form 20-F
2017
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
(Mark One)
(cid:510)REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
(cid:510)ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the (cid:402) scal year ended December(cid:510)31, 2017
OR
(cid:510)TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
OR
(cid:510)SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
Commission (cid:402) le number: 1-10888
OR
TOTAL S.A.
(Exact Name of Registrant as Speci(cid:402) ed 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 Of(cid:402) ces)
Patrick de La Chevardière
Chief Financial Of(cid:402) cer
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(cid:510)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(cid:510)Exchange Commission.
Securities registered or to be registered pursuant to Section(cid:510)12(g) of the Act.
Securities for which there is a reporting obligation pursuant to Section(cid:510)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.
2,528,989,616 Shares, par value €2.50 each, as of December(cid:510)31, 2017
Indicate by check mark if the registrant is a well-known seasoned issuer, as de(cid:402) ned in Rule 405 of the Securities Act.(cid:510)(cid:510)(cid:510)(cid:510)Yes(cid:510)(cid:510)
If this report is an annual or transition report, indicate by check mark if the registrant is not required to (cid:402) le reports pursuant to Section(cid:510)13 or 15(d) of the Securities Exchange
Act of 1934.(cid:510)(cid:510)(cid:510)(cid:510)Yes(cid:510)(cid:510)
(cid:510)(cid:510)(cid:510)(cid:510)No(cid:510)(cid:510)
(cid:510)(cid:510)(cid:510)(cid:510)No(cid:510)(cid:510)
Indicate by check mark whether the registrant (1)(cid:510)has (cid:402) led all reports required to be (cid:402) led by Section(cid:510)13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12(cid:510)months
(or for such shorter period that the registrant was required to (cid:402) le such reports), and (2)(cid:510)has been subject to such (cid:402) ling requirements for the past 90 days.(cid:510)(cid:510)(cid:510)(cid:510)Yes(cid:510)(cid:510)
(cid:510)(cid:510)(cid:510)(cid:510)No(cid:510)(cid:510)
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(cid:510)months (or for such shorter period that the registrant was required to submit
and post such (cid:402) les).** Yes(cid:510)(cid:510)
** In accordance with the applicable rules, the registrant is (cid:402) ling Interactive Data Files for the (cid:402) rst time with this report.
(cid:510)(cid:510)(cid:510)(cid:510)No(cid:510)(cid:510)
Indicate by check mark whether the registrant is a large accelerated (cid:402) ler, an accelerated (cid:402) ler, or a non-accelerated (cid:402) ler. See de(cid:402) nition of “accelerated (cid:402) ler and large accelerated
(cid:402) ler” in Rule 12b-2 of the Exchange Act. (Check one):
Large(cid:510)accelerated(cid:510)(cid:402) ler(cid:510)(cid:510)
Accelerated (cid:402) ler(cid:510)(cid:510)
Non-accelerated(cid:510)(cid:402) ler(cid:510)(cid:510)
Emerging growth company(cid:510)(cid:510)
If an emerging growth company that prepares its (cid:402) nancial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended
transition period for complying with any new or revised (cid:402) nancial accounting standards*** provided pursuant to Section 13(a) of the Exchange Act.(cid:510)
*** The term “new or revised (cid:402) nancial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codi(cid:402) cation
after April 5, 2012.(cid:510)
Indicate by check mark which basis of accounting the registrant has used to prepare the (cid:402) nancial statements included in this (cid:402) ling:
International Financial Reporting Standards as issued by the International
U.S. GAAP(cid:510)(cid:510)
Accounting Standards Board(cid:510)(cid:510)
Other(cid:510)(cid:510)
If “Other” has been checked in response to the previous question, indicate by check mark which (cid:402) nancial statement item the registrant has elected to follow.(cid:510)(cid:510)(cid:510)(cid:510)Item(cid:510)17(cid:510)
If this is an annual report, indicate by check mark whether the registrant is a shell company (as de(cid:402) ned in Rule 12b-2 of the Exchange Act).(cid:510)(cid:510)(cid:510)(cid:510)Yes(cid:510)(cid:510)
(cid:510)(cid:510)(cid:510)(cid:510)No(cid:510)(cid:510)
(cid:510)(cid:510)(cid:510)Item(cid:510)18(cid:510)(cid:510)
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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
Risk factors
ITEM 4.
Information on the company
History and development
Business overview
Other matters
ITEM 4A.
Unresolved staff comments
ITEM 5.
ITEM 6.
Operating and financial review and prospects
Directors, senior management and employees
Directors and senior management
Compensation
Corporate governance
Employees and share ownership
ITEM 7.
ITEM 8.
ITEM 9.
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
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1
2
2
2
2
2
2
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14
14
14
14
14
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Basis of presentation
References in this annual report on Form 20-F to pages and sections of the 2017 Registration Document are references only to those pages and
sections of TOTAL’s Registration Document for the year ended December 31, 2017 attached in Exhibit 15.1 to this Form 20-F. Other than as
expressly provided herein, the 2017 Registration Document is not incorporated herein by reference.
TOTAL’s Consolidated Financial Statements, which start on page 233 of the 2017 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, 2017.
In addition, this annual report on Form 20-F and the 2017 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, 2017. 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. – 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 405 of the 2017 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:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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;
FORM 20 F
i
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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;
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 refer to “Item 3. – 3.2 Risk factors”, “Item 5. Operating and financial review and prospects” and “Item 11.
Quantitative and qualitative disclosures about market risk”.
ii
FORM 20 F
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
ITEM 3. KEY INFORMATION
Selected financial data
3.1
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, 2017, 2016, 2015, 2014 and 2013. 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 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
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. All such data should be read
in conjunction with the Consolidated Financial Statements and the Notes thereto starting on page 233 of the 2017 Registration Document, which
are incorporated herein by reference.
(M$, except share and per share data)(a)
INCOME STATEMENT DATA
Revenues from sales
Net income, Group share
Earnings per share ($)
Fully diluted earnings per share ($)
CASH FLOW STATEMENT DATA
Cash flow from operating activities
Total expenditures
BALANCE SHEET DATA
Total assets
Non-current financial debt
Non-controlling interests
Shareholders’ equity – Group share
Common shares
DIVIDENDS
Dividend per share (€)
Dividend per share ($)
COMMON SHARES(d)
2017
2016
2015
2014
2013
149,099
127,925
143,421
212,018
8,631
$3.36
$3.34
22,319
16,896
242,631
41,340
2,481
111,556
7,882
€2.48 (b)
$2.96(b)(c)
6,196
$2.52
$2.51
16,521
20,530
5,087
$2.17
$2.16
19,946
28,033
4,244
$1.87
$1.86
25,608
30,509
230,978
224,484
229,798
43,067
2,894
98,680
7,604
€2.45
$2.61
44,464
2,915
92,494
7,670
€2.44
$2.67
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
Average number outstanding of common shares
€2.50 par value (shares undiluted)
Average number outstanding of common shares
€2.50 par value (shares diluted)
2,481,802,636
2,379,182,155
2,295,037,940
2,272,859,512
2,264,349,795
2,494,756,413
2,389,713,936
2,304,435,542
2,281,004,151
2,271,543,658
(a)
(b)
(c)
(d)
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.
Subject to approval by the shareholders’ meeting on June 1, 2018.
Estimated dividend in dollars includes the first quarterly interim ADR dividend of $0.73 paid in October 2017 and the second quarterly interim ADR dividend of $0.75
paid in January 2018, as well as the third quarterly interim ADR dividend of $0.74 payable in April 2018 and the proposed final interim ADR dividend of $0.74 payable in
June 2018, both converted at a rate of $1.20/€.
The number of common shares shown has been used to calculate per share amounts.
FORM 20 F
1
Risk factors
3.2
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 3.1 (“Risk factors”) of chapter 3 of the 2017 Registration Document (starting
on page 74) 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 points 3.3
(“Internal control and risk management procedures”) and 3.5 (“Vigilance Plan”) of chapter 3 (starting on pages 88 and 96, respectively) of the
2017 Registration Document, which are incorporated herein by reference.
ITEM 4. INFORMATION ON THE COMPANY
iew
velopment
The following information providing an integrated overview of the Group from the 2017 Registration Document is incorporated herein by
reference:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
presentation of the Group and its governance (point 1.1 of chapter 1, starting on page 4);
the Group’s collective ambition and strategy (point 1.2 of chapter 1, on page 9);
history, employees, integrated business model and geographic presence (point 1.3 of chapter 1, starting on page 10);
an overview of the Group’s R&D, investment policy and sustainable development initiatives (point 1.5 of chapter 1, on page 23); and
organizational structure (point 1.6 of chapter 1, starting on page 26).
The following information providing an overview of the Group’s businesses and activities from the 2017 Registration Document is incorporated
herein by reference:
(cid:142)
(cid:142)
(cid:142)
business overview for fiscal year 2017 (points 2.1 to 2.4 of chapter 2, starting on page 30);
information concerning the Group’s principal capital expenditures and divestitures (point 2.5 of chapter 2, starting on page 68). See also
“Item 5. Operating and financial review and prospects”; 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 259).
The following other information from the 2017 Registration Document is incorporated herein by reference:
(cid:142)
(cid:142)
(cid:142)
insurance policy (point 3.4 of chapter 3, starting on page 95);
social, environmental and societal information (introduction and points 5.1.3 to 5.4 of chapter 5, starting on page 170); and
investor relations (point 6.6 of chapter 6, starting on page 223).
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 2017 Registration Document (starting on page 233),
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 2017 Registration Document (starting on page 244), which is
incorporated herein by reference.
Overview
5.1
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.
Higher crude oil and natural gas prices generally have a positive effect on the income of TOTAL, since the Exploration & Production segment's
oil and gas business and Gas, Renewables & Power segment’s downstream gas business are positively impacted by the resulting increase in
revenues. Lower crude oil and natural gas prices generally have a corresponding negative effect. The effect of changes in crude oil prices on the
activities of TOTAL’s Refining & Chemicals and Marketing & Services segments 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
2
FORM 20 F
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, refer to “Item 3. – 3.2 Risk factors”.
The Brent price rose to $54/b on average in 2017 from $44/b in 2016 while remaining volatile. The Group demonstrated its ability to capture the
benefit of higher prices and reported a return on equity above 10%, the highest among the majors. The Exploration & Production segment, in
particular, increased its adjusted net operating income by approximately 86% and its operating cash flow before working capital changes at
replacement cost(1) by 38% whereas oil prices only increased by 24%.
TOTAL’s net income (Group share) in 2017 increased by 39% to $8,631 million from $6,196 million in 2016, mainly due to higher hydrocarbon
prices and growth of the Group’s production. Adjustments to net income (Group share), which include special items and the after-tax inventory
valuation effect, had a negative impact of $1,947 million in 2017. Excluding these items, adjusted net income increased by 28% (compared to a
24% increase in Brent) to $10,578 million in 2017 compared to $8,287 million in 2016, due to a much higher contribution from Exploration &
Production and the continued decrease in the Group’s breakeven. For additional information, refer to “– 5.2 Group results 2015-2017” and
“– 5.3 Business segment reporting”, below.
Financial discipline was successfully maintained. Organic investments were $14.4 billion (excluding acquisitions), in line with the Group’s target of
$13-15 billion, and cost savings reached $3.7 billion in 2017, more than the target of $3.5 billion. Production costs(2) fell to $5.4/boe in 2017
from $9.9/boe in 2014.
These strong results were driven by production growth (5% in 2017), notably the start-up of the Moho-Nord in the Republic of the Congo, the
ramp-up of Kashagan in Kazakhstan and the entry into Al Shaheen in Qatar. The Downstream(3) confirmed again this year its ability to generate
about $7 billion of operating cash flow before working capital changes at replacement cost and reported a return on capital employed of more
than 30%.
In 2017, the Group took advantage of the cyclical low to launch five Upstream projects, including the first phase of the Libra development in
Brazil, as well as launching petrochemical projects in the United States and South Korea. In the Exploration & Production segment, the Group is
preparing for future growth with the acquisition of Mærsk Oil, strengthening its position in the North Sea, and finalized its entry into the Lapa and
lara fields in Brazil in early 2018. In the U.S. Gulf of Mexico, the Group participated in a major discovery at the Ballymore prospect. In the
framework of reinforcing its integrated gas strategy, it announced the acquisition of the LNG business of Engie to take full advantage of the
fast-growing LNG market. Marketing & Services continues to grow, notably by expanding its retail network into Mexico.
The strategy implemented since 2015 has enabled the Group to reduce its pre-dividend organic breakeven(4) to $27/b in 2017 and generate
$22 billion of debt-adjusted cash flow (“DACF”)(5). The Group also continued to strengthen its balance sheet, ending the year with a 13.8%
gearing(6), a significant decrease compared to 2016.
Outlook
Since the end of 2017, Brent has been trading between $60/b and $70/b, supported by strong demand (+1.6 Mb/d in 2017), extended
production cuts by OPEC and Russia and a decrease in crude oil inventories, which nevertheless remain higher than the past five-year average,
which could contribute to continuing price volatility. The Group maintains its strategy to cut costs with the objective of achieving over $4 billion of
cost savings in 2018 and production costs of $5.5/boe. Organic investments are targeted at around $14 billion in 2018.
The Exploration & Production segment’s production is expected to increase by 6% in 2018, confirming the objective to grow by 5% per year on
average between 2016 and 2022. As a result of this expected growth and the portfolio mix, the Group’s cash flow sensitivity to a $10/b change
in the price of Brent increases to $2.8 billion in 2018 from $2.5 billion in 2017. The Group intends to take advantage of the favorable cost
environment by continuing to launch projects in 2018. The growing demand for LNG supports the Group’s strategy to develop along the
integrated gas value chain, as illustrated by the announced acquisition of Engie’s LNG portfolio.
In the context of sharply higher oil prices, rising refined product inventories, due to high global refining utilization rates, and seasonally weak
winter demand, refining margins have decreased since December 2017. Despite the current weakness in refining margins, the Downstream is
expected to generate $7 billion of operating cash flow before working capital changes at replacement cost once again in 2018. Refining &
Chemicals continues to expand its high-return integrated platforms notably in the United States and in Asia-Middle East. Marketing & Services
continues to pursue its growth strategy in high-potential markets.
The Group’s pre-dividend organic breakeven is continuing to fall, with an objective of $25/b in 2018.
(1)
(2)
(3)
(4)
(5)
(6)
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
“— 5.3 Business segment reporting” and Note 3 to the Consolidated Financial Statements in the 2017 Registration Document (starting on page 247), which
is incorporated herein by reference.
“Production costs” = costs related to the production of hydrocarbons in accordance with FASB ASC 932-360-25-15.
Refining & Chemicals and Marketing & Services segments.
Barrel price permitting the generation of cash flow that is equal to organic investments.
DACF = operating cash flow excluding both the change in working capital at replacement cost and financial charges. It provides a measure of cash flow
generated by the Group’s activities regardless of its financial structure.
“Gearing” refers to the net-debt-to-equity ratio. “Net-debt-to-equity ratio” = (net debt)/(adjusted shareholders’ equity). For additional information, refer to
Note 15.1(E) to the Consolidated Financial Statements in the 2017 Registration Document (on page 307), which is incorporated herein by reference.
FORM 20 F
3
After a period of heavy investment, the Group’s cash flow generation is growing strongly, driven by an increase in production that is at the best
level among the majors. The Group has taken advantage of the low part of the oil price cycle to acquire high-quality resources at attractive
prices and emerge stronger with better visibility on its cash flow generation and a net-debt-to-equity ratio below 20%(1). In this context, the
Board of Directors is proposing a shareholder return policy for the coming three years comprised of dividend increases and share buybacks (for
additional information concerning the Group’s dividends and dividend policy, refer to point 6.2 of chapter 6 (starting on page 213) of the 2017
Registration Document, which is incorporated herein by reference).
5.2
Group results 2015-2017
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)
–
–
–
–
Exploration & Production
Gas, Renewables & Power(b)
Refining & Chemicals
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(c)
Divestments
Net investments(d)
Organic investments(e)
Resource acquisitions(f)
Cash flow from operating activities
–
Includes (increase)/decrease in working capital(g)
2017
171,493
2016
149,743
2015
165,357
5,985
485
3,790
1,676
2,015
3.34
2,495
8,631
16,896
5,264
11,636
14,395
714
22,319
827
3,217
439
4,195
1,559
2,214
2.51
2,390
6,196
20,530
2,877
17,757
17,484
780
16,521
(1,119)
4,330
567
4,839
1,591
2,361
2.16
2,304
5,087
28,033
7,584
20,360
22,976
2,808
19,946
1,683
(a)
(b)
(c)
(d)
(e)
(f)
(g)
Adjusted results are defined as income using replacement cost, adjusted for special items, excluding the impact of changes for fair value. See “– 5.3 Business segment
reporting” below for further details.
Following the Group’s reorganization fully effective as of January 1, 2017, the new Gas, Renewables & Power segment reflects the Group’s ambition in low-carbon
energies. It encompasses downstream Gas activities previously integrated in the Upstream (now Exploration & Production) segment, New Energies activities (excluding
biotechnologies) previously integrated in the Marketing & Services segment and a new Innovation & Energy Efficiency division. In this Item 5, certain financial information
for the Exploration & Production, Refining & Chemicals (which includes a new Biofuels division) and Marketing & Services segments have been restated accordingly.
“Gross investments” include acquisitions and increases in non-current loans. For additional information on investments, refer to point 2.5 of chapter 2 of the 2017
Registration Document (starting on page 68), which is incorporated herein by reference.
“Net investments” = gross investments – divestments – repayment of non-current loans – other operations with non-controlling interests. For additional information on
investments, refer to point 2.5 of chapter 2 of the 2017 Registration Document (starting on page 68), which is incorporated herein by reference.
“Organic investments” = net investments excluding acquisitions, asset sales and other operations with non-controlling interests. For additional information on
investments, refer to point 2.5 of chapter 2 of the 2017 Registration Document (starting on page 68), which is incorporated herein by reference.
“Resource acquisitions”= acquisition 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, with a view to producing the recoverable oil and gas.
The change in working capital as determined using the replacement cost method was $1,184 million in 2017, $(467) million in 2016 and $570 million in 2015. For
information on the replacement cost method, refer to Note 3 to the Consolidated Financial Statements in the 2017 Registration Document (starting on page 247), which
is incorporated herein by reference.
2017 vs. 2016
The Brent price rose to $54/b on average in 2017 from $44/b in 2016 while remaining volatile. In 2017, TOTAL’s average liquids price
realization(2) increased by 25% to $50.2/b from $40.3/b in 2016. TOTAL’s average natural gas price realization for the Group’s consolidated
subsidiaries increased by 15% to $4.08/Mbtu in 2017 from $3.56/Mbtu in 2016. The Group’s European Refining Margin Indicator (“ERMI”)(3)
increased to $40.9/t on average in 2017 compared to $34.1/t in 2016, an increase of 20% due to elevated petroleum product demand. In the
fourth quarter of 2017, the ERMI was $35.5/t. Petrochemicals continued to benefit from a favorable environment albeit down compared to a
year ago.
The euro-dollar exchange rate averaged $1.13/€ in 2017 compared to $1.11/€ in 2016.
In this overall more favorable environment, non-Group sales in 2017 were $171,493 million compared to $149,743 million in 2016, an increase
of 15% reflecting the increased hydrocarbon prices and Group production. Non-Group sales increased 11% for the Exploration & Production
segment, 27% for the Gas, Renewables & Power segment, 15% for the Refining & Chemicals segment and 12% for the Marketing & Services
segment.
(1)
(2)
(3)
Excluding the impact of IFRS 16, which is the subject of an ongoing evaluation by a working group formed for that purpose. For information on the transition
to IFRS 16, refer to Note 1.2 to the Consolidated Financial Statements in the 2017 Registration Document (on page 246), which is incorporated herein by
reference.
Consolidated subsidiaries, excluding fixed margins.
The ERMI is 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 the
Group’s particular refinery configurations, product mix effects or other company-specific operating conditions.
4
FORM 20 F
Net income (Group share) in 2017 increased by 39% to $8,631 million from $6,196 million in 2016, mainly due to higher hydrocarbon prices and
growth of the Group’s production. In 2017, adjustments to net income (Group share), which included special items of $(2,213) million and
after-tax inventory valuation effect of $282 million, had a negative impact on net income (Group share) of $1,947 million. Special items included
mainly an impairment of Fort Hills in Canada (following the operator announcement of the increase of the project’s costs), Gladstone LNG in
Australia and assets in Congo, partially offset by a gain on the sale of Atotech. For a detailed overview of adjustment items for 2017, refer to
Note 3 to the Consolidated Financial Statements in the 2017 Registration Document (starting on page 247), which is incorporated herein by
reference. 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. Special items in 2016 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. Excluding these items, adjusted net income in 2017 increased by 28% to $10,578 million compared to $8,287 million in 2016.
The increase was the result of a much higher contribution from Exploration & Production and the continued decrease in the Group’s breakeven.
Income taxes in 2017 amounted to $3,029 million, 3.1 times higher than $970 million in 2016, due to the relative weight and higher tax rates in
the Exploration & Production segment in a higher hydrocarbon price environment.
In 2017, the Company did not buy back any of its shares. 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.
Fully-diluted earnings per share was $3.34 in 2017 compared to $2.51 in 2016, an increase of 33%.
Asset sales completed in 2017 were $4,239 million, essentially comprised of the sale of Atotech, mature assets in Gabon, Gina Krog in Norway,
part of the interest in the Fort Hills project in Canada, the SPMR pipeline in France and LPG activities in Germany. Asset sales completed in
2016 were $1,864 million.
Acquisitions completed in 2017 were $1,476 million, including $714 million of resource acquisitions, mainly comprised of the bonus related to
the license for Elk-Antelope in Papua New Guinea, a marketing and logistics network in East Africa and a 23% equity share in Tellurian, Inc.
Acquisitions completed in 2016 were $2,033 million, including $780 million of resource acquisitions.
In addition, in early 2018, the Group finalized the acquisition of assets in Brazil from Petrobras for $1.95 billion as well as the sale of TotalErg in
Italy for $415 million (including the B2B and the LPG businesses). Finally, in March 2018, TOTAL S.A. finalized the acquisition of Mærsk Oil in a
share and debt transaction.
The Group’s cash flow from operating activities for the full-year 2017 was $22,319 million, an increase of 35% compared to $16,521 million in
2016. The change in working capital at replacement cost for the full-year 2017, which is the (increase)/decrease in working capital of
$827 million as determined in accordance with IFRS adjusted for the pre-tax inventory valuation effect of $357 million, was $1,184 million
compared to $(467) million in 2016. Operating cash flow excluding the change in working capital at replacement cost for the full-year 2017 was
$21,135 million, an increase of 24% compared to $16,988 million in 2016. Operating cash flow for the full-year 2017 excluding the change in
working capital at replacement cost and without financial charges (DACF) was $22,183 million, an increase of 26% compared to $17,581 million
in 2016. The Group’s net cash flow(1) was $9,499 million for the full-year 2017 compared to $(769) million in 2016, mainly due to the nearly
$4 billion increase in operating cash flow before working capital changes, the decrease in net investments related to the $3 billion decrease in
organic investments and the sale of Atotech.
See also “– 5.4 Liquidity and Capital Resources”, below.
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 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. The 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. 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 overall 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.
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. 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, 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 Exploration & Production 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. 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
(1)
“Net cash flow” = operating cash flow before working capital changes at replacement cost – net investments (including other transactions with
non-controlling interests).
FORM 20 F
5
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 was $2.51 in 2016 compared to $2.16 in 2015, an increase of 16%.
Asset sales completed in 2016 were $1,864 million, 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 completed in 2015 $5,968 million.
Acquisitions completed in 2016 were $2,033 million, 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 completed in 2015 were $3,441 million, including $2,808 million of resource acquisitions.
The Group’s cash flow from operating activities for the full-year 2016 was $16,521 million, a decrease of 17% compared to $19,946 million in
2015. The change in working capital at replacement cost for the full-year 2016, which is the (increase)/decrease in working capital of
$(1,119) million as determined in accordance with IFRS adjusted for the pre-tax inventory valuation effect of $652 million, was $(467) million
compared to $570 million in 2015. Operating cash flow excluding the change in working capital at replacement cost for the full-year 2016 was
$16,988 million, a decrease of 12% compared to $19,376 million in 2015. Operating cash flow for the full-year 2016 excluding the change in
working capital at replacement cost and without financial charges (DACF) was $17,581 million, a decrease of 11% compared to $19,839 million in
2015. The Group’s net cash flow was $(769) million for the full-year 2016 compared to $(984) million in 2015, an improvement despite a nearly
$10/b decrease in the Brent price in 2016 compared to 2015. The decrease in investments was able to offset the decrease in operating cash flow
before working capital changes mainly caused by the decrease in hydrocarbon prices and European refining margins.
See also “– 5.4 Liquidity and Capital Resources”, below.
Business segment reporting
5.3
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 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 2017 Registration Document (starting on page 247), 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 2017 Registration Document (starting on page 247), which is incorporated herein by
reference.
(1)
“ROACE” = ratio of adjusted net operating income to average capital employed at replacement cost between the beginning and the end of the period.
6
FORM 20 F
5.3.1
Exploration & Production segment
Environment – liquids and gas price realizations(a)
Brent ($/b)
Average liquids price ($/b)
Average gas price ($/Mbtu)
Average hydrocarbons price ($/boe)
(a)
Consolidated subsidiaries, excluding fixed margins.
Production
Liquids (kb/d)
Gas (Mcf/d)
Combined production (kboe/d)
Results
(M$)
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)
–
Including income from equity affiliates
Gross investments
Divestments
Organic investments
Cash flow from operating activities
ROACE
2017
54.2
50.2
4.08
38.7
2017
1,346
6,662
2,566
2017
8,477
2,792
1,546
41.2%
(2,233)
2,105
3,880
5,985
1,542
12,802
1,918
11,310
11,459
6%
2016
43.7
40.3
3.56
31.9
2016
1,271
6,447
2,452
2016
7,629
(431)
1,375
27.7%
401
1,345
1,872
3,217
1,363
16,085
2,187
14,464
9,010
3%
2015
52.4
47.4
4.75
39.2
2015
1,237
6,054
2,347
2015
10,297
(2,669)
1,944
48.2%
(361)
(1,086)
5,416
4,330
1,662
24,233
2,880
20,536
11,567
4%
(a)
(b)
(c)
For the definitions of “operating income” and “net operating income”, refer to Note 3 to the Consolidated Financial Statements in the 2017 Registration Document
(starting on page 247), 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).
Adjusted for special items. See Note 3 to the Consolidated Financial Statements in the 2017 Registration Document (starting on page 247), which is incorporated herein
by reference.
2017 vs. 2016
In 2017, market conditions were more favorable than in 2016. The average realized price of liquids increased by 25% and the average realized gas
price by 15%.
For the full-year 2017, hydrocarbon production was 2,566 thousand barrels of oil equivalent per day (kboe/d), an increase of 5% compared to
2,452 kboe/d in 2016, due to the following:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
+5% due to new start-ups and ramp-ups, notably Moho Nord, Kashagan, Edradour and Glenlivet, and Angola LNG;
+2% portfolio effect, mainly due to taking over the giant Al Shaheen oil field concession in Qatar and acquiring an additional 75% interest in
the Barnett shale in the United States, partially offset by the exit from the southern sector in the Republic of the Congo and asset sales in
Norway;
+1% related to improved security conditions in Libya and Nigeria; and
-3% due to natural field decline, the PSC price effect(1) and OPEC quotas.
For a discussion of the Group’s proved reserves, refer to point 2.1.3 (“Reserves”) of chapter 2 of the 2017 Registration Document (starting on
page 32), which is incorporated herein by reference. See also point 9.1 (“Oil and gas information pursuant to FASB Accounting Standards
Codification 932”) of chapter 9 of the 2017 Registration Document (starting on page 344), 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 Exploration & Production segment in 2017 were $8,477 million compared to $7,629 million in 2016, an increase of
11%.
The segment’s adjusted net operating income was $5,985 million in 2017, an increase of 86% compared to $3,217 million in 2016, notably due
to production growth, cost reductions and an increase in oil and gas prices.
The effective tax rate increased from 27.7% in 2016 to 41.2% in 2017, in line with the rise in hydrocarbon prices.
(1)
The “PSC 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.
FORM 20 F
7
Adjusted net operating income for the Exploration & Production segment excludes special items. The exclusion of special items had a positive
impact on the segment’s adjusted net operating income in 2017 of $3,880 million. Special items mainly included impairments of Fort Hills in
Canada (following the operator announcement of the increase of the project’s costs), Gladstone LNG in Australia, assets in the Republic of the
Congo and gas assets in the United Kingdom, as well as assets in the United States and Norway (for additional information, refer to Note 3 to
the Consolidated Financial Statements in the 2017 Registration Document (starting on page 247), which is incorporated herein by reference). In
2016, the exclusion of special items had a positive impact on the segment’s adjusted net operating income of $1,872 million. Special items
mainly 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.
Technical costs(1) for consolidated affiliates, calculated in accordance with ASC 932(2), continue to fall, to $19.5/boe in 2017 compared to
$20.4/boe in 2016. This decrease was mainly due to the reduction in production costs from $5.9/boe in 2016 to $5.4/boe in 2017.
The segment’s cash flow from operating activities for the full-year 2017 was $11,459 million, an increase of 27% compared to $9,010 million in
2016. Operating cash flow for the full-year 2017 excluding the change in working capital at replacement cost of $(1,932) million ($(726) million in
2016) was $13,391 million compared to $9,736 million in 2016, an increase of 38% whereas oil prices only increased by 24%, notably due to
production ramp-ups on major projects started up since 2016, including Kashagan and Moho Nord, the increase in hydrocarbon prices and
operating cost reductions. Operating cash flow for the full-year 2017 excluding the change in working capital at replacement cost and without
financial charges was $14,753 million compared to $10,592 million in 2016, an increase of 39%.
For information on the segment’s capital expenditures, refer to points 2.1.2 (“Exploration and development”) (on page 32) and 2.5
(“Investments”) (starting on page 68) of chapter 2 of the 2017 Registration Document, which are incorporated herein by reference. See also
“– 5.4 Liquidity and Capital Resources”, below.
In this context, the segment’s ROACE for the full-year 2017 was 6% compared to 3% for the full-year 2016.
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:142)
(cid:142)
(cid:142)
+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 PSC price effect and portfolio effects.
Non-Group sales for the segment in 2016 were $7,629 million compared to $10,297 million in 2015, a decrease of 26%.
The segment’s adjusted net operating income was $3,217 million in 2016, a decrease of 26% compared to $4,330 million in 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 Exploration & Production segment excludes special items. The exclusion of special items had a positive
impact on the segment’s adjusted net operating income in 2016 of $1,872 million. Special items mainly 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. In
2015, the exclusion of special items had a positive impact on the segment’s adjusted net operating income of $5,416 million. Special items
mainly 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.
Technical costs for consolidated subsidiaries, calculated in accordance with ASC 932, were reduced to $20.4/boe in 2016 compared to
$23.0/boe in 2015. This decrease was essentially due to the reduction in production costs from $7.4/boe in 2015 to $5.9/boe in 2016.
The segment’s cash flow from operating activities for the full-year 2016 was $9,010 million, a decrease of 22% compared to $11,567 million in
2015. Operating cash flow for the full-year 2016 excluding the change in working capital at replacement cost of $(726) million ($245 million in
2015) was $9,736 million compared to $11,322 million in 2015, essentially due to the decrease in hydrocarbon prices, partially offset by the
increase in production and decrease in operating costs. Operating cash flow for the full-year 2016 excluding the change in working capital at
replacement cost and without financial charges was $10,592 million compared to $11,920 million in 2015, a decrease of 11%.
In this context, the segment’s ROACE for the full-year 2016 was 3% compared to 4% for the full-year 2015.
(1)
(2)
“Technical costs” = (production costs + exploration expenses + depreciation, depletion and amortization and valuation allowances)/production of the year.
Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 932, Extractive industries – Oil and Gas.
8
FORM 20 F
5.3.2
Gas, Renewables & Power segment
Results
(M$, except ERMI)
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)
Gross investments
Divestments
Organic investments
Cash flow from operating activities
ROACE
2017
12,854
(276)
31
(140)
(385)
870
485
797
73
353
993
10%
2016
10,124
(161)
71
(4)
(94)
533
439
1,221
166
270
538
9%
2015
9,149
(177)
(75)
19
(233)
800
567
588
418
397
(384)
13%
(a)
(b)
For the definitions of “operating income” and “net operating income”, refer to Note 3 to the Consolidated Financial Statements in the 2017 Registration Document
(starting on page 247), which is incorporated herein by reference.
Adjusted for special items. See Note 3 to the Consolidated Financial Statements in the 2017 Registration Document (starting on page 247), which is incorporated herein
by reference.
2017 vs. 2016
Non-Group sales for the Gas, Renewables & Power segment in 2017 were $12,854 million compared to $10,124 million in 2016, an increase of
27%.
The segment’s adjusted net operating income was $485 million in 2017, an increase of 10% compared to $439 million in 2016.
Adjusted net operating income for the Gas, Renewables & Power segment excludes special items. The exclusion of special items had a positive
impact on the segment’s adjusted net operating income in 2017 of $870 million. Special items included an impairment concerning SunPower(1)
in the United States given the depressed economic environment of the solar activity (for additional information, refer to Note 3 to the
Consolidated Financial Statements in the 2017 Registration Document (starting on page 247), which is incorporated herein by reference). In
2016, the exclusion of special items had a positive impact on the segment’s adjusted net operating income of $533 million.
The segment’s cash flow from operating activities for the full-year 2017 was $993 million, an increase of 85% compared to $538 million in 2016.
Operating cash flow for the full-year 2017 excluding the change in working capital at replacement cost of $761 million ($413 million in 2016) was
$232 million, an increase of 86% compared to $125 million in 2016. Operating cash flow for the full-year 2017 excluding the change in working
capital at replacement cost and without financial charges was $294 million compared to $176 million in 2016, an increase of 67%.
For information on the segment’s investments, refer to point 2.5 of chapter 2 of the 2017 Registration Document (starting on page 68), which is
incorporated herein by reference. See also “– 5.4 Liquidity and Capital Resources”, below.
In this context, the segment’s ROACE for the full-year 2017 was 10% compared to 9% for the full year 2016.
2016 vs. 2015
Non-Group sales for the segment in 2016 were $10,124 million compared to $9,149 million in 2015, an increase of 11%.
The segment’s adjusted net operating income was $439 million in 2016, a decrease of 23% compared to $567 million 2015.
Adjusted net operating income for the Gas, Renewables & Power segment excludes special items. The exclusion of special items had a positive
impact on the segment’s adjusted net operating income in 2016 of $533 million compared to a positive impact of $800 million in 2015.
The segment’s cash flow from operating activities for the full-year 2016 was $538 million compared to $(384) million in 2015. Operating cash
flow for the full-year 2016 excluding the change in working capital at replacement cost of $413 million ($(365) million in 2015) was $125 million,
compared to $(19) million in 2015. Operating cash flow for the full-year 2016 excluding the change in working capital at replacement cost and
without financial charges was $176 million compared to $5 million in 2015.
In this context, the segment’s ROACE for the full-year 2016 was 9% compared to 13% for the full year 2015.
(1)
As of December 31, 2017, TOTAL held an interest of 56.26% in SunPower, an American company listed on Nasdaq and based in California.
FORM 20 F
9
5.3.3
Refining & Chemicals segment
Refinery throughput and utilization rates(a)
Total refinery throughput (kb/d)
–
–
–
France
Rest of Europe
Rest of World
Utilization rates based on crude only(b)
(a)
(b)
Includes share of TotalErg, and African refineries reported in the Marketing & Services segment.
Based on distillation capacity at the beginning of the year.
Results
(M$, 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)
Gross investments
Divestments
Organic investments
Cash flow from operating activities
ROACE
2017
1,827
624
767
436
88%
2017
40.9
75,505
4,170
2,979
(944)
6,205
(2,415)
3,790
1,734
2,820
1,625
7,440
33%
2016
1,965
669
802
494
85%
2016
34.1
65,632
4,991
779
(1,244)
4,526
(331)
4,195
1,861
88
1,642
4,585
38%
2015
2,023
674
849
500
86%
2015
48.5
70,623
4,544
1,724
(1,106)
5,162
(323)
4,839
1,875
3,494
851
6,435
40%
(a)
(b)
For the definitions of “operating income” and “net operating income”, refer to Note 3 to the Consolidated Financial Statements in the 2017 Registration Document
(starting on page 247), which is incorporated herein by reference.
Adjusted for special items. See Note 3 to the Consolidated Financial Statements in the 2017 Registration Document (starting on page 247), which is incorporated herein
by reference.
2017 vs. 2016
Refinery throughput decreased by 7% for the full-year 2017 compared to 2016 as a result of the definitive ending of distillation capacity at La
Mède (France) and Lindsey (UK) and the temporary shutdown due to Hurricane Harvey in the United States. The ERMI increased to $40.9/t on
average in 2017 compared to $34.1/t in 2016, an increase of 20% due to elevated petroleum product demand. In the fourth quarter of 2017,
the ERMI was $35.5/t. Petrochemicals continued to benefit from a favorable environment albeit down compared to a year ago.
Non-Group sales for the Refining & Chemicals segment in 2017 were $75,505 million compared to $65,632 million in 2016, an increase of 15%.
The segment’s adjusted net operating income was $3,790 million for the full-year 2017, a decrease of 10% compared to $4,195 million in 2016,
notably due to the impact of Hurricane Harvey, the impact of modernization work on the Antwerp platform and the sale of Atotech in early 2017
as well as lower trading results due to the evolution of the market into backwardation(1).
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 2017 of $298 million
compared to a negative impact of $500 million in 2016. The exclusion of special items had a negative impact on the segment’s adjusted net
operating income in 2017 of $2,117 million, consisting essentially of a gain on the sale of Atotech, compared to a positive impact of $169 million
in 2016.
The segment’s cash flow from operating activities for the full-year 2017 was $7,440 million, an increase of 62% compared to $4,585 million in
2016. Operating cash flow for the full-year 2017 excluding the change in working capital at replacement cost of $2,683 million ($(289) million in
2016) was $4,757 million, a decrease of 2% compared to $4,874 million in 2016. Operating cash flow for the full-year 2017 excluding the
change in working capital at replacement cost and without financial charges was $4,728 million compared to $4,873 million in 2016, a decrease
of 3%.
For information on the segment’s investments, refer to point 2.5 of chapter 2 of the 2017 Registration Document (starting on page 68), which is
incorporated herein by reference. See also “– 5.4 Liquidity and Capital Resources”, below.
In this context, the segment’s ROACE for the full-year 2017 was 33% compared to 38% for the full year 2016.
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.
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%.
(1)
“Backwardation” is the price structure where the prompt price of an index is higher than the future price.
10
FORM 20 F
The segment’s adjusted net operating income in 2016 was $4,195 million compared to $4,839 million in 2015, a decrease of 13% 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 $169 million compared to a negative impact in 2015 of $913 million, consisting essentially of gains on asset sales.
The segment’s cash flow from operating activities for the full-year 2016 was $4,585 million, a decrease of 29% compared to $6,435 million in
2015. Operating cash flow for the full-year 2016 excluding the change in working capital at replacement cost of $(289) million ($647 million in
2015) was $4,874 million, a decrease of 16% compared to $5,788 million in 2015. Operating cash flow for the full-year 2016 excluding the
change in working capital at replacement cost and without financial charges was $4,873 million compared to $5,788 million in 2015, a decrease
of 16%.
In this context, the segment’s ROACE for the full-year 2016 was 38% compared to 40% for the full year 2015.
5.3.4
Marketing & Services segment
Petroleum product sales(a)(kb/d)
Total Marketing & Services sales
–
–
Europe
Rest of world
2017
1,779
1,049
730
(a)
Excludes trading and bulk Refining sales, which are reported under the Refining & Chemicals segment; includes share of TotalErg.
Results
(M$)
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)
Gross investments
Divestments
Organic investments
Cash flow from operating activities
ROACE
2017
74,634
1,819
497
(561)
1,755
(79)
1,676
1,457
413
1,019
2,130
26%
2016
1,793
1,093
700
2016
66,351
1,789
170
(541)
1,418
141
1,559
1,245
424
1,003
1,754
27%
2015
1,818
1,092
726
2015
75,282
1,665
467
(537)
1,595
(4)
1,591
1,267
767
1,130
2,323
25%
(a)
(b)
For the definitions of “operating income” and “net operating income”, refer to Note 3 to the Consolidated Financial Statements in the 2017 Registration Document
(starting on page 247), which is incorporated herein by reference.
Adjusted for special items. See Note 3 to the Consolidated Financial Statements in the 2017 Registration Document (starting on page 247), which is incorporated herein
by reference.
2017 vs. 2016
In 2017, petroleum product sales were generally stable compared to the previous year, with a move toward Africa and Asia where the Group
has strong growth. European sales were affected by the divestment of mature LPG distribution activities in Belgium and Germany.
Non-Group sales for the Marketing & Services segment in 2017 were $74,634 million compared to $66,351 million in 2016, an increase of 12%.
The Marketing & Services segment’s results continue to grow in a context of strong retail margins, notably in Africa. The segment’s adjusted net
operating income in 2017 was $1,676 million, an increase of 8% compared to $1,559 million in 2016.
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 2017 of $3 million compared
to a positive impact of $13 million in 2016. The exclusion of special items had a negative impact on the segment’s adjusted net operating
income in 2017 of $82 million compared to a positive impact of $128 million in 2016.
The segment’s cash flow from operating activities for the full-year 2017 was $2,130 million, an increase of 21% compared to $1,754 million in
2016. Operating cash flow for the full-year 2017 excluding the change in working capital at replacement cost of $(21) million ($(133) million in
2016) was $2,151 million, an increase of 14% compared to $1,887 million in 2016. Operating cash flow for the full-year 2017 excluding the
change in working capital at replacement cost and without financial charges was $2,242 million compared to $1,966 million in 2016, an increase
of 14%.
For information on the Marketing & Services segment’s investments, refer to point 2.5 of chapter 2 of the 2017 Registration Document (starting
on page 68), which is incorporated herein by reference. See also “– 5.4 Liquidity and Capital Resources”, below.
In this context, the segment’s ROACE for the full-year 2017 was 26% compared to 27% for the full year 2016.
FORM 20 F
11
2016 vs. 2015
In 2016, refined product sales decreased slightly compared to 2015, essentially due to the sale of the retail network in Turkey.
Non-Group sales for the segment in 2016 were $66,351 million compared to $75,282 million in 2015, a decrease of 12%.
The segment’s adjusted net operating income in 2016 was $1,559 million, a decrease of 2% compared to $1,591 million in 2015.
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 $128 million compared to a negative impact of $173 million in 2015.
The segment’s cash flow from operating activities for the full-year 2016 was $1,754 million, a decrease of 24% compared to $2,323 million in
2015. Operating cash flow for the full-year 2016 excluding the change in working capital at replacement cost of $(133) million ($382 million in
2015) was $1,887 million, a decrease of 3% compared to $1,941 million in 2015. Operating cash flow for the full-year 2016 excluding the
change in working capital at replacement cost and without financial charges was $1,966 million compared to $2,058 million in 2015, a decrease
of 4%.
In this context, the segment’s ROACE for the full-year 2016 was 27% compared to 25% for the full year 2015.
Liquidity and capital resources
5.4
(M$)
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
2017
22,319
827
(11,632)
(16,896)
5,264
(5,540)
5,147
3,441
24,597
33,185
2016
16,521
(1,119)
(17,653)
(20,530)
2,877
3,532
2,400
(1,072)
23,269
24,597
2015
19,946
1,683
(20,449)
(28,033)
7,584
1,060
577
(2,469)
25,181
23,269
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
5.4.1
The largest part of TOTAL’s capital expenditures in 2017 of $16,896 million was made up of additions to intangible assets and property, plant
and equipment (approximately 84%), with the remainder attributable to equity-method affiliates and to acquisitions of subsidiaries. In the
Exploration & Production segment, as described in more detail under point 9.1.6 (“Cost incurred”) of chapter 9 of the 2017 Registration
Document (on page 356), which is incorporated herein by reference, capital expenditures in 2017 were principally development costs
(approximately 87%, mainly for construction of new production facilities), exploration expenditures (successful or unsuccessful, approximately
5%) and acquisitions of proved and unproved properties (approximately 6%). In the Gas, Renewables & Power segment, approximately 52% of
capital expenditures in 2017 were acquisitions, with the balance being related mainly to facilities investments. In the Refining & Chemicals
segment, approximately 92% of capital expenditures in 2017 were related to refining and petrochemical activities (essentially 55% for existing
units including maintenance and major turnarounds and 45% for new construction), the balance being related mainly to Hutchinson. In the
Marketing & Services segment, approximately 24% of capital expenditures in 2017 were acquisitions, with the balance being related to
expenditures mainly in Europe and Africa.
For additional information on capital expenditures, refer to the discussion above in “– 5.1 Overview”, “– 5.2 Group results 2015-2017” and
“– 5.3 Business segment reporting”, above, as well as points 1.5.2 (“A targeted investment policy”) of chapter 1 (on page 23) and 2.5
(“Investments”) of chapter 2 (starting on page 68) of the 2017 Registration Document, which are incorporated herein by reference.
Cash flow
5.4.2
Cash flow from operating activities in 2017 was $22,319 million compared to $16,521 million in 2016 and $19,946 million in 2015. The increase
of $5,798 million from 2016 to 2017 was mainly due to an increase of the net result and a decrease in working capital requirements in 2017 of
$827 million compared to an increase in 2016 of $1,119 million. 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 product prices at the end of the relevant period compared to the beginning of the same period generates, all other factors
remaining equal, an increase in inventories and accounts receivable net of an increase in accounts payable, resulting in an increase in working
capital requirements. However, despite the increase in oil and oil product prices in 2017, the Group’s working capital requirement decreased by
$827 million, due to increases in accounts payable and decreases in other current assets, partially offset by increases in accounts receivable.
12
FORM 20 F
The Group’s working capital requirement increased by $1,119 million in 2016 mainly due to increases in inventories and receivables partially
offset by an increase in payables, and decreased by $1,683 million in 2015 mainly due to reductions in inventory and receivables.
Cash flow used in investing activities in 2017 was $11,632 million compared to $17,653 million in 2016 and $20,449 million in 2015. The
decrease of $6,021 million from 2016 to 2017 was mainly due to lower expenditures on the portfolio of Exploration & Production projects and
higher divestments mainly in the Refining & Chemicals segment (principally Atotech). 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. Total expenditures in 2017 were $16,896 million compared to $20,530 million in
2016 and $28,033 million in 2015. During 2017, 76% of the expenditures were made by the Exploration & Production segment (as compared to
78% in 2016 and 86% in 2015), 5% by the Gas, Power & Renewables segment (as compared to 6% in 2016 and 2% in 2015), 10% by the
Refining & Chemicals segment (compared to 9% in 2016 and 7% in 2015) and 9% by the Marketing & Services segment (compared to 6% in
2016 and 5% in 2015). The main source of funding for these expenditures was cash from operating activities and issuances of non-current debt.
For additional information on expenditures, please refer to the discussions in “– 5.1 Overview”, “– 5.2 Group results 2015-2017” and
“– 5.3 Business segment reporting”, above, and point 2.5 (“Investments”) of chapter 2 of the 2017 Registration Document (starting on page 68),
which is incorporated herein by reference.
Divestments, based on selling price and net of cash sold, in 2017 were $5,264 million compared to $2,877 million in 2016 and $7,584 million in
2015. In 2017, the Group’s principal divestments were assets sales of $4,239 million, consisting mainly of sales of Atotech, interests in the Gina
Krog field in Norway and in various mature assets in Gabon. 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.
Cash flow used in financing activities in 2017 was $(5,540) million compared to $3,532 million in 2016 and $1,060 million in 2015. The decrease
in cash flow from financing activities in 2017 compared to 2016 was primarily due to the non-issuance of perpetual subordinated notes in 2017
compared to $4,711 million having been issued in 2016, the increase in variation of current borrowings $(7,175) million in 2017 compared to
$(3,260) million in 2016 and the decrease in net issuance of non-current borrowings ($2,277 million in 2017 compared to $3,576 million in
2016).
Indebtedness
5.4.3
The Company’s non-current financial debt at year-end 2017 was $41,340 million(1) compared to $43,067 million at year-end 2016 and
$44,464 million at year-end 2015. 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 2017 Registration
Document (starting on page 303), 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”.
Cash and cash equivalents at year-end 2017 were $33,185 million compared to $24,597 million at year-end 2016 and $23,269 million at
year-end 2015.
On November 27, 2017, Standard & Poor’s upgraded TOTAL’s outlook to stable, with a long term credit rating remaining at A+.
Shareholders’ equity
5.4.4
Shareholders’ equity at year-end 2017 was $114,037 million compared to $101,574 million at year-end 2016 and $95,409 million at year-end
2015. Changes in shareholders’ equity in 2017 were primarily due to the impacts of comprehensive income, dividend payments and the
issuance of common shares. 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.
In 2017, the Company did not buy back any shares. At its meeting held on December 15, 2016, and pursuant to the authorization of the
Extraordinary Shareholders’ Meeting of May 11, 2012, the Company’s Board of Directors decided to cancel 100,331,268 treasury shares (i.e.,
4.13% of the share capital as of December 31, 2016) that the Company 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 Company’s Consolidated Financial Statements. In 2015, the Company 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.
Net-debt-to-equity
5.4.5
As of December 31, 2017, TOTAL’s net-debt-to-equity ratio(2) was 13.8% compared to 27.1% and 28.3% at year-ends 2016 and 2015,
respectively. The decrease from 2016 to 2017 was mostly due to the decrease of the net debt driven by the increase in cash and cash
equivalents and also by the increase of equity explained above.
As of December 31, 2017, the Company had $11,478 million of long-term confirmed lines of credit, of which $11,478 million were unused.
(1)
(2)
Excludes net current and non-current financial debt of $(140) million as of December 31, 2016 and $141 million as of December 31, 2015, related to assets
classified in accordance with IFRS 5 “non-current assets held for sale and discontinued operations”. None as of December 31, 2017.
For additional information, refer to Note 15.1(E) to the Consolidated Financial Statements in the 2017 Registration Document (on page 307), which is
incorporated herein by reference.
FORM 20 F
13
Guarantees and other off-balance sheet arrangements
5.5
As of December 31, 2017, the guarantees provided by the Company in connection with the financing of the Ichthys LNG project amounted to
$8,500 million. As of December 31, 2016, the guarantees amounted to $7,800 million.
Guarantees given against borrowings also include the guarantee given by the Company in connection with the financing of the Yamal LNG
project, which amounted to $4,038 million as of December 31, 2017, compared to $3,147 million as of December 31, 2016.
The Company has confirmed and extended guarantees for Total Refining Saudi Arabia S.A.S. shareholders’ advances that amounted to
$1,462 million as of December 31, 2017, compared to $1,230 million as of December 31, 2016.
The guarantee given in 2008 by the Company in connection with the financing of the Yemen LNG project amounted to $551 million as of
December 31, 2017, same as in 2016.
These guarantees and other information on the Company’s commitments and contingencies are presented in Note 13 to the Consolidated
Financial Statements in the 2017 Registration Document (starting on page 296), which is incorporated herein by reference.
The Group does not currently consider that these guarantees, or any other off-balance sheet arrangements of the Company or any other
members of the Group, have or are reasonably likely to have, currently or in the future, a material effect on the Group’s financial condition,
changes in financial condition, revenues or expenses, results of operation, liquidity, capital expenditures or capital resources.
5.6
Contractual obligations
Payment due by period
(M$)
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)
TOTAL
Less than
1 year
-
4,646
39
485
1,401
8,605
15,176
1-3 years
3-5 years
10,914
-
133
1,093
1,801
12,686
26,627
8,626
-
128
1,072
1,085
11,231
22,142
More than
5 years
20,004
-
856
9,590
2,154
53,844
86,448
Total
39,544
4,646
1,156
12,240
6,441
86,366
150,393
(a)
(b)
(c)
(d)
(e)
Non-current debt obligations are included in the items “Non-current financial debt” and “Hedging instruments of non-current financial debt” of the Consolidated Balance
Sheet (refer to point 8.4 of chapter 8 of the 2017 Registration Document (on page 240), 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 $1,117 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. 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 $39 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, 2017,
less the financial expense due on finance lease obligations for $48 million.
The discounted present value of Exploration & Production 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 Exploration & Production segment; and contracts for
capital investment projects in the Refining & Chemicals segment. 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, refer to Note 13 to the Consolidated Financial Statements in the 2017
Registration Document (starting on page 296), which is incorporated herein by reference. The Group has other obligations in connection with
pension plans that are described in Note 10 to the Consolidated Financial Statements in the 2017 Registration Document (starting on page 287),
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 2017 Registration Document
(starting on page 293), 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.
Research and development
5.7
For a discussion of the Group’s R&D policies and activities, refer to points 1.5.1 of chapter 1 (on page 23) and 2.6 of chapter 2 (starting on
page 70) of the 2017 Registration Document, which are incorporated herein by reference.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
d share ownership The following information concerning directors and senior management from the 2017 Registration Document is incorporated herein by
enior management
ernance
reference:
(cid:142)
(cid:142)
composition of the Board of Directors (introduction and point 4.1.1 of chapter 4, starting on page 104); and
information concerning the General Management (point 4.1.5 of chapter 4, starting on page 134).
The following information concerning compensation from the 2017 Registration Document is incorporated herein by reference:
(cid:142)
approach to overall compensation (point 5.1.1.3 of chapter 5, starting on page 172); and
14
FORM 20 F
(cid:142)
compensation for the administration and management bodies (point 4.3 of chapter 4, starting on page 137).
The following information concerning Board practices and corporate governance from the 2017 Registration Document is incorporated herein by
reference:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
practices of the Board of Directors (point 4.1.2 of chapter 4, starting on page 119);
report of the Lead Independent Director on her mandate (point 4.1.3 of chapter 4, starting on page 132);
evaluation of the fonctioning of the Board of Directors (point 4.1.4 of chapter 4, on page 133); and
statement regarding corporate governance (point 4.2 of chapter 4, on page 137).
The following information concerning employees and share ownership from the 2017 Registration Document is incorporated herein by reference:
(cid:142)
(cid:142)
(cid:142)
number and categories of employees (points 5.1.1.1 and 5.1.1.2 of chapter 5, starting on page 171);
shares held by the administration and management bodis (point 4.1.6 of chapter 4, starting on page 135); and
employee shareholding (point 6.4.2 of chapter 6, on page 221).
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
The following information concerning shareholders from the 2017 Registration Document is incorporated herein by reference:
(cid:142)
(cid:142)
major shareholders (point 6.4.1 of chapter 6, starting on page 219); and
shareholding structure (point 6.4.3 of chapter 6, on page 221).
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 2017 Registration Document (starting on page
271), 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, 2015, and ending on the date of this document.
ITEM 8. FINANCIAL INFORMATION
The following information from the 2017 Registration Document is incorporated herein by reference:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
Consolidated Financial Statements and Notes thereto (chapter 8, starting on page 233);
supplemental oil and gas information (points 9.1 and 9.2 of chapter 9, starting on page 344);
report on payments made to governments (point 9.3 of chapter 9, starting on page 363);
legal and arbitration proceedings (point 3.2 of chapter 3, starting on page 86); and
dividend policy and other related information (point 6.2 of chapter 6, starting on page 213).
Except for certain events mentioned in “Item 5. Operating and financial review and prospects” and point 3.2 (“Legal and arbitration
proceedings”) of chapter 3 (starting on page 86) and Note 17 (“Post closing events”) to the Consolidated Financial Statements (on page 323) of
the 2017 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.
ITEM 9. THE OFFER AND LISTING
Markets
9.1
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.
Offer and listing details
9.2
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 6.1 (“Listing details”) of chapter 6 of the 2017 Registration Document (starting on page 210), which is
incorporated herein by reference.
Trading on Euronext Paris
9.2.1
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.
FORM 20 F
15
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 100 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 Stoxx
Europe 50 and 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.
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.
High
45.670
54.710
50.300
48.885
43.430
45.225
44.955
48.885
49.500
49.500
49.075
46.050
46.050
49.335
48.165
49.335
48.025
48.750
48.750
47.585
Low
35.175
38.250
36.920
35.210
35.210
38.065
40.530
41.825
42.225
45.825
43.145
42.225
43.460
45.070
45.070
45.955
46.025
43.090
45.845
43.090
Price per share
(€)
2013
2014
2015
2016
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2017
First Quarter
Second Quarter
Third Quarter
September
Fourth Quarter
October
November
December
2018 (through February 28)
January
February
16
FORM 20 F
Trading on the New York Stock Exchange
9.2.2
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
($)
2013
2014
2015
2016
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
2017
First Quarter
Second Quarter
Third Quarter
September
Fourth Quarter
October
November
December
2018 (through February 28)
January
February
High
62.45
74.220
54.790
51.360
48.000
51.300
50.210
51.360
57.070
52.040
54.690
55.040
55.040
57.070
55.940
57.070
56.980
59.570
59.570
59.230
Low
45.93
48.433
40.930
39.050
39.050
43.550
45.355
45.050
48.150
48.840
48.920
48.150
51.880
53.010
53.010
54.410
54.140
53.370
55.200
53.370
ITEM 10. ADDITIONAL INFORMATION
10.1
The following information from the 2017 Registration Document is incorporated herein by reference:
Share capital
(cid:142)
(cid:142)
(cid:142)
(cid:142)
information concerning the share capital (point 7.1 of chapter 7, starting on page 226);
the use of delegations of authority and power granted to the Board of Directors with respect to share capital increases (point 4.4.2 of
chapter 4, starting on page 162);
information on share buybacks (point 6.3 of chapter 6, starting on page 216); and
factors likely to have an impact in the event of a public offering (point 4.4.4 of chapter 4, on page 163).
10.2
The following information from the 2017 Registration Document is incorporated herein by reference:
Memorandum and articles of association
(cid:142)
(cid:142)
information concerning the articles of incorporation and bylaws, and other information (point 7.2 of chapter 7, starting on page 228); and
participation of shareholders at shareholders’ meetings (point 4.4.3 of chapter 4, on page 163).
Material contracts
10.3
There have been no material contracts (not entered into in the ordinary course of business) entered into by members of the Group since
March 16, 2016.
Exchange controls
10.4
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.
FORM 20 F
17
10.5
Taxation
General
10.5.1
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:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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.
In general, and taking into account the earlier assumptions, for U.S. federal income tax purposes, a U.S Holder of ADRs evidencing ADSs will be
treated as the owner of the shares represented by those ADRs. Exchanges of shares for ADRs, and ADRs for shares, generally will not be subject to
U.S. federal income tax.
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 (Code général des impôts). 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.
18
FORM 20 F
10.5.2
Taxation of dividends
French taxation
The term “dividends” used in the following discussion means dividends within the meaning of the Treaty.
Until December 31, 2017, dividends paid to non-residents of France were in principle subject to a French withholding tax at a rate of 30%,
regardless of whether they were paid in cash, in shares or a mix of both. Note that as of January 1, 2018, the French withholding tax is levied at
a rate of 12.8% for dividends paid to U.S. Holders who are individuals, provided that applicable formalities are complied with in accordance with
the administrative guidelines to be published by the French tax authorities, and at a rate of 30% for dividends paid to U.S. Holders that are legal
entities (the “Legal Entities U.S. Holders”).
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. As of January 1, 2018, this reduced rate would in practice only be of interest to Legal Entities
U.S. Holders subject to the withholding tax at a rate of 30%.
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)
(ii)
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
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.
FORM 20 F
19
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 generally constitute “passive income” 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.
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
10.5.3
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 1 of the year preceding the acquisition. A list of the companies within the scope of the
financial transaction tax for 2018 is published in the French Guidelines Bulletin Officiel des Finances Publiques, BOI-ANNX-000467-20171221.
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. 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
10.5.4
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
20
FORM 20 F
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
10.5.5
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
10.5.6
As of January 1, 2018, the French wealth tax was abolished. Until 2017, the French wealth tax did not apply to a U.S. Holder (i) that was not an
individual, or (ii) in the case of individuals who were eligible for the benefits of the Treaty and who owned, alone or with related persons, directly
or indirectly, TOTAL shares which gave right to less than 25% of TOTAL’s earnings.
U.S. state and local taxes
10.5.7
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.
Dividends and paying agents
10.6
The information set forth in point 6.2.2 (“Dividend payment”) of chapter 6 of the 2017 Registration Document (on page 215) is incorporated
herein by reference.
Statements by experts
10.7
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, 2017, 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.
Documents on display
10.8
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 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 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.
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Please refer to Notes 15.3 (starting on page 312) and 16.2 (on page 322) to the Consolidated Financial Statements in the 2017 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 308) and 16 (starting on page 319) to the Consolidated Financial Statements in the 2017
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 308) and 16 (starting on
page 319) to the Consolidated Financial Statements in the 2017 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.
FORM 20 F
21
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
American depositary receipts fees and charges
12.1
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
–
–
–
–
–
–
–
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
–
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 fiscal year 2017, the Company received net payments of approximately $6.6 million from the depositary.
22
FORM 20 F
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
AND USE OF PROCEEDS
None.
ITEM 15. CONTROLS AND PROCEDURES
Disclosure controls and procedures
15.1
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 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 themselves, as appropriate to allow timely decisions regarding required disclosure.
Management’s annual report on internal control over financial reporting
15.2
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, 2017.
The effectiveness of internal control over financial reporting as of December 31, 2017, 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.
Changes in internal control over financial reporting
15.3
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.
Internal control and risk management procedures
15.4
For additional information, refer to points 3.3 and 3.5 of chapter 3 of the 2017 Registration Document (starting on pages 88 and 96,
respectively), which are 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.
FORM 20 F
23
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
16C.1
The information set forth in point 4.4.5.2 of chapter 4 of the 2017 Registration Document (on page 165) is incorporated herein by reference.
Fees for accountants’ services
Audit Committee pre-approval policy
16C.2
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 2017, 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.
Auditor’s term of office
16C.3
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 2017
February 2017
March 2017
April 2017
May 2017
June 2017
July 2017
August 2017
September 2017
October 2017
November 2017
December 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)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
234,779,415
234,792,947
234,805,949
237,758,364
237,781,335
239,569,766
241,780,495
241,821,595
241,897,317
244,476,614
244,504,681
244,522,205
(a)
(b)
The Annual Shareholders’ Meeting of May 26, 2017, canceled and replaced the previous resolution from the Annual Shareholders’ Meeting of May 24, 2016, authorizing
the Board of Directors to trade in the Company’s own shares on the market for a period of 18 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 June 1, 2018 through the 5th resolution.
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.
24
FORM 20 F
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 16G. CORPORATE GOVERNANCE
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.
Overview
16G.1
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 nominations 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, refer to points 4.1 and 4.2 of chapter 4 of the 2017 Registration Document
(starting on page 104), which are incorporated herein by reference.
Composition of Board of Directors; Independence
16G.2
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) the independant directors should account for half
of the members of the board of directors of widely-held corporations without controlling shareholders, and (ii) independent directors should
account for at least one-third of board members in controlled companies. 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. Accordingly, an independent director is understood to be any non-executive director of the corporation or the group who
has no particular bonds of interest (significant shareholder, employee, other) with them.” 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.
As noted in the AFEP-MEDEF Code, “qualification as an independent director should be discussed by the appointments committee […] and
decided on by the board on the occasion of the appointment of a director, and annually for all directors.”
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 4.1.1.4 of chapter 4 of the 2017 Registration Document (starting on page 116), which is
incorporated herein by reference.
Representation of women on corporate boards
16G.3
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%. Directors representing the employees are not taken into account in calculating
this percentage. 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 March 14, 2018, the
Company’s Board of Directors had six male and six female members. Therefore, excluding the director representing employees in accordance
with French law, the proportion of women on the Board was 45.5%.
FORM 20 F
25
16G.4
Board committees
Overview
16G.4.1
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 French law, a
nominations committee and a compensation committee. 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. It is recommended that the chairman of the compensation committee be independent and that one of its members be an employee
director. None of those three committees should include any Executive Officer(1).
TOTAL has established an Audit Committee, a Governance and Ethics Committee, a Compensation Committee and a Strategy & CSR
Committee. As of March 14, 2018, the composition of these Committees was as follows:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
the Audit Committee had four members, 100% of whom have been deemed independent by the Board of Directors;
the Governance and Ethics Committee had three members, 100% of whom have been deemed independent by the Board of Directors;
the Compensation Committee had four members, 100% of whom have been deemed independent by the Board of Directors (according to
point 8.3 of the AFEP-MEDEF Code, directors representing the employee shareholders and directors representing employees are not taken
into account when determining this percentage); and
the Strategy & CSR Committee had five members. With the exception of Mr. Pouyanné, who chairs the committee, 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 point 4.1.2.3 of chapter 4
of the 2017 Registration Document (starting on page 127), which is 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
16G.4.2
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 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 Officer. 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 4.1.2.3 of chapter 4
of the 2017 Registration Document (starting on page 127), 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-statutory 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-statutory 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 statutory auditors for an audit period of
six financial years. The statutory auditors may only be revoked by a court order and only on grounds of professional negligence or incapacity to
perform their mission.
(1)
As defined by the AFEP-MEDEF Code, Executive Officers “include the Chairman and Chief Executive Officer, the Deputy chief executive officer(s) of public
limited companies with a Board of Directors, the Chairman and members of the Management Board in public limited companies having a Management
Board and Supervisory Board and the statutory managers of partnerships limited by shares”.
26
FORM 20 F
Meetings of non-management directors
16G.5
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 a meeting not
attended by the Executive Officers be organized each year.
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 2017, the Lead Independent Director held a meeting of the independent 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.
Shareholder approval of compensation
16G.6
Pursuant to the provisions of the French Commercial Code, as amended, the compensation of the chairman of the board of directors, the chief
executive officer and, as the case may be, the deputy chief executive officer(s) in French listed companies shall each year be submitted to the
approval of their shareholders. Articles L. 225-37-2 and L. 225-100 of the French Commercial Code provide respectively for an ex ante vote and
an ex post vote:
(cid:142)
(cid:142)
ex ante vote: the shareholders shall each year approve the principles and criteria for determining, allocating and granting the fixed, variable and
exceptional components making up the total compensation and the benefits of any kind, attributable to each of the abovementioned officers for
the current fiscal year. In the event a resolution is rejected by the shareholders, the preceding already approved compensation policy for the
concerned officer will be applicable; and
ex post vote: the shareholders shall each year approve the fixed, variable and exceptional components of the aggregate compensation and
benefit of any kinds due or attributable to each of the abovementioned officers for the preceding fiscal year. In the event a resolution is
rejected by the shareholders, the variable and exceptional components of the compensation will not be paid to the relevant officer.
Disclosure
16G.7
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, assisted by 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 board of directors to present to the shareholders a corporate governance report appended to the management report, notably
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 offices and positions of each TOTAL Executive Officer and the compensation received by each such officer. The
AFEP-MEDEF Code also includes ethical rules concerning which directors are expected to comply.
Code of business conduct and ethics
16G.8
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 of
December 9, 2016, requires the top management (such as the chairman of the board 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 officers 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 3.3.2 of
chapter 3 of the 2017 Registration Document (starting on page 88), which is incorporated herein by reference, and “Item 16B. Code of ethics”.
FORM 20 F
27
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 2017 Registration Document (starting on page 233) 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:
28
FORM 20 F
KPMG Audit
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
To the Shareholders and Board of Directors:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of TOTAL S.A. and subsidiaries (“the Company”) as of December 31, 2017,
2016 and 2015, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for
each of the years in the three year period ended December 31, 2017, and the related notes (collectively, “the consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of
December 31, 2017, 2016 and 2015, and the results of its operations and its cash flows for each of the years in the three year period ended
December 31, 2017, 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) (PCAOB), the
Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control – Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission”, and our report dated March 14, 2018
expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
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 are public accounting firms registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or
fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We
believe that our audits provide a reasonable basis for our opinion.
Paris La Défense, March 14, 2018
KPMG Audit,
a division of KPMG S.A.
/s/ JACQUES-FRANÇOIS LETHU
/s/ ERIC JACQUET
Jacques-François Lethu
Partner
Eric Jacquet
Partner
ERNST & YOUNG Audit
/s/ ERNST & YOUNG AUDIT
ERNST & YOUNG Audit
We or our predecessor firms have served as the Company's
auditor since 1996.
We have served as the Company's
auditor since 2004.
FORM 20 F
29
KPMG Audit
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, 2017
To the Shareholders and Board of Directors,
Opinion on Internal Control Over Financial Reporting
We have audited TOTAL S.A. and subsidiaries’ (“the Company”) internal control over financial reporting as of December 31, 2017, based on
criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2017, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the
consolidated balance sheets of the Company as of December 31, 2017, 2016 and 2015, the related consolidated statements of income,
comprehensive income, changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31,
2017 and the related notes (collectively, “the consolidated financial statements”), and our report dated March 14, 2018 expressed an unqualified
opinion on those consolidated financial statements.
Basis for Opinion
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
are public accounting firms registered with the PCAOB and are required to be independent with respect to the Company in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. 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 of
internal control over financial reporting 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.
Definition and Limitations of Internal Control Over Financial Reporting
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.
Paris La Défense, March 14, 2018
KPMG Audit,
a division of KPMG S.A.
/s/ JACQUES-FRANÇOIS LETHU
/s/ ERIC JACQUET
Jacques-François Lethu
Partner
Eric Jacquet
Partner
ERNST & YOUNG Audit
/s/ ERNST & YOUNG AUDIT
ERNST & YOUNG Audit
30
FORM 20 F
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
101
Bylaws (Statuts) of TOTAL S.A. (as amended through March 8, 2018).
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 2017 Registration Document
(starting on page 324), which is incorporated herein by reference).
Code of Ethics (incorporated by reference to the Company’s annual report on Form 20-F for the year ended
December 31, 2016, filed on March 17, 2017).
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 2017 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.
XBRL Document.
SIGNATURE
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.
TOTAL S.A.
By: /s/ PATRICK POUYANNÉ
Name: Patrick Pouyanné
Title: Chairman and Chief Executive Officer
Date: March 16, 2018
FORM 20 F
31
[THIS PAGE INTENTIONALLY LEFT BLANK]
EXHIBIT 15.1
Exhibit 15.1 contains the excerpts of TOTAL S.A.'s 2017 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 2017 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.]
1 Presentation of the Group –
Integrated report
1.1
1.2
Presentation of the Group and its governance
An ambition that goes hand in hand with sustainable
growth: “become the responsible energy major”
Advantages that allow the Group to stand out
in a changing energy world
1.3
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
1.5
Strong commitments that benefit sustainable growth
A revamped organizational structure to support
1.6
the Group’s ambition
2 Business overview for fiscal year 2017
Exploration & Production segment
Gas, Renewables & Power segment
Refining & Chemicals segment
Marketing & Services segment
Investments
Research & Development
Property, plant and equipment
3 Risks and control
Risk Factors
Legal and arbitration proceedings
Internal control and risk management procedures
Insurance and risk management
Vigilance Plan
4 Report on corporate governance
4.1
4.2
4.3
Administration and management bodies
Statement regarding corporate governance
Compensation for the administration
and management bodies
4.4
Additional information about corporate governance
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
2.1
2.2
2.3
2.4
2.5
2.6
2.7
3.1
3.2
3.3
3.4
3.5
5 Social, environmental
and societal information
5.1
5.2
5.3
5.4
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
Social information
Safety, health and environment information
Societal information
Reporting scopes and method
6 TOTAL and its shareholders
Listing details
Dividend
Share buybacks
Shareholders
6.1
6.2
6.3
6.4
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
6.6
Investor relations
7 General information
7.1
7.2
Share capital
Articles of incorporation and bylaws;
other information
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
8 Consolidated Financial Statements
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
8.2
8.3
8.4
8.5
8.6
Consolidated statement of income
Consolidated statement of comprehensive income
Consolidated balance sheet
Consolidated statement of cash flow
Consolidated statement of changes in shareholders’
equity
Notes to the Consolidated Financial Statements
8.7
9 Supplemental oil and gas information
(unaudited)
9.1
9.2
9.3
Oil and gas information pursuant to FASB
Accounting Standards Codification 932
Other information
Report on the payments made to governments
(Article L. 225-102-3 of the French Commercial
Code)
4
9
10
23
26
30
49
55
62
68
70
72
74
86
88
95
96
104
137
137
161
171
178
193
204
210
213
216
219
223
226
228
238
239
240
241
242
243
344
361
363
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
Glossary
405
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
REGISTRATION DOCUMENT 2017
1
PRESENTATION OF THE GROUP –
INTEGRATED REPORT
1.1
Presentation of the Group
and its governance
1.1.1
A major energy player underpinned
by stable governance
1.1.2
The Group in a few figures
1.2
An ambition that goes hand in hand
with sustainable growth: “become
the responsible energy major”
1.2.1
A collective ambition in view of the
challenges that must be tackled by the oil
and gas industry
1.2.2
A clear strategy for sustainable growth
4
4
7
9
9
9
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
1.5
Strong commitments that benefit
sustainable growth
1.5.1
Committed R&D
1.5.2
A targeted investment policy
1.5.3
A continuous improvement dynamic
1.6
A revamped organizational structure to
support the Group’s ambition
1.6.1
TOTAL S.A., parent company of the
Group and its subsidiaries
1.6.2
A revamped operational structure
23
23
23
23
26
26
27
1.3
Advantages that allow the Group to stand
out in a changing energy world
10
1.3.1
A long-standing energy player that draws
on its strong identity
1.3.2
Employees committed to better energy
1.3.3
1.3.4
The strength of the Group’s integrated
business model
Geographic presence: key to the Group’s
future growth
10
11
12
13
REGISTRATION DOCUMENT 2017
3
1
PRESENTATION OF THE GROUP – INTEGRATED REPORT
Presentation of the Group and its governance
1.1
Presentation of the Group and its governance
1.1.1
A major energy player underpinned by stable governance
1.1.1.1
4th largest international oil and gas major with consolidated sales of $171,493 million
in 2017
TOTAL, which has produced oil and gas for almost a century, is one
of the largest international oil and gas companies and a major player
in low carbon energies(1). It is present on five continents and in more
than 130 countries.
The Group’s activities include the exploration and production of oil
and gas, refining, petrochemicals and the distribution of energy in
various forms to the end customer. Committed to better energy, over
98,000 employees help throughout the world to provide the Group's
customers with products and services that are safer, more affordable,
cleaner, more efficient, more innovative and accessible to the
greatest number of people.
Energy, an essential resource, accompanies the development of
society. In view of the major challenges faced by the world today,
energy producers have a key role to play.
It is by relying on the support provided by its governance and by a
diverse shareholder base that the Group will be able to fulfill its
collective ambition to become a responsible energy major and to supply
more affordable, more available and cleaner energy.
1.1.1.2
A diverse shareholder base
Shareholder base of TOTAL S.A. is diverse, and spread throughout the world. It comprises institutional investors, individual shareholders and
employees committed to the Company project. For more information, refer to point 6.4 of chapter 6.
Shareholding structure by shareholder type
Estimates below are as of December 31, 2017, excluding treasury
shares, based on the survey of identifiable holders of bearer shares
conducted on that date.
Shareholding structure by area
Estimates below are as of December 31, 2017, excluding treasury
shares, based on the survey of identifiable holders of bearer shares
conducted on that date.
Group
employees(a)
5.0%
Individual
shareholders
7.6%
Reste
du monde
700 kb/j
Institutional
shareholders
87.4%
Rest
of Europe
17.1%
United Kingdom
12.8%
Rest of world
8.2%
Reste
du monde
700 kb/j
France
28.3%
North
America
33.6%
(a)
On the basis of employee shareholdings as defined in Article L. 225-102
of the French Commercial Code, treasury shares excluded (5.0% of the
total share capital, refer to point 6.4.1 of chapter 6).
The number of French individual shareholders of TOTAL S.A. is estimated at approximately 450,000.
(1)
TOTAL S.A., a French limited liability company (société anonyme), currently constitutes with all of the Group’s companies, the world’s 4th largest publicly
traded integrated oil and gas group based on market capitalization (in dollars) as of December 31, 2017.
4
REGISTRATION DOCUMENT 2017
PRESENTATION OF THE GROUP – INTEGRATED REPORT
Presentation of the Group and its governance
1.1.1.3
A Board of Directors that is fully committed and able to determine the Company’s
strategic orientations
1
As of March 14, 2018
12
DIRECTORS
90%
INDEPENDENT
DIRECTORS(a)
1
LEAD INDEPENDENT
DIRECTOR
1
DIRECTOR
REPRESENTING
EMPLOYEE
SHAREHOLDERS
60
AVERAGE AGE
OF DIRECTORS
4.2 years
AVERAGE YEARS
OF SERVICE
OF THE BOARD
OF DIRECTORS
45.5%
WOMEN(b)
54.5%
MEN(b)
1
DIRECTOR
REPRESENTING
EMPLOYEES
6
NATIONALITIES
REPRESENTED
(a)
Excluding the director representing the employee shareholders and the director representing employees, in accordance with the recommendations of the
AFEP-MEDEF Code (point 8.3). For more information, refer to point 4.1.1.4 of chapter 4.
(b)
Excluding the director representing employees, in accordance with Article L. 225-27-1 of the French Commercial Code.
The Board of Directors determines the strategic orientation of TOTAL
and supervises its implementation. It approves investment and
disvestment operations when they concern amounts that exceed 3%
of the Group’s equity and examines all matters related to the smooth
running of the company. It monitors the management of both
financial and extra-financial matters and ensures the quality of
information provided to shareholders and to financial markets.
The Board of Directors relies on the work of four Committees: the
Audit Committee, the Governance and Ethics Committee, the
Compensation Committee and the Strategic & CSR Committee.
Composed as of March 14, 2018 of 12 directors, including 9
independent members,
and
the Board
complementarity of experiences, expertises, nationalities and cultures
necessary to take account of the interests of all of the Group’s
shareholders and stakeholders.
reflects diversity
Since December 2015, Patrick Pouyanné has held the position of
Chairman and Chief Executive Officer of TOTAL S.A. The decision to
combine the functions of Chairman of the Board of Directors and
Chief Executive Officer was made further to work undertaken by the
Governance and Ethics Committee, in the interests of the Company
and in compliance with the traditions of the Group. The Board of
Directors deemed that the 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 of having
unified management in strategic negotiations with governments and
the Group’s partners. The Board of Directors regularly examines
whether maintaining
remains
appropriate.
the unified management
form
Attentive to the concerns of investors and stakeholders, the Board of
Directors pays specific attention to the balance of power within the
Group. Consequently, every year, the Board examines desirable
changes to its composition to try to maintain a high level of general
independence and the full involvement of the directors in the work of
the Board and of the Committees. It was also for these reasons that
the Board of Directors, at its meeting on December 16, 2015,
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. Aside from these duties, the Chairman and Chief
Executive Officer and the Lead Independent Director strive to
maintain permanent contact on any important matter concerning the
running of the Company. Since 2016, they have held monthly
meetings. Finally, since 2016, the Lead Independent Director has
organized executive sessions with the independent directors so that
they may discuss the Group’s strategic challenges and working
practices. The directors are also in regular contact with the members
of the Group’s management team, whether members of the
Executive Committee during Board Meetings or operational
managers during Group site visits. Contact between the directors and
managers enables the directors to gain a practical understanding of
the Group’s activities.
The balance of power within the Company’s bodies is thereby
ensured by a stable and structured governance.
REGISTRATION DOCUMENT 2017
5
1
PRESENTATION OF THE GROUP – INTEGRATED REPORT
Presentation of the Group and its governance
Overview of the Board of Directors
As of March 14, 2018
Age
Sex
Nationality
Indepen-
dence
1st appoint-
ment
Expiry of
term of
office
Number of
directorships
in listed
companies(a)
Years’ service
on the Board
Committees
Governance
and Ethics
Audit
Compensa-
tion
Strategic
& CSR
Patrick Pouyanné
Chairman and Chief
Executive Officer
Patrick Artus
Patricia Barbizet
Lead Independent
Director
Marie-Christine
Coisne-Roquette
Mark Cutifani
Maria van der
Hoeven
Anne-Marie Idrac
Gérard Lamarche
Jean Lemierre
Renata Perycz(b)
Christine Renaud(c)
Carlos Tavares
54
66
62
61
59
68
66
56
67
54
49
59
M
M
F
F
M
F
F
M
M
F
F
M
2015
2018
2009
2018
2008
2020
2011
2020
2017
2020
2016
2019
2012
2018
2012
2019
2016
2019
2016
2019
2017
2020
2017
2020
•
•
•
•
•
•
•
•
n/a
n/a
•
●
C
●
●
C
●
●
3
9
10
7
1
2
6
6
2
2
1
1
1
2
2
1
1
2
4
4
1
0
0
2
C
●
●
●
●
●
●
C
●
(a)
(b)
(c)
C:
Number of directorships held by the director in listed companies outside of his or her group, including foreign companies, assessed in accordance with the recommendations
of the AFEP-MEDEF Code, point 18 (refer to point 4.1.1.4 of chapter 4).
Renata Perycz was designated pursuant to the provisions of Article L. 225-23 of the French Commercial Code as director representing employee shareholders on the
proposal of the employee shareholders specified by Article L. 225-102 of the French Commercial Code.
Christine Renaud was designated as director representing employees by the Central Works Council of UES Amont – Global Services – Holding pursuant to the provisions
of Article L. 225-27-1 of the French Commercial Code and of the Company’s bylaws.
Chairperson.
Activities of the Board of Directors and of the Committees
9
MEETINGS OF THE
BOARD OF DIRECTORS
IN 2017
93.5%
AVERAGE
BOARD MEETING
ATTENDANCE
RATE OF THE
DIRECTORS
1
EXECUTIVE SESSION
CHAIRED BY THE
LEAD INDEPENDENT
DIRECTOR
7
AUDIT COMMITTEE
MEETINGS
92% ATTENDANCE
RATE
2
GOVERNANCE AND
ETHICS COMMITTEE
MEETINGS
83.3% ATTENDANCE
RATE
3
COMPENSATION
COMMITTEE
MEETINGS
100% ATTENDANCE
RATE
2
STRATEGIC & CSR
COMMITTEE MEETINGS
90% ATTENDANCE
RATE
The duties and work of the Board of Directors and of its Committees are described in point 4.1.2 of chapter 4.
6
REGISTRATION DOCUMENT 2017
PRESENTATION OF THE GROUP – INTEGRATED REPORT
Presentation of the Group and its governance
1.1.2
The Group in a few figures
1.1.2.1
As of December 31, 2017(a)
2017 key figures
1
PRESENT IN OVER
130
COUNTRIES
98,277
EMPLOYEES
$10.6
billion
ADJUSTED NET
INCOME
(GROUP SHARE)
5%
EXPLORATION
& PRODUCTION
PRODUCTION
GROWTH
$22.2
billion
OPERATING CASH
FLOW EXCLUDING
FINANCIAL
EXPENSES
30.8%
DOWNSTREAM
RETURN ON
CAPITAL
EMPLOYED
€116.4
billion
MARKET
CAPITALIZATION
ON EURONEXT
PARIS
$14.4
billion
ORGANIC
INVESTMENTS
€2.48
DIVIDEND PER SHARE
FOR FISCAL YEAR
2017 (b)
$0.9
billion
R&D
INVESTMENTS
10.1%
RETURN ON
EQUITY
13.8%
NET-DEBT-TO-
EQUITY RATIO
(a)
For a definition of the various performance indicators, refer to the Glossary and to Note 3 to the Consolidated Financial Statements (point 8.7 of chapter 8).
(b)
Subject to approval by the Shareholders’ Meeting on June 1, 2018.
1.1.2.2
Key figures by segment
Exploration & Production
Hydrocarbon production (kboe/d)
Liquids and gas proved reserves(a) (Mboe)
2,347
2,452
2,566
11,580
11,518
11,475
664
639
531
255
258
757
634
517
279
265
761
654
559
348
244
5,605
5,414
5,975
6,104
5,450
(i.e., 47%)
6,025
(i.e., 53%)
2015
2016
2017
2015
2016
2017
Europe and Central Asia
Africa(a)
Middle East and North Africa
Americas
Asia-Pacific
Liquids
Gas
(a) Proved reserves based on SEC rules (Brent at $54.36/b in 2017,
$42.82/b in 2016 and $54.17/b in 2015).
(a) Excluding North Africa.
Gas, Renewables & Power
Managed LNG volumes
(Mt)
Managed LNG volumes
2015
12.8
2016
12.9
2017
15.6
Installed power capacities by gas or renewables(a)
(MW)
Installed power capacities
by gas or renewables
(a)
In Group's equity stake.
2015
687
2016
804
2017
903
REGISTRATION DOCUMENT 2017
7
1
PRESENTATION OF THE GROUP – INTEGRATED REPORT
Presentation of the Group and its governance
Refining & Chemicals and Marketing & Services
Crude oil refining capacity(a) (kb/d)
Petrochemicals production capacity by geographic area
as of December 31, 2017
2,247
2,011
2,021
1,699
198
350
1,454
1,454
202
355
202
365
2015
2016
2017
Europe
Americas
Asia & the Middle East
Asia & the Middle East
5,727 kt
Reste
du monde
700 kb/j
Americas
5,382 kt
Europe
10,293 kt
(a)
Capacity data based on crude distillation unit stream-day capacities
under normal operating conditions, less the impact of shutdown for
regular repair and maintenance activities.
Petroleum product sales (kb/d)
Including Trading
Marketing & Services petroleum product sales
by geographic area in 2017
4,005
4,183
4,019
2,184
2,355
2,142
619
85
570
547
551
139
517
621
604
158
560
555
2015
2016
2017
Europe
Africa
Middle East
Americas
Asia-Pacific(a)
Middle East
45 kb/d
Asia-Pacific(a)
173 kb/d
Americas
81 kb/d
Africa
431 kb/d
Reste
du monde
700 kb/j
Europe
1,049 kb/d
(a)
Including Indian Ocean islands.
(a)
Including Indian Ocean islands.
Workforce
1.1.2.3
Employees by segment(a)
Employees by region(a)
Marketing
& Services
21.6%
Exploration
& Production
14.3%
Corporate
2.5%
Gas, Renewables
& Power
11.8%
Reste
du monde
700 kb/j
Refining & Chemicals
49.1%
Trading & Shipping
0.7%
Rest of Europe
26.1%
Rest of the world
41.4%
Reste
du monde
700 kb/j
France
32.5%
(a)
Refer to point 5.1.1 of chapter 5.
(a)
Refer to point 5.1.1 of chapter 5.
Workforce as of December 31, 2017: 98,277
Workforce as of December 31, 2017: 98,277
8
REGISTRATION DOCUMENT 2017
An ambition that goes hand in hand with sustainable growth: “become the responsible energy maja or”
PRESENTATION OF THE GROUP – INTEGRATED REPORT
1.2
An ambition that goes hand in hand with sustainable
growth: “become the responsible energy major”
1
1.2.1
A collective ambition in view of the challenges that must be tackled
by the oil and gas industry
TOTAL is an integrated energy group and one of the world’s largest.
It is invested with an economic and social mission: as a player within
and a beneficiary of economic globalization, it wishes to make its
success a vector of progress that benefits to the greatest number of
people.
Sustainable Development Goals (SDGs) were adopted by the United
Nations in 2015. These goals acknowledge the decisive role
corporations can play in economic and social development and ask
them to show responsibility and innovation in finding solutions to
global sustainable development challenges.
In 2016, TOTAL committed itself to contributing to the achievement
of the SDGs by implementing the recommendations of the United
Nations. Consequently, the Group has embarked on a structured
approach to identify and prioritize the SDGs on which it can have the
greatest impact, such as climate change, decent work and human
rights, and access to energy.
Access to energy is a source of progress and a condition for
economic and social development and for the improvement of living
conditions of people around the world. In most countries, and in the
developing world in particular, access to low-cost energy is a priority
as it is a pillar of development.
The Group’s vocation is to produce the energy that the world needs,
and will need in the future, and to make it accessible to the greatest
number of people – over one billion(1) people still have no access to
electricity.
This vocation is to be accomplished in a responsible manner and by
working to make an effective contribution to the climate change
issue, in particular.
Meeting the energy needs of a growing global population, providing
concrete solutions to help limit global warming, adapting to new
patterns of consumption and changes to the expectations of
customers and stakeholders constitute the challenges that a major
energy player like TOTAL can help to tackle.
To respond to these challenges, TOTAL's ambition over the next
20 years is to become the responsible energy major by contributing
to the supply of more affordable, more available and cleaner energy
to the greatest number of people:
(cid:142)
(cid:142)
(cid:142)
more affordable – as low-cost energy is essential to favor the
economic development of billions of people who wish to improve
their living conditions;
more available – as people expect energy to be continuously
available and accessible on a daily basis;
cleaner – as the Group intends to reduce the environmental
footprint and the CO2 emissions of its operations, and to actively
contribute to finding solutions that limit the impact of climate
change, particularly by providing its customers with a mix of energy
products whose carbon intensity is regularly reduced.
1.2.2
A clear strategy for sustainable growth
To fulfill this ambition, TOTAL is deploying a clear strategy that is
based on four main priorities and that integrates the challenges of
climate change, using as a point of reference the 2°C Sustainable
Development Scenario of the International Energy Agency (IEA):
(cid:142)
(cid:142)
drive profitable and sustainable growth in Exploration & Production
activities, with priority given to the production of gas (the fossil fuel
that emits the least amount of carbon dioxide) and constant
emphasis on producing at a competitive cost by ensuring strict
investment discipline;
carry on enhancing the competitiveness of major integrated
refining and petrochemical platforms;
(cid:142)
(cid:142)
increase the distribution of petroleum products, particularly in
high-growth regions, and offer innovative solutions and services
that meet the needs of customers above and beyond the supply of
petroleum products; and
expand along the full gas value chain by unlocking access to new
markets, and develop profitable low carbon businesses, in
particular renewable energies and biofuels.
In addition, TOTAL intends to strengthen its involvement in the
circular economy and implement a program of actions, particularly in
the following areas: purchasing, waste management, new ranges of
polymers, solarization of service stations and improved efficiency
energy.
(1)
Source: Energy Access Outlook 2017 published by the International Energy Agency (IEA).
REGISTRATION DOCUMENT 2017
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1
PRESENTATION OF THE GROUP – INTEGRATED REPORT
Advantages that allow the Group to stand out in a changing energy world
1.3
Advantages that allow the Group to stand out
in a changing energy world
To become the responsible energy major and to help provide specific
solutions to major challenges that are to emerge over coming
decades, TOTAL can rely on several advantages: its strong identity
and values, the know-how of employees committed to better energy
its integrated business model and its geographic presence.
1.3.1
A long-standing energy player that draws on its strong identity
Energy is rooted in TOTAL’s history.
A producer of oil and gas for almost a century, the Group history
started in 1924 with the creation of Compagnie française des
pétroles (CFP), which began its oil production activities in the Middle
East at this time. Over the years, the Group has diversified its
1.3.1.1
Key dates of the Group’s history
activities and opened sites around the world by positioning itself in
the gas, refining and petrochemical segments and the distribution of
petroleum products, solar power, bioenergies and electricity.
1920
1924
1927
1933
1939
1941
1945
1947
1951
1954
1956
1960
1961
1965
1966
1967
1970
1971
1974
1976
1980
1982
1983
1985
1994
1996
2000
2001
2003
2006
2011
2016
2017
Creation in Brussels by an Antwerp-based group of bankers and investors of Compagnie Financière belge des Pétroles, known as Petrofina
Creation of Compagnie française des Pétroles (CFP) by Raymond Poincaré, French Prime Minister
Initial discovery of the Kirkuk field in Iraq; the field’s reserves are considerable
Commissioning of the Gonfreville refinery in Normandy (France) with an annual capacity of 900,000 t of crude oil
Discovery in France of the Saint Marcet gas field by Centre de recherches de pétrole du Midi
Creation of Régie Autonome des Pétroles (RAP), which later became the Elf Group
Creation of Société nationale des pétroles d’Aquitaine (SNPA)
Creation of Bureau de recherches de pétroles (BRP)
Creation of Compagnie Française de Distribution des Pétroles en Afrique
Discovery of the Lacq gas field (France) by SNPA
Launch of the TOTAL brand by CFP
Discovery of the Edjeleh, Hassi R’Mel (gas) and Hassi Messaoud (oil) fields in the Algerian Sahara
Construction of the Gonfreville steam cracker (France) to respond to the growing demand for plastic
Discovery of the first offshore fields in Gabon; the Anguille field was the first one found
TOTAL acquires Desmarais Frères, an important player in the distribution market
Creation of Entreprise de recherches et d’activités pétrolières (ERAP) following the merger of BRP and RAP
Launch of the ELF brand
Elf takes control of Antar
The Ekofisk field in the North Sea starts production
Creation of GIE ATO, a joint venture between SNPA and TOTAL in the chemicals industry
Hutchinson-Mapa joins the Group
Creation of Société nationale Elf Aquitaine (SNEA) following the merger of ERAP and SNPA
Creation of Chloé Chimie, a joint venture between Elf Aquitaine, CFP and Rhône Poulenc
Drilling by CFP of the first deep-offshore well in the Mediterranean Sea
Birth of the company Atochem, an SNEA subsidiary, following the merger of ATO Chimie, Chloé Chimie and a part of Péchiney Ugine Kuhlmann
Opening of the first self-service station in France
CFP becomes Total-CFP and then TOTAL in 1991
Disposal by the French state of its majority stake in the capital of Elf Aquitaine
Disposal by the French state of its remaining stake in the capital of Elf Aquitaine
Following the incorporation of Fina in 1999, TOTAL acquires Elf Aquitaine. The new Group is called, TotalFinaElf and is the world’s 4th largest oil
major
The Girassol field on Block 17 in Angola starts production
TotalFinaElf changes its name to TOTAL
Spin-off of Arkema
Investment in the solar energy segment with the acquisition of 60% of the US company, SunPower
Acquisition of Saft Groupe, a battery manufacturer
Announcement of the acquisition of Mærsk Oil & Gas A/S in a share and debt transaction
Announcement of the acquisition of Engie’s LNG business
10
REGISTRATION DOCUMENT 2017
PRESENTATION OF THE GROUP – INTEGRATED REPORT
Advantages that allow the Group to stand out in a changing energy world
Five strong values at the heart of the Group
1.3.1.2
Safety, Respect for Each Other, Pioneer Spirit, Stand Together and
Performance-Minded represent, just as its history, the part of
TOTAL's identity shared by all employees. These values guide the
daily actions and relations of the Group with its stakeholders.
1
“These values describe and unite us. They are the levers on which we rely to achieve our ambition of becoming the responsible energy
major.”
Patrick Pouyanné, Chairman and Chief Executive Officer
These five strong values also require all of TOTAL's employees to act
in an exemplary manner, in priority in the following areas: safety,
security, health, environment, integrity in all of its forms (particularly,
the prevention of corruption, fraud and anti-competitive practices)
and human rights.
It is through strict adherence to these values and to this course of
action that the Group intends to build strong and sustainable growth
for itself and for all of its stakeholders, and thereby deliver on its
commitment to better energy.
1.3.2
Employees committed to better energy
98,277
EMPLOYEES AS OF
DECEMBER 31,
2017
33%
ARE WOMEN
26%
OF MANAGERS
ARE WOMEN
over
150
NATIONALITIES
REPRESENTED
500
INDUSTRIAL,
COMMERCIAL AND
SUPPORT
COMPETENCIES
WITHIN THE
GROUP
over
1,700
TRAINING COURSES
AVAILABLE
256
ACTIVE AGREEMENTS
(INCLUDING 160 IN
FRANCE) WITH
EMPLOYEE REPRESEN-
TATIVES AT THE
END OF 2017
Employee diversity, a competitive edge
1.3.2.1
The Group is an image of its employees: diverse. The diversity of
talents within TOTAL is crucial to its competitiveness, innovative
capacity and attractiveness.
With over 150 nationalities represented, a workforce of which 33% is
made up of women and 26% of managers are women, a presence in
over 130 countries, and more than 500 business-related competencies,
it goes without saying that the Group is a global player. A wide range of
opinions enables innovative solutions and new opportunities to arise.
to mobilize
themselves and act
Such diversity is an essential asset for the Group. The capacity of
in an
Group employees
entrepreneurial spirit is vital. It enables ambitious projects to be
completed and offers everyone the opportunity to give meaning to
their work and grow professionally. Diversity is embodied, in
particular, by the presence of more than 20% women members on
management committees (head office and subsidiaries). This reality
testifies to the Group’s desire to strengthen diversity as a vector of
innovation and progress.
“Women and men are at the heart of our collective project. Our employees – in all corners of the planet and thanks to their individual
commitment – are the energy that drives our Group forward. This diversity is an invaluable asset that makes it possible to accomplish
ambitious projects.”
Namita Shah, President, People & Social Responsibility
Employee commitment is essential to the success of the Company project
1.3.2.2
The Group addresses its challenges thanks to the commitment of its
employees. It is for this reason that the Group strives to ensure that the
most demanding safety, ethics and integrity, management and social
performance practices are implemented wherever it operates. The aim
of this process is to create the conditions that enable everyone to fulfill
his or her potential and TOTAL to pursue its development.
TOTAL has adopted a proactive approach by subscribing to the
principles of numerous national and international agreements that fight
against all forms of discrimination and by striving to ensure the safety
and security of its employees and the respect of their fundamental
rights. The Group has a long-standing commitment to promoting equal
opportunity and diversity, which constitute, for everyone, a source of
development where only expertise and talent count.
REGISTRATION DOCUMENT 2017
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PRESENTATION OF THE GROUP – INTEGRATED REPORT
Advantages that allow the Group to stand out in a changing energy world
The Group is also committed to social dialogue, which is one of the
vectors used to modernize companies. Among the numerous
stakeholders with which TOTAL maintains regular dialogue, the
Group’s employees and their representatives have a privileged
position and role.
international organizations. This
This approach is illustrated by several commitments made by the
Group, such as its adhesion on December 21, 2017 to the Global
Deal initiative, alongside about 60 partners, states, trade unions,
companies and
international
multi-party initiative aims to fight against inequality, encourage social
dialogue and promote a fairer globalization. It states that social
dialogue, collective bargaining and trade-union freedom play an
essential role in the fulfillment of Sustainable Development Goals
(SDGs 8, 10 and 17) of the United Nations. Similarly, the signing of a
global agreement with the trade union federation IndustriALL in 2015
guarantees for the Group’s employees a high level of commitment to
social matters in countries where the Group operates. The Group had
256 active agreements (including 160 in France) with employee
representatives in place at the end of 2017.
TOTAL encourages a managerial policy that favors commitment,
accountability and the evaluation of performance; this policy is
supported by the promotion of functional and geographic mobility
and training (78% of employees within the scope of the WHRS(1) took
at least one course in 2017).
The technical and commercial know-how of employees and their
ability to manage large projects underpin the Group’s operational
excellence and are essential for the Group’s development. It is thanks
to the recognized expertise of its employees that TOTAL is able to
form partnerships of trust with the world’s main producing and
consuming nations in the most demanding areas, such as deep
offshore, liquefied natural gas (LNG), low carbon energy, refining and
petrochemicals, which are also areas in which the Group has
developed some of the most high-performance platforms. It is for this
reason
function, are
encouraged to build on their expertise and competencies by
accessing a wide range of trainings.
that all employees,
regardless of
their
In order to improve the Group’s social performance, the expectations
of employees are regularly listened to and discussed. For example,
Total Survey gathers the views and improvement suggestions of tens
of thousands of employees every two years.
This approach testifies to the Group’s desire to entrench a
continuous improvement process that benefits everyone. For more
information, refer to point 5.1 of chapter 5.
1.3.3
The strength of the Group’s integrated business model
1.3.3.1
A resilient integrated business model
Oil and gas are commodities that are traded on markets that are
known for their volatility. To manage this constraint as well as
possible, TOTAL opted for an integrated business model with
activities throughout the oil and gas value chain. It extends from
exploration and production, refining, liquefaction, petrochemicals and
trading to, finally, the distribution of products to the end customer.
This business model enables the Company to benefit from synergies
between different activities and from price volatility. It also enables the
Company to manage the bottom of the cycle better and capture
margin when the market improves. Thanks to an integrated business
model, the Group’s Upstream activities, which are more dependent
on the price of oil, can complement its Downstream activities, which
– at the bottom of the cycle – enable the Group to benefit from added
value untapped by the Upstream part of the business.
“It is thanks to the effectiveness of our integrated business model for the oil chain that we were able to withstand high oil-price volatility.
And it is the same model that we apply to gas and renewable energies, both intended for the generation of electricity.”
Patrick Pouyanné, Chairman and Chief Executive Officer
TOTAL’S
ACTIVITIES
EXPLORE AND PRODUCE
1
1
2
3
OIL AND GAS
SOLAR
BIOMASS
TRANSFORM AND DEVELOP
4
5
6
SPECIALTY CHEMICALS
POLYMERS
REFINING - PETROCHEMICALS
SHIP AND MARKET
7
8
TRADING - SHIPPING
PRODUCTS AND SERVICES
1
2
6
7
5
8
3
4
8
1
8
(1)
The Worldwide Human Resources Survey (WHRS) is an annual survey which comprises about 100 indicators in addition to those used in the Global
Workforce Analysis. Refer to point 5.4.2 of chapter 5.
12
REGISTRATION DOCUMENT 2017
PRESENTATION OF THE GROUP – INTEGRATED REPORT
Advantages that allow the Group to stand out in a changing energy world
An integrated business model to be developed on the gas-renewables-electricity chain
1.3.3.2
In the coming years, according to the IEA, the growth in demand for
electricity is expected to outstrip global demand for energy. In light of
the digitization of the economy, the mobility revolution, and
decentralized generation, many products and services are going to
be “electrified” while, at the same time, a growing share of the
world’s population will benefit from access to electricity.
To fulfill its ambition, the Group intends to apply this integrated
business model to the electricity chain, from the production of low
carbon energy to the generation of electricity.
Preference will be given to three main priorities:
(cid:142)
(cid:142)
(cid:142)
integration on the gas chain from production to liquefaction and
distribution,
the generation of electricity using gas or renewable energies and
its storage; and
the trading and the sale of gas or electricity as the producer, or not.
1
1.3.4
Geographic presence: key to the Group’s future growth
It is thanks to its pioneer spirit and sense of solidarity that TOTAL has
become a global oil and gas major and that it has forged partnerships
of trust with host countries. Remaining loyal to these principles
means being permanently open to new alliances, which are key to the
Group’s development, despite geopolitical uncertainty.
It is thanks to a strong and lasting geographic presence that the
Group will be able to meet its goal of becoming a recognized partner
in
the
the sustainable economic and social development of
communities and regions in which it operates for the creation of
shared value.
From one history to one ambition
1.3.4.1
The Group is present in over 130 countries and on 5 continents.
There are three geographic regions in particular that represent the
historical
foundations of TOTAL’s strategy and today stand out
thanks to the quality of the on-site teams and solid partnerships
forged over time.
(cid:142)
(cid:142)
(cid:142)
Europe: The core of the Group’s knowledge. Europe is home to
the Group’s decision-making center; it is the hub of its research
and innovation work and constitutes a strong industrial base;
Middle East: The Group began its production activities in this
region and is recognized in the Middle East as a partner of choice
among producing nations and their national oil companies. The
aim of the Group is to develop its activities in all business lines in
this region, even when geopolitical tension rises;
Africa: TOTAL is the largest major on the basis of the volume of
hydrocarbon production and by the number of Group-branded
service stations on the African continent(1). TOTAL generates
electricity from renewable sources. The Group intends to remain
the continent’s partner of choice and to contribute to its economic
and social development through the creation of shared value.
substantial resources, Asia, in order to benefit from this market’s high
rate of growth, and Russia, where TOTAL is working on major
industrial projects and maintains a special and long-term relationship
with local industrial players.
Managing geopolitical uncertainty
1.3.4.2
The world is confronted by political and geopolitical uncertainty
characterized by tension connected to conflict and war in countries
such as Syria, Iraq, Yemen and Libya. It is exacerbated by
international terrorism.
In this context, TOTAL intends to develop its activities by putting its
competencies to the benefit of each of the countries where it
operates, by complying with applicable laws and international
economic sanctions where imposed. The Group also ensures that the
capital
invested in the most sensitive countries remain at a level
limiting its exposure in each of them.
This is the process that TOTAL intends to pursue and has, in fact,
already been acted upon following its decision to carry on investing in
Russia while complying with the economic sanctions imposed by the
United States and Europe, and following its decision to develop
activities in Iran in the diplomatic framework set in January 2016 and
resulting from the Joint Comprehensive Plan of Action (JCPOA). The
Group, if needed, stops its activities in countries that become too
risky (such as Yemen and Syria).
Loyalty to its partners, particularly during such kind of situations, is
also a strong characteristic of the Group.
TOTAL’s activities wherever they are, are carried out in strict adherence
to applicable laws and covered by compliance and risk management
procedures. It was within this framework that a full-time compliance
coordinator for Iran was appointed within the Group in 2016,
for
example.
Today, new regions which are vital for the Group have appeared,
particularly the Americas, which represent a strong growth opportunity
for all of the Group’s businesses due, in particular, to this region’s
By continuing to invest and to supply energy, the Group helps to
maintain conditions that favor the economic development of these
regions.
“During these troubled times, our industry can and must be a stabilizing factor.”
Patrick Pouyanné, Chairman and Chief Executive Officer
For more information on risk factors, internal control and risk management procedures and reasonable vigilance measures implemented by the
Group, refer to points 3.1, 3.3 and 3.5 of chapter 3.
(1)
Source: Public data. IHS.
REGISTRATION DOCUMENT 2017
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PRESENTATION OF THE GROUP – INTEGRATED REPORT
Advantages that allow the Group to stand out in a changing energy world
1.3.4.3
A local socio-economic development
partner
integrity, respect
Safety,
for human rights, and societal and
environmental responsibility are principles and values that form part of
the Group’s operating processes. If TOTAL has been able to build
and develop partnerships throughout the world, it is also because it
has incorporated a local value creation process into its development
model. This process is systematic, professional and a major
competitive advantage.
face of growing
taking general-interest measures in the countries where it operates. In
the
inequality and significant environmental
challenges, the Group wishes to bolster its civic engagement and
implement a new societal engagement policy as from 2018. It wishes
to act in a way that ensures the vitality and sustainability of the
territories in which the Group is present by putting actions that benefit
young people first.
In order to boost the impact of its societal initiatives, TOTAL has
selected four areas of intervention that it considers to be vital for the
territories’ sustainable development:
Based on dialogue with the local population and public and private
players, this process is used to identify development priorities and
create synergies. The Group intends to apply this approach over the
long term to ensure that its major projects create shared wealth.
In addition to the societal initiatives that are directly related to the
Group’s industrial activities, TOTAL has also been committed to
(cid:142)
(cid:142)
(cid:142)
(cid:142)
forests and climate, for a beneficial environment for humans;
integration and qualification of young people, for the autonomy of
young people in socially vulnerable situations;
road safety, for safer mobility; and
culture and heritage, for dialogue between cultures.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
14
REGISTRATION DOCUMENT 2017
PRESENTATION OF THE GROUP – INTEGRATED REPORT
Strong commitments that benefit sustainable growth
1.5
Strong commitments that benefit
sustainable growth
1
1.5.1
Committed R&D
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
$912 million invested in 2017
4,132 employees dedicated to R&D in 2017
18 R&D centers around the world
1,000 partnership agreements
over 200 patent applications filed in 2017
The Group relies on a dynamic R&D policy to conduct and develop its
activities. There are two main priorities:
(cid:142)
(cid:142)
developing activities and programs with a direct impact on
TOTAL’s aim to become the responsible energy major;
technological breakthroughs
anticipating
to seize
opportunities for development relating to the evolution of the
energy mix.
in order
The Group is committed to optimizing R&D resources in terms of
human talent, infrastructure and regional centers of excellence, and
to working with selected partners that bring specific, high-level skills
to every project.
The portfolio of R&D programs is divided between transverse
programs developed at all of the R&D centers and vertical programs
specific to the different businesses. For example, the purpose of the
CCUS (carbon capture, usage and storage) transverse program,
which shall account for 10% of innovation and R&D efforts for the
Group’s oil and gas activities(1) in the short term, is to enable the
Group to become a major player in this area and throughout the
value chain so that it may contribute to the reduction in global CO2
emissions and to prepare the Group for new business opportunities.
For more information, refer to point 2.6 of chapter 2.
1.5.2
A targeted investment policy
(cid:142)
(cid:142)
(cid:142)
$14.4 billion of organic investments in 2017
$1.5 billion of targeted acquisitions in 2017, including
$714 million of resource acquisitions
Finalization in 2017 of a $10 billion disposals of assets’
program for the period, 2015-2017
Since the fall in the price of oil in 2014, the Group has continued to
select its investments very carefully and in accordance with its
strategy. These investments are dedicated to:
(cid:142)
the development of new upstream and downstream installations in
order to benefit from a favorable cost environment;
(cid:142)
(cid:142)
(cid:142)
the adding of attractive resources to the portfolio through the
exploration or acquisition of resources that have already been
discovered, thereby capitalizing on favorable market conditions;
the dynamic growth of its low carbon activities in the gas and
renewable energy sectors; and
the growth of its Marketing & Services business in buoyant
markets.
The Group also strives to continuously improve its portfolio by selling
its least strategic assets.
For more information, refer to point 2.5 of chapter 2.
1.5.3
A continuous improvement dynamic
In 2016, TOTAL committed itself to contributing to the success of the
Sustainable Development Goals (SDG) adopted by the United
Nations. To this end, the Group started by identifying the goals to
which it already contributes by pursuing its own improvement targets.
In 2017, the Group launched an action plan to prioritize its actions in
accordance with the SDGs which are the most significant in relation
to its activities and to update its public commitments in 2018. TOTAL
considers the SDGs to be an opportunity to better measure and
value its contribution to society as a whole. The Group manages its
activities and assesses
three sustainable
development pillars: financial results (Profit), the creation of value for
stakeholders (People) and the preservation of ecosystems (Planet).
its performance on
1.5.3.1
Commitments and indicators of
progress
Safety, health, climate,
the environment and even shared
development: in every country where the Group is present, TOTAL
manages its operations with the aim of working in a sustainable,
active and positive manner. The Group was one of the first in the
industry to publish measurable improvement targets in these areas.
(1)
Excluding R&D budgets of Hutchinson, SunPower and Saft Groupe.
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PRESENTATION OF THE GROUP – INTEGRATED REPORT
Strong commitments that benefit sustainable growth
SAFETY - HEALTH
For TOTAL, being committed to better energy means, first of all, guaranteeing the safety of its
employees and stakeholders, its installations and products. It also implies protecting the health of
all those connected to, whether directly or indirectly, its activities.
GOALS
COMMITMENT
To be recognized as a reference in the area of safety within its
industry and to achieve a zero fatal accident rate
To preserve the health of employees, customers and communities
in the vicinity of the Group’s activities.
CURRENTLY
CURRENTLY
66% fall in the accident rate TRIR(a) between 2010 and 2017.
98%of employees benefited from regular medical monitoring
in 2017( b ).
CLIMATE
The challenges posed by climate change stand at the heart of TOTAL’s strategic vision. The goal: to help keep global
warming below 2°C by 2100. Thanks to three levers: improving the carbon intensity of the production mix, developing
low-carbon businesses including renewable energies, and improving energy efficiency.
AMBITION
AMBITION
Ensure gas makes up more than 60% of the Group’s hydrocarbon
mix by 2035.
Low carbon activities (c) are expected to make up almost 20% of
the Group’s portfolio within the next 20 years.
GOALS
An 80% reduction in routine flaring between 2010 and 2020
with the aim of eliminating routine flaring by 2030.
An average annual 1% improvement in the energy efficiency of operated
installations between 2010 and 2020.
GOALS
To promote the responsible use of energy among Group customers
by providing them with solutions (products and services).
CURRENTLY
CURRENTLY
30% reduction in greenhouse gas emissions between 2010
and 2017.
Methane emissions constituted less than 0.5% of the Group’s
marketed and operated gas production in 2017.
End of coal activity since 2016.
87% reduction in routine flaring between 2010 and 2017.
Almost 14% improvement in the energy efficiency of Group
installations between 2010 and 2017.
500MW installed photovoltaic capacity held by the Group.
Almost 100 products that bear the TOTAL Ecosolutions label.
Energy services offered through the subsidiaries,
BHC Energy, Tenag and Greenflex.
Growth in renewable energies, SunPower, Total Solar, Total
Eren. Development of energy storage solutions, Saft Groupe.
Development of gas and electricity marketing activities, Lampiris,
Total Spring.
( a ) TRIR (Total Recordable Injury Rate): number of recorded injuries per million hours worked.
( b ) WHRS data.
( c ) Downstream gas, renewable energies, energy storage, energy efficiency, cleaner fuels and carbon capture, usage and storage techniques.
24
REGISTRATION DOCUMENT 2017
PRESENTATION OF THE GROUP – INTEGRATED REPORT
Strong commitments that benefit sustainable growth
ENVIRONNEMENT
The Group upholds the highest environmental standards.
Aim: to improve the environmental performance of its installations and products.
1
GOALS
To reduce SO2 ( a ) emissions by 50% between 2010 and 2020.
CURRENTLY
Over 50% reduction in SO2 emissions since 2016.
GOALS
To maintain hydrocarbon content of water discharges below
30 mg/l for offshore sites and at
15 mg/l for onshore and coastal sites by 2020.
CURRENTLY
100% of the Group’s oil sites had reached this performance
target by 2016.
COMMITMENTS
COMMITMENTS
The Group reclaims more than half of its waste and continues its
efforts in this area.
CURRENTLY
52% of waste reclaimed in 2017.
SHARED DEVELOPMENT
Shared development depends on an active and positive
contribution at a local level.
TOTAL does not conduct oil and gas exploration or production
operations at natural sites included on the UNESCO World Heritage
List( b ) or in oil fields under sea ice in the Arctic.
The Group systematically develops biodiversity action plans for
production sites located in protected areas( c ).
DIVERSITY / GENDER DIVERSITY
T h e G r o u p
promotes equal
treatment for
men and women through a global policy of gender diversity. In
terms of compensation, specific measures have been in place
since 2010 to prevent and correct unjustified salary gaps.
GOALS
GOALS
To reach 25 M people in Africa by 2020 thanks to decentralized
energy solutions.
CURRENTLY
In 2017, €243 M was spent on societal projects around the
world.
By the end of 2017, the Group’s decentralized solar-power offer had
enabled almost 10 M people to benefit from access to electricity.
( a ) SO2: sulfur dioxide, produced during the burning of fossil fuel.
( b ) Natural sites included on the UNESCO World Heritage List of June 4, 2013.
( c ) Sites located in IUCN I to IV or Ramsar convention protected areas.
The Group’s target for 2020 is
25% of women senior executives
40% non-French nationals executives
more than 20% of women in management committees
(head office and subsidiaries).
CURRENTLY IN 2017
21% of women senior executives.
29% of non-French nationals executives.
21% of women in Management Committees
(head office and subsidiaries).
REGISTRATION DOCUMENT 2017
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PRESENTATION OF THE GROUP – INTEGRATED REPORT
A revamped organizational structure to supportrr the Group’s ambition
1.5.3.2
Support for global initiatives
Aside from complying with national regulations in force wherever the
Group operates, TOTAL has renewed its support for the United
Nations Global Compact every year since 2002. In addition, the
Group committed itself to respecting the UN Guiding Principles on
business and human rights following their adoption in 2011.
The challenges posed by the Sustainable Development Scenario
(2°C) of the IEA demands a collective effort. The Group has played an
active role in various international initiatives that involve the private
and the public sectors to bring about:
(cid:142)
(cid:142)
(cid:142)
carbon pricing (the World Bank’s Carbon Pricing Leadership
Coalition, Caring for Climate – United Nations Global Compact,
Paying for Carbon call: TOTAL and five other industry leaders);
the end of routine flaring of associated gas (the World Bank’s Zero
Routine Flaring by 2030 initiative);
control over methane emissions (Oil & Gas Methane Partnership of
the Climate and Clean Air Coalition, the Oil & Gas Climate Initiative
in cooperation with UN Environment and EDF, etc.); and
(cid:142)
greater transparency: recommendations from the G20 Financial
Stability Board Task Force on Climate-related Financial Disclosures
(TCFD).
TOTAL also actively supports collaborative and multi-stakeholder
initiatives
involvement of
governments, companies and civil society is key to global progress,
particularly:
the coordinated
in which
in areas
(cid:142)
(cid:142)
(cid:142)
(cid:142)
financial transparency: the Group has adhered to the Extractive
Industries Transparency Initiative (EITI) since its launch in 2002;
the fight against corruption: TOTAL joined the Partnering Against
Corruption Initiative (PACI) in 2016;
the provision of security and respect for human rights by
implementing the Voluntary Principles on Security and Human
Rights (VPSHR) since 2012; and
the reduction of inequalities through the development of social
dialogue to favor more inclusive economic growth: TOTAL was one
of the first French companies to adhere to the Global Deal initiative
at the end of 2017.
1.6
A revamped organizational structure to support
the Group’s ambition
1.6.1
TOTAL S.A., parent company of the Group and its subsidiaries
TOTAL S.A. is the Group’s parent company. It acts as a holding
company and drives the Group’s strategy.
The Group’s operations are conducted through subsidiaries that are
directly or indirectly owned by TOTAL S.A. and through stakes in joint
ventures which are not necessarily controlled by TOTAL. TOTAL S.A.
has two secondary establishments in France, located in Lacq and
Pau. It also has branch offices as in the United Arab Emirates and in
Oman.
Consolidated Financial Statements and the list of companies included in
the scope of consolidation can be found in Note 18 to the Consolidated
Financial Statements (refer to point 8.7 of chapter 8).
The situation of the direct subsidiaries and shareholdings of TOTAL
S.A., and in particular those with a gross value exceeding 1% of the
Company’s share capital, is shown in the table of subsidiaries and
affiliates in point 10.4.1 of chapter 10.
Corporate name: TOTAL S.A.
Head office: 2, place Jean Millier, La Défense 6, 92400
Courbevoie, France
Registered in the French trade registry in Nanterre under
no. 542 051 180 RCS
LEI (Legal Entity Identifier): 529900S21EQ1BO4ESM68
EC Registration Number: FR 59 542 051 180
Term of the Company: extended for 99 years from March 22,
2000
Fiscal year: from January 1 to December 31 of each year
APE Code (NAF): 7010Z
The scope of consolidation of TOTAL S.A. as of December 31, 2017
consisted of 972 companies,
fully consolidated
companies and 105 companies accounted for under the equity
method. The principles of consolidation are described in Note 1.1 to the
including 867
instruments
Interests in listed companies
TOTAL holds stakes in a limited number of companies that issue
financial
financial
instruments are listed in France or abroad. These companies are
mainly the Group’s financing vehicles (Total Capital, Total Capital
International, Total Capital Canada Ltd) or the operational subsidiaries
in its business segments, in particular in Africa, such as Total
Gabon(1).
in France or abroad or whose
TOTAL also holds a majority stake in SunPower (56.26% on
December 31, 2017), an American company listed on Nasdaq, and
minority interests in other companies, including PAO Novatek (18.9%
on December 31, 2017), a Russian company listed on the Moscow
Interbank Currency Exchange and the London Stock Exchange.
in Note 2 of
The changes to the composition of the Group during the fiscal year of
the Consolidated Financial
2017 are explained
Statements (refer to point 8.7 of chapter 8). In 2017, TOTAL S.A., the
Group’s parent company, did not acquire any 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.
(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%).
26
REGISTRATION DOCUMENT 2017
PRESENTATION OF THE GROUP – INTEGRATED REPORT
A revamped organizational structure to supportrr the Group’s ambition
1.6.2
A revamped operational structure
On an operational level, the Group’s businesses are organized in
business segments, which receive assistance from the corporate
functional divisions.
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 segment, which joined the existing Exploration & Production,
Refining & Chemicals and Marketing & Services segments.
(cid:142)
(cid:142)
(cid:142)
the Exploration & Production segment encompasses the Group’s
exploration and production activities in more than 50 countries.
The Group produces oil and gas in approximately 30 countries;
the Gas, Renewables & Power segment spearheads the Group’s
ambitions in low carbon energies. It comprises gas activities that
are conducted downstream of the production process and
concern natural gas, liquefied natural gas (LNG) and liquefied
petroleum gas (LPG), as well as power generation and gas trading.
It also develops the Group’s renewable energy activities (excluding
biotechnologies) and energy efficiency activities through a new and
dedicated Innovation & Energy Efficiency division;
the Refining & Chemicals segment is a large industrial segment
that encompasses refining and petrochemical activities and
Hutchinson’s operations. It also includes oil Trading & Shipping
activities;
1
(cid:142)
the Marketing & Services segment includes worldwide supply and
marketing activities in the oil products and services field.
In order to improve efficiency, reduce costs and create value within
the Group, a specific branch, TOTAL Global Services (TGS), pools
the various segments’ support services (Accounting, Purchasing,
Information Systems, Training, Human Resources Administration and
Facilities Management). The entities that make up TGS operate as
service companies for internal clients across the business segments
and Holding.
Finally, the various Corporate entities are regrouped in two divisions:
(cid:142)
(cid:142)
the People & Social Responsibility division consists of: the Human
Resources division, 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 Civil Society Engagement division;
the Strategy-Innovation division is made of: the Strategy & Climate
division, responsible notably for ensuring that TOTAL’s strategy
incorporates climate issues, the Public Affairs division, the Audit &
Internal Control division, the Research & Development division
(which coordinates all of the Group’s R&D activities and notably
transversal programs), and the Digital division.
