Registration document 2007 - Total.com

In 2006, the principal market benchmarks stood at historically high levels:
2006 2005 2004 min 2006 max 2006
Brent ICE Futures - 1st Line (a) ($/b) 66.11 55.25 38.04 57.87 (2-Nov) 78.30 (7-Aug)
Gasoil ICE Futures - 1st Line (a) ($/t) 580.4 507.9 347.5 510.5 (12-Jan) 668.8 (10-Aug)
VLCC Ras Tanura Chiba — BITR (b) ($/t) 14.52 13.91 19.97 8.35 (6-Apr) 27.21 (25-Jan)
(a) 1 st line: Quotation for first month nearby delivery ICE Futures.
(b) VLCC: Very Large Crude Carrier. Data estimated from BITR’s market quotations. BITR: Baltic International Tanker Routes.
Throughout 2006, the Trading division maintained a level of
activity similar to levels attained in 2004 and 2005, trading
physical volumes of crude oil and refined products amounting to
an average of approximately 5 Mb/d.
Shipping
The principal activity of the Shipping division is to arrange the
transportation of crude oil and refined products necessary for
Group activities. The Shipping division provides a wide range of
shipping services required by the Group to develop its activities
and maintains a rigorous safety policy. Like a certain number of
other oil companies and shipowners, the Group uses freight-rate
derivative contracts in its shipping activity in order to manage its
exposure to freight-rate fluctuations.
In 2006, the Shipping division of the Group chartered 3,170
voyages to transport approximately 127 Mt of oil. As of
December 31, 2006, the Group employs a fleet made up of sixtythree
vessels chartered under long-term or medium-term
agreements (including six LPG tankers). The fleet is modern, with
an average age of approximately five years and is predominately
comprised of double-hulled vessels.
Throughout 2006, world crude tanker tonnage increased by
4.9%.This was the fourth consecutive year of high-growth in
terms of available crude tonnage (+7.5% in 2005, +4.5% in 2004
and +5 % in 2003). Tonnage demand in 2006 was less sustained
than the year before, due to the slowdown in the growth of
global oil demand.
(1) Source: PIRA.
Business overview
Trading & Shipping - Downstream
2
These trends reinforce a structural surplus of available tonnage,
particularly in a situation where the orderbook reaches a historical
record, both in absolute value (124 million deadweight tons) and
as a percentage of the active fleet (30% of the global fleet,
between 30% and 65% according to the different tanker
segments).
On the crude tanker segment, after the seasonal rise observed
during the last quarter of 2005, the chartering markets dropped
significantly throughout the year 2006, apart from some volatile
peaks. Following a strengthening of freight rates during the
second and third quarter, the rates declined significantly after
August 2006, particularly for VLCCs. The situations in both the
crude and the petroleum products freight markets during the last
quarter of 2006 thus were not comparable to the historical level
observed at the end of 2004 and 2005.
The large number of deliveries expected in 2007, which should
not be offset by the demolition of ships, should lead to an
increase in tonnage supply (+5.8%) (1) greater than the increase in
ton-miles (+3%) (1) .
TOTAL – Registration Document 2006 49