Focus on 4 key domains

Transcription

1 Focus on 4 key domains Notes September Strategy & Outlook

2 UPSTREAM Focus on cost discipline and operational excellence Arnaud BREUILLAC President, Exploration & Production

3 Safety as a cornerstone of our strategy Improving Upstream HSE performance Reducing TRIR* while increasing activity levels Reducing flaring** Mm 3 /d Million man-hours TRIR % Safety and operational efficiency go together Achieved target of 50% reduction on flaring * TRIR: Total Recordable Injury Rate ** Operated assets, excl. start-ups 2015 Strategy & Outlook 3

4 Upstream Opex reduction Delivering early results and increasing targets Opex reduction Contribution to operating results - B$ 1.8 B$* 2 >2x Operations 1 >0.8 B$ Supply chain 1H delivery Structure costs Sept 2014 targets Sept 2015 targets * Including impact of deflation 2015 Strategy & Outlook 4

5 Systematic internal benchmarking Measuring performance across all categories and assets Maintenance benchmark Deep offshore - $/MCI* Lower cost Logistics benchmark Helicopters - $/pax/h Higher cost Identifying performance gaps Encouraging best practice exchanges between affiliates Lower cost IT benchmark Workstations - $/unit Lower cost Higher cost Higher cost Increasing cost awareness of all staff Implementing performance-based incentives Top quartile Middle 50% Bottom quartile Major assets * Maintenance complexity index based on number, type and complexity of equipment 2015 Strategy & Outlook 5

6 Operations: revisiting operating models and logistics Focusing on improving efficiency New operating model Angola Block 17 - headcount Executing logistics action plan Nigeria - 100% operated savings - M$ -30% 40 Synergies 500 Campaign teams & smart rooms Fuel consumption CLOV 20 Pazflor Dalia Fewer vessels Girassol Benefiting from synergies between FPSOs Preparing onshore, implementing offshore Developing multi-competence operators Increasing passenger transport by sea Reducing supply vessels Improved utilization and fuel efficiency 2015 Strategy & Outlook 6

7 Supply chain: reducing costs through contract renegotiations Already achieving savings of up to 30% Negotiated rate and fee reduction examples -40% -30% -20% -10% 0% Marine logistics Seismic acquisition Well services Rigs Rotating equipment Subsea services Tubulars Operations & maintenance Engineering 2015 Strategy & Outlook 7

8 Structure costs: company-wide initiatives Building leaner organizations Lean model for mature fields UK - staff and contractor headcount 1, % Reducing global headcount Cutting numbers and rates of contractors Aligning manpower to activity levels Freezing recruitment Addressing all structure costs Rationalizing office space Tightening global travel policy Optimizing IT licenses and contracts Reducing personnel costs by >80 M$ per year 2015 Strategy & Outlook 8

9 Tackling drilling costs Optimizing rig fleet and drilling operations Managing rig count Operated rigs Improving well execution Dalia, Angola - drilling time per well % Actions since Jan Lower NPT* Optimizing operations Rig sequence -35% 10 Committed average Adapting rig count to activity levels Terminating and renegotiating rig contracts Simplifying and standardizing well design * NPT: non-productive time 2015 Strategy & Outlook 9

10 Production delivery: increasing operational efficiency Launching dedicated program to improve performance Production efficiency Operated assets - % 95% >3% Remote monitoring of rotating equipment 90% Reducing unplanned production losses Optimizing preventative maintenance 85% kboe/d production in Strategy & Outlook 10

11 Project delivery: excellence in deep offshore developments Delivering the next generation of giant, competitive projects Leading deep offshore operator among peers Operated production* - Mboe/d Total XoM BP CVX Shell Deep offshore: strong cash flows 2019 contribution from deep offshore, at 60 $/b 15% of production 1/3 of Upstream cash flow Nigeria: Egina Adding 200 kb/d 36% progress, starting up in 2018 Robust PSC terms driving resilience Congo: Moho Nord & Ph 1b Adding 140 kb/d by % overall progress, Ph 1b start-up in 2015 Negotiated new fiscal terms ahead of FID * Wood Mackenzie, 2015 deep offshore FPSOs; peers: BP, Chevron, ExxonMobil, Shell 2015 Strategy & Outlook 11

12 Project delivery: lessons learned from Laggan experience Focused on delivering start-up late-2015 An innovative subsea to shore project Total 60%, operator Offshore executed on time and on budget Wells ready for start-up Subsea systems and pipelines ready since 2014 Shetland onshore gas plant Hot work complete, commissioning ongoing Lessons from specific onshore challenges Better anticipation of site-specific issues Better control of contractors/supply chain Adapt standards for onshore environment 2015 Strategy & Outlook 12