REGISTRATION DOCUMENT 2017
27
1
PRESENTATION OF THE GROUP – INTEGRATED REPORT
A revamped organizational structure to supportrr the Group’s ambition
Secretary of
the Board
Ethics
Committee
Adviser
Organization chart as of December 31, 2017
CHAIRMAN & CEO
Adviser to the
Chairman & CEO
Strategy-Innovation
EXECUTIVE COMMITEE
Finance
People & Social
Responsibility
Corporate
Communications
Legal Affairs
Strategy
& Climate
Public Affairs
Finance
Division
Risk Assessment
and Insurance
Human
Resources
Civil Society
Engagement
Audit
& Internal
Control
Chief
Technology
Officer
Technology
Experts
Chief Digital
Officer
Information
Technology
HSE
Security
Total Global
Services
Exploration
& Production
Gas, Renewables
& Power
Refining & Chemicals
Trading & Shipping
Marketing
& Services
Africa
Corporate
Affairs
Gas
Renewables
Refining Base
Chem Europe
Manufacturing
& Projects
Division
Crude Oil
Trading
Products
Trading
Distillates,
Marketing and
Derivatives
Middle East
North Africa
Exploration
Innovation
& Energy
Efficiency
Strategy &
Corporate
Affairs
Refining
Petrochemicals
Middle East
Strategy
Development
Research
Strategy
& Development
Products Trading
Lights, Fuel-oil
and Africa
Europe
Africa
Strategy
Marketing
Research
Corporate
Affairs
and Americas
Americas
Development
and Support
to Operations
Strategy-
Business
Development-
R&D
Asia-Pacific
North Sea
and Russia
Refining
Petrochemicals
Americas
Corporate
Affairs
Shipping
Asia-Pacific/
Middle East
Human
Resources
Polymers
Human
Resources
Communications
Lubricants
and Specialties
Hutchinson
EXPLORATION & PRODUCTION
SEGMENT
GAS,RENEWABLES &
POWER SEGMENT
REFINING & CHEMICALS SEGMENT
MARKETING & SERVICES
SEGMENT
UPSTREAM
DOWNSTREAM
28
REGISTRATION DOCUMENT 2017
2
BUSINESS OVERVIEW
FOR FISCAL YEAR 2017
2.1
Exploration & Production segment
2.1.1
Presentation of the segment
2.1.2
Exploration and development
2.1.3
Reserves
2.1.4
Production
2.1.5
Delivery commitments
2.1.6
Contractual framework of activities
2.1.7
Production by geographical zone
2.1.8
Producing assets by geographical zone
2.1.9
Activities by geographical zone
2.1.10
Oil and gas acreage
2.1.11
Number of productive wells
2.1.12
Net productive and dry wells drilled
2.1.13
Wells in the process of being drilled
(including wells temporarily suspended)
2.1.14
Interests in pipelines
2.2
Gas, Renewables & Power segment
2.2.1
Downstream gas and power
2.2.2
Renewable energies and energy storage
2.2.3
Innovation and energy efficiency
30
32
32
32
33
34
34
35
37
39
46
46
47
47
48
49
50
52
54
2.3
Refining & Chemicals segment
2.3.1
Refining & Chemicals
2.3.2
Trading & Shipping
2.4
Marketing & Services segment
2.4.1
Presentation of the segment
2.4.2
Sales of petroleum products
2.4.3
Service stations
2.4.4
Activities by geographical area
2.4.5
Products and services developments
2.5
Investments
2.5.1
Major investments over the
2015-2017 period
2.5.2
Major planned investments
2.6
Research & Development
2.6.1
Transverse programs
2.6.2
Vertical programs
2.7
Property, plant and equipment
55
56
60
62
63
64
64
64
66
68
68
69
70
70
71
72
REGISTRATION DOCUMENT 2017
29
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production segment
2.1
Exploration & Production segment
The Exploration & Production (E&P) segment encompasses the Group’s oil and gas exploration and production activities in more than
50 countries.
2.57 Mboe/d
hydrocarbons
produced in 2017
11.5 Bboe
of proved hydrocarbon
reserves as of
December 31, 2017(1)
$11.3 billion
of organic investments(2)
in 2017
13,023
employees
present
2015 and 2016 data have been restated in line with the new Group organization fully effective since January 1, 2017 (refer to point 1.6.2 of
chapter 1). (1) (2)
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
Price realizations(a)
Average liquids price ($/b)
Average gas price ($/Mbtu)
(a)
Consolidated subsidiaries, excluding fixed margins.
2017
50.2
4.08
2016
40.3
3.56
2015
47.4
4.75
(1)
(2)
Based on a Brent crude price of $54.36/b (reference price in 2017), according to rules established by the Securities and Exchange Commission
(refer to point 2.1.3 of this chapter).
Organic investments = net investments, excluding acquisitions, divestments and other operations with non-controlling interests (refer to point 2.5.1
of this chapter).
[Redacted section: certain text has been redacted.]
30
REGISTRATION DOCUMENT 2017
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production segment
2017
2,566
1,346
6,662
2016
2,452
1,271
6,447
2015
2,347
1,237
6,054
2
Europe and
Central Asia
761 kboe/d
Africa(a)
654 kboe/d
For the full-year 2017, hydrocarbon production was 2,566 kboe/d, an
increase of more than 5% compared to 2016, due to the following:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
+5% due to new start-ups and ramp-ups, notably Moho Nord,
Kashagan, Edradour and Glenlivet, and Angola LNG;
+2% portfolio effect, mainly due to taking over the giant
Al Shaheen oil field concession in Qatar and acquiring an
additional 75% interest in the Barnett shale in the United States,
partially offset by the exit from the southern sector of the Republic
of the Congo and asset sales in Norway;
+1% related to improved security conditions in Libya and Nigeria;
-3% due to natural field decline, the PSC price effect and OPEC
quotas.
2017
11,475
5,450
32,506
2016
11,518
5,414
32,984
2015
11,580
5,605
32,206
Proved reserves based on SEC rules (Brent at $54.36/b) were 11,475
Mboe at December 31, 2017. The proved reserve replacement rate(1),
based on SEC rules (Brent at $54.36/b in 2017), was 95% in 2017
and 98% over three years.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
Europe and
Central Asia
4,140 Mboe
Africa(a)
1,742 Mboe
Production
Hydrocarbon production
Combined production (kboe/d)
Liquids (kb/d)
Gas (Mcf/d)
Middle East
and North Africa
559 kboe/d
Asia-Pacific
244 kboe/d
Americas
348 kboe/d
Reste
du monde
700 kb/j
(a)
Excluding North Africa.
Proved reserves
As of December 31,
Hydrocarbon reserves (Mboe)
Liquids (Mb)
Gas (Bcf)
Americas
1,963 Mboe
Middle East
and North Africa
2,687 Mboe
Asia-Pacific
943 Mboe
(a)
Excluding North Africa.
(1)
Change in reserves excluding production: (revisions + discoveries, extensions + acquisitions – divestments)/production for the period.
[Redacted section: certain text has been redacted.]
REGISTRATION DOCUMENT 2017
31
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production segment
2.1.1
Presentation of the segment
Exploration & Production (E&P)’s mission is to discover and develop
oil and gas fields in order to meet a 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.
The deployment of the strategy is based on three main levers:
(cid:142)
(cid:142)
(cid:142)
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.
2.1.2
Exploration and development
TOTAL evaluates exploration opportunities based on a variety of
geological,
tax and
contractual terms) environmental and societal factors.
technical, political, economic
(including
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:
(cid:142)
(cid:142)
(cid:142)
50% for core and emerging basins, where the presence of
hydrocarbons is already proven;
25% for exploration in mature hydrocarbon plays; and
25% for high-potential frontier basins.
2.1.3
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
field
account, among other
levels of production,
factors,
E&P plans to start 14 new major projects in 2017 and 2018, including
the start-up of five major projects in 2017. Additionally, thanks to a
significant decrease of its capital investments, which peaked in 2013,
E&P restored some flexibility to take acquisition opportunities (such
as the acquisition of assets in Brazil in January 2018 and the
acquisition of Mærsk Olie og Gas A/S, "Mærsk Oil" in March 2018)
and to launch new projects, taking advantage of the lower costs in
the current environment. More than 10 projects are planned to be
launched between 2017 and 2018. These actions are expected to
lead to a 5% yearly average production increase between 2016 and
2022.
Finally, E&P includes climate change issues in its strategy by taking
the Sustainable Development Scenario (2°C) of the IAE as a reference
and by aiming to decrease the carbon intensity of its energetic mix.
The segment therefore is focusing its oil investments on low
break-even projects, developing the production of gas, integrating a
CO2 price in its investment decisions and developing expertise in
technologies for carbon capture, use and storage.
In 2017, exploration expenditure from all E&P subsidiaries was
$1.2 billion, mainly in the United States, Brazil, the United Kingdom,
Nigeria, Myanmar, Papua New Guinea, Cyprus, Bulgaria, Côte
d’Ivoire, Egypt and Norway, compared to $1.4 billion in 2016 and
$1.9 billion in 2015. The 2018 exploration-appraisal budget is
$1.2 billion.
Organic investments (1) from all E&P subsidiaries were $11.3 billion (2)
in 2017, compared to $14.5 billion (2) in 2016 and $20.5 billion in
2015, and were mainly in Australia, Angola, Canada, Norway, the
Republic of Congo, Nigeria, the United States, Abu Dhabi, the United
Kingdom, Brazil and Iraq.
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.
(1)
(2)
For Exploration & Production, organic investments include exploration investments, net development investments and net financial investments.
Excluding the Group’s Gas activities.
32
REGISTRATION DOCUMENT 2017
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production segment
shorter producing life of certain producing fields and from partial
debooking of proved undeveloped reserves due to economic
reasons, partially offset by reserves increase on fields with producing
sharing or risked service contracts.
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) compared to 11,580 Mboe (53% of which were proved
developed reserves) as of December 31, 2015. Liquids (crude oil,
condensates, natural gas liquids and bitumen) at year-end 2016
represented approximately 47% of these reserves and natural gas the
remaining 53% and, at year-end 2015, approximately 48% of these
reserves and natural gas the remaining 52%.
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, 2017). 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 and vice versa. 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.
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 and vice
versa.
The reserves booking process requires, among other things:
(cid:142)
(cid:142)
that internal peer review of technical evaluations is 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, refer to points 9.1 and 9.2 of chapter 9.
Proved reserves for 2017, 2016 and 2015
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 2017, 2016 and 2015 were, respectively,
$54.36/b, $42.82/b and $54.17/b.
As of December 31, 2017, TOTAL’s combined proved reserves of oil
and gas were 11,475 Mboe (61% 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 and Central
Asia (mainly in Kazakhstan, Norway, The United Kingdom and
Russia), Africa (mainly in Angola, Nigeria and the Republic of Congo),
the Americas (mainly in Argentina, Canada, the United States and
Venezuela), the Middle East and North Africa (mainly in Qatar, the
United Arab Emirates and Yemen), and Asia-Pacific (mainly in
Australia).
Discoveries of new fields and extensions of existing fields added
1,708 Mboe to TOTAL’s proved reserves during the 3-year period
ended December 31, 2017 (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 +984 Mboe, which was mainly due to the overall
positive revisions in field behaviors and to the net impact of the
changes in hydrocarbon prices in 2015 (decrease), 2016 (decrease)
and 2017 (increase) that led to a reserves decrease resulting from
2.1.4
Production
The average daily production of liquids and natural gas was
2,566 kboe/d in 2017 compared to 2,452 kboe/d in 2016 and
2,347 kboe/d in 2015. Liquids represented approximately 52% and
natural gas approximately 48% of TOTAL’s overall production in
2017.
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. For further information, refer to the table
on producing assets by geographical zone in point 2.1.8 of this
chapter.
As in 2016 and 2015, substantially all of the liquids production from
TOTAL’s E&P segment in 2017 was marketed by the Trading &
Shipping division of TOTAL’s Refining & Chemicals segment (refer to
table regarding Trading’s crude oil sales and supply and petroleum
products sales in point 2.3.2.1 of this chapter).
REGISTRATION DOCUMENT 2017
33
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production segment
2.1.5
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, such as in Bolivia, 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 2018-2020 to be 4,927 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 9.1 and 9.2 of chapter 9).
2.1.6
Contractual framework of activities
Licenses, permits and contracts governing the Group entities’
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.
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 or determinable 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.
34
REGISTRATION DOCUMENT 2017
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production segment
2.1.7
Production by geographical zone
The following table sets forth the Group’s annual liquids and natural gas production by geographical zone, according to the internal business
units of E&P in 2017.
2017
Natural
gas
Bcf(b)
976
2016
Natural
gas
Bcf(b)
Liquids
Mb(a)
91
1,002
2015
Natural
gas
Bcf(b)
Liquids
Mb(a)
80
881
Total
Mboe
277
Total
Mboe
278
Total
Mboe
243
2
Europe and Central Asia
Azerbaijan
France
Italy
Kazakhstan
Norway
Netherlands
United Kingdom
Russia
Africa (excl. North Africa)
Angola
Republic of the Congo
Gabon
Nigeria
Middle East and North Africa
Algeria
United Arab Emirates
Iraq
Libya
Oman
Qatar
Yemen
Americas
Argentina
Bolivia
Brazil
Canada
Colombia
United States
Venezuela
Asia-Pacific
Australia
Brunei
China
Indonesia
Myanmar
Thailand
Liquids
Mb(a)
98
-
-
-
11
46
-
15
26
183
73
36
19
55
153
1
102
6
11
9
24
-
48
2
2
<1
22
<1
11
11
10
-
1
<1
6
-
3
-
-
-
19
234
41
201
481
277
47
12
5
213
282
21
24
-
-
23
214
-
442
141
79
-
-
-
192
30
455
41
32
29
190
55
108
TOTAL PRODUCTION
INCLUDING SHARE OF EQUITY
AFFILIATES
Angola
United Arab Emirates
Oman
Qatar
Russia
Venezuela
Yemen
492
2,432
103
2
42
8
16
24
11
-
700
29
19
23
144
483
2
-
-
-
-
15
88
7
52
116
239
83
38
20
98
204
5
107
6
11
13
62
-
127
27
17
<1
22
<1
45
16
89
7
8
5
41
7
21
937
232
7
46
13
42
112
12
-
-
-
-
1
44
-
18
28
186
84
31
20
51
137
2
102
6
5
10
11
-
40
3
1
-
12
-
11
12
11
-
1
-
7
-
3
-
-
-
2
226
52
218
504
227
25
11
5
186
291
33
25
<1
-
23
210
-
346
143
59
-
-
-
111
33
494
33
29
19
240
60
112
465
2,360
91
-
42
9
3
25
12
-
694
7
19
23
139
503
3
-
-
-
-
1
86
9
58
123
232
89
33
21
89
189
8
107
7
5
14
49
-
102
29
12
-
12
-
31
17
97
6
7
4
51
8
22
897
220
2
45
13
28
120
12
-
-
-
-
-
47
-
13
20
190
86
30
20
54
136
3
100
7
5
8
12
1
35
3
1
-
5
-
13
13
12
-
1
-
8
-
3
-
-
-
-
224
58
142
457
212
18
11
5
178
318
35
24
-
-
21
209
29
327
129
49
-
-
-
112
37
471
10
23
22
247
56
113
453
2,209
81
-
39
8
3
17
14
-
667
-
18
21
140
456
3
29
-
-
-
-
88
10
39
106
233
90
32
22
89
193
9
105
7
5
12
49
6
93
26
10
-
5
-
33
19
94
1
5
4
54
7
23
856
204
-
43
12
28
102
14
5
(a)
(b)
Liquids consist of crude oil, bitumen, condensates and natural gas liquids (NGL). The Group’s production in Canada consists of bitumen only, and all of the Group’s bitumen
production is in Canada. 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 2015, 2016 and 2017.
Including fuel gas (173 Bcf in 2017, 163 Bcf in 2016, 159 Bcf in 2015).
REGISTRATION DOCUMENT 2017
35
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production segment
The following table sets forth the Group’s average daily liquids and natural gas production by geographical zone, according to the internal
business units of E&P in 2017.
2017
Natural
gas
Mcf/d(b)
Liquids
kb/d(a)
2016
Natural
gas
Mcf/d(b)
2015
Natural
gas
Mcf/d(b)
Total
kboe/d
Total
kboe/d
Liquids
kb/d(a)
Total
kboe/d
Liquids
kb/d(a)
Europe and Central Asia
265
2,674
761
249
2,737
757
215
2,413
664
Azerbaijan
France
Italy
Kazakhstan
Norway
Netherlands
United Kingdom
Russia
Africa (excl. North Africa)
Angola
Republic of the Congo
Gabon
Nigeria
Middle East and North Africa
Algeria
United Arab Emirates
Iraq
Libya
Oman
Qatar
Yemen
Americas
Argentina
Bolivia
Brazil
Canada
Colombia
United States
Venezuela
Asia-Pacific
Australia
Brunei
China
Indonesia
Myanmar
Thailand
-
-
-
31
121
-
42
71
502
204
98
51
149
419
4
278
15
31
25
66
-
-
-
-
53
640
112
551
1,318
759
130
32
14
583
771
58
63
1
-
64
585
-
132
1,212
6
5
<1
59
<1
31
31
28
-
3
<1
16
-
9
388
216
-
-
-
527
81
1,247
114
87
80
519
151
296
-
-
-
42
239
20
142
318
654
229
104
54
267
559
15
290
16
31
37
170
-
348
76
46
<1
59
<1
123
44
244
19
21
15
112
19
58
-
-
-
3
121
-
49
76
509
230
84
55
140
373
6
279
17
14
26
31
-
109
8
4
-
34
-
31
32
31
-
3
-
19
-
9
-
-
-
6
618
141
595
1,377
621
68
29
15
509
795
90
67
1
-
62
575
-
944
391
160
-
-
-
304
89
1,350
91
78
53
657
165
306
-
-
-
4
235
25
158
335
634
243
90
58
243
517
23
291
18
14
37
134
-
279
78
34
-
34
-
86
47
265
16
18
10
140
21
60
-
-
-
-
125
1
35
54
521
238
81
55
147
372
7
274
18
14
25
32
2
95
8
3
14
34
36
34
-
3
-
22
-
9
-
-
-
-
614
158
389
1,252
581
49
30
15
487
874
96
66
1
-
58
573
80
896
354
133
-
308
101
1,290
28
62
59
676
153
312
-
-
-
-
239
28
107
290
639
248
87
59
245
531
25
287
18
14
36
134
17
255
72
28
14
89
52
258
4
15
11
147
19
62
TOTAL PRODUCTION
1,346
6,663
2,566
1,271
6,447
2,452
1,237
6,054
2,347
INCLUDING SHARE OF EQUITY
AFFILIATES
Angola
United Arab Emirates
Oman
Qatar
Russia
Venezuela
Yemen
284
5
115
23
43
67
31
-
1,914
80
53
64
395
1,317
5
-
639
20
125
35
114
313
32
-
247
1
114
24
7
69
32
-
1,894
20
51
62
379
1,375
7
-
600
5
123
36
76
327
33
-
219
-
107
24
7
45
36
-
1,828
-
50
58
383
1,250
7
80
559
-
116
34
77
280
37
15
(a)
(b)
Liquids consist of crude oil, bitumen, condensates and natural gas liquids (NGL). 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 2015, 2016 and 2017.
Including fuel gas (473 Mcf/d in 2017, 448 Mcf/d in 2016, 435 Mcf/d in 2015).
36
REGISTRATION DOCUMENT 2017
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production segment
2.1.8
Producing assets by geographical zone
The table below sets forth, as of December 31, 2017(a) and by geographical zone according to the internal business units of E&P in 2017,
TOTAL’s producing assets, the year in which TOTAL’s activities started, the Group’s interest in each asset (Group share in %) and whether
TOTAL is operator of the asset.
2
Europe and Central Asia
Kazakhstan (1992)
Norway (1965)
Non-operated: Kashagan (16.81%)
Operated: Atla (40.00%), Skirne (40.00%)
Netherlands (1964)
United Kingdom (1962)
Russia (1991)
Africa (excl. North Africa)
Angola (1953)
Gabon (1928)
Nigeria (1962)
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%)
Operated: F6a oil (65.68%), J3a (30.00%), K1a (40.10%), K3b (56.16%), K4a (50.00%),
K4b/K5a (36.31%), K5b (50.00%), K6 (56.16%), L1a (60.00%), L1d (60.00%), L1e (55.66%),
L1f (55.66%), L4a (55.66%)
Non-operated: E16a (16.92%), E17a/E17b (14.10%), J3b/J6 (25.00%), K9ab-A (22.46%),
Q16a (6.49%)
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%), Edradour and Glenlivet
(60.00%)
Non-operated: Bruce (43.25%), Markham unitized field (7.35%), Keith (25.00%)
Non-operated: Kharyaga (20.00%), Termokarstovoye (49.00%)(c), Yamal LNG (20.00%)(d), several
fields through the participation in PAO Novatek (18.90%)
Operated: Girassol, Dalia, Pazflor, CLOV (Block 17) (40.00%)
Non-operated: Cabinda Block 0 (10.00%), Kuito, BBLT, Tombua-Landana (Block 14) (20.00%)(e),
Lianzi (Block 14K) (10.00%)(e), Angola LNG (13.60%)
Operated: Anguille Marine (100.00%), Anguille Nord Est (100.00%), Baliste (100.00%),
Baudroie Marine (100.00%), Baudroie Nord Marine (100.00%), Grand Anguille Marine (100.00%),
Lopez Nord (100.00%), Mérou Sardine Sud (100.00%), N’Tchengue (100.00%), Port Gentil Océan
(100.00%), Torpille (100.00%), Torpille Nord Est (100.00%)
Non-operated: Barbier (65.28%), Girelle (65.28%), Gonelle (65.28%), Grondin (65.28%),
Hylia Marine (37.50%), Mandaros (65.28%), Pageau (65.28%), Rabi Kounga (32.92%)
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%), Nigeria LNG (15,00%)
The Republic
of the Congo (1968)
Operated: Kombi-Likalala-Libondo (65.00%), Moho Bilondo (53.50%),
Moho Nord (53.50%), Nkossa (53.50%), Nsoko (53.50%), Sendji (55.25%), Yanga (55.25%)
Non-operated: Lianzi (26.75%), Loango (42.50%), Zatchi (29.75%)
(a)
(b)
(c)
(d)
(e)
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 l below).
The Islay field extends partially into Norway. Total E&P UK holds a 94.49% stake and Total E&P Norge 5.51%.
TOTAL’s interest in the joint venture ZAO Terneftegas with PAO Novatek (51.00%).
TOTAL's interest in the joint venture OAO Yamal LNG with PAO Novatek (50.10%), CNPC (20.00%) and Silk Road Fund (9.90%).
Stake in the company Angola Block 14 BV (TOTAL 50.01%).
REGISTRATION DOCUMENT 2017
37
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production 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)
Non-operated: Tin Fouyé Tabankort (35.00%)
Operated: Abu Al Bukhoosh (75.00%)
Non-operated: ADNOC Onshore (10.00%), ADNOC Offshore (13.33%)(f),
ADNOC Gas Processing (15.00%), ADNOC LNG (5.00%)
Non-operated: Halfaya (22.5%)(g)
Non-operated: zones 15, 16 & 32 (75.00%)(h), zone 129 & 130 (30.00%)(h),
zone 130 & 131 (24.00%)(h)
Non-operated: various onshore fields (Block 6) (4.00%)(i), 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%),
Al Shaheen (30.00%)
Non-operated: Various onshore fields (Block 5) (15.00%)
Operated: Aguada Pichana Este (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%)
Bolivia (1995)
Operated: Incahuasi (50.00%)
Non-operated: San Alberto (15.00%), San Antonio (15.00%), Itaú (41.00%)
Brazil (1999)
Canada (1999)
United States (1957)
Venezuela (1980)
Colombia (2017)
Asia-Pacific
Australia (2005)
Brunei (1986)
China (2006)
Indonesia (1968)
Non-operated: Libra (20.00%)
Non-operated: Surmont (50.00%)
Operated: several assets in the Barnett Shale area (100.00%)
Non-operated: several assets in the Utica Shale area (25.00%)(k), Chinook (33.33%),
Tahiti (17.00%)
Non-operated: PetroCedeño (30.32%), Yucal Placer (69.50%)
Non-operated: Niscota (50.00%)
Non-operated: several assets in UJV GLNG (27.50%)(l)
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%)
Myanmar (1992)
Thailand (1990)
Operated: Blocks M5/M6 (Yadana, Sein, Badamyar) (31.24%)
Non-operated: Bongkot (33.33%)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
Via Abu Dhabi Marine Areas Limited (equity affiliate), TOTAL holds a 13.33% stake in the Abu Dhabi Marine Areas (ADNOC Offshore) concession operated by Abu Dhabi
Company for Offshore Petroleum Operations Limited.
TOTAL’s interest in the joint venture.
TOTAL’s stake in the foreign consortium.
TOTAL’s indirect interest (4.00%) in the concession, via its 10.00% 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).
TOTAL’s direct interest in Block 53.
TOTAL’s interest in the joint venture with Chesapeake.
TOTAL’s interest in the unincorporated joint venture.
38
REGISTRATION DOCUMENT 2017
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production segment
2
2.1.9
Activities by geographical zone
The information below describes the Group’s main exploration and
production activities presented by geographical zone according to
the internal business units(1) of E&P in 2017, without detailing all of the
assets held by TOTAL. In each zone, 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 2017, TOTAL’s production in the zone of Europe and Central
Asia was 761 kboe/d, representing 30% of the Group’s total
production, compared to 757 kboe/d in 2016 and 664 kboe/d in
2015. The two main producing countries in this zone in 2017
were Russia and Norway.
In Russia, where the largest percentage of TOTAL’s proved reserves
are located (nearly 21% as of December 31, 2017), the Group’s
production was 318 kboe/d in 2017, compared to 335 kboe/d in
2016 and 290 kboe/d in 2015. This production comes from TOTAL’s
stake in PAO Novatek(2), as well as from the Termokarstovoye(3) and
Kharyaga fields (20%) and, since December 2017, the Yamal LNG
project. Since 2015, Russia has been the leading contributor to the
Group’s production.
TOTAL participates in the Yamal LNG project. In 2013, the company
OAO Yamal LNG(4) 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. In November 2017, the Yamal LNG plant started
production with the first shipment aboard " Christophe de Margerie ".
For further information on international economic sanctions applicable
in Russia, refer to point 3.1.9 of chapter 3.
In Norway, the Group’s production was 239 kboe/d in 2017
compared to 235 kboe/d in 2016 and 239 kboe/d in 2015. This
production comes from various fields, notably Ekofisk (39.9%),
Snøhvit (18.4%) and Troll (3.69%). TOTAL has equity stakes in
83 production licenses on the Norwegian maritime continental shelf,
35 of which it operates. The Group also holds an 18.4% stake in the
gas liquefaction plant of Snøhvit (capacity of 4.2 Mt/y). This plant,
located in the Barents Sea, is supplied with production from the
Snøhvit and Albatross gas fields.
In the Greater Hild area, TOTAL announced in November 2017 the
sale of its interests in the Martin Linge field (51%, operator, estimated
capacity 80 kboe/d) and the Garantiana discovery (40%).
The Group disposed of a 15% stake in the Gina Krog field in the
Sleipner area in December 2016, and the remaining stake (15%) in
September 2017.
In the United Kingdom, the Group’s production was 142 kboe/d in
2017 compared to 158 kboe/d in 2016 and 107 kboe/d in 2015.
Approximately 95% of this production comes from operated fields,
split on the one hand between the Alwyn area in the Northern North
Sea and the Elgin-Franklin area in the Central Graben and, on the
other hand, the West of Shetland Laggan Tormore area.
(cid:142)
(cid:142)
(cid:142)
In the Alwyn area (100%), production from the Alwyn and Dunbar
fields represents 26% and 16% of production, respectively, of this
area. The rest of the production comes from satellites linked to
these fields;
In the Central Graben, TOTAL holds stakes in the Elgin, Franklin
and West Franklin
(46.2%, operator). The Elgin
redevelopment project includes the drilling of five wells. Two were
drilled in 2016 and a third is underway. The West Franklin Phase II
redeployment project came to an end in 2016;
fields
In the West of Shetland area, the Laggan and Tormore fields (60%,
operator) started production in February 2016 and the Edradour
and Glenlivet fields in August 2017. TOTAL also operates the P967
license, which includes the 2016 Tobermory gas discovery (30%).
The total capacity is 90 kboe/d.
An impairment on gas assets in the United Kingdom was recognized
in the 2015, 2016 and 2017 Consolidated Financial Statements.
In October 2017, TOTAL sold its stakes in two shale gas exploration
and production licenses (PEDL 139 and 140, 40%) located in the
Gainsborough Trough (East Midlands region), together with some of
its interests in the shale gas licenses from the 14th round. TOTAL
retains interests in licenses PEDL 273, 305 and 316 (20%).
In Kazakhstan, the Group’s production was 42 kboe/d in 2017. This
comes from the Kashagan field operated by the North Caspian
Operating Company (NCOC) in the North Caspian license (16.81%).
The first phase of production of the Kashagan field and the
associated processing plant started in October 2016. Commissioning
of the facilities is ongoing, including the start-up of raw gas reinjection
in August 2017 in order to ramp oil production up to the expected
capacity of 370 kb/d. In addition, engineering and design work is
underway to increase production capacity by raising raw gas
compression and injection capacities.
In the Netherlands, the Group’s production was 20 kboe/d in 2017
compared to 25 kboe/d in 2016 and 28 kboe/d in 2015. This
decrease was due to natural field decline. In 2017, production on
platforms L7 and F15 stopped so that they can be dismantled.
TOTAL holds interests in 24 offshore production licenses, including
20 that it operates.
In Italy, TOTAL holds stakes in the Tempa Rossa field (50%,
operator) located on the Gorgoglione concession (Basilicate region),
as well as three exploration licenses. The development project is
ongoing and production is expected to start in 2018.
In 2017, an
Consolidated Financial Statements.
impairment
in Norway was
recognized
in
the
(1)
(2)
(3)
(4)
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 production has been restated accordingly.
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, 2017.
The development and production license of Termokarstovoye onshore gas and condensates field is held by ZAO Terneftegas, a joint venture between
Novatek (51%) and TOTAL (49%).
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 2017
39
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production segment
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 (50%
following the withdrawal of Engie in June 2017), which is located in
the Caspian Sea and was discovered by TOTAL in 2011. The
production capacity of this high pressure field is expected to be
35 kboe/d and the gas produced will supply Azerbaijan’s domestic
market. Drilling operations started in February 2018.
In France, the Group’s production ended in 2014 with the sale of the
Lacq concessions. TOTAL 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 the Polshkov well. The second well under the
contract was drilled in 2017.
In Greece, TOTAL (50%, operator) and its partners signed a license
agreement for offshore Block 2 in the Ionian Sea with the Greek
authorities in October 2017. Following the official license award by
ratification of the Hellenic Parliament in February 2018, exploration
work can commence.
Rest of the Europe and Central Asia area
TOTAL also holds interests in an exploration license without activity in
Tajikistan.
Africa (excluding North Africa)
In 2017, TOTAL’s production in the zone of Africa(1) was
654 kboe/d, representing 25% of the Group’s total production,
compared to 634 kboe/d in 2016 and 639 kboe/d in 2015. The
two main producing countries in this zone in 2017 were
Nigeria and Angola.
In Nigeria,
the Group’s production, primarily offshore, was
267 kboe/d
in 2016 and
in 2017 compared
245 kboe/d in 2015. This recent increase in production is due to the
development of Ofon phase 2 (OML102) and improved production
from the licenses held by the Shell Petroleum Development Company
(SPDC) joint venture following the negative impact of difficult
operational security conditions in the Niger delta in 2016.
to 243 kboe/d
TOTAL operates five production licenses (OML) on the 34 leases in
which the Group has interests (including two exploration licenses).
TOTAL has offshore operations (production was 172 kboe/d in 2017)
notably on the following leases:
(cid:142)
(cid:142)
(cid:142)
on OML 139 (18%), the Owowo-3 exploration well, drilled in 2016,
confirmed the discovery of oil made in 2012 and enabled 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 and where the field Usan is producing;
on OML 130 (24%, operator), the development of the Egina field
is underway and
(200 kboe/d capacity)
production is expected to start in 2018. The Preowei field was
assessed in 2017 and should enable the finalization of the studies
for a satellite development of Egina;
launched
in 2013
on OML 102 (40%, operator), the drilling of the 24 additional wells
(Ofon, phase 2) on the Ofon oil fields is on progress and should be
completed in 2018;
(cid:142)
(cid:142)
on OML 99 (40%, operator), studies are ongoing for the
development of the Ikike field; and
on OML 118 (12.5%), the Bonga field contributed 17 kboe/d to the
Group’s production in 2017. Optimization studies of the Bonga
South West Aparo project (10% unitized) are ongoing.
TOTAL also has onshore operations (production was 95 kboe/d in
2017), notably:
(cid:142)
(cid:142)
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; and
in relation to the SPDC joint venture (10%), which includes 20 oil
mining leases (of which 17 are located onshore), the 2017
production was 58 kboe/d (of which 55 kboe/d was onshore). 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
the
installation of an additional capacity of approximately 7 Mt/year.
total capacity. Assessments are ongoing
for
In Angola, where TOTAL is the leading oil operator in the country(2),
the Group’s production was 229 kboe/d in 2017 compared to
243 kboe/d in 2016 and 248 kboe/d in 2015. This production comes
from Blocks 17, 14 and 0, and Angola LNG.
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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 brownfield
projects in 2017, including in particular Clov Phase 1, two wells
infill, which is expected to start production in 2018, as well as Dalia
Phase 2A and Girassol M14, which started production in 2017.
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 with a capacity of
115 kb/d each. In June 2016, a presidential decree was published
providing new and favorable tax conditions for the project. The
drilling campaign of 59 wells began in 2015. Production of
Kaombo Nord is expected to start in 2018. The discoveries in the
central and northern parts of the block (outside Kaombo) offer
additional potential and are currently being assessed.
On Block 14 (20%)(3), 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
development project started production in March 2017.
the Mafumeira field
On Block 48 (50%, operator), TOTAL and Sonangol have
concluded an agreement in order to jointly explore the block. The
first phase of this program is expected to last for two years with
the drilling of one exploration well.
(1)
(2)
(3)
Excluding North Africa, which is reported in the zone of the Middle East and North Africa.
Company data.
Stake held by the company Angola Block 14 BV (TOTAL 50.01%).
40
REGISTRATION DOCUMENT 2017
TOTAL is also developing its LNG activities through the Angola LNG
project (13.6%), which includes a gas liquefaction plant with a total
capacity of 5.2 Mt/year 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 resumed in May 2016.
Following work to increase the reliability of the facilities, the plant has
been capable of processing all of the gas supplied since April 2017.
Taking
the revised gas price assumptions, an
impairment on Angola LNG was recognized in the 2016 Consolidated
Financial Statements.
into account
In the Bas-Congo basin, TOTAL is also the operator of exploration
Block 17/06 (30%).
In the deep offshore Kwanza basin, TOTAL operates Blocks 25 (35%)
and 40 (40%). The operating license on Block 39 (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(1), was 104 kboe/d in 2017 compared to
90 kboe/d in 2016 and 87 kboe/d in 2015.
(cid:142)
(cid:142)
(cid:142)
(cid:142)
On the offshore field Moho Bilondo (53.5%, operator), the Phase
1b project (capacity of 40 kboe/d) started production in 2015. The
Moho Nord project (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.
At the end of 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.
An impairment was required on several Congo assets and recognized
in the 2017 Consolidated Financial Statements.
In Gabon, the Group’s production was 54 kboe/d in 2017 compared
to 58 kboe/d in 2016 and 59 kboe/d in 2015. In October 2017,
TOTAL finalized the sale to Perenco of stakes in a number of onshore
and offshore fields with production of 13 kboe/d, and transferred
operatorship to Perenco on various mature fields (Grondin and Hylia
sectors). The Group’s activities in Gabon are now exclusively carried
out by Total Gabon(2). TOTAL wholly owns and operates the Anguille
and Torpille sector offshore fields, the Mandji Island sector onshore
fields and the Cap Lopez oil terminal. In 2017, TOTAL increased its
stake in the Baudroie-Mérou field from 50% to 100%, in line with its
strategy of refocusing on the North offshore area. TOTAL is also the
operator of the Diaba deep offshore license (42.5%), an exploration
area. Discussions are ongoing with authorities for a renewal of the
license in 2018.
In Uganda, TOTAL is present in the Lake Albert project, a major
project for the Group, via a stake in licenses EA-1, EA-1A, EA-2 and
EA-3 (Kingfisher). 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. TOTAL will take
over operatorship from Tullow of the northern portion of license EA-2,
enabling significant efficiency gains and synergies
the
development of the northern part of the project (known as Tilenga).
China National Offshore Oil Corporation (CNOOC) has exercised its
for
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production segment
pre-emption right on 50% of the interest acquired. The agreement
remains subject to approval by the Ugandan authorities. Following
the finalization of the transaction, TOTAL expects to own a 44.1%
stake in the Lake Albert project.
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 on the Indian Ocean. In May 2017, an intergovernmental
agreement was signed between Uganda and Tanzania in order to set
out the legal and fiscal framework of the pipeline development
project. Implementation agreements are being negotiated with each
of the two governments. Finalization of the front end engineering and
design (FEED) work for the upstream part of the project and the
pipeline is underway.
In Mauritania, TOTAL has increased its exploration in the country
through the acquisition of two new deep offshore license the Block
C7 in May 2017 and the Block C8 in August 2017. On the Block C9
operated by TOTAL since 2012, an exploration well is planned at the
end of 2018.
In Senegal, TOTAL signed two agreements to explore the country’s
deep offshore potential in May 2017 through the acquisition of the
deep offshore block Rufisque and a research contract in ultra deep
offshore.
Rest of the zone of Africa
TOTAL also holds interests in exploration licenses in South Africa,
Côte d’Ivoire, Kenya, Mozambique, Namibia and the Democratic
Republic of the Congo.
Middle East and North Africa
In 2017, TOTAL’s production in the zone of the Middle East
and North Africa was 559 kboe/d, representing 22% of the
Group’s total production, compared to 517 kboe/d in 2016 and
531 kboe/d in 2015. The two main producing countries in this
zone in 2017 were the United Arab Emirates and Qatar.
(ADCO,
the Abu Dhabi Company
renamed ADNOC Onshore
In the United Arab Emirates, the Group’s production was
290 kboe/d in 2017 compared to 291 kboe/d in 2016 and
287 kboe/d in 2015. The Group holds, since January 1, 2015, a 10%
for Onshore Petroleum
stake
in
Operations Ltd.
in 2017)
concession for a period of 40 years, which follows a previous 75-year
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 Areas Ltd
(ADMA, renamed ADNOC Offshore in 2017) 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,
renamed ADNOC Gas Processing in 2017),
which produces NGL and condensates from the associated gas
produced by ADNOC Onshore. In addition, TOTAL holds 5% of the
Abu Dhabi Gas Liquefaction Company (ADGAS, renamed ADNOC
LNG in 2017), which processes the associated gas produced by
ADNOC Offshore 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 ADNOC LNG.
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. The
operations of Dolphin Energy were not impacted by the evolution of
the diplomatic relations between the United Arab Emirates and Qatar.
(1)
(2)
Total E&P Congo is owned by TOTAL (85%) and Qatar Petroleum (15%).
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 2017
41
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production segment
In Qatar, the Group’s production was 170 kboe/d in 2017 compared
to 134 kboe/d in 2016 and 2015.
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 in July 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, is
provided by 30 platforms and 300 wells. Since July 2017, the
Al Shaheen field has been operated by a new operating company,
North Oil Company, held by TOTAL (30%) and Qatar Petroleum
(70%).
TOTAL also operates the Al Khalij field (40%, operator).
In addition, the Group 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 for the
marketing of gas from the Dolphin Block to the United Arab Emirates
and Oman:
(cid:142)
(cid:142)
Qatargas 1: TOTAL holds a 20% stake in the North Field-Qatargas
1 Upstream Block,supplying the three LNG trains (total capacity of
10 Mt/y) of Qatargas 1 (10%); and
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.
In Oman, the Group’s production was 37 kboe/d in 2017 compared
to 37 kboe/d in 2016 and 36 kboe/d in 2015. TOTAL participates in
the production of oil principally in Block 6 (4%)(1), but also in Block 53
(2%). The Group also produces LNG through its investments in the
Oman LNG (5.54%)/Qalhat LNG (2.04%)(2) liquefaction complex, with
an overall capacity of 10.5 Mt/y.
In Libya, the Group’s production was 31 kboe/d in 2017 compared
to 14 kboe/d in 2016 and 2015. This production comes from blocks
located on offshore areas 15, 16 and 32 (Al Jurf, 75% (3)), which have
not been affected by security issues, and also from the El Sharara
fields in onshore area 129 and 130 (30%(3)), where production
restarted in 2016, and onshore area 130 and 131 (24%(3)), restarted
in May 2017. Production as well as exploration activities have been
stopped on Mabruk, onshore areas 70 and 87 (75%(3)) since the end
of 2014. In March 2018, TOTAL acquired Marathon Oil Libya Limited,
which holds a 16,33% stake in the Waha Concessions in Libya. This
acquisition will give TOTAL access to production and an exploration
potential across the area covered by the concessions in the Sirte
Basin.
In Iraq, the Group’s production was 16 kboe/d in 2017 compared to
18 kboe/d in 2016 and 2015. TOTAL holds a 22.5% stake in the
risked service contract for the Halfaya field, located in Missan
province. Following development studies in 2016, the decision to
develop phase 3 of the project to increase production to 400 kb/d
was taken and the contracts were awarded in 2017
In Algeria, TOTAL’s production was 15 kboe/d in 2017 compared to
23 kboe/d in 2016 and 25 kboe/d in 2015. 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 2017 with activities related to the construction of the
plant and drilling. Pursuant to the Global Agreement (Accord Global)
signed in April 2017, a new concession contract (which substitutes
the previous PSC contract) and a gas agreement for Timimoun were
signed in December 2017.
In Yemen, the Group had no production in 2017 and 2016
compared to 17 kboe/d in 2015. 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 the contract relating to the development and
production of phase 11 (SP11) of the giant South Pars gas field
(expected production capacity of 2 Bcf/d, i.e., 400 kboe/d including
condensates) with the National Iranian Oil Company (NIOC) in
July 2017. The produced gas will supply the Iranian domestic market.
This 20-year risked service contract is the first of the new variety of
contracts referred to as the Iranian Petroleum Contract (IPC). TOTAL
is the operator and has a 50.1% interest alongside the Chinese
state-owned company CNPC (30%) and Petropars (19.9%), a
wholly-owned subsidiary of NIOC. For information on international
economic sanctions concerning Iran, refer to point 3.1.9 of chapter 3.
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 information on international economic
sanctions concerning Syria, refer to point 3.1.9 of chapter 3.
In Lebanon, TOTAL entered two exploration blocks 4 and 9 (40%,
operator)
the eastern part of
Mediterranean Sea in February 2018.
located offshore Lebanon,
in
Rest of the zone of the Middle East and North Africa
TOTAL also holds interests in exploration licenses in Cyprus and
Egypt.
Americas
In 2017, TOTAL’s production in the zone of the Americas was
348 kboe/d, representing 14% of the Group’s total production,
compared to 279 kboe/d in 2016 and 255 kboe/d in 2015. The
two main producing countries in this zone in 2017 were the
United States and Argentina.
In the United States, the Group’s production was 123 kboe/d in
2017 compared to 86 kboe/d in 2016 and 89 kboe/d in 2015.
Following the acquisition by TOTAL from Chesapeake in late 2016 of
its 75% stake in a joint venture in which the Group had already held a
25% interest since 2009, the year 2017 was TOTAL’s first full year of
operating the Barnett shale gas assets. As a result of the work carried
out since the 2nd quarter of 2017, the decline that started in 2013 has
been stopped and operated production has started to stabilize at
around 600 Mcf/d.
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 2017 and 2016, compared to eight in 2015.
(1)
(2)
(3)
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.
TOTAL’s indirect stake via Oman LNG’s stake in Qalhat LNG.
TOTAL’s stake in the foreign consortium.
42
REGISTRATION DOCUMENT 2017
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production segment
The initial results of the pilot development on the Rincón la Ceniza
Block are encouraging at this stage. The delineation well drilled in
2016 on the La Escalonada Block in order to test the oil portion of
the formation has also demonstrated good productivity.
In Canada, the Group’s production increased to 59 kboe/d in 2017
compared to 34 kboe/d in 2016 and 14 kboe/d in 2015. This comes
from the ramp-up of Surmont (50%), a project developed by SAGD (2)
and operated by ConocoPhillips. The second phase was
commissioned in 2015 and Surmont’s total production reached
approximately 135 kb/d during 2017.
Construction of the Fort Hills oil sands mining project was more than
95% complete at year-end 2017. Bitumen production from the first
train started in January 2018. 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 reduce 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. A dispute over the funding of the
cost overrun of the project, of which the operator notified the partners
in January 2017, was resolved with the sale of an additional 3.15%
by TOTAL to Suncor and Teck. A further adjustment will be
performed after the final project cost is known. The book value of
TOTAL’s interest in Fort Hills was adjusted in 2017 to take into
account the reduction in the expected value of the project following
the cost increase.
On the Joslyn (38.25%, operator) and Northern Lights (50% operator)
licenses, the projects were suspended in 2014 and work remains
strictly limited to legal and contractual obligations and maintaining
safety.
In Bolivia, the Group’s production, mainly gas, was 46 kboe/d in
2017 compared to 34 kboe/d in 2016 and 28 kboe/d in 2015.
TOTAL is active on six licenses, five of which have producing fields:
San Alberto (15%), San Antonio (15%), Block XX Tarija Oeste (41%),
and Aquio and Ipati (50%, operator), where the Incahuasi gas field
started production in August 2016. On the Azero exploration license
(50%), which covers an area of more than 7,800 km² in the Andean
foothills, a geophysical data acquisition campaign was started at the
end of 2016. The drilling of a well is expected to follow in 2018/2019.
The Rio Hondo exploration license was relinquished in June 2017.
In Venezuela, the Group’s production was 44 kboe/d in 2017
compared to 47 kboe/d in 2016 and 52 kboe/d in 2015. It comes
from the Group’s interests in PetroCedeño (30.32%) and Yucal
Placer (69.5.%). Development of the extra heavy oil field of
PetroCedeño continues (49 wells were drilled in 2017 compared to
39 in 2016 and 47 in 2015), as well as the debottlenecking project for
the water separation and treatment facilities.
The sale of the 49% stake in offshore exploration Block 4 of
Plataforma Deltana is awaiting approval from the authorities. For
information on
international economic sanctions concerning
Venezuela, refer to point 3.1.9 of chapter 3.
In Brazil, TOTAL acquired in 2013 a 20% stake in the Libra field,
located in the Santos field in the ultra-deep offshore (2,000 m),
approximately 170 km off the coast of Rio de Janeiro over an area of
1,550 km². At year-end 2017, 12 wells had been drilled and the
production started in November 2017 with the FPSO Pioneiro de
Libra (50 kb/d capacity) designed to carry out the long-term
future development
production
phases. The first development phase (17 wells connected to an
FPSO with a capacity of 150 kb/d) also started in December 2017.
tests necessary
for optimizing
(17%) and Chinook
(33.33%). On Tahiti,
In the Gulf of Mexico, TOTAL holds interests in the deep offshore
fields Tahiti
the
commissioning of several new in-fill wells drilled since 2015 has
enabled the field to return to its highest historical levels, in excess of
100 kboe/d. The Tahiti Vertical Expansion (TVEX) project launched in
2016 in order to extend the production level of the field is expected to
start production in the second half of 2018. The work continued in
2017, notably with the drilling of three of the four productive wells.
In exploration in the Gulf of Mexico:
(cid:142)
(cid:142)
(cid:142)
TOTAL (40%) and its partner Cobalt (60%, operator) continued
their work to assess the commerciality of the North Platte
discovery. In May 2017, TOTAL ended its alliance for joint
deepwater exploration with Cobalt, formed in 2009;
the Group acquired new mining rights on blocks awarded during
the annual auctions in March and August 2017; and
an agreement signed in September 2017 covering 16 blocks
allows for joint drilling on 7 exploration prospects operated by
Chevron. TOTAL will have stakes of between 25% and 40% in
these wells. Under this agreement, TOTAL announced in January
2018 a major oil discovery in the Ballymore prospect (40%) located
deep offshore, on the Norphlet thematic. A sidetrack well is
ongoing to confirm the upside potential.
In January 2018, TOTAL announced the signature of an agreement
with Samson in December 2017 in order to acquire Samson
Offshore, LLC, which holds a 12.5% interest in four blocks covering
the Anchor discovery. The transaction also includes the acquisition of
a 12.5% interest in the nearby exploration block Green Canyon 761,
where TOTAL already holds a 12.5% interest.
In 2017, an impairment on assets in the United States was
recognised in the Consolidated Financial Statements.
In Argentina, TOTAL operated approximately 30%(1) of the country’s
gas production in 2017. The Group’s production was 76 kboe/d in
2017 compared to 78 kboe/d in 2016 and 72 kboe/d in 2015:
(cid:142)
(cid:142)
In Tierra del Fuego, on the CMA-1 concession, TOTAL operates
the Ara and Cañadon Alfa Complex onshore fields and the Hidra,
Carina and Aries offshore fields (37.5%). In February 2016, TOTAL
started production on the Vega Pleyade offshore gas and
condensates field (37.5%, operator), which has a production
capacity of 350 Mcf/d. TOTAL also expects to launch the Fenix
project (37.5%, operator) before the end of 2018;
In the Neuquén onshore basin, the Group holds interests in
10 licenses and operates 6 of them, including Aguada Pichana and
San Roque, where production has already started. Three shale gas
and oil pilot projects were launched: the first on the Aguada
Pichana Block (27.27%, operator), where production started
mid-2015; the second on the Rincón la Ceniza Block, located on
the gas and condensate portion of Vaca Muerta (45%, operator),
where production started in July 2016; and the third on the
Aguada San Roque Block (24.71%, operator), which was launched
in August 2017.
Following the good results of the Aguada Pichana pilot project and
a reduction in drilling costs, the first phase of development of the
giant Vaca Muerta shale play was launched in July 2017 in the
eastern part of the block. Under this project, all of the Aguada
Pichana partners, Total Austral S.A. (27.27%, operator), YPF S.A.
(27.27%), Wintershall Energia S.A. (27.27%) and Panamerican
Energy LLC (18.18%), signed an agreement that splits the block
into two parts. This agreement will permit TOTAL to increase its
participation to 41% in the non-conventional part of the Aguada
Pichana Este project.
(1)
(2)
Source: Department of Federal Planning, Public Investment and Services, Energy Secretariat.
Steam Assisted Gravity Drainage: production by injection of recycled water vapor.
REGISTRATION DOCUMENT 2017
43
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production segment
In addition, the Group holds 17 exploration licenses located in the
Foz do Amazonas, Barreirinhas, Ceará, Espirito Santo and Pelotas
basins.
works aimed at maintaining production on the Tunu, Peciko, South
Mahakam, Sisi-Nubi and Bekapai fields continued. Drilling activities
on behalf of Pertamina started in July 2017;
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, following the granting of the
necessary authorization in January 2018, TOTAL acquired a 22.5%
interest in the concession Iara, located in Block BM-S-11A, 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-9A. The Lapa field entered into production in December 2016.
Technical cooperation between the two companies will be reinforced,
in particular by the joint assessment of the exploration potential of
promising areas
the development of new
technologies, in particular in deep offshore.
in Brazil and by
licenses
In Mexico, TOTAL was awarded exploration
in
December 2016 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 an area of 2,977 km² at water depths of
between 2,300 m and 3,600 m. Located in the Salina basin, Block 1
(33.3%) extends over 2,381 km² and Block 3 (33.3%) covers 3,287
km². In June 2017, TOTAL acquired Block 15 (60%, operator) in the
Sureste basin, which covers an area of 972 km2.
In Colombia, TOTAL started production on the Niscota field (50%) in
October 2017. Production for 2017 was less than 1 kboe/d.
In Guyana, TOTAL enters exploration in the Guyana Basin with three
exploration
licences offshore Guyana. The Group has signed
agreements in February 2018 to acquire a 35% working interest in
the Canje Block and a 25% working interest in the Kanuku Block and
furthermore held an option to purchase a 25% working interest in the
Orinduik block.
Rest of the zone of the Americas
TOTAL also has interests in exploration licenses in Aruba and French
Guyana, where the Guyane Maritime license (100%, operator) was, in
September 2017, officially extended to mid-2019.
Asia-Pacific
In 2017, TOTAL’s production in the zone of Asia-Pacific was
244 kboe/d,
the Group’s overall
production, compared to 265 kboe/d in 2016 and 258 kboe/d in
2015. The two main producing countries in this zone in 2017
were Indonesia and Thailand.
representing 9% of
In Indonesia, the Group’s production was 112 kboe/d in 2017
compared to 140 kboe/d in 2016 and 147 kboe/d in 2015. TOTAL’s
operations in Indonesia were 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):
(cid:142)
On the Mahakam license, which expired end of December 2017,
the Indonesian government has decided to allocate 100% of the
participating interest to Pertamina (operator) from January 1, 2018,
and to give it the possibility to farm out some interests to its
current partners.
The Group delivered most of its natural gas production on this
license to the Bontang LNG plant. These volumes of gas
represented almost 80% of the plant’s supply in 2017. To this gas
production was added the operated production of oil and
condensates from the Handil and Bekapai fields. In addition, the
(cid:142)
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).
In Thailand, the Group’s production was 58 kboe/d in 2017
compared to 60 kboe/d in 2016 and 62 kboe/d in 2015. This
production comes from the Bongkot offshore gas and condensate
field (33.33%). The Thai state-owned company PTT purchases all of
the natural gas and condensate production. New investments are
underway for maintaining the plateau and responding to gas demand.
In Brunei, the Group’s production was 21 kboe/d in 2017 compared
to 18 kboe/d in 2016 and 15 kboe/d in 2015. This production comes
from the Maharaja Lela Jamalulalam offshore gas and condensate
field on Block B (37.5%, operator). The gas is delivered to the Brunei
LNG liquefaction plant. On the Maharaja Lela South project, intended
to increase the field’s production capacity, the new platform has
been installed and the six planned wells have started production.
Studies are continuing to reassess the potential of the deep offshore
exploration Block CA1 (86.9%, operator), which includes the Jagus
East discovery, the reservoirs of which are connected to those of the
Gumusut-Kakap field in Malaysia.
In Myanmar, the Group’s production was 19 kboe/d in 2017
compared to 21 kboe/d in 2016 and 19 kboe/d in 2015.
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. In May 2017, TOTAL started production on
the Badamyar field, a satellite of the Yadana field. This project is
expected to make it possible to extend production on this gas field,
which is 8 Bcf3/y, beyond 2020.
In 2015, TOTAL signed a production sharing contract on deep
offshore Block YWB (100%, operator), awarded in 2014 during the
offshore round launched by the local authorities. A 2D seismic survey
was carried out in May 2016.
In 2015, the Group entered exploration license A6 (40%) located in
the deep offshore area west of Myanmar. Two of the three
exploration wells drilled since 2015 have resulted in gas discoveries.
Evaluation of these discoveries is ongoing.
In Australia, the Group’s production was 19 kboe/d in 2017
compared to 16 kboe/d in 2016 and 4 kboe/d in 2015. This
production comes
(27.5%), an
from Gladstone LNG
integrated gas production, transportation and liquefaction project
from the Fairview, Roma, Scotia and Arcadia fields with a capacity of
7.8 Mt/y located on Curtis Island, Queensland. Train 1 of the plant
started production in 2015 and train 2 in May 2016. An impairment
was recognized in the 2015, 2016 and 2017 Consolidated Financial
Statements.
(GLNG)
The Ichthys project (30%) involves the development of a gas and
condensate field located in the Browse Basin. This development
includes a platform for the production, processing and export of gas,
an FPSO for processing and exporting the condensate (with 100 kb/d
condensate capacity), an 889 km gas pipeline and an onshore
liquefaction plant (with 8.9 Mt/y LNG and 1.6 Mt/y LPG capacities) in
Darwin. The LNG has already been sold, mainly to Asian buyers,
under long-term contracts. According to the operator, the production
is expected to start in the 1st semester of 2018.
In China, the Group’s production was 15 kboe/d in 2017 compared
to 10 kboe/d in 2016 and 11 kboe/d in 2015. 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.
44
REGISTRATION DOCUMENT 2017
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production segment
In 2017, TOTAL signed a production sharing contract on the Taiyang
exploration block (49%, operator), located in both Chinese and
Taiwanese waters in the China Sea. A 2D seismic survey is
underway.
southeast of Port Moresby. The interpretation of the multi-client
seismic survey performed in late 2016 revealed some promising
prospects. In October 2017, the authorities awarded TOTAL (100%)
a second exploration license (PPL589) in this area.
In Papua New Guinea, 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. The
delineation program of these discoveries was completed in April 2017
and the results of the wells drilled confirmed the resource levels of the
fields. In 2016, 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. The development
studies are ongoing.
In March 2017, the acquisition of a 35% stake in exploration license
PPL339, located in Gulf Province, came into effect.
Since 2016, TOTAL has held deep offshore exploration license
PPL576 (100%) in the Offshore Eastern Papuan Foldbelt area
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 subject to the establishment by both countries of
an appropriate contractual framework.
Mærsk Oil acquisition
Following the finalization of the Mærsk Oil acquisition, Total holds
interests notably in Fields in United Kingdom (Culzean, 49.99%,
opérator), Norway
(31.2%
ownership of the Danish Underground Consortium producing assets),
the US Gulf of Mexico (Jack, 25%), Algeria, Kenya, Kazakhstan,
Angola and Brazil.
(Johan Sverdrup, 8.44%), Denmark
2
REGISTRATION DOCUMENT 2017
45
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production segment
2.1.10
Oil and gas acreage
As of December 31,
(in thousands of acres)
Europe and Central Asia (excl. Russia)
Russia
Africa (excl. North Africa)
Middle East and North Africa
Americas
Asia-Pacific
TOTAL
(a)
(b)
Undeveloped acreage includes leases and concessions.
Net acreage equals the sum of the Group’s equity stakes in gross acreage.
2.1.11
Number of productive wells
As of December 31,
(number of wells)
Europe and Central Asia (excl. Russia)
Russia
Africa (excl. North Africa)
Middle East and North Africa
Americas
Asia-Pacific
TOTAL
(a)
Net wells equal the sum of the Group’s equity stakes in gross wells.
46
REGISTRATION DOCUMENT 2017
2017
Undeveloped
acreage(a)
Developed acreage
17,885
6,567
3,758
691
73,608
53,518
32,977
5,902
20,487
11,985
52,477
34,556
201,192
113,219
730
165
604
121
829
204
2,879
445
1,075
527
885
321
7,002
1,783
2017
Gross productive
wells
Net productive
wells(a)
436
244
297
574
1,590
75
10,197
168
1,044
3, 422
131
3,053
13,695
7,536
114
90
55
100
442
15
628
41
346
2,005
60
1,108
1,645
3,359
Gross
Net
Gross
Net
Gross
Net
Gross
Net
Gross
Net
Gross
Net
GROSS
NET(b)
Oil
Gas
Oil
Gas
Oil
Gas
Oil
Gas
Oil
Gas
Oil
Gas
OIL
GAS
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production segment
2.1.12
Net productive and dry wells drilled
2017
2016
2015
Net
productive
wells
drilled
(a)(b)
Net dry
wells
drilled
(a)(c)
Net total
wells
drilled
(a)(c)
Net
productive
wells
drilled
(a)(b)
Net dry
wells
drilled
(a)(c)
Net total
wells
drilled
(a)(c)
Net
productive
wells
drilled
(a)(b)
Net dry
wells
drilled
(a)(c)
Net total
wells
drilled
(a)(c)
2
0.1
-
0.2
0.6
1.3
1.2
3.4
8.8
21.5
14.4
82.0
29.2
132.4
288.3
291.7
1.8
-
0.5
0.5
0.5
0.7
4.0
-
-
-
-
0.5
-
0.5
4.5
1.9
-
0.8
1.1
1.7
1.9
7.4
8.8
21.5
14.4
82.0
29.7
132.4
288.8
296.2
1.1
-
0.7
0.8
2.1
1.6
6.3
13.6
18.7
14.6
49.3
35.4
151.0
282.6
288.9
1.0
-
-
-
0.8
-
1.8
0.5
-
-
1.1
-
-
1.6
3.4
2.1
-
0.7
0.8
2.9
1.6
8.1
14.1
18.7
14.6
50.4
35.4
151.0
284.2
292.3
1.0
-
0.2
0.3
1.4
2.0
4.9
15.7
22.9
21.4
36.6
60.6
86.9
244.1
249.0
4.6
-
2.1
0.5
0.6
0.9
8.7
0.4
-
-
0.6
0.1
-
1.1
9.8
5.6
-
2.3
0.8
2.0
2.9
13.6
16.1
22.9
21.4
37.2
60.7
86.9
245.2
258.8
As of December 31,
(number of wells)
Exploration
Europe and Central Asia
(excl. Russia)
Russia
Africa (excl. North Africa)
Middle East and North Africa
Americas
Asia-Pacific
TOTAL
Development
Europe and Central Asia (excl.
Russia)
Russia
Africa (excl. North Africa)
Middle East and North Africa
Americas
Asia-Pacific
TOTAL
TOTAL
(a)
(b)
(c)
Net wells equal the sum of the Group’s equity stakes in gross wells.
Includes certain exploratory wells that were abandoned, but which would have been capable of producing oil in sufficient quantities to justify completion.
For information: service wells and stratigraphic wells are not reported in this table.
2.1.13
Wells in the process of being drilled (including wells temporarily
suspended)
As of December 31,
(number of wells)
Exploration
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
2017
Gross
Net(a)
6
-
19
2
8
5
40
16
61
67
200
44
809
1,197
1,237
1.9
-
4.7
0.0
2.8
1.9
11.3
5.2
15.2
13.6
27.5
18.5
201.5
281.5
292.8
(a)
(b)
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.
Other wells are developments wells, service wells, stratigraphic wells and extension wells.
REGISTRATION DOCUMENT 2017
47
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Exploration & Production segment
2.1.14
Interests in pipelines
The table below sets forth the interests of the Group’s entities(1) in TOTAL’s main oil and gas pipelines as of December 31, 2017.
Origin
Destination
(%) interest
Operator
Liquids
Gas
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Pipeline(s)
Europe and Central Asia
Azerbaijan
BTC
Norway
Baku (Azerbaijan)
Ceyhan (Turkey,
Mediterranean)
Frostpipe (inhibited)
Heimdal to Brae Condensate Line
Kvitebjorn Pipeline
Lille-Frigg, Froy
Heimdal
Kvitebjorn
Norpipe Oil
Oseberg Transport System
Ekofisk Treatment center
Oseberg, Brage and
Veslefrikk
Troll Oil Pipeline I and II
Troll B and C
Oseberg
Brae
Mongstad
Teeside
(United Kingdom)
Sture
Vestprosess
(Mongstad refinery)
Vestprosess
(Mongstad refinery)
Vestprosess
Polarled
Netherlands
Nogat Pipeline
WGT K13-Den Helder
WGT K13-Extension
United Kingdom
Alwyn Liquid Export Line
Bruce Liquid Export Line
Central Graben Liquid Export Line (LEP)
Ninian Pipeline System
Kollsnes (Area E)
Asta Hansteen/Linnorm
Nyhamna
F3-FB
K13A
Den Helder
Den Helder
Markham
K13 (via K4/K5)
Alwyn North
Bruce
Elgin-Franklin
Ninian
Cormorant
Forties (Unity)
ETAP
Sullom Voe
Bacton
Shearwater Elgin Area Line (SEAL)
Elgin-Franklin, Shearwater
SEAL to Interconnector Link (SILK)
Bacton
Interconnector
5.00
36.25
16.76
5.00
34.93
12.98
3.71
5.00
5.11
5.00
4.66
23.00
100.00
43.25
15.89
16.00
25.73
54.66
Africa (excl. North Africa)
Gabon
Mandji Pipes
Nigeria
O.U.R
NOPL
Middle East and North Africa
Qatar
Dolphin
Americas
Argentina
TGM
Brazil
TBG
TSB
Asia-Pacific
Australia
GLNG
Myanmar
Yadana
Mandji fields
Cap Lopez Terminal
100.00(a)
Obite
Rumuji
Rumuji
Owaza
40.00
40.00
North Field (Qatar)
Taweelah-Fujairah-Al
Ain (United Arab
Emirates)
24.50
TGN
Uruguyana (Brazil)
32.68
Bolivia-Brazil border
Porto Alegre via São
Paulo
Argentina-Brazil border
(TGM) Porto Alegre
Uruguyana (Brazil)
Canoas
9.67
25.00
Fairview, Roma, Scotia,
Arcadia
GLNG (Curtis Island)
27.50
Yadana field
Ban-I Tong
(Thai border)
31.24
X
(a)
Interest of Total Gabon. The Group holds an interest of 58.28% in Total Gabon.
(1)
Excluding equity affiliates, except for the Yadana and Dolphin pipelines.
48
REGISTRATION DOCUMENT 2017
X
X
X
X
X
X
X
X
X
X
X
X
X
X
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Gas, Renewables & Power segment
2.2
Gas, Renewables & Power segment
The Gas, Renewables & Power segment carries the Group’s ambition
in low carbon activities through the development of downstream gas
and renewable energies as well as the energy efficiency businesses.
The segment employs an integrated business model along the full
gas and power value chain. The number of its clients is in strong
growth, notably in B2C, following the acquisition of Lampiris in 2016.
2
> 900 MWc
of installed power
capacity(1) in 2017
15.6 Mt
LNG volumes
managed
in 2017
$0.4 B
organic
investments(2)
in 2017
11,492
employees
present
> 1.5 M
sites, of which
2/3 are B2C sites
2015 and 2016 data have been restated in line with the new Group organization fully effective since January 1, 2017 (refer to point 1.6.2 of
chapter 1). (1) (2)
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
(1)
(2)
In Group's equity stake.
Organic investments = net investments, excluding acquisitions, divestments and other operations with non-controlling interests (refer to point 2.5.1
of this chapter).
REGISTRATION DOCUMENT 2017
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2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Gas, Renewables & Power segment
2.2.1
Downstream gas and power
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 2.1.8 of this chapter) and 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, which is sold either by pipeline or in the
form of liquefied 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.
Finally, TOTAL aims to pursue the development of expertise in the
power generation sector, especially through cogeneration and
combined-cycle power plant projects, against a backdrop of
increasing global demand for electricity.
2.2.1.1
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 solid and diversified positions
both in the upstream and downstream portions of the LNG chain.
LNG development is a key element of the strategy of the Group,
which is strengthening its positions in most major production zones
and markets.
Through its stakes in liquefaction plants located in Nigeria, Qatar,
Australia, Norway, Oman, the United Arab Emirates, Yemen(2), Angola
and Russia, and its gas supply agreement with the Bontang plant in
Indonesia, the Group markets LNG in all global markets. In 2017, the
share of LNG production sold by TOTAL was 11.2 Mt compared to
11 Mt in 2016 and 10.2 Mt in 2015. 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 new
projects in Papua New Guinea and the United States and the
expansion of the Nigeria LNG plant.
In November 2017, TOTAL signed an agreement with Engie relating
to the planned acquisition of its portfolio of upstream LNG assets.
This portfolio includes stakes in liquefaction plants (in particular, in the
Cameron LNG project in the United States and in the first Idku train in
Egypt), long-term LNG sale and purchase agreements, a fleet of LNG
tankers and access rights to regasification terminals in Europe. The
transaction remains subject to the legal process of informing and
consulting the relevant employee representative bodies and approval
by the competent authorities and partners on certain contracts. The
transaction is expected to be finalized in mid-2018.
Since February 2017, TOTAL holds a stake in Tellurian Inc. (20.53%
as of December 31, 2017), which aims to develop an integrated gas
project, from low-cost gas production in the United States to the
delivery of LNG to international markets, from the Driftwood LNG
terminal. The terminal is in the technical design phase and a permit
application was filed with the FERC (Federal Energy Regulation
Commission) in March 2017.
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), or other projects like Sabine Pass (United States). 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
Asian growth markets.
New LNG sources are expected to support the growth of the
Group’s LNG portfolio, notably in Russia (Yamal LNG), Australia
(Ichthys LNG) and the United States (train 5 of Sabine Pass LNG,
Cameron LNG and Corpus Christi). Furthermore, the Group is
developing new LNG markets by promoting LNG
import
infrastructure projects.
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 three long-term
chartered LNG tankers: since 2006, the Arctic Lady, with a capacity
of 145,000 m³; since 2011, the Meridian Spirit, with a capacity of
165,000 m³, primarily for the transport of volumes from Snøhvit in
Norway; and, since the second half of 2017, the SK Audace, with a
capacity of 180,000 m3. The SK Audace is chartered to fulfill TOTAL
Gas & Power Limited’s purchasing obligations in Australia and the
United States. Two additional vessels will be delivered in 2018.
Trading
2.2.1.2
In 2017, TOTAL continued its downstream strategy 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 on a
long-term contractual basis and to markets open to international
competition (with short-term contracts and spot sales).
The Group also has operations in electricity trading, marketing of LPG
and petcoke and is also active in the marketing of sulfur. In 2016, the
Group stopped its coal trading activities.
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.
The trading teams are located in London, Houston, Geneva and
Singapore.
(1)
(2)
Publicly available information: upstream and downstream LNG portfolios in 2017.
The Yemen LNG plant has been shut down since April 2015. For more information, refer to point 2.1.8 of this chapter.
50
REGISTRATION DOCUMENT 2017
Gas and electricity
TOTAL is pursuing gas and electricity trading operations in Europe
and North America in order to sell the Group’s production and to
supply the Group’s marketing subsidiaries and other entities.
In Europe, TOTAL traded 883 Bcf (25 Bcm) of natural gas in 2017,
compared to 887 Bcf (25.1 Bcm) in 2016 and 849 Bcf (24.0 Bcm) in
2015. The Group also traded 70.2 TWh of electricity in 2017,
compared to 49.1 TWh in 2016 and 41.1 TWh in 2015, mainly from
external sources.
In North America, TOTAL traded 426 Bcf (12.1 Bcm) of natural gas
in 2017 from its own production or from external resources
compared to 356 Bcf (10.1 Bcm) in 2016 and 441 Bcf (12.5 Bcm) in
2015.
LNG
TOTAL operates LNG trading activities through both spot sales and
long-term contracts such as those described in point 2.2.2.1 above.
Significant sale and purchase agreements have permitted appreciable
development of the Group’s activities in LNG trading, especially in the
Asian markets (China, South Korea, India, Indonesia and Japan). The
spot and long-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 2017, TOTAL purchased 59 contractual cargoes under long-term
contracts
from Qatar, Nigeria and Norway and 49 spot or
medium-term cargoes, compared to, respectively, 51 and 19 in 2016
and 64 and 20 in 2015. Deliveries from Yemen LNG have been
interrupted since April 2015.
LPG
In 2017, TOTAL traded more than 4.9 Mt of LPG (propane and
butane) worldwide, compared to 5.3 Mt in 2016 and 5.8 Mt in 2015.
Nearly 32% of these quantities came from fields or refineries operated
by the Group. This trading activity was conducted by means of seven
time-chartered vessels. In 2017, 241 voyages were necessary for
transporting the negotiated quantities, including 156 journeys carried
out by TOTAL’s
time-chartered vessels and 85 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 Mt of petcoke were sold on the
international market in 2017, compared to 1.1 Mt in 2016 and 1.1 Mt
in 2015.
TOTAL began trading in 2014 petcoke from the Jubail refinery in
Saudi Arabia. In 2017, 1.1 Mt were sold, compared to 890 kt in 2016
and 720 kt in 2015.
Petcoke is sold to cement producers and electricity producers mainly
in India, as well as in Mexico, Brazil, other Latin American countries
and Turkey.
In 2017, TOTAL sold 0.9 Mt of sulfur, mainly from its refineries’
production, compared to 0.7 Mt in 2016.
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Gas, Renewables & Power segment
2
Marketing
2.2.1.3
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. As part of its development strategy, TOTAL finalized in
September 2016 the acquisition of Belgian company Lampiris, which
is also present on the French market.
In the United Kingdom, TOTAL markets gas and electricity to the
industrial and commercial segments through its subsidiary Total Gas
& Power Ltd. In 2017, the volumes of gas sold were 151 Bcf
(4.3 Bcm), compared to 143 Bcf (4.0 Bcm) in 2016 and 140 Bcf
(4.0 Bcm) in 2015. Electricity sales were 9.1 TWh in 2017, compared
to 7.4 TWh in 2016 and 6.0 TWh in 2015.
In France, TOTAL operates in the natural gas and electricity markets
for industrial and commercial customers through its marketing
subsidiary Total Énergie Gaz, the sales of which were 67 Bcf
(1.9 Bcm) in 2017, compared to 77 Bcf (2.2 Bcm) in 2016 and 84 Bcf
(2.4 Bcm) in 2015. Electricity sales were 0.9 TWh in 2017. TOTAL
also operates on the domestic market in France through its
subsidiary Total Spring (previously known as Lampiris France).
In Germany, Total Energie Gas GmbH, a marketing subsidiary of
TOTAL, marketed 40 Bcf (1.2 Bcm) of gas in 2017 to industrial and
commercial customers, compared to 31 Bcf (0.9 Bcm) in 2016 and
31 Bcf (0.9 Bcm) in 2015. Electricity sales were 0.3 TWh in 2017.
for
industrial and commercial customers through
In the Netherlands, TOTAL operates in the natural gas and electricity
markets
its
subsidiary Total Gas & Power Nederland B.V. The volumes delivered
in 2017 were 11 Bcf (0.3 Bcm). Electricity sales were 0.2 TWh in
2017.
In Belgium, TOTAL operates on the natural gas and electricity supply
markets through its subsidiary Lampiris. The subsidiary operates in
Belgium under the Lampiris brand for the domestic market and Total
Gas & Power Belgium for industrial and commercial customers.
TOTAL is the fourth-largest gas and electricity supplier on the Belgian
market(1), with more than 319,000 gas metering points and more than
496,000 electricity metering points (B2B and B2C) at year-end 2017.
In 2017, almost 26 Bcf (0.7 Bcm) of gas was delivered, and electricity
sales were nearly 3.7 TWh.
In Spain, TOTAL markets natural gas to the
industrial and
commercial segments and electricity since 2017 through a dedicated
in Cepsa Gas
subsidiary. The Group sold
Comercializadora during 2017 third quarter. In 2017, the volumes of
gas sold were 14 Bcf (35% share equivalent to 0.4 Bcm), compared
to 100 Bcf (2.8 Bcm) in 2016 and 105 Bcf (3.0 Bcm) in 2015.
its 35% stake
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 2017, the volumes of gas sold
were 147 Bcf (4.2 Bcm), compared to 142 Bcf (4.0 Bcm) in 2016 and
128 Bcf (3.6 Bcm) in 2015.
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.
(1)
Source: Belgian national regulator statistics and benchmarks (CREG).
REGISTRATION DOCUMENT 2017
51
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Gas, Renewables & Power segment
Gas facilities
2.2.1.4
Downstream from its natural gas and LNG production activities,
TOTAL holds stakes in natural gas transport networks (refer to point
2.1.14 of this chapter) and LNG regasification terminals.
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
consolidating TOTAL’s LNG supply portfolio.
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 55 vessels in 2017 compared to 54 in 2016 and 46
in 2015.
TOTAL holds a 9.99% stake in the Dunkerque 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. The terminal received 11 vessels in
2017.
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 32 cargoes in 2017, compared to 67 in 2016 and 84 in
2015.
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 has operations covering both
LNG regasification and gas marketing and received 45 vessels in
2017, compared to 60 in 2016 and 57 in 2015.
In Côte d’Ivoire, a consortium led by TOTAL (34%, operator) has
been assigned responsibility for developing and operating a FSRU
(Floating storage and regasification unit) LNG regasification terminal in
Abidjan and a start-up scheduled in 2020.
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 part of the
regasification capacity at the Bahia LNG terminal.
Transportation and storage of natural gas
The Group holds stakes in several natural gas transportation
companies located in Brazil and Argentina.
Power generation
2.2.1.5
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 Brazil, as part of its strategic alliance with Petrobras, TOTAL could
proceed with the acquisition from Petrobras of a 50% interest in two
co-generation plants located in the Bahia area.
End of coal production and trading
2.2.1.6
Following completion of the sale in 2015 of its subsidiary Total Coal
South Africa, the Group ceased its coal production activities. In
addition, the Group ended its coal trading activities in 2016.
2.2.2
Renewable energies and energy storage
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 Sustainable Development Scenario (2°C) of
the IEA.
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 the installation of solar
facilities in the industrial/commercial and domestic segments.
In 2017, TOTAL maintained its policy of investing in low-carbon
businesses by taking an indirect stake of 23% in EREN Renewable
Energy. This company, which has been renamed Total Eren, will
enable the Group to boost its development in solar energy and break
into wind power.
In addition, the acquisition of Saft Groupe S.A. in 2016 has allowed
the Group to become a leading player on the high technology
batteries market, while examining the opportunity for development in
stationary energy storage.
Renewable energies
2.2.2.1
In 2017, TOTAL set itself the goal of achieving 5 GW of renewable
power production assets in five years, and it is implementing this
growth through its three subsidiaries SunPower, Total Solar and Total
Eren.
SunPower
TOTAL has held since 2011 a majority interest in SunPower (56.26%
as of December 31, 2017), an American company listed on Nasdaq
and based in California.
integrated player, SunPower operates over the entire
As an
photovoltaic solar power value chain. Upstream,
it designs,
manufactures and supplies highly-efficient cells and panels that are
among the best-performing on the market. Downstream, SunPower
is mainly active in distributed generation (domestic, industrial and
commercial).
SunPower had a cell production capacity of almost 1,200 MW/y at
year-end 2017. The cells are assembled into solar panels in plants
located mainly in Mexico and France. To enlarge its commercial
offering, SunPower has marketed since 2016 a new range of panels
to target the most competitive market sectors while continuing to
hold a technological edge over its competitors. Currently, SunPower
is finalizing the development of the next generation of its highly
efficient technology, which significantly reduces costs while retaining
the best performance on the market.
52
REGISTRATION DOCUMENT 2017
SunPower markets its panels worldwide for applications ranging from
residential and commercial roof tiles to solar power plants.
In 2017, the photovoltaic market remained very dynamic, with
estimated growth of +30% of newly installed capacities(1).
SunPower installed more than 1.4 GW in 2017 compared to 1.3 GW
in 2016 and 1.2 GW in 2015. In 2017, SunPower completed the
construction of the El Pelicano solar farm in Chile (111 MWp) and the
Gala solar farm in the United States (69 MWp).
SunPower is one of the leading players in the United States on the
residential, industrial and commercial rooftop markets, and is
developing smart energy offerings (a combination of photovoltaic
solar power, storage and other services) and flexible products
opening the way for new applications (easy to install ultra-light panels
that can be used on all buildings, etc.).
SunPower held, as of December 31, 2017, a 36.5% stake in the
company 8point3 Energy Partners, initially set up with its American
partner First Solar. In April 2017, First Solar announced its intention to
sell its shares in the company. In early 2018, First Solar and
SunPower have agreed to sell their stake in 8point3 Energy Partners,
to energy investment firm Capital Dynamics, Inc., which has already
an existing portfolio of solar and wind assets. The transaction could
be completed in the second or third quarter of 2018 subject to
conditions precedents being met and regulatory authorizations
obtained.
At the end of 2017 in the United States, the International Trade
Commission (ITC) acknowledged that the import of low-priced panels
from Asia was detrimental to certain companies in the sector (Suniva
and Solar World) and recommended that customs barriers be set up
on all imports, in the form of tariffs or quotas. On January 23, 2018,
the American administration decided to set custom tariffs on
polysilicium imported cells or panels. The tariff is 30% on the first year
and will decrease by 5% per year during the three following years.
However, such tariff shall apply only when a 2.5 GW annual
importation quota is reached.
Total Solar
Since 2017, Total Solar, a wholly-owned subsidiary of the Group,
conducts TOTAL’s own solar development activities with a view to
accelerating growth in the downstream portion of the value chain and
increasing solar electricity sales.
Total Solar is focused on two market segments:
(cid:142)
(cid:142)
decentralized photovoltaic systems aimed at
industrial or
commercial customers (B2B) entering into private PPAs (power
purchase agreements); and
ground-mounted solar power plants in targeted geographical areas
such as Europe, the Middle East, Japan and South Africa.
Total Solar has an installed capacity of 300 MWp (100% equivalent)
with the following assets: Shams in Abu Dhabi (20%, total capacity
110 MWp), PV Salvador in Chile (20%, total capacity 70 MWp), Prieska
in South Africa (27%, total capacity 86 MWp), Nanao in Japan (39%,
total capacity 27 MWp) and La Mède in France (100%, total capacity 7
MWp). Total Solar aims to increase installed capacity by approximately
30% in 2018.
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Gas, Renewables & Power segment
Total Eren
In September 2017, TOTAL announced that it had signed an
agreement with EREN Renewable Energy that will enable the Group
to accelerate its development in renewable power generation. Under
the agreement, TOTAL holds, since December 2017, an indirect
stake of 23% in this company, and the Group may take control of it
after a period of five years. EREN Renewable Energy has been
renamed Total Eren.
Total Eren owns a diversified set of assets (mainly in solar and wind
power) representing a gross installed capacity of 650 MW in
operation or under construction around the world. Its aim is to reach
an overall installed capacity of more than 3 GW worldwide by 2023.
This acquisition thus supplements the Group’s portfolio of businesses
in the renewable energy sector, particularly solar, where Total Eren’s
priority strategy will be growth in emerging countries with abundant
solar resources and increasing demand for electricity, enabling high
project profitability.
New solar technologies
In order to strengthen its technological leadership in the crystalline
silicon value chain, and in addition to its R&D cooperation with
SunPower, TOTAL partners with leading laboratories and international
research institutes. This work consists of developing and optimizing
the photovoltaic solar power chain (from cells through to power
systems and including modules) by reducing production costs and
increasing the efficiency and reliability of components. The Group is
also strengthening its expertise in solar resource and panel capacity
evaluation and prediction.
TOTAL is one of the founders and key partners of the Ile-de-France
Photovoltaic Institute (IPVF), which began operations in 2018.
Downstream, TOTAL is continuing its research efforts on new
generations of energy management and control systems
for
commercial applications in particular, in order to differentiate the
Group entities’ offerings on the electric market and to lower the cost
of energy consumed for customers.
Energy storage
2.2.2.2
Energy storage is a major challenge for the future of power grids and
a vital accompaniment to renewable energies, which is intermittent by
nature. Large-scale electricity storage is essential to promote the
growth of renewables and enable them to make up a significant share
of the electricity mix.
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 low-carbon
businesses, particularly renewable energies.
Saft is a French company founded in 1918 specializing in the design,
manufacture and marketing of high technology batteries for industry.
In 2017, Saft achieved sales of €744 million.
Saft develops 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 field of energy storage.
Building on its technological expertise, Saft is well positioned to
benefit from growth in renewable energies beyond its current
activities.
(1)
Source: BNEF.
REGISTRATION DOCUMENT 2017
53
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Gas, Renewables & Power segment
As of year-end 2017, Saft is present in 18 countries (historically in
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.
one of the founders and governing members of the organization. In
2017, the OGCI Climate Investments fund, which has access to
$1 billion over 10 years, made its first investments in the priority areas
of large-scale carbon capture, storage and valuation, reducing
methane emissions along the entire gas value chain, and improving
energy efficiency in both transportation and industry. In 2017, the
fund’s investments included in particular a project that aims to design
a large-scale gas-fired power plant with CO2 capture and storage, the
start-up Achates Power, which is developing innovative engines
capable of significantly reducing the greenhouse gas emissions
produced by vehicles, and the start-up Solidia Technologies, which is
developing an innovative cement that uses CO2 instead of water to
set concrete.
2.2.3.3
Carbon capture, use and storage
(CCUS)
With a view to promoting a new industry in the field of carbon
capture, utilization and storage, the Group is examining the possibility
of developing new businesses to enable its industrial, domestic or
electricity producing customers to capture, store, utilize or neutralize
their CO2 emissions.
TOTAL considers CCUS to be one of the key factors in combating
global warming, and is particularly interested in the emerging carbon
capture, utilization and storage value chain and the development of
new commercial and industrial models related to this.
The Group intends to participate directly or indirectly (via the OGCI
fund in particular) in large-scale pilot projects in this area. In
October 2017, TOTAL thus commenced studies with Statoil and
Shell for the development of the storage phase of the world’s first
industrial and commercial project for the capture, transport and
storage of 1.5 Mt of CO2/y emitted by three industrial sites in the Oslo
region (Norway).
Access to energy
2.2.3.4
First launched in four pilot countries in 2011, TOTAL’s solar solutions
for access to energy were distributed in 45 countries by 2017. By the
end of 2017, 2.3 million lamps and solar kits had been sold,
improving the day-to-day lives of nearly 10 million people. The
distribution channels 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.
is based on
innovative partnerships with various
The model
stakeholders: in 2017, 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.
2.2.3
Innovation and energy efficiency
Energy efficiency services
2.2.3.1
The energy efficiency services market is expected to see strong
growth in the coming years. As a result, the Group is investing in this
market, with the aim of helping customers optimize their consumption
and emissions and choose between the best sources.
In October 2017, the Group finalized the acquisition of GreenFlex, a
French company founded in 2009 that has over 600 customers.
GreenFlex employs around 200 people and recorded sales of
€358.6 million at year-end 2017, compared to €235.5 million at
year-end 2016.
This acquisition enables the Group to speed up the development of
its offerings on the energy efficiency market, alongside the growth of
its subsidiaries BHC Energy (France) and Tenag (Germany).
It is fully in line with the Group’s strategy for growth in the energy
performance sector, in priority in five major European countries
(France, Germany, Belgium,
the United
Kingdom).
the Netherlands and
The Group offers its customers integrated solutions (products and
services) for responsible energy use. Due to the expertise of its
subsidiaries GreenFlex, BHC and Tenag, it is able to provide services
to improve energy and environmental performance to industrial,
commercial and service companies, mainly in Europe but also in
Africa and the Middle East on an ad hoc basis. The services offered
for
include energy strategy analysis and consulting, support
implementing actions
improve energy and environmental
performance, engineering, installation and funding of assets that
contribute to energy efficiency, as well as the supply of digital
solutions for monitoring and controlling energy consumption and
production and environmental impacts.
to
Total Energy Ventures
2.2.3.2
Through its venture capital company Total Energy Ventures (TEV), the
Group supports
that offer
technologies or innovative business models in areas such as
renewable energies, energy efficiency and flexibility management,
energy storage, sustainable mobility, etc.
the development of companies
For example, in 2017, TEV acquired a stake in two sustainable
mobility companies, Xee, an open platform for the collection,
processing and management of data transmitted by connected cars,
and Ontruck, a platform that optimizes the transport of goods by
road.
TEV also operates through independent investment funds. An
example of this is the investment fund managed by the Oil and Gas
Climate Initiative (OCGI), an organization that brings together 10 of
the world’s biggest gas and oil operators with the aim of sharing
experiences, promoting progress in technical solutions and acting as
a catalyst for important actions to support changes in the energy mix
while taking into account the challenges of climate change. TOTAL is
54
REGISTRATION DOCUMENT 2017
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Refining & Chemicals segment
2.3
Refining & Chemicals segment
Refining & Chemicals is a large industrial segment that encompasses
refining, base petrochemicals
(olefins and aromatics), polymer
derivatives (polyethylene, polypropylene, polystyrene and hydro-
carbon resins), the transformation of biomass and the transformation
of elastomers (Hutchinson). This segment also includes the activities
of Trading & Shipping.
2
Among the
world’s
10 largest
integrated
producers(1)
Refining
capacity of
2.0 Mb/d
at year-end 2017
One of the
leading traders
of oil and refined
products worldwide
$1.6 billion
of organic
investments(2)
in 2017
47,985
employees
present
2015 and 2016 data have been restated in line with the new Group organization fully effective since January 1, 2017 (refer to point 1.6.2 of
chapter 1). (1) (2)
Refinery throughput(a)
(Kb/d)
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
2,023
1,965
1,827
1,523
1,471
1,391
500
494
436
2015
2016
2017
Europe
Rest of world
(a)
Includes share of TotalErg (sold in 2018), as well as refineries in Africa
and the French Antilles (sold in 2015) that are reported in the Marketing &
Services segment.
Refinery throughput decreased by 7% for the full-year 2017
compared to 2016 as a result of the definitive ending of distillation
capacity at La Mède (France) and Lindsey (UK) and the temporary
shutdown of the Port Arthur refinery in the US due to Hurricane
Harvey.
(1)
(2)
Based on publicly available information, production capacities at year-end 2016.
Organic investments = net investments, excluding acquisitions, divestments and other operations with non-controlling interests (refer to point 2.5.1
of this chapter).
REGISTRATION DOCUMENT 2017
55
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Refining & Chemicals segment
2.3.1
Refining & Chemicals
Refining & Chemicals includes refining, base petrochemicals (olefins
and aromatics), polymer derivatives (polyethylene, polypropylene,
polystyrene and hydrocarbon resins), biomass conversion and
elastomer processing (Hutchinson). The electroplating chemistry
(Atotech) and adhesives (Bostik) activities were sold in 2017 and
2015, respectively.
The volume of its Refining & Chemicals activities places TOTAL
among the top 10 integrated chemical producers in the world(1).
integrates a constant
The strategy of Refining & Chemicals
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:
(cid:142)
(cid:142)
(cid:142)
improving competitiveness of refining and petrochemicals activities
by making optimal use of industrial means of production and
concentrating investments on large integrated platforms;
developing petrochemicals in the United States and the Middle
East by exploiting the proximity of cost-effective 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.
2.3.1.1
Refining and petrochemicals
TOTAL’s refining capacity was 2,021 kb/d as of December 31, 2017,
compared to 2,011 kb/d at year-end 2016 and 2,247 kb/d at
year-end 2015. TOTAL has equity stakes in 18 refineries (including 9
operated by companies of the Group), located in Europe, the Middle
East, the United States, Asia and Africa(2).
The Refining & Chemicals segment manages refining operations
located in Europe, the Middle East, the United States, Asia and
Africa(3) with a capacity of 1,977 kb/j at year-end 2017, i.e., 98% of
the Group’s total capacity.
The petrochemicals businesses are located mainly in Europe, the
United States, Qatar, South Korea, Saudi Arabia and the United Arab
Emirates. 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. In addition, 2017 saw the completion of the major
investment project launched in 2013 on the Antwerp platform in
Belgium with the aim of improving the site’s conversion rate and
increasing the flexibility of the steam crackers, as well as the
continuation of the project to convert the La Mède refinery to a
bio-refinery.
Activities by geographical area
Europe
TOTAL is the second largest refiner in Western Europe(4).
Western Europe accounts for 72% of the Group’s refining capacity,
i.e., 1,454 kb/d at year-end 2017, same as at year-end 2016 and
1,699 kb/d at year-end 2015, 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 a stake in the Vlissingen
refinery (Zeeland) in the Netherlands. In the 1st quarter of 2018, the
Group sold its stake in TotalErg, which held a stake in the Trecate
refinery in Italy.
(polyolefins, polystyrene), and
The Group’s main petrochemical sites in Europe are located in
Belgium, in Antwerp (steam crackers, aromatics, polyethylene) and
Feluy
in Carling
(polyethylene, polystyrene, polypropylene compounds), Feyzin (steam
cracker, aromatics), Gonfreville (steam crackers, aromatics, styrene,
polyolefins, polystyrene) and Lavéra (steam cracker, aromatics,
polypropylene). Europe accounts
the Group’s
petrochemicals capacity, i.e., 10,293 kt at year-end 2017, compared
to 10,383 kt at year-end 2016 and 10,394 kt at year-end 2015:
for 48% of
in France,
(cid:142)
In France, the Group continues to improve its operational
efficiency against the backdrop of stagnation in the demand for
petroleum products in Europe.
In 2017, 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 around €275 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 is
expected to allow TOTAL to respond to the growing demand for
biofuel in Europe as from the second half of 2018. Other activities,
such as a logistics and storage platform, a solar energy farm and a
training center were developed on the site in 2017, and an
AdBlue(5) production plant is expected to be completed in 2018.
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. Work on the project is expected to begin in 2018.
In petrochemicals, the Group reconfigured the Carling platform in
Lorraine. Steam cracking ended in October 2015 and new
hydrocarbon resin and compound polypropylene production units
were commissioned in 2016.
(1)
(2)
(3)
(4)
(5)
Based on publicly available information, refining and petrochemicals production capacities at year-end 2016.
In the 1st quarter of 2018, the Group sold its stake in TotalErg, which held a stake in the Trecate refinery in Italy.
Earnings related to certain refining assets in Africa and to the TotalErg joint venture (sold during the 1st quarter of 2018) are integrated in the results of the
Marketing & Services segment.
Based on publicly available information, 2016 refining capacities.
Fuel additive intended for road transport and designed to lower nitrogen oxide (NOx) compound emissions.
56
REGISTRATION DOCUMENT 2017
(cid:142)
(cid:142)
(cid:142)
In Germany, TOTAL operates the Leuna refinery (100%), where a
new benzene extraction unit (approximately 60 kt/y) started up in
late 2017. 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 started up in late 2017,
with:
–
–
new conversion units in response to the shift in demand towards
lighter petroleum products with a very low sulfur content, and
a new unit to convert part of the combustible gases recovered
from
the
the
petrochemical units.
refining process
raw materials
into
for
In addition, the Group has developed a project to enable greater
flexibility on one of the steam-cracking units and has thus been
processing European ethane since May 2017;
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 focuses 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 10th ethane furnace, which was commissioned
in 2014, BTP’s cracker can produce more than 1 Mt/year of ethylene,
including more than 85% from ethane, propane and butane, which
are produced in large quantities locally.
Finally, in partnership with Borealis and Nova, TOTAL started
construction in 2017 of a new ethane cracker with an ethylene
production capacity of 1 Mt/y on the Port Arthur site for an
investment of $1.7 billion. The partners in the joint venture (TOTAL,
50%) are also considering the development of a new polyethylene
unit downstream of the cracker, in addition to the capacities of the
Bayport site, so that it has operations all along the value chain. This
integrated development will make it possible to maximize the
synergies with the existing assets at Port Arthur and Bayport.
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
has first-rate platforms in these markets, which are ideally positioned
for growth.
(cid:142)
(cid:142)
(cid:142)
(cid:142)
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Refining & Chemicals segment
technical and
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
financial
completions were reached in June 2016. This refinery, which has
an initial capacity of 400 kb/d and is situated close to Saudi
Arabia’s heavy crude oil fields, should have its capacity increased
by 10% following the debottlenecking realized in early 2018 during
its first major shutdown. The refinery’s configuration enables it to
process these heavy crudes and sell fuels and other light products
that meet very 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.
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.
2
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 and the steam cracker now
has an ethylene production capacity of 1.1 Mt/y and a styrene
production capacity of 1.1 Mt/y. The EVA2 and ARO2 units were
debottlenecked in 2016 and 2017 respectively. In 2017, the Group
favorable economic
benefited
environment.
than
totaling more
$750 million were approved in 2017 to increase the ethylene
production capacity by 30% and the polyethylene production
capacity by more than 50%.
In addition,
from these
investments
investments
in a
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 leverage the available supply of
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.
(cid:142)
In the United Arab Emirates, TOTAL has a 33.3% stake in
ADNOC Fertilizers, which operates a plant producing 2 Mt/y of
urea in Ruwais.
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%).
REGISTRATION DOCUMENT 2017
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2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
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)
Nine refineries operated by Group companies
Normandy-Gonfreville (100%)
Provence-La Mède (100%)
Donges (100%)
Feyzin (100%)
Grandpuits (100%)
Antwerp (100%)
Leuna (100%)
Lindsey-Immingham (100%)
Port Arthur (100%) and BTP (40%)(c)
SUBTOTAL
Other refineries in which the Group has equity stakes(d)
TOTAL
2017
2016
2015
253
-(b)
219
109
101
338
227
109
202
1,558
463
2,021
253
-(b)
219
109
101
338
227
109
202
1,558
453
2,011
247
153
219
109
101
338
227
207
198
1,799
448
2,247
(a)
(b)
(c)
(d)
Capacity data based on crude distillation unit stream-day capacities under normal operating conditions, less the average impact of shutdowns for regular repair
and maintenance activities.
Crude oil processing stopped indefinitely at the end of 2016.
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.
TOTAL’s share as of December 31, 2017 in the 10 refineries in which it has equity stakes ranging from 7% to 55% (one each in the Netherlands, China, Korea, Qatar,
Saudi Arabia and 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
2017, TOTAL also sold a portion of its interests in the SIR refinery in Côte d'Ivoire and SAR refinery in Senegal. 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)
Gasoline
Aviation fuel(b)
Diesel and heating oils
Heavy fuels
Other products
TOTAL
2017
283
196
726
115
438
1,758
2016
324
182
795
140
430
1,871
2015
346
190
825
131
439
1,931
(a)
(b)
For refineries not 100% owned by TOTAL, the production shown is TOTAL’s equity share in the site’s overall production.
Avgas, jet fuel and kerosene.
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REGISTRATION DOCUMENT 2017
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Refining & Chemicals segment
Utilization rate
The tables below set forth the average utilization rates of the Group’s refineries:
On crude and other feedstock(a)(b)
On crude(a)(c)
(a)
(b)
(c)
Including equity share of refineries in which the Group has a stake.
Crude + crackers’ feedstock/distillation capacity at the beginning of the year.
Crude/distillation capacity at the beginning of the year.
Petrochemicals: breakdown of TOTAL’s main production capacities
2017
91%
88%
2016
87%
85%
2015
88%
86%
2
As of December 31,
(in kt)
Olefins(b)
Aromatics(c)
Polyethylene
Polypropylene
Polystyrene
Other(d)
TOTAL
2017
2016
2015
Europe
North America
Middle East(a) Worldwide Worldwide Worldwide
Asia and
4,283
2,903
1,120
1,350
637
-
10,293
1,525
1,512
445
1,200
700
-
5,382
1,571
2,494
792
400
408
63
7,378
6,909
2,357
2,950
1,745
63
7,468
6,844
2,338
2,950
1,745
63
7,433
6,783
2,338
2,950
1,745
63
5,727
21,401
21,407
21,312
(a)
(b)
(c)
(d)
Including interests in Qatar, 50% of Hanwha Total Petrochemicals Co. Ltd. and 37.5% of SATORP in Saudi Arabia.
Ethylene + propylene + butadiene.
Including monomer styrene.
Mainly monoethylene glycol (MEG) and cyclohexane.
Developing 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.
Regarding 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 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) from sugar. In 2017, the Group thus set up a joint
venture with Corbion for the production and marketing of PLA from a
site in Thailand containing existing lactide units and PLA units under
construction.
Biomass to fuels
In Europe, TOTAL produces biofuels, notably hydrotreated vegetable
oils (HVO) for incorporation into diesel, and ether produced from
ethanol and isobutene (ETBE) for incorporation into gasoline.
As part of the La Mède refinery transformation program announced in
2015, the Group will build the first bio-refinery in France. Work began
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.
TOTAL engaged in extensive research activity in 2017, which
targeted the emergence of new biofuel solutions. The BioTFuel
consortium’s construction of a pilot demonstration unit on the
Dunkirk site led to the commencement in 2017 of a gasification test
program for synthesis of biomass into fungible, sulfur-free fuels.
Biotechnologies and the conversion of biomass
TOTAL is exploring a number of opportunities for developing biomass
and 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 the Toulouse White
Biotechnology consortium) and industrial partners (Amyris Inc. and
Novogy in the United States). In addition, TOTAL holds an interest in
Amyris Inc. (approximately 11% as of December 31, 2017), an
American company listed on Nasdaq.
Via its R&D platform at Solaize (France), TOTAL is developing new
biocomponents
retrosynthesis
methodologies.
implementing
predictive
by
In the longer term, the Group is also studying the potential for
developing a cost-effective phototrophic process for producing
biofuels through bioengineering of microalgae and microalgae
cultivation methods. It has several European partners in this field
(CEA, Wageningen).
REGISTRATION DOCUMENT 2017
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2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Refining & Chemicals segment
2.3.1.2
Elastomer processing (Hutchinson)
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
2.3.2
Trading & Shipping
The activities of Trading & Shipping are focused on serving the
Group’s needs, and notably include:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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.
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 88 production sites across
the world (of which 55 are located in Europe and 18 in North
America) and 35,860 employees at December 31, 2017.
Trading
2.3.2.1
In 2017, oil prices dipped during the first half of the year before
rallying in the second part of the year, resulting in backwardation(1)
structures on most oil indexes. 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 6.1 Mb/d in 2017, compared to 5.6
Mb/d in 2016 and to 5.2 Mb/d in 2015.
Trading’s crude oil sales and supply and petroleum products sales(a)
(kb/d)
Group’s worldwide liquids production
Purchased from Exploration & Production
Purchased from external suppliers
TOTAL OF TRADING’S CRUDE SUPPLY
Sales to Refining & Chemicals and Marketing & Services segments
Sales to external customers
TOTAL OF TRADING’S CRUDE SALES
PETROLEUM PRODUCTS SALES BY TRADING
(a)
Including condensates.
2017
1,346
1,120
2,870
3,990
1,527
2,463
3,990
2,154
2016
1,271
1,078
2,444
3,522
1,590
1,932
3,522
2,105
2015
1,237
935
2,336
3,271
1,668
1,603
3,271
1,961
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 8.7 of chapter 8).
All of TOTAL’s Trading activities are subject to strict internal controls
and trading limits.
(1)
Backwardation is the price structure where the prompt price of an index is higher than the future price.
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REGISTRATION DOCUMENT 2017
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Refining & Chemicals segment
Shipping
2.3.2.2
The transportation of crude oil and petroleum products necessary for
the activities of the Group is coordinated by Shipping. These
requirements are fulfilled through the balanced use of spot and
time-charter markets. 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 2017, Shipping chartered approximately 3,000 voyages (slightly
higher than 2016 and 2015) to transport 133 Mt of crude oil and
petroleum products, compared to 131 Mt in 2016 and 126 Mt in
2015. On December 31, 2017, the mid- and long-term chartered
fleet amounted to 59 vessels (including 7 LPG vessels), compared to
59 in 2016 and 55 in 2015. Shipping only charters vessels satisfying
the best international standards and the average age of the fleet is
approximately seven 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.
2
REGISTRATION DOCUMENT 2017
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2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Marketing & Servrr ices segment
2.4
Marketing & Services segment
The Marketing & Services segment includes worldwide supply and marketing activities of oil products and services.
#2
major in
retail outside
North America(1)
#4
distributor
of inland
lubricants(2)
16,630
branded service
stations(3)
at year-end 2017
$1.0 billion
of organic
investments(4)
in 2017
20,932
employees
present
2015 and 2016 data have been restated in line with the new Group organization fully effective since January 1, 2017 (refer to point 1.6.2 of
chapter 1). (1) (2) (3) (4)
2017 petroleum products sales(a)
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
(Kb/d)
1,818
1,793
1,779
1,092
1,093
1,049
726
700
730
2015
2016
2017
Europe
Rest of world
(a)
Excludes trading and refining bulk sales, including share of TotalErg (sold
in 2018).
In 2017, petroleum product sales were generally stable compared to
the previous year, with a move toward Africa and Asia where the
Group has strong growth. European sales were affected by the
divestment of mature LPG distribution activities in Belgium and
Germany.
(1)
(2)
(3)
(4)
Source IHS, number of service stations for TOTAL, BP, Chevron, Exxon and Shell.
Source IHS.
TOTAL, Total Access, Elf, Elan and AS24, including service stations owned by third parties.
Organic investments = net investments, excluding acquisitions, divestments and other operations with non-controlling interests (refer to point 2.5.1
of this chapter).
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Marketing & Servrr ices segment
2
M&S’s three main business areas are:
(cid:142)
(cid:142)
(cid:142)
Retail, with a network of more than 16,000 Group-branded
service stations. The Group is refocusing on its key markets in
Western Europe and continues to develop in Africa, where it is
present in 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 the product lines in its stores
and service stations (car wash, food services, car servicing, etc.)
notably through partnerships with other leading brands and digital
innovations. These additional offerings support customers in their
mobility by providing them with all of the products and services
they need at “one stop shop” service stations;
The production and sales of lubricants, a highly profitable sector
that accounts for a significant share of M&S’s adjusted net
operating income. TOTAL intends to pursue growth in this
business, notably in Asia, particularly by continuing to expand its
range of premium products. M&S has entered into commercial and
technological partnerships with car manufacturers. TOTAL has
41 blending plants and R&D investments enable the Group to
supply high-quality premium lubricants to its customers worldwide;
The distribution of products and services for professional
markets. Benefiting from the diversity of its product ranges and its
worldwide logistics network deployed as closely as possible to its
customers, 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). The Group markets
the Total Ecosolutions product range, made up of diverse energy
supplies and associated services to enable its customers to
optimize their energy bills and reduce their environmental footprint.
The Group also offers solutions that help its customers to manage
all their energy needs with services such as the maintenance of
on-site facilities and the optimization of consumption, particularly
through new platforms and digital innovations.
As part of its business, M&S owns stakes through its subsidiaries in
four refineries in Africa, following the sale of its minority interest in a
refinery in Gabon in 2016. With the disposal of its interest in the
TotalErg joint venture in early 2018, M&S has exited Italian refining.
2.4.1
Presentation of the segment
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 130 countries, M&S conveys TOTAL’s brand
image to its customers, both individual and professional. TOTAL’s
ambition is to be a leading brand recognized for its proximity to its
customers and the value that it brings to each of them by creating
solutions aimed at performance, energy efficiency, mobility, new
energies for mobility(1) and digital transformation. M&S promotes the
brand’s renown through significant advertising campaigns and a
strong presence on the ground, with more than 16,000 service
stations and over 200,000 people carrying the Group’s name(2)
around the world. To best meet its customers’ current and future
needs, M&S continues its efforts in R&D, which increased by 13%
between 2014 and 2017, in order to design and develop new
products, in particular for the engine technologies of the future.
M&S pursues a proactive, primarily organic development strategy
focused on large growth markets. It continues to consolidate its
market share in key Western European markets(3), where it has
reached critical mass and is one of the main distributors of petroleum
products. M&S continues to develop its activities, particularly in
Africa, where it is the market leader(4), and in Asia. In 2017, organic
investments were approximately $1 billion, stable compared to 2016,
and focused mainly on retail activity.
M&S is implementing a dynamic portfolio management strategy. In
2017, it continued to make targeted acquisitions in order to support
the development of its activities on growth and promising markets.
Having made acquisitions in Pakistan, Vietnam and the Dominican
Republic in 2015 and 2016, M&S finalized the purchase of assets in
East Africa (Kenya, Uganda and Tanzania) in 2017. M&S has also
invested in alternative fuel distribution by taking over PitPoint B.V.,
one of the leading NGV(5) service station networks in Europe. It is also
expanding into large markets such as Mexico, the second largest
Latin American market for petroleum product distribution(6).
In addition, in January 2018, M&S exited the fuel distribution and
commercial sales businesses in Italy by selling its interest in the
TotalErg joint venture. M&S sold its mature LPG distribution assets in
Italy, Belgium, Luxembourg and Germany. It also finalized the sale of
its stake in Société du Pipeline Méditerranée Rhône (SPMR), which
operates a network of petroleum product pipelines in the South of
France.
(1)
(2)
(3)
(4)
(5)
(6)
Electro-mobility, natural gas vehicle (NGV), hydrogen, LNG bunker.
Including owner-operators, lubricant distributors, drivers/haulers, etc.
France, Germany, Belgium, Luxembourg and the Netherlands.
Publicly available information, based on quantities sold in 2015.
NGV including compressed natural gas (CNG) and liquefied natural gas (LNG).
Source IHS.
REGISTRATION DOCUMENT 2017
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BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Marketing & Servrr ices segment
2.4.2
Sales of petroleum products
The following table presents M&S petroleum products sales(1) by geographical area:
(kb/d)
Europe
France
Europe, excluding France
Africa
Middle East
Asia-Pacific(a)
Americas
(a)
Including Indian Ocean islands.
2.4.3
Service stations
2017
1,049
519
530
431
45
173
81
The table below presents the geographical distribution of the Group’s branded(a) service stations:
As of December 31,
Europe(b)
of which France
of which TotalErg
Africa
Middle East
Asia-Pacific(c)
Americas
AS24 network (dedicated to heavy-duty vehicles)
TOTAL
(a)
(b)
(c)
TOTAL, Total Access, Elf, Elan and AS24. Including service stations owned by third-party companies.
Excluding AS24 network.
Including Indian Ocean islands.
2017
8,194
3,548
2,519
4,377
821
1,864
555
819
2016
1,093
541
552
419
55
150
76
2016
8,309
3,593
2,585
4,167
809
1,790
585
801
2015
1,092
541
551
423
85
148
70
2015
8,391
3,667
2,608
4,058
816
1,531
464
763
16,630
16,461
16,023
2.4.4
Activities by geographical area
The information below describes Marketing & Services' principle
activities presented by geographical zone and main business areas.
Europe
Retail
In Western Europe, M&S aims to optimize its activities in the
countries where it has a large market share, enabling good
profitability. It has a retail network of nearly 8,200 Group-branded
service stations(2) mainly spread throughout its key markets: France,
Belgium, the Netherlands, Luxembourg and Germany. M&S is
regaining market shares in Western Europe by developing an
innovative and diversified line of products and services.
(cid:142)
In France, the dense retail network of almost 3,500 stations
includes over 1,500 TOTAL-branded service stations, nearly 680
Total Access stations (service stations combining low prices and
high-quality fuels) and around 1,250 Elan service stations (located
mainly in rural areas).
Since its launch in 2011, Total Access enabled the Group to regain
market share of nearly 3%(3). The Group is diversifying its offering of
new energies for mobility by extending the roll-out of electric
charging points and NGV stations. TOTAL intends to create a
network of 110 TOTAL and AS24 stations offering NGV in France.
In addition, M&S has commenced a program to switch more than
500 Elan stations over to the TOTAL brand by 2019.
The Group-branded service stations enjoy close relationships with
their local customers, meeting their everyday non-fuel needs with a
multi-service, multi-product offering developed through services in
restaurants, convenience stores and car wash provided by leading
brands such as Bonjour and TOTAL Wash, as well as partnerships
tailored to local requirements.
TOTAL has interests in 28 depots in France, 7 of which are
operated by Group companies. In 2017, TOTAL took a stake in
Dépôt Rouen Petit-Couronne (DRPC).
(1)
(2)
(3)
In addition to M&S’s petroleum product sales, the Group’s sales also include international trading (1,659 kb/d in 2017, 1,690 kb/d in 2016 and 1,538 kb/d in
2015) and bulk refining sales (581 kb/d in 2017, 700 kb/d in 2016 and 649 kb/d in 2015).
Excluding AS24 network.
Company data between 2011 and 2017.
64
REGISTRATION DOCUMENT 2017
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Marketing & Servrr ices segment
Africa
Retail
TOTAL is the leading marketer of petroleum products in Africa. In the
countries in which it is present, the Group achieved an average retail
market share of nearly 18%(4) in 2017, an increase of 1.1% compared
to 2014. It is pursuing a strategy of profitable growth aiming at
outpacing market expansion.
In the zone of Africa, the retail network was made up of more then
4,500 Group-branded service stations
in 2017, spread across
40 countries. The Group has major retail networks in South Africa,
Nigeria, Egypt and Morocco.
In order to achieve its goal of gaining market share in all of the
countries where it is present in Africa, and in addition to its organic
growth strategy, TOTAL acquires independent petroleum networks in
certain countries. In 2017, the Group finalized the purchase of assets
in Kenya, Uganda and Tanzania, enabling it to strengthen its supply
and logistics activities in East Africa and boost the growth of the retail
network with nearly 100 additional service stations, notably in
Tanzania.
M&S is diversifying its offering at service stations and is deploying a
food services and
range of products and new services
convenience stores. To
is developing
this end,
partnerships, particularly with African start-ups, in order to introduce
new electronic payment solutions capable of improving customer
experience at the point of sale.
in
the Group
Lubricants
TOTAL is the leading distributor on the continent(5) and continues its
growth strategy. M&S relies in particular on its lubricant production
plants in Nigeria, Egypt and South Africa. A new production site is
under construction in Algeria.
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. TOTAL is developing innovative, low-carbon
energy solutions as part of hybrid offerings by incorporating solar
energy into its existing portfolio of products and services.
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 this
continent with a variety of packaging options. 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.
(cid:142)
(cid:142)
is the country’s
In Germany, where TOTAL
fourth-largest
operator(1) with nearly 1,200 Group-branded service stations at the
end of 2017, and in Belgium, where TOTAL is the country’s
largest operator(2) with more nearly 530 Group-branded stations,
TOTAL’s market share has increased by more than 1% in three
years.
In the Netherlands, TOTAL acquired PitPoint B.V. in 2017, in
order to further develop the Group’s low-carbon businesses
throughout Europe. This company specializes in the distribution of
new energies for mobility(3) and owns cutting-edge NGV technology
and a network of around 100 NGV stations spread throughout the
Netherlands, Germany and Belgium.
TOTAL is rolling out a dedicated offering for the growing freight
transport sector. The AS24 brand has a network of over 800 service
stations aimed at heavy-duty vehicle customers in 28 European
countries. AS24 seeks continued growth, primarily
the
Mediterranean basin and Eastern Europe and through its toll payment
card service which covers nearly 20 countries. AS24 is also
addressing the future needs of the heavy-duty vehicles sector by
diversifying its offering with the gradual introduction of NGV to its
network in France and certain other European countries. The Group’s
first service station supplying NGV in France was opened under the
AS24 brand in 2017.
in
In 2016, TOTAL also finalized the sale of its network of 450 service
stations in Turkey, while retaining its brand and lubricants business in
the country.
TOTAL is also a major player in the European market for fuel payment
cards with nearly 3.3 million cards, enabling companies of all sizes to
improve fuel cost management and access an ever-increasing
number of services. TOTAL is expanding its fuel card offering for
professional customers, with an electric charging service across
Europe and new digital applications.
Lubricants
TOTAL is pursuing its development in Europe, which is mainly
supported by its lubricant production sites in Rouen (France) and
Ertvelde (Belgium). In April 2018, a new blending plant in Russia is
expected to join the Group’s European production network.
In addition, TOTAL resumed lubricants distribution in Portugal in
January 2017. A network of Speedy service points is currently being
rolled out in Spain. In Italy, the Group will consolidate its position
following the purchase from Erg of its shares in the lubricants
business previously operated by TotalErg.
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
125,000 vehicle fleet managers. As for fuel sales (heavy fuels,
domestic fuels, etc.), they reach nearly one million customers.
(1)
(2)
(3)
(4)
(5)
Source: IHS 2015.
Source: IHS 2015.
NGV, hydrogen, electric charging points.
Company data.
Company data.
REGISTRATION DOCUMENT 2017
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2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Marketing & Servrr ices segment
Asia-Pacific & the Middle East
M&S markets its products and services in more than 20 countries in
this zone.
Retail
TOTAL has nearly 2,000 Group-branded service stations over the
Asia-Pacific & Middle East zone at year-end 2017 with service station
networks in China, Pakistan, the Philippines, Cambodia, Indonesia,
Jordan and Lebanon. The Group is also a significant player in the
Pacific islands.
The network has doubled since 2014 in the Asia-Pacific region, with
growth in Pakistan (purchase of 500 service stations finalized in
2015), the Philippines (creation of a joint venture with FilOil, increasing
its network by more than 200 stations since 2016) and China (more
than 250 stations operated via a wholly-owned subsidiary and two
joint ventures with SinoChem). TOTAL now has nearly 175 service
stations in Jordan as well as Lebanon.
TOTAL is also developing further in the area by offering its
Excellium-branded premium products, most notably in China in 2017.
Applying the concept of the “one stop shop” service station, the
Group also opened its first Café Bonjour outlet in Cambodia and is
continuing to incorporate stores and restaurants run by local partners
into its retail network.
Lubricants
The lubricants business is driving M&S’s expansion in Asia. The
capacities of the lubricant blending plants in this zone, spread over
11 production sites, increased by almost 50% between 2014 and
2016. M&S relies in particular on its lubricant production plants in
Singapore, Tianjin and Dubai, and on the premium product and
service range widely distributed by its network of Total Quartz Auto
Care service centers.
Professional markets and other specialties
TOTAL has signed several partnership agreements with industrial
customers, enabling it to expand its operations on a number of
markets, such as mining and construction, in several countries in the
zone. In particular, the Group will supply lubricants to one of the
world’s leading mining industry service providers on more than 20
mining sites mostly in Australia, Indonesia and Mongolia.
In specialty products, TOTAL confirmed its position as the number
two(1) player in the LPG market in Vietnam and continues to operate
in other markets in the region. In India, TOTAL also conducts LPG
activities, including a network of service stations providing LPG for
transportation. In bitumen sales, the Group is a PMB(2) supplier in the
country.
Americas
In retail, the Group operates on several Caribbean islands with
nearly 550 Group-branded service stations at year-end 2017.
Taking advantage of the reform and liberalization of the Mexican
energy market, TOTAL entered into a partnership in 2017 with a local
service station group and will gradually switch a network of nearly
250 service stations in Mexico over to the TOTAL brand.
In January 2016, the Group also strengthened its position in the
Americas 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. TOTAL has sold its network of nearly 20 service stations in
Costa Rica.
In lubricants and other specialty products, TOTAL is pursuing its
strategy of growth across the region, mainly in lubricants, aviation fuel
and special fluids. To strengthen its special fluids business, the Group
has built a production plant in Bayport, Texas, which has been
operational since early 2016.
2.4.5
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, and continues its technical partnerships. The
Group is notably associated with the PSA group, with which a
cooperation agreement was renewed in late 2016 relating to R&D,
business relations with the three PSA(3) brands and motor sports
(WRC, WTCC and Rallycross). In 2017, TOTAL also supplied DS
Performance with lubricants specifically developed for the Formula E(4)
championship. In addition, TOTAL will be the official supplier of fuel to
various endurance rally championships(5) for the next five years. These
partnerships demonstrate TOTAL’s technical excellence in the
formulation of fuels and lubricants under extreme conditions, subject
to requirements to reduce fuel consumption, for the engines of the
future.
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 5.2.3.4 of chapter 5). These solutions include a diversified range
of energy supplies (fuels, gas, solar and wood pellets) as well as
consumption auditing, monitoring and management services,
particularly through innovative digital platforms for its industrial
customers.
Overall, TOTAL is accelerating its digital innovation strategy in order
to develop new offerings for its customers and improve operational
efficiency. In Africa, TOTAL is continuing to develop new electronic
payment solutions that will enable it to extend its money transfer and
smartphone payment services. In Germany, TOTAL has worked with
a car sharing company to develop an electronic solution enabling a
connected car to be involved directly in fuel payment. The Total
Services mobile application has also been deployed in 44 countries.
Using a centralized digital tool, nearly 4 million customers in 12
countries can receive personalized offers under the Marketing &
Services’s customer relationship program.
(1)
(2)
(3)
(4)
(5)
Company data.
Polymer-modified bitumen.
Peugeot, Citroën, DS.
Formula E: motor racing championship using single-seater electrically-powered cars.
As from 2018, official supplier of fuel for the FIA World Endurance Championship, together with the 24 Hours of Le Mans, the European Le Mans Series and
the Asian Le Mans Series.
66
REGISTRATION DOCUMENT 2017
The Group is also continuing to carry out research into and deploy
IoT(1) applications for logistics, maintenance and security. In addition,
TOTAL offers online domestic heating oil orders in France via the
fioulmarket.fr web site, as well as its online platform Bitume Online for
fixed-price bitumen purchases aimed at its professionals customers.
For the longer term, TOTAL intends to expand into alternatives to
traditional fuels and has comprehensive commercial offerings in this
area:
(cid:142)
(cid:142)
Natural gas for land transportation: TOTAL has broken new
ground in 2017 with the purchase of PitPoint B.V., a company that
is expected to enable M&S to grow its NGV business in the
coming years. As of today, TOTAL has around 500 stations(2)
supplying NGV to private individuals and professionals in Asia,
Africa and Europe. The Group
the
development of this network to quickly establish coverage that
meets its customers’ expectations, and will initially target the
freight transportation segment on its key European markets
(Germany, Belgium, Luxembourg, the Netherlands and France).
to accelerate
intends
Electro-mobility: TOTAL expects to have more than 100 service
stations equipped with charging points
the
Netherlands, Luxembourg, France and Germany at year-end 2017.
in Belgium,
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Marketing & Servrr ices segment
(cid:142)
(cid:142)
Work to equip stations with higher power charging points on major
highways and other roads will continue in the coming years, with
the aim of covering the Group’s key European markets with a
network of charging points every 150 km. The Group will also give
its customers wider access to other operators’ charging networks
through specific partnerships.
Hydrogen: TOTAL continues to roll out hydrogen stations under
the H2 Mobility Germany joint venture that was set up in 2015 with
its partners Air Liquide, Daimler, Linde, OMV and Shell to build a
network of around 400 hydrogen stations in Germany. The joint
venture aims to create an initial network of around 100 stations by
2019, a third of which will be TOTAL stations.
Natural gas for shipping: In order to comply with new emission
standards for marine fuels that will come into effect in 2020,
TOTAL is supporting its customers through this transition with its
subsidiary Total Marine Fuel Global Solution, which offers a
diversified range of marine fuels and associated services. The
Group is expanding its product portfolio with bunker fuel, which
has a sulfur content of 0.5%, and LNG bunker. In 2017, TOTAL
signed its first partnership agreements in Europe and Asia to
promote the establishment of LNG as a marine fuel, notably with
the shipping companies CMA CGM and Brittany Ferries.
