The challenges of an oil and gas company today

Jean-Pierre Biguenet TOTAL Austral

Cartagena, July 3rd, 2008

2

ENERGY LANDSCAPE

3

Global energy demand growth

12

OECD Non-OECD

Energy demandGDPPopulation

Energy demand growth mainly driven by transportation and power generation

50

150

250

350

1980 2005 2030(e)

Mboe/d

1.2%

1.8 %

1.8 %

0.6 %

Trillions $ 2005

50

100

150

200

1980 2005 2030(e)

4.2 %

5.7%

2.2%

Average growth per year2005-2030(e)

1 %

2

4

6

8

10

1980 2005 2030(e)

Billions

1.2 %

0.2 %

(purchasing power parity)

sources : Total estimates

4

80% of the energy mix still derived from fossil fuels in 2030

World energy demand* Million boe/day

Renewables(including hydro & biomass)

Nuclear

Coal

Gas

Oil

* Primary energy Sources: IEA World Energy Outlook 2006 and Total

+ 0.8% / year

2015-2030

+ 1.8% / year

2005-2015

+ 1,8% / year

+ 1,2% / year

1980

152

43 %

17 %

25 %

13 %3 %

65

26

374

20

2005

244

35 %

21 %

25 %

13 %6 %

84

52

62

1531

2030

328

30 %

22 %

27 %

6 %

15 %

79 %

100

73

87

19

49

5

Oil production capacity below 100 million of barrels per day towards 2020 - 2030

Plenty of resources but technically challenging

Geopolitical uncertainties delaying development of new capacities

Growing role of OPEC

14

sources : Total estimates

Oil production

07 30(e)

Heavy OilAmericas

Mature areasSouth America

30(e)07

Mature areasOECD

30(e)07

07 30(e)

Africa

of which Nigeria

Middle East

07 30(e)

of which Saudi Arabia, Iran, Iraq

Mature areasAsia

30(e)07

FSU

07 30(e)

6

Natural gas production growth driven by LNG

Large gas resources concentrated in Russia and the Middle East

Growth of gas supply constrained by the pace of development of liquefaction projects

15

sources : Total estimates

Mature areas

07 30(e)

07 30(e)

Africa

of which Nigeria

07 30(e)

Australia

Russia

07 30(e)

30(e)07

World gas production

Pipeline Gas

+1% per year

Liquefaction

+5% per year

Middle East

07 30(e)

of which Saudi Arabia, Iran, Iraq

7

Production growth concentrated in three major regions

source : Total estimates

Change in global hydrocarbon production through 2015(e)(approx. 25 Mboe/d of additional production)

Growing share of OPEC in hydrocarbon supply

Decline in mature areas offset notably by ramp-up in heavy oil

Growth in Middle East driven by Saudi Arabia and LNG

Growth of about 5% per year on average for West African production

base 2006

production 2015(e)

Americas Europe

-0.5%/year

Middle East +4%/year

Asia+0.5%/year

5

Mboe/d

25

15 Central Asia / Russia+2.5%/year

Africa +3.5%/year

Gas

Liquids

Processing gains

8

Impact of cost inflationProfitability of major projects

(Example of an integrated heavy oil project)

New environment marked by structurally higher oil price

Market supply to remain tight

Planned production growth delayed or postponed Venezuela, Nigeria, Iran, Iraq and Russia

Aging installations in mature areas

Significant cost inflation Although certain costs increasing at slower pace

Risk of delays for certain projects

Vision of crude oil price above 50-60 $/b supported by sustained demand,persistent uncertainties on supply and inflation

Changes or uncertainties in fiscal or contractual framework

Growing role of OPEC

Persistent insecurity

Sustained demand growth

40 $/b scenario

2005

Vision

2007

Vision

25 $/b scenario

40 $/b scenario

60 $/b scenario

Hurdle rate

IRR

9

Increasing complexity of new projects

Sources: IEA, Total

Tight market fueling a high price environmentBreakeven oil

price of newprojects in $/bbl

Oil resourcesin billion barrels

Oil need from 2005 to

2030

80

60

40

1000 2000 3000

20

OPECMiddle East

OtherConventional

Deepwater

Ultra deepwater

EnhancedRecovery

Heavy oil

Arctic

10

WHAT an O&G COMPANY CAN DO?

11

…Take Risks in Exploration1 billion boe added from exploration in 2007

* reserve potential added from exploration** 2007 average discovery cost : outlays for exploration and appraisal divided by additions to reserve potential from exploration for the year

(discoveries, revisions and appraisals)

Average discovery cost of 1.7 $/boe**

Sustained exploration effort in 2008(e) : 1.8 B$

Block 32

Block 14

Egina

Moho North

MTPS

Tormore

Kessog

Bongkot

Shah Deniz

Mahakam

Exploration in 2007

1

2

3

4

5

Bboe*

2003

2004

2005

2006

2007

In production

In development

Projects in preparation

Appraisal

New permitsDiscoveries & positive appraisals

Rapid confirmation of projects discovered through exploration

Numerous exploration successes in 2007

12

Main 2008 investments(e)(Group share)

