EXTRA HEAVY OILS IN THE WORLD ENERGY SUPPLY

EXTRA HEAVY OILS IN THE WORLD ENERGY SUPPLY Ladislas Paszkiewicz Senior Vice President Americas CSR Field Trip Canada, June 2012 1

Increasing need for fossil energies by 2030 Energy mix scenario Mboe/d 300 200 1% 2% 10% 6% 26% 2% 3% 11% 6% 24% 4% 3% 11% 6% 22% Solar, wind, others Hydro Biomass Nuclear Coal In 2030: Gas to become the second-largest energy resource Oil will still represent 30% of global energy needs 100 22% 23% 24% Gas Extra-heavy oil and oil sands will contribute to 7% of liquid hydrocarbon supply 0 33% 31% 30% 2010 2020 2030 Oil Increase in the demand for both renewable energies and fossil fuels CSR Field Trip Canada, June 2012 2

Extra-heavy oil, a major resource to be developed Worldwide oil resources Years of production at current pace 100 80 35 ~3,500 Bboe Oil shale Extra-heavy oil (incl. oil sands) Tight oil Yet to find and increased recovery rate Unconventional resources Identified conventional resources ~500 Bb of extra-heavy oil ultimate resources*, incl. oil sands ( 16 years of world liquid hydrocarbon production at present pace) Of which 50% in Canada Rest: Venezuela, Nigeria, Brazil and Russia Already produced Challenging resource requiring advanced technology and significant investments * Includes resources that can be recovered economically with today s technology as well as resources currently non economically recoverable with today s technology CSR Field Trip Canada, June 2012 3

Need for liquid hydrocarbons partly fulfilled with extra-heavy oil in the future Worldwide extra-heavy oil production forecast (incl. oil sands) Mb/d 5 +6% per year 1% per year overall average liquid hydrocarbon production capacity increase from 2010 to 2025 0 2005 2010 2015 2020 2025 6% per year overall average extra-heavy oil (incl. oil sands) production capacity increase from 2010 to 2025 Crucial to ramp up the production of heavy oils to offset the inevitable decline in conventional production CSR Field Trip Canada, June 2012 4

What are heavy and extra-heavy oils? 2 characteristics by definition: Gravity: very dense, between 7 and 25 API Viscosity (at reservoir conditions): highly viscous, from 10 up to over 10,000 cp 3 categories of heavy oil: Heavy and extra-heavy oils Categories Total s definition Mobile A Class Heavy oil B Class Extra-heavy oil Gravity < 25 API 10 < Viscosity < 100 cp Gravity < 20 API 100 < Viscosity < 10,000 cp Bitumen Non mobile C Class Oil sands bitumen 7 < Gravity < 12 API Viscosity > 10,000 cp For convenience purposes, in general terms «heavy oils» include categories A+B+C, and «extra-heavy oils» include categories B+C, i.e. extra-heavy oils and oil sands CSR Field Trip Canada, June 2012 5

Huge volumes of heavy oil in place Split by region Split by category Middle East Africa Far East CIS C Class oils sands & bitumen ~1,940 Bb 9% A Class medium/heavy oil South America ~1300 Bb 95% in Venezuela 34% 34% 4,000 Bb 44% 44% North America ~1800 Bb 94% in Canada 50% 4,000 Bb 41% B class extra-heavy oil ~80% in Americas ~90% for extra-heavy oil and bitumen CSR Field Trip Canada, June 2012 6

Heavy oil production technologies: depending on viscosity, depth and complexity of reservoir Non-mobile oil Complexity of reservoir Mobile oil 20 m Currently mined 100 m R&D new technologies Depth of reservoir In situ production for homogeneous reservoir Thermal production: steam assisted gravity drainage (SAGD) Electrical heating Other technologies (combustion, microwave...) Heterogeneous reservoir Radio frequency In situ production: cold production Enhanced oil recovery: Enhanced water injection (EWI) Thermal New technologies are needed to improve recovery and access all reservoirs CSR Field Trip Canada, June 2012 7

Thermal or cold production for in situ production Viscosity cp 10 000 000 1 000 000 100 000 10 000 1 000 100 10 1 0 50 100 150 200 250 300 C Reservoir temperature Athabasca (Canada) Reservoir temperature ~10 C Viscosity ~1,000,000 cp Bitumen Thermal production inevitable Orinoco (Venezuela) Reservoir temperature ~53 C Viscosity ~1,500 to 3,000 cp Mobile oil Cold production possible 500 m 500 m 1400 m Downhole pump CSR Field Trip Canada, June 2012 8

