TotalEnergies | Annual Report 2016

2

016 EDITION

registration

document

Contents

1. Key figures

7. Social, environmental

and societal information

1. Operating and market data . . . . . . . . . . . . . . . . . . . . . .1

. Selected financial information . . . . . . . . . . . . . . . . . . . 2

2

1. Social information . . . . . . . . . . . . . . . . . . . . . . . . . . . 145

2

3

4

. Safety, health and environment information . . . . . . 151

. Societal information . . . . . . . . . . . . . . . . . . . . . . . . . 161

2. Business overview

.

Reporting scopes and method . . . . . . . . . . . . . . . . . . 172

1. History and strategy of TOTAL . . . . . . . . . . . . . . . . . . . 6

2. Business overview for fiscal year 2016 . . . . . . . . . . . . 8

3. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

4. Research & Development . . . . . . . . . . . . . . . . . . . . . . 44

5. Property, plant and equipment . . . . . . . . . . . . . . . . . . 48

6. Group organization . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

7. Organization charts . . . . . . . . . . . . . . . . . . . . . . . . . . 50

5. Independent verifier’s report . . . . . . . . . . . . . . . . . . .175

8

. TOTAL and its shareholders

1. Listing details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178

2. Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181

3. Share buybacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183

4. Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187

5. Information for foreign shareholders . . . . . . . . . . . . . 191

6. Investor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . 192

3. 2016 Results and outlook

1. Summary of results and financial position . . . . . . . . .54

2. Liquidity and capital resources . . . . . . . . . . . . . . . . . 58

3. Trends and outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

4. Significant changes . . . . . . . . . . . . . . . . . . . . . . . . . . 60

9

. General information

1. Share capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196

2. Articles of incorporation and bylaws;

other information . . . . . . . . . . . . . . . . . . . . . . . . . . . 198

. Historical financial information

4. Risks and control

3

1. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62

2. Legal and arbitration proceedings . . . . . . . . . . . . . . . 73

3. Insurance and risk management . . . . . . . . . . . . . . . . 75

4. Internal control and risk management procedures

and other information . . . . . . . . . . . . . . . . . . . . . . . . 202

1

0. Consolidated Financial Statements

(

Article L. 225-37 of the French Commercial Code) . 76

. Statutory auditors’ report

Article L. 225-235 of the French commercial code) . . .83

1. Statutory auditors’ report on the Consolidated

Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . 206

2. Consolidated statement of income . . . . . . . . . . . . . 207

5

(

3. Consolidated statement of comprehensive income . . . 208

4. Consolidated balance sheet . . . . . . . . . . . . . . . . . . 209

5. Consolidated statement of cash flow . . . . . . . . . . . 210

5. Corporate governance

1. Composition and practices of the Board of Directors . . 86

2. General Management . . . . . . . . . . . . . . . . . . . . . . . . 112

3. Shares held by the administration

6. Consolidated statement of changes

in shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . 211

7. Notes to the Consolidated Financial Statements . . . 212

and management bodies . . . . . . . . . . . . . . . . . . . . . 112

. Statutory auditors . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

4

1

1. Supplemental oil and gas information

(

unaudited)

6

. Compensation of the administration

and management bodies

1. Oil and gas information pursuant to FASB

Accounting Standards Codification 932 . . . . . . . . . 308

1

2

. Board members’ compensation . . . . . . . . . . . . . . . . 116

. Chairman and Chief Executive Officer’s

2. Other information . . . . . . . . . . . . . . . . . . . . . . . . . . . 327

3. Report on the payments made to governments . . 329

compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118

. Executive officers’ compensation . . . . . . . . . . . . . . 125

. Stock option and free share grants . . . . . . . . . . . . . 125

. Summary table of compensation components

due or granted to the Chairman and

3

4

5

1

2. TOTAL S.A.

1. Statutory auditors’ report on related party

agreements and commitments . . . . . . . . . . . . . . . . 344

2. Statutory auditors’ report on the financial statements . . 347

3. Statutory financial statements

Chief Executive Officer for fiscal year 2016,

as submitted to the Ordinary Shareholders’

Meeting for vote . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132

. Report on the principles and criteria

of TOTAL S.A. as parent company . . . . . . . . . . . . . . 348

4. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352

5. Other financial information

6

for the determination, breakdown and allocation

of the fixed, variable and extraordinary components

of the total compensation (including in-kind benefits)

attributable to the Chairman and Chief Executive

Officer (Article L. 225-37-2 of the French

concerning the parent company . . . . . . . . . . . . . . . 365

Glossary

369

375

Commercial Code) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138

Cross-reference lists

Registration Document 2016

Including the annual financial report

This translation is a non binding translation into English of the Chairman and Chief Executive Officer’s certification issued in French and is

provided solely for the convenience of English-speaking readers.

“I certify, after having taken all reasonable measures to this purpose and to the best of my knowledge, that the information contained in this

Document de référence (Registration Document) is in accordance with the facts and makes no omission likely to affect its import.

I certify, to the best of my knowledge, that the statutory and Consolidated Financial Statements of TOTAL S.A. (the Company) have been

prepared in accordance with applicable accounting standards and give a fair view of the assets, liabilities, financial position and results of the

Company and of all the entities included in the consolidation, and that the rapport de gestion (Management Report) of the Board of Directors

as referenced in the cross reference list included on page 379 of this Document de référence (Registration Document) presents a fair view of

the development and performance of the business and financial position of the Company and of all the entities included in the consolidation,

as well as a description of the main risks and uncertainties they are exposed to.

I have received a completion letter from the statutory auditors in which they state that they have audited the information related to the financial

situation and the financial statements included in this Document de référence (Registration Document), as well as read this Document de

référence (Registration Document) in its entirety.

The statutory auditors have reviewed the historical financial information contained in this Document de référence (Registration Document).

The statutory auditors’ report on the Consolidated Financial Statements for the year ended December 31, 2016, is included on page 206

of this Document de référence (Registration Document). The statutory auditors’ report on the Consolidated Financial Statements for the year

ended December 31, 2015 is included on page 188 of the Registration Document 2015 filed on March 16, 2016, with the French Financial

Markets Authority (AMF).”

On March 16, 2017

Patrick Pouyanné

Chairman and Chief Executive Officer

The French language version of this Document de référence (Registration Document) was filed with the French Financial Markets Authority

(Autorité des marchés financiers) on March 17, 2017 pursuant to Article 212-13 of its general regulations. It may be used to support a

financial operation only if supplemented by a transaction note approved by the French Financial Markets Authority. This document was

prepared by the issuer and is binding for its signatories.

Registration Document 2016. TOTAL

i

©

TOTAL S.A. March 2017

ii

TOTAL. Registration Document 2016

Key figures

1

Key figures

1. Operating and market data

2016

2015

2014

Brent ($/b)

Exchange rate (€-$)

European Refining Margin Indicator (ERMI) ($/t)

43.7

1.11

34.1

52.4

1.11

48.5

99.0

1.33

18.7

Hydrocarbon production (kboe/d)

Liquids (kb/d)

Gas (Mcf/d)

2,452

1,271

6,447

2,347

1,237

6,054

2,146

1,034

6,063

Refinery throughput (kb/d)

Petroleum product sales⁽^c⁾(kb/d)

1,965

4,183

2,023⁽^a⁾

4,005

1,775⁽^b⁾

3,769

(a) Since 2015, the condensate splitters of Port Arthur and Daesan are integrated in the refining capacities and 2015 data have been restated.

(b) Excluding the condensate splitters of Port Arthur and Daesan.

(c) Including Trading.

Registration Document 2016. TOTAL

1

Key figures

1

Selected financial information

2. Selected financial information

Consolidated data in millions of dollars, except for earnings per share, dividends, number of shares and percentages.

(M$)

2016

2015

2014

Sales

149,743

165,357

236,122

Adjusted operating income from business segments⁽^a⁾

Adjusted net operating income from business segments⁽^a⁾

of which Upstream

of which Refining & Chemicals

of which Marketing & Services

8,928

9,420

3,633

4,201

1,586

12,672

11,362

4,774

4,889

1,699

21,604

14,247

10,504

2,489

1,254

Net income (Group share)

Adjusted net income (Group share)⁽^a⁾

6,196

8,287

5,087

10,518

4,244

12,837

Fully-diluted weighted-average shares (millions)

Adjusted fully-diluted earnings per share (dollars)⁽^a⁾⁽^b⁾

Dividend per share (euros)⁽^c⁾

2,390

3.38

2.45

2,304

4.51

2.44

2,281

5.63

2.44

Net-debt-to-equity ratio (as of December 31)

Return on average capital employed (ROACE)⁽^d⁾

Return on equity (ROE)⁽^e⁾

27.1%

7.5%

8.7%

28.3%

9.4%

11.5%

31.3%

11.1%

13.5%

Gross investments⁽^f⁾

Divestments

Net investments⁽^g⁾

Organic investments⁽^h⁾

Operating cash flow before working capital changes⁽ⁱ⁾

Cash flow from operations

20,530

2,877

17,757

17,484

16,988

16,521

28,033

7,584

20,360

22,976

19,376

19,946

30,509

6,190

24,140

26,430

24,597

25,608

(

a) Adjusted results are defined as income at replacement cost, excluding non-recurring items and excluding the impact of fair value changes.

b) Based on fully-diluted weighted-average number of common shares oustanding during the fiscal year.

c) 2016 dividend is subject to approval at the May 26, 2017 Annual Shareholders’ Meeting.

d) Ratio of adjusted net operating income to average capital employed between the beginning and the end of the period.

e) Ratio of adjusted consolidated net income to average adjusted shareholders’ equity (after distribution) between the beginning and the end of the period.

f) Including acquisitions and increases in non-current loans.

g) Net investments = gross investments – divestments – repayment of non-current loans – other operations with non-controlling interests.

h) Organic investments = net investments, excluding acquisitions, divestments and other operations with non-controlling interests.

i) Operating cash flow before working capital changes = cash flow from operating activities before changes in working capital at replacement cost.

2

Registration Document 2016. TOTAL

Key figures

Selected financial information

1

Upstream

Hydrocarbon production

Liquids and gas reserves⁽^a⁾

2

,452

11,523

11,580

11,518

2,347

2,146

757

664

613

5

6

,303

5,605

5,413

Europe and

Central Asia

(a)

Africa

639

531

634

610

Middle East

and North

Africa

5

2

17

79

438

,220

5,975

6,105

Americas

Liquids

Gas

2

47

38

255

258

Asia-Pacific

265

(kboe/d)

2014

2015

2016

(Mboe)

2014

2015

2016

(a) Excluding North Africa.

(a) Based on SEC rules (Brent at 42.82 $/b in 2016, 54.17 $/b

in 2015 and 101.27 $/b in 2014).

Refining & Chemicals and Marketing & Services

Petroleum product sales

Refining capacity

including Trading

as of December 31, 2016

4

,183

2,247

2

,187

4,005

3,769

2,011

2

,355

2

,184

2

1

,047

,722

1

,699

1

,736

1

,454

557

Europe

1,821

1,828

Rest of

world

Rest of

world

5

48

4

51

(kb/d)

2014

2015

2016

(kb/d)

2014

2015

2016

Petrochemicals production

capacity by geographic area

as of December 31, 2016

Marketing & Services petroleum

product sales by geographic

area in 2016

Europe

10,383 kt

1,093 kb/d

Rest of world

11,024 kt

700 kb/d

21,407 kt

1,793 kb/d

(kt)

2016

(kb/d)

2016

Registration Document 2016. TOTAL

3

Key figures

1

Selected financial information

Shareholder base

Shareholder base by region

Estimates as of December 31, 2016, excluding

treasury shares, based on the survey of identifiable

holders of bearer shares (titre au porteur

Estimates as of December 31, 2016, excluding

treasury shares, based on the survey of identifiable

holders of bearer shares (titre au porteur

identifiable – TPI) conducted on that date.

Group

employees 4.9%

France 27.7%

(

a)

North

America 36.0%

Individual

shareholders 7.9%

Rest of

Europe 16.0%

Institutional

shareholders 87.2%

United

Kingdom 12.2%

Rest of world 8.1%

(

%)

2016

(%)

2016

(

a) On the basis of employee shareholdings as defined in article

L. 225-102 of the French Commercial Code, treasury shares

excluded (4.8% of the total share capital, refer to point 4.1 of

chapter 8).

Employees by segment⁽^a⁾

Employees by region⁽^a⁾

Refining & Chemicals 49.8%

Trading & Shipping 0.6%

Marketing

France 31.5%

Rest of Europe

&

Services 20.4%

New Energies

1.5%

1

25.2%

Exploration &

Production 14.6%

Rest of world

3.3%

Gas 1.2%

4

Corporate 1.9%

(%)

2016

(%)

2016

(

a) Consolidated companies.

(a) Consolidated companies.

Workforce as of December 31, 2016: 102,168 employees.

4

Registration Document 2016. TOTAL

2.Présentation des activités

Business overview

2

Business overview

1.

History and strategy of TOTAL

6

1.1.

1.2.

1.3.

History and development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

Group organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

2.

Business overview for fiscal year 2016

8

2.1.

2.2.

2.3.

Upstream segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8

Refining & Chemicals segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30

Marketing & Services segment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36

3.

Investments

42

3

.1.

.2.

Major investments over the 2014-2016 period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42

Major planned investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43

4.

Research & Development

44

4.1.

4.2.

4.3.

4.4.

4.5.

Upstream . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44

Refining & Chemicals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45

Marketing & Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45

Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47

R&D Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47

5

.

Property, plant and equipment

Group organization

48

49

6

6.1.

6.2.

6.3.

Position of the Company within the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49

Company subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49

Group interests in publicly-traded companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49

7.

Organization charts

50

TOTAL. Registration Document 2016

5

Business overview

2

History and strategy of TOTAL

1. History and strategy of TOTAL

1.1. History and development

TOTAL S.A., a French société anonyme (limited company)

incorporated on March 28, 1924 is, together with its subsidiaries

and affiliates, the world’s fourth largest publicly-traded integrated oil

TOTAL began its Upstream operations in the Middle East in 1924.

Since then, the Company has grown and expanded its operations

worldwide. In early 1999, the Company took over PetroFina S.A.

and in early 2000 it took over Elf Aquitaine. Since the repeal in 2002

of the decree of December 13, 1993 that established a golden

share of Elf Aquitaine held by the French government, there are

no longer any agreements or regulatory provisions governing

shareholding relationships between TOTAL and the French

government. Information on TOTAL S.A.’s shareholding structure

is presented in point 4.1 of chapter 8.

and gas company⁽¹⁾

.

With operations in more than 130 countries, TOTAL is engaged in

every sector of the oil and gas industry, including upstream

(hydrocarbon exploration, development and production) and

downstream (refining, petrochemicals, specialty chemicals, trading and

shipping of crude oil and petroleum products and marketing). TOTAL is

also involved in the renewable energies and power generation sectors.

1.2. Strategy

TOTAL is a leading international oil and gas company and aims to

be the responsible energy major by helping to supply accessible,

affordable and clean energy to as many people as possible. To

accomplish this goal, TOTAL leverages its integrated business

model, which enables it to capture synergies between the different

activities of the Group. To achieve its ambition, TOTAL relies upon

its operational excellence, technological expertise and capacity to

manage complex projects.

– expanding along the full gas value chain by unlocking access to

new markets, and developing profitable low-carbon businesses,

in particular renewable energies.

This strategy incorporates the challenges of climate change, using

as a point of reference the 2°C scenario of the International Energy

Agency and its impact on energy markets. TOTAL’s challenge is to

increase access to affordable energy to satisfy the needs of a

growing population, while providing concrete solutions to help limit

the effects of climate change and supplying its clients with an

energy mix featuring a progressively decreasing carbon intensity.

The Group’s strategy is based on four main priorities:

–

driving profitable, sustainable growth in

Exploration & Production’s hydrocarbon activities, with priority

given to reducing production costs, disciplined investments and

cash flow generation;

In addition to safety, the values of respect, responsibility and

exemplary conduct underpin TOTAL’s Code of Conduct and

accompany priority business principles in the realms of

–

continuing to enhance the competitiveness of major integrated

refining and petrochemical platforms;

increasing the distribution of petroleum products, particularly in

high-growth regions, and offering innovative solutions and

services that meet customers’ evolving needs above and beyond

the supply of petroleum products; and

safety/security/health/environment, integrity (preventing corruption,

fraud and anti-competitive practices) and human rights. It is

through strict adherence to these values and principles that TOTAL

intends to build strong and sustainable growth for the Group and its

stakeholders and deliver on its commitment to better energy.

(1) Based on market capitalization (in dollars) as of December 31, 2016.

6

TOTAL. Registration Document 2016

Business overview

History and strategy of TOTAL

2

1.3. Group organization

In order to implement TOTAL’s strategy and in line with the “One

Total” company project, a new organization, fully effective since

January 1, 2017, was put in place and is structured around four

business segments following the creation of the Gas,

Renewables & Power (GRP) segment, alongside the existing

Exploration & Production, Refining & Chemicals and

Marketing & Services segments.

service companies for internal clients across all four business

segments and the corporate Holding level.

Finally, the diverse Corporate entities were regrouped in two

divisions.

The new People & Social Responsibility division consists of: the

Human Resources division, including Senior Executive

Management; the Health, Safety and Environment division, which

combines HSE departments across the different segments to

establish a strong, unified environmental and safety model; the

Security division; and the new Civil Society Engagement division.

The GRP segment spearheads TOTAL’s ambitions in low-carbon

businesses by expanding in downstream gas and renewable

energies as well as in energy efficiency businesses. This segment

brings together the Gas and New Energies divisions (excluding

biotechnologies) and a new Innovation & Energy efficiency division.

Concerning bioenergies, a new Biofuels division now regroups

within the Refining & Chemicals segment all these activities.

The new Strategy-Innovation division is made of: a new Strategy &

Climate division, responsible notably for ensuring that TOTAL’s strategy

incorporates climate issues; the Public Affairs division; the Audit

division; the Research & Development division (which replaces

the Scientific Development Department and now coordinates

all of the Group’s R&D activities and notably transversal programs

In order to improve efficiency, reduce costs and create value within

the Group, the new branch Total Global Services (TGS) pools

the various segments’ support services (Accounting, Purchasing,

Information Systems, Training, Human Resources Administration

and Facilities Management). The entities making up TGS operate as

such as on carbon capture, use and storage of CO

2

); the Chief

Digital Officer; and the Senior Vice President, Technology Experts.

Registration Document 2016. TOTAL

7

Business overview

2

Upstream segment

2. Business overview for fiscal year 2016

2.1. Upstream segment

TOTAL’s Upstream segment includes the activities of Exploration &

Production and Gas. The Group has exploration and production

activities in more than 50 countries and produces oil and gas in

approximately 30 countries. The Gas division conducts downstream

activities related to natural gas, Liquefied Natural Gas (LNG)

and Liquefied Petroleum Gas (LPG), as well as power generation

and trading.

Within the context of the One Total new organization, as of financial

year 2017, Upstream activities will be reported within two segments:

the Exploration & Production segment and the new Gas,

Renewables & Power segment, which includes downstream gas

activities (see point 1.3 of this chapter).

2

.45Mboe/d

11.5Bboe

of proved hydrocarbon

reserves as of

$15.1billion

15,191

of organic investments⁽and

2)

employees present

hydrocarbons

produced in 2016

resource acquisitions in 2016

December 31, 2016⁽¹⁾

Upstream segment financial data

(M$)

2016

2015

2014

Adjusted operating income⁽^a⁾

Adjusted net operating income⁽^a⁾

2,737

3,633

4,925

4,774

17,156

10,504

(a) Adjusted results are defined as income using replacement cost, adjusted for special items, excluding the impact of changes for fair value.

Upstream adjusted net operating income was $3,633 million for the full-year 2016, compared to $4,774 million in 2015, a decrease of 24%,

mainly due the impact of lower hydrocarbon prices which was partially offset by the increase in production combined with the decrease in

operating costs as well as the lower effective tax rate. The effective tax rate for the Upstream was 26.6% in 2016 compared to 45.5% in 2015.

Technical costs⁽³⁾for consolidated affiliates, calculated in accordance with ASC 932⁽⁴⁾, were reduced to 20.4 $/boe in 2016 compared to

23.0 $/boe in 2015. This decrease was essentially due to the reduction in operating costs from 7.4 $/boe in 2015 to 5.9 $/boe in 2016.

Price realizations⁽^a⁾

2016

2015

2014

Average liquids price ($/b)

Average gas price ($/Mbtu)

40.3

3.56

47.4

4.75

89.4

6.57

(a) Consolidated subsidiaries, excluding fixed margins.

The average liquids price decreased by 15% for the full-year 2016 compared to 2015 and the average gas price decreased by 25% in 2016

compared to 2015.

(

1) Based on a Brent crude price of 42.82 $/b (reference price in 2016), according to rules established by the Securities and Exchange Commission (refer to point 2.1.1.2).

2) Organic investments = net investments, excluding acquisitions, divestments and other operations with non-controlling interests (refer to point 3.1 of chapter 2).

3) (Production costs + exploration expenses + depreciation, depletion and amortization and valuation allowances)/production of the year.

4) FASB Accounting Standards Codification 932, Extractive industries – Oil and Gas.

8

TOTAL. Registration Document 2016

Business overview

Upstream segment

2

Production

Hydrocarbon production

2016

2015

2014

Combined production (kboe/d)

Liquids (kb/d)

Gas (Mcf/d)

2,452

1,271

6,447

2,347

1,237

6,054

2,146

1,034

6,063

For the full-year 2016, hydrocarbon production was 2,452 kboe/d,

an increase of 4.5% compared to 2015, due to the following:

Europe and

Central Asia 757 kboe/d

•

+6% due to new start ups and ramp ups, notably Laggan-Tormore,

Surmont Phase 2, Termokarstovoye, Gladstone LNG, Moho

Phase 1b, Vega Pleyade, and Incahuasi;

(a)

Africa 634 kboe/d

Middle East

and North Africa 517 kboe/d

•

-1.5% due to the security situation in Nigeria and Yemen,

and wild fires in Canada;

natural field decline was offset by a positive price effect and

portfolio effects.

Americas 279 kboe/d

Asia-Pacific 265 kboe/d

(

a) Excluding North Africa.

Proved reserves

As of December 31,

2016

2015

2014

Hydrocarbon reserves (Mboe)

Liquides (Mb)

11,518

5,414

11,580

5,605

11,523

5,303

Gaz (Bcf)

32,984

32,206

33,590

Proved reserves based on SEC rules (based on Brent at 42.82 $/b)

were 11,518 Mboe at December 31, 2016. The 2016 proved

Europe and

Central Asia 4,126 Mbep

(1)

reserve replacement rate , based on SEC rules (based on Brent

at 42.82 $/b in 2016), was 93% in 2016 and 100% over three years.

At a constant price (54.17 $/b in 2015), the proved reserve

replacement rate was 136% in 2016. The difference between the

proved reserves based on SEC rules and the proved reserves

based on a constant price is mainly due to the debooking of proved

undeveloped reserves of Canadian oil sands on the Surmont permit.

(

a)

Africa 1,872 Mbep

Middle East and

North Africa 2,734 Mbep

Americas 1,804 Mbep

Asia-Pacific 982 Mbep

At year-end 2016, TOTAL had a solid and diversified portfolio

of proved and probable reserves⁽²⁾representing more than 20 years

of reserve life based on the 2016 average production rate.

(

a) Excluding North Africa.

(

1) Change in reserves excluding production: (revisions + discoveries, extensions + acquisitions – divestments)/production for the period.

2) Limited to proved and probable reserves covered by Exploration & Production contracts on fields that have been drilled and for which technical studies have demonstrated economic development

in the price scenario retained by the Group, including projects developed by mining.

Registration Document 2016. TOTAL

9

Business overview

2

Upstream segment

2

.1.1. Exploration & Production

Organic investments⁽¹⁾from all Exploration & Production subsidiaries

were $14.5 billion⁽²⁾in 2016, compared to $20.5 billion in 2015 and

Exploration & Production (E&P)’s mission is to discover and develop

oil and gas fields in order to meet growing energy demand. Safety

is a core value for that mission.

$23 billion in 2014, and were mainly in Angola, the Republic of the

Congo, Nigeria, Norway, Canada, Australia, Kazakhstan, the United

Kingdom, Russia, the United States, Abu Dhabi, Indonesia and Brazil.

In an environment marked by the strong volatility of hydrocarbon

prices, E&P’s strategy is to develop an oil and gas production model

that is resilient (i.e., able to withstand a long period of low oil and

gas prices), profitable and sustainable.

2.1.1.2. 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.

This strategy is based on three main levers:

–

increase profitability: E&P strives to maximize the value of its

assets through operational excellence and to ensure strict

investment discipline by being selective in the sanctioning of new

projects. In addition, E&P continues to restructure or sell the least

performing assets in its portfolio;

–

develop operational excellence: in order to ensure its resilience,

E&P continues to reduce costs, improve the efficiency of its

installations and start up projects on time and within budget. E&P

also seeks to minimize the environmental impact of its activities; and

renew reserves, through exploration as well as accessing already

discovered resources, building on E&P’s competitive advantages

in terms of geographical spread and technical skills.

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. 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.

E&P is exiting a heavy investments phase, which peaked in 2013

and which is expected to enable production to increase 5% on

average per year over the period of 2014-2020. That growth is

supported, on the one hand, by the start-up of 12 major projects in

2017 and 2018 and, on the other hand, by the improvement of the

facilities’ operational efficiency. In 2016, 5 projects were started up,

contributing to production growth of 4.5% compared to 2015.

The reserves booking process requires, among other things:

2.1.1.1. Exploration and development

–

that internal peer review of technical evaluations are carried out

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.

TOTAL evaluates exploration opportunities based on a variety

of geological, technical, political, economic (including tax and

contractual terms) environmental and societal factors.

The exploration strategy deployed since 2015 aims to prioritize

the most promising drill targets with a view to creating value and

resources. The Group plans balanced exploration investments:

For further information concerning the reserves and their evaluation

process, see points 1 and 2 of chapter 11.

–

50% for core and emerging basins, where the presence of

hydrocarbons is already proven;

Proved reserves for 2016, 2015 and 2014

In accordance with the amended Rule 4-10 of Regulation S-X,

proved reserves at December 31 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 average reference

prices for Brent crude for 2016, 2015 and 2014 were, respectively,

42.82 $/b, 54.17 $/b and 101.27 $/b.

–

25% for near-field exploration around producing assets; and

25% for high-potential frontier basins.

In 2015, a new organization for the Group’s exploration activities,

adapted to the new strategy, was implemented with a new senior

exploration management team. The organizational changes,

focused notably on strengthening regional basin mastery and

technical excellence, were finalized in 2016 with the transfer of

Asia-Pacific and Americas regional hubs to Singapore and

Houston, respectively.

As of December 31, 2016, TOTAL’s combined proved reserves of oil

and gas were 11,518 Mboe (58% of which were proved developed

reserves). Liquids (crude oil, condensates, natural gas liquids and

bitumen) represented approximately 47% of these reserves and

natural gas 53%. These reserves were located in Europe (mainly in

Norway and the United Kingdom), Africa (mainly in Angola, Gabon,

Nigeria and the Republic of the Congo), the Americas (mainly in

Canada, Argentina, the United States and Venezuela), the Middle

East (mainly in Qatar, the United Arab Emirates and Yemen), and

Asia-Pacific (mainly in Australia) and in Kazakhstan and Russia.

In 2016, exploration expenditure from all Exploration & Production

subsidiaries was $1.4 billion, mainly in the United States, Norway,

Papua New Guinea, Brazil, Iraq, Bulgaria, Myanmar and the United

Kingdom, compared to $1.9 billion in 2015 and $2.6 billion in 2014.

The 2017 exploration budget is $1.25 billion.

(

1) For Exploration & Production, organic investments include exploration investments, net development investments and net financial investments.

(2) Excluding the Group’s Gas activities.

10

TOTAL. Registration Document 2016

Business overview

Upstream segment

2

At a constant oil price (54.17 $/b) the proved reserves were 11,905

Mboe. The difference between the proved reserves based on SEC

rules and the proved reserves based on a constant price is mainly

due to the debooking of proved undeveloped reserves of Canadian

oil sands on the Surmont permit.

2.1.1.3. Production

The average daily production of liquids and natural gas was

2

,452 kboe/d in 2016 compared to 2,347 kboe/d in 2015 and

,146 kboe/d in 2014. Liquids represented approximately 52%

and natural gas approximately 48% of TOTAL’s overall production

in 2016.

Discoveries of new fields and extensions of existing fields added

2

,172 Mboe to the Upstream segment’s proved reserves during

The tables on the following pages set forth TOTAL’s annual and

average daily production of liquids and natural gas by geographic

area and for each of the last three fiscal years.

the 3-year period ended December 31, 2016 (before deducting

production and sales of reserves in place and adding any acquisitions

of reserves in place during this period). The net level of reserve

revisions during this 3-year period is +505 Mboe, which was mainly

due to the overall positive revisions in field behaviors and to the

positive impact of the decrease in hydrocarbon prices in 2015

and 2016 that led to a reserves increase on fields with production

sharing or service contracts and on Canadian bitumen fields (royalty

effect), which was partially offset by the reserves decrease resulting

from the suspension or cancellation due to economic reasons of

capital expenditures associated with, or from shorter producing life

of, certain producing fields.

Consistent with industry practice, TOTAL often holds a percentage

interest in its fields rather than a 100% interest, with the balance

being held by joint venture partners (which may include other

international oil companies, state-owned oil companies or government

entities). The Group’s entities may frequently act as operator (the

party responsible for technical production) on acreage in which it

holds an interest. Refer to the table “Presentation of production

activities by region” on the following pages for a presentation of the

Group’s producing assets.

(

1)

The 2016 proved reserve replacement rate , based on SEC rules

based on Brent at 42.82 $/b in 2016), was 93% in 2016 and 100%

As in 2015 and 2014, substantially all of the liquids production from

TOTAL’s Upstream segment in 2016 was marketed by the Trading &

Shipping division of TOTAL’s Refining & Chemicals segment (refer to

table “Trading’s crude oil sales and supply and petroleum products

sales” in point 2.2.2.1 of this chapter).

(

over three years. At a constant price (54.17 $/b in 2015), the proved

reserve replacement rate was 136% in 2016.

As of December 31, 2015, TOTAL’s combined proved reserves of oil

and gas were 11,580 Mboe (53% of which were proved developed

reserves) compared to 11, 523 Mboe (50% of which were proved

developed reserves) as of December 31, 2014. Liquids (crude oil,

condensates, natural gas liquids and bitumen) at year-end 2015

represented approximately 48% of these reserves and natural gas

the remaining 52% and, at year-end 2014, approximately 46% of

these reserves and natural gas the remaining 54%.

2

.1.1.4. Delivery commitments

The majority of TOTAL’s natural gas production is sold under long-

term contracts. However, its North American production, and part

of its production from the United Kingdom, the Netherlands and

Norway, is sold on the spot market. The long-term contracts under

which TOTAL sells its natural gas usually provide for a price related

to, among other factors, average crude oil and other petroleum

product prices, as well as, in some cases, a cost-of-living index.

Though the price of natural gas tends to fluctuate in line with crude

oil prices, a slight delay may occur before changes in crude oil

prices are reflected in long-term natural gas prices.

Sensitivity to oil and gas prices

Changes in the price used as a reference for the proved reserves

estimation result in non-proportionate inverse changes in proved

reserves associated with production sharing and risked service

contracts (which together represent approximately 19% of TOTAL’s

reserves as of December 31, 2016). Under such contracts, TOTAL

is entitled to a portion of the production, the sale of which is meant

to cover expenses incurred by the Group. As oil prices decrease,

more barrels are necessary to cover the same amount of expenses.

Moreover, the number of barrels recoverable under these contracts

may vary according to criteria such as cumulative production, the

rate of return on investment or the income-cumulative expenses

ratio. This increase is partly offset by a reduction of the duration

over which fields can be produced economically. However, the

decrease in reserves due to this reduction is generally less than the

increase in reserves under production sharing or risked service

contracts due to such lower prices. As a result, lower prices usually

lead to an increase in TOTAL’s reserves. In Canada, a decrease in

the reference price per barrel used as a reference for estimating

proved reserves leads to a decrease in the volume of royalties and,

therefore, an increase of the proved reserves, and vice versa.

Some of TOTAL’s long-term contracts, notably in Bolivia, Indonesia,

Nigeria, Norway, Thailand and Qatar, specify the delivery of quantities

of natural gas that may or may not be fixed and determinable.

Such delivery commitments vary substantially, both in duration

and scope, from contract to contract throughout the world.

For example, in some cases, contracts require delivery of natural

gas on an as-needed basis, and, in other cases, contracts call for

the delivery of varied amounts of natural gas over different periods

of time. Nevertheless, TOTAL estimates the fixed and determinable

quantity of gas to be delivered over the period 2017-2019 to be

4,734 Bcf. The Group expects to satisfy most of these obligations

through the production of its proved reserves of natural gas, with,

if needed, additional sourcing from spot market purchases

(refer to points 1 and 2 of chapter 11).

2.1.1.5. Contractual framework of activities

Licenses, permits and contracts governing the Group’s ownership

of oil and gas interests have terms that vary from country to country

and are generally granted by or entered into with a government

entity or a state-owned company and are sometimes entered into

with private owners. These agreements usually take the form of

concessions or production sharing contracts.

Lastly, for any type of contract, a significant decrease in the

reference price of petroleum products that negatively impacts

projects profitability may lead to a reduction of proved reserves.

(1) Change in reserves excluding production: (revisions + discoveries, extensions + acquisitions – divestments)/production for the period.

Registration Document 2016. TOTAL

11

Business overview

2

Upstream segment

In the framework of oil concession agreements, the oil company

owns the assets and the facilities and is entitled to the entire

production. In exchange, the operating risks, costs and investments

are the oil company’s responsibility and it agrees to remit to the

relevant host country, usually the owner of the subsoil resources, a

production-based royalty, income tax, and possibly other taxes that

may apply under local tax legislation.

In some countries, TOTAL has also signed contracts called “risked

service contracts”, which are similar to PSCs. However, the profit oil

is replaced by a defined cash monetary remuneration, agreed by

contract, which depends notably on field performance parameters

such as the amount of barrels produced.

Oil and gas exploration and production activities are subject to

authorization granted by public authorities (licenses), which are

granted for specific and limited periods of time and include an

obligation to relinquish a large portion, or the entire portion in case

of failure, of the area covered by the license at the end of the

exploration period.

The production sharing contract (“PSC”) involves a more complex

legal framework than the concession agreement: it defines the

terms and conditions of production sharing and sets the rules

governing the cooperation between the company or consortium in

possession of the license and the host country, which is generally

represented by a state-owned company. The latter can thus be

involved in operating decisions, cost accounting and production

allocation. The consortium agrees to undertake and finance all

exploration, development and production activities at its own risk.

In exchange, it is entitled to a portion of the production, known as

TOTAL pays taxes on income generated from its oil and gas

production and sales activities under its concessions, PSCs and

risked service contracts, as provided for by local regulations.

In addition, depending on the country, TOTAL’s production and

sales activities may be subject to a number of other taxes, fees and

withholdings, including special petroleum taxes and fees. The taxes

imposed on oil and gas production and sales activities are generally

substantially higher than those imposed on other industrial or

commercial businesses.

“cost oil”, the sale of which is intended to cover its incurred

expenses (capital and operating costs). The balance of production,

known as “profit oil”, is then shared in varying proportions, between

the company or consortium, on the one hand, and the host country

or state-owned company, on the other hand.

Today, concession agreements and PSCs can coexist, sometimes

in the same country or even on the same block. Even though there

are other contractual models, TOTAL’s license portfolio is

comprised mainly of concession agreements.

On most licenses, the partners and authorities of the host country,

often assisted by international accounting firms, perform joint

venture and PSC cost audits and ensure the observance of

contractual obligations.

12

TOTAL. Registration Document 2016

Business overview

Upstream segment

2

2.1.1.6. Production by region

The following table sets forth the Group’s annual liquids and natural gas production by region, according to the internal business units of the Group.

016 2015 2014

2

Liquids

Natural

gas

Total

Mboe

Liquids

Natural

Total

Mboe

Liquids

Natural

Total

Mboe

Mb⁽

a)

Mb

(a)

gas

Mb

(a)

gas

Bcf⁽

b)

Bcf

(b)

Bcf

(b)

Europe and Central Asia

Azerbaijan

France

91

-

1,002

-

277

-

80

-

881

-

243

-

73

1

-

812

22

3

224

5

1

-

Italia

-

Kazakhstan

Norway

The Netherlands

United Kingdom

Russia

1

44

-

18

28

2

1

86

9

58

123

-

47

-

13

20

-

49

-

11

12

-

226

52

218

504

224

58

142

457

88

10

39

106

210

62

122

393

88

11

32

86

Africa (excluding North Africa)

Angola

Republic of the Congo

Gabon

Nigeria

186

84

31

20

51

227

25

11

5

232

89

33

21

89

190

86

30

20

54

212

18

11

5

233

90

32

22

89

179

70

32

20

57

225

20

13

5

187

223

73

35

21

94

186

178

Middle East and North Africa

Algeria

United Arab Emirates

Iraq

Libya

Oman

Qatar

Yemen

137

2

102

6

291

33

25

<1

-

23

210

-

189

8

107

7

136

3

100

7

5

8

318

35

24

-

193

9

105

7

82

2

42

4

10

9

12

3

424

29

22

-

159

7

46

4

10

13

48

31

5

-

5

-

10

11

-

14

49

-

21

209

29

12

49

6

22

203

148

12

1

Americas

Argentina

Bolivia

Canada

United States

Venezuela

40

3

1

12

11

12

346

143

59

102

29

12

31

17

35

3

1

5

13

327

129

49

93

26

10

5

33

19

32

3

1

4

10

14

323

134

51

90

27

11

4

28

19

-

111

33

112

37

104

34

Asia-Pacific

Australia

Brunei

11

-

1

-

494

33

29

97

6

7

12

-

1

-

471

10

23

94

1

5

11

-

1

-

429

8

24

87

1

5

China

19

4

22

4

23

4

Indonesia

Myanmar

Thailand

7

-

3

240

60

112

51

8

22

8

-

3

247

56

113

54

7

23

7

-

4

217

49

108

47

6

22

Total production

465

2,360

897

453

2,209

856

377

2,213

783

Including share

of equity affiliates

91

694

220

81

667

204

73

726

208

Angola

United Arab Emirates

Oman

Qatar

Russia

-

42

9

7

19

23

139

503

3

2

45

13

28

120

12

-

39

8

-

18

21

140

456

3

-

43

12

28

102

14

5

-

40

8

3

9

4

19

22

139

392

2

1

43

12

28

83

14

27

3

25

12

-

17

14

-

Venezuela

Yemen

14

-

29

147

(

a) Liquids consist of crude oil, bitumen, condensates and natural gas liquids (NGL). With respect to bitumen, the Group’s production in Canada consists of bitumen only, and all of the Group’s

bitumen production is in Canada. With respect to NGL, the table above does not set forth separate figures for NGL because they represented less than 7.5% of the Group’s total liquids

production in each of the years 2014, 2015 and 2016.

(b) Including fuel gas (163 Bcf in 2016, 159 Bcf in 2015, 155 Bcf in 2014).

Registration Document 2016. TOTAL

13

Business overview

2

Upstream segment

The following table sets forth the Group’s average daily liquids and natural gas production by region, according to the internal business units

of the Group.

2016

2015

2014

Liquids

Natural

gas

Mcf/d⁽^b⁾

Total

kboe/d

Liquids

Natural

Total

kboe/d

Liquids

Natural

Total

kboe/d

kb/d⁽

a)

kb/d

(a)

gas

kb/d

(a)

gas

Mcf/d⁽^b⁾

Europe and Central Asia

Azerbaijan

France

249

-

2,737

757

-

215

-

2,413

664

-

201

3

2,224

59

613

14

2

-

9

Italia

-

Kazakhstan

Norway

The Netherlands

United Kingdom

Russia

3

121

-

49

76

6

4

-

618

141

595

1,377

235

25

158

335

125

1

35

54

614

158

389

1,252

239

28

107

290

135

1

29

33

576

171

333

1,076

242

31

89

235

Africa (excluding North Africa)

Angola

Republic of the Congo

Gabon

509

230

84

621

68

29

634

243

90

521

238

81

581

49

30

639

248

87

490

191

88

614

54

35

610

200

95

55

15

58

55

15

59

55

14

58

Nigeria

140

509

243

147

487

245

156

511

257

Middle East and North Africa

Algeria

United Arab Emirates

Iraq

Libya

Oman

Qatar

Yemen

373

6

795

90

67

1

517

23

291

18

14

37

372

7

874

96

66

1

531

25

287

18

14

36

224

5

1,163

79

438

20

127

12

27

36

279

17

14

26

31

-

274

18

14

25

32

2

115

12

27

24

32

9

61

1

-

61

555

406

-

62

575

-

58

573

80

134

-

134

17

132

84

Americas

Argentina

Bolivia

Canada

United States

Venezuela

109

8

4

34

31

32

944

391

160

-

304

89

279

78

34

86

47

95

8

3

14

34

36

896

354

133

-

308

101

255

72

28

14

89

52

89

9

4

12

27

37

884

367

139

-

285

93

247

75

30

12

78

52

Asia-Pacific

Australia

Brunei

31

-

3

-

19

-

1,350

91

265

16

18

10

140

21

34

-

3

-

22

-

1,290

28

258

4

30

-

2

-

18

-

1,178

23

238

4

78

53

657

165

306

62

59

676

153

312

15

11

147

19

62

66

63

594

135

297

15

12

130

17

60

China

Indonesia

Myanmar

Thailand

9

60

9

10

Total production

1,271

6,447

2,452

1,237

6,054

2,347

1,034

6,063

2,146

Including share

of equity affiliates

247

1,894

600

219

1,828

559

200

1,988

571

Angola

United Arab Emirates

Oman

Qatar

Russia

1

114

24

7

69

32

-

20

51

62

5

123

36

76

327

33

-

107

24

7

45

36

-

50

58

-

116

34

77

280

37

-

109

23

7

24

37

-

10

51

61

2

118

34

77

227

38

379

1,375

7

383

1,250

7

381

1,075

6

Venezuela

Yemen

-

80

15

404

75

(

a) Liquids consist of crude oil, bitumen, condensates and natural gas liquids (NGL). With respect to bitumen, the Group’s production in Canada consists of bitumen only, and all of the Group’s

bitumen production is in Canada. With respect to NGL, the table above does not set forth separate figures for NGL because they represented less than 7.5% of the Group’s total liquids

production in each of the years 2014, 2015 and 2016.

(b) Including fuel gas (448 Mcf/d in 2016, 435 Mcf/d in 2015, 426 Mcf/d in 2014).

14

TOTAL. Registration Document 2016

Business overview

Upstream segment

2

2.1.1.7. Presentation of production activities by geographical zone

The table below sets forth, by geographical zone according to the internal business units of the Group, TOTAL’s producing assets, the year

in which TOTAL’s activities started, the Group’s interest in each asset and whether TOTAL is operator of the asset.

TOTAL’s producing assets as of December 31, 2016⁽^a⁾

Europe

and Central Asia

Kazakhstan

992

Non operated: Kashagan (16.81%)

1

Norway

965

Operated: Atla (40.00%), Skirne (40.00%)

Non-operated: Åsgard (7.68%), Ekofisk (39.90%), Ekofisk South (39.90%), Eldfisk (39.90%), Embla (39.90%),

1

(b)

Gimle (4.90%), Heimdal (16.76%), Islay (5.51%) , Kristin (6.00%), Kvitebjørn (5.00%), Mikkel (7.65%), Oseberg

14.70%), Oseberg East (14.70%), Oseberg South (14.70), Snøhvit (18.40%), Stjerne (14.70%), Troll I (3.69%),

(

Troll II (3.69%), Tune (10.00%), Tyrihans (23.15%), Visund (7.70%), Visund South (7.70%), Visund North (7.70%)

The Netherlands

964

Operated: F6a oil (65.68%), F15a Jurassic (38.20%), F15a Triassic (32.47%), J3a (30.00%), K1a (40.10%), K3b (56.16%),

K4a (50.00%), K4b/K5a (36.31%), K5b (50.00%), K6/L7 (56.16%), L1a (60.00%), L1d (60.00%), L1e (55.66%),

L1f (55.66%), L4d (55.66%)

1

Non-operated: E16a (16.92%), E17a/E17b (14.10%), J3b/J6 (25.00%), K9ab-A (22.46%), Q16a (6.49%)

(c)

Russia

991

Non-operated: Kharyaga (20.00%), Termokarstovoye (49.00%) , several fields through the participation

in Novatek (18.90%)

1

United Kingdom

962

Operated: Alwyn North (100.00%), Dunbar (100.00%), Ellon (100.00%), Forvie North (100.00%), Grant (100.00%),

Jura (100.00%), Nuggets (100.00%), Elgin-Franklin (46.17%), West Franklin (46.17%), Glenelg (58.73%), Islay (94.49%) ,

(b)

1

Laggan Tormore (60.00%)

Non-operated: Bruce (43.25%), Markham unitized field (7.35%), Keith (25.00%)

Africa

excl. North Africa)

(

Angola

953

Operated: Girassol, Jasmim, Rosa, Dalia, Pazflor, CLOV (Block 17) (40.00%)

Non-operated: Cabinda Block 0 (10.00%), Kuito, BBLT, Tombua-Landana (Block 14) (20.00%)⁽^d⁾,

Lianzi (Block 14K) (10.00%)⁽^d⁾, Angola LNG (13.60%)

1

Gabon

928

Operated: Anguille Marine (100.00%), Anguille Nord Est (100.00%), Atora (40.00%), Avocette (57.50%), Baliste (50.00%),

Barbier (100.00%), Baudroie Marine (50.00%), Baudroie Nord Marine (50.00%), Coucal (57.50%), Girelle (100.00%),

Gonelle (100.00%), Grand Anguille Marine (100.00%), Grondin (100.00%), Hylia Marine (75.00%), Lopez Nord (100.00%),

Mandaros (100.00%), M’Boukou (57.50%), Mérou Sardine Sud (50.00%), N’Tchengue (100.00%), Port Gentil Océan

1

(100.00%), Torpille (100.00%), Torpille Nord Est (100.00%)

Non operated: Rabi Kounga (47.50%)

Nigeria

962

Operated: OML 58 (40.00%), OML 99 Amenam-Kpono (30.40%), OML 100 (40.00%), OML 102 (40.00%),

OML 130 (24.00%)

1

Non-operated: OML 102 – Ekanga (40.00%), Shell Petroleum Development Company (SPDC 10.00%),

OML 118 – Bonga (12.50%), OML 138 (20.00%)

The Republic

of the Congo

Operated: Kombi-Likalala-Libondo (65.00%), Moho Bilondo (including Moho phase 1b) (53.50%), Nkossa (53.50%),

Nsoko (53.50%), Sendji (55.25%), Tchendo (65.00%), Tchibeli-Litanzi-Loussima (65.00%), Tchibouela (65.00%),

Yanga (55.25%)

1968

Non-operated: Lianzi (26.75%), Loango (42.50%), Zatchi (29.75%)

(

a) The Group’s interest in the local entity is approximately 100% in all cases except for Total Gabon (58.28%), Total E&P Congo (85%) and certain entities in Abu Dhabi and Oman (see notes b

through k below).

(b) The field of Islay extends partially in Norway. Total E&P UK holds a 94.49% stake and Total E&P Norge 5.51%.

(c) TOTAL’s interest in the joint venture ZAO Terneftegas with Novatek (51.00%).

(d) Stake in the company Angola Block 14 BV (TOTAL 50.01%).

Operated (Group share in %).

Non-operated (Group share in %).

Registration Document 2016. TOTAL

15

Business overview

2

Upstream segment

Middle East

and North Africa

Algeria

Non-operated: Tin Fouyé Tabankort (35.00%)

Operated: Abu Al Bukhoosh (75.00%)

1

952

U.A.E.

939

Iraq

(e)

1

Non-operated: ADCO (10.00%), Abu Dhabi offshore (13.33%) , GASCO (15.00%), ADGAS (5.00%)

Non-operated: Halfaya (22.5%)⁽^f⁾

1920

Libya

Non-operated: zones 15, 16 & 32 (75.00%)⁽^g⁾, zone 129 & 130 (30.00%)⁽^g⁾

1

959

Oman

937

Qatar

936

(

h)

(i)

Non-operated: various onshore fields (Block 6) (4.00%) , Mukhaizna field (Block 53) (2.00%)

Operated: Al Khalij (40.00%)

1

Non-operated: North Field-Block NF Dolphin (24.50%), North Field-Qatargas 1 Downstream (10.00%),

North Field-Qatargas 1 Upstream (20.00%), North Field-Qatargas 2 Train 5 (16.70%)

Yemen

987

Non-operated: Various onshore fields (Block 5) (15.00%)

1

Americas

Argentina

Operated: Aguada Pichana (27.27%), Aguada San Roque (24.71%), Rincon La Ceniza (45.00%), Aries (37.50%),

Cañadon Alfa Complex (37.50%), Carina (37.50%), Hidra (37.50%), Kaus (37.50%), Vega Pleyade (37.50%),

La Escalonada (45.00%)

1978

Non-operated: Rincón de Aranda (45.00%), Sierra Chata (2.51%)

Bolivia

995

Operated: Incahuasi (50.00%)

Non-operated: San Alberto (15.00%), San Antonio (15.00%), Itaú (41.00%)

1

Canada

999

Non-operated: Surmont (50.00%)

1

United States

957

Operated: several assets in the Barnett Shale area (100.00%)

Non-operated: several assets in the Utica Shale area (25.00%) , Chinook (33.33%), Tahiti (17.00%)

(j)

1

Venezuela

980

Non-operated: PetroCedeño (30.32%), Yucal Placer (69.50%)

1

Asia-Pacific

Australia

Non-operated: several fields in UJV GLNG (27.50%)⁽^k⁾

Operated: Maharaja Lela Jamalulalam (37.50%)

Non-operated: South Sulige (49.00%)

2

005

Brunei

986

China

006

Indonesia

968

1

2

Operated: Bekapai (50.00%), Handil (50.00%), Peciko (50.00%), Sisi-Nubi (47.90%), South Mahakam (50.00%),

Tambora (50.00%), Tunu (50.00%)

1

Non-operated: Badak (1.05%), Nilam-gas and condensates (9.29%), Nilam-oil (10.58%),

Ruby-gas and condensates (15.00%)

Myanmar

992

Operated: Blocks M5/M6 (Yadana, Sein) (31.24%)

1

Thailand

990

Non-operated: Bongkot (33.33%)

1

(

e) Via Abu Dhabi Marine Areas Limited (equity affiliate), TOTAL holds a 13.33% stake in the Abu Dhabi Marine Areas (ADMA) concession operated by ADMA-OPCO.

f) TOTAL’s interest in the joint venture.

g) TOTAL’s stake in the foreign consortium.

h) TOTAL’s indirect interest (4.00%) in the concession, via its 10% interest in Private Oil Holdings Oman Ltd. TOTAL also has a direct interest (5.54%) in the Oman LNG facility (trains 1 and

2), and an indirect participation (2.04%) through OLNG in Qalhat LNG (train 3).

(

i) TOTAL’s direct interest in Block 53.

j) TOTAL’s interest in the joint venture with Chesapeake.

k) TOTAL’s interest in the unincorporated joint venture.

Operated (Group share in %).

Non-operated (Group share in %).

16

TOTAL. Registration Document 2016

Business overview

Upstream segment

2

.1.1.8. Main activities by geographical zone

– In the Sleipner area, the development of the Gina Krog field located

in the north of Sleipner and approved in 2013 is underway.

In December 2016, the Group sold a stake of 15% in this field,

reducing its participation from 30% to 15%.

The information below describes the Group’s main exploration and

production activities presented by geographical zones according to the

internal business units⁽¹⁾of the Group, without detailing all of the assets

held by TOTAL. In each area, the countries are presented in decreasing

order of production. The capacities referred to herein are expressed on

a 100% basis, regardless of the Group’s stake in the asset.

–

In the Greater Hild area, the development of the Martin Linge field

51%, operator, estimated capacity 80 kboe/d) is underway.

(

–

In the Barents Sea, the Group holds an 18.4% stake in the gas

liquefaction plant of Snøhvit (capacity of 4.2 Mt/y). This plant is

supplied with production from the Snøhvit and Albatross gas fields.

Europe and Central Asia

In the United Kingdom, the Group’s production was 158 kboe/d

in 2016 compared to 107 kboe/d in 2015 and 89 kboe/d in 2014.

More than 90% of this production comes from operated fields in

the three main areas described below.

In 2016, TOTAL’s production in the zone of Europe and Central

Asia was 757 kboe/d, representing 31% of the Group’s total

production, compared to 664 kboe/d in 2015 and 613 kboe/d

in 2014. The two main producing countries in this zone in 2016

were Russia and Norway.

– In the Alwyn/Dunbar area (100%) in the Northern North Sea,

production from the Alwyn and Dunbar fields represents 25%

and 18% of production, respectively, of this area. The rest of the

production comes from satellites, which are:

In Russia, where the largest percentage of TOTAL’s proved reserves

are located (nearly 21% as of December 31, 2016), the Group’s

production was 335 kboe/d in 2016, compared to 290 kboe/d in

1

) linked to Alwyn by subsea tieback: the Forvie gas and

condensates field joined by the Jura and Islay fields and the

Nuggets gas field network; and

2015 and 235 kboe/d in 2014. This production comes from the

Kharyaga and Termokarstovoye fields and TOTAL’s stake in PAO

Novatek⁽²⁾. Since 2015, Russia has been the leading contributor to

the Group’s production.

2) linked to Dunbar: the Ellon (oil and gas) and the Grant (gas and

condensates) fields.

In addition to the shareholding in Novatek, TOTAL currently

participates in the Yamal LNG and Termokarstovoye projects with

Novatek via a direct stake:

On the Dunbar field (100%), the additional development phase

(Dunbar phase IV) was stopped in 2016 for technical and

economic reasons.

–

In the Elgin/Franklin area in the Central Graben, TOTAL holds

stakes in the Elgin-Franklin and West Franklin fields (46.17%,

operator). Concerning the Elgin redevelopment project (drilling of

five wells), two wells were drilled in 2016. The West Franklin

Phase II project, comprising the addition of two platforms and

the drilling of three wells, was completed in 2016 when the last

well was drilled.

–

Yamal LNG: in 2013, the company OAO Yamal LNG⁽³⁾launched

this project aimed at developing the onshore field of South

Tambey (gas and condensates) located on the Yamal peninsula,

and at building a three-train gas liquefaction plant with total LNG

capacity of 16.5 Mt/y. The Yamal LNG project’s financing was

finalized in 2016 in compliance with applicable regulations.

At year-end 2016, 75% of the project was completed and over

In the West of Shetland area, the Laggan and Tormore fields

96% of the LNG volumes have been sold through long-term sale

(60%, operator) came into production in 2016. Production is

agreements. Production is expected to start by year-end 2017.

Termokarstovoye (an onshore gas and condensates field, located

in the Yamalo-Nenets region): the development and production

license of Termokarstovoye field is held by ZAO Terneftegas, a

joint venture between Novatek (51%) and TOTAL (49%). The field

came into production in 2015 (capacity of 65 kboe/d).

expected to start on the Edradour and Glenlivet fields (60%,

operator) in 2017 (total production capacity of 90 kboe/d).

TOTAL also operates the P967 license, including the Tobermory

gas discovery (30%).

–

Impairments on gas assets in the United Kingdom were recognized

in the 2015 and 2016 Consolidated Financial Statements.

In August 2016, TOTAL sold a 20% interest in the Kharyaga field

thus reducing its stake to 20%) and transferred operatorship of the

(

In addition, TOTAL holds five shale gas exploration and production

licenses (PEDL 139 and 140, 40%; PEDL 273, 305 and 316, 50%)

located in the Gainsborough Trough basin (East Midlands region).

field to the purchaser, Zarubezhneft.

Since 2014, certain Russian persons and entities, including various

entities operating in the energy sector, are subject to international

economic sanctions adopted, in particular, by the United States,

the European Union. TOTAL complies with sanctions applicable to

its activities. For further information, refer to point 1.9 of chapter 4

The sale of interests held by Total E&P UK in transport pipelines

(FUKA and SIRGE) and the St. Fergus terminal was finalized in

March 2016.

In the Netherlands, the Group’s production was 25 kboe/d in 2016

compared to 28 kboe/d in 2015 and 31 kboe/d in 2014. This decrease

was due to natural field decline. TOTAL holds interests in 24 offshore

production licenses, including 20 that it operates, and an offshore

exploration license (K1c, 30%).

(Risk factors).

In Norway, TOTAL has equity stakes in 93 production licenses on

the Norwegian maritime continental shelf, 35 of which it operates.

The Group’s production in 2016 was 235 kboe/d compared to

239 kboe/d in 2015 and 242 kboe/d in 2014.

–

In the Greater Ekofisk area, the Group holds a 39.9% stake in the

Ekofisk and Eldfisk fields. Production at Ekofisk South started in

2013 and at Eldfisk II in 2015 (capacity of 70 kboe/d each).

(

1) The geographical zones are as follows: Europe and Central Asia; Africa (excluding North Africa); Middle East and North Africa; Americas; and Asia-Pacific. The information presented relating to 2015

and 2014 production has been restated accordingly.

2) A Russian company listed on stock exchanges in the Moscow and London stock exchanges and in which the Group held an interest of 18.9% as of December 31, 2016.

3) OAO Yamal LNG is held by PAO Novatek (50.1%), Total E&P Yamal (20%), CNODC (20%), a subsidiary of China National Petroleum Corporation, and Silk Road Fund (9.9%).

(

Registration Document 2016. TOTAL

17

Business overview

2

Upstream segment

In Kazakhstan, TOTAL holds a stake in the North Caspian license

TOTAL operates 5 of the 35 oil mining leases (OML) in which it has

interests and also holds interests in 3 oil prospecting licenses (OPL).

(

16.81%), which covers the Kashagan field. Production of the first

phase of the Kashagan field and the associated processing plant

capacity of 370 kb/d) restarted in October 2016 after pipeline

TOTAL has offshore operations (production was 160 kboe/d in

(

2016) notably on the following leases:

problems had taken it off stream for three years. Replacement of

the pipelines by the operator was completed in the summer of 2016.

The Group’s production was 4 kboe/d in 2016 and is expected to

gradually increase between now and the end of 2017. In July 2016,

TOTAL withdrew from the Nurmunaï North and South onshore

exploration licenses (51.1%, operator) located in the southwest of

the country, due to negative results from the two exploration wells

drilled in 2015.

– On OML 139 (18%), the Owowo-3 exploration well, drilled

in 2016, confirmed the discovery of oil made in 2012 and should

enable progress in the preparation of the development plan.

The discovery is located near OML 138 (20%), where three oil

discoveries were made in 2014 and 2015.

– OML 130 (24%, operator): the development of the Egina field

(200 kboe/d capacity) launched in 2013 is underway, and

production is expected to start in 2018. The assessment of the

Preowei field is planned in 2017.

In Italy, TOTAL holds stakes in the Tempa Rossa field (50%, operator),

located on the Gorgoglione concession (Basilicate region), and

three exploration licenses. The Tempa Rossa development project

is underway, with production expected to start at the end of 2017.

–

On OML 102 (40%, operator), in 2014 TOTAL stopped routine

flaring on the Ofon field (Ofon phase 2 project). The gas

associated with the production of oil is now compressed and

sent onshore to the Nigeria LNG plant. All activities of the Ofon 2

project were completed in 2016 and the drilling of 24 additional

wells, started in 2015, continues.

In Azerbaijan, TOTAL signed an agreement in November 2016

establishing the contractual and commercial conditions for a first

phase of production of the Absheron gas and condensate field

located in the Caspian Sea and discovered by TOTAL in 2011

– On OML 99 (40%, operator), studies are ongoing for the

development of the Ikike field.

(40%, operator). The agreement enabled to define a cost-competitive

development scheme by tying the field to existing infrastructure in

order to deliver gas at a competitive price. The capacity production

from this high pressure field is expected to be approximately 35 kboe/d.

The produced gas will supply Azerbaijan’s domestic market.

– On OML 118 (12.5%), the Bonga field contributed 19 kboe/d to

the Group’s production in 2016. Optimization studies of the

Bonga South West Aparo project (10% unitized) are ongoing

with an investment decision target in 2018.

In France, the Group’s production ended in 2014 with the sale of

the Lacq concessions to Geopetrol. Total E&P France remains the

owner of parts of the Lacq industrial site, located in the southwest

of France, and is carrying out decommissioning, dismantling and

site rehabilitation activities.

TOTAL has onshore operations (production was 83 kboe/d in 2016),

notably:

–

On OML 58 (40%, operator), under its joint venture with Nigerian

National Petroleum Corporation (NNPC), a gas production

capacity of 550 Mcf/d was reached and delivery of gas to the

Nigerian domestic market started in 2016.

In Bulgaria, where TOTAL has been present since 2012, the Group

drilled a deep offshore exploration well in 2016 on the Han Asparuh

block (14,220 km²), 100 km offshore in the Black Sea, which revealed

the presence of oil in this area for the first time.

– In relation to the SPDC joint venture (10%), which includes 20 oil

mining leases (of which 17 are located onshore), the 2016

production was 46 kboe/d (of which 43 kboe/d was onshore).

TOTAL sold its 10% interest in OML 24 (in 2014) and OMLs 18

and 29 (in 2015), operated via the SPDC joint venture. In addition,

the sale process of OML 25 is underway.

In Denmark, TOTAL relinquished the two shale gas exploration

licenses (80%, operator) it acquired in 2010, in July 2015 for the

license 2/10 (Nordsjaelland) and in June 2016 for the license 1/10

(

Nordjylland).

TOTAL is also developing LNG activities with a 15% stake in the

Nigeria LNG Ltd company, which owns a liquefaction plant with a

Rest of the Europe and Central Asia area

TOTAL also holds interests in an exploration license without activity

in Tajikistan.

22 Mt/year total capacity. Assessments are ongoing for the

installation of an additional capacity of approximately 8.5 Mt/year.

In Angola, where TOTAL is the leading oil operator in the country⁽¹⁾

,

Africa

the Group’s production was 243 kboe/d in 2016, compared to

2

48 kboe/d in 2015 and 200 kboe/d in 2014. This production

In 2016, TOTAL’s production in the zone of Africa (excluding

North Africa) was 634 kboe/d, representing 26% of the Group’s

total production, compared to 639 kboe/d in 2015 and 610 kboe/d

comes from Blocks 17, 14 and 0, and Angola LNG.

– Deep offshore Block 17 (40%, operator), TOTAL’s main asset in

Angola, is composed of four major producing hubs: Girassol, Dalia,

Pazflor and CLOV. TOTAL continued to invest in brown field

2014. The two main producing countries in this zone in 2016

were Nigeria and Angola.

projects in 2016, including in particular Dalia Phase 2A and Girassol

M14, which are expected to start production in 2017. In 2015,

Dalia Phase 1A went into production and the start of multiphase

pumps enabled production to be increased at Girassol. The Zinia

phase 2 project, a satellite development of Pazflor, is moving forward.

On the ultra-deep offshore Block 32 (30%, operator), the Kaombo

project was launched in 2014 to develop the discoveries in the

southeast part of the block via two FPSOs (floating production

storage and offloading facilities) with a capacity of 115 kb/d

In Nigeria, the Group’s production, primarily offshore, was 243 kboe/d

in 2016, compared to 245 kboe/d in 2015 and 257 kboe/d in 2014.

This drop in production was due mainly to the sale of interests in

certain licenses of the Shell Petroleum Development Company

(SPDC) joint venture as well as to difficult operational security

–

conditions in the Niger delta that had a negative impact on onshore

production and, in particular, the oil export of the Forcados terminal

operated by Shell.

(1) Company data.

18

TOTAL. Registration Document 2016

Business overview

Upstream segment

2

each. The drilling campaign of 59 wells began in 2015. In

June 2016, a presidential decree was published providing new

tax conditions for the project. The center and north parts of the

block (outside Kaombo) offer additional exploration potential and

are currently being assessed.

On Block 14 (20%)⁽¹⁾, production comes from the Tombua-

Landana and Kuito fields as well as the BBLT project, comprising

the Benguela, Belize, Lobito and Tomboco fields.

Block 14K (36.75%) is the offshore unitization area between

Angola (Block 14) and the Republic of the Congo (Haute Mer

license). The Lianzi field, which is connected to the existing BBLT

platform (Block 14), started production in 2015. TOTAL’s interest

in the unitized zone is held 10% through Angola Block 14 BV and

transfer of operatorship in various mature assets. The transaction is

subject to approval by the authorities.

In Uganda, a growth area for the Group TOTAL has been present

in the upstream since 2012, and has a 33.33% stake in the licenses

EA-1, EA-1A (Lyec), EA-2 (Bulisa and Kaiso Tonya area) and EA-3

–

(Kingfisher) all located in the Lake Albert region. TOTAL is the

operator of licenses EA-1 and EA-1A. In January 2017, TOTAL

signed an agreement to acquire 21.57% of the 33.33% interest

held by Tullow in the licenses EA-1, EA-1A, EA-2 and EA-3. TOTAL

will take over operatorship from Tullow of license EA-2, enabling

significant efficiency gains and synergies. This agreement remains

subject to the approvals of the Ugandan authorities and the pre-

emption rights of the partners.

26.75% through Total E&P Congo.

–

On Block 0 (10%), the second phase of the Mafumeira field

development project started production in March 2017.

In April 2016, the Government of Uganda decided to export the

Lake Albert oil through a pipeline (EACOP) via Tanzania to the port

of Tanga. In August 2016, the production licenses for EA-1 and

EA-2 were formally granted. The partners of the Uganda Joint

Venture have launched the FEED (Front End Engineering and

Design) phase for the Upstream and the EACOP pipeline.

TOTAL is also developing its LNG activities through the Angola LNG

project (13.6%), which includes a gas liquefaction plant near Soyo

supplied by gas associated with production from Blocks 0, 14, 15,

1

7 and 18. LNG production started in 2013, but various technical

incidents required an extended shutdown of the plant. LNG

production restarted in May 2016. Taking into account the revised

gas price assumptions, an impairment on Angola LNG was

recognized in the 2016 Consolidated Financial Statements.

Rest of the zone of Africa

TOTAL also holds interests in exploration licenses in South Africa,

Côte d’Ivoire, Kenya, Mauritania, Mozambique and the Democratic

Republic of the Congo, and is negotiating with the authorities with a

view to resuming exploration activities in the Republic of South

Sudan. In July 2016, TOTAL withdrew from the Bemolanga license

in Madagascar.

In the Bas-Congo basin, TOTAL is also the operator of exploration

Block 17/06 (30%).

In the deep offshore Kwanza basin, TOTAL is the operator of

Blocks 25 (35%) and 40 (40%).The Block 39 license (7.5%) expired

at the end of December 2016.

Middle East and North Africa

In 2016, TOTAL’s production in the zone of the Middle East and

North Africa was 517 kboe/d, representing 21% of the Group’s

total production, compared to 531 kboe/d in 2015 and 438 kboe/d

in 2014. The two main producing countries in this zone in 2016

were the United Arab Emirates and Qatar.

