EX-15.1 8 d862109dex151.htm EX-15.1 EX-15.1

EXHIBIT 15.1

Exhibit 15.1 contains the excerpts of TOTAL S.A.’s Universal Registration Document 2019 that are incorporated by reference into this Annual Report on Form 20-F (1).

  

 

(1) Where information has been deleted from TOTAL S.A.’s Universal Registration Document 2019, such deletion is indicated in this exhibit with a notation that such information has been redacted.


 

  Contents

 

[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]  
1      
Presentation of the Group – Integrated report      3  
1.1    TOTAL in brief      4  
1.2    An ambition: become the responsible energy major      7  
1.3    Advantages that allow the Group to stand out in a changing energy world      8  
1.4    Strong commitments favouring sustainable growth      14  
1.5    Governance and an organizational structure to support the Group’s ambition      18  

[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]

 

2      
Business overview for fiscal year 2019      31  
2.1    Integrated Gas, Renewables & Power segment      32  
2.2    Exploration & Production segment      40  
2.3    Upstream hydrocarbons activities      47  
2.4    Refining & Chemicals segment      60  
2.5    Marketing & Services segment      67  
2.6    Investments      74  
2.7    Research & Development      76  
3      
Risks and control      81  
3.1    Risk factors      82  
3.2    Countries targeted by economic sanctions      90  
3.3    Internal control and risk management procedures      93  
3.4    Insurance and risk management      100  
3.5    Legal and arbitration proceedings      101  
3.6    Vigilance Plan      102  
4      
Report on corporate governance      129  
4.1    Administration and management bodies      130  
4.2    Statement regarding corporate governance      168  
4.3    Compensation for the administration and management bodies      169  
4.4    Additional information about corporate governance      195  
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
 
5      
Non-financial performance      203  
5.1    An ambition for the Company:
to become the responsible energy major
     204  
5.2    Business model      205  
5.3    Social challenges      206  
5.4    Personal health and safety challenges      216  
5.5    Environmental challenges      221  
5.6    Climate change – related challenges      227  
5.7    Actions in support of human rights      235  
5.8    Fighting corruption and tax evasion      238  
5.9    Value creation for host regions      241  
5.10    Contractors and suppliers      245  
5.11    Reporting scopes and method      249  
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]
 
6      
TOTAL and its shareholders      257  
6.1    Listing details      258  
6.2    Dividend      261  
6.3    Share buybacks      263  
6.4    Shareholders      267  
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]  
6.6    Investor relations      271  
7      
General information      273  
7.1    Share capital      274  
7.2    Articles of incorporation and bylaws; other information      276  
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]  
8      
Consolidated Financial Statements      281  
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]  
8.2    Consolidated statement of income      286  
8.3    Consolidated statement of comprehensive income      287  
8.4    Consolidated balance sheet      288  
8.5    Consolidated statement of cash flow      289  
8.6    Consolidated statement of changes in shareholders’ equity      290  
8.7    Notes to the Consolidated Financial Statements      291  
9      
Supplemental oil and gas information (unaudited)      401  
9.1    Oil and gas information pursuant to FASB Accounting Standards Codification 932      402  
9.2    Other information      419  
9.3    Report on the payments made to governments
(Article L. 225- 102- 3 of the French Commercial Code)
     421  
[REDACTED SECTION CERTAIN TEXT HAS BEEN REDACTED.]  
Glossary      467  
[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]  
 

 

 


         

 

            

1

Presentation

of the Group –

Integrated report

 

1.1   TOTAL in brief      4  

 

 
1.1.1   A major energy player      4  
1.1.2   2019 key Group figures      4  
1.2   An ambition: become the responsible energy major      7  

 

 
1.2.1   A collective ambition to meet the challenges facing the energy sector      7  
1.2.2   An established strategy      8  
1.3   Advantages that allow the Group to stand out in a changing energy world      8  

 

 
1.3.1   A long-standing energy player      8  
1.3.2   A differentiating geographic presence      10  
1.3.3   Employees committed to better energy      11  
1.3.4   The strength of the Group’s integrated business model      12  
1.4   Strong commitments favouring sustainable growth      14  

 

 
1.4.1   Five strong values at the heart of the Group      14  
1.4.2   A Group engaged in R&D, innovation and the digital transformation      14  
1.4.3   A targeted investment policy      14  
1.4.4   A continuous improvement dynamic      15  
1.5   Governance and an organizational structure to support the Group’s ambition      18  

 

 
1.5.1   A Board of Directors fully committed to the Company’s strategic orientations      19  
1.5.2   TOTAL S.A., parent company of the Group and its subsidiaries      20  
1.5.3   An operational structure      20  

[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]

 

 

 

 

 1

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  3                


1   

 

Presentation of the Group – Integrated Report

 

TOTAL in brief

 

            

1.1

TOTAL in brief

 

1.1.1

A major energy player

TOTAL, a producer of oil and gas for nearly a century with a presence in more than 130 countries on 5 continents, is a major energy player(1) that produces and markets fuels, natural gas and low-carbon electricity.

The Group’s activities extend from exploration and production of oil, gas and electricity to the energy distribution to the end consumer through refining, liquefaction, petrochemicals, trading, energies transport and storage. More than 100,000 employees are committed to contributing to supply to as many people as possible, a more affordable, more available and cleaner energy.

Energy, an essential resource, accompanies the development of society. In view of the major challenges of today’s world, energy producers have a key role to play.

 

1.1.2

2019 key Group figures

As of December 31, 2019(a)

 

LOGO

 

(a)

For a definition of the alternative performance indicators, refer to point 1.6.1.2 of this chapter and to Note 3 to the Consolidated Financial Statements (point 8.7 of chapter 8).

(b)

Subject to approval by the Shareholders’ Meeting on May 29, 2020.

(c)

Excluding leases; 20.7% including the leases impact.

 

Hydrocarbon production and proved reserves

 

LOGO

 

Hydrocarbon production

 

         2019           2018         2017  

Combined production (kboe/d)

    3,014         2,775       2,566  

Oil (including bitumen) (kb/d)

    1,431         1,378       1,167  

Gas (including Condensates and associated NGL) (kboe/d)

    1,583         1,397       1,399  
     2019       2018     2017  

Combined production (kboe/d)

    3,014         2,775       2,566  

Liquids (kb/d)

    1,672         1,566       1,346  

Gas (Mcf/d)

    7,364         6,599       6,662  

Hydrocarbon production by geographic area

(kboe/d)

 

LOGO

 

 

 

 

(1)

TOTAL is the world’s fourth-largest publicly traded integrated oil and gas group based on market capitalization (in dollars) as of December 31, 2019.

(2)

Based on a Brent crude price of 62.74$/b (reference price in 2019), according to the rules established by the Securities and Exchange Commission (report to point 2.1.1 of chapter 2).

 

            

 

 

4   

 

TOTAL   Universal Registration Document 2019


 

Presentation of the Group – Integrated Report

 

TOTAL in brief

     

 

            

 

Hydrocarbon proved reserves(a)

 

As of December 31    2019      2018      2017  
Hydrocarbon reserves (Mboe)      12,681        12,050        11,475  

Oil (including bitumen) (Mb)

     5,167        5,203        4,615  

Gas (including Condensates and associated NGL) (Mboe)

     7,514        6,847        6,860  
As of December 31    2019      2018      2017  
Hydrocarbon reserves (Mboe)      12,681        12,050        11,475  

Liquids (Mb)

     6,006        6,049        5,450  

Gas (Bcf)

     36,015        32,325        32,506  

 

  (a)

Proved reserves of hydrocarbons based on SEC rules (Brent at $62.74/b in 2019, $71.43/b in 2018 and $54.36/b in 2017).

Hydrocarbon proved reserves(a) by geographic areas (Mboe)

 

LOGO

 

  (a)

Proved reserves of hydrocarbons based on SEC rules (Brent at $62.74/b in 2019, $71.43/b in 2018 and $54.36/b in 2017).

 

 

 

 

Integrated Gas, Renewables & Power

 

LOGO

LNG sales (Mt)

 

LOGO

 

Installed gross capacity of low-carbon power
generation(2)
(GW)

 

LOGO

Sales of gas and electricity in Europe – Number of BTB and BTC sites (in millions)

 

LOGO

 

a)

Acquisition of Direct Énergie in 2018.

 

 

 

 

 

  (1)

Including Normandy Refinery cogeneration unit, part of Refining & Chemical segment.

  (2)

Excluding Cycle combined gas plants in Taweelah, United Arab Emirates.

 

 

 1

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  5             


1   

 

Presentation of the Group – Integrated Report

 

TOTAL in brief

 

            

Refining & Chemicals and Marketing & Services Crude oil refining capacity(a) (kb/d)

 

 

LOGO

 

  (a)

Capacity data based on crude distillation unit stream-day capacities under normal operating conditions, less the average impact of shutdowns for regular repair and maintenance activities.

Refinery throughput(a) (kb/d)

 

 

LOGO

 

(a)

Includes refineries in Africa that are reported in the Marketing & Services segment.

 
 

 

Petrochemicals production capacity

by geographic area (kt)

 

 

LOGO

 

  (a)

Including 50% of the joint-venture between TOTAL and Novealis.

 
  (b)

Including interests in Qatar, 50% of Hanwha Total Petrochemicals Co. Limited and 37.5% of SATORP in Saudi Arabia.

 

Petroleum product sales (kb/d)

 

 

LOGO

 

(a)

Including Indian Ocean islands.

 
(b)

2017 data restated. Sales in Turkey, Lebanon, Jordan and Isreal were reclassified from Europe to Middle East. Sales in Morocco, Algeria and Tunisia were reclassified from Europe to Africa.

 
 

 

Marketing & Services petroleum product sales(a)

by geographic area (kb/d)

 

LOGO

 

  (a)

Excluding trading and bulk refining sales.

 
  (b)

Including Turkey.

 
  (c)

Including Indian Ocean islands.

 

 

 

 

            

 

 

6   

 

TOTAL   Universal Registration Document 2019


 

Presentation of the Group – Integrated Report

 

TOTAL in brief

     

 

            

 

Employees by segment(a)

 

LOGO

Workforce as of December 31, 2019: 107,776.

 

  (a)

Refer to point 5.3 of chapter 5.

 

Employees by geographical area(a)

 

LOGO

Workforce as of December 31, 2019: 107,776.

 

  (a)

Refer to point 5.3 of chapter 5.

 

 

Shareholding structure by shareholder type

Estimates below are as of December 31, 2019, excluding treasury shares, based on the survey of identifiable holders of bearer shares conducted on that date.

 

LOGO

 

  (a)

On the basis of employee shareholding as defined in Article L. 225-102 of the French Commercial Code, treasury shares excluded (5.3% of the total share capital, refer to point 6.3.2.6 of chapter 6).

Shareholding structure by area

Estimates below are as of December 31, 2019, excluding treasury shares, based on the survey of identifiable holders of bearer shares conducted on that date.

 

LOGO

The number of individual and institutional shareholders of TOTAL S.A. is estimated at approximately 450,000.

 

 

 

1.2

An ambition: become the responsible energy major

 

1.2.1

A collective ambition to meet the challenges facing the energy sector

 

TOTAL is an integrated energy group and one of the world’s largest. Through its international presence and its activities, TOTAL has the intention to make its development a vehicle of progress that benefits as many people as possible and to be a factor of positive change for the societies and regions where it is present.

The United Nations, whose member States adopted in 2015 the 17 Sustainable Development Goals (SDGs), have called upon corporations’ contribution to collectively find solutions to sustainable development challenges. TOTAL has committed since 2016 to contributing to the SDGs and has structured its approach to responsible development in order to make a more significant contribution to the SDGs, and in particular regarding access to energy, decent work, human rights and climate change.

Access to energy is a source of progress. It is the condition for economic and social development as well as for the improvement of the standard

of living of people around the world. In most countries, and in the developing countries in particular, access to low-cost energy is a priority.

The Group’s vocation is to produce the energy that the world needs, and will need in the future, and to make it accessible to as many people as possible. This is a real challenge: despite progress made since 2010, 840 million individuals(1) still have no access to electricity.

This vocation is to be accomplished in a responsible manner and by working to provide an effective response to the climate change challenge, in particular.

Meeting the energy needs of a growing global population, providing tangible solutions to contribute limiting global warming, adapting to new patterns of energy production and consumption and changes to the expectations of customers and stakeholders constitute the challenges that a major energy player like TOTAL can help tackle.

 

 

 

(1)

Source: 2019 Tracking SDG7: the Energy Progress Report.

 

 

 1

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  7             


1   

 

Presentation of the Group – Integrated Report

 

An ambition: become the responsible energy major

 

            

In 20 years, TOTAL’s ambition is to be a leading player in energy, a player that contributes to the development of growing populations by supplying them with affordable energy, a player that helps provide answers to the climate challenge, a player that knows how to evolve with its customers.

TOTAL is committed to supplying people with the energy they need:

by producing, transforming and distributing energy at an affordable cost and to the highest safety and environmental standards;

by supplying a responsible energy mix that takes the SDS scenario of the IEA into consideration and with a carbon intensity that regularly decreases;

by providing its customers with solutions that enable them to use energy responsibly;

with a quality of local service that is recognized.

TOTAL’s ambition is to become the responsible energy major. Its raison d’être is to supply to as many people as possible a more affordable, more available and cleaner energy.

 

 

1.2.2

An established strategy

 

The Group’s strategy takes into account the evolution of energy markets to respond to the challenges of climate change, notably relying on scenarios of the International Energy Agency.

The IEA 2019 World Energy Outlook anticipates three scenarios (Stated Policies Scenario (SPS), Current Policies Scenario (CPS) and Sustainable Development Scenario (SDS)). Among these scenarios, the SPS (central scenario of the IEA) for the short/mid term and the SDS for the mid/long term are important references for the Group. The Group therefore establishes its strategy and long-term price trajectory in line with the IEA’s SDS scenario, which is compatible wih the Paris Agreement, and foresees oil prices converging towards 50$2018/b by 2050.

The SPS takes into account the measures already implemented by countries in the energy area as well as the effects of the policies announced by the Governments (including the Nationally Determined Contributions – NDC – of the Paris Agreement). The SDS takes into account necessary measures to achieve a temperature rise of less than 2°C compared to pre-industrial levels, and the energy-related goals set in the “2030 Agenda for Sustainable Development” adopted in 2015 by the UN members.

Consequently the Group’s strategy relies on four pillars:

expanding along the natural gas value chain;

developing profitable low-carbon electricity businesses;

focusing on oil assets at a low breakeven point;

investing in technologies and businesses that contribute to carbon neutrality.

The ambition of this strategy is to reduce the carbon intensity of the energy mix that the Group offers to its customers (-15% by 2030 and -40% by 2040), and thus to contribute to the evolution of market demand and society’s energy transition.

TOTAL acts on several complementary levels:

on products, by developing energies with a lower carbon content, such as gas (including biogas and hydrogen), renewables and biofuels;

on demand, by developing, for example, electric mobility or LNG as transport fuel;

on emissions, by first reducing emissions from its facilities (CO2 and methane), but also by advising its customers in reducing their emissions (electric mobility solutions, storage, energy efficiency consulting) and by developing carbon sinks (nature-based solutions or CCUS).

 

 

1.3

Advantages that allow the Group to stand out in a changing energy world

 

To become the responsible energy major and to help provide specific solutions to major challenges over the next decades, TOTAL can rely on several advantages: its long-standing and broad geographical presence,

the know-how and commitment of its employees and the power of its integrated business model.

 

 

1.3.1

A long-standing energy player

 

Energy is rooted in TOTAL’s history.

A producer of oil and gas for almost a century, the Group’s history started in 1924 with the creation of the Compagnie française des Pétroles (CFP), which began its oil production activities in the Middle East at this time.

 

Over the years, the Group has diversified its activities and opened sites around the world by positioning itself in the gas, refining and petrochemical segments and the distribution of petroleum products, solar power, sustainable biofuels and electricity.

 

 

            

 

 

8   

 

TOTAL   Universal Registration Document 2019


 

Presentation of the Group – Integrated Report

 

Advantages that allow the Group to stand out in a changing energy world

     

 

            

         LOGO

 

 

 1

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  9             


1   

 

Presentation of the Group – Integrated Report

 

Advantages that allow the Group to stand out in a changing energy world

 

            

1.3.2

A differentiating geographic presence

 

It is thanks to its pioneer spirit and sense of solidarity that TOTAL has become a worldwide oil and gas major and that it has forged partnerships of trust with its host countries. Remaining loyal to these principles means being continuously open to forming new alliances, key to the Group’s development, and creating new opportunities in the energy sector despite geopolitical uncertainty.

It is thanks to a strong and lasting geographic presence that the Group will be able to meet its goal of becoming a recognized partner in the sustainable economic and social development of the communities and regions in which it operates for the creation of shared value.

 

1.3.2.1

From one history to one ambition

The Group is present in more than 130 countries and on 5 continents. There are three geographical areas in particular that represent the historical foundations of TOTAL’s strategy and today stand out thanks to the quality of the on-site teams and solid partnerships forged over time:

Europe: at the heart of the Group’s knowledge, Europe is home to the Group’s decision-making center; it is the hub of its research and innovation work and constitutes a strong industrial base;

Middle East: the Group began its production activities in this geographical area and is recognized in the Middle East as a partner of choice among producing nations and their national oil companies. The aim of the Group is to develop its activities in all business lines in this geographical area, even when geopolitical tension rises;

Africa: TOTAL is one of the largest integrated majors on the African continent, notably thanks to the volume of hydrocarbon production and the number of Group-branded service stations on the African continent(1). TOTAL generates electricity from renewable sources there. The Group intends to remain the continent’s partner of choice and to contribute to its economic and social development through the creation of shared value.

Today, new areas which are vital for the Group have appeared, particularly the Americas, which represent a strong growth opportunity for all of the Group’s businesses, Asia, in order to benefit from this market’s high rate of growth, and Russia, where TOTAL is working on major industrial projects and maintains a special and long-term relationship with local industrial players.

 

 

 

“It is by giving priority to our strengths and nurturing our differences that we will achieve our ambition of becoming a leading player in the energy of the future.”

 

Patrick Pouyanné, Chairman and Chief Executive Officer

 

 

1.3.2.2

Managing geopolitical uncertainty

The world is confronted by political and geopolitical uncertainty characterized by tension connected to conflict and war in countries such as Syria, Iraq, Yemen and Libya. It is exacerbated by international terrorism.