2
(1)
(2)
Internet of Things: connected objects.
Including PitPoint B.V. NGV stations and excluding NGV stations in Italy. Hosted or operated stations.
REGISTRATION DOCUMENT 2017
67
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Investments
2.5
Investments
2.5.1
Major investments over the 2015-2017 period(1)
Gross investments(a) (M$)
Exploration & Production
Gas, Renewables & Power
Refining & Chemicals
Marketing & Services
Corporate
TOTAL
Net investments(b) (M$)
Exploration & Production
Gas, Renewables & Power
Refining & Chemicals
Marketing & Services
Corporate
TOTAL
(M$)
Acquisitions
including resource acquisitions(c)
Divestments
Other operations with non-controlling interests
Organic investments(d) (M$)
Exploration & Production
Gas, Renewables & Power
Refining & Chemicals
Marketing & Services
Corporate
TOTAL
2017
12,802
797
1,734
1,457
106
16,896
2017
10,886
726
(1,086)
1,044
66
11,636
2017
1,476
714
4,239
(4)
2017
11,310
353
1,625
1,019
88
14,395
2016
16,085
1,221
1,861
1,245
118
20,530
2016
13,895
1,162
1,773
821
106
17,757
2016
2,033
780
1,864
(104)
2016
14,464
270
1,642
1,003
105
17,484
2015
24,233
588
1,875
1,267
70
28,033
2015
21,353
170
(1,619)
411
45
20,360
2015
3,441
2,808
5,968
89
2015
20,536
397
851
1,130
62
22,976
(a)
(b)
(c)
(d)
Including acquisitions and increases in non-current loans. The main acquisitions for the 2015-2017 period are detailed in Note 7 to the Consolidated Financial
Statements (point 8.7 of chapter 8).
Net investments = gross investments – divestments – repayment of non-current loans – other operations with non-controlling interests. The main divestments for the
2015-2017 period are detailed in Note 7 to the Consolidated Financial Statements (point 8.7 of chapter 8).
Resource acquisitions = acquisition 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, with a view to producing the recoverable oil and gas.
Organic investments = net investments excluding acquisitions, divestments and other operations with non-controlling interests.
In 2017, the Group’s organic investments and resource acquisitions
were $15.1 billion compared to $18.3 billion in 2016. This decrease
follows the completion and start-up of five major production growth
projects in 2016 and five in 2017. It also resulted from a successful
capital efficiency program implemented over the past years.
In the Exploration & Production segment, most of the organic
investments were geared
the development of new
toward
hydrocarbon production facilities, the maintenance of existing facilities
and exploration activities. Development
in
particular to the major projects that started up in 2017 (Moho Nord in
investments related
the Republic of the Congo, Badamyar in Myanmar, Edradour and
Glenlivet in the United Kingdom, Libra in Brazil and Yamal LNG in
Russia), the other major projects that are under construction and
expected to start up in the coming years (Ichthys LNG in Australia,
Tempa Rossa in Italy, Kaombo in Angola and Egina in Nigeria), as
well as the projects that were approved in 2017 (Absheron 1 in
Azerbaijan, Vaca Muerta in Argentina and Halfaya 3 in Iraq).
In the Gas, Renewables & Power segment, organic investments
mainly related to the development of industrial activities at SunPower
and Saft, together with Total Solar’s solar power plant projects.
(1)
Following the reorganization of the Group, which has been fully effective since January 1, 2017, the 2016 and 2015 information for the segments has been
restated on this basis (refer to point 1.6.2 of chapter 1).
68
REGISTRATION DOCUMENT 2017
In the Refining & Chemicals segment, organic investments were
made, on the one hand, in the safety and maintenance of facilities,
and, on the other hand, in projects aimed at improving the
competitiveness of plants. In 2017, the Group completed the
modernization of the Antwerp refinery in Belgium with the addition of
a new heavy fuel oil conversion unit and another petrochemical unit
and continued the transformation of the La Mède refinery in France
investments were
into a bio-refinery.
approved, including the development of petrochemical activities in
Texas (United States) as part of a joint venture with Borealis and
Nova, and a project to increase the capacity of the Daesan
integrated platform in South Korea.
In addition, significant
In the Marketing & Services segment, organic investments in 2017
mainly concerned retail networks in growth regions in Africa and Asia,
logistics and specialty products production and storage facilities.
The Group’s acquisitions in 2017 totaled $1.5 billion, including $714
million in resource acquisitions, a 25% decrease compared to
$2.0 billion in 2016.
The Group took advantage of favorable market conditions to expand
its Exploration & Production portfolio. In Brazil, TOTAL and Petrobras
finalized a major milestone in their strategic alliance with the transfer
of interests in the Iara and Lapa concessions early January 2018 and
the Group signed a contract on the development of the South Pars
11 field in Iran. Resource acquisitions were $714 million in 2017. The
Group is preparing for future growth with the announcement of the
acquisition of Mærsk Oil (finalized in March 2018), which has a
portfolio mainly located in OECD countries, and an additional 10.8%
stake in the Lake Albert project in Uganda from Tullow; in addition, it
has signed a partnership agreement with Sonatrach in Algeria.
In the frame of its integrated gas strategy, the Group has annouced
the acquisition of the majority of Engie’s upstream LNG activities(1).
TOTAL is expected to become the second-largest LNG actor in the
world as a result(2) and will be able to take benefit from a fast growing
market.
2.5.2
Major planned investments
Investments, including resource acquisitions, are expected to be
between $15 and $17 billion per year for the 2018-2020 period,
enabling the delivery of profitable future growth for the Group.
Investments in the Exploration & Production segment will largely be
allocated
to major development projects under construction,
including trains 2 and 3 of Yamal LNG in Russia, Ichthys LNG in
Australia, Kaombo in Angola, Egina in Nigeria, Libra 1 in Brazil and
South Pars 11 in Iran. Determined to take benefit from the current
favourable cost environment, the Group will launch new projects in
2018. 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 transformation of the
La Mède refinery into a bio-refinery, the construction of a side cracker
at the Port Arthur refinery in the United States and the project to
increase the capacity of the Daesan integrated platform in South
Korea are some of the major investments expected in 2018. The
Group is also examining projects for growth in Qatar and Saudi
Arabia. A significant portion of the segment’s investment budget will
also be allocated to safety and maintenance.
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
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Investments
The Group continues to pursue growth in the Gas, Renewables &
Power segment and, as part of the development of profitable
low-carbon businesses, TOTAL in 2017 acquired a 23% interest in
Tellurian Inc., with the aim of developing a low cost LNG project in
the United States.
The Group also purchased a 23% stake in EREN Renewable Energy,
renamed Total Eren, contributing to its development in low-carbon
energy production. Finally, TOTAL acquired GreenFlex, which
operates in the field of energy efficiency.
2
In the Marketing & Services segment, the Group finalized the
acquisition of a retail and supply terminal network in Kenya, Uganda
and Tanzania and signed an agreement in Mexico, the second-
largest Latin American market for petroleum product distribution(3).
TOTAL also boosted its growth in natural gas for vehicles in Europe
with the acquisition of PitPoint B.V. in 2017. In the lubricants
segment, the Group strengthened its position in Italy by finalizing in
January 2018 the purchase of Erg’s 51% stake in the TotalErg joint
venture (consequently, this joint venture has been terminated).
The Group’s divestment program of mature and non-core assets,
totaling $10 billion over the period 2015-2017, has been concluded
successfully. The divestments finalized in 2017 had a total value of
$4.2 billion, including the sale of Atotech for $2.7 billion, the sale of
the SPMR pipeline the disposal of mature assets in Gabon, the sale
of a part of the Group's interest in Fort Hills in Canada and of the
interest in the Gina Krog field in Norway. Also in Norway, the Group
announced in November 2017 the sale of its interest in the Martin
Linge field. In addition, in Italy, TOTAL finalized in January 2018 the
disposal of its interest in TotalErg’s distribution, refining and LPG
activities.
Net investments were $11.6 billion in 2017 compared to $17.8 billion
in 2016, a decrease of 35%, and $20.4 billion in 2015. This decrease
is mainly due to the discipline implemented on organic investments
and the finalization of the asset disposal program.
segment’s investment budget will be allocated to growth regions,
notably Africa, the Middle East and Asia.
The Group will continue investing to grow its Gas, Renewables &
Power businesses, as well as in R&D. The growing LNG demand
support the Group's strategy to develop along the gas value chain as
illustrated by the announced acquisition of Engie's upstream LNG
activities.
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 Note 13 to
the Consolidated Financial Statements (point 8.7 of chapter 8). The
the other
Group believes
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.
these guarantees nor
that neither
(1)
(2)
(3)
The finalization of the transaction is subject to the granting of the necessary authorizations.
Based on quantities managed, publicly available information.
Company data and publicly available information.
REGISTRATION DOCUMENT 2017
69
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Research & Development
2.6
Research & Development
In 2017, the Group invested $912 million in R&D, compared to
$1,050 million in 2016 and $980 million in 2015. There were 4,132
people dedicated to R&D activities in 2017 compared to 4,939 in
2016 and 4,248 in 2015(1).
TOTAL invested $656 million in 2017 in innovation and R&D for its oil
and gas activities(2). The expenses dedicated to these activities
increased by 2% between 2015 and 2017.
The Group has 18 R&D sites worldwide and has entered into
approximately 1,000 partnership agreements with other industrial
groups, along with academic or highly specialized research institutes.
R&D at TOTAL focuses on two major areas:
(cid:142)
(cid:142)
prioritizing the development of activities and programs that directly
impact TOTAL’s objective of becoming the responsible energy
major; and
technological breakthroughs
anticipating
to seize
opportunities for development relating to the evolution of the
energy mix.
in order
To this end, the Group is committed to optimizing R&D resources in
terms of human talent, infrastructure and regional centers of
excellence, and to working with selected partners that bring specific
and high-level skills to every project.
To achieve the Group’s 20-year ambition, the portfolio of R&D
programs is divided between transverse programs developed at all of
the R&D centers and vertical programs specific to the different
businesses.
The portfolio is aimed at:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
understanding the impact of the Group’s operations and products
on environments and ecosystems (such as water, soil, air,
biodiversity);
mastering digital and electronic technologies
(data science,
high-performance computing, artificial intelligence) applied to the
Group’s businesses;
developing and industrializing carbon capture, use and storage
(CCUS), solar and biomass technologies to help prepare for future
energy needs and to continue addressing climate issues;
acquiring knowledge and developing tools and technologies to
discover and exploit increasingly complex oil and gas resources to
meet the growing global demand for energy;
designing and producing practical, innovative and competitive
products and materials that meet customers’ needs by delivering
better performance and helping to improve energy efficiency and
reduce environmental impacts; and
mastering and using innovative technologies such as materials
sciences, nanotechnology and new analytic techniques.
In addition, each business segment is actively developing an
intellectual property activity aimed at protecting its innovations,
allowing its activity to develop, and promoting its technological assets
among its partners. In 2017, more than 200 patent applications were
filed by the Group.
2.6.1
Transverse programs
The eight transverse programs are divided into three categories:
strategic programs, support programs and anticipation programs.
(cid:142)
Strategic programs cover the following areas:
(cid:142)
(cid:142)
(cid:142)
Health, safety and environment (HSE), such as, for example, the
BIOMEM process, which is based on the use of microorganisms to
remove dissolved hydrocarbons from water used for production
(water quality, cost, weight and space reduction). Several
Exploration & Production subsidiaries have expressed an interest in
installing a BIOMEM pilot on site.
Carbon capture, use and storage (CCUS), such as the large-scale
Northern Lights research project in Norway, in which the Group is
involved alongside Shell and Statoil. The first phase of the project
relates to a storage capacity of around 1.5 Mt/y. TOTAL is also
part of TCM (Technology Center Mongstad), one of the world’s
largest carbon capture technology development center.
research program known as PEPS
Energy efficiency, through, for example, the creation by the French
National Center for Scientific Research (CNRS) and TOTAL of an
exploratory
(Projets
Exploratoires Premier Soutien) for a period of four years as from
2017. This program makes it possible to launch calls for projects
with laboratories belonging in particular to the CNRS on the topic
of energy efficiency in industrial processes. The first call for
projects led to the identification of six projects covering a wide
variety of subjects.
Gas, such as, for example, the partnership signed in late 2017
between TOTAL and GTC Technology (a major American player
that operates in petrochemical process engineering on a global
scale) to develop a process for converting natural gas into high
added-value molecules such as olefins and aromatic precursors.
Support programs cover all of the Group’s R&D activities:
(cid:142)
(cid:142)
(cid:142)
to
take into account
Digital technology, such as, for example, the creation of algorithms
and computer codes
technological
developments in high-performance computing (HPC). The two
technologies currently being studied will be three times more
energy efficient than the supercomputer Pangea, which is one of
the ten most powerful computers in the world and installed at
TOTAL’s Technical Center in Pau.
Analysis and measurements,
the
partnership with the Namur surface analysis platform in Belgium,
which was used to characterize DLC (diamond-like carbon)
coating, a world first.
for example,
including,
Understanding process and product performance (U3P), such as,
for example, analyzing corrosion issues.
forward-looking
The anticipation program
laboratories that aim to assess the impact on the Group’s businesses
of new technologies, such as nanotechnology, robotics or the
mobility of the future.
is carried out by
(1)
(2)
Figures for 2016 and 2015 concerning the Group’s R&D investments and employees were not restated following the sale of Atotech (finalized in January
2017).
Excluding R&D budgets of Hutchinson, SunPower and Saft Groupe.
70
REGISTRATION DOCUMENT 2017
2.6.2
Vertical programs
Exploration & Production segment
2.6.2.1
All of the R&D projects aim to combine environmental performance,
improved safety and economic viability of operations. A major asset
remarkable high-performance computing
for R&D
capabilities of the Pangea supercomputer developed by the Group.
lies
the
in
R&D continues its efforts in geology, with the continued goal of
optimizing geological concept modeling and improving assessment of
the potential of new sedimentary basins or new plays in known
basins.
In geophysics, R&D is also investing in efficient, low environmental
impact, low-cost breakthrough technologies to improve delineation of
promising exploration areas. The aim is to quickly obtain high-quality
3D images of the subsurface in hard-to-reach areas.
In order to improve reservoir management, R&D aims to address the
entire chain of innovations necessary to maximize reserves and field
production at a lower cost.
Operations on wells, from drilling to closure, account for a significant
share of Exploration & Production’s R&D costs. New R&D projects
are under way to improve well productivity and further increase
operational safety.
In deep offshore, R&D continued to focus on reducing development
costs through the creation of fully underwater developments.
In addition, a new project was launched in 2017 aimed at designing a
new generation of more profitable conventional developments, with
stripped-down facilities operated by robots that will no longer require
a permanent human presence.
2.6.2.2
Gas, Renewables & Power segment
Solar
The R&D effort covers the entire solar value chain, from silicon to
photovoltaic electricity management systems.
At the upstream end of the solar value chain, TOTAL is a founding
partner of the Ile-de-France Photovoltaic Institute (IPVF), an 8,000 m²
research institute with 4,000 m² of laboratories on the Paris-Saclay
campus that is expected to host more than 150 academic and
industrial researchers as of 2018. Backed by this technical platform
and a very high-quality scientific support structure, the Institute aims
to identify and develop the solar technologies of the future, more
efficiently and less costly than those currently available. TOTAL’s
solar R&D will have a private laboratory within the Institute that it uses
to provide shorter term support for technical developments by the
Group’s subsidiaries (Total Solar, Total Eren, SunPower).
At the downstream end of the solar value chain, activities are focused
on developing software tools and algorithms for intelligent electricity
production and consumption management. The solutions developed
are aimed at the domestic, commercial and industrial markets, as
well as consumers of hybrid solutions (combining several energy
sources) for facilities that may or may not be connected to the grid.
Energy storage
Energy storage R&D is more particularly carried out by the teams of
Saft Groupe (Saft). Building on the success of its nickel and primary
lithium batteries, the subsidiary has launched a development program
based on new advanced lithium-ion technologies that can be used to
manufacture more efficient products. Saft continues to invest in
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Research & Development
innovation by initiating several programs relating in particular to
research
improving
into electrochemistry, new materials and
production processes and battery management systems and
software. In addition, a significant portion of R&D work is dedicated
to creating new products to meet specific customer requirements.
Saft invests approximately 9% of its sales in R&D each year.
2
2.6.2.3
Refining & Chemicals segment
Refining & Chemicals (excluding Hutchinson)
technological differentiation of
R&D’s goal in this area is to support the medium and long-term
development of Refining & Chemicals. In doing so, it contributes to
the
the
development, implementation and promotion of new, more efficient
solutions and paves the way for the industrialization of knowledge,
processes and technologies.
this business
through
R&D places special emphasis on the three major challenges facing
Refining & Chemicals: managing
footprint;
achieving excellence in processes and operations; and developing
innovative products, including biosourced products.
the environmental
It is developing solutions to limit the impact of emissions and improve
the energy efficiency of both industrial facilities and private homes.
R&D designs technologies that will make it possible to recycle
polymers (particularly polystyrene) under acceptable conditions in
terms of end product quality, cost and environmental impact. One of
the remaining challenges is retaining the suitability of the recycled
product for use in contact with foodstuffs.
R&D is developing expertise and technologies to improve the
performance of its assets. Research is focused on the integrity,
availability and improved output of refining and petrochemicals
facilities. As a result, advanced modeling of
feedstocks and
processes is used to optimize processing from the monthly supply of
the platforms to the real-time monitoring of the facilities’ constraints.
Research conducted on catalysts and their selection is helping to
increase performance, improve stability and extend their service life at
a lower cost.
In order to take advantage of different types of feedstock, R&D
examines new processes, such as in the field of deep conversion in
refining or heavy crude processing in petrochemicals. It studies the
catalytic solutions of the future, paving the way for nanocatalysis.
The offer of innovative products is a key aspect of research on
polymers. R&D draws on its knowledge of metallocenes and
bimodality to develop different types of mass consumption polymers
that have exceptional properties allowing them to replace heavier
materials and compete with technical polymers. High added-value
niche polymers are also being developed, both in the form of blends
and composites.
The efficient use of resources is a major challenge for sustainable
development, and Refining & Chemicals’ R&D
is developing
technologies enabling more efficient use of biosourced molecules.
The aim is to produce higher added-value chemical compounds,
whether through biotechnologies or thermochemical processes.
Research in this field is focused on examining conversion processes
using vegetable oils, sugar or lignocellulose. The goal is to produce
bioplastics and biofuels and to extend the range of feedstocks that
can be used in existing facilities. R&D is also particularly mindful of
issues related to blends and product quality raised by the use of
biomolecules.
REGISTRATION DOCUMENT 2017
71
2
BUSINESS OVERVIEW FOR FISCAL YEAR 2017
Propertrr y, plant and equipment
Elastomer processing (Hutchinson)
R&D is an important factor in innovation and differentiation for
Hutchinson, which is present along the entire value chain, from
designing
thermoplastics,
composites) to incorporating connected solutions (e.g., complex
solutions, mechatronics, connected objects).
custom materials
rubber,
(e.g.,
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 a safer, more comfortable, and more responsible
mobility of the future.
reduction,
increased energy efficiency and
improved
Weight
diagnostic and control functionality are common preoccupations
across all of Hutchinson’s markets (e.g., automotive, aerospace,
defense, railways). Hutchinson designs innovative solutions that put
its customers ahead of the game, and transposes those solutions
between markets, adopting a cross-fertilization approach.
2.6.2.4
Marketing & Services segment
In 2017, the R&D activities of Marketing & Services continued to
implement its roadmap in line with its ambitions, which are focused
on reducing the environmental footprint of products, particularly CO2
emissions, and
improving the
increasing energy efficiency by
durability of customers’ equipment.
The roadmap is broken down into two areas: energy savings for
customers; and competitive advantage and new product ranges for
the consumer and professional markets, while anticipating changes in
legislation and incorporating biosourced molecules.
to comply with
The Fuel Economy range of lubricants, which now covers all fields of
(automotive, marine and manufacturing), has been
application
the
extended with new products designed
specifications of manufacturers targeted by Total Lubrifiants. The key
innovative work is focused at the top of the chain on designing and
incorporating breakthrough components in formulations. Significant
success has been achieved with the development of new lubricant
base stocks that are undergoing registration and industrialization, and
through the approval of a new viscosity improver polymer concept in
partnership with a number of academic laboratories. Further up the
chain, research
into various novel
technologies such as nanotechnology in order to maximize the
performance of future generations of Fuel Economy lubricants.
is also being carried out
A new “fluids for electric vehicles” program has been set up, together
with an internal technology watch to identify the requirements of
future forms of mobility and modes of transport for goods and
people, in order to customize future areas of research.
In the field of heavy-duty vehicles, TOTAL is involved in the FALCON
project (Flexible & Aerodynamic truck for Low CONsumption) as part
of a consortium of 12 partners led by Renault Trucks with a view to
the
developing a complete demonstration vehicle
ambitious aim of reduced fuel consumption (-13%) and therefore CO2
emissions, through innovative designs.
to validate
Several new families of engine detergent for future Total Excellium fuel
ranges have been identified as a result of academic and industrial
partnerships. Engine tests have been performed to compare the
relative performances of these new solutions and prepare for future
pilot and industrial development.
In the field of refinery additives, work is under way to improve
properties in cold temperatures, particularly for high renewable
fraction diesel fuels.
With respect to bitumen, work has been focused on designing
bitumen in solid form for easier transport and developing methods to
measure the resistance to oxidation and aging of bituminous binders.
Research has also contributed to the first industrial production runs of
a bitumen-polymer binder using a new process developed in house.
The first projects carried out by the “Chemicals and biocomponent
processes” laboratory shared by the Marketing & Services and
Refining & Chemicals segments, which opened in 2016, relate, on the
one hand, to the synthesis of renewable lubricants under an industrial
cooperation agreement, and, on the other hand, to the development
of processes to prepare biosourced hydrocarbons that can be used
in various industrial solvent applications, as monomers for polymers
or as fuel components.
In 2017, the Solaize research center in France opened its Innovation
Building, which includes an interactive showroom for unveiling major
innovations and technological advances resulting from Marketing &
Services’ research into fuels, lubricants, bitumens and special fluids.
The Asia-Pacific Technical Center based in Mumbai, India, has
continued to grow and now has dedicated teams for its areas of
expertise, namely lubricants (particularly for textiles and two-wheeled
vehicles), special fluids and fuel additives.
2.7
Property, plant and equipment
Note 7 to the Consolidated Financial Statements (point 8.7 of
chapter 8).
from
royalties
Minimum
regarding
properties, service stations, vessels and other equipment are
presented in Note 13 to the Consolidated Financial Statements (point
8.7 of chapter 8).
lease agreements
finance
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 5.
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 (Exploration & Production, Gas, Renewables & Power,
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
72
REGISTRATION DOCUMENT 2017
3
RISKS AND CONTROL
3.1
Risk Factors
3.1.1
3.1.2
3.1.3
3.1.4
3.1.5
3.1.6
3.1.7
3.1.8
3.1.9
Risks related to market environment
and other financial risks
Industrial and environmental risks
and risks related to climate issues
Risks related to critical IT systems
security
Risks related to the development
of major projects and reserves
Risks related to equity affiliates
and management of assets operated
by third parties
Risks related to political or economic
factors
Risks related to competition and lack
of innovation
Ethical misconduct and non-compliance
risks
Countries targeted by economic
sanctions
3.2
Legal and arbitration proceedings
74
74
76
78
78
79
80
81
81
81
86
3.3
Internal control and risk management
procedures
3.3.1
Fundamental elements of the internal
control and risk management systems
3.3.2
Control environment
3.3.3
Risk assessment and management
3.3.4
Main characteristics of the internal
control and risk management
procedures relating to the preparation
and processing of accounting
and financial information
3.4
Insurance and risk management
3.4.1
Organization
3.4.2
Risk and insurance management policy
3.4.3
Insurance policy
3.5
Vigilance Plan
3.5.1
Introduction
3.5.2
Severe impact risk mapping
3.5.3
Action Principles
3.5.4
Organization
3.5.5
Assessment procedures
3.5.6
Awareness and training actions
3.5.7
Whistleblowing mechanisms
3.5.8
Monitoring procedures
88
88
88
90
93
95
95
95
96
96
96
97
98
99
100
101
102
102
REGISTRATION DOCUMENT 2017
73
3
RISKS AND CONTROL
Risk Factors
3.1
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.
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 not be aware
The main internal control and risk management procedures, in
particular those relating to the preparation and processing of
accounting and financial information, are described in point 3.3 of this
chapter.
3.1.1
Risks related to market environment and other financial risks
The financial performance of TOTAL is sensitive to a number
of market environment related 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 2017, oil prices, which had strengthened progressively at the end
of 2016 notably due to the OPEC/non-OPEC agreement concluded
in November 2016, were stable during the first quarter of the year
before decreasing and reaching their lowest point in June. Prices
then continuously strengthened during the second half, notably due
to strong demand and the respect by producing countries of their
quota commitments. The market remains highly volatile.
For the year 2018, 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 $2.3 billion and annual cash flow from operations
by approximately $2.8 billion. Conversely, a decrease of $10 per
barrel in the price of Brent crude would decrease annual adjusted net
operating income by approximately $2.3 billion and annual cash flow
from operations by approximately $2.8 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 annual 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 annual 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 annual
adjusted net operating income by approximately $0.1 billion and have
a limited impact on annual 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 annual cash flow from
operations.
Market impact environment 2018(a)
Scenario retained
Brent
European Refining Margin Indicator (ERMI)
$/€
50 $/b
35 $/t
1.2 $/€
Change
+/-10 $/b
+/-10 $/t
+/-0.1 $ per €
Estimated impact
on adjusted net
operating income
Estimated impact
on cash flow
from operations
+/-2.3 B$
+/-0.5 B$
-/+0.1 B$
+/-2.8 B$
+/-0.6 B$
≈ 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 2018 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 Refining & Chemicals.
(1)
Adjusted results are defined as income at replacement cost, excluding non-recurring items and the impact of fair value changes.
74
REGISTRATION DOCUMENT 2017
RISKS AND CONTROL
Risk Factors
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.
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.
Prices for oil and natural gas may fluctuate widely due to many
factors over which TOTAL has no control. These factors include:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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;
the ability of the OPEC and other producing nations to influence
global production levels and prices;
prices of unconventional energies as well as evolving approaches
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 technologies;
regulations and governmental actions;
global economic and financial market conditions;
the security situation
international terrorist threats, wars or other conflicts;
in certain regions, the magnitude of
changes in demographics, notably 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
financial
reduced, which could materially
condition, including its operating income and cash flow.
impact the Group’s
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
the Group’s assets,
Consolidated Financial Statements (point 8.7 of chapter 8).
to Note 3
refer
to
3
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 2017, 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 2017, the Group’s refining
margins improved during the first nine months of the year before
dropping significantly in December 2017. In 2018, they could
experience some volatility depending on the evolution of the price of
crude.
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 reduce 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 oil and gas prices on
the Group’s 2017 results, financial condition (including impairments)
and outlook, refer to point 1.4 of chapter 1.
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 8.7 of chapter 8).
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Risk Factors
3.1.2
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 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 the
Group’s business and operations and minimize impacts on
third parties or the environment.
The Group has crisis management plans in place to deal with
emergencies (refer to point 3.3 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 stringent 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
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.
to
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 sites, which could diminish its productivity
and have a material adverse impact on its financial condition.
require decommissioning
Moreover, most of the Group’s activities will eventually, at site
closure,
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 8.7 of chapter 8). Future expenditures
related
in
to asset retirement obligations are accounted
accordance with the accounting principles described in the same
Note.
for
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.
terrorism or malicious acts against
Acts of
the Group’s or
contractors’ 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 additional specific risks. TOTAL’s
Exploration & Production activities are 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 Gas, Renewables &
Power, 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 concerned by declarations of
occupational illnesses.
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 (health, safety and environment) and security
management systems that seek to take all necessary measures to
reduce the related risks (refer to point 3.3.3.3 of this chapter). In
addition, the Group maintains 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 3.4 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
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Risk Factors
Laws and regulations related to climate change as well as
growing concern of stakeholders may adversely affect the
Group’s business and financial condition.
Global 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 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 a negative impact of around
5% on the discounted value of the Group’s assets (upstream and
downstream)(2). [REDACTED SECTION: CERTAIN TEXT HAS BEEN
REDACTED.] 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 2017, 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 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 2017, the price of CO2 emission allowances
stood at approximately €7.5/t CO2. The forecast for 2020 indicates
that the price could rise to approximately €15/t(3) CO2 due to the
establishment of a “market stability reserve” as from 2019. The Group
believes that the price of CO2 emission allowances could rise to at
least €30/t during phase 4 (2021-2030).
In addition, the growing concern of all stakeholders with regard to
climate change could potentially have an impact on certain external
financing of the Group’s projects or influence certain investors
involved in the oil and gas sector.
Finally, the Company and several of its affiliates have received claims
issued by public entities in certain countries in view of financing the
protective measures to be implemented in order to limit the
consequences of climate change. The Group is subject to the risk of
judicial actions in this area.
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 this
point 3.1.2 would not have a material adverse impact on its business,
financial condition, including its operating income and cash flow,
reputation or outlook, if such risks were to occur.
3
(1)
(2)
(3)
As from 2021 or the current price in a given country.
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.
Company data.
REGISTRATION DOCUMENT 2017
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Risk Factors
3.1.3
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. Integrity of IT systems could
be compromised due to, for example, technical failure, cyber-attack
(viruses, computer intrusions), power or network outages or natural
disasters. The cyber threat is constantly evolving. Attacks are
becoming more sophisticated with regularly renewed techniques as
the digital transformation amplifies exposure to these cyber threats.
The adoption of new technologies, such as the Internet of things (IoT)
or the migration to the cloud, as well as the evolution of architectures
for increasingly interconnected systems, are all areas where cyber
security is a very important issue.
As a result, the Group’s activities and assets could sustain serious
damage, services to clients could be interrupted, 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.
3.1.4
Risks related to the development of major projects and reserves
In addition, TOTAL’s ability to discover, acquire and develop new
reserves successfully is uncertain and can be negatively affected by a
number of factors, including:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
the geological nature of oil and gas fields, notably unexpected
drilling
unexpected
heterogeneities in geological formations;
conditions
including
pressure
or
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 such
regulations;
to companies not subject
economic or political risks, including threats specific to a certain
country or region, such as terrorism, social unrest or other conflicts
(refer to point 3.1.6 of this chapter);
competition from oil and gas companies for the acquisition and
development of assets and licenses (refer to point 3.1.7 of this
chapter);
increased taxes and royalties, including retroactive claims and
changes in regulations and tax reassessments; and
disputes related to property titles.
These factors could lead to cost overruns and/or 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.
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:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
economic or political risks, including threats specific to a certain
country or region, such as terrorism, social unrest or other conflicts
(refer to point 3.1.6 of this chapter);
negotiations with partners, governments,
suppliers, customers and other third parties;
local communities,
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, could
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 Exploration & Production
activities to continue to be profitable, the Group needs to replace its
reserves with new proved reserves (i.e., reserves that can be
developed and produced in an economically viable manner).
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Risk Factors
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.
available geological, technical and economic data. Consequently,
estimates of reserves are not exact measurements and are subject to
revision.
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 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 and petroleum, gas and
project engineers, who rigorously review and analyze in detail all
available geoscience and engineering data (e.g., seismic data,
facilities
electrical
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
fluids, pressures,
logs, cores,
rates,
flow
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:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
a prolonged period of low prices of oil or gas, making reserves no
longer economically viable to exploit and therefore not classifiable
as proved;
an increase in the price of oil or gas, which may reduce the
reserves to which the Group is entitled under production sharing
and risked service contracts and other contractual terms;
3
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
future
production amounts, which could adversely affect the Group’s
financial condition, including its operating income and cash flow.
indicate
lower
3.1.5
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(1) or operated by third parties. 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.
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.
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
partners or third parties.
(1)
For additional information, refer to Note 8 to the Consolidated Financial Statements (point 8.7 of chapter 8).
REGISTRATION DOCUMENT 2017
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Risk Factors
3.1.6
Risks related to political or economic factors
that are historically characterized by political, social and economic
instability.
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.
framework
TOTAL has significant exploration and production activities, and in
some cases refining, marketing or chemicals operations, in countries
whose governmental and regulatory
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.
is subject
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:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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 reassessments;
the renegotiation of contracts;
the imposition of increased local content requirements;
payment delays; and
currency exchange restrictions or currency devaluation.
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 (excluding North Africa), which represented 25% of the
Group’s 2017 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
the Group’s production of
to
hydrocarbons (refer to point 2.1.9 of chapter 2).
The Middle East and North Africa zone, which represented 22% of
the Group’s 2017 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, or Libya. 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
its nuclear
event of a dispute over
commitments or in certain other cases.
Iran’s compliance with
In South America, which represented 6% of the Group’s 2017
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 Brazil and Venezuela.
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, 2017, TOTAL held 21% of its proved reserves in
Russia, where from the Group had 12% of its combined oil and gas
production in 2017.
For additional
international economic
sanctions applicable notably to Cuba, Iran, Russia, Syria and
Venezuela, refer to point 3.1.9.1 of this chapter.
information concerning
Furthermore, in addition to current production, TOTAL is also
exploring for and developing, or is participating in the exploration
and/or development of, new reserves in other regions of the world
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Risk Factors
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.
3.1.7
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 hydrocarbon 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
requires significant
investment, notably in R&D, of which the expected impact cannot be
guaranteed.
innovation policy
3
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
increase
contamination risks, which could, as a result, limit TOTAL’s ability to
exploit innovations.
likely
to
3.1.8
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 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.
Further measures could, depending on applicable legislation (notably,
the U.S. Foreign Corrupt Practices Act, the UK Bribery Act or the
French law n° 2016-1691 dated December 9, 2016 on transparency,
the fight against corruption and modernization of the economy), be
the review and
imposed by competent authorities, such as
reinforcement of the compliance program under the supervision of an
independent third party. Generally, entities of the Group could
potentially be subject
judicial or arbitration
to administrative,
proceedings that could have a material adverse impact on the
Group’s financial condition and reputation (refer to point 3.2 of this
chapter).
3.1.9
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 Cuba, Iran, Syria and Venezuela, 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 3.1.9.1 and 3.1.9.2, respectively.
U.S. and European legal restrictions
3.1.9.1
TOTAL closely monitors applicable international economic sanctions
regimes, changes to such regimes and possible impacts on the
Group’s activities. TOTAL, ensuring compliance with applicable
sanctions, does not believe that its activities in targeted countries are
in violation of applicable economic sanctions regimes administered by
the United States and the European Union (“EU”). However,
the Group cannot assure that current or future regulations or
REGISTRATION DOCUMENT 2017
81
3
RISKS AND CONTROL
Risk Factors
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 Cuba
U.S. sanctions against Cuba prohibit any person subject to the
jurisdiction of the United States(1) from taking part in a transaction in
connection with Cuba. These sanctions prohibit, on the one hand,
the use of the U.S. dollar for almost all transactions related to Cuba,
and, on the other hand, to export all goods subject to Export
Administration Regulations(2) to Cuba with exceptions (for example,
certain medical equipment), and all Cuban good to the United States.
Cuba is not subject to European sanctions. TOTAL intends to
continue the development of its activities in Cuba.
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
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(3)) and most EU economic sanctions were
suspended(4). 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.
Iran had met
that
its
With respect to the Group’s activities conducted under the sanctions
framework that was in place prior to the entry into force of the
JCPOA, 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.
Concerning certain activities of the Group in Iran, notably the project
to develop phase 11 of the South Pars gas field for the National
Iranian Oil Company (“NIOC”)(5) according to the risked service
contract (IPC) signed in July 2017, refer to point 3.1.9.2, below.
Restrictions against Russia
international economic sanctions have been
Since July 2014,
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
is the
formally authorized by the French government, which
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 adopted economic sanctions targeting notably
PAO Novatek(6) (“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(7) (“Yamal LNG”) and Terneftegas(8). These sanctions notably
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 (duration reduced to 60 days as
from the end of November 2017). 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.
TOTAL’s activities in Russia are 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. They are also not materially
affected by restrictive measures adopted by the United States in
August 2017 relating to Russian exportation pipelines transactions.
As of December 31, 2017, TOTAL held 21% of its proved reserves in
Russia, where from the Group had 12% of its combined oil and gas
production in 2017.
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
Cuban Assets Control Regulations (CACR), 31 CFR Part. 515.
Export Administration Regulations (EAR) § 734.3.
For purposes of this chapter, “U.S. person” means any U.S. citizen and permanent resident alien wherever he/she is 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.
Certain limited U.S. and EU human rights-related and terrorism-related sanctions remain in force.
NIOC was removed on January 16, 2016 from the U.S. and EU sanctions designation lists.
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, 2017.
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%).
A company jointly owned by PAO Novatek (51%) and Total Termokarstovoye BV (49%).
82
REGISTRATION DOCUMENT 2017
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 Venezuela
In August 2017, the United States adopted economic sanctions
relating to Venezuela and certain state-owned entities, including
Petroleos de Venezuela, S.A. (“PdVSA”) as well as entities in which
PdVSA (individually or with other similarly targeted persons or entities
collectively) owns an interest of at least 50%, including Petrocedeño
S.A., a company in which the Group held an interest of 30.32% as of
December 31, 2017. These sanctions prohibit U.S. persons from
transacting in, providing financing for or otherwise dealing in debt
issued by these entities on or after August 25, 2017 of greater than
90 days maturity. Consequently, the use of the U.S. dollar for such
financing, including for Petrocedeño S.A., is effectively prohibited.
Since November 13, 2017, Venezuela has also been subject to
European sanctions, which mainly provide for the freezing of assets
of certain individuals and entities considered responsible for human
rights violates, repressive acts against civil society or attacks on
Venezuelan democracy and rule of law, as well as persons and
entities associated with them. These sanctions prohibit the Group
from entering into a commercial relationship with the persons and
entities concerned.
As of this date, the activities of TOTAL in Venezuela are not
significantly impacted by these measures.
3.1.9.2
Information concerning certain
limited activities in Iran and Syria
Information concerning TOTAL’s activities related to Iran that took
place in 2017 provided in this section is disclosed according to
Section 13(r) of the Securities Exchange Act of 1934, as amended
(“U.S. Exchange Act”). In addition, information for 2017 is provided
concerning the payments made by Group affiliates to, or additional
cash flow that operations of Group affiliates generate for, the
government of any country identified by the United States as a state
sponsor of terrorism (currently, Iran, North Korea, 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, refer to point 3.1.9.1 of this
chapter.
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 S.A. to disclose whether the Company or any of its
affiliates has knowingly engaged during the calendar year in certain
RISKS AND CONTROL
Risk Factors
to a specific authorization of
including those targeted under the
Iran-related activities,
Iran
Sanctions Act of 1996, as amended (“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
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 (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) (A) and (D), as
discussed below.
Statements in this section concerning affiliates intending or expecting
to continue described activities are subject to such activities
continuing to be permissible under applicable international economic
sanctions regimes.
3
in
Iran. TOTAL entered
Exploration & Production
Following the suspension of certain international economic sanctions
against Iran on January 16, 2016 (as described in point 3.1.9.1 of this
chapter), the Group commenced various business development
activities
into a memorandum of
understanding (“MOU”) on January 28, 2016 with 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 of a Heads of Agreement
in
November 2016 by NIOC, Total E&P South Pars S.A.S. (“TEPSP”) (a
wholly-owned affiliate), CNPC
(a
wholly-owned affiliate of China National Petroleum Company) and
Petropars Ltd. (“Petropars”) (a wholly-owned affiliate of NIOC)
concerning the development and operation of the field. These parties
then negotiated and signed a 20-year risked service contract on
July 3, 2017 (the “Risked Service Contract”) for the development and
production of phase 11 of the giant South Pars gas field (“SP11”).
The project is expected to have a production capacity of 2 Bcf/d or
400,000 boe/d including condensate, and to supply the Iranian
domestic market starting in 2021. TEPSP (50.1%) is the operator of
the SP11 project alongside CNPCI (30%) and Petropars (19.9%).
These companies entered into a joint operating agreement in
July 2017 concerning, among other things, the governance of their
obligations under the Risked Service Contract and the designation of
TEPSP as the project’s operator. A branch office of TEPSP was
opened in 2017 in Tehran for this purpose.
International Ltd.
(“HOA”) signed
(“CNPCI”)
The SP11 project is expected to be developed in two phases. The
first phase, with an estimated cost of approximately $2 billion
equivalent, consists of 30 wells and 2 wellhead platforms connected
to existing onshore treatment facilities by 2 subsea pipelines. Since
the November 2016 HOA signature, TOTAL has conducted
engineering studies on behalf of the consortium and it initiated calls
for tender during the third quarter of 2017 in order to award the
contracts required to start developing the project in early 2018. At a
later stage, once required by reservoir conditions, a second phase is
expected to be launched involving the construction of offshore
compression facilities.
(1)
TOTAL is not present in North Korea. In Sudan, other than the payment of fees related to patents, the Group is not aware of any of its activities in 2017
having resulted in payments to, or additional cash flow for, the government of that country.
REGISTRATION DOCUMENT 2017
83
3
RISKS AND CONTROL
Risk Factors
The total required investment for the SP11 project is expected to be
approximately $4 billion equivalent, of which TEPSP would finance
50.1% via equity contributions and payments in non-U.S. currency. In
the event of new or reinstated international economic sanctions, if
such sanctions were to prevent TEPSP from performing under the
Risked Service Contract, TEPSP expects to be able to withdraw from
the Contract and recover its past costs from NIOC (unless such
recovery is prevented by sanctions).
Also in 2017, the MOU entered into between TOTAL and NIOC in
January 2016 to assess potential developments in Iran (including
South Azadegan) was amended to extend the MOU’s duration and
include North Azadegan. NIOC provided TOTAL in 2017 with
field so that it could assess
technical data on the Azadegan oil
potential development of this field. Representatives of TOTAL held
technical meetings in 2017 with representatives of NIOC and its
affiliated companies and carried out a technical review of the
Azadegan (South & North) oil field 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,
TOTAL signed an MOU in 2017 with an international company to
evaluate the Azadegan oil field opportunity with NIOC.
During 2017, in connection with anticipated activities under the
aforementioned Risked Service Contract and MOUs, and to discuss
other new project opportunities, representatives of TOTAL attended
meetings with the Iranian oil and gas ministry and several Iranian
companies with ties to the government of Iran. After the signing
ceremony of the Risked Service Contract, senior management of
TOTAL attended a meeting with the President of Iran. In connection
with travel to Iran in 2017 by employees of the Group, TOTAL made
payments to Iranian authorities for visas, airport services, exit fees
and similar travel-related charges. In addition, representatives of
TOTAL had a meeting in France with the Iranian ambassador and
hosted official visits in France of representatives from the Iran Ministry
of Petroleum, NIOC and affiliates of NIOC for demonstrations of
TOTAL’s technical capabilities and expertise.
Following the signature of a confidentiality agreement in late 2016
among the Oman Ministry of Oil and Gas, NIGEC (a subsidiary of
NIOC) and a group of international companies, including TOTAL,
representatives of the Group attended meetings in 2017 with the
parties to the agreement, including NIGEC, to discuss a potential
project for the construction, operation and maintenance of a pipeline
to supply natural gas from Iran to Oman as well as to market such
gas.
Neither revenues nor profits were recognized from any of the
aforementioned activities in 2017, except that TEPSP received
payments of approximately $15 million equivalent from its partners
the
under
reimbursement of their respective shares of past costs incurred by
TEPSP under the HOA and their respective shares of the costs and
expenditures incurred in 2017 under the Risked Service Contract.
the Risked Service Contract,
including NIOC,
for
Concerning payments to Iranian entities in 2017, Total Iran BV (100%)
and TEPSP (on behalf of SP11 Project JV Partners) collectively made
payments of approximately IRR 7 billion (approximately $210,000(1)) to
(i) the Iranian administration for taxes and social security contributions
concerning the personnel of the aforementioned branch office and
residual buyback contract-related obligations, and (ii) Iranian public
entities for payments with respect to the maintenance of the
aforementioned branch office (e.g., utilities, telecommunications).
TOTAL expects similar types of payments to be made by these
affiliates in 2018 albeit in higher amounts due to increased business
development activity in Iran.
Furthermore, Total E&P UK Limited (“TEP UK”), a wholly-owned
affiliate, holds a 43.25% interest in a joint venture at the Bruce field in
the UK with BP Exploration Operating Company Limited (37%,
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%). In 2017, TEP UK liaised directly with IOC
concerning its interest in the Bruce Rhum Agreement and it provided
services to IOC under the Bruce Rhum Agreement. TEP UK is also
party to an agreement with BP whereby TEP UK shall under certain
conditions use reasonable endeavors to evacuate Rhum NGL from
the St Fergus Terminal. TEP UK conducts activities pursuant to this
agreement only when the Rhum Owners’ primary evacuation route for
Rhum NGL is not available, and subject to BP having title to all of the
Rhum NGL to be evacuated and BP having a valid OFAC license for
the activity. In 2017, the aforementioned activities generated for TEP
UK gross revenue of approximately £3.9 million and net profit of
approximately £2.3 million. TEP UK expects to continue these
activities in 2018.
Other segments
The Group does not own or operate any refineries or chemical plants
in Iran and did not purchase Iranian hydrocarbons prior to 2016 when
prohibited by applicable EU and U.S. economic sanctions (refer to
point 3.1.9.1 of this chapter).
The Group continued its trading activities with Iran in 2017 via its
wholly-owned affiliate TOTSA TOTAL OIL TRADING SA, which
purchased approximately 58 Mb of Iranian crude oil for nearly
€2.6 billion pursuant to a mix of spot and term contracts. In
connection with these purchases, CSSA Chartering and Shipping
Services SA, a wholly-owned affiliate, chartered vessels owned by an
entity with ties to the government of Iran to transport this crude oil. It
is not possible to estimate the gross revenue and net profit related to
these purchases, because most of this crude oil was used to supply
the Group’s refineries. However, approximately 6.6 Mb of this crude
oil were sold to entities outside of the Group. In addition, in 2017
approximately 14 Mb of petroleum products were bought from/sold
to entities with ties to the government of Iran. These activities
generated gross revenue of nearly €1.1 billion and a net loss of
approximately €5.7 million. The affiliates expect to continue these
activities in 2018.
Saft Groupe S.A. (“Saft”), a wholly-owned affiliate, in 2017 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 2017, this activity generated gross revenue of
approximately €3.2 million and net profit of approximately
€0.4 million. Saft expects to continue this activity in 2018.
Saft also attended the Iran Oil Show in 2017, 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 2018.
(1)
Unless otherwise indicated, currencies converted to USD in this point 3.1.9.2 were converted using the average exchange rate for fiscal year 2017, as
published by Bloomberg.
84
REGISTRATION DOCUMENT 2017
Total Eren, a company in which Total Eren Holding holds an interest
of 68.76% (TOTAL S.A. owns 33.86% of Total Eren Holding), had
preliminary discussions in 2017 for possible investments in renewable
energy projects in Iran, including meetings with ministries of the
Iranian government. Neither revenues nor profits were recognized
from this activity in 2017, and the company expects to continue this
activity in 2018.
(“NPC”), a company owned by
In relation to a non-binding MOU signed in 2016 with National
Petrochemical Company
the
government of Iran, to consider a project for the construction in Iran
of a steam cracker and polyethylene production lines, representatives
of Total Raffinage Chimie (“TRC”), a wholly-owned affiliate, made
the project with
several visits
representatives of NPC. In addition, the Iranian Ministry of Petroleum
issued in January 2017 a resolution allocating to the potential project
certain amounts of ethane, ethylene and polyethylene. This resolution
was renewed by the Ministry of Petroleum in July 2017. No revenue
or profit from these activities was recognized in 2017 and similar
activities are expected to continue in 2018.
in 2017 to discuss
Iran
to
The company Le Joint Français, a wholly-owned affiliate, sold
vehicular O-ring seals in 2017 to Iran Khodro, a company in which
the government of Iran holds a 20% interest and which is supervised
by Iran’s Industrial Management Organization. This activity generated
gross revenue of approximately €700,000 and net profit of
approximately €34,000. The company expects to continue this
activity in 2018.
In 2017,
this activity generated gross
Paulstra S.N.C., a wholly-owned affiliate, obtained in 2017 an order
from Iran Khodro to sell vehicular anti-vibration systems over a 5-year
period.
revenue of
approximately €270,000 and net profit of approximately €20,000.
Paulstra S.N.C. also sold vehicular anti-vibration systems in 2017 to
Saipa, an Iranian company in which the Industrial & Development
Organization of Iran holds a 35.75% interest. This activity generated
gross
revenue of approximately €3,000 and net profit of
approximately €900. The company expects to continue these
activities in 2018.
Hutchinson S.N.C., a wholly-owned affiliate, sold vehicular body
sealing and hoses in 2017 to Iran Khodro. This activity generated
gross revenue of approximately €2.7 million and net profit of
approximately €171,000. The company expects to continue these
activities in 2018.
Industrielle Desmarquoy S.N.C., a wholly-owned affiliate, sold
vehicular plastic sealing in 2017 to Iran Khodro. This activity
generated gross revenue of approximately €7,400 and net profit of
approximately €600. The company expects to continue this activity in
2018.
Hanwha Total Petrochemicals (“HTC”), a joint venture in which Total
Holdings UK Limited (a wholly-owned affiliate) holds a 50% interest
and Hanwha General Chemicals holds a 50% interest, purchased
nearly 44 Mb of condensates
for approximately
KRW 2,600 billion (approximately $2.3 billion). These condensates are
used as raw material for certain of HTC’s steam crackers. HTC also
chartered seven tankers of condensates with National Iranian Tanker
Company
for approximately
KRW 16 billion (approximately $14.2 million). The company expects
to continue these activities in 2018.
(NITC), a subsidiary of NIOC,
from NIOC
3
RISKS AND CONTROL
Risk Factors
six employees (“TMS”), and TRC paid in 2017 fees totaling
approximately €4,000 to
Iranian authorities related to various
patents(1). Similar payments are expected to be made in 2018.
The Company paid fees in 2017 of approximately €2,000 to Iranian
authorities related to the maintenance and protection of trademarks
and designs. Similar payments are expected to be made in 2018.
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, received, on
behalf of TOTAL S.A.,
royalty payments of approximately
IRR 24 billion (nearly $1 million(2)) from Beh Tam for such license.
These payments were based on Beh Tam’s sales of lubricants during
In 2015, royalty payments were
the previous calendar year.
suspended notably due to a procedure brought by the Iranian tax
authorities against TEPI. As of the end of 2017, no royalty payments
had been received since 2015, but the payment of outstanding
royalties in favor of TOTAL S.A. is expected in 2018. In addition,
representatives of Total Oil Asia-Pacific Ltd, a wholly-owned affiliate,
made several visits to Behran Oil during 2017 regarding the potential
purchase of 50% of the share capital of Beh Tam. As of the end of
2017, no agreement had been reached and no money was paid or
received by either company. Further discussions are expected to take
place in 2018.
Total Marketing Middle East FZE, a wholly-owned affiliate, sold
lubricants to Beh Tam in 2017. The sale in 2017 of approximately
392 t of lubricants and special fluids generated gross revenue of
approximately AED 8.1 million (approximately $2.2 million) and net
profit of approximately AED 3.7 million (approximately $1 million). The
company expects to continue this activity in 2018.
Total Marketing France (“TMF”), a company wholly-owned by TMS,
provided in 2017 fuel payment cards to the Iranian embassy and
delegation to UNESCO in France for use in the Group’s service
stations. In 2017, these activities generated gross revenue of
approximately €17,000 and net profit of approximately €1,000. The
company expects to continue this activity in 2018.
TMF also sold jet fuel in 2017 to Iran Air as part of its airplane
refueling activities in France. The sale of approximately one million
liters of jet fuel generated gross revenue of approximately €450,000
and net profit of approximately €9,500. The company expects to
continue this activity in 2018.
Total Belgium, a wholly-owned affiliate, provided in 2017 fuel
payment cards to the Iranian embassy in Brussels (Belgium) for use in
the Group’s service stations. In 2017, these activities generated
gross
revenue of approximately €1,500 and net profit of
approximately €300. The company expects to continue this activity in
2018.
Proxifuel, a wholly-owned affiliate, sold in 2017 domestic heating oil
to the Iranian embassy in Brussels. In 2017, these activities
generated gross revenue of less than €1,000 and net profit of less
than €100. The company expects to continue this activity in 2018.
Total Research & Technology Feluy, a wholly-owned affiliate, Total
Marketing & Services, a company wholly-owned by TOTAL S.A. and
(1)
(2)
Section 560.509 of the U.S. Iranian Transactions and Sanctions Regulations provides an authorization for certain transactions in connection with patent,
trademark, copyright or other intellectual property protection in the United States or Iran, including payments for such services and payments to persons in
Iran directly connected to intellectual property rights, and TOTAL believes that the activities related to the patent applications described in this point 3.1.9.2
are consistent with that authorization.
Based on an average daily exchange rate of $1 = IRR 0.000039 during 2014, as published by Bloomberg.
REGISTRATION DOCUMENT 2017
85
3
RISKS AND CONTROL
Legal and arbitration proceedings
Caldeo, a company wholly-owned by TMS, sold in 2017 domestic
heating oil to the Iranian embassy in France, which generated gross
revenue of approximately €1,100 and net profit of less than €200.
The company expects to continue this activity in 2018.
Total Lubrifiants, a company owned 99.99% by TMS (the remaining
shares being held by one employee and five non-Group individual
shareholders), received in 2017 three payments totaling €350,000
(from NITC) in payment of unpaid invoices from 2010. The company
may receive similar payments in 2018.
As a result of legal proceedings initiated in the United Kingdom by
one of its suppliers against a TOTAL S.A. affiliate based in India, Total
Oil Private Limited (“TOIPL”), TOTAL S.A. has recently concluded an
investigation into the transactions, including into the facts and
circumstances that follow. In January 2014, TOIPL received two spot
contract shipments of LPG from a supplier based in Dubai. The
vessel Scoter, which was owned by the National Iranian Tanker
Company, was used to transport one of the shipments received by
TOIPL. At the time of these transactions, India was the recipient of a
waiver pursuant to Section 1245 (d)(4)(d) of the National Defense
Authorization Act (“NDAA”). TOIPL has not paid the supplier for the
shipments due to a contract dispute. The total value of the two
contracts was $8.85 million, and the value of the shipment delivered
aboard the Scoter was approximately $7.1 million. TOIPL’s LPG is
stored in limited capacity storage facilities and contain LPG received
from multiple suppliers. Therefore, it is not possible to provide a
precise amount of gross revenue attributable to these spot contracts.
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. Taxes and contributions for public services
rendered
the
aforementioned office and its personnel are expected to be paid to
Syrian government agencies in 2018.
the maintenance of
in 2017
relation
to
in
3.2
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.
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
issued on
February 18, 2016 by the French Supreme Court to put an end to
this proceeding.
following two decisions
final and binding
the same
facts, and 15 years after
In connection with
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. The arbitral tribunal issued its
decision on June 19, 2017 and entirely dismissed this claim.
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.
TGPNA contests the claims brought against it.
A class action was launched to seek damages from these three
companies and was dismissed by a judgment of the U.S. District
court of New York issued on March 15, 2017. The claimants have
appealed this judgment.
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). The
explosion caused the death of 31 people, including 21 workers at the
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REGISTRATION DOCUMENT 2017
site, injured many others and caused significant damage on the site
and to property in the city of Toulouse.
After many years, the investigating magistrate brought charges
against Grande Paroisse and the former Plant Manager before the
Toulouse Criminal Court. On November 19, 2009, this tribunal
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.
On September 24, 2012, the Court of Appeal of Toulouse declared
criminally responsible and convicted Grande Paroisse and the former
Plant Manager.
On January 13, 2015, the French Supreme Court (Cour de cassation)
fully quashed the decision of September 24, 2012. The case was
referred back to the Court of Appeal of Paris, which, on October 31,
2017, convicted Grande Paroisse and the former Plant Manager.
Both have decided to appeal this decision before the French
Supreme Court (Cour de cassation).
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 €11.9 million reserve
remains booked in the Group’s Consolidated Financial Statements as
of December 31, 2017.
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 other 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
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
recommend possible
Group’s compliance program and
improvements.
fine and civil compensation
to
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
3
RISKS AND CONTROL
Legal and arbitration proceedings
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. The hearing is expected
to take place during the fourth quarter of 2018.
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.
On February 20, 2018, the Court of Appeal of Potenza recorded the
termination of the proceedings directed towards the four employees
prosecuted for corruption because of the expiration of the statute of
limitation.
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). On March 14, 2018, the French Supreme Court
rejected the appeal.
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Internal control and risk management procedures
3.3
Internal control and risk management procedures
The following information was prepared with the support of several
functional divisions of the Company, and in particular the Audit &
Internal Control, Legal and Finance Divisions. It was examined by the
Audit Committee, then approved by the Board of Directors.
3.3.1
Fundamental elements of the internal control and risk management
systems
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 divisions 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.
3.3.2
Control environment
Integrity and ethics
TOTAL’s control environment is based primarily on its Code of
Conduct, which sets forth its priority actions in terms of safety,
security, protection of health and the environment, integrity and
respect for human rights. The principles of the Code of Conduct are
set forth in a number of guides, such as the Business Integrity Guide
and the Human Rights Guide. These documents are distributed to
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. Similarly, a Financial Code of Ethics
sets forth the obligations applicable to 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.
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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.
risk management system draws on
the main
The Group’s
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.
The principles of control fit into the framework of the rules of
corporate governance. In particular, these rules task the Board of
Directors’ Audit Committee with monitoring the efficiency of the
internal control and risk management systems and of the internal
audit performed to assess the risk management systems at all levels
of
their
improvement. The Audit Committee also monitors the process of
producing accounting and financial information, in order to guarantee
its integrity.
the organization and make
recommendations
for
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 Audit & Internal
Control Division, which was composed of 70 people in 2017 and
carried out more than 150 internal audits.
As a priority of General Management, the Group deploys an ethics
policy and compliance programs, in particular for the prevention of
corruption, fraud and competition law infringement. These programs
include reporting and control actions (review and audit missions).
Assessments of ethics are also conducted (refer to point 5.3.5.2 of
chapter 5). In these areas, the Group also relies on the Compliance
network and the Ethics Committee, the role of which is to listen and
provide assistance.
Structures, authorities and responsibilities
General Management ensures that the organizational structure and
reporting lines plan, execute, control and periodically assess the
Group’s activities. It 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 has also defined central responsibilities that cover the
three lines 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
implementation and
effectiveness and assist operational employees, and (3) internal
auditors who,
reports, provide
their
recommendations to improve the effectiveness of the system.
internal control systems, verify
internal control
through
their
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, in accordance with
the Group’s instructions, clear rules applicable to its own scope.
Policies and procedures
TOTAL has a framework of Group standards that are completed by a
series 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 Group Technology Committee, frameworks for each
business segment, and a specific framework for each significant
operational entity.
The main applicable procedures regarding finance at Group level
cover acquisitions and sales, capital expenditure, financing and cash
management, budget control and financial reporting. Disclosure
controls and procedures concerning information to be published are
in place (refer to point 3.3.4 below). At the operating levels, these
procedures mainly pertain to 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 expenditures, production, sales,
oil and gas trading, inventories, Human Resources, financing and
cash management, and account closing process.
Training and employee retention
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.
Job descriptions within the Group’s various entities define the
competencies and expertise required for employees to effectively
carry out their functions.
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 5.1 of chapter 5).
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
for designing and deploying specific
entities are
responsible
Internal control and risk management procedures
RISKS AND CONTROL
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 Corporate Audit & Internal Control Division pursues a continual
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.
Control activities and assessment
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 of internal audits and its Code
of Conduct. The Group’s Audit & Internal Control Division also
third-party auditors and provides
conducts
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.
joint audits with
The Group regularly examines and assesses the design and
effectiveness of the key operational,
information
technology controls related to internal control over financial reporting,
in compliance with the Sarbanes-Oxley Act. In 2017, this assessment
was performed with the assistance of the Group’s main entities and
Audit & Internal Control Division. The system used covers:
financial and
(cid:142)
(cid:142)
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.
These two categories of entities, which include the central functions
of the business segments and the Holding, account for approximately
80% and 10%,
the financial aggregates in the
Group’s Consolidated Financial Statements.
respectively, of
3
The statutory auditors also review the internal controls that they deem
necessary as part of their certification of the financial statements. In
2017, 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
risk
management procedures.
information presented on
internal control and
the
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 2017. The Audit Committee also meets with 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 Group’s
Audit & Internal Control Division, monitor their implementation closely.
Based on the internal reviews, General Management has reasonable
assurance of the effectiveness of the Group’s internal control.
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Internal control and risk management procedures
3.3.3
Risk assessment and management
General principles
3.3.3.1
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.
The Group implements a risk-management system that is an
essential factor in the deployment of its strategy, based on
responsible risk-taking.
This system relies on a continuous process of identifying and
analyzing risks in order to determine those that could prevent the
attainment of TOTAL’s goals.
internal and external
The Executive Committee, with the assistance of the Group Risk
Management Committee (GRMC), is responsible for identifying and
analyzing
the
achievement of the Group’s objectives. The main responsibilities of
the GRMC include ensuring that the Group has a map of the risks to
which it is exposed and that efficient risk management systems are in
place. The GRMC’s work focuses on continuously improving risk
awareness and the risk management systems.
that could
impact
risks
Risk mapping, which has been carried out since the 2000s, is a
dynamic process that has taken shape over the years. The Group’s
risk map is included in the inputs of the audit plan, which is based on
an analysis of the risks and the risk management systems, together
with the work of the GRMC.
The GRMC relies on the work carried out by the business segments
and functional divisions, which concurrently establish their own risk
mapping. The business segments 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 divisions.
Regarding commitments, General Management exercises operational
control over TOTAL’s activities through the Executive Committee’s
approval of
that exceed defined
thresholds. The Risk Committee is tasked with reviewing these
projects in advance, and in particular verifying the analysis of the
various associated risks.
investments and expenses
3.3.3.2
Implementation of the
organizational framework
The Group Risk Management Committee (GRMC)
The GRMC is chaired by a member of the Executive Committee, the
Group’s Chief Financial Officer, and includes the Senior Vice
Presidents of the corporate functions together with the chief
administrative officers or chief financial officers of the business
segments. The Chief Financial Officer attends all meetings of the
Board of Directors’ Audit Committee, thus strengthening the link
between the GRMC and the Audit Committee.
The GRMC meets six times a year. At each meeting, the participants
share any potential risks they have identified and presentations are
given on one or more risk-related topics, during which the members
of the GRMC are invited to cast a critical eye over the subject,
question the work done and, if applicable, provide additional
information or clarification in order to enhance the understanding of
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REGISTRATION DOCUMENT 2017
the risk and improve the risk management systems. The GRMC can
request that actions be taken.
The work of the GRMC is led by the Audit & Internal Control Division,
which assists contributors in preparing the presentations and acts as
the committee’s secretary. In this capacity, the Audit & Internal
Control Division reports regularly on the work of the GRMC to the
Executive Committee, and once a year to the Audit Committee in the
presence of the Executive Committee member who chairs the
GRMC.
The Risk Committee
The Risk Committee is chaired by a member of the Executive
Committee, the Senior Vice President Strategy & Innovation or the
Chief Financial Officer. It is made up of representatives from the
Strategy & Climate, Finance, Legal, Insurance and HSE corporate
divisions.
The Risk Committee meets on the same schedule as the Executive
Committee. Any project submitted to the Executive Committee (and
therefore giving rise to a financial commitment that exceeds certain
thresholds) is first presented to the Risk Committee by the relevant
operational division.
Following the review by the Risk Committee of the risks associated
with the project submitted, the Strategy & Climate Division sends the
Executive Committee a memorandum stating its opinion in light of the
Risk Committee’s comments.
The Audit & Internal Control Division
The Risk Team of the Audit & Internal Control Division is responsible
for producing and continuously updating the Group’s risk map. To
this end, it uses all of the risk mapping work carried out across the
Group, in the business segments and within the functional divisions;
the results of all audits and internal control activities; the action plans
resulting from this work and the monitoring of their implementation;
structured feedback; benchmarks and other external information
sources; regular interviews with the Group’s executive officers; and all
information gathered during GRMC meetings and the preparation for
these meetings.
The Audit & Internal Control Division reports regularly on its work on
the Group’s risk map to the Executive Committee, and annually to
the Audit Committee.
3.3.3.3
Systems in place
Financial risks
The management and conditions of use of financial instruments are
governed by strict rules that are defined by the Group’s General
Management, and which provide for centralization by the Treasury
rate positions,
Division of
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 the Group’s general
needs and interest rates. Debt is mainly incurred in dollars or euros.
and exchange
liquidity,
interest
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.
its
commitments, the Treasury Division has entered into margin call
contracts with its counterparties.
In addition, to reduce market value risk on
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 Division, 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 8.7 of chapter 8).
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 MAESTRO system, which meets the requirements of the
standards ISO 14001, ISO 9001 and OHSAS 18001, as well as the
new 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:
(cid:142)
(cid:142)
(cid:142)
prior to approving new investment, acquisition and disposal
projects;
during operations
assessments, health impact studies);
(safety
studies, environmental
impact
prior to releasing new substances on the market (toxicological and
ecotoxicological studies, 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
are 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 5.2.2.2 of chapter 5). 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.
3
Internal control and risk management procedures
RISKS AND CONTROL
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 5.2 of chapter 5).
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 dedicated tools. The organization set up in
the event of a crisis is deployed at two closely coordinated levels:
(cid:142)
(cid:142)
at the local level (country, site or entity), a crisis unit is responsible
implementing
for ensuring operational management and
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 antipollution
plan. They are reviewed regularly and tested through drills (refer to
point 5.2.2.2 of chapter 5).
In the event of accidental pollution, the Group’s companies have
access to internal human and physical resources (Fast Oil Spill Team,
Oil Spill Response Limited, Cedre(1)) and also benefit from assistance
agreements with the main third-party organizations specialized in the
management of hydrocarbon spills.
With regard to risks related to climate issues, TOTAL, in accordance
with its Safety Health Environment Quality Charter, is committed to
managing its energy consumption and develops processes to
improve its energy performance and that of its customers.
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 Sustainable Development
Scenario (2°C) 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
focusing on hydrocarbon assets with moderate
projects and
production and processing costs that meet the highest environmental
and safety standards.
(1)
Association to improve the fight against water pollution.
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RISKS AND CONTROL
Internal control and risk management procedures
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 lifespan
of the projects and their capacity to gradually adapt. These studies
have not
the
consequences of climate change known today.
that cannot withstand
identified any
facilities
Risks related to information systems
In order to maintain information systems that are appropriate to the
organization’s needs and limit the risks associated with information
systems and their data, TOTAL’s IT Division has developed and
distributed governance and security
the
recommended infrastructure, organization and procedures. These
rules are implemented across the Group under the responsibility of
the various business segments. To address cyber threats, the Group
conducts specific risk analyses permitting to define and put in place
appropriate security controls concerning information systems.
that describe
rules
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 and confidentiality are guaranteed
and changes controlled.
Information Technology Automated Controls aim to ensure the
integrity and confidentiality 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.
Furthermore, faced with rising legal and security-related risks, the
Group deploys policies to conserve documents and to protect
personal data and the security of its information assets. The Group
has also employed an Operational Security Center to detect and
analyze IT system security events.
Ethical misconduct and non-compliance risks
Prevention of corruption risks
General Management constantly reiterates the principle of zero
tolerance with regard to corruption. Internal rules have been
published since 2011 in this area. They cover various areas where
particular
exist
(acquisitions/disposals, business partnerships and joint ventures,
representatives dealing with public officials, procurement and sales,
donations, gifts and invitations, Human Resources, etc.) in an effort to
detect, assess and address risks at a very early stage through an
appropriate due diligence process.
corruption may
exposure
risks
to
of
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REGISTRATION DOCUMENT 2017
Awareness-raising and training actions are regularly taken for all
employees and the most exposed functions in support of this
program. For more information, refer to point 5.3.5.1 of chapter 5.
In addition, more than 360 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.
Since the certification of its compliance program in 2016 at the end of
a monitoring period jointly requested by the Securities and Exchange
Commission (SEC) and the Department of Justice (DoJ), the Group is
still committed and pursuing its efforts in a bid to ensure the
sustainability, development and continuous improvement of this
compliance program.
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.
An antifraud compliance program has been deployed since 2015,
including e-learning modules for all Group employees, a Guide to the
“Prevention and the fight against fraud”, a map of the risks of fraud in
the Group, a guide to the types of risk of fraud that includes
descriptions of the main risks and was published in 2016, and a
campaign to raise awareness of four major risks of fraud, launched
end of 2016. This program is deployed by the network of fraud risk
coordinators in the business segments and operational entities. The
role of coordinator is usually performed by the Compliance Officer.
Fraud risk analyses are also carried out in the subsidiaries.
Prevention of risks of non-compliance with international
economic sanctions regimes
The Group’s activities in certain sanctioned countries (refer to
point 3.1.9 of this chapter) are subject to an analysis of compliance
with the various applicable economic sanctions regimes. With respect
to Iran, a specific compliance program has been put in place.
In-depth investigations, carried out by specialized service providers,
are conducted on the Group’s stakeholders in Iran, in order to identify
possible links with companies or persons listed under international
sanctions (Specially Designated Nationals (SDN) lists, Single List of
Frozen Assets of the EU and the UN, etc.). U.S. persons are also
excluded from any transaction related to Iran. An Iran compliance
coordinator was appointed in 2016 and liaises with the compliance
teams of the relevant business segments and the Holding in order to
ensure compliance of the Group’s activities with applicable laws and
regulations.
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
Internal control and risk management procedures
RISKS AND CONTROL
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 appropriate organization.
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.
Prevention of conflicts of interest and market abuse
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” reminds all employees of their obligation to report to their
supervisor any situation that might give rise to a 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
Risks related to the protection of intellectual assets
To mitigate the risks of third parties infringing its intellectual property
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.
3
In addition, since some of its employees have access to confidential
documents while performing their duties, TOTAL has adopted internal
rules concerning the management of confidential information. The
Group’s
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.
intellectual
specialists
property
carry
also
3.3.4
Main characteristics of the internal control and risk management
procedures relating to the preparation and processing of accounting
and financial information
Accounting and financial internal control covers the processes that
produce accounting and financial data, and mainly the financial
statements processes and the processes to produce and publish
accounting and financial information. The internal control system aims
to:
(cid:142)
(cid:142)
(cid:142)
conserve the Group’s assets;
comply with accounting regulations, and properly apply standards
and methods to the production of financial information;
guarantee the reliability of accounting and financial information by
controlling the production of accounting and financial information
and its consistency with the information used to produce the
control panels at every appropriate level of the organization.
At Group level, the Finance Division, which includes the Accounting
Division, the Budget & Financial Control and the Tax Division, is
responsible for the production and processing of accounting and
financial information. The scope of the internal control procedures
relating to the production and processing of financial and accounting
information includes the parent company (TOTAL S.A.) and all of the
fully consolidated entities.
Refer to point 4.1.2.3 of chapter 4 for a description of the role and
the missions of the Audit Committee. These missions are defined
within the framework of European and American regulations, and in
particular Directive 2014/56/EU and EU Directive n°537/2014
pertaining to the legal control of accounts, and are based on the
report of the working group on the audit committee, published by the
AMF on July 22, 2010.
3.3.4.1
Production of accounting
and financial information
Organization of the Financial and Information
Systems function
Dedicated teams implement the accounting and financial processes
in the areas of consolidation, tax, budget and management control,
financing, cash positions and information systems. The entities,
business segments and General Management are respectively
responsible for accounting activities.
The Accounting Division, which is part of the Finance Division, is
responsible for drawing up the Consolidated Financial Statements
and manages the Group’s network of accounting teams.
The tax function, made up of a network of tax experts in the Holding,
the business segments and the entities, monitors changes in local
and international rules. It oversees the implementation of the Group’s
tax policy.
Management control contributes to the reinforcement of the internal
control system at every level of the organization. The network of
management controllers in the entities and the business segments is
supervised by the Budget & Financial Control Division. This
department also produces the monthly control panel, the budget and
the long-term plan for the Group.
The Treasury Division implements the financial policy, and in particular
the processing and centralization of cash flows, the debt and liquidity
investment policy and the coverage of currency exposure and interest
rate risks.
The Information Systems Division takes decision on the choice of
software suited to the Group’s accounting and financial requirements.
These information systems are subject to works to reinforce the task
separation system and to improve the control of access rights. Tools
are available to make sure that access rights comply with the Group’s
rules in this area.
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Internal control and risk management procedures
Consolidated Financial Statements process
Processing of accounting and financial information
The Accounting Division, which reports to the Finance Division,
prepares the Group’s quarterly Consolidated Financial Statements
according to IFRS standards, on the basis of the reporting packages
prepared by the entities concerned. The Consolidated Financial
Statements are examined by the Audit Committee, then approved by
the Board of Directors.
The main factors in the preparation of the Consolidated Financial
Statements are as follows:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
the processes feeding the individual accounts used to prepare the
reporting packages for consolidation purposes are subject to
validation, authorization and booking rules;
the consistency and reliability of the accounting and control data
are validated for each consolidated entity and at each appropriate
level of the organization;
a consolidation tool, supervised by the Accounting Division, is used
by each consolidated entity and the Group. It guarantees the
consistency and reliability of the data at each appropriate level of
the organization;
a consolidation reporting package from each entity concerned is
sent directly to the Accounting Division. It is used to optimize the
transmission and the completeness of the information;
financial
a corpus of accounting rules and methods is formally defined. Its
application is compulsory for all the consolidated entities in order
to provide uniform and
information. This
reliable
framework is built according to IFRS accounting standards. The
Accounting Division centrally distributes this framework through
regular and formal communication with the business segment
managers, formal procedures and a Financial Reporting Manual
that is regularly updated. In particular, it specifies the procedures
for the booking, identification and valuation of off-balance sheet
commitments;
new accounting standards under preparation and changes to the
existing framework are monitored in order to assess and anticipate
their impacts on the Consolidated Financial Statements;
an accounts plan used by all the consolidated entities is formally
set forth in the Financial Reporting Manual, specifying the content
of each account and the procedures for the preparation of the
reporting packages for consolidation purposes;
formalization of economic assumptions,
the account closing process is supervised and is based mainly on
the
judgments and
estimates, treatment of complex accounting transactions and
compliance with 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:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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 &
Financial Control 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. The various monthly indicators are used
to continually and uniformly monitor the performances of each of
the entities, business segments and of the Group, and to make
sure that they are in keeping with the objective;
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
the reliability of
accounting information and mainly concern the processes for
preparing aggregated financial items;
to ensure
a regular process for the signature of representation letters is
deployed at each level of the organization;
an annual control system of the accounts of equity affiliates based on
a questionnaire completed by each entity concerned. This system is
integrated into the Group’s internal control framework; and
the Disclosure Committee (CCIP) ensures the application of the
procedures in place.
Other significant financial information is produced according to strict
internal control procedures.
Proved oil and gas reserves are evaluated annually by the relevant
entities. They are reviewed by the Reserves Committees, approved
by Exploration & Production’s general management and then
validated by the Group’s General Management. They are also
presented to the Audit Committee each year.
The internal control process related to estimating reserves is
formalized in a special procedure described in detail in point 2.1.3 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.
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3.3.4.2
Publication of accounting
and financial information
Significant information about the Group is published externally
according to formal internal procedures. These procedures aim to
guarantee the quality and fair presentation of the information intended
for the financial markets, and its timely publication.
The Disclosure Committee (CCIP), chaired by the Chief Financial
Officer, ensures the application of these procedures. It meets before
TOTAL’s financial results press releases, strategic presentations and
annual reports are submitted to the Audit Committee and the Board
of Directors.
A calendar of the publication of financial information is published and
made available to investors on the Group’s web site (refer to point 6.6
of chapter 6). With the help of the Legal Division, Investor Relations
ensures that all publications are made on time and in accordance
with
information between
shareholders.
the principle of equal access
to
Assessment of the system for the internal control
of accounting and financial information
The Group’s General Management is responsible for implementing
and assessing the internal control system for financial and accounting
disclosure. In this context, the implementation of the Group’s internal
control framework, based on the various components of the COSO
framework, is assessed internally at regular intervals within the
Group’s main entities.
RISKS AND CONTROL
Insurance and risk management
Pursuant to the requirements introduced by Section 302 of the
Sarbanes-Oxley Act, the Chairman and Chief Executive Officer and
the Chief Financial Officer of the Company have conducted, with the
assistance of members of certain divisions of the Group (in particular
Legal, Audit & Internal Control and Corporate Communications), an
evaluation of the effectiveness of the internal disclosure controls and
procedures, over the period covered by the annual report on Form
20-F. For fiscal year 2017, the Chairman and Chief Executive Officer
and the Chief Financial Officer concluded that the disclosure controls
and procedures were effective.
In addition, a specific process is in place for reporting any information
related to the Group’s accounting procedures, internal control and
auditing. This process is available to any shareholder, employee or
third party.
3
Finally, the Consolidated Financial Statements undergo a limited
examination by external auditors during quarterly closing, and an
audit during annual closing. Almost all the audit missions in the
countries are fulfilled by the members of the networks of the two
statutory auditors, who, after having jointly examined all the accounts
and the procedures used to produce them, proceed with the annual
certification of the Group’s Consolidated Financial Statements. They
are informed in advance of the process for the preparation of the
accounts and present a summary of their work to the Group
accounting and financial managers and to the Audit Committee
during the quarterly reviews and annual closing. The statutory
auditors also perform those internal control audits that they deem
necessary as part of their mission to certify the Financial Statements.
3.4
Insurance and risk management
3.4.1
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 2017, 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.
3.4.2
Risk and insurance management policy
In this context, the Group risk and insurance management policy is to
work with the relevant internal department of each subsidiary to:
(cid:142)
(cid:142)
define scenarios of major disaster risks (estimated maximum loss);
assess the potential financial impact on the Group should a
catastrophic event occur;
(cid:142)
(cid:142)
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.
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RISKS AND CONTROL
Vigilance Plan
3.4.3
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:
(cid:142)
(cid:142)
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
2017, the Group’s third-party liability insurance for any third-party
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 2017 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 2017 the insurance limit
for
installations was approximately
$1.75 billion for the Refining & Chemicals segment and approximately
$2.2 billion for the Exploration & Production segment.
the Group share of
the
Deductibles for property damage and third-party liability fluctuate
between €0.1 and €10 million depending on the level of risk and
3.5
Vigilance Plan
3.5.1
Introduction
3.5.1.1
Background and Group
commitments
In accordance with Article L. 225-102-4 of the French Commercial
Code, the vigilance plan (hereafter referred to as the “Vigilance Plan”)
aims to set out the reasonable measures of vigilance put in place
within the Group in order to identify the risks and prevent severe
impacts on human rights and fundamental freedoms, human health
and safety and the environment resulting from the activities of the
Company and the companies it controls as defined in point II of
Article L. 233-16 of the French Commercial Code, directly or
indirectly, together with the activities of subcontractors or suppliers
with which it has an established commercial relationship, where such
activities are linked to this relationship.
TOTAL operates in over 130 countries in a variety of complex
economic and socio-cultural contexts and in business areas that can
present risks that fall within the scope of the Vigilance Plan.
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REGISTRATION DOCUMENT 2017
liability, and are borne by the relevant subsidiaries. For business
interruption, coverage is triggered 60 days after the occurrence giving
rise to the
In addition, the main refineries and
petrochemical plants bear a combined retention for property damage
and business interruption of $75 million per insurance claim.
interruption.
Other insurance contracts are bought by the Group in addition to
property damage and
in
connection with car fleets, credit insurance and employee benefits.
These risks are mostly underwritten by outside insurance companies.
liability coverage, mainly
third-party
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.
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.
to
The “One Total” company project, which embodies the Group’s
ambition to become the responsible energy major, is based
specifically on Safety and Respect for Each Other, the two core
values central
the Group’s collective principles. Although
compliance with applicable regulations in each country where the
Group operates is most often consistent with the protection of the
objectives of the Vigilance Plan, TOTAL, having noted that minimum
fundamental principles are necessary for a uniform application of
these objectives, notably adhered to the United Nations Global
Compact in 2002 and committed to comply with the UN Guiding
Principles on Business and Human Rights following their adoption in
2011. TOTAL has also committed to support the United Nations’
the Sustainable
recommendations
Development Goals (SDGs) and launched in 2017 a project to identify
and prioritize the SDGs to which it can make the most significant
contribution and to define public commitments.
implementation of
the
for
Chapter 5 of this Registration Document sets out the Group’s social,
environmental and societal strategy, actions and performance
indicators.
3.5.1.2
Method and preparation
of the Vigilance Plan
to as
referred
The Vigilance Plan covers the activities (hereafter referred to as the
“Activities”) of TOTAL S.A. and its fully consolidated subsidiaries
the “Subsidiaries”). The companies
(hereafter
Hutchinson, Saft Groupe and SunPower have set up
risk
management and severe impact prevention measures specific to their
to
organizations
Article L. 225-102-4 of the French Commercial Code are stated in the
Group’s Vigilance Plan.
those measures
activities;
related
and
The Vigilance Plan also covers the activities of suppliers of goods and
services with which TOTAL S.A. and its Subsidiaries have an
established commercial relationship, where such activities are
associated with this relationship (hereafter referred to as the
“Suppliers”). In accordance with the legal provisions, suppliers with
which the Group does not have an established commercial
relationship do not fall within the scope of the Plan.
The Plan sets out the rules and measures which, as elements of the
risk management systems, enable the Group to identify and prevent
actual or potential severe impacts linked to its Activities and to
mitigate the effects thereof as the case may be. It does not guarantee
that the risks identified will not materialize. It contains the sustainable
procurement principles applicable to relationships with Suppliers, but
does not aim to replace the measures in place at those Suppliers.
3.5.2
Severe impact risk mapping
risk management
The mapping work presented below was carried out using
the Group’s existing
tools. This work was
supplemented with regard to Suppliers by mapping of the risks
related to procurement, by category of goods and services, on
the basis of questionnaires completed by the managers of each
purchasing category.
3.5.2.1
Human rights and fundamental
freedoms
The risks of severe impacts on human rights and fundamental
freedoms have been identified in accordance with the criteria set out
in the UN Guiding Principles Reporting Framework, namely the scale,
scope and remediability of the impact.
This identification work was carried out in 2016 in consultation with
internal and external stakeholders. The process included in particular
workshops with representatives of key functions within the Group and
Subsidiaries operating in sensitive contexts or situations particularly
exposed to risks related to human rights and fundamental freedoms,
third parties
and a series of
(GoodCorporation, International Alert and Collaborative Learning
Project).
interviews with
independent
As a result, the following risks of severe negative impacts on human
rights and fundamental freedoms were identified:
(cid:142)
forced labor, which corresponds to any work or service which
people are forced to do against their will, under threat of
RISKS AND CONTROL
Vigilance Plan
Dialog with stakeholders
3.5.1.3
TOTAL puts in place procedures for dialog with its stakeholders at
every level of its organization. Among the numerous stakeholders
with which TOTAL maintains regular dialog, the Group’s employees
and their representatives have a privileged position and role,
particularly in constructive discussions with management (refer to
points 5.1.3 and 5.3.1 of chapter 5).
The Group societal directive stipulates that “each entity must regularly
consult its stakeholders(1) 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”.
for building a
In this context, TOTAL has deployed since 2006 its internal
Stakeholder Relationship Management (SRM+) methodology. The
aim is to identify and map out the main stakeholders of each
Subsidiary and site (depots, refineries, etc.), schedule consultation
meetings and gain a better understanding of their expectations, and
then define an action plan
long-term trusting
relationship. This methodology is used to explain the Group’s
Activities to communities and other stakeholders, and to gather
information about their expectations and those of local individuals
and groups that might be vulnerable or marginalized. It has been
deployed at over 100 Subsidiaries since 2006 and the deployment
continued in 2017. The system is supplemented by a network of
mediators with local communities, deployed in the Exploration &
Production segment
to maintain a constructive dialog with
neighboring communities.
3
punishment; and child labor, which is prohibited for any person
aged under 15, or under 18 for all types of work deemed
hazardous in accordance with International Labour Organization
standards;
discrimination, characterized by unfair or unfavorable treatment of
people, particularly due to their origin, sex, age, disability, sexual
and gender orientation, or membership of a political or religious
group, trade union or minority;
non-compliance with fair and safe working conditions, such as for
example the absence of employment contracts, excessive working
hours or lack of decent compensation;
restriction of access to land by neighboring local communities,
resulting from the Group having, for some of its projects,
temporary or permanent access to the land that might result in
the physical and/or economic displacement and relocation of these
groups;
impacts on the right to health and an adequate standard of living of
local communities, such as noise and dust emissions and other
impacts generated by the Activities that might have consequences
for the health of local communities, their means of subsistence and
their access to ecosystem services such as drinking water, for
example; and
the risk of disproportionate use of force, when intervention by
government security forces or private security companies might be
necessary to protect the Group’s staff and facilities.
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(1)
“Stakeholders” means all of the people and organizations that can have an impact on the Group or be affected by its Activities.
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Safety, health and environment
3.5.2.2
The Group defines the risk of a severe impact on safety, health or the
environment as the probability of TOTAL’s Activities having a direct
and significant impact on the health or safety of employees of Group
companies, employees of external contractors(1) and third parties, or
sensitive natural environments(2). This risk can materialize gradually or
suddenly.
risk
TOTAL has developed safety, health and environment
assessment procedures and tools applicable to
its Activities.
Analyses are performed regularly at various levels (Group, activities
and/or industrial sites):
(cid:142)
(cid:142)
prior to approving new investment, acquisition and disposal
projects, through individual identification of potential risks using
methods developed by the relevant business segments within the
Group, mainly
(Occupational Health, Safety and
Environment) and Security departments;
the HSE
during operations (safety studies, security reviews, environmental
and societal impact assessments, health impact studies); and
(cid:142)
prior to releasing new substances on the market (toxicological and
ecotoxicological studies, life cycle analyses).
These analyses have highlighted the following risks of severe impacts:
(cid:142)
(cid:142)
(cid:142)
the risks to the safety of people and the environment resulting from
a major industrial accident, such as an explosion, fire or leakage of
toxic substances, resulting in death or injury and/or accidental
pollution on a large scale or at an environmentally sensitive site;
the risks to the safety of people and the environment related to the
physical characteristics of oil and gas fields, particularly during
drilling operations, which can cause blow outs, explosions, fires or
other damages; and
the risks to the safety of people and the environment related to the
overall life cycle of the products manufactured, as well as the
substances and raw materials used. With regard to transportation,
the likelihood of an operational accident depends not only on the
hazardous nature of the products handled, but also on the
volumes, the length of the journey and the sensitivity of the regions
through which they are transported (quality of infrastructure,
population density, environmental considerations).
3.5.3
Action Principles
The Group has frameworks that set out the Action Principles to be
followed in order to respect the Group’s values and prevent severe
impacts on human rights and fundamental freedoms, human health
and safety and the environment (the “Action Principles”). When the
legal provisions applicable to the Activities provide less protection
than the Group’s Action Principles, TOTAL strives under all
circumstances to give precedence to the latter, while seeking to
ensure that it does not infringe any applicable mandatory public
policy.
Code of Conduct
3.5.3.1
TOTAL’s Vigilance Plan is based primarily on its Code of Conduct(3),
which is anchored in the Group’s values and sets forth the Action
Principles in terms of safety, security, protection of health and
environment, integrity and respect for human rights and fundamental
freedoms.
The Code particularly sets forth the Group’s compliance with the
following international standards:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
the principles of the Universal Declaration of Human Rights;
the United Nations Guiding Principles on Business & Human
Rights;
the principles set out in the International Labour Organization’s
fundamental conventions;
the principles of the United Nations Global Compact;
the OECD Guidelines for Multinational Enterprises; and
(cid:142)
the Voluntary Principles on Security and Human Rights.
The Code can be consulted on the Group’s website and is aimed at
all employees and external stakeholders (Suppliers, host countries,
customers, partners, etc.).
3.5.3.2
Safety Health Environment Quality
Charter
The Group takes care to comply with the strictest safety, security,
health and environment standards in the performance of its Activities.
The Safety Health Environment Quality Charter sets out the principles
that apply to the conduct of its operations in all of the countries
where it operates(4).
As such, the Group’s Subsidiaries implement (5) a normative
framework incorporating occupational health and safety, security,
societal commitment and environment as well as associated
management systems (Management And Expectations Standards
Towards Robust Operations, MAESTRO).
With regard to safety at work, the Golden Rules, which were
produced on the basis of feedback and simplified in 2017 into a set
of "dos and don’ts", apply to all Group entities, employees and
Suppliers on site. Each individual must ensure that they are adopted,
strictly followed and monitored on the ground. If any of the Golden
Rules is not being followed, each individual is also authorized to use
his or her “Stop Card” and stop any work under way.
(1)
(2)
(3)
(4)
(5)
Refer to the definition in point 5.4.4.1 of chapter 5.
Sensitive natural environments include in particular remarkable or highly vulnerable natural areas, such as the Arctic, and/or areas covered by regulatory
protection (integral nature reserves, central park areas, biotope orders in France, etc.), together with areas covered by significant regulatory protection such
as Protected Area Categories I to IV as defined by the International Union for Conservation of Nature (IUCN).
SunPower, a company listed on the NASDAQ in the United States and in which TOTAL has a majority interest, has a Code of professional conduct specific
to the company that sets forth its values and the ethical principles with which all employees, suppliers and partners must comply. It covers subjects relating
to compliance, integrity and protection of the company’s assets, as well as certain issues relating to human rights, fundamental freedoms, human health and
safety and environment.
The Group’s Safety Health Environment Quality Charter is currently being rolled out at Saft Groupe, which joined the TOTAL Group in the second half of
2016.
Saft Groupe and SunPower have developed HSE management systems specific to their activities and organization (for example, the Environmental Health
Safety & Quality Management System).
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The Group also ensures that the principles of the global agreement
on safety, health, human rights and fundamental freedoms are
promoted among its Suppliers, particularly through the Fundamental
Principles of Purchasing. In the event that a Supplier fails to observe
these principles, the Group is committed to taking the necessary
measures, which can include termination of the contract.
Furthermore, on December 21, 2017, the Group adhered to the
Global Deal initiative, together with some 60 partners, states, trade
unions, companies and international organizations. This international
multi-stakeholder partnership aims at fighting against inequalities,
encouraging effective social dialogue and promoting more equitable
globalization. It promotes social dialogue, collective negotiations and
freedom of unionization as essential tools to achieve the United
Nations Sustainable Development Goals (SDGs) 8, 10 and 17.
3.5.3.5
Internal control framework
At the Group, business segment and Subsidiary level, internal
controls are based on specific procedures
for organization,
delegation of responsibilities and staff awareness and training, based
on the framework of the Committee of Sponsoring Organizations of
the Treadway Commission (COSO).
TOTAL has a framework of Group standards, completed by a series
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.
3
societal commitment) and business segments. It meets several times
a year and coordinates actions relating to human rights and
fundamental freedoms taken by the various business segments and
Subsidiaries, in line with the road map approved by the Executive
Committee in this regard.
The Human Rights Department, within the Civil Society Engagement
division, supports the Group’s operational managers with
its
expertise in implementing the Action Principles relating to human
rights and fundamental freedoms.
3.5.4.3
Occupational Health, Safety
and Environment division
the Group’s
Since 2016, a single HSE division combines
Occupational Health, Safety and Environment functions. Its role is to
implement a strong and unified HSE model.
Within the division, the HSE departments of the Exploration &
Production, Gas, Renewables & Power, Refining & Chemicals and
Marketing & Services segments are, among others, responsible for
supporting the implementation of the Group’s HSE policy. Specific
expert units were set up in 2016 in the following areas: major risks,
human and organizational factors, environmental and societal issues,
transportation and storage, crisis management and pollution
prevention.
3.5.3.3
Fundamental Principles
of Purchasing
The relationship between the Group and its Suppliers is based on
adherence to the principles set forth in the Code of Conduct and the
Fundamental Principles of Purchasing (for further information about
the relationship between the Group and its suppliers, refer to
point 5.3.4.1 of chapter 5).
in a Group directive
The Fundamental Principles of Purchasing, introduced in 2010 and
formally set out
the
commitments that TOTAL expects from its suppliers in the following
areas: respect for human rights at work, health protection, 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.
in 2014, specify
The rules specified by this document, which apply to all the Group’s
companies(1), must be communicated to TOTAL's suppliers by
including or transposing them into the agreements concluded with
the suppliers. These principles are available for consultation by all
suppliers in both French and English on TOTAL’s website (under
“suppliers”).
federation,
CSR Global Agreement
3.5.3.4
TOTAL signed in 2015 a global agreement with the worldwide trade
union
represents
50 million employees in 140 countries. Under this agreement, the
Group is committed to maintaining minimum social standards and
guarantees worldwide for all Subsidiaries in which it has more than a
50% stake.
IndustriALL Global Union, which
3.5.4
Organization
The Group’s organization is structured around three main levels:
Holding, business segments and operational entities. This
organization aims
the
implementation of the Action Principles. Each level is involved in and
accountable for identifying and implementing the reasonable vigilance
measures deemed appropriate.
to support operational managers
in
Ethics Committee
3.5.4.1
The Ethics Committee is made up of members representing all of the
Group’s business segments. One of its duties is to ensure that the
Code of Conduct is distributed, understood and implemented within
the Group. It is assisted in its work by the relevant Departments, as
well as by local Ethics Officers. The Chairperson of the Ethics
Committee reports to the Chairman and Chief Executive Officer of
TOTAL. The Chairperson submits an annual report to the Executive
Committee and the Governance and Ethics Committee of TOTAL
S.A.’s Board of Directors.
Employees and stakeholders can refer any breach of the Code of
Conduct to the Ethics Committee at any time, in accordance with the
procedure described in point 3.5.7. The members of the Ethics
Committee are subject
to confidentiality and data protection
obligations.
3.5.4.2
Human Rights Committee
and Department
The Human Rights Committee is made up of representatives from
different departments (including in particular safety, purchasing and
(1)
Saft Groupe and SunPower have defined fundamental principles of purchasing specific to their activities (for example, SunPower Supplier Sustainability
Guidelines).
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Procurement
3.5.4.4
Since January 1, 2017, Total Global Procurement covers a large
proportion of the Group’s goods and services purchasing(1), both for
categories specific to one business activity and categories shared
between several business activities. In the Subsidiaries, purchasers
implement framework agreements and manage local procurement.
A Sustainable Procurement Committee, which regularly brings
together the Management Committee of Total Global Procurement
and the Civil Society Engagement (including the Human Rights
department), HSE and Legal divisions as well as the Ethics
Committee, monitors the implementation of the Group’s Sustainable
Procurement road map. The road map sets out the strategic direction
of the Sustainable Procurement working group (refer to point 5.3.4 of
chapter 5).
In addition, the Vetting department of Trading & Shipping, known as
Total Activités Maritimes (TAM), defines and applies the selection
criteria for the tankers used to transport the Group’s petroleum,
chemical and gas products, in order to ascertain the technical
condition of the vessels, the crews’ experience and the quality of the
ship owners’ technical management.
3.5.5
Assessment procedures
The Group has set up procedures for assessing its Subsidiaries and
Suppliers, particularly in conjunction with independent bodies, in
order to identify and prevent risks of severe impacts on human rights
and fundamental freedoms, human health and safety.
3.5.5.1
HSE audits and industrial risk
assessment
The Audit and Feedback Unit of the HSE division is a key component
of HSE governance. It was formed in response to the need for
internal control to:
(cid:142)
ensure the quality and effectiveness of risk management processes
and the implementation thereof in the entities’ and subsidiaries’
operations to improve their risk management and contribute to
operational excellence; and
(cid:142)
ensure compliance with the Group’s HSE requirements.
The unit organizes, optimizes and conducts HSE audits within the
Group, and is also responsible for analyzing major incidents in the oil
and gas sector and managing feedback.
The level of risk analyzed is assessed for each industrial site
operated, and an action plan is then produced to supplement the
application of technical standards and local regulations. In addition,
the Management Committee of each of the Group’s business
segments carries out an annual review of the major risk analyses and
the progress of the associated action plans.
Supplier qualification and auditing
3.5.5.2
The Supplier qualification process was harmonized in 2017 by Total
Global Procurement and it will be rolled out gradually throughout the
Group(2) using a consolidated database. The process covers human
rights, environment, health and safety.
is carried out.
Depending on the results of a risk analysis carried out by Supplier, a
detailed assessment
includes questionnaires
addressing the aforementioned issues and, if needed, an action plan,
a technical inspection of the site by an employee or an audit of
working conditions carried out by a specialist service provider with
which a framework agreement was signed in 2016.
It
Regarding petroleum shipping activities, any operation that involves
vessels calling at a terminal operated by a Group Subsidiary, carrying
shipments that belong to the Group or chartered by TOTAL must be
approved in advance by the Vetting department. Responses are
given on the basis of technical data and independently of any
commercial considerations. The audits conducted by TAM of ship
owners permit the assessment of the quality of the technical
management systems implemented by the operators, crew selection
and training, and the support provided to vessels. With 1,200 annual
inspections performed by inspectors representing the Group, TOTAL
is actively involved in sharing inspection reports with other major oil
companies through the SIRE (ship inspection report) Program set up
by the OCIMF (Oil Companies International Marine Forum), thus
contributing to the continuous improvement of petroleum shipping
safety.
Ethical assessments
3.5.5.3
Since 2002, the Group has engaged GoodCorporation, a company
specializing in ethical assessments, to check the application of the
principles set out in the Code of Conduct at the Subsidiary level.
These assessments include criteria relating to human rights and
fundamental freedoms, and corruption. As part of the process, a
selection of employees and external stakeholders of the Subsidiary is
questioned to gain an understanding of how its Activities are
the Subsidiary in
perceived locally. Following the assessment,
question defines and implements an action plan and a monitoring
procedure.
3.5.5.4
Assessment of entities regarding
human rights and fundamental
freedoms
TOTAL works with the Danish Institute for Human Rights (DIHR), an
independent national body for the defense and promotion of human
rights and fundamental freedoms, which assesses the impact on
human rights and fundamental freedoms of the Group’s oil and gas
exploration and production activities in sensitive contexts.
The DIHR has also developed a self-assessment tool, the Human
Rights Compliance Assessment (HRCA), to help companies evaluate
their compliance with
rights standards.
The Group has used the tool several times to raise awareness at the
Subsidiaries and
rights and
fundamental freedoms into their everyday operational management.
international human
for human
incorporate
respect
(1)
(2)
With the exception of crude oil and petroleum product purchasing by Trading & Shipping, gas and electricity purchasing by TOTAL Gas & Power Ltd, and
the purchases made by Hutchinson, Saft Groupe and SunPower. TOTAL Global Procurement made purchases from over 100,000 suppliers worldwide in
2017.
Crude oil and petroleum product purchasing by Trading & Shipping, gas and electricity purchasing by TOTAL Gas & Power Ltd, and the purchases made by
Hutchinson, Saft Groupe and SunPower are covered by qualification processes specific to their organization and business, defined by those companies and
Group entities.
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3.5.5.5
Societal impact assessment
The Group(1) conducts baseline socioeconomic context studies and
societal and human rights impact assessments for industrial projects,
asset acquisition transactions and shareholding purchases that might
have an impact on stakeholders.
In some cases, the Group works with independent experts such as
CDA, a company specialized in preventing and managing conflict
between businesses and local communities. Similarly, the Group
works with International Alert (IA), an NGO based in the United
Kingdom specializing in conducting audits in conflict zones. CDA and
IA’s reports are published online on their websites.
In addition, an annual self-assessment questionnaire enables each of
the Group’s entities and business segments to measure and evaluate
the level of implementation of their societal governance on the ground
their dialog
by
impact
identifying and analyzing
to socioeconomic and cultural
management and contribution
development.
initiatives,
3.5.6
Awareness and training actions
Subsidiary and Supplier awareness
3.5.6.1
The Group has put in place a variety of communication and
information channels so that all employees of TOTAL S.A. and its
Subsidiaries can access its Action Principles in relation to human
rights and fundamental freedoms, health, safety and the environment.
The Code of Conduct is distributed to all employees and can be
consulted on the Group’s website. All new employees must confirm
that they are familiar with it.
A number of practical guides are available on the Group’s intranet,
such as for example the Human Rights Guide and the Guide to
dealing with religious questions within the Group, to help Group
employees apply the commitments set out in the Code of Conduct to
individual cases.
Tools have also been developed for employee use, for instance the
“Safety +” web application in the field of HSE, which aims to provide
a unique forum for sharing and promoting significant individual or
collective safety actions (good practice, compliance with rules,
initiatives) implemented at the Group’s 750 entities(2).
The HSE division organizes the Group’s World Safety Day, which
aims to bring teams on board and raise awareness of ways to put the
HSE Action Principles
into practice. The Group’s employees
implement its safety culture on a day-to-day basis through “Safety
Moments” at the beginning of meetings or before hazardous
operations, consisting of a short discussion to reiterate the key safety
messages and focus participants on their mutual commitments.
Information for Suppliers, including the Fundamental Principles of
Purchasing, is available on the Group’s website. Events such as the
annual Business Ethics Day are used to raise awareness among
employees of TOTAL S.A. and its Subsidiaries. The theme of this
event in 2016 focused on challenges in terms of human rights and
anti-corruption in the supply chain, and an awareness-raising
brochure was circulated on
the Fundamental Principles of
Purchasing.
Employee and third party training
3.5.6.2
Training courses,
incorporating on-line educational programs and
technical training tailored to the various business segments, are
available to all Group employees (refer to point 5.1.4 of chapter 5).
3
rights and
fundamental
Dedicated human
training
programs have been set up for senior executives, site directors and
the employees most exposed to these issues. In the field of
the Group’s ethical
procurement,
commitments and the Fundamental Principles of Purchasing have
also been developed for Group purchasers.
training modules explaining
freedoms
Similarly, training programs in the fields of health, safety and
environment have been rolled out within the Group. For example,
since its launch, over 900 directors of Subsidiaries have taken the
“HSE for Managers” training, which is aimed at senior operational and
functional management. The Group has also introduced an HSE
training course for all new recruits, lasting between 5 and 20 days;
the program will be rolled out worldwide in 2018.
Training initiatives are also undertaken with the Group’s Suppliers,
such as the responsible security training given to safety service
providers’ personnel, the celebration of the 2017 World Safety Day
on the theme of “our shared safety”, promoting dialog with Suppliers,
or the Safety Contract Owners program, which brings together more
than 650 Suppliers at the Group level.
3.5.6.3
Information regarding
product-related risks
All of the chemical products or substances marketed by the Group
are covered by a safety data sheet for the information of carriers of
dangerous goods, emergency services, poison control centers, plant
health product professionals and consumers.
Each safety data sheet provides comprehensive information about a
substance or mixture usable in the regulatory framework of managing
chemicals in the workplace. It enables users to identify the risks
linked to handling such products, particularly regarding safety and the
environment, so that they can implement any measures necessary to
protect people and the environment.
(1)
(2)
Hutchinson, Saft Groupe and SunPower have implemented assessment processes specific to their organization and activities.
Excluding Hutchinson, Saft Groupe and SunPower.
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3.5.7
Whistleblowing mechanisms
To support employees on a day-to-day basis, the Group encourages
a climate of dialog and trust that enables individuals to express their
opinions and concerns. Employees can thus go to their line manager,
an HR or other manager, their Compliance Officer or their Ethics
Officer.
The Group’s employees and Suppliers, as well as any other external
stakeholder, can contact the Ethics Committee to ask questions or
report any incident where there is a risk of non-compliance with the
Code
address
(ethics@TOTAL.com). The system is supplemented by specific
of Conduct
generic
using
email
the
3.5.8
Monitoring procedures
TOTAL has human rights, health, safety and environment monitoring
procedures and tools in order to ensure that the Vigilance Plan is
correctly applied and continuously updated.
Internal reporting system
3.5.8.1
The Group has an internal reporting system and indicators for
monitoring the implementation of actions undertaken regarding
human rights, health, safety and environment that are available to the
Subsidiaries (refer to point 5.4 of chapter 5).
The system is based:
(cid:142)
(cid:142)
(cid:142)
for social indicators (including, in particular, health), on a guide
entitled “Corporate Social Reporting Protocol and Method”;
for industrial safety indicators, on a Group rule concerning event
and statistical reporting; a feedback analysis process identifies in
particular events for which a structured analysis report is required
in order to learn lessons in terms of design and operation; and
for environmental indicators, on a Group reporting procedure,
together with activity-specific instructions.
Consolidated objectives are defined for each key indicator (for
example, TRIR, or number of recorded injuries per million hours
worked) and reviewed annually. The business segments apply these
indicators as appropriate to their area of responsibility, analyze the
results and set out a plan.
Worldwide Human Resources Survey
3.5.8.2
Each year, TOTAL conducts an
internal Worldwide Human
Resources Survey. In 2017, it covered 133 companies in 57
countries, representing 87.2% of the consolidated Group’s workforce
(refer to point 5.4.2 of chapter 5). The survey includes indicators that
cover major components of the Group’s Human Resources policy,
such as mobility, career management, training, working conditions,
social dialog, Code of Conduct application, human rights, health,
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whistleblowing mechanisms implemented at certain subsidiaries
(SunPower, Hutchinson).
The Group’s Suppliers can also contact the internal supplier mediator
using a generic email address (mediation.fournisseurs@TOTAL.com).
The mediator is available to Suppliers and purchasers, and restores
dialog so that solutions can be found when measures taken with the
usual contact have been unsuccessful.
Grievance handling procedures are also in place within the Group in
order to receive and facilitate the resolution of concerns and
grievances of local communities affected by its Activities.
compensation, retirement and death or disability benefits. The survey
covers a representative sample of the consolidated scope.
A survey of Group employees carried out every two years is used to
measure the teams’ level of commitment and their understanding of
and adherence to the Group’s Action Principles. This survey is
followed by action plans implemented by each entity in response to
the areas for improvement identified.
3.5.8.3
CSR global agreement monitoring
committee
A CSR global agreement monitoring committee, known as the “FAIR
Committee”, meets every year in the presence of representatives who
are members of trade unions affiliated with the IndustriALL Global
Union and appointed by this federation to monitor and implement the
agreement. It identifies good practice and areas for improvement.
3.5.8.4
Reports regarding human rights
and fundamental freedoms
With regard to human rights and fundamental freedoms, the Group
publishes a Human Rights report that describes the Group's
Activities’ major impacts on human rights and fundamental freedoms
and the remedial measures taken. TOTAL is the first company in the
oil industry to have published this report in accordance with the UN
Guiding Principles Reporting Framework. It is available on the
Group’s website and will be updated in 2018.
Since 2015, TOTAL also publishes a report to assess the progress
made in the implementation of the Voluntary Principles on Security
and Human Rights (VPSHR). TOTAL is the first company in the oil
industry to make this report public. The information set out in the
report is based on annual reporting organized by the Security division
that brings together the results of the risk and compliance analyses
for each subsidiary operating in a sensitive context.
4
REPORT ON CORPORATE GOVERNANCE
4.1
Administration and management bodies
104
4.4
4.1.1
Composition of the Board of Directors
4.1.2
Practices of the Board of Directors
4.1.3
4.1.4
Report of the Lead Independent Director
on her mandate
Evaluation of the functioning of the Board
of Directors
4.1.5
General Management
4.1.6
Shares held by the administration and
management bodies
4.2
4.3
Statement regarding corporate
governance
Compensation for the administration
and management bodies
4.3.1
Board members’ compensation
4.3.2
Chairman and Chief Executive Officer’s
compensation
4.3.3
Executive officers’ compensation
4.3.4
Stock option and free share grants
104
119
132
133
134
135
137
137
137
140
154
154
4.4.1
4.4.2
4.4.3
4.4.4
Additional information about corporate
governance
161
Regulated agreements and undertakings
and related-party transactions
161
Delegations of authority and powers
granted to the Board of Directors with
respect to share capital increases and
authorization for share cancellation
Provisions of the bylaws governing
shareholders’ participation to General
Meetings
Information about factors likely to have an
impact in the event of a public offering or
exchange
162
163
163
164
4.4.5
Statutory auditors
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
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REPORT ON CORPORATE GOVERNANCE
Administration and management bodies
corporate governance, produced pursuant
The information set out in this chapter forms the Board of Directors’
report on
to
Article L. 225-37 of the French Commercial Code. This report has
been prepared on the basis of the deliberations of the Board of
Directors, and with the assistance of several of the Company’s
corporate functional divisions, including in particular the Legal,
Finance and People & Social Responsibility Departments. After the
sections relevant to their respective duties were reviewed by the
Governance and Ethics Committee and
the Compensation
Committee, the report was approved by the Board of Directors.
4.1
Administration and management bodies
4.1.1
Composition of the Board of Directors
As of March 14, 2018
12
DIRECTORS
90%
INDEPENDENT
DIRECTORS(a)
1
LEAD INDEPENDENT
DIRECTOR
1
DIRECTOR
REPRESENTING
EMPLOYEE
SHAREHOLDERS
60
AVERAGE AGE
OF DIRECTORS
4.2 years
AVERAGE YEARS
OF SERVICE
OF THE BOARD
OF DIRECTORS
45.5%
WOMEN(b)
54.5%
MEN(b)
1
DIRECTOR
REPRESENTING
EMPLOYEES
6
NATIONALITIES
REPRESENTED
(a)
Excluding the director representing employee shareholders and the director representing employees, in accordance with the recommendations of the
AFEP-MEDEF Code (point 8.3). For more information, refer to point 4.1.1.4 of this chapter.
(b)
Excluding the director representing employees, in accordance with Article L. 225-27-1 of the French Commercial Code.
the proposal of
the shareholders set out
The Company is administered by a Board of Directors including,
amongst its members, a director representing employee shareholders
elected on
in
Article L. 225-102 of the French Commercial Code, in accordance
with the provisions of Article L. 225-23 of the French Commercial
Code (hereafter referred to as the “director representing employee
shareholders”), and a director representing employees appointed by
the UES Amont Central Works Council – Global Services – Holding in
accordance with the provisions of Article L. 225-27-1 of the French
Commercial Code and the Company’s bylaws.
Mr. Patrick Pouyanné is the Chairman and Chief Executive Officer of
TOTAL S.A. He 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 (refer to point 4.1.5.1 of this chapter).
Ms. Patricia Barbizet has served as Lead Independent Director since
December 19, 2015. Her duties are specified in the Rules of
Procedure of the Board of Directors (refer to point 4.1.2.1 of this
chapter).
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Directors are appointed for a three-year period (Article 11 of the
Company's bylaws). 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. The
profiles, experiences and expertises of the directors are detailed in
the biographies below.
Overview of the Board of Directors
As of March 14, 2018
Age
Sex
Nationality Independence
First
appointment
Expiry of term
of office
Years’
service
on the
Board
Number of
directorships
held at listed
companies(a)
Patrick Pouyanné
Chairman and Chief Executive Officer
Patrick Artus
Patricia Barbizet
Lead Independent Director
Marie-Christine Coisne-Roquette
Mark Cutifani
Maria van der Hoeven
Anne-Marie Idrac
Gérard Lamarche
Jean Lemierre
Renata Perycz(b)
Christine Renaud(c)
Carlos Tavares
54
66
62
61
59
68
66
56
67
54
49
59
M
M
F
F
M
F
F
M
M
F
F
M
2015
2009
2008
2011
2017
2016
2012
2012
2016
2016
2017
2017
•
•
•
•
•
•
•
•
n/a
n/a
•
2018
2018
2020
2020
2020
2019
2018
2019
2019
2019
2020
2020
3
9
10
7
1
2
6
6
2
2
1
1
4
1
2
2
1
1
2
4
4
1
0
0
2
(a)
(b)
(c)
Number of directorships held by the director at listed companies outside his or her group, including foreign companies, assessed in accordance with the recommendations
of the AFEP-MEDEF Code, point 18 (refer to point 4.1.1.3 of this chapter).
Director representing employee shareholders.
Director representing employees.
Overview of the Committees
Audit Committee
Governance and Ethics
Committee
Compensation
Committee
4 members
100% independent
Marie-Christine
Coisne-Roquette*
Patrick Artus
Maria van der Hoeven
Gérard Lamarche
3 members
100% independent
Patricia Barbizet*
Anne-Marie Idrac
Jean Lemierre
4 members
100% independent (a)
Gérard Lamarche*
Patricia Barbizet
Marie-Christine
Coisne-Roquette
Renata Perycz
Strategic & CSR
Committee
5 members
80% independent
Patrick Pouyanné*
Patrick Artus
Patricia Barbizet
Anne-Marie Idrac
Jean Lemierre
(a)
Excluding the director representing employee shareholders, in accordance with the recommendations of the AFEP-MEDEF Code (point 8.3).
* Chairperson of the Committee.
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Changes to the composition of the Board of Directors and the Committees since the Shareholders’ Meeting
of May 26, 2017
As of March 14, 2018
Effective
date
Departure
Appointment
Renewal
Ms. Patricia Barbizet(a)
Ms. Marie-Christine
Coisne-Roquette(a)
Mr. Patrick Pouyanné
Mr. Patrick Artus(a)
Ms. Anne-Marie Idrac(a)
Board of Directors
05/26/2017 Mr. Paul Desmarais, Jr
Mr. Mark Cutifani(a)
Ms. Barbara Kux(a)
Mr. Carlos Tavares(a)
Mr. Marc Blanc(b)
Ms. Christine Renaud(b)
06/01/2018*
Audit Committee
05/26/2017
Ms. Maria
van der Hoeven(a)
Governance and Ethics
Committee
05/26/2017
Ms. Barbara Kux(a)
Mr. Jean Lemierre(a)
Compensation Committee 05/26/2017
Strategic & CSR
Committee
05/26/2017
Ms. Renata Perycz(c)
Ms. Barbara Kux(a)
Ms. Anne-Marie Idrac(a)
Mr. Marc Blanc(b)
Mr. Jean Lemierre(a)
*
(a)
(b)
(c)
Subject to the approval of the resolutions by the Shareholders’ Meeting of June 1, 2018.
Independent director.
Director representing employees.
Director representing employee shareholders.
4.1.1.1
Profile, experiences and expertises of the directors
(information as of December 31, 2017)(1)
PATRICK POUYANNÉ
Chairman and Chief Executive Officer of TOTAL S.A.*
Chairman of the Strategic & CSR Committee
Biography & Professional Experience
Born on June 24, 1963
(French)
Director of TOTAL S.A.
since the Ordinary
Shareholders’ Meeting
of May 29, 2015
Expiry date of term of office:
Ordinary Shareholders’
Meeting of June 1, 2018
Number of TOTAL shares
held: 85,072.
Number of Total Actionnariat
France collective investment
fund units held: 8,565.90
(as of 12/31/2017)
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 became Chief Executive Officer of TOTAL S.A. and Chairman of the Group’s
Executive Committee. 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. Patrick Pouyanné thus became the Chairman and Chief Executive Officer of TOTAL
S.A.
Main function: Chairman and Chief Executive Officer of TOTAL S.A.*
(1)
Including information pursuant to Article L. 225-37-4 of the French Commercial Code or item 14.1 of Annex I of EC Regulation No. 809/2004 of April 29,
2004. For information relating to directorships, the companies marked with an asterisk are listed companies.
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Business address:
TOTAL S.A.
2 place Jean Millier,
La Défense 6, 92400
Courbevoie, France
Directorships and functions held at any company during the 2017 fiscal year
Within the TOTAL Group
–
Chairman and Chief Executive Officer of TOTAL S.A.* and Chairman of the Strategic & CSR Committee
Outside the TOTAL Group
–
Director of Cap Gemini S.E.* (since May 10, 2017) and member of the Strategy and Investments
Committee (since September 1, 2017)
Directorships that have expired in the previous five years
–
–
Chairman and Director of Total Raffinage Chimie until 2014
Chairman and Director of Total Petrochemicals & Refining SA/NV until 2014
PATRICK ARTUS
Independent Director
Member of the Audit Committee
Member of the Strategic & CSR Committee
Biography & Professional Experience
4
Born on October 14,
1951 (French)
Director of TOTAL S.A.
since the Ordinary
Shareholders’ Meeting
of May 15, 2009
Last renewal: Ordinary
Shareholders’ Meeting
of May 29, 2015
Expiry date of term of office:
Ordinary Shareholders’
Meeting of June 1, 2018
Number of TOTAL shares
held: 1,000 (as of 12/31/2017)
Business address:
Natixis
47 quai d’Austerlitz
75013 Paris, France
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.
Main function: Head of the Research Department and member of the Executive Committee of Natixis*
Directorships and functions held at any company during the 2017 fiscal year
Within the Natixis group
–
Head of the Research Department and member of the Executive Committee of Natixis*
Outside the Natixis group
–
–
Director of TOTAL S.A.* and member of the Audit Committee and the Strategic & CSR Committee
Director of IPSOS*
Directorships that have expired in the previous five years
None
PATRICIA BARBIZET
Independent Director - Lead Independent Director
Chairwoman of the Governance and Ethics Committee
Member of the Compensation Committee
Member of the Strategic & CSR Committee
Biography & Professional Experience
A graduate of École Supérieure de Commerce de Paris (ESCP-Europe) in 1976, Patricia Barbizet started her
career in the Treasury division of Renault Véhicules Industriels, and then as CFO of Renault Crédit
International. In 1989, she joined the group of François Pinault as CFO, and was CEO of Artémis, the Pinault
family’s investment company, between 1992 and 2018. She was also CEO and Chairwoman of Christie’s
from 2014 to 2016.
Patricia Barbizet is Vice Chairwoman of the Board of Directors of Kering and Vice Chairwoman of Christie’s
PLC. She has been a member of the Board of Directors of TOTAL S.A. since 2008, and has also been a
director of Bouygues, Air France-KLM and PSA Peugeot-Citroën. She was Chairwoman of the Investment
Committee of the Fonds Stratégique d’Investissement (FSI) from 2008 to 2013.
Main function: Director of Artémis
Born on April 17, 1955
(French)
Director of TOTAL S.A. since
the Ordinary Shareholders’
Meeting of May 16, 2008
Last renewal:
Ordinary Shareholders’
Meeting of May 26, 2017
Expiry date of term of office:
2020 Ordinary Shareholders’
Meeting
Number of TOTAL shares
held: 1,050 (as of 12/31/2017)
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Business address:
Artémis
12 rue François 1er,
75008 Paris, France
Directorships and functions held at any company during the 2017 fiscal year
Within the Artémis group
–
–
–
–
–
–
–
–
–
–
–
Director and Chief Executive Officer of Artémis
Director and Vice Chairwoman of the Board of Directors of Kering S.A.*
Deputy Chairwoman of Christie’s International plc
General Manager (non-executive) and Member of the Supervisory Board of Financière Pinault
Permanent representative of Artémis, member of the Board of Directors of Agefi
Permanent representative of Artémis, member of the Board of Directors of Sebdo le Point
Member of the Management Board of Société Civile du Vignoble de Château Latour
Director of Yves Saint Laurent
Administratore & Administratore Delegato of Palazzo Grazzi
Member of the supervisory board of Ponant
Permanent representative of Artémis, member of the supervisory board of Collection Pinault Paris
Outside the Artémis group
–
–
Director of TOTAL S.A.*, Lead Independent Director, Chairwoman of the Governance and Ethics
Committee, member of the Compensation Committee and member of the Strategic & CSR Committee
Director of Groupe Fnac*
Directorships that have expired in the previous five years
–
–
–
–
–
–
–
–
Chairwoman and CEO of Christie’s International plc until December 2016
Member of the supervisory board of Peugeot S.A.* until April 2016
Director of Société Nouvelle du Théâtre Marigny until November 2015
Director of Air France-KLM* until December 2013
Director of Fonds Stratégique d’Investissement until July 2013
Director of Bouygues* until April 2013
Director of TF1* until April 2013
Board member of Gucci Group NV until April 2013
MARIE-CHRISTINE COISNE-ROQUETTE
Independent Director
Chairwoman of the Audit Committee
Member of the Compensation Committee
Biography & Professional Experience
Born on November 4, 1956
(French)
Director of TOTAL S.A. since
the Ordinary Shareholders’
Meeting of May 13, 2011
Last renewal:
Ordinary Shareholders’
Meeting of May 26, 2017
Expiry date of term of office:
2020 Ordinary Shareholders’
Meeting
Number of TOTAL
shares held: 4,311
(as of 12/31/2017)
Business address:
Sonepar
25 rue d’Astorg,
75008 Paris, France
Ms. Coisne-Roquette has a Bachelor’s Degree in English. A lawyer by training, with a French Master’s 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 became a
member of the Board of Directors of Colam Entreprendre, a family holding company that she joined full time in
1988. As Chairwoman of the Board of Colam Entreprendre and 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, Marie-Christine
Coisne-Roquette became Chairwoman of Sonepar S.A.S. in 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.
Main function: Chairwoman of Sonepar S.A.S.
Directorships and functions held at any company during the 2017 fiscal year
Within the Sonepar group
–
–
–
–
–
–
–
–
–
Chairwoman of Sonepar S.A.S.
Chairwoman of the Corporate Board of Sonepar S.A.S.
Chairwoman and Chief Executive Officer of Colam Entreprendre
Permanent representative of Sonepar S.A.S., Chairwoman of Sonepar International
Permanent representative of Sonepar S.A.S., director of Sonepar France
Permanent representative of Sonepar S.A.S., co-manager of Sonedis (société civile)
Permanent representative of Colam Entreprendre, co-manager of Sonedis (société civile)
Permanent representative of Colam Entreprendre, director of Sovemarco Europe (S.A.)
Chief Executive Officer of Sonepack S.A.S.