In the Republic of the Congo, the Group’s production, through its

subsidiary Total E&P Congo⁽²⁾, was 90 kboe/d in 2016, compared

to 87 kboe/d in 2015 and 95 kboe/d in 2014.

–

On the offshore field Moho Bilondo (53.5%, operator), the Phase

b project (estimated capacity of 40 kboe/d) started production

1

In the United Arab Emirates, the Group’s production was 291 kboe/d

in 2016 compared to 287 kboe/d in 2015 and 127 kboe/d in 2014.

The Group holds, since January 1, 2015, a 10% stake in the Abu

Dhabi Company for Onshore Petroleum Operations Ltd. (ADCO)

concession for a period of 40 years, which follows a previous onshore

concession. This concession covers the 15 main onshore fields of

Abu Dhabi and represents more than half of the Emirate’s production.

in 2015. The Moho Nord project (estimated capacity of 100 kboe/d)

started production in March 2017.

–

Block 14K (36.75%) corresponds to the offshore unitization area

between the Republic of the Congo (Haute Mer license) and

Angola (Block 14 located in Angola). The Lianzi field started

production in 2015. TOTAL’s interests in the unitization area are

held 26.75% by Total E&P Congo and 10% by Angola Block 14 BV.

Total E&P Congo is operator of Djéno (63%) the sole oil terminal

in the country.

On December 31, 2016, Total E&P Congo returned its interests

in the Tchibouela, Tchendo, Tchibeli and Litanzi fields (65%) to

the Republic of the Congo, as the licenses have expired.

TOTAL holds a 75% stake (operator) in the Abu Al Bukhoosh field

and a 13.3% stake in the Abu Dhabi Marine (ADMA) concession,

which operates two of the main offshore fields in Abu Dhabi (Umm

Shaif and Lower Zakum). TOTAL also holds a 15% stake in Abu

Dhabi Gas Industries (GASCO), which produces NGL and

condensates from the associated gas produced by ADCO. In addition,

TOTAL holds 5% of the Abu Dhabi Gas Liquefaction Company

(ADGAS), which processes the associated gas produced by ADMA

in order to produce LNG, NGL and condensates, and 5% of

National Gas Shipping Company (NGSCO), which owns eight LNG

tankers and exports the LNG produced by ADGAS.

–

In Gabon, the Group’s production was 58 kboe/d in 2016 compared

to 59 kboe/d in 2015 and 58 kboe/d in 2014. The Group’s activities

(3)

in Gabon are primarily carried out by Total Gabon . TOTAL wholly

owns and operates the Anguille and Torpille sector offshore fields,

the Mandji Island sector onshore fields and the Cap Lopez oil

terminal. TOTAL is also the operator of the Baudroie-Mérou

offshore fields (50%) and the Diaba deep offshore license (42.5%),

where the Diaman gas discovery was made in 2013. In February

TOTAL holds a 24.5% stake in Dolphin Energy Ltd. in partnership

with Mubadala, a company owned by the government of Abu Dhabi,

that markets to the United Arab Emirates gas coming from Qatar.

In October 2016, a long-term gas sale and purchase agreement

2017, TOTAL signed an agreement for the sale of stakes and the

(

1) Stake held by the company Angola Block 14 BV (TOTAL 50.01%).

2) Total E&P Congo is owned by TOTAL (85%) and Qatar Petroleum (15%).

3) Total Gabon is a company under Gabonese law, the shares of which are listed on Euronext Paris and owned by TOTAL (58.28%), the Republic of Gabon (25%) and the public (16.72%).

Registration Document 2016. TOTAL

19

Business overview

2

Upstream segment

was signed with Qatar Petroleum for the supply of an additional

phase 3 of the project (to increase production to 400 kb/d) was the

subject of additional studies. In Iraqi Kurdistan, TOTAL relinquished

four exploration blocks that expired in 2016. An impairment on the

assets in Iraqi Kurdistan was recognized in the 2016 Consolidated

Financial Statements.

0

.3 Bcf/d of gas coming from Qatar to be sold domestically.

The Group also owns 33.33% of Ruwais Fertilizer Industries

FERTIL), which produces urea (production capacity of 2 Mt/year).

(

In Qatar, the Group’s production was 134 kboe/d in 2016 and

in 2015, compared to 132 kboe/d in 2014.

In Libya, where security conditions remain unstable, the Group’s

production was 14 kboe/d in 2016 and in 2015, compared to

27 kboe/d in 2014. This production comes from blocks located on

offshore areas 15, 16 and 32 (Al Jurf, 75%⁽⁴⁾), which have not been

affected by security issues. Since the fourth quarter of 2014,

production as well as exploration activities have been stopped

on Mabruk – onshore areas 70 and 87 (75%⁽⁴⁾) – and on the fields

of El Sharara – onshore area 130 and 131 (24%⁽⁴⁾). The production

on the fields of El Sharara – onshore area 129 and 130 (30%⁽⁴⁾) –

resumed at the end of December 2016. Taking into account the

uncertain context in Libya, an impairment on the onshore assets

was recognized in the 2015 Consolidated Financial Statements.

In June 2016, TOTAL signed an agreement granting it a 30% stake

in the Al-Shaheen offshore oil field concession for a period of 25

years beginning July 14, 2017. The Al-Shaheen field has been

producing since 1994 and lies offshore 80 km north of Ras Laffan.

Production, which represents approximately half of Qatar’s oil

production⁽¹⁾, is provided by 30 platforms and 300 wells. As of

July 2017, the Al-Shaheen field will be operated by a new operating

company, North Oil Company, held by TOTAL (30%) and Qatar

Petroleum (70%).

TOTAL operates the Al Khalij field (40%, operator) and participates

in the production, processing and exporting of gas from the North

Field through its stakes in the Qatargas 1 and Qatargas 2 LNG

plants and in Dolphin Energy:

In Yemen, the Group had no production in 2016, compared to

17 kboe/d in 2015 and 84 kboe/d in 2014. Due to the security

conditions in the vicinity of Balhaf, Yemen LNG, in which the Group

holds a stake of 39.62%, stopped its commercial production and

export of LNG in April 2015, when Yemen LNG declared force majeure

to its various stakeholders. The plant is in a preservation mode.

–

Qatargas 1: TOTAL holds a 20% stake in the upstream block of

Qatargas 1 supplying the three LNG trains of Qatargas 1

(capacity of 10 Mt/y), in which the Group has a 10% interest.

–

Qatargas 2: the Group holds a 16.7% stake in train 5, which has

an LNG production capacity of 8 Mt/y. TOTAL offtakes part of the

LNG produced under the 2006 contracts that provide for the

purchase of 5.2 Mt/y of LNG by the Group.

Dolphin Energy (24.5%): the contract signed in 2001 with Qatar

Petroleum provides for the production and sale of gas and liquids

from the Dolphin block located on the North Field. Raw gas is

processed at the Dolphin plant in Ras Laffan, where the liquids

are extracted. This gas is then routed to the United Arab

Emirates by a 360 km gas pipeline in order to be sold (contract

of 2 Bcf/d over a 25-year period).

TOTAL is a partner in Block 5 (Marib basin, Jannah license, 15%)

and holds various stakes in four onshore exploration licenses.

In Iran, TOTAL signed a heads of agreement in November 2016

to develop phase 11 of the giant South Pars gas field (expected

production capacity of 370 kboe/d), pursuant to which TOTAL is

expected to operate South Pars 11 with a 50.1% interest alongside

Petropars (19.9%), a wholly-owned subsidiary of the National

Iranian Oil Company (“NIOC”), and the Chinese state-owned

company CNPC (30%). The produced gas is expected to supply

the Iranian domestic market. Two development phases are

planned: the first for the construction of two platforms, 30 wells

and two connecting lines to existing onshore treatment facilities,

and the second for the installation of offshore compression facilities.

This project fits with TOTAL’s strategy of expanding its presence in

the Middle East and growing its gas portfolio by adding a low unit

cost, long plateau gas asset. For further information on the

international sanctions concerning Iran, refer to point 1.9

of chapter 4 (Risk factors).

–

In Oman, the Group’s production was 37 kboe/d in 2016,

compared to 36 kboe/d in 2015 and 2014. TOTAL participates in

the production of oil principally in Block 6 (4%)⁽²⁾, but also in Block

5

3 (2%). The Group also produces LNG through its investments in

the Oman LNG (5.54%)/Qalhat LNG (2.04%)⁽liquefaction

3)

complex, with an overall capacity of 10.5 Mt/y.

In Algeria, TOTAL’s production was 23 kboe/d in 2016 compared

to 25 kboe/d in 2015 and 20 kboe/d in 2014. All of the Group’s

production in Algeria comes from the Tin Fouyé Tabankort (TFT)

field (35%). In addition, the development of the Timimoun gas field

In Syria, TOTAL has had no production and no activity since

December 2011. The Group has a 100% stake in the Deir Ez Zor

license, which was operated by the joint venture company DEZPC, in

which TOTAL and the state-owned company SPC each have a 50%

share. Additionally, TOTAL is holder of the Tabiyeh contract which came

into effect in 2009. For further information on the international sanctions

concerning Syria, refer to point 1.9 of chapter 4 (Risk factors).

(37.75%) continued in 2016 with engineering activities, activities

related to the construction of the plant and drilling.

In Iraq, the Group’s production was 18 kboe/d in 2016, stable

compared to 2015, and 12 kboe/d in 2014. TOTAL holds a 22.5%

stake in the development and production contract for the Halfaya

field, located in Missan province. In 2016, the development of

Rest of the zone of the Middle East and North Africa

TOTAL also holds interests in exploration licenses in Cyprus and Egypt.

(

1) Company data.

2) TOTAL holds an indirect 4% stake in Petroleum Development Oman LLC, operator of Block 6, via its 10% stake in Private Oil Holdings Oman Ltd.

3) TOTAL’s indirect stake via Oman LNG’s stake in Qalhat LNG.

4) TOTAL’s stake in the foreign consortium.

20

TOTAL. Registration Document 2016

Business overview

Upstream segment

2

Americas

and 86 in 2014), as well as the debottlenecking project for the

water separation and treatment facilities.

In 2016, TOTAL’s production in the zone of the Americas was

2

79 kboe/d, representing 11% of the Group’s total production,

In Bolivia, the Group’s production, mainly gas, was 34 kboe/d in

2016, compared to 28 kboe/d in 2015 and 30 kboe/d in 2014.

TOTAL is active on seven licenses: three production licenses at San

Alberto (15%), San Antonio (15%) and Block XX Tarija Oeste (41%);

compared to 255 kboe/d in 2015 and 247 kboe/d in 2014.

The two main producing countries in this zone in 2016 were

the United States and Argentina.

two licenses in development phase, Aquio and Ipati (50%⁽²⁾

,

In the United States, the Group’s production was 86 kboe/d in

operator); and two exploration phase licenses, Rio Hondo (50%)

and Azero (50%, operator of the exploration phase).

2016, compared to 89 kboe/d in 2015 and 78 kboe/d in 2014.

Following the exercise of its preemption right, TOTAL acquired in

November 2016 the 75% stake held by Chesapeake in the Barnett

shale gas assets area located in North Texas, in which the Group

had already a 25% interest since 2009. This transaction provides

for the restructuring of the gas gathering and transportation contracts

with respect to the acquired stake. The planned work relates to well

intervention and well restarts. No wells were drilled in 2016 compared

to 4 in 2015 and 40 in 2014.

–

The Incahuasi gas field, located in the Aquio and Ipati Blocks,

started production in August 2016. A second development

phase, which would involve the drilling of three additional wells,

is under consideration.

TOTAL holds a 50% stake in the Azero exploration license

located in the Andean foothills, which extends over an area of

more than 7,800 km². The exploration period began in 2014.

A geophysical data acquisition campaign was started in the fourth

quarter of 2016 and is expected to be followed by the drilling of a

well in 2018.

TOTAL also has a 25% stake in a joint venture operated by Chesapeake

in the Utica basin (on an acreage mainly located in Ohio) that produces

shale gas. TOTAL was not involved in the drilling of any wells in

In Canada, the Group’s production was 34 kboe/d in 2016

compared to 14 kboe/d in 2015 and 12 kboe/d in 2014. The Group’s

activities were not significantly affected by the wildfires that struck

Alberta in May and June 2016. The Group’s production comes

entirely from the Surmont (50%) project developed by SAGD⁽³⁾

,

2016 compared to 8 in 2015 and approximately 170 in 2014.

Following successive decreases in gas prices in the United States,

impairments on shale gas assets were recognized in the 2014 and

2015 Consolidated Financial Statements.

the second phase of which was commissioned in 2015. Following

the ramp-up of this phase in 2016 and 2017, the project is expected

to produce a total of approximately 150 kb/d (75 kb/d Group share).

In the Gulf of Mexico, TOTAL holds interests in the deep offshore

fields Tahiti (17%) and Chinook (33.33%). In Tahiti, the Tahiti Vertical

Expansion (TVEX) project was launched in 2016 in order to extend

the production level of the field.

Construction of the Fort Hills oil sands mining project was more

than 80% complete at year-end 2016, and the operator expects

to start production at the end of 2017.

The TOTAL (40%) – Cobalt (60%, operator) alliance, formed in 2009

for exploration in the Gulf of Mexico, continued its work to delineate

the North Platte discovery.

As a result of a full comparative analysis of its global asset portfolio

in the context of lower oil prices, the Group decided in 2015 to

decrease its exposure to Canadian oil sands and reduced its stake

in Fort Hills from 39.2% to 29.2%. An impairment on the part

of the asset sold was recognized in the 2015 Consolidated

Financial Statements.

In Argentina, TOTAL operated approximately 30%⁽¹⁾of the country’s

gas production in 2016. The Group’s production was 78 kboe/d in

2016 compared to 72 kboe/d in 2015 and 75 kboe/d in 2014.

–

In Tierra del Fuego, the Group operates the Carina and Aries

offshore fields (37.5%). The drilling of two additional wells off the

existing platform was completed in 2015. The Vega Pleyade field

On the Joslyn (38.25%, operator) and Northern Lights (50% operator)

licenses, the projects were suspended in 2014 and works have

been strictly limited to legal and contractual obligations, and

maintaining safety.

(37.5%, operator), where development work was launched in

2013 (with a production capacity of 350 Mcf/d), started

production in February 2016.

–

In the Neuquén basin, two pilot projects were launched following

positive initial results of the exploration campaign on its mining

licenses in order to assess its gas and shale oil potential: the first

on the Aguada Pichana Block (27.27%, operator), where

production started mid-2015, and the second on the Rincón la

Ceniza (45.00%, operator) and La Escalonada (45.00%,

operator) Blocks, where production started in July 2016.

An impairment on the oil sands assets was recognized

in the 2014 Consolidated Financial Statements.

In Brazil, a growth area for the Group, TOTAL acquired in 2013 a

20% stake in the Libra field, located in the Santos basin.

The Libra field is located in the ultra-deep offshore (2,000 m)

approximately 170 km off the coast of Rio de Janeiro, and covers

an area of 1,550 km². In 2014, construction started on a 50 kb/d

capacity FPSO for long-term production testing. At year-end 2016,

in addition to the discovery well, eight wells have been drilled in the

field. Development phase 1 (17 wells connected to an FPSO with a

capacity of 150 kb/d) is expected to start in 2017.

In Venezuela, the Group’s production was 47 kboe/d in 2016

compared to 52 kboe/d in 2015 and 2014. TOTAL has stakes in

PetroCedeño (30.32%) and Yucal Placer (69.50%) as well as the

offshore exploration Block 4 of Plataforma Deltana (49%).

Development of the extra heavy oil field of PetroCedeño continues

In addition, the Group holds 17 exploration licenses located in the

Foz do Amazonas, Barreirinhas, Ceará, Espirito Santo and Pelotas

(39 production wells were drilled in 2016 compared to 47 in 2015

(

1) Source: Department of Federal Planning, Public Investment and Services, Energy Secretariat.

2) In 2016, TOTAL reduced its stake in Aquio and Ipati from 60% to 50%.

3) Steam Assisted Gravity Drainage, production by injection of recycled water vapor.

Registration Document 2016. TOTAL

21

Business overview

2

Upstream segment

basins. An initial exploration well is expected to be drilled by year-

end 2017 in the Foz do Amazonas basin.

– On the Sebuku license (15%), production from the Ruby gas field

is routed by pipeline for processing and separation at the

Senipah terminal (operated by TOTAL).

In February 2017, TOTAL and Petrobras signed definitive contracts

in relation to a package of upstream and downstream gas and

electricity assets in Brazil and other international opportunities

contemplated by their strategic alliance agreed in December 2016.

As part of this strategic alliance, TOTAL will hold a 22.5% interest in

the concession area named Iara, located in Block BM-S-11, which

is currently under development, as well as a 35% interest and the

operatorship in the Lapa field concession area, located in Block

BM-S-9. The Lapa field entered into production in December 2016.

Petrobras will have the option of taking a 20% stake in the deep-

water exploration Block 2 (Perdido Belt) recently obtained during

the bid round in Mexico. Finally, technical cooperation between the

two companies will be strongly reinforced, in particular by the joint

assessment of the exploration potential of promising areas in Brazil

and by the development of new technologies, in particular in deep-

water. The deal is subject to regulatory approvals, the potential

exercise of preemptive rights by current partners on the Iara

concession and other conditions precedent.

–

TOTAL also holds stakes in two exploration blocks: Mentawai

80%, operator) and Telen (100%).

(

In addition, the Group holds stakes in blocks with no activity

and for which a relinquishment process is underway: South Mandar

(49.3%), South Sageri (100%), South West Bird’s Head (90%,

operator) and South East Mahakam (50%, operator).

In Thailand, the Group’s production was 60 kboe/d in 2016 compared

to 62 kboe/d in 2015 and 60 kboe/d in 2014. This production comes

from the offshore gas and condensate field of Bongkot (33.33%).

PTT (the Thai state-owned company) purchases all of the natural

gas and condensate production. New investments are underway

for maintaining the plateau and responding to gas demand.

In Myanmar, the Group’s production was 21 kboe/d in 2016,

compared to 19 kboe/d in 2015 and 17 kboe/d in 2014.

The Yadana field (31.24%, operator), located on the offshore Blocks

M5 and M6, primarily produces gas for delivery to PTT for use in

Thai power plants. The Yadana field also supplies the domestic

market via an offshore pipeline built and operated by MOGE, a

Myanmar state-owned company. The LCP-Badamyar project,

which includes the installation of the Badamyar field compression

and development platform connected to the Yadana facilities, was

launched in 2014. Drilling at Badamyar began in November 2016.

In Mexico, TOTAL was awarded in December 2016 exploration

licenses on three blocks in offshore Mexico, following the country’s

first competitive deep water bid round resulting from the reform of

the energy sector. Located in the Perdido basin, Block 2 (50%,

operator) covers a surface area of 2,977 km² at water depths

ranging from 2,300 m to 3,600 m. Block 1 (33.3%) and Block 3

(

2

33.3%) are located in the Salina basin and cover a surface area of

,381 km² and 3,287 km², respectively.

In 2014, TOTAL was awarded the deep offshore Block YWB

(100%, operator) during the offshore round launched by the local

Rest of the zone of the Americas

authorities. The PSC was signed in 2015.

TOTAL also owns interests in exploration licenses in Aruba,

Colombia, French Guyana and Uruguay.

In 2015, the Group sold its stake in the offshore Block M11

(47.06%) and entered exploration license A6 (40%) located in the

deep offshore area west of Myanmar. A first well was drilled in 2015

on which a natural gas discovery has been made and which

requires further evaluation work.

Asia-Pacific

In 2016, TOTAL’s production in the zone of Asia-Pacific was

2

65 kboe/d, representing 11% of the Group’s overall production,

In 2016, TOTAL signed farm-in agreements on the deep offshore

licenses MD-02 (40%), MD-04 (40%) and MD-07 (50%).

compared to 258 kboe/d in 2015 and 238 kboe/d in 2014.

The two main producing countries in this zone in 2016 were

Indonesia and Thailand.

In Brunei, TOTAL operates the Maharaja Lela Jamalulalam offshore

gas and condensate field on Block B (37.5%). The Group’s

production was 18 kboe/d in 2016 compared to 15 kboe/d in 2015

and 2014. The gas is delivered to the Brunei LNG liquefaction plant.

Discussions are underway regarding the terms of the unitization of

the northern part of the Maharaja Lela Jamalulalam field with the

Malaysian part of the field.

In Indonesia, the Group’s production was 140 kboe/d in 2016

compared to 147 kboe/d in 2015 and 130 kboe/d in 2014.

TOTAL’s operations in Indonesia are primarily concentrated on the

Mahakam license (50%, operator), which in particular includes the

Peciko and Tunu gas fields. The Group also has a stake in the Sisi-

Nubi gas field (47.9%, operator). The Mahakam license expires in

December 2017. The Indonesian government has decided to

allocate 100% of the participating interest to Pertamina (operator)

from January 1, 2018 onwards, while giving Pertamina the possibility

to farm out some interests to TOTAL and its current partner, INPEX.

The Group delivers most of its natural gas production to the

Bontang LNG plant. These volumes of gas represented more than

On the Maharaja Lela South project, a first debottlenecking phase

for the production processing plant was completed in 2015,

increasing production capacity by 20% (from 165 Mcf/d to 200

Mcf/d). Offshore, the installation of a third platform was completed

at the end of 2015 and the drilling campaign is ongoing. Three wells

started production in 2016.

8

0% of the Bontang plant’s supply in 2016. To this gas production

Studies are currently being conducted to reassess the potential of

the deep offshore exploration Block CA1 (86.9%, operator), which

includes the Jagus East discovery. A well was drilled in 2015, and

has confirmed the connection of the Jagus East field with the

Gumusut-Kakap reservoirs in Malaysia. Discussions regarding the

terms of the unitization of these two reservoirs are underway. They

aim to ensure unified governance of the fields while setting out the

distribution of costs and production between the parties.

was added the operated production of oil and condensates from

the Handil and Bekapai fields.

–

On the Mahakam license, the works aimed at maintaining

production on the Tunu, Peciko, South Mahakam, Sisi-Nubi and

Bekapai fields continued.

22

TOTAL. Registration Document 2016

Business overview

Upstream segment

2

In Australia, where TOTAL has had mining rights since 2005, the

Group’s production was 16 kboe/d in 2016, compared to 4 kboe/d

in 2015 and 2014.

In Papua New Guinea, where TOTAL has been active since 2012,

the Group owns a stake in Block PRL-15 (40.1%, operator since

2015). The State of Papua New Guinea retains the right to take a

stake in the license (when the final investment decision is made) at

a maximum level of 22.5%. In this case, TOTAL’s stake would be

reduced to 31.1%.

–

The Ichthys project (30%) involves the development of a gas and

condensate field located in the Browse Basin. This development

will include a floating platform designed for the production,

processing and export of gas, an FPSO (with condensate

processing capacity of 100 kb/d) to stabilize and export the

condensate, an 889 km gas pipeline and an onshore liquefaction

plant (with 8.9 Mt/y LNG and 1.6 Mt/y LPG capacities) at Darwin.

The LNG has already been sold, mainly to Asian buyers, under

long-term contracts. As per the information provided by the

operator, production is expected to start before the end of 2017.

Gladstone LNG (GLNG) (27.5%) is an integrated gas production,

transportation and liquefaction project with a capacity of 7.8 Mt/y

from the Fairview, Roma, Scotia and Arcadia fields. Train 1

of the plant started production in 2015 and train 2 in May 2016.

An impairment was recognized in the 2015 and 2016 Consolidated

Financial Statements.

Block PRL-15 includes the two discoveries Elk and Antelope,

growth areas for the Group. A delineation program of these

discoveries is underway. The results of the first wells drilled have

confirmed the level of resources in the Elk and Antelope fields.

In 2015, the location of the various production sites was announced

to the authorities. In 2016, work on the development studies

continued and the Group carried out the environmental and societal

baseline studies in the country that are necessary for the granting

of authorization to start production in the fields.

–

In 2016, TOTAL signed an agreement to obtain a 35% stake in

exploration license PPL339, located in Gulf Province.

In 2016, the authorities awarded TOTAL (100%) deep offshore

exploration license PPL576 in the Coral Sea. A multi-client seismic

survey was performed on the block during the fourth quarter of 2016.

In China, where TOTAL has been operating since 2006, the Group’s

production was 10 kboe/d in 2016 compared to 11 kboe/d in 2015

and 12 kboe/d in 2014. This production comes from the South

Sulige Block (49%) in the Ordos Basin of Inner Mongolia, where the

drilling of tight gas development wells is ongoing.

Rest of the zone of Asia-Pacific

TOTAL also holds interests in exploration licenses in Malaysia and

the Philippines. In Cambodia, TOTAL is working to implement an

agreement entered into in 2009 with the Cambodian government

for the exploration of Block 3 located in an area of the Gulf of

Thailand disputed by the governments of Cambodia and Thailand.

This agreement remains conditioned on the establishment by both

countries of an appropriate contractual framework.

Registration Document 2016. TOTAL

23

Business overview

2

Upstream segment

2.1.1.9. Oil and gas acreage

2016

As of December 31,

Undeveloped

acreage⁽^a⁾

Developed

acreage

(in thousands of acres at year-end)

Europe and Central Asia (excl. Russia) Gross

Net

18,416

6,989

719

154

Russia

Gross

Net

3,584

666

503

93

Africa (excl. North Africa)

Middle East and North Africa

Americas

Gross

Net

79,517

46,071

806

200

Gross

Net

37,148

9,991

2,606

371

Gross

Net

24,569

13,155

992

468

Asia-Pacific

Gross

Net

44,242

27,373

738

276

Total

Gross

Net⁽^b⁾

207,476

104,245

6,364

1,562

(

a) Undeveloped acreage includes leases and concessions.

b) Net acreage equals the sum of the Group’s equity stakes in gross acreage.

2.1.1.10. Number of productive wells

2016

Gross

productive

wells

Net

productive

wells⁽^a⁾

As of December 31,

(wells at year-end)

Europe and Central Asia (excl. Russia) Oil

Gas

415

259

106

87

Russia

Oil

Gas

232

489

39

80

Africa (excl. North Africa)

Middle East and North Africa

Americas

Oil

Gas

2,091

96

561

19

Oil

Gas

9,385

161

609

44

Oil

954

322

Gas

3,585

2,230

Asia-Pacific

Oil

124

55

Gas

2,802

976

Total

Oil

Gas

13,201

7,392

1,692

3,436

(a) Net wells equal the sum of the Group’s equity stakes in gross wells.

24

TOTAL. Registration Document 2016

Business overview

Upstream segment

2

2.1.1.11. Number of net productive and dry wells drilled

As of December 31,

2016

2015

2014

(wells at year-end)

Net

productive

wells

Net dry

Net total

wells

Net

Net dry

Net total

wells

Net

Net dry

Net total

wells

productive

wells

productive

wells

drilled⁽

a)(c)

drilled

(a)(c)

wells drilled

(a)(c)

drilled

(a)(c)

wells drilled

(a)(c)

drilled

(a)(c)

drilled⁽

a)(b)

drilled

(a)(b)

drilled

Exploratory

Europe and Central Asia

(

excl. Russia)

1.1

-

0.7

0.8

2.1

1.6

1.0

-

0.8

-

2.1

-

0.7

0.8

2.9

1.6

1.0

-

0.2

0.3

1.4

2.0

4.6

-

2.1

0.5

0.6

0.9

5.6

-

2.3

0.8

2.0

2.9

1.4

-

1.7

0.6

2.1

1.2

0.2

0.3

2.3

1.3

0.3

1.1

1.6

0.3

4.0

1.9

2.4

2.3

Russia

Africa (excl. North Africa)

Middle East and North Africa

Americas

Asia-Pacific

Total

6.3

1.8

8.1

4.9

8.7

13.6

7.0

5.5

12.5

Development

Europe and Central Asia

(

excl. Russia)

13.6

18.7

14.6

49.3

35.4

151.0

0.5

-

1.1

-

14.1

18.7

14.6

50.4

35.4

151.0

15.7

22.9

21.4

36.6

60.6

86.9

0.4

-

0.6

0.1

-

16.1

22.9

21.4

37.2

60.7

86.9

9.0

28.8

24.1

36.6

128.1

106.0

-

0.8

1.0

0.2

0.5

9.0

29.6

25.1

36.8

128.3

106.5

Russia

Africa (excl. North Africa)

Middle East and North Africa

Americas

Asia-Pacific

Total

282.6

288.9

1.6

3.4

284.2

292.3

244.1

249.0

1.1

9.8

245.2

258.8

332.6

339.6

2.7

8.2

335.3

347.8

(

a) Net wells equal the sum of the Company’s fractional interests in gross wells.

b) Includes certain exploratory wells that were abandoned, but which would have been capable of producing oil in sufficient quantities to justify completion.

c) For information: service wells and stratigraphic wells are not reported in this table.

2.1.1.12. Wells in the process of being drilled (including wells temporarily suspended)

As of December 31,

2016

Net⁽^a⁾

(wells at year-end)

Gross

Exploratory

Europe and Central Asia (excl. Russia)

Russia

4

-

0.9

-

Africa (excl. North Africa)

Middle East and North Africa

Americas

18

2

10

5

4.6

0.8

3.5

1.3

Asia-Pacific

Total

39

11.1

Other wells⁽^b⁾

Europe and Central Asia (excl. Russia)

Russia

Africa (excl. North Africa)

Middle East and North Africa

Americas

45

111

72

174

46

11.8

27.9

21.3

25.2

28.0

116.7

Asia-Pacific

421

Total

869

908

230.9

242.0

(a) Net wells equal the sum of the Group’s equity stakes in gross wells. Includes wells for which surface facilities permitting production have not yet been constructed. Such wells are also

reported in the table “Number of net productive and dry wells drilled”, above, for the year in which they were drilled.

(b) Other wells are developments wells, service wells, stratigraphic wells and extension wells.

Registration Document 2016. TOTAL

25

Business overview

2

Upstream segment

2.1.1.13. Interests in pipelines

The table below sets forth interests of the Group’s entities⁽¹⁾in the main oil and gas pipelines as of December 31, 2016.

Pipeline(s)

Origin

Destination

(%) interest Operator Liquids

Gas

Europe and Central Asia

Azerbaijan

BTC

Baku (Azerbaijan)

Ceyhan

5.00

X

(Turkey, Mediterranean)

Norway

Frostpipe (inhibited)

Heimdal to Brae Condensate Line

Kvitebjorn Pipeline

Lille-Frigg, Froy

Heimdal

Kvitebjorn

Ekofisk Treatment center

Oseberg, Brage and Veslefrikk Sture

Oseberg

Brae

Mongstad

Teeside (UK)

36.25

16.76

5.00

34.93

12.98

10.00

3.71

X

Norpipe Oil

Oseberg Transport System

Sleipner East Condensate Pipe

Troll Oil Pipeline I et II

Sleipner East

Troll B et C

Karsto

Vestprosess

(

Mongstad refinery)

Vestprosess

Mongstad refinery)

Vestprosess

Polarled

Kollsnes (Area E)

5.00

5.11

X

(

Asta Hansteen/Linnorm

Nyhamna

X

The Netherlands

Nogat Pipeline

WGT K13-Den Helder

WGT K13-Extension

F3-FB

K13A

Markham

Den Helder

K13 (via K4/K5)

5.00

4.66

23.00

X

United Kingdom

Alwyn Liquid Export Line

Bruce Liquid Export Line

Central Graben Liquid Export Line (LEP) Elgin-Franklin

Frigg System: UK Line

Ninian Pipeline System

Alwyn North

Bruce

Cormorant

Forties (Unity)

ETAP

100.00

43.25

15.89

X

Alwyn North, Bruce and others St. Fergus (Scotland) 100.00

Ninian

Elgin-Franklin, Shearwater

Bacton

X

Sullom Voe

Bacton

Interconnector

16.00

25.73

54.66

X

Shearwater Elgin Area Line (SEAL)

SEAL to Interconnector Link (SILK)

X

Africa (excl. North Africa)

Gabon

100.00⁽

a)

X

Mandji Pipes

Rabi Pipes

Nigeria

Mandji fields

Rabi fields

Cap Lopez Terminal

100.00⁽^a⁾

O.U.R

NOPL

Obite

Rumuji

Owaza

40.00

X

Middle East and North Africa

Qatar

Dolphin

North Field (Qatar)

Taweelah-Fujairah-Al Ain 24.50

United Arab Emirates)

X

(

Americas

Argentina

TGN

TGM

Network (Northern Argentina)

TGN

15.38

32.68

X

Uruguyana (Brazil)

Brazil

TBG

Bolivia-Brazil border

Porto Alegre

via São Paulo

Uruguyana (Brazil)

Canoas

9.67

X

TSB

Argentina-Brazil

border (TGM) Porto Alegre

25.00

Asia-Pacific

Australia

GLNG

Fairview, Roma, Scotia,

Arcadia

GLNG (Curtis Island)

27.50

X

Myanmar

Yadana

Champ de Yadana field

Ban-I Tong (Thai border) 31.24

X

(a) Interest of Total Gabon. The Group has a financial interest of 58.28% in Total Gabon.

(1) Excluding equity affiliates, except for the Yadana and Dolphin pipelines.

26

TOTAL. Registration Document 2016

Business overview

Upstream segment

2

.1.2. Gas

New LNG sources are expected to support the growth of the Group’s

LNG portfolio, including Ichthys LNG (Australia), Yamal LNG⁽³⁾

The activities of TOTAL in the gas business have a primary objective

to contribute to the growth of the Group by ensuring market outlets

for its current and future natural gas production.

(Russia), trains 3 and 5 of Sabine Pass LNG (United States) and

Cameron LNG (United States).

TOTAL has entered into several significant long-term agreements

throughout the world for the sale of LNG from the Group’s global LNG

portfolio, notably in China, Indonesia, Japan, South Korea and Spain.

Beyond the production and liquefaction of natural gas (refer to point

2.1.1 of this chapter), TOTAL actively markets natural gas, which is

sold either by pipeline or in the form of Liquefied Natural Gas (LNG)

and develops a downstream portfolio for its trading and shipping

activities, as well as regasification terminals.

LNG shipping

As part of its LNG transport activities, TOTAL uses two long-term

chartered LNG tankers: since 2006, the Arctic Lady, with a capacity

of 145,000 m³, and since 2011, the Meridian Spirit, with a capacity

of 165,000 m³, primarily for the transport of volumes from Snøhvit

in Norway.

In order to enhance the value of the Group’s gas resources, the

activities of Gas also include the trading and marketing of natural

gas, LNG, Liquefied Petroleum Gas (LPG) and electricity as well as

shipping of LNG and LPG. The Group also has stakes in

infrastructure companies (including regasification terminals, natural

gas transportation and storage, and power plants) necessary to

implement its strategy.

TOTAL continues to develop its fleet. The Group also signed a long-

term charter agreement in 2013 with SK Shipping and Marubeni

for two 180,000 m³ LNG tankers. The vessels will serve to fulfill

the purchase obligations of Total Gas & Power Limited, including

commitments relating to the Ichthys and Sabine Pass projects.

They will be among the largest LNG tankers to navigate the

Panama Canal and are expected to be delivered in 2017 and 2018

respectively.

2.1.2.1. Purchases, sales and shipping of LNG

A pioneer in the LNG industry, TOTAL is today one of the world’s

leading players⁽¹⁾in the sector and has sound and diversified

positions both in the upstream and downstream portions of the

LNG chain. LNG development is a key element of the Group’s

strategy, strengthening its positions in most major production zones

and markets.

2.1.2.2. Trading

In 2016, TOTAL continued its strategy downstream from natural

gas and LNG production by developing its trading, marketing and

logistics activities. The aim of this strategy is to optimize access for

the Group’s current and future production to markets supplied

based on long-term contracts and to markets open to international

competition (with short-term contracts and spot sales). Furthermore,

the Group is developing new LNG markets by promoting LNG

import infrastructure projects such as described in point 2.1.2.4,

below. The Group also has operations in electricity trading and the

marketing of LPG and petcoke. Since 2016, TOTAL has also been

active in the marketing of sulfur. In 2016, the Group stopped its

coal trading activities.

Through its stakes in liquefaction plants located in Qatar, the United

Arab Emirates, Oman, Nigeria, Norway, Yemen, Angola and

Australia and its gas supply agreement with the Bontang plant in

Indonesia, the Group markets LNG in all global markets. In 2016,

the share of LNG production sold by TOTAL was 11 Mt, compared

to 10.2 Mt in 2015 and 12.2 Mt in 2014. The reduction between

2

014 and 2015 was due to force majeure being declared in 2015

for the Yemen LNG⁽joint venture due to the deterioration of

security conditions. The growth of LNG production sold by TOTAL

over the coming years is expected to be ensured by the Group’s

liquefaction projects under construction in Australia and Russia and

by projects currently under consideration, including a new project in

Papua New Guinea and the expansion of the Nigeria LNG plant.

2)

The trading teams are located in London, Houston, Geneva and

Singapore.

In January 2017, TOTAL finalized the acquisition of approximately 23%

of Tellurian Investments Inc. (“Tellurian”), announced in December 2016,

in order to develop an integrated gas project, from the acquisition of gas

produced at a competitive cost in the United States to the delivery

of LNG to international markets from the Driftwood LNG terminal.

Driftwood LNG is in the engineering design and pre-filing phase.

Gas and electricity

TOTAL is pursuing gas and electricity trading operations in Europe

and North America in order to sell the Group’s production, to supply

its marketing subsidiaries and to support other entities of the Group.

In Europe, TOTAL traded 887 Bcf (25.1 Bcm) of natural gas in

Long-term Group LNG purchases and sales

2016, compared to 849 Bcf (24 Bcm) in 2015 and 911 Bcf (25.8 Bcm)

TOTAL acquires long-term LNG volumes mainly from liquefaction

projects in which the Group holds an interest, including Qatargas 2

in 2014. The Group also traded 49.1 TWh of electricity in 2016,

compared to 41.1 TWh in 2015 and 44.8 TWh in 2014, mainly from

external sources.

(

Qatar), Yemen LNG (Yemen), Nigeria LNG (Nigeria) and Snøhvit

Norway). These volumes support the expansion of the Group’s

In North America, TOTAL traded 356 Bcf (10.1 Bcm) of natural gas

in 2016 from its own production or from external resources compared

to 441 Bcf (12.5 Bcm) in 2015 and 593 Bcf (16.8 Bcm) in 2014.

worldwide LNG portfolio.

Since 2009, a growing portion of the long-term volume purchased

by the Group that was initially intended for delivery to North

American and European markets has been diverted to more

buoyant Asian markets.

(

1) Company data, based on upstream and downstream LNG portfolios in 2016.

2) The Yemen LNG plant has been shut down since April 2015. For more information, refer to point 2.1.1.8 of this chapter.

3) OAO Yamal LNG, which is developing the Yamal LNG project, is held by PAO Novatek (50.1%), Total E&P Yamal (20%), CNODC (20%), a subsidiary of China National Petroleum Corporation,

and Silk Road Fund (9.9%). For information on international economic sanctions concerning Russia, refer to point 1.9 of chapter 4.

Registration Document 2016. TOTAL

27

Business overview

2

Upstream segment

LNG

In 2016, the volumes of gas delivered to the industrial and commercial

segments were 4 Bcf (0.1 Bcm) in Belgium (Total Gas & Power

Belgium) and 9 Bcf (0.3 Bcm) in the Netherlands (Total Gas & Power

Nederland B.V.), an increase with respect to previous years, these

two subsidiaries having started marketing gas in 2013.

TOTAL operates LNG trading activities through both spot sales and

long-term contracts such as those described in point 2.1.2.1

above. Significant sales and purchase agreements (SPAs) have

permitted appreciable development of the Group’s activities in LNG

trading, especially in the Asian markets (China, South Korea, India

and Japan). The spot and fixed-term LNG portfolio allows TOTAL to

supply gas to its main customers worldwide, while retaining a

sufficient degree of flexibility to react to market opportunities.

In 2015, the natural gas marketing subsidiaries in France, Germany,

Belgium and the Netherlands extended their activities to the

marketing of electricity to industrial and commercial consumers.

The volumes sold in 2016 are still modest.

In 2016, TOTAL purchased 51 contractual cargoes under long term

contracts (from Qatar, Nigeria and Norway) and 19 spot or medium

term cargoes, compared to, respectively, 64 and 20 in 2015 and 88

and 7 in 2014. Deliveries from Yemen LNG have been interrupted

since April 2015.

As part of its development strategy for its gas and electricity

marketing activities, TOTAL finalized in September 2016 the

acquisition of Lampiris, the third-largest gas and electricity supplier

in Belgium with more than 750,000 metering points. Lampiris is

also active in France, where it markets gas and electricity to the

residential and commercial segments.

LPG

In Spain, TOTAL markets natural gas to the industrial and

commercial segments through Cepsa Gas Comercializadora, in

which it holds a 35% stake. In 2016, the volumes of gas sold

reached 100 Bcf (2.8 Bcm), compared to 105 Bcf (3.0 Bcm) in

2015 and 94 Bcf (2.7 Bcm) in 2014.

In 2016, TOTAL traded nearly 5.3 Mt of LPG (propane and butane)

worldwide, compared to 5.8 Mt in 2015 and 5.5 Mt in 2014. Nearly

28% of these quantities come from fields or refineries operated by

the Group. This trading activity was conducted by means of 9 time-

chartered vessels. In 2016, 323 voyages were necessary for

transporting the negotiated quantities, including 217 journeys

carried out by TOTAL’s time-chartered vessels and 106 journeys by

spot-chartered vessels.

In Argentina, the subsidiary Total Gas Marketing Cono Sur oversees

the marketing of gas on behalf of Total Austral, the Group’s

production subsidiary in Argentina. In 2016, the volumes of gas

sold reached 142 Bcf (4.0 Bcm), compared to 128 Bcf (3.6 Bcm)

in 2015 and 131 Bcf (3.7 Bcm) in 2014.

Petcoke and sulfur

The Group also holds stakes in the marketing companies that are

associated with the LNG regasification terminals located at Altamira

in Mexico and Hazira in India.

TOTAL has been trading petcoke produced since 2011 by the Port

Arthur refinery in the United States. 1.1 Mt of petcoke were sold

on the international market in 2016, compared to 1.1 Mt in 2015

and 1.3 Mt in 2014.

2.1.2.4. Gas facilities

In 2014, TOTAL began trading petcoke from the Jubail refinery in

Saudi Arabia. In 2016, 890 kt were sold, compared to 720 kt in

Downstream from its natural gas and LNG production activities,

TOTAL holds stakes in natural gas transport networks and LNG

regasification terminals.

2015 and 100 kt in 2014.

Petcoke is sold to cement producers and electricity producers

mainly in India, as well as in Mexico, Brazil and other Latin

American countries and in Turkey.

Transportation and storage of natural gas

The Group holds stakes in several natural gas transportation

companies located in Brazil and Argentina. These companies are

facing a difficult operational and financial environment in Argentina.

In 2016, TOTAL sold 0.7 Mt of sulfur, mainly from its refineries’

production.

In France, TOTAL sold in February 2016 its stake in Géosud, which

held an interest in Géométhane, a company that owns and

operates several natural gas storage caverns in Manosque.

2

.1.2.3. Marketing

To optimize its position throughout the value chain and to leverage

the synergies from the Group’s other activities, TOTAL has been

developing the business of marketing natural gas and electricity to

end users.

LNG regasification

TOTAL has entered into agreements to obtain long-term access to

LNG regasification capacity worldwide: in the Americas (United

States, Mexico and Brazil), Europe (France and the United

Kingdom), Asia (India) and Africa (Côte d’Ivoire). This diversified

market presence allows the Group to access new liquefaction

projects by becoming a long-term buyer of a portion of the LNG

produced, thereby strengthening TOTAL’s LNG supply portfolio.

In the United Kingdom, TOTAL markets gas and electricity to the

industrial and commercial segments through its subsidiary Total

Gas & Power Ltd. In 2016, the volumes of gas sold were 143 Bcf

(

4.0 Bcm), compared to 140 Bcf (4.0 Bcm) in 2015 and 135 Bcf

3.8 Bcm) in 2014. Electricity sales were 7.4 TWh in 2016,

compared to 6.0 TWh in 2015 and 5.3 TWh in 2014.

In France, TOTAL operates in the natural gas market through

its marketing subsidiary Total Énergie Gaz, the sales of which were

In France, TOTAL holds a 27.5% stake in the company Fosmax

and has access to a regasification capacity of 78 Bcf/y (2.25 Bcm/y).

The terminal received 54 vessels in 2016, compared to 46 in 2015

and 2014.

77 Bcf (2.2 Bcm) in 2016, compared to 84 Bcf (2.4 Bcm) in 2015

and 95 Bcf (2.7 Bcm) in 2014.

In Germany, Total Energie Gas GmbH, a marketing subsidiary

of TOTAL, marketed 29 Bcf (0.9 Bcm) of gas in 2016 to industrial

and commercial customers, compared to 31 Bcf (0.9 Bcm) in 2015

and 24 Bcf (0.7 Bcm) in 2014.

TOTAL holds a 9.99% stake in Dunkerque LNG, which operates an

LNG receiving terminal with a capacity of 459 Bcf/y (13 Bcm/y).

Trade agreements have also been signed that allow TOTAL to

reserve up to 2 Bcm/y of regasification capacity over a 20-year

term. Commercial operations started on January 1, 2017.

28

TOTAL. Registration Document 2016

Business overview

Upstream segment

2

In the United Kingdom, through its equity interest in the Qatargas

project, TOTAL holds an 8.35% stake in the South Hook LNG

receiving terminal with a total capacity of 742 Bcf/y (21 Bcm/y) and

an equivalent access right to the regasification capacity. The terminal

received 67 cargoes in 2016, compared to 84 in 2015 and 67 in 2014.

In Brazil, as part of its strategic alliance with Petrobras, the

2

definitive contracts of which were signed in February 2017, TOTAL

expects to proceed with the acquisition from Petrobras of

regasification capacity in the Bahia LNG terminal.

2

.1.2.5. Electricity generation

In Mexico, TOTAL has reserved 25% of the regasification capacity

of the Altamira receiving terminal, i.e., 59 Bcf/y (1.7 Bcm/y), through

its 25% stake in Gas del Litoral.

In a context of increasing global demand for electricity, TOTAL has

developed expertise in the power generation sector, especially

through cogeneration and combined-cycle power plant projects.

In the United States, TOTAL has reserved a regasification capacity

of approximately 353 Bcf/y (10 Bcm/y) in the Sabine Pass terminal

In Abu Dhabi, the Taweelah A1 gas-fired power plant, which is

owned by Gulf Total Tractebel Power Company (TOTAL, 20%),

combines electricity generation and water desalination. The plant, in

operation since 2003, currently has a net power generation capacity

of 1,600 MW and a water desalination capacity of 385,000 m³ per

day. The plant’s production is sold to Abu Dhabi Water and

Electricity Company (ADWEC) as part of a long-term agreement.

(Louisiana) for a 20-year period until 2029. In 2012, TOTAL and

Sabine Pass Liquefaction (SPL) signed agreements allowing SPL to

gradually obtain access to TOTAL’s reserved capacity. Access to

38 Bcf/y commenced in 2012, growing to 195 Bcf/y from the start-

up of train 3 scheduled in 2017 and plateauing at substantially all of

TOTAL’s capacity from the start-up of train 5 scheduled in 2019. In

return, SPL will pay TOTAL a fee linked to the capacity assigned.

In Thailand, in September 2016 TOTAL sold the 28% stake it held

in Eastern Power and Electric Company Ltd which operates the

Bang Bo gas-fired combined cycle power plant with a capacity of

350 MW.

In India, TOTAL holds a 26% stake in the Hazira receiving terminal,

with a regasification capacity of 244 Bcf/y (6.9 Bcm/y). Located in

the Gujarat state, this merchant terminal with operations that cover

both LNG regasification and gas marketing, received 60 vessels

In Brazil, as part of its strategic alliance with Petrobras, TOTAL

expects to proceed with the acquisition from Petrobras of a 50%

interest in two co-generation plants located in the Bahia area.

(equivalent) in 2016, compared to 57 in 2015 and 45 in 2014.

In Côte d’Ivoire, a consortium led by TOTAL (34%, operator) has

been assigned responsibility for developing and operating an LNG

regasification terminal in Abidjan with a capacity of 3 Mt/y and a

start-up scheduled in 2018.

2.1.2.6. End of coal production and trading

Following completion of the sale in 2015 of its subsidiary Total Coal

South Africa, the Group ceased its coal production activities. In

addition, in 2016 the Group ended its coal trading activities.

Registration Document 2016. TOTAL

29

Business overview

2

Refining & Chemicals segment

2.2. Refining & Chemicals segment

Refining & Chemicals is a large industrial segment that encompasses

refining, petrochemicals and specialty chemicals operations. It also

includes the activities of Trading & Shipping.

As part of the One Total new organization, Group biomass activities

will be reported within the Refining & Chemicals segment as of financial

year 2017 (refer to point 1.3 of this chapter). They were previously

part of New Energies within the Marketing & Services segment.

Among the

Refining capacity of

One of the leading

traders of oil and

refined products

worldwide

world’s

$

1.6 billion

(2)

investments in 2016

50,433

employees present

1

0 largest

2.0Mb/d

of organic

(1)

integrated producers

at year-end 2016

Refinery throughput⁽³⁾

2,023

1,965

1,775

1

,523

1

,471

494

1

,433

342

Refinery throughput decreased by 3% for the full-year 2016

compared to 2015, notably due to shutdowns in Europe and

the US in the second quarter and the sale of the Schwedt refinery

in Germany in the fourth quarter 2015.

Europe

Rest of

world

5

00

(a)

(b)

(

kb/d)

2014

2015

2016

(

a) Excluding the condensate splitters of Port Arthur and Daesan.

b) Since 2015, Port-Arthur and Daesan condensate splitters are

integrated in the Group’s refining capacity and the 2015 data have

been restated.

Refining & Chemicals segment financial data

(M$)

2016

2015

2014

Non-Group sales

65,632

4,373

4,201

581

70,623

5,649

4,889

496

106,124

2,739

2,489

629

Adjusted operating income⁽^a⁾

Adjusted net operating income⁽^a⁾

of which specialty chemicals

(a) Adjusted results are defined as income at replacement cost, excluding non-recurring items, and excluding the impact of fair value changes.

The ERMI average was 34 $/t for the full-year 2016, a decrease

of 30% compared to the high level of 2015, in the context of high

inventories of refined products. Petrochemicals continued to benefit

from a favorable environment in 2016.

Adjusted net operating income from the Refining & Chemicals

segment was $4,201 million for the full-year 2016, a decrease of

14% compared to 2015 essentially due to the decrease in refining

margins. Petrochemicals continued to generate good results, notably

due to the strong contribution from the Group’s major integrated

platforms in Asia and the Middle East.

(

1) Based on publicly available information, production capacities at year-end 2015.

2) Organic investments = net investments, excluding acquisitions, divestments and other operations with non-controlling interests (refer to point 3.1 of this chapter).

3) Includes share of TotalErg, as well as refineries in Africa and the French Antilles that are reported in the Marketing & Services segment.

30

TOTAL. Registration Document 2016

Business overview

Refining & Chemicals segment

2

.2.1. Refining & Chemicals

bio-refinery scheduled for 2018. TOTAL also continued to develop

its major investment project launched in 2013 on the integrated

Antwerp platform in Belgium, which is intended to improve the site’s

conversion rate.

Refining & Chemicals includes the Group’s refining, petrochemicals

and specialty chemicals businesses:

–

the petrochemicals business includes base petrochemicals

olefins and aromatics) and polymer derivatives (polyethylene,

(

Activities by geographical area

polypropylene, polystyrene and hydrocarbon resins); and

the specialty chemicals business covers elastomer processing.

The sales of electroplating chemistry (Atotech) and adhesives

Europe

–

TOTAL is the largest refiner in Western Europe⁽³⁾.

(Bostik) activities were completed in early 2017 and in 2015,

Western Europe accounts for 72% of the Group ’s refining capacity, i.e.,

respectively.

1,454 kb/d at year-end 2016, compared to 1,699 kb/d at year-end

2

015 and 1,736 kb/d at year-end 2014, in line with the Group’s

The volume of its Refining & Chemicals activities places TOTAL

among the top ten integrated chemical producers in the world⁽¹⁾.

target of reducing capacity in Europe.

The Group operates eight refineries in Western Europe (one in

Antwerp, Belgium, five in France in Donges, Feyzin, Gonfreville,

Grandpuits and La Mède, one in Immingham in the United

Kingdom and one in Leuna, Germany) and owns stakes in the

Vlissingen refinery (Zeeland) in the Netherlands and the Trecate

refinery in Italy through its interest in TotalErg.

The strategy of Refining & Chemicals integrates a constant

requirement of safety, a core value of the Group, and priority given

to respect of the environment. In a context of rising worldwide

demand for oil and petrochemicals driven by non-OECD countries

and the entry of new capacities into the market, the strategy

involves:

The Group’s main petrochemical sites in Europe are located in

Belgium, in Antwerp (steam crackers, aromatics, polyethylene) and

Feluy (polyolefins, polystyrene), and in France, in Carling (polyethylene,

polystyrene), Feyzin (steam cracker, aromatics), Gonfreville (steam

crackers, aromatics, styrene, polyolefins, polystyrene) and Lavéra

–

improving competitiveness of refining and petrochemicals

activities by making optimal use of industrial means of

production, concentrating investments on large integrated

platforms and adapting production capacity to changes in

demand in Europe;

developing petrochemicals in the United States and the Middle

East by exploiting the proximity of advantaged oil and gas

resources in order to supply growth markets, in particular Asia; and

innovating in low-carbon solutions/products by developing

biofuels and biopolymers as well as materials and solutions

contributing to the energy efficiency of the Group’s customers,

in particular in the automotive market.

(

steam cracker, aromatics, polypropylene). Europe accounts for 49%

of the Group’s petrochemicals capacity, i.e., 10,383 kt at year-end

016, compared to 10,394 kt at year-end 2015 and 10,909 kt at

–

2

year-end 2014.

– In France, the Group continues to adapt its refining capacity and

to improve its operational efficiency against the backdrop of

structural decline in the demand for petroleum products in Europe.

In 2016, TOTAL continued the significant modernization plan

announced in April 2015 for its refining facilities in France, in

particular at La Mède, with an investment decision made in 2015

for over €200 million to transform the site and in particular create

the first bio-refinery in France. The first step relating to this

investment took place at the end of 2016 when the treatment of

crude oil was ended. The industrial transformation of La Mède

will allow TOTAL to respond to the growing demand for biofuel in

Europe. Other activities, such as a logistics and storage platform,

a solar energy farm, a training center and an AdBlue production

plant⁽⁴⁾, will also be developed on the site.

2

.2.1.1. Refining and petrochemicals

TOTAL’s refining capacity was 2,011 kb/d as of December 31,

016, compared to 2,247 kb/d at year-end 2015 and 2,187 kb/d at

2

year-end 2014. TOTAL has equity stakes in 19 refineries (including

nine operated by companies of the Group), located in Europe, the

United States, Africa, the Middle East and Asia.

The Refining & Chemicals segment manages refining operations

located in Europe (excluding TotalErg in Italy), the United States, the

Middle East, Asia and Africa⁽²⁾with a capacity of 1,962 kb/j at year-

end 2016, i.e., 98% of the Group’s total capacity.

In Donges, the €400 million investment project for the construction

of intermediate feedstock desulfurization units and hydrogen

production units is being considered. This program requires the

re-routing of the railroad track that currently crosses the refinery.

A three-party memorandum of intent to fund this re-routing work

between the state, local authorities and TOTAL was signed at the

end of 2015.

The petrochemicals businesses are located mainly in Europe, the

United States, Qatar, South Korea and Saudi Arabia. Most of these

sites are either adjacent to or connected by pipelines to Group

refineries. As a result, TOTAL’s petrochemical operations are

integrated within its refining operations, thereby maximizing synergies.

Between 2011 and 2016, the Group reduced its production

capacities in Europe by 20%, thereby fully meeting the target it had

set itself for 2017. The year 2016 saw the continuation of plans to

adapt the Lindsey refinery in the United Kingdom with closure at the

end of September of one of the two atmospheric distillation towers,

and the La Mède refinery in France with stoppage in December of

the crude oil treatment prior to the transformation of the site into a

In 2014, the Group completed its industrial plan, launched in

2009, to reconfigure the Gonfreville refinery in Normandy by

commissioning a new diesel desulfurization unit. In addition,

the Group modernized production of specialty products on the

site and decreased the base oil production capacity.

(

1) Based on publicly available information, refining and petrochemicals production capacities at year-end 2015.

2) Earnings related to certain refining assets in Africa and to the TotalErg joint venture are reported in the results of the Marketing & Services segment.

3) Based on publicly available information, 2015 refining capacities.

4) Fuel additive intended for road transport and designed to lower nitrogen oxide (NOx) compound emissions.

Registration Document 2016. TOTAL

31

Business overview

2

Refining & Chemicals segment

In petrochemicals, the Group reconfigured the Carling platform

in Lorraine. Steam cracking ended in October 2015. New

hydrocarbon resin and compound polypropylene production

units were commissioned in 2016.

has high-level platforms in these markets which are ideally

positioned for growth.

In Saudi Arabia, TOTAL has a 37.5% stake in the company

SATORP (Saudi Aramco Total Refining and Petrochemical Company),

which operates the Jubail refinery. It has been fully operational since

mid-2014 and technical and financial completions were reached in

June 2016. This refinery has an initial capacity of 400 kb/d and is

situated close to Saudi Arabia’s heavy crude oil fields. The refinery’s

configuration enables it to process these heavy crudes and sell

fuels and other light products that meet strict specifications and are

mainly intended for export. The refinery is also integrated with

petrochemical units: a 700 kt/y paraxylene unit, a 200 kt/y

propylene unit, and a 140 kt/y benzene unit.

–

In Germany, TOTAL operates the Leuna refinery (100%).

In 2015, the Group completed the sale of its stake in the Schwedt

refinery (16.7%) and acquired a majority stake in Polyblend, a

manufacturer of polyolefin compounds that are mainly used in

the automotive industry.

In Belgium, the Group launched a major project in 2013 to

modernize its Antwerp platform which is expected to be

commissioned in 2017:

-

new conversion units in response to the shift in demand towards

lighter petroleum products with a very low sulfur content,

a new unit to convert part of the combustible gases recovered

from the refining process into raw materials for the

petrochemical units.

In China, TOTAL holds a 22.4% stake in WEPEC, a company that

operates a refinery located in Dalian. Discussions are underway to

sell this stake to the Chinese partners of the joint venture.

-

In addition, the Group is developing a project to enable greater

flexibility on one of the steam-cracking units in order to process

European ethane as from 2017.

The Group is also active through its polystyrene plant in Foshan in

the Guangzhou region and its polystyrene plant in Ningbo in the

Shanghai region, each with a capacity of 200 kt/y.

–

In the United Kingdom, TOTAL decreased the capacity of the

Lindsey refinery by half in 2016, reducing it to 5.5 Mt/y. The

investment plan also focused on improving the conversion ratio,

adapting logistics and simplifying the refinery’s organization,

thereby lowering the site’s break-even point.

In South Korea, TOTAL has a 50% stake in Hanwha Total

Petrochemicals Co., Ltd. (“HTC”), which operates a petrochemical

complex in Daesan (condensate splitter, steam cracker, styrene,

paraxylene, polyolefins). Following the launch in 2014 of new

aromatics (paraxylene and benzene) and polymer units (EVA2), HTC

continued to expand its activities in 2015 with debottlenecking of

the steam cracker and a styrene unit thereby raising its ethylene

production capacity to 1.09 Mt/y and styrene production capacity

to 1.04 Mt/y. At the end of 2016, the EVA2 unit was

North America

The Group’s main sites in North America are located in Texas,

at Port Arthur (refinery, steam cracker), Bayport (polyethylene) and

La Porte (polypropylene), and in Louisiana, at Carville (styrene,

polystyrene).

debottlenecked. In 2016, the Group benefited from these

investments in a favorable economic environment.

At Port Arthur, TOTAL holds at the same site a 100% interest in a

1

78 kb/d capacity refinery and a 40% stake in BASF Total

In Qatar, the Group holds interests⁽¹⁾in two ethane-based steam

crackers (Qapco, Ras Laffan Olefin Cracker – RLOC) and four

polyethylene lines (Qapco, Qatofin), including the Qatofin linear low-

density polyethylene plant in Messaied with a capacity of 550 kt/y

and a 300 kt/y low-density polyethylene line operated by Qapco,

which started up in 2012. The Group is considering the

debottlenecking of these sites to optimize benefits from the

available ethane in the region.

Petrochemicals (BTP), which has a condensate splitter and a steam

cracker. The Group continues to work on strengthening the

synergies between these two plants.

A pipeline connecting the Port Arthur refinery to the Sun terminal in

Nederland was commissioned in 2014 to facilitate access to all

domestic crudes, which are priced advantageously compared to

the international market. Following investments to adapt its

furnaces and the construction of a tenth ethane furnace, which was

commissioned in 2014, BTP’s cracker can produce more than 1

Mt/year of ethylene, including more than 85% from advantaged

feedstock (ethane, propane, butane). BTP thus benefits from

favorable market conditions in the United States. In addition,

in mid-2016, TOTAL completed detailed studies (FEED) for the

construction of a new ethane steam cracker with an ethylene

production capacity of 1 Mt/y on the Port Arthur site, in synergy

with the refinery and BTP steam cracker.

TOTAL holds a 10% stake in the Ras Laffan condensate refinery,

the capacity of which increased to 300 kb/d following completion of

the project to double the refinery’s capacity; the new facilities were

commissioned in late 2016.

In Africa, the Group holds interests in four refineries (Cameroon,

Côte d’Ivoire, Senegal, South Africa) after the sale of its interest

in the refinery in Gabon in 2016. Refining & Chemicals provides

technical assistance for two of these refineries: the Natref refinery

with a capacity of 109 kb/d in South Africa and the SIR refinery

with a capacity of 80 kb/d in Côte d’Ivoire.

Asia, the Middle East and Africa

TOTAL is continuing to expand in growth areas and is developing

sites in countries with favorable access to raw materials. The Group

(1) TOTAL shareholdings: Qapco (20%); Qatofin (49%); RLOC (22.5%).

32

TOTAL. Registration Document 2016

Business overview

Refining & Chemicals segment

2

Crude oil refining capacity

(a)

The table below sets forth TOTAL’s crude oil refining capacity :

As of December 31

(kb/d)

2016

2015

2014

Nine refineries operated by Group companies

Normandy-Gonfreville (100%)

Provence-La Mède (100%)

Donges (100%)

Feyzin (100%)

Grandpuits (100%)

Antwerp (100%)

Leuna (100%)

Lindsey-Immingham (100%)

Port-Arthur (100%) and BTP (40%)⁽^c⁾

253

-⁽^b⁾

247

153

219

109

101

338

227

207

198

247

153

219

109

101

338

227

207

169

219

109

101

338

227

109

202

Subtotal

1,558

453

1,799

448

1,770

417

Other refineries in which the Group has equity stakes⁽^d⁾

Total

2,011

2,247

2,187

(

a) Capacity data based on refinery process unit stream-day capacities under normal operating conditions, less the impact of shutdown for regular repair and maintenance activities

averaged over an extended period of time.

(

b) Crude oil processing stopped indefinitely at the end of 2016.

c) The condensate splitter held by the joint venture between TOTAL 40% and BASF 60% located in Port-Arthur refinery has been taken into account since end 2015.

d) TOTAL’s share in the 10 refineries in which it has equity stakes as of December 31, 2016 ranging from 10% to 55% (one each in the Netherlands, China, Korea, Qatar, Saudi Arabia,

Italy and four in Africa). In addition to the sale of its participation in the Schwedt refinery in November 2015 and to the sale of its 50% stake in Société Anonyme de la Raffinerie des

Antilles (SARA) in Martinique in May 2015, TOTAL completed in December 2016 the sale of its stake in the SOGARA refinery in Gabon. In addition, the condensate splitter of Daesan in

Korea has been taken into account since end 2015, for a capacity of 79 kb/d (in TOTAL share of 50%).

Refined products

The table below sets forth by product category TOTAL’s net share⁽^a⁾of refined quantities produced at the Group’s refineries:

(kb/d)

2016

2015⁽^c⁾

2014⁽^d⁾

Gasoline

324

182

795

140

430

346

190

825

131

439

344

148

787

134

329

Aviation fuel⁽^b⁾

Diesel and heating oils

Heavy fuels

Other products

Total

1,871

1,931

1,742

(

a) For refineries not 100% owned by TOTAL, the production shown is TOTAL’s equity share in the site’s overall production.

b) Avgas, jet fuel and kerosene.

c) Since 2015, the condensate splitters of Port Arthur and Daesan are integrated in the refining capacities and 2015 data have been restated.

d) Excluding the condensate splitters of Port Arthur and Daesan.

Utilization rate

The tables below set forth the utilization rate of the Group’s refineries:

On crude and other feedstock⁽^a⁾⁽^b⁾

2016

2015⁽^c⁾

2014⁽^d⁾

France

Rest of Europe

Americas

Asia and the Middle East

Africa

81%

92%

97%

86%

85%

81%

94%

111%

80%

77%

88%

106%

50%

84%

77%

Average

87%

88%

81%

(

a) Including equity share of refineries in which the Group has a stake.

b) Crude + crackers’ feedstock/distillation capacity at the beginning of the year.

c) Since 2015, the condensate splitters of Port Arthur and Daesan are integrated in the refining capacities and 2015 data have been restated.

d) Excluding the condensate splitters of Port Arthur and Daesan.

On crude⁽^a⁾⁽^b⁾

2016

2015

2014

Average

85%

86%

77%

(

a) Including equity share of refineries in which the Group has a stake.

b) Crude/distillation capacity at the beginning of the year.

Registration Document 2016. TOTAL

33

Business overview

2

Refining & Chemicals segment

Petrochemicals: breakdown of TOTAL’s main production capacities

As of December 31

(in thousands of tons)

2016

2015

2014

Europe

North

Asia and

Worldwide

America Middle East ⁽

a)

Olefins⁽^b⁾

4,373

2,903

1,120

1,350

637

1,525

1,512

445

1,200

700

1,571

2,429

773

400

408

7,468

6,844

2,338

2,950

1,745

63

7,433

6,783

2,338

2,950

1,745

63

7,791

6,773

2,338

2,950

1,805

63

Aromatics⁽^c⁾

Polyethylene

Polypropylene

Polystyrene

Other⁽^d⁾

63

Total

10,383

5,382

5,643

21,407

21,312

21,720

(

a) Including interests in Qatar, 50% of Hanwha Total Petrochemicals Co. Ltd. and 37.5% of SATORP in Saudi Arabia.

b) Ethylene + propylene + butadiene.

c) Including monomer styrene.

d) Mainly monoethylene glycol (MEG) and cyclohexane.