In this context, TOTAL intends to develop its activities by putting its competencies to the benefit of each of the countries where it operates, by complying with applicable laws and international economic sanctions where imposed. The Group also ensures that the capital invested in the most sensitive countries remains at a level limiting its exposure in each of them.

This is the approach TOTAL intends to pursue and which was materialized following its decision to carry on investing in Russia while complying with the economic sanctions imposed by the United States and Europe. The Group, if necessary, stops its activities in countries that become too risky (such as Yemen and Syria).

Loyalty to its partners, particularly during such kind of situations, is also a strong characteristic of the Group.

TOTAL’s activities, wherever they are, are carried out in strict adherence to applicable laws and the Group’s Code of Conduct and within the framework of compliance and risk management procedures.

By continuing to invest and to supply energy, the Group helps maintain conditions that favor the economic development of these geographical areas.

For more information on risk factors, internal control and risk management procedures and reasonable vigilance measures implemented by the Group, refer to points 3.1, 3.3 and 3.6 of chapter 3.

1.3.2.3

A local socioeconomic development partner

Safety, integrity, business ethics, respect for human rights, and societal and environmental responsibility are principles and values that form part of the Group’s operating processes. If TOTAL is able to build and develop partnerships throughout the world, it is also because it has incorporated a local value creation process into its development model. This process is systematic, professional and a major competitive advantage.

The Group is building a global, integrated local development approach (“in-country value”) that is part of a dialogue with the local populations and public and private players. This approach creates synergies among all the value-creating elements for host countries (employment, subcontracting, infrastructure, support for local industries, socioeconomic development projects, education, access to energy, etc.) by promoting the Group’s industrial know-how. The Group intends to apply this approach over the long term to ensure that its presence in these regions and its major projects create shared prosperity.

In the face of growing inequalities and today’s environmental challenges, TOTAL wanted to strengthen its public interest initiatives and efforts in the development of the regions where it has a long-standing presence. In 2017, it structured its actions within the framework of the Total Foundation program, which covers the citizenship initiatives undertaken by the Group’s subsidiaries and its corporate foundation (Fondation d’entreprise).

Through this program, TOTAL and its corporate foundation intend to contribute to the development of the host regions of the Group by promoting actions in favor of young people. It focuses on four fields of action: the education and integration of young people, road safety, forests and climate and dialogue between cultures and heritage.

At the end of 2018, the Group launched the Action! program engagement that allows its employees to spend up to three days a year of their working time on solidarity projects in favor of the development of its host regions.

 

 

 

(1)

Company data.

 

            

 

 

10   

 

TOTAL   Universal Registration Document 2019


 

Presentation of the Group – Integrated Report

 

Advantages that allow the Group to stand out in a changing energy world

     

 

            

1.3.3

Employees committed to better energy

As of December 31, 2019

 

LOGO

 

1.3.3.1

Employee diversity, a competitive edge

The Group is an image of its employees: diverse. The diversity of talents within TOTAL is crucial to its competitiveness, innovative capacity and attractiveness. Diversity in all its forms is promoted at the highest level, and in particular by the Group Diversity Council, which is chaired by a member of the Executive Committee.

With over 160 nationalities represented, a presence in more than 130 countries, and more than 720 business-related competencies, the Group is a global player. Women make up 35.8% of the workforce and 28.5% of managers. A wide range of opinions and backgrounds enable innovative solutions and new opportunities to arise.

Such diversity is an essential asset for the Group. The capacity of the Group’s employees to mobilize themselves and act in an entrepreneurial spirit is vital. It enables ambitious projects to be completed and offers everyone the opportunity to give meaning to their work and grow professionally. In 2019, more than 3,300 employees engaged in solidarity projects as part of the Action! program.

Diversity is embodied, in particular, by the presence of 23.9% women members on the Management Committees (head office and subsidiaries), 25.5% women members of Management Committees of branches and large functional divisions, 54.8% international members on the Management Committees of the subsidiaries.

The Group has a long-standing commitment to promoting equal opportunity and diversity, which constitute, for everyone, a source of development where only expertise and talent count. In 2018, the Group decided to adhere to the Global Business and Disability Network Charter of the International Labor Organization (ILO) and is gradually implementing these principles in its subsidiaries.

 

1.3.3.2

Employee commitment is essential to the success of the Company project

The Group addresses its challenges thanks to the commitment of its employees. It is for this reason that the Group strives to ensure that the most demanding safety, ethics and integrity, management and social performance practices are implemented wherever it operates. The aim of this process is to create the conditions that enable everyone to fulfill his or her potential and TOTAL to pursue its development.

In order to associate the employees to the major challenges of the Group, the expectations of employees are regularly listened to and discussed. Examples include the Total Survey, which compiles the views and suggestions for improvement of tens of thousands of employees every two years. Initiatives that have allowed employees to participate in building the “One Total” Company project have been initiated since 2016.

In 2019, a new step was taken when the Group launched One Total, Better Together, the human part of its Company project that meets the employees’ expectations and in order to raise the Group’s human ambitions to the same height as its business ambition. This project has three ambitions: to develop the talent of every employee, to promote the coaching dimension of managers and to build a company, where it is a good place to work. All the Group subsidiaries(1) were involved in several deployment projects.

In order to accompany each employee in his or her professional development and provide him or her with dedicated support, more than 400 talent developers were implemented and trained within the Group in 2019. Jobs offers are published within the Group in a transparent manner allowing each employee to be an actor in his or her mobility. TOTAL promotes functional, geographic mobility and lifelong training in order to develop everyone’s skills and employability and meet business challenges.

 

 

“Women and men are at the heart of our collective project. Our employees – in all corners of the planet and thanks to their individual commitment – are the energy that drives our Group forward. This diversity is an invaluable asset that makes it possible to accomplish ambitious projects.”

 

Namita Shah, President, People & Social Responsibility

 

 

 

 

(1)

Excluding Hutchinson and SunPower.

 

 

 1

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  11             


1   

 

Presentation of the Group – Integrated Report

 

Advantages that allow the Group to stand out in a changing energy world

 

            

Thus, in order to improve their expertise, each employee is encouraged to broaden his or her technical competencies by accessing a wide range of training courses (in 2019, 77% of employees within the scope of the WHRS(1) followed at least one course of classroom training). The technical and commercial know-how of employees and their ability to manage large projects underpin the Group’s operational excellence and are essential for the Group’s development. It is thanks to the recognized expertise of its employees that TOTAL is able to form partnerships of trust with the world’s main producing and consuming nations in the most demanding areas, such as deep offshore, liquefied natural gas (LNG), low-carbon energy, refining and petrochemicals, which are also areas in which the Group has developed some of the most high-performance platforms.

In order to support the development of the managerial culture, the training courses for managers have been adapted to encourage engagement, empowerment and constructive feedback.

The Group is also committed to social dialogue, which is one of the vectors used to modernize companies. Among the numerous stakeholders with which TOTAL maintains regular dialogue, the Group’s employees and their representatives have a privileged position and role. The Group’s entities set up systems to meet the specific needs of work organization and ensure, as far as possible, to promote a work-life balance. The Group promotes flexible working hours and voluntary remote working throughout the world.

This approach is illustrated by several commitments made by the Group, such as its adhesion on December 21, 2017, to the Global Deal initiative, alongside some 60 partners, States, trade unions, companies and international organizations. This international multi-party initiative aims at fighting against inequalities, encouraging social dialogue and promoting fairer globalization. It states that social dialogue, collective bargaining and trade-union freedom play an essential role in the fulfillment of the Sustainable Development Goals (SDGs 8, 10 and 17) of the United Nations. Social dialogue also results in the signing of international agreements that are emblematic of the Group’s conviction at the very highest level of decision-making. In 2015, the Group signed a global agreement with the international IndustriALL Global Union trades union federation on the promotion of human rights at work, diversity, the participation of employees and their representatives in social dialogue and the recognition of health and safety at work. Discussions to renew this agreement in 2020 are underway. The Group had 312 active agreements (including 201 in France) with employee representatives in place at the end of 2019.

TOTAL has adopted a proactive approach by subscribing to the principles of numerous national and international agreements that fight against all forms of discrimination and by striving to ensure the safety and security of its employees and the respect of their fundamental rights. This approach testifies to TOTAL’s desire to entrench a continuous improvement process that benefits everyone. For more information, refer to point 5.3 of chapter 5.

 

 

1.3.4

The strength of the Group’s integrated business model

 

Energy markets on which the Group is active, oil, gas and electricity, are traded on markets that are known for their volatility. To manage this constraint as well as possible, TOTAL opted for an integrated business model throughout the value chain. The Group’s activities extend from exploration and production of oil, gas and electricity to the energy distribution to the end customer through refining, liquefaction, petrochemicals, trading, energies transport and storage.

This business model enables the Company to benefit from synergies between different activities and from price volatility. It also enables the Company to manage the bottom of the cycle better and capture margin when the market improves. Thanks to an integrated business model, the Group’s Upstream activities, which are more dependent on the price of oil, can complement its Downstream activities, which – at the bottom of the cycle – enable the Group to benefit from added value untapped by the Upstream part of the business.

 

Furthermore, the growth in demand for electricity is expected to outstrip global demand for energy in the coming years. In light of the digitization of the economy, the mobility revolution, and decentralized generation, many products and services are going to be “electrified” while, at the same time, a growing share of the world’s population will benefit from access to electricity.

Preference is given to three main priorities:

the integration on the gas chain from production to liquefaction and distribution;

the generation of electricity using gas or renewable energies and its storage; and

the trading and the sale of gas or electricity as the producer, or not.

 

 

 

(1)

The Worldwide Human Resources Survey (WHRS) is an annual survey which comprises 211 indicators. Refer to point 5.11.2 of chapter 5.

 

            

 

 

12   

 

TOTAL   Universal Registration Document 2019


 

Presentation of the Group – Integrated Report

 

Advantages that allow the Group to stand out in a changing energy world

     

 

            

LOGO

 

 

 1

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  13             


1   

 

Presentation of the Group – Integrated Report

 

Strong commitments favouring sustainable growth

 

            

1.4

Strong commitments favouring sustainable growth

 

1.4.1

Five strong values at the heart of the Group

 

LOGO

 

Safety, Respect for Each Other, Pioneer Spirit, Stand Together and Performance-Minded represent, just as its history, the part of TOTAL’s identity shared by all employees. These values guide the daily actions and relations of the Group with its stakeholders.

These five strong values also require all of TOTAL’s employees to act in an exemplary manner in priority in the following areas: safety, security,

health, environment, integrity in all of its forms (particularly, the prevention of corruption, fraud and anti-competitive practices) and human rights.

It is through strict adherence to these values and to this course of action that the Group intends to build strong and sustainable growth for itself and for all of its stakeholders, and thereby deliver on its commitment to better energy.

 

 

1.4.2

A Group engaged in R&D, innovation and the digital transformation

 

The Group relies on a dynamic R&D policy to conduct and develop its activities. As part of the Group’s ambition to become the responsible energy major, TOTAL finalized, in 2019, its R&D strategic plan to determine its positioning for the five coming years, together with its portfolio of research programs. The portfolio of programs is divided into five focus areas: safety and environment, low-carbon mix, operational efficiency, new products and, finally, digital.

As appropriate, the R&D programs may be conducted by a business segment in the interests of its own or other segments’ activities, or coordinated at the Group level for transverse issues in order to establish synergies, make the best possible use of the expertise available, and pool knowledge and infrastructures. For example, the purpose of the CCUS (carbon capture, utilization and storage) transverse program is to enable the Group to become a major player in this area and throughout the value chain so that it can contribute to the reduction in global CO2 emissions and prepare new business opportunities. For more information, refer to point 2.7 of chapter 2.

The Group is committed to optimizing R&D resources in terms of human talent, infrastructure and regional centers of excellence, as well as to working with selected partners that bring specific, high- level skills to every project.

Furthermore, after several years of deploying digital projects across all of the Group’s activities and after having built the necessary technological foundations, TOTAL is accelerating its digital transformation by launching the creation of a Digital Factory, which is expected to start in the heart of Paris in the second semester 2020.

The goal is to bring together multidisciplinary teams made up of TOTAL’s business experts and around 300 new talents from all digital domains.

Using all the available data of the Group and relying on technologies such as Artificial Intelligence, the Internet of Things or 5G, these teams will mobilize to build digital solutions, in short cycles and with agility in a flexible manner, to support the Group in various areas: improving industrial operations in terms of availability and cost, new services for TOTAL’s customers aiming to, for example, optimize their energy consumption, development in new decentralized energies and reducing environmental impact.

In addition to the support and strengthening of the innovation efforts in the Group, the ambition is to create up to $1.5 billion in value per year through digital means by 2025.

 

 

1.4.3

A targeted investment policy

 

The oil markets being fundamentally volatile, the Group continues to select its investments very carefully, in line with its strategy. These investments are dedicated to:

the development of new upstream and downstream facilities in order to benefit from the integrated business model in a favorable cost environment;

the adding of attractive resources to the portfolio through the exploration or acquisition of resources that have already been discovered, focusing on low breakeven projects;

strong growth in its low-carbon activities in the gas and electricity sectors; and

the growth of its Marketing & Services business in buoyant markets.

The Group also strives to continuously improve its portfolio by selling its least strategic assets within the framework of its 5 billion dollars asset sale program over the years 2019-2020.

In 2019, net investments reached $17.4 billion of which $13.4 billion in organic investments(1) and $4.1 billion in net acquisitions. For more information, refer to point 2.6 of chapter 2.

 

 

 

(1)

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

 

            

 

 

14   

 

TOTAL   Universal Registration Document 2019


 

Presentation of the Group – Integrated Report

 

Strong commitments favouring sustainable growth

     

 

            

1.4.4

A continuous improvement dynamic

 

The United Nations, whose member States adopted the 17 SDGs in 2015, have called upon corporations’ contribution to collectively find solutions to sustainable development challenges. TOTAL has committed since 2016 to contributing to the SDGs and has structured its approach to responsible development in order to make a more significant contribution to the SDGs.

The Group has identified the most significant SDGs for its activities in order to focus its efforts on the segments in which it is able to make a direct contribution.

 

TOTAL therefore considers the SDGs as an opportunity to better measure and assess its contribution to society as a whole.

The Group builds its CSR approach on the basis of its four pillars of action for sustainable development, namely the integration of the climate in its strategy, the preservation of the environment, respect for and the mobilization of employees and suppliers and its contribution to the economic development of its host regions (also refer to chapter 5).

 

 

TOTAL’s CSR approach in relation to the sustainable development goals

 

LOGO

 

 

INTEGRATING CLIMATE INTO THE STRATEGY

 

         

 

PRESERVING THE ENVIRONMENT

 

         

 

RESPECTING AND MOBILIZING EMPLOYEES SUPPLIERS

 

         

 

CONTRIBUTING TO THE ECONOMIC DEVELOPMENT OF HOST REGIONS

 

LOGO

  Growing in gas (natural gas, biogas and hydrogen)     

 

 

LOGO

   Limiting environmental footprint     

 

LOGO

   Preventing risks related to people’s safety     

 

LOGO

   Fighting corruption and tax evasion

LOGO

 

Developing a profiable low-carbon electricity business

 

    

 

LOGO

  

 

Developing the circular economy

    

 

LOGO

  

 

Respecting human rights and promoting them in the supply chain

    

 

LOGO

  

 

Promoting local socioeconomic development

LOGO

 

Reducing emissions at

TOTAL’s facilities, promoting both sparing of oil use and sustainable biofuels

     

LOGO

  Investing in businesses that will help achieve carbon neutrality     

LOGO

 

  

Manage impacts

to biodiversity

(avoid-reduce-restore-compensate policy)

 

    

LOGO

  

Developing each individual’s talents and promoting diversity

 

    

LOGO

  

Getting involved in host regions notably through Total Foundation

 

TOTAL’s core contributions through its mission

 

LOGO

 

 

    

      

    

 

LOGO

 

 

    

    

 

Direct contributions through a responsible business approach

 

   

    

  

LOGO

 

 

    

  

LOGO

 

 

    

  

LOGO   

 

Indirect contributions

 

   LOGO

 

 

 1

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  15             


1   

 

Presentation of the Group – Integrated Report

 

Strong commitments favouring sustainable growth

 

            

1.4.4.1

Commitments and indicators of progress

Safety, health, climate, the environment and also shared development, in every country where the Group is present, TOTAL steers its operations with the aim of working in a sustainable, active and positive manner. The Group was one of the first in the industry to publish measurable improvement targets in these areas.

 

 

Safety/Health

 

       

For TOTAL, being committed to better energy means, first and foremost, ensuring the safety of its employees, stakeholders and facilities. It also means protecting the health of all those related directly or indirectly to its activities.

  

Safety

 

Target

    

 

To be recognized as a benchmark for safety in its industry and achieve zero fatalities

  

 

 

Facts

     

 

A TRIR(1) of 0.81 in 2019, at majors’ level 4 fatalities in 2019

 
   Health     
  

Target

     

 

Protect the health of employees, customers and communities in close proximity to the Group’s activities

  

Facts

     

 

In 2019, 98% of employees with specific occupational risks benefited from regular medical monitoring(2)

 
       

 

 

Environment

 

       

The Group places the environment at the heart of its ambition of being a responsible company with a goal to improve the environmental performance of the facilities and products.

  

Air

 

Target

     

 

Decrease SO2(3) emissions into the air by 50% between 2010 and 2020

  

 

 

Facts

     

 

More than 50% reduction in SO2 emissions into the air reached since 2017

 
   Water     
  

Target

     

 

Maintain the hydrocarbon content of water discharges below 30 mg/l for offshore sites and below 15 mg/l for onshore and coastal sites

  

Facts

     

 

100% of the Group’s oil sites have met the target for the quality of onshore discharges since 2016

 
     

100% of the Group’s oil sites have met the target for the quality of offshore discharges in 2019

 
   Waste     
  

Target

     

 

Valorize more than 50% of the waste produced by the sites operated by the Group

  

Facts

     

 

More than 50% of the waste produced by the sites operated by the Group was valorized in 2019

 
       

 

Volunteering Program

 

    

In 2018, the Group launched the Group’s Employee Volunteering Program Action! in order to give its employees the time and means to get involved and contribute more to the development of the areas where the Group is present. Action! allows employees, on a voluntary basis, to support, up to three days per year during their working time, local solidarity projects within the scope of the Total Foundation program.

