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Totalenergies — Investor Day (2012)
65 slides from Totalenergies's investor day presentation, 2012
Slide 1: 2012 Investors' Day
2012 INVESTORS’ DAY Investor Relations – www.total.com 1
Slide 2: Outlook & Objectives
OUTLOOK & OBJECTIVES Christophe de Margerie Chairman and Chief Executive Officer Investor Relations – www.total.com 2
Slide 3: Key messages
Key messages Delivering near-term profitable growth New dynamic in action Creating value for shareholders Investor Relations – www.total.com 3
Slide 4: Strong oil market fundamentals
Strong oil market fundamentals Oil production capacity and demand Mb/d 100 Demand Capacity by region Challenges to increase supply North / South America due to project complexity, Europe, CIS access to financing Asia and geopolitical constraints Africa Demand growth driven Middle East by non-OECD co
Slide 5: Increasing global gas demand
Increasing global gas demand Satisfaction of gas demand by region Bcf/d North America Europe Asia 100 +1.1% CAGR +1.3% CAGR +4.4% CAGR 50 2010 2030 2010 2030 2010 2030 Local gas demand 2010-30 global gas demand +2% per year New LNG projects needed to satisfy Increasing faster than oil demand, Europe
Slide 6: Delivering results in 2012
Delivering results in 2012 Favorable oil and gas environment with year-to-date Brent above 110 $/b and ERMI above 30 $/t Cash breakeven* at 105 $/b in 1H12 and gearing at 21% end June 2012 Acquired high-potential exploration acreage 4 new start-ups including Usan and 5 FIDs of major projects includi
Slide 7: HSE top priority
HSE top priority Safety first Minimizing environmental impact Safety culture embedded in our activities Reducing greenhouse gas emissions Reacting and learning from incidents Improving energy efficiency and water management TRIR (Total Recordable Injury Rate) Group Volume of gas flared per million m
Slide 8: Upstream, building sustainable, profitable growth
Upstream, building sustainable, profitable growth Prioritizing safety Emphasizing exploration • Appraising recent discoveries • Drilling high-potential new acreage Focusing on execution to deliver profitable growth • ~3 Mboe/d production potential in 2017 • 30 B$ of value creation with projects unde
Slide 9: Sanctioned projects fueling production growth
Sanctioned projects fueling production growth Production growth Mboe/d - Brent price 100 $/b 100% of 2015 target already in production or under development Acceleration of growth post-2015 Potential for 3 Mboe/d in 2017 with 70% of new production already sanctioned Main projects under study for 2017
Slide 10: High quality of Upstream projects
High quality of Upstream projects Competitive returns Value creation Expected return of 2012-17 project Capital employed and NPV forward start-ups for Total and major peers* of Total’s sanctioned projects** IRR (%) B$ Investing with discipline for profitable growth * Source: based on Wood Mackenzie
Slide 11: Refining & Chemicals, restructuring to improve performance
Refining & Chemicals, restructuring to improve performance Priority to safety and environment Adapt and optimize industrial system • Focus on major integrated platforms • Implement 650 M$ synergies and efficiency plans Refining & Chemicals ROACE* • Continue to reduce European exposure Expand in Asia
Slide 12: Supply & Marketing, reinforce leading positions
Supply & Marketing, reinforce leading positions Capitalize on strong assets • Strengthen positions in targeted European markets • Consolidate leadership in Africa More flexible and visible Adjusted net operating income • Greater flexibility of sourcing supplies B$ • Active portfolio optimization Sei
Slide 13: Increasing free cash flow
Increasing free cash flow Operating cash flow and net investments* B$ 2012-14 cash flow to benefit from • accretive start-ups and Downstream restructuring • 15-20 B$ asset sale program reducing breakeven below 100 $/b Investments based on economics and environment • one-fourth of 2013-14 Capex not y