Development of new avenues for the production

of fuels and polymers

Biomass to polymers

TOTAL is actively involved in developing activities associated

with the conversion of biomass to polymers. The main area of focus

is developing drop-in solutions for direct substitutions, by incorporating

biomass into the Group’s existing units, for example HVO or other

hydrotreated vegetable oil co-products in a naphtha cracker, and

developing the production of new molecules such as polylactic acid

polymer (PLA). Thus, in November 2016, the Group signed a

cooperation agreement with Corbion to create a joint venture for

construction of a PLA production site in Thailand.

TOTAL is exploring new ways to monetize carbon resources,

conventional or otherwise (natural gas, biomass, waste). These projects

are part of the Group’s commitment to building a diversified energy

2

mix generating lower CO emissions.

As regards biomass development, TOTAL is pursuing several

industrial and exploratory projects. The scope of these developments

is broad since they entail defining access to the resource (nature,

sustainability, location, supply method, transport), the nature of the

molecules and target markets (fuels, petrochemicals, specialty

chemicals) and the most appropriate, efficient and environmentally

friendly conversion processes.

2.2.1.2. Specialty chemicals

As part of active management of its business portfolio, TOTAL

completed in early 2017 the sale of its subsidiary Atotech,

Biomass to fuels

specialized in electroplating technologies. In 2016, Atotech had

almost 4,000 employees with 18 production sites in the world and

its sales were €1 billion ($1.1 billion). In 2015, TOTAL also completed

the sale of its subsidiary Bostik, specialized in adhesive chemicals.

In Europe, TOTAL produces biofuel, notably hydrotreated vegetable

oils (HVO) for incorporation into diesel, and ether produced from

ethanol and isobutene (ETBE) for incorporation into gasoline.

In 2016, the Group blended, at its European refineries and

several depots⁽¹⁾, 424 kt of ethanol⁽²⁾in gasoline, and 1,872 kt

of fatty-acid-methyl-ester (FAME) or HVO⁽²⁾in diesel.

Hutchinson actively contributes to the mobility of the future by

addressing its customers’ needs (automotive, aerospace and major

industries – defense, rail, energy) in order to offer a greater level of

safety, comfort and energy performance, as well as more responsible

solutions.

In addition, as part of the La Mède refinery transformation program

announced in 2015, the Group will construct the first bio-refinery in

France. Work is expected to begin in 2017 with a view to reaching

a production capacity of almost 500 kt/y of biofuel, mainly high-quality

biodiesel (HVO), but also biojet and petrochemical bio-feedstocks.

This will therefore allow the La Mède plant to meet the growing

biofuel market. Furthermore, the Group entered into a partnership

in 2016 with Suez to increase the supply and the recycling of used

oil, which could then be processed at La Mède.

The company draws on wide-ranging expertise and deploys its

know-how from the custom design of materials to the integration of

connected solutions: structural sealing solutions, precision sealing,

management of fluids, materials and structures, anti-vibration

systems and transmission systems.

To serve its customers, Hutchinson had 89 production sites across

the world (of which 56 are located in Europe and 18 in North America)

and 34,200 employees at December 31, 2016.

In 2016, TOTAL engaged in extensive research activity targeting the

emergence of new biofuel solutions. Construction now underway

as part of the BioTFuel consortium of a pilot demonstration unit on

the Dunkirk site is expected to lead to commencement in 2017 of a

gasification test program for conversion of biomass into fungible,

sulfur-free fuels.

Hutchinson’s sales were €4.0 billion ($4.5 billion) in 2016, up 5.4%

compared to 2015 and 16.7% compared to 2014. This growth was

due to outperformance on the world’s automotive markets, especially

among German and Asian manufacturers. In 2016, Hutchinson also

performed well on its other markets, particularly commercial aircrafts.

(

1) Excluding the Group’s participation in TotalErg.

(2) Including ethanol from ETBE (ethyl-tertio-butyl-ether) expressed in ethanol equivalent and HVO expressed in FAME equivalent. These equivalents are defined according to the EU Renewable

Energy Directive.

34

TOTAL. Registration Document 2016

Business overview

Refining & Chemicals segment

2

2.2.2. Trading & Shipping

2.2.2.1. Trading

Trading & Shipping focuses on serving the Group’s needs by:

In 2016, crude oil prices reached their lowest point in January and

then strengthened progressively, while remaining low, with high

volatility and a reduction in the contango⁽¹⁾structure of certain oil

indexes compared with 2015. Significant storage capacities in

different parts of the world, made available through leases,

contributed to the strong performance of Trading’s activities. The

Group’s offices in Houston and Singapore also contributed to the

growth of results by expanding their respective activities.

–

selling and marketing the Group’s crude oil production;

providing a supply of crude oil for the Group’s refineries;

importing and exporting the appropriate petroleum products for

the Group’s refineries to be able to adjust their production to the

needs of local markets;

–

chartering appropriate ships for these activities; and

undertaking trading on various derivatives markets.

TOTAL is one of the world’s largest traders of crude oil and

petroleum products on the basis of volumes traded. The table

below presents Trading’s worldwide crude oil sales and supply

sources and petroleum products sales for each of the past three

years. Trading of physical volumes of crude oil and petroleum

products amounted to 5.6 Mb/d in 2016, compared to 5.2 Mb/d in

In addition, with its acquired expertise, Trading & Shipping

is able to extend its scope beyond the aforementioned activities.

Trading & Shipping conducts its activities worldwide through

various wholly-owned subsidiaries established on strategically

important oil markets in Europe, Asia and North America.

2015 and to 4.9 Mb/d in 2014.

Trading’s crude oil sales and supply and petroleum products sales⁽^a⁾

(kb/d)

2016

2015

2014

Group’s worldwide liquids production

Purchased from Exploration & Production

Purchased from external suppliers

1,271

1,078

2,444

1,237

935

2,336

1,034

791

2,227

Total of Trading’s crude supply

3,522

3,271

3,018

Sales to Refining & Chemicals and Marketing & Services segments

Sales to external customers

1,590

1,932

1,668

1,603

1,520

1,498

Total of Trading’s crude sales

3,522

2,105

3,271

1,961

3,018

1,854

Petroleum products sales by Trading

(a) Including condensates.

Trading operates extensively on physical and derivatives markets,

both organized and over the counter. In connection with its Trading

activities, TOTAL, like most other oil companies, uses derivative

energy instruments (futures, forwards, swaps and options) with the

aim of adjusting its exposure to fluctuations in the price of crude oil

and petroleum products. These transactions are entered into with a

wide variety of counterparties.

2.2.2.2. Shipping

The transportation of crude oil and petroleum products necessary

for the activities of the Group is coordinated by Shipping. These

requirements are fulfilled through balanced use of the spot and

time-charter markets. The additional transport capacity can also be

used to transport third-party cargo. Shipping maintains a rigorous

safety policy, mainly through a strict selection of chartered vessels.

For additional information concerning derivatives transactions by

Trading & Shipping, see Note 16 (Financial instruments related to

commodity contracts) to the Consolidated Financial Statements

In 2016, Shipping chartered approximately 2,900 voyages (relatively

stable compared to 2015 and 2014) to transport 131 Mt of crude oil

and petroleum products, compared to 126 Mt in 2015 and 122 Mt

in 2014. On December 31, 2016, the mid- and long-term chartered

fleet amounted to 59 vessels (including 8 LPG vessels), compared

to 55 in 2015 and 48 in 2014. None of these vessels is single-hulled

and the average age of the fleet is approximately six years.

(refer to point 7 of chapter 10).

All of TOTAL’s Trading activities are subject to strict internal controls

and trading limits.

Like a certain number of other oil companies and ship owners, the

Group uses freight rate derivative contracts to adjust Shipping’s

exposure to freight rate fluctuations.

(1) Contango is the price structure where the prompt price of an index is lower than the future price.

Registration Document 2016. TOTAL

35

Business overview

2

Marketing & Services segment

2.3. Marketing & Services segment

The Marketing & Services segment includes worldwide supply and

marketing activities in the oil products and services field as well as

the activity of New Energies.

As part of the One Total new organization, New Energies has been

reorganized. As from financial year 2017, solar activities will be

reported within the new Gas, Renewables & Power segment, while

biomass activities will be reported within the Refining & Chemicals

segment (refer to point 1.3 of this chapter).

Historically among

the largest

Leading

marketer

in Africa⁽²⁾

16,461

branded service stations

at year-end 2016

$

1.4 billion

32,036

employees present

(3)

(4)

of organic investments

in 2016

marketers in Western

Europe⁽¹⁾

2

016 petroleum products sales⁽^a⁾

1

,818

1

,769

1,793

1

,092

726

1,093

1

,100

669

In 2016, refined product sales decreased slightly compared to

2015, essentially due to the sale of the retail network in Turkey.

Excluding portfolio effects, retail network sales increased by nearly

Europe

Reste of

world

700

4%. Sales of land-based lubricants also increased by nearly 4%.

(kb/d)

2014

2015

2016

(

a) Excludes trading and refining bulk sales,

including share of TotalErg.

Marketing & Services segment financial data

(M$)

2016

2015

2014

Non-Group sales

69,421

1,818

1,586

26

77,887

2,098

1,699

108

106,509

1,709

1,254

10

Adjusted operating income⁽^a⁾

Adjusted net operating income⁽^a⁾

including New Energies

(a) Adjusted results are defined as income using replacement cost, adjusted for special items, excluding the impact of changes for fair value.

Adjusted net operating income from the Marketing & Services segment was $1,586 million for the full-year 2016, a 7% decrease compared to

015. Excluding New Energies, which was particularly high in 2015 due to the delivery of the Quinto solar farm in the United States, net

operating income was stable despite asset sales.

2

(

1) Data published by the companies based on quantities sold.

2) PFC Energy and Company data 2015.

3) Total, Total Access, Elf, Elan and AS24, including service stations owned by third parties.

4) Organic investments = net investments, excluding acquisitions, divestments and other operations with non-controlling interests (refer to point 3.1 of this chapter).

36

TOTAL. Registration Document 2016

Business overview

Marketing & Services segment

2

.3.1. Marketing & Services

investments, M&S is able to supply high-quality lubricants to its

customers worldwide. In 2016, inland⁽⁶⁾lubricants sales increased

by nearly 4% compared to 2015.

The distribution of products and services for professional

markets. TOTAL is a partner of choice and a local supplier of

products (mainly bulk fuels, aviation fuel, special fluids, LPG,

bitumens, heavy fuels and marine bunkers) and a solution

provider that helps its customers to manage all their energy

needs with services such as the maintenance of on-site facilities

and the optimization of consumption.

The Marketing & Services (M&S) business segment is dedicated to

the development of TOTAL’s petroleum products distribution

activities and related services throughout the world. Present in more

than 150 countries⁽¹⁾, M&S conveys TOTAL’s brand image to its

customers, both individual and professional. TOTAL’s brand

renown, underpinned by advertising campaigns, substantial

investment in R&D and a digital transformation plan, all contribute

to building M&S’s highly visible, innovative and assertive lineup of

commercial solutions for its customers. Close proximity to its

customers is a core tenet of M&S’s strategy and the Group aims to

promote this proximity in all of its business segments. Finally, M&S

is committed to supplying environmentally responsible solutions.

–

As part of its activities, M&S holds interests in four refineries in Africa,

following the sale in 2016 of its minority interest in a refinery in

Gabon, and one in Europe through its 49% stake in TotalErg in Italy.

M&S pursues a proactive, primarily organic, development strategy.

M&S is consolidating its market share in its key western European

markets⁽²⁾, where it has reached critical mass and is one of the

main distributors of petroleum products⁽³⁾. M&S continues to

develop its activities in high-growth areas, particularly in Africa

where it is the market leader⁽⁴⁾, and in Asia. In 2016, organic

investments were approximately $1 billion, stable compared to

To meet its customers’ current and future needs, M&S has

strengthened its efforts in R&D, which increased by 19% between

2014 and 2016, in order to design and develop new product

ranges, in particular for the engine technologies of the future.

2.3.1.1. Sales of petroleum products

The following table presents M&S petroleum products sales⁽⁷⁾by

geographical area:

2015, and focused mainly on network development.

M&S is implementing an active portfolio management strategy.

In 2016, it completed the sale of its network of service stations

in Turkey and, with its partner Erg, started the process of selling

the joint venture TotalErg in Italy. In 2014 and 2015, M&S disposed

of several assets to optimize its position in Europe (sales of the

Liquefied Petroleum Gas (LPG) marketing subsidiaries in France

and Hungary and the LPG/commercial sales activity in Switzerland).

M&S also disposed of low-growth mature assets (stakes in the

Société Anonyme de la Raffinerie des Antilles and the Société

Réunionnaise de Produits Pétroliers). In parallel, M&S made

targeted acquisitions. In 2016, M&S announced the acquisition of

assets in East Africa (Kenya, Uganda and Tanzania), and in 2014

and 2015, it completed acquisitions in Pakistan, Vietnam and the

Dominican Republic.

(

kb/d)

2016

2015

2014

Europe

1,093

541

552

419

55

1,092

541

551

423

85

1,100

547

553

380

77

France

Europe, excluding France

Africa (excl. North Africa)

Middle East

Asia-Pacific⁽^a⁾

Americas

150

76

148

70

134

78

(a) Including Indian Ocean islands.

For data on biofuels, refer to point 2.2.1.1 of this chapter.

2.3.1.2. Service stations

M&S’s three main business areas are:

The table below presents the geographical distribution of the

Group’s branded⁽^a⁾service stations:

–

Retail, with a network of more than 16,000 service stations.

The Group is focusing on its key markets in Western Europe and

continues to develop in Africa, where it is already present in more

than 40 countries. In addition to the sale of high-performance

fuels and petroleum products, M&S captures new customers

and builds customer loyalty by diversifying its offer in its stores

and service stations (e.g., car wash, catering, car servicing)

through partnerships with other leading brands. The aim of these

additional offerings is to support customers in their mobility by

providing them with all of the products and services they need at

As of December 31

2016

2015

2014

Europe⁽^b⁾

8,309

3,593

2,585

4,167

809

8,391

3,667

2,608

4,058

816

8,557

3,727

2,749

3,991

796

of which France

of which TotalErg

Africa (excl. North Africa)

Middle East

Asia-Pacific⁽^c⁾

Americas

1,790

585

1,531

464

1,033

452

AS24 network (dedicated

to heavy-duty vehicles)

“one stop shop” service stations. In 2016, excluding the portfolio

801

763

740

effect, retail saw a 4% growth in sales compared to 2015.

The production and sales of lubricants, a highly profitable sector

that accounts for more than one third of M&S’s results⁽⁵⁾, and in

which TOTAL intends to pursue growth. M&S has entered into

commercial and technological partnerships with European and

Asian car manufacturers. With its 41 blending plants, including

the plant in Singapore commissioned in 2015, and its R&D

–

Total

16,461

16,023

15,569

(

a) TOTAL, Total Access, Elf, Elan and AS24. Including service stations not owned by TOTAL.

(b) Excluding AS24 network.

c) Including Indian Ocean islands.

(

1) Including via national distributors.

2) France, Germany, Belgium, Luxembourg and the Netherlands.

3) Publicly available information, based on quantities sold in 2015.

4) PFC Energy and Company data 2015.

5) Adjusted net operating income of M&S, excluding New Energies.

6) For non-maritime transportation and industrial applications.

7) In addition to M&S’s petroleum product sales, the Group’s sales also include international Trading (1,690 kb/d in 2016, 1,538 kb/d in 2015 and 1,385 kb/d in 2014) and bulk refining sales

700 kb/d in 2016, 649 kb/d in 2015 and 615 kb/d in 2014).

(

Registration Document 2016. TOTAL

37

Business overview

2

Marketing & Services segment

2.3.1.3. Main activities by geographical area

Africa & the Middle East

Retail

Europe

TOTAL is the leading marketer of petroleum products in Africa.

The Group achieved an average market share of nearly 18%⁽⁴⁾in

retail in 2016, an increase of 1% compared to 2014. It is pursuing

a strategy of profitable growth and increased market share in Africa.

Retail

In Western Europe, the Group aims to optimize its activities in the

countries where it has a large market share, enabling a high level of

profitability. It has a retail network of more than 8,300 service stations⁽

mainly spread throughout France, Belgium, the Netherlands,

Luxembourg, Germany and Italy. TOTAL is regaining market shares

in Western Europe by developing an innovative and diversified line

of products and services.

1)

In the zone Africa & the Middle East, the retail network has made of

approximately 5,000 service-stations in 2016, spread across more

than 40 countries. The Group operates major networks in South

Africa, Nigeria, Egypt and Morocco.

As part of its dynamic asset management policy, TOTAL finalized in

–

In France, the Group’s dense retail network includes over 1,500

TOTAL-branded service stations, nearly 700 Total Access

stations (service station concept combining low prices and

premium TOTAL-branded fuels and services) and almost 1,300

Elan service stations, which are mainly located in rural areas.

Since its launch in 2011, Total Access has led to the Group

regaining nearly 3%⁽²⁾market share.

In Germany, where TOTAL is the country’s fourth-largest operator⁽³⁾

with nearly 1,200 service stations at the end of 2016, and in

Belgium, where TOTAL is the country’s biggest operator⁽³⁾with

more than 530 service stations, the Group’s market share has

increased by almost 1% in three years.

In Italy, TOTAL and its partner Erg have started the process of

selling the joint venture TotalErg, in which the Group has a 49%

stake. TotalErg’s network includes nearly 2,600 service stations.

TOTAL will continue to have a presence in the country through its

marketing of lubricants and jet fuel.

2016 the disposal of its network of 450 service stations in Turkey,

while retaining its brand and lubricants business in the country.

In order to achieve its goal of gaining market share in all of the

countries where it operates in Africa & the Middle East, and in

addition to its organic growth strategy, M&S acquires independent

petroleum networks in certain countries. The acquisition underway

of assets in Kenya, Uganda and Tanzania will strengthen the supply

and logistics system in the region and speed up the growth of the

service station network, particularly in Tanzania.

–

M&S is diversifying its offering at service stations and is deploying

a range of innovative products and services through partnerships

in catering and stores, as well as in digital solutions.

Lubricants

TOTAL continues to pursue a growth strategy in lubricants in

Africa & the Middle East. M&S relies in particular on its lubricant

production plants in Dubai, Egypt and Saudi Arabia. In Africa,

TOTAL is the leading distributor of lubricants with 16.5%⁽⁵⁾market

share.

In the overall perimeter and bolstered by a network of more than

800 branded service stations, AS24 targets the heavy-duty

vehicles segment in 28 countries and seeks continued growth

primarily through expansion in the Mediterranean basin and

Eastern Europe and through its toll payment card service, which

covers nearly 20 countries.

Professional markets and other specialties

TOTAL acts as a leading partner, notably for mining customers in

Africa by delivering complete supply chain and management

solutions for fuels and lubricants.

TOTAL is also a major player in the European market for fuel

payment cards with nearly 3.3 million cards issued, enabling

companies of all sizes to improve fuel cost management and

access an ever-increasing number of services.

M&S also offers a diverse range of products and services aimed at

professionals in Africa. Among the different products, the bitumen

offering meets the requirements of the public works sector in Africa

with a variety of packaging options, and special fluids form an

integral part of development projects in the petroleum, mining and

agricultural sectors. Industrial customers also receive support from

TOTAL for the maintenance of on-site facilities through lubricants in

service analysis, among others.

Lubricants

TOTAL is pursuing its development in high-growth segments

throughout Europe. It relies mainly on its lubricant production sites

in Rouen (France) and Ertvelde (Belgium). In 2016, TOTAL launched

the construction of a lubricant production site in Russia.

Professional markets and other specialties

Asia-Pacific

TOTAL produces and markets specialty products in Europe, and

relies on its industrial facilities to produce special fluids (Oudalle in

France) and bitumen (Brunsbüttel in Germany).

At year-end 2016, TOTAL was present in 20 countries in the Asia-

Pacific zone and continued to strengthen its position in the distribution

of fuels and specialty products.

In France, TOTAL promotes a large fuel and service offering to

120,000 vehicle fleet managers. As for fuel sales (heavy fuels,

Retail

domestic fuels, etc.), they reach nearly one million customers.

TOTAL operates service station networks in China, Pakistan, the

Philippines, Cambodia and Indonesia, and is a significant player in

the Pacific islands. The Group network continued to expand, and

reached nearly 1,630 service stations at year-end 2016, an increase

of nearly 800 compared to 2014.

(

1) Excluding AS24 network.

2) Company data between 2011 and 2016.

3) Source: IHS 2015.

4) Retail market share in Africa in the countries where the Group operates, based on 2015 publicly available information on quantities sold.

5) Company data.

(

38

TOTAL. Registration Document 2016

Business overview

Marketing & Services segment

2

–

In Pakistan, TOTAL’s acquisition in 2015, with its local partner

PARCO, of Chevron’s distribution network, has increased the

TOTAL network by 500 service stations and strengthened the

Group’s distribution and logistics capacities in Pakistan.

In the Philippines, TOTAL doubled its market share (from 3% to

In order to respond to developments in world markets and prepare

for tomorrow’s growth opportunities, TOTAL develops products and

services in collaboration with its customers that optimize their

energy bills, such as the products under the Total Ecosolutions

label, which include Excellium fuels and Fuel Economy lubricants

(refer to point 2.3.4 of chapter 7). These solutions include a

diversified range of energy supplies (fuels, gas, solar and wood

pellets) as well as consumption auditing, monitoring and

management services.

6

%⁽¹⁾) in retail through the creation of a joint venture with its local

operator FilOil in 2016. TOTAL has thus increased its retail

network by 200 service stations.

In China, TOTAL was operating more than 230 services stations

at year-end 2016 through a wholly-owned subsidiary and two

joint ventures with Sinochem, one of which obtained a

commercial wholesales license in 2016 that will enable it to

expand its activities.

Looking beyond energy services, TOTAL also relies on digital

innovations to develop new offers for its customers. This is how

TOTAL enables money transfers and payment by smartphone in

Africa, or online domestic heating oil orders in France. The Total

Services mobile application has been deployed in 43 countries, and

the customer relationship program uses a central tool to send

personalized offers to over one million customers in 10 countries.

For its professional customers, M&S has launched Bitume Online in

France, a platform that offers bitumens at fixed rates, and a portal

for lubricant distributors deployed in some 20 countries (including in

the United Arab Emirates), among others.

Lubricants

TOTAL’s share of the inland lubricant market reached 3.6% in 2016

in this region. One of the Group’s largest lubricant production plants

started up in mid-2015 in Singapore in order to support M&S’s

ambitions for growth in the region. It has a production capacity

of 310 kt/year.

TOTAL lubricant sales in China increased in 2016. To support its

ambitions for growth in China and in the region, TOTAL opened a

grease production site in Tianjin (China) in 2016.

For the longer term, TOTAL also supports the development of

alternatives to traditional fuels, and M&S intends to expand in these

segments:

Professional markets and other specialties

TOTAL continues to strengthen its presence in the specialties

markets in the region, in particular in Vietnam, where the Group

confirmed its position as the number two player⁽¹⁾in the LPG

market, and in India.

– Electro-mobility: in 2016, TOTAL’s European subsidiaries

continued the developments and demonstrations of the distribution

of electricity intended for electric vehicles. TOTAL will have in 2017

approximately 100 service stations equipped with higher power

charging points in Belgium, the Netherlands, Luxembourg,

France and Germany. Service stations on major routes in Europe

are due to be fitted with super-fast charging stations over the

coming years. In the short term, a new offering will be added to

Total cards to give professional customers access to the largest

public charging networks in Europe.

Americas

In retail, the Group operates in several Caribbean islands with

nearly 600 service stations at year-end 2016. In January 2016,

TOTAL strengthened its position with the acquisition of a majority

stake of 70% in the fuel marketing leader in the Dominican

Republic, which operates a network of 130 service stations,

commercial sales and lubricants activities.

–

Gas for transport: TOTAL has approximately 450 stations that

deliver natural gas vehicles (NGV) in Asia, Africa and Europe, and

intends to develop several hundred additional stations, mainly in

Europe, over the coming years.

In lubricants and other specialty products, TOTAL is pursuing

in the overall region its strategy of growth, mainly in lubricants,

aviation fuel and special fluids. To strengthen its special fluids

business, the Group has built a special fluids production plant in

Bayport, Texas, which has been operational since early 2016.

– Hydrogen: with its partners Air Liquide, Daimler, Linde, OMV and

Shell, TOTAL created in 2015 the H2 Mobility Germany joint

venture, which aims to deploy some 400 hydrogen stations in

Germany, with a forecast of more than 250,000 fuel cell vehicles

being in circulation by 2025. The majority of the hydrogen

stations also developed through the Clean Energy Partnership in

Germany (target of 50 stations in 2017, 13 of which are in the

TOTAL network) will be incorporated into the H2 Mobility

Germany joint venture.

2.3.1.4. Products and services developments

The Group develops technologically advanced products, some of

which are formulated for use in motor sports before being generally

released on the market. In 2016, TOTAL continued its technical

partnerships, in particular with Renault Sport Racing, the PSA

group (WRC, WTCC and Rallycross) and Aston Martin Racing.

These partnerships demonstrate TOTAL’s technical excellence in

the formulation of fuels and lubricants under extreme conditions

and subject to requirements to reduce fuel consumption. At the end

of 2016, TOTAL and PSA (Peugeot, Citroën and DS) renewed their

partnership for five years in the areas of R&D, business relations

with the three PSA brands and motor sports.

2.3.2. New Energies

As part of its ambition to become the responsible energy major,

the Group is developing its activities in low-carbon and renewable

energies businesses. Facing the challenge of climate change, TOTAL

positions itself on an energy mix, with decreasing carbon intensity

that takes into account the 2°C scenario of the IEA.

(1) Company data.

Registration Document 2016. TOTAL

39

Business overview

2

Marketing & Services segment

The Group is active along the entire solar photovoltaic value chain,

with SunPower and Total Solar, from the production of photovoltaic

cells to the development of solar farms or installation of solar

facilities in private households.

SunPower is pursuing its development in residential and commercial

markets, in particular in the United States, by increasing its service

offerings for solar power production, management and financing.

SunPower is also developing its Smart Energy activity to permit its

residential and commercial customers to optimize their power

consumption. Thus in 2016, SunPower launched a pilot project in

New York State involving electricity production and consumption

management with a storage offer in association with the local

electricity provider.

Over the longer term, it pursues a second axe of development with

the transformation of biomass through biotechnology, which aims

to develop new biosourced product solutions for transportation

and chemicals.

TOTAL actively follows developments in other renewable energies.

In this context, the Group owns a farm of four wind turbines (10 MW

near Dunkirk, France) and a stake in marine energy (9.99% in the

company Scotrenewables Tidal Power, Scotland).

The second half of 2016 was marked by a sharp deterioration of

the global market, in a context of strong overcapacity of photovoltaic

cells production. SunPower announced an adjustment plan to cope

with this market deterioration. This plan is essentially based on a

reduction of the company’s operational costs and on the closure of

a cells manufacturing unit in the Philippines.

The acquisition of Saft Groupe S.A. in 2016 is consistent with this

ambition. The Group plans to pursue its investments in low-carbon

businesses.

In this context, TOTAL and SunPower decided to deepen their

cooperation through several strategic initiatives. In particular, in

November 2016, TOTAL concluded an agreement with SunPower

to supply the panels required for retrofitting over the next five years

5,000 service stations and approximately 100 other sites across

the world for an installed capacity of 200 MW. In addition, TOTAL

undertook via Total Solar the acquisition of projects developed

by SunPower in Japan, South-Africa and France.

2

.3.2.1. Solar energy

TOTAL acquired a majority share in SunPower in 2011. In addition,

the Group develops and holds interests via Total Solar in solar

farms and is pursuing R&D investments in the photovoltaic field

through several industrial and academic partnerships.

The steady reduction in photovoltaic electricity costs opens an

ever-growing number of markets. However, in some areas,

achievement of the full potential of this technology requires the

support of public programs.

Other solar assets

The Group holds a 20% stake in the solar power plant Shams 1,

commissioned in 2013 in Abu Dhabi. With 109 MW of parabolic

concentrated solar power, Shams 1 is the largest thermal parabolic

concentrated solar power plant in the Middle East⁽¹⁾. In addition,

Total Solar co-developed and holds interests in the solar farms built

by SunPower: Salvador in Chile and Prieska in South-Africa, as well

as Nanao in Japan, which is under construction.

SunPower

TOTAL holds 56.73% of SunPower as of December 31, 2016,

an American company listed on NASDAQ and based in California.

As an integrated player, SunPower operates over the entire solar

power value chain. Upstream, it designs, manufactures and

supplies cells as well as the highest-efficiency solar panels on the

market. Downstream, SunPower is active in the design and

construction of large turnkey power plants and in the marketing of

integrated solar solutions for decentralized electricity generation.

In line with its CSR approach, the Group continues to install solar

solutions through its decentralized rural electrification projects in

several countries, especially in South Africa via KES (Kwazulu

Energy Services Company), in which TOTAL holds a 35% stake.

Upstream, SunPower manufactures all its cells in Asia (Philippines,

Malaysia) and has a nominal production capacity of approximately

New solar technologies

1

,050 MW/y at year-end 2016. Through its significant R&D

In order to strengthen its technological leadership in the crystalline

silicon value chain, and in addition to its cooperation with

SunPower in the R&D field, New Energies partners with leading

laboratories and international research institutes. This work consists

of developing and optimizing the photovoltaic solar power chain

program, the company is constantly optimizing its production process

to reduce costs while maintaining its technological leadership. The

cells are assembled into modules, or solar panels, in plants located

mainly in Mexico and Europe.

(

from silicon through to power systems and including wafers, cells

To extend its commercial offering, from 2016 SunPower has marketed

a new lower-priced modules range to target the most competitive market

sectors while continuing to hold a technical edge over its competitors.

and modules), reducing production costs and increasing the

efficiency and reliability of components. The Group is also

strengthening its expertise in solar resource evaluation and prediction.

Downstream, SunPower markets its panels worldwide for

applications ranging from residential and commercial roof tiles to

large solar power plants. SunPower installed more than 1.3 GW in

Additionally, downstream, TOTAL is continuing its research efforts

on new generations of energy management and control systems for

residential and commercial applications in order to differentiate the

Group entities’ offer on the electric market and to lower the cost of

energy consumed for customers.

2016 compared to 1.2 GW in 2015. As of December 31, 2016,

SunPower holds a 36.53% stake in the company 8point3 Energy

Partners, initially set up with First Solar. 8point3 Energy Partners, the

purpose of which is to acquire and operate solar projects, was listed

on NASDAQ in 2015. Additionally, in 2016 SunPower completed the

construction in the United States of the solar farm Boulder Solar 1

(125 MWc) and the Henrietta farm (128 MWc). SunPower also

completed construction of the Prieska farm (86 MWc) in South Africa.

(1) Company data.

40

TOTAL. Registration Document 2016

Business overview

Marketing & Services segment

2

2.3.2.2. Energy storage

2.3.2.3. Biotechnologies and the conversion of biomass

Energy storage is one of the solutions that can offset the

TOTAL has launched numerous collaborative R&D projects for the

development of bio-sourced molecules with various academic

partners (the Joint BioEnergy Institute in the United States, the

University of Wageningen in the Netherlands) and industrial partners

in Europe (the Toulouse White Biotechnology consortium) and in the

United States (Amyris Inc., Novogy). Amyris Inc. is an American

company listed on NASDAQ, in which TOTAL holds an interest of

intermittent nature of renewable energies, thereby increasing their

profitability and facilitating their development. The Group has

invested in this area since 2009 via collaborative R&D programs

with academic partners and minority stakes in start-ups, through

among others Total Energy Ventures, a venture capital company

(refer to point 2.3.5 of chapter 7).

2

3.51% as of December 31, 2016. It produces biojet fuel from

The acquisition of 100% of the shares of Saft Groupe S.A. (“Saft”),

completed in August 2016 following a successful voluntary

takeover bid, is fully in line with TOTAL’s goal to develop in the

renewable energies and electricity businesses.

farnesane, which has been used successfully in demonstration

flights, notably with Air France, KLM and Cathay Pacific.

TOTAL is exploring a number of opportunities for developing

biomass. In particular, TOTAL has invested in the start-up

Renmatix, which is developing an innovative technology involving

the deconstruction of lignocellulose into fermentable sugars.

This is in addition to the action already initiated by the Group within

the French consortium Futurol for the conversion of lignocellulose

into ethanol.

Saft is a French company founded in 1918 specializing in the

design, manufacture and marketing of high technology batteries for

industry. In 2016, Saft achieved sales of €738 million, including

7

5% on markets where it is the leader⁽¹⁾, such as nickel and primary

lithium batteries for industrial infrastructure, transport and civil and

military electronics applications. It also develops batteries for space

and defense using its lithium-ion technologies, which are also

deployed in the domains of energy storage, transport and

telecommunications networks. Building on its technological

expertise, the company is well positioned to benefit from growth in

renewable energies beyond its current activities.

In 2015 and 2016, TOTAL also acquired two new R&D platforms:

one at Emeryville in California (United States) dedicated to the

development of processes for fermenting and separating molecules

from biotechnologies, and the other at Solaize (France) with the

goal of developing new biocomponents by implementing predictive

retrosynthesis methodologies.

As of year-end 2016, Saft is present in 19 countries in the world

(

historically Europe and the United States) and has over 4,000

In the longer term, the Group is also studying the potential for

developing a cost-effective phototrophic process for producing

biomolecules through microalgae bioengineering.

employees. It is achieving steady growth in emerging countries, in

particular in Asia, South America and Russia, and has 14 production

sites and approximately 30 sales offices.

(1) Largest market share. Company data.

Registration Document 2016. TOTAL

41

Business overview

2

Investments

3. Investments

3.1. Major investments over the 2014-2016 period

Gross investments⁽^a⁾(M$)

2016

2015

2014

Upstream

16,035

1,849

2,506

140

24,270

1,843

1,841

79

26,520

2,022

1,818

149

Refining & Chemicals

Marketing & Services

Corporate

Total

20,530

2016

28,033

2015

30,509

2014

Net investments⁽^b⁾(M$)

Upstream

13,701

1,763

2,167

126

21,055

(1,645)

896

20,756

1,830

1,476

78

Refining & Chemicals

Marketing & Services

Corporate

54

Total

17,757

2016

20,360

2015

24,140

2014

(

M$)

Acquisitions

including resource acquisitions

Divestments

2,033

780

1,864

(104)

3,441

2,808

5,968

89

2,539

1,765

4,650

179

Other operations with non-controlling interests

Organic investments⁽^c⁾(M$)

2016

2015

2014

Upstream

14,316

1,636

1,432

100

20,508

827

1,569

72

22,959

1,944

1,424

104

Refining & Chemicals

Marketing & Services

Corporate

Total

17,484

22,976

26,430

(

a) Including acquisitions and increases in non-current loans. The main acquisitions for the 2014-2016 period are detailed in Note 3 to the Consolidated Financial Statements (point 7 of

chapter 10).

b) Net investments = gross investments – divestments – repayment of non-current loans – other operations with non-controlling interests. The main divestments for the 2014-2016 period

are detailed in Note 7 to the Consolidated Financial Statements (point 7 of chapter 10).

c) Organic investments = net investments, excluding acquisitions, divestments and other operations with non-controlling interests.

In 2016, the Group’s organic investments and resource acquisitions

were $18.3 billion. The decrease in investments compared to 2015

follows the completion and start-up of nine major production growth

projects in 2015 and five in 2016. The reduction also resulted from

a successful capital efficiency program implemented in response to

the fall in Brent prices.

France into a bio-refinery and the modernization of the Antwerp

refinery in Belgium with the addition of a new heavy fuel oil

conversion unit and another petrochemical unit, and reduced by

50% the capacity of the Lindsey oil refinery in the United Kingdom.

In the Marketing & Services segment, investments in 2016 mainly

concerned retail networks in growth regions, logistics and specialty

products production and storage facilities.

In the Upstream segment, most of the investments were geared

toward the development of new hydrocarbon production facilities,

the maintenance of existing facilities and exploration activities.

Development expenditures were mainly related to the five projects

that started up in 2016 (Laggan-Tormore, Vega Pleyade, Incahuasi,

Angola LNG and Kashagan) and to other major projects under

construction and expected to start up in 2017 and 2018, including

Moho North in the Republic of the Congo, Yamal LNG in Russia,

Ichthys LNG in Australia, Kaombo in Angola and Egina in Nigeria.

Acquisitions in 2016 totaled $2.0 billion, including $780 million of

resource acquisitions, a 41% decrease compared to $3.4 billion

in 2015.

The Group took advantage of favorable market conditions to

expand its Upstream portfolio. The Group strengthened its position

in the Middle East by entering the Al Shaheen field in Qatar, and in

the US with the acquisition of shale gas assets. Resources

acquisitions were $780 million in 2016, comprised mainly of the

additional 75% interest in the Barnett shale gas field in the United

States. The Group is preparing future growth with the signing of

major deals in Brazil with Petrobras, in Uganda and in Iran on the

giant South Pars 11 project.

In the Refining & Chemicals segment, investments were made

in facilities maintenance and safety, as well as in projects aimed

at improving the plants’ competitiveness. In 2016, the Group

progressed with the transformation of the La Mède refinery in

42

TOTAL. Registration Document 2016

Business overview

Investments

2

As part of the development of profitable low-carbon businesses,

the Group acquired Saft Groupe, a leader in energy storage solutions.

In line with the strategy to expand its gas and power distribution

activities, the Group also acquired Lampiris, a supplier of natural gas

and energy services in Belgium and France. Finally, in the Marketing &

Services segment, the Group announced the planned acquisition of

a retail and supply terminal network in Kenya, Uganda and Tanzania

to strengthen its marketing and supply activities in the region.

of a 15% stake in the Gina Krog field in Norway and a 20% stake in

the Kharyaga field in Russia, as well as the sale of the FUKA

pipeline system in the North Sea and a retail network in Turkey. The

Group also finalized in January 2017 the sale of Atotech, a plating

chemistry company, for $3.2 billion, which was announced in 2016.

The $10 billion asset sale program for 2015-2017 was around 80%

complete following the closing of the Atotech sale in 2017.

Net investments were $17.8 billion in 2016, compared

to $20.4 billion in 2015, a decrease of 13% essentially related to the

decrease in organic investments.

The Group also continued its divestment program of mature and

non-core assets for a total of $1.9 billion in 2016, including the sale

3.2. Major planned investments

Investments are moving into the sustainable range needed to

deliver profitable future growth and are expected to be between

Most of the Marketing & Services budget will be allocated to growth

regions, notably Africa, the Middle East and Asia.

$

16 and $17 billion in 2017 including resource acquisitions.

The Group will also continue investing to grow its Downstream gas

and renewables businesses through the newly established Gas,

Renewables and Power segment, as well as in R&D.

Investments in the Exploration & Production segment will be largely

allocated to major development projects under construction,

including Moho North in the Republic of the Congo, Yamal LNG in

Russia, Ichthys LNG in Australia, Kaombo in Angola and Egina in

Nigeria as well to a number of new projects expected to be

launched this year. A portion of the funds will also be allocated to

assets already in production, in particular for maintenance capital

expenditures and in-fill wells.

TOTAL self-finances most of its investments with cash flow from

operating activities and occasionally accesses the bond market

when financial market conditions are favorable. Investments for joint

ventures between TOTAL and external partners are generally

funded through specific project financing.

As part of certain project financing arrangements, TOTAL S.A. has

provided guarantees. These guarantees (“Guarantees given on

borrowings”) as well as other information on the Group’s off-

balance sheet commitments and contractual obligations appear in

Note13 to the Consolidated Financial Statements (point 7 of

chapter 10). The Group currently believes that neither these

guarantees nor the other off-balance sheet commitments of TOTAL

S.A. or of any other Group company have, or could reasonably

have in the future, a material effect on the Group’s financial position,

income and expenses, liquidity, investments or financial resources.

In the Refining & Chemicals segment, the modernization of the

Antwerp integrated platform and the transformation of the La Mède

refinery to a bio-refinery will be among the major investments

in 2017. The Group is also progressing plans for the construction

of a side cracker at the Port Arthur refinery complex in the United

States. A significant portion of the segment’s budget will also

be allocated to required maintenance and safety investments.

The Marketing & Services segment’s investment budget will,

finance, in particular, the service station network, logistics, specialty

products production and storage facilities, particularly lubricants.

Registration Document 2016. TOTAL

43

Business overview

2

Research & Development

4. Research & Development

The Group’s overall R&D investments were $1,050 million in 2016,

compared to $980 million in 2015 and $1,245 million in 2014.

There were 4,939 people dedicated to R&D activities in 2016

– mastering and using innovative technologies such as

biotechnologies, materials sciences, nanotechnologies, high-

performance computing, information and communication

technologies or new analytical techniques.

compared to 4,248 in 2015 and 4,596 in 2014⁽¹⁾

.

TOTAL invested $689 million in 2016 in innovation and R&D for its

oil and gas activities . The expenses dedicated to these activities are

expected to increase by 5% on average between 2015 and 2017.

These issues are incorporated into the project portfolio to develop

synergies. Different aspects may be looked at independently by

different business segments, with high levels of interaction between

R&D, technology and business unit teams.

(2)

R&D at TOTAL focuses on six major axes:

Since 2009, Total Energy Ventures, which is in charge of developing

small and medium-sized enterprises (SMEs) specialized in innovative

energy technologies and clean technologies for the Group,

manages a portfolio that has grown regularly. In addition, a loan

facility was introduced for innovative SMEs that develop

technologies of interest for the Group.

–

developing knowledge, tools and technological expertise to

discover and profitably produce complex oil and gas resources at

a reduced cost to help meet the global demand for energy;

developing, industrializing and improving competitive processes

for the conversion of oil, gas and biomass resources to adapt to

changes in resources and markets, improve reliability and safety,

achieve better energy efficiency, reduce the environmental

footprint and maintain profitability in the long term;

developing and industrializing solar, biomass and carbon capture

and storage technologies to help prepare for future energy needs

in an economically competitive manner;

developing practical, innovative and competitive materials and

products that meet customers’ specific needs, contribute to the

emergence of new features and systems, enable current

materials to be replaced by materials delivering higher

performance to users, and address the challenges of improved

energy efficiency, lower environmental impact and toxicity, better

management of their life cycle and waste recovery;

understanding and measuring the impacts of the Group’s

operations and products on ecosystems (water, soil, air, biodiversity)

and recovering waste to improve environmental safety, as part of

the regulation in place, and reduce their environmental footprint to

endeavor to achieve sustainability in the Group’s operations; and

–

In 2016, a Group R&D Division was set up as part of the Group’s

new organization, “One Total” (refer to point 1.3 of this chapter).

This new division is in charge of:

–

constructing a consolidated view of all of the Group’s R&D

activities and putting in place an R&D roadmap taking into

account the 2°C scenario of the IAE;

launching and monitoring transversal studies on key subjects for

2

the Group, such as CO capture, use and storage, health, safety

and the environment (HSE) and energy efficiency;

increasing synergies between R&D teams by facilitating the

sharing of tools, expertise and, when needed, resources,

selecting and respecting good practices, and capitalizing on

scientific expertise; and

–

ensuring the transfer of technologies towards the Group’s

industrial and commercial activities.

4.1. Upstream

In Exploration & Production, the R&D project portfolio was reviewed

in 2016 according to the impacts on reducing costs and the

environmental footprint, and on improving safety and production.

More than half of the R&D budget is focused on improving

exploration (geological structures, seismic acquisition and imaging

technologies), characterization of hydrocarbon reservoirs and

simulation of field evolution during production. Enhancing oil

recovery from mature reservoirs remains an active area of research,

particularly in the Group’s partnerships in the Middle East.

end in 2016. The Group now has a strong command of the methods

used to characterize reservoirs and their mechanical properties for this

type of injection. New R&D projects are being identified in order to

develop carbon capture, use and storage (CCUS) in the coming years.

A sustained effort to adapt mature technologies in order to reduce their

costs has been implemented. In particular, new technologies addressing

the management of water associated with hydrocarbon production are

now available for new developments. This subject is part of a larger

program dedicated to Sustainable Development. The increased use of

digital technology also forms part of this cost-reduction program.

R&D activities in deep offshore aiming at greater distances for

multiphase production transport have been increased further, which

is fully in line with the goals of Exploration & Production and

supports major technology-intensive assets such as Libra in Brazil.

Finally, R&D programs prepare for the medium and long terms,

whether for researching new exploration concepts, non-

conventional resources or developing technologies, such as

robotics, nanotechnologies or high-performance computing

(notably, the Pangea supercomputer, a decision-support tool for

exploration and field management).

Operations on wells, from drilling to closure, account for a

significant share of Upstream costs; new R&D projects are under

way to reduce these and further increase operational safety.

The monitoring phase of the oxy-combustion CO

project in the depleted Rousse reservoir in Lacq (France) came to an

2

capture and storage

Concerning the activities of Gas, the program to develop new

technological acid gas treatment and LNG solutions is continuing.

(

1) Figures for 2014 and 2015 concerning the Group’s R&D investments and employees were restated to reflect the accounting reporting scope.

(2) Excluding R&D budgets of Atotech, Hutchinson, SunPower and Saft Groupe.

44

TOTAL. Registration Document 2016

Business overview

Research & Development

2

4.2. Refining & Chemicals

4

.2.1. Refining & Chemicals

bimodality to develop different types of mass consumption

(

excluding specialty chemicals)

polymers that have exceptional properties allowing them to replace

heavier materials and compete with technical polymers. Value-

added niche polymers are also being developed, whether in the

form of blends or composites. Efforts to diversify into biosourced

products are focused mainly on products endorsed by the market:

biomonomers, biointermediates, and biopolymers. R&D is thus

focusing on polylactic acid due to the new applications that can be

envisaged as a result of its specific properties. For plastics

recycling, R&D is designing technologies that will make it possible

to recycle polymers under acceptable conditions in terms of end

product quality, cost and environmental impact.

The aim of R&D is to support the medium and long-term

development of Refining & Chemicals. In doing so, it contributes to

the technological differentiation of this business through the

development, implementation and promotion of effective R&D

programs that pave the way for the industrialization of knowledge,

processes and technologies.

In line with Refining & Chemicals’ strategy, R&D places special

emphasis on the following four major challenges: taking advantage

of different types of feedstock; maximizing asset value; continuing

to develop innovative products; and developing biosourced

products. The medium-term strategy of the project portfolio and its

deployment plan will facilitate Refining & Chemicals’ technological

differentiation.

With regard to biofuels, R&D has directed its efforts towards

gasification and coprocessing to produce liquid fuels from biomass.

R&D is also particularly mindful of issues related to blends and

product quality raised by the use of biomolecules.

To take advantage of different types of feedstock, R&D activities

related to the processing of more diversified crudes have increased

significantly through a clearer insight into the effect that feedstocks

have on equipment and processes at the molecular level. R&D is

launching ambitious new programs to develop various technologies

for producing liquid fuels, monomers and intermediates from gas.

The efficient use of resources is a major challenge for Sustainable

Development. As a result, R&D is pioneering technologies enabling

more efficient use of biosourced molecules to produce higher

added-value chemical compounds, whether through biotechnologies

or thermochemical processes.

R&D is developing expertise and technologies with a view to

maximizing asset value. Its efforts mainly involve programs focusing

on the flexibility and availability of facilities. Advanced modeling of

feedstocks and processes helps the units overcome processing-

related constraints and operate while taking these constraints into

account in real time. Research conducted on catalysts is helping to

increase their resistance, improve catalytic stability and extend the

cycle time at a lower cost. Programs are being set up to maximize

the value of heavy residues. The new opportunities presented by

digital technology are being examined to pave the way for the

4.2.2. Specialty chemicals

R&D is strategically important for specialty chemical products.

It is closely linked to the needs of the subsidiaries and industrial

customers.

For Hutchinson, R&D is an important factor in innovation and

differentiation. The company is present along the entire value chain,

from designing custom materials (e.g., rubber, thermoplastics,

composites) to incorporating connected solutions (e.g., complex

solutions, mechatronics, connected objects).

“

plant of the future”, which will provide an even safer working

With a corporate research and innovation center, more than

environment and increased productivity, while consuming less

energy and producing less waste.

25 technical centers and a number of university partnerships

worldwide, Hutchinson is equipped to rise to the challenge of

contributing to the safer, more comfortable, and more responsible

mobility of the future.

In line with the Group’s low-carbon strategy, R&D is pioneering

solutions to reduce greenhouse gas emissions through carbon

capture and recovery by conversion. In addition, out of concern for

the environmental footprint of Refining & Chemicals’ activities, R&D is

developing new technologies to improve the energy efficiency of

facilities and reduce the impact of the activities on water, air, soil, etc.

Weight reduction, increased energy efficiency and improved

diagnostic and control functionality are common preoccupations

across all of Hutchinson’s markets (e.g., automotive, aerospace,

defense, railways). Hutchinson designs innovative solutions to put

its customers ahead of the game, and transposes those solutions

between markets, adopting a cross-fertilization approach.

The offer of innovative products is a key aspect of research on

polymers. R&D draws on its knowledge of metallocenes and

4.3. Marketing & Services

4

.3.1. Marketing & Services

A new “Chemicals and biocomponent processes” department

shared by the Marketing & Services and Refining & Chemicals

segments opened in April 2016 on the Solaize site, with the aim of

using a predictive approach to design components derived from

renewable sources. This approach uses cheminformatics and

digital tools to simulate, model and predict how the components

will perform, in order to help chemists and formulators better

identify ideal chemical structures.

In 2016, the R&D activities of Marketing & Services continued to roll

out its new roadmap in line with its ambitions.

The roadmap features two focal points: reducing the environmental

footprint of products, particularly CO emissions, and increasing

2

energy efficiency by improving the durability of end users’

equipment. These are broken down into a number of areas: energy

savings for customers; competitive advantage and new solutions;

anticipation of changes in legislation; and incorporation of

biosourced molecules.

The “Fuel Economy” range of lubricants continues to expand with

many new products designed to comply with the specifications of

Registration Document 2016. TOTAL

45

Business overview

2

Research & Development

manufacturers targeted by the Total Lubricants business line in all

fields of application (automotive, marine and manufacturing). The

key work is focused on the design and incorporation of

breakthrough components in formulations. At the same time, more

fundamental work has been started to anticipate the issues that

manufacturers will face as a result of changes in engine technology

and legislation. New contracts have been won with strategic

manufacturers. In addition, the new marine lubricant for two-stroke

engines that run on fuels with sulfur contents of 0 to 3.5% has been

introduced onto the market. The International Maritime

4.3.2. New Energies

New Energies’ R&D efforts are focused, on the one hand, on the

solar value chain from silicon to photovoltaic electricity

management systems, and, on the other hand, on the development

of biotechnological methods of converting biomass into products of

interest to the Group’s markets.

In the field of solar energy, R&D is striving to improve SunPower’s⁽¹⁾

methods of producing cells and modules in order to drive down

costs while enhancing efficiency and reliability, with the aim of

maintaining the company’s global technological leadership and

tailoring its offering to the different application markets, from solar

farms to the residential sector. It is also preparing future generation

photovoltaic cells within the framework of several strategic

partnerships between TOTAL and renowned academic research

institutes. In particular, TOTAL is the founding partner of the Ile-de-

France Photovoltaic Institute, a research institute on the Paris-

Saclay campus that has reached critical mass and offers a very

high-quality technical platform and scientific support structure with

the ambitious aim of identifying breakthrough technologies to

produce highly efficient, low-cost panels.

Organization’s recent decision to limit the sulfur content of fuels to

0.5% by 2020 has led to the redefinition of marine lubricant

development programs.

Launched in 2015, the project to synthesize new molecules for

future generations of the “Total Excellium” fuel range is based on

the areas of chemicals, methods & measurements and

benchmarking. Alongside this, work to develop new products

tailored to specific local requirements has been finalized, mainly for

the African market.

In the field of refinery additives, research continued into

understanding and developing new additives to improve the

performance of distillates in cold temperatures.

Downstream in the solar value chain, R&D is monitoring the

development of low-cost stationary storage technologies. At the

same time, Saft Groupe’s R&D teams are focusing on improving

lithium-ion technologies, reducing costs and environmental impact,

and developing management systems. This last activity provides a

link to the R&D activities of New Energies, which is preparing

solutions for supplying solar power and associated services to

residential markets by developing software tools and algorithms for

the intelligent management of domestic electricity production and

consumption, and also by integrating and testing systems

combining photovoltaics, storage, control of demand as well as

pilots for assessing and improving systems and algorithms in

contact with customers.

With respect to bitumen, in order to meet the challenges of

competitiveness, sustainable logistics, Sustainable Development

and geographic expansion in the bitumen sector, researchers

mainly concentrated on the prospect of transporting bitumen in

solid form, establishing a program to reduce binder aging and

developing Styrelf formulas for the international market.

The new “Bio Life” range of special fluids derived from renewable

sources was put on the market. It is protected by several patent

applications covering the production methods and applications of

the fluids.

In Formula 1 racing, important work on understanding combustion

and lubrication phenomena, in conjunction with closer technical ties

with manufacturers, once again brought very significant

improvements in engine performance in 2016. As a result of this

collaboration, new skills have been acquired in-house that can be

used in other areas (e.g., production vehicles, electric engines).

With regard to biotechnologies, the Group is developing methods

for converting sugars into biofuels and molecules of interest for

chemicals, as well as processes for the deconstruction of

lignocellulose into sugars. To support its ambitions, the Group has

set up laboratories, including one research center specializing in

fermentation and another specializing in predictive approaches, a

cutting-edge technology for anticipating the properties of

components and providing a better response to future needs, with

unprecedented performance levels. To this end, TOTAL’s biotech

research team heads up a network of partners including academic

laboratories and start-ups in the United States and Europe.

The Group mainly works with Amyris⁽²⁾, a company specializing

in biotechnologies.

The Asia-Pacific Technical Center based in Mumbai, India,

increased its activities and skills, mainly in lubricants (particularly for

textiles and two-wheeled vehicles), special fluids (including drilling

fluids) and fuel additives.

The enlisting of French and international skills has increased in

recent years, with a growing number of ties to academia,

researchers seconded to universities in France, Italy, Switzerland

and the United States, and international researchers recruited. R&D

has also increased its activities relating to evaluating and selecting

external technologies and partners with shared interests (SMEs,

start-ups). These different approaches enhance the work necessary

for the guided design and development of breakthrough products

included in Marketing & Services’ objectives.

(

1) American company listed on NASDAQ in which the Group holds a 56.73% interest as of December 31, 2016.

(2) American company listed on NASDAQ in which the Group holds a 23.51% interest as of December 31, 2016.

46

TOTAL. Registration Document 2016

Business overview

Research & Development

2

4.4. Environment

Environmental issues are important throughout the Group and are

taken into account in all R&D projects. R&D’s effort is to manage

environmental risks more effectively, particularly with regard to:

– detection and reduction of discharges into the air and simulation

of their dispersal;

– prevention of soil contamination and regulatory compliance with

regard to historical aspects and the remediation of sites; and

–

water management, especially by reducing the use of water from

natural environments and lowering emissions in compliance with

local, national and international regulations;

–

changes in the Group’s different products and management of

their life cycle, in particular in compliance with the Registration,

Evaluation, Authorisation and Restriction of Chemicals regulation

–

reduction of greenhouse gas emissions by improving energy

(REACH).

efficiency and monitoring carbon capture, use and storage of CO

and the potential effects of CO on the natural environment;

2

4.5. R&D Organization

The Group intends to increase R&D in all of its segments through

cross-functional themes and technologies. Constant attention is

paid to R&D synergies between business segments.

to the Group’s R&D activities. Long-term partnerships with

universities and academic laboratories considered to be of strategic

importance in Europe, the United States, Japan and China, as well

as innovative small businesses, are part of the Group’s approach.

The Group has 18 R&D sites worldwide and has entered into

approximately 1,000 partner agreements with other industrial

groups and academic or highly specialized research institutes.

TOTAL also has a permanently renewed network of scientific

Each business segment is developing an active intellectual property

activity aimed at protecting its innovations, allowing its activity to

develop and promoting its technological assets among its partners.

In 2016, more than 200 patent applications were filed by the Group.

advisors worldwide that monitor and consult on matters of interest

Registration Document 2016. TOTAL

47

Business overview

2

Property, plant and equipment

5. Property, plant and equipment

The companies of the Group have freehold and leasehold interests

in over 130 countries throughout the world. Operations in

properties, oil and gas fields or any other industrial, commercial or

administrative facility, as well as the production capacities and

utilization rates of these facilities, are described in this chapter for

each business segment (Upstream, Refining & Chemicals and

Marketing & Services).

Minimum royalties from finance lease agreements regarding

properties, service stations, vessels and other equipment are

presented in Note 13 to the Consolidated Financial Statements

(point 7 of chapter 10).

Information about the objectives of the Company’s environmental

policy, in particular those related to the Group’s industrial sites or

facilities, is presented in chapter 7.

A summary of the Group’s property, plant and equipment and their

main related expenses (depreciation and impairment) is included

in Note 7 to the Consolidated Financial Statements (point 7 of

chapter 10).

48

TOTAL. Registration Document 2016

Business overview

Group organization

2

6. Group organization

6.1. Position of the Company within the Group

TOTAL S.A. is the Group’s parent company.

The Group’s businesses are organized in business segments, which receive assistance from the corporate functional divisions.

6.2. Company subsidiaries

A list of the major subsidiaries directly or indirectly held by the

Company included in TOTAL S.A.’s scope of consolidation is

presented in Note 18 to the Consolidated Financial Statements

The decision of TOTAL S.A.’s subsidiaries to declare dividends

is made by their relevant Shareholders’ Meetings and is subject

to the provisions of applicable local laws and regulations. As of

December 31, 2016, there is no restriction under such provisions

that would materially restrict the distribution to TOTAL S.A. of the

dividends declared by those subsidiaries.

(refer to point 7 of chapter 10).

As of December 31, 2016, there were 934 consolidated

companies, of which 839 were fully consolidated and 95 were

accounted for under the equity method. The principles of

consolidation are described in Note 1.1 to the Consolidated

Financial Statements.

During the fiscal year 2016, TOTAL S.A. acquired 100% of the

shares of Saft Group S.A. in August 2016 following a successful

voluntary takeover bid. TOTAL S.A. did not acquire any other stakes

in companies with registered offices in France representing more

than one twentieth, one tenth, one fifth, one third or one half of the

capital of these companies, nor took control of any such companies.

In addition, the table of subsidiaries and affiliates in point 5.1 of

chapter 12 presents the Company’s direct subsidiaries and

shareholdings, and in particular those with a gross value exceeding

1% of the Company’s share capital.

6.3. Group interests in publicly-traded companies

TOTAL holds stakes in a limited number of companies that issue

publicly-traded financial instruments in France or abroad. These

companies are mainly the Group’s financing vehicles (Total Capital,

Total Capital Canada Ltd., Total Capital International) or the operational

subsidiaries in its business segments, in particular in Africa, such as

TOTAL also holds a majority stake in SunPower (56.73% on

December 31, 2016), an American company listed on NASDAQ,

and minority interests in other companies, including PAO Novatek

(18.9% on December 31, 2016), a Russian company listed on the

Moscow Interbank Currency Exchange and the London Stock

Exchange.

Total Gabon⁽¹⁾

.

(1) Total Gabon is a company under Gabonese law, the shares of which are listed on Euronext Paris and owned by TOTAL (58.28%), the Republic of Gabon (25%) and the public (16.72%).

Registration Document 2016. TOTAL

49

Business overview

2

Organization chart as of January 1, 2016

7. Organization charts

50

TOTAL. Registration Document 2016

Business overview

Organization chart as of January 31, 2017

2

Registration Document 2016. TOTAL

51

52

TOTAL. Registration Document 2016

3.Rapport de gestion

2016 results and outlook

3

2

016 results and outlook

The items presented in points 1 to 3 were approved by the Board of Directors on February 8, 2017

and have not been updated with subsequent events.

1.

Summary of results and financial position

54

1.1.

1.2.

1.3.

1.4.

1.5.

1.6.

1.7.

Overview of the 2016 fiscal year for TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54

2016 Group results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55

Upstream segment results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56

Refining & Chemicals results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57

Marketing & Services results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57

TOTAL S.A. results in 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57

Proposed dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58

2.

Liquidity and capital resources

58

2.1.

2.2.

2.3.

2.4.

2.5.

Long-term and short-term capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58

Cash flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58

Borrowing requirements and funding structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59

External financing available . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59

Anticipated sources of financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59

3.

Trends and outlook

60

3

.1.

.2.

Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60

Risks and uncertainties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60

4.

Significant changes

60

Registration Document 2016. TOTAL

53

2016 results and outlook

3

Summary of results and financial position

1. Summary of results and financial position

1.1. Overview of the 2016 fiscal year for TOTAL

After falling from 100 $/b in 2014 to 52 $/b on average in 2015,

Brent prices were highly volatile in 2016, fluctuating between 27 $/b

and 58 $/b, with an average of 44 $/b for the year. In this difficult

environment, the Group demonstrated its resilience by generating

adjusted net income of $8.3 billion and had the highest profitability

among the majors due to the strength of its integrated model and

commitment of its teams to reduce the breakeven.

among the majors. Results from the Refining & Chemicals segment

were underpinned by the strong performance of its Asia and Middle

East integrated platforms, while Marketing & Services results were

driven by growth in retail and lubricants.

Financial discipline was successfully maintained across all business

segments both for investments ($18.3 billion including resource

acquisitions) and operating costs, with savings of $2.8 billion in

2016, exceeding the objective of $2.4 billion. Production costs were

reduced to 5.9 $/boe in 2016, compared to 9.9 $/boe in 2014.

The Group’s resilience was supported by outstanding production

growth over the past two years (14.3%, including 4.5% in 2016).

In the Upstream, the Group strengthened its position in the Middle

East by entering the Al Shaheen field in Qatar, and in the United

States with the acquisition of shale gas assets. The Group is

preparing future growth with the signing of major deals in Brazil

with Petrobras, in Uganda and in Iran on the giant South Pars 11

project. The Group renewed its reserves with a replacement rate

of 136% at constant prices and delivered promising exploration

results, with two major discoveries in the United States (North

Platte) and Nigeria (Owowo).

The $10 billion asset sale program is around 80% complete following

the closing of the Atotech sale, and this contributed to the Group’s

financial strength with a net-debt-to-equity ratio at 27%, lower than

it was in 2014.

In this context, the Board of Directors proposes to increase the dividend,

despite the volatility of hydrocarbon prices, to 2.45 €/share,

corresponding to a fourth quarter dividend of 0.62 €/share,

a 1.6% increase compared to the previous three quarterly dividends.

This demonstrates the Board’s confidence in the strength of the

Group’s results and balance sheet as well as its prospects for cash

flow growth.

Despite lower refining margins, the Downstream⁽¹⁾once again

achieved its objectives and thereby demonstrated that its results

are sustainable, with operating cash flow before working capital

changes of $7 billion⁽²⁾and ROACE⁽³⁾above 30%, the highest

(

1) Refining & Chemicals and Marketing & Services segments, excluding New Energies.

(2) Operating cash flow before working capital changes, previously referred to as adjusted cash flow from operations, is defined as cash flow from operating activities before changes in working

capital at replacement cost. Replacement cost is explained in Note 3 of the Consolidated Financial Statements (refer to point 7 of chapter 10).

3) Based on adjusted net operating income and average capital employed at replacement cost.

(

54

TOTAL. Registration Document 2016

2016 results and outlook

Summary of results and financial position

3

1.2. 2016 Group results

Consolidated data in millions of dollars, except for earnings per share, dividends, number of shares and percentages.

(M$)

2016

2015

2014

Sales

149,743

165,357

236,122

Adjusted operating income from business segments⁽^a⁾

Adjusted net operating income from business segments⁽^a⁾

8,928

9,420

12,672

11,362

21,604

14,247

Net income (Group share)

Adjusted net income (Group share)⁽^a⁾

6,196

8,287

5,087

10,518

4,244

12,837

Fully-diluted weighted-average shares (millions)

Adjusted fully-diluted earnings per share (dollars)⁽^a⁾⁽^b⁾

Dividend per share (euros)⁽^c⁾

2,390

3.38

2.45

2,304

4.51

2.44

2,281

5.63

2.44

Net-debt-to-equity ratio (as of December 31)

Return on average capital employed (ROACE)⁽^d⁾

Return on equity (ROE)

27.1%

7.5%

8.7%

28.3%

9.4%

11.5%

31.3%

11.1%

13.5%

Gross investments⁽^e⁾

Divestments

Net investments⁽^f⁾

Organic investments⁽^g⁾

Operating cash flow before working capital changes⁽^h⁾

Cash flow from operations

20,530

2,877

17,757

17,484

16,988

16,521

28,033

7,584

20,360

22,976

19,376

19,946

30,509

6,190

24,140

26,430

24,597

25,608

(

a) Adjusted results are defined as income at replacement cost, excluding non-recurring items and excluding the impact of fair value changes.

b) Based on fully-diluted weighted-average number of common shares outstanding during the period. In accordance with IFRS norms, adjusted fully-diluted earnings per share is

calculated from the adjusted net income less the perpetual subordinated bond coupon.

(

c) Dividend 2016 is subject to approval at the May 26, 2016 Annual Shareholders’ Meeting.

d) Based on adjusted net operating income and average capital employed at replacement cost.

e) Including investments and increase in non-current loans.

f) Net investments = gross investments – divestments – repayment of non-current loans – other operations with non-controlling interests.

g) Organic investments = net investments excluding acquisitions, asset sales and other operations with non-controlling interests.

h) Operating cash flow before working capital changes, previously referred to as adjusted cash flow from operations, is defined as cash flow from operating activities before changes in

working capital at replacement cost. Replacement cost is explained in Note 3 of the Consolidated Financial Statements (refer to point 7 of chapter 10).

Market environment

2016

2015

2014

Exchange rate €-$

Brent ($/b)

European Refinery Margin Indicator (ERMI)⁽^a⁾($/t)

1.11

43.7

34.1

1.11

52.4

48.5

1.33

99.0

18.7

(

a) ERMI is a Group indicator intended to represent the margin after variable costs for a hypothetical complex refinery located around Rotterdam in Northern Europe. The indicator margin

may not be representative of the actual margins achieved by TOTAL in any period because of TOTAL’s particular refinery configurations, product mix effects or other Company-specific

operating conditions.

Adjustments to net income⁽^a⁾(Group share) (M$)

2016

2015

2014

Special items affecting net income (Group share)

Gain (loss) on asset sales

(2,567)

267

(4,675)

1,810

(72)

(6,165)

1,209

(20)

Restructuring charges

(32)

Impairments

(2,097)

(705)

(3)

(5,447)

(966)

(9)

(7,063)

(291)

Other

Effect of changes in fair value

After-tax inventory effect (FIFO vs. replacement cost)⁽^b⁾

25

(2,453)

479

(747)

Total adjustments affecting net income (Group share)

(2,091)

(5,431)

(8,593)

(

a) For details on adjustments to operational income, refer to Note 3C of the Consolidated Financial Statements.

b) Refer to Note 5.4.1 of the Consolidated Financial Statements.

1.2.1. Sales

1.2.2. Operating income from business segments

Consolidated sales in 2016 were $149,743 million compared

to $165,357 million in 2015, a decrease of 9%. The decrease in

hydrocarbon prices and refining margins were partially offset by

production growth and strong results for petrochemicals.

