are eliminated from
mixtures of gaseous or liquid hydrocarbons.
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
effective tax rate
(Tax on adjusted net operating income) / (adjusted net operating
income – income from equity affiliates – dividends received from
investments – impairment of goodwill + tax on adjusted net
operating income).
effect of changes in fair value
The effect of changes in fair value presented as an adjustment item
reflects, for some transactions, differences between internal
measures of performance used by TOTAL’s executive committee
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, the future effects of which
are recorded at fair value in the Group’s internal economic
performance. IFRS precludes recognition of this fair value effect.
energy mix
The various energy sources used to meet the demand for energy.
ERMI (European refining margin indicator)
A Group indicator intended to represent the margin after variable
costs for a hypothetical complex refinery located around Rotterdam
in Northern Europe that processes a mix of crude oil and other
inputs commonly supplied to this region to produce and market the
main refined products at prevailing prices in this region. The
indicator margin may not be representative of the actual margins
achieved by the Group in any period because of TOTAL’s particular
refinery configurations, product mix effects or other company-specific
operating conditions.
ethane
A colorless, odorless combustible gas of the alkanes class
composed of two carbon atoms 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). Ethanol has numerous food, chemical and energy (biofuel)
applications.
ethylene / propylene
Petrochemical products derived from cracking naphtha and used
mainly in the production of polyethylene and polypropylene, two
plastics frequently used in packaging, the automotive industry,
household appliances, healthcare and textiles.
F
farm-in (or farm-out)
Acquisition (or sale) of all or part of a participating interest in an oil
and gas mining property by way of an assignment of rights and
obligations in the corresponding permit or license and related contracts.
farnesane
A hydrocarbon molecule containing 15 carbon atoms, which can
be used to produce fuel or chemical compounds.
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.
fossil energies
Energies produced from oil, natural gas and coal.
FPSO (floating production, storage and offloading)
Floating integrated offshore unit comprising the equipment used to
produce, process and store hydrocarbons and offload them directly
to an offshore oil tanker.
G
greenfield project
Project concerning fields that have never been developed.
gross investments
Investments including acquisitions and increases in non-current loans.
Registration Document 2016. TOTAL
371
H
M
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.
hydrocracker
A refinery unit that uses catalysts and extraordinarily high pressure,
in the presence of surplus hydrogen, to convert heavy oils into
lighter fractions.
I
inventory valuation effect
The adjusted results of the Refining & Chemicals and
Marketing & Services 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 price differentials 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.
J
joint venture
Refer to the definition above of “association / consortium / joint
venture”.
L
lignocellulose
Lignocellulose is the main component of the wall of plant cells. It
can be sourced from agricultural and farming wastes or by-
products of wood transformation as well as dedicated plantations
and constitutes the most abundant renewable carbon source on
the planet. This abundance and its composition (very rich in
polymerized sugars) makes it an excellent choice to produce
biofuels. As a result, its conversion, whether by thermochemical
(e.g., gasification) or biochemical techniques, is widely studied.
liquids
Liquids consist of crude oil, bitumen, condensates and NGL.
LNG (liquefied natural gas)
Natural gas, comprised primarily of methane, that has been
liquefied by cooling in order to transport it.
LPG (liquefied petroleum gas)
Light hydrocarbons (comprised of butane and propane, belonging
to the alkanes class and composed of three and four carbon atoms
respectively) that are gaseous under normal temperature and
pressure conditions and that are kept in liquid state by increasing
the pressure or reducing the temperature. LPG is included in NGL.
mineral interests
Rights to explore for and / or produce oil and gas in a specific area for
a fixed period. Covers the concepts of “permit”, “license”, “title”, etc.
N
naphtha
Heavy gasoline used as a base in petrochemicals.
natural gas
Mixture of gaseous hydrocarbons, composed mainly of methane.
NGL (natural gas liquids)
A mixture of light hydrocarbons that exist in the gaseous phase at
room temperature and are recovered as liquid in gas processing
plants. NGL include very light hydrocarbons (ethane, propane and
butane).
net cash flow
Cash flow from operating activities before working capital changes
at replacement cost – net investments (including other transactions
with non-controlling interests).
net financial debt
Non-current financial debt, including current portion, current
borrowings, other current financial liabilities less cash and cash
equivalents and other current financial assets.
net-debt-to-equity ratio
(Net debt) / (adjusted shareholders’ equity).
net investments
Gross investments – divestments – repayment of non-current
loans – other operations with non-controlling interests.
O
oil and gas
Generic term which includes all hydrocarbons (e.g., crude oil,
condensates, NGL, bitumen and natural gas).
olefins
Group of 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.), in the production of elastomers
(polybutadiene, etc.) or in the production of large chemical
intermediates.
operating cash flow before working capital changes
Cash flow from operating activities before changes in working
capital at replacement cost.
organic investments
Net investments, excluding acquisitions, divestments and other
operations with non-controlling interests.
operated production
Total quantity of oil and gas produced on fields operated by an oil
and gas 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 the joint
venture that owns the refinery.
372
TOTAL. Registration Document 2016
P
permit
Area contractually granted to an oil and gas company (or a consortium)
by the host country for a defined period to carry out exploration
work or to exploit a field.
