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2014 Results outlook and February 2015 Safety Safety and - PowerPoint PPT Presentation

2014 Results outlook and February 2015 Safety Safety and operational efficiency go together Safety performance Improving both safety and operational efficiency TRIR and LTIR* 94 540 million man-hours 2.6 1.8 455 1.3 TRIR 0.7 LTIR


  1. 2014 Results outlook and February 2015

  2. Safety

  3. Safety and operational efficiency go together Safety performance Improving both safety and operational efficiency TRIR and LTIR* 94 540 million man-hours 2.6 1.8 455 1.3 TRIR 0.7 LTIR 90 2012 2014 2010 2011 2012 2013 2014 Refining & Petrochemicals TRIR R&P availability ( % ) Improving safety performance by 50% over past four years 2014 flaring target achieved Reducing costs without compromising safety Mm 3 /d, excl. start-ups Enhancing efficiency by reducing flaring and monetizing 15 associated gas -50% Safety as a cornerstone of our strategy 2005 2014 * TRIR: Total Recordable Injury Rate; LTIR: Lost Time Injury Rate 2014 Results & outlook – total.com 3

  4. Market environment

  5. Sharp oil price decline, return to volatility Brent and ERMI Gas 100 99 $/b 15 14 $/Mbtu 8 $/Mbtu 50 5 4 $/Mbtu 19 $/t 2006 2010 2014 2006 2010 2014 Brent ($/b) ERMI* ($/t) Asia LNG proxy NBP Henry Hub Total’s response is to reduce breakevens As of 6 Feb. 2015; * European Refining Margin Indicator 2014 Results & outlook – total.com 5

  6. Long term oil demand growth Oil supply-demand Mb/d, crude and NGLs Oil demand 0.6% CAGR ~50 Mb/d new production needed by 2030, 100 >90 $/b driven by decline rate and demand growth 60-90 $/b ~20% of new volumes require >90 $/b <60 $/b North in 2014 cost environment America Decline ~50 Mb/d of incremental Marginal supply requires high tech , production* OPEC continuous innovation and significant investment 2013 2030 Fundamental support for high long term prices * Breakeven for IRR 15% nominal 2014 Results & outlook – total.com 6

  7. Robust LNG fundamentals LNG supply-demand Mt/y LNG demand Demand to double by 2030, ~4% most of new supply not yet sanctioned CAGR 500 >14 $/Mbtu New projects require adequate LNG prices Potential 12-14 projects • New LNG countries $/Mbtu • US export economics <12 $/Mbtu Sanctioned 250 Total well positioned • Projects already sanctioned with Decline Incremental favorable price formula production* • Low breakeven projects • Integrated along the entire LNG chain 2013 2030 with strong trading position High LNG prices required to encourage investment * Breakeven for IRR 15% nominal 2014 Results & outlook – total.com 7

  8. Corporate outlook

  9. Capitalizing on resilient fundamentals Lowest technical costs compared to peers* $/boe Leveraging Upstream strengths • Lowest technical costs among Majors 25 • Expanding cost reduction initiatives • Highest contribution from PSC among Majors • Delivering cash accretive start-ups 2005 2010 2014 Strong contribution from Downstream • Restructuring R&C to keep lowering breakeven European Refining & • M&S providing stable results through the cycle Petrochemicals breakeven $/t, on net operating income Robust balance sheet , prepared to temporarily gear up as necessary 30 -50% Resilient and integrated business model 2011 2014 * BP, Chevron, Exxon, Shell - based on published data 2014 Results & outlook – total.com 9

  10. Strong response to 2015 environment Cost reduction initiatives on Capex, Opex and exploration B$ 4 B$ ~4 B$ cash impact from cost reduction initiatives • >10% organic Capex reduction from 26.4 B$ to 23-24 B$ • 50% increase in Opex savings to 1.2 B$, including ‒ recruitment freeze in Upstream and R&P 2014 2015 ‒ headcount reduction in M&S mature areas ‒ 15% Corporate staff reduction by 2017 Cash flow from Upstream start-ups B$, Brent 70 $/b • 30% reduction in exploration budget to 1.9 B$ 1.5 B$ ~1.5 B$ additional cash flow from Upstream start-ups 2014 2015 ~3 B$ incremental net asset sales including Accelerated asset sale program 1.5 B$ accelerated 2015-17 asset sale program B$ 3 B$ 8 B$ cash impact reducing breakeven by 40 $/b 2014 2015 2014 Results & outlook – total.com 10

