Petroleum Investments Perspectives from an IOC Christophe de Margerie President Exploration & Production Total Vice-President Vienna, September 12th, 2006
Petroleum Investments : Perspectives from an IOC A new energy environment IOC Strategies : Improve our business model
A common challenge in a worrying geopolitical context: Restore confidence in supplying world oil demand Mb/d 120 100 80 IEA WEO 2005 Demand 1% 60 40 2005 proved reserves Demand 1,5% 20 0 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 Source: IEA; TOTAL Vienna September 12th, 2006 3
A common challenge in a worrying geopolitical context: Restore confidence in supplying world oil demand 35 Mb/d Less than 2 Mb/d 30 Spare production capacity in OPEC countries 25 20 15 10 5 0 1980 1985 1990 1995 2000 2005 Ensure oil prices are sustainable for : economies of producing countries and consumers $/bbl 80 70 60 50 40 30 20 10 Production Capacity OPEC Dated Brent 1999 2000 2001 2002 2003 2004 2005 2006 Vienna September 12th, 2006 4
Tight market for Contractors and Services Companies : Costs increases : a Major Issue or the Issue of the Majors? Strong increase of raw materials (steel, ) High request for services Reduced competition Margins Human resources constrains Construction Cost increase mostly since 2003 Projects cost : > 50 % Drilling rigs Steep increase : +200% Seismic (offshore 3D) 40-70 000 $/km2 vs 20-30 000 $/km2 in 2002-03 Vienna September 12th, 2006 5
Petroleum Investments : Perspectives from an IOC A new energy environment IOC Strategies: Improve our business model
IOC s Strategy. Share w/noc s our experienced technology Developing new reserves using breakthrough technologies From Outcrop / Seismic hm dm to Pore scale cm / mm CT Scan kbbl/d Modern Analog 70 60 Successive reservoir management plans +48 Mbbls Field outcrop 50 40 Target 2005 +12.5 Mbbls Image analysis km Faults 30 20 10 1999 vision EOR mm / µm PSA Extension 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sismage Vienna September 12th, 2006 7 GRIDDED SIMULATION MODELS Pore modeling
and our current and future R&D efforts Extra heavy oil: Recovery upgrading, Process integration Energy and C02 Seismic technology Acquisition Imagery ( PSDM.) Lithoseismic, 4D Gas Solutions Sour gas, CO2 H2S process, LNG Chemical conversion: GTL Deeply Buried Reservoirs: Reservoir prediction High pressure drilling High temperature Q oil Mature fields Q water Conventional Selective EOR Debottlenecking Waater separation FPSO Tight gas Volume estimates Frac Well pattern C. Fouillout 9/11/2001 Subsea wells Flowline Long Tie-back Subsea Multiphase Pumping Deep water: Subsea insstalations Flow assurance Subsea Separation Qualifications Subsea wells Reservoir characterization Earthmodel Upscaling Fault description Vienna September 12th, 2006 8
IOC s Strategy Share w/noc s our Risk Management Capability PARTNERS 38 % 47 % 15 % Shared Management & Expertise : OPCO Long term commitment : 35 year project Local content : 72% Total staff (current): 1100 95% Venezuelan Major long term investment : Investment : 4.2 B$ (before start-up) Investment (planned) : >10 B$ (after start-up) Raw production : 200 000 b/d (8,5 API) 180 000 b/d (Zuata Sweet : 32 API) Full upgrading : Maximum added value in Venezuela Sincor (Jose) A great industrial success Vienna September 12th, 2006 9
We all face tough new challenges which need to be addressed in common Many new challenges Restore confidence in our common ability to deliver reliable oil productions in a worrying geopolitical context New expectations from host countries (and from consuming countries) Technology and cost issues Tough / increased competition : many newcomers with less experience Our answer : Audacity, Excellence and Vision Audacity : Develop the new technologies of the future Excellence : Deliver large Projects within Costs and Schedule Vision : New relationship with Host Countries and NOCs Go beyond old petroleum practices Vienna September 12th, 2006 10
IOC s Strategy. Go Beyond old Petroleum practices Desalination Environnent Local Content Training Communities Vienna September 12th, 2006 11
Petroleum Investments : Perspectives from an IOC A new energy environment IOC Strategies: Improve our business model Confidence based on Mutual Understanding and Respect