 
       

 

 

 

 

(1)

TRIR (Total Recordable Injury Rate): number of recorded injuries per million hours worked.

(2)

Data provided by the WHRS.

(3)

SO2: sulfur dioxide.

 

            

 

 

16   

 

TOTAL   Universal Registration Document 2019


 

Presentation of the Group – Integrated Report

 

Strong commitments favouring sustainable growth

     

 

            

 

 

Climate

 

     
 

Targets

     

   

Facts

     

 
 

Reduce the GHG emission (Scopes 1 & 2) on operated oil & gas facilities from 46 Mt CO2e in 2015 to less than 40 Mt CO2e in 2025

   

A GHG emission reduction (Scopes 1 & 2) on operated oil & gas facilities from 46 Mt CO2e to 41.5 Mt CO2e between 2015 and 2019

 
 

Reduce the routine flaring(1) by 80% on operated facilities between 2010 and 2020 in order to eliminate it by 2030

   

More than 80% reduction in routine flaring between 2010 and 2019

 
 

Improve by an average of 1% per year the energy efficiency of operated facilities between 2010 and 2020

   

More than 10% improvement in energy efficiency between 2010 and 2019

 
 

Reduce the intensity of the methane emissions of the facilities operated by the Group for its Upstream hydrocarbons activities to below 0.2% of the commercial gas produced

   

An intensity of the methane emissions around 0.2% of the commercial gas produced in 2019

 
 

Maintain the intensity of CO2e emissions of the facilities operated by the Group for its Upstream hydrocarbons activities below 20 kg CO2e/boe

   

An intensity of the CO2e emissions below 20 kg CO2e/boe in 2019

 
 

Ambition

     

   

Facts

     

 
 

Reduce the carbon intensity of the energy products used by customers by 15% between 2015, the date of the Paris agreement, and 2030 and by 40% by 2040

   

A carbon intensity reduced from 75 g CO2 e/kBtu in 2015 to 70 g CO2e/kBtu in 2019, i.e., a reduction of 6%

 
       
       
 

 

Biodiversity

 

     
 

Commitments

     

   

Facts

     

 
 

Not conducting oil and gas exploration or production operations in the area of natural sites listed on the UNESCO World Heritage List(2)

   

No oil and gas exploration or production activity in the area of natural sites listed on the UNESCO World Heritage List(2)

 
 

Not conducting exploration in oil fields under sea ice in the Arctic

   

No exploration activity in oil fields under sea ice in the Arctic

 
 

Systematically develop biodiversity action plans for production sites located in protected areas(3)

   

6 biodiversity action plans deployed or in preparation in 2019

 
       
       
 

 

Diversity/Gender diversity

 

     
 

Targets

     

   

Facts in 2019

     

 
 

25% women senior executives by 2020

   

23.0% women senior executives

 
 

40% non-French senior executives by 2020

   

34.1% non-French senior executives

 
 

More than 20% women members on the Management Committees (head office and subsidiaries)

   

23.9% women members on the Management Committees (head office and subsidiaries)

 
 

More than 20% women members on Management Committees of branches and in large functional divisions

 

   

25.5% of women members on Management Committees of branches and in large functional divisions

 

 

 

 

 

 

 

 

(1)

Routine flaring, as defined by the working group of the Global Gas Flaring Reduction program within the framework of the World Bank’s Zero Routine Flaring initiative.

(2)

Natural sites included on the UNESCO World Heritage List of December 31, 2018.

(3)

Sites located in an IUCN I to IV or Ramsar convention protected area.

 

 

 1

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  17             


1   

 

Presentation of the Group – Integrated Report

 

Strong commitments favouring sustainable growth

 

            

1.4.4.2

Support for global initiatives

Aside from complying with national regulations in force in every country where the Group operates, TOTAL reiterates each year, since 2002, its support for the United Nations Global Compact, of which it is one of the companies recognized as LEAD. The Group also follows the UN Guiding Principles for Business and Human Rights since their adoption in 2011.

The challenges posed by climate change require a collective effort. The Group has joined various international initiatives that involve the private and the public sectors, notably:

carbon pricing (the World Bank’s Carbon Pricing Leadership Coalition, Caring for Climate – United Nations Global Compact, Paying for Carbon call: TOTAL and five other industry leaders);

the end of routine flaring of associated gas (the World Bank’s Zero Routine Flaring by 2030 initiative);

control over methane emissions (Oil & Gas Methane Partnership of the Climate and Clean Air Coalition, the Oil & Gas Climate Initiative in cooperation with UN Environment and EDF, etc.);

greater transparency: support of the recommendations from the G20 Financial Stability Board Task Force on Climate-related Financial Disclosures (TCFD).

TOTAL also actively supports collaborative and multi-stakeholder initiatives in areas in which the coordinated involvement of governments, companies and civil society is key to global progress, particularly:

financial transparency: the Group has adhered to the Extractive Industries Transparency Initiative (EITI) since its launch in 2002;

responsible tax principles: the Group publicly supports the B-Team’s responsible tax principles;

the fight against corruption: TOTAL joined the Partnering Against Corruption Initiative (PACI) in 2016, and the Chairman and Chief Executive Officer has been co-chairman since the end of 2019;

the challenge of security and respect for human rights by being a member of the Voluntary Principles on Security and Human Rights (VPSHR) since 2012;

diversity: TOTAL signed in 2010 the “Women’s Empowerment Principles – Equality Means Business” set out by the United Nations Global Compact, in 2016 Close the gender gap – a call to action in World Economic Forum, and, in 2018, the pledge for diversity as part of the European Roundtable of Industrialists;

disability: in October 2018, TOTAL signed the International Labor Organization (ILO) Global Business and Disability Network Charter. In January 2020, TOTAL joined The Valuable 500, a global initiative aiming at explicitly putting the inclusion of people with disabilities and the unlocking of their potential in the agenda of multinational companies;

biodiversity: in 2018, TOTAL joined the Act4Nature initiative and made commitments to protect biodiversity;

the circular economy: TOTAL is a founding member of the Alliance to End Plastic Waste, launched in 2019, which brings together companies in the plastics and consumer goods value chain to provide solutions for the disposal of plastic waste in the environment, especially in oceans, and to promote their recycling in a circular economy;

better access to energy for populations of emerging countries through a partnership with SE4All;

the reduction of inequalities through the development of social dialogue to favor more inclusive economic growth: TOTAL was one of the first French companies to adhere to the Global Deal initiative at the end of 2017.

 

 

1.5

Governance and an organizational structure to support the Group’s ambition

 

The Board of Directors has decided to submit to the Annual Shareholders’ Meeting on May 29, 2020 a project to transform TOTAL S.A. into a European company (Societas Europaea or SE). The legal status of a European company is common to all the countries in the European Union and is used by an increasing number of companies in France and in Europe. This status will better reflect the economic and social reality of the Group and fully recognize its European dimension. The Group has a strong European presence, with activities in 25 European countries, representing more than 60% of its employees and more than 70% of the Group’s sales.

 

The conversion of TOTAL S.A. into a European company will have no impact on its governance, activities, tax affairs, the organization of the Company, where it is listed or the location of the head office, which will remain in France. The Company bylaws that are amended as a result of this conversion project, which will be submitted to the Shareholders’ Meeting on May 29, 2020, will also include various adaptations, related in particular to the French law n°2019-486 of May 22, 2019 on the growth and the transformation of businesses, known as the “Pacte” law, particularly with regard to the participation of employees in the Company’s Board of Directors.

 

 

            

 

 

18   

 

TOTAL   Universal Registration Document 2019


 

Presentation of the Group – Integrated Report

 

Governance and an organizational structure to support the Group’s ambition

     

 

            

1.5.1

A Board of Directors fully committed to the Company’s strategic orientations

Composition on March 18, 2020

 

LOGO

 

(a)

Excluding the director representing employee shareholders and the director representing employees, in accordance with the recommendations of the AFEP-MEDEF Code (point 9.3). For more information, refer to point 4.1.1.4 of chapter 4.

(b)

Excluding the director representing employees, in accordance with Article L. 225-27-1 of the French Commercial Code and the director representing employee shareholders, in accordance with article L. 225-23 of the French Commercial Code.

 

Composed as of March 18, 2020, of 12 directors, including 9 independent members, the Board of Directors reflects diversity and complementarity of experience, expertise, nationalities and cultures necessary to take account of the interests of all the Group’s shareholders and stakeholders.

The Board of Directors determines the strategic orientations of TOTAL and supervises their implementation. It approves investment and divestment operations when they concern amounts that exceed 3% of the Group’s equity and examines all matters related to the proper running of the Company. It examines major operations that reflect the inclusion of climate challenges in TOTAL’s strategy and verifies their strategic coherence. It monitors the management of both financial and non-financial matters and ensures the quality of information provided to shareholders and to financial markets.

The Board of Directors relies on the work of four Committees that it has constituted: the Audit Committee, the Governance and Ethics Committee, the Compensation Committee and the Strategy & CSR Committee.

Since December 2015, Mr. Patrick Pouyanné has held the position of Chairman and Chief Executive Officer of TOTAL S.A. His term of office having been renewed at the Annual Shareholders’ Meeting on June 1, 2018 for a three-year period, the Board of Directors has reappointed Mr. Pouyanné as Chairman and Chief Executive Officer for an equal period to that of his mandate as a director. The decision to uphold the combined functions of Chairman of the Board of Directors and Chief Executive Officer was made following work undertaken by the Governance and Ethics Committee, in the interest of the Company and in compliance with the traditions of the Group. The Board of Directors deemed that the 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 of having unified management in strategic negotiations with States and the Group’s partners. The Board of Directors regularly examines whether maintaining the unified Management Form remains appropriate.

Attentive to the concerns of investors and stakeholders, the Board of Directors pays specific attention to the balance of power within the Group. It was for these reasons that the Board of Directors amended the provisions of its Rules of Procedure in 2015 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. 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 of Directors. Since 2016, the Lead Independent Director has organized executive sessions with the independent directors so that they may discuss the Group’s strategic challenges and working practices. The directors are also in regular contact with the members of the Group’s management team, whether members of the Executive Committee during Board Meetings or operational managers during Group site visits. These interactions between directors and managers enable the directors to gain a practical understanding of the Group’s activities.

The balance of power within the Company’s bodies is thereby ensured by a stable and structured governance.

 

Activities of the Board of Directors and of the Committees in 2019

The duties and work of the Board of Directors and of its Committees are described in point 4.1.2 of chapter 4.

 

LOGO

 

 

 1

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  19             


1   

 

Presentation of the Group – Integrated Report

 

Governance and an organizational structure to support the Group’s ambition

 

            

1.5.2

TOTAL S.A., parent company of the Group and its subsidiaries

 

TOTAL S.A. is the Group’s parent company. It acts as a holding company and drives the Group’s strategy.

The Group’s operations are conducted through subsidiaries that are directly or indirectly owned by TOTAL S.A. and through stakes in joint-ventures which are not necessarily controlled by TOTAL. TOTAL S.A. has three secondary establishments in France, located in Lacq, Pau and Paris. It also has branch offices in the United Arab Emirates and Oman.

 

Corporate name: Total S.A.

Head office: 2, place Jean Millier, La Défense 6, 92400 Courbevoie, France

Listed in the Nanterre Trade and Companies Register under no. 542 051 180

LEI (Legal Entity Identifier): 529900S21EQ1BO4ESM68

EC Registration Number: FR 59 542 051 180

Date of incorporation: March 28, 1924

Term of the Company: extended for 99 years from March 22, 2000

Fiscal year: from January 1 to December 31 of each year

APE Code (NAF): 7010Z

total.com(1)

The scope of consolidation of TOTAL S.A. as of December 31, 2019, consisted of 1,134 companies, of which 994 fully consolidated companies or companies whose assets are jointly controlled and 140 equity companies. The principles of consolidation are described in Note

1.1 to the Consolidated Financial Statements and the list of companies included in the scope of consolidation can be found in Note 18 to the Consolidated Financial Statements (refer to point 8.7 of chapter 8).

[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]

TOTAL holds stakes in a limited number of companies that issue financial instruments in France or abroad or whose financial instruments are listed in France or abroad. These companies are mainly the Group’s financing vehicles (Total Capital, Total Capital International, Total Capital Canada Ltd) or the operational subsidiaries in its business segments, in particular in Africa, such as Total Gabon(2).

TOTAL also holds a stake in SunPower (46.74% on December 31, 2019), an American company listed on NASDAQ, and minority interests in other companies, including PAO Novatek (19.4% on December 31, 2019), a Russian company listed on the Moscow Interbank Currency Exchange and the London Stock Exchange.

The changes in the composition of the Group during fiscal year 2019 are explained in Note 2 to the Consolidated Financial Statements (refer to point 8.7 of chapter 8). In 2019, TOTAL S.A., the Group’s parent company, acquired 5.8% of Total Eren, shares increasing its shareholding up to 29.6%. TOTAL S.A. has not taken any other stake in companies with their registered office in France representing more than one twentieth, one tenth, one fifth, one third or one half of the capital of these companies or has not obtained control of such companies.

 

 

1.5.3

An operational structure

 

As of December 31, 2019, the Group’s organization was centered around four business segments:

an Exploration & Production segment encompassing the oil and natural gas exploration and production activities in more than 50 countries. The LNG upstream and midstream activities, which previously reported to the Exploration & Production segment, now report to the Integrated Gas, Renewables & Power segment;

an Integrated Gas, Renewables & Power segment comprising the integrated gas (including the LNG) and the low-carbon electricity businesses. It includes all LNG upstream and midstream activities which previously reported to the Exploration & Production segment;

a Refining & Chemicals segment constituting a large industrial hub comprising refining, petrochemical activities and specialty chemicals. This segment also includes oil Supply, Trading and Shipping activities;

a Marketing & Services segment including the global activities of supply and marketing in the field of petroleum products.

In order to improve efficiency, reduce costs and create value within the Group, a specific branch, Total Global Services (TGS), pools the various segments’ support services (Accounting, Purchasing,

 

Information Systems, Training, Human Resources Administration and Facilities Management). The entities that make up TGS operate as service companies for internal clients across the business segments and Holding.

Finally, the various Corporate entities are mainly grouped into two divisions:

the People & Social Responsibility division consists of: the Human Resources division, 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 Civil Society Engagement Division;

the Strategy-Innovation division is made of: the Strategy & Climate division (responsible notably for ensuring that climate is incorporated in the strategy), the Public Affairs division, the Audit & Internal Control division, the Research & Development division (which coordinates all of the Group’s R&D activities and notably transversal programs), the Technology Experts division and the Digital division.

 

 

 

 

(1)

Information on TOTAL’s website does not form part of the Universal Registration Document unless that information is incorporated by reference into the Universal Registration Document.

(2)

Total Gabon is a company under Gabonese law, listed on Euronext Paris. TOTAL holds 58.28%, the Republic of Gabon holds 25% and the public holds 16.72%.

 

            

 

 

20   

 

TOTAL   Universal Registration Document 2019


 

Presentation of the Group – Integrated Report

 

Governance and an organizational structure to support the Group’s ambition

     

 

            

Organization chart as of December 31, 2019

 

LOGO

 

 

 1

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  21             


         

 

            

2

Business overview

for fiscal year 2019

 

2.1   Integrated Gas, Renewables & Power segment      32  

 

 
2.1.1   Presentation of the segment      33  
2.1.2   LNG      33  
2.1.3   Production and storage of low-carbon electricity      36  
2.1.4   Natural gas and electricity marketing and trading      38  
2.1.5   Trading (excluding LNG, gas and electricity) and transport      39  
2.1.6   Carbon Neutrality Businesses      39  
2.2   Exploration & Production segment      40  

 

 
2.2.1   Presentation of the segment      41  
2.2.2   Activities by geographical area      41  
2.3   Upstream hydrocarbons activities      47  

 

 
2.3.1   Hydrocarbons reserves      49  
2.3.2   Exploration      50  
2.3.3   Hydrocarbon production      50  
2.3.4   Delivery commitments      55  
2.3.5   Contractual framework of Upstream hydrocarbons production activities      56  
2.3.6   Oil and gas acreage      56  
2.3.7   Productive wells      57  
2.3.8   Net productive and dry wells drilled      57  
2.3.9   Wells in the process of being drilled
(including wells temporarily suspended)
     58  
2.3.10   Interests in pipelines      59  
2.4   Refining & Chemicals segment      60  

 

 
2.4.1   Refining & Chemicals      61  
2.4.2   Trading & Shipping      65  
2.5   Marketing & Services segment      67  

 

 
2.5.1   Presentation of the segment      68  
2.5.2   Sales of petroleum products      69  
2.5.3   Service stations breakdown      69  
2.5.4   Activities by geographical area      69  
2.5.5   Products and services development      72  
2.6   Investments      74  

 

 
2.6.1   Major investments over the 2017-2019 period      74  
2.6.2   Major planned investments      75  
2.6.3   Financing mechanisms      75  
2.7   Research & Development      76  

 

 
2.7.1   Safety and Environment      76  
2.7.2   Low-carbon mix      77  
2.7.3   Operational efficiency      78  
2.7.4   New products      78  
2.7.5   Digital      79  
2.7.6   Material and integrated solutions for mobility: Hutchinson      79  
 

 

 

     

 

 

 

 2

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  31             


2   

 

Business overview for fiscal year 2019

 

Integrated Gas, Renewables & Power segment

 

            

2.1 Integrated Gas, Renewables
& Power segment

  LOGO         

TOTAL invests in the new energy growing markets for a sustainable future. Implemented on January 1, 2019, the Integrated Gas, Renewables & Power (iGRP) segment is driving the Group’s ambition in the activities of the integrated LNG and low-carbon electricity chains, as well as the activities that contribute to carbon neutrality. The execution of a profitable growth strategy in the future low-carbon businesses is helping to achieve the Group’s ambition of reducing the carbon intensity of the energy products used by its customers by 15% between 2015 and 2030.