The average Brent price was 44 $/b in 2016, a 17% decrease over

one year. The Group’s European Refining Margin Indicator (“ERMI”)

was 34 $/t in 2016, a 30% decrease compared to the high levels in

2015, in the context of high petroleum product stocks. The environment

for petrochemicals remained favorable. The euro remained stable

compared to the U.S. dollar, at 1.11 $/€ on average in 2016.

Registration Document 2016. TOTAL

55

2016 results and outlook

3

Summary of results and financial position

Given this less favorable environment than in 2015, adjusted net

operating income from the business segments was $9,420 million

in 2016, a decrease of 17% over one year.

The number of fully-diluted shares was 2,436 million on December 31,

2016, compared to 2,336 million on December 31, 2015.

1

.2.4. Investments – divestments

The effective tax rate⁽¹⁾for the business segments was 25.8%

in 2016 compared to 33.9% in 2015, due to the relative weight

and lower tax rates in the Upstream in a lower hydrocarbon price

environment.

Asset sales were $1,864 million in 2016, mainly comprised of the

sale of a 15% interest in the Gina Krog field in Norway, the FUKA gas

pipeline network in the North Sea and the retail network in Turkey.

Acquisitions, including resource acquisitions were $2,033 million in

1.2.3. Net income (Group share)

2016, mainly comprised of the additional 75% interest in the Barnett

Adjusted net income was $8,287 million in 2016 compared

to $10,518 million in 2015, a decrease of 21%. Adjusted net income

excludes the after-tax inventory effect, special items and the effect

of changes in fair value.

shale gas field in the United States, and the acquisitions of Saft

Groupe, Lampiris and a retail network in the Dominican Republic.

Resource acquisitions were $780 million in 2016, comprised mainly

of the additional 75% interest in the Barnett shale gas field in the

United States. These acquisitions, at a cost of less than one dollar

per barrel, enabled the Group to achieve its objective of adding

one billion barrels of resources in 2016. Organic investments and

resource acquisitions were $18,264 million in 2016.

Adjustment items had a negative impact on net income of $2,091 million

in 2016, mainly due to the inventory effect and impairments

on Gladstone LNG in Australia, Angola LNG, and Laggan-Tormore

in the United Kingdom, reflecting the decrease in gas price

assumptions for the coming years.

1

.2.5. Profitability

Given these items, net income (Group share) was $6,196 million

in 2016 compared to $5,087 million in 2015, a 22% increase.

In 2016, the ROACE⁽²⁾was 7.5% and the ROE⁽³⁾was 8.7%.

Adjusted fully-diluted earnings per share, based on 2,390 million

fully-diluted weighted-average shares, was $3.38 in 2016

compared to $4.51 in 2015.

1.3. Upstream segment results

Environment

liquids and gas price realizations⁽^a⁾

Results

(M$)

2016 2015 2014

2016

2015

2014

Brent ($/b)

43.7

40.3

3.56

31.9

52.4

47.4

4.75

39.2

99.0

89.4

6.57

66.2

Adjusted operating income

Adjusted net operating income

Cash flow from operations

Operating cash flow before

working capital changes

Investments

2,737

3,633

9,675

4,925 17,156

4,774 10,504

11,182 16,666

Average liquids price ($/b)

Average gas price ($/Mbtu)

Average hydrocarbon price ($/boe)

9,912

16,035

2,331

11,179 18,667

24,270 26,520

(a) Consolidated subsidiaries, excluding fixed margins.

Market conditions were less favorable in 2016 compared to 2015.

The average realized price of liquids decreased by 15% and the

average realized gas price by 25%.

Divestments

Organic investments

3,215

5,764

14,316

20,508 22,959

Upstream adjusted net operating income was $3,633 million in 2016,

a decrease of 24% compared to 2015. The increase in production

combined with the decrease in operating costs as well as the lower

effective tax rate partially offset the impact of lower hydrocarbon prices.

Hydrocarbon production

2016 2015 2014

Liquids (kb/d)

Gas (Mcf/d)

Combined production (kboe/d)

1,271

1,237 1,034

6,054 6,063

2,347 2,146

6,447

2,452

Technical costs for consolidated subsidiaries, calculated in accordance

with ASC 932⁽⁴⁾, were reduced to 20.4 $/boe in 2016 compared to

In 2016, hydrocarbon production was 2,452 kboe/d, an increase

of 4.5% compared to 2015, due to the following:

23.0 $/boe in 2015. This decrease was essentially due to the reduction

in operating costs from 7.4 $/boe in 2015 to 5.9 $/boe in 2016.

•

+6% due to new start ups and ramp ups, notably Laggan-Tormore,

Surmont Phase 2, Termokarstovoye, Gladstone LNG, Moho

Phase 1b, Vega Pleyade and Incahuasi;

•

-1.5% due to the security situation in Nigeria and Yemen, and

wild fires in Canada;

natural field decline was offset by PSC price effect and portfolio

effects.

(

1) Defined as: (tax on adjusted net operating income)/(adjusted net operating income – income from equity affiliates – dividends received from investments – impairment of goodwill + tax on adjusted

net operating income).

2) Based on adjusted net operating income and average capital employed at replacement cost.

3) Based on adjusted net income and adjusted shareholders’ equity for the period.

(

(4) FASB Accounting Standards Codification Topic 932, Extractive industries – Oil and Gas.

56

TOTAL. Registration Document 2016

2016 results and outlook

Summary of results and financial position

3

1.4. Refining & Chemicals results

Operational data⁽^a⁾

2016

2015

2014

Total refinery throughput (kb/d)

1,965

2,023

1,775

(

a) Includes share of TotalErg, as well as refineries in Africa and the French Antilles that are reported in the Marketing & Services segment. The condensate splitters at Port Arthur and Daesan

are also included and 2015 figures have been restated accordingly.

Refinery throughput decreased by 3% for the full-year 2016 compared to 2015, notably due to shutdowns in Europe and the United States

in the second quarter and the sale of the Schwedt refinery in Germany.

Results (M$)

2016

2015

2014

Adjusted operating income

Adjusted net operating income

including specialty chemicals

4,373

4,201

581

5,649

4,889

496

2,739

2,489

629

Investments

Divestments

1,849

86

1,843

3,488

2,022

192

Organic investments

1,636

827

1,944

Operating cash flow before working capital changes

Cash flow from operations

4,878

4,587

5,785

6,432

4,028

6,302

Refining & Chemicals adjusted net operating income was $4,201 million in 2016, a decrease of 14% compared to 2015, essentially due to

the decrease in refining margins. Petrochemicals continued to generate good results, notably due to the strong contribution from the

Group’s major integrated platforms in Asia and the Middle East.

1.5. Marketing & Services results

Operational data⁽^a⁾

2016

2015

2014

Refined products sales (kb/d)

1,793

1,818

1,769

(a) Excludes trading and bulk Refining sales, includes share of TotalErg.

In 2016, refined product sales decreased slightly compared to 2015, essentially due to the sale of the retail network in Turkey. Excluding

portfolio effects, retail network sales increased by around 4%. Sales of land-based lubricants also increased by around 4%.

Results (M$)

2016

2015

2014

Sales

69,421

1,818

1,586

26

77,887

2,098

1,699

108

106,509

1,709

1,254

10

Adjusted operating income

Adjusted net operating income

including New Energies

Investments

Divestments

2,506

446

1,841

856

1,818

163

Organic investments

1,432

1,569

1,424

Operating cash flow before working capital changes

Cash flow from operations

1,831

1,623

2,065

2,323

2,016

2,721

Marketing & Services adjusted net operating income was $1,586 million in 2016, a 7% decrease compared to 2015. Excluding New Energies,

which was particularly high in 2015 due to the delivery of the Quinto solar farm in the United States, net operating income was stable despite

asset sales (retail network in Turkey).

1.6. TOTAL S.A. results in 2016

Net income for TOTAL S.A., the parent company, was €4,142 million in 2016 compared to €11,067 million in 2015. During 2015, a strong volume

of dividends was paid by affiliates of TOTAL S.A. to the parent company.

Registration Document 2016. TOTAL

57

2016 results and outlook

3

Summary of results and financial position. Liquidity and capital resources

1.7. Proposed dividend

The Board of Directors met on February 8, 2017 and decided to

propose to the Combined Shareholders’ Meeting, which will be held

on May 26, 2017, an annual dividend of 2.45 €/share for 2016, an

increase compared to 2015. Given the three previous 2016 interim

quarterly dividends of 0.61 €/share, a fourth quarter 2016 dividend

of 0.62 €/share is therefore proposed, representing an increase of

The Board of Directors also decided to propose to the Combined

Shareholders’ Meeting the alternative for shareholders to receive

the fourth quarter 2016 dividend in cash or in new shares of the

Company with a discount that will be set between 0% and 10%.

Subject to approval at the Combined Shareholders’ Meeting, the

ex-dividend date for the fourth quarter dividend will be June 5, 2017,

and the payment of the dividend in cash or the delivery of the shares

issued in lieu of the dividend in cash is set for June 22, 2017.

1.6% compared to the previous three interim dividends.

2. Liquidity and capital resources

2.1. Long-term and short-term capital

Long-term capital

As of December 31, (M$)

2016

2015

2014

Adjusted shareholders’ equity⁽^a⁾

Non-current financial debt

Hedging instruments of non-current financial debt

99,993

43,067

(908)

93,864

44,464

(1,219)

91,845

45,481

(1,319)

Total net non-current capital

142,152

137,109

136,007

(a) Based on a 2016 estimated dividend of €2.45 per share.

Short-term capital

As of December 31, (M$)

2016

2015

2014

Current financial debt

Net current financial assets

13,920

(4,221)

12,488

(6,019)

10,942

(1,113)

Net current financial debt

9,699

6,469

9,829

Cash and cash equivalents

(24,597)

(23,269)

(25,181)

2.2. Cash flow

(M$)

2016

2015

2014

Cash flow from operating activities

Investments

Divestments

16,521

(20,530)

2,877

19,946

(28,033)

7,584

89

25,608

(30,509)

6,190

Other transactions with non-controlling interests

(104)

179

Net cash flow⁽^a⁾

(1,236)

(414)

(1,468)

Dividends paid

Share buybacks

(2,754)

0

(2,945)

(237)

(7,462)

(289)

Net-debt-to-equity ratio at December 31

27%

28%

31%

(a) Net cash flow = cash flow from operating activities before working capital changes at replacement cost – net investments (including other transactions with non-controlling interests).

The Group’s net cash flow was -$1,236 million in 2016 compared

to -$414 million in 2015. This change is essentially due to the decrease

in cash flow from operations as a result of lower hydrocarbon prices

and refining margins, partially offset by the 15% decrease in net

investments. The Group confirms its financial strength with a

net-debt-to-equity ratio of 27% at end 2016, a decrease compared

to 28% at end 2015.

58

TOTAL. Registration Document 2016

2016 results and outlook

Liquidity and capital resources

3

2.3. Borrowing requirements and funding structure

The Group’s policy consists of incurring long-term debt at a floating

rate or at a fixed rate depending on the interest rates at the time of

issue. Debt is incurred in dollars or euros depending on the Group’s

general corporate needs. Long-term interest rate and currency swaps

may be used to hedge bonds at their issuance in order to create

a variable or fixed rate synthetic debt. In order to partially modify

the interest rate structure of long-term debt, TOTAL may also enter

into long-term interest rate swaps.

In accordance with IAS 32 provisions “Financial instruments -

presentation”, given the nature of these notes, they have been

recognized in the accounts as equity.

Furthermore, on November 25, 2015, TOTAL S.A. issued a $1.2 billion

bond combining cash-settled convertible bonds indexed to TOTAL’s

share performance and the purchase of stock options to hedge the

risk of additional costs related to this indexation. This combination

creates a non-dilutive synthetic instrument equivalent to a standard

bond. At maturity, all transactions are made in cash and limited

to the nominal amount.

The non-current financial debt is generally raised by the corporate

treasury entities either directly in dollars or euros or in other currencies

which are then exchanged for dollars or euros through swap issues

to appropriately match general corporate needs.

The Group has established standards for market transactions under

which bank counterparties must be approved in advance, based on

an assessment of the counterparty’s financial soundness (multi-criteria

analysis including a review of the market capitalization and of the Credit

Default Swap (CDS), its ratings with Standard & Poor’s and Moody’s,

which must be of high quality, and its overall financial condition).

As of December 31, 2016, the Group’s long-term debt, after taking

into account the effect of currency and interest rate swaps, was 95%

in dollars and 72% at floating rates. In 2015, these ratios were 93%

and 82% respectively.

In addition to its bond issuance programs, in 2015 and 2016

TOTAL S.A. issued perpetual subordinated notes in several tranches:

An overall authorized credit limit is set for each bank and is allocated

among the subsidiaries and the Group’s central treasury entities

according to their needs.

–

February 19, 2015, €5 billion in two tranches;

May 11, 2016, €1.75 billion in one tranche; and

September 29, 2016, €2.5 billion in two tranches.

To reduce the market values risk on its commitments, in particular

for swaps set as part of bonds issuance, the Group also entered

into margin call contracts with its significant counterparties.

2.4. External financing available

As of December 31, 2016, the aggregate amount of the major

confirmed credit facilities granted by international banks to the

Group’s companies (including TOTAL S.A.) was $11,164 million

The agreements for the lines of credit granted to TOTAL S.A. do not

contain conditions related to the Company’s financial ratios, to its

financial ratings from specialized agencies, or to the occurrence of

events that could have a material adverse effect on its financial position.

(compared to $11,225 million on December 31, 2015), of

which $10,724 million were unused (compared to $11,225 million

unused on December 31, 2015).

Credit facilities granted to Group companies other than TOTAL S.A.

are not intended to finance the Group’s general needs; they are

intended to finance either the general needs of the borrowing

affiliate or a specific project.

TOTAL S.A. has confirmed lines of credit granted by international

banks, which are calculated to allow it to manage its short-term

liquidity needs as required. As of December 31, 2016, these credit

facilities amounted to $10,076 million (compared to $10,675 million

on December 31, 2015), of which $10,076 million were unused

As of December 31, 2016, no restrictions applied to the use

of the Group companies’ capital (including TOTAL S.A.) that could

significantly impact the Group’s activities, directly or indirectly.

(compared to $10,675 million unused on December 31, 2015).

2.5. Anticipated sources of financing

Investments, working capital and dividend payments are financed

essentially by cash flow from operations, asset disposals and,

if necessary, by net borrowings.

For the coming years and based on the current financing conditions,

the Company intends to maintain this method of financing the Group’s

investments and activities.

Registration Document 2016. TOTAL

59

2016 results and outlook

3

Trends and outlook. Significant changes

3. Trends and outlook

3.1. Outlook

Brent increased following the announced production cuts agreed

by OPEC and non-OPEC countries, including Russia. However,

inventory levels are high and prices are likely to remain volatile.

In this context, the Group is continuing to cut costs with the objective

of achieving $3.5 billion of cost savings in 2017 and bringing

production costs down to 5.5 $/boe for the year. Investments

are moving into the sustainable range needed to deliver profitable

future growth and are expected to be between $16 and $17 billion

in 2017 including resource acquisitions.

In 2017, the Downstream is expected to continue generating stable

operating cash flow before working capital changes of around $7 billion

thanks to its diverse portfolio of activities. Refining & Chemicals’

performance has been strengthened by the restructuring and the

segment will continue to benefit from the quality of its integrated

platforms, notably in Antwerp, in the United States, in Asia and in

the Middle East. The final investment decision to launch the Port Arthur

side-cracker is expected to be made in 2017. The Marketing & Services

segment is pursuing its cash generation growth strategy by leveraging

its strong position in high-potential retail and lubricant markets.

In the Upstream, production is set to grow by more than 4% in 2017,

supporting the objective of increasing production on average by 5%

per year from 2014 to 2020. As a result of this growth, the sensitivity

of the portfolio to Brent increases to $2.5 billion for a 10 $/b change

in Brent in 2017. The Group plans to take advantage of the favorable

cost environment by launching around 10 projects over the next

In 2017, the Group expects its breakeven will continue to fall,

reaching less than 40 $/b pre-dividend. Cash flow from operations

is expected to cover investments and the cash portion of the

dividend at 50 $/b. TOTAL confirms its medium-term objective

to achieve a net-debt-to-equity ratio of 20%.

18 months and adding attractive resources to the portfolio.

The Group is committed to maintaining attractive returns for its

shareholders and will eliminate the discount on the scrip dividend

with Brent at 60 $/b.

3.2. Risks and uncertainties

Due to the nature of its business, the Group’s activities remain

subject to the usual market risks (sensitivity to the environmental

parameters of the oil and financial markets), industrial and environmental

risks related to its operations, and to political or geopolitical risks

stemming from the global presence of most of its activities.

Detailed information is given in the Risk Factors section (point 1 of

chapter 4) of this Registration Document. For more information,

also refer to the Chairman’s report in point 4 of chapter 4.

4. Significant changes

Except for the events mentioned above in the Management Report

chapter 3), in the Business overview (chapter 2), and in the description

of legal and arbitration procedures (point 2 of chapter 4), no significant

changes to the Group’s financial or commercial situation have occurred

since December 31, 2016, the end of the last fiscal year for which

audited financial statements have been published by the Company.

(

60

TOTAL. Registration Document 2016

4.Facteurs de risques

Risks and control

4

Risks and control

1.

Risk Factors

62

1.1.

1.2.

1.3.

1.4.

1.5.

1.6.

1.7.

1.8.

1.9.

Risks related to market environment and other financial risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62

Industrial and environmental risks and risks related to climate issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63

Risks related to critical IT systems security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65

Risks related to the development of major projects and reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65

Risks related to equity affiliates and management of assets operated by third parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66

Risks related to political or economic factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67

Risks related to competition and lack of innovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68

Ethical misconduct and non-compliance risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68

Countries targeted by economic sanctions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69

2

.

Legal and arbitration proceedings

Insurance and risk management

73

75

3

3.1.

3.2.

3.3.

Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75

Risk and insurance management policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75

Insurance policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75

4.

Internal control and risk management procedures

(Article L. 225-37 of the French Commercial Code)

76

4.1.

4.2.

4.3.

Basic elements of internal control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76

Control environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .77

Risk assessment and management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .78

5.

Statutory auditors’ report

(Article L. 225-235 of the French commercial code)

83

Registration Document 2016. TOTAL

61

Risks and control

4

Risk Factors

1. Risk Factors

The Group conducts its activities in an ever-changing environment

and is exposed to risks that, if they were to occur, could have a

material adverse effect on its business, financial condition, including

its operating income and cash flow, reputation or outlook.

not be aware of other risks that could, or other risks may not have

been considered by the Group as being likely to, have a material

adverse impact on the Group, its business, financial condition,

including its operating income and cash flow, reputation or outlook.

The Group employs a continuous process of identifying and

analyzing risks in order to determine those that could prevent it

from achieving its objectives. This chapter presents the significant

risks to which the Group believes it is exposed as of the date of this

Registration Document. However, as of such date, the Group may

The main internal control and risk management procedures, which

are part of the report of the Chairman of the Board of Directors

prepared pursuant to Article L. 225-37 of the French Commercial

Code, are described in point 4 of this chapter.

1.1. Risks related to market environment and other financial risks

The financial performance of TOTAL is sensitive to a number of

market environmentrelated factors, the most significant being

hydrocarbon prices, refining margins and exchange rates.

The impact of changes in crude oil and gas prices on downstream

operations depends upon the speed at which the prices of finished

products adjust to reflect these changes. The Group estimates that

a decrease in its European Refining Margin Indicator (“ERMI”)

of $10 per ton would decrease annual adjusted net operating

income by approximately $0.5 billion and cash flow from operations

by approximately $0.6 billion. Conversely, an increase in its ERMI

of $10 per ton would increase annual adjusted net operating

income by approximately $0.5 billion and cash flow from operations

by approximately $0.6 billion.

Generally, a decline in hydrocarbon prices has a negative effect on

the Group’s results due to a decrease in revenues from oil and gas

production. Conversely, a rise in hydrocarbon prices increases the

Group’s results.

In 2016, crude oil prices reached their lowest point in January and

then strengthened progressively, notably due to the OPEC/non-

OPEC agreement concluded in November 2016, while remaining

low. The market remains highly volatile.

All of the Group’s activities are, for various reasons and to varying

degrees, sensitive to fluctuations in the dollar/euro exchange rate.

The Group estimates that a decrease of $0.10 per euro

(strengthening of the dollar versus the euro) would increase

adjusted net operating income by approximately $0.1 billion and

have a limited impact on cash flow from operations. Conversely, an

increase of $0.10 per euro (weakening of the dollar versus the euro)

would decrease adjusted net operating income by approximately

$0.1 billion and have a limited impact on cash flow from operations.

For the year 2017, according to the scenarios retained below, the

Group estimates that an increase of $10 per barrel in the price of

Brent crude would increase annual adjusted net operating income⁽

by approximately $2 billion and cash flow from operations by

approximately $2.5 billion. Conversely, a decrease of $10 per barrel

in the price of Brent crude would decrease annual adjusted net

operating income by approximately $2 billion and cash flow from

operations by approximately $2.5 billion.

1)

Market impact

environment 2017⁽^a⁾

Scenario

retained

Change

Estimated impact

on adjusted net

operating income

Estimated impact

on cash flow

from operations

Brent

50 $/b

35 $/t

1.1 $/€

+10 $/b

-10 $/t

-0.1 $ per €

+2 B$

-0.5 B$

+0.1 B$

+2.5 B$

-0.6 B$

≈0 B$

European Refining Margin Indicator (ERMI)

$/€

(

a) Sensitivities revised once per year upon publication of the previous year’s fourth quarter results. Indicated sensitivities are approximate and based upon TOTAL’s current view of its 2017

portfolio. Results may differ significantly from the estimates implied by the application of these sensitivities. The impact of the $/€ sensitivity on adjusted net operating income is

primarily attributable to the Refining & Chemicals segment.

In addition to the adverse effect on the Group’s revenues,

margins and profitability, a prolonged period of low oil and

natural gas prices could lead the Group to review its projects

and the evaluation of its assets and oil and natural gas reserves.

– the ability of the Organization of the Petroleum Exporting

Countries (OPEC) and other producing nations to influence global

production levels and prices;

– prices of unconventional energies as well as evolving approaches

for developing oil sands and shale oil, which may affect the

Group’s realized prices, notably under its long-term gas sales

contracts and asset valuations, particularly in North America;

– cost and availability of new technology;

Prices for oil and natural gas may fluctuate widely due to many

factors over which TOTAL has no control. These factors include:

–

variations in global and regional supply of and demand for energy;

global and regional economic and political developments in

natural resource-producing regions, particularly in the Middle

East, Africa and South America, as well as in Russia;

– regulations and governmental actions;

– global economic and financial market conditions;

(1) Adjusted results are defined as income at replacement cost, excluding non-recurring items and the impact of fair value changes.

62

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4

–

the security situation in certain regions, the magnitude of

international terrorist threats, war or other conflicts;

changes in demographics, including population growth rates and

consumer preferences; and

adverse weather conditions that can disrupt supplies or interrupt

operations of the Group’s facilities.

partially offset by the results of the Refining & Chemicals segment.

During 2016, the Group’s refining margins, while remaining at a

good level, fluctuated throughout the year. In 2017, there can be no

assurance that the Group’s refining margins will remain at such level.

The activities of Trading & Shipping (oil, gas and power trading and

shipping activities) are particularly sensitive to market risk and more

specifically to price risk as a consequence of the volatility of oil and

gas prices, to liquidity risk (inability to buy or sell cargoes at market

prices) and to counterparty risk (when a counterparty does not fulfill

its contractual obligations). The Group uses various energy

derivative instruments and freight-rates instruments to adjust its

exposure to price fluctuations of crude oil, petroleum products,

natural gas, power and freight-rates. Although TOTAL believes it

has established appropriate risk management procedures, large

market fluctuations may adversely affect the Group’s activities and

financial condition, including its operating income and cash flow.

Prolonged periods of low oil and natural gas prices may reduce the

economic viability of projects in production or in development, and

reduce the Group’s liquidity, thereby decreasing its ability to finance

capital expenditures and/or causing it to cancel or postpone

investment projects.

If TOTAL were unable to finance its investment projects, the

Group’s opportunities for future revenue and profitability growth

would be reduced, which could materially impact the Group’s

financial condition, including its operating income and cash flow.

Prolonged periods of low oil and natural gas prices may reduce the

Group’s reported reserves and cause the Group to revise the price

assumptions upon which asset impairment tests are based that

could have a significant adverse effect on the Group’s results in the

period in which it occurs. For additional information on impairments

recognized on the Group’s assets, refer to Note 3 to the

For more detailed information on the impact of the lower oil and gas

prices on the Group’s 2016 results, financial condition (including

impairments, significant reductions to capital expenditures and

operating costs, and divestments completed under the Group’s

asset sale program) and outlook, refer to chapter 3.

Consolidated Financial Statements (point 7 of chapter 10).

TOTAL is exposed to other financial risks related to its

financing and cash management activities.

Conversely, in a high oil and gas price environment, the Group can

experience significant increases in cost and government take, and,

under some production-sharing contracts, the Group’s production

rights could be reduced. Higher prices can also reduce demand for

the Group’s products.

The Group is exposed to changes in interest rates and foreign

exchange rates. Even though the Group generally seeks to

minimize the currency exposure of each entity to its functional

currency (primarily the dollar, the euro, the pound sterling and the

Norwegian krone), the Group’s financial condition, including its

operating income and cash flow, could be impacted by a significant

change in the value of these currencies. In addition, as TOTAL

mostly turns to financial markets for its financing, its financial

condition and operations could be materially impacted if access to

those markets were to become more difficult. For further

information on financial risks, refer to Notes 15 and 16 to the

Consolidated Financial Statements (point 7 of chapter 10).

The Group’s earnings from its Refining & Chemicals and

Marketing & Services segments are primarily dependent upon the

supply and demand for petroleum products and the associated

margins on sales of these products, with the impact of changes in

oil and gas prices on earnings on these segments being dependent

upon the speed at which the prices of petroleum products adjust to

reflect movements in oil and gas prices. In 2016, the negative

effects of lower oil and gas prices on the Group’s results were

1.2. Industrial and environmental risks and risks related to climate issues

TOTAL is exposed to risks related to the safety and security of

its operations.

operations, which can cause blow outs, explosions, fires or other

damage, in particular to the environment, and lead to a disruption

of the Group’s operations or reduce its production. In addition to

the risks of explosions and fires, the activities of the

Refining & Chemicals and Marketing & Services business segments

entail risks related to the overall life cycle of the products

manufactured, as well as the materials used. With regard to

transportation, the likelihood of an operational accident depends

not only on the hazardous nature of the products transported, but

also on the volumes involved and the sensitivity of the regions

through which they are transported (quality of infrastructure,

population density, environmental considerations).

The Group’s activities involve a wide range of operational risks,

such as explosions, fires, accidents, equipment failures, leakage of

toxic products, emissions or discharges into the air, water or soil,

that can potentially cause death or injury, or impact natural

resources and ecosystems.

The industrial event that could have the most significant impact is a

major industrial accident, e.g., blow out, explosion, fire, leakage of

highly toxic products or massive leakage, resulting in death or injury

and/or accidental pollution on a large-scale or at an environmentally

sensitive site.

TOTAL’s workforce and the public are exposed to risks inherent to

the Group’s operations, which could lead to legal proceedings

against the Group’s entities and legal representatives, notably in

cases of death, injury and property and environmental damage.

Such proceedings could also damage the Group’s reputation. In

addition, like most industrial groups, TOTAL is affected by reports of

occupational illnesses, particularly those caused by past exposure

of Group employees to asbestos.

Acts of terrorism or malicious acts against the Group’s employees,

plants, sites, pipelines and transportation or computer systems

could also disrupt the Group’s business activities and could cause

harm or damage to people, property and the environment.

Certain activities of the Group face specific additional risks. TOTAL’s

Upstream segment is exposed to risks related to the physical

characteristics of oil and gas fields, particularly during drilling

Registration Document 2016. TOTAL

63

Risks and control

4

Risk Factors

To manage the operational risks to which it is exposed, the Group

has adopted a preventive and remedial approach by putting in

place centralized HSE (healty, safety and environment) and security

management systems that seek to take all necessary measures to

reduce the related risks (refer to point 4.3.1 of this chapter). In

addition, the Group maintains worldwide third-party liability

insurance coverage for all its subsidiaries. TOTAL also has

insurance to protect against the risk of damage to Group property

and/or business interruption at its main refining and petrochemical

sites. TOTAL’s insurance and risk management policies are

described in point 3 of this chapter. However, the Group is not

insured against all potential risks. In certain cases, such as a major

environmental disaster, TOTAL’s liability may exceed the maximum

coverage provided by its third-party liability insurance. The Group

cannot guarantee that it will not suffer any uninsured loss and there

can be no guarantee, particularly in the event of a major environmental

disaster or industrial accident, that such loss would not have a

material adverse effect on the Group’s financial condition, including

its operating income and cash flow, and its reputation.

The introduction of new laws and regulations could compel the

Group to curtail, modify or cease certain operations or implement

temporary shutdowns of facilities, which could diminish its productivity

and have a material adverse impact on its financial condition.

Moreover, most of the Group’s activities will eventually, at site

closure, require decommissioning followed by environmental

remediation after operations are discontinued, in compliance with

applicable regulations. Costs related to such activities may

materially exceed the Group’s provisions and adversely impact its

operating results. With regard to the permanent shutdown of an

activity, the Group’s environmental contingencies and asset

retirement obligations are addressed in the “Asset retirement

obligations” and “Provisions for environmental contingencies”

sections of the Group’s consolidated balance sheet (refer to Note

1

2 to the Consolidated Financial Statements, point 7 of chapter

0). Future expenditures related to asset retirement obligations are

accounted for in accordance with the accounting principles

described in the same Note.

Laws and regulations related to climate change may adversely

affect the Group’s business and financial condition.

Crisis management systems are necessary to effectively

respond to emergencies, avoid potential disruptions to

TOTAL’s business and operations and minimize impacts on

third parties or the environment.

Growing public concern over greenhouse gas (“GHG”) emissions

and climate change, which notably led to the signature of the Paris

Agreement on December 12, 2015 as part of the United Nations

Climate Change Conference (COP 21), is likely to continue to lead

to further regulation in these areas. These additional regulatory

requirements could lead the Group to curtail, change or cease

certain of its operations, and submit the Group’s facilities to

additional compliance obligations, which could adversely affect the

Group’s businesses and financial condition, including its operating

income and cash flow.

TOTAL has crisis management plans in place to deal with emergencies

(refer to point 4 of this chapter). However, these plans cannot exclude

the risk that the Group’s business and operations may be severely

disrupted in a crisis situation or ensure the absence of impacts on

third parties or the environment. TOTAL has also implemented

business continuity plans to continue or resume operations

following a shutdown or incident. An inability for the Group to

resume its activities in a timely manner could prolong the impact of

any disruption and thus could have a material adverse effect on its

financial condition, including its operating income and cash flow.

Regulations designed to gradually limit fossil fuel use may,

depending on the GHG emission limits and time horizons set,

negatively and significantly affect the development of projects, as

well as the economic value of certain of the Group’s assets. Internal

TOTAL is subject to increasingly stringent environmental,

health and safety laws and regulations in numerous countries

and may incur material related compliance costs.

studies conducted by TOTAL have shown that a long term CO

2

price of $40/t⁽¹⁾applied worldwide would have an impact of around

5% on the discounted present value of the Group’s assets

The Group’s activities are subject to numerous laws and regulations

pertaining to the environment, health and safety. In most countries

where the Group operates, particularly in Europe and the United

States, sites and products are subject to increasingly strict laws

governing the protection of the environment (e.g., water, air, soil,

noise, protection of nature, waste management, impact assessments),

health (e.g., occupational safety, chemical product risk), and the

safety of personnel and residents.

(2)

(upstream and downstream) . In response to these possible

developments, natural gas, which is the fossil energy that emits the

least amount of GHG, represented nearly 48% of TOTAL’s

production in 2016, compared to approximately 35% in 2005, and

the Group’s objective is to grow this percentage over the long term

with the expected growth of gas markets. In addition, the Group

ceased its coal production activities and is developing its activities

in the realms of solar energy production and energy from biomass

Product quality and consumer protection are also subject to

increasingly strict regulations. The Group’s entities ensure that their

products meet applicable specifications and abide by all applicable

consumer protection laws. Failure to do so could lead to personal

injury, property damage, environmental harm and loss of customers,

which could negatively impact the Group’s financial condition,

including its operating income and cash flow, and its reputation.

(renewable energies).

In Europe, the regulations concerning the market for CO

2

emission

allowances, the EU Emissions Trading System (EU-ETS), entered a

third phase on January 1, 2013. This phase marks the end of the

overall free allocation of emission allowances: certain emissions,

such as those related to electricity production, no longer benefit

from free allowances, while for others free allowances have been

significantly reduced. Free allocations are now established based

on the emission level of the top-performing plants (i.e., the least

GHG-emitting) within the same sector (“top 10 benchmark”).

Lower-performing plants must purchase, at market price, the

TOTAL incurs, and will continue to incur, substantial expenditures to

comply with increasingly complex laws and regulations aimed at

protecting health, safety and the environment. Such expenditures

could have a material adverse effect on the Group’s financial condition.

(

1) As from 2021 or the current price in a given country.

(2) Sensitivity calculated for a crude oil price of $60/80/b compared to a reference scenario that takes into account a CO price in the regions already covered by a carbon pricing system.

2

64

TOTAL. Registration Document 2016

Risks and control

Risk Factors

4

necessary allowances to cover their emissions over these free

allocations. The plants also need to indirectly bear the cost of

allowances for all electricity consumed (including electricity

generated internally at the facilities).

The physical effects of climate change may adversely affect

the Group’s business.

TOTAL’s businesses operate in varied locales where the potential

physical impacts of climate change, including changes in weather

patterns, are highly uncertain and may adversely impact the results

of the Group’s operations.

The 2014 update to the EU-ETS list of sectors exposed to carbon

leakage confirmed that refining activities in Europe are an exposed

sector and should continue to benefit from free allocations partially

covering its deficits. Based on available information, the Group has

estimated that approximately 25% of its emissions subject to the

EU-ETS will not be covered by free allowances during the period

Climate change potentially has multiple effects that could harm the

Group’s operations. The increasing scarcity of water resources may

negatively affect the Group’s operations in some regions of the

world, high sea levels may harm certain coastal activities, and the

multiplication of extreme weather events may damage offshore and

onshore facilities. These climate risk factors are continually

2013-2020 and at least 30% during the period 2021-2030. The

financial risk related to the foreseeable purchase of CO emission

2

allowances on the market is expected to rise due to the effects of

the ongoing reform of the EU-ETS. At year-end 2016, the price

assessed in TOTAL’s management and risk management plans.

of CO

2

emission allowances stood at approximately €6/t CO

2

.

The Group believes that it is impossible to guarantee that the

contingencies or liabilities related to the matters mentioned in point

1.2 of this chapter will not have a material adverse impact on its

business, financial condition, including its operating income and

cash flow, reputation or outlook.

The forecast for 2020 indicates that the price could rise to

approximately €20/t CO

backloading⁽(having removed 900 Mt from phase 3 allowance

auctions), of the foreseeable cancellation of quotas and the

establishment of a “market stability reserve” at the end of this

(1)

2

due to the combined effects of

2)

phase. The Group believes that the price of CO

2

emission

allowances could rise to at least €30/t during phase 4 (2021-2030).

1.3. Risks related to critical IT systems security

Disruption to or breaches of TOTAL’s critical IT services or

information security systems could adversely affect the

Group’s operations.

cyber attack, viruses and computer intrusions, power or network

outages or natural disasters, the Group’s activities and assets could

sustain serious damage, material intellectual property could be

divulged and, in some cases, personal injury, property damage,

environmental harm and regulatory violations could occur,

potentially having a material adverse effect on the Group’s financial

condition, including its operating income and cash flow.

The Group’s activities depend heavily on the reliability and security

of its information technology (IT) systems. If the integrity of its IT

systems were compromised due to, for example, technical failure,

1.4. Risks related to the development of major projects and reserves

The Group’s production growth and profitability depend on the

delivery of its major development projects.

Poor delivery of any major project that underpins production or

production growth could adversely affect the Group’s financial

condition, including its operating income and cash flow.

Growth of production and profitability of the Group rely heavily on

the successful execution of its major development projects that are

increasingly complex and capital-intensive. These major projects

may face a number of difficulties, including, in particular, those

related to:

The Group’s long-term profitability depends on cost-effective

discovery, acquisition and development of economically viable

new reserves; if the Group is unsuccessful, its financial

condition, including its operating income and cash flow, would

be materially and adversely affected.

–

economic or political risks, including threats specific to a certain

country or region, such as terrorism, social unrest or other

conflicts (refer to point 1.6 of this chapter);

negotiations with partners, governments, local communities,

suppliers, customers and other parties;

obtaining project financing;

controlling capital and operating costs;

earning an adequate return in a low oil and/or gas price

environment;

A large portion of the Group’s revenues and operating results are

derived from the sale of oil and gas that the Group extracts from

underground reserves developed as part of its

–

Exploration & Production activities. The development of oil and gas

fields, the construction of facilities and the drilling of production or

injection wells is capital intensive and requires advanced

technology. Due to constantly changing market conditions and

environmental challenges, cost projections can be uncertain. For

TOTAL’s Exploration & Production activities to continue to be

profitable, the Group needs to replace its reserves with new proved

reserves that can be developed and produced in an economically

viable manner.

–

adhering to project schedules; and

the timely issuance or renewal of permits and licenses by public

agencies.

(

1) Company data.

(2) Backloading: authorization given to the European Commission to intervene at its own discretion in the CO allowance auction calendar.

2

Registration Document 2016. TOTAL

65

Risks and control

4

Risk Factors

In addition, TOTAL’s ability to discover or acquire and develop new

reserves successfully is uncertain and can be negatively affected by

a number of factors, including:

estimates indicate, the Group’s financial condition, including

its operating income and cash flow, could be negatively impacted.

The Group’s proved reserves figures are estimates prepared in

accordance with SEC rules. Proved reserves are those reserves

which, by analysis of geoscience and engineering data, can be

estimated with reasonable certainty to be economically

–

the geological nature of oil and gas fields, notably unexpected

drilling conditions including pressure or unexpected

heterogeneities in geological formations;

–

the risk of dry holes or failure to find expected commercial

quantities of hydrocarbons;

equipment failures, fires, blow-outs or accidents;

shortages or delays in the availability or delivery of appropriate

equipment;

the Group’s inability to develop or implement new technologies

that enable access to previously inaccessible fields;

the Group’s inability to anticipate market changes in a timely manner;

adverse weather conditions;

the inability of the Group’s partners to execute or finance projects

in which the Group holds an interest or to meet their contractual

obligations;

the inability of service companies to deliver contracted services

on time and on budget;

compliance with both anticipated and unanticipated

governmental requirements, including U.S. and EU regulations

that may give a competitive advantage to companies not subject

to such regulations;

economic or political risks, including threats specific to a certain

country or region, such as terrorism, social unrest or other

conflicts (refer to point 1.6 of this chapter);

competition from oil and gas companies for the acquisition

and development of assets and licenses (refer to point 1.7

of this chapter);

recoverable – from a given date forward, from known reservoirs and

under existing economic conditions, operating methods and

government regulations – prior to the time at which contracts

providing the right to operate expire, unless evidence indicates that

renewal is reasonably certain, regardless of whether deterministic or

probabilistic methods are used for the estimation. Reserves are

estimated by teams of qualified, experienced and trained

geoscientists, petroleum engineers and project engineers, who

rigorously review and analyze in detail all available geoscience and

engineering data (e.g., seismic data, electrical logs, cores, fluids,

pressures, flow rates, facilities parameters). This process involves

making subjective judgments, including with respect to the estimate

of hydrocarbons initially in place, initial production rates and

recovery efficiency, based on available geological, technical and

economic data. Consequently, estimates of reserves are not exact

measurements and are subject to revision.

–

A variety of factors that are beyond the Group’s control could cause

such estimates to be adjusted downward in the future, or cause the

Group’s actual production to be lower than its currently reported

proved reserves indicate. Such factors include:

–

– a prolonged period of low prices of oil or gas, making reserves

no longer economically viable to exploit and therefore not

classifiable as proved;

–

increased taxes and royalties, including retroactive claims and

changes in regulations and tax reassesments;

disputes related to property titles.

– an increase in the price of oil or gas, which may reduce the

reserves to which the Group is entitled under production sharing

and risked service contracts and other contractual terms;

–

changes in tax rules and other regulations that make reserves no

longer economically viable to exploit; and

the actual production performance of the Group’s deposits.

These factors could lead to cost overruns and could impair the

Group’s ability to complete a development project or make

production economical. Some of these factors may also affect the

Group’s projects and facilities further down the oil and gas chain.

–

The Group’s reserves estimates may therefore require substantial

downward revisions should its subjective judgments prove not to

have been conservative enough based on the available geoscience

and engineering data, or the Group’s assumptions regarding factors

or variables that are beyond its control prove to be incorrect over

time. Any downward adjustment could indicate lower future

production amounts, which could adversely affect the Group’s

financial condition, including its operating income and cash flow.

If TOTAL fails to develop new reserves cost-effectively and in

sufficient quantities, the Group’s financial condition, including its

operating income and cash flow, could be materially affected.

The Group’s oil and gas reserves data are estimates only and

subsequent downward adjustments are possible. If actual

production from such reserves proves to be lower than current

1.5. Risks related to equity affiliates and management of assets operated

by third parties

Many of the Group’s projects are conducted by equity affiliates

or are operated by third parties. For these projects, the Group’s

degree of control, as well as its ability to identify and manage

risks, may be reduced.

For additional information, refer to Note 8 (“Equity affiliates, other

titles and related parties”) to the Consolidated Financial Statements

(point 7 of chapter 10).

Additionally, the partners of the Group may not be able to meet

their financial or other obligations to the projects, which may

threaten the viability of a given project. These partners may also not

have the financial capacity to fully indemnify the Group or third

parties in the event of an incident.

A significant number of the Group’s projects are conducted by

equity affiliates. In cases where the Group’s company is not the

operator, such company may have limited influence over, and

control of, the behavior, performance and costs of the partnership,

its ability to manage risks may be limited and it may, nevertheless,

be prosecuted by regulators or claimants in the event of an incident.

With respect to joint ventures, contractual terms generally provide

that the operator, whether an entity of the Group or a third party,

assumes full liability for damages caused by its gross negligence or

willful misconduct.

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TOTAL. Registration Document 2016

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Risk Factors

4

In the absence of the operator’s gross negligence or willful

misconduct, other liabilities are generally borne by the joint venture

and the cost thereof is assumed by the partners of the joint venture

in proportion to their respective ownership interests.

With respect to third-party providers of goods and services, the

amount and nature of the liability assumed by the third party

depends on the context and may be limited by contract. Contracts

may also contain obligations to indemnify TOTAL or for TOTAL to

indemnify co-contracting parties or third parties.

1.6. Risks related to political or economic factors

TOTAL has significant production and reserves located in

politically, economically and socially unstable areas, where the

likelihood of material disruption of the Group’s operations is

relatively high.

Furthermore, in addition to current production, TOTAL is also

exploring for and developing new reserves in other regions of the

world that are historically characterized by political, social and

economic instability, such as the Caspian Sea region where TOTAL

has large projects currently underway.

A significant portion of TOTAL’s oil and gas production and reserves

is located in countries that are not part of the Organisation for

Economic Co-operation and Development (OECD). In recent years,

a number of these countries have experienced varying degrees of

one or more of the following: economic or political instability, civil

war, violent conflict, social unrest, actions of terrorist groups and

the application of international economic sanctions. Any of these

conditions alone or in combination could disrupt the Group’s

operations in any of these regions, causing substantial declines in

production or revisions to reserves estimates.

The occurrence and magnitude of incidents related to economic,

social and political instability are unpredictable. It is possible that

they could have a material adverse impact on the Group’s

production and operations in the future and/or cause certain

investors to reduce their holdings of TOTAL’s securities.

TOTAL, like other major international energy companies, has a

geographically diverse portfolio of reserves and operational sites,

which allows it to conduct its business and financial affairs so as to

reduce its exposure to political and economic risks. However, there

can be no assurance that such events will not have a material

adverse impact on the Group.

In Africa, which represented 26%⁽¹⁾of the Group’s 2016 combined

liquids and gas production, certain of the countries in which the

Group has production have recently suffered from some of these

conditions, including Nigeria, which is one of the main contributing

countries to the Group’s production of hydrocarbons, and Libya

Intervention by host country authorities can adversely affect

the Group’s activities and its operating results.

(

refer to point 2.1.1.8 of chapter 2).

TOTAL has significant exploration and production activities, and in

some cases refining, marketing or chemicals operations, in

countries whose governmental and regulatory framework is subject

to unexpected change and where the enforcement of contractual

rights is uncertain. The legal framework of TOTAL’s exploration and

production activities, established through concessions, licenses,

permits and contracts granted by or entered into with a

government entity, a state-owned company or, sometimes, private

owners, is subject to risks of renegotiation that, in certain cases,

can reduce or challenge the protections offered by the initial legal

framework and/or the economic benefit to TOTAL.

The Middle East, which represented 21%⁽²⁾of the Group’s 2016

combined liquids and gas production, has in recent years suffered

increased political volatility in connection with violent conflict and

social unrest, including Syria, where European Union (EU) and U.S.

economic sanctions have prohibited TOTAL from producing oil and

gas since 2011. In Yemen, the deterioration of security conditions in

the vicinity of Balhaf caused the company Yemen LNG, in which the

Group holds a stake of 39.62%, to stop its commercial production

and export of LNG and to declare force majeure to its various

stakeholders in 2015. The plant has been put in preservation mode.

In Iran, following the suspension on January 16, 2016 of UN

economic sanctions, most U.S. secondary sanctions and most EU

economic sanctions, the Group has engaged in certain activities.

However, sanctions could be reinstated unilaterally in the event of a

dispute over Iran’s compliance with its nuclear commitments or in

certain other cases. For additional information, refer to points 1.9.1

and 1.9.2 of this chapter.

In addition, the Group’s exploration and production activities in

such countries are often undertaken in conjunction with state-

owned entities, for example as part of a joint venture in which the

state has a significant degree of control. In recent years, in various

regions globally, TOTAL has observed governments and state-

owned enterprises impose more stringent conditions on companies

pursuing exploration and production activities in their respective

countries, increasing the costs and uncertainties of the Group’s

business operations. TOTAL expects this trend to continue.

In South America, which represented 6% of the Group ’s 2016, combined

liquids and gas production, certain of the countries in which TOTAL

has production have recently suffered from some of the above-

mentioned conditions, including Argentina, Brazil and Venezuela.

Potential increasing intervention by governments in such countries

can take a wide variety of forms, including:

Since July 2014, international economic sanctions have been

adopted against certain Russian persons and entities, including

various entities operating in the financial, energy and defense

sectors. As of December 31, 2016, TOTAL held nearly 21% of its

proved reserves in Russia, where from the Group had 14% of its

combined oil and gas production in 2016. For additional

information, refer to point 1.9.1 of this chapter.

– the award or denial of exploration and production interests;

– the imposition of specific drilling obligations;

– price and/or production quota controls and export limits;

– nationalization or expropriation of assets;

– unilateral cancellation or modification of license or contract rights;

– increases in taxes and royalties, including retroactive claims and

changes in regulations and tax reassesments;

(

1) Excluding North Africa.

(2) Including North Africa.

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67

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Risk Factors

–

the renegotiation of contracts;

the imposition of increased local content requirements;

payment delays; and

have a material adverse effect on its financial condition, including its

operating income and cash flow.

For example, the Nigerian government has been contemplating

new legislation to govern the petroleum industry which, if passed

into law, could have an impact on the existing and future activities

of the Group in that country through increased taxes and/or

operating costs and could adversely affect financial returns from

projects in that country.

currency exchange restrictions or currency devaluation.

If a host government were to intervene in one of these forms in a

country where TOTAL has substantial operations, including

exploration, the Group could incur material costs or the Group’s

production or asset value could decrease, which could potentially

1.7. Risks related to competition and lack of innovation

The Group operates in a highly competitive environment. Its

competitiveness could be adversely impacted if the Group’s

level of innovation lagged behind its competitors.

The Group’s activities are carried out in a constantly changing

environment with new products and technologies continuously

emerging. The Group may not be able to anticipate these changes,

identify and integrate technological developments in order to

maintain its competitiveness, maintain a high level of performance

and operational excellence, and best meet the needs and demands

of its customers. The Group’s innovation policy requires significant

investment, notably in R&D, of which the expected impact cannot

be guaranteed.

TOTAL’s main competitors are comprised of national and international

oil companies. The evolution of the energy sector has opened the

door to new competitors and increased market price volatility.

TOTAL is subject to competition in the acquisition of assets and

licenses for the exploration and production of oil and natural gas as

well as for the sale of manufactured products based on crude and

refined oil. In the gas sector, major producers increasingly compete

in the downstream value chain with established distribution

companies. Increased competitive pressure could have a significant

negative effect on the prices, margins and market shares of the

Group’s companies.

In the field of R&D, the multiplication of research partnerships, in

particular in related technical fields, may make it difficult for the

Group to track technical information exchanged with research

partners and monitor related contractual restrictions (e.g.,

confidentiality, limited use). New and increasingly complex digital

technologies as well as the multiplication of partnerships are all

likely to increase contamination risks, which could, as a result, limit

TOTAL’s ability to exploit innovations.

The pursuit of unconventional gas development, particularly in the

United States, has contributed to falling market prices and a

marked difference between spot and long-term contract prices.

The competitiveness of long-term contracts indexed to oil prices

could be affected if this discrepancy persists and if it should prove

difficult to invoke price revision clauses.

1.8. Ethical misconduct and non-compliance risks

Ethical misconduct or breaches of applicable laws by employees

of the Group could expose TOTAL to criminal and civil penalties

and be damaging to TOTAL’s reputation and shareholder value.

In addition, such misconduct or non-compliance may lead the

competent authorities to impose other measures, such as the

appointment of an independent monitor in charge of assessing the

Group’s compliance and internal control procedures and, if need

be, recommending improvements. For an overview of the

settlements between TOTAL, the SEC and the Department of

Justice (DoJ) providing for the appointment of an independent

monitor, refer to point 4.3 of this chapter and point 3.7 of chapter 7.

The Group’s Code of Conduct, which applies to all of its

employees, defines TOTAL’s commitment to business integrity and

compliance with all applicable legal requirements and high ethical

standards. This commitment is supported by a “zero tolerance”

principle. Ethical misconduct (notably with respect to human rights)

or non-compliance with applicable laws and regulations (including

corruption, fraud and competition laws) by TOTAL or any third party

acting on its behalf could expose TOTAL and/or its employees to

criminal and civil penalties and could be damaging to TOTAL’s

reputation and shareholder value.

Generally, entities of the Group could potentially be subject to

administrative, judicial or arbitration proceedings that could have a

material adverse impact on the Group’s financial condition and

reputation (refer to point 2 of this chapter).

68

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4

1.9. Countries targeted by economic sanctions

TOTAL has activities in certain countries targeted by economic

sanctions. If the Group’s activities are not conducted in

accordance with applicable laws and regulations, TOTAL

could be sanctioned.

and state contracts not to be awarded to such companies. State

regulators have adopted similar initiatives relating to investments by

insurance companies. These measures are generally still in effect

despite the JCPOA sanctions relief. If TOTAL’s activities in Iran were

determined to fall within the scope of these prohibitions, and in the

absence of any available exemptions, certain U.S. institutions

holding interests in TOTAL may be required to sell their interests.

Various members of the international community have targeted

certain countries, including Iran and Syria, as well as certain

economic sectors in Russia, with economic sanctions and other

restrictive measures. U.S. and European restrictions relevant to the

Group and certain disclosure concerning the Group’s limited

activities or presence in certain targeted countries are outlined

below in points 1.9.1 and 1.9.2, respectively.

On November 8, 2016, TOTAL signed a heads of agreement

(“HOA”) with the National Iranian Oil Company (“NIOC”), which was

removed on January 16, 2016 from the U.S. and EU sanctions

designation lists. The HOA contemplates that the parties will

negotiate an agreement for the development of phase 11 of South

Pars gas field in Iran. For additional information regarding this HOA,

refer to point 1.9.2, below.

1.9.1. U.S. and European legal restrictions

TOTAL continues to closely monitor the possible impacts of

international economic sanctions regimes on its activities. The

Group does not believe that its activities in targeted countries are in

violation of applicable economic sanctions administered by the

United States, the European Union (“EU”) and other members of

the international community. However, the Group cannot assure

that current or future regulations or developments related to

economic sanctions will not have a negative impact on its business,

financial condition or reputation. A violation by the Group of

applicable laws or regulations could result in criminal, civil and/or

material financial penalties.

TOTAL believes that its current activities in Iran or involving Iranian

persons comply with the EU and U.S. sanctions that remain in force

in respect of Iran.

Restrictions against Syria

The EU adopted measures in 2011 regarding trade with and

investment in Syria that are applicable to European persons and to

entities constituted under the laws of an EU Member State,

including, notably, a prohibition on the purchase, import or

transportation from Syria of crude oil and petroleum products.

The United States also has adopted comprehensive measures that

broadly prohibit trade and investment in Syria. Since 2011, the

Group has ceased activities that contribute to oil and gas production

in Syria and has not purchased hydrocarbons from Syria.

Restrictions against Iran

On July 14, 2015, the EU, China, France, Russia, the United

Kingdom, the United States and Germany reached an agreement

with Iran, known as the Joint Comprehensive Plan of Action (the

“JCPOA”), regarding limits on Iran’s nuclear activities and relief

Restrictions against Russia

under certain U.S., EU and UN economic sanctions regarding Iran.

On January 16, 2016, the International Atomic Energy Agency

Since July 2014, international economic sanctions have been adopted

against certain Russian persons and entities, including various

entities operating in the financial, energy and defense sectors.

(“IAEA”) confirmed that Iran had met its initial nuclear compliance

commitments under the JCPOA. Therefore, as from that date, UN

economic sanctions, most U.S. secondary sanctions (i.e., those

covering non-U.S. persons⁽¹⁾) and most EU economic sanctions

were suspended⁽²⁾). Sanctions could, however, be reinstated

unilaterally by any participant in the event of a dispute over Iran’s

compliance with its nuclear commitments or in certain other cases.

TOTAL is closely monitoring developments in this regard.

The economic sanctions adopted by the EU since 2014 do not

materially affect TOTAL’s activities in Russia. TOTAL has been

formally authorized by the French government, which is the

competent authority for granting authorization under the EU

sanctions regime, to continue all its activities in Russia (on the

Kharyaga and Termokarstovoye fields and the Yamal LNG project).

With respect to the Group’s activities conducted under the

sanctions framework that was in place prior to the JCPOA

sanctions relief, the U.S. Department of State made a determination

on September 30, 2010 that certain historical activities would not

be deemed sanctionable and that, so long as TOTAL acts in

accordance with its commitments related to this determination, it

will not be regarded as a company of concern for its past Iran-

related activities. Since 2011, TOTAL has had no production in Iran.

The United States has notably adopted economic sanctions targeting

PAO Novatek⁽³⁾(“Novatek”), as well as entities in which Novatek

(individually or with other similarly targeted persons or entities

collectively) owns an interest of at least 50%, including OAO Yamal

LNG⁽⁴⁾(“Yamal LNG”) and Terneftegas . These sanctions prohibit

U.S. persons from transacting in, providing financing for or otherwise

dealing in debt issued by these entities after July 16, 2014 of greater

than 90 days maturity. Consequently, the use of the U.S. dollar for

such financing, including for Yamal LNG, is effectively prohibited.

(5)

Certain U.S. states have adopted legislation with respect to Iran

requiring, in certain conditions, state pension funds to divest

securities in any company with active business operations in Iran

The Yamal LNG project’s financing was finalized in successive steps

in 2016 in compliance with applicable regulations.

(

1) For purposes of this chapter, “U.S. person” means any U.S. citizen and permanent resident alien wherever they are in the world, entity organized under the laws of the United States or any

jurisdiction within the United States, including foreign branches, or any person or entity located in the United States.

2) Certain limited U.S. and EU human rights-related and terrorism-related sanctions remain in force.

3) A Russian company listed on the Moscow and London stock exchanges and in which the Group held an interest of 18.9% as of December 31, 2016.

4) A company jointly owned by PAO Novatek (50.1%), Total E&P Yamal (20%), CNODC (20%), a subsidiary of China National Petroleum Corporation (“CNPC”) and Silk Road Fund (9.9%).

5) A company jointly owned by PAO Novatek (51%) and Total Termokarstovoye BV (49%).

(

Registration Document 2016. TOTAL

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TOTAL’s activities in Russia are also not materially affected by

restrictive measures adopted by the United States in August 2015

imposing export controls and restrictions relating to the export of

certain goods, services, and technologies destined for projects

located in Russia in the field of oil exploration.

of a heads of agreement (“HOA”) for the development and

operation of the field. The parties to the HOA are NIOC, Total E&P

South Pars S.A.S. (a wholly owned affiliate of TOTAL S.A.), CNPC

International Ltd. (a wholly owned affiliate of China National

Petroleum Company) and Petropars Ltd. (a wholly owned affiliate of

NIOC). The HOA contains the key principles and commercial terms

that will be adopted in a definitive contract for the development and

operation of South Pars Phase 11, should such definitive contract

be finally agreed. The project is expected to have a production

capacity of 370,000 boe/d and the produced gas will be fed into

Iran’s gas network. TOTAL is expected to operate the project with a

50.1% interest alongside Petropars (19.9%) and CNPC (30%). The

required investment is expected to be approximately $4 billion, of

which TOTAL would finance 50.1%, with all equity contributions

and payments in non-U.S. currency. In preparation for the South

Pars Phase 11 project, TOTAL commenced engineering and

reservoir studies, which were presented in part to Pars Oil & Gas

Company (a NIOC affiliate) in 2016 during a technical workshop. In

the event of new or reinstated international economic sanctions, if

such sanctions were to prevent the Group from performing under

the anticipated contract for South Pars Phase 11, TOTAL expects

to be able to terminate the contract and recover its past costs from

NIOC (unless prevented by sanctions).

As of December 31, 2016, TOTAL held nearly 21% of its proved

reserves in Russia, where from the Group had 14% of its combined

oil and gas production in 2016.

TOTAL continues to closely monitor the different international

sanctions regimes targeting certain sectors of the economy of

Russia, and in particular, it closely monitors the potential imposition

of additional sanctions.

1

.9.2. Information concerning certain limited

activities in Iran and Syria

Provided in this section is certain information concerning TOTAL’s

activities related to Iran that took place in 2016 that is required to

be disclosed pursuant to Section 13(r) of the Securities Exchange

Act of 1934, as amended (“U.S. Exchange Act”). In addition,

information for 2016 is provided concerning the various types of

payments made by Group affiliates to the government of any

country identified by the United States as a state sponsor of

terrorism (currently, Iran, Syria and Sudan⁽¹⁾) or any entity controlled

by those governments. TOTAL believes that these activities are not

sanctionable and has not been informed that it is at risk of possible

imposition of sanctions for activities previously disclosed. For more

information on certain U.S. and EU restrictions relevant to TOTAL in

these jurisdictions, see point 1.9.1 above.

Regarding other potential oil and gas projects covered by the

aforementioned MOU, TOTAL held technical meetings in 2016 with

representatives of NIOC and its affiliated companies and carried out

a technical review of the South Azadegan oil field in Iran as well as

the Iran LNG Project (a project contemplating a 10 Mt/y LNG

production facility at Tombak Port on Iran’s Persian Gulf coast), the

results of which were partially disclosed to NIOC and relevant

affiliated companies.

Iran

The Iran Threat Reduction and Syria Human Rights Act of 2012

In addition, in connection with anticipated activities under the

aforementioned MOU and HOA, TOTAL attended meetings in 2016

with the Iranian oil and gas ministry and several Iranian companies

with ties to the government of Iran.

(“ITRA”) added Section 13(r) to the U.S. Exchange Act, which

requires TOTAL to disclose whether it or any of its affiliates has

engaged during the calendar year in certain Iran-related activities,

including those targeted under ISA, without regard to whether such

activities are sanctionable under ISA, and any transaction or dealing

with the Government of Iran that is not conducted pursuant to a

specific authorization of the U.S. government. While neither TOTAL

S.A. nor any of its affiliates have engaged in any activity that would

be required to be disclosed pursuant to subparagraphs(A),(B) or(C)

of Section 13(r) (1), affiliates of the Company may be deemed to

have engaged in certain transactions or dealings with the

government of Iran that would require disclosure pursuant to

Section 13(r) (1)(D), as discussed below.

Also in 2016, TOTAL was selected, along with other international oil

and gas companies, to form an advisory group to the oil and gas

ministries of Iran and Oman concerning a possible future gas

pipeline between the two countries. In that regard, TOTAL entered

into a confidentiality agreement and attended meetings with these

companies and ministries.

In addition, TOTAL registered in 2016 a branch office of a new

entity, Total Iran B.V., a wholly-owned affiliate of TOTAL S.A., the

purpose of which is to serve as the representation office for the

Group in Iran. This entity replaces Total E&P Iran, which previously

served the same purpose, but only for Exploration & Production.

Upstream

Following the suspension of certain international economic

sanctions against Iran on January 16, 2016 (as described in point

Neither revenues nor profits were recognized from any of the

aforementioned activities in 2016, and the Group expects to

conduct similar business development activities in 2017.

1.9.1 of this chapter), the Group commenced various business

development activities in Iran. TOTAL entered into a memorandum

of understanding (“MOU”) with the National Iranian Oil Company

Some payments are yet to be reimbursed to the Group with respect

to past expenditures and remuneration under buyback contracts

entered into between 1997 and 1999 with NIOC for the

development of the South Pars 2&3 and Dorood fields. With

respect to these contracts, development operations were

completed in 2010 and the Group is no longer involved in the

operation of these fields.

(“NIOC”), pursuant to which NIOC provided technical data on

certain oil and gas projects so that TOTAL could assess potential

developments in Iran in compliance with the remaining applicable

international economic sanctions. TOTAL subsequently proposed

to develop and operate the South Pars Phase 11 gas field offshore

Iran in the Persian Gulf along the international border with Qatar.

This resulted in the negotiation and signing, on November 8, 2016,

(1) Since the independence of the Republic of South Sudan on July 9, 2011, TOTAL is no longer present in Sudan.

70

TOTAL. Registration Document 2016

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4

Concerning payments to Iranian entities in 2016, Total E&P Iran

100%), Elf Petroleum Iran (99.8%), Total Sirri (100%) and Total

South Pars (99.8%) collectively made payments of approximately

September 4, 2013, the U.S. Treasury Department issued a license

to BP authorizing BP and certain others to engage in various

activities relating to the operation and production of the Rhum field.

Following receipt of all necessary authorizations, the Rhum field

resumed production on October 26, 2014 with IOC’s interest in the

Rhum field and the Rhum Agreements subject to the UK

(

(1)

IRR 3 billion (approximately $0.1 million ) to(i)the Iranian

administration for taxes and social security contributions

concerning the personnel of the aforementioned local office and

residual buyback contract-related obligations, and (ii) Iranian public

entities for payments with respect to the maintenance of the

aforementioned local office (e.g., utilities, telecommunications).

TOTAL expects similar types of payments to be made by these

affiliates in 2017 albeit in higher amounts due to increased business

development activity in Iran. Neither revenues nor profits were

recognized from the aforementioned activities in 2016.

government’s temporary management pursuant to the

Hydrocarbons Regulations. Services were provided by TEP UK

under the Rhum Agreements from October 26, 2014 and TEP UK

received tariff income and revenues from BP and the UK

government (in its capacity as temporary manager of IOC’s interest

in the Rhum field) in accordance with the terms of the Rhum

Agreements until the termination of the temporary management

scheme in March 2016. As IOC ceased to be a listed person within

the meaning of the Hydrocarbons Regulations on January 16,

Furthermore, Total E&P UK Limited (“TEP UK”), a wholly-owned

affiliate of TOTAL, holds a 43.25% interest in a joint venture at the

Bruce field in the UK with BP Exploration Operating Company

Limited (37.5%, operator), BHP Billiton Petroleum Great Britain Ltd

2016, the UK government gave notice to IOC on January 22, 2016

of the termination of the temporary management scheme with

effect from March 16, 2016 in accordance with regulation 26(1)(a)

and 27(1)(a) of the Hydrocarbons Regulations. As a result, since

March 16, 2016, TEP UK has liaised directly with IOC concerning

its interest in the Bruce Rhum Agreement, and services have been

provided by TEP UK under the Bruce Rhum Agreement to IOC as

Rhum Owner. In 2016, these activities generated for TEP UK gross

revenue of approximately £8 million (approximately $9.8 million) and

net profit of approximately £0.20 million (approximately $0.25 million).

Subject to the foregoing, TEP UK intends to continue such activities

so long as they continue to be permissible under UK and EU law

and not be in breach of remaining applicable international economic

sanctions.

(16%) and Marubeni Oil & Gas (North Sea) Limited (3.75%). This

joint venture is party to an agreement (the “Bruce Rhum

Agreement”) governing certain transportation, processing and

operation services provided to a joint venture at the Rhum field in

the UK that is co-owned by BP (50%, operator) and the Iranian Oil

Company UK Ltd (“IOC”), a subsidiary of NIOC (50%) (together, the

“Rhum Owners”). TEP UK owned and operated the pipeline of the

Frigg UK Association and the St Fergus Gas Terminal and was

party to an agreement governing provision of transportation and

processing services to the Rhum Owners (the “Rhum FUKA

Agreement”) (the Bruce Rhum Agreement and the Rhum FUKA

Agreement being referred to collectively as the “Rhum

Agreements”). On August 27, 2015, TEP UK signed a sale and

purchase agreement to divest its entire interest in the Frigg UK

Association pipeline and St Fergus Gas Terminal to NSMP

Operations Limited (“NSMP”). On March 15, 2016, the divestment

was completed and TEP UK’s interest in the Rhum FUKA

Agreement was novated to NSMP. As from this date, TEP UK’s only

interest in the Rhum FUKA Agreement is in relation to the

settlement of historical force majeure claims with the Rhum Owners

relating to the period when the Rhum field was shut down. To

TOTAL’s knowledge, provision of all services under the Rhum

Agreements was initially suspended in November 2010, when the

Rhum field stopped production following the adoption of EU

sanctions, other than critical safety-related services (i.e., monitoring

and marine inspection of the Rhum facilities), which were permitted

by EU sanctions regulations. On October 22, 2013, the UK

government notified IOC of its decision to apply a temporary

management scheme to IOC’s interest in the Rhum field within the

meaning of UK Regulations 3 and 5 of the Hydrocarbons

Downstream

The Group does not own or operate any refineries or chemicals

plants in Iran and did not purchase Iranian hydrocarbons when

prohibited by applicable EU and U.S. economic and financial

sanctions (refer to point 1.9.1, above).