13 Building a more resilient and profitable Upstream Global cost reduction program targeting sustainable change Reducing Opex per barrel $/boe Back to basics 10 7 $/b Investing with discipline through good enough design Revising operating models and increasing efficiency Changing culture sustainably Imperative to reduce costs at all levels Systematic cost benchmarking linked to compensation Focusing on value creation 2015 Strategy & Outlook 13

14 EXPLORATION Revised strategy and organization Kevin MCLACHLAN SVP Exploration

15 Strong acreage position with opportunities Maximizing potential from a large and diversified portfolio Acreage for Total and peers* Net thousands km 2 Unconventional Foothills Abrupt margins 500 Carbonates Deltas Rifts and grabens 0 STATOIL XOM CVX COP ENI TOTAL BP RDS * Peers: BP, Chevron, Conoco, ENI, ExxonMobil, Shell, Statoil. Source IHS, Feb 2015, excl. USA and Canada onshore 2015 Strategy & Outlook 15

16 High-graded exploration potential >3 Bboe from 150 top ranked prospects High-graded conventional exploration potential by play thematics and regions* Deltas Global ranking and selectivity based on risk, resource and value creation Pre-salt carbonates Abrupt margins Americas Foothills Rifts and grabens Priority on high-impact wells Improved process for prospect assessment Europe Middle East North Africa Africa Maintaining ~3 Bboe* of high-graded exploration potential Asia Pacific * Risked mean net resources 2015 Strategy & Outlook 16

17 Drilling top value creation prospects while managing risks Renewing >0.5 Bboe per year with finding costs <3 $/boe High-graded conventional exploration portfolio by play themes and operator* Near-field Nonoperated Core and emerging areas Frontier Balanced high-impact drilling strategy 50% in core and emerging basins 25% near-field exploration 25% frontier with strong value potential Managing exposure with capital discipline via farm-outs and pre-drilling partnerships B$ budget to drill >40 wells per year Operated Focusing on performance improvement * Risked mean net resources 2015 Strategy & Outlook 17

18 high-impact exploration program Targeting >1.5 Bboe over 3 years Wells targeting >500 Mboe* Wells targeting Mboe* * 100% mean resources 2015 Strategy & Outlook 18

19 Focusing on core and emerging areas US Gulf of Mexico, proving a new core area with North Platte discovery Houston North Platte lower tertiary discovery Total 40% >400 Mboe contingent and prospective resources* North Platte 3 appraisal well ongoing North Platte Baffin Bay Williams Fork Fraser Rum Ramsey Goodfellow exploration Total 27.5% >400 Mboe prospective resources South Platte Goodfellow Yeti Exploration well in 2016 Lewis Updip Other high value prospects to follow 236 blocks in Cobalt alliance Key prospects Discoveries * Operator estimate 2015 Strategy & Outlook 19

20 Near-field exploration Papua New Guinea, pursuing new prospects while appraising Elk-Antelope discovery Elk PNG Antelope Total 40.1%, operator on PRL15 Antelope South-1 High potential play emerging in onshore foothills environment Fields 2D PRL 15 composite seismic section NNW Antelope South-1 Antelope Field Prospects SSE Proven play with significant potential Elk-Antelope discovery Antelope South well in 2016 Further prospectivity under maturation for future exploration drilling 2015 Strategy & Outlook 20

21 Frontier exploration with strong value creation potential Uruguay Atlantic Margin, Block 14 Uruguay Raya-1 Total 65%, operator Successful farm-out completed Raya seismic section High-potential frontier prospects de-risked with 3D and DHIs* SW Raya-1 NE Raya, a giant ultra-deep offshore prospect Exploration well in 2016 Success to de-risk several other targets 2km Flat Spot * DHI: direct hydrocarbon indication 2015 Strategy & Outlook 21

22 Transforming our exploration business with a new approach New exploration teams organized around fully accountable regions Rejuvenated exploration team EXPLORATION Americas Europe & Central Asia Africa Middle East & North Africa Asia Pacific Focusing on value creation and performance improvement Strategy, Planning & Portfolio Exploration Excellence Geo-technology Solutions Emphasizing regions accountability Opening regional hubs Strengthening regional knowledge Pau Houston Paris Revising processes for better quality control and technical support Dubai Singapore 2015 Strategy & Outlook 22