Slide 14: Financial strength and dividend increase
Financial strength and dividend increase Strong balance sheet Dividend increased in 2Q12 B€ €/share 20-30% target range for gearing Quarterly dividend increased from 0.57 to 0.59 €/share in 2Q12 Favorable access to capital markets Committed to sustaining a competitive shareholder return Investor Rel
Slide 15: Exploration
EXPLORATION Marc Blaizot Senior Vice President, Exploration Investor Relations – www.total.com 15
Slide 16: Advancing the new dynamic in exploration
Advancing the new dynamic in exploration Increased exploration potential* Risked Bboe Recent major discoveries already in appraisal phase • Azerbaijan, Bolivia, French Guiana More exposure to high-risk, high-reward prospects 2 Boe increase in exploration potential since 2010 New acreage since 2010 E
Slide 17: New acreage acquisitions
New acreage acquisitions Grabens and rifts Pre-salt carbonates Large deltas Abrupt margins Foothills Unconventional Norway Poland* Denmark UK Bulgaria Ohio Egypt Iraq Myanmar* GoM Mauritania Malaysia Qatar French Guiana Brunei JDZ Yemen Philippines* Ivory Coast Uganda Indonesia Gabon Kenya Tanzania*
Slide 18: Atlantic basins, extending the mirror concept
Atlantic basins, extending the mirror concept Pre-salt carbonates Abrupt margins French Guiana Uruguay Brazil (Xerelete- Angola Ivory Coast (Zaedyus) (Block 14) Agulhas Negras) (Kwanza) (CI 100, 514, 515, 516) Total 25% Total 100% Total 41.2%, operated 3 blocks, 2 operated 4 blocks, 2 operated In pr
Slide 19: Angola, Blocks 25, 39, 40 - Kwanza
Angola, Blocks 25, 39, 40 - Kwanza • 3 blocks: 2 operated, 1 non-operated Angola • Recently proven excellent pre-salt carbonates associated with a prolific source rock Cameia discovery • Analog to Santos Basin (Brazil) 3D extension Block 39 (15%) Block 40 In progress: 3D seismic acquisition of (50%
Slide 20: Ivory Coast
Ivory Coast • 4 blocks: 2 operated, 2 non-operated Ivory Coast Ghana • Abrupt margin – neighboring Jubilee CI 514 CI 100 in Ghana, extending hunt to Ivory Coast (54%, operated) (60%, operated) • Multi-billion barrel prospect CI 515 and CI 516 (45%, op. in dev.) Tweneboa discovery (Ghana) Independenc
Slide 21: Uruguay, Block 14
Uruguay, Block 14 • Total 100% Uruguay • High-potential abrupt margin frontier • Very competitive bidding round • Ultra-deepwater Pelotas basin • Exploration to determine viability Uruguay of extending this oil play throughout South Atlantic In progress: 3D seismic acquisition preparation Next steps
Slide 22: Bulgaria, Khan Asparuh
Bulgaria, Khan Asparuh • Total 40%, operator for drilling and development phases • Elephant-sized turbiditic prospects Bulgaria • 14,220 km² block, 80 km offshore • Water depth down to 2,000 m In progress: 3D seismic acquisition preparation Next steps: 3D seismic in 2013-14, exploration well in earl
Slide 23: Iraq
Iraq • 3 onshore blocks, 1 operated in development phase Iraq • Foothills play, mountain foothills (Kurdistan) for Harir and Safen • Large structures, surfaces and columns, excellent source rocks and reservoir-seal Harir pairs (35%) Safen (35%, op. in dev.) In progress: 2D seismic acquisition on Har
Slide 24: Argentina, shale gas and shale oil
Argentina, shale gas and shale oil • First shale play operated by Total • Diverse acreage for targeting gas and oil, Argentina analog to North America • Exploration well connected to existing La Escalonada pipeline, immediate production (85%, op.) San Roque (24.7%, op.) Rincón La Ceniza (85%, op.) P
Slide 25: Not forgetting... nearby prospects, high and quick rewards
Not forgetting... nearby prospects, high and quick rewards SNE N52 Worldwide exploration program adjacent (2009) SNC N54 (2012) to existing infrastructure • Rapid development with high return rates • 39 wells in 2012-14 SNW N50 (2006) • Leveraging new technologies in proven zones • North Sea, Angola
Slide 26: Ambitious exploration program for 2013-14
