Oil Sands Sustainable Development

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

Chamber of CommerceFort McMurray, Alberta

21 January 2011

1 - Fort McMurray – 21 January 2011

2

Population and Growth driving Energy demand

OECD Non-OECD

Energy demandGDPPopulation

Energy demand growth mainly driven by transportation and power generationNeed to limit further energy demand

50

150

250

350

1980 2005 2030(e)

Mboe/d

1.2%

1.8 %

1.8 %

0.4 %

Trillions$ 2005

50

100

150

200

1980 2005 2030(e)

3.6 %

5.3%

2.0%

Average growth per year2005-2030(e)

1 %

2

4

6

8

10

1980 2005 2030(e)

Billions

1.1 %

0.3 %

(purchasing power parity)

Sources: Total estimates

1.5 %

1.8 %

0.5 % 3%3.7%

3.3 %

2.6%

1.4%

-- Fort McMurray – 21 January 2011

3

Solar, Wind, other renewable energiesHydroBiomass excluding biofuels

Nuclear

Coal

Gas

Biofuels

Oil

0

100

200

300

400

2005 2010 2015 2020 2025 2030

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

Source: Total estimates. * Million barrels of oil equivalent per day.

Mboe/d*

Fossil energies represent 81% incl. : •Oil : 35%

•Gas : 21%

Fossil energies represent 75% incl.:•Oil : 30%

•Gas : 22%

Efficient CO2 emissions management and diversification of energy supply are key issues

-- Fort McMurray – 21 January 2011

Significant hydrocarbon resources yet to be produced

Total estimates

Oil resources Gas resources

Conventional gas resources concentrated in Russia, Iran and QatarDevelopment of shale gas production in the US driving a reevaluation of unconventional gas resources

Transportation and liquefaction constraints limit development of isolated gas resources

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

Oil and gas resources require advanced technology and large scale investmentWith ample availability of oil and gas and existing infrastructure, hydrocarbons will be dominant fuel source for the next decades

~3,000 Bboe

Unconventional resourcesoil shale, shale gas,

coal bed methane, tight gas

Extra Heavy oil & Bitumen

New discoveries and increased recovery rate

Identified resources

33 years of production at current pace

50 years

100 years

70 years

~3,000 Bboe

55 years of production at current pace

80 years

>125 years

Already produced

4 - Fort McMurray – 21 January 2011

5

Billions of barrels

80

60

40

1000 2000 3000

20 OPECMiddle East

Extra

Oil shales

100

Billions of barrels

80

60

40

1000 2000 3000

20 OPECMiddle East

Extra

Oil shales

100

$/bbl

Billions of barrels

80

60

40

1000 2000 3000

20 OPECMiddle East

water

Extra

Oil shales

100

Billions of barrels

80

60

40

1000 2000 3000

20 OPECMiddle East

OtherConventional

Deep

Ultra deepwater

EnhancedRecovery

Extra Heavy

oil

Oil shales

100

Arctic

$/bbl

Break even oil price in 2010 (IRR >10%)

Sources: IEA, CERA, Total

But additional oil resources are more and more difficult and expensive to extract

- Fort McMurray – 21 January 2011

6

0

5

10

15

20

25

30

35

40

Heavy oil

LNG

Resources*: 40 Bboe / 40 years

Resources*> 40 years

(at December 31, 2009)

Total: meeting global energy demand

Diversified global portfolio offering balanced risks rewards

≥ 2 Bboe 1 - 2 Bboe ≤ 1 BboeResources* : 40 Bboe

Other liquids

Deep offshore

Other gas

Africa

Bboe12

Americas

Middle East / Asia6

Europe and CIS

2P reserves**> 20 years

1P reserves***12 years

* 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

- Fort McMurray – 21 January 2011

Total: focusing increasingly in growth areas

Represents approx. 50% of Total’s resource base

Producing

Under development

Under study

Unconventional gasHeavy oilDeep offshore LNG

Blocks 17, 14 - AngolaAkpo, Bonga - NigeriaMoho Bilondo - CongoTahiti - Gulf of Mexico

Pazflor - AngolaUsan - Nigeria

Laggan Tormore - UK

CLOV - AngolaEgina - Nigeria

Block 32 - Angola

Surmont Ph.2 - Canada

Joslyn - CanadaFort Hills - Canada

Northern Lights - Canada

Bemolonga - Madagascar

JV Barnett Shale - US

Ahnet - AlgeriaSulige - China

Montélimar - FranceNeuquen - Argentina

QG 1, QG 2 T5 - QatarBontang - Indonesie

NLNG - NigeriaSnohvit - Norvège

Yemen LNG (2 trains)Adgas , Oman LNG

Angola LNG – AngolaGLNG – Australia

Ichthys - AustraliaShtokman - RussiaNigerian projects

Expansion JV Barnett Shale – US

GLNG - Australia

Petrocedeño - Venezuela

Surmont Ph.1 - Canada

7 - Fort McMurray – 21 January 2011

8

Fort McMurray

Total in Canada: developing strong base to grow production

Griffon

Asphalt Creek

Buckton

Emerillon

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

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

Surmont (TOTAL 50%/ConocoPhillips operator 50%)In-Situ (SAGD), Prod. 100%: Ph. 1: 23 kbpd, Ph. 2: 110 kbpd, 2015

Northern Lights (TOTAL operator50% /SINOPEC 50%)Mining, Prod. 100%: ult. 100 kbpd bitumen

VOYAGEUR Upgrader (TOTAL 49%*/SUNCOR operator 51%*)Upgrading: 245 kbpsd 2016

Lease Total Operator Total Partner Operated - Fort McMurray – 21 January 2011 * 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 producing20 well pairs at start-up from two padsSteam injection started in June 2007Currently producing 23,000 bbl/d

