Registration document 2007 - Total.com

4
Types of Risks
TOTAL’s activities involve certain industrial and environmental
risks which are inherent in the production of products that are
flammable, explosive or toxic. Its activities are therefore subject to
extensive government regulations concerning environmental
protection and industrial safety in most countries. For example, in
Europe, TOTAL operates sites that meet the criteria of the
European Union Seveso II directive for classification as high-risk
sites. Other sites operated by TOTAL in other parts of the world
involve similar risks.
The broad scope of TOTAL’s activities, which include drilling, oil
and gas production, on-site processing, transportation, refining,
petrochemicals activities, storage and distribution of petroleum
products, production of base chemical products and specialty
chemicals, involve a wide range of operational risks. Among
these risks are those of explosion, fire or leakage of toxic
products. In the transportation area, the type of risks depends
not only on the hazardous nature of the products transported,
but also on the transportation methods used (mainly pipelines,
maritime, river-maritime, rail, road), the volumes involved, and the
sensitivity of the regions through which the transport passes
(population density, environmental considerations).
Most of these activities involve environmental risks related to
emissions into the air, water or soil and the creation of waste,
and also require environmental site restoration after production is
discontinued.
Certain branches or activities face specific risks. In oil and gas
exploration and production, there are risks related to the physical
characteristics of an oil or gas field. These include eruptions of
crude oil or of natural gas, discovery of hydrocarbon pockets
with abnormal pressure, crumbling of well openings, leaks
generating toxic risks and risks of fire or explosion. All these
events could possibly damage or even destroy crude oil or
natural gas wells as well as related equipment and other
property, cause injury or even death, lead to an interruption of
activity or cause environmental damage. In addition, since
exploration and production activities may take place on sites that
are ecologically sensitive (tropical forest, marine environment,
etc.), each site requires a specific approach to minimize the
impact on the related ecosystem, biodiversity and human health.
TOTAL’s activities in the Chemicals segment and, to a lesser
extent, the Downstream segment may also have health, safety
and environmental risks related to the overall life cycle of the
products manufactured. These risks can arise from the intrinsic
characteristics of the products involved, which may, for example,
be flammable, toxic, or linked to the greenhouse gas effect. Risks
of facility contamination and off-site impacts may also arise from
emissions and discharges resulting from processing or refining,
84
Risk Factors
Industrial and environmental risks
Industrial and environmental risks
TOTAL – Registration Document 2006
and from recycling or disposing of materials and wastes at the
end of their useful life.
Risk evaluation
Prior to developing their activities and then on a regular basis
during the operations, business units evaluate the related
industrial and environmental risks, taking into account the
regulatory requirements of the countries where these activities are
located.
On sites with significant technological risks, analyses are
performed for new developments, updated in case of planned
significant modifications of existing equipment, and periodically
re-evaluated. To harmonize these analyses and reinforce risk
management, TOTAL has developed a group-wide methodology
which is being implemented progressively throughout the sites it
operates. In France, three pilot sites are developing Risk
Management Plans pursuant to the French law of July 30, 2003.
These plans will implement various urbanization measures to
reduce risks to urban environments surrounding industrial sites.
The texts implementing these aspects of the law of July 30, 2003
were published at the end of 2005 and during 2006.
Similarly, environmental impact studies are done prior to any
industrial development with a thorough initial site analysis, taking
into account any special sensitivities and plans to prevent and
reduce the impact of accidents. These studies also take into
account the impact of the activities on the local population,
based on a common methodology. In countries where prior
authorization and supervision is required, the projects are not
undertaken without informing the relevant authorities of the
studies.
For new products, risk characterizations and evaluations are
performed. Furthermore, life cycle analyses for related risks are
performed on certain products to study all the stages of a
product’s life cycle from its conception until the end of its
existence.
TOTAL’s entities actively monitor regulatory developments to
comply with local and international rules and standards for the
evaluation and management of industrial and environmental risks.
The Group’s environmental contingencies and asset retirement
obligations are discussed in Note 19 to the Consolidated
Financial Statements, page 207). Future expenses related to asset
retirement obligations are accounted in accordance with the
principles described in Note 1Q to the Consolidated Financial
Statements (page 178).