energy oil sands and sustainable development

7/29/2019 Energy Oil Sands and Sustainable Development

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Energy, Oil Sands andSustainable Development

Jean-Michel GiresPresident and CEO, Total E&P Canada Ltd

Edmonton, AlbertaJanuary 2011


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2

Population and Growth driving Energy demand

OECD Non-OECD

Energy demandGDPPopulation

Energy demand growth mainly driven by transportation and power generation

Need to limit further energy demand

50

150

250

350

1980 2005 2030(e)

Mboe/d

1.2%

1.8 %

1.8 %

0.4 %

Trillions$ 2005

50

100

150

200

1980 2005 2030(e)

3.6 %

5.3%

2.0%

Average growth per year2005-2030(e)

1 %

2

4

6

8

10

1980 2005 2030(e)

Billions

1.1 %

0.3 %

(purchasing power parity)

Sources: Total estimates

1.5 %

1.8 %

0.5 % 3%

3.7%

3.3 %

2.6%

1.4%

-- Edmonton January 2011


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3

Solar, Wind, other renewable energiesHydroBiomass excluding biofuels

Nuclear

Coal

Gas

Biofuels

Oil

0

100

200

300

400

2005 2010 2015 2020 2025 2030

Oil & Gas to represent > 50% energy supply in 2030

World energy supply

Source: Total estimates. * Million barrels of oil equivalent per day.

Mboe/d*

Fossil energiesrepresent 81% incl. :

Oil : 35%

Gas : 21%

Fossil energiesrepresent 75% incl.:

Oil : 30%

Gas : 22%

Efficient CO2emissions managementand diversification of energy supply are key issues



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Significant hydrocarbon resources yet to be produced

Total estimates

Oil resources Gas resources

Conventional gas resources concentrated in Russia, Iranand Qatar

Development of shale gas production in the US driving areevaluation of unconventional gas resources

Transportation and liquefaction constraints limitdevelopment of isolated gas resources

Conventional oil located mainly in the Middle East

Extra heavy oil and Bitumen concentrated in Canadaand Venezuela

Oil and gas resources require advanced technology and large scale investment

With ample availability of oil and gas and existing infrastructure,hydrocarbons will be dominant fuel source for the next decades

~3,000 Bboe

Unconventional resources

oil shale, shale gas,coal bed methane, tight gas

Extra Heavy oil & Bitumen

New discoveriesand increased recovery rate

Identified resources

33 years of productionat current pace

50 years

100 years

70 years

~3,000 Bboe

55 years of productionat current pace

80 years

>125 years

Already produced

4 - Edmonton January 2011


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5

Billions of barrels

80

60

40

1000 2000 3000

20 OPEC

Middle East

Extra

Oil

shales

100

Billions of barrels

80

60

40

1000 2000 3000

20

OPEC

Middle East

Extra

Oil

shales

100

$/bbl

Billions of barrels

80

60

40

1000 2000 3000

20

OPEC

Middle East

water

Extra

Oil

shales

100

Billions of barrels

80

60

40

1000 2000 3000

20

OPEC

Middle EastOther

Conventional

Deep

Ultra

deep

water

Enhanced

Recovery

Extra

Heavy

oil

Oil

shales

100

Arctic

$/bbl

Break even oil price in 2010(IRR >10%)

Sources: IEA, CERA, Total

But additional oil resources aremore and more difficult and expensive to extract

- Edmonton January 2011


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6

Oil production by 2020-2030 around 95 million barrels per dayNot a peak oil, rather a moving ceiling oil

Geopolitical uncertaintiesdelaying developmentof new capacities

Stronger role of OPEC,awaited growth of productionin Iraq

sources : Total estimates

Oil production

09 30(e)

Heavy oilAmericas

Mature areasOECD

30(e)09

Mature areasAsia

30(e)09

CIS

09 30(e)

Middle East

09 30(e)

Saudi Arabia,Iran, Iraq

09 30(e)

Africa

Nigeria

South America

30(e)09

Brazil

Extra Heavy oil & Bitumen are to be important contributorsUp to ~ 8% of production by 2030



