Energy, Oil Sands and Sustainable Development

Jean-Michel Gires
President and CEO, Total E&P Canada Ltd

Edmonton, Alberta January 2011

Population and Growth driving Energy demand

Population GDP
(purchasing power parity)
Billions Average growth per year 2005-2030(e) Trillions $ 2005 200 Mboe/d

Energy demand

10

1%
8

350

1.2%

3.6 % 1.5 %
150

1.8 %
250

6 100 4

3.3 % 5.3%
150

1.8 %

1.1 % 1.8 %
50

2.6%

3.7% 0.5 % 0.3 %

2005 2030(e) 1980

3%
2005

2.0%
2030(e)

50

1.4%
2005

0.4 %

1980

1980

2030(e)

OECD

Non-OECD

Energy demand growth mainly driven by transportation and power generation Need to limit further energy demand
Sources: Total estimates

2 - Edmonton January 2011

Oil & Gas to represent > 50% energy supply in 2030

World energy supply
Mboe/d*
400

300

Solar, Wind, other renewable energies Hydro Biomass excluding biofuels Nuclear

200

Coal

Gas

Fossil energies represent 81% incl. : Oil : 35% Gas : 21%

100

Biofuels

Fossil energies represent 75% incl.: Oil : 30% Gas : 22%

Oil
0 2005 2010 2015 2020 2025 2030

Efficient CO2 emissions management and diversification of energy supply are key issues
Source: Total estimates. * Million barrels of oil equivalent per day.

3 - Edmonton January 2011

Significant hydrocarbon resources yet to be produced

Oil resources
~3,000 Bboe
100 years

Gas resources
~3,000 Bboe

Unconventional resources oil shale, shale gas, coal bed methane, tight gas
70 years

>125 years

Extra Heavy oil & Bitumen

50 years 33 years of production at current pace

New discoveries and increased recovery rate Identified resources

80 years 55 years of production at current pace

Already produced

Conventional oil located mainly in the Middle East Extra heavy oil and Bitumen concentrated in Canada and Venezuela

Conventional gas resources concentrated in Russia, Iran and Qatar Development of shale gas production in the US driving a reevaluation of unconventional gas resources Transportation and liquefaction constraints limit development of isolated gas resources

Oil and gas resources require advanced technology and large scale investment With ample availability of oil and gas and existing infrastructure, hydrocarbons will be dominant fuel source for the next decades
Total estimates
4 - Edmonton January 2011

But additional oil resources are more and more difficult and expensive to extract
Break even oil price in 2010 (IRR >10%)
$/bbl Oil shales 100 Arctic Extra Heavy Extra oil Enhanced Recovery

80

Ultra deep water

60 Deep water 40

20

OPEC Middle East

Other Conventional Billions of barrels 1000 2000 3000

Sources: IEA, CERA, Total

5 - Edmonton January 2011

Oil production by 2020-2030 around 95 million barrels per day Not a peak oil, rather a moving ceiling oil
Oil production
CIS

09

30(e)

Mature areas OECD Mature areas Asia Middle East

09 09 30(e) Saudi Arabia, Iran, Iraq 09 Nigeria 09 30(e) 30(e) 30(e)

Geopolitical uncertainties delaying development of new capacities Stronger role of OPEC, awaited growth of production in Iraq

Heavy oil Americas

09

30(e)

South America
Brazil 09 30(e)

Africa

Extra Heavy oil & Bitumen are to be important contributors Up to ~ 8% of production by 2030
sources : Total estimates
6 - Edmonton January 2011

Long term Oil demand driven by transport & petrochemicals and mainly growth in emerging countries
Oil products demand

North America Europe

CIS
09 30(e)

2009-2030 evolution of each segment Transport Petrochemicals +23% +47% -33% -2%

09

30(e)

09

30(e)

China
Power generation
09 30(e)

Industry and other

Middle East

Total

+15%

09

30(e)

South America

Asia excl. China Africa

09

30(e)

09

30(e)

09

30(e)