The Group resumed its trading activities with Iran in February 2016

via its wholly-owned affiliates Totsa Total Oil Trading S.A. and Total

Trading Asia Pte Ltd. During 2016, approximately 50 Mb of crude

oil from Iran were purchased for nearly €1.8 billion (nearly $1.9 billion)

pursuant to a mix of spot and term contracts. Most of this crude oil

was used to supply the Group’s refineries and, therefore, it is not

possible to estimate the related gross revenue and net profit.

However, approximately 1.4 Mb of this crude oil were sold to entities

outside of the Group. In addition, in 2016 approximately 11 Mb of

petroleum products were bought from/sold to entities with ties to

the government of Iran. These operations generated gross revenue

of nearly €374 million (nearly $394 million) and net profit of

approximately €2.7 million (approximately $2.8 million). The affiliates

expect to continue these activities in 2017.

(

“

Temporary Management Scheme) Regulations 2013 (the

Hydrocarbons Regulations”). From October 22, 2013 until the

termination of the temporary management scheme on March 16,

016 (as further explained below), all correspondence by TEP UK in

Saft Groupe S.A. (“Saft”), a wholly-owned affiliate of the Group, in

2016 sold signaling and backup battery systems for metros and

railways as well as products for the utilities and oil and gas sectors

to companies in Iran, including some having direct or indirect ties

with the Iranian government. In 2016, this activity generated gross

revenue of approximately €5.6 million (approximately $5.9 million)

and net profit of approximately €0.80 million (approximately

$0.84 million). Saft expects to continue this activity in 2017.

2

respect of IOC’s interest in the Rhum Agreements was with the UK

government in its capacity as temporary manager of IOC’s

interests. On December 6, 2013, the UK government authorized

TEP UK, among others, under Article 43a of EU Regulation

267/2012, as amended by 1263/2012 and under Regulation 9 of

the Hydrocarbons Regulations, to carry out activities in relation to

the operation and production of the Rhum field. In addition, on

(1) Unless otherwise indicated, all non-USD currencies presented in this point 1.9.2 were converted to USD using the prevailing exchange rates available on February 28, 2017.

Registration Document 2016. TOTAL

71

Risks and control

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Risk Factors

Saft also attended the Iran Oil Show in 2016, where it discussed

business opportunities with Iranian customers, including those with

direct or indirect ties with the Iranian government. Saft expects to

conduct similar business development activities in 2017.

Beh Tam for such license. These payments were based on Beh

Tam’s sales of lubricants during the previous calendar year. In 2015,

royalty payments were suspended due to a procedure brought by

the Iranian tax authorities against TEPI. At the end of 2016, this

procedure was still pending and no royalty payments had been

received since 2015. Representatives of Total Outre Mer, a wholly-

owned affiliate of the Group, made several visits to Beh Tam and

Behran Oil during 2016 regarding the possible purchase of shares

of Beh Tam. Subsequent to an internal reorganization, the matter

was transferred to Total Oil Asia-Pacific Ltd, another wholly-owned

affiliate of the Group, which had several exchanges with

Total Solar (formerly named Total Énergie Développement), a

wholly-owned affiliate of the Group, had preliminary discussions in

2016 regarding the potential development of solar projects with

companies in Iran, including some having direct or indirect ties with

the Iranian government. Neither revenues nor profits were

recognized from this activity in 2016, and Total Solar expects to

continue this activity in 2017.

representatives of Behran Oil. As of the end of 2016, no agreement

had been reached, no money was paid or received by either

company. Similar discussions may take place in the future.

TOTAL S.A. signed in 2016 a non-binding memorandum of

understanding with the National Petrochemical Company, a

company owned by the government of Iran, to consider a project

for the construction in Iran of a steamcracker and polyethylene

production lines. In relation to the early stages of this project,

several visits to Iran were conducted in 2016. TOTAL S.A. recognized

no revenue or profit from this activity in 2016 and similar activities

are expected to continue in 2017.

Total Marketing Middle East FZE (“TMME”), a wholly-owned affiliate

of the Group, sold lubricants to Beh Tam in 2016. The sale in 2016

of approximately 54 t of lubricants and special fluids generated

gross revenue of approximately AED 420,000 (approximately

$

114,000) and net profit of approximately AED 360,000 (approximately

98,000). TMME expects to continue this activity in 2017.

Representatives of the companies Le Joint Français (a subsidiary of

Hutchinson SA) and Hutchinson SNC, wholly-owned affiliates of the

Group, conducted multiple visits to Iran in 2016 to discuss

business opportunities in the car industry sector with several

companies, including some having direct or indirect ties with the

Iranian government. These companies recognized no revenue or

profit from this activity in 2016 and expect to continue such

discussions in the future.

Total Marketing France (“TMF”), a company wholly-owned by Total

Marketing & Services (“TMS”), itself a company wholly-owned by

TOTAL S.A. and six Group employees, provided in 2016 fuel

payment cards to the Iranian embassy in France for use in the Group’s

service stations. In 2016, these activities generated gross revenue

of nearly €22,000 (approximately $23,000) and net profit of nearly

€

900 (nearly $950). TMF expects to continue this activity in 2017.

TMF also sold jet fuel in 2016 to Iran Air as part of its airplane

refueling activities at Paris Orly airport in France. The sale of

approximately 2.8 million liters of jet fuel generated gross revenue of

approximately €982,000 (approximately $1.03 million) and net profit

of approximately €10,000 (approximately $11,000). TMF expects

to continue this activity in 2017.

Hutchinson Gmbh, a wholly-owned affiliate of the Group, sold

plastic tubing for automobiles in 2016 to Ikco, an affiliate of Iran

Khodro, a company in which the government of Iran holds a 20%

interest and which is supervised by Iran’s Industrial Management

Organization. In 2016, these activities generated gross revenue

of approximately €1.05 million (approximately $1.11 million) and net

profit of approximately €150,000 (approximately $158,000). This

company expects to continue this activity in 2017.

Air Total International (“ATI”), a wholly-owned affiliate of the Group,

on two occasions in 2016 sold jet fuel to a broker based at Le

Bourget airport near Paris that was destined for the refueling of an

Iranian government airplane (official presidential/ministerial visits).

These sales generated gross revenue of approximately €8,000

Hanwha Total Petrochemicals (“HTC”), a joint venture in which Total

Holdings UK Limited (a wholly-owned affiliate of TOTAL) holds a

50% interest and Hanwha General Chemicals holds a 50% interest,

(approximately $8,400) and net profit of approximately €1,600

purchased nearly 25 Mb of condensates from NIOC for

(approximately $1,700). ATI may conduct similar activities in 2017.

approximately KRW 1,300 billion (approximately $1,1 billion). These

condensates are used as raw material for certain of the Group’s

steamcrackers. HTC expects to continue this activity in 2017.

Total Belgium (“TB”), a company wholly-owned by the Group,

provided in 2016 fuel payment cards to the Iranian embassy in

Brussels (Belgium) for use in the Group’s service stations. In 2016,

these activities generated gross revenue of approximately €1,500

Total Research & Technology Feluy (“TRTF”), a wholly-owned

affiliate of TOTAL, commenced in 2016 the process to file a patent

in Iran concerning metallocene technology. Related to this process,

TRTF had contacts with Iranian government officials, but no fees

were paid. TRTF expects to continue the patent filing process in 2017.

(approximately $1,600) and net profit of approximately €300

(approximately $320). TB expects to continue this activity in 2017.

Proxifuel, a company wholly-owned by the Group, sold in 2016

heating oil to the Iranian embassy in Brussels. In 2016, these activities

generated gross revenue of approximately €200 (approximately $210)

and net profit of approximately €80 (approximately $85). Proxifuel

expects to continue this activity in 2017.

Until December 2012, at which time it sold its entire interest, the

Group held a 50% interest in the lubricants retail company Beh

Total (now named Beh Tam) along with Behran Oil (50%), a

company controlled by entities with ties to the government of Iran.

As part of the sale of the Group’s interest in Beh Tam, TOTAL S.A.

agreed to license the trademark “Total” to Beh Tam for an initial 3-

year period for the sale by Beh Tam of lubricants to domestic

consumers in Iran. In 2014, Total E&P Iran (“TEPI”), a wholly-owned

affiliate of TOTAL S.A., received, on behalf of TOTAL S.A., royalty

payments of approximately IRR 24 billion (nearly $1 million⁽¹⁾) from

Caldeo, a company wholly-owned by TMS, sold in 2016

approximately 3 m³ of domestic heating oil to the Iranian embassy

in France, which generated gross revenue of nearly €435 (nearly

$460) and net profit of nearly €115 (approximately $120). Caldeo

expects to continue this activity in 2017.

(1) Based on an average daily exchange rate of $1 = IRR 0.000039 during 2014, as published by Bloomberg.

72

TOTAL. Registration Document 2016

Risks and control

Legal and arbitration proceedings

4

Total Namibia (PTY) Ltd (“TN”), a wholly-owned affiliate of Total

South Africa (PTY) Ltd (of which the Group holds 50.1%), sold

petroleum products and services during 2016 to Rössing Uranium

Limited, a company in which the Iranian Foreign Investment Co.

holds an interest of 15.3%. In 2016, these activities generated

gross revenue of nearly N$249 million (approximately $19 million)

and net profit of approximately N$8 million (approximately

Syria

Since early December 2011, TOTAL has ceased its activities that

contribute to oil and gas production in Syria and maintains a local

office solely for non-operational functions. In late 2014, the Group

initiated a downsizing of its Damascus office and reduced its staff

to a few employees. In 2016, TOTAL made payments of nearly SYP

500,000 (approximately $2,300) to Syrian government agencies in the

$0.6 million). TN expects to continue this activity in 2017.

form of taxes and contributions for public services rendered in relation

to the maintenance of the aforementioned office and its personnel.

2. Legal and arbitration proceedings

There are no governmental, legal or arbitration proceedings,

including any proceeding of which the Company is aware that are

pending or threatened against the Company, that could have, or

could have had during the last 12 months, a material impact on the

Group’s financial situation or profitability.

former subsidiary of Elf Aquitaine that was liquidated in 2005,

claiming alleged damages of $22.4 billion. For the same reasons as

those successfully adjudicated by Elf Aquitaine against Blue Rapid

and the Russian Olympic Committee, the Group considers this

claim to be unfounded as a matter of law and fact.

Described below are the main administrative, legal and arbitration

proceedings in which the Company and the other entities of the

Group are involved.

The Group has lodged a criminal complaint to denounce the

fraudulent claim of which the Group believes it is a victim and, has

taken and reserved its rights to take all actions and measures to

defend its interests.

Alitalia

In the Marketing & Services segment, a civil proceeding was initiated

in Italy, in 2013, against TOTAL S.A. and its subsidiary Total Aviazione

Italia Srl before the competent Italian civil court. The plaintiff claims

against TOTAL S.A., its subsidiary and other third parties, damages

that it estimates to be nearly €908 million. This proceeding follows

practices that had been condemned by the Italian competition

authority in 2006. The parties have exchanged preliminary findings.

The existence and the assessment of the alleged damages in this

procedure involving multiple defendants remain contested.

FERC

The Office of Enforcement of the U.S. Federal Energy Regulatory

Commission (FERC) began in 2015 an investigation in connection

with the natural gas trading activities in the United States of Total

Gas & Power North America, Inc. (TGPNA), a U.S. subsidiary of the

Group. The investigation covered transactions made by TGPNA

between June 2009 and June 2012 on the natural gas market.

TGPNA received a Notice of Alleged Violations from FERC on

September 21, 2015. On April 28, 2016, FERC issued an order to

show cause to TGPNA and two of its former employees, and to

TOTAL S.A. and Total Gas & Power Ltd., regarding the same facts.

A class action has been launched to seek damages from these

three companies.

Blue Rapid and the Russian Olympic Committee –

Russian regions and Interneft

Blue Rapid, a Panamanian company, and the Russian Olympic

Committee filed a claim for damages with the Paris Commercial

Court against Elf Aquitaine, alleging a so-called non-completion by

a former subsidiary of Elf Aquitaine of a contract related to an

exploration and production project in Russia negotiated in the early

TGPNA has cooperated in the investigation with the U.S. authorities

and contests the claims brought against it.

Grande Paroisse

1990s. Elf Aquitaine believed this claim to be unfounded and

On September 21, 2001, an explosion occurred at the industrial

site of Grande Paroisse (a former subsidiary of Atofina which

became a subsidiary of Elf Aquitaine Fertilisants on December 31,

opposed it. On January 12, 2009, the Commercial Court of Paris

rejected Blue Rapid’s claim against Elf Aquitaine and found that the

Russian Olympic Committee did not have standing in the matter.

On June 30, 2011, the Court of Appeal of Paris dismissed as

inadmissible the claim of Blue Rapid and the Russian Olympic

Committee against Elf Aquitaine, notably on the grounds of the

contract having lapsed. The judgment of the Court of Appeal of

Paris is now final and binding following two decisions issued on

February 18, 2016 by the French Supreme Court to put an end to

this proceeding.

2004), in a stockpile of ammonium nitrate pellets. The explosion

caused the death of thirty-one people, including twenty-one

workers at the site, injured many others and caused significant

damage on the site and to property in the city of Toulouse.

Grande Paroisse donated the former site of the plant to the greater

agglomeration of Toulouse. A €10 million endowment was also

granted to the InNaBioSanté research foundation as part of the

setting up of a cancer research center at the site.

In connection with the same facts, and 15 years after the

aforementioned exploration and production contract was rendered

null and void (“caduc”), a Russian company, which was held not to

be the contracting party to the contract, and two regions of the

Russian Federation that were not even parties to the contract,

launched an arbitration procedure against the aforementioned

After many years, the investigating magistrate brought charges

against Grande Paroisse and the former Plant Manager before the

Toulouse Criminal Court. TOTAL S.A. and the CEO at the time of

the event were summoned to appear in Court pursuant to a request

by a victims association.

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Risks and control

4

Legal and arbitration proceedings

On November 19, 2009, the Toulouse Criminal Court acquitted

both the former Plant Manager and Grande Paroisse due to the

lack of reliable evidence for the explosion. The Court declared

Grande Paroisse civilly liable for the damages caused by the

explosion to the victims in its capacity as custodian and operator of

the plant. The Court also ruled that the summonses were

inadmissible.

concluded that TOTAL had fulfilled all of its obligations, thus

bringing an end to the monitoring process. As a result, a court in

the State of Virginia granted a motion to dismiss on November 9,

2016, thereby terminating the procedure directed at the Company,

which can no longer be pursued in the United States for these

same facts.

With respect to the same facts, TOTAL was placed under formal

investigation in France in 2012. In October 2014, the investigating

magistrate decided to refer the case to trial.

On September 24, 2012, the Court of Appeal convicted the former

Plant Manager and Grande Paroisse. The summonses were

determined to be inadmissible.

Italy

On January 13, 2015, the French Supreme Court (Cour de

cassation) fully quashed the decision of September 24, 2012. The

French Supreme Court ruled that the Court of Appeal impartiality

was questionable and that the application of the law on which the

conviction was partially based was improper. The case has been

referred back to the Court of Appeal of Paris for a new criminal trial,

which began in January 2017.

As part of an investigation led by the Public Prosecutor of the

Potenza Court in 2007, Total Italia and also certain Group

employees were the subjects of an investigation related to alleged

irregularities in connection with the purchase of lands and the

award of calls for tenders in relation to the preparation and

development of an oil field located in the south of Italy.

Pursuant to a judgment issued on April 4, 2016, the Potenza

Criminal Court found four employees to be guilty of corruption, with

two of these employees also being found guilty of misappropriation

in connection with the purchase of land. The procedure with

respect to Total Italia was sent back to the public prosecutor due to

the imprecision of the terms of prosecution. The four employees

decided to challenge the judgment before the Court of Appeal.

A compensation mechanism for victims was set up immediately

following the explosion. €2.3 billion was paid for the compensation

of claims and related expenses amounts. A €4.7 million reserve

remains booked in the Group’s Consolidated Financial Statements

as of December 31, 2016.

Iran

In 2003, the Securities and Exchange Commission (SEC) followed

by the Department of Justice (DoJ) issued a formal order directing

an investigation against TOTAL, and others oil companies, for

alleged violations of the Foreign Corrupt Practices Act (FCPA) and

the Company’s accounting obligations in connection with the

pursuit of business in Iran in the 1990s.

Oil-for-Food Program

Several countries have launched investigations concerning possible

violations of the UN resolutions relating to the Iraqi Oil-for-Food

Program implemented as from 1996.

Pursuant to a French criminal investigation, certain current or

former Group employees were placed under formal criminal

investigation for possible charges as aiding and abetting the

misappropriation of corporate assets and/or as aiding and abetting

the corruption of foreign public agents. In 2010, TOTAL S.A. was

indicted on bribery charges as well as aiding and abetting and

concealing the influence peddling.

In late May 2013, and after several years of discussions, TOTAL

reached settlements with the U.S. authorities (a Deferred

Prosecution Agreement with the DoJ and a Cease and Desist Order

with the SEC). These settlements, which put an end to these

investigations, were concluded without admission of guilt and in

exchange for TOTAL respecting a number of obligations, including

the payment of a fine and civil compensation for an aggregate

amount of $398.2 million. By virtue of these settlements, TOTAL

also accepted the appointment of an independent compliance

monitor to review the Group’s compliance program and to

recommend possible improvements.

On July 8, 2013, TOTAL S.A. and the persons who were

prosecuted were cleared of all charges by the Paris Criminal Court,

which found that none of the offenses for which they had been

prosecuted was established. The Prosecutor’s office appealed the

parts of the Criminal Court’s decision acquitting TOTAL S.A. for

corruption of foreign public agents. On February 26, 2016, the

Court of Appeal of Paris overturned the Criminal Court’s decision

and TOTAL S.A. was convicted and ordered to pay a fine

of €750,000. The Company has decided to appeal this decision

before the French Supreme Court (Cour de cassation).

In July 2016, the monitor submitted his third and final report, in

which he certified that TOTAL had devised and implemented an

appropriate compliance program. As a result of this certification, the

U.S. authorities, after having reviewed the monitor’s report,

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Risks and control

Insurance and risk management

4

3. Insurance and risk management

3.1. Organization

TOTAL has its own reinsurance company, Omnium Reinsurance

Company (ORC). ORC is integrated within the Group’s insurance

management and is used as a centralized global operations tool for

covering the Group companies’ insurable risks. It allows the

Group’s worldwide insurance program to be implemented in

compliance with the specific requirements of local regulations

applicable in the countries where the Group operates.

At the same time, ORC negotiates a reinsurance program at the

Group level with oil industry mutual insurance companies and

commercial reinsurance markets. ORC allows the Group to better

manage price variations in the insurance market by taking on a

greater or lesser amount of risk corresponding to the price trends in

the insurance market.

In 2016, the net amount of risk retained by ORC after reinsurance

was, on the one hand, a maximum of $70 million per onshore or

offshore third-party liability insurance claim and, on the other

hand, $75 million per property damage and/or business interruption

insurance claim. Accordingly, in the event of any loss giving rise to

an aggregate insurance claim, the effect on ORC would be limited

to its maximum retention of $145 million per occurrence.

Some countries may require the purchase of insurance from a local

insurance company. If the local insurer accepts to cover the

subsidiary of the Group in compliance with its worldwide insurance

program, ORC negotiates a retrocession of the covered risks from

the local insurer. As a result, ORC enters into reinsurance contracts

with the subsidiaries’ local insurance companies, which transfer

most of the risk to ORC.

3.2. Risk and insurance management policy

In this context, the Group risk and insurance management policy is

to work with the relevant internal department of each subsidiary to:

– help implement measures to limit the probability that a

catastrophic event occurs and the financial consequences if such

event should occur; and

–

define scenarios of major disaster risks (estimated maximum loss);

assess the potential financial impact on the Group should a

catastrophic event occur;

–

manage the level of financial risk from such events to be either

covered internally by the Group or transferred to the insurance

market.

3.3. Insurance policy

The Group has worldwide property insurance and third-party liability

coverage for all its subsidiaries. These programs are contracted

with first-class insurers (or reinsurers and oil and gas industry

mutual insurance companies through ORC).

For example, for the Group’s highest risks (North Sea platforms and

main refineries or petrochemical plants), in 2016 the insurance limit

for the Group share of the installations was approximately $1.75

billion for the Refining & Chemicals segment and

approximately $2.15 billion for the Upstream segment.

The amounts insured depend on the financial risks defined in the

disaster scenarios and the coverage terms offered by the market

Deductibles for property damage and third-party liability fluctuate

between €0.1 and €10 million depending on the level of risk and

liability, and are borne by the relevant subsidiaries. For business

interruption, coverage is triggered 60 days after the occurrence

giving rise to the interruption. In addition, the main refineries and

petrochemical plants bear a combined retention for property

damage and business interruption of $75 million per insurance

claim.

(available capacities and price conditions).

More specifically for:

–

third-party liability: since the maximum financial risk cannot be

evaluated by a systematic approach, the amounts insured are

based on market conditions and oil and gas industry practice. In

2016, the Group’s third-party liability insurance for any liability

(

including potential accidental environmental liabilities) was

Other insurance contracts are bought by the Group in addition to

property damage and third-party liability coverage, mainly in

connection with car fleets, credit insurance and employee benefits.

These risks are mostly underwritten by outside insurance

companies.

capped at $900 million (onshore) and $850 million (offshore). In

addition, the Group adopts, where appropriate, the necessary

means to manage the compensation of victims in the event of an

industrial accident for which it is liable; and

property damage and business interruption: the amounts insured

vary by sector and by site and are based on the estimated cost

and scenarios of reconstruction under maximum loss situations

and on insurance market conditions. The Group subscribed for

business interruption coverage in 2016 for its main refining and

petrochemical sites.

–

The above-described policy is given as an example of a situation as

of a given date and cannot be considered as representative of

future conditions. The Group’s insurance policy may be changed at

any time depending on the market conditions, specific

circumstances and on General Management’s assessment of the

risks incurred and the adequacy of their coverage.

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Internal control and risk management procedures

TOTAL believes that its insurance coverage is in line with industry

practice and sufficient to cover normal risks in its operations.

However, the Group is not insured against all potential risks. In the

event of a major environmental disaster, for example, TOTAL’s

liability may exceed the maximum coverage provided by its third-

party liability insurance. The loss TOTAL could suffer in the event of

such disaster would depend on all the facts and circumstances of

the event and would be subject to a whole range of uncertainties,

including legal uncertainty as to the scope of liability for

consequential damages, which may include economic damage not

directly connected to the disaster. The Group cannot guarantee

that it will not suffer any uninsured loss and there can be no

guarantee, particularly in the event of a major environmental

disaster or industrial accident, that such loss would not have a

material adverse effect on the Group.

4

. Internal control and risk management procedures

(

Article L. 225-37 of the French Commercial Code)

The information related to the internal control and risk management

procedures implemented within the Group presented hereafter forms

part of the Report of the Chairman of the Board of Directors prepared

pursuant to Article L. 225-37 of the French Commercial Code (refer

to the cross-reference list specific to the Report of the Chairman of

the Board of Directors, page 381 of this Registration Document).

The information contained in the Report of the Chairman of the

Board of Directors was prepared with the assistance of several of

the Company’s functional departments, including in particular the

Legal, Finance and Audit & Internal Control Divisions. After the

sections relevant to their respective duties were reviewed by the

Governance and Ethics Committee, the Compensation Committee

and the Audit Committee, the information was approved by the

Board of Directors.

4.1. Basic elements of internal control

The Group is structured around business segments to which the

Group’s operational entities report. The business segments’

management are responsible, within their area of responsibility, for

ensuring that operations are carried out in accordance with the

strategic objectives defined by the Board of Directors and General

Management. The functional departments at the Holding level help

General Management define norms and standards, oversee their

application and monitor activities. They also lend their expertise to

the operational divisions.

The Group’s internal control and risk management systems are

therefore based on the five components of this framework: control

environment, risk assessment, control activities, monitoring and

information, and communication.

The Group’s risk management system draws on the main

international standards (COSO Enterprise Risk Management

integrated framework, ISO 31000: 2009 – Risk management) as

well as on French standards (Reference framework of the French

Financial Markets Authority). The internal Risk Management,

Internal Control and Audit Charter forms the common framework

on which the Group relies to ensure control of its activities.

The Group’s internal control and risk management systems are

structured around this three-level organization – Holding level,

business segments, operational entities – where each level is

directly involved and accountable in line with the level of delegation

determined by General Management.

The Group’s internal control and risk management systems cover

the processes of the fully consolidated entities and the most

important equity affiliates.

General Management constantly strives to maintain an efficient

internal control system across the Group, based on the framework

of the Committee of Sponsoring Organizations of the Treadway

Commission (COSO). In this framework, internal control is a

process intended to provide reasonable assurance that the

objectives related to operations, reporting and compliance with

applicable laws and regulations are achieved. As for any internal

control system, it cannot provide an absolute guarantee that all

risks are completely controlled or eliminated. The COSO framework

is considered equivalent to the reference framework of the French

Financial Markets Authority (Autorité des marchés financiers). The

Group has also chosen to rely on this framework as part of its

obligations under the Sarbanes-Oxley Act.

Under these internal control principles, which are part of the corporate

governance organization, the Audit Committee is responsible for

monitoring the efficiency of internal control and risk management

systems, assisted by the Corporate Audit & Internal Control Division

and the internal control teams from the business segments. These

rules are particularly designed to allow the Board of Directors to

ensure that internal control is effective and that published information

available to shareholders and financial markets is reliable.

Approximately 400 employees monitor the internal control systems

within the Group. The assessment of the internal control and risk

management system is mainly overseen by the Corporate

Audit & Internal Control Division, which employed 77 people in

2016 and carried out more than 165 internal audits.

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Risks and control

Internal control and risk management procedures

4

4.2. Control environment

TOTAL’s control environment is based primarily on its Code of

Conduct, which, in addition to safety, sets forth its core values

employees, and (3) internal auditors who, through their internal

control reports, provide recommendations to improve the

effectiveness of the system.

(respect, responsibility and exemplary conduct) and business

principles in terms of safety, security, health, protection of the

environment, integrity and respect for human rights. This Code

of Conduct builds trust between TOTAL and both its employees

and stakeholders.

In addition, an accountability system is defined and formalized at all

levels of the organization, through organization notes, organization

charts, appointment notes, job descriptions and delegations of

powers. Each business segment has established clear rules applicable

to its specific scope by directly integrating the Group’s instructions.

Integrity and ethics

The Group’s values and business principles are set out in its Code

of Conduct (revised in 2014), its Business Integrity Guide and its

Human Rights Guide (revised in 2015). These documents are

distributed to all employees and are available on the intranet. They

also set out the rules of individual behavior expected of all

employees in the countries where the Group has a presence. The

Group has pledged its adherence to recognized international

standards related to human rights and, in particular, the core

conventions of the International Labour Organization (ILO), the

voluntary principles on security and human rights and the United

Nations guiding principles on business and human rights.

Policies and procedures

TOTAL incorporates the values, fundamental principles, strategic

options and respective requirements of the businesses, at all levels

of the organization, into a normative framework, supplemented by a

set of practical recommendations and feedback. Like the Group’s

organization, this framework has a three-level structure: a Group

level, with the REFLEX Group framework and the technical

framework set out by the Corporate Technology Group,

frameworks for each business segment; and a specific framework

for each significant operational entity.

A document known as the governance framework details the

relationship between these frameworks and describes their

respective scope, the way in which the standards differ from one

another (by adaptation, clarification or stricter requirements relative

to higher level standards), exemption processes, if any, standards

development processes and the monitoring system put in place.

The Financial Code of Ethics, which also refers to the Code of

Conduct, sets forth specific rules for the Chairman and Chief

Executive Officer, the Chief Financial Officer, the Vice President of

the Corporate Accounting Division and the financial and accounting

officers of the principal Group activities.

As a priority of General Management, the Group deploys ethics and

compliance policies and programs, including in particular programs

for the prevention of corruption, fraud and competition law

infringement. These include awareness and training activities as

well as compliance audits and ethical assessments (refer to point

The main procedures regarding financial controls established at the

corporate level cover acquisitions and sales, capital expenditure,

financing and cash management, budget control and financial

reporting. Disclosure controls and procedures are in place (refer to

point 4.3.2 below). At the operating levels, these procedures mainly

pertain to directives, rules and recommendations regarding health,

safety, industrial safety, IT security and the environment, as well as

integrity and fraud and corruption prevention.

3.7 of chapter 7). The Group also relies on the Ethics Committee,

the role of which is to listen and provide assistance in these areas.

The relationship between the Group and its service providers is also

based on adherence to the principles set forth in the Code of

Conduct and on the Fundamental Principles of Purchasing attached

to contracts. Suppliers and service providers are required to apply

standards equivalent to those of the Group, particularly with respect

to their employees, and to make every effort to encourage their

own suppliers and subcontractors in turn to respect these principles

These documents, all of which are published on the Group’s

intranet, are reviewed regularly and their implementation is monitored.

At the business segment or operational entity levels, control

activities are organized around the main operational processes:

exploration and reserves, procurement, capital expenditure,

production, sales, oil and gas trading, inventories, human resources,

financing and cash management, and account closing process.

(for further information about relations between the Group and its

suppliers, refer to point 3.6 of chapter 7).

Structure, authority and responsibility

Commitment to competence

General Management ensures that the organizational structure and

reporting lines plan, execute, control and periodically assess the

Group’s activities. General Management regularly reviews the

relevance of the organizational structures so as to be able to adapt

them quickly to changes in the activities and in the environment in

which they are carried out.

The Group’s human resources policy sets out rules and practices

that reflect its commitment in terms of social responsibility and its

expectations of employees, particularly in terms of competencies.

Descriptions of jobs within the Group’s various entities define the

competencies and expertise required for employees to carry out

their functions effectively.

The Group has also defined central responsibilities that cover the

three lines of defense of internal control: (1) operational

management, which is responsible for implementing internal

control, (2) support functions (such as Finance, Legal, Human

Resources, etc.), which prescribe the internal control systems,

verify their implementation and effectiveness and assist operational

In addition, the Human Resources function shapes and regularly

updates policies aimed at attracting new talents, including

employee training, assessment and retention policies (annual

appraisals, training programs, compensation policies and career

management – refer to point 1 of chapter 7).

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Internal control and risk management procedures

Accountability

These two categories of entities account for approximately 80%

and 10%, respectively, of the financial aggregates in the Group’s

Consolidated Financial Statements.

The Board of Directors, with the support of the Audit Committee,

ensures that the internal control functions are operating properly.

The Audit Committee ensures that General Management implements

internal control and risk management procedures based on the

risks identified, such that the Group’s objectives are achieved.

In addition, any activity, process or management system may be

the subject of an internal audit conducted by Group Audit, in

accordance with the international internal audit framework and its

Code of Ethics. The Corporate Audit & Internal Control Division also

conducts joint audits with third-party auditors and provides

assistance (advice, analysis, input regarding methodology). The

audit plan, which is based on an analysis of the risks and risk

management systems, is submitted annually to the Executive

Committee and the Audit Committee for approval. The statutory

auditors also review the internal controls that they deem necessary

as part of their certification of the financial statements. In 2016, they

reviewed the implementation of the Group’s internal control

framework and the design and effectiveness of key internal controls

at its main entities regarding financial reporting. Based on their

review, the statutory auditors stated that they had no remarks on

the information and statements presented in this present Report of

the Chairman of the Board of Directors on internal control and risk

management procedures.

The general managements of the business segments and

operational entities are responsible for designing and deploying

specific components of this internal control and risk management

system within their area of responsibility. A representation letter

process deployed at the various levels of the organization reinforces

the effectiveness of the internal control system, particularly over

financial reporting.

The Internal Control Department has pursued a process aimed at

strengthening the assessment of the role and involvement of all

employees in terms of internal control. Training initiatives tailored to

the various stakeholders involved in the internal control process are

regularly launched within the Group. In 2016, an internal control

seminar brought together over 100 Group employees in addition to

online participants.

The reports on the work performed by the Group Audit and

statutory auditors are periodically summarized and presented

to the Audit Committee and, thereby, to the Board of Directors.

The Senior Vice President, Audit & Internal Control attended all

Audit Committee meetings held in 2016. The Audit Committee also

interviews the statutory auditors at least once a year without any

Company representatives present.

Control activities and assessment

The Group regularly examines and assesses the design and

effectiveness of the key operational, financial and information

technology controls related to internal control over financial

reporting, pursuant to Section 404 of the Sarbanes-Oxley Act. In

2016, this assessment was performed with the assistance of the

Group’s main entities and the Corporate Audit & Internal Control

Division. The system used covers:

If areas of improvement are identified by these internal audits and

operational controls, then corrective action plans are drawn up and

shared with operational management, who along with the

–

the most significant entities, which assess the key operational

controls of their significant processes and respond to a Group

questionnaire for assessing the internal control system; and

other less significant entities, which respond only to the Group

questionnaire for assessing the internal control system.

Corporate Audit & Internal Control Division, monitor them closely.

Based on the internal reviews, General Management has reasonable

assurance of the effectiveness of the Group’s internal control.

–

4.3. Risk assessment and management

To implement its strategy, General Management ensures that clear

and precise objectives are defined at the various levels of the

organization with regard to operations, reporting and compliance.

The Group has developed a control framework in line with the risk

assessments performed and implements initiatives necessary for

addressing specific risks by enforcing Group-wide rules. These

initiatives must reduce the probability of occurrence of risks and

their possible impact. They also cover the main processes

outsourced via subcontracting agreements.

Operational objectives focus on the definition and efficient use of

human, financial and technical resources. In particular, they are

defined during the budgetary processes and in the long-term plan,

and are regularly monitored as part of the self-assessment process.

TOTAL also identifies changes that could have a significant impact

on its internal control system, particularly changes related to assets

consolidated by the business segments. To this end, the Group

relies on governance bodies adapted to its various activities and

capable of making and implementing decisions necessary for quickly

responding to material changes that the Group must deal with.

The monitoring of operational objectives (financial and non-financial)

helps in decision-making and monitoring performance of activities

at each level of the organization.

TOTAL has set up an ongoing process to identify and analyze risks

that may affect its employees, assets and environment, and

preclude the achievement of its objectives. The Group takes into

account risks at all levels of the organization and in all its entities,

and examines factors that influence the severity, probability of

occurrence of risks or the loss of its assets and the potential impact

on operations, reporting (financial and non-financial) and

compliance with applicable laws and regulations.

The risk-mapping activities carried out by the Group’s entities as

part of a regular risk assessment process help identify and analyze

key ongoing or foreseeable changes.

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4

.3.1. Monitoring of risk management systems

commercial activity. These risks are managed centrally by the

Treasury Department, which operates within a set of limits defined

by General Management.

The Executive Committee, with the assistance of the Group Risk

Management Committee created in 2011, is responsible for

identifying and analyzing internal and external risks that could

impact TOTAL’s performance. The main responsibilities of the

Group Risk Management Committee include ensuring that the

Group has an up-to-date map of the risks to which it is exposed

and that efficient risk management systems are in place.

The policy for managing risks related to financing and cash

management activities as well as the Group’s currency exposure

and interest rate risks is described in detail in Note 15 to the

Consolidated Financial Statements (point 7 of chapter 10).

Industrial and environmental risks and risks related

to climate issues

The Group Risk Management Committee relies on the work carried

out by the business segments and functional departments, which

concurrently establish their own risk mapping. These maps are

drawn up according to a methodological framework developed by

the Group. The activities of the Group Risk Management Committee,

the major risks identified by the Group and the risk mappings of the

business segments are regularly reported to the Audit Committee.

The Group has developed a Safety Health Environment Quality

Charter that sets out the basic principles applicable to the

protection of people, property and the environment and also covers

the aspects of safety and health (H3SEQ). This Charter is

implemented at several levels within the Group through its

management systems.

The Group’s business segments and entities are responsible for

defining and implementing a risk management policy suited to their

specific activities. However, the handling of certain transverse risks

is more closely coordinated by the respective functional departments.

Along these lines, TOTAL implements management systems such

as the internal management system MAESTRO, which meets all of

the requirements of the standards ISO 14001, ISO 9001 and

OHSAS 18001, as well as the future ISO 45001. The Group

performs regular assessments, following various procedures, of the

risks and impacts of its activities in the areas of industrial safety

General Management exercises operational control over TOTAL’s

activities through the Executive Committee’s approval of

investments and commitments for projects based on defined

thresholds. The Risk Committee (CORISK) is tasked with reviewing

these projects in advance and informing the Executive Committee

of its findings. As part of this review, the CORISK verifies the

analysis of the various project-related risks.

(particularly process safety), the environment and the protection of

workers and local residents:

– prior to approving new investment, acquisition and

disposal projects;

–

during operations (safety studies, environmental impact

assessments, health impact studies); and

prior to releasing new substances on the market (toxicological

and ecotoxicological studies and life cycle analyses).

The Group strives to implement effective control systems for the

main risks identified.

–

Financial risks

These assessments incorporate the regulatory requirements of the

countries where the Group’s activities are carried out and generally

accepted professional practices.

The management and conditions procedures for using financial

instruments are governed by strict rules that are defined by the

Group’s General Management, and which provide for centralization

by the Treasury Division of liquidity, interest exchange rate positions,

management of financial instruments and access to capital markets.

In countries where prior administrative authorization and supervision

is required, projects are not undertaken without the authorization of

the relevant authorities based on the studies provided to them.

The Group’s financing policy consists of incurring long-term debt at

a floating rate or at a fixed rate depending on interest rates. Debt is

mainly incurred in dollars or euros according to the Group’s general

corporate needs.

In particular, TOTAL has developed a common methodology for

analyzing technological risks that is being gradually applied to all

activities carried out by the companies of the Group (refer to point

2

.2.2 of chapter 7). TOTAL develops risk management measures

The Group’s cash balances, which mainly consist of dollars and

euros, are managed to maintain liquidity based on daily interest

rates in the given currency. Maximum amounts are set for

transactions exceeding one month, with placements not to exceed

based on risk and impact assessments. These measures involve

facility and structure design, the reinforcement of safety devices

and environmental remediation.

1

2 months. TOTAL S.A. also has confirmed credit facilities granted

In addition to developing management systems as described

above, the Group strives to minimize industrial, safety and

environmental risks inherent in its operations by conducting

thorough inspections and audits, training personnel and raising

awareness among all those involved.

by international banks. These credit facilities, along with the Group’s

net cash position, allow it to continually maintain a high level of

liquidity in accordance with targets set by General Management.

In terms of counterparty risk in financial transactions, the Group

adheres to a cautious policy, and only makes commitments with

institutions featuring a high degree of financial soundness, as based

on a multi-criteria analysis. An overall credit limit is set for each

authorized financial counterparty and allocated among the Group’s

subsidiaries. In addition, to reduce market value risk on its

commitments, the Treasury Division has entered into margin call

contracts with its significant counterparties.

In addition, performance indicators (particularly in the areas of HSE)

and risk monitoring have been put in place, objectives have been

set and action plans have been implemented to achieve these

objectives (refer to point 2 of chapter 7).

Although the emphasis is on preventing risks, TOTAL takes regular

steps to prepare for crisis management based on identified risk

scenarios. The Group has a crisis management process that relies

on a permanent on-call system, regular drills, training courses in

crisis management and a set of tools. The organization set up in

the event of a crisis is deployed at two closely coordinated levels:

The Group seeks to minimize its currency exposure, on the one

hand by financing its long-term assets in the functional currency of

the entity to which they belong and, on the other hand, by

systematically hedging the currency exposure generated by

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79

Risks and control

4

Internal control and risk management procedures

–

at the local level (country, site or entities), a crisis unit is

responsible for ensuring operational management and

implementing emergency plans; and

at the head office level, a crisis unit consisting of a

multidisciplinary team is tasked with assessing the situation and

overseeing crisis management. This central unit provides the

necessary expertise and mobilizes additional resources to assist

the local crisis unit when necessary and intervene directly when

the situation cannot be handled locally.

change on its future projects. These analyses include a review by

type of risk (e.g., sea level, storms, temperature, permafrost) and

take into account the life span of the projects and their capacity to

gradually adapt. These studies have not identified any facilities that

cannot withstand the consequences of climate change known today.

Risks related to information systems

TOTAL’s IT Department has developed and distributed governance

and security rules that describe the recommended infrastructure,

organization and procedures in order to maintain information

systems that are appropriate to the organization’s needs and the

risks associated with information systems and their data. These

rules are implemented across the Group under the responsibility of

the various business segments.

Concerning the area of security, the Group has put in place the means

to monitor and analyze threats and risks at a central level in order to

anticipate and take all necessary preventive measures so as to

diminish its exposure to security risks in the countries where it operates.

In addition, TOTAL has developed emergency plans and

procedures to respond to an oil spill or leak. These plans and

procedures are specific to each subsidiary and adapted to its

organization, activities and environment, and are consistent with the

Group’s anti-pollution plan. They are reviewed regularly and tested

through drills (refer to point 2.2.3 of chapter 7).

The Group has also developed control activities at various levels of

the organization relating to areas where information systems cover

all or part of the processes. Information Technology General

Controls aim to guarantee that information systems function and

are available as required, and that data integrity is guaranteed and

changes controlled.

At the Group level, TOTAL has set up an organization structured

around the Plan to Mobilize Resources Against Pollution

Information Technology Automated Controls aim to ensure the

integrity of data generated or supported by business applications,

particularly those that impact financial flows.

(PARAPOL) alert scheme to facilitate crisis management and

provide assistance regardless of geographical restrictions in the

event of pollution of marine, coastal or inland waters. Its main

objective is to facilitate access to internal and external experts and

physical response resources (FOST, Cedre, OSRL).

The outsourcing of some components of the Group’s IT

infrastructure to service providers poses specific risks and requires

the selection and development of additional controls of the

completeness, accuracy and validity of the information supplied

and received from such service providers. Accordingly, to ensure

continuous improvement, the Group assesses whether suitable

controls are implemented by the service providers concerned and

what controls are necessary within its own organization to maintain

these risks at an acceptable level.

With regard to risks related to climate issues, TOTAL is committed

to managing its energy consumption and develops processes to

improve its energy performance and that of its customers, in

accordance with its Safety Health Environment Quality Charter.

In its decision-making process, the risks and associated climate

issues (flaring, greenhouse gas emissions, CO price sensitivity) are

2

assessed prior to the presentation of the projects to the Executive

Committee.

In addition, in light of increasing legal risks (such as document

retention, personal data protection or copyright) and security risks

(

such as loss of information, external and internal threats or fraud),

In order to ensure the viability of its projects and long-term strategy

in light of the challenges raised by climate change, the Group

integrates, into the financial evaluation of investments presented to

the Group deploys information protection, document retention and

personal data protection policies. In order to reduce these risks, the

Group has employed an Operational Security Center to detect and

analyze IT system security events.

the Executive Committee, either a long-term CO

to $40 per ton (depending on the price of crude), or the actual price

of CO in a given country if higher. The Group performs sensitivity

tests to assess the ability of its asset portfolio to withstand an

increase in the price per ton of CO

2

price of $30

2

Risks related to the protection of intellectual assets

2

.

To mitigate the risks of third parties infringing its intellectual proprety

and the leak of know-how, TOTAL protects its rights under research

partnership agreements negotiated by the Group’s intellectual

property specialists, the terms and conditions of which are

consistent with the Group’s industrial and commercial strategy.

The Group has a policy of filing and maintaining patents, it monitors

technological developments in terms of freedom of use, and it

takes, when necessary, all appropriate measures to ensure the

protection of its rights.

In addition, TOTAL takes into account the 2°C scenario of the

International Agency for Energy (IAE) in its analysis of changes in

energy markets (notably that of hydrocarbons) and its development

strategy. As a result, the Group is prioritizing its projects and

focusing on hydrocarbon assets with moderate production

and processing costs that meet the highest environmental

and safety standards.

Finally, the Group assesses the vulnerability of its facilities to

climatic events so that their consequences do not affect the

integrity of the facilities or the safety of individuals. More generally,

natural hazards (climate-related risks as well as seismic, tsunami,

soil strength and other risks) are taken into account in the

conception of industrial facilities, which are designed to withstand

both normal and extreme conditions. The Group carries out a

systematic assessment of the possible repercussions of climate

In addition, since some of its employees have access to confidential

documents while performing their duties, TOTAL adopted internal rules

concerning the management of confidential information. The Group’s

intellectual proprety specialists also carry out awareness-raising

activities with the R&D teams so that the teams are better informed

about restrictions that may apply to the use of information and data.

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Risks and control

Internal control and risk management procedures

4

Ethical misconduct and non-compliance risks

longer be pursued in the United States for these same facts. The

mobililization of the entire Group and its efforts in this area continue

with the goal of ensuring the durability, evolution and continuous

improvment of this compliance program.

Fraud prevention

The Group deploys an anti-fraud and fraud prevention program and

has implemented a range of procedures and programs that help to

prevent, detect and limit different types of fraud. This effort is

supported by the business principles and values of individual

behavior described in the Group’s Code of Conduct and other

standards applied by the Group’s business segments.

Prevention of competition law infringement

A Group policy aimed at ensuring compliance with, and preventing

infringement of, competition law has been in place since 2014 and

is a follow-up to the various measures previously implemented by

the business segments. Its deployment is based, in particular, on

management and staff involvement, training courses that include an

e-learning module and an organization responsible for

implementing the program.

The Group has issued a directive for handling incidents of fraud that

has been widely distributed to employees, and has created an alert

system that employees can use to report acts including those that

may constitute fraud.

Prevention of market abuse and conflict of interests

The Group implements a policy to prevent market abuse linked to

trading on the financial markets that is based, in particular, on

internal ethics rules that are updated on a regular basis and widely

distributed to employees. In addition, the Group’s senior executives

and certain employees, in light of their positions, are asked to

refrain from carrying out any transactions, including hedging

transactions, on TOTAL shares or ADRs and in collective

investment plans (FCPE) invested primarily in TOTAL shares (as well

as derivatives related to such shares) on the day on which the

Company discloses its periodic results publications (quarterly,

interim and annual) as well as during the 30 calendar-day period

preceding such date. An annual campaign specifies the applicable

“blackout” periods.

In 2015, a large campaign on fraud risks to raise awareness of all

Group employees was launched. A guide on “Prevention and Fight

Against Fraud”, which highlights the different actions conducted

through the anti-fraud program, was distributed. A map of fraud

risks in the Group was finalized in late 2015, allowing priority

actions to be defined for 2016. A guide to the different types of

fraud risk, with descriptions of the main risks, was distributed in

2016. Fraud risk analyses are carried out in the subsidiaries. An

awareness campaign relating to the four major fraud risks was

launched at the end of 2016, particularly by means of videos widely

distributed within the Group.

The deployment of the anti-fraud and fraud prevention program

relies on the network of fraud risks coordinators within the business

segments and operational entities.

To prevent conflicts of interest, each of the Group’s senior

executives completes an annual statement declaring any conflicts

of interest to which they may be subject. By completing this

declaration, each senior executive also agrees to report to their

supervisor any conflict of interest that he or she has had or of which

he or she is aware in performing his or her duties. An internal rule

named “Conflicts of Interests”, published in 2015, reminds all

employees of their obligation to report to their supervisor any

situation that might give rise to a conflict of interests.

Prevention of corruption risks

General Management constantly reiterates the principle of zero

tolerance with regard to corruption. The Corruption Prevention

Policy was updated in 2016, thus reaffirming the Group’s

commitment to the matter. Internal rules have been published since

2011 in this area. They cover various areas where particular risks of

exposure to corruption may exist (business partnerships,

representatives dealing with public officials, procurement and sales,

donations, acquisitions, joint ventures, human resources, gifts and

invitations, etc.) in an effort to detect, assess and address risks at a

very early stage through an appropriate due diligence process.

4.3.2. Internal control procedures related

to the preparation and processing

of accounting and financial information

To support this program, awareness campaigns aimed at all

employees are conducted and training is regularly given to those in

positions with the greatest risk of exposure. For more information,

refer to point 3.7 of chapter 7.

Accounting information

The Group’s Accounting Department, which reports to the Group’s

Chief Financial Officer, draws up the Group’s Consolidated Financial

Statements according to IFRS standards based on the reporting

packages prepared quarterly by the consolidated entities, as well

as the statutory financial statements of TOTAL S.A. as parent

company and those of certain French entities. Each quarter, the

Consolidated Financial Statements and statutory financial

statements of TOTAL S.A. are reviewed by the Audit Committee

and the Board of Directors.

In addition, more than 370 Compliance Officers have been

appointed and trained within the business segments and

operational entities. Their role is to ensure that the program is

implemented at the local level.

Finally, under the settlements reached in 2013 between TOTAL,

the U.S. Securities and Exchange Commission and the U.S.

Department of Justice, an independent monitor had been

appointed for three years to conduct a review of anti-corruption

compliance and related internal control procedures implemented by

the Group and to recommend improvements, where necessary. In

July 2016, the monitor submitted his third and final report, in which

he certified that TOTAL had devised and implemented an

appropriate compliance program. As a result of this certification, the

U.S. authorities concluded, after having reviewed the monitor’s

report, that TOTAL had fulfilled all of its obligations, thus bringing an

end to the monitoring process. As a result, a court in the State of

Virginia granted a motion to dismiss on November 9, 2016, thereby

terminating the procedure directed at the Company, which can no

The Consolidated Financial Statements are prepared based on the

following principles:

– homogeneity of the accounting framework and standards; to this

end, the interpretation of accounting standards applicable to the

Consolidated Financial Statements is centralized by the Group’s

Accounting Department, which also distributes these standards

through formal procedures and an internal financial reporting

manual. The department monitors the effective implementation of

these standards through periodic formal communication with

managers of the business segments; and

Registration Document 2016. TOTAL

81

Risks and control

4

Internal control and risk management procedures

–

a supervised account closing process based mainly on

formalization of economic assumptions, judgments and

estimates, treatment of complex accounting transactions and on

respect of established timetables announced through Group

instructions disclosed to each entity.

The internal control process related to estimating reserves is

formalized in a special procedure described in detail in point 2.1.1.2

of chapter 2. The reserves evaluation and the related internal

control processes are audited periodically.

The strategic outlook published by the Group is prepared, in

particular, according to the long-term plans drawn up at the

business segment and Group levels, and on the work carried out at

each relevant level of the organization. The Board of Directors

reviews the strategic outlook each year.

Off-balance sheet commitments, which are valued according to the

financial reporting manual are reported on a quarterly basis to the

Audit Committee.

Internal control of accounting information is mainly focused around

the following areas:

Disclosure control

–

a monthly financial report is formalized by Group and business

segment control panels. This report and the Consolidated

Financial Statements use the same framework and standards. In

addition, the quarterly closing schedule is the same for preparing

the Consolidated Financial Statements and financial reporting;

a detailed analysis of differences as part of the quarterly

reconciliation between the Consolidated Financial Statements

and financial reporting is supervised by the Accounting

and Budget-Controlling Divisions, which are part of

the Finance Division;

a detailed analysis of differences between actual amounts and

the yearly budget established on a monthly basis is realized at

each level of the organization;

an annual reconciliation between the parent company financial

statements and the financial statements based on IFRS

standards is performed by entity;

The external communication of material information concerning the

Group’s performance is prepared for shareholders, financial

analysts, business partners, regulators, government entities and

other stakeholders as part of formal internal procedures, including

in particular disclosure controls and procedures. The aim of these

procedures is to confirm the quality and accuracy of external

communications intended for financial markets.

–

The Disclosure Committee ensures that these procedures are

followed and meets before press releases on results are submitted

to the Audit Committee and Board of Directors.

–

In addition, a specific process is in place for reporting any

information related to the Group’s accounting procedures, internal

control and auditing. This process is available to any shareholder,

employee or third party.

periodic controls are designed to ensure the reliability of

accounting information and mainly concern the processes for

preparing aggregated financial items;

a regular process for the signature of representation letters is

deployed at each level of the organization; and

The Group’s General Management is responsible for implementing

and assessing the internal control system for financial disclosure. In

this context, the implementation of the Group’s internal control

framework, based on the various components of the COSO

framework, is assessed internally at regular intervals within the

Group’s main entities.

–

the Disclosure Committee ensures the application of the

procedures in place.

Pursuant to the requirements introduced by Section 302 of the

Sarbanes-Oxley Act, the Chairman and Chief Executive Officer and

the Chief Financial Officer of the Company have conducted, with

the assistance of members of several departments of the Group

(e.g., Legal, Audit & Internal Control and Corporate

Communications), an evaluation of the effectiveness of the

disclosure controls and procedures, over the period covered by the

annual report on Form 20-F. For fiscal year 2016, the Chairman and

Chief Executive Officer and the Chief Financial Officer concluded

that the disclosure controls and procedures were effective.

Because of the important contribution of the equity affiliates to the

Group’s aggregated financial items, an annual review of the control

on these companies’ financial statements is implemented based on

a detailed questionnaire completed by each entity. This system is

integrated into the Group’s internal control framework.

Other financial information

Proved oil and gas reserves are evaluated annually by the relevant

entities. They are reviewed by the Reserves Committee, approved

by Exploration & Production’s senior management and then

validated by the Group’s General Management. They are also

presented to the Audit Committee each year.

The statutory auditors also perform those internal control audits

that they deem necessary as part of their mission to certify the

Financial Statements.

Refer to point 4.2 above (Control activities and assessment).

82

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Risks and control

Statutory auditors’ report

4

5

. Statutory auditors’ report

(

Article L. 225-235 of the French commercial code)

This is a free translation into English of the statutory auditors’ report on the financial statements issued in French and it is provided solely for

the convenience of English-speaking users.

This report should be read in conjunction with and construed in accordance with French law and professional auditing standards applicable

in France.

Year ended December 31, 2016

Statutory auditors’ report, prepared in accordance with Article L. 225-235 of the French commercial code

(Code de commerce), on the report prepared by the Chairman of the Board of Directors of TOTAL S.A.

To the Shareholders,

In our capacity as statutory auditors of TOTAL S.A. and in accordance with Article L. 225-235 of the French commercial code (Code de commerce),

we hereby report on the report prepared by the Chairman of your Company in accordance with Article L. 225-37 of the French Commercial

Code for the year ended December 31, 2016.

It is the Chairman’s responsibility to prepare and submit for the Board of Directors’ approval a report on the internal control and risk

management procedures implemented by the Company and to provide the other information required by Article L. 225-37 of the French

Commercial Code (Code de commerce) relating to matters such as corporate governance.

Our role is to:

–

report on any matters as to the information contained in the Chairman’s report in respect of the internal control and risk management

procedures relating to the preparation and processing of the accounting and financial information; and

confirm that the report also includes the other information required by Article L. 225-37 of the French Commercial Code (Code de commerce).

It should be noted that our role is not to verify the fairness of this other information.

We conducted our work in accordance with professional standards applicable in France.

Information on internal control and risk management procedures relating to the preparation and processing

of accounting and financial information

The professional standards require that we perform the necessary procedures to assess the fairness of the information provided in the Chairman’s

report in respect of the internal control and risk management procedures relating to the preparation and processing of the accounting and

financial information. These procedures consist mainly in:

–

obtaining an understanding of the internal control and risk management procedures relating to the preparation and processing of the accounting

and financial information on which the information presented in the Chairman’s report is based and of the existing documentation;

obtaining an understanding of the work involved in the preparation of this information and of the existing documentation;

obtaining an understanding of the evaluation process implemented and assessing the quality and adequacy of the documentation in respect

of the information relating to the evaluation of the internal control and risk management procedures;

–

determining if any material weaknesses in the internal control procedures relating to the preparation and processing of the accounting and

financial information that we would have noted in the course of our work are properly disclosed in the Chairman’s report.

On the basis of our work, we have no matters to report on the information relating to the Company’s internal control and risk management

procedures relating to the preparation and processing of the accounting and financial information contained in the report prepared by the

Chairman of the Board of Directors with Article L. 225-37 of the French Commercial Code (Code de commerce).

Other information

We confirm that the report prepared by the Chairman of the Board of Directors also contains the other information required by Article L. 225-37

of the French Commercial Code (Code de commerce).

Paris-La Défense, March 15, 2017

The statutory auditors

French original signed by

KPMG Audit

A division of KPMG S.A.

Michel Piette Partner

Valérie Besson Partner

ERNST & YOUNG Audit

Yvon Salaün Partner

Laurent Miannay Partner

Registration Document 2016. TOTAL

83

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TOTAL. Registration Document 2016

Corporate governance

5

Corporate governance

1.

Composition and practices of the Board of Directors

86

1.1.

1.2.

1.3.

Composition of the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .87

Practices of the Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97

Statement regarding corporate governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .111

2.

General Management

112

2

.1.

.2.

The Executive Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .112

The Group Performance Management Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .112

3

.

Shares held by the administration and management bodies

Statutory auditors

112

114

4

.1.

.2.

Auditor’s term of office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .114

Fees received by the statutory auditors (including members of their networks) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .114

Document de référence 2016. TOTAL

85

Corporate governance

5

Composition and practices of the Board of Directors

Report of the Chairman of the Board of Directors (Article L. 225-37 of the French Commercial Code)

Pursuant to Article L. 225-37 of the French Commercial Code, the

Report of the Chairman of the Board of Directors must include

certain information related to corporate governance, in particular

the composition of the Board of Directors, the Board of Directors’

application of the principle of balanced representation of men and

women, the preparation and organization of the work of the Board

of Directors, internal control and risk management procedures

implemented by the Company, any limits set by the Board of

Directors concerning the powers of the Chief Executive Officer, the

financial risks related to the effects of climate change and measures

adopted by the company to reduce them and implement a low-

carbon strategy in all its activities, the bylaws concerning

participation in Shareholders’ Meetings, the principles and rules

applied to determine the compensation and other benefits granted

to the executive and non-executive directors (mandataires sociaux),

and the information required by Article L. 225-100-3 of the French

Commercial Code.

Information related to the internal control and risk management

procedures implemented within the Group and to financial risks

related to the effects of climate change and measures adopted by

the Company to reduce them and implement a low-carbon strategy

in all its activities is presented in chapter 4, points 1 and 4;

information related to bylaws concerning participation in

Shareholders’ Meetings is presented in chapter 9, point 2.4;

information related to the principles and rules applied to determine

the compensation and other benefits granted to the executive and

non-executive directors (mandataires sociaux) is presented in

chapter 6, point 6, and information likely to have an impact in the

event of a public offering and required by Article L. 225-100-3 of

the French Commercial Code is presented in chapter 8, point 4.5.

This information collectively forms the Report of the Chairman of

the Board of Directors prepared pursuant to Article L. 225-37 of the

French Commercial Code (refer to the cross-reference list specific

to the Report of the Chairman of the Board of Directors, page 381

of this Registration Document).

The information related to the composition of the Board of

Directors, the Board of Directors’ application of the principle of

balanced representation of men and women, the preparation and

organization of the work of the Board of Directors and any limits set

by the Board of Directors concerning the powers of the Chief

Executive Officer is presented below in point 1.

The information contained in the Report of the Chairman of the

Board of Directors was prepared with the assistance of several of

the Company’s corporate functional divisions, including in particular

the Legal, Finance and Corporate Audit & Internal Control

Departments. After the sections relevant to their respective duties

were reviewed by the Governance and Ethics Committee, the

Compensation Committee and the Audit Committee, the

information was approved by the Board of Directors at its meeting

on March 15, 2017.

1

. Composition and practices

of the Board of Directors

As of February 8, 2017, the Company is administered by a Board of Directors composed of 12 members, including: 11 directors elected by

the Annual Shareholders’ Meeting, including 1 director elected on the proposal of the employee shareholders, and 1 director representing

employees appointed by the Central Works Council.

8

0

%

54.5

%

45.5

%

5

non-French directors

(1)

(2)

independent directors

women

men

1

0

meetings

88.4

%

1

executive session

of the Board of Directors

in 2016

attendance rate

chaired by the Lead Independent

Director

(1) Excluding the director elected on the proposal of the employee shareholders and the director representing employees, in accordance with the recommendations of the AFEP-MEDEF

Code (point 8.3).

(2) Excluding the director representing employees, in accordance with Article L. 225-27-1 of the French Commercial Code.

86

TOTAL. Registration Document 2016

Corporate governance

Composition and practices of the Board of Directors

5

1.1. Composition of the Board of Directors

The Company is administered by a Board of Directors composed of

2 members. The members of the Board of Directors include one

As of February 8, 2017, the Board of Directors had eight

independent directors, i.e., 80%⁽¹⁾of the directors

(refer to point 1.1.3).

1

director elected on the proposal of the employee shareholders

pursuant to the provisions of Article L. 255-23 of the French

Commercial Code (hereafter referred to as the “director

representing employee shareholders”), and one director

representing employees appointed by the Central Works Council

pursuant to the provisions of Article L. 225-27-1 of the French

Commercial Code.

Mr. Patrick Pouyanné has served as Chairman of the Board of

Directors since December 19, 2015, the date on which the

functions of Chairman of the Board of Directors and Chief Executive

Officer of TOTAL S.A. were combined following the decision made

by the Board of Directors at its meeting on December 16, 2015

(refer to point 1.2.1). Since December 19, 2015, Mr. Pouyanné has

Directors are appointed for a three-year term (Article 11 of the

Company’s bylaws) by the Annual Shareholders’ Meeting, with the

exception of the director representing employees, who is appointed

by the Central Works Council.

therefore been Chairman and Chief Executive Officer of TOTAL S.A.

At its meeting on December 16, 2015, the Board of Directors also

appointed Ms. Patricia Barbizet as Lead Independent Director for

the duration of her term of office as director. Her designation took

effect on December 19, 2015. Her duties are described in point

1.2.2 below.

The terms of office of the members of the Board are staggered to

space more evenly the renewal of appointments and to ensure the

continuity of the work of the Board of Directors and its Committees,

in accordance with the recommendations made in the AFEP-

MEDEF Code, which the Company uses as a reference.

The profiles, experience and expertise of the directors are detailed

in the biographies below.

Overview of the Board of Directors

As of February 8, 2017

Age

Sex

Inde-

Audit

Governance Compensation

and Ethics Committee Committee appointment

Committee

Strategic

First

Years’

service on

the Board

Expiry

of term

of office

pendent Committee

Chairman and Chief

Executive Officer – Director

Patrick Pouyanné

53

M

C

2015

2

2018

Directors

Patrick Artus

65

61

M

F

•

2009

2008

8

9

2018

2017

Patricia Barbizet⁽^a⁾

Marie-Christine

Coisne-Roquette

Paul Desmarais, Jr

Maria van der Hoeven

Anne-Marie Idrac

Barbara Kux

C

•

60

62

67

65

62

55

66

F

M

F

•

C

2011

2002

2016

2012

2011

2012

2016

6

15

1

2017

2019

2018

2017

2019

•

F

•

5

F

•

6

Gérard Lamarche

Jean Lemierre

M

•

C

5

1

Director representing

employee shareholders

Renata Perycz

53

62

F

n/a

2016

2014

1

3

2019

2017

Director representing

employees

Marc Blanc⁽^b⁾

M

•

(

a) Lead Independent Director.

b) Designated by the Central Works Council of UES Amont Holding on November 4, 2014. Marc Blanc’s office will expire at the end of the Annual Shareholders’ Meeting of May 26, 2017

and the UES Amont Central Works Council – Global Services – Holding shall designate the new director representing employees pursuant to the provisions of Article L. 225-27-1 of the

French Commercial Code and of the Company’s bylaws. The new director representing employees will be designated for a three-year term to expire at the end of the Annual

Shareholders’ Meeting held in 2020 to approve the 2019 financial statements.

C: Chairperson of the Committee.

(1) Excluding the director representing employee shareholders and the director representing employees, in accordance with the recommendations of the AFEP-MEDEF Code (point 8.3).

Registration Document 2016. TOTAL

87

Corporate governance

5

Composition and practices of the Board of Directors

Changes to the composition of the Board of Directors and Committees

As of February 8, 2017

Board of Directors

Date

Departure

Appointment

Renewal

0

5/24/2016

Thierry Desmarest

Gunnar Brock⁽^a⁾

Charles Keller⁽^b⁾

Maria van der Hoeven⁽^a⁾

Jean Lemierre⁽^a⁾

Gérard Lamarche

Renata Perycz⁽^b⁾

Audit Committee

0

5/24/2016

Charles Keller⁽^b⁾

Governance and Ethics Committee

0

Thierry Desmarest

Gunnar Brock⁽^a⁾

Compensation Committee

Strategic Committee

0

5/24/2016

Gunnar Brock⁽^a⁾

0

Thierry Desmarest

Gunnar Brock⁽^a⁾

(

a) Independent director.

(b) Director representing employee shareholders.

(1)

.1.1. Profile, experience and expertise of the directors (information as of December 31, 2016 )

1

Patrick Pouyanné

Born on June 24, 1963 (French).

Chairman and Chief Executive Officer of TOTAL S.A. Director of TOTAL S.A. since May 29, 2015 until 2018. Chairman of the Strategic

Committee. Holds 72,470 TOTAL shares and 8,177.02 units of the TOTAL ACTIONNARIAT FRANCE collective investment fund.

Main function: Chairman and Chief Executive Officer of TOTAL S.A.*

A graduate of École Polytechnique and a Chief Engineer of France’s Corps des Mines, Mr. Pouyanné held, between 1989 and 1996, various

administrative positions in the Ministry of Industry and other cabinet positions (technical advisor to the Prime Minister – Édouard Balladur –

in the fields of the Environment and Industry from 1993 to 1995, Chief of staff for the Minister for Information and Aerospace Technologies

–

François Fillon – from 1995 to 1996). In January 1997, he joined TOTAL’s Exploration & Production division, first as Chief Administrative Officer

in Angola, before becoming Group representative in Qatar and President of the Exploration and Production subsidiary in that country in 1999.

In August 2002, he was appointed President, Finance, Economy and IT for Exploration & Production. In January 2006, he became Senior Vice

President, Strategy, Business Development and R&D in Exploration & Production and was appointed a member of the Group’s Management

Committee in May 2006. In March 2011, Mr. Pouyanné was appointed Deputy General Manager, Chemicals, and Deputy General Manager,

Petrochemicals. In January 2012, he became President, Refining & Chemicals and a member of the Group’s Executive Committee.

On October 22, 2014, he was appointed Chief Executive Officer of TOTAL. On May 29, 2015, he was appointed by the Annual

Shareholders’ Meeting as director of TOTAL S.A. for a three-year term. At its meeting on December 16, 2015, the Board of Directors of

TOTAL appointed him as Chairman of the Board of Directors as of December 19, 2015 for the remainder of his term of office as director.

Mr. Pouyanné is therefore now Chairman and Chief Executive Officer.

Current directorships

Chairman and Chief Executive Officer of TOTAL S.A.*

Directorships that have expired in the previous five years

–

– Chairman and Director of Total Raffinage Chimie until 2014

–

Chairman and Director of Total Petrochemicals & Refining

SA/NV until 2014

(

1) Including information pursuant to point 4 of Article L. 225-102-1 of the French Commercial Code or item 14.1 of Annex I of EC Regulation No. 809/2004 of April 29, 2004.

For information related to directorships, company names marked with an asterisk are publicly listed companies and underlined companies are companies that do not belong

to the group in which the director has his or her main duties.

88

TOTAL. Registration Document 2016

Corporate governance

Composition and practices of the Board of Directors

5

Patrick Artus

Born on October 14, 1951 (French).