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Administration and management bodies
Outside the Sonepar group
–
–
–
Director of TOTAL S.A.*, Chairwoman of the Audit Committee and member of the Compensation
Committee
Co-manager of Développement Mobilier & Industriel (D.M.I.) (société civile)
Manager of Ker Coro (société civile immobilière)
Directorships that have expired in the previous five years
–
–
–
–
–
–
Chairwoman of the Board of Directors of Sonepar S.A. until 2016
Chairwoman of the Supervisory Board of Otra N.V. until 2013
Chairwoman of the Supervisory Board of Sonepar Deutschland GmbH until 2013
Director of Hagemeyer Canada, Inc., Sonepar Canada, Inc., Sonepar Iberica, Sonepar Italia Holding,
Sonepar Mexico, Sonepar USA Holdings, Inc., and Feljas et Masson S.A.S. until 2013
Member of the Supervisory Board of Sonepar Nederland B.V. until 2013
Permanent representative of Colam Entreprendre, member of the Board of Directors at Cabus & Raulot
(S.A.S.) until 2013
MARK CUTIFANI
Independent director
Biography & Professional Experience
Mr. Cutifani was appointed director and Chief Executive of Anglo American plc. on April 3, 2013. He is a
member of the Board’s Sustainability Committee and chairs the Group Management Committee. Mr. Cutifani
has 41 years of experience in the mining industry in various parts of the world, covering a broad range of
products. Mark Cutifani is a non-executive director of Anglo American Platinum Limited, Chairman of Anglo
American South Africa and Chairman of De Beers plc. He previously held the post of Chief Executive Officer of
AngloGold Ashanti Limited. Before joining AngloGold Ashanti, Mr. Cutifani was COO responsible for global
nickel business of Vale. Prior to that, he held various management roles at Normandy Group, Sons of Gwalia,
Western Mining Corporation, Kalgoorlie Consolidated Gold Mines and CRA (Rio Tinto).
Mr. Cutifani has a degree in Mining Engineering (with honors) from the University of Wollongong in Australia.
He is a Fellow of the Royal Academy of Engineering, the Australasian Institute of Mining and Metallurgy and
the Institute of Materials, Minerals and Mining in the United Kingdom.
Mr. Cutifani received an honorary doctorate from the University of Wollongong in Australia in 2013 and an
honorary doctorate from Laurentian University in Canada in 2016.
Main function: Chief Executive of Anglo American plc.*
Directorships and functions held at any company during the 2017 fiscal year
4
Within the Anglo American group
–
–
–
–
Director and Chief Executive of Anglo American plc.*
Non-executive director of Anglo American Platinum Limited
Chairman of Anglo American South Africa
Chairman of De Beers plc.
Outside the Anglo American group
–
Director of TOTAL S.A.* since May 26, 2017
Directorships that have expired in the previous five years
–
Chief Executive Officer of AngloGold Ashanti Limited
Born on May 2, 1958
(Australian)
Director of TOTAL S.A.
since the Ordinary
Shareholders’ Meeting
of May 26, 2017
Expiry date of term of office:
2020 Ordinary Shareholders’
Meeting
Number of TOTAL
shares held: 2,000
(as of 12/31/2017)
Business address:
Anglo American PLC Group
20 Carlton House Terrace,
London, SWY5AN,
United Kingdom
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MARIA VAN DER HOEVEN
Independent director
Member of the Audit Committee
Biography & Professional Experience
Born on September 13, 1949
(Dutch)
Director of TOTAL S.A.
since the Ordinary
Shareholders’ Meeting
of May 24, 2016
Expiry date of term of office:
2019 Ordinary Shareholders’
Meeting
Number of TOTAL
shares held: 1,000
(as of 12/31/2017)
Business address:
Pommardlaan 17,
6213GV Maastricht,
Netherlands
Ms. van der Hoeven trained as a teacher, becoming 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 Limbourg Technology Center. She was a
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 September 2015, Ms. van der Hoeven joined the Board of Trustees
of Rocky Mountain Institute (USA) and in the spring of 2016, became a member of the supervisory board of
Innogy SE (Germany). Since October 2016, Ms. van der Hoeven has been Vice Chairwoman of the High-level
Panel of the European Decarbonisation Pathways Initiative within the European Commission.
Main function: Independent director
Directorships and functions held at any company during the 2017 fiscal year
–
–
–
Director of TOTAL S.A.* and, since May 26, 2017, member of the Audit Committee
Member of the Supervisory Board of Innogy SE*
Member of the Board of Trustees of Rocky Mountain Institute (USA)
Directorships that have expired in the previous five years
–
Member of the Supervisory Board of RWE AG (Germany)
ANNE-MARIE IDRAC
Independent Director
Member of the Governance and Ethics Committee
Member of the Strategic & CSR Committee
Biography & Professional Experience
Born on July 27, 1951
(French)
Director of TOTAL S.A.
since the Ordinary
Shareholders’ Meeting
of May 11, 2012
Last renewal:
Ordinary Shareholders’
Meeting of May 29, 2015
Expiry date of term of office:
Ordinary Shareholders’
Meeting of June 1, 2018
Number of TOTAL
shares held: 1,349
(as of 12/31/2017)
Business address:
9 place Vauban,
75007 Paris, France
A graduate of Institut d’Études 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.
Main function: Independent director
Directorships and functions held at any company during the 2017 fiscal year
–
–
–
–
–
Chairwoman of the Supervisory Board of Toulouse-Blagnac Airport (until May 2018)
Director of TOTAL S.A.*, member of the Governance and Ethics Committee and, since May 26, 2017,
member of the Strategic & CSR Committee
Director of Air France-KLM* since November 2017
Director of Bouygues*
Director of Saint Gobain*
Directorships that have expired in the previous five years
–
–
Member of the Supervisory Board of Vallourec until 2015
Director of Mediobanca S.p.A. (Italy) until 2014
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GÉRARD LAMARCHE
Independent Director
Chairman of the Compensation Committee
Member of the Audit Committee
Biography & Professional Experience
Born on July 15, 1961
(Belgian)
Director of TOTAL S.A.
since January 12, 2012
Last renewal:
Ordinary Shareholders’
Meeting of May 24, 2016
Expiry date of term of office:
2019 Ordinary Shareholders’
Meeting
Number of TOTAL
shares held: 2,957
(as of 12/31/2017)
Business address:
Groupe Bruxelles Lambert
24, avenue Marnix,
1000 Brussels, Belgium
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., SGS S.A. (Switzerland) and Umicore (Belgium).
4
Main function: Deputy Managing Director of Groupe Bruxelles Lambert*
Directorships and functions held at any company during the 2017 fiscal year
Within Groupe Bruxelles Lambert*
–
Deputy Managing Director of Groupe Bruxelles Lambert*
Within holdings of Groupe Bruxelles Lambert
–
–
–
–
Director of TOTAL S.A.*, Chairman of the Compensation Committee and member of the Audit Committee
Director and Chairman of the Audit Committee of LafargeHolcim Ltd*
Director of SGS S.A.*
Director of Umicore*
Directorships that have expired in the previous five years
–
–
–
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
JEAN LEMIERRE
Independent Director
Member of the Governance and Ethics Committee
Member of the Strategic & CSR Committee
Biography & Professional Experience
Born on June 6, 1950
(French)
Director of TOTAL S.A.
since the Ordinary
Shareholders’ Meeting
of May 24, 2016
Expiry date of term of office:
2019 Ordinary Shareholders’
Meeting
Number of TOTAL
shares held: 1,028
(as of 12/31/2017)
Business address:
BNP Paribas
3 rue d’Antin,
75002 Paris, France
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’Études Prospectives et d’Informations Internationales (CEPII), and a member of the Institute of International
Finance (IIF).
Main function: Chairman of the Board of Directors of BNP Paribas*
Directorships and functions held at any company during the 2017 fiscal year
Within the BNP Paribas group
–
–
Chairman of the Board of Directors of BNP Paribas*
Director of TEB Holding AS
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REPORT ON CORPORATE GOVERNANCE
Administration and management bodies
Outside the BNP Paribas group
–
–
–
–
–
–
–
Director of TOTAL S.A.* and, since May 26, 2017, member of the Governance and Ethics Committee and
member of the Strategic & CSR Committee
Chairman of Centre d’Études Prospectives et d’Informations Internationales (CEPII)
Member of the Institute of International Finance (IIF)
Member of the International Advisory Board of Orange*
Member of the International Advisory Council of China Development Bank* (CDB)
Member of the International Advisory Council of China Investment Corporation (CIC)
Member of the International Advisory Panel (IAP) of the Monetary Authority of Singapore (MAS)
Directorships that have expired in the previous five years
–
Director of Bank Gospodarki Zywnosciowej (BGZ) (Poland) until 2014
RENATA PERYCZ
Director representing employee shareholders
Member of the Compensation Committee
Biography & Professional Experience
Ms. Perycz is a graduate of the University of Warsaw, the École 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.
Main function: Human Resources and Internal Communications Director of Total Polska sp. z.o.o. (TOTAL
Group)
Directorships and functions held at any company during the 2017 fiscal year
–
Director representing employee shareholders of TOTAL S.A.* and, since May 26, 2017, member of the
Compensation Committee
Directorships that have expired in the previous five years
None
Born on November 5, 1963
(Polish)
Director of TOTAL S.A.
since the Ordinary
Shareholders’ Meeting
of May 24, 2016
Expiry date of term of office:
2019 Ordinary Shareholders’
Meeting
Number of TOTAL
shares held: 399.
Number of Total
Actionnariat International
Capitalisation collective
investment fund units held:
1,349.96
Number of Total International
Capital collective investment
fund units held: 36.10 (as of
12/31/2017)
Business address:
Total Polska Sp. Z o.o.
Al. Jana Pawla II 80, 00-175
Warsaw – Poland
112
REGISTRATION DOCUMENT 2017
Born on May 7, 1968
(French)
Director representing
employees of TOTAL S.A.
since the Ordinary
Shareholders’ Meeting
of May 26, 2017
Expiry date of term of office:
2020 Ordinary Shareholders’
Meeting
Number of TOTAL
shares held: 200
Number of Total Actionnariat
France collective investment
fund units held: 1,565.59
(as of 12/31/2017)
Business address:
TOTAL S.A.
2 place Jean Millier,
La Défense 6,
92400 Courbevoie, France
Born on August 14, 1958
(Portuguese)
Director of TOTAL S.A.
since the Ordinary
Shareholders’ Meeting
of May 26, 2017
Expiry date of term of office:
2020 Ordinary Shareholders’
Meeting
Number of TOTAL
shares held: 1,000
(as of 12/31/2017)
Business address:
Peugeot S.A.
7 rue Henri Ste Claire Deville
92500 Rueil-Malmaison,
France
REPORT ON CORPORATE GOVERNANCE
Administration and management bodies
CHRISTINE RENAUD
Director representing employees
Biography & Professional Experience
A graduate of the Institut Universitaire de Technologie en Chimie at Poitiers University, Ms. Renaud began her
career with the Group in 1990 as an analytical development technician for Sanofi (Ambarès site) and then the
Groupement de Recherches de Lacq (GRL). In 2004, she joined the organic analysis laboratory at the Pôle
d’Études et de Recherches de Lacq (PERL), before helping to set up a new research laboratory. During her
time at GRL, Ms. Renaud was elected as a member of the Works Committee before holding office as a union
representative and member of the Group’s European Committee from 2004 to 2011. At the end of 2011, Ms.
Renaud was elected as Secretary of the Group’s European Committee. Her term of office was renewed in
2013 until April 5, 2017. At its meeting of March 30, 2017, the UES Amont Central Works Council – Global
Services – Holding appointed Ms. Renaud as director representing employees on the Board of Directors of
TOTAL S.A. as of May 26, 2017, for a period of three years expiring following the 2020 Shareholders’ Meeting
of TOTAL S.A.
Main function: TOTAL S.A.* employee
Directorships and functions held at any company during the 2017 fiscal year
–
Director representing employees of TOTAL S.A.* since May 26, 2017
Directorships that have expired in the previous five years
None
4
CARLOS TAVARES
Independent director
Biography & Professional Experience
A graduate of the École Centrale de Paris, Mr. Carlos Tavares held various positions of responsibility within
the Renault group between 1981 and 2004, before joining the Nissan group. Having been Executive Vice
President, Chairman of the Management Committee Americas and President of Nissan North America, he
was then Group Chief Operating Officer of the Renault Group from 2011 to 2013. He joined the Managing
Board of Peugeot S.A. on January 1, 2014, and was appointed Chairman of the Managing Board on
March 31, 2014.
Main function: Chairman of the Managing Board of Peugeot S.A.*
Directorships and functions held at any company during the 2017 fiscal year
Within the Peugeot group
–
–
–
–
Chairman of the Managing Board of Peugeot S.A.*
Director of Banque PSA Finance
Director of Faurecia*
Chairman of the Board of Directors of Peugeot Citroën Automobiles S.A.*
Outside the Peugeot group
–
–
Director of TOTAL S.A.* since May 26, 2017
Director of AIRBUS Group*
Directorships that have expired in the previous five years
–
–
–
–
–
–
Chief Operating Officer of Renault and member of the Management Board of the Renault-Nissan Alliance
Director of Renault Nissan B.V.
Director of PCMA Holding B.V.
Director of Avtovaz
Director of Alpine-Caterham
Chairman of the Management Committee of Nissan Americas
REGISTRATION DOCUMENT 2017
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REPORT ON CORPORATE GOVERNANCE
Administration and management bodies
Directorships of TOTAL S.A. expired in 2017
MARC BLANC
Born on December 7, 1954
(French)
Director representing
employees of TOTAL S.A.
from November 4, 2014
until the Ordinary
Shareholders’ Meeting
of May 26, 2017
Born on July 3, 1954
(Canadian)
Director of TOTAL S.A.
from 2002 until the Ordinary
Shareholders’ Meeting
of May 26, 2017
Director representing employees and member of the Strategic Committee until May 26, 2017
Biography & Professional Experience
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.
In 2017, he also co-authored an opinion entitled “Towards a sustainable bioeconomy” (Vers une bioéconomie
durable) with Jean-David Abel.
Main function: TOTAL S.A.* employee
Directorships and functions held at any company during the 2017 fiscal year
–
Director representing employees of TOTAL S.A.* and member of the Strategic Committee until May 26,
2017
Directorships that have expired in the previous five years
–
Director representing employees of TOTAL S.A.* until May 26, 2017
PAUL DESMARAIS, JR
Director until May 26, 2017
Biography & Professional Experience
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.
Main function: Chairman & Co-Chief Executive Officer of Power Corporation of Canada*
Directorships and functions held at any company during the 2017 fiscal year
–
–
–
–
–
–
–
–
Chairman & Co-Chief Executive Officer of Power Corporation of Canada*
Executive Co-Chairman of Power Financial Corporation*
Chairman of the Board of Directors and Co-Chief Executive Officer of Pargesa Holding S.A.*
Director and member of the Executive Committee of Great-West Lifeco Inc.*
Director and member of the Executive Committee of The Great-West Life Assurance Company
Director and member of the Executive Committee of Great-West Life & Annuity Insurance Company
Vice-Chairman of the Board, Director and member of the Standing Committee of Groupe Bruxelles
Lambert S.A.*
Director and member of the Executive Committee of Investors Group Inc.
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REGISTRATION DOCUMENT 2017
REPORT ON CORPORATE GOVERNANCE
Administration and management bodies
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Director and member of the Executive Committee of London Life Insurance Company
Director and member of the Executive Committee of Mackenzie Inc.
Director and Deputy Chairman of the Board of La Presse ltée
Director and Deputy Chairman of Gesca Itée
Director and member of the Nomination, Compensation and Governance Committee of LafargeHolcim Ltd*
Director and member of the Executive Committee of The Canada Life Assurance Company
Director and member of the Executive Committee of Canada Life Financial Corporation
Director and member of the Executive Committee of IGM Financial Inc.*
Director and member of the Executive Committee of The Canada Life Assurance Company
Director of 152245 Canada Inc.
Director of GWL&A Financial Inc.
Director of Great-West Life & Annuity Insurance Company of New York
Director of Power Communications Inc.
Director and Chairman of the Board of Power Corporation International
Director and member of the Executive Committee of Putnam Investments, LLC
Member of the Supervisory Board of Power Financial Europe B.V.
Director and member of the Executive Committee of The Canada Life Insurance Company of Canada
Director and Deputy Chairman of the Board of Square Victoria Communications Group Inc.
Member of the Supervisory Board of Parjointco N.V.
Director of SGS S.A.*
4
Directorships that have expired in the previous five years
–
–
–
–
–
–
–
Director of TOTAL S.A.* until May 26, 2017
Director of Great West Financial Inc.
Director and member of the Executive Committee of London Insurance Group Inc.
Director of Great-West Financial (Nova Scotia) Co.
Director of Canada Life Capital Corporation Inc. until 2015
Director of Lafarge* until 2015
Director of GDF Suez* until 2014
BARBARA KUX
Born on February 26, 1954
(Swiss)
Independent director and member of the Governance and Ethics Committee and the Strategic
Committee until May 26, 2017
Director of TOTAL S.A.
from 2011 until the Ordinary
Shareholders’ Meeting
of May 26, 2017
Biography & Professional Experience
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 was appointed by the European Commission to the newly established high level
Decarbonisation Pathways Panel. She has been director of the INSEAD Residence for Corporate Governance
since 2017.
Main function: Independent director
Directorships and functions held at any company during the 2017 fiscal year
–
–
–
–
–
Director of TOTAL S.A.*, member of the Governance and Ethics Committee and the Strategic Committee
until May 26, 2017
Director of Engie S.A.*
Director of Pargesa Holding S.A.*
Member of the Supervisory Board of Henkel*
Vice Chairwoman of the Board of Directors of Firmenich S.A.
Directorships that have expired in the previous five years
–
–
–
Director of TOTAL S.A.* until May 26, 2017
Member of the Board of Directors of Umicore* until 2017
Member of the Management Board of Siemens AG* until 2013
REGISTRATION DOCUMENT 2017
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4
REPORT ON CORPORATE GOVERNANCE
Administration and management bodies
4.1.1.2
Absence of conflicts of interest
or convictions
The Board of Directors’ Rules of Procedure stipulate the specific rules
for preventing conflicts of interest applicable to directors in the
following terms (refer to point 4.1.2.1 of this chapter for the full
version of the Rules of Procedure):
“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.
inform
their
Directors must
participation
involves the
in any transaction that directly
Company, or any Group company, before such transaction is
finalized.
the Board of Directors of
Directors must not assume personal
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.
responsibilities
Directors undertake not to seek or accept from the Company, or
from companies directly or
the
Company, any advantages liable to be considered as being of a
nature that may compromise their independence.”
indirectly connected
to
the Lead
Within the Governance and Ethics Committee,
Independent Director organizes
the performance of due
diligence in order to identify and analyze potential conflicts of
interest within the Board of Directors. He 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.”
The Lead Independent Director has performed due diligence in order
to identify and analyze potential conflicts of interest. She has informed
the Chairman and Chief Executive Officer of the potential conflicts of
interest identified as a result. In this regard, the Lead Independent
Director was consulted in April 2017 by a director about a potential
conflict of interest arising due to that director’s possible membership
of a gas-related Committee in a European country. The director in
question decided not to take up the offer made to him to chair the
Committee.
On the basis of the work carried out, 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
116
REGISTRATION DOCUMENT 2017
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 current members of the Board of Directors of the Company have
declared to the Company that they have not been convicted, have
not been associated with a bankruptcy, receivership or liquidation,
and have not been incriminated or publicly sanctioned or disqualified,
as stipulated in item 14.1 of Annex I of EC Regulation 809/2004 of
April 29, 2004.
4.1.1.3
Plurality of directorships held by
directors
The number of directorships held by the directors at listed companies
outside their group, including foreign companies, was assessed as of
December 31, 2017 in accordance with the recommendations of the
AFEP-MEDEF Code, point 18, which states that “an executive officer
should not hold more than two other directorships in listed
corporations, including foreign corporations, not affiliated with his or
her group. [This] limit […] does not apply to directorships held by an
executive officer in subsidiaries and holdings, held alone or together
with others, of companies whose main activity is to acquire and
manage such holdings. […] A director should not hold more than four
other directorships
foreign
in
corporations not affiliated with his or her group.”
listed corporations,
including
Summary of other directorships held
by members of the Board of Directors
Number of
directorships
held at
outside listed
companies(a)
1
2
2
1
1
2
4
4
1
0
0
2
Compliance
with the criteria
of the AFEP-
MEDEF Code
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
Patrick Pouyanné
Patrick Artus
Patricia Barbizet
Marie-Christine
Coisne-Roquette
Mark Cutifani
Maria van der Hoeven
Anne-Marie Idrac
Gérard Lamarche
Jean Lemierre
Renata Perycz
Christine Renaud
Carlos Tavares
(a)
In accordance with the criteria of the AFEP-MEDEF Code.
Director independence
4.1.1.4
At its meeting on February 7, 2018, the Board of Directors, on the
proposal of the Governance and Ethics Committee, reviewed the
independence of the Company’s directors as of December 31, 2017.
At the Committee’s proposal, the Board considered that, pursuant to
the AFEP-MEDEF Code to which the Company refers, 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”.
“7.2.5 Prevention of conflicts of interest
As of December 31, 2017
For each director, this assessment relies on the independence criteria
set
in
November 2016, as described below:
in point 8.5 of the AFEP-MEDEF Code, revised
forth
(cid:142)
"not to be or not to have been during the course of the previous
five years:
–
–
–
an employee or executive officer of the corporation,
an employee, executive officer of a company or a director of a
company consolidated within the corporation,
an employee, executive officer or director of the company's
parent company or a company consolidated within this parent;
not to be an executive officer of a company in which the
corporation holds a directorship, directly or indirectly, or in which
an employee appointed as such or an executive officer of the
corporation (currently in office or having held such office within the
last five years) is a director;
not to be a customer, supplier, commercial banker or investment
banker:
–
–
that is material to the corporation or its group,
or for a significant part of whose business the corporation or its
group accounts.
The evaluation of the significant or non-significant relationship with
the company or its group must be debated by the Board and the
quantitative criteria that lead to the evaluation (continuity, economic
dependence, exclusivity, etc.) must be explicitely stated in the
annual report;
not to be related by close family ties to a company officer;
not to have been an auditor of the corporation within the previous
five years;
not to have been a director of the corporation 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."
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
The AFEP-MEDEF Code stipulates that non-executive directors
cannot be considered
receive variable
independent
compensation in cash or in the form of shares or any other
compensation linked to the performance of the company or group.
they
if
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.
As such, concerning
independence of Mses. Barbizet,
Coisne-Roquette, van der Hoeven and Idrac and Messrs. Artus,
Cutifani, Lamarche, Lemierre and Tavares, it was confirmed that the
independence analyses carried out previously continue to be relevant.
the
In particular, the following information was noticed:
(cid:142)
The level of activity between Group companies and companies of
BNP Paribas, of which Mr. Lemierre is Chairman of the Board of
Directors, did not represent a material part of the financial
institution’s overall business (the business of the Group companies
with BNP Paribas being less than 0.1% of the bank’s net banking
income(1)), or a material part of the total amount of external
financing of the Group’s activities (2.5%). The Board confirmed the
absence of economic dependence and exclusivity in the activities
4
REPORT ON CORPORATE GOVERNANCE
Administration and management bodies
(cid:142)
(cid:142)
(cid:142)
(cid:142)
between the two groups. It thus concluded that Mr. Lemierre could
be deemed to be an independent director;
The level of activity between Group companies and companies of
the Natixis group, of which Mr. Artus is a member of the Executive
Committee, did not represent a material part of the group’s overall
business (the business of the Group companies with Natixis being
less than 0.3% of the bank’s net banking income(2)), or a material
part of the total amount of external financing of the Group’s
activities (4.4%). The Board confirmed the absence of economic
dependence and exclusivity in the activities between the two
groups. It thus concluded that Mr. Artus could be deemed to be
an independent director;
Regarding Peugeot S.A., of which Mr. Tavares is Chairman of the
Managing Board, on one hand, sales of the Group to Peugeot S.A.
in 2017 (i.e., €294 million) represented 0.19% of the consolidated
turnover of the Group ($171 billion, i.e., €152 billion) and on the
other hand, the amount of purchases made by the Group from
Peugeot S.A. in 2017 (i.e., €53 million) represented 0.19% of the
overall amount of purchases made by the Group in 2017
(€27 billion(3)). The portion of the business made by the Group with
Peugeot S.A. cannot be considered to be material. Moreover, for
Peugeot S.A., on one hand, the amount of purchases made by
Peugeot with the Group in 2017 (i.e., €294 million) represented
1.7% of the overall amount of purchases made by Peugeot S.A. in
2017 (i.e., €17 billion) and, on the other hand, the amount of sales
made by Peugeot S.A. in 2017 to the Group (i.e., €53 million)
amounted to 0.01% of the 2016 consolidated turnover of Peugeot
S.A. (i.e., €54 billion). The portion of the business made by
Peugeot S.A. with the Group cannot be considered to be material
for Peugeot S.A. The Board confirmed the absence of economic
dependence and exclusivity in the activities between the two
groups. It thus concluded that Mr. Tavares could be deemed to be
an independent director;
Regarding Anglo American plc., of which Mr. Cutifani is Chief
Executive, on one hand, sales of the Group to Anglo American plc.
in 2017 (i.e., $313 million) represented 0.18% of the 2017
consolidated turnover of the Group (i.e., $171 billion) and on the
other hand, the amount of purchases made by the Group from
Anglo American plc. in 2017 was insignificant (less than €20,000).
The portion of the business made by the Group with Anglo
American plc. cannot be considered to be material for the Group.
Moreover, for Anglo American plc., on one hand, the amount of
purchases made by Anglo American plc. with the Group in 2017
(i.e., $313 billion) represented 3% of the overall amount of
purchases made by Anglo American plc. in 2017 (i.e., $10.2 billion)
and, on the other hand, the amount of sales made by Anglo
American plc. in 2017 to the Group was insignificant (less than
€20,000). The portion of the business made by Anglo American
plc. with the Group cannot be considered to be material for Anglo
American plc. The Board confirmed the absence of economic
dependence and exclusivity in the activities between the two
groups. It thus concluded that Mr. Cutifani could be deemed to be
an independent director;
The level of activity between Group companies and companies of
the Sonepar group, of which Ms. Coisne-Roquette is Chairwoman,
did not represent a material part of the overall business of the
Sonepar group (the purchases made by Group companies from
the Sonepar group representing €1.6 million in 2017, i.e., 0.005%
of the overall purchases made by the Group in 2017 of €27 billion).
The Board confirmed the absence of economic dependence and
exclusivity in the activities between the two groups. It thus
concluded that Ms. Coisne-Roquette could be deemed to be an
independent director;
(1)
(2)
(3)
Net banking income for 2017 estimated on the basis of the accounts of BNP Paribas as of September 30, 2017.
Net banking income for 2017 estimated on the basis of the accounts of Natixis as of September 30, 2017.
Excluding oil products and vessel chartering by Trading & Shipping.
REGISTRATION DOCUMENT 2017
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REPORT ON CORPORATE GOVERNANCE
Administration and management bodies
(cid:142)
(cid:142)
The level of activity between Group companies and companies of
the Artémis group, of which Ms. Barbizet is a director, did not
represent a material part of the overall business of the Artémis
group (the purchases made by Group companies from the Artémis
group being insignificant), or a material part of the Group’s
purchases
(approximately 0.00014%). The Board
confirmed the absence of economic dependence and exclusivity in
the activities between the two groups. It thus concluded that Ms.
Barbizet could be deemed to be an independent director;
in 2017
The level of the holding of stock in TOTAL S.A. by Groupe
Bruxelles Lambert, of which Mr. Lamarche is Deputy Managing
Director, which was less than 1% of the share capital as of
December 31, 2017, was not material and did not call into
question Mr. Lamarche’s independence.
Accordingly, Mses. Barbizet, Coisne-Roquette, van der Hoeven and
Idrac and Messrs. Artus, Cutifani, Lamarche, Lemierre and Tavares
were deemed to be independent directors.
Rate of independence of the Board of Directors
as of December 31, 2017 and after the 2018
Shareholders’ Meeting
Rate of
independence(a) of
the Board of
Directors
Director not
deemed
independent
As of December 31, 2017
90% Patrick Pouyanné
Following the
Shareholders’ Meeting
of June 1, 2018(b)
90% Patrick Pouyanné
(a)
(b)
Excluding the director representing employee shareholders and the director
representing employees, in accordance with the recommendations of the
AFEP-MEDEF Code (point 8.3).
Subject to approval of the resolutions by the Shareholders’ Meeting.
The percentage of independent directors on the Board based on its
composition as of December 31, 2017 was 90%(1).
4.1.1.5
The rate of independence of the Board of Directors is higher than the
rate of independence 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.
Summary of the independence of the members
of the Board of Directors
Reason for
non-compliance
Chairman and
Chief Executive
Officer of the
Company
Compliance with
the independence
criteria(a)
of the AFEP-
MEDEF Code
As of December 31, 2017
Patrick Pouyanné
Patricia Barbizet
Marie-Christine
Coisne-Roquette
Maria van der Hoeven
Anne-Marie Idrac
Patrick Artus
Mark Cutifani
Gérard Lamarche
Jean Lemierre
Carlos Tavares
✘
✔
✔
✔
✔
✔
✔
✔
✔
✔
(a)
Excluding the director representing employee shareholders and the director
representing employees, in accordance with the recommendations of the
AFEP-MEDEF Code (point 8.3).
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.
Based on its composition as of March 14, 2018, the 12 members of
the Board of Directors include 5 non-French directors, 6 male
directors and 6 female directors.
In accordance with Article L. 225-27-1 of the French Commercial
Code, the director representing employees is not taken into account
for the application of the provisions relating to the gender balance of
the Board. Therefore, the proportion of women on the Board was
45.5% as of December 31, 2017 (5 women out of 11 directors).
The 40% threshold of directors from each gender required by
Article L. 225-18-1 of the French Commercial Code was reached as
of December 31, 2017.
(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).
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Renewal of directorships proposed
to the Shareholders’ Meeting of
June 1, 2018
The directorships of Messrs. Patrick Pouyanné and Patrick Artus and
Ms. Anne-Marie Idrac will expire at the Annual Ordinary Shareholders’
Meeting of June 1, 2018.
At its meeting of March 14, 2018, the Board of Directors, on proposal
by the Governance and Ethics Committee, decided to submit to the
Annual Shareholders’ Meeting of June 1, 2018, the renewal of the
directorship of Messrs. Patrick Pouyanné and Patrick Artus and Ms.
Anne-Marie Idrac for a three-year term to expire following the Annual
Shareholders’ Meeting held in 2021 to approve the 2020 financial
statements.
Mr. Patrick Artus will continue to provide the Group with the benefit of
his expertise in economics and his in-depth knowledge of the
financial and energy sectors. He will maintain his commitment by
continuing to contribute actively to the quality of the Board of
Directors’ discussions.
Ms. Anne-Marie Idrac will continue to provide the Group with the
benefit of her expertise in foreign trade and international relations, and
the managerial and operational experience that she has acquired
throughout her career.
4
4.1.1.6
Training of directors and knowledge
of the Company
4.1.1.7
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.
The director representing employees also receives in-house training
time at the Company and/or training in economics offered by an
outside body chosen by the director, after the Board Secretary has
accepted the body and the training program. This training time, which
was initially set at 20 hours per year, has been increased to 60 hours
per year by decision of the Board of Directors at its meeting of
July 26, 2017.
Since 2013, the Board of Directors has met each year at a Group
site. Having been to the CSTJF (Centre scientifique et technique Jean
Féger) in Pau, France, the Antwerp platform in Belgium, the Bu Hasa
field in Abu Dhabi and the Laggan project site in the North Sea, in
October 2017, the Board of Directors visited the Group’s research
center in Solaize, France. Meetings of the Board held at sites provide
an opportunity to meet Group employees. They supplement the
directors’ training in the specifics of the Group and contribute to the
integration of new directors.
The directors also have regular contact with Group management,
including members of the Executive Committee at Board meetings
and operational managers during visits to the Group’s sites. These
interactions between directors and managers help the directors to
gain a concrete understanding of the Group’s activities.
4.1.2
Practices of the Board of Directors
9
MEETINGS OF
THE BOARD
OF DIRECTORS
IN 2017
93.5%
AVERAGE BOARD
MEETING ATTENDANCE
RATE OF
THE DIRECTORS
1
EXECUTIVE SESSION
CHAIRED BY THE LEAD
INDEPENDENT
DIRECTOR
4.1.2.1
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. 2312-75 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 combination of the
functions of Chairman of the Board and Chief Executive Officer 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/Our identity/Our
governance”.
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Administration and management bodies
The Board of Directors of TOTAL S.A.(1) approved the following
Rules of Procedure.
◗
1. ROLE OF THE BOARD OF DIRECTORS
the Company and supervises
The Board of Directors is a collegial body that determines the
the
strategic direction of
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:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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;
information on significant events related to the
reviewing
Company’s operations,
investments and
divestments involving amounts exceeding 1% of shareholders’
equity;
in particular
for
conducting any audits and investigations it deems appropriate. In
the Audit
particular,
Committee, ensures that:
the assistance of
the Board, with
–
–
–
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
their mission
statutory auditors are able
satisfactorily, and
to perform
–
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.
◗
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
to maintain,
Directors undertake
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.
in all circumstances,
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
they deem
executive directors any additional
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.
information
Unless unable, in which case the Chairman of the Board shall be
provided 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.
(1)
(2)
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”.
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.
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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
information remains confidential.
Confidentiality and privacy are lifted when such information is
made publicly available by the Company.
to ensure
that
the
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.
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.
that end, directors must comply with
To
requirements:
the
following
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,
4
REPORT ON CORPORATE GOVERNANCE
Administration and management bodies
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 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;
instruments or one or more
financial
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:
(cid:142)
(cid:142)
during the ten trading days preceding and the three trading days
following
the Consolidated Financial
Statements or, failing that, the annual financial statements, are
made public, and
the date on which
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:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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 timeframe provided by applicable law, to
the French securities regulator (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.
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◗
3. FUNCTIONING OF THE BOARD OF DIRECTORS
◗
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
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.
the preparation
◗
the Company
represents
third parties and chairs
5. AUTHORITY OF THE CHIEF EXECUTIVE OFFICER
The Chief Executive Officer is responsible for the Company’s
overall management. He
its
relationships with
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.
in
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.
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.
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.
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4
◗
6. BOARD COMMITTEES
The Board of Directors approved the creation of:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
an Audit Committee;
a Governance and Ethics Committee;
a Compensation Committee; and
a Strategic Committee(1).
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.
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 duties at any time. If
for any reason the director
longer deemed to be
independent, his or her position as Lead Independent Director will
be terminated.
is no
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 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
to attend meetings and
invited
participates in the work of the Compensation Committee relating
to the annual review of the executive directors’ performance and
recommendations regarding their compensation.
is
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
the Governance and Ethics Committee,
the Lead
Within
Independent Director organizes the performance of due diligence
in order to identify and analyze potential conflicts of interest within
the Board of Directors. He 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
that he deems
appropriate to this end.
recommendations
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 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.
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 Lead
Independent Director may receive additional director’s fees for the
duties entrusted to him or her.
the Board of Directors,
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)
Since September 20, 2017, the Committee has been renamed Strategic & CSR Committee and its remit has been broadened to cover Corporate Social
Responsibility (CSR) and questions relating to the inclusion of climate-related issues in the Group's strategy.
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4.1.2.2
Activity of the Board of Directors in 2017
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 nine meetings in 2017. The global
attendance rate for the directors was 93.5%. The Audit Committee
held 7 meetings, with an attendance rate of 92%; the Compensation
Committee met 3 times, with 100% attendance; the Governance and
Ethics Committee held 2 meetings, with 83.3% attendance; and the
Strategic & CSR 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 2017
Directors
Board of
Directors
Audit
Committee
Compensation
Committee
Governance and Ethics
Committee
Strategic &
CSR Committee
Attendance
rate
Number of
meetings
Attendance
rate
Number of
meetings
Attendance
rate
Number of
meetings
Attendance
rate
Number of
meetings
Attendance
rate
Number of
meetings
Patrick Pouyanné
Patrick Artus
Patricia Barbizet
Marc Blanc(a)
Marie-Christine
Coisne-Roquette
Mark Cutifani(c)
Paul Desmarais, Jr(a)
Maria van der Hoeven
Anne-Marie Idrac
Barbara Kux(a)
Gérard Lamarche
Jean Lemierre
Renata Perycz
Christine Renaud(d)
Carlos Tavares(d)
100%
100%
100%
100%
100%
100%
25%
100%
100%
100%
67%
100%
100%
100%
80%
9/9
9/9
9/9
4/4
9/9
5/5
1/4
9/9
9/9
4/4
6/9
9/9
9/9
5/5
4/5
-
86%
-
-
-
6/7
-
-
-
-
100%
-
100%
7/7
100%
-
-
75%
-
-
-
-
3/4
-
-
-
-
-
-
-
100%
7/7
100%
-
-
-
-
-
-
-
-
-
100%
-
-
100%
-
-
3/3
-
3/3
-
-
-
-
-
3/3
-
1/1
-
-
-
-
100%
-
-
-
-
-
100%
0%
-
100%
-
-
-
83.3%
-
-
2/2
-
-
-
-
-
2/2
0/1
-
1/1
-
-
-
100%
50%
100%
100%
-
-
-
-
100%(c)
100%
-
100%(c)
-
-
-
90%(e)
2/2
1/2
2/2
1/1
2/2(b)
-
-
2/2(b)
2/2(c)
1/1
1/2(b)
2/2(c)
2/2(b)
1/1(b)
-
Attendance rate
93.5%
92%
(a)
(b)
(c)
(d)
(e)
Director until May 26, 2017.
Voluntary participation (director not a member of the Strategic & CSR Committee).
Including one voluntary participation. Member of the committee since May 26, 2017.
Director since May 26, 2017.
Excluding voluntary participation.
The Board meetings included, but were not limited to, a review of the
following subjects:
February 8
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
presentation to the Board of the work of the Audit Committee at its
meeting on February 6, 2017;
closing of the 2016 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 messages of financial communications, including industrial
safety aspects;
information regarding the buyback and cancellation of treasury
shares;
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
Board of Directors’ report to the Shareholders’ Meeting regarding
purchases and sales of shares of the Company pursuant to
Article L. 225-211 of the French Commercial Code;
information about the results of the option to receive the payment
of the second interim dividend for fiscal year 2016 in shares;
renewal of the authorization to issue bonds;
renewal of the authorization to issue security, commitments and
guarantees;
request for authorization to issue guarantees;
declarations of crossing of thresholds in the Company’s share
capital;
report of the Lead Independent Director on her mandate;
124
REGISTRATION DOCUMENT 2017
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
debate on the Board of Directors’ practices based on a formal
self-assessment carried out in the form of a detailed questionnaire
answered by each director, the process of which was conducted
by the Lead Independent Director; suggestion of areas for
improvement;
presentation to the Board of the work of the Governance and
Ethics Committee at its meeting on February 8, 2017;
examination of the changes to the AFEP-MEDEF Code (revised in
November 2016);
proposal to appoint and renew directorships;
assessment of the independence of the directors;
composition of the Board’s Committees;
allocation of directors’ fees for fiscal year 2016; increase in the
additional amount paid per journey from a country outside France
in order to encourage the internationalization of
the Board of
Directors;
market abuse regulations – blackout periods; information about the
new procedure set up by the Company following the entry into
force of Regulation (EU) 596/2014;
amendment of the Rules of Procedure of the Audit Committee
following the entry into force of the order of March 17, 2016
transposing the provisions of Directive 2014/56/EU and Regulation
(EU) 537/2014 into French law;
information on transactions on the Company’s securities by the
Chairman and Chief Executive Officer;
information on the Directors & Officers liability insurance taken out
by the Company;
review of the draft Report of the Chairman of the Board of
Directors (Article L. 225-37 of the French Commercial Code);
presentation to the Board of the work of the Compensation
Committee at its meeting on February 8, 2017; and
the Chairman and Chief Executive Officer’s compensation (in his
absence).
March 15
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
presentation to the Board of the work of the Audit Committee at its
meeting on March 13, 2017;
presentation to the Board of the work of the Compensation
Committee at its meeting on March 13, 2017;
approval of the compensation policy for the Chairman and Chief
Executive Officer for fiscal year 2017;
confirmation of the acquisition rate of performance shares under
the 2014 plan;
approval of the Group’s financial policy;
preparation for the Annual Shareholders’ Meeting: approval of the
various chapters of the Registration Document forming the
management report within the meaning of the French Commercial
Code and of the related reports; setting of the agenda for the
Shareholders’ Meeting; approval of the report of the Board of
Directors and draft resolutions;
setting the schedule related to the dividend (interim dividends and
balance) for fiscal year 2018;
distribution of the third interim dividend for the 2016 fiscal year and
setting of the new share issue price for this interim dividend;
information to the Board of Directors regarding the setting of the
subscription period and price for shares of the Company for the
2017 share capital increase reserved for employees; and
(cid:142)
requests for authorization of guarantees.
4
REPORT ON CORPORATE GOVERNANCE
Administration and management bodies
April 26
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
presentation to the Board of the work of the Strategic Committee
at its meeting on March 15, 2017;
presentation of the Group’s risk map;
results for the first quarter of 2017 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 24, 2017;
setting a first interim dividend to be paid on the dividend for fiscal
year 2017;
preparation for the Annual Shareholders’ Meeting;
information and decisions regarding
increase reserved for employees;
the 2017 share capital
information about the results of the option to receive the payment
of the third interim dividend for fiscal year 2016 in shares;
request for authorization to issue guarantees;
information on declarations of thresholds in the Company’s capital
to be declared; and
information on the appointment by the Central Works Council of
Ms. Christine Renaud as director representing employees.
May 26 – pre-Shareholders’ Meeting
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
information to the Board of Directors on the situation regarding the
Group’s development project in Iran;
preparation for and organization of the Annual Shareholders’
Meeting: finalization of the responses to the written questions
submitted by shareholders;
setting of the share issue price for the payment of the balance of
the 2016 dividend, subject to the approval of the third resolution by
the Shareholders’ Meeting on May 26, 2017;
delegation of powers granted to the Chairman and Chief Executive
Officer to operate on Company shares, subject to the approval of
the fifth resolution of the Shareholders’ Meeting on May 26, 2017;
and
communication of the Central Works Council’s Opinion on the
company’s economic and financial position.
July 26
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
presentation of the planned acquisition of an interest in EREN
Renewable Energy (Eren RE);
presentation of the strategic perspectives of the Refining &
Chemicals segment including safety and energy efficiency aspects
and prevention of major environmental risks;
results for the second quarter 2017 and the first half of 2017 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
meetings on June 14, 2017 and July 24, 2017;
setting a second interim dividend to be paid on the dividend for
fiscal year 2017;
presentation to the Board of the work of the Governance and
Ethics Committee at its meeting on July 26, 2017;
approval of the Governance and Ethics Committee’s proposal to
change the amount of the directors’ fees by increasing (i) the
variable portion for each attendance at a meeting of the Board of
Directors and (ii) the Lead Independent Director’s additional fixed
annual portion;
approval of the broadening of the remit of the Strategic Committee
to cover Corporate Social Responsibility (CSR) and questions
relating to the inclusion of climate-related issues in the Group’s
strategy;
REGISTRATION DOCUMENT 2017
125
approval of the change of the Committee’s name to the Strategic
& CSR Committee;
(cid:142)
(cid:142)
determination of the conditions for the performance of the duties of
the director representing employees;
information on bond issues; and
information on the powers subdelegated to the Deputy Chief
Financial Officer and the Treasurer.
October 26 (at the Solaize research center)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
presentation to the Board of the work of the Strategic & CSR
Committee at its meeting on September 20, 2017;
strategic directions of the Gas, Renewables & Power segment;
presentation of the planned acquisition of Engie’s LNG business;
presentation of the sale of the Martin Linge field (Norway);
strategic perspectives of Marketing & Services activities, including
the operational safety, technological risk and environmental
aspects;
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;
results for the third quarter of 2017 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
meetings on September 21, 2017 and October 24, 2017;
setting a third interim dividend to be paid on the dividend for fiscal
year 2017;
information on bond issues; and
information about the results of the option to receive the payment
of the first interim dividend for fiscal year 2017 in shares.
December 12
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
presentation of the development project on the giant Libra field in
Brazil;
presentation of the Group’s 2018 budget;
Board of Directors’ response to the Central Works Council’s
opinion on the Company’s strategic directions;
distribution of the second interim dividend payable for the 2017
fiscal year and setting of the new share issue price;
agreements and commitments concluded and authorized in the
preceding periods, the execution of which continued during the
2017 fiscal period;
information on bond issues; and
request for authorization to issue guarantees.
4
REPORT ON CORPORATE GOVERNANCE
Administration and management bodies
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
reminder of the rules of confidentiality applicable to the work of the
Board of Directors;
share capital increase reserved for Group employees (TOTAL
CAPITAL 2018) and free grant of shares as a deferred contribution
in this framework;
performance share grants on the proposal of the Compensation
Committee;
information about the results of the votes on the resolutions at the
Annual Shareholders’ Meeting held on May 26, 2017 and the
results of the option to receive the payment of the remaining
balance of the dividend for fiscal year 2016 in shares; and
information on declarations of thresholds in the Company’s capital
to be declared.
August 20
(cid:142)
approval in principal of the planned acquisition of Mærsk Oil & Gas
A/S by TOTAL S.A. under a share (contribution of shares) and debt
transaction between TOTAL S.A. and AP Møller-Mærsk A/S.
September 20
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
amendment of the Rules of procedure of the Strategic & CSR
Committee as part of the broadening of the remit of the Strategic
Committee to cover Corporate Social Responsibility (CSR) and
questions relating to the inclusion of climate-related issues in the
Group’s strategy; approval of the change of the Committee’s
name to the Strategic & CSR Committee;
presentation to the Board of some of the work of the Strategic &
CSR Committee at its meeting on September 20, 2017;
strategic perspectives of Exploration & Production activities with a
presentation of safety indicators and environmental objectives;
presentation of the Group’s five-year plan;
mid-2017 financial communications: presentation of the outlook
and objectives for the coming years;
the company’s strategic directions (Article L. 2323-10 of the
French Labor Code);
distribution of the first interim dividend for the 2017 fiscal year and
setting of the new share issue price for the option to receive the
interim dividend in shares;
126
REGISTRATION DOCUMENT 2017
REPORT ON CORPORATE GOVERNANCE
Administration and management bodies
4.1.2.3
Committees of the Board of Directors
The Audit Committee
Composition
As of March 14, 2018
Independence
Years’ service on the Board
Expiry of director’s term of office
Marie-Christine Coisne-Roquette*
Patrick Artus
Maria van der Hoeven
Gérard Lamarche
*
Chairperson of the Committee.
As of March 14, 2018, the Committee is made up of four members,
with a 100% rate of independence.
The careers of the Committee members confirm their possession of
acknowledged expertise in the financial and accounting or economic
fields (refer to point 4.1.1.1 above). Ms. Coisne-Roquette was
appointed “financial expert” of the Committee by the Board at its
meeting of December 16, 2015.
the Audit Committee define
Duties
The rules of procedure of
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 TOTAL’s
website under “Our Group/Our identity/Our Governance”.
Notwithstanding the duties of the Board of Directors, the Audit
Committee is tasked with the following missions in particular:
Regarding the statutory auditors:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
making a recommendation to the Board of Directors on the
statutory auditors put before the Annual Shareholders’ Meeting for
their selection procedure
following
designation or
organized by General Management and enforcing the applicable
regulations;
renewal,
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;
ensuring that the statutory auditors meet
the conditions of
independence as defined by the regulations, and 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; and
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:
(cid:142)
following the process to produce financial information and, where
appropriate,
its
integrity, where appropriate;
recommendations
to guarantee
formulating
•
•
•
•
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
7
9
2
6
2020
2018
2019
2019
monitoring the implementation and the proper workings of a
its
disclosures committee
conclusions;
the Company, and reviewing
in
4
to prepare
the assumptions used
examining
financial
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;
the
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, at the request of the Board of Directors, major
transactions contemplated by the Company.
Regarding internal control and risk management procedures:
(cid:142)
the
the efficiency of
monitoring
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:
internal control and
–
–
–
–
–
–
–
–
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
(formerly 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 2017
127
4
REPORT ON CORPORATE GOVERNANCE
Administration and management bodies
The Audit Committee reports to the Board of Directors on the
performance of its duties. It also reports on the results of the
statutory auditors’ mission concerning the certification of the financial
statements, on how this mission contributed to the integrity of the
accounting and financial information and its role in the process. It
informs the Board of Directors without delay of any difficulties
encountered.
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 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 operating or non-operating
department, as may be useful in performing its duties. The Chairman
of the Committee gives prior notice of such meeting to the Chairman
and Chief Executive Officer or, if the functions of Chairman of the
Board of Directors and Chief Executive Officer are separate, both the
Chairman of the Board of Directors and the Chief Executive Officer. In
particular, the Committee is authorized to consult with those involved
in preparing or auditing the financial statements (Chief Financial
Officer and principal Finance Department managers, Audit
Department, Legal Department) by asking the Company’s Chief
Financial Officer to call them to a meeting.
The Committee consults with the statutory auditors regularly,
including at least once a year without any Company representative
present. If it is informed of a substantial irregularity, it recommends to
the Board of Directors all appropriate action.
Work of the Audit Committee
In 2017, the Audit Committee met seven times, with an attendance
rate of 92%. The Chairman and Chief Executive Officer did not attend
any of the meetings of the Audit Committee.
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
update on the Sarbanes-Oxley process: self-assessment carried
out by the Group and audit of the internal control related to
financial reporting by the statutory auditors as part of the SOX 404
process;
presentation of the preparation process and key validation stages
of the management report; presentation of certain sections of the
Registration Document: risk factors, legal proceedings, internal
control and risk management procedures;
general presentation of the Group’s insurance policy: coverage for
2017 against property damage, business interruption and civil
liability, update on coverage against damage resulting from a cyber
attack; presentation of D&O (Directors & Officers) insurance and
update on main claims;
update on the 2016 internal audit and 2017 work schedule; and
amendment of the audit and non-audit services policy.
March 13
(cid:142)
(cid:142)
(cid:142)
(cid:142)
presentation on SunPower;
presentation of the social, environmental and societal information in
the Registration Document; presentation by the independent
verifier of its procedures and the conclusions of its review of these
issues;
review of the hydrocarbon reserves evaluation process at the end
of the 2016 fiscal year; and
presentation and review by the statutory auditors of the report on
the payments made to governments.
April 24
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
review of the Consolidated Financial Statements and statutory
financial statements of TOTAL S.A. as parent company for the first
quarter of 2017, with a presentation by the statutory auditors of a
summary of their limited review;
presentation of the Group’s financial position at the end of the
quarter;
update on the internal audits conducted in the first quarter of 2017;
presentation of the Group’s risk map; and
presentation of the 2017 health, safety and environment audit plan.
June 14
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
presentation by the Group Risk Management Committee on the
main issues covered in the last year;
presentation of the cybercrime risk;
presentation of the fraud/compliance risk map, 2016 compliance
report and 2017 plan;
presentation of
subsidiaries; and
the significant Exploration & Production
presentation of the duties of the Consolidation Department
regarding accounting standards and the organization of this
function within the Group, and description of how the consolidation
scope is monitored and the associated control tests.
The Audit Committee’s work mainly focused on the following areas:
July 24
February 6
(cid:142)
(cid:142)
(cid:142)
review of the Consolidated Financial Statements and statutory
financial statements of TOTAL S.A. as parent company for the
fourth quarter of 2016 and the whole of the 2016 fiscal year;
presentation by the statutory auditors of their work performed in
accordance with French and American professional audit
standards;
review of the Group’s financial position;
update on unvalued guarantees given by TOTAL S.A.;
(cid:142)
(cid:142)
(cid:142)
(cid:142)
review of the Consolidated Financial Statements and statutory
financial statements of TOTAL S.A. as parent company for the
second quarter of 2017 and the first half of 2017. Presentation by
the statutory auditors of a summary of their limited review;
presentation of the Group’s financial position at the end of the
second quarter of 2017;
update on the internal audits conducted in the second quarter of
2017; and
presentation of currency exposure management in the Group.
128
REGISTRATION DOCUMENT 2017
REPORT ON CORPORATE GOVERNANCE
Administration and management bodies
(cid:142)
(cid:142)
(cid:142)
(cid:142)
information on compliance by relevant employees with the
provisions of the Financial Code of Ethics;
presentation of
subsidiaries;
the significant Exploration & Production
presentation of future changes regarding data protection and the
actions to be taken; and
presentation on reporting by the Disclosure Committee.
The members of the Committee met with the statutory auditors
without any Group employees being present.
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 set out in the recommendations of the
AFEP-MEDEF Code.
The statutory auditors attended all Audit Committee meetings held in
2017.
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.
4
September 21 (Geneva)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
audit of the accounts as of December 31, 2017: statutory auditors’
analysis of the main transverse risks to be addressed as important
points in their audit plan for the closing of the 2017 accounts and
reminder of the changes introduced by the European audit reform;
review of significant litigation and status update on the main
pending proceedings involving the Group;
presentation of the Total Global Services division and Total Global
Financial Services subsidiary;
presentation of the Tax department risk map and the Group’s fiscal
position;
presentation of the statutory auditors’ fees and the new non-audit
services policy; and
approval by the Audit Committee of the pre-approval of audit and
non-audit services policy.
October 24
(cid:142)
(cid:142)
(cid:142)
(cid:142)
self-assessment of the Audit Committee in the absence of the
Group employees and statutory auditors. As such, the Audit
Committee concluded that the conditions of a genuine climate of
trust existed to enable it to perform its duties, with the required
access to knowledge of the subjects and situations under review;
review of the Consolidated Financial Statements and statutory
financial statements of TOTAL S.A. as parent company for the third
quarter of 2017 and the first nine months of 2017. Presentation by
the statutory auditors of a summary of their limited review;
presentation of the Group’s financial position at the end of the
quarter;
update on the internal audits conducted in the third quarter of
2017;
The Governance and Ethics Committee
Composition
As of March 14, 2018
Patricia Barbizet*
Anne-Marie Idrac
Jean Lemierre
*
Chairperson of the Committee.
Independence
Years’ service on the Board
Expiry of director’s term of office
•
•
•
10
6
2
2020
2018
2019
As of March 14, 2018, the Governance and Ethics Committee is
made up of three members, with a 100% rate of independence.
coverage of the directors’ competencies and the diversity of their
profiles;
The Board of Directors has also decided to appoint Mark Cutifani as
a member of the Governance and Ethics Committee following the
Shareholders’ Meeting of June 1, 2018. The Committee will thus
consist of four members as of that date, with the rate of
independence remaining at 100%.
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
TOTAL’s website under “Our Group/Our identity/Our Governance”.
The Governance and Ethics Committee is focused on:
(cid:142)
recommending to the Board of Directors persons who are qualified
to be appointed as directors, so as to guarantee the scope of
(cid:142)
(cid:142)
(cid:142)
recommending to the Board of Directors the persons that are
qualified to be appointed as executive directors;
preparing
supervising their implementation; and
the Company’s corporate governance
rules and
ensuring compliance with ethics rules and examining any questions
related to ethics and conflicts of interest.
Its duties include:
(cid:142)
(cid:142)
presenting recommendations to the Board for its membership of
its committees, and independence of each candidate for director’s
positions on the Board of Directors;
proposing annually to the Board of Directors the list of directors
who may be considered as “independent directors”;
REGISTRATION DOCUMENT 2017
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(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
update on
November 2016;
the
revision of
the AFEP-MEDEF Code of
proposal to the Board of Directors regarding two new directors
whose appointment was put to the Annual Shareholders’ Meeting
of May 26, 2017;
proposal to the Board of Directors regarding the terms of office of
two directors the renewal of which was put to the Annual
Shareholders’ Meeting of May 26, 2017;
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;
proposals to the Board of Directors regarding the composition of
the Committees;
review of the terms and conditions for allocating directors’ fees to
directors and Committee members;
the Market Abuse regulations
update on
(EU)
596/2014 of April 16, 2014, which came into force on July 3,
2016);
(Regulation
proposal to the Board of Directors regarding the changes to be
made to the rules of procedure of the Audit Committee in order to
comply with the new regulations in force;
information update on transactions on the Company’s securities by
executive and non-executive directors;
examining sections within its purview of reports to be sent by the
Board of Directors or its Chairman to shareholders;
proposal to recommend that the Board of Directors agree that the
Chairman and Chief Executive Officer may accept the directorship
that he has been offered; and
succession plan for the executive directors and the Executive
Committee.
July 26
(cid:142)
(cid:142)
(cid:142)
(cid:142)
presentation by the Chairperson of the Ethics Committee of a
review of the ethics program for 2016;
proposals to the Board of Directors regarding the conditions for
the performance of the duties of the director representing
employees;
update on the confidentiality applicable to the work of the Board of
Directors; and
proposals to the Board of Directors regarding directors’ fees.
4
REPORT ON CORPORATE GOVERNANCE
Administration and management bodies
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
examining sections within its remits of reports to be sent by the
Board of Directors or its Chairman to shareholders;
assisting the Board of Directors in the selection and evaluation of
the executive directors and examining the preparation of their
possible successors, including cases of unforeseeable absence;
recommending to the Board of Directors the persons that are
qualified to be appointed as directors;
recommending to the Board of Directors the persons that 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
in particular preparing means of regular
performance, and
self-assessment of the working of the Board of Directors, and the
possible assessment thereof by an external consultant;
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 Code of Corporate Governance
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;
examining any questions related to ethics and conflicts of interest;
and
examining changes in the duties of the Board of Directors.
Work of the Governance and Ethics Committee
In 2017, the Governance and Ethics Committee held two meetings,
with 83.3% attendance. Its work mainly focused on the following
areas:
February 8
(cid:142)
(cid:142)
report of the Lead Independent Director on her mandate;
discussion on the functioning of the Board of Directors;
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Administration and management bodies
The Compensation Committee
Composition
As of March 14, 2018
Gérard Lamarche*
Patricia Barbizet
Marie-Christine Coisne-Roquette
Renata Perycz, director representing employee
shareholders
Independence
Years’ service on the Board
Expiry of director’s term of office
•
•
•
n/a(a)
6
10
7
2
2019
2020
2020
2019
*
(a)
Chairperson of the Committee.
In accordance with the recommendations of the AFEP-MEDEF Code (point 8.3).
As of March 14, 2018, the Compensation Committee is made up
of four members, with a 100% rate of independence(1).
The Board of Directors has also decided to appoint Carlos Tavares
as a member of the Compensation Committee following the
Shareholders’ Meeting of June 1, 2018. The Committee will thus
consist of
five members as of that date, with the rate of
independence remaining at 100%.
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 TOTAL’s website
under “Our Group/Our identity/Our Governance”.
The Committee is focused on:
(cid:142)
(cid:142)
(cid:142)
examining the executive compensation policies implemented by
the Group and the compensation of members of the Executive
Committee;
evaluating the performance and recommending the compensation
of each executive director; and
preparing reports which the Company must present in these areas.
Its duties include:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
examining the main objectives proposed by the Company’s
general management regarding compensation of the Group’s
executive directors, including stock option plans and restricted
shares grant plans and equity-based plans, and advising on this
subject;
presenting recommendations and proposals to the Board of
Directors concerning:
–
compensation, pension and life insurance plans, in-kind benefits
and other compensation (including severance benefits) for the
executive directors of the Company; in particular, the Committee
proposes compensation structures that take into account the
Company’s strategy, objectives and earnings and market
practices,
–
stock options and restricted share grants, particularly grants of
restricted shares to the executive directors;
examining 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;
(cid:142)
(cid:142)
examining for the parts within its remit of reports to be sent by the
Board of Directors or its Chairman to the shareholders;
preparing recommendations requested at any time
by the Chairman of the Board of Directors or
management of the Company regarding compensation.
the general
4
Work of the Compensation Committee
In 2017, the Compensation Committee held three meetings, with
100% attendance. The Chairman and Chief Executive Officer does
not attend the Committee’s deliberations regarding his own situation.
Its work mainly focused on the following areas:
February 8
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
determination of the variable portion of the compensation to be paid
to the Chairman and Chief Executive Officer for his performance in
fiscal year 2016;
proposed compensation for the Chairman and Chief Executive
Officer (fixed and variable portion for fiscal year 2017);
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; and
review of the possibility and implementation conditions of a
performance share and/or stock option plan in 2017.
March 13
(cid:142)
(cid:142)
(cid:142)
review of the criteria used to assess the variable portion of the
Chairman and Chief Executive Officer’s compensation in light of
the guidance given by the Board at its meeting of February 8,
2017;
confirmation of the acquisition rate of performance shares under
the 2014 plan; and
review of the Executive Committee members’ compensation.
July 26
(cid:142)
(cid:142)
(cid:142)
proposal related to the capital increase reserved for Group
employees (TOTAL CAPITAL 2018);
proposal of allocation of free shares as a contribution as part of the
capital increase reserved for Group employees;
proposals regarding the 2017 performance share plan; proposal
regarding the grant of performance shares to the Chairman and
Chief Executive Officer.
(1)
Excluding the director representing employee shareholders, in accordance with the recommendations of the AFEP-MEDEF Code (point 8.3).
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REPORT ON CORPORATE GOVERNANCE
Administration and management bodies
The Strategic & CSR Committee
Composition
As of March 14, 2018
Independence
Years’ service on the Board
Expiry of director’s term of office
Patrick Pouyanné*
Patrick Artus
Patricia Barbizet
Anne-Marie Idrac
Jean Lemierre
*
Chairperson of the Committee.
As of March 14, 2018, the Strategic & CSR Committee is made up of
five members, including four independent directors.
The Board of Directors has also decided to appoint Christine Renaud
(director representing employees) as a member of the Strategic &
CSR Committee following the Shareholders’ Meeting of June 1,
2018. The Committee will thus consist of six members as of that
date.
Duties
The rules of procedure of the Strategic & CSR 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 September 20, 2017 is available on TOTAL’s website
under “Our Group/Our identity/Our Governance”.
To allow the Board of Directors of TOTAL S.A. to ensure the Group’s
development, the Strategic & CSR Committee’s duties include:
(cid:142)
(cid:142)
examining
Company’s Chief Executive Officer;
the Group’s overall strategy proposed by
the
examining operations that are of particular strategic importance;
•
•
•
•
(cid:142)
(cid:142)
(cid:142)
3
9
10
6
2
2018
2018
2020
2018
2019
reviewing competition and the resulting medium and long-term
outlook for the Group;
examining questions relating to the Group’s Corporate Social
Responsibility (CSR); and
examining questions relating to including climate-related issues in
the Group’s strategy.
Work of the Strategic & CSR Committee
In 2017, the Strategic & CSR Committee held two meetings, with
90% attendance. Its work mainly focused on the following areas:
March 15
(cid:142)
(cid:142)
(cid:142)
analysis of the strategy of one of the Group’s major competitors;
comparison of major oil companies’ 2016 results; and
presentation of the Group’s new organization (in place as of
January 1, 2017).
September 20
(cid:142)
(cid:142)
analysis of long-term changes in demand for oil; and
strategic directions of the Gas, Renewables & Power segment.
4.1.3
Report of the Lead Independent Director on her mandate
During the Board meeting of February 7, 2018, Ms. Barbizet
presented a report on her mandate as Lead Independent Director.
The Lead Independent Director indicated that she exercised her
duties during the 2017 fiscal year as follows:
(cid:142)
Contact with the Chairman and Chief Executive Officer:
The Lead Independent Director has been 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. The Lead Independent Director
thus met the Chairman and Chief Executive Officer very regularly
on a monthly basis, and before each meeting of the Board of
Directors.
(cid:142)
Assessment of the Board of Directors’ practices:
The Lead Independent Director conducted the assessment of the
Board of Directors’ practices (refer to point 4.1.4 of this chapter).
(cid:142)
Avoidance of conflicts of interest:
The Lead Independent Director put in place the diligence intended
to identify and analyze potential conflicts of interest. She brought to
the intention of the Chairman and Chief Executive Officer the
potential conflicts of interest that had been identified. In April 2017,
a director
Independent Director
concerning a potential conflict of interest that could arise due to
the director’s potential participation on a gas-related Committee in
thus consulted
the Lead
a European country. The director decided to not accept the offer
to participate in the Committee.
(cid:142)
Monitoring of the Board’s practices:
The Lead Independent Director held a meeting of the independent
directors on December 12, 2017. At the meeting, the discussions
related in particular to increasing the senior executives’ knowledge
of the Group, with a particular view to the succession plans, and to
analyzing the impact of disruptive scenarios on the Group's
situation.
(cid:142)
Relationships with shareholders:
The Chairman and Chief Executive Officer and
the Lead
Independent Director are the privileged points of contacts for
shareholders concerning matters under the Board's responsibility.
In accordance with the provisions of the rules of procedure of the
Board, when the Chairman and Chief Executive Officer is solicited
in this area, he may consult the Lead Independent Director before
responding.
When the Lead Independent Director was is solicited in this area,
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.
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Administration and management bodies
Thus, for example, on August 31, 2017, the Lead Independent
Director received a letter from a shareholder regarding the
Company’s governance (Board of Directors, governance strategy,
compensation, risk assessment), the response to which, sent on
November 26, 2017, was jointly signed by the Chairman and Chief
Executive Officer and the Lead Independent Director. It was
followed by a conference call of both the Chairman and Chief
Executive Officer and the Lead Independent Director with the
shareholder.
(cid:142)
Visits to Group sites by the directors:
Ms. Barbizet took part in the following visits to Group sites
organized for the directors:
–
–
–
refinery and hydrocarbon distribution activities
Leuna
Germany (March 24, 2017);
in
Geneva Oil Trading center (September 21, 2017); and
Solaize Research center (October 26, 2017).
4.1.4
Evaluation of the functioning of the Board of Directors
Once a year, the Board of Directors discusses its functioning. It also
conducts a formal assessment of its own functioning at regular
intervals of up to 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. When a
Lead Independent Director is appointed, he or she oversees this
evaluation process and reports on it to the Board of Directors.
(cid:142)
(cid:142)
(cid:142)
independent directors’ meeting: this is now held at least once a
year at the initiative of the Lead Independent Director. Meetings
took place on December 21, 2016 and December 12, 2017;
secure platform to access the Board’s documents: the platform
was put in place as of September 21, 2016 for Board meetings
and as of April 24, 2017 for Audit Committee meetings; and
4
succession plan for the executive directors: the succession plan for
the
executive directors was
Governance and Ethics Committee of February 8, 2017.
the meeting of
reviewed at
At its meeting of February 7, 2018, the Board of Directors discussed
its functioning. Ms. Barbizet, Lead Independent Director, managed
this evaluation process in January 2018 on the basis of a formal
self-assessment carried out in the form of a detailed questionnaire.
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 functioning 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 and January 2017
self-assessments have been implemented:
(cid:142)
(cid:142)
monitoring risks at Board level: an annual presentation of the
Group’s risk map is now on the Board’s agenda. Presentations
were given at the Board meetings of April 26, 2016 and April 26,
2017;
changes to the composition of the Board: the Governance and
Ethics Committee’s proposals to the Board of Directors met the
expectations of the Board members, particularly with the addition
of the experience of two chief executive officers of leading
companies, who joined the Board following the Shareholders’
Meeting of May 26, 2017;
The self-assessment conducted in January 2018 thus highlighted the
directors’ satisfaction with the functioning of the Board of Directors,
both in terms of form and substance, and, in particular, concerning
freedom of expression, the quality of dialog, the collegiality of
decision-making and the relevance of subjects addressed. The
directors appreciated notably the pace and agenda of meetings, the
quality of the exchanges during lunches before the meetings and
during the visits to Group sites organized for them, 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 functioning:
(cid:142)
(cid:142)
consider alternative disruptive scenarios within the framework of
the strategic consideration; and
confirm the process of the succession plan.
In this context, the Chairman and Chief Executive Officer indicated
during the Board of Directors’ meeting that:
(cid:142)
(cid:142)
every new director can meet each member of the Executive
Committee thanks to its welcome program;
the Lead Independent Director and the Chairman and Chief
Executive Officer are the points of contact between the Board of
Directors and the shareholders; and
(cid:142)
visiting sites will keep being proposed to the directors.
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Administration and management bodies
4.1.5
General Management
4.1.5.1
Unified Management Form
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
therefore
the General Management. The Board of Directors
appointed Mr. Pouyanné as Chief Executive Officer for a term of
office expiring following the Annual Shareholders’ Meeting called in
2017 to approve the 2016 financial statements(1), 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.
At the proposal of the Governance and Ethics Committee approved
by the Board of Directors at the meeting of March 14, 2018, the
Board of Directors will be called to renew Mr. Patrick Pouyanné’s
term of office as Chairman of the Board of Directors and as Chief
Executive Officer at its meeting of June 1, 2018, subject to the
renewal of his directorship by the Ordinary Shareholders’ Meeting of
June 1, 2018 and for the term of this new directorship, namely until
the Shareholders’ Meeting to be held in 2021 to approve the 2020
financial statements.
At the meeting of the Board of Directors of March 14, 2018, the Lead
Independent Director notably reiterated that the proposal to continue
to combine the positions of Chairman of the Board of Directors and
Chief Executive Officer was made further to work done by the
Governance and Ethics Committee in the interests of the Company.
In this regard, the unified management form was deemed to be most
appropriate to the Group’s organization, modus operandi and
business, and to the specific features of the oil and gas sector,
particularly in light of the advantage for the Group of having a unified
management in strategic negotiations with governments and the
Group’s partners.
The Lead Independent Director also reiterated that the Group’s
governance structure ensures 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 the event 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.
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 or by a third of its
members, at any time and as often as required to ensure the best
interests of the Company.
Lead Independent Director
its meeting on December 16, 2015,
the Board of Directors
At
Independent Director as of
appointed Ms. Barbizet as Lead
December 19, 2015. Pursuant
the Rules of
Procedure of the Board of Directors, she therefore chairs the
Governance and Ethics Committee.
to the provisions of
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 4.1.2.1 of this chapter.
4.1.5.2
Executive Committee and Group Performance Management Committee
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 2017, the Executive Committee met at least twice a month, except
in August when it met once.
As of December 31, 2017, the members of TOTAL’s Executive
Committee were as follows:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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.
(1)
The meeting of the Board of Directors of December 16, 2015 decided to extend 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.
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The Group Performance Management Committee
The mission of the Group Performance Management Committee is to
examine, analyze and monitor the HSE, 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 is made up of the heads of the Group’s main business
units, as well as a limited number of Senior Vice Presidents of
functions at the Group and business segments levels.
4.1.6
Shares held by the administration and management bodies
As of December 31, 2017, 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): 101,366 shares and
11,517.55 units of the collective investment fund (“FCPE”) invested
in TOTAL shares;
Chairman and Chief Executive Officer: 85,072 shares and 8,565.90
units of the FCPE invested in TOTAL shares;
By decision of the Board of Directors:
(cid:142)
(cid:142)
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.
4
members of the Executive Committee(3): 324,761 shares and
33,951.08 units of the FCPE invested in TOTAL shares;
The number of TOTAL shares to be considered is comprised of
TOTAL shares and units of the FCPE invested in TOTAL shares.
executive officers(3) 422,437.75 shares and 72,995.30 units of the
FCPE invested in TOTAL shares.
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(1)
(2)
(3)
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), the Deputy Chief Financial Officer and the
Treasurer.
Including the Chairman and Chief Executive Officer, the director representing employee shareholders and the director representing employees.
Excluding the Chairman and Chief Executive Officer.
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Administration and management bodies
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 2017 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:
Acquisition
Subscription
Transfer
Exchange Exercise of options
TOTAL shares
-
3,102.00
15,000.00
283.42
0.88
Year 2017
Patrick Pouyanné(a)
Patrick Artus(a)
Patricia Barbizet(a)
Marie-Christine
Coisne-Roquette(a)
Mark Cutifani(a)
Maria van der
Hoeven(a)
Anne-Marie Idrac(a)
Gérard Lamarche(a)
Jean Lemierre(a)
Renata Perycz(a)
Carlos Tavares(a)
Christine Renaud(a)
Arnaud Breuillac(a)
Patrick de La
Chevardière(a)
Momar Nguer(a)
Bernard Pinatel(a)
Philippe Sauquet(a)
Namita Shah(a)
TOTAL shares
177.00
Units in FCPE and other related
financial instruments(b)
TOTAL shares
Units in FCPE and other related
financial instruments(b)
TOTAL shares
Units in FCPE and other related
financial instruments(b)
Units in FCPE and other related
financial instruments(b)
TOTAL shares
Units in FCPE and other related
financial instruments(b)
TOTAL shares
Units in FCPE and other related
financial instruments(b)
TOTAL shares
Units in FCPE and other related
financial instruments(b)
TOTAL shares
Units in FCPE and other related
financial instruments(b)
TOTAL shares
Units in FCPE and other related
financial instruments(b)
TOTAL shares
Units in FCPE and other related
financial instruments(b)
TOTAL shares
Units in FCPE and other related
financial instruments(b)
TOTAL shares
Units in FCPE and other related
financial instruments(b)
TOTAL shares
Units in FCPE and other related
financial instruments(b)
-
-
-
-
2,000.00
-
-
-
-
-
28.00
-
-
-
-
61.04
1,000.00
-
-
2,544.07
-
-
16.00
-
-
-
-
-
-
-
-
-
-
-
28.00
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,830.16
18,540.00
-
1,276.00
116.23
5,416.47
589.66
TOTAL shares
-
6,287.00
-
Units in FCPE and other related
financial instruments(b)
TOTAL shares
Units in FCPE and other related
financial instruments(b)
TOTAL shares
Units in FCPE and other related
financial instruments(b)
TOTAL shares
Units in FCPE and other related
financial instruments(b)
TOTAL shares
Units in FCPE and other related
financial instruments(b)
62.36
-
142.92
-
23.21
-
447.71
-
9,191.35
590.00
4,542.22
1,421.00
4,063.91
944.00
5,465.98
215.00
90.32
4,195.58
8,706.89
5,229.00
1,977.21
-
4,185.14
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15,000.00
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,000.00
-
-
6,000.00
-
-
-
-
-
(a)
(b)
Including related parties within the meaning of the provisions of Article R. 621-43-1 of the French Monetary and Financial Code.
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.
136
REGISTRATION DOCUMENT 2017
REPORT ON CORPORATE GOVERNANCE
Statement regarding corporate governance
4.2
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 (available on the AFEP
and MEDEF web sites).
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 the 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. 225-37-4 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
4
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.
In recent years, the Company’s practices have evolved in two areas
concerning the recommendations made in the AFEP-MEDEF Code.
First, a meeting of directors not attended by the executive directors is
now held annually. 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” is thus
followed.
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.
Second, concerning the recommendation made in the AFEP-MEDEF
Code concerning the composition of the Compensation Committee
that one “employee director 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 of the Shareholder
Meeting of May 26, 2017. Ms. Perycz, thanks to the nature of her
salaried duties in the Group, brings in particular to the Compensation
Committee her experience in Human Resources.
4.3
Compensation for the administration
and management bodies
4.3.1
Board members’ compensation
Aggregate amount of directors’ fees
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 2017, the aggregate amount of directors’ fees due to the members
of the Board of Directors (12 directors on December 31, 2017) was
€1.28 million.
REGISTRATION DOCUMENT 2017
137
4
REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
Rules for allocating directors’ fees
The directors’ fees for fiscal year 2017 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:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
a fixed annual portion of €20,000 per director(1);
a fixed annual portion(1) of €30,000 for the Chairman of the Audit
Committee(2);
a fixed annual portion(1) of €25,000 for the Audit Committee
members(2);
a fixed annual portion(1) of €25,000 for the Chairman of the
Governance and Ethics Committee and for the Chairman of the
Compensation Committee(2);
an additional fixed annual portion(1) of €15,000, increased to
€30,000 from July 26, 2017 for the Lead Independent Director
(beyond amounts above);
an amount of €5,000, increased to €7,500 from July 26, 2017, per
director for each Board of Directors’ meeting actually attended (in
view of the additional workload of the Board);
an amount of €3,500 per director for each Governance and Ethics
Committee, Compensation Committee or Strategic and CSR
Committee meeting actually attended;
an amount of €7,000 per director for each Audit Committee
meeting actually attended; and
a premium of €2,000, increased to €4,000 since January 1, 2017,
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 and including
in-kind benefits due and paid to each executive and non-executive
director during the previous two fiscal years.
Mr. Marc Blanc, the director representing employees until May 26,
2017, 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 contribution paid to the insurance company that
manages the plan. For fiscal year 2017, this pension plan represented
a booked expense to TOTAL S.A. in favor of Mr. Blanc of €780.
in
favor of Mr. Blanc under
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
this plan represent, at
December 31, 2017, a gross annual pension, payable to his spouse
within a limit of 60% in case of death of the beneficiary, estimated at
€4,924. 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, 2017 in favor of Mr. Blanc is €142.5 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, 2017, as well as a statistical life expectancy of the
beneficiary and his spouse.
Ms. Christine Renaud, the director representing employees since
May 26, 2017, 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), governed 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 2017, this pension plan represented
a booked expense to TOTAL S.A. in favor of Ms. Renaud of €629.
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)
(2)
Calculated on a prorata basis, in the event of change in the course of the year.
To be substituted to the €20,000 fixed annual portion per director. In case of accumulation of the functions of director and/or Audit Committee member
and/or Chairman of a Committee (Audit, Governance and Ethics, Compensation), the difference between the fixed annual portion per director and the fixed
annual portion of the others functions is added.
138
REGISTRATION DOCUMENT 2017
REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
Table of directors’ fees and other compensation due and paid to the executive and non-executive directors
(AMF position-recommendation No. 2009-16 – AMF Table No. 3)
Gross amount (€)
Patrick Pouyanné
Directors’ fees
Other compensation
Patrick Artus
Directors’ fees
Other compensation
Patricia Barbizet
Directors’ fees
Other compensation
Marc Blanc
Directors’ fees(b)(c)
Other compensation
Marie-Christine Coisne-Roquette
Directors’ fees
Other compensation
Mark Cutifani
Directors’ fees(d)
Other compensation
Paul Desmarais, Jr
Directors’ fees(e)
Other compensation
Maria van der Hoeven
Directors’ fees
Other compensation
Anne-Marie Idrac
Directors’ fees
Other compensation
Barbara Kux
Directors’ fees(e)
Other compensation
Gérard Lamarche
Directors’ fees
Other compensation
Jean Lemierre
Directors’ fees
Other compensation
Renata Perycz
Directors’ fees
Other compensation
Christine Renaud
Directors’ fees(c)(f)
Other compensation
Carlos Tavares
Directors’ fees(d)
Other compensation
TOTAL
For the year ended December 31, 2016
For the year ended December 31, 2017
Amounts paid
Amounts due
Amounts paid
Amounts due
-
(a)
121,000
-
109,500
-
73,500
76,443
-
(a)
88,000
-
130,644
-
72,000
76,443
146,500
122,679
-
-
-
49,500
-
43,576
-
84,000
-
100,000
-
150,000
-
32,076
-
48,576
53,158
-
-
-
-
-
-
-
61,000
-
-
-
79,000
-
102,500
-
147,000
-
-
-
-
53,158
-
-
-
-
-
(a)
128,000
-
128,534
-
31,500
77,997
154,000
-
53,500
-
17,000
-
148,500
-
91,500
-
39,500
-
181,000
-
88,000
-
120,000
57,946
53,000
60,789
42,000
-
4
-
(a)
121,000
-
109,500
-
73,500
77,997
146,500
-
-
-
49,500
-
43,576
-
84,000
-
100,000
-
150,000
-
32,076
-
48,576
57,946
-
60,789
-
-
1,087,829
932,424
1,472,766
1,154,960
(a)
(b)
(c)
(d)
(e)
(f)
For more information concerning compensation, refer to the summary tables presented in point 4.2.3 of this chapter.
Director representing employees until May 26, 2017.
Mr. Blanc and Ms. Renaud chose to pay all their directors’ fees to their trade union membership organizations for the entire term of their directorship.
Director since May 26, 2017.
Director until May 26, 2017.
Director representing employees since May 26, 2017.
REGISTRATION DOCUMENT 2017
139
4
REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
4.3.2
Chairman and Chief Executive Officer’s compensation
4.3.2.1
Compensation of Mr. Patrick Pouyanné for fiscal year 2017
This report by the Board of Directors, on the proposal of the
Compensation Committee, and in application of Article L. 225-37-3
of the French Commercial Code, presents the total compensation
and benefits of all kinds, paid to the Chairman and Chief Executive
Officer in the fiscal year 2017(1). It makes the distinction between the
fixed, variable and extraordinary components of
total
compensation and benefits, as well as the criteria used to calculate
them or the circumstances due to which they were attributed. This
report also mentions all the commitments of all kinds made by the
Company in favor of the Chairman and Chief Executive Officer
corresponding to the components of compensation, indemnities or
benefits due or likely to be due upon acceptance, termination or
change in duties or after the discharge thereof, in particular pension
commitments and other annuities.
the
The payment to the Chairman and Chief Executive Officer of the
variable component for fiscal year 2017, the only variable or
exceptional component of the compensation policy of the Chairman
and Chief Executive Officer for fiscal year 2017, is conditional on the
approval of the Ordinary Shareholders’ Meeting on June 1, 2018 of
the compensation components of the Chairman and Chief Executive
Officer, under the conditions stipulated in Articles L. 225-37-2,
L. 225-100, and R. 225-29-1 of the French Commercial Code
(decree No. 2017-340 of March 16, 2017, applicable since March 18,
2017).
The Ordinary Shareholders’ Meeting on June 1, 2018 will be called
on to approve the fixed, variable and extraordinary components of
the total compensation and the benefits of any kind paid or attributed
to the Chairman and Chief Executive Officer for the fiscal year 2017,
in application of Article L. 225-100 of the French Commercial Code.
Table of the compensation of the Chairman and Chief Executive Officer
(AMF position-recommendation No. 2009-16 – AMF Table No. 2)
(in €)
Patrick Pouyanné
Chairman and Chief Executive Officer
Fixed compensation
Annual variable compensation
Multi-year variable compensation
Extraordinary compensation
Directors’ fees
In-kind benefits(b)
TOTAL
For the year ended December 31, 2016
For the year ended December 31, 2017
Amount due for the
fiscal year
Amount paid during
the fiscal year(a)
Amount due for the
fiscal year
Amount paid during
the fiscal year(a)
1,400,000
2,339,400
1,400,000
1,814,400
1,400,000
2,400,300
-
-
-
-
-
-
-
-
-
58,945
3,798,345
58,945
3,273,345
67,976
3,868,276
1,400,000
2,339,400
-
-
-
67,976
3,807,376
(a)
(b)
Variable portion paid for the prior fiscal year.
Company car and the life insurance and health care plans paid for by the Company.
Summary of the compensation, options and shares granted to the Chairman and Chief Executive Officer
(AMF position-recommendation No. 2009-16 – AMF Table No. 1)
(in €, except the number of shares)
Patrick Pouyanné
Chairman and Chief Executive Officer
Compensation due for the fiscal year (details in AMF Table No. 2 above)
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)
For the year ended
December 31, 2016
For the year ended
December 31, 2017
3,798,345
-
-
2,122,200(b)
3,868,276
-
-
2,134,200(c)
Number of performance shares granted during the fiscal year
60,000
60,000
TOTAL
5,920,545
6,002,476
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)
(b)
(c)
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).
The amount of €2,122,200 corresponds to the fair value of the 60,000 shares granted in 2016, calculated using the market price at the grant date (€42.685), minus the
total estimated amount of the dividends likely to be paid during the vesting period (or a unitary fair value of €35.37) in accordance with IFRS 2. The amount of €2,561,100
erroneously mentioned in AMF table No. 1 in the 2016 Registration Document corresponds to the closing price of TOTAL shares on the grant date (€42.685), multiplied by
60,000 shares.
The amount of €2,134,200 corresponds to the fair value of the 60,000 shares granted in 2017, calculated using the market price at the grant date (€43.220), minus the
total estimated amount of the dividends likely to be paid during the vesting period (or a unitary fair value of €35.57) in accordance with IFRS 2.
(1)
Including attributions in the form of stock, securities or rights giving access to the Company’s share capital or rights to the attribution of securities
of the Company or of the companies mentioned in Articles L. 228-13 and L. 228-93 of the French Commercial Code.
140
REGISTRATION DOCUMENT 2017
REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
Payments or benefits
due or likely to be due
upon termination
or change in duties
YES(a)
Severance benefit and
retirement benefit
Benefits related to a
non-compete agreement
NO
AMF position-recommendation No. 2009-16 – AMF table No. 11
Employment
contract
NO
Supplementary
pension plan
YES
Internal supplementary
defined benefit pension plan(a)
and defined contribution
pension plan known as
RECOSUP
Executive directors
Patrick Pouyanné,
Chairman and Chief Executive
Officer
Start of term of office:
December 19, 2015
End of term of office:
Shareholders’ Meeting on
June 1, 2018 to approve the
financial statements for fiscal
year 2017
(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
below. The retirement benefit cannot be combined with the severance benefit.
4
Summary table of the components of the 2017 compensation for Mr. Patrick Pouyanné,
Chairman and Chief Executive Officer of TOTAL S.A.
Components of
compensation
Amount or accounting
valuation submitted for
vote
Presentation
Components of total compensation paid or granted for fiscal year 2017
Fixed compensation €1,400,000
(amount paid in 2017)
The fixed compensation due to Mr. Pouyanné for his duties as Chairman and Chief
Executive Officer for fiscal year 2017 was €1,400,000 (unchanged from fiscal year 2016).
Annual variable
compensation
€2,400,300
(amount paid in 2018)
The variable portion of Mr. Pouyanné’s compensation for his duties as Chairman and
Chief Executive Officer for fiscal year 2017 has been set at €2,400,300, corresponding
to 171.45% (of a maximum of 180%) of his fixed annual compensation based on his
performance.
At its meeting on February 7, 2018, the Board of Directors reviewed the level of
achievement of the economic parameters based on the quantifiable targets set by the
Board of Directors at its meeting on March 15, 2017. The Board of Directors also
assessed the Chairman and Chief Executive Officer’s personal contribution on the basis
of the four target criteria set during its meeting on March 15, 2017 to qualitatively assess
his management.
Annual variable compensation due for fiscal year 2017
(expressed as a percentage of the base salary)
Maximum
percentage
Percentage
allocated
Economic parameters (quantifiable targets)
140%
131.45%
–
Safety
– TRIR
– FIR, by comparison
– Evolution of the number of Tier 1 + Tier 2 incidents
–
–
–
Return on equity (ROE)
Net debt-to-equity ratio
Adjusted net income (ANI) – comparative
Personal contribution (qualitative criteria)
–
–
–
–
Steering of the strategy and successful strategic
negotiations with producing countries
Achievement of production and reserve targets
Performance and outlook with respect to Downstream
activities
Corporate Social Responsibility (CSR) performance
TOTAL
20%
12%
4%
4%
30%
40%
50%
40%
10%
10%
10%
10%
180%
20%
12%
4%
4%
21.45%
40%
50%
40%
10%
10%
10%
10%
171.45%
REGISTRATION DOCUMENT 2017
141
4
REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
Components of
compensation
Amount or accounting
valuation submitted
for vote
Presentation
The Board of Directors assessed achievement of the targets set for the economic
parameters as follows:
–
–
–
–
The safety criterion was assessed for a maximum of 20% through (i) the
achievement of the annual TRIR (Total Recordable Injury Rate) target, for a maximum
of 12%; (ii) the number of accidental deaths per million hours worked, FIR (Fatality
Incident Rate) compared to those of the four large competitor oil companies(1), for a
maximum of 4%, as well as through changes in the Tier 1 + Tier 2 indicator(2), for a
maximum of 4%.
In particular, the Board of Directors noted that the target of a TRIR lower than 1.0 was
fully achieved in 2017. The TRIR in 2017 was 0.88. It also noted that the number of
accidental deaths per million hours worked, FIR (Fatality Incident Rate), the best
amongst the panel of majors, was achieved in full in 2017. Finally, the Board noted
that the annual target of Tier 1 + Tier 2 incidents equal to or fewer than 130 was
achieved in full in 2017; the number of incidents was 103.
It therefore set the portion for this criterion at 20% of the fixed compensation
(maximum of 20%);
For the return on equity (ROE) criterion(3), the Board of Directors noted that the
target of an ROE equal to or higher than 13% in 2017 was partly achieved. Since the
ROE stood at 10.15% in 2017, the Board of Directors set the portion awarded for this
criterion at 21.45% of the fixed compensation for the fiscal year 2017 (maximum of
30%);
For the net debt-to-equity ratio criterion(4), the Board of Directors noted that the
objective of maintaining a debt ratio equal to or lower than 30% in 2017 was achieved
in full, which led the portion for this criterion to be set at 40% of the fixed
compensation for fiscal year 2017 (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 on the basis of
estimates calculated by a group of leading financial analysts(5). The Board of Directors
noted that the increase in the Group’s three-year average ANI was better than that of
the panel, which led the portion for this criterion to be set at 50% of the fixed
compensation for fiscal year 2017 (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 in fiscal year 2017,
particularly those related to:
–
steering of the strategy and successful strategic negotiations with producing
countries. The following points in particular were noted during the period:
–
–
–
–
–
a global partnership agreement with Sonatrach in Algeria consolidating the existing
partnership,
the development of the unconventional resources of the Vaca Muerta in Argentina,
accompanied by an increase of the Group’s stake in the permit from 27.27% to
41%,
an agreement to develop the production of phase 11 of the South Pars gas field in
Iran,
the acquisition of Mærsk Oil,
the resumption of offshore exploration in Angola with the Zinia 2 project on block
17, the extension of cooperation with Sonangol on the Kaombo project,
(1)
(2)
(3)
(4)
(5)
ExxonMobil, Royal Dutch Shell, BP and Chevron.
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.
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 2017 is calculated after payment of a dividend of €2.48 per share, subject to approval by the
Annual Shareholders’ Meeting on June 1, 2018. In 2016, the ROE was 8.7%.
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. Adjusted shareholders’ equity for 2017 is calculated after payment of a dividend of €2.48 per share, subject to approval by
the Annual Shareholders’ Meeting on June 1, 2018. In 2017, the net debt-to-equity ratio was 13.8%. In 2016, it was 27.1%.
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.
142
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Compensation for the administration and management bodies
Components of
compensation
Amount or accounting
valuation submitted
for vote
Presentation
4
–
–
–
–
–
the signing of two agreements for the exploration and operation of deep
offshore oil concessions offshore from Senegal and of a cooperation agreement
with Petrosen and the Senegalese Ministry of Energy,
an exploration-production contract in Mauritania for block C7 with the Société
Mauritanienne des Hydrocarbures et de Patrimoine Minier (SMHPM);
the increase of hydrocarbon production and reserves: an increase in the
production of hydrocarbons in 2017 of 4.65% compared with 2016 and an
increase of reserves booked on December 31, 2017;
the performance and outlook with respect to Downstream activities. The following
points were noted in 2017:
–
–
–
–
–
–
–
in March 2017, the signing of an agreement to create a joint venture, in which
the Group holds a 50% interest, for the construction of an ethane-based steam
cracker on the American coast of the Gulf of Mexico and a new polyethylene
plant,
the acquisition of a 23% stake in Eren Renewable Energy, which develops
power plants producing electricity of renewable origin (solar and wind). The
acquisition of this stake in renewable energies constitutes a diversification
reflecting the inclusion of climate-related issues in the Group’s strategy,
a distribution agreement signed with the Mexican government in October 2017,
the announcement of
in
November 2017,
the launch of the Total Spring offer in France,
the agreement with CMA CGM to supply LNG,
the acquisition of PitPoint for a deployment in the vehicle natural gas sector;
the acquisition of Engie’s LNG business
CSR performance, 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. Different actions were noted that aim to reduce the environmental
footprint of the Group’s operations (such as the signing of the Statoil/Shell/Total
agreement to develop a project to capture, store and utilize CO2 in Norway, or the
signing of a Group commitment to compensate for carbon emissions produced by
air travel by the Group’s employees with the support of the GoodPlanet
Foundation). Different actions were also noted that aim to provide the Group’s
customers with an energy product mix with a carbon intensity that is regularly
reduced (investments in gas, with the announcement of the acquisition of Engie’s
LNG business and acquisitions in renewable energies, such as Eren RE and
Greenflex). Finally, it was noted that the Global Compact appointed the Chairman
and Chief Executive Officer as an SDG Pioneer in recognition of the commitments
made by the Group to develop partnerships and invest in low carbon energies.
In the development of the Group’s societal policy, the adhesion of TOTAL to the
Global Deal initiative, the revision of the “Human rights” roadmap, the publication
of a guide to religion in the workplace and the commitment to increase the budget
of the Total Corporate Foundation (€50 million to €125 million over 3 years) were
noted in particular.
Regarding the development of the Group’s relations with its stakeholders and its
reputation in the field of Corporate Social Responsibility, the election of the
Chairman and Chief Executive Officer as the 2016 Energy Intelligence Petroleum
Executive of the Year was noted. Regarding the extra-financial rating agencies, it
was noted that TOTAL maintained its position in the main ESG indexes (DJSI
World and Europe; FTSE4Good) and its ratings (MSCI; CDP Climate Change and
CDP Water), and that it figured for the first time, in 31st position, in the Corporate
Knights Global 100 rankings of the Most sustainable companies, and in 3rd place
in the extraction sector and in 1st place in the Oil & Gas sector of the Corporate
Human Rights Benchmark published in 2017.
The Chairman and Chief Executive Officer’s personal contribution was therefore set
at 40% of the fixed compensation (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.
REGISTRATION DOCUMENT 2017
143
Multi-year or deferred
variable compensation
Extraordinary
compensation
n/a
n/a
4
REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
Components of
compensation
Amount or accounting
valuation submitted for
vote
Presentation
Directors’ fees
n/a
€2,134,200(1)
(accounting valuation)
Stock options,
performance shares
(and all other forms
of long-term
compensation)
Mr. Pouyanné does not receive directors’ fees for his duties at TOTAL S.A. or at the
companies it controls.
On July 26, 2017, Mr. Pouyanné was granted 60,000 existing shares of the Company
(corresponding to 0.0024% 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 26, 2017, relating to 0.23% 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
2017 to 2019, applied as follows:
–
–
the Company will be ranked each year against its peers (ExxonMobil, Royal Dutch
Shell, BP and Chevron) during the three vesting years (2017, 2018 and 2019) 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 (ExxonMobil, Royal Dutch
Shell, BP and Chevron) 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
divestments. 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 application of Article L. 225-197-1 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 in 2017. 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.
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.
(1)
(2)
The amount of €2,134,200 corresponds to the fair value of the 60,000 shares granted, calculated using the market price at the grant date (€43.220) minus
the total estimated amount of the dividends likely to be paid during the vesting period (or €35.57) in accordance with IFRS 2.
In the form of shares or units of mutual funds invested in shares of the Company.
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Components of
compensation
Amount or accounting
valuation submitted for
vote
Presentation
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 26, 2017. 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.
Payment for
assuming a position
n/a
Components of total compensation paid or granted for fiscal year 2017 subject to a vote by the Annual Shareholders’ Meeting as
per the procedure regarding regulated agreements and undertakings
Valuation of in-kind
benefits
€67,976
(accounting valuation)
Severance benefit
None
4
The Chairman and Chief Executive Officer is entitled to a company vehicle.
He 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 €3,178,560
in 2018, 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. Death benefits are 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.
The Chairman and Chief Executive Officer is entitled to a benefit equal to two years of
his gross compensation if he is removed from office or his term of office is not renewed
by the Company. 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.
These undertakings were subject to the procedure for regulated agreements, as
provided for by Article L. 225-38 of the French Commercial Code. They were approved
by the Annual Shareholders’ Meeting held on May 24, 2016.
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.
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4
REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
Components of
compensation
Amount or accounting
valuation submitted
for vote
Presentation
Retirement benefit
None
Non-compete
compensation
Supplementary
pension plan
n/a
None
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.
Mr. Pouyanné has not received any non-compete compensation.
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 2017, this pension plan represented a booked expense to TOTAL
S.A. in favor of the Chairman and Chief Executive Officer of €2,354.
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 €39,228 for 2017 (i.e., €313,824), 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.
This pension plan provides a pension for its beneficiaries 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 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.
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Components of
compensation
Amount or accounting
valuation submitted
for vote
Presentation
4
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, at the meeting on December 16, 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.
These undertakings regarding the supplementary pension plan were subject to the
procedure for regulated agreements, as per Article L. 225-38 of the French Commercial
Code, and they were approved by the Company’s Annual Shareholders’ Meeting on
May 24, 2016.
Pursuant to the provisions of Article L. 225-42-1 of the French Commercial Code, the
acquisition of these supplementary pension rights under the terms of the pension plan
for the period from December 19, 2015 to December 31, 2016, was submitted by the
Board of Directors meeting on December 16, 2015, 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. Should the variable portion
not reach 100% of his base compensation, the rights will be awarded on a pro rata
basis.
On February 8, 2017, the meeting of 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 can no longer 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 conditional rights granted for the period from January 1, 1997 to December 31,
2016 (inclusive), therefore correspond to a replacement rate equal to 36% for the portion
of the base compensation falling between 8 and 40 times the PASS and a replacement
rate of 20% for the portion of the base compensation falling between 40 and 60 times
the PASS.
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, 2017, a gross annual pension estimated at €608,819 based
on the length of service acquired as of December 31, 2017 (i.e., capped at 20 years),
corresponding to 16.02% of Mr. Pouyanné’s gross annual compensation consisting of
the annual fixed portion for 2017 (i.e., €1,400,000) and the variable portion to be paid(1)
in 2018 for fiscal year 2017 (i.e., €2,400,300).
Nearly the full amount of TOTAL S.A.’s commitments under these supplementary and
similar retirement plans (including the retirement benefit) is outsourced for all
beneficiaries 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, 2017 is €17.4 million for the Chairman and Chief
Executive Officer (€17.7 million for the Chairman and Chief Executive Officer, the current
and former 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, 2017 and the
statistical life expectancy of the beneficiaries.
(1)
Subject to the approval of the Ordinary Shareholders’ Meeting on June 1, 2018.
REGISTRATION DOCUMENT 2017
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4
REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
Components of
compensation
Amount or accounting
valuation submitted
for vote
Presentation
The total amount of all the pension plans in which Mr. Pouyanné participates represents,
at December 31, 2017, a gross annual pension estimated at €704,550 based on the
length of service acquired as of December 31, 2017, corresponding to 18.54% of Mr.
Pouyanné’s gross annual compensation defined above (annual fixed portion for 2017
and variable portion to be paid in 2018 for fiscal year 2017).
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 Shareholders’
Meeting on May 24, 2016.
Approval by the
Shareholders’
Meeting
-
Draft resolution prepared by the Board of Directors in accordance with Article L. 225-100 of the French
Commercial Code submitted to the Ordinary Shareholders’ Meeting of June 1, 2018
Approval of the fixed, variable and extraordinary components of the total compensation and the in-kind benefits paid or
granted to the Chairman and Chief Executive Officer for fiscal year 2017
Voting under the conditions of quorum and majority required for
in accordance with
Ordinary Shareholders’ Meetings and
Article L. 225-100 of
the
shareholders approve the fixed, variable and extraordinary
components of the total compensation and in-kind benefits paid
the French Commercial Code,
or granted to the Chairman and Chief Executive Officer for fiscal
year 2017, as presented in the report on corporate governance,
covered by Article L. 225-37 of the French Commercial Code
and
(chapter 4,
the 2017 Registration Document
in
point 4.3.2.1).
Compensation due to the Chairman and Chief Executive Officer for the last three fiscal years
€3,000,000
€2,000,000
€1,000,000
€0
Fixed portion (paid in N)
Variable portion (paid in N+1)
Performance shares
(accounting valuation -
fair value IFRS 2)
In-kind benefits
(accounting valuation)
Fiscal year 2015
Fiscal year 2016
Fiscal year 2017
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Compensation for the administration and management bodies
4.3.2.2
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)
This report, issued by the Board of Directors further to a proposal by
the Compensation Committee, in accordance with the provisions of
Article L. 225-37-2 of the French Commercial Code, 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.
The compensation policy for the Chairman and Chief Executive
Officer was approved by the Board of Directors, on the proposal of
the Compensation Committee, at its meeting on March 14, 2018. It
the
was based on
compensation of the executive directors described below, and on a
comparative study of the compensation of the Chairman and Chief
the general principles
for determining
Executive Officer by an external consultant, to which the members of
the Compensation Committee referred.
At its meeting on March 14, 2018, and on the proposal of the
Compensation Committee, the Board of Directors also decided that
the amount of the fixed component of the compensation of the
Chairman and Chief Executive Officer, the maximum percentage of
the variable part of his compensation, and the annual number of
performance shares attributed to the Chairman and Chief Executive
Officer in 2018 will not be changed throughout his next term of office
as Chairman and Chief Executive Officer, after the renewal by the
Board of Directors, in other words, until the General Shareholders’
Meeting held in 2021 to approve the accounts of fiscal year ending
December 31, 2020.
4
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:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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 quantifiable and
qualitative criteria that are periodically reviewed by the Board of
Directors. Quantifiable 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
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.
toward paving
the way
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.
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.
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 takes into
account the benefit accruing from participation in the pension
plans when determining the compensation policy of the executive
directors.
Stock options and performance shares are designed to align the
interests of the executive directors with those of the shareholders
over the long term.
(cid:142)
(cid:142)
(cid:142)
(cid:142)
The grant of options and performance shares to the executive
directors
the components of
compensation of the person in question. No discount is applied
when stock options are granted.
light of all
reviewed
in
is
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
conditions of presence in the Company and performance that
must be met over several years. The departure of executive
directors from the Group results in the inapplicability of share
options and the rights to the definitive attribution of performance
shares. Under exceptional circumstances, the Board of Directors
can decide to maintain the share options and the rights to the
definitive attribution of performance shares after the executive’s
departure, if the decision of the Board of Directors is specially
justified and taken in the Company’s interest.
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.
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.
When a new executive director is nominated, the Board of
Directors decides on his or her compensation and benefits, further
to a proposal by the Compensation Committee, and in accordance
with the above general principles for determining the compensation
of the executive directors. Exceptional compensation or specific
benefits when taking office are forbidden, unless the Board of
Directors decides otherwise
the
Company’s interest and within the limits of the exceptional
circumstances.
for particular
reasons,
in
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REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
Compensation policy for the Chairman and Chief Executive Officer for fiscal year 2018
The compensation policy for the Chairman and Chief Executive Officer for fiscal year 2018, as approved by the Board of Directors on March 14,
2018, is presented below.
Base salary of the Chairman and Chief Executive Officer
(fixed compensation)
The Board of Directors decided to maintain Mr. Pouyanné’s annual
base salary (fixed compensation) for his duties as Chairman and Chief
Executive Officer for fiscal year 2018 at €1,400,000 (same as the
fixed portion due for fiscal year 2017).
The level of the Chairman and Chief Executive Officer’s fixed
compensation was set based on the responsibilities assumed and
for executive directors of
the compensation
comparable companies (particularly CAC 40 companies).
levels applied
Annual variable portion of the Chairman and Chief
Executive Officer’s compensation
The Board of Directors also decided to maintain the maximum
amount of the variable portion that could be paid to the Chairman
and Chief Executive Officer for fiscal year 2018 at 180% of his base
salary (same percentage as in fiscal year 2017). This ceiling was set
based on the level applied by a benchmark sample of companies
operating in the energy sectors.
As in 2017, the formula for calculating the variable portion of the
Chairman and Chief Executive Officer’s compensation for fiscal year
2018 uses economic parameters that refer to quantifiable 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 2018 (expressed as a percentage of the base salary)
Economic parameters (quantifiable targets):
–
Safety
–
–
–
TRIR
FIR, by comparison
Evolution of the number of Tier 1 + Tier 2 incidents
–
–
–
Return on equity (ROE)
Net debt-to-equity ratio(a)
Adjusted net income (ANI) – comparative
Personal contribution (qualitative criteria):
–
–
–
–
–
steering of the strategy and successful strategic negotiations with
producing countries
achievement of production and reserve targets
performance and outlook with respect to Downstream activities
(Refining & Chemicals / Marketing & Services)
the Group's gas-electricity-renewables growth strategy
Corporate Social Responsibility (CSR) performance
TOTAL
(a)
Net debt/shareholders' equity + net debt before IFRS 16 impact.
The parameters used include:
(cid:142)
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):
–
–
the maximum weighting of the TRIR criterion is 12% of the base
salary. The maximum weighting will be reached if the TRIR is
below 0.9; the weighting of the criterion will be zero if the TRIR is
above or equal to 1.5. The interpolations are linear between
these points of reference;
the maximum weighting of the FIR criterion is 4% of the base
salary. The maximum weighting will be reached if the FIR is the
best of the panel of the majors, and zero if the FIR is the worst
of the panel. The interpolations are linear between these two
points and depend on the ranking;
12%
4%
4%
Maximum
percentage
140%
40%
180%
20%
30%
40%
50%
15%
10%
15%
–
the maximum weighting of the changes in the number of Tier 1
+ Tier 2 incidents is 4% of the base salary. The maximum
weighting will be reached if the number of Tier 1 + Tier 2
incidents equals 100 or below. The weighting of the parameter
will be zero if the number of Tier 1 + Tier 2 incidents is equal to
or higher than 200. The interpolations are linear between these
two points of reference.
(cid:142)
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:
–
–
–
–
the maximum weighting of the criterion is reached if the ROE is
higher than or equal to 13%,
the weighting of the criterion is zero if the ROE is lower than or
equal to 6%,
the weighting of the criterion is 50% of the maximum of 30% if
the ROE is 8%,
the interpolations are linear between these three points of
reference.
(1)
(2)
ExxonMobil, Royal Dutch Shell, BP and Chevron.
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.
150
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REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
4
(cid:142)
(cid:142)
net debt-to-equity ratio (net debt/shareholders' equity + net debt
before IFRS 16 impact(1)) 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:
–
–
–
the maximum weighting of the criterion is reached for a debt
ratio equal to or below 20%,
the weighting of the criterion is zero for a debt ratio of 30%,
the interpolations are linear between these two points of
reference.
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 (ExxonMobil, Royal Dutch Shell, BP and
Chevron) determined on the basis of estimates calculated by a
group of leading financial analysts(2).
The comparison is made on the average three-year progress of the
ANI:
–
–
–
–
if the Group does better than the value observed for the panel,
plus 12%, the weighting of the criterion is equal to the maximum
of 50% of base salary,
the weighting of the criterion is 60% of this maximum if the
performance of the Group is identical to that of the panel,
the weighting of the criterion is zero if the performance of the
Group is identical to that of the panel, minus 12%,
the interpolations are linear between these points of reference.
For the ANI indicator, a sliding three-year average of the ANI for
each of the four companies in the panel will apply, and the
arithmetical average of these four averages is then calculated and
compared with the changes in TOTAL’s ANI.
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:
(cid:142)
(cid:142)
(cid:142)
steering of the strategy and successful strategic negotiations with
producing countries; and achievement of production and reserve
targets, for up to 15%;
performance and outlook with respect to Downstream activities
(Refining & Chemicals / Marketing & Services) and the Group's
gas-electricity-renewables growth strategy, for up to 10%;
CSR performance, notably taking into account climate issues in the
Group’s Strategy, the Group’s reputation in the domain of
Corporate Social Responsibility as well as the policy concerning all
aspects of diversity, for up to 15%.
Pursuant to Articles R. 225-29-1, L. 225-37-2 and L. 225-100 of the
French Commercial Code, this annual variable component, the only
variable element of the Chairman and Chief Executive Officer’
compensation for the fiscal year 2018, can only be paid with the
approval of the Annual Shareholders’ Meeting called in 2019 to
approve the accounts of fiscal year 2018.
Performance shares
The granting of performance shares to the Chairman and Chief
Executive Officer constitutes the long-term component of his total
compensation. They are structured over a five-year period: a
three-year vesting period, followed by a two-year period 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.
Performance shares are granted to the Chairman and Chief Executive
Officer each year as part of plans that are not specific to him and
concern more than 10,000 employees, a large majority of which are
non-executive employees (97% of the beneficiaries in 2017).
At its meeting on July 27, 2016, the Board of Directors decided to
grant a volume of performance shares increased by almost 20% for
the 2016 plan. The Board of Directors adopts this proactive policy in
an effort to strengthen the sense of belonging to the Group of the
beneficiaries, to identify them more closely with its performances and
to encourage their investment in the Company’s share capital. The
Chairman and Chief Executive Officer also benefited from this
increase in the volume of performance shares granted in 2016, since
he was granted 60,000 shares in 2016, compared to 48,000 in 2015.
The number of shares granted as part of the plan of July 26, 2017
remained stable.
The compensation policy proposed for fiscal year 2018 also includes
the granting of performance shares. On the proposal of the
Compensation Committee, the Board of Directors decided at its
meeting on March 14, 2018, to grant 72,000 performance shares to
the Chairman and Chief Executive Officer (a number of shares up by
20% compared with 2017), as part of a 2018 plan(3) that is not
specific to him, to take account of the Chairman and Chief Executive
Officer’s performance in fiscal year 2017. The increase in the number
of shares granted to the Chairman and Chief Executive Officer also
takes account of the fact that his terms of office as the Chairman and
Chief Executive Officer could be renewed by the Board of Directors
following the General Shareholders’ Meeting on June 1, 2018 for
three years, i.e., until 2021 (if the said Shareholders’ Meeting
approves the renewal of Mr. Pouyanné’s mandate as a director), and
that, consequently, the number of performance shares likely to be
granted annually by the Board to the Chairman and Chief Executive
Officer until the end of his next term of office in 2021 will remain
stable each year. The granted performance shares will be subject to
the same provisions as those applicable to the other senior executive
beneficiaries of the grant plans.
The performance conditions applicable to the shares granted in 2018
will be based, on one hand, on the comparative TSR (Total
Shareholder Return) and the annual variation in net cash flow per
share for fiscal years 2018 to 2020, applied as follows:
(cid:142)
its peers
the Company will be ranked each year against
(ExxonMobil, Royal Dutch Shell, BP and Chevron) during the three
vesting years (2018, 2019 and 2020) 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.
(1)
(2)
(3)
Instead of the net debt-to-equity ratio in 2017.
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.
Since 2012, the performance shares were granted in July each year. The meeting of the Board of Directors on March 14, 2018 decided to grant the
performance shares for 2018 in March, so that they coincide with the individual pay-related measures taken each year in March.
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REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
TSR N = (average price Q4 N – average price Q4 N-3 + reinvested
dividends)/(average price Q4 N-3);
(cid:142)
the Company will be ranked each year against
its peers
(ExxonMobil, Royal Dutch Shell, BP and Chevron) during the three
vesting years (2018, 2019 and 2020) using the annual variation in
net cash flow per share criterion expressed in dollars. 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.
Following the 3-year acquisition period, shares that have been
definitively granted could not be disposed of before the end of a
2-year holding period.
Commitments made by the Company to the Chairman
and Chief Executive Officer
The Board of Directors decided on March 14, 2018, on the
Compensation Committee's proposal, to maintain unchanged 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 presented below. They were approved by the Board of
Directors on December 16, 2015, and by the Annual General Meeting
on May 24, 2016, and then by the Board of Directors on February 8,
2017. They will be subject
the Annual
to
Shareholders’ Meeting on June 1, 2018, in accordance with the
provisions of Article L. 225-42-1 of the French Commercial Code.
the approval of
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.
(cid:142)
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
retraite supplémentaire à
(Régime collectif et obligatoire de
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 2017, this pension plan represented a booked
expense to TOTAL S.A. in favor of the Chairman and Chief Executive
Officer of €2,354.
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 €39,228 for 2017 (i.e., €313,824), 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.
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.
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REGISTRATION DOCUMENT 2017
to
the procedure
These undertakings regarding the supplementary pension plan were
subject
regulated agreements, as per
Article L. 225-38 of the French Commercial Code, and they were
approved by the Company’s Annual Shareholders’ Meeting on
May 24, 2016.
for
Pursuant to the provisions of Article L. 225-42-1 of the French
Commercial Code, at its meeting 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. Should the
variable portion not reach 100% of his base compensation, the rights
will be awarded 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 is longer able to acquire
additional pension rights under this plan given the rules for
determining pension rights set out in the plan and more than 20 years
of service of Mr. Pouyanné as of December 31, 2017.
The conditional rights granted to Mr. Patrick Pouyanné for the period
from January 1, 1997 to December 31, 2016 are now equal to a
reference rate of 36% for the portion of the base compensation falling
between 8 and 40 times the PASS and 20% for the portion of the
base compensation falling between 40 and 60 times the PASS.
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, 2017, a
gross annual pension estimated at €608,819 based on the length of
service acquired as of December 31, 2017 (i.e., capped at 20 years),
corresponding
to 16.02% of Mr. Pouyanné’s gross annual
compensation consisting of the annual fixed portion for 2017 (i.e.,
€1,400,000) and the variable portion to be paid in 2018(1) for fiscal
year 2017 (i.e., €2,400,300).
in
the accounts. The amount of
Nearly the full amount of TOTAL S.A.’s commitments under these
supplementary and similar retirement plans (including the retirement
benefit) is outsourced for all beneficiaries to insurance companies and
the non-outsourced balance is evaluated annually and adjusted
these
through a provision
commitments as of December 31, 2017 is €17.4 million for the
Chairman and Chief Executive Officer (€17.7 million for the Chairman
and Chief Executive Officer, the current and former 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, 2017 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, 2017, a gross annual
pension estimated at €704,550 based on the length of service
acquired as of December 31, 2017, corresponding to 18.54% of Mr.
Pouyanné’s gross annual compensation defined above (annual fixed
portion for 2017 and variable portion to be paid in 2018 for fiscal year
2017).
REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
(cid:142)
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:
(cid:142)
(cid:142)
(cid:142)
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
4
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.
(cid:142)
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:
(cid:142)
(cid:142)
(cid:142)
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.
(cid:142)
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:
(cid:142)
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 €3,178,560 in
2018, plus an additional amount if there is a dependent child or
(1)
Subject to the approval of the Ordinary General Meeting of June 1, 2018.
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REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
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;
(cid:142)
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.
Death benefits are 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.
Draft resolution prepared by the Board of Directors in accordance with Article L. 225-37-2
of the French Commercial Code submitted to the Ordinary Shareholders’ Meeting
of June 1, 2018
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
French Commercial Code
(paragraph 1), the shareholders approve the principles and
criteria for the determination, breakdown and allocation of the
fixed, variable and extraordinary components of the total
the
of
4.3.3
Executive officers’ compensation
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), the
Deputy Chief Financial Officer and the Treasurer.
As of December 31, 2017, the list of the Group’s executive officers
was as
than on
December 31, 2016):
(13 people, or one person more
follows
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
Patrick Pouyanné Chairman and Chief Executive Officer;
Arnaud Breuillac, President, Exploration & Production, member of
the Executive Committee;
Patrick de La Chevardière, Chief Financial Officer, member of the
Executive Committee;
Momar Nguer, President, Marketing & Services, member of the
Executive Committee;
Bernard Pinatel, President, Refining & Chemicals, member of the
Executive Committee;
Philippe Sauquet, President, Gas, Renewables & Power, and
President, Group Strategy-Innovation, member of the Executive
Committee;
4.3.4
Stock option and free share grants
General policy
4.3.4.1
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,
154
REGISTRATION DOCUMENT 2017
compensation (including in-kind benefits) attributable to the
Chairman and Chief Executive Officer, as presented in the report
on corporate governance, covered by Article L. 225-37 of the
French Commercial Code and
the 2017 Registration
Document (chapter 4, point 4.3.2.2).
in
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
Namita Shah, President, People & Social Responsibility, member
of the Executive Committee;
Bernadette Spinoy, Senior Vice President Industrial Safety;
Ladislas Paszkiewicz, Senior Vice President Strategy & Climate;
Jacques-Emmanuel Saulnier, Senior Vice President
Communication;
Aurélien Hamelle, Senior Vice President Legal;
Jean-Pierre Sbraire, Deputy Chief Financial Officer; and
Antoine Larenaudie, Treasurer.
In 2017, the aggregate amount paid directly or indirectly by the
Group’s French and foreign companies as compensation to the
Group’s executive officers in office as of December 31, 2017 (13
people, or one more than in 2016) was €13.66 million (compared to
€11.98 million in 2016), including €10.45 million paid to the members
of the Executive Committee (seven people). The variable component
(based on economic, HSE performance and personal contribution
criteria) represented 47.97% of this global amount of €13.66 million.
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.
REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
4
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.
(cid:142)
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 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.
(cid:142)
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.
4.3.4.2
Follow-up of grants to the executive
directors
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.
the options granted
All
to Mr. Pouyanné outstanding at
December 31, 2017 represented 0.00124% of the Company’s share
capital(1) on that date.
Stock options granted in 2017 to each executive director by the issuer and by any Group company
(AMF position-recommendation No. 2009-16 – AMF Table No. 4)
Executive directors
Patrick Pouyanné, Chairman
and Chief Executive Officer
Type of
options
(purchase or
subscription)
Plan No.
and date
Valuation of
options (€)(a)
Number of
options
granted
during the
fiscal year Exercise price
Exercise
period
-
-
-
-
-
-
(a)
According to the method used for the Consolidated Financial Statements.
Stock options exercised in fiscal year 2017 by each executive director (AMF position-recommendation No. 2009-16 – AMF Table No. 5)
Patrick Pouyanné
Chairman and Chief Executive Officer since December 19, 2015
Plan No. and date
2010 Plan
09/14/2010
Number of options
exercised during
the fiscal year
Exercise price
15,000
38.20
(1)
Based on a capital of 2,528,989,616 shares.
REGISTRATION DOCUMENT 2017
155
4
REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
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.
Summary tables
Free shares granted to each director(a) in fiscal year 2017 by the issuer and by any Group company
(AMF position-recommendation No. 2009-16 – AMF Table No. 6)
Number of
shares
granted
during the
fiscal year
Valuation
of the
shares
(€)(b)
Acquisition
date
60,000
2,134,200
07/27/2020
Date of
transferability Performance conditions
07/28/2022 The performance conditions are based:
–
for 50% of the performance shares granted, the Company
will be ranked each year against its peers(c) during the three
vesting years (2017, 2018 and 2019) 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 4.3.2.1 of
this chapter.
Plan No.
and date
2017 Plan
07/26/2017
Patrick
Pouyanné
Chairman and
Chief Executive
Officer
2017 Plan
07/26/2017
2017 Plan
07/26/2017
2017 Plan
07/26/2017
Marc Blanc
Director
representing
employees until
May 26, 2017
Renata Perycz
Director
representing
employee
shareholders
since May 24,
2016
Christine
Renaud
Director
representing
employees since
May 26, 2017
TOTAL
–
n/a
n/a
n/a
n/a
260
9,248.2
07/27/2020
07/28/2022
-
-
-
-
60,260 2,143,448.2
(a)
(b)
(c)
List of executive and non-executive directors who had this status during fiscal year 2017.
The valuation of the shares was calculated on the grant date according to the method used for the Consolidated Financial Statements.
ExxonMobil, Royal Dutch Shell, BP and Chevron.
Free shares that have become transferable for each director(a) (AMF position-recommendation No. 2009-16 – AMF Table No. 7)
Plan No. and
date
Number of shares that
become transferable
during the fiscal year Vesting conditions
Patrick Pouyanné
Chairman and Chief Executive
Officer
Marc Blanc
Director representing employees
until May 26, 2017
Renata Perycz
Director representing employee
shareholders since May 24, 2016
Christine Renaud
Director representing employees
since May 26, 2017
2014 Plan
07/30/2017
2014 Plan
07/30/2017
2014 Plan
07/30/2017
2014 Plan
07/30/2017
9,500
n/a
119
0
Shares are subject to a performance condition based on the Group’s average
ROE in fiscal years 2014, 2015 and 2016. For beneficiaries other than senior
executives, the performance condition applies to shares in excess of the first
100.
For the 2014 plan, pursuant to performance condition, the acquisition rate
was 38%.
(a)
List of executive and non-executive directors who had this status during fiscal year 2017.
156
REGISTRATION DOCUMENT 2017
REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
4.3.4.3
Follow-up of TOTAL stock option plans as of December 31, 2017
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 2017 is as follows:
Executive officers(b)
Senior executives
Other employees
TOTAL
Executive officers(b)
Senior executives
Other employees
TOTAL
Executive officers(b)
Senior executives
2009 Plan(a):
Subscription options
Decision of the Board of
Directors of September 15,
2009
Strike price: €39.90;
discount: 0.0%
2010 Plan(a):
Subscription options
Decision of the Board of
Directors of September 14,
2010
Strike price: €38.20;
discount: 0.0%
2011 Plan(a):
Subscription options
Decision of the Board of
Directors of September 14,
2011
Strike price: €33.00;
discount: 0.0%
Number of
beneficiaries
Number of
notified options
26
284
1,201,500
1,825,540
Percentage
27.4%
41.6%
1,742
2,052
25
282
1,790
2,097
29
177
1,360,460
4,387,500
1,348,100
2,047,600
1,392,720
4,788,420
846,600
672,240
4
Average number
of options per
beneficiary
46,212
6,428
781
2,138
53,924
7,261
778
2,283
29,193
3,798
-
7,373
31.0%
100%
28.2%
42.8%
29.0%
100%
55.7%
44.3%
-
100%
Other employees
TOTAL
-
206
-
1,518,840
(a)
(b)
The grant rate of performance-related options was 100% for the 2009, 2010 and 2011 plans.
Members of the Management Committee and the Treasurer, as defined on the date of the Board meeting granting the performance shares.