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Long term Oil demand driven by transport & petrochemicalsand mainly growth in emerging countries

Increasing demand for light products :naphtha for petrochemicals, gasoline and diesel for transport

Necessary to upgrade refining and petrochemical plants to curb oil demand

2009-2030 evolutionof each segment

Transport +23%

Petrochemicals +47%

Power generation -33%

Industry and other -2%

Total +15%

09 30(e)

China

09 30(e)

Asia excl.China

09 30(e)

Middle East

09 30(e)

CIS

09 30(e)

Africa

09 30(e)

NorthAmerica

09 30(e)

SouthAmerica

09 30(e)

Europe

Oil products demand



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Simultaneously, climate change calls for drasticreduction of CO2 emissions

Technologies that can reduce global CO2 emissions from energy

combustion

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

1990 2000 2010 2020 2030 2040 2050

MtCO2

Energy savings

Fossil fuel switch

Renewable energiesNuclear energy

Carbon sequestration

Emission of reduction case

avoidedem

issions

Source EU Commission Energy: A potential scenario to stay


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0

5

10

15

20

25

30

35

40

Heavy oil

LNG

Resources*: 40 Bboe / 40 years

Resources*> 40 years

(at December 31, 2009)

Total: meeting global energy demand

Diversified global portfolio offering balanced risks rewards

2 Bboe 1 - 2 Bboe 1 BboeResources* : 40 Bboe

Other liquids

Deep offshore

Other gas

Africa

Bboe

12

Americas

Middle East / Asia

6

Europe and CIS

2P reserves**> 20 years

1P reserves***12 years

* proved and probable reserves at year-end 2008 plus contingent resources (SPE-PRMS)** limited to proved and probable reserves estimated at year-end 2008 using company price assumptions, covered by E&P contracts on fields that have been drilled and for which

technical studies have demonstrated economic development, also includes tar sands to be developed with mining*** reserves of consolidated subsidiaries (FAS 69) and share of equity affiliates and non-consolidated companies



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Total ; focusing increasingly in growth areas

Represents approx. 50% of Totals resource base

Producing

Underdevelopment

Understudy

Unconventionalgas

Heavy oilDeep offshore LNG

Blocks 17, 14 - Angola

Akpo, Bonga - Nigeria

Moho Bilondo - Congo

Tahiti - Gulf of Mexico

Pazflor - Angola

Usan - Nigeria

Laggan Tormore - UK

CLOV - AngolaEgina - Nigeria

Block 32 - Angola

Surmont Ph.2- Canada

Joslyn - Canada

Northern Lights- Canada

Fort Hills - Canada

Bemolonga- Madagascar

JV Barnett Shale- US

Ahnet - AlgeriaSulige - China

Montlimar - France

Neuquen - Argentina

QG 1, QG 2 T5 - Qatar

Bontang - Indonesie

NLNG - Nigeria

Snohvit - Norvge

Yemen LNG (2 trains)

Adgas , Oman LNG

Angola LNG Angola

GLNG Australia

Ichthys - AustraliaShtokman - Russia

Nigerian projects

Expansion JVBarnett Shale US

GLNG Australia

Petrocedeo- Venezuela

Surmont Ph.1- Canada



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Capitalizing on our competences

Developing R&D, partnerships, venture capital

2005 2030(e)

Solar, wind, other renewablesHydro

Biomass, excluding biofuels

Nuclear

Coal

Gas

Biofuels

Oil

Global energy mix by 2030(e)*

75% fossil fuel

30% oil

22% gas

Main axes selected by Total to preparefor the evolution of the energy mix

* Total estimates

Total: developing complementary, low-CO2 emitting energiesin response to the challenge of satisfying future demand

Strengthening industrial and downstreamintegration Photovoltec, Tenesol, Abu Dhabi solar project (110 Mwe)

Technological differentiation(JVs and partnerships for R&D) IMEC (crystaline PV), LPICM (thin films), Konarka (organic

PV), MIT (batteries), AE Polysilicon (polysilicon for PV)

