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Upstream
BUSINESS OVERVIEW
determine with reasonable certainty whether the crude oil or natural
gas in known reservoirs is recoverable under existing regulatory,
economic and operating conditions.
ⅢExploration & Production
TOTAL’s oil and gas reserves are consolidated annually, taking into
account, among other factors, levels of production, field
reassessment, additional reserves from discoveries and
‹
Exploration and development
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 and of
two companies accounted for under the cost method. For further
information concerning changes in TOTAL’s proved reserves for the
years ended December 31, 2009, 2008 and 2007, see
TOTAL’s Upstream segment aims at continuing to combine long-
term growth and profitability at the levels of the best in the industry.
TOTAL evaluates exploration opportunities based on a variety of
geological, technical, political and economic factors (including
taxes and license terms), and on projected oil and gas prices.
Discoveries and extensions of existing fields accounted for
approximately 42% of the 2,419 Mboe added to the Upstream
segment’s proved reserves during the three-year period ended
December 31, 2009 (before deducting production and sales of
reserves in place and adding any acquisitions of reserves in place
during this period). The remaining 58% comes from revisions of
previous estimates.
“Supplemental Oil and Gas Information (Unaudited)”.
The reserves estimation process involves making subjective
judgments. Consequently, estimates of reserves are not exact
measurements and are subject to revision under well-established
control procedures.
In 2009, the exploration investments of consolidated subsidiaries
amounted to €1,486 million (including unproved property
acquisition costs). The main exploration investments were made in
the United States, Angola, the United Kingdom, Norway, Libya,
Nigeria and the Republic of the Congo. In 2008, exploration
investments of consolidated subsidiaries amounted to
The reserves estimation process requires among others internal
peer reviews of technical evaluations to ensure that the SEC
definitions and guidance are followed; and that management make
significant funding commitments towards the development of the
reserves prior to booking (see “Supplemental Oil and Gas
Information (Unaudited)” for more details on the preparation of
reserves estimates).
€
1,243 million (including unproved property acquisition costs)
notably in Angola, Nigeria, Norway, the United Kingdom, Australia,
the United States, Libya, Brunei, Gabon, Cameroon, Indonesia,
China, the Republic of the Congo and Canada. In 2007, exploration
investments of consolidated subsidiaries amounted to
‹ Proved reserves
€
1,233 million (including unproved property acquisition costs),
notably in Nigeria, Angola, the United Kingdom, Norway, Libya, the
Republic of the Congo, Australia, Venezuela, China, Indonesia,
Canada, Brunei, Algeria, the United States, Mauritania, Yemen,
Kazakhstan, Brazil, Azerbaijan and Thailand.
In accordance with the amended Rule 4-10 of Regulation S-X,
proved reserves for the year ended December 31, 2009, are
calculated using a 12-month average price determined as the
unweighted arithmetic average of the first-day-of-the-month price
for each month of the relevant year unless prices are defined by
contractual arrangements, excluding escalations based upon future
conditions. The reference price for 2009 was $59.91/b for Brent
crude. The proved reserves for the years ended December 31, 2008
and 2007, were calculated using December 31 prices.
The Group’s consolidated Exploration & Production subsidiaries’
development expenditures amounted to nearly €8 billion in 2009,
primarily in Angola, Nigeria, Norway, Kazakhstan, Indonesia, the
Republic of the Congo, the United Kingdom, the United States,
Gabon, Canada, Thailand, Russia and Qatar. In 2008, development
expenditures amounted to €7 billion, predominantly in Angola,
Nigeria, Norway, Kazakhstan, Indonesia, the Republic of the Congo,
the United Kingdom, Gabon, Canada, the United States, and Qatar.
Development expenditures for 2007 amounted to €7 billion and
were carried out principally in Angola, Norway, Nigeria, Kazakhstan,
the Republic of the Congo, the United Kingdom, Indonesia, Gabon,
Canada, Qatar, Venezuela and the United States.
As of December 31, 2009, TOTAL’s combined proved reserves of
oil and gas were 10,483 Mboe (56% of which were proved
developed reserves). Liquids (crude oil, natural gas liquids and
bitumen) represented approximately 54% of these reserves and
natural gas the remaining 46%. These reserves were located in
Europe (mainly in Norway and the United Kingdom), in Africa
(mainly in Angola, Gabon, Libya, Nigeria and the Republic of the
Congo), in the Americas (mainly in Canada, the United States,
Argentina, and Venezuela), in the Middle East (mainly in Oman,
Qatar, the United Arab Emirates, and Yemen), and in Asia (mainly in
Indonesia and Kazakhstan).
‹
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
As of December 31, 2008, TOTAL’s combined proved reserves of
oil and gas were 10,458 Mboe (50% of which were proved
developed reserves). Liquids represented approximately 54% of
these reserves and natural gas the remaining 46%. These reserves
TOTAL / 11
