Registration Document 2005 - Total.com

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3 Trends and outlook Outlook Management Report of the Board of Directors Trends and outlook Since the start of 2006, the oil market environment has remained globally favorable, with high oil and gas prices but with European refining margins significantly below fourth quarter 2005 levels. In Upstream, TOTAL intends to pursue a strategy of profitable growth that should translate into production growth of close to 4% per year on average between 2005 and 2010 in a 40 $/b Brent environment (with growth of 7% per year on average in Africa through 2010). Beyond 2010, the portfolio of projects offers strong visibility, thanks to continued exploration success over the past years and to new giant gas and heavy oil projects. In Downstream, based on an environment with refining margins near the average of the past five years (TRCV at 25 $/t), the contribution of new conversion and desulphurization projects combined with ongoing productivity programs should allow the segment to achieve a ROACE of 20% by 2010 and increase cash flow from operating activities by 0.9 billion euros per year. In Petrochemicals, TOTAL’s objective is to continue to increase its polymers production, particularly in Asia and the Middle East, while reducing its fixed cost per unit. The Chemicals segment continues to target a ROACE of 12% at mid-cycle by 2010. In the area of Renewable Energies, in a new step forward in the wind energy business, TOTAL has been selected to build the largest onshore wind farm project in France in the Aveyron region. The 90 MW project is expected to start up in 2008. In addition, the Group expects a five-fold increase in the production of its photovoltaic cells and plans to build a new solar panel factory in Toulouse. Implementing the Group’s growth strategy depends on a sustained investment program. Using an exchange rate of 1.20 $/€, the 2006 Capex budget (excluding acquisitions) is about 13.5 billion dollars, including 10 billion dollars for the Upstream segment. Over the 2006-2010 period, investments should remain relatively stable. 2006 SENSITIVITIES TO THE MARKET ENVIRONMENT Market parameters Scenario Change 74 TOTAL - Registration Document 2005 The net-debt-to-equity ratio for the Group is targeted to remain at around 25% to 30%. TOTAL intends to pursue a dynamic dividend policy. Cash flow remaining after investments and dividends will be available for share buybacks. The 2006-2007 period will be notable for the size and number of major Upstream project start-ups, including Dalia, BBLT and Rosa in Angola, Dolphin in Qatar, Surmont and Joslyn in Canada as well as the start-up of the hydrocracker at the Normandy refinery. The contribution of these start-ups will be significant by the end of 2006. During 2006, TOTAL expects to rebalance its Chemicals portfolio by spinning off Arkema, which is one of the proposals shareholders will vote on at the May 12 Annual Meeting. Risks and uncertainties Due to the nature of its business, the Company is subject to market risks (in both the oil and financial markets), industrial and environmental risks related to their operations, and to geopolitical risks stemming from the global presence of most of its activities. In addition, risks related to cash management activities and to interest rate and foreign exchange rate financial instruments are managed according to strict rules set by the Company’s Management, which also oversees the systematic centralization of liquidity positions and the management of financial instruments. A detailed description of these risks is included in the 2005 Registration Document (pages 76 to 88). Also included in the Registration Document, in accordance with Article L. 225-102-1 of the French Commercial Code, is information on the manner in which TOTAL S.A. accounts for the social and environmental effects of its activities (pages 251 to 256). Estimated impact on operating results Estimated impact on net operating results €/$ 1.20 $/€ +0.1 €/$ +1.6 B€ +0.8 B€ Brent 40-50 $/b +1 $/b +0.41 B€ +0.17 B€ European refining margins TRCV 25 $/t +1 $/t +0.09 B€ +0.06 B€
Risk factors Market risks p. 76 • Sensitivity to market environment p. 76 • Oil and gas market related risks p. 76 • Financial markets related risks p. 77 • Management of currency exposure p. 77 • Management of short-term interest rate exposure and cash p. 77 • Management of interest rate risk on non-current debt p. 77 • Sensitivity analysis on interest rate and foreign exchange risk p. 78 • Management of counterparty risk p. 79 • Stock market risk p. 79 • Liquidity risk p. 79 Legal risks p. 80 • Legal aspects of exploration and production activities p. 80 • Grande Paroisse p. 81 • Antitrust investigations p. 81 • Sinking of the Erika p. 82 • Buncefield p. 82 • Myanmar p. 83 • South Africa p. 83 Industrial and environmental risks p. 84 • Types of risks p. 84 • Risk evaluation p. 84 • Risk management p. 85 • Asbestos p. 85 Risk factors Content TOTAL - Registration Document 2005 4 Other specific risks p. 86 • Risks related to oil and gas exploration and production p. 86 • Risks related to economic and political factors p. 86 • ILSA - Other US regulations p. 87 • SEC investigation p. 87 • Geopolitical situation in the Middle East p. 87 • Geopolitical and economic situation in South America p. 87 • Risks related to competition p. 88 Insurance and risk management p. 89 • Organization p. 89 • Risk and insurance management policy p. 89 • Insurance policy p. 90 75
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Registration Document 2005
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Registration Document 2005 This is
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Key figures Selected financial info
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104,652 2003 French GAAP Sales (M
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DOWNSTREAM Refined product sales (k
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Business overview History and strat
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Upstream TOTAL’s Upstream segment
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Exploration & Production Exploratio
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Production TOTAL’s average daily
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Presentation of production activiti
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Europe Year of entry into the count
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Africa TOTAL has been present in Af
Page 25 and 26: Libya The Group’s share of produc
Page 27 and 28: North America The Group’s presenc
Page 29 and 30: On the Yucal Placer field, the init
Page 31 and 32: Commonwealth of Independent States
Page 33 and 34: The Netherlands TOTAL is the second
Page 35 and 36: Kuwait Since 1997, the Group has pr
Page 37 and 38: Gas & Power The Gas & Power sector
Page 39 and 40: Middle East In Qatar, negotiations
Page 41 and 42: TOTAL is pursuing decentralized rur
Page 43 and 44: Refining & Marketing On December 31
Page 45 and 46: Marketing The Group is one of the l
Page 47 and 48: the provinces of Shanghai, Jiangsu
Page 49 and 50: All of TOTAL’s trading activities
Page 51 and 52: Base Chemicals TOTAL’s Base Chemi
Page 53 and 54: Specialties TOTAL’s Specialties s
Page 55 and 56: trademarks. It is present on three
Page 57 and 58: Other activities E-Commerce In 2005
Page 59 and 60: Organizational structure Position o