Solar: integration and advanced R&D

8.33% interest in Penly project (1600 Mwe)Developing projects in countries where the Grouphas a presence

Nuclear: acquiring expertise

R&D on thermochemical processes BioTfuel pilot (gasifying biomass)

R&D on biotechnological processes Futurol pilot (lignocellulose)

Gevo (sugars isobutanol), Amyris, Elevance

Biomass: R&D for advanced biofuels and green chemicals

Mboe/d

350

250

150

50

11 -11 - Edmonton January 2011


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Total: facing the access to energy ChallengeAlready 250 000 people supplied with ad hoc solutions



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Green House Gases : ~50 Gt CO2 eq. today

* sources GIEC et AIE

Deforestation17%

Agriculture14%

Other GHG,various

12,5%

Coal

23%

Transport13 %

Buildings8 %

Industryinc. Electricity7,5 %

Use Phase28,5%

Operations Phase 5%

Production& Refining

Of whichIndustry4 %

Oil

&

Gas

33,5%Oil & Gas

33,5%



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Deforestation17%

Agriculture14%

OtherGHG,

various12,5%

Coal

23%

Oil & GasCustomers Use28,5%

Oil and Gas / Operations : What can Total do?

Production& Refining5%

Operations Phase :

Flaring & Energy Efficiency :solutions for our plants

55 Mt CO2eq Total operator 2009

Source GIEC et AIE



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Deforestation17%

Agriculture14%

OtherGHG,

various12,5%

Coal23%

Oil & Gas/ Users : What can Total do?

sources GIEC et AIE

Transport13 %

Buildings8 %

Industryinc. Electricity7,5 %

Use Phase : 28,5%

Solutions forour customers / users

600MtCO2eq Total Marketer 2009

Production& Refining(operations)5 %



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Total Transportation solutionsCity driving: distribution of energy use

Accessories

2.2%

Engine

Idling

17.2%

Driveline losses

5.6%

Energy inefficiencies

62.4%

Driveline

Inertia andbraking

5.8%

Rollingresistance

4.2%

Drag2.6%

Total:Tire inflation

20.4% 12.6%100%

EcodrivingSource: EPA.

Total:Automotive fuelandlubricantperformanceHutchinson:Thermodynamics

Hutchinson:Active mass dampersStop & GoHybridization

Total:Lubricant performanceHutchinson:Transmission/rubber

Total Petrochemicaland Hutchinson:- Fascia- Sealing systems

TP and Hutchinson:Plastics and rubberfor lighter systems



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Deforestation17%

Agriculture14%

Other GHG,various12,5% Charbon

CO2 Capture & Storage : a potential solutionfor industries with high CO2 emissions

* sources IPCC & IEA

Transport13 %

Buildings8 %

Industryinc. electricity

7,5 %

Electricit19 %

Industrie4 %

Capture storage CO2

Solutions for industrieswith high emissions of CO2

Production& refining(oprations)5%

Oil

&

Gas

33,5%



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Carbon capture and storage demonstration facilityinaugurated in Lacq, France on January 11, 2010



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Anticipating the future energy demand; a huge R&D effort

Supporting growth potential in oil and gas through new technologies

Improving industrial and product efficiency and reducing environmental impact

Accelerating the development of core competencies in new energies

Increasing leverage to R&D

Environmentalperformance: 10%

Resources: 35%Hydrocarbons, newenergies

Innovative technologies

& process optimization: 20%

Products: 35%

$7.1 B2009-2014(e)

Totals R&D investment in 2009:$0.9B



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Fort McMurray

Total in Canada : strong base to grow our production

Griffon

Asphalt Creek

Buckton

Emerillon

Fort Hills (TOTAL 39.2%* / SUNCOR operator 40.8%*/Teck 20%)Mining, Prod.100%: 160 kbpd bitumen 2016

Joslyn (TOTAL operator 38.25%*/SUNCOR 36.75%*/OXY 15%/ INPEX 10%)Mining, Prod. 100%: JNM (ph.1) 100 kbpd 2017-18, JME (Expans.) 100 kbpd