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

Technology investment to minimize impactsSAGD technology continuously enhancedES-SAGD pilot under developmentSAGD creates less land disturbance although GHG emissions still a challengeCO2 Capture and Storage (CCS) experience from Lacq & others

Developing expertise in a key in situ technology

Surmont (Total 50%)

9 - Fort McMurray – 21 January 2011

Joslyn: preparing production for 2017 - 2018

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 Canada committed to developing technically and environmentally challenging project

Joslyn (Total 38.25%*)

Total operator, Suncor36.75%,Oxy 15%, Inpex 10%Leases covering area of 221 km2, of which 70 km2

10 - Fort McMurray – 21 January 2011 10

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

11

Fort Hills (Total 39.2%*)

11 - Fort McMurray – 21 January 2011

Voyageur Upgrader : upgrading in Alberta

Operated by Suncor (51%*)

Design: 245,000 bb/sd

Scheme: Delayed Coker 3 pairs of drums

Close to existing Suncor Upgraders

Hot bitumen from Fort Hills and Joslyn North mines

Project resumed after interruption - planned start-up 2016

12

Voyageur Upgrader (Total 49%*)

12 - Fort McMurray – 21 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

13

Northern Lights Partnership (Total 50%)

13 - Fort McMurray – 21 January 2011

14

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

“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

“Dirty Oil”

“The most destructive project on earth”Environmental Defense

- Fort McMurray – 21 January 2011

15

Looking at the CO2 intensity of oil sands production

Up to 45 kg CO2 /b

62 kg CO2 /b

JOSLYN/SURMONT

Up to 70 kg CO2 /b

REFERENCES

38 kg CO2 /b (incl. Cogen)

MININGMINING

MINING

Power by others

SAGDPower by others

CONVENTIONALOIL*

15 – 100 kg CO2e/b

(~25 kg CO2e/b)

- Fort McMurray – 21 January 2011

16

Reducing Water Usage in Oil Sands Projects : Joslyn & Surmont

Net Water Withdrawal Intensity (bbl water per bbl bitumen)

In-Situ Mining

Surmont SAGD: 0.3 bw/bb Joslyn N Mine: 1.6 bw/bb (steady state) up to 2.3 (maximum)

Other projects: 0.2 - 1 bw/bb Other projects: 2 - 4 bw/bb

Surmont SAGD 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 waterClo

sed

circ

uit s

yste

m

- Edmonton – January 2011- Fort McMurray – 21 January 2011

17

Land Disturbance Footprint in Boreal ForestCanada’s boreal forest : 3.2 million km2

Oil sands: 140,000 km2 of which

4,800 km2 is mineable (0.1% of Canada’s or 1% of Alberta’s boreal forest)

~ 20 000 km2 considered for in situ developments

Currently disturbed by oil sands mines: 602 km2 (< Calgary foot print)

Joslyn North Mine: reducing disturbance and accelerating reclamation processYet biodiversity wealth must be protected and cumulative impacts managed

Joslyn North Mine 70 km2

61% to be reclaimed by closure using progressive reclamation, rest 7 yrs later

Existing mining projects typically <40% reclaimed by closure

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

- Fort McMurray – 21 January 2011

18

Stakeholder relations: critical to acceptability

Strong industry cooperation to address cumulative effects

First Nations concerns addressed Treaty rights Cumulative impacts Cultural preservation & respect Business opportunities

Engagement with communities based on dialogue and empowerment Mitigation Plans Community Content Plans Socio-Economic agreements

Reconciling economic development with environmental and social performance

Community investment

Over C$5M invested since 2008

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

Canadian college & university partnerships & scholarships

- Fort McMurray – 21 January 2011

Creating economic benefits: Committed to Canada’s business success

$20B cumulated investment in Canada by 2020

4 major projects by 2020 = > 200,000 bb/d Total share

From 250 to 1,500 full time jobs in 2016

Thousands of contractors during construction

1919 - Fort McMurray – 21 January 2011

A global energy company investing in Canada’s long term economic prosperity

Business relationships: critical to shared success

Collaborative spirit

Creating value through best practices sharing and synergies

Developing better technologies Osli Tailings consortium

Multiplying local opportunities Employment Supply Chain Socio-Economic Development

Developing stronger Communities

2020 - Fort McMurray – 21 January 2011

Building partnerships to create shared value and sustainability

Business relationships: critical to shared challenges

Managing regional growth in context of increased activity

Meeting Human resources – qualified and plentiful workforce

Planning to anticipate associated infrastructure needs

Managing costs

Improving significantly HSE performance

2121 - Fort McMurray – 21 January 2011

Working together to find win-win solutions

Strategic alliance completion & projects review with Suncor

Complete JNMP regulatory process and Basic Engineering

FH and V Projects sanctions based on anticipated timelines

Ramp up TEPCA recruiting

Additional TEPCA personnel in our local office, i.e. Business Development Coordinator

TEPCA vendor qualification and contracting processes

Maintaining dialogue with business community and stakeholders

2222 - Fort McMurray – 21 January 2011

Phased approach aligned with project timelines

Next steps

23

Addressing sustainable development in local business context

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

Massive investments High breakeven Unknown CO2 cost More stringent royalties regime

Stakeholder relations

Environmental Challenges

Challenging Economics

CO2, water, land footprint, strict administrative process, local acceptability

Further R&D to improve management of resources and environment

Engaging communities based on dialogue and sustainable partnershipsWorking with local business

- Fort McMurray – 21 January 2011