 

    

 

LOGO

Hydrocarbon production and LNG sales

 

Hydrocarbon production    2019     2018      2017  
IGRP (kboe/d)      560       381        401  

Liquids (kb/d)

     71       39        48  

Gas (Mcf/d)

     2,711        1,875        1,934  
LNG (Mt)    2019     2018      2017  
Overall LNG sales      34.3       21.8        15.6  

Including sales from equity production(a)

     16.3       11.1        11.2  

Including sales by TOTAL from equity production and third party purchases

             27.9               17.1                7.6    

 

(a)

The Group’s equity production may be sold by TOTAL or by the joint-ventures.

Production growth over the year was essentially linked to the start-up of Ichthys in Australia in the third quarter 2018 and the successive start-ups of Yamal LNG trains in Russia.

LNG sales increased by 57% in 2019 thanks to the ramp-up of Yamal LNG and Ichthys plus the start-up of the first Cameron LNG train in the United States and also due to the acquisition of the Engie portfolio of LNG contracts in the third quarter 2018.

Installed gross capacity of electric generation

 

(GW)    2019     2018      2017  
Solar      1.6       1.0        0.6  
Wind      1.3       0.7        0.2  
Biogas and et hydroelectricity      0.1       0.0        0.0  
Total      3.0       1.7        0.8  
Combined-cycle gas power plants – Europe(a)      1.9       1.9        0.3  
Combined-cycle gas power plants – Rest of the world (Taweelah, UAE)              1.6                 1.6                1.6    

 

(a)

Including Normandy refinery cogeneration unit, part of Refining & Chemicals.

 

 

(1)

DACF = debt adjusted cash flow. The operating cash flow before working capital changes w/o financial charges of the segment is defined as cash flow from operating activities before changes in working capital at replacement cost, without financial charges except those related to leases.

(2)

Including Normandy Refinery cogeneration unit, part of Refining & Chemical segment.

 

            

 

 

32   

 

TOTAL   Universal Registration Document 2019


 

Business overview for fiscal year 2019

 

Integrated Gas, Renewables & Power segment

     

 

            

[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]

 

2.1.1

Presentation of the segment

 

TOTAL integrates the challenges of climate change in its strategy and anticipates the new trends in the energy market. By doing so, the Group strengthens its development on the integrated natural gas and low-carbon electricity value chains, from generation to distribution and deploys a profitable growth strategy in low-carbon activities of the future.

In LNG activities, the strategy aims to consolidate second worldwide position obtained following the acquisition of Engie’s LNG assets in 2018. This acquisition strengthened TOTAL’s positions in the production of LNG, increased the number of long-term purchase and sales agreements, its regasification capacities, in particular in Europe, and at the end, added a fleet of LNG ships, thereby offering more flexibility to its portfolio. TOTAL will also take benefit from an increase of its purchases from projects the Group is a shareholder, especially in the United States (Cameron), and on the longer term in Russia Arctic 2 LNG) and in Mozambique. In 2019, in order to support its ambition, TOTAL increased its LNG activity in the United States through the take-over of a 2Mt/y LNG portfolio from Toshiba and announced the acquisition of 37.4% of Adani Gas Limited, one of the leading local distributors of natural gas in India.

In low-carbon electricity activities, TOTAL is implementing a differentiated geographic strategy and is expanding along the whole value chain of electricity. In Europe, its strategy relies on the building of an integrated position in low-carbon electricity (based on generated from gas and renewables), being active from the production to marketing activities. In this frame, TOTAL acquired from KKR-Energas two combined-cycle natural gas power plants in France, located in Pont sur Sambre and Toul. In December 2018,

TOTAL and EPH also signed an agreement, subject to authorization by the competent authorities, allowing TOTAL to acquire in 2020 two combined cycle gas plants in France. In Europe, the Group relies on its subsidiaries Total Quadran, Total Solar International and Total Solar Distributed Generation and on its shareholding in Total Eren to increase renewable capacities of power generation (solar and onshore wind).

Outside Europe, TOTAL pursues the development of its renewable capacities of power generation via its subsidiaries (Total Solar International, Total Solar Distributed Generation) or its shareholdings in companies Total Eren and SunPower (United-States).

TOTAL is also committed, via its subsidiary Saft Groupe, to expand its capacities in stationary electricity storage in order to support the growth in renewable energies, intermittent per se (solar and wind).

TOTAL is also present in the marketing of electricity and natural gas in Europe, the trading of electricity and natural gas as well as trading of liquefied petroleum gas (LPG), petcoke and sulphur.

Finally, TOTAL develops technological solutions and commercial offers that contribute to carbon neutrality. On the one hand, the Group, through its Greenflex subsidiary, proposes to its customers services to reduce their environmental footprint by optimising and decreasing their energy consumption. On the other hand, it invests in projects to capture, store or use CO2, and in natural solutions to capture carbon.

 

 

2.1.2

LNG

 

As a pioneer in the LNG industry, TOTAL, thanks to solid and diversified positions, is one of the world’s leading players(2) in the global LNG market. The development of an integrated value chain is a key component of the Group’s strategy: TOTAL has strengthened its presence from upstream activities, thanks mainly to its shareholdings in liquefaction plants located in the major production areas, until the distribution to end customers, through midstream activities, such as transport, regasification and trading.

Additionally, the Group is entering new LNG markets by developing Floating Storage and Regasification Unit projects (FSRU) in emerging countries, like in Benin, where an agreement was signed in July 2019.

 

2.1.2.1

Production and liquefaction of LNG by the Group

GNL sold by the Group across worldwide markets partly comes from shares of LNG production held either in natural deposits of gas and condensates, either in liquefaction plants of which the Group is shareholder. The Group also sells LNG through contracts without equity (refer to 2.1.2.2 of this chapter).

In 2019, the ramp-up of the Ichthys plant in Australia and the Yamal LNG plant in Russia, plus the start-up of the Cameron LNG plant in the United States, enabled continual growth in the Group’s production of LNG. The share of LNG production was 16.3 Mt in 2019, compared to 11.1 Mt in 2018 and 11.2 Mt in 2017. This growth of LNG production is expected to continue over the coming years, thanks to the Group’s liquefaction projects under construction (United States, Russia, Nigeria and Mozambique), or by projects currently under study (Papua New Guinea, Russia, Oman, Mexico and the United States).

The information below describes the main exploration, production and liquefaction activities of the iGRP segment, presented by geographical area. The capacities referred to herein are expressed on a 100% basis, regardless of the Group’s interest in the asset.

 

 

 

(1)

The data for the 2017 and 2018 financial years have been restated to take into account the change in the organization of the Group that has been fully effective since January 1, 2019.

(2)

Public data on the basis of LNG portfolio upstream and downstream in 2019.

 

 

     

 

 

 

 2

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  33             


2   

 

Business overview for fiscal year 2019

 

Integrated Gas, Renewables & Power segment

 

            

Europe and Central Asia

In Russia, the Group’s LNG production has come from the Yamal LNG project since the end of 2017.

In 2013, OAO Yamal LNG launched this project to develop the onshore field of South Tambey (gas and condensates) located on the Yamal peninsula and to build a three-train gas liquefaction plant with a total LNG capacity of 16.5 Mt/y. The Yamal LNG project’s financing was finalized in 2016 in compliance with applicable regulations. At the end of 2017, the Yamal LNG plant started production with the first shipment aboard “Christophe de Margerie” LNG tanker. The second liquefaction train of the plant, with a capacity of 5.5 Mt/y, produced its first shipment of LNG in August 2018. The third liquefaction train started production in November 2018, more than one year ahead of the schedule planned when the project was launched. A fourth liquefaction train with a capacity of 0.9 Mt/y, using PAO Novatek technology, is under construction and is expected to start in the second quarter of 2020.

TOTAL holds an aggregate interest of 29.73% in Yamal LNG project (20.02% directly and 9.71% indirectly through PAO Novatek).

In March 2019, TOTAL acquired a 10% direct interest in the Arctic LNG 2 project. TOTAL and its partners approved the final investment decision for Arctic LNG 2 project in September 2019. With a production capacity of 19.8 Mt/y, the Arctic LNG 2 project will develop the resources of the Utrenneye onshore field (gas and condensates) located on the Gydan Peninsula which faces the Yamal Peninsula. It involves the installation of three gravity-based structures in the Ob Bay that will host the three liquefaction trains of 6.6 Mt/y capacity each. The first shipment of LNG is expected in 2023. The project is also expected to benefit from synergies with the Yamal LNG project. TOTAL has an aggregate interest in Arctic LNG 2, directly (10%) and indirectly (11.64%) through its shareholding in PAO Novatek. The agreement in May 2018 between TOTAL and PAO Novatek also enables TOTAL to acquire a direct shareholding of between 10% and 15% in all future PAO Novatek LNG projects on the Yamal and Gydan peninsulas.

In Norway, the Group holds an 18.40% interest in the gas liquefaction plant of Snøhvit (capacity of 4.2 Mt/y). The plant, located in the Barents Sea, is supplied with production from the Snøhvit and Albatross gas fields.

Africa (excluding North Africa)

In Nigeria, TOTAL holds a 15% shareholding in Nigeria LNG (NLNG), whose main asset is a liquefaction plant with a total capacity of 22 Mt/y. NLNG shareholders approved at the end of 2019 the launch of a plant extension project for an additional capacity of around 7 Mt/y, construction which should start in 2020, subject to discussions in progress with the Nigerian National Petroleum Corp (NNPC) on the stabilization of the fiscal framework and after the closing of the project financing. TOTAL is also present on the onshore field OML 58 (40%, operator), as part of the joint-venture with the Nigerian National Petroleum Corporation (NNPC). It has been supplying gas to NLNG and in the domestic Nigerian market since 2016.

In Angola, TOTAL holds a 13.6% shareholding in the Angola LNG project, which includes a gas liquefaction plant with a total capacity of

5.2 Mt/y near Soyo and supplied by gas associated with production from Blocks 0, 14, 15, 17, 18 and 32.

In Mozambique, in September 2019, TOTAL acquired from Occidental Petroleum Corporation, a company that hold 26.5% shareholding in the Mozambique LNG project previously held by Anadarko, for which the final investment decision was taken in June 2019. The project plans to liquefy the gas produced by the Golfinho and Atum fields in Offshore Area 1 by building two onshore liquefaction trains with a total capacity of 12.9 Mt/y.

The sale of nearly 90% of the output of Mozambique LNG has been secured by long-term contracts for delivery to customers in Asia and Europe. Part of the gas is expected to be kept for the domestic market in order to contribute to the country’s economic development.

Middle East and North Africa

In Qatar, the Group participates in the production, processing and exporting of gas from the North Field through its interest in the Qatargas 1 and Qatargas 2 LNG plants:

 

Qatargas 1: TOTAL holds a 20% interest in the North Field-Qatargas 1 Upstream field and a 10% interest in the LNG plant (three trains with a total capacity of 10 Mt/y); and

 

Qatargas 2: the Group holds a 16.7% interest in train 5, which has an LNG production capacity of 8 Mt/y.

TOTAL offtakes part of the LNG produced in accordance with the 2006 contracts, which provides for the purchase of 5.2 Mt/y of LNG by the Group.

In Oman, in 2018, TOTAL signed an MOU with the Oman government for the development of, on the one hand, natural gas resources on the onshore Blocks 10 and 11, located in the Greater Barik area (25%), on the other hand, and the development of an LNG plant in the port of Sohar, with an initial production capacity of 1 Mt/y (80%, operator). This plant will supply LNG ship bunkers.

The Group also produces LNG through its investments in the Oman LNG (5.54%)/Qalhat LNG (2.04%) through Oman LNG liquefaction complex, with an overall capacity of 10.5 Mt/y.

In the United Arab Emirates, TOTAL holds 5% (capacity of 5.8 Mt/y) ADNOC LNG, which processes the associated gas produced by ADNOC Offshore 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 ADNOC LNG.

In Egypt, TOTAL holds a 5% shareholding in the first train (capacity of 3.6 Mt/y) in the Idku plant of Egyptian LNG’s liquefaction project.

In Yemen, the deterioration of security conditions in the vicinity of the Balhaf site caused the company Yemen LNG, in which the Group holds a shareholding 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. For more information, refer to point 3.2 of chapter 3.

Americas

In the United States, the LNG production of train 1 (4.5 Mt/y) of the Cameron LNG plant in Louisiana, in which the Group holds a 16.60% shareholding, started in May 2019. The first phase of the Cameron LNG plant, which has a capacity of 13.5 Mt/y, comprises three liquefaction trains, each with a capacity of 4.5 Mt/y. Trains 2 and 3 are under construction and are expected to start up in 2020. TOTAL is continuing to evaluate the expansion of the plant beyond its initial capacity of 13.5 Mt/y.

In July 2019, TOTAL signed several agreements in order to develop the Driftwood LNG project in Louisiana, which are conditioned by the final investment decision of the project. In the event of a final investment decision, TOTAL is expected to invest $500 million in the Driftwood LNG project (capacity of 16.6 Mt/y), purchase 1 Mt/y of LNG from Driftwood LNG and 1.5 Mt/y of LNG from Tellurian Inc., and subscribe $200 million of additional shares of Tellurian Inc. TOTAL is therefore expected to increase its shareholding in the capital of this company, of which it held 18.22% on December 31, 2019.

In shale gas, thanks to its ability to control costs, TOTAL achieved satisfactory results from its assets operated on Barnett (90.92%), despite unfavorable gas prices.

In Mexico, TOTAL is continuing its discussions with Sempra Energy in order to participate in the Costa Azul project so as to takeoff 0.8 Mt/y of LNG.

 

 

            

 

 

34   

 

TOTAL   Universal Registration Document 2019


 

Business overview for fiscal year 2019

 

Integrated Gas, Renewables & Power segment

     

 

            

Asia Pacific

In Australia, LNG production comes from the Gladstone LNG (GLNG) (27.5%) project and Ichthys LNG (26%) project.

The Ichthys LNG project involves the development of a gas and condensate field located in the Browse Basin. This development includes subsea wells connected to a platform for the production, processing and export of gas, a FPSO for processing and exporting the condensate, an 889 km gas pipeline and an onshore liquefaction plant in Darwin. At full capacity, the two trains of the gas liquefaction plant produce 8.9 Mt/y of LNG. Approximately 100,000 boe/d of offshore and onshore condensates and LPG are produced. Ichthys LNG started offshore production in July 2018 and exported its first LNG shipment in October 2018. Ichthys LNG has now reached its production plateau. The LNG is sold, mainly in the Asian market, under long-term contracts.

GLNG is an integrated project with production from the Fairview, Roma, Scotia and Arcadia fields, transportation to, and liquefaction capacity of 8.8 Mt/y located on Curtis Island, Queensland. The plant’s two trains are in production respectively since 2015 and 2016.

In Indonésia, following the expiry of the Mahakam license and the transfer of the associated activities to Pertamina (operator) on January 1, 2018, production has come from the Ruby gas field on the Sebuku license (15%), and is transported by a gas pipeline to the Senipah terminal for treatment and separation.

In Papua New Guinea, the Group owns a shareholding in Block PRL-15 (40.1%, operator since 2015). The State of Papua New Guinea retains the right to take a shareholding in the license (when the final investment decision is made) at a level of 22.5%. In this case, TOTAL’s shareholding would be reduced to 31.1%.

Block PRL-15 includes the two discoveries Elk and Antelope. The appraisal program of these discoveries was completed in 2017 and the results of the wells drilled confirmed the resource levels of the fields.

In 2019, development studies at conceptual stage and preparatory activities continued in the Elk and Antelope fields located on the block PRL-15. The gas produced by these fields will be transported by a 320 km onshore/offshore pipeline to the PNG LNG site, where it will be liquefied in two new trains to be constructed, with a total capacity of 5.4 Mt/y integrated to the existing producing facilities operated by a partner in the project.

TOTAL and its partners have signed an agreement with the independent State of Papua New Guinea defining the fiscal framework for the development of the Papua LNG project in April 2019.

 

2.1.2.2

Intermediate activities: purchasing, sale, trading and transport of LNG

Purchasing, sale and trading of LNG

The Group’s LNG trading activities are growing with the management and the optimization of a portfolio of long-term contracts and spot activity.

TOTAL acquires long-term volumes of LNG, mainly from liquefaction projects in which the Group holds an interest (refer to point 2.1.2.1 of this chapter). New LNG sources notably arising from, the acquisition of Engie’s LNG assets in the United States and new sanctioned project (Arctic LNG 2, Nigeria LNG Train 7, Mozambique LNG) are expected to ensure the growth of the Group’s LNG portfolio in the coming years.

In addition, TOTAL also acquires long-term LNG volumes from American projects in which the Group has no equity (Sabine Pass, Corpus Christi, Cove Point and Freeport). These volumes supply and diversify its worldwide portfolio of LNG resources. TOTAL has strengthened its LNG activity in the United States through the take-over of Toshiba’s LNG portfolio in 2019. Consequently, TOTAL is expected to become the leading exporter of American LNG by 2021.

In 2019, TOTAL purchased 297 shipments under long-term contracts from Algeria, Australia, Egypt, the United States, Nigeria, Norway, Qatar and Russia and 186 spot or medium-term shipments, compared with 173 and 97 in 2018, and 59 and 49 in 2017 respectively. Deliveries from Yemen LNG have been halted since 2015.

TOTAL holds several significant contracts for the long-term sale of LNG including to Chile, China, South Korea, Indonesia, Japan, Panama, the Dominican Republic, Singapore and Taiwan. Additionally, the Group is developing LNG retail sales (by barge, tanker trucks) for industrial use or mobility (marine, waterways or road) in Europe, in the Caribbean in partnership with AES, and in Oman through the Sohar project (refer to point 2.1.2.1 of this chapter).

The Group’s LNG trading activities are especially growing activity in the spot market. In 2019, these LNG trading activities represented a volume of 28.7 Mt, compared with 17.1 Mt in 2018 and 7.6 Mt in 2017. This increase is due to the acquisition of Engie’s portfolio of LNG activities, finalized in 2018.

The portfolio focuses, in particular, on Asian markets (including China, South Korea, India, Indonesia, Japan and Taiwan) and is made up of spot and long-term contracts that enable TOTAL to supply gas to its key customers worldwide, while keeping sufficient flexibility to seize market opportunities.

In September 2019, the trading teams were located in Geneva, Houston and Singapore.

LNG shipping

As part of its LNG shipping activities, TOTAL uses a fleet of 15 LNG vessels. To support the strong growth of the Group’s LNG portfolio, seven additional new LNG vessels will be added to the chartered fleet by 2021. In addition to the long-term fleet, each year, TOTAL may also charter vessels on a spot and short-term basis to meet trading needs and to adapt its shipping capacity to seasonal demand.