Increasing demand for light products : naphtha for petrochemicals, gasoline and diesel for transport Necessary to upgrade refining and petrochemical plants to curb oil demand

7 - Edmonton January 2011

Simultaneously, climate change calls for drastic reduction of CO2 emissions

Technologies that can reduce global CO2 emissions from energy combustion
45000 40000 35000 30000
avoided emissions

Mt CO2

25000 20000 Energy savings 15000 10000 5000 0 1990 Fossil fuel switch Renewable energies Nuclear energy Carbon sequestration Emission of reduction case 2000 2010 2020 2030 2040

2050

Source EU Commission Energy: A potential scenario to stay <450ppm eq CO2

8 - Edmonton January 2011

Total: meeting global energy demand

Resources*: 40 Bboe / 40 years
(at December 31, 2009)

40

Europe and CIS

35

Other gas LNG

Resources* 30 > 40 years

25

Americas

20

Other liquids

2P reserves** 15 > 20 years

Bboe 12 6
10

Deep offshore Heavy oil

1P reserves*** 5 12 years Middle East / Asia

0

Africa 2 Bboe 1 - 2 Bboe 1 Bboe

Resources* : 40 Bboe

Diversified global portfolio offering balanced risks rewards

* proved and probable reserves at year-end 2008 plus contingent resources (SPE-PRMS) ** limited to proved and probable reserves estimated at year-end 2008 using company price assumptions, covered by E&P contracts on fields that have been drilled and for which technical studies have demonstrated economic development, also includes tar sands to be developed with mining *** reserves of consolidated subsidiaries (FAS 69) and share of equity affiliates and non-consolidated companies

9 - Edmonton January 2011

Total ; focusing increasingly in growth areas

Deep offshore Heavy oil Unconventional gas LNG

Blocks 17, 14 - Angola Producing Akpo, Bonga - Nigeria Moho Bilondo - Congo Tahiti - Gulf of Mexico

Petrocedeo - Venezuela Surmont Ph.1 - Canada

JV Barnett Shale - US

QG 1, QG 2 T5 - Qatar Bontang - Indonesie NLNG - Nigeria Snohvit - Norvge Yemen LNG (2 trains) Adgas , Oman LNG Angola LNG Angola GLNG Australia Ichthys - Australia Shtokman - Russia Nigerian projects

Under development

Pazflor - Angola Usan - Nigeria Laggan Tormore - UK

Surmont Ph.2 - Canada Joslyn - Canada

Expansion JV Barnett Shale US GLNG Australia Ahnet - Algeria Sulige - China Montlimar - France Neuquen - Argentina

Under study

CLOV - Angola Egina - Nigeria Block 32 - Angola

Northern Lights - Canada Fort Hills - Canada Bemolonga - Madagascar

Represents approx. 50% of Totals resource base

10 - Edmonton January 2011

Total: developing complementary, low-CO2 emitting energies in response to the challenge of satisfying future demand
Global energy mix by 2030(e)*
Mboe/d

Main axes selected by Total to prepare for the evolution of the energy mix
Solar: integration and advanced R&D
Strengthening industrial and downstream integration
Photovoltec, Tenesol, Abu Dhabi solar project (110 Mwe)

350 Solar, wind, other renewables Hydro Biomass, excluding biofuels Biofuels Nuclear Coal

Technological differentiation (JVs and partnerships for R&D)

IMEC (crystaline PV), LPICM (thin films), Konarka (organic PV), MIT (batteries), AE Polysilicon (polysilicon for PV)

250

Biomass: R&D for advanced biofuels and green chemicals

R&D on thermochemical processes
BioTfuel pilot (gasifying biomass)

150 Gas

75% fossil fuel 30% oil 22% gas

R&D on biotechnological processes

Futurol pilot (lignocellulose) Gevo (sugars isobutanol), Amyris, Elevance

50

Oil

Nuclear: acquiring expertise

8.33% interest in Penly project (1600 Mwe)

2005

2030(e)

Developing projects in countries where the Group has a presence

Capitalizing on our competences Developing R&D, partnerships, venture capital

* Total estimates
11 - Edmonton January 2011

Total: facing the access to energy Challenge Already 250 000 people supplied with ad hoc solutions

