Shareholders General Meeting Christophe de Margerie Chairman and - PowerPoint PPT Presentation

Shareholders’ General Meeting Christophe de Margerie Chairman and Chief Executive Officer Paris, May 13, 2011

Activity of the Board of Directors in 2010 Definition of strategic orientation and approval 2010 examples of major investments Investments  USA – shale gas  Group strategy and 5 year plan  Group strategy and 5-year plan  Canada - Athabasca  Canada Ath b  UK – Shetland area  Review outlook for each division Dividend  Quarterly Quarterly Cl Closing accounts, internal control i t i t l t l interim dividend as from 2011 Corporate governance  Award of Compensation Compensation restricted shares  Assessment of directors independence to all employees  Finding new directors and enhancing Board’s diversity  Convocation and preparation of the Shareholders’ p p Finance meeting  Group insurance and financial  Chairman and Chief Executive Officer compensation policies  Award of stock options and restricted shares p Ethics  Corruption and fraud prevention plan 1 Investor relations – www.total.com – 3C3760

Commitment of the Board to risk management Instances and procedures to identify Monitoring of the recent crises and and anticipate risks at all levels analysis of their impacts on the Group The Macondo Board of directors accident in the Project Gulf of Mexico assessments before all Audit Committee investment decisions Middle East political crisis p Executive Committee Risk monitoring Nuclear accident Risk Committee s Co ttee on assets on assets i in Japan J Internal audit Department Divisions Divisions Tax system changes Tax system changes in producing countries Internal control 2 Investor relations – www.total.com – 3C3760

The example of the Joslyn field in Canada Impact assessments and development of adequate measures before all decisions Regular reviews foreseen at all key steps of the project Local Partnership Profitability Climate Forest / Water communities Strategic Strong leverage Price for CO 2 of 60% of the mine Consultation and partnership with to crude oil price 25€ per tonne already reclaimed transparency Suncor who is an S h i when closed h l d expert in oil sands Plateau: 30+ years R&D on carbon Dialogue mining capture and Water structures storage consumption below the Local content industry’s average Anticipate so as to ensure acceptability Project approved by local authorities Project approved by local authorities 3 Investor relations – www.total.com – 3C3760

Complementarity-based Corporate Governance A Board strengthened by the recent* nominations of independent directors holding few other p g mandates Increased board diversification after the 2011 AGM*  80% of the directors are independent (75% in 2008)  Since 2008 nomination of 6 new directors holding less Since 2008, nomination of 6 new directors holding less 27% 27% women than two mandates on average (13% in 2010) 27% non-French Specialized committees comprising independent directors, such as: directors (27% in 2010)  The Nominating & Governance Committee, a support for good corporate governance  The Strategic Committee created in 2011 Favoring diversity and skills adjusted to an international and capital-intensive company * subject to the approval of resolutions 9 and 10 by the shareholders at the May 13, 2011 Annual General Meeting 4 Investor relations – www.total.com – 3C3760

Compensation of the Chairman and Chief Executive Officer linked to the company’s long-term performance Criteria applied to the Chairman and Stock options awarded Chief Executive Officer’s compensation* to Christophe de Margerie 200,000 Cannot exceed 65% of the fixed base salary 0 , 2 0 On the basis of operational criteria, such as HSE 100,000 Variable 0 , 10 Cannot exceed 100% of the fixed base salary Cannot exceed 100% of the fixed base salary portion portion On the basis of the Group’s profitability and 0 , 0 0 earnings performance compared with peers 2008 2009 2010 Provisional allocation Set by comparison with the compensation paid Set by comparison with the compensation paid Fixed portion Final allocation to the Chairman and Chief Executive Officer of €1,500,000 main CAC 40 companies Not granted because of performance conditions not entirely met Compensation due for 2010: 3,015,030 Euros Loss of office  Severance payment limited to 2 years’ compensation unless misconduct or resignation Retirement and severance benefits subject to strict performance conditions * Christophe de Margerie has been Total’s Chairman and Chief Executive Officer since May 21, 2010 5 Investor relations – www.total.com – 3C3760

