Registration document 2007 - Total.com

Refining & Marketing
As of December 31, 2006, TOTAL’s worldwide refining capacity
was 2,700 thousand barrels per day (kb/d). The Group’s refined
products sales worldwide were 3,786 kb/d (including trading
activities), compared to 3,792 kb/d in 2005 and 3,761 kb/d in
2004. TOTAL is the largest refiner/marketer (1) in Western Europe
and, with a market share of 11%, the largest marketer in Africa (2) .
As of December 31, 2006, TOTAL’s marketing network consisted
of 16,534 retail stations worldwide (compared to 16,976 in 2005
and 16,857 in 2004), 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, special fluids, bitumen and
petrochemical feedstock.
Since 2004 TOTAL has pursued a sustained refining investment
program to respond to changes in the oil market. This program,
initiated with the construction of a distillate hydrocracker (DHC) at
the Group’s refinery in Normandy, France, continued in 2006 with
the launch of engineering studies for two major projects: the
construction of a full-conversion refinery in Saudi Arabia and the
construction of a deep conversion unit at the Port Arthur, Texas,
refinery. Under this program, the Group plans to invest an
average of 1 B€ per year in refining over the 2006-2010 period
(excluding capitalization of turnarounds).
For its marketing activities, the Group’s strategy is to strengthen
its positions in Europe and Africa and to pursue targeted growth
in certain other markets, in particular in Asia.
Refining
As of December 31, 2006, TOTAL held interests in 27 refineries
(including thirteen that it operates), located in Europe, the United
States, the French West Indies, Africa and China.
TOTAL’s refining capacity in Western Europe is 2,342 kb/d,
accounting for more than 85% of the Group’s global refining
capacity and making TOTAL the leading refiner in this region.
TOTAL operates twelve 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)
as well as interests in four Spanish refineries through its holdings
in CEPSA.
In the United States, TOTAL operates the Port Arthur, Texas,
refinery near the Gulf of Mexico, which has a production capacity
of 174 kb/d.
TOTAL, Sinochem and PetroChina have been in partnership for
more than ten years in the WEPEC refinery located in Dalian
(1) Source: Oil and Gas Journal, December 18, 2006.
(2) Company sources, PFC Energy, December 2006.
Business overview
Refining & Marketing - Downstream
(China), whose annual refining capacity averages 219 kb/d.
TOTAL holds a 22.41% interest in this refinery.
2
From 2006 to 2010, TOTAL plans to invest approximately 5 B€ in
refining, excluding capitalization of turnarounds. Nearly 40% is
designated for projects to increase refining capacities and for
conversion projects to upgrade heavier crudes. Nearly 20% is
designated for developing units and desulphurization to process
high-sulphur crudes. Finally, approximately 30% is designated for
modernizing refining sites, improving safety and energy efficiency
and reducing environmental impacts.
• Concerning growth and conversion, two major projects
were initiated in Saudi Arabia and the United States in the
first half 2006.
TOTAL and The Saudi Arabian Oil Company (Saudi Aramco)
signed a Memorandum of Understanding (MOU) related to a
project for the construction and operation of a refinery with a
capacity of 400 kb/d in Jubail, Saudi Arabia. This fullconversion
refinery is being designed to process Arabian
Heavy crude and produce high-quality refined products
adapted for all markets, mainly for export. A comprehensive
joint Front-End Engineering and Design (FEED) study was
undertaken in July 2006. Saudi Aramco and TOTAL agreed to
form a joint-venture company in which Saudi Aramco and
TOTAL would each hold 35% and the remaining 30% would
be listed on the Saudi stock exchange, subject to the
approval of the relevant authorities, at the end of the FEED
(beginning of 2008). Start-up of the refinery is scheduled for
2011.
TOTAL launched studies for the construction of a deep
conversion unit or “coker” at the Port Arthur refinery in the
United States. This project is being designed to upgrade
heavy crudes and produce lighter products for a structurally
short American fuel market.
• Performance investments are designed to adapt TOTAL’s
refineries to changes in the European oil market: growing
demand for diesel and increasing supply of high-sulphur crudes.
The first project of this type is the construction of a distillate
hydrocracker (DHC) at the Normandy refinery in France. This
unit, whose construction began in the spring of 2004, came
on-stream successfully in 2006. The project represented a
total investment of approximately 550 M€ over the 2003-2006
period, and also included, the construction of a hydrogen
production unit.
TOTAL – Registration Document 2006 43