Director of TOTAL S.A. since 2009. Last renewal: May 29, 2015 until 2018. Independent director.

Member of the Audit Committee and the Strategic Committee. Holds 1,000 TOTAL shares.

Main function: Head of the research department and member of the Executive Committee of Natixis

A graduate of École Polytechnique, École Nationale de la Statistique et de l’Administration Économique (ENSAE) and Institut d’études

politiques de Paris, Mr. Artus began his career at INSEE (the French National Institute for Statistics and Economic Studies) where his work

included economic forecasting and modeling. He then worked at the Economics Department of the OECD (1980), later becoming the Head

of Research at the ENSAE from 1982 to 1985. He was scientific advisor at the research department of the Banque de France, before joining

the Natixis Group as the head of the research department, and has been a member of its Executive Committee since May 2013. He is an

associate professor at the University of Paris I, Sorbonne. He is also a member of the Cercle des Économistes.

Current directorships

Directorships that have expired in the previous five years

–

Director of TOTAL S.A.*

Director of IPSOS*

None.

Patricia Barbizet

Born on April 17, 1955 (French).

Director of TOTAL S.A. since 2008. Last renewal: May 16, 2014 until 2017. Independent director. Lead Independent Director, Chairwoman

of the Governance and Ethics Committee, member of the Compensation Committee and Strategic Committee. Holds 1,034 TOTAL shares.

Main function: Chief Executive Officer of Artémis

A graduate of École Supérieure de Commerce de Paris in 1976, Ms. Barbizet started her career in the Treasury division of Renault Véhicules

Industriels, and then as CFO of Renault Crédit International (1984-1989). In 1989, Ms. Barbizet joined the group of François Pinault as CFO.

Then appointed as Deputy Director of Finance and Communication of Pinault-CFAO, she participated, in 1992, in the creation of Artémis,

of which she was also appointed CEO. Ms. Barbizet is Vice Chairperson of the Board of Directors of the group Pinault-Printemps-Redoute,

which has become Kering in 2013. Ms. Barbizet has been Chairwoman of the Board of Christie’s from 2002 to 2016, and CEO of the

auction house from 2014 to 2016, while maintaining her role of Chairwoman. She has served as Director of the Boards of Bouygues,

Air France-KLM and PSA Peugeot-Citroën. She has been Chairwoman of the Investment Committee of the Fonds Stratégique

d’Investissement (FSI) from 2008 to 2013.

Current directorships

Directorships that have expired in the previous five years

–

Director of TOTAL S.A.*

Director and Vice Chairperson of the Board of Directors

of Kering S.A.*

Vice Chairwoman of Christie’s International Plc (England)

Director of Groupe Fnac* (S.A.)

Director and Chief Executive Officer of Artémis (S.A.)

Chief Executive Officer (non-Director) of Financière Pinault (S.C.A.)

Member of the Supervisory Board of Financière Pinault (S.C.A.)

Permanent representative of Artémis, member of the Board

of Directors of Agefi (S.A.)

Permanent representative of Artémis, member of the Board

of Directors of Sebdo le Point (S.A.)

Member of the Management Board of Société Civile du Vignoble

de Château Latour (société civile)

– Chairwoman of Christie’s International Plc until January 1, 2017

– CEO of Christie’s International Plc until January 1, 2017

– Member of the supervisory board of Peugeot S.A.*

until April 26, 2016

– Director of Société Nouvelle du Théâtre Marigny (S.A.) until 2015

– Director of Air France-KLM* (S.A.) until 2013

– Director of Fonds Stratégique d’Investissement (S.A.) until 2013

– Director of Bouygues* (S.A.) until 2013

–

– Director of TF1* (S.A.) until 2013

– Board member of Gucci Group NV until 2013

– Non-executive Director of Tawa Plc* until 2012

– Deputy Chief Executive Officer of Société Nouvelle du Théâtre

Marigny until 2012

–

Director of Yves Saint Laurent (S.A.S.)

Deputy manager of Palazzo Grazzi (Italy)

Member of the supervisory board of Ponant

Permanent representative of Artémis, member of the supervisory

board of Collection Pinault Paris.

Registration Document 2016. TOTAL

89

Corporate governance

5

Composition and practices of the Board of Directors

Marc Blanc

Born on December 7, 1954 (French).

Director representing employees of TOTAL S.A. as of November 4, 2014 until 2017.

Member of the Strategic Committee. Holds 326 TOTAL shares and 847.51 units of the TOTAL ACTIONNARIAT FRANCE collective

investment fund and 21.33 units of the TOTAL FRANCE CAPITAL + fund.

Main function: Group Employee

After joining the Group in 1980 as a refinery operator at the Grandpuits Refinery, Mr. Blanc has, since 1983, exercised a number of trade

union functions, in particular as Secretary of the European Elf Aquitaine Committee and then at TOTAL S.A. from 1991 to 2005. From 1995

to 1997, he worked as Secretary General of the CFDT Seine-et-Marne trade union for the Chemicals industry (Syndicat Chimie CFDT), and

then, from 1997 to 2001, as Deputy Secretary General of the CFDT trade union for the power and Chemicals industries in the Île-de-France

region (Syndicat Énergie Chimie, SECIF), where he became Secretary General in 2001 and continued in this role until 2005. Subsequently,

from 2005 to 2012, Mr. Blanc acted as Federal Secretary of the CFDT chemical and power industry federation (Fédération Chimie Énergie)

where he was responsible first for industrial policy and then for Sustainable Development, Corporate Social Responsibility, international

affairs (excluding Europe), and the oil and chemicals sectors. From 2009 to 2014, he was Director of the Chemicals and Power Industry

Research and Training Institute (IDEFORCE association) as well as Advisor to the Economic, Social and Environmental Council (Conseil

Économique, Social et Environnemental, CESE) where he sat as a member of the Economic and Finance section as well as of the

Environment section. In particular, he was responsible for submitting a report on the societal challenges of biodiversity (La biodiversité,

relever le défi sociétal) in June 2011, and was the co-author with Alain Bougrain-Dubourg of a follow-up opinion entitled “Acting for

Biodiversity” (Agir pour la Biodiversité) submitted in 2013. Mr. Blanc was also a member of the CESE’s temporary Committee on the “annual

report on the state of France” in October 2013.

Current directorships

Director representing employees of TOTAL S.A.*

Directorships that have expired in the previous five years

–

None.

Marie-Christine Coisne-Roquette

Born on November 4, 1956 (French).

Director of TOTAL S.A. since 2011. Last renewal: May 16, 2014 until 2017. Independent director.

Chairwoman of the Audit Committee and member of the Compensation Committee. Holds 3,778 TOTAL shares.

Main function: Chairwoman of Sonepar S.A.S.

Ms. Coisne-Roquette has a Bachelor’s Degree in English. A lawyer by training, with a French Masters’ in Law and a Specialized Law

Certificate from the New York bar, she started a career as an attorney in 1981 at the Paris and New York bars, as an associate of Cabinet

Sonier & Associés in Paris. In 1984, she joined the Board of Sonepar as a director and gave up her law career in 1988 to work full time for

the family group. As Chairwoman of the family holding company, Colam Entreprendre, and later of the Sonepar Supervisory Board, she

consolidated family ownership, reorganized the Group structures and reinforced the shareholders’ Group to sustain its growth strategy.

Chairwoman and Chief Executive Officer of Sonepar as of 2002, and then Chairwoman of the Board of Directors, Marie-Christine Coisne-Roquette

became Chairwoman of Sonepar S.A.S. on May 27, 2016. At the same time, she heads Colam Entreprendre as its Chairwoman and Chief

Executive Officer. Formerly a member of the Young Presidents’ Organization (YPO), she served the MEDEF (France’s main employers’

association) as Executive Committee member for 13 years and was Chairwoman of its Tax Commission from 2005 to 2013. She was a

member of the Economic, Social and Environmental Council from 2013 and 2015 and is currently a Director of TOTAL S.A.

Current directorships

–

Director of TOTAL S.A.*

Chairwoman of Sonepar S.A.S.

Chairwoman and Chief Executive Officer of Colam Entreprendre

Permanent representative of Colam Entreprendre, co-manager

of Sonedis (société civile)

– Permanent representative of Colam Entreprendre, Director

of Sovemarco Europe (S.A.)

– Chief Executive Officer of Sonepack S.A.S.

– Co-manager of Développement Mobilier & Industriel (D.M.I.)

(société civile)

–

Manager of Ker Coro (société civile immobilière)

90

TOTAL. Registration Document 2016

Corporate governance

Composition and practices of the Board of Directors

5

Directorships that have expired in the previous five years

–

Chairwoman of the Board of Directors of Sonepar S.A. until 2016

Permanent representative of Sonepar, Director of Sonepar

France until 2014

Director of Hagemeyer Canada, Inc. until 2013

Chairwoman of the Supervisory Board of Otra N.V. until 2013

Director of Sonepar Canada, Inc. until 2013

Chairwoman of the Supervisory Board of Sonepar Deutschland

GmbH until 2013

Director of Sonepar Ibérica until 2013

Director of Sonepar Italia Holding until 2013

Director of Sonepar Mexico until 2013

Member of the Supervisory Board of Sonepar Nederland B.V.

until 2013

– Director of Sonepar USA Holdings, Inc. until 2013

– Director of Feljas et Masson S.A.S. until 2013

– Permanent representative of Colam Entreprendre, member

of the Board of Directors at Cabus & Raulot (S.A.S.) until 2013

– Chief Executive Officer of Sonepar S.A. until 2012

– Permanent representative of Sonepar S.A., co-manager

of Sonedis (société civile) until 2012

– Permanent representative of Sonepar International (S.A.S.)

until 2012

– Chairwoman of the Board of Directors of Sonepar Mexico

until 2012

–

Paul Desmarais, Jr

Born on July 3, 1954 (Canadian).

Director of TOTAL S.A. since 2002. Last renewal: May 16, 2014 until 2017. Holds 2,000 ADRs (corresponding to 2,000 TOTAL shares).

Main function: Chairman of the Board & Co-Chief Executive Officer of Power Corporation of Canada*

A graduate of McGill University in Montreal and Institut européen d’administration des affaires (INSEAD) in Fontainebleau, Mr. Desmarais was

first appointed as Vice President (1984), and then as President and Chief Operating Officer (1986), Executive Vice Chairman of the Board

(

1989), Executive Chairman of the Board (1990), Chairman of the Executive Committee (2006) and Executive Co-Chairman of the Board

2008) of Power Financial Corporation, a company he helped found in 1984. Since 1996, he has also served as Chairman of the Board and

Co-Chief Executive Officer of Power Corporation of Canada.

Current directorships

–

Director of TOTAL S.A.*

Chairman of the Board & Co-Chief Executive Officer of Power

Corporation of Canada*

Executive Co-Chairman of the Board of Power Financial

Corporation* (Canada)

Executive Chairman of the Board of Directors and Co-Chief

Executive Officer of Pargesa Holding S.A.* (Switzerland)

Director and member of the Executive Committee of Great-West

Lifeco Inc.* (Canada)

– Director and member of the Nomination, Compensation and

Governance Committee of LafargeHolcim Ltd* (Switzerland)

– Director and member of the Executive Committee of

The Canada Life Assurance Company (Canada)

– Director and member of the Executive Committee of

The Canada Life Financial Corporation (Canada)

– Director and member of the Executive Committee of

IGM Financial Inc.* (Canada)

– Director and Chairman of the Board of 171263 Canada Inc.

(Canada)

– Director of 152245 Canada Inc. (Canada)

– Director of GWL&A Financial Inc. (United States of America)

– Director of Great-West Financial (Nova Scotia) Co. (Canada)

– Director of Great-West Life & Annuity Insurance Company

of New York (United States of America)

– Director of Power Communications Inc. (Canada)

– Director and Chairman of the Board of Power Corporation

International (Canada)

– Director and member of the Executive Committee of

Putnam Investments, LLC (United States of America)

– Member of the Supervisory Board of Power Financial

Europe B.V. (Netherlands)

– Director and member of the Executive Committee of

The Canada Life Insurance Company of Canada (Canada)

– Director and Deputy Chairman of the Board of Groupe

de Communications Square Victoria Inc. (Canada)

– Member of the Supervisory Board of Parjointco N.V. (Netherlands)

– Director of SGS S.A.* (Switzerland)

–

Director and member of the Executive Committee of Great-West

Life Assurance Company (Canada)

Director and member of the Executive Committee of Great-West

Life & Annuity Insurance Company (United States of America)

Director of Great-West Financial (Canada) Inc. (Canada)

Vice Chairman of the Board, Director and member of

the Standing Committee of Groupe Bruxelles Lambert S.A.*

–

(Belgium)

–

Director and member of the Executive Committee of

Investors Group Inc. (Canada)

Director and member of the Executive Committee of

London Insurance Group Inc. (Canada)

Director and member of the Executive Committee of

London Life Insurance Company (Canada)

Director and member of the Executive Committee of

Mackenzie Inc.

Director and Deputy Chairman of the Board of La Presse,

ltée (Canada)

Director and Deputy Chairman of Gesca ltée (Canada)

Registration Document 2016. TOTAL

91

Corporate governance

5

Composition and practices of the Board of Directors

Directorships that have expired in the previous five years

–

Director of Canada Life Capital Corporation Inc. (Canada)

until 2015

Director of Lafarge* (France) until 2015

– Director of GDF Suez* (France) until 2014

– Director and member of the Executive Committee of

Crown Life Insurance Company (Canada) until 2012

Maria van der Hoeven

Born on September 13, 1949 (Dutch).

Director of TOTAL S.A. since 2016 until 2019. Independent director. Holds 1,000 TOTAL shares.

Main function: Independent director

Ms. van der Hoeven, after a teaching training, was a professor in economic sciences and administration then a school counselor. She was

then Executive Director of the Administrative Center for vocational training for adults in Maastricht for seven years and then Director of the

technologic Center of Limbourg. She was member of the Dutch Parliament, served as Minister of Education, Culture and Science from 2002

to 2007, and was Minister of Economic Affairs of the Netherlands from 2007 to 2010. Ms. van der Hoeven then served as Executive Director

of the International Energy Agency (IEA) from September 2011 to August 2015. During this period, she contributed to increasing the number

of members of the Agency and emphasized the close link between climate and energy policy. In October 2015, Ms. van der Hoeven joined

the Board de Trustees of Rocky Mountain Institute (USA) and in September 2016, member of the supervisory board of Innogy SE* (Germany).

Current directorships

Directorships that have expired in the previous five years

–

Director of TOTAL S.A.*

Member of the Supervisory Board of Innogy SE*

Member of the Board de Trustees of Rocky Mountain Institute (USA)

– Member of the Supervisory Board of RWE AG (Germany)

Anne-Marie Idrac

Born on July 27, 1951 (French).

Director of TOTAL S.A. since 2012. Last renewal: May 29, 2015 until 2018. Independent director. Member of the Governance and Ethics

Committee. Holds 1,250 TOTAL shares.

Main function: Chairwoman of the Supervisory Board of Toulouse-Blagnac Airport

A graduate of Institut d’Etudes Politiques de Paris and formerly a student at École Nationale d’Administration (ENA -1974), Ms. Idrac began

her career holding various positions as a senior civil servant at the Ministry of Infrastructure (Ministère de l’Équipement) in the fields of

environment, housing, urban planning and transportation. She served as Executive Director of the public institution in charge of the

development of Cergy-Pontoise (Établissement public d’Aménagement de Cergy-Pontoise) from 1990 to 1993 and Director of land transport

from 1993 to 1995. Ms. Idrac was State Secretary for Transport from May 1995 to June 1997, elected member of Parliament for Yvelines

from 1997 to 2002, regional councilor for Île-de-France from 1998 to 2002 and State Secretary for Foreign Trade from March 2008 to

November 2010. She also served as Chairwoman and Chief Executive Officer of RATP from 2002 to 2006 and then as Chairwoman of

SNCF from 2006 to 2008.

Current directorships

Directorships that have expired in the previous five years

–

Director of TOTAL S.A.*

Director of Bouygues*

Director of Saint Gobain*

Chairwoman of the Supervisory Board of Toulouse-Blagnac Airport

– Member of the Supervisory Board of Vallourec* until 2015

– Director of Mediobanca S.p.A.* (Italy) until 2014

92

TOTAL. Registration Document 2016

Corporate governance

Composition and practices of the Board of Directors

5

Barbara Kux

Born on February 26, 1954 (Swiss).

Director of TOTAL S.A. since 2011. Last renewal: May 16, 2014 until 2017. Independent director. Member of the Governance and Ethics

Committee and the Strategic Committee. Holds 1,000 shares.

Main function: Independent director

Holder of an MBA (with honors) from INSEAD in Fontainebleau, Ms. Kux joined McKinsey & Company in 1984 as a Management Consultant,

where she was responsible for strategic assignments for international groups. After serving as manager for development of emerging markets

at ABB and then at Nestlé between 1989 and 1999, she was appointed Executive Director of Ford in Europe from 1999 to 2003. In 2003,

Ms. Kux became a member of the Executive Committee of the Philips group and, starting in 2005, was in charge of the supply chain and

Sustainable Development. From 2008 to 2013, she was a member of the Executive Board of Siemens AG, a global leader in high technology

present in the energy and renewable energy sector. She was responsible for Sustainable Development and the supply chain of the group.

Since 2013, she has been a director of various world-class international companies and is also a member of the Advisory Board of INSEAD.

In 2016, she has been appointed by the European Commission to the newly established high level Decarbonisation Pathways Panel.

Current directorships

Directorships that have expired in the previous five years

–

Director of TOTAL S.A.*

Director of Engie S.A.*

Director of Pargesa Holding S.A.*

Member of the Supervisory Board of Henkel*

Director of Umicore*

– Member of the Management Board of Siemens AG* until 2013

Member of the Board of Directors of Firmenich S.A.

Gérard Lamarche

Born on July 15, 1961 (Belgian).

Director of TOTAL S.A. since 2012. Last renewal: May 24, 2016 until 2019. Independent director. Chairman of the Compensation Committee

and member of the Audit Committee. Holds 2,929 TOTAL shares.

Main function: Deputy Managing Director of Groupe Bruxelles Lambert*

Mr. Lamarche graduated in economic science from Louvain-La-Neuve University and is also a graduate of INSEAD business school (Advanced

Management Program for Suez Group Executives). He also attended the Global Leadership Series training course at the Wharton International

Forum in 1998-99. He started his career at Deloitte Haskins & Sells in Belgium in 1983, before becoming a consultant in mergers and

acquisitions in the Netherlands in 1987. In 1988, Mr. Lamarche joined Société Générale de Belgique as an investment manager. He was

promoted to the position of management controller in 1989 before becoming a consultant in strategic operations from 1992 to 1995.

He joined Compagnie Financière de Suez as a project manager for the Chairman and Secretary of the Executive Committee (1995-1997),

before being appointed as the acting Managing Director in charge of Planning, Management Control and Accounts. In 2000, Mr. Lamarche

moved to NALCO (the American subsidiary of the Suez group and the world leader in the treatment of industrial water) as Director and Chief

Executive Officer. He was appointed Chief Financial Officer of the Suez group in 2003. In April 2011, Mr. Lamarche became a director on the

Board of Directors of Groupe Bruxelles Lambert (GBL). He has been the Deputy Managing Director since January 2012. Mr. Lamarche is

currently a director of LafargeHolcim Ltd (Switzerland), TOTAL S.A. and SGS S.A.

Current directorships

Directorships that have expired in the previous five years

–

Director of TOTAL S.A.*

– Director of Lafarge until 2016

– Director and Chairman of the Audit Committee of Legrand*

until 2016

Deputy Managing Director of Groupe Bruxelles Lambert*

Director and Chairman of the Audit Committee of

LafargeHolcim Ltd* (Switzerland)

– Non-voting member (censeur) of Engie S.A.* until 2015

–

Director of SGS S.A.* (Switzerland)

Registration Document 2016. TOTAL

93

Corporate governance

5

Composition and practices of the Board of Directors

Jean Lemierre

Born on June 26, 1950 (French).

Director of TOTAL S.A. since 2016 until 2019. Independent director. Holds 1,000 TOTAL shares.

Main function: Chairman of the Board of Directors of BNP Paribas*

Mr. Lemierre is a graduate of the Institut d’études politiques de Paris and the École Nationale d’Administration; he also has a law degree. Mr.

Lemierre held various positions at the French tax authority, including as Head of the fiscal legislation department and Director-General of

Taxes. He was then appointed as Cabinet Director at the French Ministry of Economy and Finance before becoming Director of the French

Treasury in October 1995. Between 2000 and 2008, he was President of the European Bank for Reconstruction and Development (EBRD).

He became an advisor to the Chairman of BNP Paribas in 2008 and has been Chairman of BNP Paribas since December 1, 2014.

During his career, Mr. Lemierre has also been a member of the European Monetary Committee (1995-1998), Chairman of the European

Union Economic and Financial Committee (1999-2000) and Chairman of the Paris Club (1999-2000). He then became a member of the

International Advisory Council of China Investment Corporation (CIC) and the International Advisory Council of China Development Bank

(CDB). He is currently Chairman of the Centre d’Etudes Prospectives et d’Informations Internationales (CEPII), and a member of the Institute

of International Finance (IIF).

Current directorships

Directorships that have expired in the previous five years

–

Chairman of the Board of Directors of BNP Paribas*

Director of TEB Holding AS (Turkey)

Director of TOTAL S.A.*

Chairperson of Centre d’Études Prospectives et d’Informations

Internationales (CEPII)

– Director of Bank Gospodarki Zywnosciowej (BGZ) (Pologne) until

2014

–

Member of Institute of International Finance (IIF)

Member of International Advisory Board of Orange

Member of International Advisory Council of China Development

Bank (CDB)

–

Member of International Advisory Council of China Investment

Corporation (CIC)

Member of International Advisory Panel (IAP) of Monetary

Authority of Singapore (MAS)

Renata Perycz

Born on November 05, 1963 (Polish).

Director representing employee shareholders of TOTAL S.A. since 2016 until 2019. Holds 280 TOTAL shares and 1,211.30 units of the

TOTAL ACTIONNARIAT INTERNATIONAL CAPITALISATION and 36.10 units of the Total INTL Capital collective investment funds.

Main function: Human Resources and Internal Communications Director of Total Polska sp. z.o.o.

Ms. Perycz is a graduate of the University of Warsaw, the Ecole des Hautes Etudes Commerciales (HEC) and the SGH Warsaw School of

Economics. Ms. Perycz entered the Group in 1993 as a logistics and sales manager for Total Polska. In 2000, she became a supplies and

logistics manager before becoming head of the subsidiary’s purchasing department in 2003. In 2007, she became Total Polska sp. z.o.o.’s

Human Resources and Purchasing director. Since 2013, Ms. Perycz has been the subsidiary’s Human Resources and Internal

Communications director. She has also been an elected member, representing unit-holders, of the Supervisory Board of FCPE Total

Actionnariat International Capitalisation since 2012.

Current directorships

Director representing employee shareholders of TOTAL S.A.*

Directorships that have expired in the previous five years

–

None.

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Directorships of TOTAL S.A. expired in 2016

Thierry Desmarest

– Member of the Board of Syngenta AG*

– Chairman of the Board of Mölnlycke Health Care Group

Member of the Board of Stena AB

Born on December 18, 1945 (French).

–

A graduate of École Polytechnique and an Engineer of France’s

Corps des Mines engineering school, Mr. Desmarest served as

Director of Mines and Geology in New Caledonia, then as technical

advisor at the Offices of the Minister of Industry and the Minister of

Economy. He joined TOTAL in 1981, where he held various

management positions, then served as President of

Directorships that have expired in the previous five years

– Director of TOTAL S.A.* until 2016

– Chairman of the Board of Rolling Optics until 2016

– Member of the Supervisory Board of Spencer Stuart Scandinavia

until 2011

Exploration & Production until 1995. He served as Chairman and

Chief Executive Officer of TOTAL from May 1995 until

February 2007, and then as Chairman of the Board of TOTAL until

May 21, 2010. He was then appointed Honorary Chairman of

TOTAL where he remains a director, and was Chairman of the Total

Foundation until January 2015. On October 22, 2014, he was again

appointed as Chairman of the Board of Directors for a term of office

that expired on December 18, 2015.

Charles Keller

Born on November 15, 1980 (French).

A graduate of École Polytechnique and École des Hautes Études

Commerciales (HEC), Mr. Keller joined the Group in 2005 at the

refinery in Normandy as a performance auditor. In 2008, he was

named Project Manager at the Grandpuits refinery to improve the

site’s energy efficiency and oversee its reliability plan. In 2010, he

joined Exploration & Production and Yemen LNG as head of the

Production Support department in charge of optimizing the plant.

Since February 2014, he has been a reservoir engineer at the head

office in La Défense. While performing his duties in the refining

sector, Mr. Keller sat on the Works Committees of the two refineries

and contributed to the activities of the Central Works Council of

UES Aval, first as an elected member and then as a union

representative. Mr. Keller has been an elected member,

Main function: Honorary Chairman of TOTAL S.A.*

Director of TOTAL S.A. since 1995.

Last renewal: May 17, 2013 until 2016.

Member of the Governance and Ethics Committee and the

Strategic Committee until 2016.

Current directorships

–

Director of Air Liquide*

Director of Renault S.A.*

Director of Renault S.A.S.

representing holders of fund units, of the Supervisory Board of the

TOTAL ACTIONNARIAT FRANCE collective investment fund since

November 2012.

Directorships that have expired in the previous five years

–

Director of TOTAL S.A.* until 2016

Main function: Engineer.

Director of TOTAL S.A. representing employee shareholders since

May 17, 2013 and until 2016.

Chairman of the Board of Directors of TOTAL S.A.* until 2015

Director of Bombardier Inc.* (Canada) until 2014

Director of Sanofi* until 2014

Member of the Audit Committee until 2016.

Current directorships

Gunnar Brock

Born on April 12, 1950 (Swedish).

None.

A graduate of Stockholm School of Economics with an MBA in

Economics and Business Administration, Mr. Brock held various

international positions at Tetra Pak. He served as Chief Executive

Officer of Alfa Laval from 1992 to 1994 and as Chief Executive

Officer of Tetra Pak from 1994 to 2000. After serving as Chief

Executive Officer of Thule International, he was appointed Chief

Executive Officer of Atlas Copco AB from 2002 to 2009. He is

currently Chairman of the Board of Stora Enso Oy. Mr. Brock is also

a member of the Royal Swedish Academy of Engineering Sciences

and of the Board of Directors of the Stockholm School of

Economics.

Directorships that have expired in the previous five years

– Director of TOTAL S.A.* representing employee shareholders until

2016.

1.1.2. Absence of conflicts of interest

or convictions

The Board of Directors noted the absence of potential conflicts of

interest between the directors’ duties with respect to the Company

and their private interests. To the Company’s knowledge, there is

no family relationship among the members of the Board of Directors

of TOTAL S.A., there is no arrangement or agreement with

customers or suppliers under which a director was selected, and

there is no service agreement that binds a director to TOTAL S.A.

or to any of its subsidiaries and provides for special benefits under

the terms thereof.

Main function: Chairman of the Board of Directors of Stora Enso

Oy*.

Director of TOTAL S.A. since 2010.

Last renewal: May 17, 2013 until 2016.

Independent director. Member of the Compensation Committee,

the Governance and Ethics Committee and the Strategic

Committee until 2016.

The Board of Directors’ Rules of Procedure stipulate the specific

rules for preventing conflicts of interest as applicable to directors

(refer to article 2.5 of the Rules of Procedure – Duty of Loyalty).

Current directorships

The current members of the Board of Directors of the Company

have declared to the Company that they have not been convicted,

–

Chairman of the Board of Directors of Stora Enso Oy*

Member of the Board of Investor AB*

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Composition and practices of the Board of Directors

have not been associated with a bankruptcy, receivership or

liquidation, and have not been incriminated or publicly sanctioned

or disqualified, as stipulated in item 14.1 of Annex I of EC

Regulation No. 809/2004 of April 29, 2004.

The Board of Directors, at its meeting on February 8, 2017, based

on the proposals of the Governance and Ethics Committee, thus

noted that Mr. Desmarais, Jr could not be considered as

independent as of December 31, 2016.

Concerning the independence of Ms. Kux and Mr. Lemierre, the Board

of Directors, at its meeting on February 8, 2017, based on the proposals

of the Governance and Ethics Committee, confirmed that the

independence analysis carried out in 2016 continues to be relevant.

1

.1.3. Director independence

At its meeting on February 8, 2017, the Board of Directors, on the

recommendation of the Governance and Ethics Committee,

reviewed the independence of the Company’s directors as of

December 31, 2016. At the Committee’s proposal, the Board

considered that, pursuant to the AFEP-MEDEF Code, a director is

independent when “he or she has no relationship of any kind with

the company, its group or its management, that may compromise

the exercise of his or her freedom of judgment”.

Accordingly, Mses. Barbizet, Coisne-Roquette, Idrac, van der

Hoeven and Kux and Messrs. Artus, Lamarche and Lemierre were

deemed to be independent directors.

The percentage of independent directors on the Board based on its

composition as of December 31, 2016 was 80%⁽¹⁾

.

For each director, this assessment relies on the independence

criteria set forth in point 8.5 of the AFEP-MEDEF Code, revised in

November 2016, as described below:

The rate of independence of the Board of Directors is higher than

that recommended by the AFEP-MEDEF Code, which specifies that

at least half of the members of the Board in widely-held companies

with no controlling shareholders must be independent.

–

not to be an employee or executive director of the Company, or

an employee, executive director or director of its parent company

or of a company consolidated by its parent company, and not

having been in such a position for the previous five years;

not to be an executive director of a company in which the

Company holds a directorship, directly or indirectly, or in which

an employee appointed as such or an executive director of the

Company (currently in office or having held such office for less

than five years) is a director;

1.1.4. Diversity policy of the Board of Directors

The Board of Directors places a great deal of importance on its

composition and the composition of its Committees. In particular, it

relies on the work of the Governance and Ethics Committee, which

reviews annually and proposes, as circumstances may require,

desirable changes to the composition of the Board of Directors and

Committees based on the Group’s strategy.

–

not to be a significant customer, supplier, investment banker or

commercial banker of the Company or Group or for which the

Company or the Group represents a material part of their

business (the assessment of the materiality or non-materiality of

the relationship must be discussed by the Board and the

quantitative and qualitative criteria on which this assessment was

based (continuity, economic dependence, exclusivity, etc.) must

be explained in the annual report;

not to be related by close family ties to a director of the Company;

not to have been a statutory auditor of the Company within the

previous five years; and

not to have been a director of the Company for more than 12

years. Loss of the status of independent director occurs on the

date at which this period of 12 years is reached.

The Governance and Ethics Committee conducts its work within

the framework of a formal procedure so as to ensure that the

directors’ fields of speciality are complementary and that their

profiles are diverse, to maintain an overall proportion of

independent members that is appropriate to the Company’s

governance structure and shareholder base, to allow for a balanced

representation of men and women on the Board, and to promote

an appropriate representation of directors of different nationalities.

–

As part of an effort that began several years ago, the composition of

the Board of Directors has changed significantly since 2010 to achieve

better gender balance and an openness to more international profiles.

–

As of February 8, 2017, the Board of Directors had, among its

twelve members, five non-French members, as well as six male

directors and six female directors.

The AFEP-MEDEF Code stipulates that non-executive directors

cannot be considered independent if they receive variable

compensation in cash or in the form of shares or any other

compensation linked to the performance of the Company or Group.

The director(s) representing employees appointed in accordance

with Article L. 225-27-1 of the French Commercial Code are not

taken into account to apply provisions on the balanced

representation of men and women on the Board. Therefore, the

proportion of women on the Board was 54.5% as of December 31,

2016 (six women out of eleven directors).

It also stipulates that directors representing major shareholders of

the corporation or its parent company may be considered as being

independent provided that these shareholders do not take part in

control of the corporation. Nevertheless, beyond a 10% holding of

stock or 10% of the voting rights, the Board, upon a report from the

nominations committee, should systematically review the qualification

of a director as independent in the light of the make-up of the

corporation’s capital and the existence of a potential conflict of interest.

The 40% proportion of directors from each gender has thus been

reached since the Shareholders’ Meeting held on May 24, 2016 (six

women and five men over eleven directors), by early application of

the legal provisions providing for the same 40% threshold

applicable as from January 1, 2017.

With regard to the criterion of 12 years of service, the Board of

Directors, at its meeting on February 10, 2016, noted that as of

December 31, 2015, Mr. Desmarais, Jr was disqualified from being

considered as independent within the meaning of the AFEP-MEDEF

Code, because he had served on the Board for more than 12 years.

1.1.5. Training of directors

Directors may ask to receive training in the specifics of the

Company, its businesses and its business sector, as well as any

training that may help them perform their duties as directors.

(1) Excluding the director representing employee shareholders and the director representing employees, in accordance with the recommendations of the AFEP-MEDEF Code (point 8.3).

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The director representing employees also receives 20 hours of

training per year, which covers in-house training at the Company

and/or training in economics offered by an outside company

chosen by the director, after the Board Secretary has accepted the

company and the training program.

Appointment of Mr. Mark Cutifani and Mr. Carlos Tavares

At its meeting of February 8, 2017, and further to a proposal by the

Governance and Ethics Committee, the Board of Directors decided

to submit to the same Shareholders’ Meeting the appointment of

Mr. Mark Cutifani and Mr. Carlos Tavares as directors for a three-

year term to expire at the end of the Shareholders’ Meeting to be

held in 2020 to approve the 2019 financial statements.

Since 2013, the Board of Directors has met each year at a Group

site. In October 2016, the Board of Directors met in Scotland in the

West of Shetland area at the Laggan project site. Meetings of the

Board held at sites contribute to the integration of new directors.

Mr. Mark Cutifani, of Australian nationality, Chief Executive of the

Anglo-American Plc. company, will, in particular, bring to the Board

his knowledge of industry and raw-material cyclical economy, Mark

Cutifani having in addition a professional experience in several

countries where the Group is developing (Australia, South Africa,

Brazil, Canada, UK).

1

.1.6. Appointment and renewal of directorships

proposed to the Shareholders’ Meeting of

May 26, 2017

Mr. Carlos Tavares, of Portuguese nationality, Chairman of the

Management Board of the company Peugeot S.A., will, in particular,

bring to the Board his knowledge of the industrial world and the

inland transport sector, downstream from the oil and gas sector.

Renewal of the directorship of Mses. Patricia Barbizet

and Marie-Christine Coisne-Roquette

Directorships of Mses. Patricia Barbizet, Marie-Christine Coisne-

Roquette, Barbara Kux and of Mr. Paul Desmarais, jr. will expire at

the end of the Annual Shareholders’ Meeting of May 26, 2017. Ms.

Barbara Kux and Mr. Paul Desmarais, jr. have not requested the

renewal of their directorship.

The Board of Directors considered that Mr. Mark Cutifani and

Mr. Carlos Tavares could be deemed to be independent following

an assessment based on the independence criteria set forth in the

AFEP-MEDEF Code.

As a result, at its meeting of February 8, 2017, and further to a

proposal by the Governance and Ethics Committee, the Board of

Directors decided to submit to the Annual Shareholders’ Meeting of

May 26, 2017 the renewal of the directorship of Mses. Patricia

Barbizet and Marie-Christine Coisne-Roquette for a three-year term

to expire at the end of the Annual Shareholders’ Meeting held in

Following the Shareholders’ Meeting of May 26, 2017, if the

proposed resolutions are approved, the Board of Directors will have

twelve members (as previously), of which five would be non-French

nationals. The proportion of directors from each gender would be

higher than 40% in accordance with the provisions of Article

L. 225-18-1 of the French Commercial Code (five women and six

2020 to approve the 2019 financial statements.

men over eleven directors)⁽¹⁾

.

1.2. Practices of the Board of Directors

1

.2.1. Governance structure

done by the Governance and Ethics Committee and in the best

interests of the Company. The Board of Directors deemed that a

unified Management Form was most appropriate to the Group’s

organization, modus operandi and business, and to the specificities

of the oil and gas sector. In its decision, the Board in particular noted

the advantage for the Group of having a unified management in

strategic negotiations with governments and the Group’s partners.

Combination of the management positions

At its meeting on December 16, 2015, the Board of Directors

decided to reunify the positions of Chairman and Chief Executive

Officer of TOTAL S.A. as of December 19, 2015. As a result, since

that date, Mr. Pouyanné has held the position of Chairman and

Chief Executive Officer of TOTAL S.A.

The Board also wanted the Group’s governance structure to ensure

a balanced distribution of powers. To this end, at its meeting on

December 16, 2015, the Board amended the provisions of its Rules

of Procedure to provide for the appointment of a Lead Independent

Director in case of the combination of the positions of Chairman

of the Board of Directors and Chief Executive Officer. The Lead

Independent Director’s duties, resources and rights are described

in the Rules of Procedure of the Board of Directors.

Following the death of TOTAL’s former Chairman and Chief Executive

Officer, Mr. de Margerie, the Board of Directors decided, at its meeting

on October 22, 2014, to separate the functions of Chairman and

Chief Executive Officer in order to best ensure the transition of the

General Management. The Board of Directors therefore appointed

Mr. Pouyanné as Chief Executive Officer for a term of office expiring

at the end of the Annual Shareholders’ Meeting called in 2017 to approve

the 2016 financial statements , and Mr. Desmarest as Chairman of the

Board of Directors for a term of office expiring on December 18, 2015,

in accordance with the age limit set out in the bylaws. It was

announced that, on that date, the functions of Chairman and Chief

Executive Officer of TOTAL S.A. would be combined.

(2)

The balance of powers within the Company’s bodies is also

ensured by the composition of the Board of Directors and that of its

four Committees, particularly given the high proportion of members

who are independent directors. It is further ensured by the directors’

full involvement in the work of the Board and the Committees, and

by their diverse profiles, skills and expertise (refer to point 1.1 above).

The decision to reunify the positions of Chairman of the Board of

Directors and Chief Executive Officer was made further to work

(

1) Excluding the director representing employees, in accordance with Article L.225-27-1 of the French Commercial Code.

2) The Board of Directors of December 16, 2015 decided to prorogate the term of this office to the end of the 2018 Annual Shareholders’ Meeting, date of expiry of the term of office of

Mr. Pouyanné as Director.

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In addition, the Board’s Rules of Procedure provide that investments

and divestments considered by the Group exceeding 3% of equity

must be approved by the Board, which is also informed of any

significant events related to the Company’s operations, particularly

investments and divestments in amounts exceeding 1% of equity.

1.2.2. Working procedures of the Board of Directors

The working procedures of the Board of Directors are set out in its

Rules of Procedure, which specify the mission of the Board of Directors

and the rules related to the organization of its work. The Board’s

Rules of Procedure also specify the obligations of each director, as well

as the role and powers of the Chairman and the Chief Executive Officer.

Finally, the Company’s bylaws also offer the necessary guarantees

to ensure compliance with best governance practices under a unified

Management Form. In particular, they stipulate that a Board meeting

may be convened by any means, including verbally, and at short notice

in case of urgency, by the Chairman, a Vice Chairman, or by a third

of its members, at any time and as often as required to ensure the best

interests of the Company. The Rules of Procedure of the Board of

Directors also state that each director must notify the Board of Directors

of any existing or potential conflict of interest with the Company or any

Group company and must refrain from participating in any vote related

to the corresponding resolution as well as in any discussion

preceding such vote.

Mr. Charles Paris de Bollardière has served as Secretary of the

Board of Directors since his appointment by the Board of Directors

on September 15, 2009.

Since November 4, 2014, the date of the first appointment of the

director representing employees on the Board of Directors, a member

of the Central Works Council attends Board meetings in an advisory

capacity, pursuant to Article L. 2323-65 of the French Labor Code.

The Rules of Procedure of the Board of Directors are reviewed on a

regular basis to adapt them to changes in governance rules and

practices. In 2014, changes were made to include, in particular,

new provisions relating to information of the Board of Directors in

the event of new directorships being assumed by the directors or

changes in existing directorships, together with a reminder of the

obligations of confidentiality inherent to the work of the Board.

In December 2015, changes were made to provide for the appointment

of a Lead Independent Director in the event of the unification of the

Management Form and to define his or her duties.

Lead Independent Director

At its meeting on December 16, 2015, the Board of Directors appointed

Ms. Barbizet as Lead Independent Director as of December 19, 2015.

Pursuant to the provisions of the Rules of Procedure of the Board

of Directors, she therefore chairs the Governance and Ethics Committee.

The duties of the Lead Independent Director are described in detail

in the Rules of Procedure of the Board of Directors, the full version

of which is provided in point 1.2.2 below.

The text of the latest unabridged version of the Rules of Procedure

of the Board of Directors, as approved by the Board of Directors at

its meeting on December 16, 2015, is provided below. It is also

available on the Company’s website under “Our Group/Governance”.

The Board of Directors of TOTAL S.A.⁽¹⁾approved the following Rules of Procedure.

1. ROLE OF THE BOARD OF DIRECTORS

The Board of Directors is a collegial body that determines the strategic direction of the Company and supervises the implementation of this

vision. With the exception of the powers and authority expressly reserved for shareholders and within the limits of the Company’s legal

purpose, the Board may address any issue related to the Company’s operation and make any decision concerning the matters falling within

its purview. Within this framework, the Board’s duties and responsibilities include, but are not limited to, the following:

–

appointing the executive directors⁽²⁾and supervising the handling of their responsibilities;

defining the Company’s strategic orientation and, more generally, that of the Group;

approving investments or divestments being considered by the Group that exceed 3% of shareholders’ equity;

reviewing information on significant events related to the Company’s operations, in particular for investments and divestments involving

amounts exceeding 1% of shareholders’ equity;

–

conducting any audits and investigations it deems appropriate. In particular, the Board, with the assistance of the Audit Committee, ensures that:

-

authority has been properly defined and that the various corporate bodies of the Company make proper use of their powers and responsibilities,

no individual is authorized to commit to pay or to make payments, on behalf of the Company, without proper supervision and control,

the internal control function operates properly and the statutory auditors are able to perform their mission satisfactorily, and

the Committees it has created duly perform their responsibilities;

–

ensuring the quality of the information provided to shareholders and financial markets through the financial statements that it approves as

well as the annual reports, or when major transactions are conducted;

–

convening and setting the agenda for Shareholders’ Meetings or meetings of bond holders;

preparing on an annual basis the list of directors it deems to be independent according to generally accepted corporate governance criteria; and

appointing a Lead Independent Director under the conditions set out in article 7, when the Chairman of the Board of Directors is also the

Chief Executive Officer pursuant to a decision by the Board of Directors.

(

1) TOTAL S.A. is referred to in these Rules of Procedure as the “Company” and collectively with all its direct and indirect subsidiaries as the “Group”.

(2) The term “executive director” refers to the Chairman and Chief Executive Officer, if the Chairman of the Board of Directors is also responsible for the management of the Company;

the Chairman of the Board of Directors and the Chief Executive Officer, if the two roles are carried out separately; and, where applicable, any Deputy Chief Executive Officers or Chief

Operating Officers, depending on the organizational structure adopted by the Board of Directors.

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2. OBLIGATIONS OF THE DIRECTORS OF TOTAL S.A.

Before accepting a directorship, all candidates receive a copy of TOTAL S.A.’s bylaws and these rules of procedure. They must ensure that

they have broad knowledge of the general and particular obligations related to their duty, especially the laws and regulations governing

directorships in French limited liability companies (sociétés anonymes) whose shares are listed in one or several regulated markets. They must

also ensure that they are familiar with the guidelines set out in the Corporate Governance Code to which the Company refers.

Accepting a directorship creates an obligation to comply with applicable regulations relating in particular to the functioning of the Board of

Directors, and with the ethical rules of professional conduct for directors as described in the Corporate Governance Code to which the

Company refers. It also creates an obligation to comply with these rules of procedure and to uphold the Group’s values as described in its

Code of Conduct.

When directors participate in and vote at meetings of the Board of Directors, they are required to represent all of the Company’s

shareholders and to act in the interest of the Company as a whole.

2.1. INDEPENDENCE OF JUDGMENT

Directors undertake to maintain, in all circumstances, the independence of their analysis, judgment, decision-making and actions as well as

not to be unduly influenced, directly or indirectly, by other directors, particular groups of shareholders, creditors, suppliers or, more generally,

any third party.

2.2. OTHER DIRECTORSHIPS OR FUNCTIONS

Directors must keep the Board of Directors informed of any position they hold on the management team, Board of Directors or Supervisory

Board of any other company, whether French or foreign, listed or unlisted. This includes any positions as a non-voting member (censeur) of a

board. To this end, directors expressly undertake to promptly notify the Chairman of the Board of Directors, and the Lead Independent

Director if one has been appointed, of any changes to the positions held, for any reason, whether appointment, resignation, termination or

non-renewal.

2.3. PARTICIPATION IN THE BOARD’S WORK

Directors undertake to devote the amount of time required to duly consider the information they are given and otherwise prepare for meetings

of the Board of Directors and of the Committees of the Board of Directors on which they sit. They may request from the executive directors

any additional information they deem necessary or useful to their duties. If they consider it necessary, they may request training on the Company’s

specificities, businesses and industry sector, and any other training that may be of use to the effective exercise of their duties as directors.

Unless unable, in which case the Chairman of the Board shall be provided with advance notice, directors are to attend all meetings of the

Board of Directors, meetings of Committees of the Board of Directors on which they serve and Shareholders’ Meetings.

The Chairman of the Board ensures that directors receive all relevant information concerning the Company, including that of a negative

nature, particularly analyst reports, press releases and the most important media articles.

2.4. CONFIDENTIALITY

Directors and any other person who attends all or part of any meeting of the Board of Directors or its Committees are under the strict

obligation not to disclose any details of the proceedings.

All documents reviewed at meetings of the Board of Directors, as well as information conveyed prior to or during the meetings, are strictly

confidential.

With respect to all non-public information acquired during the exercise of their functions, directors are bound by professional secrecy not to divulge

such information to employees of the Group or to outside parties. This obligation goes beyond the mere duty of discretion provided for by law.

Directors must not use confidential information obtained prior to or during meetings for their own personal benefit or for the benefit of

anyone else, for whatever reason. They must take all necessary steps to ensure that the information remains confidential. Confidentiality and

privacy are lifted when such information is made publicly available by the Company.

2.5. DUTY OF LOYALTY

Directors must not take advantage of their office or duties to gain, for themselves or a third party, any monetary or non-monetary benefit.

They must notify the Chairman of the Board of Directors and the Lead Independent Director, if one has been appointed, of any existing or

potential conflict of interest with the Company or any Group company and they must refrain from participating in the vote relating to the

corresponding resolution as well as in any discussion preceding such vote.

Directors must inform the Board of Directors of their participation in any transaction that directly involves the Company, or any Group

company, before such transaction is finalized.

Directors must not assume personal responsibilities in companies or businesses having activities in competition with those of the Company

or any Group company without first having informed the Board of Directors.

Directors undertake not to seek or accept from the Company, or from companies directly or indirectly connected to the Company, any

advantages liable to be considered as being of a nature that may compromise their independence.

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Composition and practices of the Board of Directors

2.6. DUTY OF EXPRESSION

Directors undertake to clearly express their opposition if they deem a decision being considered by the Board of Directors is contrary to the

Company’s corporate interest and they must endeavor to convince the Board of Directors of the pertinence of their position.

2.7. TRANSACTIONS IN THE COMPANY’S SECURITIES AND STOCK EXCHANGE RULES

While in office, directors are required to hold the minimum number of registered shares of the Company as set by the bylaws.

Generally speaking, directors must act with the highest degree of prudence and vigilance when completing any personal transaction

involving the financial instruments of the Company, its subsidiaries or affiliates that are listed or that issue listed financial instruments.

To that end, directors must comply with the following requirements:

1

. Any shares or ADRs of TOTAL S.A. or its listed subsidiaries are to be held in registered form, either with the Company or its agent, or as

administered registered shares with a French broker (or North American broker for ADRs), whose contact details are communicated by

the director to the Secretary of the Board of Directors.

2

. Directors shall refrain from directly or indirectly engaging in (or recommending engagement in) transactions involving the financial

instruments (shares, ADRs or any other securities related to such financial instruments) of the Company or its listed subsidiaries, or any

listed financial instruments for which the director has insider information.

Insider information is specific information that has not yet been made public and that directly or indirectly concerns one or more issuers of

financial instruments or one or more financial instruments and which, if it were made public, could have a significant impact on the price of

the financial instruments concerned or on the price of financial instruments related to them.

3

. Any transaction in the Company’s financial instruments (shares, ADRs or related financial instruments) is strictly prohibited during the thirty

calendar days preceding the publication by the Company of its periodic results (quarterly, half-year or annual) as well as on the day of any

such announcement.

4. Moreover, directors shall comply, where applicable, with the provisions of Article L. 255-197-1 of the French Commercial Code, which

stipulates that free shares may not be sold:

–

during the ten trading days preceding and the three trading days following the date on which the Consolidated Financial Statements or,

failing that, the annual financial statements, are made public; and

–

during the period from the date on which the Company’s corporate bodies become aware of information that, if it were made public,

could have a significant impact on the Company’s share price, until ten trading days after such information is made public.

5

. Directors are prohibited from carrying out transactions on any financial instruments related to the Company’s share (Paris option market

MONEP), warrants, exchangeable bonds, etc.) and from buying on margin or short selling such financial instruments.

. Directors are also prohibited from hedging the shares of the Company and any financial instruments related to them, and in particular:

(

6

–

all Company shares that they hold; and, where applicable;

Company share subscription or purchase options;

rights to Company shares that may be awarded free of charge; and

Company shares obtained from the exercise of options or granted free of charge.

7

. Directors must make all necessary arrangements to declare, pursuant to the form and time frame provided by applicable law, to the

French Financial Markets Authority (Autorité des marchés financiers), as well as to the Secretary of the Board of Directors, any transaction

involving the Company’s securities conducted by themselves or by any other person to whom they are closely related.

3. FUNCTIONING OF THE BOARD OF DIRECTORS

3.1. BOARD MEETINGS

The Board of Directors meets at least four times a year and whenever circumstances require.

Prior to each Board meeting, the directors receive the agenda and, whenever possible, all other materials necessary to consider for the

session.

Directors may be represented by another director at a meeting of the Board, provided that no director holds more than one proxy at any

single meeting.

Whenever authorized by law, directors are considered present for quorum and majority purposes who attend Board meetings through video

conferencing or other audiovisual means that are compliant with the technical requirements set by applicable regulations.

3.2. DIRECTORS’ FEES

The Board of Directors allocates annual directors’ fees within the total amount authorized by the Annual Shareholders’ Meeting.

Compensation includes a fixed portion and a variable portion that takes into account each directors’ actual participation in the work of the

Board of Directors and its Committees together with, if applicable, the duties of the Lead Independent Director.

The Chief Executive Officer or, if the functions are combined, the Chairman and Chief Executive Officer, does not receive any director’s fees

for his participation in the work of the Board and its Committees.

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5

3.3. SECRETARY OF THE BOARD OF DIRECTORS

The Board of Directors, based on the recommendation of its Chairman, appoints a Secretary of the Board who assists the Chairman in

organizing the Board’s activities, and particularly in preparing the annual work program and the schedule of Board meetings.

The Secretary drafts the minutes of Board meetings, which are then submitted to the Board for approval. The Secretary is authorized to

dispatch Board meeting minutes and to certify copies and excerpts of the minutes.

The Secretary is responsible for all procedures pertaining to the functioning of the Board of Directors. These procedures are reviewed

periodically by the Board.

All Board members may ask the Secretary for information or assistance.

3.4. EVALUATION OF THE FUNCTIONING OF THE BOARD OF DIRECTORS

The Board evaluates its functioning at regular intervals not exceeding three years. The evaluation is carried out under the supervision of the

Lead Independent Director, if one has been appointed, or under the supervision of the Governance and Ethics Committee, with the

assistance of an outside consultant. The Board of Directors also conducts an annual review of its practices.

4. ROLE AND AUTHORITY OF THE CHAIRMAN

The Chairman represents the Board of Directors and, except under exceptional circumstances, has sole authority to act and speak on behalf

of the Board of Directors.

The Chairman organizes and oversees the work of the Board of Directors and ensures that the Company’s corporate bodies operate

effectively and in compliance with good governance principles. The Chairman coordinates the work of the Board of Directors and its

Committees. The Chairman establishes the agenda for each Board meeting, including items suggested by the Chief Executive Officer.

The Chairman ensures that directors receive, in a timely manner and in a clear and appropriate format, the information they need to

effectively carry out their duties.

In liaison with the Group’s General Management, the Chairman is responsible for maintaining relations between the Board of Directors and

the Company’s shareholders. The Chairman monitors the quality of information disclosed by the Company.

In close cooperation with the Group’s General Management, the Chairman may represent the Company in high-level discussions with

government authorities and major partners, both at a national and international level.

The Chairman is regularly informed by the Chief Executive Officer of significant events and situations relating to the Group, particularly with

regard to strategy, organization, monthly financial reporting, major investment and divestment projects and key financial transactions.

The Chairman may ask the Chief Executive Officer or other senior executives of the Company, provided that the Chief Executive Officer is

informed, to supply any information that may help the Board or its Committees to carry out their duties.

The Chairman may meet with the statutory auditors in order to prepare the work of the Board of Directors and the Audit Committee.

Every year, the Chairman presents a report to the Annual Shareholders’ Meeting describing the preparation and organization of the Board

of Directors’ work, any limits set by the Board of Directors concerning the powers of the Chief Executive Officer, and the internal control

procedures implemented by the Company. To this end, the Chairman obtains the necessary information from the Chief Executive Officer.

5. AUTHORITY OF THE CHIEF EXECUTIVE OFFICER

The Chief Executive Officer is responsible for the Company’s overall management. He represents the Company in its relationships with third

parties and chairs the Executive Committee. The Chief Executive Officer is vested with the broadest powers to act on behalf of the Company

in all circumstances, subject to the powers that are, by law, restricted to the Board of Directors and to the Annual Shareholders’ Meeting, as

well as to the Company’s corporate governance rules and in particular these rules of procedure of the Board of Directors.

The Chief Executive Officer is responsible for presenting the Group’s results and prospects to shareholders and the financial community on a

regular basis.

At each meeting of the Board of Directors, the Chief Executive Officer presents an overview of significant Group events.

6. BOARD COMMITTEES

The Board of Directors approved the creation of:

–

an Audit Committee;

a Governance and Ethics Committee;

a Compensation Committee; and

a Strategic Committee.

The roles and composition of each Committee are set forth in their respective rules of procedure, which have been approved by the Board of Directors.

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5

Composition and practices of the Board of Directors

The Committees perform their duties under the authority and for the benefit of the Board of Directors.

Each Committee reports on its activities to the Board of Directors.

7. LEAD INDEPENDENT DIRECTOR

7.1. APPOINTMENT OF THE LEAD INDEPENDENT DIRECTOR

When the functions of the Chairman of the Board and Chief Executive Officer are combined, the Board of Directors appoints a Lead

Independent Director, on the recommendation of the Governance and Ethics Committee, from among the directors considered to be

independent by the Board of Directors.

The appointed Lead Independent Director holds this position while in office as director, unless otherwise decided by the Board of Directors,

which may choose to terminate his or her duties at any time. If for any reason the director is no longer deemed to be independent, his or her

position as Lead Independent Director will be terminated.

The Lead Independent Director, if one is appointed, chairs the Governance and Ethics Committee.

7.2. DUTIES OF THE LEAD INDEPENDENT DIRECTOR

The Lead Independent Director’s duties include:

1. Convening meetings of the Board of Directors – Meeting Agenda

The Lead Independent Director may request that the Chairman and Chief Executive Officer call a meeting of the Board of Directors to

discuss a given agenda.

He or she may request that the Chairman and Chief Executive Officer include additional items on the agenda of any meeting of the Board

of Directors.

2. Participation in the work of the Committees

If not a member of the Compensation Committee, the Lead Independent Director is invited to attend meetings and participates in the

work of the Compensation Committee relating to the annual review of the executive directors’ performance and recommendations

regarding their compensation.

3. Acting as Chairperson of Board of Directors’ meetings

When the Chairman and Chief Executive Officer is unable to attend all or part of a meeting of the Board of Directors, the Lead

Independent Director chairs the meeting. In particular, he or she chairs those Board meetings the proceedings of which relate to the

evaluation of the performance of the executive directors and the determination of their compensation, which take place in their absence.

. Evaluation of the functioning of the Board of Directors

4

The Lead Independent Director manages the evaluation process relating to the functioning of the Board of Directors and reports on this

evaluation to the Board of Directors.

5. Prevention of conflicts of interest

Within the Governance and Ethics Committee, the Lead Independent Director organizes the performance of due diligence in order to

identify and analyze potential conflicts of interest within the Board of Directors. He or she informs the Chairman and Chief Executive Officer

of any conflicts of interest identified as a result and reports to the Board of Directors on these activities.

Pursuant to the obligation to declare conflicts of interest set out in article 2.5 of these Rules, any director affected by an existing or

potential conflict of interest must inform the Chairman and Chief Executive Officer and the Lead Independent Director.

. Monitoring of the satisfactory functioning of the Board and compliance with the Rules of Procedure

The Lead Independent Director ensures compliance with the rules of the Corporate Governance Code to which TOTAL S.A. refers and

with the Rules of Procedure of the Board of Directors. He or she may make any suggestions or recommendations that he deems

appropriate to this end.

6

He or she ensures that the directors are in a position to carry out their tasks under optimal conditions and that they have sufficient

information to perform their duties.

With the agreement of the Governance and Ethics Committee, the Lead Independent Director may hold meetings of the directors who do

not hold executive or salaried positions on the Board of Directors. He or she reports to the Board of Directors on the conclusions of such

meetings.

7. Relationships with Shareholders

The Chairman and Chief Executive Officer and the Lead Independent Director are the shareholders’ dedicated contacts on issues that fall

within the remit of the Board.

When a shareholder approaches the Chairman and Chief Executive Officer in relation to such issues, they may seek the opinion of the

Lead Independent Director before responding appropriately to the shareholder’s request.

When the Lead Independent Director is approached by a shareholder in relation to such issues, he or she must inform the Chairman and

Chief Executive Officer, providing his or her opinion, so that the Chairman and Chief Executive Officer may respond appropriately to the

request. The Chairman and Chief Executive Officer must inform the Lead Independent Director of the response given.

7.3. RESOURCES, CONDITIONS OF OFFICE AND ACTIVITY REPORT

The Chairman and Chief Executive Officer must regularly update the Lead Independent Director on the Company’s activities.

The Lead Independent Director has access to all of the documents and information necessary for the performance of his or her duties.

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5

The Lead Independent Director may consult the Secretary of the Board and use the latter’s services in the performance of his or her duties.

Under the conditions set out in article 3.2 of these Rules and those established by the Board of Directors, the Lead Independent Director

may receive additional director’s fees for the duties entrusted to him or her.

The Lead Independent Director must report annually to the Board of Directors on the performance of his or her duties. During Annual

General Meetings, the Chairman and Chief Executive Officer may invite the Lead Independent Director to report on his or her activities.

1

.2.3. Activity of the Board of Directors

The Board of Directors held 10 meetings in 2016. The attendance

rate for all the directors was 88.4%. The Audit Committee held 7

meetings, with an attendance rate of 92.9%; the Compensation

Committee met 3 times, with 100% attendance; the Governance

and Ethics Committee held 2 meetings, with 100% attendance;

and the Strategic Committee met twice, with 90% attendance.

Directors are generally given written notice of Board meetings

during the week preceding the meetings. Whenever possible,

documents to be considered for decisions to be made at Board

meetings are sent with the notice of meetings. The minutes of the

previous meeting are expressly approved at the following Board

meeting.

A table summarizing individual attendance at the Board of Directors

and Committee meetings is provided below.

Directors’ attendance at Board and Committee meetings in 2016

Directors

Board of

Directors

Audit

Committee

Compensation

Committee

Governance

and Ethics

Committee

Strategic

Committee

Attendance Number of Attendance Number of Attendance Number of Attendance Number of Attendance Number of

rate meetings rate meetings rate meetings rate meetings rate meetings

Patrick Pouyanné

Thierry Desmarest⁽^a⁾

Patrick Artus

Patricia Barbizet

Marc Blanc

Gunnar Brock⁽^a⁾

Marie-Christine Coisne-Roquette

Paul Desmarais, Jr

Maria van der Hoeven⁽^c⁾

Anne-Marie Idrac

Charles Keller⁽^a⁾

100%

80%

90%

100%

60%

100%

40%

80%

100%

90%

10/10

5/5

8/10

9/10

10/10

3/5

10/10

4/10

4/5

10/10

5/5

-

7/7

-

7/7

-

3/3

-

5/7

-

3/3

-

2/2

3/3

-

3/3

-

1/1

-

2/2

-

1/1

-

100%

2/2

1/1

2/2

1/2

100%

50%

100%

100%⁽^b⁾

50%⁽^b⁾

100%⁽^b⁾

100%

-

100%

-

100%

1/1

100%

-

2/2⁽^b⁾

1/2⁽^b⁾

1/1⁽^b⁾

2/2⁽^b⁾

1/1⁽^b⁾

2/2

-

100%

2/2 100%⁽^b⁾

100%

-

2/2

-

100%⁽^b⁾

100%

-

Barbara Kux

10/10

9/10

4/5

-

100%

-

100%

Gérard Lamarche

Jean Lemierre⁽^c⁾

Renata Perycz⁽^c⁾

71.5%

-

80%

100%

88.4%

-

5/5

-

100%⁽^b⁾

90%⁽^d⁾

1/1⁽^b⁾

Attendance rate

92.9%

100%

(

a) Director until May 24, 2016.

b) Voluntary participation (director not a member of the Strategic Committee).

c) Director since May 24, 2016.

d) Excluding voluntary participation.

The Board meetings included, but were not limited to, a review of

the following subjects:

– renewal of the authorization to issue bonds;

– renewal of the authorization to issue security, commitments

and guarantees;

February 10

–

debate on the Board of Directors’ practices based on a summary

presented by the Governance and Ethics Committee of the

evaluation carried out in the form of a detailed questionnaire to

which each director responded; definition of the proposed

strategic directions;

–

2015 accounts (Consolidated Financial Statements, parent

company accounts) after the Audit Committee’s report and

work performed by the statutory auditors;

–

draft allocation of the profits of TOTAL S.A., setting of the

dividend, ex-dividend and payment dates, option for the

payment of the balance of the dividend in shares;

main financial communications, including industrial safety

aspects;

examination of the Report of the Chairman of the Board of

Directors (Article L. 225-37 of the French Commercial Code);

information about the results of the option to receive the payment

of the second interim dividend for fiscal year 2015 in shares;

information on the credit ratings of the long-term debt of TOTAL S.A.;

–

assessment of the directors’ independence and report on

the absence of conflicts of interest;

opinion on the candidates for the position of director

representing employee shareholders;

–

proposal to appoint and renew directorships;

determination of the amount of directors’ fees due for fiscal

year 2015;

–

the Chairman and Chief Executive Officer’s compensation

(in the absence of the Chairman and Chief Executive Officer).

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5

Composition and practices of the Board of Directors

March 15

– results for the second quarter 2016 and the first half of 2016

after the Audit Committee’s report and work performed by the

statutory auditors;

–

presentation to the Board of the work of the Audit Committee

at its meeting on March 11, 2016;

–

presentation to the Board of the work of the Compensation

Committee, and acknowledgment of the acquisition rate of

performance shares under the 2013 plan;

– setting of a second interim dividend;

– presentation to the Board of the work of the Compensation

Committee;

–

presentation of the report of the independent monitor designated

by the American authorities: summary and outlook;

review of various chapters of the Registration Document forming

the Management Report within the meaning of the French

Commercial Code;

preparation of the Annual Shareholders’ Meeting: agenda,

resolutions and reports;

setting the schedule related to the payment of interim dividends

and the balance of the dividend for 2017;

– share capital increase reserved for Group employees and

free grant of shares as a deferred contribution;

– performance share grants on the recommendation of the

Compensation Committee;

– information about the results of the votes on the resolutions

at the Annual Shareholders’ Meeting held on May 24, 2016,

the results of the option to receive the payment of the remaining

balance of the dividend for fiscal year 2015 in shares;

– information on bond issues;

–

distribution of the third interim dividend for the 2015 fiscal year

and setting of the new share issue price for the option to receive

the interim dividend in shares.

– information on the public offer launched on Saft Groupe;

– information on the notifications received of the crossings of

thresholds in the Company’s capital.

April 26

September 21

–

summary of the Strategic Committee meeting of March 15, 2016;

presentation of the Group’s map of risks;

results for the first quarter of 2016 after the Audit Committee’s

report and work performed by the statutory auditors;

presentation to the Board of the work of the Audit Committee

at its meeting on April 22, 2016;

– presentation of the project to sell Atotech;

– summary of the Strategic Committee meeting of September 21,

2016;

– strategic perspectives of Exploration & Production activities with

a presentation of safety indicators and environmental objectives;

– mid-2016 financial communications: presentation of the outlook

and objectives for the coming years;

–

setting of a first interim dividend;

information about the results of the option to receive the payment

of the third interim dividend for fiscal year 2015 in shares;

request for authorization to issue guarantees;

information on declarations of thresholds in the Company’s

capital to be declared;

preparation of the Annual Shareholders’ Meeting: review of a

request made by the shareholders to include a point on the

Annual Shareholders’ Meeting agenda; the Board of Directors’

position on this request;

– the Company’s strategic directions;

– presentation of the Company’s equal opportunity and salary

equality policy and comparative status of overall employment

and training conditions for women and men in the Company;

– distribution of the first interim dividend for the 2016 fiscal year

and setting of the new share issue price for the option to receive

the interim dividend in shares;

–

– information on the public offer launched on Saft Groupe;

– information on the powers subdelegated to the Treasurer.

–

the economic and financial situation of the Company:

communication of the opinion of the Central Works Council

meeting on March 31, 2016.

October 6

–

approval of the proposal to sell Atotech.

October 27 – meeting held in Scotland in the West of Shetland

area at the Laggan project site

May 9

–

information on the project to acquire Saft Groupe.

–

summary of the Strategic Committee meeting of September 21, 2016;

May 24 – pre-Shareholders’ Meeting

– strategic perspectives of Marketing & Services activities,

including the operational safety, technological risk and

environmental aspects;

–

review of the draft responses to the written questions submitted

by shareholders;

–

presentation of the report “Total and the climate”;

setting of the share issue price for the payment of the balance of

the 2015 dividend in shares, subject to the adoption of the

resolution by the Annual Shareholders’ Meeting of May 24, 2016;

information on bond issues;

request for authorization to issue guarantees;

information on the public offer made by the Company for

Saft Groupe;

delegation of powers to operate on Company shares, subject to

the adoption of the resolution of the Shareholders’ Meeting on

May 24, 2016;

information on the project to acquire an interest in the permits in

Papua New Guinea.

– the Group’s 5-year plan;

– results for the third quarter of 2016 after the Audit Committee’s

report and work performed by the statutory auditors;

– setting of a third interim dividend;

–

– information on bond issues;

– information about the results of the option to receive the payment

of the first interim dividend for fiscal year 2016 in shares;

– request for authorization to issue guarantees;

– information on the notifications received of the crossings of

thresholds in the Company’s capital.