12 - Edmonton January 2011

Green House Gases : ~50 Gt CO2 eq. today

Transport 13 %

Deforestation 17% Oil & Agriculture 14% Gas 33,5%

Buildings 8%

Use Phase 28,5%

Industry inc. Electricity 7,5 %

Oil & Gas 33,5%

Other GHG, various 12,5%

Production & Refining

Coal 23%

Operations Phase 5%

Of which Industry 4%

* sources GIEC et AIE

13 - Edmonton January 2011

Oil and Gas / Operations : What can Total do?

Deforestation 17%

Oil & Gas Customers Use 28,5%

Agriculture 14%
Production & Refining 5%

Operations Phase :
Flaring & Energy Efficiency : solutions for our plants 55 Mt CO2eq Total operator 2009

Other GHG, various 12,5%

Coal 23%

Source GIEC et AIE

14 - Edmonton January 2011

Oil & Gas/ Users : What can Total do?

Transport 13 %

Deforestation 17%

Use Phase : 28,5%

Buildings 8%

Solutions for our customers / users 600MtCO2eq Total Marketer 2009

Agriculture 14%

Industry inc. Electricity 7,5 % Production & Refining (operations) 5%

Other GHG, various 12,5%

Coal 23%

sources GIEC et AIE

15 - Edmonton January 2011

Total Transportation solutions

City driving: distribution of energy use

Energy inefficiencies 62.4% Total: Automotive fuel and lubricant performance Hutchinson: Thermodynamics

Accessories 2.2%

Drag 2.6%

Total Petrochemicals and Hutchinson: - Fascia - Sealing systems

100%

Engine

20.4%

Driveline

12.6%

Rolling resistance
4.2% Total: Tire inflation

Idling
17.2% Hutchinson: Active mass dampers Stop & Go Hybridization Source: EPA.
16 - Edmonton January 2011

Driveline losses 5.6% Total: Lubricant performance Hutchinson: Transmission/rubber Ecodriving Inertia and braking 5.8% TP and Hutchinson: Plastics and rubber for lighter systems

CO2 Capture & Storage : a potential solution for industries with high CO2 emissions

Deforestation 17%

Transport 13 %

Oil &
Agriculture 14%

Buildings 8%

Gas 33,5%
Industry inc. electricity 7,5 % Production & refining (oprations) 5%

Other GHG, various 12,5%

Charbon
Electricit 19 %

Capture storage CO2

Solutions for industries with high emissions of CO2

Industrie 4%

* sources IPCC & IEA

17 - Edmonton January 2011

Carbon capture and storage demonstration facility inaugurated in Lacq, France on January 11, 2010

18 - Edmonton January 2011

Anticipating the future energy demand; a huge R&D effort

Increasing leverage to R&D

Environmental performance: 10%

$7.1 B
2009-2014(e)

Resources: 35%
Hydrocarbons, new energies

Products: 35%

Innovative technologies & process optimization: 20%

Totals R&D investment in 2009: $0.9 B

Supporting growth potential in oil and gas through new technologies Improving industrial and product efficiency and reducing environmental impact Accelerating the development of core competencies in new energies

19 - Edmonton January 2011

Total in Canada : strong base to grow our production

Buckton

Asphalt Creek

Northern Lights (TOTAL operator50% /SINOPEC 50%)

Mining, Prod. 100%: ult. 100 kbpd bitumen

Fort Hills (TOTAL 39.2%* / SUNCOR operator 40.8%*/Teck 20%) Mining, Prod.100%: 160 kbpd bitumen 2016
Griffon

Joslyn (TOTAL operator 38.25%*/SUNCOR 36.75%*/OXY 15%/ INPEX 10%)

Mining, Prod. 100%: JNM (ph.1) 100 kbpd 2017-18, JME (Expans.) 100 kbpd

VOYAGEUR Upgrader (TOTAL 49%*/SUNCOR operator 51%*)