Page 61 and 62: Executive Committee Trading & Shipp
Page 63 and 64: Management Report of the Board of D
Page 65 and 66: Market environment Management Repor
Page 67 and 68: Upstream results (in millions of eu
Page 69 and 70: Downstream results (in millions of
Page 71 and 72: Adoption of IFRS rules The principa
Page 73 and 74: Liquidity and capital resources Lon
Page 75: Research and development Research a
Page 79 and 80: Financial markets related risks Wit
Page 81 and 82: The non-current debt in dollars des
Page 83 and 84: Grande Paroisse An explosion occurr
Page 85 and 86: Myanmar Under the Belgian “univer
Page 87 and 88: Risk management Risk evaluations le
Page 89 and 90: ILSA - Other US regulations In 2001
Page 91 and 92: Insurance and risk management Organ
Page 93 and 94: Corporate governance Board of Direc
Page 95 and 96: Anne Lauvergeon 46 years old. Indep
Page 97 and 98: Additional information required und
Page 103 and 104: Statutory auditors Statutory audito
Page 105 and 106: Executive Officers’ Compensation
Page 107 and 108: Report of the Chairman of the Board
Page 109 and 110: july 19: • estimated earnings for
Page 111 and 112: Nominating & Compensation Committee
Page 113 and 114: The hydrocarbon reserves are review
Page 115 and 116: Headcount, Employee shareholdings,
Page 117 and 118: Allocation of TOTAL share subscript
Page 119 and 120: TOTAL share subscription and purcha
Page 121 and 122: Allocation of TOTAL restricted shar
Page 123 and 124: Elf Aquitaine share subscription op
Page 125 and 126: TOTAL and its shareholders TOTAL sh
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Four-for-one stock split A proposal
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TOTAL share over the last 18 months
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Dividend payment on Stock Certifica
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• were repurchased under the auth
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These transactions may be carried o
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Shareholders Relationship between T
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The holdings of the principal share
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Shareholders Estimate of capital di
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The above-mentioned French forms ar
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• • • • On November 18 and
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2006 Calendar February 15 Results f
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Financial information Historical fi
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Additional information Financial in
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General information Share capital p
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• Authority to grant restricted e
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Potential capital as of December 31
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General information Articles of inc
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Shareholders’ Meetings Notices of
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Documents on display The documents
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Statutory auditors’ report on the
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Consolidated statement of income TO
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Consolidated statement of cash flow
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Notes to the consolidated financial
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The cost of employee-reserved capit
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K. Impairment of long-lived assets
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Crude oil costs include raw materia
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Fair value option In June 2005, the
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A. Information by business segment
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Appendix 1 - Consolidated financial
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C. Adjusting items by business segm
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7. Other income and other expense A
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RECONCILIATION BETwEEN PROVISION FO
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12. Equity affiliates: investments
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14. Other non-current assets Append
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Capital increase reserved for Group
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The Group expects to contribute 371
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19. Other non-current liabilities A
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(in millions of euros) TOTAL CAPITA
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Impact on net income Appendix 1 - C
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23. Commitments and contingencies A
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B. TOTAL share purchase plan Append
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25. Payroll and staff Appendix 1 -
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B. Financial instruments related to
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Management of short-term interest r
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31. Other information A. Research a
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The consolidated balance sheet and
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Note 32.6: IFRS restatements with a
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Fixed assets Component Impairment o
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Fixed assets Component Impairment o
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53.2% 95.7% Elf Aquitaine 99.5% 100
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Oil and gas reserves p. 232 • Cha
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Changes in liquids reserves Appendi
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Changes in liquids and gas reserves
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Costs incurred in oil and gas prope
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Standardized measure of discounted
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Other information Accounting for ex
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Appendix 3 - TOTAL S.A. Special aud
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Statutory auditors’ report on the
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Summary balance sheet at December 3
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Other five-year financial data TOTA
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Employment and environmental inform
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4) Compensation TOTAL - Registratio
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Environment Pursuant to French Law
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Five-year consolidated financial in
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10. CAPITAL RESOURCES 10.1. Informa
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TOTAL S.A. Registered Offi ce: 2, p
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Registration Document 2005 - Total.com

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