–

December 15

–

Board of Directors’ response to the Central Works Council’s

opinion on the strategic directions presented to the Board;

July 27

– information on the end of the monitoring process and the

compliance program;

–

information on the Al-Shaheen field and request for authorization

to issue the related guarantees;

– 2017 budget review;

–

strategic perspectives of the Refining & Chemicals segment

including safety and energy efficiency aspects and prevention of

major environmental risks;

– distribution of the second interim dividend for the 2016 fiscal year

and setting of the new share issue price;

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5

–

information on agreements and commitments concluded and

authorized in the preceding periods, the execution of which

continued during the 2016 fiscal period;

– information on bond issues;

– purchase of treasury shares and correlative reduction of the

Company’s share capital.

1.2.4. Audit Committee

Composition

As of February 8, 2017

Age

Sex Independence

Years’

Expiry of

service on director’s term

the Board

of office

Marie-Christine Coisne-Roquette

Patrick Artus

Gérard Lamarche

Chairperson of the Committee

Member

60

65

55

F

M

•

6

8

5

2017

2018

2019

As of February 8, 2017, the Committee has three members, all of

whom are independent. The careers of all of the Committee members

attest to their possession of acknowledged expertise in the financial

and accounting or economic fields (refer to point 1.1.1 above).

– monitoring the implementation and the proper workings of a

disclosures committee in the Company, and reviewing its

conclusions;

– examining the assumptions used to prepare the financial

statements, assessing the validity of the methods used to handle

significant transactions and examining the parent company

financial statements and annual, half-yearly, and quarterly

Consolidated Financial Statements prior to their examination by

the Board of Directors, after regularly monitoring the financial

situation, cash position and off-balance sheet commitments;

– guaranteeing the appropriateness and the permanence of the

accounting policies and principles chosen to prepare the

statutory and Consolidated Financial Statements of the Company;

– examining the scope of the consolidated companies and, where

appropriate, the reasons why companies are not included;

– examining the process to validate the proved reserves of the

companies included in the scope of consolidation; and

Ms. Coisne-Roquette was appointed “financial expert” of the

Committee by the Board at its meeting of December 16, 2015.

Duties

The rules of procedure of the Audit Committee define the

Committee’s duties and working procedures. The rules of procedure

were last modified on February 8, 2017, in order to adapt the

missions of the Committee to the European audit reform. The text of

the unabridged version of the rules of procedure approved by the

Board of Directors on February 8, 2017 is available on the

Company’s website under “Our Group/Corporate Governance”.

Notwithstanding the duties of the Board of Directors, the Audit

Committee is tasked with the following missions in particular:

–

reviewing, if requested by the Board of Directors, major

transactions contemplated by the Company.

Regarding the statutory auditors:

Regarding internal control and risk management procedures:

–

making a recommendation to the Board of Directors on the

statutory auditors put before the Annual Shareholders’ Meeting for

designation or renewal, following their selection procedure organized

by General Management and enforcing the applicable regulations;

monitoring the statutory auditors in the performance of their

missions and, in particular, examining the additional report drawn

up by the statutory auditors for the Committee, while taking

account of the observations and conclusions of the High Council

of statutory auditors (Haut Conseil du Commissariat aux

comptes) further to the inspection of the auditors in question in

application of the legal provisions, where appropriate; and

ensuring that the statutory auditors meet the conditions of

independence as defined by the regulations, and to analyzing the

risks to their independence and the measures taken to mitigate

these risks; to this end, examining all the fees paid by the Group

to the statutory auditors, including for services other than the

certification of the financial statements, and making sure that the

rules applying to the maximum length of the term of the statutory

auditors and the obligation to alternate are obeyed;

–

monitoring the efficiency of the internal control and risk

management systems and of internal audits, in particular with

regard to the procedures relating to the production and

processing of accounting and financial information, without

compromising its independence, and in this respect:

–

-

checking that these systems exist and are deployed, and that

actions are taken to correct any identified weaknesses or

anomalies,

-

examining the exposure to risk and significant off-balance sheet

commitments,

annually examining the reports on the work of the Group Risk

Management Committee (formely named Group Risk

Committee) and the major issues for the Group,

examining the annual work program of the internal auditors and

being regularly informed of their work,

–

-

reviewing significant litigation at least once a year,

overseeing the implementation of the Group’s Financial Code of

Ethics,

-

proposing to the Board of Directors, for implementation, a

procedure for complaints or concerns of employees,

shareholders and others, related to accounting, internal control

or auditing matters, and monitoring the implementation of this

procedure, and

–

approving the delivery by the statutory auditors of services other

than those relating to the certification of the financial statements,

in accordance with the applicable regulations.

Regarding accounting and financial information:

–

following the process to produce financial information and,

where appropriate, formulating recommendations to guarantee

its integrity, where appropriate;

- where appropriate, examining important operations in which a

conflict of interests could have arisen.

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5

Composition and practices of the Board of Directors

Organization of activities

– presentation of certain sections of the Registration Document:

risk factors and legal proceedings;

The Committee meets at least seven times each year: each quarter

to review in particular the statutory financial statements of the

Company, and the annual and quarterly Consolidated Financial

Statements, and at least on three other occasions to review

matters not directly related to the review of the quarterly financial

statements.

–

update on internal audit and controls: presentation of the 2015

main accomplishments and key topics of the audit plan for 2016.

Comments on the results of the assessment of internal control on

financial reporting conducted for fiscal year 2015 as part of the

implementation of the Sarbanes-Oxley Act (SOX), along with a

summary of the statutory auditors’ assessments of internal control

related to financial reporting as part of the SOX 404 process;

At each Committee meeting where the quarterly financial

statements are reviewed, the Group’s Chief Financial Officer

presents the Consolidated Financial Statements and the statutory

financial statements of the Company, as well as the Group’s

financial position and, in particular, its liquidity, cash flow and debt

situation. A memo describing risk exposure and off-balance sheet

commitments is communicated to the Committee. This review of

the financial statements includes a presentation by the statutory

auditors underscoring the key points observed.

– review of the draft of the Chairman’s report on internal control

and risk management procedures;

– update on unvalued guarantees given by TOTAL S.A.

March 11

–

update on compliance procedures: 2015 results and

implementation of programs; presentation of the interim report of

the independent monitor designated by the American authorities;

presentation of the social, environmental and societal information

in the Registration Document; presentation by the statutory

auditors of their procedures and the conclusions of their review

of these issues;

–

As part of monitoring the efficiency of the internal control and risk

management systems, the Committee is informed of the work

program of the Audit & Internal Control Division and its organization,

on which it may issue an opinion. The Committee also receives a

summary of the internal audit reports, which is presented at each

Committee meeting where the quarterly financial statements are

reviewed. The risk management processes implemented within the

Group and updates to them are presented regularly to the Committee.

– review of the hydrocarbon reserves evaluation process at

year-end 2015;

– presentation by the statutory auditors of the report on the

payments made to governments;

– presentation of the Group’s insurance policy: coverage for 2016

against property damage, business interruption and civil liability.

The Committee may meet with the Chairman and Chief Executive

Officer or, if the functions are separate, the Chairman of the Board

of Directors, the Chief Executive Officer and, if applicable, any

Deputy Chief Executive Officer of the Company. It may perform

inspections and consult with managers of operational or functional

entities, as may be useful in performing its duties. The Chairperson

of the Committee gives prior notice of such meeting to the

Chairman and Chief Executive Officer or, if the functions are

separate, both the Chairman of the Board of Directors and the

Chief Executive Officer. The Committee is authorized to consult with

those involved in preparing or auditing the financial statements

April 22

– review of the statutory and consolidated financial statements of

TOTAL S.A. as parent company for the first quarter of 2016, with a

presentation by the statutory auditors of a summary of their work;

– presentation of the Group’s financial position at the end of the

quarter;

– update on the internal audits conducted in the first quarter of 2016;

– presentation of the Group’s risk map.

June 8

–

presentation of the topics covered by the Group Risk Committee

in 2015, including crisis communications, the management of

intellectual property, supplier risks, the map of security risks and

industrial information systems security;

(Chief Financial Officer and principal Finance Department

managers, Audit Department, Legal Department) by asking the

Company’s Chief Financial Officer to call them to a meeting.

The Committee consults with the statutory auditors regularly,

including at least once a year without any Company representative

present. If it is informed of a substantial irregularity, it recommends

that the Board of Directors takes all appropriate action.

– presentation of the main risks related to governance in the

Group: human rights, international economic sanctions,

intellectual property, application of the regulatory framework;

– presentation of the updated Treasury Department risk map.

July 25

–

Audit Committee activity

review of the Consolidated Financial Statements for the second

quarter and first half of 2016 and the statutory financial

statements of TOTAL S.A. as parent company. Presentation by

the statutory auditors of a summary of their work;

presentation of the Group’s financial position at the end of the

quarter;

update on the internal audits conducted during the second

quarter of 2016;

update on the new, recently adopted accounting standards:

recognition of sales; leases.

In 2016, the Audit Committee met seven times, with an attendance

rate of 92.9%. Its work mainly focused on the following areas:

February 8

–

review of the accounts for the fourth quarter of 2015, the Group’s

consolidated results and the statutory financial statements of

TOTAL S.A. as parent company for 2015. Presentation by the

statutory auditors of a summary of their work performed in

accordance with French and American professional audit

standards, in particular on the Group’s positions in terms of

valuing assets;

October 10

–

review of the Group’s financial position;

– presentation of the risk map of Exploration & Production’s

General Management;

– statutory auditors’ analysis of the main transverse risks to be

addressed as important points in their audit plan for the closing

of the 2016 accounts;

presentation of the preparation process and key validation stages

of the Management Report forming chapter 3 of the

Registration Document;

106

TOTAL. Registration Document 2016

Corporate governance

Composition and practices of the Board of Directors

5

–

presentation of the European audit reform by the statutory

auditors;

– information on compliance by relevant employees with the

provisions of the Financial Code of Ethics;

– presentation of the Group’s fiscal position.

presentation of the changes to the rules of procedure of the

Audit Committee due to the European audit reform;

statutory auditors: update on fees followed by review of the rules

for pre-approval of audit and non-audit services and approval, as

modified due to the introduction of the European audit reform;

review of significant litigation and status update on the main

pending proceedings involving the Group;

update on the settlements with the American authorities

concluded in 2013, bringing an end to the inquiry of the SEC and

the DoJ into activities in Iran in the 1990s;

At each meeting related to the quarterly financial statements, the

Committee reviewed the Group’s financial position in terms of liquidity,

cash flow and debt, as well as its significant risks and off-balance

sheet commitments. The Audit Committee was periodically

informed of the risk management processes implemented within

the Group and the work carried out by the Audit & Internal Control

Division, which was presented at each Committee meeting where

the quarterly financial statements were reviewed.

–

presentation of changes to the Financial Code of Ethics.

The Audit Committee reviewed the financial statements no later

than two days before they were reviewed by the Board of Directors,

a sufficient amount of time as precluded by the recommendations

of the AFEP-MEDEF Code.

The members of the Committee then met with the statutory

auditors without any Group employees being present.

October 25

The statutory auditors attended all Audit Committee meetings held

in 2016.

–

review of the statutory and consolidated financial statements of

TOTAL S.A. as parent company for the third quarter of 2016 and

the first nine months of 2016. Presentation by the statutory

auditors of a summary of their work;

The Chief Financial Officer, the Vice President Accounting, the Senior

Vice President Audit & Internal Control Division and the Treasurer

attended all Audit Committee meetings, related to their area.

–

presentation of the Group’s financial position at the end of the

quarter;

update on the internal audits conducted in the third quarter of

The Chairman of the Committee reported to the Board of Directors

on the Committee’s activities.

2016;

1.2.5. Governance and Ethics Committee

Composition

As of February 8, 2017

Age

Sex Independence

Years’

Expiry of

service on director’s term

the Board

of office

Patricia Barbizet

Anne-Marie Idrac

Barbara Kux

Chairperson of the Committee

Member

61

65

62

F

•

9

5

6

2017

2018

2017

As of February 8, 2017, the Governance and Ethics Committee has

three members, all of whom are independent.

Its duties include:

–

presenting recommendations to the Board regarding its

composition and that of its Committees, and regarding the

Duties

independence of each candidate for directors’ positions on

the Board of Directors;

– proposing annually to the Board of Directors the list of directors

who may be considered as “independent directors”;

– examining sections within its purview of reports to be sent by

the Board of Directors or its Chairman to shareholders;

The rules of procedure of the Governance and Ethics Committee

define the Committee’s duties and working procedures. The text of

the unabridged version of the rules of procedure approved by the

Board of Directors on December 16, 2015 is available on the

Company’s website under “Our Group/Corporate Governance”.

–

assisting the Board of Directors in the selection and assessment

of the executive directors and examining the preparation of their

possible successors, including cases of unforeseeable absence;

The Governance and Ethics Committee is focused on:

–

recommending to the Board of Directors persons who are

qualified to be appointed as directors, so as to ensure that the

directors have a wide range of skills and diverse profiles;

recommending to the Board of Directors the persons who are

qualified to be appointed as executive directors;

– recommending to the Board of Directors persons who are

qualified to be appointed as directors;

– recommending to the Board of Directors persons who are

qualified to be appointed as members of a Committee of

the Board of Directors;

– proposing methods for the Board of Directors to evaluate its

performance, and in particular preparing means of regular self-

assessment of the practices of the Board of Directors, and the

possible assessment thereof by an external consultant;

–

preparing the Company’s corporate governance rules and

supervising their implementation; and

ensuring compliance with ethics rules and examining any

questions related to ethics and conflicts of interest.

Registration Document 2016. TOTAL

107

Corporate governance

5

Composition and practices of the Board of Directors

–

proposing to the Board of Directors terms and conditions for

allocating directors’ fees and conditions under which expenses

incurred by the directors are reimbursed;

developing and recommending to the Board of Directors the

corporate governance principles applicable to the Company;

preparing recommendations requested at any time by the

Board of Directors or the General Management of the Company

regarding appointments or governance;

examining the conformity of the Company’s governance

practices with the recommendations of the Corporate

Governance Code adopted by the Company;

supervising and monitoring implementation of the Company’s

ethics and compliance program and, in this respect, ensuring

that the necessary procedures for updating the Group’s Code

of Conduct are put in place and that this Code is disseminated

and applied;

the assistance of an external consultant, to which the directors

responded;

– proposals to the Board of Directors regarding the assessment of

the independence of the directors based on the independence

criteria specified in the AFEP-MEDEF Code and after reviewing

the level of activity between certain directors and the Group’s

suppliers;

– proposal to the Board of Directors regarding the director

representing employee shareholders appointed by the 2016

Annual Shareholders’ Meeting;

– proposals to the Board of Directors regarding the new directors

appointed by the 2016 Annual Shareholders’ Meeting;

– review of the terms and conditions for allocating directors’ fees to

directors and Committee members;

– information update on transactions on the Company’s securities

by executive and non-executive directors;

–

examining any questions related to ethics and conflicts of

interest; and

examining changes in the duties of the Board of Directors.

– examining sections within its purview of reports to be sent by the

Board of Directors or its Chairman to shareholders.

July 27

–

presentation by the Chairman of the Ethics Committee of a

review of the ethics program for 2015 (information and training

campaigns, changes in the matters and cases reviewed, ethical

assessments conducted within the Group’s entities, actions

related to human rights) and presentation of the priorities for

Governance and Ethics Committee activity

In 2016, the Governance and Ethics Committee held two meetings,

with 100% attendance. Its work mainly focused on the following

areas:

2

016;

February 10

–

discussion of changes to the composition of the Board

of Directors.

–

results of the formal self-assessment of the Board’s practices

conducted in the form of a detailed questionnaire, prepared with

1.2.6. Compensation Committee

Composition

As of February 8, 2017

Age

Sex Independence

Years’

Expiry of

service on director’s term

the Board

of office

Gérard Lamarche

Patricia Barbizet

Marie-Christine Coisne-Roquette

Chairman of the Committee

Member

55

61

60

M

F

•

5

9

6

2019

2017

As of February 8, 2017, the Compensation Committee has three

members, all of whom are independent.

Its duties include:

reviewing the main objectives proposed by the General

–

Management of the Company regarding compensation of the

Group’s executive directors, including stock option plans, free

share plans and equity-based plans, and advising on this

subject;

– making recommendations and proposals to the Board of

Directors concerning:

- compensation, pension and life insurance plans, in-kind

benefits and other compensation (including severance benefits)

for the executive directors of the Company; in particular, the

Committee proposes compensation structures that take into

account the Company’s strategy, objectives and earnings as

well as market practices,

Duties

The rules of procedure of the Compensation Committee define the

Committee’s duties and working procedures. The text of the

unabridged version of the rules of procedure approved by the

Board of Directors on February 9, 2012 is available on the

Company’s website under “Our Group/Corporate Governance”.

The Committee is focused on:

–

examining the executive compensation policies implemented by

the Group and the compensation of members of the Executive

Committee;

–

evaluating the performance and recommending the

compensation of each executive director; and

preparing reports which the Company must present in these

areas.

- grants of stock options and free shares, particularly grants of

registered shares to the executive directors;

108

TOTAL. Registration Document 2016

Corporate governance

Composition and practices of the Board of Directors

5

–

reviewing the compensation of the members of the Executive

Committee, including stock option plans, free share plans and

equity-based plans, pension and insurance plans and in-kind

benefits;

– examining sections within its purview of reports to be sent by

the Board of Directors or its Chairman to shareholders;

– review of compliance with the restrictions on share transfers

by the Chairman and Chief Executive Officer.

–

preparing and presenting reports in accordance with its rules of

procedure;

March 14

–

confirmation of the acquisition rate of performance shares under

the 2013 plan;

review of the performance share and stock option grant policy

for 2016;

examining, for the parts within its remit, reports to be sent by the

Board of Directors or its Chairman to shareholders; and

preparing recommendations requested at any time by the

Chairman of the Board of Directors or the General Management

of the Company regarding compensation.

review of the Executive Committee members’ compensation.

July 27

Work of the Compensation Committee

– proposal related to the capital increase reserved for Group

employees;

In 2016, the Compensation Committee held three meetings, with

–

proposal of acquisition of free shares as a contribution as part of

the capital increase reserved for Group employees;

100% attendance. The Chairman and the Chief Executive Officer is

not allowed to attend the Committee’s deliberations regarding his

own situation.

–

proposals regarding the 2016 performance share plan: number

of beneficiaries, length of the acquisition period (three years) and

retention period (two years), performance conditions for final

grant, proposal regarding the grant of performance shares to the

Chairman and Chief Executive Officer.

Its work mainly focused on the following areas:

February 10

–

determination of the variable portion of the compensation

to be paid to the Chairman and Chief Executive Officer for

his performance in 2015;

–

proposed compensation for the Chairman and Chief Executive

Officer (fixed and variable portion for fiscal year 2016);

1.2.7. Strategic Committee

Composition

As of February 8, 2017

Age

Sex Independence

Years’

Expiry of

service on director’s term

the Board

of office

Patrick Pouyanné

Patrick Artus

Patricia Barbizet

Marc Blanc

Chairman of the Committee

Member

53

65

61

62

M

F

M

F

2

8

9

3

6

2018

2017

•

Barbara Kux

•

As of February 8, 2017, the Strategic Committee has five members,

three of whom are independent.

Work of the Strategic Committee

In 2016, the Strategic Committee held two meetings, with 90%

attendance. Its work mainly focused on the following areas:

Duties

March 15

The rules of procedure of the Strategic Committee define the

Committee’s duties and working procedures. The text of the

unabridged version of the rules of procedure approved by the

Board of Directors on April 25, 2013 is available on the Company’s

website under “Our Group/Corporate Governance”.

–

analysis of the strategy of two of the Group’s major competitors;

analysis of TOTAL’s ambitions over the next 20 years.

September 21

– analysis of the strategy of one of the Group’s major competitors;

–

analysis of long-term demand on the oil and gas markets.

To allow the Board of Directors of TOTAL S.A. to ensure the

Group’s development, the Strategic Committee’s duties include:

1

.2.8. Assessment of the Board’s practices

–

examining the Group’s overall strategy proposed by the

Company’s Chief Executive Officer;

examining operations that are of particular strategic importance;

and

reviewing competition and the resulting medium and long-term

outlook for the Group.

Once a year, the Board of Directors discusses its practices. It also

conducts a formal assessment of its own practices at regular

intervals of up to three years. This evaluation is carried out under

the supervision of the Lead Independent Director, if one has been

appointed, or under the supervision of the Governance and Ethics

Committee with the help of an outside consultant. When a Lead

Independent Director is appointed, he or she oversees this

evaluation process and reports on it to the Board of Directors.

Registration Document 2016. TOTAL

109

Corporate governance

5

Composition and practices of the Board of Directors

At its meeting on February 8, 2017, the Board of Directors

discussed its practices on the basis of a formal self-assessment

carried out in the form of a detailed questionnaire. The evaluation

was carried out under the supervision of Ms. Barbizet, Lead

Independent Director, in January 2017. The responses given by the

directors were then presented to the Governance and Ethics

Committee to be reviewed and summarized. This summary was

then discussed by the Board of Directors. This process made it

possible to confirm the quality of each director’s contribution to the

work of the Board and its Committees.

1.2.9. Report of the Lead Independent Director on

her mandate

During the Board meeting of February 8, 2017, Ms. Barbizet

presented a report of her mandate as Lead Independent Director.

The Lead Independent Director indicated that she exercised her

duties since her appointment on December 15, 2016 as follows:

– contact with the Chairman and Chief Executive Officer: the Lead

Independent Director is a privileged interlocutor of the Chairman

and Chief Executive Officer with respect to significant matters

concerning the Group’s business and preparing meetings of the

Board of Directors;

This formal evaluation showed a positive opinion of the practices

of the Board of Directors and the Committees. In particular, it was

noted that the suggestions for improvement made by the directors

in recent years had generally been taken into account. During the

Board of Directors’ meetings, some of which were held at certain

of the Group’s sites, special attention was paid at the start of each

meeting to the review of the main points to be examined by the

Board (financial statements, large-scale investment and divestment

projects, etc.).

–

assessment of the Board’s practices: the Lead Independent

Director conducted the assessment of the Board’s practices

(refer to point 1.2.8, above);

–

avoidance of conflicts of interest: the Lead Independent Director

put in place the diligence intended to identify and analyze

potential situations of conflicts of interest. She brought to the

attention of the Chairman and Chief Executive Officer potential

situations of conflict of interest that had been identified. In

September 2016, a director thus consulted the Lead

Furthermore, the main suggestions for improving the Board made

by the directors during their January 2016 self-assessment have

been put in place:

Independent Director concerning a potential conflict of interest

that could arise due to the director’s potential participation on a

committee in charge of strategically advising the board of

directors of a company of the energy sector. Following this

consultation, this director decided on September 22, 2016 to not

accept the offer to participate in the committee. The Lead

Independent Director also indicated to the Board that the

Chairman and Chief Executive Officer has informed the

–

monitoring risks at the Board’s level: a presentation of the

Group’s risk map was made to the Board during its meeting of

April 26, 2016, and such presentation is to take place annually;

evolution of the Board’s composition: proposals by the

Governance and Ethics Committee to the Board of Directors of

February 8, 2017 met the directors’ expectations;

–

Governance and Ethics Committee that he had been solicited so

that his appointment as director of Cap Gemini S.A. would be

proposed to the next shareholders meeting of that company.

Considering this company’s activities in advanced technologies

that could have an important role in the evolution of the Group’s

businesses, the Committee recommended to the Board that it

grants its authorization. The Board of Directors authorized the

Chairman and Chief Executive Officer to accept this proposal;

– monitoring of the Board’s practices: the Lead Independent Director

held a meeting on December 15, 2016 of the non-executive and

non-salaried directors. She presented a summary of this meeting

to the Board of Directors. The specific issues discussed during

this meeting were the following: understanding internal organization

and knowledge of senior executives in order to, notably, make

succession plans; analysis of extra-financial risks, in particular

geopolitical risks; and ex post analysis of implemented projects;

relations with shareholders: the Chairman and Chief Executive

Officer and the Lead Independent Director are the priviledged

points of contacts for shareholders concerning accountability of

the Board. When the Chairman and Chief Executive Officer is

solicited in this area by a shareholder, he may consult with the

Lead Independent Director before responding. When the Lead

Independent Director is solicited in this area by a shareholder,

she informs the Chairman and Chief Executive Officer and gives

her opinion so that the Chairman and Chief Executive Officer can

give appropriate response to the request. The Chairman and

Chief Executive Officer informs the Lead Independent Director of

the response. Thus, for example, the Lead Independent Director

was informed in January 2016 of a question of a shareholder of

the Company concerning the high number of mandates exercised

by a director and the answer that was given by the Company;

–

independent directors’ meeting: held on December 15, 2016 at

the initiative of the Lead Independent Director; and

secured platform to access the Board’s documents: this platform

was put in place in September 2016.

This self-assessment conducted in January 2017 highlighted the

directors’ satisfaction with the practices of the Board of Directors,

both in terms of form and substance, and, in particular, concerning

freedom of expression, an appropriate level of dialogue, the collegiality

of decision-making and the relevance of subjects addressed.

The directors appreciated notably the pace and agenda of meetings,

the possibility for informal exchanges during lunches and meetings

held at Group sites, as well as the quality of relations with the Lead

Independent Director. The Board of Directors made the following

suggestions that could further improve its practices:

–

understanding of the Group’s organization and knowledge

of its executive officers;

analysis of extra-financial risks, in particular geopolitical risks,

relating to significant investment projects submitted to the Board;

ex post analysis of major investment decisions;

new director induction program; and

–

facilitation of access to the electronic document platform of the

Board of Directors.

In addition, in compliance with Article 7.2.6. of the Board Rules of

Procedures, the Lead Independent Director held on December 15,

2

salaried positions on the Board of Directors. During this meeting,

which was reported to the Board of Directors, directors also

discussed the Board of Directors’ practices.

016, a meeting of the directors who do not hold executive or

110

TOTAL. Registration Document 2016

Corporate governance

Composition and practices of the Board of Directors

5

–

relations with other stakeholders: certain suppliers of the Group

contacted the Lead Independent Director concerning various

claims against the Company. Responses were transmitted by

various relevant services of the Company after the Lead

Independent Director had been informed on the matters.

1.3. Statement regarding corporate governance

For many years, TOTAL has taken an active approach to corporate

governance and at its meeting on November 4, 2008, the Board of

Directors decided to refer to the AFEP-MEDEF Code of Corporate

Governance for publicly traded companies.

establishment of a High Committee for corporate governance, an

independent structure in charge of monitoring implementation of

the Code. It was also revised in November 2015 to introduce the

principle of consultation of the Annual Shareholders’ Meeting in

case of the sale of at least one half of the Company’s assets and to

bring the Code in line with new laws regarding supplementary

pensions of executive directors. The Code was also revised in

November 2016 in order to clarify and complete certain

The AFEP-MEDEF Code is available on the Internet websites of the

AFEP and the MEDEF.

The AFEP-MEDEF Code was revised in June 2013 to introduce

new changes regarding, in particular, a consultation procedure in

which shareholders can express an opinion on the individual

compensation of the executive directors (say on pay), as well as the

recommendations, in particular on the independence of directors,

CSR and the compensation of the executive directors.

Pursuant to Article L. 225-37 of the French Commercial Code, the following table sets forth the sole recommendation made in the AFEP-

MEDEF Code that the Company has opted not to follow and the reasons for such decision.

Recommendations not followed

Explanation – Practice followed by TOTAL

Supplementary pension plan (point 24.6.2 of the Code)

It appeared justified not to deprive the relevant beneficiaries of the

benefit of the pension commitments made by the Company in the

particular cases of the disability or departure of a beneficiary over

–

Supplementary pension schemes with defined benefits must be

subject to the condition that the beneficiary must be a director or

employee of the Company when claiming his or her pension

rights pursuant to the applicable rules.

55 years of age at the initiative of the Group. In addition, it should

be noted that the supplementary pension plan set up by the Company

was declared to URSSAF in 2004, in accordance with Articles

L. 137-11 and R. 137-16 of the French Social Security Code.

Compared to the prior fiscal year, the Company’s practices have

evolved in two areas concerning the recommendations made in the

AFEP-MEDEF Code. First, a meeting not attended by the executive

and non-executive directors took place on December 15, 2016.

The recommendation made in the AFEP-MEDEF Code (point 10.3)

stating that “It is recommended that a meeting not attended by the

executive Officers be organized each year” was, therefore, followed.

Second, concerning the recommendation made in the AFEP-

MEDEF Code concerning the composition of the Compensation

Committee that one “director designated by employees should be a

member”, the Board of Directors approved on February 8, 2017,

the proposal of the Governance and Ethics Committee to appoint

Ms. Renata Perycz as a member of the Compensation Committee

as from the end of the Shareholder Meeting of May 26, 2017.

Ms. Perycz, thanks to the nature of her salaried duties in the Group,

will in particular bring to the Compensation Committee her experience

in Human Resources.

Registration Document 2016. TOTAL

111

Corporate governance

5

General Management. Shares held by the administration and management bodies

2. General Management

2.1. The Executive Committee

The Executive Committee, under the responsibility of the Chairman

and Chief Executive Officer, is the decision-making body of the

Group.

As of December 31, 2016, the members of TOTAL’s Executive

Committee were as follows:

–

Patrick Pouyanné, Chairman and Chief Executive Officer

and President of the Executive Committee;

It implements the strategy formulated by the Board of Directors and

authorizes related investments, subject to the approval of the Board

of Directors for investments exceeding 3% of the Group’s equity or

notification of the Board for investments exceeding 1% of equity.

– Arnaud Breuillac, President, Exploration & Production;

– Patrick de La Chevardière, Chief Financial Officer;

– Momar Nguer, President, Marketing & Services;

–

Bernard Pinatel, President, Refining & Chemicals;

Philippe Sauquet, President, Gas, Renewables & Power,

and President, Group Strategy-Innovation; and

In 2016, the Executive Committee met at least twice a month,

except in August when it met once.

–

Namita Shah, President, People & Social Responsibility.

2.2. The Group Performance Management Committee

The mission of the Group Performance Management Committee is

to examine, analyze and monitor the safety, financial and

operational results of the Group. It is chaired by the Chairman and

Chief Executive Officer and meets monthly.

In addition to the members of the Executive Committee, this

Committee, chaired by the Chairman and Chief Executive Officer, is

made up of the head of the Group’s main business units, as well as

a limited number of Senior Vice Presidents of functions at the

Group and business segment levels.

3

. Shares held by the administration

and management bodies

As of December 31, 2016, based on statements by the directors

and the share register listing registered shares, all of the members

of the Board of Directors and the Group’s executive officers⁽¹⁾held

less than 0.5% of the share capital:

By decision of the Board of Directors:

–

executive directors are required to hold a number of shares of

the Company equal in value to two years of the fixed portion of

their annual compensation; and

–

members of the Board of Directors⁽²⁾: 88,067 shares and

0,293.26 units of the collective investment fund (“FCPE”)

invested in TOTAL shares;

– members of the Executive Committee are required to hold a

number of shares of the Company equal in value to two years of

the fixed portion of their annual compensation. These shares

must be acquired within three years of their appointment to the

Executive Committee.

1

–

Chairman and Chief Executive Officer: 72,470 shares and

8

,177.02 units of the FCPE invested in TOTAL shares;

members of the Executive Committee⁽³⁾: 290,233 shares and

5,133.81 units of the FCPE invested in TOTAL shares; and

The number of TOTAL shares to be considered are comprised of

TOTAL shares and units of the FCPE invested in TOTAL shares.

1

executive officers⁽³⁾: 359,483 shares and 22,079.74 units of the

FCPE invested in TOTAL shares.

(

1) The Group’s executive officers include the members of the Executive Committee, the four Senior Vice Presidents of the central Group functions who are members of the Group

Performance Management Committee (HSE, Strategy & Climate, Communications, Legal) and the Treasurer.

2) Including the Chairman and Chief Executive Officer, the director representing employee shareholders and the director representing employees.

(

(3) Excluding the Chairman and Chief Executive Officer.

112

TOTAL. Registration Document 2016

Corporate governance

Shares held by the administration and management bodies

5

Summary of transactions in the Company’s securities (Article L. 621-18-2 of the French Monetary and

Financial Code)

The following table presents transactions, of which the Company has been informed, in the Company’s shares or related financial

instruments carried out in 2016 by the individuals referred to in paragraphs a), b) ⁽¹⁾and c) of Article L. 621-18-2 of the French Monetary and

Financial Code:

Year 2016

Acquisition Subscription Transfer Exchange Exercise

of stock

options

Patrick Pouyanné⁽^a⁾

Maria van der Hoeven⁽^a⁾

Gérard Lamarche⁽^a⁾

Jean Lemierre⁽^a⁾

TOTAL shares

Units in FCPE and other related financial instruments⁽^b⁾

-

2,182.00 16,000.00

16,000.00

409.25

0.71

-

TOTAL shares

Units in FCPE and other related financial instruments⁽^b⁾

TOTAL shares

1,000.00

-

30.00

-

Units in FCPE and other related financial instruments⁽^b⁾

-

TOTAL shares

Units in FCPE and other related financial instruments⁽^b⁾

TOTAL shares

1,000.00

-

Philippe Boisseau⁽^a⁾

Arnaud Breuillac⁽^a⁾

-

299.00

13.64

-

Units in FCPE and other related financial instruments⁽^b⁾

19.78

-

TOTAL shares

Units in FCPE and other related financial instruments⁽^b⁾

-

1,403.00 12.500,00

230.99 3,620.21

4,738.00 20,000.00

17,500.00

130.59

-

Patrick de La Chevardière⁽^a⁾TOTAL shares

Units in FCPE and other related financial instruments⁽^b⁾

Jean-Jacques Guilbaud⁽^a⁾TOTAL shares

Units in FCPE and other related financial instruments⁽^b⁾

TOTAL shares

-

20,000.00

117.89

418.83

1,854.00

585.02

941.94

-

143.38

-

Momar Nguer⁽^a⁾

Bernard Pinatel⁽^a⁾

Philippe Sauquet⁽^a⁾

Namita Shah⁽^a⁾

-

78.79

-

167.00 17,949.00

0.268 6,579.67

333.00 20,500.00

21,800.00

Units in FCPE and other related financial instruments⁽^b⁾

-

TOTAL shares

Units in FCPE and other related financial instruments⁽^b⁾

TOTAL shares

20,500.00

9.21

-

1,575.00

7,600.00

Units in FCPE and other related financial instruments⁽^b⁾

642.51

-

11.46 6,851.25

-

TOTAL shares

Units in FCPE and other related financial instruments⁽^b⁾

49.00

5.86

-

11.91

(

a) Including related parties within the meaning of the provisions of Article R. 621-43-1 of the French Monetary and Financial Code.

b) FCPE primarily invested in TOTAL shares.

(1) The individuals referred to in paragraph b) of Article L. 621-18-2 of the French Monetary and Financial Code include the members of the Executive Committee.

Registration Document 2016. TOTAL

113

Gouvernement d’entreprise

5

Statutory auditors

4. Statutory auditors

4.1. Auditor’s term of office

Statutory auditors

Alternate auditors

ERNST & YOUNG Audit

Cabinet Auditex

1

/2, place des Saisons, 92400 Courbevoie-Paris-La Défense, Cedex 1

1/2, place des Saisons, 92400 Courbevoie-Paris-La Défense, Cedex 1

Appointed: May 21, 2010, for 6 fiscal years

Appointment renewed on May 24, 2016 for an additional

6-fiscal year term.

Appointed: May 14, 2004. Appointment renewed on May 24, 2016

for an additional 6-fiscal year term.

Y. Salaün, L. Miannay

KPMG S.A.

KPMG Audit IS

Tour EQHO, 2 avenue Gambetta, CS 60055, 92066 Paris

La Défense Cedex

Tour EQHO, 2 avenue Gambetta, CS 60055, 92066 Paris

La Défense Cedex

Appointed: May 13, 1998. Appointment renewed on May 24, 2016

for an additional 6-fiscal year term.

M. Piette, V. Besson

Appointed: May 21, 2010, for 6 fiscal years

Appointment renewed on May 24, 2016 for an additional

6-fiscal year term.

French law provides that the statutory and alternate auditors are appointed for renewable 6-fiscal year terms. The terms of office of the

statutory auditors and of the alternate auditors will expire at the end of the Annual Shareholders’ Meeting called in 2022 to approve the

financial statements for fiscal year 2021.

4.2. Fees received by the statutory auditors

(including members of their networks)

ERNST & YOUNG Audit

Amount in M$

KPMG S.A.

2015

%

Amount in M$

(excluding VAT)

%

(

excluding VAT)

2016

2015

2016

2015

2016

2015

Audit

Statutory auditors, certification,

examination of the parent

company and consolidated

accounts

TOTAL S.A.

Fully consolidated subsidiaries

20.2

3.2

17.0

22.0

3.3

18.7

63.6

10.2

53.4

81.9

12.3

69.6

16.5

3.0

13.5

16.0

3.4

12.6

70.2

12.8

57.4

66.4

14.1

52.3

Other work and services directly

related to the mission of the

statutory auditors

TOTAL S.A.

Fully consolidated subsidiaries

5.0

0.7

4.3

1.1

0.2

0.9

15.6

2.2

13.4

4.0

0.7

3.3

4.5

0.5

4.0

4.8

0.7

4.1

19.1

2.1

17.0

19.9

2.9

17.0

Subtotal

25.2

23.1

79.2

85.9

21.0

20.8

89.4

86.3

Other services provided

by the networks to fully-

consolidated subsidiaries

Legal, tax, labor law

Other

6.1

0.5

3.3

0.5

19.1

1.6

12.2

1.9

2.4

0.1

3.0

0.3

10.2

0.4

12.4

1.3

Subtotal

Total

6.6

3.8

20.8

100

14.1

100

2.5

3.3

10.6

100

13.7

100

31.8

26.9

23.5

24.1

114

TOTAL. Registration Document 2016

12.

Responsabilité sociale, environ-

Compensation of the administration

and management bodies

nementale et sociétale

6

Compensation of the administration

and management bodies

1

.

Board members’ compensation

116

2

Chairman and Chief Executive Officer’s compensation

118

2

.1.

.2.

Compensation of the Chairman and Chief Executive Officer due or granted for fiscal year 2016 . . . . . . . . . . . . . . . . . . . . .118

Commitments made by the Company to the Chairman and Chief Executive Officer

(Article L. 225-102-1, paragraph 3, of the French Commercial Code) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .120

2.3.

Summary tables (AFEP-MEDEF Code/AMF position-recommendation No. 2009-16) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123

3

.

Executive officers’ compensation

Stock option and free share grants

125

4

4.1.

4.2.

4.3.

4.4.

General policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .125

Follow-up of grants to the executive directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .126

Follow-up of TOTAL stock option plans as of December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .128

Follow-up of TOTAL free share grants as of December 31, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .130

5.

Summary table of compensation components due or granted

to the Chairman and Chief Executive Officer for fiscal year 2016,

as submitted to the Ordinary Shareholders’ Meeting for vote

(

AFEP-MEDEF Code, point 26)

132

138

6.

Report on the principles and criteria for the determination, breakdown

and allocation of the fixed, variable and extraordinary components

of the total compensation (including in-kind benefits) attributable

to the Chairman and Chief Executive Officer (Article L. 225-37-2

of the French Commercial Code)

6.1.

6.2.

6.3.

General principles for determining the compensation of the executive directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .138

Compensation policy for the Chairman and Chief Executive Officer for fiscal year 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . .139

Draft resolution prepared by the Board of Directors in accordance with Article L. 225-37-2

of the French Commercial Code (paragraph 1) submitted to the Ordinary Shareholders’ Meeting of May 26, 2017 . . . . . .142

Registration Document 2016. TOTAL

115

Compensation of the administration and management bodies

6

Board members’ compensation

1. Board members’ compensation

The conditions applicable to Board members’ compensation are

defined by the Board of Directors on the proposal of the

Governance and Ethics Committee, subject to the aggregate

maximum amount of directors’ fees authorized by the Annual

Shareholders’ Meeting of May 17, 2013 and set at €1.4 million per

fiscal year.

The director representing employee shareholders and the director

representing employees receive directors’ fees according to the

same terms and conditions as any other director.

The table below presents the total compensation (including in-kind

benefits) due and paid to each executive and non-executive

director (mandataires sociaux) during the previous two fiscal years

(Article L. 225-102-1 of the French Commercial Code, 1^s^tand

2ⁿ^dparagraphs).

In 2016, the aggregate amount of directors’ fees due to the

members of the Board of Directors was €1.1 million, noting that

there were 12 directors as of December 31, 2016.

Mr. Marc Blanc, the director representing employees, participates in

the internal defined contribution pension plan applicable to all

TOTAL S.A. employees, known as RECOSUP (Régime collectif et

obligatoire de retraite supplémentaire à cotisations définies),

governed by Article L. 242-1 of the French Social Security Code.

The Company’s commitment is limited to its share of the

contributions paid to the insurance company that manages the

plan. For fiscal year 2016, this pension plan represented a booked

expense to TOTAL S.A. in favor of Mr. Blanc of €764.

The directors’ fees for fiscal year 2016 are allocated according to a

formula comprised of fixed compensation and variable

compensation based on fixed amounts per meeting, which makes

it possible to take into account each director’s actual attendance at

the meetings of the Board of Directors and its committees, subject

to the conditions below:

–

a fixed annual portion of €20,000 per director⁽¹⁾, except for the

Chairman of the Audit Committee, for whom the fixed annual

portion is €30,000, and the other Audit Committee members, for

whom the fixed annual portion is €25,000;

Mr. Blanc, who joined the Elf Aquitaine Group in 1980, also

participates in a supplementary defined benefit pension plan,

known as CREA, set up and financed by the Company. This plan

covers former employees of the Elf Aquitaine Group and was

closed on December 31, 1994. It does not require a presence

condition within the Group at the time of retirement. The

commitments made by the Group in favor of Mr. Blanc under this

plan represent, at December 31, 2016, a gross annual pension,

payable to his spouse within a limit of 60% in case of death of the

beneficiary, estimated at €4,877. Nearly the full amount of the

Group’s commitments under the CREA plan is outsourced to an

insurance company and the non-outsourced balance is evaluated

annually and adjusted through a provision in the accounts. The

amount of these commitments at December 31, 2016 in favor of

Mr. Blanc is €138.6 thousand. This amount represents the gross

value of the Group’s commitments to this beneficiary based on the

gross annual pension estimated as of December 31, 2016, as well

as a statistical life expectancy of the beneficiary and his spouse.

–

an additional fixed annual portion⁽¹⁾of €15,000 for the Lead

Independent Director;

an additional fixed annual portion⁽of €5,000 for the Chairman

of the Governance and Ethics Committee and for the Chairman

of the Compensation Committee;

1)

–

an amount of €5,000 per director for each Board of Directors’

meeting actually attended;

an amount of €3,500 per director for each Governance and

Ethics Committee, Compensation Committee or Strategic

Committee meeting actually attended;

–

an amount of €7,000 per director for each Audit Committee

meeting actually attended; and

a premium of €2,000 for travel from outside France to attend a

Board of Directors’ or Committee meeting.

The Chairman and Chief Executive Officer does not receive directors’

fees for his work on the Board and Committees of TOTAL S.A.

During the past two years, the directors currently in office have not

received any compensation or in-kind benefits from TOTAL S.A. or

from its controlled companies other than those mentioned in the

table below.

The total amount paid to each director is determined after taking

into consideration the director’s actual presence at each Board of

Directors’ or Committee meeting and, if appropriate, after prorating

the amount set for each director such that the overall amount paid

remains within the maximum limit set by the Shareholders’ Meeting.

Directors’ fees for each fiscal year are paid following a decision by

the Board of Directors, on the proposal of the Governance and

Ethics Committee, at the beginning of the following fiscal year.

Moreover, there is no service contract between a director and

TOTAL S.A. or any of its controlled companies that provides for the

grant of benefits under such a contract.

(1) Calculated on a prorata basis in case of a change during the year.

116

TOTAL. Registration Document 2016

Compensation of the administration and management bodies

Board members’ compensation

6

Table of directors’ fees and other compensation due and paid to the executive and non-executive directors

(AMF Table No. 3)

For fiscal year 2016

For fiscal year 2015

Gross amount

€)

Amounts

due

Amounts

paid

Amounts

due

Amounts

paid

(

Patrick Pouyanné

Directors’ fees

Other compensation

None

(a)

Thierry Desmarest

Directors’ fees⁽

Other compensation

b)(f)

39,924

None

82,500

None

82,500

None

101,500

None

Patrick Artus

Directors’ fees

Other compensation

121,000

None

88,000

None

88,000

None

101,500

None

Patricia Barbizet

Directors’ fees⁽

Other compensation

c)

109,500

None

130,644

None

130,644

None

136,000

None

Marc Blanc

Directors’ fees⁽

d) (e)

73,500

76,443

72,000

76,443

72,000

75,014

8,178

75,014

Other compensation

Gunnar Brock

Directors’ fees⁽

f)

42,924

None

107,500

None

107,500

None

115,000

None

Other compensation

Marie-Christine Coisne-Roquette

Directors’ fees⁽

Other compensation

g)

146,500

None

122,679

None

122,679

None

126,000

None

Bertrand Collomb

Directors’ fees⁽

Other compensation

h)

n/a

28,109

None

28,109

None

81,000

None

Paul Desmarais, Jr

Directors’ fees

Other compensation

49,500

None

61,000

None

61,000

None

56,000

None

Maria van der Hoeven

Directors’ fees⁽

Other compensation

i)

43,576

None

n/a

Anne-Marie Idrac

Directors’ fees

Other compensation

84,000

None

79,000

None

79,000

None

77,000

None

Charles Keller

Directors’ fees⁽

e) (j)

59,405

90,326

126,000

90,326

126,000

91,947

93,083

91,947

Other compensation

Barbara Kux

Directors’ fees

Other compensation

100,000

None

102,500

None

102,500

None

104,000

None

Gérard Lamarche

Directors’ fees⁽

Other compensation

k)

150,000

None

147,000

None

147,000

None

156,000

None

Anne Lauvergeon

Directors’ fees⁽

Other compensation

h)

n/a

31,609

None

31,609

None

68,500

None

Jean Lemierre

Directors’ fees⁽

i)

32,076

None

n/a

Other compensation

Michel Pébereau

Directors’ fees⁽

Other compensation

h)

n/a

31,609

None

31,609

None

74,000

None

Renata Perycz

Directors’ fees⁽

Other compensation

l)

48,576

53,158

None

53,158

n/a

Total

1,320,408

1,430,077

1,377,111

1,507,673

(

a) For more information concerning compensation, refer to the summary tables presented in point 2.3 of this chapter.

b) Mr. Desmarest did not receive any specific compensation as Chairman of the Board until December 18, 2015. In respect of the previous duties that he performed within the Group until

May 21, 2010, he receives a retirement pension from the pension plans set up by the Company (internal defined contribution pension plan known as RECOSUP and supplementary

defined benefit pension plan).

(

c) Lead Independent Director and Chairwoman of the Governance and Ethics Committee since December 19, 2015. Chairwoman of the Audit Committee until December 18, 2015.

d) Director representing employees since November 4, 2014.

(

e) Messrs. Blanc and Keller chose to pay all their directors’ fees to their trade union membership organizations for the entire term of their directorship.

(

f) Director until May 24, 2016.

g) Chairwoman of the Audit Committee since December 19, 2015.

h) Director until May 29, 2015.

i) Director since May 24, 2016.

j) Director representing employee shareholders until May 24, 2016.

k) Chairman of the Compensation Committee since December 19, 2015.

l) Director representing employee shareholders since May 24, 2016.

Registration Document 2016. TOTAL

117

Compensation of the administration and management bodies

6

Chairman and Chief Executive Officer’s compensation

2. Chairman and Chief Executive Officer’s compensation

2.1. Compensation of the Chairman and Chief Executive Officer due or granted

for fiscal year 2016

The compensation policy applicable to the Chairman and Chief

Executive Officer is reviewed each year by the Board of Directors

on the proposal of the Compensation Committee. The

compensation policy for the Chairman and Chief Executive Officer

for fiscal year 2016 was approved by the Board of Directors on

December 16, 2015, on the proposal of the Compensation

Committee.

2.1.1. Fixed and variable annual compensation

due in 2016

In accordance with the compensation policy defined by the Board

of Directors on December 16, 2015, at its meeting on February 8,

2017 and on a proposal from the Compensation Committee, the

Board of Directors determined the compensation due to Mr.

Pouyanné for his duties as Chairman and Chief Executive Officer for

fiscal year 2016. This compensation consists of a base salary (fixed

portion) of €1,400,000 (higher than in fiscal year 2015 following the

Board of Directors’ decision to appoint Patrick Pouyanné as

Chairman and Chief Executive Officer of TOTAL S.A.) and a variable

portion (paid in 2017) of €2,339,400 corresponding to 167.10% of

his fixed compensation.

Mr. Pouyanné’s compensation consists of a fixed portion, an annual

variable portion calculated on the basis of predefined criteria and a

long-term component in the form of performance shares.

Performance shares are granted under plans that are not specific to

the Chairman and Chief Executive Officer and are structured over a

five-year period with a three-year vesting period followed by a

mandatory two-year holding period. The definitive grant of shares is

subject to a presence condition and performance conditions

assessed at the end of the three-year vesting period.

To determine the variable portion of the compensation due to the

Chairman and Chief Executive Officer for fiscal year 2016, at its

meeting on February 8, 2017, the Board of Directors reviewed the

level of achievement of the economic parameters based on the

targets set by the Board of Directors at its meeting on

December 16, 2015. The Board of Directors also assessed the

Chairman and Chief Executive Officer’s personal contribution on the

basis of the four objective and operational target criteria set during

its meeting on December 16, 2015.

Mr. Pouyanné does not receive any multi-year or deferred variable

compensation or any extraordinary compensation. He does not

receive directors’ fees as director of TOTAL S.A.

In addition, the Company is committed to paying Mr. Pouyanné a

retirement benefit and a severance benefit in the event of forced

departure related to a change of control or strategy. The Chairman

and Chief Executive Officer is also entitled to the pension plans in

place within the Group. In line with the principles of the AFEP-

MEDEF Code, the benefit accruing from participation in the pension

plans has been taken into consideration when determining the

compensation policy applicable to the Chairman and Chief

Executive Officer for fiscal year 2016. These commitments, which

are subject to performance conditions, are described in more detail

in point 2.2 below.

Annual variable compensation due

for fiscal year 2016 (expressed as a percentage

of the base salary)

Maximum Percentage

percentage

allocated

Economic parameters

– Safety - comparative

140%

20%

127.10%

20%

–

Return on equity (ROE)

Net debt-to-equity ratio

Adjusted net income (ANI) -

comparative

30%

40%

17.10%

40%

In addition, Mr. Pouyanné has the use of a company car and

benefits from the life insurance plans and the health care plan that

are described in more detail in point 2.2 below.

50%

40%

10%

50%

10%

The structure of the compensation due or granted to Mr. Pouyanné

for fiscal year 2016 is as follows:

Personal contribution:

– successful managerial transition

–

40%

achievement of production

and reserve targets

successful strategic negotiations

with producing countries

10%

2,561,100

2,339,400

– Corporate Social Responsibility

CSR) performance

(

10%

Fixed portion

Total

180%

167.10%

Annual

variable

portion

Performance

shares

1,400,000

The Board of Directors assessed achievement of the targets set for

the economic parameters as follows:

(

accounting

valuation)

– The safety criterion was assessed based on the achievement of

an annual TRIR (Total Recordable Injury Rate) target and the

number of accidental deaths per million hours worked, FIR

(Fatality Incident Rate), compared with those of four large oil

In-kind

benefits

58,945

(

ꢀ)

118

TOTAL. Registration Document 2016

Compensation of the administration and management bodies

Chairman and Chief Executive Officer’s compensation

6

companies⁽¹⁾. The Board of Directors noted that the target of a

TRIR lower than 1.15 was fully achieved in 2016. It also noted

that the number of accidental deaths per million hours worked,

FIR (Fatality Incident Rate), was the best among the panel of

majors. It therefore set the portion for this criterion at 20% of the

fixed compensation (of a maximum of 20%).

Mr. Pouyanné had the use in 2016 of a company car and benefited

from the life insurance plans and the health care plan described in

detail in point 2.2 below. These benefits were booked in the amount

of €58,945 in the Consolidated Financial Statements at

December 31, 2016.

–

For the return on equity (ROE) criterion⁽²⁾, the Board of Directors

noted that, in 2016, the ROE was 8.7%, which led the portion for

this criterion to be set at 17.10% of the fixed compensation for

fiscal year 2016 (of a maximum of 30%).

For the net debt-to-equity ratio criterion⁽³⁾, the Board of Directors

noted that, in 2016, the Group’s net debt-to-equity ratio is less

than 30%, which led the portion for this criterion to be set at

2.1.2. Grant of performance shares in 2016

At its meeting on July 27, 2016, the Board of Directors, on the

proposal of the Compensation Committee and pursuant to the

authorization of the Company’s Combined Shareholders’ Meeting

of May 24, 2016 (twenty-fourth resolution), decided to grant Mr.

Pouyanné 60,000 existing shares of the Company (corresponding

to 0.002% of the share capital) subject to the conditions set out

below. These shares were granted under a broader share plan

approved by the Board of Directors on July 27, 2016, relating to

40% of the fixed compensation for fiscal year 2016 (of a

maximum of 40%).

–

The criterion related to the change in the Group’s adjusted net

income (ANI) was assessed by comparison with those of the four

large oil companies⁽¹⁾. The Board of Directors noted that the

increase in the Group’s three-year average ANI was better than

that of the panel⁽⁴⁾, which led the portion for this criterion to be

set at 50% of the fixed compensation for fiscal year 2016 (of a

maximum of 50%).

0.8% of the share capital in favor of more than 10,000 non

executive beneficiaries.

The definitive grant of all the shares is subject to the beneficiary’s

continued presence within the Group during the vesting period and

to performance conditions as described below.

The definitive number of shares granted will be based on the

comparative TSR (Total Shareholder Return) and the annual

variation in net cash flow per share for fiscal years 2016 to 2018,

applied as follows:

Regarding the Chairman and Chief Executive Officer’s personal

contribution, the Board of Directors determined that the targets set

were largely achieved, particularly those related to the increase in oil

and gas production (+4.5% in 2016 compared to 2015), the

successful strategic negotiations with producing countries

–

the Company will be ranked each year against its peers⁽¹⁾during

the three vesting years (2016, 2017 and 2018) based on the TSR

criterion using the average closing market price expressed in

dollars over one quarter at the beginning and end of each three-

year period (Q4 year N vs./Q4 year N-3). The dividend will be

considered reinvested based on the last market price on the ex-

dividend date.

(acquisition of an interest in the giant Al-Shaheen oil field in Qatar

for a period of 25 years, signing of a heads of agreement with the

Iranian state-owned company to develop phase 11 of South Pars,

strategic alliance with Petrobras in Brazil) and the successful

managerial transition (implementation of the project “One Total, one

ambition”, acquisition of Saft Groupe which permitted the

integration of electricity storage solutions in the Group’s portfolio,

acquisition of the gas distributor Lampiris, sale of Atotech, renewal

of the Executive Committee as of September 1, 2016). CSR

performance was also considered fully satisfactory based on the

TSR N = (average price Q4 N – average price Q4 N-3 +

reinvested dividends)/(average price Q4 N-3);

the Company will be ranked each year against its peers⁽using

the annual variation in net cash flow per share expressed in

dollars criterion. Net cash flow is defined as cash flow from

operating activities minus cash flow from investing activities

including acquisitions and disposals. This data expressed in

dollars will come from the consolidated statements of cash flow

taken from the annual Consolidated Financial Statements of the

Company and its peers for the fiscal years in question (based on

the accounting standards applicable at the time of the closing of

the accounts for such fiscal years).

1)

–

decrease of the Group’s CO emissions (-7% in 2016 compared to

2

rankings published by non-financial rating agencies.

2

015) and on the improvement of the Group’s position in the

The Chairman and Chief Executive Officer’s personal contribution

was therefore set at 40% of the fixed compensation (of a maximum

of 40%).

Mr. Pouyanné did not benefit from any other components of

compensation due or granted for fiscal year 2016. No multi-year or

deferred variable compensation or extraordinary compensation was

paid to him for fiscal year 2016.

The number of shares used to calculate net cash flow per share

will be the weighted-average number of diluted shares for the

Company and each of its peers.

(

1) ExxonMobil, Royal Dutch Shell, BP and Chevron.

(2) The Group measures the ROE as the ratio of adjusted consolidated net income to average adjusted shareholders’ equity between the beginning and the end of the period. Adjusted

shareholders’ equity for fiscal year 2016 is calculated after payment of a dividend of €2.45 per share, subject to approval by the Annual Shareholders’ Meeting on May 26, 2017. In 2015, the

ROE was 11.5%.

(

3) For its internal management and external communication purposes, the Group calculates a net debt-to-equity ratio by dividing its net financial debt by its adjusted shareholders’ equity. The

016 adjusted shareholders’ equity is calculated after payment of a dividend of €2.45 per share, subject to approval by the Annual Shareholders’ Meeting on May 26, 2017. In 2016, the net

debt-to-equity ratio was 27.1%. In 2015, it was 28.3%.

2

(

4) Adjusted results are defined as income at replacement cost, excluding non-recurring items and excluding the impact of fair value changes. The annual ANI of each peer used for the

calculation is determined by taking the average of the ANIs published by a panel of six financial analysts: UBS, Crédit Suisse, Barclays, Bank of America Merrill Lynch, JP Morgan and

Deutsche Bank. If any of these analysts is unable to publish the results of one or more peers for a given year, it will be replaced, for the year and for the peer(s) in question, in the order listed,

by an analyst included in the following additional list: Jefferies, HSBC, Société Générale, Goldman Sachs and Citi. The ANIs used will be set according to these analysts’ last publications two

business days after the publication of the press release announcing the “fourth quarter and annual results” of the last peer.

Registration Document 2016. TOTAL

119

Compensation of the administration and management bodies

6

Chairman and Chief Executive Officer’s compensation

Based on the ranking, a grant rate will be determined for each year:

representing five times the fixed portion of his gross annual

compensation, this percentage will be equal to 10%. If this

condition is no longer met, the above-mentioned 50% holding

requirement will again apply.

st

–

1 : 180% of the grant;

nd

2 : 130% of the grant;

rd

3 : 80% of the grant; and

4^t^hand 5 : 0%.

th

In addition, the Board of Directors has noted that, pursuant to the

Board’s Rules of Procedure applicable to all directors, the Chairman

and Chief Executive Officer is not allowed to hedge the shares of

the Company or any related financial instruments and has taken

note of Mr. Pouyanné’s commitment to abstain from such hedging

operations with regard to the performance shares granted.

For each of the criteria, the average of the three grant rates

obtained (for each of the three fiscal years for which the

performance conditions are assessed) will be rounded to the

nearest 0.1 whole percent (0.05% being rounded to 0.1%) and

capped at 100%. Each criterion will have a weight of 50% in the

definitive grant rate. The definitive grant rate will be rounded to the

nearest 0.1 whole percent (0.05% being rounded to 0.1%).

The grant of performance shares to Mr. Pouyanné is subject to the

same requirements applicable to the other beneficiaries of the

performance share plan and were approved by the Board at its

meeting on July 27, 2016. In particular, these provisions stipulate

that the shares definitively granted at the end of the three-year

vesting period will, after confirmation of fulfillment of the presence

and performance conditions, be automatically recorded as pure

registered shares on the start date of the two-year holding period

and will remain non-transferable and unavailable until the end of the

holding period.

The number of shares definitively granted, after confirmation of the

performance conditions, will be rounded to the nearest whole

number of shares in case of a fractional lot.

In accordance with the provisions of the French Commercial Code,

Mr. Pouyanné will, until the end of his term, be required to retain in

the form of registered shares 50% of the gains on the acquired

shares net of tax and national insurance contributions related to the

shares granted. When Mr. Pouyanné holds a volume of shares⁽¹⁾

2.2. Commitments made by the Company to the Chairman and Chief Executive Officer

(Article L. 225-102-1, paragraph 3, of the French Commercial Code)

The commitments made to the Chairman and Chief Executive

Officer regarding pension plans, retirement benefit and severance

benefit to be paid in the event of forced departure related to a

change of control or strategy, as well as the life insurance and

health care benefits set out below, were approved by the Board

of Directors on December 16, 2015. They were approved by the

Annual Shareholders’ Meeting of May 24, 2016, in accordance with

the provisions of Article L. 225-42-1 of the French Commercial Code.

The Chairman and Chief Executive Officer also participates in a

supplementary defined benefit pension plan, covered by Article

L. 137-11 of the French Social Security Code, set up and financed

by the Company and approved by the Board of Directors on

March 13, 2001, for which management is outsourced to two

insurance companies effective January 1, 2012. This plan applies to

all TOTAL S.A. employees whose compensation exceeds eight

times the annual ceiling for calculating French Social Security

contributions (PASS), set at €38,616 for 2016 (i.e., €308,928), and

above which there is no conventional pension plan. To be eligible

for this supplementary pension plan, participants must have served

for at least five years, be at least 60 years old and exercised his or

her rights to retirement from the French Social Security. The

benefits under this plan are subject to a presence condition under

which the beneficiary must still be employed at the time of

retirement. However, the presence condition does not apply if a

beneficiary aged 55 or older leaves the Company at the Company’s

initiative or in case of disability.

It should be noted that Mr. Pouyanné already benefited from all

these provisions when he was an employee of the Company,

except for the commitment to pay severance benefits in the event

of forced departure related to a change of control or strategy. It

should also be noted that Mr. Pouyanné, who joined the Group on

January 1, 1997, ended the employment contract that he

previously had with TOTAL S.A. through his resignation at the time

of his appointment as Chief Executive Officer on October 22, 2014.

Pension plans

The length of service acquired by Mr. Pouyanné as a result of his

previous salaried duties held at the Group since January 1, 1997

has been maintained for the benefit of this plan.

Pursuant to applicable legislation, the Chairman and Chief

Executive Officer is eligible for the basic French Social Security

pension and for pension benefits under the ARRCO and AGIRC

supplementary pension plans.

The compensation taken into account to calculate the

supplementary pension is the average gross annual compensation

He also participates in the internal defined contribution pension

plan applicable to all TOTAL S.A. employees, known as RECOSUP

(fixed and variable portion) over the last three years. The amount

paid under this plan is equal to 1.8% of the portion of the

compensation falling between 8 and 40 times the PASS and 1%

for the portion of the compensation falling between 40 and 60

times the PASS, multiplied by the number of years of service up to

a maximum of 20 years.

(Régime collectif et obligatoire de retraite supplémentaire à

cotisations définies), covered by Article L. 242-1 of the French

Social Security Code. The Company’s commitment is limited to its

share of the contribution paid to the insurance company that

manages the plan. For fiscal year 2016, this pension plan

represented a booked expense to TOTAL S.A. in favor of the

Chairman and Chief Executive Officer of €2,317.

(1) In the form of shares or units of mutual funds invested in shares of the Company.

120

TOTAL. Registration Document 2016

Compensation of the administration and management bodies

Chairman and Chief Executive Officer’s compensation

6

The sum of the annual supplementary pension plan benefits and

other pension plan benefits (other than those set up individually and

on a voluntary basis) may not exceed 45% of the average gross

compensation (fixed and variable portion) over the last three years.

In the event that this percentage is exceeded, the supplementary

pension is reduced accordingly. The amount of the supplementary

pension determined in this way is indexed to the ARRCO pension

point.

gross annual pension estimated at €599,320 based on the length

of service acquired as of December 31, 2016 (i.e., 20 years of

service), corresponding to 16.03% of Mr. Pouyanné’s gross annual

compensation consisting of the annual fixed portion for 2016

(i.e., €1,400,000) and the variable portion paid in 2017 for fiscal

year 2016 (i.e., €2,339,400).

Nearly the full amount of TOTAL S.A.’s commitments under these

supplementary and similar retirement plans (including the retirement

benefit) is outsourced to insurance companies and the non-

outsourced balance is evaluated annually and adjusted through a

provision in the accounts. The amount of these commitments as of

December 31, 2016 is €16.1 million for the Chairman and Chief

Executive Officer (€16.4 million for the Chairman and Chief

Executive Officer and the executive and non-executive directors

covered by these plans). These amounts represent the gross value

of TOTAL S.A.’s commitments to these beneficiaries based on the

estimated gross annual pensions as of December 31, 2016 and the

statistical life expectancy of the beneficiaries.

The supplementary pension includes a clause whereby 60% of the

amount will be paid to beneficiaries in the event of death after

retirement.

To ensure that the acquisition of additional pension rights under this

defined-benefit pension plan is subject to performance conditions

to be defined pursuant to the provisions of Article L. 225-42-1 of

the French Commercial Code amended by law No. 2015-990 of

August 6, 2015, on December 15, 2016, the Board of Directors

noted the existence of the Chief Executive Officer’s pension rights

under the above-mentioned pension plan, immediately before his

appointment as Chairman, for the period from January 1, 1997 to

December 18, 2015.

The total amount of all the pension plans in which Mr. Pouyanné

participates represents, at December 31, 2016, a gross annual

pension estimated at €690,600 based on the length of service

acquired as of December 31, 2016 (i.e., 20 years of service),

corresponding to 18.47% of Mr. Pouyanné’s gross annual

compensation defined above (annual fixed portion for 2016 and

variable portion paid in 2017 for fiscal year 2016).

The conditional rights granted for the period from January 1, 1997

to December 18, 2015 (inclusive), acquired without performance

conditions, correspond to a replacement rate equal to 34.14% for

the portion of the base compensation falling between 8 and 40

times the PASS and a replacement rate of 18.96% for the portion of

the base compensation falling between 40 and 60 times the PASS.

Retirement benefit

The conditional rights granted for the period from December 19,

The Chairman and Chief Executive Officer is entitled to a retirement

benefit equal to those available to eligible members of the Group

under the French National Collective Bargaining Agreement for the

Petroleum Industry. This benefit is equal to 25% of the fixed and

variable annual compensation received during the 12 months

preceding retirement.

2015 to December 31, 2016 are subject to the performance

condition described below and correspond to a maximum

replacement rate equal to 1.86% for the portion of the base

compensation falling between 8 and 40 times the PASS and a

replacement rate equal to 1.04% for the portion of the base

compensation falling between 40 and 60 times the PASS.

Pursuant to the provisions of Article L. 225-42-1 of the French

Commercial Code, receipt of this retirement benefit is contingent

upon a performance-related condition applicable to the beneficiary,

which is deemed to be fulfilled if at least two of the following criteria

are met:

Pursuant to the provisions of Article L. 225-42-1 of the French

Commercial Code, the Board of Directors decided to make the

acquisition of these conditional rights for the period from

December 19, 2015 to December 31, 2016, subject to a condition

related to the beneficiary’s performance, which is considered

fulfilled if the variable portion of the Chairman and Chief Executive

Officer’s compensation paid in 2017 for fiscal year 2016 reaches

– the average ROE (return on equity) for the three years preceding

the year in which the Chairman and Chief Executive Officer retires

is at least 10%;

100% of the base salary due for fiscal year 2016. In the event that

the variable portion does not reach 100% of the base salary, the

rights granted will be calculated on a prorata basis.