TOTAL is also present in LNG shipping through its Total E&P Norge subsidiary, which charters two LNG vessels, and through the Group’s shareholdings in LNG production and export projects that operate their own fleets of LNG vessels, such as Nigeria LNG, Angola LNG, Qatargas and Yamal LNG.

 

2.1.2.3

LNG regasification

TOTAL holds shareholdings in regasification assets, or has entered into agreements that provide long-term access to LNG regasification capacity worldwide, through existing assets or projects under development in Europe (France,the United Kingdom, Belgium and the Netherlands), the Americas (United States and Panama), Asia (India) and Africa (Benin, Côte d’Ivoire). TOTAL also charters two FSRUs. In 2019, TOTAL holds an LNG regasification capacity of 28 Bcm/y, of which 20 Bcm/y comes from the acquisition of Engie’s LNG activities in 2018.

In France, TOTAL sold its 27.5% interest in Fosmax LNG company in February 2020. This disposal does not affect the capacity booking contract which provides TOTAL with a regasification capacity of 7.4 Bcm/y on this terminal. The terminal received 70 vessels in 2019, compared with 65 in 2018 and 55 in 2017. In 2018, TOTAL sold its 9.99% shareholding in the Dunkirk LNG terminal, with a capacity of 13 Bcm/y, but retained an access to a regasification capacity of 2 Bcm/y in 2019 on this terminal. TOTAL also holds a regasification capacity up to 3.8 Bcm/y on the Montoir de Bretagne terminal and 3 Bcm/y on the Fos Tonkin terminal.

 

 

 

     

 

 

 

 2

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  35             


2   

 

Business overview for fiscal year 2019

 

Integrated Gas, Renewables & Power segment

 

            

 

In the United Kingdom, in the context of its equity interest in the Qatargas 2 project, TOTAL holds an 8.35% shareholding in the South Hook LNG regasification terminal, with a total capacity of 21 Bcm/y. The Group also holds a regasification capacity of 3.2 Bcm/y on the Isle of Grain terminal.

In Belgium, TOTAL holds a regasification capacity of 1.9 Bcm/y on the Zeebrugge terminal.

In the Netherlands, TOTAL holds a regasification capacity of 1.1 Bcm/y reserved up to 2024 on the Gate terminal.

In the United States, TOTAL has reserved a regasification capacity of approximately 10 Bcm/y on the Sabine Pass terminal (Louisiana) until 2029. In 2012, TOTAL and Sabine Pass Liquefaction (SPL) signed agreements allowing TOTAL’s reserved regasification capacity to gradually be transferred by TOTAL to SPL in return for a payment.

In India, TOTAL disposed of its 26% shareholding in the Hazira terminal in January 2019. Additionally, in 2018, TOTAL and Adani Group signed an agreement on the development of two LNG import and regasification terminals, including Dhamra LNG in eastern India and, potentially, the Mundra terminal in the west of the country. With these agreements, TOTAL relies on a recognized local partner to break into the Indian natural gas market which has a significant potential for growth.

In Benin, TOTAL, the Republic of Benin and the Société Béninoise d’Énergie Électrique (SBEE) have signed agreements in order to develop a floating LNG import terminal and to supply more than 0.5 Mt/y of LNG to Benin for a 15-year period, starting in 2021. This FSRU will be located off the shore of Benin and connected to the existing electric power plants and the future Maria Gléta plant by an offshore gas pipeline.

In Côte d’Ivoire, a consortium led by TOTAL (34%, operator) has been assigned responsibility for developing and operating an FSRU-type LNG regasification terminal in Abidjan. Due to a decrease in expected consumption, start-up is now expected in 2023.

 

 

2.1.3

Production and storage of low-carbon electricity

 

TOTAL has accelerated its strategy to integrate the gas-electricity chain in Europe and to develop low-carbon electricity by acquiring Direct Énergie and two combined-cycle natural gas power plants in France from KKR-Energas in 2018. Consequently, in 2019, TOTAL had an installed capacity of 1.9 GW (including Normandy Refinery cogeneration unit, part of Refining & Chemicals) of low-carbon electricity generation from gas.

Alongside its investments in the generation of electricity produced from natural gas, the Group also relies on its subsidiaries to increase its commitment to renewables. Upstream and downstream, in solar, wind and hydraulic power, TOTAL continues to seize investment opportunities and had an installed gross capacity of 3 GW of electricity production at the end of 2019. During the first quarter 2020, the Group already announced agreements with a view to develop or acquire close to 5 GW in Qatar, Spain and in India.

 

2.1.3.1

Electricity production from natural gas

The construction of a portfolio of combined-cycle gas power plants in Europe is part of the strategy to integrate across the gas and electricity value chain, from production to marketing, and compliments well the sources of production of intermittent renewable electricity. Furthermore, the flexible production of these power plants enables the Group to optimize its customers’ electricity supply costs.

In France and Belgium, TOTAL has four 100%-owned combined-cycle natural gas (CCGT) power plants. The global installed capacity is 1.6 GW. A fifth CCGT (0.4 GW) is currently under construction in Landivisiau (France). Additionally, TOTAL signed an agreement in December 2018 with EPH that will add two CCGT (0.8 GW) to the TOTAL portfolio in 2020, subject to authorization by the competent authorities.

In Abu Dhabi, the Taweelah A1 gas power plant, which is owned by the Gulf Total Tractebel Power Company (TOTAL, 20%), combines electricity generation and water desalination. The plant has a gross power generation capacity of 1.6 GW 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.

 

2.1.3.2

Electricity production from renewables

In Europe, TOTAL is developing an integrated approach to the generation of low-carbon electricity by developing and operating onshore wind power, solar, hydroelectric and biogas projects.

Elsewhere in the world, TOTAL is developing the generation of electricity from renewable energies by proposing decentralized photovoltaic systems for residential, industrial and business customers, and by developing and operating onshore solar power

plants and onshore wind power plants. TOTAL has also announced that it intends to take part in future offshore wind power projects, in particular by relying on its renowned know-how in offshore oil and gas.

In February 2020, TOTAL expanded its partnership with Adani Indian Group by creating a 50/50 joint-venture with Adani Green Energy Limited (AGEL). AGEL will transfer its solar plant in operation which have a cumulated capacity of over 2 GW. This transaction remains subject to the approval of the relevant authorities.

Total Quadran

TOTAL implemented its policy of investing in low-carbon businesses with the acquisition in 2018 of Direct Énergie, which used to own Quadran, since then renamed Total Quadran. This company enables the Group to speed up its development in solar and wind power in France.

At the end of 2019, Total Quadran operated a portfolio of 213 onshore wind, solar, hydroelectric and biogas assets in France, and continues to develop a portfolio of renewable electricity projects that have reached different stages of maturity. The installed gross capacity was 0.7 GW at the end of 2018 and 0.8 GW at the end of 2019, following the acquisition in August 2019 of the French company Vents d’Oc, which develops more than 200 MW of renewable energy projects, mainly in wind power.

Banque des Territoires signed an agreement in January 2020 in order to take an equity interest of 50 % in a portfolio of solar and wind energy assets of a total capacity of 143 MW, held by Total Quadran in France. This partnership reflects the deployment of TOTAL’s business model regarding the development of renewable energy projects. It will enable to pursue the development of new renewable energy projects in France.

Total Eren

In 2017, TOTAL acquired a 23% interest in Eren Renewable Energy, which has since been renamed Total Eren. This interest was increased to 29.6% at the end of 2019. TOTAL has an option to acquire 100% of Total Eren in 2023. Through its partnerships with local developers, Total Eren today manages numerous energy projects in countries and regions where renewable energies represent an economically viable response to growing energy demand, notably in Asia-Pacific, Africa and Latin America. In April 2019, Total Eren acquired the Novenergia group and extended its presence, in particular in southern Europe.

At the end of 2019, Total Eren had a diversified set of assets in renewable energies (wind, solar and hydraulic), representing an installed gross capacity of approximately 1.7 GW worldwide, compared with 1.3 GW in 2018.

 

 

            

 

 

36   

 

TOTAL   Universal Registration Document 2019


 

Business overview for fiscal year 2019

 

Integrated Gas, Renewables & Power segment

     

 

            

Total Solar International

Total Solar International, which is 100%-owned by the Group, contributes to the development of solar activities by concentrating on solar power plants, which may be combined with batteries or other means of generation, and electricity storage sites in targeted geographical areas: Europe, the Middle East, Japan and South Africa.

Total Solar International has interests in the Shams 1 solar power station in Abu Dhabi, PV Salvador in Chile, Prieska in South Africa and Nanao in Japan. In June 2019 in Japan, Total Solar International commissioned the Miyako solar power station, with a capacity of 25 MW, and launched the construction of a solar power station with a capacity of approximately 52 MW in Osato in October 2019.

In January 2020, TOTAL and its partners began the development of the Al Kharsaah Solar Park, the first large-scale solar plant (800 MW), in Qatar. The project has been awarded to a consortium comprised of Total Solar International (49%) and Marubeni (51%) following the first international solar tender in the country.

In February 2020, TOTAL signed two agreements with Powertis and Solarbay Renewable Energy in order to develop nearly 2 GW of solar projects in the Spanish solar market.

Total Solar Distributed Generation

Total Solar Distributed Generation, which is 100%-owned by the Group, contributes to the development of solar activities. It concentrates on decentralized photovoltaic systems that can be combined with batteries or other means of generation, installed on the sites of its industrial or business customers (B2B). Total Distributed Generation enters private PPAs (power purchase agreements) and also takes part in the deployment of the program to solarize TOTAL’s sites. In August 2019, TOTAL inaugurated its 1,000th service station equipped with solar panels worldwide.

In September 2019, Total Solar Distributed Generation and the Envision Group, the world leader in smart energy systems, formed an equally held joint-venture to commercially develop distributed solar energy projects for self-consumption for B2B customers in China.

Since October 2019, Total Solar Distributed Generation has added six solar projects with a cumulative capacity of approximately 10 MW to its portfolio of renewable energy assets in South-East Asia. These decentralized production projects are located in Thailand, the Philippines, Indonesia and Singapore.

SunPower

Since 2011, TOTAL has been the largest shareholder of SunPower, an American company listed on NASDAQ and based in California.

SunPower is the market leader in distributed energy in the United States, and its panels sales represent more than 2.4 GW worldwide in 2019, compared with 1.5 GW in 2018 and 1.4 GW in 2017. In November 2019, SunPower announced its decision to split its activities between two companies listed on the NASDAQ: Maxeon Solar Technologies and SunPower. Singapore-based Maxeon Solar Technologies will exercise activities from the design to the manufacturing and international sales of very high-yield solar cells and panels. Tianjin Zhonghuan Semiconductor Co., Ltd. (TZS), a worldwide player in wafers, is expected to acquire a 28.8% share of the capital at the time of the split. SunPower will continue to develop and market energy services (a combination of photovoltaic and storage systems, and other services) in the American market, in the residential, industrial and commercial segments.

The spin-off is expected to take effect in 2020, provided that the suspensive conditions are met.

2.1.3.3

Electricity storage

Electricity storage is a major challenge for the future of power grids and is vital in addition to renewable energies, which are intermittent by nature. Large-scale electricity storage is essential to promote the growth of renewables and enable them to become a significant share of the electricity mix.

The acquisition of Saft Groupe S.A. (Saft), achieved in 2016, is perfectly aligned with TOTAL’s ambition to develop its low-carbon business. Saft is a century-old French company that specializes in the design, manufacture and sale of high technology batteries for industry.

Saft develops batteries based on nickel, lithium-ion and primary lithium technologies. The company is active in transport (aeronautics, rail and off-road electric mobility), industrial infrastructures, civil and military electronics, space, defense and energy storage. Building on the strength of its technological know-how, and through its energy storage activities, Saft is well placed to benefit from the growth in renewable energies beyond its current activities, by offering massive storage capacities, combined with the generation of electricity from renewables. This is one of Saft’s main sources of growth.

In 2019, the company strengthened its energy storage and electric mobility activity, with the creation of a joint-venture with Tianneng Energy Technology (TET), a subsidiary of the private Chinese group Tianneng, with a view to developing their lithium-ion activity, and with the acquisition of Go Electric Inc., an American specialist in energy resilience solutions for microgrids. Additionally, Saft signed a contract with the Finnish operator TuuliWatti to build the largest energy storage system in the Nordic countries. Saft is also active in the European alliance working on a new generation of “solid electrolyte” batteries.

TOTAL and PSA Group announced in January 2020 their plan to combine their know-how to develop an electric vehicles battery manufacturing activity in Europe. To that end, they intend to establish a joint-venture named ACC (Automotive Cell Company). The project will leverage cutting-edge R&D, notably provided by Saft. The first phase of the project includes the building of a pilot plant on the land of Saft’s Nersac (France) facility, with scheduled start up in mid-2021, and will trigger the investment decision for two large-scale production plants, in order to reach the production of one million batteries a year by 2030.

As of year-end 2019, Saft is present in 19 countries (historically in Europe and the United States) and has over 4,500 employees. Saft is achieving growth in particular in Asia, South America and Russia, and has 14 production sites and approximately 30 sales offices. In 2019, Saft’s turnover amounted to $891 million.

 

2.1.3.4

Access to energy

First launched in 2011 in 4 pilot countries, TOTAL’s solar solutions for access to energy were distributed in 38 countries in 2019. In 2019, 3.3 million lamps and solar kits – including TOTAL’s new SUNSHINE range launched in 2018 – were sold in cumulative, helping improve the everyday lives of 14.5 million people. The distribution channels used are both TOTAL’s traditional networks (service stations) and “last mile” networks built with local partners to bring these solutions to isolated areas.

In addition, in 2019, around 15 incubation projects were developed with start-ups in the nano-grid, mini-grid, recycling and wind turbine sectors. More than 20 business partnerships were deployed in the field, with organizations ranging from NGOs and development agencies, to professional customers (including with distributors and major TOTAL customers) and international organizations.

The goal of the program is to impact 25 million people by 2025.

 

 

 

     

 

 

 

 2

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  37             


2   

 

Business overview for fiscal year 2019

 

Integrated Gas, Renewables & Power segment

 

            

2.1.4

Natural gas and electricity marketing and trading

 

2.1.4.1

Natural gas and electricity marketing

Europe

With a portfolio of nearly 6 million sites (B2B and B2C customers) and 141 TWh of energy supplied in 2019, TOTAL has become a leading player in the sale of natural gas and electricity in the residential and professional markets (business and industrial segments).

TOTAL is now targeting nearly 10 million sites (B2B and B2C customers) in Europe in every segment, and in particular a 15% market share in France and Belgium in the residential segment by 2025.

The Group markets natural gas and electricity in the residential and professional segments in France, through its Total Direct Énergie subsidiary (a merger of the Total Énergie Gaz, Total Spring France and Direct Énergie entities), in Belgium, through its subsidiaries Lampiris (residential) and Total Gas & Power Belgium (professional) and in the Netherlands.

TOTAL also markets natural gas and electricity in the professional segment in the United Kingdom) and is developing its activity in Germany and Spain.

 

 

Breakdown of gas and electricity sales in Europe

 

(in millions of B2B and B2C sites)

       2019        2018(a)          2017  
Europe      5.8          5.1        1.5  

France

     4.4          3.8        0.5  

Belgium

     1.0          1.0        0.8  

United Kingdom

     0.2          0.2        0.2  

Germany

     0.0          0.0        0.0  

The Netherlands

     0.1          0.1        0.0  

Spain

     0.0          0.0        0.0  

 

(a)

Acquisition of Direct Energie in 2018.

 

(in TWh of delivered electricity)

       2019        2018(a)          2017  
Europe      46          31        15  

France

     26          17        1  

Belgium

     4          4        4  

United Kingdom

     11          10        9  

Germany

     2          1        0  

The Netherlands

     0          0        0  

Spain

     2          0        0  

 

(a)

Acquisition of Direct Energie in 2018.

 

(in Gm3 of delivered gas)

       2019        2018(a)          2017  
Europe      9.1          8.5        8.4  

France

     2.4          1.8        1.9  

Belgium

     0.9          0.8        0.7  

United Kingdom

     4.1          4.2        4.3  

Germany

     1.3          1.3        1.2  

The Netherlands

     0.4          0.4        0.3  

Spain

     0.0          0.0        0.0  

 

(a)

Acquisition of Direct Energie in 2018.

 

Rest of the world

In Argentina, TOTAL markets the natural gas that it produces. In 2019, the volume of gas sales were stable to 4.3 Bcm, compared to 4.3 Bcm in 2018 and 4.2 Bcm in 2017.

In India, the partnership with Adani was strengthened in October 2019 with the announcement of the acquisition by TOTAL of 37.4% of Adani Gas Limited, one of the leading local distributors of natural gas, holding 38 urban concessions.

In Mexico, the Group holds shareholdings in the marketing companies that are associated with the LNG regasification terminals located at Altamira.

2.1.4.2

Natural gas and electricity trading

TOTAL is active is the trading of natural gas and electricity in Europe and North America. The Group sells its output to third parties and supplies its subsidiaries.

In Europe, TOTAL sold 70.3 Bcm of natural gas in 2019, compared with 46.4 Bcm in 2018 and 33.3 Bcm in 2017(1). The Group also traded 66 TWh of electricity in 2019, compared to 65.4 TWh in 2018 and 70.2 TWh in 2017, mainly from external sources.

In North America, TOTAL sold 17.4 Bcm of natural gas in 2019 from its own production or from external resources, compared to 13.7 Bcm in 2018 and 12.1 Bcm in 2017.

 

 

(1)

The data for 2017 has been restated to include the supply of marketing subsidiaries.

 

            

 

 

38   

 

TOTAL   Universal Registration Document 2019


 

Business overview for fiscal year 2019

 

Integrated Gas, Renewables & Power segment

     

 

            

2.1.5

Trading (excluding LNG, gas and electricity) and transport

 

2.1.5.1

Trading (excluding LNG, gas and electricity)

The Group is also active in markets other than natural gas, LNG or electricity, such as LPG, petcoke and sulfur.

