Business overview
2
Upstream
2.1. Exploration & Production
2
.1.1. Exploration and development
TOTAL’s oil and gas reserves are consolidated annually, taking
into account, among other factors, levels of production, field
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. For further information
concerning changes in TOTAL’s proved reserves for the years
ended December 31, 2011, 2010 and 2009, see “Supplemental
Oil and Gas Information (Unaudited)”.
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 76%
of the 2,037 Mboe added to the Upstream segment’s proved
reserves during the three-year period ended December 31, 2011
(before deducting production and sales of reserves in place and
adding any acquisitions of reserves in place during this period).
The remaining 24% comes from revisions of previous estimates.
The level of revisions during this three year period was significantly
impacted by the effect of successive increases of the reference
oil price (from $36.55/b at the end of 2008 to $110.96/b in 2011
for Brent crude) which induced a substantial negative revision.
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 2011, the exploration investments of consolidated subsidiaries
amounted to €1,629 million (including exploration bonuses
included in the unproved property acquisition costs). Exploration
investments were made primarily in Norway, the United Kingdom,
Angola, Brazil, Azerbaijan, Indonesia, Brunei, Kenya, French Guiana
and Nigeria. In 2010, the exploration investments of consolidated
subsidiaries amounted to €1,472 million (including 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, exploration investments of consolidated
subsidiaries amounted to €1,486 million (including exploration
bonuses included in the unproved property acquisition costs)
notably in the United States, Angola, the United Kingdom, Norway,
Libya, Nigeria and the Republic of the Congo.
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 2011, 2010 and 2009 were,
respectively, $110.96/b, $79.02/b and $59.91/b for Brent crude.
The Group’s consolidated Exploration & Production subsidiaries’
development investments amounted to €10 billion in 2011,
primarily in Angola, Nigeria, Norway, Kazakhstan, the United Kingdom,
Australia, Canada, Gabon, Indonesia, the Republic of the Congo,
the United States and Thailand. 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. In 2009, development investments amounted to nearly
As of December 31, 2011, TOTAL’s combined proved reserves
of oil and gas were 11,423 Mboe (53% of which were proved
developed reserves). Liquids (crude oil, natural gas liquids and
bitumen) represented approximately 51% of these reserves and
natural gas the remaining 49%. These reserves were located
in Europe (mainly in Italy, 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 Qatar,
the United Arab Emirates and Yemen), and in Asia (mainly in Australia,
Indonesia, Kazakhstan and Russia).
€
8 billion, predominantly in Angola, Nigeria, Norway, Kazakhstan,
Indonesia, the Republic of the Congo, the United Kingdom, the
United States, Gabon, Canada, Thailand, Russia and Qatar.
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, 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
(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).
10
TOTAL. Registration Document 2011