23 Exploration key takeaways New leadership team focused on delivering top quartile performance >3 Bboe high-graded exploration potential Revised exploration drilling strategy 50% in core and emerging basins 25% near-field exploration 25% frontier with strong value potential B$ budget, targeting finding cost <$3/boe Drilling >40 wells and >0.5 Bboe of risked exploration potential per year 2015 Strategy & Outlook 23

24 LNG Building on a profitable and integrated portfolio Laurent VIVIER President, Gas

25 Active in all segments of the gas value chain An integrated LNG leader Gas Production Shipping Regasification 50% of Total production in 2014 Upstream 2014: 2 vessels 2020: 12 vessels Midstream 2014: 4 terminals 2020: 5 terminals Downstream Liquefaction Trading B2B Marketing 2014: 12 Mt capacity 2020: 20 Mt capacity 2014: 7 Mt traded 2020: 15 Mt traded Active in 7 countries 2015 Strategy & Outlook 25

26 A global LNG player active in all markets Snøhvit Yamal US exports South Hook Fosmax Dunkirk Altamira Nigeria Hazira Liquefaction Long term purchase Angola Yemen Qatargas 1 & 2 Adgas Qalhat Oman Bontang Ichthys Papua project GLNG Regasification Long term sale 2015 Strategy & Outlook 26

27 Profitable and growing business Maximizing value from integration of upstream and trading Total #3 in LNG* Mt/y LNG contribution to Upstream in % of net operating income 15 Trading from third party purchases Trading from Upstream production 20% of production LNG plant direct sales Increasing LNG production capacity by 50% More than doubling Trading portfolio One of the Group s growth drivers * Based on public data for BP, Chevron, Exxonmobil, Shell/BG (pro-forma) 2015 Strategy & Outlook 27

28 Starting up long plateau projects Adding 8 Mt/y capacity GLNG 7.2 Mt/y capacity Total 27.5% Ichthys 8.9 Mt/y capacity kb/d liquids Total 30% Yamal 16.5 Mt/y capacity Total 20% Train 1 gas-in Aug 2015 Upstream operational, LNG plant being commissioned Overall progress >75% First LNG in 2017 Overall progress 30% First LNG end-2017 Oil-indexed contracts to Korea and Malaysia Oil-indexed contracts to Japan and Taiwan Oil & gas-indexed contracts, 50% in Europe, 50% in Asia 2015 Strategy & Outlook 28

29 Maximizing value of Upstream production Resilient contracts through the oil cycle 2014 Upstream LNG sales by area Mt/y LNG contract price reviews Contractual destination Realized destination Rest of world North America Europe Asia No price review After /3 of Upstream contracts redirected in 2014 Low exposure to price reviews before 2020 S-curves and constants supporting prices 2015 Strategy & Outlook 29

30 Well positioned to seize new opportunities Leveraging size and flexibility to capture margins Trading arbitrage $/Mbtu Trading portfolio evolution Mt/y >2x 15 HH 2014: 4 1H15: 3 NBP 2014: 8 1H15: 7 JKM 2014: 14 1H15: 8 Flexible destination Spot Regas capacity Fixed destination Long term sales Global arbitrage options 2014 supply 2014 sales 2020 supply 2020 sales Global market with regional disparities Arbitrage between three main areas Enhancing supply optionalities Well balanced long term and spot exposure 2015 Strategy & Outlook 30

31 Two competitive projects for production after 2020 Papua LNG Total 40.1%, operator Nigeria LNG Train 7 Total 15% Positive resource appraisal ongoing Greenfield development benefiting from favorable location 8.5 Mt/y capacity Brownfield development taking advantage of existing infrastructure 2015 Strategy & Outlook 31

32 Leveraging a core competency Capturing the full value chain Adding long plateau production Global, well balanced and integrated position Growing trading portfolio with increasing flexibility Competitive new projects 2015 Strategy & Outlook 32

33 AFRICA The leading integrated major Guy MAURICE SVP Africa, Exploration & Production Momar NGUER SVP Africa Middle-East, Marketing & Services

34 Leading integrated major in Africa Long history across the continent Present in 44 countries Core region for Total 1/3 of Group cash flow from operations 1/3 of Group organic Capex 1/3 of Group production Downstream only Upstream only Upstream & Downstream Upstream projects Key resource base for Upstream Producing >650 kboe/d from six countries Exploration in a further 10 countries 2015 Strategy & Outlook 34

35 Successfully managing African context Sustainable core competencies More than 80 years in Africa Nigeria 1962 Promoting local partnerships Gabon 1934 Congo 1968 Highly skilled local teams and mobile international staff Applying international best practice Angola Year of entry 2015 Strategy & Outlook 35