What are the challenges? Long production plateau (20-50 years) Substantial investment required (upstream & upgrading) Important CSR concerns including environmental and local content Continue to improve development technologies To lower CAPEX / OPEX along the whole of the value chain To increase recovery rate for each reservoir configuration To develop a broad range of upgrading solution (for all developments and market conditions) To minimize environmental impacts: CO 2 emissions, water recycling, footprint To develop oil sands in a sustainable way Total s expertise and financial strength are in line with these challenges CSR Field Trip Canada, June 2012 9

Total diverse heavy oil portfolio in strategic areas and techniques Project Production techniques Capital Town CANADA Alberta Joslyn Mining Voyageur Upgrader Athabasca EDMONTON Calgary 500 km Fort Hills Mining NLP Mining Fort McMurray Surmont In situ VENEZUELA Orinoco belt 200 km CARACAS PetroCedeño Upgrader Barcelona PetroCedeño In situ OMAN Qarn Alam In situ 200 km Niswa < MUSCAT In situ Sur Mukhaizna CSR Field Trip Canada, June 2012 10

Total in Venezuela, PetroCedeño (cold production) Start-up: 2000 (upgrader: 2001) Capacity: 200 kb/d (upgrader: 180 kb/d) Cumulated site CAPEX as of end 2011: $8 billion (including upgrader) VENEZUELA Caracas Orinoco Belt Pto. La Cruz PetroCedeño upgrader (Total: 30.3%) About 500 wells drilled and 2,000 additional wells to be drilled to maintain production (up to year 2033) Multiple wells gathered by pads Crude Diluent Field production facilities (degasing dehydration powergen) Diluted extra-heavy crude Diluent Upgrading refinery Synthetic crude (32 API) Tanker PetroCedeño (Total: 30.3%) Oil characteristics: In situ viscosity: ~3000 cp at 50 C Gravity: 7.5-8.5 API Infield production CSR Field Trip Canada, June 2012 11

Total in Canada, a strong base to grow production Long-plateau projects with stable production for 20-30 years Expected production by 2020: ~200 kb/d High breakeven projects but with interesting leverage to oil prices As per alliance with Suncor, aligned decisions in 2013 for all projects ALBERTA Fort Hills (39.2%) Mining Joslyn (38.25%) Mining Voyageur (49%) Upgrader Fort McMurray Northern Lights (50%) Mining Strong cash flow generation Total-operated Partner-operated Exploration blocks Surmont (50%) In situ Long term cash flow and leverage to oil prices CSR Field Trip Canada, June 2012 12

Total building a diverse and strategic portfolio Increasing energy demand requires diversification of supply Extra-heavy oil and oil sands contributing to 7% of liquid hydrocarbon supply in 2030: key contributors to world energy supply Extra-heavy oil: a major segment of Total s growth strategy Strong R&D commitment to increase recovery, to mitigate costs, to improve energy efficiency, to reduce GHG emissions, to limit environmental footprint and to preserve biodiversity Sustainability, acceptability and responsibility remain keys to success CSR Field Trip Canada, June 2012 13

Disclaimer This document may contain forward-looking statements, including 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. Such statements are based on a number of assumptions that could ultimately prove inaccurate, and are subject to a number of risk factors, 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. Neither TOTAL nor any of its subsidiaries assumes any obligation to update publicly any forward-looking statement, whether as a result of new information, future events or otherwise. 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(IV) Until June 30, 2010, TOTAL s equity share of adjustment items reconciling Business net income to Net income attributable to equity holders of Sanofi 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 as from January 1st, 2011 and excluding TOTAL s equity share of adjustment items related to Sanofi until June 30, 2010. Dollar amounts presented herein represent euro amounts converted at the average eurodollar exchange rate for the applicable period and are not the result of financial statements prepared in dollars. 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 1-10888, available from us at 2, place Jean Millier La Défense 6 92078 Paris La Défense Cedex, France, or at our Web site: www.total.com. You can also obtain this form from the SEC by calling 1-800-SEC-0330 or on the SEC s Web site: www.sec.gov. CSR Field Trip Canada, June 2012 14