For the 2009 stock option plan, 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
to a
beneficiaries of more
than 3,000 options are subject
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.
REGISTRATION DOCUMENT 2017
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4
REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
Breakdown of TOTAL stock option plans
History of stock option grants – Information on stock options (AMF position-recommendation No. 2009-16 – AMF Table No. 8)
Type of options
Subscription options Subscription options Subscription options
2009 Plan
2010 Plan
2011 Plan
Total
Date of the Shareholders’ Meeting
Date of the Board meeting/grant date(a)
Total number of options granted by the
Board of Directors, including to:
Executive and non-executive directors(b)
–
–
–
–
P. Pouyanné
M. Blanc
C. Renaud
R. Perycz
Date as of which the options may be exercised:
Expiry date
Strike price (€)(c)
Cumulative number of options exercised as
of December 31, 2017
Cumulative number of options canceled as
of December 31, 2017
Number of options:
05/11/2007
09/15/2009
05/21/2010
09/14/2010
05/21/2010
09/14/2011
4,387,620
4,788,420
1,518,840
10,694,880
30,000
30,000
n/a
n/a
n/a
09/16/2011
09/15/2017
39.90
40,000
40,000
n/a
n/a
n/a
09/15/2012
09/14/2018
38.20
30,400
30,400
n/a
n/a
n/a
09/15/2013
09/14/2019
33.00
100,400
100,400
n/a
n/a
n/a
4,159,730
2,746,851
1,023,872
7,930,453
277,890
91,197
4,400
373,487
Outstanding as of January 1, 2017
1,779,053
2,880,237
626,328
5,285,618
–
–
–
–
Granted in 2017
Canceled in 2017(d)
Exercised in 2017
EXISTING OPTIONS AS OF DECEMBER 31, 2017
-
195,370
1,583,683
-
-
-
929,865
1,950,372
-
-
135,760
490,568
-
195,370
2,649,308
2,440,940
(a)
(b)
(c)
(d)
The grant date is the date of the Board meeting granting the options.
List of executive and non-executive directors who had this status during fiscal year 2017. Mr. Blanc’s term of office as a director came to an end on May 26, 2017. Ms.
Renaud has been a director representing employees since May 26, 2017.
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.
The 194,510 options canceled in 2017 were unexercised options that expired on September 15, 2017 due to the expiration of the 2009 stock option plan and 860
were cancelations due to succession.
If all the stock options outstanding at December 31, 2017 were exercised, the corresponding shares would represent 0.10%(1) of the Company’s
share capital on that date.
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 ten employees (other than executive or non-executive directors) exercising the largest
number of options (AMF position-recommendation No. 2009-16 – AMF Table No. 9)
Total number of
options granted/
exercised
Average
weighted strike
price (€)
2009 Plan
09/15/2009
2010 Plan
09/14/2010
2011 Plan
09/14/2011
Options granted in fiscal year 2017 by TOTAL S.A.
and its affiliates(a) to each of the 10 employees of
TOTAL S.A. and its affiliates (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(a) and
exercised in fiscal year 2017 by the 10 employees of
TOTAL S.A. and its affiliates (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)
-
-
-
-
-
398,680
38.28
152,900
202,100
43,680
(a)
Pursuant to the conditions of Article L. 225-180 of the French Commercial Code.
(1)
Based on a capital of 2,528,989,616 shares.
158
REGISTRATION DOCUMENT 2017
REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
4.3.4.4
Follow-up of TOTAL free share grants as of December 31, 2017
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
2013 Plan(a)
Decision of the Board
of Directors of July 25,
2013
2014 Plan(a)
Decision of the Board
of Directors of July 29,
2014
2015 Plan(a)
Decision of the Board
of Directors of July 28,
2015
2016 Plan
Decision of the Board
of Directors of July 27,
2016
2017 Plan
Decision of the Board
of Directors of July 26,
2017
Executive officers(b)
Senior executives
Other employees(c)
TOTAL
Executive officers(b)
Senior executives
Other employees(c)
TOTAL
Executive officers(d)
Senior executives
Other employees(c)
TOTAL
Executive officers(d)
Senior executives
Other employees(c)
TOTAL
Executive officers(d)
Senior executives
Other employees(c)
TOTAL
32
277
9,625
9,934
32
281
9,624
9,937
13
290
10,012
10,315
12
279
10,028
10,319
12
277
10,288
10,577
422,600
934,500
3,107,100
4,464,200
421,200
975,300
3,089,800
4,486,300
264,600
1,132,750
3,364,585
4,761,935
269,900
1,322,300
4,047,200
5,639,400
266,500
1,321,200
4,092,249
5,679,949
9.5%
20.9%
69.6%
100%
9.4%
21.7%
68.9%
100%
5.6%
23.8%
70.6%
100%
4.8%
23.4%
71.8%
100%
4.7%
23.3%
72.0%
100%
4
13,206
3,374
323
449
13,163
3,471
321
451
20,354
3,906
336
462
22,492
4,739
404
547
22,208
4,770
398
537
(a)
(b)
(c)
(d)
For the 2013 and 2014 plans, the shares acquisition rate related to the ROE performance condition was 63% and 38%, respectively. For the 2015 plan, the shares
acquisition rate related to a comparison of ROE and ANI was 82%.
Members of the Management Committee and the Treasurer, as defined on the date of the Board meeting granting the performance shares.
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 from November 4, 2014 to May 26, 2017, 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 employee shareholders since May 24, 2016, was granted 160 shares under the 2016
plan and 260 shares under the 2017 plan. Ms. Renaud, an employee of the Group and a TOTAL S.A. director representing employee shareholders since May 26, 2017,
was not granted any shares under the 2017 plan.
Group’s executive officers as defined on the date of the Board meeting granting the performance shares. The Group’s executive officers on this date included 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.
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.
(2017, 2018 and 2019) 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
The definitive grant of performance shares is subject to a presence
condition and performance conditions.
For the 2017 plan, the applicable performance conditions are the
following:
(cid:142)
for 50% of the performance shares granted, the Company will be
ranked each year against its peers(1) during the three vesting years
(cid:142)
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.
REGISTRATION DOCUMENT 2017
159
4
REPORT ON CORPORATE GOVERNANCE
Compensation for the administration and management bodies
Breakdown of TOTAL performance share plans
History of TOTAL performance share grants – Information on performance shares granted (AMF position-recommendation
No. 2009-16 – AMF Table No. 10)
Date of the Shareholders’ Meeting
Date of Board meeting/grant date
Closing price on grant date
Average purchase price per share paid by the Company
Total number of performance shares granted, including to:
Executive and non-executive directors(a)
–
–
–
–
P. Pouyanné
M. Blanc(c)
R. Perycz(d)
C. Renaud(c)
2013 Plan
2014 Plan
2015 Plan
2016 Plan
2017 Plan
05/13/2011
05/16/2014
05/16/2014
05/24/2016
05/24/2016
07/25/2013
07/29/2014
07/28/2015
07/27/2016
07/26/2017
€40.005
€40.560
€52.220
€48.320
€43.215
€45.150
€42.685
€45.38
€43.220
n/a
4,464,200
4,486,300
4,761,935
5,639,400
5,679,949
22,500
22,500(b)
25,000
25,000(b)
n/a
n/a
n/a
-
n/a
n/a
48,000
48,000
-
n/a
n/a
60,160
60,000
-
160
n/a
60,260
60,000
n/a
260
-
Start of the vesting period
07/25/2013
07/29/2014
07/28/2015
07/27/2016
07/26/2017
Definitive grant date, subject to the conditions set (end of
the vesting period)
Disposal possible from (end of the mandatory holding
period)
07/26/2016
07/30/2017
07/29/2018
07/28/2019
07/27/2020
07/26/2018
07/30/2019
07/29/2020
07/29/2021
07/28/2022
Number of free shares:
–
–
–
–
Outstanding as of January 1, 2017
Notified in 2017
Canceled in 2017
Definitively granted in 2017(e)
EXISTING OPTIONS AS OF DECEMBER 31, 2017
-
-
-
-
4,364,500
4,730,735
5,637,560
-
-
(2,157,820)
(2,206,680)
-
(31,480)
(1,950)
-
5,679,949
(29,050)
(1,410)
(910)
-
-
4,697,305
5,607,100
5,679,039
(a)
(b)
(c)
(d)
(e)
List of executive and non-executive directors who had this status during fiscal year 2017.
Shares granted in respect of his previous salaried duties.
Mr. Blanc, a TOTAL S.A. employee and a TOTAL S.A. director representing employees from November 4, 2014 to May 26, 2017. Ms. Renaud, a TOTAL S.A. employee
and a TOTAL S.A. director representing employees since May 26, 2017.
Ms. Perycz, a TOTAL Polska sp. Z.o.o. employee and a TOTAL S.A. director representing employee shareholders since May 24, 2016.
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, 2017 were definitively granted, they would represent 0.63%(1) of the Company’s share
capital on that date.
Performance shares granted to the 10 employees (other than executive and non-executive directors) receiving the largest number
of performance shares
Number of
performance shares
notified/definitively
granted
Date of the final
award (end of
the vesting
period)
Date of
transferability
(end of the
holding period)
Date of
the award
224,000
07/26/2017
07/27/2020
07/28/2022
61,750
07/29/2014
07/30/2017
07/30/2019
Free performance share grants approved by the Board of
Directors at its meeting on July 26, 2017 to the ten
employees of TOTAL S.A. and its affiliates (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)(a)
Performance shares definitively granted in fiscal year 2017
to the 10 employees of TOTAL S.A. and its affiliates (other
than executive and non-executive directors on the date of
the decision) receiving the largest number of performance
shares
(a)
These shares will be definitively granted to their beneficiaries at the end of a three-year vesting period, i.e., on July 27, 2020, subject to two performance conditions
being met. 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 28, 2022.
(1)
Based on a capital of 2,528,989,616 shares.
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REPORT ON CORPORATE GOVERNANCE
Additional information about corporate governance
4.4
Additional information about corporate governance
4.4.1
Regulated agreements and undertakings and related-party transactions
Regulated agreements and undertakings
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
In addition, to TOTAL’s knowledge there exists no agreement, other than the agreements related to its ordinary course of business and signed
under normal conditions, engaged, directly or through an intermediary, between, on the one hand, any director or shareholder holding more than
10% of TOTAL S.A.’s voting rights and, on the other hand, a company of which TOTAL S.A. directly or indirectly owns more than half the
capital.
Related-party transactions
Details of transactions with related parties as specified by the regulations adopted under EC regulation 1606/2002, entered into by the Group
companies during fiscal years 2015, 2016 or 2017, are provided in Note 8 to the Consolidated Financial Statements (refer to point 8.7 of
chapter 8).
4
These transactions primarily concern equity affiliates and non-consolidated companies.
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REPORT ON CORPORATE GOVERNANCE
Additional information about corporate governance
4.4.2
Delegations of authority and powers granted to the Board of Directors
with respect to share capital increases and authorization for share
cancellation
Table compiled in accordance with Article L. 225-37-4 3° 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, 2017:
Type
Debt securities
representing
rights to capital
Cap on par value, or number of shares or
expressed as % of
share capital
Use in 2017, by
value, or
number of
shares
Available balance
as of 12/31/2017
by value, or
number of shares
€10 Bn in securities
-
€10 Bn
Date of delegation
of authority or
authorization by
the Extraordinary
Shareholders’
Meeting (ESM)
Expiry date and
term of authorization
granted to the Board
of Directors
May 24, 2016
(18th, 19th, 20th and
22nd resolutions)
July 24, 2018
26 months
An overall cap of €2.5 Bn (i.e., a maximum of
1,000 million
a
pre-emptive subscription right), from which
can be deducted:
issued with
shares
Maximum cap
for the issuance
of securities
granting
immediate or
future rights to
share capital
Nominal share
capital
shares
1/ a specific cap of €600 million, i.e., a
maximum of 240 million
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 million 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
1/b a sub-cap of €600 million through
in-kind contributions when provisions of
Article L. 225-148
French
Commercial Code are not applicable
the
of
the share
2/ a specific cap of 1.5% of
capital on the date of the Board(b) decision
for share capital increases reserved for
employees participating
in a Company
savings plan
0.75% of share capital(b) on the date of the
Board decision to grant options
125.1 million
shares(a)
€2.187 Bn
(i.e., 874.9 million
shares)
May 24, 2016
(18th resolution)
July 24, 2018
26 months
-
€356.2 million
May 24, 2016
(19th and 21st
resolutions)
July 24, 2018
26 months
-
€356.2 million
May 24, 2016
(20th and 21st
resolutions)
July 24, 2018
26 months
97.5 million
shares(c)
€356.2 million
May 24, 2016
(22nd resolution)
July 24, 2018
26 months
27.5 million
shares(d)
-
10.4 million
shares
19.0 million
shares
May 24, 2016
(23rd resolution)
May 24, 2016
(25th resolution)
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
11.3 million
shares(e)
8.9 million
shares(d)
May 24, 2016
(24th resolution)
July 24, 2019
38 months
(a)
(b)
(c)
(d)
(e)
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 22nd resolution of the ESM held on May 24, 2016, the
Board of Directors decided on February 7, 2018, subject to the fulfillment of the conditions precedent stipulated in the contribution agreement concluded with A.P. Møller-Mærsk A/S on the same day, a share
capital increase of of the Company by issuing 97,522,593 shares in compensation of the contribution of the shares of Mærsk Olie og Gas A/S in 2018 (see note (c) below). 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 (d) below). Pursuant to the 23rd resolution
of the ESM held on May 24, 2016, the Board of Directors decided on July 26, 2017 to proceed with a share capital increase reserved for Group employees in 2018 (see note (c) below). As a result, the available
balance under this authorization was 874,945,217 new shares as of December 31, 2017.
Share capital as of December 31, 2017: 2,528,989,616 shares.
The number of new shares authorized under the 22nd resolution of the ESM held on May 24, 2016 cannot exceed 240 million shares. Refer to note (a).
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.
Pursuant to the subscription requests made by employees, on April 26, 2017, the Chairman and Chief Executive Officer exercised his powers delegated by the Board of Directors on July 27, 2016 to observe a
capital increase by issuing 9,532,190 shares. The meeting of the Board of Directors of July 26, 2017 decided to proceed with a share capital increase in 2018 with a cap of 18,000,000 shares (subscription to
the shares under this operation is planned for the first quarter of 2018, subject to the decision of the Chairman and Chief Executive Officer). As a result, the available balance under this authorization was
10,402,654 new shares as of December 31, 2017.
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. 10,393 shares as a deferred contribution under the 2017 ACRS were attributed by the Board of
Directors on April 26, 2017. 5,679,949 shares were awarded by the Board of Directors on July 26, 2017. As a result, the number of shares that could still be awarded as of December 31, 2017 was
8,902,174 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, and of the 60,000 existing shares granted under presence and performance conditions to the
Chairman and Chief Executive Officer by the Board of Directors on July 26, 2017, the remaining number of shares that may still be awarded to the executive directors is 132,898 shares.
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Additional information about corporate governance
Authorization to cancel shares of the Company
Pursuant to the terms of the 13th resolution of the Annual
Shareholders’ Meeting held on May 26, 2017, 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, 2021.
Based on 2,528,989,616 shares outstanding on December 31, 2017,
the Company may, up until the conclusion of the Annual Shareholders’
Meeting called to approve the financial statements for the fiscal year
ending
of
2021,
252,898,961 shares, before reaching the cancellation threshold of 10%
of share capital canceled over a 24-month period.
on December 31,
a maximum
cancel
4.4.3
Provisions of the bylaws governing shareholders’ participation to General
Meetings
4.4.3.1
Calling of shareholders to
Shareholders’ 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.
It may not, however,
Only the Extraordinary Shareholders’ Meeting is authorized to modify
the bylaws.
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
rights. Decisions of Extraordinary
Shareholders’ Meeting are made with a two thirds majority of votes of
shareholders present, represented or participating by remote voting.
that confer 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
4
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.
4.4.3.2
Admission of shareholders to
Shareholders’ Meetings
(attestation de participation) delivered
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
the
of participation
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.
to
4.4.4
Information about factors likely to have an impact in the event of a public
offering or exchange
In accordance with Article L. 225-37-5 of the French Commercial
Code, information relating to factors likely to have an impact in the
event of a public offering is provided below.
(cid:142)
Structure of the share capital
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 points
6.4.1 to 6.4.3 in chapter 6.
(cid:142)
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 7.2.4 of chapter 7. The Company has not
been informed of any clauses as specified in paragraph 2 of
Article L. 225-37-4 of the French Commercial Code.
(cid:142)
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
in
paragraph 4 of Article L. 225-37-5 of the French Commercial
Code.
rights as specified
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REPORT ON CORPORATE GOVERNANCE
Additional information about corporate governance
(cid:142)
(cid:142)
(cid:142)
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 6.4.2
of this chapter 6.
Shareholder agreements of which the Company is aware and that
could restrict share transfers and the exercise of voting rights
(cid:142)
The Company
is not aware of any agreements between
shareholders as specified in paragraph 6 of Article L. 225-37-5 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.
(cid:142)
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, which expire
during a public offering.
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. 225-37-5 of
the French Commercial Code. The Company also believes that
in paragraph 10 of
there are no agreements as specified
Article L. 225-37-5 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 4.2.2 of this chapter.
4.4.5
Statutory auditors
4.4.5.1
Auditor’s term of office
Statutory auditors
ERNST & YOUNG Audit
Alternate auditors
Cabinet Auditex
1/2, place des Saisons, 92400 Courbevoie-Paris-La Défense,
Cedex 1
1/2, place des Saisons, 92400 Courbevoie-Paris-La Défense,
Cedex 1
Appointed: May 21, 2010 for a 6-fiscal year term. Appointment
renewed on May 24, 2016 for an additional 6-fiscal year term.
Appointed: May 14, 2004. Appointment renewed on May 24, 2016
for an additional 6-fiscal year term.
Yvon Salaün, Laurent Miannay
KPMG S.A.
Tour EQHO, 2 avenue Gambetta, CS 60055, 92066 Paris La Défense
Cedex
Appointed: May 13, 1998. Appointment renewed on May 24, 2016
for an additional 6-fiscal year term.
Jacques-François Lethu, Eric Jacquet
KPMG Audit IS
Tour EQHO, 2 avenue Gambetta, CS 60055, 92066 Paris La Défense
Cedex
Appointed: May 21, 2010 for a 6-fiscal year term. Appointment
renewed on May 24, 2016 for an additional 6-fiscal year term.
French law provides that the statutory and alternate auditors are
appointed for renewable 6-fiscal year terms. The terms of office of the
statutory auditors and of the alternate auditors will expire at the end
of the Annual Shareholders’ Meeting called in 2022 to approve the
financial statements for fiscal year 2021.
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Additional information about corporate governance
4.4.5.2
Fees received by the statutory auditors (including members of their networks)
ERNST & YOUNG Audit
KPMG S.A.
Amount in M$
(excluding VAT)
%
Amount in M$
(excluding VAT)
%
2016
2017
2016
2017
2016
2017
2016
2017
20.2
3.2
17.0
5.0
0.7
4.3
22.3
3.3
19.0
2.8
0.9
1.9
25.2
25.1
6.1
0.5
6.6
4.2
0.7
4.9
31.8
30.0
63.6
10.2
53.4
15.6
2.2
13.4
79.2
19.1
1.6
20.8
100
74.5
10.9
63.6
9.3
3.1
6.2
16.5
3.0
13.5
4.5
0.5
4.0
17.7
3.3
14.4
3.8
0.7
3.1
83.8
21.0
21.5
13.9
2.3
16.2
100
2.4
0.1
2.5
1.5
0.2
1.7
23.5
23.2
70.2
12.8
57.4
19.1
2.1
17.0
89.4
10.2
0.4
10.6
100
76.3
14.2
62.1
16.4
3.0
13.4
92.7
6.5
0.9
7.3
100
4
Audit
Statutory auditors, certification, examination
of the parent company and consolidated
accounts
TOTAL S.A.
Fully consolidated subsidiaries
Other work and services directly related to
the mission of the statutory auditors
TOTAL S.A.
Fully consolidated subsidiaries
SUBTOTAL
Other services provided by the networks
to fully consolidated subsidiaries
Legal, tax, labor law
Others
SUBTOTAL
TOTAL
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
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5
SOCIAL, ENVIRONMENTAL
AND SOCIETAL INFORMATION
5.1
Social information
5.1.1
Employment
5.1.2
Organization of work
5.1.3
Dialogue with employees
5.1.4
Training
5.1.5
Equal opportunity
5.2
Safety, health and environment
information
5.2.1
Occupational health and safety
5.2.2
Environmental protection
5.2.3
Climate change
5.2.4
TCFD (Task Force on Climate-related
Financial Disclosures)
171
171
173
174
175
176
178
178
180
186
189
5.3
Societal information
Dialogue and involvement of local
stakeholders
Control of the societal impacts
of the Group’s activities
5.3.1
5.3.2
5.3.3
Acting as a partner in the socio-economic
development of the territories
where the Group is present
195
193
193
194
5.3.4
Contractors and suppliers
5.3.5.
Fair operating practices
5.4
Reporting scopes and method
5.4.1
Reporting guidance
5.4.2
Scopes
5.4.3
Principles
5.4.4
Details of certain indicators
199
201
204
204
204
205
205
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
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5
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:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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;
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 has been listed on DJSI Europe every year since
2005, excepting 2015. TOTAL was third of the extractive sector and
first of the Oil & Gas sector in the first ranking of Corporate Human
Rights Benchmark published in 2017.
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 5.4 of this chapter. 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.
TOTAL and the United Nations’ Sustainable
Development Goals
In 2015, the United Nations adopted the 17 Sustainable Development
Goals
role
corporations can play in economic development and growth and ask
(SDGs). These goals acknowledge
the decisive
them to show creativity and innovation in finding solutions to global
sustainable development challenges.
In 2016, TOTAL committed to contributing to the achievement of the
SDGs. To this end, the Group started by identifying the goals to
which it already contributes, in particular through the following
initiatives:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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 Sustainable Development Scenario (2°C)
(refer to point 5.2.3 of this chapter). An update of this report was
published in May 2017, and another update will be published in
2018;
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 5.3.5.2 in this
chapter). An update of this report will be published in 2018;
access to energy (SDG 7): TOTAL’s ambition is to supply
affordable energy to growing populations (refer to point 5.2.3.5 in
this chapter); 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 5.2.2.5 in this chapter).
In 2017, TOTAL launched a project to identify and prioritize the SDGs
to which it can make the most significant contribution and make
public commitments in a show of its support for the United Nations’
recommendations for the implementation of the SDGs.
In 2017, the Global Compact appointed TOTAL’s Chairman and
Chief Executive Officer as an SDG Pioneer in recognition of the
commitments made by the Group for driving partnerships for low
carbon investments.
TOTAL also actively contributed to the definition by IPIECA of a
common framework describing the contributions that the oil industry
can make to the SDGs.
Information on the Group’s current contributions per SDG can be
found on the Group’s website (sustainable-performance.total.com).
The SDG pictograms are included in this chapter to illustrate TOTAL’s
contributions.
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SOCIAL, ENVIRONMENTAL AND SOCIETAL INFORMATION
Social information
5.1
Social information
The quantitative information set out below regarding the Group’s
employees worldwide covers all the entities that are fully consolidated
in the Group’s financial statements(1). However, some of the data
come 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
representative
consolidated companies at the business segment and regional levels;
from
when WHRS is mentioned in this document, reference is made to
data related to this sample, representing 87.2% of the Group’s
employees at 133 subsidiaries in 2017, which was relatively stable
compared to 2016 (87.5%) and 2015 (91%).
The 2016 and 2015 segment-based data in this point 5.1 has been
recalculated on the basis of the reorganization of the Group, which
took full effect on January 1, 2017 (refer to point 1.6.2 in chapter 1).
5.1.1
Employment
5
Group employees
5.1.1.1
As of December 31, 2017, the Group had 98,277 employees
belonging to 313 employing companies and subsidiaries located in
105 countries. The
the breakdown of
tables below present
employees by the following categories: gender, nationality, business
segment, region and age bracket.
Group registered headcount
as of December 31,
2017
2016
2015
TOTAL NUMBER OF EMPLOYEES
98,277 102,168 96,019
Women
Men
French
Other nationalities
Breakdown by business segment
33.3% 32.4% 32.0%
66.7% 67.6% 68.0%
31.8% 31.0% 31.2%
68.2% 69.0% 68.8%
Exploration & Production segment
14.3% 14.6% 17.1%
Gas, Renewables & Power segment
11.8% 12.7%
9.8%
Refining & Chemicals segment
49.8% 50.4% 50.2%
Refining & Chemicals
Trading & Shipping
49.1% 49.8% 49.6%
0.7%
0.6%
0.6%
Marketing & Services segment
21.6% 20.4% 21.3%
Corporate
2.5%
1.9%
1.7%
Group registered headcount
as of December 31,
Breakdown by age bracket
< 25 years
25 to 34 years
35 to 44 years
45 to 54 years
> 55 years
2017
2016
2015
6.9%
7.0%
6.6%
26.4% 27.8% 28.8%
29.9% 29.3% 29.1%
23.5% 22.7% 22.6%
13.3% 13.2% 12.9%
At year-end 2017, the countries with the most employees were
France, Mexico, Poland, the United States, Belgium and China.
The drop in the number of employees between 2016 and 2017 was
principally due to the sale of Atotech finalized in January 2017 and
the reduction of the headcount of the SunPower activity. The
increase in the number of employees between 2015 and 2016 was
principally due to the acquisitions of Saft Groupe and Lampiris.
The breakdown by gender and nationality of managers or equivalent
positions (≥ 300 Hay points (2)) is as follows:
Breakdown of managers or
equivalent as of December 31,
2017
2016
2015
TOTAL NUMBER OF MANAGERS
28,369 29,243 27,624
Group registered headcount
as of December 31,
Breakdown by region
France
French overseas departments
and territories
Rest of Europe
Africa
North America
Latin America
Asia
Middle East
Oceania
2017
2016
2015
Women
Men
French
32.1% 31.1% 31.5%
Other nationalities
26.3% 25.5% 25.1%
73.7% 74.5% 74.9%
41.9% 41.2% 39.1%
58.1% 58.8% 60.9%
0.4%
0.4%
0.4%
26.1% 25.2% 24.5%
10.1%
9.9% 10.5%
7.1%
7.1%
6.4%
12.5% 11.8% 10.5%
10.5% 13.4% 14.8%
1.0%
0.2%
1.0%
0.1%
1.3%
0.1%
(1)
(2)
Refer to point 5.4.3.2 of this chapter.
The Hay method is a unique reference framework used to classify and assess jobs.
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The table below presents the breakdown by business segment of the
Group employees present(1).
The increase in the number of departures from 2016 to 2017 was
mainly due to a high turnover in SunPower and Hutchinson.
Breakdown by business segment
of the Group employees present
as of December 31,
2017
2016
2015
Exploration & Production segment
13,023
13,975
15,366
Gas, Renewables & Power segment
11,492
12,841
9,390
Refining & Chemicals segment
47,985
49,838
47,224
Refining & Chemicals
Trading & Shipping
47,350
50,442
46,661
635
604
563
Marketing & Services segment
20,932
20,402
19,923
Corporate
5.1.1.2
2,433
1,951
1,568
Employees joining and leaving
TOTAL
As of December 31,
2017
2016
2015
TOTAL NUMBER HIRED ON
OPEN-ENDED CONTRACTS
Women
Men
French
Other nationalities
12,141
10,940
9,022
38.6% 36.9% 34.9%
61.4% 63.1% 65.1%
9.7%
6.6%
6.5%
90.3% 93.4% 93.5%
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 and 2017. Nevertheless, hiring by the
consolidated companies rose by 11% in comparison with 2016
(+1,201 employees). The geographical areas that hired the most
employees were Latin America (43%), with a particularly sharp
increase in Mexico, Europe, excluding France (19%), Asia (14.1%),
followed distantly by France (9.5%).
Refining & Chemicals remained the largest recruiter, with 52.2% of
Group hires, of which 49.8% by Hutchinson, in particular in Europe
(Romania and Poland).
In 2017, the fully consolidated Group companies also hired 5,287
employees on fixed-term contracts, compared with 4,433 in 2016 by
the consolidated companies. Almost 51% of employees hired on
fixed-term contracts were in Europe, excluding France, and in
particular by Hutchinson. Close to 409,491 job applications were
received by the companies covered by the WHRS.
As of December 31,
TOTAL NUMBER OF
DEPARTURES(a)
Deaths
Resignations
Dismissals/negotiated departures
Ruptures conventionnelles (specific
negotiated departures in France)
TOTAL DEPARTURES/TOTAL
EMPLOYEES
2017
2016
2015
13,111
11,058
7,724
90
7,379
5,492
90
5,868
4,958
128
4,719
2,754
150
142
123
13.3% 10.8%
8%
(a)
Excluding retirements, transfers, early retirements, voluntary departures and
expiration of short-term contracts.
Compensation
5.1.1.3
The Group’s Human Resources policy applies to all companies in
which TOTAL S.A. holds the majority of voting rights. In terms of
to ensure external
compensation,
competitiveness and internal fairness, reinforce the link to individual
performance, increase employee share ownership and fulfill the
Group’s CSR commitments.
the aim of
this policy
is
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
to assess
locally. Regular benchmarking is used
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:
(cid:142)
(cid:142)
a base salary, which each year, in addition to a general salary-
raise campaign, is subject to a merit-based salary-raise campaign
intended
individual performance
according to the targets set during the annual individual review,
including at least one HSE (Health, Safety, Environment) target;
and
to compensate employees’
is
targets) and
to compensate
individual variable compensation starting at a certain level of
individual
intended
responsibility, which
performance (quantitative and qualitative attainment of previously
set
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 2017, 85% of the Group’s entities (WHRS
scope) included HSE criteria in the variable compensation.
the employee’s contribution
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(2) (scope of more than 18,000 employees in 2017)
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(3)) and the attainment of safety targets
(injury rate and accidental deaths). This agreement must be
renegotiated before June 30, 2018 for the period 2018-2020.
(1)
(2)
(3)
Employees present as defined in point 5.4.3.2 of this chapter.
i.e., the following 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, and since January 1, 2017, Total Global Financial Services, Total Global Procurement,
Total Global Human Resources Services, Total Learning Solutions, Total Facilities Management Services and Total Consulting.
ExxonMobil, Royal Dutch Shell, BP and Chevron.
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each year to capital increases reserved for employees. 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
(ADRs) in the United States.
Pursuant to the authorization given by the Annual Shareholders’
Meeting of May 24, 2016, the Board of Directors of TOTAL S.A.
approved, at its meeting on July 26, 2017, the principle of a share
capital increase reserved for employees to be completed in 2018.
This operation will concern approximately 110 countries. As in 2017,
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 will give
holders current dividend rights. The subscription period will close at
the start of April 2018.
More than 41,000 employees from 98 countries took part in the
preceding operation finalized in 2017.
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 €71.3 million in 2017.
5
The Group also offers pension and employee benefit programs
(health and death) meeting the needs of the subsidiaries and the
Group’s standards. These programs, which supplement those that
may be provided for by local regulations, allow each employee to:
(cid:142)
(cid:142)
(cid:142)
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;
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.
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
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.
increases
reserved
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 4.3.4 of chapter 4). The
2017 plan approved by the Board of Directors of TOTAL S.A. in
July 2017 granted a more than 20% higher volume of performance
shares compared with 2015 and ensured a significant replenishment
rate: 43% of plan beneficiaries had not received performance shares
the previous year. Almost 10,570 employees were concerned by this
plan, with more than 97% of non-senior executive employees.
TOTAL also invites employees of companies more than 50% owned
in terms of voting rights, and subscribing to the Shareholder Group
Savings Plan (PEG-A) created in 1999 for this purpose, to subscribe
5.1.2
Organization of work
The average work week is determined in accordance with applicable
local law and limits set by International Labor 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 Gas, Renewables & Power, Refining &
Chemicals and Marketing & Services business segments, while the
rotational regime concerns the Exploration & Production segment.
Depending on local law, there are several programs that aim to favor
a better balance between work and private life and equal career
opportunities. In France, teleworking was introduced in 2012.
(1)
(2)
(3)
Total Actionnariat France, Total France Capital+, Total Actionnariat International Capitalisation, Total International Capital.
For employees providing a continual activity with relays between teams to maintain production (two or three 8-hour shifts), for example in plants or refineries.
For employees working at a location (town or worksite) far from their place of residence with alternating periods of work and rest.
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As of December 31, 2017, the number of teleworkers in France
(WHRS scope) was 952, 32.1% of whom were men, compared to
746 in 2016 and 454 in 2015.
The sickness absenteeism rate is one of the indicators monitored in
the WHRS:
WHRS
2017
WHRS
2016
WHRS
2015
WHRS
2017
WHRS
2016
WHRS
2015
% of companies offering the option
of teleworking
% of employees involved in
teleworking of those given the option
24.1%
18.5% 17.2%
4.1%
3.4%
2.5%
5.1.3
Dialogue with employees
Among the numerous stakeholders with which TOTAL maintains
regular dialogue (refer also to point 5.3.1 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), the Group companies strive 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. Consequently, several thousand
employees were consulted about the project to relocate the
registered office to new premises at La Défense (France), following
the presentation of models and 3D simulations of the planned
projects.
Furthermore, at the end of 2017, there were 256 active agreements
signed with employee representatives, of which 160 in France(1).
Percentage of companies
with employee representation
Percentage of employees covered
by collective agreements
WHRS
2017
WHRS
2016
WHRS
2015
78.9% 78.5% 76.9%
73.1%
68.9% 65.5%
In December 2017, TOTAL joined the worldwide Global Deal initiative,
a multi-stakeholder partnership that aims to incite governments,
companies, unions and other organizations to make concrete
commitments to favoring dialogue with employees. Social dialogue
includes all types of negotiations, consultations or exchanges of
information between the representatives of governments, employers
and workers on questions pertaining to economic and social policy
that are of a common interest. The Global Deal promotes the idea
that effective social dialogue can contribute to decent work and
quality jobs and, as a consequence, to more equality and inclusive
growth from which workers, companies and societies benefit.
Sickness absenteeism rate
2.4%
2.4%
2.1%
federation,
IndustriALL Global Union, which
(CSR) standards and guarantees worldwide
In 2015, TOTAL signed a global agreement with the worldwide trade
represents
union
50 million employees in 140 countries. Under this agreement, the
Group made a commitment to maintain minimum Corporate Social
Responsibility
for
subsidiaries in which it has more than a 50% stake (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
this
service providers and suppliers. The
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 July 2017 to assess the implementation of the
agreement and identify certain areas of improvement and actions to
be taken.
implementation of
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 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. A new agreement was reached in
July 2017 that contains some innovative measures allowing for better
dialogue with the members of the European Committee (field safety
visits and learning expeditions to discuss the Group’s strategy directly
on site).
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 2017 among 70,000 employees in 124 countries
demonstrated that employees have a commitment rate of 78% and
that 85% of them are proud to work for TOTAL.
(1)
Some agreements cover several companies at once (for example, agreements in the Social and Economic Units -Unités Économiques et Sociales- or
agreements in group of companies).
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5.1.4
Training
The Group’s actions in the field of training address five major issues:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
sharing TOTAL’s corporate values, particularly with respect to
HSE, ethics, leadership, innovation and digital technology;
supporting the development of existing activities and creating new
ones in order to achieve the Group’s ambitions over the next
20 years;
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 remain significant in 2017, with 77% of
employees having taken at least one training course during the year.
Within the WHRS scope, 243,019 days of training were offered
on-site, compared to 274,858 days in 2016, for a total training
budget starting to be stabilized of approximately €167 million,
compared to €164 million in 2016 and €170 million in 2015.
The increase in e-learning programs within the Group that
began in 2015 aims to improve the effectiveness of the courses
and impact the largest number of people as quickly as possible.
Average number of training days/year per employee(a)
(excluding “Companion” apprenticeships and e-learning)
It was accompanied by the launch in 2016 of a digital passport
program to support the Group’s goals in this area. Nearly
26,000 people have already obtained the passport. The aim of
this digital path is to educate employees of the Group about the
digitalization of technologies in the world.
Approximately 28,747 people received remote training in 2017,
compared to 42,142 in 2016 and 42,000 in 2015. This decrease was
due to several mandatory remote learning campaigns having been
launched in the past several years and it was not necessary to renew
them in 2017.
In addition, TOTAL restructured the organization of its support
fonctions at the Group level by creating TGS (Total Global Services)
on January 1, 2017 with a dedicated affiliate for learning, Total
Learning Solutions, the mission of which is to ensure engineering
training (on Business, Industry, Management and Transversal) and to
put it in place. As a Shared Services Center, the volume managed
would finally allow the deployment of high quality learning programs
with a more competitive global cost.
To be noted: 2017 WHRS training scope is slightly inferior compared
to previous years to explain some variations. In 2017, the results of
127 companies were introduced representing a total headcount of
81,001 employees, as against 135 companies representing total
headcount of 86,515 employees in 2016.
WHRS 2017
WHRS 2016
WHRS 2015
5
GROUP AVERAGE
By segment
Exploration & Production segment
Gas, Renewables & Power segment
Refining & Chemicals segment
Refining & Chemicals
Trading & Shipping
Marketing & Services segment
Corporate
By area
Africa
North America
Latin America
Asia-Pacific
Europe
Middle East
Oceania
French overseas departments and territories
Breakdown by type of training given
Technical
Health, Safety, Environment, Quality (HSEQ)
Language
Other (management, personal development, intercultural, etc.)
(a)
This number is calculated using the number of training hours, where 7.6 hours equal one day.
3.0
5.3
1.8
2.5
2.5
2.0
2.9
2.0
4.9
3.0
2.7
3.7
2.6
5.6
0.4
2.7
36%
28%
7%
28%
3.2
6.2
1.9
2.7
2.7
1.7
2.5
2.6
5.2
3.0
2.8
3.6
2.8
4.8
0.4
1.7
38%
23%
8%
31%
3.3
6.4
3.8
2.2
2.3
1.4
2.4
2.5
5.5
1.1
3.7
4.9
2.7
2.9
0.7
3.2
37%
22%
11%
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5.1.5
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 creating a suitable work environment to
fully benefit from skills and diverse approaches. This commitment is
supported at the highest level to ensure that all employees,
regardless of their gender or nationality, are offered the same career
opportunities.
5.1.5.1
Equal treatment for women and men
Equal treatment for men and women is promoted in the Group
through a global policy of gender diversity, ambitious goals set by
General Management, a demanding HR process that takes the issue
of gender into consideration, agreements in favor of a balance
between work and private life (such as the agreement on teleworking
in France) and awareness-raising and training actions.
TOTAL’s commitment stretches from recruitment to the end of a
career. It guarantees equal treatment for women and men in the
process to identify high-potential employees and to appoint executive
officers. In terms of compensation, specific measures have been in
place since 2010 to prevent and correct unjustified salary gaps.
The Group’s target for 2020 is:
(cid:142)
(cid:142)
(cid:142)
women represent 25% of senior executives (having represented
approximately 5% in 2004 and 21.1% in 2017);
non-French nationals represent 40% of senior executives (having
represented approximately 19% in 2004 and 28.9% in 2017); and
women represent more than 20% of Management Committee
members (head office and subsidiaries) (having represented 21% in
2017).
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 opportunities and the
treatment of women and men is regularly embodied in agreements,
such as the global agreement signed in 2015 with IndustriALL, or the
Global Deal to which TOTAL has adhered more recently in 2017.
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
responsibilities;
recruitment, retention and promotion policy; inclusive corporate
culture; and work environment and work-life balance.
(STEM); clear
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 objective of promoting the development of women in
the Group, in particular towards management positions, the TWICE
network (Total Women’s Initiative for Communication and Exchange)
aims to help women to further their careers. Created in 2006, it is
currently in place in France and abroad (20 local networks) and has
over 3,000 members. Since 2010, almost 550 women have benefited
from the network’s mentoring program, in France and internationally,
which helps them to better negotiate the key phases of their careers.
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 2017, women
accounted for 45.5%(1) of TOTAL S.A.’s Board members (above the
40% required by Article L. 225-18-1 of the French Commercial Code
and applicable since 2017) compared to 54.5% at the end of 2016
and 36.4% at the end of 2015.
% of women
Open-ended contract recruitment
Managers (JL ≥10)(a) recruitment
Employees
Managers (JL ≥10)(a)
Senior executives
2017
2016
2015
38.6% 36.9% 34.9%
31.9% 29.7% 30.6%
33.3% 32.4% 32.0%
26.3% 25.5% 25.1%
21.1% 19.9% 18.6%
(a)
Job Level of the position according to the Hay method. JL10 corresponds to
junior manager (cadre débutant) (≥300 Hay points).
(1)
Excluding the director representing employees, in accordance with Article L. 225-27-1 of the French Commercial Code.
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Internationalization of management
5.1.5.2
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 2017, 90.3% of employees hired by the
Group and 68.0% of managers hired were non-French nationals.
The Group has set a target of having local managers representing
50% to 75% of the subsidiaries’ Management Committee members
by 2020 (having represented 54% in 2017 like in 2016).
in place to
Several measures have been put
internationalize
management, including training courses to internationalize careers,
increasing the number of foreign postings for employees of all
nationalities (nearly 4,073 employees of 108 nationalities are posted
in 112 countries as of June 30, 2017), and integration and personal
development training organized by large regional hubs (for example,
Houston, Johannesburg and Singapore).
% of employees of non-French
nationality
Open-ended contract recruitment
Managers (JL ≥10) recruitment(a)
Employees
Managers (JL ≥10)(a)
Senior executives
2017
2016
2015
90.3% 93.4% 93.5%
68.0% 75.3% 76.3%
68.2% 69.0% 68.8%
58.1% 58.8% 60.9%
28.9% 28.2% 27.9%
(a)
Job Level of the position according to the Hay method. JL10 corresponds to
junior manager (cadre débutant) (≥300 Hay points).
5.1.5.3
Measures promoting the
employment and integration
of people with disabilities
to promote
For over 20 years, TOTAL has expressly set out its disability policy in
France through successive agreements signed with employee
representatives
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 5.16% in 2016(1)
(compared to 4.99% in 2015 and 4.74% in 2014).
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:
(cid:142)
(cid:142)
integration, professional training, support and
internally:
job
retention, communication, awareness actions and sessions
organized for managers and all the teams, Human Resources
managers;
externally:
information and advertising aimed at students,
cooperation with recruitment agencies, attendance at specialized
forums.
5.1.5.4
Measures promoting
non-discrimination
Large-scale initiatives aimed at raising employees’ awareness of
diversity are organized on a regular basis. After South Africa in 2016
and Berlin in 2015, in 2017, the Group Diversity Council, which is
chaired by a member of the Group’s Executive Committee, met in the
USA with almost 65 senior executives from the American subsidiaries
in an “Understand-Engage-Act” seminar to encourage them to
pursue their actions in the areas of diversity and inclusion. The theme
of the 2017 World Diversity Day, which takes place every two years,
was “Let’s Show Respect for Each Other”. Workshops were
organized on the themes of feminization, the internationalization of
management and religion in the workplace.
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.
In 2014, the Group also signed the LGBT (lesbian, gay, bisexual and
transgender) Charter. Prepared by the “L’Autre Cercle” association, it
establishes a framework for combating discrimination related to
sexual orientation or identity in the workplace in France.
TOTAL has written a practical guide to religion in the Group to offer
concrete answers to employees’ questions about religion in the
workplace and to promote tolerance of everyone’s beliefs, while
respecting differences at the same time. The guide, which was
posted on the Group’s intranet site in March 2017, offers the keys to
understanding different beliefs, so
that everyone can better
comprehend them in their everyday activities.
5
(1)
The rate for 2017 is not available at the date of publication of this Registration Document.
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Safety, health and environment information
5.2
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
the Group’s management systems. Group
common framework of
directives define the minimum requirements expected in the areas of
safety, security, industrial health and hygiene, the environment, quality
the segments, which
implemented
and societal. They are
in
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 accessible to all employees. 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.
5.2.1
Occupational health and safety
For many years, the Group has been developing a normative
framework relating to safety, security, industrial health and hygiene,
the environment and societal, as well as the corresponding
management systems in these areas (Management and Expectations
Standards Toward Robust Operations, 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.
For more than 10 years, the TRIR and the LTIR have declined
continuously. Those 2017 safety performances are relatively stable
compared to 2016. The deployment of a series of measures intended
to strengthen the Group’s safety culture in 2015 has helped to
improve the safety of employees working for external contractors.
Despite these measures, in 2017 an accident during maintenance
operations in the Republic of the Congo resulted in the death of an
employee working for a contractor.
Safety is the subject of regular training activities, in particular at
management level (refer to point 5.2.2.1 of this chapter). Since 2011,
the Group has implemented a policy to recognize HSE performance,
in particular by including safety-related criteria in the determination of
compensation (see point 5.1.1.3 of this chapter).
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 more than 60% 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. The golden rules have been reformulated in the form
of do's and don'ts to improve their adoption and facilitate the
monitoring of their application. This new presentation was revealed in
April 2017, on the occasion of the World Day for Safety and Health at
Work. Furthermore, in 2016, the HSE organization created a
department including the leading authorities on high-risk operations
(work at height, lifting, high-pressure cleaning, excavations, etc.) in
order
relations with
contractors.
in-house know-how and
to consolidate
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 Group-wide consistency, while at the
same time respecting the businesses’ specific characteristics.
Starting in 2018, a MAESTRO HSE reference framework common to
all branches of activity will gradually be deployed.
TOTAL’s HSE division conducts MAESTRO audits of all operated
sites every four years.
The Group’s safety efforts are focused on preventing occupational
and transport accidents, and on preventing major accidents and
accidental spills (refer to point 5.2.2.2 of this chapter and to point 3.3
of chapter 3). They cover both employees of Group companies and
employees of external contractors(1), whose safety indicators are
monitored with the same vigilance.
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
2017
2016
2015
TRIR(a): number of recorded injuries
per million hours worked
Group company employees
Employees of external
contractors(b)
LTIR(c): number of lost time injuries
per million hours worked
SIR(d): average number of days lost
per lost time injury
0.88
0.89
0.91
0.83
1.17
0.92
0.88
0.99
1.38
0.58
0.51
0.66
27.57(e)
30.23
30.11
Number of occupational fatalities
1
1
9
(a)
(b)
(c)
(d)
(e)
TRIR: Total Recordable Injury Rate.
As defined in point 5.4.4.1 of this chapter.
LTIR: Lost Time Injury Rate.
SIR: Severity Injury Rate.
Excluding Saft Groupe.
(1)
As defined in point 5.4.4.1 of this chapter.
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One of the 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. The program of regular meetings with
the management of external companies, launched in 2016, continued
in 2017. In October 2017, the TOTAL Suppliers Day, aimed at the
Group’s strategic suppliers, was attended by 110 companies, with a
view to sharing common policies and rules on ethics, health, safety,
human rights and environmental protection. The event was an
opportunity to reward three companies for the excellence of their
work and the quality of their relations with the Group entities in the
safety,
innovation-digital technology and operational excellence
categories.
Moreover, the reporting of anomalies (about 800,000 per year) and
near misses on a daily basis is strongly encouraged and permanently
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. Consequently, a near
miss with a high severity potential is treated as a serious accident,
and its analysis is considered as an essential factor of progress.
Depending on its relevance to the other Group entities, it triggers a
safety alert and the distribution of a feedback form, depending on the
circumstances.
With respect to transport safety, the Group continues to strive to
improve its performance in terms of road accidents. The actions
taken in recent years more than halved the rate of severe accidents
between 2013 and 2017. At Marketing & Services, the program of
transporters inspections is being deployed in Africa, Asia-Pacific &
the Middle East and the Americas, and should be gradually extended
to the East European countries in 2018. The inspection protocol has
also been adapted and tested in four European countries in the Gas,
Renewables & Power segment, so that it can be used in OECD-zone
countries, where it will be deployed, starting in 2018.
Following the signing of the national call in favor of road safety at
work in France in October 2016, the Group deployed the SafeDriver
campaign to raise awareness of risks on the road and to remind
drivers of the basic rules of driving and the importance of obeying
them. This campaign is broken down into six themes and addresses
all TOTAL and contractor employees who use a vehicle for
professional purposes.
As part of the Oil Companies International Marine Forum’s (OCIMF)(1)
Marine Terminal Information System (MTIS), the Group launched an
initiative to systematically record the physical characteristics of the
terminals operated by Group entities. This will make it easier to
assess the compatibility of ships with the Group’s terminals.
Elsewhere, TOTAL has decided to adopt the Marine Terminal
Management Self Assessment (MTMSA), recommended by the
industry, as a framework of reference for the self-assessment of
SOCIAL, ENVIRONMENTAL AND SOCIETAL INFORMATION
Safety, health and environment information
terminals, as part of its drive to improve the safety of product
transfers at interfaces.
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)
Percentage of employees benefiting
from regular medical monitoring
Number of occupational illnesses
recorded in the year (in accordance
with local regulations)(a)
2017
2016
2015
98.0% 99.3% 99.3%
143
108
145
(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.
5
the Group’s
Reporting on occupational
personnel (WHRS scope) and illnesses reported according to the
regulations applicable in the country of operation of each entity.
illnesses covers only
Musculoskeletal disorders, the main cause of occupational illnesses,
represented 68% of all recorded illnesses in 2017, slightly up on
2016.
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 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.
(1)
An industry forum including the leading worldwide oil companies.
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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 result should be published
shortly, following further analysis of the data obtained 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).
5.2.2
Environmental protection
5.2.2.1
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:
(cid:142)
(cid:142)
(cid:142)
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 of which they are in charge; and
promoting the internal standards to be applied by the Group’s
operational entities as set out in the Safety Health Environment
Quality Charter.
TOTAL has a goal of progressively lowering the carbon intensity of its
energy mix.
The Group’s environmental targets for 2010-2020 are as
follows:
(cid:142)
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;
(cid:142)
(cid:142)
decrease SO2 air emissions by 50%;
maintain hydrocarbon content of water discharges below
30 mg/l for offshore sites and below 15 mg/l for onshore
and coastal sites.
Moreover, the Group has committed to:
What we have accomplished:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
87% of routine flaring reduction between 2010 and 2017;
Improvement by 14% of the energy efficiency of the Group’s
facilities between 2010 and 2017;
More than 50% of reduction of SO2 emissions since 2016;
More than 100% of the Group’oil sites met the target for the
quality of offshore and onshore discharges since 2016.
The environmental management systems on TOTAL’s major sites are
ISO 14001 certified: 100% of the 67 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 2017, 252 sites had ISO 14001 certification. The
Laggan Tormore (United Kingdom) and Incahuasi (Bolivia) sites were
ISO 14001 certified in 2017. Group rules require certification to be
obtained within two years of start-up of operations; accordingly, the
Moho Nord (Republic of the Congo) and Barnett (USA) are expected
to be certified in 2018 or 2019.
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 3.3.3.1 of chapter 3).
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
intranet,
posters) and provides annual
the Group’s
environmental performance.
in-house magazines,
information about
(e.g.,
(cid:142)
(cid:142)
systematically
developing
for production sites located in protected areas (2);
biodiversity
action
plans
refrain from conducting 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 the Arctic.
(1)
(2)
(3)
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.
Sites located in an IUCN I to IV or Ramsar convention protected area.
Natural sites included on the UNESCO World Heritage List of June 4, 2013.
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Training courses are organized for managers and senior executives.
Three HSE training courses are made available to the operational
entities:
an operational entity (one session was held in 2017 with 20
participants). This offer completes an existing course for the same
target population provided by the Group’s business segments; and
(cid:142)
(cid:142)
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 2017 with 229 participants);
(cid:142)
for Group Senior Executives
HSE Leadership
focusing on
management styles has been organized since 2012 (two sessions
were held in 2017 with 30 participants). Since 2012, close to 300
senior executives have taken part in this program.
HSE Implementation are aimed at employees whose job is
specifically to handle one or more HSE or operational areas within
5.2.2.2
Incident risk
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 in all segments 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 202 sites and operating
zones exposed to major risks corresponding to:
(cid:142)
(cid:142)
all the offshore and onshore operating activities in Exploration &
Production; and
the Seveso classified industrial sites (upper and lower threshold)
and their equivalents outside the EU (excluding Exploration &
Production).
This approach first sets out an analysis of the risks related to the
Group’s 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:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
staff training and raising awareness;
a coherent event reporting and indicators system;
systematic, structured event analysis, particularly to learn lessons
in terms of design and operation;
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 2016. In addition to the 103 Tier 1
and Tier 2 operational events indicated in the table below, the Group
recorded two Tier 1 events and one Tier 2 event due to sabotage or
theft in 2017.
Loss of primary containment(a)
2017
2016
2015
Loss of primary containment (Tier 1)
Loss of primary containment (Tier 2)
28
75
38
101
51
111
5
Loss of primary containment (Tier 1
and 2)
(a)
Excluding acts of sabotage and theft.
103
139
162
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
the Group Performance Management
Committee. All spills are followed by corrective actions aimed at
returning the environment to its original state as quickly as possible.
to
Accidental hydrocarbon spills(a)
2017(b)
2016
Number of hydrocarbon spills
Total volume of hydrocarbon spills
(thousands of m3)
60
0.5
73
0.9
2015
128
1.4
(a)
(b)
Accidental spills with an environmental impact and of more than one barrel.
In 2017, the indicator perimeter was reviewed to exclude spills due to
sabotage done by a third party.
In addition, the Group has set up a crisis management process with a
dedicated organization (also refer to point 3.3.3.1 of chapter 3) 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.
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Oil spill preparedness
2017
2016
2015
Number of sites whose risk analysis
identified at least one risk of major
accidental pollution to surface water
Proportion of those sites with an
operational oil spill contingency plan
Proportion of those sites that have
performed at least one oil spill
response exercise during the year
124
141
167
92%(a)
99%
98%
95%
89%(b)
98%
(a)
(b)
Decrease in 2017 compared to 2016 corresponds mainly to an affiliate whose
global plan is currently being revised to intégrate an asset in production since
2017.
Decrease in 2016 compared to 2015 corresponds mainly to three affiliates
which postponed their exercises to 2017.
In the event of accidental pollution, the Group companies can call on
in-house human and material resources (Fast Oil Spill Team, FOST)
and benefit from assistance agreements with the main third-party
organizations specialized in the management of hydrocarbon spills.
Subsea capping and subsea containment equipment has been
installed at different points of the world (South Africa, Brazil, Norway
5.2.2.3
Environmental footprint
and Singapore) 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. Since 2015, equipment has been installed in Angola, then
the Republic of the Congo, 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 OCIMF
recommendations. This organization manages the Ship Inspection
Report (SIRE) Program, and promotes best practices in oil shipping.
TOTAL charters vessels at the highest international standards for
shipping hydrocarbons and the average of the fleet of TOTAL’s
Shipping division is approximately seven years.
Similarly, internal rules define the centralized process for the selection
of inlnad waterway barges. This process is also based on the OCIMF
Barge Inspection Questionnaire, an integral part of the SIRE, and on
the European Barge Inspection Scheme in Europe.
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 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.).
Chronic emissions into the
atmosphere
(excluding GHG)
SO2 emissions (kt)
NOx emissions (kt)
2017
2016
2015
44
68
49
75
59
82
In 2010, SO2 emissions totaled 99 kt, and the target for 2020 is to
remain below 49.5 kt, a level reached in 2016. The improvment in
2017 in linked to the shutdown of la Mède refinery (France).
Discharged water quality
2017
2016
2015
Hydrocarbon content of offshore
water discharges (in mg/l)
% of sites that meet the target for the
quality of offshore discharges
(30 mg/l)
Hydrocarbon content of onshore
water discharges (in mg/l)
% of sites that meet the target for the
quality of onshore discharges
(15 mg/l)
17,7
17.2
19.4
100%(a)
100%(a)
100%(a)
2.4
3.2
3.7
100%
100%
97%
(a)
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 2017
is linked to a continous improvment of discharges quality at Djeno
Terminal (Republic of the Congo) and Tunu site (Indonesia).
Soil
The risks of soil pollution related to TOTAL’s operations come mainly
from accidental spills (refer to point 5.2.2.2 of this chapter) and waste
storage (refer to point 5.2.2.4 of this chapter).
The Group’s approach to preventing and controlling these types of
pollution is based on four cornerstones:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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;
controlling pollution
containment and reduction or elimination operations.
from previous activities by means of
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In addition, a Group directive defines the following minimum
requirements:
(cid:142)
(cid:142)
(cid:142)
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
the World Health
recommended by
acceptability criteria
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;
5.2.2.4
Circular economy
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. In 2017, TOTAL developed and
patented a soil depollution technology, using only solar energy from
SunPower photovoltaic panels, that is mobile and can be remotely
controlled. The Group’s provisions
the
environment and site remediation are detailed in Note 12 to the
Consolidated Financial Statements (point 8.7 of chapter 8).
the protection of
for
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 can be put in place (sound level measurements
at the site perimeter or networks of “noses” to determine the origin
and intensity of odors, like around the Donges platform in France). 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.
5
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).
Waste prevention and management
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.
The Group’s companies are also focused on controlling the waste
produced at every stage in their operations. This approach 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.
On its sites, TOTAL deploys programs to valorize (recycling and
valorization) more than half of the Group’s waste. 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, representing 178 kt in
2017, compared to 187 kt in 2016 and 202 kt in 2015.
Waste treatment processes
Recycling and/or valorization
Landfill
Others
(incineration, biotreatment, etc.)
2017
52%
24%
2016
58%
18%
2015
55%
14%
25%
24%
31%
The evolution of the valorization rate is due to the excavation of
97.5 kt of unpolluted soil as part of the Port Arthur ethane cracker
project. These exceptional non-hazardous wastes have been used as
a cover for a waste storage facility and are considered by regulation
to not be valorized.
By way of example, in 2017, the Normandy platform in France
launched a program to recover the sludge from water decarbonation
in the form of liming materials for acid soil. The Antwerp platform in
Belgium launched a project to recover gases from refining, previously
used as fuel, as raw materials for the petrochemical units.
In 2017, all the Refining & Chemicals segment’s plastic production
sites worldwide also joined the CleanSweep® program, which aims
to achieve zero loss of plastic pellets in handling operations. Clean
Sweep® (OCS) is an international program that aims to avoid losses
of plastic pellets during handling operations by the players in the
plastics industry, so that they are not disseminated into the aquatic
environment.
The Group is also contributing to the circular economy through its
involvement in the development of channels for the recycling of used
oil and photovoltaic panels. TOTAL has developed processes that
allow up to 50% of recycled plastics (polyethylene and polystyrene) to
be incorporated in the production of plastics. In 2017, TOTAL
received Plastics Europe’s award for “Innovative materials” for the
production of bottles made from recycled polyethylene.
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Safety, health and environment information
Sustainable use of resources
Fresh water
The nature of the Group’s activities, and mainly those of Refining &
Chemicals, and to a lesser extent those of the Exploration &
Production, Gas, Renewables & Power segments, 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:
(cid:142)
(cid:142)
in the Safety Health Environment Quality Charter, which states that
“TOTAL controls its use of natural resources, etc.”, 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,
its stakeholders,
partnerships and R&D.
through
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.
The sites operated by the Group are not particularly exposed to
hydric risk. 25 sites were affected at the end of 2017, the level of
water risk was assessed on 17 priority Group sites (11 Refining &
Chemicals, 4 Exploration & Production, 2 Gas, Renewables &
Power). These assessments will gradually be extended to include
other current high priority sites, of which 8 have been identified.
Depending on the nature of the hydric risks and their impacts, a plan
to optimize the use of water resources or of specific water-related
actions may be drawn up.
In 2017, approximately 80% of the fresh water withdrawals were
taken from the Refining & Chemicals segment. 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.
Elsewhere, 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 specifications in force in the Group stipulate
that this option be prioritized over other methods.
The water used on sites producing photovoltaic panels must be very
pure. These sites consume a lot of fresh water, which is the reason
why they were included in the Group’s LWT initiative in 2017. In
2018, the reuse of water will be investigated on one of these sites.
The Group R&D program for water management is looking into the
various aspects of the protection and recovery of water resources. By
way of example, studies were made of the reuse of water on the
Gonfreville petrochemicals site as part of the E4Water program using
the water re-use tool developed by TOTAL’s R&D department. This
tool uses the life cycle analysis to define a reuse for water that entails
the best forms of recovery, from the societal, economic and technical
perspectives. Finally, the development of technical solutions well
adapted to the challenges, such as the recently patented BIOMEM
process, significantly improve the performance of the biological
treatments used, especially on production water.
The Group works with a number of professional organizations, such
as the IPIECA, the CONCAWE(1) and the EpE(2), and, more locally,
with the GIZ(3) in Uganda, on a water resource sanitary with local
communities. The Group’s indicators relating to water generally follow
the IPIECA framework. The main indicator is aggregate withdrawals.
Water-related indicator
2017
2016
2015
Fresh water withdrawals excluding
cooling water
(million m3)
113
120
118
The decrease in water withdrawals between 2016 and 2017 is mainly
due to the shutdown of la Mède refinery (France) et a major
turnaround at Carville petrochemical site (USA).
Soil
TOTAL uses the ground surface that it needs to safely conduct its
industrial operations and, in 2017, did 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 biorefinery,
which is due to start up in mid-2018.
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: gas
flaring (point 5.2.3.4 of this chapter); cold venting (point 5.2.3.4 of this
chapter); hydrocarbons discharged in low quantities through aqueous
effluents, which amounted to 625 t in 2017; and accidental oil spills
(point 5.2.2.2 of this chapter). These raw material losses remain
negligible with respect to the Group’s production in 2017.
(1)
(2)
(3)
Environmental Science for the European Refining Industry.
Entreprises pour l’environnement.
Gesellschaft für industrielle Zusammenarbeit.
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Safety, health and environment information
5.2.2.5
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 conducts sensitivity and impact analyses for the development
of all its projects. A biodiversity action plan is developed for operated
production sites located in the most sensitive protected areas,
corresponding to the UICN I to IV or Ramsar categories.
TOTAL is aware of these challenges and takes biodiversity and
ecosystems into account in its guidelines and operations:
(cid:142)
(cid:142)
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;
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
its environmental
management systems and refers to good practices within the
industry,
risk management
into
4. report: TOTAL reports to its stakeholders on its biodiversity
performance,
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 and professional
associations.
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. 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 the
Arctic.
5
The biodiversity action plan developed in 2015 for Djeno in the
Republic of the Congo is currently being deployed. A second plan
had been developed on the Atora site in Gabon, which was sold in
2017. Other plans will be developed in the short term, in particular in
Italy (the Tempa Rossa project), or in the medium term, in Uganda
(the Tilenga project), in Tanzania (the EACOP project) and in Papua
New Guinea (the PAPUA LNG project).
In addition to applying the general principles of the Group’s
biodiversity policy, TOTAL has agreed to meet the performance
standards of the International Finance Corporation (IFC, World Bank)
for its Tilenga, Papua LNG and EACOP projects, in order to take the
particularly sensitive biodiversity of certain sites into consideration. In
this respect, TOTAL can set itself a target of a net gain in biodiversity
due to the possible impacts of these projects on critical habitats, by
adopting
the “Avoid-Mitigate-Compensate” approach, and by
in
avoiding wherever possible. Teams manned by specialists
biodiversity and ecosystem services have been formed to focus on
societal matters and the environment. For the most sensitive projects,
like the one in Uganda, for example, “Biodiversity and means of
subsistence” committees have been set up with external
stakeholders from national and international organizations, who are
specialized in the protection of nature and relations between
communities and the wild fauna. These committees are tasked with
ensuring that best practices are properly implemented by TOTAL in
its operations, so that it achieves its targets of net gains in
biodiversity, which are currently one of the best biodiversity
management practices.
Program’s World
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 Nations
Environment
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).
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5.2.3
Climate change
The Group’s strategy incorporates the challenges of climate change
and adopts the International Energy Agency’s (IEA) Sustainable
Development Scenario (2°), which is compatible with limiting global
warming to 2°C, as its reference framework. 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:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
developing natural gas as the primary energy source due to its
lower carbon intensity among fossil energies;
given the carbon budget allocated in a 2°C scenario, 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 innovative solar energy
solutions;
stimulating initiatives in the oil and gas sector and supporting the
implementation of an international framework on climate.
The role of gas
5.2.3.1
The percentage of natural gas in the Group’s production rose from
approximately 35% in 2005 to nearly 48% in 2017, and, taking
account of market developments in particular, this percentage is
expected to increase over the coming years.
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(1)
supplier of natural gas, green power and energy services (e.g.,
insulation, boiler maintenance, wood and pellets for heating, smart
thermostats, etc.) in the Belgian market and is starting to extend its
business in France. In October 2017, TOTAL also launched its new
Total Spring natural gas and green electricity offer for private
individuals in France. This offer aims to quickly win over three million
customers.
In November 2017, the Group signed an agreement with Engie
relating to the planned acquisition of its portfolio of upstream liquefied
natural gas (LNG) assets. This portfolio includes stakes in liquefaction
plants, and in particular an interest in the Cameron LNG project in the
United States, long-term LNG sale and purchase agreements, a fleet
of LNG tankers and access rights to regasification terminals in
Europe. The acquisition of Engie’s upstream LNG business offered
TOTAL an opportunity to speed up its integrated gas chain strategy.
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 strictly reduce the
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 UN
Environment and the non-profit organization Environmental Defense
Fund. The Group also took several actions as part of the Oil & Gas
Climate Initiative (refer to point 5.2.3.6 of this chapter) and signed the
guiding principles on the reduction of methane emissions by the gas
value chain(3).
Project selection
5.2.3.2
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.
to climate change
Furthermore, the Group ensures sustainability of its projects and
long-term strategy relative
the
incorporation 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.
issues by
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.
(1)
(2)
(3)
Company data.
Source: IEA.
Signatory companies: BP, Statoil, Eni, Shell, ExxonMobil, TOTAL, Repsol, Wintershall.
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Developing renewable energies
5.2.3.3
For some 15 years, TOTAL has been committed to developing
renewable energies.
Solar power is the Group’s preferred area of development. These
activities are owned by the Gas, Renewables & Power segment and
are presented in point 2.2 of chapter 2.
This segment is also present in energy storage through its Saft
Groupe subsidiary, specialized in high-technology batteries, which
are essential to the development of intermittent renewables.
In parallel, in November 2016, the Marketing & Services segment
launched a five-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),
for
chemicals (solvents or polymers). These activities are owned by the
Refining & Chemicals segment and are presented in point 2.3.1 of
chapter 2.
lubricants and base molecules
5.2.3.4
Energy efficiency and
ecoperformance
In its scope of activities, TOTAL has made reducing GHG emissions
one of its priorities. Since 2010, the Group has reduced the GHG
emissions produced by its operated activities by 30%. This reduction
entails reducing associated gas
improving energy
efficiency.
flaring and
GHG emissions
(in Mt CO2 eq)(a)
Scope 1: Operated direct GHG
emissions (100% of emissions from
sites operated by the Group)
Scope 1: Group share of direct GHG
emissions
Scope 2: Indirect emissions
attributable to energy consumption
by sites
Scope 3: Other indirect emissions
Use by customers of products sold
for end use
2017
2016
2015
36
50
39
51
42
50
4
4
4
400
420
410
(a)
For further information on the methods involved for these indicators, refer to
point 5.4.4.2 of this chapter.
Reducing flaring
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.
SOCIAL, ENVIRONMENTAL AND SOCIETAL INFORMATION
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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. This objective is reached in 2017.
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
2017
2016
2015
Global volumes of flared gas flared
(in Mm3/d)
Including routine flaring (in Mm3/d)
5.4
1.0
7.1
1.7(a)
7.2
2.3(b)
(a)
(b)
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.
Volumes estimated based on available historical data.
The decrease of the global flaring is mainly due to a significant
improve in West of Africa, particularly in Angola, where compression
upsets have been solved.
Improving the energy efficiency of the Group’s
facilities
One of the Group’s performance targets is to better control energy
consumption. 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 2017, 100% of the concerned
sites reported compliance or had 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
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.
(GEEI) to assess
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
2017 2016 2015
Net primary energy consumption (TWh)
137
146
153
Group Energy Efficiency Index GEEI (base
100 in 2010)
85.7 91.0 90.8
The achievement of this objective in 2017 is mainly due to the
significative decrease of the global gas flaring in 2017.
5
is
the Group
In addition to the mandatory audits conducted in Europe as per
the European Energy Efficiency Directive
transposition of
2012/27/EU,
implementing energy management
systems based on ISO 50001. The Leuna refinery and the bitumen
plant in Brunsbüttel (Germany) have been certified for several years,
and the French refining and petrochemicals plants have been
ISO 50001 certified since 2017. The Zeeland
(the
Netherlands), in which TOTAL holds a 55% stake, was also certified
in 2017. In the Marketing & Services segment, the industrial site in
Brunsbüttel (Germany) and the lubricants blending plant in Dubai
(United Arab Emirates) have been ISO 50001 certified for several
years. The blending plant at Ertvelde (Belgium) was audited at the
end of 2017 with a view to obtaining ISO 50001 certification. In
France, the scope of Total Marketing France’s ISO 50001 certification
covers 179 stations, 7 oil depots and 2 office buildings housing the
management of the Nantes and Lyon regions.
refinery
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In the coming years, the certification process will be deployed more
broadly in Europe in a more global manner. 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.
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. In 2017, the Group also acquired Greenflex, in a
move to speed up the development of its offer on the energy
efficiency market.
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 2017, 93 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, the TOTAL Quartz Fuel
Economy lubricant, and the Azalt® ECO2 and Styrelf® ECO2 bitumen
ranges. Others, such as the new BioLife range of special fluids
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 1.85 Mt CO2 eq in 2017.
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
this offer was launched, the Group has helped about 2,600 energy
renovation operations.
In November 2017, TOTAL signed an agreement with the Fondation
GoodPlanet,
the
implementation of a program to neutralize the carbon emissions from
air travel by Group employees, over a 10-year period. This project will
chaired by Yann Arthus-Bertrand,
for
(1)
Source: IPCC and IEA.
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REGISTRATION DOCUMENT 2017
avoid 50,000 t of CO2 emissions into the atmosphere per year. It will
entail the creation and operation of 8,400 biodigesters in India.
Progressing in carbon capture, usage and storage
technologies
The development of carbon capture, utilization 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.
In October 2017, Statoil, Shell and TOTAL entered a partnership
agreement to develop a CO2 storage project on the Norwegian
continental plate. The project is one of the initiatives taken by the
Norwegian authorities to develop Carbon Capture and Storage in
Norway on an industrial scale.
Access to energy
5.2.3.5
Since 2010, almost 50 Group subsidiaries have been part of the
“Total Access to Energy” program, a source of initiatives for
identifying and testing solutions that facilitate access to energy for the
poorest populations.
The World Bank estimate for the number of people without access to
electricity has exceeded 1 billion. In 2011, as part of its access to
energy program, TOTAL
launched a commercial offer of
decentralized energy solutions for the populations of emerging
countries, mainly in Africa.
First launched in four pilot countries in 2011, TOTAL’s solar solutions
for access to energy were distributed in 45 countries by 2017. By the
end of 2017, 2.3 million lamps and solar kits had been sold,
improving the day-to-day lives of nearly 10 million people. The
distribution channels 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.
is based on
The model
innovative partnerships with various
stakeholders: in 2017, 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 on a continent that is at the core
of TOTAL’s global strategy.
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5.2.3.6
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 is also working with
the World Bank as part of the Carbon Pricing Leadership Coalition
(CPLC). 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. In June 2017, TOTAL also became a
founder member of the Climate Leadership Council, an initiative
launched mainly by businesses, but also by personalities, to
demonstrate the importance of finding solutions to the climate
challenge that will support the economy and protect the environment.
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 2017, this initiative involved 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 announced the creation of
a one-billion-dollar investment fund over 10 years. This OGCI Climate
Investments fund will finance startups and projects demonstrating
high potential in terms of reducing greenhouse gas emissions. In
October 2017, OGCI Climate
first
investments in CCUS and energy efficiency in transport. The OGCI
also announced its ambition to aim for almost zero methane
emissions.
Investments announced
its
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,
thanks to its 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. Lastly, TOTAL offers training and makes
presentations at several universities, thereby taking part in the
debate.
5.2.3.7
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-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 lifespan
of the projects and their capacity to gradually adapt. These internal
studies have not identified any facilities that cannot withstand the
consequences of climate change known today.
5
5.2.4
TCFD (Task Force on Climate-related Financial Disclosures)
In June 2017, the TCFD (Task Force on Climate-related Financial
Disclosures) of the G20’s Financial Stability Board published its final
recommendations on information pertaining to climate to be released
by companies. These recommendations include additional details for
certain sectors, such as energy.
After analyzing the final report, TOTAL publicly announced its support
for the TCFD and its recommendations during the summer of 2017,
while noting that it is up to companies to define the information about
climate-related risks and opportunities that is material, which should,
consequently, be disclosed in financial fillings, and the additional
information that they choose to report on a voluntary basis. TOTAL
also believes that the quantification of impacts of different scenarios
may not be relevant to investors as assumptions made by different
companies may strongly diverge. The Group considers
that
companies have a major role to play in shaping how these issues
evolve and that the modalities of the application of scenarios and the
use of metrics should be further studied.
TOTAL is continuing to dialogue as part of the Oil & Gas Preparer
Forum set up by the TCFD in the autumn of 2017 with a view to
publishing best applicable practices, in particular for the oil and gas
sector. TOTAL also joined the initiative launched by the WBCSD in
December 2017 by signing the “CEO Guide to Climate-related
Financial Disclosures”.
Below, TOTAL gives details of how the Group implements the
TCFD’s recommendations, according to the four pillars, and how it
intends to launch an initiative for continual improvement in this field.
The table in point 5.2.4.5 of this chapter identifies the actions taken
by the Group with regard to all of these recommendations.
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Safety, health and environment information
Governance
5.2.4.1
TOTAL’s strategic approach takes full account of climate-related
issues, which are also taken into consideration in the changes
brought to the organization of the Group. The Group’s ambition to
become the leader in responsible energy is reflected by the
implementation of the One Total project, which gave rise to a new
organization that came into full effect on January 1, 2017, and
includes in particular:
(cid:142)
(cid:142)
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; and
a Strategy-Innovation corporate division, which includes a Strategy
& Climate division tasked with incorporating climate issues into the
Group’s strategy.
Oversight by the Board of Directors
TOTAL’s Board of Directors ensures that climate-related issues are
incorporated into the Group’s strategy. Since 2008, these major
issues for the Group have no longer been treated as one component
of environmental risks, but rather on an independant basis.
Every year, the Board of Directors reviews the main issues related to
climate change in the strategic outlook review of the Group’s
business segments, which are presented by the respective general
management structures.
Also, the Audit Committee does more specific work on the climatic
and environmental reporting processes
the
performance indicators published by TOTAL in its annual reports and
audited by an independent third-party organization.
the review of
in
In 2016, the Compensation Committee also decided to introduce
changes to the variable compensation of the Chairman and Chief
Executive Officer to take better account of the achievement of
Corporate Societal Responsibility (CSR) and HSE targets.
Finally, in September 2017, the Board of Directors decided to change
the regulations of the Strategic Committee in order to broaden its
missions in the realm of CSR and in questions relating to the inclusion
of climate-related issues in the Group’s strategy. This committee is
now called the Strategic & CSR Committee.
The Board of Directors is fully mobilized by this issue in order to
support the development of TOTAL, and it approved the publication
of the first Climate Report in March 2016. This report is updated
every year.
Role of management
TOTAL’s Chairman and Chief Executive Officer deploys the Group’s
climate strategy in keeping with the long-term strategic guidelines
defined by the Board of Directors.
General Management calls on the Senior Vice President Strategy &
Climate, who is the highest-ranking person in the organization with a
day-to-day responsibility for issues related to climate change. In
particular, this includes the development of the climate road map for
the Group, its implementation and the definition of targets to reduce
the carbon footprint. He reports directly to the Senior Vice President
Strategy & Innovation, who sits on TOTAL’s Executive Committee
(refer to the Group organization chart in chapter 1).
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The Executive Committee relies on the work done by the Group Risk
Management Committee to have a map of the climate-related risks to
which the Group is exposed, and to make sure that the risk
management measures in place are efficient.
Moreover, the Risk Committee (CORISK) assesses investment
projects, the risks and the corresponding climate-related issues
(flaring, greenhouse gas emissions, sensitivity to CO2 prices) before
they are presented to the Executive Committee.
Finally, the Senior Vice President Climate chairs the Climate-Energy
steering committee, which includes transverse Holding functions and
representatives of Strategy and HSE management from the various
business segments. The mission of this committee consists of
structuring the Group’s approach to the climate, and in particular of:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
developing and periodically adjusting the Group’s climate-energy
roadmap;
proposing the targets that the Group sets itself (in terms of energy
efficiency, GHG emission reductions, etc.);
keeping a watch of the existing or emerging CO2 markets; and
initiating or driving the technological roadmaps corresponding to
these subjects (energy efficiency, capture and storage of CO2, for
example).
5.2.4.2
Strategy
Identification of climate-related risks
and opportunities
The risks and opportunities related to climate change are analyzed
according to different timescales: short term (until 2020), medium
term (until 2030) and long term (beyond 2030).
As mentioned in point 5.2.4.1 of this chapter, the risks related to
climate change are identified in the analysis of investment projects
and their impact is also examined for the entire Group portfolio.
These risks are presented in detail in point 3.1.2 of chapter 3.
Climate change also provides TOTAL with opportunities:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
in the coming decades, demand for electricity will grow faster than
the global demand for energy, and the contribution of renewables
and gas to the production of electricity is essential to the success
of the 2°C scenario. This represents an opportunity for TOTAL.
Access to energy and decentralized production are part of this
opportunity;
but electricity alone will not be sufficient to meet all the needs, and
in particular those of transport: gas and biofuels are amongst the
solutions that the Group intends to develop;
speeding up the development of CO2 capture, utilization and
storage technologies (CCUS) is a source of opportunities to meet
the needs of various industries (electricity generation, but also
cement works, steel works, waste treatment, etc.); and
helping customers to reduce their energy costs and environmental
impact also offers opportunities, as part of a trend that will be
accelerated by digital technology. TOTAL intends to innovate in
order to provide them with new product and service offers that will
support their energy options and their usages. The promotion of
hybrid solutions combining hydrocarbons and renewables is part of
this approach. Similarly, services can be offered to optimize energy
for industrial sites. The Group aims to develop this approach for
industrial and mobility applications.
SOCIAL, ENVIRONMENTAL AND SOCIETAL INFORMATION
Safety, health and environment information
Impact of climate-related risks and opportunities
Climate-related issues are at the heart of the strategic vision
implemented by the company, on the basis of the International
Energy Agency’s Sustainable Development Scenario (2°C).
Beyond the reorganization of the Group, the impact of the risks and
opportunities related to climate change is reflected in TOTAL’s
climate strategy by the following paths of action:
(cid:142)
1. Improving the carbon intensity of the hydrocarbon production
mix with at least 60% of gas in 20 years:
In parallel to these three paths of action, TOTAL is actively committed
to these issues in international organizations and initiatives, and in
particular the OGCI, which has an ambitious working program for the
years to come. OGCI Climate Investments is a one-billion-dollar fund
set up by the members of the OGCI, who wanted to make a concrete
commitment to the climate together. They represent 20% of
worldwide production of oil and gas and 10% of worldwide energy
to support projects and
production. This
technologies that can significantly cut emissions. Priority will go to the
capture, utilization and storage of CO2, the reduction of methane
emissions and energy efficiency.
fund was set up
–
–
–
–
developing an offensive strategy for gas, while limiting methane
emissions. In 2017, TOTAL has announced the acquisition of
the LNG assets portfolio of Engie,
selecting and developing hydrocarbons projects that are
amongst the most competitive in terms of meeting the highest
safety and environmental standards (reduction of exposure in oil
shale in Canada; no oil exploration activities in oil fields under
sea ice in the Arctic),
progressing in CO2 capture, utilization and storage technologies:
up to 10% of R&D investments dedicated to CCUS and the
work done by
issues, capture
the OGCI
technologies and worldwide storage capacities),
(marketability
supporting the introduction of carbon pricing mechanisms: since
2008, TOTAL has incorporated a long-term CO2 price of $30 to
40/t in the economic assessment of its investments, according
to the crude oil scenario, or the applicable price, if higher in a
given country,
–
halt of coal activities since 2016.
(cid:142)
2. Developing low-carbon activities to supply electricity. TOTAL
intends that the low-carbon activities that contribute in particular to
the production of electricity, will account for almost 20% of its
portfolio in 20 years. This includes the downstream gas-electricity
chain, renewables and energy storage. TOTAL also promotes the
use of biofuels. The objectives are:
–
–
–
–
to continue developing
renewable energies. TOTAL has
developped solar energy since 2011, through SunPower. Since
2016 the acquisition of Lampiris supports the strategy to
develop gas and electricity marketing activities. In 2017, the
entering into of an agreement with EREN Renewable Energy
continues this approach,
developing energy storage activities: the acquisition of Saft
Groupe in 2016 shall enable the integration of activities related
to electricity storage solutions, which are essential to the
development of renewables,
developing bioenergies: TOTAL has been producing bioenergy
for more than 20 years. With the start-up of La Mède, the Group
will have a world-scale biorefinery (500,000 t/year). TOTAL has
also set up a JV with Corbion Plastics (100% biodegradable
polymers from renewable sources),
favoring access to energy: TOTAL has deployed an affordable
solar lamps offer since 2011. The aim of the Group is to provide
access to electricity to 25 million people in Africa by 2020.
(cid:142)
3. Improving energy efficiency:
–
–
continuing the drive to cut greenhouse gas emissions from the
Group’s facilities,
providing responsible energy usage solutions for customers
(acquisition of GreenFlex in 2017).
Resilience of the organization’s strategy
The Group’s strategy incorporates the challenges of climate change,
using as a point of reference the 2°C Sustainable Development
scenario of the IEA and its impact on energy markets.
The Group ensures sustainability of its projects and long-term
strategy relative to climate change issues by the incorporation 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.
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 a negative impact of around
5% on the discounted present value of the Group’s assets (upstream
and downstream)(2). [REDACTED SECTION: CERTAIN TEXT HAS
BEEN REDACTED.]
5
5.2.4.3
Risk management
Processes to identify and assess risks related to
climate change
As described in point 5.2.4.1, the risks related to climate issues
belong to the major risks identified and analyzed by the Group Risk
Management Committee, which assists the Executive Committee.
The Risk Committee (CORISK) also checks the analysis of the various
risks incurred by investment projects before they are submitted to the
Executive Committee, and climate-related risks in particular.
Processes to manage risks related to climate
change
TOTAL’s risk management procedures are described in point 5.3.4 of
chapter 3.
Integration of climate-related risks into global risk
management
The risks related to climate issues are part of the major risks identified
and analyzed by the Group Risk Management Committee, and they
are fully integrated in TOTAL’s global risk management processes.
(1)
(2)
As from 2021 or the current price in a given country.
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.
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5.2.4.4
Metrics and targets
Metrics to measure climate-related risks
and opportunities
TOTAL uses the indicators described in detail in point 5.2.3 of this
chapter to measure its performance in terms of climate change.
GHG emissions and related risks
Scope 1 and 2 GHG emissions, and the most significant items in
Scope 3 of TOTAL’s GHG emissions are addressed in detail in
5.2.4.5
TCFD correspondence table
point 5.2.3 of this chapter. All this data and the related risks are also
reported to the CDP once a year, and TOTAL’s response to the CDP
questionnaire is posted on the Group’s website (total.com).
Targets used to manage climate-related risks
and opportunities
The objectives defined and the indicators used by TOTAL to measure
its performance in terms of climate change are described in detail in
point 5.2.3 of this chapter.
Thematic area
Governance
Disclose the organization’s governance around
climate-related risks and opportunities.
Strategy
Disclose the actual and potential impacts of
climate-related risks and opportunities on the
organization’s businesses, strategy, and
financial planning where such information is
material.
Risk Management
Disclose how the organization identifies,
assesses, and manages climate-related risks.
Metrics & targets
Disclose the metrics and targets used to
assess and manage relevant climate-related
risks and opportunities where such information
is material.
Recommended TCFD disclosures
Source of information in
TOTAL’s reporting
a) Describe the board’s oversight of climate-related risks
and opportunities.
RD 2017 – 5.2.4.1
CC p. 9
b) Describe management’s role in assessing and managing
climate-related risks and opportunities.
RD 2017 – 5.2.4.1
CC pp. 5-8 – CDP p. 3
a) Describe the climate-related risks and opportunities the
organization has identified over the short, medium, and long
term.
RD 2017 – 5.2.4.2
CDP pp. 21-35
b) Describe the impact of climate-related risks and
opportunities on the organization’s businesses, strategy,
and financial planning.
RD 2017 – 5.2.4.2
CDP pp. 8-9
c) Describe the resilience of the organization’s strategy,
taking into consideration different climate-related scenarios,
including a 2°C or lower scenario.
RD 2017 – 5.2.4.2
CC p. 30
a) Describe the organization’s processes for identifying and
assessing climate-related risks.
b) Describe the organization’s processes for managing
climate-related risks.
c) Describe how processes for identifying, assessing, and
managing climate-related risks are integrated into the
organization’s overall risk management.
RD 2017 – 5.2.4.3
CDP pp. 6-9
a) Disclose the metrics used by the organization to assess
climate-related risks and opportunities in line with its
strategy and risk management process.
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3
greenhouse gas (GHG) emissions, and the related risks.
RD 2017 – 5.2.4.4
CC p. 48
CDP pp. 36-50
c) Describe the targets used by the organization to manage
climate-related risks and opportunities and performance
against targets.
RD 2017 – 5.2.4.4
CC p. 22-38
CDP pp. 13-19
Key:
CC = TOTAL’s 2017 Climate Report
CDP = TOTAL’s 2017 response to the CDP Climate Change questionnaire (available on total.com)
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Societal information
5.3
Societal information
The Group’s societal actions contribute to the achievement of its goal
to become a major in responsible energy. TOTAL puts its societal
responsibility at the heart of its activities, in keeping with its values
and the principles formally set forth in its Code of Conduct and its
Safety Health Environment Quality Charter, with a view to controlling
its impacts and providing concrete solutions, in order to create value
shared with all its stakeholders.
The Group’s integration policy in the regions where it operates is
founded on three pillars:
(cid:142)
(cid:142)
(cid:142)
dialogue and involvement of local stakeholders;
control of the societal impacts of the Group’s activities; and
acting as a socio-economic partner in the territories where the
Group is present.
line with
the General
the strategic directions defined by
In
Management, annual internal reporting tools are used to track and
monitor overall societal performance.
5.3.1
Dialogue and involvement of local stakeholders
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 investment decisions being made.
Stakeholder consultation
5.3.1.1
In addition to complying with regulations, TOTAL encourages
dialogue at every level of its organization. The Group societal directive
stipulates that each entity regularly consults its stakeholders 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 approach.
As a preliminary step, the stakeholders are identified, mapped out
and prioritized depending notably on their expectations. The entity or
the subsidiary engages in structured dialogue with its stakeholders in
four iterative steps:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
information (on the activities of the entity that could produce
negative impacts, the actions taken to mitigate these impacts and
the benefits produced by the current or planned activities);
consultation (listening to opinions, concerns, perceptions and
expectations);
consideration of the consultation (inclusion in the action plans);
feedback to the stakeholders (on the actions taken).
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
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
integrating the Company into the local context. To formalize and
organize relations with stakeholders, agreements may also be signed
and meetings held, such as public consultations.
the subsidiary and
the
By way of example, in the EACOP project to build a pipeline between
Uganda and Tanzania, two CLOs were recruited on the Ugandan
5
side, and six on the Tanzanian side, to establish continual dialogue
with the impacted communities. Nine more CLOs should be recruited
in 2018.
In addition to holding regulatory forums for dialogue, Refining &
Chemicals has set up voluntary structures for dialogue with local
stakeholders (such as Community Advisory Panels in the United
States and special local 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.
These instances of dialogue aim to establish constructive and lasting
exchanges with the stakeholders on subjects of mutual interest:
security and safety, nuisances, the environment, but also local events
organized by the stakeholders.
These meetings are opportunities for the site management to get to
know the local stakeholders and understand their concerns, to build
trustful relations with them and a common industrial culture that
favors the acceptability of the activities of the Group’s entities.
5.3.1.2
Deploy efficient societal
management systems
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, 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 and consolidate the societal strategy
of the subsidiaries and sites. Since 2006, SRM+ has been
implemented in over 100 entities, and the deployment continued in
2017:
(cid:142)
(cid:142)
in two subsidiaries of Exploration & Production (in Nigeria, which is
in the production phase, and Uganda, where the subsidiary is
currently in the pre-project phase);
at Refining & Chemicals, on the Grandpuits-Gargenville and Carling
platforms in France. In this latter case, the deployment took place
following
the
implementation of a project
transformation of the industrial activities on the site in the future.
to prepare
the
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At Marketing & Services, a specific module, developed in 2012, has
now been deployed in almost all the countries in the scope. At the
end of 2016 and 2017 it was deployed notably in Bangladesh, Brazil,
China, Côte d’Ivoire, France, Poland, Romania and Vietnam.
The Group also 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 georeferenced, 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 2017, 15 subsidiaries use the MOST tool.
5.3.2
Control of the societal impacts of the Group’s activities
Three new subsidiaries (Brazil, Mauritania and Brunei) used this toolkit
to set up a grievance management system in 2017. In a continual
improvement initiative, the subsidiaries have also agreed to take
measures
their grievance
management systems.
the performance of
improve
to
A guide to raise awareness of grievance management has been
available at Marketing & Services since 2014 to allow the subsidiaries
and operating sites to introduce a dedicated system separate from
the one used to handle commercial complaints.
In 2017, an operational grievance management system was in place
in more than 135 Group subsidiaries and sites.
in
to
(as
referred
TOTAL acknowledges the specificities of indigenous and tribal
peoples
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 Papua New Guinea, the first stage of the application for the
environmental permit for the Papua LNG project was completed in
October 2016. Innovative consultations were organized with all the
stakeholders. The interactive dialogue allowed for exchanges with the
local communities on the content of the environmental, societal and
health impact assessment (ESHIA):
(cid:142)
(cid:142)
In the capital, Port Moresby, 200 people (representatives of the
authorities, business, universities, local organizations and the
general public) came together for two days around stands that
were arranged to optimize the consultations.
In this way, the
visitors were able to interact freely with the Total E&P PNG Ltd.
Personnel;
In the Gulf province, a two-week tour of more than 30 villages was
organized in the zone impacted by the project in order to meet
more than 2,000 people. The content of the presentations was
translated into the local dialects, so that all the members of the
local communities could understand
their
comments and questions.
them and voice
The comments made by all the stakeholders were then sent to the
Conservation and Environment Protection Authority (CEPA), which
approved the specifications of the ESHIA in December 2016.
The societal initiative is integrated into operational processes using
the internal management system covering 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.
Conducting impact assessments
5.3.2.1
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. By way of example, in Papua New Guinea, the
environmental and societal baseline assessment lasted two years,
from September 2015 to September 2017. It covered areas such as
the socio-cultural, economic and real estate context and ecosystem
services.
5.3.2.2
Handling grievances from local
communities
TOTAL works to provide responses to local communities and to
reduce the nuisances that may be caused by its activities.
Grievance management systems are in place on every Refining &
Chemicals platform. On the platforms in Feyzin, Belgium and
Gonfreville, France, the gas flare safety torches have been equipped
with systems to limit noise levels.
Some grievances can also be addressed with the participation of the
local communities: by way of example, programs to monitor odors in
the vicinity of industrial zones have been developed by the Donges
and Gonfreville platforms in France in partnership with NGOs and
volunteers. These programs include training in the characterization of
the odors by a panel of volunteer “noses”, which then take part in the
monitoring of the smells coming from the sites.
At Exploration & Production, the subsidiaries received a toolkit
containing a standard online procedure to handle grievances in line
with the United Nations’ guidelines for companies and human rights.
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Societal information
5.3.3
Acting as a partner in the socio-economic development of the territories
where the Group is present
TOTAL, which is present in 130 countries, contributes to the social
and economic development of the regions that host its activities. The
Group has particular responsibilities towards the communities living in
the vicinity of its facilities, and strives to turn its activities into sources
of concrete opportunities and solutions for them.
elements
for
infrastructure,
The Group is building a global, integrated local development
approach (“in-country value”) that creates synergies among all the
(employment,
value-creating
subcontracting,
industries,
socioeconomic development projects, education, access to energy,
etc.) by promoting
industrial know-how. TOTAL
promotes actions that help to strengthen the capacity of individuals
and local organizations to organize their development independently
and durably, by favoring co-construction and partnerships with local
players.
countries
for
host
support
the Group’s
local
In 2017, societal actions global expenses amounts to €243 million.
The perimeter used to identify societal actions evolved in 2017 in
order to, on the one hand, include all actions related to dialogue,
handling of impact and socio-economic development and, on the
other hand, to exclude expenses linked to taxes and projects directly
managed by hosting countries. According to this procedure, the
amount for 2016 was €191 million. This difference is mainly due to
the increasing effort made in France by the Group to help vulnerable
people suffering from fuel poverty to realise fuel savings thanks to
energy renovation work. In 2017, the Group also contributed to
significant solidarity actions following the Harvey Hurrican disaster.
5.3.3.1
Contributing to the development
of local economic activity
Developing an approach to create shared value
that meet
the operational requirements of
The Group is committed to increasing its use of local labor and
subcontractors
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.
For example, Total E&P Congo has set up an organization dedicated
to the development of local content, which identifies and rates local
companies that are potential subcontractors. In an effort to improve
the skills of the local workforce and facilitate skills transfers, training
programs have been set up to meet the needs of the Moho North
project and the subsidiary’s local content strategy: more than
900,000 hours of training have been delivered to managers and
technicians working on the project, and to 49 technical and
engineering university lecturers who will then deliver the training
themselves, and to 25 local companies.
The development of local content, which focuses mainly on the
supply chain, was included in an in-country value initiative to develop
more local value. Still in the Republic of the Congo, a training center
for future electricians was launched in cooperation with Schneider
Electric, the ICAM and Don Bosco to extend the training actions
beyond the project development phase. This center was inaugurated
5
in Pointe Noire in 2017. In the same spirit, a pilot was finalized with
Bayard to develop a training module to improve young people’s skills
in mathematics and to give them a taste for, and access to, technical
trades.
Finally, the control of local content/in-country value, which was
originally driven by Exploration & Production, was centralized in 2017
in a new cross-functional management entity called Total Global
Services. This organizational change will spread the expertise
acquired to all of the Group’s activities.
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 small and medium-sized enterprises
(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:
(cid:142)
(cid:142)
(cid:142)
financial assistance for the setting up, development or takeover 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 2017, TDR has issued a total of €25.5 million in
loans to 475 SME projects, thereby supporting nearly 9,600 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 future Carling
and La Mède platform projects.
In Carling (France), the second steam cracker was permanently shut
down in October 2015. To adapt the platform and ensure its future
by restoring its competitiveness, TOTAL invested €190 million 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.
TOTAL is committed to improving the Carling industrial platform’s
attractiveness by developing a shared services offer, with the aim of
the
helping new industrial stakeholders become established at
platform. A first industrial project (SNF Coagulants, €19 million of
jobs) was launched on the
investments and 25 direct
industrial
Carling platform
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.
this way, TOTAL confirms
in 2017.
In
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SOCIAL, ENVIRONMENTAL AND SOCIETAL INFORMATION
Societal information
Plans to convert the La Mède refinery (France) through an investment
greater than €275 million are underway to create the first French
biorefinery, establish an 8 MW solar farm and set up a training center
in partnership with the IFP 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. TDR became a
qualified member of the Caban Tonkin Industrial and Innovation
Platform (PIICTO) and organized a bioindustries working group from
April 2016 to September 2017, hosted by the PIICTO, with the
particular aim of targeting the profile of new enterprises that could
become a part of the industrial fabric of the Etang de Berre.
In September 2017, the Group signed an MOU with Ecoslops, with a
view to setting up an oil residue regeneration unit on the La Mède
platform to produce fuels and light bitumen. This first project will
support the industrial redeployment of the La Mède platform.
In Carling and La Mède, these commitments to local authorities have
been set out in a Voluntary Agreement for Economic and Social
Development,
(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).
including Group
for SMEs
support
On the Lacq platform in France, a TDR unit has been set up as part
of Sobegi, the platform’s controller, to improve the platform’s
marketing offer and to identify and examine third-party industrial
projects that could join the platform.
In Dunkirk, in accordance with the 2012-2014 regional development
framework agreement to maintain industrial activities and jobs once
refining operations at the Flanders facility end, two industrial projects
have been completed: the construction of a dietary phosphate
production plant inaugurated in 2017 (Ecophos), and the construction
of a pilot biodiesel and biofuel production plant in which the Group
has a stake (BioTFuel).
Support for African entrepreneurs
At Marketing & Services, following the first “Start-upper of the year by
TOTAL” challenge in 34 African countries launched in 2016 and
aiming to support young entrepreneurs, 2017 was given over to
supporting the 102 winners.
An entailed professional support of each winner was carried out by
the subsidiaries, for each of the 50 new business projects and the 52
start-ups (less than two years old) in a range of varied sectors
(agri-business, access
to energy, healthcare, education and
business, the environment, transport/mobility, construction/public
works/real estate, video games and leisure, etc.).
The four start-uppers from the continent were supported by
Bond’Innov, 10 business partnerships (sales in service stations,
purchase of services, etc.) were set up, 20 external events were
organized by the subsidiaries to heighten the visibility of the start-ups,
25 incubators and universities were involved, 35 customers and
investors were introduced thanks to the support of TOTAL, and
around 100 hours of coaching were delivered in nine countries by
Seedstars.
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.
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5.3.3.2
Contribution to human and social
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 teams up with NGOs that have field
experience.
Local initiatives working to benefit communities
Following an analysis of the circumstances and consultation with their
stakeholders, the Group's entities define their own societal action
plan and become involved in a number of projects and initiatives in
response to local issues, such as road safety, access to education,
energy or healthcare, environmental protection, and solidarity and
neighborly relations, with the emphasis on projects that promote
cooperation and skills development. The involvement of stakeholders
right from the start is often a key element in the success of these
projects.
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. In
2017, two training sessions were organized specifically for CLOs in
Uganda (15 participants) and Papua New Guinea (18 participants).
In addition, specific training courses for societal correspondents and
operational managers are organized throughout the year and
incorporated into the HSE training program.
In order to reach a wider in-house audience on the Group’s sites and
at the subsidiaries, a societal e-learning module has been put on line.
It uses various examples of good practice to explain and illustrate the
societal approach.
Promoting mobility for as many people as possible
and fighting fuel poverty
As a driving force for mobility, in association with other companies
(Renault, Allianz, La Poste, etc.), TOTAL is testing a “mobility club”
scheme to support individuals who need a business vehicle and are
in financial difficulties due to their personal situation. The member
companies of the club offer a lease solution with an option to buy,
combined with finance, servicing and a fuel deal via a GR AXEANE
card.
Alongside Siplec (E.Leclerc), TOTAL funds the Alvéole program, led
by the French Federation of Bicycle Users (FUBicy). Aimed at social
landlords, the scheme aims to promote bicycle use among
occupants of social housing
facilitate access to
employment. It is funded through “fuel poverty” Energy Efficiency
Certificates (CEE). The aim is to raise awareness among 2,500
households, with 150 social housing properties equipped with
bicycles in the 2017/2018 period.
in order to
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 works alongside the
French government and other energy suppliers in the “Living Better”
program and the Coup de pouce économies d’énergie (energy saving
boost) initiative launched in February 2017.
Engaging with citizenship initiatives
5.3.3.3
TOTAL is also engaged in the community through public interest
initiatives in all of its host regions. These initiatives expand and build
on the way TOTAL maximizes the positive and minimizes the negative
impacts of its business activities. TOTAL's citizenship commitment
policy is set by the Civil Society Engagement Division, which runs the
Company Foundation programs and other corporate philanthropy
programs and provides impetus to community support projects run
by affiliates.
A new citizenship commitment policy
face of growing
inequality and today’s environmental
In the
challenges, TOTAL wished to strengthen its public interest initiatives.
This strong commitment is part of TOTAL’s ambition to become the
responsible energy major.
In 2017, the Group drew up a new citizenship commitment policy,
aligned with its history, values and businesses, to intensify its impact.
This program aims to structure all solidarity initiatives undertaken
around the world, both by its sites and subsidiaries and by the Total
Company Foundation.
From 2018, TOTAL will therefore gradually reorient citizenship
initiatives to focus on two priority sectors and four focus areas.
Two priority sectors:
(cid:142)
(cid:142)
TOTAL’s host regions: because TOTAL is a stakeholder in its host
regions, which have helped make it the company it is today, the
Group wants to do its part to contribute to their vitality and
sustainability;
young people: TOTAL’s initiatives will give priority to young people,
because by giving them the resources they need to develop
personally and professionally, they can build a better tomorrow.
Four focus areas have been chosen, because they are essential to
the sustainable development of all regions:
(cid:142)
forests and climate: committed to a beneficial environment for
humans by:
–
–
–
protecting
wetlands),
forests and sensitive ecosystems
(mangroves,
reforestation and tree planting,
educating young people about environmental protection;
(cid:142)
youth inclusion and skills: committed to empowering young people
in socially vulnerable situations, through:
–
–
–
initiatives that build their self-confidence,
education and professional and technical training,
support and coaching in career planning and entrepreneurship;
(cid:142)
safety on roads: committed to promoting safer mobility through:
–
–
–
prevention and education initiatives, especially for young people,
training,
advocacy and support to public authorities;
(cid:142)
cultures and heritage: committed to promoting cultural dialogue
through initiatives that:
–
–
–
–
preserve and pass on architectural heritage,
showcase cultural heritage,
provide access to culture,
support young contemporary artists.
SOCIAL, ENVIRONMENTAL AND SOCIETAL INFORMATION
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Total Company Foundation 2017 report
The Total Company Foundation has a 2013-2017 five-year budget of
€50 million, and was active in four fields: health, solidarity, oceans
and marine biodiversity, and culture and heritage.
With regard to health, the Total Company Foundation continued its
support for the Pasteur Institute, a leading player in global biomedical
science research in the fight against infectious diseases. The aim of
this partnership, which came to an end in 2017, was 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 Company Foundation supports the
“Clé des champs” program, managed by non-profit organization Les
Naturenautes, which takes school children from priority education
zones on free residential trips to three holiday centers owned by the
Group, with teaching transplanted to a completely different setting
(seaside, mountains or countryside).
In 2017, 1,235 children
benefited from the program. In addition, four innovative schemes
were started in 2017 aimed at increasing the occupational and social
integration of young people, namely Eloquentia, Wi-filles, Les
Entreprenariales and the Foundation for Innovation in Apprenticeships
(FIPA).
With regard to marine biodiversity, the Total Company Foundation
supported research programs undertaken to improve knowledge
about marine species and ecosystems and challenges related to their
protection and enhancement. 56 projects were supported in 2017,
including a number dedicated to the sharing of knowledge through
awareness and education campaigns.
5
for others,
In the culture field, the Total Company Fondation partly funded nine
exhibitions in 2017 that helped to showcase the cultures of the
countries in which the Group operates. In addition, convinced that
access to culture from a very young age is key to self-confidence and
respect
the Total Company Foundation supports
numerous initiatives designed to instruct young people in the worlds
of art and culture. These include the Petite Galerie at the Louvre, the
“10 months of school and opera” scheme run by the academy of the
Paris Opera,
the
Aix-en-Provence Festival, the Lyon Opera’s “Duo des métiers”
scheme and the El Camino project in Pau. In total, nearly 17,000
children from metropolitan France and the Overseas Departments
have benefited from these projects.
lyric drama educational programs of
the
Regarding heritage, the fourth three-year partnership between the
Total Company Foundation and the Fondation du patrimoine
(heritage foundation) reached its conclusion at the end of 2017. The
partnership primarily focused its activities on the rehabilitation of the
country’s built heritage converted for sociocultural purposes and on
work sites designed to further professional training and social
integration. Since 2006, some 210 projects, including 41 worksites
for employment integration, throughout France have received nearly
€29.2 million in funding from this partnership. The partnership will be
renewed for the 2018 to 2020 period.
On November 7, 2017, the Hauts-de-Seine prefecture extended the
Total Company Foundation’s accreditation for the new five-year
period 2018-2022. The fund for its multi-year action program has
been increased to €125 million for the five years, and its new areas of
intervention have been amended.
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TOTAL S.A. Philanthropy 2017 report
Other partnerships 2017 report
In the field of solidarity, TOTAL has forged a number of major
institutional partnerships in France. Since 2009, the Group has
worked with the French government and the ministry responsible for
youth to promote innovative social initiatives that are beneficial to all.
The program, developed under the “La France s’Engage” label since
2014, benefited over 780,000 people in 2017. This partnership, with
an overall budget of €58.7 million and the experimental youth
development fund as its primary technical and financial tool, has
enabled the financing of 19 projects in 2017. Having decided to
extend its commitment, in 2017 TOTAL S.A. became one of the
founder members of the “La France s’Engage” public interest
foundation alongside BNP Paribas, the Andros group and Artémis.
TOTAL will contribute €7.3 million to the foundation between 2018
and 2022.
“TOTAL associate
The Group also supports
teachers”, an
organization run by current or retired employees of the Group who
teach courses free of charge in schools and universities. 260
teachers give lessons and lectures in the fields of oil, natural gas,
chemistry and energy in general. During 2017, over 16,000 students
throughout the world benefited from this expertise.
Following the success of the previous two courses, in 2017 TOTAL
ran a third edition of its free Massive Open On-line Course (MOOC)
on the oil chain, entitled Oil & Gas: from Exploration to Distribution, in
partnership with IFP School. A total of 24,500 people from
140 countries enrolled on the course.
The Group also encouraged employees to engage with the
community in 2017 through support for projects championed by
non-profit organizations with which they volunteer on a personal
basis. In 2017, the Foundation supported 40 employee projects in
18 countries.
The Group celebrated 10 years of partnership with the French Society
of Sea Rescuers (SNSM) in 2017, and renewed its support for the
organization for a three-year period at the Paris boat show in
December. 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. Every year,
over 500 rescuers access this training and are provided with
increasingly effective protective equipment. In addition to demanding
technical content, these training courses give young people a sense of
commitment and responsibility.
Since 2014, the Group has supported Action Tank Social & Business
through its initiatives to fight poverty. The partnership aims to
promote the development of innovative, financially viable projects that
have an impact on reducing poverty and exclusion and can be
implemented on a large scale. In 2017, TOTAL helped to expand the
program with a pilot project in Senegal to launch Action Tank Africa.
This co-construction approach, which brings together public and
private bodies, academic institutions and non-profit organizations,
aims to enable the initiation of independent, long-term local activity.
The purpose of the initiative is to develop entrepreneurship and the
local industrial fabric and thus build lasting links with civil society.
As a driving force for mobility, in 2013 TOTAL and its partner the
Wimoov association created the Inclusive Mobility Laboratory (IML),
which brings together 16 entities from the public and private sectors
and civil society. The Laboratory’s three main activities are research
into mobility, experimentation and lobbying public authorities. As
such, the IML took part in the Assises Nationales de la Mobilité
conference organized by the French Ministry for Transport. As a
result of the IML’s recommendations, including support for mobility
platforms aimed at addressing the transport needs of vulnerable
people, mobility advice and solutions are offered to 7,500 people a
year, 50% of whom find jobs or new employment.
A commitment to improve road safety worldwide
Safety is one of the Group’s core values. As a result of its numerous
transport-related activities, TOTAL has acquired genuine expertise in
road safety, and has therefore decided to make it one of the main
focuses of its societal action. The Group’s ambition to actively take
part to the reduction in the numbers of victims of road accidents is
reflected by the numerous lobbying actions taken as part of the
United Nations Decade of Action for Road Safety (2011-2020), of
which TOTAL is a partner.
The Group is 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 July 2017, the Group hosted the GRSP information day on
the theme of Technology and Innovation; in October it took part in a
seminar held in Cape Town (South Africa) on the challenges and
opportunities represented by the SDGs. The GRSP is also helping
TOTAL to improve its program to raise children’s awareness of
dangers on the road and providing local support in some countries,
such as Vietnam, where employees have received training to give
talks in schools.
TOTAL is continuing its actions 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. This
year, SWRW Uganda received the prestigious Prince Michael
International Road Safety Award for its action to promote the
protection of road users and its ability to develop synergies between
government and private bodies.
In 2016, in France, TOTAL and 20 other major companies signed the
national appeal in favor of road safety and work, initiated by the
French Ministry of the Interior, and the Group is involved in actions
and discussions aimed at engaging with businesses with a view to
reinforcing prevention amongst employees
through concrete
commitments.
For several years now, in more than 35 countries, 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. Over 750 schools around the world use the cube,
and 1,000 more cubes were distributed in 2017.
Promoting energy knowledge
Because energy is central to the challenges of the future, and
everyone is seeking to form their own opinion, in 2005 TOTAL set up
Planet Energy, an initiative that aims to provide the younger
generation and their teachers, as well as anybody interested in
energy issues, with the basic tools for understanding all types of
energy. Planet Energy
that publishes
explanatory articles produced by a dedicated independent editorial
team, together with news from media partners. The site covers all
types of energy. It explores the history, future prospects and all of the
impacts and applications of energy, including everyday life (housing,
transport, consumption), technological innovation, economic balance,
the environment, global warming and the development of emerging
countries. The site’s editorial advisers, experts from a variety of
disciplines, ensure the quality and openness of the site.
is an on-line platform
In 2016, more than 193 lectures were delivered to primary and
secondary school children. Over 10,000 teachers have registered on
the Planet Energy site and can access free on-line educational
resources. The site has an average of 130,000 visitors per month.
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5.3.4
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 and vessel chartering by Trading &
Shipping) represented approximately $31 billion worldwide in 2017.
Approximately 32% of these expenditures were for goods (e.g.,
products, materials) and approximately 68% 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.
As part of the “One Total” company project, the Procurement
functions of the business segments have been combined since
January 1, 2017
transversal subsidiary, Total Global
Procurement. This new entity has a global approach to managing
supplier relations and aims to improve the integration of supply
chains into the Group’s processes.
into an
5.3.4.1
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:
(cid:142)
(cid:142)
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.
in 2014, specify
in a Group directive
The Fundamental Principles of Purchasing, launched in 2010 and
the
formally set out
commitments that TOTAL expects of the Group entities’ 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. The rules set out in the directive must be
included or
the agreements concluded with
suppliers. These principles are available for consultation by all
suppliers in both French and English on TOTAL’s website (under
“Suppliers”).
transposed
into
SOCIAL, ENVIRONMENTAL AND SOCIETAL INFORMATION
Societal information
In 2015, TOTAL signed a global agreement with the worldwide trade
union federation, IndustriALL Global Union, which contains two
clauses specifying suppliers’ environmental and social requirements.
The Group entities have therefore disclosed the principles of this
agreement to their main suppliers and service providers.
The deployment of the anti-corruption policy in purchasing also
continued in 2017 with awareness-raising sessions held for over 100
strategic suppliers at the Supplier Day. In addition to numerous
initiatives in previous years, in 2017 around 250 suppliers underwent
a supplier analysis through the issuing and examination of specific
questionnaires, and in some cases, external inspections. At the same
time, in-house awareness-raising sessions were held for procurement
community staff.
Finally, 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 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/.
5
Promoting sustainable procurement
5.3.4.2
An
issue of
sustainable procurement is tasked with strengthening TOTAL’s policy
in this area based on initiatives developed by each segment.
interdisciplinary working group dedicated to the
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
and 2016, TOTAL continued to participate in the Operationalization of
the UN Guiding Principles work organized by the IPIECA, aimed at
both oil and gas companies and engineering, procurement and
construction (EPC) contractors.
the achievement of an
In France, the Group’s purchases from the disabled and protected
employment sectors enabled
indirect
employment rate of nearly 1% in 2017. 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. In 2017, themed workshops were organized
for internal customers and buyers, providing an opportunity to
reiterate the Group’s commitments and meet suppliers in the
segment during speed meetings.
(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.
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Societal information
5.3.4.3.
Acting as a responsible partner
in relation with suppliers
TOTAL received the “Responsible supplier relationships” label in 2014
(maintained in 2015, 2016 and 2017) 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.
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 2017, an open day for employees of the
Group, lawyers and suppliers, enabled participants to learn about the
benefits of mediation. A brochure designed to increase awareness of
the mediation process is 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.
The payment terms for invoices from suppliers and customers of
TOTAL S.A. as of December 31, 2017, in application of the
provisions of Article D. 441-4 of the French Commercial Code, are as
follows:
As of December 31, 2017
(in M€)
SUPPLIERS
Invoices received and outstanding at the closing date of
the previous fiscal year
CLIENTS
Invoices issued and outstanding at the closing date
of the previous fiscal year
0 days
(provisional)
1 to 30
days
31 to 60
days
61 to 90
days
91 days
or more
Total
(1 day
or more)
0 days
(provisional)
1 to 30
days
31 to 60
days
61 to
90 days
91 days
or more
(A) Late payment brackets
Total
(1 day
or more)
10,702
Number of invoices affected
3,766
1,862
Total value of invoices
affected (including tax)
Percentage of the total value
of purchases for the fiscal
year (including tax)
Percentage of sales for the
fiscal year (including tax)
24
22
1
1
1
49
1.3%
173
14
122
177
97
266
676
18.3%
(B) Invoices excluded from (A) relating to disputed or unrecorded liabilities and receivables
Number of invoices excluded
Total value of invoices
excluded
None
None
None
None
(C) Reference payment terms used (contractual or legal - Article L.441-6 or Article L.443-1 of the French Commercial
Code)
Payment terms used for late
payment penalties
Legal payment terms
Legal payment terms
In addition, in October 2017 the Marketing & Services segment
organized a two-day conference that brought together almost 75
suppliers of one of its subsidiaries in China. The topics covered
included HSE and anti-corruption.
Regarding the support given to French SMEs, TOTAL is a member of
the “Pacte PME” association and took part in its supplier survey in
2017. The Group supports the international development of SMEs,
Total
through
own
occasionally
Développement Régional (refer to point 5.3.3.1 of this chapter).
suppliers,
including
its
In October 2017, the first transversal Suppliers Day brought together
110 strategic suppliers to the various business segments (refer to
point 5.2.1 of this chapter).
TOTAL supports its suppliers in the different countries in which it
does business.
For example, in Uganda, Total E&P Uganda organized a one-day
forum for suppliers (290 participants). The suppliers invited heard
presentations on the contracting process, and in particular the HSE
and ethics aspects, to help them take these subjects into account.
Every year, one of the departments of the IPO (TOTAL’s International
Procurement Office in Shanghai, China) organizes a compliance day
and invites one of its approved suppliers. It can explain the actions it
takes regarding anti-corruption compliance, the concrete problems
encountered and how it deals with them. The discussions, based on
case studies and topical issues, are enlightening for all. In 2017, this
event was held in December, on the same day as the Business Ethics
Day (refer also to point 5.3.5.1 of this chapter).
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Societal information
5.3.5.
Fair operating practices
5.3.5.1
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.
As stated in its Code of Conduct, TOTAL rejects corruption in all its
forms. The Group adopts a ‘zero tolerance’ approach to corruption
and adheres to the strictest integrity standards. This Code sets out
the business principles and individual behavior that everyone must
follow both in their day-to-day decision-making 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 is embodied by a robust anti-corruption
compliance program, in accordance with the undertakings made by
the Group to the United States authorities as part of the monitorship
(2013-2016) and with the requirements of the French law of
December 9, 2016 on transparency, the fight against corruption,
modernization of the economy.
This program is implemented by a dedicated organization, which
includes the Compliance and Social Responsibility department, and is
deployed by a network of more than 360 Compliance Officers
located in the countries where TOTAL operates.
The pillars of this anti-corruption program are, among others, the
following:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
a strong and consistent commitment from General Management,
expressed through significant communication activities such as the
Business Ethics Day, held every year
the UN’s
International Anti-Corruption Day and Human Rights Day in
December; the third of these events was held in 2017. It is
organized at the Group level and relayed locally by the subsidiaries
to remind employees how to react appropriately and to encourage
dialogue;
to mark
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 2015. This
module is accessible to all employees and mandatory for the
targeted personal (approximately 30,000 employees);
more targeted training activities intended for the most highly
exposed positions and in-depth training for all Compliance Officers;
the prohibition of “facilitation payments”;
regular reporting processes to ensure the periodic feedback of
information and incident feedback mechanisms, including a
whistleblowing system for reporting any breach of the Code of
Conduct (such as by emailing ethics@total.com);
control mechanisms including site compliance reviews (six to eight
per year) covering the Group’s various activities. These reviews are
followed-up with regards to the recommendations made. In
addition, the audits carried out by the Audit & Internal Control
Division include, depending on their purpose, controls to check
the implementation of the compliance processes;
(cid:142)
(cid:142)
processes to identify and evaluate corruption risks;
(cid:142)
the application of suitable sanctions.
a framework of internal standards, including a policy updated in
2016 that sets out the details of the program and more specific
rules relating to representatives dealing with public officials,
purchasing/sales,
donations/sponsorships,
acquisitions/divestments, joint ventures, conflicts of interest and
Human Resources. Employees can refer to these standards to
identify risky situations, carry out due diligence on third parties and
put in place the appropriate mitigation measures;
gifts/invitations,
Following the monitorship, at the end of 2016 the United States
authorities deemed that the Group had implemented an appropriate
compliance program and fulfilled its commitments, thus bringing the
proceedings against TOTAL to a close. The Group is still committed
and pursuing its efforts in a bid to ensure the sustainability,
development and continuous improvement of the anti-corruption
compliance program.
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SOCIAL, ENVIRONMENTAL AND SOCIETAL INFORMATION
Societal information
5.3.5.2
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.
In addition to its values, 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 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
federation,
the worldwide
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.
trade union
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 at total.com).
In 2013, the Executive Committee approved TOTAL’s first strategic
roadmap and an action plan for 2013-2015. The aim was to
systematically incorporate respect for human rights into the various
risk management systems. In this context, a guide was published in
2015 to help the Group’s lawyers responsible for business mergers
and acquisitions to improve how human rights are incorporated into
In addition,
the various applicable due diligence processes.
easy-to-use tools (inspired by the VPSHR) have been developed and
were deployed since 2016 at 46 exposed entities, to help them more
effectively identify and evaluate the risks/impacts relating to security
and human rights and put in place the appropriate corrective actions.
With a view to continuous improvement, the updated human rights
roadmap and a new action plan for 2017-2018 were adopted by the
Executive Committee in January 2017. The updated human rights
roadmap focuses on the following priority areas:
(cid:142)
(cid:142)
(cid:142)
consolidate the integration of human rights 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;
strengthen the process for evaluating the Group entities at risk, the
tools made available to them and their monitoring.
A dedicated organization
The Ethics Committee and the Human Rights Division 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 in accordance with the UN Guiding Principles on
Business and Human Rights (UNGP) (refer to point 5.3.2.2 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 the platform 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 as the annual Business
Ethics Day. In December 2017, the theme of the Business Ethics Day
was the Group’s value, “Respect for Others”, and ethical dilemmas.
The new Guide to taking into account religious teachings in the
Group was distributed. TOTAL also offers some employees special
training tailored to the challenges faced in the field, such as the
Responsible Leadership for Sustainable Business program and
human rights training sessions for HSE experts and Community
Liaison Officers (CLO) organized with the Danish Institute for Human
Rights (DIHR). Finally, actions are taken to raise awareness among
the Group’s external stakeholders, such as training related to the
VPSHR for its security providers.
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Societal information
It focuses on the three key topics for the Group and presents the
most important subjects and risks for each topic:
(cid:142)
(cid:142)
(cid:142)
its suppliers, contractors, partners, and
human rights in the workplace, concerning TOTAL’s employees as
well as
their
subcontractors. The salient subjects identified are forced labor and
child labor, discrimination, fair and just working conditions and
safety;
human rights and local communities. The salient subjects identified
are issues of access to land and the right to health and an
adequate standard of living;
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 salient risk of disproportionate
use of force is avoided.
For each of these six subject areas and salient risks, the information
document summarizes TOTAL’s policies,
training and
awareness-raising actions taken, and the due diligence measures
implemented in response to the identified issues.
the
In June 2017, the Group’s subsidiaries in the United Kingdom
published Anti-Slavery and Human Trafficking Statements
in
accordance with Section 54(1) of the Modern Slavery Act 2015.
Corporate Human Rights Benchmark
5
rankings published
TOTAL is the first major oil company in the Corporate Human Rights
Benchmark
initiative,
developed jointly by various NGOs and supported by investors
managing several billion dollars, is based on a complex questionnaire
that evaluates companies’ maturity regarding human rights issues.
in March 2017. This
Practical guide to dealing with religeous questions
within the Group
In June 2017, a guide to taking into account religious teachings in the
Group was distributed in-house. The guide provides concrete
answers to the questions that managers and employees might have
in this regard, and is based on feedback from subsidiaries in the field
in the different countries where the Group operates. The guide
promotes respect for differences and tolerance of other people’s
beliefs.
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.
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. Almost 120 subsidiaries were evaluated since 2002.
These assessments are undertaken by GoodCorporation a qualified
ethics expert. The assessment framework related to human rights
and anti-corruption is used on site, and numerous internal and
external stakeholders are interviewed by GoodCorporation, which
then issues a final report identifying points for 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
GoodCorporation for the entities that were assessed. Following a call
for tenders in 2017, GoodCorporation was once again selected to
support the Group in this area.
In 2017, a self-assessment tool was developed and will be used to
enable subsidiaries to measure their maturity and progress in terms
of ethics.