In 2019, TOTAL traded and sold nearly 6.4 Mt of LPG (propane and butane) worldwide, compared to 5.2 Mt in 2018 and 4.9 Mt in 2017. Slightly more than 25% of these quantities came from fields or refineries operated by the Group. This trading activity was conducted by means of nine long-term chartered vessels. In 2019, 290 journeys were necessary for transporting the negotiated quantities, including 176 journeys carried out by TOTAL’s long-term chartered vessels and 114 journeys by spot-chartered vessels.

TOTAL sells petcoke produced by the Port Arthur refinery in the United States and the Jubail refinery in Saudi Arabia. Petcoke is sold to cement producers and electricity producers mainly in India,

as well as in Mexico, Brazil, other Latin American countries and Turkey. 2.5 Mt of petcoke were sold in the international market in 2019, compared to 2.2 Mt in 2018 and 2.1 Mt in 2017.

TOTAL also sells sulfur, mainly from the production of its refineries. In 2019, 1.6 Mt of sulfur were sold, compared to 1.4 Mt in 2018 and 0.9 Mt in 2017.

In 2015, the Group ceased its coal production activities and, in 2016, stopped selling and trading coal.

 

2.1.5.2

Transport of natural gas

The Group holds interests in gas pipelines (refer to point 2.3.10 of this chapter) located in Brazil and Argentina.

 

 

2.1.6

Carbon Neutrality Businesses

 

One of the missions of the Group is to propose and implement a strategy in the fields of energy efficiency, CO2-related business chains (CCUS, Nature Based solutions, compensation, etc.) and, more globally, in the new low-carbon activities, the services related to energy and the building of decarbonisation’s offers.

 

2.1.6.1

Energy efficiency services

The energy efficiency services market is experiencing strong growth, expected to accelerate in the coming years. In this context, the Group is investing in this market, with the aim of helping the Group’s customers reduce their energy consumption and their emissions, in particular by choosing between the best energy sources.

GreenFlex is a 100%-owned subsidiary of TOTAL that offers services designed to improve the energy and environmental performance of its customers. GreenFlex has more than 700 customers, employs approximately 500 people and recorded sales of approximately 327 million in 2019.

 

2.1.6.2

Total Carbon Neutrality Ventures

Formerly known as Total Energy Ventures, TOTAL’s venture capital fund has been renamed Total Carbon Neutrality Ventures (TCNV). Its investments are now entirely dedicated to carbon neutrality businesses and are expected to reach an aggregate amount of $400 million by 2023. TCNV invests in the upstream stage of the development of companies offering interesting technologies or economic models that enable companies to cut their energy consumption or the carbon intensity of their activities. With teams based in Europe and the United States, the fund makes its investments on a worldwide scale in smart energy, energy storage, smart mobility, bioplastics and recycling. While TCNV mainly invested in Europe and the United States in the past, the fund started investing in China in 2018. In particular, TCNV has signed an agreement with NIO Capital to cooperate and to invest in the mobility segment.

TCNV continues to develop its investment platform dedicated to emerging markets, and in particular to companies developing business models for access to energy for people who are not connected to the grid. The platform initially focused on Africa.

 

2.1.6.3

Carbon capture, use and storage

The Group aims at developing new businesses to enable its industrial, domestic or electricity producing customers to capture, store or use their CO2 emissions, thanks to the study of new industrial solutions.

TOTAL considers CCUS to be one of the key drivers to tackle the challenge of the climate change and is particularly interested in the development of new business and industrial models associated with this value chain. The Group allocates 10% of its R&D budget, i.e. $100 million per year.

In this area, the Group intends to participate directly or indirectly (via the OGCI fund in particular) in large-scale pilot projects. In 2017, TOTAL launched studies with Equinor and Royal Dutch Shell for developing the transport and storage aspects of the first industrial commercial project in the world for the capture, transport and storage of CO2, with a capacity of 1.5 Mt of CO2/y. The project aims to store the emissions from two industrial sites near Oslo (Norway) and will also be able to collect emissions from other emitters. TOTAL is also involved in studies of other projects, in collaboration with other industrial companies and partners, in Antwerp (Belgium), Dunkirk (France), Teesside or St. Fergus (United Kingdom).

Svante Inc., LafargeHolcim, Oxy Low Carbon Ventures, LLC (OLCV), a wholly-owned subsidiary of Occidental, and TOTAL announced a joint study to assess the viability and design of a commercial-scale carbon-capture facility at the Holcim Portland cement plant in Florence, Colorado, U.S. This joint initiative follows the project CO2MENT recently launched by Svante, LafargeHolcim and TOTAL at the Lafarge Richmond cement plant in Canada, which already enhanced progress regarding reinjection of captured CO2 inside cement.

 

2.1.6.4

Natural carbon sinks

Carbon sinks that use natural solutions are an effective means of capturing CO2. In June 2019, the Group created the new Total Nature Based Solutions (NBS) entity that is dedicated to investments in these solutions. This entity on the one hand, will fund, develop and manage activities that capture carbon naturally (reforestation, regenerative agriculture, etc.) and, on the other hand, will ensure the protection of ecosystems that already store high quantities of carbon emissions.

Operations that protect resource regeneration cycles simultaneously produce social, economic and environmental co-benefits for local communities. TOTAL intends to invest $100 million per year in such operations, starting in 2020. This significant investment is expected to enable the sustainable use of the above-mentioned value chains. The Group’s target is to reach a sustainable storage capacity of 5 Mt CO2/y by 2030.

 

 

 

     

 

 

 

 2

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  39             


2   

 

Business overview for fiscal year 2019

 

Exploration & Production segment

 

            

 

   2.2    Exploration & Production segment

 

The Exploration & Production (EP) segment encompasses the oil and natural gas exploration and production activities in more than 50 countries. Since January 1, 2019, the LNG Upstream and midstream activities, which previously reported to the Exploration & Production segment, now report to the Integrated Gas, Renewables & Power segment. This section presents the activities of the Exploration & Production segment adjusted accordingly.

 

 

    

 

LOGO

 

LOGO

Production

 

Hydrocarbon production

           2019                2018              2017  
EP (kboe/d)      2,454          2,394        2,165  

Liquids (kb/d)

     1,601          1,527        1,298  

Gas (Mcf/d)

     4,653            4,724          4,728  

 

[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]

 

 

 

 

(1)

DACF = debt adjusted cash flow. The operating cash flow before working capital changes w/o financial charges of the segment is defined as cash flow from operating activities before changes in working capital at replacement cost, without financial charges except those related to leases.

(2)

Organic investments = net investments, excluding acquisitions, divestments and other operations with non-controlling interests (refer to point 2.6.1 of this chapter).

[REDACTED SECTION: CERTAIN TEXT HAS BEEN REDACTED.]

 

            

 

 

40   

 

TOTAL   Universal Registration Document 2019


 

Business overview for fiscal year 2019

 

Exploration & Production segment

     

 

            

2.2.1

Presentation of the segment

 

Exploration & Production’s mission is to discover and develop oil and gas fields in order to meet a growing energy demand driven by non- OECD countries.

In an environment marked by the strong volatility of hydrocarbon prices, EP’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.

The deployment of the strategy is based on three main levers:

 

Responsibility: safety, a core value for the Group, is at the heart of all the activities of the segment which also aims at minimizing its environmental impact, in particular by significantly contributing to the reduction in emissions from the oil & gas scope operated by the Group;

 

Profitability: maximizing the value of its assets through operational excellence (continuing efforts to cut costs, improving the level of availability of facilities and launching major projects on time and on budget) and ensuring strict

 

investment discipline by being selective in the commissioning of new projects. In addition, EP continues to restructure or sell the least efficient assets in its portfolio;

Durability: reserves are renewed, through exploration as well as access to already discovered resources, building on the Group’s competitive advantages in terms of geographical spread and technical skills.

In order to ensure the viability of its projects and long term strategy in light of the challenges raised by climate change, EP is focusing its oil investments on low break-even projects and developing its production of gas. EP integrated in the economic assessments of investments submitted to the Executive Committee, a price of CO2 of $30 to $40 per ton (depending on the price of crude oil), or the actual price of CO2 in a given country if it is higher. Since January 1, 2020, EP has been taking into account in the economic evaluations of investments submitted to the Executive Committee a CO2 price of $40/t with a sensitivity of $100/t as from 2030, independent of the Brent price scenarios. EP is also developing its expertise in technologies for carbon capture, use and storage.

 

 

2.2.2

Activities by geographical area

 

The information below describes the main exploration and production activities of the Exploration & Production segment presented by geographical zone, without detailing all of the assets held by TOTAL. The capacities referred to herein are expressed on a 100% basis, regardless of the Group’s interest in the asset. The Group’s annual and average daily liquids and natural gas production by country for 2019, 2018 and 2017 are shown in the tables “Production by geographical zone” of point 2.3.3 of this chapter.

 

2.2.2.1

Europe and Central Asia

In Russia, oil and gas production comes mainly from the interests held in the Termokarstovoye (58.89%)(1) and Kharyaga fields (20%) and from the shareholding in PAO Novatek. The Group’s LNG activities in Russia are presented in the iGRP segment in point 2.1.2 of this chapter.

Russia is targeted by international economic sanctions. For information on international economic sanctions concerning Russia, refer to point 3.2 of chapter 3.

In Norway, TOTAL’s production is sourced from multiple fields, in particular Ekofisk (39.9%) and Troll (3.69%). The giant Johan Sverdrup (8.44%) field started production in October 2019. TOTAL has equity interests in 63 production licenses on the Norwegian maritime continental shelf, 12 of which it operates. The Group’s LNG activities in Norway are presented in the iGRP segment in point 2.1.2 of this chapter.

As part of the continual improvement of its North Sea portfolio, the Group disposed of its interests in the Victoria discovery (57%) in January 2019, in the Mikkel field (7.65%) in the Haltenbanken zone in January 2019, and in the King Lear discovery (22.2%) in October 2019.

In the United Kingdom, production comes from fields in different areas:

in the Alwyn area (100%), production from the Alwyn and Dunbar fields represents 55% of this area. The rest of the production comes from satellites linked to these fields.

in the Central Graben area, TOTAL operates the Elgin/Franklin complex (46.17%) which hosts the West Franklin (46.17%) and Glenelg (58.73%) fields. The project to redevelop Elgin, which started in 2016 and included the drilling of five wells, was completed in 2019. A new infill well was drilled on Franklin. TOTAL also operates the Culzean gas and condensate field (49.99%) which started production in June 2019. This start-up is the main reason for the rise in production in the United Kingdom in 2019. In the Quad 30 area, the Group holds an interest in the Flyndre field (65.94%). TOTAL announced a discovery on the Glengorm prospect (25%), close to existing TOTAL operated infrastructure, in January 2019.

in the West of Shetland area, TOTAL operates the producing Laggan, Tormore, Edradour and Glenlivet fields (all 60%). A delineation well was drilled in 2019 following the discovery of gas on the Glendronach prospect in 2018.

in the Quad 9 area in the eastern North Sea, TOTAL operates the Gryphon (86.5%), Maclure (38.19%), South Gryphon (89.88%) and Tullich (100%) fields. In the Quad 15 area, TOTAL holds 100% interests in the Dumbarton, Balloch, and Lochranza fields, whose production is processed by the Global Producer III FPSO also operated by TOTAL.

In 2019, TOTAL maintained its interests in the PEDL 273, 305 and 316 (20%) shale gas exploration and production licenses, after sales of interests in various licenses and leases in 2017.

In July 2019, TOTAL signed an agreement to sell several non-strategic assets in the eastern North Sea. They include Dumbarton, Balloch, Lochranza and Drumtochty (100%), Flyndre (65.94%), Affleck (66.67%), Cawdor (60.6%), Golden Eagle (31.56%), Scott (5.16%), and Telford (2.36%) fields. The finalization of the transaction, which remains subject to approval by the authorities, is expected in early 2020.

In Kazakhstan, oil and gas production comes mainly from the Kashagan field operated by the North Caspian Operating Company (NCOC) in the North Caspian license (16.81%). The production of the first phase of the Kashagan field and of the corresponding treatment plant, which started in 2016, has reached the capacity of 400 kb/d. On the Dunga field (60%, operator), the extension of the contract until 2039 was signed in July 2019, enabling the development project of phase 3 to be launched.

 

 

 

(1)

TOTAL’s aggregate interest through a direct interest of 49% in ZAO Terneftegas with PAO Novatek and a 9.89% indirect interest through its 19.40% shareholding in PAO Novatek.

 

 

     

 

 

 

 2

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  41             


2   

 

Business overview for fiscal year 2019

 

Exploration & Production segment

 

            

In Denmark, TOTAL is operator of the Danish Underground Consortium (DUC) (43.2%) resulting from the acquisition of Mærsk Oil in March 2018 and of Chevron Denmark Inc. in April 2019. The operated production (100%) comes from the two main DUC assets: Dan/Halfdan and Gorm/ Tyra fields. The Tyra field facilities constitute the main gas offshore treatment hub in Denmark. Production on the Tyra field was stopped in September 2019 as part of the redevelopment of the field that aims to extend the reserve life of the Tyra Denmark offshore gas field, the restart of which is expected in 2022. During the shut-down of the facilities in the field, the gas is exported from the facilities of the Dan/Halfdan fields.

In the Netherlands, production is sourced from the assets held in the 22 offshore production licenses, of which 18 are operated. Cost- cutting efforts allowed operations to restart at the end of 2019 on the F15 platform the production of which was stopped for decommissionning in 2017.

In Italy, TOTAL holds interests in and is operator of the Tempa Rossa field (50%) located on the Gorgoglione concession (Basilicate region), as well as three exploration licenses. Production at Tempa Rossa started in December 2019 and is expected to reach the planned capacity of 50 kboe/d in 2020.

In Azerbaijan, the development of the Absheron gas and condensates field (50%) in the Caspian Sea, which is operated by JOCAP (Joint Operating Company of Absheron Petroleum, a company jointly held by TOTAL and SOCAR), is in progress, with a view to supplying the domestic market. The production capacity of this first development phase is expected to be 35 kboe/d. The drilling operations, which were completed in November 2019, confirmed the significant potential of the deposit, beyond the first development phase.

In Bulgaria, TOTAL holds interests (40%) and is operator of the deep offshore exploration Block Han Asparuh. A 3D sismic campaign is expected in 2020.

In Greece, TOTAL holds interests (50%) and is operator of the exploration license on Block 2 in the Ionian Sea since March 2018. In October 2019, TOTAL was allocated interests (40%) and the operatorship of two licenses to explore two offshore blocks to the west and south-west of Crete.

Rest of the Europe and central Asia

TOTAL also holds interests (33.35%) in an exploration license without activity in Tajikistan.

 

2.2.2.2

Africa (excluding North Africa)

In Nigeria, the Group’s production is mainly offshore. TOTAL operates five production licenses (OML) on the 33 leases in which the Group has interests.

TOTAL has offshore operations, notably on the following operated leases:

 

on OML 130 (24%, operator), the production on the Egina field started in December 2018. The Egina field reached its production plateau at more than 200 kboe/d in May 2019. The Preowei field development plan was approuved by the authorities in 2019;

 

on OML 99 (40%, operator), the final investment decision of the Ikike field was taken in January 2019. The project is currently under implementation;

 

on OML 139 (18%), the plan to develop the Owowo discovery, made by TOTAL in 2012, is under study. This discovery is near the OML 138 license, where the Usan field is in production.

On OML 118 (12.5%), the tender phase of the Bonga South West Aparo project (10%, unitized) was launched in February 2019.

TOTAL is also present onshore, notably through the SPDC joint-venture (10%) which has 20 production licenses (of which 17 are located onshore), the 2019 production was 60 kboe/d.

TOTAL has obtained 20-year extensions for 3 offshore licenses in 2014, and for 16 onshore licenses in 2018. The sale process of the Group’s shares in OML 17 is ongoing.

The Group’s LNG activities in Nigeria are presented in the iGRP segment in point 2.1.2 of this chapter.

In Angola, where TOTAL is the country’s leading operator(1), the Group production mainly comes from Blocks 17, 32, 0, 14 and 14K:

 

the deep offshore Block 17 (40%, operator), TOTAL’s main asset in Angola, is composed of four major producing hubs: Girassol, Dalia, Pazflor and CLOV. The three brownfield projects, Zinia Phase 2, Clov Phase 2 and Dalia Phase 3, launched in 2018, are satellite developments of the Pazflor, CLOV and Dalia FPSOs and are expected to come into production in 2020 and 2021. Following the agreement signed in December 2019 with state-owned Sonangol and the National Oil, Gas and Biofuels Agency (ANPG), all Block 17 production licenses were extended until 2045 on the effective date of the agreement. Sonangol will simultaneously obtain a 5% interest in Block 17 and an additional 5% interest in 2036. After the entry of Sonangol in Block 17, the Group’s interest will be 38% with operatorship. Other brownfield projects for extending the production of Pazflor, Rosa, Girassol and Dalia are under study. Exploration may also help unlock further resources as two nearby exploration wells are expected to be drilled in 2020.

 

on the deep offshore Block 32 (30%, operator), production of the Kaombo project started in July 2018 with the start-up of the Kaombo Norte FPSO. The start-up of the second Kaombo Sul FPSO took place in April 2019. The discoveries in the central and northern parts of the Block (outside Kaombo) offer additional potential and are currently being assessed;

 

on Block 0 (10%), production comes from different fields, including in particular Mafumeira, where an additional drilling campaign is in progress;

 

on Block 14 (20%(2)), 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 Congo (Haute Mer license). TOTAL holds interests (10%) in the Lianzi field located in Block 14K through Angola Block 14 BV.

TOTAL signed in December 2019 an agreement with Sonangol to acquire interests in Blocks 20/11 (50%) and 21/09 (80%) in the Kwanza, offshore Luanda, in view of developing a new production hub. As per the agreement, TOTAL will become operator of the development of the two licenses where several discoveries were made, before putting in place an operating company with Sonangol. The operation is subject to approvals of the competent authorities and partners.

In exploration, in 2018, TOTAL acquired a license for Block 48 (50%, operator) which plans the drilling of an exploration well during the first two-year period.

The Group’s LNG activities in Angola are presented in the iGRP segment in point 2.1.2 of this chapter.

In the Republic of Congo, the Group’s production comes from the Total E&P Congo subsidiary, owned by TOTAL (85%) and Qatar Petroleum (15%).