Ambitious exploration program for 2013-14 Elephant and Big Cat prospects Number of wells targeting Frontier Elephants and Big Cat prospects Other Norway* Egypt Libya* Iraq* GoM* Mauritania* Qatar Nigeria* Colombia* Ivory Coast* Gabon* Kenya* Indonesia* French Guiana* Congo Bolivia* Australia* Angola
Slide 27: Upstream Projects
UPSTREAM PROJECTS Michel Hourcard Senior Vice President, Development Investor Relations – www.total.com 27
Slide 28: Proven performance in project management
Proven performance in project management Planning control Schedule performance Schedule variation from sanction % 2009-12 average* for Total operated projects % overrun Focusing on safety, efficiency and sustainability Actual start-up date vs target date at FID * For Total’s operated and non-operate
Slide 29: Tight project control for capital-intensive projects
Tight project control for capital-intensive projects Cost control Upstream Capital Cost Index* Technical cost** Base 100 in 2000 $/boe • Cost inflation • Safety and environment • Local content and workforce development • Technical complexity • Close monitoring of asset integrity Create value through
Slide 30: Leveraging technology to create value
Leveraging technology to create value Unlock resources Reduce Optimize designs and improve recovery development costs • Subsea pumping • Long-distance multiphase • Yemen LNG: and processing pumping Plant built in 49 months • 4D seismic • Power supply from shore • Moho North • Yamal LNG: • Electrical
Slide 31: 70% of 2017 new production from sanctioned projects
70% of 2017 new production from sanctioned projects Status of main sanctioned projects Current estimates of returns for sanctioned projects* % of EPC progress IRR (%) Well-advanced, high-quality sanctioned projects * In a Brent 100 $ environment. For 18 sanctioned projects (incl. 2012 start-ups) Inv
Slide 32: A world leader in deep-offshore development
A world leader in deep-offshore development CLOV (sanctioned) Pazflor Dalia Usan Girassol Egina Current projects Akpo Moho Bilondo Moho North • Average water depth 1,200 m • Capitalizing on successful track record Kaombo (2 FPSOs) • Total operates more than 10% of global deep-offshore production Str
Slide 33: CLOV on track for production mid-2014
CLOV on track for production mid-2014 Deep offshore development On track for first oil by mid-2014 • Proved and probable reserves: • FPSO with 1.8 Mb storage capacity 500 Mb oil • Subsea Multiphase Pumping System • 20 year production, 160 kb/d at plateau • 36 km production lines, 57 km water • Capex
Slide 34: Laggan Tormore, an innovative well-to-shore design
Laggan Tormore, an innovative well-to-shore design Development On track for first gas in 2014 of a new production hub • Proved and probable reserves: • 2 subsea production templates, 1.1 Tcf gas and 25 Mb condensate 9 subsea wells, water depth 600 m • Plateau production: 500 Mmscf/d • 140 km multiph
Slide 35: Ichthys LNG, giant offshore / onshore project
Ichthys LNG, giant offshore / onshore project FPSO, SPS & SURF CPF 880 km pipeline 2 LNG trains Darwin Ichthys 4 major developments in one project Target first gas end 2016 • Proved and probable reserves: • 50 subsea wells 12.8 Tcf gas, 530 Mb condensate • Blaydin Point civil works ongoing • Long pl
Slide 36: Fast-track subsea tie-backs with quick return
Fast-track subsea tie-backs with quick return Islay (Alwyn) GirRI (Girassol) Atla (Heimdal) GirRI MPP (Girassol) • Reserves (2P) • Reserves (2P) • Reserves (2P) • Reserves (2P) 20 Mboe 90 Mboe 15 Mboe 30 Mboe • Start-up: April 2012 • Start-up: June 2012 • Start-up: Oct 2012 • Start-up: Oct 2014 • Ca
Slide 37: Preparing and optimizing next developments
Preparing and optimizing next developments Conceptual Pre-FEED and FEED Execution phase Pre- Appraisal and conceptual Project project Basic engineering EPC Contracts sanctioned projects Discovery SOR* FID Start-up Estimated returns for non-sanctioned projects IRR (%) Kaombo (Angola) Moho North (Cong
Slide 38: Delivering through 2017 and beyond