36 Consistent operational delivery Leveraging local expertise and operational excellence to create value Improving HSE performance* in Africa while growing operated production Base 100 in % 140% 120% 100% 80% 60% +38% -53% Implementing international safety standards Reducing flaring and monetizing gas 40% 20% 0% % 1H15 Reliably producing >1 Mboe/d since 2007 Production Flaring TRIR * Operated assets, flaring excl. start-ups, TRIR: Total Recordable Injury Rate 2015 Strategy & Outlook 36

37 Deep offshore in Africa Culture of continuous innovation GIRASSOL Angola ROSA Angola AKPO Nigeria CLOV Angola First giant deep offshore FPSO, innovative riser towers 20 km tie-back to Girassol FPSO First all-electric FPSO, four-stage separation Subsea multi-phase pumps, variable speed drive technology BLOCK 17 Angola DALIA Angola MOHO BILONDO Congo PAZFLOR Angola MOHO Ph 1b Congo Deep offshore Girassol discovery - a pioneer explo well Flexible risers, integrated production bundles and pipe-in-pipe flow lines Subsea seawater treatment & injection program First subsea gas/liquid separation and pumping modules Most powerful subsea multi-phase pumps ever installed 2015 Strategy & Outlook 37

38 Angola Growing operated production to >700 kboe/d Deep offshore Block 17 (Total 40%, operator) Cumulative production >2 Bb, 2 Bb reserves remaining Block 0 CLOV producing up to 180 kb/d and generating 900 M$ cash in 2015 for Total Block 14 Kaombo Block 32 ALNG CLOV Dalia 2A Acacia Zinia 2 Angola Kaombo (Total 30%, operator) progress at 31%, adding 230 kb/d by 2018 Reducing costs prior to FID on Zinia 2 satellite and Acacia infill projects Block 17 Dalia Pazflor 3 high-impact exploration wells Girassol Producing Development Under study 2015 Strategy & Outlook 38

39 Nigeria Adding to a strong and balanced portfolio Diverse asset base Offshore, deep offshore, onshore and LNG Bonga OML 58 NLNG Nigeria Ofon 2 flare-out and gas monetization since 1Q15 Bonga SW Amenam NLNG T7 Akpo Usan Ikike Ofon 2 Egina (Total 24%, operator) progress at 36%, adding 200 kb/d by 2018 Evaluating developments on Bonga SW, Ikike and NLNG T7 Egina Continuing to explore high-potential acreage Producing Development Under study 2015 Strategy & Outlook 39

40 Growth opportunities in Africa New developments and exploration Opening new frontier basin in Uganda >1 Bb resources Targeting new exploration provinces High-impact wells EA-1A EA-1 EA-2 Lake Albert Kingfisher EA-2 Uganda Wells targeting Mboe* Wells targeting >500 Mboe* Total 33%, operator Total 33% Improved fiscal terms, progressing development plan and pipeline route Potential FID in 2017 Frontier well in South Africa High-potential deep offshore Kenya * 100% mean resources 2015 Strategy & Outlook 40

41 E&P in Africa: continuing to deliver value Securing the future through operational excellence and project delivery Africa SEC production kboe/d Africa E&P cash flow from operations B$, at 60 $/b 20% >40% Producing safely and reliably Delivering Moho Nord, Kaombo and Egina Reducing costs in each affiliate Growing production and cash flow 2015 Strategy & Outlook 41

42 Unmatched M&S position in Africa Leading Downstream operator leveraging critical mass M&S presence in Africa Top 5 retailers in Africa 2014 number of service stations 4,000 M&S presence Main fuels terminals Lubricant blendings Equity refinery Competitive supply chain taking advantage of extensive logistics network Leader with 17% market share in 43 countries 40% of M&S net operating income and 35% of M&S investments in Strategy & Outlook 42

43 Recognized player bringing international standards Building on a strong foundation by engaging local stakeholders African affiliates management Non-Africans Other Africans 280 managers Nationals Leveraging local talent Targeting 60% nationals in management 29 university partnerships and Young Graduates program in place Enhancing local partnerships Increasing ties with local partners and promoting local suppliers Fully owned affiliates Local minority shareholding Presence through distributors Main university partnerships Implementing highest standards Road safety Operational excellence in all facilities 2015 Strategy & Outlook 43

44 Meeting increasing retail customer expectations in Africa Delivering the brand promise M&S retail sales outpacing African market growth Base 100 in 2014 Offering premium quality retail >4% per year market African market growing at 2.5% per year Increasing market share to 20% Modern stations with strong non-fuel services High technology fuel and lubricants Electronic payments and money transfers 2015 Strategy & Outlook 44