In addition, 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. The Group is also working with
International Alert (IA), an independent British organization that
specializes in conflict resolution and peacebuilding, to assess the
Group’s impacts on human rights and conflict risks at a local level.
The Group additionally conducts human rights impact assessments
at the subsidiaries with the help of the Danish Institute for Human
Rights, a Danish public non-profit organization. For example, at the
end of 2015, TOTAL worked with the DIHR in Nigeria to assess the
human rights practices of its E&P subsidiary, thus identifying the main
areas for improvement and recommendations. In 2017, a process
was carried out to monitor the progress made by the subsidiary in
implementing the recommendations. The DIHR also worked in Papua
New Guinea in 2017 to carry out a local human rights impact
assessment.
In July 2016, TOTAL published its first 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, an update of
which is planned for 2018, presents TOTAL’s approach to integrate
respect for human rights into its operations and business relations.
5.3.5.3
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 out 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.
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Reportrr ing scopes and method
5.4
Reporting scopes and method
5.4.1
Reporting guidance
The Group’s reporting is based:
(cid:142)
(cid:142)
for social indicators, on a practical handbook titled “Corporate
Social Reporting Protocol and Method”;
for Industrial Safety indicators, on the Corporate Guidance on
Event and Statistical Reporting;
(cid:142)
for environmental indicators, on a Group reporting procedure,
together with segment-specific instructions.
These documents are available to all TOTAL companies and can be
consulted at Corporate headquarters, in the relevant departments.
major components of the Group Human Resources policy, such as
mobility, career management, training, work conditions, employee
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
in December 2017 and January 2018;
survey, carried out
133 companies
the
consolidated Group workforce (85,652 employees) replied to the
survey. With regard to training only, this scope covers 82.4% of the
Group’s consolidated workforce and 127 companies.
representing 87.2% of
in 57 countries,
Consolidation method
5.4.2.1
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.
5.4.2.2
Changes in scope
Social and environmental indicators are calculated on the basis of the
consolidated scope of the Group as of December 31, 2017.
These data are presented on the basis of the operational business
segments identified in the 2017 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.
5.4.2
Scopes
In 2017, environmental reporting covered all activities, sites and
industrial assets in which TOTAL S.A., or one of the companies it
controls, is the operator, i.e. either operates or contractually manages
the operations (“operated domain”): 796 sites at year-end 2017.
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”,
includes all the assets in which the consolidated entities have a
financial interest or rights to production.
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 2017, the Group safety reporting scope covered 461 million
hours worked, equivalent to approximately 260,000 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
facilitate
tools
performance of the above surveys.
(Sogreat and HR4U)
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
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5.4.3
Principles
Indicator selection and relevance
5.4.3.1
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:
(cid:142)
(cid:142)
(cid:142)
TOTAL’s commitments and policies, and their effects on matters of
safety, environment, social, etc.;
performance relative to TOTAL’s main challenges and impacts;
information required by laws and regulations (Article L. 225-102-1
of the French Commercial Code).
5.4.3.2
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., 471 companies in
127 countries as of December 31, 2017.
Consolidated scope: all companies fully consolidated by the global
integration method, i.e., 313 companies having employees in
105 countries as of December 31, 2017.
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.
5.4.4
Details of certain indicators
5.4.4.1
Industrial Safety definitions and
indicators
TRIR (Total Recordable Injury Rate): number of recorded injuries per
million hours worked.
LTIR (Lost Time Injury Rate): number of lost time injuries per million
hours worked.
SIR (Severity Injury Rate): average number of days lost per lost time
injury.
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.
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.
SOCIAL, ENVIRONMENTAL AND SOCIETAL INFORMATION
Reportrr ing scopes and method
Methods
5.4.3.3
The methods may be adjusted to reflect the diversity of TOTAL’s
activities, recent integration of subsidiaries, lack of regulations or
for
standardized
collecting data, or changes in methods.
international definitions, practical procedures
Restatement of previous years’ published data, unless there is a
specific statement, is now limited to changes of methodology.
5.4.3.4
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.]
5
Environmental indicators
5.4.4.2
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.
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. 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.
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Reportrr ing scopes and method
Waste: the contaminated soil excavated and removed from active
sites to be treated externally is counted a waste. Drilling debris,
mining cuttings or soil polluted in inactive sites are not counted 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:
(cid:142)
(cid:142)
(cid:142)
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,
it defines the technical and
if
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.
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TOTAL AND ITS SHAREHOLDERS
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
6.6
Investor relations
6.6.1
Documents on display
6.6.2
Relationships with institutional investors,
financial analysts and individual
shareholders
6.6.3
Registered shareholding
6.6.4
2018 financial calendar
6.6.5
2019 financial calendar
6.6.6
Investor Relations contacts
223
223
223
223
224
224
224
6.1
Listing details
6.1.1
Listing
6.1.2
Share performance
6.2
Dividend
6.2.1
Dividend policy
6.2.2
Dividend payment
6.2.3
Coupons
6.3
Share buybacks
6.3.1
6.3.2
Share buybacks and cancellations
in 2017
Board of Directors’ report on share
buybacks and sales
6.3.3
2018-2019 share buyback program
6.4
Shareholders
6.4.1
Major shareholders
6.4.2
Employee shareholding
6.4.3
Shareholding structure
210
210
211
213
213
215
215
216
216
216
217
219
219
221
221
REGISTRATION DOCUMENT 2017
209
6
TOTAL AND ITS SHAREHOLDERS
Listing details
6.1
Listing details
6.1.1
Listing
Stock Exchanges
Paris, New York, London and Brussels.
Codes
ISIN
Reuters
Bloomberg
Mnémo
Market capitalization as of December 31, 2017(1)
€116.4 billion(2).
$139.8 billion(3).
FR0000120271
Percentage of free float
TOTF.PA
FP FP
FP
As of December 31, 2017, the free float factor determined by
Euronext Paris for calculating TOTAL S.A.'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%.
Included in the following stock indexes
CAC 40, Euro Stoxx 50, Stoxx Europe 50 and DJ Global Titans.
Par value
€2.50.
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
Weighting in the main stock indexes
as of December 31, 2017
CAC 40
Euro Stoxx 50
Stoxx Europe 50
DJ Global Titans
9.4% 1st largest component in the index
4.9% 1st largest component in the index
3.1% 8th largest component in the index
1.2% 39th largest component in the index
Included in the following ESG
(Environment, Social, Governance) indexes
Corporate Human Rights Benchmark, DJSI World, DJSI Europe,
FTSE4Good and Nasdaq Global Sustainability.
Market capitalization on Euronext Paris and
in the Euro zone as of December 31, 2017
TOTAL S.A. has the second-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, 2017
(€B)
AB InBev
Unilever
LVMH
TOTAL(b)
SAP SE
L’Oréal
188.1
137.7
124.4
116.4
114.8
103.6
(a)
(b)
Source: Bloomberg for companies other than TOTAL S.A.
Shares composing the share capital on December 31, 2017: 2,528,989,616.
TOTAL closing share price on Euronext Paris on December 31, 2017:
€46.045.
(1)
(2)
(3)
Shares composing the share capital on December 31, 2017: 2,528,989,616.
TOTAL closing share price on Euronext Paris on December 31, 2017: €46.045.
TOTAL closing ADR price on NYSE on December 31, 2017: $55.28.
210
REGISTRATION DOCUMENT 2017
TOTAL AND ITS SHAREHOLDERS
Listing details
6.1.2
Share performance
TOTAL share price on Euronext Paris (2014-17)
130
120
110
100
90
80
70
TOTAL
CAC 40
Euro Stoxx 50
2014
2015
2016
2017
2018
Base 100 in 2014.
Sources: Euronext Paris, Bloomberg.
TOTAL ADR price on NYSE (2014-17)
150
140
130
120
110
100
90
80
70
60
TOTAL US
Dow Jones
2014
2015
2016
2017
2018
6
Base 100 in 2014.
Sources: NYSE, Bloomberg.
6.1.2.1
Arkema spin-off
Within the framework of the spin-off of Arkema’s chemical activities
the Group’s other chemical activities, TOTAL’s Annual
from
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 Échos,
Arkema shares corresponding to allotment rights for fractional shares
which were unclaimed as of August 3, 2008, were sold on Euronext
Paris at an average price of €32.5721 per share. As a result, from
August 3, 2008, the indemnity price per share of allotment rights for
Arkema shares
(NYSE Euronext notice No.
PAR-20080812-02958-EUR). BNP Paribas Securities Services paid
an
intermediaries on remittance of
corresponding allotment rights for Arkema shares.
indemnity to the
is €3.25721
financial
As from August 4, 2018, the unclaimed amounts will be transferred 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.
6.1.2.2
Change in share prices from January 1, 2017, to December 31, 2017
In Europe, for the major European oil and gas
companies
In the United States
(ADR quotes for European companies),
for the major international oil and gas 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.
-5.5%
6.9%
6.6%
2.6%
-10.8%
(closing price in dollars)
TOTAL
ExxonMobil
Chevron
Royal Dutch Shell A
Royal Dutch Shell B
BP
ENI
Source: Bloomberg.
8.5%
-7.3%
6.4%
22.7%
17.8%
12.4%
2.9%
REGISTRATION DOCUMENT 2017
211
6
TOTAL AND ITS SHAREHOLDERS
Listing details
6.1.2.3
Annual total return
As of December 31, 2017, 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 total return
Value as of December 31, 2017,
of €1,000 invested
Investment term
1 year
5 years
10 years
15 years
TOTAL(a)
-0.30%
9.28%
3.52%
7.35%
12.54%
11.42%
3.21%
7.29%
997
1,559
1,413
2,896
CAC 40(b)
TOTAL
CAC 40
(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.
Sources: Euronext Paris, Bloomberg.
6.1.2.4
Market information summary
Share price
(in €)
Highest (during trading session)
Lowest (during trading session)
End of the year (closing)
Average of the last 30 trading sessions (closing)
Trading volume (average per session)(a)
Euronext Paris
NYSE (number of ADRs)
(a) Number of shares traded.
Sources: Euronext Paris, NYSE.
2013
45.67
35.18
44.53
43.60
2014
54.71
38.25
42.52
44.32
2015
50.30
36.92
41.27
43.57
2016
48.89
35.21
48.72
46.22
4,439,725
5,519,597
7,412,179
6,508,817
5,380,909
1,371,780
1,277,433
1,853,669
2,109,802
1,667,928
1,125
1,718
1,371
2,872
2017
49.50
42.23
46.05
47.00
TOTAL share price at closing on Euronext Paris (2016-17)
(in €)
50
40
30
2016
Source : Euronext Paris.
2017
2018
TOTAL average daily volume traded on Euronext Paris
(in millions of shares)
9.42 9.85
7.30
6.42
7.95
5.21
5.05
4.00
6.33
6.38
5.18 5.47
4.50 4.81
5.79
6.56
5.85
6.44
5.48
4.67
5.30
4.35
5.17
5.89
january-16
february-16
march-16
april-16
may-16
june-16
Source: Euronext Paris.
july-16
september-16
august-16
october-16
november-16
december-16
january-17
february-17
march-17
april-17
may-17
june-17
july-17
september-17
august-17
october-17
november-17
december-17
212
REGISTRATION DOCUMENT 2017
6.2
Dividend
6.2.1
Dividend policy
Dividend payment policy
6.2.1.1
On October 28, 2010, TOTAL S.A.’s Board of Directors adopted a
policy based on quarterly dividend payments starting in fiscal year
2011.
(cid:142)
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
regulations. As of
December 31, 2017, there is no restriction under such provisions that
would materially restrict the distribution to TOTAL S.A. of the
dividends declared by those subsidiaries.
laws and
local
Fiscal year 2017 and 2018 dividends
6.2.1.2
TOTAL has distributed and paid the following interim dividends with
respect to fiscal year 2017:
(cid:142)
on September 20, 2017, the Board of Directors decided on the
payment of the first interim dividend for fiscal year 2017 of €0.62
per share. The ex-dividend date was September 25, 2017, and the
payment in cash or new shares was made on October 12, 2017.
The issuance price of these newly issued shares was set by the
Board of Directors on September 20, 2017, at €41.12 per share,
equal to 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, with a 5%
discount and rounded up to the nearest cent;
TOTAL AND ITS SHAREHOLDERS
Dividend
on December 12, 2017, the Board of Directors decided on the
payment of the second interim dividend for fiscal year 2017 of €0.62
per share. The ex-dividend date was December 19, 2017, and the
payment in cash or new shares was made on January 11, 2018.
The issuance price of these newly issued shares was set by the
Board of Directors on December 12, 2017, at €46.55 per share,
equal to 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, without a
discount and rounded up to the nearest cent.
On March 14, 2018, the Board of Directors decided on the payment
of the third interim dividend for fiscal year 2017 of €0.62 per share.
The ex-dividend date will be March 19, 2018 and this interim dividend
will be paid on April 9, 2018.
After closing the 2017 statutory accounts, the Board of Directors
decided on February 7, 2018, to propose to the Shareholders’
Meeting on June 1, 2018, an annual dividend of €2.48 per share for
fiscal year 2017. In light of the first three interim dividends decided by
the Board of Directors, the balance of the dividend for fiscal year
2017 will be €0.62 per share, which is stable irelative to the three
preceding interim dividends.
The Board of Directors also decided on February 7, 2018 to propose
to the shareholders the option of receiving the remaining 2017
dividend payment in new shares of the Company without discount.
Pending the approval at the Shareholders’ Meeting, the ex-dividend
date would be June 11, 2018, 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 28, 2018.
6
Subject to the applicable legislative and regulatory provisions, and pending the approval by the Board of Directors and at the Shareholders’
Meeting to be held on June 1, 2018, the ex-date calendar for the interim dividends and the final dividend for fiscal year 2018 is expected to be
as follows:
First interim dividend
Second interim dividend
Third interim dividend
Remaining dividend
The provisional ex-dividend dates above relate to the TOTAL shares traded on Euronext Paris.
Ex-dividend date
September 25, 2018
December 18, 2018
March 19, 2019
June 11, 2019
REGISTRATION DOCUMENT 2017
213
Dividend6
TOTAL AND ITS SHAREHOLDERS
Dividends for the last five fiscal years(1)
In 2017, TOTAL’s pay-out ratio was 68%(2). Changes in the pay-out
ratio(3) over the past five fiscal years are as follows:
€2.38
€2.44
€2.44
€2.45
€2.48
80%
68%
58%
60%
50%
2013
2014
2015
2016
2017
2013
2014
2015
2016
2017
Interim dividend
Remainder
6.2.1.3
Shareholder return policy
for next three years
The Board of Directors met on February 7, 2018, after arrested the
Group’s 2017 accounts, reviewed the cash flow allocation, including
the shareholder return policy, for the next three years.
Despite a volatile environment over the past three years, TOTAL has
successfully reset its business model, delivering solid results in 2017
thanks
its
pre-dividend organic breakeven to $27/b Brent.
to strong operational performance and
reducing
After five years of heavy investment, TOTAL is now delivering strong
cash-accretive production growth. The Group has also invested
counter-cyclically to acquire resources at attractive prices and is
emerging stronger, with clear visibility on growing cash flow and a
net-debt-to-capital ratio reduced to 12% at end-2017 that provides
increased financial flexibility.
Confident in the ability of the Group’s teams to seize value-adding
growth opportunities, the Board of Directors confirms the priority to
implement its long term growth strategy.
In this context, the Board of Directors has decided to provide visibility
on cash flow allocation and shareholder return for the next three
years. The Board of Directors confirms a capital investment program
of $15-17 billion per year, set an objective to maintain the
net-debt-to-capital ratio below 20%, and maintain its grade A credit
rating and further proposes the following measures:
1.
Increasing the dividend by 10% over the next three years
–
–
–
–
–
–
–
–
–
2.
3.
The full-year 2017 dividend will be proposed to the Combined
Shareholders’ Meeting at €2.48 per share, corresponding to a
final quarterly dividend of €0.62 per share and an increase of
1.2% compared to the full-year 2016 dividend.
The 2018 interim dividends will be increased by 3.2% to €0.64
per share, with the intention of proposing to the Combined
Shareholders’ Meeting a full-year 2018 dividend of €2.56 per
share.
The target for the full-year 2020 dividend would be €2.72 per
share.
Buying back shares issued with no discount as part of the scrip
dividend option
Maintain the scrip dividend option, with no discount on the
price, since certain shareholders prefer to take their dividend in
shares.
Buy back the newly issued share with the intention to cancel
them. No dilution linked to the scrip dividend from 2018.
The buyback of the shares issued in January 2018 as part of the
2nd 2017 interim dividend payment will start immediately.
Buying back up to $5 billion of shares over the period
2018-2020
The objective is to share with investors the benefits of the oil
price upside.
The amount of buyback will be adjusted to the oil price.
This is in addition to the scrip share buyback.
(1)
(2)
(3)
Pending approval at the Shareholders’ Meeting on June 1, 2018. As from January 1, 2018, dividends received by individuals having their tax residence in
France are subject to a 30% flat-rate on gross amount (including 17.2% of social security contributions). However, taxpayer can opt for the taxation of his
dividend income at the progressive scale of the income tax, after a 40% rebate.
Based on adjusted fully diluted earnings per share of €3.65 and a dividend of €2.48 per share pending approval at the Shareholders’ Meeting on June 1,
2018.
Based on adjusted fully diluted earnings for the relevant year.
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REGISTRATION DOCUMENT 2017
TOTAL AND ITS SHAREHOLDERS
Dividend
6.2.2
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
TOTAL American depositary receipts (ADRs).
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:
(cid:142)
(cid:142)
(cid:142)
ING Belgique, Avenue Marnix 24, 1000 Brussels, Belgium;
BNP Paribas Fortis, Avenue des Arts 45, 1040 Brussels, Belgium;
KBC BANK N.V., Avenue du Port 2, 1080 Brussels, Belgium.
6.2.3
Coupons
Fiscal year
2011
2012
2013
2014
2015
2016
2017(a)
Ex-dividend date
Date of payment
Date of expiration
Type of coupon
Net amount (€)
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
06/02/2014
09/23/2014
12/15/2014
03/23/2015
06/08/2015
09/28/2015
12/21/2015
03/21/2016
06/06/2016
09/27/2016
12/21/2016
03/20/2017
06/05/2017
09/25/2017
12/19/2017
03/19/2018
06/11/2018
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
06/05/2014
09/26/2014
12/17/2014
03/25/2015
07/01/2015
10/21/2015
01/14/2016
04/12/2016
06/23/2016
10/14/2016
01/12/2017
04/06/2017
06/22/2017
10/12/2017
01/11/2018
04/09/2018
06/28/2018
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
07/01/2020
10/21/2020
01/14/2021
04/12/2021
06/23/2021
10/14/2021
01/12/2022
04/06/2022
06/22/2022
10/12/2022
01/11/2023
04/09/2023
06/28/2023
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
Interim dividend
Interim dividend
Interim dividend
Remaining dividend
Interim dividend
Interim dividend
Interim dividend
Remaining dividend
6
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
0.62
0.62
0.62
0.62
(a)
A resolution will be submitted to the Annual Shareholders’ Meeting on June 1, 2018, to pay a dividend of €2.48 per share for fiscal year 2017, including a remaining dividend
of €0.62 per share, with an ex-dividend date on June 11, 2018, and a payment date set for June 28, 2018, in cash or in new shares with no discount.
REGISTRATION DOCUMENT 2017
215
6
TOTAL AND ITS SHAREHOLDERS
Share buybacks
6.3
Share buybacks
Upon presentation of the report of the Board of Directors, the Annual
Shareholders’ Meeting of May 26, 2017 authorized 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) N°596/2014 of April 16, 2014, on market abuse and of the
General Regulation (règlement général) of the French Financial
Markets Authority (Autorité des marchés financiers, AMF), to buy or
sell shares of the Company within the framework of a share buyback
program. The maximum purchase price was set at €80 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 Shareholders’
Meeting of May 24, 2016.
6.3.1
Share buybacks and cancellations in 2017
In 2017, TOTAL S.A. did not buy back or cancel any shares.
Percentage of share capital bought back
4.13%
0.19%
0.18%
0.19%
0%
2013
2014
2015
2016(a)
2017
(a)
Buyback of treasury shares off-market immediately followed by their cancellation.
6.3.2
Board of Directors’ report on share buybacks and sales
6.3.2.1
Share buybacks during
fiscal year 2017
In 2017, TOTAL S.A. did not buy back any shares.
6.3.2.2
Cancellation of Company shares
during fiscal years 2015, 2016
and 2017
TOTAL S.A. did not cancel any shares during fiscal years 2015 and
2017.
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 share buyback program, as
authorized by the Annual Shareholders’ Meeting of May 24, 2016.
6.3.2.3
Transfer of shares during
fiscal year 2017
2,210,040 TOTAL shares were transferred during fiscal year 2017
following the final award of TOTAL shares under the restricted share
grant plans.
6.3.2.4
Shares held in the name of
the Company and its subsidiaries
as of December 31, 2017
As of December 31, 2017, the Company held 8,376,756 treasury
shares, representing 0.33% of TOTAL S.A.’s share capital including
8,345,847 shares held to cover the performance share grant plans
and 30,909 shares to be awarded under new share purchase option
plans or new restricted share grant plans. In accordance with French
law, these shares are deprived of voting rights and dividend rights.
For shares bought back to be allocated to Company or Group
employees in line with the objectives referred to Regulation (EU)
N°596/2014 of the European Parliament and the Council of April 16,
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.
216
REGISTRATION DOCUMENT 2017
TOTAL AND ITS SHAREHOLDERS
Share buybacks
6.3.2.5
Reallocation for other purposes
during fiscal year 2017
6.3.2.6
Conditions for the buyback and use
of derivative products
During fiscal year 2017, treasury shares held by the Company were
not reallocated for any other purposes other than those initially
planned when they were purchased.
The Company did not use any derivative products as part of the
share buyback programs successively authorized by the Annual
Shareholders’ Meetings of May 24, 2016 and May 26, 2017. Further,
there was no open purchase or sale position as of December 31,
2017.
Transactions completed by TOTAL S.A. involving its treasury shares from January 1, 2017
to December 31, 2017
Number of shares
Transaction price (€)
Average strike price
Amounts (M€)
(a) Corresponding to final award of TOTAL shares under the restricted share grant plans.
Treasury shares as of December 31, 2017
Percentage of share capital held by TOTAL S.A.
Number of shares held in portfolio
Nominal value of the portfolio (M€)
Book value of portfolio (M€)
Market value of the portfolio (M€)
Cumulative gross movements
Purchases
Sales/Transfers
-
-
-
-
2,210,040(a)
-
-
-
0.33%
8,376,756(a)
20.9(b)
378.9
385.7(c)
6
(a)
(b)
(c)
Including 8,345,847 shares held to cover the performance share grant plans and 30,909 shares to be awarded under new share purchase option plans or new
restricted share grant plans.
Based on TOTAL shares nominal value of €2.50.
Based on a closing price of €46.045 per share as of December 31, 2017.
6.3.3
2018-2019 share buyback program
6.3.3.1
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:
(cid:142)
(cid:142)
reduce the Company’s capital through the cancellation of shares;
honor the Company’s obligations related to securities convertible
or exchangeable into Company shares;
(cid:142)
(cid:142)
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.
REGISTRATION DOCUMENT 2017
217
6
TOTAL AND ITS SHAREHOLDERS
Share buybacks
6.3.3.2
Legal framework
Implementation of this share buyback program, which is covered by
Articles 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) N°596/2014 on market abuse, is
subject to approval by the TOTAL S.A. Annual Shareholders’ Meeting
of June 1, 2018 through the 5th resolution that reads as follows:
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:
(cid:142)
(cid:142)
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 implementation of 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 at the date of the operations under
consideration.
the
above-mentioned intended purposes, the Company will inform its
shareholders in a press release.
transactions other
case of
than
In
According to the intended purposes, the treasury shares that are
acquired by the Company through this program may, in particular, be:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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 and to the
executive directors of the Company or of other companies of the
Group;
delivered to the beneficiaries 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; and
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, any previous authorization having the same purpose.
The Board of Directors is hereby granted full authority, with the right
to subdelegate such authority, to undertake all actions authorized by
this resolution.”
“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)
N°596/2014 of April 16, 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 at the date of the operations
under consideration, 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 the
share 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 subsidiaries.
As of December 31, 2017, out of
the 2,528,989,616 shares
outstanding, the Company held 8,376,756 shares directly. Under
these circumstances, the maximum number of shares that the
Company could buy back is 244,522,205 shares and the maximum
amount that the Company may spend to acquire such shares is
€19,561,776,400 (excluding acquisition fees).
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REGISTRATION DOCUMENT 2017
TOTAL AND ITS SHAREHOLDERS
Shareholders
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 June 1, 2018, the share buyback
program may be implemented over an 18-month period following the
date of this Meeting, and therefore expires on November 30, 2019.
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 6.3.2 of this chapter).
6
6.3.3.3
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
June 1, 2018, 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.
as
shares
outstanding
Before any share cancellation under the authorization given by the
Annual Shareholders’ Meeting of June 1, 2018, based on the number
of
2017
(2,528,989,616 shares), and given the 8,376,756 shares held by the
Group as of December 31, 2017, i.e., 0.33% of the share capital, the
maximum number of shares that may be purchased would be
244,522,205, representing a theoretical maximum investment of
€19,561,776,400 (excluding acquisition fees) based on the maximum
purchase price of €80.
of December
31,
Conditions for buybacks
Such shares may be bought back by any means on regulated
markets, multilateral trading facilities or over the counter, including
6.4
Shareholders
6.4.1
Major shareholders
6.4.1.1
Changes in major shareholders’ holdings
TOTAL’s major shareholders(1) as of December 31, 2017, 2016 and 2015 were as follows:
2017
2016
2015
As of December 31,
BlackRock, Inc.(b)
Group employees(c)
of which FCPE Total
Actionnariat France
Other shareholders
of which holders of ADRs(d)
% of share
capital
% of voting
rights
6.3
5.0
3.5
88.7
7.9
5.5
8.8
6.4
85.7
7.4
% of
theoretical
voting
rights(a)
5.5
8.7
6.4
85.8
7.4
% of share
capital
% of voting
rights
% of share
capital
% of voting
rights
5.6
4.8
3.5
89.6
9.1
4.9
8.6
6.4
86.5
8.6
5.5
4.9
3.5
89.6
7.2
5
9
6.7
86
7.2
(a)
(b)
(c)
(d)
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.
Information taken from Schedule 13G filed by BlackRock, Inc. (“BlackRock”) with the SEC on February 1, 2017, in which BlackRock declared a holding of 159,257,811
shares of the Company as of December 31, 2017 (i.e., 6.3% of the Company’s share capital). BlackRock stated that it has the exclusive right to dispose of the holding,
together with an amount of 146,653,028 voting rights (i.e., 5.5% 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.
On the basis of the definition of employee shareholding set forth in Article L. 225-102 of the French Commercial Code. Amundi, 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 14, 2018,
declaring a holding of 237,635,765 shares of the Company as of December 31, 2017 (i.e., 9.4% of the Company’s share capital). Amundi 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 111,935,867 of these shares (i.e., 4.4% of the Company’s
share capital) and a joint right to dispose of all of these shares. In addition, a director representing the employees and a director representing employee shareholders sit
on the Board of Directors of TOTAL S.A.
Including all of the ADS represented by ADR listed on the NYSE.
(1)
Major shareholders are defined herein as shareholders whose interest (in the share capital or voting rights) exceeds 5%.
REGISTRATION DOCUMENT 2017
219
6
TOTAL AND ITS SHAREHOLDERS
Shareholders
As of December 31, 2017, the holdings of the major shareholders
were calculated based on 2,528,989,616 shares,
representing
2,678,015,444 voting rights exercisable at Shareholders’ Meetings,
or 2,686,392,200 theoretical(1) voting rights including 8,376,756
voting rights attached to the 8,376,756 TOTAL shares held by TOTAL
S.A. that are deprived of voting rights.
the basis of 2,430,365,862 shares
For prior years, the holdings of the major shareholders were
to which
calculated on
2,572,363,626 voting rights exercisable at Shareholders’ Meetings
were attached as of December 31, 2016, and 2,440,057,883 shares
to which 2,460,619,275 voting rights exercisable at Shareholders’
Meetings were attached as of December 31, 2015.
6.4.1.2
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 2017.
As of December 31, 2017, the Total Actionnariat France collective
investment fund held 3.48% of the share capital representing 6.37%
of the voting rights exercisable at Shareholders’ Meetings and 6.35%
of the theoretical voting rights.
As of December 31, 2017, BlackRock held 6.30% of the share
capital representing 5.48% of the voting rights exercisable at
Shareholders’ Meetings and 5.46% of the theoretical voting rights.
6.4.1.3
Legal threshold notifications in fiscal year 2017
N° AMF
disclosure
Date on which
thresholds were
breached
Company
Number of
shares
% share
capital
% voting
rights
Comments
Share capital
Number of
voting rights
217C0669
03/15/2017
BlackRock
128,596,522
5.24%
4.93%
217C0694
03/21/2017
BlackRock
131,040,586
5.34%
5.03%
217C2958
12/12/2017
217C2969
12/13/2017
217C3006
12/19/2017
JP Morgan
Chase & Co.
JP Morgan
Chase & Co.
JP Morgan
Chase & Co.
128,819,605
5.09%
4.81%
150,712,345
5.96%
5.61%
101,969,739
4.03%
3.80%
Crossed downward
the 5% threshold in the
Company’s voting rights
Crossed upward
the 5% threshold in the
Company’s voting rights
Crossed upward
the 5% threshold in the
Company’s capital shares
Crossed upward
the 5% threshold in the
Company’s voting rights
Crossed downward
the 5% threshold in the
Company’s capital shares
and voting rights
2,453,807,693
2,605,925,718
2,453,807,693
2,605,925,718
2,528,814,376
2,677,900,746
2,528,814,376
2,686,277,502
2,528,814,376
2,686,277,502
6.4.1.4
Threshold notifications required by
the bylaws
In addition to the legal obligation to inform the Company and the
French Financial Markets Authority when 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, such information
being made at the latest on the close of the fourth trading day after
the threshold is exceeded (Article L. 233-7 of the French Commercial
Code and Article 223-14 of the AMF General Regulation), 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.
Notifications must be sent to the Senior Vice President of Investor
Relations in London (contact details in point 6.6.6 of this chapter).
Temporary transfer of securities
6.4.1.5
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 (Autorité des marchés financiers) 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.
(1)
Pursuant to Article 223-11 of the AMF General Regulation, the number of theoretical voting rights is calculated on the basis of all outstanding shares to
which voting rights are attached, including treasury shares that are deprived of voting rights.
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TOTAL AND ITS SHAREHOLDERS
Shareholders
6.4.1.6
Shareholders’ agreements
TOTAL S.A. is not aware of any agreements among its shareholders.
6.4.2
Employee shareholding
The total number of TOTAL shares held directly or indirectly by the Group’s employees as of December 31, 2017, were as follows:
FCPE Total Actionnariat France
FCPE Total Actionnariat International Capitalisation
FCPE Total France Capital +
FCPE Total International Capital
Shares subscribed by employees in the U.S.
Group Caisse Autonome (Belgium)
TOTAL shares from the exercise of the Company’s stock options and held as registered shares
within a Company Savings Plan
TOTAL SHARES HELD BY EMPLOYEES
88,117,966
25,195,337
6,351,752
2,664,836
797,908
468,736
3,307,463
126,903,998
As of December 31, 2017, 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, 126,903,998 TOTAL
shares, representing 5.02% of the Company’s share capital and
8.78% of the voting rights. The management of each of the
Collective investment funds (FCPEs) 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 Supervisory 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 contributions 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 4.1.6 of chapter 4.
6
6.4.3
Shareholding structure
Estimates below are as of December 31, 2017, excluding treasury shares, based on the survey of identifiable holders of bearer shares
conducted on that date.
By shareholder type
By area
Group
employees(a)
5.0%
Individual
shareholders
7.6%
Reste
du monde
700 kb/j
Institutional
shareholders
87.4%
of which:
16.7% in France
12.9% in United Kingdom
16.6% for the rest
of Europe
33.2% for North America
8.0% for the rest of world
Rest
of Europe
17.1%
United Kingdom
12.8%
Rest of world
8.2%
Reste
du monde
700 kb/j
France
28.3%
North
America
33.6%
(a)
On the basis of employee shareholdings as defined in Article L. 225-102
of the French Commercial Code, treasury shares excluded (5.0% of the
total share capital, refer to point 6.4.1 of this chapter).
The number of French individual TOTAL shareholders is estimated at approximately 450,000.
REGISTRATION DOCUMENT 2017
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TOTAL AND ITS SHAREHOLDERS
Investor relations
6.6
Investor relations
6.6.1
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, 2017, or previous fiscal years, may be
consulted at its registered office pursuant to the legal and regulatory
provisions in force, and on the Company 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
(Autorité des marchés financiers) for each of the past 10 financial
are
(under
total.com
years
available
Investors/Publications and regulated
information). The Group’s
biannual presentations of its results and outlook, as well as the
quarterly financial information, are also available on its website.
its website
on
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. This report is also available
on the Company website.
6.6.2
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 2017, 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.
With a dedicated team, the Group maintains an active dialog with
shareholders in the field of Corporate Social Responsibility (CSR) and
governance. Around 100 meetings covering these themes were
organized in France and worldwide in 2017.
6
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:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
a direct line, e-mail address, and postal address (refer to
point 6.6.6 of this chapter);
documentation and material provided for individual shareholders
(e.g., 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;
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 26, 2017, at the Palais des Congrès in Paris and
attended by 3,000 people.
The documentation on relationships with individual shareholders is
available
(under
Investors/Individual shareholders).
the Company’s website
total.com
on
6.6.3
Registered shareholding
TOTAL 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.
Registered shares
There are two forms of registration:
(cid:142)
(cid:142)
administered registered shares: shares are registered with TOTAL
through BNP Paribas Securities Services, but the holder’s financial
intermediary continues to administer them (sales, purchases,
coupons, etc.);
pure registered shares: TOTAL holds and directly administers
shares on behalf of the holder through BNP Paribas Securities
(sales, purchases, coupons, Shareholders’ Meeting
Services
notices, etc.), so that the shareholder does not need to appoint a
financial intermediary.
Main advantages of registered shares
The advantages of registered shares include:
(cid:142)
(cid:142)
(cid:142)
double voting rights if the shares are held continuously for two
successive years (refer to point 7.2.4.1 of chapter 7);
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), from 8:45 a.m. to 6:00 p.m., GMT+1;
registration as a recipient of all information published by the Group
for its shareholders;
REGISTRATION DOCUMENT 2017
223
6
TOTAL AND ITS SHAREHOLDERS
Investor relations
(cid:142)
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:
(cid:142)
(cid:142)
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;
the option to view and manage shareholdings online and via the
Planetshares app for digital tablets.
(cid:142)
(cid:142)
no custodial fees;
easier placement of market orders(1) (phone, mail, fax, internet);
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.
6.6.4
2018 financial calendar
February 8
March 19
April 26
June 1
June 11
July 26
September 25
September 25
October 26
December 18
Results of the fourth quarter and full year 2017, and Investors’ Day – London
Ex-dividend date for the 2017 third interim dividend
Results of the first quarter 2018
2018 Annual Shareholders’ Meeting in Paris (Palais des Congrès)
Ex-dividend date for the 2017 remaining dividend(a)
Results of the second quarter and first half 2018
Investors’ Day (outlook and objectives)
Ex-dividend date for the 2018 first interim dividend(b)
Results of the third quarter and first nine months of 2018
Ex-dividend date for the 2018 second interim dividend(b)
(a)
(b)
Subject to approval at the Annual Shareholders’ Meeting on June 1, 2018.
Subject to the Board of Directors’ decision.
The full calendar including shareholders' meetings and investor fairs is available on the Company’s website total.com (under Investors).
6.6.5
2019 financial calendar
March 19
May 29
June 11
Ex-dividend date for the 2018 third interim dividend(a)
2019 Annual Shareholders’ Meeting in Paris (Palais des Congrès)
Ex-dividend date for the 2018 remaining dividend(b)
(a)
(b)
Subject to the Board of Directors’ decision.
Subject to approval at the Annual Shareholders’ Meeting on May 29, 2019.
6.6.6
Investor Relations contacts
Mr. Mike Sangster,
Senior Vice President, Investor Relations TOTAL S.A.
Mr. Laurent Toutain,
Head of Individual Shareholder Relations
TOTAL Finance Corporate Services
10 Upper Bank Street, Canary Wharf
London E14 5BF, United Kingdom
e-mail: ir@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
TOTAL S.A.
Individual Shareholder Relations Department Tour Coupole
2, place Jean Millier
92078 Paris-La Défense Cedex, France
e-mail: shareholders@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
(1)
Provided the subscriber has signed the market service agreement. Signing this agreement is free of charge.
224
REGISTRATION DOCUMENT 2017
7
GENERAL INFORMATION
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
7.1
Share capital
7.1.1
Share capital as of December 31, 2017
7.1.2
Features of the shares
7.1.3
7.1.4
Potential share capital
as of December 31, 2017
Share capital history
(since January 1, 2015)
7.2
Articles of incorporation and bylaws;
other information
7.2.1
7.2.2
7.2.3
General information concerning
the Company
Summary of the Company’s corporate
purpose
Provisions of the bylaws governing
the administration
and management bodies
226
226
226
226
226
228
228
228
228
7.2.4
Rights, privileges and restrictions attached
to the shares
229
7.2.5
Amending shareholders’ rights
7.2.6
Shareholders’ Meetings
7.2.7
7.2.8
Identification of the holders of bearer
shares
Thresholds to be declared according
to the bylaws
7.2.9
Changes in the share capital
230
230
230
230
230
REGISTRATION DOCUMENT 2017
225
7
GENERAL INFORMATION
Share capital
7.1
Share capital
7.1.1
Share capital as of December 31, 2017
€6,322,474,040 consisting of 2,528,989,616 fully paid ordinary shares.
7.1.2
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 7.2.4.1 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.
7.1.3
Potential share capital as of December 31, 2017
Securities granting rights to TOTAL shares through exercise are
TOTAL share subscription options amounting to 2,440,940 as of
December 31, 2017, divided into:
(cid:142)
1,950,372 options awarded on September 14, 2010, under the
plan decided by the Board of Directors;
(cid:142)
490,568 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., 2,531,430,556 shares, represents 100.10% of
the share capital as of December 31, 2017 (1).
7.1.4
Share capital history (since January 1, 2015)
For fiscal year 2015
April 27, 2015
July 1, 2015
October 21, 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.
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 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.
For fiscal year 2016
January 14, 2016
April 12, 2016
June 23, 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.
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 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.
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 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 remaining
dividend in shares, raising the share capital by €60,932,120 from €6,196,891,032.50 to €6,257,823,152.50.
(1)
On the basis of 2,528,989,616 TOTAL shares constituting the share capital as of December 31, 2017, and 2,440,940 TOTAL shares that could be issued
upon the exercise of TOTAL options.
226
REGISTRATION DOCUMENT 2017
GENERAL INFORMATION
Share capital
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 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.
For fiscal year 2017
January 12, 2017
April 6, 2017
April 26, 2017
June 22, 2017
October 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 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.
Acknowledgment of the issuance of 19,800,590 new shares, par value €2.50 per share and a share price of
€44.64 (i.e., a par value of €2.50 value and issue premium of €42.14) for the payment of the third interim dividend
for fiscal year 2016 in shares, raising the share capital by €49,501,475 from €6,133,930,082.50 to
€6,183,431,557.50.
Acknowledgment of the issuance of 9,532,190 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 27, 2016, raising the share
capital by €23,830,475 from €6,183,431,557.50 to €6,207,262,032.50.
Acknowledgment of the issuance of 17,801,936 new shares, par value €2.50 per share and a share price of
€44.86 (i.e., a par value of €2.50 value and issue premium of €42.36) for the payment of the 2016 remaining
dividend in shares, raising the share capital by €44,504,840 from €6,207,262,032.50 to €6,251,766,872.50.
Acknowledgment of the issuance of 25,633,559 new shares, par value €2.50 per share and a share price of
€41.12 (i.e., a par value of €2.50 value and issue premium of €38.62) for the payment of the first interim dividend
for fiscal year 2017 in shares, raising the share capital by €64,083,897.50 from €6,251,766,872.50 to
€6,315,850,770.
For fiscal year 2018
January 11, 2018
Acknowledgment of the issuance of 2,649,308 new shares, par value €2.50 per share, through the exercise of
stock options between January 1 and December 31, 2017, raising the share capital by €6,623,270 from
€6,315,850,770 to €6,322,474,040.
7
March 8, 2018
Acknowledgment of the issuance of 7,087,904 new shares, par value €2.50 per share and a share price of €46.55
(i.e., a par value of €2.50 value and issue premium of €44.05) for the payment of the second interim dividend for
fiscal year 2017 in shares, raising the share capital by €17,719,760.00 from €6,322,474,040 to €6,340,193,800.00.
Acknowledgment of the issuance of 97,522,593 new shares, par value €2.50 per share as part of the acquisition of
Mærsk Oil, raising the share capital by €243,806,482.50 from €6,340,193,800.00 to €6,584,000,282.50. For
additional information, refer to point 2.1.1 in chapter 2.
REGISTRATION DOCUMENT 2017
227
7
GENERAL INFORMATION
Artrr icles of incorporation and bylaws; other information
7.2
Articles of incorporation and bylaws;
other information
7.2.1
General information concerning the Company
The Company’s name is TOTAL S.A.
EC Registration Number: FR 59 542 051 180.
TOTAL S.A. is a French limited liability company (société anonyme).
It is 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.
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.
Fiscal year: from January 1 to December 31 of each year.
APE Code
since January 8, 2008.
(NAF): 111Z until
January 7, 2008; 7010Z
The Company’s bylaws are on file with K.L. Associés, Notaries in
Paris.
Its telephone number is +33 (0)1 47 44 45 46 and its internet address
is total.com.
7.2.2
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.
7.2.3
Provisions of the bylaws governing the administration
and management bodies
7.2.3.1
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.
7.2.3.2
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.
7.2.3.3
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. They were approved by the Annual Shareholders’ Meeting
held on May 16, 2014.
(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.
228
REGISTRATION DOCUMENT 2017
Artrr icles of incorporation and bylaws; other information
GENERAL INFORMATION
7.2.3.4
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 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.
7.2.3.5
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.
7.2.3.6
Rules of procedure and Committees
of the Board of Directors
Refer to point 4.1.2 of chapter 4 of this Registration Document.
Form of management
7.2.3.7
Management of the Company is assumed either by the Chairman of
the Board of Directors (who then holds the title of the Chairman and
Chief Executive Officer), or by another person appointed by the Board
of Directors with the title of Chief Executive Officer. It is the
responsibility of the Board of Directors to choose between these two
forms of management under the majority rules described above.
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 the governance structure, refer
to point 4.1.5.1 of chapter 4.
7.2.4
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.
With the exception of double voting rights, no privilege is attached to
a specific class of shares or to a specific class of shareholders.
7.2.4.1
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.
7.2.4.2
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.
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.
Fractional rights
7.2.4.3
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.
7.2.4.4
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.
7
(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).
REGISTRATION DOCUMENT 2017
229
7
GENERAL INFORMATION
Artrr icles of incorporation and bylaws; other information
From this profit, minus prior losses, if any, the following items are
deducted in the order indicated:
(cid:142)
(cid:142)
(cid:142)
5% to constitute the legal reserve fund, until said fund reaches
10% of the share capital;
the amounts set by the Shareholders’ Meeting to fund reserves for
which it determines the allocation or use; and
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.
7.2.5
Amending shareholders’ rights
Any amendment to the bylaws must be approved or authorized by
the Shareholders’ Meeting voting with the quorum and majority
required by the
Shareholders’ Meetings.
laws and regulations governing Extraordinary
7.2.6
Shareholders’ Meetings
Refer to point 4.4.3 in chapter 4 for the terms and conditions of the notice and admission to Shareholders’ meetings.
7.2.7
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.
7.2.8
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.
7.2.9
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 preemptive 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 preemptive subscription right.
230
REGISTRATION DOCUMENT 2017
8
CONSOLIDATED FINANCIAL STATEMENTS
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
8.2
Consolidated statement of income
8.3
Consolidated statement of comprehensive income
8.4
Consolidated balance sheet
8.5
Consolidated statement of cash flow
8.6
Consolidated statement of changes in shareholders’
equity
8.7
Notes to the Consolidated Financial Statements
238
239
240
241
242
243
REGISTRATION DOCUMENT 2017
233
8
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of income
8.2
Consolidated statement of income
TOTAL
For the year ended December 31,
(M$)(a)
Sales
Excise taxes
Revenues from sales
Purchases, net of inventory variation
Other operating expenses
Exploration costs
Depreciation, depletion and impairment of tangible assets
and mineral interests
Other income
Other expense
Financial interest on debt
Financial income and expense from cash & cash equivalents
Cost of net debt
Other financial income
Other financial expense
Net income (loss) from equity affiliates
Income taxes
CONSOLIDATED NET INCOME
Group share
Non-controlling interests
Earnings per share ($)
Fully-diluted earnings per share ($)
(a) Except for per share amounts.
(Notes 3, 4, 5)
(Notes 3, 5)
(Notes 3, 5)
(Note 5)
(Note 5)
(Note 5)
(Note 5)
(Note 6)
(Note 6)
(Note 15)
(Note 6)
(Note 6)
(Note 8)
(Note 11)
2017
171,493
(22,394)
149,099
(99,411)
(24,966)
(864)
2016
149,743
(21,818)
127,925
(83,377)
(24,302)
(1,264)
(16,103)
(13,523)
3,811
(1,034)
(1,396)
(138)
(1,534)
957
(642)
2,015
(3,029)
8,299
8,631
(332)
3.36
3.34
1,299
(1,027)
(1,108)
4
(1,104)
971
(636)
2,214
(970)
6,206
6,196
10
2.52
2.51
2015
165,357
(21,936)
143,421
(96,671)
(24,345)
(1,991)
(17,720)
3,606
(1,577)
(967)
94
(873)
882
(654)
2,361
(1,653)
4,786
5,087
(301)
2.17
2.16
238
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of comprehensive income
8.3
Consolidated statement of comprehensive income
TOTAL
For the year ended December 31,
(M$)
CONSOLIDATED NET INCOME
Other comprehensive income
Actuarial gains and losses
Tax effect
(Note 10)
Currency translation adjustment generated by the parent company
(Note 9)
ITEMS NOT POTENTIALLY RECLASSIFIABLE
TO PROFIT AND LOSS
Currency translation adjustment
Available for sale financial assets
Cash flow hedge
Share of other comprehensive income of equity affiliates,
net amount
Other
Tax effect
ITEMS POTENTIALLY RECLASSIFIABLE TO PROFIT AND LOSS
TOTAL OTHER COMPREHENSIVE INCOME (NET AMOUNT)
COMPREHENSIVE INCOME
Group share
Non-controlling interests
(Note 9)
(Note 8)
(Notes 15, 16)
(Note 8)
(Note 9)
2017
8,299
823
(390)
9,316
9,749
(2,578)
7
324
(677)
-
(100)
(3,024)
6,725
15,024
15,312
(288)
2016
6,206
(371)
55
(1,548)
(1,864)
(1,098)
4
239
935
1
(76)
5
(1,859)
4,347
4,336
11
2015
4,786
557
(278)
(7,268)
(6,989)
2,456
9
(185)
120
1
53
2,454
(4,535)
251
633
(382)
8
REGISTRATION DOCUMENT 2017
239
8
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated balance sheet
8.4
Consolidated balance sheet
OTAL
ASSETS
As of December 31,
(M$)
Non-current assets
Intangible assets, net
Property, plant and equipment, net
Equity affiliates: investments and loans
Other investments
Non-current financial assets
Deferred income taxes
Other non-current assets
TOTAL NON-CURRENT ASSETS
Current assets
Inventories, net
Accounts receivable, net
Other current assets
Current financial assets
Cash and cash equivalents
Assets classified as held for sale
TOTAL CURRENT ASSETS
TOTAL ASSETS
(Notes 4, 7)
(Notes 4, 7)
(Note 8)
(Note 8)
(Note 15)
(Note 11)
(Note 6)
(Note 5)
(Note 5)
(Note 5)
(Note 15)
(Note 15)
(Note 2)
2017
2016
2015
14,587
109,397
22,103
1,727
679
5,206
3,984
15,362
111,971
20,576
1,133
908
4,368
4,143
14,549
109,518
19,384
1,241
1,219
3,982
4,355
157,683
158,461
154,248
16,520
14,893
14,210
3,393
33,185
2,747
84,948
242,631
15,247
12,213
14,835
4,548
24,597
1,077
72,517
13,116
10,629
15,843
6,190
23,269
1,189
70,236
230,978
224,484
LIABILITIES & SHAREHOLDERS’ EQUITY
As of December 31,
(M$)
Shareholders’ equity
Common shares
Paid-in surplus and retained earnings
Currency translation adjustment
Treasury shares
TOTAL SHAREHOLDERS’ EQUITY – GROUP SHARE
(Note 9)
Non-controlling interests
TOTAL SHAREHOLDERS’ EQUITY
Non-current liabilities
Deferred income taxes
Employee benefits
Provisions and other non-current liabilities
Non-current financial debt
TOTAL NON-CURRENT LIABILITIES
Current liabilities
Accounts payable
Other creditors and accrued liabilities
Current borrowings
Other current financial liabilities
Liabilities directly associated with the assets classified
as held for sale
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES & SHAREHOLDERS’ EQUITY
240
REGISTRATION DOCUMENT 2017
(Note 11)
(Note 10)
(Note 12)
(Note 15)
(Note 5)
(Note 15)
(Note 15)
(Note 2)
2017
2016
2015
7,882
112,040
(7,908)
(458)
111,556
2,481
114,037
10,828
3,735
15,986
41,340
71,889
26,479
17,779
11,096
245
1,106
56,705
242,631
7,604
105,547
(13,871)
(600)
98,680
2,894
101,574
11,060
3,746
16,846
43,067
74,719
23,227
16,720
13,920
327
491
7,670
101,528
(12,119)
(4,585)
92,494
2,915
95,409
12,360
3,774
17,502
44,464
78,100
20,928
16,884
12,488
171
504
54,685
230,978
50,975
224,484
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of cash flow
8.5
Consolidated statement of cash flow
TOTAL
For the year ended December 31,
(M$)
CASH FLOW FROM OPERATING ACTIVITIES
Consolidated net income
Depreciation, depletion, amortization and impairment
Non-current liabilities, valuation allowances, and deferred taxes
(Gains) losses on disposals of assets
Undistributed affiliates’ equity earnings
(Increase) decrease in working capital
Other changes, net
CASH FLOW FROM OPERATING ACTIVITIES
CASH FLOW USED IN INVESTING ACTIVITIES
(Note 5.3)
(Note 5.5)
(Note 5.5)
2017
2016
2015
8,299
16,611
(384)
(2,598)
42
827
(478)
22,319
6,206
14,423
(1,559)
(263)
(643)
(1,119)
(524)
16,521
4,786
19,334
(2,563)
(2,459)
(311)
1,683
(524)
19,946
Intangible assets and property, plant and equipment additions
(Note 7)
(13,767)
(18,106)
(25,132)
Acquisitions of subsidiaries, net of cash acquired
Investments in equity affiliates and other securities
Increase in non-current loans
Total expenditures
Proceeds from disposals of intangible assets and property, plant
and equipment
Proceeds from disposals of subsidiaries, net of cash sold
Proceeds from disposals of non-current investments
Repayment of non-current loans
Total divestments
CASH FLOW USED IN INVESTING ACTIVITIES
CASH FLOW FROM FINANCING ACTIVITIES
Issuance (repayment) of shares:
(cid:142)
(cid:142)
Parent company shareholders
Treasury shares
Dividends paid:
(cid:142)
(cid:142)
Parent company shareholders
Non-controlling interests
Issuance of perpetual subordinated notes
Payments on perpetual subordinated notes
Other transactions with non-controlling interests
Net issuance (repayment) of non-current debt
Increase (decrease) in current borrowings
Increase (decrease) in current financial assets and liabilities
CASH FLOW FROM/(USED IN) 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
(800)
(1,368)
(961)
(1,123)
(180)
(1,121)
(16,896)
(20,530)
1,036
2,909
294
1,025
5,264
1,462
270
132
1,013
2,877
(128)
(513)
(2,260)
(28,033)
2,623
2,508
837
1,616
7,584
(11,632)
(17,653)
(20,449)
519
-
(2,643)
(141)
-
(276)
(4)
2,277
(7,175)
1,903
(5,540)
5,147
3,441
24,597
100
-
(2,661)
(93)
4,711
(133)
(104)
3,576
(3,260)
1,396
3,532
2,400
(1,072)
23,269
485
(237)
(2,845)
(100)
5,616
-
89
4,166
(597)
(5,517)
1,060
557
(2,469)
25,181
8
(Note 9)
(Note 9)
(Note 15)
(Note 15)
33,185
24,597
23,269
REGISTRATION DOCUMENT 2017
241
8
CONSOLIDATED FINANCIAL STATEMENTS
Consolidated statement of changes in shareholders’ equity
8.6
Consolidated statement of changes in shareholders’
equity
TOTAL
Common shares issued
(M$)
Number Amount
Paid-in
surplus and
retained
earnings
Currency
translation
adjustment
Treasury shares
Number Amount
Shareholders’
equity –
Group share
Non-
controlling
interests
Total
shareholders’
equity
AS OF JANUARY 1, 2015
2,385,267,525
7,518
94,646
(7,480) (109,361,413)
(4,354)
Net income 2015
Other comprehensive income
Comprehensive income
Dividend
-
-
-
-
-
-
-
-
Issuance of common shares
54,790,358
152
Purchase of treasury shares
Sale of treasury shares(a)
Share-based payments
Share cancellation
Issuance of perpetual subordinated
notes
Payments on perpetual
subordinated notes
Other operations with non-controlling
interests
Other items
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,087
185
5,272
(6,303)
2,159
-
(6)
101
-
5,616
(114)
23
134
-
(4,639)
(4,639)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,711,935)
(237)
105,590
-
-
-
-
-
-
6
-
-
-
-
-
-
90,330
5,087
(4,454)
633
(6,303)
2,311
(237)
-
101
-
5,616
(114)
23
134
3,201
(301)
(81)
(382)
(100)
-
-
-
-
-
-
-
64
132
AS OF DECEMBER 31, 2015
2,440,057,883
7,670
101,528
(12,119) (113,967,758)
(4,585)
92,494
2,915
Net income 2016
Other comprehensive income
Comprehensive income
Dividend
-
-
-
-
-
-
-
-
Issuance of common shares
90,639,247
251
Purchase of treasury shares
Sale of treasury shares(a)
Share-based payments
-
-
-
-
-
-
6,196
(108)
6,088
(6,512)
3,553
-
(163)
112
-
(1,752)
(1,752)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,048,668
-
163
-
Share cancellation
(100,331,268)
(317)
(3,505)
- 100,331,268
3,822
Issuance of perpetual subordinated
notes
Payments on perpetual
subordinated notes
Other operations with non-controlling
interests
Other items
-
-
-
-
-
-
-
-
4,711
(203)
(98)
36
-
-
-
-
-
-
-
-
-
-
-
-
AS OF DECEMBER 31, 2016
2,430,365,862
7,604
105,547
(13,871)
(10,587,822)
(600)
Net income 2017
Other comprehensive income
Comprehensive income
Dividend
-
-
-
-
-
-
-
-
Issuance of common shares
98,623,754
278
Purchase of treasury shares
Sale of treasury shares(a)
Share-based payments
Share cancellation
Issuance of perpetual subordinated
notes
Payments on perpetual
subordinated notes
Other operations with non-controlling
interests
Other items
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,631
718
9,349
(6,992)
4,431
-
(142)
151
-
-
(302)
(8)
6
-
5,963
5,963
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,211,066
142
-
-
-
-
-
-
-
-
-
-
-
-
6,196
(1,860)
4,336
(6,512)
3,804
-
-
112
-
4,711
(203)
(98)
36
98,680
8,631
6,681
15,312
(6,992)
4,709
-
-
151
-
-
(302)
(8)
6
10
1
11
(93)
-
-
-
-
-
-
-
(43)
104
2,894
(332)
44
(288)
(141)
-
-
-
-
-
-
-
4
12
93,531
4,786
(4,535)
251
(6,403)
2,311
(237)
-
101
-
5,616
(114)
87
266
95,409
6,206
(1,859)
4,347
(6,605)
3,804
-
-
112
-
4,711
(203)
(141)
140
101,574
8,299
6,725
15,024
(7,133)
4,709
-
-
151
-
-
(302)
(4)
18
AS OF DECEMBER 31, 2017
2,528,989,616
7,882
112,040
(7,908)
(8,376,756)
(458)
111,556
2,481
114,037
(a)
Treasury shares related to the restricted stock grants.
Changes in equity are detailed in Note 9.
242
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements
8.7
Notes to the Consolidated Financial Statements
On February 7, 2018, the Board of Directors established and authorized the publication of the Consolidated Financial Statements of TOTAL S.A.
for the year ended December 31, 2017, which will be submitted for approval to the Shareholders’ Meeting to be held on June 1, 2018.
Basis of preparation of the Consolidated Financial
Statements
Major judgments and accounting estimates
Judgments in case of transactions not addressed
by any accounting standard or interpretation
NOTE 1
General accounting policies
NOTE 2
Changes in the Group structure
NOTE 3
Business segment information
NOTE 4
Segment Information by geographical
area
244
244
245
245
246
247
259
NOTE 5
Main items related to operating activities
260
NOTE 6
Other items from operating activities
NOTE 7
Intangible and tangible assets
NOTE 8
Equity affiliates, other investments
and related parties
265
267
271
NOTE 9
Shareholders’ equity and share-based
payments
NOTE 10
Payroll, staff and employee benefits
obligations
NOTE 11
Income taxes
NOTE 12
Provisions and other non-current
liabilities
NOTE 13
Off Balance sheet commitments and
lease contracts
NOTE 14
Financial assets and liabilities analysis
per instrument class and strategy
277
287
291
293
296
300
NOTE 15
Financial structure and financial costs
303
NOTE 16
Financial instruments related to
commodity contracts
NOTE 17
Post closing events
NOTE 18
Consolidation scope
319
323
324
8
REGISTRATION DOCUMENT 2017
243
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements
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
(International Accounting Standard Board) as of
December 31, 2017.
IASB
The accounting policies and principles applied in the Consolidated
Financial Statements as of December 31, 2017 were the same as
those that were used as of December 31, 2016 except for standards,
amendments and interpretations of IFRS which were mandatory for
the periods beginning after January 1, 2017 (and not early adopted).
Their application did not have a significant impact on the financial
statements as of December 31, 2017.
Major judgments and accounting estimates
Impairment of assets
As part of the determination of the recoverable value of assets for
impairment (IAS 36), 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.
Employee benefits
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
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.
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.
The preparation of financial statements in accordance with IFRS for
the closing as of December 31, 2017 requires the executive
management to make estimates, assumptions and judgments that
affect
the Consolidated Financial
information reported
Statements and the Notes thereto.
the
in
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.
Estimation of hydrocarbon reserves
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
is reasonably certain,
regardless of whether deterministic or probabilistic methods are used
for the estimation.
indicates that renewal
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
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.
244
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 1
–
Notes to the Consolidated Financial Statements
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 taxable profits existing at the closing date and
future taxable profits which estimation is 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.
NOTE 1
General accounting policies
1
A)
Accounting policies
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:
(cid:142)
(cid:142)
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
8
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
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”.
line “currency
the
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.
Monetary transactions
(i)
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.
Translation of financial statements
(ii)
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 are
translated using the average exchange rates for the period. Foreign
exchange differences resulting from such translations are either
recorded
translation
in shareholders’ equity under “Currency
(for the Group share) or under “Non-controlling
adjustments”
interests” (for the share of non-controlling interests) as deemed
appropriate.
REGISTRATION DOCUMENT 2017
245
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Notes 1, 2
1.2
Significant accounting policies applicable in
the future
interpretations published respectively by the
The standards or
International Accounting Standards Board
the
International Financial Reporting Standards Interpretations Committee
(IFRS IC) which were not yet in effect at December 31, 2017, are as
follows:
(IASB) and
(cid:142)
Standards adopted by the European Union at December 31,
2017
–
In May 2014, the IASB issued standard IFRS 15 “Revenue from
contracts with customers” 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. The Group will apply the partial retrospective
method: comparative information will not be restated and the
cumulative impact of the first application will be presented as an
adjustment to opening equity at January 1, 2018.
–
–
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 related to the
application of this standard are currently the subject of analytical
work, in particular on the depreciation of financial assets issue.
The expected impacts are not significant for the Group. The
Group will not restate the comparative information and will
present the impacts related to the first application in opening
equity at January 1, 2018.
In January 2016, the IASB issued standard IFRS 16 “Leases”,
which sets out the principles for recognition of leases
contracts. The standard is applicable for annual periods
starting on or after January 1, 2019. The working group, set up
to evaluate the impacts of the application of this standard and
to manage the transition, proceeded to the inventory of existing
leases as of December 31, 2016. Analysis and quantification of
expected impacts across the Group will continue in 2018 on
the basis of the contracts as at December 31, 2017. At this
stage the transition method has not yet been decided.
NOTE 2
Changes in the Group structure
Main acquisitions and divestments
2.1
In 2017, the main changes in the Group structure were as follows:
2.2
Divestment projects
Exploration & Production
(cid:142)
(cid:142)
In October 2017, TOTAL finalized the sale to Perenco of its
interests and the transfer of operatorship in various mature assets
in Gabon.
In November 2017, TOTAL finalized the sale to Kuwait Foreign
Petroleum Exploration Company (KUFPEC) of its remaining 15%
interest in the Gina Krog field in Norway.
Gas, Renewables & Power
(cid:142)
(cid:142)
In January 2017, TOTAL acquired a 23% interest in the company
Tellurian to develop an integrated gas project in the United States
for an amount of $207 million.
In September 2017, TOTAL signed an agreement with EREN
Renewable Energy (EREN RE) to acquire an indirect 23% stake by
subscribing
increase of €238 million. As of
December 31, 2017, TOTAL paid €119 million. The remaining
portion will be paid in 2018.
to a capital
Refining & Chemicals
(cid:142)
On January 31, 2017, TOTAL closed the sale of Atotech to the
Carlyle Group for an amount of $3.2 billion.
Marketing & Services
(cid:142)
On March 28, 2017, TOTAL announced the closing of the
acquisition of the assets of Gulf Africa Petroleum Corporation in
Kenya, Uganda and Tanzania.
◗
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”.
Exploration & Production
(cid:142)
On November 27, 2017, TOTAL has agreed to sell all of its
interests in the Martin Linge field (51%) and Garantiana discovery
(40%) on the Norwegian Continental Shelf to Statoil. The
transaction remains subject to final due diligence and approval
from the relevant authorities. At December 31, 2017 the assets
and liabilities have been respectively classified in the consolidated
balance sheet in “assets classified as held for sale” for an amount
of $2,581 million and “liabilities directly associated with the assets
classified as held for sale” for an amount of $1,106 million. The
assets concerned mainly include tangible assets.
Marketing & Services
(cid:142)
On November 3, 2017 TOTAL and Erg have announced the
signing of an agreement with the Italian Group API to sell the
TotalErg joint venture (Erg 51%, TOTAL 49%). At December 31,
2017 the shares have been classified in the consolidated balance
sheet in “assets classified as held for sale” for an amount of
$166 million. As of January 10, 2018, all required authorizations
being obtained, the transaction was closed.
246
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 3
–
Notes to the Consolidated Financial Statements
NOTE 3
Business segment information
Description of the business segments
Financial information by business segment is reported in accordance
with the internal reporting system. It 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.
TOTAL has implemented a new organization fully effective since
January 1, 2017, structured around
following business
segments:
four
(cid:142)
(cid:142)
(cid:142)
(cid:142)
An Exploration & Production segment;
A Gas, Renewables & Power segment including downstream Gas
activities, New Energies activities (excluding biotechnologies) and
Energy Efficiency division;
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 Supply,
Trading and marine Shipping;
A Marketing & Services segment including the global activities of
supply and marketing in the field of petroleum products.
In addition, the Corporate segment includes holdings operating and
financial activities.
Certain figures for the years 2015 and 2016 have been restated in
order to reflect the new organization with four business segments.
Definition of the indicators
(i)
Operating income (measure used to evaluate
operating performance)
Revenue from sales after deducting cost of goods sold and inventory
variations, other operating expenses, exploration expenses and
depreciation, depletion, and impairment of tangible assets and
mineral interests.
intangible assets
Operating income excludes the amortization of
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
income of equity affiliates,
from non-consolidated companies,
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.
Adjusted income
(iii)
Operating income, net operating income, or net income excluding the
effect of adjustment items described below.
Capital employed
(iv)
Non-current assets and working capital, at replacement cost, net of
deferred income taxes and non-current liabilities.
(v)
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.
Performance indicators excluding the adjustment items, such as
adjusted income and ROACE are meant to facilitate the analysis of
the financial performance and the comparison of income between
periods.
Adjustment items
Adjustment items include:
Special items
(i)
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.
The inventory valuation effect
(ii)
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 main 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.
Effect of changes in fair value
(iii)
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.
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.
8
REGISTRATION DOCUMENT 2017
247
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 3
A)
Information by business segment
For the year ended December 31, 2017
(M$)
Exploration &
Production
Gas,
Renewables
& Power
Refining &
Chemicals
Marketing &
Services Corporate
Intercompany
Total
Non-Group sales
Intersegment sales
Excise taxes
REVENUES FROM SALES
Operating expenses
Depreciation, depletion and impairment
of tangible assets and mineral interests
OPERATING INCOME
Net income (loss) from equity affiliates
and other items
Tax on net operating income
NET OPERATING INCOME
Net cost of net debt
Non-controlling interests
NET INCOME – GROUP SHARE
8,477
22,837
-
31,314
(14,672)
(13,850)
2,792
1,546
(2,233)
2,105
12,854
1,180
-
14,034
75,505
26,844
(3,008)
99,341
74,634
857
(19,386)
56,105
23
374
-
397
- 171,493
(52,092)
-
-
(22,394)
(52,092) 149,099
(13,828)
(94,097)
(53,629)
(1,107)
52,092 (125,241)
(482)
(276)
31
(140)
(385)
(1,074)
4,170
2,979
(944)
6,205
(657)
1,819
497
(561)
1,755
(40)
(750)
54
540
(156)
-
-
-
-
-
(16,103)
7,755
5,107
(3,338)
9,524
(1,225)
332
8,631
For the year ended December 31, 2017
(adjustments)(a)
(M$)
Exploration &
Production
Gas,
Renewables
& Power
Refining &
Chemicals
Marketing &
Services Corporate
Intercompany
Non-Group sales
Intersegment sales
Excise taxes
REVENUES FROM SALES
Operating expenses
Depreciation, depletion and impairment
of tangible assets and mineral interests
Operating income(b)
Net income (loss) from equity affiliates
and other items
Tax on net operating income
Net operating income(b)
Net cost of net debt
Non-controlling interests
NET INCOME – GROUP SHARE
-
-
-
-
(119)
(4,308)
(4,427)
(328)
875
(3,880)
(20)
-
-
(20)
(389)
(291)
(700)
(116)
(54)
(870)
-
-
-
-
167
(53)
114
2,177
124
2,415
-
-
-
-
(11)
(10)
(21)
102
(2)
79
-
-
-
-
(64)
-
(64)
-
(114)
(178)
-
-
-
-
-
-
-
-
-
-
Total
(20)
-
-
(20)
(416)
(4,662)
(5,098)
1,835
829
(2,434)
(29)
516
(1,947)
(a)
(b)
Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
Of which inventory valuation effect
On operating income
On net operating income
-
-
-
-
344
298
13
(3)
-
-
248
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 3
–
Notes to the Consolidated Financial Statements
For the year ended December 31, 2017
(adjusted)
(M$)
Exploration &
Production
Gas,
Renewables
& Power
Refining &
Chemicals
Marketing &
Services Corporate
Intercompany
Total
Non-Group sales
Intersegment sales
Excise taxes
REVENUES FROM SALES
Operating expenses
Depreciation, depletion and impairment
of tangible assets and mineral interests
ADJUSTED OPERATING INCOME
Net income (loss) from equity affiliates
and other items
Tax on net operating income
ADJUSTED NET OPERATING INCOME
Net cost of net debt
Non-controlling interests
ADJUSTED NET INCOME – GROUP SHARE
8,477
22,837
-
31,314
(14,553)
(9,542)
7,219
1,874
(3,108)
5,985
12,874
1,180
-
14,054
75,505
26,844
(3,008)
99,341
74,634
857
(19,386)
56,105
23
374
-
397
- 171,513
(52,092)
-
-
(22,394)
(52,092)
149,119
(13,439)
(94,264)
(53,618)
(1,043)
52,092 (124,825)
(191)
424
147
(86)
485
(1,021)
4,056
802
(1,068)
3,790
(647)
1,840
395
(559)
1,676
(40)
(686)
54
654
22
-
-
-
-
-
(11,441)
12,853
3,272
(4,167)
11,958
(1,196)
(184)
10,578
For the year ended December 31, 2017
(M$)
Exploration &
Production
Gas,
Renewables
& Power
Refining &
Chemicals
Marketing &
Services Corporate
Intercompany
Total
Total expenditures
Total divestments
Cash flow from operating activities
Balance sheet as of December 31, 2017
Property, plant and equipment,
intangible assets, net
Investments & loans in equity affiliates
Other non-current assets
Working capital
12,802
1,918
11,459
103,639
16,820
6,975
3,224
Provisions and other non-current liabilities
(24,212)
797
73
993
2,873
835
1,709
123
(848)
Assets and liabilities classified
as held for sale
1,475
-
CAPITAL EMPLOYED (BALANCE SHEET)
107,921
4,692
Less inventory valuation effect
-
-
1,734
2,820
7,440
10,820
4,010
677
876
1,457
413
2,130
6,253
438
1,060
792
(3,839)
(1,544)
-
12,544
(1,499)
166
7,165
(236)
106
40
297
399
-
496
(3,650)
(106)
-
(2,861)
1
CAPITAL EMPLOYED (BUSINESS
SEGMENT INFORMATION)
107,921
4,692
11,045
6,929
(2,860)
ROACE as a percentage
6%
10%
33%
26%
-
-
-
-
16,896
5,264
22,319
- 123,984
-
-
-
-
-
22,103
10,917
1,365
(30,549)
1,641
- 129,461
-
(1,734)
- 127,727
-
9%
8
REGISTRATION DOCUMENT 2017
249
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 3
For the year ended December 31, 2016
(M$)
Exploration &
Production
Gas,
Renewables
& Power
Refining &
Chemicals
Marketing &
Services Corporate
Intercompany
Total
Non-Group sales
Intersegment sales
Excise taxes
REVENUES FROM SALES
Operating expenses
Depreciation, depletion and impairment
of tangible assets and mineral interests
OPERATING INCOME
Net income (loss) from equity affiliates
and other items
Tax on net operating income
NET OPERATING INCOME
Net cost of net debt
Non-controlling interests
NET INCOME – GROUP SHARE
7,629
17,759
-
25,388
(14,236)
(11,583)
(431)
1,375
401
1,345
10,124
1,009
-
65,632
21,467
(3,544)
11,133
83,555
66,351
744
(18,274)
48,821
7
307
-
314
- 149,743
(41,286)
-
-
(21,818)
(41,286) 127,925
(10,993)
(77,562)
(46,432)
(1,006)
41,286 (108,943)
(301)
(161)
71
(4)
(94)
(1,002)
4,991
779
(1,244)
4,526
(600)
1,789
170
(541)
1,418
(37)
(729)
426
164
(139)
-
-
-
-
-
(13,523)
5,459
2,821
(1,224)
7,056
(850)
(10)
6,196
For the year ended December 31, 2016
(adjustments)(a)
(M$)
Exploration &
Production
Gas,
Renewables
& Power
Refining &
Chemicals
Marketing &
Services Corporate
Intercompany
Non-Group sales
Intersegment sales
Excise taxes
REVENUES FROM SALES
Operating expenses
Depreciation, depletion and impairment
of tangible assets and mineral interests
Operating income(b)
Net income (loss) from equity affiliates
and other items
Tax on net operating income
Net operating income(b)
Net cost of net debt
Non-controlling interests
NET INCOME – GROUP SHARE
-
-
-
-
(691)
(2,089)
(2,780)
(200)
1,108
(1,872)
(231)
-
-
(231)
(79)
(139)
(449)
(135)
51
(533)
-
-
-
-
625
-
625
(93)
(201)
331
-
-
-
-
(136)
(1)
(137)
(40)
36
(141)
-
-
-
-
-
-
-
(4)
1
(3)
-
-
-
-
-
-
-
-
-
-
Total
(231)
-
-
(231)
(281)
(2,229)
(2,741)
(472)
995
(2,218)
(23)
150
(2,091)
(a)
(b)
Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
Of which inventory valuation effect
On operating income
On net operating income
-
-
-
-
695
500
(43)
(13)
-
-
250
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 3
–
Notes to the Consolidated Financial Statements
For the year ended December 31, 2016
(adjusted)
(M$)
Exploration &
Production
Gas,
Renewables
& Power
Refining &
Chemicals
Marketing &
Services Corporate
Intercompany
Total
Non-Group sales
Intersegment sales
Excise taxes
REVENUES FROM SALES
Operating expenses
Depreciation, depletion and impairment
of tangible assets and mineral interests
ADJUSTED OPERATING INCOME
Net income (loss) from equity affiliates
and other items
Tax on net operating income
ADJUSTED NET OPERATING INCOME
Net cost of net debt
Non-controlling interests
AJUSTED NET INCOME – GROUP SHARE
7,629
17,759
-
25,388
(13,545)
(9,494)
2,349
1,575
(707)
3,217
10,355
1,009
-
65,632
21,467
(3,544)
11,364
83,555
66,351
744
(18,274)
48,821
7
307
-
314
- 149,974
(41,286)
-
-
(21,818)
(41,286) 128,156
(10,914)
(78,187)
(46,296)
(1,006)
41,286 (108,662)
(162)
288
206
(55)
439
(1,002)
4,366
872
(1,043)
4,195
(599)
1,926
210
(577)
1,559
(37)
(729)
430
163
(136)
-
-
-
-
-
(11,294)
8,200
3,293
(2,219)
9,274
(827)
(160)
8,287
For the year ended December 31, 2016
(M$)
Exploration &
Production
Gas,
Renewables
& Power
Refining &
Chemicals
Marketing &
Services Corporate
Intercompany
Total
Total expenditures
Total divestments
Cash flow from operating activities
Balance sheet as of December 31, 2016
Property, plant and equipment,
intangible assets, net
Investments & loans in equity affiliates
Other non-current assets
Working capital
16,085
2,187
9,010
109,617
15,853
6,835
1,451
Provisions and other non-current liabilities
(26,139)
Assets and liabilities classified
as held for sale
-
CAPITAL EMPLOYED (BALANCE SHEET)
107,617
Less inventory valuation effect
-
1,221
166
538
2,834
883
1,222
869
(832)
-
4,976
-
1,861
88
4,585
9,293
3,303
568
2,641
(3,569)
446
12,682
(1,064)
1,245
424
1,754
5,225
537
962
701
(1,330)
118
12
634
364
-
57
(3,314)
218
-
-
6,095
(2,675)
(211)
3
Capital Employed
(business segment information)
107,617
4,976
11,618
5,884
(2,672)
ROACE as a percentage
3%
9%
38%
27%
-
-
-
-
-
-
-
-
-
-
20,530
2,877
16,521
127,333
20,576
9,644
2,348
(31,652)
446
- 128,695
-
(1,272)
- 127,423
-
7%
8
REGISTRATION DOCUMENT 2017
251
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 3
For the year ended December 31, 2015
(M$)
Exploration &
Production
Gas,
Renewables
& Power
Refining &
Chemicals
Marketing &
Services Corporate
Intercompany
Total
Non-Group sales
Intersegment sales
Excise taxes
REVENUES FROM SALES
Operating expenses
Depreciation, depletion and impairment
of tangible assets and mineral interests
OPERATING INCOME
Net income (loss) from equity affiliates
and other items
Tax on net operating income
NET OPERATING INCOME
Net cost of net debt
Non-controlling interests
NET INCOME – GROUP SHARE
10,297
18,419
-
28,716
(15,725)
(15,660)
(2,669)
1,944
(361)
(1,086)
9,149
1,246
-
10,395
70,623
26,794
(4,107)
93,310
75,282
911
(17,829)
58,364
(10,265)
(87,674)
(56,065)
(307)
(177)
(75)
19
(233)
(1,092)
4,544
1,724
(1,106)
5,162
(634)
1,665
467
(537)
1,595
6
218
-
224
(866)
(27)
(669)
558
172
61
- 165,357
(47,588)
-
-
(21,936)
(47,588) 143,421
47,588 (123,007)
-
-
-
-
-
(17,720)
2,694
4,618
(1,813)
5,499
(713)
301
5,087
For the year ended December 31, 2015
(adjustments)(a)
(M$)
Exploration &
Production
Gas,
Renewables
& Power
Refining &
Chemicals
Marketing
& Services Corporate
Intercompany
Non-Group sales
Intersegment sales
Excise taxes
REVENUES FROM SALES
Operating expenses
Depreciation, depletion and impairment
of tangible assets and mineral interests
OPERATING INCOME(b)
Net income (loss) from equity affiliates
and other items
Tax on net operating income
NET OPERATING INCOME(b)
Net cost of net debt
Non-controlling interests
NET INCOME – GROUP SHARE
-
-
-
-
(559)
(6,591)
(7,150)
(273)
2,007
(5,416)
(519)
-
-
(519)
(38)
(192)
(749)
(184)
133
(800)
-
-
-
-
-
-
-
-
(1,035)
(283)
(70)
(1,105)
1,165
263
323
(24)
(307)
224
87
4
-
-
-
-
-
-
-
(19)
7
(12)
-
-
-
-
-
-
-
-
-
-
Total
(519)
-
-
(519)
(1,915)
(6,877)
(9,311)
913
2,497
(5,901)
(11)
481
(5,431)
(a)
(b)
Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
Of which inventory valuation effect
On operating income
On net operating income
-
-
-
-
(859)
(590)
(254)
(169)
-
-
252
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 3
–
Notes to the Consolidated Financial Statements
For the year ended December 31, 2015
(adjusted)
(M$)
Exploration &
Production
Gas,
Renewables
& Power
Refining &
Chemicals
Marketing &
Services Corporate
Intercompany
Total
Non-Group sales
Intersegment sales
Excise taxes
REVENUES FROM SALES
Operating expenses
Depreciation, depletion and impairment
of tangible assets and mineral interests
ADJUSTED OPERATING INCOME
Net income (loss) from equity affiliates
and other items
Tax on net operating income
ADJUSTED NET OPERATING INCOME
Net cost of net debt
Non-controlling interests
ADJUSTED NET INCOME – GROUP SHARE
10,297
18,419
-
28,716
(15,166)
(9,069)
4,481
2,217
(2,368)
4,330
9,668
1,246
-
10,914
70,623
26,794
(4,107)
93,310
75,282
911
(17,829)
58,364
(10,227)
(86,639)
(55,782)
(115)
572
109
(114)
567
(1,022)
5,649
559
(1,369)
4,839
(610)
1,972
243
(624)
1,591
6
218
-
224
(866)
(27)
(669)
577
165
73
- 165,876
(47,588)
-
-
(21,936)
(47,588) 143,940
47,588 (121,092)
-
-
-
-
-
(10,843)
12,005
3,705
(4,310)
11,400
(702)
(180)
10,518
For the year ended December 31, 2015
(M$)
Exploration &
Production
Gas,
Renewables
& Power
Refining &
Chemicals
Marketing &
Services Corporate
Intercompany
Total
Total expenditures
Total divestments
Cash flow from operating activities
Balance sheet as of December 31, 2015
Property, plant and equipment, intangible
assets, net
Investments & loans in equity affiliates
Other non-current assets
Working capital
24,233
2,880
11,567
108,204
14,711
7,230
885
Provisions and other non-current liabilities
(27,720)
588
418
(384)
1,248
1,126
1,245
1,363
(643)
1,875
3,494
6,435
9,317
3,075
640
1,828
(3,784)
Assets and liabilities classified
as held for sale
482
-
-
CAPITAL EMPLOYED (BALANCE SHEET)
103,791
4,340
11,076
Less inventory valuation effect
-
-
(622)
1,267
767
2,323
4,989
472
964
675
(1,339)
344
6,105
(230)
70
25
5
309
-
(501)
(2,975)
(150)
-
(3,317)
-
Capital Employed
(business segment information)
103,791
4,340
10,454
5,875
(3,317)
ROACE as a percentage
4%
13%
40%
25%
-
-
-
-
28,033
7,584
19,946
- 124,067
-
-
-
-
-
19,384
9,578
1,776
(33,636)
826
- 121,995
-
(852)
- 121,143
-
9%
8
REGISTRATION DOCUMENT 2017
253
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 3
B)
Reconciliation of the information by business segment with Consolidated Financial Statements
The table below presents the impact of adjustment items on the consolidated statement of income:
For the year ended December 31, 2017
(M$)
Sales
Excise taxes
Revenues from sales
Purchases, net of inventory variation
Other operating expenses
Exploration costs
Depreciation, depletion and impairment of tangible assets
and mineral interests
Other income
Other expense
Financial interest on debt
Financial income and expense from cash & cash equivalents
Cost of net debt
Other financial income
Other financial expense
Net income (loss) from equity affiliates
Income taxes
CONSOLIDATED NET INCOME
Group share
Non-controlling interests
Adjusted
Adjustments(a)
Consolidated
statement of income
171,513
(22,394)
149,119
(99,534)
(24,427)
(864)
(11,441)
772
(389)
(1,367)
(138)
(1,505)
957
(642)
2,574
(3,858)
10,762
10,578
184
(20)
-
(20)
123
(539)
-
(4,662)
3,039
(645)
(29)
-
(29)
-
-
(559)
829
(2,463)
(1,947)
(516)
171,493
(22,394)
149,099
(99,411)
(24,966)
(864)
(16,103)
3,811
(1,034)
(1,396)
(138)
(1,534)
957
(642)
2,015
(3,029)
8,299
8,631
(332)
(a)
Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
For the year ended December 31, 2016
(M$)
Sales
Excise taxes
Revenues from sales
Purchases, net of inventory variation
Other operating expenses
Exploration costs
Depreciation, depletion and impairment of tangible assets
and mineral interests
Other income
Other expense
Financial interest on debt
Financial income and expense from cash & cash equivalents
Cost of net debt
Other financial income
Other financial expense
Net income (loss) from equity affiliates
Income taxes
CONSOLIDATED NET INCOME
Group share
Non-controlling interests
Adjusted
Adjustments(a)
Consolidated
statement of income
149,974
(21,818)
128,156
(83,916)
(23,832)
(914)
(11,294)
964
(537)
(1,085)
4
(1,081)
971
(636)
2,531
(1,965)
8,447
8,287
160
(231)
-
(231)
539
(470)
(350)
(2,229)
335
(490)
(23)
-
(23)
-
-
(317)
995
(2,241)
(2,091)
(150)
149,743
(21,818)
127,925
(83,377)
(24,302)
(1,264)
(13,523)
1,299
(1,027)
(1,108)
4
(1,104)
971
(636)
2,214
(970)
6,206
6,196
10
(a)
Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
254
REGISTRATION DOCUMENT 2017
For the year ended December 31, 2015
(M$)
Sales
Excise taxes
Revenues from sales
Purchases, net of inventory variation
Other operating expenses
Exploration costs
Depreciation, depletion and impairment of tangible assets and
mineral interests
Other income
Other expense
Financial interest on debt
Financial income and expense from cash & cash equivalents
Cost of net debt
Other financial income
Other financial expense
Net income (loss) from equity affiliates
Income taxes
CONSOLIDATED NET INCOME
Group share
Non-controlling interests
CONSOLIDATED FINANCIAL STATEMENTS
Note 3
–
Notes to the Consolidated Financial Statements
Adjusted
Adjustments(a)
Consolidated
statement of income
165,876
(21,936)
143,940
(95,558)
(23,984)
(1,550)
(10,843)
1,468
(405)
(956)
94
(862)
882
(654)
2,414
(4,150)
10,698
10,518
180
(519)
-
(519)
(1,113)
(361)
(441)
(6,877)
2,138
(1,172)
(11)
-
(11)
-
-
(53)
2,497
(5,912)
(5,431)
(481)
165,357
(21,936)
143,421
(96,671)
(24,345)
(1,991)
(17,720)
3,606
(1,577)
(967)
94
(873)
882
(654)
2,361
(1,653)
4,786
5,087
(301)
(a)
Adjustments include special items, inventory valuation effect and the effect of changes in fair value.
C)
Additional information on adjustment items
The main adjustment items for 2017 are the following:
1)
2)
The line “Gains (losses) on disposals of assets” includes the
2017 gains and losses on disposals, mainly, in the Refining &
Chemicals segment with the sale of Atotech for an amount of
$2,139 million;
3)
line
“Asset
impairment charges” amounting
The
to
$(4,662) million in operating income and $(3,884) million in net
income Group share includes non-current assets impairment
charges recorded in 2017. Impairment testing methodology and
asset impairment charges recorded during the year are detailed
in the paragraph D of Note 3;
“Other elements” amount to $(724) million in operating income
and $(715) million in net income, Group share and especially
include a provision for future expenses related to an “agreement
on
in France
($(201) million in operating income and $(132) million in net
income, Group share) and the impact of the tax rate reform in
the US ($(97) million in net income, Group share).
from work
retirement”
transition
the
to
8
Adjustments to operating income
For the year ended December 31, 2017
(M$)
Exploration &
Production
Gas,
Renewables &
Power
Refining &
Chemicals
Marketing &
Services
Corporate
Total
Inventory valuation effect
Effect of changes in fair value
Restructuring charges
Asset impairment charges
Other items
TOTAL
-
-
(42)
(4,308)
(77)
(4,427)
-
(20)
-
(291)
(389)
(700)
344
-
(4)
(53)
(173)
114
13
-
(3)
(10)
(21)
(21)
-
-
-
-
(64)
(64)
357
(20)
(49)
(4,662)
(724)
(5,098)
REGISTRATION DOCUMENT 2017
255
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 3
Adjustments to net income, Group share
For the year ended December 31, 2017
(M$)
Exploration &
Production
Gas,
Renewables &
Power
Refining &
Chemicals
Marketing &
Services
Corporate
Total
Inventory valuation effect
Effect of changes in fair value
Restructuring charges
Asset impairment charges
Gains (losses) on disposals of assets
Other items
TOTAL
Adjustments to operating income
-
-
(11)
(3,583)
188
(287)
(3,693)
-
(16)
(11)
(238)
-
(293)
(558)
295
-
(42)
(53)
2,139
73
2,412
(13)
-
(2)
(10)
125
(30)
70
-
-
-
-
-
(178)
(178)
282
(16)
(66)
(3,884)
2,452
(715)
(1,947)
For the year ended December 31, 2016
(M$)
Exploration &
Production
Gas,
Renewables &
Power
Refining &
Chemicals
Marketing &
Services
Corporate
Total
Inventory valuation effect
Effect of changes in fair value
Restructuring charges
Asset impairment charges
Other items
TOTAL
-
-
(19)
(2,089)
(672)
(2,780)
-
(4)
(18)
(139)
(288)
(449)
695
-
-
-
(70)
625
(43)
-
-
(1)
(93)
(137)
-
-
-
-
-
-
652
(4)
(37)
(2,229)
(1,123)
(2,741)
Adjustments to net income, Group share
For the year ended December 31, 2016
(M$)
Exploration &
Production
Gas,
Renewables &
Power
Refining &
Chemicals
Marketing &
Services
Corporate
Total
Inventory valuation effect
Effect of changes in fair value
Restructuring charges
Asset impairment charges
Gains (losses) on disposals of assets
Other items
TOTAL
Adjustments to operating income
-
-
(4)
(1,867)
287
(293)
(1,877)
-
(3)
(28)
(131)
5
(237)
(394)
498
-
-
(78)
-
(91)
329
(19)
-
-
(18)
(25)
(84)
(146)
-
-
-
(3)
-
-
(3)
For the year ended December 31, 2015
(M$)
Exploration &
Production
Gas,
Renewables &
Power
Refining &
Chemicals
Marketing &
Services
Corporate
Inventory valuation effect
Effect of changes in fair value
Restructuring charges
Asset impairment charges
Other items
TOTAL
-
-
(43)
(6,591)
(516)
(7,150)
-
(16)
-
(192)
(541)
(749)
(859)
-
-
(70)
(176)
(1,105)
(254)
-
(5)
(24)
(24)
(307)
-
-
-
-
-
-
Adjustments to net income, Group share
For the year ended December 31, 2015
(M$)
Exploration &
Production
Gas,
Renewables &
Power
Refining &
Chemicals
Marketing &
Services
Corporate
Inventory valuation effect
Effect of changes in fair value
Restructuring charges
Asset impairment charges
Gains (losses) on disposals of assets
Other items
TOTAL
-
-
(10)
(5,057)
162
(148)
(5,053)
-
(9)
(5)
(270)
-
(421)
(705)
(590)
-
(52)
(59)
1,288
(264)
323
(157)
-
(5)
(49)
360
(133)
16
256
REGISTRATION DOCUMENT 2017
-
-
-
(12)
-
-
(12)
(5,431)
479
(3)
(32)
(2,097)
267
(705)
(2,091)
Total
(1,113)
(16)
(48)
(6,877)
(1,257)
(9,311)
Total
(747)
(9)
(72)
(5,447)
1,810
(966)
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 set 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
the
discounted expected
flows, based upon
future cash
For the financial year 2017, asset impairments were recorded for an
amount of $4,662 million in operating income and $3,884 million in
net income, Group share. These impairments were qualified as
adjustments items of the operating income and net income, Group
share.
CONSOLIDATED FINANCIAL STATEMENTS
Note 3
–
Notes to the Consolidated Financial Statements
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.
Agreement support the IEA estimates in this scenario. The
Sustainable Development Scenario
the
measures needed to achieve the energy-related goals set in the
2030 Agenda for Sustainable Development adopted in 2015 by the
UN members.
into account
takes
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:
(cid:142)
(cid:142)
the future cash flows were determined using the assumptions
included in the 2018 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 data on global energy demand from
the “World Energy Outlook” issued by IEA in 2016 and on its own
supply assessments, determines the oil & gas prices scenarios
based on assumptions about the evolution of core indicators of the
Upstream activity (demand for oil & gas products in different
markets,
fields,
forecasts, decline
changes in oil & gas reserves and supply by area and by nature of
oil & gas products), of the Downstream activity (changes in refining
capacity and demand for petroleum products) and by integrating
the climate issue.
in production
investment
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.
The IEA 2017 World Energy Outlook anticipates three scenarios
(New Policies Scenario (NPS), Current Policies Scenario (CPS) and
Sustainable Development Scenario
these
scenarios, the Group uses as main references the New Policies
Scenario
IEA) and Sustainable
Development Scenario (which replaces the scenario 450 or 2 ° of
WEO 2016).
(central scenario of
(SDS)). Among
the
The New Policies Scenario takes into account the measures
already implemented by countries in the energy field as well as the
effects of the policies announced by these within the framework of
officially communicated objectives. In particular, the Nationally
Determined Contributions (NDC) decided under the Paris Climate
Based on the same economic and demographic assumptions,
the NPS sees a significant increase in demand for oil and gas
until 2025 and then a slower growth until 2040 (despite a
significant penetration of electric vehicles revised up in 2017),
while the SDS sees declining demand after 2025 for oil and after
2030 for gas due to substitution efforts and efficiency gains
assumed by the IEA. At the same time, ample shale gas and oil
resources in North America (whose estimates have been revised
upwards between 2016 and 2017) mitigate the impact of
demand growth during the first half of the forecast. Despite the
revisions that led the IEA to correct its prices slightly downward
versus 2016, the Group is comforted in its price assumptions by
the IEA’s main scenarios which take into account climate
policies.
8
In this context:
–
–
for crude oil, the price level used for 2018 to determine the
recoverable value of CGUs in 2017 amounts to 50 dollars per
barrel of Brent. This price rises progressively from 2018 to reach
80 dollars in 2021 and inflates after 2023,
for gas, the Group estimates that due to new market dynamics
that emerged in 2017, in particular a strong increase in supply,
prices will strengthen like those of crude oil prices. The price
level used in determining the recoverable value of concerned
CGUs for 2018 amounts to $5 per million BTU for the NBP price
(Europe). It reaches $7 per million BTU in 2020, and will inflate
after 2023;
(cid:142)
(cid:142)
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 CGUs. They are prepared post-tax and
take into account specific risks related to the CGUs’ 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 2016 and 2015. 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 16% in 2017.
REGISTRATION DOCUMENT 2017
257
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 3
The CGUs for the Exploration & Production 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 2017, impairments of assets were recognized over
CGUs of the Exploration & Production segment for an impact of
$4,308 million in operating income and $3,583 million in net income,
Group share. These impairments were mainly recognized on the
following assets:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
Fort Hills project assets, in Canada – following the operator
announcement of the increase of the project’s costs – for an
amount of $1,544 million in operating income and $1,312 million in
net income, Group share;
gas assets related to the GLNG project in Australia for an amount
of $509 million in operating income and $381 million in net income,
Group share;
oil assets in Congo for an amount of $1,392 million in operating
income and $1,220 million in net income, Group share;
gas assets in the United Kingdom for $451 million in operating
income and $271 million in net income, Group share;
and other assets in the United States and in Norway.
As for the sensitivity analysis:
(cid:142)
(cid:142)
(cid:142)
a decrease by one point in the discount rate would have a positive
impact of approximately $0.5 billion in operating income and
$0.3 billion in net income, Group share;
an increase by one point in the discount rate would have an
additional negative impact of approximately $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
$4.9 billion in operating income and $4.2 billion in net income,
Group share.
The most sensitive assets would be:
(cid:142)
(cid:142)
the assets already impaired in 2017 or before (impact of
approximately $2.8 billion in operating income and $2.7 billion in
net income, Group share), especially GLNG in Australia and assets
in Congo;
other assets (impact of approximately $2.1 billion in operating
income and $1.5 billion in net income, Group share), especially in
Canada.
The CGUs of the Gas, Renewables & Power segment are
subsidiaries or groups of subsidiaries organized by activity or
geographical area. In year 2017, the Group recorded impairments on
CGUs in the Gas, Renewables & Power segment for $291 million in
operating income and $238 million in net income, Group share.
These impairments mainly concern SunPower in the United States
given the depressed economic environment of the solar activity.
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 2017, the Group recorded impairments on
CGUs in the Refining and Chemicals segment for $53 million in net
income, Group share. 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. In year 2017
no significant impairment has been recorded.
For year 2016, the Group recorded impairments in Exploration &
Production, Gas, Renewables & Power and Marketing & Services
segments 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.
In 2015, the Group recognized impairments of assets in the
Exploration & Production, Refining & Chemicals and Marketing &
Services segments for an impact of $6,877 million in operating
income and of $5,447 income and net income, Group share. These
impairments were qualified as adjustments items of the operating
income and net income, Group share.
No significant reversal of impairment was accounted for in respect of
the years 2015, 2016 and 2017.
258
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 4
–
Notes to the Consolidated Financial Statements
NOTE 4
Segment Information by geographical area
(M$)
For the year ended December 31, 2017
Non-Group sales
Property, plant and equipment, intangible assets, net
Capital expenditures
For the year ended December 31, 2016
Non-Group sales
Property, plant and equipment, intangible assets, net
Capital expenditures
For the year ended December 31, 2015
Non-Group sales
Property, plant and equipment, intangible assets, net
Capital expenditures
France
39,032
6,397
1,193
33,472
5,361
1,835
36,536
4,123
980
Rest of
Europe
North
America
Africa
Rest of the
world
83,255
18,260
2,805
71,551
20,647
3,842
79,463
22,354
4,783
16,889
18,469
2,916
15,383
19,154
2,825
14,857
17,169
3,493
17,581
42,849
5,030
15,294
45,032
6,859
17,612
43,536
9,154
14,736
38,009
4,952
14,043
37,139
5,169
16,889
36,885
9,623
Total
171,493
123,984
16,896
149,743
127,333
20,530
165,357
124,067
28,033
8
REGISTRATION DOCUMENT 2017
259
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 5
NOTE 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 “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.
transactions within
Certain
(contracts
the
involving quantities that are purchased from third parties then
resold to third parties) are shown at their net value in sales.
trading activities
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
the
interest
development of
the
project-entities and land rights are irrevocably sold.
land rights). The revenue associated with
recognized when
these projects
in
is
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.
260
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 5
–
Notes to the Consolidated Financial Statements
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
2017
(99,411)
(864)
(24,966)
280
66
2016
(83,377)
(1,264)
(24,302)
369
(58)
2015
(96,671)
(1,991)
(24,345)
858
(86)
OPERATING EXPENSES
(125,241)
(108,943)
(123,007)
(a)
(b)
(c)
Includes taxes paid on oil and gas production in the Exploration & Production segment, amongst others royalties.
The Group values under/over lifting at market value.
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 IAS 38 are met.
Research and development costs incurred by the Group in 2017 and
booked in operating expenses amount to $912 million ($1,050 million
in 2016 and $980 million in 2015), corresponding to 0.53% of the
sales.
The staff dedicated in 2017 to these research and development
activities are estimated at 4,132 people (4,939 in 2016 and 4,248 in
2015).
Amortization, depreciation and impairment of tangible assets and mineral interests
5.3
The amortization, depreciation and impairment of tangible assets and mineral interests are detailed as follows:
For the year ended December 31,
(M$)
Depreciation and impairment of tangible assets
Amortization and impairment of mineral assets
TOTAL
Items related to balance sheet
5.4
5.4.1
Working capital
Inventories
◗
ACCOUNTING POLICIES
Inventories are measured in the Consolidated Financial Statements
at the lower of historical cost or market value. Cost prices for
petroleum and petrochemical products are determined according
to the FIFO (First-In, First-Out) method or weighted-average cost
method and other
the
weighted-average cost method.
are measured using
inventories
In addition stocks held for trading are measured at fair value less
costs of sale.
2017
(14,782)
(1,321)
(16,103)
2016
(12,615)
(908)
(13,523)
2015
(15,727)
(1,993)
(17,720)
8
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 prices of refined and chemicals products.
Refining & Chemicals
Marketing & Services
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.
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.).
REGISTRATION DOCUMENT 2017
261
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 5
General administrative costs and financing costs are excluded
from the cost price of refined products.
Product inventories 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:
(cid:142)
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;
(cid:142)
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;
(cid:142)
(cid:142)
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:
(cid:142)
(cid:142)
(cid:142)
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.
Gross value
Valuation
allowance
2,658
5,828
1,089
4,320
3,632
17,527
Gross value
2,215
4,577
877
4,613
3,936
16,218
-
(36)
(58)
-
(913)
(1,007)
Valuation
allowance
(7)
(30)
(58)
-
(876)
(971)
Gross value
Valuation
allowance
1,788
4,177
989
3,168
4,062
(59)
(130)
(72)
-
(807)
Net value
2,658
5,792
1,031
4,320
2,719
16,520
Net value
2,208
4,547
819
4,613
3,060
15,247
Net value
1,729
4,047
917
3,168
3,255
14,184
(1,068)
13,116
As of December 31, 2017
(M$)
Crude oil and natural gas
Refined products
Chemicals products
Trading inventories
Other inventories
TOTAL
As of December 31, 2016
(M$)
Crude oil and natural gas
Refined products
Chemicals products
Trading inventories
Other inventories
TOTAL
As of December 31, 2015
(M$)
Crude oil and natural gas
Refined products
Chemicals products
Trading inventories
Other inventories
TOTAL
262
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 5
–
Notes to the Consolidated Financial Statements
Changes in the valuation allowance on inventories are as follows:
For the year ended December 31,
(M$)
2017
2016
2015
Valuation
allowance as of
January 1,
Increase (net)
Currency translation
adjustment and
other variations
Valuation
allowance as of
December 31
(971)
(1,068)
(1,395)
9
41
256
(45)
56
71
(1,007)
(971)
(1,068)
5.4.2
Accounts receivable and other current assets
As of December 31, 2017
(M$)
Accounts receivable
Recoverable taxes
Other operating receivables
Prepaid expenses
Other current assets
Other current assets
As of December 31, 2016
(M$)
Accounts receivable
Recoverable taxes
Other operating receivables
Prepaid expenses
Other current assets
Other current assets
As of December 31, 2015
(M$)
Accounts receivable
Recoverable taxes
Other operating receivables
Prepaid expenses
Other current assets
Other current assets
Gross value Valuation allowance
Net value
15,469
4,029
9,797
786
59
14,671
(576)
-
(461)
-
-
(461)
14,893
4,029
9,336
786
59
14,210
Gross value Valuation allowance
Net value
12,809
3,180
10,618
1,399
38
15,235
(596)
-
(400)
-
-
(400)
12,213
3,180
10,218
1,399
38
14,835
Gross value Valuation allowance
Net value
11,173
3,328
11,335
1,554
52
16,269
(544)
-
(426)
-
-
(426)
8
10,629
3,328
10,909
1,554
52
15,843
Changes in the valuation allowance on “Accounts receivable” and “Other current assets” are as follows:
For the year ended December 31,
(M$)
Accounts receivable
2017
2016
2015
Other current assets
2017
2016
2015
Valuation
allowance as of
January 1,
Increase (net)
Currency translation
adjustments and
other variations
Valuation
allowance as of
December 31
(596)
(544)
(602)
(400)
(426)
(367)
53
(17)
5
(58)
33
(79)
(33)
(35)
53
(3)
(7)
20
(576)
(596)
(544)
(461)
(400)
(426)
REGISTRATION DOCUMENT 2017
263
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 5
As of December 31, 2017, the net portion of the overdue receivables
included in “Accounts receivable” and “Other current assets” was
$3,156 million, of which $1,682 million was due in less than 90 days,
$235 million was due between 90 days and 6 months, $350 million
was due between 6 and 12 months and $889 million was due after
12 months.
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 $816 million was due after
12 months.
5.4.3
Other creditors and accrued liabilities
As of December 31,
(M$)
Accruals and deferred income
Payable to States (including taxes and duties)
Payroll
Other operating liabilities
TOTAL
2017
419
5,786
1,439
10,135
17,779
2016
424
5,455
1,225
9,616
2015
342
5,363
1,265
9,914
16,720
16,884
As of December 31, 2017, the heading “Other operating liabilities”
includes mainly the second quarterly interim dividend for the fiscal
year 2017 for $1,883 million, which was paid in January 2018 and
the third quarterly interim dividend for the fiscal year 2017 for
$1,912 million, which will be paid in April 2018.
As of December 31, 2016, the heading “Other operating liabilities”
included 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 was 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
$1,584 million, which was paid in April 2016.
Items related to the cash flow statement
5.5
Cash flow from operating activities
◗
ACCOUNTING POLICIES
The Consolidated Statement of Cash Flows prepared
in
currencies other than dollar has been translated into dollars using
the exchange rate on the transaction date or the average
exchange rate for the period. Currency translation differences
arising from the translation of monetary assets and liabilities
denominated in foreign currency into dollars using the closing
exchange rates are shown in the Consolidated Statement of Cash
Flows under
the
Consolidated Statement of Cash Flows will not agree with the
figures derived from the Consolidated Balance Sheet.
“Effect of exchange
rates”. Therefore,
The following table gives additional information on cash paid or received in the cash flow from operating activities:
Detail of interest, taxes and dividends
For the year ended December 31,
(M$)
Interests paid
Interests received
Income tax paid(a)
Dividends received
(a)
These amounts include taxes paid in kind under production-sharing contracts in Exploration & Production.
2017
(1,305)
82
(4,013)
2,219
2016
(1,028)
90
(2,892)
1,702
2015
(862)
113
(4,937)
2,309
264
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Notes 5, 6
–
Notes to the Consolidated Financial Statements
Detail of changes in working capital
For the year ended December 31,
(M$)
Inventories
Accounts receivable
Other current assets
Accounts payable
Other creditors and accrued liabilities
NET AMOUNT, DECREASE (INCREASE)
Detail of changes in provisions and deferred taxes
As of December 31,
(M$)
Accruals
Deferred taxes
TOTAL
NOTE 6
Other items from operating activities
6.1
Other income and other expense
For the year ended December 31,
(M$)
Gains on disposal of assets
Foreign exchange gains
Other
OTHER INCOME
Losses on disposal of assets
Foreign exchange losses
Amortization of other intangible assets (excl. mineral interests)
Other
OTHER EXPENSE
2017
(476)
(1,897)
1,274
2,339
(413)
827
2017
3
(387)
(384)
2017
2,784
785
242
3,811
(186)
-
(192)
(656)
2016
(2,475)
(1,916)
185
2,546
541
(1,119)
2016
382
(1,941)
(1,559)
2016
479
548
272
1,299
(216)
-
(344)
(467)
2015
888
4,153
(726)
(2,235)
(397)
1,683
2015
336
(2,899)
(2,563)
2015
2,658
663
285
3,606
(199)
(102)
(332)
(944)
8
(1,034)
(1,027)
(1,577)
Other income
In 2017, gains on disposal of assets are mainly related to the sale of
Atotech in the Refining & Chemicals segment and to the sale of
assets in Gabon in the Exploration & Production segment.
In 2016, gains on disposal of assets mainly related to sales of assets
in United-Kingdom in the Exploration & Production segment.
In 2015, gains on disposal of assets mainly related to sales of assets
in Nigeria in the Exploration & Production 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.
Other expense
In 2017, losses on disposals are mainly related to the sale of 15%
interests in the Gina Krog field in Norway. 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 $172 million and $64 million of restructuring charges in the
Exploration & Production, Gas Renewables & Power and Refining &
Chemicals segments.
In 2016, the loss on disposals mainly related to the sale of 20% of
interests in Kharyaga in Russia. The heading “Other” mainly consisted
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
consisted 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
Exploration & Production, Refining & Chemicals and Marketing &
Services segments as well as $162 million for expenses relating to a
litigation in Qatar.
REGISTRATION DOCUMENT 2017
265
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 6
6.2
Other financial income and expense
As of December 31,
(M$)
Dividend income on non-consolidated subsidiaries
Capitalized financial expenses
Other
OTHER FINANCIAL INCOME
Accretion of asset retirement obligations
Other
OTHER FINANCIAL EXPENSE
6.3
Other non-current assets
As of December 31, 2017
(M$)
Loans and advances(a)
Other non-current financial assets related to operational activities
Other
TOTAL
As of December 31, 2016
(M$)
Loans and advances(a)
Other non-current financial assets related to operational activities
Other
TOTAL
As of December 31, 2015
(M$)
Loans and advances(a)
Other non-current financial assets related to operational activities
Other
TOTAL
(a)
Excluding loans to equity affiliates.
2017
167
460
330
957
(544)
(98)
(642)
Gross value
3,237
937
169
4,343
Gross value
3,334
1,069
26
4,429
Gross value
3,687
891
57
4,635
2016
170
477
324
971
(523)
(113)
(636)
Valuation
allowance
(359)
-
-
(359)
Valuation
allowance
(286)
-
-
(286)
Valuation
allowance
(280)
-
-
(280)
2015
267
364
251
882
(513)
(141)
(654)
Net value
2,878
937
169
3,984
Net value
3,048
1,069
26
4,143
Net value
3,407
891
57
4,355
Changes in the valuation allowance on loans and advances are detailed as follows:
For the year ended December 31,
(M$)
2017
2016
2015
Valuation
allowance as
of January 1,
(286)
(280)
(672)
Increases
Decreases
Currency
translation
adjustment and
other variations
Valuation
allowance as of
December 31,
(50)
(15)
(62)
11
7
393
(34)
2
61
(359)
(286)
(280)
266
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 7
–
Notes to the Consolidated Financial Statements
NOTE 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.
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.
planned (wells, seismic or significant studies), whether costs
are being incurred for development studies and whether the
Group
for governmental or other third-party
authorization of a proposed project, or availability of capacity
on an existing transport or processing facility.
is waiting
Costs of exploratory wells not meeting these conditions are
charged to exploration costs.
Proved mineral
unit-of-production method based on proved reserves.
depreciated
interests
are
using
the
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:
Goodwill and other intangible assets excluding mineral
interests
(cid:142)
(cid:142)
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
whether additional exploratory works are under way or firmly
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, 2017
(M$)
Goodwill
Proved mineral interests
Unproved mineral interests
Other intangible assets
TOTAL INTANGIBLE ASSETS
As of December 31, 2016
(M$)
Goodwill
Proved mineral interests
Unproved mineral interests
Other intangible assets
TOTAL INTANGIBLE ASSETS
Cost
2,442
13,081
11,686
4,831
32,040
Cost
2,159
13,347
11,582
4,182
31,270
Amortization and
impairment
(1,015)
(7,674)
(5,324)
(3,440)
8
Net
1,427
5,407
6,362
1,391
(17,453)
14,587
Amortization and
impairment
(1,002)
(6,985)
(5,130)
(2,791)
Net
1,157
6,362
6,452
1,391
(15,908)
15,362
REGISTRATION DOCUMENT 2017
267
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 7
As of December 31, 2015
(M$)
Goodwill
Proved mineral interests
Unproved mineral interests
Other intangible assets
TOTAL INTANGIBLE ASSETS
Cost
1,597
12,800
11,751
4,059
30,207
Amortization and
impairment
(971)
(6,436)
(5,082)
(3,169)
Net
626
6,364
6,669
890
(15,658)
14,549
Change in net intangible assets is analyzed in the following table:
(M$)
2017
2016
2015
Net amount as of
January 1
Increases
Disposals
Amortization and
impairment
15,362
14,549
14,682
404
1,039
2,750
(23)
(117)
(343)
(1,512)
(1,252)
(2,324)
Currency
translation
adjustment
234
(187)
(200)
Other
122
1,330
(16)
Net amount as of
December 31
14,587
15,362
14,549
In 2017, the heading “Amortization and impairment” includes the
impact of exceptional asset
for an amount of
$785 million (see Note 3 paragraph D to the Consolidated Financial
Statements).
impairments
In 2016, the heading “Amortization and impairment” included the
accounting 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 corresponded 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 $1,482 million (see Note 3 paragraph D to the Consolidated
Financial Statements).
A summary of changes in the carrying amount of goodwill by business segment for the year ended December 31, 2017 is as follows:
(M$)
Exploration & Production
Gas, Renewables & Power
Refining & Chemicals
Marketing & Services
Corporate
TOTAL
Net goodwill as of
January 1, 2017
Increases
Impairments
Net goodwill as of
December 31, 2017
Other
-
556
462
113
26
1,157
-
16
-
146
-
162
-
-
-
-
-
-
-
78
29
(3)
4
108
-
650
491
256
30
1,427
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.
268
REGISTRATION DOCUMENT 2017
progressive well
With respect to phased development projects or projects subject
fixed
production
to
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.
start-up,
the
With respect
the unit-of-
to production sharing contracts,
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).
transportation and processing assets are
Hydrocarbon
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:
(cid:142)
(cid:142)
if the project benefits from a specific funding, the capitalization of
borrowing costs is based on the borrowing rate;
Buildings
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.
As of December 31, 2017
(M$)
Exploration & Production properties
Proved properties
Unproved properties
Work in progress
SUBTOTAL
Other property, plant and equipment
Land
Machinery, plant and equipment (including transportation equipment)
Buildings
Work in progress
Other
SUBTOTAL
TOTAL PROPERTY, PLANT AND EQUIPMENT
As of December 31, 2016
(M$)
Exploration & Production properties
Proved properties
Unproved properties
Work in progress
SUBTOTAL
Other property, plant and equipment
Land
Machinery, plant and equipment (including transportation equipment)
Buildings
Work in progress
Other
SUBTOTAL
TOTAL PROPERTY, PLANT AND EQUIPMENT
CONSOLIDATED FINANCIAL STATEMENTS
Note 7
–
Notes to the Consolidated Financial Statements
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
two consecutive major
turnarounds.
the period of
time between
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
3-12 years
5-20 years
10-15 years
10-30 years
10-50 years
Depreciation and
impairment
Cost
174,336
1,980
30,286
206,602
1,809
33,554
9,203
2,310
9,463
56,339
262,941
(112,113)
(152)
(2,537)
(114,802)
(652)
(25,774)
(5,859)
(1)
(6,456)
(38,742)
(153,544)
Depreciation and
impairment
Cost
163,860
1,996
33,860
199,716
1,578
28,620
7,977
2,780
8,296
49,251
248,967
(100,959)
-
(2,075)
(103,034)
(567)
(22,940)
(4,979)
(10)
(5,466)
(33,962)
(136,996)
Net
62,223
1,828
27,749
91,800
1,157
7,780
3,344
2,309
3,007
17,597
109,397
8
Net
62,901
1,996
31,785
96,682
1,011
5,680
2,998
2,770
2,830
15,289
111,971
REGISTRATION DOCUMENT 2017
269
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 7
As of December 31, 2015
(M$)
Exploration & Production properties
Proved properties
Unproved properties
Work in progress
SUBTOTAL
Other property, plant and equipment
Land
Machinery, plant and equipment (including transportation equipment)
Buildings
Work in progress
Other
SUBTOTAL
TOTAL PROPERTY, PLANT AND EQUIPMENT
Depreciation and
impairment
Cost
(94,843)
-
(2,284)
(97,127)
(581)
(22,975)
(5,018)
(128)
(5,668)
153,530
2,423
36,246
192,199
1,551
28,723
7,655
2,705
8,182
48,816
241,015
Net
58,687
2,423
33,962
95,072
970
5,748
2,637
2,577
2,514
(34,370)
(131,497)
14,446
109,518
Change in net property, plant and equipment is analyzed in the following table:
(M$)
2017
2016
2015
Net amount as of
January 1
Increases
Disposals
Depreciation and
impairment
111,971
109,518
106,876
13,363
17,067
22,382
(1,117)
(1,869)
(1,842)
(15,099)
(13,171)
(17,010)
Currency
translation
adjustment
Other
Net amount as of
December 31
2,302
(2,023)
(1,057)
(3,449)
1,483
2,561
109,397
111,971
109,518
In 2017, the heading “Disposals” mainly includes the impact of sales
in the Exploration & Production segment (sale of interests in Gina
Krog in Norway, and in Gabon).
In 2017, the heading “Depreciation and impairment” includes the
impact of impairments of assets recognized for an amount of
$3,901 million (see Note 3 paragraph D to the Consolidated Financial
Statements).
In 2017, the heading “Other” principally corresponds to the impact of
$855 million of finance lease contracts, the decrease of the asset for
site restitution for an amount of $(773) million and the reclassification
of assets classified in accordance with IFRS 5 “Non-current assets
held for sale and discontinued operations” for $(2,604) million, related
to the Martin Linge field in Norway.
In 2016, the heading “Disposals” mainly included the impact of sales
in the Exploration & Production 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” included the
impact of impairments of assets recognized for an amount of
$1,780 million (see Note 3 paragraph D to the Consolidated Financial
Statements).
for $751 million, to the reclassification of assets
In 2016, the heading “Other” principally corresponded to the effect of
the entries in the consolidation scope (including SAFT Group and
Lampiris)
in
accordance with IFRS 5 “Non-current assets held for sale and
discontinued operations” for $(365) million and the reversal of the
for
reclassification under
$627 million corresponding to disposals.
IFRS 5 as at December 31, 2015
In 2015, the heading “Disposals” mainly included the impact of sales
in the Exploration & Production 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
$1,128 million, primarily related to the Usan field in Nigeria.
Property, plant and equipment presented above include the following amounts for facilities and equipment under finance leases:
As of December 31, 2017
(M$)
Machinery, plant and equipment
Buildings
Other
TOTAL
Cost
1,140
124
378
1,642
Depreciation and
impairment
(468)
(57)
(58)
(583)
Net
672
67
320
1,059
270
REGISTRATION DOCUMENT 2017
As of December 31, 2016
(M$)
Machinery, plant and equipment
Buildings
Other
TOTAL
As of December 31, 2015
(M$)
Machinery, plant and equipment
Buildings
Other
TOTAL
CONSOLIDATED FINANCIAL STATEMENTS
Notes 7, 8
–
Notes to the Consolidated Financial Statements
Cost
426
109
179
714
Cost
426
95
175
696
Depreciation and
impairment
(391)
(38)
(41)
(470)
Depreciation and
impairment
(384)
(38)
(31)
(453)
Net
35
71
138
244
Net
42
57
144
243
NOTE 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.
Unrealized gains on transactions between the Group and its
equity-accounted entities are eliminated to the extent of the
Group’s interest in the equity accounted entity.
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
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.
the entity, participation
The contribution of equity affiliates in the consolidated balance sheet, consolidated statement of income and consolidated statement of
comprehensive income is presented below:
8
Equity value
As of December 31,
(M$)
Total Associates
Total Joint ventures
TOTAL
Loans
TOTAL
Profit/(loss)
As of December 31,
(M$)
Total Associates
Total Joint ventures
TOTAL
Other comprehensive income
As of December 31,
(M$)
Total Associates
Total Joint ventures
TOTAL
2017
12,177
4,791
16,968
5,135
22,103
2017
1,694
321
2,015
2017
(801)
124
(677)
2016
11,819
4,039
15,858
4,718
20,576
2016
1,530
684
2,214
2016
847
88
935
2015
11,255
3,751
15,006
4,378
19,384
2015
2,004
357
2,361
2015
139
(19)
120
REGISTRATION DOCUMENT 2017
271
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 8
A)
Information related to associates
Information (100% gross) related to significant associates is as follows:
Exploration & Production
(M$)
Non current assets
Current assets
TOTAL ASSETS
Shareholder’s equity
Non current liabilities
Current liabilities
TOTAL LIABILITIES
Revenue from sales
NET INCOME
OTHER COMPREHENSIVE
INCOME
% owned
Revaluation identifiable assets
on equity affiliates
Equity value
Profit/(loss)
Share of Other Comprehensive
Income, net amount
Dividends paid to the Group
Novatek(a)
Liquefaction entities
PetroCedeño
2017
14,232
3,404
17,636
12,842
3,187
1,607
17,636
10,022
1,950
2016
13,981
2,409
16,390
11,015
3,574
1,801
2015
9,768
2,237
12,005
6,745
3,014
2,246
16,390
12,005
7,779
3,137
7,130
1,755
580
1,651
18.90%
18.90%
(1,682)
18.90%
1,804
4,231
263
(491)
128
1,811
3,893
494
808
111
1,580
2,855
229
(135)
102
2017
29,656
7,875
37,531
22,804
10,291
4,436
37,531
20,401
5,781
-
6
3,768
735
(194)
672
2016
31,044
5,790
36,834
22,886
10,839
3,109
36,834
15,557
1,472
-
-
3,755
147
23
479
2015
33,294
7,427
40,721
25,941
9,373
5,407
40,721
22,731
7,720
-
-
4,183
978
156
1,072
2017
5,551
4,291
9,842
5,178
13
4,651
9,842
1,708
204
2016
5,515
4,166
9,681
5,515
10
4,156
9,681
1,398
277
2015
6,916
3,437
10,353
5,538
10
4,805
10,353
1,840
399
-
-
-
30.32%
30.32%
30.32%
-
1,570
62
-
164
-
1,672
84
-
91
-
1,679
121
-
139
(a)
Information includes the best Group’s estimates of results at the date of TOTAL’s financial statements.
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 $6,721 million as at December 31, 2017. Novatek is
consolidated by the equity method. TOTAL considers, in fact, that it
exercises significant influence particularly via its representation on the
Board of Directors of Novatek and its interest in the major project of
Yamal LNG.
The Group is not aware of significant restrictions limiting the ability of
OAO Novatek to transfer funds to its shareholder, be it under the
form of dividends, repayment of advances or loans made.
The Group’s interests in associates operating liquefaction plants are
combined. The amounts include investments in: Nigeria LNG
(15.00%), Angola LNG (13.60%), Yemen LNG (39.62%), Qatar
Liquefied Gas Company Limited (Qatargas) (10.00%), Qatar Liquefied
Gas Company Limited II (16.70%), Oman LNG (5.54%), and Abu
Dhabi Gas Lc (5.00%).
PetroCedeño produces and upgrades extra-heavy crude oil in
Venezuela.
272
REGISTRATION DOCUMENT 2017
Refining & Chemicals
(M$)
Non current assets
Current assets
TOTAL ASSETS
Shareholder’s equity
Non current liabilities
Current liabilities
TOTAL LIABILITIES
Revenue from sales
NET INCOME
OTHER COMPREHENSIVE INCOME
CONSOLIDATED FINANCIAL STATEMENTS
Note 8
–
Notes to the Consolidated Financial Statements
Saudi Aramco Total
Refining & Petrochemicals
Qatar
2017
11,601
2,021
13,622
2,424
9,029
2,169
13,622
9,049
222
20
2016
12,056
1,531
13,587
2,302
9,466
1,819
13,587
7,134
289
2
2015
12,536
960
13,496
2,011
9,873
1,612
13,496
8,032
339
-
2017
4,405
1,696
6,101
3,200
1,895
1,006
6,101
7,388
490
80
-
814
190
(12)
201
2016
4,152
1,404
5,556
3,393
1,349
814
5,556
4,665
615
(11)
-
832
211
6
292
2015
2,530
968
3,498
2,803
356
339
3,498
1,823
631
2
-
818
208
28
248
% owned
37.50%
37.50%
37.50%
Revaluation identifiable assets on equity affiliates
Equity value
Profit/(loss)
Share of Other Comprehensive Income, net amount
Dividends paid to the Group
-
909
83
(82)
45
-
863
108
22
-
-
754
127
77
-
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%).