Delivering through 2017 and beyond Project execution expertise with leading experience in deep offshore and LNG 3,000 dedicated professionals committed to safer and faster project development Pre-FID, key to optimize design and costs Quality and profitability of Total’s portfolio Investor Relations
Slide 39: LNG
LNG Philippe Sauquet President, Gas & Power Investor Relations – www.total.com 39
Slide 40: Regional price differentials amid growing demand
Regional price differentials amid growing demand Global gas demand: +3%/y 2001-11 By region in 2011 Gas prices evolution by region % CAGR 2001-11 $/Mbtu Investor Relations – www.total.com 40
Slide 41: Surging LNG demand, tightening markets
Surging LNG demand, tightening markets LNG supply* / demand Mt/y Strong LNG demand in both traditional and emerging markets Essential need for new LNG projects in 2030 230 Mt coming from unsanctioned identified projects (including North America, Russia, East Africa) Challenge to increase supply due
Slide 42: Total, global player along the LNG chain
Angola LNG (13.6%) Total, global player along the LNG chain 20% of 2011 production 27% of Upstream results Snohvit South Hook Dunkerque LNG Fos Cavaou Sabine Pass Hazira Altamira NLNG T1-T6 Yemen LNG Qatargas 2 Bontang Angola LNG Qatargas 1 Adgas Qalhat LNG Ichthys Oman LNG GLNG Existing LNG supply
Slide 43: LNG trading, a key competitive advantage
Angola LNG (13.6%) LNG trading, a key competitive advantage Average spread* and % of redirected cargos $/Mbtu Growing downstream LNG portfolio • from 2.2 Mt in 2009 to 8 Mt in 2011 • targeting ~16 Mt in 2020 Securing access to key markets • Existing long-term contracts with Europe and Asia (Japan, C
Slide 44: Strengthening position as LNG leader
Angola LNG (13.6%) Strengthening position as LNG leader Total’s global LNG position* Mt/y Expanding upstream position with new LNG projects • 0.7 Mt/y – Angola LNG • 4.5 Mt/y under construction – Ichthys, GLNG • under study – Russia, Nigeria Scaling up the downstream portfolio • doubling 2011 sales
Slide 45: Creating value through access to resources and premium markets
Creating value through access to resources and premium markets Favorable LNG outlook Solid and diversified positions in upstream LNG Large pipeline of projects Recognized expertise in downstream LNG Among the fastest growing businesses of the Group Investor Relations – www.total.com 45
Slide 46: Refining & Chemicals
REFINING & CHEMICALS Patrick Pouyanné President, Refining & Chemicals Investor Relations – www.total.com 46
Slide 47: Demand growth driven by Asia and Middle East
Demand growth driven by Asia and Middle East Refined product demand Global polymer demand Mb/d Mt/y Investor Relations – www.total.com 47
Slide 48: Regional capacities adjusting to demand trend
Regional capacities adjusting to demand trend 2009-17 change in global refining capacity 2009-17 change in global ethylene capacity Mb/d Mt/y 12 2 New sites / extensions 8 Additional demand 1 4 0 0 Closures -4 -1 2009 2011 2013 2015 2017 2009 2011 2013 2015 2017 Europe North America Asia/Middle East
Slide 49: European rationalization underway
European rationalization underway OECD European refining capacity 2007-12(e): -6% Total’s European refining capacity Mb/d (as of 1st of January) -22% +5% -11% -18% -10% +15% Announced closures or capacity reductions in 2012-13 Refineries for sale Realized or announced sales Confirmed closures or cap
Slide 50: Refining & Chemicals strategy
Refining & Chemicals strategy Priority to safety and environment Adapt capacities to demand evolution and optimize industrial system in Europe and the US by focusing on large platforms and maximizing synergies Expand in Asia and Middle East to leverage growth in emerging markets and access large ded
Slide 51: On track to deliver return targets
On track to deliver return targets Investor Relations – www.total.com 51
Slide 52: Focus on major integrated platforms
