Registration Document 2005 - Total.com

Exploration & Production
Exploration and development
TOTAL’s Upstream segment intends to continue to combine longterm
growth and profitability at the level of the best in the industry.
TOTAL evaluates exploration opportunities based on a variety of
geological, technical, political and economic factors (including taxes
and concession terms), as well as on projected oil and gas prices.
Discoveries and extensions of existing discoveries accounted for
approximately 73% of the 2,607 Mboe added to the Upstream
segment’s proved reserves during the three-year period ended
December 31, 2005 (before deducting production and sales of
reserves in place and adding any acquisitions of reserves in place
during this period). The remaining 27% comes from revisions.
TOTAL continued to follow an active exploration program in
2005, with exploration expenditures of consolidated subsidiaries
amounting to 644 M€ (including unproved property acquisition
costs). The principal exploration expenditures were made in Nigeria,
Angola, the United Kingdom, Norway, Congo, the United States,
Libya, Algeria, Argentina, Kazakhstan, Colombia, Indonesia and
the Netherlands. In 2004, the Group’s exploration expenditures
amounted to 651 M€, principally in the United States, Nigeria,
Angola, the United Kingdom, Libya, Algeria, Congo, Kazakhstan,
Norway, Bolivia, the Netherlands, Colombia and Indonesia. In 2003,
exploration expenditures amounted to 630 M€ principally in Nigeria,
Kazakhstan, the United States, Libya, Angola, the United Kingdom,
the Netherlands, Norway, Bolivia, Algeria, Congo, Brunei, Brazil and
Venezuela.
The development expenditures of the Group’s consolidated
Exploration & Production subsidiaries amounted to 5.2 B€ in 2005,
primarily in Norway, Angola, Nigeria, Kazakhstan, Indonesia, the
United Kingdom, Qatar, Congo, Azerbaijan, Gabon, Canada and
Yemen. 2004 development expenditures amounted to 4.1 B€.
The principal development investments for 2004 were carried
out in Norway, Angola, Nigeria, Indonesia, Kazakhstan, the
United Kingdom, Qatar, Azerbaijan, the United States, Gabon,
Congo, Libya, Trinidad & Tobago, Venezuela and Iran. In 2003,
development expenditures amounted to 3.8 B€ and were made
principally in Norway, Angola, Nigeria, Indonesia, the United States,
Iran, the United Kingdom, Gabon, Azerbaijan, Qatar, Congo and
Venezuela.
Reserves
Business overview
Exploration & Production - Upstream
TOTAL - Registration Document 2005
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The definitions used for proved, proved developed and proved
undeveloped oil and gas reserves are in accordance with the
applicable U.S. Securities & Exchange Commission regulation,
Rule 4-10 of Regulation S-X. Proved reserves are estimated using
geological and engineering data to determine with reasonable
certainty whether the crude oil or natural gas in known reservoirs is
recoverable under existing economic and operating conditions.
This process involves making subjective judgments. Consequently,
measures of reserves are not precise and are subject to revision.
The estimation of proved reserves is controlled by the Group
through established validation guidelines. Reserves evaluations are
established annually by senior level geoscience and engineering
professionals (assisted by a central reserves group with significant
technical experience) including reviews with and validation by senior
management.
Significant features of the reserves estimation process include:
•
internal peer reviews of technical evaluations also to ensure that
the SEC definitions and guidance are followed, and
•
a requirement that management make significant funding
commitments toward the development of the reserves prior to
booking.
TOTAL’s oil and gas reserves are reviewed annually to take
into account, among other things, production levels, field
reassessments, the addition of new reserves from discoveries and
acquisitions, disposals of reserves and other economic factors.
Unless otherwise indicated, references to TOTAL’s proved reserves,
proved developed reserves, proved undeveloped reserves and
production reflect the entire Group’s share of such reserves or
production. TOTAL’s worldwide proved reserves include the proved
reserves of its consolidated subsidiaries as well as its proportionate
share of the proved reserves of equity affiliates and of two
companies accounted for by the cost method.
For further information concerning changes in TOTAL’s
proved reserves at December 31, 2005, 2004 and 2003, see
“Supplemental Oil and Gas Information (Unaudited)”, included on
page 231 and after.
Rule 4-10 of Regulation S-X requires the use of the year-end price,
as well as existing operating conditions, to determine reserve
quantities. Reserves at year-end 2005 have been determined
based on the Brent price on December 31, 2005 ($58.21/b).
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