Restricted shares and stock option allocation plans rewarding individual performance Allocation principles Allocation of restricted shares by type of beneficiary  Large distribution: more than 10,000 beneficiaries  Limited dilution Number of 9,400 10,000 10,400 beneficiaries The Compensation Committee ensures a balanced allocation of stock options among a balanced allocation of stock options among the different tenderers (Chairman and Chief Executive Officer, executive officers, managers 2008 2009 2010 and employees) Senior managers Senior managers Other employees Others managers Performance conditions  On all stock options to be granted to the Chairman and Allocation of stock options by type of beneficiary Chief Executive Officer and on some of the managers’ Chief Executive Officer and on some of the managers  On all restricted shares to be granted to the Chairman and Number of 2,000 2,050 2,100 beneficiaries Chief Executive Officer and to the managers as from 2011 Align the interests of the management and the employees with the shareholders’ 2008 2009 2010 6 Investor relations – www.total.com – 3C3760

Encouraging individual and employee shareholding Shareholding structure by geographic area Shareholding structure by shareholder type 34% 88% 88% France Institutional 4% shareholders 5.5% Group Middle East employees p y and Asia 8% 34% Individual Europe shareholders 26.5% (excl. France) North America About 540,000 individual shareholders Employees and former employees: 160,000 shareholders* , p y p y Share of employees subscribing to the capital increase reserved for employees in 2011: 31% * pursuant to the 2010 award of restricted shares effective in 2012 7 Investor relations – www.total.com – 3C3760

Proposed 2010 dividend of 2.28 euros per share, stable compared to 2009 p Dividend €/share 2 2 2 2 1 1 0 2000 2000 2005 2005 2010 2010 Quarterly interim dividend as from fiscal 2011: first instalment of 0.57 € to be paid on September 22, 2011 8 Investor relations – www.total.com – 3C3760

Creating value for all stakeholders States and local authorities Shareholders  Corporate tax 10.2 B€ Corporate tax 10.2 B€  Dividends 5.3 B€ d 5 3 B€ Di id  Production taxes 4.9 B€ Employees Sales: 159 B€  Compensation and expenses 6.2 B€ expenses 6 2 B€ Adjusted net income: 10 3 B€ Adjusted net income: 10.3 B€ Civil society  Dividends 0.2 B€  Total Foundation and community development spending 270 M€ spending 270 M€ Expanding of our Suppliers activities  Goods and services  Investments and R&D 17 B€ purchased 27 B€ 2010 figures 9 Investor relations – www.total.com – 3C3760

2010 Results Patrick de La Chevardière Chief Financial Officer

2010: return to growth 4.3% increase in production, mainly from LNG growth 124% proved reserve replacement rate % p p 32% increase in adjusted net income to 10 3 B€ reflecting 32% increase in adjusted net income to 10.3 B€, reflecting both improving environment and operational performance 22% increase in gross investments to 16 3 B€ 22% increase in gross investments to 16.3 B€ Improved outlook for future growth 10 Investor relations – www.total.com – 3C3760

Improved environment in 2010 and early 2011 Main market indicators Increase in oil price reflecting Increase in oil price reflecting strong demand growth and $/boe $/t anticipated supply constraints 2008 2009 2011 2010 140 140 100 100 140 140 Gas prices rebounded, particularly 120 in the largely oil-indexed Asian 100 100 Brent markets, but remained stable in , 50 80 North America 60 60 Spot Gas US* 40 European refining margins still European refining margins still 20 20 affected by excess capacity in European the Atlantic basin 0 Refining Margin* source: public data on April, 30 2011 * Henry Hub converted into $/boe based on 5.8 Mbtu = 1 boe; ERMI (European Refining Margin Index), Total’s European Refining margin Indicator 11 Investor relations – www.total.com – 3C3760

Spare oil capacity reduced by mid-decade Oil demand growing by more than Difficulty to increase oil production capacity 1% per year on average by 2020* (Mb/d) ( Mb/d ) 95 93 91 89 88 84 Middle East, Countries with Asia Asia potential strong growth CIS, South America, Africa Mature and Mature and OECD stable areas 2010 2015(e) 2020(e) 2010 2015(e) 2020(e) 5% 3% < 3% Spare capacity Natural production decline of 6% per year on average Meeting expected demand growth remains a challenge for the industry Total estimates based on average GDP growth of 3.7% per year on the period * oil demand on the basis of the demand for refined products, excluding fuel and refinery gains 12 Investor relations – www.total.com – 3C3760