Focus on major integrated platforms % of refining and petrochemicals capital employed Cash flow from operations from major platforms on major platforms B$ (ERMI in $/t) Port Arthur Antwerp Normandy Jubail Qatar Daesan Investor Relations – www.total.com 52
Slide 53: Develop assets on advantaged feedstock in Middle East and position to grow in Asia
Develop assets on advantaged feedstock in Middle East and position to grow in Asia Jubail Ras Laffan / Messaied Daesan Saudi Arabia Qatar South Korea New 400 kb/d full-conversion Five projects building Expanding and high-grading refinery integrated with on integrated position a world-class facility
Slide 54: Redeploy capital to Asia and Middle East
Redeploy capital to Asia and Middle East Refining and petrochemicals capital employed ~ 7 $/t per year on average refining CAPEX* in 2013-17 in Europe/US down from 14 $/t per year in 2007-11 ~ 35% of capital employed in Asia and Middle East by 2017 2012-17: reduce Total’s European refining and petro
Slide 55: Synergies and efficiency plans by 2015
Synergies and efficiency plans by 2015 Synergies Efficiency plan Net operating income Net operating income • Integration projects at Antwerp • Operational availability and Normandy platforms • Cost savings plan • Purchasing savings • Energy efficiency • Rightsize central services Investor Relations
Slide 56: Availability, key to industrial performance
Availability, key to industrial performance Refining and steamcracker availability % Back to industrial fundamentals • An ambitious but realistic target • Refocus management and teams on availability priority • Systematic vulnerability assessment and action plans • Control turnaround duration • Bene
Slide 57: Launched global cost saving plan
Launched global cost saving plan 2011 Refining and petrochemicals costs structure Energy efficiency target for 2015 Western Europe refining energy intensity index* Other variable Wages costs Global steamcracker energy index* 6.7 B$ Energy purchases Energy efficiency indicator** -1% per year between
Slide 58: Meeting the profitability challenge
Meeting the profitability challenge Priority to safety and environment Delivering value from main projects and major platforms Increasing operational competitiveness Implementing active portfolio optimization Collective focus on transformational change Investor Relations – www.total.com 58
Slide 59: Conclusion
CONCLUSION Christophe de Margerie Patrick de La Chevardière Chairman and Chief Executive Officer Chief Financial Officer Investor Relations – www.total.com 59
Slide 60: Competitive Upstream performance
Competitive Upstream performance Estimates based on public data European peers: average of Shell, BP and Eni; Major peers: average of European peers, Exxon and Chevron Investor Relations – www.total.com 60
Slide 61: Underlying value versus share price
Underlying value versus share price Change in Upstream NPV 10%: 2015 & 2017 vs 2012* Entreprise Value (EV) / boe % $/boe * Source: based on Wood Mackenzie Corporate Service 30/06/12 Brent LT 85 $12/b EV/boe = EV 2012 / 1P 2011 with share prices as of 31/08/12 EV = market cap + net debt European peer
Slide 62: Key messages
Key messages • Growth supported by projects already in production Delivering near-term or development profitable growth • High-quality portfolio of projects • Among world leaders in deep-offshore and LNG • Potential for giant discoveries New dynamic • Reshaped for delivering higher downstream profit
Slide 63: Appendix
APPENDIX Investor Relations – www.total.com 63
Slide 64: Diversified portfolio of major Upstream projects
Diversified portfolio of major Upstream projects * Total operated; in Uganda, Total operator of block 1 only ** Direct stake in the project only Investor Relations – www.total.com 64
Slide 65: Disclaimer
Disclaimer This document may contain forward-looking statements, including within the meaning of In the replacement cost method, which approximates the LIFO (Last-In, First-Out) the Private Securities Litigation Reform Act of 1995, notably with respect to the financial method, the variation of inven