Registration Document 2005 - Total.com

9
Appendix 1 – Consolidated financial statements
Notes to the consolidated financial statements
30. Other risks and contingent liabilities
TOTAL is not currently aware of any event, litigation, risks or
contingent liabilities that could materially adversely affect the
financial condition, assets, results or business of the Group.
Antitrust Investigations
1. Following investigations into some commercial practices in the
chemicals industry in the United States, Arkema and some other
chemical subsidiaries of the Group are involved in several civil
liability lawsuits in the United States and Canada for violations of
antitrust laws. TOTAL S.A. has been named in certain of these
suits as the parent company.
In Europe, the European Commission commenced investigations
in 2000, 2003 and 2004 into alleged anti competitive practices
involving certain products sold by Arkema or its subsidiaries.
Under one of these investigation, in January 2005 the European
Commission fined Arkema France 13.5 M€ and jointly fined
Arkema France and Elf Aquitaine 45 M€. Arkema France and
Elf Aquitaine have appealed to the Court of First Instance of
the European Union. The Commission notified Arkema France,
TOTAL S.A. and Elf Aquitaine of complaints concerning two other
product lines in January and August 2005, respectively. Arkema
France has cooperated with the authorities in these procedures
and investigations. No facts have been alleged that would
implicate TOTAL S.A. or Elf Aquitaine in these practices.
2. Moreover, as a result of investigations started by the European
Commission in October 2002 by the European Commission
concerning certain Refining & Marketing subsidiaries of the Group,
TOTAL Nederland N.V. received a statement of objections in
October 2004. A statement of objections regarding these practices
has also been addressed to TOTAL S.A., although no facts have
been alleged that would implicate TOTAL S.A. in these practices.
3. Given the discretionary powers granted to the European
Commission for determining fines, it is not currently possible to
determine with certainty the outcome of these investigations
and lawsuits. In 2005, given the Commission’s stated intention
to more severely punish anti competitive practices and taking
into account the Commission’s recent decisions in this area, the
Group has revalued the amount of the related provisions recorded
in its consolidated financial statements at the end of 2005.
The Group has increased the provisions recorded in its
consolidated financial statements as of December 31, 2005
to cover the risks described in paragraph 1 above to 482 M€,
an increase of 292 M€ compared to those booked as of
December 31, 2004. (see note 19 to the consolidated financial
statements “Other non-current liabilities”).
218 TOTAL - Registration Document 2005
4. TOTAL S.A. and Elf Aquitaine are contesting their liability and
the method of determining these fines. Although it is not possible
to predict the outcome of these proceedings, the Group believes
that they will not have a material adverse affect on its financial
condition or results.
Buncefield
On December 11, 2005, several explosions followed by a major fire
occurred at Buncefield, north of London, in an oil storage depot
operated by HOSL, a company in which the British subsidiary of
TOTAL holds 60% and another oil group holds 40%.
The explosion injured forty people, most of whom suffered slight
wounds, and caused substantial property damage to the depot and
the buildings and homes located nearby. The causes of the explosion
are still not known and liabilities have not been established.
The Group is insured for damage to its facilities, operating losses and
claims from third parties under its civil liability and believes that, based
on the current information available, this accident should not have a
significant impact on its financial position, cash flows or results.
Venezuela
The Group was informed by the Venezuelan government of a
change in the method for calculating royalties. The Group also
received a notice of additional tax assessment on the corporate
income tax for the years 2001-2004.
The Group believes that it has complied with the applicable fiscal and
legal provisions. The Group has paid a higher amount of royalties with
reservations. The tax assessment is currently being reviewed.
In addition, at the request of the Venezuelan government,
discussions are underway for revising the Jusepin contract. The
Venezuelan government has made similar requests to all companies
operating under this type of contract.
Bolivia
In May 2005 a new law changing the fiscal and regulatory
framework for oil and gas operations in Bolivia was passed. TOTAL
has asked the Bolivian authorities to open negotiations pursuant
to a French-Bolivian treaty for the protection of investments in
order to maintain the economic terms and a regulatory framework
satisfactory to both parties.