– the average net debt-to-equity ratio for the three years preceding

the year in which the Chairman and Chief Executive Officer retires

is less than or equal to 30%; and

On February 8, 2017, the Board of Directors noted that the

specified performance condition was fully met and therefore

confirmed the acquisition by Mr. Pouyanné of additional pension

rights mentioned above for the period from December 19, 2015 to

December 31, 2016.

–

growth in TOTAL’s oil and gas production is greater than or equal

to the average growth rate of four oil companies (ExxonMobil,

Royal Dutch Shell, BP and Chevron) during the three years

preceding the year in which the Chairman and Chief Executive

Officer retires.

The Board also noted that Mr. Pouyanné would no longer be able

to acquire additional pension rights under this plan given the rules

for determining pension rights set out in the plan and the 20 years

of service of Mr. Pouyanné as of December 31, 2016.

The retirement benefit cannot be combined with the severance

benefit described below.

Severance benefit

The commitments made by TOTAL S.A. to its Chairman and Chief

Executive Officer regarding the supplementary defined benefit and

similar pension plans therefore represent, at December 31, 2016, a

The Chairman and Chief Executive Officer is entitled to a benefit

equal to two years of his gross compensation in the event of a

forced departure related to a change of control or strategy. The

Registration Document 2016. TOTAL

121

Compensation of the administration and management bodies

6

Chairman and Chief Executive Officer’s compensation

calculation is based on the gross compensation (fixed and variable)

of the 12 months preceding the date of termination or non-renewal

of his term of office.

– an “incapacity, disability, life insurance” plan applicable to all

employees, partly paid for by the Company, that provides for two

options in case of death of a married employee: either the

payment of a lump sum equal to five times the annual

compensation up to 16 times the PASS, corresponding to a

maximum of €3,138,240 in 2017, plus an additional amount if

there is a dependent child or children, or the payment of a lump

sum equal to three times the annual compensation up to 16

times the PASS, plus a survivor’s pension and education

allowance;

The severance benefit will only be paid in the event of a forced

departure related to a change of control or strategy. It will not be

due in case of gross negligence or willful misconduct or if the

Chairman and Chief Executive Officer leaves the Company of his

own volition, accepts new responsibilities within the Group or may

claim full retirement benefits within a short time period.

Pursuant to the provisions of Article L. 225-42-1 of the French

Commercial Code, receipt of this severance benefit is contingent

upon a performance-related condition applicable to the beneficiary,

which is deemed to be fulfilled if at least two of the following criteria

are met:

– a second “disability and life insurance” plan, fully paid by the

Company, applicable to executive directors and senior executives

whose annual gross compensation is more than 16 times the

PASS. This contract, signed on October 17, 2002, amended on

January 28 and December 16, 2015, guarantees the beneficiary

the payment of a lump sum, in case of death, equal to two years

of compensation (defined as the gross annual fixed reference

compensation (base France), which corresponds to 12 times

the monthly gross fixed compensation paid during the month

prior to death or sick leave, to which is added the highest amount

in absolute value of the variable portion received during one of

the five previous years of activity), which is increased to three years

in case of accidental death and, in case of accidental permanent

disability, a lump sum proportional to the degree of disability.

The death benefit is increased by 15% for each dependent child.

–

the average ROE (return on equity) for the three years preceding

the year in which the Chairman and Chief Executive Officer retires

is at least 10%;

the average net debt-to-equity ratio for the three years preceding

the year in which the Chairman and Chief Executive Officer retires

is less than or equal to 30%; and

growth in TOTAL’s oil and gas production is greater than or equal

to the average growth rate of four oil companies (ExxonMobil,

Royal Dutch Shell, BP and Chevron) during the three years

preceding the year in which the Chairman and Chief Executive

Officer retires.

Payments due under this contract are made after the deduction of

any amount paid under the above-mentioned plan applicable to all

employees.

Life insurance and health care plans

The Chairman and Chief Executive Officer is covered by the

following life insurance plans provided by various life insurance

companies:

The Chairman and Chief Executive Officer also benefits from the

health care plan applicable to all employees.

122

TOTAL. Registration Document 2016

Compensation of the administration and management bodies

Chairman and Chief Executive Officer’s compensation

6

2.3. Summary tables

(AFEP-MEDEF Code/AMF position-recommendation No. 2009-16)

Summary of the compensation of each executive director (AMF Table No. 2)

For fiscal

year 2015

For fiscal

year 2016

Amount due

for the

fiscal year

Amount paid

during the

Amount due

for the

fiscal year

Amount paid

during the

fiscal year⁽

a)

fiscal year

(a)

(ꢁ)

Patrick Pouyanné,

Chairman and Chief Executive Officer

Fixed compensation

1,200,000

1,400,000

Annual variable compensation⁽^b⁾

Multi-year variable compensation

Extraordinary compensation

Directors’ fees

1,814,400

295,469

2,339,400

1,814,400

-

In-kind benefits⁽^c⁾

36,390

58,945

Total

3,050,790

1,531,859

3,798,345

3,273,345

(a) Variable portion paid for the prior fiscal year.

(b) For details regarding the parameters used to calculate the variable portion due for fiscal year 2016, refer to point 2.1 of this chapter.

(c) Mr. Pouyanné has the use of a company car and is covered by life insurance and health care plans paid by the Company (refer to point 2.2 of this chapter).

Summary of the compensation, options and shares granted to each executive director

AMF Table No. 1)

(

For fiscal

2015

For fiscal

2016

(in €, except the number of shares)

Patrick Pouyanné,

Chairman and Chief Executive Officer

Compensation due in respect of the fiscal year (detailed in AMF Table No. 2 above)

Valuation of multi-year variable compensation paid during the fiscal year

Accounting valuation of the options granted during the fiscal year

Accounting valuation of the performance shares granted during the fiscal year⁽^a⁾

Number of performance shares granted during the fiscal year

3,050,790 3,798,345

-

1,722,960 2,561,100

48,000

60,000

Total

4,773,750

6,359,445

Note: The valuations of the options and performance shares correspond to a valuation performed in accordance with IFRS 2 (see Note 9 to the Consolidated Financial Statements) and not

to any compensation actually received during the fiscal year. Entitlement to performance shares is subject to the fulfillment of performance conditions assessed over a three-year period.

(a) For detailed information, refer to AMF Table No. 6 below. The valuation of the shares was calculated on the grant date (see Note 9 to the Consolidated Financial Statements).

Stock options granted in 2016 to each executive director by the issuer and by any Group company

AMF Table No. 4)

(

Executive directors

Plan No.

and date

Type

of options

Valuation

Number

Strike

price

Exercise

period

of options

a)

(

purchase or

(€)⁽granted during

subscription)

the fiscal year

Patrick Pouyanné

Chairman and Chief Executive Officer

-

(a) According to the method used for the Consolidated Financial Statements.

Registration Document 2016. TOTAL

123

Compensation of the administration and management bodies

6

Chairman and Chief Executive Officer’s compensation

Free performance shares granted in 2016 to each executive director by the issuer or by any Group company

(Extract from AMF Table No. 6)

Plan No.

and date

Number

of shares

granted

Valuation

of the

Acquisition

Date of

Performance

conditions

date transferability

shares (€)⁽

a)

during the

fiscal year

Patrick Pouyanné

Chairman and Chief

Executive Officer

2016 Plan

07/27/2016

60,000

2,561,100 07/28/2019 07/29/2021 The performance conditions

are based:

– for 50% of the performance shares

granted, the Company will be ranked

each year against its peers⁽^b⁾during

the three vesting years (2016, 2017

and 2018) based on the TSR criterion

using the average closing market price

expressed in dollars over one quarter

at the beginning and end of each

three-year period (Q4 year N vs./Q4

year N-3);

–

for 50% of the performance shares

granted, the Company will be ranked

each year against its peers⁽^b⁾using the

annual variation in net cash flow per

share expressed in dollars criterion.

For further details, refer to point 2.1.2

of this chapter.

(

a) The valuation of the shares was calculated on the grant date according to the method used for the Consolidated Financial Statements.

b) ExxonMobil, Royal Dutch Shell, BP and Chevron.

AMF Table No. 11

Executive directors

Employment

contract

Supplementary

pension plan

Payments or benefits

Benefits

due or likely to be due

upon termination

related to a

non-compete

agreement

or change in duties

Patrick Pouyanné

NO

YES

YES⁽^a⁾

NO

Chairman and Chief Executive Officer

Start of term of office: December 19, 2015

End of current term of office: Shareholders’ Meeting

held in 2018 to approve the financial statements

for fiscal year 2017

Internal supplementary

defined benefit pension

plan⁽^a⁾and defined

contribution pension plan

known as RECOSUP

Severance benefit

and retirement benefit

(

a) Payment subject to a performance condition under the terms approved by the Board of Directors on December 16, 2015. Details of these commitments are provided in point 2.2 above.

The retirement benefit cannot be combined with the severance benefit.

124

TOTAL. Registration Document 2016

Compensation of the administration and management bodies

Executive officers’ compensation. Stock option and free share grants

6

3. Executive officers’ compensation

In 2016, the aggregate amount paid directly or indirectly by the Group’s companies as compensation to the Group’s executive officers⁽¹⁾in

office as of December 31, 2016 (12 people) was €11.98 million (compared to €11.34 million in 2015), including €8.56 million paid to the

members of the Executive Committee (seven people). The variable portion accounted for 44.78% of this aggregate amount of €11.98 million.

The following individuals were executive officers of the Group as of December 31, 2016 (12 people, number unchanged from December 31, 2015):

Patrick Pouyanné⁽²⁾

Arnaud Breuillac⁽³⁾

Patrick de La Chevardière⁽³⁾

Momar Nguer⁽³⁾

Namita Shah⁽³⁾

Bernadette Spinoy

Ladislas Paszkiewicz

Jacques-Emmanuel Saulnier

Maarten Scholten

Bernard Pinatel⁽³⁾

Philippe Sauquet⁽³⁾

Jean-Pierre Sbraire

4. Stock option and free share grants

4.1. General policy

In addition to its employee shareholding development policy, TOTAL

S.A. has implemented a policy to involve employees and senior

executives in the Group’s future performance which entails granting

free performance shares each year. TOTAL S.A. may also grant

stock options, although no plan has been put in place since

September 14, 2011. These shares are granted under selective

plans based on a review of individual performance at the time of

each grant.

For beneficiaries employed by a non-French company on the grant

date, the vesting period for free shares may be increased to four

years, in which case there is no mandatory holding period. Since

2011, all shares granted to senior executives have been subject to

performance conditions.

•

Stock options

Stock options have a term of eight years, with a strike price set at

the average of the closing TOTAL share prices on Euronext Paris

during the 20 trading days preceding the grant date, without any

discount. Exercise of the options is subject to a presence condition

and performance conditions, related to the Group’s return on equity

The stock option and free share plans offered by TOTAL S.A.

concern only TOTAL shares and no free shares of the Group’s listed

subsidiaries or options on them are granted by TOTAL S.A.

(

ROE), which vary depending on the plan and category of beneficiary.

All grants are approved by the Board of Directors, on the proposal

of the Compensation Committee. For each plan, the Compensation

Committee recommends a list of beneficiaries, the conditions and

the number of options or shares granted to each beneficiary. The

Board of Directors then gives final approval for this list and the grant

conditions.

All options granted in 2011 have been subject to performance

conditions. For options granted pursuant to the authorization given

by the Extraordinary Shareholders’ Meeting of May 24, 2016

(twenty-fifth resolution), the performance conditions will be

assessed over a minimum period of three consecutive fiscal years.

For earlier option plans, and subject to the applicable presence and

performance conditions being met, options may be exercised only

at the end of an initial two-year period and the shares resulting from

the exercise may only be disposed of at the end of a second two-

year period.

•

Grant of performance shares

Grants of free performance shares under selective plans become

definitive only at the end of a three-year vesting period, subject to

fulfillment of the applicable presence and performance conditions.

At the end of the vesting period, and provided that the conditions

are met, the TOTAL shares are definitively granted to the beneficiaries,

who must then hold them for at least two years (holding period).

All shares granted are subject to the presence condition.

Moreover, for the 2007 to 2011 option plans, the shares resulting

from the exercise of options by beneficiaries employed by a non-

French company on the grant date may be disposed of or converted

to bearer form at the end of the first two-year vesting period.

(

1) The Group’s executive officers (non-executive directors with the exception of the Chairman and Chief Executive Officer) include the members of the Executive Committee, the four Senior Vice

Presidents of the Group central functions who are members of the Group Performance Management Committee (HSE, Strategy & Climate, Communications, Legal) and the Treasurer.

2) Chairman and Chief Executive Officer and Chairman of the Executive Committee.

3) Member of the Executive Committee.

(

Registration Document 2016. TOTAL

125

Compensation of the administration and management bodies

6

Stock option and free share grants

4.2. Follow-up of grants to the executive directors

4

.2.1. Stock options

For the options granted between 2007 and 2011, the Board of

Directors made the exercise of the options granted to the executive

directors in office contingent upon a presence condition and

performance conditions based on the Group’s ROE and ROACE.

The grant rate of the performance-related options under the 2009,

No stock options have been granted since September 14, 2011.

Until that date, the Company’s executive directors in office at the

time of the decision were granted stock options as part of broader

grant plans approved by the Board of Directors for certain Group

employees and senior executives. The options granted to the

executive directors were subject to the same requirements

applicable to the other beneficiaries of the grant plans.

2010 and 2011 plans was 100%. It had been 60% for the 2008 plan.

All the options granted to Mr. Pouyanné outstanding at

December 31, 2016 represented 0.0019% of the Company’s share

capital⁽¹⁾on that date.

Stock options exercised in fiscal year 2016 by each executive director (AMF Table No. 5)

Plan No.

and date

Number of

Strike

price

options exercised

during the fiscal year

Patrick Pouyanné

2010 Plan

16,000

38.20

Chairman and Chief Executive Officer since December 19, 2015

09/14/2010

4

.2.2. Grant of performance shares

employees. The performance shares granted to him are subject to

the same requirements applicable to the other beneficiaries of the

grant plans.

Mr. Pouyanné is granted performance shares as part of the broader

grant plans approved by the Board of Directors for certain Group

(1) Based on a capital of 2,430,365,862 shares.

126

TOTAL. Registration Document 2016

Compensation of the administration and management bodies

Stock option and free share grants

6

Summary tables

Free shares granted to each director⁽^b⁾in fiscal year 2016 by the issuer and by any Group company

AMF Table No. 6)

(

Plan No.

and date

Number

of shares

granted

Valuation

of the

Acquisition

Date of

Performance

conditions

date transferability

shares (€)⁽

a)

during the

fiscal year

Patrick Pouyanné

Chairman and Chief

Executive Officer

2016 Plan

07/27/2016

60,000

-

2,561,100 07/28/2019 07/29/2021 The performance conditions are the

following:

– for 50% of the performance shares

granted, the Company will be ranked

Marc Blanc

2016 Plan

07/27/2016

-

each year against its peers⁽^c⁾during

the three vesting years (2016, 2017

and 2018) based on the TSR criterion

using the average closing market

price expressed in dollars over one

quarter at the beginning and end of

each three-year period (Q4 year N

vs./Q4 year N-3);

Director representing

employees since

November 4, 2014

Charles Keller

2016 Plan

07/27/2016

n/a

-

Director representing

employee shareholders

until May 24, 2016

–

for 50% of the performance shares

granted, the Company will be ranked

each year against its peers⁽^c⁾using the

annual variation in net cash flow per

share expressed in dollars criterion.

For further details, refer to point 2.1.2

of this chapter.

Renata Perycz

2016 Plan

07/27/2016

160

6,829.6 07/28/2019 07/29/2021

Director representing

employee shareholders

since May 24, 2016

Total

60,160 2,567,929.6

(a) The valuation of the shares was calculated on the grant date according to the method used for the Consolidated Financial Statements.

(b) List of executive and non-executive directors who had this status during fiscal year 2016.

(c) ExxonMobil, Royal Dutch Shell, BP and Chevron.

(a)

Free shares that have become transferable for each director (AMF Table No. 7)

Plan No.

and date

Number of shares that

become transferable

during the fiscal year

Vesting

conditions

Patrick Pouyanné

Chairman and Chief Executive Officer

2013 Plan

07/25/2013

14,175 Shares are subject to a performance

condition based on the Group’s average

ROE in fiscal years 2013, 2014 and

Marc Blanc

Director representing employees

since November 4, 2014

2013 Plan

07/25/2013

-

2015. For beneficiaries other than senior

executives, the performance condition

applies to shares in excess of the first

n/a 100. For the 2013 plan, pursuant to

performance condition, the acquisition

rate was 63%.

Charles Keller

Director representing employee shareholders

until May 24, 2016

2013 Plan

07/25/2013

Renata Perycz

2013 Plan

119

Director representing employee shareholders

since May 24, 2016

07/25/2013

(a) List of executive and non-executive directors who had this status during fiscal year 2016.

Registration Document 2016. TOTAL

127

Compensation of the administration and management bodies

6

Stock option and free share grants

4.3. Follow-up of TOTAL stock option plans as of December 31, 2016

4.3.1. Breakdown of TOTAL stock option grants by category of beneficiary

The breakdown of TOTAL stock options granted by category of beneficiary (executive officers, other senior executives and other employees)

for each of the plans in effect during fiscal year 2016 is as follows:

Number of

beneficiaries

Number of

notified

options

Percentage

Average

number of

options per

beneficiary

2

008 Plan⁽^b⁾: Subscription options

Granted on October 9, 2008, pursuant to the decision

of the Board of Directors of September 9, 2008

Strike price: €42.90; discount: 0.0%

Executive officers⁽^a⁾

Other senior executives

Other employees

26

298

1,227,500

1,988,420

1,233,890

27.6%

44.7%

27.7%

47,212

6,673

730

1,690

Total

2,014

4,449,810

100%

2,209

2

009 Plan⁽^b⁾: Subscription options

Decision of the Board of Directors

of September 15, 2009

Executive officers⁽^a⁾

Other senior executives

Other employees

26

284

1,201,500

1,825,540

1,360,460

27.4%

41.6%

31.0%

46,212

6,428

781

Strike price: €39.90; discount: 0.0%

1,742

Total

2,052

4,387,500

100%

2,138

2

010 Plan⁽^b⁾: Subscription options

Decision of the Board of Directors

of September 14, 2010

Executive officers⁽^a⁾

Other senior executives

Other employees

25

282

1,348,100

2,047,600

1,392,720

28.2%

42.8%

29.0%

53,924

7,261

778

Strike price: €38.20; discount: 0.0%

1,790

Total

2,097

4,788,420

100%

2,283

2

011 Plan⁽^b⁾: Subscription options

Decision of the Board of Directors

of September 14, 2011

Executive officers⁽^a⁾

Other senior executives

Other employees

29

177

-

846,600

672,240

-

55.7%

44.3%

-

29,193

3,798

-

Strike price: €33.00; discount: 0.0%

Total

206

1,518,840

100%

7,373

(

a) Members of the Management Committee and the Treasurer, as defined on the date of the Board meeting granting the performance shares.

b) The grant rate of performance-related options was 60% for the 2008 plan and 100% for the 2009, 2010 and 2011 plans.

For the 2008 and 2009 stock option plans, the Board of Directors decided that for each beneficiary of more than 25,000 options, one third

of the options granted in excess of that number would be subject to a performance condition.

For the 2010 stock option plan, a portion of the options granted to beneficiaries of more than 3,000 options are subject to a performance

condition. For the 2011 stock option plan, all the options are subject to a performance condition.

Since September 14, 2011, the Board of Directors has not granted any stock options.

128

TOTAL. Registration Document 2016

Compensation of the administration and management bodies

Stock option and free share grants

6

4.3.2. Breakdown of TOTAL stock option plans

History of stock option grants – Information on stock options (AMF Table No. 8)

2008 Plan

2009 Plan

2010 Plan

2011 Plan

Total

Type of options

Subscription Subscription Subscription Subscription

options options options options

Date of the Shareholders’ Meeting

05/11/2007 05/11/2007 05/21/2010 05/21/2010

10/09/2008 09/15/2009 09/14/2010 09/14/2011

Date of the Board meeting/grant date⁽^a⁾

Total number of options granted

by the Board of Directors, including to:

4,449,810

4,387,620

4,788,420

1,518,840 15,144,690

Executive and non-executive directors⁽^b⁾

30,000

40,000

30,400

130,400

–

P. Pouyanné

M. Blanc

C. Keller

30,000

n/a

30,000

n/a

40,000

n/a

30,400

n/a

130,400

n/a

R. Perycz

Date as of which the options may be exercised:

Expiration date

10/10/2010 09/16/2011 09/15/2012 09/15/2013

10/09/2016 09/15/2017 09/14/2018 09/14/2019

Strike price (€)⁽^c⁾

42.90

39.90

38.20

33.00

Cumulative number of options exercised as of December 31, 2016

Cumulative number of options canceled as of December 31, 2016

Number of options:

2,537,634

1,912,176

2,576,047

32,520

1,816,986

91,197

888,112

4,400

7,818,779

2,040,293

–

Outstanding as of January 1, 2016

Granted in 2016

2,561,502

-

1,794,304

767,198

2,710,783

3,323,246

722,309 9,317,840

-

Canceled in 2016⁽

d)

1,794,304

Exercised in 2016

931,730

443,009

95,981 2,237,918

Outstanding as of December 31, 2016

-

1,779,053

2,880,237

626,328 5,285,618

(a) The grant date is the date of the Board meeting granting the options, except for the grant of stock options on October 9, 2008 approved by the Board on September 9, 2008.

(b) List of executive and non-executive directors who had this status during fiscal year 2016. The directorships of Messrs. Keller and Desmarest ended on May 24, 2016.

(c) The strike price is the average closing price of TOTAL’s share on Euronext Paris during the 20 trading days preceding the option grant date, without any discount.

(d) The 1,794,304 options canceled in 2016 were unexercised options that expired on October 9, 2016 due to the expiration of the 2008 stock option plan.

If all the stock options outstanding at December 31, 2016 were exercised, the corresponding shares would represent 0.22%⁽¹⁾of the

Company’s share capital on that date.

4.3.3. Stock options granted to the 10 employees (other than executive or non-executive directors)

receiving the largest number of options/Stock options exercised by the 10 employees (other than

executive or non-executive directors) exercising the largest number of options (AMF Table No. 9)

Total number

of options

granted/

Average

weighted

strike price

(€)

2008 Plan

2009 Plan

09/15/2009

2010 Plan

09/14/2010

2011 Plan

09/14/2011

10/09/2008⁽

a)

exercised

Options granted in fiscal year 2016

by TOTAL S.A. and its affiliates⁽^b⁾to each of the

10 TOTAL S.A. employees (other than

executive or non-executive directors)

receiving the largest number of options

(aggregate – not individual information)

-

Options held on TOTAL S.A. and its

affiliates⁽^b⁾and exercised in fiscal year

2016 by the 10 TOTAL S.A. employees

(other than executive or non-executive

directors at the date of the exercises)

who purchased or subscribed for

the largest number of shares

(aggregate – not individual information)

315,183

39.67

38,700

207,900

54,900

13,683

(

a) The grant date is the date of the Board meeting granting the options, except for the grant of stock options on October 9, 2008 approved by the Board on September 9, 2008.

b) Pursuant to the conditions of Article L. 225-180 of the French Commercial Code.

(1) Based on a capital of 2,430,365,862 shares.

Registration Document 2016. TOTAL

129

Compensation of the administration and management bodies

6

Stock option and free share grants

4.4. Follow-up of TOTAL free share grants as of December 31, 2016

4.4.1. Breakdown of TOTAL performance share grants by category of beneficiary

The following table gives a breakdown of TOTAL performance share grants by category of beneficiary (executive officers, other senior

executives and other employees):

Number of

beneficiaries

Number of

notified

shares

Percentage

Average

number of

shares per

beneficiary

2

012 Plan⁽^a⁾

Decision of the Board of Directors

of July 26, 2012

Executive officers⁽^b⁾

Other senior executives

Other employees

33

274

416,100

873,000

9.7%

20.3%

70.0%

12,609

3,186

310

9,698

3,006,830

Total

10,005

4,295,930

100%

429

2

013 Plan

Decision of the Board of Directors

of July 25, 2013

Executive officers⁽^b⁾

Other senior executives

Other employees⁽^c⁾

32

277

422,600

934,500

9.5%

20.9%

69.6%

13,206

3,374

323

9,625

3,107,100

Total

9,934

4,464,200

100%

449

2

014 Plan

Decision of the Board of Directors

of July 29, 2014

Executive officers⁽^b⁾

Other senior executives

Other employees⁽^c⁾

32

281

421,200

975,300

9.4%

21.7%

68.9%

13,163

3,471

321

9,624

3,089,800

Total

9,937

4,486,300

100%

451

2

015 Plan

Decision of the Board of Directors

of July 28, 2015

Executive officers⁽^d⁾

Other senior executives

Other employees⁽^c⁾

13

290

264,600

1,132,750

3,364,585

5.6%

23.8%

70.6%

20,354

3,906

336

10,012

Total

10,315

4,761,935

100%

462

2

016 Plan

Decision of the Board of Directors

of July 27, 2016

Executive officers⁽^d⁾

12

269,900

4.8%

22,492

4,739

Other senior executives

279

1,322,300

23.4%

Other employees⁽^c⁾

10,028

4,047,200

71.8%

404

Total

10,319

5,639,400

100%

547

(

a) For the 2012 and 2013 plans, the share acquisition rate related to the ROE performance condition was 100% and 63%, respectively.

b) Members of the Management Committee and the Treasurer, as defined on the date of the Board meeting granting the performance shares.

c) Mr. Keller, a TOTAL S.A. employee and a TOTAL S.A. director representing employee shareholders from May 17, 2013 to May 24, 2016, was granted 400 performance shares under

the 2013 plan and 400 performance shares under the 2014 plan. He was not granted any shares under the 2015 or 2016 plans. Mr. Blanc, a TOTAL S.A. employee and a TOTAL S.A.

director representing employees since November 4, 2014, was not granted any shares under the 2014, 2015 and 2016 plans. Ms. Perycz, an employee of the Group and a TOTAL S.A.

director representing employees shareholders since May 24, 2016, was granted 160 shares under the 2016 plan.

(

d) Group’s executive officers as defined on the date of the Board meeting granting the performance shares. On that date, the Group’s executive officers included the members of the

Executive Committee, the five Senior Vice Presidents of the Group central functions who are members of the Group Performance Management Committee (Corporate Communications,

Human Resources, Legal, Industrial Safety, Strategy and Business Intelligence) and the Treasurer.

The performance shares, which were previously bought back by

the Company on the market, are definitively granted to their

beneficiaries at the end of a three-year vesting period from the

grant date. For the shares granted under the 2012 plan, the vesting

period was two years.

years (2016, 2017 and 2018) based on the TSR criterion using

the average closing market price expressed in dollars over one

quarter at the beginning and end of each three-year period

(Q4 year N vs./Q4 year N-3). The dividend will be considered

reinvested based on the last market price on the ex-dividend

date; and

for 50% of the performance shares granted, the Company will be

ranked each year against its peers⁽¹⁾using the annual variation in

net cash flow per share expressed in dollars criterion.

The definitive grant of performance shares is subject to a presence

condition and performance conditions.

–

For the 2016 plan, the applicable performance conditions are the

following:

In addition, shares that have been definitively granted cannot be

disposed of before the end of a mandatory two-year holding period.

–

for 50% of the performance shares granted, the Company will be

ranked each year against its peers⁽¹⁾during the three vesting

(1) ExxonMobil, Royal Dutch Shell, BP and Chevron.

130

TOTAL. Registration Document 2016

Compensation of the administration and management bodies

Stock option and free share grants

6

4.4.2. Breakdown of TOTAL performance share plans

History of TOTAL performance share grants –

Information on performance shares granted (AMF Table No. 10)

2012 Plan

2013 Plan

2014 Plan

2015 Plan

2016 Plan

Date of the Shareholders’ Meeting

05/13/2011 05/13/2011

07/26/2012 07/25/2013

05/16/2014 05/16/2014 05/24/2016

07/29/2014 07/28/2015 07/27/2016

Date of Board meeting/grant date

Closing price on grant date

€36.120

€38.810

4,295,930

22,500

€40.005

€40.560

4,464,200

22,900

€52.220

€48.320

4,486,300

25,400

€43.215

€45.150

4,761,935

48,000

€42.685

€42.22

Average purchase price per share paid by the Company

Total number of performance shares granted, including to:

Executive and non-executive directors⁽^a⁾

5,639,400

60,160

–

P. Pouyanné

M. Blanc

C. Keller

22,500⁽^b⁾

n/a

22,500⁽^b⁾

n/a

25,000⁽^b⁾

48,000

60,000

-

n/a

160

-

400

n/a

-

n/a

400

n/a

R. Perycz

Start of the vesting period

07/26/2012 07/25/2013

07/29/2014 07/28/2015 07/27/2016

Definitive grant date, subject to the conditions set

(

end of the vesting period)

07/27/2014 07/26/2016

07/27/2016 07/26/2018

07/30/2017 07/29/2018 07/28/2019

07/30/2019 07/29/2020 07/29/2021

Disposal possible from (end of the mandatory holding period)

Number of free shares:

–

Outstanding as of January 1, 2016

Notified in 2016

-

4,350,830

-

(1,303,732)

(3,047,098)

4,402,460

-

(37,100)

(860)

4,760,505

-

5,639,400

(1,730)

Canceled in 2016

(29,170)

(600)

(c)

Definitively granted in 2016

(110)

Outstanding as of December 31, 2016

-

4,364,500

4,730,735

5,637,560

(

a) List of executive and non-executive directors who had this status during fiscal year 2016.

b) Shares granted in respect of his previous salaried duties.

c) Definitive grants completed early following the death of the beneficiaries of shares for the respective plan.

If all the performance shares outstanding at December 31, 2016 were definitively granted, they would represent 0.61%⁽¹⁾of the Company’s

share capital on that date.

4

.4.3. Performance shares granted to the 10 employees (other than executive and non-executive directors)

receiving the largest number of performance shares

Number of

performance

shares notified/

definitively

Grant

date

Definitive

Date of

grant date transferability

(end of the

vesting

(end of the

holding

granted

period)

Performance share grants approved by the Board of Directors

at its meeting on July 27, 2016 to the 10 TOTAL S.A. employees

(

other than executive and non-executive directors on the date of the decision)

receiving the largest number of performance shares⁽^a⁾

Performance shares definitively granted in fiscal year 2016

to the 10 TOTAL S.A. employees (other than executive

and non-executive directors on the date of the decision)

receiving the largest number of performance shares

221,000 07/27/2016 07/28/2019 07/29/2021

85,932 07/25/2013 07/26/2016 07/26/2018

(

a) These shares will be definitively granted to their beneficiaries at the end of a three-year vesting period, i.e., on July 28, 2019, subject to two performance conditions being met (refer to

point 4.4.1 of this chapter). The free shares that have been definitively granted cannot be disposed of before the end of a two-year holding period, i.e., from July 29, 2021.

(1) Based on a capital of 2,430,365,862 shares.

Registration Document 2016. TOTAL

131

Compensation of the administration and management bodies

6

Summary table of compensation components due or granted to the Chairman and Chief Executive Officer for fiscal year 2016,

as submitted to the Ordinary Shareholders’ Meeting for vote (AFEP-MEDEF Code, point 26)

5

. Summary table of compensation components due or

granted to the Chairman and Chief Executive Officer

for fiscal year 2016, as submitted to the Ordinary

Shareholders’ Meeting for vote

(AFEP-MEDEF Code, point 26)

The table below summarizes the components of compensation due or granted to the Chairman and Chief Executive Officer for fiscal year

016 by the Board of Directors, on the proposal of the Compensation Committee, and submitted to the Annual Shareholders’ Meeting of

2

May 26, 2017 for vote, in compliance with the recommendation of the AFEP-MEDEF Code (point 26).

Summary table of the components of compensation for Mr. Patrick Pouyanné,

Chairman and Chief Executive Officer

Components of

compensation

Amount or accounting

valuation submitted

for vote

Presentation

Components of compensation due or granted for fiscal year 2016

€1,400,000 The compensation due to Mr. Pouyanné for his duties as Chairman and Chief

amount paid in 2016)

Fixed compensation

(

Executive Officer for fiscal year 2016 is €1,400,000 (higher than in fiscal year 2015

following the Board of Directors’ decision to appoint Patrick Pouyanné as Chairman

and Chief Executive Officer of TOTAL S.A.).

Annual variable

compensation

€2,339,400

(amount paid in 2017)

The variable portion of Mr. Pouyanné’s compensation for his duties as Chairman and

Chief Executive Officer for fiscal year 2016 has been set at €2,339,400,

corresponding to 167.10% (of a maximum of 180%) of his fixed annual

compensation based on his performance.

At its meeting on February 8, 2017, the Board of Directors reviewed the level of

achievement of the economic parameters based on the targets set by the Board of

Directors at its meeting on December 16, 2015. The Board of Directors also

assessed the Chairman and Chief Executive Officer’s personal contribution on the

basis of the four objective and operational target criteria set during its meeting on

December 16, 2015.

The Board of Directors assessed achievement of the targets set for the economic

parameters as follows:

–

the safety criterion was assessed based on the achievement of an annual TRIR

Total Recordable Injury Rate) target and the number of accidental deaths

(

per million hours worked, FIR (Fatality Incident Rate), compared with those of four

large oil companies⁽¹⁾. The Board of Directors noted that the target of a TRIR lower

than 1.15 was fully achieved in 2016. It also noted that the number of accidental

deaths per million hours worked, FIR (Fatality Incident Rate), the best among the

panel of majors. It therefore set the portion for this criterion at 20% of the fixed

compensation (of a maximum of 20%);

–

for the return on equity (ROE) criterion⁽²⁾, the Board of Directors noted that, in

2016, the ROE was 8.7%, which led the portion for this criterion to be set at

7.10% of the fixed compensation for fiscal year 2016 (of a maximum of 30%);

1

for the net debt-to-equity ratio criterion⁽³⁾, the Board of Directors noted that, in

2

016, the Group’s net debt-to-equity ratio is less than 30%, which led the portion

for this criterion to be set at 40% of the fixed compensation for fiscal year 2016

of a maximum of 40%);

(

1) ExxonMobil, Royal Dutch Shell, BP and Chevron.

(2) The Group measures the return on equity as the ratio of adjusted consolidated net income to average adjusted shareholders’ equity between the beginning and the end of the period.

Adjusted shareholders’ equity for fiscal year 2016 is calculated after payment of a dividend of €2.45 per share, subject to approval by the Annual Shareholders’ Meeting on May 26, 2017.

In 2015, the ROE was 11.5%.

(

3) For its internal management and external communication purposes, the Group calculates a net debt-to-equity ratio by dividing its net financial debt by its adjusted shareholders’ equity.

The 2016 adjusted shareholders’ equity is calculated after payment of a dividend of €2.45 per share, subject to approval by the Annual Shareholders’ Meeting on May 26, 2017.

In 2016, the net debt-to-equity ratio was 27.1%. In 2015, it was 28.3%.

132

TOTAL. Registration Document 2016

Compensation of the administration and management bodies

Summary table of compensation components due or granted to the Chairman and Chief Executive Officer for fiscal year 2016,

as submitted to the Ordinary Shareholders’ Meeting for vote (AFEP-MEDEF Code, point 26)

6

Components of

compensation

Amount or accounting

valuation submitted

for vote

Presentation

Components of compensation due or granted for fiscal year 2016

– the criterion related to the change in the Group’s adjusted net income (ANI) was

Annual variable

compensation

assessed by comparison with those of the four large oil companies⁽¹⁾. The Board of

Directors noted that the increase in the Group’s three-year average ANI was better

than that of the panel⁽²⁾, which led the portion for this criterion to be set at 50% of

the fixed compensation for fiscal year 2016 (of a maximum of 50%).

(continued)

Regarding the Chairman and Chief Executive Officer’s personal contribution, the

Board of Directors determined that the targets set were largely achieved, particularly

those related to the increase in oil and gas production (+4.5% in 2016 compared to

2015), the successful strategic negotiations with producing countries (acquisition of

an interest in the giant Al-Shaheen oil field in Qatar for a period of 25 years,signing of

a heads of agreement with the Iranian state-owned company to develop phase 11 of

South Pars, strategic alliance with Petrobras in Brazil) and the successful managerial

transition (implementation of the project “One Total, one ambition”, acquisition of Saft

Groupe which permitted the integration of electricity storage solutions in the Group’s

portfolio, acquisition of the gas distributor Lampiris, sale of Atotech, renewal of the

Executive Committee as of September 1, 2016). CSR performance was also

considered fully satisfactory based on the decrease of the Group’s CO emissions

2

(-7% in 2016 compared to 2015) and on the improvement of the Group’s position in

the rankings published by non-financial rating agencies. The Chairman and Chief

Executive Officer’s personal contribution was therefore set at 40% of the fixed

compensation (of a maximum of 40%).

Multi-year or deferred n/a

variable compensation

The Board of Directors has not granted any multi-year or deferred variable

compensation.

Extraordinary

compensation

n/a

The Board of Directors has not granted any extraordinary compensation.

Directors’ fees

Mr. Pouyanné does not receive directors’ fees for his duties at TOTAL S.A or at the

companies it controls.

Stock options,

performance shares

€2,561,100

(accounting valuation)

On July 27, 2016, Mr. Pouyanné was granted 60,000 existing shares of the Company

(corresponding to 0.002% of the share capital) pursuant to the authorization of the

Company’s Combined Shareholders’ Meeting of May 24, 2016 (twenty-fourth

resolution) subject to the conditions set out below. These shares were granted under

a broader share plan approved by the Board of Directors on July 27, 2016, relating to

(and all other forms of

long-term

compensation)

0.8% of the share capital in favor of more than 10,000 beneficiaries. The definitive

grant of all the shares is subject to the beneficiary’s continued presence within the

Group during the vesting period and to performance conditions as described below.

The definitive number of shares granted will be based on the comparative TSR (Total

Shareholder Return) and the annual variation in net cash flow per share for fiscal

years 2016 to 2018, applied as follows:

–

the Company will be ranked each year against its peers⁽¹⁾during the three vesting

years (2016, 2017 and 2018) based on the TSR criterion using the average closing

market price expressed in dollars over one quarter at the beginning and end of

each three-year period (Q4 year N vs./Q4 year N-3). The dividend will be

considered reinvested based on the last market price on the ex-dividend date.

TSR N = (average price Q4 N – average price Q4 N-3 + reinvested

dividends)/(average price Q4 N-3);

(

1) ExxonMobil, Royal Dutch Shell, BP and Chevron.

(2) The annual ANI of each peer used for the calculation is determined by taking the average of the ANIs published by a panel of six financial analysts: UBS, Crédit Suisse, Barclays, Bank of

America Merrill Lynch, JP Morgan and Deutsche Bank. If any of these analysts is unable to publish the results of one or more peers for a given year, it will be replaced, for the year and for the

peer(s) in question, in the order listed, by an analyst included in the following additional list: Jefferies, HSBC, Société Générale, Goldman Sachs and Citi. The ANIs used will be set according to

these analysts’ last publications two business days after the publication of the press release announcing the “fourth quarter and annual results” of the last peer.

Registration Document 2016. TOTAL

133

Compensation of the administration and management bodies

6

Summary table of compensation components due or granted to the Chairman and Chief Executive Officer for fiscal year 2016,

as submitted to the Ordinary Shareholders’ Meeting for vote (AFEP-MEDEF Code, point 26)

Components of

compensation

Amount or accounting

valuation submitted

for vote

Presentation

Components of compensation due or granted for fiscal year 2016

– the Company will be ranked each year against its peers⁽¹⁾using the annual variation

Stock options,

performance shares

in net cash flow per share expressed in dollars criterion. Net cash flow is defined

as cash flow from operating activities minus cash flow from investing activities

including acquisitions and disposals. This data expressed in dollars will come from

the consolidated statements of cash flow taken from the annual Consolidated

Financial Statements of the Company and its peers for the fiscal years in question

(and all other forms of

long-term

compensation)

(continued)

(based on the accounting standards applicable at the time of the closing of the

accounts for such fiscal years).

The number of shares used to calculate net cash flow per share will be the

weighted-average number of diluted shares for the Company and each of its peers.

st

Based on the ranking, a grant rate will be determined for each year: 1 180% of the

nd

rd

th

grant; 2 : 130%: of the grant; 3 : 80% of the grant; 4 and 5 : 0%.

For each of the criteria, the average of the three grant rates obtained (for each of the

three fiscal years for which the performance conditions are assessed) will be rounded

to the nearest 0.1 whole percent (0.05% being rounded to 0.1%) and capped at

100%. Each criterion will have a weight of 50% in the definitive grant rate. The

definitive grant rate will be rounded to the nearest 0.1 whole percent (0.05% being

rounded to 0.1%).

The number of shares definitively granted, after confirmation of the performance

conditions, will be rounded to the nearest whole number of shares in case of a

fractional lot.

In accordance with the provisions of the French Commercial Code, Mr. Pouyanné

will, until the end of his term, be required to retain in the form of registered shares

5

0% of the gains on the acquired shares net of tax and national insurance

contributions related to the shares granted. When Mr. Pouyanné holds⁽a volume of

shares representing five times the fixed portion of his gross annual compensation,

this percentage will be equal to 10%. If this condition is no longer met, the above-

mentioned 50% holding requirement will again apply. Given this holding requirement,

the availability of the performance shares is not dependent on the purchase of further

shares in the Company.

2)

In addition, the Board of Directors has noted that, pursuant to the Board’s Rules of

Procedure applicable to all directors, the Chairman and Chief Executive Officer is not

allowed to hedge the shares of the Company or any related financial instruments and

has taken note of Mr. Pouyanné’s commitment to abstain from such hedging

operations with regard to the performance shares granted.

The grant of performance shares to Mr. Pouyanné is subject to the same

requirements applicable to the other beneficiaries of the performance share plan and

were approved by the Board at its meeting on July 27, 2016. In particular, these

provisions stipulate that the shares definitively granted at the end of the three-year

vesting period will, after confirmation of fulfillment of the presence and performance

conditions, be automatically recorded as pure registered shares on the start date of

the two-year holding period and will remain non-transferable and unavailable until the

end of the holding period.

Payment for assuming n/a

Mr. Pouyanné was not granted any payment for assuming his position.

a position

(

1) ExxonMobil, Royal Dutch Shell, BP and Chevron.

(2) In the form of shares or units of mutual funds invested in shares of the Company.

134

TOTAL. Registration Document 2016

Compensation of the administration and management bodies

Summary table of compensation components due or granted to the Chairman and Chief Executive Officer for fiscal year 2016,

as submitted to the Ordinary Shareholders’ Meeting for vote (AFEP-MEDEF Code, point 26)

6

Components of

compensation

Amount or accounting

valuation submitted

for vote

Presentation

Components of compensation due or granted for fiscal year 2016 that have been submitted to a vote at the Shareholders’ Meeting

by virtue of the regulated agreements and commitments procedure

Valuation of in-kind

benefits

€58,945

(accounting valuation)

The Chairman and Chief Executive Officer has the use of a company car and is

covered by the life insurance and health care plans paid for by the Company.

Severance benefit

None

The Chairman and Chief Executive Officer is entitled to a benefit equal to two years of

his gross compensation in the event of a forced departure related to a change of

control or strategy. The calculation is based on the gross compensation (fixed and

variable) of the 12 months preceding the date of termination or non-renewal of his

term of office.

The severance benefit will only be paid in the event of a forced departure related to a

change of control or strategy. It will not be due in case of gross negligence or willful

misconduct or if the Chairman and Chief Executive Officer leaves the Company of his

own volition, accepts new responsibilities within the Group or may claim full retirement

benefits within a short time period. Pursuant to the provisions of Article L. 225-42-1 of

the French Commercial Code, receipt of this severance benefit is contingent upon a

performance-related condition applicable to the beneficiary, which is deemed to be

fulfilled if at least two of the following criteria are met:

–

the average ROE (return on equity) for the three years preceding the year in which

the Chairman and Chief Executive Officer retires is at least 10%;

the average net debt-to-equity ratio for the three years preceding the year in which

the Chairman and Chief Executive Officer retires is less than or equal to 30%;

growth in TOTAL’s oil and gas production is greater than or equal to the average

growth rate of four oil companies (ExxonMobil, Royal Dutch Shell, BP and

Chevron) during the three years preceding the year in which the Chairman and

Chief Executive Officer retires.

Retirement benefit

None

The Chairman and Chief Executive Officer is entitled to a retirement benefit equal to

those available to eligible members of the Group under the French National Collective

Bargaining Agreement for the Petroleum Industry. This benefit is equal to 25% of the

fixed and variable annual compensation received during the 12 months preceding

retirement.

Pursuant to the provisions of Article L. 225-42-1 of the French Commercial Code,

receipt of this retirement benefit is contingent upon a performance-related condition

applicable to the beneficiary, which is deemed to be fulfilled if at least two of the

following criteria are met:

–

the average ROE (return on equity) for the three years preceding the year in which

the Chairman and Chief Executive Officer retires is at least 10%;

the average net debt-to-equity ratio for the three years preceding the year in which

the Chairman and Chief Executive Officer retires is less than or equal to 30%;

growth in TOTAL’s oil and gas production is greater than or equal to the average

growth rate of four oil companies (ExxonMobil, Royal Dutch Shell, BP and

Chevron) during the three years preceding the year in which the Chairman and

Chief Executive Officer retires. The retirement benefit cannot be combined with the

severance benefit described above.

Non-compete

compensation

n/a

Mr. Pouyanné has not received any non-compete compensation.

Registration Document 2016. TOTAL

135

Compensation of the administration and management bodies

6

Summary table of compensation components due or granted to the Chairman and Chief Executive Officer for fiscal year 2016,

as submitted to the Ordinary Shareholders’ Meeting for vote (AFEP-MEDEF Code, point 26)

Components of

compensation

Amount or accounting

valuation submitted

for vote

Presentation

Supplementary

pension plan

None

Pursuant to applicable legislation, the Chairman and Chief Executive Officer is eligible

for the basic French Social Security pension and for pension benefits under the

ARRCO and AGIRC supplementary pension plans.

He also participates in the internal defined contribution pension plan applicable to all

TOTAL S.A. employees, known as RECOSUP (Régime collectif et obligatoire de

retraite supplémentaire à cotisations définies), covered by Article L. 242-1 of the

French Social Security Code. The Company’s commitment is limited to its share of

the contributions paid to the insurance company that manages the plan. For fiscal

year 2016, this pension plan represented a booked expense to TOTAL S.A. in favor

of the Chairman and Chief Executive Officer of €2,317.

The Chairman and Chief Executive Officer also participates in a supplementary

defined benefit pension plan, covered by Article L. 137-11 of the French Social

Security Code, set up and financed by the Company and approved by the Board of

Directors on March 13, 2001, for which management is outsourced to two insurance

companies effective January 1, 2012. This plan applies to all TOTAL S.A. employees

whose compensation exceeds eight times the annual ceiling for calculating French

Social Security contributions (PASS), set at €38,616 for 2016 (i.e., €308,928), and

above which there is no conventional pension plan.

To be eligible for this supplementary pension plan, participants must have served for

at least five years, be at least 60 years old and exercised his or her rights to

retirement from the French Social Security. The benefits under this plan are subject to

a presence condition under which the beneficiary must still be employed at the time

of retirement. However, the presence condition does not apply if a beneficiary aged

55 or older leaves the Company at the Company’s initiative or in case of disability.

The length of service acquired by Mr. Pouyanné as a result of his previous salaried

duties held at the Group since January 1, 1997 has been maintained for the benefit

of this plan. The compensation taken into account to calculate the supplementary

pension is the average gross annual compensation (fixed and variable portion) over

the last three years. The amount paid under this plan is equal to 1.8% of the

compensation falling between 8 and 40 times the PASS and 1% for the portion of the

compensation falling between 40 and 60 times this ceiling, multiplied by the number

of years of service up to a maximum of 20 years, subject to the performance

condition set out below applicable to the Chairman and Chief Executive Officer.

The sum of the annual supplementary pension plan benefits and other pension plan

benefits (other than those set up individually and on a voluntary basis) may not

exceed 45% of the average gross compensation (fixed and variable portion) over the

last three years. In the event that this percentage is exceeded, the supplementary

pension is reduced accordingly. The amount of the supplementary pension

determined in this way is indexed to the ARRCO pension point.

The supplementary pension includes a clause whereby 60% of the amount will be

paid to beneficiaries in the event of death after retirement.

To ensure that the acquisition of additional pension rights under this defined-benefit

pension plan is subject to performance conditions to be defined pursuant to the

provisions of Article L. 225-42-1 of the French Commercial Code amended by law

No. 2015-990 of August 6, 2015, the Board of Directors noted the existence of the

Chief Executive Officer’s pension rights under the above-mentioned pension plan,

immediately before his appointment as Chairman, for the period from January 1,

1

997 to December 18, 2015.

The conditional rights granted for the period from January 1, 1997 to December 18,

015 (inclusive), acquired without performance conditions, correspond to a

2

replacement rate equal to 34.14% for the portion of the base compensation falling

between 8 and 40 times the PASS and a replacement rate of 18.96% for the portion

of the base compensation falling between 40 and 60 times the PASS.

136

TOTAL. Registration Document 2016

Compensation of the administration and management bodies

Summary table of compensation components due or granted to the Chairman and Chief Executive Officer for fiscal year 2016,

as submitted to the Ordinary Shareholders’ Meeting for vote (AFEP-MEDEF Code, point 26)

6

Components of

compensation

Amount or accounting

valuation submitted

for vote

Presentation

Supplementary

pension plan

The conditional rights granted for the period from December 19, 2015 to

December 31, 2016 are subject to the performance condition described below and

correspond to a maximum replacement rate equal to 1.86% for the portion of the

base compensation falling between 8 and 40 times the PASS and a replacement rate

equal to 1.04% for the portion of the base compensation falling between 40 and 60

times the PASS.

(continued)

Pursuant to the provisions of Article L. 225-42-1 of the French Commercial Code, on

December 16, 2015 the Board of Directors decided to make the acquisition of these

conditional rights for the period from December 19, 2015 to December 31, 2016,

subject to a condition related to the beneficiary’s performance, which is considered

fulfilled if the variable portion of the Chairman and Chief Executive Officer’s

compensation paid in 2017 for fiscal year 2016 reaches 100% of the base salary due

for fiscal year 2016. In the event that the variable portion does not reach 100% of the

base salary, the rights granted will be calculated on a prorata basis.

On February 8, 2017, the Board of Directors noted that the specified performance

condition was fully met and therefore confirmed the acquisition by Mr. Pouyanné of

additional pension rights for the period from December 19, 2015 to December 31,

2016 under this defined-benefit pension plan.

The Board also noted that Mr. Pouyanné would no longer be able to acquire additional

pension rights under this plan given the rules for determining pension rights set out in

the plan and the 20 years of service of Mr. Pouyanné as of December 31, 2016.

The commitments made by TOTAL S.A. to its Chairman and Chief Executive Officer

regarding the supplementary defined benefit and similar pension plans therefore

represent, at December 31, 2016, a gross annual pension estimated at €599,320

based on the length of service acquired as of December 31, 2016 (i.e., 20 years of

service), corresponding to 16.03% of Mr. Pouyanné’s gross annual compensation

consisting of the annual fixed portion for 2016 (i.e., €1,400,000) and the variable

portion paid in 2017 for fiscal year 2016 (i.e., €2,339,400). Nearly the full amount of

TOTAL S.A.’s commitments under these supplementary and similar retirement plans

(including the retirement benefit) is outsourced to insurance companies and the non-

outsourced balance is evaluated annually and adjusted through a provision in the

accounts. The amount of these commitments as of December 31, 2016

is €16.1 million for the Chairman and Chief Executive Officer (€16.4 million for the

Chairman and Chief Executive Officer and the executive and non-executive directors

covered by these plans). These amounts represent the gross value of TOTAL S.A.’s

commitments to these beneficiaries based on the estimated gross annual pensions

as of December 31, 2016 and the statistical life expectancy of the beneficiaries.

The total amount of all the pension plans in which Mr. Pouyanné participates

represents, at December 31, 2016, a gross annual pension estimated at €690,600

based on the length of service acquired as of December 31, 2016 (i.e., 20 years of

service), corresponding to 18.47% of Mr. Pouyanné’s gross annual compensation

defined above (annual fixed portion for 2016 and variable portion paid in 2017 for

fiscal year 2016).

In line with the principles for determining the compensation of executive directors as

set out in the AFEP-MEDEF Code which the Company uses as a reference, the

Board of Directors took into account the benefit accruing from participation in the

pension plans when determining the Chairman and Chief Executive Officer’s

compensation.

Approval by the

Annual Shareholders’

Meeting

-

The commitments made to the Chairman and Chief Executive Officer regarding the

pension and insurance plans, the retirement benefit and the severance benefit (in the

event of forced departure related to a change of control or strategy) were authorized

by the Board of Directors on December 16, 2015 and approved by the Annual

Shareholders’ Meeting on May 24, 2016.

Registration Document 2016. TOTAL

137

Compensation of the administration and management bodies

6

Report on the principles and criteria for the determination, breakdown and allocation of the fixed, variable and extraordinary components

of the total compensation (including in-kind benefits) attributable to the Chairman and Chief Executive Officer

(Article L. 225-37-2 of the French Commercial Code)

6

. Report on the principles and criteria for the

determination, breakdown and allocation of the fixed,

variable and extraordinary components of the total

compensation (including in-kind benefits) attributable

to the Chairman and Chief Executive Officer

(Article L. 225-37-2 of the French Commercial Code)

In accordance with the provisions of Article L. 225-37-2 of the

French Commercial Code, this report attached to the report

referred to in Articles L. 225-100 and L. 225-102 describes the

principles and criteria for the determination, breakdown and

allocation of the fixed, variable and extraordinary components of the

total compensation (including in-kind benefits) attributable to the

Chairman and Chief Executive Officer as a result of his duties.

These components will be submitted to the Annual Shareholders’

Meeting of May 26, 2017 for approval.

determining the compensation of the executive directors approved

by the Board of Directors at its meeting on February 9, 2012, which

have not been changed since then and are set out below.

At its meeting on March 15, 2017, the Board of Directors, on the

proposal of the Compensation Committee, approved the

compensation policy for the Chairman and Chief Executive Officer

applicable for fiscal year 2017 and presented in point 6.2.

In line with the principles for determining the compensation of

executive directors as set out in the AFEP-MEDEF Code which the

Company uses as a reference, the Board of Directors took into

account the benefit accruing from participation in the pension plans

when determining the compensation policy for the Chairman and

Chief Executive Officer for fiscal year 2017.

This report reviewed by the Compensation Committee was

approved by the Board of Directors.

The compensation policy for the Chairman and Chief Executive

Officer is approved by the Board of Directors on the proposal of the

Compensation Committee. It is based on the general principles for

6.1. General principles for determining the compensation of the executive directors

The general principles for determining the compensation and other

benefits granted to the executive directors of TOTAL S.A. are as

follows:

The Board of Directors monitors the change in the fixed and

variable portions of the executive directors’ compensation over

several years in light of the Company’s performance;

there is no specific pension plan for the executive directors. They

are eligible for retirement benefits and pension plans available to

certain employee categories in the Group under conditions

determined by the Board;

stock options and performance shares are designed to align the

interests of the executive directors with those of the shareholders

over the long term.

The grant of options and performance shares to the executive

directors is reviewed in light of all the components of

compensation of the person in question. No discount is applied

when stock options are granted.

Stock options and performance shares are granted at regular

intervals to prevent any opportunistic behavior.

The exercise of options and the definitive grant of performance

shares to which the executive directors are entitled are subject to

performance conditions that must be met over several years.

The Board of Directors determines the rules related to holding a

portion of the shares resulting from the exercise of options and

the performance shares definitively granted, which apply to the

executive directors until the end of their term of office.

–

compensation and benefits for the executive directors are set by

the Board of Directors on the proposal of the Compensation

Committee. Such compensation must be reasonable and fair, in

a context that values both teamwork and motivation within the

Company. Compensation for the executive directors is based on

the market, the work performed, the results obtained and the

responsibilities assumed;

–

compensation for the executive directors includes a fixed portion

and a variable portion. The fixed portion is reviewed at least every

two years;

the amount of the variable portion is reviewed each year and may

not exceed a stated percentage of the fixed portion. Variable

compensation is determined based on pre-defined quantitative

and qualitative criteria that are periodically reviewed by the Board

of Directors. Quantitative criteria are limited in number, objective,

measurable and adapted to the Company’s strategy;

the variable portion rewards short-term performance and the

progress made toward paving the way for medium-term

development. It is determined in a manner consistent with the

annual performance review of the executive directors and the

Company’s medium-term strategy.

–

138

TOTAL. Registration Document 2016

Compensation of the administration and management bodies

Report on the principles and criteria for the determination, breakdown and allocation of the fixed, variable and extraordinary components of

the total compensation (including in-kind benefits) attributable to the Chairman and Chief Executive Officer

6

(Article L. 225-37-2 of the French Commercial Code)

The executive directors cannot be granted stock options or

performance shares when they leave office;

The executive directors do not take part in any discussions or

deliberations of the corporate bodies regarding items on the

agenda of Board of Directors’ meetings related to the assessment

of their performance or the determination of the components of

their compensation.

–

after three years in office, the executive directors are required to

hold at least the number of Company shares set by the Board;

the components of compensation of the executive directors are

made public after the Board of Directors’ meeting at which they

are approved.

6.2. Compensation policy for the Chairman and Chief Executive Officer

for fiscal year 2017

The compensation policy for the Chairman and Chief Executive

Officer for fiscal year 2017, as approved by the Board of Directors

on March 15, 2017, is presented below.

Annual variable portion of the Chairman and Chief

Executive Officer’s compensation

The Board of Directors also decided to set the maximum amount of

the variable portion that could be paid to the Chairman and Chief

Executive Officer for fiscal year 2017 at 180% of his base salary

Base salary of the Chairman and Chief Executive Officer

(fixed compensation)

(same percentage as in fiscal year 2016). This ceiling was set based

The Board of Directors decided to set Mr. Pouyanné’s annual base

salary (fixed compensation) for his duties as Chairman and Chief

Executive Officer for fiscal year 2017 at €1,400,000 (same as the

fixed portion due for fiscal year 2016).

on the level applied by a benchmark sample of companies

operating in the energy sectors.

As in 2016, the formula for calculating the variable portion of the

Chairman and Chief Executive Officer’s compensation for fiscal year

2017 uses economic parameters that refer to quantitative targets

reflecting the Group’s performance as well as the Chairman and

Chief Executive Officer’s personal contribution allowing a qualitative

assessment of his management.

The level of the Chairman and Chief Executive Officer’s fixed

compensation was set based on the responsibilities assumed

and the compensation levels applied for executive directors

of comparable companies (particularly CAC 40 companies).

Annual variable compensation due for fiscal year 2017 (expressed as a percentage of the base salary)

Maximum

percentage

Economic parameters

140%

20%

30%

40%

50%

–

Safety – comparative

Return on equity (ROE)

Net debt-to-equity ratio

Adjusted net income (ANI) – comparative

Personal contribution:

40%

–

steering of the strategy and successful strategic negotiations with producing countries

achievement of production and reserve targets

performance and outlook with respect to Downstream activities

Corporate Social Responsibility (CSR) performance

10%

Total

180%

The parameters used include:

–

change in safety, for up to 20% of the base salary, assessed

through the achievement of an annual TRIR (Total Recordable

Injury Rate) target and the number of accidental deaths

– net debt-to-equity ratio as published by the Group on the basis

of its balance sheet and consolidated statement of income, for

up to 40% of the base salary; and

per million hours worked, FIR (Fatality Incident Rate) compared to

those of four large competitor oil companies⁽¹⁾, as well as through

– change in adjusted net income (ANI), for up to 50% of the base

salary, determined on the basis of the financial statements

published by the Group (in accordance with the accounting

standards applicable at the time of the closing of the accounts

for the fiscal years in question) and compared with the ANI values

of four major oil companies⁽¹⁾determined on the basis of

estimates calculated by a group of leading financial analysts.

changes in the Tier 1 + Tier 2 indicator⁽²⁾

;

–

return on equity (ROE) as published by the Group on the basis of

its balance sheet and consolidated statement of income, for up

to 30% of the base salary;

(

1) ExxonMobil, Royal Dutch Shell, BP and Chevron.

2) Tier 1 and Tier 2: indicator of the number of loss of primary containment events, with more or less significant consequences, as defined by the API 754 (for downstream) and IOGP 456 (for

upstream) standards. Excluding acts of sabotage and theft.

Registration Document 2016. TOTAL

139

Compensation of the administration and management bodies

6

Report on the principles and criteria for the determination, breakdown and allocation of the fixed, variable and extraordinary components of the

total compensation (including in-kind benefits) attributable to the Chairman and Chief Executive Officer

(Article L. 225-37-2 of the French Commercial Code)

The expected levels of achievement of the quantitative targets for

determining the variable portion of the Chairman and Chief

Executive Officer’s compensation have been clearly defined but are

not made public for reasons of confidentiality.

Pension plans

Pursuant to applicable legislation, the Chairman and Chief

Executive Officer is eligible for the basic French Social Security

pension and for pension benefits under the ARRCO and AGIRC

supplementary pension plans.

The Chairman and Chief Executive Officer’s personal contribution,

which may represent up to 40% of the base salary, is evaluated

based on the following criteria:

He also participates in the internal defined contribution pension

plan applicable to all TOTAL S.A. employees, known as RECOSUP

(Régime collectif et obligatoire de retraite supplémentaire à

cotisations définies), covered by Article L. 242-1 of the French

Social Security Code. The Company’s commitment is limited to its

share of the contributions paid to the insurance company that

manages the plan. For fiscal year 2016, this pension plan

represented a booked expense to TOTAL S.A. in favor of the

Chairman and Chief Executive Officer of €2,317.

–

steering of the strategy and successful strategic negotiations

with producing countries, for up to 10%;

–

achievement of production and reserve targets, for up to 10%;

performance and outlook with respect to Downstream activities,

for up to 10%; and

–

CSR performance, for up to 10%, notably taking into account

climate issues in the Group’s strategy as well as the Group’s

reputation in the domain of corporate social responsibility.

The Chairman and Chief Executive Officer also participates in a

supplementary defined benefit pension plan, covered by Article

L. 137-11 of the French Social Security Code, set up and financed

by the Company and approved by the Board of Directors on

March 13, 2001, for which management is outsourced to two

insurance companies effective January 1, 2012. This plan applies to

all TOTAL S.A. employees whose compensation exceeds eight

times the annual ceiling for calculating French Social Security

contributions (PASS), set at €38,616 for 2016 (i.e., €308,928), and

above which there is no conventional pension plan.

Performance shares

Each year, the Chairman and Chief Executive Officer can be

granted performance shares as part of the broader grant plans

approved by the Board of Directors for certain Group employees.

The performance shares granted to him are subject to the same

requirements applicable to the other beneficiaries of the grant

plans.

As in previous years, in 2017 the Board of Directors will consider

offering a performance share plan to various beneficiaries, including

the Chairman and Chief Executive Officer. The performance

conditions would be based on the Company’s ranking established

each year against its peers⁽¹⁾during the three vesting years (2017,

To be eligible for this supplementary pension plan, participants

must have served for at least five years, be at least 60 years old

and exercised his or her rights to retirement from the French Social

Security. The benefits under this plan are subject to a presence

condition under which the beneficiary must still be employed at the

time of retirement. However, the presence condition does not apply

a beneficiary aged 55 or older leaves the Company at the

Company’s initiative or in case of disability.

2018, 2019) using the TSR (Total Shareholder Return) criterion; and

on the Company’s ranking established each year against its peers⁽

during the three vesting years (2017, 2018, 2019) using the annual

variation in net cash flow per share expressed in dollars criterion.

At the end of the three-year vesting period, the shares granted

would need to be held for two years following their definitive grant.

1)

The length of service acquired by Mr. Pouyanné as a result of his

previous salaried duties held at the Group since January 1, 1997

has been maintained for the benefit of this plan. The compensation

taken into account to calculate the supplementary pension is the

average gross annual compensation (fixed and variable portion)

over the last three years. The amount paid under this plan is equal

to 1.8% of the compensation falling between 8 and 40 times the

PASS and 1% for the portion of the compensation falling between

40 and 60 times this ceiling, multiplied by the number of years of

service up to a maximum of 20 years, subject to the performance

condition set out below applicable to the Chairman and Chief

Executive Officer.

Commitments made by the Company to the Chairman

and Chief Executive Officer (Article L. 225-102-1,

paragraph 3, of the French Commercial Code)

The commitments made to the Chairman and Chief Executive

Officer regarding the pension plans, the retirement benefit and the

severance benefit to be paid in the event of forced departure

related to a change of control or strategy, as well as the life

insurance and health care benefits, approved by the Board of

Directors on December 16, 2015 and by the Annual Shareholders’

Meeting on May 24, 2016, in accordance with the provisions of

Article L. 225-42-1 of the French Commercial Code, will not be

likely to be changed before the expiration of the Chairman and

Chief Executive Officer’s term of office. They are presented below.

It should be noted that Mr. Pouyanné already benefited from all

these provisions when he was an employee of the Company,

except for the commitment to pay severance benefits in the event

of forced departure related to a change of control or strategy. It

should also be noted that Mr. Pouyanné, who joined the Group on

January 1, 1997, ended the employment contract that he previously

had with TOTAL S.A. through his resignation at the time of his

appointment as Chief Executive Officer on October 22, 2014.

The sum of the annual supplementary pension plan benefits and

other pension plan benefits (other than those set up individually and

on a voluntary basis) may not exceed 45% of the average gross

compensation (fixed and variable portion) over the last three years.

In the event that this percentage is exceeded, the supplementary

pension is reduced accordingly. The amount of the supplementary

pension determined in this way is indexed to the ARRCO pension

point.

The supplementary pension includes a clause whereby 60% of the

amount will be paid to beneficiaries in the event of death after

retirement.

(1) ExxonMobil, Royal Dutch Shell, BP and Chevron.

140

TOTAL. Registration Document 2016

Compensation of the administration and management bodies

Report on the principles and criteria for the determination, breakdown and allocation of the fixed, variable and extraordinary components of

the total compensation (including in-kind benefits) attributable to the Chairman and Chief Executive Officer

6

(Article L. 225-37-2 of the French Commercial Code)

To ensure that the acquisition of additional pension rights under this

defined-benefit pension plan is subject to performance conditions

to be defined pursuant to the provisions of Article L. 225-42-1 of

the French Commercial Code amended by law No. 2015-990 of

August 6, 2015, the Board of Directors noted the existence of the

Chief Executive Officer’s pension rights under the above-mentioned

pension plan, immediately before his appointment as Chairman, for

the period from January 1, 1997 to December 18, 2015.