Two significant assets operated by Total E&P Congo are in production in the Moho Bilondo license: the Moho Bilondo field (53.5%, operator) and the Moho Nord field. The Moho Nord field has been producing more than its capacity of 100 kboe/d since the start of 2018 due to strong productivities of the wells.

 

 

 

(1)

Company data.

(2)

Interest held through Angola Block 14 BV (TOTAL 50.01%).

 

            

 

 

42   

 

TOTAL   Universal Registration Document 2019


 

Business overview for fiscal year 2019

 

Exploration & Production segment

     

 

            

Block 14K (36.75%) is the offshore unitization area between Angola (Block 14) and the Republic of Congo (Haute Mer license). TOTAL holds interests (26.75%) in the Lianzi field located in Block 14K through Total E&P Congo.

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

Three new exploration licences were granted to TOTAL by the Republic of Congo in February 2020: Marine XX in deep offshore, as well as Naga and Mokelembembe located onshore.

In the Democratic Republic of Congo, after the completion of seismic acquisition work, TOTAL informed the authorities of its withdrawal from Block III in January 2019.

In Gabon, production comes from TOTAL’s shareholding in Total Gabon(1). Total Gabon is the operator (100%) of the Anguille and Torpille sector offshore fields, the Mandji Island sector onshore fields and the Cap Lopez oil terminal. In 2019, Total Gabon finalized a drilling campaign on Torpille sector as part of the redevelopment of the field.

Total Gabon also holds interests in the licenses in the Grondin (65.28%) and Hylia (37.50%) sectors, where the first phase of a conversion campaign was launched in 2019 to change the activation of the gas-lift wells into submerged pumps.

In Uganda, TOTAL holds a 33.33% interest in Blocks EA1, EA2 and EA3 for the development of the Lake Albert project. TOTAL is the operator of Block EA1, where most of the reserves are located. The project has reached an advanced technical stage, in terms of the engineering of the surface facilities and the oil pipeline, as well as for the drilling. The State-owned company has an option to acquire a 15% interest in the project, which would reduce TOTAL’s share to 28.33%, if exercised.

In January 2017, TOTAL and Tullow signed a purchase agreement that enabled TOTAL to acquire 21.57% of Tullow’s 33.33% interest in the Lake Albert license. All the parties have been actively working on the implementation of the agreement since 2017. Despite in-depth discussions with the authorities, an agreement on the fiscal conditions of the transaction could not be reached, and the 2017 agreement expired on August 29, 2019. Nevertheless, TOTAL retains its pre-emption right in the event of divestment by one of the parties of all or part of its interest. Despite the expiry of the agreement, TOTAL and its partners are continuing their efforts to develop the oil resources of Lake Albert. The work in progress with the Ugandan government aims to draw up a stable and appropriate legal and fiscal framework before taking any investment decisions.

In Mauritania, TOTAL continued exploration activities on the five operated offshore Blocks: Block C9 (50%) since 2012, C7 (90%) and C18 (90%) since 2017, and Blocks C15 (90%) and C31 (90%) since 2019. On Block C18, TOTAL entered the second exploration period in June 2019. After the drilling of a well in 2019, TOTAL relinquished the Block C9 in January 2020.

In Senegal, TOTAL continued exploration activities on operated offshore blocks: Rufisque Offshore Profond (ROP) (60%) signed in 2017 and Ultra Deep Offshore (UDO) (90%) since 2018. In 2019, TOTAL drilled an exploration well on Block ROP while the entry in the first exploration period on Block UDO was approved by decree.

In Kenya, TOTAL holds interests in the onshore exploration licenses (10BA, 10BB and 13T) and the offshore exploration licenses (L11A, L11B and L12). In August 2019, TOTAL announced the signing of an agreement entitling Qatar Petroleum to acquire a part of its interests in these offshore licenses. The finalization of this transaction remains subject to the authorities’ approval. Several oil discoveries were made on Blocks 10BB and 13T and a preliminary early production project is in progress to assess the production potential.

 

In South Africa, TOTAL operates three deep offshore exploration licenses on the South Outeniqua Block (100%), Block11B/12B (45%) and since November 2019 the DOWB license (80%). TOTAL also holds an interest in the East Algoa license (30%). Following the drilling of the first Brulpadda-1Ax exploration well on Block 11B/12B in January 2019, TOTAL announced a discovery of gas and condensates and proceeded with a 3D seismic acquisition. Preparations are well advanced for the continuation of the exploration program, with additional 2D and 3D seismic acquisitions which started in December 2019 and additional drillings are planned in 2020. Additionally, in May 2019, TOTAL announced the signing of a binding agreement with the Occidental Petroleum Corporation for the acquisition of the assets held by the Anadarko Petroleum Corporation in South Africa (exploration licenses 5/6/7 within the Orange Basin). The acquisition was closed in January 2020.

In Namibia, TOTAL operates two exploration permits in the deep offshore on Blocks 2912 (85%) and 2913B (70%). An exploration well is planned to be drilled in 2020 on the Venus prospect (Block 2913B). In August 2019, TOTAL announced the signing of agreements entitling Qatar Petroleum to acquire part of its interests in these Blocks. The completion of the transaction is expected in the first half of 2020.

Rest of the zone of Africa

TOTAL directly holds interests in three deep offshore exploration licenses in Ivory Coast, including Blocks CI-705 (90%,operator) and CI-706 (90%, operator) signed in June 2019, in addition to Block CI-605 (90%, operator). Additionally, two new licenses were granted to TOTAL in March 2019 one for Block ST-1 in São Tomé et Principe and the other for Blocks JDZ-7,8,11 in the joint development area between São Tomé et Principe and Nigeria. Additionally, in May 2019, TOTAL announced the signing of a binding agreement with the Occidental Petroleum Corporation for the acquisition of the assets held by the Anadarko Petroleum Corporation in Ghana (24% of the Jubilee field, and 17% of the Ten field). The finalization of this transaction remains subject to the authorities’ approval.

 

2.2.2.3

Middle East and North Africa

In the United Arab Emirates, the Group’s production, mainly oil, is sourced from different concessions.

Since March 2018, the Group holds a 20% interest in the Umm Shaif/ Nasr offshore concession and a 5% interest in the Lower Zakum offshore concession, for a period of 40 years operated by ADNOC Offshore, which follows the previous Abu Dhabi Marine Areas Ltd. (ADMA) offshore concession. TOTAL operates the Abu Al Bukoosh offshore field (100%) for which the contract was extended for 3 years in March 2018.

In 2015, the Group had also renewed its 10% interest in the ADNOC Onshore concession (formerly the Abu Dhabi Company for Onshore Petroleum Operations Ltd.) for 40 years. This concession covers the 15 main onshore fields of Abu Dhabi.

TOTAL also holds a 10% shareholding in ADNOC Gas Processing (formerly Abu Dhabi Gas Industries), which produces NGL and condensates from the associated gas produced by ADNOC Onshore.

TOTAL also holds a 24.5% shareholding in Dolphin Energy Ltd. that sells gas from the Dolphin Block in Qatar to the United Arab Emirates and Oman. The operations of Dolphin Energy were not impacted by the evolution of the diplomatic relations between the United Arab Emirates and Qatar.

 

 

 

(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%).

 

 

     

 

 

 

 2

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  43             


2   

 

Business overview for fiscal year 2019

 

Exploration & Production segment

 

            

In November 2018, TOTAL and the state-owned Abu Dhabi National Oil Company (ADNOC) signed a concession agreement to launch an exploration program for unconventional onshore gas on Block 1 in the Diyab prospection zone. In addition to finishing the fracking and testing of the existing three exploration wells, the program consists of three appraisal wells and two exploration wells.

The Group’s LNG activities in the United Arab Emirates are presented in the iGRP segment in point 2.1.2 of this chapter.

In Qatar, production comes mainly from the Group’s interests in the Al Khalij offshore field (40%, operator) and the Al Shaheen field (30%). The Al Shaheen field, located offshore, 80 km north of Ras Laffan, is operated by the North Oil Company, held by TOTAL (30%) and Qatar Petroleum (70%). TOTAL has held a 25-year interest in this field since 2017. TOTAL also holds a 24.5% interest in the offshore Dolphin Block, producing gas that is sold in the United Arab Emirates and Oman. The operations of Dolphin Energy were not impacted by the evolution of the diplomatic relations between the United Arab Emirates and Qatar.

The Group’s LNG activities in Qatar are presented in the iGRP segment in point 2.1.2 of this chapter.

In Libya, production partly comes from the Al Jurf fields located on offshore areas 15, 16 and 32 (75%) and from the El Sharara fields located on onshore areas 129-130 (30%) and 130-131 (24%). On these areas, production was shutdown in July 2018 and from December 2018 to February 2019 for security reasons and around 10 days in July-August 2019 due to the unavailability of an export pipeline.The Mabruk fields (75%), located on onshore areas 70 and 87, have been shutdown since the end of 2014.

Additionally, in March 2018, TOTAL acquired Marathon Oil Libya Limited, which holds an 16.33% interest in the onshore Waha Concessions, with a production of 47 kboe/d in 2019. This acquisition was definitively approved by the competent authorities in December 2019.

In Algeria, production comes from the shares in the TFT II and Timimoun gas fields and in the oil fields in the Berkine basin (Blocks 404a and 208).

Under the terms of a Global Agreement signed in 2017 with the authorities, two new concession contracts and the corresponding contracts for the sale of gas came into effect for TFT II (26.4%) in October 2018 and for TFT SUD (49%) in February 2019. Also, TOTAL finalized an agreement to buy the 22.6% share of a partner in TFTII. This acquisition is subject to the prior approval of the competent authorities. A concession contract and a gas marketing contract for Timimoun (37.75%) also took effect in July 2018, replacing those dated July 2012. Production on this field started in March 2018.

Additionally, in May 2019, TOTAL announced the signing of a binding agreement with the Occidental Petroleum Corporation to acquire the Anadarko Petroleum Corporation’s assets in Algeria. However, the Algerian authorities have announced that they were contesting the change of control between Occidental and Anadarko and they were considering to exercise their pre-emption right.

Late 2018, TOTAL was granted two authorizations to conduct exploration works on two offshore prospective areas, with operatorship for one of them.

In Oman, TOTAL participates in the production of oil in Block 6 (4%) principally and on Block 53 (2%), the sale of which is subject to the approval of the competent authorities. The Group’s LNG activities in Oman are presented in the iGRP segment in point 2.1.2 of this chapter.

Additionally, in February 2020, TOTAL signed a concession agreement with the Oman government to explore the resources of the onshore Block 12, located in the Greater Barik area.

In Iraq, the Group’s production comes mainly from its 22.5% interest in the risked service contract for the Halfaya field, located in Missan province. Phase 3 of the project to develop the Halfaya field came into production in 2018 and reached the production plateau of 400 kb/d in March 2019. In July 2019, a contract was awarded for the treatment of the associated gas and the recovery of the LPG and condensates.

Following the finalization of the acquisition of Mærsk Oil in March 2018, TOTAL also holds an interest in the Sarsang field in Iraqi Kurdistan, which is already in production.

In Yemen, the deterioration of security conditions in the vicinity of the Balhaf site 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 (for more information, refer to point 3.2 of chapter 3). TOTAL holds various stakes in four onshore exploration licenses, for which a situation of force majeure has been declared. In addition, TOTAL signed an agreement to sell its interest in Block 5 (Marib Basin, Jannah license, 15%) in 2018. This agreement remains subject to the authorities’ approval.

In Iran, TOTAL ceased all operational activity in Iran before November 4, 2018. Following the withdrawal of the United States from the Global Joint Comprehensive Plan of Action in May 2018, TOTAL withdrew from the project SP11 of the giant South Pars gas field and finalized its withdrawal on October 29, 2018, before the re-imposition of US secondary sanctions on the oil industry as of November 5, 2018. TOTAL was the operator and had a 50.1% interest alongside the Chinese state-owned company CNPC (30%) and Petropars (19.9%); a wholly-owned subsidiary of National Iranian Oil Company (NIOC). For information on international economic sanctions concerning Iran, refer to point 3.2 of chapter 3.

In Syria, TOTAL ceased its activities that contributed to oil and gas production in December 2011. For information on international economic sanctions concerning Syria, refer to point 3.2 of chapter 3.

In Cyprus, TOTAL is present in the offshore Blocks 6 (50%) and 11 (50%, operator) and entered the exploration Blocks 2 (20%), 3 (30%), 7 (50%,operator), 8 (40%) and 9 (20%) in October 2019.

In Lebanon, TOTAL is operator since February 2018 of two offshore exploration Blocks 4 and 9 (40%, operator).

Rest of the zone of the Middle East and North Africa

TOTAL also holds interests in an offshore exploration license in Block 7 (25%) in Egypt.

 

 

            

 

 

44   

 

TOTAL   Universal Registration Document 2019


 

Business overview for fiscal year 2019

 

Exploration & Production segment

     

 

            

2.2.2.4

Americas

In the United States, hydrocarbon production in the Gulf of Mexico comes from its interests in the deep offshore fields Tahiti (17%), and, since March 2018, Jack (25%). It divested its 33.33% interest in the Chinook field in 2019.

TOTAL is operator of the North Platte discovery (60%) and holds interests in the Anchor (37.14%) discoveries. In December 2019, the Group started the FEED (Front End Engineering and Design) studies for the development of North Platte and decided to launch the development of Anchor. Production is expected to start on Anchor in 2024, and the field is expected to reach a plateau of 80 kboe/d.

On the Ballymore discovery (40%), announced in January 2018, the studies launched after the appreciation program completed in 2019, aim to establish the profitability of the project by optimizing its development plan.

TOTAL also holds a 25% interest in an asset in the Utica basin (on mining acreage located mainly in Ohio), where TOTAL has not taken part in any drilling in the last three years.

The Group’s other Upstream activities in the United States are presented in 2.1.2 of this chapter.

In Canada, the Group’s output comprises bituminous oil sands. TOTAL has a 50% interest in Surmont, a steam assisted gravity drainage (SAGD(1)) production project, and a 24.58% interest of the Fort Hills mining extraction project, both in the province of Alberta. The application in January 2019 of production quotas by the Alberta government affected the production of Surmont and Fort Hills, but significantly improved the netbacks of the projects.

In Argentina, TOTAL operated approximately 27%(2) of the country’s gas production in 2019:

 

in Tierra del Fuego, on the CMA-1 concession, TOTAL operates the Ara and Cañadon Alfa Complex onshore fields and the Hidra, Carina, Aries and Vega Pleyade offshore fields (37.5%).

 

in the Neuquén onshore Basin, the Group holds interests in 10 licenses and operates six of them, including Aguada Pichana Este and San Roque, where production has already started. Three shale gas and oil pilot projects operated by TOTAL were launched: the first on the Aguada Pichana Block, where production started mid-2015 in order to produce gas; the second on the Rincón la Ceniza Block, located on the gas and condensate portion of Vaca Muerta (45%, operator), where production started in 2016; and the third on the Aguada San Roque Block (24.71%, operator), started production in 2018 in order to produce oil.

Following the good results of the Aguada Pichana gas pilot project and a reduction in drilling costs, the first phase of development of the giant Vaca Muerta shale play was launched in 2017 in the eastern part of the Block. In this project, all the partners of Aguada Pichana have signed an agreement to split the block in two which has enabled TOTAL to remain the operator of the Aguada Pichana Este Block, with 27.27% of the conventional part (Mulichinco), and 41% of the unconventional part (Vaca Muerta), and to adjust to 25% its interest in the Aguada Pichana Oeste, which is now non-operated by TOTAL and where a pilot came to production in 2017.

A second development phase was launched on the Aguada Pichana Este – Vaca Muerta Block in 2018. It should allow the production plateau to reach 500 Mcf/d, which corresponds to the capacity of the existing plant.

The wells of the first pilot on San Roque have been in production since 2018, and a second series of wells started up in May 2019, confirming the formation’s oil potential.

The pilot development on the Rincón la Ceniza Block was completed in 2019 with the start of production of three new wells in the gas and condensates part. The delineation well drilled in 2016 on the neighboring La Escalonada Block in order to test the oil portion of the formation has also demonstrated good productivity. This well was connected to the Rincón la Ceniza plant in 2019. Two additional wells on the Rincón la Ceniza are expected to confirm the oil potential of these two blocks.

In December 2019, TOTAL divested its 2.51% interests in the bloc Sierra Chiata in the Neuquén onshore Basin.

In Exploration, TOTAL is operator of three new exploration licenses, in conventional offshore: CAN 111 and CAN 113 (50%) since October 2019 and MLO 123 (37.5%) since November 2019.

In Bolivia, TOTAL is present on six licenses, five of which are in production: San Alberto (15%), San Antonio (15%), the XX Tarija Oeste Block (Itau) (41%), Aquio and Ipati (50%, operator).

Production on the Incahuasi field, on the d’Aquio and Ipati Blocks, started in 2016. The connection of the ICS-3 well in 2018, the drilling of the ICS-5 well in May 2019, and the increase in the capacity of the treatment plant to 390 Mcf/d, are expected to durably maintain the production of the field.

On the Azero exploration license (50%, operator), the drilling of the NCZ-X1 exploration well continued in 2019.

In Brazil, production comes from the Mero field in the Libra (20%), Lapa (35%, operator) and Iara (22.5%) Blocks. The acquisition by the Group of an additional 10% interest in Lapa under the agreement signed in December 2018, thus increasing TOTAL’s interest in the asset from 35% to 45%, is ongoing. The finalization of this transaction remains subjects to the Brazilian authorities in 2020.

The Mero field is located in the Santos Basin, approximately 170 km off the coast of Rio de Janeiro. At year-end 2019, 18 wells had been drilled and the production started in 2017 with the FPSO Pioneiro de Libra (50 kb/d capacity) designed to carry out the long-term production tests necessary for optimizing future development phases. The first FPSO of the Mero development project, Mero 1, with a liquid treatment capacity of 180 kb/d was launched in 2017, is currently under construction and is expected to start up in 2021. The second development FPSO, Mero 2 (with 16 wells connected to the FPSO with a liquid treatment capacity of 180 kb/d) was launched in 2019 and is expected to start up in 2023.

On Iara, production started in November 2019, with the FPSO P-68 (capacity of 150 kb/d) with a view to developing the Berbigao and Sururu-West fields. The Atapu field is currently being developed and the FPSO P-70 (capacity of 150 kb/d) is expected to start in the first half of 2020.