45 Meeting increasing B2B customer expectations in Africa Rapidly expanding commercial activity M&S B2B sales Base 100 in 2014 Leveraging global presence to offer most reliable services in addition to fuel 5% per year Bulk Aviation Industry Mining & construction Attracting and retaining high-value customers Premium quality at a premium price 2015 Strategy & Outlook 45

46 Implementing an ambitious strategy Generating higher returns from growing sales M&S net operating income in Africa B$ +30% Strong net operating income growth 0.5 Robust results, leveraging leadership across all segments, in 43 countries Maintaining 18% ROACE through 500 M$ per year investment phase Strategy & Outlook 46

47 A bright future for the Group in Africa Capitalizing on the fastest growing continent Group cash flow from operations in Africa B$, at 60 $/b 10 >40% Deeply rooted for more than 80 years Growth supported by a booming continent Local management with specific know-how 2015 Strategy & Outlook 47

48 Disclaimer This document may contain forward-looking information on the Group (including objectives and trends), as well as forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, notably with respect to the financial condition, results of operations, business, strategy and plans of TOTAL. These data do not represent forecasts within the meaning of European Regulation No. 809/2004. Such forward-looking information and statements included in this document are based on a number of economic data and assumptions made in a given economic, competitive and regulatory environment. They may prove to be inaccurate in the future, and are subject to a number of risk factors that could lead to a significant difference between actual results and those anticipated, including currency fluctuations, the price of petroleum products, the ability to realize cost reductions and operating efficiencies without unduly disrupting business operations, environmental regulatory considerations and general economic and business conditions. Certain financial information is based on estimates particularly in the assessment of the recoverable value of assets and potential impairments of assets relating thereto. Neither TOTAL nor any of its subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise. Further information on factors, risks and uncertainties that could affect the Company s financial results or the Group s activities is provided in the most recent Registration Document filed by the Company with the French Autorité des Marchés Financiers and annual report on Form 20-F filed with the United States Securities and Exchange Commission ( SEC ). Financial information by business segment is reported in accordance with the internal reporting system and shows internal segment information that is used to manage and measure the performance of TOTAL. Performance indicators excluding the adjustment items, such as adjusted operating income, adjusted net operating income, and adjusted net income are meant to facilitate the analysis of the financial performance and the comparison of income between periods. These adjustment items include: (i) Special items Due to their unusual nature or particular significance, certain transactions qualified as "special items" are excluded from the business segment figures. In general, special items relate to transactions that are significant, infrequent or unusual. However, in certain instances, transactions such as restructuring costs or asset disposals, which are not considered to be representative of the normal course of business, may be qualified as special items although they may have occurred within prior years or are likely to occur again within the coming years. (ii) Inventory valuation effect The adjusted results of the Refining & Chemicals and Marketing & Services segments are presented according to the replacement cost method. This method is used to assess the segments performance and facilitate the comparability of the segments performance with those of its competitors. In the replacement cost method, which approximates the LIFO (Last-In, First-Out) method, the variation of inventory values in the statement of income is, depending on the nature of the inventory, determined using either the month-end price differentials between one period and another or the average prices of the period rather than the historical value. The inventory valuation effect is the difference between the results according to the FIFO (First- In, First-Out) and the replacement cost. (iii) Effect of changes in fair value The effect of changes in fair value presented as an adjustment item reflects for some transactions differences between internal measures of performance used by TOTAL s management and the accounting for these transactions under IFRS. IFRS requires that trading inventories be recorded at their fair value using period-end spot prices. In order to best reflect the management of economic exposure through derivative transactions, internal indicators used to measure performance include valuations of trading inventories based on forward prices. Furthermore, TOTAL, in its trading activities, enters into storage contracts, which future effects are recorded at fair value in Group s internal economic performance. IFRS precludes recognition of this fair value effect. The adjusted results (adjusted operating income, adjusted net operating income, adjusted net income) are defined as replacement cost results, adjusted for special items, excluding the effect of changes in fair value. Cautionary Note to U.S. Investors The SEC permits oil and gas companies, in their filings with the SEC, to separately disclose proved, probable and possible reserves that a company has determined in accordance with SEC rules. We may use certain terms in this presentation, such as resources, that the SEC s guidelines strictly prohibit us from including in filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 20-F, File N , available from us at 2, Place Jean Millier Arche Nord Coupole/Regnault Paris-La Défense Cedex, France, or at our website: total.com. You can also obtain this form from the SEC by calling SEC-0330 or on the SEC s website: sec.gov Strategy & Outlook 48