8
REGISTRATION DOCUMENT 2017
273
8
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
TOTAL ASSETS
Shareholder’s equity
Other non current liabilities
Non current financial debts
Other current liabilities
Current financial debts
TOTAL LIABILITIES
Revenue from sales
Depreciation and depletion of tangible assets and
mineral interests
Interest income
Interest expense
Income taxes
NET INCOME
OTHER COMPREHENSIVE INCOME
% owned
Revaluation identifiable assets on equity affiliates
Equity value
Profit/(loss)
Share of Other Comprehensive Income, net amount
Dividends paid to the Group
Liquefaction entities
(Exploration & Production)
Hanwha Total Petrochemicals
(Refining & Chemicals)
2017
59,422
966
1,258
2016
47,014
922
703
2015
35,341
455
501
61,646
48,639
36,297
4,037
504
55,566
1,539
-
2,961
327
43,980
1,371
-
1,840
349
32,996
1,112
-
61,646
48,639
36,297
37
(10)
16
(15)
338
(1,730)
97
905
2,049
(348)
29
-
52
(12)
5
(7)
(29)
449
166
905
1,555
88
50
-
32
(14)
10
(10)
(81)
279
61
965
1,355
55
18
-
2017
3,989
2,258
283
6,530
3,612
148
1,078
1,144
548
6,530
8,565
2016
3,454
1,506
473
5,433
2,947
120
1,105
764
497
5,433
7,057
(264)
(259)
-
(3)
(369)
973
398
-
(3)
(338)
930
(79)
2015
3,543
1,501
240
5,284
2,609
107
1,388
713
467
5,284
7,307
(247)
-
(64)
(192)
514
(186)
50.00%
50.00%
50.00%
-
1,806
486
170
353
-
1,474
465
22
256
-
1,305
257
(75)
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.
274
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 8
–
Notes to the Consolidated Financial Statements
C)
Other equity consolidated affiliates
In Group share, the main aggregated financial items in equity consolidated affiliates including assets held for sale, which have not been
presented individually are as follows:
As of December 31,
(M$)
Non Current assets
Current assets
TOTAL ASSETS
Shareholder’s equity
Non current liabilities
Current liabilities
TOTAL LIABILITIES
2017
2016
2015
Associates
Joint
ventures
Associates
Joint
ventures
Associates
Joint
ventures
2,908
1,156
4,064
885
2,171
1,008
4,064
2,428
1,150
3,578
1,102
1,281
1,195
3,578
3,047
1,365
4,412
804
2,369
1,239
4,412
1,971
825
2,796
1,010
985
801
2,796
3,491
1,440
4,931
966
2,612
1,353
4,931
2017
2016
2015
For the year ended December 31,
(M$)
Associates
Revenues from sales
NET INCOME
Share of other comprehensive income
items
Equity value
Dividends paid to the Group
2,226
361
(22)
885
328
Joint
ventures
4,358
183
(75)
936
147
Associates
Joint
ventures
Associates
2,603
486
(12)
804
308
3,181
131
16
1,010
30
2,661
341
13
966
442
2,005
860
2,865
1,091
951
823
2,865
Joint
ventures
3,362
45
38
1,091
22
8.2
Other investments
◗
ACCOUNTING POLICIES
These assets are classified as financial assets available for sale
and therefore measured at their fair value.
long-lasting impairment loss, a loss is recorded in the statement of
income. This impairment is irreversible.
For securities traded in active markets, this fair value is equal to
the market price. Changes in fair value are recorded in other
comprehensive income. If there is any evidence of a significant or
For other securities, if the fair value is not reliably determinable, the
securities are recorded at their historical value.
8
As of December 31, 2017
(M$)
Equity securities publicly traded in active markets
Total equity securities publicly traded in active
markets(a)
BBPP
BTC Limited
DUNKERQUE LNG SAS
Tellurian Investments Inc.
Total Eren Holding SA(b)
Greenflex(b)
Other equity securities (unit value below $50 million)
TOTAL OTHER EQUITY SECURITIES(a)
OTHER INVESTMENTS
Carrying amount
Unrealized gain (loss)
Balance sheet value
8
8
62
55
144
207
285
76
848
1,677
1,685
42
42
-
-
-
-
-
-
-
-
42
50
50
62
55
144
207
285
76
848
1,677
1,727
REGISTRATION DOCUMENT 2017
275
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 8
As of December 31, 2016
(M$)
Areva
Other equity securities publicly traded in active markets
Total equity securities publicly traded in active markets(a)
BBPP
BTC Limited
DUNKERQUE LNG SAS
Other equity securities (unit value below $50 million)
TOTAL OTHER EQUITY SECURITIES(a)
OTHER INVESTMENTS
As of December 31, 2015
(M$)
Areva
Other equity securities publicly traded in active markets
Total equity securities publicly traded in active markets(a)
BBPP
BTC Limited
DUNKERQUE LNG SAS
Other equity securities (unit value below $50 million)
TOTAL OTHER EQUITY SECURITIES(a)
OTHER INVESTMENTS
Carrying amount
Unrealized gain
(loss)
Balance sheet
value
17
8
25
62
121
133
763
1,079
1,104
-
29
29
-
-
-
-
-
29
17
37
54
62
121
133
763
1,079
1,133
Carrying amount
Unrealized gain
(loss)
Balance sheet
value
22
9
31
62
121
116
883
1,182
1,213
-
28
28
-
-
-
-
-
28
22
37
59
62
121
116
883
1,182
1,241
(a)
(b)
Including cumulative impairments of $2,029 million in 2017, $1,633 million in 2016 and $949 million in 2015.
Acquistion made in the fourth quarter 2017 and to be consolidated in 2018.
Related parties
8.3
The main transactions and receivable and payable balances with related parties (principally non-consolidated subsidiaries and equity
consolidated affiliates) are detailed as follows:
As of December 31,
(M$)
Balance sheet
Receivables
Debtors and other debtors
Loans (excl. loans to equity affiliates)
Payables
Creditors and other creditors
Debts
For the year ended December 31,
(M$)
Statement of income
Sales
Purchases
Financial income
Financial expense
2017
2016
2015
492
63
1,161
2
492
65
897
6
533
71
835
10
2017
2016
2015
3,407
(7,354)
6
(9)
2,270
(4,882)
6
-
3,062
(6,999)
6
-
276
REGISTRATION DOCUMENT 2017
Compensation for the administration and management bodies
8.4
indirect compensation
The aggregate amount of direct and
accounted by the French and foreign affiliates of the Company, for all
executive officers of TOTAL as of December 31, 2017 and for the
members of the Board of Directors who are employees of the Group,
is detailed below.
For the year ended December 31,
(M$)
Number of people
Direct or indirect compensation
Pension expenses(a)
Share-based payments expense (IFRS 2)(b)
CONSOLIDATED FINANCIAL STATEMENTS
Notes 8, 9
–
Notes to the Consolidated Financial Statements
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), the Deputy Chief Financial Officer of the Group
and the Group Treasurer.
2017
15
15.6
10.8
6.5
2016
14
13.4
6.1
5.3
2015
14
12.8
3.9
3.5
(a)
(b)
The change in the pension expenses in 2017 relates basically to the agreement on the transition from work to retirement in France for which the global impact has been
booked in the Group’s accounts as of June 30, 2017.
The benefits provided for executive officers of the Group and the members of the Board of Directors, employees of the Group, include severance to be paid on
retirement, supplementary pension schemes and insurance plans, which represent $119.7 million provisioned as of December 31, 2017 (against $104.7 million as of
December 31, 2016 and $96.7 million as of December 31, 2015).
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 $1.44 million in 2017 (against $1.22 million in 2016
and $1.34 million in 2015).
NOTE 9
Shareholders’ equity and share-based payments
9.1
Shareholders’ equity
Number of TOTAL shares
There is only one category of shares of TOTAL S.A., and the shares
have a par value of €2.50, as of December 31, 2017. Shares may be
held in either bearer or registered form.
Double voting rights are assigned to shares that are fully-paid and
held in registered form 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, in
the event of an increase in share capital by incorporation of reserves,
profits or premiums, to registered shares granted for free to a
shareholder due to shares already held that are entitled to this 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.
The authorized share capital amounts to 3,434,245,369 shares as of
December 31, 2017 compared to 3,449,682,749 shares as of
December 31, 2016 and 3,467,448,093 as of December 31, 2015.
As of December 31, 2017, the share capital of TOTAL S.A. amounted
to €6,322,474,040.
Share cancellation
TOTAL S.A. did not cancel any shares in 2017.
8
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
indirectly controlled
back off-market
subsidiaries. Following this transaction the Group affiliates no longer
hold treasury shares. This buyback of shares had no impact on the
Consolidated Financial Statements of TOTAL S.A., the fully-diluted
weighted-average shares and the earnings per share.
its 100%
four of
from
TOTAL S.A. did not cancel any shares in 2015.
REGISTRATION DOCUMENT 2017
277
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 9
Variation of the share capital
AS OF DECEMBER 31, 2014
Shares issued in connection with: Capital increase reserved for employees
Capital increase within stock dividend (2014 remainder and first interim
dividend for 2015)
Exercise of TOTAL share subscription options
AS OF DECEMBER 31, 2015(a)
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)
Exercise of TOTAL share subscription options
Cancellation of treasury shares
AS OF DECEMBER 31, 2016(b)
Shares issued in connection with: Capital increase reserved for employees
Capital increase within stock dividend (second interim dividend for 2016,
third interim dividend for 2016, 2016 remainder and first interim dividend
for 2017)
Exercise of TOTAL share subscription options
AS OF DECEMBER 31, 2017(c)
(a)
(b)
(c)
Including 113,967,758 treasury shares deducted from consolidated shareholders’ equity.
Including 10,587,822 treasury shares deducted from consolidated shareholders’ equity.
Including 8,376,756 treasury shares deducted from consolidated shareholders’ equity.
2,385,267,525
10,479,410
42,841,342
1,469,606
2,440,057,883
88,401,329
2,237,918
(100,331,268)
2,430,365,862
9,532,190
86,442,256
2,649,308
2,528,989,616
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 26, 2017, decided to proceed with a capital increase
reserved for employees and retirees of the Company that included a
classic offering and a
the
employees’ choice, within the
limit of 18 million shares with
immediate dividend rights. The Board of Directors has delegated all
powers to the Chairman and Chief Executive Officer to determine the
opening and closing of the subscription period and the subscription
leveraged offering depending on
price. This capital increase, to be open in 2018, is expected to be
completed before the General Meeting of 2018.
In 2017, TOTAL S.A. proceeded with a capital increase reserved for
employees and retirees of the Company which resulted in the
subscription of 9,350,220 shares with a par value of €2.50 at a unit
price of €38.10 and of the issuance of 181,970 shares with a par
value of €2.50 granted as free shares. The issuance of the shares
was acknowledged on April 26, 2017. Moreover, the Board of
Directors, during its meeting on April 26, 2017, based on the
twenty-fourth resolution of the Combined General Meeting of May 24,
2016, decided to grant 10,393 free shares to 2,086 beneficiaries
subject to a continued employment condition during the five-year
acquisition period that will end on April 26, 2022, as a deferred
contribution.
278
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 9
–
Notes to the Consolidated Financial Statements
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,
Number of treasury shares
Percentage of share capital
Of which shares allocated to TOTAL share grant plans for Group
employees
Of which shares intended to be allocated to new TOTAL share purchase
option plans or to new share grant plans
2017
2016
2015
8,376,756
10,587,822
13,636,490
0.33%
0.44%
0.56%
8,345,847
10,555,887
13,603,525
30,909
31,935
32,965
TOTAL shares held by Group subsidiaries
As of December 31,
Number of shares held by Group subsidiaries
Percentage of share capital
Of which shares held by a consolidated subsidiary, Total Nucléaire, 100%
indirectly controlled by TOTAL S.A.
Of which shares held by subsidiaries of Elf Aquitaine (Financière Valorgest,
Sogapar and Fingestval), 100% indirectly controlled by TOTAL S.A.
2017
2016
2015
-
-
-
-
-
-
-
-
100,331,268
4.11%
2,023,672
98,307,596
Paid-in surplus
In accordance with French law, the paid-in surplus corresponds to
premiums related to shares issuances, 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.
As of December 31, 2017, paid-in surplus relating to TOTAL S.A.
amounted to €32,882 million (€28,961 million as of December 31,
2016 and €30,265 million as of December 31, 2015).
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 $750 million as of
December 31, 2017 ($569 million as of December 31, 2016 and
$630 million as of December 31, 2015) with regards to additional
corporation tax to be applied on regulatory reserves so that they
become distributable.
8
REGISTRATION DOCUMENT 2017
279
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 9
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 for purposes of this calculation which also takes into
account the dilutive effect of stock options, share grants and
capital
increases with a subscription period closing after the end
of the fiscal year.
The weighted-average number of fully-diluted shares is calculated
in accordance with the treasury stock method provided for by
IAS 33. The proceeds, which would be recovered in the event of
an exercise of rights related to dilutive instruments, are presumed
to be a share buyback at the average market price over the
period. The number of shares thereby obtained leads to a
reduction in the total number of shares that would result from the
exercise of rights.
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:
NUMBER OF SHARES AS OF JANUARY 1,
Number of shares issued during the year (pro rated)
Exercise of TOTAL share subscription options
Exercise of TOTAL share purchase options
TOTAL performance shares
Capital increase reserved for employees
Capital increase within stock dividend
Buyback of treasury shares on December 15, 2016
Cancellation of treasury shares on December 15, 2016
2017
2016
2015
2,430,365,862
2,440,057,883
2,385,267,525
1,198,036
538,621
662,351
-
1,105,796
6,354,793
53,365,971
-
-
-
1,524,172
-
51,029,237
4,180,470
(4,180,470)
-
103,131
6,986,273
13,343,379
-
-
TOTAL shares held by TOTAL S.A. or by its subsidiaries and deducted from
shareholders’ equity
(10,587,822)
(113,967,758)
(111,324,719)
WEIGHTED-AVERAGE NUMBER OF SHARES
2,481,802,636
2,379,182,155
2,295,037,940
Dilutive effect
TOTAL share subscription and purchase options
TOTAL performance shares
Capital increase reserved for employees
727,864
10,238,411
1,987,502
630,474
9,058,264
843,043
1,168,644
7,647,690
581,268
WEIGHTED-AVERAGE NUMBER OF DILUTED SHARES
2,494,756,413
2,389,713,936
2,304,435,542
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 €2.97 per share for 2017 closing (€2.28 for 2016
closing). The fully-diluted earnings per share calculated by using the
same method is €2.96 per share for 2017 closing (€2.27 for 2016
closing).
Dividend
For the fiscal year 2017, TOTAL S.A. already paid two quarterly
interim dividends:
(cid:142)
payment of the first interim dividend for the fiscal year 2017 of €0.62
per share, decided by the Board of Directors on September 20,
2017 has been done in cash or in shares on October 12, 2017 (the
ex-dividend date was September 25, 2017). The number of shares
issued in lieu of the cash dividend was based on the dividend
amount divided by €41.12 per share, equal to the average Euronext
Paris opening price of the shares for the 20 trading days preceding
the Board of the Directors meeting on September 20, 2017 reduced
by the amount of the first interim dividend, with a 5% discount. On
October 12, 2017, 25,633,559 shares have been issued at a price of
€41.12 per share.
280
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 9
–
Notes to the Consolidated Financial Statements
(cid:142)
payment of the second interim dividend for the fiscal year 2017 of
€0.62 per share, decided by
the Board of Directors on
December 12, 2017 has been done in cash or in shares on
January 11, 2018 (the ex-dividend date was December 19, 2017).
The number of shares issued in lieu of the cash dividend was
based on the dividend amount divided by €46.55 per share, equal
to 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, without any
discount. On January 11, 2018, 7,087,904 shares have been
issued at a price of €46.55 per share.
The Board of Directors, during its October 26, 2017 meeting,
decided to set the third quarterly interim dividend for the fiscal year
2017 at €0.62 per share. This interim dividend will be paid in cash or
in shares on April 9, 2018 (the ex-dividend date will be March 19,
2018).
A resolution will be submitted at the Shareholders’ Meeting on
June 1, 2018 to pay a dividend of €2.48 per share for the 2017 fiscal
year, as a balance of €0.62 per share to be distributed after
deducting the three quarterly interim dividends of €0.62 per share
that will have already been paid.
Issuance of perpetual subordinated notes
The Group did not issue any perpetual subordinated notes in 2017.
In 2016, the Group issued three tranches of perpetual subordinated
notes in euros through TOTAL S.A.:
(cid:142)
(cid:142)
(cid:142)
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 euros through TOTAL S.A.:
(cid:142)
(cid:142)
deeply subordinated note 2.250% perpetual maturity callable after
6 years (€2,500 million);
deeply subordinated note 2.625% perpetual maturity callable 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, 2017, the amount of the perpetual deeply
subordinated note booked in the Group shareholders’ equity is
$10,328 million. The coupons attributable to the holders of these
securities are booked in deduction of the Group shareholders’ equity
for an amount of $302 million for fiscal year 2017 closing. The tax
saving due to these coupons is booked in the statement of income.
Other comprehensive income
Detail of other comprehensive income showing both items potentially reclassifiable and those not potentially reclassifiable from equity to net
income is presented in the table below:
For the year ended December 31,
(M$)
Actuarial gains and losses
Tax effect
Currency translation adjustment generated by the parent
company
SUB-TOTAL ITEMS NOT POTENTIALLY RECLASSIFIABLE
TO PROFIT & LOSS
Currency translation adjustment
–
–
Unrealized gain/(loss) of the period
Less gain/(loss) included in net income
Available for sale financial assets
–
–
Unrealized gain/(loss) of the period
Less gain/(loss) included in net income
Cash flow hedge
–
–
Unrealized gain/(loss) of the period
Less gain/(loss) included in net income
Share of other comprehensive income
of equity affiliates, net amount
–
–
Unrealized gain/(loss) of the period
Less gain/(loss) included in net income
Other
Tax effect
SUB-TOTAL ITEMS POTENTIALLY RECLASSIFIABLE TO
PROFIT & LOSS
TOTAL OTHER COMPREHENSIVE INCOME,
NET AMOUNT
2017
823
(390)
9,316
9,749
(2,578)
7
324
(677)
-
(100)
(3,024)
6,725
2016
(371)
55
(1,548)
(1,864)
(1,098)
4
239
935
1
(76)
5
(1,859)
(543)
555
4
-
186
(53)
933
(2)
2015
557
(278)
(7,268)
(6,989)
2,456
9
(185)
120
1
53
2,454
(4,535)
3,032
576
10
1
(390)
(205)
118
(2)
(2,408)
170
7
-
584
260
(655)
22
8
REGISTRATION DOCUMENT 2017
281
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 9
The currency translation adjustment by currency is detailed in the following table:
As of December 31, 2017
(M$)
Total
Euro
Pound
sterling
Ruble
Other
currencies
Currency translation adjustment generated by the parent
company
Currency translation adjustment
Currency translation adjustment of equity affiliates
TOTAL CURRENCY TRANSLATION ADJUSTMENT
RECOGNIZED IN COMPREHENSIVE INCOME
9,316
(2,578)
(730)
9,316
(3,275)
(1,099)
6,008
4,943
-
462
(25)
436
-
3
207
210
-
232
187
419
As of December 31, 2016
(M$)
Total
Euro
Pound
sterling
Ruble
Other
currencies
Currency translation adjustment generated by the parent
company
Currency translation adjustment
Currency translation adjustment of equity affiliates
TOTAL CURRENCY TRANSLATION ADJUSTMENT
RECOGNIZED IN COMPREHENSIVE INCOME
As of December 31, 2015
(M$)
Currency translation adjustment generated by the parent
company
Currency translation adjustment
Currency translation adjustment of equity affiliates
TOTAL CURRENCY TRANSLATION ADJUSTMENT
RECOGNIZED IN COMPREHENSIVE INCOME
(1,548)
(1,098)
890
(1,548)
(184)
223
-
(887)
54
(1,756)
(1,509)
(833)
Total
Euro
(7,268)
2,456
87
(7,268)
3,318
903
Pound
sterling
-
(267)
16
-
7
643
650
Ruble
-
(3)
(718)
-
(34)
(30)
(64)
Other
currencies
-
(592)
(114)
(4,725)
(3,047)
(251)
(721)
(706)
Tax effects relating to each component of other comprehensive income are as follows:
For the year ended December 31,
(M$)
Pre-tax
amount
Tax
effect
Net
amount
Pre-tax
amount
Tax
effect
Net
amount
Pre-tax
amount
Tax
effect
Net
amount
Actuarial gains and losses
823
(390)
433
(371)
55
(316)
557
(278)
279
2017
2016
2015
Currency translation adjustment generated
by the parent company
SUB-TOTAL ITEMS NOT POTENTIALLY
RECLASSIFIABLE TO PROFIT & LOSS
Currency translation adjustment
Available for sale financial assets
Cash flow hedge
Share of other comprehensive income of equity
affiliates, net amount
Other
SUB-TOTAL ITEMS POTENTIALLY
RECLASSIFIABLE TO PROFIT & LOSS
9,316
-
9,316
(1,548)
-
(1,548)
(7,268)
-
(7,268)
10,139
(390)
9,749
(1,919)
55
(1,864)
(6,711)
(278)
(6,989)
(2,578)
7
324
(677)
-
-
(3)
(97)
-
-
(2,578)
(1,098)
4
227
(677)
-
4
239
935
1
-
-
(76)
-
-
(2,924)
(100)
(3,024)
81
(76)
(1,098)
2,456
9
(185)
120
1
-
(5)
58
-
-
2,456
4
(127)
120
1
2,401
53
2,454
4
163
935
1
5
TOTAL OTHER COMPREHENSIVE INCOME
7,215 (490)
6,725
(1,838)
(21)
(1,859)
(4,310)
(225)
(4,535)
Non-controlling interests
As of December 31, 2017, no subsidiary has non-controlling interests that would be material to the Group financial statements.
282
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 9
–
Notes to the Consolidated Financial Statements
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”.
Date of the Shareholders’ Meeting
Date of the award(a)
5/11/2007
5/11/2007
5/11/2007
5/21/2010
5/21/2010
7/17/2007
10/9/2008
9/15/2009
9/14/2010
9/14/2011
2007 Plan
2008 Plan
2009 Plan
2010 Plan
2011 Plan
Total
Weighted
average Total
exercise price (€)
60.10
42.90
39.90
38.20
33.00
7/17/2015
10/9/2016
9/15/2017
9/14/2018
9/14/2019
5,847,965
3,215,884
3,011,269
3,701,218
859,075 16,635,411
-
(5,847,965)
-
-
-
-
-
-
-
-
-
(5,847,965)
(654,382)
(300,486)
(377,972)
(136,766)
(1,469,606)
2,561,502
2,710,783
3,323,246
722,309
9,317,840
-
(1,794,304)
-
-
-
-
-
-
-
(1,794,304)
(767,198)
(931,730)
(443,009)
(95,981)
(2,237,918)
Strike price
Expiry date
Number of options(b)
Existing options as of January 1,
2015
Granted
Cancelled(b)
Exercised
Existing options as of January 1,
2016
Granted
Cancelled(b)
Exercised
Existing options as of January 1,
2017
Granted
Cancelled(b)
Exercised
EXISTING OPTIONS AS OF
DECEMBER 31, 2017
-
-
-
-
-
-
-
-
-
-
1,779,053
2,880,237
626,328
5,285,618
-
(195,370)
-
-
-
-
-
(195,370)
(1,583,683)
(929,865)
(135,760)
(2,649,308)
-
-
-
-
-
-
1,950,372
490,568
2,440,940
37.15
8
46.85
-
60.10
40.16
39.58
-
42.90
40.30
38.16
-
39.90
38.95
(a)
(b)
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.
Out of the options canceled in 2015, 2016 and 2017, 5,847,965 options that were not exercised expired on July 17, 2015 due to the expiry of the 2007 plan,
1,794,304 options that were not exercised expired on October 9, 2016 due to the expiry of the 2008 plan and 195,370 options that were not exercised expired on
September 15, 2017 due to expiry of 2009 plan.
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.
REGISTRATION DOCUMENT 2017
283
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 9
B)
TOTAL performance share grants
Date of the Shareholders’ Meeting
5/13/2011
5/16/2014
5/16/2014
5/24/2016
5/24/2016
Date of the award
7/25/2013
7/29/2014
07/28/2015
7/27/2016
7/26/2017
2013 Plan
2014 Plan
2015 Plan
2016 Plan
2017 Plan
Total
Date of the final award (end of the vesting
period)
Transfer authorized as from
Grant date IFRS 2 fair value
Number of performance shares
7/26/2016
7/30/2017
07/29/2018
7/28/2019
7/27/2020
7/26/2018
7/30/2019
07/29/2020
7/29/2021
7/28/2022
€32.64
€44.66
€35.90
€35.37
€35.57
-
-
-
-
-
-
-
-
-
8,909,490
4,761,935
(52,290)
(105,340)
13,513,795
5,639,400
(1,371,506)
(3,048,894)
14,732,795
Outstanding as of January 1, 2015
4,434,460
4,475,030
-
Notified
Cancelled
Finally granted
-
(28,230)
(55,400)
-
4,761,935
(22,630)
(49,940)
(1,430)
-
Outstanding as of January 1, 2016
4,350,830
4,402,460
4,760,505
-
-
-
-
-
Notified
Cancelled(a)
Finally granted(a)
Outstanding as of January 1, 2017
Notified
Cancelled
Finally granted
OUTSTANDING AS OF DECEMBER 31, 2017
-
-
-
5,639,400
(1,303,506)
(3,047,324)
(37,100)
(29,170)
(860)
(600)
(1,730)
(110)
4,364,500
4,730,735
5,637,560
-
-
-
-
-
-
(2,157,820)
(2,206,680)
-
(31,480)
(1,950)
-
5,679,949
5,679,949
(29,050)
(1,410)
(910)
(2,219,260)
-
(2,210,040)
-
4,697,305
5,607,100
5,679,039 15,983,444
(a)
The number of performance shares finally granted in 2016 has been adjusted by 226 performance shares granted in 2017.
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, 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 following
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.
2017 Plan
The Board of Directors decided on July 26, 2017 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.
Depending on TOTAL S.A.’s ranking, a grant rate is determined each
year, for both criterion:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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.
The presence condition applies to all shares.
C)
SunPower plans
The performance conditions, each of them respectively representing
50% of the final grant rate, are as follows:
(cid:142)
(cid:142)
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 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.
(“PowerLight Plan”) and
SunPower has three stock incentive plans: the Third Amended and
Restated 2005 SunPower Corporation Stock Incentive Plan (“2005
Plan”), the PowerLight Corporation Common Stock Option and
the
Common Stock Purchase Plan
SunPower Corporation 2015 Omnibus Incentive Plan (“2015 Plan”).
The PowerLight Plan was assumed by SunPower by way of the
acquisition of PowerLight in fiscal 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
284
REGISTRATION DOCUMENT 2017
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 as 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 or the PowerLight Plan.
Outstanding awards granted under these plans continue to be
governed by their respective terms. As of December 31, 2017,
approximately 8.8 million shares were available for grant under the
2015 Plan.
Incentive stock options, nonstatutory 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 2005 Plan, 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
The following table summarizes SunPower’s restricted stock activities:
OUTSTANDING AS OF DECEMBER 28, 2014
Granted
Vested(b)
Forfeited
OUTSTANDING AS OF JANUARY 3, 2016
Granted
Vested(b)
Forfeited
OUTSTANDING AS OF JANUARY 1, 2017
Granted
Vested(b)
Forfeited
OUTSTANDING AS OF JANUARY 1, 2018
CONSOLIDATED FINANCIAL STATEMENTS
Note 9
–
Notes to the Consolidated Financial Statements
fiscal 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 2017, 2016 and 2015, SunPower
withheld 0.6 million, 1.0 million and 1.4 million shares, respectively, to
tax obligations. SunPower pays such
satisfy
withholding
taxing
in cash
authorities. Shares withheld reduce the number of shares outstanding
upon vesting.
the appropriate
the employees’
requirements
to
There were no options outstanding and exercisable as of
December 31, 2017 and 322 options exercised in fiscal year 2017.
The intrinsic value of options exercised in fiscal years 2017, 2016 and
2015 were $1.7 thousand, zero, and $1.0 million, respectively. There
were no stock options granted in fiscal years 2017, 2016 and 2015.
Restricted Stock Awards and Units
Shares
(in thousands)
Weighted-Average Grant Date Fair
Value Per Share (in $)(a)
6,555
2,695
(3,560)
(627)
5,063
4,978
(2,837)
(1,057)
6,147
4,863
(1,738)
(1,979)
7,293
18.88
29.77
15.31
22.99
26.68
18.81
23.47
26.30
21.85
6.76
25.87
18.15
21.85
8
(a)
(b)
SunPower estimates the fair value of the restricted stock unit awards as the stock price on the grant date.
Restricted stock awards and units vested include shares withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements.
REGISTRATION DOCUMENT 2017
285
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 9
D)
Share-based payment expense
Share-based payment expense before tax was broken down as follows:
As of December 31,
(M$)
Total restricted shares plans
SunPower plans
Capital increase reserved for employees
TOTAL
2017
135
31
16
182
2016
113
28
-
141
2015
71
78
30
179
In 2015, 2016 and 2017, no new TOTAL share subscription option plan has been decided.
During the year 2017, 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,
Date of the Board of Directors meeting that decided the issue
Subscription price (€)(a)
Share price at the reference date (€)(b)
Number of shares (in millions)
Risk free interest rate (%)(c)
Employees loan financing rate (%)(d)
Non transferability cost (% of the reference’s share price)
Expenses (M$)
2017
July 27, 2016
38.10
46.98
9.35
0.13
5.02
20.62
16.00
(a)
(b)
(c)
(d)
Average of the closing TOTAL share prices during the twenty trading days prior to the subscription period, after deduction of a 20% discount.
Share price on March 15, 2017, date on which the Chief Executive Officer set the subscription period.
Zero coupon Euro swap rate at 5 years.
The employees’ loan financing rate is based on a 5 year consumer’s credit rate.
286
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 10
–
Notes to the Consolidated Financial Statements
NOTE 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.
Defined benefit obligations are determined according to the
Projected Unit Method. Actuarial gains and losses may arise from
differences between
and projected
commitments (depending on new calculations or assumptions)
and between projected and actual return of plan assets. Such
gains and
the statement of
comprehensive income, with no possibility to subsequently recycle
them to the income statement.
losses are
recognized
valuation
actuarial
in
The past service cost is recorded immediately in the statement of
income, whether vested or unvested.
For defined contribution plans, expenses correspond to the
contributions paid.
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$)
Pension benefits liabilities
Other benefits liabilities
Restructuring reserves (early retirement plans)
TOTAL
Net liabilities relating to assets held for sale
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 $128 million
for defined
contribution plans in 2017 ($157 million in 2016 and $159 million in
2015).
As of June 30, 2017, an expense of $201 million in operating income
and $132 million in net income, Group share was recorded following
the signing of an agreement on the transition from professional
activity to retirement in France.
The Group’s main defined benefit pension plans are located in
France, the United Kingdom, the United States, Belgium and
Germany. Their main
the
country-specific regulatory environment, are the following:
characteristics, depending on
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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.
2017
2,877
705
153
3,735
-
2016
2,948
648
150
3,746
145
2015
2,926
627
221
3,774
3
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:
8
(cid:142)
(cid:142)
(cid:142)
(cid:142)
(cid:142)
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.
REGISTRATION DOCUMENT 2017
287
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 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,
(M$)
Change in benefit obligation
Pension benefits
Other benefits
2017
2016
2015
2017
2016
2015
Benefit obligation at beginning of year
12,164
12,473
14,297
648
Current service cost
Interest cost
Past service cost
Settlements
Plan participants’ contributions
Benefits paid
Actuarial losses/(gains)
Foreign currency translation and other
BENEFIT OBLIGATION AT YEAR-END
Of which plans entirely or partially funded
Of which plans not funded
Change in fair value of plan assets
263
320
239
(1)
7
(717)
(450)
1,047
12,872
12,140
732
251
373
(92)
-
8
(651)
762
(960)
12,164
11,376
788
271
402
(35)
(58)
8
(653)
(533)
(1,226)
12,473
11,742
731
Fair value of plan assets at beginning of year
(9,123)
(9,627)
(10,498)
Interest income
Actuarial losses/(gains)
Settlements
Plan participants’ contributions
Employer contributions
Benefits paid
Foreign currency translation and other
(256)
(344)
-
(7)
(171)
591
(895)
(307)
(428)
-
(8)
(130)
538
839
(318)
48
44
(8)
(311)
553
863
FAIR VALUE OF PLAN ASSETS AT YEAR-END
(10,205)
(9,123)
(9,627)
UNFUNDED STATUS
Asset ceiling
NET RECOGNIZED AMOUNT
Pension benefits and other benefits liabilities
Other non-current assets
Net benefit liabilities relating to assets held for sale
2,667
40
2,707
2,877
(170)
-
3,041
26
3,067
2,948
(26)
145
2,846
27
2,873
2,926
(56)
3
16
17
12
-
-
(27)
(36)
75
705
-
705
-
-
-
-
-
-
-
-
-
705
-
705
705
-
-
627
13
21
-
-
-
(30)
37
(20)
648
-
648
-
-
-
-
-
-
-
-
-
648
-
648
648
-
-
845
17
22
-
-
-
(32)
(71)
(154)
627
-
627
-
-
-
-
-
-
-
-
-
627
-
627
627
-
-
As of December 31, 2017, the contribution from the main geographical areas for the net pension liability in the balance sheet is: 57% for the
Euro area, 25% for the United Kingdom and 14% for the United States.
288
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 10
–
Notes to the Consolidated Financial Statements
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,
(M$)
Current service cost
Past service cost
Settlements
Net interest cost
BENEFIT AMOUNTS RECOGNIZED ON PROFIT
& LOSS
Actuarial (Gains)/Losses
–
–
–
–
Effect of changes in demographic assumptions
Effect of changes in financial assumptions
Effect of experience adjustments
Actual return on plan assets (excluding interest
income)
Effect of asset ceiling
BENEFIT AMOUNTS RECOGNIZED ON EQUITY
TOTAL BENEFIT AMOUNTS RECOGNIZED
ON COMPREHENSIVE INCOME
Pension benefits
Other benefits
2017
263
239
(1)
64
565
(16)
(241)
(193)
(344)
7
(787)
2016
251
(92)
-
66
225
(56)
1,008
(190)
(421)
(7)
334
2015
271
(35)
(14)
84
306
(41)
(384)
(108)
48
(1)
2017
16
12
-
17
45
3
(5)
(34)
-
-
(486)
(36)
(222)
559
(180)
9
2016
13
-
-
21
34
(7)
48
(4)
-
-
37
71
2015
17
-
-
22
39
(10)
(27)
(34)
-
-
(71)
(32)
Expected future cash out flows
The average duration of accrued benefits is approximately 14 years for defined pension benefits and 17 years for other benefits. The Group
expects to pay contributions of $176 million in respect of funded pension plans in 2018.
Estimated future benefits either financed from plan assets or directly paid by the employer are detailed as follows:
Estimated future payments
(M$)
Pension benefits
Other benefits
2018
2019
2020
2021
2022
2023-2027
Type of assets
Asset allocation
As of December 31,
Equity securities
Debt securities
Monetary
Annuity contracts
Real estate
Investments on equity and debt markets are quoted on active markets.
857
691
702
699
657
3,349
Pension benefits
2017
26%
43%
3%
20%
8%
2016
27%
42%
2%
21%
8%
8
30
29
29
29
29
142
2015
28%
42%
4%
21%
5%
REGISTRATION DOCUMENT 2017
289
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 10
Main actuarial assumptions and sensitivity analysis
Assumptions used to determine benefits obligations
Pension benefits
Other benefits
As of December 31,
Discount rate (weighted average for all regions)
Of which Euro zone
Of which United States
Of which United Kingdom
Inflation rate (weighted average for all regions)
Of which Euro zone
Of which United States
Of which United Kingdom
2017
2.48%
1.71%
3.75%
2.50%
2.40%
1.50%
2.50%
3.50%
2016
2.60%
1.69%
4.00%
2.75%
2.41%
1.50%
2.50%
3.50%
2015
3.25%
2.18%
4.25%
3.75%
2.43%
1.75%
2.50%
3.25%
2017
2.52%
1.93%
3.75%
2016
2.51%
1.85%
4.00%
2015
3.00%
2.42%
4.25%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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$)
Benefit obligation as of December 31, 2017
0.5% Increase
0.5% Decrease
(857)
974
A 0.5% increase or decrease in inflation rates – all other things being equal – would have the following approximate impact on the benefit
obligation:
(M$)
Benefit obligation as of December 31, 2017
0.5% Increase
0.5% Decrease
637
(586)
10.2
Payroll and staff
For the year ended December 31,
Personnel expenses (M$)
Wages and salaries (including social charges)
Group employees at December 31,
France
–
–
Management
Other
International
–
–
Management
Other
TOTAL
The number of employees includes only employees of fully consolidated subsidiaries.
2017
7,985
11,880
19,372
16,489
50,536
98,277
2016
8,238
12,057
19,567
17,186
53,358
102,168
2015
8,088
11,000
19,219
16,624
49,176
96,019
290
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 11
–
Notes to the Consolidated Financial Statements
NOTE 11
Income taxes
◗
ACCOUNTING POLICIES
Income taxes disclosed in the statement of income include the
current tax expenses (or income) and the deferred tax expenses
(or income).
The expense (or income) of current tax is the estimated amount of
the tax due for the taxable income of the period.
The Group uses the method whereby deferred income taxes are
recorded based on the temporary differences between the
carrying amounts of assets and liabilities recorded in the balance
sheet and their tax bases, and on carry-forwards of unused tax
losses and tax credits.
Deferred tax assets and liabilities are measured using the tax rates
that have been enacted or substantially enacted at the balance
sheet date. The tax rates used depend on the timing of reversals
of temporary differences, tax losses and other tax credits. The
effect of a change in tax rate is recognized either in the
Consolidated Statement of Income or in shareholders’ equity
depending on the item it relates to.
Deferred tax resulting from temporary differences between the
carrying amounts of equity-method investments and their tax
bases are recognized. The deferred tax calculation is based on
the expected future tax effect (dividend distribution rate or tax rate
on capital gains).
Income taxes are detailed as follows:
For the year ended December 31,
(M$)
Current income taxes
Deferred income taxes
TOTAL INCOME TAXES
2017
(3,416)
387
(3,029)
2016
(2,911)
1,941
(970)
Before netting deferred tax assets and liabilities by fiscal entity, the components of deferred tax balances are as follows:
As of December 31,
(M$)
Net operating losses and tax carry forwards
Employee benefits
Other temporary non-deductible provisions
Differences in depreciations
Other temporary tax deductions
NET DEFERRED TAX LIABILITY
2017
3,014
1,153
6,344
(13,387)
(2,746)
(5,622)
2016
3,267
1,257
5,862
(14,952)
(2,126)
(6,692)
2015
(4,552)
2,899
(1,653)
2015
3,100
1,251
6,279
(17,213)
(1,795)
(8,378)
8
The reserves of TOTAL subsidiaries that would be taxable if
distributed but for which no distribution is planned, and for which no
deferred
totaled
liability has
$10,738 million as of December 31, 2017.
therefore been recognized,
tax
concerned is in its exploration phase, the net operating losses
created during this phase will be useable only if a final investment
and development decision is made, accordingly, the time limit for
the utilization of those net operating losses is not known.
Deferred tax assets not recognized as of December 31, 2017
amount to $2,900 million as their future recovery was not regarded
as probable given the expected results of the entities; in particular in
the Exploration & Production segment, when the affiliate or the field
Deferred tax assets not recognized relate notably to France for an
amount of $479 million, to Australia for an amount of $423 million, to
Nigeria for an amount of $303 million and to Canada for an amount of
$241 million.
After netting deferred tax assets and liabilities by fiscal entity, deferred taxes are presented on the balance sheet as follows:
As of December 31,
(M$)
Deferred tax assets, non-current
Deferred tax liabilities, non-current
NET AMOUNT
2017
5,206
(10,828)
(5,622)
2016
4,368
(11,060)
(6,692)
2015
3,982
(12,360)
(8,378)
REGISTRATION DOCUMENT 2017
291
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 11
The net deferred tax variation in the balance sheet is analyzed as follows:
As of December 31,
(M$)
OPENING BALANCE
Deferred tax on income
Deferred tax on shareholders’ equity(a)
Changes in scope of consolidation(b)
Currency translation adjustment
CLOSING BALANCE
2017
(6,692)
387
(490)
1,154
19
2016
(8,378)
1,941
(21)
(370)
136
2015
(10,731)
2,899
(225)
(552)
231
(5,622)
(6,692)
(8,378)
(a)
(b)
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).
Changes in scope of consolidation include, as of December 31, 2017 the impact of reclassifications in assets and liabilities classified as held for sale for $1,063 million.
Reconciliation between provision for income taxes and pre-tax income
For the year ended December 31,
(M$)
Consolidated net income
Provision for income taxes
PRE-TAX INCOME
French statutory tax rate
THEORETICAL TAX CHARGE
Difference between French and foreign income tax rates
Tax effect of equity in income (loss) of affiliates
Permanent differences
Adjustments on prior years income taxes
Adjustments on deferred tax related to changes in tax rates
Changes in valuation allowance of deferred tax assets
2017
8,299
3,029
11,328
44.43%
(5,033)
(633)
888
1,491
(91)
(309)
658
2016
6,206
970
7,176
34.43%
(2,471)
5
761
(76)
54
234
523
2015
4,786
1,653
6,439
38.00%
(2,447)
(6)
897
(371)
100
483
(309)
NET PROVISION FOR INCOME TAXES
(3,029)
(970)
(1,653)
The French statutory tax rate includes the standard corporate tax rate
(33.33%), additional and exceptional applicable taxes that bring the
overall tax rate to 44.43% (versus 34.43% in 2016 and 38% in 2015).
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$)
2016
2017
2018
2019
2020(a)
2021(b)
2022 and after
Unlimited
TOTAL
(a)
(b)
2020 and after for 2015.
2021 and after for 2016.
2017
75
64
60
24
1,330
1,461
3,014
2016
130
109
60
1,154
1,814
3,267
2015
175
114
56
850
1,905
3,100
292
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Notes 11, 12
–
Notes to the Consolidated Financial Statements
As of December 31, 2017 the schedule of deferred tax assets related to carried forward tax credits on net operating losses for the main
countries is as follows:
As of December 31, 2017,
(M$)
2018
2019
2020
2021
2022 and after
Unlimited
TOTAL
Tax
Canada
Australia
France United States
Netherlands
708
90
798
515
515
498
498
340
340
219
219
NOTE 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$)
Litigations and accrued penalty claims
Provisions for environmental contingencies
Asset retirement obligations
Other non-current provisions
of which restructuring activities (Refining & Chemicals and Marketing
& Services)
of which financial risks related to non-consolidated and equity consolidated
affiliates
of which contingency reserve on solar panels warranties (SunPower)
Other non-current liabilities
TOTAL
In 2017,
litigation reserves amount to $706 million of which
$512 million in the Exploration & Production, notably in Angola and
Nigeria.
In 2017, other non-current liabilities mainly include debts (whose
maturity is more than one year) related to fixed assets acquisitions.
In 2016, litigation reserves amounted to $1,123 million of which
$959 million in the Exploration & Production, notably in Angola and
Nigeria.
2017
706
964
12,240
1,370
160
59
177
706
2016
1,123
938
12,665
1,455
184
63
168
665
8
2015
1,120
909
13,314
1,357
223
216
166
802
15,986
16,846
17,502
In 2016, other non-current liabilities mainly included debts (whose
maturity is more than one year) related to fixed assets acquisitions.
In 2015, litigation reserves amounted to $1,120 million of which
$895 million was in the Exploration & Production, notably in Angola
and Nigeria.
In 2015, other non-current liabilities mainly included debts (whose
maturity is more than one year) related to fixed assets acquisitions.
REGISTRATION DOCUMENT 2017
293
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 12
Changes in provisions and other non-current liabilities
Changes in provisions and other non-current liabilities are as follows:
(M$)
2017
of which asset retirement obligations (accretion
for allowances)
of which environmental contingencies (Marketing
& Services, Refining & Chemicals)
of which restructuring of activities
As of
January 1, Allowances
Reversals
Currency
translation
adjustment
As of
December 31,
Other
16,846
1,172
(1,612)
681
(1,101)
15,986
544
(330)
37
48
(120)
(84)
2016
17,502
1,569
(1,268)
(484)
(473)
16,846
of which asset retirement obligations (accretion
for allowances)
of which environmental contingencies (Marketing
& Services, Refining & Chemicals)
of which restructuring of activities
523
(502)
29
25
(82)
(68)
2015
17,545
1,280
(1,236)
(958)
871
17,502
of which asset retirement obligations (accretion
for allowances)
of which environmental contingencies (Marketing
& Services, Refining & Chemicals)
of which restructuring of activities
513
105
134
(566)
(95)
(60)
Changes in the asset retirement obligation
◗
ACCOUNTING POLICIES
Asset retirement obligations, which result
legal or
constructive obligation, are recognized based on a reasonable
estimate in the period in which the obligation arises.
from a
The associated asset retirement costs are capitalized as part of
the carrying amount of the underlying asset and depreciated over
the useful life of this asset.
An entity is required to measure changes in the liability for an
asset retirement obligation due to the passage of time (accretion)
by applying a risk-free discount rate to the amount of the liability.
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”.
The discount rate used in 2017 for the valuation of asset retirement
obligation is 4.5% as in 2016 and 2015 (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
$1,066 million, with a corresponding impact in tangible assets, and
with a negative impact of approximately $82 million on the following
years net income. Conversely, an increase of 0.5% would have a
nearly symmetrical impact compared to the effect of the decrease of
0.5%.
Changes in the asset retirement obligation are as follows:
(M$)
2017
2016
2015
As of
January 1 ,
Accretion
Revision in
estimates
New
obligations
Spending on
existing
obligations
Currency
translation
adjustment
12,665
13,314
13,121
544
523
513
(1,107)
(558)
685
334
375
271
(330)
(502)
(566)
448
(395)
(676)
Other
(314)
(92)
(34)
As of
December 31 ,
12,240
12,665
13,314
294
REGISTRATION DOCUMENT 2017
Other risks and contingent liabilities
12.2
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
issued on
February 18, 2016 by the French Supreme Court to put an end to
this proceeding.
following two decisions
final and binding
CONSOLIDATED FINANCIAL STATEMENTS
Note 12
–
Notes to the Consolidated Financial Statements
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 $22.4 billion. The arbitral tribunal issued its
decision on June 19, 2017 and entirely dismissed this claim.
The Group has lodged a criminal complaint to denounce the
fraudulent claim of which the Group believes it is a victim and, has
taken and reserved its rights to take all actions and measures to
defend its interests.
FERC
The Office of Enforcement of the U.S. Federal Energy Regulatory
Commission (FERC) began in 2015 an investigation in connection
with the natural gas trading activities in the United States of Total Gas
& Power North America, Inc. (TGPNA), a U.S. subsidiary of the
Group. The investigation covered transactions made by TGPNA
between June 2009 and June 2012 on the natural gas market.
TGPNA received a Notice of Alleged Violations from FERC on
September 21, 2015. On April 28, 2016, FERC issued an order to
show cause to TGPNA and two of its former employees, and to
TOTAL S.A. and Total Gas & Power Ltd., regarding the same facts.
TGPNA contests the claims brought against it.
A class action has been launched to seek damages from these three
companies and was dismissed by a judgment of the U.S. District
court of New York issued on March 15, 2017. The claimants
appealed this judgment.
Yemen
Due to the security conditions in the vicinity of Balhaf, Yemen LNG, in
which the Group holds a stake of 39.62%, stopped its commercial
production and export of LNG in April 2015, when it declared Force
Majeure to its various stakeholders. The plant is in a preservation
mode.
8
REGISTRATION DOCUMENT 2017
295
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 13
NOTE 13
Off Balance sheet commitments and lease contracts
13.1
Off balance sheet commitments and contingencies
As of December 31, 2017
(M$)
Non-current debt obligations net of hedging instruments (Note 15)
Current portion of non-current debt obligations net of hedging
instruments (Note 15)
Finance lease obligations (Note 13.2)
Asset retirement obligations (Note 12)
CONTRACTUAL OBLIGATIONS RECORDED
IN THE BALANCE SHEET
Operating lease obligations (Note 13.2)
Purchase obligations
CONTRACTUAL OBLIGATIONS NOT RECORDED
IN THE BALANCE SHEET
TOTAL OF CONTRACTUAL OBLIGATIONS
Guarantees given for excise taxes
Guarantees given against borrowings
Indemnities related to sales of businesses
Guarantees of current liabilities
Guarantees to customers/suppliers
Letters of credit
Other operating commitments
TOTAL OF OTHER COMMITMENTS GIVEN
Mortgages and liens received
Sales obligations
Other commitments received
TOTAL OF COMMITMENTS RECEIVED
Of which commitments given relating to joint ventures
Of which commitments given relating to associates
As of December 31, 2016
(M$)
Non-current debt obligations net of hedging instruments (Note 15)
Current portion of non-current debt obligations net of hedging
instruments (Note 15)
Finance lease obligations (Note 13.2)
Asset retirement obligations (Note 12)
CONTRACTUAL OBLIGATIONS RECORDED IN THE BALANCE
SHEET
Operating lease obligations (Note 13.2)
Purchase obligations
CONTRACTUAL OBLIGATIONS NOT RECORDED IN THE
BALANCE SHEET
TOTAL OF CONTRACTUAL OBLIGATIONS
Guarantees given for excise taxes
Guarantees given against borrowings
Indemnities related to sales of businesses
Guarantees of current liabilities
Guarantees to customers/suppliers
Letters of credit
Other operating commitments
TOTAL OF OTHER COMMITMENTS GIVEN
Mortgages and liens received
Sales obligations
Other commitments received
TOTAL OF COMMITMENTS RECEIVED
Of which commitments given relating to joint ventures
296
REGISTRATION DOCUMENT 2017
Maturity and installments
Total
Less than 1 year Between 1 and 5 years More than 5 years
39,544
4,646
1,156
12,240
57,586
6,441
86,366
92,807
150,393
2,073
16,080
341
321
4,180
2,965
17,431
43,391
89
67,014
7,398
74,501
36,847
20,629
-
4,646
39
485
5,170
1,401
8,605
10,006
15,176
1,938
411
120
91
1,100
2,680
1,165
7,505
23
6,263
3,549
9,835
160
580
19,540
20,004
-
261
2,165
21,966
2,886
23,917
26,803
48,769
29
10,607
61
109
268
102
637
11,813
26
21,513
1,111
22,650
12,225
5,991
-
856
9,590
30,450
2,154
53,844
55,998
86,448
106
5,062
160
121
2,812
183
15,629
24,073
40
39,238
2,738
42,016
24,462
14,058
Maturity and installments
Total
Less than 1 year Between 1 and 5 years More than 5 years
41,848
4,614
319
12,665
59,446
6,478
105,208
111,686
171,132
1,887
14,666
375
391
3,997
1,457
3,592
26,365
77
82,756
6,799
89,632
48,257
-
4,614
8
685
5,307
1,582
10,898
12,480
17,787
1,740
215
158
89
1,038
1,215
1,319
5,774
20
7,331
3,133
10,484
61
18,449
23,399
-
103
2,269
20,821
2,953
20,570
23,523
44,344
58
664
59
99
225
81
409
1,595
19
21,356
1,124
22,499
3,211
-
208
9,711
33,318
1,943
73,740
75,683
109,001
89
13,787
158
203
2,734
161
1,864
18,996
38
54,069
2,542
56,649
44,985
CONSOLIDATED FINANCIAL STATEMENTS
Note 13
–
Notes to the Consolidated Financial Statements
As of December 31, 2016
(M$)
Maturity and installments
Total
Less than 1 year Between 1 and 5 years More than 5 years
Of which commitments given relating to associates
21,959
603
3,265
18,091
As of December 31, 2015
(M$)
Non-current debt obligations net of hedging instruments (Note 15)
Current portion of non-current debt obligations net of hedging
instruments (Note 15)
Finance lease obligations (Note 13.2)
Asset retirement obligations (Note 12)
CONTRACTUAL OBLIGATIONS RECORDED
IN THE BALANCE SHEET
Operating lease obligations (Note 13.2)
Purchase obligations
CONTRACTUAL OBLIGATIONS NOT RECORDED
IN THE BALANCE SHEET
TOTAL OF CONTRACTUAL OBLIGATIONS
Guarantees given for excise taxes
Guarantees given against borrowings
Indemnities related to sales of businesses
Guarantees of current liabilities
Guarantees to customers/suppliers
Letters of credit
Other operating commitments
TOTAL OF OTHER COMMITMENTS GIVEN
Mortgages and liens received
Sales obligations
Other commitments received
TOTAL OF COMMITMENTS RECEIVED
Of which commitments given relating to joint ventures
A)
Contractual obligations
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
$1,117 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 $39 million.
information
The
to
indebtedness is presented in Note 15 to the Consolidated Financial
Statements.
regarding contractual obligations
linked
ease contracts
The information regarding operating and finance leases is presented
in Note 13.2 to the Consolidated Financial Statements.
Asset retirement obligations
This item represents the discounted present value of Exploration &
Production 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.
Maturity and installments
Total
Less than 1 year Between 1 and 5 years
More than 5 years
42,950
4,518
336
13,314
61,118
5,973
123,968
129,941
191,059
2,982
12,872
371
501
4,405
1,081
3,655
25,867
359
72,278
7,158
79,795
46,178
-
4,518
41
707
5,266
1,430
14,728
16,158
21,424
2,604
3,553
109
102
1,364
785
1,586
10,103
23
7,889
2,602
10,514
544
19,448
-
81
2,117
21,646
2,825
24,612
27,437
49,083
57
547
103
229
194
45
248
1,423
7
24,589
1,601
26,197
2,925
23,502
-
214
10,490
34,206
1,718
84,628
86,346
120,552
321
8,772
159
170
2,847
251
1,821
14,341
329
39,800
2,955
43,084
42,709
8
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
Exploration & Production segment, and contracts
for capital
investment projects in the Refining & Chemicals segment.
B)
Other commitments given
uarantees 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.
Guarantees given against borrowings
The Group guarantees bank debt and finance lease obligations of
certain non-consolidated subsidiaries and equity affiliates. Maturity
dates vary, and guarantees will terminate on payment and/or
cancellation of the obligation. A payment would be triggered by failure
of the guaranteed party to fulfill its obligation covered by the
guarantee, and no assets are held as collateral for these guarantees.
As of December 31, 2017, the maturities of these guarantees are up
to 2053.
REGISTRATION DOCUMENT 2017
297
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 13
As of December 31, 2017, the guarantees provided by TOTAL S.A. in
connection with the financing of the Ichthys LNG project amounted to
$8,500 million. As of December 31, 2016, the guarantees amounted
to $7,800 million.
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.
Guarantees given against borrowings also include the guarantee
given in 2017 by TOTAL S.A. in connection with the financing of the
Yamal LNG project for an amount of $4,038 million by TOTAL S.A.
to
As of December 31, 2016,
$3,147 million.
the guarantees amounted
In 2017, TOTAL S.A. has confirmed and extended guarantees for
TOTAL Refining SAUDI ARABIA SAS shareholders’ advances for an
amount of $1,462 million. As of December 31, 2016, the guarantees
amounted to $1,230 million.
As of December 31, 2017, the guarantee given in 2008 by TOTAL
S.A. in connection with the financing of the Yemen LNG project
amounts to $551 million as in 2016.
Other guarantees given
Non-consolidated subsidiaries
The Group also guarantees
liabilities of certain
non-consolidated subsidiaries. Performance under these guarantees
would be triggered by a financial default of the entity.
the current
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.
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.
C)
Commitments received
Sales obligations
These amounts represent binding obligations under contractual
including in particular unconditional
agreements to sell goods,
hydrocarbon sales contracts (except where an active, highly-liquid
market exists and when the volumes are expected to be re-sold
shortly after purchase).
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
the
financial
corresponding useful life used by the Group.
liability. These assets are depreciated over
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, 2017
(M$)
Operating leases
Finance leases
2018
2019
2020
2021
2022
2023 and beyond
TOTAL MINIMUM PAYMENTS
Less financial expenses
NOMINAL VALUE OF CONTRACTS
Less current portion of finance lease contracts
NON-CURRENT FINANCE LEASE LIABILITIES
298
REGISTRATION DOCUMENT 2017
1,401
988
814
623
462
2,153
6,441
76
67
67
65
65
864
1,204
(48)
1,156
(39)
1,117
CONSOLIDATED FINANCIAL STATEMENTS
Note 13
–
Notes to the Consolidated Financial Statements
For the year ended December 31, 2016
(M$)
Operating leases
Finance leases
2017
2018
2019
2020
2021
2022 and beyond
TOTAL MINIMUM PAYMENTS
Less financial expenses
NOMINAL VALUE OF CONTRACTS
Less current portion of finance lease contracts
NON-CURRENT FINANCE LEASE LIABILITIES
1,582
1,054
777
687
435
1,943
6,478
24
26
44
27
25
247
393
(74)
319
(8)
311
For the year ended December 31, 2015
(M$)
Operating leases
Finance leases
2016
2017
2018
2019
2020
2021 and beyond
TOTAL MINIMUM PAYMENTS
Less financial expenses
NOMINAL VALUE OF CONTRACTS
Less current portion of finance lease contracts
NON-CURRENT FINANCE LEASE LIABILITIES
1,430
1,049
784
550
442
1,718
5,973
57
23
23
23
23
242
391
(55)
336
(41)
295
Net rental expense incurred under operating leases for the year ended December 31, 2017 is $1,467 million (against $1,629 million in 2016 and
$1,282 million in 2015).
8
REGISTRATION DOCUMENT 2017
299
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 14
NOTE 14
Financial assets and liabilities analysis per instrument class
and strategy
The financial assets and liabilities disclosed in the balance sheet are detailed as follows:
As of December 31, 2017
(M$)
Financial instruments related to financing and operational activities
Available for
sale(a)
Held for
trading
Financial
debt(b)
Cash flow
hedge
Net investment
hedge and other
-
1,727
-
50
-
-
-
-
-
-
73
-
-
1,977
251
-
-
-
11,870
1,777
2,301
Amortized
cost
ASSETS/(LIABILITIES)
Equity affiliates: loans
5,135
Other investments
Non-current financial
assets
Other non-current
assets
Accounts receivable,
net(c)
Other operating
receivables
-
-
3,765
-
-
Current financial assets
2,970
Cash and cash
equivalents
TOTAL FINANCIAL
ASSETS
TOTAL
NON-FINANCIAL
ASSETS
TOTAL ASSETS
-
-
-
Non-current financial
debt
Accounts payable(c)
Other operating liabilities
(18,470)
-
-
Current borrowings
(6,925)
Other current financial
liabilities
TOTAL FINANCIAL
LIABILITIES
TOTAL
NON-FINANCIAL
LIABILITIES
TOTAL LIABILITIES
-
(25,395)
-
-
Fair value
Hedging of
Financial
Debt
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
337
269
-
-
-
172
-
509
-
-
-
-
12
-
-
281
-
-
-
-
-
-
-
-
-
-
-
-
(20)
(21,768)
(951)
(131)
-
(1,794)
-
-
-
(4,171)
-
-
-
(88)
-
(157)
-
-
-
-
(1,902)
(25,939)
(1,108)
(131)
-
-
-
-
-
-
-
-
Other
financial
instruments
Amortized
cost
Total
Fair value
-
-
-
-
5,135
1,727
5,135
1,727
679
679
3,815
3,815
14,893
14,893
14,893
7,347
-
9,336
3,393
9,336
3,393
33,185
33,185
33,185
55,425
72,163
72,163
-
-
-
170,468
242,631
(41,340)
(26,479)
(26,479)
(8,341)
(10,135)
(11,096)
-
-
(42,886)
(26,479)
(10,135)
(11,095)
(245)
(245)
-
-
(34,820)
(89,295)
(90,840)
-
(153,336)
- (242,631)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(a)
(b)
(c)
Financial assets available for sale are measured at their fair value except for unlisted securities and listed securities on non active markets (see Note 8 to the Consolidated
Financial Statements).
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).
The impact of offsetting on accounts receivable, net is $(3,471) million and $3,471 million on accounts payable.
300
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 14
–
Notes to the Consolidated Financial Statements
Available
for sale(a)
Held for
trading
Financial
debt(b)
Fair value
Hedging of
Financial
Debt
Cash flow
hedge
Net investment
hedge and other
As of December 31, 2016
(M$)
Financial instruments related to financing and operational activities
Amortized
cost
ASSETS/(LIABILITIES)
Equity affiliates: loans
4,718
Other investments
Non-current financial
assets
Other non-current
assets
Accounts receivable,
net(c)
Other operating
receivables
-
-
4,051
-
-
Current financial assets
4,413
Cash and cash
equivalents
TOTAL FINANCIAL
ASSETS
TOTAL
NON-FINANCIAL
ASSETS
TOTAL ASSETS
Non-current financial
debt
Accounts payable(c)
Other operating
liabilities
-
-
-
(11,188)
-
-
Current borrowings
(9,700)
Other current financial
liabilities
TOTAL FINANCIAL
LIABILITIES
TOTAL
NON-FINANCIAL
LIABILITIES
TOTAL LIABILITIES
-
(20,888)
-
-
-
1,133
-
66
-
-
-
-
-
-
63
-
-
2,425
94
-
13,182
1,199
2,582
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
716
129
-
-
-
41
-
757
-
-
-
-
-
-
-
4
-
-
133
-
-
(644)
-
(107)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(5)
-
(2,001)
(28,223)
(3,007)
-
(4,220)
(115)
-
(212)
(2,121)
(32,443)
(3,219)
(751)
-
-
-
-
-
-
-
-
Other
financial
instruments
Amortized
cost
Total
Fair value
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,718
1,133
4,718
1,133
908
908
4,117
4,117
12,213
12,213
12,213
7,789
10,218
-
4,548
10,218
4,548
24,597
24,597
24,597
44,599
62,452
62,452
-
-
-
168,526
230,978
(43,067)
(23,227)
(23,227)
-
-
(44,168)
(23,227)
(7,508)
(9,616)
(9,616)
-
-
(13,920)
(13,920)
(327)
(327)
(30,735)
(90,157)
(91,258)
- (140,821)
- (230,978)
-
-
8
(a)
(b)
(c)
Financial assets available for sale are measured at their fair value except for unlisted securities and listed securities on non active markets (see Note 8 to the Consolidated
Financial Statements).
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).
The impact of offsetting on accounts receivable, net is $(1,828) million and $1,828 million on accounts payable.
REGISTRATION DOCUMENT 2017
301
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 14
As of December 31, 2015
(M$)
Financial instruments related to financing and operational activities
Amortized
cost
ASSETS/(LIABILITIES)
Equity affiliates: loans
4,378
Other investments
Non-current financial
assets
Other non-current
assets
Accounts receivable,
net(c)
Other operating
receivables
-
-
4,298
-
-
Current financial assets
5,858
Cash and cash
equivalents
TOTAL FINANCIAL
ASSETS
TOTAL
NON-FINANCIAL
ASSETS
TOTAL ASSETS
Non-current financial
debt
Accounts payable(c)
Other operating liabilities
-
-
-
(7,810)
-
-
Current borrowings
(8,230)
Other current financial
liabilities
TOTAL FINANCIAL
LIABILITIES
TOTAL
NON-FINANCIAL
LIABILITIES
TOTAL LIABILITIES
-
(16,040)
-
-
Available
for sale(a)
Held for
trading
Financial
debt(b)
Fair value
Hedging of
Financial
Debt
Cash flow
hedge
Net investment
hedge and other
-
1,241
-
-
-
-
-
-
-
-
-
-
-
3,379
112
-
14,534
1,241
3,491
-
-
-
-
1,075
144
-
-
-
220
-
-
-
9
-
-
1,295
153
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,609)
(33,762)
(2,891)
-
(4,258)
(44)
-
(127)
-
-
-
-
-
-
-
(1)
-
(103)
-
-
(1,653)
(38,020)
(3,018)
(104)
-
-
-
-
-
-
-
-
Other
financial
instruments
Amortized
cost
Total
Fair value
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,378
1,241
4,378
1,241
1,219
1,219
4,298
4,298
10,629
10,629
10,629
7,521
10,909
-
6,190
10,909
6,190
23,269
23,269
23,269
41,419
62,133
62,133
-
162,351
- 224,484
-
-
-
(44,464)
(20,928)
(20,928)
(8,202)
(9,914)
(45,294)
(20,928)
(9,914)
-
-
(12,488)
(12,488)
(171)
(171)
(29,130)
(87,965)
(88,795)
- (136,519)
- (224,484)
-
-
(a)
(b)
(c)
Financial assets available for sale are measured at their fair value except for unlisted securities and listed securities on non active markets (see Note 8 to the Consolidated
Financial Statements).
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).
The impact of offsetting on accounts receivable, net is $(1,044) million and $1,044 million on accounts payable.
302
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 15
–
Notes to the Consolidated Financial Statements
NON-CURRENT FINANCIAL DEBT AND RELATED FINANCIAL INSTRUMENTS
1,310
NOTE 15
Financial structure and financial costs
15.1
A)
Financial debt and related financial instruments
Non-current financial debt and related financial instruments
As of December 31, 2017
(M$)
(ASSETS)/ LIABILITIES
Non-current financial debt
of which hedging instruments of non-current financial debt (liabilities)
Non-current financial assets
of which hedging instruments of non-current financial debt (assets)
Bonds after fair value hedge
Fixed rate bonds and bonds after cash flow hedge
Other floating rate debt
Other fixed rate debt
Financial lease obligations
Non-current instruments held for trading
NON-CURRENT FINANCIAL DEBT AND RELATED FINANCIAL INSTRUMENTS
As of December 31, 2016
(M$)
(ASSETS)/ LIABILITIES
Non-current financial debt
of which hedging instruments of non-current financial debt (liabilities)
Non-current financial assets
of which hedging instruments of non-current financial debt (assets)
NON-CURRENT FINANCIAL DEBT AND RELATED FINANCIAL INSTRUMENTS
Bonds after fair value hedge
Fixed rate bonds and bonds after cash flow hedge
Other floating rate debt
Other fixed rate debt
Financial lease obligations
Non-current instruments held for trading
NON-CURRENT FINANCIAL DEBT AND RELATED FINANCIAL INSTRUMENTS
As of December 31, 2015
(M$)
(ASSETS)/ LIABILITIES
Non-current financial debt
of which hedging instruments of non-current financial debt (liabilities)
Non-current financial assets
of which hedging instruments of non-current financial debt (assets)
NON-CURRENT FINANCIAL DEBT AND RELATED FINANCIAL INSTRUMENTS
Bonds after fair value hedge
Fixed rate bonds and bonds after cash flow hedge
Other floating rate debt
Other fixed rate debt
Financial lease obligations
Non-current instruments held for trading
NON-CURRENT FINANCIAL DEBT AND RELATED FINANCIAL INSTRUMENTS
Secured
Unsecured
39,351
40,661
Secured
Unsecured
1,310
-
-
-
-
-
70
123
1,117
-
1,310
572
-
-
-
572
-
-
76
185
311
-
572
655
-
-
-
655
-
-
34
326
295
-
655
40,030
1,082
(679)
(606)
39,351
20,620
16,469
1,692
623
-
(53)
42,495
3,651
(908)
(845)
41,587
29,147
10,315
1,291
892
-
(58)
43,809
2,891
(1,219)
(1,219)
42,590
34,435
6,494
1,110
551
-
-
Total
41,340
1,082
(679)
(606)
40,661
20,620
16,469
1,762
746
1,117
(53)
Total
44,464
2,891
(1,219)
(1,219)
43,245
34,435
6,494
1,144
877
295
-
Total
43,067
3,651
(908)
(845)
42,159
29,147
10,315
1,367
1,077
311
(58)
8
42,590
43,245
41,587
42,159
Secured
Unsecured
REGISTRATION DOCUMENT 2017
303
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 15
The fair value of bonds, as of December 31, 2017, after taking into account currency and interest rates swaps, is detailed as follows:
Bonds after fair value hedge
and variable rate bonds
(M$)
Currency
of
issuance
Fair value after
hedging as of
December 31, 2017
Fair value after
hedging as of
December 31, 2016
Fair value after
hedging as of
December 31, 2015
Range
of current
maturities
Range of initial current rate
before hedging
instruments
USD
USD
CHF
NZD
AUD
EUR
EUR
CAD
GBP
GBP
NOK
HKD
SEK
Bond
Bond
Bond
Bond
Bond
Bond
Bond
Bond
Bond
Bond
Bond
Bond
Bond
Current portion (less than one
year)
Total Principal Financing
Entities(a)
TOTAL S.A.(b)
Other consolidated subsidiaries
TOTAL BONDS AFTER FAIR
VALUE HEDGE
7,266
1,385
391
252
850
8,266
1,639
188
1,855
470
103
212
(4,156)
18,721
1,201
698
20,620
11,036
1,385
1,441
251
1,211
10,958
1,638
289
2,215
469
355
392
(4,391)
27,249
1,200
698
29,147
13,754
2018-2024
1.450%-3.750%
2,385
2018-2020
1,910
2018
251
2019-2020
1,360
2018-2025
11,365
2019-2044
1,638
2020
289
2018-2020
2,225
2018-2022
2019
2018
USLIBOR 3 mois +0.03%
USLIBOR 3 mois +0.75%
3.135%
4.750%-5.000%
3.750%-4.250%
0.250%-4.875%
EURIBOR 3 mois +0.30%
EURIBOR 3 mois +0.31%
2.125%-2.375%
2.250%-3.875%
GBLIB3M+0.30%
2.500%
2019-2025
2.920%-4.180%
2022
0.500%
469
566
394
95
(4,164)
32,537
1,200
698
34,435
Bonds after cash flow hedge
and fixed rate bonds
(M$)
Currency
of
issuance
Fair value after
hedging as of
December 31, 2017
Fair value after
hedging as of
December 31, 2016
Fair value after
hedging as of
December 31, 2015
Range of
current
maturities
Range of initial current
rate before hedging
instruments
EUR
USD
CNY
HKD
CHF
GBP
Bond
Bond
Bond
Bond
Bond
Bond
Current portion (less than one
year)
Total Principal Financing
Entities(a)
Other consolidated subsidiaries
TOTAL BONDS AFTER CASH
FLOW HEDGE AND FIXED
RATE BONDS
9,337
5,000
164
188
1,037
324
(164)
15,886
583
5,248
4,250
153
2,077
3,750
164
2019-2029
2020-2024
2018
2026
0.750%-5.125%
2.750%-4.450%
3.750%
3.090%
2024-2027
0.510%-1.010%
2024
1.250%
9,651
664
5,991
503
16,469
10,315
6,494
(a)
(b)
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:
- TOTAL CAPITAL is a wholly-owned subsidiary of TOTAL S.A.. It acts as a financing vehicle for the Group.
- 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.
- TOTAL CAPITAL INTERNATIONAL is a wholly-owned subsidiary of TOTAL S.A.. It acts as a financing vehicle for the Group.
Debt financing of $1.2 billion through a structure combining the issue of cash-settled convertible bonds with the purchase of cash-settled call options to hedge TOTAL’s
exposure to the exercise of the conversion rights under the bonds.
304
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 15
–
Notes to the Consolidated Financial Statements
Loan repayment schedule (excluding current portion)
As of December 31, 2017
(M$)
Non-current
financial debt
of which hedging
instruments of
non-current
financial debt
(liabilities)
of which hedging
instruments of
non-current
financial debt
(assets)
Non-current financial
debt and related
financial
instruments
Non-current
financial assets
2019
2020
2021
2022
2023 and beyond
TOTAL
6,005
5,119
3,810
5,026
21,380
41,340
164
222
96
165
435
1,082
(75)
(2)
(15)
(67)
(520)
(679)
(68)
-
-
(67)
(471)
(606)
As of December 31, 2016
(M$)
Non-current
financial debt
of which hedging
instruments of
non-current
financial debt
(liabilities)
of which hedging
instruments of
non-current
financial debt
(assets)
Non-current financial
debt and related
financial instruments
Non-current
financial assets
2018
2019
2020
2021
2022 and beyond
TOTAL
4,572
5,812
4,956
3,609
24,118
43,067
249
327
564
237
2,274
3,651
(252)
(110)
(4)
(31)
(511)
(908)
(235)
(104)
-
(7)
(499)
(845)
As of December 31, 2015
(M$)
Non-current
financial debt
of which hedging
instruments of
non-current
financial debt
(liabilities)
of which hedging
instruments of
non-current
financial debt
(assets)
Non-current financial
debt and related
financial instruments
Non-current
financial assets
40,661
100%
5,930
5,117
3,795
4,959
20,860
4,320
5,702
4,952
3,578
23,607
%
15%
13%
9%
12%
51%
%
10%
14%
12%
8%
56%
42,159
100%
2017
2018
2019
2020
2021 and beyond
TOTAL
4,729
4,803
5,716
4,965
24,251
44,464
213
218
124
434
1,902
2,891
(127)
(383)
(174)
-
(535)
(1,219)
(127)
(383)
(174)
-
(535)
(1,219)
Analysis by currency and interest rate
These analyses take into account interest rate and foreign currency swaps to hedge non-current financial debt.
4,602
4,420
5,542
4,965
23,716
%
11%
10%
13%
11%
55%
8
43,245
100%
As of December 31,
(M$)
U.S. Dollar
Euro
Norwegian krone
Other currencies
TOTAL
As of December 31,
(M$)
Fixed rate
Floating rate
TOTAL
2017
38,703
724
975
259
%
95%
2%
2%
1%
2016
39,963
977
928
291
%
95%
2%
2%
1%
2015
40,337
1,681
907
320
%
93%
4%
2%
1%
40,661
100%
42,159
100%
43,245
100%
2017
18,332
22,329
40,661
%
45%
55%
100%
2016
11,703
30,456
42,159
%
28%
72%
100%
2015
7,666
35,579
43,245
%
18%
82%
100%
REGISTRATION DOCUMENT 2017
305
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 15
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$)
(ASSETS)/ LIABILITIES
Current financial debt(a)
Current portion of non-current financial debt
CURRENT BORROWINGS (Note 14)
Current portion of hedging instruments of debt (liabilities)
Other current financial instruments (liabilities)
OTHER CURRENT FINANCIAL LIABILITIES (Note 14)
Current deposits beyond three months
Current portion of hedging instruments of debt (assets)
Other current financial instruments (assets)
CURRENT FINANCIAL ASSETS (Note 14)
2017
6,396
4,700
11,096
157
88
245
(2,970)
(172)
(251)
(3,393)
2016
9,469
4,451
13,920
212
115
327
(4,413)
(41)
(94)
(4,548)
2015
7,836
4,652
12,488
127
44
171
(5,858)
(220)
(112)
(6,190)
CURRENT BORROWINGS AND RELATED FINANCIAL ASSETS
AND LIABILITIES, NET
7,948
9,699
6,469
(a)
As of December 31, 2017, December 31, 2016 and December 31, 2015, the current financial debt includes a commercial paper program in Total Capital Canada Ltd..
Total Capital Canada Ltd. is a wholly-owned subsidiary of TOTAL S.A. It acts as a financing vehicle for the activities of the Group in Canada. Its debt securities are fully
and unconditionally guaranteed by TOTAL S.A. as to payment of principal, premium, if any, interest and any other amounts due.
C)
Cash flow from (used in) financing activities
The variations of financial debt are detailed as follows:
As of
January 1,
2017
Cash
changes
Change in scope,
including IFRS 5
reclassification
Foreign
currency
Changes in
fair value
Reclassification
Non-current/
Current
As of December 31,
2017
Other
Non-cash changes
(M$)
Non-current financial
instruments – assets(a)
Non-current financial debt
NON-CURRENT
FINANCIAL DEBT AND
RELATED FINANCIAL
INSTRUMENTS
Current financial instruments
– assets(a)
Current borrowings
Current financial instruments
– liabilities(a)
CURRENT FINANCIAL
DEBT AND RELATED
FINANCIAL
INSTRUMENTS
Financial debt classified as
held for sale
(908)
43,067
-
2,277
42,159
2,277
(135)
13,920
-
(7,175)
327
-
14,112
(7,175)
21
-
-
2
2
-
(50)
-
(50)
(21)
(69)
(62)
203
291
(451)
-
(4,713)
-
955
141
(160)
(4,713)
955
(34)
(585)
18
(254)
290
(100)
-
4,713
-
(601)
(64)
4,713
-
-
(460)
(224)
-
-
-
(17)
-
(17)
-
938
FINANCIAL DEBT
56,292
(4,898)
(a)
Fair value or cash flow hedge instruments and other non-hedge debt-related derivative instruments.
Monetary changes in non-current financial debt are detailed as follows:
For the year ended December 31,
(M$)
Issuance of non-current debt
Repayment of non-current debt
NET AMOUNT
2017
2,959
(682)
2,277
2016
4,096
(520)
3,576
306
REGISTRATION DOCUMENT 2017
(679)
41,340
40,661
(423)
11,096
245
10,918
-
51,579
2015
4,468
(302)
4,166
CONSOLIDATED FINANCIAL STATEMENTS
Note 15
–
Notes to the Consolidated Financial Statements
D)
Cash and cash equivalents
◗
ACCOUNTING POLICIES
Cash and cash equivalents are comprised of cash on hand and
highly liquid short-term investments that are easily convertible into
known amounts of cash and are subject to insignificant risks of
changes in value.
Cash and cash equivalents are detailed as follows:
For the year ended December 31,
(M$)
Cash
Cash equivalents
TOTAL
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.
2017
13,427
19,758
33,185
2016
12,129
12,468
24,597
2015
12,291
10,978
23,269
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, 2017, the cash and cash equivalents include $1,487 million subject to restrictions particularly due to a regulatory framework
or due to the fact they are owned by affiliates located in countries with exchange controls.
E)
Net-debt-to-equity ratio
For its internal and external communication needs, the Group calculates a debt ratio by dividing its net financial debt by equity. Adjusted
shareholders’ equity for the year ended December 31, 2017 is calculated after payment of a 2017 dividend of €2.48 per share, subject to
approval by the Shareholders’ Meeting on June 1, 2018.
The net-debt-to-equity ratio is calculated as follows:
As of December 31,
(M$)
(ASSETS)/LIABILITIES
Current borrowings
Other current financial liabilities
Current financial assets
Net financial assets and liabilities held for sale or exchange
Non-current financial debt
Non-current financial assets
Cash and cash equivalents
NET FINANCIAL DEBT
Shareholders’ equity – Group share
Distribution of the income based on existing shares at the closing date
Non-controlling interests
ADJUSTED SHAREHOLDERS’ EQUITY
NET-DEBT-TO-EQUITY RATIO
2017
11,096
245
(3,393)
-
41,340
(679)
(33,185)
15,424
111,556
(1,874)
2,481
112,163
13.8%
2016
13,920
327
(4,548)
(140)
43,067
(908)
(24,597)
27,121
98,680
(1,581)
2,894
99,993
27.1%
8
2015
12,488
171
(6,190)
141
44,464
(1,219)
(23,269)
26,586
92,494
(1,545)
2,915
93,864
28.3%
REGISTRATION DOCUMENT 2017
307
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 15
15.2
Fair value of financial instruments (excluding commodity contracts)
◗
ACCOUNTING POLICIES
(cid:142)
2) Cash flow hedge when the Group implements a strategy of
fixing interest rate on 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
the hedged
transaction affects profit or loss.
income statement when
the
to
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 recycled 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 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
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).
financial
liability
recognized
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
in other
the statement of
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:
income or
in
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
fair value are
transactions
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”.
trading). Changes
(held
for
in
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:
(cid:142)
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;
308
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 15
–
Notes to the Consolidated Financial Statements
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 mainly includes:
(cid:142)
Financial income, financial expense and fair value of derivative
instruments used for cash management purposes classified as
“Assets and liabilities held for trading”.
(cid:142)
(cid:142)
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
liabilities and associated hedging
instruments”;
“Financing
(cid:142)
Ineffective portion of bond hedging; and
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$)
Loans and receivables
Financing liabilities and associated hedging instruments
Fair value hedge (ineffective portion)
Assets and liabilities held for trading
IMPACT ON THE COST OF NET DEBT
B)
Impact of the hedging strategies
2017
53
(1,395)
(1)
(191)
(1,534)
2016
82
(1,111)
3
(78)
(1,104)
2015
121
(965)
(1)
(28)
(873)
Fair value hedge
The impact on the Statement of Income of the bond hedging instruments which is recorded in the item “Financial interest on debt” in the
Consolidated Statement of Income is detailed as follows:
For the year ended December 31,
(M$)
Revaluation at market value of bonds
Swap hedging of bonds
INEFFECTIVE PORTION OF THE FAIR VALUE HEDGE
2017
(2,519)
2,518
(1)
2016
693
(690)
3
2015
2,133
(2,134)
(1)
The ineffective portion is not representative of the Group’s performance considering the Group’s objective to hold swaps to maturity. The current
portion of the swaps valuation is not subject to active management.
Net investment hedge
These instruments are recorded directly in other comprehensive income under “Currency translation adjustments”. The variations of the period
are detailed in the table below:
8
For the year ended December 31,
(M$)
2017
2016
2015
As of January 1,
Variations
Disposals
(658)
(674)
(511)
(104)
16
(163)
-
-
-
As of
December 31
(762)
(658)
(674)
As of December 31, 2017, 2016 and 2015 the Group had no open forward contracts under these hedging instruments.
Cash flow hedge
The impact on the Statement of Income and Other Comprehensive Income of the hedging instruments qualified as cash flow hedges is detailed
as follows:
For the year ended December 31,
(M$)
Profit (Loss) recorded in equity during the period
Recycled amount from equity to the income statement during the period
2017
253
266
2016
308
(52)
2015
(185)
(205)
As of December 31, 2017, 2016 and 2015, the ineffective portion of these financial instruments is nil.
REGISTRATION DOCUMENT 2017
309
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 15
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, 2017
(M$)
Fair value hedge
Swaps hedging bonds (assets)
Swaps hedging bonds (liabilities)
TOTAL SWAPS HEDGING BONDS
Cash flow hedge
Swaps hedging bonds (assets)
Swaps hedging bonds (liabilities)
TOTAL SWAPS HEDGINGS BONDS
Forward exchange contracts related to operational activites
(assets)
Forward exchange contracts related to operational activites
(liabilities)
TOTAL FORWARD EXCHANGE CONTRACTS RELATED
TO OPERATING ACTIVITIES
Held for trading
Other interest rate swaps (assets)
Other interest rate swaps (liabilities)
TOTAL OTHER INTEREST RATE SWAPS
Currency swaps and forward exchange contracts (assets)
Currency swaps and forward exchange contracts (liabilities)
TOTAL CURRENCY SWAPS AND FORWARD EXCHANGE
CONTRACTS
Notional value schedule
Fair
value
Notional
value 2018
Fair
value
2019
and
after
2019
2020
2021
2022
2023
and
after
172
(157)
15
2,391
1,840
4,231
337
(951)
(614)
5,075
14,669
19,744
3,247
3,346
1,945
4,336
6,870
269
(131)
9,466
11,288
138
20,754
969
-
-
-
-
2
-
2
32
(17)
15
219
(71)
-
-
-
55
-
55
36,775
13,905
50,680
15,132
6,048
-
-
-
64
(3)
61
9
(17)
28
-
28
2,300
370
2,670
175
229
-
-
-
19,785
-
-
24
4
41
50
1,000
-
1,579
Notional amounts set the levels of commitment and are indicative nor of a contingent gain or loss neither of a related debt.
148
21,180
(8)
404
222
128
46
7
1
For the year ended December 31, 2016
(M$)
Fair value hedge
Swaps hedging bonds (assets)
Swaps hedging bonds (liabilities)
TOTAL SWAPS HEDGING FIXED-RATES BONDS
Cash flow hedge
Swaps hedging bonds (assets)
Swaps hedging bonds (liabilities)
TOTAL SWAPS HEDGING BONDS
Forward exchange contracts related to operational activites
(assets)
Forward exchange contracts related to operational activites
(liabilities)
TOTAL FORWARD EXCHANGE CONTRACTS RELATED
TO OPERATIONAL ACTIVITES
Held for trading
Other interest rate swaps (assets)
Other interest rate swaps (liabilities)
TOTAL OTHER INTEREST RATE SWAPS
Currency swaps and forward exchange contracts (assets)
41
(212)
(171)
-
-
-
3
(26)
(23)
7
(5)
2
87
Notional value schedule
Fair
value
Notional
value 2017
Fair
value
2018
and
after
2018
2019
2020
2021
2022
and
after
2,213
2,175
716
7,618
(3,007)
20,549
4,388 (2,291)
28,167
4,097
3,172
3,346
1,945
15,607
-
-
-
129
(644)
(515)
3,457
5,679
9,136
-
969
30
296
1
(5)
326
(4)
16,582
24,642
41,224
6,714
3,803
35
(4)
31
28
(1)
27
13
80
93
1,859
603
93
2,462
1,291
578
6
-
-
-
-
-
8,167
-
-
-
1,000
171
Currency swaps and forward exchange contracts (liabilities)
(110)
TOTAL CURRENCY SWAPS AND FORWARD EXCHANGE
CONTRACTS
(23)
10,517
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.
310
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 15
–
Notes to the Consolidated Financial Statements
Notional value schedule
Notional
value
2016
Fair
value
Fair
value
2017
and
after
2017
2018
2019
2020
2021
and
after
220
(127)
93
-
-
-
9
(61)
(52)
7
(9)
(2)
82
(35)
2,709
1,075
579
(2,891)
11,701
21,835
3,288 (1,816)
33,536
4,410
4,129
3,190
3,346
18,461
-
-
-
144
(1)
143
2,221
36
2,257
-
-
969
-
1,288
145
-
497
(42)
642
(42)
17,220
26,914
44,134
5,476
3,970
47
9,446
1
-
1
22
-
22
-
376
376
90
59
149
627
33
296
80
82
67
-
-
-
-
-
-
660
290
226
58
41
45
For the year ended December 31, 2015
(M$)
Fair value hedge
Swaps hedging bonds (assets)
Swaps hedging bonds (liabilities)
TOTAL SWAPS HEDGING BONDS
Cash flow hedge
Swaps hedging bonds (assets)
Swaps hedging bonds (liabilities)
TOTAL SWAPS HEDGING BONDS
Forward exchange contracts related to operational activites
(assets)
Forward exchange contracts related to operational activites
(liabilities)
TOTAL FORWARD EXCHANGE CONTRACTS RELATED
TO OPERATIONAL ACTIVITES
Held for trading
Other interest rate swaps (assets)
Other interest rate swaps (liabilities)
TOTAL OTHER INTEREST RATE SWAPS
Currency swaps and forward exchange contracts (assets)
Currency swaps and forward exchange contracts (liabilities)
TOTAL CURRENCY SWAPS AND FORWARD EXCHANGE
CONTRACTS
Notional amounts set the levels of commitment and are indicative nor of a contingent gain or loss neither of a related debt.
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.
The methods used are as follows:
(cid:142)
Financial debts, swaps
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 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.
8
(cid:142)
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.
REGISTRATION DOCUMENT 2017
311
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 15
The fair value hierarchy for financial instruments, excluding commodity contracts, is as follows:
As of December 31, 2017
(M$)
Fair value hedge instruments
Cash flow hedge instruments
Assets and liabilities held for trading
Assets available for sale
TOTAL
As of December 31, 2016
(M$)
Fair value hedge instruments
Cash flow hedge instruments
Assets and liabilities held for trading
Assets available for sale
TOTAL
As of December 31, 2015
(M$)
Fair value hedge instruments
Cash flow hedge instruments
Assets and liabilities held for trading
Assets available for sale
TOTAL
Quoted prices in
active markets for
identical assets
(level 1)
Prices based on
observable data
(level 2)
Prices based on
non observable
data (level 3)
-
-
-
100
100
(599)
140
216
-
(243)
-
-
-
-
-
Quoted prices in
active markets for
identical assets
(level 1)
Prices based on
observable data
(level 2)
Prices based on
non observable
data (level 3)
-
-
-
120
120
(2,462)
(542)
37
-
(2,967)
-
-
-
-
-
Quoted prices in
active markets for
identical assets
(level 1)
Prices based on
observable data
(level 2)
Prices based on
non observable
data (level 3)
-
-
-
59
59
(1,723)
49
68
-
(1,606)
-
-
-
-
-
Total
(599)
140
216
100
(143)
Total
(2,462)
(542)
37
120
(2,847)
Total
(1,723)
49
68
59
(1,547)
Financial risks management
15.3
Financial markets related risks
As part of its financing and cash management activities, the Group
uses derivative instruments to manage its exposure to changes in
interest rates and foreign exchange rates. These instruments are
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
the Front Office. This unit also prepares
marked-to-market valuations of used financial instruments and, when
necessary, performs sensitivity analysis.
results of
Counterparty risk
The Group has established standards for market transactions under
which bank counterparties must be approved in advance, based on
financial soundness
the counterparty’s
an assessment of
(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 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.
312
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 15
–
Notes to the Consolidated Financial Statements
Interest rate risk on non-current debt
The Group’s policy consists, according to general corporate needs,
of incurring non-current debt at a floating rate or at a fixed rate,
depending on the interest rates at the time of issue, in dollars or in
euros. 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, 2017, 2016 and 2015.
ASSETS/(LIABILITIES)
(M$)
AS OF DECEMBER 31, 2017
Bonds (non-current portion, before swaps)
Swaps hedging fixed-rates bonds (liabilities)
Swaps hedging fixed-rates bonds (assets)
Total swaps hedging fixed-rates bonds (assets and liabilities)
Current portion of non-current debt after swap
(excluding capital lease obligations)
Other interest rates swaps
Currency swaps and forward exchange contracts
AS OF DECEMBER 31, 2016
Bonds (non-current portion, before swaps)
Swaps hedging fixed-rates bonds (liabilities)
Swaps hedging fixed-rates bonds (assets)
Total swaps hedging fixed-rates bonds (assets and liabilities)
Current portion of non-current debt after swap
(excluding capital lease obligations)
Other interest rates swaps
Currency swaps and forward exchange contracts
AS OF DECEMBER 31, 2015
Bonds (non-current portion, before swaps)
Swaps hedging fixed-rates bonds (liabilities)
Swaps hedging fixed-rates bonds (assets)
Total swaps hedging fixed-rates bonds (assets and liabilities)
Current portion of non-current debt after swap
(excluding capital lease obligations)
Other interest rates swaps
Currency swaps and forward exchange contracts
Change in fair value due to a change in
interest rate by
Carrying amount
Estimated fair
value
+10 basis
points
-10 basis
points
(36,613)
(1,082)
606
(476)
(4,646)
76
142
(36,656)
(3,651)
845
(2,806)
(4,614)
33
(23)
(39,257)
(2,891)
1,219
(1,672)
(4,518)
(1)
(26)
(38,159)
(1,082)
606
(476)
(4,645)
76
142
(37,757)
(3,651)
845
(2,806)
(4,614)
33
(23)
(40,087)
(2,891)
1,219
(1,672)
(4,518)
(1)
(26)
191
-
-
(83)
1
12
-
221
-
-
(117)
5
7
-
156
-
-
(144)
5
8
-
8
(191)
-
-
83
(1)
(12)
-
(221)
-
-
117
(4)
(7)
-
(156)
-
-
144
(5)
(8)
-
REGISTRATION DOCUMENT 2017
313
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 15
The impact of changes in interest rates on the cost of net debt before tax is as follows:
For the year ended December 31,
(M$)
Cost of net debt
Interest rate translation of:
+10 basis points
-10 basis points
+100 basis points
-100 basis points
2017
(1,534)
(6)
6
(63)
63
2016
(1,104)
(17)
17
(172)
172
2015
(873)
(20)
20
(204)
204
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
exchange rates
Dollar/Pound
sterling
exchange rates
Dollar/Ruble
exchange rates
0.83
0.95
0.92
0.74
0.81
0.67
57.86
61.00
74.10
DECEMBER 31, 2017
December 31, 2016
December 31, 2015
As of December 31, 2017
(M$)
Total
Euro
Dollar
Pound sterling
Ruble
7,366
Other
currencies
9,013
Shareholders’ equity at historical exchange rate
119,450
44,930
51,674
6,467
Currency translation adjustment before net
investment hedge
Net investment hedge – open instruments
Shareholders’ equity at exchange rate
as of December 31, 2017
(7,908)
(1,903)
14
14
(1,543)
(3,076)
(1,386)
111,556
43,041
51,674
4,924
4,290
7,627
As of December 31, 2016
(M$)
Total
Euro
Dollar
Pound sterling
Shareholders’ equity at historical exchange rate
112,551
38,645
51,863
5,997
Ruble
7,227
Other
currencies
8,819
Currency translation adjustment before net
investment hedge
Net investment hedge – open instruments
Shareholders’ equity at exchange rate
as of December 31, 2016
(13,871)
(6,845)
(1,978)
(3,286)
(1,762)
98,680
31,800
51,863
4,019
3,941
7,057
As of December 31, 2015
(M$)
Total
Euro
Dollar Pound sterling
Shareholders’ equity at historical exchange rate
104,613
37,345
46,272
5,926
Ruble
6,816
Other
currencies
8,254
Currency translation adjustment before net
investment hedge
Net investment hedge – open instruments
Shareholders’ equity at exchange rate
as of December 31, 2015
(12,119)
(5,337)
(1,145)
(3,936)
(1,701)
92,494
32,008
46,272
4,781
2,880
6,553
314
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 15
–
Notes to the Consolidated Financial Statements
Based on the 2017 financial statements, a conversion using rates different from + or -10% for each of the currencies below would have the
following impact on shareholders equity and net income (Group share):
As of December 31, 2017
(M$)
Impact of an increase of 10% of exchange rates on:
–
–
shareholders equity
net income (Group share)
Impact of a decrease of 10% of exchange rates on:
–
–
shareholders equity
net income (Group share)
Euro
Pound sterling
Ruble
4,304
465
(4,304)
(465)
492
19
(492)
(19)
429
29
(429)
(29)
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, 2017, these lines of credit amounted to
$11,478 million, of which $11,478 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, 2017, the aggregate amount of the
principal confirmed lines of credit granted by international banks to
Group companies, including TOTAL S.A., was $12,323 million, of
which $12,205 million was unused. The lines of credit granted to
Group companies other than TOTAL S.A. are not intended to finance
the Group’s general needs; they are intended to finance either the
general needs of the borrowing subsidiary or a specific project.
The following tables show the maturity of the financial assets and liabilities of the Group as of December 31, 2017, 2016 and 2015 (see
Note 15 to the Consolidated Financial Statements).
As of December 31, 2017
ASSETS/(LIABILITIES)
(M$)
Non-current financial debt
(notional value excluding interests)
Current borrowings
Other current financial liabilities
Current financial assets
Assets and liabilities available
for sale or exchange
Cash and cash equivalents
NET AMOUNT BEFORE FINANCIAL EXPENSE
Financial expense on non-current financial debt
Interest differential on swaps
NET AMOUNT
(11,096)
(245)
3,393
-
33,185
25,237
(805)
(193)
Less than
one year
1-2 years
2-3 years
3-4 years
4-5 years
More than
5 years
-
(5,930)
(5,117)
(3,795)
(4,959)
(20,860)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
(40,661)
(11,096)
(245)
3,393
-
33,185
8
(5,930)
(5,117)
(3,795)
(4,959)
(20,860)
(15,424)
(779)
(223)
(636)
(257)
(545)
(245)
(454)
(198)
(1,093)
(681)
(4,312)
(1,797)
24,239
(6,932)
(6,010)
(4,585)
(5,611)
(22,634)
(21,533)
REGISTRATION DOCUMENT 2017
315
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 15
As of December 31, 2016
ASSETS/(LIABILITIES)
(M$)
Non-current financial debt
(notional value excluding interests)
Current borrowings
Other current financial liabilities
Current financial assets
Assets and liabilities available
for sale or exchange
Cash and cash equivalents
NET AMOUNT BEFORE FINANCIAL EXPENSE
Financial expense on non-current financial debt
Interest differential on swaps
NET AMOUNT
As of December 31, 2015
ASSETS/(LIABILITIES)
(M$)
Non-current financial debt
(notional value excluding interests)
Current borrowings
Other current financial liabilities
Current financial assets
Assets and liabilities available
for sale or exchange
Cash and cash equivalents
NET AMOUNT BEFORE FINANCIAL EXPENSE
Financial expense on non-current financial debt
Interest differential on swaps
NET AMOUNT
(13,920)
(327)
4,548
140
24,597
15,038
(799)
(79)
(12,488)
(171)
6,190
(141)
23,269
16,659
(763)
131
Less than
one year
1-2 years
2-3 years
3-4 years
4-5 years
More than
5 years
-
(4,320)
(5,702)
(4,952)
(3,578)
(23,607)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,320)
(5,702)
(4,952)
(3,578)
(23,607)
(27,121)
(783)
(56)
(682)
(201)
(552)
(253)
(465)
(272)
(1,271)
(910)
(4,552)
(1,771)
14,160
(5,159)
(6,585)
(5,757)
(4,315)
(25,788)
(33,444)
Less than
one year
1-2 years
2-3 years
3-4 years
4-5 years
More than
5 years
-
(4,602)
(4,420)
(5,542)
(4,965)
(23,716)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(4,602)
(4,420)
(5,542)
(4,965)
(23,716)
(26,586)
(813)
171
(747)
48
(663)
(55)
(524)
(126)
(1,104)
(610)
(4,614)
(441)
16,027
(5,244)
(5,119)
(6,260)
(5,615)
(25,430)
(31,641)
Total
(42,159)
(13,920)
(327)
4,548
140
24,597
Total
(43,245)
(12,488)
(171)
6,190
(141)
23,269
The following table sets forth financial assets and liabilities related to operating activities as of December 31, 2017, 2016 and 2015 (see Note 14
of the Notes to the Consolidated Financial Statements).
As of December 31,
ASSETS/(LIABILITIES)
(M$)
Accounts payable
Other operating liabilities
including financial instruments related to commodity contracts
Accounts receivable, net
Other operating receivables
including financial instruments related to commodity contracts
2017
(26,479)
(10,135)
(1,794)
14,893
9,336
1,987
2016
(23,227)
(9,616)
(2,077)
12,213
10,218
2,425
2015
(20,928)
(9,914)
(1,609)
10,629
10,909
3,379
TOTAL
(12,385)
(10,412)
(9,304)
These financial assets and liabilities mainly have a maturity date below one year.
316
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 15
–
Notes to the Consolidated Financial Statements
Credit risk
Credit risk is defined as the risk of the counterparty to a contract
failing to perform or pay the amounts due.
The Group is exposed to credit risks in its operating and financing
activities. The Group’s maximum exposure to credit risk is partially
related to financial assets recorded on its balance sheet, including
energy derivative instruments that have a positive market value.
The following table presents the Group’s maximum credit risk exposure:
As of December 31,
ASSETS/(LIABILITIES)
(M$)
Loans to equity affiliates (Note 8)
Loans and advances (Note 6)
Other non-current financial assets related to operational activities (Note 6)
Non-current financial assets (Note 15.1)
Accounts receivable (Note 5)
Other operating receivables (Note 5)
Current financial assets (Note 15.1)
Cash and cash equivalents (Note 15.1)
TOTAL
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.
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, 2017, the net margin
call paid amounted to $870 million (against $2,605 million paid as of
December 31, 2016 and $124 million paid as of December 31,
2015).
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, 2017, the net value of
receivables sold amounted to $7,845 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.
Furthermore, in 2017 the Group conducted several operations of
reverse factoring for a value of $300 million.
Credit risk is managed by the Group’s business segments as follows:
(cid:142)
Exploration & Production segment
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
the
process. The
high-quality of the other parties lead to a low level of credit risk.
these contracts and
long-term aspect of
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.
2017
5,135
2,878
937
679
14,893
9,336
3,393
33,185
70,436
2016
4,718
3,048
1,069
908
12,213
10,218
4,548
24,597
61,319
2015
4,378
3,407
891
1,219
10,629
10,909
6,190
23,269
60,892
(cid:142)
Gas, Renewables & Power segment
–
Gas activities
Trading Gas activities deal with counterparties in the energy,
industrial and financial sectors throughout the world. Financial
rated
institutions providing credit
international bank and insurance groups.
risk coverage are highly
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.
About the Professionals and Retail Gas and Power Sales activities,
credit risk management policy is adapted to the type of customer
either through the use of procedures of prepayments and
appropriate collection, especially for mass customers or through
credit
insurances and sureties/guarantees obtaining. For the
Professionals segment, the separation of responsibilities between
the commercial and financial teams allows a “a priori” positions
risky control.
8
REGISTRATION DOCUMENT 2017
317
arranged with
insurance groups selected in accordance with strict criteria.
institutions,
international banks and
financial
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.
(cid:142)
Marketing & Services segment
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.
the local
Credit policies are defined at
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
requiring security or
insurance and/or
subscription of credit
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.
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 15
–
Renewables & Power
Internal procedures for the Renewables division and the Innovation
& Energy Efficiency division
risk
management. Procedures to monitor customer risk are defined at
the local level, especially for SunPower and Saft (rules for the
approval of credit limits, use of guarantees, monitoring and
assessment of the receivables portfolio, provisioning of doubtful
debts…).
rules on credit
include
(cid:142)
Refining & Chemicals segment
–
Refining & Chemicals
Credit risk is primarily related to commercial receivables. Internal
the
procedures of Refining & Chemicals
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:
include rules
for
–
–
–
–
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
318
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 16
–
Notes to the Consolidated Financial Statements
NOTE 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
limits.
According
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.
fluctuations within global
industry practice,
to price
the
to
trading
these
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, 2017
(M$)
ASSETS/(LIABILITIES)
Gross value
before
offsetting
– assets
Gross value
before
offsetting
– liabilities
Amounts
offset
– assets(c)
Amounts
offset
– liabilities(c)
Net balance
sheet value
presented
– assets
Net balance
sheet value
presented
– liabilities
Other
amounts
not offset
Net
carrying
amount
Fair
value(b)
Crude oil, petroleum products and freight rates activities
Petroleum products, crude oil and
freight rate swaps
Forwards(a)
Options
Futures
Options on futures
Other/Collateral
TOTAL CRUDE OIL, PETROLEUM
PRODUCTS AND FREIGHT RATES
Gas, Renewables & Power
activities
Swaps
Forwards(a)
Options
Futures
Other/Collateral
TOTAL GAS, RENEWABLES
& POWER
TOTAL
Total of fair value non
recognized in the balance sheet
244
109
82
-
202
-
637
76
1,717
6
-
-
(333)
(113)
(163)
-
(251)
-
(102)
(12)
(52)
-
(155)
-
(860)
(321)
(7)
(1,345)
(30)
(1)
-
(3)
(92)
(33)
-
-
102
12
52
-
155
-
321
3
92
33
-
-
142
97
30
-
47
-
(231)
(101)
(111)
-
(96)
-
316
(539)
73
1,625
(27)
-
-
(4)
(1,253)
3
(1)
-
1,799
2,436
(1,383)
(2,243)
(128)
(449)
128
449
1,671
1,987
(1,255)
(1,794)
-
-
-
-
-
63
63
-
-
-
-
(86)
(86)
(23)
(89)
(4)
(81)
-
(49)
63
(89)
(4)
(81)
-
(49)
63
(160)
(160)
69
372
(24)
(1)
(86)
330
170
69
372
(24)
(1)
(86)
330
170
-
8
(a)
(b)
(c)
Forwards: contracts resulting in physical delivery are accounted for as derivative commodity contracts and included in the amounts shown.
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.
Amounts offset in accordance with IAS 32.
REGISTRATION DOCUMENT 2017
319
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 16
As of December 31, 2016
(M$)
ASSETS/(LIABILITIES)
Gross value
before
offsetting
– assets
Gross value
before
offsetting
– liabilities
Amounts
offset
– assets(c)
Amounts
offset
– liabilities(c)
Net balance
sheet value
presented
– assets
Net balance
sheet value
presented
– liabilities
Other
amounts
not offset
Net
carrying
amount
Fair
value(b)
Crude oil, petroleum products and freight rates activities
Petroleum products, crude oil and freight
rate swaps
Forwards(a)
Options
Futures
Options on futures
Other/Collateral
TOTAL CRUDE OIL, PETROLEUM
PRODUCTS AND FREIGHT RATES
Gas, Renewables & Power activities
Swaps
Forwards(a)
Options
Futures
Other/Collateral
TOTAL GAS, RENEWABLES & POWER
TOTAL
Total of fair value non recognized
in the balance sheet
464
172
194
-
151
-
981
63
1,879
15
-
-
1,957
2,938
(266)
(214)
(207)
-
(140)
(8)
(125)
-
(164)
(150)
-
-
(851)
(423)
(39)
(1,672)
(28)
-
-
(1,739)
(2,590)
(3)
(61)
(26)
-
-
(90)
(513)
140
8
125
-
150
-
423
3
61
26
-
-
90
513
324
164
69
-
1
-
(126)
(206)
(82)
-
(14)
-
-
-
-
-
-
(220)
198
(42)
(13)
-
(13)
(220)
198
(42)
(13)
-
(13)
(220)
558
(428)
(220)
(90)
(90)
60
1,818
(11)
-
-
(36)
(1,611)
(2)
-
-
1,867
2,425
(1,649)
(2,077)
-
-
-
-
(97)
(97)
(317)
24
207
(13)
-
(97)
121
31
24
207
(13)
-
(97)
121
31
-
(a)
(b)
(c)
Forwards: contracts resulting in physical delivery are accounted for as derivative commodity contracts and included in the amounts shown.
When the fair value of derivatives listed on an organized exchange market (futures, options on futures and swaps) is offset with the margin call received or paid
in the balance sheet, this fair value is set to zero.
Amounts offset in accordance with IAS 32.
As of December 31, 2015
(M$)
ASSETS/(LIABILITIES)
Gross value
before
offsetting
– assets
Gross value
before
offsetting
– liabilities
Amounts
offset
– assets(c)
Amounts
offset
– liabilities(c)
Net balance
sheet value
presented
– assets
Net balance
sheet value
presented
– liabilities
Other
amounts
not offset
Net
carrying
amount
Fair
value(b)
Crude oil, petroleum products and freight rates activities
Petroleum products, crude oil and freight
rate swaps
Forwards(a)
Options
Futures
Options on futures
Other/Collateral
TOTAL CRUDE OIL, PETROLEUM
PRODUCTS AND FREIGHT RATES
Gas, Renewables & Power activities
Swaps
Forwards(a)
Options
Futures
Other/Collateral
TOTAL GAS, RENEWABLES & POWER
TOTAL
Total of fair value non recognized
in the balance sheet
1,517
68
660
9
127
-
(498)
(130)
(468)
-
(350)
(25)
(460)
-
(128)
(127)
-
-
350
25
460
-
127
-
1,167
43
200
9
-
-
(148)
(105)
(8)
-
(1)
-
-
-
-
-
-
1,019
1,019
(62)
192
9
(1)
(62)
192
9
(1)
(1,145)
(1,145)
(1,145)
2,381
(1,224)
(962)
962
1,419
(262)
(1,145)
12
12
50
(175)
2,255
(1,498)
5
-
-
(24)
-
-
(19)
(320)
(11)
-
-
19
320
11
-
-
2,310
4,691
(1,697)
(2,921)
(350)
(1,312)
350
1,312
31
(156)
1,935
(1,178)
(6)
-
-
1,960
3,379
(13)
-
-
(1,347)
(1,609)
(1,122)
-
-
-
-
23
23
(125)
(125)
757
(19)
-
23
636
648
757
(19)
-
23
636
648
-
(a)
(b)
(c)
Forwards: contracts resulting in physical delivery are accounted for as derivative commodity contracts and included in the amounts shown.
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.
Amounts offset in accordance with IAS 32.
320
REGISTRATION DOCUMENT 2017
CONSOLIDATED FINANCIAL STATEMENTS
Note 16
–
Notes to the Consolidated Financial Statements
Most commitments on crude oil and refined products have a short term maturity (less than one year). The maturity of most Gas, Renewables &
Power 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,
(M$)
Fair value as
of January 1,
Impact on
income
Settled
contracts
Fair value as of
December 31,
Other
Crude oil, petroleum products and freight rates
activities
2017
2016
2015
Gas, Renewables & Power activities
2017
2016
2015
130
1,157
897
218
613
532
2,693
3,013
3,318
717
392
113
(3,047)
(4,040)
(3,058)
(554)
(742)
3
-
-
-
35
(45)
(35)
The fair value hierarchy for financial instruments related to commodity contracts is as follows:
As of December 31, 2017
(M$)
Quoted prices in
active markets for
identical assets
(level 1)
Prices based on
observable data
(level 2)
Prices based on
non observable
data (level 3)
Crude oil, petroleum products and freight rates activities
Gas, Renewables & Power activities
TOTAL
(49)
288
239
(173)
128
(45)
-
-
-
As of December 31, 2016
(M$)
Quoted prices in
active markets for
identical assets
(level 1)
Prices based on
observable data
(level 2)
Prices based on
non observable
data (level 3)
Crude oil, petroleum products and freight rates activities
Gas, Renewables & Power activities
TOTAL
(22)
409
387
152
(191)
(39)
-
-
-
As of December 31, 2015
(M$)
Quoted prices in
active markets for
identical assets
(level 1)
Prices based on
observable data
(level 2)
Prices based on
non observable
data (level 3)
Crude oil, petroleum products and freight rates activities
Gas, Renewables & Power activities
TOTAL
15
79
94
1,142
534
1,676
-
-
-
The description of each fair value level is presented in Note 15 to the Consolidated Financial Statements.
(223)
130
1,157
416
218
613
Total
(223)
416
193
Total
130
218
348
Total
1,157
613
1,770
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$)
Profit (Loss) recorded in equity during the period
Recycled amount from equity to the income statement during the period
These financial instruments are mainly one year term Henry Hub derivatives.
2017
71
(6)
2016
(69)
(1)
2015
-
-
As of December 31, 2017, the ineffective portion of these financial instruments is nil (in 2016 the ineffective portion of these financial instruments
was a loss of $5 million and in 2015, the ineffective portion of these financial instruments was nil).
8
REGISTRATION DOCUMENT 2017
321
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 16
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.
Trading & Shipping: value-at-risk with a 97.5% probability
As of December 31,
(M$)
2017
2016
2015
High
28.4
24.6
11.6
Low
4.1
7.2
5.5
Average
Year end
15.6
14.0
8.6
6.6
22.1
7.4
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, Renewables & Power division trading: value-at-risk with a 97.5% probability
As of December 31,
(M$)
2017
2016
2015
High
12.5
8.4
15.8
Low
2.8
2.0
2.0
Average
Year end
6.3
3.9
7.1
4.2
2.1
8.0
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
trading
information system that enables real-time monitoring of
activities.
encourage liquidity, hedging operations are performed with numerous
independent operators, including other oil companies, major energy
producers or consumers and financial institutions. The Group has
established counterparty limits and monitors outstanding amounts
with each counterparty on an ongoing basis.
Limits on trading positions are approved by the Group’s Executive
Committee and are monitored daily. To increase flexibility and
322
REGISTRATION DOCUMENT 2017
NOTE 17
Post closing events
Exploration & Production
(cid:142)
Acquisition of Maersk Oil
On August 21, 2017, TOTAL S.A. and the Danish company AP Møller
– Maersk A/S entered into a share transfer agreement pursuant to
which it was agreed that AP Møller – Maersk A/S sell to TOTAL the
entire capital of its subsidiary, Maersk Olie og Gas A/S (Maersk Oil), in
the context of a transaction in shares (contributions of shares) and in
debt, with the payment of a cash counterpart, subject to the
fulfillment of different conditions precedent.
At its meeting of February 7, 2018, the Board of Directors which
approved the Group’s financial statements also approved, pursuant
to the delegation granted to it, subject to the fulfillment of the
conditions precedent stipulated in the Share Transfer Agreement
other than those already carried out at the date of the meeting of the
Board of Directors, the capital increase intended to remunerate the
contribution to TOTAL S.A. of the shares of Maersk Oil.
The TOTAL Group is expected to finalize the acquisition of the
Maersk Oil shares in 2018 for an overall financial value consisting of
three elements: (i) the fair value of the 97,522,593 TOTAL S.A. shares
CONSOLIDATED FINANCIAL STATEMENTS
Note 17
–
Notes to the Consolidated Financial Statements
issued in consideration for the Maersk Oil shares (ii) $2.5 billion
Maersk Oil debt to the Maersk group assumed by TOTAL group, and
(iii) an additional cash payment related to closing elements.
(cid:142)
Strategic alliance with Petrobras in Brazil
On January 12, 2018, Petrobras and TOTAL finalized the transfer of
rights
for an amount of
$1.95 billion.
in the Lapa and
Iara concessions
Marketing & Services
(cid:142)
TotalErg
On January 10, 2018, TOTAL closed the sale of TotalErg to API
Group for a Group share amount of $174 million (€154 million).
Gas, Renewables & Power
(cid:142)
SunPower
The Group acknowledged the decision of the US administration on
January 23, 2018, to raise tariffs on imports of solar panels in the
United States (201 solar trade case). The consequences of this
decision are currently being reviewed by SunPower.
8
REGISTRATION DOCUMENT 2017
323
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 18
NOTE 18
Consolidation scope
As of December 31, 2017, 972 entities are consolidated of which 867 are fully consolidated and 105 are accounted for under the equity
method (E).
The table below sets forth the main Group consolidated entities:
Business
segment Statutory corporate name
Exploration & Production
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
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
Gas Investment and Services Company Limited
Ichthys LNG PTY Limited
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)
Stogg Eagle Funding B.V.
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.
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
324
REGISTRATION DOCUMENT 2017
% Group
interest
15.00%
5.00%
33.33%
23.75%
50.01%
13.60%
13.60%
15.00%
100.00%
20.48%
75.00%
24.50%
100.00%
100.00%
100.00%
100.00%
100.00%
10.00%
30.00%
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%
100.00%
58.64%
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%
Method
incorporation Country of operations
Country of
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
United Arab Emirates
United Arab Emirates
United Arab Emirates
United Arab Emirates
United Kingdom
United Arab Emirates
United Kingdom
United Arab Emirates
Netherlands
Bermuda
United States
Bermuda
Luxembourg
Nigeria
Canada
Angola
Angola
United States
Nigeria
Luxembourg
Nigeria
Canada
United Arab Emirates
United Arab Emirates
United Kingdom
United Kingdom
France
France
United Kingdom
United Kingdom
France
Iran
United Kingdom
United Kingdom
Bermuda
Australia
France
Bermuda
Oman
Australia
Libya
Myanmar
United Arab Emirates
United Arab Emirates
Nigeria
Norway
United Kingdom
United Kingdom
Qatar
Russia
Oman
Bermuda
Venezuela
United Kingdom
Qatar
Qatar
Netherlands
Russia
Netherlands
France
France
Netherlands
France
Netherlands
France
Nigeria
Norway
Norway
Norway
Qatar
Russia
Oman
Iran
Venezuela
Oman
Qatar
Qatar
Nigeria
Russia
Netherlands
United Arab Emirates
Argentina
Netherlands
France
Azerbaijan
Algeria
United States
United States
France
Bermuda
France
France
France
France
France
France
Angola
Angola
Angola
Angola
Angola
Angola
Angola
Angola
Business
segment Statutory corporate name
Exploration & Production (contd)
Total E&P Aruba B.V.
Total E&P Asia Pacific Pte. Limited
Total E&P Australia
Total E&P Australia Exploration PTY Limited
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 Chorey
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 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 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 Mentawai B.V.
Total E&P Indonesia Telen B.V.
Total E&P Indonésie
Total E&P Iraq
Total E&P Ireland B.V.
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.
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 C18 B.V.
Total E&P Mauritania Block C9 B.V.
Total E&P Mauritania Blocks DW B.V.
Total E&P Mauritanie
Total E&P Mauritanie Block TA29 B.V.
CONSOLIDATED FINANCIAL STATEMENTS
Note 18
–
Notes to the Consolidated Financial Statements
Method
incorporation Country of operations
Country of
Netherlands
Singapore
France
Australia
France
France
Netherlands
France
Netherlands
Netherlands
France
Canada
France
United States
France
Aruba
Singapore
Australia
Australia
Australia
Australia
Azerbaijan
Bolivia
Brunei
Bulgaria
Cambodia
Canada
China
United States
Colombia
Republic of the Congo
Republic of the Congo
France
France
France
France
Netherlands
Netherlands
Netherlands
Netherlands
Brazil
France
Netherlands
Netherlands
France
Côte d’Ivoire
Côte d’Ivoire
Côte d’Ivoire
Côte d’Ivoire
Côte d’Ivoire
Cyprus
Brunei
Denmark
Brazil
France
Egypt
Egypt
Egypt
United Kingdom
United Kingdom
France
France
France
France
Australia
France
France
Qatar
France
France
Australia
France
8
Netherlands
United Arab Emirates
Netherlands
Netherlands
Netherlands
France
France
Netherlands
Italy
France
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
France
France
Netherlands
Netherlands
Netherlands
France
Netherlands
Australia
Indonesia
Indonesia
Indonesia
Iraq
Ireland
Italy
Kazakhstan
Kenya
Iraq
Iraq
Iraq
Iraq
Libya
Malaysia
Mauritania
Mauritania
Mauritania
Mauritania
Mauritania
REGISTRATION DOCUMENT 2017
325
% Group
interest
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%
100.00%
100.00%
100.00%
100.00%
100.00%
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 18
Business
segment Statutory corporate name
Exploration & Production (contd)
Total E&P Mexico S.A. de C.V.
Total E&P Mozambique B.V.
Total E&P Myanmar
Total E&P Namibia B.V.
Total E&P Nederland B.V.
Total E&P New Ventures Inc.
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 Nigeria S.A.S.
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 Senegal
Total E&P Services China Company Limited
Total E&P South Africa B.V.
Total E&P South Pars
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 East Africa Midstream B.V.
Total Exploration M’Bridge
Total Facilities Management B.V.
Total Gabon
Total Gass Handel Norge AS
Total Gastransport Nederland B.V.
Total GLNG Australia
Total GLNG Australia Holdings
Total Holding Dolphin Amont
Total Holdings Nederland B.V.
326
REGISTRATION DOCUMENT 2017
% Group
interest
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%
100.00%
100.00%
100.00%
100.00%
Method
incorporation Country of operations
Country of
Mexico
Netherlands
France
Netherlands
Netherlands
United States
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
France
Norway
France
Netherlands
Netherlands
Netherlands
Mexico
Mozambique
Myanmar
Namibia
Netherlands
United States
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
Nigeria
France
Norway
Oman
Philippines
Papua New Guinea
Papua New Guinea
Papua New Guinea
Papua New Guinea
Netherlands
France
Poland
Qatar
Democratic Republic
of Congo
Democratic Republic
of Congo
United States
United States
France
France
France
China
Netherlands
France
Russia
Indonesia
Senegal
China
South Africa
Iran
France Republic of South Sudan
France
Netherlands
France
Russia
Netherlands
Syria
Tajikistan
Thailand
Russia
Uganda
United Kingdom
United Kingdom
Netherlands
Netherlands
United States
United States
France
France
France
Netherlands
Netherlands
Netherlands
Netherlands
Gabon
Norway
Uruguay
Uruguay
United States
United States
France
France
Yemen
Yemen
Uganda
Angola
Netherlands
Gabon
Norway
Netherlands
Netherlands
France
France
France
Australia
Australia
France
Netherlands
Netherlands
Business
segment Statutory corporate name
Exploration & Production (contd)
Total Holdings Nederland International B.V.
Total Iran B.V.
Total LNG Angola
Total LNG Supply Services USA Inc.
Total Oil and Gas South America
Total Oil and Gas Venezuela B.V.
Total Pars LNG
Total Petroleum Angola
Total Profils Pétroliers
Total Qatar
Total South Pars
Total Tengah
Total Termokarstovoye B.V.
Total UAE SERVICES
Total Upstream Nigeria Limited
Total Upstream UK Limited
Total Venezuela
Total Yemen LNG Company Limited
Unitah Colorado Resources II, LLC
Yamal LNG(b)
Yemen LNG Company Limited
Ypergas S.A.
Gas, Renewables & Power
8point3 Energy Partners LP
8point3 General Partner, LLC
8point3 Holding Company, LLC
8point3 OpCo Holdings, LLC
8point3 Operating Company, LLC
Advanced Thermal Batteries Inc.
Aerospatiale Batteries (ASB)
Alcad AB
Almyros Energy Solution Malta Limited
Amco-Saft India Limited
Aragonne Solar, LLC
Arica Solar, LLC
Aton Solar Program, LLC
Badenhorst PV 2 Hold Company LLC
Bertophase (PTY) Limited
Black Mountain Solar I, LLC
Bluestem Solar LLC
BNB Bloomfield Solar, LLC
BNB Caamden Solar, 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
BSP II Parent, LLC
BSPCB Class B Member, LLC
Buffalo North Star Solar, LLC
Centrale Solaire 2
Cepsa Gas Comercializadora S.A.
Cogenra Solar, Inc.
