Registration Document 2005 - Total.com

Refining & Marketing
On December 31, 2005, TOTAL’s worldwide refining capacity was
2,708 kb/d. The Group’s refined products sales in 2005 increased
to 3,885 kb/d (including trading activities), compared to 3,771 kb/d
in 2004 and 3,652 kb/d in 2003. TOTAL is the largest refinermarketer
in Europe (1) and, with a market share of 11%, the largest
marketer in Africa. As of December 31, 2005, TOTAL’s marketing
network consisted of 16,976 retail stations worldwide (compared to
16,857 in 2004 and 17,284 in 2003), of which approximately 50%
are owned by the Group. TOTAL’s refineries also allow the Group
to produce a broad range of specialty products, such as lubricants,
liquefied petroleum gas (LPG), jet fuel, petrochemical feedstock,
special fluids and bitumens.
At the end of 2003, TOTAL decided to accelerate its program
for investment in refining to respond to an increasing demand for
diesel fuel in Europe and to take advantage of the price differential
between heavy crude oil and light crude oil. This program, which
was launched in 2004 with the start of construction of a distillate
hydrocracker (DHC) at the Group’s refinery in Normandy, France,
includes major conversion and desulphurisation projects. Under
this program, the Group plans to invest an average of 800 M€ per
year over the period from 2005 to 2010 (excluding capitalization of
turnarounds).
For its marketing activities, the Group’s strategy is to strengthen
its existing positions in Europe and Africa and to pursue targeted
growth in certain other markets, notably in Asia.
Refining
As of December 31, 2005, TOTAL held interests in 27 refineries
(including 13 that it operates), located in Europe, the United States,
the French West Indies, Africa and China.
TOTAL’s activities in Western Europe have a refining capacity of
2,344 kb/d, accounting for more than 85% of the Group’s refining
capacity (2) and making TOTAL the leading refiner in this region.
TOTAL operates 12 refineries in Western Europe. Six are located
in France, one in Belgium, one in Germany, two in the United
Kingdom, one in Italy and one in the Netherlands. TOTAL also
has minority interests in another German refinery (Schwedt) and
participates in four refineries in Spain through its interest in Cepsa.
In the United States, TOTAL operates the Port Arthur, Texas refinery
near the Gulf of Mexico, which has a capacity of 174 kb/d. This
refinery benefits from the increasing integration of refining and
petrochemical operations.
(1) Company sources, on the basis of refining capacity and/or sales.
(2) Company sources ; PFC Energy September, 2005.
(3) To which should be added a crude distillation unit (CDU), a vaccuum distillation unit (VDU) and a steam methane reformer (SMR).
Business overview
Refining & Marketing - Downstream
TOTAL - Registration Document 2005
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From 2005 to 2010, TOTAL plans to invest approximately 5 B€ to
adapt the Group’s refineries to changes in the oil refining market as
well as to improve energy efficiency and industrial safety.
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Most significantly, these investments are designed to increase the
production of diesel fuel, the demand for which continues to grow
in Europe. The first project of this type is the construction of a
distillate hydrocracker (DHC) at the Normandy refinery in France.
The construction of this unit began in the spring of 2004 and the
unit is scheduled to enter into operation in the summer of 2006.
This project is designed to allow the Group to respond to the
growing European demand for light distillates (in particular diesel
and jet fuel), to reduce the refineries production of heavy fuel oil
and to produce high quality feedstock for lubricants and specialty
fluids as well as naphta for the neighboring steamcracker.
The project represents a total investment of approximately
500 M€ over the period from 2003 to 2006, and includes the
construction, at the same time, of a hydrogen production unit
expected to cost approximately 100 M€. A hydrocracker (3) with
a capacity 2.1 Mt is also planned to be built at Cepsa’s refinery
located in Huelva in Spain and to enter into operation near the
end of 2009. This project represents an investment of nearly 1 B€.
In addition, these investments are also intended to increase the
Group’s capacity to refine high-sulphur crude oil in order to adapt
to the increasing proportion of heavy and high-sulphur crude
oils being imported from the Commonwealth of Independent
States (CIS). The first of these projects is the construction of a
desulphurization unit at the Lindsey (Immingham) refinery in the
United Kingdom. This investment of approximately 0.2 B€ should
allow the plant to raise the proportion of high-sulphur crude that
it can process from 10% to 70%. The unit is scheduled to begin
operating near the end of 2008. A second project to construct a
desulphurization unit at the Donges refinery in France is currently
being studied.
These investments will also be used to build a deep-conversion
unit in North America to treat heavy crude oil from Venezuela and
Mexico. TOTAL is currently studying a project to build a coker
that would start operations in 2010. The investment related to this
project is estimated at approximately $0.9 billion.
Finally, these investments will be used to improve the reliability
and energy efficiency of the Group’s refineries, to reduce
emissions and for maintenance.
In 2005, TOTAL raised its interest in the Rome refinery in Italy to
71.9% by acquiring an additional 14.4% from Shell, who also sold
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