Registration document 2007 - Total.com

2
Middle East
34
Business overview
Upstream - Exploration & Production
TOTAL has been developing long-term partnerships in the
Middle East for eighty years. TOTAL’s 2006 share of
production in the Middle East (including the production of
equity affiliates and unconsolidated subsidiaries) increased
by 2% compared to 2005, primarily due to the increase in
production from the United Arab Emirates. It reached
406 kboe/d in 2006 (representing 17% of the Group’s
overall production), compared to 398 kboe/d in 2005 and
412 kboe/d in 2004. Between 2003 and 2006, TOTAL has
developed its LNG activities, launching the Yemen LNG
project and acquiring an interest in the Qatargas II project.
Saudi Arabia
TOTAL has a 30% interest in a joint venture with state-owned
Saudi Aramco for natural gas exploration in a 200,000 km2 area
in southern Rub Al-Khali. An initial five-year period of work began
in January 2004. A 137,800 km2 gravimetric survey was
performed in 2004. An 18,250 km 2D seismic campaign,
launched in 2004 on the same site, continued in 2005 before
being completed late in 2006. A drilling rig was mobilized mid-
2006 and the first exploration well was completed without
encountering producible hyrdocarbons.
United Arab Emirates
TOTAL’s activities in the United Arab Emirates are located in Abu
Dhabi and Dubai, where the Group’s presence dates back to
1939 and 1954, respectively. TOTAL’s production in 2006
reached 267 kboe/d, compared to 249 kboe/d in 2005, and
246 kboe/d in 2004.
In Abu Dhabi, TOTAL holds a 75% interest (operator) in the Abu
Al Bu Khoosh field. TOTAL is also a 9.5% shareholder in the Abu
Dhabi Company for Onshore Oil Operations (ADCO), which
operates the Asab, Bab, Bu Hasa, Sahil and Shah onshore fields,
as well as a 13.3% shareholder in Abu Dhabi Marine (ADMA),
which operates the Umm Shaif and Lower Zakum offshore fields.
TOTAL holds a 15% interest in Abu Dhabi Gas Industries
(GASCO), a company that produces butane, propane, and
condensates from the associated gases produced by onshore
fields. TOTAL also holds 5% of the Abu Dhabi Gas Liquefaction
Company (ADGAS), a company that produces LNG, LPG, and
condensates from the natural gas produced by offshore fields.
The Group also has a 33.3% interest in Ruwais Fertilizer
Industries (FERTIL), which produces ammonia and urea from
methane supplied by the Abu Dhabi National Oil Company
(ADNOC).
In Dubai, TOTAL holds a 27.5% interest in the Fateh, Falah and
Rashid fields through the combination of its 50% interest in Dubai
Marine Areas Limited (DUMA, which holds 50% of the
concession offshore Dubai), and its 2.5% interest held directly by
Total E&P Dubai. An agreement was reached to relinquish this
concession at the beginning of April 2007.
TOTAL – Registration Document 2006
TOTAL is also a shareholder (24.5%) in Dolphin Energy Limited,
which is expected, in the summer of 2007, to begin the United
Arab Emirates marketing of the natural gas produced by the
Dolphin project in Qatar. Natural gas sales agreements for this
project were signed in 2003 and 2005, and the Qatari authorities
approved the final development plan in December 2003.
Iran
TOTAL signed the first buyback contract for the development of
the Sirri A&E fields in 1995. The Group’s production amounted to
20 kb/d in 2006, down from 2005 (23 kb/d) and 2004 (26 kb/d),
due principally to both the effect of the increase in oil prices and
the end of reimbursement for certain buyback contracts (Balal and
Sirri). The Group’s share of production comes from four buyback
contracts, on the Sirri, South Pars, Balal, and Dorood fields.
The Sirri A&E fields (60% interest in foreign consortium) have
been operated by the state-owned National Iranian Oil Company
(NIOC) since 2001. The Group’s reimbursement under this
contract should be completed in 2007, as the final amounts due
by NIOC were agreed upon late in 2006.
Average production (in 100%) from phases 2 and 3 of the
offshore South Pars gas and condensate field (40% interest in
foreign consortium) was slightly less than 2,000 Mcf/d and
90 kboe/d in 2006, equal to production in 2005 but down from
2004, due to major maintenance work that began in 2005,
continued in 2006 and is now complete. Production operations
have been conducted by NIOC since 2004.
The development of the Balal offshore oil field (through a 46.8%
interest in a foreign consortium) was completed, and the facilities
were transferred to NIOC in 2004.
The development of the Dorood field (through a 55% interest in a
foreign consortium) is nearly completed, with the additional
adjustment work needed following start-up underway.
In 2004, TOTAL signed several agreements with its partners
creating the framework for the Pars LNG liquefied natural gas future
project and its principal commercial terms. These agreements
outline the relationship between the Pars LNG plant (40%), in
charge of the liquefaction activities, and Block 11 of South Pars
(80%), expected to supply gas to the liquefaction plant. The project
calls for the initial construction of two trains, each with a capacity of
5 Mt/y of LNG, to be followed by the construction of a third train
with the same capacity. It is expected that the purchasers of LNG
from the project will also become partners in the project.
Pursuant to the agreed framework, engineering studies for the
natural gas liquefaction plant and the development of Block 11 of
South Pars were launched in 2005 and the bidding process to
award the principal supply and construction contracts began in
July 2006.
Kuwait
Since 1997, the Group has been providing technical assistance
for the upstream activities of state-owned Kuwait Oil Company
(KOC) under an agreement renewed late in 2006.