Cooper Ranch Solar LLC
Core Solar SPV V, LLC
CONSOLIDATED FINANCIAL STATEMENTS
Note 18
–
Notes to the Consolidated Financial Statements
Method
incorporation Country of operations
Country of
Netherlands
Netherlands
France
United States
France
Netherlands
France
France
France
France
France
France
Netherlands
France
Nigeria
Netherlands
Iran
France
United States
France
Venezuela
Iran
Angola
France
Qatar
Iran
Indonesia
Russia
United Arab Emirates
Nigeria
United Kingdom
United Kingdom
France
Bermuda
France
Bermuda
United States
United States
E
E
E
E
E
E
E
E
E
E
Russia
Bermuda
Venezuela
United States
United States
United States
United States
United States
United States
France
Sweden
Malta
India
United States
United States
United States
United States
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
France
Spain
United States
United States
United States
Russia
Yemen
Venezuela
United States
United States
United States
United States
United States
United States
France
Sweden
Malta
India
United States
United States
United States
United States
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
Spain
United States
United States
United States
% Group
interest
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%
29.48%
39.62%
37.33%
20.54%
28.13%
28.13%
56.26%
20.54%
50.00%
50.00%
100.00%
56.26%
100.00%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
35.00%
56.26%
56.26%
56.26%
REGISTRATION DOCUMENT 2017
327
8
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 18
Business
segment Statutory corporate name
Gas, Renewables & Power (contd)
Corona Sands, LLC
Côte d’Ivoire GNL
CSMED
DeAar PV Hold Company LLC
Desert Equinox, LLC
Desert SunBurst, LLC
Diamond Energy PTY Limited
Dongfang Huansheng Photovoltaic (Jiangsu) Company Limited
Dragonfly Systems, Inc.
Eau Chaude Réunion (ECR)
Fassett-Walker, LLC
Fast Jung KB
Fosmax LNG
Frieman & Wolf Batterietechnick GmbH
Gas Del Litoral SRLCV
Georgia Sun I, LLC
GFS I Class B Member, LLC
Gfs I Holding Company, LLC
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
Golden Fields Solar VI, LLC
Golden Fields Solar VII, LLC
Goodfellow Solar I, LLC
Goodfellow Solar PH1, LLC
Greenbotics, Inc.
Gulf Total Tractebel Power Company PSJC
Hazira LNG Private Limited
Hazira Port Private Limited
Helios II Residential Solar Fund, LLC
Helios Residential Solar Fund, LLC
Helix Project II, LLC
Helix Project III, LLC
Heracles Solar PH1, LLC
Heracles Solar, LLC
High Plains Ranch I, LLC
Huaxia CPV (Inner Mongolia) Power Corporation, Limited
Infigen Energy US Development Corporation
Infinite Sunshine 2015-1, LLC
Institut Photovoltaïque D’Ile De France (IPVF)
Java Solar, LLC
JBAB Solar, LLC
JDA Overseas Holdings, LLC
K2015014806 (South Africa) (PTY) Limited
K2015014875 (South Africa) (PTY) Limited
K2015070451 (South Africa) (PTY) Limited
K2015263261 (South Africa) (PTY) Limited
Kern High School District Solar (2), LLC
Kern High School District Solar, 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
LA Basin Solar I, LLC
LA Basin Solar II, LLC
328
REGISTRATION DOCUMENT 2017
% Group
interest
28.13%
34.00%
100.00%
56.26%
56.26%
56.26%
14.07%
56.26%
56.26%
50.00%
56.26%
100.00%
27.50%
100.00%
25.00%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
20.00%
26.00%
26.00%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
14.07%
56.26%
56.26%
43.00%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
Method
incorporation Country of operations
Country of
E
E
E
E
E
E
E
E
E
E
E
E
United States
Côte d’Ivoire
France
United States
United States
United States
Australia
China
United States
France
United States
Côte d’Ivoire
France
United States
United States
United States
Australia
United States
United States
France
United States
United States
Sweden
France
Germany
Mexico
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
Sweden
France
Germany
Mexico
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 Arab Emirates
United Arab Emirates
India
India
United States
United States
United States
United States
United States
United States
United States
China
France
United States
France
United States
United States
United States
South Africa
South Africa
South Africa
South Africa
United States
United States
United States
United States
Greece
Malta
United States
United States
India
India
United States
United States
United States
United States
United States
United States
United States
China
United States
United States
France
United States
United States
United States
United States
South Africa
South Africa
United States
United States
United States
United States
United States
Greece
Malta
United States
United States
Business
segment Statutory corporate name
Gas, Renewables & Power (contd)
LA Basin Solar III, LLC
Lampiris S.A.
Lemoore Stratford Land Holdings IV, LLC
Livingston Ridge Solar LLC
Loving Solar LLC
Lucerne Valley Solar I, LLC
Lucerne Valley Solar One Holdings, LLC
Luis Solar, LLC
Luna Valley Solar I, LLC
Lux II Residential Solar Fund, LLC
Lux Residential Solar Fund, LLC
Malina Holdings, LLC
Meridian Solar Program, LLC
Minneola Solar I, LLC
Missiles & Space Batteries Limited
Mojave Solar Investment, LLC
Mulilo Prieska PV (RF) Proprietary Limited
Naidirem Holdings, LLC
Napa Sanitation District Solar, LLC
NorthStar Energy Management, LLC
NorthStar Macys Colorado, LLC
Northstar Macys Maryland 2015, LLC
Northstar Macys US West 2016, LLC
Northstar Santa Clara County 2016, LLC
Ochoa Solar LLC
Oro Fields Solar, LLC
Parrey Class B Member, LLC
Parrey Holding Company, LLC
Parrey Parent, LLC
Parrey, LLC
PGC Plano I, LLC
Phantom Field Resources, LLC
Photon Residential Solar Fund, LLC
Photovoltaic Park Malta Limited
Photovoltaica Parka Veroia Anonymi Etaireia
Plano Parent I, LLC
Pluto Acquisition Company, LLC
Project Sunday Development, LLC
Project Sunday Holdings LLC
PV Salvador SPA
Redstone Solar I, LLC
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.
CONSOLIDATED FINANCIAL STATEMENTS
Note 18
–
Notes to the Consolidated Financial Statements
Method
incorporation Country of operations
Country of
E
E
E
E
E
United States
Belgium
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
Belgium
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 Kingdom
United Kingdom
United States
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
Malta
Greece
United States
United States
United States
United States
Chile
United States
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
Malta
Greece
United States
United States
United States
United States
Chile
United States
United States
China
Sweden
France
China
Sweden
France
United States
United States
Norway
Australia
Spain
Italy
Germany
Singapore
Australia
Netherlands
Brazil
Norway
Australia
Spain
Italy
Germany
Singapore
Australia
Netherlands
Brazil
United States
Czech Republic
Luxembourg
United States
Czech Republic
Luxembourg
% Group
interest
56.26%
100.00%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
50.00%
56.26%
27.00%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
20.00%
56.26%
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%
REGISTRATION DOCUMENT 2017
329
8
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 18
Business
segment Statutory corporate name
Gas, Renewables & Power (contd)
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
Sandy Hills Solar I, LLC
SGS Antelope Valley Development, LLC
Sgula (East) Green Energies Limited
Shams Power Company PJSC
Signal Rock Solar, LLC
Société d’exploitation de centrales photovoltaïques 1
Solaire Generation, LLC
Solar Carport NJ, LLC
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 Bay City I, LLC
Solar Star California I, LLC
Solar Star California IV, LLC
Solar Star California L (2), LLC
Solar Star California L (3), LLC
Solar Star California L, LLC
Solar Star California LX, LLC
Solar Star California LXII, LLC
Solar Star California LXIII, LLC
Solar Star California LXIV, LLC
Solar Star California LXV, LLC
Solar Star California LXVI, LLC
Solar Star California LXXV, LLC
Solar Star California LXXVI, LLC
Solar Star California LXXVII, 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 XLV, 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
330
REGISTRATION DOCUMENT 2017
% Group
interest
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
56.26%
56.26%
56.26%
56.26%
20.00%
56.26%
28.19%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
Method
incorporation Country of operations
Country of
France
Hong Kong
Japan
France
Hong Kong
Japan
United States
United States
United Kingdom
United Kingdom
Russia
Cyprus
France
Sweden
United States
United States
United States
Israel
Russia
Cyprus
France
Sweden
United States
United States
United States
United States
E
United Arab Emirates
United Arab Emirates
United States
United States
France
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
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
CONSOLIDATED FINANCIAL STATEMENTS
Note 18
–
Notes to the Consolidated Financial Statements
Business
segment Statutory corporate name
Gas, Renewables & Power (contd)
% Group
interest
Method
incorporation Country of operations
Country of
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
Solar Star Colorado II, LLC
Solar Star Colorado III Parent, LLC
Solar Star Colorado III, LLC
Solar Star Connecticut I, LLC
Solar Star Hawaii I, LLC
Solar Star Hawaii IV, LLC
Solar Star HI Air, LLC
Solar Star Illinois I, LLC
Solar Star Massachusetts II, LLC
Solar Star Massachusetts III, LLC
Solar Star New Jersey IV, LLC
Solar Star New York I, LLC
Solar Star NVUSD II, LLC
Solar Star Oceanside, LLC
Solar Star Oregon I, LLC
Solar Star Oregon II Parent, LLC
Solar Star Oregon III, LLC
Solar Star Palo Alto I, LLC
Solar Star Plano I, LLC
Solar Star Rancho CWD I, LLC
Solar Star Santa Cruz, LLC
Solar Star SH MA, LLC
Solar Star Texas II, LLC
Solar Star Texas IV, LLC
Solar Star YC, LLC
Solar University, LLC
SolarBridge Technologies Inc.
SolarStorage Fund A, LLC
SolarStorage Fund B, LLC
SolarStorage Fund C, LLC
South Hook CHP
South Hook LNG Terminal Company Limited
SPML Land Inc.
SPWR Energias Renovaveis Unipessoal Ltda
SPWR EW 2013-1, LLC
SPWR MS 2013-1, LLC
SPWR SS 1, LLC
SPWR UBS 2013-1, LLC
SPWR USB 2013-2, LLC
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
8.35%
8.35%
56.26%
56.26%
0.56%
28.13%
56.26%
0.56%
0.56%
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
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
United States
United States
United States
United States
United States
United States
United States
United States
8
E
E
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Philippines
Portugal
United States
United States
United States
United States
United States
Philippines
Portugal
United States
United States
United States
United States
United States
REGISTRATION DOCUMENT 2017
331
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 18
Business
segment Statutory corporate name
Gas, Renewables & Power (contd)
SPWR USB 2013-3, LLC
SSCA XLI Class B Member, LLC
SSCA XLI Holding Company, LLC
SSCA XXXI Managing Member, LLC
SSCO III Class B Holdings, LLC
SSCO III Holdings Company, LLC
SSCO III Managing Member, LLC
Strata Solar, LLC
SunFront I, LLC
SunPower Access I, LLC
SunPower AssetCo, LLC
SunPower Bermuda Holdings
SunPower Bobcat Solar, LLC
SunPower Capital Services, LLC
SunPower Capital, LLC
SunPower Commercial Holding Company I, LLC
SunPower Commercial Holding Company II, LLC
SunPower Commercial Holding Company III, LLC
SunPower Commercial Holding Company IV Parent, LLC
SunPower Commercial Holding Company IV, LLC
SunPower Commercial Holding Company V, LLC
SunPower Commercial Holding Company VI, LLC
SunPower Commercial II Class B, LLC
SunPower Commercial III Class B, LLC
SunPower Commercial Managing Member I, LLC
SunPower Corp Israel Limited
SunPower Corporation
SunPower Corporation (Switzerland) S.A.R.L.
SunPower Corporation Australia PTY Limited
SunPower Corporation Limited
SunPower Corporation Mexico, S. de R.L. de C.V.
SunPower Corporation Southern Africa (PTY) Limited
SunPower Corporation SPA
SunPower Corporation UK Limited
SunPower Corporation, Systems
SunPower DevCo, LLC
SunPower Development Company
SunPower El Pelicano Holding Company SPA
SunPower Energía SPA
SunPower Energy Corporation Limited
SunPower Energy Solutions France S.A.S.
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, SL
SunPower Engineering and Construction of Energy Production
and Trade (Turkey)
SunPower Foundation
SunPower France S.A.S.
SunPower GmbH
SunPower Helix I, LLC
SunPower HoldCo, LLC
SunPower Italia S.R.L.
SunPower Japan KK
SunPower Malaysia Manufacturing Sdn. Bhd.
SunPower Malta Limited
SunPower Manufacturing (PTY) Limited
332
REGISTRATION DOCUMENT 2017
% Group
interest
Method
incorporation Country of operations
Country of
0.56%
56.26%
56.26%
20.54%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
20.54%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
20.54%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
E
E
E
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
Bermuda
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
Israel
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
Bermuda
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
Israel
United States
United States
Switzerland
Australia
Hong Kong
Mexico
South Africa
Chile
Switzerland
Australia
Hong Kong
Mexico
South Africa
Chile
United Kingdom
United Kingdom
United States
United States
United States
Chile
Chile
United States
United States
United States
Chile
Chile
Hong Kong
United States
France
Canada
South Korea
Singapore
South Africa
Spain
Turkey
France
Canada
South Korea
Singapore
South Africa
Spain
Turkey
United States
United States
France
Germany
United States
United States
Italy
Japan
Malaysia
Malta
France
Germany
United States
United States
Italy
Japan
Malaysia
Malta
South Africa
South Africa
Business
segment Statutory corporate name
Gas, Renewables & Power (contd)
SunPower Manufacturing Corporation Limited
SunPower Manufacturing de Vernejoul
SunPower Miyako Parent, LLC
SunPower Muhendislik Insaat Enerji Üretim ve Ticaret A. S
SunPower Nanao Parent, LLC
SunPower Netherlands B.V.
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 NY CDG 1,LLC
SunPower Philippines Limited – Regional Operating Headquarters
SunPower Philippines Manufacturing Limited
SunPower Residential I, LLC
SunPower Residential II, LLC
SunPower Revolver HoldCo I Parent, LLC
SunPower Revolver HoldCo I, LLC
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 IX, LLC
Sunpower Solarprogram V, LLC
Sunpower Solarprogram VI, LLC
SunPower SolarProgram VII, LLC
SunPower SolarProgram VIII, LLC
SunPower Systems (Middle East Branch)
SunPower Systems Belgium SPRL
SunPower Systems International Limited
SunPower Systems Mexico S. de R.L. de C.V.
SunPower Systems S.A.R.L.
SunPower Systems S.A.R.L. (Dubai Branch)
SunPower Technologies France S.A.S.
SunPower Technology Limited
SunPower YC Holdings LLC
SunRise 1, LLC
Sunrise 2, LLC
Sunrise 3, LLC
Sunzil
Sunzil Caraibes
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
CONSOLIDATED FINANCIAL STATEMENTS
Note 18
–
Notes to the Consolidated Financial Statements
% Group
interest
Method
incorporation Country of operations
Country of
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
20.54%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
31.80%
56.26%
56.26%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
50.00%
56.26%
100.00%
100.00%
Hong Kong
France
United States
Turkey
United States
France
United States
Turkey
United States
United States
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
United States
United States
Cayman Islands
Cayman Islands
United States
United States
United States
United States
United States
China
India
Malaysia
United States
United States
United States
United States
United States
United States
United States
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
Netherlands
United States
United States
Philippines
Philippines
United States
United States
United States
United States
United States
China
India
Malaysia
United States
United States
United States
United States
United States
United States
United States
United Arab Emirates
United Arab Emirates
Belgium
Hong Kong
Mexico
Switzerland
United States
France
Belgium
United States
Mexico
Switzerland
United States
France
Cayman Islands
Cayman Islands
United States
United States
United States
United States
United States
United States
United States
United States
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
France
United States
United States
Germany
Israel
Germany
Israel
E
E
E
E
E
E
E
E
E
E
REGISTRATION DOCUMENT 2017
333
8
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 18
Business
segment Statutory corporate name
Gas, Renewables & Power (contd)
TEMASOL
Tenesol SPV1
Tenesol Venezuela
Texas Solar Nova 1, LLC
Tita Energy (PTY) Limited
Torimode (PTY) Limited
Toriprox (PTY) Limited
Torisol (PTY) Limited
Total Abengoa Solar Emirates Investment Company B.V.
Total Energie Do Brasil
Total Energie Gas GmbH
Total Énergie Gaz
TOTAL ENERGY SERVICES
Total Energy Ventures Europe
Total Energy Ventures International
Total Gas & Power Actifs Industriels
Total Gas & Power Asia Private Limited
Total Gas & Power Brazil
Total Gas & Power Chartering Limited
Total Gas & Power Limited
Total Gas & Power North America Inc.
Total Gas & Power Services Limited
Total Gas & Power Thailand
Total Gas Pipeline USA Inc.
Total Gas Y Electricidad Argentina S.A.
Total Gasandes
Total Gaz Electricité Holdings France
Total Midstream Holdings UK Limited
Total New Energies Limited
Total New Energies Ventures USA, Inc.
Total Solar
Total Solar International
Total Solar Latin America SPA
TOTAL SPRING FRANCE
Total SunPower El Pelicano S.A.
Total SunPower Energia S.A.
Total Tractebel Emirates O & M Company
Total Tractebel Emirates Power Company
Transportadora de Gas del Mercosur S.A.
TSGF SpA
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.
Victory Pass I, LLC
Whippletree Solar, LLC
White Wolf Solar, LLC
Wood Draw Solar LLC
Refining & Chemicals
Appryl S.N.C
Atlantic Trading and Marketing Financial Inc.
Atlantic Trading and Marketing Inc.
Balzatex S.A.S.
Barry Controls Aerospace S.N.C.
BASF Total Petrochemicals LLC
Bay Junction Inc.
334
REGISTRATION DOCUMENT 2017
% Group
interest
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
50.00%
56.26%
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%
56.26%
56.26%
50.00%
50.00%
32.68%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
56.26%
50.00%
100.00%
100.00%
100.00%
100.00%
40.00%
100.00%
Method
incorporation Country of operations
Country of
Morocco
France
Venezuela
United States
South Africa
South Africa
South Africa
South Africa
Morocco
France
Venezuela
United States
United States
South Africa
South Africa
South Africa
E
Netherlands
United Arab Emirates
Brazil
Germany
France
France
France
France
France
Singapore
France
Brazil
Germany
France
France
France
France
France
Singapore
France
United Kingdom
United Kingdom
United States
United Kingdom
United Kingdom
United States
United Kingdom
United Kingdom
France
United States
Argentina
France
France
United Kingdom
United Kingdom
United States
France
France
Chile
France
Chile
Chile
France
France
Argentina
Chile
United States
Mexico
Mexico
Mexico
Mexico
Mexico
United States
United States
United States
United States
France
United States
United States
France
France
United States
United States
France
United States
Argentina
France
France
United Kingdom
United Kingdom
United States
France
France
Chile
France
Chile
Chile
United Arab Emirates
United Arab Emirates
Argentina
Chile
United States
United States
United States
United States
United States
United States
United States
United States
United States
United States
France
United States
United States
France
France
United States
United States
E
E
E
E
Business
segment Statutory corporate name
Refining & Chemicals (contd)
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.
Espa S.A.R.L.
Ethylène Est
Feluy Immobati
FINA Technology, Inc.
FPL Enterprises, Inc.
Gasket (Suzhou) Valve Components Company, Limited
Gasket International SPA
Grande Paroisse S.A.
Gulf Coast Pipeline LP
Hanwha Total Petrochemical Co. Limited
HBA Hutchinson Brasil Automotive Ltda
Hutchinson (UK) Limited
Hutchinson (Wuhan) Automotive Rubber Products Company
Limited
Hutchinson Aéronautique & Industrie Limited
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.
% Group
interest
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%
99.98%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
14.66%
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%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Hutchinson Industrial Rubber Products (Suzhou) Company, Limited
100.00%
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
100.00%
100.00%
100.00%
100.00%
100.00%
30.00%
100.00%
100.00%
100.00%
100.00%
CONSOLIDATED FINANCIAL STATEMENTS
Note 18
–
Notes to the Consolidated Financial Statements
Method
incorporation Country of operations
Country of
Portugal
Germany
Portugal
Germany
E
United States
United States
France
Spain
Tunisia
Morocco
France
United States
United States
China
France
Spain
Tunisia
Morocco
France
United States
United States
China
Czech Republic
Czech Republic
China
Italy
France
China
Italy
France
Switzerland
Switzerland
France
France
Belgium
United States
United States
China
Italy
France
United States
South Korea
Brazil
France
France
Belgium
United States
United States
China
Italy
France
United States
South Korea
Brazil
United Kingdom
United Kingdom
China
Canada
France
United States
Germany
United States
United States
Argentina
Mexico
Portugal
China
Canada
France
United States
Germany
United States
United States
Argentina
Mexico
Portugal
8
United States
United States
Serbia
Brazil
Serbia
Brazil
United States
United States
Germany
Germany
Germany
Germany
United Kingdom
United Kingdom
Spain
China
Spain
United States
Japan
South Korea
Morocco
Spain
Spain
Poland
France
Portugal
Spain
China
Spain
United States
Japan
South Korea
Morocco
Spain
Spain
Poland
France
Portugal
E
E
E
REGISTRATION DOCUMENT 2017
335
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 18
Business
segment Statutory corporate name
Refining & Chemicals (contd)
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 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.
Hutchinson Vietnam Company Limited
Industrias Tecnicas De La Espuma SL
Industrielle Desmarquoy S.N.C.
Jéhier S.A.S.
JPR S.A.S.
KTN Kunststofftechnik Nobitz GmbH
Laffan Refinery Company Limited
Laffan Refinery Company Limited 2
LaPorte Pipeline Company LP
LaPorte Pipeline GP LLC
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
Ruwais Fertilizer Industries Limited
San Jacinto Rail Limited
Saudi Aramco Total Refining & Petrochemical Company
SCI Cibat
Sealants Europe
SigmaKalon Group B.V.
Société Béarnaise De Gestion Industrielle
Société du Pipeline Sud-Européen
Stillman Seal Corporation
Stop-Choc (UK) Limited
Techlam S.A.S.
Toseanergy
Total Activités Maritimes
Total Corbion PLA B.V.
Total Deutschland GmbH(c)
336
REGISTRATION DOCUMENT 2017
% Group
interest
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%
10.00%
10.00%
50.00%
50.00%
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%
33.33%
17.00%
37.50%
100.00%
34.00%
100.00%
100.00%
35.14%
100.00%
100.00%
100.00%
49.00%
100.00%
50.00%
100.00%
Method
incorporation Country of operations
Country of
United States
United States
France
France
France
Italy
Romania
United States
Mexico
United States
Czech Republic
Germany
Switzerland
Mexico
Tunisia
Vietnam
Spain
France
France
France
Germany
Qatar
Qatar
India
France
France
Italy
Romania
United States
Mexico
United States
Czech Republic
Germany
Switzerland
Mexico
Tunisia
Vietnam
Spain
France
France
France
Germany
Qatar
Qatar
United States
United States
France
United States
United States
France
United States
United States
France
United States
United States
France
United States
United States
United Kingdom
United Kingdom
United States
United States
France
Germany
Malta
France
Germany
Malta
United Kingdom
United Kingdom
France
Belgium
Germany
Qatar
Qatar
Belgium
France
France
Belgium
Germany
Qatar
Qatar
Belgium
France
United States
United States
United Arab Emirates
United Arab Emirates
United States
Saoudia Arabia
France
France
United States
Saoudia Arabia
France
France
Netherlands
Netherlands
France
France
France
France
United States
United States
United Kingdom
United Kingdom
France
Belgium
France
Netherlands
Germany
France
Belgium
France
Netherlands
Germany
E
E
E
E
E
E
E
E
E
E
E
E
E
Business
segment Statutory corporate name
Refining & Chemicals (contd)
Total Downstream UK PLC
Total European Trading
Total Laffan Refinery
Total Laffan Refinery II B.V.
Total Lindsey Oil Refinery Limited
Total New Energies USA, Inc.
Total Oil Trading S.A.
Total Olefins Antwerp
Total Opslag En Pijpleiding Nederland NV
Total PAR LLC
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 France
Total Raffinerie Mitteldeutschland GmbH
Total Refining & Chemicals
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
Vibrachoc SAU
Zeeland Refinery NV
Marketing & Services
Air Total (Suisse) S.A.
Air Total International S.A.
Alvea
Antilles Gaz
Aristea
Arteco
AS 24
AS 24 Tankservice GmbH
AS24 Belgie N.V.
AS24 Espanola S.A.
AS24 Fuel Cards Limited
AS24 Polska SP ZO.O.
Caldeo
Charvet La Mure Bianco
Compagnie Pétrolière de l’Ouest – CPO
CPE Énergies
Cristal Marketing Egypt
CONSOLIDATED FINANCIAL STATEMENTS
Note 18
–
Notes to the Consolidated Financial Statements
Method
incorporation Country of operations
Country of
United Kingdom
United Kingdom
France
France
France
France
Netherlands
Netherlands
United Kingdom
United Kingdom
United States
Switzerland
Belgium
Netherlands
United States
Belgium
United States
China
China
United States
Switzerland
Belgium
Netherlands
United States
Belgium
United States
China
China
Hong Kong
Hong Kong
China
Belgium
Belgium
Belgium
France
Spain
China
Belgium
Belgium
Belgium
France
Spain
United States
United States
United Kingdom
United Kingdom
Belgium
Belgium
France
Germany
France
France
Belgium
Belgium
Belgium
France
Germany
France
France
Belgium
United States
United States
Canada
Singapore
Canada
Switzerland
France
France
Spain
8
Canada
Singapore
Canada
Switzerland
France
France
Spain
Netherlands
Netherlands
E
E
Switzerland
Switzerland
France
France
Belgium
Belgium
France
Germany
Belgium
Spain
Switzerland
Switzerland
France
France
Belgium
Belgium
France
Germany
Belgium
Spain
United Kingdom
United Kingdom
Poland
France
France
France
France
Egypt
Poland
France
France
France
France
Egypt
REGISTRATION DOCUMENT 2017
337
% Group
interest
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%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
67.00%
99.98%
100.00%
55.00%
100.00%
100.00%
100.00%
100.00%
51.00%
49.99%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
80.78%
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 18
Business
segment Statutory corporate name
Marketing & Services (contd)
DCA-MORY-SHIPP
Egedis
Elf Oil UK Aviation Limited
Elf Oil UK Properties Limited
Fioulmarket.fr
Gapco Kenya Limited
Gapco Tanzania Limited
Gapco Uganda Limited
Guangzhou Elf Lubricants Company Limited
Gulf Africa Petroleum Corporation
Lubricants Vietnam Holding Limited
Michel Mineralölhandel GmbH
National Petroleum Refiners Of South Africa (PTY) Limited
Produits Pétroliers Stela
Quimica Vasca S.A. Unipersonal
Saudi Total Petroleum Products
Servauto Nederland B.V.
Société des transports pétroliers par pipeline
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
South Asia LPG Private Limited
Total (Africa) Limited
Total (Fiji) Limited
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 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
338
REGISTRATION DOCUMENT 2017
% Group
interest
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
77.00%
100.00%
100.00%
100.00%
18.22%
99.99%
100.00%
51.00%
100.00%
35.50%
98.98%
100.00%
100.00%
50.00%
50.00%
100.00%
100.00%
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%
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%
Method
incorporation Country of operations
Country of
France
France
France
France
United Kingdom
United Kingdom
United Kingdom
United Kingdom
E
E
E
E
E
E
E
France
Kenya
Tanzania
Uganda
China
Mauritius
Hong Kong
Germany
South Africa
France
Spain
Saoudia Arabia
Netherlands
France
France
France
France
France
Kenya
Tanzania
Uganda
China
Mauritius
Hong Kong
Germany
South Africa
France
Spain
Saoudia Arabia
Netherlands
France
France
France
France
South Korea
India
South Korea
India
United Kingdom
United Kingdom
Fiji Islands
France
France
Zambia
Belgium
Germany
Fiji Islands
France
France
Zambia
Belgium
Germany
United Kingdom
United Kingdom
Botswana
Burkina Faso
Cambodia
Cameroon
France
Botswana
Burkina Faso
Cambodia
Cameroon
France
Czech Republic
Czech Republic
China
China
Republic of the Congo
Republic of the Congo
France
Côte d’Ivoire
Denmark
Germany
Egypt
Italy
Spain
Argentina
Ethiopia
France
Philippines
China
Germany
France
France
Côte d’Ivoire
Denmark
Germany
Egypt
Italy
Spain
Argentina
Ethiopia
France
Philippines
China
Germany
France
Equatorial Guinea
Equatorial Guinea
Guinea
France
France
Jamaica
Guinea
France
France
Jamaica
Business
segment Statutory corporate name
Marketing & Services (contd)
Total Jordan PSC
Total Kenya
Total Lesotho (PTY) Limited
Total Liban
Total Liberia Inc.
Total Lubricants (China) Company Limited
Total Lubricants Taiwan Limited
Total Lubrifiants
Total Lubrifiants Algérie
Total Lubrifiants Service Automobile
Total Luxembourg S.A.
Total Madagasikara S.A.
Total Mali
Total Marine Fuels
Total Marketing Egypt
Total Marketing France
Total Marketing Gabon
Total Marketing Middle East Free Zone
Total Marketing Services
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 Niger S.A.
Total Nigeria PLC
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
CONSOLIDATED FINANCIAL STATEMENTS
Note 18
–
Notes to the Consolidated Financial Statements
Method
incorporation Country of operations
Country of
Jordan
Kenya
Lesotho
Lebanon
Liberia
China
Taiwan
France
Algeria
France
Luxembourg
Madagascar
Mali
Singapore
Egypt
France
Gabon
Jordan
Kenya
Lesotho
Lebanon
Liberia
China
Taiwan
France
Algeria
France
Luxembourg
Madagascar
Mali
Singapore
Egypt
France
Gabon
United Arab Emirates
United Arab Emirates
France
Chad
Uganda
Morocco
Mauritius
France
Mexico
Germany
Germany
Mozambique
Namibia
Netherlands
Niger
Nigeria
Singapore
India
France
France
Pakistan
Bahamas
China
Ghana
Puerto Rico
Philippines
Poland
France
France
Chad
Uganda
Morocco
Mauritius
France
Mexico
Germany
Germany
Mozambique
Namibia
Netherlands
Niger
Nigeria
Singapore
India
France
France
Pakistan
Pakistan
China
Ghana
Puerto Rico
Philippines
Poland
France
8
Democratic Republic
of Congo
Democratic Republic
of Congo
France
Romania
Senegal
China
China
South Africa
United States
Switzerland
Swaziland
Tanzania
China
Togo
France
Romania
Senegal
China
China
South Africa
United States
Switzerland
Swaziland
Tanzania
China
Togo
E
E
E
E
E
REGISTRATION DOCUMENT 2017
339
% Group
interest
100.00%
93.96%
50.10%
100.00%
100.00%
77.00%
63.00%
99.98%
78.90%
99.98%
100.00%
79.44%
100.00%
100.00%
80.78%
100.00%
90.00%
100.00%
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%
61.72%
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%
8
CONSOLIDATED FINANCIAL STATEMENTS
Notes to the Consolidated Financial Statements – Note 18
Business
segment Statutory corporate name
Marketing & Services (contd)
Total Tunisie
Total Turkey Pazarlama
Total UAE LLC
Total Uganda Limited
Total UK Limited
Total Ukraine LLC
Total Union Océane
Total Vietnam Limited
Total Vostok
Total Zambia
Total Zimbabwe Limited
Totalgaz Vietnam LLC
Upbeatprops 100 PTY Limited
V Energy S.A.
Corporate
Albatros
Elf Aquitaine
Elf Aquitaine Fertilisants
Elf Aquitaine Inc.
Elf Forest Products LLC
Etmofina
Omnium Reinsurance Company S.A.
Pan Insurance Limited
Septentrion Participations
Socap S.A.S.
Société Civile Immobilière CB2
Sofax Banque
Total American Services Inc.
Total Capital
Total Capital Canada Limited
Total Capital International
Total Consulting
Total Corporate Management (Beijing) Company Limited
Total Delaware Inc.
Total Développement Régional S.A.S.
Total Facilities Management Services (TFMS)
Total Finance
Total Finance Corporate Services Limited
Total Finance Global Services (TOFIG)
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
Total Global Financial Services
Total Global Human Ressources Services
Total Global Information Technology Services Belgium
Total Global IT Services (TGITS)
Total Global Procurement (TGP)
Total Global Procurement Belgium S.A. (TGPB)
Total Holding Allemagne
Total Holdings Europe
Total Holdings International B.V.
Total Holdings UK Limited
Total Holdings USA Inc.
Total International NV
340
REGISTRATION DOCUMENT 2017
% Group
interest
100.00%
100.00%
49.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
80.00%
100.00%
50.10%
70.00%
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%
99.98%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
Method
incorporation Country of operations
Country of
Tunisia
Turkey
Tunisia
Turkey
United Arab Emirates
United Arab Emirates
Uganda
Uganda
United Kingdom
United Kingdom
Ukraine
France
Vietnam
Russia
Zambia
Zimbabwe
Vietnam
South Africa
Ukraine
France
Vietnam
Russia
Zambia
Zimbabwe
Vietnam
South Africa
Dominican Republic
Dominican Republic
France
France
France
United States
United States
Belgium
Switzerland
Ireland
France
France
France
France
France
France
France
United States
United States
Belgium
Switzerland
Ireland
France
France
France
France
United States
United States
France
Canada
France
France
China
France
Canada
France
France
China
United States
United States
France
France
France
France
France
France
United Kingdom
United Kingdom
Belgium
Netherlands
Netherlands
United States
Netherlands
Netherlands
France
France
France
France
Belgium
France
France
Belgium
France
France
Belgium
Netherlands
Netherlands
United States
Netherlands
Netherlands
France
France
France
France
Belgium
France
France
Belgium
France
France
Netherlands
Netherlands
United Kingdom
United Kingdom
United States
Netherlands
United States
Netherlands
CONSOLIDATED FINANCIAL STATEMENTS
Note 18
–
Notes to the Consolidated Financial Statements
% Group
interest
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100,00%
0,00%
100,00%
100,00%
Method
incorporation Country of operations
Country of
France
Canada
France
Canada
South Africa
Netherlands
France
Belgium
United States
United States
Canada
France
France
France
Belgium
United States
United States
Canada
France
France
United Kingdom
United Kingdom
Business
segment Statutory corporate name
Corporate (contd)
Total Learning Solutions (TLS)
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 S.A.
Total Treasury
Total UK Finance Limited
(a)
(b)
(c)
% of control different from % of interest: 49%.
% of control different from % of interest: 20,02%.
Multi-segment entities.
8
REGISTRATION DOCUMENT 2017
341
[THIS PAGE INTENTIONALLY LEFT BLANK]
9
SUPPLEMENTAL OIL AND GAS
INFORMATION (UNAUDITED)
9.1
Oil and gas information pursuant
to FASB Accounting Standards
Codification 932
9.1.1
Assessment process for reserves
9.1.2
Proved developed reserves
9.1.3
Proved undeveloped reserves
9.1.4
9.1.5
Estimated proved reserves of oil,
bitumen and gas
Results of operations for oil
and gas producing activities
9.1.6
Cost incurred
9.1.7
9.1.8
Capitalized costs related to oil
and gas producing activities
Standardized measure of discounted
future net cash flows
(excluding transportation)
9.1.9
Changes in the standardized measure
of discounted future net cash flows
344
344
344
345
345
354
356
357
358
360
9.2
Other information
9.2.1
Net gas production, production prices
and production costs
361
361
9.3
Report on the payments made to
governments (Article L. 225-102-3 of the
French Commercial Code)
363
9.3.1
9.3.2
Reporting by country and type
of Payment
Reporting of Payments by Project
and by type of Payment,
and by Government
and by type of Payment
364
365
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
REGISTRATION DOCUMENT 2017
343
9
SUPPLEMENTAL OIL AND GAS INFORMATION
Oil and gas information pursuant to FASB Accounting Standards Codification 932
9.1
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.
9.1.1
Assessment process for reserves
Reserves estimations are performed 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, 2017, in accordance with the
standards applied by the Group, based on an
independent
from DeGolyer & MacNaughton. These
third-party
independently assessed reserves account for 50% of the total net
proved reserves TOTAL held in Russia as of December 31, 2017.
report
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, reserves methodology, drilling and development studies.
internal control process related to reserves estimation
An
formalized and involves the following elements:
is
(cid:142)
(cid:142)
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 their knowledge of the affiliate. All members of this
group, chaired by the Reserves Vice-President (“RVP”) of the
9.1.2
Proved developed reserves
Development and Support to Operations division and composed of
at least three Technical Reserves Committee members, are
knowledgeable
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.
the SEC guidelines
in
(cid:142)
At the end of the annual review carried out by the Development
and Support to Operations division, an SEC Reserves Committee
chaired by the Exploration & Production Senior Vice President
Corporate Affairs and comprised of the Development and Support
to Operations, Strategy-Business Development-R&D, Finance 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 20 years of experience in the oil and gas industry. He previously
held several management positions in the Group in reservoir
engineering and geosciences, and in the field of reserves evaluation
and control process. He holds an engineering degree from École
Centrale Paris, France, and a petroleum engineering degree from
École Nationale Supérieure du Pétrole et des Moteurs (IFP School),
France. He is a member of the UNECE (United Nations Economic
Commission for Europe) Expert Group on Resource Classification,
and an active member of the Society of Petroleum Engineers.
reserves of
As of December 31, 2017, proved developed
hydrocarbons
(oil, bitumen and gas) were 7,010 Mboe and
represented 61% of the proved reserves. As of December 31, 2016,
proved developed reserves of hydrocarbons (oil, bitumen and gas)
were 6,667 Mboe and represented 58% of the proved reserves. As of
December 31, 2015, proved developed reserves of hydrocarbons (oil,
bitumen and gas) were 6,186 Mboe and represented 53% of the
proved reserves. Over the past three years, the average of proved
developed reserves renewal has remained above 1,300 Mboe per
year, illustrating TOTAL’s ability to consistently transfer proved
undeveloped reserves into developed status.
344
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Oil and gas information pursuant to FASB Accounting Standards Codification 932
SUPPLEMENTAL OIL AND GAS INFORMATION
9.1.3
Proved undeveloped reserves
As of December 31, 2017, TOTAL’s combined proved undeveloped
reserves of oil and gas were 4,465 Mboe compared to 4,852 Mboe
at the end of 2016. The decrease of 387 Mboe of proved
undeveloped reserves was due to the addition of +371 Mboe of
undeveloped reserves related to extensions and discoveries, +150
Mboe due to revisions of previous estimates, -44 Mboe related to
acquisitions/divestitures and -864 Mboe due to the transfer of proved
undeveloped reserves to proved developed reserves. In 2017, the
cost incurred to develop proved undeveloped reserves (PUDs) was
$7.6 billion, which represented 76% of 2017 development costs
incurred, and was related to projects located for the most part in
Nigeria, Canada, Angola, Australia, Norway, the United Arab
Emirates, the United States and Iraq.
The revisions to previous estimates of +150 Mboe were due to:
(cid:142)
(cid:142)
+21 Mboe due to new information obtained from drilling and
production history;
+141 Mboe due to economic factors as a result of higher yearly
average hydrocarbon prices, including primarily a rebooking of
some Canadian oil sands proved undeveloped reserves, as well as
a delayed economic limit on a number of other assets, partly
compensated by lower entitlement share from production sharing
and risked service contracts; and
(cid:142)
-12 Mboe due to other revisions.
The overall decrease of -44 Mboe related to acquisitions/divestitures
consists of the sale of 3.15% in Fort Hills (Canada), the sale of a 15%
interest in Gina Krog (Norway), assets’ sales in Gabon, the acquisition
by Novatek of Severneft-Urengoy and an acquisition of a 10%
interest in Absheron (Azerbaijan).
Approximately 63% of the Group’s proved undeveloped reserves are
associated with producing projects and are located for the most part
in Russia, Canada, Norway, Kazakhstan, Qatar, the United Arab
Emirates and Nigeria. 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. TOTAL has demonstrated in recent years
the Group’s ability to develop and bring into production similar large
the development of
scale and complex projects,
deep-offshore fields in Angola, Nigeria, the Republic of the Congo,
West of Shetland fields in the United Kingdom, heavy oil projects in
Venezuela and LNG projects in Russia, Qatar, Nigeria and Indonesia.
including
In addition, some 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.
9.1.4
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, 2017, 2016 and 2015.
Quantities shown correspond to proved developed and undeveloped
reserves together with changes in quantities for 2017, 2016 and
2015.
The definitions used for proved, proved developed and proved
undeveloped oil and gas reserves are in accordance with the revised
Rule 4-10 of SEC Regulation S-X.
All references in the following tables to reserves or production are to
the Group’s entire share of such reserves or production. TOTAL’s
worldwide proved reserves include the proved reserves of its
consolidated subsidiaries as well as its proportionate share of the
proved reserves of equity affiliates.
Significant changes in proved reserves between 2016 and 2017 are
discussed below.
9
REGISTRATION DOCUMENT 2017
345
9
SUPPLEMENTAL OIL AND GAS INFORMATION
Oil and gas information pursuant to FASB Accounting Standards Codification 932
For consolidated subsidiaries, the revisions of +519 Mboe for the
year 2017 were due to:
The extensions in the Americas correspond mainly to recognition of
reserves in Brazil.
(cid:142)
(cid:142)
+299 Mboe due to new information obtained from drilling and
production history mainly in the United Kingdom, United Arab
Emirates, Nigeria and Norway;
+246 Mboe due to economic factors as a result of higher yearly
average hydrocarbon prices, including primarily a rebooking of
some Canadian oil sands proved undeveloped reserves, as well
as a delayed economic limit on a number of other assets mainly in
Republic of Congo, partly compensated by lower entitlement share
from production sharing and risked service contracts, in particular
in Iraq; and
(cid:142)
-26 Mboe due to other revisions.
The sales of reserves in place in the Americas correspond to the
decrease in interest in Fort Hills (Canada).
For equity affiliates, the revisions of +56 Mboe for the year 2017 were
due to:
(cid:142)
(cid:142)
+77 Mboe mainly due to new information obtained from drilling and
production history mainly in Qatar and Russia; and
-21 Mboe due to economic factors related to a lower entitlement
share as a result of higher yearly average hydrocarbon prices.
The extensions in Russia correspond mainly to the booking of
additional gas volumes in identified markets.
346
REGISTRATION DOCUMENT 2017
Oil and gas information pursuant to FASB Accounting Standards Codification 932
SUPPLEMENTAL OIL AND GAS INFORMATION
9.1.4.1
Changes in oil, bitumen and gas reserves
Consolidated subsidiaries
Europe and
Central Asia
(excl. Russia)
Africa
(excl. North
Africa)
Russia
Middle East
and
North Africa Americas
Proved developed and
undeveloped reserves
(in million barrels of oil equivalent)
BALANCE AS OF DECEMBER 31, 2014 – BRENT AT 101.27 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the YEAR
BALANCE AS OF DECEMBER 31, 2015 – BRENT AT 54.17 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2016 – BRENT AT 42.82 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2017 – BRENT AT 54.36 $/b
1,965
1
11
-
(28)
(137)
1,812
49
47
-
(27)
(155)
1,726
122
-
9
(17)
(162)
1,678
Minority interest in proved developed and undeveloped reserves as of
December 31, 2015 – Brent at 54.17 $/b
December 31, 2016 – Brent at 42.82 $/b
DECEMBER 31, 2017 – BRENT AT 54.36 $/b
Proved developed and
undeveloped reserves
(in million barrels of oil equivalent)
BALANCE AS OF DECEMBER 31, 2014 – BRENT AT 101.27 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2015 – BRENT AT 54.17 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2016 – BRENT AT 42.82 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2017 – BRENT AT 54.36 $/b
-
-
-
Europe and
Central Asia
(excl. Russia)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
29
-
-
-
-
(4)
25
1
-
-
(13)
(2)
11
2
-
-
-
(2)
11
-
-
-
Russia
2,182
96
-
56
(12)
(102)
2,220
16
331
-
(59)
(119)
2,389
17
124
35
-
(114)
2,451
Asia-
Pacific
1,050
62
7
-
-
(94)
Total
7,813
196
897
0
(264)
(652)
1,025
7,990
2,324
(4)
9
-
(76)
(233)
2,020
1
11
-
-
(230)
1,802
106
29
2
(28)
(232)
1,679
128
105
102
557
(7)
864
-
-
(105)
1,309
232
5
-
-
(104)
1,442
50
62
-
-
(104)
1,450
-
-
-
1,888
144
6
-
(160)
(79)
1,799
(234)
33
152
(21)
(90)
1,639
195
149
-
(52)
(115)
1,816
-
-
-
39
15
-
-
(97)
982
44
6
-
-
(89)
943
-
-
-
Equity affiliates
Africa
(excl. North
Africa)
Middle East
and
North Africa Americas
Asia-
Pacific
73
(2)
-
-
-
-
71
-
-
-
-
(1)
70
-
-
-
-
(7)
63
1,219
(10)
-
-
-
(88)
1,121
68
-
190
-
(87)
1,292
45
-
-
-
(100)
1,237
236
(44)
-
-
-
(14)
178
(1)
-
-
-
(12)
165
(6)
-
-
-
(12)
147
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
88
111
152
(61)
(678)
7,602
519
246
11
(97)
(704)
7,577
128
105
102
Total
3,710
40
-
56
(12)
(204)
3,590
83
331
190
(59)
(219)
3,916
56
124
35
-
(233)
3,898
9
REGISTRATION DOCUMENT 2017
347
9
SUPPLEMENTAL OIL AND GAS INFORMATION
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Proved developed and
undeveloped reserves
(in million barrels of oil equivalent)
AS OF DECEMBER 31, 2015 – BRENT AT 54.17 $/b
Proved developed and undeveloped reserves
Consolidated subsidiaries
Equity affiliates
Proved developed reserves
Consolidated subsidiaries
Equity affiliates
Proved undeveloped reserves
Consolidated subsidiaries
Equity affiliates
AS OF DECEMBER 31, 2016 – BRENT AT 42.82 $/b
Proved developed and undeveloped reserves
Consolidated subsidiaries
Equity affiliates
Proved developed reserves
Consolidated subsidiaries
Equity affiliates
Proved undeveloped reserves
Consolidated subsidiaries
Equity affiliates
AS OF DECEMBER 31, 2017 – BRENT AT 54.36 $/b
Proved developed and undeveloped reserves
Consolidated subsidiaries
Equity affiliates
Proved developed reserves
Consolidated subsidiaries
Equity affiliates
Proved undeveloped reserves
Consolidated subsidiaries
Equity affiliates
Consolidated subsidiaries and equity affiliates
Europe and
Central Asia
(excl. Russia)
Africa
(excl. North
Africa)
Russia
Middle East
and
North Africa Americas
Asia-
Pacific
1,812
1,812
-
1,009
1,009
-
803
803
-
1,726
1,726
-
1,025
1,025
-
701
701
-
1,678
1,678
-
1,100
1,100
-
578
578
-
2,245
25
2,220
1,070
16
1,054
1,175
9
1,166
2,400
11
2,389
1,017
7
1,010
1,383
4
1,379
2,462
11
2,451
1,344
8
1,336
1,118
3
1,115
2,091
2,020
71
1,173
1,161
12
918
859
59
1,872
1,802
70
1,141
1,132
9
731
670
61
1,742
1,679
63
1,206
1,192
14
536
487
49
2,430
1,309
1,121
2,062
1,070
992
368
239
129
2,734
1,442
1,292
2,281
1,158
1,123
453
284
169
2,687
1,450
1,237
2,256
1,177
1,079
431
273
158
1,977
1,799
1,025
1,025
178
626
549
77
1,351
1,250
101
1,804
1,639
165
979
897
82
825
742
83
1,963
1,816
147
907
836
71
1,056
979
77
-
246
246
-
779
779
-
982
982
-
224
224
-
758
758
-
943
943
-
197
197
-
746
746
-
Total
11,580
7,990
3,590
6,186
4,051
2,135
5,394
3,939
1,455
11,518
7,602
3,916
6,667
4,443
2,224
4,851
3,159
1,692
11,475
7,577
3,898
7,010
4,510
2,500
4,465
3,066
1,399
348
REGISTRATION DOCUMENT 2017
Oil and gas information pursuant to FASB Accounting Standards Codification 932
SUPPLEMENTAL OIL AND GAS INFORMATION
9.1.4.2
Changes in oil reserves
The oil reserves include crude oil, condensates and natural gas liquids reserves.
Proved developed and
undeveloped reserves
(in million barrels)
Consolidated subsidiaries
Europe and
Central Asia
(excl. Russia)
Africa
(excl. North
Africa)
Russia
Middle East
and
North Africa Americas
BALANCE AS OF DECEMBER 31, 2014 – BRENT AT 101.27 $/b
Revisions of previous estimates
1,043
(9)
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2015 – BRENT AT 54.17 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2016 – BRENT AT 42.82 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2017 – BRENT AT 54.36 $/b
4
-
(3)
(59)
976
22
14
-
(13)
(63)
936
42
-
3
(8)
(71)
902
Minority interest in proved developed and undeveloped reserves as of
December 31, 2015 – Brent at 54.17 $/b
December 31, 2016 – Brent at 42.82 $/b
DECEMBER 31, 2017 – BRENT AT 54.36 $/b
Proved developed and
undeveloped reserves
(in million barrels)
BALANCE AS OF DECEMBER 31, 2014 – BRENT AT 101.27 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2015 – BRENT AT 54.17 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2016 – BRENT AT 42.82 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2017 – BRENT AT 54.36 $/b
-
-
-
Europe and
Central Asia
(excl. Russia)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
26
-
-
-
-
(3)
23
1
-
-
(11)
(3)
10
-
-
-
-
(1)
9
-
-
-
Russia
225
34
-
6
(2)
(17)
246
42
15
-
(2)
(25)
276
16
12
4
-
(24)
284
1,688
3
8
-
(58)
(191)
1,450
6
11
-
-
(185)
1,282
94
18
2
(26)
(182)
1,188
115
95
93
327
(46)
856
-
-
(86)
1,051
239
4
-
-
(84)
1,210
57
38
-
-
(87)
1,218
-
-
-
88
27
2
-
-
(16)
101
(9)
11
-
(2)
(16)
85
7
91
-
-
(15)
168
-
-
-
Asia-
Pacific
207
10
-
-
-
(12)
205
6
-
-
-
(11)
200
2
-
-
-
(10)
192
Total
3,379
(15)
870
-
(61)
(367)
3,806
265
40
-
(26)
(362)
3,723
202
147
5
(34)
(366)
3,677
-
-
-
115
95
93
Equity affiliates
Africa
(excl. North
Africa)
Middle East
and
North Africa Americas
Asia-
Pacific
7
6
-
-
-
-
13
-
-
-
-
-
13
-
-
-
-
(2)
11
321
(11)
-
-
-
(50)
260
58
-
167
-
(53)
432
44
-
-
-
(66)
410
226
(42)
-
-
-
(14)
170
(1)
-
-
-
(12)
157
(6)
-
-
-
(11)
140
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
779
(13)
-
6
(2)
(81)
689
99
15
167
(2)
(90)
878
54
12
4
-
(103)
845
9
REGISTRATION DOCUMENT 2017
349
9
SUPPLEMENTAL OIL AND GAS INFORMATION
Oil and gas information pursuant to FASB Accounting Standards Codification 932
Proved developed and
undeveloped reserves
(in million barrels)
AS OF DECEMBER 31, 2015 – BRENT AT 54.17 $/b
Proved developed and undeveloped reserves(a)
Consolidated subsidiaries
Equity affiliates
Proved developed reserves
Consolidated subsidiaries
Equity affiliates
Proved undeveloped reserves
Consolidated subsidiaries
Equity affiliates
AS OF DECEMBER 31, 2016 – BRENT AT 42.82 $/b
Proved developed and undeveloped reserves(a)
Consolidated subsidiaries
Equity affiliates
Proved developed reserves
Consolidated subsidiaries
Equity affiliates
Proved undeveloped reserves
Consolidated subsidiaries
Equity affiliates
AS OF DECEMBER 31, 2017 – BRENT AT 54.36 $/b
Proved developed and undeveloped reserves(a)
Consolidated subsidiaries
Equity affiliates
Proved developed reserves
Consolidated subsidiaries
Equity affiliates
Proved undeveloped reserves
Consolidated subsidiaries
Equity affiliates
Consolidated subsidiaries and equity affiliates
Europe and
Central Asia
(excl. Russia)
Africa
(excl. North
Africa)
Russia
Middle East
and
North Africa Americas
Asia-
Pacific
976
976
-
445
445
-
531
531
-
936
936
-
476
476
-
460
460
-
902
902
-
541
541
-
361
361
-
270
23
246
151
15
136
118
8
110
286
10
276
152
7
145
134
3
131
293
9
284
176
8
168
117
2
115
1,463
1,450
13
836
833
3
627
617
10
1,295
1,282
13
819
816
3
476
466
10
1,199
1,188
11
853
849
4
346
338
8
1,310
1,051
260
1,061
846
215
250
205
45
1,642
1,210
432
1,309
955
354
333
255
78
1,628
1,218
410
1,321
1,000
321
307
217
90
271
101
170
145
71
74
126
30
96
242
85
157
151
73
78
91
12
79
308
168
140
145
77
68
163
91
72
205
205
-
17
17
-
188
188
-
200
200
-
14
14
-
186
186
-
192
192
-
10
10
-
182
182
-
Total
4,495
3,806
689
2,655
2,227
428
1,840
1,579
261
4,601
3,723
878
2,921
2,341
580
1,680
1,382
298
4,522
3,677
845
3,046
2,485
561
1,476
1,191
285
(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 2015, 2016 and 2017.
350
REGISTRATION DOCUMENT 2017
Oil and gas information pursuant to FASB Accounting Standards Codification 932
SUPPLEMENTAL OIL AND GAS INFORMATION
9.1.4.3
Changes in bitumen reserves
Proved developed and
undeveloped reserves
(in million barrels)
BALANCE AS OF DECEMBER 31, 2014 – BRENT AT 101.27 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2015 – BRENT AT 54.17 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2016 – BRENT AT 42.82 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2017 – BRENT AT 54.36 $/b
Proved developed reserves as of
December 31, 2015 – Brent at 54.17 $/b
December 31, 2016 – Brent at 42.82 $/b
DECEMBER 31, 2017 – BRENT AT 54.36 $/b
Proved undeveloped reserves as of
December 31, 2015 – Brent at 54.17 $/b
December 31, 2016 – Brent at 42.82 $/b
DECEMBER 31, 2017 – BRENT AT 54.36 $/b
There are no bitumen reserves for equity affiliates.
There are no minority interests for bitumen reserves.
Consolidated subsidiaries
Europe and
Central Asia
(excl. Russia)
Africa
(excl. North
Africa)
Russia
Middle East
and
North Africa Americas
Asia-
Pacific
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,145
130
-
-
(160)
(5)
1,110
(284)
-
-
-
(13)
813
189
-
-
(52)
(22)
928
100
160
142
1,010
653
786
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
1,145
130
-
-
(160)
(5)
1,110
(284)
-
-
-
(13)
813
189
-
-
(52)
(22)
928
100
160
142
1,010
653
786
9
REGISTRATION DOCUMENT 2017
351
9
SUPPLEMENTAL OIL AND GAS INFORMATION
Oil and gas information pursuant to FASB Accounting Standards Codification 932
9.1.4.4
Changes in gas reserves
Proved developed and
undeveloped reserves
(in billion cubic feet)
Consolidated subsidiaries
Europe and
Central Asia
(excl. Russia)
Africa
(excl. North
Africa)
Russia
Middle East
and
North Africa Americas
1,300
197
3,693
(92)
Asia-
Pacific
4,622
296
38
-
-
Total
17,767
400
151
-
(228)
24
-
-
(324)
(471)
(1,542)
3,301
4,485
16,548
347
126
874
(101)
(343)
4,204
(21)
323
-
-
189
85
-
-
605
391
874
(188)
(494)
(1,667)
4,265
233
16,563
656
35
-
-
542
34
(59)
(440)
(455)
(1,732)
42
-
-
(110)
1,429
(28)
7
-
-
(111)
1,297
(44)
131
-
-
(94)
1,290
4,066
4,078
16,004
-
-
-
-
-
-
-
-
-
64
48
44
3,203
(57)
7
-
(93)
(212)
2,848
(44)
-
-
-
(220)
2,584
52
53
-
(10)
(248)
2,431
64
48
44
Equity affiliates
Africa
(excl. North
Africa)
Middle East
and
North Africa Americas
Asia-
Pacific
356
(45)
-
-
-
-
311
(3)
-
-
-
(7)
301
4
-
-
-
(29)
276
4,897
6
-
-
-
(208)
4,695
51
-
132
-
(181)
4,697
3
-
-
-
(187)
4,513
62
(11)
-
-
-
(3)
48
(1)
-
-
-
(2)
45
(1)
-
-
-
(2)
42
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
15,823
287
-
267
(52)
(667)
15,658
(85)
1,717
132
(308)
(693)
16,421
9
607
164
-
(699)
16,502
BALANCE AS OF DECEMBER 31, 2014 – BRENT AT 101.27 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
4,934
55
40
-
(135)
(424)
BALANCE AS OF DECEMBER 31, 2015 – BRENT AT 54.17 $/b
4,470
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2016 – BRENT AT 42.82 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2016 – BRENT AT 54.36 $/b
143
173
-
(80)
(498)
4,208
434
-
34
(49)
(495)
4,132
Minority interest in proved developed and undeveloped reserves as of
December 31, 2015 – Brent at 54.17 $/b
December 31, 2016 – Brent at 42.82 $/b
DECEMBER 31, 2017 – BRENT AT 54.36 $/b
Proved developed and
undeveloped reserves
(in billion cubic feet)
BALANCE AS OF DECEMBER 31, 2014 – BRENT AT 101.27 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2015 – BRENT AT 54.17 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2016 – BRENT AT 42.82 $/b
Revisions of previous estimates
Extensions, discoveries and other
Acquisitions of reserves in place
Sales of reserves in place
Production for the year
BALANCE AS OF DECEMBER 31, 2017 – BRENT AT 54.36 $/b
-
-
-
Europe and
Central Asia
(excl. Russia)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15
1
-
-
-
(1)
15
(2)
-
-
(7)
(1)
5
2
-
-
-
-
7
-
-
-
Russia
10,508
337
-
267
(52)
(456)
10,604
(132)
1,717
-
(308)
(503)
11,378
3
607
164
-
(481)
11,671
352
REGISTRATION DOCUMENT 2017
Oil and gas information pursuant to FASB Accounting Standards Codification 932
SUPPLEMENTAL OIL AND GAS INFORMATION
Proved developed and
undeveloped reserves
(in billion cubic feet)
AS OF DECEMBER 31, 2015 – BRENT AT 54.17 $/b
Proved developed and undeveloped reserves
Consolidated subsidiaries
Equity affiliates
Proved developed reserves
Consolidated subsidiaries
Equity affiliates
Proved undeveloped reserves
Consolidated subsidiaries
Equity affiliates
AS OF DECEMBER 31, 2016 – BRENT AT 42.82 $/b
Proved developed and undeveloped reserves
Consolidated subsidiaries
Equity affiliates
Proved developed reserves
Consolidated subsidiaries
Equity affiliates
Proved undeveloped reserves
Consolidated subsidiaries
Equity affiliates
AS OF DECEMBER 31, 2017 – BRENT AT 54.36 $/b
Proved developed and undeveloped reserves
Consolidated subsidiaries
Equity affiliates(a)
Proved developed reserves
Consolidated subsidiaries
Equity affiliates
Proved undeveloped reserves
Consolidated subsidiaries
Equity affiliates
Consolidated subsidiaries and equity affiliates
Europe and
Central Asia
(excl. Russia)
4,470
4,470
-
3,021
3,021
-
1,449
1,449
Russia
10,619
15
10,604
4,890
6
4,884
5,729
9
-
5,720
4,208
4,208
-
2,912
2,912
-
1,296
1,296
11,383
5
11,378
4,606
3
4,603
6,777
2
-
6,775
4,132
4,132
-
2,964
2,964
-
1,168
1,168
11,678
7
11,671
6,262
4
6,258
5,416
3
-
5,413
Africa
(excl. North
Africa)
Middle East
and
North Africa Americas
Asia-
Pacific
3,159
2,848
311
1,657
1,610
47
1,502
1,238
264
2,885
2,584
301
1,582
1,545
37
1,303
1,039
264
2,707
2,431
276
1,749
1,692
57
958
739
219
6,124
1,429
4,695
5,511
1,277
4,234
613
152
461
5,994
1,297
4,697
5,356
1,157
4,199
638
140
498
5,803
1,289
4,514
5,151
1,013
4,138
652
276
376
3,349
3,301
48
2,153
2,133
20
1,196
1,168
28
4,249
4,204
45
3,774
3,751
23
475
453
22
4,108
4,066
42
3,493
3,476
17
615
590
25
4,485
4,485
-
1,378
1,378
-
3,107
3,107
-
4,265
4,265
-
1,260
1,260
-
3,005
3,005
-
4,078
4,078
-
1,127
1,127
-
2,951
2,951
-
Total
32,206
16,548
15,658
18,610
9,425
9,185
13,596
7,123
6,473
32,984
16,563
16,421
19,490
10,628
8,862
13,494
5,935
7,559
32,506
16,004
16,502
20,746
10,276
10,470
11,760
5,727
6,033
9
REGISTRATION DOCUMENT 2017
353
9
SUPPLEMENTAL OIL AND GAS INFORMATION
Oil and gas information pursuant to FASB Accounting Standards Codification 932
9.1.5
Results of operations for oil and gas producing activities
The following tables do not include revenues and expenses related to oil and gas transportation activities and LNG liquefaction and
transportation.
(M$)
2015
Revenues Non-Group sales
Group sales
Total Revenues
Production costs
Exploration expenses
Depreciation, depletion and amortization
and valuation allowances
Other expenses(a)
Pre-tax income from producing activities(b)
Income tax
Results of oil and gas producing activities(b)
Consolidated subsidiaries
Europe and
Central Asia
(excl. Russia)
Africa
(excl. North
Africa)
Russia
Middle East
and
North Africa Americas
Asia-
Pacific
Total
1,345
3,816
5,161
(1,521)
(661)
(2,415)
(350)
214
458
672
-
129
129
(34)
(3)
(203)
(16)
(127)
(4)
(131)
989
7,816
8,805
(1,779)
(615)
(6,155)
(722)
(466)
(220)
(686)
2,340
1,858
4,198
(659)
(226)
(1,344)
(2,756)
(787)
(123)
(910)
970
271
3,013
8,657
356
14,246
1,241
3,369
22,903
(497)
(114)
(456)
(372)
(4,946)
(1,991)
(1,548)
(3,483)
(15,148)
(280)
(121)
(1,198)
(1,063)
(173)
210
(988)
(4,245)
(3,427)
148
(1,236)
(3,279)
(a)
(b)
Included production taxes and accretion expense as provided for by IAS 37 ($497 million in 2015).
Including adjustment items 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.
2016
Revenues Non-Group sales
Group sales
Total Revenues
Production costs
Exploration expenses
Depreciation, depletion and amortization and valuation allowances
Other expenses(a)
Pre-tax income from producing activities(b)
Income tax
Results of oil and gas producing activities(b)
1,075
3,046
4,121
(1,083)
(512)
(3,421)
(339)
(1,234)
818
(416)
-
72
72
(30)
(3)
(89)
(8)
(58)
14
(44)
507
6,826
7,333
(1,601)
(108)
(4,566)
(615)
443
(143)
300
613
3,033
3,646
(478)
(368)
(599)
(2,328)
(127)
(205)
(332)
963
494
2,113
5,271
444
13,915
1,457
2,557
19,186
(488)
(196)
(603)
(224)
(54)
(27)
(81)
(351)
(77)
(4,031)
(1,264)
(1,191)
(10,469)
(97)
841
(184)
657
(3,611)
(189)
273
84
(a)
(b)
Included production taxes and accretion expense as provided for by IAS 37 ($507 million in 2016).
Including adjustment items 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.
2017
Revenues Non-Group sales
Group sales
Total Revenues
Production costs
Exploration expenses
Depreciation, depletion and amortization and valuation allowances
Other expenses(a)
Pre-tax income from producing activities(b)
Income tax
Results of oil and gas producing activities(b)
1,454
3,932
5,386
(1,072)
(419)
(2,928)
(352)
615
(776)
(161)
-
41
41
(14)
(2)
(36)
(7)
(18)
(2)
(20)
975
8,486
9,461
(1,350)
(164)
(5,790)
(775)
1,382
(853)
529
934
3,706
4,640
(434)
(10)
(511)
(2,619)
1,066
(469)
597
1,335
2,160
6,858
821
453
17,439
2,156
2,613
24,297
(601)
(193)
(2,569)
(338)
(318)
(76)
(820)
(121)
(1,545)
1,278
387
(1,158)
(482)
796
(3,789)
(864)
(12,654)
(4,212)
2,778
(2,195)
583
(a)
(b)
Included production taxes and accretion expense as provided for by IAS 37 ($525 million in 2017).
Including adjustment items applicable to ASC 932 perimeter, amounting to a net charge of $3,712 million before tax and $3,305 million after tax, essentially related to asset
impairments.
354
REGISTRATION DOCUMENT 2017
Oil and gas information pursuant to FASB Accounting Standards Codification 932
SUPPLEMENTAL OIL AND GAS INFORMATION
(M$)
2015
Revenues Non-Group sales
Group sales
Total Revenues
Production costs
Exploration expenses
Depreciation, depletion and amortization and valuation allowances
Other expenses
Pre-tax income from producing activities
Income tax
Results of oil and gas producing activities
2016
Revenues Non-Group sales
Group sales
Total Revenues
Production costs
Exploration expenses
Depreciation, depletion and amortization and valuation allowances
Other expenses
Pre-tax income from producing activities
Income tax
Results of oil and gas producing activities
2017
Revenues Non-Group sales
Group sales
Total Revenues
Production costs
Exploration expenses
Depreciation, depletion and amortization and valuation allowances
Other expenses
Pre-tax income from producing activities
Income tax
Results of oil and gas producing activities
Equity affiliates
Europe and
Central Asia
(excl. Russia)
Africa
(excl. North
Africa)
Russia
Middle East
and
North Africa Americas
Asia-
Pacific
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
670
-
670
(127)
(1)
(58)
(134)
350
(65)
285
831
-
831
(103)
(4)
(137)
(109)
478
(80)
398
1,027
8
1,034
(106)
(5)
(149)
(187)
587
(104)
483
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
81
-
81
-
-
-
(9)
72
-
72
812
2,404
3,216
(295)
-
(400)
(1,638)
883
(184)
699
399
2,104
2,503
(246)
-
(496)
(1,274)
487
(107)
380
1,526
2,247
3,774
(283)
-
(423)
(2,309)
759
(212)
547
380
10
390
(54)
-
(98)
(170)
68
(36)
32
310
(11)
299
(42)
-
(94)
(116)
47
55
102
351
19
370
(55)
-
(88)
(159)
67
(5)
62
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
1,862
2,414
4,276
(476)
(1)
(556)
(1,942)
1,301
(285)
1,016
1,540
2,093
3,633
(391)
(4)
(727)
(1,499)
1,012
(132)
880
2,985
2,274
5,259
(444)
(5)
(660)
(2,664)
1,485
(321)
1,164
9
REGISTRATION DOCUMENT 2017
355
9
SUPPLEMENTAL OIL AND GAS INFORMATION
Oil and gas information pursuant to FASB Accounting Standards Codification 932
9.1.6
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$)
2015
Proved property acquisition
Unproved property acquisition
Exploration costs
Development costs(a)
TOTAL COST INCURRED
2016
Proved property acquisition
Unproved property acquisition
Exploration costs
Development costs(a)
TOTAL COST INCURRED
2017
Proved property acquisition
Unproved property acquisition
Exploration costs
Development costs(a)
TOTAL COST INCURRED
Share of incurred costs
(M$)
2015
Proved property acquisition
Unproved property acquisition
Exploration costs
Development costs(a)
TOTAL COST INCURRED
2016
Proved property acquisition
Unproved property acquisition
Exploration costs
Development costs(a)
TOTAL COST INCURRED
2017
Proved property acquisition
Unproved property acquisition
Exploration costs
Development costs(a)
TOTAL COST INCURRED
Consolidated subsidiaries
Europe and
Central Asia
(excl. Russia)
Africa
(excl. North
Africa)
Russia
Middle East
and
North Africa Americas
57
-
618
4,735
5,410
102
5
594
3,041
3,742
47
13
415
1,445
1,919
-
4
3
97
104
1
-
3
30
34
-
-
2
20
22
59
26
287
7,582
7,954
31
19
145
5,977
6,172
1
56
170
3,544
3,771
1,039
1,205
263
600
3,107
10
1
93
729
833
1
5
61
948
1,014
-
199
515
3,143
3,857
415
289
387
2,032
3,123
14
153
388
1,957
2,512
Asia-
Pacific
10
4
261
2,381
2,656
-
15
166
898
Total
1,165
1,438
1,947
18,538
23,088
559
329
1,388
12,707
1,079
14,983
-
507
141
1,073
1,721
63
734
1,177
8,987
10,959
Equity affiliates
Europe and
Central Asia
(excl. Russia)
Africa
(excl. North
Africa)
Russia
Middle East
and
North Africa Americas
Asia-
Pacific
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
218
14
-
405
637
-
-
-
243
243
-
-
-
219
219
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8
398
406
35
-
7
502
544
-
-
4
625
629
-
-
-
83
83
-
-
-
61
61
-
-
-
88
88
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
218
14
8
886
1,126
35
-
7
806
848
-
-
4
932
936
(a)
Including asset retirement costs capitalized during the year and any gains or losses recognized upon settlement of asset retirement obligation during the year.
356
REGISTRATION DOCUMENT 2017
Oil and gas information pursuant to FASB Accounting Standards Codification 932
SUPPLEMENTAL OIL AND GAS INFORMATION
9.1.7
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$)
As of December 31, 2015
Proved properties
Unproved properties
TOTAL CAPITALIZED COSTS
Accumulated depreciation, depletion
and amortization
Net capitalized costs
As of December 31, 2016
Proved properties
Unproved properties
TOTAL CAPITALIZED COSTS
Accumulated depreciation, depletion
and amortization
Net capitalized costs
As of December 31, 2017
Proved properties
Unproved properties
TOTAL CAPITALIZED COSTS
Accumulated depreciation, depletion
and amortization
Net capitalized costs
(M$)
As of December 31, 2015
Proved properties
Unproved properties
TOTAL CAPITALIZED COSTS
Accumulated depreciation, depletion
and amortization
Net capitalized costs
As of December 31, 2016
Proved properties
Unproved properties
TOTAL CAPITALIZED COSTS
Accumulated depreciation, depletion
and amortization
Net capitalized costs
As of December 31, 2017
Proved properties
Unproved properties
TOTAL CAPITALIZED COSTS
Accumulated depreciation, depletion
and amortization
Net capitalized costs
Europe and
Central Asia
(excl. Russia)
55,050
1,018
56,068
(28,341)
27,727
54,611
1,000
55,611
(29,227)
26,384
58,624
1,085
59,709
(34,370)
25,339
Europe and
Central Asia
(excl. Russia)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Russia
1,163
4
1,167
(699)
468
600
4
604
(385)
219
619
4
623
(421)
202
Russia
4,573
202
4,775
(655)
4,120
5,802
211
6,013
(1,026)
4,987
6,232
185
6,417
(1,344)
5,074
Consolidated subsidiaries
Africa
(excl. North
Africa)
Middle East
and North
Africa
Americas
Asia-Pacific
Total
73,842
4,362
78,204
(39,259)
38,945
78,638
4,357
82,995
(42,988)
40,007
79,793
4,289
84,082
(46,725)
37,357
12,816
2,058
14,874
(9,283)
5,591
11,275
1,657
12,932
(7,973)
4,959
12,544
1,331
13,874
(8,450)
5,424
19,630
8,915
28,545
(11,488)
17,057
23,392
8,611
32,003
(12,764)
19,239
25,354
8,265
33,619
(14,345)
19,274
22,886
997
23,883
(13,647)
10,236
23,622
1,037
24,659
(14,735)
9,924
24,626
1,630
26,256
(15,550)
10,706
185,387
17,354
202,741
(102,717)
100,024
192,138
16,666
208,804
(108,072)
100,732
201,560
16,604
218,163
(119,861)
98,303
Equity affiliates
Africa
(excl. North
Africa)
Middle East
and North
Africa
Americas
Asia-Pacific
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,323
-
4,323
(3,192)
1,131
5,029
-
5,029
(3,850)
1,179
5,583
-
5,583
(4,340)
1,243
1,500
-
1,500
(403)
1,097
1,600
-
1,600
(506)
1,094
1,676
-
1,676
(592)
1,084
9
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,396
202
10,598
(4,250)
6,348
12,431
211
12,642
(5,382)
7,260
13,491
185
13,676
(6,276)
7,401
REGISTRATION DOCUMENT 2017
357
9
SUPPLEMENTAL OIL AND GAS INFORMATION
Oil and gas information pursuant to FASB Accounting Standards Codification 932
9.1.8
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:
(cid:142)
(cid:142)
(cid:142)
estimates of proved reserves and the corresponding production
profiles are based on existing technical and economic conditions;
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;
(M$)
As of December 31, 2015
Future cash inflows
Future production costs
Future development costs
Future income taxes
Future net cash flows,
after income taxes
Discount at 10%
Standardized measure of discounted
future net cash flows
As of December 31, 2016
Future cash inflows
Future production costs
Future development costs
Future income taxes
Future net cash flows,
after income taxes
Discount at 10%
Standardized measure of discounted
future net cash flows
As of December 31, 2017
Future cash inflows
Future production costs
Future development costs
Future income taxes
Future net cash flows,
after income taxes
Discount at 10%
Standardized measure of discounted
future net cash flows
Europe and
Central Asia
(excl. Russia)
69,411
(20,263)
(20,418)
(7,516)
21,214
(10,784)
10,430
46,212
(15,428)
(15,334)
(2,599)
12,851
(5,172)
7,679
58,133
(16,644)
(13,302)
(9,385)
18,802
(8,106)
10,696
Russia
1,045
(512)
(495)
(28)
10
18
28
365
(179)
(219)
(1)
(34)
8
(26)
420
(221)
(115)
(36)
47
(3)
44
(cid:142)
(cid:142)
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
future net cash flows are discounted at a standard discount rate of
10%.
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.
Consolidated subsidiaries
Africa
(excl. North
Africa)
Middle East
and North
Africa
Americas
Asia-Pacific
Total
75,060
(27,455)
(24,843)
(12,050)
10,712
(3,450)
57,478
(46,510)
(5,099)
(1,839)
4,030
(2,194)
40,866
(24,103)
(11,104)
(1,105)
4,554
(4,014)
26,904
(8,355)
(6,289)
(3,046)
9,214
(5,299)
270,764
(127,198)
(68,248)
(25,584)
49,734
(25,723)
7,262
1,836
540
3,915
24,011
51,677
(19,519)
(19,300)
(7,480)
5,378
(64)
52,891
(39,108)
(4,995)
(2,517)
6,271
(2,986)
5,314
3,285
63,319
(18,554)
(15,319)
(11,403)
18,043
(4,977)
67,180
(50,240)
(5,648)
(4,450)
6,843
(3,065)
21,520
(14,267)
(5,487)
(989)
777
(815)
(38)
37,203
(19,372)
(6,337)
(921)
10,572
(6,562)
19,209
191,874
(7,495)
(4,805)
(955)
5,954
(2,666)
(95,996)
(50,140)
(14,541)
31,197
(11,695)
3,288
19,502
20,616
(5,780)
(4,044)
(1,721)
9,070
(3,567)
246,871
(110,811)
(44,765)
(27,916)
63,377
(26,280)
13,066
3,778
4,010
5,503
37,097
Minority interests in future net cash flows
(M$)
As of December 31, 2015
As of December 31, 2016
AS OF DECEMBER 31, 2017
-
-
-
-
-
-
448
253
862
-
-
-
-
-
-
-
-
-
448
253
862
358
REGISTRATION DOCUMENT 2017
Oil and gas information pursuant to FASB Accounting Standards Codification 932
SUPPLEMENTAL OIL AND GAS INFORMATION
Equity affiliates
Africa
(excl. North
Africa)
Middle East
and
North Africa
Americas
Asia-Pacific
Total
(M$)
As of December 31, 2015
Future cash inflows
Future production costs
Future development costs
Future income taxes
Future net cash flows,
after income taxes
Discount at 10%
Standardized measure of discounted
future net cash flows
As of December 31, 2016
Future cash inflows
Future production costs
Future development costs
Future income taxes
Future net cash flows,
after income taxes
Discount at 10%
Standardized measure of discounted
future net cash flows
As of December 31, 2017
Future cash inflows
Future production costs
Future development costs
Future income taxes
Future net cash flows,
after income taxes
Discount at 10%
Standardized measure of discounted
future net cash flows
Europe and
Central Asia
(excl. Russia)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Russia
21,779
(7,973)
(1,146)
(1,450)
11,210
(9,186)
52
-
(28)
(29)
(5)
(98)
36,231
(16,814)
(2,638)
(2,818)
13,961
(7,009)
7,736
(2,884)
(547)
(918)
3,387
(1,759)
2,024
(103)
6,952
1,628
22,393
(5,704)
(929)
(1,228)
14,532
(9,471)
5,061
30,769
(7,647)
(1,267)
(2,097)
19,758
(12,050)
7,708
(248)
(53)
(1)
(20)
(322)
139
(183)
365
(46)
(1)
(17)
301
(166)
135
30,045
(15,846)
(2,339)
(4,661)
7,199
(3,869)
5,815
(2,017)
(392)
-
3,406
(1,697)
3,330
1,709
39,518
(17,654)
(3,066)
(7,459)
11,338
(5,901)
6,719
(3,209)
(299)
-
3,211
(1,549)
5,437
1,662
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
65,798
(27,671)
(4,359)
(5,215)
28,553
(18,052)
10,501
58,005
(23,620)
(3,661)
(5,909)
24,815
(14,898)
9,917
77,371
(28,556)
(4,633)
(9,573)
34,608
(19,666)
14,942
9
REGISTRATION DOCUMENT 2017
359
9
SUPPLEMENTAL OIL AND GAS INFORMATION
Oil and gas information pursuant to FASB Accounting Standards Codification 932
9.1.9
Changes in the standardized measure of discounted future net cash flows
Consolidated subsidiaries
(M$)
Discounted future net cash flows at January 1
Sales and transfers, net of production costs
Net change in sales and transfer prices and in production costs
and other expenses
Extensions, discoveries and improved recovery
Changes in estimated future development costs
Previously estimated development costs incurred during the year
Revisions of previous quantity estimates
Accretion of discount
Net change in income taxes
Purchases of reserves in place
Sales of reserves in place
END OF YEAR
Equity affiliates
(M$)
Discounted future net cash flows at January 1
Sales and transfers, net of production costs
Net change in sales and transfer prices and in production costs
and other expenses
Extensions, discoveries and improved recovery
Changes in estimated future development costs
Previously estimated development costs incurred during the year
Revisions of previous quantity estimates
Accretion of discount
Net change in income taxes
Purchases of reserves in place
Sales of reserves in place
END OF YEAR
2015
60,774
(14,209)
(88,615)
933
4,412
19,694
(4,800)
6,077
42,252
-
(2,507)
24,011
2015
19,093
(1,860)
(14821)
-
1,572
1,272
315
1,909
2,901
186
(66)
10,501
2016
24,011
(12,015)
(21,189)
156
400
13,967
5,347
2,401
6,304
364
(244)
2017
19,502
(16,822)
26,699
3,244
(324)
8,952
2,427
1,950
(8,155)
98
(474)
19,502
37,097
2016
10,501
(1,745)
(3,840)
1,204
83
971
214
1,050
(340)
1,929
(110)
9,917
2017
9,917
(2,151)
7,075
57
(1,171)
789
783
992
(1,420)
71
-
14,942
360
REGISTRATION DOCUMENT 2017
SUPPLEMENTAL OIL AND GAS INFORMATION
Other information
9.2
Other information
9.2.1
Net gas production, production prices and production costs
2015
Natural gas production available
for sale (Bcf)(a)
Production prices(b)
Oil ($/b)(c)
Bitumen ($/b)
Natural gas ($/kcf)
Production costs per unit of production
($/boe)(d)
Total liquids and natural gas
Bitumen
2016
Natural gas production available for sale
(Bcf)(a)
Production prices(b)
Oil ($/b)(c)
Bitumen ($/b)
Natural gas ($/kcf)
Production costs per unit of production
($/boe)(d)
Total liquids and natural gas
Bitumen
2017
Natural gas production available for sale
(Bcf)(a)
Production prices(b)
Oil ($/b)(c)
Bitumen ($/b)
Natural gas ($/kcf)
Production costs per unit of production
($/boe)(d)
Total liquids and natural gas
Bitumen
Consolidated subsidiaries
Europe and
Central Asia
(excl. Russia)
Africa
(excl. North
Africa)
Middle East
and North
Africa
Russia
Americas
Asia-Pacific
Total
398
-
171
93
318
449
1,429
45.91
-
6.00
11.52
-
469
34.63
-
4.24
7.25
-
465
47.73
-
4.51
6.85
-
39.83
-
-
9.77
-
-
30.89
-
-
10.90
-
-
40.94
-
-
9.59
-
45.33
-
1.97
7.91
-
47.63
-
1.16
6.44
-
25.68
12.16
2.53
6.35
37.92
47.38
-
6.62
5.05
-
45.12
12.16
4.65
7.84
37.92
180
94
337
471
1,551
37.77
-
1.43
7.20
-
40.23
-
1.20
4.76
-
23.54
10.77
2.50
5.52
19.03
37.89
-
4.53
3.78
-
37.18
10.77
3.48
6.14
19.03
205
80
432
436
1,618
50.02
-
1.45
6.05
-
52.28
-
1.29
4.28
-
31.69
20.77
2.68
5.27
12.06
48.86
-
4.99
3.72
-
49.25
20.77
3.60
5.56
12.06
9
(a)
(b)
(c)
(d)
The reported volumes are different from those shown in the reserves table due to gas consumed in operations.
The volumes used for calculation of the average sales prices are the ones sold from the Group’s own production.
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 2015, 2016 and 2017.
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 2017
361
9
SUPPLEMENTAL OIL AND GAS INFORMATION
Other information
Equity affiliates
Europe and
Central Asia
(excl. Russia)
Africa
(excl. North
Africa)
Middle East
and North
Africa
Russia
Americas
Asia-Pacific
Total
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
448
25.37
-
1.23
1.26
-
492
19.36
-
1.21
0.88
-
461
26.28
-
1.49
0.95
-
-
-
-
-
-
-
5
-
-
-
-
-
25
-
-
2,35
-
-
200
48.34
-
3.28
3.4
-
173
38.61
-
1.85
2.92
-
176
50.03
-
2.23
2.88
-
-
32.2
-
-
4.05
-
-
28.49
-
-
3.59
-
-
34.36
-
-
4.94
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
648
42.69
-
1.99
2.37
-
670
32.77
-
1.43
1.82
-
662
43.51
-
1.78
1.96
-
2015
Natural gas production available
for sale (Bcf)(a)
Production prices(b)
Oil ($/b)(c)
Bitumen ($/b)
Natural gas ($/kcf)
Production costs per unit of production
($/boe)(d)
Total liquids and natural gas
Bitumen
2016
Natural gas production available
for sale (Bcf)(a)
Production prices(b)
Oil ($/b)(c)
Bitumen ($/b)
Natural gas ($/kcf)
Production costs per unit of production
($/boe)(d)
Total liquids and natural gas
Bitumen
2017
Natural gas production available
for sale (Bcf)(a)
Production prices(b)
Oil ($/b)(c)
Bitumen ($/b)
Natural gas ($/kcf)
Production costs per unit of production
($/boe)(d)
Total liquids and natural gas
Bitumen
(a)
(b)
(c)
(d)
The reported volumes are different from those shown in the reserves table due to gas consumed in operations.
The volumes used for calculation of the average sales prices are the ones sold from the Group’s own production.
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 2015, 2016 and 2017.
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.
362
REGISTRATION DOCUMENT 2017
Reportrr on the payments made to governments (A(( rtrr icle L. 225-102-3 of the French Commercial Code)
SUPPLEMENTAL OIL AND GAS INFORMATION
9.3
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 of
undertaking of which the activities consist, in whole or in part, of
exploration, prospection, discovery, development and extraction of
minerals, crude oil and natural gas, among others, fully consolidated
by TOTAL S.A.
Payment: a single payment of 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 extractive activities. Payment types
included in this report are the following:
(cid:142)
(cid:142)
(cid:142)
(cid:142)
Taxes: taxes and levies paid on income, production or profits,
excluding taxes levied on consumption such as added value taxes,
customs 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 the achievement or failure to
achieve certain production levels or certain targets, and discovery
of additional mineral reserves/deposits.
(cid:142)
(cid:142)
(cid:142)
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 country 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
in
proportion of 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.
to accounting standards) are reported
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.
9
(1)
Article L. 225-102-3 of the French Commercial Code transposes certain provisions set out in Directive 2013/34/UE of the European Parliament
and of the Council of June 26, 2013 (chapter 10).
REGISTRATION DOCUMENT 2017
363
9
SUPPLEMENTAL OIL AND GAS INFORMATION
Reportrr on the payments made to governments (A(( rtrr icle L. 225-102-3 of the French Commercial Code)
9.3.1
Reporting by country and type of Payment
(in thousands of dollars)
Europe and Central Asia
Azerbaijan
Italy
Kazakhstan
Netherlands
Norway
Russia
United Kingdom
Africa (excluding North Africa)
Angola
Côte d’Ivoire
Democratic Republic of the Congo
Gabon
Mauritania
Mozambique
Nigeria
Republic of the Congo
Senegal
Uganda
Middle East and North Africa
Algeria
Cyprus
Iraq
Libya
Oman
Qatar
United Arab Emirates
Americas
Argentina
Bolivia
Brazil
Canada
Colombia
Mexico
United States
Uruguay
Asia Pacific
Australia
Brunei
Cambodia
China
Indonesia
Myanmar
Thailand
Taxes
Royalties
29,238
-
36
-
(14,772)(a)
9,127
14,332
20,515
2,170,112
867,219
-
-
278,624
-
-
614,788
409,481
-
-
4,617,139
67,538
-
8,269
374,811
191,340
116,465
3,858,716
407,606
223,873
167,896
-
(300)(c)
1,267
2,582
12,288
-
522,207
5,639
14,619
-
10,497
265,689
23,801
201,962
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
57,060
-
-
187
9,208
-
-
47,665
-
-
-
-
-
-
-
-
-
License
fees
19,576
-
198
-
1,198
12,287
74
5,819
193,184
11,202
994
900
7,789
698
250
2,666
168,200(b)
52
433
2,755
-
411
-
-
-
-
2,344
37,506
4,177
1,505
812
25,207
-
2,181
3,466
158
3,635
-
5
310
-
3,320
-
-
License
bonus
887
887
-
-
-
-
-
-
31,760
130
-
-
-
16,500
-
-
130
15,000
-
4,372
-
4,372
-
-
-
-
-
59,832
20,472
210
6,224
-
-
-
32,926
-
48,732
-
-
-
4,000
-
1,000
43,732
Dividends
Infrastructure
improvements
Production
entitlements
Total of
Payments
-
-
-
-
-
-
-
-
7,048
55,110
111,859
-
66
-
-
6,982
17,353
-
-
-
-
-
-
37,757
-
887
300
24,335
(13,574)
21,414
52,163
26,334
5,063
87,918
2,130,443
4,618,480
-
-
-
5,063
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,027
40,536
-
-
1,638,020
2,516,571
-
-
-
-
-
994
1,927
332,012
17,198
250
46,205
488,464
1,152,123
-
150
-
-
-
-
-
-
-
-
-
375
-
375
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,959
-
-
581,770
15,202
433
1,827,394
6,451,660
198,086
265,624
-
-
4,783
8,269
1,014,437
1,389,248
12,418
602,453
203,758
718,918
-
3,861,060
24,312
-
23,812
500
-
-
-
-
-
586,691
248,522
193,798
7,723
34,115
1,267
4,763
96,345
158
690,064
1,264,638
-
-
-
22,996
577,172
89,896
-
5,639
14,624
310
37,493
846,181
114,697
245,694
TOTAL
7,746,302
57,060
256,656
145,583
5,063
95,341
4,727,323 13,033,328
(a)
(b)
(c)
Refund after carry back of losses of 2016.
Includes a settlement in relation with the relinquishment of permits.
Reimbursement of Alberta Scientific Research Experimental Development Tax Credit.
364
REGISTRATION DOCUMENT 2017
Reportrr on the payments made to governments (A(( rtrr icle L. 225-102-3 of the French Commercial Code)
SUPPLEMENTAL OIL AND GAS INFORMATION
9.3.2
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
fees
License
bonus
Dividends
Infrastructure
improvements
Production
entitlements
Total of
Payments
ALGERIA
Payments per Project
Tin Fouyé Tabankort
TOTAL
Payments per Government
Direction Générale des Impôts, Direction
des Grandes Entreprises c/o Sonatrach
Sonatrach
TOTAL
ANGOLA
Payments per Project
Block 17
Block 0
Block 14
Block 14K
Block 32
Block 17/06
Block 25
Block 40
Block 3/85
Block 3/91
TOTAL
Payments per Government
Caixa do Tesouro Nacional
Ministério dos Petróleos
Sonangol, E.P.
TOTAL
ARGENTINA
Payments per Project
Neuquen
Tierra del Fuego
Santa Cruz
Non-attributable
TOTAL
Payments per Government
Administracion Federal de Ingresos
Publicos
Secretaria de Energia, Republica
Argentina
Provincia del Neuquen
Provincia de Tierra del Fuego
Provincia de Santa Cruz
TOTAL
67,538
67,538
67,538
-
67,538
678,696
138,570
33,486
5,577
86
3
5
21
3,344
7,431
867,219
867,219
-
-
867,219
30,695
60,870
-
132,308
223,873
132,308
27,914
30,695
32,956
-
223,873
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,221
824
465
222
159
81
103
127
-
-
11,202
519
10,683
-
11,202
-
-
-
-
-
-
-
-
130
-
-
-
-
-
-
130
-
130
-
130
300
3,788
89
-
16,217
4,255
-
-
4,177
20,472
-
555
300
3,266
56
-
-
16,217
4,255
-
4,177
20,472
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
198,086
198,086
265,624
265,624
198,086
198,086
67,538
198,086
265,624
1,551,369
2,239,286
-
82,692
3,959
139,394
116,643
9,888
-
-
-
-
-
-
245
84
108
148
3,344
7,431
1,638,020
2,516,571
-
-
867,738
10,813
1,638,020
1,638,020
1,638,020
2,516,571
9
-
-
-
-
-
-
-
-
-
-
-
47,212
68,913
89
132,308
248,522
132,308
28,469
47,212
40,477
56
248,522
REGISTRATION DOCUMENT 2017
365
9
SUPPLEMENTAL OIL AND GAS INFORMATION
Reportrr on the payments made to governments (A(( rtrr icle L. 225-102-3 of the French Commercial Code)
(in thousands of dollars)
Taxes
Royalties
License
fees
License
bonus
Dividends
Infrastructure
improvements
Production
entitlements
Total of
Payments
AUSTRALIA
Payments per Project
GLNG
TOTAL
Payments per Government
Queensland Government, Office of State
Revenue
TOTAL
AZERBAIJAN
Payments per Project
Absheron
TOTAL
Payments per Government
State Oil Company of the Azerbaijan
Republic
TOTAL
BOLIVIA
Payments per Project
Ipati
Azero
Aquio
Itau
San Alberto
San Antonio
Rio Hondo
TOTAL
Payments per Government
Yacimientos Petroliferos Fiscales
Bolivianos (YPFB)
Servicio de Impuestos Nacionales (SIN)
c/o YPFB
Departamentos c/o YPFB
Ministerio de Hidrocarburos y Energia
Fundesoc c/o Indigeneous Communities
TOTAL
5,639
5,639
5,639
5,639
-
-
-
-
71,618
-
27,251
8,238
14,953
45,836
-
167,896
-
107,454
60,442
-
-
167,896
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
239
576
135
115
30
58
352
1,505
-
-
-
-
887
887
887
887
32
-
14
154
-
10
-
210
1,505
182
-
-
-
-
-
-
28
-
1,505
210
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
330
45
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,114
20,698
-
5,639
5,639
5,639
5,639
887
887
887
887
72,219
621
27,400
8,507
18,097
66,602
352
375
23,812
193,798
-
-
-
69
306
375
23,812
25,499
-
-
-
-
107,454
60,442
97
306
23,812
193,798
366
REGISTRATION DOCUMENT 2017
Reportrr on the payments made to governments (A(( rtrr icle L. 225-102-3 of the French Commercial Code)
SUPPLEMENTAL OIL AND GAS INFORMATION
(in thousands of dollars)
Taxes
Royalties
License
fees
License
bonus
Dividends
Infrastructure
improvements
Production
entitlements
Total of
Payments
BRAZIL
Payments per Project
Foz de Amazonas
Ceara (CE-M-661)
Xerelete (BC-2)
Termobahia
Lapa
Iara
Libra
Espirito Santo
Sul do Gato do Mato
Pelotas
Non-attributable
TOTAL
Payments per Government
Agencia National de Petroleo, Gas Natural
e Biocombustiveis
Conseilho Administrativo de Defesa
Economica (CADE)
Istituto Brasileiro do Meio Ambiente e dos
Recursos Naturais Renovaveis (IBAMA)
Receita Federal
Pre-sal Petroleo SA (PPSA)
TOTAL
BRUNEI
Payments per Project
Block B
TOTAL
Payments per Government
Brunei Government
TOTAL
CAMBODIA
Payments per Project
OCA – zone 3
TOTAL
Payments per Government
Ministry of Mines and Energy
TOTAL
CANADA
Payments per Project
Joslyn
Surmont
Northern Lights
Fort Hills
Other oil sands projects
Deer Creek
TOTAL
Payments per Government
Province of Alberta
Alberta Energy Regulator
Municipality of Wood Buffalo (Alberta)
Fort McKay First Nations (FMFN)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,619
14,619
14,619
14,619
-
-
-
-
-
(300)(a)
-
-
-
-
9,208
21,866
-
-
-
-
40
2,691
63
14
(300)
9,208
25,207
(300)(a)
-
-
-
9,208
-
-
-
5,095
210
19,478
424
TOTAL
(300)
9,208
25,207
(a)
Reimbursement of Alberta Scientific Research Experimental Development Tax Credit.
-
-
-
-
-
-
187
-
-
-
-
187
-
-
-
187
-
187
-
-
-
-
-
-
-
-
-
34
80
32
14
82
14
-
13
-
47
496
812
-
-
-
-
-
-
-
-
6,224
-
-
6,224
702
6,224
42
68
-
-
-
-
-
-
812
6,224
5
5
5
5
310
310
310
310
533
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
500
-
-
-
-
500
-
-
-
-
500
500
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
34
80
32
14
82
14
687
13
6,224
47
496
7,723
6,926
42
68
187
500
7,723
14,624
14,624
14,624
14,624
310
310
310
310
533
30,774
40
2,691
63
14
34,115
14,003
210
19,478
424
34,115
9
REGISTRATION DOCUMENT 2017
367
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9
SUPPLEMENTAL OIL AND GAS INFORMATION
Reportrr on the payments made to governments (A(( rtrr icle L. 225-102-3 of the French Commercial Code)
(in thousands of dollars)
Taxes
Royalties
License
fees
License
bonus
Dividends
Infrastructure
improvements
Production
entitlements
Total of
Payments
CHINA
Payments per Project
Sulige
Taiyang
TOTAL
10,497
10,497
Payments per Government (People's
Republic of China)
China National Petroleum Company
10,497
China National Offshore Oil Company
Payments per Government (Taiwan)
CPC Corporation Taiwan
TOTAL
COLOMBIA
Payments per Project
Non-attributable
TOTAL
Payments per Government
Dirección de Impuestos y aduanas
Nacionales
TOTAL
CÔTE D’IVOIRE
Payments per Project
CI-100
CI-605
TOTAL
Payments per Government
République de Côte d’Ivoire, Direction
Générale des Hydrocarbures
TOTAL
CYPRUS
Payments per Project
Block 11
Block 6
TOTAL
Payments per Government
Ministry of Energy, Commerce, Industry
and Tourism
TOTAL
DEMOCRATIC REPUBLIC OF THE CONGO
Payments per Project
Block 3
TOTAL
Payments per Government
Ministère des Hydrocarbures
Ministère de l’Environnement
Local Communities around Block 3
(Ministère des Hydrocarbures)
TOTAL
10,497
1,267
1,267
1,267
1,267
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
404
590
994
994
994
243
168
411
411
411
900
900
750
150
-
900
-
4,000
4,000
-
2,000
2,000
4,000
-
-
-
-
-
-
-
-
-
-
4,372
4,372
4,372
4,372
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,027
1,027
-
-
1,027
1,027
22,996
22,996
22,996
22,996
33,493
4,000
37,493
33,493
2,000
2,000
37,493
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,267
1,267
1,267
1,267
404
590
994
994
994
243
4,540
4,783
4,783
4,783
1,927
1,927
750
150
1,027
1,927
368
REGISTRATION DOCUMENT 2017
Reportrr on the payments made to governments (A(( rtrr icle L. 225-102-3 of the French Commercial Code)
SUPPLEMENTAL OIL AND GAS INFORMATION
(in thousands of dollars)
Taxes
Royalties
License
fees
License
bonus
Dividends
Infrastructure
improvements
Production
entitlements
Total of
Payments
GABON
Payments per Project
Concession Fields (Non-attributable)
Concession Anguille
Concession Grondin
Concession Torpille
Atora CEPP
Coucal CEPP
Avocette CEPP
Baudroie-Mérou CEPP
Hylia II CEPP
Diaba CEPP
Nziembou CEPP
Nziembou II CEPP
Rabi CEPP
Non-attributable
TOTAL
Payments per Government
Trésor Public Gabonais
Direction Générale des Hydrocarbures
République du Gabon
Direction Générale des Impôts
Ville de Port-Gentil
Miscellaneous PID beneficiaries
Miscellaneous PIH beneficiaries
18,059
49,922
41,019
31,152
13,597
1,305
17,122
28,348
5,077
-
167
-
40,856
32,000(b)
278,624
176,624
-
102,000
-
-
-
-
TOTAL
278,624
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,498
-
-
-
169
245
593
776
739
385
92
23
1,269
-
7,789
1,451
4,986
-
884
468
-
-
7,789
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,063
5,063
-
-
5,063
-
-
-
-
5,063
33,824(a)
-
-
-
3,767
-
-
1,212
1,733
-
-
-
-
-
40,536
-
-
26,603
-
12,311
245
1,377
40,536
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
55,381
49,922
41,019
31,152
17,533
1,550
17,715
30,336
7,549
385
259
23
42,125
37,063
332,012
178,075
4,986
133,666
884
12,779
245
1,377
332,012
(a)
(b)
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
Taxes related to sale of several mature assets.
INDONESIA
Payments per Project
Mahakam PSC
Tengah PSC
Mentawai
TOTAL
Payments per Government
Directorate General of Taxation, Ministry
of Finance
Satuan Khusus Kegiatan Usaha Hulu
Minyak dan Gas Bumi (SKK Migas)
TOTAL
265,130
559
-
265,689
265,689
-
265,689
-
-
-
-
-
-
-
-
-
3,320
3,320
-
3,320
3,320
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
569,175(a)
7,997
-
834,305
8,556
3,320
577,172
846,181
-
265,689
9
577,172
577,172
580,492
846,181
(a)
Government Production entitlement for export LNG is valued on a net-back price basis (revenues less costs, such as liquefaction and transportation costs).
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 2017
369
9
SUPPLEMENTAL OIL AND GAS INFORMATION
Reportrr on the payments made to governments (A(( rtrr icle L. 225-102-3 of the French Commercial Code)
(in thousands of dollars)
Taxes
Royalties
License
fees
License
bonus
Dividends
Infrastructure
improvements
Production
entitlements
Total of
Payments
IRAQ
Payments per Project
Halfaya
TOTAL
Payments per Government
Iraq government
TOTAL
ITALY
Payments per Project
Gorgoglione Unified License
TOTAL
Payments per Government
Regione Basilicata
Comune Corleto Perticara
TOTAL
KAZAKHSTAN
Payments per Project
Kashagan
TOTAL
Payments per Government
Government of the Republic of
Kazakhstan
Atyrau region c/o North Caspian
Operating Company b.v.
Mangistau region c/o North Caspian
Operating Company b.v.
TOTAL
LIBYA
8,269
8,269
8,269
8,269
36
36
-
36
36
-
-
-
-
-
-
Payments per Project
Areas 15, 16 & 32 (Al Jurf)
Areas 129 & 130
Areas 130 & 131
TOTAL
Payments per Government
National Oil Corporation
Ministry of Finance c/o National Oil
Corporation
TOTAL
129,494
219,067
26,250
374,811
245,317
129,494
374,811
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
198
198
151
47
198
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
66
66
-
66
66
-
-
-
-
-
-
-
-
-
8,269
8,269
8,269
8,269
300
300
151
149
300
6,982
6,982
17,353
17,353
24,335
24,335
-
17,353
17,353
4,225
2,757
6,982
-
-
17,353
4,225
2,757
24,335
-
-
-
-
-
-
-
206,848
671,614
135,975
336,342
890,681
162,225
1,014,437
1,389,248
1,014,437
1,259,754
-
129,494
1,014,437
1,389,248
370
REGISTRATION DOCUMENT 2017
Reportrr on the payments made to governments (A(( rtrr icle L. 225-102-3 of the French Commercial Code)
SUPPLEMENTAL OIL AND GAS INFORMATION
(in thousands of dollars)
Taxes
Royalties
License
fees
License
bonus
Dividends
Infrastructure
improvements
Production
entitlements
Total of
Payments
MAURITANIA
Payments per Project
Block C9
Block TA29
Block C7
Block C18
TOTAL
Payments per Government
Trésor Public de Mauritanie
SMHPM (Société Mauritanienne des
Hydrocarbures et du Patrimoine Minier)
TOTAL
MEXICO
Payments per Project
Perdido Block 2
Block 15
Salina 1
Salina 3
Mexico (non attributable)
TOTAL
Payments per Government
-
-
-
-
-
-
-
-
1,090
108
581
803
-
2,582
Servicio de Administracion Tributaria
2,582
Fondo Mexicano del Petroleo
Comision Nacional de Hidrocarburos
TOTAL
-
-
2,582
MOZAMBIQUE
Payments per Project
Rovuma Basin Area 3&6
TOTAL
Payments per Government
Instituto Nacional de Petroleo
TOTAL
MYANMAR
Payments per Project
Blocks M5 and M6
Blocks YWB
TOTAL
Payments per Government
Myanmar Ministry of Finance
Myanmar Oil and Gas Enterprise
TOTAL
-
-
-
-
23,801
-
23,801
23,801
-
23,801
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
170
140
300
88
698
-
-
10,000
6,500
16,500
398
16,500
300
698
-
16,500
841
82
445
614
199
2,181
-
1,982
199
2,181
250
250
250
250
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,000
1,000
-
1,000
1,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
170
140
10,300
6,588
17,198
16,898
300
17,198
1,931
190
1,026
1,417
199
4,763
2,582
1,982
199
4,763
250
250
250
250
9
89,896
113,697
-
1,000
89,896
114,697
-
89,896
89,896
23,801
90,896
114,697
REGISTRATION DOCUMENT 2017
371
9
SUPPLEMENTAL OIL AND GAS INFORMATION
Reportrr on the payments made to governments (A(( rtrr icle L. 225-102-3 of the French Commercial Code)
(in thousands of dollars)
Taxes
Royalties
License
fees
License
bonus
Dividends
Infrastructure
improvements
Production
entitlements
Total of
Payments
NETHERLANDS
Payments per Project
Non-attributable
Offshore Blocks
TOTAL
Payments per Government
Belastingdienst Nederland
TOTAL
(a)
Refund after carry back of losses of 2016.
NIGERIA
Payments per Project
Joint ventures with NNPC, operated –
Non-attributable
Joint ventures with NNPC, non operated –
Non-attributable
OML58 (joint venture with NNPC,
operated)
OML99 (joint venture with NNPC,
operated)
OML100 (joint venture with NNPC,
operated)
OML102 (joint venture with NNPC,
operated)
OML102 Ekanga (joint venture with
NNPC, non operated)
OML130
OML130 PSA (Akpo & Egina)
OML118 (Bonga)
OML138 (Usan)
Non-attributable
TOTAL
Payments per Government
Federal Inland Revenue Service
Department of Petroleum Resources,
Federal Government of Nigeria
Niger Delta Development Commission
Nigerian Maritime Administration & Safety
Agency, Federal Government of Nigeria
Nigerian National Petroleum Corporation
Federal Inland Revenue Service c/o
Nigerian National Petroleum Corporation
Department of Petroleum Resources c/o
Nigerian National Petroleum Corporation
TOTAL
(14,772)(a)
-
(14,772)
(14,772) (a)
(14,772)
-
61,424
28,646
32,261
21,441
103,263
8,548
-
3,138
104,723
26,378
224,966(a)
614,788
234,099
255,583
-
-
-
97,586
27,520
614,788
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,198
1,198
1,198
1,198
2,298
47
-
-
-
-
-
318
-
-
3
-
2,666
-
327
-
2,336
-
-
3
2,666
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14,094
8,642
-
-
-
-
-
-
18,784
4,189
496
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
488,464
-
-
(14,772)
1,198
(13,574)
(13,574)
(13,574)
16,392
70,113
28,646
32,261
21,441
103,263
8,548
318
21,922
597,376
26,877
224,966
46,205
488,464
1,152,123
-
-
46,205
-
-
-
-
-
-
-
-
234,099
255,910
46,205
2,336
488,464
488,464
-
-
97,586
27,523
46,205
488,464
1,152,123
(a)
This amount includes $367 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.
372
REGISTRATION DOCUMENT 2017
Reportrr on the payments made to governments (A(( rtrr icle L. 225-102-3 of the French Commercial Code)
SUPPLEMENTAL OIL AND GAS INFORMATION
(in thousands of dollars)
Taxes
Royalties
License
fees
License
bonus
Dividends
Infrastructure
improvements
Production
entitlements
Total of
Payments
NORWAY
Payments per Project
Asgard area
Ekofisk area
Heimdal area
Oseberg area
Sleipner area
Snohvit area
Troll area
Martin Linge PL043
Non-attributable
TOTAL
Payments per Government
Norwegian Tax Administration
Norwegian Petroleum Directorate
TOTAL
-
-
-
-
-
-
-
-
9,127
9,127
9,127
-
9,127
-
-
-
-
-
-
-
-
-
-
-
-
-
4,405
2,692
1,286
2,047
196
844
309
508
-
12,287
-
12,287(a)
12,287
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(a)
Including licence fees payments initiated before year end 2017 and credited for the beneficiary on first business day in January 2018.
OMAN
Payments per Project
Block 6
Block 53
TOTAL
Payments per Government
Oman Ministry of Oil and Gas
Oman Ministry of Finance
TOTAL
QATAR
Payments per Project
Al Khalij
Qatargas 1
Dolphin
TOTAL
Payments per Government
Qatar Petroleum
Qatar Ministry of Finance
TOTAL
188,686
2,654
191,340
-
191,340
191,340
16,494
39,096
60,875
116,465
-
116,465
116,465
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,418
12,418
12,418
-
12,418
-
47,616
554,837
602,453
602,453
-
602,453
4,405
2,692
1,286
2,047
196
844
309
508
9,127
21,414
9,127
12,287
21,414
188,686
15,072
203,758
12,418
191,340
203,758
16,494
86,712
615,712
718,918
602,453
116,465
718,918
9
REGISTRATION DOCUMENT 2017
373
9
SUPPLEMENTAL OIL AND GAS INFORMATION
Reportrr on the payments made to governments (A(( rtrr icle L. 225-102-3 of the French Commercial Code)
(in thousands of dollars)
Taxes
Royalties
License
fees
License
bonus
Dividends
Infrastructure
improvements
Production
entitlements
Total of
Payments
REPUBLIC OF THE CONGO
Payments per Project
CPP Haute Mer – Zone A
CPP Haute Mer – Zone B
CPP Haute Mer – Zone D
CPP Pointe Noire Grands Fonds (PNGF)
CPP Tchendo 2
Kombi, Likalala & Libondo
Litanzi & Tchibeli
Lianzi
Madingo
Secteur Sud
TOTAL
Payments per Government
Ministère des hydrocarbures
Trésor Public
Société Nationale des Pétroles Congolais
TOTAL
52,006
11,246
199,157
45,736
-
70,303
-
5,577
25,456
-
409,481
367,792
36,112
5,577
409,481
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,170
236
10,593
1,352
8
219
(12)
222
997
152,415(a)
168,200
-
168,162(a)
38
168,200
-
-
-
-
-
-
-
130
-
-
130
-
130
-
130
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,959
-
-
3,959
-
-
3,959
3,959
54,176
11,482
209,750
47,088
8
70,522
(12)
9,888
26,453
152,415
581,770
367,792
204,404
9,574
581,770
(a)
These amounts include payments made following the relinquishment of the permits of Secteur Sud (Tchibouela, Tchendo and Tchibeli Litanzi Loussima), ie discharging
payments for assets retirement obligations (130 millions USD) and for the interim period (22.4 millions USD).
RUSSIA
Payments per Project
Kharyaga
TOTAL
Payments per Government
Nenets Tax Inspection
Ministry of Energy
TOTAL
SENEGAL
Payments per Project
UDO
ROP
TOTAL
Payments per Government
État du Sénégal (Trésorier Général)
Société des Pétroles du Sénégal
État du Sénégal C/O Fondation Total
Sénégal
TOTAL
14,332
14,332
14,332
-
14,332
-
-
-
-
-
-
-
(a)
Amount to be transferred to the State of Senegal.
-
-
-
-
-
-
-
-
-
-
-
-
74
74
74
-
74
-
52
52
-
52
-
52
-
-
-
-
-
10,000
5,000
15,000
5,000
10,000(a)
-
15,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
150
150
-
-
150
150
37,757
37,757
-
37,757
37,757
-
-
-
-
-
-
-
52,163
52,163
14,406
37,757
52,163
10,000
5,202
15,202
5,000
10,052
150
15,202
374
REGISTRATION DOCUMENT 2017
Reportrr on the payments made to governments (A(( rtrr icle L. 225-102-3 of the French Commercial Code)
SUPPLEMENTAL OIL AND GAS INFORMATION
(in thousands of dollars)
Taxes
Royalties
License
fees
License
bonus
Dividends
Infrastructure
improvements
Production
entitlements
Total of
Payments
THAILAND
Payments per Project
Bongkot
TOTAL
Payments per Government
Revenue Department
Department of Mineral Fuels, Ministry Of
Energy
Ministry Of Energy
TOTAL
UGANDA
Payments per Project
Block EA-1
Block EA-1A
Block EA-2
Block EA-3
TOTAL
Payments per Government
Ministry of Energy and Mineral
Development
Office of the Auditor General
TOTAL
UNITED ARAB EMIRATES
Payments per Project
Abu Al Bukhoosh
Abu Dhabi Gas Industries Ltd (ADNOC
Gas Processing)
Abu Dhabi Company for Onshore
Petroleum Operations Ltd (ADNOC
Onshore)
Abu Dhabi Marine Areas Ltd (ADNOC
Offshore)
TOTAL
Payments per Government
Supreme Petroleum Council –
Government of Abu Dhabi
Abu Dhabi Fiscal Authorities c/o Abu
Dhabi Marine Areas Ltd
Abu Dhabi Fiscal Authorities
Petroleum Institute
TOTAL
UNITED KINGDOM
Payments per Project
Northern North Sea
Central Graben Area
Markham Area
Greater Laggan Area
Non-attributable
TOTAL
Payments per Government
HM Revenue & Customs
Crown Estate
Department of Energy & Climate
Change/Oil and Gas Authority
Oil and Gas Authority
TOTAL
201,962
201,962
110,703
91,259
-
201,962
-
-
-
-
-
-
-
-
41,641
141,197
2,445,936
1,229,942
3,858,716
41,641
1,229,942
2,587,133
-
3,858,716
-
18,420
-
-
2,095
20,515
20,515
-
-
-
20,515
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
144
80
69
140
433
399
34
433
-
2,344
-
-
2,344
-
-
-
2,344
2,344
1,521
1,125
136
2,890
147
5,819
-
147
4,122(a)
1,550
5,819
43,732
43,732
-
-
43,732
43,732
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
245,694
245,694
110,703
91,259
43,732
245,694
144
80
69
140
433
399
34
433
41,641
143,541
2,445,936
1,229,942
3,861,060
41,641
1,229,942
2,587,133
2,344
3,861,060
1,521
19,545
136
2,890
2,242
26,334
20,515
147
4,122
1,550
26,334
9
(a)
Responsibility for collecting fees transferred part way through 2017 between the two beneficiaries.
REGISTRATION DOCUMENT 2017
375
9
SUPPLEMENTAL OIL AND GAS INFORMATION
Reportrr on the payments made to governments (A(( rtrr icle L. 225-102-3 of the French Commercial Code)
(in thousands of dollars)
Taxes
Royalties
License
fees
License
bonus
Dividends
Infrastructure
improvements
Production
entitlements
Total of
Payments
UNITED STATES
Payments per Project
Tahiti
Barnett Shale
Utica
Gulf of Mexico
TOTAL
Payments per Government
Office of Natural Resources Revenue
State of Ohio
Johnson County Tax Assessor
Tarrant County Tax Assessor
Texas State Comptroller’s Office
City of Fort Worth
Dallas/Fort Worth International Airport
Board
City of Arlington
Tarrant Regional Water District
State of Texas
City of North Richland Hills
Fort Worth Independant School District
Burleson Independant School District
Arlington Independant School District
Harrison County
Carroll County
Birdville Independent School District
Tarrant County College
City of Grand Prairie
Kennedale Independant School District
Tarrant County AAAA
Columbiana County
City of Cleburne
City of Burleson
Mansfield Independant School District
Crowley Independant School District
City of Crowley
White Settlement Independant School
District
TOTAL
URUGUAY
Payments per Project
Block 14 (Offshore)
Blocks 1 & 2 (Onshore)
TOTAL
Payments per Government
Administracion Nacional de Combustibles
Alcohol y Portland
TOTAL
-
7,763
4,525
-
29,099
18,566
-
-
12,288
47,665
-
-
-
-
-
-
3,466
3,466
32,926
32,926
-
1,871
251
625
6,887
-
-
-
-
-
-
-
-
-
658
1,817
-
-
-
-
-
179
-
-
-
-
-
-
29,099
3,466
32,926
-
-
-
-
7,755
2,047
1,183
1,240
914
437
497
338
397
-
-
748
499
431
305
273
-
498
271
244
185
196
108
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
12,288
47,665
3,466
32,926
-
-
-
-
-
-
-
-
-
-
158
-
158
158
158
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
29,099
26,329
4,525
36,392
96,345
65,491
1,871
251
625
6,887
7,755
2,047
1,183
1,240
914
437
497
338
397
658
1,817
748
499
431
305
273
179
498
271
244
185
196
108
96,345
158
-
158
158
158
376
REGISTRATION DOCUMENT 2017
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 document exclusively refers to TOTAL S.A., which is the parent
company of the Group.
Abbreviations
€:
euro
$ or dollar:
U.S. dollar
Units of measurement
b = barrel(1)
B = billion
American depositary receipt (evidencing an ADS)
boe = barrel of oil equivalent
ADR:
ADS:
AMF:
API:
CNG:
DACF:
American depositary share (representing a share
of a company)
Autorité des marchés financiers
(French Financial Markets Authority)
American Petroleum Institute
compressed natural gas
debt adjusted cash flow (refer to definition of operating
cash flow before working capital changes w/o financial
charges below)
ERMI:
European refining margin indicator of the Group
(refer to definition below)
FPSO:
floating production, storage and offloading
GHG:
HSE:
IFRS:
IPIECA:
LNG:
LPG:
NGL:
NGV:
OML:
ROE:
greenhouse gas
health, safety and the environment
International Financial Reporting Standards
International Petroleum Industry Environmental
Conservation Association
liquefied natural gas
liquefied petroleum gas
natural gas liquids
natural gas vehicle
oil mining license
return on equity
ROACE:
return on average capital employed
SEC:
United States Securities and Exchange Commission
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 (cm) = cubic meter(1)
M = million
MW = megawatt
MWp = megawatt peak (direct current)
t = (Metric) ton
TWh = terawatt hour
W = watt
/y = per year
Conversion table
1 acre ≈ 0.405 hectares
1 b = 42 U.S. gallons ≈ 159 liters
1 b/d of crude oil ≈ 50 t/y of crude oil
1 Bm³/y (1 Bcm) ≈ 0.1 Bcf/d
1 km ≈ 0.62 miles
1 m³ ≈ 35.3 cf
1 Mt of LNG ≈ 48 Bcf of gas
1 Mt/y of LNG ≈ 131 Mcf/d of gas
1 t of oil ≈ 7.5 b of oil (assuming a specific gravity of 37° API)
1 boe = 1 b of crude oil ≈ 5,396 cf of gas in 2017(2)
(5,403 cf in 2016 and 5,390 cf in 2015)
(1)
(2)
Liquid and gas volumes are reported at international standard metric conditions (15°C and 1 atm).
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 2017
405
GLOSSARY
A
C
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 degree
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 (site restitution)
Companies may have obligations related to well-abandonment,
dismantlement of facilities, decommissioning of plants or restoration
of
from
international conventions, local regulations or contractual obligations.
the environment. These obligations generally
result
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.
406
REGISTRATION DOCUMENT 2017
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
venture”.
to
the definition above of “association/consortium/joint
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, the portion of the oil and gas
production made available to the contractor (contractor group) and
contractually
exploration,
development, operation and site restitution costs (“recoverable”
costs).
reimbursement
reserved
for
of
The reimbursement may be capped by a contractual stop that
corresponds to the maximum share of production that may be
allocated to the reimbursement of costs.
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.
GLOSSARY
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.
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.
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.
debottlenecking
Change made to a facility to increase its production capacity.
F
desulphurization unit
Unit in which sulphur and sulphur compounds are eliminated from
mixtures of gaseous or liquid hydrocarbons.
development
Operations carried out to access the proved reserves and set up the
technical facilities for extraction, processing, transportation and
storage of the oil and gas: drilling of development or injection wells,
platforms, pipelines, etc.
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).
for some
transactions, differences between
effect of changes in fair value
The effect of changes in fair value presented as an adjustment item
reflects,
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.
fair value
Fair value is the price that would be received to sell an asset or paid
to transfer a liability in a transaction under normal conditions between
market participants at the measurement date.
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.
energy mix
The various energy sources used to meet the demand for energy.
H
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.
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.
REGISTRATION DOCUMENT 2017
407
GLOSSARY
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
venture”.
to
the definition above of “association/consortium/joint
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
(e.g., gasification) or
biochemical techniques, is widely studied.
thermochemical
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.
LNG train
Facility for converting liquefying storing and off-loading natural gas.
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.
M
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.
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
including current portion, current
borrowings, other current financial liabilities less cash and cash
equivalents and other current financial assets.
financial debt,
net-debt-to-capital ratio
(Net debt)/(net debt + adjusted shareholders’ equity).
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
Generic term designating crude oil, condensates and NGL.
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,
the production of elastomers
polypropylene, PVC, etc.),
(polybutadiene, etc.) or
large chemical
in
intermediates.
in
the production of
OPEC
Organization of the Petroleum Exporting Countries.
operating cash flow before working capital changes
Cash flow from operating activities before changes in working capital
at replacement cost.
operating cash flow before working capital changes w/o
financial charges (DACF)
Cash flow from operating activities before changes in working capital
at replacement cost, without financial charges.
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.
natural gas
Mixture of gaseous hydrocarbons, composed mainly of methane.
P
natural gas liquids (NGL)
A mixture of light hydrocarbons that exist in the gaseous phase at
room temperature and pressure and are recovered as liquid in gas
processing plants. NGL include very light hydrocarbons (ethane,
propane and butane).
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.
408
REGISTRATION DOCUMENT 2017
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.
pre-dividend organic breakeven
Barrel price permitting the generation of cash flow that is equal to
organic investments.
price effect
The impact of changing hydrocarbon prices on entitlement volumes
from production sharing and buyback contracts and on economic
limits.
production costs
Costs related to the production of hydrocarbons in accordance with
FASB ASC 932-360-25-15.
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.
such
as properties,
project
As used in this document, “project” may encompass different
meanings,
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.
agreements,
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 certainty of 90% 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.
GLOSSARY
proved undeveloped reserves
Proved undeveloped oil and gas reserves are proved reserves that
are expected to be recovered with new investments (new wells on
undrilled acreage, or from existing wells where a relatively major
expenditure is required for recompletion, surface facilities).
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
Synthetic indicator calculated from data published under ASC 932.
Ratio of the proved reserves at the end of the period to the
production of 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.
resource acquisitions
Acquisition of a participating interest in an oil and gas mining property
by way of an assignment of rights and obligations
the
corresponding permit or license and related contracts, with a view to
producing the recoverable oil and gas.
in
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).
S
seismic
Method of exploring the subsoil that entails methodically sending
vibration or sound waves and recording their reflections to assess the
type, size, shape and depth of subsurface layers.
shale gas
Natural gas trapped in very compact, low-permeable rock.
shale oil
Oil in a source rock that has not migrated to a reservoir.
REGISTRATION DOCUMENT 2017
409
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.
GLOSSARY
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,
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.
transactions such as
steam cracker
A petrochemical plant that turns naphtha and light hydrocarbons into
ethylene, propylene, and other chemical raw materials.
Sustainable Development Scenario (2°C)
Major new scenario introduced in the World Energy Outlook 2017
(WEO-2017) published by the International Energy Agency (IEA),
which outlines an integrated approach to achieve the energy-related
aspects of
(SDG):
determined action on climate change (thus integrating the 2°C
objective); universal access to modern energy by 2030; and a
dramatic reduction in air pollution.
the UN Sustainable Development Goals
T
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.
turnaround
Temporary shutdown of a facility for maintenance, overhaul and
upgrading.
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This document is printed in compliance with ISO 14001:2004 for an environmental management system.
Cover photography: M. Roussel © TOTAL
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