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.
polymers
Molecule composed of monomers bonded together by covalent
bonds, such as polyolefins obtained from olefins or starch and
proteins produced naturally.
price effect
The impact of changing hydrocarbon prices on entitlement volumes
from production sharing and buyback contracts. For example, as
the price of oil or gas increases above certain pre-determined
levels, TOTAL’s share of production generally decreases.
production plateau
Expected average stabilized level of production for a field following
the production build-up.
production sharing contract / agreement (PSC / PSA)
Exploration and production contract under which a host country or,
more frequently, its national company, transfers to an oil and gas
company (the contractor) or a consortium (the contractor group)
the right to explore a geographic area and develop the fields
discovered. The contractor (or contractor group) undertakes the
execution and financing, at its own risk, of all operations. In return,
it is entitled to a portion of the production, called cost oil / gas, to
recover its costs and investment. The remaining production, called
profit oil / gas, is then shared between the contractor (contractor group),
and the national company and / or host country.
project
As used in this document, “project” may encompass different
meanings, such as properties, agreements, investments,
developments, phases, activities or components, each of which
may also informally be described as a “project”. Such use is for
convenience only and is not intended as a precise description of
the term “project” as it relates to any specific governmental law or
regulation.
proved permit
Permit for which there are proved reserves.
proved reserves (1P reserves)
Proved oil and gas reserves are those quantities of oil and gas,
which, by analysis of geoscience and engineering data, can be
estimated with reasonable certainty to be economically producible
from a given date forward, from known reservoirs, and under
existing economic conditions, operating methods, and government
regulations, prior to the time at which contracts providing the right
to operate expire, unless evidence indicates that renewal is
reasonably certain, regardless of whether deterministic or
probabilistic methods are used for the estimation.
proved developed reserves
Proved developed oil and gas reserves are proved reserves that
can be expected to be recovered (i) through existing wells with
existing equipment and operating methods or in which the cost of
the required equipment is relatively minor compared to the cost of a
new well; and (ii) through installed extraction equipment and
infrastructure operational at the time of the reserves estimate if the
extraction is by means not involving a well.
proved undeveloped reserves
Proved undeveloped oil and gas reserves are proved reserves that
are expected to be recovered from new wells on undrilled acreage,
or from existing wells where a relatively major expenditure is
required for recompletion.
proved and probable reserves (2P reserves)
Sum of proved reserves and probable reserves. 2P reserves are the
median quantities of oil and gas recoverable from fields that have
already been drilled, covered by E&P contracts and for which technical
studies have demonstrated economic development in a long-term
price environment. They include projects developed by mining.
R
refining
The various processes used to produce petroleum products from
crude oil (e.g., distillation, reforming, desulphurization, cracking).
renewable energies
An energy source the inventories of which 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
Estimated remaining quantities of oil and gas and related
substances expected 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.
return on average capital employed (ROACE)
Ratio of adjusted net operating income to average capital employed
at replacement cost between the beginning and the end of the period.
return on equity (ROE)
Ratio of adjusted consolidated net income to average adjusted
shareholders’ equity (after distribution) between the beginning and
the end of the period. Adjusted shareholders’ equity for a given
period is calculated after distribution of the dividend (subject to
approval by the Shareholders’ Meeting).
Registration Document 2016. TOTAL
373
S
T
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.
shale oil
Oil in a source rock that has not migrated to a reservoir.
sidetrack
Well drilled from a portion of an existing well (and not by starting
from the surface). It is used to get around an obstruction in the
original well or resume drilling in a new direction or to explore a
nearby geological area.
silicon
The most abundant element in 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, but other minerals or
alloys may be used.
special items
Due to their unusual nature or particular significance, certain
transactions qualifying as “special items” are excluded from the
business segment figures. In general, special items relate to
transactions that are significant, infrequent or unusual. In certain
instances, transactions such as restructuring costs or asset
disposals, which are not considered to be representative of the
normal course of business, may qualify as special items although
they may have occurred in prior years or are likely to recur in
following years.
steam cracker
A petrochemical plant that turns naphtha and light hydrocarbons
into ethylene, propylene, and other chemical raw materials.
thermochemical conversion
Conversion of carbon energy sources (gas, coal, biomass,
waste, CO2) through thermal transformation (chemical reactions
controlled by the combined action of temperature, pressure and
often of a catalyst). Gasification is an example.
train
Facility for converting, liquefying, storing and off-loading natural gas.
turnaround
Temporary shutdown of a facility for maintenance, overhaul and
upgrading.
U
unconventional 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,
methane hydrates, extra heavy oil, bitumen and liquid or gaseous
hydrocarbons generated during pyrolysis of oil shale.
unitization
Creation of a new joint venture and appointment of a single
operator for the development and production as single unit of an oil
or gas field involving 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.
374
TOTAL. Registration Document 2016
© TOTAL S.A. March 2017
Cover photography: Guillaume Perrin © TOTAL
see you on
total.com
TOTAL S.A.
Registered Office:
2, place Jean Millier - La Défense 6
92400 Courbevoie - France
Share capital: 6,133,930,082.50 euros
542 051 180 RCS Nanterre
total.com
Reception : +33 (0)1 47 44 45 46
Investor Relations: +44 (0)207 719 7962
North American Investor Relations: +1 (713) 483-5070