Upgrading: 245 kbpsd 2016

Fort McMurray

Surmont (TOTAL 50%/Conoco operator 50%)

In-Situ (SAGD), Prod. 100%: Ph. 1: 27 kbpd 2007, Ph. 2: 110 kbpd, 2015

Emerillon

Lease
20 - Edmonton January 2011

Total Operator

Total Partner Operated

* Fort Hills, Voyageur, Joslyn shares subject to Total-Suncor transaction completion expected by 1Q2011

Surmont : one of the largest SAGD leases

Operated by ConocoPhillips (50%) Phase 1 already producing
20 well pairs at start-up from two pads Steam injection started in June 2007 Currently producing 23,000 bbl/d

Surmont (Total 50%)

Future developments
Phase 2 : sanctioned January 2010, bringing production to 110,000 bbl/d by 2015. Phase 3 : conceptual study in 2011 Additional phases are possible for full lease development

Technology investment to minimize impacts

SAGD technology continuously enhanced ES-SAGD pilot under construction SAGD creates less land disturbance although GHG emissions still a challenge CO2 Capture and Storage (CCS) experience from Lacq, Weyburn & others

Developing expertise in a key in situ technology

21 - Edmonton January 2011

Joslyn : preparing production for 2017 - 2018

Joslyn (Total 38.25*%)

Multiphase development in basic engineering and regulatory stages

Expected to yield 2 Bb of bitumen production over 30 years Oil sands surface mining techniques 100,000 bbl/d for Joslyn North Mine JNM hearing in September 2010

Technological and R&D investment to limit environmental impact

New methods of sand and thickened tailings beaching for enhanced tailings management Off Stream storage pond integrated Cogeneration Plant Industry cooperation / joint research pilots Total operator Leases covering area of 221 km2, of which 70 km2

Total Canada committed to developing technically and environmentally challenging project

22 - Edmonton January 2011

Fort Hills : growing our portfolio

Operated by Suncor (40.8%*), remaining 20% held by Teck Resources Ltd Estimated 3.4 billion barrels of bitumen Extracted by mining with truck and shovel Planned start-up mid 2016 Two-phase development:
Initial production : ~160,000 bbl/d With de-bottlenecking: ~190,000 bbl/d

Fort Hills (Total 39.2%*)

23 - Edmonton January 2011

Voyageur Upgrader : upgrading in Alberta

Operated by Suncor (51%*) Design: 245,000 bbl/sd Scheme: Delayed Coker
3 pairs of drums

Voyageur Upgrader (Total 49%*)

Close to existing Suncor Upgraders Hot bitumen from Fort Hills and Joslyn North mines Project resumed after interruption - planned start-up 2016

24 - Edmonton January 2011

Northern Lights Partnership: long term development

Operated by Total Canada (50%), remaining 50% held by SinoCanada (Sinopec affiliate) Estimated 1 billion barrels of bitumen to be recovered by mining One phase development around 100,000 bbl/d Ongoing evaluation of the best scenarios for development, production and export

Northern Lights Partnership (Total 50%)

25 - Edmonton January 2011

Environmental issues at the core of Oil Sands bad press

For every barrel of oil sands it requires enough natural gas to heat an average Alberta home for four days Al Gore

Carbon Neutral by 2020: A Leadership Opportunity in Canada's Oil Sands Pembina Institute

Dirty Oil
The most destructive project on earth Environmental Defense

The oil sands reserves cover an area of 140,000 km2 of the boreal forest - equivalent to 25% of Alberta (approximately the size of France) World Wildlife Fund

26 - Edmonton January 2011

Canada Oil Sands: what are we talking about ?