  11. Staying the course to deliver cash Group free cash flow Upstream free cash flow growth B$ compared to peers* Base 100 in 2014 100 $/b 80 $/b 10 70 $/b 70 $/b 100 2014 2015 2016 2017 2014 2015 2016 2017 2015 2017 Objective to generate >10 B$ free cash flow Leading cash flow growth driven by in 2017 with additional flexibility in case of accretive start-ups and production growth lower oil prices Reducing Capex as projects start up 2017 dividend more than covered at 70 $/b Strong and resilient cash flow growth Free cash flow = cash flow from operations - organic investments - acquisitions + asset sales * BP, Chevron, Exxon, Shell. Source Wood Mackenzie Oct. 2014 low price scenario 2014 Results & outlook – total.com 11

  12. 2014 results

  13. 2014 results 2014 adjusted net income 2014 after-tax impairments Oil sands 12.8 B$ Unconventional Upstream 7.1 B$ gas European refining Refining & Chemicals Marketing & Services Corporate Other Return to production growth in 2H14 6.5 B$ after-tax impairment in 4Q14 due with CLOV start-up to changing context Refining & Chemicals benefiting from 2% impact on end-2014 gearing restructuring and improved 2H14 margins Results benefiting from integrated model, with one-offs reflecting current environment 2014 Results & outlook – total.com 13

  14. 2014 cash flow allocation 2014 cash flow allocation B$ 30 B$ 30 B$ from operations and asset sales Acquisitions Change in net debt 4.8 B$ asset sales closed Asset sales Organic Organic investment reduced to investment 26.4 B$ in line with 2014 budget Cash flow from operations 31% gearing excluding benefit of 4 B$ pending asset sales at end-2014 Dividend 7.3 B$ dividend Strong dividend through intensive investment phase Asset sales including transactions with minority interests 2014 Results & outlook – total.com 14

  15. Actively managing the portfolio 2011-14 asset sales and acquisitions 2015-17 asset sales B$ B$ 10 B$ target 28 B$ 23 B$ Non-core Other Midstream & 4 B$ downstream signed Upstream Nigeria onshore Total Gaz In progress Simplification, Coal mines farm-outs & exits Bostik Asset sales Acquisitions End-2014 2015-17 Rejuvenating >25% of portfolio Closed ~2 B$ Bostik sale early 2015 2012-14 target achieved Significant progress on 2015-17 program High-grading portfolio and focusing on core assets Including transactions with minority interests 2014 Results & outlook – total.com 15

  16. Substantial liquidity and financial flexibility Net-debt-to-equity ratio B$ Liquidity established in advance of lower oil price • >15 B$ net cash • >10 B$ credit lines Net debt 100 Access to financial markets under favorable conditions Equity Gearing impacted by heavy investment phase and one-offs Flexibility to control gearing 22% 23% 31% Gearing • Strong response to 2015 environment 2012 2013 2014 • Proposed scrip dividend Well positioned to weather the storm 2014 Results & outlook – total.com 16

  17. Upstream

  18. Increasing Upstream profitability Safety , cornerstone of our strategy Delivery • Executing projects on time and on budget • Growing production with major project start-ups Costs • Increasing Opex savings • Enhancing capital discipline Cash • Strong cash flow growth driven by accretive start-ups • Dynamic portfolio management Accountability key to unlocking performance 2014 Results & outlook – total.com 18

  19. 2015 production growth Production 8 project start-ups in 2015 >8% • Including 3 already in production 2.15 New projects Mboe/d ADCO 125 kboe/d from new projects • ~60% Total-operated • ~60% deep offshore • ~50% PSC Successful entry into new ADCO contract ~1.5 B$ additional cash from new projects 2014 2015 Focusing on project execution and delivery 2015 in a Brent 70 $/b scenario 2014 Results & outlook – total.com 19

  20. 2014 reserve replacement rate of 100% Proved reserves Organic reserve replacement rate Bboe at year end 3-year average 111% 11.5 11.5 92% Portfolio changes Production Additions Organic reserve replacement rate of 125% 2013 2014 2009-11 2012-14 More than 13 years of 1P and 20 years of 2P reserves 2014 Results & outlook – total.com 20

  21. 2015 Upstream Capex and Opex 2015 Capex discipline 2015 Opex reduction B$ B$ 10 23 B$ Greenfield 0.8 B$ Initial Brownfield New Growth ~20 B$ Reduction 18 6 2014 2015 2014 2015 Reducing greenfield investment Doubling 2015 Opex reduction • Utica, Zinia 2, Bonga SW… • Reducing staff to ~15,500 end-2015, logistics… Cutting marginal brownfield spend Taking advantage of market conditions • Mature West Africa, North Sea... • Renegotiating contracts, service costs… Immediate and significant response to 2015 environment 2014 Results & outlook – total.com 21

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