AkpoKashagan Mahakam Ekofisk area

Alwyn / JuraPazflor Usan

Moho Bilondo Ofon IIAngola LNG

Gonfreville styrenics

Port Arthur coker

Lindsey

Canadian heavy oil

Between 0.6 and 1.0 B$

Less than 0.3 B$

Between 0.3 and 0.6 B$

Increase Investment ProgramSubstantial 2008 Capex program to fuel future growth

* including net investment in equity affiliates and non-consolidated companies, excluding acquisitions and based on 1 € = 1.50 $ for 2008(e)

Capex by segment*

Jubail

Increasing R&D budget by more than 20% to 1 B$ in 2008(e)

Anguille

75% of the increase in Capex activity related

including increase in costs

25% related to foreign exchange

Upstream

Downstream

Chemicals

19 B$

16 B$

2007 2008(e)

13

80% of new production through 2010 operated by Total

* estimates based on Brent at 60 $/b in 2008 and thereafter, Total share ** at 1/01/2008

Plateau : 90 kboe/dStart-up : 2Q08(e)Progress : approx. 95%**

Plateau : 45 kboe/dStart-up : 2Q08(e)Progress : approx. 70%**

Plateau : 225 kboe/dStart-up : winter 08-09(e)Progress : approx. 65%**

Plateau : 195 kboe/dStart-up : winter 08-09(e)Progress : approx. 70%**

Yemen LNG (39.6%)

Akpo (24%)

Jura (100%)

Plateau : 250 kboe/dStart-up : 1H09(e)Progress : approx. 45%**

Plateau : 135 kboe/dStart-up : 2H09(e)Progress : approx. 88%**

Plateau : 130 kboe/dStart-up : 2H09(e)Progress : approx. 55%**

Qatargas II TB (16.7%)Tahiti (17%) Tombua Landana (20%) Ofon II (40%)

Plateau : 100 kboe/dStart-up : 2010(e)Progress : approx. 5%**

Moho Bilondo (53.5%)

Production from main projects 2007-2010(e)*

Dalia, Rosa, Dolphin

Moho, Jura

Yemen LNG, Akpo, Qatargas II, Tahiti, Tombua Landana, Ofon II…

2007 2008(e) 2009(e) 2010(e)

kboe/d

600

400

200

2010(e)

Total-operated

Non-operated

14

Ichthys LNG (24%)

Capacity : 8.4 Mt/yFID 2008-2009(e)Asia

Mobilize O&G resourcesChanging scale of Total’s LNG portfolio

* sales, Group share, excluding trading ; estimates for other majors

Took 25% interest in Shtokman Phase I

Launched development of Angola LNG

Development of Yemen LNG on track

Started production on Snøhvit and NLNG T6

LNG sales*

Yemen LNG (39.6%)

Capacity: 6.7 Mt/yStart-up winter 08-09(e)US, Asia

Qatargas II TrB (16.7%)

Capacity : 7.8 Mt/yStart-up 2009(e)Europe, US

Brass LNG (17%)

Capacity : 10 Mt/yFID 2008-2009(e)US, Europe

Shtokman (25%)

Capacity : 7.5 Mt/yFID 2009(e)US, Europe

Major LNG producer with approx 17% of Group production in 2010(e)

Important developments since the start of 2007

Capacity : 8.5 Mt/yFID 2008-2009(e)US

NLNG T7 (15%)

Capacity : 5.2 Mt/yFID Dec. 2007US

Angola LNG (13.6%)

2006 base

2010(e) growth projects

2015(e) growth projects

2006 2010(e) 2015(e)

+13% per year on average(e)

Total

Mt/y

20

10

30

RDS XOM BP CVX

15

0

100

200

300

400

500

600

2007 2009 2015

Progressively expanding Total’s energy offerings

Growing new energies business in context of high hydrocarbon prices

Complementary to hydrocarbon value chain Demonstrated ability to manage major projects

and master new technologies Acceptable returns Sharing expertise with other industrial players

Strengthening position in solar Increasing production of photovoltaic cells (Photovoltech)

Proposing nuclear projects in oil producing countries

Accelerating R&D Clean coal and XTL, second-generation biomass

and CO2 sequestration

* at year-end for each period ; Photovoltech is a 47.8% owned subsidiary of Total**megawatt peak, equivalent to one million peak watts

Outlook for technological improvements and scale effects to allow for the development of competitive

new energy sources

15

BiomassClean coal

Photovoltaic cell production capacity* (Photovoltech)

MWp/y**

600

400

200

2007 2009(e) 2015(e)

16

Nuclear power: a necessary renaissance whose impact will only be felt in the long term

Development determined by nuclear power’s acceptability and the strength of its revival

Substantial investment, given the need to replace most existing nuclear power plants within 30 years

TWhNuclear power generation

0

1,000

2,000

3,000

4,000

5,000

2005 2015(e) 2030(e)

China

Other non-OECD

North America

Other OECD

Total’s growth in nuclear based on partnership : Suez, Areva

17

Total estimates

17

The Lacq CO2 capture and sequestration pilot:flagship contribution to CCS technology

Deforestation17%

Agriculture14%

Other GHGs, other12.5%

Coal

Power generation

and Industry18%

Construction 8%

Transportation 13%

Other5 %

Production and refining(operations)

5%

Industry incl. power

generation 7.5%

Oil

and

Gas

33.5%

CO2 capture and sequestrationSolutions for CO2-intensive industries

18

Combined effects of energy efficiency, energy mix evolution and CO2 sequestration will be necessary to reduce CO2 emissions