Registration document 2007 - Total.com

Exploration & Production
Exploration and development
TOTAL’s Upstream segment intends to continue to combine
long-term growth and profitability at the levels of the best in the
industry.
TOTAL evaluates exploration opportunities based on a variety of
geological, technical, political and economic factors (including
taxes and licence terms), as well as on projected oil and gas
prices. Discoveries and extensions of existing discoveries
accounted for approximately 77% of the 2,460 Mboe added to
the Upstream segment’s proved reserves during the three-year
period ended December 31, 2006 (before deducting production
and sales of reserves in place and adding any acquisitions of
reserves in place during this period). The remaining 23% comes
from revisions.
TOTAL continued to follow an active exploration program in
2006, with exploration investments of consolidated subsidiaries
amounting to 1,214 M€ (including unproved property acquisition
costs, excluding the acquisition of an interest in the Ichthys
project in Australia). The principal exploration investments were
made in Nigeria, the United Kingdom, Angola, the United States,
Libya, Venezuela, Norway, Algeria, Congo, Kazakhstan, Canada,
Indonesia, Australia, Argentina, Cameroon, Mauritania, Gabon,
China, Azerbaijan and Thailand. In 2005, TOTAL's exploration
investments amounted to 644 M€, principally 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 investments
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.
The development expenditures of the Group’s consolidated
Exploration & Production subsidiaries amounted to 6.0 B€ in
2006 (including a share in the Ichthys project in Australia),
primarily in Norway, Angola, Nigeria, Kazakhstan, Indonesia,
Congo, Yemen, Qatar, the United Kingdom, Canada, Australia,
the United States, Venezuela, Azerbaijan and Gabon. The
development investments for 2005 amounted to 5.2 B€ and
were carried out principally in Norway, Angola, Nigeria,
Kazakhstan, Indonesia, the United Kingdom, Qatar, Congo,
Azerbaijan, Gabon, Canada and Yemen. In 2004, development
expenditures amounted to 4.1 B€ and were made principally in
Norway, Angola, Nigeria, Indonesia, Kazakhstan, the United
Kingdom, Qatar, Azerbaijan, the United States, Gabon, Congo,
Libya, Trinidad & Tobago, Venezuela and Iran.
Reserves
Business overview
Exploration & Production - Upstream
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, estimates of reserves are not exact measurements
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 as of December 31, 2006, 2005 and 2004, see
“Supplemental Oil and Gas Information (Unaudited)”, included
herein beginning on page 237.
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 2006 have been
determined based on the Brent price on December 31, 2006
($58.93/b).
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TOTAL – Registration Document 2006 13