Surmont (TOTAL 50%/Conoco operator 50%)In-Situ (SAGD), Prod. 100%: Ph. 1: 27 kbpd 2007, Ph. 2: 110 kbpd, 2015

Northern Lights (TOTAL operator50% /SINOPEC 50%)Mining, Prod. 100%: ult. 100 kbpd bitumen

VOYAGEUR Upgrader (TOTAL 49%*/SUNCOR operator 51%*)Upgrading: 245 kbpsd 2016

Lease Total Operator Total Partner Operated- Edmonton January 2011

* Fort Hills, Voyageur, Joslyn shares subject to Total-Suncor transaction completion expected by 1Q2011


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Surmont : one of the largest SAGD leases

Operated by ConocoPhillips (50%)

Phase 1 already producing

20 well pairs at start-up from two pads

Steam injection started in June 2007

Currently producing 23,000 bbl/d

Future developments

Phase 2 : sanctioned January 2010, bringing production to 110,000bbl/d by 2015.

Phase 3 : conceptual study in 2011

Additional phases are possible for full lease development

Technology investment to minimize impacts

SAGD technology continuously enhanced

ES-SAGD pilot under constructionSAGD creates less land disturbance although GHG emissionsstill a challenge

CO2 Capture and Storage (CCS) experience from Lacq, Weyburn& others

Developing expertise in a key in situ technology

Surmont (Total 50%)



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Joslyn : preparing production for 2017 - 2018

Multiphase development in basic

engineering and regulatory stages Expected to yield 2 Bb of bitumen production

over 30 years

Oil sands surface mining techniques

100,000 bbl/d for Joslyn North Mine

JNM hearing in September 2010

Technological and R&D investmentto limit environmental impact

New methods of sand and thickened tailingsbeaching for enhanced tailings management

Off Stream storage pond integrated

Cogeneration Plant

Industry cooperation / joint research pilots

Total Canada committed to developing technicallyand environmentally challenging project

Joslyn (Total 38.25*%)

Total operator

Leases covering area of 221 km2, of which 70 km2



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Fort Hills : growing our portfolio

Operated by Suncor (40.8%*),remaining 20% held by TeckResources Ltd

Estimated 3.4 billion barrels ofbitumen

Extracted by mining with truckand shovel

Planned start-up mid 2016

Two-phase development: Initial production : ~160,000 bbl/d

With de-bottlenecking: ~190,000 bbl/d

23

Fort Hills (Total 39.2%*)



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Voyageur Upgrader : upgrading in Alberta

Operated by Suncor (51%*)

Design: 245,000 bbl/sd

Scheme: Delayed Coker

3 pairs of drums

Close to existing SuncorUpgraders

Hot bitumen from Fort Hills andJoslyn North mines

Project resumed afterinterruption - planned start-up2016

24

Voyageur Upgrader (Total 49%*)



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Northern Lights Partnership: long term development

Operated by Total Canada (50%),remaining 50% held bySinoCanada (Sinopec affiliate)

Estimated 1 billion barrels ofbitumen to be recovered by

mining

One phase development around100,000 bbl/d

Ongoing evaluation of the best

scenarios for development,production and export

25

Northern Lights Partnership (Total 50%)



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Environmental issues at the core of Oil Sands bad press

For every barrel of oil sands it requires enoughnatural gas to heat an average Alberta home for four days

Al Gore

Carbon Neutral by 2020:A Leadership Opportunity

in Canada's Oil SandsPembina Institute

The oil sands reserves cover an area of 140,000km2 of the boreal forest - equivalent to 25% of

Alberta (approximately the size of France)World Wildlife Fund

Dirty Oil

The most destructive project on earthEnvironmental Defense



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Canada Oil Sands:what are we talking about ?