27 - Edmonton January 2011

Canadian Oil Sands : a challenging resource to produce

Oil Sand composition 10% Bitumen film 14% Fines
(clayminerals)

Characteristics of Athabasca bitumen 7-9 API Not mobile at reservoir conditions (10C) Bitumen requires : dilution for pipeline transport and/or upgrading to produce Synthetic Crude Oil (SCO)

71% Sand particle

Viscosity mPa.s 100,000,000 10,000,000 1,000,000 100,000 10,000 1,000 100 10 1 50 100

5% Water envelope

Oil flowing limit

150

200

250

300C

source : CAPP
28 - Edmonton January 2011

Mining and in-situ extraction methods for oil sands

20 m
Currently Mined

Mining
Established resources** = 34 Bb

20% of resources

100 m

Pit Mining

In-situ
Established resources** = 136 Bb

80% of resources

Depth

In-situ / Thermal / SAGD*

Great potential requiring advanced technology

* SAGD : Steam assisted gravity drainage ** Ultimate bitumen resources : ~300 Bb of which recoverable resources : 175 Bb (source : ERCB)
29 - Edmonton January 2011

Looking at the CO2 intensity of oil sands production

Power by others

JOSLYN/SURMONT

REFERENCES

CONVENTIONAL OIL* 15 100 kg CO2e/b (~25 kg CO2e/b)

SAGD
Power by others MINING

62 kg CO2 /b 38 kg CO2 /b (incl. Cogen)

Up to 70 kg CO2 /b

MINING

Up to 45 kg CO2 /b

30 - Edmonton January 2011

Reducing Water Usage in Oil Sands Projects : Joslyn & Surmont

Surmont SAGD
Closed circuit system 95% of water needs from recycled water Withdrawal of make-up water from groundwater wells

Joslyn North Mine

90-day off-stream storage pond 80% of water needs from recycled water

Net Water Withdrawal Intensity (bbl water per bbl bitumen) In-Situ Surmont SAGD: 0.3 bw/bb Other projects: 0.2 - 1 bw/bb
31 - Edmonton January 2011

Mining Joslyn N Mine: 1.6 bw/bb (steady state) up to 2.3 (maximum) Other projects: 2 - 4 bw/bb

Land Disturbance Footprint in Boreal Forest

Canadas boreal forest : 3.2 million km2 Oil sands: 140,000 km2 of which 4,800 km2 is mineable (0.1% of Canadas or 1% of Albertas boreal forest) ~ 20 000 km2 considered for in situ developments Currently disturbed by oil sands mines: 602 km2 (< Calgary foot print)

Joslyn North Mine

70 61% to be reclaimed by closure using progressive reclamation, rest 7 yrs later Existing mining projects typically <40% reclaimed by closure km2

Surmont In-situ
Phase 1: 1.2 km2 (initial develop.) Phase 2: 4 km2 (initial develop.) Voluntary Faster Forests Program to expedite tree planting/reclamation

Joslyn North Mine: reducing disturbance and accelerating reclamation process Yet biodiversity wealth must be protected and cumulative impacts managed
32 - Edmonton January 2011

TEPCA Calgary Research Centre Created in 2008, already ~ 20 M$/year

Mine Production

In Situ Production

Bitumen Production

Management of Resources & Environment

Upgrading

Tailings Treatment Transportation

Technology Barrels: Investing in the long-term future

33 - Edmonton January 2011

The importance of our local stakeholders

Fort Chipewyan

Fort McKay

34 - Edmonton January 2011

Fort McMurray

Stakeholder relations: critical to acceptability

Community investment Strong industry cooperation to address cumulative effects First Nations concerns addressed
Treaty rights Cumulative impacts Cultural preservation & respect Business opportunities
Over C$5M invested since 2008

Engagement with communities based on dialogue and empowerment

Mitigation Plans Community Content Plans Socio-Economic agreements

Wide range of investments in Canadian organizations (arts, health, environment, aboriginal culture, etc...) Canadian university partnerships and scholarships

Reconciling economic development with environmental and social performance

35 - Edmonton January 2011

Total committed to sustainable development

Challenging Economics
High breakeven Unknown CO2 cost More stringent royalties regime

Environmental Challenges
CO2, water, land footprint,

strict administrative process, local acceptability

Stakeholder relations
Engaging communities based on dialogue and sustainable partnerships

Further R&D to improve management of resources and environment

Fueling the future: Need for a New Balance and continuous improvement

36 - Edmonton January 2011