On Lapa, a drilling campaign started in mid-2019 on the north-east part of the field in order to increase the production of the FPSO (capacity of 100 kb/d) by adding two injector wells and replacing two productive wells, on which integrity problems had been detected. The development of the south-east part of Lapa is expected to start in the first half of 2020, with two productive wells and one injector well.

 

 

 

(1)

Steam Assisted Gravity Drainage.

(2)

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

 

 

     

 

 

 

 2

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  45             


2   

 

Business overview for fiscal year 2019

 

Exploration & Production segment

 

            

In exploration, TOTAL and its partners Qatar Petroleum and Petronas were awarded Block C-M-541 at the 16th oil auctions of the ANP in October 2019. The block is situated in the Campos pre-salt-bearing basin in ultra deep water. TOTAL’s 40% interest in the block is expected to decrease to 30% subject to the closing of an ongoing 10% farm-out. In addition, the Group holds 18 exploration licenses located in the Barreirinhas, Ceará, Espirito Santo, Foz do Amazonas and Pelotas basins.

Under the terms of their strategic alliance, TOTAL and Petrobras have signed an agreement to promote the strengthening of technical cooperation between the two companies, 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 offshore.

TOTAL holds an interest in the Gato de Mato field discovered in 2012. The well GDM#3 drilled in 2019 has confirmed the field extension in the block Gato de Mato South and allows to start development studies.

TOTAL also has interests in the fields undergoing assessment of Wahoo (28.6%) and Itaipu (40%) on the BMC-30 and BMC-32 Blocks, respectively in the Campos basin, following the acquisition of Mærsk Oil in 2018. On December 2019, TOTAL (70%, operator) and his partner informed the regulatory body ANP of their decision to relinquinsh the license containing the Xelerete field.

In Venezuela, the production is sourced from the shareholdings held by the Group in PetroCedeño S.A (30.32%) and in Yucal Placer (69.5%). Following the new international economic sanctions imposed at the start of 2019, the development of the PetroCedeño extra heavy oil field and the debottlenecking project of the water separation and treatment facilities were suspended in 2019 (three wells were drilled in 2019, compared with 26 in 2018 and 49 in 2017). Production on the PetroCedeño field stopped at the end of June 2019 has resumed at the end of November at very low levels. For information on international economic sanctions concerning Venezuela, refer to point 3.2 of chapter 3.

In Suriname, TOTAL acquired in December 2019 a 50% interest and the right to operatorship in the highly prospective Block 58 offshore Suriname.On this offshore block, the discovery made early 2020 by the Maka Central -1 exploration well is now under evaluation and further drilling and testing will be carried out to appraise the resources and productivity of the reservoir. The drilling of a second exploration well, Sapaka West-1 is underway.

In Mexico, TOTAL holds licenses in seven offshore exploration blocks in the Gulf of Mexico: Block 2 (50%, operator) located in the Perdido Basin, Blocks 1 (33.33%) and 3 (33.33%) located in the Salina Basin, Block 15 (60%, operator), as well as Block 32 (50%), Block 33 (50%, operator) and Block 34 (42.5%) located in the shallow waters of the Campeche Basin. TOTAL has informed Mexican authorities of its intention to give back the Block 2.

In Guyana, TOTAL has interests in the Canje Block (35%), the Kanuku Block (25%) and the Orinduik Block (25%) as part of the exploration of the prolific offshore Guyana Basin. In August 2019, TOTAL announced the signing of an agreement entitling Qatar Petroleum to acquire 40% of the company that owns the interests in Orinduik and Kanuku. The finalization of this transaction remains subject to the authorities’ approval. Two discoveries currently being evaluated were made in 2019 on Orinduik Block.

Rest of the Americas zone

At the end of 2018, TOTAL disposed of its interests in the Aruba exploration license. In French Guiana, the Guyane Maritime license (100%) expired in June 2019. In Colombia, following the stoppage of production on the Nicosta field, in which TOTAL holds a 71.4% interest, the Group decided to withdraw from the production sharing contract.

2.2.2.5

Asia-Pacific

In Thailand, the production of condensates and natural gas comes from the Bongkot (33.33%) offshore gas and condensates field and is all bought by the PTT Thai state company. Several new wells were drilled in 2019 to maintain the production plateau.

In Brunei, production comes from the Maharaja Lela Jamalulalam condensate gas field on Block B (37.5%, operator), whence the gas is supplied to the Brunei LNG liquefaction plant, and from the unitized Gumusut-Kakap field, of which the part in Brunei is located on Block CA1 (86.95%, operator).

In October 2019, TOTAL has signed an agreement to sell its subsidiary (100%), Total E&P Deep Offshore Borneo BV, which holds 86.95% of Block CA1, 100 km offshore of Brunei. The finalization of the transaction is subject to approval by the competent authorities.

In China, 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.

TOTAL holds a 49% interest and is operator of the Taiyang exploration block in the China Sea, situated in both Chinese and Taiwanese waters. Two 2D seismic surveying campaigns were completed in 2018 and 2019.

In Myanmar, the Yadana and Sein fields (31.24%, operator), located on the offshore Blocks M5 and M6, primarily produce gas for delivery to PTT for use in Thai power plants. These fields also supply the domestic market via an offshore pipeline built and operated by MOGE, a Myanmar state-owned company. In 2017, TOTAL started production on the Badamyar field, a satellite of the Yadana field, which is expected to extend the production plateau beyond 2020. The 3D seismic (5,700 km²) acquired on Block M5 in the first quarter of 2019 is currently under study.

On the A6 exploration license (40%), located in deep offshore waters west of Myanmar, and on which a gas discovery has been made, the design studies completed in the second quarter of 2019 confirmed the technical and economic viability of the project. On the YWB deep offshore Block (100%, operator), TOTAL holds an exploration license that has been renewed until August 2020. The studies based on the 2018 3D seismic survey are currently in progress.

In Papua New Guinea, TOTAL holds interests in the PPL339 (35%), PPL589 (100%) and PPL576 (100%) exploration licenses. The interpretation of the multi-client seismic survey performed in late 2016 on PPL576 revealed some promising prospects. The Group’s LNG activities in Papua New Guinea are presented in point 2.1.2 of this chapter.

Rest of the Asia-Pacific zone

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 subject to the establishment by both countries of an appropriate contractual framework. In Sri Lanka, in 2016 TOTAL signed an agreement to proceed with surveys on the offshore JS-5 and JS-6 Blocks off the east coast. The surveys are underway. A new partner joined the agreement with a 30% interest, reducing TOTAL’s interest to 70% in August 2019.

 

 

            

 

 

46   

 

TOTAL   Universal Registration Document 2019


 

Business overview for fiscal year 2019

 

Upstream hydrocarbons activities

     

 

            

2.3 Upstream hydrocarbons
activities

  LOGO     

The Group’s Upstream hydrocarbons activities include the oil and gas exploration and production activities of the Exploration & Production and the Integrated Gas, Renewables & Power (iGRP) segments. They are conducted in more than 50 countries.

 

    

 

LOGO

Production(2)

 

Hydrocarbon production    2019      2018     2017   
Combined production (kboe/d)      3,014       2,775        2,566  

Oil (including bitumen) (kb/d)

     1,431       1,378        1,167  

Gas (including Condensates and associated NGL) (kboe/d)

     1,583       1,397        1,399  
Hydrocarbon production    2019       2018     2017   
Combined production (kboe/d)      3,014       2,775        2,566  

Liquids (kb/d)

     1,672       1,566        1,346  

Gas (Mcf/d)

             7,364               6,599              6,662    

 

LOGO

Thanks to a significant decrease in capital investments, which peaked in 2013, the Group regained some flexibility for opportunities, including, in particular, the acquisitions of assets in Mozambique, Russia and North Sea, and to launch new projects, taking advantage of the current low level of costs. In order to high grade its portfolio, the Group also performed asset sales in various areas such as notably the North Sea and Africa.

In 2019, the Group’s hydrocarbon production was 3,014 kboe/d, an increase of 9% compared to last year, due to:

 

+13% related to the start-up and ramp-up of new projects, including Yamal LNG in Russia, Egina in Nigeria, Ichthys in Australia, Kaombo in Angola, Culzean in the United Kingdom and Johan Sverdrup in Norway;

 

-3% due to the natural decline of the fields;

 

-1% due to maintenance, notably in Nigeria, Norway and Tyra redevelopment project in Denmark.

 

Since 2018, the Group has launched, or plans to launch, numerous projects with an aggregate production potential that is expected to exceed 800 kboe/d.

All these actions are expected to increase production by more than 5% per year on average for the period 2018-2021, of which 2% to 4% in 2020 compared to 2019, and by more than 3% per year on average for the period 2023-2025.

 

 

 

(1)

Based on a Brent crude price of $62.74/b (reference price in 2019), according to the rules established by the Securities and Exchange Commission (refer to point 2.3.1 of this chapter).

(2)

Group production = EP production + iGRP production.

 

 

     

 

 

 

 2

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  47             


2   

 

Business overview for fiscal year 2019

 

Upstream hydrocarbons activities

 

            

Technical costs

 

      2019      2018     2017   
Operating expenses ($/b)      5.4       5.7        5.4  
Exploration costs ($/b)      1.0       1.0        1.2  

DD&A ($/b)

     12.9       12.2        12.8  

Technical costs ($/b)(a)

             19.3                 18.9                19.4    

 

(a)

Technical costs for the consolidated subsidiaries, calculated in accordance with ASC 932(1) standards, exluding non-recurrents items (chapter 9.1.5).

Production costs for the consolidated subsidiaries, calculated in accordance with ASC 932(1) standards, continued to decrease and were $5.4/boe in 2019, compared to $5.7/boe in 2018.

Liquids and gas sale price

 

Price realizations(b)    2019     2018      2017  
Average liquids price ($/b)      59.8       64.3        50.2  
Average gas price ($/Mbtu)              3.88                 4.87                4.08    

 

(b)

Consolidated subsidiaries.

Proved reserves

 

As of December 31    2019     2018      2017  
Hydrocarbon reserves (Mboe)      12,681       12,050        11,475  

Oil (including bitumen) (Mb)

     5,167       5,203        4,615  

Gas (including Condensates and associated NGL) (Mboe)

     7,514       6,847        6,860  
As of December 31    2019     2018      2017  
Hydrocarbon reserves (Mboe)      12,681       12,050        11,475  

Liquids (Mb)

     6,006       6,049        5,450  

Gas (Bcf)

         36,015             32,325            32,506    

 

LOGO

Proved reserves of hydrocarbons based on SEC rules (Brent at $62.74/b in 2019) were 12,681 Mboe at December 31, 2019. The proved reserve replacement rate(2), based on SEC rules (Brent at $62.74/b in 2019), was 157% in 2019 and 138% over three years.

 

 

 

 

(1)

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

(2)

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

 

            

 

 

48   

 

TOTAL   Universal Registration Document 2019


 

Business overview for fiscal year 2019

 

Upstream hydrocarbons activities

     

 

            

 

2.3.1

Hydrocarbons 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 economically producible under existing regulatory, economic and operating conditions.

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 extensions, disposal and acquisitions 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 entities 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.

The reserves booking process requires, among other actions:

 

that an internal peer review of technical evaluations is carried out to ensure that the SEC definitions and guidance are followed; and

 

that management makes the necessary funding commitments to their development prior to booking.

For further information concerning the reserves and their evaluation process, refer to points 9.1 and 9.2 of chapter 9.

Proved reserves for 2019, 2018 and 2017

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 2019, 2018 and 2017 were, respectively, $62.74/b, $71.43/b and $54.36/b.

As of December 31, 2019, TOTAL’s combined proved reserves of oil and gas were 12,681 Mboe (67% 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 and Central Asia (mainly in Kazakhstan, Norway, the United Kingdom and Russia), Africa (mainly in Angola, Mozambique, Nigeria and the Republic of Congo), the Americas

(mainly in Argentina, Brazil, Canada, the United States and Venezuela), the Middle East and North Africa (mainly in the United Arab Emirates, Qatar, and Yemen), and Asia-Pacific (mainly in Australia).

Gas and associated products (condensates and natural gas liquids) represent approximately 59% of the reserves whilst crude oil and bitumen the remaining 41%.

Discoveries of new fields and extensions of existing fields added 1,654 Mboe to TOTAL’s proved reserves during the three years 2017, 2018 and 2019 before deducting production and sales of reserves and adding any reserves acquired during this period. The net level of reserve revisions during this 3-year period is 1 794 Mboe, which was mainly due to the overall positive revisions in field behaviors and to the net impact of the changes in hydrocarbon prices in 2017 (increase), in 2018 (increase) and in 2019 (decrease) that led either to a decrease or increase in reserves resulting from shorter or longer producing life of certain producing fields and from partial debooking or rebooking of proved undeveloped reserves due to economic reasons, partially offset by reserves increase or decrease on fields with producing sharing or risked service contracts.

As of December 31, 2019, TOTAL’s combined proved reserves of oil and gas are 12,681 Mboe (8,532 Mboe of which were proved developed reserves) compared to 12,050 Mboe (8,400 Mboe of which were proved developed reserves) as of December 31, 2018.

Reserve sensitivity to hydrocarbon 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 20% of TOTAL’s reserves as of December 31, 2019). 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. The more the oil prices decrease, the more the number of barrels necessary to cover the same amount of expenses. Moreover, the number of barrels economically producible 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 in reserves is partly offset by a reduction of the duration over which fields are economically producible. However, the effect of a reduction of the duration of production is usually inferior to the impact of the drop in prices in production sharing contracts or risked service contracts. As a result, lower prices usually lead to an increase in TOTAL’s reserves, and vice versa. In Canada, a decrease in the reference price per barrel leads to a decrease in the level of royalties and, therefore, an increase of the reserves.

Finally, 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 in proved reserves, and vice versa.

 

 

 

     

 

 

 

 2

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

     

 

 

 

 

 

Universal Registration Document 2019  TOTAL

  49             


2   

 

Business overview for fiscal year 2019

 

Upstream hydrocarbons activities

 

            

2.3.2

Exploration

 

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. The Group plans balanced exploration investments:

 

50% for emerging basins, where the presence of hydrocarbons is already proven;

 

35% for exploration in mature hydrocarbon plays; and

 

15% for high-potential frontier basins.

In 2019, the Group’s exploration expenditure was $1.55 billion, mainly in Brazil, Suriname, the United States, the United Kingdom, South Africa, French Guiana, Guyana, Mexico, Cyprus, and Senegal, compared to $1.2 billion in 2018 and in 2017.

 

 

2.3.3

Hydrocarbon production

 

The average daily production of liquids and natural gas was 3,014 kboe/d in 2019 compared to 2,775 kboe/d in 2018 and 2,566 kboe/d in 2017.

Gas and associated products (condensates and natural gas liquids) represented approximately 53% of TOTAL’s overall production in 2019 compared to 50% in 2018, with crude oil and bitumen represented the remaining 47% in 2019 compared to 50% in 2018.

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.

Consistent with industry practice, TOTAL often holds a percentage interest in its fields 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 an operator (the party responsible for technical production) on the acreage in which it holds an interest. For further information, refer to the table on producing assets by geographical zone below.

The Trading & Shipping activity of TOTAL’s Refining & Chemicals segment marketed in 2019, as in 2018 and 2017, substantially all of the liquids production from TOTAL (refer to table regarding Trading & Shipping’s crude oil sales and supply and petroleum products sales in point 2.4.2.1 of this chapter).

 

 

            

 

 

50   

 

TOTAL   Universal Registration Document 2019


 

Business overview for fiscal year 2019

 

Upstream hydrocarbons activities

     

 

            

Production by geographical zone

The following table sets forth the Group’s annual liquids and natural gas production by geographical zone in 2019.

 

    2019     2018      2017  
        Liquids
Mb(a)
     Natural
gas
Bcf(b)(c)
     Total   
Mboe   
     Liquids
Mb(a)
     Natural
gas
Bcf(b)(c)
     Total
Mboe
      Liquids
Mb(a)
     Natural
gas
Bcf(b)(c)
     Total    
Mboe    
Europe and Central Asia     130        1,313        374       122        1,131        332        98        976        278  
Denmark     12        42        20       9        36        15                       
Italy     <1               <1       < 1               < 1                       
Kazakhstan     22        25        27       20        26        26        11        19        15  
Norway     38        197        75       38        211        77        46        234        88  
Netherlands     0        33        6              36        7               41        7  
United Kingdom     29        218        69       28        206        65        15        201        52  

Russia

    29        798        177       27        616        142        26        481        116  
Africa (excluding North Africa)     204        289        257       187        287        245        183        277        239  
Angola     75        71        85       68        48        77        73        47        83  
Republic of Congo     47        12        49       47        12        50        36        12        38  
Gabon     11        2        12       13        4        14        19        5        20  

Nigeria

    71        204        111       59        223        104        55        213        98  
Middle East and North Africa     200        313        257       190        294        243        153        282        204  
Algeria     13        48        22       11        34        17        1        21        5  
United Arab Emirates     104        19        108       102        21        105        102        24        107  
Iraq     7        1        7       7        1        7        6               6  
Libya     28        5        29       22        3        23        11               11  
Oman     10        24        14       9        25        14        9        23        13  

Qatar

    38        216        77       39        210        77        24        214        62  
Americas     61        405        133       67        423        142        48        442        127  
Argentina     3        160        32       3        147        29        2        141        27  
Bolivia     2        70        15       2        74        15        2        79        17  
Brazil     6        1        6       7               7        < 1               < 1  
Canada     35               35       35               35        22               22  
Colombia     <1               <1       < 1               < 1        < 1               < 1  
United States     13        154        40       12        176        44        11        192        45  

Venezuela

    2        20        5       8        26        12        11        30        16  
Asia-Pacific     16        368        79       6        273        51        10        455        89  
Australia     10        151        38       1        66        12               41        7  
Brunei     3        26        8       2        26        7        1        32        8  
China     <1        39        6              32        6        < 1        29        5  
Indonesia     <1        4        1              5        1        6        190        41  
Myanmar            46        6              49        6               55        7  

Thailand

    3        102        20       3        95        19        3        108        21  
TOTAL PRODUCTION           611            2,688            1,100             572            2,408            1,013              492            2,432              937  

INCLUDING SHARE

OF EQUITY AFFILIATES

    79        1,035        267       90        832        245        103