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Canadian Oil Sands : a challenging resource to produce

10% -Bitumen film

5% -Waterenvelope71% -

Sandparticle

14% -

Fines(clay-

minerals)

Oil Sand compositionCharacteristics of Athabasca bitumen

7-9 API

Not mobile at reservoir conditions (10C)

Bitumen requires :

dilution for pipeline transport and/or

upgrading to produce SyntheticCrude Oil (SCO)

100,000,000

10,000,000

1,000,000

100,000

10,000

1,000

100

10

1

50 100 150 200 250 300

Viscosity mPa.s

C

Oil flowinglimit

source : CAPP- Edmonton January 2011


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Currently Mined

Pit Mining

In-situ / Thermal / SAGD*

Mining and in-situ extraction methods for oil sands

Depth

20 m

100 m

In-situEstablished resources** = 136 Bb

80% of resources

Great potential requiring advanced technology

Mining

Established resources** = 34 Bb20% of resources

* SAGD : Steam assisted gravity drainage

** Ultimate bitumen resources : ~300 Bb of which recoverable resources : 175 Bb (source : ERCB)- Edmonton January 2011


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Looking at the CO2 intensity of oil sands production

Up to 45 kg CO2 /b

62 kg CO2 /b

JOSLYN/SURMONT

Up to 70 kg CO2 /b

REFERENCES

38 kg CO2 /b(incl. Cogen)

MININGMINING

MINING

Power by others

SAGD

Power by others

CONVENTIONALOIL*

15 100 kgCO2e/b

(~25 kg CO2e/b)


R d i W U i Oil S d P j


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Reducing Water Usage in Oil Sands Projects :Joslyn & Surmont

Net Water Withdrawal Intensity (bbl water per bbl bitumen)

In-Situ Mining

Surmont SAGD: 0.3 bw/bb Joslyn N Mine: 1.6 bw/bb (steady state)up to 2.3 (maximum)

Other projects: 0.2 - 1 bw/bb Other projects: 2 - 4 bw/bb

Surmont SAGD

95% of water needs fromrecycled water

Withdrawal of make-up waterfrom groundwater wells

Joslyn North Mine 90-day off-stream storage pond 80% of water needs from

recycled waterClosedcircuitsystem



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Land Disturbance Footprint in Boreal ForestCanadas boreal forest : 3.2million km2

Oil sands: 140,000 km2 of which

4,800 km2 is mineable (0.1% ofCanadas or 1% of Albertasboreal forest)

~ 20 000 km2 considered for insitu developments

Currently disturbed by oil sandsmines: 602 km2 (< Calgary footprint)

Joslyn North Mine: reducing disturbance and accelerating reclamation process

Yet biodiversity wealth must be protected and cumulative impacts managed

Joslyn North Mine

70 km2

61% to be reclaimed by closure usingprogressive reclamation, rest 7 yrs later

Existing mining projects typically


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TEPCA Calgary Research CentreCreated in 2008, already ~ 20 M$/year

Technology Barrels: Investing in the long-term future

Mine Production

Bitumen Production

Tailings Treatment

Managementof

Resources& Environment

In Situ Production

Upgrading

Transportation



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The importance of our local stakeholders

Fort Chipewyan Fort McKay

Fort McMurray34 - Edmonton January 2011


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Stakeholder relations: critical to acceptability

Strong industry cooperation to address

cumulative effects

First Nations concerns addressed

Treaty rights

Cumulative impacts

Cultural preservation & respect

Business opportunities

Engagement with communities based on dialogueand empowerment

Mitigation Plans

Community Content Plans

Socio-Economic agreements

Reconciling economic developmentwith environmental and social performance

Community investment

Over C$5M invested since 2008

Wide range of investmentsin Canadian organizations (arts,health, environment, aboriginalculture, etc...)

Canadian university partnerships

and scholarships



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Total committed to sustainable development

Fueling the future: Need for a New Balance and continuous improvement

High breakeven Unknown CO2 cost

More stringent royalties regime

Stakeholder relations

EnvironmentalChallenges

ChallengingEconomics

CO2, water, land footprint,strict administrative process,

local acceptability

Further R&D to improvemanagement of resourcesand environment

Engaging communities basedon dialogue and sustainable

partnerships

energy oil sands and sustainable development

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