Business overview
2
Upstream
2.1. Exploration & Production
2
.1.1. Exploration and development
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, 2010, 2009 and 2008, see
TOTAL’s Upstream segment aims at continuing to combine long-
term growth and profitability at the level 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 46%
of the 2,445 Mboe added to the Upstream segment’s proved
reserves during the three-year period ended December 31, 2010
“Supplemental Oil and Gas Information (Unaudited)”.
(
before deducting production and sales of reserves in place and
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.
adding any acquisitions of reserves in place during this period).
The remaining 54% comes from revisions of previous estimates.
In 2010, the exploration investments of consolidated subsidiaries
amounted to €1,472 million (comprising exploration bonuses
included in the unproved property acquisition costs). The main
exploration investments were made in Angola, Norway, Brazil, the
United Kingdom, the United States, Indonesia, Nigeria and Brunei.
In 2009, the exploration investments of consolidated subsidiaries
amounted to €1,486 million (comprising exploration bonuses
included in the 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 €1,243 million (comprising exploration
bonuses included in the 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.
The reserves booking process requires, among other things:
–
internal peer reviews of technical evaluations 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 regarding the preparation of reserves
estimates, see “Supplemental Oil and Gas Information (Unaudited)”.
2.1.3. Proved reserves
In accordance with the amended Rule 4-10 of Regulation S-X,
proved reserves for the years ended on or after 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 prices for 2010 and 2009 were
respectively $79.02/b and $59.91/b for Brent crude. The proved
reserves for the year ended December 31, 2008 were calculated
using December 31 price ($36.55/b).
The Group’s consolidated Exploration & Production subsidiaries’
development investments amounted to €8 billion in 2010, primarily
in Angola, Nigeria, Kazakhstan, Norway, Indonesia, the Republic of
the Congo, the United Kingdom, the United States, Canada,
Thailand, Gabon and Australia. The Group’s consolidated
Exploration & Production subsidiaries’ development investments
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 investments amounted to
As of December 31, 2010, TOTAL’s combined proved reserves
of oil and gas were 10,695 Mboe (53% of which were proved
developed reserves). Liquids (crude oil, natural gas liquids and
bitumen) represented approximately 56% of these reserves and
natural gas the remaining 44%. These reserves were located in
Europe (mainly in Norway and the United Kingdom), in Africa
€7 billion, predominantly in Angola, Nigeria, Norway, Kazakhstan,
Indonesia, the Republic of the Congo, the United Kingdom, Gabon,
Canada, the United States, and Qatar.
(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 Qatar,
the United Arab Emirates, and Yemen), and in Asia (mainly in
Indonesia and Kazakhstan).
2
.1.2. Reserves
The definitions used for proved, proved developed and proved
undeveloped oil and gas reserves are in accordance with the United
States Securities & Exchange Commission (SEC) Rule 4-10 of
Regulation S-X as amended by the SEC Modernization of Oil and
Gas Reporting release issued on December 31, 2008. Proved
reserves are estimated using geological and engineering data to
determine with reasonable certainty whether the crude oil or natural
gas in known reservoirs is recoverable under existing regulatory,
economic and operating conditions.
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).
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
acquisitions, disposal of reserves and other economic factors.
10
TOTAL. Registration Document 2010
